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PUBLIC LAW 183—OCT. 20, 1951
[65 STAT.
States. Any deductions in connection with or properly allocable to the rendering of such services or assistance shall not be allowed. For the purpose of this subparagraph, a foreign corporation shall be considered to be a 'related foreign corporation' if the domestic corporation at the time it renders such services or assistance owns 10 per centum or more of the outstanding stock of such foreign corporation." 26 u.^s. c.'1'433 (b). (^) AMENDMENT OF SECTION 433 (b).—Section 433(b) (relating to Post, p. 649. taxable years in base period) is hereby amended by adding at the end thereof the following new paragraph: "(16) PAYMENTS FROM FOREIGN SO'.CES FOR TECHNICAL ASSISTANCE, Evc.—In the case of a domestic corporation which rendered
to a related foreign corporation technical assistance, engineering services, scientific assistance, or similar services (such services or assistance being related to the production or improvement of products of the type manufactured by such domestic corporation), there shall be excluded the remuneration for such services or assistance if such remuneration constituted income derived from sources without the United States. Any deductions in connection with or properly allocable to the rendering of such services or assistance shall not be allowed. For the purpose of this paragraph, a foreign corporation shall be considered to be a 'related foreign corporation' if the domestic corporation at the time it rendered such services or assistance owned 10 per centum or more of the outstanding stock of such foreign corporation." SEC. 503. AVERAGE BASE PERIOD NET INCOME IN CASE OF CERTAIN FISCAL YEAR TAXPAYERS. 26 u^s o*§'435 (d) Section 435(d) (relating to the general average method for the computation of average base period net income) is hereby amended by adding at the end thereof the following: "For the purpose of the computations under this subsection in the case of a taxpayer whose first taxable year under this subchapter is a taxable year which either began before January 1, 1950, or was preceded by a taxable year beginning before January 1, 1950, and ending after March 31, 1950, there shall be substituted for the base period of the taxpayer the period of 48 consecutive months ending March 31, 1950, if such substitution produces a lesser tax under this subchapter for the taxable year for which the tax is being computed. I n computing the average base period net income for such substituted period, the excess profits net income for January, February, and March of 1950 shall be computed by use of the 'weighted excess profits net income', as defined in section 435 (e)(2)(E), for the taxable year in which such months fall."
SEC. 5 4 AVERAGE BASE PERIOD NET INCOME—ALTERNATIVE BASED 0. ON GROWTH IN CASE OF NEW CORPORATIONS. 64sm.^n49. (e)(1).' •
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(aj GENERAL RULE.—Section 435(e)(1) (relating to the alternative Dased on growth) is hereby amended by striking out the phrase "the beginning of its base period" and inserting in lieu thereof the following: "the end of its base period." 26u^s c^M62 (c) ('^) AMENDMENT OF PART II.—Section 462(c) (relating to the use ' by an acquiring corporation in a Part II transaction of an alternative average base period net income based on growth) is hereby amended as follows: (1) By amending paragraph (1) thereof to read as follows: 26U^s o^§'46i(a). "(1) ^^ the casc of a transaction described in section 461(a), other than a transaction described in section 461(a)(1)(E), — " (A) The acquiring corporation shall not be denied the right to determine whether it is eligible for the benefits of 26 u% c^5"435 (e) section 435(e) without reference to the recomputation of its
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