54 STAT.] 76TH CONG. , 3D SESS. -CH. 757-OCT. 8 , 1940 twelve months and divided by the number of days in the twelve months ending with the close of such taxable year. "(6) In no case shall the average base period net income be less than zero. " (7) For computation of average base period net income in case of certain reorganizations, see section 742. "(c) ADJUSTMENTS IN EXCESS PROITrs CREDIT ON ACCOUNT OF CAPITAL CHANGES. -For the purposes of this section- "(1) The net capital addition for the taxable year shall be the excess, divided by the number of days in the taxable year, of the aggregate of the daily capital addition for each day of the tax- able year over the aggregate of the daily capital reduction for each day of the taxable year. "(2) The net capital reduction for the taxable year shall be the excess, divided by the number of days in the taxable year, of the aggregate of the daily capital reduction for each day of the tax- able year over the aggregate of the daily capital addition for each day of the taxable year. "(3) The daily capital addition for any day of the taxable year shall be the aggregate of the amounts of money and property paid in for stock, or as paid-in surplus, or as a contribution to capital, after the beginning of the taxpayer's first taxable year under this subchapter and prior to such day. In determining the amount of any property paid in, such property shall be included in an amount determined in the manner provided in section 718 (a) (2). A distribution by the taxpayer to its shareholders in its stock or rights to acquire its stock shall not be regarded as money or property paid in for stock, or as paid-in surplus, or as a contribution to capital. The amount ascertained under this paragraph shall be reduced by the excess, if any, of the excluded capital for such day over the excluded capital for the first day of the taxpayer's first taxable year under this subchapter. For the purposes of this paragraph the excluded capitaf for any day shall be an amount equal to the sum of the following: "(A) The aggregate of the adjusted basis (for determin- ing loss upon sale or exchange) as of the beginning of such day, of obligations held by the taxpayer at the beginning of such day, which are described in section 22 (b) (4) (A), (B), or (C) any part of the interest from which is excludible from gross income or allowable as a credit against net income; and "(B) The aggregate of the adjusted basis (for determin- ing loss upon sale or exchange) as of the beginning of such day, of stock of domestic corporations held by the taxpayer at the beginning of such day. The daily capital addition shall in no case be less than zero. (For daily capital additions and reductions in case of certain reorganizations, see section 743.) "(4) The daily capital reduction for any day of the taxable year shall be the aggregate of the amounts of distributions to shareholders, not out of earnings and profits, after the beginning of the taxpayer's first taxable year under this subchapter and prior to such day. "SEC. 714 . EXCESS PROFITS CREDIT-BASED ON INVESTED CAPITAL. "The excess profits credit, for any taxable year, computed under this section, shall be an amount equal to 8 per centum of the taxpayer's invested capital for the taxable year, determined under section 715. 981 Post, p. 992. Adjustments on ac- count of capital changes. Net capital addi- tion. Net capital reduc- tion. Daily capital addi- tion. Pot, p. 82. 53 Stat. 10. 26 U. S. C., Sup. V,i22(b)(4)(A), (B), (C). Minimum daily capital addition. Post, p. 994. Daily capital reduc- tion. Poe, p. 982.
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