52 STAT.] 75TH CONG. , 3D SESS.-CH. 2S9-MAY 28, 1938 SEC. 166. REVOCABLE TRUSTS. Where at any time the power to revest in the grantor title to any part of the corpus of the trust is vested- (1) in the grantor, either alone or in conjunction with any person not having a substantial adverse interest in the disposition of such part of the corpus or the income therefrom, or (2) in any person not having a substantial adverse interest in the disposition of such part of the corpus or the income there- from, then the income of such part of the trust shall be included in com- puting the net income of the grantor. SEC. 167. INCOME FOR BENEFIT OF GRANTOR. (a) Where any part of the income of a trust- (1) is, or in the discretion of the grantor or of any person not having a substantial adverse interest in the disposition of such part of the income may be, held or accumulated for future distri- bution to the grantor; or (2) may, in the discretion of the grantor or of any person not having a substantial adverse interest in the disposition of such part of the income, be distributed to the grantor; or (3) is, or in the discretion of the grantor or of any person not having a substantial adverse interest in the disposition of such part of the income may be, applied to the payment of pre- miums upon policies of insurance on the life of the grantor (except policies of insurance irrevocably payable for the pur- poses and in the manner specified in section 23 (o), relating to the so-called "charitable contribution" deduction); then such part of the income of the trust shall be included in com- puting the net income of the grantor. (b) As used in this section, the term "in the discretion of the grantor" means "in the discretion of the grantor, either alone or in conjunction with any person not having a substantial adverse inter- est in the disposition of the part of the income in question". SEC. 168. TAXES OF FOREIGN COUNTRIES AND POSSESSIONS OF UNITED STATES. The amount of income, war-profits, and excess-profits taxes imposed by foreign countries or possessions of the United States shall be allowed as credit against the tax of the beneficiary of an estate or trust to the extent provided in section 131. SEC. 169. COMMON TRUST FUNDS. (a) DEpmINTIONS. -The term "common trust fund" means a fund maintained by a bank (as defined in section 104)- (1) exclusively for the collective investment and reinvestment of moneys contributed thereto by the bank in its capacity as a trustee, executor, administrator, or guardian; and (2) in conformity with the rules and regulations, prevailing from time to time, of the Board of Governors of the Federal Reserve System pertaining to the collective investment of trust funds by national banks. (b) TAXATION OF COMMON TRUST FUNDS. -A common trust fund shall not be subject to taxation under this title, Title IA, or section 105 or 106 of the Revenue Act of 1935, or section 601 or 602 of this Act, and for the purposes of such titles and sections shall not be considered a corporation. 519 Revocable trusts. Computation of in- come with grantor's net income. Income for benefit of grantor. Computation of in- come with grantor's net income. Ante, p. 463 . "In the discretion of the grantor" defined. Taxes of foreign countries and posse- sions of United States. Ante, p. M06 . Common trust funds. Definitions. Ante, p. 484. Taxation of com- mon trust funds. Post, p. 557. 49 Stat. 1017 . Post, p. 56 .
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