Evening star. [volume] (Washington, D.C.) 1854-1972, 1922-03-09

this period is six years. Accordingly.
What you had found cannot be deem-
I'd to be your own until the peflou
has expir ed and should not be treated
as income" IT least until then.
/ doubt very much whether. under
stitutcs taxable income. My advice
is not to treat it as such, unless
ruling to that effect has been obtain
ed from the commissioner OF internal
revenue.
Q. Q51)-In case where no profits
were made during the year 1871. but
expenses were met with cash saved
from the year before, is it necessary
to file an income tax report, or must
one be filed whether there was any
income or not?
A. Not unless the gross income
though there was no profit. l assume
that you do business as an individual
and not as corporation.
Q. G52)-I maintain a home for
self and ward. Although never
legally adopted, she has been an as
years, and through physical infirm-
tiles is not wholly able to take care
of herself. Am l exempt as head of
the house for $4,000 and for care of
her for $500?
A. If your net income does not
titled to exemption Of $4,000 plus
s4c0. If your net income EQUALS
$4,000 or more you are entitled to
exemption of $4,000 plus $500.
Q. I5S)-Several years ago cor
po-ation sold stock at par. giving
term note or bond with coupons at
tached The note specifically states
that 1t is to be paid at the end of ten
years out of the. profits of the cor
poration and in no other way, and
has no reference to mortgage or
trust.
No interest has been paid on the
note for some time. but. as it Is not
covered by q mortgage, nothing can
be obtained on it. The note is trans
ferable only with the stock and at
the present time the stock is worth
less, there being no market for 1t.
The stock was purchased as an in
vestment by an individual in another
business. Can he claim any deduc-
ton from income tax return, as
, bad debt in case OF the note. or for
loss on this stock it is impossible to
dispose of?
A. Inasmuch as you state that the
note cost you nothing and was not
considered as of value when you sub
scribed for the stock. you suffer no
loss if the note fails to produce value
for you. Your statement Is probably
must be governed by the facts as
you present them.
Unless the corporation is insolvent,
or unless you can otherwise prove the
worthlessness Of the stock, YOU can
not write off your investment as a
loss If you do not actually sell the
stock.
@. (154)-Kindly state what profit
exemption corporation is allowed
for United States income tax: also
whether New York state allows
corporation any exemption, or wheth-
er it is arbitrary for them to pay Ar
per cent on profits?
A. First $4,000 is exempt from fed
eral normal tax unless the net in
come of the corporation equals or
exceeds $4,000 (section 236-b).
@. G55)-My brother and myself
jointly support our widowed mother.
why can we not secure an exemption
Of $1,000 for her support? We have
been told that we can't.
A. The exemption for your moth
er's support cannot be divided. One
of you only, may claim exemption as
head Of family for $4,000 Cor $4,000.
as the case may Beg. plus $500 for
a dependent. The exemption of $4,000
is taken if your net income does not
equal $4,000; If it does, the exemp-
IN is only $4,000.