Page:United States Statutes at Large Volume 53 Part 1.djvu/82

 CODIFICATION OF INTERNAL REVENUE LAWS 70 (b) As a part of his long-term capital gains or losses, his distribu- tive share of the net long-term capital gain or loss of the partnership. (c) His distributive share of the ordinary net income or the ordi- nary net loss of the partnership, computed as provided in section 183 (b). SEC. 183. COMPUTATION OF PARTNERSHIP INCOME. (a) GENERAL RuLE. - The net income of the partnership shall be computed in the same manner and on the same basis as in the case of an individual, except as provided in subsections (b) and (c). (b) SEGREGATION OF ITEMS.- (1) CAPITAL GAINS AND LossEs.- There shall be segregated the short-term capital gains and losses and the long-term capital gains and losses, and the net short-term capital gain or loss and the net long-term capital gain or loss shall be computed. (2) ORDINARY NET INCOME OR Loss.-After excluding all items of either short-term or long-term capital gain or loss, there shall be computed- (A) An ordinary net income which shall consist of the excess of the gross income over the deductions; or (B) An ordinary net loss which shall consist of the excess of the deductions over the gross income. (c) CHARITABLE CONTRIBUTIONS. -In computing the net income of the partnership the so-called "charitable contribution" deduction allowed by section 23 (o) shall not be allowed; but each partner shall be considered as having made payment, within his taxable year, of his distributive portion of any contribution or gift, pay- ment of which was made by the partnership within its taxable year, of the character which would be allowed to the partnership as a deduction under such section if this subsection had not been enacted. SEC. 184. CREDITS AGAINST NET INCOME. The partner shall, for the purpose of the normal tax, be allowed as a credit against his net income, in addition to the credits allowed to him under section 25, his proportionate share of such amounts (not in excess of the net income of the partnership) of interest specified in section 25 (a) as are received by the partnership. SEC. 185. EARNED INCOME. In the case of the members of a partnership the proper part of each share of the net income which consists of earned income shall be determined under rules and regulations to be prescribed by the Commissioner with the approval of the Secretary and shall be sepa- rately shown in the return of the partnership. SEC. 186. TAXES OF FOREIGN COUNTRIES AND POSSESSIONS OF UNITED STATES. The amount of income, war-profits, and excess-profits taxes imposed by foreign countries or possessions of the United States shall be allowed as a credit against the tax of the member of a partnership to the extent provided in section 131. SEC. 187. PARTNERSHIP RETURNS. Every partnership shall make a return for each taxable year, stat- ing specifically the items of its gross income and the deductions allowed by this chapter and such other information for the purpose of carrying out the provisions of this chapter as the Commissioner with the approval of the Secretary may by regulations prescribe, and shall include in the return the names and addresses of the individuals who would be entitled to share in the net income if distributed and the amount of the distributive share of each individual. The return shall be sworn to by any one of the partners.

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