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“banks” and those chartered as “savings banks” or “savings and
loan associations”. This treatment is consistent with the
Federal revenue policy that recognizes that thrift institutions
have historically been the primary source of residential home
mortgages.
Alternatively, petitioner argues that Southwest and Pinellas
qualify as “mutual savings banks” as defined in section 591(b).
Section 591(b) expands the definition of a “mutual savings bank”
for purposes of section 591. Section 591 provides:
SEC. 591. DEDUCTION FOR DIVIDENDS PAID ON DEPOSITS.
(a) In General.-–In the case of mutual savings
banks, cooperative banks, domestic building and loan
associations, and other savings institutions chartered
and supervised as savings and loan or similar
associations under Federal or State law, there shall be
allowed as deductions in computing taxable income
amounts paid to, or credited to the accounts of,
depositors or holders of accounts as dividends or
interest on their deposits or withdrawable accounts, if
such amounts paid or credited are withdrawable on
demand subject only to customary notice of intention to
withdraw.
(b) Mutual Savings Bank to Include Certain Banks
With Capital Stock.-–For purposes of this part, the
term “mutual savings bank” includes any bank–-
(1) which has capital stock represented by
shares, and
(2) which is subject to, and operates under,
Federal or State laws relating to mutual savings
bank.
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