(a) Definition.— 'Adjusted gross income'’ means the gross income as defined in § 30101 of this title minus:(1) Exemptions.— The exemptions provided in § 30102 of of this title.(2) Trade or business deductions.— The deductions allowed under §§ 30121 and 30122 of this title, which are attributable to a trade or business carried on by the taxpayer, if such trade or business does not consist of the performance of services by the taxpayer as an employee.(3) Interest and other expenses paid for the purchase of investments.— Expenses related to investments in deposit accounts or certificates of deposit or investment accounts, bonds, notes or other liabilities whose sum has been invested in such investments, up to the amount of the income derived therefrom, but there shall not be [allowed as a] deduction the sum of the interest and expenses on investment, which are attributable to investments whose income is exempt from income taxes under the provisions of the clauses (5) and (10) of subsection (a) of § 30137 of this title.(4) Deductions attributable to rents and royalties.— Deductions other than those provided in clause (2), (5) or (6) of this subsection, allowed under § 30121 of this

tion (a) of § 30137 of this title.(4) Deductions attributable to rents and royalties.— Deductions other than those provided in clause (2), (5) or (6) of this subsection, allowed under § 30121 of this title, which are attributable to property held for the production of rents or royalties.(5) Certain deductions of life tenants and income beneficiaries of property.— Deductions other than those provided in clause (2) for depreciation and depletion allowed by § 30127 of this title to a life tenant of property, or an income beneficiary of property held in trust.(6) Losses from sale or exchange of property.— Deductions other than those provided in clause (2) allowed by § 30121 of this title as losses from the sale or exchange of property.(7) Alimony.— The deduction allowed by § 30133 of this title; and(8) Expenses incurred or paid in the generation of income other than the trade or business of the taxpayer.— Amounts incurred and paid by the taxpayer related to the generation of income other than the trade or business of the taxpayer, up to the amount generated during the taxable year as provided in § 30122 of this title under the regulations promulgated by the Secretary. History —Jan.

r than the trade or business of the taxpayer, up to the amount generated during the taxable year as provided in § 30122 of this title under the regulations promulgated by the Secretary. History —Jan. 31, 2011, No. 1, § 1031.03, retroactive to Jan. 1, 2011; Sept. 19, 2014, No. 159, § 1.