Act of 1924. Act of 1921. Act of 1918. SEC. 234. (a) (3) Taxes paid SEC. 234. (a) (3) Taxes paid SEC. 234. (a) (3) Taxes paid or accrued within the taxable or accrued within the taxable or accrued257 within the taxable year except (A) income, war-year except (a) income, war- year imposed (a) by the authorprofits, and excess-profits taxes profits, and excess-profits taxes ity of the United States, except imposed by the authority of the imposed by the authority of the income, war-profits and excessUnited States, (B) so much of United States, (b) so much of profits taxes; or (b) by the authe income, war-profits and ex- the income, war-profits and ex- thority of any of its possessions, cess-profits taxes imposed by the cess-profits taxes imposed by the except the amount of income, authority of any foreign country authority of any foreign country war-profits and excess-profits or possession of the United or possession of the United States taxes allowed as a credit under States as is allowed as a credit as is allowed as a credit under section 238;259 or (c) by the auunder section 238,259 and (C) section 238,259 and (c) taxes as- thority of any State or Territory, taxes assessed against local bene- sessed against local benefits of or any county, school district, fits of a kind tending to increase a kind tending to increase the municipality, or other taxing the value of the property as- value of the property assessed. subdivision of any State or Tersessed. In the case of obligors In the case of obligors specified ritory, not including those asspecified in subdivision (b) of in subdivision (b) of section sessed against local benefits of section 221260 no deduction for 221260 no deduction for the pay- a kind tending to increase the the payment of the tax imposed ment of the tax imposed by this value of the property assessed; by this title, or any other tax title, or any other tax paid pur- or (d) in the case of a domestic paid pursuant to the tax-free suant to the contract or provision corporation, by the authority of covenant clause, shall be al- referred to in that subdivision, any foreign country, except the lowed, nor shall such tax be in- shall be allowed, nor shall such amount of income, war-profits cluded in the gross income of tax be included in the gross in- and excess-profits taxes allowed the obligee. The deduction al- come of the obligee. The deduc- as a credit under section 238; lowed by this paragraph shall tion allowed by this paragraph or (e) in the case of a foreign be allowed in the case of taxes shall be allowed in the case of corporation, by the authority of imposed upon a shareholder of taxes imposed upon a share- any foreign country (except ina corporation upon his interest holder or member of a corpora- come, war-profits and excessas shareholder, which are paid tion upon his interest as profits taxes, and taxes assessed by the corporation without re- shareholder or member, which against local benefits of a kind imbursement from the share- are paid by the corporation with- tending to increase the value of holder, but in such cases out reimbursement from the the property assessed), upon the deduction shall be allowed the shareholder or member, but in property or business: Provided, shareholder for the amount of such cases no deduction shall be That in the case of obligors specisuch taxes. For the purpose of allowed the shareholder or mem- fied in subdivision (b) of secthis paragraph, estate, inherit- ber for the amount of such taxes. tion 221 no deduction for the ance, legacy, and succession taxes For the purpose of this para- payment of the tax imposed by accrue on the due date thereof graph, estate, inheritance, lega- this title or any other tax paid except as otherwise provided by cy, and succession taxes accrue pursuant to the contract or prolaw of the jurisdiction imposing on the due date thereof except vision referred to in that subdisuch taxes; as otherwise provided by the law vision, shall be allowed; of the jurisdiction imposing such taxes; no SEC. 234. (a) (4) Losses sus- SEC. 234. (a) (4) Losses sus- SEC. 234. (a) (4) Losses sustained during the taxable year tained during the taxable year tained during the taxable year and not compensated for by in- and not compensated for by in- and not compensated for by insurance or otherwise. No de-surance or otherwise; unless, insurance or otherwise; duction shall be allowed under order to clearly reflect the inthis paragraph for any loss come, the loss should in the opin 257 (a) A tax accrues so as to be deductible from income reported on an accrual basis under the Act of 1918, when it becomes a liability of the taxpayer. Ed. Schuster & Co. v. Williams (Col.), (C. C. A., Seventh Cir. 1922) 283 Fed. 115. 257 (b) The bonus tax levied by the Wisconsin Soldiers' Bonus Act, which became effective in October, 1919, accrued in 1919 and not in 1918. It was not deductible from the income for 1918, which was returned on an accrual basis, although the bonus tax was in part a surtax based on the income for 1918 returned under the State income tax law. Ed. Schuster & Co. v. Williams (Col.), (C. C. A., Seventh Cir. 1922) 283 Fed. 115. 258 State, county and municipal taxes paid by a bank under Sec. 8 of Chapter 5596 of the Laws of Florida, Act of 1917. SEC. 12. (a) "Fourth. Taxes paid within the year imposed by the authority of the United States (except income and excess profits taxes), or of its Territories, or possessions, or any foreign country, or by the authority of any State, county, school district, or municipality, or other taxing subdivision of any State, not including those assessed against local benefits." SEC. 12. (a) Fourth. Taxes G. (b) [5] (fourth) all sums paid within the year imposed by paid by it within the year for the authority of the United taxes258 imposed under the auStates, or its Territories, or pos- thority of the United States or sessions, or any foreign country, of any State or Territory thereor under the authority of any of, or imposed by the GovernState, county, school district, or ment of any foreign country: municipality, or other taxing subdivision of any State, not including those assessed against local benefits. SEC. 12. (a) Second. [1] All losses actually sustained and charged off within the year and not compensated by insurance or otherwise, including SEC. 12. (a) Second. [1] All G. (b) [3] [a] (second) all losses actually sustained and charged off within the year and not compensated by insurance or otherwise, including losses261 actually sustained within the year and not compensated by insurance or otherwise, including are taxes paid by the bank and not by the stockholders of the bank. Hence, such payments are deductible by the bank as taxes paid under the Acts of 1909 and 1913. U. S. v. Guaranty Trust & Savings Bank, (D. C., S. D. Florida 1918) 253 Fed. 291. 259 Sec. 238, p. 222. 260 Sec. 221, p. 146. 261 A taxpayer was entitled under Sec. 2 B, subdivision 5, of the Act of 1913, to deduct as a loss, fivesixths of the value of corporate bonds owned by him on March 1, 1913 and charged off as worthless on December 31, 1913. The value of the bonds on March 1, 1913, was irrelevant. Plant v. Walsh (Col.), (D. C., D. Conn. 1922) 280 Fed. 722, Act of 1924. Act of 1921. Act of 1918. allowed for any loss claimed to claimed to have been sustained ion of the Commissioner be SEC. 234. (a) (5) Debts ascertained to be worthless and charged off within the taxable year (or in the discretion of the Commissioner, a reasonable addition to a reserve for bad debts); and when satisfied that a debt is recoverable only in part, the Commissioner may allow such debt to be charged off in part; from destruction of or damage SEC. 234. (a) (5) Debts ascer- SEC. 234. (a) (5) Debts ascertained to be worthless and charged off within the taxable year; SEC. 234. (a) (6) The amount received as dividends (A) from a domestic corporation other SEC. 234. (a) (6) The amount SEC. 234. (a) (6) Amounts rethan a corporation entitled to received as dividends (A) from ceived as dividends from a corthe benefits of section 262,262 and a domestic corporation other poration which is taxable under than a corporation entitled to this title upon its net income, the benefits of section 262,262 or and amounts received as divi(B) from any foreign corpora- dends from a personal service tion when it is shown to the corporation out of earnings or satisfaction of the Commissioner profits upon which income tax that more than 50 per centum of has been imposed by Act of Conthe gross income of such foreign gress; other than a corporation organized under the China Trade Act, 1922, or (B) from any foreign corporation when it is shown to the satisfaction of the Commissioner that more than 50 per centum of the gross income 262 (a) Sec. 262, p. 268. 262 (b) Sec. 234 (a) (6) of the Act of 1921, amended by the Act of Sept. 19, 1922, by inserting after the word and figures section 262" a comma and the 66 Act of 1917. Act of 1916. words and other than a corporation organized under the China Trade Act, 1922," Act of 1913. Act of 1924. Act of 1921. Act of 1918. of such foreign corporation for corporation for the three-year the three-year period ending period ending with the close of with the close of its taxable year its taxable year preceding the preceding the declaration of declaration of such dividends (or such dividends (or for such part for such part of such period as of such period as the foreign the foreign corporation has been corporation has been in exist- in existence) was derived from ence) was derived from sources sources within the United States within the United States as de- as determined under section termined under section 217;263 217;263 SEC. 234. (a) (7) A reasonable allowance for the exhaus- allowance for the exhaustion, able allowance for the exhaus tion, wear and tear of property used in the trade or business, including a reasonable allowance for obsolescence; SEC. 234. (a) (7) A reasonable wear and tear of property used SEC. 234. (a) (7) A reason tion, wear and tear of property used in the trade or business, including a reasonable allowance for obsolescence; SEC. 234. (a) (8) In the case SEC. 234. (a) (8) In the case of buildings, machinery, equip- of buildings, machinery, equipment, or other facilities, con- ment, or other facilities, constructed, erected, installed, or structed, erected, installed, or acquired, on or after April 6, acquired, on or after April 6, 1917, for the production of arti- 1917, for the production of articles contributing to the prosecu- cles contributing to the prosecution of the war against the Ger- tion of the present war, and in man Government, and in the case the case of vessels constructed or of vessels constructed or acquired acquired on or after such date on or after such date for the for the transportation of articles transportation of articles or men or men contributing to the proscontributing to the prosecution ecution of the present war, there of such war, there shall be al- shall be allowed a reasonable delowed, for any taxable year end- duction for the amortization of ing before March 3, 1924 (if such part of the cost of such claim therefor was made at the facilities or vessels as has been time of filing return for the tax- borne by the taxpayer, but not able year 1918, 1919, 1920, or again including any any amount 1921) a reasonable deduction for otherwise allowed under this title the amortization of such part of or previous Acts of Congress as the cost of such facilities or ves- a deduction in computing net insels as has been borne by the tax- come. At any time within three payer, but not again including years after the termination of any amount otherwise allowed the present war the Commisunder this title or previous Acts sioner may, and at the request of of Congress as a deduction in the taxpayer shall, reexamine the computing net income. At any return, and if he then finds as a time before March 3, 1924, the result of an appraisal or from Commissioner may, and at the other evidence that the deducrequest of the taxpayer shall, re- tion originally allowed was inexamine the return, and if he correct, the taxes imposed by this then finds as a result of an ap- title and by Title III for the year 263 Sec. 217, p. 120. 264 Sec. 252, p. 302. |