Every evening, Wilmington daily commercial., 1922-02-20
TAX FORMS READY
FOR CORPORATIONS
Returns Are Due. Collector Ora.
ham Says, Thrso Months
After Fiscal Year.

Forms for reporting net incomes of
corporations. prepared in accordance
with tho Revenue Act OF 1871, are
available at the once of Marry T..
Graham collector OF Internal Revenue
for the district OF Delaware. Tho re-
turns are duo within three months
after the close of the twslvs-month
period which corporations have es-
tablished a. their accounting period.
The period must end on tho last day
Of some month and . corporation can
not change Its period without tho per-
mission OF tho Commissioners Of In
tcrnal Revenue
Mr.. Graham. In = statement issued
'Noday. explains the working OF the
new law insofar as It covers income
tax on corporations He says:
I'm ascertaining not income sub
tect to the income (norinaD tax, tho
corporation 10 allowed certain specific
credits. which include (l) tho amount
OF war and excess profits tax imposed
by tho United States for tho same
taxable year. and ca interest received
upon obligations Of the United States
and bonds OF the War Finance Cor
poration which has been included in
gross income. A specific credit OF
$4,000 10 also allowed corporations
whose net income for 1921 was $4,000
or less.
Tho excess prof,ts tax II computed
on the basis OF the relation Of net In.
como to the invested capital OF the
corporation. This tax 10 in addition I,
the normal income tax OF 10 per cent
II Is based on tho net income abov,
specific exemption OF $4,000 and
per cent OF the invested capital 10,
tho taxable year. these amounts beins
known as excess profits credits. TIL,
rates are the same as for 1920. 20 pc,
cent OF tho net income In excess O
excess proflts credits and not In ex
cess OF 20 per cent OF the investe,
capital Of tho taxable year (known a,
first brackct) and 40 per cent OF tn,
net income in excess of 20 per cent o
the invested capital (second bracket)
Invested capital for the taxable yea
is the capital actually paid In for stool
outstanding. including the paid-ii
surplus or profits earned prior TO tn
taxable year, which have not beel
distributed. The term Invested capi
tai does not include borrowed capital
Invested capital embraces tw
classes OF assets, those known as 'ad
miAible assets and those known a
k'inadmissable assets Admissible as
sets are those which produce incom
that is subject to income tax. Inad
missihle assets are those (other thai
obligations OF the United States
which produce income that is exemp
from income taxation.
'"rhe Revenue Act Of 1921 require
that oil corporations having mad
nlisslble assets must deduct from In
vested capital a percentase thereo
equal to the percentage which IN
amount of inadmissihle assets Is c
the total amounts OF admissible an
= inadmissible assets held during IN
taxable year
''The payment Of stock dividen
has no effect upon the amount of in
vested capital. Apprecia ton in goo
VIII and tangible property determine
by an appraisal against which
stock dividend was issued cannot /
allowed as invested capital.
The Revenue Act of 1921 provide
that every corporation joint stoc
company. association and insura nc
company not specifically exempt sha
file a return. A new and imporsar
provision of the new act Is tha
where a corporation is formed {
T svailed OF to prevent the impositio
9 OF a surtax upon It's stockholders h
; permitting it's profits TO sccumula
instead OF being distributed a. div
. dends, IL may be subject to a tax
I 2b per cent. In addition TO the no
}. mai tax OF 10 per cent imposed c
I corporations"