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74TH CONGRESS. SESS. II. CH. 690. JUNE 22, 1936 . Disallowance of loss (i) Loss ON WA SH SAL ES OF STO CK OR SECURITIES .-For disallow on w ash sales of stock, etc .
ante of loss deduction in the case of sales of stock or securities where within thirty days before or after the date of the sale the Post, p . 1692.
taxpayer has acquired substantially identical property, see section 118 . Capital losses.
(j) CAPITAL Losses.-Losses from sales or exchanges of capital Post, p .1692 .
assets s hall be allowed only to the exte nt provid ed in se ction 11 7 (d ) . Bad debts. (k) BAD DEBTS.-Debts ascertained to be worthless and charged off with in the t axable y ear (or, in the discretio n of the Commiss ioner, a reasonable addition to a reserve for bad debts)
- and when satis-
fied that a debt is recoverable only in part, the Commissioner may allow suc h debt in an amoun t not in excess of the part charged o ff within the taxable year, as a deduction . Depre ciati on, e tc ., of
(1) DEPRECIATION .-A reasonable allowance for the exhaustion, busi ness prope rty .
7 wear and tear of property used in the trade or business, including rife estates, a reasonable allowance for obsolescence . In the case of property held by one person for life with remainder to another person, the deduction shall be computed as if the life tenant were the absolute Property in trust . owner of the prope rty and s hall be a llowed to the life tenant . In the case of property held in trust the allowable deduction shall be apportioned between the income beneficiaries and the trustee in acc orda nce with the per tine nt p rovi sion s of the ins trum ent crea t- ing the trust, or, in the absence of such provisions, on the basis Min es, oil and gas of the trust income allocable to each . wells, timber, etc .
(m) DEPLETION.-In the case of mines, oil and gas wells, other Allowance for deple- tion, etc
natura l deposits , and tim ber, a re asonable allowance for depl etion . and for depreciation of improvements, according to the peculiar conditions in each case ; such reasonable allowance in all cases to be made under rules and regulations to be prescribed by the Com- allowed . Revision ofestimates estimates missioner, with the approval of the Secretary. In any case in which it is ascertaine d as a re sult of o perations or of de velopment work that the recoverable units are greater or less than the prior esti- mate thereof, then such prior estimate (but not the basis for deple- tion) shall be r evised an d the all owance un der this subsectio n for subsequent taxable years shall be based upon such revised estimate . Lease s .
In the case of leases the deductions shall be equitably apportioned Life estates . between the lessor and lessee . In the ca se of property held by one person for life with remainder to another person, the deduction shall be computed as if the life tenant were the absolute owner of Pro perty in trust . the pr operty and shall be allowed to the li fe tenant . In the case of property held in trust the allowable deduction shall be appor- tioned between the income beneficiaries and the trustee in accord- ance with the pertinent provisions of the instrument creating the trust, or, in the absence of such provisions, on the basis of the Post, p' lsss_
trust income allocable to each. (For percentage depletion allow- Basis for deprecia- able u nder thi s subsec tion, se e section 114 (b), (3) and (4) .) lion, etc . (n) BASIS FOR DEPRECIATION AND DEPLETION .-The basis upon which depletion, exhaustion, wear and tear, and obsolescence are to be allowed in respect of any property shall be as provided in Charitable, etc ., con- section 114. tributions .
(O) CHARITABLE AND OTHER CONTRIBUTIONS . -In the case of an Gifts .
individual, contributions or gifts made within the taxable year to Public uses .
or for the use of (1) the Uni ted Stat es, any Stat e, T erri tory , Or any political subdivision thereof, or the District of Columbia, for exclusively public purposes ; Religions, scientific, etc ., organizations .
(2) a corporation, or trust, or community chest, fund, or . foundation, organized and operated exclusively for religious, c haritabl e, scien tific, l iterary, or educ ational p urposes, or for the
