[Code of Federal Regulations]
[Title 26, Volume 2]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR1.61-1]

[Page 5-11]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 1_INCOME TAXES--Table of Contents
 
Sec. 1.61-1  Gross income.




                      COMPUTATION OF TAXABLE INCOME

  Definition of Gross Income, Adjusted Gross Income, and Taxable Income

Sec.
1.61-1 Gross income.
1.61-2 Compensation for services, including fees, commissions, and 
          similar items.
1.61-2T Taxation of fringe benefits--1985 through 1988 (temporary).
1.61-3 Gross income derived from business.
1.61-4 Gross income of farmers.
1.61-5 Allocations by cooperative associations; per-unit retain 
          certificates--tax treatment as to cooperatives and patrons.
1.61-6 Gains derived from dealings in property.
1.61-7 Interest.
1.61-8 Rents and royalties.
1.61-9 Dividends.
1.61-10 Alimony and separate maintenance payments; annuities; income 
          from life insurance and endowment contracts.
1.61-11 Pensions.
1.61-12 Income from discharge of indebtedness.
1.61-13 Distributive share of partnership gross income; income in 
          respect of a decedent; income from an interest in an estate or 
          trust.
1.61-14 Miscellaneous items of gross income.
1.61-15 Options received as payment of income.
1.61-21 Taxation of fringe benefits.
1.61-22 Taxation of split-dollar life insurance arrangements.
1.62-1 Adjusted gross income.
1.62-1T Adjusted gross income (temporary).
1.62-2 Reimbursements and other expense allowance arrangements.
1.63-1 Change of treatment with respect to the zero bracket amount and 
          itemized deductions.
1.63-2 Cross reference.
1.66-1 Treatment of community income.
1.66-2 Treatment of community income where spouses live apart.
1.66-3 Denial of the Federal income tax benefits resulting from the 
          operation of community property law where spouse not notified.
1.66-4 Request for relief from the Federal income tax liability 
          resulting from the operation of community property law.
1.66-5 Effective date.
1.67-1T 2-percent floor on miscellaneous itemized deductions 
          (temporary).
1.67-2T Treatment of pass-through entities (temporary).
1.67-3 Allocation of expenses by real estate mortgage investment 
          conduits.
1.67-3T Allocation of expenses by real estate mortgage investment 
          conduits (temporary).
1.67-4T Allocation of expenses by nongrantor trusts and estates 
          (temporary). [Reserved]

               Items Specifically Included in Gross Income

1.71-1 Alimony and separate maintenance payments; income to wife or 
          former wife.
1.71-1T Alimony and separate maintenance payments (temporary).
1.71-2 Effective date; taxable years ending after March 31, 1954, 
          subject to the Internal Revenue Code of 1939.
1.72-1 Introduction.
1.72-2 Applicability of section.
1.72-3 Excludable amounts not income.
1.72-4 Exclusion ratio.
1.72-5 Expected return.
1.72-6 Investment in the contract.
1.72-7 Adjustment in investment where a contract contains a refund 
          feature.
1.72-8 Effect of certain employer contributions with respect to premiums 
          or other consideration paid or contributed by an employee.
1.72-9 Tables.
1.72-10 Effect of transfer of contracts on investment in the contract.
1.72-11 Amounts not received as annuity payments.
1.72-12 Effect of taking an annuity in lieu of a lump sum upon the 
          maturity of a contract.
1.72-13 Special rule for employee contributions recoverable in three 
          years.
1.72-14 Exceptions from application of principles of section 72.
1.72-15 Applicability of section 72 to accident or health plans.
1.72-16 Life insurance contracts purchased under qualified employee 
          plans.
1.72-17 Special rules applicable to owner-employees.
1.72-17A Special rules applicable to employee annuities and 
          distributions under deferred compensation plans to self-
          employed individuals and owner-employees.
1.72-18 Treatment of certain total distributions with respect to self-
          employed individuals.
1.72(e)-1T Treatment of distributions where substantially all 
          contributions are employee contributions (temporary).
1.72(p)-1 Loans treated as distributions.
1.73-1 Services of child.
1.74-1 Prizes and awards.
1.75-1 Treatment of bond premiums in case of dealers in tax-exempt 
          securities.

[[Page 6]]

1.77-1 Election to consider Commodity Credit Corporation loans as 
          income.
1.77-2 Effect of election to consider commodity credit loans as income.
1.78-1 Dividends received from certain foreign corporations by certain 
          domestic corporations choosing the foreign tax credit.
1.79-0 Group-term life insurance--definitions of certain terms.
1.79-1 Group-term life insurance--general rules.
1.79-2 Exceptions to the rule of inclusion.
1.79-3 Determination of amount equal to cost of group-term life 
          insurance.
1.79-4T Questions and answers relating to the nondiscrimination 
          requirements for group-term life insurance (temporary).
1.82-1 Payments for or reimbursements of expenses of moving from one 
          residence to another residence attributable to employment or 
          self-employment.
1.83-1 Property transferred in connection with the performance of 
          services.
1.83-2 Election to include in gross income in year of transfer.
1.83-3 Meaning and use of certain terms.
1.83-4 Special rules.
1.83-5 Restrictions that will never lapse.
1.83-6 Deduction by employer.
1.83-7 Taxation of nonqualified stock options.
1.83-7T Taxation of nonqualified stock options (Temporary).
1.83-8 Applicability of section and transitional rules.
1.84-1 Transfer of appreciated property to political organizations.
1.85-1 Unemployment compensation.
1.88-1 Nuclear decommissioning costs.

              Items Specifically Excluded From Gross Income

1.101-1 Exclusion from gross income of proceeds of life insurance 
          contracts payable by reason of death.
1.101-2 Employees' death benefits.
1.101-3 Interest payments.
1.101-4 Payment of life insurance proceeds at a date later than death.
1.101-5 Alimony, etc., payments.
1.101-6 Effective date.
1.101-7 Mortality table used to determine exclusion for deferred 
          payments of life insurance proceeds.
1.102-1 Gifts and inheritances.
1.103-1 Interest upon obligations of a State, territory, etc.
1.103-2 Dividends from shares and stock of Federal agencies or 
          instrumentalities.
1.103-3 Interest upon notes secured by mortgages executed to Federal 
          agencies or instrumentalities.
1.103-4 Interest upon United States obligations.
1.103-5 Treasury bond exemption in the case of trusts or partnerships.
1.103-6 Interest upon United States obligations in the case of 
          nonresident aliens and foreign corporations, not engaged in 
          business in the United States.
1.103-7 Industrial development bonds.
1.103-8 Interest on bonds to finance certain exempt facilities.
1.103-9 Interest on bonds to finance industrial parks.
1.103-10 Exemption for certain small issues of industrial development 
          bonds.
1.103-11 Bonds held by substantial users.
1.103-16 Obligations of certain volunteer fire departments.
1.103(n)-1T Limitation on aggregate amount of private activity bonds 
          (temporary).
1.103(n)-2T Private activity bond defined (temporary).
1.103(n)-3T Private activity bond limit (temporary).
1.103(n)-4T Elective carryforward of unused private activity bond limit 
          (temporary).
1.103(n)-5T Certification of no consideration for allocation 
          (temporary).
1.103(n)-6T Determinations of population (temporary).
1.103(n)-7T Election to allocate State ceiling to certain facilities for 
          local furnishing of electricity (temporary).
1.103A-2 Qualified mortgage bond.
1.104-1 Compensation for injuries or sickness.
1.105-1 Amounts attributable to employer contributions.
1.105-2 Amounts expended for medical care.
1.105-3 Payments unrelated to absence from work.
1.105-4 Wage continuation plans.
1.105-5 Accident and health plans.
1.105-6 Special rules for employees retired before January 27, 1975.
1.105-11 Self-insured medical reimbursement plan.
1.106-1 Contributions by employer to accident and health plans.
1.107-1 Rental value of parsonages.
1.108-1 Stock-for-debt exception not to apply in de minimis cases.
1.108-2 Acquisition of indebtedness by a person related to the debtor.
1.108-3 Intercompany losses and deductions.
1.108-4 Election to reduce basis of depreciable property under section 
          108(b)(5) of the Internal Revenue Code .
1.108-5 Time and manner for making election under the Omnibus Budget 
          Reconciliation Act of 1993.
1.108-6 Limitations on the exclusion of income from the discharge of 
          qualified real property business indebtedness.
1.108-7T Reduction of attributes (temporary).
1.108(c)-1T [Reserved]
1.109-1 Exclusion from gross income of lessor of real property of value 
          of improvements erected by lessee.

[[Page 7]]

1.110-1 Qualified lessee construction allowances.
1.111-1 Recovery of certain items previously deducted or credited.
1.112-1 Combat zone compensation of members of the Armed Forces.
1.113-1 Mustering-out payments for members of the Armed Forces.
1.117-1 Exclusion of amounts received as a scholarship or fellowship 
          grant.
1.117-2 Limitations.
1.117-3 Definitions.
1.117-4 Items not considered as scholarships or fellowship grants.
1.117-5 Federal grants requiring future service as a Federal employee.
1.118-1 Contributions to the capital of a corporation.
1.119-1 Meals and lodging furnished for the convenience of the employer.
1.120-1 Statutory subsistence allowance received by police.
1.120-3 Notice of application for recognition of status of qualified 
          group legal services plan.
1.121-1 Exclusion of gain from sale or exchange of a principal 
          residence.
1.121-2 Limitations.
1.121-3 Reduced maximum exclusion for taxpayers failing to meet certain 
          requirements.
1.121-3T Reduced maximum exclusion for taxpayers failing to meet certain 
          requirements (temporary).
1.121-4 Special rules.
1.122-1 Applicable rules relating to certain reduced uniformed services 
          retirement pay.
1.123-1 Exclusion of insurance proceeds for reimbursement of certain 
          living expenses.
1.125-2T Question and answer relating to the benefits that may be 
          offered under a cafeteria plan (temporary).
1.125-3 Effect of the Family and Medical Leave Act (FMLA) on the 
          operation of cafeteria plans.
1.125-4 Permitted election changes.
1.127-1 Amounts received under a qualified educational assistance 
          program.
1.127-2 Qualified educational assistance program.
1.132-0 Outline of regulations under section 132.
1.132-1 Exclusion from gross income for certain fringe benefits.
1.132-1T Exclusion from gross income of certain fringe benefits--1985 
          through 1988 (temporary).
1.132-2 No-additional-cost services.
1.132-2T No-additional-cost service--1985 through 1988 (temporary).
1.132-3 Qualified employee discounts.
1.132-3T Qualified employee discount--1985 through 1988 (temporary).
1.132-4 Line of business limitation.
1.132-4T Line of business limitation--1985 through 1988 (temporary).
1.132-5 Working condition fringes.
1.132-5T Working condition fringe--1985 through 1988 (temporary).
1.132-6 De minimis fringes.
1.132-6T De minimis fringe--1985 through 1988 (temporary).
1.132-7 Employer-operated eating facilities.
1.132-7T Treatment of employer-operated eating facilities--1985 through 
          1988 (temporary).
1.132-8 Fringe benefit nondiscrimination rules.
1.132-8T Nondiscrimination rules--1985 through 1988 (temporary).
1.133-1T Questions and answers relating to interest on certain loans 
          used to acquire employer securities (temporary).
1.141-0 Table of contents.

          Tax Exemption Requirements for State and Local Bonds

1.141-1 Definitions and rules of general application.
1.141-2 Private activity bond tests.
1.141-3 Definition of private business use.
1.141-4 Private security or payment test.
1.141-5 Private loan financing test.
1.141-6 Allocation and accounting rules.
1.141-7 Special rules for output facilities.
1.141-8 $15 million limitation for output facilities.
1.141-9 Unrelated or disproportionate use test.
1.141-10 Coordination with volume cap. [Reserved]
1.141-11 Acquisition of nongovernmental output property. [Reserved]
1.141-12 Remedial actions.
1.141-13 Refunding issues. [Reserved]
1.141-14 Anti-abuse rules.
1.141-15 Effective dates.
1.141-16 Effective dates for qualified private activity bond provisions.
1.142-0 Table of contents.
1.142-1 Exempt facility bonds.
1.142-2 Remedial actions.
1.142-3 Refunding issues. [Reserved]
1.142-4 Use of proceeds to provide a facility.
1.142(a)(5)-1 Exempt facility bonds: Sewage facilities.
1.142(f)(4)-1 Manner of making election to terminate tax-exempt bond 
          financing.
1.144-0 Table of contents.
1.144-1 Qualified small issue bonds, qualified student loan bonds, and 
          qualified redevelopment bonds.
1.144-2 Remedial actions.
1.144-3 Standard deduction for individuals choosing income averaging. 
          [Reserved]
1.145-0 Table of contents.
1.145-1 Qualified 501(c)(3) bonds.
1.145-2 Application of private activity bond regulations.
1.147-0 Table of contents.

[[Page 8]]

1.147-1 Other requirements applicable to certain private activity bonds.
1.147-2 Remedial actions.
1.147(b)-1 Bond maturity limitation--treatment of working capital.
1.148-0 Scope and table of contents.
1.148-1 Definitions and elections.
1.148-2 General arbitrage yield restriction rules.
1.148-3 General arbitrage rebate rules.
1.148-4 Yield on an issue of bonds.
1.148-5 Yield and valuation of investments.
1.148-6 General allocation and accounting rules.
1.148-7 Spending exceptions to the rebate requirement.
1.148-8 Small issuer exception to rebate requirement.
1.148-9 Arbitrage rules for refunding issues.
1.148-10 Anti-abuse rules and authority of Commissioner.
1.148-11 Effective dates.
1.149(b)-1 Federally guaranteed bonds.
1.149(d)-1 Limitations on advance refundings.
1.149(e)-1 Information reporting requirements for tax-exempt bonds.
1.149(g)-1 Hedge bonds.
1.150-1 Definitions.
1.150-2 Proceeds of bonds used for reimbursement.
1.150-4 Change in use of facilities financed with tax-exempt private 
          activity bonds.
1.150-5 Filing notices and elections.

   Regulations Applicable to Certain Bonds Sold Prior to July 8, 1997

1.148-1A Definitions and elections.
1.148-2A General arbitrage yield restriction rules.
1.148-3A General arbitrage rebate rules.
1.148-4A Yield on an issue of bonds.
1.148-5A Yield and valuation of investments.
1.148-6A General allocation and accounting rules.
1.148-9A Arbitrage rules for refunding issues.
1.148-10A Anti-abuse rules and authority of Commissioner.
1.148-11A Effective dates.
1.149(d)-1A Limitations on advance refundings.
1.150-1A Definitions.

                   Deductions for Personal Exemptions

1.151-1 Deductions for personal exemptions.
1.151-2 Additional exemptions for dependents.
1.151-3 Definitions.
1.151-4 Amount of deduction for each exemption under section 151.
1.152-1 General definition of a dependent.
1.152-2 Rules relating to general definition of dependent.
1.152-3 Multiple support agreements.
1.152-4 Support test in case of child of divorced or separated parents.
1.152.4T Dependency exemption in the case of a child of divorced 
          parents, etc. (temporary).
1.153-1 Determination of marital status.
1.154 Statutory provisions; cross references.

          Itemized Deductions for Individuals and Corporations

1.161-1 Allowance of deductions.
1.162-1 Business expenses.
1.162-2 Traveling expenses.
1.162-3 Cost of materials.
1.162-4 Repairs.
1.162-5 Expenses for education.
1.162-6 Professional expenses.
1.162-7 Compensation for personal services.
1.162-8 Treatment of excessive compensation.
1.162-9 Bonuses to employees.
1.162-10 Certain employee benefits.
1.162-10T Questions and answers relating to the deduction of employee 
          benefits under the Tax Reform Act of 1984; certain limits on 
          amounts deductible (temporary).
1.162-11 Rentals.
1.162-12 Expenses of farmers.
1.162-13 Depositors' guaranty fund.
1.162-14 Expenditures for advertising or promotion of good will.
1.162-15 Contributions, dues, etc.
1.162-16 Cross reference.
1.162-17 Reporting and substantiation of certain business expenses of 
          employees.
1.162-18 Illegal bribes and kickbacks.
1.162-19 Capital contributions to Federal National Mortgage Association.
1.162-20 Expenditures attributable to lobbying, political campaigns, 
          attempts to influence legislation, etc., and certain 
          advertising.
1.162-21 Fines and penalties.
1.162-22 Treble damage payments under the antitrust laws.
1.162-25 Deductions with respect to noncash fringe benefits.
1.162-25T Deductions with respect to noncash fringe benefits 
          (temporary).
1.162-27 Certain employee remuneration in excess of $1,000,000.
1.162-28 Allocation of costs to lobbying activities.
1.162-29 Influencing legislation.
1.163-1 Interest deduction in general.
1.163-2 Installment purchases where interest charge is not separately 
          stated.
1.163-3 Deduction for discount on bond issued on or before May 27, 1969.
1.163-4 Deduction for original issue discount on certain obligations 
          issued after May 27, 1969.
1.163-5 Denial of interest deduction on certain obligations issued after 
          December 31, 1982, unless issued in registered form.
1.163-5T Denial of interest deduction on certain obligations issued 
          after December

[[Page 9]]

          31, 1982, unless issued in registered form (temporary).
1.163-6T Reduction of deduction where section 25 credit taken 
          (temporary).
1.163-7 Deduction for OID on certain debt instruments.
1.163-8T Allocation of interest expense among expenditures (temporary).
1.163-9T Personal interest (temporary).
1.163-10T Qualified residence interest (temporary).
1.163-12 Deduction of original issue discount on instrument held by 
          related foreign person.
1.163-13 Treatment of bond issuance premium.
1.163(d)-1 Time and manner for making election under the Omnibus Budget 
          Reconciliation Act of 1993.
1.164-1 Deduction for taxes.
1.164-2 Deduction denied in case of certain taxes.
1.164-3 Definitions and special rules.
1.164-4 Taxes for local benefits.
1.164-5 Certain retail sales taxes and gasoline taxes.
1.164-6 Apportionment of taxes on real property between seller and 
          purchaser.
1.164-7 Taxes of shareholder paid by corporation.
1.164-8 Payments for municipal services in atomic energy communities.
1.165-1 Losses.
1.165-2 Obsolescence of nondepreciable property.
1.165-3 Demolition of buildings.
1.165-4 Decline in value of stock.
1.165-5 Worthless securities.
1.165-6 Farming losses.
1.165-7 Casualty losses.
1.165-8 Theft losses.
1.165-9 Sale of residential property.
1.165-10 Wagering losses.
1.165-11 Election in respect of losses attributable to a disaster.
1.165-12 Denial of deduction for losses on registration-required 
          obligations not in registered form.
1.165-13T Questions and answers relating to the treatment of losses on 
          certain straddle transactions entered into before the 
          effective date of the Economic Recovery Tax Act of 1981, under 
          section 108 of the Tax Reform Act of 1984 (temporary).
1.166-1 Bad debts.
1.166-2 Evidence of worthlessness.
1.166-3 Partial or total worthlessness.
1.166-4 Reserve for bad debts.
1.166-5 Nonbusiness debts.
1.166-6 Sale of mortgaged or pledged property.
1.166-7 Worthless bonds issued by an individual.
1.166-8 Losses of guarantors, endorsers, and indemnitors incurred on 
          agreements made before January 1, 1976.
1.166-9 Losses of guarantors, endorsers, and indemnitors incurred, on 
          agreements made after December 31, 1975, in taxable years 
          beginning after such date.
1.166-10 Reserve for guaranteed debt obligations.
1.167(a)-1 Depreciation in general.
1.167(a)-2 Tangible property.
1.167(a)-3 Intangibles.
1.167(a)-4 Leased property.
1.167(a)-5 Apportionment of basis.
1.167(a)-5T Application of section 1060 to section 167 (temporary).
1.167(a)-6 Depreciation in special cases.
1.167(a)-7 Accounting for depreciable property.
1.167(a)-8 Retirements.
1.167(a)-9 Obsolescence.
1.167(a)-10 When depreciation deduction is allowable.
1.167(a)-11 Depreciation based on class lives and asset depreciation 
          ranges for property placed in service after December 31, 1970.
1.167(a)-12 Depreciation based on class lives for property first placed 
          in service before January 1, 1971.
1.167(a)-13T Certain elections for intangible property (temporary).
1.167(a)-14 Treatment of certain intangible property excluded from 
          section 197.
1.167(a)-14T Treatment of certain intangible property excluded from 
          section 197 (temporary).
1.167(b)-0 Methods of computing depreciation.
1.167(b)-1 Straight line method.
1.167(b)-2 Declining balance method.
1.167(b)-3 Sum of the years-digits method.
1.167(b)-4 Other methods.
1.167(c)-1 Limitations on methods of computing depreciation under 
          section 167(b) (2), (3), and (4).
1.167(d)-1 Agreement as to useful life and rates of depreciation.
1.167(e)-1 Change in method.
1.167(e)-1T Change in method (temporary).
1.167(f)-1 Reduction of salvage value taken into account for certain 
          personal property.
1.167(g)-1 Basis for depreciation.
1.167(h)-1 Life tenants and beneficiaries of trusts and estates.
1.167(i)-1 Depreciation of improvements in the case of mines, etc.
1.167(l)-1 Limitations on reasonable allowance in case of property of 
          certain public utilities.
1.167(l)-2 Public utility property; election as to post-1969 property 
          representing growth in capacity.
1.167(l)-3 Multiple regulation, asset acquisitions, reorganizations, 
          etc.
1.167(l)-4 Public utility property; election to use asset depreciation 
          range system.
1.167(m)-1 Class lives.
1.168-5 Special rules.

[[Page 10]]

1.168(a)-1T Modified accelerated cost recovery system (temporary).
1.168(b)-1T Definitions (temporary).
1.168(d)-0 Table of contents for the applicable convention rules.
1.168(d)-1 Applicable convention--Half-year and mid-quarter conventions.
1.168(d)-1T Applicable conventions--Half-year and mid-quarter 
          conventions (temporary).
1.168(f)(8)-1T Safe-harbor lease information returns concerning 
          qualified mass commuting vehicles (temporary).
1.168(h)-1 Like-kind exchanges involving tax-exempt use property.
1.168(i)-0 Table of contents for the general asset account rules.
1.168(i)-0T Table of contents for the general asset account rules 
          (temporary).
1.168(i)-1 General asset accounts.
1.168(i)-1T General asset accounts (temporary).
1.168(i)-2 Lease term.
1.168(i)-5T Table of contents (temporary).
1.168(i)-6T Like-kind exchanges and involuntary conversions (temporary).
1.168(j)-1T Questions and answers concerning tax-exempt entity leasing 
          rules (temporary).
1.168(k)-0T Table of contents (temporary).
1.168(k)-1T Additional first year depreciation deduction (temporary).
1.168A-1 Amortization of emergency facilities; general rule.
1.168A-2 Election of amortization.
1.168A-3 Election to discontinue amortization.
1.168A-4 Definitions.
1.168A-5 Adjusted basis of emergency facility.
1.168A-6 Depreciation of portion of emergency facility not subject to 
          amortization.
1.168A-7 Payment by United States of unamortized cost of facility.
1.169-1 Amortization of pollution control facilities.
1.169-2 Definitions.
1.169-3 Amortizable basis.
1.169-3T Amortizable basis (temporary).
1.169-4 Time and manner of making elections

    Authority: 26 U.S.C. 7805, unless otherwise noted.
    Section 1.61-2T also issued under 26 U.S.C. 61.
    Section 1.61-21 also issued under 26 U.S.C. 61.
    Sections 1.62-1T and 1.62-2 also issued under 26 U.S.C. 62;
    Section 1.66-4 also issued under 26 U.S.C. 66(c);
    Sections 1.67-2T and 1.67-3T also issued under 26 U.S.C. 67(c);
    Section 1.67-3 also issued under 26 U.S.C. 67(c).
    Sections 1.72-4, 1.72-5, 1.72-6, 1.72-7, 1.72-8, and 1.72-11 also 
issued under 26 U.S.C. 72(c).
    Section 1.101-7 also issued under 26 U.S.C. 101(d)(2)(B)(ii);
    Section 1.103-10 also issued under 26 U.S.C. 103(b)(6);
    Section 1.103A-2 also issued under 26 U.S.C. 103A(j);
    Section 1.108-1 also issued under 26 U.S.C. 108(e)(8) and 
108(e)(10(B);
    Section 1.108-2 also issued under 26 U.S.C. 108;
    Section 1.108-3 also issued under 26 U.S.C. 108, 267, and 1502.
    Section 1.108-4 also issued under 26 U.S.C. 108.
    Section 1.108-5 also issued under 26 U.S.C. 108.
    Section 1.108-7T also issued under 26 U.S.C. 108.
    Section 1.108(c)-1 also issued under the authority of 26 U.S.C. 
108(d)(9);
    Section 1.110-1 also issued under 26 U.S.C. 110(d);
    Sections 1.132-0 through 1.132-8T also issued under 26 U.S.C. 132;
    Sections 1.148-0 through 1.148-11 also issued under 26 U.S.C. 148 
(f), (g), and (i);
    Sections 1.148-6 also issued under 26 U.S.C. 148 (f), (g), and (i);
    Section 1.149(b)-1 also issued under 26 U.S.C. 149(b)(3)(B) (v);
    Section 1.149(d)-1 also issued under 26 U.S.C. 149(d)(7);
    Section 1.149(e)-1 also issued under 26 U.S.C. 149(e);
    Section 1.149(g)-1 also issued under 26 U.S.C. 149(g)(5);
    Sections 1.150-4 also issued under 26 U.S.C. 150 (c)(5);
    Section 1.163-8T also issued under 26 U.S.C. 469(k)(4);
    Section 1.163-9T also issued under 26 U.S.C. 163(h)(3)(D);
    Section 1.163-11T is also issued under 26 U.S.C. 163(h);
    Section 1.165-12 also issued under 26 U.S.C. 165(j)(3);
    Section 1.166-10 also issued under 26 U.S.C. 166(f);
    Section 1.168(d)-1 also issued under 26 U.S.C. 168(d)(3);
    Section 1.168(f)(8)-1T also added under sec. 112(c), Black Lung 
Benefits Revenue Act of 1981 (Pub. L. 97-119);
    Section 1.168(h)-1 also issued under 26 U.S.C. 168.
    Section 1.168(i)-1 also issued under 26 U.S.C. 168(i)(4).
    Section 1.168(i)-2 also issued under 26 U.S.C. 168.
    Section 1.168(j)-1T also added under 26 U.S.C. 168(j)(10).

    Source: T.D. 6500, 25 FR 11402, Nov. 26, 1960; 25 FR 14021, Dec. 21, 
1960, unless otherwise noted.

[[Page 11]]

                      COMPUTATION OF TAXABLE INCOME

  Definition of Gross Income, Adjusted Gross Income, and Taxable Income


    (a) General definition. Gross income means all income from whatever 
source derived, unless excluded by law. Gross income includes income 
realized in any form, whether in money, property, or services. Income 
may be realized, therefore, in the form of services, meals, 
accommodations, stock, or other property, as well as in cash. Section 61 
lists the more common items of gross income for purposes of 
illustration. For purposes of further illustration, Sec. 1.61-14 
mentions several miscellaneous items of gross income not listed 
specifically in section 61. Gross income, however, is not limited to the 
items so enumerated.
    (b) Cross references. Cross references to other provisions of the 
Code are to be found throughout the regulations under section 61. The 
purpose of these cross references is to direct attention to the more 
common items which are included in or excluded from gross income 
entirely, or treated in some special manner. To the extent that another 
section of the Code or of the regulations thereunder, provides specific 
treatment for any item of income, such other provision shall apply 
notwithstanding section 61 and the regulations thereunder. The cross 
references do not cover all possible items.
    (1) For examples of items specifically included in gross income, see 
Part II (section 71 and following), Subchapter B, Chapter 1 of the Code.
    (2) For examples of items specifically excluded from gross income, 
see part III (section 101 and following), Subchapter B, Chapter 1 of the 
Code.
    (3) For general rules as to the taxable year for which an item is to 
be included in gross income, see section 451 and the regulations 
thereunder.