CH. 1—NORMAL TAXES AND SURTAXES
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SEC. 75. DEALERS IN TAX-EXEMPT SECURITIES. (a) ADJUSTMENT FOR BOND P R E M I U M. — I n computing the gross
income of a taxpayer who holds during the taxable year a short-term municipal bond (as defined in subsection (b)(1)) primarily for sale to customers in the ordinary course of his trade or business— (1) if the gross income of the taxpayer from such trade or business is computed by the use of inventories and his inventories are valued on any basis other than cost, the cost of securities sold (as defined in subsection (b)(2)) during such year shall be reduced by an amount equal to the amortizable bond premium which would be disallowed as a deduction for such year by section 171(a)(2) (relating to deduction for amortizable bond premium) if the definition in section 171(d) of the term "bond" did not exclude such shortterm municipal bond; or (2) if the gross income of the taxpayer from such trade or business is computed without the use of inventories, or by use of inventories valued at cost, and the short-term municipal bond is sold or otherwise disposed of during such year, the adjusted basis (computed without regard to this paragraph) of the short-term municipal bond shall be reduced by the amount of the adjustment which would be required under section 1016(a)(5) (relating to adjustment to basis for amortizable bond premium) if the definition in section 171(d) of the term " b o n d " did not exclude such short-term municipal bond. (b) DEFINITIONS.—For purposes of subsection (a)— (1) The term "short-term municipal bond" means any obligation issued by a government or political subdivision thereof if the interest on such obligation is excludable from gross income; b u t such term does not include such an obligation if— (A) it is sold or otherwise disposed of by the taxpayer within 30 days after the date of its acquisition by him, or (B) its earliest maturity or call date is a date more than 5 years VJ from the date on which it was acquired by the taxpayer. (2) The term "cost of securities sold" means the amount ascertained by subtracting the inventory value of the closing inventory of a taxable year from the sum of— (A) the inventory value of the opening inventory for such year, and (B) the cost of securities and other property purchased during such year which would properly be included in the inventory of the taxpayer if on hand at the close of the taxable year. SEC. 76. MORTGAGES MADE OR OBLIGATIONS STOCK LAND BANKS.
ISSUED BY JOINT-
All income (except interest) derived from mortgages made, or obligations issued, after May 28, 1938, by a joint-stock land bank shall (notwithstanding section 26 of the Federal Farm Loan Act; 12 U.S.C. 931-3) be included in gross income. SEC. 77. COMMODITY CREDIT LOANS. (a) ELECTION TO INCLUDE LOANS IN INCOME.—Amounts received
as loans from the Commodity Credit Corporation shall, at the election of the taxpayer, be considered as income and shall be included in gross income for the taxable year in which received. § 77(a) 49012°—54
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