Page:United States Statutes at Large Volume 76.djvu/1185

 76 STAT.]

PUBLIC LAW 87-858-OCT. 23, 1962

1137

tax imposed by such paragraph) which shall consist of the sum of— " (A) a partial tax, computed as provided by paragraph (1), on the life insurance company taxable income determined by reducing the taxable investment income, and the gain from operations, by the amount of such excess, and " (B) an amount equal to 25 percent of such excess.'' (2) TAXABLE INVESTMENT INCOME.—Paragraph (2) of section

804(a) of such Code (relating to definition of taxable investment income) is amended by striking out "equal to the sum" and inserting in lieu thereof "equal to the amount (if any) by which the net long-term capital gain exceeds the net short-term capital loss plus the sum". (3) G A I N AND LOSS FROM OPERATIONS.—Paragraphs (1) and (2) of section 809(b) of such Code (relating to definitions of gain and loss from operations) are each amended by striking out "and" at the end of subparagraph (A), by redesignating subparagraph (B) as subparagraph (C), and by inserting after subparagraph (A) the following new subparagraph: " (B) the amount (if any) by which the net long-term capital gain exceeds the net short-term capital loss; and". (4) CONFORMING AMENDMENTS.—Sections 8 1 5 (c)(3)(B)

and

6501 (c)(6) of such Code are each amended by striking out "802(a)(1) " and inserting in lieu thereof "802(a)". (c) LIMITATION ON CERTAIN DEDUCTIONS.—Section 809(f)(2) of such Code (relating to the application of limitation on certain deductions) is amended to read as follows: "(2) APPLICATION OF LIMITATION.—The limitation provided by paragraph (1) shall apply first to the amount of the deduction under subsection (d)(3), then to the amount of the deduction under subsection (d)(6), and finally to the amount of the deduction under subsection (d)(5)." (d) N E W COMPANIES QUALIFYING FOR 8-YEAR Loss CARRYOVER.— (1) IN GENERAL.—Section 812(e)(2)(B) of such Code (relating to nonqualified corporation) is amended by adding immediately after the w o r d s "with any other corporation" in the first sentence, the following: "(except a corporation taxable under part II or part III of this subchapter)". (2) EFFECTIVE DATE.—The amendment made by paragraph (1) shall apply with respect to all taxable years beginning after December 31, 1954, except that in the case of a nonqualified corporation, as defined in section 812(e)(2)(B) of the Internal Revenue Code of 1954 as in effect prior to the amendment made by paragraph (1), a loss from operations for a taxable year beginning in 1955 shall not be an operations loss carryover to the year 1961, and there shall be no reduction in the portion of such loss from operations which may be carried to 1962 or 1963 by reason of an offset with respect to the year 1961.

73 Stat. 115. 26 USC 804.

73 Stat. 121. ^e use 809.

26 USC sis.

26 USC esoi. 26 USC 809.

26 USC 812.

(e) CERTAIN DISTRIBUTIONS OF STOCK OF SUBSIDIARIES.—Section

815(a) of such Code (relating to distributions to shareholders) is amended by adding a t the end thereof the following: "Further, for purposes of this section, the term 'distribution' does not include any distribution before January 1, 1964, of the stock of a controlled corporation to which section 355 applies, if such controlled corporation ]s an insurance company subject to the tax imposed by section 831 and

78135 0-63—75

26 USC sis.

26 USC 35s. 26 USC 331.

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