72 S T A T. ]
PUBLIC LAW 8 5 - 8 6 6 - S E P T. 2, 1958
SEC. 55. REAL PROPERTY SUBDIVIDED FOR SALE. Section 1237(a)(1) (relating to real property subdivided for sale) is amended by striking out "or, in the same taxable year" and inserting in lieu thereof "and, in the same taxable year". SEC. 56. GAIN FROM SALE OF CERTAIN PROPERTY BETWEEN SPOUSES, ETC. Section 1239 (relating to gain from sale of certain property between spouses or between an individual and a controlled corporation) is amended by adding at the end thereof the following new subsection:
1645
26 USC 1237.
26 USC 1239.
"(c) SECTION NOT APPLICABLE W I T H EESPECT TO SALES OR E X CHANGES MADE ON OR BEFORE MAY 3, 1951.—This section shall apply
only in the case of a sale or exchange made after May 3, 1951." SEC. 57. SMALL BUSINESS INVESTMENT COMPANIES. (a) LOSSES ON SMALL BUSINESS INVESTMENT COMPANY STOCK AND LOSSES OF SMALL BUSINESS INVESTMENT COMPANIES.—Part IV of sub-
chapter P of chapter 1 (relating to special rules for determining capital gains and losses) is amended by adding at the end thereof the following new sections: "SEC. 1242. LOSSES ON SMALL BUSINESS INVESTMENT COMPANY STOCK. "If— "(1) a loss is on stock in a small business investment company operating under the Small Business Investment Act of 1958, and "(2) such loss would (but for this section) be a loss from the sale or exchange of a capital asset, then such loss shall be treated as a loss from the sale or exchange of property which is not a capital asset. For purposes of section 172 (relating to the net operating loss deduction) any amount of loss treated by reason of this section as a loss from the sale or exchange of property which is not a capital asset shall be treated as attributable to a trade or business of the taxpayer. "SEC. 1243. LOSS OF SMALL BUSINESS INVESTMENT COMPANY. "In the case of a small business investment company operating under the Small Business Investment Act of 1958, if— "(1) a loss is on convertible debentures (including stock received pursuant to the conversion privilege) acquired pursuant to section 304 of the Small Business Investment Act of 1958, and "(2) such loss would (but for this section) be a loss from the sale or exchange of a capital asset, then such loss shall be treated as a loss from the sale or exchange of property which is not a capital asset." (b)
26 USC 172.
'^"'^' P* ^^^'
DIVIDENDS RECEIVED BY SMALL BUSINESS INVESTMENT COM-
PANIES.—Section 243 (relating to dividends received by corporations) is amended— (1) by striking out in subsection (a) "In the case of a corporation" and inserting in lieu thereof " I n the case of a corporation (other than a small business investment company operating under the Small Business Investment Act of 1958)"; (2) by redesignating subsection (b) as (c), and by inserting after subsection (a) the following new subsection: "(b) SMALL BUSINESS INVESTMENT COMPANIES.—In the case of a small business investment company operating under the Small Business Investment Act of 1958, there shall be allowed as a deduction an amount equal to 100 percent of the amount received as dividends (other than dividends described in paragraph (1) of section 244, relating to dividends on preferred stock of a public utility) from a domestic corporation which is subject to taxation under this chapter."; and
26 USC 243.
^6 USC 244.
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