### Question
How does NORMAL TAXES AND SURTAXES define applicable amount?


### Answer
Under *26 U.S.C. § 280H*, **applicable amount** is defined as:

> any amount paid to an employee-owner which is includible in the gross income of such employee, other than—


(A) any gain from the sale or exchange of property between the owner-employee and the corporation, or


(B) any dividend paid by the corporation

#### Citation:
  - *26 U.S.C. § 280H*
  - Heading: **Subtitle A-Income Taxes > CHAPTER 1-NORMAL TAXES AND SURTAXES > Subchapter B-Computation of Taxable Income > PART IX-ITEMS NOT DEDUCTIBLE**

