Page:United States Statutes at Large Volume 44 Part 1.djvu/826

 § 936 aorta 26.-»~11vz lk the fair market value of the (assets of the corporation as o that date. L ` (e) Tile basis upon which depletion, exhaustion, wearan tear, and GbS0}8$C€HGB1.&f€ to he allowed in respect of an prewrty shell be the same as la provlcleil in subdivision (a or (lx) for the purpose of l determlningfl the gain or Ions apo the wie or other disposition of each property, except that. 1; ine case of mineek oil aud gaewells, aiecovereo by the ta: peayer after February 28, 1913, and not acquired as`H1e result o paevhaee of a proven tract or lease, where the Hit marks mine of the property la materially dlsproportloqiiii to the-coe1 the basis for d;e§etloh shall be the fair marke alue of th pmperty at the date of discoéery 0: within thiijty days there after; but such depletion allowance based on o1scove¤·y·va11i shall not exceed 56 per centum oft the net income · (compute without allowance for depletion) from the property upo anhieh 2the—dieeovez·y was made, except that in no case ghall ith depletion allowance be less than it would be lt computed wltl out reference to discovery value. (June -2, l924{-4,01-11. m ' e.234,$§204,43-Stat. 258.). l _ 1 936; %¤irement of i;;ventoi·ies,——Whenever in the oplnlo of the Ci9Bl.H1i§i0i1€1‘ ot Internal Revenue the aseaot inventorie is necweary in order clearly to determine (the `income oft an taxmyer, mveritoriee shall be taken by auch taxpayer upo: such basis as. the commissioner, with the approval ot the Sect: taiy ot the Treasury,  prea·i:i·ibe_, as conforrhing as neail as may be to the best accounting ppactice an the tiade or brief ness and as moat clearly tedecting the income. (June 1 " 1924,1.01 p. rn., c. @4, { 205, 43_Stat. 26d;) _ "· p, '_ . 937. Net losses; determination of.¢—'(a) As used iq; this wa tion the term " net loss " means the eizcess Qof the deduction allowed by section 955 or 986 of this title over {the groée ix come, with the following exceptions and limitations: . I » (1) Deductions otherwise allowed byllaw not attributabl to the operation ot a trade or business regularly carried on bi the taxpeyer shall be allowed oulyfto the extent of the amour: of the gross income-not derived- from -$l1t3h“lZIl&d8 or business`; 1 (2) In the case of a taxpayer other Ythau a` corporation: deductions for capital losses otherwise; allowed by law ishall b allowed only fo the extent- of tlielcapltal gains; . · · (3) The deduction for depletion shall hot exceed the amgun which; would be allowable it compluted without referencelto dis eovery valneg .  — 5 _~ _ . V,   _. · (4) The deduction provided for ln paragraph (Q) of sat division (a) ot aeetiou 986 of amounts received aewdlyldend shall not be allowed; d‘ y ` _ .:(§) There shall he included in computing gross? income th amoant of interest recelived free from tak quder this title deereasw by the axnountot lntermt paid orraccrued audlome ce ausmined which is not allowed as a · deduction by paragrapl L2) of subdivision (n) ot section 955 or by paragraph (2). o subdivision (a) of section 986. A ” A . . (b) It, for any taxable year, it appears upon the productim ot evidence satisfactory tg the Commissioner of Interns Revenue that fn! taxpayei has sustained so net  loss, thammant thereo shall be allowed . as a d&_nctloa in compatim the mt income of the taxpayer for the succeeding taxable yea (hereinafter in this section called f' second year "), and it suc} net louis in excus of such not income (computed without nucl deduction), the amount ot auch exexa shall be allowed as 1 deduction) in computing the net·= iaisome Jo: the next succeedim taxable yar thengeinafter in this section mlled “ third yar ") the deduction {mall cases to be moe under regulations pre -ec:·ib~ed by the said commissioner with the approval of tm Secretaty of the Tnmsury. ” ‘ A “, ·(c)·· (1) It in the seeond year the taxpayez·A(other than 1 corporation ) enstalns a capital net l•s, the deduction allowe1

'ERNAL army Us 812 »! by wbdivisien (b) et this secticm shall drst he applied as a _ deduction in computing the ordinary het income ter such year. d It the deduction ie ih excese et the ordinary net income (com. y pmed without such deductlem then the amemn: of Such excess ) shall beiallewed as a deductiedin computing het income for me u thifd YBEI'. ` u (2) It in the second year they taxpayer (other than n cer- K, pordtiou) has a capital net gain, the deductie; allowed by sub- ,g division (b) QI this section shall mst. be smiled as n deduce ,t tier; tin computing the »erdiBIry net income for meh year. IE V the dmuction is in cxcesydf the ordinary net income (com- 2 pated without duck rgeeecraeuy the ambunt df __  exceed ,_ shall xiext be gpppea against the capital net lain for such yea; L and it Pin exceed et Lbelrapilial net gum ctlse amount et mei d excess shall be allowedjjns s deduction in computing net inn_ come for the third year; · · A  , L6 e ,(d) ..1tL any portion etja §Qt'l06S_i8” allowed}; s deddetien is r_ computing net inceme for the_thi1id_`y@r, rmder th? piivisieuc - , /0t eitherlsubdlvisien (rd} or (c), and the tupsymr ot r tired ’°° a’ corporation) has ih such yegr s, enpitshhetgnia er a capital l _}'l€t'10SS, then' the method ot allowing su& dcd¤% in meh Y r (e) It {gr the tdxable year 1% s taxpayer  an n duct loss inexcess efhisnetincemier   yur 192; (such net   net   ben;   under the 3; Revenue Act ot i921),,_ che I1¤0%lBt·¢0!‘ duch cxx rmi! he ¤l· li lewed as a deduétion in computing not meme ter the tnubk Z year; 1924 ill accerdhhceawith me method prevl% in mbdb ' visions (b) and (c) or this  1 _ · _ · T loss withh1__the provisions et     Act of 19E, the `S amounted! such net loss shall be   as sl   in eem· F. putiug net income for the two succeeding mum years to the same extent and in the same manner as • net less smaincd °, for one taxable year isi, under this chhpter, allowed as` an d&i1c· Y tion for the two succeeding taxable yw ‘ A Q? l (g) Iffa taxpayer makes return ters period   in ` one calendar gear (hereinafter in this subdivision called '* calendar year") and ending. hr the following cawdsr G (hereinafter in this subdivision called. "   calendar year ") and the law applicable- to the second; calendar your is diHerent· ”t from the law appliésble to the drstcslendanr year; tha his ’T net- loss for the period chdir}; during the second mbndsr year éhall be the sum of: (1)‘ the same I)!(i§§}1‘tfoB of dd mf ldvb " for the entire period, determined under tho lam: apwhbh te S . the Brat calendar ygér, which the portion of swhc pqied tnllim within such calendar year is of the entire   and (2) the 8 same proportion ct. A net lem fer rho entire paied, determimd 5. imder the? law applicable to the   calendar year, rwhleh ·S the portion of meh period Ialllni within haw calendar ywr h lsof theentlreperiod. . »_ . · X v_ _ »f- (h); The berxedt efthie section shell be allowed tc tm mm-· - hers of a partnership, tn· an atnté er   and te i§8B!8& n companler subject  the tn! i by scétleu 1001 or 1®§ L1 oi thi; title, mder regulations  by the e ot Internal Revenue iltlrdxe npprmral et the1Secretary et the I Tregmry. · (Jdge $._1®4, 4.01_ mm., c. @$,.1 M8, 43 Stat. 2m.) r 988. Amezmt `bt tax fer  lyeer iith diternl rates.-·¥ tx (a) It the taxpayer makes retur¤_ter`d·peried bwlnning in tn one calendar {year (herefnatter in this subdivision called. “Brat 1 mlenddr year ”) n.¤d__e¤di¤g in the following calendar ymr r (lierelnarter in this suhdivlsien called “ secedd calender year ”)
 * third yegr shell be the  gs 'prcwided is mbdiviém (c},
 * _ (t)_ Ii forthe taxable year 19% si tnmnrer @i¤ed q net
 * " and the law applicable to the second calendar yar is dwqeut

>·, {rem the law applicable to the Brat calendar yur, then his tix e under this chapter for the period ending dqring the second cnlendhrjcar shall.be the cum rot: (1) the 'emhe preportier 1 of a tax fer the entire period, determined under the law 1 applicable to the tlret calendar yearsmd `atlhe rdtes for such