236 PUBLIC LAWS--CH. 210-MAY 29, 1944 81 81 I) S 8tat. 12. 26u. .S . I 23; Supp. II, 123. Ante, pp. 34-36; 6@pra. --
SEC. 9. OPTIONAL STANDARD DEDUCTION. (a) IN GENtAL.-Section 23 is amended by adding at the end thereof a new subsection to read as follows: "(aa) OPTloNAL STANDARD DEDUCTION FOR INDIVIDUALS.- (1) AL.OWANCE. -In the case of an individual, at his election a standard deduction as follows: "(A) Adjusted Gross Income $5,000 or More. -If his adjusted gross income is $5,000 or more, the standard deduc- tion shall be $500. "(B) Adjusted Gross Income Less Than $5,000.-If his adjusted gross income is less than $5,000, the standard deduc- tion shall be an amount equal to 10 per centum of the adjusted gross income upon the basis of which the tax appli- cable to the adjusted gross income of the taxpayer is deter- mined under the tax table provided in section 400. "(2) IN LIT OF CRBTAIN DEDUCTIONS AID ClEDrrs. -T he stand- ard deduction shall be in lieu of: (A) all deductions other than "(4) DEDUCTIONS ATTRIBUTABLE TO RENTS AND ROYALTIES.-The deductions (other than those provided in paragraph (1), (5), or (6)) allowed by section 23 which are attributable to property held for the production of rents or royalties; "(5) CERTAIN DEDUCTIONS OF LIFE TENANTS AND INCOME BENE- FICIARIES OF ROPERTo. - The deductions (other than those pro- vided in paragraph (1)) for depreciation and depletion, allowed 3tast. 1. by section 23 (1) and (m) to a life tenant of property or to an lpp. II, 23(). income beneficiary of property held in trust; and "(6) LOSSES FROM SALES OR EXCHANGE OF PROPERTY. -- The deduc- tions (other than those provided in paragraph (1)) allowed by section 23 as losses from the sale or exchange of property." 5i Stat. 14; 56 tat. (b) CHARITABLE CONTRIBUTIONS. -Section 23 (o) (relating to the 26 u.s . c . 23(o); so-called "charitable deduction") is amended by striking out "net oIp.I,23(O). income as computed without the benefit of this subsection or of sub- section (x)" and inserting in lieu thereof "adjusted gross income". 26 tU.. C., p. (c) MEDICAL EXPENSE DEDUCTION.- Section 23 (x) (relating to the I, 3(x).. so-called "medical expense deduction") is amended to read as follows: "(x) MEDICAL, DrNTAL, ETC., EXPENBsE. -Expenses paid during the taxable year, not compensated for by insurance or otherwise, for medical care of the taxpayer, his spouse, or a dependent specified in Pot., p.23 section 25 (b) (3), to the extent that such expenses exceed 5 per centum of the adjusted gross income. If only one surtax exemption Por, p. 238 is allowed under section 25 (b) for the taxable year, the maximum deduction for the taxable year shall be not in excess of $1,250. If more than one surtax exemption is so allowed, the maximum deduc- Mdl tion shall be not in excess of $2,500. The term 'medical care', as used in this subsection, shall include amounts paid for the diagnosis, cure, mitigation, treatment, or prevention of disease, or for the purpose of affecting any structure or function of the body (including amounts paid for accident or health insurance)." (d) CAPrrAL GAINS AND LossEs.- s26 aS C.sp (1) DEFINITION OF CAPrrAL NET GAIN.-- Section 117 (a) (10) II, i i7 (a) (10) (). (B) is amended by adding at the end thereof a new sentence to read as follows: "If the tax is to be computed under Supple- t.,p .22; potp. ment T, 'net income' as used in this subparagraph shall be read as 'adjusted gross income'." 58 Stat. 52 26U.8.C 8upp. (2) LIMITATION ON CAPITAL LossEs. -Section 117 (d) (2) is II, 17(d)(25. amended by adding at the end thereof a new sentence to read At.e,p.23; pt p. a follows: "If the tax is to be computed under Supplement T, 'net income' as used in this paragraph shall be read as 'adjusted gross income'." [58 STAT. I (
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