SUBCHAPTER A-INCOME TAX

PART 1-INCOME TAX; TAXABLE YEARS BEGINNING AFTER DECEMBER 31,

1953

1.2 Statutory provisions; tax in case of joint return or return of surviving spouse.

1.2-1 Tax in case of joint return of husband and wife or the return of a surviving

spouse.

1.2-2 Definition of surviving spouse.

1.3 Statutory provisions; optional tax if adjusted gross income is less than $5,000.

1.3-1 Application of optional tax.

1.4 Statutory provisions; rules for optional tax.

1.4-1

1.4-2

1.4-3

Number of exemptions.

Elections.

Husband and wife filing separate returns.

1.4-4 Short taxable year caused by death.

1.5 Statutory provisions; cross references relating to tax on individuals.

1.12 Statutory provisions; cross references relating to tax on corporations.

CHANGES IN RATES DURING A TAXABLE YEAR

1.21 Statutory provisions; effect of changes.

1.21-1 Changes in rate during a taxable year.

CREDITS AGAINST TAX

CREDITS ALLOWABLE

1.31 Statutory provisions; tax withheld on wages.

1.31-1

1.31-2

Credit for tax withheld on wages.

Credit for "special refunds" of employee social security tax.

1.32 Statutory provisions; tax withheld at source on nonresident aliens and foreign

corporations and on tax-free covenant bonds.

1.33 Statutory provisions; taxes of foreign countries and possessions of the United

States.

1.34 Statutory provisions; dividends received by individuals.

1.34-1 Credit against tax and exclusion from gross income in case of dividends

received by individuals.

1.34-2

1.34-3

1.34-4

Limitations on amount of credit.

Dividends to which the credit and exclusion apply.

Taxpayers not entitled to credit and exclusion.

1.34-5 Effective date; taxable years ending after July 31, 1954, subject to the In-

ternal Revenue Code of 1939.

1.34-6 Dividends received after December 31, 1964.

1.35 Statutory provisions; partially tax-exempt interest received by individuals.

1.35-1 Partially tax-exempt interest received by individuals.

1.35-2

Taxpayers not entitled to credit.

Sec.

1.36 Statutory provisions; credits not allowed to individuals paying optional tax or taking standard deduction.

1.37 Statutory provisions; retirement income.

1.37-1 Allowance of credit for retirement income.

1.37-2

1.37-3

Eligibility for retirement income credit.
Retirement income.

1.37-4 Limitation on amount of retirement income.

1.37-5 Illustration of application of section 37.

1.38 Statutory provisions; investment in certain depreciable property.

1.38-1 Investment in certain depreciable property.

1.39

Statutory provisions; overpayments of tax.

RULES FOR COMPUTING CREDIT FOR INVESTMENT IN CERTAIN DEPRECIABLE PROPERTY 1.46 Statutory provisions; amount of credit.

1.46-1

1.46-2

Determination of amount.

Carryback and carryover of unused credit.

1.46-3 Qualified investment.

1.46-4

Limitations with respect to certain persons.

1.47 Statutory provisions; certain dispositions, etc., of section 38 property.

1.47-1 Recomputation of credit allowed by section 38.

1.47-2 "Disposition" and "cessation".

1.47-3 Exceptions to the application of § 1.47-1.

1.47-4 Electing small business corporation.

1.47-5 Estates and trusts.

1.48-4 1.48-5

Election of lessor of new section 38 property to treat lessee as purchaser.
Electing small business corporations.

1.48-6 Estates and trusts.

1.48-7 Adjustment to basis.

COMPUTATION OF TAXABLE INCOME

DEFINITION OF GROSS INCOME, ADJUSTED GROSS INCOME, AND TAXABLE INCOME 1.61 Statutory provisions; gross income defined.

1.61-1 Gross income.

1.61-2

Compensation for services, including fees, commissions, and similar items. 1.61-3 Gross income derived from business.

1.61-4 Gross income of farmers.

1.61-5

Allocations by cooperative associations; per-unit retain certificates-tax treatment as to cooperatives and patrons.

1.61-6 Gains derived from dealings in property.

1.61-10 Alimony and separate maintenance payments; annuities; income from life insurance and endowment contracts.

1.61-12 Income from discharge of indebtedness.

1.61-13 Distributive share of partnership gross income; income in respect of a decedent; income from an interest in an estate or trust.

1.61-14 Miscellaneous items of gross income.

1.61-15 Options received as payment of income.

1.62 Statutory provisions; adjusted gross income defined.

1.62-1

1.63

Adjusted gross income.

Statutory provisions; taxable income defined.

ITEMS SPECIFICALLY INCLUDED IN GROSS INCOME

1.71 Statutory provisions; alimony and separate maintenance payments.

1.71-1 Alimony and separate maintenance payments; income to wife or former wife. 1.71-2 Effective date; taxable years ending after March 31, 1954, subject to the Internal Revenue Code of 1939.

Sec.

1.72

Statutory provisions; annuities; certain proceeds of endowment and life insurance contracts.

Investment in the contract.

1.72-6

1.72-7

Adjustment in investment where a contract contains a refund feature.

1.72-8 Effect of certain employer contributions with respect to premiums or other consideration paid or contributed by an employee.

1.72-9

1.72-10

1.72-11

Tables.

Effect of transfer of contracts on investment in the contract.
Amounts not received as annuity payments.

1.72-12 Effect of taking an annuity in lieu of a lump sum upon the maturity of a contract.

1.72-13 Special rule for employee contributions recoverable in three years.

1.72-14

Exceptions from application of principles of section 72.

1.72-15 Applicability of section 72 to accident or health plans.

1.72-16 Life insurance contracts purchased under qualified employee plans. 1.72-17 Special rules applicable to owner-employees.

1.72-18 Treatment of certain total distributions with respect to self-employed

individuals.

1.73 Statutory provisions; services of child.

1.73-1 Services of child.

1.74 Statutory provisions; prizes and awards.

1.74-1 Prizes and awards.

1.75 Statutory provisions; dealers in tax-exempt securities.

1.75-1 Treatment of bond premiums in case of dealers in tax-exempt securities.

1.76 Statutory provisions; mortgages made or obligations issued by joint-stock land banks.

1.77 Statutory provisions; commodity credit loans.

1.77-1 Election to consider Commodity Credit Corporation loans as income. 1.77-2 Effect of election to consider commodity credit loans as income.

1.78 Statutory provisions; dividends received from certain foreign corporations by domestic corporations choosing foreign tax credit.

1.78-1 Dividends received from certain foreign corporations by certain domestic corporations choosing the foreign tax credit.

1.79 Statutory provisions; group-term life insurance purchased for employees. 1.79-1 General rules relating to group-term life insurance purchased for employees.

1.79-2 Exceptions to the rule of inclusion.

1.79-3 Determination of amount equal to cost of group-term insurance.

ITEMS SPECIFICALLY EXCLUDED FROM GROSS INCOME

1.101 Statutory provisions; certain death benefits.

1.101-1 Exclusion from gross income of proceeds of life insurance contracts payable by reason of death.

1.101-2 Employees' death benefits.

1.101-3

Interest payments.

1.101-4 Payment of life insurance proceeds at a date later than death.

1.101-5 Alimony, etc., payments.

1.101-6 Effective date.

1.102 Statutory provisions; gifts and inheritances.

1.102-1 Gifts and inheritances.

1.103 Statutory provisions; interest on certain governmental obligations.

1.103-1 1.103-2

Interest upon obligations of a State, Territory, etc.

Dividends from shares and stock of Federal agencies or instrumentalities.

1.103-3 Interest upon notes secured by mortgages executed to Federal agencies or instrumentalities.

1.103-4 Interest upon United States obligations.

1.103-5 Treasury bond exemption in the case of trusts or partnerships.

1.103-6 Interest upon United States obligations in the case of nonresident aliens and foreign corporations, not engaged in business in the United States.

Sec.

1.104 Statutory provisions; compensation for injuries or sickness.

1.104-1 Compensation for injuries or sickness.

1.105 Statutory provisions; amounts received under accident and health plans. 1.105-1 Amounts attributable to employer contributions.

1.105-2 Amounts expended for medical care.

1.106 Statutory provisions; contributions by employer to accident and health

plans.

1.106-1 Contributions by employer to accident and health plans.

1.107 Statutory provisions; rental value of parsonages.

1.107-1 Rental value of parsonages.

1.108(a) Statutory provisions; income from discharge of indebtedness; special rule of exclusion.

1.108(a)-1 Income from discharge of indebtedness.

1.108(a)-2 Making and filing of consent.

1.108(b) Statutory provisions; income from discharge of indebtedness; railroad

corporations.

1.108(b)-1 Income from discharge of indebtedness of railroad corporations. 1.109 Statutory provisions; improvements by lessee on lessor's property.

1.109-1 Exclusion from gross income of lessor of real property of value of improvements erected by lessee.

1.110 Statutory provisions; income taxes paid by lessee corporation.

1.110-1 Income taxes paid by lessee corporation.

1.111 Statutory provisions; recovery of bad debts, prior taxes, and delinquency amounts.

1.111-1 Recovery of certain items previously deducted or credited.

1.112 Statutory provisions; certain combat pay of members of the Armed Forces. 1.112-1 Compensation of members of the Armed Forces of the United States for service in a combat zone during an induction period, or for service while hospitalized as a result of such combat-zone service.

1.113 Statutory provisions; mustering-out payments for members of the Armed Forces.

1.113-1 Mustering-out payments for members of the Armed Forces.

1.114 Statutory provisions; sports programs conducted for the American National Red Cross.

1.114-1 Proceeds from certain sports programs conducted for the benefit of the American National Red Cross.

1.115 Statutory provisions; income of States, municipalities, etc.

1.115-1 Bridges to be acquired by State or political subdivisions.

1.116 Statutory provisions; partial exclusion of dividends received by individuals. 1.116-1

Partial exclusion of dividends.

1.116-2 Effective date; taxable years ending after July 31, 1954, subject to the Internal Revenue Code of 1939.

1.117 Statutory provisions; scholarships and fellowship grants.

1.117-1

1.117-2

1.117-3

Exclusion of amounts received as a scholarship or fellowship grant.
Limitations.

Definitions.

1.117-4 Items not considered as scholarships or fellowship grants.

1.118 Statutory provisions; contributions to the capital of a corporation.

1.118-1 Contributions to the capital of a corporation.

1.119 Statutory provisions; meals or lodging furnished for the convenience of the employer.

1.119-1 Meals and lodging furnished for the convenience of the employer.

1.120 Statutory provisions; statutory subsistence allowance received by police.

1.120-1 Statutory subsistence allowance received by police.

1.121 Statutory provisions; gain from sale or exchange of residence of individual who has attained age 65.

1.121-1 Gain from sale or exchange of residence of individual who has attained age 65.

1.121-2 Limitations.

Sec.

1.121-3

1.121-4

1.121-5

Definitions.
Election.

Special rules.

1.122 Statutory provisions; cross references to other acts.

STANDARD DEDUCTION FOR INDIVIDUALS

1.141 Statutory provisions; standard deduction.

1.141-1 Standard deduction.

1.142 Statutory provisions; individuals not eligible for standard deduction. 1.142-1 Husband and wife.

1.142-2 Standard deduction not allowable.

1.143 Statutory provisions; determination of marital status.

1.143-1 Determination of marital status.

1.144 Statutory provisions; election of standard deduction.

1.144-1 Manner and effect of election to take the standard deduction. 1.144-2 Change of election with respect to the standard deduction. 1.144-3 Standard deduction for individuals choosing income averaging. 1.145 Statutory provisions; cross reference.

DEDUCTIONS FOR PERSONAL EXEMPTIONS

1.151 Statutory provisions; allowance of deductions for personal exemptions. 1.151-1 Deductions for personal exemptions.

1.152-1

General definition of a dependent.

1.152-2 Rules relating to general definition of dependent.

1.152-3 1.153 1.153-1

Multiple support agreements.

Statutory provisions; determination of marital status.
Determination of marital status.

1.154 Statutory provisions; cross references.

1.161

ITEMIZED DEDUCTIONS FOR INDIVIDUALS AND CORPORATIONS

Statutory provisions; allowance of deductions.

1.161-1 Allowance of deductions.

1.162-17 Reporting and substantiation of certain business expenses of employees. 1.162-18 Improper payments to officials or employees of foreign countries.

1.162-19 Capital contributions to Federal National Mortgage Association.

1.162-20 Expenditures attributable to lobbying, political campaigns, attempts to influence legislation, etc., and certain advertising.

1.163 Statutory provisions; interest.

1.163-1

1.163-2

Interest deduction in general.

Installment purchases where interest charge is not separately stated.

1.163-3 Deduction for bond discount.

1.164 Statutory provisions; taxes. 1.164-1 Deduction for taxes.

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