Legislation

§ 27. Net income defined; computation. The term "net income" means the
gross income of a taxpayer less the deductions allowed by this subpart.

The net income shall be computed in accordance with the method of
accounting regularly employed in keeping the books of such taxpayer; but
if no such method of accounting has been so employed, or if the method
employed does not clearly reflect the income, the computation shall be
made upon such basis and in such manner as in the opinion of the
director of finance does clearly reflect the income. In determining net
income, war losses, taxation of property recovered, and basis of
property shall be treated in substantially the same manner as such
losses, recoveries and basis are treated under the applicable provisions
of section thirteen hundred thirty-one of the internal revenue code.