Evening star., 1926-03-13
PROVISIONS OF REVENUE ACT
AID SELLERS OF REAL ESTATE
Carifcation of System for Making Returns on In
stallment Sales Simplifies Law-Stamp Repeal
and Depreciation Clause Helpful.

on a partial payment or long term
payment basis
"Under previous revenue acts there
was no express provision that, in the
case of installnent sales, tax returns
might be made on corresponding in
stallment basis, proportioned upon the
amount of payments actually received.
The Treasury Department from time
to time in Interpreting the acts for
administrative purposes, issued regu-
lations permitting returns on an in
stallment basis. The Board of Tax Ap
peals, however, in q decision handed
down in 1925. held these regulations
not justified by law.
"In addition to the clause of the
present act covering inStallment con
| tracts and definitely authorizing this
! procedure there is included in the con
| ference report Of the Senate and
| House an explanation Of this amend
ment.
Other Methods Opened.
This covers the situation as salts
| factorily as an amendment of the sec
tion itself would do Gen. MacChes-
| ney states, ''as the statements made
| by the chairman OF the two commit
tees are taken judicial notice of by the
courts in clearing up any question OF
| ambiguity and we have letter 10
| that effect from the committee on
| finance of the United States Senate.
! This leaves open any other method.
which might be laid down by Treasury
regulation, II is the belief of the com
mittee on finance of the Senate, and
| would seem 10 he justified by regula-
tions heretofore provided by the Treas.
ury Department under prior laws that
! the taxpayer would, in appropriate
cases where the paper received has no
! realzable market value. be permitted
to make q deferred payment return
upon the basis of the return of the
whole capital as represented by the
pro rata part Of the property sold be
fore returning any part of the pay
ment made as realized income in the
year in which such payment is re
ceived. Furthermore. the above state
ment by the committee. as stated, re
moves any ambiguity and leaves open
the right, as stated on page SO of the
conference report, TO make q closed
! transaction return. the language ot
the conference report being:
IF the taxpayer chooses. as a mat
ter of settled practice. TO treat an
entire transaction as completed in the
year in which the sale is made. it is
intended that that he shall have "a
right to ke a return for the whole
profit realized or TO be realized from
the entire transaction as income for
the year in which the sale is made:
and the House recedes with a clarity
ing amendment
The new installment amendment as
clarifying amendment makes clear
that the initial payments shall in
Clude only cash and property received
at the time of such payment and not
! evidences Of Indebtedness. Section
232 makes the same procedure apple
able to corporations while section 1905
; assures the taxpayers of the right pro
, vided by the new act retroactive unde =
, the revenue acts of 1916, 1917, 1918,
1921 and 1924 in appropriate cases in
accordance with the Treasury regula
tjons heretofore promulgated. hut
. which have been held unauthorized BY
CONTINUED on Twentieth PaEe)