52 STAT.] 75TH CONG. , 3D SESS.-CH. 289-MAY 28, 1938 (O) CHARITABLE AND OTHER CONTRIBUTIONS.-In the case of an individual, contributions or gifts payment of which is made within the taxable year to or for the use of: (1) the United States, any State, Territory, or any political sub- division thereof, or the District of Columbia, for exclusively public purposes; (2) a domestic corporation, or domestic trust, or domestic com- munity chest, fund, or foundation, organized and operated exclu- sively for religious, charitable, scientific, literary, or educational purposes, or for the prevention of cruelty to children or animals, no part of the net earnings of which inures to the benefit of any private shareholder or individual, and no substantial part of the activities of which is carrying on propaganda, or otherwise at- tempting, to influence legislation; (3) the special fund for vocational rehabilitation authorized by section 12 of the World War Veterans' Act, 1924; (4) posts or organizations of war veterans, or auxiliary units or societies of any such posts or organizations, if such posts, organiza- tions, units, or societies are organized in the United States or any of its possessions, and if no part of their net earnings inures to the benefit of any private shareholder or individual; or (5) a domestic fraternal society, order, or association, operating under the lodge system, but only if such contributions or gifts are to be used exclusively for religious, charitable, scientific, literary, or educational purposes, or for the prevention of cruelty to children or animals; to an amount which in all the above cases combined does not exceed 15 per centum of the taxpayer's net income as computed without the benefit of this subsection. Such contributions or gifts shall be allowable as deductions only if verified under rules and regulations prescribed by the Commissioner, with the approval of the Secretary. (For unlimited deduction if contributions and gifts exceed 90 per centum of the net income, see section 120.) (p) PENSION TRUBTS. - (1) GENERAL RULE. -An employer establishing or maintaining a pension trust to provide for the payment of reasonable pensions to his employees shall be allowed as a deduction (in addition to the contributions to such trust during the taxable year to cover the pension liability accruing during the year, allowed as a deduction under subsection (a) of this section) a reasonable amount transferred or paid into such trust during the taxable year in excess of such contributions, but only if such amount (1) has not theretofore been allowable as a deduction, and (2) is apportioned in equal parts over a period of ten consecutive years beginning with the year in which the transfer or payment is made. (2) DEDUCTIONS UNDER PRIOR INCOME TAX ACTS.- Any deduction allowable under section 23 (q) of the Revenue Act of 1928 or the Revenue Act of 1932 or the Revenue Act of 1934, or under section 23 (p) of the Revenue Act of 1936, which under such section was apportioned to any taxable year beginning after December 31, 1937, shall be allowed as a deduction in the years to which so apportioned to the extent allowable under such section if it had remained in force with respect to such year. (3) EXEMPTION OF TRUSTS UNDEB SECTION 165.-T he provisions of paragraphs (1) and (2) of this subsection shall be subject to the qualification that the deduction under either paragraph shall be allowable only with respect to a taxable year (whether the 463 Charitable, etc., c on - tributions. For public purposes. Religious, scientific, etc., purposes. Vocational rehabili- tation. 43 Stat. 611. 38U. S. C.§440. War veterans' or- ganizations, etc. Fraternal societies; condition. Unlimited deduc- tions. Post, p. 506. Pension trusts. General rule. Deductions under prior Acts. 45 Stat. 802; 47 Stat. 182; 48 Stat. 691; 49 Stat. 1661. 26U.S.C. 23(q); Supp. , §23 (p). Examption of em- ployees' trusts.
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