Page:United States Statutes at Large Volume 45 Part 1.djvu/882

 SEVENTIETH CONGRESS. Suss. I. CH. 852 . 1928 . Supplement D-Returns and Payment of Tax [Suppleme ntary to Subtitle B, Part V I S EC. 1 41 . CON SOLIDAT ED RET URNS OF CORPOR ATIONS -1929 A ND SUBSEQUENT TAXABLE YEARS. (a) Privilege to file consolidated returns .-An affiliated group of corpor ations shall, subj ect to the p rovisio ns of this s ection , have the privilege of making a consolidated return for the taxable year 1929 or any subsequent taxable year, in lieu of separate returns. The making of a consolidated return shall be upon the condition that all the corporations which have been members of the affiliated group at any time during the taxable year for which the return is made consent to all the regulations under subsection (b) prescribed prior to the making of such return ; and the making of a consolidated return shall be considered as such consent. In the case of a cor- poration which is a member of the affiliated group for a fractional part of the year the consolidated return shall include the income of such corporation for such part of the year as it is a member of the affiliated group. (b) Re gul at ion s .-The Commissi oner, with the appro val of the Secret ary, s hall p rescri be suc h regu lations as he may d eem ne cessar y in order that the tax liability of an affiliated group of corporations making; a consolidated return and of each corporation in the group, both during and after the period of affiliation, may be determined, computed, assessed, collected, and adjusted in such manner as clearly to reflect the income and to prevent avoidance of tax liability. (c) Computation and payment of tax .-In any case in which a consoli- dated return is m ade the tax shall be determined, compute d, assessed, collected, and adjusted in accordance with the, regulations under subsection (b) prescribed prior to the date on which such return is made. Only one specific credit, computed as provided in secti on 26( b), sh all be allow ed in computi ng the tax. (d) Definition of "affiliated group" .-As used in this section an " affiliated group " means one or more chains of corporations con- nected through stock ownership with a common parent corporation if- (1) At least 95 per centum of the stock of each of the corpora- tions (except the common parent corporation) is owned directly by one or more of the other corpo ration s ; a nd (2) The common parent corporation owns directly at least 95 per centum of the stock of at least one of the other corporations. As used in this subsection the term " stock " does not include nonvot- ing stock which is limited and preferred as to dividends. (e) A consolidated return shall be made only for the domestic corporations within the affiliated group. An insurance company subject to the tax imposed by section 201 or 204 shall not be included in the same consolidated return with a corporation subject to the tax impo sed by se ction 13. (f) China Trade Act corporations .-A corporation organized under the China Trade Act, 1922, shall not be deemed to be affiliated with any other corpor ation within the m eaning of thi s sect ion. (g) .Corporations deriving income from possessions of United States .- For the purposes of this section a corporation entitled to the bene- fits of section 251, by reason of receiving a large percentage of its income from possessions of the United States, shall be treated as a fore ign co rporat ion. 831 INCOME TAX Returns and pa y- ment of tax. Consolidated returns, 1929, and su bsequent years. Affiliated corpora- tions may make, in lieu of separate. Consent of all mem- bers. Regu latio ns t o det er- mine tax liability. Com putat ion of as- sessments . Only one specific credit. Ante, p. 803 . Corporations deemed affiliated. Sto ck ow ners hip of members. Of paren t co rpor a- tion. Nonvoting stock not included. Applicable only for domestic corporations . Insurance companies not included . China trade corpora- tions not affiliated. Corporations in United States posses- sions deemed foreign. Post, p. 850.

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