PUBLIC LAWS-CH. 619-OCT. 21 , 1942 Ante, p. 802. 53 Stat. 5. 26U..c. §12; Supp. I, § 12. Ante, p . 802; post, P. 846. 58 Stat. 60 . 26U.S.c. i117; Supp. I, i 117. Pos, p . 847. 63 Stat. 38 . 26U.S.C. 104; Supp. I, § 104. 53 Stat. 867. 26 U. S.. O612 (d) (4). Ante, p. 843. "(2) OTHER TAXPAYERS. -If for any taxable year the net long- term capital gain of any taxpayer (other than a corporation) exceeds the net short-term capital loss, there shall be levied, col- lected, and paid, in lieu of the tax imposed by sections 11 and 12, a tax determined as follows, if and only if such tax is less than the tax imposed by such sections: "A partial tax shall first be computed upon the net income reduced by the amount of such excess, at the rates and in the man- ner as if this subsection had not been enacted, and the total tax shall be the partial tax plus 50 per centum of such excess. "(d) LIIrrATION ON CAPITAL LOSSES. - "(1) CORPORATIONS. - In the case of a corporation, losses from sales or exchanges of capital assets shall be allowed only to the extent of gains from such sales or exchanges. " (2) OTHER TAXPAYERS. - In the case of a taxpayer, other than a corporation, losses from sales or exchanges of capital assets shall be allowed only to the extent of the gains from such sales or exchanges, plus the net income of the taxpayer of $1,000, whichever is smaller. For purposes of this paragraph, net income shall be computed without regard to gains or losses from sales or exchanges of capital assets. "(e) CAPrrAL Loss CARRY-OVE.-- "(1) METHOD OF COMPUTA'TON.- If for any taxable year begin- ning after December 31,1941, the taxpayer has a net capital loss, the amount thereof shall be a short-term capital loss in each of the five succeeding taxable years to the extent that such amount exceeds the total of any net capital gains of any taxable years intervening between the taxable year in which the net capital loss arose and such succeeding taxable year. For purposes of this paragraph a net capital gain shall be computed without regard to such net capital loss or to any net capital losses arising in any such intervening taxable years. "(2) RULE FOR APPLICATION OF CAPITAL LOSS CARRY-OVER FROM 1941. -The amount of the net short-term capital loss of the last taxable year beginning in 1941 (computed without regard to amounts treated as short-term capital losses from the preceding taxable year), which is not in excess of the net income for such taxable year, shall, to the extent of the net short-term capital gain for the succeeding taxable year (computed without regard to this paragraph), be a short-term capital loss of such succeeding tax- able year. (d) BOND, ETC., LOSSES OF BANKs. -Section 117 is amended by inserting at the end thereof the following new subsection: "(i) BOND, ETC., LossES OF BANKS. -For the purposes of this chap- ter, in the case of a bank, as defined in section 104, if the losses of the taxable year from sales or exchanges of bonds, debentures, notes, or certificates, or other evidence of indebtedness issued by any cor- poration (including one issued by a government or political subdivi- sion thereof) with interest coupons or in registered form, exceed the gains of the taxable year from such sales or exchanges, no such sale or exchange shall be considered a sale or exchange of a capital asset." (e) NET OPERATING Loss DEDUCTION.-Section 122 (d) (4) is amended to read as follows: "(4) Gains and losses from sales or exchanges of capital assets shall be taken into account without regard to the provisions of section 117 (b). As so computed the amount deductible on account of such losses shall not exceed the amount includible on account of such gains." 844 [56 STAT.
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