Taxable Years Taxable Years Taxable Years Sec. 122. (d) (2) There shall be Sec. 122. (d) (2) There shall be Sec. 122. (d) (2) There shall be included in computing gross income included in computing gross income included in computing gross income the amount of interest received the amount of interest received the amount of interest received which is wholly exempt from the which is wholly exempt from the Sec. 122. (d) (3) No net operating loss deduction shall be allowed; Sec. 122. (d) (4) Gains and losses from sales or exchanges of capital assets shall be taken into account without regard to the provisions of section 117 (b). As so computed the amount deductible on account of such losses shall not exceed the amount includible on account of such gains; Sec. 122 (d) (4), I. R. C., supra, amended by Sec. 150 (e), R. A. of 1942, to read as above. Sec. 101 of said Act makes amendment applicable to taxable years beginning after Dec. 31, 1941. (4), I. R. For Sec. 122 (d) C., before amendment, 1942 column. see Sec. 122. (d) (3) No net operating loss deduction shall be allowed; Long-term which is wholly exempt from the certain tax Sec. 122. (d) (3) No net operating loss deduction shall be allowed; Sec. 122. (d) (4) Long term Sec. 122. (d) (4) Long-term capital gains and long term capital capital gains and long-term capital Gains and losses from sales or ex- losses shall be taken into account changes of capital assets shall be without regard to the provisions of taken into account without regard section 117 (b). As so computed to the provisions of section 117 (b). the amount deductible on account As so computed the amount de- of long-term capital losses shall not ductible on account of long-term exceed the amount includible on accapital such losses shall not exceed count of the long-term capital the amount includible on account of gains, and the amount deductible the long term capital such gains, on account of short-term capital and the amount deductible on ae losses shall not exceed the amount count of short term capital losses includible on account of the shortshall not exceed the amount in term capital gains; eludible on account of the short term capital gains; Sec. 122 (d) (4), I. R. C., supra, amended by Sec. 150 (e), R. A. of 1942, by omitting language in stricken through type and adding language in italics. Sec. 101 of said Act makes amendment applicable to taxable years beginning after Dec. 31, 1941. Sec. 122. (d) (5) Deductions Sec. 122. (d) (5) Deductions Sec. 122. (d) (5) Deductions otherwise allowed by law not attrib- otherwise allowed by law not attrib- otherwise allowed by law not attributable to the operation of a trade utable to the operation of a trade utable to the operation of a trade or business regularly carried on by or business regularly carried on by or business regularly carried on by the taxpayer shall (in the case of a the taxpayer shall (in the case of a the taxpayer shall (in the case of a taxpayer other than a corporation) taxpayer other than a corporation) taxpayer other than a corporation). be allowed only to the extent of the be allowed only to the extent of the be allowed only to the extent of the amount of the gross income not de- amount of the gross income not de- amount of the gross income not derived from such trade or business. rived from such trade or business. rived from such trade or business. For the purposes of this paragraph For the purposes of this paragraph For the purposes of this paragraph deductions and gross income shall deductions and gross income shall deductions and gross income shall be computed with the exceptions, be computed with the exceptions, be computed with the exceptions. additions, and limitations specified additions, and limitations specified and limitations specified in parain paragraphs (1) to (4) of this in paragraphs (1) to (4) of this graphs (1) to (4) of this subsec subsection. Sec. 122 (d) (5), I. R. C., supra, amended by Sec. 105 (e) (3) (C), R. A. of 1942, by adding word "additions" shown in italics. Sec. 101 of said Act makes amendment applicable to taxable years beginning after Dec. 31, 1941. tion. Sec. 122. (d) (2) There shall be Sec. 122. (d) (2) There shall be included in computing gross income included in computing gross income the amount of interest received the amount of interest received which is wholly exempt from the which is wholly exempt from the taxes imposed by this chapter, de- taxes imposed by this chapter, decreased by the amount of interest creased by the amount of interest paid or accrued which is not al- paid or accrued which is not allowed lowed as a deduction by section 23 as a deduction by section 23 (b), (b), relating to interest on indebted-relating to interest on indebtedness ness incurred or continued to pur- incurred or continued to purchase chase or carry certain tax-exempt or carry certain tax-exempt obligaobligations; Sec. 122. (d) (3) No net operating loss deduction shall be allowed; tions; Sec. 122. (d) (3) No net operating loss deduction shall be allowed; Sec. 122. (d) (4) Long-term Sec. 122. (d) (4) Long-term capital gains and long-term capital capital gains and long-term capital losses shall be taken into account losses shall be taken into account without regard to the provisions of without regard to the provisions of section 117 (b). As so computed section 117 (b). As so computed the amount deductible on account the amount deductible on account of of long-term capital losses shall not long-term capital losses shall not exceed the amount includible on ac- exceed the amount includible on account of the long-term capital count of the long-term capital gains, gains, and the amount deductible and the amount deductible on acon account of short-term capital count of short-term capital losses losses shall not exceed the amount shall not exceed the amount includincludible on account of the short- ible on account of the short-term term capital gains; capital gains; Taxable Years Beginning before 1939 Sec. 122. (d) (5) Deductions Sec. 122. (d) (5) Deductions otherwise allowed by law not attrib- otherwise allowed by law not attributable to the operation of a trade utable to the operation of a trade or business regularly carried on by or business regularly carried on by the taxpayer shall (in the case of a the taxpayer shall (in the case of a taxpayer other than a corporation) taxpayer other than a corporation) be allowed only to the extent of the be allowed only to the extent of the amount of the gross income not de- amount of the gross income not derived from such trade or business. rived from such trade or business. For the purposes of this paragraph For the purposes of this paragraph deductions and gross income shall deductions and gross income shall be computed with the exceptions be computed with the exceptions and limitations specified in para- and limitations specified in paragraphs (1) to (4) of this subsec- graphs (1) to (4) of this subsection. tion. Taxable Years Beginning in 1943 Sec. 122. (d) (6) There shall be allowed as a deduction the amount of tax imposed by Subchapter E of Chapter 2 paid or accrued within the taxable year, subject to the following rules (A) No reduction in such tax shall be made by reason of the credit for income, war-profits, or excess-profits taxes paid to any foreign country or possession of the United States; (B) Such tax shall be computed without regard to the adjustments provided in section 734; and Taxable Years Beginning in 1942 Sec. 122. (d) (6) There shall be allowed as a deduction the amount of tax imposed by Subchapter E of Chapter 2 paid or accrued within the taxable year, subject to the following rules (A) No reduction in such tax shall be made by reason of the credit for income, war-profits, or excess-profits taxes paid to any foreign country or possession of the United States; (B) Such tax shall be computed without regard to the adjustments provided in section 734; and (C) Such tax, in the case of a return for excess (C) Such tax, in the case of a consolidated return for excess-consolidated profits tax purposes, shall be al- profits tax purposes, shall be allocated to the members of the located to the members of the affiliated group under regulations affiliated group under regulations prescribed by the Commissioner, prescribed by the Commissioner, with the approval of the Secretary. with the approval of the Secretary. Sec. 122. (e) No carry-back to Sec. 122. (e) No carry-back to year prior to 1941.-As used in year prior to 1941.-As used in this section, the term "preceding this section, the term "preceding taxable year" and the term "pre-taxable year" and the term "pre ceding taxable years" do not include ceding taxable years" do not include any taxable year beginning prior any taxable year beginning prior to January 1, 1941. to January 1, 1941. Sec. 122 (e), I. R. C., supra, amended to read as above by Sec. 153 (c), R. A. of 1942. Sec. 153 (e) of said Act makes amendment applicable to taxable years beginning after Dec. 31, 1940. See 1940 column for Sec. 122 (e), I. R. C., before amendment. Sec. 123. Commodity credit loans. Sec. 122 (e), I. R. C., supra, amended to read as above by Sec. 153 (c), R. A. of 1942. Sec. 153 (e) of said Act makes amendment applicable to taxable years beginning after Dec. 31, 1940. See 1940 column 122 (e), I. R. C., amendment. for Sec. before Sec. 123. Commodity credit loans. Taxable Years Beginning in 1941 Sec. 122. (e) No carry-back to year prior to 1941.-As used in this section, the term "preceding taxable year" and the term "preceding taxable years” do not include any taxable year beginning prior to January 1, 1941. Sec. 122 (e), I. R. C., supra, amended to read as above by Sec. 153 (c), R. A. of 1942. Sec. 153 (e) of said Act makes amendment applicable to taxable years beginning after Dec. 31, 1940. See 1940 column for Sec. 122 (e), I. R. C., before amendment. Sec. 123. (a) Amounts received Sec. 123. (a) Amounts received Sec. 123. (a) Amounts received as loans from the Commodity as loans from the Commodity as loans from the Commodity Credit Corporation shall, at the Credit Corporation shall, at the Credit Corporation shall, at the election of the taxpayer, be con- election of the taxpayer, be con- election of the taxpayer, be considered as income and shall be in-sidered as income and shall be in-sidered as income and shall be in 19 Sec. 223 (d) and (e), R. A. of 1939, in referring to Sec. 223 (a) of said Act, which adds Sec. 123, I. R. C., read as follows: Sec. 223. (d) Retroactive application.-The provisions of subsection (a) shall be retroactively applied in computing income for any taxable year subject to the provisions of the Revenue Act of 1934, the Revenue Act of 1936, or the Revenue Act of 1938, or any of such Acts as amended, if— (1) The taxpayer elects in writing (in accordance with regulations prescribed by the Commissioner with the approval of the Secretary) within one year from the date of the enactment of this Aet at or prior to the time prescribed for the filing of the taxpayer's return for the taxable year of the taxpayer beginning in 1942, or if there is more than one taxable year of the taxpayer beginning in 1942, for the last taxable year so begin ning, to treat such loans as income for such year, and (2) The records of the taxpayer are sufficient to per mit an accurate computation of income for such year, and (3) The taxpayer consents in writing to the assess ment, within such period as may be agreed upon, of any Sec. 123. (a) Amounts received Sec. 123. (a) Amounts received as loans from the Commodity as loans from the Commodity Credit Credit Corporation shall, at the Corporation shall, at the election election of the taxpayer, be con- of the taxpayer, be considered as sidered as income and shall be in-income and shall be included in deficiency for such year, even though the statutory period for the assessment of any such deficiency had expired prior to the filing of such consent. Any tax overpaid for any such year shall be credited or refunded, subject to the statutory period of limitation properly applicable thereto. Sec. 223. (e) Adjustment of basis for prior years.— In computing income for any taxable year subject to the provisions of the Revenue Act of 1934, the Revenue Act of 1936, or the Revenue Act of 1938, or any of such Acts as amended, the basis, for determining gain or loss See Commodity credit Retroactivity Sec. 223 (d) and (e), R. A. of 1939, in fn. 19, for retroactive application of Sec. 123, I. R. C., added to I. R. C. by Sec. 223 (a), R. A. of 1939. from the sale or other disposition of any property, pledged to the Commodity Credit Corporation as security on a loan obtained therefrom, shall be adjusted for the amount of such loan to the extent it was considered as income and included in gross income for the year in which received, and for the amount of any deficiency on such loan with respect to which the taxpayer was relieved from liability. Sec. 223 A. (d), R. was of 1939, amended by Sec. 154 (b), R. A. of 1942, by omitting language in stricken through type and adding language in italics. Taxable Years Beginning in 1943 Taxable Years Taxable Years cluded in gross income for the tax- cluded in gross income for the tax- cluded in gross income for the taxable year in which received. able year in which received. able year in which received. Sec. 123. (b) If a taxpayer exer- Sec. 123. (b) If a taxpayer exer- Sec. 123. (b) If a taxpayer exercises the election provided for in cises the election provided for in cises the election provided for in subsection (a) for any taxable year subsection (a) for any taxable year subsection (a) for any taxable year beginning after December 31, 1938, beginning after December 31, 1938, beginning after December 31, 1938, then the method of computing in- then the method of computing in- then the method of computing income so adopted shall be adhered come so adopted shall be adhered come so adopted shall be adhered to with respect to all subsequent to with respect to all subsequent to with respect to all subsequent taxable years unless with the ap- taxable years unless with the ap- taxable years unless with the approval of the Commissioner a proval of the Commissioner a proval of the Commissioner a change to a different method is au- change to a different method is au- change to a different method is thorized. thorized. authorized. Sec. 123. (c) The election proSec. 123. (c) The election provided for in subsection (a) with vided for in subsection (a) with respect to taxable years beginning respect to taxable years beginning after December 31, 1938, and before after December 31, 1938, and before January 1, 1942, may be exercised January 1, 1942, may be exercised by the taxpayer at, or at any time by the taxpayer at, or at any time prior to the time prescribed for the prior to the time prescribed for the filing of the taxpayer's return for filing of the taxpayer's return for the taxable year of the taxpayer the taxable year of the taxpayer beginning in 1942, or if there is beginning in 1942, or if there is more than one taxable year of the more than one taxable year of the taxpayer beginning in 1942, for the taxpayer beginning in 1942, for the last taxable year so beginning, pro-last taxable year so beginning, provided the records of the taxpayer vided the records of the taxpayer are sufficient to permit an accurate are sufficient to permit an accurate computation of income for such computation of income for such years, and the taxpayer consents in years, and the taxpayer consents in writing to the assessment, within writing to the assessment, within such period as may be agreed upon, such period as may be agreed upon, of any deficiency for such years, of any deficiency for such years, even though the statutory period for the assessment of any such deficiency had expired prior to the filing of such consent. Sec. 123 (c), I. R. C., supra, added to I. R. C. by Sec. 154 (a), R. A. of 1942. Sec. 101 of said Act makes amendment applicable to taxable years beginning after Dec. 31, 1941. Sec. 124. Amortization deduction. even though the statutory period for Sec 123 (c), I R C, supra, Sec. 124. Amortization deduction. Sec. 123, I. R. C., supra, added to I. R. C. by Sec. 223 (a), R. A. of 1939. Sec. 223 (c) of said Act makes amendment applicable to taxable years beginning after Dec. 31, 1938. Sec. 123. (c) Retroactivity See Sec. 123 (c), I. R. C., in 1942 column, added by Sec. 154 (a), R. A. of 1942, and retroactive application thereof to prior taxable years in respect of election referred to in Sec. 123 (a), supra. Sec. 124. Amortization deduction. Sec. 124. (a) General rule.Every person eorporation, at its his election, shall be entitled to a deduction with respect to the amortization of the adjusted basis (for determining gain) of any emergency facility (as defined in subsection (e) ), based on a period of sixty months. Such amortization deduction shall be an amount, with Sec. 124. (a) General rule.- Sec. 124. (a) General rule.Every person, at his election, shall Every person eorporation, at its be entitled to a deduction with re- his election, shall be entitled to a spect to the amortization of the ad- deduction with respect to the justed basis (for determining gain) amortization of the adjusted basis of any emergency facility (as de- (for determining gain) of any fined in subsection (e)), based on a emergency facility (as defined in period of sixty months. Such subsection (e)), based on a period amortization deduction shall be an of sixty months. Such amortization amount, with respect to each month deduction shall be an amount, with of such period within the taxable respect to each month of such respect to each month of such |