PUBLIC LAWS--CH. 2S9-MAY 28, 1938 Interest. Taxes. Losses. Losses from sales; limitation. Ante, p. 502. Bad debts, etc. Exempt interest. Ante, p. 458. Exhaustion, etc., of property. Ante, p. 462. Charitable, etc., co n- tributions. Ante, p. 464. Other deductions. Ante, p. 460 . Deductions of for- eign corporations. Post, p. 630. Double deductions, restriction. Foreign, etc., taxes. Credit for, allowed domestic insurance companies. Ante, pp. 522, 524. Ante, p. 506. "Net income" con- strued. Computation of gross income. Ante, pp. 622, 524, 503. Mutual companies other than life. Imposition of tax. In general. Foreign corpora- tions. Oroas income. (2) All interest as provided in section 23 (b); (3) Taxes as provided in section 23 (c); (4) Losses incurred as defined in subsection (b) (6) of this section; (5) Subject to the limitation contained in section 117 (d), losses sustained during the taxable year from the sale or other disposition of property; (6) Bad debts in the nature of agency balances and bills receivable ascertained to be worthless and charged off within the taxable year; (7) The amount of interest earned during the taxable year which under section 22 (b) (4) is excluded from gross income; (8) A reasonable allowance for the exhaustion, wear and tear of property, as provided in section 23 (1); (9) Charitable, and so forth, contributions, as provided in section 23 (q); (10) Deductions (other than those specified in this subsection) as provided in section 23, but not in excess of the amount of the gross income included under subsection (b) (1) (C) of this section. (d) DEDUCTIONS OF FOBEIGN CORPORATIONS. -In the case of a for- eign corporation the deductions allowed in this section shall be allowed to the extent provided in Supplement I in the case of a foreign corporation engaged in trade or business within the United States or having an office or place of business therein. (e) DOUBLE DmEDrUCTmNS.- Nothing in this section shall be con- strued to permit the same item to be twice deducted. SEC. 205. TAXES OF FOREIGN COUNTRIES AND POSSESSIONS OF UNITED STATES. The amount of income, war-profits, and excess-profits taxes imposed by foreign countries or possessions of the United States shall be allowed as a credit against the tax of a domestic insurance company subject to the tax imposed by section 201, 204, or 207, to the extent provided in the case of a domestic corporation in section 131, and in the case of the tax imposed by section 201 or 204 "net income" as used in section 131 means the net income as defined in this Supplement. SEC. 206 . COMPUTATION OF GROSS INCOME. The gross income of insurance companies subject to the tax imposed by section 201 or 204 shall not be determined in the manner pro- vided in section 119. SEC. 207. MUTUAL INSURANCE COMPANIES OTHER THAN LIFE. (a) IMPOSITION OF TAX. - (1) IN GENERAL-There shall be levied, collected, and paid for each taxable year upon the special class net income of every mutual insurance company (other than a life insurance company) a tax equal to 16/2 per centum thereof. (2) FOREIGN COtrPORATINs.- The tax imposed by paragraph (1) shall apply to foreign corporations as well as domestic corporations; but foreign insurance companies not carrying on an insurance business within the United States shall be taxable as other foreign corporations. (b) Gaoss INoMxE. -- Mutual marine-insurance companies shall include in gross income the gross premiums collected and received by them less amounts paid for reinsurance. 526 [52 STAT.
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