New-York tribune., 1919-02-18

QUESTION; (a) On an endowment
pollcy maturing next week, | bor
foWed $1,000 year ago and invested
1T in stock
DO | report the 81 900 as income
or II not, can I charge up the inter,
est 500. [ assume that I can. as
the interest earned, which is $50, will
necessarily have to be reported as
income W." 40
(b) Is money received for iurv dutv
part of ones income?
(c) Are personal taxes Maid 70 tho
OiIy OF New York dcductible?
- Nu) How about contributions to Red
cross, Y. NJ. c. a. and made on tho
street and of which no accurate rec-
ORD was kept? Can we deduct an csti-
mated amount?
ANSWER: (a) The amount which
You borrowed on your endowment mol.
ICY during the year 1918 is not tax-
able income for 1918. The interest
paid to the insurance company on the
Indebtedness may be deducted from
your gross income.
CD Money received from iurv dutv
should be included in your income az
reported.
=. (c) Taxes paid to the City of New
York are deductible unless assessed
against local benefits of a kind tend
ing to increase the value of the proD-
erty assessed.
td) Ihe law provides that contri-
buttons may be deducted if made
within the taxable year to CORPORA
tons organized and operated exclu-
siyeiy Tor religious, charitable, scien-
tlflc or educational purposes. or for
the prevention of cruoJ4, IN .t,:IJ
or animals, (no part of the net earn
ings OF which inures TO the benefit
OF any private stockholders or indi-
vIduaD, or 10 the special fund Gre
ated by the Vocational Rehabilitation
Act, to an amount not in excess of
10 per cent OF the taxpayers net in
come as computed without the bene-
TIT OF this deduction. The law, how
ever, provides that such contributions
or gifts shall be allowed as deductions
only if verified under rules and regula-
tlons prescribed by the Commissioner
of Internal Revenue. Regulations COW
ering such verifcation have not vet
been issued by the Commissioners
Question: received, last year.
total of $3.50 under an accident insur-
ance policy. Should this amount be
returned for taxation?
Answer: UnIer the bill which is
now awaiting signature Of the Presi-
dent, amounts received from accident
and health Insurance and under work
mems compensation acts plus the
amount of any damages received nv
suit or agreement on account of in
juries or sickness, are exempt from
income tax.
Question: I have charged off on my
books during 1918 IS a bad debt. note
for 81 900. This note represents a loan
IN 1916. No interest has ever been
paid on the note. The maker Of the
note died in 1918 and left no estate
with which to satisfy the amount due
May [ take as a deduction, in addition
to the principal of the note, interest
from the date of the loan to the date
on which it was ascertained to be
worthless and charged off?
Answer: Under the income tax law
you may take as a deduction. in COM
putting net income, the amount of the
principal of the note. Unpaid interest
on the note, however. may not be in
cluded as a deduction unless such in
tcrest has been returned as income in
your income tax returns for the years
in which it accrued.
Question: Will you please advise
me as to what personal exemption
am entitled in my income tax return
for 1918?
Answer: IF you are married and
live with your husband (or wife). or
were head of a family in 1918, you
may subtract from your net income
before calculating your tax, the family
exemption of $4,000, plus $500 for each
person under eighteen years. or men,
tally or physically defective. who re-
ceived his chief support from you.
If husband and wife make separate
returns this exemption may be claimed
by either, but not by both, or may be
divided between them
lf you were not married or did not
live with wife Cor husband) and. were
not head of 4 family in 1918. YOU arc
entitled to personal eXcmpti0n OF
$1,000, plus 5000 for each dependent
person under eighteen. or mentally or
physically defective, who received his
chief support from you.
Under the instructions of the Treas
ury Department, release Monday.
February II, If you werd entitled to
any of the foregoing exemptions during
part of the year only, you may claim
MS many twelfths of the exemptions
stated as there werc months In such
part of the year.
Head of family" IL person who Is
sons living In his household who are
closely related TO him by blood, mar
riaEc or adoption.