*808 Over a period of several years, in pursuance of its policy of broadening its stockholding base, protecting its stock and business and to support the market, petitioner corporation bought shares of its own stock for cash on the open market and later sold certain of the shares so acquired. The stock was not retired but was held as treasury stock and carried in its investment account. During the taxable year 1929 petitioner so bought 574,000 shares. Also during the taxable year petitioner sold 194,000 shares of its own stock acquired during 1929, and 15,000 shares previously acquired. These sales were for cash on the open market, each transaction of purchase or sale being handled in the same manner as ordinary commercial transactions of purchase and sale. Held: Petitioner's transactions were taxable transactions from which gain or loss resulted.
*950 At its inception this proceeding involved*809 a deficiency of $15,990.65, income taxes for 1929. The parties, however, have disposed of this deficiency by stipulation as hereinafter set forth. A new deficiency of $39,036.91 has been asserted by respondent in an amended answer based upon his determination that petitioner realized a taxable profit of $286,581.21 from sales of its own new class B common stock during 1929. Petitioner's reply challenges the correctness of this latest determination of respondent.
The record consists of a written stipulation of facts with attached documents as a part thereof, oral testimony, and exhibits received in evidence at the hearing.
FINDINGS OF FACT.
The petitioner is a corporation organized in 1899 under the laws of the State of New Jersey. Its principal office and place of business is Winston-Salem, North Carolina. It is engaged in the manufacture and sale of tobacco products, including plug, twist, smoking tobacco, and cigarettes.
From time to time since 1901 the capital structure of the corporation has been changed by increases in the common stock, by the issuance of new classes of common stock known as class B common, later eliminated in favor of new class B common, by the*810 issuance and subsequent retirement of preferred stocks, by stock dividends, and by stock split-ups due to reduction in the par value of the common stock, all of which is more particularly set forth in the stipulation submitted by the parties hereto. During the taxable year 1929 the total capitalization of R. J. Reynolds Tobacco Co. was:
1,000,000 shares common stock at $10 par value | $10,000,000 |
9,000,000 shares new class B common stock at $10 par value | 90,000,000 |
10,000,000 shares outstanding capital stock | $100,000,000 |
The principal difference between common stock and new class B common is that the latter had no voting power and was not considered under the company's plan providing for participation by officers and employees in certain profits of the company. There was no authorization during the taxable year by charter amendment whereby the authorized number, class, or par value of petitioner's shares of stock was increased or decreased.
*951 In 1912 the petitioner was young in the tobacco industry, being a very small corporation whose stock was owned by one family until other stockholders were brought in from time to time. Its principal stockholder*811 and founder was R. J. Reynolds, whose practice it was to bring as many employees as possible into the company as stockholders. Under the bylaws of the company the holders of the only stock then outstanding were entitled to a special distribution each year based on the profits realized, and as a result the owners of this class of stock retained their holdings in order to participate in the profits.
At 1912 petitioner was in vigorous competition with three other tobacco companies, each having many times the capital of petitioner. After 1912 petitioner's growth was rapid. Its business prospered to such an extent that maintaining the capitalization of the company at a point where it could support the rapid expansion of the business, and meet competitive conditions, presented a serious problem. At the same time the management of the petitioner desired to preserve (1) the reputation of the company, (2) the reputation of the stock, and (3) the behavior of the stock on the market, including its behavior in comparison with other similar stocks.
In 1918 the petitioner created the class B common stock which did not participate in the special distribution based on the company's profits, *812 and which was, therefore, available on the open market. Later this class B stock was eliminated by charter amendment in April 1926.
In July 1918 R. J. Reynolds, petitioner's largest stockholder, died. It became necessary for his estate to sell a substantial portion of the stock in order to pay the inheritance taxes on his estate. The stockholders of the petitioner were not large enough to absorb the stock sold by the founder's estate. This stock was purchased by several individuals, but subsequently, and prior to 1921, it was finally concentrated in the single ownership of United Retail Stores, which controlled United Cigar Stores Co., a large distributor of petitioner's tobacco products. United Retail Stores publicized the fact that it owned a substantial block of petitioner's stock. Rumors developed and the suspicion grew that United Retail Stores was dictating petitioner's business policies and was able to buy petitioner's tobacco products at lower prices and for better discount than other distributors and retailers. Furthermore, the dividends regularly paid by the petitioner made it possible for United Retail Stores to operate its approximately 2,000 retail stores without*813 profit, and yet have a substantial amount with which to pay dividends to its own stockholders.
*952 It was the judgment of petitioner's management that the reputation of the company, and the necessity of protecting its business required the purchase of this United Retail Stores' stock. Petitioner had recognized in 1918 the necessity of broadening its stockholding base, and the acquisition of this block of stock afforded petitioner an opportunity to remove a harmful situation and at the same time permitted petitioner to expand its stockholding list by feeding the stock back onto the market. The law department of the petitioner considered and ruled that petitioner was authorized to make the 1921 purchase, and the other purchases hereinafter related, and reissue the stock, although petitioner had no charter authority to deal in its own stocks.
For the reasons aforementioned the petitioner purchased during 1921 the block of old class B common stock held by United Retail Stores, the number of shares purchased being undisclosed. The purchase was made at a private sale, the stock in question not being listed on any exchange in 1921. The consideration paid was $607,200.96*814 in cash, which was slightly under the market price by reason of the amount of stock involved. As the result of subsequently effected stock split-ups and stock dividends that portion of this purchase here involved came to represent 75,000 shares of new class B common stock, the certificates therefor being held by petitioner on January 31, 1929.
During all the years 1921 to 1929, inclusive, and thereafter, the petitioner followed the same general policy of availing itself of all opportunities that were presented for extending its stockholding base. The effectiveness of this general policy is revealed by the increase in the number of petitioner's stockholders over a period of years. In March 1922, when petitioner's stock was listed on the New York Stock Exchange, petitioner had less than 2,000 stockholders, counting common stock and class B common stock. At the time of the market crash in 1929 there were 9,136 shareholders of B stock alone. In 1933 there were 41,000 stockholders and in April 1936 there were 52,000 holders of B stock.
In 1924 petitioner sold for cash 21,067 shares of the stock purchased in 1921 from United Retail Stores. The sales were made in the second and*815 third quarters of 1924 on a rising market, following a substantial drop of the market in the first quarter.
In 1925 the petitioner sold for cash 11,000 shares of the stock purchased in 1921 from United Retail Stores. These shares were sold or reissued between February 10 and August 13, 1925. The management took advantage of a rising market to dispose of these shares without hurting its stock or the reputation of the petitioner.
By reason of a charter amendment in 1926, the management of petitioner feared that speculators on the market might start a rumor *953 that petitioner would declare a stock dividend. To protect the reputation of the stock, which included keeping it from jumping and precipitately dropping, the petitioner purchased through a broker for cash, 21,400 shares of its stock. After fear of the rumor had passed the 21,400 shares were gradually fed back into the market.
In 1927 the petitioner's only transaction respecting its own stocks was the disposition of certain fractional shares accumulated in its hands in connection with the issuance of rights to subscribe or receive additional stock. These fractional shares, which had cost petitioner nothing, *816 were disposed of for cash in the amount of $240.83.
During April 1928 petitioner reduced the price of its cigarettes from $6.40 to $6 per thousand. Following this reduction the volume of petitioner's stock offered on the market was greatly multiplied. Petitioner, with a view to protecting the reputation of the stock of the company, its business and its brands, purchased for cash 43,300 shares of its stock, expecting thereby to protect the market against a precipitate fall in prices. After the market steadied the 43,300 shares were fed back into the market, together with 1,240 shares of the stock acquired from United Retail Stores in 1921.
During each of the aforesaid years, 1924 to 1928, inclusive, the petitioner, R. J. Reynolds Tobacco Co., reissued solely for cash, certain shares of its new class B common stock, theretofore acquired solely for cash, in a manner similar to that hereinafter set forth with respect to the taxable year 1929. Such transactions were made under circumstances and for reasons substantially similar to those surrounding the said similar transactions in the year 1929. For the purpose only of showing generally the result of such transactions during*817 each of said years 1924 to 1928, inclusive, and for no other purpose, it is agreed that, in executing its income tax return for each of such prior years, the petitioner noted in "Schedule L - Reconciliation of Net Income and Analysis of Change in Surplus" and under subtitle (of said schedule L) entitled "2. Non-taxable income * * * (f) Other Items of Non-Taxable Income (to be detailed)" under the notation "Profit R.J.R. Stock", or substantially similar notation, the following amounts:
Years | Amounts |
1924 | $999,335.25 |
1925 | 601,507.42 |
1926 | 85,003.70 |
1927 | 240.83 |
1928 | 1,271,023.19 |
*954 At the close of 1928 petitioner had 30,000 shares of its new class B common stock, which became 75,000 shares by January 31, 1929, due to a 2 1/2 for 1 split-up approved by the stockholders on December 28, 1928, thus reducing the par value of the stock from $25 per share to $10 per share.
Subsequent to January 31, 1929, the petitioner canceled certificates representing 15,000 shares of said 75,000 shares and issued in lieu thereof new certificates representing 15,000 shares of new class B common stock to divers persons who delivered to petitioner the sum of $708,690*818 in cash for said 15,000 shares. The 15,000 shares so disposed of by petitioner were acquired as a part of petitioner's 1921 purchase at a cost to petitioner of $121,440.19 in cash.
On December 18, 1929, 2,106,139 shares, or more than 23 percent of the total outstanding 9,000,000 shares of petitioner's new class B common stock, were in the hands of brokers, subject to trading or speculation. This stock was in a position to do great injury to petitioner, its stock and its products. Approximately 2,000 employes of petitioner held shares of its stock and many of them had borrowed heavily on their stock. With the then market price of approximately 64, a heavy drop in the market would have been disastrous to many of petitioner's employees.
At the time of the market break in 1929 petitioner had $29,000,000 in cash and Government securities, which the management determined to and did use in purchasing the petitioner's stock offered on the market during the break in October and November 1929. During the height of the stock market panic, from approximately October 29 to November 13, 1929, petitioner held the market price of its stock at 50, purchasing 90 percent of its stock offered*819 on the market. As the panic eased, petitioner's purchases were scaled down to 40 and 39. During the taxable year 1929 petitioner purchased a total of 574,880 shares of its own stock.
In addition to selling the 15,000 shares aforementioned during 1929 petitioner sold 194,000 other shares of the new class B common stock it had purchased in 1929. One block representing 94,500 shares of new class B common stock was acquired by petitioner for cash in the amount of $4,908,966.17. Later in 1929 petitioner canceled the certificates representing these 94,500 shares, issuing new class B common stock certificates in lieu thereof to divers persons for $4,506,497 in cash. Another block of 99,500 shares of new class B common stock was acquired by petitioner in 1929 for $4,601,807.43 in cash. Later in 1929 petitioner canceled the certificates representing these 99,500 shares, issuing new class B common stock certificates in lieu thereof to divers persons for $4,703,608 in cash. The transactions *955 covering the said 94,500 and 99,500 share blocks of stock were handled by brokers on the New York Stock Exchange.
At all times during 1929 the stock books and records of the petitioner*820 indicated that the number of its new class B common stock issued and outstanding was 9,000,000 shares. From the time of acquisition of the certificates representing shares of petitioner's stock until the time of their cancellation and the issuance of new certificates in lieu thereof, the said certificates were regularly entered and recorded on the balance sheets in the financial statement of petitioner under the entry "Investments in Non-competitive Companies", in which all of such stock was entered and carried at the amount of cash for which it was acquired. The said transactions in respect thereof were not entered or recorded in any records of petitioner as either increasing or reducing the number of the outstanding shares of its capital stock. At the times of the acquisitions by petitioner of certificates representing its capital stock, as set forth hereinabove, the cash of petitioner was reduced by the amounts of cash expended for their acquisition. Likewise, at the times in 1929 when the said certificates were disposed of, the cash of petitioner was increased by the amounts received from the disposition thereof.
At the close of the taxable year the petitioner had on hand*821 431,925 shares of its new class B common stock. As of December 31, 1929, these shares represented $19,270,690.98 out of the $19,601,594.77 total appearing on petitioner's books in the amount designated "Investments in Non-competitive Companies." The balance of the account represented investments in the stock of two small licorice companies (from which petitioner secured its supplies of licorice), and stock in the Glenn Tobacco Co. None of the shares of stock of the last mentioned three companies was for sale or was traded in by petitioner.
The profit from the sale by petitioner of its own shares of stock arose solely through the sale of new class B common stock. The stock certificates covering the shares sold in 1929 were endorsed, surrendered, canceled, and reissued in the same normal manner as sales and purchases of all of petitioner's shares of stock. Each transaction involved herein was a completed and closed transaction in the taxable year 1929. During 1929 each and every acquisition and each and every sale made by petitioner of its own stock was for cash and in no instance for anything except cash.
Petitioner's 1929 income tax return, schedule L, indicates a nontaxable*822 profit of $436,581.21. It is stipulated that the last mentioned figure should be reduced by a $150,000 dividend to $286,581.21. The $436,581.21 item is reflected in petitioner's books as *956 a cash item. The item went into petitioner's surplus account and was included in the financial statement of the company made to its stockholders. It was carried as a nontaxable item in accordance with petitioner's understanding of what it was and because of Treasury Department regulations.
In his examination and audit for the year 1929, the respondent has not heretofore included as taxable income or deductible loss any amount arising out of, or resulting from the transactions hereinabove recited.
The parties stipulated with respect to the original deficiency as follows:
14. It is the intent and desire of the parties here to dispose of (by agreement with the approval of the Board of Tax Appeals), all of the issues presented in the petition filed herein on May 4, 1933. In the deficiency letter dated April 2, 1933, from which this appeal was taken, the Commissioner determined that the petitioner realized a taxable profit for 1929 of $142,475.44 determined that the petitioner*823 realized a taxable profit for 1929 of $145,475.44 Winston-Salem, North Carolina. It is hereby stipulated and agreed that, for the purpose of this appeal, such profit should be reduced to $71,196.64. It is further agreed that the net taxable income for 1929, in the amount of $38,497,056.05, as determined by the Commissioner (in the said deficiency letter) should be reduced by $74,278.80 - being the difference between $145,475.44 and $71,196.64, above mentioned; the tax should be recomputed accordingly.
15. By reason of the addition to taxpayer's net taxable income of the amount of $71,196.64, as set out in paragraph 14 hereinabove, the taxpayer's income tax due thereon to the State of North Carolina amounts to $2,774.31, and the similar income tax to the State of Virginia amounts to $16.61, both of which said amounts properly constitute deductions in computing the net taxable income of this taxpayer for purposes of Federal income tax. It is, therefore, stipulated that in the final computation of deficiency in the instant cause, the said amounts of $2,774.31 and $16.61 should be allowed as additional deductions from income of this taxpayer; the tax should be recomputed accordingly.
*824 OPINION.
VAN FOSSAN: The sole issue in this case is whether petitioner by purchasing shares of its own stock, for cash, and later canceling the certificates and selling and issuing new certificates representing such shares for cash, realized a taxable gain. The amount of gain, the acquisitions and dispositions by petitioner of its own stock, the cost and sale prices thereof, and all other material facts are undisputed. There is only the question of law, whether the profit on the several transactions, $436,581.21, is taxable income. By stipulation of the parties this sum is reduced to $286,581.21 because of a $150,000 dividend.
*957 At the time petitioner's tax return was made the regulations of the Treasury Department, article 66, Regulations 74, 1 provided that "a corporation realizes no gain or loss from the purchase or sale of its own stock." Petitioner's return conformed to the regulations then in force, as it reported therein nontaxable income of $436,581.21 under the notation "Profit R. J. R. Stock." This was in accord with the manner in which petitioner had reported similar transactions for the years 1924 to 1928, inclusive, as hereinabove set forth.
*825 Under date of May 2, 1934, article 66, Regulations 74, together with article 543, Regulations 65 and 69, and article 66, Regulations 77, being the regulations under the Revenue Acts of 1924, 1926, 1928, and 1932, was amended by
*826 In his brief respondent admits that
*827 The statutory provisions which the original regulation, article 66, Regulations 74, and the amendment thereto,
*828 This uniformity of construction and administration of the statute is one of the two principal arguments upon which petitioner rests its case. With great care petitioner's brief dovetails the regulations, rulings and decisions of the Commissioner, the decisions of this Board, and the decisions of the courts, with the passage of the several revenue acts, in order to show the repeated reenactment of the definition of "gross income" after such regulations, rulings, and decisions were promulgated or made. Petitioner submits that over this period of approximately 21 years the repeated reenactment of the definition without change, modification or amendment constitutes legislative approval and adoption of the departmental interpretation. Our attention is particularly directed, inter alia, to the decisions of the Supreme Court in
These decisions, and the others considered, establish the rule that great weight should be given "to an administrative interpretation *959 long and consistently followed, particularly when the Congress, presumably with that construction in mind, has reenacted the statute without change * * * [citing cases]." In addition, these decisions establish the rule that where a statute "uses ambiguous terms, or is of doubtful construction, a clarifying regulation or one indicating the method of its application to specific cases not only is permissible but is to be given great weight by the courts." And finally these decisions establish that "the same principle governs where the statute merely expresses a general rule and invests the Secretary of the Treasury with authority to promulgate regulations appropriate to its enforcement",
However, there is another rule of equal importance which the Supreme Court has stated and restated many times. *830 This rule is to the effect that, if the departmental construction is obviously or clearly wrong the Court will so hold, regardless of the long continued practice in administering the act.
These decisions, and others of similar tenor, expressly point out that circumstances may arise where the Court will refuse to follow the departmental construction, even though long continued and followed by subsequent reenactments by the Congress of the statutory section in question. In two recent decisions,
As already stated, the situation here with respect to the original and amended regulations is analagous to the situation in
Briefly summarizing the facts, it appears that petitioner acquired on the open market during the taxable year 574,880 shares of its own stock for which it paid cash. During the taxable year it sold 209,000 shares of its own stock for cash. The excess of the sums received over the sums paid out in the various transactions in its own stock amounted to $436,581.21.
Considering the magnitude and extent of petitioner's operations during the taxable year, it could hardly be denied that it was dealing "in its own shares*833 as it might in the shares of another corporation."
In *834
*961 In
Whether the acquisition or sale by a corporation of shares of its own capital stock gives rise to taxable gain or deductible loss depends upon the real nature of the transaction involved.
To the same effect are
In the last mentioned case the court specifically considered the last sentence of article 66, Regulations 74, supra, and the amendment thereto,*838
The point of law dealt with by the Board is whether the transaction was controlled by the last sentence of Regulations 74, Art. 66: "A corporation realizes no gain or loss from the purchase or sale of its own stock." A reading of the whole Regulations, which had existed at least since 1918, shows that it referred mainly to the original sale of the capital stock and to stock turned back by stockholders to be resold to raise more capital. It was amended in 1934 by
*839 The petitioner contends that the S. A. Woods Machine Co. reversal in no wise involved or turned upon the principle of Simmons & Hammond Manufacturing Co., which, it is asserted, is the present rule of the Board. It is so urged despite the reversals of Board decisions in
While no one of the foregoing decisions specifically overruled the doctrine of
An examination of the Simmons & Hammond Manufacturing Co. case, supra, reveals certain facts analogous to those in this proceeding. There, the corporate taxpayer purchased 94 of the 323 shares of its own outstanding stock from four stockholders. It paid three stockholders $6,800 cash for 34 shares, and paid one stockholder $8,697.40 in cash and $5,449.61 in property of the company for 60 shares. During the same taxable year the corporation sold the 94 shares, *841 purchased at a cost of $20,947.01, to its two principal stockholders, 47 shares each, for the sum of $10,340, and claimed a loss as a result thereof of $10,607.01. The Board refused to allow the loss, holding that the purchase and resale by the corporation of 94 shares of its own stock "constituted a capital transaction"; that by the purchase of its own stock the corporations sustained no loss; that the resale of the stock resulted in no loss to the corporation; and that the method used by the corporate taxpayer "was in truth and in fact a distribution of surplus" to its two principal stockholders, Simmons and Hammond.
Under the facts in this proceeding we are unable to see how it could be said that petitioner's purchases and sales of its own stock were, in truth and in fact, distributions of its surplus. The various transactions in its own stock were directed toward remedying a harmful situation among the retailers of its products, toward protecting its employees, its trade brands, and its business, and in pursuance of a long established policy of widening its stockholding base. We have found no evidence in this record indicating that distribution of the corporation's surplus*842 was the objective of these transactions. The fact is that petitioner's cash was reduced with each purchase, and increased after each sale by the proceeds thereof, and that during the interval between purchase and sale the shares appeared in an account designated "Investments in Non-competitive companies."
As above noted, the record establishes that the primary purposes of the corporation in buying and selling its own stocks were to get wider stock ownership and to support the market, both normal business motivies frequently employed. Albeit there is no testimony that the immediate profit motive was present, the reader of this record would be naive indeed who would not observe such a motive interlarded in the entire situation. The instant tax year does not present an isolated instance. It presents merely the current result of a practice extending over a period of several years.
Another contention upon which petitioner rests its case is that a corporation's own stock is not "property" or "assets" in its own hands, *964 citing *843
The courts of the various states have established by an overwhelming weight of authority that a solvent corporation can purchase and hold its own shares of stock, and the question of whether it holds the purchased stock as an asset is largely a matter of intent.
This petitioner held its shares in its treasury with the unquestioned intention of selling and reissuing them, preferably by placing the stock in the hands of permanent investors. The technical status of the stock while in its hands concerns us little.
Petitioner advances as a further argument in opposition to taxing the gain resulting from petitioner's transactions that the purchases and the sales were capital transactions which affected the corporation's capital structure. *845 This argument is fully met by the provisions of the amendment to the regulations. So far as transactions, capital in their nature, are concerned,
To hold the contrary and sustain petitioner's position that no taxable profit accrues when a corporation, with no proven purpose of effecting changes in its capital structure, goes into the market and buys its own stock, places and holds the same in its investment *965 account and than, a favorable opportunity presenting itself, sells the same through the market at a higher price than it paid for the same, would require us to engage in the exploration of the metaphysical concepts of accounting far beyond the realm of practical legal reasoning. It "presses accounting theory too far in disregard of plain facts."
We have observed that the Supreme*846 Court has held that a regulation or administrative practice which has been long followed and has received legislative sanction should not be overturned except for weighty reasons. That such regulation or practice is based on a false premise; that it elevates to a position of authority a concept which runs counter both to reason and ordinary business judgment; that it prefers a highly artificial interpretation to the usual rationale of normal minds would seem to be "weighty reasons" for dethroning such a regulation or practice.
In our opinion the regulation, as amended, is reasonable, and is consistent with the statute. The prior regulations do not meet these tests. Therefore, the respondent's determination is approved.
In so far as
If, as a result of our decision herein, petitioner's taxes to the States of Virginia and North Carolina are thereby increased, provision should be made for proportionately increasing petitioner's allowable deductions.
Reviewed by the Board.
Decision will be entered under Rule 50.
MORRIS, MURDOCK, *847 and LEECH dissent.
ARUNDELL and TURNER did not participate in the consideration of or decision in this report.
Footnotes
1. ART. 66. Sale by corporation of its capital stock.↩ - The proceeds from the original sale by a corporation of its shares of capital stock, whether such proceeds are in excess of or less than the par value of the stock issued, constitute the capital of the company. If the stock is sold at a premium, the premium is not income. Likewise, if the stock is sold at a discount, the amount of the discount is not a loss deductible from gross income. If, for the purpose of enabling a corporation to secure working capital or for any other purpose, the shareholders donate or return to the corporation to be resold by it certain shares of stock of the company previously issued to them, or if the corporation purchases any of its stock and holds it as treasury stock, the sale of such stock will be considered a capital transaction and the proceeds of such sale will be treated as capital and will not constitute income of the corporation. A corporation realizes no gain or loss from the purchase or sale of its own stock. (See article 176.)
2. Acquisition or disposition by a corporation of its own capital stock. - Whether the acquisition or disposition by a corporation of shares of its own capital stock gives rise to taxable gain or deductible loss depends upon the real nature of the transaction, which is to be ascertained from all its facts and circumstances. The receipt by a corporation of the subscription price of shares of its capital stock upon their original issuance gives rise to neither taxable gain nor deductible loss, whether the subscription or issue price be in excess of, or less than, the par or stated value of such stock.
But where a corporation deals in its own shares as it might in the shares of another corporation, the resulting gain or loss is to be computed in the same manner as though the corporation were dealing in the shares of another. So also if the corporation receives its own stock as consideration upon the sale of property by it, or in satisfaction of indebtedness to it, the gain or loss resulting is to be computed in the same manner as though the payment had been made in any other property. Any gain derived from such transaction is subject to tax, and any loss sustained is allowable as a deduction where permitted by the provisions of applicable statutes. ↩
3. SEC. 22. GROSS INCOME.
(a) General definition.↩ - "Gross income" includes gains, profits, and income derived from salaries, wages, or compensation for personal service, 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 of or interest in such property; also from interest, rent, dividends, securities, or the transaction of any business carried on for gain or profit, or gains or profits and income derived from any source whatever.