Imágenes de páginas
PDF
EPUB

provide for three methods of canceling documentary stamps of the denomination of 10 cents or any larger denomination by mutilation, as follows:

(1) By cutting and canceling said stamps with a machine or punch which will affix the initials and date when attached.

(2) By perforating through the stamp and paper to which it is attached the amount in figures for which said instrument was drawn. (3) By mutilating said stamps by cutting three parallel incisions lengthwise through the stamp, beginning not more than one-fourth of an inch from one end and extending to within one-fourth of an inch of the other end, in addition to initials and date stamped or written thereon. (The required incisions may be made either before or after the stamp is affixed to an instr~ent.)

All documentary stamps of any denomination less than 10 cents, and all proprietary stamps, except private die stamps, should be canceled by writing or stamping thereon with ink the initials of the name of the person who affixed the same, and the date (day, month, and year, when affixed; or by cutting and canceling said stamp with a machine or punch which will affix the initials and date, as aforesaid.

Stamps imprinted on the face of checks or other instruments may be canceled by dating, signing, and filling out the instrument in the usual manner of drawing checks. Stamps on checks and drafts may also be canceled by perforating through the stamp and paper to which it is attached the amount in figures for which said check or draft was drawn.

These provisions have the force of law, and must be specifically followed without regard to the fact that other methods of cancellation may be deemed as effective. Neither the law nor the regulations can leave to the discretion of individuals the manner in which specific requirements shall be performed.

Respectfully, yours,

G. W. WILSON, Commissioner.

Mr. J. M. KEMBLE, Collector Fourth District, Burlington, Iowa.

LEASES.

(See also DECISION 21537, p. 101.)

(20915.)

Stamp tax-Assignment of an interest in a lease.

When an interest in a lease is assigned the assignment is subject to taxation. The rate is a proportional one, and based on the rate that would accrue were the lease, instead of an interest in the same, assigned.

TREASURY DEPARTMENT,

OFFICE OF COMMISSIONER OF INTERNAL REVENUE,

Washington, D. C., March 24, 1899.

SIR: This office is in receipt of a letter under date of March 10, 1899, from Robert L. Gregory, attorney at law, Sistersville, W. Va.

This gentleman's letter is written in relation to the assignment of a one-third interest in twenty-eight oil and gas leases, and he asks if any taxation accrues upon the instrnment by which this one-third interest is assigned.

This office has given this question careful consideration, as it presents several features. This is not an assignment of a lease or leases, but is an assignment of a one-third interest in twenty-eight leases.

The first question to be determined is whether an assignment of an interest in a lease is subject to taxation. This office holds that it is. The second question to be determined is how to find the rate of taxation. This office is of the opinion that the assignment of an interest in a lease should be taxed proportionately to the taxation that would accrue were the entire lease or leases assigned.

Under the law every assignment or transfer of a lease is subject to taxation at the same rate as that imposed on the original instrument. If these twenty-eight leases were assigned separately, the assignments would be subject to a tax based on the unexpired term of each lease. However, the twenty-eight leases are not so assigned, but a one-third interest in all of them is assigned by a single instrument. Under these circumstances, this office holds, first, that an assignment of an interest in a lease is subject to taxation; and, second, that in order to determine the tax in this instance a computation should be made as to the tax which would accrue if all of the twenty-eight leases were assigned separately, according to the unexpired term of each lease. Having found this amount, one-third of the same is the tax that is applicable to the instrument which in this instance is operative as an assignment of a one-third interest in the twenty-eight oil and gas leases referred to.

You are requested to inform Mr. Gregory of the ruling herein contained.

Respectfully, yours,

Mr. A. B. WHITE,

G. W. WILSON, Commissioner.

Collector Internal Revenue, Parkersburg, W. Va.

LEGACIES AND DISTRIBUTIVE SHARES.

(20545.) Legacy tax.

Opinion of the Attorney-General construing section 29 of the act of June 13, 1898.

TREASURY DEPARTMENT,

OFFICE OF COMMISSIONER OF INTERNAL REVENUE,

Washington, D. C., January 12, 1899.

The appended opinion of the honorable Attorney-General is hereby promulgated for the information and guidance of all officers of the

Internal Revenue Service. Any rulings of this office conflicting with this opinion are hereby modified to conform thereto.

G. W. WILSON, Acting Commissioner.

DEPARTMENT OF JUSTICE, Washington, D. C., January 5, 1899.

The SECRETARY OF THE TREASURY.

SIR: I have the honor to acknowledge receipt of yours of the 7th of November, 1898, inclosing a copy of a letter addressed to you by the Commissioner of Internal Revenue, in which he desires to be advised as to the construction of section 29 of the act of June 13, 1898, and you ask my opinion upon the same.

From the letter of the Commissioner I copy the following:

"Under the provisions of section 29 of the act of June 13, 1898, taxes are required to be paid on legacies or distributive shares arising from personal property only where the whole amount of such personal property, as aforesaid, shall exceed the sum of ten thousand dollars in actual value passing after the passage of this Act, from any person possessed of such property, either by will or by the intestate laws of any State or Territory.' Does this reference to a sum exceeding $10,000 in actual value mean the value of the entire personal property left by a person at his death, or does it mean the actual value of his property remaining for distribution to his legatees and distributees after the payment of all debts standing against the estate?

"This question is now before this office in the following case, submitted at the instance of an executor of a will: A died, leaving a personal estate of $12,000 and debts amounting to about $2,500, leaving only about $9,500 to be paid to his heirs and legatees. Will the executor have to pay any revenue tax under the act of June 13, 1898?"

The question presented by the Commissioner is, in substance, as to whether the tax provided for in section 29 is to be levied upon the gross amount of a deceased person's estate, which shall have come into the hands of the administrator or executor, or upon such portion of the estate as constitutes legacies or remains to be paid out to distributees.

So much of section 29 as it is necessary to quote in passing upon this question is as follows:

"That any person or persons having in charge or trust, as administrators, executors, or trustees, any legacies or distributive shares arising from personal property, where the whole amount of such personal property as aforesaid shall exceed the sum of ten thousand dollars in actual value, passing, after the passage of this act, from any person possessed of such property, either by will or by the intestate laws of any State or Territory, or any personal property or interest therein, transferred by deed, grant, bargain, sale, or gift, made or intended to take effect in possession or enjoyment after the death of the grantor or bargainer, to any person or persons, or to any body or bodies, politic or corporate, in trust or otherwise, shall be, and hereby are, made subject to a duty or tax, to be paid to the United States," etc.

The language of the act appears to me to be plain, so much so that it does not admit of a doubt. It refers not to the estates of deceased persons, which may come to the hands of administrators or executors.

but to legacies or distributive shares arising from personal property in charge of administrators, executors, or trustees. The law does not say that the estates of testators or intestates shall pay a tax, but that legacies or distributive shares arising from personal property, where the whole amount of such personal property as aforesaid shall exceed the sum of $10,000 in actual value, are taxable. The term "as aforesaid," used in the portion of the law above quoted, can not refer to the estate from which a legacy or distributive share is derived, but it refers to the personal property constituting the legacy or distributive share.

66

I am confirmed in this construction of this act by the further provision of the section in regard to the amount of tax to be paid, for in each clause designating such tax the words used are where the person or persons entitled to any beneficial interest in such property shall be," etc. It is the interest to which the beneficiary is entitled which the law intended to make the subject of taxation. For instance, by way of illustration, if a testator, with an estate worth $50,000, makes a bequest of $25,000 to a person, and the residue of the estate is consumed in the payment of debts, the whole estate goes into the hands of the executor, and yet only the legacy of $25,000 would be taxable under the provisions of this act. I can illustrate further by taking a specific legacy of jewelry or plate. This is taxable or not, according to its actual value. If such legacy is worth exceeding $10,000, then it is liable to the tax; if not, it is not taxable.

The same principle applies as to the estates of intestates, no matter what the gross amount which comes to the hands of the administrator may be. It is the amount which remains for distribution, after the payment of debts, which the law intends to tax. An illustration: Suppose an estate which comes to an administrator consists of $100,000 in money, or other personal property, and the intestate owes upward of $100,000. The entire estate will be consumed in the payment of debts. In such case the provisions of section 29 do not apply, because there is nothing for distribution; there can be no distributive shares. To levy a tax upon the $100,000 in such case would not be taxing a legacy or distributive share arising from personal property, but it would really be levying a tax upon the property of a deceased person, which ought to go to pay his debts. It would be indirectly a tax upon the creditors of a deceased person and not upon a legatee or distributee. However, on the other hand, if the estate which comes to the hands of the administrator is of the value of $100,000, and $50,000 will pay debts and costs of administration, leaving $50,000 for distribution to those entitled, such distributive shares of this $50,000 (as the whole amount exceeds $10,000) would be subject to the tax under the provisions of the act. It is the net amount which remains in the hands of the administrator for distribution to the next of kin or those entitled which constitutes distributive shares in the estate of a decedent.

The word "passing," which is used in the act, is also explanatory of its meaning. It too refers to legacies or distributive shares "passing" after the passage of the act. A legacy passes from the testator to the legatee. A distributive share passes from the intestate to the distributee. An executor or administrator is the mere agency or instrumentality to carry cut the purposes declared in a will, or to administer an estate of a deceased person according to the requirements of the law. A legacy or distributive share, in contemplation of law, does not pass to these agencies; it simply passes through them to such person as is entitled to the legacy or distributive share.

I hold, therefore, that it is the purpose of the law under consideration, not to levy a tax upon the gross amount of estates in the hands of executors, administrators, etc., but to tax such legacies and distributive shares arising from personal property as exceed $10,000 in actual value. The tax is upon the legacy or distributive share, not upon the estate.

Respectfully,

Approved:

JAS. E. BOYD, Assistant Attorney-General.

JOHN W. GRIGGS, Attorney-General.

(20587.)

Legacy tax.

The whole amount of personal property left for distribution after payment of legal debts and expenses determines the rate of tax imposed on legacies and distributive shares, without regard to the amount or value of each legacy or share. TREASURY DEPARTMENT,

OFFICE OF COMMISSIONER OF INTERNAL REVENUE,

Washington, D. C., January 18, 1899.

SIR: This office is in receipt of a letter from Mr. Robert F. Thompson, of Canandaigua, N. Y., under date of the 6th instant,

relative to legacy tax.

*

In reply, you will please inform him as follows: The whole amount of personal property left for distribution after payment of legal debts and expenses determines the rate of tax imposed on legacies and distributiv shares, under section 29 of the act of June 13, 1898, without regard to the amount or value of each legacy or share.

Respectfully, yours,

Mr. VALENTINE FLECKENSTEIN,

G. W. WILSON, Acting Commissioner.

Collector Internal Revenue, Rochester, N. Y.

(20589.) Legacy tax.

If the legal debts and expenses allowed by the court reduce the whole amount of personal property of an estate so that the whole amount of personal property left for distribution does not exceed $10,000, no tax accrues.

TREASURY DEPARTMENT,

OFFICE OF COMMISSIONER OF INTERNAL REVENUE,

Washington, D. C., January 19, 1899.

SIR: In reply to your inquiry of the 16th instant, relative to legacy tax, you are advised that, if the whole amount of personal property of Rothrock estate amounted to $12,000, and there were legal debts

« AnteriorContinuar »