Page:United States Statutes at Large Volume 56 Part 1.djvu/959

 77TH CONG. , 2D SESS.-CH. 619-OCT. 21, 1942 "(7) In computing the transferred capital reduction of the component corporation, distributions by such component corpo- ration to the taxpayer or any other component corporation shall be disregarded. "(8) The daily capital addition of the taxpayer to which any amount is added under paragraph (1) shall be the amount thereof computed before its reduction under the fourth sentence of section 713 (g) (3) on account of excluded capital. "(b) RULE WIERE ACQUIRING CORPORATION Is COMPONENT OF TAX- PAYER.- In cases where an acquiring corporation is a component of the taxpayer, and the transaction which constitutes such corporation an acquiring corporation occurs in a taxable year of such corporation which begins after December 31, 1939, for the purpose of determin- ing the daily capital addition or reduction of the taxpayer the above rules shall be applied in a similar manner to determine the daily capital addition or reduction of such acquiring corporation for each day after such transaction. (e) AMENDMENTS TO EXCESS PROFITS TAX MADE NECESSARY BY AMENDMENTS TO SUPPLEMENT A. - (1) CROSS-REFERENCE. -Section 712 (relating to allowance of excess profits credit) is amended by inserting at the end thereof the following new subsection: "(d) SPECIAL RULE IN CONNECTION WITH CERTAIN REORGANIZA- TIONS.-For the existence of taxpayer through component corpora- tion, see section 740 (f)." (2) TECHNICAL AMENDMENT.- Section 713 (a) (1) (A) (relat- ing to amount of credit for income method) is amended to read as follows: "(A) 95 per centum of the average base period net income,". (f) TAXABLE YEARS TO WHICH AMENDMENTS APPLICABLE.- T he amendments made by this section shall be applicable only to the computation of the tax for taxable years beginning after December 31, 1941, except that (1) the last sentence of section 740 (c), as added by subsection (a) of this section shall be applicable to the computa- tion of the tax for all taxable years beginning after December 31, 1939, and (2) if a taxpayer, within the time and in the manner and subject to such regulations as the Commissioner with the approval of the Secretary prescribes, elects to have such amendments (except those which by their terms are limited to taxable years beginning after December 31, 1941, and except that referred to in clause (1)) apply retroactively to all taxable years of the taxpayer beginning after December 31, 1939, such amendments shall also be applicable to the computation of the tax for taxable years beginning after December 31, 1939. SEC. 229. TERMINATION OF SUPPLEMENT B. (a) RETROACTIVE REPEAL OF SECTION 752. - (1) Section 752 (relating to highest bracket amount) is repealed as of the date of enactment of the Second Revenue Act of 1940. (2) Section 710 (a) (2) (relating to application of highest bracket amount in computing tax) is repealed as of the date of enactment of the Second Revenue Act of 1940. (b) Sections 750 and 751 (relating to determination of property paid in, etc., in certain cases) shall not apply with respect to any taxable year beginning after December 31, 1941. · 55 Stat. 21. 26U. S. C., Supp. I, 713 (g) (3). 55 Stat. 29. 26 U.S. C., Supp. I, S712. Ante, pp. 908,920. Ante, p. 925. 54 Stat. 980. 26 U. S. C., Supp. I, §713 (a) (1) (A). Ante, p. 926. 54 Stat. 996. 26U.S.C. 752. 54 Stat. 975. 26 U. S. C., Supp. I, i 710 (a) (2). 54 Stat. 994 995. 26 U. S.S. 750, 751. 56 STAT.]

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