Page:United States Statutes at Large Volume 48 Part 1.djvu/796

 770 73d C ONGRESS. SESS. II. CH. 277 . MAY 10, 1934. CAPITAL D EL EXCESS- STOCK (e) Returns required to be filed for the purpose of the tax imposed PR OFI TS TAXESby this section shall be open to inspection in the same manne r, Returns open to offi- cial inspection. to the same extent, and subject to the same provisions of law, includ- Vol.44,p.10. ing penalties, as returns made under Title II of the Revenue Act of 1926. Basis for cap ital stoc k (f) For the first year ending June 30 in respect of which a tax tag. Comput ation, for is imposed by this section upon any corporation, the adjusted first year. declared value shall be the value, as declared by the corporation in its first return under this section (which declaration of value cannot be amended), as of the close of its last income-tax taxable year end- ing at or prior to the close of the year for which the tax is imposed by this section (or as of the date of organization in the case of a corp orat ion h aving no incom e-tax taxa ble year endin g at or p rior to the close of the year for whic h the tax is impos ed by thi s section ) . Subsequent years. For any subsequent year ending June 30, the adjusted declared value in the case of a domestic corporation shall be the original declared Cash and fair market value plus (1) the cash and fair market value of property paid in value paid in for stock, etc. for stock or shares, (2) paid in surplus and contributions to capital, Pad in s eplus, etc. (3) its ne t income, (4) the excess of its income wholly exempt from the taxes imposed by Title I over the amount disallowed as a deduc- Div ide nd ded uct ion tion by section 24 (a) (5) of such title, and (5) the amount of the for income tag. Minus property, dividen d dedu ction allowa ble fo r inco me tax purpos es, an d minu s (A) earnings or profits, et c. , the value of property distributed in liquidation to shareholders, (B) distribution . distributions of earnings or profits, and (C) the excess of the deduc- Adj ust men ts made tions allowable for income tax purposes over its gross income ; adjust- annually. ment being made for each inco me-t ax ta xable year inc luded in t he period from the date as of which the original declared value was declared to the close of its last income-tax taxable year ending at or prior to the close of the year for which the tax is imposed by this section. The amount of such adjustment for each such year shall be compute d (on the ba sis of a sep arate return) accor ding t o the income tax law applicable to such year. For any subsequent year ending June 30, the adjusted declared value in the case of a foreign corpora- tion shall be the original declared value adjusted (for the same income-tax taxable years as in the case of a domestic corporation), in accordance with regulations prescribed by the Commissioner with the appro val of th e Secreta ry, to re flect inc reases or decrease s in the capital employed in the transaction of its business in the United States. Excess-profits tax. SEC. 702. EX CES S-PR OFI TS TAX. Levy upon net in- (a) There is hereby imposed upon the net income of every corpora- come of corporation taxable under capital tion, f or eac h inco me-tax taxab le yea r endin g afte r the close of the stock tax. first year in respect of which it is taxable under section 701, an excess- Computation. profits tax equivalent to 5 per centum of such portion of its net income for such income-tax taxable year as is in excess of 12 1/2 per centum of the adjusted declared value of its capital stock (or in the case of a foreign corporation the adjusted declared value of capital employe d in t he tra nsacti on of its bu siness in the Unite d Stat es) as of the close of the preceding income-tax taxable year (or as of the date of organization if it had no preceding income-tax taxable year) Fraction of year. determined as provided in section 701. If the income-tax taxable year in respect of which the tax under this section is imposed is a period of less than 12 months, such adjusted declared value shall be reduced to an amount which bears the same ratio thereto as the number of months in the period bears to 12 months. For the pur- poses of this section the net income shall be the same as the net income for income tax purposes for the year in respect of which the tax under this section is imposed.