...

xxx xi

M. PROFIT (OR LOSS, FROM SALE OR EXCHANGE OF STOCKS AND BONDS (Not dealt in as a business and not included in Item 12) Se. Instruction 14 (a) Sale price (or fair market value of property received in exchange). ......

.. 1S... (b) Cost (or fair market value on Jan. 1, 1919, if acquired prior tereto) of stocks and bonds sold or exchanged....

(c) PROFIT OR Los8 FROM SALE OR EXCHANGE OF STOCKS AND BONDE (item a minus item b) (I loos, enter in red ink and subtract) ......
15. PROFIT (OR LOSS) FROM SALE OR EXCHANGE OF LANDS, BUILDINGS AND OTHER PROPERTY (Not dealt in as a business and not included

in Items 12 or 14) See Instruction 15
U bere LG mere ihes one sale or exchange during the year, omil separate statement in similar form for each sale and enter nel projt (or Loss) on item k below
a) Kind of property.--- -- ---- ) Sold or exchanged!.

.(e) Year acquired..................... (d) Original cost S.........
(e) SALE TRICE (OR FAIR MARKET VALUE OF PROPERTY RECEIVED IN LICHANGE) .......

Original cost (or fair market value on Juo. 1. 1919, if acquired prior thereto) of property sold or exchanged.
6) Cost of improvements, if any, after Jan. 1, 1919, or alter date of purchase, if acquired since......

(h) TOTAL (item ! plus item ).......
O Deduct depreciation siter Jan. 1, 1919, or after date of purchase if acquired since ..
() DITTERENCE (item b minus item i)........

.. X X X X
(W) XET PRONT ON SALE OR EXCHANGE OF LANDS, BUILDINGS, ETC (item e minua ítem j). Us net lor: enter in red ink and stétract) ....
16. OTHER INCOME (Describe each source separately)

TOTAL INCOME FROM ABOVE SOURCES. (Irome O to 16 inclusime)....
18. DEDUCTIONS (not claimed above)

(a) loterest on indebtedness (see Instruction 18) Total Interest paid --- - - Proportion allowsbie w deduetion .........
b) Taxes (other than income taxes, or savestments for local benefita). ...................
(c) Contributions (see Instruction 18). Submit details on Schedule A-page 3 of retura
OTHER DEDUCTIONS (Decribe each separately)

I TOTAL DEDUCTIONS..
20.

NET INCOME OF THE ESTATE OR TRUST (Item 17 minue llem 15) (Bruter distributive start in den - Page 1 of Returns.com.mm
In the estate or trust (a) has a nonresident benchelary, and (d) carries on businou both within and without the State of New York, prepare schedule of apportionment
of income on form 205-A, and attach it to the return.

GENERAL INSTRUCTIONS A. CLASSIFICATION OF INCOME OF ESTATES AND (b) Income accumulated in trust for the benefit of tabera

or unascertained persons or persoas pith contingut TRUSTS.

interest. For the purpose of the income tax, income of estates and (c) Income held for future distribution under the to trusts may be divided into two classes:

& will or trust. First: "Income, the tax upon which is imposed upon the estate In (a) the fiduciary is entitled to deduct the amount of or trust and the tax paid by the fiduciary, consisting of

income properly paid or credited to any beneficiary. In the (a) Income received by estates of deceased persons during absence of any specific allocation of income under the vill er

the period of administration or settlement except a8 deod of trust every distribution shall be deemed to apply rabbiy provided in "f" below;

to taxable and non-taxable income of the estate or treet. b) Income accumulated in trust for the benefit of unborn or The fiduciary of a resident estate or trust is entitled to a unascertained persons or persons with contingent in

personal exemption of $1,000 in ascertaining the tas kalibus terests;

of the estate or trust. The fiduciary of a nenosidest estata (e) Income held in trust for future distribution under the trust is not entitled to any personal exemption water

terms of the will or trust. Second: Income, the tax upon which is imposed upon and paid by the beneficiaries, consisting of

E. TAX RETURNS FOR BENEFICIARIES. (d) 'Income which is to be distributed to beneficiaries period. Every fiduciary must innke a return of income ce fom 300 ically whether or not at stated intervals;

or 261 for every individual whose entire income 19 in chart of (0) Income collected by the guardian of an infant to be held such fiduciary, if such individual is a rendent and or distributed as the court may direct;

income is $2,000 or over, il living with husband or wie, (1) Income of the estate of any deceased person which during $1,000 or over in other cases. Il such individual is a B rendent,

the period of administration or settlement is properly the fiduciary must make a return of income of such ledi
paid or credited to any legatee, heir or other bene on Forin 200-a or 201-a, regardless of the annount of hes tasabi
ficiary.

income. In all such cases, the fiduciary must pay the tas da

thereon. B. RESIDENT AND NONRESIDENT ESTATES AND TRUSTS DISTINGUISHED.

P. BETURN FOR DECEDENT.

If the net income of a decedent from the beginning of # For the purpose of the income tax, estates and trusts are (a)

taxable year to the date of his death is $1,000, if utatud resident estates and truste, or (b) non resident estates and

or $2,000 if married and living with wife or husband, the caree trusts. If the decedent was at the time of his death reaident

tor or administrator shall make a tax return for much decedent of New York State, his estate is a reeident estate and any trust

on Form 200 or 201 if be was a resident, or on Farma 200. a created by his will is a resident trust. If the decedent was at

201-2 if he was a nonresident, and pay the tax due thereum the time of his death a nonresident, his estate is e nonresident estate and any trust created by his will is a nonresident trust. If the creator of a trust was at the time the trust was created G. RETURNS WHERE MORE THAN ONTE TRIST

resident of New York State, the trust is a resident trust. In tho case of two or more trusts the incode of wisdi Conversely, if the creator of a trust was at the time the trust taxable to the beneficiaries, which were created by the was created a nonresident of the State, the trust is a non

person and are in charge of the same trustee, the trustve say resident trust. The residence or situs of the fiduciary does not at his option make a single return on Form 205 for all in any sense control in the classification of estates and trusts as

trusta, notwithstanding that they may arise fron edest resident or nonresident.

instruments. When, however, a trustee holds trusts arented by

different persons for the benefit of the same beacciary, be ha C. INFORMATION (NON-TAXABLE) RETURNS ON make a return on Form 205 for each trust separately. FORM 205 FOR ESTATES AND TRUSTS.

H. ACCRUED OR RECEIVED INCOI. Every fiduciary or at least one of joint fiduciaries (except receivers appointed by authority of law and in possession of Fiduciaries may make their return part only of the property of the taxpayer) of every estate or (a) On a cash basis, that is reporting income readed and trust, resident or nonresident, must make an information return

expensee, etc., paid or on Form 205, if any beneficiary receives or is entitled to a dis (b) On an accrual basis, that is showing income accrund sol tributive share of taxable income of $1,000 or over during the

expenses, etc., incurred or accrued, taxable year in the following cascs :

in accord with the method of accounting regularly employed a (a) Income which is to be distributed to beneficiaries keeping the accounts of the estate or trust provided sud sa periodically, whether or not at stated intervals,

clearly reflects its true income. If the books are not kept ca (b) Income collected by the guardian of an infant to be held the accrual basis, fiduciaries should report incorne received or distributed as the court may direct,

expenses paid, but in any event, must report all the income d e (c) Income of the estate of any deceased person which dur. estate or trust even if not entered on the books ing the period of administration or settlement, is

income is reported on the cash basis there must b properly paid or credited to any legatee, heir or other all income constructively received, such as bank interest audited

all income constructively received, such beneficiary.

or interest coupons due and collectible, but not collected No tax is to be paid by the fiduciary on this return as the incomne is taxable to the beneficiaries, but there shall be included 1. PERIOD TO BE COVERED BY BETUK. in computing the net income of each beneficiary, his distributive sbare, whether distributed or not, of the net income of the

The dates on which the period covered by the return began estate or trust for the taxable year.

and ended, if other than the calendar year 1019, must be pisaly

stated at the head of the return, II the books of the entste wete D. TAX RETURNS ON FORM 200 OR 201 FOR

regularly closed in 1919 at the end of some month other as

December, the return must be made on the basis of the End ESTATES AND TRUSTS.

year which ended in 1919. The fiduciary of every resident estate or trust must make a tax return on Form 200 or 201 and the Aduciary of every J. WHEN AND WEDERE RETURUS SHOULD BE nonresident trust or estate must make a tax return on Form 2008

FILED. or 20la and pay the tax on the taxable income of each cstate or trust taxed as an entity, having a net income of $1,000 or more This return should be fled at the otice of the New York State during the taxable year in the case of

Income Tax Bureau, Albany, N. Y., and should be seet er fed (a) Income received by estates of deceased persone during on or before March 15, 1920. Penalties attach for failure to flo the period of administration or settlement;

return within the time required by law. Fiduciaries should become familiar with the Comptrolla'. regulations concerning estatcs and trusta, kdactone and

fiduciary returns, which will be sent on request.

te) Incomdistributed as the curred inngiro infant to be held

FORM 205—FIDUCIARY RETURN-PAGE 2 OF INSTRUCTIONS

SPECIFIC INSTRUCTIONS None The foDoning instructions are numbered to correspond with the questions of the return, and relate to the corresponding quesucas sad irata thartin.

CONCERNING PAGE 1 OF RETURN LNSTRUCTION 7 - RECONCILIATION (N) Salaries, wages and otber compensation State of New York between June 1, 1917, aud WITH U. S RETURN:

retrived as 40 othcial or employee of tbe May 14, 1919

Toited States so ctril, military or naval der 16 ttere in any considerable 01 Terence be- vice.

(r) Gifts (otber than those received as contvo the total net income you did for wo) (b) loterent upon boods or other obliga.

siderativu for dervice readered) und money Trort ou your U & return and fem 20 of tions of the United States

aud property acquired under a will or by in Ibis return you should prepare a statement

berita Dee (tout be income derived tberefrom

(e) luterest on securities issued under the must be included to gross income, subject to Tuconcilig al diarrences whieb. if not bled provisiong of tbe Federal Farm Loan Act of tbe provisions of tbe law) with the returu, bould be ritatned. as you Jul 17. 1916. aud on boods of tbe Wa Fiamay be required to subtoit such a statemeot

anee Corporation later

(R) Proceeds of fue insurance polieies and

1d) Interest on bonds or utber obligations contracts paid on Inc death of the insured, INSTRUCTION - NON.TAXABLE IF of the State of New York or of any muole to individual beneficiaries or the estate of the

spal corporation of political subdivision of the insured (but be income therefrom must be COME:

State of New York (but interest on the reported). but the grouut by wbieb ibe toal The following classe, of income are exempl obligations of other states and tbeir political recrived on surreuder or expiration of policies from taxatlog od ned out be reported on Subdivisions is taxable)

darmy the use of the insured exceeds the age 2 of tbe return but sbould be enleted (e) lolerest on bonds or orber obligations total premiums pald. is locowe and mon be and reported in reply to qurotlum 8

on wbieb the Suvestment tas was said to the reported a Heta 10

INSTRUCTION – INCOME PROX INCONCERNING PAGE 2 OF RETURN

CONCERNING PAGE 2 OF RETURN INSTRUCTION 9-INCOME FROM IN. Trcome recetted from the sale of lands. INSTRUCTION 14-PROFIT (OR LOSS) TEREST:

buildings, equipment stocks, bond. and other FROM THE SALE OR EXCHANGE

property not dealt tu as busineD sbould to (a) Do not include Interest accron prior to reported under Items 14 or 15

OF STOCKS AND BONDS NOT January 1, 1919, eveo I received ou or after income Accrued or Revelvod: See iostrue. DEALT IN AS A BUSINESS: that date.

tlon : oo the reverse side of this page. b) tolarest un teipal sud Suate boods,

sale portue Stale (be actual consideration Itens - Kid of busincas. Blate kind of or price or in tbe case of an exchange, the beer tbaa suolcipal or State bonds of the

Ruoda dealt lu or kind of services rendered fair market value of tbe property recehed. State of New York, is tasuble, Bad must be

and whet ber manufacturer, Jobber. Wbolesaler. reported bene.

Cost Enter the original cost of the prope retailer, importer, broker, etc

erty ut i was acquired before January 1, INSTRUCTION 10-INCOME FROM

1913 tbe falr market value on that date. For include cost of business equipment or furnt. tbe Laboer of determining the fair market DIVIDENDS:

ture, expenditures for perkas neat improve value on Jaduary 1, 1919, dee regulations. ta) Report bere al dividends includlog ments to property. or living and family ex. INSTRUCTION 15-PROFIT OR LOSSY those from personal serthe corporations re penses of any beneficiary.

FROM THE SALE OR EXCHANGE OF reisodio 1919 whaber paid to card stort or other property except dividends received

OTHER SUBINESS DEDUCTIONS

LANDS, BUILDINGS AND OTHER in 1919 which were declared payable to

Interest: Do got include ore later on PROPERTY NOT DEALT IN AS A stockholders of record lo 1918 business indebtedness. All deductibh buterest

BUSINESS (b) Wheu dividends are paid to property 1s to be clulined specifically as a deduction in of stoct of tbe Corporation the fair tparket item 18a.

sale price State the actual consideration or value of property or stock of the corporation Itemp -Tasce. Do not include taxes for price or in the case of an excbange the fair at the thice made payable sbould be reported local benefto of a kind teoding to increas market valne of the property received. and a statergent bould be attached to the tbe value of the property assessed as foi Cost: Euter in item F the cost of the prop return explaining tbe saluation placed on paring. ete, nor income taxes.

erty or if it was acquired before January 1, sur dividends

Itcm 0.-Ropairs, depreotation and depletion 1919, its fair market value on that date. (c) The time when the profite distributed Report here

Depreciation. Sic Instruction 13 above. to divideads were eated by the corporation

(n) Minor repairs required to keep prop INSTRUCTION 18 GENERAL DEis of no significance ander the duate Income erty ID usable condition:

DUCTIONS: Tas Law tast law differing somewhat is that

(b) A reasonable allowance for exbaustion, (a) Interest on indebtedness: Show the total respect from tbe Federal Income Tax Law.

wear and tear to be extent not offert byre interest paid by the estate or trust. If it has INSTRUCTION 11 INCOME FROM pairs, replacements or lotes claimed as de- no not taxable income, the fiduciary may dePARTNERSHIPS, AND FROM OTHER 40 ANO PDOM OTAPD duelons la this return

duct all tbe interest paid by the estate or (c) Any claim for depletion of tuinea, oll trust if it ESTATES AND TRUSTS.

has non taxable income, the and gas wells or loter lands

Jinduciary may deduct only proportion of Report the share of ite estate of trust Do bot claim depreciation for articles Ibat beinletest paid to be determined as fot. wherbet distributed or not) in tbe bet o bu ve been taken into your investory

low & To the gross taxable income of the en Come of partnership, or orber Putate or The amount claimed for depreciatlon bould tate of trust add its non taxable income trug during the accounting perind (wbet her be based 00 Some approved Accounting T will give it a total gross income. fiscal or calendar year) of (bv partnership or net bod and must be based on the cost of the Te duciary s entitled to deduct such

ber state or trust wbieb eded during your property (or its value on January 1, 119, if proportion of the interest paid by the es I kable year (wbet ber sal or calendar acquired before that date)

tale or trust, its gro98 t table income year)

Jiem - Rad Debt Report bere only debts beurs tu ne total gross income.

which you bave ascertained to be wortblad (0) Tare Report here au taxes paid by INSTRUCTION 12 -INCOME FROM

and have charged of during the year the state or trust not already claided as a BUSINESS OR PROFESSION (IN case of bad drbre created prior to January' deduction in the foregoing part of tbe reCLUDING FARMING)

11919 only the fair market value on that turn Xerpt (a) taxrs for local benefits of a dare can be deducted as a loss

hind leading to increase be value of the Catates or trusts Lavio several busloesses Rad debts arising out of personal lukts properly ed. (b) income taxes or (e) Y mubon Separate bedule for racb sbould be reported wader Item 18

<stite or in berilance tases. business in the same form # fbat #bown on t be return and enter the combined total pel INSTRUCTION 13 -INCOME FROM

( ) ('unebution Report bere the amount

of gross Income which purruauf to the terms İsteme on Item W of the return

RENTS AND ROYALTIES

of the will or deed creatius Ibe trust, was Sepert bere incute from (a) Sales of urbaidis or of the prod mornl of net 10 you accept crops of

during the period covered by this return. paid is of manufacturing construction. lning other property in lieu of carbo n report

tuot peribahently set aside for tbe United the income as though tbe feat hud Lrto pard

Statiany state territory, or any polities! and acrieulture

subdivisioa In cash

theraut. or the District (b) Farms, Oshing and logging operation

of Columbia o

Repairs, depreciation and depletion (c) Business servire. Auch as transporta.

y corporation or association Skeelu

feed and operated pxelnsively for re. tion, storage, laundering, hotel and restaurant structlon 12 above

TALOUS charitable, scientifie or edocational service, livery and garage servire, etc.

Taser Report taxes on tested or kasd burpose or for tbe prevention of cruelty to Tem 2 any income in property D hol Brude r s for local children of animals to part of the net earn.

of which expense for labor benefits of kind lending to form the ings of what inares to the hepcfit of any sunt, etc.. were incorrect 1ro kot report bere value of the property DAANGED

private stockholder or individual A

Interest. Do not ind

CHAPTER XXXIX

NEW YORK STATE FRANCHISE TAX ON

CORPORATIONS

Amendments to the New York Franchise Tax Law (enacted June 4, 1917) were approved May 14, 1919. The 1917 law applied only to manufacturing and mercantile corporations. With the exception of increasing the rate from 3 per cent to 472 per cent and including all business and financial corporations (with certain exceptions), the amendments have not made any radical changes in the 1917 law. The tax is imposed upon the privilege of a domestic corporation exercising its franchise in the state and, in the case of foreign corporations, upon the privilege of doing business in the state of New York. The basis of the tax is the entire “net income" reported to the United States. The law also provides for the payment of a minimum tax of not less than ten dollars and not less than one mill upon each dollar of an "apportioned” face value of capital stock.?

The 1919 law relieves all corporations from paying any personal property tax in the state of New York.

An attempt has been made by the city of New York to collect personal property taxes from foreign corporations, but such action is clearly illegal. The State Tax Commission made the following statement on November 19, 1919.

To resort to the contention that the imposition of such a personal property tax would be unconstitutional is not necessary, however, because section 7 of the tax law itself expressly and absolutely precludes the taxation of a foreign corporation upon its capital invested in business in the state except "to the same extent as if they were residents of the state.” Domestic corporations not being subject to the personal property tax or to a tax upon capital stock, this

For a discussion of “Doing business," see page 1007.
*Section 214 (6).