Taxable Years pany Act of 1935, 49 Stat. 804 (U. S. C., Supp. III, Title 15, § 79 (b), (c)). jority-owned pany" of a company a means Taxable Years pany Act of 1935, 49 Stat. 804 Sec. 373. (c) The term "ma- com Sec. 373. (c) The term "masubsidiary com-jority-owned registered holding pany" of a registered holding means a corporation, corporation, company stock of which, representing in the stock of which, representing in the aggregate more than 50 per centum aggregate more than 50 per centum of the total combined voting power of the total combined voting power of all classes of stock of such cor- of all classes of stock of such corporation entitled to vote (not in- poration entitled to vote (not including stock which is entitled to cluding stock which is entitled to vote only upon default or nonpay-vote only upon default or nonpayment of dividends or other special ment of dividends or other special circumstances) is owned wholly by circumstances) is owned wholly by such registered holding company, such registered holding company, or partly by such registered hold- or partly by such registered holding company and partly by one or ing company and partly by one or more majority-owned subsidiary more majority-owned subsidiary companies thereof, or by one or companies thereof, or by one or majority-owned subsidiary more majority-owned subsidiary companies of such registered hold- companies of such registered holding company. ing company. more Sec. 373. (d) The term "system Sec. 373. (d) The term "system group" means one or more chains group" means one or more chains of corporations connected through stock ownership with a parent corporation if of corporations connected through stock ownership with a common parent corporation if— common Sec. 373. (d) (1) At least 90 per Sec. 373. (d) (1) At least 90 per centum of each class of the stock centum of each class of the stock (other than stock which is pre- (other than stock which is preferred as to both dividends and ferred as to both dividends and assets) of each of the corporations (except the common parent corporation) is owned directly by one or more of the other corporations; and assets) of each of the corporations and Sec. 373. (d) (2) The common Sec. 373. (d) (2) The common parent corporation owns directly parent corporation owns directly at least 90 per centum of each class at least 90 per centum of each class of the stock (other than stock of the stock (other than stock which is preferred as to both dividends and assets) of at least one of the other corporations; and Sec. 373. (d) (3) Each of the corporations is either a registered holding company or a majorityowned subsidiary company. Sec. 373. (e) The term "nonexempt property" means— which is preferred as to both divi- Sec. 373. (d) (3) Each of the Sec. 373. (e) The term "nonexempt property" means Sec. 373. (e) (1) Any considera- Sec. 373. (e) (1) Any consideration in the form of a cancellation tion in the form of a cancellation or assumption of debts or other li- or assumption of debts or other liabilities (including a continuance abilities (including a continuance of encumbrances subject to which of encumbrances subject to which the property was transferred); the property was transferred); Taxable Years Beginning before 1939 Taxable Years Taxable Years Taxable Years Sec. 373. (e) (2) Short-term ob- Sec. 373. (e) (2) Short-term ob- Sec. 373. (e) (2) Short-term obligations (including notes, drafts, ligations (including notes, drafts, ligations (including notes, drafts, bills of exchange, and bankers' ac- bills of exchange, and bankers' ac- bills of exchange, and bankers' acceptances) having a maturity at the ceptances) having a maturity at the ceptances) having a maturity at the time of issuance of not exceeding time of issuance of not exceeding time of issuance of not exceeding twenty-four months, exclusive of twenty-four months, exclusive of twenty-four months, exclusive of days of grace; days of grace; days of grace; Sec. 373. (e) (3) Securities is- Sec. 373. (e) (3) Securities is- Sec. 373. (e) (3) Securities issued or guaranteed as to principal sued or guaranteed as to principal sued or guaranteed as to principal or interest by a government or or interest by a government or or interest by a government or subdivision thereof (including subdivision thereof (including subdivision thereof (including those issued by a corporation which those issued by a corporation which is an instrumentality of a govern- is an instrumentality of a government or subdivision thereof); ment or subdivision thereof); those issued by a corporation which is an instrumentality of a government or subdivision thereof); Sec. 373. (e) (4) Stock or seSec. 373. (e) (4) Stock or se- Sec. 373. (e) (4) Stock or secucurities which were acquired from a curities which were acquired from a rities which were acquired after registered holding company or an registered holding company or an February 28, 1938, unless such associate company of a registered associate company of a registered stock or securities (other than obholding company which acquired holding company which acquired ligations described as nonexempt such stock or securities after Febru- such stock or securities after Febru- property in paragraph (2) or (3)) ary 28, 1938, unless such stock or ary 28, 1938, unless such stock or were acquired in obedience to an securities (other than obligations securities (other than obligations order of the Securities and Exdescribed as nonexempt property in described as nonexempt property in change Commission; paragraph (1), (2), or (3)) were paragraph (1), (2), or (3)) were acquired in obedience to an order acquired in obedience to an order of the Securities and Exchange of the Securities and Exchange Commission or were acquired with Commission or were acquired with the authorization or approval of the Securities and Exchange Commission under any section of the Public Utility Holding Company Act of 1935, 49 Stat. 820 (U. S. C., title 15, sec. 79k (b)); Sec. 373. (e) (5) Money, and the right to receive money not evidenced by a security other than an obligation described as nonexempt property in paragraph (2) or (3). or means the authorization or approval of the Sec. 373. (e) (5) Money, and the right to receive money not evidenced by a security other than an obligation described as nonexempt property in paragraph (2) or (3). Sec. 373 (e) (1), I. R. C., supra, amended by Sec. 171 (e), R. A. of 1942, by adding language in italics. Sec. 373 (e) (4), I. R. C., supra, amended to read as above by Sec. 171 (f), R. A. of 1942. Sec. 101 of said Act makes both amendments applicable to taxable years beginning after Dec. 31, 1941. For Sec. 373 (e) (4), I. R. C., before amendment, see Sec. 373. (e) (5) Money, and the right to receive money not evidenced by a security other than an obligation described as nonexempt property in paragraph (2) or (3). Sec. 373. (f) The term "stock securities" means shares of stock in any corporation, certifi- stock in any corporation, certifi- stock in any corporation, certificates of stock or interest in any cates of stock or interest in any cates of stock or interest in any corporation, notes, bonds, deben- corporation, notes, bonds, deben- corporation, notes, bonds, debentures, and evidences of indebted- tures, and evidences of indebtedness (including any evidence of an interest in or right to subscribe to or purchase any of the foregoing). Sec. 373. (f) The term "stock Sec. 373. (f) The term "stock securities" shares of or means shares of or securities" ness (including any evidence of an tures, and evidences of indebtedness (including any evidence of an interest in or right to subscribe to or purchase any of the foregoing). Sec. 373. (e) (2) Short-term obligations (including notes, drafts, bills of exchange, and bankers' acceptances) having a maturity at the time of issuance of not exceeding twenty-four months, exclusive of days of grace; Sec. 373. (e) (3) Securities is Sec. 373. (e) (3) Securities issued or guaranteed as to principal sued or guaranteed as to principal or interest by a government or or interest by a government or subdivision thereof (including subdivision. thereof (including those issued by a corporation which is an instrumentality of a government or subdivision thereof); those issued by a corporation Sec. 373. (e) (4) Stock or secu- Sec. 373. (e) (4) Stock or securities which were acquired after rities which were acquired after February 28, 1938, unless such February 28, 1938, unless such stock or securities (other than obligations described as nonexempt property in paragraph (2) or (3)) were acquired in obedience to an order of the Securities and Exchange Commission; stock or securities (other than ob- Taxable Years Beginning before 1939 Sec. 373. (e) (5) Money, and the right to receive money not evidenced by a security other than an obligation described as nonexempt property in paragraph (2) or (3). Sec. 373. (e) (5) Money, and the right to receive money not evidenced by a security other than an obligation described as nonexempt property in paragraph (2) or (3). Sec. 373. (f) The term "stock Sec. 373. (f) The term "stock or securities" means shares of or securities' means shares of stock in any corporation, certifi- stock in any corporation, certificates of stock or interest in any cates of stock or interest in any corporation, notes, bonds, deben- corporation, notes, bonds, debentures, and evidences of indebted- tures, and evidences of indebtedness (including any evidence of an interest in or right to subscribe to or purchase any of the foregoing). ness (including any evidence of an Taxable Years Supplement S-Tax of Shareholders of Personal Service Corporations Sec. 391. Applicability of Supplement. If a personal service corporation (as defined in section 725) is exempt under such section for any taxable year from the excess profits tax imposed by such subchapter, the provisions of this Supplement shall be applicable with respect to each shareholder of such corporation who was a shareholder in such corporation on the last day of such taxable year of the corporation. See note following Sec. 396, I. R. C., infra. Sec. 392. Undistributed Supplement S net income. Taxable Years Supplement S-Tax of Share- Sec. 391. Applicability of Sup- Taxable Years Supplement S-Tax of Shareholders of Personal Service Corporations Sec. 391. Applicability of sup-. plement. If a personal service corporation If a personal service corporation (as defined in section 725) is ex- (as defined in section 725) is exempt under such section for any empt under such section for any taxable year from the excess profits taxable year from the excess profits tax imposed by such subchapter, tax imposed by such subchapter, the provisions of this Supplement the provisions of this Supplement shall be applicable with respect to shall be applicable with respect to each shareholder of such corpora- each shareholder of such corporation who was a shareholder in such tion who was a shareholder in such corporation on the last day of such corporation on the last day of such taxable year of the corporation. taxable year of the corporation. See note following Sec. 396, Sec. 392. Undistributed Supplement S net income. See note following Sec. 396, I. R. C., infra. Sec. 392. Undistributed Supplement S net income. For the purposes of this chapter, For the purposes of this chapter, For the purposes of this chapter, the term "undistributed Supple- the term "undistributed Supple- the term "undistributed Supplement S net income" means the Sup- ment S net income" means the Sup-ment S net income" means the Supplement S net income (as defined plement S net income (as defined plement S net income (as defined in section 393) minus the amount in section 393) minus the amount in section 393) minus the amount of the dividends paid during the of the dividends paid during the taxable year. For the purposes of this section the amount of dividends paid shall be computed in the same manner as provided in subsections (d), (e), (f), (g), (h), and (i) of section 27 for the purpose of the basic surtax credit provided in sec tion 27. See note following Sec. 396, I. R. C., infra. Sec. 393. Supplement S net in come. For the purposes of this chapter "Supplement S net income" means the net income, except that there shall be allowed as additional deductions taxable year. For the purposes of See note following Sec. 396, Sec. 393. Supplement S net in come. For the purposes of this chapter "Supplement S net income" means the net income, except that there shall be allowed as additional deductions Sec. 393. (a) The Federal in of the dividends paid during the taxable year. For the purposes of this section the amount of dividends paid shall be computed in the same manner as provided in subsections (d), (e), (f), (g), (h), and (i) of section 27 for the purpose of the basic surtax credit provided in sec tion 27. See note following Sec. 396, I. R. C., infra. Sec. 393. Supplement S net in come. For the purposes of this chapter "Supplement S net income" means the net income, except that there shall be allowed as additional deductions Sec. 393. (a) The Federal income tax payable under this chap-come tax payable under this chap-come tax payable under this chapter for the taxable year; and ter for the taxable year; and Sec. 393. (a) The Federal inter for the taxable year; and Sec. 393. (b) In lieu of the deduction allowed by section 23 (q), contributions or gifts, payment of which is made within the taxable year, to or for the use of donees described in section 23 (q) for the purposes therein specified, to an amount which does not exceed 15 Sec. 393. (b) In lieu of the de- Sec. 393. (b) In lieu of the deduction allowed by section 23 (q), duction allowed by section 23 (q), contributions or gifts, payment of contributions or gifts, payment of which is made within the taxable which is made within the taxable year, to or for the use of donees year, to or for the use of donees described in section 23 (q) for the described in section 23 (q) for the purposes therein specified, to an purposes therein specified, to an amount which does not exceed 15 amount which does not exceed 15 per centum of the corporation's net per centum of the corporation's net per centum of the corporation's net income, computed without the bene-income, computed without the bene-income, computed without the benefit of this subsection and section fit of this subsection and section fit of this subsection and section 23 (q). Sec. 391. Applicability of supplement. If a personal service corporation (as defined in section 725) is exempt under such section for any taxable year from the excess profits tax imposed by such subchapter, the provisions of this Supplement shall be applicable with respect to each shareholder of such corporation who was a shareholder in such corporation on the last day of such taxable year of the corporation. See note following Sec. 396, I. R. C., post. Sec. 392. Undistributed Supplement S net income. For the purposes of this chapter, the term "undistributed Supplement S net income" means the Supplement S net income (as defined in section 393) minus the amount of the dividends paid during the taxable year. For the purposes of this section the amount of dividends paid shall be computed in the same manner as provided in subsections (d), (e), (f), (g), (h), and (i) of section 27 for the purpose of the basic surtax credit provided in section 27. See note following Sec. 396, I. R. C., post. Sec. 393. Supplement S net in come. For the purposes of this chapter "Supplement S net income" means the net income, except that there shall be allowed as additional deductions Sec. 393. (a) The Federal income tax payable under this chapter for the taxable year; and Sec. 393. (b) In lieu of the deduction allowed by section 23 (q), contributions or gifts, payment of which is made within the taxable year, to or for the use of donees described in section 23 (q) for the purposes therein specified, to an amount which does not exceed 15 per centum of the corporation's net income, computed without the benefit of this subsection and section 23 (q). See note following Sec. 396, I. R. C., post. |