Page:United States Statutes at Large Volume 56 Part 1.djvu/932

 PUBLIC LAWS-CH. 619-OCT. 21, 1942 53 Stat. 13, 50. 26U.S.C.§§23(g) (2), 117; Supp. 1, § 117. Ante, pp. 821, 843, 844,846, 847 . Ante, p. 844. 54 Stat. 985. 26U. s .. .§720(c). Ante, p. 903. Ante, p. 819. 53 Stat. 52. 26U.S.C. 117(h) (1), (2). Ante, p. 847. Ante, p. 902. Post, p. 905. Ante, p. 902. Pot, p. 905. income referred to in paragraph (1) shall be computed as if sec- tion 23 (g) (2), section 23 (k) (2), and section 117 were part of the revenue law applicable to the taxable year the excess profits net income of which is being computed, with the exception that the capital loss carry-over provided in subsection (e) (1) of section 117 shall be applicable to net capital losses for taxable years beginning after December 31, 1934. Such exception shall not apply for the purposes of computing the tax under this sub- chapter for any taxable year beginning before January 1, 1943." (h) INADMISSIBLE ASSET RATIO.- Section 720 (c) is amended by striking out "short-term capital gain" and inserting in lieu thereof "gain from the sale or exchange of a capital asset held for not more than 6 months". SEC. 208. RETROACTIVE TREATMENT OF INVOLUNTARY CONVER- SIONS AS CAPITAL TRANSACTIONS. Effective with respect to taxable years beginning after December 31, 1939, but not beginning after December 31, 1941, the second sen- tence of section 711 (a) (1) (B), section 711 (a) (2) (D), and sec- tion 711 (b) (1) (B) is amended to read as follows: "There shall be excluded the excess of the recognized gains from the sale, exchange, or involuntary conversion (as a result of destruction in whole or in part, theft or seizure, or an exercise of the power of requisition or condemnation or the threat or imminence thereof) of property held for more than eighteen months which is of a character which is sub- ject to the allowance for depreciation provided in section 23 (1) over the recognized losses from the sale, exchange, or involuntary conver- sion of such property. For the purposes of this subparagraph, sec- tion 117 (h) (1) and (2) shall apply in determining the period for which the taxpayer has held property which is of a character which is subject to the allowance for depreciation provided in section 23 (1)." SEC. 209. NONTAXABLE INCOME FROM EXEMPT EXCESS OUTPUT OF MINING AND TIMBER OPERATIONS AND FROM BONUS INCOME OF MINES, ETC. (a) INCOME CREDIT. - Section 711 (a) (1) (relating to excess profits credit computed under income credit) is amended by inserting at the end thereof the following new subparagraph: "(I) Nontaxable Income of Certain Industries With Depletable Resources. -In the case of a producer of minerals, or a producer of logs or lumber from a timber block, as defined in section 735, there shall be excluded nontaxable income from exempt excess output of mines and timber blocks and nontaxable bonus income provided in section 735." (b) INVESTED CAPITAL CREDIT. - Section 711 (a) (2) (relating to excess profits credit computed under invested capital credit) is amended by inserting at the end thereof the following new subpara- graph: "(K) Nontaxable Income of Certain Industries With Depletable Resources. -In the case of a producer of minerals, or a producer of logs or lumber from a timber block, as defined in section 735, there shall be excluded nontaxable income from exempt excess output of mines and timber blocks and nontaxable bonus income provided in section 735." 904 [56 STAT.

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