REGULATIONS 74

RELATING TO THE

INCOME TAX

UNDER THE

REVENUE ACT OF 1928

Table of Contents___

Division I. Introductory Provisions (Sections 1–4; Article 1).

II. General Provisions (Sections 11-65; Articles 11-451) - - - - - -
III. Supplemental Provisions (Sections 101-322; Articles
501-1257)---

Page

V-XXIV

1-2

3-139

140-324

CONTENTS

DIVISION I-INTRODUCTORY PROVISIONS

TITLE I-INCOME TAX

SUBTITLE A-INTRODUCTORY PROVISIONS

[The section numbers refer to the Revenue Act of 1928 and the article numbers to Regulations 74]

12. Normal tax on individual citizens or residents of the

United States__

3

13. Citizens or residents of the United States liable to tax.

14. Who is a citizen..

4

4

Section 22 (a). Gross income: General definition..

Article 51. What included in gross income..

52. Compensation for personal services_-

53. Compensation paid other than in cash..

54. Compensation paid in notes__

Page

9

9

10

55. Gross income from business..

56. State contracts___.

57. Gross income of farmers..

58. Sale of stock and rights___

59. Sale of patents and copyrights_-

60. Sale of good will...

61. Sale of real property in lots..

62. Annuities and insurance policies..

63. Improvements by lessees_.

64. Forgiveness of indebtedness_.

65. Creation of sinking fund by corporation__

66. Sale by corporation of its capital stock_.

67. Contributions to corporation by shareholders-

68. Sale and retirement by corporation of its bonds.

69. Sale of capital assets by corporation_-_.

70. Income to lessor corporation from leased property.

71. Gross income of corporation in liquidation_____

Gross income: Exclusions from gross income_

Section 22 (b).

Article 81. Exclusions from gross income.--.

10

11

11

11

11

13

15

15

16

16

16

17

17

17

18

18

19

19

20

20

21

82. Proceeds of insurance-Compensation-Pensions....

83. Gifts and bequests---

84. Interest upon State obligations..

2222

23

23

85. Dividends and interest from Federal land banks, Federal

intermediate credit banks, and national farm-loan asso-

ciations__..

89. Liberty loan bond exemption in the case of trusts or part-

nerships-----

26

90. Interest upon United States obligations in the case of

nonresident aliens and certain foreign organizations----

91. Income accrued prior to March 1, 1913_

26

26

Section 22 (c).

Section 22 (d).

Section 22 (e).

Section 22 (f).

Gross income: Inventories_

Article 101. Need of inventories__

102. Valuation of inventories_

103. Inventories at cost.

104. Inventories at market_

105. Inventories by dealers in securities__

106. Inventories of live stock raisers and other farmers__.

107. Inventories of miners and manufacturers..

108. Inventories of retail merchants...

Gross income: Distributions by corporations___

Gross income: Determination of gain or loss_ _ _ _

Gross income: Gross income from sources within

and without United States___.

27

27

28

29

30

31

31

33

33

34

34

34

Section 23 (a).

Deductions from gross income: Expenses__

Article 121. Business expenses--

123. Cost of materials.

124. Repairs__ _ _ _

122. Traveling expenses_

125. Professional expenses---

127. Treatment of excessive compensation.

126. Compensation for personal services..

128. Bonuses to employees- - - -

129. Pensions-Compensation for injuries _ _

130. Rentals__

131. Expenses of farmers..

132. Depositors' guaranty fund_

Section 23 (b). Deductions from gross income: Interest_

Article 141. Interest..

Section 23 (c). Deductions from gross income: Taxes generally_

Article 151. Taxes..

152. Federal duties and excise taxes_

153. Taxes for local benefits..

154. Federal estate and State inheritance taxes__

Section 23 (d). Deductions from gross income: Taxes of share-

holder paid by corporation.

Article 161. Tax on bank or other stock..

Section 23 (e). Deductions from gross income : Losses by indi-

viduals.

Section 23 (f). Deductions from gross income : Losses by corpora-

tions_

Section 23 (g). Deductions from gross income: Basis for deter-

mining loss..

Section 23 (h). Deductions from gross income: Loss on sale of

stock or securities....

Section 23 (i).

Deductions from gross income: Net losses-

Article 171. Losses___.

172. Voluntary removal of buildings_

173. Loss of useful value....

174. Shrinkage in value of stocks.

46

175. Losses of farmers__.

47

Section 23 (j).

Article 191. Bad debts..

176. Sale of capital stock, bonds, and capital assets__

Deductions from gross income: Bad debts..

47

48

48

Section 23 (k). Deductions from gross income: Depreciation_

Article 201. Depreciation..

203. Depreciation of intangible property.---.

204. Capital sum recoverable through depreciation allow-

ances----

51

51

52