[Code of Federal Regulations]
[Title 26, Volume 10]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR1.941-1]

[Page 199]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 1_INCOME TAXES--Table of Contents
 
Sec. 1.941-1  Special deduction for China Trade Act corporations.

    In addition to the deductions from taxable income otherwise allowed 
such a corporation, a China Trade Act corporation is, under certain 
conditions, allowed an additional deduction in computing taxable income. 
This special deduction is an amount equal to the proportion of the 
taxable income derived from sources within Formosa and Hong Kong 
(determined without regard to this section and determined in a manner 
similar to that provided in part I (section 861 and following), 
subchapter N, chapter 1 of the Code, and the regulations thereunder) 
which the par value of the shares of stock of the corporation, owned on 
the last day of the taxable year by (a) persons resident in Formosa, 
Hong Kong, the United States, or possessions of the United States, and 
(b) individual citizens of the United States wherever resident, bears to 
the par value of the whole number of shares of stock of the corporation 
outstanding on that date. The decrease, by reason of such deduction, in 
the tax imposed by section 11 must not, however, exceed the amount of 
the special dividend referred to in section 941 (b), and is not 
allowable unless the special dividend has been certified to the 
Commissioner by the Secretary of Commerce.