Show Imaginary Merchants Merchant's Profits Get Jolt 1935 1135 STATE OF UTAH UTh 1935 m. m md jc tf itt I I li T W u- u l. l Ml N For Calendar Year 1935 n-ar- n I SUI l r ee ii o CWM NU N WN I VI t M SI I w I. I h. h 4 ee Its a a a. a I a. a p rc 9 1 z fee No 1 I. I a w s rn L p. p 5 iL 11 Tot c- c III lIS Me Ir ten elt t. t e. e M r I r. r t. t ii u IO 11 w. w p. p I. I s oo a. a 1 a NItS c p c-p pow Uti LI L D ahU tTa to a I. I C. C L t. t L. L 1 J 11 t. t t J 4 T r. t c. c pi I tog J j tL L r It W. t I nt 1 t- t tr i 4 frs r n. n 1111 c. c I ta t irs z tit s H a a. a iut w a 1 i tN a N 14 1 a M to 00 a o I. I Ss ICU cUt U t E 0 or u I IT TUt I I. I I IL A AD ADS S. S LI 1 ti w arN ar N m 1111 u jj r a ti Jh t. t ft w ht St b. b y t t JI T li k M S L IL 54 S. S m t iO O t X IL e- e S Ia wo l iV jiU UC eG kt I. I O Iq S' S W 1 mi- mi miti ti noo U l Lo- Lo t.-t t. I- I r.r. toy M a- a CIS U. U I. I w- w 1 I. I j itz J. J 00 O Co 00 oat LII Pw r-ot r Id I I. 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I k 4 14 I 0 ISo w 1 a M 1 n l ilna a w 1 MS tzI I- I i 5 P w eo s. s W 4 J.- J. 7 J U s b At c h t The task of a making a return under t the e new state income tax law pr presents sc ts a more complicated problem to 10 the individual who whose income is derived from a business than for the taxpayer who reports income from salary or wages The Tel Telegram gram prints this this' model return in the belief it will assist the business man in reporting his 1935 income to the state stafe tax commission this year c 4 John Doe a a. merchant enjoyed an excellent return from his business business business busi busi- ness In 1935 Income from apartment apartment apart apart- ment rentals rental his fathers father's estate and other lour sources ell w was s larger Jarger than it had been in man many years yearl He was in a happy mood therefore when his income tax return arrived from the state tax lax commission Several hours houra later Mr Does Doe's mood had changed Mr D Doe e had made an unpleasant discovery Instead Instead In In- In-I In stead tead of ot the amount he ho had expected to pay the state as a tax on his 1935 income he ho discovered his hi bill was wu twice as much He knew the 1935 35 legislature had lied made some changes in lit the law but until he computed his tax Mr Doe w was s snot not aware that rates had b been n Increased exemptions lowered and and the property tax offset duet which in 1934 allowed him to offset third one of hi his Income tax had been repealed i The fact that the 91 1 filing fee ft also Iso bo had been eliminated gave rave him little I comfort Mr Does Doe's net taxable income I after all 11 exemptions and deductions and deductions were taken came to Fi Figured at tl 1 per cent of at the first 1000 or 10 io 2 per cent of tho the I second 1000 or or 20 20 3 per cent of ot the third 1000 or 30 4 per cent of the fourth 1000 or 40 and 5 per percent percent percent cent of ot the b blanco balance lance of ot 9 or 33 Mr Does Doe's tax totaled Mr Does Doe's total income from all sour sources es for 1935 was 59 Under Unde Under Un Un- de der the Income heading of ot the return he listed each item Hem and the s source These items Hems he explained in detail under schedules A B C Cand Cand Cand and D on the other side aide of the re- re re turn C Under schedule A he first firt listed total receipts from his general mercantile mer met cantile business To arrive at his profit Mr Doe Doa computed the net cost of the goods sold by adding labor materials and ands s supplies merchandise bought for tor sale and the value of the inventory at the beginning of the year From Prom this total he then deducted the val value of the inventory at the end atthe of at the year To this sum he salaries added added salaries el not ot Included as labor but was not allowed to deduct deduct compensation for his own services Other Other costs costs added added added add add- ed included rent losses bad deb debts depreciation obsolescence and de depletion depletion de- de taxes and interest on Indebtedness in indebtedness In In- to others All deductions which came L to 4 in Mr Does Doe's case were then subtracted from the total receipts of at his business leaving him him- hima a net profit from th this source of ot Under schedule B Mr Doe listed rents f from om his apartment house and residence After estimating depre depreciation cl cia lion tion cost of repairs to the property property property prop prop- erty and other incidental expenses which he explained in the space pace allotted in the schedule Mr Doe figured his hll Income from these sources at Mr Does Doe's stock market operations in 1935 netted him a loss lollS and under schedule C he explained this item He Invested He-Invested invested in three tocks stocks lost on two and profited on on one ane The net ho he h had d deducted from his total Income came to Under schedule D Mr Doe re rep reported reported re- re p ported income from dividends which amounted to to Mr Doe Doo then took advantage of ot the various deductions allowed him listing these items under the schedule ached ached- ule headed Deductions on the face lace of the return H Here re be he claimed deductions not claimed in reporting income from his business They included Interest paid on pers personal nal debts taxes paid on on-bis on his home contributions to reco recognized charities and expenses Incident incident inci mci- dent to items Item of income listed as asIa a 1 and b 1 In the income ached ached- ule He also took a deduction for mining stock sold for assessment In lIt the next space Mr Doe Doo explained explained ex ex- deductions claimed for de dc- de depreciation In schedules A and B B. B giving the tbD date data the depreciated articles arti arU cles of l property ope were werl Ver acquired their probable life lite and their estimated value in 1935 He then explained the loss claimed as a business deduction under schedule A A. A also the deduction claimed under Item 13 in tho the schedule schedule sched sched- ule ulc headed Deductions on the face ot of the return Silverware valued at 1400 was stolen from Mr Does Doe's home bome Insurance covered the tho loss up to and Mr Doe claimed the uro difference as U a deduction The last space apace on the back of ot the return carried a ft statement of ot Mr Does Doe's income from tax exempt se securities se- se and bonds With these items explained Mr Doe then began the computation of his tax As a married individual living with his wife his Mr Doe Doa claimed a a. personal exemption of 1200 In addition he ho claimed a credit of 1500 for five children at the rate of for each dependent D Deducting ducting 2700 In exemptions from his net income Income- Mr Doe arrIved arrived arrived ar ar- ar- ar rived at hI his net t taxable income of 59 With the realization that nothing co could cold ld be done donea about o t It It at least until the n next ext le legislature e met Mr Doe forthwith mailed the tax commission commission commis commis- sion slon a check for 33 He knew that unless h he paid the tax on or before March 15 lS the commission ml might ht add 25 per cent to his bill billand billand and take vigorous steps ps to collect It IL |