Page:United States Statutes at Large Volume 68A.djvu/244

 204

INTERNAL REVENUE CODE OF 1954

by the common trust fund shall be his proportionate share of such interest (determined without regard to this sentence) reduced by so much of the deduction under section 171 as is attributable to such share. (d) COMPUTATION O F COMMON T R U S T F U N D INCOME.—The taxable

income of a common trust fund shall be computed in the same manner and on the same basis as in the case of an individual, except that— (1) there shall be segregated the gains and losses from sales or exchanges of capital assets; (2) after excluding all items of gain and loss from sales or exchanges of capital assets, there shall be computed— (A) an ordinary taxable income which shall consist of the excess of the gross income over deductions; or (B) an ordinary net loss which shall consist of the excess of the deductions over the gross income; (3) the deduction provided by section 170 (relating to charitable, etc., contributions and gifts) shall not be allowed; and (4) the standard deduction provided in section 141 shall not be allowed. (e) ADMISSION AND WITHDRAWAL.—No gain or loss shall be realized by the common trust fund by the admission or withdrawal of a participant. The withdrawal of any participating interest by a participant shall be treated as a sale or exchange of such interest by the participant. (f) D I F F E R E N T

TAXABLE YEARS OF COMMON T R U S T F U N D AND

PARTICIPANT.—If the taxable year of the common trust fund is different from that of a participant, the inclusions with respect to the taxable income of the common trust fund, in computing the taxable income of the participant for its taxable year, shall be based upon the taxable income of the common trust fund for any taxable year of the common trust fund ending within or with the taxable year of the participant. (g) N E T OPERATING LOSS DEDUCTION.—The benefit of the deduction for net operating losses provided by section 172 shall not be allowed to a common trust fund, but shall be allowed to the participants in the common trust fund under regulations prescribed by the Secretary or his delegate. PART II—MUTUAL SAVINGS BANKS, ETC. Sec. Sec. Sec. Sec.

691. 592. 593. 594.

Deduction for dividends paid on deposits. Deduction for repayment of certain loans. Additions to reserve for bad debts. Alternative tax for mutual savings banks conducting life insurance business.

SEC. 591. DEDUCTION FOR DIVIDENDS PAID ON DEPOSITS.

I n the case of mutual savings banks, cooperative banks, and domestic building and loan associations, there shall be allowed as deductions in computing taxable income amounts paid to, or credited to the accounts of, depositors or holders of accounts as dividends on their deposits or withdrawable accounts, if such amounts paid or credited are withdrawable on demand subject only to customary notice of intention to withdraw. § 584(c)(2)

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