Taxable Years Taxable Years Taxable Years without the United States or from without the United States or from without the United States or from any interest in such property, in- any interest in such property, in- any interest in such property, including rentals or royalties for the cluding rentals or royalties for the cluding rentals or royalties for the use of or for the privilege of using use of or for the privilege of using use of or for the privilege of using without the United States, patents, without the United States, patents, without the United States, patents, copyrights, secret processes and copyrights, secret processes and copyrights, secret processes and formulas, good will, trade-marks, formulas, good will, trade-marks, formulas, good will, trade-marks, trade-brands, franchises, and other trade-brands, franchises, and other trade-brands, franchises, and other like properties; and like properties; and Sec. 119. (c) (5) Gains, profits, and income from the sale of real property located without the United States. like properties; and Sec. 119. (c) (5) Gains, profits, and income from the sale of real property located without the United States. Sec. 119. (c) (5) Gains, profits. and income from the sale of real property located without the United States. Sec. 119. (d) Net income from Sec. 119. (d) Net income from Sec. 119. (d) Net income from sources without United States. sources without United States. sources without United States.From the items of gross income From the items of gross income From the items of gross income specified in subsection (c) of this specified in subsection (c) of this specified in subsection (c) of this section there shall be deducted the section there shall be deducted the section there shall be deducted the expenses, losses, and other deduc- expenses, losses, and other deduc- expenses, losses, and other deductions properly apportioned or al- tions properly apportioned or al- tions properly apportioned or allocated thereto, and a ratable part located thereto, and a ratable part located thereto, and a ratable part of any expenses, losses, or other of any expenses, losses, or other of any expenses, losses, or other deductions which can not definitely deductions which can not definitely deductions which can not definitely be allocated to some item or class be allocated to some item or class be allocated to some item or class of gross income. The remainder, of gross income. The remainder, of gross income. The remainder, if any, shall be treated in full as if any, shall be treated in full as if any, shall be treated in full as net income from sources without net income from sources without net income from sources without the United States. the United States. the United States. Sec. 119. (e) Income from Sec. 119. (e) Income from Sec. 119. (e) Income from sources partly within and partly sources partly within and partly sources partly within and partly without United States.-Items of without United States.-Items of without United States.-Items of gross income, expenses, losses and gross income, expenses, losses and gross income, expenses, losses and deductions, other than those speci deductions, other than those speci- deductions, other than those specified in subsections (a) and (c) of fied in subsections (a) and (c) of fied in subsections (a) and (c) of this section, shall be allocated or this section, shall be allocated or this section, shall be allocated or apportioned to sources within or apportioned to sources within or apportioned to sources within or without the United States, under without the United States, under without the United States, under rules and regulations prescribed rules and regulations prescribed rules and regulations prescribed by the Commissioner with the ap- by the Commissioner with the ap- by the Commissioner with the approval of the Secretary. Where proval of the Secretary. Where proval of the Secretary. Where items of gross income are sepa- items of gross income are sepa- items of gross income are separately allocated to sources within rately allocated to sources within rately allocated to sources within the United States, there shall be the United States, there shall be the United States, there shall be deducted (for the purpose of com- deducted (for the purpose of com- deducted (for the purpose of computing the net income therefrom) puting the net income therefrom) puting the net income therefrom) the expenses, losses, and other de- the expenses, losses, and other de- the expenses, losses, and other deductions properly apportioned or ductions properly apportioned or ductions properly apportioned or allocated thereto and ratable allocated thereto and a ratable allocated thereto and a part of other expenses, losses or part of other expenses, losses or part of other expenses, losses or other deductions which can not other deductions which can not other deductions which can not definitely be allocated to some item definitely be allocated to some item definitely be allocated to some item or class of gross income. The re- or class of gross income. The re- or class of gross income. The remainder, if any, shall be included mainder, if any, shall be included mainder, if any, shall be included in full as net income from sources in full as net income from sources in full as, net income from sources within the United States. In the within the United States. In the within the United States. In the case of gross income derived from case of gross income derived from case of gross income derived from sources partly within and partly sources partly within and partly sources partly within and partly without the United States, the net without the United States, the net without the United States, the net income may first be computed by income may first be computed by income may first be computed by deducting the expenses, losses, or deducting the expenses, losses, or deducting the expenses, losses, or other deductions apportioned or al- other deductions apportioned or al- other deductions apportioned or allocated thereto and a ratable part located thereto and a ratable part located thereto and a ratable part a ratable without the United States or from without the United States or from Sec. 119. (d) Net income from Taxable Years Sec. 119. (d) Net income from Sec. 119. (d) Net income from From the items of gross income From the items of gross income See p. 222, Eighth Edition. See p. 224, Eighth Edition. Sec. 119. (e) Income from Sec. 119. (e) Income from Sec. 119. (e) Income from sources partly within and partly sources partly within and partly sources partly within and partly without United States.-Items of without United States.-Items of without United States. gross income, expenses, losses and gross income, expenses, losses and deductions, other than those speci- deductions, other than those specified in subsections (a) and (c) of fied in subsections (a) and (c) of this section, shall be allocated or this section, shall be allocated or apportioned to sources within or apportioned to sources within or without the United States, under without the United States, under rules and regulations prescribed rules and regulations prescribed by the Commissioner with the ap- by the Commissioner with the approval of the Secretary. Where proval of the Secretary. Where items of gross income are sepa- items of gross income are separately allocated to sources within rately allocated to sources within the United States, there shall be the United States, there shall be deducted (for the purpose of com- deducted (for the purpose of computing the net income therefrom) puting the net income therefrom) the expenses, losses, and other de- the expenses, losses, and other deductions properly apportioned or ductions properly apportioned or allocated thereto and a ratable allocated thereto and a ratable part of other expenses, losses or part of other expenses, losses or other deductions which can not other deductions which can not definitely be allocated to some item definitely be allocated to some item or class of gross income. The re- or class of gross income. The remainder, if any, shall be included mainder, if any, shall be included in full as net income from sources in full as net income from sources within the United States. In the within the United States. In the case of gross income derived from case of gross income derived from sources partly within and partly sources partly within and partly without the United States, the net without the United States, the net income may first be computed by deducting the expenses, losses, or other deductions apportioned or allocated thereto and a ratable part income may first be computed by Taxable Years Taxable Years Taxable Years of any expenses, losses, or other of any expenses, losses, or other of any expenses, losses, or other deductions which can not definitely deductions which can not definitely deductions which can not definitely be allocated to some items or class be allocated to some items or class be allocated to some items or class of gross income; and the portion of gross income; and the portion of gross income; and the portion of such net income attributable of such net income attributable of such net income attributable to sources within the United States to sources within the United States to sources within the United States may be determined by processes or may be determined by processes or may be determined by processes or formulas of general apportionment formulas of general apportionment formulas of general apportionment prescribed by the Commissioner prescribed by the Commissioner prescribed by the Commissioner with the approval of the Secretary. with the approval of the Secretary. with the approval of the Secretary. Gains, profits, and income from-Gains, profits, and income from- Gains, profits, and income fromSec. 119. (e) (1) transportation Sec. 119. (e) (1) transportation Sec. 119. (e) (1) transportation or other services rendered partly or other services rendered partly or other services rendered partly within and partly without the within and partly without the within and partly without the United States, or United States, or United States, or Sec. 119. (e) (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, Sec. 119. (e) (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, from Sec. 119. (e) (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, shall be treated as derived partly shall be treated as derived partly shall be treated as derived partly from sources within and partly from sources within and partly from sources within and partly from sources without the United from sources without the United from sources without the United States. Gains, profits and income States. Gains, profits and income States. Gains, profits and income derived from the purchase of per- derived from the purchase of per- derived from the purchase of personal property within and its sale sonal property within and its sale sonal property within and its sale without the United States or from without the United States or from without the United States or from the purchase of personal property the purchase of personal property the purchase of personal property without and its sale within the without and its sale within the without and its sale within the United States, shall be treated as United States, shall be treated as United States, shall be treated as derived entirely from derived entirely sources derived entirely from sources within the country in which sold, within the country in which sold, within the country in which sold, except that gains, profits, and in- except that gains, profits, and in- except that gains, profits, and income derived from the purchase of come derived from the purchase of come derived from the purchase of personal property within a pos- personal property within a pos- personal property within a possession of the United States and session of the United States and session of the United States and its sale within the United States its sale within the United States its sale within the United States shall be treated as derived partly shall be treated as derived partly shall be treated as derived partly from sources within and partly from sources within and partly from sources within and partly from sources without the United from sources without the United from sources without the United States. States. sources States. Sec. 119. (f) Definitions.-As Sec. 119. (f) Definitions.-As Sec. 119. (f) Definitions.—As used in this section the words used in this section the words used in this section the words "sale" or "sold" include "ex-"sale" or "sold" include "ex- "sale" or "sold" include "exchange" or "exchanged"; and the change" or "exchanged"; and the change" or "exchanged"; and the word "produced" includes "cre- word "produced" includes "cre- word "produced" includes "ereated", "fabricated", "manufac- ated", "fabricated", "manufac- ated", "fabricated", "manufactured", "extracted", "processed", tured", "extracted", "processed", tured", "extracted", "processed", "cured", or "aged". "cured", or "aged". "cured", or "aged". for charitable and other contributions. Sec. 120. Unlimited deduction Sec. 120. Unlimited deduction Sec. 120. Unlimited deduction for charitable and other contribu- for charitable and other contributions. tions. In the case of an individual if In the case of an individual if In the case of an individual if in the taxable year and in each of in the taxable year and in each of in the taxable year and in each of the ten preceding taxable years the ten preceding taxable years the ten preceding taxable years the amount of the contributions or the amount of the contributions or the amount of the contributions or gifts described in section 23 (0) gifts described in section 23 (o) gifts described in section 23 (0) (or corresponding provisions of (or corresponding provisions of (or corresponding provisions of of any expenses, losses, or other of any expenses, losses, or other Sec. 119. (e) (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, Sec. 119. (e) (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, shall be treated as derived partly shall be treated as derived partly Sec. 119. (f) Definitions.-As Sec. 119. (f) Definitions.-As used in this section the words used in this section the words "sale" or "sold" include "ex-"sale" or "sold" include "ex- Taxable Years Beginning before 1939 Sec. 119. (f) Definitions. See p. 226, Eighth Edition. Sec. 120. Unlimited deduction for charitable and other contributions. In the case of an individual if in the taxable year and in each of in the taxable year and in each of the ten preceding taxable years the ten preceding taxable years the amount of the contributions or the amount of the contributions or gifts described in section 23 (0) gifts described in section 23 (o) (or corresponding provisions of (or corresponding provisions of prior revenue Acts) plus the Sec. 120. Unlimited deduction for Sec. 120. Unlimited deduction charitable and other contributions. for charitable and other contribuIn the case of an individual if tions. See p. 226, Eighth Edition. Taxable Years Taxable Years Taxable Years prior revenue Acts) plus the prior revenue Acts) plus the prior revenue Acts) plus the amount of income, war-profits, or amount of income, war-profits, or amount of income, war-profits, or excess-profits taxes paid during excess-profits taxes paid during excess-profits taxes paid during such year in respect of preceding such year in respect of preceding such year in respect of preceding taxable years, exceeds 90 per taxable years, exceeds 90 per taxable years, exceeds 90 per centum of the taxpayer's net in- centum of the taxpayer's net in- centum of the taxpayer's net income for each such year, as com- come for each such year, as com- come for each such year, as computed without the benefit of the puted without the benefit of the applicable subsection, then the 15 applicable subsection, then the 15 per centum limit imposed by sec- per centum limit imposed by section 23 (0) shall not be applicable. tion 23 (0) shall not be applicable. Sec. 121. Deduction of dividends paid on certain preferred stock of certain corporations. Sec. 121. Deduction of dividends paid on certain preferred stock of certain corporations. puted without the benefit of the applicable subsection, then the 15 per centum limit imposed by seetion 23 (o) shall not be applicable. Sec. 121. Deduction of dividends paid on certain preferred stock of certain corporations. In computing the net income of In computing the net income of In computing the net income of any national banking association, any national banking association, any national banking association, or of any bank or trust company or of any bank or trust company or of any bank or trust company organized under the laws of any organized under the laws of any organized under the laws of any State, Territory, possession of the State, Territory, possession of the State, Territory, possession of the United States, or the Canal Zone, United States, or the Canal Zone, United States, or the Canal Zone, or of any other banking corpora- or of any other banking corpora- or of any other banking corporation engaged in the business of in- tion engaged in the business of in- tion engaged in the business of industrial banking and under the dustrial banking and under the dustrial banking and under the supervision of a State banking de- supervision of a State banking de- supervision of a State banking department or of the Comptroller of partment or of the Comptroller of partment or of the Comptroller of the Currency, or of any incorpo- the Currency, or of any incorpo- the Currency, or of any incorporated domestic insurance company, rated domestic insurance company, rated domestic insurance company, there shall be allowed as a deduc- there shall be allowed as a deduc- there shall be allowed as a deduction from gross income, in addition tion from gross income, in addition tion from gross income, in addition to deductions otherwise provided to deductions otherwise provided to deductions otherwise provided for in this chapter, any dividend for in this chapter, any dividend for in this chapter, any dividend (not including any distribution in (not including any distribution in (not including any distribution in liquidation) paid, within the tax- liquidation) paid, within the tax- liquidation) paid, within the taxable year, to the United States or able year, to the United States or to any instrumentality thereof ex- to any instrumentality thereof exempt from Federal income taxes, empt from Federal income taxes, on the preferred stock of the cor- on the preferred stock of the corporation owned by the United poration owned by the United States such instrumentality. or such instrumentality. The amount allowable as a deduc- The amount allowable as a deduction under this section shall be de- tion under this section shall be deducted from the basic surtax credit ducted from the basic surtax credit otherwise computed under section otherwise computed under section 27 (b). 27 (b). States or Sec. 122. Net operating loss deduction. Sec. 122. Net operating loss deduction. able year, to the United States or to any instrumentality thereof exempt from Federal income taxes, on the preferred stock of the corporation owned by the United States or such instrumentality. The amount allowable as a deduction under this section shall be deducted from the basic surtax credit otherwise computed under section 27 (b). Sec. 122. Net operating loss deduction. Sec. 122. (a) Definition of net Sec. 122. (a) Definition of net Sec. 122. (a) Definition of net operating loss.-As used in this operating loss.-As used in this operating loss.-As used in this section, the term "net operating section, the term "net operating section, the term "net operating loss" means the excess of the de- loss" means the excess of the de-loss" means the excess of the deductions allowed by this chapter ductions allowed by this chapter over the gross income, with the exceptions, additions, and limitations provided in subsection (d). Sec. 122 (a), I. R. C., supra, amended by Sec. 105 (e) (3) (A), R. A. of 1942, to read as above. Sec. 101 of said Act makes amendment applicable to taxable years beginning after Dec. 31, 1941. For Sec. 122 (a), I. R. C., before amendment, see 1942 column. over the gross income, with the ex- Sec. 122 (a), I. R. C., supra, years beginning after Dec. 31, 1941. ductions allowed by this chapter over the gross income, with the exceptions and limitations provided in subsection (d). |