The Glasgow courier. [volume] (Glasgow, Mont.) 1913-current, 1922-01-13

emptions mentioned heretofore, are &c
follows: fay dividends ~ from z do
mestic corporation fother than q cor
pora.ion deriving income from sources
within possessions OF the United
States under the special provisions
covering such co~rporationsJ, or ~
dividends of foreign corporations, un-
der certain conditions, which derive
more than 80 percent Of their gross
income sources within the United
States; (b) interest upon obligations
Of the United States and bonds Is
sued BY the War Finance Corporation.
The credits allowed corporations for
the purpose Of the normal tax are:
fa) interest upon obligations ct the
United States and bonds issued by
War Finance Corporation; tb) a spe-
cific credit Of $4,000 where the net in
come in $4,000 or less; tc) excess pro-
fits taxes. The excsas-profits credits
consist Of a specific exemption Of
$1,000 plus an amount equal Of the in
Vested capital for the taxable year.
Net Losses
Under the 1918 law a buEiIesg op-
Grated at q net loss during taxable
year beginning after October 81, 1913,
and ending prior ~ January l, 1920,
could have ouch net loss credited
againg. the preceding taxable year.
The new Law allows a net loss in
Cured in trade or business in any
any taxable year after 1920 to be
credited against the first succeeding
taxable year, or the second succeeding
taxable year If such loss IL in excess
VI the net income for the first Sue
ceeding year to the extent Of such
excess. The only net losses recognized
are those resulting from the opera
ton IF any trade or business regular
~ carried On by the taxpayer. The
provision denies q met loss" as the
excess of the deductions allowed by
section 214 or 234, as the case may
be, over the sun Of: ~ the gross in
come Of the taxpayer for the taxable
year, ~ tax free income, 81 the
amount by which deductible losses not
sustained in such trade or business
exceed taxable gains Or profits not de-
rived from such trade or business, az
amounts received as dividends and al
lowed as a deduction, and - so much
Of the depletion deduction allowed
with respect to any mine, oil or gas
we'll as il based upon discovery value
in lieu Of cost. In view Of the fact
that March !, 1913, value is omitted,
it il assumed that depletion based upon
March !, 1913, value is deductit,e in
computing a net loss under this pro-
vision. +
Miscellaneous
Not all of the changes made in the
new law became effective upon it's
passage or are applicable to the cal
endar year 1921, and therefore no ref
crence il made to newe provisions
which do not become effective until
January /, 1922. Space does not per-
init a detailed discussion Of the whole
act, but among the provisions which
are Of general interest are those re-
iating to dividends, basis for deter
mining gain or loss, gold mining COM
panies, and procedure.
Dividends
Dividends Of domestic corporations,
except those deriving income from
within possessions of the United
States under the special provisions
covering such corporations, are not
liable to the normal tax on individ-
uals. Also dividends of foreign cor
porations which derive more than so
percent of the gross income from
sources within the United States un-
der certain conditions are free from
such tax. Stock dividends are speci-
fically exempted from the income tax
as required by the decision of the Su-
preme Court in Eisner v. Macomber
1852 U. S., 1897; but the subsequent
cancellation or redemption Of the
stock of a corporation making a dis.
tribution of stock dividends may op.