ments have been held to be subject to taxation as conveyances of land revesting title. This office has given careful consideration to the question of taxation of these instruments, and has decided to modify the rulings heretofore made on these documents. The paragraph relating to conveyances subjects to taxation any deed, instrument, or writing whereby any lands, tenements, or other realty sold shall be granted, assigned, transferred, or otherwise conveyed to or vested in the purchaser, * * * and the rate of taxation imposed on these instruments is 50 cents where the consideration for the conveyance or the value of the land conveyed exceeds $100, and does not exceed $500, and for each additional $500, or fractional part thereof in excess of $500, 50 cents. Under the construction placed upon this paragraph, all instruments that vested title were held to be subject to this taxation, although releases are not specifically mentioned in the law at all. It was also held under this construction that in all States where the common law prevailed the instruments used in the release of mortgages and deeds of trust operating as mortgages were instruments that vested or revested title, and, therefore, were subject to taxation as conveyances. This was likewise so in States operating under the code system, if the instruments of release, in law, actually vested or revested title. Believing this to be a too technical and strict construction of the paragraph in question, this office has finally concluded that it was not the intention of Congress to impose a taxation as conveyances on releases of mortgages and deeds of trust considered as mortgages, especially as such a ruling would, where the person borrowed money on real estate, subject the transaction to a triple taxation: First, on the mortgage; second, on the promissory notes secured thereby ; third, on the release of the mortgage when the debt was paid, there being not only the third imposition of tax on the release, but also taxing it as a conveyance, which tax is double that of the tax imposed upon the mortgage which it releases. You are, therefore, advised that releases of mortgages and deeds of trust considered as mortgages are now held to be exempt from taxation by this office, no matter in what form they are executed, whether with the solemnity of a deed, a certificate of satisfaction, or simply as an entry of satisfaction on the margin of the record book in which the released mortgage or deed of trust is recorded. Where the release requires a notarial certificate, the certificate is subject to a tax of 10 cents, and the release is exempt from taxation as aforesaid. Respectfully, yours, N. B. SCOTT, Commissioner. Hon. N. D. SPERRY, House of Representatives, Washington, D. C. (20441.) Powers of collectors. Powers of collectors to stamp unstamped instruments.-Section 3422, Revised Statates, applicable to act of June 13, 1898. TREASURY DEPARTMENT, Washington, D. C., December 15, 1898. SIR: In reply to your letter of the 12th instant, regarding the power of collectors to stamp unstamped instruments, you are informed that this office holds that section 13 of the act of June 13, 1898, is to be read in connection with section 3422, Revised Statutes. The latter section includes all instruments liable to stamp duty, and is not limited in terms to “bonds, debentures, or certificates of stock or indebtedness." Section 3422, Revised Statutes, is made applicable to the act of June 13, 1898, by section 31 of the latter act. Respectfully, yours, N. B. SCOTT, Commissioner. Mr. A. B. WHITE, Collector Internal Revenue, Parkersburg, W. Va. (20442.) Legacy taxes. Legacy tax accrues on an estate when testator died on or after June 13, 1898. — The New York transfer tax is not to be deducted from the amount of each legacy in determining the amount of the legacy tax.–Legacies in the nature of a life beneficiary interest and remaindermen's interest are both taxable. TREASURY DEPARTMENT, 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 testa. tor having died on or after June 13, 1898. (2) The New York transfer tax is not to be deducted from the amount of each legacy in determining the amount of the legacy tax. (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, which have been prepared by the Government Actuary. The tables referred to are published in this issue of TREASURY DECISIONS, as decision No. 20443. Legacy taxes are 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. F. E. MOORE, Collector, Brooklyn, N. Y. (20443.) TREASURY DEPARTMENT, 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 internal revenue 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." N. B. SCOTT, Commissioner. Approved : 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. (United States Internal Revenue Adjustinent, 1898.] LEGACY TAXES.-Table, single life, 4 per cent, showing the present worth of an annuity or life interest, and of a reversionary interest, etc.-Continued. Example 1.-A person dying bequeaths to his nephew, aged 40 years, an annuity of one 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 annuity 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 “mean redemption period” and represents the time in years in which the present values of annuites 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 months 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, Gov't Actuary. Present value of annuities and reversions certain upon a 4 per cent basis. Present worth of Present worth of an annuity of one Number dollar, payable at able at the end of one dollar, payof years. the end of each year, for a certain a certain number of years. Present worth of Present worth of one dollar, payNumber dollar, payable at of years. the end of each able at the end of year, for a certain a certain number number of years. of years. 16.. 1.. 2.. 3... Annuity. 1.88609 Reversion. |