Act of 1924. regulations prescribed by the Commissioner with the approval of the Secretary. Where items of gross income are separately allocated to sources within the United States, there shall be deducted (for the purpose of computing the net income therefrom) the expenses, losses and other deductions properly apportioned or allocated thereto and a ratable part of other expenses, losses or other deductions which can not definitely be allocated to some item or class of gross income. The remainder, if any, shall be included in full as net income from sources within the United States. In the case of gross income derived from sources partly within and partly 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 of any expenses, losses or other deductions which can not definitely be allocated to some items or class of gross income; and the portion of such net income attributable to sources within the United States may be determined by processes or formulas of general apportionment prescribed by the Commissioner with the approval of the Secretary. Gains, profits and income from (1) transportation or other services rendered partly within and partly without the United States, or (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 from sources within and partly from sources without the United States. Gains, profits and income derived from the purchase of personal property within and its sale without the United States or from the purchase of personal property without and its sale within the Act of 1921. regulations prescribed by the Commissioner with the approval of the Secretary. Where items of gross income are separately allocated to sources within the United States, there shall be deducted (for the purpose of computing the net income therefrom) the expenses, losses and other deductions properly apportioned or allocated thereto and a ratable part of other expenses, losses or other deductions which can not definitely be allocated to some item or class of gross income. The remainder, if any, shall be included in full as net income from sources within the United States. In the case of gross income derived from sources partly within and partly 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 of any expenses, losses or other deductions which can not definitely be allocated to some item or class of gross income; and the portion of such net income attributable to sources within the United States may be determined by processes or formulas of general apportionment prescribed by the Commissioner with the approval of the Secretary. Gains, profits and income from (1) transportation or other services rendered partly within and partly without the United States, or (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 from sources within and partly from sources without the United States. Gains, profits and income derived from the purchase of personal property within and its sale without the United States or from the purchase of personal property without and its sale within the 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." 66 Act of 1918. NONRESIDENT ALIENS-ALLOWANCE OF DEDUCTIONS AND CREDITS "cured," or "aged. 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 curate return of his total income from all sources corporate or received from all sources in the otherwise in the United States, United States, in the manner in the manner prescribed in this prescribed in this title; includ- title; including therein all the ing therein all the information information which the Commiswhich the Commissioner may sioner may deem necessary for deem necessary for the calcula- the calculation of such deduction of such deductions and tions and credits: Provided, credits. That the benefit of the credit allowed in subdivision (e) of section 216 may, in the discretion of the Commissioner, 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 or foreign trader shall be liable to distraint for the tax. (2) The benefit of the credits allowed in subdivisions (d) and (e) of section 216, and of the reduced rate of tax provided for in subdivision (b) of section 210,159 may, in the discretion of the Commissioner and under regulations prescribed by him with the approval of the Secretary, be received by a nonresident alien individual entitled thereto, by filing a claim therefor with the withholding agent. rate or otherwise in the United States, in the manner prescribed by this title, including therein all the information which the commissioner may deem necessary for the calculation of such deductions and credits: Provided, That the benefit of the credits allowed in subdivisions (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. 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. Act of 1913. 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 216,163 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 as SEC. 218. (b) The partner 216 as are received by the part- 162 Members of a partnership, being taxable "only in their individual capacity," were not required under The partner shall, for the purpose of the normal tax, be allowed as credits, in addition to the credits allowed to him under section 216,163 his proportionate share of such amounts specified in subdivisions (a) and (b) of 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 |