Page:United States Statutes at Large Volume 49 Part 1.djvu/1703

1658 Federal instrumen- talities . Federal obligations, etc. Statement required in returns . Federal obligations issued after September 1, 1917 . Payment for personal injuries or sickness. Mi nis ter 's dwelling. Inco me exempt un- der treaty. Miscellaneous items . Post, P. 1689. Inventories, to deter- mi ne income. Distributions by cor- poratio ns . Post, p. 1687 . Determination of gain or loss in sale, etc., of prop erty . Post, p.1678. So ur ces within and without United States . Post, p. 1693. De duct ions from gr oss income . Business expenses. 74TH CO NGRESS . SESS. II. C13 . 690 . JUNE 22, 1936 . District of Columbia ; or (B) obligations of a corporation organ- ized under Act of Congress, if such corporation is an instru- mentality of the United States ; or (C) the obligations of the United States or its possessions . Every person owning any of the obligations enumerated in clause (A), (B), or (C) shall, in the return required by this title, submit a statement showing the num ber and amount of such obligations ow ned by him and the income received therefrom, in such form and with such informa- tion as the Commissioner may require . In the case of obligations of the United States issued after September 1, 1917 (other than postal savings certificates of deposit) and in the case of obliga- tions of a corporation orga nized under Act of Congress, the interest 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 SIC K N E S S . - A m o u n t s received, through accident or health insurance or under work- men's compensation acts, as compensation for personal injuries or sickness, plus the amount of any damages received whether by suit or agreement on account of such injuries or sickness ; (6) MIN IST ERS -T he ren tal va lue of a dwe lli ng hou se and appurtenances thereof furnished to a minister of the gospel as part of his compensation ; (7) INCOME EXEMPT UNDER TREA TY .- Income of any kind, to the extent required by any treaty obligation of the United States ; (8) MISCELLANEOUS ITEMS .-The following items, to the extent provided in section 116 : Earned income from sources without the United States ; Salaries of certain Territorial employees ; The income of foreign governments ; Income of States, municipalities, and other p oliti cal subdivisions ; Receipts of shipowners' mutual protection and indemnity associations ; Dividends from China Trade Act corporations ; Compensation of employees of foreign governments . (c) INVENToRrzs .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 such basis as the Commissioner, with the approval of the Secr etary, may pre scribe as con forming as ne arly as may be to th e best accounting practice in the trade or business and as most clearly reflecting the income . (d) DISTRIBUTIONS BY CORPORATIONS . -Di stri but ion s by co rpo ra- tions shall be taxable to the shareholders as provided in section 115 . (e) DETERMINATION OF GAIN OR Loss .In the case of a sale or other disposition of property, the gain or loss shall be computed as provided in section 111 . (f) GROSS INCOME FROM SOURCES WITHIN AND WITHOUT UNITED STATES.-FOr computation of gross income from sources within and without the United States, see section 119 . SEC. 23. DED UC TIO NS FRO M GRO SS INCOME . In computing net income there shall be allowed as deductions (a) EXPENSES . -All th e ordin ary an d neces sary ex penses paid o r incurred during the taxable year in carryinon any trade or busi- nes s, inc luding a reaso nable allowan ce for -salaries or other com-