Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1918-02-01
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Questions and Answers
About Inc ONE Tax

GA man is employed at a salary
and is Obliged to spend probably one
half Of his time away from home hotel
expenses being paid by the firm. Shall
any part of hotel expenses, or all, be
| consi dered income? A.-Deduct all
neces sary travelling expenses.
| GA man has been Il stakeholder
in a building and loan association for
several years. In 1917 the company
called in the stock and paid him OH.
What will be figured as his profits?
A.-All profits received.
Q.-An employe was to participate IN
net profits on a contract completed IN
1917. He accepts in payment a war
rant which is not cashed. Would this
warrant be considered income for 1871
or when cashed? A.-Income for 1917.
| OIL am widow with two daugh-
ters. One is working. but just makes
enough to clothe herself. I support
her as far as board and clothes are
concerned. The other daughter Is not
able to work. My income is 1880.
Will I have to schedule return? A.
Yes: but if you can show proof as
head of family you will get exemption
of $1,000.
| Q.-Where income consists entirely
Of salary, can taxes paid on idle land,
no buildings, be deducted? Ayes.
Q.-Suppose that taxes for three
| years, 1914, 1916 and 1916, were paid
during 1917, could the entire amount
| be deducted from 1917 income? A.
Yes.
| Q.--I bought farm in 1906. for
| which I paid $500. Since then, up to
! March, 1917, when I sold 1t. received
! from it only $1,000. I paid taxes reg
ularly and sold it in 1917 for $500.
Am entitled to charge off against this
interest, say at per cent, which shows
me in all profit Of about $540, or will
the government figure the difference
between buying and selling price as in
come? A.-The difference between the
fair market value Of the farm on
March 1. 1913, and the selling price Is
considered income.
employ a man to assist me in op.
Grating my farm and woman to as
sist about the house. Is the compen-
sation paid to each allowable as a de-
duction?
Unquestionably, as to the amount
paid to the male employe. but a line
must be drawn as to the amount paid
to the female employe. IF her time is
employed entirely in taking care of
milk and cream products for sale, In
the production, Of butter. cheese, etc,
the care Of milk cans and churns, or,
if separate table is maintained for
laborers employed on the farm and her
services are used entirely in the prep
araton and serving Of the meals fur
nished the laborers and in caring for
their rooms the compensation paid her
constitutes an allowable deduction. If,
however, she is employed to assist in
caring for the farmers own household,
no deduction can be claimed.
l held an endowment life insurance
policy upon which I paid premiums for
twenty years. In 1917, that contract
matured and I received its face value.
or $1,000. Must I return the entire
amount received?
No. Return only the difference be-
tween the aggregate Of premium paid
and the amount upon maturity of the
contract
a." who is the employee OF cor
poration. was injured and under the
laws of the state in which the accident
occurred he received $1,000 on account
of the injury he suffered. Must the
amount thus received be reported as
income?
Yes. Any amount received under an
employers liability act, or workman's
compensation act, or any other similar
act or as the result Of settlement or
compromise for pain, and suffering"
is held to be such income as Is subject
to the federal income tax. This ruling
is also applicable to any amount re-
ceived under the terms of an accident
insurance policy.
Can the amount Of life insurance
surance on MY Residence property DC
claimed as DEDUCTIONS?
No, as these are held to be items OF
personal expense. If, however you pay
premiums on insurance policies cover
ing farm buildings, other than your
dwelling house, or on any property
used for business purposes these pre-
miums are allowable as deductions.
A tenant. under the terms of lease,
Is Obligated to pay a certain cash rem
tai and all taxes assessed against the
property and keep it insured. May he
claim as a business expense the aggre-
gate amount of rental, taxes and in
surance premiums paid?
Yes, If the property is used by the
tenant for business or trade purposes
and not as a home, the aggregate
amount may be claimed as a deduction
for the year. during which actually
paid.
What forms Of taxes cannot be claim
ed as deductions?
Taxes assessed against an individual
on property owned by him to ray for
the paving ofa. street contiguous to his
property. the construction Of a sewer,
sidewalk, etc, the sprinkling or oilins
of a street in front OF his homo, the
construction Of leveek to pfotcc., or