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73d CONGRESS . SESS . II. CH. 277 . MAY 10, 1934 . INCOME TAX . ESTATES AND TRUSTS-Contd . "In the discretion of the grantor" defined Taxes of foreign coun- tries, etc . A llowa nce against tax of beneficiary. Ante, p. 718. PARTNERSHIPS . Individual liability only . Tax of partners . Distributive share included in net income . Partnership income . Computation of. Credits against net income. Additional, from partnership exemp- tions. Ante, p . 692. Earned income. Determination of. For eign, etc ., taxes. Credit for, allowed partners . Ante, p. 718. (b) As used in this section, the term " in the discretion of the grantor " means " in the discret ion of the gr antor, either alone or in conjunction with any person not having a substantial adverse interest in the disposition of the part of the income in question " . SEC. 168. TAXES OF FOREIGN COUNTRIES AND POSSESSIONS OF UNITED STATES. T he amo unt of incom e, wa r-prof its, a nd ex cess-p rofits taxes imposed by for eign countrie s or possessi ons of the Uni ted States shall be allowed as credit against the tax of the beneficiary of an estate or trust to the extent provided in section 131 . Suppl ement F-Pa rtnerships SEC. 181. PARTNERSHIP NOT TAXABLE . Individuals carrying on business in partnership shall be liable for income tax only in their individual capacity . SEC. 182. TAX OF PARTNERS . There shall be included in computing the net income of each part- ner his distributive share, whether distributed or not, of the net income of the partnership for the taxable year . SEC. 183. COMPUTATION OF PARTNERSHIP INCOME . The net income of the partnership shall be computed in the same manner and on the same basis as in the case of an individual . SEC. 184. CRED ITS AG AINST NET IN COME . The partner shall, for the purpose of the normal tax, be allowed as a credit against his net income, in addition to the credits allowed to him under section 25, his proportionate share of such amounts (not in excess of t he net income of the partn ership) of div idends and interest specified in section 25 .(a) as are received by the partnership . SEC. 185. EARNED INCOME . In the case of the members of a partnership the proper part of each share of the net income which consists of earned income shall be determined under rules and regulations to be prescribed by the Commissioner with the approval of the Secretary and shall be sep- arately shown in the return of the partnership . SEC. 186. T AXES OF F OREIG N CO UNTRI ES AND PO SSES SION S OF UNITED STATES. Th e amou nt of income , war -profi ts, an d exc ess-pr ofits taxes imposed by for eign countrie s or possessi ons of the Uni ted States shall be allowed as a credit against the tax of the member of a partnership to the extent provided in section 131 . Par tnership ret urns . SEC . 187. PARTNERSHIP RETURNS . S worn stat emen t of Every partnership shall make a return for each taxable year, g ross income, etc' stating specifically the items of its gross income and the deductions allowed by thi s title, and shall include in the return the names and addresses of the individuals who would be entitled to share in the net income if distributed and the amount of the distributive share of each individual . The return shall be sworn to by any one of the partners .
