countries. If the Commonwealth the United States in foreign coun of the Philippines grants an equiv- tries. alent exemption to the employees of the United States performing services in such Commonwealth the Secretary of State shall certify such fact to the Secretary of the Treasury and the character of the services performed by employees of the Government of the United States in such Commonwealth. Sec. 117. (a) (1) Capital assets. Sec. 117. (a) (1) Capital assets. -The term "capital assets" means -The term "capital assets'' property held by the taxpayer means property held by the tax(whether or not connected with his payer (whether or not connected trade or business), but does not in- with his trade or business), but clude stock in trade of the tax- does not include stock in trade of payer or other property of a kind the taxpayer or other property of which would properly be included a kind which would properly be in the inventory of the taxpayer if included in the inventory of the on hand at the close of the taxable taxpayer if on hand at the close of year, or property held by the tax- the taxable year, or property held payer primarily for sale to cus- by the taxpayer primarily for sale tomers in the ordinary course of to customers in the ordinary his trade or business, or property, course of his trade or business, or used in the trade or business, of a property, used in the trade or busicharacter which is subject to the ness, of a character which is suballowance for depreciation provided ject to the allowance for depreciain section 23 (1); tion provided in section 23 (1); Taxable Years Beginning before 1939 Sec. 117. Capital gains and losses. Sec. 117. (a) Definitions. Sec. 117. (a) (1) Capital assets. See p. 198, Eighth Edition. Taxable Years Taxable Years Taxable Years Sec. 117. (a) (2) Short-term Sec. 117. (a) (2) Short-term Sec. 117. (a) (2) Short-term capital gain. The term "short- capital gain.-The term "short-capital gain. The term "shortterm capital gain" means gain term capital gain" means gain term capital gain" means gain from the sale or exchange of a cap- from the sale or exchange of a cap- from the sale or exchange of a capital asset held for not more than ital asset held for not more than ital asset held for not more than 6 months, if and to the extent such 18-6 months, if and to the extent 18 months, if and to the extent gain is taken into account in com- such gain is taken into account in such gain is taken into account in puting net income; computing net income; computing net income; Sec. 117. (a) (3) Short-term Sec. 117. (a) (3) Short-term Sec. 117. (a) (3) Short-term capital loss.-The term "short-capital loss.-The term "short-capital loss.-The term "shortterm capital loss" means loss from term capital loss" means loss from the sale or exchange of a capital the sale or exchange of a capital asset held for not more than 18 asset held for not more than 18 6 months, if and to the extent such months, if and to the extent such loss is taken into account in com-loss is taken into account in computing net income; puting net income; term capital loss" means loss from the sale or exchange of a capital asset held for not more than 6 months, if and to the extent such loss is taken into account in computing net income; Sec. 117. (a) (4) Long-term capital gain. The term "long-term capital gain" means gain from the sale or exchange of a capital asset held for more than 6 months, if and to the extent such gain is taken into account in computing net income; Sec. 117. (a) (4) Long-term cap- Sec. 117. (a) (4) Long-term capital gain. The term "long-term ital gain. The term "long-term capital gain" means gain from the capital gain" means gain from the sale or exchange of a capital asset sale or exchange of a capital asset held for more than 186 months, if held for more than 18 months, if and to the extent such gain is and to the extent such gain is taken into account in computing taken into account in computing net income; net income; Sec. 117. (a) (5) Long-term cap Sec. 117. (a) (5) Long-term capterm "long-term ital loss.-The term "long-term capital loss" means loss from the capital loss" means loss from the sale or exchange of a capital asset sale or exchange of a capital asset held for more than 18 6 months, if held for more than 18 months, if and to the extent such loss is and to the extent such loss is taken into account in computing taken into account in computing Sec. 117. (a) (5) Long-term capital loss. The term "long-term ital loss.-The capital loss" means loss from the sale or exchange of a capital asset held for more than 6 months, if and to the extent such loss is taken into account in computing net income; Sec. 117 (a), I. R. C., supra, amended by Sec. 151 and by Sec. 150 (a) (1), R. A. of Sec. 1942, to read as above. 101 of said Act makes amendtaxable ments applicable to years beginning after Dec. 31, 1941. For Sec. 117 (a), I. R. C., before amendment, see 1942 column. net income; Sec. 117 (a) (1), I. R. C., supra, amended by Sec. 151, R. A. of 1942, by adding language in italics. Sec. 117 (a) (2), (3), (4) by Sec. 150 (a) (1), R. A. of For prior amendment net income; Sec. 117 (a) (1), I. R. C., supra, 115 amended by Sec. (b), R. A. of 1941, by adding language in italics. Sec. 115 (c) of said Act makes amendment applicable to taxable years ending after Feb. 28, 1941. Sec. 117. (a) (6) Net short-term Sec. 117. (a) (6) Net short-term Sec. 117. (a) (6) Net short-term capital gain- The term "net short-capital gain. The term "net short-capital gain. The term "net shortterm capital gain" means the ex-term capital gain" means the ex-term capital gain" means the excess of short-term capital gains for cess of short-term capital gains for cess of short-term capital gains for the taxable year over the short- the taxable year over the sum of the taxable year over the sum of term capital losses for such year; (A) short term capital losses for (A) short-term capital losses for the taxable year, plus (B) the net the taxable year, plus (B) the net short term capital loss of the preeeding taxable year (if beginning after December 31, 1037), to the extent brought forward to the tex able year under subsection (e) short-term capital losses for such year; Sec. 117 (a) (6), I. R. C., supra, amended by Sec. 150 (a) (2), R. A. of 1942, to read as above. Sec. 101 of said Act makes amendment applicable to taxable years beginning after Dec. 31, 1941. For Sec. 117 (a) (6), I. R. C., before amendment, see 1942 column. Sec. 117 (a) (6), I. R. C., supra, amended by Sec. 150 (a) (2), R. A. of 1942, by omitting language in short-term capital loss of the preceding taxable year (if beginning after December 31, 1937), to the extent brought forward to the taxable year under subsection (e); Sec. 117. (a) (2) Short-term Taxable Years Sec. 117. (a) (2) Short-term cap Sec. 117. (a) (2) Short-term capital gain. The term "short- capital gain. The term "short- ital gain. term capital gain" means gain from the sale or exchange of a capital asset held for not more than 18 months, if and to the extent such gain is taken into account in computing net income; term capital gain" means gain See p. 198, Eighth Edition. Sec. 117. (a) (3) Short-term See p. 198, Eighth Edition. Sec. 117. (a) (3) Short-term Sec. 117. (a) (3) Short-term capital loss.-The term "short- capital loss.-The term "short-capital loss. term capital loss" means loss from term capital loss" means loss from the sale or exchange of a capital the sale or exchange of a capital asset held for not more than 18 months, if and to the extent such loss is taken into account in computing net income; Sec. 117. (a) (4) Long-term capital gain. The term "long-term capital gain" means gain from the sale or exchange of a capital asset held for more than 18 months, if and to the extent such gain is taken into account in computing net income; asset held for not more than 18 Sec. 117. (a) (4) Long-term cap- Sec. 117. (a) (4) Long-term capital gain. See p. 200, Eighth Edition. Sec. 117. (a) (5) Long-term. See p. 200, Eighth Edition. Sec. 117. (a) (5) Long-term cap- Sec. 117. (a) (5) Long-term capital loss.-The term "long-term ital loss.-The term "long-term capital loss. capital loss" means loss from the capital loss" means loss from the sale or exchange of a capital asset sale or exchange of a capital asset held for more than 18 months, if held for more than 18 months, if and to the extent such loss is and to the extent such loss is taken into account in computing taken into account in computing net income; net income; See 1941 column for amendment of Sec. 117 (a) (1), I. R. C., supra, applicable to taxable years ending after Feb. 28, 1941. Sec. 117. (a) (6) Net short-term Sec. 117. (a) (6) Net short-term capital gain. The term "net short- capital gain.-The term "net shortterm capital gain" means the ex- term capital gain" means the excess of short-term capital gains for cess of short-term capital gains the taxable year over the sum of for the taxable year over the sum (A) short-term capital losses for of (A) short-term capital losses the taxable year, plus (B) the net for the taxable year, plus (B) the short-term capital loss of the pre- net short-term capital loss of the ceding taxable year (if beginning preceding taxable year (if beginafter December 31, 1937), to the extent brought forward to the taxable year under subsection (e); ning after December 31, 1937), to Sec. 117. (a) (6) Net short-term capital gain. See p. 200, Eighth Edition. Taxable Years Sec. 117. (a) (7) Net short-term capital loss. The term "net shortterm capital loss" means the excess of short-term capital losses for the taxable year over the shortterm capital gains for such year; Sec. 117. (a) (7) Net short-term Sec. 117. (a) (7) Net short-term capital loss.-The term "net short- capital loss.-The term "net shortterm capital loss" means the ex- term capital loss" means the excess of short-term capital losses cess of short-term capital losses for the taxable year over the short- for the taxable year over the shortterm capital gains for such year; term capital gains for such year; Sec. 117. (a) (8) Net long-term Sec. 117. (a) (8) Net long-term Sec. 117. (a) (8) Net long-term capital gain. The term "net long-capital gain. The term "net long-capital gain. The term "net longterm capital gain" means the ex- term capital gain" means the excess of long-term capital gains for cess of long-term capital gains for the taxable year over the long-term the taxable year over the long-term capital losses for such year; capital losses for such year; term capital gain" means the excess of long-term capital gains for the taxable year over the long-term capital losses for such year; Sec. 117. (a) (9) Net long-term Sec. 117. (a) (9) Net long-term Sec. 117. (a) (9) Net long-term capital loss.-The term "net long-capital loss.-The term "net long-capital loss.-The term "net longterm capital loss" means the ex- term capital loss" means the ex- term capital loss" means the excess of long-term capital losses for cess of long-term capital losses for cess of long-term capital losses for the taxable year over the long-term the taxable year over the long-term the taxable year over the long-term capital gains for such year. capital gains for such year. capital gains for such year. Sec. 117. (a) (10) Net capital ⚫gain. Sec. 117. (a) (10) Net capital gain. (A) Corporations. In the case (A) Corporations. In the case of a corporation, the term "net of a corporation, the term "net capicapital gain" means the excess of tal gain" means the excess of the the gains from sales or exchanges gains from sales or exchanges of of capital assets over the losses capital assets over the losses from from such sales or exchanges; and such sales or exchanges; and (B) Other Taxpayers.-In the (B) Other Taxpayers.-In the case of a taxpayer other than a case of a taxpayer other than a corporation, the term "net capital corporation, the term "net capital gain" means the excess of (i) the gain" means the excess of (i) the sum of the gains from sales or ex- sum of the gains from sales or exchanges of capital assets, plus net changes of capital assets, plus net income of the taxpayer or $1,000, income of the taxpayer or $1,000, whichever is smaller, over (ii) the whichever is smaller, over (ii) the losses from such sales or exchanges. losses from such sales or exchanges. For purposes of this subparagraph, For purposes of this subparagraph, net income shall be computed with- net income shall be computed without regard to gains or losses from out regard to gains or losses from sales or exchanges of capital assets. sales or exchanges of capital assets. Sec. 117. (a) (11) Net capital Sec. 117. (a) (11) Net capital loss. The term "net capital loss" loss.-The term "net capital loss" means the excess of the losses from means the excess of the losses from sales or exchanges of capital assets sales or exchanges of capital assets over the sum allowed under subsec- over the sum allowed under subsection (d). For the purpose of de- tion (d). For the purpose of determining losses under this para- termining losses under this paragraph, amounts which are short- graph, amounts which are shortterm capital losses under subsection term capital losses under subsection (e) (1) shall be excluded. (e) (1) shall be excluded. Taxable Years Taxable Years Taxable Years Sec. 117. (a) (7) Net short-term capital loss. The term "net shortterm capital loss" means the excess of short-term capital losses for the taxable year over the shortterm capital gains for such year; Sec. 117. (a) (7) Net short-term capital loss.-The term "net shortterm capital loss" means the excess of short-term capital losses for the taxable year over the shortterm capital gains for such year; Sec. 117. (a) (8) Net long-term Sec. 117. (a) (8) Net long-term capital gain. The term "net long-capital gain.-The term "net longterm capital gain" means the ex- term capital gain" means the excess of long-term capital gains for cess of long-term capital gains for the taxable year over the long-term the taxable year over the long-term capital losses for such year; capital losses for such year; Sec. 117. (a) (9) Net long-term Sec. 117. (a) (9) Net long-term capital loss.-The term "net long-capital loss.-The term "net longterm capital loss" means the ex- term capital loss" means the excess of long-term capital losses for cess of long-term capital losses for the taxable year over the long-term the taxable year over the long-term capital gains for such year. capital gains for such year. Sec. 117. (a) (7) Net short-term capital loss. See p. 200, Eighth Edition. Sec. 117. (a) (8) Net long-term capital gain. See p. 200, Eighth Edition. Sec. 117. (a) (9) Net long-term capital loss. See p. 200, Eighth Edition. |