Page:United States Statutes at Large Volume 55 Part 1.djvu/725

 PUBLIC LAWS--CH. 412-SEPT. 20, 1941 SEC. 202. DEDUCTION OF EXCESS-PROFITS TAX. 53 Stat. 12. 26U.S.C.423(c). 40 Stat. 302, 1088; 42 Stat. 271; 48 Stat. 208, 770. 53 Stat. 56 . 26U.S.C. 131. 54 Stat. 975; ante, p. 26. 26 U. . C. §C710- 752. Ante, p. 27. 54 Stat. 989. 26 U.S.C. 730. 53 Stat. 35 . 26U.S.C.J102(d) (1) (A). 54 Stat. 975; ante, p. 26. 26 U. S. a.0§ 710- 752. 53 Stat. 12, 867; 54 Stat. 998. 26U. S.C. 23. M5Stat. 976. 26U.S.C.1711(a) (1) (A). (a) AMENDMENT OF SECTION 23 (c). -Section 23 (c) of the Internal Revenue Code (relating to the deduction of taxes in computing net income) is amended to read as follows: "(c) TAXES GENERALLY.- "(1) ALLOWANCE IN GENERAL.-Taxes paid or accrued within the taxable year, except- "(A) Federal income taxes; "(B) war-profits and excess-profits taxes imposed by Title II of the Revenue Act of 1917, Title III of the Revenue Act of 1918, Title III of the Revenue Act of 1921, section 216 of the National Industrial Recovery Act, or section 702 of the Revenue Act of 1934, or by any such provisions as amended or supplemented; "(C) income, war-profits, and excess-profits taxes imposed by the authority of any foreign country or possession of the United States; but this deduction shall be allowed in the case of a taxpayer who does not signify in his return his desire to have to any extent the benefits of section 131 (relating to credit for taxes of foreign countries and posses- sions of the United States); " (D) estate, inheritance, legacy, succession, and gift taxes; and "(E) taxes assessed against local benefits of a kind tending to increase the value of the property assessed; but this para- graph shall not exclude the allowance as a deduction of so much of such taxes as is properly allocable to maintenance or interest charges. "(2) EXCESS-PROFITS TAX UNDER CHAPTER 2E-SPECIAL RULES.- For the purposes of this subsection, in the case of the excess- profits tax imposed by Subchapter E of Chapter 2- "(A) The deduction shall be limited to the tax imposed for the taxable year, but any portion of such tax paid after the taxable year shall be considered as having been paid within the taxable year; "(B) No reduction in such tax shall be made by reason of the credit for income, war-profits, or excess-profits taxes paid to any foreign country or possession of the United States; "(C) Such tax shall be computed without regard to the adjustments provided in section 734; and '(D) Such tax, in the case of a consolidated return under section 730, shall be allocated to the members of the affiliated group under regulations prescribed by the Commissioner, with the approval of the Secretary." (b) AMENDMENT OF SECTION 102 (d).-Section 102 (d) (1) (A) of the Internal Revenue Code (relating to the deduction of taxes in computing section 102 net income) is amended to read as follows: "(A) Taxes.- Federal income, war-profits, and excess- profits taxes (other than the tax imposed by Subchapter E of Chapter 2 for a taxable year beginning after December 31, 1940) paid or accrued during the taxable year, to the extent 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." (c) COMPUTATION OF EXCEss-PROFrTS NET INCOME. - (1) TAXABLE YEARS BEGINTNOI ArER DECEMBER a1, 1940.- (A) Section 711 (a) (1) (A) (relating to adjustment for income taxes in computing excess-profits net income under income credit) is amended to read as follows: [55 STAT. 700

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