Taxable Years Beginning in 1940 Taxable Years Beginning in 1939 Taxable Years Beginning before 1939 Sec. 743. Net capital changes. Sec. 743. (a) For the purposes of section 713(g), upon the date of the transaction which constitutes a corporation an acquiring corporation, there shall be added to its daily capital addition or reduction for such day, the net capital addition or reduction, as the case may be, of each of the component corporations involved in such transaction, but no other capital addition or reduction shall be considered as having been made by reason of such transaction. Sec. 743. (b) For the purposes of this section Sec. 743. (b) (1) In computing the net capital addition of each such component corporation there shall be disregarded property paid in to such corporation by the taxpayer or by any of its component corporations. Sec. 743. (b) (2) In computing the net capital reduction of each such component corporation there shall be disregarded distributions made to the taxpayer or to any of such component corporations. Sec. 743, I. R. C., supra, amended by Sec. 4 (d), Excess Profits Tax Act of 1941, by striking out "(c)" and substituting in lieu thereof "(g)." Sec. 17 of said Act makes amendment effective as of Oct. 8, 1940, the date of enactment of Excess Profits Tax Act of 1940. Retroactivity See Sec. 743, I. R. C., as amended in 1942 column and note following section relative to retroactive application of amendment. Also see fn. 24, p. 776. Taxable Years taxpayer, distributions by the taxpayer to any of its component corporations not out of earnings and profits shall be disregarded. Taxable Years taxpayer, distributions by the tax- Sec. 743. (a) (6) In computing Sec. 743. (a) (6) In computing the transferred capital addition of the transferred capital addition of the component corporation, money the component corporation, money or property paid in to such com- or property paid in to such component corporation by the taxpayer ponent corporation by the taxpayer or any other component corporation or any other component corporation and property consisting of stock in and property consisting of stock in the taxpayer or any other compo- the taxpayer or any other component corporation paid in by share-nent corporation paid in by shareholders of the taxpayer or other holders of the taxpayer or other component corporation, shall be component corporation, shall be disregarded. disregarded. Sec. 743. (a) (7) In computing Sec. 743. (a) (7) In computing the transferred capital reduction of the transferred capital reduction of the component corporation, distri- the component corporation, distributions by such component corpo-butions by such component corporation to the taxpayer or any other ration to the taxpayer or any other component corporation shall be component corporation shall be disregarded. disregarded. Sec. 743. (a) (8) The daily capital addition of the taxpayer to which any amount is added under paragraph (1) shall be the amount thereof computed before its reduction under the fourth sentence of section 713 (g) (3) on account of excluded capital. Sec. 743. (a) (8) The daily capital addition of the taxpayer to which any amount is added under paragraph (1) shall be the amount thereof computed before its reduction under the fourth sentence of section 713 (g) (3) on account of excluded capital. Sec. 743. (b) Rule where acquir- Sec. 743. (b) Rule where acquiring corporation is component of ing corporation is component of taxpayer. In cases where an ac- taxpayer.-In cases where an acquiring corporation is a component quiring corporation is a component of the taxpayer, and the transac- of the taxpayer, and the transaction which constitutes such corpo- tion which constitutes such corporation an acquiring corporation ration an acquiring corporation occurs in a taxable year of such corporation which begins after December 31, 1939, for the purpose of determining the daily capital addition or reduction of the taxpayer the above rules shall be applied in a similar manner to determine the daily capital addition or reduction of such acquiring corporation for each day after such transaction. Sec. 743, I. R. C., supra, amended to read as above by Sec. 228 (d), R. A. of 1942. Sec. 228 (f) of said Act provides that said amendments shall be applicable only to the computation of the tax for taxable years beginning after December 31, 1941, with certain exceptions pertaining to retroactivity shown in fn. 24, p. 776. For Sec. 743, I. R. C., before amendment, see 1941 column. occurs in a taxable year of such action. Sec. 743, I. R. C., supra, amended to read as above by Sec. 228 (d), R. A. of 1942. Sec. 228 (f) of said Act provides that said amendments shall be applicable only to the computation of the tax for taxable years beginning after December 31, 1941, with certain exceptions pertaining to retroactivity shown in fn. 24, p. 776. For Sec. 743, I. R. C., before amendment, see 1941 column. Taxable Years Beginning in 1941 Taxable Years Beginning in 1942 Sec. 744. Foreign corporations. The term "corporation" as used in this Supplement does not include a foreign corporation. Secs. 743 and 744, I. R. C., added to I. R. C. by Sec. 201, Excess Profits Tax Act of 1940. Sec. 710 of said Act makes amendment applicable to taxable years beginning after Dec. 31, 1939. Supplement B-Highest Bracket Bee. 750. Definitions. See, 750, (a) Exchange. The term "exchange" means an ex change, to which section 112 (b) (1) or (5) or so much of section 112 (e), (d), or (e) as refers to section 112 (b) (4) or (5), or to which a corresponding provision of a prior revenue law, is or was op plicable, by one corporation of its property wholly or in part for stock or securities of another corpo ration, or a transfer of property by one corporation to another corpe ration after December 31, 1917, the basis of which in the hands of such other corporation is or was deter mined under section 113 (a) (8) (B), or would have been so deter mined had such section been in of feet Bee. 750. (b) Transforor upon an exchange. The term "trans foror upon an exchange” means a corporation which upon an ex change transfers property to an other corporation in exchange, wholly or in part, for stock or se eurities of such other corporation, or transfers property to another corporation after December 31, 1917, the basis of which in the hands of such other corporation is or was determined under section 113 (a) (8) (B), or would have been so determined had such see tion been in effect. Taxable Years Beginning in 1941 Sec. 744. Foreign corporations. The term "corporation” as used in this Supplement does not include a foreign corporation. Secs. 743 and 744, 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. Supplement B-Highest Bracket Sec. 750. Definitions. Sec. 750. (a) Exchange.-The term "exchange" means an exchange, to which section 112 (b) (4) or (5) or so much of section 112 (c), (d), or (e) as refers to section 112 (b) (4) or (5), or to which a corresponding provision of a prior revenue law, is or was applicable, by one corporation of its property wholly or in part for stock or securities of another corporation, or a transfer of property by one corporation to another corporation after December 31, 1917, the basis of which in the hands of such other corporation is or was determined under section 113 (a) (8) (B), or would have been so determined had such section been in effect. Sec. 750. (b) Transferor upon an exchange.-The term "transferor upon an exchange" means a corporation which upon an exchange transfers property to another corporation in exchange, wholly or in part, for stock or securities of such other corporation, or transfers property to another corporation after December 31, 1917, the basis of which in the hands of such other corporation is or was determined under section 113 (a) (8) (B), or would have been so determined had such section been in effect. See. 750, (e) Transferee upon an Sec. 750. (c) Transferee upon an exchange. The term "transferee exchange. The term "transferee upon an exchange" means, a corpe upon an exchange" means a corporation which upon an exchange aeration which upon an exchange acquires property from another eor quires property from another corporation in exchange, wholly or in poration in exchange, wholly or in part, for its stock or securities, or part, for its stock or securities, or which acquires property from an which acquires property from another corporation after December other corporation after December Taxable Years Beginning in 1940 Sec. 744. Foreign corporations. The term "corporation" as used in this Supplement does not include a foreign corporation. Secs. 743 and 744, 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. Supplement B-Highest Bracket Amount and Invested Capital Sec. 750. Definitions. As used in this Supplement— Sec. 750. (a) Exchange.-The term "exchange" means an exchange, to which section 112 (b) (4) or (5) or so much of section 112 (c), (d), or (e) as refers to section 112 (b) (4) or (5), or to which a corresponding provision of a prior revenue law, is or was applicable, by one corporation of its property wholly or in part for stock or securities of another corporation, or a transfer of property by one corporation to another corporation after December 31, 1917, the basis of which in the hands of such other corporation is or was determined under section 113 (a) (8) (B), or would have been so determined had such section been in effect. an Sec. 750. (b) Transferor upon exchange.—The term "transferor upon an exchange" means a corporation which upon an exchange transfers property to another corporation in exchange, wholly or in part, for stock or securities of such other corporation, or transfers property to another corporation after December 31, 1917, the basis of which in the hands of such other corporation is or was determined under section 113 (a) (8) (B), or would have been so determined had such section been in effect. Sec. 750. (c) Tansferee upon an exchange. The term "transferee upon an exchange" means a corporation which upon an exchange acquires property from another corporation in exchange, wholly or in part, for its stock or securities, or which acquires property from another corporation after December |