When exempt income is reinvested, the reinvestment income is subject to taxation. (Superintendent of Five Civilized Tribes v. Commissioner, 295 U. S. 418 (1935))There is a distinction between income reinvested in the land and reinvestment income earned on funds not at all reinvested in the land - for instance, income used to improve the land to enhance future earnings, and income placed in the bank to earn interest.

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