PUBLIC LAWS--CH. 757-OCT. 8 , 1940 Long-term gains and losses. 53 Stat. 14. 26 U. S. C., Supp. V, §23 (). Income from retire- ment or discharge of bonds, etc. Deductions on a- count of retirement or discharge of bonds, etc. 53 Stat. 12. 26 U. 8. C., Sapp. V. 2 3 (a). Casualty, demoli- tion, etc., losses. 53 Stat. 13. 26 U. S. C., Supp. V, §23 (f). Repayment of proc- essing tax to vendees. 53 Stat. 12 . 26 U. S. C., Supp. V,§23(a). 48 Stat. 31 . 7U.8.C.ch.26; Supp. V, ch. 26. Payment of judg- ments, etc. "(B) Long-Term Gains and Losses.- There shall be excluded long-term capital gains and losses. There shall be excluded the excess of gains from the sale or exchange of property held for more than eighteen months which is of a character which is subject to the allowance for depreciation provided in section 23 (1) over the losses from the sale or exchange of such property; "(C) Income From Retirement or Discharge of Bonds, and So Forth.-There shall be excluded, in the case of any taxpayer, income derived from the retirement or discharge by the taxpayer of any bond, debenture, note, or certificate or other evidence of indebtedness, if the obligation of the tax- payer has been outstanding for more than eighteen months, including, in case the issuance was at a premium, the amount includible in income for such year solely because of such retirement or discharge; "(D) Deductions on Account of Retirement or Discharge of Bonds, and So Forth. - If during the taxable year the tax- payer retires or discharges any bond, debenture, note, or cer- tificate or other evidence of indebtedness, if the obligation of the taxpayer has been outstanding for more than eighteen months, the following deductions for such taxable year shall not be allowed: "(i) The deduction allowable under section 23 (a) for expenses paid or incurred in connection with such retire- ment or discharge; "(ii) The deduction for losses allowable by reason of such retirement or discharge; and "(iii) In case the issuance was at a discount, the amount deductible for such year solely because of such retirement or discharge; "(E) Casualty, Demolition, and Similar Losses.-Deduc- tions under section 23 (f) for losses arising from fires, storms, shipwreck, or other casualty, or from theft, or arising from the demolition, abandonment, or loss of useful value of property, not compensated for by insurance or otherwise, shall not be allowed; "(F) Repayment of Processing Tax to Vendees.- The deduction under section 23 (a), for any taxable year, for expenses shall be decreased by an amount which bears the same ratio to the amount deductible on account of any repay- ment or credit by the corporation to its vendee of any amount attributable to any tax under the Agricultural Adjustment Act of 1933, as amended, as the excess of the aggregate of the amounts so deductible in the base period over the aggregate of the amounts attributable to taxes under such Act collected from its vendees which were includible in the corporation's gross income in the base period and which were not paid, bears to the aggregate of the amounts so deductible in the base period; "(G) Payment of Judgments, and So Forth. - Deductions attributable to any claim, award, judgment, or decree against the taxpayer, or interest on any of the foregoing, shall not be allowed if in the light of the taxpayer's business it was abnormal for the taxpayer to incur a liability of such char- acter or, if the taxpayer normally incurred such liability, the amount of such liability in the taxable year was grossly disproportionate to the amount of such liability in the four previous taxable years; 978 [54 STAT.
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