72 S T A T. ]
PUBLIC LAW 8 5 - 8 6 6 - S E P T. 2, 1958
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SEC. 59. MITIGATION OF EFFECT OF LIMITATIONS. (a) CIRCUMSTANCES OF ADJUSTMENT.—Section 1312 (relating to
26 USC 1312.
circumstances of adjustment) is amended by renumbering paragraph (6) as (7), and by inserting after paragraph (5) the following new paragraph: " (6) CORRELATIVE DEDUCTIONS AND CREDITS FOR CERTAIN RELATED
CORPORATIONS.—The determination allows or disallows a deduction (including a credit) in computing the taxable income (or, as the case may be, net income, normal tax net income, or surtax net income) of a corporation, and a correlative deduction or credit has been erroneously allowed, omitted, or disallowed, as the case may be, in respect of a related taxpayer described in section 1313 (c)(7). " (b) ADJUSTMENTS UNAFFECTED BY OTHER ITEMS.—The second sentence of section 1314(c) (relating to certain adjustments for closed taxable years) is amended by striking out "Other than in the case of an adjustment resulting from a determination under section 1313(a) (4), the" and inserting in lieu thereof "The". (c) EFFECTIVE DATE.—The amendments made by subsections (a) and (b) shall apply to determinations (as defined in section 1313 (a)) made after November 14, 1954. SEC. 60. COMPUTATION OF TAX WHERE TAXPAYER RESTORES SUBSTANTIAL AMOUNT HELD UNDER CLAIM OF RIGHT.
26 USC 1313.
(a) DEFINITION OF CORRESPONDING PROVISIONS OF 1939 CODE.—
The last sentence of section 1341(a) (relating to definition of corresponding provisions of the 1939 Code) is amended by inserting before the period at the end thereof "and subchapter E of chapter 2 of such code". (b) REFUNDS OR REPAYMENTS BY REGULATED PUBLIC UTILITIES.—
The last sentence of section 1341(b)(2) (relating to special rules applicable to computation of tax where taxpayer restores substantial amount held under claim of right) is amended to read as follows: "This paragraph shall not apply if the deduction arises out of refunds or repayments with respect to rates made by a regulated public utility (as defined in section 1503(c) without regard to paragraph (2) thereof) if such refunds or repayments are required to be made by the Government, political subdivision, agency, or instrumentality referred to in such section, or by an order of a court, or are made in settlement of litigation or under threat or imminence of litigation." (c) PAYMENTS OR REPAYMENTS PURSUANT TO PRICE REDETERMINA-
TION.—Section 1341(b)(2) is further amended by adding at the end thereof the following new sentence: "This paragraph shall not apply if the deduction arises out of payments or repayments made pursuant to a price redetermination provision in a subcontract entered into before January 1, 1958, between persons other than those bearing the relationship set forth in section 267(b), if the subcontract containing the price redetermination provision is subject to statutory renegotiation and section 1481 (relating to mitigation of effect of renegotiation of Government contracts) does not apply to such payment or repayment solely because such payment or repayment is not paid or repaid to the United States or any agency thereof." (d) TECHNICAL AMENDMENT.—Section 1341(b) is further amended by adding at the end thereof the following new paragraph: "(3) If the tax imposed by this chapter for the taxable year is the amount determined under subsection (a)(5), then the deduction referred to in subsection (a)(2) shall not be taken into account for any purpose of this subtitle other than this section." (e) EFFECTIVE DATE.—The amendment made by subsection (b) shall apply with respect to taxable years beginning after December 98395-59-PT. 1-104
26 USC 1341.
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