[Code of Federal Regulations]
[Title 26, Volume 9]
[Revised as of April 1, 2002]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR1.853-3]

[Page 43-44]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 1--INCOME TAXES--Table of Contents
 
Sec. 1.853-3  Notice to shareholders.

    (a) General rule. If a regulated investment company makes an 
election under section 853(a), in the manner provided in Sec. 1.853-4, 
the investment company is required, under section 853(c), to furnish its 
shareholders with a written notice mailed not later than 45 days (30 
days for taxable years ending before February 26, 1964) after the close 
of its taxable year. The notice must designate the shareholder's portion 
of foreign taxes paid to each such country or possession and the portion 
of the dividend which represents income derived from sources within each 
such country or possession. For purposes of section 853(b)(2) and 
paragraph (b) of Sec. 1.853-2, the amount that a shareholder may treat 
as his proportionate share of foreign taxes paid and the amount to be 
included as gross income derived from any foreign country or possession 
of the United States shall not exceed the amounts so designated by the 
company in such written notice. If, however, the amount designated by 
the company in the notice exceeds the

[[Page 44]]

shareholder's proper proportionate share of foreign taxes or gross 
income from sources within any foreign country or possession, the 
shareholder is limited to the amount correctly ascertained.
    (b) Shareholder of record custodian of certain unit investment 
trusts. In any case where a notice is mailed pursuant to paragraph (a) 
of this section by a regulated investment company with respect to a 
taxable year of the regulated investment company ending after December 
8, 1970 to a shareholder of record who is a nominee acting as a 
custodian of a unit investment trust described in section 851(f)(1) and 
paragraph (b) of Sec. 1.851-7, the nominee shall furnish each holder of 
an interest in such trust with a written notice mailed on or before the 
55th day following the close of the regulated investment company's 
taxable year. The notice shall designate the holder's proportionate 
share of the amounts of foreign taxes paid to each such country or 
possession and the holder's proportionate share of the dividend which 
represents income derived from sources within each country or possession 
shown on the notice received by the nominee pursuant to paragraph (a) of 
this section. The notice shall include the name and address of the 
nominee identified as such. This paragraph shall not apply if the 
regulated investment company agrees with the nominee to satisfy the 
notice requirements of paragraph (a) of this section with respect to 
each holder of an interest in the unit investment trust whose shares are 
being held by the nominee as custodian and not later than 45 days 
following the close of the company's taxable year, files with the 
Internal Revenue Service office where such company's return for the 
taxable year is to be filed, a statement that the holders of the unit 
investment trust with whom the agreement was made have been directly 
notified by the regulated investment company. Such statement shall 
include the name, sponsor, and custodian of each unit investment trust 
whose holders have been directly notified. The nominee's requirements 
under this paragraph shall be deemed met if the regulated investment 
company transmits a copy of such statement to the nominee within such 
45-day period: Provided however, if the regulated investment company 
fails or is unable to satisfy the requirements of this paragraph with 
respect to the holders of interest in the unit investment trust, it 
shall so notify the Internal Revenue Service within 45 days following 
the close of its taxable year. The custodian shall, upon notice by the 
Internal Revenue Service that the regulated investment company has 
failed to comply with the agreement, satisfy the requirements of this 
paragraph within 30 days of such notice.

[T.D. 7187, 37 FR 13257, July 6, 1972]