Page:United States Statutes at Large Volume 47 Part 1.djvu/202

 178 72d CONGRESS. SESS. I. CH. 209. JUNE 6, 1932 . IN COME TAX Com pu tat ion of net Part II-Computation of Net Income income. SEC. 21. NET INC OME. M gay. "Net income" means the gross income computed under section 22, less the deductions allowed by section 23. Gross income. SEC. 22. GROSS INCOME. General definition. ( a,) GENERAL DEFINITION. "Gross income" includes gains, profits, and inco me deriv ed from salaries, wages, or compe nsation for per- sonal service, of whatever kind and in whatever form paid, or from professions, vocations, trades businesses, commerce, or sales, or deal- ings in property, whether real o r personal, grow ing out of the ow ner- ship or use of o r interest in su ch property ; also from interest, rent, divi dend s, secu riti es, or the tra nsac tion of any bu sine ss c arr ied on for gain or profit, or gains or profits and income derived from any Comp ensa tion of source whatever. In the case of Presidents of the United States and Presidents, judges. judges of courts of the United S tates taking off ice after the dat e of the enactment of this Act, the c ompensation rece ived as such shal l be included in gross income ; and all Acts fixing the compensation of such Pre sidents and judg es are h ereby am ended acc ordingly. Items exempt from taxation, (b) E XCLUSIONS FROM GROSS INCOME .-The following items shall not be i ncluded in gross income and shal l be exem pt from taxation under this title Life insurance. (1) LIFE INSURANCE .-Amounts received under a life insurance contract paid by reason of the death of the insured, whether in a single' s um or in instal lments (but if s uch amounts are h eld by the insurer under an agreement to pay interest thereon, the interest payments shall be included in gross income) ; Amounts fr om an- (2) ANNUITIES, ETc .-Amounts received (other t han amounts nuit ies . paid by reason of the death of the insured and interest payments on such amounts) under a life insurance, endowment, or annuity contract, but if such amounts (when added to amounts received before the taxable year under such contract) exceed the aggregate Transfers for value, premiums or consideration paid (whether or not paid during the taxable year) then the excess shall be included in gross income. In the case of a transfer for a valuable consideration, by assignment or otherwise, of a life insurance, endowment, or annuity contract, or any interest therein, only the actual value of such consideration and the amo unt of t he premi ums and other su ms subse quently paid by t he trans feree sh all be e xempt fr om taxati on under paragra ph (1) or this paragraph ; Value of gifts, etc (3) GIFTS, BEQUESTS, AND DEVISES.-The value of property acquired by gift, bequest, devise, or inheritance (but the income from such property shall be included in gross income) bonds, Inter est s etc . on State state (4) TAX-FREE INTEREST .-Interest upon (A) the obligations of a State, Territory, or any political subdivision thereof, or the District Farm loan securities. o f C ol umb ia ; or (B) securit ies issued under the provisions o f the Federal Farm Loan Act, or under the provisions of such Act as amended ; or (C) the obligations of the United States or its pos- etc. Fe der al obligations, Sessions. Every person owning' any of the obligations or securities Statement required enumerated in clause (A), (B), or (C) shall, in the return required m returns. b y this tit le, subm it a sta tement s howing th e number and amo unt of such obligations and securities owned by him and the income received therefrom, in such form and with such information as the ert Minas, etc .n Lib- Commissioner may require. In the case of obligations of the Uni ted Stat es issue d after Septembe r 1, 191 7 (other than po stal savings certificates of deposit), the interest shall be exempt only if and to the extent provided in the respective Acts authorizing the