---
kind: "section"
citation: "26 U.S.C. § 109"
title: "26"
title_heading: "Internal Revenue Code"
number: "109"
heading: "Improvements by lessee on lessor’s property"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/26/109"
units:
  - "Subtitle A — Income Taxes"
  - "Chapter 1 — Normal Taxes and Surtaxes"
  - "Subchapter B — Computation of Taxable Income"
  - "Part III — Items Specifically Excluded from Gross Income"
---

# §109. Improvements by lessee on lessor’s property


Gross income does not include income (other than rent) derived by a lessor of real [property](/usc/26/317.md?p=a) on the termination of a lease, representing the [value](/usc/26/851.md?p=c-4) of such [property](/usc/26/317.md?p=a) attributable to buildings erected or other improvements made by the lessee.


## Source credit

(Aug. 16, 1954, ch. 736, 68A Stat. 33.)