Taxable Years Beginning in 1940

Sec. 713. (b) Base period.—

Sec. 713. (b) (1) Definition.-As used in this section the term "base period"

(A) If the corporation was in existence during the whole of the forty-eight months preceding the beginning of its first taxable year under this subchapter, means the period commencing with the beginning of its first taxable year beginning after December 31, 1935, and ending with the close of its last taxable year beginning before January 1, 1940; and

(B) In the case of a corporation which was in existence during only part of the forty-eight months preceding the beginning of its first taxable year under this subchapter, means the forty-eight months preceding the beginning of its first taxable year under this subchapter.

Sec. 713. (b) (2) Division into halves. For the purposes of subsections (d) and (f) the base period of the taxpayer shall be divided into halves, the first half to be composed of one-half the entire number of months in the base period and to begin with the beginning of the base period.

See note following Sec. 713 (f), I. R. C., infra.

Sec. 713. (c) Deficit in excess profits net income. For the purposes of this section the term "deficit in excess profits net income" with respect to any taxable year means the amount by which the deductions plus the credit for dividends received exceeded the gross income. For the purposes of this subsection in determining whether there was such an excess and in determining the amount thereof, the adjustments provided in section 711 (b) (1) shall be made.

See note following Sec. 713 (f), I. R. C., infra.

Sec. 713. (d) Average base period net income-Determination.

Sec. 713. (d) (1) Definition.For the purposes of this section the average base period net income of

Taxable Years Beginning in 1940

the taxpayer shall be the amount determined under subsection (e), subject to the exception that if the aggregate excess profits net income for the last half of its base period, reduced by the aggregate of the deficits in excess profits net income for such half, is greater than such aggregate so reduced for the first half, then the average base period net income shall be the amount determined under subsection (f), if greater than the amount determined under subsection (e).

Sec. 713. (d) (2) For the purposes of subsections (e) and (f), if the taxpayer was in existence during only part of the 48 months preceding the beginning of its first taxable year under this subchapter, its excess profits net income

(A) for each taxable year of twelve months (beginning with the beginning of its base period) during which it was not in existence, shall be an amount equal to 8 per centum of the excess of—

(i) the daily invested capital for the first day of the taxpayer's first taxable year beginning after December 31, 1939, over

(ii) an amount equal to the same percentage of such daily invested capital as is applicable under section 720 in reduction of the average invested capital of the preceding taxable year;

(B) for the taxable year of less than twelve months consisting of that part of the remainder of its base period during which it was not in existence, shall be the amount ascertained for a full year under subparagraph (A), multiplied by the number of days in such taxable year of less than twelve months and divided by the number of days in the twelve months ending with the close of such taxable year.

Taxable Years Beginning in 1943

Taxable Years Beginning in 1942

Taxable Years Beginning in 1941

Sec. 713. (e) (1) By computing the aggregate of the excess profits net income for each of the taxable years of the taxpayer in the base period, reduced, by the sum of the deficits in excess profits net income for each of such years. If the excess profits net income (or deficit in excess profits net income) for one taxable year in the base period divided by the number of months in such taxable year is less than 75 per centum of the aggregate of the excess profits net income (reduced by deficits in excess profits net income) for the other taxable years in the taxpayer's base period divided by the number of months in such other taxable years (herein called "average monthly amount") the amount used for such one year under this paragraph shall be 75 per centum of the average monthly amount multiplied by the number of months in such one year, and the year increased under this sentence shall be the year the increase in which will produce the highest average base period net income;

Sec. 713. (e) (2) By dividing the amount ascertained under paragraph (1) by the total number of months in all such taxable years; and

Sec. 713. (e) (3) By multiplying the amount ascertained under paragraph (2) by twelve.

See note following Sec. 713 (f), I. R. C., infra.

Sec. 713. (e) (1) By computing the aggregate of the excess profits net income for each of the taxable years of the taxpayer in the base period, reduced, if for more than one of such taxable years there was a deficit in excess profits net in come, by the sum of such deficits, excluding the greatest by the sum of the deficits in excess profits net income for each of such years. If the excess profits net income (or deficit in excess profits net income) for one taxable year in the base period divided by the number of months in such taxable year is less than 75 per centum of the aggregate of the excess profits net income (reduced by deficits in excess profits net income) for the other taxable years in the taxpayer's base period divided by the number of months in such other taxable years (herein called "average monthly amount") the amount used for such one year under this paragraph shall be 75 per centum of the average monthly amount multiplied by the number of months in such one year, and the year increased under this sentence shall be the year the increase in which will produce the highest average base period net income;

follows:

Sec. 713. (e) (1) By computing the aggregate of the excess profits net income for each of the tarable years of the taxpayer in the base period, reduced, if for more than one of such taxable years there was a deficit in excess profits net income, by the sum of such deficits, excluding the greatest;

Sec. 713. (f) Average base pe

and

Sec. 713. (e) (3) By multiplying the amount ascertained under paragraph (2) by twelve.

See note following Sec. 713 (f), I. R. C., infra.

Sec. 713. (f) (1) By computing, for each of the taxable years of the taxpayer in its base period, the excess profits net income for such year, or the deficit in excess profits net income for such year;

Sec. 713. (f) (1) By computing, for each of the taxable years of the taxpayer in its base period, the excess profits net income for such year, or the deficit in excess profits net income for such year;

Sec. 713. (f) (1) By computing, for each of the taxable years of the taxpayer in its base period, the excess profits net income for such year, or the deficit in excess profits net income for such year;

Sec. 713. (e) (3) By multiplying the amount ascertained under paragraph (2) by twelve.

See note following Sec. 713 (f), I. R. C., infra.

Sec. 713. (f) Average base period net income-Increased earnings in last half of base period.— The average base period net income determined under this subsection shall be determined as follows:

Sec. 713. (f) (1) By computing, for each of the taxable years of the taxpayer in its base period, the excess profits net income for such year, or the deficit in excess profits net income for such year;