56 STAT.] 77TH CONG., 2D SESS.-CH. 619-OCT. 21 , 1942 a building owned or leased by such corporation, and who are not entitled, either conditionally or unconditionally, except upon a complete or partial liquidation of the cor- poration, to receive any distribution not out of earnings and profits of the corporation, and "(iii) 80 per centum or more of the gross income of which for the taxable year in which the taxes and interest described in paragraph (1) are paid or incurred is derived from tenant-stockholders. "(B) Tenant-stockholder. - The term 'tenant-stockholder' means an individual who is a stockholder in a cooperative apartment corporation, and whose stock is fully paid-up in an amount not less than an amount shown to the satisfaction of the Commissioner as bearing a reasonable relationship to the portion of the value of the corporation's equity in the building and the land on which it is situated which is attrib- utable to the apartment which such individual is entitled to occupy." SEC. 129. DEDUCTION DENIED IF PROCEEDS USED TO PAY FOR INSURANCE. Section 24 (a) (relating to items not deductible) is amended by striking out "or" at the end of paragraph (4), and striking out the period and inserting a semicolon, and at the end of the subsection adding the following new paragraph: "(6) Any amount paid or accrued on indebtedness incurred or continued to purchase a single premium life insurance or endow- ment contract. For the purposes of this paragraph, if substan- tially all the premiums on a life insurance or endowment contract are paid within a period of four years from the date on which such contract is purchased, such contract shall be considered a single premium life insurance or endowment contract; or". SEC. 130 . TAXES AND OTHER CHARGES CHARGEABLE TO CAPITAL ACCOUNT NOT DEDUCTIBLE BUT TREATED AS CAPITAL ITEMS. (a) DEDUCTIONS NOT ALLOWABLE.- Section 24 (a) (relating to items not deductible) is amended by inserting at the end thereof the follow- ing new paragraph: "(7) Amounts paid or accrued for such taxes and carrying charges as, under regulations prescribed by the Commissioner with the approval of the Secretary, are chargeable to capital account with respect to property, if the taxpayer elects, in accord- ance with such regulations, to treat such taxes or charges as so chargeable." (b) TECHNICAL AMENDMENT.- Section 113 (b) (1) (A) (relating to adjustment of basis) is amended by striking out ", including taxes and other carrying charges on unimproved and unproductive real property". SEC. 131 . REDUCTION OF PERSONAL EXEMPTION AND CREDIT FOR DEPENDENTS-REQUIREMENT FOR RETURN. (a) PERSONAL EXEMPrIoN.- (1) GENERAL RULE.- Section 25 (b) (1) (relating to personal exemption) is amended to read as follows: "(1) PERSONAL EXEMPTION.- In the case of a single person or a married person not living with husband or wife, a personal 827 "Tenant-stock- holder. " 53 Stat. 16 . 26U.S.C. 24(a). Ante, pp. 819, 826. Supra. 53 Stat. 44 . 26U. .C.1113(b) (1) (A). 53 Stat. 18. 26 U. S. C., Supp. I, 25(b) (1).
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