The Leavenworth echo. [volume] (Leavenworth, Wash.) 1904-current, 1919-02-28
Gross Income Defined.

with regard to what constitutes gross
income. Under it gross income in
cludes:
Gains, profits and income derived
from salaries, wages or compensation
for personal service of whatever kind
and in whatever form paid, or from
professions, vocations, trades, bust
nesses, commerce, or sales or deal
ings in property, whether real or per-
sonal, growing out of the ownership
or use of or interest in such property;
also from interest, rent, dividends, Sc
curities, or the transaction of any
business carried on for gain or profit,
or gains or profits, and income derived
from any source whatever.
Exempt from Taxation.
The bill specifically states that
gross income does not include the
following items, which are exempt
from taxation:
1. The proceeds of life insurance
policies paid upon the death of the
insured to individual beneficiaries or
to the estate of the insured.
2. The amount received by the in
sured as return of premium or pre-
miums paid by him under life insur-
ance, endowment, or annual contracts,
either during the term or at the ma
turity of the term mentioned in the
contract or upon surrender of the
contract.
8. The value of property acquired
by gift, bequest, devise or descent
(but the income from such property
shall be included in the gross in
Gomez.
A. The interest upon obligations
securities issued by of state, ter
ritory or any political subdivision
thereof or the District of Columbia,
or securities issued under the provis-
ions of the federal farm loan act of
July II, 1916; or the Obligations of
the United States or its possessions,
or bonds issued by the war finance
corporation. 1t is provided however,
that every person owing any of these
specified obligations must submit
statement showing these holdings and
the income derived from them to the
commissioner of internal revenue or
the agent of the commissioner to
whom he makes his tax return. In
the case of obligations of the United
States issued after September /, 1917,
and in the case of the bonds issued by
the war finance corporation, the inter-
est shall be exempt only if and to the
extent provided in the respective acts
authorizing the issue of these Sc
curities.
Money From Insurance
5. Amounts received through acct
dent or health insurance or under
workmen's compensation acts, as COM
pensation for personal injuries or sick
ness, plus the amount of any damages
received, whether by suit or agree
ment on account of such injuries or
sickness.
e. Income derived from any public
utility or the exercise of any essential
governmental function and accruing
to any state, territory or the District
of Columbia, or any political subdi-
vision thereof, or income accruing to
the government of the United States
OF any political subdivision thereof.
This is intended to cover cases where
the government or the state or mu-
inequalities entered into contract
with any person prior to September 3,
1916, to construct or operate public
utility and provides that no tax shall
be levied upon the income derived
from such public utility so far as the
payment thereof will impose loss or
burden upon the state or municipality.
The person with whom the contract
was made, however, must pay the in
come tax upon his share of the profits
from such income.
7. So much of the amount received
during the present war by person
in the military or naval forces of the
United States as salary compensation
in any form from the United States
for Active service in such forces as
does not exceed $500.
To Calculate met Income
Then the bill specifies the deduc-
tions and credits which are to be al
lowed from the gross income in order
to arrive at the met" or taxable in
come, as follows:
/. All the ordinary and necessary
expenses paid or incurred during the
taxable year in carrying ON any trade
or business, including a reasonable
amount for personal services.
2. All interest paid or accrued
within the taxable year on indebted
ness, except on Indebtedness incurred
or continued to purchase or carry OBJ
legations or securities (other than OBJ
legations of the United States issued
,f+ar cantember %. 1917, the interest