tion may be based as the number of years of its remaining life bears to the whole number of years intervening between the date when it was acquired and the date when it legally expires may be deducted, if permission so to do is specifically secured from the Comptroller. Owing to the difficulty of allocating to a particular year the obsolescence of a patent, such permission will be granted only if affirmative and satisfactory evidence that the obsolescence occurred in the year for which the return is made is submitted to the Comptroller. The fact that depreciation has not been taken in prior years does not entitle the taxpayer to deduct in any taxable year a greater amount for depreciation than would otherwise be allowable. (See articles 32 and 123.)

ART. 178. Depreciation of drawings and models. A taxpayer who has incurred expenses in his business for designs, drawings, patterns, models, or work of an experimental nature calculated to result in improvement of his facilities or his product, may at his option deduct such expenses from gross income for the taxable year in which they are incurred or treat such articles as a capital asset to the extent of the amount so expended. In the latter case, if the period of usefulness of any such asset may be estimated from experience with reasonable accuracy, it may be the subject of depreciation allowances spread over such estimated period of usefulness. The facts must be fully shown in the return or prior thereto to the satisfaction of the Comptroller. Except for such depreciation allowances no deduction shall be made by the taxpayer against any sum so set up as an asset except on the sale or other disposition of such assets at a loss or on proof of a total loss thereof.

ART. 179. Charging off depreciation. If regular books of account are kept, a depreciation allowance, in order to constitute an allowable deduction from gross income, should be regularly charged off thereon. The particular manner in which it shall be charged off is not material, except that the amount measuring a reasonable allowance for depreciation must be either deducted directly from the book value of the assets or preferably credited to a depreciation reserve account, which must be reflected in the annual balance sheet. If regular books of account are not kept by the taxpayer, a permanent record must be kept of the facts on which the claim for depreciation is based. The allowance

should be computed and charged off with express reference to specific items, units or groups of property, each item or unit being considered separately or specifically included in a group with others to which the same factors apply. The taxpayer should keep such records as to each item or unit of depreciable property as will permit the ready verification of the factors used in computing the allowance for each year for each item, unit or group.

ART. 180. Closing depreciation account. If the use of any property in the business is permanently discontinued, although no sale or other disposition of the property has taken place, a determination of any gain or loss may be made; but any deduction in respect of any loss thereon must be disclosed in the taxpayer's return for the year in which the determination is made and a full statement of the facts and the basis upon which the computation is calculated must be attached to the return. Upon a sale or other disposition of the property, the consideration received shall be compared with the amount of the estimated salvage value used in computing the gain or loss as above provided, and the amount of the difference shall be treated as a gain or loss, as the case may be, of the year in which the sale or other disposition was made. (See articles 151–153.)

ART. 181. Depreciation in the case of farmers. A reasonable allowance for depreciation may be claimed on farm buildings (other than a dwelling occupied by the owner), farm machinery and other physical property including live stock purchased for draft, dairy or breeding purposes, but no claim for depreciation on live stock raised, or purchased for resale, will be allowed. Live stock purchased for draft, breeding or dairy purposes, or for any purpose other than resale, may be included in the inventory for each year at a figure which will reflect the reduction in value estimated to have occurred during the year through increase of age or other causes. Such a reduction in value should be based on the cost and estimated life of the live stock. If an inventory is not used, a reasonable allowance for depreciation may be claimed based upon the cost of draft and work animals and animals kept solely for breeding purposes and not for resale. (See articles 30, 122 and 155.)

DEDUCTIONS ALLOWED: DEPLETION

ART. 190. Depletion of mines, oil and gas wells, natural deposits and timber. Until specific regulations on the subject of deple tion are issued and promulgated by the State Comptroller, deductions for depletion will be allowed in accordance with the principles and rules adopted by the Commissioner of Internal Revenue in regulations 45, except that the fair market value as of January 1, 1919, is the basis for claims of depletion with respect to property acquired prior to that date, and except also that claims for depletion based upon discovery must relate to discoveries by the taxpayer on or after January 1, 1919.

DEDUCTIONS ALLOWED: CHARITABLE CONTRIBUTIONS

ART. 201. Charitable contributions. Contributions or gifts within the taxable year are deductible to an aggregate amount not in excess of 15 per cent of the taxpayer's net income as computed without the benefit of this deduction, if made (a) to corporations or associations incorporated by or organized under the laws of the State of New York and operated exclusively for religious, charitable, scientific or educational purposes, or for the prevention of cruelty to children or animals, no part of the net earnings of which inures to the benefit of any private stockholder or individual, or (b) to the special fund for vocational rehabilitation under the Vocational Rehabilitation Act of June 27, 1918. A gift to a common agency (as a war chest) for several such corporations or associations is treated like a gift directly to them. In connection with claims for this deduction there shall be stated on returns of income the name and address of each organization to which a gift was made, and the approximate date and the amount of the gift in each case. Where the gift is other than money, the basis for calculation of the amount of the gift shall be the fair market value of the property at the time given, but the difference between such value and cost (or fair market value on January 1, 1919, if acquired before that date) shall be returned as profit or loss by the donor. (Article 91.) A gift of real estate to a city to be maintained perpetually as a public

park is not an allowable deduction.

This article does not apply

to gifts by partnerships or estates and trusts. (Tax Law, section 360, subdivision 10, and sections 364 and 365, and articles 233 and 251.)

ART. 202. Definition of religious, charitable, scientific and educational corporations and associations. In order to be deductible, contributions must be to a corporation or association: (a) incorporated by or organized under the laws of the State of New York; (b) organized and operated exclusively for one or more of the specified purposes; (c) no part of its income must inure to the benefit of any private stockholder or individual.

Charitable corporations include an association for the relief of the families of clergymen, even though the latter make a contribution to the fund established for this purpose; or for furnishing the services of trained nurses to persons unable to pay for them; or for aiding the general body of litigants by improving the efficient administration of justice. Educational corporations may include an association whose sole purpose is the instruction of the public. This is true of an association to promote acquaintance with the Spanish language and literature, although it has incidental amusement features; of an association to increase knowledge of the civilization of another country; and of a Chautauqua association whose primary purpose is to give lectures on subjects useful to the individual and beneficial to the community and whose amusement features are incidental to this purpose. But associations formed to disseminate controversial or partisan propaganda are not educational within the meaning of the statute. Scientific corporations include an association for the scientific study of law, to the end of improvement in its administration.

PERSONAL EXEMPTIONS

ART. 205. Personal exemption of resident individual. - An unmarried individual, or a married individual not living with husband (or wife), and who is not the head of a family, is entitled to a personal exemption of $1,000, if he is a resident of the State of New York.

ART. 206. Personal exemption of head of family. A head of a family (resident of the State of New York) is entitled to a personal exemption of $2,000. A head of a family is a person who actually supports and maintains in one household one or more individuals who are closely connected with him by blood relationship, relationship by marriage, or by adoption, and whose right to exercise family control and provide for these dependent individuals is based upon some moral or legal obligation. In the absence of continuous actual residence together, whether or not a person with dependent relatives is the head of a family within the meaning of the statute must depend on the character of the separation. If a father is absent on business or at war, or a child or other dependent is away at school or on a visit, the common home being still maintained, the additional exemption applies. If, moreover, through force of circumstances a parent is obliged to maintain his dependent children with relatives or in a boarding house while he lives elsewhere, the additional exemption may still apply. A resident alien with children abroad is not entitled to the exemption of a head of a family.

ART. 207. Personal exemption of married person.-A married person (resident of the State of New York) living with husband (or wife), is entitled to a personal exemption of $2,000 against the aggregate net income of both husband and wife. In the case of a married man or married woman the joint exemption replaces the individual exemption only if the man lives with his wife or the woman lives with her husband. In the absence of continuous actual residence together, whether or not a man or woman has a wife or husband living with him or her within the meaning of the statute must depend on the character of the separation. If merely occasionally and temporarily a wife is away on a visit