Evening star., 1939-07-20

(b) ALLEGATION OF DEDUC-
TIONS-In the case of a taxpayer,
other than an individual the de-
ductions allowed in this section shall
be allowed only for and to the eX-
tent that they are connected with
income arising from sources within
the District and taxable under this
title to nonresident taxpayer:
and the proper apportionment and
ALLEGATION of the deductions with re-
spect TO sources of income within
and without the District shall he de-
termlned by processes or formulas
Of general apportionment under
rules ano regulations to be pre-
scribed by the Commissioners. The
so-called charitable contribution de-
duction allowed by subparagraph
(l0) of paragraph (a) of this sec
ton shall be allowed whether or not
connected with income from sources
within the District.
fc) CORPORATIONS AND NON-
RESIDENT INDIVIDUALS TO
FILE RETURN OF TOTAL IN
COME-A corporation shall receive
the benefits of the deductions al
lowed to it under this title only by
filing or causing to be flied with the
assessor a true and accurate re-
turn of its total income received
from all sources, whether within or
without the District.
Gains or Losses From Sale of Assets.
SECTION s (a) GAIN OR LOSS
IN CAPITAL ASSETS NOT REC
OGNIZED-No gain or loss from the
sale or exchange of a capital asset
shall be recognized in the computa-
tlon OF net income under this title.
For the purposes Of this title, "capi-
tai assets means property held by
the taxpayer for more than two
years whether or not connected
with his trade or business) but does
not include stock in trade of the
taxpayer or other property of a
kind which would properly be in
cluded in the inventory of a tax
payer if on hand at the close of the
taxable year, or property held by
the taxpayer primarily for sale to
customers in the ordinary course of
his trade or business.
(b) GAIN OR LOSS IN ASSETS
OTHER THAN CAPITAL-Gains
or losses from the sale or exchange
of property other than a capital
asset shall be treated in the same
manner as other income or deduct
ible losses, and the basis for COM
putting such gain or loss shall be the
cost of such property or, if acquired
by some means other than purchase.
the fair market value thereof at the
date of acquisition.
Exchanges.
SECTION 7-Where propertv is
exchanged for other property, the
property received in exchange for
the purpose of determining the gain
or loss shall be treated as the equiv
alent of cash to the amount of its
fair market value; but when in con-
nection with the reorganization,
merger. or consolidation of a cor
poration taxpayer receives, in
place OF stock or securities owned
by him, new stock or securities of
the reorganized, merged, or con-
solidated corporation, no gain or
loss shall be deemed to occur from
the exchange until the new stock
or securities are sold or realized
upon and the gain or loss is definite
ly aScertained, until which time the
new stock or securities received
shall be treated as taking the place
of the stock and securities ex-
changed; provided such reorganiza-
ton, merger, or consolidation is q
reorganization" within the meaning
of the term reorganization" as de-
fined in section 112 (g) of the Fed
eral Revenue Act of 1896.
Deductions Not Allowed.
SECTION 8 (a) GENERAL RULE
In computing net income no de-