Page:United States Statutes at Large Volume 83.djvu/656

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76^sfat^'fo4of' 26 USC 312.

PUBLIC LAW 91-172-DEC. 30, 1969

be deemed to have used a flow-through method of accountin for its July 1969 accounting period with respect to any pr5 1970 public utility property for which it filed a timely appli, cation for change of accounting method before August 1 i%n if with respect to public utility property of the same (or similar) kind most recently placed in service, it used a flowthrough method of accounting for its July 1969 accounting period. "(5) REORGANIZATIONS, ASSETS ACQUISITIONS, ETC.—If by reason of a corporate reorganization, by reason of any other acquisition of the assets of one taxpayer by another taxpayer, by reason of the fact that any trade or business of the taxpayer is subject to ratemaking by more than one body, or by reason of other circumstances, the application of any provisions of this subsection to any public utility property does not carry out the purposes of this subsection, the Secretary or his delegate shall provide by regulations for the application of such provisions in a manner consistent with the purposes of this subsection." (b) EFFECTIVE DATE.—The amendment made by subsection (a) shall apply with respect to all taxable years for which a return has not been filed before August 1, 1969. SEC. 442. EFFECT ON EARNINGS AND PROFITS. {^) I ^ GENERAL.—Section 312 (relating to earnings and profits) is amended by adding at the end thereof the following new subsection: " (m)

26 USC 167.

Post, p. 649.

26 USC 1248.

EFFECT OF DEPRECIATION ON EARNINGS AND PROFITS.—

" (1) GENERAL RULE.—For purposes of computing the earnings and profits of a corporation for any taxable year beginning after June 30, 1972, the allowance for depreciation (and amortization,if any) shall be deemed to be the amount which would be allowable for such year if the straight line method of depreciation had been used for each taxable year beginning after June 30, 1972. "(2) EXCEPTION.—If for any taxable year, beginning after June 30, 1972, a method of depreciation was used by the taxpayer which the Secretary or his delegate has determined results in a reasonable allowance under section 167(a), and which is not— " (A) a declining balance method, " (B) the sum of the years-digits method, or " (C) any other method allowable solely by reason of the application of subsection (b)(4) or (j)(1)(C) of section 167, then the adjustment to earnings and profits for depreciation for such year shall be determined under the method so used (in lieu of under the straight line method). "(3) CERTAIN FOREIGN CORPORATIONS.—The provisions of paragraph (1) shall not apply in computing the earnings and profits of a foreign corporation for any taxable year for which less than 20 percent of the gross income from all sources of such corporation is derived from sources within the United States." (b)

76 Stat. 102 7.

[33 s^^^

CONFORMING AMENDMENTS.—

^ ^ Section 964(a) (relating to earnings and profits of a foreign corporation) is amended by striking out "For purposes of this subpart," and inserting in lieu thereof "Except as provided in section 312(m)(3), for purposes of this subpart". (2) Section 1248(c)(1) (relating to general rule for determination of the earnings and profits of a foreign corporation) is amended by striking out "For purposes of this section," and inserting in lieu thereof "Except as provided in section 312(m) (3), for purposes of this section".

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