§987 Tznnn za.-rzvrm _ 987. Sameritems not allowed.?-eln computingiiet income no deduction shall in any eax beallowed in of any of the items? qxeclhed in section 215. (Feb. 26,1926, c. 27,} 235, 44. Stat.43·) _ ‘ 2 U ` See note at beginning of this chapter.- · · “ E Section 215, herein referred to, is set out ln { _956 of this sup- _ plemental title. _' - . _‘ _ g *1 _ · _. · 988. Credits allowedL—·—Eor the purpose only of the tax lmposed -by` section -230 there ? shall be allowed the following credits: 1 `·_ . · ·- —- · ` _ (a) The amount received as interest Jupon obligations- of the United states which is included in gross income,'under* section 233:and __ *_ " Q (bl Jln the case of ‘a domestic corporation the net income of . which is $25,000 orless, a specirlc,credlt of·$2,000; but if the net income is more than `&5,000 the tax imposed yby section 230 _ shall not exceed the tax- which would be payable if uw $2,000 credit were allowed, plus the- amount of the net income in ex·` ` cess of $,000. (Feb. 26,1926, c. 21, §· 226,-44 Stat'43.) ,_ See note atbeglnnlng oornrsucnapm, · I " u Sections 230 and 233, mentioned in the tert, are.~set out in (Q 981 and.§¤85, respectively, of this supplemental title, . _ 989. Foreign corporations; deduction and withholding of tax u at soarce.4-=In the case of foreign corporations subject to" taxation under this title not engaged in trade or business within the United States and not hating any omce or place of business therein, there shall be deducted and withheld at the source in . the same, manner and upon. the same items of income as `is pro-Q * vided in section‘221 a‘ tax equal to.12% centum thereof no reséct of all payments of.: income made before 'the enactment ofthis Act, and equal to»13% per centum_thereof lnrespect ofi A all payments of `income made after the enactment of this `Act, and stick tax shall be returned and paid in the same manner n andisnbject to the »sa_in·e conditionsas proyided ni that section: Prooidedkghat in the eax of u lntermt described in'subdl'vlsion __ (b) of that section the deduction andewithholding shall be at t the rate of 2 per centum. (Feb. 26,1926, c. _27, _§ 237,314 Stat.43.)_ · · `· U note at beginning of thishchapterp · - _ 0 "Thit tltle,"’ herein referred to, constl‘tutos4c.‘ 19 of -this’supplesnental ·title.' Section 221, mentioned in the .text, is setout in‘ _§ 962 ot thissupplemzmtal title. x » ff _ , ; ·· _
Credit. {brother taxes paidl-—»(a) In the case of a do--
nnestlc corporation the tax imposed by .·tlils tltle shall he credi ‘ lted. with the amount of ·_any income, war·prollts,» and exdws- ‘ prodtsitaxes paid or accrued aunug the same taxable year to any foreign country, or to any po lon of the United Statesz,
That the amount of such credit- shall in no case exceed the sameproportion of the tax .(computed` on the basis _
of the tp.xpayer’s not income swithout the deduction ot, any in- ' corner ·war·protlts, or ezécessproilte taxm imposed by apy._forcigii‘ country or po&sion of the United Stag), , s» agmst which such. · credit is taken,. which the Huet income. (com `ted withoutietlgdeduction of any such income, wart-pro6ts,» or ;· ·-` com-pro ts tax) from sources without the.Unl : ; to its entire net- (com t _ , t such Aeduction)_ for, the Qme taxable e ._ to thecase of dornmtic insurance companies : . _ to the `taxglmposed —by· section or 246, the term “ "— as in this subdivision Lmeans net in-
ac cleaned hrsections 2t5‘and ,~rmoctivelJ.. . _
_1 (b) It accrued taxes when paid dl¤cr?trom theamounts clal@ as credits by the corporation, or if any taxpald is - rernnded in whole or· ln part, the corporation; shall at org r. notify the commissioner, who shall redeterurlnaattmramohfnut ot _ the tum for the year or yum a¤cct“ed}m and the amount ot
dueupon such uredetermlnation, it any, shall be paldby
the corporation upon notice and demand by the collector, or the amount of taxes overpald, lf any, shall be credited, or refunded
BNAL REVENUE 1992 to the corporation in accord1mce with the provisions ot section 0 284.. _In the of such a tax accrued but not paid, the com. mwsioner as a» coizditiou precedent to the allowance ot this ` credit may réqziire the ‘(!01'bQ1’&ti0I\ , to give u bond with sm-;. ties satisfactory tosml to be approved by io sock sum sg he may .. require, conditioned upon the payment- by the taxpayer ot any o‘moui1t_ ot taxa found due inpon. any such reiietermlnsition; arid s the bond herein. ·prucr1bed shall contain such further. conditions as-the commissioner may. require. » (_c). The cremts protlded for in subdivision (a)‘ of this section mai, at the option _ ot fthe taxpayer irrespective ot the method of accounting emplojied in keeping its books, be taker; in the year in which the taxes_,of the foreign country or tlie possession of ·tl1e United States loomed, subject, however, to the Pcomlitions .prescribed,`in mbdivmoxi (b)!ot this section, It the taxpayer elects `to tske such credits in the year ih which , the toxu of the foretgo country or the possemion `of the United States accrued, the credgts for all subsequent ywrs shall be taken upon the*‘sai:oe basis. ‘ *` ’ I . _ (d) These credits shall be allowed only if the taxpayer fornishes evidence satisfactory. to the oommissioner showing the amount ot income derived trojn ‘ sources without the United States, `audoll other "iuztormstlou necessary for the vcrmcatioh audconiputation. of such credit; · -_ ? · ·· _· (e)· For the of this section a domestic‘co1‘p0ration `ivhlch owhs a· majority of the vgting stock of a forcip corporation; {rom which it receives dividends (not deductible under section 234); in_a¤y taxable fear shall be deemed to havepaid the same proportion .of any income, waréprohts, or excessqarolits taxes paid Jby such ·toréi@ corporation to any foreigin coootry or to any possession of the United States, upon or yvlth respect to the accumulated profits of mclrtorelgn corporation from which such dividends were paid, which the amount ‘ot soon mvmenus bears_ to the amount of such accumulated pronto: Prov•‘do<I, That the credit allowed .to any dométic corporation under this- subdivision shall inno case exceed tlme mpc; tion of the taxes against which it `Is credited, which the amount of such dividends bears to amount of the entlre net income of the domestic corporaHon in which such dividends are inclqded.- T-he- term P'} accumulated proots " when used ju this sizbdivislou to reference to a foreign éorporation; means the smountor its fotos, protlts, or inco in' of the income, war-Iirotits, and excess—pro¤ts upon or wits respect to such ·proHts or income; and the commissioner with tpe approval ot the Secretary shall have tml power to determine from—tl1e accumulated protits oi yahat year or yurs dozids ·were;pgid ; diridends poidjn tgfjirsksiiéidais of anyyear as having been palg,£rom~th§‘t'iccumulated prom! ot the jBB·F*"”0l’/Q (ooless to' his satisfaction shoy;iQ.othe1·WTse),_ and in other trmting dividends as hiring been paid. from the most `regent1y.aoco.mulsted glob, pronto, . or earnings. In the case of [foreign corporatiou,"th6 income, war-scouts, and exceéa—pro¤ts' taxes of véhloh are
lhcd on the ot an accounting period oi lea than
onelyear, the vtord ?‘yenr"··as used in this subdivision shall beconstruted. to mean sucln accounting pwlod. . . (t) For·tl1e·`purposes ot this section .a corporation entitled to the benems of section` 2M 0l‘_£ shall be treated as s foreign' corporat1o¤.~ (Feb. 28Q 1@0,'c. '27» { %8· 44 Stat. 44.) e ses um se m·;m¤1¤g`. or ms enaptei. _ -,e »e»-5 of 'Q .. "Thi| title,"` herein referred c. 19 of this supple- · _ mental title. 246, 202, and 203, mlotioned i¤ `th8j§XL-»I·l’€“Kt out ln $$,980, 1001,1006; 1030, and 1031, respec- »-~··s t“t1'€·”ely, ot this supplemental title. Section 245, mentioned , in fh• text., is not out so ss 1®4 noo 1005 ottutd title; V . · _ · _ 991., Ta; returns; formaml contents; veri§catioq.—-—(o) Eycri corporation sitbject to taxation under this title- shall make a tum; stating speclucally the items ot its gross income and tho deductions s¤d‘ credits.- allowed by this title. The return
