The sun., 1919-02-23
Radical Changes in Law.

Radical Changes In Law.
One of the radical changes in the new
law has to do with dependents.
married man living with his wife
VINO has been married for the full year
and N single man who Is the head OF a
family (the head OF n family is a person
who by some moral or legal right is re-
qured TO support one or more depend
ents) Is entitled to $4,000 exemption.
A single person Is entitled to $1,000 ex-
emption. A dependent is a person who
is dependent upon another for support.
a dependant becomes self supporting
when he arrives at the age of eighteen
or becomes emancipated through acts of
his own or some other condition whereby
he leaves his parental abode and Goes not
depend upon any one Tor support, There
is an additional exemption OF 5000 for
each person tother than husband or
wife) supported by the taxpayer and who
is under eighteen years of age or Is In
capable of self support because mentally
or physically detected. The regNiations
under the new law will require The ex-
emptions TO be divided fractionally by the
month as they relate to the period OF
taxation. In other words II a married
MAJ was married on July /, 1918. he
would only be entitled TO fractional
part Of the $4,000 exemption as a mar
ried man, because of the fact that he
was not married for the full year He
would have an exemption of one-half of
1000 for the first six months of the
period and one-half OF $4,000 for the las,
six months OF the period or total OK
emption OF $500.
Under the old law the marital status
at the close OF the year determined the
amount of exemption allowed under the
earlier act; under the 1915 act this has
been changed materially. This form Of
administration or regulations not only
changes the amount OF taxable income,
but also changes the amount upon which
to determine the liability for making re-
turns. II a married man earned $500
in TIE year 1915 under the old law he
would not be liable for tax or for. filing
return. Under the new law In the case
above cited where a man was married
on July !. 1918, with an S1S00 salary
he would be subject to tax OF per cent
on $500, or SIS.
~
Rules on Exemption.
The manner of dealing with the ex-
empton is a new departure from the
way the matter has been handled under
former acts. The same principle applies
to children born during the year. A child
born on July /. 1918, would be consid-
cred. as dependent for only noe-halt Of
a year and the father would only be al
lowed deduction Of 800 on account of
this one dependent child.
This method of dealing fractionally
with exemptions is based upon the num-
her of months In the year, and a frac-
tlonal part OF a month is considered n
full month In computing income tax
liabilities man who was married on
November 20, 1918, would he entitled to
Hip of $1,000 as a single man and lie
of $4,000 as a married nun, the total
of these amounts would equal his al
lowable deductions from his net income
for the year 1918.
For the first time losses sustained in
transactions which are entered into for
profit regardless OF the fact ns to.
whether they are connected with a mans
trade or business or not may be de-
Quoted. The Interpretation of that pro-
vision for deduction means that specula-
tive losses can be taken up to "A certain
amount.
Where buildings we're purchased after
April 6, 1918, a reasonable amount will
be allowed for amortization at any time
within three years.
Gifts from individuals to organlza-
tions that are devoted TO educational,
religious or charitable purposes will
be deducted but only UP 10 10 per
cent of the mans net income. Last
years form did not show that 10 per
cent is allowed on his net income. He
must specify the organizations and the
amount given to each
The items which are not deductlble
are:
Personal living or family expenses.
The amounts which are paid out for
perma nent improvements. Amounts
which are paid out in this way should
be capitalized.
The amounts which are paid ost for
restoring property where the taxpayer
has already received an allowance for
that amount under his depreciation.
Question of Minors
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