SIXTY-THIRD CONGRESS. Sess. I. Ch. 16. 1913. 167 pany, or association is a mere holding company, or that the gains and , IN°‘f“” “‘*°“‘ profits are permitted to accumulate beyond the reasonable needs of the mm usiness shall be prima facie evidence of a fraudulent purpose to escape such tax; but the fact that the gains and profits are in any case - °°“dm°“‘ mitted to accumulate and become surplus shall not be construedwds evidence of a purpose to escape the said tax in such case unless the Secretary of the Treasury shall certify that in his opinion such accumulation is rmreasonable or the purposes of the business. When re- ,,,§§§d**"§,‘3",'j,f,Q’,,§’,,F°,,’,‘,§,_f quested by the Commissioner of Internal Revenue, or any district collector of internal revenue, such corporation, joint·stock company, or association shall forward to him a correct statement of suc profits and the names of the individuals who would be entitled to the same if distributed. B. That, subject only to such exemptions and deductions as are ,,,£,‘§,i,‘Q‘“’““"“’“°‘°°* hereinafter allowed, the net income of a taxable person shall include gains, profits, and income derived from salaries, wages, or compensation for personal service of whatever kind and in whatever form paid, or from professions, vocations, businesses, trade, commerce, or sales, or dealings in property, whether real or personal, growing out of the ownership or use of or interest in real or personal propediy, also from interest, rent, dividends, securities, or the transaction o andy lawful business carried on for gain or proit, or gains or profits an income derived from any source whatever, including the income from but not the value of prplperty acquired lgy gift, bequest, devise, or descent: ,,,w,,,_ Provided, That e proceeds of e insurance policies paid tgrtpon the mm death of the]-person insured or payments made by or credi to the ’ °°°’ ‘ msured, on e insurance, endowment, or contracts, upon the' return thereof to the insured at the maturity of e term mentioned in the contract, or- upon surrender of contract, shall not be included as m°°¤i°' - . Deducdonsalbwed That in computing net income for the purpose of the normal tax Bmw ° there shall be allowed as deductions: First, the necessary expenses interest, ¤¤ iiebrs, actually paid in carrying on any business, not including personal, l°S°°°’° °‘ living, or family expenses; second, all interest paid within the year by a taxable person on indebtedness; third, all national, State, county, school, and municipal taxes paid within the year, not mcluding those assessed against local benefits; fourth, losses actually sustained during the year, incurred in trade or arising from Eros, storms, or shipwreck, and not compensated for by insurance or otherwise; fifth, de ts due to the taxpayer actually ascertained to be worthless and charged off within the year; sixth, a reasonable allowance for the exhaustion, n§;:rg;*°'***¤¤ ¤* wear and tear of property arising out of its use or employment in ` the business, not to excee , in the case of mines, 5 per centum of the gross value at the mine of the output for the year for which the computation is made, but no deduction shall be made for any amount of expense of restoring property or making good the exhaustion thereof Pr _ for which an allowance is or has been made: Promlled, That no B.,?,”,§°;m¤, mg deduction shall be allowed for any amount paid out for new build- °’°°P‘°°· mes, permanent improvements, or betterments, made to increase the Di id ds vsilue of any pro erty or estate; seventh, the amount received as panjgs °§m¥°§'§.°‘§§§ dividends upon tile stock or from the net earnings of any corpora- °“'”*¤$°’· tion, jomt stock company, association, or insurance company which is taxable upon its net incornc as hereinafter provided; e`¤· th, the t,,,_“§'§'§°,:BeY,°Qdm‘§l§ amount of mcome, the tax u on which has been paid or wilthheld for ¤°¤*°°· payment at the source of this income, under the provisions of tlus Ex°°P“°°· section, provided that whenever the tax upon the income of a person is required to be withheld and aid at the source as hereinafter re- · quired, if such annual income dldes not exceed the sum of $3,000 or is not fixed or certain, or is indennite or irregular as to amount or time of accrual, the same shall not be deducted in the personal return of such person.
