Page:United States Statutes at Large Volume 48 Part 1.djvu/743

 73d CON GRESS. SESS. II. CIA. 277. MAY 10, 1934. corporation shall, for the purposes of section 131 (relating to foreign tax credit). be treated as income from sources without the United States ; (3) PERSONAL SERVICES .-Conlpensation for labor or personal services performed in the United States ; (4) RENTALS AND ROYALTIES--Rentals or royalties from prop- er ty loc ated in the United States or from any interest in such pro perty, i ncluding rentals or roya lties fo r the us e of or for the privilege of using in the United Sta tes, patents, copyrights, secret processes and formulas, good will, trade-marks, trade brands, fra nchises, and oth er like property ; and (5) SALE OF REAL PRO ERTY.-Gains, profits, and income from the sale of real property located in the United States. (6) SALE OF PERSONAL PROPERTY.-For gains, profits and income fro m the sa le of pe rsonal p roperty, see sub section (e). (b) NET INCOME FROM SOURCES IN UNITED STATES.-From the items of gross income specified in subsection (a) of this section there shall be deducted the expenses, losses, and other deductions properly apportio ned or a llocated thereto and a r atable pa rt of an y expens es, losses, or other deducti ons whic h can no t definit ely be a llocated to some item or class of gross income. The remainder, if any, shall be included in full as net income from sources within the United States. (c) GROS S INCO ME FRO M SOUR CES WITHOUT UNITED STATES. - The following items of gross income shall be treated as income from sources without the United States : (1 ) Inte rest other than that deriv ed fro m sou rces within the Un ited Sta tes as p rovided in subse ction (a ) (1) of this section ; (2) Dividends other than those derived from sources within the United States as provided in subsection (a) (2) of this section ; (3) Co mpen sati on for l abor or pers onal ser vice s pe rfor med without the United States ; (4) Rentals or royalties from property located witho ut the Un ited S tates or from any interest in such property, including rentals or royalties for the use of or for the privilege of using without the United States, patents, copyrights, secret processes and formulas, good will, trade-marks, trade brands, franchises, and other like properties ; and (5) Gains, profits, and income from the sale of real property located without the United States. (d) NET INCOME FRO M SOURCES W IT HO UT UNITED STATES. -F ro m the items of gross income specified in subsection (c) of this section there shall be deducted the expenses, losses, and other deductions properly apportioned or allocated thereto, and a ratable part of any expenses, losses, or other deductions which can not definitely be allocate d to som e item o r class of gross income. The remainder, if any, shall be treated in full as net income from sources without the United States. (e) INCOME FROM SOURCES PARTLY WITHIN AND PARTLY WITHOUT UNITED STATES .-Items of gross income, expenses, losses and deduc- tions, other than those specified in subsections (a) and (c) of this section, shall be allocated or apportioned to sources within or without the United States, tinder rules and regulations prescribed by the Commis sione r wit h the appro val of the Secre tary. Wher e it ems of gross income are separately allocated to sources within the United States, there shall be deducted (for the purpose of computing the net in come there from) the e xpense s, lo sses, and other deductions pro pe rly apportioned or allocated th er eto and a ratable par t of other expenses, losses or other deductions which can not definitely 717 INCOME TAX. COMPUTATION OF NET I NCOME- Contd. Personal services. Rentals, royalties, etc ., from United St ates sour ces. Real p ropert y sale .. . Sale of per son al pro p- erty. N et in come from sources in United States. Gross income from without United State .. Other sources of in- tere st. Other dividends. Compensation for services without United States. Rentals, royalties, etc ., without United States. Real estate sa te without United States. N et in come from sources without the United States. Income partly within and partly without United States. Apportionment. F rom Unite d St ates sources.