406
Effective date.
26 vie i^t^'
PUBLIC LAW 6 2 9 - J U N E 29, 1956
[70 S T A T.
"(3) This subsection shall apply to any distribution of property other than— " (A) money, " (B) inventory assets, as defined in section 312(b)(2) of the Internal Revenue Code of 1954, or " (C) distributions described in section 312(j) of the Internal Revenue Code of 1954." ^j^^ 'pj^g amendment made by this section to section 115 of the Internal Revenue Code of 1939 shall be effective as if it were a part of such section on the date of enactment of the Internal Revenue Code of 1939, except that it shall not apply to any taxable year of a shareholder which was a corporation and which tiled a return for such year reporting dividends in accordance with publicly announced litigation policies of the Secretary or his delegate which had not been revoked at the time such return was filed. No interest shall be allowed or paid in respect of any overpayment of tax resulting from the amendment made by this section. SEC. 4. TRADEMARK AND TRADE NAME EXPENDITURES. (a) Part VI of subchapter B of chapter 1 of the Internal Revenue Code of 1954 is hereby amended by inserting after section 176 thereof the following new section:
"SEC. 1 7 TRADEMARK AND TRADE NAME EXPENDITURES. 7. " (a) ELECTION To AMORTIZE.—Any trademark or trade name expenditure paid or incurred during a taxable year beginning after December 31, 1955, may, at the election of the taxpayer (made in accordance with regulations prescribed by the Secretary or his delegate), be treated as a deferred expense. In computing taxable income, all expenditures paid or incurred during the taxable year which are so treated shall be allowed as a deduction ratably over such period of not less than 60 months (beginning with the first month in such taxable year) as may be selected by the taxpayer in making such election. The expenditures so treated are expenditures properly chargeable to capital account for purposes of section 1016(a)(1) (relating to adjustments to basis of property). " (b) TRADEMARK AND TRADE NAME EXPENDITURES DEFINED.—For
purposes of subsection (a), the term 'trademark or trade name expenditure' means any expenditure which— "(1) is directly connected with the acquisition, protection, expansion, registration (Federal, State, or foreign), or defense of a trademark or trade name; "(2) is chargeable to capital account; and "(3) is not part of the consideration paid for a trademark, trade name, or ousiness. "(c) T I M E FOR AND SCO^E OF ELECTION.—The election provided by
subsection (a) shall be made within the time prescribed by law (including extensions thereof) for filing the return for the taxable year during which the expenditure is paid or incurred. The period selected by the taxpayer under subsection (a) with respect to the expenditures paid or incurred during the taxable year which are treated as deferred expenses shall be adhered to in computing his taxable income for the taxable year for which the election is made and all subsequent years. " (d) CROSS REFERENCE.— "For adjustments to basis of property for amounts allowed as deductions for expenditures treated as deferred expenses under this section, see section 1016(a) (16)."
(b) The table of sections of part VI of subchapter B of chapter 1
�
