Page:United States Statutes at Large Volume 68A.djvu/331

 CH. 1 SEC. 922.

NORMAL TAXES AND SURTAXES

291

SPECIAL DEDUCTION.

In the case of a Western Hemisphere trade corporation there shall be allowed as a deduction in computing taxable income an amount computed as follows— (1) First determine the taxable income of such corporation computed without regard to this section. (2) Then multiply the amount determined under paragraph (1) £ by the fraction— (A) the numerator of which is 14 percent, and I) (B) the denominator of which is that percentage which equals s the sum of the normal tax rate and the surtax rate for the tax•o_ able year prescribed by section 11. Subpart D—Possessions of the United States If'

Sec. 931. Income from sources within possessions of the United States. Sec. 932. Citizens of possessions of the United States. Sec. 933. Income from sources within Puerto Rico.

SEC. 931. INCOME FROM SOURCES WITHIN POSSESSIONS OF THE UNITED STATES.

(a) GENEEAL RULE. — I n the case of citizens of the United States or domestic corporations, gross income means only gross income from sources within the United States if the conditions of both paragraph (1) and paragraph (2) are satisfied: (1) THREE-YEAR PERIOD.—If 80 percent or more of the gross income of such citizen or domestic corporation (computed without the benefit of this section) for the 3-year period immediately pre£ ceding the close of the taxable year (or for such part of such period {i immediately preceding the close of such taxable year as may be applicable) was derived from sources within a possession of the 5, United States; and ,.

(2) TRADE OR BUSINESS.—If—

T I

(A) in the case of such corporation, 50 percent or more of its gross income (computed without the benefit of this section) 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 (B) in the case of such citizen, 50 percent or more of his gross income (computed without the benefit of this section) 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.

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(b) AMOUNTS

RECEIVED

IN UNITED

STATES.—Notwithstanding

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) DEFINITION.—For purposes of this section, the term "possession of the United States" does not include the Virgin Islands of the United States, and such term when used with respect to citizens of the United States does not include Puerto Rico. (d)

DEDUCTIONS.—

(1) Citizens of the United States entitled to the benefits of this section shall have the same deductions as are allowed by section 873 § 931(d)(1)

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