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ing net income no deduction shall in ect of any of the items specified in

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pose only of the tax imposed by section e following credits:

interest upon obligations of the United he War Finance Corporation, which is r section 233;

xes imposed by Title III for the same t in the case of a corporation which beginning in 1917 and ending in 1918 ided in subdivision (a) of section 205, re period under Title II of the Revenue against the net income computed for of the Revenue Act of 1916 as amended and under Title I of the Revenue Act 1 for the entire period under Title III ribed for the calendar year 1918 shall ncome computed for the entire period

c corporation, $2,000.

OF TAX AT SOURCE.

se of foreign corporations subject to ngaged in trade or business within the any office or place of business therein,

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excess-profits taxes paid during the taxable country, upon income derived from sources th session of the United States.

If accrued taxes when paid differ from the credits by the corporation, or if any tax paid or in part, the corporation shall at once not who shall redetermine the amount of the taxes and under Title III for the year or years affe of taxes due upon such redetermination, if any corporation upon notice and demand by the co of taxes overpaid, if any, shall be credited or poration in accordance with the provisions of se of such a tax accrued but not paid, the Comm precedent to the allowance of this credit may tion to give a bond with sureties satisfactory t by him in such penal sum as he may require payment by the taxpayer of any amount of t any such redetermination; and the bond herein tain such further conditions as the Commission

(b) This credit shall be allowed only if th evidence satisfactory to the Commissioner she income derived from sources within such for possession of the United States, as the case n information necessary for the computation of s

(c) If a domestic corporation makes a retur ginning in 1917 and ending in 1918, only th credit shall be allowed which the part of su calendar year 1918 bears to the entire period.

d in the same manner as if collected se business or property they have cus

ection shall be subject to the provisions hen return is made under section 226 sion (c) of section 236 shall be reduced Le same ratio to the full credit therein months in the period for which such e months.

IDATED RETURNS.

rations which are affiliated within the under regulations to be prescribed by pproval of the Secretary, make a conme and invested capital for the purIII, and the taxes thereunder shall be on the basis of such return: Provided, t of such consolidated net income and ome and invested capital of any such ed after August 1, 1914, and not suciness, 50 per centum or more of whose 3, profits, commissions, or other income, contract or contracts made between er 11, 1918, both dates inclusive. In taken out shall be separately assessed ested capital and net income and the group shall be assessed on the basis of vested capital and net income.

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tions shall be deemed to be affiliated (1) if directly or controls through closely affiliated int or nominees substantially all the stock of the o if substantially all the stock of two or more or controlled by the same interests.

(c) For the purposes of section 238 a domes owns a majority of the voting stock of a foreig deemed to have paid the same proportion of an and excess-profits taxes paid (but not includi such foreign corporation during the taxable country or to any possession of the United derived from sources without the United States any dividends (not deductible under section 2 domestic corporation from such foreign corpor able year bears to the total taxable income of tion upon or with respect to which such taxes That in no such case shall the amount of the exceed the amount of such dividends (not dec 234) received by such domestic corporation du

TIME AND PLACE FOR FILING RET

SEC. 241. (a) That returns of corporations same time as is provided in subdivision (a) of

(b) Returns shall be made to the collector o is located the principal place of business or pri of the corporation, or, if it has no principal pla cipal office or agency in the United States, th Baltimore, Maryland.

of a patent, copyright, etc.,

se of infringement, or

aking patented (etc.) articles.

ROYALTIES.

ems briefly, it is believed to be clear 213 that royalties must be included as ross Income, for it specifies “dealings growing out of the ownership or use and also "or gains or profits or income tever."

nal Revenue Bureau are specific.

come" to the one receiving them. (Art. 48,

rporation in accordance with a contract by atent rights to manufacture machines, etc., accounted for." (Art. 113, Reg. 33 Rev.)

payments of royalties to the inventor ble deductions as necessary business the one paying such royalties.

* * *

Dration
for use of a patent upon
sold by the corporation is deductible as a
e amount so paid is reasonable, considering
its salability in the open market.” (O. D.

more fully dealt with in a later chapter.

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