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SECTION 1. [Act of April 24, 1917 (40 Stat., 35).]

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The bonds herein authorized shall be in such form and subject to such terms and conditions of issue, conversion, redemption, maturities, payment, and rate and time of payment of interest, not exceeding three and one-half per centum per annum, as the Secretary of the Treasury may prescribe. The principal and interest thereof shall be payable in United States gold coin of the present standard of value and shall be exempt, both as to principal and interest, from all taxation, except estate or inheritance taxes, imposed by authority of the United States, or its possessions, or by any State or local taxing authority; but such bonds shall not bear the circulation privilege.

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Opinion of the Attorney General on the question of exemption from income tax of corporation dividends paid in the form of Liberty loan bonds. (T. D. 2512.)

Corporation dividends paid in the form of Liberty bonds not taxable; but a corporation owning these bonds not exempt from excise, franchise, and other corporation taxes. (T. D. 2512.)

Promissory notes issued on or after April 6, 1918, secured by United States bonds and obligations issued after April 24, 1917, are exempt from internal revenue stamp tax. (T. D. 2701.)

Exemption of first Liberty loan bonds.

second Liberty

SEC. 7. [Act of September 24, 1917 (40 Stat., 288).] Exemption of That none of the bonds authorized by section one, nor of loan bonds. the certificates authorized by section five, or by section six, of this Act, shall bear the circulation privilege. All such bonds and certificates shall be exempt, both as to principal and interest from all taxation now or here

Exemption of certain certifi

edness.

after imposed by the United States, any State, or any of the possessions of the United States, or by any local taxing authority, except (a) estate or inheritance taxes, and (b) graduated additional income taxes, commonly known as surtaxes, and excess profits and war-profits taxes, now or hereafter imposed by the United States, upon the income or profits of individuals, partnerships, associations, or corporations. The interest on an amount of such bonds and certificates the principal of which does not exceed in the aggregate $5,000, owned by any individual, partnership, association, or corporation, shall be exempt from the taxes provided for in subdivision (b) of this section.

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SEC. 11. That section two of an Act of Con-1 gress approved February fourth, nineteen hundred and ten, entitled "An Act prescribing certain provisions and conditions under which bonds and certificates of indebtedness of the United States may be issued, and for other purposes," is hereby amended to read as follows: SEC. 2. That any certificates of indebtedness herecates of indebt after issued shall be exempt from all taxes or duties of the United States (but, in the case of certificates issued after September first, nineteen hundred and seventeen, only if and to the extent provided in connection with the issue thereof), as well as from taxation in any form by or under State, municipal, or local authority; and that a sum not exceeding one-tenth of one per centum of the amount of any certificates of indebtedness issued is hereby appropriated, out of any money in the Treasury not otherwise appropriated, to pay the expenses of preparing, advertising, and issuing the same.'

Exemption of

third Liberty loan bonds.

Interest paid within the year on indebtedness incurred for purchase of Liberty 4 per cent bonds is deductible in computing net income subject to income surtaxes and excess profits taxes. (T. D. 2541.)

Liberty 4 per cent bonds of second series issued in exchange for Liberty 31 per cent bonds are "obligations of the United States issued after September 1, 1917,” and are not subject to tax; current earnings invested in Liberty 34 per cent bonds are not subject to tax upon distributed net income of corporations if retained for employment in the business. (T. D. 2570.)

Interest on obligations of the United States or its possessions not to be included as income (but, in the case of obligations issued after September 1, 1917, only if and to the extent provided in the act authorizing issue thereof). (T. D. 2690.)

Income from not to exceed $5,000 face value of Liberty bonds, Treasury certificates of indebtedness, and war-savings certificates authorized by the act of September 24, 1917, is exempt from all income and war excess profits taxes. (T. D. 2585.)

SEC. 3 [Act of April 4, 1918 (40 Stat.,502,504.)] That section four of said Act approved September twenty

fourth, nineteen hundred and seventeen, is hereby
amended by adding two new paragraphs as follows:
"That holders of bonds bearing interest at a higher
rate than four per centum per annum, whether issued
(a) under section one, or (b) upon conversion of four
per centum bonds issued under section one, or (c) upon
conversion of three and one-half per centum bonds issued
under said Act approved April twenty-fourth, nineteen
hundred and seventeen, or (d) upon conversion of four
per centum bonds issued upon conversion of such three
and one-half per centum bonds, shall not be entitled to
any privilege of conversion under or pursuant to this
section or otherwise. The provisions of section seven
shall extend to all such bonds.

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Exemption of

Corporation.

of

SEC. 16. [Act of April 5, 1918 (40 Stat., 506).] That bonds issued by any and all bonds issued by the Corporation shall be War Finance exempt, both as to principal and interest, from all taxation now or hereafter imposed by the United States, any State, or any of the possessions of the United States, or by any local taxing authority, except (a) estate or inheritance taxes, and (b) graduated additional income taxes, commonly known as surtaxes, and excess-profits and war-profits taxes, now or hereafter imposed by the United States, upon the income or profits of individuals, partnerships, corporations, or associations. The interest interest bonds. on an amount of such bonds the principal of which does not exceed in the aggregate $5,000 owned by any individual, partnership, corporation, or association, shall be exempt from the taxes referred to in clause (b). The Corporation, including its franchise and the capital and corporation. reserve or surplus thereof, and the income derived therefrom, shall be exempt from all taxation now or hereafter imposed by the United States, any State, or any of the possessions of the United States, or by any local taxing authority, except that any real property of the Corporation shall be subject to State, county, or municipal taxes to the same extent, according to its value, as other real property is taxed.

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Exemption

of

Liberty loan

Finance Corpora

SEC. 3. [Act of July 9, 1918 (40 Stat., 844).] That, Exemption of notwithstanding the provisions of the Second Liberty bonds and War Bond Act, as amended by the Third Liberty Bond Act, tion bonds. or of the War Finance Corporation Act, bonds and certificates of indebtedness of the United States payable in any foreign money or foreign moneys, and bonds of the War Finance Corporation payable in any foreign money or foreign moneys exclusively or in the alternative, shall, if and to the extent expressed in such bonds at the time of their issue, with the approval of the Secretary of the Treasury, while beneficially owned by a nonresident alien individual, or by a foreign corporation, partnership, or association, not engaged in business in the

Exemption of

erty loan bonds.

United States, be exempt both as to principal and interest from any and all taxation now or hereafter imposed by the United States, any State, or any of the possessions of the United States, or by any local taxing authority.

SECTION 1. [Act of September 24, 1918 (40 Stat., 965).] interest on Lib. * * * That until the expiration of two years after the date of the termination of the war between the United States and the Imperial German Government, as fixed by proclamation of the President

(1) That interest on an amount of bonds of the fourth Liberty loan the principal of which does not exceed $30,000, owned by any individual, partnership, association, or corporation, shall be exempt from graduated additional income taxes, commonly known as surtaxes, and excess and war profits taxes, now or hereafter imposed by the United States, upon the income or profits of individuals, partnerships, associations, or corporations;

(2) The interest received after January 1, 1918, on an amount of bonds of the first Liberty loan converted, dated either November 15, 1917, or May 9, 1918, the second Liberty loan, converted and unconverted, and the third Liberty loan, the principal of which does not exceed $45.000 in the aggregate, owned by any individual, partnership, association, or corporation, shall be exempt from such taxes: Provided, however, That no owner of such bonds shall be entitled to such exemption in respect to the interest on an aggregate principal amount of such bonds exceeding one and one-half times the principal amount of bonds of the fourth Liberty loan originally subscribed for by such owner and still owned by him at the date of his tax return; and

(3) The interest on an amount of bonds, the principal of which does not exceed $30,000, owned by any individual, partnership, association, or corporation, issued upon conversion of 34 per centum bonds of the first Liberty loan in the exercise of any privilege arising as a consequence of the issue of bonds of the fourth Liberty loan, shall be exempt from such taxes.

The exemption provided in this section shall be in addition to the exemption provided in section 7 of the second Liberty bond act in respect to the interest on an amount of bonds and certificates, authorized by such act and amendments thereto, the principal of which does not exceed in the aggregate $5,000, and in addition to all other exemptions provided in the second Liberty bond act.

Regulations with reference to exemption of interest on Liberty bonds held or subscribed for by trustees, parterships and corporations under supplement to second Liberty bond act. (T. D. 2762.)

SECTION 1. [Act of March 3, 1919 (40 Stat., 1309).] That the Second Liberty Bond Act is hereby amended by adding thereto a new section to read as follows:

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Exemption of

(b) The notes herein authorized may be issued in any second Liberty one or more of the following series as the Secretary of loan bonds. the Treasury may prescribe in connection with the issue thereof:

(1) Exempt, both as to principal and interest, from all taxation (except estate or inheritance taxes) now or hereafter imposed by the United States, any State, or any of the possessions of the United States, or by any local taxing authority;

(2) Exempt, both as to principal and interest, from all taxation now or hereafter imposed by the United States, any State, or any of the possessions of the United States, or by any local taxing authority, except (a) estate or inheritance taxes, and (b) graduated additional income taxes, commonly known as surtaxes, and excessprofits and war-profits taxes, now or hereafter imposed by the United States, upon the income or profits of individuals, partnerships, associations, or corporations;

(3) Exempt, both as to principal and interest, as provided in paragraph (2); and with an additional exemption from the taxes referred to in clause (b) of such paragraph, of the interest on an amount of such notes the principal of which does not exceed $30,000, owned by any individual, partnership, association, or corporation; or

(4) Exempt, both as to principal and interest, from all taxation now or hereafter imposed by the United States, any State, or any of the possessions of the United States, or by any local taxing authority, except (a) estate or inheritance taxes, and (b) all income, excess-profits, and war-profits taxes, now or hereafter imposed by the United States, upon the income or profits of individuals, partnerships, associations, or corporations.

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interest.

SEC. 2. (a) That until the expiration of five years, Exemption of after the date of the termination of the war between the United States and the German Government, as fixed by proclamation of the President, in addition to the exemptions provided in section 7 of the Second Liberty Bond Act in respect to the interest on an amount of bonds and certificates, authorized by such Act and amendments thereto, the principal of which does not exceed in the aggregate $5,000, and in addition to all other exemptions provided in the Second Liberty Bond Act or the Supplement to Second Liberty Bond Act, the interest received on and after January 1, 1919, on an amount of bonds of the First Liberty Loan Converted, dated November 15, 1917, May 9, 1918, or October 24, 1918, the Second Liberty Loan converted and unconverted, the Third Liberty Loan, and the Fourth Liberty Loan, the principal of which does not exceed $30,000 in

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