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FORM 1129-UNITED STATES INTERNAL REVENUE SERVICE.
INFORMATION RETURN OF SUBSIDIARY OR AFFILIATED CORPORATION
WHOSE NET INCOME AND INVESTED CAPITAL ARE INCLUDED IN RETURN OF A PARENT OR PRINCIPAL REPORTING CORPORATION FOR PURPOSES OF INCOME AND PROFITS TAXES
FOR CALENDAR YEAR 1918 This Return
| (Date Received) Must Be Filed Op or Before Fiscal period begin ....
1918 March 15, 1919 With the Collector of Internal Revenue
For the District in Which the Subsidiary
rose or Affiliated Corpori.
(Street and number.)
1. Date incorporated.....
.......... Under laws of what Stato ..... 2. Kind of business3. Par value of capital stock outstanding at beginning of taxable year: (a) common, S................
6) preferred, S. 4. Par value of capital stock held during the taxable year by (a) the parent corporation or () the same interest:
Note.-All stock should be designated as voting (“v.") or non voting (“n. v."). 5. Name of parent corporation. 6. Address of parent corporation............... 7. Internal revenue district in which consolidated return has been filed...........
(Cive district, or city and State.) 8. If affiliation occurs through ownership of stock by the same interests, attach to this form a list showing the names
and addresses of stockholders and amount and description of stock held by each. 9. State amount of income and profits taxes for the taxable year apportioned to the subsidiary or affiliated car
poration making this return....
We, the undersigned, president and treasurer of the above-named subsidiary or affiliated corporation, being severally duly sworn, each for himself deposes and says that the foregoing return, including the accompanying list (if any), has been examined by him and is to the best of his knowledge and belief a true and complete return of information made in good faith pursuant to the Revenue Act of 1918 and the regulations thereunder.
SWORN to and subscribed before mo this
FEDERAL INCOME TAX LAW--1918
TITLE I-GENERAL DEFINITIONS
SECTION 1. That when used in this Act
The term “person" includes partnerships and corporations, as well as individuals;
The term "corporation” includes associations, joint-stock companies, and insurance companies;
The term "domestic” when applied to a corporation or partnership means created or organized in the United States;
The term “foreign" when applied to a corporation or partnership means created or organized outside the United States;
The term "United States" when used in a geographical sense includes only the States, the Territories of Alaska and Hawaii, and the District of Columbia;
The term "Secretary" means the Secretary of the Treasury;
The term "Commissioner" means the Commissioner of Internal Revenue;
The term "collector" means collector of internal revenue.
The term “Revenue Act of 1916” means the Act entitled "An Act to increase the revenue, and for other purposes," approved September 8, 1916;
The term “Revenue Act of 1917" means the Act entitled "An Act to provide revenue to defray war expenses, and for other purposes," approved October 3, 1917;
The term “taxpayer" includes any person, trust or estate subject to a tax imposed by this Act;
The term “Government contract" means (a) a contract made with the United States, or with any department, bureau, officer, commission, board, or agency, under the United States and acting in its behalf, or with any agency controlled by any of the above if the contract is for the benefit of the United States, or (b) a subcontract made with a contractor performing such a contract if the products or services to be furnished under the subcontract are for the benefit of the United States. The term "Government contract or contracts made between April 6, 1917, and November II, 1918, both dates inclusive" when applied to a contract of the kind referred to in clause (a) of this paragraph; includes all such contracts which, although entered into during such period, were originally not enforceable, but which have been or may become enforceable by reason of subsequent validation in pursuance of law;
The term "military or naval forces of the United States” includes the Marine Corps, the Coast Guard, the Army Nurse Corps, Female, and the Navy Nurse Corps, Female, but this shall not be deemed to exclude other units otherwise included within such term;
The term "present war" means the war in which the United States is now engaged against the German Government.
For the purposes of this Act the date of the termination of the present war shall be fixed by proclamation of the President.
TITLE II—INCOME TAX
Part 1–GENERAL PROVISIONS Definitions
Sec. 200. That when used in this title
The term "taxable year" means the calendar year, or the fiscal year ending during such calendar year, upon the basis of which the net income is computed under section 212 or section 232. The term “fiscal year” means an accounting period of twelve months ending on the last day of any month other than December. The first taxable year, to be called the taxable year 1918, shall be the calendar year 1918 or any fiscal year ending during the calendar year 1918;
The term "fiduciary" means a guardian, trustee, executor, administrator, receiver, conservator, or any person acting in any fiduciary capacity for any person, trust or estate;
The term “withholding agent" means any person required to deduct and withhold any tax under the provisions of section 221 or section 237;
The term “personal service corporation" means a corporation whose income is to be ascribed primarily to the activities of the principal owners or stockholders who are themselves regularly engaged in the active conduct of the affairs of the corporation and in which capital (whether invested or borrowed) is not a material incomeproducing factor; but does not include any foreign corporation, nor any corporation 50 per centum or more of whose gross income consists either (1) of gains, profits or income derived from trading as a principal, or (2) of gains, profits, commissions, or other income, derived from a Government contract or contracts made between April 6, 1917, and November 11, 1918, both dates inclusive;
The term "paid,” for the purposes of the deductions and credits under this title, means "paid or accrued" or "paid or incurred," and
the terms “paid or incurred” and “paid or accrued” shall be construed according to the method of accounting upon the basis of which the net income is computed under section 212.
Sec. 201. (a) That the term "dividend” when used in this title (except in paragraph (10) of subdivision (a) of section 234) means (1) any distribution made by a corporation, other than a personal service corporation, to its shareholders or members, whether in cash or in other property or in stock of the corporation, out of its earnings or profits accumulated since February 28, 1913, or (2) any such distribution made by a personal service corporation out of its earnings or profits accumulated since February 28, 1913, and prior to January 1, 1918.
(b) Any distribution shall be deemed to have been made from earnings or profits unless all earnings and profits have first been distributed. Any distribution made in the year 1918 or any year thereafter shall be deemed to have been made from earnings or profits accumulated since February 28, 1913, or, in the case of a personal service corporation, from the most recently accumulated earnings or profits; but any earnings or profits accumulated prior to March 1, 1913, may be distributed in stock dividends or otherwise, exempt from the tax, after the earnings and profits accumulated since February 28, 1913, have been distributed.
(c) A dividend paid in stock of the corporation shall be considered income to the amount of the earnings or profits distributed. Amounts distributed in the liquidation of a corporation shall be treated as payments in exchange for stock or shares, and any gain or profit realized thereby shall be taxed to the distributee as other gains or profits.
(d) If any stock dividend (1) is received by a taxpayer between January i and November 1, 1918, both dates inclusive, or (2) is during such period bona fide authorized or declared, and entered on the books of the corporation, and is received by a taxpayer after November 1, 1918, and before the expiration of thirty days after passage of this Act, then such dividend shall, in the manner provided in section 206, be taxed to the recipient at the rates prescribed by law for the years in which the corporation accumulated the earnings or profits from which such dividend was paid, but the dividend shall be deemed to have been paid from the most recently accumulated earnings or profits.
(e) Any distribution made during the first sixty days of any taxable year shall be deemed to have been made from earnings or profits accumulated during preceding taxable years; but any distribution made during the remainder of the taxable year shall be deemed to have been made from earnings or profits accumulated between the close of the preceding taxable year and the date of distribution, to the extent
of such earnings or profits, and if the books of the corporation do not show the amount of such earnings or profits, the earnings or profits for the accounting period within which the distribution was made shall be deemed to have been accumulated ratably during such period. Basis for Determining Gain or Loss
Sec. 202. (a) That for the purpose of ascertaining the gain derived or loss sustained from the sale or other disposition of property, real, personal, or mixed, the basis shall be
(1) In the case of property acquired before March 1, 1913, the fair market price or value of such property as of that date; and
(2) In the case of property acquired on or after that date, the cost thereof; or the inventory value, if the inventory is made in accordance with section 203.
(b) When property is exchanged for other property, the property received in exchange shall for the purpose of determining gain or loss be treated as the equivalent of cash to the amount of its fair market value, if any; but when in connection with the reorganization, merger, or consolidation of a corporation a person receives in place of stock or securities owned by him new stock or securities of no greater aggregate par or face value, no gain or loss shall be deemed to occur from the exchange, and the new stock or securities received shall be treated as taking the place of the stock, securities, or property exchanged.
When in the case of any such reorganization, merger or consolidation the aggregate par or face value of the new stock or securities received is in excess of the aggregate par or face value of the stock or securities exchanged, a like amount in par or face value of the new stock or securities received shall be treated as taking the place of the stock or securities exchanged, and the amount of the excess in par or face value shall be treated as a gain to the extent that the fair market value of the new stock or securities is greater than the cost (or if acquired prior to March 1, 1913, the fair market value as of that date) of the stock or securities exchanged.
Sec. 203. That whenever in the opinion of the Commissioner the use of inventories is necessary in order clearly to determine the income of any taxpayer, inventories shall be taken by such taxpayer upon such basis as the Commissioner, with the approval of the Secretary, may prescribe as conforming as nearly as may be to the best accounting practice in the trade or business and as most clearly reflecting the income. Net Losses
SEC. 204. (a) That as used in this section the term "net loss” refers only to net losses resulting from either (1) the operation of