Page:United States Statutes at Large Volume 47 Part 1.djvu/205

 72d CONGRESS. SESS. I. CH. 209. JUNE 6, 1932. may allow such debt, in an amount not in excess of the part charged off within the taxable year, as a deduction. (k) DEPRECIATION .-A reasonable allowance for the exhaustion, wear and tear of property used in the trade or business, including a reasonable allowance for obsolescence. In the case of property held by one person for life with remainder to another person, the deduction shall be computed as if the life tenant were the absolute owner of the property and shall be allowed to the life tenant. In the case of property held in trust the allowable deduction shall be apportioned between the income beneficiaries and the trustee in accor dance with the p ertin ent p rovisi ons o f the instr ument crea t- ing the trust, or, in th e absenc e of suc h provis ions, on the bas is of t he trust income allocabl e to eac h. (1) DEPLETION .-In the case of mines, oil and gas wells, other natural deposits, and timber, a reasonable allowance for depletion and for depreciation of improvements, according to the peculiar conditions in each case ; such reasonable allowance in all cases to be made under rules and regulations to be prescribed by the Commis- sioner, with the approval of the Secretary. In any case in which it i s ascert ained as a resul t of -op erations or of de velopmen t work t hat the r ecove rable units are great er or less than the pr ior e stima te thereof, then such prior estimate (but not the basis for depletion) shall be revised and the allowance under this subsection for subse- quent taxable years shall be based upon such revised estimate. In the case of leases the deductions shall be equitably apportioned between the lessor and lessee. In the case of property held by one person for life with rem ainder t o anothe r person, the de duction shall be computed as if the life tenant we re the absolute owner of the property and shall be allowed to the life tenant. In the case of property held in trust the allowable deduction shall be apportioned between the income beneficiaries and the trustee in accordance with the per tinent p rovisions of the instrume nt creat ing the trust, o r, in the absence of such provisions, on the basis of the trust income allocable to each. (F or pe rcent age de pleti on, s ee se ction 114(b ) (3) and (4) .) (in) BASIS FOR DEPRECIATION AND DEPLETioN.-The basis upon which depletion, exhaustion, wear and tear, and obsolescence are to be allowed in respect of any property shall be as provided in section 114. (n) CH ARI TAB LE AND OTH ER CONTRIBIITIONs.-In the case of an individual, contributions or gifts made within the taxable year to or for the use of (1 ) the Unit ed Sta tes, any S tate, Terri tory, or a ny pol itica l subdivision thereof, or the District of Columbia, for exclusively pu blic purpo ses ; (2) a corporation, or trust, or community chest, fund, or founda- tion, organized and operated exclusively for religious, charitable, scientific, literary, or educational purposes, or for the prevention of cruelty to children or animals, no part of the net earnings of which inures to the benefit of any priva te shareh older or individual ; (3) the special fund for vocational rehabilitation authorized by section 12 of the World War Veterans' Act, 1924 ; (4) posts or organizations of war veterans, or auxiliary units or soci eties of a ny suc h pos ts or organ izati ons, if such posts, organizations, units, or societies are organized in the United States or any of its possessions, and if no part of their net e arning s inures to the benefit of any private shareholder or individual ; or Exhaustion, etc., of bus ines s property. Life es tates . Property in trust. Mines, oil end gas wells, timber, etc. Reasonable allow- an ce for depletion, etc. Revision of estimates al lo wed . Leases. Life estates. Property in trust . Post, p.202. Basis for depletion, etc . Charitable, etc., con- tributions. Gifts. For public uses. 181 INCOME TAX Corpor ations, com- mun ity che sts, reli- gious, scientific, etc ., organizations. Vo cat io nal rehabili- tation. Vol .43,p.611. War veterans' organ- izations, etc.