covered by the contract or option ered by the contract or option to to acquire) is not less than the acquire) is not less than the amount amount of stock or securities sold of stock or securities sold or otheror otherwise disposed of, then the wise disposed of, then the particular particular shares of stock or secu- shares of stock or securities the acrities the acquisition of which (or quisition of which (or the contract the contract or option to acquire or option to acquire which) resulted which) resulted in the nondeducti- in the nondeductibility of the loss bility of the loss shall be deter- shall be determined under rules and mined under rules and regulations regulations prescribed by the Comprescribed by the Commissioner missioner with the approval of the with the approval of the Secretary. Secretary. Sec. 119. Income from sources within United States. Sec. 119. (a) Gross income from sources in United States.-The following items of gross income shall be treated as income from sources within the United States: Sec. 119. Income from sources within United States. Sec. 119. (a) Gross income from sources in United States.-The following items of gross income shall be treated as income from sources within the United States: Sec. 119. (a) (1) Interest.-In- Sec. 119. (a) (1) Interest.-Interest from the United States, any terest from the United States, any Territory, any political subdivision Territory, any political subdivision of a Territory, or the District of of a Territory, or the District of Columbia, and interest on bonds, Columbia, and interest on bonds, notes, or other interest-bearing obligations of residents, corporate or otherwise, not including (A) interest on deposits with persons carrying on the banking business paid to persons not engaged in business within the United States and not having an office or place of business therein, or notes, or other interest-bearing ob- (A) interest on deposits with (B) interest received from a resi- (B) interest received from a resident alien individual, a resident dent alien individual, a resident forforeign corporation, or a domestic eign corporation, or a domestic corcorporation, when it is shown to poration, when it is shown to the the satisfaction of the Commis- satisfaction of the Commissioner sioner that less than 20 per centum that less than 20 per centum of the of the gross income of such resident gross income of such resident payor payor or domestic corporation has or domestic corporation has been been derived from sources within derived from sources within the the United States, as determined United States, as determined under under the provisions of this sec- the provisions of this section, for tion, for the three-year period end- the three-year period ending with ing with the close of the taxable the close of the taxable year of such year of such payor preceding the payment of such interest, or for such part of such period as may be applicable, or (C) income derived by a foreign central bank of issue from bankers' acceptances; payor preceding the payment of or (C) income derived by a foreign central bank of issue from bankers' acceptances; Taxable Years Beginning before 1939 Sec. 119. Income from sources within United States. Sec. 119. (a) Gross income from sources in United States. See p. 216, Eighth Edition. Sec. 119. (a) (1) Interest. Taxable Years Taxable Years Taxable Years Sec. 119. (a) (2) Dividends.- Sec. 119. (a) (2) Dividends.— Sec. 119. (a) (2) Dividends.— The amount received as dividends- The amount received as dividends- The amount received as dividends(A) from a domestic corporation (A) from a domestic corporation (A) from a domestic corporation other than a corporation entitled to other than a corporation entitled to other than a corporation entitled to the benefits of section 251, and the benefits of section 251, and the benefits of section 251, and other than a corporation less than other than a corporation less than other than a corporation less than 20 per centum of whose gross in- 20 per centum of whose gross in- 20 per centum of whose gross income is shown to the satisfaction come is shown to the satisfaction come is shown to the satisfaction of the Commissioner to have been of the Commissioner to have been of the Commissioner to have been derived from sources within the derived from sources within the derived from sources within the United States, as determined under United States, as determined under United States, as determined under the provisions of this section, for the provisions of this section, for the provisions of this section, for the three-year period ending with the three-year period ending with the three-year period ending with the close of the taxable year of the close of the taxable year of the close of the taxable year of such corporation preceding the dec- such corporation preceding the dec such corporation preceding the declaration of such dividends (or for laration of such dividends (or for laration of such dividends (or for such part of such period as the such part of such period as the such part of such period as the corporation has been in existence), corporation has been in existence), corporation has been in existence), or sources or within or within the (B) from a foreign corporation (B) from a foreign corporation (B) from a foreign corporation unless less than 50 per centum of unless less than 50 per centum of unless less than 50 per centum of the gross income of such foreign the gross income of such foreign the gross income of such foreign corporation for the three-year pe- corporation for the three-year pe- corporation for the three-year period ending with the close of its riod ending with the close of its riod ending with the close of its taxable year preceding the declara- taxable year preceding the declara- taxable year preceding the declaration of such dividends (or for such tion of such dividends (or for such tion of such dividends (or for such part of such period as the corpora- part of such period as the corpora- part of such period as the corporation has been in existence) was de- tion has been in existence) was de- tion has been in existence) was derived from within from sources the rived sources the rived from United States as determined under United States as determined under United States as determined under the provisions of this section; but the provisions of this section; but the provisions of this section; but only in an amount which bears the only in an amount which bears the only in an amount which bears the same ratio to such dividends as the same ratio to such dividends as the same ratio to such dividends as the gross income of the corporation gross income of the corporation gross income of the corporation from such period derived such period derived from for such period derived sources within the United States sources within the United States sources within the United States bears to its gross income from all bears to its gross income from all bears to its gross income from all sources; but dividends from a for- sources; but dividends from a for- sources; but dividends from a foreign corporation shall, for the pur- eign corporation shall, for the pur- eign corporation shall, for the purposes of section 131 (relating to poses of section 131 (relating to poses of section 131 (relating to foreign tax credit), be treated as foreign tax credit), be treated as foreign tax credit), be treated as income from sources without the income from sources without the income from sources without the United States; United States; United States; for for from Sec. 119. (a) (3) Personal serv ices. Compensation for labor or ices.-Compensation for labor or ices.-Compensation for labor or personal services performed in the personal services performed in the personal services performed in the United States, but in the case of a United States, but in the case of a United States, but in the case of a nonresident alien individual tem- nonresident alien individual tem- nonresident alien individual temporarily present in the United porarily present in the United porarily present in the United States for a period or periods not States for a period or periods not States for a period or periods not exceeding a total of ninety days exceeding a total of ninety days exceeding a total of ninety days during the taxable year, compensa- during the taxable year, compensa- during the taxable year, compensation received by such an individual tion received by such an individual tion received by such an individual (if such compensation does not ex- (if such compensation does not ex- (if such compensation does not exceed $3,000 in the aggregate) for ceed $3,000 in the aggregate) for ceed $3,000 in the aggregate) for labor or services performed as an labor or services performed as an labor or services performed as an employee of or under a contract employee of or under a contract employee of or under a contract with a nonresident alien, foreign with a nonresident alien, foreign with a nonresident alien, foreign partnership, or foreign corpora- partnership, or foreign corpora- partnership, or foreign corporation, not engaged in trade or busi- tion, not engaged in trade or busi- tion, not engaged in trade or business within the United States, shall ness within the United States, shall ness within the United States, shall not be deemed to be income from not be deemed to be income from not be deemed to be income from sources within the United States; sources within the United States; sources within the United States; Sec. 119. (a) (2) Dividends.- Sec. 119. (a) (2) Dividends.The amount received as dividends(A) from a domestic corporation (A) from a domestic corporation other than a corporation entitled to other than a corporation entitled to the benefits of section 251, and the benefits of section 251, and other other than a corporation less than than a corporation less than 20 per 20 per centum of whose gross in- centum of whose gross income is come is shown to the satisfaction shown to the satisfaction of the of the Commissioner to have been Commissioner to have been derived derived from sources within the from sources within the United United States, as determined under States, as determined under the prothe provisions of this section, for visions of this section, for the threethe three-year period ending with year period ending with the close the close of the taxable year of of the taxable year of such corpora, such corporation preceding the dec- tion preceding the declaration of laration of such dividends (or for such dividends (or for such part of such part of such period as the such period as the corporation has corporation has been in existence), been in existence), or or (B) from a foreign corporation (B) from a foreign corporation unless less than 50 per centum of unless less than 50 per centum of the gross income of such foreign the gross income of such foreign corporation for the three-year pe- corporation for the three-year period riod ending with the close of its ending with the close of its taxable taxable year preceding the declara- year preceding the declaration of tion of such dividends (or for such such dividends (or for such part of part of such period as the corpora- such period as the corporation has tion has been in existence) was de- been in existence) was derived from rived from sources within the sources within the United States as United States as determined under determined under the provisions of the provisions of this section; but this section; but only in an amount only in an amount which bears the which bears the same ratio to such same ratio to such dividends as the dividends as the gross income of the gross income of the corporation corporation for such period derived for such period derived from from sources within the United sources within the United States bears to its gross income from all sources; but dividends from a foreign corporation shall, for the purposes of section 131 (relating to foreign tax credit), be treated as income from sources without the United States; States bears to its gross income from Taxable Years Beginning before 1939 Sec. 119. (a) (2) Dividends. See p. 218, Eighth Edition. Sec. 119. (a) (3) Personal serv Sec. 119. (a) (3) Personal serv- Sec. 119. (a) (3) Personal services.-Compensation for labor or ices.-Compensation for labor or ices. personal services performed in the personal services performed in the United States, but in the case of a United States, but in the case of a nonresident alien individual tem- nonresident alien individual temporarily present in the United porarily present in the United States States for a period or periods not for a period or periods not exceedexceeding a total of ninety days ing a total of ninety days during during the taxable year, compensa- the taxable year, compensation retion received by such an individual ceived by such an individual (if (if such compensation does not ex- such compensation does not exceed ceed $3,000 in the aggregate) for $3,000 in the aggregate) for labor labor or services performed as an or services performed as an ememployee of or under a contract ployee of or under a contract with with a nonresident alien, foreign a nonresident alien, foreign partnerpartnership, or foreign corpora- ship, or foreign corporation, not ention, not engaged in trade or busi- gaged in trade or business within ness within the United States, shall the United States, shall not be not be deemed to be income from deemed to be income from sources sources within the United States; within the United States; See p. 220, Eighth Edition. Taxable Years Taxable Years Taxable Years Sec. 119. (a) (4) Rentals and Sec. 119. (a) (4) Rentals and Sec. 119. (a) (4) Rentals and royalties.-Rentals or royalties royalties.-Rentals or royalties royalties.-Rentals or royalties from property located in the from property located in the from property located in the United States or from any interest United States or from any interest United States or from any interest in such property, including rentals in such property, including rentals in such property, including rentals or royalties for the use of or for or royalties for the use of or for or royalties for the use of or for the privilege of using in the United the privilege of using in the United the privilege of using in the United States, patents, copyrights, secret States, patents, copyrights, secret States, patents, copyrights, secret processes and formulas, good will, processes and formulas, good will, processes and formulas, good will, trade-marks, trade brands, fran- trade-marks, trade brands, fran- trade-marks, trade brands, franchises, and other like property; and chises, and other like property; and chises, and other like property; and Sec. 119. (a) (5) Sale of real property. Gains, profits, and income from the sale of real property located in the United States. Sec. 119. (a) (6) Sale of personal property.— For gains, profits, and income from the sale of personal property, see, subsection (e). Sec. 119. (a) (5) Sale of real Sec. 119. (a) (5) Sale of real property.-Gains, profits, and in- property.-Gains, profits, and income from the sale of real property come from the sale of real property located in the United States. Sec. 119. (a) (6) Sale of personal property. For gains, profits, and income from the sale of personal property, see, subsection (e). Sec. 119. (b) Net income from located in the United States. Sec. 119. (a) (6) Sale of personal property.— For gains, profits, and income from the sale of personal property, see subsection (e). Sec. 119. (b) Net income from Sec. 119. (b) Net income from sources in United States. From sources in United States. From sources in United States.-From the items of gross income specified the items of gross income specified the items of gross income specified in subsection (a) of this section in subsection (a) of this section in subsection (a) of this section there shall be deducted the ex- there shall be deducted the ex- there shall be deducted the expenses, losses, and other deductions penses, losses, and other deductions penses, losses, and other deductions properly apportioned or allocated properly apportioned or allocated properly apportioned or allocated thereto and a ratable part of any thereto and a ratable part of any thereto and a ratable part of any expenses, losses, or other deduc- expenses, losses, or other deduc- expenses, losses, or other deduetions which can not definitely be tions which can not definitely be tions which can not definitely be allocated to some item or class of allocated to some item or class of allocated to some item or class of gross income. The remainder, if gross income. The remainder, if gross income. The remainder, if any, shall be included in full as any, shall be included in full as any, shall be included in full as net income from sources within the net income from sources within the net income from sources within the United States. United States. United States. Sec. 119. (c) Gross income from Sec. 119. (c) Gross income from sources without United States. sources without United States.The following items of gross in- The following items of gross in come shall be treated as income come shall be treated as income from sources without the United from sources without the United States: States: Sec. 119. (c) Gross income from sources without United States.The following items of gross income shall be treated as income from sources without the United States: Sec. 119. (c) (1) Interest other than that derived from sources within the United States as provided in subsection (a) (1) of this section; Sec. 119. (c) (2) Dividends other than those derived from sources within the United States as provided in subsection (a) (2) of this section; Sec. 119. (c) (3) Compensation for labor or personal services performed without the United States; Sec. 119. (c) (4) Rentals or Sec. 119. (c) (4) Rentals or Sec. 119. (c) (4) Rentals or royalties from property located royalties from property located royalties from property located Taxable Years Taxable Years Taxable Years Beginning before 1939 Sec. 119. (a) (4) Rentals and See p. 220, Eighth Edition. Sec. 119. (a) (4) Rentals and Sec. 119. (a) (4) Rentals and royalties.-Rentals or royalties royalties.-Rentals or royalties from royalties. from property located in the property located in the United United States or from any interest States or from any interest in such in such property, including rentals property, including rentals or royalor royalties for the use of or for ties for the use of or for the privithe privilege of using in the United lege of using in the United States, States, patents, copyrights, secret patents, copyrights, secret processes processes and formulas, good will, and formulas, good will, tradetrade-marks, trade brands, fran- marks, trade brands, franchises, and chises, and other like property; and other like property; and Sec. 119. (a) (5) Sale of real Sec. 119. (a) (5) Sale of real property.-Gains, profits, and in- property.-Gains, profits, and income from the sale of real property located in the United States. come from the sale of real property located in the United States. Sec. 119. (a) (6) Sale of personal property.— For gains, profits, and income from the sale of personal property, see subsection (e). Sec. 119. (a) (6) Sale of personal property. For gains, profits, and income from the sale of personal property, see subsection (e). Sec. 119. (b) Net income from Sec. 119. (b) Net income from sources in United States. From sources in United States. From the items of gross income specified the items of gross income specified in subsection (a) of this section in subsection (a) of this section there shall be deducted the expen- there shall be deducted the expenses, ses, losses, and other deductions losses, and other deductions propproperly apportioned or allocated erly apportioned or allocated thereto thereto and a ratable part of any and a ratable part of any expenses, expenses, losses, or other deduc- losses, or other deductions which tions which can not definitely be can not definitely be allocated to allocated to some item or class of some item or class of gross income. gross income. The remainder, if The remainder, if any, shall be inany, shall be included in full as net income from sources within the United States. Sec. 119. (c) Gross income from sources without United States. The following items of gross income shall be treated as income from sources without the United States: Sec. 119. (c) (1) Interest other than that derived from sources within the United States as provided in subsection (a) (1) of this section; Sec. 119. (c) (2) Dividends other than those derived from sources within the United States as provided in subsection (a) (2) of this section; Sec. 119. (c) (3) Compensation for labor or personal services performed without the United States; cluded in full as net income from Sec. 119. (c) Gross income from sources without United States. The following items of gross income shall be treated as income. from sources without the United States: Sec. 119. (c) (1) Interest other than that derived from sources within the United States as provided in subsection (a) (1) of this section; Sec. 119. (c) (2) Dividends other than those derived from sources within the United States as provided in subsection (a) (2) of this section; Sec. 119. (c) (3) Compensation for labor or personal services performed without the United States; Sec. 119. (c) (4) Rentals or Sec. 119. (c) (4) Rentals or royalties from property located royalties from property located |