77TH CONG. , 2D SESS.-CH. 619-OCT. 21 , 1942 that part of any property subject to claims, as defined in subsection (b) of section 812 which at the time of the decedent's death is in the United States, and 'property subject to general claims' is the value, at the time of the decedent's death, of such property subject to claims, reduced by the value, at the time of the decedent's death, of that part of such property subject to claims against which amounts allowed as deductions under paragraph (1) of this subsection which are not gen- eral claims may be enforced, under the applicable law, in the final adjustment and settlement of the estate." SEC. 406. CHARITABLE PLEDGES. (a) PLEDGES IN CASE OF CITIZENs. - Section 812 (b) (relating to deductions in computing net estate) is amended by inserting before the period at the end of the second sentence thereof the following: "; except that in any case in which any such claim is founded upon a promise or agreement of the decedent to make a contribution or gift to or for the use of any donee described in subsection (d) for the pur- poses specified therein, the deduction for such claim shall not be so limited, but shall be limited to the extent that it would be allowable as a deduction under subsection (d) if such promise or agreement constituted a bequest". (b) PLEDGES BY NONRESIDENTS NOT CrITZENs.- Section 861 (a) (1) (relating to deductions in computing net estate) is amended to read as follows: "(1) EXPENSES, LOSSES, INDEBTEDNESS, AND TAXE.--That pro- portion of the deductions specified in section 812 (b) (other than the deductions described in the following sentence) which the value of such part bears to the value of his entire gross estate, wherever situated. Any deduction allowable under section 812 (b) in the case of a claim against the estate which was founded upon a promise or agreement but was not contracted for an adequate and full consideration in money or money's worth shall be allowable under this paragraph to the extent that it would be allowable as a deduction under paragraph (3) if such promise or agreement constituted a bequest." SEC. 407. DEDUCTION ON ACCOUNT OF PROPERTY PREVIOUSLY TAXED. (a) AMENDMENTS TO INTERNAL REVENUE CODE PROVISIONS RELATING TO PROPERTY PREVIOUSLY TAXED. - (1) The first paragraph of section 812 (c) is amended to read as follows: "(c) PROPERTY PREVIOUSLY TAXED. -An amount equal to the value of any property (1) forming a part of the gross estate situated in the United States of any person who died within five years prior to the death of the decedent, or (2) transferred to the decedent by gift within five years prior to his death, where such property can be identified as having been received by the decedent from the donor by gift, or from such prior decedent by gift, bequest, devise, or inheritance, or which can be identified as having been acquired in exchange for property so received. Property includible in the gross estate of the prior decedent under section 811 (f) and property included in total gifts of the donor under section 1000 (c) received by the decedent described in this subsection shall, for the purposes of this subsection, be considered a bequest of such prior decedent or gift of such donor. This deduction shall be allowed only where'a gift tax imposed under Chapter 4, or under Title III of the Revenue Act of 1932, 47 Stat. 245, or an estate tax imposed under this chapter or any prior Act of 53 Stat. 123. 26 U. S .C . §812(b). Ante, p. 945. Infra. 53 Stat. 123 . 26U.S. C . 1812 (b). Ante, p. 945. 53 Stat. 129. 26U.S.C.§861(a) (1). 53 Stat. 123 . 26U. S .C . 1812(b). Ante, p. 945; aupra. 53 Stat. 124. 26U. . C., Supp.I. § 812 (c). Ante, p. 945; poet, p. 948. Ante. p. 942. Poat. p . 952. 53 Stat. 144 . 36U.S.C.i1000- 1031; Supp. I, 1001 . Pout pp. 952-6 ., 56 STAT.]
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