Page:United States Statutes at Large Volume 48 Part 1.djvu/715

 73d C ONGRESS. SESS. II. CH. 277. MAY 10, 1934 . (4) taxes assessed against local benefits of a kind tending to in- crease the value of the property assessed ; but this paragraph shall not exclude the allowance as a deduction of so much of such taxes as is properly allocable to maintenance or interest charges. (d) TAXES O F SHAR EHOLDER PAID BY CORPORATION.-The de duct ion for taxes allowed by subsection (c) shall be allowed to a corporation in the case of taxes imposed upon a shareholder of the corporation upon his interest as shareholder which are paid by the corporation withou t rei mburs ement from the sh areho lder, but in such cases no deduction shall be allowed the shareholder for the amount of such taxes. (e) LOSSES BY INDIVIDUALS .-In the case of an individual, losses sustained during the taxable year and not compensated for by insur- ance or otherwise- 1) if incurred in trade or business ; or 2) if incurred in any transaction entered into for profit, though not connected with the trade or business ; or (3) of property not connected with the trade or business, if the loss arises from fires, storms, shipwreck, or other casualty, or f rom theft. No loss shall be allowed as a deduction under this paragraph if at the time of the filing of the return such loss has been claimed as a deduction for estate tax purposes in the estate tax return. (f) LOSSES BY CORPORATIONS .-In the case of a corporation, losses sustained during the taxable year and not compensated for by insur- ance or otherwise. (g) WAGERING LossEs .- Losses from wage ring t ransa ction s shal l be allowed only to the extent of the gains from such transactions. (h) BAS IS FOR DET ERM INI NG Loss .-The basis for determining the amount of deduction for losses sustained, to be allowed under subsection (e) or (f), shall be the adjusted basis provided in section 113(b) for determining the loss from the sale or other disposition of property. (I) L oss ON WAS H SALES OF STOCK OR SECuitrriES .-For disallow- ance of loss deduction in the case of sales of stock or securities where within thirty days before or after the date of the sale the taxpayer has acquired substantially identical property, see section 118. (j) CAPIT AL LossEs. -L oss es fr om sales or exchanges of ca pit al assets shall be allowed only to the extent provided in section 117(d). (k) BAD DEBT S .- Debts ascer taine d to be worthless and charged off within the taxable year (or, in the discretion of the Commissioner, a reasonable addition to a reserve for bad debts) ; and when satisfied that a debt is recoverable only in part, the Commissioner may allow such debt, in an amount not in excess of the part charged off within the taxable year, as a deduction. (1) DEPRECIATION.-A reasonable allowance for the exhaustion, wear and tear of propert y used i n the tr ade or bu siness, includin g a reasonab le allow ance for obsoles cence. In the case of property held by one person for life with remainder to another person, the deduc- tion sha ll be co mputed a s if the life te nant were the abs olute ow ner of the property and shall be allowed to the life tenant. In the case of property held in trust the allowable deduction shall be apportioned between the income beneficiaries and the trustee in accordance with the pertinent provisions of the instrument creating the trust, or, in the absence of such provisions, on the basis of the trust income allo- cable to each. (m) DEP LET ION .-In the case of mines, oil and gas wells, other natural deposits, and timber, a reasonable allowance for depletion and for depreciation of improvements, according to the peculiar con- 86637'-34 -44 689 INCOME TAX. COMPUTATION OF NET INCOME- Contd. Taxes of shareholder paid by corporation. L osse s by indi vid- uals. Business. N ot c onnec ted with tr ade or bu siness. Casual ty los ses no t connect ed with busi- ness. Disallowed, if deduct- ed for estate tax pur- poses. Losses by corpora tions wagering losses. Basis for determining loss. Post, p . 709. Disall owance of l oss on wash sales of stock, etc. Post, p. 715 Capital losses. Post,p.715. Bad debts. Exhaus tion, etc ., of business property. Life est ates. Property in trust. Mines, oil and gas wells, timber, etc. Reasonable a llow- ance for depletion, etc.