73d C ONGRESS . SESS. II. CH. 277. MAY 10, 1934 . in gross income ; and all A cts fixi ng the comp ensa tion of such Presidents and judges are hereby amended acco rding ly . (b) EXCLUSIONS FROM GR OSS INCOME .- The fo llowi ng it ems sh all not be included in gross income and shall be exempt from taxation tinder this title : (1) Liar; INS UR ANC E .-Am ounts recei ved u nder a life insu rance contract paid by reason of the death of the insured, whether in a single sum or otherwise (but if such amounts are held by the insurer under an agreement to pay interest thereon, the interest payments shall be included in gross income) ; (2) ANNUITIES, ETC.-Amounts received (other than amounts paid by reason of the death of the insured and interest payments on su ch am oun ts and oth er th an am ou nts received as annuities) tinder a life insurance or endowment contract, but if such amounts (when added to am ou nts received before the taxable year under such contract) exceed the aggregate premiums or consideration paid (whether or not paid during the taxable year) then the excess shall be included in gross income . Amounts received as an annuity under an annuity or endowment contract shall be included in gross income ; except that there shall be excluded from gross income the excess of the amount received in the taxable year over an amount equal to 3 per centum of the aggregate premiums or consideration pa id for such annuity (whether or not paid during such year), until the aggregate amount excluded from gross income under th is title or prior income tax laws in respect of such annuity equals the aggre gate premiu ms or consideration paid for such annuity . In the case of a transfer for a valuable consideration, by assignment or otherwise, of a life insurance, endowment, or annuity contract, or any interest therein, only the actual value of such consideration and the amount of the premiums and other sums subsequently paid by the transferee shall be exempt from taxation under paragraph (1) or this paragraph ; (3) GIFTS, BEQUESTS, AND DEVISES .-The value of pro perty acquired by gift, bequest, devise, or inheritance (but the income from such property shall be included in gross income)
(4) TAX-FREE INTEREST .-Interest upon (A) the obliga tions of a State, Territory, or any political subdivision thereof, or the District of Columbia ; or (B) obligations of a corporation organ- ized under Act of Congress, if such corporation is an instrumen- tality of the United States ; or (C) the obligations of the United States or its possessions. Eve ry per son ow ning any of the obligations enumerated in clause (A ), ( B), or (C) shall, in the return required by this title, submit a statement showing the number and amount of such obligations owned by him and the income received therefrom, in such form and with such information as the Commissioner may require . In the case of obligations of the United States issued af ter September 1, 1917 (othe r than postal savings certificates of deposit) and in the case of obligations of a c orpor ation organ ized under Act of Congress, the inter est shall be exempt only if and to the extent provided in the respective Acts authorizing the issue thereof as amended and supplemented, and shall be excluded from gross income only if and to the extent it is wholly exempt from the taxes imposed by this title
(5) COMPENSATION FOR INJURIES OR SICKNESS .-Amounts received, through accident or health insurance or under workmen' s com- pensatio n acts, as compe nsation for pers onal inju ries or sickness , plus the amount of any damages received whether by suit or agreement on account of such injuries or sickness ; 687 INCOME TAX . COMPUTATION OF NET INCOME- Contd . Exclusions from gross income . Life insur ance . Annuities, etc Portion to be in- cluded in gross income. Transfers for value . Value of gift s, etc . Tax-free interest . State, etc ., bonds . Fede ral instr u- mentalities . Federal obligations, etc . Statement required in returns . Federal obligations issued after Septem- ber 1, 1917 . Payment for personal injuries or sickness.
