NET OPERATING LOSS carryovers.

SEC. 205. NET OPERATING LOSS carryovers. (a) Amendment of Section 122 (b) (2).— (1) Section 122 (b) (2) (relating to net operating loss carryover) is hereby amended by adding after subparagraph (D) the following new subparagraphs: “(E) Loss For Taxable Years of Corporations Beginning In 1947 And Ending In 1948.— If a corporation (other than a corporation which commenced business after December 31, 1945) has a net operating loss for a taxable year beginning in 1947 and ending in 1948, subparagraph (C) shall apply as if the taxable year began after December 31, 1947; except that the net operating loss carryover for the, third succeeding taxable year shall not exceed that amount which bears the same ratio to the net operating loss as the number of days in the taxable year after December 31, 1947, bears to the total number of days in the taxable year. “(F) Loss in Case of Corporations Whose First Taxable Year Began in 1949 and Ended in 1950.— If the first taxable year of a corporation began in 1949 and ended in 1950, and if the corporation had a net operating loss for such first taxable year, there shall be a net operating loss carryover for the fourth and fifth succeeding taxable years. The amount of such carryover shall be determined in accordance with the first sentence of subparagraph (B); except that— “(i) such carryover for the fourth succeeding taxable year shall not exceed so much of such net operating loss as is allocable to 1950, and “(ii) such carryover for the fifth succeeding taxable year shall not exceed the amount by which the carryover for the fourth succeeding taxable year (as limited by clause (i) of this sentence) exceeds the net income for the fourth succeeding taxable year computed as provided in clauses (i) and (ii) of the first sentence of subparagraph (B). For the purposes of the preceding sentence, the portion of the net operating loss which is allocable to 1950 shall be an amount which bears the same ratio to such loss as the number of days in the taxable year after December 31, 1949, bears to the total number of days in the taxable year.” (2) Subparagraph (A) of section 122 (b) (2) is hereby amended by striking out “subparagraph (D),” and inserting in lieu thereof “subparagraphs (D) and (E),”. (3) The amendment made by paragraph (2), and subparagraph (E) of section 122 lb) (2) of the Internal Revenue Code as added by paragraph (1), shall apply with respect to taxable years ending after December 31, 1947. Subparagraph (F) of section 122 (b) (2) of the Internal Revenue Code as added by paragraph (1) shall apply with respect to taxable years ending after December 31, 1949. (b) Successor Railroad Corporations.— (1) Subsection (c) of the first section of the Act of July 15, 1947 (61 Stat. 324), relating to allowance to successor railroad corporations of benefits of certain carryovers of predecessor corporations, is hereby amended to read as follows: 67 Stat. 620 “(c) For the purposes of this section, if the period, beginning on the first day of the taxable year of the predecessor corporation in which the acquisition occurred and ending on the last day of the taxable year of the successor corporation in which the acquisition occurred, is not more than twelve months, then— “(1) if such net operating loss or unused excess profits credit was for a taxable year beginning before January 1, 1948, the number of succeeding taxable years to which such net operating loss or unused excess profits credit is a carryover shall be three (instead of two, as respectively provided in section 122 (b) (2) (A) and section 710 (c) (3) (11) of such code); and “(2) if such net operating loss was for a taxable year beginning after December 31, 1947, and before January 1, 1950, the number of succeeding taxable years to which such net operating loss is a carryover shall be four (instead of three, as provided in section 122 (b) (2) (C) of such code); and such regulations shall prescribe (as nearly as possible in the manner respectively prescribed in sections 122 (b) (2) and 710 (c) (3) (B) of such code with respect to a net operating loss or an unused excess profits credit, as the case may be, for such taxable year) the amount to be carried over to the last of such succeeding taxable years.” (2) The amendment made by paragraph (1) shall be effective as if included in such Act of July 15, 1947, at the time of its enactment.