Notwithstanding paragraph (12) (B) and supplement U, an organization described in this section (other than in the preceding paragraph) shall be considered an organization exempt from income taxes for the purpose of any law which refers to organizations exempt from income taxes. (13) Corporations organized by an association exempt under the provisions of paragraph (12), or members thereof, for the purpose of financing the ordinary crop operations of such members or other producers, and operated in conjunction with such association. Exemption shall not be denied any such corporation because it has capital stock, if the dividend rate of such stock is fixed at not to exceed the legal rate of interest in the State of incorporation or 8 per centum per annum, whichever is greater, on the value of the consideration for which the stock was issued, and if substantially all such stock (other than nonvoting preferred stock, the owners of which are not entitled or permitted to participate, directly or indirectly, in the profits of the corporation, upon dissolution or otherwise, beyond the fixed dividends) is owned by such association, or members thereof; nor shall exemption be denied any such corporation because there is accumulated and maintained by it a reserve required by State law or a reasonable reserve for any necessary purpose; (14) Corporations organized for the exclusive purpose of holding title to property, collecting income therefrom, and turning over the entire amount thereof, less expenses, to an organization which itself is exempt from the tax imposed by this chapter; (15) Corporations organized under Act of Congress, if such corporations are instrumentalities of the United States and if, under such Act, as amended and supplemented, such corporations are exempt from Federal income taxes; (16) Voluntary employees' beneficiary associations providing for the payment of life, sick, accident, or other benefits to the members of such association or their dependents, if (A) no part of their net earnings inures (other than through such payments) to the benefit of any private shareholder or individual, and (B) 85 per centum or more of the income consists of amounts collected from members and amounts contributed to the association by the employer of the members for the sole purpose of making such payments and meeting expenses; (17) Teachers' retirement fund associations of a purely local character, if (A) no part of their net earnings inures (other than through payment of retirement benefits) to the benefit of any private shareholder or individual, and (B) the income consists solely of amounts received from public taxation, amounts received from assessments upon the teaching salaries of members, and income in respect of investments; (18) Religious or apostolic associations or corporations, if such associations or corporations have a common treasury or community treasury, even if such associations or corporations engage in business for the common benefit of the members, but only if the members thereof include (at the time of filing their returns) in their gross income their entire prorata shares, whether distributed or not, of the net income of the association or corporation for such year. Any amount so included in the gross income of a member shall be treated as a dividend received. (19) Voluntary employees' beneficiary associations providing for the payment of life, sick, accident, or other benefits to the members of such association or their dependents or their designated beneficiaries, if (A) admission to membership in such association is limited to individuals who are officers or employees of the United States Government, and (B) no part of the net earnings of such association inures (other than through such payments) to the benefit of any private shareholder or individual. (53 Stat. 33; June 29, 1939, 10 p. m., E. S. T., ch. 247, title II, § 217, 53 Stat. 876; Oct. 21, 1942, 4:30 p. m., E. W. T., ch. 619, title I, §§ 137 (a), 165 (a), 56 Stat. 836, 872; Sept. 23, 1950, 3:15 p. m., ch. 994, title III, pt. I, § 301 (b), (c) (1), pt. III, § 332 (c), 64 Stat. 953, 959; Oct. 20, 1951, 2:07 p. m., E. S. T., ch. 521, title III, §§ 313 (a), (b), 314 (a), (b), 65 Stat. 490.) DERIVATION Act May 28, 1938, ch. 289, § 101, 52 Stat. 480. AMENDMENTS 1951-Opening paragraph amended by act Oct. 20, 1951, § 314 (b), which inserted “in paragraph (12) (B) and". Subsec. (2) repealed by act Oct. 20, 1951, § 313 (a). Subsec. (4) amended by act Oct. 20, 1951, § 313 (b), to exclude from exemption provisions building and loan associations and cooperative banks. Subsec. (12) amended by act Oct. 20, 1951, § 314 (a), to insert "(A)" immediately following "(12)", and to add paragraph "(B)". Last sentence amended by act Oct. 20, 1951, § 314 (b), which inserted "paragraph (12) (B) and”. 1950-Act Sept. 23, 1950, amended section by substituting "Except as provided in supplement U, the following organizations shall be exempt" in lieu of "The following organizations shall be exempt", by substituting "legislation. For loss of exemption under certain circumstances. see sections 3813 and 3814" in lieu of "legislation;” în paragraph (6), and by adding last two paragraphs. 1942-Subsecs. (11) and (16) amended by act Oct. 21, 1942. 1939-Subsec. (19) added by act June 29, 1939. EFFECTIVE DATE OF 1951 AMENDMENTS Amendment of first and last sentences and subsec. (12) made applicable only with respect to taxable years beginning after Dec. 31, 1951, by section 314 (d) of act Oct. 20, 1951. Repeal of subsec. (2) and amendment of subsec. (4) made applicable only with respect to taxable years beginning after Dec. 31, 1951, by section 313 (1) of act Oct. 20, 1951. EFFECTIVE DATE OF 1950 AMENDMENTS Amendment of section by act Sept. 23, 1950, as applicable only with respect to taxable years beginning after Dec. 31, 1950, see note set out under section 421 of this title. EFFECTIVE DATE OF 1942 AMENDMENT Section 101 of act Oct. 21, 1942. provided that the amendment of subsec. (11) was made applicable to taxable years beginning after Dec. 31, 1941. Amendment of subsec. (16) by act Oct 21, 1942, § 137 (a), was made effective by section 137 (b) thereof as follows: "(b) For the purposes of the Internal Revenue Code and the Revenue Acts of 1928, 1932, 1934, 1936, and 1938, the amendments made to the Internal Revenue Code (to subsec. (16)) and those Acts by subsection (a) of this section shall be effective as if they were a part of the Internal Revenue Code and such revenue Acts on the respective dates of their enactment." EFFECTIVE DATE OF 1939 AMENDMENT Amendment adding subsec. (19) made applicable to taxable years beginning after Dec. 31, 1938 by section 217 (b) of act June 29, 1939. SIMILAR PROVISIONS 1936-June 22, 1936, ch. 690, § 101, 49 Stat. 1673. EXEMPTION OF CERTAIN ORGANIZATIONS FOR PAST YEARS Section 302 of act Sept. 23, 1950, as amended by section 601 of act Oct. 20, 1951, provided that: "(a) Trade or business not unrelated. For any taxable year beginning prior to January 1, 1951, no organization shall be denied exemption under paragraph (1), (6), or (7) of section 101 of the Internal Revenue Code [pars. (1), (6), or (7) of this section] on the grounds that it is carrying on a trade or business for profit if the income from such trade or business would not be taxable as unrelated business income under the provisions of Supplement U of the Internal Revenue Code, as amended by this Act [sections 421-424 of this title], or if such trade or business is the rental by such organization of its real property (including personal property leased with the real property). "(b) Period of limitations. In the case of an organization which would otherwise be exempt under section 101 of the Internal Revenue Code [this section] were it not carrying on a trade or business for profit, the filing of the information return required by section 54 (f) of the Internal Revenue Code [section 54 (f) of this title] (relating to returns by tax-exempt organizations) for any taxable year beginning prior to January 1, 1951, shall be deemed to be the filing of a return for the purposes of section 275 of the Internal Revenue Code [section 275 of this title] (relating to period of limitation upon assessment and collection). In the case of such an organization which was, by the provisions of section 54 (f) of the Internal Revenue Code [section 54 (f) of this title], specifically not required to file such information return, for the purposes of the preceding sentence a return shall be deemed to have been filed at the time when such return should have been filed had it been so required. The provisions of this subsection shall not apply to a taxable year of such an organization with respect to which, prior to September 20, 1950, (1) any amount of tax was assessed or paid, or (2) a notice of deficiency under section 272 of the Internal Revenue Code [section 272 of this title] was sent to the taxpayer. "(c) Denial of deductions. A gift or bequest to an organization prior to January 1, 1951, for religious, charitable, scientific, literary, or educational purposes (including the encouragement of art and the prevention of cruelty to children or animals) otherwise allowable as a deduction under section 23 (o) (2), 23 (q) (2), 162 (a), 505 (a) (2), 812 (d), 861 (a) (3), 1004 (a) (2) (B), or 1004 (b) (2) or (3) of the Internal Revenue Code [sections 23 (o) (2), 23 (q) (2), 162 (a), 505 (a) (2), 812 (d), 861 (a) (3), 1004 (a) (2) (B), (b) (2) or (3) of this title] may not be denied under such sections if a denial of exemption to such organization for the taxable year of the organization in which such gift or bequest was made is prevented by the provisions of subsections (a) or (b) of this section. "(d) Profits inuring to the benefit of certain educational organizations or hospitals. For any taxable year beginning prior to January 1, 1951, an organization operated for the primary purpose of carrying on a trade or business for profit, no part of the net earnings of which inures to the benefit of any private shareholder or individual and all of the net earnings of which inure to the benefit of an educational organization which normally maintains a regular faculty and curriculum and normally has a regularly organized body of pupils or students in attendance at the place where its educational activities are regularly carried on, or to the benefit of a hospital, or an institution for the rehabilitation of physically handicapped persons, which maintains or is building for proper maintenance a hospital or institution staffed or to be staffed by qualified professional persons for the treatment of the sick and/or the rehabilitation of the physically handicapped, shall not be denied exemption from taxation under section 101 of the Internal Revenue Code on the ground that it is carrying on a trade or business for profit. The determination as to whether an organization other than one described in this subsection is exempt under section 101 of the Internal Revenue Code from taxation for any taxable year beginning before January 1, 1951, shall be made as if this subsection and section 301 (b) of this Act had not been enacted and without inferences drawn from the fact that this subsection and the amendment made by section 301 (b) are not expressly made applicable with respect to taxable years beginning before January 1, 1951." EMPLOYMENT TAXES Section 137 (c) of act Oct. 21, 1942, provided that amendment to subsection 16 by section 137 (a) of such act shall not apply to employment taxes imposed by sections 1400-1432 and 1600-1611 of this title, or the corresponding provisions of a prior law. 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. CROSS REFERENCES Services performed in employ of exempt organizations, inclusion in definition of employment under Title II of the Social Security Act, see section 410 of Title 42, The Public Health and Welfare. Stamp tax on policies written by foreign insurers, see section 1804 of this title. § 102. Surtax on corporations improperly accumulating surplus-(a) Imposition of tax. There shall be levied, collected, and paid for each taxable year (in addition to other taxes imposed by this chapter) upon the net income of every corporation (other than a personal holding company as defined in section 501 or a foreign personal holding company as defined in Supplement P) if such corporation, however created or organized, is formed or availed of for the purpose of preventing the imposition of the surtax upon its shareholders or the shareholders of any other corporation, through the medium of permitting earnings or profits to accumulate instead of being divided or distributed, a surtax equal to the sum of the following: 272 per centum of the amount of the undistributed section 102 net income not in excess of $100,000, plus 381⁄2 per centum of the undistributed section 102 net income in excess of $100,000. (b) Prima facie evidence. The fact that any corporation is a mere holding or investment company shall be prima facie evi dence of a purpose to avoid surtax upon shareholders. (c) Evidence determinative of purpose. The fact that the earnings or profits of a corporation are permitted to accumulate beyond the reasonable needs of the business shall be determinative of the purpose to avoid surtax upon shareholders unless the corporation by the clear preponderance of the evidence shall prove to the contrary. (d) Definitions. As used in this chapter (1) Section 102 net income. The term "section 102 net income" means the net income, computed without the benefit of the capital loss carry-over provided in section 117 (e) from a taxable year which begins after December 31, 1940, and computed without the net operating loss deduction provided in section 23 (s), minus the sum of(A) Taxes. Federal income, war-profits, and excess-profits taxes (other than the tax imposed by Subchapter E of Chapter 2 for a taxable year beginning after December 31, 1940) paid or accrued during the taxable year, to the extent not allowed as a deduction by section 23, but not including the tax imposed by this section or a corresponding section of a prior income-tax law. (B) Disallowed charitable, etc., contributions. Contributions or gifts payment of which is made within the taxable year, not otherwise allowed as a deduction, to or for the use of donees described in section 23 (o), for the purposes therein specified. For the purposes of the preceding sentence, payment of any contribution or gift shall be considered as made within the taxable year if and only if it is considered for the purposes of section 23 (q) as made within such year. (C) Disallowed losses. Losses from sales or exchanges of capital assets which are disallowed as a deduction by section 117 (d). (D) Long-term capital gains. The excess of the net long-term capital gain for the taxable year over the net short-term capital loss for such year, minus the taxes imposed by this chapter attributable to such excess. The taxes attributable to such excess shall be an amount equal to the difference between (i) the taxes imposed by this chapter (except the tax imposed by this section) for such year and (ii) such taxes computed for such year without including such excess in net income. (2) Undistributed section 102 net income. The term "undistributed section 102 net income" means the section 102 net income minus the basic surtax credit provided in section 27 (b), but the computation of such credit under section 27 (b) (1) shall be made without its reduction by the amount of the credit provided in section 26 (a), relating to interest on certain obligations of the United States and Government corporations. (e) Tax on personal holding companies. For surtax on personal holding companies, see section 500 (f) Income not placed on annual basis. Section 47 (c) shall not apply in the computation of the tax imposed by this section. (53 Stat. 35; June 29, 1939, 10 p. m., E. S. T., ch. 247, title II, § 211 (f), 53 Stat. 868; Sept. 20, 1941, 12:15 p. m., E. S. T., ch. 412, title I, §§ 103 (d), 202 (b), 55 Stat. 693, 700; Oct. 21, 1942, 4:30 p. m., E. W. T., ch. 619, title I, §§ 105 (e) (2), 135 (b) (1), 138, 56 Stat. 807, 835, 836; Nov. 8, 1945, 5:17 p. m., E. S. T., ch. 453, title I, § 122 (g) (5), 59 Stat. 570; Oct. 25, 1949, ch. 720, § 3 (b), 63 Stat. 892; Oct. 20, 1951, 2:07 p. m., E. S. T., ch. 521, title III, § 315 (a), 65 Stat. 493.) DERIVATION Act May 28, 1938, ch. 289, § 102, 52 Stat. 483. REFERENCES IN TEXT Subchapter E of Chapter 2, referred to in the text of subsection (d) (1) (A), relating to excess profits tax, was repealed as follows: sections 741 and 752 by act Oct. 21, 1942, 4:30 p. m., E. W. T., ch. 619, title II, §§ 224 (b), 228 (b), 229 (a) (1), 56 Stat. 920, 925, 931; sections 710-736, 740, 742-744, 750, 751, 760, 761 and 780-784 by act Nov. 8, 1945, ch. 453, title I, § 122 (a), 59 Stat. 568. AMENDMENTS 1951-Subsec. (d) (1) amended by act Oct. 20, 1951, § 315 (a), which added subparagraph (D). 1949-Subsec. (d) (1) (B) amended by act Oct. 25, 1949, which added last sentence to integrate provisions of section relating to charitable contributions with new provisions of subsec. (q) of section 23 of this title. 1945 Subsec. (d) (1) amended by act Nov. 8, 1945, which struck out subparagraph (D) thereof. 1942 Subsec. (d) (1) amended and subsecs. (d) (D) and (f) added by act Oct. 21, 1942. 1941-Subsec. (a) amended by act Sept. 20, 1941, § 103 (d), which increased rates. Subsec. (d) (1) (A) amended by act Sept. 20, 1941, § 202 (b). 1939 Subsec. (d) (1) amended by act June 29, 1939. EFFECTIVE DATE OF 1951 AMENDMENT Amendment of subsec. (d) (1) by addition of subparagraph (D) made applicable only with respect to taxable years beginning after Dec. 31, 1950, by section 315 (b) of act Oct. 20, 1951. EFFECTIVE DATE OF 1949 AMENDMENT Section 3 (c) of act Oct. 25, 1949, provided that: "The amendments made by this section [to sections 23 (q), 102 (d) (1) (B), 336 (a) (2), 505 (a) (2)] shall be applicable with respect to taxable years beginning after December 31, 1942. If the election provided for in such amendments is made for any taxable year beginning before January 1, 1949 "(1) the election for such year may be made (in lieu of at the time of the filing of the return for such year) at any time within one year after the date of the enactment of this Act [Oct. 25, 1949]; but "(2) such election shall not be allowed unless the taxpayer, in accordance with regulations prescribed by the Commissioner with the approval of the Secretary, consents in writing to the assessment (within such period as may be agreed upon) of any deficiency, to the extent resulting from such election, for any other taxable year of the taxpayer, even though on the date of the filing of such consent such assessment is otherwise prevented by the operation of any law or rule of law." 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 Sections 118 and 205 of act Sept. 20, 1941, provided that the amendment of this section was made applicable only with respect to taxable years beginning after Dec. 31, 1940. SIMILAR PROVISIONS 1936-June 22, 1936, ch. 690, § 102, 49 Stat. 1676, as amended by act Aug. 26, 1937, ch. 815, titles I, VI, §§ 2, 601, 50 Stat. 815, 830. 1934 - May 10, 1934, ch. 277, § 102, 48 Stat. 702. 1932-June 6, 1932, ch. 209, $ 104, 47 Stat. 195, as amended by act June 16, 1933, ch. 90, title 2, § 214, 48 Stat. 207. 1928-May 29, 1928, ch. 852, § 104, 45 Stat. 814. 1926 Feb. 26, 1926, ch. 27, § 220, 44 Stat. 34. 1924 June 2, 1924, ch. 234, § 220, 43 Stat. 277. 1921-Nov. 23, 1921, ch. 136, § 220, 42 Stat. 247. 1919-Feb. 24, 1919, ch. 18, § 220, 40 Stat. 1072. 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 Untied States." Similar provisions were contained in the following acts: 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. CROSS REFERENCES Construction reserve fund deposits under Merchant Marine Act of 1936 as not constituting accumulation of earnings or profits, see section 1161 (f) of Title 46, Shipping. § 103. Rates of tax on citizens and corporations of certain foreign countries. Whenever the President finds that, under the laws of any foreign country, citizens or corporations of the United States are being subjected to discriminatory or extraterritorial taxes, the President shall so proclaim and the rates of tax imposed by sections 11, 12, 13, 14, 201 (a), 204 (a), 207, 211 (a), 231 (a), 362, and 400 shall, for the taxable year during which such proclamation is made and for each taxable year thereafter, be doubled in the case of each citizen and corporation of such foreign country; but the tax at such doubled rate shall be considered as imposed by sections 11, 12, 13, 14, 201 (a), 204 (a), 207, 211 (a), 231 (a), 362 and 400, as the case may be. In no case shall this section operate to increase the taxes imposed by such sections (computed without regard to this section) to an amount in excess of 80 per centum of the net income of the taxpayer. Whenever the President finds that the laws of any foreign country with respect to which the President has made a proclamation under the preceding provisions of this section have been modified so that discriminatory and extraterritorial taxes applicable to citizens and corporations of the United States have been removed, he shall so proclaim, and the provisions of this section providing for doubled rates of tax shall not apply to any citizen or corporation of such foreign country with respect to any taxable year beginning after such proclamation is Act May 28, 1938, ch. 289, § 103, 52 Stat. 483. 1944 Act May 29, 1944, amended section by striking "and 450" wherever appearing and inserting in lieu thereof "and 400". 1942-Act Oct. 21, 1942, corrected references to other sections. 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 Amendment by section 163 (b) (1) of act Oct. 21, 1942, was made applicable to taxable years beginning after Dec. 31, 1942, by section 101 thereof, and amendment by section 172 (c) of said act Oct. 21, 1942, was made effective Jan. 1, 1943, by section 172 (g) thereof. SIMILAR PROVISIONS 1936-June 22, 1936, ch. 690, § 103, 49 Stat. 1677. 1934-May 10, 1934, ch. 277, § 103, 48 Stat. 703. TREATY OBLIGATIONS Section 109 of act Oct. 21, 1942, provided as follows: "No amendment made by this title shall apply in any case where its application would be contrary to any treaty obligation of the United States." § 104. Banks and trust companies-(a) Definition. As used in this section the term "bank" means a bank or trust company incorporated and doing business under the laws of the United States (including laws relating to the District of Columbia), of any State, or of any Territory, a substantial part of the business of which consists of receiving deposits and making loans and discounts, or of exercising fiduciary powers similar to those permitted to national banks under section 11 (k) of the Federal Reserve Act, 38 Stat. 262 (U. S. C., Title 12, § 248k), as amended, and which is subject by law to supervision and examination by State, Territorial or Federal authority having supervision over banking institutions. Such term also means a domestic building and loan association. (b) Rate of tax. Banks shall be subject to tax under section 13 or section 14 (b), and under section 15. (53 Stat. 36; June 29, 1939, 10 p. m., E. S. T., ch. 247, title II, § 202, 53 Stat. 865; Sept. 20, 1941, 12:15 p. m., E. S. T., ch. 412, title I, § 104 (c), 55 Stat. 694; Oct. 20, 1951, 2:07 p. m., E. S. T., ch. 521, title III, § 313 (h), 65 Stat. 491.) EFFECTIVE DATE OF 1951 AMENDMENT Amendment of subsec. (a) made applicable only with respect to taxable years beginning after Dec. 31, 1951, by section 313 (J) of act Oct. 20, 1951. EFFECTIVE DATE OF 1941 AMENDMENT Section 118 of act Sept. 20, 1941, provided that the amendment of this section was made applicable only with respect to taxable years beginning after Dec. 31, 1940. EFFECTIVE DATE OF 1939 AMENDMENT Section 229 of act June 29, 1939 provided that the amendment of subsec. (b) was made applicable to taxable years beginning after Dec. 31, 1939. SIMILAR PROVISIONS 1936-June 22, 1936, ch. 690, § 104, 49 Stat. 1677. 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 act: 1941-Sept. 20, 1941, 12:15 p. m., E. S. T., ch. 412, title I, § 108, 55 Stat. 695. § 105. Sale of oil or gas properties. In the case of a bona fide sale of any oil or gas property, or any interest therein, where the principal value of the property has been demonstrated by prospecting or exploration or discovery work done by the taxpayer, the portion of the tax imposed by section 12 attributable to such sale shall not exceed 30 per centum of the selling price of such property or interest. (53 Stat. 36.) DERIVATION Act May 28, 1938, ch. 289, § 105, 52 Stat. 484. 1936-June 22, 1936, ch. 690, § 105, 49 Stat. 1678. § 106. Claims against United States involving acquisition of property. In the case of amounts (other than interest) received by a taxpayer from the United States with respect to a claim against the United States involving the acquisition of property and remaining unpaid for more than fifteen years, the portion of the tax imposed by section 12 attributable to such receipt shall not exceed 30 per centum of the amount (other than interest) so received. (53 Stat. 36.) DERIVATION Act May 28, 1938, ch. 289, § 106, 52 Stat. 484. § 107. Compensation for services rendered for a period of thirty-six months or more and back pay-(a) Personal services. If at least 80 per centum of the total compensation for personal services covering a period of thirtysix calendar months or more (from the beginning to the completion of such services) is received or accrued in one taxable year by an individual or a partnership, the tax attributable to any part thereof which is included in the gross income of any individual shall not be greater than the aggregate of the taxes attributable to such part had it been included in the gross income of such individual ratably over that part of the period which precedes the date of such receipt or accrual. (b) Patent, copyright, etc. For the purposes of this subsection, the term "artistic work or invention", in the case of an individual, means a literary, musical, or artistic composition of such individual or a patent or copyright covering an invention of or a literary, musical, or artistic composition of such individual, the work on which by such individual covered a period of thirty-six calendar months or more from the beginning to the completion of such composition or invention. If, in the taxable year, the gross income of any individual from a particular artistic work cr invention by him is not less than 80 per centum of the gross income in respect of such artistic work or invention in the taxable year plus the gross income therefrom in previous taxable years and the twelve months immediately succeeding the close of the taxable year, the tax attributable to the part of such gross income of the taxable year which is not taxable as a gain from the sale or exchange of a capital asset held for more than 6 months shall not be greater than the aggregate of the taxes attributable to such part had it been received ratably over that part of the period preceding the close of the taxable year but not more than thirty-six calendar months. (c) Fractional parts of a month. For the purposes of this section a fractional part of a month shall be disregarded unless it amounts to more than half a month in which case it shall be considered as a month. (d) Back pay. (1) In general. If the amount of the back pay received or accrued by an individual during the taxable year exceeds 15 per centum of the gross income of the individual for such year, the part of the tax attributable to the inclusion of such back pay in gross income for the taxable year shall not be greater than the aggregate of the increases in the taxes which would have resulted from the inclusion of the respective portions of such back pay in gross income for the taxable years to which such portions are respectively attributable, as determined under regulations prescribed by the Commissioner with the approval of the Secretary. (2) Definition of back pay. For the purposes of this subsection, "back pay" means (A) remuneration, including wages, salaries, retirement pay, and other similar compensation, which is received or accrued during the taxable year by an employee for services performed prior to the taxable year for his employer and which would have been paid prior to the taxable year except for the intervention of one of the following events: (i) bankruptcy or receivership of the employer; (ii) dispute as to the liability of the employer to pay such remuneration, which is determined after the |