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Internal Revenue Code, § 61. Gross Income Defined

I.R.C. § 61(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:
I.R.C. § 61(a)(1)
Compensation for services, including fees, commissions, fringe benefits, and similar items;
I.R.C. § 61(a)(2)
Gross income derived from business;
I.R.C. § 61(a)(3)
Gains derived from dealings in property;
I.R.C. § 61(a)(4)
Interest;
I.R.C. § 61(a)(5)
Rents;
I.R.C. § 61(a)(6)
Royalties;
I.R.C. § 61(a)(7)
Dividends;
I.R.C. § 61(a)(8)
Annuities;
I.R.C. § 61(a)(9)
Income from life insurance and endowment contracts;
I.R.C. § 61(a)(10)
Pensions;
I.R.C. § 61(a)(11)
Income from discharge of indebtedness;
I.R.C. § 61(a)(12)
Distributive share of partnership gross income;
I.R.C. § 61(a)(13)
Income in respect of a decedent; and
I.R.C. § 61(a)(14)
Income from an interest in an estate or trust.
I.R.C. § 61(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).
(Aug. 16, 1954, ch. 736, 68A Stat. 17; July 18, 1984, Pub. L. 98-369, div. A, title V, 531(c), 98 Stat. 884; Pub. L. 115-97, title I, Sec. 11051(b)(1)(A), Dec. 22, 2017, 131 Stat. 2054.)
BACKGROUND NOTES
Amendments to Subchapter
1982Pub. L. 97-248, title II, 204(c)(2), Sept. 3, 1982, 96 Stat. 427, added item for part XI.
1977Pub. L. 95-30, title I, 101(e)(3), May 23, 1977, 91 Stat. 135, substituted “Determination of marital status” for “Standard deduction for individuals” in item for part IV.
1976Pub. L. 94-455, title XIX, 1901(b)(4)(C), Oct. 4, 1976, 90 Stat. 1793, substituted “taxable income, etc.” for “and taxable income.” in item for part I.
1962Pub. L. 87-870, 1(b), Oct. 23, 1962, 76 Stat. 1160, added item for part X.
Amendments to Part
1986Pub. L. 99-514, title I, 132(d), Oct. 22, 1986, 100 Stat. 2116, added item 67.
1984Pub. L. 98-369, div. A, title IV, 424(b)(2)(C), July 18, 1984, 98 Stat. 803, struck out “where spouses live apart” in item 66.
1980Pub. L. 96-605, title I, 101(b), Dec. 28, 1980, 94 Stat. 3522, added item 66.
1976Pub. L. 94-455, title XIX, 1901(b)(4)(A), (B), Oct. 4, 1976, 90 Stat. 1793, substituted “TAXABLE INCOME, ETC." for “AND TAXABLE INCOME” in part heading, and added items 64 and 65.
AMENDMENTS
2017—Subsec. (a). Pub. L. 115-97, Sec. 11051(b)(1)(A), amended subsec. (a) by striking par. (8) and by redesignating pars. (9) through (15) as pars. (8) through (14), respectively.
Before being struck, former par. (8) read as follows: “(8) Alimony and separate maintenance payments;”.
1984—Subsec. (a)(1). Pub. L. 98-369 inserted reference to fringe benefits.
EFFECTIVE DATE OF 2017 AMENDMENT
Amendments by Pub. L. 115-97, Sec. 11051(b)(1)(A), effective for any divorce or separation instrument executed after December 31, 2018.
Pub. L. 115-97, Sec. 11051(c), provided that:
“(c) EFFECTIVE DATE.—The amendments made by this section shall apply to—
“(1) any divorce or separation instrument (as defined in section 71(b)(2) of the Internal Revenue Code of 1986 as in effect before the date of the enactment of this Act) executed after December 31, 2018, and
“(2) any divorce or separation instrument (as so defined) executed on or before such date and modified after such date if the modification expressly provides that the amendments made by this section apply to such modification.”
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.
SPECIAL DISASTER-RELATED RULES FOR USE OF RETIREMENT FUNDS
Section 202 of Pub. L. 116-94, Div. Q, provided:
“SEC. 202. SPECIAL DISASTER-RELATED RULES FOR USE OF RETIREMENT FUNDS.
“(a) TAX-FAVORED WITHDRAWALS FROM RETIREMENT PLANS.—
“(1) IN GENERAL.—Section 72(t) of the Internal Revenue Code of 1986 shall not apply to any qualified disaster distribution.
“(2) AGGREGATE DOLLAR LIMITATION.—
“(A) IN GENERAL.—For purposes of this subsection, the aggregate amount of distributions received by an individual which may be treated as qualified disaster distributions for any taxable year shall not exceed the excess (if any) of—
“(i) $100,000, over
“(ii) the aggregate amounts treated as qualified disaster distributions received by such individual for all prior taxable years.
“(B) TREATMENT OF PLAN DISTRIBUTIONS.—If a distribution to an individual would (without regard to subparagraph (A)) be a qualified disaster distribution, a plan shall not be treated as violating any requirement of the Internal Revenue Code of 1986 merely because the plan treats such distribution as a qualified disaster distribution, unless the aggregate amount of such distributions from all plans maintained by the employer (and any member of any controlled group which includes the employer) to such individual exceeds $100,000.
“(C) CONTROLLED GROUP.—For purposes of subparagraph (B), the term ‘‘controlled group’’ means any group treated as a single employer under subsection (b), (c), (m), or (o) of section 414 of the Internal Revenue Code of 1986.
“(D) SPECIAL RULE FOR INDIVIDUALS AFFECTED BY MORE THAN ONE DISASTER.—The limitation of subparagraph (A) shall be applied separately with respect to distributions made with respect to each qualified disaster.
“(3) AMOUNT DISTRIBUTED MAY BE REPAID.—
“(A) IN GENERAL.—Any individual who receives a qualified disaster distribution may, at any time during the 3-year period beginning on the day after the date on which such distribution was received, make 1 or more contributions in an aggregate amount not to exceed the amount of such distribution to an eligible retirement plan of which such individual is a beneficiary and to which a rollover contribution of such distribution could be made under section 402(c), 403(a)(4), 403(b)(8), 408(d)(3), or 457(e)(16), of the Internal Revenue Code of 1986, as the case may be.
“(B) TREATMENT OF REPAYMENTS OF DISTRIBUTIONS FROM ELIGIBLE RETIREMENT PLANS OTHER THAN IRAS.—For purposes of the Internal Revenue Code of 1986, if a contribution is made pursuant to subparagraph (A) with respect to a qualified disaster distribution from an eligible retirement plan other than an individual retirement plan, then the taxpayer shall, to the extent of the amount of the contribution, be treated as having received the qualified disaster distribution in an eligible rollover distribution (as defined in section 402(c)(4) of such Code) and as having transferred the amount to the eligible retirement plan in a direct trustee to trustee transfer within 60 days of the distribution.
“(C) TREATMENT OF REPAYMENTS OF DISTRIBUTIONS FROM IRAS.—For purposes of the Internal Revenue Code of 1986, if a contribution is made pursuant to subparagraph (A) with respect to a qualified disaster distribution from an individual retirement plan (as defined by section 7701(a)(37) of such Code), then, to the extent of the amount of the contribution, the qualified disaster distribution shall be treated as a distribution described in section 408(d)(3) of such Code and as having been transferred to the eligible retirement plan in a direct trustee to trustee transfer within 60 days of the distribution.
“(4) DEFINITIONS.—For purposes of this subsection—
“(A) QUALIFIED DISASTER DISTRIBUTION.—Except as provided in paragraph (2), the term ‘‘qualified disaster distribution’’ means any distribution from an eligible retirement plan made—
“(i) on or after the first day of the incident period of a qualified disaster and before the date which is 180 days after the date of the enactment of this Act, and
“(ii) to an individual whose principal place of abode at any time during the incident period of such qualified disaster is located in the qualified disaster area with respect to such qualified disaster and who has sustained an economic loss by reason of such qualified disaster.
“(B) ELIGIBLE RETIREMENT PLAN.—The term ‘‘eligible retirement plan’’ shall have the meaning given such term by section 402(c)(8)(B) of the Internal Revenue Code of 1986.
“(5) INCOME INCLUSION SPREAD OVER 3-YEAR PERIOD.—
“(A) IN GENERAL.—In the case of any qualified disaster distribution, unless the taxpayer elects not to have this paragraph apply for any taxable year, any amount required to be included in gross income for such taxable year shall be so included ratably over the 3-taxable year period beginning with such taxable year.
“(B) SPECIAL RULE.—For purposes of subparagraph (A), rules similar to the rules of subparagraph (E) of section 408A(d)(3) of the Internal Revenue Code of 1986 shall apply.
“(6) SPECIAL RULES.—
“(A) EXEMPTION OF DISTRIBUTIONS FROM TRUSTEE TO TRUSTEE TRANSFER AND WITHHOLDING RULES.—For purposes of sections 401(a)(31), 402(f), and 3405 of the Internal Revenue Code of 1986, qualified disaster distributions shall not be treated as eligible rollover distributions.
“(B) QUALIFIED DISASTER DISTRIBUTIONS TREATED AS MEETING PLAN DISTRIBUTION REQUIREMENTS.—For purposes the Internal Revenue Code of 1986, a qualified disaster distribution shall be treated as meeting the requirements of sections 401(k)(2)(B)(i), 403(b)(7)(A)(ii), 403(b)(11), and 457(d)(1)(A) of such Code.
“(b) RECONTRIBUTIONS OF WITHDRAWALS FOR HOME PURCHASES.—
“(1) RECONTRIBUTIONS.—
“(A) IN GENERAL.—Any individual who received a qualified distribution may, during the applicable period, make 1 or more contributions in an aggregate amount not to exceed the amount of such qualified distribution to an eligible retirement plan (as defined in section 402(c)(8)(B) of the Internal Revenue Codeof 1986) of which such individual is a beneficiary and to which a rollover contribution of such distribution could be made under section 402(c), 403(a)(4), 403(b)(8), or 408(d)(3), of such Code, as the case may be.
“(B) TREATMENT OF REPAYMENTS.—Rules similar to the rules of subparagraphs (B) and (C) of subsection (a)(3) shall apply for purposes of this subsection.
“(2) QUALIFIED DISTRIBUTION.—For purposes of this subsection, the term ‘‘qualified distribution’’ means any distribution—
“(A) described in section 401(k)(2)(B)(i)(IV), 403(b)(7)(A)(ii) (but only to the extent such distribution relates to financial hardship), 403(b)(11)(B), or 72(t)(2)(F), of the Internal Revenue Code of 1986,
“(B) which was to be used to purchase or construct a principal residence in a qualified disaster area, but which was not so used on account of the qualified disaster with respect to such area, and
“(C) which was received during the period beginning on the date which is 180 days before the first day of the incident period of such qualified disaster and ending on the date which is 30 days after the last day of such incident period.
“(3) APPLICABLE PERIOD.—For purposes of this subsection, the term ‘‘applicable period’’ means, in the case of a principal residence in a qualified disaster area with respect to any qualified disaster, the period beginning on the first day of the incident period of such qualified disaster and ending on the date which is 180 days after the date of the enactment of this Act.
“(c) LOANS FROM QUALIFIED PLANS.—
“(1) INCREASE IN LIMIT ON LOANS NOT TREATED AS DISTRIBUTIONS.—In the case of any loan from a qualified employer plan (as defined under section 72(p)(4) of the Internal Revenue Code of 1986) to a qualified individual made during the 180-day period beginning on the date of the enactment of this Act—
“(A) clause (i) of section 72(p)(2)(A) of such Code shall be applied by substituting ‘‘$100,000’’ for ‘‘$50,000’’, and
“(B) clause (ii) of such section shall be applied by substituting ‘‘the present value of the nonforfeitable accrued benefit of the employee under the plan’’ for ‘‘one-half of the present value of the nonforfeitable accrued benefit of the employee under the plan’’.
“(2) DELAY OF REPAYMENT.—In the case of a qualified individual (with respect to any qualified disaster) with an outstanding loan (on or after the first day of the incident period of such qualified disaster) from a qualified employer plan (as defined in section 72(p)(4) of the Internal Revenue Codeof 1986)—
“(A) if the due date pursuant to subparagraph (B) or (C) of section 72(p)(2) of such Code for any repayment with respect to such loan occurs during the period beginning on the first day of the incident period of such qualified disaster and ending on the date which is 180 days after the last day of such incident period, such due date shall be delayed for 1 year (or, if later, until the date which is 180 days after the date of the enactment of this Act),
“(B) any subsequent repayments with respect to any such loan shall be appropriately adjusted to reflect the delay in the due date under subparagraph (A) and any interest accruing during such delay, and
“(C) in determining the 5-year period and the term of a loan under subparagraph (B) or (C) of section 72(p)(2) of such Code, the period described in subparagraph (A) of this paragraph shall be disregarded.
“(3) QUALIFIED INDIVIDUAL.—For purposes of this subsection, the term ‘‘qualified individual’’ means any individual—
“(A) whose principal place of abode at any time during the incident period of any qualified disaster is located in the qualified disaster area with respect to such qualified disaster, and
“(B) who has sustained an economic loss by reason of such qualified disaster.
“(d) PROVISIONS RELATING TO PLAN AMENDMENTS.—
“(1) IN GENERAL.—If this subsection applies to any amendment to any plan or annuity contract, such plan or contract shall be treated as being operated in accordance with the terms of the plan during the period described in paragraph (2)(B)(i).
“(2) AMENDMENTS TO WHICH SUBSECTION APPLIES.—
“(A) IN GENERAL.—This subsection shall apply to any amendment to any plan or annuity contract which is made—
“(i) pursuant to any provision of this section, or pursuant to any regulation issued by the Secretary or the Secretary of Labor under any provision of this section, and
“(ii) on or before the last day of the first plan year beginning on or after January 1, 2020, or such later date as the Secretary may prescribe.
“In the case of a governmental plan (as defined in section 414(d) of the Internal Revenue Code of 1986), clause (ii) shall be applied by substituting the date which is 2 years after the date otherwise applied under clause (ii).
“(B) CONDITIONS.—This subsection shall 24 not apply to any amendment unless—
“(i) during the period—
“(I) beginning on the date that this section or the regulation described in subparagraph (A)(i) takes effect (or in the case of a plan or contract amendment not required by this section or such regulation, the effective date specified by the plan), and
“(II) ending on the date described in subparagraph (A)(ii) (or, if earlier, the date the plan or contract amendment is adopted),
“the plan or contract is operated as if such plan or contract amendment were in effect, and
“(ii) such plan or contract amendment applies retroactively for such period.”
EXCLUSION FROM GROSS INCOME OF CERTAIN CLEAN COAL POWER GRANTS TO NON-CORPORATE TAXPAYERS
Section 343 of Pub. L. 114-113, Div. Q, provided that:
“SEC. 343. EXCLUSION FROM GROSS INCOME OF CERTAIN CLEAN COAL POWER GRANTS TO NON-CORPORATE TAXPAYERS.
“(a) GENERAL RULE.—In the case of an eligible taxpayer other than a corporation, gross income for purposes of the Internal Revenue Code of 1986 shall not include any amount received under section 402 of the Energy Policy Act of 2005.
“(b) REDUCTION IN BASIS.—The basis of any property subject to the allowance for depreciation under the Internal Revenue Code of 1986 which is acquired with any amount to which subsection (a) applies during the 12-month period beginning on the day such amount is received shall be reduced by an amount equal to such amount. The excess (if any) of such amount over the amount of the reduction under the preceding sentence shall be applied to the reduction (as of the last day of the period specified in the preceding sentence) of the basis of any other property held by the taxpayer. The particular properties to which the reductions required by this subsection are allocated shall be determined by the Secretary of the Treasury (or the Secretary's delegate) under regulations similar to the regulations under section 362(c)(2) of such Code.
“(c) LIMITATION TO AMOUNTS WHICH WOULD BE CONTRIBUTIONS TO CAPITAL.—Subsection (a) shall not apply to any amount unless such amount, if received by a corporation, would be excluded from gross income under section 118 of the Internal Revenue Code of 1986.
“(d) ELIGIBLE TAXPAYER.—For purposes of this section, with respect to any amount received under section 402 of the Energy Policy Act of 2005, the term ‘‘eligible taxpayer’’ means a taxpayer that makes a payment to the Secretary of the Treasury (or the Secretary's delegate) equal to 1.18 percent of the amount so received. Such payment shall be made at such time and in such manner as such Secretary (or the Secretary's delegate) shall prescribe. In the case of a partnership, such Secretary (or the Secretary's delegate) shall prescribe regulations to determine the allocation of such payment amount among the partners.
“(e) EFFECTIVE DATE.—This section shall apply to amounts received under section 402 of the Energy Policy Act of 2005 in taxable years beginning after December 31, 2011.”
INDIVIDUAL INDIAN MONEY ACCOUNT LITIGATION SETTLEMENT
Section 101(f) of Pub. L. 111-291 provided that:
“(f) Taxation and Other Benefits-
“(1) INTERNAL REVENUE CODE- For purposes of the Internal Revenue Code of 1986, amounts received by an individual Indian as a lump sum or a periodic payment pursuant to the Settlement shall not be—
“(A) included in gross income; or
“(B) taken into consideration for purposes of applying any provision of the Internal Revenue Code that takes into account excludable income in computing adjusted gross income or modified adjusted gross income, including section 86 of that Code (relating to Social Security and tier 1 railroad retirement benefits).
“(2) OTHER BENEFITS- Notwithstanding any other provision of law, for purposes of determining initial eligibility, ongoing eligibility, or level of benefits under any Federal or federally assisted program, amounts received by an individual Indian as a lump sum or a periodic payment pursuant to the Settlement shall not be treated for any household member, during the 1-year period beginning on the date of receipt—
“(A) as income for the month during which the amounts were received; or
“(B) as a resource.”
EXCLUSION OF CARS PROGRAM VOUCHERS FROM INCOME
Section 1302(h) of Pub. L. 111-32 provided that:
“(h) EXCLUSION OF VOUCHERS FROM INCOME.—
“(1) FOR PURPOSES OF ALL FEDERAL AND STATE PROGRAMS.—A voucher issued under this program [Consumer Assistance to Recycle and Save (CARS)] or any payment made for such a voucher pursuant to subsection (a)(3) shall not be regarded as income and shall not be regarded as a resource for the month of receipt of the voucher and the following 12 months, for purposes of determining the eligibility of the recipient of the voucher (or the recipient's spouse or other family or household members) for benefits or assistance, or the amount or extent of benefits or assistance, under any Federal or State program.
“(2) FOR PURPOSES OF TAXATION.—A voucher issued under the program or any payment made for such a voucher pursuant to subsection (a)(3) shall not be considered as gross income of the purchaser of a vehicle for purposes of the Internal Revenue Code of 1986.”
ECONOMIC RECOVERY PAYMENT TO RECIPIENTS OF SOCIAL SECURITY, SUPPLEMENTAL SECURITY INCOME, RAILROAD RETIREMENT BENEFITS, AND VETERANS DISABILITY COMPENSATION OR PENSION BENEFITS
Section 2201(c) of Pub. L. 111-5 provided that:
“(c) TREATMENT OF PAYMENTS.—
“ (1) PAYMENT TO BE DISREGARDED FOR PURPOSES OF ALL FEDERAL AND FEDERALLY ASSISTED PROGRAMS.—A payment under subsection (a) shall not be regarded as income and shall not be regarded as a resource for the month of receipt and the following 9 months, for purposes of determining the eligibility of the recipient (or the recipient's spouse or family) for benefits or assistance, or the amount or extent of benefits or assistance, under any Federal program or under any State or local program financed in whole or in part with Federal funds.
“(2) PAYMENT NOT CONSIDERED INCOME FOR PURPOSES OF TAXATION.—A payment under subsection (a) shall not be considered as gross income for purposes of the Internal Revenue Code of 1986.
“(3) PAYMENTS PROTECTED FROM ASSIGNMENT.—The provisions of sections 207 and 1631(d)(1) of the Social Security Act (42 U.S.C. 407, 1383(d)(1)), section 14(a) of the Railroad Retirement Act of 1974 (45 U.S.C. 231m(a)), and section 5301 of title 38, United States Code, shall apply to any payment made under subsection (a) as if such payment was a benefit payment or cash benefit to such individual under the applicable program described in subparagraph (B) or (C) of subsection (a)(1).
“(4) PAYMENTS SUBJECT TO OFFSET.—Notwithstanding paragraph (3), for purposes of section 3716 of title 31, United States Code, any payment made under this section shall not be considered a benefit payment or cash benefit made under the applicable program described in subparagraph (B) or (C) of subsection (a)(1) and all amounts paid shall be subject to offset to collect delinquent debts.”
EXCLUSION FROM INCOME FOR PAYMENTS FROM THE HOKIE SPIRIT MEMORIAL FUND.
Section 1 of Pub. L. 110-141 provided that: “For purposes of the Internal Revenue Code of 1986, gross income shall not include any amount received from the Virginia Polytechnic Institute & State University, out of amounts transferred from the Hokie Spirit Memorial Fund established by the Virginia Tech Foundation, an organization organized and operated as described in section 501(c)(3) of the Internal Revenue Code of 1986, if such amount is paid on account of the tragic event on April 16, 2007, at such university.”
WITHDRAWAL OF CERTAIN FEDERAL LAND AND INTERESTS IN CERTAIN FEDERAL LAND FROM LOCATION, ENTRY, AND PATENT UNDER THE MINING LAWS AND DISPOSITION UNDER THE MINERAL AND GEOTHERMAL LEASING LAWS
Section 403(c) of Pub. L. 109-432, div. C, provided that:
“(c) Tax Incentive for Sale of Existing Mineral and Geothermal Rights to Tax-Exempt Entities-
“(1) EXCLUSION.—For purposes of the Internal Revenue Code of 1986, gross income shall not include 25 percent of the qualifying gain from a conservation sale of a qualifying mineral or geothermal interest.
“(2) QUALIFYING GAIN.—For purposes of this subsection, the term “qualifying gain” means any gain which would be recognized as long-term capital gain under such Code.
“(3) CONSERVATION SALE.—For purposes of this subsection, the term “conservation sale” means a sale which meets the following requirements:
“(A) TRANSFEREE IS AN ELIGIBLE ENTITY.—The transferee of the qualifying mineral or geothermal interest is an eligible entity.
“(B) QUALIFYING LETTER OF INTENT REQUIRED.—At the time of the sale, such transferee provides the taxpayer with a qualifying letter of intent.
“(C) NONAPPLICATION TO CERTAIN SALES.—The sale is not made pursuant to an order of condemnation or eminent domain.
“(4) QUALIFYING MINERAL OR GEOTHERMAL INTEREST.—For purposes of this subsection—
“(A) IN GENERAL.—The term “qualifying mineral or geothermal interest” means an interest in any mineral or geothermal deposit located on eligible Federal land which constitutes a taxpayer's entire interest in such deposit.
“(B) ENTIRE INTEREST.—For purposes of subparagraph (A)—
“ (i) an interest in any mineral or geothermal deposit is not a taxpayer's entire interest if such interest in such mineral or geothermal deposit was divided in order to avoid the requirements of such subparagraph or section 170(f)(3)(A) of such Code, and
“(ii) a taxpayer's entire interest in such deposit does not fail to satisfy such subparagraph solely because the taxpayer has retained an interest in other deposits, even if the other deposits are contiguous with such certain deposit and were acquired by the taxpayer along with such certain deposit in a single conveyance.
“(5) OTHER DEFINITIONS.—For purposes of this subsection—
“(A) ELIGIBLE ENTITY.—The term “eligible entity” means—
“(i) a governmental unit referred to in section 170(c)(1) of such Code, or an agency or department thereof operated primarily for 1 or more of the conservation purposes specified in clause (i), (ii), or (iii) of section 170(h)(4)(A) of such Code, or
“(ii) an entity which is—
“(I) described 170(b)(1)(A)(vi) in section or section 170(h)(3)(B) of such Code, and
“(II) organized and at all times operated primarily for 1 or more of the conservation purposes specified in clause (i), (ii), or (iii) of section 170(h)(4)(A) of such Code.
“(B) QUALIFYING LETTER OF INTENT.—The term “qualifying letter of intent” means a written letter of intent which includes the following statement: “The transferee's intent is that this acquisition will serve 1 or more of the conservation purposes specified in clause (i), (ii), or (iii) of section 170(h)(4)(A) of the Internal Revenue Code of 1986, that the transferee's use of the deposits so acquired will be consistent with section 170(h)(5) of such Code, and that the use of the deposits will continue to be consistent with such section, even if ownership or possession of such deposits is subsequently transferred to another person.”.
“(6) TAX ON SUBSEQUENT TRANSFERS.—
“(A) IN GENERAL.—A tax is hereby imposed on any subsequent transfer by an eligible entity of ownership or possession, whether by sale, exchange, or lease, of an interest acquired directly or indirectly in—
“(i) a conservation sale described in paragraph (1), or
“(ii) a transfer described in clause (i), (ii), or (iii) of subparagraph (D).
“(B) AMOUNT OF TAX.—The amount of tax imposed by subparagraph (A) on any transfer shall be equal to the sum of—
“(i) 20 percent of the fair market value (determined at the time of the transfer) of the interest the ownership or possession of which is transferred, plus
“(ii) the product of—
“(I) the highest rate of tax specified in section 11 of such Code, times
“(II) any gain or income realized by the transferor as a result of the transfer.
“(C) LIABILITY.—The tax imposed by subparagraph (A) shall be paid by the transferor.
“(D) RELIEF FROM LIABILITY.—The person (otherwise liable for any tax imposed by subparagraph (A)) shall be relieved of liability for the tax imposed by subparagraph (A) with respect to any transfer if—
“(i) the transferee is an eligible entity which provides such person, at the time of transfer, a qualifying letter of intent,
“(ii) in any case where the transferee is not an eligible entity, it is established to the satisfaction of the Secretary of the Treasury, that the transfer of ownership or possession, as the case may be, will be consistent with section 170(h)(5) of such Code, and the transferee provides such person, at the time of transfer, a qualifying letter of intent, or
“(iii) tax has previously been paid under this paragraph as a result of a prior transfer of ownership or possession of the same interest.
“(E) ADMINISTRATIVE PROVISIONS.—For purposes of subtitle F of such Code, the taxes imposed by this paragraph shall be treated as excise taxes with respect to which the deficiency procedures of such subtitle apply.
“(7) REPORTING.—The Secretary of the Treasury may require such reporting as may be necessary or appropriate to further the purpose under this subsection that any conservation use be in perpetuity.”
Section 403(d) of Pub. L. 109-432, div. C, provided that: “subsection (c) shall apply to sales occurring on or after the date of the enactment of this Act [Enacted: Dec. 20, 2006].”
INCOME INCLUSION SPREAD OVER 3 YEAR PERIOD FOR QUALIFIED HURRICANE KATRINA DISTRIBUTIONS
Section 101(e) of Pub. L. 109-73, before repeal by Pub. L. 109-135, Sec. 201(b)(4) (effective Dec. 21, 2005) provided that:
“(1) IN GENERAL.—In the case of any qualified Hurricane Katrina distribution, unless the taxpayer elects not to have this subsection apply for any taxable year, any amount required to be included in gross income for such taxable year shall be so included ratably over the 3-taxable year period beginning with such taxable year.
“(2) SPECIAL RULE.—For purposes of paragraph (1), rules similar to the rules of subparagraph (E) of section 408A(d)(3) of such Code shall apply.”
MILEAGE REIMBURSEMENTS TO CHARITABLE VOLUNTEERS EXCLUDED FROM GROSS INCOME
Section 304 of Pub. L. 109-73 provided that:
“(a) IN GENERAL.—For purposes of the Internal Revenue Code of 1986, gross income of an individual for taxable years ending on or after August 25, 2005, does not include amounts received, from an organization described in section 170(c) of such Code, as reimbursement of operating expenses with respect to use of a passenger automobile for the benefit of such organization in connection with providing relief relating to Hurricane Katrina during the period beginning on August 25, 2005, and ending on December 31, 2006. The preceding sentence shall apply only to the extent that the expenses which are reimbursed would be deductible under chapter 1 of such Code if section 274(d) of such Code were applied—
“(1) by using the standard business mileage rate in effect under section 162(a) at the time of such use, and
“(2) as if the individual were an employee of an organization not described in section 170(c) of such Code.
“(b) APPLICATION TO VOLUNTEER SERVICES ONLY.—Subsection (a) shall not apply with respect to any expenses relating to the performance of services for compensation.
“(c) NO DOUBLE BENEFIT.—No deduction or credit shall be allowed under any other provision of such Code with respect to the expenses excludable from gross income under subsection (a).”
EXCLUSIONS OF CERTAIN CANCELLATIONS OF INDEBTEDNESS BY REASON OF HURRICANE KATRINA
Section 401 of Pub. L. 109-73 provided that:
“(a) IN GENERAL.—For purposes of the Internal Revenue Code of 1986, gross income shall not include any amount which (but for this section) would be includible in gross income by reason of the discharge (in whole or in part) of indebtedness of a natural person described in subsection (b) by an applicable entity (as defined in section 6050P(c)(1) of such Code).
“(b) PERSONS DESCRIBED.—A natural person is described in this subsection if the principal place of abode of such person on August 25, 2005, was located—
“(1) in the core disaster area, or
“(2) in the Hurricane Katrina disaster area (but outside the core disaster area) and such person suffered economic loss by reason of Hurricane Katrina.
“(c) EXCEPTIONS.—
“(1) BUSINESS INDEBTEDNESS.—Subsection (a) shall not apply to any indebtedness incurred in connection with a trade or business.
“(2) REAL PROPERTY OUTSIDE CORE DISASTER AREA.—Subsection (a) shall not apply to any discharge of indebtedness to the extent that real property constituting security for such indebtedness is located outside of the Hurricane Katrina disaster area.
“(d) DENIAL OF DOUBLE BENEFIT.—For purposes of the Internal Revenue Code of 1986, the amount excluded from gross income under subsection (a) shall be treated in the same manner as an amount excluded under section 108(a) of such Code.
“(e) EFFECTIVE DATE.—This section shall apply to discharges made on or after August 25, 2005, and before January 1, 2007.”
EXCLUSION OF CERTAIN CANCELLATIONS
Section 105 of Pub. L. 107-134 provided that:
“(a) IN GENERAL— For purposes of the Internal Revenue Code of 1986—
“(1) gross income shall not include any amount which (but for this section) would be includible in gross income by reason of the discharge (in whole or in part) of indebtedness of any taxpayer if the discharge is by reason of the death of an individual incurred as the result of the terrorist attacks against the United States on September 11, 2001, or as the result of illness incurred as a result of an attack involving anthrax occurring on or after September 11, 2001, and before January 1, 2002, and
“(2) return requirements under section 6050P of such Code shall not apply to any discharge described in paragraph (1).
TREATMENT OF LOSS COMPENSATION
Section 301(b) of Pub. L. 107-42 provided that:
“(b) Treatment of Loss Compensation.—Nothing any any provision of law shall be construed to exclude from gross income under the Internal Revenue Code of 1986 any compensation received under section 101(a)(2) [Aviation Disaster Relief] of this Act.”
NO FEDERAL INCOME TAX ON RESTITUTION RECEIVED BY VICTIMS OF THE NAZI REGIME OR THEIR HEIRS OR ESTATES
Section 803 of Pub. L. 107-16 provided that:
“(a) IN GENERAL.—For purposes of the Internal Revenue Code of 1986, any excludable restitution payments received by an eligible individual (or the individual's heirs or estate) and any excludable interest—
“(1) shall not be included in gross income; and
“(2) shall not be taken into account for purposes of applying any provision of such Code which takes into account excludable income in computing adjusted gross income, including section 86 of such Code (relating to taxation of Social Security benefits).
For purposes of such Code, the basis of any property received by an eligible individual (or the individual's heirs or estate) as part of an excludable restitution payment shall be the fair market value of such property as of the time of the receipt.
“(b) ELIGIBLE INDIVIDUAL.—For purposes of this section, the term “eligible individual” means a person who was persecuted on the basis of race, religion, physical or mental disability, or sexual orientation by Nazi Germany, any other Axis regime, or any other Nazi-controlled or Nazi-allied country.
“(c) EXCLUDABLE RESTITUTION PAYMENT.—For purposes of this section, the term “excludable restitution payment" means any payment or distribution to an individual (or the individual's heirs or estate) which—
“(1) is payable by reason of the individual's status as an eligible individual, including any amount payable by any foreign country, the United States of America, or any other foreign or domestic entity, or a fund established by any such country or entity, any amount payable as a result of a final resolution of a legal action, and any amount payable under a law providing for payments or restitution of property;
“(2) constitutes the direct or indirect return of, or compensation or reparation for, assets stolen or hidden from, or otherwise lost to, the individual before, during, or immediately after World War II by reason of the individual's status as an eligible individual, including any proceeds of insurance under policies issued on eligible individuals by European insurance companies immediately before and during World War II; or
“(3) consists of interest which is payable as part of any payment or distribution described in paragraph (1) or (2).
“(d) EXCLUDABLE INTEREST.—For purposes of this section, the term “excludable interest” means any interest earned by—
“(1) escrow accounts or settlement funds established pursuant to the settlement of the action entitled “In re: Holocaust Victim Assets Litigation,” (E.D.N.Y.) C.A. No. 96-4849,
“(2) funds to benefit eligible individuals or their heirs created by the International Commission on Holocaust Insurance Claims as a result of the Agreement between the Government of the United States of America and the Government of the Federal Republic of Germany concerning the Foundation “Remembrance, Responsibility, and Future,” dated July 17, 2000, or
“(3) similar funds subject to the administration of the United States courts created to provide excludable restitution payments to eligible individuals (or eligible individuals' heirs or estates).
(e) EFFECTIVE DATE.—
“(1) IN GENERAL.—This section shall apply to any amount received on or after January 1, 2000.
“(2) NO INFERENCE.—Nothing in this Act shall be construed to create any inference with respect to the proper tax treatment of any amount received before January 1, 2000.”
Section 901 (Sunset of Provisions of Act) of Pub. L. 107-16, as amended by Pub. L. 107-358, provided that:
“(a) IN GENERAL.—All provisions of, and amendments made by, this Act shall not apply—
“(1) to taxable, plan, or limitation years beginning after December 31, 2010, or
“(2) in the case of title V, to estates of decedents dying, gifts made, or generation skipping transfers, after December 31, 2010.
“(b) APPLICATION OF CERTAIN LAWS.—The Internal Revenue Code of 1986 and the Employee Retirement Income Security Act of 1974 shall be applied and administered to years, estates, gifts, and transfers described in subsection (a) as if the provisions and amendments described in subsection (a) had never been enacted.
“(c) EXCEPTION.—Subsection (a) shall not apply to section 803 (relating to no federal income tax on restitution received by victims of the Nazi regime or their heirs or estates).”
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, 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, 1061(a), July 18, 1984, 98 Stat. 1046; Pub. L. 99-514, 2, Oct. 22, 1986, 100 Stat. 2095; Pub. L. 100-647, title VI, 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))."]
FRINGE BENEFIT REGULATIONS
Pub. L. 95-427, 1, Oct. 7, 1978, 92 Stat. 996, as amended by Pub. L. 96-167, 1, Dec. 29, 1979, 93 Stat. 1275; Pub. L. 97-34, title VIII, 801, Aug. 13, 1981, 95 Stat. 349; Pub. L. 99-514, 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 Codeof 1986 [formerly I.R.C. 1954].”
Pub. L. 95-615, 3, Nov. 8, 1978, 92 Stat. 3097, as amended by Pub. L. 99-514, 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.
CANCELLATION OF CERTAIN STUDENT LOANS
Pub. L. 94-455, title XXI, 2117, Oct. 4, 1976, 90 Stat. 1911, as amended by Pub. L. 95-600, title I, 162, Nov. 6, 1978, 92 Stat. 2810; Pub. L. 99-514, 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, 2119, Oct. 4, 1976, 90 Stat. 1912, as amended by Pub. L. 99-514, 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, 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.
TERMINATION DATE OF 1978 AMENDMENT
Pub. L. 95-615, 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 sections 1, 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].”