SIXTY-EIGHTH CONGRESS. Sess. I. Ch. 234. 1924. 263 (6) The term “ capital net loss " means the excess of the sum of ., ¤°Q¤¤¤ MX- ,, the capital losses plus the capital deductions over the total amount C°°`t°1 mi lm of capital gain; " (7) The term “ ordinary net income ” means the net income, com- "05<}imrs· net inputed in accordance with the provisions of this title, after excludin °°m°' all items of capital gain, capital loss, and capital deductions; and ,, . (8) The term " capital assets " means property held by the tax- Umm °sS°°s‘" payer for more than two years (whether or not connected with his trade or business), but does not include stock in trade of the tax- ,,d1;§"’°"" “°* “‘°l“d‘ payer or other property of a kind which would properly be included i in the inventory o the taxpayer if on hand at the close of the taxable year, or property held by the taxpayer primarily for sale in the course of his trade or business. (b) In the case of any taxpayer (other than a corporation) who g,§,°‘,,,‘;§‘,,(§“}‘,§‘j‘,’eu“$,§ for any taxable year derives a capital net ain, there shall (at the ¤·>¤¤¤¤1<>r¤¤r¤¤· election of the taxpayer) be levied, collectedg and paid, in lieu of the taxes imposed by sections 210 and 211 of this title, a tax determined as follows: A partial tax shall first be computed upon the basis of the ordi- ,,,f’,,§’{{§§“‘*""°" "° d°‘ nary net income at the rates and in the manner provided in sections 210 and 211, and the total tax shall be this amount plus 12% per centum of the capital net gain. (c) In the case of any taxpayer (other than a corporation) who °¤ ¤·¤i¢¤¤¤¤¢¤<¤¤- for any taxable year sustains a capital net loss, there shall be levied, _ collected, and paid, in lieu of the taxes imposed by sections 210 and 211 of this title, a tax determined as follows: Computation to dy A partial tax shall first be computed upon the basis of the ordi- mmm nary net income at the rates and in the manner provided in sections 210 and 211, and the total tax shall be this amount minus 12-} per centum of the capital net loss; but in no case shall the tax imder this subdivision be less than the taxes imposed by sections 210 and 211 computed without regard to the provisions of this section. cou I d (d) The total tax determined under subdivision (b) or (c) shall mm. °° m` be collected and paid in the same manner, at the same time, and subject to the same provisions of law, including penalties, as other taxes under this title. A ,,,*,,0,, to wb (e) In the case of the members of a partnershilp, of an estate or nmilps, emu u- trust, or of the beneficiary of an estate or trudz, the proper part of °"”°°’ °°°‘ each share of the net income which consists, respective y, of ordinary net income, ca ital net gain, or capital net loss, shall be determined under miles and regulations to be prescribed by the Commissioner with the approval of the Secretary, and shall be separate] shown in the return of the pgirtnership or estate or trust, R°"“'°’ °“‘* “**°'· and shally be taxed to the member or neficiary or to the estate or trust as provided in sections 218 and 219, but at the rates and in the manner provided in subdivision (b) or (c) of this section. rxaizmzn rxcomm. "E¤¤*°d *¤°°¤*°·" Sec. 209. (a) For the purposes of this section- M°’*¤i¤¤°'“m$· (1) The term " earned income " means wages, salaries, profes- "E¤¤°d *¤°°¤*°-" sional 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 rendered by him to a corporation which represents a distribution of earnings or profits rather than a reasonable allowance as compen- A,,,mmmWm_ sation for the personal services actually ren$lered._ In the case of a éiésgvmsaggumma taxpayer engaged in a trade or business in which both personal °"" ‘ services and capital are material income producing factors, a reasonable allowance as compensation for the personal services actually ren-
