PUBLIC LAWS-CH. 289-MAY 28, 1938 United States busi- ness or office. Term construed. Ante, pp. 503, 511; post, p. 530. Transactions through broker, etc. No United States business or office and gross income of more than $21,600 . Exceptions. Ante, pp. 452-453 . 49 Stat. 1714; 50 Stat. 830. (b) UNITED STATES BUSINEss OR OFFICE.- A nonresident alien indi- vidual engaged in trade or business in the United States or having an office or place of business therein shall be taxable without regard to the provisions of subsection (a). As used in this section, section 119, section 143, section 144, and section 231, the phrase "engaged in trade or business within the United States" includes the performance of personal services within the United States at any time within the taxable year, but does not include the performance of personal serv- ices for a nonresident alien individual, foreign partnership, or foreign corporation, not engaged in trade or business within the United States, by a nonresident alien individual temporarily present in the United States for a period or periods not exceeding a total of ninety days during the taxable year and whose compensation for such services does not exceed in the aggregate $3,000. Such phrase does not include the effecting of transactions in the United States in stocks, securities, or commodities through a resident broker, commission agent, or custodian. (c) NO UNITED STATES BUSINESS OR OFFICE AND GROSS INCOME OF MORE THAN $21,600. - A nonresident alien individual not engaged in trade or business within the United States and not having an office or place of business therein who has a gross income for any taxable year of more than $21,600 from the sources specified in subsection (a) (1), shall be taxable without regard to the provisions of subsection (a) (1), except that- (1) The gross income shall include only income from the sources specified in subsection (a) (1); (2) The deductions (other than the so-called "charitable deduction" provided in section 213 (c)) shall be allowed only if and to the extent that they are properly allocable to the gross income from the sources specified in subsection (a) (1); (3) The aggregate of the normal tax and surtax under sections 11 and 12 shall, in no case, be less than 10 per centum of the gross income from the sources specified in subsection (a) (1); and (4) This subsection shall not apply to a resident of a contigu- ous country so long as there is in effect a treaty with such country (ratified prior to August 26, 1937) under which the rate of tax under section 211 (a) of the Revenue Act of 1936, prior to its amendment by section 501 (a) of the Revenue Act of 1937, was reduced. Oross income. SEC. 212 . GROSS INCOME. General rule. Ships under foreign flag. Deductions. General rule. (a) GENERAL RULE. -In the case of a nonresident alien individual gross income includes only the gross income from sources within the United States. (b) SHIPS UNDER FOREIGN FLAG.- The income of a nonresident alien individual which consists exclusively of earnings derived from the operation of a ship or ships documented under the laws of a foreign country which grants an equivalent exemption to citizens of the United States and to corporations organized in the United States shall not be included in gross income and shall be exempt from taxa- tion under this title. SEC. 213. DEDUCTIONS. (a) GENERAL RiLE. -In the case of a nonresident alien individual the deductions shall be allowed only if and to the extent that they are connected with income from sources within the United States; and the proper apportionment and allocation of the deductions with respect to sources of income within and without the United States 528 [52 STAT.
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