New-York tribune., 1920-01-03

o.. N. r.: and my sister, both
Of 1vhom are single, each receive SAL
ary of SEQ week. Instead of giving our
mother money for board tce Jointly pdy
all running expenses of the home. We
also haze an umcle boarding at our home,
paying $8 week board. In addition to
paying the Expenses of the home, 1oc also
support t1Uo children of my deceased
sister. DO zoe haze to file income tar
returns, or are aUe exempt? Hoa0 much
ta1 do qce pay?
A.-As single persons you must both
file returns, as you received $1,000 or
over during the year. From your state
ments it appears that your mother is
not wholly dependent upon you or your
sister. Therefore, assuming you are
tion as head of family, but each would
be entitled to $1,000 exemption. For the
same reason an exemption Of 5000 for
your mother as q dependent could not
be permitted. If your sister and your
self equally divide the expense Of main
tanning the children Of your dead sister,
either in your home or somewhere else,
you each could claim an exemption of
5000, assuming that you each bear the
expenses of one child.
&C. r.: A Ne,v York man owes me
$4,000. The only security ! had for this
icy for $500, issued March IS, 1899.
He borrowed $500 on this policy. He
defaulted the Jane, 1919, payment of
premium. The policy contains condi-
tiom that IN default the beneficiary auill
be entitled to q puid-ep policy for $1,SS7.
Instead of deducting the $500 loan from
the S1,SS7, the company sent mo q paid
Mp policy for s4S1. In answer to my
aohy, tho company tells me under the
state insurance luws it is nllo1Oed TOT
make the amount $4S1. Can / claim
any deduction for this loss?
Aft you are resident you are en-
titled to deductible loss of $3.50 as a
bad debt, assuming that the value Of the
policy on January l, 1919, was $4,000.
Q.-K. M. G.: -Four years ago / bought
a fetV shares of stock outright. l sold
them this month at q loss. An, per-
nsitted to deduct this loss from my SAL
Uried income in making out mn returns
for 1919?
A.-This being property acquired be-
tore January I, 1919, your deductible
loss, 1t you are resident, would be the
difference between the fair market price
or value Of it on January /, 1919, and
it's selling price. In the case of securi-
ties dealt in on q recognized exchange,
the fair market value on January /,
1919, will ordinarily be determined by
the average of the bid and asked prices
after closing on December 81, 1918. In
all other cases other evidence of value is
necessary, and bona fide sales nearest
January l, 1919, of securities publicly
or privately dealt in will be considered.
Q.-My husband died in October, 1919.
Since that time his former EMPLOYERS
haze paid mte monthly the amount equal
to the salary a0hich he received. Is this
q compeMsGtion to me and do I report it
as income?
A.-Yes, this should be reported as in
come to you.
Q.--During 1919, .Ohile acas pesma-
a'ently. residing IN Buffalo, sent 500
monthly to help support my mother, hv-
ing qcith my sister IN Brooklyn. Am I
considered the head of family and a.
lowed $4,000 for this payment?
A.-You are not the head of family,
because you are not supporting your
mother in the same household.
Q.-During the gear gaze $3.50 to
the War Chest Inc. and contributed $3.50
to the sys.uyogue. NM net income was
$500. Nay claim this amount as de-
duction for charitable purposes?
A.-No. You are only allowed to claim
as deduction Is per cent of your net in
come. This amount involved 20 per
cent. Therefore, you would be permitted
deduction of only 1915.
Q.--I am q widoi0, ,oith taco children
evho are under eighteen gears of age.
They arc n, p,epara tory schools distant
from our home. I am keeping up the
family house and paying their eapenses
What is n,y ercmptions
A.-$2,400, because you are the head
of a family with two dependents.
Q.-At the death of my atncle he pro-
vided for monthly payments to me of
$3.50, to be paid out Of his estate. He
died January 1, 1919. Is this bequest de-
ductibfe? / INFESTED the $500 during
1919 aud receive interest from tho bonds.
How do / treat this amount?
Aft this is paid from income Of the
C1 q Is.