New-York tribune., 1913-07-27

crs from certain burdensome provisions
I originally contained lu the income TAX
section Of tn" pending tariH 'lu give
. promise ~ successful outcome. -,
The bill as reported by the Senate j.
nance Committee 20 the Senate. with the
/ approval of the Democratic caucus mas
/ been revised I'm respect to the two lines "i
/ criticism which the Allied Real Estate
Interests has directed against IT,
The provision for dcducting taxes a
/ the source has been materially chan@cd
/ As IL now stands. the only provision 1"r
deduCunE at the source income taxes Oh
rents relates to rents payable 10 non.
. C.rpOratc owners ly tenants holding NHdt
/ is known as net leaSc'-that is. ten
ant paying IA addition 20 rent the taxes
/ and assessments making repairs ttc. y"
[ tax f. 90 he deducted and PAID az tE'
source upon rents payable To a corpora
/ tioD. the corporation being required To
I report and pay taxes direct
/ The second ground Of criticism related
/ 20 deductions from gross income allowed
I I'm arriving at net income Real estate
owners objected 10 the provision permit
ting a corporation 10 deduct from us
gross income only part OF the interest
actually paid out by them during me year
ON their mortgages The justice OF thS
criticism has been recognized by inc sen
ate Finance Committee. and IN me re
printed bill the following provision y
found: ,,.soh.od-
I
iect OF sale I'm ordinary business OF suSh
c,r,oratior etc the total interest Sc
cured and paid by such COMPANY, ,'tc.,
within the year on any such lhdeo'euhcSS
NAV he deducted as a part oi us expense
of doing business.
This provision will permit corporation
owning real estate 10 deduct as part OF
IT'S expense OF doing business" all the In
terest paid by Il on mortgages on IT'S
: propertv. Under another provision OF the
bill a corporation may IN any event oe-
duct interest paid by It on an amount OF
Indebtedness not exceeding the sum OF
its capital sock and one-half of It's bond
cd Indebtedness. The provision for one
half Of its bonded Indebtedness is also
new.
found. upon my appearance" before
the members Of the Senate Finance Com
I niftee. 70 whom had been assigned the
( Income tax portion OF the bill, that there
was a decided disposition to remove any
inst cause Of complaint in the form Of the
hill When il is recalled how numerous
are the tenants throughout the city IN
office buildings lofts and apartment
/ houses who are paying rent OF upward
J % 1900 year it viii be seen no" much
! has been accomplished IN avoiding unnec-
1 essarv annoyance Of administration by
removing the requirement that each OF
! such tenants must withhold / per cent OF
the annual rent and retain the same for
( Sly months after the close OF the calendar
year
/ On the financial side OF real estate oper-
I atlons the gain which has been accom-
pIished for real estate companies IS even
more striking The large number OF cor
pcrations owning rea! estate whose mort.
/ oage Indebtedness far exceeds their capl-
tai stock and who were therefore pro
| hjb,ted under the bill as originally drawn
from deductng more than a small part
NJ the interest actually paid out by them
will be glad to learn that under tho
changes that have been made practically
/ every real estate corporation will be able
70 deduct from its gross income all in
/ terest paid on its Indebtedness In com
putting the amount of its net income for
purposes Of taxation
| The spirit Of cooperation shown by real
estate organizations throughout the coun-
trv in response TO the invitation of the
Allied Real Estate Interests for JOINT
action has been very gratifying
The Allied Real Estate Interests Is Keep
ing up its, campaign throughout the cOun-
trv with 4 view Of not losing anything
that II has already gained and 10 making
assurance doubly sure that the neon"
tax bill, as finally passed. does not bear
| unfairly upon real estate owners.