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TITLE 26-INTERNAL REVENUE CODE SECTION REFERRED TO IN OTHER SECTIONS This section is referred to in section 877 of this title. § 873. Deductions (a) General rule In the case of a nonresident alien individual, the deductions shall be allowed only for pur- poses of section 871(b) and (except as provided by subsection (b)) only if and to the extent that they are connected with income which is effec- tively connected with the conduct of a trade or business within the United States; and the proper apportionment and allocation of the de- ductions for this purpose shall be determined as provided in regulations prescribed by the Secretary. (b) Exceptions The following deductions shall be allowed whether or not they are connected with income which is effectively connected with the conduct of a trade or business within the United States: (1) Losses The deduction, for losses of property not connected with the trade or business if aris- ing from certain casualties or theft, allowed by section 165(c)(3), but only if the loss is of property located within the United States. (2) Charitable contributions The deduction for charitable contributions and gifts allowed by section 170. (3) Personal exemption The deduction for personal exemptions al- lowed by section 151, except that only one ex- emption shall be allowed under section 151 unless the taxpayer is a resident of a contig- uous country or is a national of the United States. (c) Cross references (1) For disallowance of standard deduction, see section 142(b)(1). (2) For rule that certain foreign taxes are not to be taken into account in determining deduction or credit, see section 006(b)(1). (Aug. 16, 1954, ch. 736, 68A Stat. 280; Nov. 13, 1966, Pub. L. 89-809, title I, § 103(c)(1), 80 Stat. 1550; Oct. 27, 1972, Pub. L. 92-580, § 1(b), 86 Stat. 1276; Oct. 4, 1976, Pub. L. 94-455, title XIX, § 1906(b)(13)(A), 90 Stat. 1834.) AMENDMENTS 1976-Subsec. (a). Pub. L. 94-455 struck out "or his delegate" following "Secretary". 1972-Subsec. (b)(3). Pub. L. 92-580 substituted ex- ception that only one exemption be allowed under sec- tion 151 unless the taxpayer is a resident of a contig- uous country or is a national of the United States, for exception that in the case of a non-resident alien indi- vidual who is not a resident of a contiguous country only one exception be allowed under section 151. 1966-Pub. L. 89-809 substituted "connected with income which is effectively connected with the con- duct of a trade or business within the United States" for "connected with income from sources within the United States" in subsec. (a), deleted provisions relat- ing to the deduction of losses not connected with a trade or business but incurred in transactions entered into for profit in subsec. (b), made the casualty loss de- duction available even if the property giving rise to the loss is not effectively connected with the conduct of a trade or business In the United States if the prop- erty is located in this country, made the charitable contribution deduction available even though not re- lated to the trade or business, and added subsec. (c)(2) making a cross reference to section 906(b)(1) for rule that certain foreign taxes are not to be taken Into ac- count in determining deduction or credit. EFFECTIVE DATE OF 1972 AMENDMENT Amendment by Pub. L. 92-580 applicable to taxable years beginning after Dec. 31, 1971, see section 1(c) of Pub. L. 92-580, set out as an Effective Date of 1972 Amendment note under section 152 of this title. EFFECTIVE DATE OF 1966 AMENDMENT Amendment by Pub. L. 89-809 applicable with re- spect to taxable years beginning after Dec. 31, 1966, see section 103(n)(1) of Pub. L, 89-809, set out as an Effective Date of 1966 Amendment note under section 871 of this title. SECTION REFERRED TO IN OTHER SECTIONS This section is referred to in sections 153, 170, 877, 906 of this title. § 874. Allowance of deductions and credits (a) Return prerequisite to allowance A nonresident alien individual shall receive the benefit of the deductions and credits al- lowed to him in this subtitle only by filing or causing to be filed with the Secretary a true and accurate return, in the man;ter prescribed in subtitle F (sec. 6001 and following, relating to procedure and administration), including therein all the information which the Secretary may deem necessary for the calculation of such deductions and credits. This subsection shall not be construed to deny the credits provided by sections 31 and 32 for tax withheld at source or the credit provided by section 39 for certain uses of gasoline, special fuels, and lubricating oil. (b) Tax withheld at source The benefit of the deduction for exemptions under section 151 may, in the discretion of the Secretary, and under regulations prescribed by the Secretary, be received by a non-resident alien individual entitled thereto, by filing a claim therefor with the withholding agent. (c) Foreign tax credit Except as provided in section 906, a nonresi- dent alien individual shall not be allowed the credits against the tax for taxes of foreign countries and possessions of the United States allowed by section 901. (Aug. 16, 1954, ch. 736, 68A Stat. 281; June 21, 1965, Pub. L. 89-44, title VIII, §809(d)(3), 79 Stat. 167; Nov. 13, 1966, Pub. L. 89-809, title I, §§ 103(d), 106(a)(3), 80 Stat. 1551, 1569; May 21, 1970, Pub. L. 91-258, title II, § 207(d)(1), 84 Stat. 248; Oct. 4, 1976, Pub. L. 94-455, title XIX, § 1906(b)(13)(A), 90 Stat. 1834.) AMENDMENTS 1976-Subsecs. (a), (b). Pub. L. 94-455 struck out "or his delegate" following "Secretary". 1970-Subsec. (a). Pub. L. 91-258 included provision against construction of subsec. (a) to deny credit pro- vided by section 39 for certain uses of special fuels. 1966-Subsec. (a). Pub. L. 89-809, 1 103(d), struck out "of his total income received from all sources in the United States" following "true and accurate return". Subsec. (c). Pub. L. 69-809, § 106(a)(3), substituted "Foreign tax credit" for "Foreign tax credit not al- lowed" as the subsection heading and inserted refer- ence to an exception provided in section 906. § 873 Page 566