The Oskaloosa herald., 1914-02-12
INCOME TAX MATTERS
Some Suggestions to Those Liable
Under New Law.

months from March l to December 81,
1913. For law about which so
much has been written, there is very
general ignorance, and considering
the penalties to attach from failure
of taxable persons to make returns,
and for fraudulent returns the 10000
were well engaged in informing them
selves regarding their duty.
The law contemplates, in the sec
tons relating to the tax on the in
come of individuals, as distinguished
from corporations, that every person
receiving either for himself or others
during the 10month period referred
to, income in excess of $4,000 from
all sources, except from government,
state, municipal, drainage, township
/ and school bonds, and as an officer
or employe of a state or political
subdivision thereof, shall make re.
turn of income. If the collector of
internal revenue has not suspected
one of having such income and has
failed to send return form, the obi
cation is nevertheless upon the per-
son to ask for form, and failure
TO ask for it and return it within the
| time specified, is penalized by a fine
ranging from $40 to $1,000.
1t matters nothing in its bearing
upon ones duty TO make a return
that when his deductions are figured
off his net income for the ten months
will be less than $4,000. He must I'll
ont the return and swear to ii never.
theless, listing in addition to his
gross income as directed, the deduc.
tons to which he is entitled and the
exemption of $4,000, if he be a single
man, and S3,333.33 If he be a mar
ried man living with his wife. Per
sons receiving forms from the collec-
| tor whose gross income (eXcluding
that received from the bonds noted
| did not amount to $4,000 for the ten
| months, need not fiji out and make
return. There Is considerable confti-
! sion in the minds Of probable tax.
, payers as to the meaning of the
| term accrued interest" taxable as
| income under the law. The doubt Is
| cleared away by the ruling of the
! treasury department that accrued
interest" means interest due and pay.
able. One may have coupon for
a years interest, say June, 1913, to
June, 1914. Obviously on December
81, 1913, there would be six months
accrued interest on such coupon, but
| inasmuch as the coupon is not due
and payable until June, 1914, the six
months accrued interest will not be
| listed by individuals as part of the
| income for the taxable year 1913.
Another OF the disturbing problems
| is the amount of depreciation which
one, may. set down. On this subject
| rulings of the treasury department
are pertinent. 1t holds that
| l. a taxpayer should not claim
/ deduction for depreciation of a build
ing which is being rented and on
I which he is claiming expenses of Ger.
| tain repairs, unless such depreciation
I is actually in excess of repairs made !;
p A taxpayer is not entitled to de.
| duction by reason Of repair on or de,
probation in value of his dwelling
| house;
3, A landlord is not entitled to a
deduction by reason of replacing a
brick, stone or board walk, for illus,
trat;on, with a cement walk, for the
reason that such expense is for the
| purpose OF permanently increasing
| NdiuC III ouSu pioptlIy
| 4. Expenditures for painting q
dwelling or other building occupied
| by the owner are not an allowable de-
| duction.
8. A farmer replacing fence with
| q new one is not entitled to a deduc
ton therefor.
6. The amount expended in re
| Fairs necessary to preserve the prop
erty Is a proper deduction from gross
income in computing net income, but
| repairs such as are in the nature OF
| additions, or which increase the per.
| manent value of the property, are
considered betterments and are not
allowable deductions.
A principle laid down by the de
| partment as to corporations and ap
/ plying by analogy presumably to in
| dividuals Is that the amount taken
credit for on account of depreciation
in order to be allowable should be sc
entered on the books as to constitute
liability against the assets of the
| corporation. In other words, swear
ing TO a charge for depreciation, one
| that the value of the property has
4 dCIudlly utpIcCidttu III INC dulOull
claimed-that it was worth less than
the year preceding the sum of the de-
probation charge.
| The charge permitted for depreci
alton of property likely will not be
as large as seemed to be the opinion
of the Sioux City real estate board
which discussed the subject at re
cent meeting. The United States
! governments own allowance for de
probation Is, in the case ola brick
building occupied by the owner, from
l to 1H per cent; when occupied by
a tenant, IA to IL per cent; or
frame buildings occupied by owner,
! to 2H per cent, and by tenant 2h tC
| 3 per cent.
! 1t were well for prospective tax
payers in doubt about how properly
! to proceed. to solicit the assistance
of the collector in person or by cor
respondence as one sure means OF
getting the return right.
Bankers and investors generally
will be interested in the announce
ment by the treasury department OF
it's purpose to furnish blank forms OF
certificates and other forms required
! to be used in connection with col
lection of the income tax and the
making of their returns.