SEC. 167-Continued

ANCILLARY PROVISIONS (P.L. 85–866, § 94)—Continued

"(2) CHANGEOVER. The term 'changeover' means a change from the retirement to the straight line method of computing the allowance of deductions for depreciation.

"(3) CHANGEOVER DATE.-The term 'changeover date' means the first day of the first taxable year for which the changeover was effective.

"(4) 1956 ADJUSTMENT DATE.-The term '1956 adjustment date' means, in the case of any taxpayer, the first day of his first taxable year beginning after December 31, 1955.

"(5) PREDECESSOR.-The term 'predecessor' means any person from whom property of a kind or class to which this section refers was acquired, if the basis of such property is determined by reference to its basis in the hands of such person. Where a series of transfers of property has occurred and where in each instance the basis of the property was determined by reference to its basis in the hands of the prior holder, the term includes each such prior holder.

"(6) The term 'Secretary' means the Secretary of the Treasury or his delegate. "(7) The term 'Commissioner' means the Commissioner of Internal Revenue." SEC. 168. AMORTIZATION OF EMERGENCY FACILITIES

Stat. 52-55):

(e) (1)_. -- Aug. 26, 1957, H.R. 232, P.L. 85-165, § 4(a), 71 Stat. 414: (in part)

(68A

Amended Sec. 168 (e) (1) (determination of adjusted basis of emergency facility) by striking out

"There"

and inserting in lieu thereof

"CERTIFICATIONS ON OR BEfore August 22, 1957.-In the case of a certificate made on or before August 22, 1957, there". Effective Date:

August 26, 1957-the date of enactment.

(e) (2)–(4)......... Aug. 26, 1957, H.R. 232, P.L. 85–165, § 4(b), 71 Stat. 414-415: (deleted,

added)

Amended Sec. 168(e) (relating to determination of adjusted basis of emergency facility) by striking out paragraph (2), which read as follows (18A Stet. 54):

"(2) After the completion or acquisition of any emergency facility with respect to which a certificate under paragraph (1) has been made, any expenditure (attributable to such facility and to the period after such completion or acquisition) which does not represent construction, reconstruction, erection, installation, or acquisition included in such certificate, but with respect to which a separate certificate is made under paragraph (1), shall not be applied in adjustment of the basis of such facility, but a separate basis shall be computed therefor pursuant to paragraph (1) as if it were a new and separate emergency facility.",

and inserting in lieu thereof the following:

"(2) CERTIFICATIONS AFTER AUGUST 22, 1957.-In the case of a certificate made after August 22, 1957, there shall be included only so much of the amount of the adjusted basis of such facility (computed without regard to this section) as is properly attributable to such construction, reconstruction, erection, installtion, or acquisition after December 31, 1949, as the certifying authority designated by the President by Executive order, has certified is to be used

"(A) to produce new or specialized defense items or components of new or specialized defense items (as defined in paragraph (4)) during the emergency period, or

SEC. 168-Continued
(e) (2)-(4) (added 1957)-Continued

"(B) to provide research, developmental, or experimental services during the emergency period for the Department of Defense (or one of the component departments of such Department), or for the Atomic Energy Commission, as a part of the national defense program,

and only such portion of such amount as such authority has certified is attributable to the national defense program. Such certification shall be under such regulations as may be prescribed from time to time by such certifying authority with the approval of the President. An application for a certificate must be filed at such time and in such manner as may be prescribed by such certifying authority under such regulations but in no event shall such certificate have any effect unless an application therefor is filed before the expiration of 6 months after the beginning of such construction, reconstruction, erection, or installation or the date of such acquisition. For purposes of the preceding sentence, an application which was timely filed under this subsection on or before August 22, 1957, and which was pending on such date, shall be considered to be an application timely filed under this paragraph.

"(3) SEPARATE FACILITIES; SPECIAL RULE.After the completion or acquisition of any emergency facility with respect to which a certificate under paragraph (1) or (2) has been made, any expenditure (attributable to such facility and to the period after such completion or acquisition) which does not represent construction, reconstruction, erection, installation, or acquisition included in such certificate, but with respect to which a separate certificate is made under paragraph (1) or (2), shall not be applied in adjustment of the basis of such facility, but a separate basis shall be computed therefor pursuant to paragraph (1) or (2), as the case may be, as if it were a new and separate emergency facility.

"(4) DEFINITIONS.-For purposes of paragraph (2)—

"(A) NEW OR SPECIALIZED DEFENSE ITEM.-The term 'new or specialized defense item' means only an item (excluding services)

"(i) which is produced, or will be produced, for sale to the Department of Defense (or one of the component departments of such Department), or to the Atomic Energy Commission, for use in the national defense program, and

"(ii) for the production of which existing productive facilities are unsuitable because of its newness or of its specialized defense features.

"(B) COMPONENT OF NEW OR SPECIALIZED DEFENSE ITEM.The term 'component of a new or specialized defense item' means only an item

"(i) which is, or will become, a physical part of a new or specialized defense item, and

"(ii) for the production of which existing productive facilities are unsuitable because of its newness or of its specialized defense features."

Effective Date:

August 26, 1957, the date of enactment.
Applicability:

Indicated by the terms of the amendment.

60-448-67

SEC. 168-Continued

(e) (2) (C)____ Sept. 2, 1958, H.R. 8381, P.L. 85-866, § 9(a), 72 Stat. 1608: (added)

(e) (5) -----(added)

(i) (redesignated, added)

Amended Sec. 168 (e) (2) (as amended by P.L. 85-165, § 4(b)) by striking out "or" at the end of subparagraph (A), by inserting "or"" at the end of subparagraph (B), and by inserting after subparagraph (B) the following new subparagraph:

"(C) to provide primary processing for uranium ore or uranium concentrate under a program of the Atomic Energy Commission for the development of new sources of uranium ore or uranium concentrate,".

Applicability:

Taxable years beginning after December 31, 1953, and ending after August 16, 1954.52

(Id., § 1(c)(1), 72 Stat. 1606. See n. 36, p. 79 above.) Sept. 2, 1958, H.R. 8381, P.L. 85–866, § 9(b), 72 Stat. 1609: Amended Sec. 168(e) (as amended by P.L. 85-165, § 4(a) and (b)) by inserting after paragraph (4) (definitions) the following new paragraph:

"(5) LIMITATION WITH RESPECT TO URANIUM ORE OR URANIUM CONCENTRATE PROCESSING FACILITIES.-No certificate shall be made under paragraph (2) (C) with respect to any facility unless existing facilities for processing the uranium ore or uranium concentrate which will be processed by such facility are unsuitable because of

their location."

Applicability:

Taxable years beginning after December 31, 1953, and ending after August 16, 1954.

(Id., § 1(c)(1), 72 Stat. 1606. See n. 36, p. 79 above.)

Aug. 26, 1957, H.R. 232, P.L. 85–165, § 4(c), 71 Stat. 415:

Amended Sec. 168 by redesignating subsection (i) (cross reference) as subsection (j), and by inserting after subsection (h) (life tenant and remainderman) the following new subsection:

"(i) TERMINATION.-No certificate under subsection (e) shall be made with respect to any emergency facility after December 31, 1959."

Effective Date:

August 26, 1957, the date of enactment.

Applicability:

Indicated by the terms of the amendment.

Section 9(c) of Public Law 85-866, 72 Stat. 1609, provided as follows:

"(o) APPLICATIONS HERETOFORE FILED.-In the case of any certificate which is made under section 168(e) of the Internal Revenue Code of 1954 for any facility to which the amendment made by subsection (a) applies, if application for such certificate was filed before the date of the enactment of this Act [Sept. 2, 1958] and within the time prescribed by the next to the last sentence of section 168(e) (2) of such Code, the second sentence of section 168(d) (1) of such Code shall not apply with respect to any taxable year of the taxpayer which ends prior to the date on which such certificate is made. In the case of any certificate which is made under such section for any facility to which the amendment made by subsection (a) applies, if application for such certificate is filed at any time within 3 months after the date of the enactment of this Act, the next to the last sentence of section 168 (e) (2) shall not apply and the second sentence of section 168 (d) (1) shall not apply with respect to any taxable year of the taxpayer which ends prior to the date on which such certificate is made.'

The original subsection (i) of section 168 read as follows (68A Stat. 55):

"(i) CROSS REFERENCE.

"For special rule with respect to gain derived from the sale or exchange of property the adjusted basis of which is determined with regard to this section, see section 1238."

The text of this subsection has not been amended.

SEC. 170. CHARITABLE, ETC., CONTRIBUTIONS AND GIFTS (68A Stat. 58-60):

(b)(1)(A)___ Aug. 7, 1956, H.R. 12152, P.L. 84-1022, § 1, 70 Stat. 1117:

(cl. (iii), in part)

Do....

(cl. (iv) added)

Do____

(cls. (v), (vi)

added)

Amended Sec. 170(b)(1)(A)(iii) 54 by inserting after "section 503 (b) (5)," the following:

"or to a medical research organization (referred to in section 503 (b) (5) directly engaged in the continuous active conduct of medical research in conjunction with a hospital, if during the calendar year in which the contribution is made such organization is committed to spend such contributions for such research before January 1 of the fifth calendar year which begins after the date such contribution is made."

Oct. 23, 1962, H.R. 8952, P.L. 87-858, § 2(a), 76 Stat. 1134:

Amended Sec. 170(b)(1)(A) (as amended by P.L. 84-1022, § 1) by striking out "or" at the end of clause (ii), by inserting "or" at the end of clause (iii), and by inserting after clause (iii) the following new clause (iv):

"(iv) an organization referred to in section 503(b)(3) organized and operated exclusively to receive, hold, invest, and administer property and to make expenditures to or for the benefit of a college or university which is an organization referred to in clause (ii) of this subparagraph and which is an agency or instrumentality of a State or political subdivision thereof, or which is owned or operated by a State or political subdivision thereof or by an agency or instrumentality of one or more States or political subdivisions,". Applicability:

Taxable years beginning after December 31, 1960.

(Id., § 2(c), 76 Stat. 1134.)

Feb. 26, 1964, H.R. 8363, P.L. 88-272, § 209(a), 78 Stat. 43:

Amended Sec. 170(b)(1)(A) by striking out "or" at the end of clause (iii) (as amended by P.L. 84-1022, § 1), and by inserting after clause (iv) (as added by P.L. 87-858, § 2(a)) the following new clauses (v) and (vi):

"(v) a governmental unit referred to in subsection (c)(1), or "(vi) an organization referred to in subsection (c) (2) which normally receives a substantial part of its support (exclusive of income received in the exercise or performance by such organization of its charitable, educational, or other purpose or function constituting the basis for its exemption under section 501 (a)) from a governmental unit referred to in subsection (c) (1) or from direct or indirect contributions from the general public,".

Subsection (b)(1)(A) of section 170 originally read as follows (68A Stat. 58): "(b) LIMITATIONS.

"(1) INDIVIDUALS.-In the case of an individual the deduction provided in subsection (a) shall be limited as provided in subparagraphs (A), (B), (C), and (D).

"(A) SPECIAL RULE.-Any charitable contribution to

"(i) a church or a convention or association of churches,

"(ii) an educational organization referred to in section 503(b)(2), or

"(iii) a hospital referred to in section 503(b) (5),

shall be allowed to the extent that the aggregate of such contributions does not exceed 10 percent of the taxpayer's adjusted gross income computed without regard to any net operating loss carryback to the taxable year under section 172."

SEC. 170-Continued

(b)(1)(A) (v), (vi) (added 1964)-Continued

Applicability:

Contributions which are paid in taxable years beginning after December 31, 1963.

(Id., § 209 (f) (1), 78 Stat. 47.)

(b)(1) (B)... Oct. 23, 1962, H.R. 8952, P.L. 87-858, § 2(b), 76 Stat. 1134:
(in part)
Amended Sec. 170(b)(1) (B) 55 by striking out—

"any charitable contributions to the organizations described in
clauses (i), (ii), and (iii)”

and inserting in lieu thereof

"any charitable contributions described in subparagraph (A)". Applicability:

Taxable years beginning after December 31, 1960.

(Id., § 2(c), 76 Stat. 1134.)

(b)(1)(C)___ Sept. 2, 1958, H.R. 8381, P.L. 85-866, § 10(a), 72 Stat. 1609: Amended Sec. 170(b)(1)(C) 56 by adding at the end thereof the following new sentence:

(sen'ce added)

(b)(2). (sen'ce, in full)

"In lieu of the amount of income tax paid during any such year, there may be substituted for that year the amount of income tax paid in respect of such year, provided that any amount so included in the year in respect of which payment was made shall not be included in any other year."

Feb. 26, 1964, H.R. 8363, P.L. 88-272, § 209(d) (1), 78 Stat. 46: Amended Sec. 170(b) (2) (relating to limitation on amount of deduction for charitable contributions by corporations) by striking out the sentence following subparagraph (D) 57 and inserting in lieu thereof the following:

55 Subparagraph (B) of section 170(b)(1) originally read as follows (68A Stat. 58): "(B) GENERAL LIMITATION.-The total deductions under subsection (a) for any taxable year shall not exceed 20 percent of the taxpayer's adjusted gross income computed without regard to any net operating loss carryback to the taxable year under section 172. For purposes of this subparagraph, the deduction under subsection (a) shall be computed without regard to any deduction allowed under subparagraph (A) but shall take into account any charitable contributions to the organizations described in clauses (i), (ii), and (iii) which are in excess of the amount allowable as a deduction under subparagraph (A)."

56 Subparagraph (C) of section 170(b) (1) originally read as follows (68A Stat. 58-59): "(C) UNLIMITED DEDUCTION FOR CERTAIN INDIVIDUALS.-The limitation in subparagraph (B) shall not apply in the case of an individual if, in the taxable year and in 8 of the 10 preceding taxable years, the amount of the charitable contributions, plus the amount of income tax (determined without regard to chapter 2, relating to tax on self-employment income) paid during such year in respect of such year or preceding taxable years, exceeds 90 percent of the taxpayer's taxable income for such year, computed without regard to

"(i) this section,

(ii) section 151 (allowance of deductions for personal exemptions), and

(iii) any net operating loss carryback to the taxable year under section 172."

57 The sentence following subparagraph (D) of section 170(b) (2) originally read as follows (68A Stat. 59):

"Any contribution made by a corporation in a taxable year to which this section applies in excess of the amount deductible in such year under the foregoing limitation shall be deductible in each of the two succeeding taxable years in order of time, but only to the extent of the lesser of the two following amounts: (i) the excess of the maximum amount deductible for such succeeding taxable year under the foregoing limitation over the contributions made in such year; and (ii) in the case of the first succeeding taxable year the amount of such excess contribution, and in the case of the second succeeding taxable year the portion of such excess contribution not deductible in the first succeeding taxable year."