regulations prescribed by the regulations prescribed by the of the Secretary. Where items Act of 1918. Act of 1924. United States, shall be treated as derived entirely from sources within the country in which sold. Act of 1921. United States, shall be treated as SEC. 217. (f) As used in this SEC. 217. (f) As used in this section the words "sale" or section the words "sale" or "sold" include "exchange" or "sold" include "exchange" or "exchanged"; and the word "exchanged"; and the word "produced" includes "created," "produced" includes "created," "fabricated," "manufactured," "fabricated," "manufactured,' "extracted,' "processed," "extracted," "processed," "cured," or "aged." "cured," or "aged. Act of 1918. NONRESIDENT ALIENS-ALLOWANCE OF DEDUCTIONS AND CREDITS SEC. 217. (g) (1) Except as SEC. 217. (g) A nonresident SEC. 217. That a nonresident provided in paragraph (2) a alien individual or a citizen en- alien individual shall receive the nonresident alien individual or titled to the benefits of section benefit of the deductions and a citizen entitled to the benefits 262156 shall receive the benefit of credits allowed in this title only of section 262156 shall receive the the deductions and credits al- by filing or causing to be filed benefit of the deductions and lowed in this title only by filing with the collector a true and accredits allowed in this title only or causing to be filed with the curate return of his total income by filing or causing to be filed collector a true and accurate re-received from all sources corpowith the collector a true and ac- turn of his total income received rate or otherwise in the United curate return of his total income from all sources corporate or States, in the manner prescribed received from all sources in the otherwise in the United States, by this title, including therein United States, in the manner in the manner prescribed in this all the information which the prescribed in this title; includ- title; including therein all the commissioner may deem necesing therein all the information information which the Commis- sary for the calculation of such which the Commissioner may deductions and credits: Prodeem necessary for the calculavided, That the benefit of the tion of such deductions and credits allowed in subdivisions credits. (c) and (d) of section 216 may, in the discretion of the Commissioner, and except as otherwise provided in subdivision (e) of that section, be received by filing a claim therefor with the withholding agent. In case of failure to file a return, the collector shall collect the tax on such income, and all property belonging to such nonresident alien individual shall be liable to distraint for the tax. sioner may deem necessary for the calculation of such deductions and credits: Provided, That the benefit of the credit (2) The benefit of the credits allowed in subdivision (e) of allowed in subdivisions (d) and section 216 may, in the discre(e) of section 216, and of the tion of the Commissioner, be rereduced rate of tax provided for ceived by filing a claim therefor in subdivision (b) of section with the withholding agent. In 210,159 may, in the discretion of case of failure to file a return, the Commissioner and under the collector shall collect the tax regulations prescribed by him on such income, and all propwith the approval of the Secre- erty belonging to such nonresitary, be received by a nonresident alien individual or foreign dent alien individual entitled trader shall be liable to distraint thereto, by filing a claim there- for the tax. for with the withholding agent. PARTNERSHIPS. SEC. 218. (a) Individuals carrying on business in partnership shall be liable for income tax only in their individual capacity. 156 Sec. 262, p. 268. SEC. 218. (a) That individuals SEC. 218. (a) That individuals carrying on business in partner-carrying on business in partnership shall be liable for income ship shall be liable for income tax only in their individual ca- tax only in their individual181 ca 157 Sec. 1203 (2), Title XII, Act of 1917. 158 Title I, Part I, Act of 1916, as amended by Sec. 1202 (2), Title XII, Act of 1917. 159 Sec. 210 (b), p. 60. 160 Title I, Part I, Act of 1916, as amended by Sec. 1204 (1), Title XII, Act of 1917. 161 Under Sec. 5 (f) of the Bankruptcy Act, partnership property is required to be appropriated to the payment of partnership debts and individual property to the payment of individual debts. In each case the surplus, if any, is required to be applied to the pay Act of 1913. Act of 1917. Act of 1916. SEC. 1203. (2) 157 Subdivision (b) of section seven of such Act of September eighth, nineteen hundred and sixteen, is hereby repealed. SEC. 1202. [2] (2) 158 Section six of such Act of September eighth, nineteen hundred and sixteen, is also further amended by adding a new subdivision to read as follows: SEC. 6. "(c) A nonresident alien individual shall receive the benefit of the deductions and credits provided for in this section only by filing or causing to be filed with the collector of internal revenue a true and accurate return of his total income, received from all sources, corporate or otherwise, in the United States, in the manner prescribed by this title; and in case of his failure to file such return the collector shall collect the tax on such income, and all property belonging to such nonresident alien individual shall be liable to distraint for the tax." SEC. 7. (b) A nonresident alien individual may receive the benefit of the exemption provided for in this section only by filing or causing to be filed with the collector of internal revenue a true and accurate return of his total income, received from all sources, corporate or otherwise, in the United States, in the manner prescribed by this title; and in case of his failure to file such return the collector shall collect the tax on such income, and all property belonging to such nonresident alien individual shall be liable to distraint for the tax. SEC. 1204. [2], amending Sec. SEC. 8. (e) Persons carrying 8, (e) 160 Persons carrying on on business in partnership shall business in partnership shall be be liable for income tax only in liable for income tax only in their individual capacity, and ment of debts of the other. Under Sec. 64 (a), the trustee is required to pay all taxes legally due and owing by the bankrupt to the United States in advance of the payment of dividends to creditors. Under the Act of 1918, there is no tax against a partnership. Hence, federal income taxes owing by individuals com D. [5] Provided further, That any persons carrying on business in partnership shall be liable for income tax only in their indi Act of 1924. There shall be included in computing the net income of each partner his distributive share, whether distributed or not, of the net income of the partnership for the taxable year, or, if his net income for such taxable year is computed upon the basis of a period different from that upon the basis of which the net income of the partnership is computed, then his distributive share of the net income of the partnership for any accounting period of the partnership ending within the taxable year upon the basis of which the partner's net, income is computed. SEC. 218. (b) The partner shall, for the purpose of the normal tax, be allowed as credits, in addition to the credits allowed to him under section 216,1 163 his proportionate share of such amounts specified in subdivisions (a) and (b) of section 216 as are received by the partnership. pacity. There shall be included pacity. There shall be included in computing the net income of in computing the net income of each partner his distributive each partner his distributive share, whether distributed or share, whether distributed or not, of the net income of the not, of the net income of the partnership for the taxable year, partnership for the taxable or, if his net income for such year, or, if his net income for taxable year is computed upon such taxable year is computed the basis of a period different upon the basis of a period diffrom that upon the basis of ferent from that upon the basis which the net income of the of which the net income of the partnership is computed, then partnership is computed, then his distributive share of the net his distributive share of the net income of the partnership for income of the partnership for any accounting period of the any accounting period of the partnership ending within the partnership ending within the fiscal or calendar year upon the fiscal or calendar year upon basis of which the partner's net the basis of which the partner's income is computed. net income is computed. The partner shall, for the purpose of the normal tax, be al SEC. 218. (b) The partner shall, for the purpose of the normal tax, be allowed as lowed as credits, in addition to credits, in addition to the credits allowed to him under section the credits allowed to him under 216,163 his proportionate share section 216,163 his proportionate of such amounts specified in sub- share of such amounts specified divisions (a) and (b) of section in subdivisions (a) and (b) of 216 as are received by the partnership. 162 Members of a partnership, being taxable "only in their individual capacity," were not required under section 216 as are received by the partnership. SEC. 218. (b) If a fiscal year of a partnership ends during a calendar year for which the rates of tax differ from those for the preceding calendar year, then (1) the rates for such preceding calendar year shall apply to an amount of each partner's share of such partnership net income equal to the proportion which the part of such fiscal year falling within such calendar year bears to the full fiscal year, and (2) the rates for the calendar year during which such fiscal year ends shall apply to the remainder. SEC. 218. (c) In the case of an individual member of a partnership which makes return for a fiscal year beginning in 1917 and ending in 1918, his proportionate share of any excess-profits tax imposed upon the partnership under the Revenue Act of 1917 with respect to that part of such fiscal year falling in 1917, the Act of 1913 to include as income dividends received by the partnership from corporations paying in |