action by State legisla Proviso. SEC. 4. In order to secure the benefits of the appropriations author- Acceptance and ized in section 2 of this Act, any State shall, through the legislative ture required. authority thereof, accept the provisions of this Act and designate or authorize the creation of a State agency with which the Children's Bureau shall have all necessary powers to cooperate as herein provided in the administration of the provisions of this Act: Provided, That Use of State agencies. in any State having a child-welfare or child-hygiene division in its State agency of health, the said State agency of health shall administer the provisions of this Act through such divisions. If the legis- ance by Governor lature of any State has not made provision for accepting the provi- awaiting legislative acsions of this Act the governor of such State may in so far as he is authorized to do so by the laws of such State accept the provisions of this Act and designate or create a State agency to cooperate with the Children's Bureau until six months after the adjournment of the first regular session of the legislature in such State following the passage of this Act. SEC. 5. So much, not to exceed 5 per centum, of the additional appropriations authorized for any fiscal year under section 2 of this Act, as the Children's Bureau may estimate to be necessary for administering the provisions of this Act, as herein provided, shall be deducted for that purpose, to be available until expended. Temporary accept tion. Deduction for administrative expenses. to be from Civil Service eli SEC. 6. Out of the amounts authorized under section 5 of this Act, Employees the Children's Bureau is authorized to employ such assistants, clerks, gibles. and other persons in the District of Columbia and elsewhere, to be taken from the eligible lists of the Civil Service Commission, and to purchase such supplies, material, equipment, office fixtures, and apparatus, and to incur such travel and other expense as it may deem necessary for carrying out the purposes of this Act. SEC. 7. Within sixty days after any appropriation authorized by this Act has been made, the Children's Bureau shall make the apportionment herein provided for and shall certify to the Secretary of the Treasury the amount estimated by the bureau to be necessary for administering the provisions of this Act, and shall certify to the Secretary of the Treasury and to the treasurers of the various States the amount which has been apportioned to each State for the fiscal year for which such appropriation has been made. Office supplies, etc., allowed. Annual certificate to trative expenses, State apportionments, etc. Treasury of adminis "tailed plans by State SEC. 8. Any State desiring to receive the benefits of this Act shall, Submission of deby its agency described in section 4, submit to the Children's Bureau agencies. detailed plans for carrying out the provisions of this Act within such State, which plans shall be subject to the approval of the board: Provided, That the plans of the States under this Act shall provide Entering homes, etc., that no official, or agent, or representative in carrying out the provi- forbidden if objected sions of this Act shall enter any home or take charge of any child to. over the objection of the parents, or either of them, or the person standing in loco parentis or having custody of such child. If these plans shall be in conformity with the provisions of this Act and reasonably appropriate and adequate to carry out its purposes they shall be approved by the board and due notice of such approval shall be sent to the State agency by the chief of the Children's Bureau. Notice of approval of plans. Entering homes by officials forbidden if Children's Bureau objected to. SEC. 9. No official, agent, or representative of the Children's Bureau shall by virtue of this Act have any right to enter any home over the objection of the owner thereof, or to take charge of any child over the objection of the parents, or either of them, or of the person standing in loco parentis or having custody of such child. Nothing in this Act shall be construed as limiting the power of a limited. parent or guardian or person standing in loco parentis to determine what treatment or correction shall be provided for a child or the agency or agencies to be employed for such purpose. Parental powers not Certificate to Secre amounts appropriated SEC. 10. Within sixty days after any appropriation authorized by tary of the Treasury of this Act has been made, and as often thereafter while such appropria- by States and the ap tion remains unexpended as changed conditions may warrant, the portionment thereto. 45691°-21-15 Detailed statement in certificate. Payment authorized thereupon. Reports from State agencies. If money not properly expended, certificate to be withheld. Children's Bureau shall ascertain the amounts that have been appropriated by the legislatures of the several States accepting the provisions of this Act and shall certify to the Secretary of the Treasury the amount to which each State is entitled under the provisions of this Act. Such certificate shall state (1) that the State has, through its legislative authority, accepted the provisions of this Act and designated or authorized the creation of an agency to cooperate with the Children's Bureau, or that the State has otherwise accepted this Act, as provided in section 4 hereof; (2) the fact that the proper agency of the State has submitted to the Children's Bureau detailed plans for carrying out the provisions of this Act, and that such plans have been approved by the board; (3) the amount, if any, that has been appropriated by the legislature of the State for the maintenance of the services and facilities of this Act, as provided in section 2 hereof; and (4) the amount to which the State is entitled under the provisions of this Act. Such certificate, when in conformity with the provisions hereof, shall, until revoked as provided in section 12 hereof, be sufficient authority to the Secretary of the Treasury to make payment to the State in accordance therewith. SEC. 11. Each State agency cooperating with the Children's Bureau under this Act shall make such reports concerning its operations and expenditures as shall be prescribed or requested by the bureau. The Children's Bureau may, with the approval of the board, and shall, upon request of a majority of the board, withhold any further certificate provided for in section 10 hereof whenever it shall be determined as to any State that the agency thereof has not properly expended the money paid to it or the moneys herein required to be appropriated by such State for the purposes and in accordance with the provisions of this Act. Such certificate may be withheld until such time or upon such conditions as the Children's Bureau, Appeal to the Presi- with the approval of the board, may determine; when so withheld the State agency may appeal to the President of the United States who may either affirm or reverse the action of the Bureau with such Notice to State be directions as he shall consider proper: Provided, That before any such certificate shall be withheld from any State, the chairman of the board shall give notice in writing to the authority designated to represent the State, stating specifically wherein said State has failed to comply with the provisions of this Act. dent. Proviso. fore withholding certificate. Use for buildings, etc., forbidden. or SEC. 12. No portion of any moneys apportioned under this Act for the benefit of the States shall be applied, directly or indirectly, to the purchase, erection, preservation, or repair of any building or buildings or equipment, or for the purchase or rental of any buildings other or lands, nor shall any such moneys or moneys required to be appropriated by any State for the purposes and in accordance with the provisions of this Act be used for the payment of any maternity or infancy pension, stipend, or gratuity. Pension gratuity forbidden. Annual report, etc. Intention of Act. SEC. 13. The Children's Bureau shall perform the duties assigned to it by this Act under the supervision of the Secretary of Labor, and he shall include in his annual report to Congress a full account of the administration of this Act and expenditures of the moneys herein authorized. SEC. 14. This Act shall be construed as intending to secure to the various States control of the administration of this Act within their respective States, subject only to the provisions and purposes of this Act. Approved, November 23, 1921. CHAP. 136.-An Act To reduce and equalize taxation, to provide revenue, and for other purposes. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, TITLE I.-GENERAL DEFINITIONS. SECTION 1. That this Act may be cited as the "Revenue Act of 1921." SEC. 2. That when used in this Act (1) The term "person" includes partnerships and corporations, as well as individuals; (2) The term "corporation" includes associations, joint-stock companies, and insurance companies; (3) The term "domestic" when applied to a corporation or partnership means created or organized in the United States; (4) The term "foreign" when applied to a corporation or partnership means created or organized outside the United States; (5) The term "United States" when used in a geographical sense includes only the States, the Territories of Alaska and Hawaii, and the District of Columbia; (6) The term "Secretary" means the Secretary of the Treasury; (7) The term "Commissioner" means the Commissioner of Internal Revenue; November 23, 1921. [H. R. 8245.] [Public, No. 98.] Revenue Act of 1921. General definitions. Title of Act. "Person." "Corporation." "Domestic." "Foreign." "United States." "Secretary." "Collector." (8) The term "collector" means collector of internal revenue; (9) The term "taxpayer" includes any person, trust or estate sub- "Taxpayer.” ject to a tax imposed by this Act; "Military or naval forces of the United (10) The term "military or naval forces of the United States" includes the Marine Corps, the Coast Guard, the Army Nurse Corps, States." Female, and the Navy Nurse Corps, Female, but this shall not be deemed to exclude other units otherwise included within such terms; and "Government con With United States or agency thereof. Subcontracts. (11) The term "Government contract" means (a) a contract tract." made with the United States, or with any department, bureau, officer, commission, board, or agency, under the United States and acting in its behalf, or with any agency controlled by any of the above if the contract is for the benefit of the United States, or (b) a subcontract made with a contractor performing such a contract if the products or services to be furnished under the subcontract are for the benefit of the United States. The term "Government contract or contracts made between April 6, 1917, and November 11, 1918, both dates 11, 1917. inclusive" when applied to a contract of the kind referred to in dated. clause (a) of this subdivision, includes all such contracts which, although entered into during such period, were originally not enforceable, but which have been or may become enforceable by reason of subsequent validation in pursuance of law. TITLE II.-INCOME TAX. PART I.-GENERAL PROVISIONS. DEFINITIONS. SEC. 200. That when used in this title Made between April 6, 1917, and November Subsequently vali INCOME TAX. General provisions. Vol. 40, pp. 1058–1062. "Taxable year." (1) The term "taxable year" means the calendar year, or the Meaning of terms, fiscal year ending during such calendar year, upon the basis of which the net income is computed under section 212 or section 232. The term "fiscal year" means an accounting period of twelve months ending on the last day of any month other than December. The first taxable year, to be called the taxable year 1921, shall be the "Fiscal year." First taxable year. "Paid." Application of, ac deductions and credits. calendar year 1921 or any fiscal year ending during the calendar year 1921; (2) The term "fiduciary" means a guardian, trustee, executor, administrator, receiver, conservator, or any person acting in any fiduciary capacity for any person, trust or estate; (3) The term "withholding agent" means any person required to deduct and withhold any tax under the provisions of section 221 or section 237; (4) The term "paid," for the purposes of the deductions and crued or incurred, to credits under this title, means "paid or accrued" or "paid or incurred," ," and the terms "paid or incurred" and "paid or accrued shall be construed according to the method of accounting upon the basis of which the net income is computed under section 212; and "Personal service corporations." Exclusions. (5) The term "personal service corporation" means a corporation whose income is to be ascribed primarily to the activities of the principal owners or stockholders who are themselves regularly engaged in the active conduct of the affairs of the corporation and in which capital (whether invested or borrowed) is not a material income-producing factor; but does not include any foreign corporation, nor any corporation 50 per centum or more of whose gross income consists either (1) of gains, profits, or income derived from trading as a principal, or (2) of gains, profits, commissions, or other income, derived from a Government contract or contracts made between April 6, 1917, and November 11, 1918, both dates inclusive. Dividends. Distribution of corporation earnings accumulated since Febru DIVIDENDS. SEC. 201. (a) That the term "dividend" when used in this title ary 28, 1913, deemed. (except in paragraph (10) of subdivision (a) of section 234 and paragraph (4) of subdivision (a) of section 245) means any distribution made by a corporation to its shareholders or members, whether in By personal service cash or in other property, out of its earnings or profits accumulated corporations since Do- since February 28, 1913, except a distribution made by a personal cember 31, 1917, ex-service corporation out of earnings or profits accumulated since December 31, 1917, and prior to January 1, 1922. cepted. For taxation, deemed as from February 28, 1913. empt. (b) For the purposes of this Act every distribution is made out of Prior earnings ex- earnings or profits, and from the most recently accumulated earnings or profits, to the extent of such earnings or profits accumulated since February 28, 1913; but any earnings or profits accumulated or increase in value of property accrued prior to March 1, 1913, may be distributed exempt from the tax, after the earnings and profits Allowance for loss accumulated since February 28, 1913, have been distributed. on exempted stock distributions. Application of other distribution of earnings. Stock dividends not taxable. If any such tax-free distribution has been made the distributee shall not be allowed as a deduction from gross income any loss sustained from the sale or other disposition of his stock or shares unless, and then only to the extent that, the basis provided in section 202 exceeds the sum of (1) the amount realized from the sale or other disposition of such stock or shares, and (2) the aggregate amount of such distributions received by him thereon. (c) Any distribution (whether in cash or other property) made by a corporation to its shareholders or members otherwise than out of (1) earnings or profits accumulated since February 28, 1913, or (2) earnings or profits accumulated or increase in value of property accrued prior to March 1, 1913, shall be applied against and reduce the basis provided in section 202 for the purpose of ascertaining the gain derived or the loss sustained from the sale or other disposition of the stock or shares by the distributee. (d) A stock dividend shall not be subject to tax but if after the Proceeds of redeemed distribution of any such dividend the corporation proceeds to cancel or redeem its stock at such time and in such manner as to make the stock troated as taxable dividends. distribution and cancellation or redemption essentially equivalent to the distribution of a taxable dividend, the amount received in redemption or cancellation of the stock shall be treated as a taxable dividend to the extent of the earnings or profits accumulated by such corporation after February 28, 1913. (e) For the purposes of this Act, a taxable distribution made by a corporation to its shareholders or members shall be included in the gross income of the distributees as of the date when the cash or other property is unqualifiedly made subject to their demands. INCOME TAX. Included in gross in come of distributees. Division of earnings (f) Any distribution made during the first sixty days of any tax- to taxable years. able year shall be deemed to have been made from earnings or profits accumulated during preceding taxable years; but any distribution made during the remainder of the taxable year shall be deemed to have been made from earnings or profits accumulated between the close of the preceding taxable year and the date of distribution, to the extent of such earnings or profits, and if the books of the corporation do not show the amount of such earnings or profits, the earnings or profits for the accounting period within which the distribution was made shall be deemed to have been accumulated ratably during such period. This subdivision shall not be in effect after December 31, 1921. December 31, 1921. BASIS FOR DETERMINING GAIN OR LOSS. SEC. 202. (a) That the basis for ascertaining the gain derived or loss sustained from a sale or other disposition of property, real, personal, or mixed, acquired after February 28, 1913, shall be the cost of such property; except that— Not effective after Gain or loss. property acquired after February 28, 1913, based On sales, etc., of on cost. Inventory value used. Gifts after December 31, 1920, based on value hands of donor. in Ascertainment. (1) In the case of such property, which should be included in the inventory, the basis shall be the last inventory value thereof; (2) In the case of such property, acquired by gift after December 31, 1920, the basis shall be the same as that which it would have in the hands of the donor or the last preceding owner by whom it was not acquired by gift. If the facts necessary to determine such basis are unknown to the donee, the Commissioner shall, if possible, obtain such facts from such donor or last preceding owner, or any other person cognizant thereof. If the Commissioner finds it impossible to obtain such facts, the basis shall be the value of such property as found by the Commissioner as of the date or approximate date at which, according to the best information the Commissioner is able to obtain, such property was acquired by such donor or last preceding owner. In the case of such property acquired by gift acquired, if before Deon or before December 31, 1920, the basis for ascertaining gain or cember 31, 1920. loss from a sale or other disposition thereof shall be the fair market price or value of such property at the time of such acquisition; (3) In the case of such property, acquired by bequest, devise, or inheritance, the basis shall be the fair market price or value of such property at the time of such acquisition. The provisions of this paragraph shall apply to the acquisition of such property interests as are specified in subdivision (c) or (e) of section 402. Market value when on market values. Applicable to Bequests, etc., based changes. ex Post, pp. 278,279. (b) The basis for ascertaining the gain derived or loss sustained before March 1, 1913, from the sale or other disposition of property, real, personal, or on same basis. mixed, acquired before March 1, 1913, shall be the same as that provided by subdivision (a); but If price in excess of (1) If its fair market price or value as of March 1, 1913, is in excess cost." of such basis, the gain to be included in the gross income shall be the excess of the amount realized therefor over such fair market price or value; (2) If its fair market price or value as of March 1, 1913, is lower than such basis, the deductible loss is the excess of the fair market price or value as of March 1, 1913, over the amount realized therefor; and If price lower than cost. |