197 5 TITLE 26.-——·INTEI `Pnw I.-4·GENEI§AL PROVISIONS _ ‘ 931. Dciditiqm.-—Whc¤ used in. this title-- . . · ’ (A`) Thai ‘ ‘ taxable Y88! " means the cvllendug year, or me nscal year - ending (hiring such wleudm ~ year; upon the basis of which the net income is ·compp;eq under sectiim ·212`
- gr @2. The term €‘ uml yur? mgausmz acboduting period of
tvéclve moéths eudlhg on the last day of any uiouth othe1·‘the11· peqembcr. The tcm “ tainble year " includes, ih the. éase ot, g mmm made for a` `fmgticnal part at A year imdér thé provigmm dt this title or under regulations »preséribed by the commimioner with the l£9D1‘QV¤l of 'the Seéretary, the period for which smh return is made The first;_taxab1e.year, to be called me taxable, Y&§1'·`19%,- shall bg tbe calendar year 1925_0r my Escal year ending duriuk the `calendar ymz 1925; W " (bi The térm "‘·§duciary_" means a guanjdiau, trustee, execu-_ toy, administrator, tfeéeiver, conservator, of any peréén acting in iuy Qducinry cgpacity for any person, -- ·” * *· ·· ·- (c) The term' “ withholding ageut?’ means any persoh — ije—" quired'_‘t0 deduct and Qwithhold any tax under the provisions qt secti0a2210rZ·!7. { * ¤ _ (d) The terms "paid dxf incurred " and "‘paid or accruegl" Shall be éénstrmad qctrcrdiqg to thé method of accounting ufxm the basis of which the 'nct income isa computed under section ‘
- 212 or 232. _'1‘he_deducti0us and crediw provided for in this title
shall be taken for the taxéblé year ixywhich " paid or accrued " or "“pnid or incur1•ed," dependent inpou the method of accounting upon tlxejmsis ot which the me income is computed wider secticu 212 or in order to cleau·1y reflect the Income `the deductions or credits should bc taken as of a. dilterexit périod; " ._ ‘ ·` `_ V · - _ · ~
(e) The tei·mM“·st0ck," iucluqeg the share in an association,
·joi¤t·st0ck commny, br insurance company} . - _ . (I} The term "sh¤tehbldc1j?’ includes a member ;in_ai1 assi? - ciaticu, j0i¤t—-stock cqmpmny, or {nsurahcc. company. (Feb. 26, 1923, c. 2‘?, {@0, 44-Stgt. 10.) · ~ ` See mais ht bqinniug gt this chapter. _ •‘ _ Sections 212 and 232 herein referred to are set out as il.953 tid ,984, 1m¤c§fvc1y,;; my supplement:} Vtitle. _ .· · Secticm 221 md.2 , mentioned in the text, are set put in S! } 902 md 9%, respectively, ot this supplemental. title. ‘__ ‘ · _ 932. and &¤ributiois.·——-(a) The term " dividend " · when used in this title (except in paragraph (§)_0£ subdivision- .(a) cf—sa¢tlo¤ %4 and paragraph (4) _0t subdivision (a)" of section 245) mgm buy distributicxi made ‘by.- a cpx·p0rati¤n to its sbar&c lders, whether in mquey or in other p.ro;ierty,- ouf] ot its mmings or prsmm accumulated after February 28} 1913. Q
lb) For the pu at this” Act every clistribugsibir-is made
out ·o£_—@1¤¤ br pwuts to the éxtent thereét, and {1*0Q `ther most mcwtly acc¤muAntpd mmlngs or .pmBts,` {Any earnings. .01* 'pmhts accumulated, or in va1ua'c£_pr;iperty— accfued, before Mgmt 1, 1913, may tgé distributed ax¢mpt¢t1·0in'ta$:, ·afte; the @¤,i¤¤ and wok; accumulated after Fébruax*y__28,~ . 1913, have 'dLst;fibut¢d,‘ but any such mx-keg distribuiion shall be applied apiusf mad `mducd the basis cf. the stock _ px—0vid‘“éd in smtion 204. " _ `— _
- (43) _ distributed in cahpiete Uquidation of a corpcratim; shall he trmwd gs` full payment in exchange for thé
smgk. wd nmxmu distributed Qu pudal liquidntiop or a qorpomtion be tmntéd u` in pért dr. 0111 P°·Y1¤¤»¤t iu] exchange for the stock. »-The min lass to the didtxibutw resulting trim; tuck shgll/a determinm uncle; sece tion 202, hut shall be c g tq the extent provided in sectiéu » In the bb,/se pt ummm dist.ribu¤ad· in pnttial - liqqidatixm {cther than- a dis¤*ib¤ti0¤1v within {ho prcwislcns of subdivision (ZY og segtiqn % ct stock oréecmiting in connectidn wit; n recrgaxnization)_ the pgittg of suci1 distribution which isj prgpcrly chargeable to, capital hccéuut phall not be "¢0¤sid·—
mu, zzmmzhm §933_ ered a distribution of earuinge or prodts within °‘the°méaning of subdivision (b) of this Section for the purpode .0f d€€€¤'¤¤i¤i¤§_ the taxabilityl · ot subsequend dieu-ibutiona by the `eorporation. (d) lt any distribution (not in- partial. or complete li'qnidation) made by a eorporation its shareholders is not out of_ increase lu value of property acprued before March 1, 1913, and is not out of earnings; or p/761lts,—_theu the amount of such distribution shall be applied against, and reduce the baeiaof thestock provided in section 204, and it in exceés of auch basis,
such excess shall be taxa/ble in the same manger as a _ gain
jfroxn the sale or exchange oi property. Iheprovisioas ot this paragraph shall also ap jrto distributions from depletiou reserves based on the dis very ralue otmiues. ‘ _ ‘ ` Q ° te") Any dietributio Amade by a corporation, Iwhich was i claseiiied as a` person eeryice corporation under the provisions _o£ the` Revenue Act f_1918`01‘·the.Berenue Act of 1921, out of its_ earnings or pro ts which were taxable aa · accordance with
- the‘ provisions of ysectiou 218 of the Revenue Act of 1918 or
section$218‘of the ikeveuue -Act_ of 1921, ehall be exempt from tar to thedist utees.1 ‘ n _ -. » (f) A stock ggidend shall not be subject, to tax. . V (g) It a corporation cancels or redeems its stock (yvhether or not such/etock was issued as a stock dividend`) at such time and in such manner as to make the distribution and cancellation `.or redemption in· whole _ or ·in part essentially eqnlvalent to the distribution ot a taxable dividend, the amount so distributed in redemption or cancellation of the stock; to the Yexteut j`that‘ it represents- a distribution. ot, grainy or prodts accumulated aftero February ‘28, 1913, shall be treated as a taxable dividend; In the case of the cancellation or redemption ot stock not issued ae a stock - dividehd this subdivision shall apply only `if the `cancellaflon or. redemption is made after January 1, 1926Q_ · .— ~ - _` V ` (h) As. used in this section the term “amouuts distributed ,1:1 partial liquidation ” mana a distribution fby a corporatiou in complete cancellation or redemption of a part or its ostock, or one ot a soda of dletxibutione in complete eamellation or ‘ redemption of all or a portion of ite stock. (Feb. 28, 19%, c. 27, ji 201, 4-Stat. 10.) _` . .; o ‘ · _ e _ See note at beginning ot this chapter. _ , _ _ o Sections 202, 203, 204, 3ahd 234 hereiu referred to are act out ~- in fi 933, 934, 935, and 986,- respectively, of this supplemental title.- Subdivision (a) of motion 245, mentioned ln the text, is set outl¤§1004o£—eaid‘tltle.· ~ , — t _. ` ’ 983. Amount of»gaiu__derived or lose eniained from anleer other disposition of property;-—·(a) Except as hereinafter provided in, this section, the gain —trom_ the sale or other disposition ot property shall be the excme lot the aruountjreelizedl therefrom over thefhasls provided in subdivision ‘( a_) or _ (h) ot eeetion 204, aud the lose shall be the excess of auch heals; over the amountrealized. _ _ ” - _ - . ~ " — (U) In `eoinputing the amount of g·a.Iu_ or lose under subdi- »?i¤i¤¤ <¤>'·—-r _ » _ ( a " ~` —- r .(1), Proper adjustment shall be made for any expenditure or `iteni of loes properly chargeable to capital account, and
(2) The basis shall be tummxeueu by the ameuntot the
deduction; for exhaustion, ‘wmr and tar, obsolescence, amortig tation, and depletion which haveidnce the acquldtiou ot the property been allowahle in rupmt of auch property under this Act or prior income tax laws; but in no ease shall the amount ot_ the diminution in reopen; of depletion exeeed a depletion deduction computed without reference to discovery value or to.
(2) of subdivision (e) of eectiou 204} In addition,
if the property waeacqulred before March'], 1313, the basis (it other than the fair market value as of March 1, 1913) ehall be diminished in the amount of exhaustion, wear and tear, Mobeolwccneegand depletion actually sustained before such. date.
