PUBLIC LAW 183—OCT. 20, 1961
ized and operated for mutual purposes and without profit, the reasonable addition to a reserve for bad debts shall be determined with due regard to the amount of the taxpayer's surplus or bad debt reserves existing at the close of December 31, 1951. I n the case of a taxpayer described in the preceding sentence, the reasonable addition to a reserve for bad debts for any taxable year shall in no case be less than the amount determined by the taxpayer as the reasonable addition for such year; except that the amount determined by the taxpayer under this sentence shall not be greater than the lesser of (A) the amount of its net income for the taxable year, computed without regard to this subsection, or (B) the amount by which 12 per centum of the total deposits or withdrawable accounts of its depositors at the close of such year exceeds the sum of its surplus, undivided profits, and reserves at the beginning of the taxable year." (f) DIVIDENDS PAID TO DEPosrroRs.—Section 23(r) (relating to the deduction from gross income of certain dividends paid by banking corporations) is hereby amended to read as follows:
^?|^|-^A' §23 (r). 26 U.S.C.
" (r) DIVIDENDS PAm BY BANKING CORPORATIONS.—
"(1) I n the case of mutual savings banks, cooperative banks, and domestic building and loan associations, amounts paid to, or credited to the accounts of, depositors or holders of accounts as dividends on their deposits or withdrawable accounts, if such ' amounts paid or credited are withdrawable on demand subject only to customary notice of intention to withdraw. IP "(2) For deduction of dividends paid by certain other banking corporations, see section 121." ssstat.se. (g) DEDUCTION FOR REPAYMENT OP CERTAIN LOANS.—Section 23 Mstat.i?.'*'^^ (relating to deductions from gross income) is hereby amended by ^^e,%p'^^' ^^ adding at the end thereof the following: 490. ' ' " ( d d) REPAYMENT BY MUTUAL SAVINGS BANKS, ETC., OF CERTAIN
LOANS.—In the case of a mutual savings bank not having capital stock represented by shares, a domestic building and loan association, or a cooperative bank without capital stock organized and operated for mutual purposes and without profit, amounts paid by the taxpayer during the taxable year in repayment of loans made prior to September 1, 1951, by (1) the United States or any agency or instrumentality thereof which is wholly owned by the United States, or (2) any mutual fund established under the authority of the laws of any State." (h) DEFINITION OP BANK.—Section 104(a) (relating to definition of bank) is hereby amended by inserting at the end thereof the following: "Such term also means a domestic building and loan association." (i)
53 Stat. 36.
i U.S.C. § 104 (a).
DEFINITION OP DOMESTIC BUILDING AND LOAN ASSOCIATION.—
Section 3797(a) (relating to definitions for the purposes of the Internal Revenue Code) is hereby amended by adding at the end thereof the following new paragraph: "(19) DOMESTIC BUILDING AND LOAN ASSOCIATION.—The term ^domestic building and loan association' means a domestic building and loan association, a domestic savings and loan association, and a Federal savings and loan association, substantially all the business of \7hicl1 is confined to making loans to members." (j) EFFECTIVL DATE.—The amendments made by this section shall be applicable only with respect to taxable years beginning after December 31, 1951. SEC. 314. INCOME TAX TREATMENT OF EXEMPT COOPERATIVES. (a) AMENDMENT OP SECTION 101 (12).--Section 101 (12) is hereby 1
amended as follows: (1) By inserting after "(12) " the folio wing: " (A) ".
63 Stat. 469. ^ ^" ^' ^ ^^^^^ ^*^'
S?T**^-??•.,«,,... Jo U, o. C 5101 (12).