sales, exchanges, or conversions to which subsection (a) is applicable, by section 323 (c) of act Oct. 20, 1951.

EFFECTIVE DATE OF 1942 AMENDMENT Amendments of subsec. (a) (1, 4, 6, 7) by act Oct. 21, 1942, §§ 127 (b), 129, 130 (a), were made applicable to taxable years beginning after Dec. 31, 1941, by section 101 thereof.

Amendment of subsec. (a) (5), inserting reference to section 23 (a) (2), made applicable to taxable years beginning after Dec. 31, 1938, by section 121 (e) of act Oct. 21, 1942.

SIMILAR PROVISIONS

1937-Aug. 26, 1937, ch. 815, title III, § 301, 50 Stat. 827. 1936 June 22, 1936, ch. 690, § 24, 49 Stat. 1662. 1934-May 10, 1934, ch. 277, § 24, 48 Stat. 691. 1932-June 6, 1932, ch. 209, § 24, 47 Stat. 183. 1928-May 29, 1928, ch. 852, § 24, 45 Stat. 802. 1926-Feb. 26, 1926, ch. 27, §§ 215, 235, 44 Stat. 28, 43. 1924 June 2, 1924, ch. 234, §§ 215, 235, 43 Stat. 271, 285. 1921-Nov. 23, 1921, ch. 136, §§ 215, 235, 42 Stat. 242, 257. 1919-Feb. 24, 1919, ch. 18, §§ 215, 235, 40 Stat. 1069, 1080.

TREATY OBLIGATIONS

Section 615 of act Oct. 20, 1951, provided that: "No amendment made by this Act [act Oct. 20, 1951], shall apply in any case where its application would be contrary to any treaty obligation of the United States."

Similar provisions were contained in the following act: 1942-Oct. 21, 1942, 4:30 p. m., E. W. T., ch. 619, title I, § 109, 65 Stat. 808.

§ 25. Credits of individual against net income-(a) Credits for normal tax only.

There shall be allowed for the purpose of the normal tax, but not for the surtax, the following credits against the net income:

(1) Interest on United States obligations.

The amount received as interest upon obligations of the United States, if such interest is included in gross income under section 22, and if, under the Act authorizing the issue of such obligations, as amended and supplemented, such interest is exempt from normal tax.

(2) Interest on obligations of instrumentalities of the United States.

The amount received as interest on obligations of a corporation organized under Act of Congress, if (A) such corporation is an instrumentality of the United States; and (B) such interest is included in gross income under section 22; and (C) under the Act authorizing the issue thereof, as amended and supplemented, such interest is exempt from normal tax. (For reduction of credit under paragraph (1) or (2) on account of amortizable bond premium, see section 125.)

(3) Repealed. Feb. 25, 1944, 12:49 p. m., E. W. T., ch. 63, title I, § 107 (a), 58 Stat. 31; Nov. 8, 1945, 5:17 p. m., E. S. T., ch. 453, title I, § 102 (b) (2), 59 Stat. 558.

(4) Repealed. Feb. 25, 1944, 12:49 p. m., E. W. T., ch. 63, title I, § 107 (a), 58 Stat. 31.

(b) Credits for both normal tax and surtax. (1) Credits.

There shall be allowed for the purposes of both the normal tax and the surtax, the following credits against net income:

(A) An exemption of $600 for the taxpayer; and an additional exemption of $600 for the spouse of the

taxpayer if a separate return is made by the taxpayer, and if the spouse, for the calendar year in which the taxable year of the taxpayer begins, has no gross income and is not the dependent of another taxpayer;

(B) (i) An additional exemption of $600 for the taxpayer if he has attained the age of 65 before the close of his taxable year; and

(ii) An additional exemption of $600 for the spouse of the taxpayer if a separate return is made by the taxpayer, and if the spouse has attained the age of 65 before the close of such taxable year, and, for the calendar year in which the taxable year of the taxpayer begins, has no gross income and is not the dependent of another taxpayer;

(C) (i) An additional exemption of $600 for the taxpayer if he is blind at the close of his taxable year; and

(ii) An additional exemption of $600 for the spouse of the taxpayer if a separate return is made by the taxpayer, and if the spouse is blind and, for the calendar year in which the taxable year of the taxpayer begins, has no gross income and is not the dependent of another taxpayer. For the purposes of this clause the determination of whether the spouse is blind shall be made as of the close of the taxable year of the taxpayer, unless the spouse dies during such taxable year, in which case such determination shall be made as of the time of such death;

(iii) For the purposes of this subparagraph an individual is blind only if either: his central visual acuity does not exceed 20/200 in the better eye with correcting lenses, or his visual acuity is greater than 20/200 but is accompanied by a limitation in the fields of vision such that the widest diameter of the visual field subtends an angle no greater than 20 degrees;

(D) An exemption of $600 for each dependent whose gross income for the calendar year in which the taxable year of the taxpayer begins is less than $600, except that the exemption shall not be allowed in respect of a dependent who has made a joint return with his spouse under section 51 for the taxable year beginning in such calendar year.

(2) Determination of status.

For the purposes of this subsection

(A) the determination of whether an individual is married shall be made as of the close of his taxable year, unless his spouse dies during his taxable year, in which case such determination shall be made as of the time of such death; and

(B) an individual legally separated from his spouse under a decree of divorce or of separate maintenance shall not be considered as married.

(3) Definition of dependent.

As used in this chapter the term "dependent" means any of the following persons over half of whose support, for the calendar year in which the taxable year of the taxpayer begins, was received from the taxpayer:

(A) a son or daughter of the taxpayer, or a descendant of either,

(B) a stepson or stepdaughter of the taxpayer,

(C) a brother, sister, stepbrother, or stepsister of the taxpayer,

(D) the father or mother of the taxpayer, or an ancestor of either,

(E) a stepfather or stepmother of the taxpayer,

(F) a son or daughter of a brother or sister of the taxpayer,

(G) a brother or sister of the father or mother of the taxpayer,

(H) a son-in-law, daughter-in-law, fatherin-law, mother-in-law, brother-in-law, or sister-in-law of the taxpayer.

As used in this paragraph, the terms “brother" and "sister" include a brother or sister by the halfblood. For the purposes of determining whether any of the foregoing relationships exist, a legally adopted child of a person shall be considered a child of such person by blood. The term "dependent" does not include any individual who is a citizen or subject of a foreign country unless such individual is a resident of the United States or of a country contiguous to the United States. A payment to a wife which is includible under section 22 (k) or section 171 in the gross income of such wife shall not be considered a payment by her husband for the support of any dependent. (53 Stat. 17; June 25, 1940, 11:45 a. m., E. S. T., ch. 419, title I, § 6 (a), 54 Stat. 519; Sept. 20, 1941, 12:15 p. m., E. S. T., ch. 412, title I, §§ 111 (a), 113, 55 Stat. 696, 697; Oct. 21, 1942, 4:30 p. m., E. W. T., ch. 619, title I, §§ 112 (b), 120 (e) (1), 126 (i) (1), 131 (a) (1), (b), 56 Stat. 811, 818, 825, 827, 828; Feb. 25, 1944, 12:49 p. m., E. W. T., ch. 63, title I, §§ 103, 107 (a), 58 Stat. 31; May 29, 1944, 7 p. m., E. W. T., ch. 210, part I, § 10 (a, b), 58 Stat. 238; Nov. 8, 1945, 5:17 p. m., E. S. T., ch. 453, title I, § 102 (a), (b) (2), 59 Stat. 558; Apr. 2, 1948, 3:18 p. m., E. S. T., ch. 168, title II, § 201, 62 Stat. 112; Oct. 20, 1951, 2:07 p. m., E. S. T., ch. 521, title III, § 310 (a), 65 Stat. 487.)

DERIVATION

Act May 28, 1938, ch. 289, § 25, 52 Stat. 466.

AMENDMENTS

1951-Subsec. (b) (1) (D) amended by act Oct. 20, 1951, § 310 (a), to insert "$600" in lieu of "$500" where it appears a second time.

1948 Subsec. (b) (1), (2), amended by act Apr. 2, 1948, which increases the personal, old-age, blind, dependents exemptions from $500 to $600, and provides that the determination of the status of a taxpayer is made at the end of the taxable year, unless the spouse dies during the year, in which case the determination is made at the time of such death.

1945 Subsec. (a) (3) repealed by act Nov. 8, 1945, § 102 (b).

Subsec. (b) (1) amended generally by act Nov. 8, 1945, § 102 (a), so as to allow credits for both normal tax and

surtax.

1944 Subsec. (a) amended by act May 29, 1944, which added par. (3).

Subsecs. (a) (3) and (a) (4) repealed by act Feb. 25,

1944.

Subsec. (b) amended generally by act May 29, 1944, to eliminate references to husband and wife, to head of a family, and to provide for surtax exemption on a per capita system.

Subsec. (b) (3) amended generally by act Feb. 25, 1944, to provide new basis for determination of status. 1942 Subsecs. (a) (1, 2), and (b) (1), (2) (A) amended by act Oct. 21, 1942.

1941-Subsec. (b) (1) amended by act Sept. 20, 1941, § 111 (a).

Subsec. (b) (2) amended by act Sept. 20, 1941, § 113. 1940 Subsec. (b) (1) amended by act June 25, 1940, which substituted "$800" for "$1,000" and "$2,000" for "$2,500."

EFFECTIVE DATE OF 1951 AMENDMENT

Amendment of subsec. (b) (1) (D) made applicable only with respect to taxable years beginning after Dec. 31, 1950, by section 310 (b) of act Oct. 20, 1951.

EFFECTIVE DATE OF 1948 AMENDMENTS

Section 203 of act Apr. 2, 1948, provided that amendments made by sections 201 and 202 of said act Apr. 2, 1948, to sections 23 (y), 25 (b) (1), (2), 51 (a), 58 (a), 142 (a), 147 (a), 163 (a) (1), and 1622 (h) (1) of this title should be applicable to taxable years beginning after Dec. 31, 1947, and that taxable years beginning in 1947 and ending in 1948 shall be governed by subsec. (d) of section 108 of this title.

EFFECTIVE DATE OF 1945 AMENDMENT

Act Nov. 8, 1945, § 102 (a), (b) (2), was made applicable with respect to taxable years beginning after Dec. 31, 1945, by section 102 (c) thereof. For treatment of taxable years beginning in 1945 and ending in 1946, see sections 108 and 710 of this title.

EFFECTIVE DATE OF 1944 AMENDMENT

Act May 29, 1944, § 10 (a), (b), was made applicable to taxable years beginning after Dec. 31, 1943, by section 2 thereof.

Act Feb. 25, 1944, §§ 103, 107 (a), was made applicable to taxable years beginning after Dec. 31, 1943, by section 101 thereof.

EFFECTIVE Date of 1942 AMENDMENTS

Amendments of subsecs. (a) (2) and (b) (1), (2) (A), by act Oct. 21, 1942, §§ 126 (i), 131 (a), (b), were made applicable to taxable years beginning after Dec. 31, 1941, by section 101 thereof.

Amendment of subsec. (a) (1) by act Oct. 21, 1942, § 112 (b), was made effective as of March 1, 1941, by section 112 (c) thereof.

Amendment of subsec. (b) (2) (A), inserting a sentence at the end thereof, by act Oct. 21, 1942, § 120 (e), was made effective by section 120 (g) thereof as follows: "(g) The amendments made by this section (to sections 22 (b) (2), (k), 23 (u), 25 (b) (2) (A), 171, 3797 (a) (17)) shall be applicable only with respect to taxable years beginning after December 31, 1941; except that if the first taxable year beginning after December 31, 1941, of the husband does not begin on the same day as the first taxable year beginning after December 31, 1941, of the wife, such amendments shall first become applicable in the case of the husband on the first day of the wife's first taxable year beginning after December 31, 1941, regardless of the taxable year of the husband in which such day falls."

EFFECTIVE DATE OF 1941 AMENDMENT Act Sept. 20, 1941, was made applicable only with respect to taxable years beginning after Dec. 31, 1940, by section 118 thereof.

EFFECTIVE DATE OF 1940 AMENDMENT

Act June 25, 1940, provided: "The amendments made by this title (sections 1-9 of 1940 act), except the amendments made by section 5 (sections 143, 144 of Internal Revenue Code), shall be applicable only with respect to taxable years beginning after December 31, 1939", by section 9 of said act.

SIMILAR PROVISIONS

1936-June 22, 1936, ch. 690, § 25, 49 Stat. 1662. 1934-May 10, 1934, ch. 277, § 25, 48 Stat. 692. 1932-June 6, 1932, ch. 209, § 25, 47 Stat. 184. 1928-May 29, 1928, ch. 852, §§ 25, 31, 45 Stat. 802, 804.

1926-Feb. 26, 1926, ch. 27, §§ 209, 216, 44 Stat. 20, 29. 1924 June 2, 1924, ch. 234, §§ 209, 216, 43 Stat. 263, 272. 1923-Mar. 4, 1923, ch. 280, § 2, 42 Stat. 1507. 1921-Nov. 23, 1921, ch. 136, § 216, 42 Stat. 242, as amended by act Sept. 19, 1922, ch. 346, § 27,

42 Stat. 856.

1919-Feb. 24, 1919, ch. 18, § 216, 40 Stat. 1069. 1917-Oct. 3, 1917, ch. 63, § 3, 40 Stat. 301.

1916 Sept. 8, 1916, ch. 463, §§ 5, 7, 39 Stat. 759, 761, as amended by act Oct. 3, 1917, ch. 63, §§ 1201, 1203, 40 Stat. 330, 331.

1913-Oct. 3, 1913, ch. 16, § II, C, 38 Stat. 168.

TREATY OBLIGATIONS

Section 615 of act Oct. 20, 1951, provided that: "No amendment made by this Act [act Oct. 20, 1951] shall apply in any case where its application would be contrary to any treaty obligation of the United States."

Similar provisions were contained in the following acts:

1944-Feb. 25, 1944, 12:49 p. m., E. W. T., ch. C3, title I, § 136, 58 Stat. 53.

1942-Oct. 21, 1942, 4:30 p. m., E. W. T., ch. 619, title I, § 109, 56 Stat. 808.

1941-Sept. 20, 1941, 12:15 p. m., E. S. T., ch. 412, title I, § 108, 55 Stat. 695.

1940-June 25, 1940, 11:45 a. m., E. S. T., ch. 419, title I, § 8, 54 Stat. 520.

CROSS REFERENCES

Credit for dependents in case of optional tax, see section 400 of this title.

United States obligations and evidences of ownership issued after March 27, 1942, as subject to Federal taxation, see section 742a of Title 31, Money and Finance.

§ 26. Credits of corporations.

In the case of a corporation the following credits shall be allowed to the extent provided in the various sections imposing tax

(a) Interest on obligations of the United States and its instrumentalities.

The amount received as interest upon obligations of the United States or of corporations organized under Act of Congress which is allowed to an individual as a credit for purposes of normal tax by section 25 (a) (1) or (2). (For reduction of credit under this subsection on account of amortizable bond premium, see section 125.)

(b) Dividends received.

An amount equal to the sum of

(1) In general.

85 per centum of the amount received as dividends (other than dividends described in paragraph (2) on the preferred stock of a public utility) from a domestic corporation which is subject to taxation under this chapter.

(2) Certain preferred stock.

(A) Calendar year 1951.

In the case of a taxable year beginning on January 1, 1951, and ending on December 31, 1951, 61 per centum of the amount received as dividends on the preferred stock of a public utility which is subject to taxation under this chapter and with respect to which the credit provided in section 26 (h) for dividends paid is allowable.

(B) Taxable years beginning after March 31, 1951, and before April 1, 1954.

In the case of taxable years beginning after March 31, 1951, and before April 1, 1954, 62 per centum of the amount received as dividends on the preferred

stock of a public utility which is subject to taxation under this chapter and with respect to which the credit provided in section 26 (h) for dividends paid is allowable.

(C) Taxable years beginning after March 31, 1954. In the case of taxable years beginning after March 31, 1954, 59 per centum of the amount received as dividends on the preferred stock of a public utility which is subject to taxation under this chapter and with respect to which the credit provided in section 26 (h) for dividends paid is allowable.

(3) Dividends received from certain foreign corpora

tions.

In the case of dividends received from a foreign corporation (other than a foreign personal holding company) which is subject to taxation under this chapter, if, for an uninterrupted period of not less than 36 months ending with the close of such foreign corporation's taxable year in which such dividends are paid (or, if the corporation has not been in existence for 36 months at the close of such taxable year, for the period the foreign corporation has been in existence as of the close of such taxable year) such foreign corporation has been engaged in trade or business within the United States and has derived 50 per centum or more of its gross income from sources within the United States

(A) an amount equal to 85 per centum of the dividends received out of its earnings or profits specified in clause (2) of the first sentence of section 115 (a), but such amount shall not exceed an amount which bears the same ratio to 85 per centum of such dividends received out of such earnings or profits as the gross income of such foreign corporation for the taxable year from sources within the United States bears to its gross income from all sources for such taxable year, and

(B) an amount equal to 85 per centum of the dividends received out of that part of its earnings or profits specified in clause (1) of the first sentence of section 115 (a) accumulated after the beginning of such uninterrupted period, but such amount shall not exceed an amount which bears the same ratio to 85 per centum of such dividends received out of such accumulated earnings or profits as the gross income of such foreign corporation from sources within the United States for the portion of such uninterrupted period ending at the beginning of such taxable year bears to its gross income from all sources for such portion of such uninterrupted period.

For determination of earnings or profits distributed in any taxable year, see section 115 (b).

(c) Net operating loss of preceding year—(1) Amount of credit.

The amount of net operating loss (as defined in paragraph (2)) of the corporation for the preceding taxable year (if beginning after December 31, 1937) but not in excess of (A) the section 102 net income for the taxable year, in the case of the tax imposed by section 102; (B) the Supplement P net income for the taxable year, in the case of the computations required under Supplement P; or (C) the Sub

chapter A net income for the taxable year, in the case of the tax imposed under Subchapter A. (2) Definition.

As used in this section the term "net operating loss" means the excess of the deductions allowed by this chapter over the gross income, with the following exceptions and limitations

(A) The deduction for depletion shall not exceed the amount which would be allowable if computed without reference to discovery value or to percentage depletion under section 114 (b) (2), (3), or (4);

(B) There shall be included in computing gross income the amount of interest received which is wholly exempt from the taxes imposed by this chapter, decreased by the amount of interest paid or accrued which is not allowed as a deduction by section 23 (b), relating to interest on indebtedness incurred or continued to purchase or carry certain tax-exempt obligations.

In the case of a taxable year beginning after December 31, 1937, and before January 1, 1939, the term "net operating loss" means net operating loss as defined in section 26 (c) of the Revenue Act of 1938, 52 Stat. 467.

(C) For the purposes of this paragraph, the net operating loss deduction provided in section 122 shall not be allowed.

(d) Bank affiliates.

In the case of a holding company affiliate (as defined in section 2 of the Banking Act of 1933), the amount of the earnings or profits which the Board of Governors of the Federal Reserve System certifies to the Commissioner has been devoted by such affiliate during the taxable year to the acquisition of readily marketable assets other than bank stock in compliance with section 5144 of the Revised Statutes. The aggregate of the credits allowable under this subsection for all taxable years beginning after December 31, 1935, shall not exceed the amount required to be devoted under such section 5144 to such purposes, and the amount of the credit for any taxable year shall not exceed the adjusted net income for such year.

(e) Repealed. Nov. 8, 1945, 5:17 p. m., E. S. T., ch. 453, title I, § 122 (g) (1), 59 Stat. 570.

(f) Dividends paid credit.

For corporation dividends paid credit, see section 27.

(g) Consent dividends credit.

For corporation consent dividends credit, see section 28.

(h) Credit for dividends paid on certain preferred stock-(1) Amount of credit.

In the case of taxable years beginning before April 1, 1951, any reference in section 15 (a) or 26 (b) of the Internal Revenue Code to dividends received on the preferred stock of a public utility shall be construed as referring only to dividends received on the preferred stock of a public utility with respect to which the credit provided in section 26 (h) of such Code for dividends paid was allowable. For the purposes of the credit provided in this subsection 24626-53-vol. 3- -5

the amount of dividends paid shall not include any amount distributed in the current taxable year with respect to dividends unpaid and accumulated in any taxable year ending prior to October 1, 1942. Amounts distributed in the current taxable year with respect to dividends unpaid and accumulated for a prior taxable year shall for the purposes of this paragraph be deemed to be distributed with respect to the earliest year or years for which there are dividends unpaid and accumulated. The credit provided in this subsection shall be subtracted from the basic surtax credit provided in section 27.

(2) Definitions.

As used in this subsection, subsection (b), and sections 13 and 15

(A) Public utility.

The term "public utility" means a corporation engaged in the furnishing of telephone service or in the sale of electric energy, gas, or water, if the rates for such furnishing or sale, as the case may be, have been established or approved by a State or political subdivision thereof or by an agency or instrumentality of the United States or by a public utility or public service commission or other similar body of the District of Columbia or of any State or political subdivision thereof.

(B) Preferred stock.

The term "preferred stock" means stock issued prior to October 1, 1942, which during the whole of the taxable year (or the part of the taxable year after its issue) was stock the dividends in respect of which were cumulative, limited to the same amount, and payable in preference to the payment of dividends on other stock. Stock issued on or after October 1, 1942, shall be deemed for the purposes of this paragraph to have been issued prior to October 1, 1942, if it was issued (including issuance either by the same or another corporation in a transaction which is a reorganization, as defined in section 112 (g) (1), or a transaction to which section 112 (b) (10), or so much of section 112 (d) or (e) as relates to section 112 (b) (10), is applicable, or which is a transaction subject to Supplement R) to refund or replace bonds or debentures issued prior to October 1, 1942, or to refund or replace other preferred stock (including stock which is preferred stock by reason of this sentence), but only to the extent that the par or stated value of the new stock does not exceed the par, stated, or face value of the bonds or debentures issued prior to October 1, 1942, or the other preferred stock, which such new stock is issued to refund or replace. The determination of whether stock was issued to refund or replace bonds or debentures issued prior to October 1, 1942, or to refund or replace other preferred stock, shall be made under regulations prescribed by the Commissioner with the approval of the Secretary.

(i) Western hemisphere trade corporations.

In the case of a western hemisphere trade corporation (as defined in section 109)

(1) Calendar year 1951.

In the case of a taxable year beginning on January 1, 1951, and ending on December 31, 1951, an

amount equal to 28 per centum of its normal-tax net income computed without regard to the credit provided in this subsection.

(2) Taxable years beginning after March 31, 1951, and before April 1, 1954.

In the case of a taxable year beginning after March 31, 1951, and before April 1, 1954, an amount equal to 27 per centum of its normal-tax net income computed without regard to the credit provided in this subsection.

(3) Taxable years beginning after March 31, 1954.

In the case of a taxable year beginning after March 31, 1954, an amount equal to 30 per centum of its normal-tax net income computed without regard to the credit provided in this subsection. (53 Stat. 18; June 29, 1939, 10 p. m., E. S. T., ch. 247, title II, § 211 (j), 53 Stat. 869; Oct. 21, 1942, 4:30 p. m., E. W. T., ch. 619, title I, §§ 105 (d), (e) (1), 126 (i), (2), 132 (a), 133, 56 Stat. 806, 807, 825, 828, 830; Feb. 25, 1944, 12:49 p. m., E. W. T., ch. 63, title I, § 116, title II, § 202 (c), 58 Stat. 36, 53; Nov. 8, 1945, 5:17 p. m., E. S. T., ch. 453, title I, § 122 (g) (1), (4), 59 Stat. 570; Sept. 23, 1950, 3:15 p. m., E. D. T., ch. 994, title I, pt. II, §§ 121 (g) (1), 122, 64 Stat. 918; Jan. 3, 1951, 10:13 a. m., ch. 1199, title II, § 202 (a, b), 64 Stat. 1216; Oct. 20, 1951, 2:07 p. m., ch. 521, title, I, § 122, title III, § 311 (a), 65 Stat. 469, 487.)

DERIVATION

Act May 28, 1938, ch. 289, § 26, 52 Stat. 467.

AMENDMENTS

1951-Subsec. (b) (1), (2), amended by act Oct. 20, 1951, § 122 (a), which restated paragraph (1) and rewrote paragraph (2) to reflect the increase in taxes for calendar year 1951, and taxable years beginning after Mar. 31, 1951, and before Apr. 1, 1954, and taxable years beginning after Mar. 31, 1954.

Subsec. (b) (3) added by act Oct. 20, 1951, § 311 (a). Subsec. (h) (1), amended by acts Oct. 20, 1951, § 122 (b) and Jan. 3, 1951, § 202 (a). Act Oct. 20, 1951, reduced the credit allowable for taxable year beginning on Jan. 1, 1951, and ending on Dec. 31, 1951 from 30 percent to 28 percent, for taxable years beginning Mar. 31, 1951 and ending before Apr. 1, 1954 one more percentage point to 27 percent, and to increase the credit allowable for taxable years beginning after Mar. 31, 1954 by three percentage points to 30 percent. Act Jan. 3, 1951, reduced the credit allowable on taxable years beginning after June 30, 1950, one percentage point from 31 per centum to 30 per centum.

Subsec. (1) amended by acts Oct. 20, 1951, § 122 (c) and Jan. 3, 1951, § 202 (b). Act Oct. 20, 1951, reduced the credit allowable for calendar year 1951 to 28 percent from 30 percent, to further reduce it to 27 percent for taxable years beginning after Mar. 31, 1951 and before Apr. 1, 1954, and to increase it to 30 percent for taxable years beginning after Mar. 31, 1954. Act Jan. 3, 1951 reduced the credit allowable 1 percentage point from 31 per centum to 30 per centum.

1950 Subsec. (b) amended by act Sept. 23, 1950, § 122 (a), to state what the sum of the dividends-received credit shall be and that it shall apply to dividends received after Aug. 31, 1950.

Subsec. (h) (1) amended by act Sept. 23, 1950, § 122 (b), to provide that, for the calendar year 1950, the credit is to amount equal to 33% of the lesser of (1) the amount of dividends paid on the preferred stock of the public-utility company, or (2) the excess of the adjusted net income of the public-utility company over its dividends-received credit for such taxable year.

Subsec. (h) (2) amended by act Sept. 23, 1950, § 121 (§ (1), which substituted "As used in this subsection, su section (b), and sections 13 and 15" in lieu of “As used this subsection and section 15 (a)."

Subsec. (1) added by act Sept. 23, 1950, § 122 (c). 1945 Subsec. (b) amended by act Nov. 8, 1945, § 1 (g) (4), which struck out "reduced by the credit for i come subject to the tax imposed by Subchapter E Chapter 2 provided in subsection (e)".

Subsec. (e) repealed by act Nov. 8, 1945, § 122 (g) (1), 1944 Subsec. (e) amended by act Feb. 25, 1944, whi struck out "90 per centum" and inserted "95 per centur Subsec. (h) (1) amended by act Feb. 25, 1944, whi inserted second sentence.

Subsec. (h) (2) (B) amended by act Feb. 26, 1944, whi inserted last sentence.

1942 Subsecs. (a), (b), (c) (1, 2) amended and subse (c) (2) (C), (e–h) added by act Oct. 21, 1942. 1939

Subsec. (c) (2) amended by act June 29, 1939. EFFECTIVE DATE OF 1951 AMENDMENTS Amendment of subsec. (b) (3) made applicable o with respect to taxable years beginning after Dec. 1950 by section 311 (c) of act Oct. 20, 1951.

Amendment of subsecs. (b) (1), (2), (h), and (i) applicable only with respect to taxable years beginn after Mar. 31, 1951, and to taxable years beginning Jan. 1, 1951, and ending on Dec. 31, 1951, see note out under section 13 of this title.

Section 202 (c) of act Jan. 3, 1951, provided that amendments of subsecs. (h) (1) (B) and (1) (1) sho be applicable with respect to taxable years beginning or after July 1, 1950.

EFFECTIVE DATE OF 1950 AMENDMENT Amendment of section by act Sept. 23, 1950, as ap cable only with respect to taxable years ending after 31, 1950, see note set out under section 13 of this title EFFECTIVE DATE OF 1945 AMENDMENT Act Nov. 8, 1945, was made applicable to taxable y beginning after Dec. 31, 1945, by section 122 (g) ther EFFECTIVE DATE OF 1944 AMENDMENT

Act Feb. 25, 1944, § 202 (c), was made applicabl taxable years beginning after Dec. 31, 1943, by section thereof.

Act Feb. 25, 1944, § 116 (a, b), was made applicabl taxable years beginning after Dec. 31, 1943, by section thereof.

EFFECTIVE DATE OF 1942 AMENDMENT Amendments of subsecs. (a), (b), (e)-(h), by Oct. 21, 1942, §§ 126 (1) (2), 105 (e), (d), 133, were applicable to taxable years beginning after Dec. 31, by section 101 thereof.

Amendment of subsec. (c) by act Oct. 21, 1942, made effective by section 132 (e) thereof, as follows "(e) The amendments made by this section (to sec 26 (c), 27 (b, c), 504 (a)) shall be applicable only respect to taxable years beginning after December 31, but shall be applicable in the computations with re to previous taxable years for the purpose of ascerta the amount of any dividend carry-over from such vious taxable years."

SIMILAR PROVISIONS

1936-June 22, 1936, ch. 690, § 26, 49 Stat. 1664. 1934 May 10, 1934, ch. 277, § 26, 48 Stat. 693. 1932-June 6, 1932, ch. 209, § 26, 47 Stat. 185. 1928-May 29, 1928, ch. 852, § 26, 45 Stat. 803. 1926-Feb. 26, 1926, ch. 27, § 236, 44 Stat. 43. 1924-June 2, 1924, ch. 234, § 236, 43 Stat. 285. 1921-Nov. 23, 1921, ch. 136, § 236, 42 Stat. 257. 1919-Feb. 24, 1919, ch. 18, § 236, 40 Stat. 1080.