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'•'•'-. )~j: W. P. G. HARDlNG. GoYER~OR ALBERT STRAUSS. VICE GOVERNOR ADOLPH C. MII.LER tHARLES S. HAMLIN EX-OFFlCIO MEMBERS CARTER GLASS SECRETARY OF THE TREASURY CHAIRMAN FEDERAL RESERVE BOARD JOHN SKELTON WILLIAMS COMPTROLLER OF THE CURRENCY J. A. BRODERICK, SECRETARY W. T. CHAPMAN. ASSISTANT SECRETARY W. M. IMLAY. FIM:A.L AGENT ADDRESS REPl. Y TO WASHINGTON FEDERAL 'RESERVE BOARD April 23, 1919· X-1493 SUbject: Opinion Acting Commissioner of Internal Revenue as to whether Five Per Cent Bonds of War Finance Corporation are "Admissible Assets". Dear Sir: Your attention is invited to an opinion of the Acting Commissioner of Internal Revenue as to whether the five per cent bonds of the War Finance Corporation are "inadmissible assets" under the provisions of Section 325 of the Revenue A.ct of 1918, &.s follows: "The term 'inadmissible assets• is defined in the aforesaid section of the Act to mean 'stocks, bonds, and other obligations (other than obligations of the United Stetes), and dividends the interest from which is not included in computing net income•. Section 213 (b) of the Act provides that the interest on bonds issued by the War Finance Corporation shall be exempt from taxation to the extent provided in the Act authorizing the issue of such bonds; and it is provided in Section 16 of the War Fi~nce Corporation Act that the bonds issued by the War Finance Corporation shall be exempt, both as to principal and interest, frorr. all taxes except estate and inheritance taxes, and also from graduated additional income, excess profits and war profits ta~s on the interest on an amount of such bonds the principal of which does not exceed $5,000.00. Under the terms of Section 17 of the War Finance Corporation Act such bonds are not obligations of the United States". "It is accordingly held that the bonds of the War Finance Corporation, the principal of which does not exceed $5,000.00 are inadmissible assets. Bonds of the Wc..:t Finance Corporation, tr...e :princil,.Jal of which exceeds $5,000.00 are admissible assets~~ Very truly yours, Governor.
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