Taxable Years Beginning in 1940 Taxable Years Beginning in 1939 Taxable Years Beginning before 1939 Sec. 362. (b) Imposition of tax. -There shall be levied, collected, and paid for each taxable year upon the Supplement Q net income of every mutual investment company a tax equal to 18 10 2210 per centum of the amount thereof. Sec. 362 (b), I. R. C., supra, amended by Sec. 209, R. A. of 1939, by substituting "18" for "162." Sec. 229 of said Act made amendment applicable to taxable years beginning after Dec. 31, 1939. Sec. 362 (b), I. R. C., supra, again amended by Sec. 3 (d), R. A. of 1940, by substituting "19" for "18." Sec. 9 of said Act made amendment applicable to taxable years beginning after Dec. 31, 1939. Sec. 362 (b), I. R. C., again amended by Sec. 101 (c), Second R. A. of 1940, by substituting "22 1/10" for "19." Sec. 101 (e) of said Act makes amendment applicable to taxable years beginning after Dec. 31, 1939. Retroactivity See Sec. 170 (c), R. A. of 1942, in fn. 21, for retroactive provisions relating to earnings and profits of corporations filing returns as mutual investment companies for taxable years beginning after Dec. 31, 1935, and before June 1, 1942. P. 612. Sec. 363. (a) Supplement Q sur- Sec. 363. (a) Supplement Q sur- Sec. 363. (a) Supplement Q surtax net income. For the purposes tax net income. For the purposes tax net income. For the purposes of this chapter the term "Supple- of this chapter the term "Supple- of this chapter the term "Supplement Q surtax net income" means ment Q surtax net income" means ment Q surtax net income" means the net income, computed without the net income, computed without the net income, computed without the net operating loss deduction the net operating loss deduction the net operating loss deduction provided in section 23 (s), minus provided in section 23 (s), minus provided in section 23 (s), minus the dividends paid during the tax- the dividends paid during the tax- the dividends paid during the taxable year increased by the consent able year increased by the consent able year increased by the consent dividends credit provided in sec- dividends credit provided in sec-dividends credit provided in section 28. For the purposes of this tion 28. For the purposes of this tion 28. For the purposes of this subsection the amount of dividends subsection the amount of dividends subsection the amount of dividends paid shall be computed in the same paid shall be computed in the same paid shall be computed in the same manner as provided in subsections manner as provided in subsections manner as provided in subsections (d), (e), (f), (g), (h), and (i) of (d), (e), (f), (g), (h), and (i) of (d), (e), (f), (g), (h), and (i) of section 27 for the purpose of the section 27 for the purpose of the section 27 for the purpose of the basic surtax credit provided in sec- basic surtax credit provided in sec- basic surtax credit provided in section 27. tion 27. Sec. 363. (b) Imposition of tax. -There shall be levied, collected, and paid for each taxable year upon the Supplement Q surtax net income of every mutual investment company a surtax as follows: Upon Supplement Q surtax net incomes not in excess of $25,000, 6 per centum of the amount thereof; Upon Supplement Q surtax net incomes in excess of $25,000, $1,500, plus 7 per centum of the excess over $25,000. Sec. 363, I. R. C., supra, added to I. R. C. by Sec. 104 (b), R. A. of 1941. Sec. 118 of said Act makes amendment applicable to taxable years beginning after Dec. 31, 1940. tion 27. Sec. 363. (b) Imposition of tax. -There shall be levied, collected, and paid for each taxable year upon the Supplement Q surtax net income of every mutual investment company a surtax as follows: Upon Supplement Q surtax net incomes not in excess of $25,000, 6 per centum of the amount thereof; Upon Supplement Q surtax net incomes in excess of $25,000, $1,500, plus 7 per centum of the excess over $25,000. Supplement R-Exchanges and Sec. 371. Nonrecognition of gain or loss. Sec. 363, I. R. C., supra, added to I. R. C. by Sec. 104 (b), R. A. of 1941. Sec. 118 of said Act makes amendment applicable to taxable years beginning after Dec. 31, 1940. Supplement R-Exchanges and Sec. 371. Nonrecognition of gain Sec. 363, I. R. C., supra, added to I. R. C. by Sec. 104 (b), R. A. of 1941. Sec. 118 of said Act makes amendment applicable to taxable years beginning after Dec. 31, 1940. Supplement R-Exchanges and Sec. 371. (a) Exchanges of stock Sec. 371. (a) Exchanges of stock Sec. 371. (a) Exchanges of stock or securities only. No gain or loss or securities only. No gain or loss or securities only. No gain or loss shall be recognized to the trans- shall be recognized to the trans- shall be recognized to the transferor if stock or securities in a cor- feror if stock or securities in a cor- feror if stock or securities in a corporation which is a registered hold-poration which is a registered hold-poration which is a registered holding company or a majority-owned ing company or a majority-owned ing company or a majority-owned subsidiary company are transferred subsidiary company are transferred | subsidiary company are transferred to such corporation or to an asso- to such corporation or to an asso- to such corporation or to an associate company thereof which is a ciate company thereof which is a ciate company thereof which is a registered holding company or a registered holding company or a registered holding company or a majority-owned subsidiary com- majority-owned subsidiary com- majority-owned subsidiary company solely in exchange for stock pany solely in exchange for stock pany solely in exchange for stock or securities (other than stock or or securities (other than stock or or securities (other than stock or securities which are nonexempt securities which are nonexempt securities which are nonexempt property), and the exchange is property), and the exchange is property), and the exchange is are Sec. 371. (a) Exchanges of stock Sec. 371. (a) Exchanges of stock or securities only. No gain or loss or securities only. No gain or loss shall be recognized to the trans- shall be recognized to the transferor if stock or securities in a feror if stock or securities in a corporation which is a registered corporation which is a registered holding company or a majority- holding company or a majorityowned subsidiary company are owned subsidiary company transferred to such corporation or transferred to such corporation or to an associate company thereof to an associate company thereof which is a registered holding com- which is a registered holding company or a majority-owned subsidi-pany or a majority-owned subsidiary company solely in exchange for ary company solely in exchange for stock or securities (other than stock or securities (other than stock or securities which are non- stock or securities which are nonexempt property), and the ex-exempt property), and the Supplement R-Exchanges and Sec. 371. Nonrecognition of gain or loss. Taxable Years Taxable Years Taxable Years Beginning in 1941 made by the transferee corporation made by the transferee corporation made by the transferee corporation in obedience to an order of the Se- in obedience to an order of the Se- in obedience to an order of the Securities and Exchange Commission. curities and Exchange Commission. curities and Exchange Commission. Sec. 371. (b) Exchanges and Sec. 371. (b) Exchanges and Sec. 371. (b) Exchanges of propsales of property by corporations. sales of property by corporations. erty for property by corporations. -No gain shall be recognized to a-No gain shall be recognized to a -No gain or loss shall be recog transferor corporation which is a transferor corporation which is a nized to a transferor corporation registered holding company or an registered holding company or an which is a registered holding comassociate company of a registered associate company of a registered pany or an associate company of holding company, if such corpora- holding company, if such corpora- a registered holding company, if tion, in obedience to an order of the tion, in obedience to an order of the such corporation, in obedience to Securities and Exchange Commis- Securities and Exchange Commis- an order of the securities and sion transfers property in exchange sion transfers property in exchange Exchange Commission transfers for property, and such order recites for property, and such order recites property solely in exchange for that such exchange by the trans- that such exchange by the trans- property (other than nonexempt feror corporation is necessary or feror corporation is necessary or property), and such order recites appropriate to the integration or appropriate to the integration or that such exchange by the transsimplification of the holding com- simplification of the holding com- feror corporation is necessary or pany system of which the transferor pany system of which the transferor appropriate to the integration or corporation is a member. If any corporation is a member. If any simplification of the holding comsuch property so received is non- such property so received is non-pany system of which the transferor exempt property, gain shall be rec-exempt property, gain shall be rec- corporation is a member. ognized unless such nonexempt ognized unless such nonexempt property or an amount equal to the property or an amount equal to the fair market value of such property fair market value of such property at the time of the transfer is, at the time of the transfer is, within 24 months of the transfer, within 24 months of the transfer, under regulations prescribed by the under regulations prescribed by the Commissioner with the approval of Commissioner with the approval of the Secretary, and in accordance the Secretary, and in accordance with an order of the Securities and with an order of the Securities and Exchange Commission, expended Exchange Commission, expended for property other than nonexempt for property other than nonexempt property or is invested as a contri- property or is invested as a contribution to the capital, or as paid-in bution to the capital, or as paid-in surplus, of another corporation, and surplus, of another corporation, and such order recites that such expendi- such order recites that such expenditure or investment by the transferor ture or investment by the transferor corporation is necessary or appro- corporation is necessary or appropriate to the integration or simpli- priate to the integration or simplification of the holding company fication of the holding company system of which the transferor cor- system of which the transferor corporation is a member. If the fair poration is a member. If the fair market value of such nonexempt market value of such nonexempt property at the time of the transfer property at the time of the transfer exceeds the amount expended and exceeds the amount expended and the amount invested, as required in the amount invested, as required in the second sentence of this para- the second sentence of this paragraph, the gain, if any, to the ex- graph, the gain, if any, to the extent of such excess, shall be recog- tent of such excess, shall be recognized. Any gain, to the extent that nized. Any gain, to the extent that it cannot be applied in reduction of it cannot be applied in reduction of basis under section 372 (a) (2) basis under section 372 (a) (2) shall be recognized. For the pur- shall be recognized. For the purposes of this subsection, a distribu- poses of this subsection, a distribution in cancellation or redemption tion in cancellation or redemption (except a distribution having the (except a distribution having the effect of a dividend) of the whole effect of a dividend) of the whole or a part of the transferor's own or a part of the transferor's own stock (not acquired on the transfer) stock (not acquired on the transfer) and a payment in complete or par- and a payment in complete or partial retirement or cancellation of tial retirement or cancellation of securities representing indebtedness securities representing indebtedness change is made by the transferee change is made by the transferee Sec. 371. (b) Exchanges of prop- Taxable Years Beginning before 1939 Sec. 371. (b) Exchanges of property for property by corporations. See p. 421, Eighth Edition. |