shall not exclude the allowance as a deduction of so much of such taxes as is properly allocable to maintenance or interest charges. (d) TAXES OF SHAREHOLDER PAID BY CORPORATION.- The deduc- tion for taxes allowed by subsection (c) shall be allowed to a cor- poration in the case of taxes imposed upon a shareholder of the corporation upon his interest as shareholder which are paid by the corporation without reimbursement from the shareholder, but in such cases no deduction shall be allowed the shareholder for the amount of such taxes. (e) LossES BY INDIVIDUALS.- In the case of an individual, losses sustained during the taxable year and not compensated for by insur- ance or otherwise- (1) if incurred in trade or business; or (2) if incurred in any transaction entered into for profit, though not connected with the trade or business; or (3) of property not connected with the trade or business, if the loss arises from fires, storms, shipwreck, or other casualty, or from theft. No loss shall be allowed as a deduction under this para- graph if at the time of the filing of the return such loss has been claimed as a deduction for estate tax purposes in the estate tax return. (f) LossES BY CORPORATIONS.- In the case of a corporation, losses sustained during the taxable year and not compensated for by insur- ance or otherwise. (g) CAPITAL LOSSES.- (1) LIMITATION.- Losses from sales or exchanges of capital assets shall be allowed only to the extent provided in section 117. (2) SECURITIES BECOMING WORTHLESS. -If any securities (as de- fined in paragraph (3) of this subsection) become worthless during the taxable year and are capital assets, the loss resulting therefrom shall, for the purposes of this chapter, be considered as a loss from the sale or exchange, on the last day of such taxable year, of capital assets. (3) DEFINITION OF SECeURITES.- As used in this subsection the term "securities" means (A) shares of stock in a corporation, and (B) rights to subscribe for or to receive such shares. (h) WAGERING LOSsES.- Losses from wagering transactions shall be allowed only to the extent of the gains from such transactions. (i) BASIS FOR DETERMINING Loss. -The basis for determining the amount of deduction for losses sustained, to be allowed under sub- section (e) or (f), and for bad debts, to be allowed under subsec- tion (k), shall be the adjusted basis provided in section 113 (b) for determining the loss from the sale or other disposition of property. (j) Loss UN WASH SALES OF STOCK OR SECURITIES. - For disallowance of loss deduction in the case of sales of stock or securities where within thirty days before or after the date of the sale the taxpayer has acquired substantially identical property, see section 118. (k) BAD DEBTS. - (1) GENERAL RULE.- Debts ascertained to be worthless and charged off within the taxable year (or, in the discretion of the Commissioner, a reasonable addition to a reserve for bad debts); and when satisfied that a debt is recoverable only in part, the Commissioner may allow such debt, in an amount not in excess of the part charged off within the taxable year, as a deduction. This paragraph shall not apply in the case of a taxpayer, other than a bank, as defined in section 104, with respect to a debt evidenced by a security as defined in paragraph (3) of this sub- section. (2) SECURITmE BECOMING WORTHLESS. -If any securities (as de- fined in paragraph (3) of this subsection) are ascertained to be worthless and charged off within the taxable year and are capital assets, the loss resulting therefrom shall, in the case of a taxpayer INCOME TAX 13
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