74TH CONGRESS . SESS. II. CH. 690 . JU NE 22, 1936 .
16 89 because exempt to him under section 115 (f) of the Revenue Act of 1934 or a corresponding provision of a prior Revenue Act . As used in this subsection the term "stock o r securities" inc ludes " stock or s ecuri ties c rights to acquire stock or securities .
."S tock "Amounts distrib- (i) DEFINITION OF PARTIAL LIQUIDATION .-As used in this section ut ed in partial li4ui- the term " amounts distribut ed in partial liq uidation" means a dis- dation" defined . tribution by a corporation in complete cancellation or redemption of a part of its stock, or one of a seri es of distributions in complete cancellation or redemption of all or a p ortion of its stock .
Valuation of divi. (j) VALUATION OF DIVIDEND.-If the whole or any part of a divi- dens . dend is paid to a shareholder in any medium other than money the property received other than money shall be included in gross income at its fair ma rket value at the time as of which it becomes incom e to the shareholder . SEC. 116. EXCLUSIONS F ROM GROSS INCOME .
income usionsfromgross In addition to the items specified in section 22 b) the following Additional it ems tax items shall not be included in gross income and shall be exempt from e~Ante, p .1657 . taxation under this title (a) EARNED INCOME FROM SOURCES WITHOUT UNITED STATES.-In Earned income from sources without United the case of an individual citizen of the United States, a bona fide States . nonresident of the United States for more than six months during the taxabl e year, amounts r eceived from sour ces without the U nited States (except amounts paid by the United States or any agency thereof) if su ch amounts would constitute earned income as define d in section 25 (a) if received from sources within the United States ; 4nre, p. i~U but such individual 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. (b) TEACHERS IN ALASKA AND HAWAII .-In the case of an mdi- Teachers . in Alaska vidual employed by Alaska or Hawaii or any political subdivision and Hawai . thereof as a teacher in any educational institution, the compensation r eceived as such . This subsection shall not exempt compensation d Federal compensa- paid directly or indirectly by the Government of the United States . (C) INCOME OF FO REI GN GOVERNMENTS .-The income of foreign Inc ome of fo re ign b gov ern men ts fro m in- g overnments received from inve stments i n the Unit ed States in vestments in united s tocks, bonds, or other domestic se curities, owned b y such foreign States, etc . governments, or from interest on deposits in banks in the United States of moneys belonging to such foreign governments, or from any other source within the United States . (d) IN COME OF STATES MUNICIPALITIES ETC .-Income derived Incme of States, etc ., >
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from public utilities . from any public utility or the exercise of any essential govern- mental function and accruing to any State, Territory, or the Dis- trict of Columbia, or any political subdivision of a State or Terri- tory, or income accruing to the government of any possession of the United States, or any political subdivision thereof . Wh ene ver an State Territory, or the District of Columbia or If under prior con- y
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tracts for opera tion any political subdivision of a State or Territory, prior to September thereof . 8 191 6, entered in goo d faith into a co ntract with any p erson, the object and purpose of which is to acquire, construct, operate, or m aintain a public utility-
Levy on proceeds (1) If by the terms of such contract the tax imposed by this prior to division thereof title is to be paid out of the proceeds from the operation of such w ith s tate, etc . public utility, prior to any division of such proceeds between the person and the State, Territory, political subdivision, or the Dis trict of Colu mbia , and if, but for the impo siti on of the tax imposed by this title., a part of such proceeds for the taxable year would accrue directly to or for the use of such State, Terri- tory, polit ical subdivision, or the District of Columbia, then a tax upon the net income from the operation of such public utility
