558 PUBLIC LAWS--CL 289-MAY 28, 1938 [52 STAT. ing orpoatoedns m- (c) CORPORATIONS MAKING CONSOLIDATED RETURN.- - If the common turns. parent corporation of an affiliated group of corporations making a consolidated return under the provisions of section 141 satisfies the stock ownership requirement provided in section 402 (a) (2), and the income of such affiliated group, determined as provided in section 141, satisfies the gross income requirement provided in section 402 (a) (1), such affiliated group shall be subject to the surtax imposed by this title. Personal holding SEC. 403. PERSONAL HOLDING COMPANY INCOME. company income. Term defined. For the purposes of this title the term "personal holding company income" means the portion of the gross income which consists of: Dividends, etc. (a) Dividends, interest (other than interest constituting rent as defined in subsection (g)), royalties (other than mineral, oil, or gas royalties), annuities. Stok and securi (b) STOCK AND SECR IES TRANSACTIONS. -Except in the case of regular dealers in stock or securities, gains from the sale or exchange of stock or securities. acenOdmoditiestrans (c) COMMODrITES TRANSACTIoNs.- Gains from futures transactions in any commodity on or subject to the rules of a board of trade or commodity exchange. This subsection shall not apply to gains by a producer, processor, merchant, or handler of the commodity which arise out of bona fide hedging transactions reasonably necessary to the conduct of its business in the manner in which such business is customarily and usually conducted by others. ates ad trsts. (d) ESTATES AND TRUSTS.- Amounts includible in computing the net income of the corporation under Supplement E of Title I; and gains from the sale or other disposition of any interest in an estate or trust. trPeo"salseiceo (e) PERSONAL SERVICE CoNTLRACTr. -(1) Amounts received under a contract under which the corporation is to furnish personal serv- ices; if some person other than the corporation has the right to designate (by name or by description) the individual who is to perform the services, or if the individual who is to perform the services is designated (by name or by description) in the contract; and (2) amounts received from the sale or other disposition of such a contract. This subsection shall apply with respect to amounts received for services under a particular contract only if at some time during the taxable year 25 per centum or more in value of the outstanding stock of the corporation is owned, directly or indirectly, by or for the individual who has performed, is to perform, or may be designated (by name or by description) as the one to perform, such services. Use of corration (f) USE OF CORPORATION PROPERTY BY SHAREHOLDER.- Amounts I d ber. received as compensation (however designated and from whomsoever received) for the use of, or right to use, property of the corporation in any case where, at any time during the taxable year, 25 per centum or more in value of the outstanding stock of the corporation is owned, directly or indirectly, by or for an individual entitled to the use of the property; whether such right is obtained directly from the corporation or by means of a sublease or other arrangement. Rent. (g) RENr.- Rents, unless constituting 50 per centum or more of the gross income. For the purposes of this subsection the term "rents" means compensation, however designated, for the use of, or right to use, property, and the interest on debts owed to the corpora- tion, to the extent such debts represent the price for which real property held primarily for sale to customers in the ordinary course of its trade or business was sold or exchanged by the corporation;
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