New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1895-03-10
INCOME TAX RULINGS.
COME RECENT DECISIONS BY THE TREAS
URY DEPARTMENT.
.,, SORTS OF EMBARRASSING QUESTIONS PUT
TO THE OFFICIALS TAX IN THE

To THE OrF1C.IALS-THE TAA IN ihE
DISTRICT OF COLUMBIA.
tsv TELEGRAPH TO THE TRIBuNE'I
u...hioo,or March ALI sorts OF embarrassing
ouos,ions are presented TO the treasury Depa'V
ment in regard to the operations y, '"e -,
law The following. are some VI INC ''O'N' '"'7'
of the Department on TINS su"'e0' -
VI w - i1an. NJ corporations cannot under the
49,. from, their income as business expenses
GOV .Aor,Jss assessments paid by them TO the cor
VI o.ne, % make good deficiency in the capital
pp,, ~ the reserve fund of said corporation.
-, -, of a person TO his grandchfid or 10 any
- 9erson not member of his family is not
u,.ahIe deduction in the first instance from
49, i,cop,e Of the person who gave the same, and
:, d therefore subject TO taxation in his hands
Tho nerson who receives the same receives clearly
os a gift and II such gift with his other sources
Of income places his income above the taxable limit
he is liable to tax upon all the excess above said
limit.
II a father pays tax upon his income and the In
come OF all the members of his family. the amount
OF his gift allowance to minor child should
not escape taxation, whether computed while In
the hands OF the father or by him in making re-
turn for the aggregate income OF all the members
OF his family.
Profits realized from the sale Of stocks or other
personal property made prior TO the year 1894 ana
profits from all business transactions mace p'io'
TO said year. not TO be treated as taxaoie III
Losses sustained by exchange Of real estate mus
IN all instances be estna losses while the prop
erty remains in the hands OF the Original pai''''
and are therefore not deductable from lncohle
Profits and losses arising from sales OF reai es-
tate purchased prior 10 December o. lo'- N'''''0
considered in any income return
Tho Instruction as TO the income return by trus-
+eas must be held to mean. as it states. that the
sum received from trustees by the oenehciarles
should not be returned as taxable income Inc
same should be- however, noted as income or oe-
ducted as an amount upon which the tax has al
ready been paid The instruction refers practically
10 cases OF benefciaries who have income In addi-
ton to that received from a trustee. ana is IN
tended to prevent escape OF income from taxation
No deduction can be allowed for rent paid for
residence where persons live in rented houses The
exemption OF $500 is clearly intended to cover
such expenses.
When a husband engaged in business .sustains
losses in excess of his income, he cannot for the
purpose Of evadng the income t2x include the
separate income of his wife part OF said losses
When the wife has separate estate producing an
income above the taxable limit under her control
she must make a return OF the same and of the
profits derived therefrom, without regard TO the
business losses of her husband
1t is estimated that there more people whose
annual incomes exceed the 5000 limit residing with
in the bounds OF the zen miles square constituting
the National Capital. than in any other locality OF
similar dimensions in the United States. Not the
least of these numerically the officials of the
Federal Government Chief in this class is the
President of the United States. He Will be taxed
al the rate of per cent $4,000 representing his
official salary minus the deduction OF A,ON, and al
the same rate on his private income from rents, In
vestments. etc. in addition. All the members or
the Cabinet. Justices of the supreme Court, the
higher officers of the Army and Navy stationed IN
this city many of the Federal bureau officers. the
District Commissioners. the members OF the Dis
trict Judiciary. the Court of Claims and not few
subordinate officials who, by Judcious investments.
are in receipt of taxable incomes, are liable TO the
Members OF Congress X.
the collections from them will probably be made at
their homes.
There is evidently hitch over the selection
OF an income tax collector for the District OF CO.
lumbia. The appointment IL vested in Collector
Vandver, whose district embraces the States OF
Maryland and Delaware and the District OF Column
ba. Under the recent act OF Congress making spe-
cial provision for the appointment OF over goo add
come five assistants were allotted TO Collector
Vandiver by the Secretary OF the Treasury. Al
though the assignment TO localities was left In all
jacit understanding that one at least OF the addi-
tional deputies allowed TO Collector Nandiver would
ne specially assigned to the District OF Columbia.
been extended until April 10 next and yet Collector
Nandiver has already received a number OF them
At his suggestion all returns from residents OF his
district filed at the Treasury Department have been
has been followed in the case OF returns ntrusted
TO his regular deputies In TINS city.
The probabilities are that the United states Su-
prene Court will pass upon the test cases involving
April Is, up 10 which time returns for 1894 be
legally made. II the law is declared unconstitu-
tonal and hence void there Will OF course be no
occasion for returning incomes. But until that point
law is valid and that ii must be complied with in
particular.