Taxable Years Beginning in 1943 Taxable Years Taxable Years 1942, bears to the total number of 1942, bears to the total number of 1942, bears to the totoal number of days in such taxable year. days in such taxable year. days in such taxable year. Sec. 108. (a) (2) Taxpayers other than corporations. In the case of a taxpayer other than a corporation, an amount equal to the sum of (A) that portion of a tentative tax, computed without regard to section 140 of the Revenue Act of 1942, which the number of days in such taxable year before July 1, 1942, bears to the total number of days in such taxable year, plus (B) that portion of a tentative tax, computed as if the amendments made by sections 102 and 103 of the Revenue Act of 1942 were applicable to such taxable year, which the number of days in such taxable year after June 30, 1942, bears to the total number of days in such taxable year. Sec. 108. (a) (2) Taxpayers other than corporations. In the case of a taxpayer other than a corporation, an amount equal to the sum of (A) that portion of a tentative tax, computed without regard to section 140 of the Revenue Act of 1942, which the number of days in such taxable year before July 1, 1942, bears to the total number of days in such taxable year, plus (B) that portion of a tentative tax, computed as if the amendments made by sections 102 and 103 of the Revenue Act of 1942 were applicable to such taxable year, which the number of days in such taxable year after June 30, 1942, bears to the total number of days in such taxable year. Sec. 108. (a) (2) Taxpayers other than corporations. In the case of a taxpayer other than a corporation, an amount equal to the sum of (A) that portion of a tentative tax, computed without regard to section 140 of the Revenue Act of 1942, which the number of days in such taxable year before July 1, 1942, bears to the total number of days in such taxable year, plus (B) that portion of a tentative tax, computed as if the amendments made by sections 102 and 103 of the Revenue Act of 1942 were applicable to such taxable year, which the number of days in such taxable year after June 30, 1942, bears to the total number of days in such taxable year. Sec. 108. (b) Special classes of Sec. 108. (b) Special classes of Sec. 108. (b) Special classes of taxpayers. This section shall not taxpayers.-This section shall not taxpayers.-This section shall not apply to an insurance company apply to an insurance company apply to an insurance company subject to Supplement G, an invest- subject to Supplement G, an invest- subject to Supplement G, an inment company subject to Supple- ment company subject to Supple- vestment company subject to Supment Q, or a Western Hemisphere ment Q, or a Western Hemisphere plement Q, or a Western HemiTrade Corporation, as defined in Trade Corporation, as defined in sphere Trade Corporation, as defined section 109. Sec. 108, I. R. C., supra, added to I. R. C. by Sec. 140 (a), R. A. of 1942. Sec. 140 (b) of said Act makes amendment applicable to taxable years beginning in 1941 and ending after June 30, 1942. Sec. 109. Western Hemisphere Trade Corporations. For the purposes of this chapter, the term "western hemisphere trade corporation" means a domestic corporation all of whose business is done in any country or countries in North, Central, or South America, or in the West Indies, or in Newfoundland and which satisfies the following conditions: section 109. Sec. 108, I. R. C., supra, Sec. 109. Western Hemisphere For the purposes of this chapter, Sec. 109. (a) If 95 per centum Sec. 109. (a) If 95 per centum or more of the gross income of such or more of the gross income of such domestic corporation for the three- domestic corporation for the threeyear period immediately preceding year period immediately preceding the close of the taxable year (or the close of the taxable year (or for such part of such period during for such part of such period during which the corporation was in exist- which the corporation was in existence) was derived from sources ence) was derived from sources other than sources within the United other than sources within the United States; and States; and Sec. 109. (b) If 90 per centum or more of its gross income for such period or such part thereof was de Sec. 109. (b) If 90 per centum or more of its gross income for such period or such part thereof was de in section 109. Sec. 108, I. R. C., supra, added to I. R. C. by Sec. 140 (a), R. A. of 1942. Sec. 140 (b) of said Act makes amendment applicable to taxable years beginning in 1941 and ending after June 30, 1942. Taxable Years Taxable Years Taxable Years rived from the active conduct of a rived from the active conduct of a trade or business. Sec. 109, I. R. C., supra, added to I. R. C. by 141, R. A. of 1942. Sec. 101 of said Act makes amendment applicable to taxable years beginning after Dec. 31, 1941. trade or business. Sec. 109, I. R. C., supra, added to I. R. C. by Sec. 141, R. A. of 1942. Sec. 101 of said Act makes amendment applicable to taxable years beginning after Dec. 31, 1941. Supplement B-Computation of Supplement B-Computation of Supplement B-Computation of Sec. 111. (a) Computation of Sec. 111. (a) Computation of Sec. 111. (a) Computation of gain or loss.-The gain from the gain or loss.-The gain from the gain or loss.-The gain from the sale or other disposition of prop- sale or other disposition of prop- sale or other disposition of property shall be the excess of the erty shall be the excess of the erty shall be the excess of the amount realized therefrom over the amount realized therefrom over the amount realized therefrom over the adjusted basis provided in section adjusted basis provided in section adjusted basis provided in section 113 (b) for determining gain, and 113 (b) for determining gain, and 113 (b) for determining gain, and the loss shall be the excess of the the loss shall be the excess of the the loss shall be the excess of the adjusted basis provided in such adjusted basis provided in such adjusted basis provided in such section for determining loss over section for determining loss over section for determining loss over the amount realized. the amount realized. the amount realized. Sec. 111. (c) Recognition of Sec. 111. (c) Recognition of Sec. 111. (c) Recognition of gain or loss. In the case of a gain or loss. In the case of a sale or exchange, the extent to sale or exchange, the extent to which the gain or loss determined which the gain or loss determined under this section shall be recog- under this section shall be recognized for the purposes of this nized for the purposes of this chapter, shall be determined under chapter, shall be determined under the provisions of section 112. the provisions of section 112. Sec. 111. (d) Installment sales. Sec. 111. (d) Installment sales. -Nothing in this section shall be-Nothing in this section shall be construed to prevent (in the case construed to prevent (in the case of property sold under contract of property sold under contract providing for payment in install- providing for payment in installments) the taxation of that portion ments) the taxation of that portion of any installment payment repre- of any installment payment representing gain or profit in the year in senting gain or profit in the year in which such payment is received. which such payment is received. Sec. 112. Recognition of gain or loss. Sec. 112. Recognition of gain or loss. Sec. 112. (a) General rule- Sec. 112. (a) General rule.Upon the sale or exchange of Upon the sale or exchange of property the entire amount of the property the entire amount of the gain or loss, determined under sec- gain or loss, determined under section 111, shall be recognized, ex- tion 111, shall be recognized, except as hereinafter provided in this cept as hereinafter provided in this section. section. gain or loss. In the case of a sale or exchange, the extent to which the gain or loss determined under this section shall be recognized for the purposes of this chapter, shall be determined under the provisions of section 112. Sec. 111. (d) Installment sales. -Nothing in this section shall be construed to prevent (in the case of property sold under contract providing for payment in installments) the taxation of that portion of any installment payment representing gain or profit in the year in which such payment is received. Sec. 112. Recognition of gain or loss. Sec. 112. (a) General rule.Upon the sale or exchange of property the entire amount of the gain or loss, determined under section 111, shall be recognized, except as hereinafter provided in this section. Taxable Years Taxable Years Taxable Years Supplement B-Computation of Supplement B-Computation of Supplement B-Computation of Net Income [Supplementary to Subchapter B, Part II] Net Income [Supplementary to Subchapter B, Net Income [Supplementary to Subtitle B, Part II] of Sec. 111. Determination of of Sec. 111. Determination Sec. 111. Determination amount of, and recognition of, gain or loss. Sec. 111. (a) Computation of gain or loss.-The gain from the sale or other disposition of property shall be the excess of the amount realized therefrom over the adjusted basis provided in section 113 (b) for determining gain, and the loss shall be the excess of the adjusted basis provided in such section for determining loss over the amount realized. Sec. 111. (a) Computation of See p. 138, Eighth Edition. Sec. 111. (a) Computation of Sec. 111. (b) Amount realized.— Sec. 111. (b) Amount realized.— The amount realized from the sale The amount realized from the sale or other disposition of property or other disposition of property shall be the sum of any money re- shall be the sum of any money received plus the fair market value of ceived plus the fair market value of the property (other than money) the property (other than money) received. received. Sec. 111. (b) Amount realized. Sec. 111. (c) Recognition of See p. 140, Eighth Edition. Sec. 111. (c) Recognition of Sec. 111. (c) Recognition of gain or loss. In the case of a gain or loss. In the case of a gain or loss. sale or exchange, the extent to sale or exchange, the extent to which the gain or loss determined which the gain or loss determined under this section shall be recog- under this section shall be recognized for the purposes of this nized for the purposes of this chapchapter, shall be determined under ter, shall be determined under the the provisions of section 112. provisions of section 112. Sec. 111. (d) Installment sales. Sec. 111. (d) Installment sales.-Nothing in this section shall be Nothing in this section shall be conconstrued to prevent (in the case strued to prevent (in the case of of property sold under contract property sold under contract proproviding for payment in install-viding for payment in installments) ments) the taxation of that portion the taxation of that portion of any of any installment payment repre-installment payment representing senting gain or profit in the year in gain or profit in the year in which which such payment is received. such payment is received. Sec. 112. Recognition of gain or loss. Sec. 112. Recognition of gain or loss. Sec. 112. (a) General rule.- Sec. 112. (a) General rule.Upon the sale or exchange of Upon the sale or exchange of propproperty the entire amount of the erty the entire amount of the gain gain or loss, determined under sec- or loss, determined under section tion 111, shall be recognized, ex- 111, shall be recognized, except as cept as hereinafter provided in this hereinafter provided in this section. section. Sec. 111. (d) Installment sales. See p. 140, Eighth Edition. Sec. 112. Recognition of gain or loss. Sec 112. (a) General rule. See p. 140, Eighth Edition. 218 Taxable Years Sec. 112. (b) Exchanges solely in kind. Taxable Years Sec. 112. (b) Exchanges solely in kind. Beginning in 1941 Sec. 112. (b) Exchanges solely in kind. Sec. 112. (b) (1) Property held Sec. 112. (b) (1) Property held Sec. 112. (b) (1) Property held for productive use or investment. for productive use or investment. for productive use or investment. -No gain or loss shall be recog--No gain or loss shall be recog--No gain or loss shall be recognized if property held for produc- nized if property held for produc- nized if property held for productive use in trade or business or for tive use in trade or business or for investment (not including stock in investment (not including stock in trade or other property held pri- trade or other property held primarily for sale, nor stocks, bonds, marily for sale, nor stocks, bonds, notes, choses in action, certificates notes, choses in action, certificates of trust or beneficial interest, or of trust or beneficial interest, or other securities or evidences of in- other securities or evidences of indebtedness or interest) is exchanged debtedness or interest) is exchanged solely for property of a like kind solely for property of a like kind to be held either for productive use to be held either for productive use in trade or business or for invest- in trade or business or for investment. ment. Sec. 112. (b) (2) Stock for stock Sec. 112. (b) (2) Stock for stock of same corporation.-No gain or of same corporation.-No gain or loss shall be recognized if common loss shall be recognized if common stock in a corporation is exchanged stock in a corporation is exchanged solely for common stock in the same solely for common stock in the same corporation, or if preferred stock corporation, or if preferred stock in a corporation is exchanged solely in a corporation is exchanged solely for preferred stock in the same cor- for preferred stock in the same corporation. poration. or tive use in trade or business or for Sec. 112. (b) (2) Stock for stock of same corporation.-No gain or loss shall be recognized if common stock in a corporation is exchanged solely for common stock in the same corporation, or if preferred stock in a corporation is exchanged solely poration. for preferred stock in the same cor for a Sec. 112. (b) (3) Stock (3) Stock for Sec. 112. (b) Sec. 112. (b) (3) Stock for stock on reorganization.-No gain stock on reorganization.-No gain stock on reorganization.-No gain or securities in a corporation or loss shall be recognized if stock or loss shall be recognized if stock or loss shall be recognized if stock securities in a corporation a or securities in a corporation a or party to a reorganization are, in party to a reorganization are, in party to a reorganization are, in pursuance of the plan of reorgani- pursuance of the plan of reorgani- pursuance of the plan of reorganization, exchanged solely for stock zation, exchanged solely for stock zation, exchanged solely for stock or securities in such corporation or or securities in such corporation or or securities in such corporation or the reorganization. in another corporation a party to in another corporation a party to in another corporation a party to the reorganization. the reorganization. Sec. 112. (b) (4) Same-Gain Sec. 112. (b) (4) Same-Gain Sec. 112. (b) (4) Same-Gain of corporation.-No gain or loss of corporation.-No gain or loss of corporation.-No gain or loss a reorganization exshall be recognized if a corporation shall be recognized if a corporation shall be recognized if a corporation a party to a reorganization ex- a party to a reorganization ex- a party to changes property, in pursuance of changes property, in pursuance of changes property, in pursuance of the plan of reorganization, solely the plan of reorganization, solely the plan of reorganization, solely for stock or securities in another for stock or securities in another for stock or securities in another ization. corporation a party to the reorgan- corporation a party to the reorgan- corporation a party to the reorganization. ization. Sec. 112. (b) (5) Transfer to Sec. 112. (b) (5) Transfer to Sec. 112. (b) (5) Transfer to corporation controlled by trans- corporation controlled by trans- corporation controlled by transferor. No gain or loss shall be feror.-No gain or loss shall be feror.-No gain or loss shall be recognized if property is trans-recognized if property is trans-recognized if property is transferred to a corporation by one or ferred to a corporation by one or ferred to a corporation by one or more persons solely in exchange more persons solely in exchange more persons solely in exchange for stock or securities in such cor- for stock or securities in such cor- for stock or securities in such corporation, and immediately after poration, and immediately after poration, and immediately after the exchange such person or per- the exchange such person or per- the exchange such person or perex- tion; but in the case of an exmore persons sons are in control of the corpora- sons are in control of the corpora- sons are in control of the corporaex- tion; but in the case of an tion; but in the case of an more persons change by two or more persons change by two change by two or this paragraph shall apply only if this paragraph shall apply only if this paragraph shall apply only if the amount of the stock and secu- the amount of the stock and secu- the amount of the stock and secu or |