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Sec. 206(a)(1), RA of 1950, amended clauses (i) and (ii) of Sec. 112(b)(7) (A), IRC, to read as follows:

"(i) the liquidation is made in pursuance of a plan of liquidation adopted after December 31, 1950, whether the taxable year of the corporation began on, before, or after January 1, 1951; and

"(ii) the distribution is in complete cancellation or redemption of all the stock, and the transfer of all the property under the liquidation occurs within some one calendar month in 1951-".

Sec. 206(c), RA of 1950, makes amendment applicable to taxable years ending after Dec. 31, 1950.

SECTION 112(b) (7) (B) - AMENDED.

Sec. 206(a)(2), RA of 1950, amended Sec. 112(b) (7) (B) by striking out "December 10, 1943" and inserting in lieu thereof "August 15, 1950."

Sec. 206(c), RA of 1950, makes amendment applicable to taxable years ending after Dec. 31, 1950.

SECTION 112(b) (7) (E) AMENDED.

Sec. 206(a)(2), RA of 1950, amended clause (ii) of Sec. 112(b) (7) (E), IRC, by striking out "December 10, 1943" and inserting in lieu thereof "August 15, 1950".

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Sec. 206 (a)(2), RA of 1950, amended Sec. 117(b) (7) (F) (i), IRC, by striking out "December 10, 1943" and inserting in lieu thereof "August 15, 1950".

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Sec. 206(b), RA of 1950, amended Sec. 113 (a) (18), IRC, by inserting after the word "Chapter" the following:

"(whether before or after its amendment by the Revenue Act of 1950)".

Sec. 206(c), RA of 1950, makes amendment applicable to taxable years ending after Dec. 31, 1950.

SECTION 113(b)(1)(A) - AMENDED.

Sec. 204(b), RA of 1950, amended Sec. 113(b)(1)(A), IRC, by inserting after "carrying charges" the following:

", or for expenditures described in section 23 (bb),".

Sec. 204(c), RA of 1950, provides that the amendment shall be applicable with respect to taxable years beginning after December 31, 1945, except that in the case of any taxable year beginning prior to January 1, 1950

(1) the amendments shall not be applicable with respect to expenditures for which a deduction was not allowed the taxpayer for such year, if allowance of credit or refund with respect to such year is barred on the date of the enactment of this Act by reason of any law or rule of law; and

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Sec. 203(b)(1), RA of 1950, amended Sec. 113(b) (1) by adding at the end thereof the following:

"(I) in the case of any short-term municipal bond (as defined in section 22 (o)), to the extent provided in section 22 (0) (1) (B).”

Sec. 203(c), RA of 1950, makes amendment applicable to taxable years ending after June 30, 1950, but in the case of a taxable year beginning before and ending after such date, the amendment applies only with respect to obligations acquired after such date.

SECTION 114(b)(4) (B) - AMENDED.

Sec. 207(a), RA of 1950, amended the second sentence of Sec. 114(b)(4) (B), IRC, to read as follows:

"The term 'mining'

as used herein shall be considered to include not merely the extraction of the ores or minerals from the ground but also the ordinary treatment processes normally applied by mine owners or operators in order to obtain the commercially marketable mineral product or products, and so much of the transportation of ores or minerals (whether or not by common carrier) from the point of extraction from the ground to the plants or mills in which the ordinary treatment processes are applied thereto as is not in excess of 50 miles unless the Secretary finds that the physical and other requirements are such that the ore or mineral must be transported a greater distance to such plants or mills."

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Sec. 208, RA of 1950, amended Sec. 115 (g), IRC, to read as follows:

"(g) REDEMPTION OF STOCK.

"(1) IN GENERAL.-If a corporation cancels or redeems its stock (whether or not such stock was issued as a stock dividend) at such time and in such manner as to make the distribution and cancellation or redemption in whole or in part essentially equivalent to the distribution of a taxable dividend, the amount so distributed in redemption or cancellation of the stock, to the extent that it represents a distribution of earnings or profits accumulated after February 28, 1913, shall be treated as a taxable dividend.

"(2) REDEMPTION THROUGH USE OF SUBSIDIARY CORPORATION.If stock of a corporation (hereinafter referred to as the issuing corporation) is acquired by another corporation (hereinafter referred to as the acquiring corporation) and the issuing corporation controls (direetly or indirectly) the acquiring corporation, the amount paid for the acquisition of the stock shall constitute a taxable dividend from the issuing corporation to the extent that the amount paid for such stock would have been considered, under paragraph (1), as essentially equivalent to a taxable dividend if such amount had been distributed by the acquiring corporation to the issuing corporation and had been applied by the issuing corporation in redemption of its stock. For the purposes of this paragraph, control means the ownership of stock possessing at least 50 per centum of the total combined voting power of all classes of stock entitled to vote or at least 50 per centum of the total value of shares of all classes of stock of the corporation."

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Sec. 208(b), RA of 1950, makes amendment applicable to taxable years ending after Aug. 31, 1950, but such amendment applies only to amounts received after such date.

SECTION 115(g) (3) - NEW.

Sec. 209, RA of 1950, amended Sec. 115(g), IRC, by adding at the end thereof the following:

"(3) REDEMPTION OF STOCK TO PAY DEATH TAXES.-The provisions of this subsection shall not apply to such part of any amount so distributed with respect to stock the value of which is included in determining the value of the gross estate of a decedent in accordance with section 811, as is distributed after such decedent's death and within the period of limitations for the assessment of estate tax provided in section 874 (a) (determined without the application of section 875) or within 90 days after the expiration of such period, and as is not in excess of the estate, inheritance, legacy, and succession taxes (including any interest collected as a part of such taxes) imposed because of such decedent's death: Provided, That the value of the stock in such corporation for estate tax purposes comprises more than 50 per centum of the value of the net estate of such decedent."

Sec. 209(b), RA of 1950, makes amendment applicable to taxable years ending on or after Sept. 23, 1950, but amendment applies only to amounts distributed on or after such date.

SECTION 116 (1) - NEW.

Sec. 221(c), RA of 1950, amended Sec. 116, IRC, by adding at the end thereof the following:

"(1) INCOME FROM SOURCES WITHIN PUERTO RICO.—

"(1) RESIDENT OF PUERTO RICO FOR ENTIRE TAXABLE YEAR.—In the case of an individual who is a bona fide resident of Puerto Rico during the entire taxable year, income derived from sources within Puerto Rico (except amounts received for services performed as an employee of the United States or any agency thereof); but such individual shall not be allowed as a deduction from his gross income any deductions properly allocable to or chargeable against amounts excluded from gross income under this paragraph.

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