Taxable Years Taxable Years Taxable Years section, shall be the amount shown section, shall be the amount shown section, shall be an amount equal in the following table: in the following table: If the invested The credit shall If the invested The credit shall Sec. 715. Definition of invested capital. capital for the be: Sec. 715. Definition of invested capital. to 8 per centum of the taxpayer's If the invested year, The credit shall be: Sec. 714, I. R. C., as shown in ordinary type before being stricken through and before addition of language in italics, added to I. R. C., by Sec. 201, Excess Profits Tax Act of 1940. Sec. 710 (a), L R. C., makes amendment applicable to taxable years beginning after Dec. 31, 1939. Sec. 714, I. R. C., supra, amended by Sec. 201 (b), R. A. of 1941, by omitting language in stricken through ordinary type and adding language in italics and bold faced columnar headings. Sec. 205 of said Act makes amendment applicable to taxable years beginning after Dec. 31, 1940. Sec. 715. Definition of invested capital. For the purposes of this sub- For the purposes of this sub- For the purposes of this subchapter the invested capital for any chapter the invested capital for any chapter the invested capital for any taxable year shall be the average taxable year shall be the average taxable year shall be the average invested capital for such year, de- invested capital for such year, de- invested capital for such year, determined under section 716, re-termined under section 716, reduced termined under section 716, reduced duced by an amount computed un- by an amount computed under sec- by an amount computed under seeder section 720 (relating to tion 720 (relating to inadmissible tion 720 (relating to inadmissible inadmissible assets). If the Com- assets). If the Commissioner finds assets). If the Commissioner finds missioner finds that in any case the that in any case the determination that in any case the determination determination of invested capital, of invested capital, on a basis other of invested capital, on a basis other on a basis other than a daily basis, than a daily basis, will produce an than a daily basis, will produce an will produce an invested capital invested capital differing by not invested capital differing by not differing by not more than $1,000 more than $1,000 from an invested more than $1,000 from an invested from an invested capital determined capital determined on a daily basis, capital determined on a daily basis, on a daily basis, he may, under he may, under regulations pre- he may, under regulations preregulations prescribed by him with scribed by him with the approval scribed by him with the approval the approval of the Secretary, pro- of the Secretary, provide for such of the Secretary, provide for such vide for such determination on such determination on such other basis. determination on such other basis. (For computation of (For computation of invested cap- (For computation of invested capinvested capital in case of foreign ital in case of foreign corporations ital in case of foreign corporations corporations and corporations en- and corporations entitled to the and corporations entitled to the titled to the benefits of section 251, benefits of section 251, see section benefits of section 251, see section see section 724.) 724.) 724.) See note following Sec. 717, I. R. C., infra. See note following Sec. 717, See note following Sec. 717, I. R. C., infra. Taxable Years Beginning in 1940 section, shall be an amount equal to 8 per centum of the taxpayer's invested capital for the taxable year, determined under section 715. See note following Sec. 717, I. R. C., infra. Taxable Years Beginning in 1939 Taxable Years Beginning before 1939 Sec. 715. Definition of invested capital. For the purposes of this subchapter the invested capital for any taxable year shall be the average invested capital for such year, determined under section 716, reduced by an amount computed under section 720 (relating to inadmissible assets). If the Commissioner finds that in any case the determination of invested capital, on a basis other than a daily basis, will produce an invested capital differing by not more than $1,000 from an invested capital determined on a daily basis, may, under regulations prescribed by him with the approval of the Secretary, provide for such determination on such other basis. (For computation of invested capital in case of foreign corporations and corporations entitled to the benefits of section 251, see section 724.) he See note following Sec. 717, I. R. C., infra. Taxable Years Sec. 716. Average invested capital. The average invested capital for any taxable year shall be the aggregate of the daily invested capital for each day of such taxable year, divided by the number of days in such taxable year. See note following Sec. 717, I. R. C., infra. Sec. 717. Daily invested capital. The daily invested capital for any day of the taxable year shall be the sum of the equity invested capital for such day plus the borrowed invested capital for such day determined under section 719. Secs. 715, 716 and 717, I. R. C., supra, added to I. R. C. by Sec. 201, Excess Profits Tax Act of 1940. Sec. 710 (a), I. R. C., makes amendments applicable to taxable years beginning after Dec. 31, 1939. Sec. 718. Equity invested capital. Sec. 716. Average invested cap- Sec. 716. Average invested capital. The average invested capital ital. The average invested capital for any taxable year shall be the for any taxable year shall be the aggregate of the daily invested aggregate of the daily invested capital for each day of such taxable capital for each day of such taxable year, divided by the number of days year, divided by the number of days in such taxable year. in such taxable year. See note following Sec. 717, Sec. 717. Daily invested capital. Secs. 715, 716 and 717, I. R. C., supra, added to I. R. C. by Sec. 201, Excess Profits Tax Act of 1940. Sec. 710 (a), I. R. C., makes amendments applicable to taxable years beginning after Dec. 31, 1939. Sec. 718. Equity invested capital. See note following Sec. 717, I. R. C., infra. Sec. 717. Daily invested capital. The daily invested capital for any day of the taxable year shall be the sum of the equity invested capital for such day plus the borrowed invested capital for such day determined under section 719. Secs. 715, 716 and 717, L. R. C., supra, added to I. R. C. by Sec. 201, Excess Profits Tax Act of 1940. Sec. 710 (a), I R. C., makes amendments applicable to taxable years beginning after Dec. 31, 1939. Sec. 718. Equity invested capital Sec. 718. (a) Definition.—The Sec. 718. (a) Definition.-The Sec. 718. (a) Definition.-The equity invested capital for any day equity invested capital for any day equity invested capital for any day of any taxable year shall be deter- of any taxable year shall be deter- of any taxable year shall be determined as of the beginning of such mined as of the beginning of such mined as of the beginning of such day and shall be the sum of the fol- day and shall be the sum of the fol- day and shall be the sum of the fol lowing amounts, reduced as pro-lowing amounts, reduced as pro-lowing amounts, reduced as provided in subsection (b)— vided in subsection (b)— vided in subsection (b)— Sec. 718. (a) (1) Money paid in. -Money previously paid in for stock, or as paid-in surplus, or as a contribution to capital; Sec. 718. (a) (1) Money paid in. Sec. 718. (a) (1) Money paid in. Money previously paid in for-Money previously paid in for stock, or as paid-in surplus, or as stock, or as paid-in surplus, or as a contribution to capital; a contribution to capital; Sec. 718. (a) (2) Property paid Sec. 718. (a) (2) Property paid Sec. 718. (a) (2) Property paid in.-Property (other than money) in.-Property (other than money) in.-Property (other than money) previously paid in (regardless of previously paid in (regardless of previously paid in (regardless of the time paid in) for stock, or as the time paid in) for stock, or as the time paid in) for stock, or as paid-in surplus, or as a contribu- paid-in surplus, or as a contribu- paid-in surplus, or as a contribution to capital. Such property shall tion to capital. Such property shall tion to capital. Such property shall be included in an amount equal to be included in an amount equal to be included in an amount equal to its basis (unadjusted) for deter- its basis (unadjusted) for deter- its basis (unadjusted) for determining loss upon sale or exchange. mining loss upon sale or exchange. mining loss upon sale or exchange. If the property was disposed of be- If the property was disposed of be- If the property was disposed of be fore such taxable year, such basis fore such taxable year, such basis fore such taxable year, such basis shall be determined under the law shall be determined in the same shall be determined in the same applicable to the year of disposi- manner as if the property were still manner as if the property were still tion, but without regard to the held at the beginning of such tax held at the beginning of such taxvalue of the property as of March 1, able year. If such unadjusted basis able year. If such unadjusted basis 1913. If the property was disposed is a substituted basis it shall be ad is a substituted basis it shall be adof before March 1, 1913, its basis justed, with respect to the period justed, with respect to the period shall be considered to be its fair before the property was paid in, in before the property was paid in, in market value at the time paid in. the manner provided in section 113 the manner provided in section 113 If the unadjusted basis of the prop-(b)(2) under the law applicable (b) (2); erty is a substituted basis, such to the year of disposition, but withbasis shall be adjusted, with respect out regard to the value of the propto the period before the property erty as of March 1, 1913. If the was paid in, by an amount equal property was disposed of before to the adjustments proper under March 1, 1913, its basis shall be Sec. 718. (a) (2) Property paid in.-Property (other than money) previously paid in (regardless of the time paid in) for stock, or as paid-in surplus, or as a contribution to capital. Such property shall be included in an amount equal to its basis (unadjusted) for determining loss upon sale or exchange. If the property was disposed of before such taxable year, such basis shall be determined in the same manner as if the property were still held at the beginning of such taxable year. If such unadjusted basis is a substituted basis it shall be adjusted, with respect to the period before the property was paid in, in the manner provided in section 113 (b) (2); Taxable Years section 115 (1) for determining earnings and profits; Sec. 718 (a) (2), I. R. C., supra, amended by Sec. 218, 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. 718 (a) (2), I. R. C., before amendment, see 1942 column. Sec. 718. (a) (3) Distributions Taxable Years considered to be its fair market Sec. 718 (a) (2), I. R. C., Sec. 718. (a) (3) Distributions in stock.-Distributions in stock-in stock.-Distributions in stock- (B) Previously made during such taxable year to the extent to which they are considered distributions of earnings and profits other than earnings and profits of such taxable year; Sec. 718. (a) (4) Earnings and profits at beginning of year. The accumulated earnings and profits as of the beginning of such taxable year; Sec. 718. (a) (5) Increase on ae count of gain on tax free liquida tion. Sec. 718 (a) (5), I. R. C., supra, repealed by Sec. 230 (c), R. A. of 1942, which provides that Sec. 718 (a) (5) shall not apply with respect to any taxable year beginning after Dec. 31, 1941. For Sec. 718 (a) (5), I. R. C., before repeal, see 1942 column. (A) Made prior to such taxable year to the extent to which they are considered distributions of earnings and profits; and (B) Previously made during such taxable year to the extent to which they are considered distributions of earnings and profits other than earnings and profits of such taxable year; Taxable Years Sec. 718. (a) (3) Distributions in stock.-Distributions in stock year to the extent to which they are (A) Made prior to such taxable considered distributions of earnings and profits; and taxable year to the extent to which (B) Previously made during such they are considered distributions of earnings and profits other than earnings and profits of such taxable year; Sec. 718. (a) (4) Earnings and Sec. 718. (a) (4) Earnings and profits at beginning of year. The profits at beginning of year.—The accumulated earnings and profits as accumulated earnings and profits as of the beginning of such taxable of the beginning of such taxable year; and year; Sec. 718. (a) (5) Increase on ae count of gain on tax free liquide tion. In the case of the previous receipt of property (other than property described in the last sen tence of section 113 (a) (15)) by the taxpayer in complete liquidation of another corporation under section 112 (b) (6), or the corre sponding provision of a prior reve nue law, an amount, with respect to each such liquidation, equal to the amount by which the aggregate of the amount of the money so re ceived and of the adjusted basis, at the time of receipt, of all property (other than money) so received, exeeeds the sum of: (A) The aggregate of the ad justed basis of each share of stock with respect to which such property was received; such adjusted basis of each share to be determined im mediately prior to the receipt of any property in such liquidation with respect to such share, and (B) The aggregate of the liabil ities of such other corporation as count of gain on tax-free liquidaSec. 718. (a) (5) Increase on action.-In the case of the previous receipt of property (other than property described in the last sentence of section 113 (a) (15)) by the taxpayer in complete liquidation of another corporation under section 112 (b) (6), or the corre sponding provision of a prior reve nue law, an amount, with respect to each such liquidation, equal to the amount by which the aggregate of the amount of the money so received and of the adjusted basis, at the time of receipt, of all property (other than money) so received, exceeds the sum of: justed basis of each share of stock (A) The aggregate of the adwith respect to which such property was received; such adjusted basis of each share to be determined immediately prior to the receipt of any property in such liquidation with respect to such share, and (B) The aggregate of the liabilities of such other corporation as |