Page:United States Statutes at Large Volume 47 Part 1.djvu/244

 220 INCOME TAX Net income. Computation. Deductions allowed . Charitable, ate ., con- tributions. Current distribution by fiduciary, etc. Payment made or credited to benefici- aries. To be included In in- come of beneficiary. Credits against net income . Normal tax personal exemption allowed hei rs, etc. Ante, p. 184. Credits of beneficiary in computing income. Ante, p. 184. Credits allowed es- tate or trust. Different taxable years. Computation if tax- able year of estate or trust a nd ben eficia ry differ. 72c1 CONGRESS. SESS. I. CH. 209 . JUN E 6, 1932 . SEC. 162. NET INC OME. The net income of the estate or trust shall be computed in the same manner and on the same basis as in the case of an individual, except that- (a) There shall be allowed as a deduction (in lie u of the deducti on for charitable, etc ., contributions authorized by section 23(n)) any part of the gross income, without limitation, which pursuant to the terms of the will or deed creating the trust, is during the taxable year paid or permanently set aside for the purposes and in the manner specified in section 23(n), or is to be used exclusively for religious, charitable, scientific, literary, or educational purposes, or for the prevention of cruelty to children or animals, or for the establishment, acqui sitio n, mai ntena nce o r oper ation ofa publi c cem etery not operated for p rofit ; (b) There shall be allowed as an additional deduction in com- puting the net income of the e state or trust t he amount of the income of the estate or trust for its taxable year which is to be distributed currently by the fiduciary to the beneficiaries, and the amount of the income collected by a guardian of an infant which is to be held or distributed as the court may direct, but the amount so allowed as a deduction shall be included in computing the net income of the bene- ficiaries whether distributed to them or not. Any amount allowed as a deduction under this paragraph shall not be allowed as a deduction tinder subsection (c) of this section in the same or any succeeding taxable year ; (c) In the case of income received by estates of deceased persons during the period of administration or settlement of the estate, and in the case of income which, in the discretion of the fiduciary, may be either distributed to the beneficiary or accumulated, there shall be allowed as an additional deduction in computing the net income of the estate or trust the amount of the income of the estate or trust for its taxable year which is properly paid or credited during such year to any legatee, heir, or beneficiary, but the amount so allowed as a deduction shall be included in computing the net income of the legat ee, h eir, or b enefi ciary. SEC. 163. CREDITS AGAINST NET INCOME. (a) CREDITS OF ESTATE OR TRUST .-For the purpose of the normal tax the estate or trust shall be allowed the same personal exemption as is allowed to a single person under section 25(c), and, if no part of the i ncome o f the es tate or trust is included in com puting the net income of any legatee, heir, or beneficiary, then in addition the same credits against net income for dividends and interest as are allowed by section 25 (a) and (b). (b) CR EDI TS OF BENEFICIARY .-If an y part of the income of an estate or trust is included in computing the net income of any legatee, heir, or beneficiary, such legatee, heir, or beneficiary shall, for the purpose of the normal tax, be allowed as credits against net income, in addition to the credits allowed to him under section 25, his proportionate share of such amounts of dividends and interest specified in section 25 (a) and (b) as are, under this Supplement, required to be included in computing his net income. Any remain- ing portion of such amounts specified in section 25 (a) and (b) shall, for the purpose of the normal tax, be allowed as credits to the estate or trust. SEC. 164. DIFFE RENT T AXABLE YEARS. If the taxable year of a beneficiary is different from that of the estate or trust, the amount which he is required, under section 162 (b), to include in computing his net income, shall be based upon