Definition of Withholding (3) The term withholding agent


Withholding (3) The term withholding agent means any person required to agentdeduct and withhold any tax under the provisions of section 221 or section 237; .Paid." (4) The term "paid," for the purposes of the deductions and Application to, c- the t for purpose, sea dedctin acruaee tif ato credits under this title, means "paid or accrued" or "paid or in- deductionsandcrdits. curred," and the terms "paid or incurred" and "paid or accrued" shall be construed according to the method of accounting upon the basis of which the net income is computed under section 212; and eranal , s ervice (5) The term "personal service corporation" means a corporation whose income is to be ascribed primarily to the activities of the principal owners or stockholders who are themselves regularly engaged in the active conduct of the affairs of the corporation and in Exclusions which capital (whether invested or borrowed) is not a material income-producing factor; but does not include any foreign corporation, nor any corporation 50 per centum or more of whose gross income consists either (1) of gains, profits, or income derived from trading as a principal, or (2) of gains, profits, commissions, or other income, derived from a Government contract or contracts made between April 6, 1917, and November 11, 1918, both dates inclusive. Dividends. DIVIDENDS. poDatonetiono - SEC. 201. (a) That the term "dividend" when used in this title mry2, 1913, deeed (except in paragraph (10) of subdivision (a) of section 234 and para- graph (4) of subdivision (a) of section 245) means any distribution made by a corporation to its shareholders or members, whether in By persona service cash or in other property, out of its earnings or profits accumulated corporations sinee De since February 28, 1913, except a distribution made by a personal cembr 31, 917, e- service corporation out of earnings or profits accumulated since cepted. Fortaxation.deemd December 31, 1917, and prior to January 1, 1922. as from February 28, (b) For the purposes of this Act every distribution is made out of Prior earnings e-arnings or profits, and from the most recently accumulated earnings empt. or profits, to the extent of such earnings or profits accumulated since February 28, 1913; but any earnings or profits accumulated or increase in value of property accrued prior to March 1, 1913, may be distributed exempt from the tax, after the earnings and profits Allowance fo loss accumulated since February 28, 1913, have been distributed. If tributions. any such tax-free distribution has been made the distributee shall not be allowed as a deduction from gross income any loss sustained from the sale or other disposition of his stock or shares unless, and then only to the extent that, the basis provided in section 202 exceeds the sum of (1) the amount realized from the sale or other disposition of such stock or shares, and (2) the aggregate amount of such distri- butions received by him thereon. distribution of hern- (c) Any distribution (whether in cash or other property) made by Invs. a corporation to its shareholders or members otherwise than out of
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