Page:United States Statutes at Large Volume 55 Part 1.djvu/723

 sioner permits him, subject to such conditions as the Commissioner deems necessary, to change to a different method. In the case of any such obligations owned by the taxpayer at the beginning of the first taxable year to which his election applies, the increase in the redemp- tion price of such obligations occurring between the date of acquisi- tion and the first day of such taxable year shall also be treated as income received in such taxable year." SEC. 115. SHORT-TERM OBLIGATIONS ISSUED ON A DISCOUNT BASIS. 26u. s .. 42. (a) DISCOUNT ACCRUED AT MATurr rr.- Section 42 of the Internal Ante, p. 697. Revenue Code (relating to period in which items of gross income are included) is amended by inserting at the end thereof the following new subsection: "(c) SHORT-TER OBLIGATIONS ISSUED ON DISCOUNT BASIS. -In the case of any obligation of the United States or any of its possessions, or of a State or Territory, or any political subdivision thereof, or of the District of Columbia, issued on or after March 1, 1941, on a discount basis and payable without interest at a fixed maturity date not exceeding one year from the date of issue, the amount of discount at which such obligation is originally sold shall not be considered to accrue until the date on which such obligation is paid at maturity, sold, or otherwise disposed of." 53 Stat. 0. (b) CAPITAL GAIN RULE NOT APPLOABmLE. -Section 117 (a) (1) of (a8). . . . 117 the Internal Revenue Code (relating to definition of capital assets) is amended by striking out the semicolon at the end thereof and inserting in lieu thereof the following: ", or an obligation of the United States or any of its possessions, or of a State or Territory, or any political subdivision thereof, or of the District of Columbia, issued on or after March 1, 1941, on a discount basis and payable without interest at a fixed maturity date not exceeding one year from the date of issue;". (c) EFFECTIVE DATE OF AMENDMENTS.- The amendments made by this section shall be applicable with respect to taxable years ending after February 28, 1941. SEC. 116. INFORMATION RETURNS WITH RESPECT TO FEDERAL OBLIGATIONS. 538tat.64. (a) Section 147 (d) of the Internal Revenue Code (exempting 2C. ) interest on obligations of the United States from information require- ment) is repeated. 53 Stat. 4. (b) Section 147 (b) of the Internal Revenue Code is amended by U.S.C . 147(b). striking out "and (2)" and inserting in lieu thereof "(2) in the case of payments of interest upon obligations of the United States or any agency or instrumentality thereof, and (3)". Effective date. (C) Subsections (a) and (b) of this section shall take effect upon the day after the date of the enactment of this Act. SEC. 117. EXTENSION OF TIME OF ORDERS OF SECURITIES AND EXCHANGE COMMISSION. 26 U.. C. 373) (a). ExTENsION. - Section 373 (a) of the Internal Revenue Code (relating to the definition of orders of the Securities and Exchange Commission with respect to which Supplement R applies) is amended to read as follows: "(a) The term 'order of the Securities and Exchange Commission' means an order (1) issued after May 28, 1938, and prior to January 1, 1943, by the Securities and Exchange Commission to effectuate the provisions of section 11 (b) of the Public Utility Holding Com- pany Act of 1935 (49 Stat. 820; U. S. C ., Supp. V, title 15, section PUBLIC LAWS-CH. 412 -SEPT. 20, 1941 [55 STAT. 698

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