PUBLIC LAWS-CH. 619-OCT. 21, 1942 Ante, p. 904. Ante, pp. 807 ,847. Post, p. 911. Ante, pp. 807,848. 53 Stat. 867 . 26 U.S. C. 5122 (d) (1), (2), (3), (4). Ante, pp. 807,844. Ante, p. 825. 54 Stat. 975, 1018. 26U. .C.0. 710- 752; Supp. I, S 710- 743. Ante, p. 899 . 54 Stat. 976. 26 U.S . C., Supp. I, 711 (a) (2) (A). 54 Stat. 975, 1018. 26U.S.C.;8710- 752; Supp. I, » 710- 743. Ante, p. 899. 54 Stat. 979, 937; 53 Stat. 79. 26 U.. c.. 724, 251; Supp. I, § 712 (b), 251. Ante, pp. 828, 860, 861. 54 Stat. 988. 26U.S.C.§727(). 54 Stat. 977. 26U.S.C. 711(a) (3). "Short taxable year." (b) Section 711 (a) (2) (relating to the excess profits credit com- puted under invested capital credit) is amended by adding at the end thereof the following new subparagraph: "(L) NET OPERATING LOSS DEDUCTION ADJUSTMENT.--The net operating loss deduction shall be adjusted as follows: "(i) In computing the net operating loss for any taxable year under section 122 (a), and the net income for any taxable year under section 122 (b), no deduction shall be allowed for any excess profits tax imposed by this sub- chapter, and, if the excess profits credit for such taxable year was computed under section 714, the deduction for interest shall be reduced by the amount of any reduction under sub- paragraph (B) of this paragraph for such taxable year; and "(ii) In lieu of the reduction provided in section 122 (c), such reduction shall be in the amount by which the excess profits net income computed with the exceptions and limita- tions provided in section 122 (d) (1), (2), (3), and (4) and computed without regard to subparagraph (D), without regard to any credit for dividends received, and without regard to any credit for interest received provided in sec- tion 26 (a) exceeds the excess profits net income (computed without the net operating loss deduction)." (c) The amendments made by this section shall be effective as of the date of enactment of the Excess Profits Tax Act of 1940. SEC. 211 . CREDIT FOR DIVIDENDS RECEIVED IN COMPUTATION OF EXCESS PROFITS NET INCOME IN CONNECTION WITH INVESTED CAPITAL CREDIT. (a) Section 711 (a) (2) (A) is amended to read as follows: "(A) Dividends Received. -The credit for dividends received shall apply, without limitation, to all dividends on stock of all corporations, except that no credit for dividends received shall be allowed with respect to dividends (actual or constructive) on stock of foreign personal holding com- panies or dividends on stock which is not a capital asset." (b) The amendment made by subsection (a) shall be effective as of the date of enactment of the Excess Profits Tax Act of 1940. SEC. 212 . APPLICATION OF EXCESS PROFITS TAX TO CERTAIN FOR- EIGN CORPORATIONS. (a) Section 712 (b) (relating to the excess profits credit of foreign corporations) and section 724 (relating to invested capital in the case of foreign corporations and corporations entitled to benefits of sec- tion 251) are amended by striking out "or having an office or place of business therein", wherever occurring therein and section 712 (b) is amended by striking out "or had an office or place of business therein". (b) Section 727 (f) (relating to exempt corporations) is amended by striking out "and not having an office or place of business therein". SEC. 213. EXCESS PROFITS NET INCOME PLACED ON ANNUAL BASIS. (a) GENERAL RLE.-Section 711 (a) (3) (relating to taxable years of less than twelve months) is amended to read as follows: "(3) TAXABLE YEAR LESS THAN TWELVE MONTHS.- "(A) General Rule.- If the taxable year is a period of less than twelve months the excess profits net income for such taxable year (referred to in this paragraph as the 'short taxable year') shall be placed on an annual basis by multiply- ing the amount thereof by the number of days in the twelve [56 STAT.
�
