HARRY W. NICE, GOVERNOR. 49

to be deducted from the net income upon which the tax is to
be paid by the fiduciary.

(2) The fiduciary shall be responsible for making the return
of income for the estate or trust for which lie acts whether
such income be taxable to the estate or trusts or to the bene-
ficiaries thereof. The net income of an estate or trust shall
be computed in the same manner and on the same basis as
provided in this sub-title for individual taxpayers, except
that there shall also be allowed as a deduction any part of
the gross income which, pursuant to the terms of the will or
deed creating the trust, is during the taxable year paid to or
permanently set aside for the United States, this State or
any political sub-division thereof, or any corporation or asso-
ciation organized and operated in Maryland for religious,
charitable, scientific or educational purposes, no part of the
net earnings of which inures to the benefit of any private
stockholder or individual; and, in cases under paragraphs (d)
and (e) of sub-division (1) of this section, the fiduciary shall
include in the return a statement of each beneficiary's dis-
tributive share of such net income, whether or not distributed
before the close of the taxable year for which return is made.

(3) In cases under paragraphs (a), (b), and (c) of sub-
division (1) of this section, the tax shall be imposed upon
the estate or trust with respect to the net income of the estate
or trust and shall be paid by the fiduciary, except that in
determining the net income of the estate of any deceased
person during the period of administration or settlement there
may be deducted the amount of any income properly paid or
credited to any legatee, heir or other beneficiary. In such
cases, the estate or trust shall be allowed no exemption such
as is allowed to individuals by this sub-title.

(4) In cases under paragraphs (d) and (e) of sub-divi-
sion (1) of this section, if the distribution of income is in the
discretion of the fiduciary, either as to the beneficiaries to,
whom payable or as to the amounts to which any beneficiary
is entitled, the tax shall be imposed upon the estate or trust
in the manner provided in sub-division (3) of this section,
but without the deduction of any amounts of income paid or
credited to any such beneficiary. In all other cases under
paragraphs (d) and (e) of sub-division (1) of this section,
the tax shall not be paid by the fiduciary, but there shall
be included in computing the net income of each beneficiary
his distributive share, whether distributed or not, of the net
income of the estate or trust for the taxable year; or, if his
net income for such taxable year is computed upon the basis
of a period different from that upon the basis of which the
net income of the estate or trust is computed, then his distribu-