Evening star., 1933-01-31

gregate net income for 1882 Of $4,000
or over, each must make a return, or
the income Of both must be included
IN a single Joint return.
Read Instructions.
In order to avoid errors the Bureau
of Internal Revenue urges careful read
ing Of the instructions on the forms
before a return is prepared and nled.
Additional information, If needed, may
be obtained at the office Of a collector
of internal revenue or deputy collector,
or Of an Internal Revenue agent.
Under the law returns must be filed
on or before March Is, 1888. with the
collector Of internal revenue for the
district in which the taxpayer has his
legal residence or principal place of
business At the time of filing, at least
one-fourth of the tax must be paid.
The taxpayer may, if he desires, pay IN
full at the time of filing.
The act imposes severe penalties Tor
failure to file q return or pay the tax
on time. For any failure to file
return en- time which is not due to
reasonable cause. penalty OF Is per
cent of the amount of the tax is i'm
posed. In addition more severe penal
ties are provided for willful failure to
file q return on time and for willfully
making a false or fraudulent return.
Stock Losses Limitation.
Certain new provisions are contained
In the revenue act of 1882 under the
aforementioned heading limiting the
deduction for losses sustained on the
sale or exchange Of stocks and bonds
which are not capital aSsets-that is.
which have not been held for a period
of more than two years. In accordance
with the limitations, such losses may
be deducted only against gains from
similar transactions for the year, al
though the amount of the excess of
such loss disallowed as deduction for
the year 1882 may be carried forward
and taken as q deduction against gains
from similar transactions gains from
sales or exchanges of stocks and bonds
held for two years or less for the sue
ceeding year to the extent of the tax
PAYERS net income for the year 1882.
The above mentioned limitation Is in
general applicable to all taxpayers. BY
the terms of the statute, however. the
limitation does not apply to dealers in
securities as to stocks and bonds ac-
quired for resale to customers or to
banks or trust companies incorporated
under the laws of the United States or
OF any State or Territory.
In defining stocks and bonds" for
the purpose of such limitation, the
statute specifically excludes therefrom
bonds issued by . government or po-
1itical subdivision thereof. Such ex-
by the Government of the United
States or State or political subdi-
vision thereof. but also includes bonds
issued by a foreign country or foreign
municipality. It therefore follows that
the deduction for losses sustained on
the sale or exchange Of such bonds Is
hot subject to such Limitation.
Items Exempt From Tax.
Certain items are specifically exempt
from the income tax and need not be
included in the taxpayers return for
the purpose of determining gross In
come. Among such items are the pro-
ceeds from life insurance policies paid
upon the death Of the insured: amounts
received as gifts, bequests, devises or in
herltances interest on municipal bonds,
State bonds, bonds issued by the pos
sessions Of the United States, Federal
farm loan bonds, and certain bonds Is
sued by the United States Government;
and amounts received through accident
or health insurance or under workmen's
compensation acts for personal injuries
or sickness and damage received on ac-
count Of such injuries or sickness.
All types of compensation received by
q veteran or his family, under the
World War veterans act, 1924, are ex-
.empt from Federal income tax, and to
the extent that such compensation is
paid under the provisions OF that act,
exemption also applies to all types
OF compensation received by a veteran
or his family under the provisions of
the war risk insurance and vocational
rehabilitation acts. Pensions received
from the United States by the family of
a veteran for services rendered by the
veteran to the United States in time
Of war are exempt as gifts. The rental
value of dwelling house and ap-
Purtenances thereof furnished to a min
lister of the gospel, as part of his COM
Pensation. is also excluded from gross
income. Other items excluded are ALI
mony, notary fees if the notary was
commissioned by a State and city jury
fees.