Sec. 26. (b) Dividends received. -85 per centum of the amount received as dividends from a domestic corporation which is subject to taxation under this chapter, but not in excess of 85 per centum of the adjusted net income. The credit allowed by this subsection shall not be allowed in respect of dividends received from a corporation organized under the China Trade Act, 1922, 42 Stat. 849 (U. S. C., Title 15, c. 4), or from a corporation which under section 251 is taxable only on its gross income from sources within the United States by reason of its receiving a large percentage of its gross income from sources within a possession of the United States.

Sec. 26. (c) Net operating loss of preceding year.—

Taxable Years Beginning in 1948

Sec. 26. (a) Interest on obligations of the United States and its instrumentalities.

Same as 1944.

Sec. 26. (b) Dividends received. Same as 1946 and 1947.

Sec. 26. (c) Net operating loss of preceding year.

Sec. 26. (c) (1) Amount of

Sec. 26. (c) (1) Amount of credit.-The amount of net oper- credit. ating 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 Subchapter A net income

Same as 1944.

Taxable Years Beginning in 1946 and 1947

Sec. 26. (a) Interest on obligations of the United States and its instrumentalities.

Same as 1944.

Sec. 26. (b) Dividends received. -85 per centum of the amount received as dividends from a domestic corporation which is subject to taxation under this chapter, but not in excess of 85 per centum of the adjusted net income reduced by the eredit for income subject to the tax imposed by subchupter I of chapter 2 provided in sulmuestion (e) The credit allowed

by this subsection shall not be allowed in respect of dividends received from a corporation organized under the China Trade Act, 1922, 42 Stat. 849 (U. S. C., Title 15, c. 4), or from a corporation which under section 251 is taxable only on its gross income from sources within the United States by reason of its receiving a large percentage of its gross income from sources within a possession of the United States.

Sec. 26 (b), I. R. C., supra, amended by Sec. 122 (g) (4), R. A. of 1945, by striking out language shown in strickenthrough type. Sec. 122 (g) of said Act makes amendment applicable to taxable years beginning after Dec. 31, 1945.

Sec. 26. (c) Net operating loss of preceding year.

Sec. 26. (c) (1) Amount of credit.

Same as 1944.

Taxable Years Beginning in 1945

Sec. 26. (a) Interest on obligations of the United States and its instrumentalities.

Same as 1944.

Sec. 26. (b) Dividends received.

Same as 1944.

Sec. 26. (b) Dividends received. -85 per centum of the amount received as dividends from a domestic corporation which is subject to taxation under this chapter, but not in excess of 85 per centum of the adjusted net income reduced by the credit for income subject to the tax imposed by Subchapter E of Chapter 2 provided in subsection (e). The credit allowed by this subsection shall not be allowed in respect of dividends received from a corporation organized under the China Trade Act, 1922, 42 Stat. 849 (U. S. C., Title 15, c. 4), or from a corporation which under section 251 is taxable only on its gross income from sources within the United States by reason of its receiving a large percentage of its gross income from sources within a possession of the United States.

Taxable Years Beginning before 1944

Sec. 26. (a) Interest on obligations of the United States and its instrumentalities.

Section originated 1918 as
Sec. 236 (a), R. A. of 1918.
For any amendments prior to
1944, see-

Second Edition, p. 218,
Eighth Edition, p. 70,
Ninth Edition, p. 110.

Sec. 26. (b) Dividends received.
Section originated 1918 as
Sec. 234 (a) (6), R. A. of 1918.
For any amendments prior to
1944, see-

Second Edition, p. 198,
Eighth Edition, p. 70,
Ninth Edition, p. 110.

Sec. 26. (c) Net operating loss of preceding year.

Sec. 26. (c) (1) Amount of credit.

Same as 1944.

Sec. 26. (c) Net operating loss of preceding year.

Sec. 26. (c) (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 Subchapter A

Sec. 26. (c) Net operating loss of preceding year.

Sec. 26. (c) (1) Amount of credit.

Section originated 1918 as
Sec. 204 (b), R. A. of 1918.
For any amendments prior to
1944, see-

Second Edition, p. 42,
Eighth Edition, p. 70.
Ninth Edition, p. 112.

Taxable Years Beginning in 1949

for the taxable year, in the case of the tax imposed under Subchapter A.

Sec. 26. (c) (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.

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

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.

Sec. 26. (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.

Taxable Years Beginning in 1945

Sec. 26. (c) (2) Definition. Same as 1944.

Sec. 26. (d) Bank affiliates. Same as 1944.

Taxable Years Beginning in 1944

net income for the taxable year, in the case of the tax imposed under Subchapter A.

Sec. 26. (c) (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.

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

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.

Sec. 26. (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.

Taxable Years Beginning before 1944

Sec. 26. (c) (2) Definition.
Section originated 1918 as
Sec. 204 (a), R. A. of 1918.
For any amendments prior to
1944, see

Second Edition, p. 40,
Eighth Edition, p. 70,
Ninth Edition, p. 112.

Sec. 26. (d) Bank affiliates.

Section originated 1936 as
Sec. 26 (d), R. A. of 1936.
For any amendments prior to
1944, see-

Eighth Edition, p. 74,
Ninth Edition, p. 114.