New-York tribune., 1919-03-03


ment' aud it has been further complicated
66y rulings and interpretations Of the
Ircdshry Department. The taxpayer may
ma 1t hard to answer such questions
as hot0 much t0r must be paid, koaa to
pay the tar, hotO to fill in the forms oa
Whach returns mast DO made, to tchot
ertent, II any, an income as exempt from
me levy, etc. The corporation may find
1t equally difficult to solpe problems
excess profits imposts.
me Tribune has therefore provided
tbs Tdr Service Department. Through
fhe courtesy of the Guaranty Trust
Company Of Neao York,
Morris F. Frey,
rag Consnltant Of that institution aud
leading authority on the subject, sciU
dnst1er questions submitted to hi,n
Mrongh this department relating to in
divadudl, corporation or partnership in
come tdTes, or about War profits and
crccss profits tdres.
loN may therefore tell your tar
trouo.cs to Thc Tribune 1oith TIE asser-
once that they a0iU recctve expert con-
stderntion. Those questions s0hich are
Of general inte, eat i0iN be ansvered in
thfs column. Names aviU not be used.
mail. All Communications will be re-
garded as highly confidential.
You OaH favor as and expedite tho
reply II you toiI please obssrve these
requests.
State your questions as concisely as
possible, but be sure that no essential
information is withheld.
Write on one side of paper only.
lnclose stamped addressed envelope
for reply In case questions are not an
swered In the coIumn.
address oil correspondence to
Tax Service Department, Tribune
Business News Bureau, 154 Nassau
Street, New York City.
Question:: AS I am in small busi-
ness with partner, we share alike.
After going over last years receipts
and expenses we find that we were en-
titled to $4,000 apiece This includes
my salary for the year past. | am
q married man with two children. Out
of this | bought 5000 worth of Liberty
bonds. What I would like to know
is, am ] taxed on the receipts of Lib
erty bonds, or must make out copy
including my partners?
Answer: partnership as such is not
subject to income tax. The individual
partners must report their proportions
ate share of the partnership profits,
whether distributed or not, on their
individual returns. The partnership,
however, must file return, for infor-
nation purposes only. Amounts in
vested in Liberty Bonds are not allow
able deductions. Interest received on
the amount which you have invested in
Liberty bonds is exempt from income
tax. Your personal exemption is So, 400.
Therefore, If your income consists only
of the amounts which you mention you
will not be subject to tax but must file
a return.
Question: Family consisting of
mother and two daughters One
daughter is main support. The other
contributes So a week as board. Is
the one daughter who earns $4,000 a
year entitled to $4,000 exemption as
the head OF that family if she includes
the $3.50 board received from her sister
as income? She is in reality the head
of the home, as the mother has no
other income of any kind.
Answer: The daughter who is the
chief support Of the mother is the head
of family. and entitled as such to a
personal exemption Of $4,000. She may
also claim an additional exemption of
$500, provided the mother is incapable
of self-support because mentally or
defective.
Questicn.-Last year, information
was that if piece of real estate paid
no profit, you were not to mention it
in the returns. Is it so this year?
Is each piece of real estate to be
reDOrted SAOarately? If one nipce
shows loss, can the loss be deducted
from other profits? Is 10 per cent
a fair depreciation on buildings?
Answer.-Property on which no
profit has been realized should not be
mentioned in income tax returns.
Distinct pieces of real estate should
be reported separately. Losses at
tributable TO one piece of property
may be set up against other income
The law provides no fixed rate for de-
precautions; depreciation should be
ratabIy over period rep
rescnting the probable life of the
Except in very unusual
circumstances. 10 per cent rate
would be excessive.
Question. Last November sold
my seat on the Consolidated Stock
LACllunBe lO1 . ,G-O. HHu Deen Il
for more than forty years,
but during the last four or five years
| had done no business on the floor,
nor was present there excepting twice
TO arrange the sale of my seat. The
price quoted by the board for seats
was $4,000, but sooner than continue
to pay monthly dues Of $25 and CON
tinual assessments Tor death dues,
sold my seat to the Exchange itself
for 1,225. The original death gratuity
was $4,000, until "A few years back,
when tho fund having been exhausted,
only about $500 was paid, being de-
rived from an assessment Of $5 on
the members for each death. l. the
$l,225 income? ~What may deduct
from income TO be taxed as property
loss on account Of very large sums
paid for dues and death claims dur
ing period Of more than forty
years?
Answer.-Thc law provides that the
fair market value as of March /, 1918,
shall be the basis for determining
profit or loss sustained in the sale OF
property acquired prior to that date.
Amounts paid for dues and death
claims are not allowable deductions.
Question: What is my tax on an in