Complete Home & Office Legal Guide/Complete Home and Office Legal Guide (Chestnut) (1993).ISO/stat/fed/irc9.asc

Text File | 1993-08-24 | 51KB | 939 lines

63.  Taxable income defined
(a)  In general. -- Except as provided in subsection (b), for
purposes of this subtitle, the term "taxable income" means gross
income minus the deductions allowed by this chapter (other than
the standard deduction).
(b)  Individuals who do not itemize their deductions. -- In the
case of an individual who does not elect to itemized his
deductions for the taxable year, for purposes of this subtitle,
the term "taxable income" means adjusted gross income, minus --
(1)  the standard deduction, and
(2)  the deduction for personal exemptions provided in section
151.
(c)  Standard deduction. -- For purposes of this subtitle --
(1)  In general. -- Except as otherwise provided in this
subsection, the term "standard deduction" means the sum of --
(A)  the basic standard deduction, and
(B)  the additional standard deduction.
(2)  Basic standard deduction. -- For purposes of paragraph (1),
the basic standard deduction is --
(A)  $5,000 in the case of --
(i)  a joint return, or
(ii)  a surviving spouse (as defined in section 2(a)),
(B)  $4,000 in the case of a head of household (as defined in
section 2(b)),
(C)  $3,000 in the case of an individual who is not married and
who is not a surviving spouse or head of household, or
(D)  $2,500 in the case of a married individual filing a separate
return.
(3)  Additional standard deduction for aged and blind. -- For
purposes of paragraph (1), the additional standard deduction is
the sum of each additional amount to which the taxpayer is
entitled under subsection (f).
(4)  Adjustments for inflation. -- In the case of any taxable
year beginning in a calendar year after 1988, each dollar amount
contained in paragraph (2) or (5)(A) or subsection (f) shall be
increased by an amount equal to --
(A)  such dollar amount, multiplied by
(B)  the cost-of-living adjustment determined under section
1(f)(3) for the calendar year in which the taxable year begins,
by substituting "calendar year 1987" for "calendar year 1989" in
subparagraph (B) thereof.
(5)  Limitation on basic standard deduction in the case of
certain dependents. -- In the case of an individual with respect
to whom a deduction under section 151 is allowable to another
taxpayer for a taxable year beginning in the calendar year in
which the individual's taxable year begins, the basic standard
deduction applicable to such individual for such individual's
taxable year shall not exceed the greater of --
(A)  $500, or
(B)  such individual's earned income.
(6)  Certain individuals, etc., not eligible for standard
deduction. -- In the case of --
(A)  a married individual filing a separate return when either
spouse itemizes deductions,

(B)  A nonresident alien individual,
(C)  an individual making a return under section 443(a)(1) for a
period for less than 12 months on account of a change in his
annual accounting period, or
(D)  an estate or trust, common trust fund, or partnership,
the standard deduction shall be zero.
(d)  Itemized deductions. -- For purposes of this subtitle, the
term "itemized deductions" means the deductions allowable under
this chapter other than --
(1)  the deductions allowable in arriving at adjusted gross
income, and
(2)  the deduction for personal exemptions provided by section
151.
(e)  Election to itemize. --
(1)  In general. -- Unless an individual makes an election under
this subsection for the taxable year, no itemized deduction shall
be allowed for the taxable year.  For purposes of this subtitle,
the determination of whether a deduction is allowable under this
chapter shall be made without regard to the preceding sentence.
(2)  Time and manner of election. -- Any election under this
subsection shall be made on the taxpayer's return, and the
Secretary shall prescribe the manner of signifying such election
on the return.
(3)  Change of election. -- Under regulations prescribed by the
Secretary, a change of election with respect to itemized
deductions for any taxable year may be  made after the filing of
the return for such year.  If the spouse of the taxpayer filed a
separate return for any taxable year corresponding to the taxable
year of the taxpayer, the change shall not be allowed unless, in
accordance with such regulations ---
(A)  the spouse makes a change of election with respect to
itemized deductions, for the taxable year covered in such
separate return, consistent with the change of treatment sought
by the taxpayer, and
(B)  the taxpayer and his spouse consent in writing to the
assessment (within such period as may be agreed on with the
Secretary) of any deficiency, to the extent attributable to such
change of election, even though at the time of the filing of such
consent the assessment of such deficiency would otherwise be
prevented by the operation of any law or rule of law.
This paragraph shall not apply if the tax liability of the
taxpayer's spouse for the taxable year corresponding to the
taxable year of the taxpayer has been compromised under section
7122.
(f)  Aged or blind additional amounts. --
(1)  Additional amounts for the aged. --- The taxpayer shall be
entitled to an additional amount of $600 --
(A)  for himself if he has attained age 65 before the close of
his taxable year, and
(B)  for the spouse of the taxpayer if the spouse has attained
age 65 before the close of the taxable year and an additional
exemption is allowable to the taxpayer for such spouse under
section 151(b),
(2)  Additional amount for blind. -- The taxpayer shall be
entitled to an additional amount of $600 --
(A)  for himself if he is blind at the close of the taxable year,
and
(B)  for the spouse of the taxpayer if the spouse is blind as of
the close of the taxable year and an additional exemption is
allowable to the taxpayer for such spouse under section 151(b).
For purposes of subparagraph (B), if the spouse dies during the
taxable year the determination of whether such spouse is blind
shall be made as of the time of such death.
(3)  Higher amount for certain unmarried individuals. -- In the
case of an individual who is not married and is not a surviving
spouse, paragraphs (1) and (2) shall be applied by substituting
"$750" for "$600".
(4)  Blindness defined. -- For purposes of this subsection,
an individual is blind only if his central visual acuity does not
exceed 20/200 in the better eye with correcting lenses, or if his
visual acuity is greater than 20/200 but is accompanied by a
limitation in the fields of vision such that the widest diameter
of the visual field subtends an angle no greater than 20 degrees.
(g)  Marital status. -- For purposes of this section, marital
status shall be determined under section 7703.

64.  Ordinary income defined
For purposes of this subtitle, the term "ordinary income"
includes any gain form the sale or exchange of property which is
nether a capital asset nor property described in section 1231(b).
Any gain form the sale or exchange of property which is treated
or considered, under other provisions of this subtitle, as
"ordinary income" shall be treated as gain form the sale or
exchange of property which is neither a capital asset nor
property described in section 1231(b).

65.  Ordinary loss defined
For purposes of this subtitle, the term "ordinary loss" includes
any loss from the sale or exchange of property which is not a
capital asset.  Any loss form the sale or exchange of property
which is treated or considered, under other provisions of this
subtitle, as "ordinary loss" shall be treated as loss from the
sale or exchange of property which is not a capital asset.

66.  Treatment of community income
(a)  Treatment of community income wher spouses live apart. -- If
--
(1)  2 individuals are married to each other at any time during a
calendar year;
(2)  such individuals --
(A)  live apart at all times during the calendar year, and
(B)  do not file a joint return under section 6013 with each