Taxable Years Beginning in 1949 Sec. 27 (a) (4) Amounts used or irrevocably set aside to pay or to retire indebtedness of any kind, if such amounts are reasonable with respect to the size and terms of such indebtedness. As used in this paragraph the term "indebtedness" means only an indebtedness of the corporation existing at the close of business on December 31, 1937, and evidenced by a bond, note, debenture, certificate of indebtedness, mortgage, or deed of trust, issued by the corporation and in existence at the close of business on December 31, 1937, or by a bill of exchange accepted by the corporation prior to, and in existence at the close of business on such date. Where the indebtedness is for a principal sum, with interest, no credit shall be allowed under this paragraph for amounts used or set aside to pay such interest. A renewal (however evidenced) of an indebtedness shall be considered an indebtedness. Sec. 27. (b) Basic surtax credit. -As used in this chapter the term "basic surtax credit" means the sum of: Sec. 27. (b) (1) The dividends paid during the taxable year, increased by the consent dividends credit provided in section 28, and reduced by the amount of the credit provided in section 26 (a), relating to interest on certain obligations of the United States and Government corporations; Sec. 27. (b) (2) The net operating loss credit provided in section 26 (c) (1); Sec. 27. (b) (3) The bank affiliate credit provided in section 26 (d). The aggregate of the amounts under paragraphs (2) and (3) shall not exceed (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 for the taxable year, in the case of the tax imposed under Subchapter A. Taxable Years Beginning in 1945 Sec. 27. (b) Basic surtax credit. Same as 1944. Taxable Years Beginning in 1944 Sec. 27 (a) (4) Amounts used or irrevocably set aside to pay or to retire indebtedness of any kind, if such amounts are reasonable with respect to the size and terms of such indebtedness. As used in this paragraph the term "indebtedness" means only an indebtedness of the corporation existing at the close of business on December 31, 1937, and evidenced by a bond, note, debenture, certificate of indebtedness, mortgage, or deed of trust, issued by the corporation and in existence at the close of business on December 31, 1937, or by a bill of exchange accepted by the corporation prior to, and in existence at the close of business on such date. Where the indebtedness is for a principal sum, with interest, no credit shall be allowed under this paragraph for amounts used or set aside to pay such interest. A renewal (however evidenced) of an indebtedness shall be considered an indebtedness. Sec. 27. (b) Basic surtax credit. -As used in this chapter the term "basic surtax credit" means the sum of: Sec. 27. (b) (1) The dividends paid during the taxable year, increased by the consent dividends credit provided in section 28, and reduced by the amount of the credit provided in section 26 (a), relating to interest on certain obligations of the United States and Government corporations; Sec. 27. (b) (2) The net operating loss credit provided in section 26 (c) (1); Sec. 27. (b) (3) The bank affiliate credit provided in section 26 (d). The aggregate of the amounts under paragraphs (2) and (3) shall not exceed (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 for the taxable year, in the case of the tax imposed under Subchapter A. Taxable Years Beginning before 1944 Sec. 27. (b) Basic surtax credit. Eighth Edition, p. 76, Taxable Years Sec. 27. (c) Dividend carryover.-There shall be computed with respect to each taxable year of a corporation a dividend carryover to such year from the two preceding taxable years, which shall consist of the sum of Sec. 27. (c) (1) The amount of the basic surtax credit for the second preceding taxable year, reduced by the Subchapter A net income for such year, and further reduced by the amount, if any, by which the Subchapter A net income for the first preceding taxable year exceeds the sum of (A) The basic surtax credit for such year; and (B) The excess, if any, of the basic surtax credit for the third preceding taxable year over the Subchapter A net income for such year; and Taxable Years Sec. 27. (c) Dividend carryover. Sec. 27. (d) Dividends in kind. Sec. 27. (e) Dividends in obli Same as 1944. Sec. 27. (e) Dividends in obligations of the corporation.-If a gations of the corporation. dividend is paid in obligations of the corporation, the amount with respect thereto which shall be used in computing the basic surtax credit shall be the face value of the obligations, or their fair market value at the time of the payment, | Taxable Years Beginning in 1946 and 1947 Sec. 27. (c) Dividend carry over. Same as 1944. Sec. 27. (d) Dividends in kind. Same as 1944. Sec. 27. (e) Dividends in obligations of the corporation. Same as 1944. Taxable Years Sec. 27. (c) Dividend carry over. Same as 1944. Sec. 27. (d) Dividends in kind. Sec. 27. (e) Dividends in obligations of the corporation. Same as 1944. Sec. 27. (c) Dividend carry- Sec. 27. (c) Dividend carryover.-There shall be computed over. with respect to each taxable year of a corporation a dividend carryover to such year from the two preceding taxable years, which shall consist of the sum of Sec. 27. (c) (1) The amount of the basic surtax credit for the second preceding taxable year, reduced by the Subchapter A net income for such year, and further reduced by the amount, if any, by which the Subchapter A net income for the first preceding taxable year exceeds the sum of (A) The basic surtax credit for such year; and (B) The excess, if any, of the basic surtax credit for the third preceding taxable year over the Subchapter A net income for such year; and Sec. 27. (c) (2) The amount, if any, by which the basic surtax credit for the first preceding taxable year exceeds the Subchapter A net income for such year. In the case of a preceding taxable year referred to in this subsection, the Subchapter A net income shall be determined as if the corporation was, under the law applicable to such taxable year, a personal holding company. Sec. 27. (d) Dividends in kind. -If a dividend is paid in property other than money (including stock of the corporation if held by the corporation as an investment) the amount with respect thereto which shall be used in computing the basic surtax credit shall be the adjusted basis of the property in the hands of the corporation at the time of the payment, or the fair market value of the property at the time of the payment, whichever is the lower. Sec. 27 (e) Dividends in obligations of the corporation.-If a dividend is paid in obligations of the corporation, the amount with respect thereto which shall be used in computing the basic surtax credit shall be the face value of the obligations, or their fair market value at the time of the pay Section originated 1936 as Eighth Edition, p. 76, Sec. 27. (d) Dividends in kind. Eighth Edition, p. 78, Sec. 27 (e) Dividends in obligations of the corporation. Section originated 1936 as Eighth Edition, p. 78, Taxable Years whichever is the lower. If the fair market value of any such dividend paid in any taxable year of the corporation beginning after December 31, 1935, is lower than the face value, then when the obligation is redeemed by the corporation the excess of the amount for which redeemed over the fair market value at the time of the dividend payment (to the extent not allowable as a deduction in computing net income for any taxable year) shall be treated as a dividend paid in the taxable year in which the redemption occurs. Sec. 27. (f) Taxable stock dividends.-In case of a stock dividend or stock right which is a taxable dividend in the hands of shareholders under section 115 (f), the amount with respect thereto which shall be used in computing the basic surtax credit shall be the fair market value of the stock or the stock right at the time of the pay ment. Same as 1944. Sec. 27. (g) Distributions in Sec. 27. (g) Distributions in liquidation. In the case of liquidation. amounts distributed in liquidation the part of such distribution which is properly chargeable to the earnings or profits accumulated after February 28, 1913, shall, for the purposes of computing the basic surtax credit under this section, be treated as a taxable dividend paid. Sec. 27. (h) Preferential divi- Sec. 27. (h) Preferential divi Same as 1944. dends.-The amount of any distri- dends. For a distribution made in connection with a consent distribution, see section 28. Sec. 27. (g) Distributions in liquidation. Same as 1944. Sec. 27. (h) Preferential dividends. Same as 1944. |