Page:United States Statutes at Large Volume 68A.djvu/74

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INTERNAL REVENUE CODE OF 1954 '

(c) SPECIAL RULES FOR ACCUMULATED EARNINGS T A X AND FOR PERSONAL HOLDING COMPANY T A X. — I n applying subsections (a)

and (b) for the purpose of determining the accumulated earnings tax under section 531 or the tax under section 541 (relating to personal holding companies)— (1) a recovery exclusion allowed for purposes of this subtitle (other than section 531 or section 541) shall be allowed whether or not the bad debt, prior tax, or delinquency amount resulted in a reduction of the tax under section 531 or the tax under section 541 for the prior taxable year; and (2) where a bad debt, prior tax, or delinquency amount was not allowable as a deduction or credit for the prior taxable year for purposes of this subtitle other than of section 531 or section 541 but was allowable for the same taxable year under section 531 or section 541, then a recovery exclusion shall be allowable if such bad debt, prior tax, or delinquency amount did not result in a reduction of the tax under section 531 or the tax under section 541. SEC. 112. CERTAIN COMBAT PAY OF MEMBERS OF THE ARMED FORCES. (a) ENLISTED PERSONNEL.—Gross income does not include com-

pensation received for active service as a member below the grade of commissioned officer in the Armed Forces of the United States for any month during any part of which such member— (1) served in a combat zone during an induction period, or (2) was hospitalized as a result of wounds, disease, or injury incurred while serving in a combat zone during an induction period; b u t this paragraph shall not apply for any month during any part of which there are no combatant activities in any combat zone as determined under subsection (c)(3) of this section. (b) COMMISSIONED OFFICERS.—Gross income does not include so much of the compensation as does not exceed $200 received for active service as a commissioned officer in the Armed Forces of the United States for any month during any part of which such officer— (1) served in a combat zone during an induction period, or (2) was hospitalized as a result of wounds, disease, or injury incurred while serving in a combat zone during an induction period; b u t this paragraph shall not apply for any month during any part of which there are no combatant activities in any combat zone as determined under subsection (c)(3) of this section. (c) DEFINITIONS.—For purposes of this section— (1) The term "commissioned officer" does not include a commissioned warrant officer. (2) The term "combat zone" means any area which the President of the United States by Executive Order designates, for purposes of this section or corresponding provisions of prior income tax laws, as an area in which Armed Forces of the United States are or have (after June 24, 1950) engaged in combat. (3) Service is performed in a combat zone only if performed on or after the date designated by the President by Executive Order as the date of the commencing of combatant activities in such zone, and on or before the date designated by the President by Executive Order as the date of the termination of combatant activities in §111(0

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