The Pacific commercial advertiser. [volume] (Honolulu, Hawaiian Islands) 1885-1921, 1903-10-04
Are Losses in Investment to Be-
Considered Losses Actually
Incurred in Trade.
Interesting Figures From Some of the Larger
Firms...Kona Losses Rise Like
Banquo's Ghost.

A question almost as important as
the tax on good Will is raised again
this year in the income tax appeals
The last day for filing was October
1st. and there have been but eight ap-
meals all told from the ruling of Tax
Collector Pratt.
While the amount of tax involved in
the appeals is comparatively small, the
question raised is of much Importance.
The principal firms appealing, Brewer
&, Co. Castle & Cooke, First National
Rank F. o. Hall & Son, all make the
claim that losses in investment are
-ssIosses actually incurred in trade ana
as such should be deducted from the
income for the year.
The losses in this instance nearly all
relate to the wind-up of the kona plan
4ation and of the Hawaiian Automobile
Co. All the firms appealing but two
set out the losses as arising from the
Kona plantation. Castle & Cooke 5
loss was from money advanced to the
Hawaiian Automobile Co.
The assessor disputes the claim
that such losses as those on koha
bonds or stock are losses actually IN
eurred in trade, to be deducted from
the gross amount of income. He
holds that the loss is not one of IN
come, but of investment and conse-
quently the deduction cannot be mace
from the gross income. The appel
lants argue that the loss is one actual
ly incurred in trade, and accorolns
to the terms of the statute they are
entitled to the exemption. The hrst
sitting of the tax court for the hear
;ro, of apneals will be October Sth.
BREWER APPEAL.
Brewer & Co. appeal from an alleged
over taxation upon s3,S43.Ss, on the
grounds:
/. That such assessment is exces-
.sive and improper for overvaluation'
to wit. the disallowance of losses, note
and book account, Kona Sugar Co.
Amount appealed, $3,S4S.SS; tax
S76.S7.
That such assessment is without
authority of law
The return of Brewer & Co. and the
of Assessor Pratt follow:
Tax Assessor Brewer.
Cross INCOME .s325, ,702 80 S25. 1922
Exemptions 80. 227, ,624.09 2S1 .46791
Net Income IS 9s07S.2S S 94,234.S5
,Tax 8 .... s1,961.56 s1,SS469
MORTGAGE NOT EXEMPT.
The Western & Hawaiian Invest
ment Co. returned the net income as
$40. .6o2. .6S and was raised to s11,266lS'
The tax is s225. 80.
The assessor refused to exempt loss
on "Vivas mortgage, s663.50.'
CLAIM LAW IS INVALID.
Castle & Cooke appeal on an increase
from S4S.179.26 to S69, ,402 45 and also de-
clare that the return is made under
protest upon the ground that the stat
ute requiring it is invalid and void.
The return of gross income s591, ,S19,3'
was accepted but the assessor refused
to accept exemption of $26,22S.19 for
money advanced to the Hawaiian Auto
mobile concern in 1901. The amount
of tax is raised from $S63.60 to SlSSS05
LOSS ON KoNA BONDS.
The First National bank and First
American Savings and Trust Co, ap-
peal from the refusal of the assessor
to deduct losses on Kona sugar bonds.
The First American writes off SlS,- |
9S1.47 as losses actually incurred In
trade. which includes Kona bonds.
The gross income returned is S21,2S0.l2
and the assessor refuses to deduct |
S21. 1850 which would have left no
income for taxation. The assessment !
is raised from nothing to $14,301.99 and
the tax is fixed at $2S6.04.
The First National bank writes off
S24.275. as losses in Kona bonds. The
gross income was returned at $S6,44I.4S
and the exemption claimed was s5s,-.