Norwich bulletin., 1921-08-16

ble year. If the net loss is in excess of the net income fo the Dext taxable year the bill provides that the amount of such excess shall be allowed as a de- duction in computing net income for the taxable year following. Under the presentelaw losses must be taken for the year on which a return is made.
 Another amendment, drawn to meet a supreme court decision provides specifically for the exemption of stI;k dividends from taxation but says "a dis tribution made by a corporation to its shareholders or members shall be includ- ed in the gross income of the distribu- tees as to the date when the cash or other property is undualifedly made sub ject 10 their demands"
 Other changes set forth that the bas- is for determining the gain derived or loss sustained, acquired after February 2S 1913, shall be the cost of such property except that:'
 Property Acquired by Gift.
 In the case of property acquired by gift after December 31, 1920, the bas- is shall be the same as that which it would have been in the hands of the donor or the last preceding owner by whom it was not acquired by gift, and in case of such property acquired by bequest. devise or inheritance, the bas- is would be the fair market price or value at the time of such acquisition.
 In the case of the sale or other dis position of property acquired before March l. 1913, the basis of ascertain ing the gain derived or the loss sus- tained shall be the cost of the property or the inventory value, but, if the fair market value as of March 1, 1913, is in excess of such basis the gain to be in- cluded in the gross income shall be the excess of the amount realized over the fair market price or value If the fair market price or value as of March l, 1913. is lower than such basis, the de- ductible loss is the excess of the far market price or value as of March l, 1913, over the amount realized.
 In the case of the exchange of proper ty, the bill provides t1St no gain or loss shall be recognized unless the property received in exchange has readily marketable value, and even then excep- tions are made in several specific cas-. es.
 To meet the terms tf another deci- sion of the supreme court. the bill rede- fines capital gain and capital loss, de- claring the former to mean taxable gain from the sale of exchange of capital as- sets consumated after Decep\'eE 51, 1920" and capital loss to mean deduct ible loss resulting from the sale or eX- change of capital assets consummated after December 31, 1920"
 Capital Assets. .--....-.
 Capital assets are declared to incue property acquitted and held by the tax payer for profit or investment (whether or not connected with his trade of bus iness) but G>ss not include property held for the personal use sor consump- ton of the taxpayer or his family or stock in trade of the taxpayer or other property of a kind which would be in- cluded in the inventory if on hand at the close of the taxable year"
 In the case of any taxpayer other than a corporation whose ordinary net in- come and capital net gain together ex- ceed S32,000, the taxes paid would in- cude the regular income and surtax rates on the ordinary net income plus IS per cent of the capital net gain. or ;5ss 15 per cent. of the capital net loss, as the case might be.
 Legislative features.
 Among legislative features in the bill is one giving the Secretary of the treas ury, authority to issue S500,000,000 ad- ditonal short-dated securities, making the total authorization for such securi- ties S7.50O, 900, ,O0O. Secretary Mellon wrote the ways and means committee last week that this additional authori- tv was necessary "in order to carry out the tax revision prdogramme agreed upon at the White House conference last Tuesday and provide further for the financing of the short-dated debt" Another legislative feature amends the Liberty loan acts to make clearer ex- emptions from income tax of the interest on Liberty bonds, but it was stated of- fcially that no substantial changes in | the amounts of such interest to be ex- empted was made.
 With view to simplifying present tax return forms, the bill proposes creation of a "tax simplihcation board" to be composed of three members representing | the public, to be appointed by the pres l ident, and three members, officers of the internal revenue bureau, to be appoint | ed by the secretary of the treasury, the public representatives to serve without pay. The board would report progress | to congress each year and would cease | to exist after December 31, 1924.