Page:United States Statutes at Large Volume 55 Part 1.djvu/728

 55 STAT.] 77TH CONG., 1ST SESS.-CH. 412-SEPT. 20, 1941 taxable year beginning after December 31, 1940. For the purposes of this subparagraph, in determining whether obligations which are described in section 22 (b) (4) any part of the interest from which is excludible from gross income or allowable as a credit against net income are to be treated as admissible or inadmissible assets such obligations shall be treated in the same manner as they are treated for the taxable year for which tax under this subchapter is being computed. "(E) Maximum New Capital Allowable.-The new capital for any day of the taxable year shall not be more than the amount, if any, by which- "(i) the sum of the equity invested capital (computed without regard to this paragraph) and the borrowed capital (as defined in section 719 (a)) of the taxpayer as of such day, reduced by the amount of money or prop- erty paid in which is excluded by reason of the limita- tion of subparagraph (A) or (B) of this paragraph, exceeds "(ii) the sum of such equity invested capital and bor- rowed capital as of the beginning of the first day of such taxpayer's first taxable year beginning after Decem- ber 31, 1940, reduced by the amount, if any, by which the accumulated earnings and profits as of such first day of such first taxable year exceed the accumulated earn- ings and profits (computed without regard to distribu- tions made in taxable years beginning after December 31, 1940) as of the beginning of the first day of the taxable year for which the tax under this subchapter is being computed. "(F) Reduction on Account of Distributions Out of Pre- 1941 Accumulated Earnings and Profits. - T he new capital for any day of the taxable year, computed without the appli- cation of subparagraph (E), shall be reduced by the amount which, after the beginning of the first taxable year which begins after December 31, 1940, has been distributed out of earnings and profits accumulated prior to the beginning of such first taxable year." SEC. 204. CORPORATIONS ENGAGED IN MINING STRATEGIC METALS. Section 731 of the Internal Revenue Code (exempting from excess- profits tax income derived from mining certain metals) shall not apply with respect to any taxable year beginning after December 31, 1940. SEC. 205. TAXABLE YEARS TO WHICH AMENDMENTS APPLICABLE. The amendments made by this title shall be applicable only with respect to taxable years beginning after December 31, 1940. TITLE III-CAPITAL STOCK TAX AND DECLARED VALUE EXCESS-PROFITS TAX SEC. 301. CAPITAL STOCK TAX. (a) INCREASE IN RATE OF TAx. -Section 1200 (a) and (b) of the Internal Revenue Code (relating to rate of capital stock tax) is amended by striking out "$1" and inserting in lieu thereof "$1.25". (b) DEFENSE TAX RATE. -Section 1200 (c) of the Internal Revenue Code is repealed. 703 63 Stat. 10 . 26U.S.C.§22(b) (4). 54 Stat. 984. 26U.S. C.§ 719(a). 54 Stat. 990. 26U. .C.§731. 53 Stat. 169. 26 U.S. C. 1200 , (b). 54 Stat. 521. 26U. 8. C.i 1200 (e).

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