SEC. 6. (a) Fourth. Losses SEC. 6. (a) Fourth. Losses actually sustained during the actually sustained during the year, incurred in business or year, incurred in business or trade conducted by him within trade conducted by him within the United States, and losses of the United States, and losses of property within the within the United property within the the United States arising from fires, storms, States arising from fires, storms, shipwreck, or other casualty, shipwreck, or other casualty, and and from theft, when such losses from theft, when such losses are are not compensated for by in- not compensated for by insursurance or otherwise: Provided, ance or otherwise: Provided, That for the purpose of ascer- That for the purpose of ascertaining the amount of such loss taining the amount of such loss or losses sustained in trade, or or losses sustained in trade, or speculative transactions not in speculative transactions not in trade, from the same or any trade, from the same or any kind kind of property acquired before of property acquired before March first, nineteen hundred March first, nineteen hundred and thirteen, the fair market and thirteen, the fair market price or value of such property as of March first, nineteen hundred and thirteen, shall be the basis for determining the amount of such loss or losses sustained; SEC. 6. (a) Fifth. In transactions entered into for profit but not connected with his business or trade, the losses actually sustained therein during the year to an amount not exceeding the profits arising therefrom in the United States; SEC. 6. (a) Sixth. Debts arising in the course of business or trade conducted by him within the United States due to the taxpayer actually ascertained to be worthless and charged off within the year; price or value of such property SEC. 6. (a) Fifth. In transactions entered into for profit but not connected with his business or trade, the losses actually sustained therein during the year to an amount not exceeding the profits arising therefrom in the United States; SEC. 6. (a) Sixth. Debts arising in the course of business or trade conducted by him within the United States due to the taxpayer actually ascertained to be worthless and charged off within the year; SEC. 6. (a) Seventh. A reason- SEC. 6. (a) Seventh. A reasonable allowance for the exhaus- able allowance for the exhaustion, wear and tear of property tion, wear and tear of property within the United States arising within the United States arising out of its use or employment in out of its use or employment in the business or trade; (a) in the the business or trade; (a) in the case of oil and gas wells a rea- case of oil and gas wells a reasonable allowance for actual re- sonable allowance for actual reduction in flow and production duction in flow and production to be ascertained not by the flush to be ascertained not by the flush flow, but by the settled produc- flow, but by the settled production or regular flow; (b) in the tion or regular flow; (b) in the case of mines a reasonable al-case of mines a reasonable allow- | lowance for depletion thereof ance for depletion thereof not not to exceed the market value to exceed the market value in in the mine of the product there- the mine of the product thereof of which has been mined and which has been mined and sold sold during the year for which during the year for which the the return and computation are return and computation are. Act of 1913. Act of 1924. Act of 1921. Act of 1918. ITEMS NOT DEDUCTIBLE. SEC. 215. (a) In computing net income no deduction shall in any case be allowed in respect of (1) Personal, living, or family expenses; (2) Any amount paid out for new buildings or for permanent improvements or betterments made to increase the value of any property or estate; (3) Any amount expended in restoring property or in making good the exhaustion thereof for which an allowance is or has been made; or (4) Premiums paid on any life insurance policy covering the life of any officer or employee, or of any person financially interested in any trade or business carried on by the taxpayer, when the taxpayer is directly or indirectly a beneficiary under such policy. SEC. 215. (b) Amounts paid under the laws of any State, Territory, District of Columbia, ITEMS NOT DEDUCTIBLE. SEC. 215. (a) That in computing net income no deduction shall in any case be allowed in respect of (1) Personal, living, or family expenses; (2) Any amount paid out for new buildings or for permanent improvements or betterments made to increase the value of any property or estate; (3) Any amount expended in restoring property or in making good the exhaustion thereof for which an allowance is or has been made; or (4) Premiums paid on any life insurance policy covering the life of any officer or employee or of any person financially interested in any trade or business carried on by the taxpayer, when the taxpayer is directly or indirectly a beneficiary under such policy. SEC. 215. (b) Amounts paid under the laws of any State, Territory, District of Columbia, ITEMS NOT DEDUCTIBLE. SEC. 215. That in computing net income no deduction shall in any case be allowed in respect of (a) Personal, living, or family expenses; (b) Any amount paid out for new buildings or for permanent improvements or betterments made to increase the value of any property or estate; (c) Any amount expended in restoring property or in making good the exhaustion thereof for which an allowance is or has been made; or (d) Premiums paid on any life insurance policy covering the life of any officer or employee, or of any person financially interested in any trade or business carried on by the taxpayer, when the taxpayer is directly or indirectly a beneficiary under such policy. 144 Title I, Part III, Act of 1916, as amended by Sec. 1211, Title XII, Act of 1917. Act of 1917. made, such reasonable allowance to be made in the case of both (a) and (b) under rules and regulations to be prescribed by the Secretary of the Treasury: Provided, That when the allowance authorized in (a) and (b) shall equal the capital originally invested, or in case of purchase made prior to March first, nineteen hundred and thirteen, the fair market value as of that date, no further allowance shall be made. No deduction shall be allowed for any amount paid out for new buildings, permanent improvements, or betterments, made to increase the value of any property or estate, and no deduction shall be made for any amount of expense of restoring property or making good the exhaustion thereof for which an allowance is or has been made. SEC. 6. (b) There shall also be allowed the credits specified by subdivisions (b) and (c) of section five. Act of 1916. made, such reasonable allowance to be made in the case of both (a) and (b) under rules and regulations to be prescribed by the Secretary of the Treasury: Provided, That when the allowance authorized in (a) and (b) shall equal the capital originally invested, or in case of purchase made prior to March first, nineteen hundred and thirteen, the fair market value as of that date, no further allowance shall be made. No deduction shall be allowed for any amount paid out for new buildings, permanent improvements, or betterments, made to increase the value of any property or estate, and no deduction shall be made for any amount of expense of restoring property or making good the exhaustion thereof for which an allowance is or has been made. SEC. 6. (b) There shall also be allowed the credits specified by subdivisions (b) and (c) of section five. Act of 1913. Act of 1924. possession of the United States, or foreign country as income to the holder of a life or terminable interest acquired by gift, bequest, or inheritance shall not be reduced or diminished by any deduction for shrinkage (by whatever name called) in the value of such interest due to the lapse of time, nor by any deduction allowed by this Act for the purpose of computing the net income of an estate or trust but not allowed under the laws of such State, Territory, District of Columbia, possession of of the United States, or foreign country for the purpose of computing the income to which such holder is entitled. Act of 1921. possession of the United States, or foreign country as income to the holder of a life or terminable interest acquired by gift, bequest, or inheritance shall not be reduced or diminished by any deduction for shrinkage (by whatever name called) in the value of such interest due to the lapse of time, nor by any deduction allowed by this Act for the purpose of computing the net income of an estate or trust but not allowed under the laws of such State, Territory, District of Columbia, possession of the United States, or foreign country for the purpose of computing the income to which such holder is entitled. Act of 1918. CREDITS ALLOWED INDIVIDUALS. SEC. 216. For the purpose of the normal tax only there shall be allowed the following credits: (a) The amount received as dividends (1) from a domestic corporation other than a corporation entitled to the benefits of section 262,146 and other than a corporation organized under the China Trade Act, 1922, or (2) from a foreign corporation when it is shown to the satisfaction of the Commissioner that more than 50 per centum of the gross income of such foreign corporation for the three-year period ending with the close of its taxable year preceding the declaration of such dividends (or for such part of such period as the corporation has been in existence) was derived from sources within the United States as determined under the provisions of section 217; SEC. 216. (b) The amount received as interest upon obligations of the United States which is included in gross income under section 213;148 145 Sec. 9 (e), p. 151. 146 (a) Sec. 262, p. 268. CREDITS ALLOWED INDIVIDUALS. SEC. 216. That for the purpose of the normal tax only there shall be allowed the following credits: (a) The amount received as dividends (1) from a domestic corporation other than a corporation entitled to the benefits of section 262,146 or (2) from a foreign corporation when it is shown to the satisfaction of the Commissioner that more than 50 per centum of the gross income of such foreign corporation for the three-year period ending with the close of its taxable year preceding the declaration of such dividends (or for such part of such period as the corporation has been in existence) was derived from sources within the United States as determined under the provisions of section 217; CREDITS ALLOWED. SEC. 216. That for the purpose of the normal tax only there shall be allowed the following credits: (a) The amount received as dividends from a corporation which is taxable under this title upon its net income, and amounts received as dividends from a personal service corporation out of earnings or profits upon which income tax has been imposed by Act of Congress; SEC. 216. (b) The amount re- SEC. 216. (b) The amount received as interest upon obliga- ceived as interest upon obligations of the United States and tions of the United States and bonds issued by the War Fi- bonds issued by the War Finance nance Corporation, which is in- Corporation, which is included cluded in gross income under in gross income under section section 213;148 146 (b) Sec. 216 (a) of the Act of 1921, amended by the Act of Sept. 19, 1922, by inserting after the 213;148 word and figures "section 262" a comma and the words and other than a corporation organized under the China Trade Act, 1922." 147 The Act of 1913 was not "wanting in due process Act of 1917. joint-stock company or association, or insurance company, or in computing the profits of such partnership for the purposes of subdivision (e) of section nine. '’145 Act of 1916. Act of 1913. CREDITS ALLOWED. SEC. 5. (b) For the purpose of the normal tax only, the income embraced in a personal return shall be credited with the amount received as dividends upon the stock or from the net earnings of any corporation, joint-stock company or association, trustee, or insurance company, which is taxable upon its net income as hereinafter provided; SEC. 5. (c) A like credit shall be allowed as to the amount of income, the normal tax upon which has been paid or withheld for payment at the source of the income under the provisions of this title. CREDITS ALLOWED. SEC. 5. (b) For the purpose of the normal tax only, the income embraced in a personal return shall be credited with the amount received as dividends upon the stock or from the net earnings of any corporation, joint-stock company or association, trustee, or insurance company, which is taxable upon its net income as hereinafter provided; SEC. 5. (c) A like credit shall be allowed as to the amount of income, the normal tax upon which has been paid or withheld for payment at the source of the income under the provisions of this title. B. [13] seventh, the amount received as dividends14 upon the stock or from the net earnings of any corporation, jointstock company, association, or insurance company which is taxable upon its net income as hereinafter provided; B. [14] eighth, the amount of income, the tax upon which has been paid or withheld for payment at the source of the income, under the provisions of this section, provided that whenever the tax upon the income of a person is required to be withheld and paid at the source as hereinafter required, if such annual income. does not exceed the sum of $3,000 or is not fixed or certain, or is indefinite, or irregular as to amount or time of accrual, the same shall not be deducted in the personal return of such per son. of law" in permitting individuals but not corporations to deduct from gross income dividends received from corporations taxed under the Act. Brushaber v. U. P. R. R. Co., (1916) 240 U. S. 1; Stanton v. Baltic 148 Sec. 213, p. 74. |