If the surtax net income is: Over $32,000 but not over

$38,000.

Over $38,000 but not over $44,000. Over $44,000 but not over $50,000.

Over $50,000 but not over $60,000.

Over $60,000 but not over $70,000.

Over $70,000 but not over $80,000.

Over $80,000 but not over $90,000.

Over $90,000 but not over $100,000.

Over $100,000 but not over $150,000. Over $150,000 but not over $200,000. Over $200,000‒‒‒

The surtax shall be: $13,500, plus 62% of ex

cess over $32,000. $17,220, plus 66% of ex

cess over $38,000. $21,180, plus 69% of ex

cess over $44,000. $25,320, plus 72% of ex

cess over $50,000. $32,520, plus 75% of ex

cess over $60,000. $40,020, plus 78% of ex

cess over $70,000. $47,820, plus 81% of ex

cess over $80,000. $55,920, plus 84% of ex

cess over $90,000. $64,320, plus 86% of excess over $100,000. $107,320, plus 87% of excess over $150,000. $150,820, plus 88% of excess over $200,000.

If the surtax net income is: Not over $2,000‒‒‒

Over $2,000 but not over $4,000.

Over $4,000 but not over $6,000.

Over $6,000 but not over $8,000.

Over $8,000 but not over $10,000.

Over $10,000 but not over $12,000.

Over $12,000 but not over $14,000. Over $14,000 but not over $16,000.

Over $16,000 but not over $18,000.

Over $18,000 but not over $20,000.

Over $20,000 but not over $22,000. Over $22,000 but not over $24,000. Over $24,000 but not over $28,000.

Over $28,000 but not over $32,000. Over $32,000 but not over $38,000.

The surtax shall be: 19.2% of the surtax net

income.

$384, plus 20.4% of ex

cess over $2,000. $792, plus 24% of excess

over $4,000. $1,272, plus 26% of ex

cess over $6,000. $1,792, plus 31% of ex

cess over $8,000. $2,412, plus 32% of ex

cess over $10,000. $3,052, plus 38% of ex

cess over $12,000. $3,812, plus 41% of ex

cess over $14,000. $4,632, plus 44% of ex

cess over $16,000. $5,512, plus 45% of ex

cess over $18,000. $6,412, plus 49% of ex

cess over $20,000. $7,392, plus 51% of ex

cess over $22,000. $8,412, plus 54% of ex

cess over $24,000. $10,572, plus 57% of ex

cess over $28,000. $12,852, plus 60% of excess over $32,000.

If the surtax net income is: Over $38,000 but not over

$44,000.

Over $44,000 but not over $50,000. Over $50,000 but not over $60,000.

Over $60,000 but not over $70,000.

Over $70,000 but not over $80,000.

Over $80,000 but not over $90,000.

Over $90,000 but not over $100,000.

Over $100,000 but not over $150,000. Over $150,000 but not over $200,000. Over $200,000 but not over $300,000. Over $300,000-

The surtax shall be: $16,452, plus 63% of ex

cess over $38,000. $20,232, plus 68% of excess over $44,000. $24,312, plus 69% of excess over $50,000. $31,212, plus 70% of excess over $60,000. $38,212, plus 74% of excess over $70,000. $45,612, plus 76% of excess over $80,000. $53,212, plus 78% of excess over $90,000. $61,012, plus 82% of excess over $100,000. $102,012, plus 85% of excess over $150,000. $144,512, plus 88% of excess over $200,000. $232,512, plus 89% of excess over $300,000.

Over $2,000 but not over $4,000.

Over $4,000 but not over $6,000.

Over $6,000 but not over $8,000.

Over $8,000 but not over $10,000. Over $10,000 but not over $12,000. Over $12,000 but not over $14,000. Over $14,000 but not over $16,000. Over $16,000 but not over $18,000. Over $18,000 but not over $20,000. Over $20,000 but not over $22,000.

Over $22,000 but not over $24,000. Over $24,000 but not over $28,000. Over $28,000 but not over $32,000.

The surtax shall be:

17% of the surtax net income.

$340, plus 18% of excess over $2,000.

$700, plus 21% of excess over $4,000. $1,120, plus 23% of excess over $6,000. $1,580, plus 27% of excess over $8,000. $2,120, plus 29% of ex

cess over $10,000. $2,700, plus 33% of excess over $12,000. $3,360, plus 36% of ex

cess over $14,000. $4,080, plus 39% of ex

cess over $16,000. $4,860, plus 40% of excess over $18,000. $5,660, plus 44% of excess over $20,000. $6,540, plus 46% of excess over $22,000. $7,460, plus 49% of excess over $24,000. $9,420, plus 51% of excess over $28,000.

If the surtax net income is: Over $50,000 but not over

$60,000.

Over $60,000 but not over $70,000.

Over $70,000 but not over $80,000.

Over $80,000 but not over $90,000.

Over $90,000 but not over $100,000.

Over $100,000 but not over $150,000. Over $150,000 but not

over $200,000. Over $200,000 but not over $300,000.

Over $300,000___

The surtax shall be:

$22,080, plus 65% of excess over $50,000. $28,580, plus 68% of ex

cess over $60,000. $35,380, plus 71% of excess over $70,000. $42,480, plus 73% of ex

cess over $80,000. $49,780, plus 77% of ex

cess over $90,000. $57,480, plus 80% of ex

cess over $100,000. $97,480, plus 84% of excess over $150,000. $139,480, plus 87% of excess over $200,000. $226,480, plus 88% of excess over $300,000.

(3) Definition of head of household.

For the purposes of this chapter, an individual shall be considered a head of a household if, and only if, such individual is not married at the close of his taxable year and maintains as his home a household which constitutes for such taxable year the principal place of abode, as a member of such household, of:

(A) A son, stepson, daughter, or stepdaughter of the taxpayer, or a descendant of a son or daughter of the taxpayer, but if such son, stepson, daughter, stepdaughter, or descendant is married at the close of the taxpayer's taxable year, only if the taxpayer is entitled to an exemption for the taxable year for such person under section 25 (b); or

(B) Any other person who is a dependent of the taxpayer, if the taxpayer is entitled to an exemption for the taxable year for such person under section 25 (b).

An individual shall be considered as maintaining a household only if over half of the cost of maintaining the household during the taxable year is furnished by such individual.

(4) Determination of status.

For the purposes of this subsection

(A) a legally adopted child of a person shall be considered a child of such person by blood;

(B) an individual who is legally separated from his spouse under a decree of divorce or of separate maintenance shall not be considered as married;

(C) a taxpayer shall be considered as not married at the close of his taxable year if at any time during the taxable year his spouse is a nonresident alien; and

(D) a taxpayer shall be considered as married at the close of his taxable year if his spouse (other than a spouse described in subparagraph (C)) died during the taxable year.

(5) Nonresident alien.

For the purposes of this chapter a taxpayer shall in no case be considered a head of a household if at any time during the taxable year he is a nonresident alien.

24626-53-vol. 33

(d) Tax in case of joint return.

In the case of a joint return of husband and wife under section 51 (b), the combined normal tax and surtax under section 11 and subsection (b) of this section shall be twice the combined normal tax and surtax that would be determined if the net income and the applicable credits against net income provided by section 25 were reduced by one-half. (e) Computation of tax without regard to credits against tax.

In the application of this section, the combined normal tax and surtax shall be computed without regard to the credits provided in sections 31, 32, and 35.

(f) Limitation on tax. (1) Calendar year 1951.

In the case of a taxable year beginning on January 1, 1951, and ending December 31, 1951, the combined normal tax and surtax shall in no event exceed 87.2 per centum of the net income for the taxable year.

(2) Taxable years beginning after October 31, 1951, and before January 1, 1954.

In the case of taxable years beginning after October 31, 1951, and before January 1, 1954, the combined normal tax and surtax shall in no event exceed 88 per centum of the net income of the taxable year. (3) Taxable years beginning after December 31, 1953. In the case of taxable years beginning after December 31, 1953, the combined normal tax and surtax shall in no event exceed 87 per centum of the net income for the taxable year. (g) Cross references.

(1) Alternative tax.

For alternative tax which may be elected if adjusted gross income is less than $5,000, see Supplement T.

(2) Tax in case of capital gains.

For rate and computation of alternative tax in lieu of normal tax and surtax in the case of capital gain from the sale or exchange of capital assets held for more than 6 months, see section 117 (c).

(3) Tax on personal holding companies.

For surtax on personal holding companies, see section 500.

(4) Avoidance of surtaxes by incorporation.

For surtax on corporations which accumulate surplus to avoid surtax on shareholders, see section 102. (5) Sale of oil or gas properties.

For limitation of surtax attributable to the sale of oil or gas properties, see section 105. (6) Tax on self-employment income.

For tax on self-employment income, see subchapter E. (53 Stat. 5; June 25, 1940, 11:45 a. m., E. S. T., ch. 419, title I, § 2, 54 Stat. 516; Sept. 20, 1941, 12:15 p. m., E. S. T., ch. 412, title I, §§ 101, 102 (b) (2), 55 Stat. 688, 692; Oct. 21, 1942, 4:30 p. m., E. W. T., ch. 619, title I, §§ 103, 150 (j), 56 Stat. 802, 846; May 29, 1944, 7 p. m., E. W. T., ch. 210, part I, § 4, 58 Stat.

231; Nov. 8, 1945, 5:17 p. m., E. S. T., ch. 453, title I, § 101 (b, c), 59 Stat. 557, 558; Apr. 2, 1948, 3:18 p. m., E. S. T., ch. 168, title I, §§ 101, 104 (b, c), title III, § 301, 62 Stat. 111, 114; Aug. 28, 1950, ch. 809, title II, § 208 (d) (2), 64 Stat. 544; Sept. 23, 1950, 3:15 p. m., E. D. T., ch. 994, title I, pt. I, § 101 (b), 64 Stat. 910; Oct. 20, 1951, 2:07 p. m., E. S. T., ch. 521, title I, § 101, title III, § 301 (a), 65 Stat. 459, 480.)

DERIVATION

Act May 28, 1938, ch. 289, § 12, 52 Stat. 453.

AMENDMENTS

1951-Subsec. (b) amended by act Oct. 20, 1951, § 101 (a), to increase the tax rates beginning Nov. 1, 1951.

Subsec. (c) amended generally by act Oct. 20, 1951, § 301 (a), to provide a new surtax table for a "head of a household".

Subsec. (f) amended by act Oct. 20, 1951, § 101 (b), to change the limitation on the total tax.

1950 Subsec. (b) amended by act Sept. 23, 1950, § 101 (b) (1), (2), to provide for the increase in taxes after Oct. 1, 1950, although the tax rate base will remain the same.

Subsec. (c) amended by act Sept. 23, 1950, § 101 (b) (3), to increase tax rates after Oct. 1, 1950, by decreasing the amount of the reduction allowable.

Subsec. (f) amended by act Sept. 23, 1950, § 101 (b) (4) to provide for a limitation on total tax.

Subsec. (g) amended by act Aug. 28, 1950, which added par. (6).

1948-Subsec. (b) amended by act Apr. 2, 1948, § 104 (a), which made a technical amendment by striking out "by 5 per centum thereof” and inserting in lieu thereof "as provided in subsection (c) of this section."

Subsec. (c) amended generally by act Apr. 2, 1948, § 101, which struck out former cross reference provisions and inserted the provision relating to reduction of tentative normal tax and tentative surtax.

Subsec. (d) added by act Apr. 2, 1948, § 301, which provides for the computation of tax under the so-called income splitting plan between husband and wife.

Subsecs. (e)—(g), formerly subsecs. (d)—(h), renumbered and amended generally by act Apr. 2, 1948, § 104 (c). 1945 Subsec. (b) amended generally by act Nov. 8, 1945, § 101 (b), and the surtax reduced in all brackets. Subsec. (g) amended by act Nov. 8, 1945, § 101 (c), which substituted "851⁄2 per centum" for "90 per centum". 1944 Section (b) amended generally by act May 29, 1944, § 4 (a), which increased surtax rates in certain brackets.

Subsec. (g) amended by act May 29, 1944, § 4 (b), which struck out said subsec. and inserted in lieu subsecs. (g) and (h).

1942 Subsecs. (b) and (c) amended by act Oct. 21, 1942.

1941-Subsec. (b) amended by act Sept. 20, 1941, § 101. Subsec. (g) added by act Sept. 20, 1941. § 102 (b) (2). It was enacted without a catchline, which has been supplied by editor.

1940 Subsec. (b) amended by act June 25, 1940.

EFFECTIVE DATE OF 1951 AMENDMENT

Section 105 of act Oct. 20, 1951, provided that: "Except as provided in section 104 [set out as a note under this section], the amendments made by this part [subsecs. (b), (f), of this section, and sections 145, 294, and 400 of this title] shall be applicable only with respect to taxable years beginning after October 31, 1951, and to taxable years beginning on January 1, 1951, and ending on December 31, 1951. For treatment of taxable years (other than the calendar year 1951) beginning before November 1, 1951, and ending after October 31, 1951, see section 131 [sections 108 and 430 of this title]."

Section 301 (c) of act Oct. 20, 1951 provided in part that the amendment of subsec. (c) should be applicable with respect to taxable years beginning after June 30, 1950.

EFFECTIVE DATE OF 1950 Amendment Amendments of subsections (b) and (c) of this section by act Sept. 23, 1950, as applicable only with respect to taxable years ending after Dec. 31, 1949, see note set out under section 11 of this title.

Amendment of subsection (f) of this section was made effective with respect to taxable years beginning after Sept. 30, 1950, by section 101 (b) (4) of act Sept. 23, 1950. EFFECTIVE DATE OF 1948 AMENDMENT

Section 105 of act Apr. 2, 1948, provided that the amendments made by sections 101 and 104 of said act Apr. 2, 1948, to section 12 of this title should be applicable to taxable years beginning after Dec. 31, 1947, and that taxable years beginning in 1947 and ending in 1948 shall be governed by subsec. (d) of section 108 of this title.

Section 305 of act Apr. 2, 1948, provided that amendment by section 301 of said act Apr. 2, 1948, should be applicable to taxable years beginning after Dec. 31, 1948. EFFECTIVE DATE OF 1945 AMENDMENT

Section 101 (d) of act Nov. 8, 1945, provided that the amendment of this section was made applicable to taxable years beginning after Dec. 31, 1945. For treatment of taxable years beginning in 1945 and ending in 1946, see sections 108 and 710 of this title.

EFFECTIVE DATE OF 1944 AMENDMENT

Section 2 of act May 29, 1944, provided that the amendment of this section was made applicable to taxable years beginning after Dec. 31, 1943.

EFFECTIVE DATE OF 1942 AMENDMENT

Section 101 of act Oct. 21, 1942, provided that the amendment of this section was made applicable to taxable years beginning after Dec. 31, 1941.

EFFECTIVE DATE OF 1941 AMENDMENT

Section 118 of act Sept. 20, 1941, provided that the amendment of this section was made applicable to taxable years beginning after Dec. 31, 1940.

EFFECTIVE DATE OF 1940 AMENDMENT Section 9 of act June 25, 1940, provided as follows: "The amendments made by this title (sections 1-9 of 1940 act), except the amendments made by section 5 (sections 143 and 144 of this title), shall be applicable only with respect to taxable years beginning after December 31, 1939".

SIMILAR PROVISIONS

1937-Aug. 26, 1937, ch. 815, title I, § 2, 50 Stat. 817. 1936-June 22, 1936, ch. 690, § 12, 49 Stat. 1653. 1935-Aug. 30, 1935, ch. 829, §§ 101, 107, 49 Stat. 1014, 1019.

1934 May 10, 1934, ch. 277, § 12, 48 Stat. 684. 1932-June 6, 1932, ch. 209, § 12, 47 Stat. 174. 1928-May 29, 1928, ch. 852, § 12, 45 Stat. 796. 1926-Feb. 26, 1926, ch. 27, § 211, 44 Stat. 21. 1924 June 2, 1924, ch. 234, § 211, 43 Stat. 265. 1921-Nov. 23, 1921, ch. 136, § 211, 42 Stat. 233. 1919-Feb. 24, 1919, ch. 18, § 211, 40 Stat. 1062. 1917-Oct. 3, 1917, ch. 63, § 2, 40 Stat. 301. 1916

Sept. 8, 1916, ch. 463, § 1 (b), 39 Stat. 756. 1913 Oct. 3, 1913, ch. 16, § II, A, subd. 2, 38 Stat. 166. COMPUTATION OF TAX IN CASE OF CERTAIN JOINT RETURNS

Section 104 of act Oct. 12, 1951, provided that: "If a joint return of a husband and wife is filed under the provisions of section 51 (b) (3) of the Internal Revenue Code [section 51 (b) (3) of this title] in a case where the husband and wife have different taxable years because of the death of either spouse, and the taxable year of the surviving spouse covered by such joint return began before November 1, 1951, and ended after October 31, 1951, the amendments made by this part and section 131 shall be applicable in respect of such joint return as if the taxable years of both spouses covered by the joint return ended on the date of the closing of the surviving spouse's taxable year."

TREATY OBLIGATIONS Section 615 of act Oct. 20, 1951, provided that: "No amendment made by this Act [act Oct. 20, 1951] shall apply in any case where its application would be contrary to any treaty obligation of the United States."

Similar provisions were contained in the following acts: 1950-Sept. 23, 1950, 3:15 p. m., E. D. T., ch. 994, title II, § 214, 64 Stat. 937.

1942-Oct. 21, 1942, 4:30 p. m., E. W. T., ch. 619, title I, § 109, 56 Stat. 808.

1941-Sept. 20, 1941, 12:15 p. m., E, S. T., ch. 412, title I, § 108, 55 Stat. 695.

1940-June 25, 1940, 11:45 a. m., E. S. T., ch. 419, title I, § 8, 54 Stat. 520.

CROSS REFERENCES

Supplement T, see section 400 of this title.

§13. Normal tax on corporations.

(a) Definitions.

For the purposes of this chapter

(1) Adjusted net income.

The term "adjusted net income" means the net income minus the credit provided in section 26 (a), relating to interest on certain obligations of the United States and Government corporations. (2) Normal-tax net income.

The term "normal-tax net income" means the adjusted net income minus the sum of the following credits:

(A) The credit for dividends received provided in section 26 (b);

(B) In the case of a public utility, the credit for dividends paid on its preferred stock provided in section 26 (h); and

(C) In the case of a western hemisphere trade corporation (as defined in section 109), the credit provided in section 26 (i).

(1) Calendar year 1951.

In the case of a taxable year beginning on January 1, 1951, and ending on December 31, 1951, a tax of 2834 per centum of the normal-tax net income. (2) Taxable years beginning after March 31, 1951, and before April 1, 1954.

In the case of taxable years beginning after March 31, 1951, and before April 1, 1954, a tax of 30 per centum of the normal-tax income.

(3) Taxable years beginning after March 31, 1954.

In the case of taxable years beginning after March 31, 1954, a tax of 25 per centum of the normal-tax net income.

(e) Improper accumulation of surplus.

For surtax on corporations which accumulate surplus to avoid surtax on shareholders, see section 102. (f) Mutual savings banks conducting life insurance business.

For special tax, in lieu of the taxes imposed by this section and section 15, in the case of a mutual savings bank conducting a life insurance business, see section 110. (53 Stat. 7; June 29, 1939, 10 p. m., E. S. T., ch. 247, title II, § 201, 53 Stat. 863; June 25, 1940, 11:45 a. m., E. S. T., ch. 419, title I, § 3 (a), 54 Stat. 517; Oct. 8, 1940, 11 p. m., E. S. T., ch. 757, title I, § 101 (a), 54 Stat. 974; Sept. 20, 1941, 12:15 p. m., E. S. T., ch. 412, title I, § 103 (a), 55 Stat. 692; Oct. 21, 1942, 4:30 p. m., E. W. T., ch. 619, title I, § 105 (a), 56 Stat. 805; Nov. 8, 1945, 5:17 p. m., E. S. T., ch. 453, title I, § 122 (g) (2), 59 Stat. 570; Sept. 23, 1950, 3:15 p. m., E. D. T., ch. 994, title I, pt. II, § 121 (a), 64 Stat. 914; Oct. 20, 1951, 2:07 p. m., E. S. T., ch. 521, title I, § 121 (a), title III, § 346 (b), 65 Stat. 465, 518.)

DERIVATION

Act May 28, 1938, ch. 289, § 13, 52 Stat. 455.
AMENDMENTS

1951-Subsec. (a) amended by act Oct. 20, 1951, § 121 (a), to redefine "adjusted new income" and "normal-tax net income".

Subsec. (b) amended by act Oct. 20, 1951, § 121 (a), to increase the tax impost.

Subsec. (f) added by act Oct. 20, 1951, § 346 (b). 1950-Act Sept. 23, 1950 amended section generally to increase corporation tax rates.

1945 Subsec. (a) (2) amended by act Nov. 8, 1945, which struck out "minus the credit for income subject to the tax imposed by Subchapter E of Chapter 2 provided in section 26 (e) and" following "adjusted net income". 1942-Subsecs. (a) (2) and (b) (2) amended by act Oct. 21, 1942.

1941-Subsec. (b), pars. (1) and (2), amended by act Sept. 20, 1941.

1940 Subsec. (b) amended by acts June 25, 1940, and Oct. 8, 1940, which changed "18 per centum" to "22/10 per centum," "$3,525" to "$3,775," and "32 per centum" to "35 per centum."

1939-Act June 29, 1939, which was made applicable only with respect to taxable years beginning after Dec. 31, 1939, by section 229 thereof, amended subsecs. (a)—(e) and omitted subsecs. (1)—(j).

EFFECTIVE DATE OF 1951 AMENDMENT

Section 125 of act Oct. 20, 1951, provided that: "The amendments made by this part [subsections (a), (b) of this section and sections 15, 26, 207, 362, 421, and 430 of this title] shall be applicable only with respect to taxable years beginning after March 31, 1951, and to taxable years beginning on January 1, 1951, and ending on December 31, 1951, except that the amendments made to sections 207, 362, and 421 of the Internal Revenue Code [sections 207, 362, and 421 of this title] shall be applicable to taxable years beginning after December 31, 1950, and ending after March 31, 1951. In the case of an insurance company subject to the tax imposed by section 207 [section 207 of this title], the provisions of section 26 (b) of such code [section 26 (b) of this title] applicable to the calendar year 1951 shall be applicable to a taxable year beginning after December 31, 1950, and before April 1, 1951, and ending after March 31, 1951. For treatment of taxable years (other than the calendar year 1951) beginning before April 1, 1951, and ending after March 31, 1951, see section 131 [sections 108 and 430 of this title]." Addition of subsec. (f) made applicable only with respect to taxable years beginning after Dec. 31, 1951, by section 346 (c) of act Oct. 20, 1951.

EFFECTIVE DATE OF 1950 AMENDMENT Section 123 of act Sept. 23, 1950, provided that the amendments of sections 13, 14 (a), 15, 26 (b), (h) (1), (2), (i), 122, and 141 should be applicable only with respect to taxable years ending after Dec. 31, and further provided that for treatment of taxable years (other than calendar year 1950) beginning before July 1, 1950, and ending after June 30, 1950, recourse is to be had to section 108 (e)-(g) of this title.

EFFECTIVE DATE OF 1945 AMENDMENT

Section 122 (g) of act Nov. 8, 1945, provided that the amendment of this section was made applicable to taxable years beginning after Dec. 31, 1945.

EFFECTIVE DATE OF 1942 AMENDMENT

Section 101 of act Oct. 21, 1942, provided that the amendment of this section was made applicable to taxable years beginning after Dec. 31, 1941.

EFFECTIVE DATE OF 1941 AMENDMENT

Section 118 of act Sept. 20, 1941, provided that the amendment of this section was made applicable to taxable years beginning after Dec. 31, 1940.

EFFECTIVE DATE OF 1940 AMENDMENTS

Section 101 (e) of act Oct. 8, 1940, provided that the amendment of this section was made applicable to taxable years beginning after Dec. 31, 1939.

Section 9 of act June 25, 1940, provided as follows: "The amendments made by this title (sections 1-9 of 1940 act), except the amendments made by section 5 (sections 143, 144, of Internal Revenue Code), shall be applicable only with respect to taxable years beginning after December 31, 1939."

EFFECTIVE DATE OF 1939 AMENDMENT

Section 229 of act June 29, 1939, provided that the amendment of this section was made applicable to taxable years beginning after Dec. 31, 1939.

SIMILAR PROVISIONS

1937-Aug. 26, 1937, ch. 815, title I, § 2, 50 Stat. 817. 1936-June 22, 1936, ch. 690, §§ 13, 14, 49 Stat. 1655. 1935-Aug. 30, 1935, ch. 829, § 102 (a), 49 Stat. 1015. 1934-May 10, 1934, ch. 277, § 13, 48 Stat. 686. 1932-June 6, 1932, ch. 209, § 13, 47 Stat. 177. 1928-May 29, 1928, ch. 852, § 13, 45 Stat. 797. 1926 Feb. 26, 1926, ch. 27, § 230, 44 Stat. 39. 1924 June 2, 1924, ch. 234, § 230, 43 Stat. 282. 1921-Nov. 23, 1921, ch. 136, §§ 229, 230, 42 Stat. 252. 1917-Oct. 3, 1917, ch. 63, §§ 4, 1206, 40 Stat. 302, 333. 1916 Sept. 8, 1916, ch. 463, § 10, 39 Stat. 765. 1913-Oct. 3, 1913, ch. 16, § II, G, 38 Stat. 172.

TREATY OBLIGATIONS

Section 615 of act Oct. 20, 1951, provided that: "No amendment made by this Act [act Oct. 20, 1951] shall apply in any case where its application would be contrary to any treaty obligation of the United States."

Similar provisions were contained in the following acts: 1950-Sept. 23, 1950, 3:15 p. m., E. D. T., ch. 994, title II, § 214, 64 Stat. 937.

1942-Oct. 21, 1942, 4:30 p. m., E. W. T., ch. 619, title I, § 109, 56 Stat. 808.

1941-Sept. 20, 1941, 12:15 p. m., E. S. T., ch. 412, title I, 108, 55 Stat. 695.

1940-June 25, 1940, 11:45 a. m., E. S. T., ch. 419, title I, § 8, 54 Stat. 520.

CROSS REFERENCES

Fiscal year taxpayers, see section 108 of this title. §14. Repealed. Oct. 20, 1951, 2:07 p. m., E. S. T., ch. 521, title I, p. II, § 121 (g), 65 Stat. 469.

Section, acts 53 Stat. 8; June 29, 1939, 10 p. m., E. S. T., ch. 247, title II, § 201, 53 Stat. 863; June 25, 1940, 11:45 a. m., E. S. T., ch. 419, title I, § 3 (b), 54 Stat. 517; Oct. 8, 1940, 11 p. m., E. S. T., ch. 757, title I, § 101 (b), 54 Stat. 974; Sept. 20, 1941, 12:15 p. m., E. S. T., ch. 412, title I, § 103 (b) (c), 55 Stat. 692, 693; Oct. 21, 1942, 4:30 p. m., E. W. T., ch. 619, title I, §§ 160 (b), 170 (b) (2),

56 Stat. 861, 881; Sept. 23, 1950, ch. 994, title I, pt. II, § 121 (b), 64 Stat. 915, which derived from act May 28, 1938, ch. 289, § 14, 52 Stat. 456, related to tax on special classes of corporations and is now covered by section 13 of this title.

§ 15. Surtax on corporations.

(a) Corporation surtax net income.

For the purpose of this chapter, the term "corporation surtax net income" means the net income minus the sum of the following credits:

(1) The credit for dividends received provided in section 26 (b);

(2) In the case of a public utility, the credit for dividends paid on its preferred stock provided in section 26 (h);

(3) In the case of a western hemisphere trade corporation (as defined in section 109), the credit provided in section 26 (i).

(b) Imposition of tax.

There shall be levied, collected, and paid for each taxable year upon the corporation surtax net income of every corporation (except a corporation subject to a tax imposed by section 231 (a), Supplement G, or Supplement Q) a surtax of 22 per centum of the amount of the corporation surtax net income in excess of $25,000.

(c) Disallowance of surtax exemption and minimum excess profits credit.

If any corporation transfers, on or after January 1, 1951, all or part of its property (other than money) to another corporation which was created for the purpose of acquiring such property or which was not actively engaged in business at the time of such acquisition, and if after such transfer the transferor corporation or its stockholders, or both, are in control of such transferee corporation during any part of the taxable year of such transferee corporation, then such transferee corporation shall not for such taxable year (except as may be otherwise determined under section 129 (b)) be allowed either the $25,000 exemption from surtax provided in subsection (b) or the $25,000 minimum excess profits credit provided in the last sentence of section 431, unless such transferee corporation shall establish by the clear preponderance of the evidence that the securing of such exemption or credit was not a major purpose of such transfer. For the purposes of this subsection, control means the ownership of stock possessing at least 80 per centum of the total combined voting power of all classes of stock entitled to vote or at least 80 per centum of the total value of shares of all classes of stock of the corporation. In determining the ownership of stock for the purpose of this subsection, the ownership of stock shall be determined in accordance with the provisions of section 503, except that constructive ownership under section 503 (a) (2) shall be determined only with respect to the individual's spouse and minor children. The provisions of section 129 (b), and the authority of the Secretary under such section, shall, to the extent not inconsistent with the provisions of this subsection, be applicable to this subsection. This subsection shall not apply to any taxable year with respect to which the tax im