Page:United States Statutes at Large Volume 39 Part 1.djvu/790

SIXTY-FOURTH CONGRESS. Sess. I. Ch. 463. 1916. 769 business of such corporation, joint-stock compan or association as a ¤'°°¤ *¤· dealer only m the property constituting such collateral, or in leaning the funds thereby procured, the total interest paid by such co ration, comp)an(y, or association within the year on any such ind;bi.)ed— ness may e educted as a part of its e nses of doing business, but L*¤¤*°¤**¤¤· mterest_on such indebtedness shall onlyxliig deductible on an amount of such mdebtedness not in excess of the actual value of such property collateral: further, That in the case of bonds or other indebt- ,m§°¤d¤ www edness, which have been issued with a guaranty that the interest Mmm' payable thereon shall be free from taxation, no deduction for the pay- ment of the tax herein imposed, or any other tax paid pursuant to such guaranty, shall be allowed; and in the case of a bank, banking ¥¤¢•¤>S¢¤¤ b•¤k doassociation, loan or trust company, interest paid within the year on P°ms` deposits or on moneys received for investment and secured by interestbearing certificates of indebtedness issued by such bank, banking association, loan or trust company; Fourth. Taxes paid within the year imposed by the authority of the °“’°"“"’“°*· United States, or its Territories, or possemions, or any foreign country, or under the authority of any tate county, school district, or municipality, or other taxing subdivision of any State, not including those assessed against local benefits. (b) In the case of a corporation, joint-stock company or associa- ,,§,‘§,”‘g;‘s,°°§;’e',‘}@ tion, or insurance company, organized, authorized or existing under U¤*¢¤¥S¤¢·s· the laws of anfy foreign country, such net income shall be ascertained by deducting rom the gross amount of its income received within the year from a sources within the United States- First. All the ordinary and necessary expenses actually paid within B“‘*“°“ °’¤""'“°“· the year out of earnings in the maintenance and operation of its business and property within the United States, including rentals or other payments required to be made as a condition to the continued use or possession of property to which the corporation has not taken or is not taking title, or in which it has no equity; Second. All osses actual] sustained within the year in business d,§,‘}§§§foL>¤¤•¤ wd or trade conducted by it witliin the United States and not compen· ` sated by insurance or otherwise, including a reasonable allowance for the exhaustion, wear and tear of property arising out of its use on or em loyment in the business or tra e; (a) and in the case (a) of °°°‘“°'°“°" oil ang gas wells a reasonable allowance for actual reduction in flow and production to be ascertained not by the flush flow, but by the settled production or replar flow; (b) in the case of mines a reason- ‘““°"°¥"°“°¤· able allowance for depletion thereof not to exceed the market value in the mine of the product thereof which has been mined and sold during the year for which the return and computation are made, such reasonable allowance to be made in the case of both (a) and (b) under rules and regulations to be prescribed by the Secretary of the PWM Treasury: Provided, That when the allowance authorized in (a) 1;,.,,,,,,,. ,,,5,,,,,,; and (b) shall equal the capital originally invested, or in case of pur- P¤°’°° M¤*°¤r 9*3- chase made prior to Marc first, nineteen hundred and thirteen, the fair market value as of that date, no further allowance shall be made; and (c) in the case of insurance companies, the net addition, 1f any, I“S“'“°°‘“°"°’· required by law to be made within the yxear to reserve funds and the sums other than dividends paid within the year on policy and annuity contracts: Prmxided, That no deduction shall be_ allowed for any c1,E’,‘f,ff°'“‘°“‘“· °" amount paid out for new buildings, permanent improvements, or betterments, made to increase the value of any proiperty or estate, and no deduction shall be madeifolii anjyh amount mil exgepse ogireli storing ro ert or ma <r oo the e austion thereo or w c an allhwgange ig or haskblelgngriadez Provided, further, That mutual ,¤ifZméiils»Q‘iS»,i°le•!i¤iZ tire and mutual employers’ liability and mutual workrnen’s com- ¤;‘,{§Q°“‘· °‘°'·» °°‘“‘ pensation and mutual casualty insurance comfpames requiring their members to make premium deposits to provide or losses and expenses 91890°-vox. 39-1-1: 1--49