Page:United States Statutes at Large Volume 58 Part 1.djvu/55

 78Tn CONG.,-2D SESS.-CH. 63 -FEB. 25, 1944 SEC. 112. DEDUCTION FOR LOSSES ON SECURITIES IN AFFILIATED CORPORATIONS. (a) STOCK LossES.-Section 23 (g) (4) (B) of the Internal Revenue Code (relating to losses on stock of affiliated corporations) is amended to read as follows: "(B) more than 90 per centum of the aggregate of its gross incomes for all taxable years has been from sources other than royalties, rents (except rents derived from rental of properties to employees of the company in the ordinary course of its operating business), dividends, interest (except interest received on deferred purchase price of operating assets sold), annuities, or gains from sales or exchanges of stocks and securities; and". (b) BoND LossEs. -Section 23 (k) (5) (B) of the Internal Revenue Code (relating to losses on securities of affiliated corpora- tions) is amended to read as follows: "(B) more than 90 per centum of the aggregate of its gross incomes for all taxable years has been from sources other than royalties, rents (except rents derived from rental of properties to employees of the company in the ordinary course of its operating business), dividends, interest (except interest received on deferred purchase price of operating assets sold), annuities, or gains from sales or exchanges of stocks and securities; and". (c) TAXABLE YEARS TO WHICH APPUOABLE.- - The amendments made by this section shall be applicable with respect to taxable years beginning after December 31, 1941. SEC. 113. PARTIALLY WORTHLESS BAD DEBTS. (a) ING - ENEm . - The first sentence of section 23 (k) (1) (relating to deductions for bad debts) is amended to read as follows: "Debts which become worthless within the taxable year; or (in the discretion of the Commissioner) a reasonable addition to a reserve for bad debts; and when satisfied that a debt is recoverable only in part, the Com- missioner may allow such debt, in an amount not in excess of the part charged off within the taxable year, as a deduction." (b) YEARS TO WHICH APPLICABLE.- T he amendment made by this section shall be effective with respect to taxable years beginning after December 31, 1938. SEC. 114. CORPORATE CONTRIBUTIONS TO VETERANS' ORGANIZA- TIONS. Section 23 (q) (relating to charitable and other contributions by corporations) is amended (a) by inserting "veteran rehabilitation service," after "scientific," in paragraph (2), (b) by inserting "or" at the end of paragraph (2), and (c) by inserting after paragraph (2) the following new paragraph: "(3) Posts or organizations of war veterans, or auxiliary units of, or trusts or foundations for, any such posts or organizations, if such posts, organizations, units, trusts, or foundations are organized in the United States or any of its possessions, and if no part of their net earnings inure to the benefit of any private shareholder or individual;". 56 Stat. 820 . 26 U. S. O., Supp. III, § 23 (g) (4j (B). 56 Stat. 820. 26U.S. . Supp. Ill, § 23 (k) (5) (B). 53 Stat. 13. 26U.8. . Supp. III. §23 (k) (1). 56 Stat. 822. 26 U.8. 0 Supp. m, 23 (q) (2. 58 STAT.]

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