Ottumwa tri-weekly courier. [volume] (Ottumwa, Iowa) 1903-1916, 1914-02-17

| partment,-the final court or resort
tax law.
q. Our company, corporation. car
ries life insurance policies on the lives
of its principal officers, in which the
company is made the beneficiary Are
the premiums on these policies allow
able deductions?
A Yes. Where the beneficiary was
| the firm. Proceeds of the policy wher
paid, upon death or maturity, mus be
included in the gross income OF the
corporation for the year in which re
ceived
@. Are drainage bonds taxable un
der the income tax law?
A. A ruling of the department OF
date February 10 quotes the attorney
general as of the opinion that Special
assessment districts created under the
laws of several states for public pur
poses, such as the improvement OF
sions for sewerage, gas and light. and
the reclamation. drainage or irrigation
of the bodies of land withins such
special assessment districts when such
districts are for public use are poll
tical subdivisions Of the state within
the meaning of the law The in
come derived from interest upon the
obligations of all such public districts
shall. therefore be excluded in comput.
ing net income for the income-tax.
c. My income being under $50, 900
year am subject to the normal tax
only Every dollar of this income is
in the form of dividends from corpora
tons. Am | required to make return
of my income?
A. Under date of February 18th the
department has ruled that Returns OF
individuals, when such individuals are
subject to the normal tax only. need
not include the income derived from
the dividends or net earnings Of cor
porations joint stock companies or as
sociations. and insurance companies.
When individuals are subject to the
additional tax that is when their in
come exceeds $4,000. such income de-
rived from said dividends or net earn
Persons having an annual net income
of $4,000 more inclusive Of the income
derived from dividends or net earnings
of corporations. etc. but whose total
net income is less than 100000 and
whose net income. exclusive of income
derived from dividends or net earnings
of such corporations. etc. is less than
$4,000 for the taxable year (s2.500 for
the year 1919. shall not be required
to make return Of annual net income.
Returns which have been or may be
received from persons subject to the
normal tax only in which such dlvi-
dends are included need not be chang
ed to meet the provision of this regula-
ton" ..a,<
O. I hold bonds containing "Tax
free covenant clause" that Is stipu-
lation that the issuing corporation will
pay all taxes. The income tax on these
bonds has been paid at the source, al
though it has not been withheld at the
source May list such income in COL
umn A on the return as income on
which tax has been paid at the source?
A. The stipulation in bonds where
by the tax which may be assessed
against them or the income therefrom
is guaranteed, is contract wholly be-
tween the corporation and the bond
holder. and in so far as the income tax
law applies. and the government will
not differentiate between coupons from
bonds of this character and those from
bonds carrying no such guarantee. The
debtor corporation. or its duly author
lied withholding agent. will be held