Act of 1924. person, the object and purpose of which is to acquire, construct, operate, or maintain a public utility (A) If by the terms of such contract the tax imposed by this title is to be paid out of the proceeds from the operation of such public utility, prior to any division of such proceeds between the person and the State, Territory, political subdivision, or the District of Columbia, and if, but for the imposition 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, Territory, political subdivision, or the Dis trict of Columbia, then a tax upon the net income from the operation of such public utility shall be levied, assessed, collected, and paid in the manner and at the rates prescribed in this title, but there shall be refunded to such State, Territory, political subdivision, or the District of Columbia, (under rules and regulations to be prescribed by the Commissioner with the approval of the Secretary) an amount which bears the same relation to the amount of the tax as the amount which (but for the imposition of the tax imposed by this title) would have accrued directly to or for the use of such State, Territory, political subdivision, or the District of Columbia, bears to the amount of the net income from the operation of such public utility for such taxable year. (B) If by the terms of such contract no part of the proceeds from the operation of the public utility for the taxable year would, irrespective of the tax imposed by this title, accrue directly to or for the use of such State, Territory, political subdivision, or the District of Columbia, then the tax upon the net income of such person from the operation of such public utility shall be levied, assessed, collected, and paid in the man Act of 1921. any person, the object and purpose of which is to acquire, construct, operate, or maintain a public utility, no tax shall be levied under the provisions of this title upon the income derived from the operation of such public utility, so far as the payment thereof will impose a loss or burden upon such State, Territory, District of Columbia, or political subdivision; but this provision is not intended and shall not be construed to confer upon such person any financial gain or exemption or to relieve such person from the payment of a tax as provided for in this title upon the part or portion of such income to which such person is entitled under such contract; Act of 1918. any person, the object and purpose of which is to acquire, construct, operate, or maintain a public utility, no tax shall be levied under the provisions of this title upon the income derived from the operation of such public utility, so far as the payment thereof will impose a loss or burden upon such State, Territory, District of Columbia, or political subdivision; but this provision is not intended to confer upon such person any financial gain or exemption or to relieve such person from the payment of a tax as provided for in this title upon the part or portion of such income to which such person is entitled under such contract; Act of 1917. Act of 1916. Act of 1913. has, prior to the passage of this tory, has, prior to the passage of cal subdivision of a State or title, entered in good faith into this title, entered in good faith Territory, has, prior to the pasa contract with any person or into a contract with any person sage of this Act, entered in good corporation, the object and pur- or corporation, the object and faith into a contract with any pose of which is to acquire, con- purpose of which is to acquire, person or corporation, the object struct, operate, or maintain a construct, operate, or maintain and purpose of which is to acpublic utility, no tax shall be a public utility, no tax shall be quire, construct, construct, operate or levied under the provisions of levied under the provisions of maintain a public utility, no tax this title upon the income de- this title upon the income de- shall be levied under the provirived from the operation of such rived from the operation of such sions of this Act upon the inpublic utility, so far as the pay- public utility, so far as the pay- come derived from the operation ment thereof will impose a loss ment thereof will impose a loss of such public utility, so far as or burden upon such State, Ter- or burden upon such State, Ter- the payment thereof will impose ritory, or the District of Colum-ritory, or the District of Colum- a loss or burden upon such State, bia, or a political subdivision of bia, or a political subdivision of Territory, or the District of Coa State or Territory; but this a State or Territory; but this lumbia, or a political subdiviprovision is not intended to provision is not intended to con- sion of a State or Territory; but confer upon such person or cor- fer upon such person or corpo- this provision is not intended to poration any financial gain or ration any financial gain or confer upon such person or corexemption or to relieve such per- exemption or to relieve such per- poration any financial gain or son or corporation from the pay-son or corporation from the pay- exemption or to relieve such perment of a tax as provided for in son or corporation from the paythis title upon the part or porment of a tax as provided for in tion of the said income to which this section upon the part or such person or corporation shall portion of the said income to be entitled under such contract. which such person or corporation shall be entitled under such contract. ment of a tax as provided for in SEC. 213. (b) (10) The amount SEC. 213. (b) (10) So much of received by an individual before the amount received by an inJanuary 1, 1927, as dividends dividual, after December 31, or interest from domestic build- 1921, and before January 1, ing and loan associations, sub- 1927, as dividends or interest stantially all the business of which is confined to making loans to members, but the amount excluded from gross income under this paragraph in any taxable year shall not exceed $300; SEC. 213. (b) (11) The rental value of a dwelling house and appurtenances thereof furnished to a minister of the gospel as part of his compensation; SEC. 213. (b) (12) The receipts of shipowners' mutual protection and indemnity associations, not organized for prof from domestic building and loan SEC. 213. (b) (11) The rental value of a dwelling house and appurtenances thereof furnished to a minister of the gospel as part of his compensation; SEC. 213. (b) (12) The receipts of shipowners' mutual protection and indemnity associations, not organized for profit, SEC. 213. (b) (8) So much of the amount received during the present war by a person in the military or naval forces of the United States as salary or compensation in any form from the United States for active services in such forces, as does not exceed $3,500. Act of 1924. it, and no part of the net earnings of which inures to the benefit of any private share holder; but such corporations shall be subject as other persons to the tax upon their net income from interest, dividends, and rents; SEC. 213. (b) (13) In the case of an individual, amounts distributed as dividends to or for his benefit by a corporation organized under the China Trade Act, 1922, if, at the time of such distribution, he is a citizen of China, resident therein, and the equitable right to the income of the shares of stock of the corporation is in good faith vested in him. SEC. 213. (c) In the case of a nonresident alien individual, gross income means only the gross income from sources within the United States, determined under the provisions of section 217.124 DEDUCTIONS ALLOWED INDIVIDUALS. SEC. 214. (a) In computing net income there shall be allowed as deductions: (1) All the ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or business, DEDUCTIONS ALLOWED INDI VIDUALS. SEC. 214. (a) That in computing net income there shall be allowed as deductions: (1) All the ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or business, 123 Sec. 213 (b) of the Act of 1921, amended by the Act of Sept. 19, 1922, by striking out the period at the end of paragraph (12) thereof and inserting in lieu thereof a semicolon, and by adding after paragraph (12) a new paragraph to read as follows: 66 (13) In the case of an individual, amounts distributed as dividends to or for his benefit by a corporation organized under the China Trade Act, 1922, if, at the time of such distribution, he is a citizen of China, resident therein and the equitable right to the income of the shares of stock of the corporation is in good faith vested in him." 124 Sec. 217, p. 120. DEDUCTIONS ALLOWED SEC. 214. (a) That in computing net income there shall be allowed as deductions: (1) All the ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or 125 The provisions in the Act of 1913 permitting deductions by individuals for the purpose of the normal tax but not for the additional tax, were not wanting in due process of law." Brushaber v. U. P. R. R. Co., (1916) 240 U. S. 1. 126 (a) Alimony paid a divorced wife under order of court was not deductible from the gross income of the husband under the Act of 1913. Gould v. Gould, (1917) 245 U. S. 151. 126 (b) Attorney's fees paid in litigation involving certain corporate stock, which resulted in practically the ownership or control thereof and the consequent management of the company, constituted a capital ex |