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ITG FAQ #3 Answer-Are some types of distribution nontaxable?

Yes. There are certain kinds of income (distributions) of Indians that Congress has elected not to tax. One of the most important is income from individually allotted land that remains held in trust by the Federal government. This income applies to rents and royalties as well as income from sale of crops or minerals from the land. ( Revenue Ruling 56-342, 1956-2 C.B. 20) Gain from the sale of livestock raised on allotted trust land has also been ruled exempt. ( Revenue Ruling 62-16, 1962-1 C.B. 7)

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Page Last Reviewed or Updated: 11-Oct-2016