New Ulm review. (New Ulm, Brown County, Minn.) 1892-1961, 1919-03-05
BIC INCREASES IN
SIS TAXES ON INCOMES
II 80 q So "a -. (.
Continued from page i. y

is put and its probable lifetime under
normal business conditions. No spe-
cific rates at which it may be claimed
have been established. To compute
the amount which may be claimed,
the taxpayer should determine the
probable lifetime of the property, then
divide it's cost to him by the number OF
years of such life The result obtained
viii represent the amount which may
be claimed each year as deduction.
For example, frame building, the
probable lifetime of which without re-
pair is twenty-five years, costs $4,000.
Divide SIS, 0Oogby twenty-five and claim
5000 each year as depreciation. 1t
is estimated that the average lifetime
OF. a frame building is twenty-five years,
a brick building thirty-fve years, and
a stone or concrete building fifty to one
hundred years. The estimated life of
an ordinary machine is ten years, and
that of automobiles used for business or
farm purposes, four to five years.
If the taxpayer claims the full amount
of depreciation he cannot claim as a
deduction the cost, Of repairs to the pro
perty during the same year which offset
or make good the depreciation. II he
wishes to claim a deduction on account
Of repairs, their cost may be deducted
from the full amount OF depreciation
and the balance may be claimed under
the heading Of depreciation. For ex-
ample, if the taxpayer expends $500 IN
repairs to building which will dep e
ciate 5000 in value during the taxable
year he may claim 500 as a business
expense and 500 as depreciation, or he
NAV claim 5000 for depreciation and
nothing for repairs. In short, the
aggregate deduction claimed on account
Of repairs and depreciation must not
exceed the full amount of depreciation.
No depreciation is allowed upon the
value OF land.
Fiduciaries and Partnerships.
Fiduciary returns are required Of
persons or corporations holding in trust
the estate Of another person, the net in
come Of which equals or. ecxeeds 81, 600
or $4,000, according to the marital
status of the beneficiary.
Partnerships as such are not subject
to the income tax, each partner being
liable to the tax in his individual capacity
A partnership, however, is required to
make return for the taxable year,
which should be computed on the same
basis and in the same manner as an
Individual return.
Gross Income.
The question arises what's the amount
to be included under gross income" in
all income tax returns. The answer
to this is given by the office of the
Collector of Internal Revenue. E. j..
Lynch, St. Paul, MINI. In making out
his return Of gross income, he says in
one of his circulars on income tax re
turns, the taxpayer is required to ac-
count for practically every dollar he
received during 1918. The following
items must be'reported: -.
=: Salaries, wages and commissions for
personal services, including bonuses.
= Interest received on notes, and deposits
in banks including savings banks.
Z: Dividends on stock, whether received
in cash Of. in stock. Only dividends
paid out Of earnings or profits accrued
since March LIST, 1918, are taxable, but
dividends are deemed to be distributed
out Of the most recently accumulated
earnings.
: Profits resulting from purchases and
sales Of all property, real or personal.
Il the property was purchased before
March Isl, 93, the profit is based on
the difference between the selling price
and the fair market price or value as Of
March l, 1913.
Profit from stock market transactions
Income received from fiduciaries, that
is amounts received from income Of
est ates, trust, etc, through trustees
administrators ard executors.
Net partnerships profits, whether di-
Vlded Or distributed or notE
Royalties from mines, oil and gas
wells, patents, copy rights and franchises.
The following items are not taxable
and need not be included in the return;
Property received as a gift or by will
or inheritance. 1t must be understood,
however, that the income derived from
such property is taxable.
Proceeds Of life Insurance.
Returns Ct premiums on life endow-
r2ent and annuity policies.
Interest on securities issued under the
provisions CT the Federal Farm Loan
Act of July 18th, 1916.
Amounts received through accident
or health insurance, or under work1nan's
compensation acts, plus the amount Of
damages re eived, whether by suit or