61 STAT.] 80rH CONG. , l1T SESS.-CH. 258-JULY 16, 1947 (14) ALLOCATION OF DEDUCTIONS.- In the case of corporations and unincorporated businesses, the deductions provided for in this section shall be allowed only for and to the extent that they are connected with income arising from sources within the District within the mean- ing of title X of this article; and the proper apportionment and allocation of the deductions to be allowed shall be determined by the Assessor under formula or formulas provided for in section 2, title X of this article. (b) DEDUCTIONS NOT ALLOWED. - In computing net income, no deductions shall be allowed in any case for- (1) Personal, living, or family expenses; (2) Any amount paid out for new buildings or for permanent improvements or betterments, made to increase the value of any property or estate; (3) Any amount expended in restoring property or in making good the exhaustion thereof for which an allowance is or has been made; and (4) Premiums paid on any life-insurance policy covering the life of any officer or employee or of any person financially interested in any trade or business carried on by the taxpayer when the taxpayer is directly or indirectly a beneficiary under such policy. (5) If the net income of an unincorporated business for the taxable year is in excess of the exemption provided in section 4 of title VIII, no deduction which is allowed or allowable under section 3 (a) of this title from the gross income of any unincorporated business subject to the tax imposed by title VIII of this article shall be allowed as deduc- tion in the return and computation of the net income of any person entitled to share in the net income of such unincorporated business. (6) CAPITAL LOSSES.- Losses from the sale or exchange of any capital asset as defined in this article. TrTLE IV-ACCOUNTING PERIODS, INSTALLMENT SALES, AND INVENTORIES SEC. 1. ACCOUNTING PERIODS. -The net income shall be computed upon the basis of the taxpayer's annual accounting period (fiscal year or calendar year, as the case may be) in accordance with the method of accounting regularly employed in keeping the books of such taxpayer; but if no such method of accounting has been so employed, or if the method employed does not clearly reflect the income, the computation shall be made in accordance with such method as in the opinion of the Assessor does clearly reflect the income. If the taxpayer's annual accounting period is other than a fiscal year as defined in section 4 (j) of title I or if the taxpayer has no annual accounting period or does not keep books, the net income shall be computed on the basis of the calendar year. If the taxpayer makes a Federal income-tax return, his income shall be computed, for the purposes of this title, on the basis of the same calendar or fiscal year as in such Federal income-tax return, if the basis is accepted and approved by the Commissioner of Internal Revenue. SEC. 2. PERIOD IN WHICH ITEMS OF GROSS INCOME INCLUDED. - The amount of all items of gross income shall be included in the gross income for the taxable year in which received by the taxpayer unless, under methods of accounting permitted under section 1, any such amounts are to be properly accounted for as of a different period. In the case of death of a taxpayer on the cash basis, no amount will be accrued on his final return; and on the accrual basis, amounts (except amounts includible in computing a partner's net income) accrued only by reason of the death of the taxpayer shall 339 Pos, p.34. Post, p . 349. Post, p. 346. Ante, p. 337. Post, p. 345. Computation of net income. Ante, p. 332. Federal income-tax return. Death of tapayer.
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