f such estate or trust is a nonresident alien, stating specifically the items f the gross income and the deductions and credits allowed by this title. Inder such regulations as the Commissioner with the approval of the ecretary may prescribe, a return made by one of two or more joint duciaries and filed in the office of the collector of the district where uch fiduciary resides shall be a sufficient compliance with the above equirement. The fiduciary shall make oath that he has sufficient knowldge of the affairs of such individual, estate or trust to enable him to ake the return, and that the same is, to the best of his knowledge and elief, true and correct. Fiduciaries required to make returns under this Act shall be subject > all the provisions of this Act which apply to individuals. Returns When Accounting Period Changed. Sec. 226. That if a taxpayer, with the approval of the Commisioner, changes the basis of computing net income from fiscal year to alendar year a separate return shall be made for the period between he close of the last fiscal year for which return was made and the folOwing December 31. If the change is from calendar year to fiscal ear, a separate return shall be made for the period between the close f the last calendar year for which return was made and the date desigated as the close of the fiscal year. If the change is from one fiscal ear to another fiscal year a separate return shall be made for the period etween the close of the former fiscal year and the date designated as he close of the new fical year. If a taxpayer making his first return or income tax keeps his accounts on the basis of a fiscal year he shall ake a separate return for the period between the beginning of the alendar year in which such fiscal year ends and the end of such fiscal ear. In all of the above cases the net income shall be computed on the asis of such period for which separate return is made, and the tax shall e paid thereon at the rate for the calendar year in which such period is cluded; and the credits provided in subdivisions (c) and (d) of section 16 shall be reduced respectively to amounts which bear the same ratio > the full credits provided in such subdivisions as the number of months 1 such period bears to twelve months. Time and Place For Filing Returns. Sec. 227. (a) That returns shall be made on or before the fifteenth ay of the third month following the close of the fiscal year, or, if the eturn is made on the basis of the calendar year, then the return shall be lade on or before the fifteenth day of March. The Commissioner may rant a reasonable extension of time for filing returns whenever in his udgment good cause exists and shall keep a record of every such extenon and the reason therefor. Except in the case of taxpayers who are broad, no such extension shall be for more than six months. Changes in Accounting Period Returns due Time Place Understate ments Normal Tax Exempt (b) Returns shall be made to the collector for the district in which is located the legal residence or principal place of business of the person making the return, or, if he has no legal residence or principal place o business in the United States, then to the collector at Baltimore, Mary land. Understatement in Returns. Sec. 228. That if the collector or deputy collector has reason to believe that the amount of any income returned is understated, he shall give due notice to the taxpayer making the return to show cause why the amount of the return should not be increased, and upon proof of the amount understated, may increase the same accordingly. Such taxpayer may furnish sworn testimony to prove any relevant facts and if dissatisfied with the decision of the collector may appeal to the Commissioner for his decision, under such rules of procedure as may be prescribed by the Commissioner with the approval of the Secretary. Part III-Corporations. Tax on Corporations. Sec. 230. (a) That, in lieu of the taxes imposed by section 10 of the Revenue Act of 1916, as amended by the Revenue Act of 1917, and by section 4 of the Revenue Act of 1917, there shall be levied, collected, and paid for each taxable year upon the net income of every corporation a tax at the following rates: (1) For the calendar year 1918, 12 per centum of the amount of the net income in excess of the credits provided in section 236; and (2) For each calendar year thereafter, 10 per centum of such excess amount. (b) For the purposes of the Act approved March 21, 1918, entitled "An Act to provide for the operation of transportation systems while under Federal control, for the just compensation of their owners and for other purposes," five-sixths of the tax imposed by paragraph (1) of subdivision (a) and four-fifths of the tax imposed by paragraph (2) of subdivision (a) shall be treated as levied by an Act in amendment of Title I of the Revenue Act of 1917. Conditional and Other Exemptions. Sec. 231. That the following organizations shall be exempt from taxation under this title (1) Labor, agricultural, or horticultural organizations; (2) Mutual savings banks not having a capital stock represented by shares; (3) Fraternal beneficiary societies, orders, or associations, (a) perating under the lodge system or for the exclusive benefit of the embers of a fraternity itself operating under the lodge system, and (b) roviding for the payment of life, sick, accident, or other benefits to the embers of such society, order, or association or their dependents; (4) Domestic building and loan associations and cooperative banks without capital stock organized and operated for mutual purposes and without profit; (5) Cemetery companies owned and operated exclusively for the enefit of their members; (6) Corporations organized and operated exclusively for religious, haritable, scientific or educational purposes, or for the prevention of ruelty to children or animals, no part of the net earnings of which nures to the benefit of any private stockholder or individual; (7) Business leagues, chambers of commerce, or boards of trade, ot organized for profit and no part of the net earnings of which inures o the benefit of any private stockholder or individual; (8) Civic leagues or organizations not organized for profit but perated exclusively for the promotion of social welfare; (9) Clubs organized and operated exclusively for pleasure, recretion, and other non-profitable purposes, no part of the net earnings of hich inures to the benefit of any private stockholder or member; (10) Farmers' or other mutual hail, cyclone, or fire insurance comanies, mutual ditch or irrigation companies, mutual or cooperative elephone companies, or like organizations of a purely local character, he income of which consists solely of assessments, dues, and fees colcted from members for the sole purpose of meeting expenses; (11) Farmers', fruit growers', or like associations, organized and perated as sales agents for the purpose of marketing the products of embers and turning back to them the proceeds of sales, less the necesry selling expenses, on the basis of the quantity of produce furnished y them; (12) Corporations organized for the exclusive purpose of holding tle to property, collecting income therefrom, and turning over the ntire amount thereof, less expenses, to an organization which itself exempt from the tax imposed by this title; (13) Federal land banks and national farm-loan associations as rovided in section 26 of the Act approved July 17, 1916, entitled "An ct to provide capital for agricultural development, to create standard orms of investment based upon farm mortgage, to equalize rates of terest upon farm loans, to furnish a market for United States bonds, Net Income Gross Income Insurance Foreign Deductions Business to create Government depositaries and financial agents for the United States, and for other purposes"; (14) Personal service corporations. Net Income Defined. Sec. 232. That in the case of a corporation subject to the tax imposed by section 230 the term "net income" means the gross income as defined in section 233 less the deductions allowed by section 234, and the net income shall be computed on the same basis as is provided in subdivision (b) of section 212 or in section 226. Gross Income Defined. Sec. 233. (a) That in the case of a corporation subject to the tax imposed by section 230 the term "gross income" means the gross income as defined in section 213, except that: (1) In the case of life insurance companies there shall not be included in gross income such portion of any actual premium received from any individual policyholder as is paid back or credited to or treated as an abatement of premium of such policyholder within the taxable year. (2) Mutual marine insurance companies shall include in gross income the gross premiums collected and received by them less amounts paid for reinsurance. (b) In the case of a foreign corporation gross income includes only the gross income from sources within the United States, including the interest on bonds, notes, or other interest-bearing obligations of residents, corporate or otherwise, dividends from resident corporations, and including all amounts received (although paid under a contract for the sale of goods or otherwise) representing profits on the manufacture and disposition of goods within the United States. Deductions Allowed. Sec. 234. (a) That in computing the net income of a corporation subject to the tax imposed by section 230 there shall be allowed as deductions: (1) All the ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or business, includinig a reasonable allowance for salaries or other compensation for personal services actually rendered, and including rentals or other payments required to be made as a condition to the continued use or possession of property to which the corporation has not taken or is not taking title, or in which it has no equity; (2) All interest paid or accrued within the taxable year on its inlebtedness, except on indebtedness incurred or continued to purchase r carry obligations or securities (other than obligations of the United States issued after September 24, 1917) the interest upon which is wholly xempt from taxation under this title as income to the taxpayer, or, n the case of a foreign corporation, the proportion of such interest vhich the amount of its gross income from sources within the United States bears to the amount of its gross income from all sources within nd without the United States; (3) Taxes paid or accrued within the taxable year imposed (a) by he authority of the United States, except income, war profits and exess-profits taxes; or (b) by the authority of any of its possessions, xcept the amount of income, war profits and excess-profits taxes alowed as a credit under section 238; or (c) by the authority of any State or Territory, or any county, school district, municipality, or other axing subdivision of any State or Territory, not including those asessed against local benefits of a kind tending to increase the value of he property assessed; or (d) in the case of a domestic corporation, by he authority of any foreign country, except the amount of income, warrofits and excess-profits taxes allowed as a credit under section 238; r (e) in the case of a foreign corporation, by the authority of any oreign country (except income, war-profits and excess-profits taxes, and taxes assessed against local benefits of a kind tending to increase he value of the property assessed), upon the property or business: Provided, That in the case of obligors specified in subdivision (b) of ection 221 no deduction for the payment of the tax imposed by this itle or any other tax paid pursuant to the contract or provision referred o in that subdivision, shall be allowed; (4) Losses sustained during the taxable year and not compensated or by insurance or otherwise; (5) Debts ascertained to be worthless and charged off within the axable year; (6) Amounts received as dividends from a corporation which is axable under this title upon its net income, and amounts received as ividends from a personal service corporation out of earnings or profits pon which income tax has been imposed by Act of Congress; (7) A reasonable allowance for the exhaustion, wear and tear of roperty used in the trade or business, including a reasonable allowance or obsolescence; (8) In the case of buildings, machinery, equipment, or other facilies, constructed, erected, installed, or acquired, on or after April 6, 917, for the production of articles contributing to the prosecuion of le present war, and in the case of vessels constructed or acquired on or fter such date for the transportation of articles or men contributing > the prosecution of the present war, there shall be allowed a reason Interest Taxes Losses Dividends from a Taxable Corporation Wear and Amortization of Facilities for Carrying on the War |