Page:United States Statutes at Large Volume 49 Part 1.djvu/1739

 1694 74TH CONGRESS. SESS. II. CH. 690. JUNE 22, 1936. Dividends. States bears to its gross income from all sources ; but dividends Post, p. 1696 . from a foreign corporation shall, for the purposes of section 131 (relating to foreign tax credit), be treated as income from sources without the United States ; Personal services in United States. (3) PERSONAL sERVIcEs .-Compensation for labor or personal services performed in the United States, but in the case of a non- resident alien individual temporarily present in the United States for a period or periods not exceeding a total of ninety days during the taxable year, compensation received by such an individual (if such compensation does not exceed $3,000 in the aggregate) for labor or services performed as an employee of or under a contract with a nonresident alien, foreign partnership, or foreign corpora- tion, not engag ed in trade or business with in the United States, shall not be deemed to be income from sources within the United States ; Rentals, royalties, (4) RENTALS AND ROYALTIES .-Rentals or royalties from property sour from United Sta tes located in the United States or from any interest in such property sourc es. includ ing rentals or royalti es for the use of or fo r the privilege of using in the United States patents, copyrights, secret processes and formulas, goodwill, trade marks, trade brands, franchises, and other like property ; and Real property sales. (5) SALE OF REAL PROPERTY.--Gains, profits, and income from the sale of real property located in the United States. Sale of personal prop- (6) SALE OF PERSONAL PROPERTY .-For gains, profits, and income erty. from the sale of personal property, see subsection (e). Net inc ome fro m (b) NET INCOME FROM SOURCES IN UNITED STATES .-From the items sources in United states. Of gross income s pecified in subsection (a) of this section th ere 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 allocated 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. Gross income from (c) GROSS INCOM E FRO M SOU RCES WITHOUT UNITED STATES .-The sources without the United states. following items of gross income shall be treated as income from sources without the United States Interest . (1) Interest other than that derived from sources within the United States as provided in subsection (a) (1) of this section ; Dividends. (2) Dividends other than those derived from sources within the United S tates as provided in subsect ion (a) (2) of this section ; Labor, etc. (3) Compens ation for labor or personal services pe rformed wi thout the Unite d Sta tes ; Rentals, royalties, (4) Rentals or royalties from property located without the etc_ United States 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 an d for mulas, goo d wil l, tr ade-m arks, trad e bra nds, franc hises , and other like properties ; and Real pr operty sales. (5) G ains, prof its, and i ncome from the sale of re al pr opert y located without the United States ..~ Net income fr om (d) NET INCOME FROM SOURCES WITHOUT UNITED STATES .-From sources without the United states. the items of gross income specified in subsection (c) of this section there shall be deducted the expenses, losse s, and other deductions properly apportioned or allocated thereto, and a ratable part of any exp enses, los ses, or ot her d educt ions which can not d efini tely be allocated to some item or class of gross income. The remainder, if any, shall be treated in full as net Income from sources without the Uni ted S tates.