Evening star., 1922-01-17

| come. In some cases it is better to
| ascertain the value of the policy as of
| March l. 1913. and to add to this value
the premiums paid since that date
| IN order to ascertain the basis for de-
terrnining the gross income.
If A receives benefits under acci-
dent or health insurance or work
/ mems compensation acts as compen-
sation for personal insurance or i'll
ness. the amounts 50 received are
not part of his gross income; If he
collects damages for injuries caused
by accident. the amount thus col
lected is not part of his gross in
come.
Amounts received as compensation.
; family allotments. allowances under
the war risk insurance or vocationa
rehabilitation acts. or as pensions
+, from the United States based upon
war service in the Army or Navy arc
not included in gross income.
Item l2-Gifts and bequests are not
included in gross income, but any In
rents received therefrom is part o.
gross income.
! Space cannot be spared for items l.
! and IA. which canclude the discussion
of this division. They will appear il
the next article to b. published soon
! Questions and Answers.
| Q. I3)-In May. 1921, / sold som
bonds. purchased in 1916, at IA loss o
over $4,000. ! afterward purchased tn
same amount of bonds. but bearing
different numbers. May | deduct the
/ loss from my gross income?
+ A. Yes II the sale to which you re
j fer occurred after November %. 1921
! and if the repurchase took plac.
within thirty days after the said
i sale, and if the repurchased bonds
| were held by you for any period.
! then you would not be permitted t'
H., ina rad
@. G4-I would thank you to kindl,
answer the following question directl!
ar through the columns of The star
AT the end of 1920. il being impossibl
ito close certain foreign accounts on ac
count Of war conditions and alier
property custodian ccntr"i. and a new
firm having been formed. all thes
1920 accounts were left in SuSpcns.
and as there may finally be som
losses on the foreign accounts. car
the new firm set aside a iair reserve
twithout income taNationb to mee'
possible losses I" the old firm Ght
members being the same i'll bot
firmS)r
A. The answer to your question dc
pends upon the agreement brtw""'
the predecessor firm and the rr"Sen
one and the relationship Of the part
nerS to both firms. No reliable an
swer could be given y"n until all o
the facts were made available.
Under certain conditions is would
proper to set up reserve for fosSe'
which would constitute an ALLOWABLE.
deduction from gross income. or
dinariIy. the revenue department doe
not object to bookkeeping cntrIe
which do not affect net incomes.
@. u3)-tD | am he ID Of Il family
with two minor children and have :
gross income Of $4,000. Ny wife. al
though she lives with me, has les
than $1,000 gross income. If my WIZ
does not make a return for hersel
and refuses to give me her income So
that may add it to mine. what eX
emption can l claim on my incom'
tax return for 1921"
tb) In my case. which do You con
slider the most economical wa. frol
the point of view Of income taxi
combine our incomes, or to file sepa
rate returns"
4. tai S2,S00. but if your wife doe
not file Il return, YOU must includ
her income i'll your return; IL she doe
file return. she may not take an
exemption because Your combined eX
emption has been taken by You. tb
File separate retruns.
Q. I6)-I have an income of $40
and have paid tax for 1919 and 1920
Owing to increase of exemptions fo
head of family. l do not pay any fo
1921. Kindly let me know if ! mus
file return.
A. Yes: every person whose net in
come equals or exceeds 81 600 If un
married or $4,000 if married and liv
ing with wife or husband must file
return.
Q. G7)-PIeaSe answer the follow
ing: ta) May /, Il physician. charg
off travelling expenses between m,
home and office or to the hospital?
N 8
! suburbs. tb) Do l pay u tax, eXceD,
! that above the normal per cent. Of
income derived from the nance
stocks: American T. and T.. Genera
Electric. Atchison. Topeka and SAINT;
Fe preferred, Liggett & Myers pre-
ferred, Standard Oil preferred? &c
Do l pay any income tax on parce
Of unimproved Gin New York state
property. from which there is no in
come. acquired by deed Of gift? l pai6
! local tax of $3.50 on it during tn
! last year. IT is assessed for $4,000. tdl
| May l deduct the above tax from tn,
state income tax and from the fedora
income tax? (e) May | deduct tn,
amount of income tax paid to the
I federal government on the New York
state tax return and vice versa?
! A. (a) Between your home and your
office. no; but you may treat as allow
able deductions fares paid in connec-
tion with travelling to or from pa
tientS. (b) You pay no normal tax a,
all on dividends; dividends are sub
ject to surtaXes only: the taxpayer is
not subject to surtaX unless his in
come exceeds $1,000 (see a later ar
ticle for further particulars regard
ing surtax rates). (c) No. Cd Yes
| (e) The income tax paid to the state
/! government is deductible for federal
! income tax purposes. but not vice
versa
, IC~nan~