d "Taxable income" (C) DEFINITION OF "TAXABLE INCOME".-AS used in this section, the le ined. term "taxable income" means the amount of the net income in excess Pow,p. 1092. of the credits against net income provided in section 9 of this title. Exemptions. (d) EXEMPTIONS FROM TAx. -There shall be exempt from taxation under this title the following organizations: Corporations, including any community chest, fund, foundation, cemetery, association, teachers' retirement fund association, church, or club, organized and operated exclusively for religious, charitable, scientific, literary, edu- cational, or social purposes, or for the prevention of cruelty to chil- dren or animals, no part of the net earnings of which inures to the benefit of any private shareholder or individual and no substantial part of the activities of which is carrying on propaganda, or other- wise attempting to influence legislation; and labor organizations, trade associations, boards of trade, chambers of commerce, citizens' associations or organizations, not organized for profit and no part of the net earnings of which inures to the benefit of any private share- holder or individual; banks, insurance companies, building and loan associations, and companies, incorporated or otherwise, which guar- antee the fidelity of any individual or individuals, such as bonding companies, all of which pay taxes upon gross premiums or earnings voluntary em- under existing laws of the District of Columbia; voluntary employees' associations. beneficiary associations providing for the payment of life, sick, acci- dent, or other benefits to the members of such association or their dependents, if (1) no part of their net earnings inures (other than such payments) to the benefit of any private shareholder or indi- vidual, and (2) 85 per centum or more of the income consists of amounts collected from members for the sole purpose of making such Federal instrumen- payments and meeting expenses; and corporations organized under talities. Act of Congress, if such corporations are instrumentalities of the United States. "Net income" de- fined. NET INCOME SEC. 3. DEFNITrrION.-T he term "net income" means the gross income of a taxpayer less the deductions allowed by this title. GRoss INCOME AND EXCLUSIONS THEREFROM ndividuals.mecon SEC. 4. (a) OF INDIVIDUALS.- The words "gross income", as used strued. in this title, include gains, profits, and income derived from salaries, wages, or compensation for personal services of whatever kind and in whatever form paid, including salaries, wages, and compensation paid by the United States to its officers and employees to the extent the same is not immune from taxation under the Constitution, or income derived from professions, vocations, trades, businesses, commerce, or sales or dealings in property, whether real or personal, growing out of the ownership, or use of, or interest in, such property; also from rent, royalties, interest, dividends, securities, or transactions of any business carried on for gain or profit, or gains or profits, and income derived from any source whatever. Corporations. (b) OF CORPORATIONS.-In the case of any corporation, gross income includes only the gross income from sources within the District of Columbia. The proper apportionment and allocation of income with respect to sources of income within and without the District may be determined by processes or formulas of general apportionment under rules and regulations prescribed by the Commissioners. Exclusions from (C) EXCLUSIONS FROM GROSS INCOME.- The following items shall roscome. not be included in gross income and shall be exempt from taxation under this title: Lifeinsrance. (1) LIFE nsSUnRANCE. -Amounts received under a life-insur- ance contract paid by reason of the death of the insured, whether 1088 PUBLIC LAWS-CH. 367--JULY 26, 1939 [53 STAT. iI
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