[Title 26 CFR 1.941-2]
[Code of Federal Regulations (annual edition) - April 1, 2002 Edition]
[Title 26 - INTERNAL REVENUE]
[Chapter I - INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY]
[Subchapter A - INCOME TAX (CONTINUED)]
[Part 1 - INCOME TAXES]
[Sec. 1.941-2 - Meaning of terms used in connection with China Trade Act corporations.]
[From the U.S. Government Printing Office]


26INTERNAL REVENUE102002-04-012002-04-01false1.941-2Sec. 1.941-2INTERNAL REVENUEINTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURYINCOME TAX (CONTINUED)INCOME TAXES
Sec. 1.941-2  Meaning of terms used in connection with China Trade Act corporations.

    (a) A China Trade Act corporation is one organized under the 
provisions of the China Trade Act, 1922 (15 U.S.C. chapter 4).
    (b) The term ``special dividend'' means the amount which is 
distributed as a dividend to or for the benefit of such persons as on 
the last day of the taxable year were resident in Formosa, Hong Kong, 
the United States, or possessions of the United States, or were 
individual citizens of the United States, and owned shares of stock of 
the corporation. Such dividend must be distributed prior to or at the 
time fixed by law for filing the return of the corporation, including 
the period of any extension of time granted under rules and regulations 
prescribed by the Commissioner with the approval of the Secretary or his 
delegate. Such special dividend does not include any other amounts 
payable or to be payable to such persons or for their benefit by reason 
of their interest in the corporation and must be made in proportion to 
the par value of the shares of stock of the corporation owned by each.
    (c) For the purposes of section 941, the shares of stock of a China 
Trade Act corporation are considered to be owned by the person in whom 
the equitable right to the income from such shares is in good faith 
vested.
    (d) ``Taxable income derived from sources within Formosa and Hong 
Kong'' is the sum of the taxable income from sources wholly within 
Formosa and Hong Kong and that portion of the taxable income from 
sources partly within and partly without Formosa and Hong Kong which may 
be allocated to sources within Formosa and Hong Kong. The method of 
computing this income is similar to that described in part I (section 
861 and following), subchapter N, chapter 1 of the Code, and the 
regulations thereunder.