The sun. [volume] (New York [N.Y.]) 1833-1916, 1915-02-26
BROKERS FIND BALM
IN WAR TAX LAW
Highly Pleased With Provi-
sion Just Discovered, Permit
ting Income Deductions.
AID FOR FLOOR TRADERS

Stock Exchange members were greatly
pieased Yesterday 20 learn that. through
/, provision 81 the income tax az applied
N me new war" tax OF 81 on the
transfer OF each 100 shares of stock,
raiders will be relieved OF much OF the
burden Of the income tax this year. The
income tax law provides that all ma
,lonal. state, county. school and munich
nal taxes paid within the calendar year
nav be deducted from total income to
arrive at the amount OF taxable income.
The application Of this provision In the
case OF Stock Exchange transactions and
me heavy tax If 50 for each 100 shares
q, stock has thus far generally escaped
note in Wall Street. Bankers and
brokers who learned OF the discovery
Yesterday were spreading the glad news
"A quickly as possible. The legality of
making the deductions was confirmed by
the income tax authorities in the in.
,ernal revenue office Mt the custom house.
The general provision of the income
tax exempting the amount of Federal.
state and municipal taxes paid from
further Federal taxation applies not only
10 the Federal tax on transfers of stock
and the similar state tax. but to the
amount ~ the income tax paid last year
and TO all OF the special revenue war"
taxes, Il was said. These amounts may
be deducted from general income to OBJ
tain taxable Income
Wal. Street was chiefly interested in
the application OF the provision to stock
transactions and TO the income tax paid
on last years income tax levy. The in
come tax for 1918 was not paid until
before the end OF June 1914. 81 that IL
comes within the deductions allowed on
Government taxes paid within the last
calendar ear In numbers Of cases.
this deduction will amount TO a consid-
cradle item in the schedules OF brokers.
Special interest on the Stock Exchange
centred on the permission for deduction
Of the stock transfer taxes. Federal and
State. These taxes, totalling 81 for
each 100 shares OF stock traded in,
amount TO largo sums in the cases OF
important traders. The floor trader who
10 In and out of the market many times
during the day, relying for his profits
on fractional differences as low as
eighths between his purchasing and sell
lng prices, spends thousands of dollars
a year In paying the Federal and state
taxes. A floor trader in a normal mar
ket does 5000 shares or more as "A mod.
crate days business, the taxes paid for
this amount OF business being $500.
The deduction OF these sums from tht
yearly income of a floor trader, IL was
estimated yesterday. may In the cases
NJ some floor traders, especially In ths
iat several years OF low profits. almost
equal the amount OF his net earnings
and in many cases will undoubtedly per
nit him to return an income on which
he tax will mou TO a very moderate
sum.
The floor trader is considered on IN,
stock Exchange a very essential part o
he machinery OF stab.lizing prices %
stocks because he is in the market al
" the time and in some instances is IN,
My source OF buying power.
The professional trader is not undo
the apparent discrimination of the in
ONE tax law. which makes others thar
professional SPECTATORS add In thei'
stock profits rs taxable income, Will,
~torbidding deduction Of stock mark
osses from gross income. Large trader
N the Stock Exchange other than tn,
professionals. however. will appreciat,
ne permission for deduction OF their tai
stamps on sales OF stock.