ILLUSTRATIONS OF RETURNS On the following pages are shown illustrations of returns under varying conditions. Individual: Married man (citizen), I child (under 18), no surtax. Calendar year-cash basis. Unmarried (citizen), subject to surtax. Calendar year cash basis.. Retired manufacturer (citizen), married, no normal tax, subject to surtax. Stock dividends received direct.. Merchant (citizen), married, subject to surtax. Liberty bond interest Married man (citizen), 2 children (under 18 years), subject to surtax, having one-half interest in partnership. Income from stock dividends taxable at 1913-1915, 1916, 1917, 1919 rates. Income from partnership taxable at 1918-1919 rates (fiscal year ending September 30, 1919) Married (citizen), no children, subject to surtax. Cash dividends received from domestic and foreign corporations. Tax paid to foreign country. Fiscal year ended October 31, 1919. Married (citizen), 1 child under 18 years, normal tax only. Corporation: Schedule A, Form 1120. Taxable net income. Calendar year 1919.. PAGES 1040-1041 IQ42-1044 1045-1048 1049-1052 1053-1055 1056-1057 1058 1059-1060 1061-1062 Schedule M (old form, Schedule B), Form 1120. Recon ciliation of taxable income with books of account. Calendar year 1919.. 1063-1064 Schedule A, Form 1120. Taxable net income, three com- Schedule showing reconcilement of book net income with 1065-1067 1068-1069 1070 1071-1072 SUGGESTED DRAFT STATEMENT TO BE PREPARED BY INDIVIDUAL TAXPAYER BEFORE FILLING IN FORM 1040 A SCHEDULE MARRIED MAN (CITIZEN), I CHILD (Under 18). No SURTAX. DETAILS OF INCOME: CALENDAR YEAR CASH BASIS. $150.00 1Ο Interest on Second Liberty Bonds, 4% (principal $15,000). 600.002 Interest on Third Liberty Bonds, 44% (principal $2,500). Interest on Fourth Liberty Bonds, 44% (principal $10,000). FCKC Interest on corporate bonds containing "tax-free" provision. Interest on corporate bonds containing no "tax-free" provision. Cash dividends received. Income as partner, net distributive share 2,000.00 Total Income I - I Deduction for interest paid on money borrowed to purchase or carry Second, Third and Fourth Liberty Bonds. Interest paid on money borrowed to carry First Liberty Bonds Deduction for State Income Tax.. Deduction for Bad Debt (loan to friend in 1917, considered good January 1, 1919)... Net Income before deducting contributions Total amount contributed to charities during 1919 (give details).. Amount allowable is 15% of net taxable income, viz., income as above. Q R Normal Tax at 4% Credit tax paid at source on "tax-free" bonds' Net Tax due. NOTE: Inasmuch as net income did not exceed $5,000 no surtax is payable. 'Exempt from all Federal income tax. Interest is exempt owing to $10,000 Fourth Liberty Bonds being originally subscribed for and still held. SUGGESTED DRAFT STATEMENT TO BE PREPARED BY INDIVIDUAL TAXPAYER BEFORE FILLING IN FORM 1040 UNMARRIED (Citizen). SUBJECT TO SURTAX. Calendar YEAR-CASH BASIS. PARTNERSHIP PROFITS FOR NINE MONTHS ON ACCOUNT OF CHANGE IN ACCOUNTING PERIOD Rents.. E - Col. 7 Deduction for business (not partnership) expenses Profit on sales of stocks. Deduction for losses on sales of stocks, actual losses. Deduction for real estate expenses. E - Col. 5 Deduction for interest on mortgages Deduction for real and personal property taxes. Deduction for depreciation (buildings only). Taxes account opening of new street. II Interest on First Liberty Bonds, 32% $350.00 Do not report 13 (a) Interest on Second Liberty Bonds, 4% (principal $45,000). $1,800.001 Do not report Interest on Third Liberty Bonds, 44% (principal $5,000). Interest on Fourth Liberty Bonds, 44% (principal $30,000).. G-3 Interest on bank deposits. SCHEDULE Cash dividends. Stock dividends received July 1, 1919, declared from Surplus accrued prior to 14-3 & K(a) Cash dividends received through partnership (January 1, 1919, to September 30, 1919)*.. F G-I 14-7 As partner, distributive share, not including partner's share of dividends and interest on Deduction for interest on loan Deduction for interest on money borrowed to purchase and carry Second, Third and Fourth Liberty Bonds. 2 Deduction for taxes on dwelling house.. Bad debt.. Total Net Income (before deducting contributions) Total amount contributed to charities, etc., during 1919 (to be supported by schedule) Amount allowable is 15 per cent of net taxable income: Net income as above. Credit cash dividends direct.. Credit cash dividends—received through partnership (Jan. 1, 1919, to Sept. 30, 1919)*. Interest is exempt owing to $30,000 Fourth Liberty Bonds being originally subscribed for and still held. Interest to extent of $5,000 of principal of any issue, exempt. No Fifth Victory Bonds originally subscribed for. 'During year the partnership changed its accounting period from calendar year to fiscal year ending September 30. |