year on notes, bonds, etc., if good and collectible at the end of the year, should be returned whether collected or not. 7 Int. Rev. Rec. 59. See 41 U. S. Rev. Journ. 97.

That where an absolute deed was taken instead of a mortgage, and an agreement given to reconvey upon the payment of a certain sum equal to the loan with interest, the transaction was equivalent to a mortgage, and the gain to the lender must be returned. 3 Int. Rev. Rec. 140.

That interest should be considered as income only when paid, unless collectible and remaining unpaid by consent of the creditor. Bout. (1863), 274.

That scrip dividends returnable as income should be returned at their market value. 7 Int. Rev. Rec. 60.

That dividends payable in the income year should be returned as income for that year, no matter when declared. Bout. (1863), 274.

That if a corporation took any of its earnings and added them to the working capital and then made a new division of stock, the stockholders were to pay a tax on the additional stock; and if, on the other hand, it divided to all its stockholders its net earnings during the year, and after so doing gave to each stockholder two certificates for one held before,

there was no liability for such additional certificate except upon the dividend, and that there was no tax on a nominal increase. 1 Int. Rev. Rec. 188.

That such portions of a stock dividend as were made up of earnings acquired before July 1, 1862, were not to be returned. 2 Int. Rev. Rec. 61. See 1 Int. Rev. Rec. 155.

That a person who would be entitled to a share in the profits of a company, etc., if divided, should return the same as income, whether divided or otherwise. 7 Int. Rev. Rec. 60. See Collector v. Hubbard, 12 Wall. 1. See also 41 Int. Rev. Rec. 98.

That profits of companies accruing in the income year were liable to be returned; but if there was a division and no surplus remained at the end of the income year, only the amount divided should be returned. 1 Int. Rev. Rec. 180.

That profits of a gas company carried to construction account should be returned as income by the stockholders; and undistributed earnings of a corporation made before September, 1862, should not be considered as income of the stockholders, nor should the corporation be required to make return as trustee. 3 Int. Rev. Rec. 164.

That depositors receiving interest from sav

ings banks described in the proviso to § 110 of the act of 1864 were required to return the same. 11 Int. Rev. Rec. 73.

That the owner of a ship was to return as income the entire earnings received in 1862 from the completed voyage and was not to return as income for 1862 earnings received from a voyage completed in 1863. The tax on whalers was to be assessed on the total yield on the termination of the voyage. Bout. (1863), 303.

As to rents, it was held under the old lawThat the rental value of property occupied by the owner was neither to be included in his income nor deducted. 1 Int. Rev. Rec. 171. See Ibid. 130.

That a party renting his own house and paying rent elsewhere must return the rent received, and was to be allowed to deduct the amount of the rent paid. 4 Int. Rev. Rec. 46; 5 Int. Rev. Rec. 154. For a case where land was leased for years under a contract that the lessee should erect a building and the expense of erecting the building was held to be in the nature of rent, and returnable by the lessor, see 7 Int. Rev. Rec. 60.

That where one cultivated the land of another under a contract to pay for the use in produce, it was rent and should be returned,

and the expenses were to be deducted from the income of the lessee only. 7 Int. Rev. Rec. 60.

That under the act of 1894 rents were not taxable as income. 41 U. S. Rev. Journ. 109.

Points of practice as to the taxpayer entering the dividends upon his return, etc., are set forth in 10 Int. Rev. Rec. 9.

Transaction of any lawful business carried on for gain or profit.

It was held under the old Acts

That a taxpayer was to return as income all profits from sale of stocks made within the year, though bought previously. United States v. Smith, 1 Sawy. 277; 12 Int. Rev. Rec. 135. As to the liability of stockholders to pay on dividends or other income paid to them by their corporations, see Stockdale v. Ins. Cos., 20 Wall. 323; Merchants' Ins. Co. v. McCartney, 1 Lowell, 447; 12 Int. Rev. Rec. 122; Magee v. Denton, 5 Blatch. 130.

Gains or profits and income derived from any source whatever, including the income from but not the value of property acquired by gift, bequest, devise, or descent.

Promissory notes, book accounts, etc., due during the year are evidences of debt. Whether

or not they are "gains, profits, or income" for that year within the statute depends upon their value intrinsically, or their convertibility into money, property, or available assets. If they have only a nominal, and not a real, value of convertible quality, and a man has realized nothing from them, and therefore does not return them as a part of his income, because he fairly and honestly believes they are not real gains or profits, he cannot be convicted of an untrue return. United States v. Frost, 9 Int. Rev. Rec. 41.

It was held under the old acts

That legatees were not required to return their legacies. Bout. (1863), 275.

That pensions from the government must be returned. Bout. 274; 4 Int. Rev. Rec. 45.

That incomes from coal mines were to be returned, and no deductions were to be made on account of diminished value, actual or supposed, of the coal vein or bed by mining. Bout. (1863), 274.

That the payment of a legacy, etc., tax on the bequest of an annuity did not relieve the annuitant from liability on his income. 7 Int. Rev. Rec. 60.

That where any portion of a legacy had been transferred by the executor to the legatee, so that the former had no control of the profits,