Page:United States Statutes at Large Volume 40 Part 1.djvu/1111

SIXTY·FIFTH CONGRESS. Sess. III. Ch. 18. 1919. 1093 (e) There shall be deducted from invested capital as above donned '¤*¤:,¤°ux*§°¤°* a percentage thereof ecpual to the percentage which the amount of rmmzige ol maxinadmissib e assets IS 0 the amount of admissible and inadmissible §‘,,§,§;,§,{f ° """ assets held the taxable year. (d) The mvested capital for any period shall be the average mgggrgggggm invested capital for such period, but in the case of a corporation ` making a return for a fractional part of a year, it shall (except for the purpose of paragraph (2) of subdivision (a) of section 311) be the same fractional part of such average invested gaipital. The average invested cariizal for the prewar shall be deter- F°""°“"’"‘°°‘ mined bfy dividing the num r of years within at period during the whole 0 wh1ch the corporation was in existence into the sum 0 the average mvested capital for such years. > Sec. 327. That in the following cases the tax shall be determined as ,,,,I,‘L$‘°§'$'$§°“f,i‘¥,f,,*;°,§‘, provided in section 328: · ’ . *¤¤$i¤¤¤¤· _ (a) Where the Commissioner is unable to determine the invested °“P'°" "°* capital as provided in section 326; .. . · » . Fmipmmum (bg _%1ht e case og;. foreign corgioratioffic ; .. · ‘ me {ay mc; (c ereamix aggregateo tangi ro erty·%nd,irnt_ ,,,, ggopertyhas been paid m for stock or for stliocé) and bonds wm mmissioner is imable satisfactorily to determine the arespectivsv values of the several classes of property at the time of payment, or-to distinguish the classes of property paid in for stock and for bonds, r°°£fi°iifily; li it 1. 11 c ¤¤··¤·¤·¤·=¤~· ere u on a p cation the co oration the ommissioner ,,,m,, ,,,,,,,,,,,,,m, finds and so dgclareg of record {hat therliax if determined without benefit of this section would, owing to abnormal conditions affecting the capital or income of the corporation, work upon the co oration an exceptional hardship evidenced by- gross dieproportionrbetween the tax comcputed without benefit of this section the tax computed bg r erence to the representativezeorporations specified in section 28. This subdivision ·shall· not apply to any case (1) in ET°°"°°°" which the tax (computed without benefit of this section) is high .,.E,§§,hm°g,’}‘Q';;l{'“’ °‘ merely because the corporation earned within the taxable ear a-high rate of profit upon a normal invested capital, nor (2) in which 50 ger mmm trom ancentum or more of the gross income of the corporation for the taxa le "' year (computed under section 233 of Title II) consists of ains, rofits, commissions, or other income, derived on a cosbplus iiom a Government contract or contracts made between pril 6, 1917, and November 11, 1918, both dates inclusive. Sec. 328. (a) In the cases specified in section 327 the tax shall be °u'{;°m{g°,%Q,°Qv;°r{ the amount which bears the sameratio to the net income of the ngsnmain memes. taxpayer (in excess of the specific exemption of _$3,000) for the taxab e year, as the average tax of representative corporations engaged in a like or similar trade or business, bears to their average net income (in excess of the specific exem tion of $3,000) for such year. In the case of a foreign corporation dire tax shall be computed F¤¤‘i¤¤ ¤¤¤’P<¤¤¤¤¤ without deducting the specific exemption of $3,000 either for the taxpayer or the representative corporations. · In compluting the tax under this section the Commissioner shall ¤¤¢h¤ddi*¤¤¤¤d- compare the taxpayer only with representative corporations whose invested capital can be satisfactorily determined under section 326 and which are, as nearly as may be, similarly circumstanced with respect to gross income, net income, profits per unit of business transacted and capital employed, the amount and rate of war profits or excess profits, and all other relevant facts and circumstances. _ { d (b) For the purposes of subdivision (a) the ratios between the ,,_§§‘{,?‘g$“$Z,.§”a, °` average tax an the average net income of representative corporations shall be determined by the Commissioner in. accordance with regulations prescribed by him with the approval of the Secretary.