Taxable Years 1913) a distribution from a second corporation which (under the law applicable to the year in which the distribution was made) was not a taxable dividend to the shareholders of the second corporation, the amount of such distribution shall not increase the earnings and profits of the first corporation in the following cases: (1) No such increase shall be made in respect of the part of such distribution which (under such law) is directly applied in reduction of the basis of the stock in respect of which the distribution was made. (2) No such increase shall be made if (under such law) the distribution causes the basis of the stock in respect of which the distribution was made to be allocated between such stock and the property received. Taxable Years Sec. 115. (m) Earnings and Sec. 115. (m) Earnings and profits-Increase in value ac-profits Taxable Years Beginning in 1946 and 1947 Sec. 115. (m) Earnings and Increase in value ac-profits - Increase in value accrued before March 1, 1913.- crued before March 1, 1913. crued before March 1, 1913. Same as 1944. Same as 1944. Sec. 115. (m) (1) If any increase or decrease in the earnings or profits for any period beginning after February 28, 1913, with respect to any matter would be different had the adjusted basis of the property involved been determined without regard to its March 1, 1913, value, then, except as provided in paragraph (2), an increase (properly reflecting such difference) shall be made in that part of the earnings and profits consisting of increase in value of property accrued before March 1, 1913. Sec. 115. (m) (2) If the application of subsection (1) to a sale or other disposition after February 28, 1913, results in a loss which is to be applied in decrease of earnings and profits for any period beginning after February 28, 1913 then, notwithstanding subsection (1) and in lieu of the rule provided in paragraph (1) of this subsection, the amount of such loss so to be applied shall be reduced by the amount, if any, by which the adjusted basis of the property used in determining the loss, exceeds the adjusted basis computed without Taxable Years Beginning in 1945 Sec. 115. (m) Earnings and profits - Increase in value accrued before March 1, 1913. Same as 1944. Taxable Years Beginning in 1944 1913) a distribution from a second corporation which (under the law applicable to the year in which the distribution was made) was not a taxable dividend to the shareholders of the second corporation, the amount of such distribution shall not increase the earnings and profits of the first corporation in the following cases: (1) No such increase shall be made in respect of the part of such distribution which (under such law) is directly applied in reduction of the basis of the stock in respect of which the distribution was made. (2) No such increase shall be made if (under such law) the distribution causes the basis of the stock in respect of which the distribution was made to be allocated between such stock and the property received. Taxable Years Beginning before 1944 Sec. 115. (m) Earnings and ac-profits-Increase in value &Ccrued before March 1, 1913. Sec. 115. (m) Earnings and profits-Increase in value crued before March 1, 1913. Sec. 115. (m) (1) If any increase or decrease in the earnings or profits for any period beginning after February 28, 1913, with respect to any matter would be different had the adjusted basis of the property involved been determined without regard to its March 1, 1913, value, then, except as provided in paragraph (2), an increase (properly reflecting such difference) shall be made in that part of the earnings and profits consisting of increase in value of property accrued before March 1, 1913. Sec. 115. (m) (2) If the application of subsection (1) to a sale or other disposition after February 28, 1913, results in a loss which is to be applied in decrease of earnings and profits for any period beginning after February 28, 1913 then, notwithstanding subsection (1) and in lieu of the rule provided in paragraph (1) of this subsection, the amount of such loss so to be applied shall be reduced by the amount, if any, by which the adjusted basis of the property used in determining the loss, exceeds the adjusted basis computed without Section originated 1940 as Sec. 115 (m), I. R. C., and was made retroactive to 1939. For any amendments prior to 1944, see Ninth Edition, p. 286. Sec. 116. (a) Earned income Sec. 116. (a) Earned income, from sources without United sources without United States. from Sec. 116. (a) (1) Foreign resi Sec. 116. (a) (1) Foreign resident for entire taxable year.-In dent for entire taxable year. the case of an individual citizen of the United States, who establishes to the satisfaction of the Commissioner that he is a bona fide resident of a foreign country or countries during the entire taxable year, amounts received from sources without the United States (except amounts paid by the United States or any agency thereof) if such amounts constitute earned income as defined in paragraph (3); but such individual shall not be allowed as a deduction from his gross income any deductions properly allocable to or chargeable against amounts excluded from gross income under this subsection. Same as 1944. Sec. 116. (a) Earned income from sources without United States. Sec. 116. (a) (1) Foreign resident for entire taxable year. Same as 1944. Sec. 116. (a) (2) Taxable year of change of residence to United States. In the case of an individual citizen of the United States, who has been a bona fide resident of a foreign country or countries for a period of at least two years before the date on which he changes his residence from such country to the United States, amounts received from sources without the United States (except amounts paid by the United States or any agency thereof), which are attributable to that part of such period of foreign residence before Sec. 116. (a) (2) Taxable year of change of residence to United States. Same as 1944. Sec. 116. (a) (2) Taxable year of change of residence to United States. Same as 1944. Taxable Years Beginning in 1945 Sec. 116. Exclusions from gross income. Same as 1944. Sec. 116. (a) Earned income from sources without United States. Sec. 116. (a) (1) Foreign resident for entire taxable year. Same as 1944. Sec. 116. (a) (2) Taxable year of change of residence to United States. Same as 1944. Taxable Years Beginning in 1944 regard to the value of the property on March 1, 1913, and if such amount so applied in reduction of the decrease exceeds such loss, the excess over such loss shall increase that part of the earnings and profits consisting of increase in value of property accrued before March 1, 1913. Sec. 116. Exclusions from gross income. In addition to the items specified in section 22 (b), the following items shall not be included in gross income and shall be exempt from taxation under this chapter: Sec. 116. (a) Earned income from sources without United States. Sec. 116. (a) (1) Foreign resident for entire taxable year.-In the case of an individual citizen of the United States, who establishes to the satisfaction of the Commissioner that he is a bona fide resident of a foreign country or countries during the entire taxable year, amounts received from sources without the United States (except amounts paid by the United States or any agency thereof) if such amounts would constitute, earned income as defined in paragraph (3) section 25 (a) if received from sources within the United States; but such individual shall not be allowed as a deduction from his gross income any deductions properly allocable to or chargeable against amounts excluded from gross income under this subsection. Sec. 116. (a) (2) Taxable year of change of residence to United States. In the case of an individual citizen of the United States, who has been a bona fide resident of a foreign country or countries for a period of at least two years before the date on which he changes his residence from such country to the United States, amounts received from sources without the United States (except amounts paid by the United States or any agency thereof), which are attributable to that part of such period of foreign residence before Taxable Years Beginning before 1944 Sec. 116. Exclusions from gross income. Section originated 1926 as Sec. 213 (b) (14), R. A. of 1926. For any amendments prior to Eighth Edition, p. 188, Sec. 116. (a) Earned income from sources without United States. Sec. 116. (a) (1) Foreign resident for entire taxable year. Section originated 1926 as Sec. 213 (b) (14), R. A. of 1926. For any amendments prior to Eighth Edition, p. 188, Sec. 116. (a) (2) Taxable year of change of residence to United States. Section originated 1942 as Ninth Edition, p. 288. Taxable Years such date, if such amounts constitute earned income as defined in paragraph (3); but such individual shall not be allowed as a deduction from his gross income any deductions properly allocable to or chargeable against amounts cluded from gross income under this subsection. ex Taxable Years Taxable Years Beginning in 1946 and 1947 Same as 1944. Sec. 116. (a) (3) Definition of Sec. 116. (a) (3) Definition of earned income.-For the purposes earned income. of this subsection, "earned income" means wages, salaries, professional fees, and other amounts received as compensation for personal services actually rendered, but does not include that part of the compensation derived by the taxpayer for personal services rendered by him to a corporation which represents a distribution of earnings or profits rather than a reasonable allowance as compensation for the personal services actually rendered. In the case of a taxpayer engaged in a trade or business in which both personal services and capital are material income producing factors, under regulations prescribed by the Commissioner with the approval of the Secretary, a reasonable allowance as compensation for the personal services rendered by the taxpayer, not in excess of 20 per centum of his share of the net profits of such trade or business, shall be considered as earned income. Sec. 116. (a) (3) Definition of earned income. Same as 1944. Sec. 116. (c) Income of foreign governments and of international organizations.-The income of foreign governments or international organizations received from investments in the United States in stocks, bonds, or other domestic securities, owned by such foreign governments or by international organizations, or from interest on deposits in banks in the United States of moneys belonging to such Sec. 116. (c) Income of foreign governments. Same as 1945. Sec. 116. (c) Income of foreign governments. Same as 1945. |