(b) The amendment made by subsection (a) shall be applicable to taxable years beginning after December 31, 1938. * * * * * PAR. B. Regulations 101 are hereby amended by inserting immediately preceding article 27 (a)–1 (section 9.27 (a)-1 of title 26, Code of Federal Regulations) the following: SEC. 222. REVENUE ACT OF 1939 (RENEWAL OF INDEBTEDNESS). (c) Section 27 (a) (4) of the Revenue Act of 1938 (relating to corporation credit for amounts used or set aside to pay indebtedness) is amended by inserting at the end thereof the following new sentence: "A renewal (however evidenced) of an indebtedness shall be considered an indebtedness." (d) The amendment made by subsection (c) shall be applicable to taxable years beginning after December 31, 1937. PAR. C. Article 27 (a)-3 (a) of Regulations 101 (section 9.27 (a)3 (a) of title 26, Code of Federal Regulations) and the same article of Regulations 101 as made applicable to the Internal Revenue Code by T. D. 4885, approved February 11, 1939 (part 465, subpart B of such title 26), are hereby amended by striking out the last paragraph thereof and by amending the first paragraph to read as follows: (a) Indebtedness.-The term "indebtedness" means an obligation of the corporation, absolute and not contingent, to pay, on demand or within a given time, in cash or other medium, a fixed amount, existing at the close of business on December 31, 1937, and evidenced by a bond, note, debenture, certificate of indebtedness, mortgage, or deed of trust, issued by the corporation and in existence at the close of business on December 31, 1937, or by a bill of exchange accepted by the corporation prior to, and in existence at, the close of business on December 31, 1937. If the indebtedness was so evidenced at the close of business on December 31, 1937, it is still an indebtedness within the meaning of section 27 (a) (4) though, prior to the time payment is made or amounts are irrevocably set aside, it has been renewed. Such renewal need not be evidenced by one of the types of instruments enumerated in section 27 (a) (4), but it is sufficient if the debtor-creditor relationship evidenced by one of such instruments at the close of business on December 31, 1937, continues. An indebtedness once so renewed may be again renewed without depriving the corporation of the benefits of section 27 (a) (4). Indebtedness incurred after December 31, 1937, is not indebtedness within the meaning of section 27 (a) (4) even though the proceeds of the loan are used to discharge an indebtedness falling within the provisions of that section, as, for example, where money is borrowed from A to pay B, but, if the creditor remains the same and the transaction is in effect a renewal, the mere fact that it takes the form of a new borrowing, the proceeds of which are simultaneously used to discharge the prior obligation, will not of itself prevent the transaction from being a renewal within the meaning of section 27 (a) (4) and this article. The mere substitution, after December 31, 1937, of several instruments for one instrument, or one instrument for several instruments, existing at the close of business on such date, where there is no change in terms except the substitution of a series of different amounts equal in the aggregate to the total principal amount of the instrument or instruments surrendered (as, for example, where two $50,000 bonds are issued in exchange for one $100,000 bond, or where one $100,000 bond is issued in exchange for two $50,000 bonds), or the reissue of a lost or destroyed instrument, or the issue of a new instrument to a transferee, will not deprive a corporation of the benefits of section 27 (a) (4). Indebtedness incurred through the assumption of the liabilities of another is not indebtedness within the meaning of section 27 (a) (4) unless such assumption took place prior to January 1, 1938, and such indebtedness was evidenced at the close of business on December 31, 1937, by one or more of the instruments enumerated in such section, issued by the taxpayer prior to, and in existence at, the close of business on such date. This Treasury decision is prescribed pursuant to section 222 of the Revenue Act of 1939 (Public No. 155, Seventy-sixth Congress, first session), section 62 of the Internal Revenue Code (55 Stat. part 1), and section 62 of the Revenue Act of 1938 (52 Stat. 480, 26 U. S. C. Sup. IV, 62). Approved September 28, 1939: JOHN W. HANES, GUY T. HELVERING, Commissioner of Internal Revenue. Acting Secretary of the Treasury. [Filed with the Division of the Federal Register September 30, 1939, 11:28 a. m.] (T. D. 4949) Losses of brandy and fruit spirits from packages filled from storage tanks in bonded warehouses prior to June 26, 1936 TREASURY DEPARTMENT, OFFICE OF COMMISSIONER OF INTERNAL REVENUE, To District Supervisors and Others Concerned: Washington, D. C. The act of August 4, 1939 (Public, No. 264, 76th Congress) provides as follows: That the Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury, is authorized to make allowances for losses by leakage and evaporation in accordance with section 2901, Internal Revenue Code, upon withdrawal of packages of brandy or fruit spirits now deposited in internal-revenue bonded warehouses, which were filled from storage tanks in bonded warehouses. prior to June 26, 1936. Pursuant to the foregoing provision of law and the authority contained in section 3176 of the Internal Revenue Code, allowance for losses by leakage and evaporation will be made in accordance with section 2901, Internal Revenue Code, and the applicable provisions of Article XVIII of the Gauging Manual (1938), as extended by T. D. 4885, upon regauge for withdrawal of packages of brandy or fruit spirits now deposited in internal-revenue bonded warehouses, which were filled from storage tanks in bonded warehouses prior to June 26, 1936. The period for which allowance will be made will be calculated from the date of filling of the packages to the date of regauge for withdrawal. Allowance for increase in tare by reason of soakage or absorption will be given such packages in accordance with Article XVII of the Gauging Manual. Approved October 2, 1939: JOHN W. HANES, GUY T. HELVERING, Commissioner of Internal Revenue. Acting Secretary of the Treasury. [Filed with the Division of the Federal Register October 3, 1939, 12:34 p. m.] (T. D. 4950) Regulations 71, as amended, relating to stamp taxes, as made applicable to the Internal Revenue Code by T. D. 4885, amended TREASURY Department, OFFICE OF COMMISSIONER OF INTERNAL REVENUE, To Collectors of Internal Revenue and Others Concerned: This Treasury decision is issued under the authority contained in section 1802 of the Internal Revenue Code (53 Stat., part 1), as amended by section 1 of the Revenue Act of 1939 (Public No. 155, Seventy-sixth Congress, first session) and section 3791 (b) of the Internal Revenue Code. Approved October 4, 1939: JOHN W. HANES, GUY T. HELVERING, Commissioner of Internal Revenue. Acting Secretary of the Treasury. [Filed with the Division of the Federal Register October 5, 1939, 4:03 p. m.] (T. D. 4951) Income tax Article 112 (f)-1 of Regulations 86, 94, 101, and 101 as made applicable to the Internal Revenue Code, relating to reinvestment of proceeds of involuntary conversions, amended TREASURY DEPARTMENT, OFFICE OF COMMISSIONER OF INTERNAL REVENUE, Washington, D. C. To Collectors of Internal Revenue and Others Concerned: PARAGRAPH A. Article 112 (f)-1 of Regulations 86, as amended by T. D. 4698 ((1936) XV-2 Cum. Bull. 159), article 112 (f)-1 of Regulations 94 [section 3.112 (f)-1, title 26, Code of Federal Regulations], 101 [section 9.112 (f)-1 of such title 26], and 101 as made applicable to the Internal Revenue Code by T. D. 4885, approved February 11, 1939 [part 465, subpart B, of such title 26], are each amended by substituting for the first sentence of the second paragraph thereof, reading as follows: If, in a condemnation proceeding, the Government retains out of the award sufficient funds to satisfy liens and mortgages against the property and itself pays the same, the amount so retained should be included in determining the amount of the net award. the following sentence: If, in a condemnation proceeding, the Government retains out of the award sufficient funds to satisfy liens (other than liens due to special assessments levied against the remaining portion of the plot or parcel of real estate affected for benefits accruing in connection with the condemnation) and mortgages against the property and itself pays the same, the amount so retained shall not be deducted from the gross award in determining the amount of the net award. PAR. B. The fifth paragraph of said article 112 (f)-1 of Regulations 86, as amended, 94, 101, and 101 as made applicable to the Internal Revenue Code by T. D. 4885, approved February 11, 1939, reading in part as follows: There is no investment in property similar in character and devoted to a similar use if― * (4) An award for property taken for street widening is applied toward payment of special assessments for benefits accruing to the remaining property. is amended by striking therefrom the clause designated (4), which reads as follows: (4) An award for property taken for street widening is applied toward payment of special assessments for benefits accruing to the remaining property. This Treasury decision is prescribed pursuant to the provisions of section 62 of the Revenue Act of 1934 (48 Stat. 700; 26 U. S. C. 62), the Revenue Act of 1936 (49 Stat. 1673; 26 U. S. C., Sup. IV, 62), the Revenue Act of 1938 (52 Stat. 480; 26 U. S. C., Sup. IV, 62), and the Internal Revenue Code (53 Stat. part 1). GUY T. HELVERING, Approved October 5, 1939: Commissioner of Internal Revenue. JOHN W. HANES, Acting Secretary of the Treasury. [Filed with the Division of the Federal Register October 7, 1939, 9:29 a. m.] (T. D. 4952) Part 317-Regulations relating to the tax imposed by the act approved March 1, 1893, as amended, with respect to certain hydraulic mining1 TREASURY DEPARTMENT, OFFICE OF THE COMMISSIONER OF INTERNAL REVENUE, Washington, D. C. To Collectors of Internal Revenue and Others Concerned: TABLE OF CONTENTS SEC. 317.0. Introductory. SEC. 317.1. Scope of regulations. SEC. 317.2. Definitions. SEC. 317.3. Rates of tax. SEC. 317.4. Liability for the tax. SEC. 317.5. Ascertainment of quantity mined. SEC. 317.6. Returns. SEC. 317.7. Due date and place for filing returns and paying tax. SECTION 317.0. Introductory.-(a) The Act entitled "An Act to create the California Debris Commission and regulate hydraulic mining in the State of California," approved March 1, 1893, as amended, 27 Stat. 507; 34 Stat. 1001; 48 Stat. 1118, provides in part as follows: That a commission is hereby created, to be known as the California Debris Commission, consisting of three members. * * * SEC. 3. That the jurisdiction of said commission, insofar as the same affects mining carried on by the hydraulic process, shall extend to all such mining in the territory drained by the Sacramento and San Joaquin river systems in the State of California. * * * SEC. 8. That for the purposes of this act "hydraulic mining" and "mining by the hydraulic process," are hereby declared to have the meaning and application given to said terms in said State. 1 Sections 317.0 to 317.8 are issued under the authority contained in sec. 23, 27 Stat. 510, as amended by sec. 2, 48 Stat. 1118, and Chap. 653, 52 Stat. 1040; 33 U. S. C. 683 and Sup. IV; and sec. 3791 of the Internal Revenue Code, 53 Stat., part 1, and interpret said sec. 23, 27 Stat. 510, as amended. The source of sections 317.0 to 317.8 is T. D. 4952, Bureau of Internal Revenue, approved Oct. 11, 1939. |