Page:United States Statutes at Large Volume 56 Part 1.djvu/853

 56 STAT.] 77TH CONG., 2D SESS.-CH. 619-OCT. 21, 1942 125 to treat the premium on bonds, the interest on which is allowable as a credit under section 25 (a) (1) or (2), as amortizable, for the purposes of the preceding sentence the proportionate share of the participant of such interest received by the common trust fund shall be his proportionate share of such interest (determined without regard to this sentence) reduced by so much of the deduction under section 23 (v) as is attributable to such share." (f) CREDIT OF PARTNER FOR PARTIALLY TAX-EXEMPT INTEREST.- Section 184 (relating to credits of partners) is amended by inserting at the end thereof the following new sentence: "If the partnership elects under section 125 to treat the premium on bonds, the interest on which is allowable as a credit under section 25 (a) (1) or (2), as amortizable, for the purposes of the preceding sentence the partner's proportionate share of the interest received by the partnership shall be his proportionate share of such interest (determined without regard to this sentence) reduced by so much of the deduction under section 23 (v) as is attributable to such share." (g) CREDIT OF UNITED STATES SHAREHOLDER FOR PARTIALLY TAX- EXEMPT INTEREST. -Section 337 (c) (relating to credits of United States shareholders) is amended by inserting at the end thereof the following new sentence: "If the foreign personal holding company elects under section 125 to treat the premium on bonds, the interest on which is allowable as a credit under section 25 (a) (1) or (2), as amortizable, for the purposes of the preceding sentence each United States shareholder's proportionate share of such interest received by the foreign personal holding company shall be his proportionate share of such interest (determined without regard to this sentence) reduced by so much of the deduction under section 23 (v) as is attributable to such share." (h) CREDIT OF SHAREHOLDER OF PERSONAL SERVICE CORPORATION FOR PARTIALLY TAX-EXEMPT INTEREST. - Section 394 (c) (relating to the credits of shareholders of a personal service corporation) is amended by inserting at the end thereof the following new sentence: "For any taxable year of the corporation beginning after December 31, 1941, each such shareholder's proportionate share of such interest received by the corporation shall be his proportionate share of such interest (determined without regard to this sentence) reduced by so much of the deduction under section 23 (v) as is attributable to such share." (i) CRoss REFERENCES. - (1) Section 25 (a) (2) (relating to credits for normal tax) is amended by inserting at the end thereof the following: "(For reduction of credit under paragraph (1) or (2) on account of amortizable bond premium see section 125)." (2) Section 26 (a) (relating to credits of corporations) is amended by inserting at the end thereof the following: "(For reduction of credit under this subsection on account of amortiz- able bond premium, see section 125)." SEC. 127. DEDUCTION FOR MEDICAL, DENTAL, ETC, EXPENSES. (a) ALLOWANCE OF DEDUCTION.- Section 23 (relating to deductions from gross income) is amended by inserting at the end thereof the following new subsection: "(x) MEDICAL, DENTAL, ETC., EXPENSES.-Except as limited under paragraph (1) or (2), expenses paid during the taxable year, not com- pensated for by insurance or otherwise, for medical care of the tax- payer, his spouse, or a dependent specified in section 25 (b) (2) (A) of the taxpayer. The term 'medical care,' as used in this subsection, shall include amounts paid for the diagnosis, cure, mitigation, treat- ment, or prevention of disease, or for the purpose of affecting any 825 Ante, p. 822. 63 Stat. 17 . 26U.S.C.§25(a) (2). Ante, p. 811; infra. Ante, p. 822. 53 Stat. 70. 26 U.S. C. § 184. Ante, p. 822. 53 Stat. 17 . 26U.S.C.§25(a) (2). Ante, p. 811; infra. Ante, p. 822. 53 Stat. 96. 26U. S.C. §337(c). Ante, p. 822. 53 Stat. 17 . 26U. .C.125(a) (2). Ante, p. 811; infra. Ante, p. 822. 54 Stat. 1006. 26 U. . o. 1394. Ante, p. 822. 53 Stat. 17 . 26U.S.(. 25(a) (2). Ante, p . 822. 53 Stat. 18 . 26U.S. .. 26(a). Ante, p. 822 Post, p. 830. 55 Stat. 697 . 26 U.S. 0., 8upp. 25 (b) (2) (A). Ante, p. 818; pod. p. 828. "Medlcaucare. "

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