Page:United States Statutes at Large Volume 68A.djvu/64

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INTERNAL REVENUE CODE OF 1954

(4) the annuity starting date is January 1, 1954, or the first day of the first period for which the surviving annuitant received an amount under the contract as an annuity, whichever is the later, (j) INTEREST.—Notwithstanding any other provision of this section, if any amount is held under an agreement to pay interest thereon, the interest payments shall be included in gross income, (k) PAYMENTS IN DISCHARGE OF ALIMONY.—

(1) IN GENERAL.—This section shall not apply to so much of any payment under an annuity, endowment, or life insurance contract (or any interest therein) as is includible in the gross income of the wife under section 71 or section 682 (relating to income of an estate or trust in case of divorce, etc.). (2) CROSS REFERENCE.—

For definition of "wife", see section 7701(a) (17). (1) FACE-AMOUNT CERTIFICATES.—For purposes of this section, the term "endowment contract" includes a face-amount certificate, as defined in section 2(a) (15) of the Investment Company Act of 1940 (15 U.S.C. sec. 80a-2), issued after December 31, 1954. (m) CROSS R E F E R E N C E. — For limitation on adjustments to basis of annuity contracts sold, see section 1021. SEC. 73. SERVICES OF CHILD. (a) TREATMENT OF AMOUNTS RECEIVED.—Amounts received in re-

spect of the services of a child shall be included in his gross income and not in the gross income of the parent, even though such amounts are not received by the child. (b) TREATMENT OF EXPENDITURES.—All expenditures by the parent or the child attributable to amounts which are includible in the gross income of the child (and not of the parent) solely by reason of subsection (a) shall be treated as paid or incurred by the child. (c) PARENT D E F I N E D. — For purposes of this section, the term " p a r e n t " includes an individual who is entitled to the services of a child by reason of having parental rights and duties in respect of the child. (d) CROSS R E F E R E N C E. — For assessment of tax against parent in certain cases, see section 6201 (c). SEC. 74. PRIZES AND AWARDS. (a) GENERAL RULE. — E x c e p t as provided in subsection (b) and in

section 117 (relating to scholarships and fellowship grants), gross income includes amounts received as prizes and awards. (b) EXCEPTION.—Gross income does not include amounts received as prizes and awards made primarily in recognition of religious, charitable, scientific, educational, artistic, literary, or civic achievement, but only if— (1) the recipient was selected without any action on his part to enter the contest or proceeding; and (2) the recipient is not required to render substantial future services as a condition to receiving the prize or award.

§72(1)(4)

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