Evening star., 1944-01-14
Your U. 5. Income Tax
This Is No, II of a Serie,

In the instructions accompanying
return Form l040 are listed certain
items which are specifically exempt
from the income tax and need not
be reported as income in the tax
payers return. Among these is life
insurance paid on the death of the
insured. Amounts so received are
nontaxable to the beneficiary.
However, life insurance paid to a
policyholder on the maturity of an
endowment contract mot a death
paymen) represents income, which
must be reported, to the extent that
the amount received is greater than
the premiums or consideration paid
for the policy. Amounts received
up to the amount of the premiums
or consideration paid for the policy
are nontaXable
In the case of annuitieS received
either under annuity or endowment
insurance, or under retirement
funds or plans toward which the
taxpayer has contributed or made
payments, portion of the annuity
is considered as representing a re-
turn of the funds originally paid in,
and is nontaxable, and the balance
is taxable as income. The amount
considered as income is an amount
each year equal to per cent Of
the total premiums, consideration,
or payments made for the annuitK.
Where property is received By
gift, bequest, devise or inheritance.
the value of the property is exempt
from income tax, but any income
derived from such property is sub
ject to the tax.
Interest on obligations of a State,
Territory or any political Subdivt-
sion thereof, or the District of CO.
lumbia, or possessions of the United
States. is exempt from tax and,
also, the interest on obligations "
the United States issued prior to
March /, 1941, to the extent prb-
vided in the acts authorizing their
issue. For the manner of reporting
such interest the instructions at.
companying the return should be
consulted. The same applies 4fD
interest on obligations issued prior
to March l, 1941. of corporation
organized under an Act of Congress
If such corporation is an instru.
mentality of the United Statesala
Amounts received through acci.
dent or health insurance or untisr
workmen's compensation acts ifcr
personal injury or sickness. and
damages received on account, ,,of
such injuries or sickness, are tax
exempt and need not be reported
as income IL,
Pensions and other types Of conn
pensation received by veteran, who
Is no longer in active Serviceu1or
services rendered by him in Beee
Of war may be exempt under ex-
press provisions of law, otherwise
they are subject to income tax-yarG
Amounts received as a penSien.
annuity or similar allowance efor
personal injuries or sickness srer
sulting from active service iniAhe
armed forces of any country,a ,are
exempt. 5S.ais
Also exempt and not requirecfoto
be reported Is the rental value Of
dwelling house and furnishings
provided to minister of the gospeh
Beginning in l943. members oftne
armed forces of the United StEses,
and citizens or residents ofsnSht
United States who are membepsoof
the military or naval forces ofihny
of the other United Nationso.are
exempt from income tax on mot
more than 81 500 of the compensat
tion received annually during stiIe
present war for active servicerotn
such forces, and the exempt amount
may be excluded from gross income.