New-York tribune., 1920-02-16
Federal Income Tax Questions
A"s'0eTed for The Tribune by Morris Frey assssa,
treasurer Guaranty Trust Company

I-rerptersd: NY Wtfe a6dndoned me
iHss : ".l yaM and on the ddvscs Of my attorney
am stu maintaining a -sside1ce for her
TO come to. Theirs has been no k1N separc-
Nay I claim, $4,000 cne,sptom for the ten
months1 II not. arhv mott
~ A.-The Tressury DepartmcAs has ruled
residence together. whether 81, not man or
woman has wife or husbAstd living with
her or him within the meaning Of the
.tatute. must depend on We lAEseser Of the
pcrarily wife Is away % q War or a hus- u,
band ia away on business. tha ioint home
being maintained. the additional exemption
soiunar; and eontnSoy 1T nowsy'r the husband
at one place and the wife hem at another,
they are not living together for the purpose
cf the statute irrespective of their personaj
relations"
Q.-J: s.: am a single man .oho hos an
am the sole support. Would I be consid-
cred as the head of family?
Aft you maintain household and SUD-
port your sister therein. you are the head
OF family" within the meaning of the law
and as such entitled to q personal exemption
Of $4,000. You are also entitled to an ad.
ditionaI exemption of 5000 if your sister is
ta) under eighteen years of age, or (b) in
capable of sef-support because mentally OF
physically defective.
Oh. w.: have been asked BY firm
doing business as a partnership to make un
their income tar report. They have been
Keeping Their books on single entry and haze
rot kept such accounts as sales sales re-
t,'rns. purchases, e9pensc accownts. etc
Form 1000 calls for q statement of all the
cboue and great deal more, Ho,0 can
.ore fhis Information auhen no accounts were
L1>4
furnish balance sheet based on physical
Inventory Of the assets. l might add thia
partnership has been doing business since
February, 1919.
A.-The Treasury Department will require
you to furnish detailed inforynation with
purchases. inventories, ex1ssxs accounts
ETC.. or such information % .pnsv be neces-
cary to determine your net Asesme for tax
purposes.
o..G; 4. H.: NY gross As.o..s for 1918
derds. After deductions ~s& cr~d{ss, encept
perso''al exemption Of $4,000 asd $50 real
estate taaea paid, my tsoo.n% fer Federal
toxes 4s Sl.741, aud for stats tSscs IS s1.997
= the difference being d~e Ia sas5 receired
in dividends whieh / understasssd Is ere1tpt
in the tar and not IN tie other. Do
make rcport7
Al assume that you are either mar
r'eu man OF tne head or family, as de-
fined in the law. If married and living
with your wife you are not required to lle
q state or Federal return If unmarried
and the head of family" you are re-
Quired to file both n Federal and state re.
turn. although not subject to tax in either
instance.
Q.-X. y. g.: broke dorm IN, heolth last
summer and was hurried of to a health re-
sort uhcre hare been ever since in az
n1It
employers have continued to remit me regu-
tdrlp equal to my jorncr saldry Il
this smn, Which has been paid me during mn
illness exempt, and il so, ho,c should it be
am odpiscd that legally salary is defined
as .compensation for services rendered. >
As have been unit and unable to rcnde,
aerrices. mhat has been paid me since m,
oreahdo1'n can scarcely be said to be salary
A.-unlcss the salary paid you during
your illness. is pure gift or 9ratuity on
the part Of your employers it represents
taxable income in consideration OF services
ON. B.: Nv total ;ncoms for 1919 .po.
s1.194. Eight hundred and fjty-eight dol.
lars Of this aras earned from tedchino public
school.
(al Are teachers salaries erer.pt from
tho Federal income tar?
(b) Do have to file a rets,m7
A.--SalarleS OF pubic 9chOOi teachers are
exempt from Federal income tax. You are
not required to file n return.
Q.-S. G. H.: single +4en's income Il
orer $1,000. Dcductin0 income received
from army pay for first i've months of year
his income from, other sources is less thar
$1,000 Is it necessary for nan. to file either
state or Federal return?
A.-Under the Federal law You are not
subject to tax and not required to file
return.
The State Comptroller has recently ruled
that unmarried persons having taxable
income of less than 81 900 are not required
to file return. even though, as in your
case. there appears under the law to be a
liability to tax.
Cd. F. F.. jr.: Please adciec If bonus
not erpected but received at the end of the
gear must be included in ta1 return?
A.-The bonus referred to Is taxable in
come for the year in which received if il
represents sum paid in addition to the
stipulated salary wages Of an employee
NJ additional compensation for services
actually rendered by the recipient If tn.
bonus is not compensation for services rem
dered but pure gift or gratu:ty On the
part of the employer without any clement
of compensation, it is not taxable income
in the hands of the person receiving the