The Key West citizen. [volume] (Key West, Fla.) 1879-current, 1954-08-16
New Tax Cuts
Cover Many
Special Groups
By CHARLES r. sARRGTT

WTHerS, ATLlSLS, inventors, business
partners -.
Taxpayers who sell their home
support a parent in another town
live in cooperative housing prof
ectS, or get income in advance fol
q future period =.
All these groups may find ia,
benefits for them almost bidder
in the hundreds of thousands o.
words of the new tax revision act
Most of the changes are effective
last Jan. /, and win show up il
tax returns due next April Is. Hero
is rundown on possible tax cuts
for these special groups:
Widows and wid6wers--f0r twt
years after the death of 4 wife On
husband, you may still split your
income for tax purposes as mos
married couples do. This often puts
you in a lower tax bracket. But &c
claim this provision, you must BE-
supporting 4 dependent son OF
daughter.
Single heads Of hOuseh0lds-y0u
may now qualify for this tax status
if you are single and support a
parent who lives away from your
own home.
Under the old law, the parent
had to live in your home. The
"single head of household" Status
gives you one half the benefits OIL
income splitting, explained above.
Polieenhen-Now can deduct sub.
sistence allowances up to IS a day,
which were counted as taxable in
come under the old law. This
could mesn a tax cut of shout 1864
a year for many federal, state and
local officers.
MiAisters-C2sh payments to q
minister for rental Of d home were
counted as income under the old
law, although the rental value Of
parsonage provided for the min
lister was exempt. Under the new
law, the cash allowance also is
exempt TO the extent it is actually
used for housing.
Inventors, writer's, artists -
Under the old law, income from a
project which took less than three
years to complete was taxed in the
year in which it was received. In.
come from projects which took
three years or more, even though
received in one year, could be
spread for tax purposes over three
back years. Under the new law,
income may be spread over a peri
cd Of years if the project takes
only two years or more to com.
plete. This means income from
more such work may be spread
and thus taxed at . lower rate.
Writer'S and artists may spread in.
come over the actual period Of
work up to IS months. The time
spread for inventors has been in.
creased from IS to so months. You
qualify for this advantage only II
80 per cent or more of the income
from the project is received in
one year. Otherwise, you pay taxes
on the income IS it is received
year by year.
Sale Of homes--profits from sale
Of personal residence is taxed
unless invested in another home.
Even then, the profit is kept in
the record. If you later sell the
second home, or a third or fourth
or fifth, and don't reinvest all
your profits in another home, the
total profit on al the Transactions
can be taxed. In figuring your
profit, the new law permits you to
deduct such selling expenses as
real estate commissions and "fix.
ing up' costs-painting and other
improvements completed 80 days
before the sale, in order to help
make the house salable.
Cooperative housing-If you live
in cooperative housing project,
the new law permits you to deduct
your share of intrest and taxes
paid by the cooperative. The old
law granted this deduction only to
taxpayers living in cooperative
apartments.
Business partners-Partners who
meet complex list OF qualifica
lions may choose to pay taxes as
a corporation, rather than indl-
vidual income taxes on their part
nership proceeds. This may be a
big advantage to partners in top
income brackets. But most pro.
fessional groups, such as doctors,
lawyers, accountants and engine.
erS, are ruled out.
Prepaid ineome-Under the old
law, If You received a lump.sum
payment for use Of property or
your services over a number of
future years, the income was fully
taxed in the year it was received.
This would apply to rentals, leases.
television service contracts. club
dues, and so forth. Under the new
law. this income may be spread
for tax purposes over the years
in which the income is actually
earned and in which your costs
are incurred. In most cases this
period cannot exceed five years
after receipt Of the income.
GLORIA TO APPEAR
WNe arr ~ wxTS~ 49,