Page:United States Statutes at Large Volume 76.djvu/697

 76 STAT. ]

PUBLIC LAW 87-710-SEPT. 27, 1962

(b) Section 172 of such Code is amended by redesignating subsection (j) as subsection (k) and by inserting after subsection (i) the following new subsection:

649 72 Stat. i678.

" (j) CARRYOVER OF N E T OPERATING I ^ S S FOR CERTAIN REGULATED TRANSPORTATION CORPORATIONS.—

"(1) DEFINITION.—For purposes of subsection (b)(1)(C), the Supra. term 'regulated transportation corporation' means a corporation— trai^^ort^^ol " (A) 80 percent or more of the gross income of which corporation." (computed without regard to dividends and capital gains and losses) for the taxable year is derived from the furnishing or sale of transportation described in subparagraph (A), (C)(i), (E), or (F) of section 1503(c)(1) and taken into 68A Stat. 36$. account for purposes of section 1603(c)(2), " (B) which is described in section 1503(c)(3), or " (C) which is a member of a regulated transportation system. "(2) REGULATED TRANSPORTATION SYSTEM.—For purposes of this subsection, a corporation shall be treated as a member of a regulated transportation system for a taxable year if— " (A) it IS a member of an affiliated group of corporations making a consolidated return for such taxable year, and " (B) 80 percent or more of the aggregate gross income of the members of such affiliated group (computed without regard to dividends and capital gains and losses) for such taxable year is derived from sources described in paragraph (1)(A). For purposes of subparagraph (B), income derived by a corporation described in section 1603(c)(3) from leases described in subparagraph (A) thereof shall be considered as derived from sources described in paragraph (1)(A). "(3) LIMITATION.—For purposes of subsection (b)(1)(C) — " (A) a net operating loss may not be a net operating loss carryover to the 6th taxable year following the loss year unless the taxpayer is a regulated transportation corporation for such 6th taxable year; and " (B) a net operating loss may not be a net operating loss carryover to the 7th taxable year following the loss year unless the taxpayer is a regulated transportation corporation for the 6th taxable year following the loss year and for such 7th taxable year. "(4)

TAXABLE YEARS BEGINNING I N 1953 AND ENDING I N 1956. —

I n the case of a net operating loss for a taxable year beginning in 1955 and ending in 1956, the amount of such loss which may be carried— " (A) to the 6th taxable year following the loss year shall be the amount which bears the same ratio to the amount which (but for this paragraph) would be carried to such 6th taxable year as the number of days in the loss year after December 31, 1955, bears to the total number of days in the loss year, and " (B) to the 7th taxable year following the loss year shall be the amount (if any) by which (i) the amount carried to the 6th taxable year (determined under subparagraph (A)), exceeds (ii) the taxable income (computed as provided in subsection (b)(2)) for such 6th taxable year." SEC. 2. The amendments made by the first section of this Act shall apply only with respect to net operating losses for taxable years ending after December 31, 1955. Approved September 27, 1962,

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