1060 SIXTY-FIFTH ooNeREss. sas. 111. ou. 18. 1919. ”r'*?°“ TAX-. (e An distribution made durin the irst sixt da s of an efiiixvdiisygirg. taxable yiear shall be deemed to hawge been made friim eidrnings 05; profits accumulated during preceding taxable years; but any distriution made during the remainder of the taxable year shall be deemed to have been made from earnings or profits accumulated between the close of the preceding taxa le year and the date of distribution, to the extent of such earnings or profits, and if the books of the corporation do not show the amount of such earnings 01* profits, the earnings or profits for the accounting period withm which the distribution was made shall be deemed to have been accumulated ratably during such period. °““°"°“· Basis Fon DETERMINING GAIN on Loss. p,€'P°§{S,§{‘S“°‘·°‘°··°‘ Sec. 202. (a) That for thzpurpose of ascertaining the gain derived or loss sustained from the s e or other disposition of property, real, personal, or mixed, the basis shall _ Mgtggugjggmr °‘° H (1) In the case of property acquired before March 1, 1913, the fair S bm market price or value of such property as of that date; and qmfm ‘·`1“°'”'Y W (2) In the case of property acquired on or after that date, the cost thereof; or the mventory value, if the mventory IS made H1 accordan<(j§)w'i;>1ll1 section 203. h d f h h Ou exchanges ci en ro rt isexc e orot er 1*0 rt te I‘0 Pt pr°p°m° received in eiixclilgngii shall fblrigthe urpose of d):ter¥i1iningPgaPu€i oil loss be treated as the equivalent ofp cash to the amount of its fair F°¤‘°°*H¤¤*¤>¤i¤¤¤· market value, if any; but when in connection with the reorganization, merger, or consolidation of a corporation a person receives in place of stock or securities owned by hun new stock or secnmties of no greater aggregate par or face value, no gain or loss shall be deemed to occur rom the exchange, and the new stock or securities received shall bcitreatpd as taking the place of the stock, securities, or roperty exc ange . _ m$,¤*{,*x;'Q;gg @$8 gg &hen m the case of any such reorganization, me er or 00118011* ¤xc1ia¤:¤ds¤<>cks.¤tc. datum the aggregate par or face value of the new stolgr or securities received is in excess of the aggregate par or face value of the stock or securities exchanged, a like amount in par or face value of the new stock or securities received shall be treated as takin the place of the stock or securities exchanged, and the amount ofg the excess in par or face value shall be treated as a gain to the extent that the air market value of the new stock or securities is greater than the cost (or if acquired prior to March 1, 1913, the fair market value as of that date) of the stock or seciuities exchanged. hmm"' mvnuronms. m;’§§§f‘ °° °"°°"‘“‘“° Sec. 203. That whenever in the opinion of the Commissioner the use of inventories IS necessary in order clearly to determine the income of any taxpayer, inventories shall be taken by such taxpayer upon such basis as the Commissioner, with the approval of the Secretary, may prescribe as conforming as nearly as may be to the best accounting practice in the trade or business and as most clearly W E reflecting the income. · - t ima. NET LOSSES. Inre I business. , _ gu: Sec. 204. (a) That as used m this section the term "net loss" on sms of mm refers only to net lOSS8S·I'BSI1lt1Dg from either (1) the o eration of 811}* wmm,m_,5}{,,,,_ °' business regularly carried on by the taxpayer, or (2i) the bona fide sale by the taxpayer of plant, buildings, machinerv, uipmeut OT other facilities, constructed, installed or acquired b cthe taxpayer on or after April 6, 1917, for the production of articles contributing
