Page:United States Statutes at Large Volume 45 Part 1.djvu/877

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826

SEV ENTIE TH CONGRESS . SEss. I. CH. 852 . 1928 . INC OME TAX

of this section and the taxpayer (other than a corporation) has in such year a capital net gain or a capital net loss, then the method of allowing such deduction in such third year shall be the same as Application to net pr ovided i n subsec tion (c) . lass for 1926 or 1927 .

(e) Net loss for 1926 or 1927.-If for the taxable year 1926 or 1927 a taxpayer sustained a net loss within the provisions of the Revenue Act of 1926, the amount of such net loss shall be allowed as a deduction in computing net income for the two succeeding tax- able years to the same extent and in the same manner as a net loss sustained for one tax ab le ye ar is, under th is Ac t, al low ed as a Fiscal y ears .

de duction for the two succ eeding t axable y ears . Returns, if period

(f) Fiscal year returns .-If a taxpayer makes return for a period begins in first calendar year and ends in beginning in one calendar year (hereinafter in this ,subsec- sec ond . tion called "first calendar year") and ending in the following calen- dar year (hereinafter in this subsection called " second calendar year ") and the law applicable to the second calendar year is differ- ent from the law applicable to the first calendar year, then his net Proportion for dif loss for the period ending during the second calendar year shall be the ferentratest sum of : (1) the same proportion of a net loss for the entire period, determined under the law applicable to the first calendar year, which the portion of such period falling within such calendar year is of the entire period ; and (2) the same proportion of a net loss for the entire period, determined under the law appli cable to the second calendar year, which the portion of such period falling within such calendar year is of the entire period . Loss on sale of stock or securit ies .

SEC . 118. LO SS ON SALE OF STOCK OR SECURIT IES . Restri ction a claim fo r, if

has In the case of any loss claimed to have been sustained in any acquired substantially sale identical property

or other disposition of shares of stock or securities where it within 30 day s, appears that within thirty days before or after the date of such sale or other disposition the taxpayer has acquired (otherwise than by bequest or inheritance) or has entered into a contract or option to acquire substantially identical property, and the property so acquired Ante, p.800.

is held by the taxpayer for any period after such sale or other dis- Allowance to mar_ position, no deduction for the loss shall be allowed under section porations, etc.

23 (e) (2) of this title ; nor sha ll su ch deduction be allowed under Ante, p .800 .

section 23(f) unless the claim is made by a corporation, a dealer Acquisition in part in stocks or securities, and with respect to a transaction made in onl y the ordinary course of its business . If such acquisition or the con- tract or option to acquire is to the extent of part only of substantially identi cal prop erty, th en only a propor tionate part of the loss shall be disallowed . within nIncome from sour ces SEC . 119. INCOME FROM SOURCES WITHIN UNITED STATES . Items treated as such . (a) Gross income from sources in United States .-The following items of gross income shall be treated as income from sources within the Uni ted States : Inter est on b onds ,

(1) INTEREST .--Interest on bonds, notes, or other interest-bear- etc., of residents .

in- obligations of residents, corporate or otherwise, not including- Exceptions. Paid persons not in

(A) interest on deposits with persons carrying on the business in United

banking business pa id to persons not en ga ged in business states.

within the United States and not having an office or place of business therein, or If lessthan20percent

(B) interes t receiv ed from a reside nt alien individ ual, a from United states sources .

resident fo rei gn corporation, ora domestic corporation, when it is shown to the satis facti on of the C ommis sioner that less than 20 per ce ntum of the gross income of such resident payor or domestic corporation has been derived from sources within the United States, as determined under