52 STAT.] 75TH CONG. , 3D SESS.-CH. 2S9-MAY 28, 1938 Supplement E-Estates and Trusts SEC. 161. IMPOSITION OF TAX. (a) APPLICATION OF TAx. -T he taxes imposed by this title upon individuals shall apply to the income of estates or of any kind of property held in trust,' including- (1) Income accumulated in trust for the benefit of unborn or unascertained persons or persons with contingent interests, and income accumulated or held for future distribution under the terms of the will or trust; (2) Income which is to be distributed currently by the fiduciary to the beneficiaries, and income collected by a guardian of an infant which is to be held or distributed as the court may direct; (3) Income received by estates of deceased persons during the period of administration or settlement of the estate; and (4) Income which, in the discretion of the fiduciary, may be either distributed to the beneficiaries or accumulated. (b) COMPUTATION AND PAYMENT.- T he tax shall be computed upon the net income of the estate or trust, and shall be paid by the fiduciary, except as provided in section 166 (relating to revocable trusts) and section 167 (relating to income for benefit of the grantor). For return made by fiduciary, see section 142. SEC. 162. NET INCOME. The net income of the estate or trust shall be computed in the same manner and on the same basis as in the case of an individual, except that- (a) There shall be allowed as a deduction (in lieu of the deduction for charitable, etc., contributions authorized by section 23 (o)) any part of the gross income, without limitation, which pursuant 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 pre- vention of cruelty to children or animals, or for the establishment, acquisition, maintenance or operation of a public cemetery not oper- ated for profit; (b) There shall be allowed as an additional deduction in comput- ing 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 distributed currently by the fiduciary to the beneficaries 1, and the amount of the income collected by a guardian of an infant which is to be held or distributed as the court may direct, but the amount so allowed as a deduction shall be included in computing the net income of the bene- ficiaries 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 same or any succeeding taxable year; (c) In the case of income received by estates of deceased persons during the period of administration or settlement of the estate, and in the case of income which, in the discretion of the fiduciary, may be either distributed to the beneficiary or accumulated, 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 such So in original. 517 Estates and trusts. Imposition of tax. Application of tax. Income accumu- lated in trust, etc. Income for current distribution, etc. Income from estates of deceased persons. Income when distri- bution discretionary. Computation and payment. Exception. Post, p. 519. Ante, p. 610. Net income. Computation. Deduction without limitation of gifts, etc., under will or trust. Ante, p. 463. Additional deduc- tions for current dis- tributions by fidu- ciary. Limitation. Payments made or credited tobeneficiary.
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