260 SIXTY-EIGHTH CONGRESS. Sess. I. Ch. 234. 1924. ¤*°¤¤¤= ML due regard shall befgilyengo the fair market value of the assets of th f t t te. D¤v¤¤¤¤¤, ·¤h¤¤¤· Gd))r¥‘•hIea lidslxisasugon gvhidh depletion, exhaustion, wear and tear, ¤°°' °W"’ °u°w°d` and obsolescence are to be allowed in respect of any property shall be the SQHQB-8,S is provided in subdivision (a) or (b) for_the purpose 0 _ il d of determining the gain or. loss upon the sale_ or other disposition of well]; liiliggégmiuadil such property, except that in the case of mines, o1l and gas wells,
- '°*"“°'Y 2* “”“· discovered by the taxpayer after February 28, 1913, and Ipot arilqupred
the result of purchase of a proven tract or lease w ere the air ihgarket value of the property is materially disprogiortionate to the cost, the basis for depletion shall be the fa1r inar et value of the roperty at the date of discovery or within thirty days thereafter; “”’“““°“· but such depletion allowance based on discovery value shall not exceed 50 per centum of the net income (computed withtput allowance for de letion) from the property upon which the iscovery was made, grcept that in no case shall the depletion aHowance be less than it would be if computed without reference to discovery value. I“°“*""‘°* mvnuronms. QM °°°°““*"‘ Sec. 205. Whenever in the opinion of the Commissioner the use of inventories is necessary in order clearly to determine the mcome of ang taxpayer, énventories shall lac éaken by siachftaapzéyer upon such asis as the ommissioner wit e approva o the ecretary may prescribe as conforming as,nearly as may be to the best account: ing practice in the trade or business and as most clearly reflecting N the income. °* Nm- Lossns. D°°°"‘“‘”°d by °" Sec. 206. (a) As used in this section the term " net lom " means ?餰ii¤(<igii¤u£¤°m ow the excess of the deductions allowed by section 214 or 234 over the gross mcome, with the following exceptions and limitation : ,7,}% gggm°‘g;$°°‘°d (1) Deductions otherwise allowed y law not attributable to the ppeliiagaoplpf a (tiradie or bilrsiness reg1;l2l1;ly carried cgi by the taxpayer a owe on y to the extent o e amount o the gross income not derived from such trade or business · ,,,§g!’*‘§,m'$;p°$a¥ (2) ln the case of a taxpayer other tlian a copporation, deductions ¤¤¤¤- for capital losses otherwise allowed by law sha be allowed only to the extent of the capital gains; D°°’°"°“· (_3) The deduction for depletion shall not exceed the amount wlpch would be allowable if computed with0ut reference to discovery va ue · a.§§.°§§?°.i1°§i£§a°*“' (4), The deduction {provided for in paragraph (6) of Subdivision (pl) (gi section 234 o amounts received as dividends shall not be _ a ow · ,,,uI§§‘s,§§s,,*{§0,},§f (_5) 'llhere shall be included in computinggross income the amount of interest received free from tax under t is title, decreased by the amount of interest pa1d_or accrued and losses sustained which is not allowed as a deduction by paragraph (2) of subdivision (a) Q t I to be I of section 214 or by paragraph (2) of subdivision (a) of section 234. dgcged gm mx gif; (b) If, forfany taxable year, it appears upon the production of
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_ _ p _ owe asa e uc 1011 m computing the_net incpme of the taxpayer for the succeedin taxable year (hereinafter in this section called " second year "), and 1f such net loss is in excess of such net income (computed without such deduction), the amount of such excess shall be allowed as a deduction m computing the net income for the next succeeding taxable year (hereinafter in this section called " third year "); the deduction in_ all cases to be made under regulations prescribed by the Commissioner with the approval of the Secretary.
