Evening star. [volume] (Washington, D.C.) 1854-1972, 1927-01-29
REAL ESTATE BOARDS SEEKING
CHANGES IN REVENUE MEASURE
National Association Charges Act of 1926
Is Working Serious Injury to Bust
ness All Over US.

Changes in the Federal revenue act
Of 1926 in regard to administrative fea-
lures held to be working serious and
unnecessary injury to the real estate
interests of the country are asked by
the National Association of Real Es-
tate Boards in a brief which has been
put before every member of the finance
committee of the Senate and of the
ways and means committee of the
House.
The brief is submitted by Nathan
William MacChesney of Chicago, gen.
eral counsel of the association, and
has been prepared under the direction
of the associations committee on Fed
eral legislation and taxation, of which
Henry lander of Chicago is chairman.
1t asks for changes in the present re-
quirements as to reporting income
from sales of real estate made on the
installment plan, reporting deferred
payment sales of real estate not on an
installment plan, reporting real estate
sales made through real estate syndi-
Gates and trusts, and for a number of
other matters in which the present
Federal revenue act is making re-
quirements held by the association to
be unjust or seriously out OF align
ment with well established business
practices.
Serious Injury Charged
Unless the situations covered by
substantial part of the amendments
suggested by the association are met,
serious and unnecessary injury will be
done to the real estate interests of the
country. A grave injustice to the in
dividuals affected win be perpetrated
and an unnecessary loss of ultimate
revenue to the Government will oc.
cur" the brief states.
In "a substantial number Of cases,
notably for instance, in the treatment
of deferred payment sales of real es-
tate, the interpretations which the
Treasury Department has put upon
the revenue act have, in fact, robbed
the taxpayer of the exact benefit con.
templated by Congress, the association
holds. in other cases, notably in the
matter Of instaIlment sales, the Treas
ury Department penalties the tax.
payer for taking advantage of the re-
lief granted by Congress in the rev.
enue act of 1926.
The association therefore asks that
the joint committee of the Senate and
House, created under section 1903 of
the revenue act of 1926, be called to.
gether for a consideration of the prob
lem presented to real estate over the
country by the present administrative
Interpretation of the revenue act, and
that In view of the emergency char.
acter of many of the matters which
the association brings up. legislation
for these matters should not be post
poned until after Congress meets
again in December, 1927.
The contention of the association as
to changes which are needed in the
revenue act in regard 10 matters af.
fecting real estate is in detail as fol.
lows:
~ Lot bases In subdivisions-Th
subdivision rather than the individual
lot should be considered as the basis
for determining profit
(2) Installment sales-Section PIP Id
OF the revenue act OF 1926 should be
amended so as to remove the rs per
cent initial payment limitation on in.
stallment sales.
t3) Deferred payment sales not on
installment plan-The statute or regu.
lations should contain such an explicit
definition of the term fair market
value" as to remove from the realm
o: individual opinion, the determine.
ton of the question as to whether or
not obligations. of purchasers have
fair market value.
Apartment Clause.
Nl cooperative apartments - Ia
Corporations for the construction OF
cooperative apartments, at least where
these are 100 per cent individually
owned, should be exempted from cor
poration income taxes and from the
necessity Of making corporation in.
come tax returns. as in the case of mu-
tual corporations for hail insurance,
etc. (b) Owners of cooperative apart
ments should be permitted to take as
deductions from gross income any as
sessmenls made against them for the
purpose of paying interest on bonds
or mortgages, taxes or any other ex-
penses which would be deductible by
the individual cooperative owner If
paid by himself
(5) Commissions for obtaining long
term leases-Commissio paid by Ell
Their the lessor or the lessee for OBJ
tanning long-term lease should be
considered as expenses deductible in
the year in which they become a def
mite liability, instead of being consid-
cred capital expenditures to be amor.
tiZed over the period of the lease.
(6) Syndicates and trustS-If cant