NET OPERATING LOSS DEDUCTION.

SEC. 14. NET OPERATING LOSS DEDUCTION. (a) Taxable Years Beginning in 1953 and Ending in 1954.— Section 172 (f) (relating to net operating loss provisions for taxable years beginning in 1953 and ending in 1954) is amended by adding at the end thereof the following new paragraphs: “(3) The net operating loss deduction for such year shall be, in lieu of the amount specified in section 122 (c) of the Internal Revenue Code of 1939, the sum of— “(A) that portion of the net operating loss deduction for such year, computed as if subsection (a) of this section were applicable to the taxable year, which the number of days in such year after December 31, 1953, bears to the total number of days in such year, and “(B) that portion of the net operating loss deduction for such year, computed under section 122 (c) of the Internal Revenue Code of 1939 as if this paragraph had not been enacted, which the number of days in such year before January 1, 1954, bears to the total number of days in such year. “(4) For purposes of the second sentence of subsection (b) (2), the taxable income for such year shall be the sum of— “(A) that portion of the net income for such year, computed without regard to this paragraph, which the number of days in such year before January 1, 1954, hears to the total number of days in such year, and “(B) that portion of the net income for such year, computed— “(i) without regard to paragraphs (1) and (2) of section 122 (d) of the Internal Revenue Code of 1939, and “(ii) by allowing as a deduction an amount equal to the sum of the credits provided in subsections (b) and (h) of section 26 of such Code, which the number of days in such year after December 31, 1953, bears to the total number of days in such year.” (b) Short Taxable Years Beginning in 1954.— Section 172 (g) (relating to special transitional rules for net operating loss provisions) is amended by redesignating paragraph (3) as paragraph (4) and by inserting after paragraph (2) the following new paragraph: “(3) Taxable years beginning after December 31, 1953, and ending before August 17, 1954.— In the case of a taxable year which begins after December 31, 1953, and ends before August 17, 1954—. “(A) the net operating loss deduction for such year shall be computed as if subsection (a) of this section applied to such taxable year, and “(B) for purposes of the second sentence of subsection (b) (2), the taxable income for such taxable year shall be the net income for such taxable year, computed— “(i) without regard to paragraphs (1) and (2) of section 122 (d) of the Internal Revenue Code of 1939, and “(ii) by allowing as a deduction an amount equal to the sum of the credits provided in subsections (b) and (h) of section 26 of such Code.” (c) Statute of Limitations, etc.; Interest.—If refund or credit of any overpayment resulting from the application of the amendment 72 Stat. 1612 made by subsection (a) or (b) is prevented on the date of the enactment of this Act, or within 6 months after such date, by the operation of any law or rule of law (other than section 3760 of the Internal Revenue Code of 1939 or section 7121 of the Internal Revenue Code of 1954, relating to closing agreements, and other than section 3761 of the Internal Revenue Code of 1939 or section 7122 of the Internal Revenue Code of 1954, relating to compromises), refund or credit of such overpayment may, nevertheless, be made or allowed if claim therefor is filed within 6 months after such date. No interest shall be paid or allowed on any overpayment resulting from the application of the amendment made by subsection (a) or (b).