Page:United States Statutes at Large Volume 65.djvu/579

This page needs to be proofread.


65 STAT.]

PUBLIC LAW 183—OCT. 20, 1951 excess profits net income provided for in section 462(b) where the transaction occurred on or after J u l ^ 1, 1950, but it shall be denied such right where the transaction occurred prior to July 1, 1950. " (B) Where, immediately prior to the date of the transaction, the acquiring corporation and all the component corporations (other than a corporation created incident to such transaction) met the requirements of section 435(e)(1)(A) (i), and, in case the transaction occurred on or after July 1, 1950, had commenced business prior to the beginning of its base period (determined without reference to section 461 (d)), the acquiring corporation shall be entitled to compute its average base period net income under section 435(e) with reference to the recomputation of its excess profits net-income provided for in section 462(b) if the tests of section 435(e) are satisfied. For that purpose, the acquiring corporation shall combine with its total payroll and its total gross receipts for that portion of its base period which preceded such transaction the total payroll and total gross receipts of such component corporations for that portion of such period and it shall combine with its net sales for that portion of the period prior to January 1, 1951, which preceded such transaction the net sales of such component corporations for that portion of such period. The allocation oi payroll and gross receipts amounts of a component corporation to any such portion of such period shall be made in accordance with the rules provided in section 435(e)(4) and (5). For purposes of qualifying under section 435(e)(1)(A)(i) (relating to total assets of the taxpayer), such acquiring corporation shall combine its total assets on the date specified in section 435(e) (1)(A)(i) with the total assets of each component corporation on such date. The Secretary shall prescribe by regulations such rules as may be necessary to insure that such combined total gross receipts do not reflect a duplication for purposes of this section.

545 ^ ^.^g- c ^ " 6 (b) §4 2

26u*^s' c*§"435 (ei |^u*^g' c^f^ei (di

" (C) Where, immediately prior to the date of the transaction, either the acquiring corporation or one or more component corporations (other than a corporation created incident to such transaction) did not meet the requirements of section 435(e)(1)(A)(i), or, in case the transaction occurred on or after July 1, 1950, had not commenced business prior to the beginning of its base period (determined without reference to section 461(d)), the acquiring corporation shall not be entitled to compute its average base period net income under secti'^n 435 (e) with reference to the recomputation of its excess profits net income provided for in section 462(b). I n any such case, where the transaction occurred on or after July 1, 1950, the monthly excess profits net income of the corporation entitled to the benefits of section 435(e) for any month of the acquiring corporation's base period shall be, for purposes of the recomputation provided for in section 462(b), one-twelfth of the average base period net income to which such corporation was entitled under section 435(e), and such monthly excess profits net income shall be in lieu of the monthly excess profits net income determined under paragraphs (1) and (2) of section 462 (b). " (2) By striking from the second sentence of paragraph (2) ^^u^*g"^; thereof the words: "had commenced business prior to the begin- (c)(2).* ' *^^