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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
SchedulE DETAILS OF INCOME:
& ITEM
Gift from father......

$1,000.00 Do not report

$8,000.00 7,000.00

200.00 2,800.00 $18,000.00

B - Col. 4 Salary from firm...
B - Col. 4. Salary as officer of corporation .....
B - Col. 4 Fees as director ...
B - Col. 4 Bonus from corporation (not a gift)..
1 - 5 Deduction for business (not partnership) expenses ...

Profit on sales of stocks.
Deduction for losses on sales of stocks, actual losses....

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E. Col. 3

- Col. 7
E- Col. 5
E - Col. 6
E - Col. 4.

Rents.....
Deduction for real estate expenses . . .
Deduction for interest on mortgages .........
Deduction for real and personal property taxes.....
Deduction for depreciation (buildings only)...........

$400.00
600.00
200.00
600.00

1,800.00 400.00 Do not deduct

Taxes account opening of new street.....

$50.00

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Interest on First Liberty Bonds, 3% 3%...
Interest on Second Liberty Bonds, 4 % (principal $45,000)..
Interest on Third Liberty Bonds, 44% (principal 85,000)...
Interest on Fourth Liberty Bonds, 44% (principal $30,000).......

$350.00 Do not report $1,800.00! Do not report

8212.50% Do not report $1,245.00$ Do not report

13 (d) SCHEDULE

& ITEM
K (a) Cash dividends......

16,000.00
Stock dividends received July 1, 1919, declared from Surplus accrued prior to
March 1, 1913 .......

$15,000.00 Do not report
14-3 & K(a) Cash dividends received through partnership (January 1, 1919, to September 30, 1919)*..

14,000.00 Interest on corporate bonds containing "tax-free" provision......

2,000.00 G -1 Interest on corporate bonds containing no "tax-free" provision.......

1,600.00 Interest on bank deposits. ......

200.00 As partner, distributive share, not including partner's share of dividends and interest on U. S. obligations received by firm (Jan. 1, 1919, to Sept. 30, 1919). ...

45,000.00 Total Net Income.

$106,000.00

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G-3

$200,00

General deductions not claimed above:

Deduction for interest on loan. ...
Deduction for interest on money borrowed to purchase and carry Second,

Third and Fourth Liberty Bonds. .....
Deduction for taxes on dwelling house.....
Bad debt.....

.

........................................

675.00
300.00
200,00

1,375.00

Total Net Income (before deducting contributions).....

$104,625.00
Total amount contributed to charities, etc., during 1919 (to be supported by schedule) ... $16,000.00

I - 4

Amount allowable is 15 per cent of net taxable income:
Net income as above. ... ...

..$104,625.00
15 per cent thereof..

15,693.75
Amount subject to Surtax....

888,931.25 Credit cash dividends direct....

... $16,000.00 Credit cash dividends-received through partnership (Jan. 1, 1919, to Sept. 30, 1919)... 24,000.00 40,000.00

L & 15 K (a) K(a)

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.

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25

Amount subject to tax at 4% (not over $4,000)..

Balance subject to tax at 8%.....

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$88,931.25

Total Tax..
Less: Tax paid at source (2% of item F)'....

Balance of Tax due.......

12

Not included as it.ccme as required by Art. 31. Reg. 45. See page 414.

INDIVIDUAL TAXPAYER

RETIRED MANUFACTURER (CITIZEN), MARRIED. NO NORMAL TAX. SUBJECT TO

SURTAX. STOCK DIVIDENDS RECEIVED DIRECT.

FORM 1040
SCHEDULE

& ITEM
C - 14-Col. 7 Income from Trust:

Cash from Trust Fund .....

Profit from Sale of Property:
D - Col. 5 Cost of apartment house purchased January 1, 1918, for investment, sold

June 30, 1919......
D - Col. 6 Electric light plant added in 1918........

$

$50,000.00

6,000.00

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D - Col. 3

854,500.00 60,000.00

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82,500.00

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Selling price.....

Net Profit from Sale of Property .....
Income from Rents:

Rentals from apartment house, 6 months..
Repairs $200 and depreciation $500...
Interest on $30,000 mortgage, 6 months...
Taxes..................
Janitor's wages, light, heat, etc.

Net Income from Rents....
Interest on Tax-Free Bonds (Exemption not claimed):

From bonds held in Trust Fund...
From bonds owned personally......

.........................

8700.00 900.00 400.00 400.00

.....................................

2,400.00

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$100.00 2,000.00

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$4,500.00

100.00

.......

$4,400.00

Other Income:

Interest on bonds (not tax-free), mortgages, etc ........
Less: Accrued interest on bonds purchased.....
Interest on Anglo-French 5's.....
Interest on bank deposits.....
Bridge whist club winnings (net)....

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250.00 300.00 250.00

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Total Other Income.....

I-1

8500.00

1-2

............

.......

..............

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Total Net Income from above Sources...
General Deductions Not Included Above:

Interest on all personal loans. ...
Taxes-State income tax.....

$2,000.00
Taxes on dwellings.........

200.00
Automobile licenses......

30.00
Pergola on his estate destroyed by storm ...,
Contributions—total $7,500, but not fully deductible as this item must not exceed 15%

of net income without this deduction...
Loss on third mortgage bonds of X Y Z Railroad, bankrupt and no dividends possible to

bondholders of this class—cost....

2,230.00

300.00

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6,917.25

D

5,000.00

J & 22 K (a)

Total General Deductions ........
Total Net Income on which Normal Tax is to be calculated at 1919 rates; in this case

a loss designated by minus sign .....
Cash Dividends on Stock of Corporations:

Received directly.....
Received through Trust Fund........

Total Cash Dividends Received .....
Total Net Income subject to Surtax at 1919 rates....

$41,000.00

45.00

K (a) L - 15

There is no normal tax, as Item J represents a loss.

This taxpayer, however, is subject to surtax.

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