Page:United States Statutes at Large Volume 48 Part 1.djvu/742

716 INCO ME TAX . COMPUTATION OF NET INCOME- Contd . Comput ation where prope rty acq uired is less than sold . Comput ation whe re prope rty acq uired i s not less than sold . Income from sources within United States . Items treated as. Interest, etc . raid to persons Dot in bu,mes ° in United Sl, , tN, If less than 20 per ce nt from United States sources . From bankers' ac- ceptances . Dividends. Domestic corpora- tions . Foreign corporations . 73d C ONGRESS. SESS. II. C H. 277. MAY 10, 1934 . in stocks or securities, and with respect to a transaction made in the ordinary course of its business . (b) If the amount of stock or securities acquired (or covered by the contract or option to acquire) is less than the amount of stock or securitie s sold or otherwis e dispose d of, the n the par ticular s hares of stock or securities the loss from the sale or other disposition of which is not deductible shall be determined under rules and regu- lations prescribed by the Commissioner with the approval of the Secretary . (c) If the amount of stock or securities acquired (or covered by the contract or option to acquire) is not less than the amount of stock or securities sold or otherwise disposed of, then the particular shar es of stock or sec uritie s the acquisi tion o f whic h (or the co n- tract or option to acquire which) resulted in the nondeductibility of the loss shall be determined under rules and regulations pre- scribed by the Commissioner with the approval of the Secretary . SEC . 119. INCOME FROM SOURCES WITHIN UNITED STATES . (a) GROSS INCOME FROM SOURCES IN UNITED STATEs .-The follow- ing items of gross income shall be treated as income from sources within the United States : (1) INTEREST .-Interest from the United States, any Territory, any political subdivision of a Territory, or the District of Colum- bia, and interest on bonds, notes, or other interest-bearing obliga- tions o f resi dents, corpo rate o r othe rwise, not in cludin g- (A) interest on deposits with persons carrying on the bank- ing business paid to persons not engaged in business within the Unite d Stat es and not h aving an off ice or place of bus iness therein, or (B) interest received from a resident alien individual, a resident foreign corporation, or a domestic corporation, when it is shown to the satisfaction of the Commissioner that less than 20 per centum of the gross income of such resident payor or domes tic corpo ratio n ha s bee n der ived from sour ces w ithi n the United States, as determined under the provisions of this sect ion, f or the three -year period ending with the cl ose of the taxable year of such payor preceding the payment of such inte rest, or for such part o f such period as ma y be a pplica ble, or (C) income derived by a foreign central bank of issue from bank ers' a ccepta nces ; (2) DIVIDENDS .-The amount received as dividends- (A) from a domestic corporation other than a corporation entitled to the benefits of section 251, and other than a corpora- tion less than 20 per centum of whose gross income is shown to the satisfaction of the Commissioner to have been derived from sources within the United States, as determined under the pro- visions of this section, for the three-year period ending with the close of the taxable year of such corporation preceding the declaration of such dividends (or for such part of such period as the corporation has been in existence), or (B) fro m a fo reign corpor ation unless less t han 50 per c entum of the gross income of such foreign corporation for the three- year p eriod ending with the cl ose of its ta xable year p recedi ng the declaration of such dividends (or for such part of such period as the corporation has been in existence) was derived from sources within the United States as determined under the prov ision s of this sect ion ; but dividends from a foreign