Page:United States Statutes at Large Volume 49 Part 1.djvu/1744

 74Th C ONGRESS. SESS. II. CH. 690. J UNE 22, 193 6. (2) The common parent corporation owns directly at least 95 per centum of the stock of at least one of the other corporations and (3) Each of the corporations is either (A) a corporation whose principal business is that of a common carrier by railroad or (B) a corporation the assets of which consist principally of stock in such corporations and which does not itself operate a business other than that of a common carrier by railroad. For the pur- po se of det ermining whether th e princip al busine ss of a c orpora- tion is that of a common carrier by railroad, if a common carrier by railroad has leased its railroad properties and such properties are operated as such by another common carrier by railroad, the business of receiving rents for such railroad properties shall be considered as the business of a common carrier by railroad. As used in this paragraph, the term "railroad" includes a street, suburban, or interurban electric railway. As used in this subsection (except in paragraph (3)) the term "stock" does not include nonvoting stock which is limited and preferred as to divid ends. (e) FOREIGN CORPORATIONS. -A foreign corporation shall not be deemed to be affiliated with any other corporation within the mean- ing of this section. (f) CHIN A TRADE ACT CORPORATIONS.-A corporation organized under the China Trade Act, 1922, shall not be deemed to be affiliated with any other corporation within the meaning of this section. (g) COR PORAT IONS DERIVING INCOME FROM PO SSES SION S OF UNITED STATES. For the purposes of this section a corporation entitled to the ben efits of section 251, by reason o f receiv ing a la rge. pe rcentage of its income from possessions of the United States, shall be treated as a foreign corporation. (h) SUB SIDIA RY F ORME D TO COMPLY WITH FOREIGN LAW. -In the case of a domestic corporation owning or controlling, directly or indirectly, 100 per centum of the capital stock (exclusive of directors' qualifying shares) of a corporation organized under the laws of a contiguous foreign country and maintained solely for the purpose of complying with the laws of such country as to title and operation of property, such foreign corporation may, at the option of the domestic corporation, be treated for the purpose of this title as a domestic corporation. (I) SUSPENSION OF RUNNING OF STATUTE OF LIMITATIONS .-If a notice under section 272 (a) in respect of a deficiency for any tax- able year is mailed to a corporation, the suspension of the running of the statute of limitations, provided in section 277, shall apply in the case of corporations with which such corporation made a con- solidated return for such taxable year. (j) RECEIvERSHIP CASES .-If the common pare nt corpora tion of an affiliated group making a, consolidated return would, if filing a separate return, be exempt under section 14 (d) (2) from the surtax on undistributed profits imposed by section 14, the affiliated group shall be exempt from such surtax imposed by section 14.Inall other cases the affiliated group making a consolidated return shall be subject to the surtax imposed by section 14, regardless of the fact that one or more of the corporations in the group are in bankruptcy or in receivership. (k) ALLOCATION OF INCOME AND DEDUCTIONS .-For allocation of income and deductions of related trades or businesses, see section 45. 1699 Of parent corpora- tion. Co rpo rat ions in- cluded. "Railroad" defined. "S to ck" defined. Foreig n corpora tions. Ch ina Trade Act corporations. Corporations de- rivin g income fr om United States posses- sions. Post, p. 1718. Subsidiary of domes- tic corporation formed to comply with foreign law. Su spe nsi on of run - ning of statute of limi- tations. Post, p. 1726. Receiv ership ca ses. Ante, p. 1656 . Allocation of income and deductions. Ante, p. 1667.