77TH CONG., 2D SESS.-CH. 619-OCT. 21, 1942 the next sentence applies) shall compute the tax and file his return without the application of this paragraph. If the tax- payer (other than a corporation) was not in existence at the end of the twelve-month period, or if the taxpayer is a cor- poration and has disposed of substantially all its assets prior to the end of such twelve-month period, then in lieu of the net income for such twelve-month period there shall be used for the purposes of this paragraph the net income for the twelve-month period ending with the last day of the short period. The tax computed under this paragraph shall in no case be less than the tax computed on the net income for the short period without placing such net income on an annual basis. The benefits of this paragraph shall not be allowed unless the taxpayer, at such time as regulations prescribed hereunder require (but not after the time prescribed for the filing of the return for the first taxable year which ends on or after twelve months after the beginning of the short period), makes application therefor in accordance with such regulations. Such application, in case the return was filed without regard to this paragraph, shall be considered a claim for credit or refund with respect to the amount by which the tax is reduced under this paragraph. The Commissioner, with the approval of the Secretary, shall prescribe such regulations as he may deem necessary for the application of this paragraph." (b) INCOME FOR CERTAIN TAXES NOT PLACED ON ANNUAL BASIS.- (1) SURTAX ON CORPORATIONS IMPROPERLY ACCUTMULATING SUR- rLUs. -Section 102 is amended by inserting at the end thereof the following new subsection: "(f) INCOME NOT PLACED ON ANNUAL BASIS.- Section 47 (c) shall not apply in the computation of the tax imposed by this section." (2) FOREIGN PERSONAL HOLDING COMPANIES. -Section 336 is amended by inserting at the end thereof the following new subsection: " (d) INCOME NOT PLACED ON ANNUAL BASIS.-The net income shall be computed without regard to section 47 (c)." (3) PERSONAL SERVICE CORPORATIONS.-Section 393 is amended by inserting at the end thereof the following new sentence: "For the purposes of this section, the net income shall be computed without regard to section 47 (c)." (4) PERSONAL HOLDING COMPANIES. -Section 505 is amended by inserting at the end thereof the following new subsection: "(e) INCOME NOT PLACED ON ANNUAL BAsIS.-The net income shall be computed without regard to section 47 (c)." (c) RETURNS WHERE TAXPAYER NOT IN EXISTENCE FOR TWELVE MONTHS. -Section 47 is amended by inserting at the end thereof the following new subsection: "(g) RETURNS WHERE TAXPAYER Nor IN EXISTENCE FOR TWELVE MONTHS. -In the case of a taxpayer not in existence during the whole of an annual accounting period ending on the last day of a month, or, if the taxpayer has no such annual accounting period or does not keep books, during the whole of a calendar year, the return shall be made for the fractional part of the year during which the taxpayer was in existence." (d) SHORT TAXABLE YEAR. -The second sentence of section 48 (a) is amended to read as follows: "'Taxable year' means, in the case of a return made for a fractional part of a year under the provisions of this chapter or under regulations prescribed by the Commissioner with the approval of the Secretary, the period for which such return is made." 835 Regulations. 63 8tat. 35 . 26U.S. . 102; Supp. I, 102. Ante, p. 834. Pos, p. 84. Ante, p. 834. 54 Stat. 1006. 26 U. S. C. §393. Ante, p. 834. Post, p . 848. Ante, p. 834 . 53 Stat. 26 . 26U.8.C.I47. 53 Stat. 26 . 26U.S.C.§48(a). "Taxatle year." 56 STAT.]
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