Taxable Years Sec. 722. (d) (1) issues a preliminary notice proposing a deficiency in the tax imposed by this subchapter such taxpayer may, within ninety days after the date of such notice make such application, or Sec. 722. (d) (2) mails a notice of deficiency (A) without having previously issued a preliminary notice thereof or (B) within ninety days after the date of such preliminary notice, such taxpayer may claim the benefits of this section in its petition to the Board or in an amended petition in accordance with the rules of the Board. Sec. 722. (d) (1) issues a pre- Sec. 722. (d) (1) issues a preliminary notice proposing a defi- liminary notice proposing a deficiency in the tax imposed by this ciency in the tax imposed by this subchapter such taxpayer may, subchapter such taxpayer may, within ninety days after the date within ninety days after the date of such notice make such applica- of such notice make such application, or tion, or Sec. 722. (d) (2) mails a notice Sec. 722. (d) (2) mails a notice of deficiency (A) without having of deficiency (A) without having previously issued a preliminary previously issued a preliminary notice thereof or (B) within ninety notice thereof or (B) within ninety days after the date of such prelim- days after the date of such preliminary notice, such taxpayer may inary notice, such taxpayer may claim the benefits of this section in claim the benefits of this section in its petition to the Board or in an its petition to the Board or in an amended petition in accordance amended petition in accordance with the rules of the Board. with the rules of the Board. If the application is not filed within If the application is not filed within If the application is not filed within six months after the date prescribed six months after the date prescribed six months after the date prescribed by law for the filing of the return, by law for the filing of the return, by law for the filing of the return, or if the application relates to a or if the application relates to a or if the application relates to a taxable year beginning after De- taxable year beginning after De- taxable year beginning after December 31, 1939, but not beginning cember 31, 1939, but not beginning cember 31, 1939, but not beginning after December 31, 1941, within after December 31, 1941, within after December 31, 1941, within six months after the date of the six months after the date of the six months after the date of the enactment of the Revenue Aet of enactment of the Revenue Act of enactment of the Revenue Act of 1942, prior to September 16, 1943, 1942 prior to September 16, 1943, 1942, prior to September 16, the operation of this section shall the operation of this section shall 1943, the operation of this section not reduce the tax otherwise deter- not reduce the tax otherwise deter- shall not reduce the tax otherwise mined under this subchapter by an mined under this subchapter by an determined under this subchapter amount in excess of the amount of amount in excess of the amount of by an amount in excess of the the deficiency finally determined the deficiency finally determined amount of the deficiency finally deunder this subchapter without the under this subchapter without the termined under this subchapter application of this section. If a application of this section. If a con- without the application of this secconstructive average base period structive average base period net tion. If a constructive average base net income has been determined income has been determined under period net income has been deterunder the provisions of this section the provisions of this section for mined under the provisions of this for any taxable year, the Commis- any taxable year, the Commissioner section for any taxable year, the sioner may, by regulations ap-may, by regulations approved by Commissioner may, by regulations proved by the Secretary, prescribe the Secretary, prescribe the extent approved by the Secretary, prethe extent to which the limitations to which the limitations prescribed scribe the extent to which prescribed by this subsection may by this subsection may be waived limitations prescribed by this subbe waived for the purpose of de- for the purpose of determining the section may be waived for the purtermining the tax under this sub-tax under this subchapter for a sub-pose of determining the tax under chapter for a subsequent taxable sequent taxable year.* this subchapter for a subsequent year. taxable year.* Sec. 722. (e) Rules for application of section. For the purposes of this section Sec. 722. (e) (1) the tax imposed by this subchapter shall be the tax before the allowance of the foreign tax credit pursuant to section 729 (c) and (d); Sec. 722. (e) (2) in the case of a taxpayer, the average base period net income of which is computed under Supplement A, for the period for which the income of any other person is included in the com Sec. 722. (e) Rules for application of section. For the purposes of this section Sec. 722. (e) (1) the tax imposed by this subchapter shall be the tax before the allowance of the foreign tax credit pursuant to section 729 (c) and (d); Sec. 722. (e) (2) in the case of the Sec. 722. (e) Rules for application of section. For the purposes of this section Sec. 722. (e) (1) the tax imposed by this subchapter shall be the tax before the allowance of the foreign tax credit pursuant to section 729 (c) and (d); Sec. 722. (e) (2) in the case of a taxpayer, the average base period a taxpayer, the average base period net income of which is computed net income of which is computed under Supplement A, for the period under Supplement A, for the period for which the income of any other for which the income of any other person is included in the computa-person is included in the computacable to taxable years beginning after December 31, 1939) to read as follows: * Sec. 722 (d), I. R. C., supra, was amended by Sec. 1, H. R. 3363, approved Nov. -, 1943, (and made appli Taxable Years Beginning in 1940 Sec. 722. (d) (1) issues a preliminary notice proposing a deficiency in the tax imposed by this subchapter such taxpayer may, within ninety days after the date of such notice make such application, or Sec. 722. (d) (2) mails a notice of deficiency (A) without having previously issued a preliminary notice thereof or (B) within ninety days after the date of such preliminary notice, such taxpayer may claim the benefits of this section in its petition to the Board or in an amended petition in accordance with the rules of the Board. If the application is not filed within six months after the date prescribed by law for the filing of the return, or if the application relates to a taxable year beginning after December 31, 1939, but not beginning after December 31, 1941, within six months after the date of the enactment of the Revenue Act of 1942, prior to September 16, 1943, the operation of this section shall not reduce the tax otherwise determined under this subchapter by an amount in excess of the amount of the deficiency finally determined under this subchapter without the application of this section. If a constructive average base period net income has been determined under the provisions of this section for any taxable year, the Commissioner may, by regulations approved by the Secretary, prescribe the extent to which the limitations prescribed by this subsection may be waived for the purpose of determining the tax under this subchapter for a subsequent taxable year.* Sec. 722. (e) Rules for application of section.-For the purposes of this section Sec. 722. (e) (1) the tax imposed by this subchapter shall be the tax before the allowance of the foreign tax credit pursuant to section 729 (c) and (d); Sec. 722. (e) (2) in the case of a taxpayer, the average base period net income of which is computed under Supplement A, for the period for which the income of any other person is included in the computa (d) Application for relief under this section.-The taxpayer shall compute its tax, file its return, and pay the tax shown on its return under this subchapter without the application of this section, except as provided in section 710 (a) (5). The benefits of this section shall not be allowed unless the taxpayer within the period of time prescribed by section 322 and subject to the limitation as to amount of credit or refund prescribed in such section makes application therefor in accordance with regulations prescribed by the Commissioner with the approval of the Secretary. If a constructive average base period net income has been determined under the provisions of this section for any taxable year, the Commissioner may, by regulations approved by the Secretary, prescribe the extent to which the limitations prescribed by this subsection may be waived for the purpose of determining the tax under this subchapter for a subsequent taxable year. putation of the average base period tion of the average base period net net income of the taxpayer, the tax-income of the taxpayer, the taxpayer shall be treated as if such payer shall be treated as if such other person's business were a part other person's business were a part of the business of the taxpayer. of the business of the taxpayer. Sec. 722. (f) Mining corpora Taxable Years tion of the average base period net income of the taxpayer, the taxpayer shall be treated as if such other person's business were a part of the business of the taxpayer. Sec. 722. (f) Mining corporaSec. 722. (f) Mining corporations. In the case of a taxpayer tions.-In the case of a taxpayer tions.-In the case of a taxpayer to which section 711 (a) (1) (I) to which section 711 (a) (1) (1) to which section 711 (a) (1) (1) or section 711 (a) (2) (K) applies, or section 711 (a) (2) (K) applies, or section 711 (a) (2) (K) applies, if its constructive average base if its constructive average base if its constructive average base period net income is established period net income is established period net income is established under this section, there shall also under this section, there shall also under this section, there shall also be determined a fair and just be determined a fair and just be determined a fair and just amount to be used as normal output amount to be used as normal output amount to be used as normal output and normal unit profit for the pur- and normal unit profit for the pur- and normal unit profit for the purposes of section 735. poses of section 735. poses of section 735. Sec. 722, I. R. C., supra, as amended by Sec. 222 (a), R. A. of 1942. Sec. 722 (e) (1) of said Act makes amendment applicable to taxable years beginning after Dec. 31, 1939. Sec. 722 (d), I. R. C., supra, was amended by H. J. R. 100, approved March 31, 1943, by omitting language in stricken through type and adding language in italics. Sec. 723. Equity invested capital in special cases. Sec. 722, I. R. C., as orig- as Sec. 722, I. R. C., supra, as amended by Sec. 222 (a), R. A. of 1942. Sec. 222 (e) (1) of said Act makes amendment applicable to taxable years beginning after Dec. 31, 1939. Sec. 722 (d), I. R. C., supra, was amended by H. J. R. 100, approved March 31, 1943, by omitting language in stricken through italics and adding language in underlined italics. Sec. 723. Equity invested capital in special cases. Sec. 722, I. R. C., as originally enacted by Sec. 201, Excess Profits Tax Act of 1940, as amended by Sec. 6, Excess Profits Tax Amendments of 1941, and amended by Sec. 202 (g), R. A. of 1941, are shown in fn. 27, p. 834. as Sec. 722, I. R. C., supra, as amended by Sec. 222 (a), R. A. of 1942. Sec. 222 (e) (1) of said Act makes amendment applicable to taxable years beginning after Dec. 31, 1939. Sec. 722 (d), I. R. C., supra, was amended by H. J. R. 100, approved March 31, 1943, by omitting language in stricken through italics and adding language in underlined italics. Sec. 723. Equity invested capital in special cases. Where the Commissioner deterSec. 723. (a) Where the Commis- Sec. 723. (a) Where the Commismines that the sioner determines that the equity sioner determines that the equity in- capital as of the beginning of the equity invested invested capital as of the beginning vested capital as of the beginning taxpayer's first taxable year under of the taxpayer's first taxable year of the taxpayer's first taxable year this subchapter cannot be deterunder this subchapter cannot be under this subchapter cannot be mined in accordance with section determined in accordance with sec-determined in accordance with sec- 718, the equity invested capital as tion 718, the equity invested capital tion 718, the equity invested capital of the beginning of such year shall as of the beginning of such year as of the beginning of such year be an amount equal to the sum of shall be an amount equal to the sum shall be an amount equal to the sum of (a) the money plus (b) the of (a) the money plus (b) the (a) the money plus (b) the aggreaggregate of the adjusted basis of aggregate of the adjusted basis of gate of the adjusted basis of the the assets of the taxpayer held by the assets of the taxpayer held by assets of the taxpayer held by the the taxpayer at such time, such sum the taxpayer at such time, such sum taxpayer at such time, such sum being reduced by the indebtedness outstanding at such time. The amount of the money, assets, and indebtedness at such time shall be determined in accordance with rules and regulations prescribed by the Commissioner with the approval of such time. The being reduced by the indebtedness being reduced by the indebtedness outstanding at such time. The outstanding at amount of the money, assets, and amount of the money, assets, and indebtedness at such time shall be indebtedness at such time shall be determined in accordance with rules determined in accordance with rules and regulations prescribed by the and regulations prescribed by the Commissioner with the approval of Commissioner with the approval of the Secretary. In such case, the the Secretary. In such case, the the Secretary. In such case, the equity invested capital for each day equity invested capital for each day after the beginning of the tax-after the beginning of the taxpayer's first taxable year under this payer's first taxable year under this subchapter shall be determined, in subchapter shall be determined, in accordance with rules and regulations prescribed by the Commissioner with the approval of the Secretary, using as the basic figure accordance with rules and regula- equity invested capital for each day after the beginning of the taxpayer's first taxable year under this subchapter shall be determined, in accordance with rules and regulations prescribed by the Commissioner with the approval of the Secretary, using as the basic figure Taxable Years Beginning in 1940 tion of the average base period net income of the taxpayer, the taxpayer shall be treated as if such other person's business were a part of the business of the taxpayer. Sec. 722. (f) Mining corporations. In the case of a taxpayer to which section 711 (a) (1) (1) or section 711 (a) (2) (K) applies, if its constructive average base period net income is established under this section, there shall also be determined a fair and just amount to be used as normal output and normal unit profit for the purposes of section 735. Sec. 722, I. R. C., as originally enacted by Sec. 201 Excess Profits Tax Act of 1940, as amended by Sec. 6, Excess Profits Tax Amendments of 1941, and as amended by Sec. 202 (g), R. A. of 1941, are shown in fn. 27, p. 834. Sec. 722, I. R. C., supra, as amended by Sec. 222 (a), R. A. of 1942. Sec. 222 (e) (1) of said Act makes amendment applicable to taxable years beginning after Dec. 31, 1939. Sec. 722 (d), I. R. C., supra, was amended by H. J. R. 100, approved March 31, 1943, by omitting language in stricken through italics and adding language in underlined italics. Sec. 723. Equity invested capital in special cases. Where the Commissioner determines that the equity invested capital as of the beginning of the taxpayer's first taxable year under this subchapter cannot be determined in accordance with section 718, the equity invested capital as of the beginning of such year shall be an amount equal to the sum of (a) the money plus (b) the aggregate of the adjusted basis of the assets of the taxpayer held by the taxpayer at such time, such sum being reduced by the indebtedness outstanding at such time. The amount of the money, assets, and indebtedness at such time shall be determined in accordance with rules and regulations prescribed by the Commissioner with the approval of the Secretary. In such case, the equity invested capital for each day after the beginning of the taxpayer's first taxable year under this subchapter shall be determined, in accordance with rules and regulations prescribed by the Commissioner with the approval of the Secretary, using as the basic figure Taxable Years Taxable Years Taxable Years the equity invested capital as so the equity invested capital as so the equity invested capital as so determined. determined. determined. Sec. 723. (b) The equity invested capital of mutual insurance companies other than life, or marine, shall be the mean of the surplus, plus 50 per centum of the mean of all reserves required by law, both surplus and reserves being determined at the beginning and end of the taxable year. The surplus shall include all of the assets of the company other than reserves required by law. Sec. 723, I. R. C., supra, amended by Sec. 205 (f), R. A. of 1942, to read as above. Sec. 201 of said Act makes amendment applicable to taxable years beginning after Dec. 31, 1941. For Sec. 723, I. R. C., before amendment, see 1942 column. See note following Sec. 728, I. R. C., infra. Sec. 724. Foreign corporations and corporations entitled to benefits of section 251-Invested capital. Notwithstanding section 715, in the case of a foreign corporation engaged in trade or business within the United States and in the case of a corporation entitled to the benefits of section 251, the invested capital for any taxable year shall be determined in accordance with rules and regulations prescribed by the Commissioner with the approval of the Secretary, under which Sec. 723. (b) The equity invested capital of mutual insurance companies other than life, or marine, shall be the mean of the surplus, plus 50 per centum of the mean of all reserves required by law, both surplus and reserves being determined at the beginning and end of the taxable year. The surplus shall include all of the assets of the company other than reserves required by law. Sec. 723, I. R. C., supra, See note following Sec. 728, Sec. 724. Foreign corporations See note following Sec. 728, I. R. C., infra. Sec. 724. Foreign corporations and corporations entitled to bene fits of section 251-Invested capital. Notwithstanding section 715, in Notwithstanding section 715, in the case of a foreign corporation the case of a foreign corporation engaged in trade or business within engaged in trade or business within the United States or having an of the United States or having an of fee or place of business therein, fice or place of business thereiz. and in the case of a corporation and in the case of a corporation. entitled to the benefits of section entitled to the benefits of section 251, the invested capital for any 251, the invested capital for any taxable year shall be determined in taxable year shall be determined in accordance with rules and regula- accordance with rules and regula tions prescribed by the Commis- tions prescribed by the Commis sioner with the approval of the sioner with the approval of the Secretary, under whichSecretary, under which Sec. 724. (a) General rule.-The Sec. 724. (a) General rule.-The Sec. 724. (a) General rule.-The daily invested capital for any day daily invested capital for any day daily invested capital for any day of the taxable year shall be the of the taxable year shall be the of the taxable year shall be the aggregate of the adjusted basis of aggregate of the adjusted basis of aggregate of the adjusted basis of each United States asset held by each United States asset held by the each United States asset held by the the taxpayer on the beginning of taxpayer on the beginning of such taxpayer on the beginning of such such day. In the application of day. In the application of section day. In the application of section section 720 in reduction of the 720 in reduction of the average in- 720 in reduction of the average inaverage invested capital (deter- vested capital (determined on the vested capital (determined on the mined on the basis of such daily in- basis of such daily invested capi- basis of such daily invested capi vested capital), the terms "admis- tal), the terms "admissible assets" tal), the terms "admissible assets" sible assets" and "inadmissible and "inadmissible assets" shall in- and "inadmissible assets" shall inassets" shall include only United clude only United States assets; or clude only United States assets; or States assets; or Sec. 724. (b) Exception.-If the Sec. 724. (b) Exception.-If the Sec. 724. (b) Exception.-If the Commissioner determines that the Commissioner determines that the Commissioner determines that the United States assets of the tax- United States assets of the taxpayer United States assets of the taxpaye payer cannot satisfactorily be seg- cannot satisfactorily be segregated cannot satisfactorily be segregated regated from its other assets, the from its other assets, the invested from its other assets, the invested invested capital for the taxable capital for the taxable year shall capital for the taxable year shall |