Show II- II I YOUR OUR INCOME INCOME- TAX I Your Income tax soon will be due Dont Don't fret about It read It-read read these articles by R It R. R A A. Conkey tax consultant for the Central National f I Bank Savings and Trust company Cleveland They hey tell you jou OU everything everything every every- thing you want to know in language you can understand This is Conkey's Conkey s third article aricie By It IU A A. A COSKEY Q Question 19 What amount of Liberty Liberty Liberty Lib Lib- erty bonds can be held free from surtax surtax sur sur- tax Answer 1 Five thousand dollars of principal of bonds of the second third and fouth Liberty loans and all ail certificates certificates certificates of ot indebtedness and war saving saving saying sav say ing certificates 2 Thirty thousand dollars of ot first Ii 31 p per pr r cent bonds converted at time of issue of or the fourth Liberty loan 3 One ne hundred and twenty thousand dollars of 4 per cent and 4 41 n per cent Liberty bonds The first 3 per cent and Victory 3 31 per cent bonds are exempt from all normal and surtax There Is la no exemption exemption exemption tion from surtax in case of the Victory Victory Vic Vie tory 4 42 41 per cent bonds Q 20 Are dividends from domestic corporations subject to both normal and surtax A A. No they thelo are only subject to surtax surtax surtax sur sur- tax as the corporation paying the divIdend divIdend dividend div div- pays a normal tax on its earnIngs earnings earnings earn earn- ings which are later distributed as dividends Q 21 When hen can one claim exemption tion as head of a family A A. If It you jou ou actually support and maintain maintain main main- tam tain in one household one or more persons per per- sons eons who are closely connected with sith you jou by blood relation marriage or adoption S Q 22 What date governs the personal personal per ver- exemption A A. Your marital status on the last day of the year jear ear or the taxable period governs the exemption Q 23 Are gains from gambling taxable tax able A. A 4 Yes all aU gambling gambling- gains and il illegal illegal il- il legal profits made in violation of criminal crim- crim Ical inal law or public regulations are taxable tax tax- able Losses from such sources are arc not allowable deductions Q 24 Does a a. taxpayer have to re report report report re- re port to the government amounts of income paid to individuals individuals' A A. A Yes if you jou pay to any person during the j year ear salary rent interest commission or other Income amounting to 1000 or more you jou ou are required to tofile tofile file flIe a return of oC information show ng the amount and the name and address o of the person to whom pad P Proper oper forms for this return can be bl secured from the collector for your jour district Q 25 What hat rate of oC depreciation can be claimed on buildings buildings' S A. A The rate of depreciation now generally recognized by the government government govern govern- ment is 2 per cent on brick and 3 per cent on frame buildings This Is an annual allowance based on the cost of oC the building only This deduction can only be claimed on business or rented property and andIs andIs andis is not allowed on a residence in which the taxpayer lives es It Its It's a 5 allowable however on ona on-a a residence which he rents to another person Q Q 26 John Smith conducts a n hardware hardware hard hard- ware are store On December 31 1920 his Inventory In was During th year jear he purchased worth of ol goods Kooda and his sales for the year were One December 31 1921 his Inventory in inventory inventory In- In was How do these Items enter into Smiths Smith's income tax re return return return re- re turn turn turnA A A. A The Inventory at the beginning of the year is added to the purchase making 50 from which the Inventory at the end of ot the year rear Is In deducted l leaving avin r 33 which represent the cost coat of ot goods RaId sold This deducted from fron he Files sales leaves llaves is the gross gron profit from the business In addition he can deduct his general expenses losses lones depreciation etc to determine his net income Q 27 An individual owns n nn an n apartment apart apart- lar m ment t house and lives In one n of the apartments with his family The en entire entire entire en- en tire building Is h heated by one furnace and owner oner furnishes heat light water and Janitor for the entire block How should the th apartment figure In the owners owner's return A A. The owner must determine how much of the cost of 11 n 1 lighting etc etCH Is ia attributable to his own ap rt- rt mut me and the balance of such coss cos's may b be deducted from gross Income as asan asan an nYe expense e u tD Depreciation should be beI I 0 in the same m manner Th The rental value 9 of his own oa n apartment nt S. S S SS I S S S r. r l need not be Included in gross Income but the entire amount o of ot rent received I from the other apartments must be e e re returned re- re turned Q ci 28 An attorney supporting a aI aI I family owns s an automobile used s I oth fe feos os eH for business a and pleasure He emi IJ s lo losan an assistant and a stenographer in his ls of ice He lie pays pas club dues subscribes to legal publications and books and donates to charitable organizations How should these items be treated in his return A A. A The part of the automobile ex expense expense ex- ex pense apportioned to the time it is for tor business is an allowable expense The of the assistant and stenographer are a business expense Club dues are not allowable deductions deductions deductions deduc deduc- unless a strictly business club such as a chamber of commerce Legal publication and business books as well as donations are allowable deductions deductions de de- de- de More specimen cases will be described In Conkey's a fourth article in tomorrow tomorrows tomorrow's tomorrows tomorrow's tomor tomor- row rows row's a Telegram |