tion 117, be considered as a net operating loss or a net capital loss, as the case may be, separately sustained by such corporation and subject to the provisions of paragraph (b) (2) (iii) (c) and (d) or paragraph (b) (2) (ix) (b) of this section, and (vii) In the case of a corporation which became a member of the affiliated group subsequent to March 14, 1941, common parent corporation or subsidiary, as the case may be, allowable deductions shall be determined subject to the qualifications prescribed in subparagraph (11) of this paragraph. CODIFICATION: $ 23.31 (a) (1) was amended as follows, by Treasury Decision 5340, Mar. 14, 1944, 9 F.R. 2843: The word "and" at the end of subdivision (iv) was deleted, a comma was substituted for the period at the end of subdivision (v), the word "and" was added, and a new subdivision (vi), reading as set forth above, was added. $ 23.31 (d) (1) was further amended as follows, by Treasury Decision 5341, Mar. 14, 1944, 9 F.R. 2844: The word "and" at the end of subdivision (V) was deleted, a comma was substituted for the period at the end of subdivision (vi), the word "and" was added, and a new subdivision (vil), reading as set forth above, was added. (2) 2. The word "and" at the end of subdivision (vii) was deleted, a semicolon was substituted for the period at the end of subdivision (viii), the word "and" was added, and a new subdivision (ix), reading as set forth above, was added. (10) In no case shall there be included in the computation of the consolidated net capital gain for the taxable year as a consolidated net capital loss carry-over under (b) (2) (ix) (b) of this section (relating to net capital losses sustained by a corporation in years prior to the first taxable year in respect of which its income is included in the consolidated return) an amount exceeding in the aggregate the net capital gains of such corporation (determined without regard to any net capital loss carry-over) included in the computation of the consolidated net capital gain for the taxable year. [Subparagraph (10) added by T.D. 5341, Mar. 14, 1944, 9 F.R. 2844] (11) In the case of an affliated group formed at any time subsequent to March 14, 1941, or having among its members in the taxable year one or more subsidiaries which became members of the group subsequent to March 14, 1941, the consolidated net income for the taxable year, and for prior and subsequent taxable years to the extent affected by carrybacks and carry-overs from the taxable year, shall be determined subject to the following qualifications: (i) There shall be excluded in the case of the common parent corporation and in the case of any subsidiaries which were members of the group on March 14, 1941, those deductions from gross income otherwise allowable with respect to: (a) Sales or exchanges of capital assets, (6) Involuntary conversions and sales or exchanges of property subject to the provisions of section 117 (j), (c) Securities subject to the provisions of section 23 (g) (4) or sections 23 (k) or (d) Debts subject to the provisions of section 23 (k) (1). to the extent that such deductions otherwise allowable exceed in the aggregate: (1) In the case of capital losses, the excess of the aggregate capital gains over the aggregate capital losses of such corporations for the taxable year, or (2) In the case of ordinary losses, the aggregate of the ordinary net income of such corporations for the taxable year, (iii) (d) In the case of & corporation which became a member of the affiliated group subsequent to March 14, 1941, common parent corporatior or subsidiary, as the case may be, capital losses to the extent disallowed pursuant to the provisions of subparagraph (11) of this paragraph; 本 (ix) In the case of a corporation which became a member of the affiliated group subsequent to March 14, 1941, common parent corporation or subsidiary, as the case may be, gains and losses from involuntary conversions and from sales or exchanges of property subject to the provisions of section 117 (j) shall be determined subject to the qualifications prescribed in subparagraph (11) of this paragraph. (5), CODIFICATION: $23.31 (d) (2) was amended as follows, by Treasury Decision 5341, Mar. 14, 1944, 9 F.R. 2844: 1. The word "and" at the end of subdivision (ii) (b) was deleted, a comma was substituted for the semicolon at the end of (ili) (c), the word "and" was added, and a new inferior subdivision (d), reading as set forth above, was added. increased in an amount equal to any 1941, a member of an afiliated group excess of aggregate capital gains over within the meaning of section 141, or aggregate capital losses of such corpo- (ii) In case such corporation was a rations, member of an afiliated group on March such capital gains and losses and such 14, 1941, an amount which, together with ordinary net income being determined like losses computed subject to the pro visions of these regulations in the case pursuant to the provisions of these regulations but without regard to the pro of other members of the group during visions (d) (1) (iv) and (d) (2) (iii) (b) the taxable year which were affiliated of this section and without regard to the with such corporation on March 14, 1941, losses in question; within the meaning of section 141, is equal to the ordinary net income of such (ii) There shall be excluded in the corporation for the taxable year increased case of a subsidiary corporation which by the aggregate of the ordinary net inbecame a member of the affiliated group come and decreased by the aggregate of subsequent to March 14, 1941, those de. the ordinary net losses of other members ductions from gross income otherwise of the affiliated group during the taxable allowable with respect to: year which were affiliated with such cor(a) Sales or exchanges of capital as- poration on March 14, 1941, within the sets, meaning of section 141, and increased (b) Involuntary conversions and sales further in an amount equal to any excess or exchanges of property subject to the of aggregate capital gains over aggregate provisions of section 117 (j), capital losses of such corporations, (c) Securities subject to the provisions such capital gains and losses, and ordiof section 23 (g) (4) or section 23 (k) nary net income and net losses, as the (5), or case may be, being determined pursuant (d) Debts subject to the provisions of to the provisions of these regulations but section 23 (k) (1), to the extent that without regard to the provisions of parasuch deductions otherwise allowable are graphs (d) (1) (iv) and (d) (2) (iii) (6) attributable to events preceding the of this section and without regard to the date upon which such corporation be- losses in question; came a member of the group, and (iii) The portion of any loss otherwise (1) Being capital losses, exceed: allowable as a deduction for the taxable year which is disallowed pursuant to the (i) The capital gains reduced by all other capital losses of such corporation provisions of (i) and (ii) shall, to the extent that it constitutes a net capital for the taxable year, in the case in which loss within the provisions of section 117 such corporation was not, on March 14, 1941, a member of an affiliated group or a net operating loss within the provi sions of section 122, be considered as a within the meaning of section 141, or net capital loss or a net operating loss, (ii) In case such corporation was a . as the case may be, in respect of those member of an affiliated group on March members of the group by reference to 14, 1941, an amount which, together with which the amount of the deduction dislike losses computed subject to the pro- allowed under (1) and (ii) was detervisions of these regulations in the case of mined, originating, for the purpose of the other members of the group during the carry-back provisions, in a taxable year taxable year which were affiliated with subsequent to the last taxable year in such corporation on March 14, 1941, respect of which their income was inwithin the meaning of section 141, is cluded in a consolidated return, and, for equal to the aggregate capital gains re the purpose of the carry-over provisions, in a taxable year prior to the first taxduced by the aggregate of all other cap able year in respect of which their inital losses of such corporation and of come was included in a consolidated such other members of the group, or return; (2) Being ordinary losses, exceed: (iv) The provisions of subdivisions (i) (i) The ordinary net income of such and (ii) shall not apply with respect to corporation for the taxable year in- the common parent corporation of an creased in an amount equal to any excess affiliated group formed subsequent to of capital gains over capital losses for March 14, 1941, or to the common parent the taxable year, in the case in which corporation or subsidiaries of a group in such corporation was not, on March 14, existence on March 14, 1941, acquiring 29.22(b) (14)-1 29.22(c)-2 29.22(c)--6 29.22(d)-1 29.22(d)-7 new members subsequent to March 14, 1941, or with respect to subsidiaries becoming members of the group subsequent to March 14, 1941: (a) If the group consists solely of the common parent corporation and one or more subsidiaries created, directly or indirectly, by the common parent corporation or by other members of the group; (6) If, immediately after the corporation involved became a member of the group, common parent corporation or subsidiary, as the case may be, stock possessing at least 95 percent of the voting power of all classes of its stock then outtanding and at least 95 percent of each class of its nonvoting stock then outstanding is owned, directly or indirectly, by substantially the same interests by which such stock was owned on March 14, 1941; (c) If the affiliated group involved was formed, or the new subsidiary became a member of the group, as an incident to an involuntary conversion or to a transfer made pursuant to an order of the Securities and Exchange Commission, the Federal Communications Commission, the Interstate Commerce Commission, or a similar regulatory body of State or Federal Government; or (d) To the extent to which, upon consideration of the facts or circumstances presented by the particular case, the Commissioner determines that a consolidated net income computed with respect to the afiliated group but without regard to those subdivisions will not serve to distort the income tax liability of the group or of any of its members. (Subparagraph (11) added by T.D. 5341, Mar. 14, 1944, 9 F.R. 2844; amended by T.D. 5397, Aug. 11, 1944, 9 F.R. 9883, 10245] 29.22(k)-1 29.22(m)-1 29.22(n)-1 29.23(a)-15 29.23 (c)-2 29.23(g)-2 Mustering-out payments of military and naval forces. (Added] Valuation of inventories, (Amended] Inventories of livestock raisers and other farm ers. (Amended) Inventories under elective method. (Amended] Involuntary liquidation and replacement. maintenance payments; (Amended) (Added] Nontrade or nonbusiness expenses. (Amended] Federal duties and excise taxes. (Revised] Loss on stock of affiliate. (Amended) Bad debts. (Amended] Uncollectible deficiency upon sale of mortgaged or pledged property. (Amended) Worthless bonds and similar obligations. (Amended] Depletion of mines, oil and gas wells, other natural deposits, and timber; depreciation of improve ments. (Amended) Computation of depletion of mines (other than metal, coal, fluorspar, ball and sagger clay, rock asphalt, flake graphite, vermiculite, beryl, feldspar, mica, talc, lepidolite, spodumene, or barite mines, or potash or sulphur mines or deposits) on basis of discover y value. (Amended] 29.23(k)-1 29.23(k)-3 29.23(k)-4 29.23(m)-1 29.42-1 29.44-5 29.45-1 29.47-1 29.47-2 Sec. 29.23 (m)-5 Computation of depletion based on percentage of income in case of coal mines, metal mines, fluorspar mines, flake graphite mines, vermiculite mines, beryl mines, feldspar mines, mica mines, talc mines, lepidolite mines, spodumene mines, barite mines, ball and sagger clay mines, rock asphalt mines, and potash and sulphur mines or deposits. (Amended] 29.23(m)-10 Depletion; adjustments of accounts based on bonuses or advanced roy alty. (Amended) 29.23 (m)-13 Statement to be attached to return when depletion is claimed on percentage basis. (Amend ed] 29.23 (m)-14 Discovery of mines other than coal, metal, fluorspar, ball and sagger clay, rock asphalt, flake graphite, vermiculite, beryl, feldspar, mica, talc, lepidolite, spodumene, and barite mines, and sulphur and potash mines or deposits. (Amended] 29.23(m)-21 Computation of allowance for depletion of timber for given year. (Amend ed] 29.23 (0)-1 Contributions or gifts by individuals. (Amended) 29.23(p)-9 Contributions of an em ployer toward the purchase of retirement annuities (section 23 (p) (1) (B)). (Amended) 29.23(q)-1 Contributions or gifts by corporations. (Amend ed] 29.23(x)-1 Medical, dental, etc., ex penses. (Amended) 29.23(y)-1 Special deduction for blind individuals. (Added] 29.23 (aa)-1 Standard deduction. (Add ed] 29.25-1 Credits of individuals against net income. (Amended) 29.25--2 Earned income credit for taxable years beginning before January 1, 1944. (Amended] 29.25-3 Personal exemption and surtax exemptions. (Amended) 29 25-5 Personal exemption of mar ried person for taxable years beginning before January 1, 1944, (Amended] 29.51-1 When included in gross in come. | Amended] Gain or loss upon disposi tion of installment ob ligations. (Amended] Determination of the net taxable net income of a controlled taxpayer. | Amended) Returns for periods of less than 12 months. (Amended) Returns for period of less than 12 months on account of a change in accounting period. (Amended] RETURNS AND PAYMENT OF TAX Individual returns. (Amended) Form of return. (Amend ed) Return of income of minor. (Amended) Time for filing returns. (Amended] Records and income tax forms. (Amended] Date on which tax shall be paid. (Amended] ESTIMATED TAX 1 Declarations of estimated tax; taxable year beginning prior to January 1, 1945. Declarations of estimated tax; taxable years beginning after December 31, 1944. 29.51-2 29.51-3 29.53-1 29.54-1 29.56-1 29.58-1 29.58-2 129.58-1 was amended, a new $29.58-2 was added, former $$ 29.58–2 to 29.58-5, inclusive, were redesignated $ $ 29.58-3 to 29.58-6, inclusive, a new $ 29.58–7 was added, former $$ 29.58–6 to 29.58-8, inclusive, were redesignated $8 29.58–8 to 29.58–10, inclusive. and a new $ 29.58–11 was added. Sec. 29.583 Form and contents of dec. laration of estimated tax. 29.58-4 Joint declarations by hus band and wife. 29.58-5 Use of prescribed form. 23.58 6 Time and place for filing declarations; years beginning prior to January 1, 1944. 29.58-7 Time and place for filing declarations; years beginning after December 31, 1943. 29.58-8 Extension of time for Aling declarations. 29.58-9 Publicity of returns. 29.58-10 Payment of estimated tax; years beginning prior to January 1, 1944. 29.58-11 Payment estimated tax; years beginning after De cember 31, 1943. Subpart C-Supplemental Provisions RATES OF TAX 29.101-1 Proof of exemption prior to January 1, 1943; annual returns for accounting periods beginning prior to January 1, 1943. (Amended] 29.101-2 Proof of exemption on or after January 1, 1943; annual returns for accounting periods beginning on or after January 1, 1943. (Added] 29.107-3 Back pay attributable to prior taxable years. (Added] 29.108-1 Computation of tax for tax able years beginning in 1943 and ending in 1944. (Added] COMPUTATION OF NET INCOME 29.112(a)-1 Sales or exchanges. (Amended) 29.112(b) (7)-1 Corporate liquidations in calendar month in 1944. (Added] 29.112(b) (7)-2 Qualified electing share holder. (Added] 29.112(b)(7)-3 Making and filing of writ ten elections. (Added] 29.112(b)(7) 4 Treatment of gain. (Added] 29.112(b) (7)-5 Records to be kept and in formation to be filed with return. (Added] 29.112(b)(10)-1 Transfer of property of in solvent corporation in reorganization in bankruptcy or receivership proceeding. (Added] Sec. 29.112(b) (10)-2 Records to be kept and in formation to be filed. (Added) 29.112(c) 1 Receipt of other property or money in tax-free exchange not connected with corporate reorgani zation. (Amended] 29.112(e)-1 Nonrecognition of loss. (Amended] 29.112(g)-1 Purpose and scope of excep tion of reorganization ex changes. (Amended] 29.112(g) 4 Exchanges in reorganiza tion for stock or securities and other property or money. (Amended) 29.112(k)-1 Assumption of liabilities not to be taken into account for purpose of recognizing gain or loss. (Amended] 29.112(1):1 Exchange in connection with reorganization of insolvent corporation. (Added] 29.112(1)-2 Recognition of gain or loss upon exchange in taxable year beginning prior to January 1, 1943. (Added) 29.112(1) -3 Records to be kept and in formation to be filed. (Added] 29.112(m)-1 Gain from sale or exchange to effectuate policies of Federal Communications Commission. (Added] 29.112(m)-2 Nature and effect of elec tion. [Added] 29.112(m)-3 Reduction of basis of prop erty pursuant to election under section 112(m). (Added] 29.112(m)-4 Manner of election. (Add ed] 29.113(a)-1 Scope of basis for determin ing gain or loss. (Amend ed] 29.113(a)-2. General rule. (Amended] 29.113(a) (6)-1 Property acquired upon a ta x-free exchange. (Amended] 29.113(a) (7)-1 Property acquired by cor poration in reorganization after December 31, 1917. (Amended] 29.113(a) (14)-1 Property acquired prior to March 1, 1913. (Amend ed] 29.113(a) (18)-1 Basis of property received in certain corporate liquidations. (Amended] |
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