Page:United States Statutes at Large Volume 45 Part 1.djvu/854

 SEVENTIETH CONGRESS. SESS. I. C>3. 852. 1928 . 803 period ending with the close of its taxable year preceding the INCOME TAX declaration of such dividends (or for such part of such period as the corporation has been in existence) was derived from sources within the United States as determined under the pro- Pest, p. 826. visions of section 119. The credit allowed by this subsection shall not be allowed in re- A From rpChinaa n, trade spect of dividends received from a corporation organized under the excepted. China Trade Act, 1922, or from a cor porat ion wh ich u nder sectio n Post, p. 110 - 251 is taxable only on its gross income from sources within the United States by reason of its receiving a large percentage of its gross income from sources within a possession of the United States. (b) Interest on U nited States ob ligations .-Th e am ount rec eive d as Interest on Federal interest upon obligations of the United States which is included in securities. gross income under section 22. (c) Personal exemption. In the case of a single person, a per- Personal exemption. sonal exemption of $1,500 ; or in the case of the head of a family or a married person living with husband or wife, a personal exemption of $3,500. A husband and wife living together shall receive but one hus ba nd and w ife per so nal exemption. The amount of such personal exemption shall living t ogether. be $3,500 . If su ch h usba nd and w ife make sep arat e re turn s, the Separate returns . personal exemption may be taken by either or divided between them. (d) Credit for dependents .-$400 for ea ch person (ot her th an entsredit for depend- husband or wife) dependent upon and receiving his chief support from the taxpayer if such dependent person is under eighteen years of age or is incapable of self-support because mentally or physically defective. (e) Change of status .- (1) The credit for dependents shall be determined by the personalcred taxpa yer for status of the taxpayer on the last day of his taxable year. (2) The personal exemption allowed by subsection (c) of this Pers onal exem ptio n on change of taxable section shall, in case the status of the taxpayer changes during year, computed . his taxable year, be the sum of an amount which bears the same ratio to $1,500 as the number of months during which the tax- payer was single bears to twelve months, plus an amount which bears the same ratio to $3,500 as the number of months during which the taxpayer was a married person living with husband or wife or was the head of a family bears to twelve months. For the purposes of this paragraph a fractional part of a month shall be disregard ed unless it amounts to mor e than half a month, in which case it shall be considered as a month. (3) In the case of an individual who dies during the taxable Allowance in case of year, the personal exemption and the credit for dependents shall death in taxab le year. b e determined by his status at the time of his death, and in such case full credits shall be allowed to the surviving spouse, if any, according to his or her status at the close of the taxable year. SEC. 26. CREDITS OF CORPORATION AGAINST NET INCOME. Credits allowed cor- por ati ons. For the purpose only of the tax imposed by section 13 there shall Design t`o of. b e allowe d the fo llowing credits (a) The amount re ceiv ed as in tere st u pon obli gati ons of the obligations. Inter est f rom Feder al United States which is included in gross income under section 22; and (b) In the case of a domestic corporation the net income of which Speci fic m oney cred it is $25,000 or less, a specific credit of $3,000 ; but if the net income is to dom est ic. more tha n $25,00 0 the ta x impose d by sec tion 13 shall not exceed the tax which would be payable if the $3,000 credit were allowed, plus the amount of the net income in excess of $25,000.

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