Page:United States Statutes at Large Volume 68A.djvu/99

 C H. 1—NORMAL TAXES AND SURTAXES

59

(ii) section 151 (allowance of deductions for personal exemptions), and (iii) aay net operating loss carryback to the taxable year under section 172. (D)

D E N I A L OF DEDUCTION IN CASE OF CERTAIN TRANSFERS

IN TRUST.—No deduction shall be allowed under this section for the value of any interest in property transferred after March 9, 1954, to a trust if— (i) the grantor has a reversionary interest in the corpus or 'f income of that portion of the trust with respect to which a deduction would (but for this subparagraph) be allowable under this section; and (ii) at the time of the transfer the value of such reversionary interest exceeds 5 percent of the value of the property constituting such portion of the trust. For purposes of this subparagraph, a power exercisable by the grantor or a nonadverse party (within the meaning of section 672 (b)), or both, to revest in the grantor property or income therefrom shall be treated as a reversionary interest. (2) CORPORATIONS.—In the case of a corporation, the total deductions under subsection (a) for any taxable year shall not exceed 5 percent of the taxpayer's taxable income computed without regard to— (A) this section, (B) part VIII (except section 248), (C) any net operating loss carryback to the taxable year under section 172, and (D) section 922 (special deduction for Western Hemisphere trade corporations). Any contribution made by a corporation in a taxable year to which this section applies in excess of the amount deductible in such year under the foregoing limitation shall be deductible in each of the two succeeding taxable years in order of time, b u t only to the extent of the lesser of the two following amounts: (i) the excess of the maximum amount deductible for such succeeding taxable year under the foregoing limitation over the contributions made in such year; and (ii) in the case of the first succeeding taxable year the amount of ., such excess contribution, and in the case of the second succeeding taxable year the portion of such excess contribution not deductible in the first succeeding taxable year, (c) CHARITABLE CONTRIBUTION D E F I N E D. — For purposes of this section, the term "charitable contribution" means a contribution or gift to or for the use of— (1) A State, a Territory, a possession of the United States, or any political subdivision of any of the foregoing, or the United States or the District of Columbia, b u t only if the contribution or gift is made for exclusively public purposes. (2) A corporation, trust, or community chest, fund, or founda', tion— (A) created or organized in the United States or in any possession thereof, or under the law of the United States, any State or Territory, the District of Columbia, or any possession of the United States; § 170(c)(2)(A)

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