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Act of 1928.

this subsection, if the claim of the deduction by the estate is barred by the statute of limitations, but such claim by the beneficiary is not so barred, the deduction shall be allowed to the beneficiary, and if such claim by the beneficiary is barred by the statute of limitations, but such claim by the estate is not so barred, the deduction shall be allowed to the estate.

(b) As used in this section, the term "claimed" means claimed

(1) In the return; or

(2) In a claim in abatement filed in respect of an assessment made on or before June 2, 1924.

(c) This section shall not affect any case in which a decision of the Board of Tax Appeals or any court has been rendered prior to the enactment of this Act, whether or not such decision has become final.

SEC. 704. TAXABILITY OF TRUSTS AS
CORPORATIONS-RETROACTIVE.

(a) If a taxpayer filed a return as a trust for any taxable year prior to the taxable year 1925 such taxpayer shall be taxable as a trust for such year and not as a corporation, if such taxpayer was considered to be taxable as a trust and not as a corporation either (1) under the regulations in force at the time the return was made or at the time of the termination of its existence, or (2) under any ruling of the Commissioner or any duly authorized officer of the Bureau of Internal Revenue applicable to any of such years, and interpretative of any provision of the Revenue Act of 1918, 1921, or 1924, which had not been reversed or revoked prior to the time the return was made, or under any such ruling made after the return was filed which had not been reversed or revoked prior to the time of the termination of the taxpayer's existence.

(b) For the purpose of the Revenue Act of 1926 and prior Revenue Acts, a trust shall, at the option of the trustee exercised within one year after the enactment of this Act, be considered as a trust the income of which is taxable (whether distributed or not) to the beneficiaries, and not as an association, if su chtrust (1) had a single trustee, and (2) was created and operated for

Act of 1926.

Act of 1928.

the sole purpose of liquidating real property as a single venture (with such powers of administration as are incidental thereto, including the acquisition, improvement, conservation, division, and sale of such property), distributing the proceeds therefrom in due course to or for the benefit of the beneficiaries, and discharging indebtedness secured by the trust property, and (3) has not made a return for the taxable year as an association.

SEC. 705. INSTALLMENT SALES—
RETROACTIVE.

(a) If any taxpayer by an original return made prior to February 26, 1926, changed the method of reporting his net income for the taxable year 1924 or any prior taxable year to the installment basis, then, if his income for such year is properly to be computed on the installment basis

(1) No refund or credit of income, war-profits, or excess-profits taxes for the year in respect of which the change is made or any subsequent year shall be made or allowed, unless the taxpayer has overpaid his taxes for such year, computed by including, in computing income, amounts received during such year on account of sales or other dispositions of property made in any prior year; and

(2) No deficiency shall be determined or found in respect of any such taxes unless the taxpayer has underpaid his taxes for such year, computed by excluding,

in computing income,

amounts received during such year on account of sales or other dispositions of property made in any year prior to the year in respect of which the change was made.

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Act of 1926.

Act of 1928.

trust organized and operated exclusively for religious, charitable, scientific, literary, or educational purposes, if such individual made during the taxable year 1924 contributions or gifts to the same trust and in the aggregate of substantially the same amount. In no case shall there be allowed as a deduction under this section contributions or gifts to an amount in excess of $50,000. Any tax paid in respect of such deduction shall, subject to the statutory period of limitation applicable thereto, be credited or refunded.

SEC. 707. INCOME TAX ON SALE OF VESSELS BUILT BEFORE 1914.

The second paragraph of section 23 of the Merchant Marine Act, 1920, is amended, to take effect as of June 5, 1920, to read as follows:

"During the period of ten years from June 5, 1920, any person, a citizen of the United States, who may sell a vessel documented under the laws of the United States and built prior to January 1, 1914, shall be exempt from all income taxes that would be payable upon any of the proceeds of such sale under the Revenue Act of 1918, or under any subsequent Revenue Act in force during such ten-year period, if the entire proceeds thereof shall be invested in the building of new ships in American shipyards, such ships to be documented under the laws of the United States and to be of a type approved by the board. The basis of any such new ship shall be reduced by the amount of the gain from such sale exempt from taxation under this paragraph.'

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SEC. 708. DEFINITION OF THE TERM "MOTOR BOAT."

The term "motor boat," when used in the Act of September 21, 1922, includes a yacht or pleasure boat, regardless of length or tonnage, whether sail, steam, or motor propelled, owned by a resident of the United States or brought into the United States for sale or charter to a resident thereof, whether or not such yacht or boat is brought into the United States under its own power, but does not include a yacht or boat used or intended to be used in trade or commerce, nor a yacht or boat built, or for the building of which a contract was entered into, prior to December 1, 1927.

Act of 1926.

NOTE. The reference opposite is to paragraph 370 of the Tariff Act of 1922, which is as follows: "Airplanes, hydroplanes, motor boats, and parts of the foregoing, 30 per centum ad valorem."

Act of 1928.

Act of 1926.

SEC. 709. REMISSION OF MITIGATION OF FORFEITURES.

The provisions of law applicable to the remission or mitigation by the Secretary of the Treasury of forfeitures under the customs laws shall apply to forfeitures incurred or alleged to have been incurred, before or after the enactment of this Act, under the internal-revenue laws.

SEC. 710. REFUNDS AND CREDITS TO BE REFERRED TO JOINT COMMITTEE.

No refund or credit of any income, war-profits, excess-profits, estate or gift tax, in excess of $75,000, shall be made after the enactment of this Act, until after the expiration of thirty days from the date upon which a report giving the name of the person to whom the refund or credit is to be made, the amount of such refund or credit, and a summary of the facts and the decision of the Commissioner of Internal Revenue is submitted to the Joint Committee on Internal Revenue Taxation. A report to Congress shall be made annually by such committee of such refunds and credits, including the names of all persons and corporations to whom amounts are credited or payments are made, together with the amounts credited or paid to each.

SEC. 711. COMMISSIONERS OF COURT OF CLAIMS.

The salary of the commissioners of the Court of Claims provided for in the Act entitled "An Act to authorize the appointment of commissioners by the Court of Claims and to prescribe their powers and compensation," approved February 24, 1925, as continued in force by Public Resolution 4, Seventieth Congress, approved January 11, 1928, shall after the date of the enactment of this Act be at the rate of $7,500 a year.

SEC. 712. BUREAU OF INTERNAL REVENUE-DETAILS TO WASHING

TON.

The Commissioner may order any officer or employee of the internalrevenue serivce engaged in field work to duty with the Bureau of Internal Revenue in the District of Columbia, for such periods as the Secretary may prescribe, and to any designated post of duty outside the District of Columbia, upon the completion of such duty. 1739-28-12

("Provided, That no part of this appropriation shall be available for paying any claim allowed in excess of $75,000 until after the expiration of sixty days from the date upon which a report giving the name of the person to whom the refund is to be made, the amount of the refund, and a summary of the facts and decision of the Commissioner of Internal Revenue is submitted to the Joint Committee on Internal Revenue Taxation.") 19

19 First Deficiency Act, 1927, Title: Treasury Department, Bureau of Internal Revenue (Public No. 660, 69th Cong.).

Act of 1928.

Act of 1926.

SEC. 713. SALARIES OF COLLECTORS OF INTERNAL REVENUE.

Section 1301 (b) of the Revenue Act of 1918 is amended to read as follows:

"(b) The salaries of collectors may be readjusted and increased under such regulations as may be prescribed by the Commissioner, subject to the approval of the Secretary, but no collector shall receive a salary in excess of $7,500 a year.'

SEC. 714. REPEALS.

The parts of the Revenue Act of 1926 which are repealed by this Act shall remain in force for the assessment and collection of all taxes imposed thereby, and for the assessment, imposition, and collection of all interest, penalties, or forfeitures which have accrued or may accrue in relation to any such taxes.

SEC. 715. SEPARABILITY CLAUSE.

If any provision of this Act, or the application thereof to any person or circumstances, is held invalid, the remainder of the Act, and the application of such provision to other persons or circumstances, shall not be affected thereby.

SEC. 716. EFFECTIVE DATE OF ACT. Except as otherwise provided, this Act shall take effect upon its enactment.

Approved, May 29, 1928, 8 a. m.

SEC. 1200. (b) The parts of the Revenue Act of 1924 which are repealed by this Act shall (except as provided in sections 283 and 318 and except as otherwise specifically provided in this Act) remain in force for the assessment and collection of all taxes imposed by such Act, and for the assessment, imposition, and collection of all interest, penalties, or forfeitures which have accrued or may accrue in relation to any such taxes, and for the assessment and collection, to the extent provided in the Revenue Act of 1924, of all taxes imposed by prior income, warprofits, or excess-profits tax acts, and for the assessment, imposition, and collection of all interest, penalties, or forfeitures which have accrued or may accrue in relation to any such taxes. In the case of any tax imposed by any part of the Revenue Act of 1924 repealed by this Act, if there is a tax imposed by this Act in lieu thereof, the provision imposing such tax shall remain in force until the corresponding tax under this Act takes effect under the provisions of this Act.

SAVING CLAUSE IN EVENT OF UNCONSTITUTIONALITY

SEC. 1213. If any provision of this Act, or the application thereof to any person or circumstances, is held invalid, the remainder of the Act, and the application of such provision to other persons or circumstances, shall not be affected thereby.

EFFECTIVE DATE OF ACT

SEC. 1214. Except as otherwise provided, this Act shall take effect upon its enactment.

Approved, February 26, 1926, 10.25

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