NORTH CAROLINA GENERAL ASSEMBLY

1971 SESSION

 

 

CHAPTER 820

HOUSE BILL 1082

 

 

AN ACT TO PROVIDE CORPORATE SHAREHOLDERS OF REGULATED INVESTMENT COMPANIES THE SAME TREATMENT AS NOW PROVIDED FOR INDIVIDUAL SHAREHOLDERS, TO ALLOW REGULATED INVESTMENT COMPANIES TO EXCLUDE DISTRIBUTIONS MADE TO SHAREHOLDERS FROM INCOME TAX AND TO PROVIDE SAME TREATMENT TO REAL ESTATE INVESTMENT TRUSTS AS FOR REGULATED INVESTMENT COMPANIES.

 

The General Assembly of North Carolina enacts:

 

Section 1.  G.S. 105-130.5 is amended by adding a new subdivision in the proper order at the end of subsection (b), which shall read as follows:

"With respect to a shareholder of a regulated investment company, the portion of undistributed capital gains of such regulated investment company included in such shareholder's Federal taxable income and on which the Federal tax paid by the regulated investment company is allowed as a credit or refund to the shareholder under Section 852 of the Internal Revenue Code."

Sec. 2.  G.S. 105-130.12 is rewritten to read as follows:

"§ 105-130.12.  Regulated investment companies and real estate investment trusts. — Any organization or trust which, in the opinion of the Commissioner of Revenue of North Carolina, qualifies as either a 'regulated investment company' under the provisions of United States Code Annotated Title 26, § 851, or as a 'real estate investment trust' under the provisions of United States Code Annotated Title 26, § 856, and which files with the North Carolina Department of Revenue its election to be treated as a 'regulated investment company', or as a 'real estate investment trust' shall be taxed under this division upon only that part of its net income which is not distributed or declared for distribution to shareholders during the income year or by the time required by law for the filing of the return for the income year including the period of any extension of time granted for filing such return."

Sec. 3.  The third paragraph of G.S. 105-125 is hereby rewritten to read as follows: "Provided, that any corporation doing business in North Carolina which in the opinion of the Commissioner of Revenue of North Carolina qualifies as a 'regulated investment company' under the provisions of United States Code Annotated Title 26, section 851, or as a 'real estate investment trust' under the provisions of United States Code Annotated Title 26, § 856, and which files with the North Carolina Department of Revenue its election to be treated as a 'regulated investment company' or as a 'real estate investment trust,' shall in determining its basis for franchise tax be allowed to deduct the aggregate market value of its investments in the stocks, bonds, debentures, or other securities or evidences of debt of other corporations, municipalities, governmental agencies or governments."

Sec. 4.  This act shall become effective with respect to taxable income years beginning on and after January 1, 1971.

In the General Assembly read three times and ratified, this the 12th day of July, 1971.