to be filed with the debtor or withholding agent by fiduciary will be on Form 1015. Where such exemption is not claimed, notice thereof on Form 1019 should be filed with the withholding agent; provided, that Form 1019 can not be used when the income affected is payable by the fiduciary to a beneficiary who would not be liable under the statute for income tax if such income were payable to such beneficiary directly.

Fiduciaries shall, on or before March 1 of each year, make and render a return, in form prescribed by the Commissioner of Internal Revenue, of the income coming into their custody or control and management from each trust estate when the annual interest of any beneficiary in the income of said trust estate subject to the normal tax is in excess of $3,000, and also when the undistributed income of the estate (as an entity or beneficiary in and of itself for tax purposes), consisting of income from dividends of corporations and other income (or of dividends alone), shall exceed $20,000. In such cases the estate shall be reported as a beneficiary for the undistributed income.

Notice of failure to file a return as required shall be served upon the fiduciary. (See Art. 18.)

The entries on the first page of Form 1041, in column 3, headed "Beneficiaries' interest in amount reported on line 5, whether distributed or not," should not include their respective shares of income derived from dividends on the stock or from the net earnings of corporations, joint-stock companies, etc., subject to like tax, or the income on which the normal tax has beeen deducted and withheld at the source by the debtor or prior withholding agent. These two items should be treated as deductions in determining the amount of income subject to the normal tax and for which the fiduciary as withholding agent is to account.

The income of trust estates, as any other income, is subject to the income tax. When such income is received annually by a beneficiary of an estate the fiduciary will withhold the

normal tax due and subject to withholding by him. Any part of the annual income of trust estates not distributed becomes an entity and, as such, is liable for the normal and additional tax, which must be paid by the fiduciary. When the beneficiary is not in esse and the income of the estate is retained by the fiduciary, such income will be taxable to the estate as for an individual and the fiduciary will pay the tax, both normal and additional. When the beneficiary receives a part only of the income to which he is entitled from the estate and the balance is retained by the fiduciary the normal tax will be withheld on the income paid to the beneficiary and the amount of such income retained by the fiduciary will be treated as income taxable to the estate for both the normal and additional tax, which tax will be paid by the fiduciary. When the gross net income not distributed and remaining in the hands of a fiduciary is less than $20,000 the estate will be listed as a beneficiary, and only the normal income tax will be assessable, and such tax will be paid by the fiduciary. When the gross net income not distributed and remaining in the hands of a fiduciary exceeds $20,000 such income is subject to both the normal and additional tax, and the estate will be listed as a beneficiary and both the normal and additional tax will be paid by the fiduciary.

In all cases where fiduciaries act for minors or other incompetents they are held, for the purpose of the income tax, to be acting as the agents of such minors or other incompetents and must pay all tax (normal and additional) chargeable on such income in their hands as though the persons for whom they act were acting for themselves.

T. D. 1906 and T. D. 1943 and Articles 70, 71, 74, and 75 of Regulations 33, and all other regulations so far as inconsistent herewith, are hereby superseded.

(T. D. 2242.)

Nonresident aliens-Definition of residence in subdivision 1, paragraph A, and T. D. 2109 of December 28, 1914.

"Residence," as used in subdivision 1 of paragraph A of the act of October 3, 1913, and T. D. 2109, is held to be

That place where a man has his true, fixed, and permanent home and principal establishment and to which, whenever he is absent, he has the intention of returning, and indicates permanency of occupation as distinct from lodging or boarding or temporary occupation.

For the purposes of the income tax it is held that where, for business purposes or otherwise, an alien is permanently located in the United States, has there his principal business establishment, and is there permanently occupied or employed, even though his domicile may be without the United States, he will be held to be within the definition of "every person residing in the United States, though not a citizen thereof * * * ," while aliens who are physically present in the United States but only temporarily resident or employed therein (as for a season or other similarly definite term, and with the expectation or intention of leaving the United States upon the termination of employment or accomplishment of the purpose which necessitated presence in the United States) are within the class of "persons residing elsewhere *

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Aliens coming to the United States with the intention of becoming residents thereof within the meaning and intent of the income tax statute may establish that fact and have the privilege of resident aliens under the statute by filing with withholding agents a certificate in the following form, under oath, and which certificate shall be filed by said withholding agents with collectors of internal revenue as justification for withholding on the basis of "residence" in the United States.

CERTIFICATE.

Certificate of residence-Claim by aliens.

(To be filed by aliens with withholding agents when residence in the United States is a fact, for the purpose of claiming the benefit of residence for incometax purposes, where otherwise status would be that of a nonresident alien.)

I hereby declare that I am a citizen or subject of.................; that I arrived in the United States on or about

and that it is my intention to establish and maintain a residence in the United States; that the address in the United States where any and all notices and communications relative to my liability for any income tax may be sent or mailed to me is

(Street and number.)

(City.)
(Signed)

(State.)

Sworn to and subscribed before me this...... day of............, 191.......

(Official capacity.)

Said certificate shall be in size 8 by 311⁄2 inches and shall be printed to read from left to right along the 8-inch dimension. It shall be printed on blue paper corresponding in weight and texture to white writing paper 21 by 32, about 40 pounds to the ream of 500 sheets, and will be provided by the Government and furnished without cost to the users thereof.

(T. D. 2258.)

Execution of income-tax ownership certificates by banks and trust companies.

You are advised that as a convenience to banks and trust companies having a large number of ownership certificates to execute in the collection of interest on bonds it is hereby provided that the name of the bank or trust company may be printed or stamped and the facsimile of the signature of the person authorized to sign for the bank or trust company in executing the said ownership certificates may be printed

or stamped on the certificates: Provided, That in all cases the bank or trust company shall first file with the Commissioner of Internal Revenue a certificate of its authorization in substantially the following form:

(City.)

(Date.)

THE COMMISSIONER OF INTERNAL REVENUE, Washington, D. C. The undersigned hereby authorizes the use of the facsimile signature shown below upon all income-tax ownership certificates issued in its name until this authorization is revoked by written notice to you.

Depreciation not allowed fiduciaries as a deduction from gross income in cases where no depreciation reserve is maintained, but the amount claimed as a deduction for depreciation is paid to the beneficiary as income.

To collectors of internal revenue:

In the case of a trust estate where the terms of the will or trust or the decree of a court of competent jurisdiction provide for keeping the corpus of the estate intact and where physical property forming a part of the corpus of such estate has suffered depreciation through its employment in business this office will permit a deduction from gross income for the purpose of caring for this depreciation, where the deduction is applied or held by the fiduciary for making good such de preciation. No depreciation deduction will be permitted by