Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1918-01-31
Questions and Ans,Ders
About Income Tax
What Income, IL Any, Is Exempt?

"naS tNCCW0, " IVY 70 S~S"F>'
az The proceeds Of life insurance
policies paid to individual beneiiciaries
upon the death of the. insured.
By The amount received by the in
Sured. as "A return of premium or pre-
miums paid by him under life insur-
ance, endowment, or annuity contracts,
either during the term, or at the ma
turity, or surrender, of the insurance
contract
Co The value of property acquired
by gift, bequest, devise or descent. IL
must be understood, however, that the
income derived from such property is
taxable.
CD Interest upon the obligation OF
a state, or any political subdivision OF
| a state or upon the obligation OF the
United States, except in the case OF
obligations of the United States issued
after Sept. /, 1917, only to the extent
provided in the act authorizing their
issue.
! (e) Interest upon the obligation OF
! any possession of the United states. or
securities issued under the provisions
of the federal farm loan act of July H.
1917.
| co The compensation Of the present
president Of the United States during
the term for which he has been elected
and the judges of the supreme and An
fcrior courts of the United States in
office on Oct. 3, 1917.
CD The compensation OF all officers
and employees of a state or any politi-
cal subdivision of state, except when
such compensation is paid by the
United States government. This in
cludes the Official salaries received by
public school teachers. state and coun-
ty officers and employees Of munich
palities; but income derived by such
persons from sources other than state,
county or municipal funds and the
other sources enumerated in this an
swer is taxable. (See Section 4, act
of Sept S, 1916, as amended)
If my salary for December, 1917 Is
not paid to me until some day in Janu-
airy, 1918, or later is its amount to be
included in my 1917 return?
1t is to be returned for the year dur
ing which it was actually received by
you.
"a is employed by a corporation at
an annual salary OF $4,000. The cor
poration, being in financial straits,
only paid "A" $4,000 during each of the
years 1915 and 1916. In 1917, "A" re-
ceived his salary In full plus the bal
ance Of the salary due him for the two
previous years. Must he include the
full amount received in 1917 in his re-
turn for that year?
Yes. $1,000 should be returned and
that amount will be subject to income
tax at the rates prescribed for the year
1917.
If you acquire the property sold prior
to March l, 1913, you should take its
fair market price or value as Of that
date, add thereto all amounts subse-
quently expended in making perman-
ent improvements, then deduct the ag-
sregate of all claims for depreciation
in value of property claimed as deduc-
tons on previous returns, and the diff
| ference between the result thus OBJ
tanned and the selling price is the
amount to be reported under gross in
come.
If you purchase the property on or
after March l, 1918. the difference be-
tween its cost, plus all amounts sub
lsequently expended for permanent i'm
provements less depreciation previous
ly claimed, and it's selling price. Is to
be returned.
II the property came to you on or
after March 1, 1913, as an inheritance.
the difference between the appraised
value placed upon It at that time plus
all amounts subsequently expended for
permanent improvements less depre-
| citation previously claimed, and Its
selling price, is to be returned.
When is a farmer to return for tax
purposes the value Of crops and stock
produced?
The value Of grain, stock and other
products produced on a farm Is not
considered taxable income until re-
duced to cash or the equivalent Of cash.
Therefore, If crops and stock were pro-