Page:United States Statutes at Large Volume 68A.djvu/333

 CH. 1—NORMAL TAXES AND SURTAXES

293

(c)

GUAM.— For applicability of United States income tax laws in Guam, see section 31 of the Act of August 1, 1950 (48 U.S.C. 1421i); for disposition of the proceeds of such taxes, see section 30 of such Act (48 U.S.C. 1421h). SEC. 933. INCOME FROM SOURCES WITHIN PUERTO RICO.

The following items shall not be included in gross income and shall be exempt from taxation under this subtitle: (1) RESIDENT OF PUERTO RICO FOR ENTIRE TAXABLE YEAR.—In

the case of an individual who is a bona fide resident of Puerto Rico during the entire taxable year, income derived from sources within Puerto Rico (except amounts received for services performed as an employee of the United States or any agency thereof); but such individual shall not be allowed as a deduction from his gross income any deductions (other than the deduction under section 151, relating to personal exemptions) properly allocable to or chargeable against amounts excluded from gross income under this paragraph. (2) TAXABLE YEAR OF CHANGE OF RESIDENCE FROM PUERTO

RICO.—In the case of an individual citizen of the United States who has been a bona fide resident of Puerto Rico for a period of at least 2 years before the date on which he changes his residence from Puerto Rico, income derived from sources therein (except amounts received for services performed as an employee of the United States or any agency thereof) which is attributable to that part of such period of Puerto Rican residence before such date; but such individual shall not be allowed as a deduction from his gross income any deductions (other than the deduction for personal exemptions under section 151) properly allocable to or chargeable against amounts excluded from gross income under this paragraph.

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Subpart E—China Trade Act Corporations Sec. 941. Special deduction for China Trade Act corporations. Sec. 942. Disallowance of foreign tax credit. Sec. 943. Exclusion of dividends to residents of Formosa or Hong Kong.

SEC. 941. SPECIAL DEDUCTION FOR CHINA TRADE ACT CORPORATIONS. (a) ALLOWANCE OF DEDUCTION,—For purposes only of the taxes

imposed by section 11, there shall be allowed, in the case of a corporation organized under the China Trade Act, 1922 (15 U.S.C. ch. 4, sec. 141 and following), in addition to the deductions from taxable income otherwise allowed such corporation, a special deduction, in computing the taxable income, of an amount equal to the proportion of the taxable income derived from sources within Formosa and Hong Kong (determined without regard to this section and determined in a similar manner to that provided in part I) which the par value of the shares of stock of the corporation owned on the last day of the taxable year by— (1) persons resident in Formosa, Hong Kong, the United States, or possessions of the United States, and (2) individual citizens of the United States wherever resident, bears to the par value of the whole number of shares of stock of the corporation outstanding on such date. I n no case shall the diminu§ 941(a)(2)

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