53 STAT.] 76TH CONG. , IST SESS.-CH. 247-JUNE 29, 1939 "SEC. 152. PAN-AMERICAN TRADE CORPORATIONS. "If a domestic corporation engaged in the active conduct of a trade or business within the United States (hereinafter referred to as the 'parent corporation') owns directly 100 per centum of the capital stock of one or more domestic corporations each of which is engaged solely in the active conduct of a trade or business in Central or South America (hereinafter referred to as a Pan-American trade corpora- tion), such corporations (including the 'parent corporation') shall be deemed to be an affiliated group of corporations within the meaning of section 141 of this chapter, provided that the following conditions are satisfied: "(1) At least 80 per centum of the gross income for the taxable year of the parent corporation is derived from sources other than royalties, rents, dividends, interest, annuities, and gains from the sale or exchange of stock or securities; and "(2) At least 90 per centum of the gross income for the taxable year of each of the Pan-American trade corporations is derived from sources other than royalties, rents, dividends, interest, annuities, and gains from the sale or exchange of stock or securities; and "(3) No part of the gross income for the taxable year of any of the Pan-American trade corporations is derived from sources within the United States." SEC. 226. DEDUCTIONS OF INSURANCE COMPANIES OTHER THAN LIFE OR MUTUAL. (a) Section 204 (c) (10) of the Internal Revenue Code is amended to read as follows: '(10) Deductions (other than those specified in this subsec- tion) as provided in section 23." (b) The amendment made by subsection (a) shall be applicable to taxable years beginning after December 31, 1938. 881 Benefits to domestic corporations in active conduct of Pan-Amer- ican trade. Ante, pp. 58, 866. I.R. C. §141. Conditions. Deductions allowed. Ante, p. 74 . I.R.C.§204(c)(10). Ante, pp. 12,867,S0. I. R.C. §23. Taxable years to which applic:lble. SEC. 227. DEFINITION OF GROSS INCOME OF CERTAIN INSURANCE COMPANIES FOR PERSONAL HOLDING COMPANY TAX. (a) Section 507 of the Internal Revenue Code is amended to read -. li,, §i,7 as follows: "SEC. 507. MEANING OF TERMS USED. "(a) GENERAL RULE. -The terms used in this subchapter shall have (eneralrule. the same meaning as when used in chapter 1. "(b) INSURANCE COMPANIES OTHER THAN LIFE OR MUTUAL.-Not- "Cross income." withstanding subsection (a), the term 'gross income', as used in this subchapter, means, in the case of an insurance company other than life or mutual, the gross income, as defined in section 204 (b) (1), in: IC. a 204 (b) increased by the amount of losses incurred, as defined in section 204 () (6) (7).204 (c) (7). (b) (6), and the amount of expenses incurred, as defined in section 204 (b) (7), and decreased by the amount deductible under section 204 (c) (7) (relating to tax-free interest)." (b) TAXABLE YEARS TO WHICH APPLICABLE. -The amendments Taxable yeaicb to made by this section shall be applicable to taxable years beginning after December 31, 1938. SEC. 228. COMPUTATION OF DIVIDEND CARRY-OVER FOR PERSONAL- HOLDING COMPANY TAX. (a) Section 504 (a) of the Internal Revenue Code is amended by inserting before the semicolon at the end thereof a comma and the following: "and, in the computation of the dividend carry-over for Computation; al- lowance. Ante, p. 107 . I.R. C.§504(a).
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