"(b) PowER OF COMMISSIONER TO ALLOW DEDU(TION, ET., IN PART.- In any case to which subsection (a) is applicable the Com- missioner is authorized- "(1) to allow as a deduction, credit, or allowance any part of any amount disallowed by such subsection, if he determines that such allowance will not result in the evasion or avoidance of Federal income and excess profits tax for which the acquisition was made; or "(2) to distribute, apportion, or allocate gross income, and distribute, apportion, or allocate the deductions, credits, or allow- ances the benefit of which was sought to be secured, between or among the corporations, or properties, or parts thereof, involved, and to allow such deductions, credits, or allowances so distributed, apportioned, or allocated, but to give effect to such allowance only to such extent as he determines will not result in the evasion or avoidance of Federal income and excess profits tax for which the acquisition was made; or "(3) to exercise his powers in part under paragraph (1) and in part under paragraph (2)." Stat. (b) TECHNICAL A MENDMENT. -Section 45 (relating to allocation of income and deductions) is amended by striking out "gross income or deductions" and inserting in lieu thereof "gross income, deduc- tions, credits, or allowances". (c) TAXAUBM YEARS TO WHICH APPCrABmiE-The amendments made by this section shall be effective with respect to taxable years begin- ning after December 31, 1943. The determination of the law applicable to prior taxable years shall be made as if this section had not been enacted and without inferences drawn from the fact that the amendment made by this section is not expressly made applicable to prior taxable years. SEC. 129. DISALLOWANCE OF CERTAIN DEDUCTIONS ATTRIBUTABLE TO BUSINESS OPERATED BY INDIVIDUAL AT LOSS FOR FIVE YEARS. 53 Stat. 37. 2s. st. .I - (a) IN GENERAL4. -Supplement B of Chapter 1 of the Internal l24supp. i. 112- Revenue Code is amended by adding at the end thereof the following Ante, pp. 32, 4047; new section: post, 75, 2A3 "SEC. 130. LIMITATION ON DEDUCTIONS ALLOWABLE TO INDIVID- UALS IN CERTAIN CASES. "(a) RECOMPUTATION OF NET INCOME. -If the deductions (other than taxes and interest) allowable to an individual (except for the pro- visions of this section) and attributable to a trade or business carried on by him for five consecutive taxable years have, in each of such years, exceeded by more than $50,000 the gross income derived from such trade or business, the net income of such individual for each of such years shall be recomputed. For the purpose of such recompu- tation in the case of any such taxable year, such deductions shall be allowed only to the extent of $50,000 plus the gross income attribut- able to such trade or business, except that the net operating loss deduction, to the extent attributable to such trade or business, shall not be allowed. "(b) REDETRMraTION OF TAx. -J Upon the basis of the net income computed under the provisions of subsection (a) for each of the five consecutive taxable years specified in such subsection, the tax imposed by this chapter shall be redetermined for each such taxable year. If for any such taxable year assessment of a deficiency is prevented PUBLIC LAWS-CL 63--FEB. 25, 1944 [58 STAT. 48
�
