Internal Revenue Code Section 61 Overview

Internal Revenue Code Section 61: Gross Income Defined

§ 61. Gross Income Defined

(a) General Definition

  • Gross Income:

    • Defined as all income derived from any source,

    • Includes, but is not limited to, the following items:

    1. Compensation for Services:

    • Encompasses fees, commissions, fringe benefits, and similar items given for services rendered.

    1. Gross Income Derived from Business:

    • Any income generated through business activities.

    1. Gains Derived from Dealings in Property:

    • Profit made from selling or otherwise distributing property.

    1. Interest:

    • Earnings from interest-bearing accounts, loans, or investments.

    1. Rents:

    • Money received from leasing out property or real estate.

    1. Royalties:

    • Compensation received for the use of patents, copyrights, and other intangible assets.

    1. Dividends:

    • Payments made by a corporation to its shareholders from its profits.

    1. Annuities:

    • Insurance contracts providing periodic payments to the holder, typically for retirement or income.

    1. Income from Life Insurance and Endowment Contracts:

    • Proceeds received from life insurance policies or endowment agreements.

    1. Pensions:

      • Regular payments made to retired employees from their employer or government funds.

    2. Income from Discharge of Indebtedness:

      • Income realized when a debt is forgiven or reduced, potentially impacting tax obligations.

    3. Distributive Share of Partnership Gross Income:

      • A partner's share of the income generated by a partnership.

    4. Income in Respect of a Decedent:

      • Income earned by a deceased person but not yet received before death.

    5. Income from an Interest in an Estate or Trust:

      • Earnings received from a decedent's estate or trust.

(b) Cross References

  • Items Specifically Included in Gross Income:

    • For further details, see Part II (Section 71 and following).

  • Items Specifically Excluded from Gross Income:

    • For exclusions, refer to Part III (Section 101 and following).