to the amount of such accumulated profits in excess of such income, war profits, and excess profits taxes (other than those deemed paid); and (2) to the extent such dividends are paid by such foreign corporation out of accumulated profits (as defined in subsection (c) (1) (B)) of a year for which such foreign corporation is a less developed country corporation, be deemed to have paid the same proportion of any income, war profits, or excess profits taxes paid or deemed to be paid by such foreign corporation to any foreign country or to any possession of the United States on or with respect to such accumulated profits, which the amount of such dividends bears to the amount of such accumulated profits. (b) Foreign subsidiary of foreign corporation. If such foreign corporation owns 50 percent of more of the voting stock of another foreign corporation from which it receives dividends in any taxable year, it shall be deemed to have paid the same proportion of any income, war profits, or excess profits taxes paid by such other foreign corporation to any foreign country or to any possession of the United States, on or with respect to the accumulated profits of the corporation from which such dividends were paid which (1) for purposes of applying subsection (a) (1), the amount of such dividends bears to the amount of the accumulated profits (as defined in subsection (c) (1) (A)) of such other foreign corporation from which such dividends were paid in excess of such income, war profits, and excess profits taxes, or (2) for purposes of applying subsection (a) (2), the amount of such dividends bears to the amount of the accumulated profits (as defined in subsection (c) (1) (B)) of such other foreign corporation from which such dividends were paid. (c) Applicable rules. (1) Accumulated profits defined. For purposes of this section, the term "accumulated profits" means with respect to any foreign corporation (A) for purposes of subsections (a)(1) and (b) (1), the amount of its gains, profits or income computed without reduction by the amount of the income, war profits, and excess profits taxes imposed on or with respect to such profits or income by any foreign country or any possession of the United States; and (B) for purposes of subsections (a) (2) and (b) (2), the amount of its gains, profits, or income in excess of the income, war profits, and excess profits taxes imposed on or with respect to such profits or income. The Secretary or his delegate shall have full power to determine from the accumulated profits of what year or years such dividends were paid, treating dividends paid in the first 60 days of any year as having been paid from the accumulated profits of the preceding year or years (unless to his satisfaction shown otherwise), and in other respects treating dividends as having been paid from the most recently accumulated gains, profits, or earnings. (2) Accounting periods. In the case of a foreign corporation, the income, war profits, and excess profits taxes of which are determined on the basis of an accounting period of less than 1 year, the word "year" as used in this subsection shall be construed to mean such accounting period. (d) Less developed country corporation defined. For purposes of this section, the term "less developed country corporation" means (1) a foreign corporation which, for its taxable year, is a less developed country corporation within the meaning of section 955(c) (1) or (2), and (2) a foreign corporation which owns 10 percent or more of the total combined voting power of all classes of stock entitled to vote of a foreign corporation which is a less developed country corporation within the meaning of section 955(c) (1), and (A) 80 percent or more of the gross income of which for its taxable year meets the requirements of section 955 (c) (1) (A); and (B) 80 percent or more in value of the assets of which on each day of such year consists of property described in section 955 (c) (1) (B). A foreign corporation which is a less developed country corporation for its first taxable year beginning after December 31, 1962, shall, for purposes of this section, be treated as having been a less developed country corporation for each of its taxable years beginning before January 1, 1963. (e) Cross references. (1) For inclusion in gross income of an amount equal to taxes deemed paid under subsection (a)(1), see section 78. (2) For application of subsections (a) and (b) with respect to taxes deemed paid in a prior taxable year by a United States shareholder with respect to a controlled foreign corporation, see section 960. (3) For reduction of credit with respect to dividends paid out of accumulated profits for years for which certain information is not furnished, see section 6038. (Aug. 16 1954, ch. 736, 68A Stat. 286; Sept. 14, 1960, 1962-Subsec. (a). Pub. L. 87-834 limited provisions which required a domestic corporation owning at least 10 per cent of the voting stock of a foreign corporation from which it receives dividends in any taxable year to be deemed to have paid the same proportion of any income, war profits, or excess profits taxes paid or deemed to be paid by such foreign corporation to any foreign country or to any possession of the United States which the amount of such dividends bears to the amount of accumulated profits to those cases where a foreign corporation paid such dividends out of accumulated profits of a year for which such foreign corporation is a less developed country corporation, and inserted provisions requiring, in the case of a domestic corporation which owns at least 10 percent of the voting stock of a foreign corporation from which it receives dividends in a taxable year, to the extent such dividends are paid by such foreign corporation out of accumulated profits of a year for which such foreign corporation is not a less developed country corporation, to be deemed to have paid the same proportion of any income, war profits, or excess profits taxes paid or deemed to be paid by such foreign corporation to any foreign country or to any possession of the United States on or with respect to such accumulated profits, which the amount of such dividends (determined without regard to section 78) bears to the amount of such accumulated profits in excess of such income, war profits, and excess profits taxes (other than those deemed paid). Subsec. (b). Pub. L. 87-834 substituted "from which such dividends were paid which— "(1) for purposes of applying subsection (a) (1), the amount of such dividends bears to the amount of the accumulated profits (as defined in subsection (c) (1) (A)) of such other foreign corporation from which such dividends were paid in excess of such income, war profits, and excess profits taxes, or "(2) for purposes of applying subsection (a)(2), the amount of such dividends bears to the amount of the accumulated profits (as defined in subsection (c) (1) (B)) of such other foreign corporation from which such dividends were paid" for "from which such dividends were paid, which the amount of such dividends bears to the amount of such accumulated profits." Subsec. (c). Pub. L. 87-834 defined "accumulated profits" for purposes of subsec. (a) (1) and (b)(1) as meaning the amount of its gains, profits, or income computed without reduction by the amount of the income, war profits, and excess profits taxes imposed on or with respect to such profits or income by and foreign country or any possession of the United States, and limited the provisions defining "accumulated profits" as the amount of its gains, profits, or income in excess of the income, war profits, and excess profits taxes imposed on or with respect to such profits or income to subsecs. (a) (2) and (b) (2). Subsec. (d). Pub. L. 87-834 substituted provisions defining "less developed country corporation" for provisions which established special rules for certain whollyowned foreign corporations. Subsec. (e). Pub. L. 87-834 designated existing provisions as par. (3) and added pars. (1) and (2). 1960 Subsec. (e). Pub. L. 86-780 added subsec. (e) Section 9(e) of Pub. L. 87-834 provided that: "The amendments made by this section [adding section 78 of this title and amending this section and sections 535, 545, 861 and 901 of this title] shall apply "(1) in respect of any distribution received by a domestic corporation after December 31, 1964, and "(2) in respect of any distribution received by a domestic corporation before January 1, 1965, in a taxable year of such corporation beginning after December 31, 1962, but only to the extent that such distribution is made out of the accumulated profits of a foreign corporation for a taxable year (of such foreign corporation) beginning after December 31, 1962. For purposes of paragraph (2), a distribution made by a foreign corporation out of its profits which are attributable to a distribution received from a foreign subsidiary to which section 902 (b) applies shall be treated as made out of the accumulated profits of a foreign corporation for a taxable year beginning before January 1, 1963, to the extent that such distribution was paid out of the accumulated profits of such foreign subsidiary for a taxable year beginning before January 1, 1963." EFFECTIVE DATE OF 1960 AMENDMENT Amendment of section by Pub. L. 86-780 applicable to taxable years beginning after Dec. 31, 1960, see section 6(c) of Pub. L. 86-780, set out as a note under section 6038 of this title. § 903. Credit for taxes in lieu of income, etc., taxes. For purposes of this subpart and of sections 164 (a) and 275(a), the term "income, war profits, and excess profits taxes" shall include a tax paid in lieu of a tax on income, war profits, or excess profits otherwise generally imposed by any foreign country or by any possession of the United States. (Aug. 16, 1954, ch. 736, 68A Stat. 287; Feb. 26, 1964, Pub. L. 88-272, title II, § 207(b) (8), 78 Stat. 42.) AMENDMENTS 1964-Pub. L. 88-272 substituted "sections 164(a) and 275(a)" for "section 164(b)." 36-500 0-65-vol. 6- -34 EFFECTIVE DATE OF 1964 AMENDMENT Amendment of section by Pub. L. 88-272 applicable to taxable years beginning after Dec. 31, 1963, see section 207(c) of Pub. L. 88-272, set out as a note under section 164 of this title. § 904. Limitation on credit. In the case of any taxpayer who does not elect the limitation provided by paragraph (2), the amount of the credit in respect of the tax paid or accrued to any foreign country or possession of the United States shall not exceed the same proportion of the tax against which such credit is taken which the taxpayer's taxable income from sources within such country or possession (but not in excess of the taxpayer's entire taxable income) bears to his entire taxable income for the same taxable year. (2) Overall limitation. In the case of any taxpayer who elects the limitation provided by this paragraph, the total amount of the credit in respect of taxes paid or accrued to all foreign countries and possessions of the United States shall not exceed the same proportion of the tax against which such credit is taken which the taxpayer's taxable income from sources without the United States (but not in excess of the taxpayer's entire taxable income) bears to his entire taxable income for the same taxable year. (b) Election of overall limitation. (1) In general. A taxpayer may elect the limitation provided by subsection (a) (2) for any taxable year beginning after December 31, 1960. An election under this paragraph for any taxable year shall remain in effect for all subsequent taxable years, except that it may be revoked with the consent of the Secretary or his delegate with respect to any taxable year. (2) Election after revocation. If a taxpayer has made an election under paragraph (1) and such election has been revoked, such taxpayer shall not be eligible to make a new election under paragraph (1) for any taxable year, unless the Secretary or his delegate consents to such new election. (3) Form and time of election and revocation. An election under paragraph (1), and any revocation of such an election, may be made only in such manner as the Secretary or his delegate may by regulations prescribe. Such an election or revocation with respect to any taxable year may be made or changed at any time before the expiration of the period prescribed for making a claim for credit or refund of the tax imposed by this chapter for such taxable year. (c) Taxable income for purpose of computing limitation. For purposes of computing the applicable limitation under subsection (a), the taxable income in the case of an individual, estate, or trust shall be computed without any deduction for personal exemptions under section 151 or 642(b). (d) Carryback and carryover of excess tax paid. Any amount by which any such tax paid or accrued to any foreign country or possession of the United States for any taxable year beginning after December 31, 1957, for which the taxpayer chooses to have the benefits of this subpart exceeds the applicable limitation under subsection (a) shall be deemed tax paid or accrued to such foreign country or possession of the United States in the second preceding taxable year, in the first preceding taxable year, and in the first, second, third, fourth, or fifth succeeding taxable years, in that order and to the extent not deemed tax paid or accrued in a prior taxable year, in the amount by which the applicable limitation under subsection (a) for such preceding or succeeding taxable year exceeds the sum of the tax paid or accrued to such foreign country or possession for such preceding or succeeding taxable year and the amount of the tax for any taxable year earlier than the current taxable year which shall be deemed to have been paid or accrued in such preceding or subsequent taxable year (whether or not the taxpayer chooses to have the benefits of this subpart with respect to such earlier taxable year). Such amount deemed paid or accrued in any year may be availed of only as a tax credit and not as a deduction and only if taxpayer for such year chooses to have the benefits of this subpart as to taxes paid or accrued for that year to foreign countries or possessions. For purposes of this subsection, the terms "second preceding taxable year" and "first preceding taxable year" do not include any taxable year beginning before January 1, 1958. (e) Carrybacks and carryovers where overall limitation is elected. (1) Foreign taxes to be aggregated for purposes of subsection (d). With respect to each taxable year of the taxpayer to which the limitation provided by subsection (a) (2) applies, the taxes referred to in the first sentence of subsection (d) shall, for purposes of applying such first sentence, be aggregated on an overall basis (rather than taken into account on a per-country basis). (2) Foreign taxes may not be carried from percountry year to overall year or from overall year to per-country year. No amount paid or accrued for any taxable year to which the limitation provided by subsection (a) (1) applies shall (except for purposes of determining the number of taxable years which have elapsed) be deemed paid or accrued under subsection (d) in any taxable year to which the limitation provided by subsection (a) (2) applies. No amount paid or accrued for any taxable year to which the limitation provided by subsection (a) (2) applies shall (except for purposes of determining the number of taxable years which have elapsed) be deemed paid or accrued under subsection (d) in any taxable year to which the limitation provided by subsection (a) (1) applies. (f) Application of section in case of certain interest income. (1) In general. The provisions of subsections (a), (c), (d), and (e) of this section shall be applied separately with respect to (A) the interest income described in paragraph (2), and (B) income other than the interest income described in paragraph (2). (2) Interest income to which applicable. For purposes of this subsection, the interest income described in this paragraph is interest other than interest (A) derived from any transaction which is directly related to the active conduct of a trade or business in a foreign country or a possession of the United States, (B) derived in the conduct of a banking, filnancing, or similar business, (C) received from a corporation in which the taxpayer owns at least 10 percent of the voting stock, or (D) received on obligations acquired as a result of the disposition of a trade or business actively conducted by the taxpayer in a foreign country or possession of the United States or as a result of the disposition of stock or obligations of a corporation in which the taxpayer owned at least 10 percent of the voting stock. (3) Overall limitation not to apply. The limitation provided by subsection (a)(2) shall not apply with respect to the interest income described in paragraph (2). The Secretary or his delegate shall by regulations prescribe the manner of application of subsection (e) with respect to cases in which the limitation provided by subsection (a) (2) applies with respect to income other than the interest income described in paragraph (2). (4) Transitional rules for carrybacks and carry overs. (A) Carrybacks to years prior to Revenue Act of 1962. Where, under the provisions of subsection (d), taxes (i) paid or accrued to any foreign country or possession of the United States in any taxable year beginning after the date of the enactment of the Revenue Act of 1962 are deemed (ii) paid or accrued in one or more taxable years beginning on or before the date of enactment of the Revenue Act of 1962, the amount of such taxes deemed paid or accrued shall be determined without regard to the provisions of this subsection. To the extent the taxes paid or accrued to a foreign country or possession of the United States in any taxable year described in clause (i) are not, with the application of the preceding sentence, deemed paid or accrued in any taxable year described in clause (ii), such taxes shall, for purposes of applying subsection (d), be deemed paid or accrued in a taxable year beginning after the date of the enactment of the Revenue Act of 1962, with respect to interest income described in paragraph (2), and with respect to income other than interest income described in paragraph (2), in the same ratios as the amount of such taxes paid or accrued with respect to interest income described in paragraph (2), and the amount of such taxes paid or accrued with respect to income other than interest income described in paragraph (2), respectively, bear to the total amount of such taxes paid or accrued to such foreign country or possession of the United States. (B) Carryovers to years after Revenue Act of 1962. Where, under the provisions of subsection (d), taxes (i) paid or accrued to any foreign country or possession of the United States in any taxable year beginning on or before the date of the enactment of the Revenue Act of 1962 are deemed (ii) paid or accrued in one or more taxable years beginning after the date of the enactment of the Revenue Act of 1962, the amount of such taxes deemed paid or accrued in any year described in clause (ii) shall, with respect to interest income described in paragraph (2), be an amount which bears the same ratio to the amount of such taxes deemed paid or accrued as the amount of the taxes paid or accrued to such foreign country or possession for such year with respect to interest income described in paragraph (2) bears to the total amount of the taxes paid or accrued to such foreign country or possession for such year; and the amount of such taxes deemed paid or accrued in any year described in clause (ii) with respect to income other than interest income described in paragraph (2) shall be an amount which bears the same ratio to the amount of such taxes deemed paid or accrued for such year as the amount of taxes paid or accrued to such foreign country or possession for such year with respect to income other than interest income described in paragraph (2) bears to the total amount of the taxes paid or accrued to such foreign country or possession for such year. (g) Cross reference. (1) For increase of applicable limitation under subsection (a) for taxes paid with respect to amounts received which were included in the gross income of the taxpayer for a prior taxable year as a United States shareholder with respect to a controlled foreign corporation, see section 960 (b). (2) For special rule relating to the application of the credit provided by section 901 in the case of affiliated groups which include Western Hemisphere trade corporations for years in which the limitation provided by subsection (a) (2) applies, see section 1503(b). (Aug. 16, 1954, ch. 736, 68A Stat. 287; Sept. 2, 1958, Pub. L. 85-866, title I, § 42 (a), 72 Stat. 1639; Sept. 14, 1960, Pub. L. 86-780, § 1, 74 Stat. 1010; Oct. 16, 1962, Pub. L. 87-834, §§ 10(a), 12(b)(2), 76 Stat. 1002, 1031; Feb. 26, 1964, Pub. L. 88-272, title II, § 234(b) (6), 78 Stat. 116.) REFERENCES IN TEXT The date of the enactment of the Revenue Act of 1962, referred to in subsec. (f) (4), means the date of the enactment of Pub. L. 87-834, which was approved on Oct. 16, 1962. AMENDMENTS 1964 Subsec. (g)(2). Pub. L. 88-272 substituted "section 1503(b)" for "section 1503(d).” 1962-Subsec. (f). Pub. L. 87-834, § 10(a), added subsec. (f) and redesignated former subsec. (f) as (g). Subsec. (g). Pub. L. 87-834, §§ 10(a), 12(b)(2), redesignated former subsec. (f) as (g), designated existing provisions as par. (2), and added par. (1). 1960- Subsec. (a). Pub. L. 86-780, § 1(a), designated existing provisions as par. (1), added the introductory clause "In the case of any taxpayer who elects the limitation provided by this paragraph" and inserted the words "foreign", "or possession of the United States" and "or possession" therein and added par. (2). Subsec. (b). Pub. L. 86–780, § 1(a), added subsec. (b). Former subsec. (b) redesignated (c). Subsec. (c). Pub. L. 86-780, § 1(b), redesignated former subsec. (b) as (c) and inserted "applicable" preceding "limitation" therein. Former subsec. (c) redesignated (d). Subsec. (d). Pub. L. 86-780, § 1(c), redesignated former subsec. (c) as (d) and inserted "applicable" preceding "limitation" in two instances therein. Subsecs. (e), (f). Pub. L. 86-780, § 1(d), added subsecs. (e) and (f). 1958 Subsec. (c). Pub. L. 85-866 added subsec. (c). EFFECTIVE Date of 1964 AMENDMENT Amendment of section by Pub. L. 88-272 applicable to taxable years beginning after Dec. 31, 1963, see section 234 (c) of Pub. L. 88-272, set out as a note under section 1503 of this title. EFFECTIVE Date of 1962 AMENDMENT Section 10(b) of Pub. L. 87-834 provided that: “The amendments made by subsection (a) [adding subsec. (f) of this section and redesignating former subsec. (f) as (g)] shall apply with respect to taxable years beginning after the date of the enactment of this Act [Oct. 16, 1962], but only with respect to interest resulting from transactions consummated after April 2, 1962." EFFECTIVE DATE OF 1960 AMENDMENT Section 4 of Pub. L. 86-780 provided that: "The amendments made by the first section [amending this section], section 2 [amending section 1503(d) of this title], and subsection (a) of section 3 of this Act [amending section 901 (a), (b) of this title] shall apply with respect to taxable years beginning after December 31, 1960. The amendment made by subsection (b) of section 3 of this Act [amending section 901(a) of this title] shall apply with respect to taxable years beginning after December 31, 1953, and ending after August 16, 1954. The amendments made by subsection (c) of section 3 of this Act [adding section 6501(i) of this title] shall apply with respect to taxable years beginning after December 31, 1957." EFFECTIVE DATE OF 1958 AMENDMENT Section 42 (c) of Pub. L. 85-866 provided that: “The amendments made by subsections (a) and (b) [adding subsec. (c) of this section and amending section 6611 (g) (h) of this title] shall apply only with respect to taxable years beginning after December 31, 1957." § 905. Applicable rules. (a) Year in which credit taken. The credits provided in this subpart may, at the option of the taxpayer and irrespective of the method of accounting employed in keeping his books, be taken in the year in which the taxes of the foreign country or the possession of the United States accrued, subject, however, to the conditions prescribed in subsection (c). If the taxpayer elects to take such credits in the year in which the taxes of the foreign country or the possession of the United States accrued, the credits for all subsequent years shall be taken on the same basis, and no portion of any such taxes shall be allowed as a deduction in the same or any succeeding year. (b) Proof of credits. The credits provided in this subpart shall be allowed only if the taxpayer establishes to the satisfaction of the Secretary or his delegate (1) the total amount of income derived from sources without the United States, determined as provided in part I, (2) the amount of income derived from each country, the tax paid or accrued to which is claimed as a credit under this subpart, such amount to be determined under regulations prescribed by the Secretary or his delegate, and (3) all other information necessary for the verification and computation of such credits. For purposes of this subpart, the recipient of a royalty or other amount paid or accrued as consideration for the use of, or for the privilege of using, copyrights, patents, designs, secret processes and formulas, trademarks, and other like property, and derived from sources within the United Kingdom of Great Britain and Northern Ireland, shall be deemed to have paid or accrued any income, warprofits and excess-profits taxes paid or accrued to the United Kingdom with respect to such royalty or other amount (including the amount by which the payor's United Kingdom tax was increased by insuch recipient elects to include in its gross income ability to deduct such royalty or other amount) if the amount of such United Kingdom tax. (c) Adjustments on payment of accrued taxes. If accrued taxes when paid differ from the amounts claimed as credits by the taxpayer, or if any tax paid is refunded in whole or in part, the taxpayer shall notify the Secretary or his delegate, who shall redetermine the amount of the tax for the year or years affected. The amount of tax due on such redetermination, if any, shall be paid by the taxpayer on notice and demand by the Secretary or his delegate, or the amount of tax overpaid, if any, shall be credited or refunded to the taxpayer in accordance with subchapter B of chapter 66 (sec. 6511 and following). In the case of such a tax accrued but not paid, the Secretary or his delegate, as a condition precedent to the allowance of this credit, may require the taxpayer to give a bond, with sureties satisfactory to and to be approved by the Secretary or his delegate, in such sum as the Secretary or his delegate may require, conditioned on the payment by the taxpayer of any amount of tax found due on any such redetermination; and the bond herein prescribed shall contain such further conditions as the Secretary or his delegate may require. In such redetermination by the Secretary or his delegate of the amount of tax due from the taxpayer for the year or years affected by a refund, the amount of the taxes refunded for which credit has been allowed under this section shall be reduced by the amount of any tax described in section 901 imposed by the foreign country or possession of the United States with respect to such refund; but no credit under this subpart, and no deduction under section 164 (relating to deduction for taxes) shall be allowed for any taxable year with respect to such tax imposed on the refund. No interest shall be assessed or collected on any amount of tax due on any redetermination by the Secretary or his delegate, resulting from a refund to the taxpayer, for any period before the receipt of such refund, except to the extent interest was paid by the foreign country or possession of the United States on such refund for such period. (Aug. 16, 1954, ch. 736, 68A Stat. 288; Sept. 2, 1958, Pub. L. 85-866, title I, § 103 (b), 72 Stat. 16.) AMENDMENTS 1958 Subsec. (b). Pub. L. 85-866 added sentence deeming recipient of a royalty or other amount for use of copyright, patent, and other like property derived from sources within United Kingdom, to have paid or accrued taxes paid or accrued to United Kingdom with respect to royalty if recipient elects to include in its gross income the amount of such United Kingdom tax. EFFECTIVE DATE OF 1958 AMENDMENT Section 103 (c) of Pub. L. 85-866 provided that: "The amendment made by subsection (a) of this section [to section 131 (e) of Internal Revenue Code of 1939] shall apply for all taxable years beginning on or after January 1, 1950, as to which section 131 of the Internal Revenue Code of 1939 is the applicable provision. The amendment made by subsection (b) of this section [to subsec. (b) of this section] shall apply with respect to taxable years beginning after December 31, 1953, and ending after August 16, 1954. No interest shall be allowed or paid on any overpayment resulting from the amendments made by subsections (a) and (b) of this section." SUBPART B.-EARNED INCOME OF CITIZENS OF UNITED STATES Sec. 911. Earned income from sources without the United States. 912. Exemption for certain allowances. § 911. Earned income from sources without the United States. (a) General rule. The following items shall not be included in gross income and shall be exempt from taxation under this subtitle: (1) Bona fide resident of foreign country. In the case of an individual citizen of the United States who establishes to the satisfaction of the Secretary or his delegate that he has been a bona fide resident of a foreign country or countries for an uninterrupted period which includes an entire taxable year, amounts received from sources without the United States (except amounts paid by the United States or any agency thereof) which constitute earned income attributable to services performed during such uninterrupted period. amount excluded under this paragraph for any taxable year shall be computed by applying the special rules contained in subsection (c). (2) Presence in foreign country for 17 months. The In the case of an individual citizen of the United States who during any period of 18 consecutive months is present in a foreign country or countries during at least 510 full days in such period, amounts received from sources without the United States (except amounts paid by the United States or any agency thereof) which constitute earned income attributable to services performed during such 18-month period. The amount excluded under this paragraph for any taxable year shall be computed by applying the special rules contained in subsection (c). An individual shall not be allowed, as a deduction from his gross income, any deductions (other than |