New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1921-08-16

visions of this paragraph shall apply
to the acquisition of such property in
terests as are specified in subdivision
(c) or (e) of section 402
: "(b) The basis for asccrtaining the
gain derived or loss sustained from
the sale or other disposition of prop
ierty, real, personal or mixed, acquired
before March /, 1913, shall be the
same as that provided by subdivision
I(a); but
"u) If its fair market price or value
as of March /, 1913, Is in excess of
such basis, the gain to be included in
/ the gross income shall be the excess
of the amount realized therefor over
such fair market price or value.
"(2) If it's fair msrkeS price or
value as of March /, 1918, is lower
than such basis, the deductibe loss
is the excess of the fair market price
or value as of March /, 1918. over the
amount realized therefor; and
"t3j II the amount realized there
for is more than such basis, but less
than its fair market price or value as
of March /, 1913, or less than such
basis. but more than such fair market
price or value, no gain shall be in
cluded in and no loss Deducted from
SHC kIOSS IHCOIne.
."(c) In ascertaining the gain de-
rived or loss sustained from a sale or
other disposition, of property, real.
personal, or mixed, proper adjustment
shall be made for ~ any expenditure
properly chargeable to capital ac-
count, or CD any item or loss, i'm
pairment, exhaustion, wear and tear,
| obsolescence, amortization, depletion,
depreciation, or similar expense prop
erly chargeable with respect to such
property.
Must Have Marketable Value
"(d) For the purpose of this title.
on an exchange of property, real, per-
y sonal or mixed or any other such prop-
erty, no gain or loss shall be recog-
nlzed unless the property received in
exchange has definite readily realiz-
able market value; but even if the
property received in exchange has a
readily Irealizable market value, no
gain or loss shall be recognized:
cd When any such property held
Tor investment or for productive use
IN trade or business (not including
stock IN trade or other property held
/ primarily for sale) is exchanged for
property of like kind or use;
"(2) When in the organization or the
reorganization of one or more cornora-
tons person receives in place Of any
such property (including stock or Sc
cur1tles) owned by him new stock or
securities, the word Reorganization.
as used in this paragraph, includes a
merger, consolidation (however effect
ed, recapitulation, or mere change IN
identity, form or place of organization
; of corporation; and
~ When (a) person transfers
any such property to corporation
land Immediately after the transfer is
IN control OF such corporation, or (b)
group of persons transfers any such
property to corporation, and immedi-
ately after the transfer is in control
OF such corporation; and when the
amounts of stock, securities, or both,
received by such person or group of
persons are in substantially the same
proportion as their interest in the prop
erty before such transfer. For the
purpose of this paragraph person or
group of persons is 'in control of a
corporation when owning at least 80
per centum of the voting stock and 80
per centum of all other classes of such
stock.
Exchange of Property
"(e) Where property is exchanged
lOSS
Is recognized under the provisions of
subdivision CD, the property received
shall. for the purposes of this section,
be treated as taking the place of the
property exchanged therefor.
"(f) The basis for ascertaining al
iowable deductions for loss, exhaus-
tion, wear and tear, obsolescence, amor
tization and other like deductions. ex-
ceept those authorized in paragraph (10>
OF subdivision (a) of section 214 and
OF paragraph 90 of subdivision (a)
of section 234. shall be the same basis
as that provided by subdivisions (a)
and (b) of this section"
Sec. 2O4. Section 204 of the revenue
act of 1918 is amended to read as
follows:
Sec. 204. (a) That as used in this
section the term net loss means only
net losses resulting after December
81, 1870, from the operation of any
business regularly carried on by the
taxpayer (lncluding losses sustained
from the sale or other disposition Of
real estate, machinery and other capital
assets used in the conduct Of such
business); and when SO resulting
means the excess of the deductions al
lowed by section 214 or 234 of this
act, as the case may be, over the sum
of the following: CD The gross income
OF the taxpayer for the taxable year,
CD any interest received free from
taxation under this title, (3) the
amount of deductible losses not sus
tanned in such business, (4) amounts
allowed as deduction under paragraph
60 of subdivision (a) of section 234
and tb) SO much Of the depletion de.
duction allowed with respect to anv
mine, oil or gas we'll as is based upon
discovery value in lieu of cost.
May Carry Losses Over
"(b) If for any taxable year begin
ming after December 81, 1920, it APP
pears upon the production of evidences
satisfactory to the commissioner that
any taxpayer has sustained a net loss.
the amount thereof shall be deducted
from the net income of the taxpayer
for the succeeding taxable year: and
II such net loss is jim excess of the net
income for such succeeding taxable
year. the amount of such excess shall
be allowed as a deduction in comput-
ing the net income for the next sue
ceeding taxable year; the deduct ~ -
all cases to be made under regui 10.
prescribed by the commissioner .ea
the approval of the secretary"
"(c) in ascertaining whether a net
loss Gas defined in this section) has
resulted in any taxable year, the COM
putation shall be made without ref
erence to the provisions of Section