Page:United States Statutes at Large Volume 56 Part 1.djvu/974

 PUBLIC LAWS-CH. 619-OCT. 21, 1942 [56 STAT. bears to property subject to general claims. If the property includible in the gross estate to which the deduction under this subsection is attributable is not wholly property subject to general claims- "(1) before the application of the preceding sentence, the amount of the deduction under this subsection shall be reduced by that part of such amount as the value, at the time of the dece- dent's death, of such property (to which such deduction is attrib- utable) subject to claims but not to general claims is of the value, at the time.of the decedent's death, of such property, and "(2) in the application of the preceding sentence in reducing the, balance, if any, of such deduction, 'the amount otherwise deductible under this subsection' shall be only that part of such amount otherwise deductible (determined without regard to clause (1) of this paragraph) as the value, at the time of the decedent's death, of such property (to which such deduction is attributable) subject to general claims is of the value, at the time of the dece- dent's death, of such property. For the purposes of the two preceding sentences and this sentence, 'general claims' are the amounts allowed as deductions under subsec- tion (b) which, under the applicable law, in the final adjustment and settlement of the estate may be enforced against any property subject to claims, as defined in subsection (b), and 'property subject to general claims' is the value, at the time of the decedent's death, of property subject to claims, as defined in subsection (b), reduced by the value, at the time of the decedent's death, of that part of such property against which amounts allowed as deductions under subsection (b) which are not general claims may be enforced, under the applicable law, in the final adjustment and settlement of the estate." (c) PRIOR TAXED PROPERTY OF NONRESIDENTS NOT CITIZENS.- The next to the last sentence of section 861 (a) (2) (relating to deduction for prior taxed property of nonresidents not citizens of the United States) is amended to read as follows: "The deduction under this paragraph shall be reduced by an amount which bears the same ratio to the amounts allowed as deductions under paragraphs (3) and (4) and the amount of general claims allowed as deduction under para- graph (1) of this subsection as the amount otherwise deductible under this paragraph bears to property subject to general claims. If the property includible in the gross estate to which the deduction under the paragraph is attributable is not wholly property subject to general claims- "(A) before the application of the preceding sentence, the amount of the deduction under this paragraph shall be reduced by that part of such amount as the value, at the time of the decedents death, of such property (to which such deduction is attributable) subject to claims but not to gen- eral claims is of the value, at the time of the decedent's death, of such property, and "(B) in the application of the preceding sentence in reduc- ing the balance, if any, of such deduction, 'the amount other- wise deductible under this paragraph' shall be only that part of such amount otherwise deductible (determined without regard to subparagraph (A)) as the value, at the time of the decedent's death, of such property (to which such deduction is attributable) subject to general claims is of the value, at the time of the decedent's death, of such property. For the purposes of the two preceding sentences and this sentence, 'general claims' are the amounts allowed as deductions under para- graph (1) of this subsection which, under the applicable law, in the fnal adjustment and settlement of the estate may be enforced against 946 53 Stat. 130. 26 U. S. C., Supp. I, 861 (a) (2). PoSt, p. 948.

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