New-York tribune., 1919-03-07
Morris T. Frey.

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swered in the column.
Address all correspondence TO
Tax Service Department, Tribune
Business News Bureau, l54 Nassau
Street, New York City.
Questions: In 1915 l suffered loss
Of over $1,000 in the sale of certain
stocks my own personal property.
claimed exemption or deduction for
that loss in my tax report for that
year. l have just received notice Of
demand for the payment of s79.22 as
tax in addition to the amount paid in
1915, because of the disallowance Of
the deduction claimed ct that time.
l understand that such deduction is
permitted under the present law, and
that amounts heretofore paid in similar
cases where such deductions for losses
were not claimed have been refunded
VIII you kindly advise me as to the
facts in this regard; also in case the
additional tax is not due what l should
do to avoid the payment?
Answer: Prior to January l, 1918, a
loss in the sale of stocks was de-
ductable only to the extent that it was
Offset by gains from similar transac-
tions. The new law permits the de-
duction of such losses for 1918 regard
less OF profits from similar transac-
tions, but does not apply to losses in
prior years.
Question: Can you tell me the
amount of salary and allowance, if any,
an unmarried first lieutenant in the A.
f. F would receive?
Answer: The law provides that SAL
aries or compensations not in excess
of $4,000 received from the United
States during the present war for
active service in the military or naval
forces of the United States are exempt
from tax.
Question: A building contracting
corporation had unfinished jobs on
hand December 81, 1918. 1t could not
determine the amount of profit or if
there would be any on these jobs 1t
had incurred considerable expense on
these jobs in excess Of payments re-
ceived to that date
How shall it treat these expense
items in it's report? Are they all de-
ductibie, in spite Of the fact that pay
ments will be received in 1919 to- prob
ably, more than offset them? On the
theory that 1919 will, therefore, show
l. greater profit Will the government
collect the tax on 1910 business?
Answer: A building contracting cor
poration having uncomplcted contracts
may prepare it's return so that the
gross income will be arrived at on the
basis Of completed work. All amounts
received on such completed work should
be returned az income for the year in
which the work was completed and de-
ductious limited to expenditures made
on account Of such completed contracts.
However, if desired the percentage of
profit from such contracts may be cs-
timatcd on the basis of percentage Of
completion. II this method Is followed
the income to be returned each year
during the performance of the contract
viii he computed upon the basis OF cx-
pcnses incurred or such contract dur
ing the year. Upon the completion of
the contract, IL Il IL found that as
result Of such estimate or apportion-
ment the income of any year or yenrs
has been overstated OK under-stated,
the taxpayer should file amended re-
turns for such year or years.
Question: % In May, 1918, gave
up lucrative position to 90 to Wash
ington to help the government in e.
ANAL though indirect way. was paid
government payroll. am married
nave been for some years-no children
or other dependents. Was compelled
to maintain my home here during my
absence, which continued until the first
Of tho year
Can deduct my actual living cx-
penses while in Washington? My ex-
pensea in maintaining my home were
just as great as though had not left
Il. My expenses in Washington were
an additional burden
~ l am buying a small farm down
South on monthly payments. Can
credit myself with these payments7
/ owe considerable sum for furni-
ture. am returning principal and
interest by monthly payments. Can |
credit myself with these payments?
Answer: % No. (2) You may de-
duet interest which you have actually
paid on Indebtedness during the tax
able year, but not payments which you
have made on principal.
Question: Own and live in two
family house. Rent out one floor On
blank 1040-A, under item &C." / am
showing rent received from tenant, and
made no mention of the rent value Of
the floor am living in. Is this correct,
or do / have TO include rent valae Of
.he floor am living in?
Answer. You are correct in the as
sumption that you do not have to in
ciude rent value OF the portion Of the
house which you personally occupy.
Question: Am widow with one son,
over eighteen. who is attending COL
lcge not In home town. ! am paying
sll his expenses, also keeping the
home. How much exemption should
havsl
Answer. Two thousand dollars a.
head Of q family.