HERBERT R. O'CONOR, GOVERNOR. 473

only if verified under the rules and regulations prescribed by
the Comptroller.

(1) Losses from lawful wagering transactions incurred and
paid during the taxable year but only to the extent of gains
derived therefrom.

(m) All ordinary and necessary expenses (not otherwise
herein provided for) paid or incurred during the taxable year
for the acquisition of income or the care of income-producing
property.

(n) Net additions to legal reserves for the taxable year, as
required by law, in the case of life insurance companies and/or
mutual fire insurance companies.

(o) In the case of mutual insurance companies (including
interinsurers and reciprocal underwriters, but not including
mutual life or mutual marine insurance companies) requiring
their members to make premium deposits to provide for losses
and expenses, the amount of premium deposits returned to
their policyholders and the amount of premium deposits re-
tained for the payment of losses, expenses, and reinsurance
reserves.

218. Items Not Deductible. No deductions shall be allowed
in respect of the following items:

(a) Capital losses sustained from the sale, exchange or
other disposition of property held by a taxpayer (whether
or not connected with his trade or business) other than stock
in trade of the taxpayer or other property of a kind that
would properly be included in the inventory of the taxpayer
if on hand at the close of the taxable year, or property held
by the taxpayer primarily for sale to customers in the ordinary
course of his trade or business.

(b) Personal, living or family expenses;

(c) Any amount paid out for new buildings or new ma-
chinery, for permanent improvements or betterments, or for
any other capital outlay made to increase the value of any
property or estate;

(d) Any amount expended in restoring property or in
making good the exhaustion thereof for which an allowance
is or has been made;

(e) Any amount expended or reserved for repairs to or
maintenance of residence property occupied by its owner, or
for depreciation thereof;

(f) Premiums paid on any life insurance policy covering
the life of any officer or employee, or of any person finan-
cially interested in any trade or business carried on by the