Imperial Valley press., 1918-01-26

points OF the partnership aSceftalneQ
during the calendar year for which
The return is rendered, whether dis
tributed to you or not. That is, if the
fiscal year of the partnership ends on
December 81 of that year, your dis
tributive share of its earnings or
profits ascertained upon the close of
the books on Decembe 81 should be
returned. If the partnership ends its
fiscal year on some day during the
calendar year, your distributive share
of its earnings or profits ascertained
at that time should be eported.
(f) All items Of foreign income,
that is, interest upon bonds and mort
cages, or deeds of trust, or other
similar obligations issued by individ-
uals who are citizens or residents Of
foreign countries, foreign corpora
tions, joint-stock companies, etc.
(g) Royalties from mines, oil and
gas wells, patents, copyrights, fran
chises, or other legalized privileges.
(h) Dividends on stock, or from the
net earnings of domestic corpora
tions, joint-stock companies, associa-
tions or insurance companies, wheth-
er paid in cash, stock or script. As the
net earnings of corporations, joint
stock companies, ETC., are subject to
the tax imposed upon the net income
OF corporations, dividends from such
net earnings are not subject to the
normal income tax in the hands of the
shareholders receiving the same; but
they are to be returned for the addi-
tlonal tax purposes and are subject
to that tax. The ates of tax to be as
sessed against dividend received
during the year 1917, or any subse-
quent year, are covered by the ans
wer to Question 43.
10. IF MY SALARY FOR DE-
CEMBER, 1917, IS NOT PAID TO
ME UNTIL SOME DAY IN JANU-
AIRY, 1918, is IT'S AMOUNT TO BE
INCLUDED IN MY 1917 RETURN?
1t is to be returned for the year
during which it was actually receiv-
ed by you.
20. "A' IS EMPLOYED BY A
CORPORATION AT AN ANNUAL
SALARY OF $4,000. THE CORPOR-
BEING IN FINANCIAL
ONLY PAID "a" $4,000
DURING EACH o FTHE YEARS
1915 AND 1916. IN 1917, "a" RE-
CEIVED HIS SALARY IN FULL,
PLUS THE BALANCE OF THE
SALARY DU EHIM FOR THE TWO
PREVIOUS YEARS. MUST HE IN
CLUDE THE FULL AMOUNT RE-
CEIVED IN 1917 IN HIS RETURN
FOR THAT YEAR?
Yes. $4,000 should be returned and
that amount will be subject to income
tax at the rates prescribed for the
year 1917.
81. IF AN EMPLOYER AGREES
TO PAY AN EMPLOYE A GER
TAIN STIPULATED SALARY AND
FURNISH HIM WITH ROOM AND
BOARD, ARE THE LATTER ITEMS
TO BE CONSIDERED IN COMPUT-
ING INCOME TAX LIABILITIES
Yes. A fair rental value is to be
placed upon the room and a fair value
upon the meals furnished, and their
amounts reported as income by the
employe. If the services Of the en-
ploye are used in the employers bus
mess or trade, the latter may claim
the rent paid by him for the room, if
any, and the actual cost of the meals
so furnished as deduction under the
head of Business Expenses.
%. IF l ENTER INTO A CON-
TRACT IN 1917 WHICH WILL NOT
BE COMPLETED UNTIL 1918, AND
WHICH REQUIRES Me TO MAKE
EXPENDITURES FOR MATERIAL
AND LABOR, PROVIDE FOR'POS-
SIBLE LOSSES, ETC, MUST l IN
CLUDE THE ADVANCE PAY
MENTS I RECEIVE IN 1917 IN MY
RETURN FOR THAT YEAR?
No. AS you are unable to determine
what amount of gain or profit you
will derive from the contract until it
is completed, the payments received
thereon during 1917 need not be in
cluded in your return for that year.
When the contract is completed the
net gain or profit derived theefrom
should be reported under Gross In
come in your return rendered for the
year 1913.
%. HOW AN / TO DETERMINE
WHAT AMOUNT OF GAIN OR
PROFIT DERIVED FROM A SALE
OF PROPERTY is RETURNABLE
FOR INCOME TAX PURPOSES?