Page:United States Statutes at Large Volume 76.djvu/1052

 1004

PUBLIC LAW 87-834~OCT. 16, 1962

[76 STAT.

received from sources without the United States (except amounts paid by the United States or any agency thereof) which constitute earned income attributable to services performed during such uninteri-upted period. The amount excluded under this paragraph for nny taxable year shall be computed by applying the special rules contained in subsection (c). "(2)

26 USC 151.

PRESENCE I N FOREIGN COUNTRY FOR IT MONTHS.—In the

case of an individual citizen of the United States who during any period of 18 consecutive months is present in a foreign country or countries during at least 510 full days in such period, amounts received from sources without the United States (except amounts paid by the United States or any agency thereof) which constitute earned income attributable to services performed during such 18-month period. The amount excluded under this paragraph for any taxable year shall be computed by applying the special rules contained in subsection (c). An individual shall not be allowed, as a deduction from his gross income, any deductions (other than those allowed by section 151, relating to personal exemptions) properly allocable to or chargeable against amounts excluded from gross income under this subsection. "(b) DEFINITION OF EARNED INCOME.—For purposes of this section, the term 'earned income' means wages, salaries, or professional fee^s, and other amounts received as compensation for personal services actually rendered, but does not include that part of the compensation derived by the taxpayer for personal services rendered by him to a corporation which represents a distribution of earnings or profits rather than a reasonable allowance as compensation for the personal services actually rendered. I n the case ot a taxpayer engaged in a trade or business in which both personal services and capital are material income-producing factors, under regulations pi-^cribed by the Secretary or his delegate, a reasonable allowance as compensation for the personal services rendered by the taxpayer, not in excess of JiO percent of his share of the net profits of such trade or business, shall be considered as earned income. "(c) Si:SECiAL RULES.—For purposes of computing the amount excludable under subsection (a), the following rules shall apply: "(1)

LIMITATIONS ON AMOUNT OF EXCLUSION.—The amount

excluded from the gross income of an individual under subsection (a) for any taxable year shall not exceed an amount which shall be computed on a daily basis at an annual rate of— " (A) except as provided in subparagraph (B), $20,000 in the case of an individual who qualifies Under subsection ('^)'^^", . ... " (B) $85,000 in the case of an individual who qualifies under subsection (a)(1), but only with respect to that portion of such taxable year occurring after such individual has been a bona fide resident of a foreign country or countries for an uninterrupted period of 3 consecutive years. "(2)

A T T R I B U T I O N TO Y E A R IN WHICH SERVICES ARE PERFORMED. —

For purposes of applying paragraph (1), amounts received shall be considered received in the taxable year in which the services to which the amounts are attributable are performed. "(3) TREATMENT OF COMMUNITY INCOME.—In applying paragraph (1) with respect to amounts received for services performed by a husband or wife which are community income under community property laws applicable to such income, the aggregate amount excludable under subsection (a) from the gross income of such husband and wife shall equal the amount which would be excludable if such amounts did not constitute such community income.

�