Taxable Years Beginning in 1945 Sec. 26. (e) Income subject to excess-profits tax. Same as 1944. Sec. 26. (f) Dividends paid credit. Same as 1944. Sec. 26. (g) Consent dividends credit. Same as 1944. Sec. 26. (h) Credit for dividends paid on certain preferred stock. Sec. 26 (h) (1) Amount of credit. Same as 1944. Taxable Years Beginning in 1944 Sec. 26. (e) Income subject to excess-profits tax.-In the case of any corporation subject to the tax imposed by Subchapter E of Chapter 2, an amount equal to its adjusted excess-profits net income (as defined in section 710 (b)). In the case of any corporation computing such tax under section 721 (relating to abnormalities in income in the taxable period), section 726 (relating to corporations completing contracts under the Merchant Marine Act of 1936), section 731 (relating to corporations engaged in mining strategic minerals), or section 736 (b) (relating to corporations with income from longterm contracts), the credit shall be the amount of which the tax imposed by such subchapter is 90 95 per centum. For the purpose of the preceding sentence the term "tax imposed by Subchapter E of Chapter 2" means the tax computed without regard to the limitation provided in section 710 (a) (1) (B) (the 80 per centum limitation), without regard to the credit provided in section 729 (c) and (d) for foreign taxes paid, and without regard to the adjustments provided in section 734. This subsection shall not apply to any corporation exempt from such tax under section 725 or section 727. Sec. 26 (e), I. R. C., supra, amended by Sec. 202 (c), R. A. of 1943, by striking out "90" and inserting in lieu thereof "95". Sec. 201 of said Act makes amendment applicable to taxable years beginning after Dec. 31, 1943. Sec. 26. (f) Dividends paid credit. For corporation dividends paid credit, see section 27. Sec. 26. (g) Consent dividends credit. For corporation consent dividends credit, see section 28. Sec. 26. (h) Credit for dividends paid on certain preferred stock. Sec. 26. (h) (1) Amount of credit.-In the case of a public utility, the amount of dividends paid during the taxable year on its preferred stock. For the purposes of the credit provided in this sub Taxable Years Beginning in 1949 section 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. Sec. 26. (h) (2) Definitions.-As used in this subsection and section 15 (a) (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 Octoer 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 Taxable Years Beginning in 1945 Sec. 26. (h) (2) Definitions. Same as 1944. Taxable Years Beginning in 1944 section 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. Sec. 26. (h) (2) Definitions.-As used in this subsection and section 15 (a) (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 Taxable Years Beginning before 1944 Sec. 26. (h) (2) Definitions. Ninth Edition, p. 118. Taxable Years Beginning in 1949 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. Taxable Years Beginning in 1945 Sec. 27. Corporation dividends paid credit. Sec. 27. (a) Definition in general. Same as 1944. Taxable Years Beginning in 1944 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. Sec. 26 (h) (1), I. R. C., supra, amended by Sec. 116 (a), and Sec. 26 (h) (2), I. R. C., supra, amended, by Sec. 116 (b), R. A. of 1943, by adding language in italics. Sec. 101 of said Act makes amendment applicable to taxable years beginning after Dec. 31, 1943. Sec. 27. Corporation dividends paid credit. Sec. 27. (a) Definition in general.-As used in this chapter with respect to any taxable year the term "dividends paid credit" means the sum of: Taxable Years Beginning before 1944 Sec. 27. Corporation dividends paid credit. Sec. 27. (a) Definition in general. Section originated 1936 as For any amendments prior to Eighth Edition, p. 74, Sec. 27. (a) (1) The basic surtax credit for such year, computed as provided in subsection (b); Sec. 27. (a) (2) The dividend carry-over to such year, computed as provided in subsection (c); Sec. 27. (a) (3) The amount, if any, by which any deficit in the accumulated earnings and profits, as of the close of the preceding taxable year (whether beginning on, before, or after January 1, 1939), exceeds the amount of the credit provided in section 26 (c) (relating to net operating losses), for such preceding taxable year (if beginning after December 31, 1937); and |