Evening star., 1922-03-15
Klein. All rights reserved.)

answers to income tax questions with
much interest and l have question
which ! do not seem to be able to
settle by reference to the regulatio
(a) Suppose citizen Of the United
States and residing therein has
and interest due from parties in Can
ada and that upon receipt Of pay
ments from time to time he leaves
the same in Canadian banks. Should
the money so received be included in
! his income return?
case of dividends or bond interest on
foreign holdings?
A. (a) Yes.
(b) Both fully taxable.
Q. (200)-On March !. 1913, man
+! had some stock having a market
had paid 500 some time previously.
! At this time he donated the stock to
his wife, who in 1921 sells the stock
at $3.50 per share. Assuming that
the wife files a separate return, how
shall she report the above?
@. (2o2)-The federal income tax
| blank for amounts under $1,000 states
that dependents must be receiving
| their support on the last date of the
! taxable period. ] have been the sole
! over eleven months Of the year. but
was not supporting them on the last
day Of the year. Is there no deduc-
| tion allowed for this expenditure?
A. No. Under the regulations. your
status on December 81 governs. This
! Is unfortunate in your case.
Q. (203-(a) A corporation having
insured its Officers. for which the
company has paid the premiums. will
II oe required to pay tax in the event
| that any of the officers should die
| and the amount Of insurance collected
| (b) In accordance with the stamp
! tax law, 1t is necessary to put o.
cent stamp on the original issue of
| stock, and upon transfer Of same
a 2-cent stamp. both of the federal
and md the state tax When stock is
and again reissued, is it necessary
| for the company selling the stock
| from the treasury to put 2-cent
federal and state tax stamp on same?
a. "a No.
Q. (204-Are the luxury taxes
| such as on theater tickets, railroad
tickets. etc. deductible, under this
heading: Tax paid at source? II
not. are these taxes deductible at all?
Q: t2o5-Last year my employer
! weeks to a branch office He paid
| my room and board. Do 1 have to
| add anything to my salary when
filing return:
/ A. No.
Q: t206)-I purchased a house in
1917 for $1,000. made additional i'm
proyements amounting to $500, sold
in 1921 for 10000, taking back a
| mortgage for $4,000. What do 1 pay
tax on? How can l figure a profit
when l have not received any as yet?
A: l assume that the house was
used as your home On the assumption
| that the mortgage was a per cent,
nrst mortgage. report $500 as profit
! II the mortgage has not "a readily
reaiizabie market value" report no
pront until the mortgage has been
paid or otherwise disposed of.
Q. t207)-ls it allowable to deduct
| the total balance due from a stock
exchange house which has failed, but
| which in course of settlement may
repay some undetermined percentage
/ is understood that the amount recov-
cred, If any. would be returned as in
| come the following year
A. II you can fairly estimate the
probable loss you may deduct such
''ss q. teos,-1 am a Salesman and dur
ing the year 1921 the company by
| which I am employed, together with
myself. purchased on a ffty-fifty
! basis Ford coupe with the under
| standing that we would go half and
half on. the, expense of the car as
well. Kindly advise me whether the
above Is deductible item from my
personal income tax, and just how /
| would go about deducting same.
| A. You may deduct one-half of the
cars annual depreciation and one
! half OF expenses of maintenance. pro-
vided you use it exclusively for busi-
| ness purposes.
q. cost has developed on me to
prepare the 1921 income tax return
cally incapable), who owns a consid-
cradle amount OF real estate (apart-
meflt and private houses, stores, va
| cant lots. etc.). and has done SO for
many years past. I should be great
ly obliged If you would enlighten me
i on the following points:
! (a) How can the value Of the prop
erty be determined as of March 1.
| 1913 (would 1t be by the assessed
i valuation at the timeO. and what per-
| centage is allowable for depreciation
and depletion, and how computed?
tb) What is meant by the "esti-
mated life OF the property?
(c) Are state and federal income
tax payments deductible?
| A. (a) By disinterested expert ap-
| praisers tunless you are willing to
| value). Nothing allowed for deple-
ton. From 2 per cent to 4 per cent
on cost Of buildings (or on March 1.
1918, value, II acquired by your client
] prior thereto). may be deducted as de-
| probation.
| (b) in your case the life expectancy
| Of the buildings after they were ac-
quired by you Cor after March /, 1913,
If acquired prior theretoi.
(c) State tax is deductible on the
| federal return.
! O. If merchant who is in financial
difiiculties settles with his creditors
! on a so per cent basis is the 50 per
| cent allowance thus obtained an in
come for tax purposes. to be reported
in the year in which the settlement
was made?
A. Treasury officials say. NO"