Harrisburg telegraph. [volume] (Harrisburg, Pa.) 1879-1948, 1919-03-07

"1E language or the law concerning
the taxation of the income from
trusts and estates is vastly simpler
in the new revenue act than in any of
its predecessors. Three conditions are
named in which the income tax is paid
by the fiduciary. These conditions are
CD that the income is received by the
estate of a deceased person during the
period of administration or settlement
of the estate; (2) that the income tax
is accumulated in trust for the benefit
of unborn or unascertained person or
persons with contigent interests; CD
that the income is held for future dis
tribution under the terms of the will or
trust. Two conditions are named in
which returns are required from fiduc-
iaries, but the tax on the income re-
ceived is paid to the beneficiaries. The
conditions here referred to exist If the
income is distributed to the beneficial
ries periodically, whether or not at reg
ular intervals, or IL the income is col
lected by a guardian of minor child
to be held or distributed by him as the
court may direct In determining the
net income of any estate during the
period of administration there may be
deducted the amount of any income
property paid or credited to any legatee,
heir or other beneficiary.
Net income of trust or estate ls 10
be computed in the same way ana on
the same basis as is authorized III tIe
court OF individuals except that there
shall be allowed as a deduction any
mart of the gross income which. pur-
suant 10 the terms of the will or trust
is during the taxable year paid out OF
permanently set aside for exclusively
religious. charitable, scientific. or ed
ucational purposes. or for the preNentloli
of cruelty to children or anlmas
In the case of income distributed 10
the beneficiaries periodically, or income
collected by the guardian oil a nliIoI
child to be held or distributed as tne
court may direct the distributiVe snare
10 which each beneficiary is entltieu'
whether distributed or not, is 10 pe IN
cIuded as a part of his net income, ana
such beneficiary is to be allowed Ior
the pupose OF the normal tax 10 clalh1 I
additional credits based on ms share VI
Liberty Bond income and dlVluenus I,e,n III,
domestic corporations. For eNaihpie,
take fine case of a trust which consisted
of i. 900 shares of stock in the Last Nat
ional Rank of New York on which ulVl-
dends of 100000 were earned ana paiu
In 1o1S. 81. 600, 900 of Liberty BONDS OF
various 4 IA per cent issues iIoiI
urbich interest was received amounting
70 soA 600 and 100000 of corporation
bonds averaging a per cent lncolhS re-
turn. Assume the income TO nave pee"
regularly distributed equally 10 two por ,,-
eficiaries. Then each beneficiary ono
t;tled to claim the receipt OF Soo'oVV
hanls stock dividends. $4,000 Liberty
pond interest and $4,000 corporation
bond interest Whether ~
,"onid have any normal tax to pay on
bis share of the income Represented Wy
dividends or Liberty BOND interest,"
zach beneficiary in the case cited woulo
he reouired to report the receipt OF lne
income above indicated in his personal
income tax return, in addition 10 any
income which he received from otnel
sources. The tax calculation Wouid sneH
be made as for any other lnuiVluuai
is used to emphasize the fact that III
come from an estate, like other income
is taxable, according to its nature.
A fiduciary Except receivers APP
pointed by authority of law in pos
session of part only of the property OIL
an individually is required to make re-
turn on behalf of the individual estate
or trust for which, he acts, II the net
income of such individual Is $1,000 or
over ~ single, or if married and not
living with husband or wife, or S2'oOo
or over il married and living with nus
band or wife, or II the net income Oh
such trust or estate is $1,000 or over
of if any beneficiary of any such estate
or trust is a nonresident alien The
return must state specifically the items
of gross income and the deductions ana
credits allowed under the law. The
fiduciary should file the return in the
office of the Collector of the district IN
which the fiduciary lives.
The provisions of the law affecting
individuals apply equally to fiduciaries
who are required under the~ terms of
the new Revenue Act, to make returns.
In addition the fiduclary is re-
uuired to make oath that he has
sufficient knowledge of the affair
Of the individual trust or estate
for whom he is acting. to enable him