New-York tribune., 1920-01-20

INCOME
A-As your net income is less than
$1,000. you should file Form 1oioA.
Enter IN Schedule "k'' dividends received
Enter in Schcd'..e "B" the amount of the
pension received ron the Home Insurance
Company e Nov York.
If The scl.in, price OF your Plainheld
dwell. .ng vas 'Ncess OF is fair market
vaue a. 81 March !. 1913. such excess con-
stitutcs taN.lle ircoT.c and should be re-
ported sndSr schee nc p" If the selling
as OF March l. 1919, the loss is dcductible,
and ST, uld be reported under the same
schedule n rcd ink.
Also enter in Schedule "D'' the cost and
selling price. of your Liberty bonds and the
profit resulting from such sale; if loss,
enter in rcd ink
Enter n Schedule IF" rent received from
Enter in Schedule ~" the interest on
your "tay-frcc' covenant bonds. and in
Schedule "G' the tax thereon paid in your
behalf by the debtor corporation. Take
credit under Item "Q' for the amount of
tax pad by the debtor corporation.
Enter in Schedule &c" interest received
on mortgage and bank balances.
Enter under Item lo on Page of the re-
turn the interest received Liberty bonds.
Slncc tn interest is exempt from :ax. it is
not to be included in your gross income.
The facts given regarding items of Sla6
on fire insurance policies. are not sufficiently
definite 20 enable me- to determine whether
o. net they constitute taxable income.
DEDUCTIONS
Payments to a building and loan assoc "a
'ion are not allowable deductions unless they
constitute interest On in icbtedresS.
Amounts expended for United States Lib
ahle dcductions, and are only taken into con-
sidcraton in determining gain or loss arising
from subsequent sales thereof.
The item of $3l6.i0 expended for repairs
is allowable deduction, if such repairs
were not in the nature Of improvements OF
hetterments.
Commissions on the sale of Plainf d
dwelling. and legal expenses connected there
With should be deducted from the sale price
for the purpose of determining amount OF
gain or loss resulting from the sale of the
property, but not otherwise dcductible
from gross income.
Premiums paid on life and accident in
scrance policies do not constitute allowable
deductions.
The taxes paid on your westfeld and
Plainfed properties are deduct bile unless
assessed against lScal benefits of a kind tend
ing to increase the value of the property
assessed.
Amounts expended for water. rent, repairs
commission on rent and fire insurance
premiums in connection with your Westiielc
property are deductiblc items of expense.
That part of the item of l.S11.97 which
/ represents contribut .ons to organized chari.
! TICS, religious, educational or scientific n
stitutions etc. may be deducted to al
amount not in excess of H. per cent of youl
ret income without taking into cons ;oeratior
+ this deduction. That portion which repre-
aonts personal expenses cannot be deducted
/ Your personal exemption is the amount al
lowed by the government to persona
expenses. This exemption should be en-
tered under item "N on Page / of the re
turn and deducted from the net ncom.
shown in item M"
The item OF $1,000 representing tn,
amcunt paid to discharge the mortgage OF
your property is not allowable deductio ion
and has no bearing on your net income
The facts chat you have given with refer
nee 10 your transactions with the huild.r,
and loan association do not give sufficicn
details in order for me TO determine ,he
effect upon your net income. The amoun
c,edited to shareholders of a building an,
lean association. when such credit passe
without restriction to a shareholdcr con
stitutes taxable income for the year in whcl
credited Where the amounts of such ac
cumulntions do not become available TO tn
shareholder until the maturity Of a share
the amount of any share IN excess Of th
aggregate amount paid in by the sharcholdo
i income for the year of the maturity O
the share.
have assumed that your property il
Plainfeld ana in Westfeld was rented b
you to your and to ether tenants durin,
the entire taxable year, and has thus lo,
its status your personal residence an
acquired the status of business propert
producing income.