Page:United States Statutes at Large Volume 45 Part 1.djvu/874

 SEVENTIETH CONGRESS. SEss. I. Cu. 852. 1928. 823 that it rep resent s a di stribu tion o f earni ngs or profi ts acc umulat ed INCOME TAY after February 28, 1913, shall be treated as a taxable dividend. Stock canceled after In the case of the cancellation or redemption of stock not issued Janu ary as a stock dividend this subsection shall apply only if the cancella- tion or redemption is made after January 1, 1926. (h) Definition of partial liquidation .-As used in this section M e a n i n g ° f "amounts distributed the term " amounts distributed in partial liquidation " means a in partial liquidation ." distri bution by a corpor ation in com plete c ancell ation or red emptio n of a par t of its stock, or one of a series of distri butions i n complet e cancellation or redemption of all or a portion of its stock. SEC. 116. EXCLUSIONS FROM GROSS INCOME. income. ionsfr°m gross In addition to the items specified in section 22(b), the following a Pad om t,teon.e items shall not be included in gross income and shall be exempt from t axatio n unde r this title (a) Earned income from sources without United States .-In the Earned income of nonr eside nt citizens, case of an individual citizen of the United States, a bona fide unmea sources. outside nonr eside nt of the Unit ed St ates for more than six month s dur ing the taxable year, amounts received from sources without the United States if such amounts constitute earned income as defined in section 31 from his gross income any deductions properly allocable to or chargeable against amounts excluded from gross income under this subsection. (b) Teachers in Alaska and Hawaii .-In the case of an individual Teachers in Alaska employed by Alaska or Hawaii or any political subdivision thereof and n awaii. as a teacher in any educational institution, the compensation received as such . This subsect ion shall not exempt compensation paid tio n Federal exc ep ted ompensa- directly or indirectly by the Government of the United States. (c) Income of foreign governments .-The income of foreign Inco me of fore ign government s from in- governments received from investments in the United States in vestments in united stocks, bonds, or other domestic securities, owned by such foreign state,, etc. governments, or from interest on deposits in banks in the United States of moneys belonging to such foreign governments, or from any other source within the United States. (d) Income of States, municipalities, etc .-Income derived from Income of states, any publi c uti lity or t he ex ercis e of any essen tial gove rnmen tal ties' from public utfli- function and accruing to any State, Territory, or the District of Columbia, or any political subdivision of a State or Territory, or income accruing to the Government of any possession of the United States, or any po litical s ubdivisio n thereo f. If under prior con- Whenever any State, Territory, or the District of Columbia, or tracts for ope rat ion any political subdivision of a State or Territory, prior to September thereof. 8, 1916, entered in good faith into a contract with any person, the object and purpose of which is to acquire, construct, operate, or maintain a public utility- Tax levi ed on pro - (1) If by the terms of such contract the tax imposed by this coeds prior to division title is to be paid out of the proceeds from the operation of such thereof with State, etc . public utility, prior to any division of such proceeds between the person and the State, Territory, political subdivision, or the District of Columbia, and if, but for the imposition of the tax imposed by this title, a part of such proceeds for the taxable year would accrue directly to or for the use of such State, Terri- tory, political subdivision, or the District of Columbia, then a tax upon the net income from the operation of such public utility shall be levied, assessed, collected, and paid in the manner and at the rates prescribed in this title, but there shall be refunded Refund to Stat es, etc. to suc h State, Territory, politic al subdiv ision, or the Dist rict of Columbia (under rules and regulations to be prescribed by the Commissioner with the approval of the Secretary) an amount
 * but such individual shall not be allowed as a deduction

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