The sun. [volume] (New York [N.Y.]) 1916-1920, 1919-02-07

treated as taking the place of the stock
or securities exchanged. and the amount
of the excess In par or face value SHAH
be treated as a gain to the extent that
the fair market value OF the new stock
or securities is greater than the cost Cor
II acquired prior to March !. 1913, the
fair market value as OF that date) OF the
stock or securities exchanged.
INVENTORIES.
Sec. 200. That whenever in the opinion
OF the Commissioner the use of inven-
tories is necessary in order clearly to de-
termine the income OF any taxpayer. In
ventories shall be taken by such tax
payer upon such basis as the Commits
sioner. with the approval Of the secre-
tary, may prescribe as conforming as
nearly as may be to the best accounting
practice in the trade or business and as
most clearly rejecting the income.
NET LOSSES.
Sec. 204 (a) That as used in this sec
ton the term met loss refers only to
net losses resulting from either CD the
operation OF any business regularly car
RED on by the taxpayer. or (2) the bona
fide sale by the taxpayer OF plant. build
ings. machinery. equipment or other ia
cilities, constructed. installed or acquired
by the taxpayer on or after April 6, 1917.
for the production Of articles contribute
Ing to the prosecution OF the present
war and when so resulting means the
excess of the deductions allowed by law
Excluding in the case OF corporations
amounts allowed as deduction under
paragraph 90 Of subdivision ca Of sec
ton e34) over the sum Of the gross In
come Plus any interest received free
under Title III
CD II for any taxable year beginning
after October 81, 1918. and ending prior
to January I, 1920. II appears upon the
production of evidence satisfactory TO
the Commissioner that any taxpayer has
sustained a net loss, the amount OF such
net loss shall under regulations pre-
scribed by the Commissioner with the
approval Of the secretary be deducted
from the net income of the taxpayer for
the preceding taxable year and the
taxes imposed By this title and ny Title
Ill for such preceding taxable year shall
be predetermined accordingly. Any
amount found 10 DC due TO the taxpayer
upon the basis OF such redetermination
shall be credited or refunded to the tax
payer in accordance with the provisions
OF section e52 II such net loss Is In ex-
cess OF the net income for such preced-
ing taxable year, the amount OF such
excess shall under regulations prescribed
by the Commissioner with the approval
of the Secretary be allowed as a deduc-
ton in computing the net income for the
succeeding taxable year.
(C) The benefit Of this section shall
be allowed to the members Of partner
ship and the beneficiaries OF an estate
or trust under regulations prescribed by
the Commissioner with the approval OF
the Secretary.
FISCAL YEAR WITH DIFFERENT RATES
Sec 205. tA) That II a taxpayer
makes return for a fiscal year beginning
in 1917 and ending in 1918 his tax IN
der this title for the first taxable year
shall be the sum of: CD The same pro-
portion Of a tax for the entire period
computed under title ! of the revenue
act of 1916 as amended by the revenue
act OF 1917 and under title I OF the
revenue act OF 1917. which the portion Of
such period falling within the calendar
year 1917 Is OF the entire period. and "a
the same proportion of a tax for the
entire period computed under this title
at the rates for the calendar year 1918
which the portion OF such period falling
within the calendar year 1913 is Of the
entire period: Provided, that in the case
OF personal service corporation the
amount to be paid shall be only that
specified In clause G).
Any amount heretofore or hereafter
paid on account OF the tax imposed for
such fiscal year by title OF the revenue
act OF 1915 as amended by the revenue
act OF 1917. and by title OF the revenue
act OF 1917, shall be credited toward
the payment Of the tax imposed for such
fiscal year by this act. and II the amour,
10 paid exceeds the amount OF such tai
f.. imposed by this act. or. In the case OF a
personal service corporation, the amount
| specified In clause ~. the excess shall
be credited or refunded in accordance
with the provisions OF section 252.
| OBJ II a tax payer makes a return for
n fiscal year beginning In 1913 and end
! ing in 1919, the tax under this title 70!
such fiscal year shall be the sum OF: az
! The same proportion of a tax for tn,
entire period computed under this It'll,
at the rates specified for the calendar
year 1918 which the portion OF suci
period falling within the calendar veal
1918 IS of the entire period. and (2) tn,
same proportion OF a tax for the entire
period computed under this title at tn,
rates specified for the calendar yea,
1919 which the portion OF such period
falling within the calendar year 1919 Il
of the entire period.
Co II fiscal year OF a partnership
begins in 1917 and ends in 1918 or be
gins in 1918 and ends In 1919. then not
| withstandlng the provisions OF sub
division (B) Of section 2lS a.. tn
rates for the calendar year during which
such fiscal year begins shall apply to al
amount Of. each partners share OF sucl
partnership net income determined un
der the law applicable TO such year
equal 10 the proportion which the par
" such fiscal year falling within sucl
calendar year bears to the full fisca
year. and 90 the rates for the calenda
year during which such fiscal year end
shall apply 10 An amount OF each part
ner's share of such partnership net In
come determined under the law ap
pllcable TO such calendar year, equal 4
the proportion which the part OF sucI
fiscal year falling within such calendd
year bears 20 the full fiscal year: Pro
vided, that In the case OF a personal ser
vice corporation with respect to a fscs
year beginning In 1917 and ending Il
, 1918. tho amount specified II clause Il
shall not be subject to normal tax.
PARTS OF INCOME SUBJECT T,
, RATES For DIFFERENT YEARS
, Sec. 2C6. That whenever parts of
Taxpayers income are subject TO rate
for different calendar years. the par
, subject TO the rates for the most recen
calendar year shall be placed In tn
lower brackets of the rate schedule pro
, vided in this title. the part subject I
-, , the rates for the next preceding calen
dar year shall be placed in the mex
higher brackets OF the rate schedule ap
, pl!cabln to that year. and so on unit
the entire net income has been az
counted for. In determining the incom
any deductions. exemptions or credits q
kind not plainly and properly charge