PUBLIC LAWS-CH. 619-OCT. 21 , 1942 Ante, p. 812. 5a Stat. 877. 26U.S.C.§22(d) (2) (B). 53 Stat. 877 . 26U.8.C.§22(d) (5) (B). Elective inventory method. a Stat. 877. 2ffU. S.C. 22(d). Supra. SEC. 117. ADDITIONAL ALLOWANCE FOR MILITARY AND NAVAL PER- SONNEL. Section 22 (b) (relating to exclusions from gross income) is amended by adding at the end thereof the following new paragraph: "(13) ADDITIONAL ALLOWANCE FOR MILITARY AND NAVAL PER- SONNEL.- So much of the amount received, before the termination of the present war as proclaimed by the President, by personnel below the grade of commissioned officer in the military or naval forces of the United States as salary or compensation in any form from the United States for active service in such forces during such war, as does not exceed $250 in the case of a single person and $300 in the case of a married person or head of a family. The determination, for the purposes of this paragraph, of the taxpayer's status in the armed forces and his family status shall be made as of the end of the taxable year." SEC. 118. REPORT REQUIREMENT IN CONNECTION WITH INVENTORY METHODS. (a) Section 22 (d) (2) (B) (relating to report requirement in connection with using certain inventory methods) is amended to read as follows: "(B) Only if the taxpayer establishes to the satisfaction of the Commissioner that the taxpayer has used no pro- cedure other than that specified in subparagraphs (B) and (C) of paragraph (1) in inventorying such goods to ascer- tain the income, profit, or loss of the first taxable year for which the method described in paragraph (1) is to be used, for the purpose of a report or statement covering such tax- able year (i) to shareholders, partners, or other proprietors, or to beneficiaries, or (ii) for credit purposes." (b) Section 22 (d) (5) (B) (relating to requirament to continue reports in connection with certain inventory methods) is amended to read as follows: "(B) The Commissioner determines that the taxpayer has used for any such subsequent taxable year some procedure other than that specified in subpagraph (B) of paragraph (1) in inventorying the goods specified in the application to ascertain the income, profit, or loss of such subsequent taxable year for the purpose of a report or statement cover- ing such taxable year (i) to shareholders, partners, or other proprietors, or beneficiaries, or (ii) for credit purposes; and requires a change to a method different from that prescribed in paragraph (1) beginning with such subsequent taxable year or any taxable year thereafter." (c) TAXABLE YEARS TO WHICH AMENDMENTS APPLICABLE.-Amend- ments made by this section shall be applicable to taxable years begin- ning after December 31. 1938. SEC. 119. LAST-IN FIRST-OUT INVENTORY. Section 22 (d) (relating to the use of the elective inventory method) is amended by adding at the end thereof the following new paragraph: "(6) INVOLUNTARY LIQUIDATION AND REPLACEMENT OF INVEN- TORY.- "(A) Adjustment of Net Income and Resulting Tax. - If, for any taxable year beginning after December 31, 1941, and prior to the termination of the present war as pro- claimed by the President, the closing inventory of a tax- 814 [56 STAT.
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