1800 LAWS OF MARYLAND [CH. 597

gains, profits and income derived from professions, vocations,
trades, business and commerce. The gross income of an em-
ployee shall include the amount of the employer's contribution
to a pension fund or trust which is not exempt OR AP-
PROVED under federal standards, where the employee's rights
may not be forfeited; such income to be taxable in the year in
which the contribution is made. "Gross income" shall not
include the following:

(a) Capital gains realized 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 prop-
erly 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) The proceeds of life insurance policies paid by reason of
the death of the insured, whether in a single sum or otherwise
(but if such amounts are held by the insurer under an agree-
ment to pay interest thereon, the interest payments shall be
included in gross income).

(c) Amounts received (other than amounts paid by reason
of the death of the insured) under life insurance or endowment
contracts, either during the term or at maturity or upon sur-
render of the contract, equal to the total amount of the pre-
miums paid therefor.

(d) The value of property acquired by gift, bequest, devise,
inheritance or succession. Beginning with the calendar year
1944 and thereafter, there shall not be excluded from gross in-
come under this paragraph, the income from such property, or,
in case the gift, bequest, devise or inheritance is of income from
property, the amount of such income. For the purposes of this
paragraph, if, under the terms of the gift, bequest, devise, or
inheritance, payment, credit, or distribution thereof is to be
made at intervals, to the extent that it is paid or credited or
to be distributed out of income from property, it shall be con-
sidered a gift, bequest, devise, or inheritance of income from
property.

(e) Any amount received through accident or health insur-
ance or under Workmen's Compensation or Employers'
Liability Acts, or by way of damages for personal injuries or
property damage, whether by suit or agreement, and any
amount received as a pension, annuity, or similar allowance for
personal injuries or sickness resulting from active service in
the armed forces of the United States.