66 S T A T. ]
PUBLIC LAW 5 9 4 - J U L Y 21, 1952
the taxpayer's average base period net income determined under this subsection shall be the amount computed under paragraph (2). . . , " (2) COMPUTATION.—The average base period net income determined under this subsection for a taxpayer entitled to the benefits of this subsection shall be the amount computed under section 435 (e)(2)(E) and (F) except that there shall be substituted for the aggregate of the excess profits net income for each of the six months in the period beginning July 1, 1949, and ending December 31, 1949, an amount computed by multiplying the aggregate of the excess profits net income for each of the six months in the period beginning July 1, 1946 and ending December 31, 1946, by the per centum determined by dividing the adjusted basis of taxpayer's total facilities (as defined in section 444 (d)) on December 31, 1948, by the adjusted basis of its total facilities on the first day of its base period. The average base period net income computed under the preceding sentence shall not exceed 80 per centum of the excess profits tax net income for the taxpayer's first taxable year under this subchapter. •'(3) DEFINITION OF STRATEGIC AND CRITICAL METALS.-^AS used in this subsection, the term 'strategic and critical metals' means copper and zinc which on January 1, 1945, had been determined by proper authority to be strategic and critical under the provisions of the Strategic and Critical Stock Piling Act and shall include scrap containing such metals." SEC. 3. The amendment made by section 2 shall be applicable with respect to all taxable ^ears ending after June 30, 1950. SEC. 4. Effective with respect to taxable years ending after June 30, 1950, section 433(b) of the Internal Revenue Code (relating to the computation of average base period net income) is hereby amended by inserting at the end thereof two new paragraphs reading as follows: "(18)
ADJUSTMENT FOR BASE PERIOD LOSSES FROM BRANCH OPER-
ATIONS.—In the case of a taxpayer which during two or more such taxable years operated a branch at a loss, the excess profits net income for each such taxable year (determined without regard to this paragraph) shall be increased by the amount of the excess of such loss above the loss, if any, incurred by such branch during the taxable year for which the tax under this subchapter is being computed. As used in this paragraph, the term 'branch' means a unit or subdivision of the taxpayer's business which was operated in a separate place from its other business and differed substantially from its other business with respect to character of products or services. A unit or subdivision of the taxpayer's business shall not be considered to differ substantially from the taxpayer's other business unless it is of a type classifiable by the Standard Industrial Classification Manual in a different major industry group or in a different subgroup of the taxpayer's major industry group than that in which its other business is so classifiable: Provided, however, That this paragraph shall not apply unless the sum of the net losses of such branch during the base period exceeded 15 per centum of the aggregate excess profits net income of the taxpayer during the base period. For the purposes of this paragraph, the aggregate excess profits net income of the taxpayer during the base period shall be the sum of its excess profits net income for all years in the base period, increased by the sum of the net losses of such branch during the base period. 93300
0-53-55
819
26 USC 435.
26 USC 444.
|o ^tat. 596.
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