Page:United States Statutes at Large Volume 48 Part 1.djvu/714

 688 73d C ONGRESS. SESS. II. CH. 277 . MAY 10, 1934 . INCOME TAX. (6) MINISTERS .-The rental value of a dwelling house and appur- COMPUTATION OF NET IN COM E- tenances thereof furnished to a minister of the gospel as part of Contd. Minister's dwelling . his co mpens ation ; Miscellaneous items. (7) MISCE LLAN EOUS ITEMS .-The following items, to the extent Post, p. 712. provided in section 116 Earned income from sources wit ho ut the United States ; Salaries of certain Territorial employees ; The income of foreign governments ; Income of States, municipalities, and other political subdivi- sions ; Rec eipt s of shi pown ers' mut ual prot ecti on and i ndem nity associations ; Dividends from China Trade Act corporations. Inventories, to deter- mine income. (C) INVENTORIEs .-Whenever in the opinion of the Commissioner . the use of inventories is necessary in order clearly to determine the income of any taxpayer, inventories shall be taken by such taxpayer upon su ch basis as the Commissi oner, wi th the a pproval of the S ecre- tary, may prescribe as conforming as nearly as may be to the best acc ou nti ng practice in the trade or business and as most clearly reflecting the income. Distributions by cor- (d) DISTRIBUTIONS BY CoR.PORATIONs .-Distributions by corpora- p0 stpP . 711. tions shall be taxable to the shareholders as provided in section 115. Determination of (e) DETERMINATION OF GAIN OR Loss .-I n the c ase ofa s ale or gain or loss in sale of property. other d ispositi on of pr operty, the gain or loss shall b e comput ed as Post, p. 703. provide d in sec tion 111. Sources within and (f) GROSS INCOME FROM SOURC ES WIT HIN ITHIN AND WITHOUT UNITED w ithout Unite d Stat es. Post, p. 716. STATES .-For computation of gross income fr om sources within and without the United States, see section 119. Deductions from SEC. 23. DEDUCTIONS FROM GROSS INCOME. gross income. Business expenses. Traveling included. Interest on debts. E xcepti ons. Taxes generally. Exceptions. In computing net income there shall be allowed as deductions (a) EXPENSES .-All the ordinary and n ecessa ry ex pense s paid or incurred during the taxable year in carrying on any trade or business, including a reasonable allowance for salaries or other compensation for personal services actually rendered ; traveling expenses (includ- ing the entire amount expended for meals and lodging) while awa y from home in the pursuit of a trade or business ; and rentals or other payments required to be made as a condition to the continued 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 acc ru ed within the taxable year on indebtedness, except on indebtedness incurred or continued to purchase or carry obligations (other than obligations of the United States issued after September 24, 1917, and originally sub- scribed for by the taxpayer) the interest upon which is wholly exempt from the taxes i mposed b y this t itle. (c) TAXES GENERALLY.-Taxes paid or accrued within the taxable year, except- (1) Federal income, war-prof its, and excess-p rofits t axes ; (2income, war-profits, and excess-profits taxes imposed by the authority of any foreign country or possession of the United States but this deduction shall be allowed in the case of a taxpayer who does not signify in his return his desire to have to any extent the benefits of section 131 (relating to credit for taxes of foreign coun- tries and possessions of the United States) ; (3) estate, inheritance, legacy, succession, and gift taxes ; and