52 STAT.] 75TH CONG. , 3 D SESS.-CH. 289-MAY 28, 1938 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. (c) GRoss INCOME FROM SOURCES WITHOUT UNITED STATES. -The following items of gross income shall be treated as income from sources without the United States: (1) Interest other than that derived from sources within the United States as provided in subsection (a) (1) of this section; (2) Dividends other than those derived from sources within the United States as provided in subsection (a) (2) of this section; (3) Compensation for labor or personal services performed without the United States; (4) Rentals or royalties from property located without the United States or from any interest in such property, including rentals or royalties for the use of or for the privilege of using without the United States, patents, copyrights, secret processes and formulas, good will, trade-marks, trade brands, franchises, and other like properties; and (5) Gains, profits, and income from the sale of real property located without the United States. (d) NET INCOME FROM SOURCES WITHOUT UNITED STATES.-From the items of gross income specified in subsection (c) of this section there shall be deducted the expenses, losses, and other deductions properly apportioned or allocated thereto, and a ratable part of any 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 treated in full as net income from sources without the United States. (e) INCOME FROM SOURCES PARTLY WIrHIN AND PARTLY WITHOUT UNITED STATES. -Items of gross income, expenses, losses and deduc- tions, other than those specified in subsections (a) and (c) of this section, shall be allocated or apportioned to sources within or without the United States, under rules and regulations prescribed by the Commissioner with the approval of the Secretary. Where 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 allo- cated 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 deduc- tions apportioned or allocated thereto and a ratable part of any expenses, losses, or other deductions which can not definitely be allo- cated 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 pre- scribed by the Commissioner with the approval of the Secretary. Gains, profits, and income from- (1) transportation or other services rendered partly within and partly without the United States, or (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, Gross income from sources without United States. Interest. Dividends. Compensation for labor, etc. Rentals, royalties, etc. Gains, etc., from real property sales. Net income from sources without United States. Income from sources partly within and partly without United States. Apportionment. From United States sources. Computation of net income. Determinationi Transportation or other services. Sale of personal property. 505
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