73d C ONGRESS. SESS . II. CH. 277 . MAY 10, 1934. during the taxable year to any foreign country or to any possession of the United States ; an d (2) RE SIDEN T OF UNITE D STATES .-In the case of a resident of the United States, the amount of any such taxes paid or accrued during the taxable year to any possession of the United States
and (3) ALIEN RESIDENT O F UNITED STATES .-In the case of an alien resident of the United States, the amount of any such taxes paid or accrued during the taxable year to any foreign country, if the foreign country of which such alien resident is a citizen or sub- ject, in imposing such taxes, allows a similar credit to citizens of the United States residing in such country ; and (4) PARTNERSHIPS AND ESTATES .-In the case of any such indi- vidual who is a memb er of a partnership or a beneficiary of an estate or trust, his proportionate share of such taxes of the partner- ship or the estate or trust paid or accrued during the taxable year toa foreign country or to any possession of the United States, as the case may be. (b) LIM IT ON CREDIT.-The amount of the credit taken under this section shall be subject to each of the following limitations : (1) The amount of the credit in respect of the tax paid or accrued to any country shall not exceed the same proportion of the tax against which such credit is taken, which the taxpayer's net income from sources within such country bears to his entire net income for the same taxable year ; and (2) The t otal a mount of the credit shall not ex ceed the s ame proportion of the tax against which such credit is taken, which the taxpayer's net income from sources without the United States bears to his entire net income for the same taxable year . (c) ADJ US TME NTS ON PAYMENT OF AC CR UED TA XE S.-If accr ued taxes when paid differ from the amounts claimed as credits by the taxpayer, or if any tax paid is refunded in whole or in part, the taxpayer shall notify the Commissioner, who shall redetermine the amount of the tax for the year or years affected, and the amount of tax due upon such redetermination, if an y, shall be paid by the taxpayer upon notice and demand by the collector, or the amount of tax overpaid, if any, shall be credited or refunded to the taxpayer in accordance with the provisions of section 322 . In the case of such a tax a ccrue d but not p aid, the Co mmiss ioner asa condi tion precedent to the allowance of this credit may require the taxpayer to give a bond with sureties satisfactory to and to be approved by the Commissioner in such sum as the Commissioner may require, con- ditioned upon the payment by the taxpayer of any amount of tax found due upon any such redetermination ; and the bond herein prescrib ed shall contain such fu rther co nditions as the C ommissio ner may require . (d) YEAR IN WHICH CREDIT TAKEN.-The credits provided for in this section may, at the option of the taxpayer and irrespective of the method of accounting employed in keeping his books, be taken in the year in which the taxes of the foreign country or the posses- sion of the United States accrued, subject, however, to the conditions prescribed in subsection (c) of this section . If the taxpayer elects to take such credits in the year in which the taxes of the foreign country or the possession of the United States accrued, the credits for all subsequent years shall be taken upon the same basi s, and no portion of any such taxes shall be allowed as a deduction in the same or any succeeding year . Limit on credit . Proportionate credit for taxes paid to foreign country . 719 INCOME TAX . C RE DI TS AGAINST TAX- Contd. Resident ; to United States possessions . Alien resident to for . eign countries allowing similar credit . Partnerships and es . tates. Limitation on total amount . Adjustments if tax paid differs from cred- its claimed . - Redetermination . Post, p. 750. Tax accrued but un- paid . Bond required . Credits for foreign taxes may be taken in the year accrued . Credits on same basis for subsequent years .
