Page:United States Statutes at Large Volume 48 Part 1.djvu/716

 690 INCOME TAX. COMPUTATION OF NET IN COM E- Contd. Revision of estimates allowed. Leases. Life estates. Property in trust. Post, p. 710. Basis for depletion, etc. Post, p.710. Charitable, etc ., con- tributions. Gifts . Public uses. Religious, scientific, etc ., organizations. Vocational rehabili- tation. Vol. 43, p. 611. War veterans' or- ganizations, etc. Fraternal society. Limit. Unlimited deduc- tion . Post, p.718. Dividends received by corporations. Domestic. 73d C ONGRESS. SESS. II. CH. 277 . MAY 10, 1934. ditions in each case : such reasonable allowance in all cases to be made under rules and regulations to be prescribed by the Commissioner, with the approval of the Secretary. In any case in which it is ascer- tain ed as a result of operations or of development work that the recoverable units are greater or less than the prior estimate thereof, then such prior estimate (but not the basis for depletion) shall be revised and the allowance under this subsection for subsequent tax- able years shall be based upon such revised estimate. In the cas e of leases the deductions shall be equitably apportioned between the lessor and lessee. In the ca se of property he ld by one person for life with remainder to another person, the deduction shall be com- puted 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 accordance with the pertinent provisions of the instrument creating the trust, or, in the absence of such provisions, on the basis of the trust income allocable to each. (For percentage depletion allowable under this subsection, see section 114 (b ), (3) and (4) .) (n) BASIS FOR DEPRECIATIOK AND DEPL ETION. -Th e b asis up on which depletion, exhaustion, wear and tear, and obsolescence are to be allowed in respect of any property shall be as provided in section 114 . (O) CHARITABLE AND OTHER CONTRIBUTIONS.-In the cas e of an individual, contributions or gifts made within the taxable year to or for the use of (1) the United States, any State, Territory, or any political subdivision thereof, or the District of Columbia, for exclusively public purposes ; (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 private shareholder or indi- vidual, and no substantial part of the activities of which is carrying on propaganda, or otherwise attempting, to influence le gisla tion ; (3) the special fund for vocational rehabilitation authorized by section 12 of the Wor ld War Veterans' Act , 1924 ; (4) posts or organizations of war veterans, or auxiliary units or societies of any such posts or organizations, 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 earnings inures to the benefit of any private shareholder or individual ; or (5) a fraternal society, order, or association, operating under the lodge system, but only if such contributions or gifts are to be used exclusively for religious, charitable, scientific, literary, or edu cational purpose s, or fo r the pr evention of crue lty to c hildren or animals ; to an amount which in all the above cases combined does not exceed 15 per centum of the taxpay er's net income as computed without the benefit of this subsection. Such contributions or gifts shall be allowabl e as ded uctions only if verified under ru les and regulati ons prescribed by the Commissioner, with the approval of the Secretary. (For unlimited deduction if contributions and gifts exceed 90 per centum of the net income, see section 120 .) (p) DIVIDENDS . RECEIVED BY CORPORATIONS. -In the ca se of a corpo rati on, the amou nt r ecei ved as dividends fr om a dom esti c corporation which is subject to taxation under this title. The deduc-