Page:United States Statutes at Large Volume 40 Part 1.djvu/1095

 six*rY-r1F*rH ooNGREss. sm. 111. GH. 18. 1919. 1077 standard forms of investment based upon farm mortgage, to e ualize ¤¤<¤>¤¤ Mxrates of interest upon farm loans, to furnish a market for lllnited States bonds, to create Government depositaries and Hnancial agents for the United States, and for other purposes"; P 81, (14) Personal service corporations. poniiiiis. mlm wp NET INCOME DEFINED. N¤ti¤¤¤¤¤¤~ Sec. 232. That in the case of a corporation subject to the tax Cogrugggl ¤f<=¤r— imposed by section 230 the term "net income" means the oss pmm 1°“ income as defined in section 233 less the deductions allowed!. by section 234, and the net income shall be computed on the same basis as is provided in subdivision (b) of section 212 or in section 226. _ enoss mcoma nnrmnn. Gf°¤si¤°°¤·°· Sec. 233. (a) That in the case of a corporation subject to the tax` §°»`lZ°°§{,. 1065,1075, imposed by section 230 the term " gross income" means the gross income as defined in section 213, except that: (1) In the case of life insurance companies there shall not be in- pgémwmm °°*¤· cluded in gross income such portion of any actual premium received from any individual policyholder as is paid back or credited to or treated as an abatement of premium of such policyholder within the taxable year. _ (2) Mutual marine insurance com anies shall include in gross mmwém income the oss premiums collected) and received by them less . amérigngss pziiflor reiréisurance. I d F _ . n the case o a oreign corporation oss income inc u es °’°’¤“ _ "'““· only the gross income from sou.rces within the€llnited States includ- a¤ll".§.”§`£r"§l°d Sum ing the interest on bonds, notes, or other interest—bearing obligations of residents, corporate or otherwise, dividends from resident cor- _ porations, and including all amoimts received (although paid under a contract for the sale of goods or otherwise) representing profits on the ma.nufactu.re and disposition of goods within the United States. nnnccrrons Annownn. D°d¤¢¤¤¤¤· Sec. 234. (a) That in computing the net income of a cor oration D°“‘“““°“ °" subject to the tax imposed by section 230 there shall be allldwed as deductions: (1) All the ordinary and necessary expenses paid or incurred dur- “‘“‘“°‘°°‘*’°‘”'“· ing the taxable year in carrying on any trade or business, includin a reasonable allowance for salaries or other compensation for personj services actually rendered, and including rentals or other payments required to be made as a condition to the continued use or possession of roperty to which the corporation has not taken or is not taking titlli, or in which it has no equity; ‘ (2) All interest paid or accrued within the taxable year on its k‘*°"°’Y°°d°"°’· indebtedness, except on indebtedness incurred or continued to {pur- E‘°°*"‘°"’· chase or carry obligations or securities (other than obligations o the United States issued after September 24, 1917) the interest upon which is wholly exempt from taxation under this title as income to the taxpayer, or, in the case of a foreign corporation, the proportion of such interest which the amount of its gross income from sources within the United States bears to the amount of its gross income from all sources within and without the United States; _ _ (3) Taxes paid or accrued within the taxable year  (a) D°°°°°f°m°°` by the authority of the United States, except income, war-profits E‘°°P“°“* and excess-profits taxes; or (b) by the authority of any of its posses-