Page:United States Statutes at Large Volume 74.djvu/1043

 74 S T A T. ]

PUBLIC LAW 8 6 - 7 7 9 - S E P T. 14, 1960

SEC. 8. (a) Section 162 of the Internal Revenue Code of 1954 (relating to trade or business expenses) is amended by redesignating subsection (d) as subsection (e), and by inserting after subsection (c) the following new subsection: "(d)

1003 Trade or business expenses.

(jAprrAL CONTRIBUTIONS TO FEDERAL NATIONAL MORTGAGE ASSO-

CIATION.—For purposes of this subtitle, whenever the amount of capital contributions evidenced hj a share of stock issued pursuant to section 303(c) of the Federal National Mortgage Association Charter Act (12 U.S.C. sec. 1718) exceeds the fair market value of the stock as ^« ^*^*- ^^^• of the issue date of such stock, the initial holder of the stock shall treat the excess as ordinary and necessary expenses paid or incurred during the taxable year in carrying on a trade or business." (b) Part IV of subchapter O of chapter 1 of the Internal Revenue Code of 1954 (relating to special rules as to basis of property) is amended by redesignating section 1054 as 1055, and by inserting after section 1053 the following new section: 26 USC 1053. "SEC. 1054. CERTAIN STOCK OF FEDERAL NATIONAL MORTGAGE ASSOCIATION. " I n the case of a share of stock issued pursuant to section 303(c) of the Federal National Mortgage Association Charter Act (12 U.S.C. sec. 1718), the basis of such share in the hands of the initial holder shall be an amount equal to the capital contributions evidenced by such share reduced by the amount (if any) required by section 162(d) to be treated (with respect to such share) as ordinary and supra. necessary expenses paid or incurred in carrying on a trade or business." (c) The table of sections for such part IV is amended by striking out the last line and inserting in lieu thereof the following: "Sec. 1054. Certain stock of Federal National Mortgage Association. "Sec. 1055. Cross references." (d) The amendments made by subsections (a), (b), and (c) shall apply with respect to taxable years beginning after December 31, 1959. SEC. 9. (a) Section 4201 of the Internal Revenue Code of 1954 cJ^"n'ci™gJ'i^ji: (relating to tax on pens and mechanical pencils and lighters) is ers.''*"'^ ^' ^^ amended— 26 USC 4201. (1) by inserting " (a) " before "There", (2) by striking out "Mechanical lighters for cigarettes, cigars, and pipes.", and (3) by adding at the end thereof the following new subsection: "(b) There is hereby imposed upon the sale by the manufacturer, producer, or importer of mechanical lighters for cigarettes, cigars, and pipes a tax of 10 cents for each lighter but not more than 10 percent of the price for which so sold." (b) The amendments made by subsection (a) shall apply only with respect to articles sold by the manufacturer, producer, or importer thereof on or after the first day of the first month which begins more than 10 days after the date of the enactment of this Act. SEC. 10. (a) Subchapter M of chapter 1 of the Internal Revenue ^e use ssi. Code of 1954 (relating to regulated investment companies) is amended by adding at the end thereof the following: "PART II—REAL ESTATE INVESTMENT TRUSTS "See. 856. Definition of real estate Investment trust. "Sec. 857. Taxation of real estate investment trusts and their beneficiaries. "Sec. 858. Dividends paid by real estate investment trust after close of taxable year.

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