(383.) Legacy tax. 1. Reversionary interests which are vested are taxable at once. 2. Tax may be paid on reversionary interests which are not vested at the option of the executor or other person having in charge the estate. The basis for determining the tax in such cases, where the remainder will pass to issue, will be the number of such issue living. Where there is no issue, the reversionary interest will be considered a part of the life estate for the purpose of determining the legacy tax. TREASURY DEPARTMENT, OFFICE OF COMMISSIONER OF INTERNAL REVENUE, Washington, D. C., July 20, 1901. as requested by SIR: Your letter of the 18th of June, inclosing an amended office copy, Form 419, and a copy of the will in re Estate of· office letter of June 10, has been received. It is noted that clause * * * of the will provides for a life estate (or estate until she remarries) for widow of testator's son, for life. with remainder to the three children of Your amended office copy, Form 419, reports this life interest in $88,455.93, present worth of such interest, $53,402.44. To determine the present worth of the life interest of each of three children, aged 15, 11, and 13 years, respectively, in the amount or fund in trust for their mother during her life, her children, the remaindermen, in that they have a life interest in said fund from and after the remarriage or death of their mother, first ascertain by the approved tables the present worth of the life interest of each of them in one-third of the entire fund at the present time. It is found to be $22,406, $22,844.50, and $22,633.65, respectively. Second, deduct one-third ($17,800.80) of the present worth of the mother's life interest ($53,402.44) from each of the children's interests, and it is found that the present worth of each child's net life interest is $4,605.20, $5,043.70, and $4,832.85, respectively, and these several amounts are taxable at the rate of $1.12 per $100, as each of these remaindermen's whole beneficial interest exceeds $25,000. This office holds that the present worth of reversionary interest in life estates is taxable where those interests are vested. Your report would be approved by this office if the remaindermen under the will would come into possession absolutely of the fund in trust for their mother on the mother's death, but the remaindermen have but a life interest in said fund from aud after the remarriage or death of their mother, and it is held that the present worth of each of the remaindermen's life interests is taxable and that the tax accrues at once, for the reason stated in the preceding paragraph. The other life interests in this estate are not now taxable unless the executor elects to pay the legacy tax now, for the reason that it is not known what the issue of the life tenants will be. The ages of the life tenants range from 13 to 48 years. In the event that the executor elects to pay the tax on the present worth of reversions in life estates where the remainders are not vested, thereby releasing the estate from responsibility and liability for legacy tax for all time, the living issue of the life tenant will be the basis for determining the tax where the remainder goes to the issue of the life tenant. Where there is no living issue, the remainder disposed of as above, the present worth of the reversionary interest will be considered as a part of the life estate for the purpose of determining the legacy tax. Respectfully, J. W. YERKES, Commissioner. Mr. FERDINAND EIDMAN, Collector Third District, New York, N. Y. (384.) Stamp tax-Bonds. Distillers' transportation and warehousing bonds, and certain other bonds given under internal-revenue laws, not required to be stamped on and after July 1, 1901. TREASURY DEPARTMENT, OFFICE OF COMMISSIONER OF INTERNAL REVENUE, Washington, D. C., July 22, 1901. SIR: It is observed that bonds, Form 235, dated and delivered July 1, 1901, received from your office, have affixed thereto a 50-cent internal revenue stamp. You are advised that the bonds of brewers, cigar and tobacco manufacturers, and distillers delivered on and after the 1st day of July, 1901, require no stamp. Your attention is called to Treasury decision 371, dated June 25. 1901, the last paragraph of which should read on and after the 1st day of July, 1901, instead of "after." Respectfully, J. W. YERKES, Commissioner. Mr. J. C. LYNCH, Collector First District, San Francisco, Cal. (385.) Stamp tax-Foreign bills of exchange. The amendment to paragraph 5 of Schedule A, exempting from tax certain foreign bills of exchange drawn against the value of products actually exported, construed. TREASURY DEPARTMENT, OFFICE OF COMMISSIONER OF INTERNAL REVENUE, Washington, D. C., July 28, 1901. SIR: I have to acknowledge receipt of your letter of the 1st instant, inclosing letter from E. G. Buckner, cashier of the National Deposit Bank, of Owensboro, Ky., relative to the amendment to the law exempting from tax foreign bills of exchange drawn against the value of merchandise actually exported, provided that certain documentary evidence is furnished. This amendment is found in paragraph 5 of Schedule A, act of June 13, 1898, as amended by act of March 2, 1901, and is in the following terms: Excepting that bills of exchange drawn against the value of products or merchandise actually exported to foreign countries shall not be subject to this tax: Provided, that such bills of exchange shall be accompanied by proper invoices, and receipts, bills of lading, or vouchers, showing that goods of a value at least equal to the amount for which said bill of exchange may be drawn shall have been exported. You will please inform Mr. Buckner that under the above amendment this office has ruled that in order for a party to avail himself of the exemption two facts must be established 1. That the merchandise, against the value of which the bill of exchange is drawn, was actually exported. 2. The value of such merchandise. The instruments required to establish these facts are the bill of lading, or shipping receipt, and the invoice, which are to be attached to the bill of exchange. Where, however, it is deemed inexpedient to furnish the invoice, the following affidavit, executed by a disinterested party not an employee of the firm, may be attached in lieu thereof: Form of voucher to accompany foreign bill of exchange on which exemption from internalrevenue stamp tax is claimed where bill of lading but no invoice is attached. first being duly sworn, deposes and says that he resides at ; that there has been exhibited to him by of an against also invoice or invoices of merchandise, dated -, shipped to which the accompanying bill of exchange was drawn, and that said exhibited to deponent a bill of lading or shipping receipt showing that the said merchandise had been actually exported to a foreign country, to wit, per on the day of to That the said invoice or invoices amount to the sum of and he further states, on information and belief, that no bills of exchange have been previously drawn against the said merchandise, which added to the amount of the accompanying bill of exchange would exceed the value as shown by said invoice or invoices. Subscribed and sworn to before me this day 19-. In reply to Mr. Buckner's statement that he thinks it will be impossible for exporters of tobacco generally to furnish bills of lading to be attached to the foreign bills of exchange, you will inform him that the requirement of a bill of lading or shipping receipt is imperative in all cases. If parties drawing foreign bills of exchange can not comply with the terms of the statute granting exemption from tax in certain cases, they will be required to stamp such bills at the rate of 2 cents for each $100 or fractional part thereof of the amount for which they are drawn. Respectfully, J. W. YERKES, Commissioner. Mr. E. T. FRANKS, Collector Second District, Owensboro, Ky. (386.) Legacy tax. Stock in a corporation representing real estate taxable as personal estate. TREASURY DEPARTMENT, OFFICE OF COMMISSIONER OF INTERNAL REVENUE, Washington, D. C., July 25, 1901. SIR: In reply to your letter of the 19th instant, you are advised that stock in a corporation representing real estate exclusively is held to be taxable as personal estate, when passing as an inheritance, in contemplation of the law of June 13, 1898. Respectfully, J. W. YERKES, Commissioner. Mr. HENRY FINK, Collector First District, Milwaukee, Wis. (387.) Collection of internal-revenue tax upon articles of merchandise coming from Porto Rico. [Circular No. 81-Int. Rev. No. 606.] TREASURY DEPARTMENT, OFFICE OF COMMISSIONER OF INTERNAL REVENUE, To collectors of internal revenue: Washington, D. C., July 26, 1901. Section 3 of an act entitled "An Act Temporarily to provide revenues and a civil government for Porto Rico, and for other purposes," approved April 12, 1900, provides as follows: That on and after the passage of this Act all merchandise coming into the United States from Porto Rico and coming into Porto Rico from the United States, shall be entered at the several ports of entry upon payment of fifteen per centum of the duties which are required to be levied, collected, and paid upon like articles of merchandise imported from foreign countries; and in addition thereto upon articles of merchandise of Porto Rican manufacture coming into the United States and withdrawn for consumption or sale upon payment of a tax equal to the internal-revenue tax imposed in the United States upon the like articles of merchandise of domestic manufacture; such tax to be paid by internalrevenue stamp or stamps to be purchased and provided by the Commissioner of Internal Revenue and to be procured from the collector of internal revenue at or most convenient to the port of entry of said merchandise in the United States, and to be affixed under such regulations as the Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury, shall prescribe; and on all articles of merchandise of United States manufacture coming into Porto Rico in addition to the duty above provided upon payment of a tax equal in rate and amount to the internal-revenue tax imposed in Porto Rico upon the like articles of Porto Rican manufacture: Provided, That on and after the date when this Act shall take effect, all merchandise and articles, except coffee, not dutiable under the tariff laws of the United States, and all merchandise and articles entered in Porto Rico free of duty under orders heretofore made by the Secretary of War, shall be admitted into the several ports thereof, when imported from the United States, free of duty, all laws or parts of laws to the contrary notwithstanding; and whenever the legislative assembly of Porto Rico shall have enacted and put into operation a system of local taxation to meet the necessities of the government of Porto Rico, by this Act established, and shall by resolution duly passed so notify the President, he shall make proclamation thereof and thereupon all tariff duties on merchandise and articles going into Porto Rico from the United States or coming into the United States from Porto Rico shall cease, and from and after such date all such merchandise and articles shall be entered at the several ports of entry free of duty; and in no event shall any duties be collected after the first day of March, nineteen hundred and two, on merchandise and articles going into Porto Rico from the United States or coming into the United States from Porto Rico. Whereas the President of the United States has made the proclamation contemplated by said act, and thereby abolished the duties therein mentioned on merchandise and articles coming into the United States from the island of Porto Rico, so far as customs dues are concerned, therefore the following regulations relative to the collection of internal revenue taxes upon merchandise coming from Porto Rico are hereby prescribed, as said internal-revenue taxes remain in force under said act: Upon the arrival of any goods, upon which an internal-revenue tax is imposed by the laws of the United States, at any port of the United States from the island of Porto Rico, the master of the vessel in charge and control of such merchandise having delivered to the collector of customs a sworn manifest of cargo on Form No. 8, as required by Customs Regulations, the collector of customs, upon receipt of such sworn manifest, will at once issue a notice, on internal-revenue Form 471, revised, in duplicate, to the collector of internal revenue for the district in which the goods are landed, which form shall describe and specify, by marks, brands, and number, the casks, bags, barrels, boxes, and other packages, and their contents, upon which internal-revenue tax is imposed by the laws of the United States, with the name and residence of each shipper and quantity shipped, the ultimate destination, and the name and residence of each owner, consignee, or other person to whom the goods are to be delivered at said port, which notice shall be in substantially the following form: vessel from the port of in SIR: You are hereby notified that the following-described merchandise has been entered at the above-named port on board the Porto Rico, whence she first sailed. Number and kind of Kinds and quantity of packages. merchandise. Consignee. Residence. Collector of Customs. Upon the landing of articles subject to internal-revenue tax brought into the United States from Porto Rico, they shall be treated as in the case of unclaimed goods, and delivered by the master of the vessel on which they are brought into the United States into customs bonded |