bears to the aggregate of such amounts so paid, credited, or to be distributed to legatees, heirs, and beneficiaries for the taxable "Distributable in- year of the estate or trust. For the purposes of this paragraph 'distributable income' means either (A) the net income of the estate or trust computed with the deductions allowed under sub- sections (b) and (c) in cases to which this paragraph does not apply, or (B) the income of the estate or trust minus the deduc- tions provided in subsections (b) and (c) in cases to which this paragraph does not apply, whichever is the greater. In com- puting such distributable income the deductions under subsec- tions (b) and (c) shall be determined without the application of paragraph (2). "(2) AMOUNTS DISTRIBUTABLE OUT OF INCOME OF PRIOR PERIOD.- In cases, other than cases described in paragraph (1), if on a date more than 65 days after the beginning of the taxable year of the estate or trust, income of the estate or trust for any period becomes payable, the amount of such income shall be considered income of the estate or trust for its taxable year which is paid, credited, or to be distributed to the extent of the income of the estate or trust for such period, or if such period is a period of more than 12 months, the last 12 months thereof. "(3) DISTRIuTIONS IN FIRST 65 DAYS OF TAXABLE TEAR. - "(A) General Rule.- I f within the first 65 days of any taxable year of the estate or trust, income of the estate or trust, for a period beginning before the beginning of the taxable year, becomes payable, such income, to the extent of the income of the estate or trust for the part of such period not falling within the taxable year or, if such part is longer than 12 months, the last 12 months thereof, shall be considered, paid, credited, or to be distributed on the last day of the preceding taxable year. This subparagraph shall not apply with respect to any amount with respect to which subparagraph (B) applies. "(B) Payable Out of Income or Corpus.- I f within the first 65 days of any taxable year of the estate or trust, an amount which can be paid at intervals out of other than income becomes payable, there shall be considered as paid, credited, or to be distributed on the last day of the preceding taxable year the part of such amount which bears the same ratio to such amount as the part of the interval not falling' within the taxable year bears to the period of the interval. If the part of the interval not falling within the taxable year is a period of more than 12 months, the interval shall be considered to begin on the date 12 months before the end of the taxable year. 6U.s.c. 6. (d) TECHNICAL AMENDMENT.- Section 164 (relating to different taxable years of estate or trust and beneficiary) is amended by strik- ing out "beneficiary" and inserting in lieu thereof "legatee, heir, or beneficiary". (e) TAXABLE YEARS TO WHICH AMENDMENTS APPLICABLE.- The amendments made by this section shall be applicable only with respect to taxable years beginning after December 31, 1941; except that in the case of income paid, credited or to be distributed or amounts paid, credited or to be distributed by an estate or trust the amendments made by this section shall be applicable only with respect to such income and such amounts paid, credited or to be distributed on or after the beginning of the first taxable year of the estate or trust, as the case may be, beginning after December 31, 1941. 810 PUBLIC LAWS-CH. 619-OCT. 21, 1942 [56 STAT.
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