you will please inform them that, if a man should die, leaving a taxable estate of $120,000, to be equally divided between his six children, $20,000 to each, each of said legacies is to be taxed at the rate of $1.50 per $100. The legacy tax, however, is not payable until the legacy is payable, and the legacy must not be paid until the tax shall have been paid.

Respectfully, yours,

N. B. SCOTT, Commissioner.

Mr. CHARLES C. COLE, Collector, Syracuse, N. Y.

(20442.) Legacy tax.

Legacy tax accrues on an estate when testator died on or after June 13, 1898-Lega cies in the nature of a life beneficiary interest and remaindermen's interest are both taxable.

TREASURY DEPARTMENT,

OFFICE OF COMMISSIONER OF INTERNAL REVENUE,

Washington, D. C., December 16, 1898. SIR: Your letter of the 12th instant, inclosing a letter from B. B. Blydenburgh, attorney for the estate of Franklin E. Taylor, deceased, has been received, stating that said testator died June 30, 1898, and asking a series of questions relative to said estate's liability to tax under the war-revenue act.

I reply as follows:

(1) This estate is subject to tax under the war-revenue act, the testator having died on or after June 13, 1898.

(3) Legacies in the nature of a life beneficiary interest and remaindermen's interest are both taxable. The values of said interests are to be determined by approved tables (see page 196).

Legacy taxes are not payable until the legacy is payable, and the legacy must not be paid until the tax shall have been paid.

OFFICE OF COMMISSIONER OF INTERNAL REVENUE,

Washington, D. C., December 16, 1898.

The appended tables, showing the present worth of an annuity, life interest, and of a reversionary interest, with explanatory notes and

examples, are hereby published and promulgated for the use of internalrevenue officers and administrators, executors, or trustees in determining the duty or tax to be paid to the United States upon legacies or distributive shares arising from personal property, imposed by the act of June 13, 1898, entitled "An act to provide ways and means to meet war expenditures, and for other purposes."

Approved:

N. B. SCOTT, Commissioner.

O. L. SPAULDING, Acting Secretary of the Treasury.

LEGACY TAXES.-Table, single life, 4 per cent, showing the present worth of an annuity or life interest, and of a reversionary interest, with explanatory notes and examples.

LEGACY TABLES.-Table, single life, 4 per cent, etc.—Continued.

Example 1.-A person dying bequeaths to his nephew, aged 40 years, an annuity of oue thousand dollars during life. What is the present value of the annuity?

Reference to the foregoing table shows that the present value of one dollar a year, payable at the end of each year during the life of a person aged 40 years, is fifteen dollars nine cents two mills and ninety-five one-hundredths of a mill ($15.09295); therefore the present value of one thousand dollars is one thousand times as much, or fifteen thousand and ninety-two dollars and ninety-five cents, the amount upon which tax accrues.

Example 2.-A person dying bequeaths to his daughter, aged 35 years, a life interest in personal property amounting to fifty thousand dollars ($50,000), the estate to revert absolutely at her death to other parties. Required the present value, at the date of death of the testator, of the life interest of the daughter in the estate; also, required at the same date, the present value of the reversionary interest of said other parties in the estate.

At a net interest of 4 per cent per annum, the assumed rate, the estate of $50,000 will realize an income or annuity of $2,000 per annum. The present value of the sum of $1, payable at the end of each year

during the life of a person aged 35 years, is found by the table to be $16.14437, and the present value of an anuuity of $2,000 for the same time would be two thousand times as much, or $32,288.74, the amount upon which tax accrues.

The reversion or present value of $1, due at the end of the year of death of a person aged 35 years, is found by the table to be $0.34060, and such value of $50,000 would be fifty thousand times as much, or $17,030, the amount upon which tax accrues.

NOTE. This table is based on the "Actuaries' or Combined Experience Table," money being worth 4 per cent per annum.

The first column shows the age of the person under consideration. The second column shows the corresponding "meau redemption period," and represents the time in years in which the present values of annuities and reversions certain will become equal respectively to the present value of annuities and reversions contingent on the duration of life.

The "mean redemption period" is a mean between the last payment of the annuity and the payment of the reversion, averaging six mouths later than the former payment and six months earlier than the latter payment.

The third column shows the present value of an annuity for life of one dollar per annum, the last payment being made at the end of the year prior to the one in which death occurs.

The fourth column shows the present worth of one dollar payable at the end of the year in which death occurs.

NOTE. This adjustment has been prepared under the direction of Mr. J. S. McCoy, Government actuary.

Present value of annuities and reversions certain upon a 4 per cent basis.

Example.-A man dies leaving personal property to the amount of $50,000, his daughter to have the income from it for twenty years, it then to revert to his youngest son. What is the present worth of these legacies?

The income from $50,000 would be $2,000 per annum, assuming money at 4 per cent.

The present worth of an annuity of $2,000 for twenty years will be

2,000 times an annuity of $1 for twenty years. In the table, opposite 20, we find the value of an annuity of $1 to be $13.59032; therefore the present worth of an annuity of $2,000 will be $27,180.64.

A reversion of $1 at the end of twenty years is shown by the table to be $0.456387, and a reversion of $50,000 will be 50,000 times as much, or $22,819.35.

(20444.) Legacy tax.

Where property is held by trustees under a deed of trust executed prior to June 13, 1898, by a person dying on or after said date, and by the terms of the trust the beneficiaries could not become entitled to the possession or enjoyment of their distributive shares until after the grantor's death, taxes are required to be paid on these distributive shares under section 29, act of June 13, 1898.

TREASURY DEPARTMENT,

OFFICE OF COMMISSIONER OF INTERNAL REVENUE, Washington, D. C., December 16, 1898. SIR: This office is in receipt of your letter of the 9th instant, inclosing a statement of a case in which the taxes have been paid under "right of refund," together with a copy of a deed of trust. You say:

Mr. Storrs, who represents executor and legatees in this case, claims that, as this inheritance was made over by trustor to trustees irrevocably before the revenue law went into effect, it does not come within the provisions of the war-revenue law, and therefore is not taxable.

You ask for a decision in this case.

In reply, you are advised that the distributive shares of the property, which was in the possession of, and held by, the said trustees under said deed of trust prior to June 13, 1898, but which the distributees did not become entitled to possession or enjoyment of until after that date, are subject to the payment of tax under section 29 of the act of June 13, 1898. The fourth paragraph reads as follows:

Fourth. Divide among and pay over all the rest, remainder, and remainders of the moneys that may be realized out of the sale of my property into three equal parts, as follows, namely: Pay over one-third of the amount to E. C. B. and to M. B. M., share and share alike; and in case of the death of either, the share she would have received if living shall be paid to their children or their survivor or survivors, share and share alike. Pay over one-third of the amount to J. H. S. and E. H., share and share alike; but should J. H. S. die before the completion of this trust, the share she would have received if living shall be paid over to her surviving issue, share and share alike, but should she be deceased before the completion of this trust, leaving no lawful issue, then the share she would have received if living shall be paid over to E. H. But should E. H. die before the completion of this trust, leaving lawful issue, then the share she would have received if living shall be paid to such issue, but without leaving lawful issue, then her share shall be paid over to her sister, J. H. S., share and share alike. Pay over one-third of the amount to W. E. T., N. L. T., L. B. T., and E. T.