Taxable Years Taxable Years Taxable Years Beginning before 1939 Sec. 24. (b) Losses from sales or exchanges of property.— Sec. 24. (b) Losses from sales or exchanges of property. Sec. 24. (b) (1) Losses disal- Sec. 24. (b) (1) Losses disallowed. In computing net income lowed.-In computing net income no deduction shall in any case be no deduction shall in any case be allowed in respect of losses from allowed in respect of losses from sales or exchanges of property, di- sales or exchanges of property, directly or indirectlyrectly or indirectly (A) Between members of a family, as defined in paragraph (2) (D); (A) Between members of a family, as defined in paragraph (2) (D); (B) Except in the case of dis- (B) Except in the case of distributions in liquidation, between tributions in liquidation, between an individual and a corporation an individual and a corporation more than 50 per centum in value more than 50 per centum in value of the outstanding stock of which of the outstanding stock of which is owned, directly or indirectly, by is owned, directly or indirectly, by or for such individual; or for such individual; (C) Except in the case of distri- (C) Except in the case of distributions in liquidation, between butions in liquidation, between two corporations more than 50 per two corporations more than 50 per centum in value of the outstand- centum in value of the outstanding stock of each of which is ing stock of each of which is owned, directly or indirectly, by owned, directly or indirectly, by or for the same individual, if or for the same individual, if either one of such corporations, either one of such corporations, with respect to the taxable year of with respect to the taxable year of the corporation preceding the date the corporation preceding the date of the sale or exchange was, under of the sale or exchange was, under the law applicable to such taxable the law applicable to such taxable Sec. 24. (b) Losses from sales or exchanges of property. Sec. 24. (b) (1) Losses disallowed. See p. 58, Eighth Edition. Taxable Years Beginning in 1943 Taxable Years Taxable Years the law applicable to such taxable year, a personal holding company year, a personal holding company year, a personal holding company or a foreign personal holding com- or a foreign personal holding comor a foreign personal holding company; pany; (D) Between a grantor and a (D) Between a grantor and a fiduciary of any trust; fiduciary of any trust; (E) Between the fiduciary of a trust and the fiduciary of another trust, if the same person is a grantor with respect to each trust; or (F) Between a fiduciary of a trust and a beneficiary of such trust. (E) Between the fiduciary of a or pany; (D) Between a grantor and a fiduciary of any trust; (E) Between the fiduciary of a trust and the fiduciary of another trust, if the same person is grantor with respect to each trust; or a (F) Between a fiduciary of a (F) Between a fiduciary of a trust and a beneficiary of such trust and a beneficiary of such trust. trust. Sec. 24. (b) (2) Stock owner- Sec. 24. (b) (2) Stock owner- Sec. 24. (b) (2) Stock ownership, family, and partnership rule. ship, family, and partnership rule. ship, family, and partnership rule. -For the purposes of determin--For the purposes of determin--For the purposes of determining, in applying paragraph (1), ing, in applying paragraph (1), ing, in applying paragraph (1). the ownership of stockthe ownership of stockthe ownership of stock (A) Stock owned, directly or (A) Stock owned, directly or (A) Stock owned, directly or indirectly, by or for a corporation, indirectly, by or for a corporation, indirectly, by or for a corporation, partnership, estate, or trust, shall partnership, estate, or trust, shall partnership, estate, or trust, shall be considered as being owned pro- be considered as being owned pro- be considered as being owned proportionately by or for its share-portionately by or for its share-portionately by or for its shareholders, partners, or beneficiaries; holders, partners, or beneficiaries; holders, partners, or beneficiaries; (B) An individual shall be con(B) An individual shall be con(B) An individual shall be considered as owning the stock owned, sidered as owning the stock owned, sidered as owning the stock owned, directly or indirectly, by or for his directly or indirectly, by or for his directly or indirectly, by or for his family; (C) An individual owning (C) An individual owning (C) An individual owning (otherwise than by the application (otherwise than by the application (otherwise than by the application of subparagraph (B)) any stock of subparagraph (B)) any stock of subparagraph (B)) any stock in a corporation shall be consid- in a corporation shall be considin a corporation shall be considered as owning the stock owned, ered as owning the stock owned, ered as owning the stock owned, directly or indirectly, by or for his directly or indirectly, by or for his directly or indirectly, by or for his partner; partner; partner; family; (D) The family of an individual (D) The family of an individual shall include only his brothers shall include only his brothers and sisters (whether by the whole and sisters (whether by the whole or half blood), spouse, ancestors, or half blood), spouse, ancestors, and lineal descendants; and and lineal descendants; and family; (D) The family of an individual shall include only his brothers and sisters (whether by the whole or half blood), spouse, ancestors, and lineal descendants; and con (E) Constructive Ownership as (E) Constructive Ownership as (E) Constructive Ownership as Actual Ownership. Stock con- Actual Ownership.-Stock Actual Ownership.-Stock con- structively owned by a person by structively owned by a person by structively owned by a person by reason of the application of sub- reason of the application of subreason of the application of sub- paragraph (A) shall, for the pur- paragraph (A) shall, for the purparagraph (A) shall, for the pur- pose of applying subparagraph pose of applying subparagraph pose of applying subparagraph (A), (B), or (C), be treated as (A), (B), or (C), be treated as (A), (B), or (C), be treated as actually owned by such person, but actually owned by such person, but actually owned by such person, but stock constructively owned by an stock constructively owned by an stock constructively owned by an individual by reason of the appli- individual by reason of the appliindividual by reason of the appli- cation of subparagraph (B) or cation of subparagraph (B) or cation of subparagraph (B) or (C) shall not be treated as owned (C) shall not be treated as owned (C) shall not be treated as owned by him for the purpose of again by him for the purpose of again by him for the purpose of again applying either of such subpara- applying either of such subparaapplying either of such subpara- the constructive graphs in order to make another graphs in order to make another owner of such the constructive Owner of such graphs in order to make another stock. stock. the constructive owner of such stock. Sec. 24. (c) Unpaid expenses Sec. 24. (c) Unpaid expenses Sec. 24. (c) Unpaid expenses and interest. In computing net and interest. In computing net and interest.-In computing net income no deduction shall be al- income no deduction shall be al- income no deduction shall be al Sec. 24. (b) (2) Stock owner- Sec. 24 (b) (2) Stock ownership, family, and partnership rule. ship, family, and partnership rule. -For the purposes of determin--For the purposes of determining, in applying paragraph (1), ing, in applying paragraph (1), the ownership of stockthe ownership of stock (A) Stock owned, directly or (A) Stock owned, directly or indirectly, by or for a corporation, indirectly, by or for a corporation, partnership, estate, or trust, shall partnership, estate, or trust, shall be considered as being owned pro- be considered as being owned proportionately by or for its share-portionately by or for its shareholders, partners, or beneficiaries; holders, partners, or beneficiaries; (B) An individual shall be con- (B) An individual shall be considered as owning the stock owned, sidered as owning the stock owned, directly or indirectly, by or for directly or indirectly, by or for his family; his family; (C) An individual owning (C) An individual owning (other(otherwise than by the application wise than by the application of of subparagraph (B)) any stock subparagraph (B)) any stock in in a corporation shall be consid- a corporation shall be considered ered as owning the stock owned, as owning the stock owned, didirectly or indirectly, by or for his rectly or indirectly, by or for his partner; partner; (D) The family of an individual (D) The family of an individual shall include only his brothers shall include only his brothers and sisters (whether by the whole and sisters (whether by the whole or half blood), spouse, ancestors, or half blood), spouse, ancestors, and lineal descendants; and and lineal descendants; and (E) Constructive Ownership as Actual Ownership.-Stock con (E) Constructive Ownership as Actual Ownership.-Stock constructively owned by a person by structively owned by a person by reason of the application of sub- reason of the application of subparagraph (A) shall, for the pur- paragraph (A) shall, for the purpose of applying subparagraph pose of applying subparagraph (A), (B), or (C), be treated as (A), (B), or (C), be treated as actually owned by such person, but actually owned by such person, stock constructively owned by an but stock constructively owned by individual by reason of the appli- an individual by reason of the apcation of subparagraph (B) or plication of subparagraph (B) or (C) shall not be treated as owned (C) shall not be treated as owned by him for the purpose of again by him for the purpose of again applying either of such subpara- applying either of such subparagraphs in order to make another graphs in order to make another the constructive owner of such the constructive owner of such stock. stock. Sec. 24. (b) (2) Stock ownership, family, and partnership rule. See p. 60, Eighth Edition. Sec. 24. (c) Unpaid expenses Sec. 24. (c) Unpaid expenses and interest.—In computing net and interest.-In computing net inincome no deduction shall be al- come no deduction shall be allowed Sec. 24. (c) Unpaid expenses and interest. See p. 60. Eighth Edition. Taxable Years Taxable Years Taxable Years lowed under section 23 (a), relat- lowed under section 23 (a), relat-lowed under section 23 (a), relating to expenses incurred, or under ing to expenses incurred, or under ing to expenses incurred, or under section 23 (b), relating to interest section 23 (b), relating to interest section 23 (b), relating to interest accrued accruedaccrued Sec. 24. (c) (1) If such expenses or interest are not paid within the taxable year or within two and one half months after the close thereof; and Sec. 24. (c) (2) If, by reason of the method of accounting of the person to whom the payment is to be made, the amount thereof is not, unless paid, includible in the gross income of such person for the taxable year in which or with which the taxable year of the taxpayer ends; and Sec. 24. (c) (1) If such expenses Sec. 24. (c) (1) If such expenses or interest are not paid within the or interest are not paid within the taxable year or within two and taxable year or within two and one half months after the close one half months after the close thereof; and thereof; and Sec. 24. (c) (2) If, by reason Sec. 24. (c) (2) If, by reason of the method of accounting of the of the method of accounting of the person to whom the payment is to person to whom the payment is to be made, the amount thereof is be made, the amount thereof is not, unless paid, includible in the not, unless paid, includible in the gross income of such person for gross income of such person for the taxable year in which or with the taxable year in which or with which the taxable year of the tax- which the taxable year of the taxpayer ends; and payer ends; and Sec. 24. (c) (3) If, at the close Sec. 24. (c) (3) If, at the close Sec. 24. (c) (3) If, at the close of the taxable year of the tax- of the taxable year of the tax- of the taxable year of the taxpayer or at any time within two payer or at any time within two payer or at any time within two and one half months thereafter, and one half months thereafter, and one half months thereafter, both the taxpayer and the person both the taxpayer and the person both the taxpayer and the person to whom the payment is to be to whom the payment is to be to whom the payment is to be made are persons between whom made are persons between whom made are persons between whom losses would be disallowed under losses would be disallowed under losses would be disallowed under section 24 (b). section 24 (b). section 24 (b). Sec. 24. (d) Holders of life or Sec. 24. (d) Holders of life or Sec. 24. (d) Holders of life or terminable interest.-Amounts terminable interest.-Amounts terminable interest.-Amounts paid under the laws of any State, paid under the laws of any State, paid under the laws of any State, Territory, District of Columbia, Territory, District of Columbia, Territory, District of Columbia, possession of the United States, or possession of the United States, or possession of the United States, or foreign country as income to the foreign country as income to the foreign country as income to the holder of a life or terminable in- holder of a life or terminable in- holder of a life or terminable interest acquired by gift, bequest, terest acquired by gift, bequest, terest acquired by gift, bequest, or inheritance shall not be reduced or inheritance shall not be reduced or inheritance shall not be reduced or diminished by any deduction or diminished by any deduction or diminished by any deduction for shrinkage (by whatever name for shrinkage (by whatever name for shrinkage (by whatever name called) in the value of such inter- called) in the value of such inter-called) in the value of such interest due to the lapse of time, nor est due to the lapse of time, nor est due to the lapse of time, nor by any deduction allowed by this by any deduction allowed by this by any deduction allowed by this chapter (except the deductions chapter (except the deductions chapter (except the deductions provided for in subsections (1) provided for in subsections (1) provided for in subsections (1) and (m) of section 23) for the and (m) of section 23) for the and (m) of section 23) for the purpose of computing the net in- purpose of computing the net in- purpose of computing the net income of an estate or trust but not come of an estate or trust but not come of an estate or trust but not allowed under the laws of such allowed under the laws of such allowed under the laws of such State, Territory, District of Co- State, Territory, District of Co- State, Territory, District of Columbia, possession of the United lumbia, possession of the United lumbia, possession of the United States, or foreign country for the States, or foreign country for the States, or foreign country for the purpose of computing the income purpose of computing the income purpose of computing the income to which such holder is entitled. to which such holder is entitled. to which such holder is entitled. Sec. 24. (c) (3) If, at the close Sec. 24. (c) (3) If, at the close of the taxable year of the tax- of the taxable year of the taxpayer or at any time within two payer or at any time within two and one half months thereafter, and one half months thereafter, both the taxpayer and the person both the taxpayer and the person to whom the payment is to be to whom the payment is to be made are persons between whom made are persons between whom losses would be disallowed under losses would be disallowed under section 24 (b). section 24 (b). Taxable Years Beginning before 1939 See p. 62, Eighth Edition. Sec. 24. (d) Holders of life or Sec. 24. (d) Holders of life or Sec. 24. (d) Holders of life or terminable interest.-Amounts terminable interest.-Amounts terminable interest. paid under the laws of any State, paid under the laws of any State, Territory, District of Columbia, Territory, District of Columbia, possession of the United States, or possession of the United States, or foreign country as income to the foreign country as income to the holder of a life or terminable in- holder of a life or terminable interest acquired by gift, bequest, terest acquired by gift, bequest, or inheritance shall not be reduced or inheritance shall not be reduced or diminished by any deduction or diminished by any deduction for shrinkage (by whatever name for shrinkage (by whatever name called) in the value of such inter- called) in the value of such interest due to the lapse of time, nor est due to the lapse of time, nor by any deduction allowed by this by any deduction allowed by this chapter (except the deductions chapter (except the deductions provided for in subsections (1) provided for in subsections (1) and (m) of section 23) for the and (m) of section 23) for the purpose of computing the net in- purpose of computing the net income of an estate or trust but not come of an estate or trust but not allowed under the laws of such allowed under the laws of such State, Territory, District of Co- State, Territory, District of Columbia, possession of the United lumbia, possession of the United States, or foreign country for the States, or foreign country for the purpose of computing the income purpose of computing the income to which such holder is entitled. to which such holder is entitled. |