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

( proval Of the Commissioner, changes
!: the basis VI computing net income
from fiscal year TO calendar year or
vice versa, or from one fiscal year 70
another, a separate return il required
for the period between the close Of
. the former taxable year and this late
designated az the close Of the new
taxable year.
Taxable Income
The income tax, exeega profits tax,
and surfaces imposed By the revenue
act are in general upon net income, l..
e., yroaz income less exepmt income
and statutory deductions and credits;
but in determining the taxable net in
come for the purpose of the surtax,
the credits provided in the case of the
normal are not applicable. Gross in
come includes all gains and profits
and income derived from any source
whatever, actually received for the
year for which return is made, wheth-
or paid in cash or otherwise, subject
u the specific exemptions listed in
sections 2l3 fbJ and 23l Of the new
law. Gross income excludes the Items
VI income specifically exempted by
statute and also certain other kinds
u income by statute Or fundamental
aw free from tax. Net income is the
amount remaining after taking from
groas income all allowable deductions
/ listed in Hection ga frelating to in
! diyid1alsJ 1r 234 f~relating To corpor-
~atipnsJ IF the new act.
Deductiona permitted by the new
iaW are the same, except for a few
minor changes, az those specified in
the 1913 Law. Briefly stated, they
include: ~ all ordinary and necesg-
airy ezpenseg, including travelling ex-
pen8ea which have not been deductible
heretofore; ~ interest on indebted
ness, except Indebtedness incurred to
purchase n~on-taXablc securities other
than war obligations Of the United
States originally subscribed for by the
taxpayer; 90 taxes, including federal
taxes Except income, war profits, and
excess profits taZes), stat and local
taxes Except taxes assessed against
local benefits Of Il kind tending TO in
crease the value Of the property as
scsscd), and taxes imposed by posses
giong If the United States or by for
eign countries Except the amount Of
income, war profits, and excess profits
taxes allowed AZ a credit against the
taZ); az losses sustained during tax
able year and not compensated for by
insurance Or otherwise; 81 debts as-
ccrtaincd to be worthless and charged
off within the taxable year, includ-
ing under certain conditions, losses
from debts recoverable only in part;
90 dividends received (a) from a do
nestle corporation other than one en-
titled to the benefits Of section 1852
relating to corporations which derive
income from sources within posses
sions Of the United States, or (b) from
any foreign corporation when it il
shown hat more han so per cent OF
it's gross income has been derived
from sources within the United
States; ~ depreciation allowance for
the exhaustion, wear and tear Of prop
erty used in the Taxpayers trade or
business, including a reasonable al
lowance for obsolcsccnce; 90 a reas-
enable allowance for amortization Of
war facilities if claim therefor was
made at the time Of filing for the tax
able year 1913, 1919, 1920, or 1921;
(9)a reasonable deduction for deple-
ton Of natural deposits and for de-
probation Of improvements; 1.-THE new
law limits this allowance based on
discovery value to the amount Of net
income, computed without the allow
ance for depletion, from the prop
, erty upon which the discovery is made,
except where such net income so com
puted is less than the depletion al
lowance based on cost or fair market
I, value az of March l, 1919; (10) under
certain conditions, n deduction may be
{ taken in respect of the proceeds OF
gains derived from the compulsory OF
involuntary conversion Of property in.
, to cash or its equivalent. In the case
/, of foreign corporations, or of corpor,
atoms deriving income from sources
within possessions Of the United
, States, the foregoing deductions arc
allowable only if and to the extent
, that they are connected with income
from sources within the United States
t In computing the ne income ether OF
individuals or corporations, no deduc,
tons are allowable in respect of (a)
personal, living or family expenses;
-: (b) any amount paid out for new
buildings or other permanent i'm.
~provements or betterments made t.
increase the value of any property o,
estate: (c) any amount expended in
restoring property or in making goot
the exhaustion thereof for which ar
allowance is or has been made; or ID
= premiums paid on any life insurance
policy when the taxpayer is directly OF
indirectly a beneficiary under such
, policy.
In case of the deduction for losses
no deduction is allowable 70 rany loss
claimed to have been sustained in any
r sale of shares Of stock or securities
made after the passage of the new
act, November %, 1921. where it ap
&, pears that within 30 days before OIL
= after the date of such sale the tax.
. payer has acquired identical property