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Federal Register PS AHE .PAtEtr «ONAU» ^ " ■ ITTTBä 1 Vi FEDERAL REGISTER VOLUME I \ 1934 ^ NU M BER 175 ^ O M I-n o * Washington, Saturday, November li , TREASURY DEPARTMENT. C o n t e n t s Bureau of Internal Revenue. CHAPTER I [Regulations 94] Scope of Regulations I ncom e T a x U nder th e R evenu e A c t o p 1936 Title I—Income Tax, Subtitle A—Introductory Provisions INTRODUCTORY [Tbe section numbers refer to the Revenue Act of 1936 and the article numbers to Regulations 94] These regulations deal with, the tax imposed on income by Section 1. Application of title. the Revenue Act of 1936. Article 1—1. Scope of regulations. Since these regulations deal only with the tax on income, Section 2. Cross references. certain parts of the Act, which are general in their nature, Section 3. Classification of provisions. Article 3-1. Division of regulations. or which do not relate directly to the im posing and collecting Section 4. Special classes of taxpayers. of the tax, have not been printed in the body of these Article 4-1. Application of regulations to special classy of regulations, but have been inserted in the Appendix, where taxpayers. they are grouped and classified under proper headin gs. F or CHAPTER H this reason the main body of these regulations deals only with Titles I, IA, and VUE of the Act. Treasury Decision Rates of Tax 4666, approved July 16, 1936, and Treasury Decision 4690, Subtitle B—General Provisions, Part I—Rates of Tax approved August 26, 1936, relating to the excess-profits tax Section 11. Normal tax on individuals. imposed under Title I of the Revenue Act of 1935, as Article 11—1. Income tax on individuals. amended by Title n of the Revenue Act of 1936, have been 11-2. Citizens or residents of the United States liable printed in their entirety in the Appendix. The regulations to tax. 11- 8. Who Is a citizen. under Title HE of the Act, relating to the tax on unjust Section 12. Surtax on individuals. enrichment, have been promulgated as Regulations 95. Article 12-1. Surtax. The numbering of the respective articles in the body of the 12- 2. Computation of surtax. regulations follows the plan adopted in Regulations 86 pre­ Section 13. Normal tax on corporations. * Article 13—1. Normal income tax on corporations. scribed under the Revenue Act of 1934. In accordance with Section 14. Surtax on undistributed profits. this plan the numbers of the sections of the Act are used as Article 14—1. Surtax on undistributed profits of corporations. key numbers, followed by a dash (— ), with the number of the 14-2. Method of computation of surtax— Example. 14-3. Specific credit if adjusted net Income is less than article placed after the dash. By this means anyone who $50,000. desires to learn how a given section or subsection of the Act has been interpreted by the Bureau can readily and quickly CHAPTER H I find that interpretation by using the key number. Thus, if Gross Income—Net Income one desires to learn what interpretation has been placed on section 21 of the Act, he should turn to article 21-1 of the Part n —Computation of Net Income regulations. In some cases several articles are necessary in Section 21. Net Income. the interpretation of different phases of one section or sub­ Article 21—1. Meaning of net income. Section 22 (a). Gross income: General definition. section or paragraph of the Act. For example, section 23 <m), Article 22 (al—1. What included in gross income. dealing with “Depletion”, requires many articles, iftmh of 22 (a>—2. Compensation for personal services. them, however, is designated by the key 23 (m ); for evampio 22 (a)-3. Compensation paid other than in cash. article 23 (m )-l, article 23 (m ) 2. It is believed that by this 22 (a )-4. Compensation paid in notes. 22 (a )—6. Gross income from business. keying the numbers of the articles to the sections, subsections, 22 (a )- 6. State contracts. and paragraphs of the Act, the material in the regulations is 22 (a)—7. Gross income of farmers. made more readily available. 22 (a)—$. Sale of stock and rights. 22 (a)—9. Sale of patents and copyrights. The regulations proper have been divided into chapters. 22 (a )—10. Sale of good will. The material to be found in each respective chapter is shown 22 (a )—11. Sale of real property in lots. in the “Contents.” The classification of the material by ) 22 (a)—12. Annuities and insurance policies. chapters follows the arrangement of the corresponding sec­ 22 (a)-13. Improvements by lessees. tions of the Act. 22 (a )—14. Cancellation of indebtedness. 22 (a)—15. Creation of sinking fund by corporation. Certain important provisions of prior Revenue Acts from 22 (a )—16. Acquisition, or disposition by a corporation of 1924 to date, together with important sections of the Revised its own capital stock. Statutes relating to income tax, will be found, in the Appendix, 22 (a )—17. Contributions to corporation by shareholders. 22 (a )—18. Sale and purchase by corporation of its bonds. classified and grouped under the proper hoadinga, 22 (a )—19. Sale of capital assets by corporation. 2093 2094 FEDERAL REGISTER, November 14, 1936 Se c tio n 22 (c) Gross income: Inventories. Article 22 (c)-l. Need of inventories. 22 (c)-2. Valuation of inventories. 22 (c)-3 . Inventories at cost. 22 (c)—4. Inventories at cost or market, whichever is lower. 22 (c>—5- Inventories by dealers in securities. 22 (c)—6. Inventories of live stock raisers and other farmers. 22 (c)—7. Inventories of miners and manufacturers. 22 (c)—8. Inventories of retail merchants. Section 22 (d ). Gross income: Distribution by corporations. Published by the Division of the F e d e r a l R e g is t e r , The National Se c tio n 22 (e ). Gross income: Determination of gain or loss. Archives, pursuant to the authority contained in the Federal Pur-mrur 22 (f). Gross income: Gross income from sources within Register Act, approved July 26, 1935 (49 Stat. L. 500), under reg­ «■•nri without United States. ulations prescribed by tha Administrative Committee, with the approval of the President. CHAPTER IV The Administrative Committee consists of the Archivist or Acting Deductions From Gross' Income Archivist, an officer of the Department of Justice designated by the Se c tio n 23 (a ). Deductions from gross income: Expenses. Attorney General, and the Public Printer or Acting Public Printer. Article 23 (a )- l. Business expenses. 23 (a )-2. Traveling expenses. The daily issue of the F ederal R egister will be furnished by mail 23 (a)-3. Cost of materials. to subscribers, free of postage, for $1 per month or $10 per year; 23 (a)-4. Repairs. single copies 5 cents; payable in advance. Remit by money order 23 (a)~6. Professional expenses. payable to Superintendent of Documents, Government Printing 23 (a)-6 . Compensation for personal services. Office, Washington, D. C. 23 (a)—7. Treatment of excessive compensation. Correspondence concerning the publication of the F ederal 23 (a>-8. Bonuses to employees. 23 (a)—9. Pensions—Compensation for injuries. R egister should be addressed to the Director, Division of the F ederal R egister, The National Archives, Washington, D. O. 23 (a )—10. Rentals. 23 ( a ) - l l . Expenses of farmers. 23 (a )—12. Depositors* guaranty fund. Se c tio n 23 (b). Deductions from gross-income: Interest. Article 23 (b )-l. Interest. TABLE OF CONTENTS Se c tio n 23 (c). Deductions from gross income: Taxes generally. ..Article 23 (c )—1. Taxes. 23 (c )—2. Federal duties and excise taxes. Interstate Commerce Commission: Page Application for relief from long-and-short-haul provi­ 23 (c)-3. Taxes for local benefits. Sec tio n 2 3 (d ). Deductions from gross income: Taxes of share­ sion, Interstate Commerce Act: holder paid by corporation. Handles from, to, and between points in the South-. Article 23 (d )-l. Tax on bank or other stock. west____________________________________ _____________ 2156 S e c tio n 23 (e ) . Deductions from gross income: Losses by individuals. Notice of hearing, application to operate as common Article 23 (e )- l. Losses by individuals. carrier: 23 (e)—2. Voluntary removal of buildings. Dekay, C. M___________________________ !--------- ---------- 2155 23 (e)-3. Loss of useful value. Securities and Exchange Commission: 23 (e )—4. Shrinkage in value of stocks. Order terminating proceeding, offering sheet by: 23 (e)-5. Losses of farmers. Carraher, W. H----------------------------- ------- _______ 2156 1 Sec tio n 23 ( f ) . Deductions from gross income: Losses by corpora­ Permanent suspension order, offering sheet by: tions. Knickerbocker, P. R ------------------------------ 2157 , Article 23 ( f ) - l . Losses by corporations. Securities Act of 1933: Se c tio n 23 ( g ) . Deductions from gross income: Wagering losses. Adoption oi, Rule 600—Financial statements--------------2156 Sec tio n 23 (h ). Deductions from gross income: Basis for determin­ Suspension order, etc_ offering sheet by: ing loss. Thompson, T. G— ----------------------------------------------- 2157 Article 23 (h )-l. Basis for determining loss. Treasury Department: Sec tio n 23 (i). Deductions from gross income: Loss on wash sales Bureau of Internal. Revenue: of stock or securities. Regulations 94—Income Tax under the Revenue Se c tio n 23 (J ). Deductions from gross income: Capital losses. Act of 1936: nnnn Se c tio n 23 ( k ) . Deductions from gross income: Bad debts. Table of Contents_______________________________ 2093 Article 23 (k )—1. Bad debts. Chapter L—Introductory Provisions, Subtitle A 23 (k )—2. Examples of bad debts. of T itle I ________________________ 2100 23 (k )-3 .
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