PUBLIC LAWS-CH. 619-OCT. 21, 1942 53 Stat. 14 . 26U. S. . C. 23 (0). Aite, P. 819. 53 Stat. 50 . 26U.. c. 117; Supp. I, § 117. Ante, PP. 843, 844, 846, 847. Ante, P. 844. Net capital loss for taxable year. "(B) Investment Expenses. -Investment expenses paid or accrued during the taxable year. If any general expenses are in part assigned to or included in the investment expenses, the total deduction under this subparagraph shall not exceed one-fourth of 1 per centum of the mean of the book value of the invested assets held at the beginning and end of the taxable year plus one-fourth of the amount by which net income computed without any deduction for investment expenses allowed by this subparagraph, or for tax-free interest allowed by subsection (b) (4) (A), exceeds 33/4 per centum of the book value of the mean of the invested assets held at the beginning and end of the taxable year; "(C) Real Estate Expenses.- Taxes and other expenses paid or accrued during the taxable year exclusively upon or with respect to the real estate owned by the company, not including taxes assessed against local benefits of a kind tend- ing to increase the value of the property assessed, and not including any amount paid out for new buildings, or for permanent improvements or betterments made to increase the value of any property. The deduction allowed by this para- graph shall be allowed in the case of taxes imposed upon a shareholder of a company upon his interest as shareholder, which are paid or accrued by the company without reim- bursement from the shareholder, but in such cases no deduc- tion shall be allowed the shareholder for the amount of such taxes; "(D) Depreciation. - A reasonable allowance, as provided in section 23 (1), for the exhaustion, wear and tear of prop- erty, including a reasonable allowance for obsolescence; "(E) Interest Paid or Accrued. - A ll interest paid or accrued within the taxable year on indebtedness, except on indebtedness incurred or continued to purchase or carry obligations (other than obligations of the United States issued after September 24, 1917, and originally subscribed for by the taxpayer) the interest upon which is wholly exempt from taxation under this chapter. "(F) Capital Losses. -Capital losses to the extent pro- vided in section 117 plus losses from capital assets sold or exchanged in order to obtain funds to meet abnormal insur- ance losses and to provide for the payment of dividends and similar distributions to policyholders. Capital assets shall be considered as sold or exchanged in order to obtain funds to meet abnormal insurance losses and to provide for the payment of dividends and similar distributions to policy- holders to the extent that the gross receipts from their sale or exchange are not greater than the excess, if any, for the taxable year of the sum of dividends and similar distri- butions paid to policyholders, losses paid, and expenses paid over the sum of interest, dividends, rents, and net premiums received. In the application of section 117 (e) for the pur- poses of this section, the net capital loss for the taxable year shall be the amount by which losses for such year from sales or exchanges of capital assets exceeds the sum of the gains from such sales or exchanges and whichever of the follow- ing amounts is the lesser: "(i) the corporation surtax net income (computed without regard to gains or losses from sales or exchanges of capital assets); or 874 [56 STAT.
�
