Page:United States Statutes at Large Volume 56 Part 1.djvu/913

 77TH CONG., 2D SESS.-CH. 619-OCT. 21, 1942 "(12) SPECIAL DEDUCTION. -The amount allowable by section 120. "(13) ESTATES AND TRUSTS.- In the case of an estate or trust, the amount allowable by subsection (a) of section 162 in addition to the amounts allowable by subsections (b) and (c) of such section. "(b) ITEMS NOT DEDUCTIBLE. - The deductions allowable by sub- section (a) shall be subject to the limitations contained in section 24 and Supplement J and, in the case of nonresident aliens subject to the victory tax, shall be subject to the limitations contained in Supplement H. "(c) SUPPLEMENT T TAXPAYER.-If for any taxable year a tax- payer makes his return and pays his tax under Supplement T, the term 'victory tax net income' means the gross income for such year. "(d) BAsIS FOR DETERMINING Loss. - The basis for determining the amount of deduction for losses sustained, to be allowed under para- graph (4) of subsection (a), and for bad debts, to be allowed under paragraph (5) of subsection (a), shall be the adjusted basis pro- vided in section 113 (b) for determining the loss from the sale or other disposition of property. "(e) RULE APPLICABLE TO PARTICIPANTS IN A COMMON TRUST FUND.-In the case of a participant in a common trust fund, he shall in respect of the common trust fund income include in computing his victory tax net income, whether or not distributed and whether or not distributable, only his proportionate share of the ordinary net income or the ordinary net loss of the common trust fund, computed as provided in section 169 (d). "(f) RULE APPLICABLE TO PARTNERS. -In the case of an individual carrying on business in partnership, he shall in respect of the part- nership income include in computing his victory tax net income, whether or not distribution is made toim, only his distributive share of the ordinary net income or the ordinary net loss of the partnership, computed as provided in section 183 (b). "SEC. 452. SPECIFIC EXEMPTION. "In the case of every individual there shall be allowed as a credit against the victory tax net income a specific exemption of $624. In the case of a husband and wife filing a joint return under section 51 (b), if the victory tax net income of one spouse is less than $624, the aggregate specific exemption of both spouses shall be limited to $624 plus the victory tax net income of such spouse. "SEC. 453. CREDIT AGAINST VICTORY TAX. "(a) ALLOWANCE OF CREDIT. -T here shall be allowed as a credit against the victory tax for each taxable year: "(1) The amount paid by the taxpayer during the taxable year as premiums on life insurance, in force on September 1, 1942, upon his own life, or upon the life of his spouse, or upon the life of any dependent of the taxpayer specified in section 25 (b) (2) (A); and the amount paid during the taxable year as premiums on life insurance which is a renewal or conversion of such life insurance in force on September 1, 1942, to the extent that such premiums do not exceed the premiums payable on such life insurance in force on September 1, 1942. "(2) The amount by which the smallest amount of indebted- ness of the taxpayer outstanding at any time during the period beginning September 1, 1942, and ending with the close of the preceding taxable year, exceeds the amount of indebtedness of the taxpayer outstanding at the close of the taxable year. 885 53 Stat. 56. 26U.8.C. §120. 53 Stat. 66, 67. 26U.S.C.§162 (a), (c). Ante, p. 809. 53 stat. 16, 79, 75. 26U.S.C.§§24, 251,252, 211-219; Supp. I, §§251, 211, 214. Ante, pp. 819, 826 , 827, 828, 860, 861, 807, 808, 875. 55 Stat. 689. 26 U.S . C., Supp. I, §§ 400-404 . Ante, pp. 803 805. 53 Stat. 44. 26 U.S. C . i113(b). Ante, pp. 824,827. 53 Stat. 69. 26U.. ..169(d). Ante, p. 846. Ante, p. 84. 53 Stat. 27 . 26U.S.C. 51(b). 55 Stat. 697. 26U.S. C., Spp.I, 25 (b) (2) (A). Ante, pp. 818,82S. 56 STAT.]

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