Page:United States Statutes at Large Volume 47 Part 1.djvu/203

 72d CONGRESS. SESS. I. CH. 209. JUNE 6,1932 . 179 issue thereof as amended and supplemented, and shall be excluded IN COME TAX from gross income only if and to the extent it is wholly exempt to the taxpayer from th e taxes' imposed by this title ; 5 ODIPENSATION FOR INJURIES OR SICKNESS .-Amounts received Pa yme nt for per so nal injuries or sickness. thr ough accid ent o r heal th in suran ce or under work men's compe n- sation acts, as compensation for personal injuries or sickness, plus the amount of any damages received whether by suit or agreement on account of such injuries or sickness ; (6) MINIsTERs .--The rental value of a dwelling house and appu rtenance s thereo f furnis hed to a ministe r of the gospel a s part of his compensation ; (7) MISCELLANEOUS ITEMS :The following items, to the extent provided in section 116 : Earned income from sources without the United States ; Salarie s of cer tain Ter ritorial employe es ; The income of foreign governments ; Incom e of State s, mun icipa litie s and other poli tical subdi - visions ; Receipts of shipown ers' mutual protection and ass oci atio ns ; Dividends from China Trade Act corporations. (c) INVENTORIES .-Whenever in the opinion of the Commissioner t he use o f invent ories is necessa ry in or der clear ly to de termine the income of any taxpayer, inventories shall be taken by such taxpayer upon such basis as the Commissioner, with the approval of the Secre- tary, may prescribe as conforming as nearly as may be to the best accounting practice in the trade or business and as most cle arly reflecting the income. (d) DISTRIBUTIONS BY CORPORATIONS .-Distributions by corpora- tions shall be taxable to the shareholders as provided in section 115. (e) DETERM INATION OF GA IN OR Loss.-In the case of a sale or other disposition of property, the gain or loss shall be computed as provided in sections 111, 112, and 113. (f) GROSS INCOME FROM SOURCES WITHIN AND WITHOUT UNITED STATES.-For computation of gross income from sources within and without the United States, see section 119. SEC. 23. DEDU CTIO NS F ROM GROS S INC OME. In computing net income there shall be allowed as deductions (a) EXPENSES .-All the ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or busi- ness, including a reasonable allowance for salaries or other compen- sation for personal services actually rendered ; traveling expenses (including the entire amount expended for meals and lodging) while away from home in the pursuit of a trade or business ; and rentals or other payments required to be made as a condition to the con- tinued use or possession, for purposes of the trade or business, of property to which the taxpayer has not taken or is not taking title or in which he has no equity. (b) INTEREST .-All interest paid or accrued within the taxable year on indebtedness, except (1) on indebtedness incurred or con- tinued to purchase or carry obligations or securities (other than obligations of the United States issued after September 24, 1917, anti o riginall y subscr ibed for by the taxpayer ) the int erest up on which is wholly exempt f rom the t axes imp osed by this tit le, or ( 2) on in debt- e dness incu rred or con tinue d in connec tion with the pu rchas ing o r carrying of an annuity. Rent of ministers' dwelling. Miscellaneous items. Post, p. 204 . indemnity Invent ories to deter . mi ne income. Distributions by cor- porations. Post, p. 203 . Determination of gain or loss on sale of property. Post, pp. 195, 196, 198. Sources within and without United States. Post, p. 208. Deductions from gr oss income . Items specified. Business expenses. Tra vel, etc ., in. eluded. Interest on debts. Exceptions.