75TH CONGRESS, 1sT SESSION-CH. 815-AUGUST 26, 19 37
8 27 TITLE III-DISALLOWED DEDUCTIONS Title I I I - D i s a l d lowed deduct ions . SEC. 301 . D ISAL LOW ED DEDUCTIONS . (a) Section 24 (a) of the Revenue Act of 19 36 is amended to read 49 Stat . 1662. as fo llows : "( a.) GENERAL RULE.--In computing net income no deduction General rule, items shall in any case be allowed in respect of-
not ded uct ible . "(1) Personal, living, or family expenses; "(2) Any amount paid out for new buildings or for perma- nent improvements or betterments made to increase the value of any property or estate; "(3) Any amount expended in restoring property or in mak- ing good the exhaustion thereof for which an allowance is or has been made; "(4) Premiums paid on any life insurance policy covering the life of any officer or employee, or of any person financially interested in any trade or business carried on by the taxpayer, when the taxpayer is directly or indirectly a beneficiary under such policy; or "(5) Any amount otherwise allowable as a deduction which is allocable to one or more classes of income other than interest (whether or not any amount of income of that class or classes is rece ived or accrue d) whol ly exem pt fro m the t axes im posed by this title . t
Losses from s ales or (b) LOSSES FROM SAT .-F.8 OR EXCHANGES OF PROP ERTY . -
exchangeso[property. "(1) LOSSES DISALLOWED .-In computing net income no deduc- Losses disallowed . tion shall in any case be allowed in respect of losses from sales o r exchanges of proper ty, direct ly or indi rectly- "(A) Between members of a family, as defined in para- graph (2) D "(B) xcept~in the case of distributions in liquidation, between an ind ividua l and a corpor ation m ore tha n 50 per centum in value of t he outstan ding stock of which is owned, directly or indire ctly, by or for suc h individual; "(C) E xcept in t he case of distributi ons in liq uidation, between two corporations more than 50 per centum in value of the outstanding stock of each of which is owned by or for the same individual, if- 11 (i) Either one of such c orporat ions, w ith res pect to the taxabl e year (if beg inning after D ecember 31, 1935) of the corporation preceding the date of the sale or exchange, was a personal holding company as defined in section 352, or "(ii) Either one of such corporations, with respect to the taxable year (if not beginning more than 12 months before the da te of t he enac tment of the R eve- nue Act of 1937) of t he corpora tion prece ding the d ate of the sa le or exch ange, was a foreign personal ho lding company as defined in section 331; "(D) Between a grantor and a fiduciary of any trust; "(E) Between the fiduciary of a trust and the fiduciary of another trust, if the same person is a grantor with r espect to each trust; or "(F) B etween a f iduciary of a trust a nd a benef iciary of s uch trust .
