Page:United States Statutes at Large Volume 49 Part 1.djvu/1721

 1676 74TH C ONGRESS. SESS. II. CH. 690 . JUNE 22, 1936 . ness for the common benefit of the members, but only if the mem- hers thereof include (at the time of filing their returns) in their gross income their entire pro-rata shares, whether distributed or not, of the net income of the association or corporation for such year. Any amount so included in the gross income ofa member shall be treated as a dividend received. Surtax on corpora- tions improperly accu- mulating surplus. SEC. 102. SURTAX ON CORPORATIONS IMPROPERLY ACCUMULATING SURPLUS. Tax impos ed. (a) IMPOSITION OF TAX .-There shall be levied, collected, and paid for each taxable year (in addition to other taxes imposed by this title) upon the net income of every corporation (other than a per- Post, p. 1732. sonal holding company as defined in section 351) if such corporation, however crea ted or organized, is fo rmed or availed of for the pur- pose of preventing the imposition of the surtax upon its shareholders or the shareholders of any other corporation, through the medium of permitting earnings or profits to accumulate instead of being divided or distrib uted- Rates. (1) In the case of corporations not subject to the surtax on undistributed profits imposed by section 14, a surtax equal to the sum of the following 25 per centum of the amount of the retained net income not in excess of $100,000, plus 35 per centum of the amount of the retained net income in excess of $100,000. (2) In the case of corporations subject to the surtax on undis- tributed profits imposed by section 14, a surtax equal to the sum of the following : 15 per centum of the amount of the retained net income not in excess of $100,000, plus 25 per centum of the amount of the retained net income in excess of $100,000. Evidence of purpose (b) PRIMA FACIE EVIDENCE .-The fact that any corporation isa ofevasion. mere holding or investment company, or that the earnings or profits are permitted to accumulate beyond the reasonable needs of the busi- ness, shall be prima facie evidence of a purpose to avoid surtax upon shareholders. De finition s. (c) DEFINITIONS .-As used in this title- "Special adjusted net (1) SPECIAL ADJUSTED NET INCOME .-The term "special adjusted income ." net income" means the net income minus the sum of- Taxes. (A) TAxEs .-Federal income, war-profits, and excess-profits taxes paid or accrued during the taxable year, to the extent Ante,p.1658. not allowed as a deduction by section 23, but not including the tax imposed by this section or a corresponding section of a prior income-tax law. Disallowed charita- (B) DISALLOWED CHARITABLE, ETC ., CONTRIBUTIONs.-Contri- ble, etc ., contributions. butio ns or gift s, not othe rwise allow ed as a ded uction, to or Ante, p.1660 . for the use of donees described in section 23 (o), for the pur- poses therein specified. Disallow ed loss es. (C) DISALLOWED LOSSES .-Losses from sales or exchanges of Post,p.1692. capital assets which are disallowed as a deduction by ~ction Bal.48, 1 2s. 11 (D ) ) BANX AFFILIATES :In the case of a holding company An te P °P~, affiliate (as defined in section 2 of the Banking Act of 1933), the amount allowed as a credit under section 26 (d) . National mortgage (E) NATIONAL MORTGAGE ASSOCIATIONS .-In the case of a vol .48p .1252 . national mortgage association created under Title III of the National Housing Act, the amount allowed as a credit under section 26 (e).