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i p .;pril 2, 1952 60-11 Mr. If# R. Rouse: {4} (sc - Mr# Calvin 1, Cory) Please refer to your latter of March 20, 1952, re­questing my opinion on the question asked by Hr* Sutton in his letter to Mr. Stoddard dated March 19, 1952,wheth­er Lea Vegas Mater District ia a political subdivision within the meaning of the pertinent provisions of the In­ternal Revenue Coda* I have given the problem a substan­tial amount of research and thought and have reached some conclusions which may be of assistance* 1 understand the pertinent provisions of the Inter­nal Revenue Code to be Section 23(e )(1), which provides: (23) "In computing net income there shall be allowed aa deductions: (q) "In the case of a corporation, contri-butions or gifts, payment of which is made with­in the taxable year to or for the use of (1) "the United States, any atate, terri­tory or any political subdivision thereof, or the District of Columbia, or any possession of the United States, for exclusively public pur­poses*” The regulations under this section foun^ in Title 26, Code of Federal Regulations, Section 29*23(q)(l) do not de­fine "political subdivision", but refer to the regulations under Section 22(b)(4) of the'Internal Revenue Code for such definition* Section 22(b)(4) of the Internal Revenue Code provides in part as follows: (22) "The following items shall not be In­cluded in gross Income and shall be exempt from taxation under this chapter: (b)(4) "interest upon (1) the obligations of a state, territory or any political subdivi­sion thereof, or the District of Columbia*"