Page:United States Statutes at Large Volume 56 Part 1.djvu/952

 PUBLIC LAWS-CH. 619-OCT. 21, 1942 53 Stat. 37, 39. 26U.S.C. §112(b) (5), (C), (e). 53 Stat. 38. 26U. s. C.§112(b) (6). 54 Stat. 979. 26U.S.C. §712; Supp. I, § 712. Ante, pp. 908, 920. Post, pp. 931, 925, 930. 55 Stat. 20. 26 U. S. C., Supp.I, 713 (f). Post, p. 929. erties is the transfer to such other corporation of voting stock of the corporation which has acquired such properties, or "(C) before October 1, 1940, properties of another corpo- ration solely as paid-in surplus or a contribution to capital in respect of voting stock owned by such other corporation, or "(D) substantially all the properties of a partnership in an exchange to which section 112 (b) (5), or so much of sec- tion 112 (c) or (e) as refers to section 112 (b) (5), or to which a corresponding provision of a prior revenue law, is or was applicable. For the purposes of subparagraphs (B) and (C) in determining whether such voting stock or such paid-in surplus or contribution to capital is the sole consideration, the assumption by the acquiring corporation of a liability of the other, or the fact that property acquired is subject to a liability, shall be disregarded. Subpara- graph (B) or (C) shall apply only if the corporation transferring such properties is forthwith completely liquidated in pursuance of the plan under which the acquisition is made, and the trans- action of which the acquisition is a part has the effect of a statutory merger or consolidation. "(2) A corporation which has acquired property from another corporation in a transaction with respect to which gain or loss was not recognized under section 112 (b) (6) of Chapter 1 or a cor- responding provision of a prior revenue law; "(3) A corporation the result of a statutory merger of two or more corporations; or "(4) A corporation the result of a statutory consolidation of two or more corporations. "(b) COMPONENT CORPORATION. -T he term 'component corporation' means- "(1) In the case of a transaction described in subsection (a) (1), the corporation which transferred the assets; "(S') In the case of a transaction described in subsection (a) (2.), the corporation the property of which was acquired; "(3) In the case of a statutory merger, all corporations merged, except the corporation resulting from the merger; or "(4) In the case of a statutory consolidation, all corporations consolidated, except the corporation resulting from the consolida- tion; or "(5) In the case of a transaction specified in subsection (a) (1) (D), the partnership whose properties were acquired. "(c) INCOME OF CERTAIN COMPONENT CORPORATIONS NOT INCLUDED.- For the purposes of section 712, section 742, and section 743 in the case of a corporation which is a component corporation in a transaction described in subsection (a)- "(1) Except as provided in paragraph (2), for the purpose of computing, for any taxable year beginning after December 31, 1941, the excess profits credit of such component corporation or of such transaction is not a component, except in the application of sections 713 (f) and 742 (h) (other than the limitation on the amount of average base period net income or Supplement A aver- age base period net income, as the case may be, determined there- under), no account shall be taken of the excess profits net income of such component corporation for any period before the day after such transaction, or of the excess profits net income for any period before the day after such transaction of its component corporations in any transaction before such transaction, and no 924 [56 STAT.
 * an acquiring corporation of which the acquiring corporation in

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