Page:United States Statutes at Large Volume 47 Part 1.djvu/252

 228 INCOME TAX Nonresident alien in- dividuals. Normal tax. Rate. Resi dent s in cont ig- uous countries. Compensation for per son al services in United States. Maximum. Additional in excess. In lieu of normal tax. Ante, p. 174 . Gross incom e. Includes only United States sources. Earnings from foreign ship operations exempt from taxation, Deductions. Allowed only if con. nected with i ncome fr om United States sources. Ante, p. 208. Los ses. Not connecte d with trade or business. Ante, p . 180. Casualty, etc ., losse s not connected with business. 72d CONGRESS. SESS. I. CH. 209. JUNE 6, 1932. their members to make premium deposits to provide for losses and expenses, the amount of premium deposits returned to their policy- holders and the amount of premium deposits retained for the payment of losses, expenses, and reinsurance reserves. Supplement H-Nonresident Alien Individuals SEC. 211. NORMA L TAX. (a) GENERAL RULE .-In the case of a nonresident alien individual who is not a resident of a contiguous country, the normal tax shall be 8 per centum of the amount of the net income in excess of the credits a gainst ne t income allowed t o such in dividual. (b) ALIENS RESIDENT IN CONTIGUOUS CouNTRIEs .-In the ca se of an alien individual resident in a contiguous country, the normal tax shall be an amount equal to the sum of the following : (1) 4 per centum of the amount by which the part of the net income attributable to wages, salaries, professional fees, or other amo unts r eceive d as c ompens ation for pe rsonal servic es act ually performed in the United States, exceeds the personal exemption and credit for dependents ; but the amount taxable at such 4 per cen tum rate shall not exceed $ 4,000 ; a nd (2) 8 per centum of the amount of the net income in excess of the sum of (A) the amount taxed under paragraph (1of this sub section p lus (B) t he total credits a gainst ne t income allowed t o such individual . (c) IN LIEU OF NORMAL TAx UNDER SECTION 11 .-The tax imposed by this section shall be in lieu of the normal tax imposed by sec- tion 11 . SEC. 212. GR OSS IN COM E. (a) GENERAL RULE .-In the case of a nonresident alien individual gross income includes only the gross income from sources within the United States . (b) SHIPS UNDER FOREIGN FLAG .-The income of a nonresident alien individual which consists exclusively of earnings derived from the operation of a ship or ships documented under the laws of a foreign country which grants an equivalent exemption to citizens of the United States and to corporations organized in the United States, shall not b e incl uded i n gros s incom e and shall be exe mpt from taxation under this title . SEC. 213. DEDUCTIONS. (a) GENERAL RULE .-In the case of a nonresident alien individual the deductions shall be allowed only if and to the extent that they are connected with income from sources within the United States ; and the proper apportionment and allocation of the deductions with respect to so urces of inc ome wi thin a nd with out th e Unit ed Sta tes shall be determined as provided in section 119, under rule s and regulations prescribed by the Commissioner with the approval of the Secretary. (b) LOSSES .- (1) The deduction, for losses not connected with the trade or business if incurred in transactions entered into for profit, allowed by s ection 23 (e ) (2) shall be all owed wh ether or not conne cted with income from sources within the United States, but only if the profit, if such transaction had resulted in a profit, would be taxabl e under t his title. (2) The deduction for losses of property not connected with the trade or business if arising from certain casualties or theft, allowed by section 23 (e) (3), shall be allowed whether or not