Page:United States Statutes at Large Volume 56 Part 1.djvu/939

 77TH CONG. , 2D SESS.-CH. 619-OCT. 21, 1942 common parent corporation if (i) more than 50 per centum of the total combined voting power of all classes of stock entitled to vote, or more than 50 per centum of the total value of shares of all classes of stock, of each of the corporations (except the common parent corporation) is owned directly by one or more of the other corporations and (ii) the common parent corporation owns directly more than 50 per centum of the total combined voting power of all classes of stock entitled to vote, or more than 50 per centum of the total value of shares of all classes of stock, of at least one of the other corporations." SEC. 217. INVESTED CAPITAL CREDIT. Section 714 is amended to read as follows: "SEC. 714. EXCESS PROFITS CREDIT-BASED ON INVESTED CAPITAL. "The excess profits credit, for any taxable year, computed under this section, shall be the amount shown in the following table: 54 Stat. 981. 26U.S.C., Supp.I § 714. "If the invested capital for the tax- able year, determined under sec- tion 715, is: Not over $5,000,000--- Over $5,000,000, but not over $10,000,000. Over $10,000,000, but not over $200,000,000. Over $200,000,000-- The credit shall be: 8% of the invested capital. $400,000, plus 7% of the excess over $5,000,000. $750,000, plus 6% of the excess over $10,000,000. $12,150,000, plus 5% of the excess over $200,000,000." SEC. 218. BASIS OF PROPERTY PAID IN. The last two sentences of section 718 (a) (2) (relating to property paid in) are amended to read as follows: "If the property was disposed of before such taxable year, such basis shall be determined under the law applicable to the year of disposition, but without regard to the value of the property as of March 1, 1913. If the property was dis- posed of before March 1, 1913, its basis shall be considered to be its fair market value at the time paid in. If the unadjusted basis of the property is a substituted basis, such basis shall be adjusted, with respect to the period before the property was paid in, by an amount equal to the adjustments proper under section 115 (1) for determining earnings and profits;". SEC. 219. DEFICIT IN EARNINGS AND PROFITS OF ANOTHER CORPO- RATION. (a) ADDITION TO EQUITr INVESTED CAPITAL OF TRANSFEREE.- Section 718 (a) is amended by inserting at the end thereof the following new paragraph: "(7) DEFICIT IN EARNINGS AND PROFITS OF ANOTHER CORPORA- TIoN.- In the case of a transferee, as defined in subsection (c) (5), an amount, determined under such paragraph, equal to the .portion of the deficit in earnings and profits of a transferor attributable to property received previously to such day." (b) REDUCTION OF EQUITY INVESTED CAPITAL OF TRANSFEROR.- Section 718 (b) is amended by inserting at the end thereof the follow- ing new paragraph: "(5) DEFICIT IN EARNINGS AND PROFITS TRANSFERRED TO ANOTHER CORPORATION. - In the case of a transferor, as defined in subsection (c) (5), an amount, determined under such paragraph, equal to the portion of the deficit in earnings and profits of the trans- feror attributable to property transferred previously to such day." 54 Stat. 982. 26U.S.C.6718(a) (2). Ante. p. 841. 54 Stat. 982. 26 U.S.C . §718(a); Supp. I, § 718 (a). Post, p. 912. 54 Stat. 983. 26 U.S.C . 718(b). Pot, p. 912. 54 Stat. 982. 26U.S.C. 716. 911 56 STAT.]

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