Sec. 710. (c) (2) Computation of excess profits credit carry-over.— The excess profits credit carry-over for any taxable year shall be the sum of the following: (A) The unused excess profits credit for the first preceding taxable year; and (B) The unused excess profits credit for the second preceding taxable year reduced by the amount, if any, by which the excess profits net income for the first preceding taxable year exceeds the sum of— (i) the excess profits credit for such first preceding taxable year, plus (ii) the unused excess profits credit for the third preceding taxable year. Sec. 710 (c), I. R. C., supra, added to Sec. 710, I. R. C., by Sec. 2 (b), Excess Profits Tax Amendments of 1941. Sec. 17 of said Act makes amendment effective as of Oct. 1940, the date of enactment of Excess Profits Tax Act of 1940. 8, Taxable Years Taxable Years Taxable Years case of the second succeeding tax-case of the second succeeding tax- case of the second succeeding taxable year shall be the excess, if any, able year shall be the excess, if any, able year shall be the excess, if any, of the amount of such unused ex- of the amount of such unused ex- of the amount of such unused excess profits credit over the adjusted cess profits credit over the adjusted cess profits credit over the adjusted excess profits net income for the excess profits net income for the excess profits net income for the intervening taxable year computed intervening taxable year computed intervening taxable year computed for such intervening taxable year for such intervening_taxable year for such intervening taxable year (i) by determining the unused ex-(i) by determining the unused ex- (i) by determining the unused excess profits credit adjustment with- cess profits credit adjustment with- cess profits credit adjustment without regard to such unused excess out regard to such unused excess out regard to such unused excess profits credit or to any unused ex-profits credit or to any unused ex-profits credit or to any unused excess profits credit carry-back, and cess profits credit carry-back, and cess profits credit carry-back, and (ii) without the deduction of the (ii) without the deduction of the (ii) without the deduction of the specific exemption provided in sub- specific exemption provided in sub-specific exemption provided in subsection (b) (1). For the purposes section (b) (1). For the purposes section (b) (1). For the purposes of the preceding sentence, the un- of the preceding sentence, the un- of the preceding sentence, the unused excess profits credit for any used excess profits credit for any used excess profits credit for any taxable year beginning after De- taxable year beginning after De- taxable year beginning after December 31, 1941, shall first be re-cember 31, 1941, shall first be re-cember 31, 1941, shall first be reduced by the sum of the adjusted duced by the sum of the adjusted duced by the sum of the adjusted excess profits net income for each excess profits net income for each excess profits net income for each of the two preceding taxable years of the two preceding taxable years of the two preceding taxable years (computed for each such pre- (computed for each such pre- (computed for each such preceding taxable year (i) by deter- ceding taxable year (i) by deter- ceding taxable year (i) by deter mining the unused excess profits mining the unused excess profits mining the unused excess profits credit adjustment without regard to credit adjustment without regard to credit adjustment without regard to such unused excess profits credit or such unused excess profits credit or such unused excess profits credit or to the unused excess profits credit to the unused excess profits credit to the unused excess profits credit for the succeeding taxable year, and for the succeeding taxable year, and for the succeeding taxable year, and (ii) without the deduction of the (ii) without the deduction of the (ii) without the deduction of the specific exemption provided in sub-specific exemption provided in sub-specific exemption provided in subsection (b) (1)). section (b) (1)). section (b) (1)). Sec. 710. (c) (4) No carry-back to year prior to 1941.-As used in this subsection, the term "preceding taxable year" and the term "preceding taxable years" do not include any taxable year beginning prior to January 1, 1941. Sec. 710 (c), I. R. C., amended by Sec. 204 (b), R. A. of 1942, to read as above. Sec. 204 (c) of said Act makes amendment applicable to taxable years beginning after Dec. 31, 1940. For Sec. 710, I. R. C., before amendment by Sec. 204 (b), R. A. of 1942, see 1940 column and also fn. 22 below, containing amendment thereof made by Sec. 202 (e), R. A. of 1941. Sec. 710 (c), I. R. C., amended by Sec. 204 (b), R. A. of 1942, to read as above. Sec. 204 (c) of said Act makes amendment applicable to taxable years beginning after Dec. 31, 1940. For Sec. 710, I. R. C., before amendment by Sec. 204 (b), R. A. of 1942, see 1940 column and also fn. 22, below, containing amendment thereof made by Sec. 202 (e), R. A. of 1941. 22 Sec. 202 (e), R. A. of 1941 (which Sec. 205 of said act makes applicable to taxable years beginning after Dec. 31, 1940) provides as follows: Sec. 202. (e) Excess-profits credit carry-over.-Section 710 (c) (1) (defining the unused excess-profits Sec. 710 (c), I. R. C., amended by Sec. 204 (b), R. A of 1942, to read as above. Sec. 204 (c) of said Act makes amendment applicable to taxable years beginning after Dec. 31, 1940. For Sec. 710, I. R. C., before amendment by Sec. 204 (b), R. A. of 1942, see 1940 column and also fn. 22 below, containing amendment thereof made by Sec. 202 (e), R. A. of 1941. credit) is amended by adding at the end thereof a new sentence to read as follows: "For such purpose the excess-profits credit and the excess-profits net income for any taxable year beginning in 1940 shall be computed under the law applicable to taxable years beginning in 1941.". Taxable Years Sec. 711. Excess profits net in come. Sec. 711. (a) Taxable years beginning after December 31, 1939. -The excess profits net income for any taxable year beginning after December 31, 1939, shall be the normal-tax net income, as defined in section 13 (a) (2), for such year except that the following adjustments shall be made: Sec. 711. (a) (1) Excess profits credit computed under income credit. If the excess profits credit is computed under section 713, the adjustments shall be as follows: Sec. 711. (a) Taxable years be- Sec. 711. (a) Taxable years beginning after December 31, 1939. ginning after December 31, 1939. -The excess profits net income for -The excess profits net income for any taxable year beginning after any taxable year beginning after December 31, 1939, shall be the December 31, 1939, shall be the normal-tax net income, as defined normal-tax net income, as defined in section 13 (a) (2), for such year in section 13 (a) (2), for such year except that the following adjust- except that the following adjustments shall be made: ments shall be made: Sec. 711. (a) (1) Excess profits credit computed under income credit. If the excess profits credit is computed under section 713, the adjustments shall be as follows: Sec. 711. (a) (1) Excess profits credit computed under income credit.-If the excess profits credit is computed under section 713, the adjustments shall be as follows: Sec. 711. (a) (1) (A) Income Sec. 711. (a) (1) (A) Income Sec. 711. (a) (1) (A) Income subject to excess profits tax. In subject to excess profits tax.-In taxes. The deduction for taxes computing such normal-tax net in-computing such normal-tax net in- shall be increased by an amount come the credit provided in section come the credit provided in section equal to the tax (not including the 26 (e) (relating to income subject 26 (e) (relating to income subject tax under section 102) under Chepto the tax imposed by this subchap- to the tax imposed by this subchapter 1 for such taxable year In comi ter) shall not be allowed; ter) shall not be allowed; Sec. 711. (a) (1) (B) Gains and losses from sales or exchanges of capital assets. There shall be excluded gains and losses from sales or exchanges of capital assets held for more than 6 months. Sec. 711 (a) (1) (A), I. R. C., supra, amended by Sec. 206 (a) (1), 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. 711 (a) (1) (A), I. R. C., before amendment, see 1941 column. Sec. 711 (a) (1) (B), I. R. C., supra, amended by Sec. 207 (a), 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. 711 (a) (1) (B), I. R. C., before amendment, see 1941 column. Sec. 711. (a) (1) (B) Gains and losses from sales or exchanges of capital assets.-There shall be excluded gains and losses from sales or exchanges of capital assets held for more than 6 months. Sec. 711 (a) (1) (A), I. R. C., supra, amended by Sec. 206 (a) (1), 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. 711 (a) (1) (A), I. R. C., before amendment, see 1941 column. Sec. 711 (a) (1) (B), I. R. C., supra, amended by Sec. 207 (a), 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. 711 (a) (1) (B), I. R. C., before amendment, see 1941 column. puting such normal tax net income the deduction for the tax imposed by this subchapter shall not be allowed; Sec. 711. (a) (1) (B) Long-term gains and losses.-There shall be excluded long-term capital gains and losses. There shall be excluded the excess of gains from the sale or exchange of property held for more than eighteen months which is of a character which is subject to the allowance for depreciation provided in section 23 (1) over the losses from the sale or exchange of such property. There shall be excluded the excess of the recognized gains from the sale, exchange, or involuntary conversion (as a result of destruction in whole or in part, theft or seizure, or an exercise of the power of requisition or condemnation or the threat or imminence thereof) of property held for more than eighteen months which is of a character which is subject to the allowance for depreciation provided in section 23 (1) over the recognized losses from the sale, exchange, or involuntary conversion of such property. For the purposes of this subparagraph, section 117 (h) (1) and (2) shall apply in determining the period for which the taxpayer has held property which is of a character which is subject to the allowance for depreciation provided in section 23 (1); Sec. 711 (a) (1) (A), I. R. C., supra, amended by Sec. 20% (c) (1) (A), R. A. of 1941, by Sec. 711. (a) (1) (B) Long-term gains and losses.-There shall be excluded long-term capital gains and losses. There shall be excluded the excess of gains from the sale or exchange of property hold for more than eighteen months which is of a character which is subject to the allowance for depreciation provided in section 23 (1) over the losses from the sale or exchange of such property. There shall be excluded the excess of the recognized gains from the sale, exchange, or involuntary conversion (as a result of destruction in whole or in part, theft or seizure, or an exercise of the power of requisition or condemnation or the threat or imminence thereof) of property held for more than eighteen months which is of a character which is subject to the allowance for depreciation provided in section 23 (1) over the recognized losses from the sale, exchange, or involuntary conversion of such property. For the purposes of this subparagraph, section 117 (h) (1) and (2) shall apply in determining the period for which the taxpayer has held property which is of a character which is subject |