TABLE OF CONTENTS CHAPTER 7-TAX ON TRANSFERS TO AVOID INCOME TAX Sec. 1250. Imposition of tax. Sec. 1251 . Nontaxable transfers. Sec. 1252 . Definition of "foreign trust." Sec. 1253. Payment and collection. Sec. 1254 . Publicity of returns. CHAPTER 7-TAX ON TRANSFERS TO AVOID INCOME TAX SEC. 1250. IMPOSITION OF TAX. There shall be imposed upon the transfer of stock or securities by a citizen or resident of the United States, or by a domestic corporation or partnership, or by a trust which is not a foreign trust, to a foreign corporation as paid-in surplus or as a contribution to capital, or to a foreign trust, or to a foreign partnership, an excise tax equal to 25 per centum of the excess of (1) the value of the stock or securities so transferred over (2) its adjusted basis in the hands of the trans- feror as determined under section 113 of the Revenue Act of 1932, 47 Stat. 198. SEC. 1251. NONTAXABLE TRANSFERS. The tax imposed by section 1250 shall not apply- (a) if the transferee is an organization exempt from income tax under section 103 of the Revenue Act of 1932; or (b) if prior to the transfer it has been established to the satisfac- tion of the Commissioner that such transfer is not in pursuance of a plan having as one of its principal purposes the avoidance of Fed- eral income taxes. SEC. 1252. DEFINITION OF "FOREIGN TRUST." A trust shall lbe considered a foreign trust within the meaning of this chapter if, assuming a subsequent sale by the trustee, outside the United States and for cash, of the property so transferred, the profit, if any, from such sale would not be included in the gross income of the trust under Title I of the Revenue Act of 1932. SEC. 1253. PAYMENT AND COLLECTION. (a) The tax imposed by section 1250 shall, without assessment or notice and demand, be due and payable by the transferor at the time of the transfer, and shall be assessed, collected, and paid under regu- lations prescribed by the Commissioner with the approval of the Secretary. (b) Under regulations prescribed by the Commissioner with the approval of the Secretary the tax may be abated, remitted, or re- funded if after the transfer it has been established to the satisfaction of the Commissioner that such transfer was not in pursuance of a plan having as one of its principal purposes the avoidance of Federal income taxes. (c) All administrative, special, or stamp provisions of law, includ- ing penalties and including the law relating to the assessment of taxes, so far as applicable, shall be extended to and made a part of this chapter. SEC. 1254. PUBLICITY OF RETURNS. For provisions with respect to publicity of returns under this chap- ter, see subsection (a) (2) of section 55. 172
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