582
PUBLIC LAW 91-172-DEC. 30, 1969
78 Stat. 69.
section 424(b)), the amount by which the fair market value of tV share at the time of exercise exceeds the option price. "(7)
Post, p. 616. Post, p. 6 20.
..
72 Stat. 1650. Ante, p. 528.
KESERVES FOR LOSSES OX BAD DEBTS or FIXANCIAL INSTITU.
Tioxs.—In the case of a financial institution to which section 585 or 593 applies, the amount by which the deduction allowable for the taxable year for a reasonable addition to a reserve for bad debts exceeds the amount that would have been allowable had the institution maintained its bad debt reserve for all taxable years on the basis of actual experience. " (8) DEPLETIOX.—With respect to each property (as defined in section 614), the excess of the deduction for depletion allowable under section 611 for the taxable year over the adjusted basis of the property at the end of the taxable year (determined without regard to the depletion deduction for the taxable year).
68A Stat. 210. 26 USC 614.
78 Stat. 25. Post, p. 635.
[33 ST^T
(9) CAPITAL GAixs.—
" (A) INDIVIDUALS.—In the case of a taxpayer other than a corporation, an amount equal to one-half of the amount by which the net long-term capital gain exceeds the net shortterm capital loss for the taxable year. " (B) CORPORATIONS.—In the case of a corporation, if the net long-term capital gain exceeds the net short-term capital loss for the taxable year, an amount equal to the product obtained by multiplying such excess by a fraction the numerator of which is the sum of the normal tax rate and the surtax rate under section 11, minus the alternative tax rate under section 1201(a), for the taxable year, and the denominator of which is the sum of the normal tax rate and the surtax rate under section 11 for the taxable year. I n the case of a corporation to which section 1201(a) does not apply, the amount under this subparagraph shall be determined under regulations prescribed by the Secretary or his delegate in a manner consistent with the preceding sentence. Paragraph (1) shall apply only to taxable years beginning before January 1, 1972. Paragraphs (1) and (3) shall not apply to a corporation other than an electing small business corporation (as defined in section 1371(b)) and a personal holding company (as defined in section 542). "(b)
EXCESS INVESTMENT INTEREST.—
"(1) IN GENERAL.—For purposes of paragraph (1) of subsection (a), the excess investment interest for any taxable year is the amount by which the investment interest expense for the taxable year exceeds the net investment income for the taxable year. ,,. "", "(2) DEFINITIONS.—For purposes of this subsection— " (A) N E T INVESTMENT INCOME.—The term 'net investment _ income' means the excess of investment income over invest; .,, „,^„:i^ ment expenses. .? ^^ ^ " (B) INVESTMENT INCOME.—The term 'investment income ^! r' means— <:•,,#\4.c,^ -'^ ..jifc "(^) *^^^ gross income from interest, dividends, rents, ^V'" * and royalties,
- ,j H.rt,
nj. "(ii) the net short-term capital gain attributable to the disposition of property held for investment, and pVstl'.lll'. "(^j^) amounts treated under sections 1245 and 1250 as gain from the sale or exchange of property which is neither a capital asset nor property described in section 68A Stat. 325.
1231
but only to the extent such income, gain, and amounts are not derived from the conduct of a trade or business.
�
