Page:United States Statutes at Large Volume 68A.djvu/317

 CH. 1—NORMAL TAXES AND SURTAXES

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(2) dividends other than those derived from sources within the United States as provided in section 861(a)(2); (3) compensation for labor or personal services performed without the United States; (4) rentals or royalties from property located without the 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 and formulas, good will, trade-marks, trade brands, franchises, and other like properties; (5) gains, profits, and income from the sale of real property located without the United States; and (6) gains, profits, and income derived from the purchase of personal property within the United States and its sale without the United States. (b) TAXABLE INCOME FROM SOURCES W I T H O U T UNITED STATES. —

From the items of gross income specified in subsection (a) 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 cannot definitely be allocated to some item or class of gross income. The remainder, if any, shall be treated in full as taxable income from sources without the United States. SEC. 863. ITEMS NOT SPECIFIED IN SECTION 861 OR 862. (a) ALLOCATION U N D E R REGULATIONS.—Items of gross income,

expenses, losses, and deductions, other than those specified in sections 861 (a) and 862 (a), shall be allocated or apportioned to sources within or without the United States, under regulations prescribed by the Secretary or his delegate. Where items of gross income are separately allocated to sources within the United States, there shall be deducted (for the purpose of computing the taxable income therefrom) the expenses, losses, and other deductions properly apportioned or allocated thereto and a ratable part of other expenses, losses, or other deductions which cannot definitely be allocated to some item or class of gross income. The remainder, if any, shall be included in full as taxable income from sources within the tJnited States. (b) INCOME PARTLY FROM W I T H I N AND PARTLY FROM W I T H O U T

THE UNITED STATES. — I n the case of gross income derived from sources partly within and partly without the United States, the taxable income may first be computed by deducting the expenses, losses, or other deductions apportioned or allocated thereto and a ratable part of any expenses, losses, or other deductions which cannot definitely be allocated to some item or class of gross income; and the portion of such taxable income attributable to sources within the United States may be determined by processes or formulas of general apportionment prescribed by the Secretary or his delegate. Gains, profits, and income— (1) from transportation or other services rendered partly within and partly without the United States, (2) from the sale of personal property produced (in whole or in part) by the taxpayer within and sold without the United States, or produced (in whole or in part) by the taxpayer without and sold within the United States, or ^8&3 (b)(2)

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