Page:United States Statutes at Large Volume 47 Part 1.djvu/219

 72d CONGRESS. SESS. I. CH. -209. JUNE 6, 1932 . 195 solely of amounts received from public taxation, amounts received INCOME TAX from assessments upon the teaching salaries of members, and income in respect of investments. SEC. 104. ACCUMULATION OF SURPLUS TO EVADE SURTAXES. Accumulation of sur- pl us to evade surtaxes . (a) If any corpo ration, however created or organ ized, is formed or corpor ations a mass- availed of for the purpo se of pr eventing the imp osition of the s urtax ing gaits, et a, to avoid surtax to members. upon its shareholders through the niediuni of permitting its gains and profits to accumulate instead of being divided or distributed, there s hall be levied, c ollected, and pa id for e ach taxa ble year upon the net income of such corporation a tax equal to 50 per centum Ad dit io nal tax to of the amount thereof, which shall be in addition to the tax imposed CO Ante ora tio n x ' by section 13 and shall be computed, collected, and paid upon the same basis and in the same manner and subject to the same provisions of law, including penalties, as that tax. (b) The fact that any corp hold ing oratio n is a me re holdi ng or in vestment Evidenc e. of a put- compa ny, o r that the gains or p rofits are permi tted t o acc umula te pose of ex anion. beyon d the reaso nable need s of the bu sines s, sh all be prim a fac ie evidence of a purpose to escape the surtax. (c) As used in this section the term "net income" means the net fine "d . Net inc ome " de* income as defined in section 21, increased by the sum of the amount An te, pp . 178,182 . of the dividend deduction allowed un der section 23(p) and the amoun t of the in teres t on oblig ations of t he Un ited S tates issu ed after September 1, 1917, which would be subject to tax in whole or in part in the hands of an individual owner. (d) The tax imposed by this section shall not apply if all the Additional tax not applicable if distribu- shareholders of the corporation include (at the time of filing their fiv e sh are inc lude d in returns) in their gross income their entire distributive shares, income ofshareholders. whether distributed or not, of the net income of the corporation for such year. Any amount so included in the gross income of a share- holder shall be treated as a div idend re ceived. Any subsequent dis- tiongb sequent distribu • tribution made by the corporation out of the earnings or profits for such taxable year shall, if distributed to any shareholder who has so included in his gross income his distributive share, be exempt from tax in the amount of the share so included. SEC. 105. TAXABLE PERIOD EMBRACING YEARS W ITH DIFFERENT bracingyearsrwiitth d 1. LAWS. ferent laws. Computation of tax If it is necessary to compute the tax for a period beginning in one for period in one calen- calendar year (hereinafter in this section called " first calendar dart ye ar and ending in year ") and ending in the following calendar year (hereinafter in this section called ` second calendar year ") and the law applicable to the second calendar year is different from the law applicable to the fir st calen dar year, then th e tax un der this title f or the p eriod ending during the second calendar year shall be in the sum of : (1) the same proportion of a tax for the entire period, determined under the law applicable to the first calendar year and at the rates for such year, which the portion of such period falling within the first calen- dar year is of the entire period ; and (2) the same proportion of a tax for the ent ire perio d, deter mined un der the law appl icable t o the second calendar year and at the rates for such year, which the or- tion of such period falling within the second calendar year is o?the entire period• Supplement B-Computation of Net Income income . Computation of net [Supplementary to Subtitle B, Part II] SEC. 111. DETE RMINATION OF AMOUNT OF GAIN OR LOSS. Gain or loss. (a) COMPUTATION OF GA IN OR Loss.--Except as hereinafter pro- ing~on f0disposa al l of vided in this section, the gai n from t he sale o r other disposit ion of property i