Page:United States Statutes at Large Volume 53 Part 2.djvu/392

 PUBLIC LAWS-CH. 247-JUNE 29, 1939 No carry-over from year prior to 1939. Estates, trusts, and participants in com- mon trust funds. Ante, p. 68. Allowance of deduc- tion for net operating losses. Ante, p. 867. Partners. Ante, p. 71. "(5) Deductions otherwise allowed by law not attributable to the operation of a trade or business regularly carried on by the taxpayer shall (in the case of a taxpayer other than a cor- poration) be allowed only to the extent of the amount of the gross income not derived from such trade or business. For the purposes of this paragraph deductions and gross income shall be computed with the exceptions and limitations specified in paragraphs (1) to (4) of this subsection. "(e) No CARRY-OVER FROM YEAR PRIOR TO 1939. - As used in this section, the terms 'third preceding taxable year', 'second preceding taxable year', and 'first preceding taxable year' do not include any taxable year beginning prior to January 1, 1939." (c) ALLOWANCE OF DEDUCTION TO ESTATES, TRUSTS, AND PARTICI- PANTS IN COMMON TRUST FUNDs.-The Internal Revenue Code is amended by inserting after the section 169 the following new section: "SEC. 170. NET OPERATING LOSSES. "The benefit of the deduction for net operating losses allowed by section 23 (s) shall be allowed to estates and trusts under regulations prescribed by the Commissioner with the approval of the Secretary. The benefit of such deduction shall not be allowed to a common trust fund, but shall be allowed to the participants in the common trust fund under regulations prescribed by the Commissioner with the ap- proval of the Secretary." (d) ALLOWANCE OF DEDUCTION TO PARTNERs. -The Internal Reve- nue Code is amended by inserting after section 188 the following new section: "SEC. 189. NET OPERATING LOSSES. Net operating loss "The benefit of the deduction for net operating losses allowed by Ante, p. 867. section 23 (s) shall not be allowed to a partnership but shall be allowed to the members of the partnership under regulations pre- scribed by the Commissioner with the approval of the Secretary." Life insurance con- (e) ALLOWANCE OF DEDUCTION TO INSURANCE COMPANIES. - pnte,e7ti1. (1) Section 203 (a) of the Internal Revenue Code (relating . R.. 203 (a). to deductions of life insurance companies) is amended by insert- ing at the end thereof the following new paragraph: "(8) The amount of the net operating loss deduction provided Ante, p. s87. in section 23 (s)." Ante, . 74. (2) The Internal Revenue Code is amended by inserting after i. R.'' . 207. section 207 the following: "SEC. 208. NET OPERATING LOSSES. Insurance compa- nies, net operating losses. Ante, p. 867. Section 102 net in- come, definition modi- fled. Ante, p. 35. I.R.C.§102(d). Ante, p. 867. "The benefit of the deduction for net operating losses allowed by section 23 (s) shall be allowed to insurance companies subject to the taxes imposed in this supplement under regulations prescribed by the Commissioner with the approval of the Secretary." (f) DENIAL OF DEDUCTION TO SECTION 102 CORPORATIoNS. - Section 102 (d) (1) of the Internal Revenue Code (relating to the definition of section 102 net income) is amended by striking out "The term 'section 102 net income' means the net income minus the sum of" and inserting in lieu thereof "The term 'section 102 net income' means the net income, computed without the net operating loss deduction provided in section 23 (s), minus the sum of". 868 [53 STAT.

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