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allocable to maintenance or inter-allocable to maintenance or interest charges.

est charges.

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Taxable Years

Beginning before 1939

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to the extent that the amount so to the extent that the amount so
stated is paid by the purchaser stated is paid by the purchaser
(otherwise than in connection with (otherwise than in connection with
the purchaser's trade or business) the purchaser's trade or business)
to such person such amount shall be to such person such amount shall be
allowed as a deduction in computing allowed as a deduction in computing
the net income of such purchaser as the net income of such purchaser as
if such amount constituted a tax if such amount constituted a tax
imposed upon and paid by such imposed upon and paid by such
purchaser.
purchaser.

Sec. R. 23 (c) (3), I. C., supra, added to I. R. C. by Sec. 122, R. A. of 1942. Sec. 101 of said Act makes amendment applicable to taxable years beginning after Dec. 31, 1941.

Sec. 23. (d) Taxes of share

Sec. 23 (c) (3), I. R. C., supra, added to I. R. C. by Sec. 122, R. A. of 1942. Sec. 101 of said Act makes amendment applicable to taxable years beginning after Dec. 31, 1941.

Sec. 23. (d) Taxes of share

Taxable Years
Beginning in 1941

as

Sec. 23. (d) Taxes of shareholder paid by corporation.-The holder paid by corporation. The holder paid by corporation.—The deduction for taxes allowed by sub- deduction for taxes allowed by sub- deduction for taxes allowed by subsection (c) shall be allowed to a section (c) shall be allowed to a section (c) shall be allowed to a corporation in the case of taxes im- corporation in the case of taxes im- corporation in the case of taxes imposed upon a shareholder of the posed upon a shareholder of the posed upon a shareholder of the corporation upon his interest as corporation upon his interest as corporation upon his interest shareholder which are paid by the shareholder which are paid by the shareholder which are paid by the corporation without reimbursement corporation without reimbursement corporation without reimbursement from the shareholder, but in such from the shareholder, but in such from the shareholder, but in such cases no deduction shall be allowed cases no deduction shall be allowed cases no deduction shall be allowed the shareholder for the amount of the shareholder for the amount of the shareholder for the amount of such taxes.

Sec. 23. (e) Losses by individuals. In the case of an individual losses sustained during the taxable year and not compensated for by insurance or otherwise

Sec. 23. (e) (1) if incurred in trade or business; or

Sec. 23. (e) (2) if incurred in any transaction entered into for profit, though not connected with the trade or business; or

Sec. 23. (e) (3) of property not connected with the trade or business, if the loss arises from fires, storms, shipwreck, or other casualty, or from theft. No loss shall be allowed as a deduction under this paragraph if at the time of the filing of the return such loss has been claimed as a deduction for estate tax purposes in the estate tax return.

such taxes.

such taxes.

Sec. 23. (e) Losses by individ- Sec. 23. (e) Losses by individuals. In the case of an individual, uals. In the case of an individual, losses sustained during the taxable losses sustained during the taxable year and not compensated for by year and not compensated for by insurance or otherwiseinsurance or otherwise

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Sec. 23. (f) Losses by corporaSec. 23. (f) Losses by corpora- Sec. 23. (f) Losses by corporations. In the case of a corpora- tions.-In the case of a corpora- tions.-In the case of a corporation, losses sustained during the tion, losses sustained during the tion, losses sustained during the taxable year and not compensated taxable year and not compensated taxable year and not compensated for by insurance or otherwise. for by insurance or otherwise. for by insurance or otherwise.

Taxable Years
Beginning in 1940

Taxable Years
Beginning in 1939

Taxable Years
Beginning before 1939

Sec. 23. (d) Taxes of share

See p. 38, Eighth Edition.

Sec. 23. (d) Taxes of share- Sec. 23. (d) Taxes of shareholder paid by corporation. The holder paid by corporation. The holder paid by corporation. deduction for taxes allowed by sub- deduction for taxes allowed by subsection (c) shall be allowed to a section (c) shall be allowed to a corporation in the case of taxes im- corporation in the case of taxes imposed upon a shareholder of the posed upon a shareholder of the corcorporation upon his interest as poration upon his interest as shareshareholder which are paid by the holder which are paid by the corcorporation without reimbursement poration without reimbursement from the shareholder, but in such from the shareholder, but in such cases no deduction shall be allowed cases no deduction shall be allowed the shareholder for the amount of the shareholder for the amount of such taxes. such taxes.

Sec. 23. (e) Losses by individ- Sec. 23. (e) Losses by individuals. In the case of an individual, uals. In the case of an individual, losses sustained during the taxable losses sustained during the taxable year and not compensated for by year and not compensated for by insurance or otherwiseinsurance or otherwise

Sec. 23. (e) (1) if incurred in trade or business; or

Sec. 23. (e) (1) if incurred in trade or business; or

Sec. 23. (e) (2) if incurred in

Sec. 23. (e) (2) if incurred in
any transaction entered into for any transaction entered into for
profit, though not connected with
the trade or business; or

profit, though not connected with
the trade or business; or

Sec. 23. (e) (3) of property Sec. 23. (e) (3) of property not not connected with the trade or busi- connected with the trade or business, if the loss arises from fires, ness, if the loss arises from fires, storms, shipwreck, or other casu- storms, shipwreck, or other casualty, or from theft. No loss shall alty, or from theft. No loss shall be allowed as a deduction under be allowed as a deduction under this paragraph if at the time of the filing of the return such loss has been claimed as a deduction for estate tax purposes in the estate tax

return.

this paragraph if at the time of the
filing of the return such loss has
been claimed as a deduction for es-
tate tax purposes in the estate tax

return.

Sec. 23. (e) Losses by individuals.

See p. 38, Eighth Edition.

Sec. 23. (f) Losses by corpora

Sec. 23. (f) Losses by corpora- Sec. 23. (f) Losses by corporations. In the case of a corpora- tions. In the case of a corpora- tions. tion, losses sustained during the tion, losses sustained during the taxable year and not compensated taxable year and not compensated for by insurance or otherwise. for by insurance or otherwise.

See p. 40, Eighth Edition.

Taxable Years Beginning in 1943

Sec. 23. (g) Capital losses.

Sec. 23. (g) (1) Limitation.Losses from sales or exchanges of capital assets shall be allowed only to the extent provided in section

117.

Sec. 23. (g) (2) Securities becoming worthless.—If any securities (as defined in paragraph (3) of this subsection) become worthless during the taxable year and are capital assets, the loss resulting therefrom shall, for the purposes of this chapter, be considered as a loss from the sale or

exchange, on the last day of such taxable year, of capital assets.

Sec. 23. (g) (3) Definition of securities. As used in paragraph (2) of this subsection the term "securities" means (A) shares of stock in a corporation, and (B) rights to subscribe for or to receive such shares.

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Sec. 23. (g) (2) Securities be- Sec. 23. (g) (2) Securities becoming worthless.-If any securi- coming worthless.—If any securities (as defined in paragraph (3) ties (as defined in paragraph (3) of this subsection) become worth of this subsection) become worthless during the taxable year and less during the taxable year and are capital assets, the loss result- are capital assets, the loss resulting therefrom shall, for the pur- ing therefrom shall, for the purposes of this chapter, be consid- poses of this chapter, be considered as a loss from the sale or ered as a loss from the sale exchange, on the last day of such exchange, on the last day of such taxable year, of capital assets. taxable year, of capital assets.

or

Sec. 23. (g) (3) Definition of se- Sec. 23. (g) (3) Definition of securities. As used in paragraph curities.-As used in this subsec(2) of this subsection the term tion the term "securities" means "securities" means (A) shares of (A) shares of stock in a corporastock in a corporation, and (B) tion, and (B) rights to subscribe rights to subscribe for or to receive for or to receive such shares. such shares.

Sec. 23. (g) (4) Stock in af- Sec. 23. (g) (4) Stock in affiliated corporation.-For the pur-filiated corporation.-For the purposes of paragraph (2) stock in a corporation affiliated with the taxpayer shall not be deemed a capital asset. For the purposes of this paragraph a corporation shall be deemed to be affiliated with the taxpayer only if:

(A) at least 95 per centum of each class of its stock is owned directly by the taxpayer; and

(B) more than 90 per centum of the aggregate of its gross incomes for all taxable years has been from sources other than royalties, rents, dividends, interest, annuities, or gains from sales or exchanges of

stocks and securities; and

(C) the taxpayer is a domestic corporation.

Sec. 23 (g) (3), I. R. C., amended by Sec. 123 (a) (2), R. A. of 1942, to read as above. Apparently Congress intended to insert "paragraph (2) of" before word "this" instead of before word "section" as Sec. 123 (a) provides.

Sec. 23 (g) (4), I. R. C., supra, added to I. R. C. by Sec. 123 (a) (1), R. A. of 1942.

Sec. 101 of R. A. of 1942 makes amendments applicable to taxable years beginning after Dec. 31, 1941.

For Sec. 23 (g) (3) and (4) before amendments, see 1942 column.

poses of paragraph (2) stock in a corporation affiliated with the taxpayer shall not be deemed a capital asset. For the purposes of this paragraph a corporation shall be deemed to be affiliated with the taxpayer only if:

(A) at least 95 per centum of each class of its stock is owned directly by the taxpayer; and

(B) more than 90 per centum of the aggregate of its gross incomes for all taxable years has been from dividends, interest, annuities, sources other than royalties, rents, gains from sales or exchanges of

stocks and securities; and

or

(C) the taxpayer is a domestic corporation.

Sec. 23 (g) (3), I. R. C., amended by Sec. 123 (a) (2), R. A. of 1942, by adding language in italics. Apparently Congress intended to insert "paragraph (2) of" before word "this" instead of before word "section" as Sec. 123 (a) provides.

Sec. 23 (g) (4), I. R. C., supra, added to I. R. C. by Sec. 123 (a) (1), R. A. of 1942.

Sec. 101 of R. A. of 1942 makes amendments applicable to taxable years beginning after Dec. 31, 1941.

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Sec. 23. (g) (3) Definition of

See p. 40, Eighth Edition.

Sec. 23. (g) (3) Definition of se- Sec. 23. (g) (3) Definition of se-
curities. As used in this subsec- curities.-As used in this subsec- securities.
tion the term "securities" means tion the term "securities" means
(A) shares of stock in a corpora-
tion, and (B) rights to subscribe
for or to receive such shares.

(A) shares of stock in a corpora-
tion, and (B) rights to subscribe
for or to receive such shares.

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