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Page:United States Statutes at Large Volume 61 Part 1.djvu/372

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PUBLIC LAWS-CH. 258-JULY 16,1947 Application to lite insurance premiums. .l I:t, p. 338. "In the discretion of the grantor." 53 Stat. 67. 26U.S.C.§165. Ante, p. 335 . aside for the purposes and in the manner provided in title III, section 3 (a) (8), of this article or is to be used exclusively for the purposes enumerated in title III, section 3 (a) (8), of this article. SEC. 6 . DIFFERENT TAXABLE YEAR. - I f the taxable year of a bene- ficiary is different from that of the estate or trust, the amount which he is required, under section 5 (a) of this title, to include in computing his net income, shall be based upon the income of the estate or trust for any taxable year of the estate or trust ending within his taxable year. SEc. 7. REVOCABLE TRuSTS.-T he income of a trust shall be included in computing the net income of the grantor of such trust where at any time the power to revest in the grantor title to any part of the corpus of the trust is vested- (a) 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 (b) in any person not having a substantial adverse interest in the disposition of such part of the corpus or the income therefrom. SEC. 8 . INCOME FOR BENEFIT OF GRANTOR. -SO much of the income of any trust shall be included in computing the net income of the grantor as- (a) 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 distribu- tion to the grantor; or (b) 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 (c) 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 premiums upon policies of insurance on the life of the grantor (except pol- icies of insurance irrevocably payablefor the purposes and in the manner specified in title III, section 3 (a) (8), relating to the so-called "charitable contribution" deduction). SEO. 9. DEFINITION OF "IN I)ISCRETION OF GRANTOR". -AS used in this title, 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 interest in the disposition of the part of the income in question. SEC. 10. EMPLOYEES' TRUSTS.- (a) EXEMPTION FROM TAX. -A trust forming part of a stock bonus, pension, or profit-sharing plan of an employer for the exclusive benefit of his employees or their beneficiaries shall not be taxable under this article and no other provision of this article shall apply with respect to such trust or to its beneficiary, except as hereinafter in this section expressly provided, if such trust meets the requirements for exemption from Federal income tax under section 165 of the Federal Internal Revenue Code. (b) TAXABILITY OF BENEFICIARY. - The amount actually distributed or made available to any distributee by any such trust shall be taxable to him, in the year in which so distributed or made available, under section 2 (b) (2) of title III of this article as if it were an annuity the consideration for which is the amount contributed by the employee. (c) TREATMENT OF BENEFICIARY OF TRUST NOT EXEMPT UNDER SUB- SECTION (a). -Contributions to a trust made by an employer during a taxable year of the employer which ends within or with a taxable year 348 [61 STAT.