Pueblo chieftain. (Pueblo, Colo.) 1889-current, 1921-08-04

nuS1neS'S men, par llNuldii ~
turers, keeping an accurate and de-
tailed report of their flood losses for
the purpose of facilitating the making
of income tax returns was given yes
terday noon at the weekly luncheon
of the Pueblo Manufacturers associ-
alton by A A. Hilton of Colorado
Springs, His address in part follows;
In considering the matter of record
ing flood losses, it would seem that
there are two points which alone
would supply sufficient reason for Civ
ing this matter particular and ser
ious attention: viz, proper informa-
ton relative to the operation of your
business. and proper records for In
come Tax purposes.
In the first place, every business man
should desire definite and accurate IN
formation in connection with the
operations of his business. This is of
greater Importance to him, in so far
as the success of his business is con-
cerned than any information which the
government may desire for Income Tax
purposes.
However. tho the government de
mands may he secondary to the I'M
portance of financial success. they de-
serve special consideration because of
the annoyance, trouble and expense
saddled on the tax payer at some fu-
ture date, by reason of having insult
ficient records.
For information which will guide you
in the profitable handling of your af-
fairs you must look to the exact items
entering into the operations of the
business nuder normal conditions. and
one can readily see that II the ex-
penses of temporary or abnormal
condition or a flood loss should be
mixed or incorporated into the opera
tons of your affairs, you would com
pletely destroy any information which
YOU might desire and which might be
helpful for the purpose of conducting
your business on a profitable basis.
Therefore. you want to know exactly
what your business is doing under nor
NAL conditions, as il is under such
conditions YOU will be compelled 70
work the greater part of the time.
The other very important point in
connection with food records. is that
of Income Tax.
We will assume that all losses must
be deducted in the year 1921. which
is the case unless special rulings are
made to The contrary covering thIs
particular hood. 1t. is barely possible
that some Tires uf BUSINESS may have
had an especially good year 10 June
LIST. and accumulated a good profit and
that the loss sustained by the flood
will NOT eliminate all OF that proft
Therefore, there will still be an IN.
come tax to paw. In such cases, II Is
quite desirable that full deduction
is received for this loss to protect tho
tax payer against the pawn ss.t of taxes
on any amount not earned. The Sc
curing of this deduction as an Al
lowance thru the revenue oifce win
depend largely upon the manner in
which the information is IA -n.shel. III
correctness with which IL is set forth,
and the records with which TO hacS
up the claim.
After all is said and dom, 4 the
food loss does not happen to b. r,
ported with the information furnished
exactly. according to the ideas ~
some department head, or according
to the rulings or regulations formulated
for that purpose by the revenue Office
it means that you not only may be
compelled to pay additional and undue
taxes. but that, in order to protect
yourself. and prevent the payment Of
such undue taxes 1t will require lot
Of expense and annoyance before the
matter is finally settled.
II we knew exactly what tho de-
mands would he along this particular
line. II would be an easy matter to so
arrange our records to compile this
informa ton, but in tho absence OF such
knowledge. the best We can do is to
carry out the plan Of recording our
business as the business man would
want it, and at the same time make
provision for furnishing from the same
source all information that you can
possibly guess the other fellow viii
dream Of.
Everyone affected by the flood has
had a large expense in cleaning up
the promises. Many have had large
amounts OF damage done to equipment
and buildings. In some cases. II is
a matter Of repairing such equipment
to bring II back to the efficiency and
working condition which existed be-
fore the flood. and IL Is impossible to
lay down a fixed set manner OF handl-
ing such matters. Some, OF course.
have reserves set up for depreciation.
which covers only the usual wear. tear
and obsolescence of the assets, no
provision being made for special flood
losses.
In the handling or the replacement
or repairing, due to special loss. there
is no reserve for that purpose. In
some instances the asset will be wiped
out entirely. thereby eliminating both
the Reserve Account and the Asset
Account. an II Is a total loss In some
instances there will he a salvage val
ue. In others, it will require only
certain amount OF repairing and work
ing over to bring tho equipment back
to it's original value before being dam
aged by tho Hood. and your reserve
account is not for that purpose. and has
not been set up for such q purpose.
1t might he we'll to caution you
against being too quick to close up
and determine the exact loss. You viii