Page:United States Statutes at Large Volume 52.djvu/573

 PUBLIC LAWS-OH. 289-MAY 28, 1938 Affiliation. Ante, p. 508. Possessions of the United States. SEC. 238. AFFILIATION. A foreign corporation shall not be deemed to be affiliated with any other corporation within the meaning of section 141. Supplement J-Possessions of the United States Incormefromsources SEC. 251. INCOME FROM SOURCES WITHIN POSSESSIONS OF UNITED within. STATES. General rule. Amounts received in United States. Tax in case of cor- porations. Ante, pp. 457, 470. Status of Virgin Islands. Deductions. Citizens of the United States. Ante, p. 527. Domestic corpora- tions. Ante, p. 530. Credits against net income; personal ex- emption. Ante, p. 467. (a) GENERAL RULE. - In the case of citizens of the United States or domestic corporations, satisfying the following conditions, gross income means only gross income from sources within the United States- (1) If 80 per centum or more of the gross income of such citi- zen or domestic corporation (computed without the benefit of this section), for the three-year period immediately preceding the close of the taxable year (or for such part of such period immediately preceding the close of such taxable year as may be applicable) was derived from sources within a possession of the United States; and (2) If, in the case of such corporation, 50 per centum or more of its gross income (computed without the benefit of this sec- tion) for such period or such part thereof was derived from the active conduct of a trade or business within a possession of the United States; or (3) If, in case of such citizen, 50 per centum or more of his gross income (computed without the benefit of this sec- tion) for such period or such part thereof was derived'from the active conduct of a trade or business within a possession of the United States either on his own account or as an employee or agent of another. (b) AMOUNTS RECEIVED IN UNITED STATES.- Notwithstanding the provisions of subsection (a) there shall be included in gross income all amounts received by such citizens or corporations within the United States, whether derived from sources within or without the United States. (c) TAX IN CASE OF CORPORATIONS. -A domestic corporation entitled to the benefits of this section shall be taxable as provided in section 14 (d). For inclusion in computation of tax of amount speci- fied in shareholder's consent, see section 28. (d) DEFINITION. -As used in this section the term "possession of the United States" does not include the Virgin Islands of the United States. (e) DEDUCTIONS. - (1) Citizens of the United States entitled to the benefits of this section shall have the same deductions as are allowed by Supplement H in the case of a nonresident alien individual engaged in trade or business within the United States or having an ofce or place of business therein. (2) Domestic corporations entitled to the benefits of this section shall have the same deductions as are allowed by Supple- ment I in the case of a foreign corporation engaged in trade or business within the United States or having an office or place of business therein. (f) CREDITS AGAINST NET INCOME. -A citizen of the United States entitled to the benefits of this section shall be allowed a personal exemption of only $1,000 and shall not be allowed the credit for dependents provided in section 25 (b) (2). 532 [52 STAT.

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