Page:United States Statutes at Large Volume 48 Part 1.djvu/738

 712 73d C ONGRESS. SESS. II. CH. 277. MAY 10, 1934. INCO ME TAX. were taxab le in accor dance with the p rovis ions of sec tion 218 of OF NET INCOME- the Revenue Act of 1918 or section 218 of the Revenue Act of 1921 . Contd. shall be exempt from tax to the distributees. Stock dividends not (f) ST OCK DIVIDENDS.--A stock dividend shall not be subject to taxable. tax. Redemption of stock (g) REDEMPTION OF STOCK.--If a corporation cancels or redeems proceeds. its stock (whether or not such stock was issued as a stock dividend) at such time and in such manner as to make the distribution and cancellation or redemption in whole or in part essentially equiva- lent to the distribution of a taxable dividend, the amount so dis- tributed in redemption or cancellation of the stock, to the extent that its 1 represents a distribution of earnings or profits accumulated after February 28, 1913, shall be treated as a taxable dividend. Distribution of stock (h) DISTRIBUTION OF STOCK ON REORGANIZATION-EJm CT ON on reorganization. Effect on future dis- FUTURE DisTRIBuTioNs .-T he distribution before Ja nu ary 1, 1934, tributions. in pursuance of a plan of reorganization, by or on behalf of a cor- poration a party to the reorganization, of its stock or securities or stock or securities in a corporation a party to the reorganization, if no gain to the distributes from the receipt of such stock or securi- ties was recognized by law, shall not be considered a distribution of earnings or profits within the meaning of this section for the pur- pose of determining the taxability of subsequent distributions by the corporation. As used in this subsection, the terms " reorgan iza- tion " and " party to the reorganization " shall have the meanings Vol. 47, p.196. assigned to such terms in section 112 of the Revenue Act of 1932. Defini tion of p artial (i) DEFIN ITION O F PARTI AL LIQUIDATION .--AS used in this section liquid ation. the term " amounts distributed in partial liquidation " means a dis- trib ution by a corpo ration in complet e cancel lation o r redemp tion of a part of its stock, or one of a series of distributions in complete cancellation or redemption of all or a portion of its stock. Exclusions from gross SEC. 116. EXCLUSIONS FROM GROSS INCOME. income. Additional items ex ° In addition to the items specified in section 22(b), the following eA , P tax. items shall not be included in gross income and shall be exempt from taxation under this title Earned income from (a) EARNED INCOME FROM SOURCES WITHOUT UNITED STATES .-In sources without United States. the case of an individual citizen of the United States, a bona fide nonr eside nt of the U nited State s for more than six m onths durin g the taxable year, amounts received from sources without the United States (except amounts paid by the United States or any agency Ante, p. 692. thereof) if such amounts would constitute earned income as defined in section 25(a) if received from sources within the United States ; but such indivi dual shall not be allowed as a deduction from his gross income any deductions properly allocable to or chargeable against amounts excluded from gross income under this subsection. Teachers in Alaska (b) TEACHERS IN ALASKA AND HAWAII .-In the case of an indi- and Hawaii . vidu al em ployed by A laska or Ha waii or an y poli tical subd ivisio n thereof as a teacher in any educational institution, the compensation received as such. This subsection shall not exempt compensation pa id directly or indirectly by the Government of the United States. Inc ome of for ei gng ov- (C) INCOME OF FO RE IGN GOVERNMENTS.-The income of foreign ernments from invest- mentsin United S tates, g overnmen ts recei ved from investme nts in t he Unite d States in etc. stocks, bonds, or other domestic securities, owned by such foreign gove rnmen ts, or from inte rest o n dep osits in banks in the Unite d States of moneys belonging to such foreign governments, or from any other source within the United States. Income of States, etc., (d) IN COME OF STAT ES, MUNI CIPA LITI ES, ETC .-In com e d eri ved from public utilities. from any public utility or the exercise of any essential governmental function and accruing to any State, Territory, or the District of ~So in original.