PUBLIC LAWS-CH. 63-FEB. 25, 1944 53 Stat. 48. 26 U. . 0., Supp. in, s116(a). 53 Stat. 17. 26 U.S.O. 25 (a); Supp. mI, 25 (a). Ante, p. 31; pos, p. 238. (b) EARNED INCOME FROM SOURCES WrTHOUT UNTrED STATES. - Section 116 (a) (relating to earned income from sources without the United States) is amended (1) by striking out "if such amounts would constitute earned income as defined in section 25 (a) if received from sources within the United States" appearing in paragraphs (1) and (2) and inserting in lieu thereof "if such amounts constitute earned income as defined in paragraph (3)"; and (2) by inserting at the end thereof the following new paragraph: "(3) DEFSnrmoN OF EARNED INCOME.-For the purposes of this subsection, 'earned income' means wages, salaries, professional fees, and other amounts received as compensation for personal services actually rendered, but does not include that part of the compensation derived by the taxpayer for personal services ren- dered by him to a corporation which represents a distribution of earnings or profits rather than a reasonable allowance as com- pensation for the personal services actually rendered. In the case, of a taxpayer engaged in a trade or business in which both per- sonal services and capital are material income producing factors, under regulations prescribed by the Commissioner with the ap- proval of the Secretary, a reasonable allowance as compensation for the personal services rendered by the taxpayer, not in excess of 20 per centum of his share of the net profits of such trade or busi- ness, shall be considered as earned income." SEC. 108. CERTAIN FISCAL YEAR TAXPAYERS. 66Stat. 837. (a) IN GENERAL.- Section 108 (relating to certain fiscal years) is m S0supp'. amended to read as follows: "SEC. 108. FISCAL YEAR TAXPAYERS. "(a) TAXABLE YEARS BEGINNING IN 1941 AND ENDING AFrER JUNE 30, 1942. - In the case of a taxable year beginning in 1941 and ending 53 Stat. 5. after June 30, 1942, the tax imposed by sections 11, 12, 13, 14, and 15 26 U S. C.0 12-14; Supp. II, i11-15. shall be- POt, P.231, 232. "(1) CORPORATIONS. - In the case of a corporation an amount equal to the sum of- "(A) that portion of a tentative tax, computed as if the law applicable to taxable years beginning on January 1 1941 were applicable to such taxable year, which the number of days in such taxable year before July 1, 1942, bears to the total number of days in such taxable year, plus "(B) that portion of a tentative tax, computed as if the law applicable to taxable years beginning on January 1, 1941, were applicable to such taxable year, but as if the amend- ments made by sections 105 (a), (b) (other than those relat- ing to dividends on the preferred stock of public utilities), 26 U.st.So, ssp. (c), (d), and (e) (1), 202, and 206 of the Revenue Act of 1942 m ,13123,as were applicable to such taxable year, which the number of 710, n L days in such taxable year after June 30, 1942, bears to the total number of days m such taxable year. "(2) TAXPAYERS OTHER THAN CORPORATION8. -- In the case of a taxpayer other than a corporation, an amount equal to the sum of- "(A) that portion of a tentative tax, computed as if the law applicable to taxable years beginning on January 1 1941 were applicable to such taxable year, which the number of days in such taxable year before July 1, 1942, bears to the total number of days in such taxable year, plus [58 STAT.
�
