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Taxable Years
Beginning in 1940

(A) That the rent or other compensation received was the highest obtainable, or, if none was received, that none was obtainable; (B) That the property was held in the course of a business carried on bona fide for profit; and

Taxable Years
Beginning in 1939

(A) That the rent or other compensation received was the highest obtainable, or, if none was received, that none was obtainable;

(B) That the property was held in the course of a business carried on bona fide for profit; and

(C) Either that there was rea- (C) Either that there was reasonable expectation that the opera-sonable expectation that the operation of the property would result tion of the property would result in a profit, or that the property in a profit, or that the property was necessary to the conduct of was necessary to the conduct of the business. the business.

Sec. 336. (b) (3) Net loss carry- Sec. 336. (b) (3) Net loss carryover disallowed.-The deduction over disallowed.-The deduction for net operating losses provided for net operating losses provided in section 23 (s) shall not be al- in section 23(s) shall not lowed. allowed.

Sec. 336 (b) (3), I. R. C., supra, added to I. R. C. by Sec. 211 (g), R. A. of 1939, approved June 29, 1939.

Sec. 336. (c) Capital losses.The net income shall be computed without regard to section 117 (d) and (e), and losses from sales or exchanges of capital assets shall be allowed only to the extent of $2,000 plus the gains from such sales or exchanges.

Sec. 336 (c), I. R. C., supra, added to I. R. C. by Sec. 212 (c), R. A. of 1939. Sec. 229 of said Act made amendment applicable to taxable years beginning after Dec. 31, 1939.

Sec. 336 (b) (3), I. R. C., supra, added to I. R. C. by Sec. 211 (g), R. A. of 1939, approved June 29, 1939.

be

Taxable Years
Beginning before 1939

Sec. 337. Corporation income Sec. 337. Corporation income Sec. 337. Corporation income taxed to United States share-taxed to United States share-taxed holders.

holders.

Sec. 337. (a) General rule.-The Sec. 337. (a) General rule.-The undistributed Supplement P net undistributed Supplement P net income of a foreign personal hold- income of a foreign personal holding company shall be included in ing company shall be included in the gross income of the citizens or the gross income of the citizens or residents of the United States, do- residents of the United States, domestic corporations, domestic part-mestic corporations, domestic partnerships, and estates or trusts nerships, and estates or trusts

holders.

to United States share

Sec. 337. (a) General rule.

See p. 414, Eighth Edition.

Taxable Years
Beginning in 1943

Taxable Years
Beginning in 1942

Taxable Years
Beginning in 1941

(other than estates or trusts the (other than estates or trusts the (other than estates or trusts the gross income of which under this gross income of which under this gross income of which under this chapter includes only income from chapter includes only income from chapter includes only income from sources within the United States), sources within the United States), sources within the United States), who are shareholders in such for- who are shareholders in such for- who are shareholders in such foreign personal holding company eign personal holding company eign personal holding company (hereinafter called "United States (hereinafter called "United States (hereinafter called "United States shareholders") in the manner and shareholders") in the manner and shareholders") in the manner and to the extent set forth in this Sup- to the extent set forth in this Sup-to the extent set forth in this Supplement. plement. plement.

Sec. 337. (b) Amount included Sec. 337. (b) Amount included Sec. 337. (b) Amount included in gross income. Each United in gross income.-Each United in gross income. Each United States shareholder, who was a States shareholder, who was a States shareholder, who was a shareholder on the day in the tax-shareholder on the day in the tax-shareholder on the day in the taxable year of the company which able year of the company which able year of the company which was the last day on which a United was the last day on which a United was the last day on which a United States group (as defined in section States group (as defined in section States group (as defined in section 331 (a) (2)) existed with respect 331 (a) (2)) existed with respect 331 (a) (2)) existed with respect to the company, shall include in his to the company, shall include in his to the company, shall include in his gross income, as a dividend, for the gross income, as a dividend, for the gross income, as a dividend, for the taxable year in which or with which taxable year in which or with which | taxable year in which or with which the taxable year of the company the taxable year of the company the taxable year of the company ends, the amount he would have re- ends, the amount he would have re-ends, the amount he would have received as a dividend if on such last ceived as a dividend if on such last ceived as a dividend if on such last day there had been distributed by day there had been distributed by day there had been distributed by the company, and received by the the company, and received by the the company, and received by the shareholders, an amount which shareholders, an amount which shareholders, an amount which bears the same ratio to the undis- bears the same ratio to the undis-bears the same ratio to the undistributed Supplement P net income tributed Supplement P net income tributed Supplement P net income of the company for the taxable of the company for the taxable year of the company for the taxable year year as the portion of such taxable as the portion of such taxable year as the portion of such taxable year year up to and including such last up to and including such last day up to and including such last day day bears to the entire taxable bears to the entire taxable year. bears to the entire taxable year.

year.

Sec. 337. (c) Credit for obliga- Sec. 337. (c) Credit for obliga- Sec. 337. (c) Credit for obligations of United States and its in- tions of United States and its in- tions of United States and its instrumentalities.-Each United strumentalities.-Each United strumentalities. - Each United States shareholder shall be allowed States shareholder shall be allowed States shareholder shall be allowed a credit against net income, for the a credit against net income, for the a credit against net income, for the purpose of the tax imposed by sec- purpose of the tax imposed by sec- purpose of the tax imposed by section 11, 13, 14, 201, 204, 207, or tion 11, 13, 14, 201, 204, 207, or tion 11, 13, 14, 201, 204, 207, or 362, of his proportionate share of 362, of his proportionate share of 362, of his proportionate share of the interest specified in section 25 the interest specified in section 25 the interest specified in section 25 (a) (1) or (2) which is included in (a) (1) or (2) which is included in (a) (1) or (2) which is included in the gross income of the company the gross income of the company the gross income of the company otherwise than by the application otherwise than by the application otherwise than by the application of the provisions of section 334 of the provisions of section 334 of the provisions of section 331 (b) (relating to the inclusion in (b) (relating to the inclusion in (b) (relating to the inclusion in the gross income of a foreign per- the gross income of a foreign per- the gross income of a foreign personal holding company of its dis-sonal holding company of its dis-sonal holding company of its distributive share of the undistrib-tributive share of the undistrib-tributive share of the undistributed Supplement P net income of uted Supplement P net income of uted Supplement P net income of another foreign personal holding another foreign personal holding another foreign personal holding company in which it is a share- company in which it is a share- company in which it is a shareholder). If the foreign personal holder). If the foreign personal holder). holding company elects under sec- holding company elects under section 125 to treat the premium on tion 125 to treat the premium on bonds, the interest on which is al- bonds, the interest on which is allowable as a credit under section lowable as a credit under section 25 (a) (1) or (2), as amortizable, 25 (a) (1) or (2), as amortizable, for the purposes of the preceding for the purposes of the preceding sentence each United States share- sentence each United States shareholder's proportionate share of such holder's proportionate share of such

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(other than estates or trusts the (other than estates or trusts the
gross income of which under this gross income of which under this
chapter includes only income from chapter includes only income from
sources within the United States), sources within the United States),
who are shareholders in such for- who are shareholders in such for-
eign personal holding company eign personal holding company
(hereinafter called "United States (hereinafter called "United States
shareholders") in the manner and shareholders') in the manner. and
to the extent set forth in this Sup-to the extent set forth in this Sup-
plement.
plement.

Taxable Years
Beginning before 1939

Sec. 337, (b) Amount included

See p. 415, Eighth Edition.

Sec. 337. (b) Amount included Sec. 337. (b) Amount included in gross income.-Each United in gross income.-Each United in gross income. States shareholder, who was a States shareholder, who was a shareholder on the day in the tax- shareholder on the day in the taxable year of the company which able year of the company which was the last day on which a United was the last day on which a United States group (as defined in section States group (as defined in section 331 (a) (2)) existed with respect 331 (a) (2)) existed with respect to the company, shall include in to the company, shall include in his gross income, as a dividend, for his gross income, as a dividend, for the taxable year in which or with the taxable year in which or with which the taxable year of the com- which the taxable year of the company ends, the amount he would pany ends, the amount he would have received as a dividend if on have received as a dividend if on such last day there had been dis- such last day there had been distributed by the company, and re-tributed by the company, and received by the shareholders, an ceived by the shareholders, an amount which bears the same ratio amount which bears the same ratio to the undistributed Supplement to the undistributed Supplement P net income of the company for P net income of the company for the taxable year as the portion of the taxable year as the portion of such taxable year up to and in- such taxable year up to and including such last day bears to the cluding such last day bears to the entire taxable year. entire taxable year.

See p. 415, Eighth Edition.

Sec. 337. (c) Credit for obliga- Sec. 337. (c) Credit for obliga- Sec. 337. (c) Credit for obligations of United States and its tions of United States and its tions of United States and its ininstrumentalities. Each United instrumentalities. - Each United strumentalities. States shareholder shall be allowed States shareholder shall be allowed a credit against net income, for the a credit against net income, for the purpose of the tax imposed by sec- purpose of the tax imposed by section 11, 13, 14, 201, 204, 207, or tion 11, 13, 14, 201, 204, 207, or 362, of his proportionate share of 362, of his proportionate share of the interest specified in section 25 the interest specified in section 25 (a) (1) or (2) which is included in (a) (1) or (2) which is included in the gross income of the company the gross income of the company otherwise than by the application otherwise than by the application of the provisions of section 334 of the provisions of section 334 (b) (relating to the inclusion in (b) (relating to the inclusion in the gross income of a foreign per- the gross income of a foreign personal holding company of its dis-sonal holding company of its distributive share of the undistrib- tributive share of the undistributed Supplement P net income of uted Supplement P net income of another foreign personal holding another foreign personal holding company in which it is a share- company in which it is a shareholder). holder).

Taxable Years
Beginning in 1943

interest received by the foreign personal holding company shall be his proportionate share of such interest (determined without regard to this sentence) reduced by so much of the deduction under section 23 (v) as is attributable to such share.

Sec. 337 (c), I. R. C., amended by Sec. 126 (c), 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. 337 (c), I. R. C., before amendment, see 1942 column.

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Sec. 337. (d) Information in re- Sec. 337. (d) Information in re- Sec. 337. (d) Information in return.-Every United States share- turn.-Every United States share- turn.-Every United States shareholder who is required under sub-holder who is required under sub- holder who is required under subsection (b) to include in his gross section (b) to include in his gross section (b) to include in his gross income any amount with respect income any amount with respect income any amount with respect to the undistributed Supplement to the undistributed Supplement to the undistributed Supplement P net income of a foreign personal P net income of a foreign personal P net income of a foreign personal holding company and who, on the holding company and who, on the holding company and who, on the last day on which a United States last day on which a United States last day on which a United States group existed with respect to the group existed with respect to the group existed with respect to the company, owned 5 per centum or company, owned 5 per centum or company, owned 5 per centum or more in value of the outstanding more in value of the outstanding more in value of the outstanding stock of such company, shall set stock of such company, shall set stock of such company, shall set forth in his return in complete de- forth in his return in complete de- forth in his return in complete detail the gross income, deductions tail the gross income, deductions tail the gross income, deductions and credits, net income, Supple- and credits, net income, Supple- and credits, net income, Supplement P net income, and undistrib- ment P net income, and undistrib- ment P net income, and undistributed Supplement P net income of uted Supplement P net income of uted Supplement P net income of such company. such company. such company.

Sec. 337. (e) Effect on capital Sec. 337. (e) Effect on capital Sec. 337. (e) Effect on capital account of foreign personal hold- account of foreign personal hold- account of foreign personal holding company.-An amount which ing company.-An amount which ing company.-An amount which bears the same ratio to the undis- bears the same ratio to the undis- bears the same ratio to the undistributed Supplement P net income tributed Supplement P net income tributed Supplement P net income of the foreign personal holding of the foreign personal holding of the foreign personal holding company for its taxable year as company for its taxable year as company for its taxable year as the portion of such taxable year up the portion of such taxable year up the portion of such taxable year up to and including the last day on to and including the last day on to and including the last day on which a United States group ex- which a United States group ex- which a United States group existed with respect to the company isted with respect to the company isted with respect to the company bears to the entire taxable year, bears to the entire taxable year, bears to the entire taxable year, shall, for the purpose of determin- shall, for the purpose of determin- shall, for the purpose of determining the effect of distributions in ing the effect of distributions in ing the effect of distributions in subsequent taxable years by the subsequent taxable years by the subsequent taxable years by the corporation, be considered as paid- corporation, be considered as paid- corporation, be considered as paidin surplus or as a contribution to in surplus or as a contribution to in surplus or as a contribution to capital and the accumulated earn- capital and the accumulated earn- capital and the accumulated earnings and profits as of the close of ings and profits as of the close of ings and profits as of the close of the taxable year shall be corre- the taxable year shall be corre- the taxable year shall be correspondingly reduced, if such amount spondingly reduced, if such amount spondingly reduced, if such amount or any portion thereof is required or any portion thereof is required or any portion thereof is required to be included as a dividend, di- to be included as a dividend, di- to be included as a dividend, directly or indirectly, in the gross in- rectly or indirectly, in the gross in- rectly or indirectly, in the gross income of United States shareholders. come of United States shareholders. come of United States shareholders.

Taxable Years
Beginning in 1940

Taxable Years
Beginning in 1939

Taxable Years
Beginning before 1939

Sec. 337. (d) Information in re- Sec. 337. (d) Information in return. Every United States share- turn.-Every United States shareholder who is required under sub- holder who is required under subsection (b) to include in his gross section (b) to include in his gross income any amount with respect income any amount with respect to the undistributed Supplement to the undistributed Supplement P net income of a foreign personal P net income of a foreign personal holding company and who, on the holding company and who, on the last day on which a United States last day on which a United States group existed with respect to the group existed with respect to the company, owned 5 per centum or company, owned 5 per centum or more in value of the outstanding more in value of the outstanding stock of such company, shall set stock of such company, shall set forth in his return in complete forth in his return in complete detail the gross income, deductions detail the gross income, deductions and credits, net income, Supple- and credits, net income, Supplement P net income, and undistrib- ment P net income, and undistributed Supplement P net income of uted Supplement P net income of such company. such company.

Sec. 337. (d) Information in return.

See p. 415, Eighth Edition.

See p. 416, Eighth Edition.

Sec. 337. (e) Effect on capital Sec. 337. (e) Effect on capital Sec. 337. (e) Effect on capital account of foreign personal hold-account of foreign personal hold- account of foreign personal holding company. An amount which ing company.-An amount which ing company. bears the same ratio to the undis- bears the same ratio to the undistributed Supplement P net income tributed Supplement P net income of the foreign personal holding of the foreign personal holding company for its taxable year as company for its taxable year as the portion of such taxable year the portion of such taxable year up to and including the last day up to and including the last day on which a United States group on which a United States group existed with respect to the com- existed with respect to the company bears to the entire taxable pany bears to the entire taxable year, shall, for the purpose of de- year, shall, for the purpose of determining the effect of distribu- termining the effect of distributions in subsequent taxable years tions in subsequent taxable years by the corporation, be considered by the corporation, be considered as paid-in surplus or as a contri- as paid-in surplus or as a contribution to capital and the accumu-bution to capital and the accumulated earnings and profits as of the lated earnings and profits as of the close of the taxable year shall be close of the taxable year shall be correspondingly reduced, if such correspondingly reduced, if such amount or any portion thereof is amount or any portion thereof is required to be included as a divi- required to be included as a dividend, directly or indirectly, in the dend, directly or indirectly, in the gross income of United States gross income of United States shareholders. shareholders.

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