Page:United States Statutes at Large Volume 65.djvu/594

 560

PUBLIC LAW 183—OCT. 20, 1951

[65 STAT.

with respect to the selling corporation shall be made without regard to the previous part IV transaction. "(2)

64 Stat. 1191. 26 U.S.C. §461(a).

Subject to the provisions of paragraph (1), in the case of a selling corporation which was an acquiring corporation as defined in section 461(a) in a previous transaction, its excess profits net income (or deficit therein) which increases or decreases the excess profits net income (or deficit therein) of the purchasing corporation under subsection (b)(1) or (2), and its capital changes which are taken into account under this part in determining the capital changes of the purchasing corporation, shall be determined with the application of the rules of part II to such selling corporation with respect to the part II transaction. "(3)

Post, pp. 561, 562.

64 Stat. 1208. 26 U.S.C. § 464. Post, p. 562.

64 Stat. 1206. 26 U.S.C. § 463. Post, p. 562.

64 Stat. 1203. 26 U. 8. C. § 462 (i). Post, p. 561.

64 Stat. 1204. 26 U.S.C. 0)(1).

64 Stat. 1192. 26 U.S.C. § 461(c). 64 Stat. 1194. 2 6 U.S.C. § 462(b).

64 Stat. 1149-1170. 26 U.S.C. §§ 435, 442-446. 64 Stat. 1149. 26 U.S.C. §435 (a) (3). Ante, p. 558.

PART IV TRANSACTION FOLLOWING PART II TRANSACTION.—

PART II TRANSACTION FOLLOWING PART IV TRANSACTION.—

For rules applicable in the case of a part II transaction following a part IV transaction, see sections 462(b)(4), 463 (c), and 464 (c). "(f) REGULATIONS.—The Secretary shall by regulations prescribe rules for the application of this part. Such regulations shall include the following rules: "(1) BASE PERIOD CAPITAL ADDITION.—Rules (consistent with the principles of section 464) for the determination of the base period capital addition of the purchasing corporation by reference to the capital changes of the selling corporation and of the purchasing corporation. "(2) NET CAPITAL ADDITION OR REDUCTION.—Rules (consistent with the principles of section 463) for the determination of the net capital addition or reduction of the purchasing corporation by reference to the capital changes of the selling corporation and of the purchasing corporation. "(3) EXCESS PROFITS NET INCOME.—Rules (consistent with the principles of section 462(i)) for the determination of the amount of excess profits net income (or deficit therein) of the selling corporation attributable to the business or businesses acquired by a purchasing corporation in a transaction described in subsection (a)(1)(B) and properly allocable to such purchasing corporation. "(4) DUPLICATION.—Rules for the application under this part of the principles of section 462(j)(1) and the other provisions of part II relating to the prevention of duplication, "(5) EXCESS PROFITS CREDIT.—In the event that the part IV transaction occurred in a taxable year of the purchasing corporation which ended after June 30, 1950, rules (consistent with the principles of section 462(j)(2)) for the determination of the excess profits credit of such corporation for the year in which the transaction occurred. Such rules shall not include the principles of section 461(c) (relating to the excess profits credit of the component corporation), of section 462 (b)(2) (relating to constructive excess profits net income for months during which a corporation was not in existence), of section 462 (1) (relating to minimum average base period net income in the case of certain acquiring corporations), or of such other provisions of part II as relate to sections 435(e), 442, 443, 444, 445, or 446." (b)

TECHNICAL AMENDMENTS.—

(1) Section 435(a)(3) (relating to amount of excess profits credit) is hereby amended by inserting before the period at the end thereof the following: ", and in the case of certain taxable acquisitions, see part IV of this subchapter".

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