He fixes no period to the retrospect he declares, but reserves, if he be taken at his word, the transfers of all times to the demands of revenue. In this there is much to allure an administrative officer. Indeed, its simplicity attracts any one. It removes puzzle from construction and perplexity and pertinence on account of the distance of death from the transfer, risking no chances of courts or juries, in repugnance or revolt, taking liberties with the act to relieve from its exactions to the demands of revenue.

If Congress, however, had the purpose assigned by the Commissioner, it should have declared it; when it had that purpose, it did declare it. In the Revenue Act of 1918 (Comp. St. Ann. Supp. 1919, § 633634c) it reënacted section 202 of the Act of September 8, 1916, and provided that the transfer or trust should be taxed, whether "made or created before or after the passage of" the act. And we cannot accept the explanation that this was an elucidation of the act of 1916, and not an addition to it, as averred by defendant, but regard the act of 1918 rather as a declaration of a new purpose; not the explanation of an old one. But, granting the contention of the defendant has plausibility, it is to be remembered that we are dealing with a tax measure, and whatever doubts exist must be resolved against it.

This we have seen is the declaration of the cases, and this the basis of our decision; that is, has determined our judgment against the retroactive operation of the statute. There are adverse considerations, and the government has urged them all. To enter into a detail of them, or of the cases cited to sustain them, and of those cited to oppose them, either directly or in tendency, and the examples of the states for and against them, would extend this opinion to repellent length. We need only say that we have given careful consideration to the opposing argument and cases, and a careful study of the text of the act of Congress, and have resolved that it should be not construed to apply to transactions completed when the act became a law. And this, we repeat, is in accord with principle and authority. It is the proclamation of both that a statute should not be given a retrospective operation, unless its words make that imperative and this cannot be said of the words of the Act of September 8, 1916. Judgment reversed.

CHAPTER IV

CREDITS, DEDUCTIONS, AND EXEMPTIONS

Revenue Act of 1924.

SEC. 301 (b) The tax imposed by this section shall be credited with the amount of any estate, inheritance, legacy, or succession taxes actually paid to any State or Territory or the District of Columbia, in respect of any property included in the gross estate. The credit allowed by this subdivision shall not exceed 25 per cent of the tax imposed by this section.

SEC. 322. In case a tax has been imposed under section 319 upon any gift, and thereafter upon the death of the donor the amount thereof is required by any provision of Part I of this title to be included in the gross estate of the decedent then there shall be credited against and applied in reduction of the estate tax, which would otherwise be chargeable against the estate of the decedent under the provisions of section 301, an amount equal to the tax paid with respect to such gift; and in the event the donor has in any year paid the tax imposed by section 319 with respect to a gift or gifts which upon the death of the donor must be included in his gross estate and a gift or gifts not required to be so included, then the amount of the tax which shall be deemed to have been paid with respect to the gift or gifts required to be so included, shall be that proportion of the entire tax paid on account of all such gifts which the amount of the gift or gifts required to be so included bears to the total amount of gifts in that year.

SEC. 303. For the purpose of the tax the value of the net estate shall be determined

(a) In the case of a resident, by deducting from the value of the gross estate

(1) Such amounts for funeral expenses, administration expenses, claims against the estate, unpaid mortgages upon, or any indebtedness in respect to, property (except, in the case of a resident decedent, where such property is not situated in the United States), to the extent that such claims, mortgages, or indebtedness were incurred or contracted bona fide and for a fair consideration in money or money's worth, losses incurred during the settlement of the estate arising from fires, storms, shipwreck, or other casualty, or from theft, when such losses are not compensated for by insurance or otherwise, and such amounts reasonably

required and actually expended for the support during the settlement of the estate of those dependent upon the decedent, as are allowed by the laws of the jurisdiction, whether within or without the United States, under which the estate is being administered, but not including any income taxes upon income received after the death of the decedent, or any estate, succession, legacy, or inheritance taxes;

(2) An amount equal to the value of any property (A) forming a part of the gross estate situated in the United States of any person who died within five years prior to the death of the decedent, or (B) transferred to the decedent by gift within five years prior to his death, where such property can be identified as having been received by the decedent from such donor by gift or from such prior decedent by gift, bequest, devise, or inheritance, or which can be identified as having been acquired in exchange for property so received. This deduction shall be allowed only where a gift tax or an estate tax under this or any prior act of Congress was paid by or on behalf of the donor or the estate of such prior decedent, as the case may be, and only in the amount of the value placed by the Commissioner on such property in determining the value of the gift or the gross estate of such prior decedent, and only to the extent that the value of such property is included in the decedent's gro estate and not deducted under paragraph (1) or (3) of this subdivision;

(3) The amount of all bequests, legacies, devises, or transfers, except bona fide sales for a fair consideration in money or money's worth, in contemplation of or intended to take effect in possession or enjoyment at or after the decedent's death, to or for the use of the United States, any State, Territory, any political subdivision thereof, or the District of Columbia, for exclusively public purposes, or to or for the use of any corporation organized and operated exclusively for religious, charitable, scientific, literary, or educational purposes,56 including the encouragement of art and the prevention of cruelty to children or animals, no part of the net earnings of which inures to the benefit of any private stockholder or individual, or to a trustee or trustees, or a fraternal society, order, or association operating under the lodge system, but only if such contributions or gifts are to be used by such trustee or trustees, or by such fraternal society, order, or association, exclusively for religious, charitable, scientific, literary, or educational purposes, or for the prevention of cruelty to children or animals. If the tax imposed by section 301, or any estate, succession, legacy, or inheritance taxes, are, either by the terms of the will, by the law of the jurisdiction under which the estate is administered, or by the law of the jurisdiction imposing the particular tax, payable in whole or in part out of the bequests, legacies, or devises otherwise deductible under this paragraph, then the amount deductible under this

56 As to what constitutes a charitable purpose, see Sol. Op. 159, Cum. Bull. III-1, 480.

paragraph shall be the amount of such bequests, legacies, or devises reduced by the amount of such taxes; and

(4) An exemption of $50,000.

Regulations 68.

ART. 9. (a) Credit for estate, inheritance, legacy, or succession taxes-Under the provisions of section 301 (b) the estate is entitled, under certain conditions, to a credit against the Federal estate tax for payments of estate, inheritance, legacy, or succession taxes actually made to any of the several states, territories, or the District of Columbia.

This credit applies only to the estates of persons dying after the effective date of the Revenue Act of 1924, and is limited to 25 per cent of the Federal estate tax. No credit may be taken or allowed for any part of such taxes unless the property in respect to which such taxes were imposed is included in the gross estate of the decedent for Federal

estate tax.

The Federal estate tax is due and payable one year after the date of decedent's death, and in making payment of the amount shown by the return to be due the executor may claim credit, subject to the approval of the Commissioner upon audit of the return, of an estimated amount of any such taxes for which the estate will ultimately be entitled to a credit, and pay the balance of the tax disclosed by the return. Where, however, such taxes have been paid prior to the date of payment of the Federal estate tax indicated by the return, the amount thereof actually paid, but not in excess of 25 per cent of the Federal estate tax, should be claimed. Where the executor, in filing the return and discharging the tax indicated thereby, takes credit for any such taxes which are not thereafter paid prior to the final audit of the return, or where the Commissioner determines that such taxes, or any portion thereof, are not an allowable credit within the meaning of the statute, then such credit or portion thereof taken by the executor at the time of paying the tax as is not allowed by the Commissioner should be paid promptly, together with interest thereon, if any has accrued. (See art. 83.) The executor should exercise care to see that he does not claim a credit in excess of the correct amount.

Where credits are allowed they will be applied against any

unpaid tax, and if there then remains an amount not so applied the executor should file a claim for the refund of the amount of the Federal estate tax by which the credit exceeds the unpaid tax, or if the entire Federal estate tax has been paid, a claim for refund should be filed for such portion thereof as results from the allowance of the credit.

Before the Commissioner allows credit for any estate, inheritance, legacy, or succession taxes, there must be submitted to him a complete list of the property in respect to which any such taxes were imposed, and the amount thereof paid, certified under the hand and official seal of the officer of the taxing state or territory having custody of the records pertaining to such taxes. If such officer has no seal, his official position should be established by the submission of a certificate of the proper authority of the taxing state or territory. The certificate of the officer having custody of the records referred to must set forth the name of the decedent, the date of his death, and show whether a refund of such taxes, or any part thereof, has been authorized, and whether any claim therefor is pending. If any refund has been made the date, amount thereof, and a description of the property or interest in respect to which such refund was made must be shown in such certificate. In addition to such certificate, the executor must submit his affidavit stating whether any litigation has been instituted, or appeal taken, or any such action is designed or contemplated by him, or, to his knowledge, by any beneficiary or other person, the final determination of which may affect the amount of such taxes. The certificate of the officer having custody of the records referred to, and the affidavit of the executor, should be filed with the return, but if that is not convenient or possible, then they should be transmitted direct to the Commissioner.

Where, subsequent to the allowance of a credit by the Commissioner, a refund is made of any such estate, inheritance, legacy, or succession taxes, the executor, or if the refund is made after the executor's discharge, then any person or persons to whom the refund is made, is required to advise the Commissioner of the date of the refund and the amount thereof, furnish the Commissioner with a description of the property or interest in respect to which the refund was made,