overnment were found to be
taxable income. Such payments were distinguished from those excluded
from computation of income in the preceding case in that the former were
neither bonuses, nor gifts, nor subsidies; "that is, contributions to
capital."[31]

GAINS IN THE FORM OF REAL ESTATE; WHEN TAXABLE AS INCOME

When through forfeiture of a lease in 1933, a landlord became possessed
of a new building erected on his land by the outgoing tenant, the
resulting gain to the former was taxable to him in that year. Although
"economic gain is not always taxable as income, it is settled that the
realization of gain need not be in cash derived from the sale of an
asset. * * * The fact that the gain is a portion of the value of the
property received by the * * * [landlord] does not negative its
realization. * * * [Nor is it necessary] to recognition of taxable gain
that * * * [the landlord] should be able to sever the improvement
begetting the gain from his original capital." Hence, the taxpayer was
incorrect in contending that the amendment "does not permit the taxation
of such [a] gain without apportionment amongst the states."[32]
Consistently with this holding the Court has also ruled that when an
apartment house was acquired by bequest subject to an unassumed
mortgage, and several years thereafter was sold for a price slightly in
excess of the mortgage, the basis for determining the gain from that
sale was the difference between the selling price, undiminished by the
amount of the mortgage, and the value of the property at the time of the
acquisition, less deductions for depreciation during the years the
building was held by the taxpayer. The latter's contention that the
Revenue Act, as thus applied, taxed something which was not revenue was
declared to be unfounded.[33]

GAINS IN THE FORM OF BEQUESTS; WHEN TAXABLE AS INCOME

As against the argument of a donee that a gift of stock became a capital
asset when received and that therefore, when disposed of, no part of
that value could be treated as taxable income to said donee, the Court
has declared that it was within the power of Congress to require a donee
of stock, who sells it at a profit, to pay income tax on the difference
between the selling price and the value when the donor acquired it.[34]
Moreover, "the receipt in cash or property * * * not [being] the only
characteristic of realization of income to a taxpayer on the cash
receipts basis," it follows that one wh