Page:United States Statutes at Large Volume 56 Part 1.djvu/965

 77TH CONG. , 2D SESS.-CH. 619-OCT. 21, 1942 937 credit is provided under subsection (a), and the credit established under subsection (a) for such taxable year is hereby made available for the purchase of such bonds. "(c) TERMS AND MATURITY OF BONDS. -T he bonds provided for in subsection (a) shall be issued under the authority and subject to the provisions of the Second Liberty Bond Act, as amended, and the pur- poses for which bonds may be issued under such Act are extended to include the purposes for which bonds are required to be issued under this section. Such bonds shall bear no interest, shall be nonne- gotiable, and shall not be transferable by sale, exchange, assignment, pledge, hypothecation, or otherwise, on or before the date of cessation of hostilities in the present war, but after said date, such bonds shall be negotiable, and may be sold, exchanged, pledged, assigned, hypoth- ecated, or otherwise transferred, without restriction, and shall be redeemable (at the option of the United States) in whole or in part upon three months' notice. Such bonds for any taxable year to which this section applies shall mature on the last day of that calendar year, beginning after the date of cessation of hostilities in the present war, which is shown in the following table to be applicable to such bonds for such year: Calendar year (beginning after cessation of hostili- Bonds purchased with the credit ties) on last day of which for any taxable year beginning bonds mature Within the calendar year 1941 or 1942--- 2nd Within the calendar year 1943- 3rd Within the calendar year 1944---___--- 4th After December 31, 1944 -- _-.....- -- - -- 5th. "(d) EXEMPrON OF PROCEEDS FROM TAx. -T he proceeds of any such bond upon redemption shall not be included in gross income. " (e) DATE OF CESSATION OF HOSTIITIES IN THE PRESENT WAR.- As used m this section, the term 'date of cessation of hostilities in the present war' means the date on which hostilities in the present war between the United States and the governments of Germany, Japan, and Italy cease, as fixed by proclamation of the President or by con- current resolution of the two Houses of Congress, whichever date is earlier, or in case the hostilities between the United States and such governments do not cease at the same time, such date as may be so ixed as an appropriate date for the purposes of this section. "SEC. 781. SPECIAL RULES FOR APPLICATION OF SECTION 780. "(a) EFFECT OF DEFICIENCIES. - If a deficiency in respect of the excess profits tax for any taxable year for which a credit is provided in section 780 (a) is paid by the taxpayer before three months before the date of maturity of the bonds for such year, an amount of such credit equal to 10 per centum of the excess of the tax imposed by this subchapter on the basis of which the deficiency was determined, over the tax imposed by this subchapter as previously computed and paid shall be available, as provided in section 780 (b), for the purchase of bonds as provided under such section, and there shall be issued to the taxpayer bonds under such section in an amount equal to such excess and with the same maturity as in the case of bonds issued with respect to the taxable year with respect to which the deficiency is determined. "(b) EFFECT OF REUNDs. - I f an overpayment of the tax imposed by this subchapter for any taxable year for which a credit is provided in section 780 (a) is refunded or credited to the taxpayer under the internal revenue laws, the credit, if any, provided in such section then existing in favor of the taxpayer shall be reduced by an amount equal to 10 per centum of the excess of the tax imposed by this sub- 40 Stat. 288 . 31U. .C.1774(2). Ante, p. 189 . Ant, p. 93B Ante, p. 936. 56 STAT.]

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