Act of 1924.

Act of 1921.

Act of 1918.

on the fact that he has sustained a substantial loss (whether or not actually realized by sale or other disposition) resulting from any material reduction (not due to temporary fluctuation) of the value of the inventory for such taxable year, or from the actual payment after the close of such taxable year of rebates in pursuance of contracts entered into during such year upon sales made during such year. In such case payment of the amount of the tax covered by such claim shall not be required until the claim is decided, but the taxpayer shall accompany his claim. with a bond in double the amount of the tax covered by the claim, with sureties satisfactory to the Commissioner, conditioned for the payment of any part of such tax found to be due, with interest. If any part of such claim is disallowed then the remainder of the tax due shall on notice and demand by the collector be paid by the taxpayer with interest at the rate of 1 per centum per month from the time the tax would have been due had no such claim been filed. If it is shown to the satisfaction of the Commissioner that such substantial loss has been sustained, then in computing the tax imposed by this title the amount of such loss shall be deducted from the net income. (b) If no such claim is filed, but it is shown to the satisfaction of the Commissioner that during the taxable year 1919 the taxpayer has sustained a substantial loss of the character above described then the amount of such loss shall be deducted from the net income for the taxable year 1918 and the tax imposed by this title for such year shall be redetermined according ly. Any amount found to be due to the taxpayer upon the basis of such redetermination shall be credited or refunded to the taxpayer in accordance with the provisions of section 252.

Act of 1924.

SEC. 214. (b) In the case of a nonresident alien individual, the deductions allowed in subdivision (a), except those allowed in paragraphs (5), (6), and (10), shall be allowed only if and to the extent that they are connected with income from sources within the United States; and the proper apportionment and allocation of the deductions with respect to sources of income within and without the United States shall be determined as provided in section 217141 under rules and regulations prescribed by the Commissioner with the approval of the Secretary. In the case of a citizen entitled to the benefits of section 262142 the deductions shall be the same and shall be determined in the same manner as in the case of a nonresident alien individual.

SEC. 214. (b) In the case of SEC. 214. (b) In the case a nonresident alien-individual of a nonresident alien individthe deductions allowed in sub-ual the deductions allowed in division (a), except those al- paragraphs (1), (4), (7), (8), lowed in paragraphs (5), (6), (9), (10), and (12), and clause and (11), shall be allowed only (e) of paragraph (3), of subif and to the extent that they division (a) shall be allowed are connected with income from only if and to the extent that sources within the United they are connected with income States; and the proper appor- arising from a source within the tionment and allocation of the United States; and the proper deductions with respect to apportionment and allocation of sources of income within and the deductions with respect to without the United States shall sources of income within and be determined as provided in without the United States shall section 217141 under rules and be determined under rules and regulations prescribed by the regulations prescribed by the Commissioner with the approval Commissioner with the approval of the Secretary. In the case of of the Secretary. a citizen entitled to the benefits of section 262142 the deductions shall be the same and shall be determined in the same manner as in the case of a nonresident alien individual.

141 Sec. 217, p. 120.

142 Sec. 262, p. 268.

Act of 1917.

NONRESIDENT ALIENS.

SEC. 6. That in computing net income in the case of a nonresident alien

(a) For the purpose of the tax there shall be allowed as deduc

tions

First. The necessary expenses actually paid in carrying on any business or trade conducted by him within the United States, not including personal, living, or family expenses;

SEC. 1202. [1]143 That (1) paragraphs second and third of subdivision (a) of section 6 of such Act of September eighth, nineteen hundred and sixteen, are hereby amended to read as follows:

SEC. 6. (a) "Second. The proportion of all interest paid within the year by such person on his indebtedness (except on indebtedness incurred for the purchase of obligations or securities the interest upon which is ex empt from taxation as income under this title) which the gross amount of his income for the year derived from sources within the United States bears to the gross amount of his income for the year derived from all sources within and without the United States, but this deduction shall be allowed only if such person includes in the return required by section eight all the information necessary for its calculation;

Act of 1916.

NONRESIDENT ALIENS.

SEC. 6. That in computing net income in the case of a nonresident alien

(a) For the purpose of the tax there shall be allowed as deductions

First. The necessary expenses actually paid in carrying on any business or trade conducted by him within the United States, not including personal, living, or family expenses;

SEC. 6. (a) Second. The proportion of all interest paid within the year by such person on his indebtedness which the gross amount of his income for the year derived from sources within the United States bears to the gross amount of his income for the year derived from all sources within and without the United States, but this deduction shall be allowed only if such person includes in the return required by section eight all the information necessary for its calculation;

SEC. 6. (a) Third. Taxes paid within the year imposed by the authority of the United States, or its Territories, or possessions, or under the authority of any State, county, school district, or municipality, or other taxing subdivision of any State, paid within the United States, not including those assessed against

"Third. Taxes paid within the year imposed by the authority of the United States (except income and excess profits taxes), or of its Territories, or possessions, or by the authority of any State, county, school district, or municipality, or other taxing subdivision of any State, paid within the United States, not including those assessed against local benefits; local benefits;"

Act of 1913.

B. [15] The net income from property owned and business carried on in the United States by persons residing elsewhere shall be computed upon the basis prescribed in this paragraph and that part of paragraph G of this section relating to the computation of the net income of corporations, jointstock and insurance companies, organized, created, or existing under the laws of foreign countries, in so far as applicable.

143 Title I, Part I, Act of 1916, as amended by Sec. 1202, Title XII, Act of 1917.