- 15 - contends that an institution that satisfies these tests thereby qualifies as a domestic savings and loan association. Section 301.7701-13A(a), Proced. & Admin. Regs., adds to the list of institutions that are domestic building and loan associations “any other savings institution chartered and supervised as a savings and loan or similar association under Federal or State law which meets the * * * [three tests]”. According to petitioner, the effect of this regulation is to allow the use of the reserve method of accounting under section 593 by any “similar association” that meets the three tests. Both parties cite the evolution of the term “building and loan association” in the Code and associated legislative history in support of their respective positions. The definition of a “building and loan association” under section 101(4), I.R.C. 1939, was expanded to include “a domestic building and loan association, a domestic savings and loan association, and a Federal savings and loan association, substantially all the business of which is confined to making loans to members” by the Revenue Act of 1951, ch. 521, sec. 313, 65 Stat. 490. In that Act, Congress eliminated the exemption from Federal income tax for domestic building and loan associations and instead enacted generous rules for calculating deductions for additions to bad debt reserves. Revenue Act of 1951, ch. 521, sec. 313(e), 65 Stat. 490-491. The legislativePage: Previous 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Next
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