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

Sec. 119. (e) (1) transportation or other services rendered partly within and partly without the 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,

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 United States, shall be treated as derived entirely from sources within the country in which sold, except that gains, profits, and income derived from the purchase of personal property within a possession of the United States and its sale

Taxable Years Beginning before 1944

Taxable Years Beginning in 1944

within the United States shall be treated as derived partly from sources within and partly from sources without the United States.

Sec. 119. (f) Definitions.-As used in this section the words "sale" or "sold" include “exchange" or "exchanged"; and the word "produced" includes "created", "fabricated", "manufactured", "extracted" "processed", "cured", or "aged."

Sec. 120. Unlimited deduction for charitable and other contributions.

In the case of an individual if in the taxable year and in each of the ten preceding taxable years the amount of the contributions or gifts described in section 23 (0) (or corresponding provisions of prior revenue Acts) plus the amount of income, war-profits, or excess-profits taxes paid during such year in respect of preceding taxable years, exceeds 90 per centum of the taxpayer's net income for each such year, as computed without the benefit of the applicable subsection, then the 15 per centum limit imposed by section 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 any national banking association, or of any bank or trust company organized under the laws of any State, Territory, possession of the United States, or the Canal Zone, or of any other banking corporation engaged in the business of industrial banking and under the supervision of a State banking department or of the Comptroller of the Currency, or of any incorporated domestic insurance company, there shall be allowed as a deduction from gross income, in addition to deductions otherwise provided for in this chapter, any dividend (not including any distribution in liquidation) paid, within the taxable 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.

Sec. 122. (b) (1) Net operat

Same as 1944.

Sec. 122. (b) (1) Net operating loss carry-back.-If for any tax-ing loss carry-back, able year beginning after December 31, 1941, the taxpayer has a net operating loss, such net operating loss shall be a net operating loss carry-back for each of the two preceding taxable years, except that the carry-back in the case of the first preceding taxable year shall be the excess, if any, of the amount of such net operating loss over the net income for the second preceding taxable year computed (A) with the exceptions, additions, and limitations provided in subsection (d) (1), (2), (4), and (6), and (B) by determining the net operating loss deduction for such second preceding taxable year without regard to such net operating loss.

Taxable Years Beginning in 1946 and 1947

Sec. 122. Net operating loss deduction.

Sec. 122. (a) Definition of net operating loss.

Same as 1944.

Sec. 122. (b) Amount of carryback and carry-over.

Sec. 122. (b) (1) Net operating loss carry-back.

Same as 1944.

Sec. 122. (b) (2) Net operating loss carry-over.-If for any taxable year the taxpayer has a net operating loss, such net operating loss shall be a net operating loss carry-over for each of the two succeeding taxable years, except that the carry-over in the case of the second succeeding taxable year shall be the excess, if any, of the amount of such net operating loss over the net income for the intervening taxable year computed (A) with the exceptions, additions, and limitations provided in subsection. (d) (1), (2), (4), and (6), and (B) by determining the net operating loss deduction for such intervening

Sec. 122. (b) (2) Net operating loss carry-over.

Same as 1944.

Sec. 122. (b) (2) Net operating loss carry-over.

Same as 1944.