REPEAL OF PROVISIONS RELATING TO CHINA TRADE ACT CORPORATIONS.

SEC. 1053. REPEAL OF PROVISIONS RELATING TO CHINA TRADE ACT CORPORATIONS. (a) Phaseout of Section 941.— Section 941 (relating to special deductions for China Trade. Act corporations) is amended by adding the following new subsection: “(d) Phaseout of Deduction.— In the ease of a taxable year beginning after December 31, 1975, and before January 1, 1978, the amount of the special deduction under subsection (a)(determined without regard to this subsection) shall be reduced by the percentage reduction specified in the following table: “For a taxable year beginning in— The percentage reduction shall be— 1976 33⅓ 1977 66⅔ (b) Phaseout of Section 943.— Section 943 (relating to the exclusion of certain dividends to residents of Formosa or Hong Kong) is amended by adding at the end thereof the following new sentence; “In the, case of a taxable year beginning after December 31, 1975. and before January 1, 1978, the amount of the distributions which are excludable from gross income under this section (determined without 90 STAT. 1649regard to this sentence) shall be reduced by the percentage reduction specified in the following table: “For a taxable year beginning in— The percentage reduction shall be— 1976 33⅓ 1977 66⅔ (c) Repeal.— Subpart E of part III of subchapter N of chapter 1 (relating to China Trade Act corporations) is hereby repealed. (d) Technical and Conforming Amendments.— (1) Section 116(b) is amended by striking out paragraph (1) and redesignating paragraphs (2) and (3) as paragraphs (1) and (2). respectively. (2) Section 1504(b) is amended by striking out paragraph (5). (3) Section 6072 is amended by striking out subsection (e). (4) Section 6091(b)(2)(B)(iij is amended by striking out the comma after “trade corporations)” and inserting in lieu thereof “or” and by striking out “or section 941 (relating to the special deduction for China Trade Act corporations),”. (5) The table of subparts for part III of subchapter N of chapter 1 is amended by striking out the item relating to subpart E. (e) Effective Dates.— The amendments made by subsections (a) and (b) shall apply with respect to taxable years beginning after December 31, 1975. The amendments made by subsections (c) and (d) shall apply with respect to taxable years beginning after December 31, 1977.