§936 TITLE 26.-111 mal nroperty shall be. the same as is `provided subdivision (an) lore (ls) `for the pqrpose of determining the gain or. los Bptm the sole or other disposition of such property, except that- (1) in the caseoi mines discovered by the taxpayer after ldebmnry 28, 1913, the basis for `depletion shn·.ll be the fair ~market_ value o£ ithe property at ‘ the date ot discovery ·o1‘· within thirty daye thereafter, if such mines were not acquired ins me result ot purchase of a proven tract or lense, and lt the fair market ~val_ue of the property is materially dl'Sp1'0e ` portilmate to the cost; The depletion allowance based .011; dis-5 _<·overy value provided in this paragraph shall not exceed 50g sper. oentnm- of `the net income of the taxpayer (computed; without allowan‘ce· for- _. depletion) from the properly upon \\'1li(‘h‘T1l€ discovery was made. except that in -110 case `shall ‘ the depletion allowance be less than it would be if computed without reference to discovery yalnie. '_DiSc0veries slmll include snlnemls in coxynmerciel quantities contained witbixra vein or deposit rllscoieeted in an existing mine nor 'miniug tract by the taxpayer after February 28, 1913, _·if the vein or _ deposit — this discovered was not inerely the uninterrupted extension .of_ a- ‘contix1uiug_”commercinl veiuior deposit already known `to exist, aud. if the .discovcre<l minerals are of sufficient yalue andquentity that, they could be separately mined land marketed _ ntepiont. _ .` . _ 7 (2) In the case of oil andagas wjells the allowzuwo for ’depletion shall be 27% °per centiun of the gross jncome from the- U property during the taxable year; Such allowance shall not exceed 50 per centum the net income ot the taxpayer (computed without 'allowance for depletion) from- the prop-` erty, except thzit in no case shall the depletion allowance be lws than it would be .if computed without reference to this. paragraph, _ (Feb; 26, 1926, c. 27, § 204; 44_ Sta.t.i14.) l _ Bee note at beginning of this chapter. ·' _ - . Sections 214% 234, and 302 of the Revenue Act of 1824 herein referred to ereeet; out in §§ 95§, 986; .and·· 1094, respectively, » ot Title _26_ (Ixrnxsu: -Rnvnxm·:)_ of the Code. . Sections 203, 214, 234, and 302_‘o`t ·this‘Act herein referred to we set out ln]! 934, 955,986, end 1094, respectively, ot;thLs gsnpplementnl t§tle.~ _ _ ·* .. · _ _ ` 936. Requirement of inve¤torics.·¤-—Whe*r1ever in the _ opinion. of the `commissioner the use ot inventories ie necessary in order clmrly to determine- the income ot -e_ny" texpayer,- inventories bball be taken by such taxpayer upon such basis as ° the cmlnlwoner, with. the. approval of the; Secretary,. may prwcrlbe. as conforming, `as nearly as may be sto the ·bes·t accounting practice _` in the trade'· or business and as most clearly __re¤ectii1g the income. (Feb. 26, 1928, c. 27, { 205, 44 Stat.18.) __ _, ‘ ·. . - Sm note at beiinning of this . . , Except'£o1··the omlgnion ct the words “ ot Internal Revenue ” _•fte:· f‘ eommsdoner " and of the words “ of the Tren.sury—” utter ’ “’Secretu·y,” | 205 ot the Act ot Febl °26; 1926, c. 27, memcu _` writnont chqnge | 205 of the Revenue Act of 1924 repealed by ” metormeract. - ‘ _ _' - ‘_ L · 937. Net ; deterninntion of.-7¢——(n) in this `tion the term _" net loss " means excus ot 'tbe deductions allowed bysection 214 or @4 ove1•TF·h° STW income, with the following exceptions and limitations ‘ , * . _ = _(1) otnerwise allowed by law not attributgble to · the operation ot n wade or bnsiness regularly carried mg by the taxpayer shall- he allowed only to the ot the nmonnt of Q tbe gross income not deriwjed trade 01'_b\1§l?1QH$; . - (2) In the case of ra. taxpwyer other than a.lé91'b@¥%tion, deduotions for mpitellws other& hllowed by kw Hall be hllovged only to theextmt of the capitol cams; · . (3) The deduction for depletion shell not exceed the aniotmb ewhich wonld be allowable; it _ computed without reference to
wu. zwvmzm .,_ 1978 · diseovery value, 0l'_t0 paragraph (2) of subdivieicén (e) of — (4) The dedueticu provided for 'in peragreph..»(6) `of gun. division ._(a) of sectioh 234 .0f amounts received as dividends shell not bea1l0wed;_ . _ I [ · . “ (5)`The1•e"_Shall be included in computing 1¤ceme`me` umciunt of intereét reeeived tree from 'tex mxdq this title, decreased by the amount of intereetrpaid orfacerued which is not _ allowed as a deductioqby paragraph (2) of sgbdivisiou (A) gi section 214 ·or by paragraph (2) of s¤bdiviéi%x; (e) of Section 234. . - · . .» - » _ { · (b) _If, for any taxable year; itappears upon the preductien .ef»evideuée satisfactory to the commisiener that any taxpeyei-· has `eustained »a Het loss, the amount thereot shell beailewql as`· a deducfi0u_i1; computing the pét income Qf the tnxmyéi: fer tnesuccemiug taiablegyear (hereinafter in this section celled Y" sqeond "}, and it such nef loss is in excess of .mch net ixgceme (co pufed without Such deduetwn)', the emmnt at such excess Shaq be allowed as A deductidn ° in computing the income for `e next succeeding taxableyear (hereinafter inlthis seetiem gall _ " third ·yeare?’)'; the ‘deducti€m".iu all cases to be mede imder regulations ·presci·ibed; by the cemmiwoner with the ep; epmval of the Secretary. ’ ° _° -, j V . · _(c) (1) It ini the second. year the taxpayéi (ether than a corporation) `sustains e éapitzfl net lose; the dedtwtiou allowed by subdivision (b)10t {Jets section shall bb applied as el deduction fin computing the ordinary net iuccm te! year. M the deduction is in excess of the ordinary act mmm (qém- Q puyed with0ut“s£xch·de&1uét§0n9 {lien the emamxt of egh/éimse shell be allowed use deduction in éémpnting fer the thirdeyear. _ Y ‘ ° ‘ · . ° · '
- (2) Hein the second year the taxpayer (other then a cerp0m·
·ti0u) has e capital netsgaiugthe allowed by s*¤bd1vi· d sion ·(b)_ of this section shall mst be applied as i deductlsmzin · competing the ordinary net income for each yur. It the dedee d ‘ tion is in excess ot the ordinary net income (computed without · such deductiun) the gfmquht et such excess shall ixeit be tpplied egdinet. the Qpital pet gain; ter such year, and if in excm ef the cgpitalnet gain the amount et that excem shnllebe allowed he a dédixction inf computiiig net inéome ter the Ythird yam · ·. (d-) If of a net kiss is as a éeduétien in computing net, income mr the third year, new the of either subdivision .(b) 0; (ci), and the taxpayer (ether than a corporation) has in `such wear 9 capital `net nh epa capital net loss, then the methbd of `allewing mm deductipn in such third yeer shell be. the same as pretideé ill`- (e}.
‘ (e)- Ittor the taxéme ym.r`19% A §.i¤ed·s_.net
d loss within the pmvwcme et the Revenue 4et et Hm, eel! ter
- the taxable year 1924 etaxpeyern a eetlem within the `
Kprevisicm Q the Revenue pt tm t d mw Elm spnubesllowedeq e d the two tuxelgde years to theesm uint tm name memset qs a neg less mmm ter cm tuebhyenr i¤.— ymder this` Act, allowed as s dedueticm jen- the tm succeeding ‘¢¤x¤bleyw·•·*·_ -~ “ ‘ ; .(t) It n taxpayer ter A puind bqinmu in cme calendar yen (hereinefhexf in` min qubdiviw exiled "`¤¤iSt calendar yar") mud, in .the year (iiereinaxter an this·s¤5divisie¤ ulled-"su@ yar") and the law app11¢nb!e`t¤ the is diierent .W bein the luv dppiienble to the mr, thm his mt woes for the period dede: theseeend mleudu year bethe sum 01: Q) the same ptopertim tee e wtire period; under the law u®mhIe t0‘the.j¤rst ` calendar year, which _ the portiqn et ¤1lLug"witb.i¤ _ L such cnleedar ymt is of the eatin D¤1‘i0é; and (3} the nw _
