Internal Revenue Code:Sec. 61. Gross income defined

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Contents


Location in Internal Revenue Code


     TITLE 26 - INTERNAL REVENUE CODE
      Subtitle A - Income Taxes
       CHAPTER 1 - NORMAL TAXES AND SURTAXES
        Subchapter B - Computation of Taxable Income
         PART I - DEFINITION OF GROSS INCOME, ADJUSTED GROSS INCOME, TAXABLE
               INCOME, ETC.
        

Statute

    Sec. 61. Gross income defined
 
    (a) General definition
      Except as otherwise provided in this subtitle, gross income means
    all income from whatever source derived, including (but not limited
    to) the following items:
        (1) Compensation for services, including fees, commissions,
      fringe benefits, and similar items;
        (2) Gross income derived from business;
        (3) Gains derived from dealings in property;
        (4) Interest;
        (5) Rents;
        (6) Royalties;
        (7) Dividends;
        (8) Alimony and separate maintenance payments;
        (9) Annuities;
        (10) Income from life insurance and endowment contracts;
        (11) Pensions;
        (12) Income from discharge of indebtedness;
        (13) Distributive share of partnership gross income;
        (14) Income in respect of a decedent; and
        (15) Income from an interest in an estate or trust.
    (b) Cross references
          For items specifically included in gross income, see part II
        (sec. 71 and following).  For items specifically excluded from
        gross income, see part III (sec. 101 and following).
 

Sources

    (Aug. 16, 1954, ch. 736, 68A Stat. 17; Pub. L. 98-369, div.  A,
    title V, Sec. 531(c), July 18, 1984, 98 Stat. 884.)
 

Miscellaneous

                                 AMENDMENTS
      1984 - Subsec. (a)(1). Pub. L. 98-369 inserted reference to
    fringe benefits.
                      EFFECTIVE DATE OF 1984 AMENDMENT
      Amendment by Pub. L. 98-369 effective Jan. 1, 1985, see section
    531(h) of Pub. L. 98-369, set out as an Effective Date note under
    section 132 of this title.
                     TERMINATION DATE OF 1978 AMENDMENT
      Pub. L. 95-615, Sec. 210(a), Nov. 8, 1978, 92 Stat. 3109,
    provided that: ''Title I of this Act (probably means sections 1 to
    8 of Pub. L. 95-615, see Short Title of 1978 Amendment note under
    section 1 of this title) (other than sections 4 and 5 thereof)
    (amending section 167 of this title, enacting provisions set out as
    notes under this section and sections 61 and 62 of this title, and
    amending provisions set out as notes under sections 117, 167, and
    382 of this title) shall cease to have effect on the day after the
    date of the enactment of this Act (Nov. 8, 1978).''
                                REGULATIONS
      Pub. L. 95-427, Sec. 1, Oct. 7, 1978, 92 Stat. 996, as amended by
    Pub. L. 96-167, Sec. 1, Dec. 29, 1979, 93 Stat. 1275; Pub. L.
    97-34, title VIII, Sec. 801, Aug. 13, 1981, 95 Stat. 349; Pub. L.
    99-514, Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that:
      ''(a) In General. - No fringe benefit regulation shall be issued
    -
        ''(1) in final form on or after May 1, 1978, and on or before
      December 31, 1983, or
        ''(2) in proposed or final form on or after May 1, 1978, if
      such regulation has an effective date on or before December 31,
      1983.
      ''(b) Definition of Fringe Benefit Regulation. - For purposes of
    subsection (a), the term 'fringe benefit regulation' means a
    regulation providing for the inclusion of any fringe benefit in
    gross income by reason of section 61 of the Internal Revenue Code
    of 1986 (formerly I.R.C. 1954).''
      Pub. L. 95-615, Sec. 3, Nov. 8, 1978, 92 Stat. 3097, as amended
    by Pub. L. 99-514, Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided
    that no regulations be issued in final form on or after Oct. 1,
    1977, and before July 1, 1978, providing for inclusion of any
    fringe benefit in gross income by reason of section 61 of the
    Internal Revenue Code of 1986 (formerly I.R.C. 1954), ceased to
    have effect on the day after Nov. 8, 1978, pursuant to section
    210(a) of that Act.
        NO GAIN RECOGNIZED FROM NET GIFTS MADE BEFORE MARCH 4, 1981
      Section 1026 of Pub. L. 98-369, as amended by Pub. L. 99-514,
    Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that:
      ''(a) In General. - In the case of any transfer of property
    subject to gift tax made before March 4, 1981, for purposes of
    subtitle A of the Internal Revenue Code of 1986 (formerly I.R.C.
    1954, 26 U.S.C. 1 et seq.), gross income of the donor shall not
    include any amount attributable to the donee's payment of (or
    agreement to pay) any gift tax imposed with respect to such gift.
      ''(b) Gift Tax Defined. - For purposes of subsection (a), the
    term 'gift tax' means -
        ''(1) the tax imposed by chapter 12 of such Code (26 U.S.C.
      2501 et seq.), and
        ''(2) any tax imposed by a State (or the District of Columbia)
      on transfers by gifts.
      ''(c) Statute of Limitations. - If refund or credit of any
    overpayment of tax resulting from subsection (a) is prevented on
    the date of the enactment of this Act (July 18, 1984) (or at any
    time within 1 year after such date) by the operation of any law or
    rule of law (including res judicata), refund or credit of such
    overpayment (to the extent attributable to subsection (a)) may
    nevertheless be made or allowed if claim therefor is filed within 1
    year after the date of the enactment of this Act.''
                 PAYMENT-IN-KIND TAX TREATMENT ACT OF 1983
      Pub. L. 98-4, Mar. 11, 1983, 97 Stat. 7, as amended by Pub. L.
    98-369, div.  A, title X, Sec. 1061(a), July 18, 1984, 98 Stat.
    1046; Pub. L. 99-514, Sec. 2, Oct. 22, 1986, 100 Stat. 2095; Pub.
    L. 100-647, title VI, Sec. 6252(a)(1), Nov. 10, 1988, 102 Stat.
    3752, provided that:
    ''SECTION 1. SHORT TITLE.
      ''This Act may be cited as the 'Payment-in-Kind Tax Treatment Act
    of 1983'.
    ''SEC. 2. INCOME TAX TREATMENT OF AGRICULTURAL COMMODITIES RECEIVED
        UNDER A 1983 PAYMENT-IN-KIND PROGRAM.
      ''(a) Income Tax Deferral, Etc. - Except as otherwise provided in
    this Act, for purposes of the Internal Revenue Code of 1986
    (formerly I.R.C. 1954) -
        ''(1) a qualified taxpayer shall not be treated as having
      realized income when he receives a commodity under a 1983
      payment-in-kind program,
        ''(2) such commodity shall be treated as if it were produced by
      such taxpayer, and
        ''(3) the unadjusted basis of such commodity in the hands of
      such taxpayer shall be zero.
      ''(b) Effective Date. - This section shall apply to taxable years
    ending after December 31, 1982, but only with respect to
    commodities received for the 1983 crop year.
    ''SEC. 3. LAND DIVERTED UNDER 1983 PAYMENT-IN-KIND PROGRAM TREATED
        AS USED IN FARMING BUSINESS, ETC.
      ''(a) General Rule. - For purposes of the provisions specified in
    subsection (b), in the case of any land diverted from the
    production of an agricultural commodity under a 1983
    payment-in-kind program -
        ''(1) such land shall be treated as used during the 1983 crop
      year by the qualified taxpayer in the active conduct of the trade
      or business of farming, and
        ''(2) any qualified taxpayer who materially participates in the
      diversion and devotion to conservation uses required under a 1983
      payment-in-kind program shall be treated as materially
      participating in the operation of such land during such crop
      year.
      ''(b) Provisions to Which Subsection (a) Applies. - The
    provisions specified in this subsection are -
        ''(1) section 2032A of the Internal Revenue Code of 1986
      (relating to valuation of certain farm, etc., real property),
        ''(2) section 6166 of such Code (relating to extension of time
      for payment of estate tax where estate consists largely of
      interest in closely held business),
        ''(3) chapter 2 of such Code (relating to tax on
      self-employment income), and
        ''(4) title II of the Social Security Act (42 U.S.C. 401 et
      seq.) (relating to Federal old-age, survivors, and disability
      insurance benefits).
    ''SEC. 4. ANTIABUSE RULES.
      ''(a) General Rule. - In the case of any person, sections 2 and 3
    of this Act shall not apply with respect to any land acquired by
    such person after February 23, 1983, unless such land was acquired
    in a qualified acquisition.
      ''(b) Qualified Acquisition. - For purposes of this section, the
    term 'qualified acquisition' means any acquisition -
        ''(1) by reason of the death of a qualified transferor,
        ''(2) by reason of a gift from a qualified transferor, or
        ''(3) from a qualified transferor who is a member of the family
      of the person acquiring the land.
      ''(c) Definitions and Special Rules. - For purposes of this
    section -
        ''(1) Qualified transferor. - The term 'qualified transferor'
      means any person -
          ''(A) who held the land on February 23, 1983, or
          ''(B) who acquired the land after February 23, 1983, in a
        qualified acquisition.
        ''(2) Member of family. - The term 'member of the family' has
      the meaning given such term by section 2032A(e)(2) of the
      Internal Revenue Code of 1986.
        ''(3) Mere change in form of business. - Subsection (a) shall
      not apply to any change in ownership by reason of a mere change
      in the form of conducting the trade or business so long as the
      land is retained in such trade or business and the person holding
      the land before such change retains a direct or indirect
      80-percent interest in such land.
        ''(4) Treatment of certain acquisitions of right to the crop. -
      The acquisition of a direct or indirect interest in 80 percent or
      more of the crop from any land shall be treated as an acquisition
      of such land.
    ''SEC. 5. DEFINITIONS AND SPECIAL RULES.
      ''(a) General Rule. - For purposes of this Act -
        ''(1) 1983 payment-in-kind program. - The term '1983
      payment-in-kind program' means any program for the 1983 crop year
      -
          ''(A) under which the Secretary of Agriculture (or his
        delegate) makes payments in kind of any agricultural commodity
        to any person in return for -
            ''(i) the diversion of farm acreage from the production of
          an agricultural commodity, and
            ''(ii) the devotion of such acreage to conservation uses,
          and
          ''(B) which the Secretary of Agriculture certifies to the
        Secretary of the Treasury as being described in subparagraph
        (A).
        ''(2) Crop year. - The term '1983 crop year' means the crop
      year for any crop the planting or harvesting period for which
      occurs during 1983. The term '1984 crop year' means the crop year
      for wheat the planting and harvesting period for which occurs
      during 1984.
        ''(3) Qualified taxpayer. - The term 'qualified taxpayer' means
      any producer of agricultural commodities (within the meaning of
      the 1983 payment-in-kind programs) who receives any agricultural
      commodity in return for meeting the requirements of clauses (i)
      and (ii) of paragraph (1)(A).
        ''(4) Receipt includes right to receive, etc. - A right to
      receive (or other constructive receipt of) a commodity shall be
      treated the same as actual receipt of such commodity.
        ''(5) Amounts received by the taxpayer as reimbursement for
      storage. - A qualified taxpayer reporting on the cash receipts
      and disbursements method of accounting shall not be treated as
      being entitled to receive any amount as reimbursement for storage
      of commodities received under a 1983 payment-in-kind program
      until such amount is actually received by the taxpayer.
        ''(6) Commodity credit loans treated separately. - Subsection
      (a) of section 2 shall apply to the receipt of any commodity
      under a 1983 payment-in-kind program separately from, and without
      taking into account, any related transaction or series of
      transactions involving the satisfaction of loans from the
      Commodity Credit Corporation.
      ''(b) Extension to Wheat Planted and Harvested in 1984. - In the
    case of wheat -
        ''(1) any reference in this Act to the 1983 crop year shall
      include a reference to the 1984 crop year, and
        ''(2) any reference to the 1983 payment-in-kind program shall
      include a reference to any program for the 1984 year for wheat
      which meets the requirements of subparagraphs (A) and (B) of
      subsection (a)(1).
      ''(c) Regulations. - The Secretary of the Treasury or his
    delegate (after consultation with the Secretary of Agriculture)
    shall prescribe such regulations as may be necessary to carry out
    the purposes of this Act, including (but not limited to) such
    regulations as may be necessary to carry out the purposes of this
    Act where the commodity is received by a cooperative on behalf of
    the qualified taxpayer.''
      (Section 1061(b) of Pub. L. 98-369 provided that: ''The
    amendments made by this section (amending Pub. L. 98-4 set out
    above) shall apply with respect to commodities received for the
    1984 crop year (as defined in section 5(a)(2) of the
    Payment-in-Kind Tax Treatment Act of 1983 (Pub. L. 98-4, set out
    above) as amended by subsection (a)).'')
                   CANCELLATION OF CERTAIN STUDENT LOANS
      Pub. L. 94-455, title XXI, Sec. 2117, Oct. 4, 1976, 90 Stat.
    1911, as amended by Pub. L. 95-600, title I, Sec. 162, Nov. 6,
    1978, 92 Stat. 2810; Pub. L. 99-514, Sec. 2, Oct. 22, 1986, 100
    Stat. 2095, provided that no amount be included in gross income of
    an individual for purposes of 26 U.S.C. 61 by reason of the
    discharge made before Jan. 1, 1983 of the indebtedness of the
    individual under a student loan if the discharge was pursuant to a
    provision of the loan under which the indebtedness of the
    individual would be discharged if the individual worked for a
    certain period of time in certain geographical areas or for certain
    classes of employers.
      REGULATIONS RELATING TO TAX TREATMENT OF CERTAIN PREPUBLICATION
                         EXPENDITURES OF PUBLISHERS
      Pub. L. 94-455, title XXI, Sec. 2119, Oct. 4, 1976, 90 Stat.
    1912, as amended by Pub. L. 99-514, Sec. 2, Oct. 22, 1986, 100
    Stat. 2095, provided that:
      ''(a) General Rule. - With respect to taxable years beginning on
    or before the date on which regulations dealing with prepublication
    expenditures are issued after the date of the enactment of this Act
    (Oct. 4, 1976), the application of sections 61 (as it relates to
    cost of goods sold), 162, 174, 263, and 471 of the Internal Revenue
    Code of 1986 (formerly I.R.C. 1954) to any prepublication
    expenditure shall be administered -
        ''(1) without regard to Revenue Ruling 73-395, and
        ''(2) in the manner in which such sections were applied
      consistently by the taxpayer to such expenditures before the date
      of the issuance of such revenue ruling.
      ''(b) Regulations To Be Prospective Only. - Any regulations
    issued after the date of the enactment of this Act (Oct. 4, 1976)
    which deal with the application of sections 61 (as it relates to
    cost of goods sold), 162, 174, 263, and 471 of the Internal Revenue
    Code of 1986 to prepublication expenditures shall apply only with
    respect to taxable years beginning after the date on which such
    regulations are issued.
      ''(c) Prepublication Expenditures Defined. - For purposes of this
    section, the term 'prepublication expenditures' means expenditures
    paid or incurred by the taxpayer (in connection with his trade or
    business of publishing) for the writing, editing, compiling,
    illustrating, designing, or other development or improvement of a
    book, teaching aid, or similar product.''
          REIMBURSEMENT OF MOVING EXPENSES OF EMPLOYEES OF CERTAIN
        CORPORATIONS EXCLUDED FROM GROSS INCOME; CLAIM FOR REFUND OR
                       CREDIT; LIMITATIONS; INTEREST
      Pub. L. 86-780, Sec. 5, Sept. 14, 1960, 74 Stat. 1013, provided
    for the exclusion from gross income of any amount received after
    Dec. 31, 1949, and before Oct. 1, 1955, by employees of certain
    corporations as reimbursement for moving expenses, and the refund
    or credit of any overpayments.
 

References

                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in sections 208A, 305, 351, 354, 355,
    356, 408, 671, 707, 6103 of this title.
 

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