An Act to amend section 172 of the Internal Revenue Code of 1954 to provide a 7-year net operating loss carryover for certain regulated transportation corporations
PL 87-710 (H.R.12526), enacted 09/27/1962

6 ^ 
PUBLIC LAW 87-710-SEPT. 27, 1%2 
[76 STAT. 
shall receive as an ordinary creditor an amount equal to the value of 
his interest in the dissolved partnership with interest, or, at his option 
or at the option of his legal representative, in lieu of interest, the 
profits attributable to the use of his right in the property of the dis-
solved partnership; provided that the creditors, or the representative 
of the retired or deceased creditors of the dissolved partnership as 
against the separate partner, shall have priority on any claim arising 
under this section, as provided by section 41 (8) of this Act. 
SEC. 43. ACCRUAL or EIGHT TO ACCOUNT.—The right to an account 
of his interest shall accrue to any partner, or his legal representative, 
as against the winding up partners or the surviving partners or the 
person or partnership continuing the business, at the date of dissolu-
tion, in the absence of anj'^ agreement to the contrary. 
Approved September 27, 1962. 
Public Law 87-710 
September 27, 1962 
A N A C T 
[H. R
y 12526] 
To amend section 172 of the Internal Revenue Code of 1954 to provide a seven-
year net operating loss carryover for certain 
regulated 
transportation 
corporations. 
Be it enacted hy the Seriate avid House of Representatives 
of the 
Taxes. 
United States of America in Congress assembled, That (a) subsection 
Operating loss 
(b) of SBctiou 172 of the Internal Revenue Code of 1954 (relating to 
'^^^irrt'^'ieyg. 
net operating loss deduction) is amended to read as follows: 
"(b) NET OPERATING LOSS CARRYBACKS AND CARRYOVERS.— 
"(1) YEARS TO WHICH LOSS MAY BE CARRIED.—A net operating 
loss for any taxable year— 
"(A) ending after December 31, 1957, shall be a net op-
erating loss carryback to each of the 3 taxable years preceding 
the taxable year of the loss, and 
"(B) ending after December 31, 1955, shall (except as 
provided in subparagraph (C)) be a net operating loss carry-
over to each of the 5 taxable years following the taxable year 
of such loss, or 
"(C) ending after December 31, 1955, in the case of a tax-
payer which is a regulated transportation corporation (as 
defined in subsection ( j ) ( l ) ) , shall (except as provided in 
subsection (j)) be a net operating loss carryover to each of 
the 7 taxable years following the taxable year of such loss. 
" (2) AMOUNT OF CARRYBACKS AND CARRYOVERS.—Except as pro-
vided in subsections (i) and (j), the entire amount of the 
net operating loss for any taxable year (hereinafter in this section 
"Loss year." 
referred to as the 'loss year') shall be carried to the earliest of the 
taxable years to which (by reason of paragraph (1)) such loss 
may be carried. The portion of such loss which shall be carried 
to each of the other taxable years shall be the excess, if any, of 
the amount of such loss over the sum of the taxable income for 
each of the prior taxable years to which such loss may be carried. 
For purposes of the preceding sentence, the taxable income for 
any such prior taxable years shall be computed— 
"(A) with the modifications specified in subsection (d) 
other than paragraphs (1), (4), and (6) thereof; and 
"(B) by determining the amount of the net operating loss 
deduction without regard to the net operating loss for the 
loss year or for any taxable year thereafter, 
and the taxable incoine so computed shall not be considered to be 
less than zero." 
76 STAT. ] 
PUBLIC LAW 87-710-SEPT. 27, 1962 
649 
(b) Section 172 of such Code is amended by redesignating sub-
section (j) as subsection (k) and by inserting after subsection (i) 
72 stat. i678. 
the following new subsection: 
"(j) 
CARRYOVER OF NET OPERATING I ^ S S FOR CERTAIN REGULATED 
TRANSPORTATION CORPORATIONS.— 
"(1) DEFINITION.—For purposes of subsection (b) (1) (C), the Supra. 
term 'regulated transportation corporation' means a corporation— trai^^ort^^ol 
"(A) 80 percent or more of the gross income of which corporation." 
(computed without regard to dividends and capital gains and 
losses) for the taxable year is derived from the furnishing 
or sale of transportation described in subparagraph (A), 
(C)(i), (E), or (F) of section 1503(c)(1) and taken into 
68A stat. 36$. 
account for purposes of section 1603(c) (2), 
"(B) which is described in section 1503(c) (3), or 
"(C) which is a member of a regulated transportation 
system. 
"(2) REGULATED TRANSPORTATION SYSTEM.—For purposes of 
this subsection, a corporation shall be treated as a member of a 
regulated transportation system for a taxable year if— 
"(A) it IS a member of an affiliated group of corporations 
making a consolidated return for such taxable year, and 
"(B) 80 percent or more of the aggregate gross income 
of the members of such affiliated group (computed without 
regard to dividends and capital gains and losses) for such 
taxable year is derived from sources described in paragraph 
(1)(A). 
For purposes of subparagraph (B), income derived by a corpo-
ration described in section 1603(c)(3) from leases described in 
subparagraph (A) thereof shall be considered as derived from 
sources described in paragraph (1)(A). 
"(3) LIMITATION.—For purposes of subsection (b)(1)(C)— 
"(A) a net operating loss may not be a net operating loss 
carryover to the 6th taxable year following the loss year un-
less the taxpayer is a regulated transportation corporation 
for such 6th taxable year; and 
"(B) a net operating loss may not be a net operating loss 
carryover to the 7th taxable year following the loss year 
unless the taxpayer is a regulated transportation corporation 
for the 6th taxable year following the loss year and for such 
7th taxable year. 
"(4) 
TAXABLE YEARS BEGINNING I N 1953 AND ENDING I N 1 9 5 6 . — 
In the case of a net operating loss for a taxable year beginning in 
1955 and ending in 1956, the amount of such loss which may be 
carried— 
"(A) to the 6th taxable year following the loss year shall 
be the amount which bears the same ratio to the amount 
which (but for this paragraph) would be carried to such 6th 
taxable year as the number of days in the loss year after 
December 31, 1955, bears to the total number of days in the 
loss year, and 
"(B) to the 7th taxable year following the loss year shall 
be the amount (if any) by which (i) the amount carried 
to the 6th taxable year (determined under subparagraph 
(A)), exceeds (ii) the taxable income (computed as pro-
vided in subsection (b) (2)) for such 6th taxable year." 
SEC. 2. The amendments made by the first section of this Act shall 
apply only with respect to net operating losses for taxable years 
ending after December 31, 1955. 
Approved September 27, 1962,