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73d C ONGRESS . SESS . II. CH. 277. MAY 10, 1934 . INC OME TAX . ES TAT ES AND TRUSTS-Contd. Received during ad- ministration. Discretionary distri- bution. Computat ion ; pay - men t by fidu ciary . Exc eptio ns . Post, p . 729. Ante, p . 722, SEC . 162. NET INC OME . The net income of the esta te or trust shall be computed in the same manner and on the same basis as in the case of an individual, except that- Deductio n Without
(a) There shall be allowed as a deduction (in lieu of the deduc- limitation of gifts, etc., under will or trust . tion for charitable, etc ., contributions authorized by section 23 (o) ) _ante, p . 690. any part of the gross income, witho ut li mitati on, w hich pursua nt to the terms of the will or deed creating the trust, is during the taxable year paid or permanently set aside for the purposes and in the manner specified in section 23 (o), or is to be used exclusively for religious, charitable, scientific, literary, or educational purposes, or for the prevention of cruelty to children or animals, or for the esta blish ment, acqui sitio n, mai ntena nce o r oper ation ofa publi c cemetery not operated for profit ; (b) There sh all be allowed as an additional deduction in com - puting the net income of the estate or trust the amount of the income of the estate or trust for its taxable year which is to be distri buted cu rrently by the f iduciary to the benefici aries, a nd the amount of the income collected by a guardian of an infant which is to be held or distr ibuted a s the co urt may direct, but the amount so allowed as a dedu ction shall be included in compu ting the net income of the beneficiaries whether distributed to them or not . Any amount allowed as a deduction under this paragraph shall not be allowed as a deduction under subsection (c) of this section in the sa me or any succeeding taxable year ; (c) In the case of income received by estates of deceased persons during the per iod of a dministr ation or settlem ent of t he estat e, and in the case of income which, i n the di scretion of the fiduciar y, may be eith er distr ibuted t o the be neficiar y or acc umulated , there shall be allowed as an additional deduction in computing the net income of the estate or trust the amount of the income of the estate or trust for its taxable year, which is properly paid or credited during To be inclu ded in such year to any legatee, heir, or beneficiary, but the amount so allowed as a deduction shall be included in computing the net income of the legatee, heir, or beneficiary . SEC. 163. CREDITS AGAINST NET INCOME . (a) CREDITS OF ESTATE OR TRUST.-For the purpose of the normal tax and the surtax the estate or trust shall be allow ed th e same personal exemption as is allowed to a single person under section Ante, p .693. 25(b) (1), and, if no part of the income of the estate or trust is included in computing the net income of any legatee, heir, or bene- ficiary, then in addition the same credits against net income for dividends and interest as are allowed by section 25(a) . (b) CR ED ITS OF BE NT 1cIARY.-If any par t of the inc ome of an estate or trust is included in computing the net income of any legatee, heir, or beneficiary, such legatee, h eir, or benefici ary shall . for t he pu rpose of the normal tax, be allo wed as cred its a gainst Net inco me . Computation Addi tiona l deduc- tions for current dis- tributions by fiduciary . Limitation. Addit iona l deduc- ti on for payment made or credited to benefi- ciary , etc . income of beneficiary . Credits against net income . Normal tax, etc., per- sonal exempt ions al- lowed to heirs, etc . Credits of beneficiary in computing income. (3) Income received by estates of deceased persons during the period of admi nistrati on or se ttlement of the estate ; and (4) I ncome which , in the discretion of the fiduc iary, may be either distributed to the beneficiaries or accumulated . (b) COMPUTATION AND PAYMENT .-The tax shall be computed upon the net income of the es tate or trust, a nd shall be paid by the fiduciary, except as provided in section 166 (relating to revocable trusts) and se ction 167 (relating to inco me for benefit of the grantor) . For return made by beneficiary, see section 142 .
