PUBLIC LAWS-CH. 619-OCT. 21, 1942 53 Stat. 4, 111; 54 Stat. 975. 26 U.s. C. §§ 1-396, 600-604,710-752; Supp. I, chs. 1, 2B, 2E. Ante, p. 802; post, pp. 940,941. 54 Stat. 999. 26U. .C.§124; Supp. I, § 124. Ante, pp. 849-861 . Ante, p. 831. 63 Stat. 13 . 26U.S.C.§23(g) (3). Ante, pp. 820, 821. (i) RETROAcTIVE APPLICATION OF EXTENSION.- The amendments made by this section shall be effective as of October 8, 1940. (j) OVERPAYMENTS.-Where a tax paid under Chapter 1, Chapter 2B, or Chapter 2E of the Internal Revenue Code is in excess of the tax which would have been paid had section 124 of the Internal Reve- nue Code, as previously amended, been enacted on October 8, 1940, to read as amended by this section, then credit or refund of such excess may be made without interest, in accordance with the provisions of law applicable in the case of erroneous or illegal assessment or collec- tion or overpayment of the tax. SEC. 156. WAR LOSSES. (a) LOSSES FROM WAR, TAXATION OF PROPERTY RECOVERED, AND BASIS OF PRoPERTY. -T he Internal Revenue Code is amended by inserting after section 126 the following new section: "SEC. 127. WAR LOSSES. "(a) CASES IN WHICH Loss DEEMED SUSTAINED, AND TIME DEEMED SUSTAINED.-- LFor the purposes of this chapter- "(1) PROPERTY NOT IN ENEMY COUNTRIEs. -Property destroyed or seized on or after December 7, 1941, in the course of military or naval operations by the United States or any other country engaged in the present war shall be deemed to have been destroyed or seized on a date chosen by the taxpayer in the manner provided in paragraph (4), which falls between- "(A) the latest date, as established to the satisfaction of the Commissioner, on which such property may be considered as not destroyed or seized, and "(B) the earliest date, as established to the satisfaction of the Commissioner, on which such property may be con- sidered as having already been destroyed or seized. For the purposes of this paragraph property within an area which comes under the control of a country at war with the United States after the date war with such country is declared by the United States shall be deemed to have been destroyed or seized in the course of military or naval operations by such country, and the date specified in subparagraph (A) shall not be later than the latest date determined by the Commissioner as the date on which such area was under the control of the United States or a country not at war with the United States, and the date specified in subparagraph (B) shall not be later than the earliest date de- termined by the Commissioner as the date on which such area may be considered under the control of the country which is at war with the United States. "(2) PROPERTY IN ENEMY COUNTRIEs.- Property within any country at war with the United States, or within an area under the control of any such country on the date war with such country was declared by the United States, shall be deemed to have been de- stroyed or seized on the date war with such country was declared by the United States. "(3) INvEsTMENTs REFErABrE TO DESTROYED OR SEIZED PROP- ERTY.- Any interest in, or with respect to, property described in paragraph (1) or (2) (including any interest represented by a security as defined in section 23 (g) (3) or section 23 (k) (3)) which becomes worthless shall be considered to have been de- stroyed or seized (and the loss therefrom shall be considered a loss from the destruction or seizure) on the date chosen by the taxpayer which falls between the dates specified in paragraph (1), or on the date prescribed in paragraph (2), as the case may 852 [56 STAT.
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