Sec. 27. (a) (3) The amount, if Sec. 27. (a) (3) The amount, if any, by which any deficit in the any, by which any deficit in the accumulated earnings and profits, accumulated earnings and profits, as of the close of the preceding as of the close of the preceding taxable year (whether beginning taxable year (whether beginning on, before, or after January 1, on, before, or after January 1, 1939), exceeds the amount of the 1939), exceeds the amount of the Sec. 27. Corporation dividends paid credit. Sec. 27. (a) Definition in general. See p. 74, Eighth Edition. Taxable Years credit provided in section 26 (c) (relating to net operating losses), for such preceding taxable year (if beginning after December 31, 1937); and credit provided in section 26 (c) credit provided in section 26 (c) Sec. 27. (a) (4) Amounts used Sec. 27. (a) (4) Amounts used Sec. 27. (a) (4) Amounts used or irrevocably set aside to pay or or irrevocably set aside to pay or or irrevocably set aside to pay or to retire indebtedness of any kind, to retire indebtedness of any kind, to retire indebtedness of any kind, if such amounts are reasonable if such amounts are reasonable if such amounts are reasonable with respect to the size and terms with respect to the size and terms with respect to the size and terms of such indebtedness. As used in of such indebtedness. As used in of such indebtedness. As used in this paragraph the term "indebt- this paragraph the term "indebt- this paragraph the term "indebtedness" means only an indebted- edness" means only an indebted-edness" means only an indebtedness of the corporation existing at ness of the corporation existing at ness of the corporation existing at the close of business on Decem- the close of business on Decem- the close of business on December 31, 1937, and evidenced by a ber 31, 1937, and evidenced by a ber 31, 1937, and evidenced by a bond, note, debenture, certificate bond, note, debenture, certificate bond, note, debenture, certificate of indebtedness, mortgage, or deed of indebtedness, mortgage, or deed of indebtedness, mortgage, or deed of trust, issued by the corporation of trust, issued by the corporation of trust, issued by the corporation and in existence at the close of and in existence at the close of and in existence at the close of business on December 31, 1937, or business on December 31, 1937, or business on December 31, 1937, or by a bill of exchange accepted by by a bill of exchange accepted by by a bill of exchange accepted by the corporation prior to, and in the corporation prior to, and in the corporation prior to, and in existence at, the close of business existence at, the close of business existence at, the close of business on such date. Where the indebted on such date. Where the indebted-on such date. Where the indebtedness is for a principal sum, with ness is for a principal sun, withness is for a principal sum, with interest, no credit shall be allowed interest, no credit shall be allowed interest, no credit shall be allowed under this paragraph for amounts under this paragraph for amounts under this paragraph for amounts used or set aside to pay such inter- used or set aside to pay such inter- used or set aside to pay such inest. A renewal (however evi- est. A renewal (however evi- terest. A renewal (however evidenced) of an indebtedness shall be denced) of an indebtedness shall be denced) of an indebtedness shall be considered an indebtedness. Sec. 27 (a) (4), I. R. C., supra, amended by Sec. 222 (a), R. A. of 1939, approved June 29. 1939. to read as above. Sec. 222 (b) of said Act makes amendment applicable to taxable years beginning after Dec. 31, 1938. For Sec. 27 (a) (4), supra, before amendment, see Sec. 27 (a) (4) in 1939 column. Sec. 27. (b) Basic surtax credit. Sec. 27. (b) Basic surtax credit. -As used in this chapter the term -As used in this chapter the term "basic surtax credit" means the "basic surtax credit" means the sum of: sum of: Sec. 27. (b) (1) The dividends paid during the taxable year, increased by the consent dividends credit provided in section 28, and reduced by the amount of the credit provided in section 26 (a), relating to interest on certain obligations of the United States and Government corporations; Sec. 27. (b) (2) The net operating loss credit provided in section 26 (c) (1); Sec. 27. (b) (3) The bank affiliate credit provided in section 26 (d). Sec. 27. (b) (1) The dividends paid during the taxable year, increased by the consent dividends credit provided in section 28, and reduced by the amount of the credit provided in section 26 (a), relating to interest on certain obligations of the United States and Government corporations; Sec. 27. (b) (2) The net operating loss credit provided in section 26 (e) (1); Sec. 27. (b) (3) The bank affiliate credit provided in section 26 (d). considered an indebtedness. Sec. 27 (a) (4), I. R. C., 222 supra, amended by Sec. (a), R. A. of 1939, approved June 29, 1939, to read as above. Sec. 222 (b) of said Act makes amendment applicable to taxable years beginning after Dec. 31, 1938. For Sec. 27 (a) (4), supra, before amendment, see Sec. 27 (a) (4) in 1939 column. Sec. 27. (b) Basic surtax credit. -As used in this chapter the term "basic surtax credit" means the sum of: Sec. 27. (b) (1) The dividends paid during the taxable year, increased by the consent dividends credit provided in section 28, and reduced by the amount of the credit provided in section 26 (a), relating to interest on certain obligations of the United States and Government corporations; Sec. 27. (b) (2) The net operating loss credit provided in section 26 (c) (1); Sec. 27. (b) (3) The bank affiliate credit provided in section 26 (d). The aggregate of the amounts un- The aggregate of the amounts un- The aggregate of the amounts under der paragraphs (2) and (3) shall der paragraphs (2) and (3) shall paragraphs (2) and (3) shall not Sec. 27. (a) (4) Amounts used Sec. 27. (a) (4) Amounts used or irrevocably set aside to pay or or irrevocably set aside to pay or to retire indebtedness of any kind, to retire indebtedness of any kind, if such amounts are reasonable if such amounts are reasonable with respect to the size and terms with respect to the size and terms of such indebtedness. As used in of such indebtedness. As used in this paragraph the term "indebt- this paragraph the term "indebtedness" means only an indebted-edness" means only an indebtedness of the corporation existing at ness of the corporation existing at the close of business on Decem- the close of business on December 31, 1937, and evidenced by a ber 31, 1937, and evidenced by a bond, note, debenture, certificate bond, note, debenture, certificate of indebtedness, mortgage, or deed of indebtedness, mortgage, or deed of trust, issued by the corporation of trust, issued by the corporation and in existence at the close of and in existence at the close of business on December 31, 1937, or business on December 31, 1937, or by a bill of exchange accepted by by a bill of exchange accepted by the corporation prior to, and in the corporation prior to, and in existence at, the close of business existence at, the close of business on such date. Where the indebted- on such date. Where the indebtedness is for a principal sum, with ness is for a principal sum, with interest, no credit shall be allowed interest, no credit shall be allowed under this paragraph for amounts used or set aside to pay such interest. A renewal (however evidenced) of an indebtedness shall be considered an indebtedness. Sec. 27 (a) (4), I. R. C., supra, amended by Sec. 222 (a), R. A. of 1939, approved June 29, 1939, to read as above. Sec. 222 (b) of said Act makes amendment applicable to taxable years beginning after Dec. 31, 1938. For Sec. 27 (a) (4), supra, before amendment, see Sec. 27 (a) (4) in 1939 column. Sec. 27. (b) Basic surtax credit. under this paragraph for amounts Sec. 27 (a) (4), I. R. C., supra, amended by Sec. 222 (a), R. A. of 1939, approved June 29, 1939, by adding language in italics. Sec. 222 (b) of said Act makes amendment applicable to taxable years beginning after Dec. 31, 1938. Sec. 27. (b) Basic surtax credit. -As used in this chapter the term-As used in this chapter the term "basic surtax credit" means the basic surtax credit" means the sum of: Sec. 27. (b) (1) The dividends paid during the taxable year, increased by the consent dividends credit provided in section 28, and reduced by the amount of the credit provided in section 26 (a), relating to interest on certain obligations of the United States and Government corporations; Sec. 27. (b) (2) The net operating loss credit provided in section 26 (c) (1); Sec. 27. (b) (3) The bank affiliate credit provided in section 26 (d). 66 sum of: Sec. 27. (b) (1) The dividends paid during the taxable year, increased by the consent dividends credit provided in section 28, and reduced by the amount of the credit provided in section 26 (a), relating to interest on certain obligations of the United States and Government corporations; Sec. 27. (b) (2) The net operating loss credit provided in section 26 (c) (1); Sec. 27. (b) (3) The bank affiliate credit provided in section 26 (d). The aggregate of the amounts The aggregate of the amounts ununder paragraphs (2) and (3) der paragraphs (2) and (3) shall Taxable Years Beginning before 1939 Retroactivity Sec. 27 (a) (4), R. A. of 1938, is amended by Sec. 222 (c), R. A. of 1939, by inserting at the end thereof the same sentence which is added to Sec. 27 (a) (4), I. R. C. (1939 column). Sec. 222 (d), R. A. of 1939, made amendments applicable to taxable years beginning after Dec. 31, 1937. Sec. 27. (b) Basic surtax credit. Taxable Years not exceed (A) the section 102 net income for the taxable year, in the case of the tax imposed by section 102; (B) the Supplement P net income for the taxable year, in the case of the computations required under Supplement P; or (C) the Subchapter A net income for the taxable year, in the case of the tax imposed under Subchapter A. Sec. 27 (b), I. R. C., supra, amended by Sec. 132 (b), R. A. of 1942, to read as above. Sec. 132 (e) of said Act makes amendment applicable to taxable years beginning after Dec. 31, 1939, but also applicable in the computations with respect to previous taxable years for the purpose of ascertaining the amount of any dividend carry-over from such previous taxable years. For Sec. 27 (b), I. R. C., before amendment, see 1942 column. not exceed (A) the section 102 net exceed (A) the section 102 net in- Sec. 27 (b), I. R. C., supra, Sec. 27. (c) Dividend carry Sec. 27 (b), I. R. C., supra, amended by Sec. 132 (b), R. A. of 1942, by omitting language in stricken through type and adding language In italics. Sec. 132 (e) of said Act makes amendment applicable to taxable years beginning after Dec. 31, 1939, but also applicable in the computations with respect to previous taxable years for the purpose of ascertaining the amount of any dividend carry-over from such previous taxable years. Sec. 27. (c) Dividend carry Sec. 27. (c) Dividend carryover. There shall be computed over.-There shall be computed over. There shall be computed with respect to each taxable year with respect to each taxable year with respect to each taxable year of a corporation a dividend carry- of a corporation a dividend carry- of a corporation a dividend carryover to such year from the two over to such year from the two over to such year from the two preceding taxable years, which preceding taxable years, which preceding taxable years, which shall consist of the sum of Sec. 27. (c) (1) The amount of the basic surtax credit for the second preceding taxable year, reduced by the Subchapter A net income for such year, and further reduced by the amount, if any, by which the Subchapter A net income for the first preceding taxable year exceeds the sum of (A) The basic surtax credit for such year; and (B) The excess, if any, of the basic surtax credit for the third preceding taxable year over the Subchapter A net income for such year; and shall consist of the sum of shall consist of the sum of— Sec. 27. (c) (1) The amount of Sec. 27. (c) (1) The amount of the basic surtax credit for the sec- the basic surtax credit for the second preceding taxable year, re- ond preceding taxable year, reduced by the Subchapter A adduced by the Subchapter A ad justed net income for such year, justed net income for such year, and further reduced by the amount, if any, by which the Subchapter A adjusted net income for the first preceding taxable year exceeds the sum of (A) The basic surtax credit for such year; and (B) The excess, if any, of the basic surtax credit for the third preceding taxable year over the Subchapter A adjusted net income for such year; and and further reduced by the amount, if any, by which the Subchapter A adjusted net income for the first preceding taxable year exceeds the sum of (A) The basic surtax credit for such year; and (B) The excess, if any, of the basic surtax credit for the third preceding taxable year over the Subchapter A adjusted net income for such year; and Sec. 27. (c) (2) The amount, if Sec. 27. (c) (2) The amount, if Sec. 27. (c) (2) The amount, if any, by which the basic surtax any, by which the basic surtax any, by which the basic surtax credit for the first preceding tax- credit for the first preceding tax- credit for the first preceding taxable year exceeds the Subchapter able year exceeds the Subchapter able year exceeds the Subchapter A net income for such year. In A adjusted net income for such A adjusted net income for such the case of a preceding taxable year year. In the case of a preceding year. In the case of a preceding referred to in this subsection, the taxable year referred to in this taxable year referred to in Subchapter A net income shall be subsection, the Subchapter A net subsection, the Subchapter A net determined as if the corporation income shall be determined as if income shall be determined as if was, under the law applicable to the corporation was, under the law the corporation was, under the law such taxable year, a personal hold-applicable to such taxable year, a applicable to such taxable year, a ing company. personal holding company. personal holding company. Sec. 27 (c), I. R. C., supra, amended by Sec. 132 (c) R. A. of 1942, to read as above. this In the ease of a preceding taxable In the case of a preceding taxable year, referred to in this subsee | year, referred to in this subsee shall not exceed (A) the section not exceed the adjusted net income 102 net income for the taxable for the taxable year. year, in the case of the tax imposed by section 102; (B) the Supplement P net income for the taxable year, in the case of the computations required under Supplement P; or (C) the Subchapter A the adjusted net income for the taxable year, in the case of the tax imposed under Subchapter A. Sec. 27 (b), I. R. C., supra, amended by Sec. 132 (b), R. A. of 1942, by omitting language in stricken through type and adding language in italics. Sec. 132 (e) of said Act makes amendment applicable to taxable years beginning after Dec. 31, 1939, but also applicable in the computations with respect to previous taxable years for the purpose of ascertaining the amount of any dividend carry-over from such previous taxable years. Taxable Years Sec. 27. (c) Dividend carry Sec. 27. (c) Dividend carry- Sec. 27. (c) Dividend carryover.-There shall be computed over.-There shall be computed over. with respect to each taxable year with respect to each taxable year of a corporation a dividend carry-of a corporation a dividend carryover to such year from the two over to such year from the two preceding taxable years, which preceding taxable years, shall consist of the sum ofshall consist of the sum of which Sec. 27. (c) (1) The amount of Sec. 27. (c) (1) The amount of the basic surtax credit for the sec- the basic surtax credit for the second preceding taxable year, re- ond preceding taxable year, reduced by the Subchapter A adduced by the adjusted net income justed net income for such year, for such year, and further reduced and further reduced by the amount, if any, by which the Subchapter A adjusted net income for the first preceding taxable year exceeds the sum of (A) The basic surtax credit for such year; and (B) The excess, if any, of the basic surtax credit for the third preceding taxable year over the Subchapter A adjusted net income for such year; and Sec. 27. (c) (2) The amount, if by the amount, if any, by which (A) The basic surtax credit for (B) The excess, if any, of the basic surtax credit for the third preceding taxable year over the adjusted net income for such year; and Sec. 27. (c) (2) The amount, if any, by which the basic surtax any, by which the basic surtax credit for the first preceding tax- credit for the first preceding taxable year exceeds the Subchapter able year exceeds the adjusted net A adjusted net income for such income for such year. year. In the case of a preceding taxable year referred to in this In the case of a preceding taxable See p. 76, Eighth Edition. |