Public Law 88–554

For purposes of the tax imposed by section 2001 of

68A Stat. 373.

26 USC 2001.

the Internal Revenue Code of 1954, the value of the taxable estate of Carbon P. Dubbs, who died on August 21, 1962, shall be determined by deducting from the value of the gross estate of such Carbon P. Dubbs (in addition to all other deductions and exemptions allowed by part IV of subchapter A of chapter 11 of such Code) $808,147.87, if

26 USC 2051, 2056.

cash in the amount of $779,699.17 and household furnishings and equipment with a fair market value of $28,448.70 are transferred, on or before the sixtieth day after the date of the enactment of this Act, to the Department of State of the United States pursuant to and in accordance with the offer of bequest dated February 19, 1963, from the estate of such Carbon P. Dubbs (accepted by the Secretary of State pursuant to section 1021 of the Foreign Service Act of 1946 (22 U.S.C. 809 (1958)), on June 5, 1963). The deduction provided for in this

60 Stat. 1031.

section shall be treated for purposes of the Internal Revenue Code of 1954 as if it had been provided for under section 2055 of such Code,

26 USC 2055.

on August 21, 1962.

The Commissioner of Internal Revenue is authorized to enter into a closing agreement under section 7121 of the Internal Revenue Code of 1954 to meet and satisfy the condition set forth in subparagraph

26 USC 7121.

(B) of the eleventh paragraph of the Agreement, as amended, made as of May 1,19G4, with respect to the probate proceedings relating to the estate of Anna Gould de Talleyrand (entitled “Probate Proceeding, Will of Anna Gould de Talleyrand. Deceased”, in the Surrogate’s Court of the County of New York, State of New York (file No. P3878–1961)), between the United States of America, the National Trust for Historic Preservation, the First National City Bank of New York, and others. The enactment of this subsection shall constitute, approval of such closing agreement and of the allowance of the deductions in computing the taxable estate of Anna Gould de Talleyrand specified in subparagraph (B) of the eleventh paragraph of such Agreement.

The Secretary of Commerce is authorized and directed

Transit systems.

Taxation studies.

to investigate and study the feasibility of imposing taxes on those transit and commuter systems which are the beneficiaries of Federal financial assistance under the Urban Mass Transportation Act of 1964

Ante, p. 302.

for the purpose of raising revenues to defray Federal expenditures under such Act.

In making the investigation and study under subsection (a), the Secretary of Commerce is authorized to cooperate and consult with appropriate. Federal, State, and local government agencies, and with representatives of the transit and commuter service industry and national organizations concerned with mass transportation service.

The costs of making the investigation and study under subsection (a) shall be paid from appropriations available for expenses of the Office of the Secretary of Commerce.

The Secretary of Commerce shall report the results of the

Report to congressional committees.

investigation and study under subsection (a), together with his recommendations, to the Committee on Finance of the Senate and the Com-mittee on Ways and Means of the House of Representatives at the earliest practicable date, but not later than June 30, 1965.

Section 318(a) of the Internal Revenue Code of 1954 (relating to constructive ownership of stock) is amended by striking out paragraphs (2), (3), and (4) and inserting in lieu thereof the following:

“(2)“(2)

Attribution from partnerships, estates, trusts, and corporation—

“(A)“(A)

From partnerships and estates.—

Stock owned, directly or indirectly, by or for a partnership or estate shall be considered as owned proportionately by its partners or beneficiaries.

#

“(B)“(B)

From trusts.—

“(i)“(i)

Stock owned, directly or indirectly, by or for a trust (other than an employees’ trust described in section 401(a) which is exempt from tax under section 501 (a)) shall be considered as owned by its beneficiaries in proportion to the actuarial interest of such beneficiaries in such trust.

#

“(ii)“(ii)

Stock owned, directly or indirectly, by or for any portion of a trust of which a person is considered the owner under subpart E of part I of subchapter J (relating to grantors and others treated as substantial owners) shall be considered as owned by such person.

#

#

“(C)“(C)

From corporations.—

If 50 percent or more in value of the stock in a corporation is owned, directly or indirectly, by or for any person, such person shall be considered as owning the stows owned, directly or indirectly, by or for such corporation, in that proportion which the value of the stock which such person so owns bears to the value of all the stock in such corporation.

#

#

“(3)“(3)

Attribution to partnerships, estates, trusts, and corporations.—

“(A)“(A)

To partnerships and estates.—

Stock owned, directly or indirectly, by or for a partner or a beneficiary of an estate shall be considered as owned by the partnership or estate.

#

“(B)“(B)

To trusts.—

“(i)“(i)

Stock owned, directly or indirectly, by or for a beneficiary of a trust (other than an employees’ trust described in section 401 (a) which is exempt from tax under section 501 (a)) shall be considered as owned by the trust, unless such beneficiary’s interest in the trust is a remote contingent interest. For purposes of this clause, a contingent interest of a beneficiary in a trust shall be considered remote if, under the maximum exercise of discretion by the trustee in favor of such beneficiary, the value of such interest, computed actuarially, is 5 percent or less of the value of the trust property.

#

“(ii)“(ii)

Stock owned, directly or indirectly, by or for a person who is considered the owner of any portion of a trust under subpart E of part I of subchapter J (relating to grantors and others treated as substantial owners) shall lie considered as owned by the trust.

#

#

“(C)“(C)

To corporations.—

If 50 percent or more in value of the stock in a corporation is owned, directly or indirectly, by or for any person, such corporation shall be considered as owning the stock owned, directly or indirectly, by or for such person.

#

#

“(4)“(4)

Options.—

If any person has an option to acquire stock, such stock shall be considered as owned by such person. For purposes of this paragraph, an option to acquire, such an option, and each one of a series of such options, shall be considered as an option to acquire such stock.

#

“(5)“(5)

Operating rules.—

“(A)“(A)

In general.—

Except as provided in subparagraphs (B) and (C), stock constructively owned by a person by reason of the application of paragraph (1), (2), (3), or (4), shall, for purposes of applying paragraphs (1), (2), (3), and (4), be considered as actually owned by such person.

#

“(B)“(B)

Members of family—

Stock constructively owned by an individual by reason of the application of paragraph (1) shall not. lie considered as owned by him for purposes of again applying paragraph (1) in order to make another the constructive owner of such stock.

#

“(C)“(C)

Partnerships, estates, trusts, and corporations.—

Stock constructively owned by a partnership, estate, trust, or corporation by reason of the application of paragraph (3) shall not be considered as owned by it for purposes of applying paragraph (2) in order to make another the constructive owner of such stock.

#

“(D)“(D)

Option rule in lieu of family rule.—

For purposes of this paragraph, if stock may be considered as owned by an individual under paragraph (1) or (4), it shall be considered as owned by him under paragraph (4).”

#

#