Evening star., 1919-11-30
BY 1. A. FLEMING.

IN very snort tlLiS Sou ~
giving consideration to the matter OF
compilation and payment of your IN
come tax for the calendar year ISIS
Very many people have started tnelr
Preparations. through taking losses
on investments and in specuiatiSe
trading. that they may make the ue-
ductions from their gains. :.
In your speculative operations IL
is necessary that you have gains from
which to take deductions for losses,
else you must bear the loss "ithou'
deduction from other income SAL
aries are not gains in the sense OF
permitting deductions for losses sus
tanned .
Your income tax will be lighter this
year than it was last. unless you
have been more fortunate IN the ma, MAJ j.,
ter of making dollars during the year
now rapidly drawing to a close Una II
YOU were in the previous calenuar
year. ,o,e o,,;dsd
for an impost of per cent norma
taxes upon the first si'ooo anu 80 on
cent for additional income. pius an
additional surtaX on amounts IN ex-
cess of $4,000 income
This Years Rate.
For the calendar year 1919 the nor.
NAL tax on amounts up to the urs,
1000 of taxable income was iNeo
at per cent and on amounts over
$4,000 S per cent normal tax
The 3 per cent normal tax appiits
+o oil incomes over $4,000. to which
no,st he added the surtaxes when the
sum passes S5.000. .ooo ,,d
Surtax starts between So'vo" "Iu
$4,000 and is l per cent: he.M
sS 600 and $4,000, 2 per cent: pei" een
Is oOO and $4,000. per cent pe
tween $4,000 and $4,000. per ceh,'
increasing one per cent win eacn ao
ditionai 900 up to 100000. after
which the tax increases MAJ sia,,s
In computing surtaxes these val ~ -
surtaxes must be added tosethel ato az
then the normal tax also. IN orue5 70
Zach the correct amount of taxes due.
Losses Must BE Actual.
=, ,aor IN daduct losses from gains
Il is essential that the losses are az
tuaI. as only dealers may take losses
while still holding securities upon
which losses are claimed.
There is no change in the matter
of exemptions from the schedules oi
last year. The exemption OIL tne SIN
gle man is $1,000. and for marrieo
nersons. living together, $4,000 plus
5000 for each dependent minor
Charitable donations to incorporat-
ed charities may be deducted 10 the
ma aximum of Is per cent OF income.
but the kind of charity that the lei'
hand knows nothing OF is not oeoue'-
able.
During the past year there has been
a wonderful squirt in real estate safes
and much income has resulted tnere-
from.
If YOU have been regularly taxing
depreciation from your investment III
houses, etc. and are fortunate enousn
to make a sale, and the fact developer
that there has been no deprecla!ion,
as shown by the price obtained, II
will be necessary to restore TO the
government all depreciation Tor "nlcn
YOU have taken credit. one cannot
take depreciation for the nome ne
lives in unless some part OF its IS pro
ducing income. Interest paid is also
deductable.
When Contributing to Income.
On general principales. one may be
governed by this infallible rule: Any
thing that contributes to the produc-
tion of an income is subject to dedac-
tion.
Your expenses on a business trip;
the cost of entertaining customer
on a buying trip; the expense of an
automobile used in your business eff
forts-in a word, any expense that
produces income Is deductable.
Everything a man makes is in
come. no matter how he makes It
The revenue bureau must have its
bit. to revive a wartime expression.
fees of the clergyman, the pay or the
retired Army official and any other
gift or fee received by an evangelist
worker.
Federal officers and employees sal
aries are subject to tax.
Compensation for services other
than in cash. if of marketable value,
must be listed as income.
Gifts Not Taxable.
Gifts are not income. but the income
A relatively recent ruling of the Treas
ury Department makes 1t obligatory on
the part Of the taxpayer to consider any
part of the normal tax on bond interest
paid for him by corporation issuing
bonds, under a covenant agreement. are
income, and he must compute tax on
this income the same as on all other:
Returns must be in by March Is. but
NAV be filed any time after January !.
1920. and tax may be paid in quarterly
installments.
Want National Enactment.
Alarmed at the multitude Of fake and
fy-by-night promotion get-rich- quick
schemes which are menacing the invest
ment market and making capital scarce
for legitimate development projects.
Congress is preparing to enact ma
tional "blue-sky' law at the incoming
session.
President Wilson called upon Congress
for such a law in his message on the
high cost of living. He urged the pas
sage of this measure. saying:
'"There is a bill now pending before
the Congress which. il passed, would do
much to stop this speculation and to
prevent the fraudulent methods Of pro-
motion by which our people are annu-
ally fleeced of many millions Of hard
earned money. Reference is made to
the measure proposed by the Capital Is
sues Committee for the control OF Sc
curities issues. 1t is measure formu-
lated by men who know the actual con-
ditions Of business and its adoption
would serve a great and beneficent pur-
pose"
MANY thousands of government en-
ployes struggling along on meager sala-
ries arc being induced by Turing pros
pectuSes to make Investments in these
fake or highly speculative stock-seiling
schemes The officials in every govern
ment department have heard OF num-
dreds of such cases.
Give Up Good Governments.
The liberty bonds which all govern
nent workers bought are being lost in
this way as number of the promotion
schemers do land-office business in
swapping the speculative stocks for the
bonds behind which the government
stands.
The Treasury Department has issued
repeated warnings against such stock
deals and Houston Thompson. federal
trade commissioner. has made cam
paign, speaking abefore number Of
large organizations on this subject.
44,sOO IN. G." Companies.
One statistician in the government
service has figured out that there are
44,sOO companies whose stocks and
bonds are practically mere scraps of
paper" and this does not begin to reach
the total OF defunct corporations pro-
NOTED within the last three years.