Page:United States Statutes at Large Volume 78.djvu/148

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[78 STAT. 106]
PUBLIC LAW 88-000—MMMM. DD, 1964
[78 STAT. 106]

106

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PUBLIC LAW 88-272-FEB. 26, 1964

[78 STAT.

"SEC. 1301. LIMITATION ON TAX. "If an eligible individual has averagable income for the computation year, and if the amount of such income exceeds $3,000, then the ^^^ imposed by section 1 for the computation year which is attributable to averagable income shall be 5 times the increase in tax under such section which would result from adding 20 percent of such income to the sum of— "^1) 1331^ percent of average base period income, and "(2) the amount (if any) of the average base period capital gain net income. "SEC. 1302. DEFINITION OF AVERAGABLE INCOME; RELATED DEFINITIONS. " (a) AVERAGABLE INCOME.—For purposes of this part— "(1) IN GENERAL.—The term 'averagable income' means the amount (if any) by which adjusted taxable income exceeds ISZy^ percent of average base period income. " (2) ADJUSTMENT I N CERTAIN CASES FOR CAPITAL, GAINS.—If—

" (A) the average base period capital gain net income, exceeds " (B) the capital gain net income for the computation year, then the term 'averagable income" means the amount determined under paragraph (1), reduced by an amount equal to such excess. "(b) ADJUSTED TAXABLE INCOME.—For purposes of this part, the term 'adjusted taxable income' means the taxable income for the computation year, decreased by the sum of the following amounts: " (1) CAPITAL GAIN NET INCOME FOR THE COMPUTATION YEAR.—

The amount (if any) of the capital gain net income for the computation year. " (2) INCOME ATTRIBUTABLE TO GIFTS, BEQUESTS, ETC.—

26 USC 2.

" (A) IN GENERAL.—The amount of net income attributable to an interest in property where such interest was received by the taxpayer as a gift, bequest, devise, or inheritance during the computation year or any case period year. This paragraph shall not apply to gifts, bequests, devises, or inheritances between husband and wife if they make a joint return, or if one of them makes a return as a surviving spouse (as defined in section 2(b)), for the computation year. " (B) AMOUNT OF NET INCOME.—Unless the taxpayer other-

26 USC 2001, 2501.

wise establishes to the satisfaction of the Secretary or his delegate, the amount of net income for any taxable year attributable to an interest described in subparagraph (A) shall be deemed to be 6 percent of the fair market value of such interest (as determined in accordance with the provisions of chapter 11 or chapter 12, as the case may be). " (C) LIMITATION.—This paragraph shall apply only if the sum of the net incomes attributable to interests described in subparagraph (A) exceeds $3,000. " (D) N E T INCOME.—For purposes of this paragraph, the term 'net income' means, with respect to any interest, the excess of— " (i) items of gross income attributable to such interest, over "(ii) the deductions properly allocable to or chargeable against such items. For purposes of computing such net income, capital gains and losses shall not be taken into account. "(3) WAGEUIN<4 INCOME.—The amount (if any) by which the gains from wagering transactions for the computation year exceed^the losses from such transactions.