HARRY W. NICE, GOVERNOR. 35

216. GROSS INCOME AND EXCLUSIONS THEREFROM. The term
"gross income" as used in this sub-title, includes gains, profits
and income derived from salaries, wages or compensation for
personal services of whatever kind and in whatever form paid,
or from professions, vocations, trades, businesses, commerce
or sales or dealings in property, whether real or personal,
growing out of the ownership, or use, or interest in such prop-
erty (but income realized or loss sustained from the sale of
property held by the taxpayer for two years or more other
than property items customarily included in an inventory shall
be ignored in computing income for the purposes of this sub-
title); also from rent, royalties, interest, dividends, securities,
or transactions of any business carried on for gain or profit,
or gains or profits, and income derived from any source what-
ever, including gains or profits and income derived through
estates or trusts by the beneficiaries thereof, whether as dis-
tributive or as distributable shares. The amount of all such
items shall be included in the gross income for the taxable year
in which received by the taxpayer, unless under the methods
of accounting permitted herein, such amounts are to be prop-
erly accounted for as of a different period; but the term
"gross income" does not include the following items which
shall be exempt from taxation under this sub-title.

(a) The proceeds of life insurance policies paid by reason
of the death of the insured, but interest thereon shall be
assessed under the provisions of this sub-title.

(b) Amounts received (other than amounts paid by reason
of the death of the insured) under life insurance, endowment
or annuity contracts, either during the term or at maturity
or upon surrender of the contract, equal to the total amount
of premiums paid thereon; provided, however, that if in the
case of annuities either for life or for a fixed term, the excess
value thereof over amounts of premiums paid, derived through
application of the life expectancy (under the Standard Ex-
perience Tables) or the number of years of the fixed term,
shall not be exempt and shall for the purpose of computing
the annual taxable income be divided by the number of years
such annuities are payable. The annual income so computed
shall be taxable as is other income.

(c) The value of property acquired by gift, bequest, devise
or inheritance received during the year; but the income re-
ceived by reason of such gifts, bequests, devises and inheri-
tances shall be assessed tinder the provisions of this sub-title.

(d) Any amount received through accident or health insur-
ance or under the Workmen's Compensation Act for personal
injuries and the amount of any damages received, whether by
suit or agreement on account of such injuries.