Page:United States Statutes at Large Volume 53 Part 1.djvu/26

 CODIFICATION OF INTERNAL REVENUE LAWS other than a bank, as defined in section 104, for the purposes of this chapter, be considered as a loss from the sale or exchange, on the last day of such taxable year, of capital assets. (3) DEFINITION OF SECIRITIES.- AS used in this subsection the term "securities" means bonds, debentures, notes, or certificates, or other evidences of indebtedness, issued by any corporation (in- cluding those issued by a government or political subdivision thereof), with interest coupons or in registered form. (1) 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 accordance with the pertinent provisions of the instrument creat- ing the trust, or, in the absence of such provisions, on the basis of the trust income allocable to each. (n) 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 Com- missioner, with the approval of the Secretary. In any case in which it is ascertained as a result of operations or of development work that the recoverable units are greater or less than the prior esti- mate thereof, then such prior estimate (but not the basis for deple- tion) shall be revised and the allowance under this subsection for subsequent 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 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 appor- tioned between the incomle beneficiaries and the trustee in accord- alice with the pertinlet p)l'ovisiolls of the iilstrullllet 'reatting 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 sec- tion 114 (b), (3) and (4). (n) BASIS FOR DEPRECIATION AND DEPLETION.- T he 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. (o) CHARITABLE AND OTHER CONTRIBUTIONs.-In the case of an individual, contributions or gifts payment of which is 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 domestic corporation, or domestic trust, or domestic com- mumty chest, fund, or foundation:organized and operated exclu- sively 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 individual, and no substantial part of the activities of which is carrying on propaganda, or otherwise attempting, to influence legislation; 14

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