RETURN OF CAPITAL DISTRIBUTIONS OF REGULATED INVESTMENT COMPANIES.

SEC. 305. RETURN OF CAPITAL DISTRIBUTIONS OF REGULATED INVESTMENT COMPANIES.(a) In General.—Subsection (b) of section 316 is amended by adding at the end the following new paragraph:“(4) Certain distributions by regulated investment companies in excess of earnings and profits.—In the case of a regulated investment company that has a taxable year other than a calendar year, if the distributions by the company with respect to any class of stock of such company for the taxable year exceed the company’s current and accumulated earnings and profits which may be used for the payment of dividends on such class of stock, the company’s current earnings and profits shall, for purposes of subsection (a), be allocated first to distributions with respect to such class of stock made during the portion of the taxable year which precedes January 1.”.(b) Effective Date.—The amendment made by this section shall apply to distributions made in taxable years beginning after the date of the enactment of this Act.