76 STAT. 3
PUBLIC LAW 8 7 - 8 3 4 - O C T. 16, 1962
For purposes of the preceding sentence, the taxable income shall be determined without regard to any deduction under section 166(c), and ther portion thereof allocable to each part year shall be determined on the basis of the ratio which the number of days in such part year bears to the number of days in the entire taxable year. " (e) LOANS DEFINED.—For purposes of this section— " (1) QUALIFYING REAL PROPERTY LOANS.—The term 'qualifying real property loan' means any loan secured by a n interest in improved real property or secured by an interest in real property which is to be improved out of the proceeds of the loan, but sUch term does not include— " (A) any loan evidenced by a security (as defined in section 165(g)(2)(C)); " (B) any loan, whether or not evidenced by a security (as defiined in section 1 6 5 (g)(2)(C)), the primary obligor on which is— " (i) a government or political subdivision or instrumentality thereof; "^ii) a bank (as defined in section 581); or "(iii) another member of the same affiliated group; " (C) any loan, to the extent secured by a deposit in or share of the taxpayer; or " (D) any loan which, within a 60-day period beginning in one taxable year of the creditor and ending in its next taxable year, is made or acquired and then repaid or disposed of, unless the transactions by which such loan was made or acquired and then repaid or disposed of are established to be for bona fide business purposes. For purposes of subparagraph (B) (iii), the term 'affiliated group' has the meaning assigned to such term by section 1504(a); except that (i) the phrase 'more than 50 percent' shall be substituted for the phrase 'at least 80 percent' each place it appears in section 1504(a), and (ii) all corporations shall be treated as includible corporations (without any exclusion under section 1504(b)). "(2) NONQUALIFYING LOANS.—The term 'nonqualifying loan' means any loan which is not a qualifying real property loan. "(3) LOAN.—The term 'loan' means debt, as the term 'debt' is used in section 166. "(f)
981
26 USC lee.
26 USC 165.
26 USC i504.
DISTRIBUTIONS TO SHAREHOLDERS.—
"(1) IN GENERAL.—For purposes of this chapter, any distribution of property (as defined in section 317(a)) by a domestic 26 USC 317. building and loan association to a shareholder with respect to its stock, if such distribution is not allowable as a deduction under section 591. shall be treated as made— " (A) first out of its earnings and profits accumulated in taxable years beginning after December 31, 1951, to the extent thereof, " (B) then out of the reserve for losses on qualifying real property loans, to the extent additions to such reserve exceed the additions which would have been allowed under subsection (b)(4), " (C) then out of the supplemental reserve for losses on loans, to the extent thereof, " (D) then out of such other accounts as may be proper. This paragraph shall apply in the case of any distribution in redemption of stock or m partial or complete liquidation of the association, except that any such distribution shall be treated as made first out of the amount referred to in subparagraph (B), second out of the amount referred to in subparagraph (C), third
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