Page:United States Statutes at Large Volume 47 Part 1.djvu/232

 208 INCOME TAX Proportion for dif- ferent rates. Loss from wash sales of stock, etc. Restriction on claim for if taxpayer has ac- quired substantially identical stock within thirty days. An te, p .180. Allowance to a corpo- ration, etc. Computation where propertyacquired is less than sold . p Computation where roper ty acq uired is no t than sold. Income from sources within United States. Items treated as. Interest on bonds, etc ., of reside nts. Exceptions. Paid to persons not in busine ss in United States. If less than 20per cent from Uni ted States sources. From bankers' ac- ceptances. 72d CONGRESS. SESS.I. CH. 209. JUNE 6, 1932 . determined und er the law applic able to the first calendar year, which the portion of such period fa lling within suc h calendar year is of the entire period ; and (2) the same proportion of a net loss for the entire period, determined under the law applicable to the second calendar year, which the portion of such period falling within such calendar year is of the entire period. SEC. 118. LOSS FROM WASH SALES OF STOCK OR SECURITIES. (a) In the case bf any loss claimed to have been sustained from any sale or other disposition of shares of stock or securities where it appears that, within a period beginning 30 days before the date of such sale or disposition and ending 30 days after such date, the taxpayer has acquired (by purchase or by an exchange upon which the entire amount of ga in or lo ss was recognized by law), or has entered into a contract or option so to acquire, substantially identical stock or securities, then no deduction for the loss shall be allowed under section 23 (e) (2) ; nor shall such deduction be allowed under section 23 (f) unless th e claim is made by a cor poration, a deal er in stocks or securities, and with respect to a transaction made in the ordinary course of its business. (b) If the amount of stock or securities acquired (or covered by the contract or option to acquire) is less than the amount of stock or securities sold or otherwise disposed of, then the particular shares of stoc k or sec urities t he loss from the sale or other d ispositi on of which is not deductible shall be determined under rules and regula- tions prescribed by the Commissioner with the approval of the. Secretary. (c) If the amount of stock or securities'acquired (or covered by the contract or option to acquire) is not less than the amount of stock o r securi ties sold or othe rwise di sposed o f then t he parti cular shares of stock or securities the acquisition of wIiich (or the contract or option to acquire which) resulted in the nondeductibility of the loss shall be de termi ned u nder rules and r egula tions presc ribed by the Commissioner with the approval of the Secretary. SEC. 119. INCOME FROM SOURCES WITHIN UNITED STATES. (a) GRoss INCOME FROM SOURCES IN UNITED STATES.-The fol- lowing items of gross income shall be treated as income from sources within the United States (1) INTEREST.-Interest on bonds, notes, or other interest-bear- ing obligations of residents, corporate or otherwise, not including- (A) interest on deposits with persons carrying on the banking business paid to persons not engaged in business within the United States and not having a n office or place of bus iness ther ein, or (B) interest received from a resident alien individual, a resi- dent foreign corporation, or a domestic corporation, when it is. shown to the satisfaction of the Commissioner th at le ss than 20 per centum of the gross income of such resident payor or domestic corporation has been derived from sources within the United States, as determined under the provisions of this section, for the three-year period ending with the close of the taxable ye ar of such payor prec eding the paymen t of such intere st, o r for such part of such period as may be applicable, or (C) income derived by a foreign central bank of issue from bankers' acceptances ;