Page:United States Statutes at Large Volume 78.djvu/126

 84

26^us?*6/i-6*83.

26 "s^ 1231.

PUBLIC LAW 88-272-FEB. 26, 1964

[78 STAT.

(lesigiiated (by name or by description) as the one to i^erform, such services. "(8) ESTATES AXD TRUSTS.—Amounts inchidible in computing the taxable income of the corporation mider part I of subChapter J (sec. 641 and following, relating to estates, trusts, and beneficiaries). "(1) ORDINARY GROSS INCOME.—The term 'ordinary gross income' means the gross income determined by excluding— " (A) all gains from the sale or other disposition of capital assets, and " (B) all gains (other than those referred to in subparagraph (A)) from the sale or other disposition of property described in section 1231(b). "(2) ADJUSTED ORDINARY (JROSS INCOME.—The term 'adjusted ordinary gross income' means the ordinary gross income adjusted as follows: " (A) RENTS.—From the gross income from rents (as defined in the second sentence of paragraph (3) of this subsection) subtract the amount allowable as deductions for— "(i) exhaustion, wear and tear, obsolescence, and amortization of property other than tangible personal property which is not customarily retained by any one lessee for more than three years, "(ii) property taxes, "(iii) interest, and "(iv) rent, to the extent allocable, under regulations prescribed by the Secretary or his delegate, to such gross income from rents. The amount subtracted under this subparagraph shall not exceed such gross income from rents. " (B) MINERAL ROYALTIES, ETC.—From the gross income from mineral, oil, and gas royalties described in paragraph (4), and from the gross income from working interests in an oil or gas well, subtract the amount allowable as deductions for— " (i) exhaust ion, wear and tear, obsolescence, amortization, and depletion, "(ii) property and se\erance taxes, "(iii) interest, and "(iv) rent, to the extent nllocable, under regulations prescribed by the Secretary or his delegate, to such gross income from royalties or such gross income from working interests in oil or gas wells. The amount subtracted under this subparagraph with respect to royalties shall not exceed the gross income from such royalties, and the amount subtracted under this subparagraph with respect to working interests shall not exceed the gross income from such working interests. " (C) INTEREST.—There shall be excluded—" (i) interest received on a direct obligation of the United States held for sale to customers in the ordinary course of trade or business by a regular dealer who is making a primary market in such obligations, and "(ii) interest on a condemnation award, a judgment, and a tax refund. "(3) ADJUSTED INCOME FROM RENTS.—The term 'adjusted income from rents' means the gross income from rents, reduced by the amount subtracted under paragraph (2)(A) of this subsecticm.
 * ' (b) DEFINITIONS.—For purposes of this part—

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