CHAPTER 1 >
I > Sec. 863.
- Special rules for determining source
Items of gross income,
expenses, losses, and deductions, other than those specified in sections
861(a) and 862(a), shall be allocated or apportioned to sources within
or without the United States, under regulations prescribed by the Secretary.
Where items of gross income are separately allocated to sources within
the United States, there shall be deducted (for the purpose of computing
the taxable income therefrom) the expenses, losses, and other deductions
properly apportioned or allocated thereto and a ratable part of other
expenses, losses, or other deductions which cannot definitely be allocated
to some item or class of gross income. The remainder, if any, shall
be included in full as taxable income from sources within
the United States.
Section 22 (a) is cast in broad, sweeping terms. It "indicates the purpose of Congress to use the full measure of its taxing power within those definable categories." Helvering v. Clifford, supra, 334. The very essence of taxable income, as that concept is used in § 22 (a), is the accrual of some gain, profit or benefit to the taxpayer. This requirement of gain, of course, must be read in its statutory context. Not every benefit received by a taxpayer from his labor or investment necessarily [**549] renders him taxable. Nor is mere dominion over money or property decisive in all cases. In fact, no single, conclusive criterion has yet been found to determine in all situations what is a sufficient gain to support the imposition of an income tax. [****7] No more can be said in general than that all relevant facts and circumstances must be considered. See Magill, Taxable Income (1945).
[Commissioner v. Wilcox, 327 U.S. 404 (1946)]
Black's Law Dictionary,
Sixth Edition, p. 1460:
Under the federal tax law,
taxable income is gross income reduced by adjustments and allowable
deductions. It is the income against which tax rates are applied
to compute an individual or entity's tax liability. Essence of
"taxable income" is the accrual of some gain, profit or benefit to taxpayer.
In re Goodyear Tire & Rubber Co., Corporate Income Tax 1966, 1967, 1968,
133 Vt. 132, 335 A.2d 310, 313. See Gross income; Net income.
[Black's Law Dictionary,
Sixth Edition, p. 1460]