CAPITAL-STOCK TAX 

For Year Ending June 30, 1939

------------------------------------------

1939 RETURN Form 707

TREASURY DEPARTMENT 

INTERNAL REVENUE SERVICE

(FOR WASHINGTON USE ONLY)

(FOR USE OF COLLECTORS)

OF

(Collection district)

DOMESTIC CORPORATIONS 

(Chapter 6, Internal Revenue Code, as amended) (Month) (Year)

This return must be filed, in triplicate, and received 

with remittance by the Collector for your district on or 

before the due date. (See instruction 20, page 10.) To be stamped above by Collector, 

(Page) (Line) showing district and date received

1. Name ------------------------------------------------------------------------------------------------------------------------------------------------------- (Print name of corporation, joint-stock company, or association)

----------------------------------------------------------------------------------------------------------------------------------------------------- 2. Address

(The address must be that of the principal place of business. Give “street and number”, “city or town,” and “State”)

3. Incorporated or organized in State of -------------------------------------------- ------------------------- Month Day ------------ Year ----------

4. Was a 1938 capital-stock tax return filed? ---------- Name under which filed. (If different, attach statement explaining fully.) -----------------------

---------------------------------------------------------------------------------------------------------------------------- (District )

5. Date of close of last income-tax year ended prior to July 1, 1939 ------------------------------------------------ Was an income-tax return filed for

that year? ------------ Name under which filed -------------------------------------------------------------------- ---------------------- (District )

----------------------------------------- If the corporation is newly organized and has not established an income-tax year, state date of organization

6. Nature of business in detail-----------------------------------------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------- 7. Name of parent company, if any (District )

8. Name of subsidiary, if any ------------------------------------------------------------ No. shares held (District -------------- )

(If more than one, attach list and state number of shares held by parent; also districts where filed)

DECLARED VALUE OF CAPITAL STOCK

Corporations enumerated in instruction 10 on page 10 must report a definite and unqualified declared value in this block. (See also 

instructions 11 to 13.) (Do not use this block for elective declaration year—see block 10 below.)

9.

PART A PART 13 ADJUSTED VALUE—ELECTIVE DECLARED VALUE ADJUSTED VALUE ELECTIVE DECLARED

Corporations described in instruction 5 on page 9 MUST complete Schedules I and II 

and enter the adjusted value (last item in Schedule I) in Part A of this block. Any 

corporation of this class may elect to declare, and pay tax on, a value in excess of the 

adjusted value. If such election is made, a definite and unqualified value MUST be 

entered in Part B of this block. (See instruc tions 14 and 15.)

OF CAPITAL STOCK VALUE OF

10. CAPITAL STOCK

(Last item of Schedule I, (Any amount declared below must 

be in excess of adjusted value 

disclosed by Schedule I)

page 2)

$ $ ------------------------ -------------------------

Corporation exempt from income tax under section 101, Internal Revenue Code. Furnish information required by instruction 17.

Insurance company subject to tax under section 201, 204, or 207, Internal Revenue Code.State which section

Corporation not doing business. Furnish information required by instruction 19.

COMPUTATION OF TAX FOR USE OF TAXPAYER FOR USE OF DEPARTMENT

12. Taxable value reported in item 9 or 10 $

13. Tax at rate of $1 for each full $ 1,000 in item 12 (omit cents) x x x x x x x x

14. Penalty of percent for delinquency in filing return

15. Interest at 6 percent per annum

16. Total tax, penalty, and interest

-------------------------------

We, the undersigned (Name of president, vice president, or other principal officer) (Title)

and , , of the corporation for which this

(Name of treasurer, assistant treasurer, or chief accounting officer) (Title)

return is made, being severally duly sworn, each for himself deposes and says that this return, including any accompanying schedules and statements, 

has been examined by him and is, to the best of his knowledge and belief, a true and complete return, made in good faith, for the taxable year stated, 

pursuant to Chapter 6, Internal Revenue Code, and Regulations 64 (1938 edition).

Sworn to and subscribed before me this day of ----------------- -------------------------- ---- , 19

------------------------------------------ ------------------------------------------ (Signature of officer administering oath) (Signature) (Title)

------------------------------------------ ---------------------------------- (Official capacity) (Signature) (Title) 2-17953 PAGE 1

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-------------------------------------------------------------------- $ --------------------------

11. EXEMPTIONS.—The law provides for exemption from the tax only on the grounds indicated below. Corporations claiming exemption must (1) 

complete block 9 or 10 above whichever is applicable, (2) check the appropriate block below, and (3) submit with the return the evidence 

specified under the block checked.

----------------------------------------

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-----------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------------------------------------------

$ ----------------------------------------- -----------------------------------------

--------------------------------

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-------------------------------------------------------------------------------------------------- , -------------------------------------

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NOTARIAL

SEAL

CORPORATE

SEAL

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The schedules on this page must be completed by every corporation which established a declared value in its capital stock tax return for the

year ended June 30, 1938, even though, under section 1202 (e) of the Code, as amended, the corporation elects to make a new declared 

value. See instructions 5 to 9, inclusive, 14, and 15.

SCHEDULE I. STATUTORY ADJUSTMENTS FOR TRANSACTIONS DURING INCOME-TAX YEAR ENDED

DECEMBER 31, 1938, OR INCOME-TAX FISCAL YEAR ENDED ---------------------------------, 19 -----

Declared value established by the return for the taxable year ended June 30, 1938 ------------------------------------------------- $ ----------------------- Additions:

A. (1) Total cash paid in for stock or shares (see instruction 7, item A) ----------------------------- $

(2) Fair market value of all property paid in for stock or shares (see instruction 7,

------------------------------------------------------------------------------------- item A)

B. Paid-in surplus and contributions to capital (see instruction 7, item B) --------------------------

C. Net income (if net loss, enter as item 3) (see instruction 7, item C) ------------------------------

D. Income wholly exempt from Federal income tax (see instruction 7, item D) 

E. Excess, if any, of deduction for depletion over the amount which would be allowable if computed without regard to discovery value or to percentage depletion under section

114 (b) (2), (3), or (4) of the 1936 or 1938 Act (see instruction 7, item E) -------------------

Total additions ------------------------------------------------------------------------------------------------------- -------------------------

TOTAL BEFORE DEDUCTIONS ---------------------------------------------------------------------------------- $ ----------------------- Deductions:

------------------------------ ----------------------- 1. (a) Total cash distributed to shareholders (see instruction 7, item 1) $

(b) Fair market value of all property distributed to shareholders (see instruction 7,

--------------------------------------------------------------------------------------- item 1)

2. Amount disallowed as deduction by section 24 (a) (5) of 1936 or 1938 Act (see instruction

------------------------------------------------------------------------------------ 7, item 2)

3. Excess of deductions allowable over gross income and claimed on income-tax return

------------------------------------------------------------------- (see instruction 7, item 3)

Total deductions ------------------------------------------------------------------------------------------------- ------------------------

-------------------------------------------------- ---------------------- ADJUSTED VALUE (enter in Part A of block 10, page 1) $

SCHEDULE II. ANALYSIS OF CHANGES IN CAPITAL STOCK AND SURPLUS

(See instruction 8, page 10)

Capital Stock and Surplus at beginning of year Deductions—Capital transactions

----------------------- 12. Distributions to shareholders (items 1 (a) 1. Capital stock: Preferred $ and (b), Schedule I*):

----------------------- Common (a) Earnings or profits $

--------------------- 2. Capital or paid-in surplus (b) Liquidating

3. Surplus reserves (c) Other

----------------- 13. Enter class and amount of distributions in 

 corporation's own stock: 4. Surplus and undivided profits

Additions—Capital transactions $ x x x x x 5. Total cash and fair market value of prop- 14. Other deductions (to be detailed) erty paid in for stock or shares (total of

items A (1) and A (2), Schedule I) *

6. Paid-in surplus and contributions to capital (item B, Schedule I) * Deductions—Revenue transactions

7. Other additions (to be detailed) 15. Excess of deductions allowable over gross income and claimed on income-tax

return (item 3, Schedule I)

16. Deductions disallowed by sec. 24 (a) (5),

1936 or 1938 Act (item 2, Schedule I)

17. Other deductions (to be detailed)

Additions—Revenue transactions

8. Net income (item C, Schedule I)

9. Income wholly exempt from income tax (item D, Schedule I)

10. Excess of deduction for depletion (same as item E, Schedule I) Capital Stock and Surplus at end of year

11. Other additions (to be detailed) 18. Capital stock: Preferred

Common

19. Capital or paid-in surplus

20. Surplus reserves

21. Surplus and undivided profits

TOTAL

* Enter values sbown by the books and, if different from values entered in Schedule I, explain difference.

PAGE 2

2-17953

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--------------------------------- ---------------------- TOTAL $ $
CAPITAL-STOCK TAX 

For Year Ending June 30, 1939

1939 RETURN Form 707

TREASURY DEPARTMENT 

INTERNAL REVENUE SERVICE

(FOR WASHINGTON USE ONLY)

(FOR USE OF COLLECTORS)

OF

(Collection district)

DOMESTIC CORPORATIONS 

(Chapter 6, Internal Revenue Code, as amended) (Month) (Year)

This return must be filed, in triplicate, and received 

with remittance by the Collector for your district on or 

before the due date. (See instruction 20, page 10.) To be stamped above by Collector, 

(Page) (Line) showing district and date received

1. Name ------------------------------------------------------------------------------------------------------------------------------------------------------- (Print name of corporation, joint-stock company, or association)

----------------------------------------------------------------------------------------------------------------------------------------------------- 2. Address

(The address must be that of the principal place of business. Give “street and number”, “city or town,” and “State”)

3. Incorporated or organized in State of -------------------------------------------- ------------------------- Month Day ------------ Year ----------

4. Was a 1938 capital-stock tax return filed? ---------- Name under which filed. (If different, attach statement explaining fully.) -----------------------

---------------------------------------------------------------------------------------------------------------------------- (District )

5. Date of close of last income-tax year ended prior to July 1, 1939 ------------------------------------------------ Was an income-tax return filed for

that year? ------------ Name under which filed -------------------------------------------------------------------- ---------------------- (District )

----------------------------------------- If the corporation is newly organized and has not established an income-tax year, state date of organization

6. Nature of business in detail-----------------------------------------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------- 7. Name of parent company, if any (District )

8. Name of subsidiary, if any ------------------------------------------------------------ No. shares held (District -------------- )

(If more than one, attach list and state number of shares held by parent; also districts where filed)

DECLARED VALUE OF CAPITAL STOCK

Corporations enumerated in instruction 10 on page 10 must report a definite and unqualified declared value in this block. (See also 

instructions 11 to 13.) (Do not use this block for elective declaration year—see block 10 below.)

9.

PART A PART 13 ADJUSTED VALUE—ELECTIVE DECLARED VALUE ADJUSTED VALUE ELECTIVE DECLARED

Corporations described in instruction 5 on page 9 MUST complete Schedules I and II 

and enter the adjusted value (last item in Schedule I) in Part A of this block. Any 

corporation of this class may elect to declare, and pay tax on, a value in excess of the 

adjusted value. If such election is made, a definite and unqualified value MUST be 

entered in Part B of this block. (See instruc tions 14 and 15.)

OF CAPITAL STOCK VALUE OF

10. CAPITAL STOCK

(Last item of Schedule I, (Any amount declared below must 

be in excess of adjusted value 

disclosed by Schedule I)

page 2)

$ $ ------------------------ -------------------------

Corporation exempt from income tax under section 101, Internal Revenue Code. Furnish information required by instruction 17.

Insurance company subject to tax under section 201, 204, or 207, Internal Revenue Code.State which section

Corporation not doing business. Furnish information required by instruction 19.

COMPUTATION OF TAX FOR USE OF TAXPAYER FOR USE OF DEPARTMENT

12. Taxable value reported in item 9 or 10 $

13. Tax at rate of $1 for each full $ 1,000 in item 12 (omit cents) x x x x x x x x

14. Penalty of percent for delinquency in filing return

15. Interest at 6 percent per annum

16. Total tax, penalty, and interest

-------------------------------

2-17953 PAGE 3

----------------------

----------------------

----------------------

-------------------------------------------------------------------- $ --------------------------

11. EXEMPTIONS.—The law provides for exemption from the tax only on the grounds indicated below. Corporations claiming exemption must (1) 

complete block 9 or 10 above whichever is applicable, (2) check the appropriate block below, and (3) submit with the return the evidence 

specified under the block checked.

----------------------------------------

------------------------------------------------------

-----------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------------------------------------------

$ ----------------------------------------- -----------------------------------------

--------------------------------

-------------------------------------------

-------------------------------------------

----------------------------------------------

----------------------------------------------

----------------------------------------------

--------------------------------

------
-------------------------

The schedules on this page must be completed by every corporation which established a declared value in its capital stock tax return for the

year ended June 30, 1938, even though, under section 1202 (e) of the Code, as amended, the corporation elects to make a new declared 

value. See instructions 5 to 9, inclusive, 14, and 15.

SCHEDULE I. STATUTORY ADJUSTMENTS FOR TRANSACTIONS DURING INCOME-TAX YEAR ENDED

DECEMBER 31, 1938, OR INCOME-TAX FISCAL YEAR ENDED ---------------------------------, 19 -----

Declared value established by the return for the taxable year ended June 30, 1938 ------------------------------------------------- $ ----------------------- Additions:

A. (1) Total cash paid in for stock or shares (see instruction 7, item A) ----------------------------- $

(2) Fair market value of all property paid in for stock or shares (see instruction 7,

------------------------------------------------------------------------------------- item A)

B. Paid-in surplus and contributions to capital (see instruction 7, item B) --------------------------

C. Net income (if net loss, enter as item 3) (see instruction 7, item C) ------------------------------

D. Income wholly exempt from Federal income tax (see instruction 7, item D) 

E. Excess, if any, of deduction for depletion over the amount which would be allowable if computed without regard to discovery value or to percentage depletion under section

114 (b) (2), (3), or (4) of the 1936 or 1938 Act (see instruction 7, item E) -------------------

Total additions ------------------------------------------------------------------------------------------------------- -------------------------

TOTAL BEFORE DEDUCTIONS ---------------------------------------------------------------------------------- $ ----------------------- Deductions:

------------------------------ ----------------------- 1. (a) Total cash distributed to shareholders (see instruction 7, item 1) $

(b) Fair market value of all property distributed to shareholders (see instruction 7,

--------------------------------------------------------------------------------------- item 1)

2. Amount disallowed as deduction by section 24 (a) (5) of 1936 or 1938 Act (see instruction

------------------------------------------------------------------------------------ 7, item 2)

3. Excess of deductions allowable over gross income and claimed on income-tax return

------------------------------------------------------------------- (see instruction 7, item 3)

Total deductions ------------------------------------------------------------------------------------------------- ------------------------

-------------------------------------------------- ---------------------- ADJUSTED VALUE (enter in Part A of block 10, page 1) $

SCHEDULE II. ANALYSIS OF CHANGES IN CAPITAL STOCK AND SURPLUS

(See instruction 8, page 10)

Capital Stock and Surplus at beginning of year Deductions—Capital transactions

----------------------- 12. Distributions to shareholders (items 1 (a) 1. Capital stock: Preferred $ and (b), Schedule I*):

----------------------- Common (a) Earnings or profits $

--------------------- 2. Capital or paid-in surplus (b) Liquidating

3. Surplus reserves (c) Other

----------------- 13. Enter class and amount of distributions in 

 corporation's own stock: 4. Surplus and undivided profits

Additions—Capital transactions $ x x x x x 5. Total cash and fair market value of prop- 14. Other deductions (to be detailed) erty paid in for stock or shares (total of

items A (1) and A (2), Schedule I) *

6. Paid-in surplus and contributions to capital (item B, Schedule I) * Deductions—Revenue transactions

7. Other additions (to be detailed) 15. Excess of deductions allowable over gross income and claimed on income-tax

return (item 3, Schedule I)

16. Deductions disallowed by sec. 24 (a) (5),

1936 or 1938 Act (item 2, Schedule I)

17. Other deductions (to be detailed)

Additions—Revenue transactions

8. Net income (item C, Schedule I)

9. Income wholly exempt from income tax (item D, Schedule I)

10. Excess of deduction for depletion (same as item E, Schedule I) Capital Stock and Surplus at end of year

11. Other additions (to be detailed) 18. Capital stock: Preferred

Common

19. Capital or paid-in surplus

20. Surplus reserves

21. Surplus and undivided profits

TOTAL

* Enter values sbown by the books and, if different from values entered in Schedule I, explain difference.

PAGE 4

2-17953

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--------------------------------- ---------------------- TOTAL $ $
CAPITAL-STOCK TAX 

For Year Ending June 30, 1939

1939 RETURN Form 707

TREASURY DEPARTMENT 

INTERNAL REVENUE SERVICE

(FOR WASHINGTON USE ONLY)

(FOR USE OF COLLECTORS)

OF

(Collection district)

DOMESTIC CORPORATIONS 

(Chapter 6, Internal Revenue Code, as amended) (Month) (Year)

This return must be filed, in triplicate, and received 

with remittance by the Collector for your district on or 

before the due date. (See instruction 20, page 10.) To be stamped above by Collector, 

(Page) (Line) showing district and date received

1. Name ------------------------------------------------------------------------------------------------------------------------------------------------------- (Print name of corporation, joint-stock company, or association)

----------------------------------------------------------------------------------------------------------------------------------------------------- 2. Address

(The address must be that of the principal place of business. Give “street and number”, “city or town,” and “State”)

3. Incorporated or organized in State of -------------------------------------------- ------------------------- Month Day ------------ Year ----------

4. Was a 1938 capital-stock tax return filed? ---------- Name under which filed. (If different, attach statement explaining fully.) -----------------------

---------------------------------------------------------------------------------------------------------------------------- (District )

5. Date of close of last income-tax year ended prior to July 1, 1939 ------------------------------------------------ Was an income-tax return filed for

that year? ------------ Name under which filed -------------------------------------------------------------------- ---------------------- (District )

----------------------------------------- If the corporation is newly organized and has not established an income-tax year, state date of organization

6. Nature of business in detail-----------------------------------------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------- 7. Name of parent company, if any (District )

8. Name of subsidiary, if any ------------------------------------------------------------ No. shares held (District -------------- )

(If more than one, attach list and state number of shares held by parent; also districts where filed)

DECLARED VALUE OF CAPITAL STOCK

Corporations enumerated in instruction 10 on page 10 must report a definite and unqualified declared value in this block. (See also 

instructions 11 to 13.) (Do not use this block for elective declaration year—see block 10 below.)

9.

PART A PART 13 ADJUSTED VALUE—ELECTIVE DECLARED VALUE ADJUSTED VALUE ELECTIVE DECLARED

Corporations described in instruction 5 on page 9 MUST complete Schedules I and II 

and enter the adjusted value (last item in Schedule I) in Part A of this block. Any 

corporation of this class may elect to declare, and pay tax on, a value in excess of the 

adjusted value. If such election is made, a definite and unqualified value MUST be 

entered in Part B of this block. (See instruc tions 14 and 15.)

OF CAPITAL STOCK VALUE OF

10. CAPITAL STOCK

(Last item of Schedule I, (Any amount declared below must 

be in excess of adjusted value 

disclosed by Schedule I)

page 2)

$ $ ------------------------ -------------------------

Corporation exempt from income tax under section 101, Internal Revenue Code. Furnish information required by instruction 17.

Insurance company subject to tax under section 201, 204, or 207, Internal Revenue Code.State which section

Corporation not doing business. Furnish information required by instruction 19.

COMPUTATION OF TAX FOR USE OF TAXPAYER FOR USE OF DEPARTMENT

12. Taxable value reported in item 9 or 10 $

13. Tax at rate of $1 for each full $ 1,000 in item 12 (omit cents) x x x x x x x x

14. Penalty of percent for delinquency in filing return

15. Interest at 6 percent per annum

16. Total tax, penalty, and interest

-------------------------------

2-17953 PAGE 5

----------------------

----------------------

----------------------

-------------------------------------------------------------------- $ --------------------------

11. EXEMPTIONS.—The law provides for exemption from the tax only on the grounds indicated below. Corporations claiming exemption must (1) 

complete block 9 or 10 above whichever is applicable, (2) check the appropriate block below, and (3) submit with the return the evidence 

specified under the block checked.

----------------------------------------

------------------------------------------------------

-----------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------------------------------------------

$ ----------------------------------------- -----------------------------------------

--------------------------------

-------------------------------------------

-------------------------------------------

----------------------------------------------

----------------------------------------------

----------------------------------------------

--------------------------------

------
-------------------------

The schedules on this page must be completed by every corporation which established a declared value in its capital stock tax return for the

year ended June 30, 1938, even though, under section 1202 (e) of the Code, as amended, the corporation elects to make a new declared 

value. See instructions 5 to 9, inclusive, 14, and 15.

SCHEDULE I. STATUTORY ADJUSTMENTS FOR TRANSACTIONS DURING INCOME-TAX YEAR ENDED

DECEMBER 31, 1938, OR INCOME-TAX FISCAL YEAR ENDED ---------------------------------, 19 -----

Declared value established by the return for the taxable year ended June 30, 1938 ------------------------------------------------- $ ----------------------- Additions:

A. (1) Total cash paid in for stock or shares (see instruction 7, item A) ----------------------------- $

(2) Fair market value of all property paid in for stock or shares (see instruction 7,

------------------------------------------------------------------------------------- item A)

B. Paid-in surplus and contributions to capital (see instruction 7, item B) --------------------------

C. Net income (if net loss, enter as item 3) (see instruction 7, item C) ------------------------------

D. Income wholly exempt from Federal income tax (see instruction 7, item D) 

E. Excess, if any, of deduction for depletion over the amount which would be allowable if computed without regard to discovery value or to percentage depletion under section

114 (b) (2), (3), or (4) of the 1936 or 1938 Act (see instruction 7, item E) -------------------

Total additions ------------------------------------------------------------------------------------------------------- -------------------------

TOTAL BEFORE DEDUCTIONS ---------------------------------------------------------------------------------- $ ----------------------- Deductions:

------------------------------ ----------------------- 1. (a) Total cash distributed to shareholders (see instruction 7, item 1) $

(b) Fair market value of all property distributed to shareholders (see instruction 7,

--------------------------------------------------------------------------------------- item 1)

2. Amount disallowed as deduction by section 24 (a) (5) of 1936 or 1938 Act (see instruction

------------------------------------------------------------------------------------ 7, item 2)

3. Excess of deductions allowable over gross income and claimed on income-tax return

------------------------------------------------------------------- (see instruction 7, item 3)

Total deductions ------------------------------------------------------------------------------------------------- ------------------------

-------------------------------------------------- ---------------------- ADJUSTED VALUE (enter in Part A of block 10, page 1) $

SCHEDULE II. ANALYSIS OF CHANGES IN CAPITAL STOCK AND SURPLUS

(See instruction 8, page 10)

Capital Stock and Surplus at beginning of year Deductions—Capital transactions

----------------------- 12. Distributions to shareholders (items 1 (a) 1. Capital stock: Preferred $ and (b), Schedule I*):

----------------------- Common (a) Earnings or profits $

--------------------- 2. Capital or paid-in surplus (b) Liquidating

3. Surplus reserves (c) Other

----------------- 13. Enter class and amount of distributions in 

 corporation's own stock: 4. Surplus and undivided profits

Additions—Capital transactions $ x x x x x 5. Total cash and fair market value of prop- 14. Other deductions (to be detailed) erty paid in for stock or shares (total of

items A (1) and A (2), Schedule I) *

6. Paid-in surplus and contributions to capital (item B, Schedule I) * Deductions—Revenue transactions

7. Other additions (to be detailed) 15. Excess of deductions allowable over gross income and claimed on income-tax

return (item 3, Schedule I)

16. Deductions disallowed by sec. 24 (a) (5),

1936 or 1938 Act (item 2, Schedule I)

17. Other deductions (to be detailed)

Additions—Revenue transactions

8. Net income (item C, Schedule I)

9. Income wholly exempt from income tax (item D, Schedule I)

10. Excess of deduction for depletion (same as item E, Schedule I) Capital Stock and Surplus at end of year

11. Other additions (to be detailed) 18. Capital stock: Preferred

Common

19. Capital or paid-in surplus

20. Surplus reserves

21. Surplus and undivided profits

TOTAL

* Enter values sbown by the books and, if different from values entered in Schedule I, explain difference.

PAGE 6

2-17953

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--------------------------------- ---------------------- TOTAL $ $
CAPITAL-STOCK TAX 

For Year Ending June 30, 1939

1939 RETURN Form 707

TREASURY DEPARTMENT 

INTERNAL REVENUE SERVICE

(FOR WASHINGTON USE ONLY)

(FOR USE OF COLLECTORS)

OF

(Collection district)

DOMESTIC CORPORATIONS 

(Chapter 6, Internal Revenue Code, as amended) (Month) (Year)

This return must be filed, in triplicate, and received 

with remittance by the Collector for your district on or 

before the due date. (See instruction 20, page 10.) To be stamped above by Collector, 

(Page) (Line) showing district and date received

1. Name ------------------------------------------------------------------------------------------------------------------------------------------------------- (Print name of corporation, joint-stock company, or association)

----------------------------------------------------------------------------------------------------------------------------------------------------- 2. Address

(The address must be that of the principal place of business. Give “street and number”, “city or town,” and “State”)

3. Incorporated or organized in State of -------------------------------------------- ------------------------- Month Day ------------ Year ----------

4. Was a 1938 capital-stock tax return filed? ---------- Name under which filed. (If different, attach statement explaining fully.) -----------------------

---------------------------------------------------------------------------------------------------------------------------- (District )

5. Date of close of last income-tax year ended prior to July 1, 1939 ------------------------------------------------ Was an income-tax return filed for

that year? ------------ Name under which filed -------------------------------------------------------------------- ---------------------- (District )

----------------------------------------- If the corporation is newly organized and has not established an income-tax year, state date of organization

6. Nature of business in detail-----------------------------------------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------- 7. Name of parent company, if any (District )

8. Name of subsidiary, if any ------------------------------------------------------------ No. shares held (District -------------- )

(If more than one, attach list and state number of shares held by parent; also districts where filed)

DECLARED VALUE OF CAPITAL STOCK

Corporations enumerated in instruction 10 on page 10 must report a definite and unqualified declared value in this block. (See also 

instructions 11 to 13.) (Do not use this block for elective declaration year—see block 10 below.)

9.

PART A PART 13 ADJUSTED VALUE—ELECTIVE DECLARED VALUE ADJUSTED VALUE ELECTIVE DECLARED

Corporations described in instruction 5 on page 9 MUST complete Schedules I and II 

and enter the adjusted value (last item in Schedule I) in Part A of this block. Any 

corporation of this class may elect to declare, and pay tax on, a value in excess of the 

adjusted value. If such election is made, a definite and unqualified value MUST be 

entered in Part B of this block. (See instruc tions 14 and 15.)

OF CAPITAL STOCK VALUE OF

10. CAPITAL STOCK

(Last item of Schedule I, (Any amount declared below must 

be in excess of adjusted value 

disclosed by Schedule I)

page 2)

$ $ ------------------------ -------------------------

Corporation exempt from income tax under section 101, Internal Revenue Code. Furnish information required by instruction 17.

Insurance company subject to tax under section 201, 204, or 207, Internal Revenue Code.State which section

Corporation not doing business. Furnish information required by instruction 19.

COMPUTATION OF TAX FOR USE OF TAXPAYER FOR USE OF DEPARTMENT

12. Taxable value reported in item 9 or 10 $

13. Tax at rate of $1 for each full $ 1,000 in item 12 (omit cents) x x x x x x x x

14. Penalty of percent for delinquency in filing return

15. Interest at 6 percent per annum

16. Total tax, penalty, and interest

-------------------------------

2-17953 PAGE 7

----------------------

----------------------

----------------------

-------------------------------------------------------------------- $ --------------------------

11. EXEMPTIONS.—The law provides for exemption from the tax only on the grounds indicated below. Corporations claiming exemption must (1) 

complete block 9 or 10 above whichever is applicable, (2) check the appropriate block below, and (3) submit with the return the evidence 

specified under the block checked.

----------------------------------------

------------------------------------------------------

-----------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------------------------------------------

$ ----------------------------------------- -----------------------------------------

--------------------------------

-------------------------------------------

-------------------------------------------

----------------------------------------------

----------------------------------------------

----------------------------------------------

--------------------------------

------
-------------------------

The schedules on this page must be completed by every corporation which established a declared value in its capital stock tax return for the

year ended June 30, 1938, even though, under section 1202 (e) of the Code, as amended, the corporation elects to make a new declared 

value. See instructions 5 to 9, inclusive, 14, and 15.

SCHEDULE I. STATUTORY ADJUSTMENTS FOR TRANSACTIONS DURING INCOME-TAX YEAR ENDED

DECEMBER 31, 1938, OR INCOME-TAX FISCAL YEAR ENDED ---------------------------------, 19 -----

Declared value established by the return for the taxable year ended June 30, 1938 ------------------------------------------------- $ ----------------------- Additions:

A. (1) Total cash paid in for stock or shares (see instruction 7, item A) ----------------------------- $

(2) Fair market value of all property paid in for stock or shares (see instruction 7,

------------------------------------------------------------------------------------- item A)

B. Paid-in surplus and contributions to capital (see instruction 7, item B) --------------------------

C. Net income (if net loss, enter as item 3) (see instruction 7, item C) ------------------------------

D. Income wholly exempt from Federal income tax (see instruction 7, item D) 

E. Excess, if any, of deduction for depletion over the amount which would be allowable if computed without regard to discovery value or to percentage depletion under section

114 (b) (2), (3), or (4) of the 1936 or 1938 Act (see instruction 7, item E) -------------------

Total additions ------------------------------------------------------------------------------------------------------- -------------------------

TOTAL BEFORE DEDUCTIONS ---------------------------------------------------------------------------------- $ ----------------------- Deductions:

------------------------------ ----------------------- 1. (a) Total cash distributed to shareholders (see instruction 7, item 1) $

(b) Fair market value of all property distributed to shareholders (see instruction 7,

--------------------------------------------------------------------------------------- item 1)

2. Amount disallowed as deduction by section 24 (a) (5) of 1936 or 1938 Act (see instruction

------------------------------------------------------------------------------------ 7, item 2)

3. Excess of deductions allowable over gross income and claimed on income-tax return

------------------------------------------------------------------- (see instruction 7, item 3)

Total deductions ------------------------------------------------------------------------------------------------- ------------------------

-------------------------------------------------- ---------------------- ADJUSTED VALUE (enter in Part A of block 10, page 1) $

SCHEDULE II. ANALYSIS OF CHANGES IN CAPITAL STOCK AND SURPLUS

(See instruction 8, page 10)

Capital Stock and Surplus at beginning of year Deductions—Capital transactions

----------------------- 12. Distributions to shareholders (items 1 (a) 1. Capital stock: Preferred $ and (b), Schedule I*):

----------------------- Common (a) Earnings or profits $

--------------------- 2. Capital or paid-in surplus (b) Liquidating

3. Surplus reserves (c) Other

----------------- 13. Enter class and amount of distributions in 

 corporation's own stock: 4. Surplus and undivided profits

Additions—Capital transactions $ x x x x x 5. Total cash and fair market value of prop- 14. Other deductions (to be detailed) erty paid in for stock or shares (total of

items A (1) and A (2), Schedule I) *

6. Paid-in surplus and contributions to capital (item B, Schedule I) * Deductions—Revenue transactions

7. Other additions (to be detailed) 15. Excess of deductions allowable over gross income and claimed on income-tax

return (item 3, Schedule I)

16. Deductions disallowed by sec. 24 (a) (5),

1936 or 1938 Act (item 2, Schedule I)

17. Other deductions (to be detailed)

Additions—Revenue transactions

8. Net income (item C, Schedule I)

9. Income wholly exempt from income tax (item D, Schedule I)

10. Excess of deduction for depletion (same as item E, Schedule I) Capital Stock and Surplus at end of year

11. Other additions (to be detailed) 18. Capital stock: Preferred

Common

19. Capital or paid-in surplus

20. Surplus reserves

21. Surplus and undivided profits

TOTAL

* Enter values sbown by the books and, if different from values entered in Schedule I, explain difference.

PAGE 8

2-17953

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(a) Domestic corporations.—-For each year ending June 30, beginning with the year ending 

June 30, 1939, there shall be imposed upon every domestic corporation with respect to carrying 

on or doing business for any part of such year an excise tax of $1 for each $1,000 of the 

adjusted declared value of its capital stock.

(1) The adjusted declared value shall be determined with respect to 3-year periods 

beginning with the year ending June 30, 1938, and each third year thereafter. The first year of 

each such 3-year period, or, in case of a corporation not subject to the tax imposed for such 

year, the first year of such 3-year period for which the corporation is subject to such tax, shall 

constitute a “declaration year.”

(2) For the declaration year of the first 3-year period the adjusted declared value shall be 

the value as declared by the corporation in its return under section 601 of the Revenue Act of 

1938, 52 Stat. 565, for the year ended June 30, 1938, or in the case of a corporation not subject 

to the tax imposed for such year, the value as declared in its return filed under this chapter for 

the first year with respect to which it is subject to the tax. For each subsequent 3-year period, 

the adjusted declared value for a declaration year shall be the value as declared by the 

corporation in its return for such declaration year. The value declared by a corporation in its 

return for a declaration year (which declaration of value cannot be amended) shall be as of the 

close of its last income-tax taxable year ending with or prior to the close of such declaration 

year (or as of the date of organization in the case of a corporation having no income-tax taxable 

year ending with or prior to the close of such declaration year).

(a) The taxes imposed by section 1200 shall not apply—

(a) Declaration Year.—

(1) Domestic corporations.—For each year of any 3-year period subsequent to the 

declaration year, the adjusted declared value in the case of a domestic corporation shall be the 

value declared in the return for the declaration year plus—

and minus—

The adjustments provided in this paragraph shall be made for each income-tax taxable year 

included in the 3-year period from the date as of which the value was declared in the return for 

the declaration year to the close of the last income-tax taxable year ending with or prior to the 

close of the year for which the tax is imposed by this section. The amount of such adjustment 

for each such year shall be computed (on the basis of a separate return) according to the 

income-tax law applicable to such year.

(c) Corporations in bankruptcy or receivership.—The capital-stock tax year beginning 

with or within an income-tax taxable year within which bankruptcy or receivership, due to 

insolvency, of a domestic corporation is terminated shall constitute a declaration year. In such 

case the adjusted declared value for any subsequent year of the 3-year period shall be 

determined on the basis of the value declared in the return for such declaration year.

(1) Corporations exempt from income tax.—To any corporation enumerated in section 

101.

(2) Insurance companies.—To any insurance company subject to the tax imposed by 

section 201, 204, or 207.

(b) Common trust funds.—For exemption of common trust funds from the capital-stock 

tax, see section 169 (b) of chapter 1.

(NOTE.—The exemption for common trust funds relates only to a fund maintained by a 

bank.)

SECTION 1201. EXEMPTIONS

LAW

SECTION 1200. TAX

Chapter 6, Internal Revenue Code, As Amended, 

Capital-Stock Tax

* * * * * * *

SECTION 1202. ADJUSTED DECLARED VALUE

 (b) Subsequent years.—

(A) the cash, and the fair market value of property, paid in for stock or shares,

(B) paid-in surplus and contributions to capital, 

(C) its net income,

(D) its income wholly exempt from Federal income tax, and

(E) the amount, if any, by which the deduction for depletion exceeds the amount which 

would be allowable if computed without regard to discovery value or to percentage 

depletion, under section 114 (b) (2), (3), or (4) of chapter 1 or a corresponding section of a 

later Revenue Act;

(i) the cash, and the fair market value of property, distributed to shareholders,

(ii) the amount disallowed as a deduction by section 24 (a) (5) of chapter 1 or a 

corresponding provision of a later Revenue Act, and

(iii) the excess of the deductions allowable for income-tax purposes over its gross 

income.

* * * * * * *

* * * * * * *

(e) Additional declaration years.—In the case of any domestic corporation, the year 

ending June 30, 1939, and the year ending June 30; 1940, shall each, if not otherwise a 

declaration year, constitute an additional declaration year if with respect to such year (1) the 

taxpayer so elects (which election cannot be changed) in its return filed before the expiration of 

the statutory filing period or any authorized extension thereof, and (2) the value declared by the 

taxpayer is in excess of the adjusted declared value computed under paragraph (1) of subsection 

(b). If, under this subsection, the year ending June 30, 1939, is a declaration year, the 

computation, under paragraph (1) of subsection (b), of the adjusted declared value for the year 

ending June 30, 1940, shall be made on the basis of the value declared for the year ending June 

30, 1939.

SECTION 1203. RETURNS

(a) Requirement.—Every corporation liable for tax under section 1200 shall make a return 

under oath. Such return shall contain such information and be made in such manner as the 

Commissioner, with the approval of the Secretary, may by regulations prescribe.

(b) Time for filing:

(1) General rule.—Such return shall be made within 1 month after the close of the year 

with respect to which such tax is imposed.

(2) Extension of time.—The Commissioner may extend the time for making the returns, 

under such rules and regulations as he may prescribe with the approval of the Secretary, but no 

such extension shall be for more than 60 days.

(c) Place for filing.—The return shall be made to the collector for the district in which is 

located the principal place of business of the corporation, or, if it has no principal place of 

business in the United States, then to the collector at Baltimore, Md.

* * * * * * *

SECTION 1205. PAYMENT OF TAX

(a) Time of payment.—The tax shall, without assessment by the Commissioner or notice 

from the collector, be due and payable to the collector before the expiration of the period for 

filing the return.

(b) Extension of time.—The Commissioner may extend the time for paying the taxes 

imposed by section 1200, under such rules and regulations as he may prescribe with the 

approval of the Secretary, but no such extension shall be for more than 60 days.

SECTION 1206. ADDITION TO THE TAX IN CASE OF DELINQUENCY

If the tax is not paid when due, there shall be added as part of the tax interest at the rate of 6 

per centum per annum from the time when the tax became due until paid.

* * * * * * *

Chapter 2, Subchapter B. Excess Profits Tax

SECTION 600. RATE OF TAX

If any corporation is taxable under section 1200 with respect to any year ending June 30, 

there shall be imposed upon its net income for the income-tax taxable year ending after the 

close of such year an excess-profits tax equal to the sum of the following:

6 per centum of such portion of its net income for such income-tax taxable year as is in 

excess of 10 per centum and not in excess of 15 per centum of the adjusted declared value;

12 per centum of such portion of its net income for such income-tax taxable year as is in 

excess of 15 per centum of the adjusted declared value.

* * * * * * *

INSTRUCTIONS

The chapters and sections of the law mentioned throughout these instructions, unless 

otherwise stated, refer to sections of the Internal Revenue Code in which are consolidated all 

internal revenue laws (including section 601 of the Revenue Act of 1938 imposing the 

capital-stock tax) which were in force on the 2nd day of January 1939. The Code was enacted 

February 10, 1939, and is applicable with respect to the capital-stock tax for the year ending 

June 30, 1939. RETURN

1. (a) Every domestic corporation (including an association, common-law trust, and any 

other organization which is required to file income-tax returns as a corporation) which was in 

existence during the period July 1, 1938, to June 30, 1939, or any fractional part thereof, must, 

unless specifically exempted, file a capital-stock tax return in triplicate with the collector for 

the district in which is located its principal place of business. The return must be complete in 

every respect, including either a declared value or an adjusted value. So-called parent and 

subsidiary corporations must each submit a separate return.

(b) If at the time for filing a return all the property of a corporation is in custody of a 

receiver (including a trustee in bankruptcy or other like representative), the return shall be filed 

by the receiver. In such case, if the property of the corporation was under the control of the 

receiver during the entire year July 1, 1938, to June 30, 1939, no value will be required to be 

shown on the return, but, in lieu of such value, the receiver should attach a statement to the 

return showing the date on which the property came into his custody and whether his custody 

was continuous thereafter.

2. For corporations required to compute and report an adjusted value, see instructions under 

the heading “ADJUSTED VALUE.”

3. For corporations required to report a declared value, see instructions under the heading 

“DECLARED VALUE—MANDATORY.” For corporations electing under section 1202 (e) to 

report a new declared value, see instructions under the heading “DECLARED VALUE 

ELECTIVE.”

4. For corporations claiming exemption, see instructions under the heading 

“EXEMPTIONS.”

ADJUSTED VALUE

5. Every corporation created prior to July 1, 1938, which was not granted exemption from 

the capital-stock tax for the year ended June 30, 1938, must compute and report an adjusted 

value on this return, unless by reason of termination of bankruptcy or receivership the 

corporation comes within the rule specified in instruction 10 (c). In the case of a corporation 

electing to establish the year ending June 30, 1939, as an additional declaration year under 

section 1202 (e), the adjusted value must, nevertheless, be computed. (See instructions 14 and 

15.)

6. The adjusted value must be determined by making the adjustments provided for in 

section 1202 (b) (1). The adjustments must be confined to transactions during the income-tax 

taxable year ended subsequent to June 30, 1938, and on or prior to June 30, 1939. Thus, if the 

income-tax return was filed for the calendar year 1938, the adjustments must reflect the 

transactions during that year; whereas, if the income-tax return was filed or is to be filed for a 

fiscal year ended subsequent to June 30, 1938, and prior to July 1, 1939, the adjustments must 

reflect the transactions during such fiscal year. Only adjustments provided for by the law 

reflecting transactions during the applicable income-tax taxable year may be made.

7. The adjusted value must be computed in Schedule I of the return by making the 

following additions to and deductions from the declared value established for the year ended 

June 30, 1938.

ADDITIONS.

Item A. If cash was paid in during the income-tax taxable year for stock or shares of the 

corporation, the total amount of the cash paid in by the stockholders shall be entered as item A 

(1). If a corporation pays a liability by issuing stock therefor, the amount of the liability so paid 

shall be included in item A (1). If property other than cash was received for stock or shares, 

enter as item A (2) the fair market value of such property as of the date paid in and attach a 

statement describing the property and explaining how the value was determined. If property 

was acquired in connection with a reorganization, full particulars as to the corporations 

involved, the plan of reorganization, and other details of the transaction should also be 

submitted.

Item B. If any cash or property was acquired during the income-tax taxable year as paid-in 

surplus or contribution to capital, whether received from shareholders or from others, the total 

amount of the cash and fair market value of the property so acquired will be entered as item B. 

In every instance a statement setting forth substantially the same information as required with 

respect to item A (2) must be submitted.

Item C. If the income-tax return was filed for the calendar year 1938 or for a fiscal year 

ended from January to June, 1939, inclusive, the amount to be entered as item C will be the net 

income as reported under item 30, page 1, of Form 1120 or 1120A. A corporation which filed 

its income-tax return for a fiscal year ended from July to November, 1938, inclusive, and 

therefore used the 1937 return, Form 1120, will enter as its net income under item C the 

amount reported under item 31, Schedule A, page 2, plus any amount entered under item 30 of 

that schedule, since the net income for capital-stock tax purposes includes interest on 

obligations of the United States not exempt from excess-profits tax. In case of a net loss, see 

instructions under “DEDUCTIONS,” item 3.

PAGE 9 2—17953
Item D. The total income received (or accrued if the books are kept on an accrual basis) 

during the applicable income-tax taxable year which is wholly exempt from Federal taxation, 

regardless of its nature and its source, will be entered as item D. The amount entered under this 

item shall include (1) all items excluded from gross income by sections 22 and 116 of the 1936 

or 1938 Act, (2) items which do not constitute income within the meaning of the Sixteenth 

Amendment, and (3) items which are exempt from Federal taxation under the Provisions of any 

Act of Congress not inconsistent with the applicable Revenue Act.

Item E. The amount of depletion claimed as a deduction on the income-tax return less the 

amount which would be allowable if computed without regard to discovery value or percentage 

depletion under section 114 (b) (2), (3), or (4) of the 1936 or 1938 Act will be entered as item 

E. This addition must be made even though such excess is not reflected in the corporate books 

of account.

DEDUCTIONS.

Item 1. The total amount of cash distributed to shareholders during the applicable 

income-tax taxable year will be entered as item 1 (a). If property other than cash was 

distributed to shareholders, enter the fair market value thereof as of the date of distribution as 

item 1 (b) and attach a statement describing the property and explaining how the value was 

determined. The deductions under this item shall include all distributions of earnings or profits, 

whether current or accumulated, all distributions in partial or complete liquidation, and all other 

distributions from capital, but shall not include any payments to shareholders for stock acquired 

for the treasury or for subsequent resale. For the purpose of this deduction, a distribution of 

earnings or profits ordinarily takes effect on the date of the resolution making an unqualified 

declaration of a dividend to the shareholders. The effective date of other distributions depends 

upon the facts and circumstances is the particular case. In support of deductions under this 

item, there must be submitted, in addition to other required evidence, a copy of all resolutions 

authorizing distributions and, if stock was acquired, a statement disclosing the number and 

classes of shares acquired and the dates of acquisition and cancelation.

Item 2. The total amounts disallowed by section 24 (a) (5) of the 1936 or 1938 Act as 

deductions in the computation of net income will be entered as item 2. Deductions disallowed 

by other sections are not to be included. An itemized statement of the amounts included in this 

deduction must be attached.

Item 3. If a net income was not reported on the income-tax return, the excess of the 

deductions allowable and claimed over the amount of gross income (i. e., net loss, item 28, 

Form 1120 or 1120A) will be entered as item 3. Losses and other charges to surplus not 

allowable as deductions, and deductions allowable but not claimed on the income-tax return 

shall not be included.

8. A reconciliation of changes in capital stock and surplus accounts during the income-tax 

taxable year (including the adjustments in Schedule I) must be made by completing Schedule 

II. Any differences between the amounts entered as adjustments in Schedule I and the 

corresponding entries in Schedule II must be explained.

9. All statements attached to the return in support of the adjustments in Schedule I or in 

explanation of the entries in Schedule II should properly identify the items to which related.

DECLARED VALUE—MANDATORY

10. The following corporations are required to report a declared value on this return:

(a) Every corporation created during the year July 1, 1938, to June 30, 1939.

(b) Every corporation created prior to July 1, 1938. which was granted exemption from the 

capital-stock tax for the year ended June 30, 1938.

(c) Every corporation which, during its income-tax taxable year which began on or prior to 

July 1, 1938, and ended on or prior to June 30, 1939, emerged from proceedings in bankruptcy 

or receivership due to insolvency.

 11. A corporation required to report a declared value in this return is not bound by any 

value declared upon a return for a prior year but may exercise unrestricted judgment and 

discretion in determining the value to be declared. In making such determination, consideration 

should be given to the earning power and to the net worth of the organization. Whether it is a 

stock or a nonstock corporation, an association, or other entity, taxable as a corporation, net 

worth includes: (a) The capital paid in for stock, or as capital surplus, or otherwise; (b) surplus, 

surplus reserves, and undivided profits; and (c) all other values, tangible and intangible, which 

enter into the net worth of the organization. However, the declared value is not limited to the 

net worth but may be any amount greater or less than the net worth which the corporation in its 

judgment may elect to declare.

12. Extreme care should be exercised in making a declared value, since under the 

provisions of section 1202 (a) (2) : (a) The value declared for a declaration year cannot be 

changed, amended, or corrected after the close of the filing period or any authorized extension 

thereof; (b) the value is the base for computing the capital-stock tax for this taxable year and 

for computing the adjusted value of the capital stock for the year ending June 30, 1940; and (c) 

the value is a prime factor in determining the excess-profits tax liability under Subchapter B of 

Chapter 2, quoted on page 9.

13. The declared value must be definite and unqualified and must be stated as an amount in 

United States dollars, or as “Zero,” in the event it is intended to make a declaration of no value. 

Statements such as “None,” “No value,” “Deficit,” and similar expressions, or specific amounts 

stated as deficits, will be considered as declarations of “Zero.” The value must be declared as of 

the close of the income-tax taxable year ended subsequent to June 30, 1938, and with or prior 

to June 30, 1939. Thus, if the last income-tax return was made on a calendar year basis, the 

value must be declared as of December 31, 1938; or if the last income-tax return was made on 

the basis of a fiscal year ended subsequent to June 30, 1938, and prior to July 1. 1939, the value 

must be declared as of the close of such fiscal year. In the case of a corporation created during 

the year ended June 30. 1939, which has not established an income-tax taxable year, the value 

must be declared as of the date of organization.

DECLARED VALUE—ELECTIVE

14. Any corporation required to report an adjusted value for the year ending June 30, 1939, 

may elect under section 1202 (e) to establish such year as a declaration year provided (a) such 

election is made in a return filed before the expiration of the filing period or any authorized 

extension thereof, and (b) a value is declared in excess of the adjusted value computed under 

section 1202 (b) (1). Such declared value must be as of the close of the last income-tax taxable 

year ended on or prior to June 30. 1939. In the event of such election, Schedules I and II on 

page 2 mast be completed, the adjusted value entered in Part A of block 10 on page 1 and 

the elective declared value entered in Part B of that block.

15. Extreme care should be exercised in making the election to declare a value and in 

determining the amount to be declared, since under the provisions of the law: (a) The election 

to declare may not be changed and the value declared may not be amended or corrected after 

the close of filing period or any authorized extension thereof; (b) the value declared will be the 

measure of the capital-stock tax for this taxable year and the base for computing the adjusted 

value of the capital stock for the year ending June 30, 1940; and (c) such value will be a prime 

factor in determining the excess-profits tax liability under Subchapter B of Chapter 2. (See 

page 9.)

16. Corporations claiming exemption from the capital-stock tax.—Three classes of 

corporations (or organizations) are entitled to exemption from the capital-stock tax: (1) 

Corporations enumerated in section 101; (2) insurance companies subject to income tax under 

section 201, 204, or 207; and (3) corporations not carrying on or doing business at any time 

during the period July 1, 1938, to June 30, 1939.

EXEMPTIONS

17. Exemption as a corporation enumerated in section 101.—The exemption from the 

capital-stock tax under section 1201 (a) (1) as a corporation enumerated in section 101 must be 

established by an official ruling, unless already established. For that purpose a capital-stock tax 

return must be filed, complete in all respects, including a declared value or an adjusted value, 

or both (see instructions 1, 5, 10, 14 and 15), and specifying the subsection of section 101 

under which exemption is claimed. The return must be accompanied by evidence that the 

corporation is, in fact, within the exempted class specified. As a part of such evidence, the 

corporation must file with the return a statement setting forth (1) the character of the 

organization, (2) the purpose for which it was organized, (3) its actual activities, (4) the sources 

of its income and the disposition thereof, (5) whether or not any of its income is credited to 

surplus or may inure to the benefit of any private shareholder or individual, and (6) in general 

all facts relating to its operations which affect its right to exemption. There must also be 

attached to the return a copy of (1) the charter or articles of incorporation, (2) the bylaws of the 

corporation, and (3) the latest financial statement showing the assets, liabilities, receipts, and 

disbursements, properly itemized. Original documents, such as leases, charters, bylaws, etc., 

should not be submitted as all evidence becomes a part of the records of the Bureau and, under 

the rules of the Department, may not be returned. The corporation, if a farmers' cooperative 

association, should also submit Questionnaire Form 1028 or, if a domestic building and loan 

association, Questionnaire Form 1027, and furnish all of the information required therein. 

Copies of the proper form may be secured from the collector. Since exemption from the 

capital-stock tax is dependent upon exemption from filing Federal income-tax returns, 

reference is made to the pertinent provisions of the Regulations relating to the income tax for 

more detailed information in regard to the evidence required in such cases. If, however, the 

corporation has received a letter from the Commissioner exempting it from filing Federal 

income-tax returns, submit a copy of such letter in lieu of the foregoing evidence.

 18. Exemption as an insurance company.—Exemption from the capital-stock tax under 

section 1201 (a) (2) as an insurance company subject to the tax imposed by section 201, 204, or 

207 must be established by an official ruling. For that purpose a capital-stock tax return, 

complete in all respects, including a declared value or an adjusted value, or both (see 

instructions 1, 5, 10, 14, and 15), must be filed. The return must state the section under which 

the corporation is subject to income tax.

 19. Exemption as not doing business.—A corporation which claims exemption on the 

ground that it was not carrying on or doing business at any time during the year ended June 30, 

1939, must file a return, complete in all respects, including a declared value or an adjusted 

value, or both (see instructions 1, 5, 10, 14, and 15), even though exemption was allowed for 

the previous taxable year. In every instance the claim for exemption must be supported by an 

affidavit of one of the responsible officers having knowledge of the facts, in which the 

following information must be set forth:

(a) A general statement of the operations prior to July 1, 1938, and a detailed statement of 

the operations for the period July 1, 1938, to June 30, 1939. The latter statement must be 

complete and show all transactions such as purchases, orders, commitments, sales, agreements, 

contracts (including contracts of employment), acquisitions of property for stock of the 

corporation, etc.

(b) A detailed statement of the receipts and disbursements by or on behalf of the 

corporation for the period July 1, 1938, to June 30, 1939.

(c) A comparative detailed statement of the assets and liabilities as of June 30, 1938, and 

June 30, 1939, respectively, with a full explanation of the changes reflected by the comparative 

statement. The explanation should include the exchange of any assets not disclosed by this 

statement.

(d) Copies of the minutes of all meetings of the stockholders and of the board of directors 

held during the year ended June 30, 1939, and of all reports made by an executive or other 

standing committee, or any governing body.

(e) If exemption is claimed as a new corporation which did not engage in business activities 

prior to July 1, 1939, submit the information required under. (a), (b), and (d) for the period 

between date of incorporation and June 30, 1989, and in addition furnish (1) an excerpt from 

the charter setting forth the corporate powers, and (2) a statement of assets and liabilities as of 

June 30, 1939.

Originals of such documents as leases, charters, bylaws, etc., should not be submitted as 

evidence to support a claim for exemption since all evidence becomes a part of the records of 

the Bureau and, under the rules of the Department, may not to returned.

GENERAL

20. Penalties and interest.—Failure to file a return on or before July 31, 1939 (or before 

the expiration of a period of extension), causes to accrue the following graduated scale of 

penalties: 6 percent of the amount of the tax if the failure is for not more than 30 days, with an 

additional 5 percent for each additional 30 days, or fraction thereof, during which failure 

continued. Such penalties may not, however, exceed 25 percent in the aggregate. Failure to pay 

the tax on or before the due date causes to accrue interest at the rate of 6 percent per annum 

until paid. Failure to pay within 10 days after the issuance of notice and demand, based on 

assessment approved by the Commissioner, causes to accrue a penalty of 5 percent of the total 

assessment and interest at the rate of 6 percent per annum on the entire assessment from the 

date of issuance of notice and demand until date of payment. Severe penalties for willful failure 

to pay tax, keep records, file returns, or for false or fraudulent returns are imposed by law.

21. Signatures and verification.—The return must be signed and verified under oath or 

affirmation by at least one of the responsible officers of the corporation. Execution by two 

officers, the president, vice president, or other executive officer, and the treasurer, assistant 

treasurer, or chief accounting officer, is, however, preferred. If at the time the return is required 

to be filed a receiver or trustee in bankruptcy is operating the property or business of the 

corporation, such officer shall execute the return of such corporation.

U. S. G0VERNMENT PRINTING OFFICE 2—17953

PAGE 10