Page:United States Statutes at Large Volume 42 Part 1.djvu/285

 SIXTY-SEVENTH CONGRESS. Sess. I. Ch. 136. 1921. 257 (14) If propert is compulsoril or involuntaril converted into “'°°“ "*¥· cash or its equivalient as a result oi (A) its destructiiin in whole or in ¤¤iiif;·°°dc·i¤ii°$i¤istiiV°(i} part, (B) theft or seizure, or (C) an exercise of the ower of requisi— p“’p°rYyj tion or condemnation, or the threat or imminence tliereof; and if the °°”d’°‘°°S °”“s° °" taxpayer proceeds forthwith in good faith, under regulations prescribed by the Commissioner with the approval of the Secretary, to expend the proceeds of such conversion in the acquisition of other property of a character similar or related in service or use to the property so converted, or in the acquisition of 80 per centum or more of the stock or shares of a corporation owning such other property, or in the establishment of a replacement fund, then there shal be allowed as a deduction such portion of the gain derived as the portion of the proceeds so ex ended bears to the entire proceeds. _ The tprovisions of this paragraph prescribing the conditions under n$£°u°°b1° t° P“°' whic a deduction may c taken in respect of the proceeds or gains derived from the compulsory or involuntary conversion of property into cash or its equivalent, shall apply so far as may be practicable to the exemption or exclusion of such proceeds or gains from oss income under prior income, war-profits and excess-profits tax ilcts. _ (b) In the case of a foreign corporation or of a corporation entitled p°IQ§{§,’§§· "°‘* °°" to the benefits of section 262 the deductions allowed in subdivision A¤¤*=;¤¤*;§ gg (a) shall be allowed only if and to the extent that they are connected (sims aiiims. m with income from sources within the United States; and the proper apportionment and allocation of the deductions with respect to sources within and without the United States shall be determined as provided in section 217 under rules and re lations prescribed by the Commissioner with the approval of the gecretary. · rrnms Nom DEDUCTIZBLE nr conronarions. I¢¤¤¤S¤¤*¤¤¤¤¤¤¤¤¤· Sec. 235. That in computing net income no deduction shall in ,,,§§f“‘°“b" “"“"‘°’ any case be allowed in respect of any of the items specified in sec- M*¢»P·2·¤· tion 215. cnnnrrs ALLOWED COBPORATIONS. °'°°“’ °"°"°°‘ Sec. 236. That for the(purpose only of the tax imposed by section D°“"““°" °" 230 there shall be allowe the following credits: (a) The amount received as interest upon obligations of the United ,§,§‘;,°u'°§§,?§,g°d““’ States and bonds issued by the War Finance orporation, which is included in gross income under section 233; Domesm wpm_ (b) In the case of a domestic corporation the net income of which um. is $25,000 or less, a s eciiic credit of $2,000; but if the net income is .,,,%,p§°¤ig%;, f:{li more than $25,000 tli)e tax im d by section 230 shall not exceed the tax which would be payable if the $2,000 credit were allowed, plus the amount of the net income in excess of $25,000; and _ wumdmmpm (c) The amount of any war-profits and excess-profits taxes un- mm. _ posed by Act of Congress for the same taxable year. The credit D°*°"""""‘°“°'· allowed by this subdivision shall be determmed as follows: ra nm, nu WL (1) In the case of a corporation which makes return for a fiscal mgmmi. year beginning in 1920 and ending m 1921_, m computing the mcome tax as provided in subdivision (a) of section 205, the portion of the war-profits and excess-profits tax computed for the entntzperiod under clause (1) of subdivision (a) of section 335 shall be cred: _ aglainst the net income computed for the entire period as provided m c ause (1) of subdivision (a) of section 205, and the portion of the war-profits and excess-profits tax computed for the entiregdperiod under clause (2) of subdivision (a) of section 335 shall be cr _ 1ted_agaiust the net income computed for the entire period as provided m clause (2) of subdivision a of section 205. (2) In the izase of a corporation which makes return for a fiscal ;,,§`§.}]‘&T"°"“’°' year beginning in 1921 and ending in 1922, m computing the mcome 42150°——23-—17