Minneapolis spokesman., 1962-01-19
Income Subject
Ahouf ToxeS

(This is the fifth in a series of
articles on income taxes made
available as a public service by
the Minnesota State Bar Associa-
ton, Public Relations Committee. }
Reporting your correct gross in
come is the first item Of business
in preparing your income tax re-
turns. As a general rule, gross in
come can be defined as the total
of amounts received by you for
your services, together with the
amount which you receive from
others for the use Of your property
or money and, the profit which you
realize from the sale of your prop
erty.
While your gross income will
normally consist of cash received
in the form Of wages or pay for
your services, this need not be the
case. Money, therefore, is not the
sole medium of exchange used to
determine the receipt by you of
gross income. The fair market
value of property or services you
receive in return for your services
and the use Of your money or
property must also be taken into
consideration in determining your
gross income. Thus, if your en-
ployer provides you with a house
in which to live or provides you
with meals, you must generally
include in your gross income the
fair value Of these items.
A person who receives a prize
or contest award or who CANDLES
and wins must include in his gross
income the cash received and the
fair value Of items or services re-
ceived.
There are exceptions to the gen.
eral rule stated. For example, If
your employer provides you with a
room or house on his premises and
such lodging is a condition Of your
employment and is for your en-
ployers convenience, this amount
would not constitute gross income.
Similarly, If your employer furn-
ishes your meals and requires that
you eat on the premises, the value
of these meals would not constitute
gross income to you.
Some payments by an employer
are not included in your gross in
come. Such items are premiums
paid by your employer for group
term life insurance, group health
insurance premiums, the cost Of
moving you and your family to a
new location or office in the inter-
est of your employer and other
similar items which are paid to
benefit both you and your en-
ployer.
There are a few items which
would logically fall within the gen.
eral rule but which are specifically
excluded from gross income by
law. One of these items Is pay re-
ceived while sick. This will be dis
cussed at length in a later article.
Interest on state and municipal
bonds Is exempt from Federal tax;
interest on Minnesota bonds and
on United States bonds Is exempt
from Minnesota taxation; and the
first $50 of dividends received by
an individual is excluded from
gross income on your Federal re-
turn.
The application Of the general
rule mentioned will also show you
why gifts, inheritances and gov
ernment benefit payments are not
included in gross income, and why
you must include such items as
bonuses from your employer and
pensions received from your en-
ployer after retirement although
such pensions may be excluded in
part from gross income where you
have contributed to the retirement
fund.
(Thls column, based on Mime
sofa and Federal law, is written
to inform, not advise. No person
should ever apply or interpret
any law without the aid Of a
trained expert who knows the
facts, because the facts may
-A.-. A. o--mn.ao. - Al.