Decatur Daily Democrat, Decatur, Adams County, 29 January 1925 — Page 6

INCH M E TAX I) E l‘ A It T WENT -By— M. L. SFIDMAN.C. P. A. In the taut artlcln the question of capital gaimt was discussed and how they affected the tax to be paid. In this article Capital losses will be rustle subject to the same treatment. It will be recalled from the previous discussion that a capital loss Is a loss reuniting from the sale of nn licet hell for more than two years, and that, a capital net loss is the excess of capital losses over capital pains. At the outlet. It should be noted that while profits from the sale of property held for personal use. such us a residence, is regarded as a capi tel gain, losses arising from the sale of such property are not capital losses, b’canse under the law for a . loss to be deductible the property must be held for profit, and a resi donee is ordinarily not so held. A capital loss would arise, however, if real estate held for investment purposes flor more than two years were sold i.t a loss; likewise, where stocks or bonds or similar property owned for more than two years are involved. In any event, having determined upon the amount of the capital not loss, the cftect on the tax is as follows: the tax is first computed on the ordinary income in the regular wav, and front it is deducted 12%% of the capital loss. In other words, the capital net loss can reduce the tax only to the extent of 12%% of its amount. To illustrate this principle let us assume that A, a married man with no dependents, has an income from rentals, interest and dividends, of SIOO,OOO. and that he has sustained a net loss in the amount of $20,000 on the sale of stocks held for more than two years. Assuming that his earned arrived at by first computing the tax income was $5,000, this tax would be on the ordinary income of SIOO,OOO. which will be found to be $22,617.50. From this amount is deducted 12%%, or one-eighth of the amount of the capital net loss. As the capital net loss was $20,000. the deduction would be $2,500. The et tax would therefore be $20,117.50. It is apparent that just as thd capital gains provision works to the benefit of the taxpayer, so the cap-! ital loss provision works to the detri-, ment of the taxpayer. In the , , supposed, if tftofe were no capifrfl net' loss privision, the Joss on the stock would be directly deducted from the I other income, making a net income of SBO,OOO and the tax on SBO,OOO would j bo $14,877.50, as compared with a 1 tax or $20,117-50 as above computed. As a result of the capital loss provision, therefore, the taxpayer is called upon to pay $5,250 more than he ordinarily would. It is interesting to note that the law that prevailed last year did not contain the capital loss provision, but only the capital gains provision. The capital loss provision appears for the first time in the Revenue Act of 1924. Another noteworthy feature is that whereas it is optional with the taxpayer whether or not he will compute his tax on the basis of the capital gains provision, there is no such option in the case of capital losses. The tax must be computed in the manner illustrated, with but one excepUon, and that is where the tax on such basis would be smaller than the tax computed without regard to the capital loss provision. For example, if i nth© case previously supposed, instead of A’s ordinary income being SIOO,OOO, it were 1 SBO,OOO. and his capital loss $20,000, ' and we proceded to compute his tax considering the capital loss provision we would find that the tax on the 20.000 of ordinary income would be $2,317.50, and if we then deducted 12%% of the capital loss, or $2,500 there would be no tax to pay. On the other hand, it we disregarded the capital loss provision, so that A's net income were considered as SIO,OOO, that is, $30,000 ordinary income less the $20,000 loss on stocks, his tax would be $207.50. In other words, the tax computed on the basis of disregarding the capital loss provision is higher in such instance than that resulting from the application of that provision. In those cases, the law prescribes that the capital loss section shall not apply. but the capital loss shall be de- 1 ducted from the ordinary income, and 1 the tax camputed in the ordinary ' manner on the net result. 1 1 Tn order to determine when the tax 1 on the capital loss basis is smaller ' than the tax computed on the orinary 1 basis, it is best to work the tax out f on both bases and compare the reaults. As a general rule, however, it will be found that wherever the ordinary Income, not considering the 1 capital loss, is less than $24,000, the < tax computed on the basis of the cap- 1

Ital loss provision will bo less than without it. and should therefore l»o dis regarded. Note: The now income tax forms have been recently released and ip 11,1- text article their general use will bo explained. Opportunity will also lie taken to answer some of the accumulated readers’ quest lons. Questions and Answers Q. Please answer this question in your valuable paper. I am a married man. My wife deserted me seven years ago, and 1 have no idea where she is. whether she Is working, what her income may bo, and in fact, huve no knowledge of her at all. She was accustomed to receive a very excellent salary. lining a married man. am 1 obliged to pay a tax upon her earnings, if such exist, or can 1 pay for my own share of earnings Irrespective of my wife? You see, if I must pay as a married man. there would be no way that 1 can see to truthfully compute tiny possible earnings of my wife. Naturally, 1 do not wish to get into trouble with the tax people and perhaps fined later on.—-F. G. A. You are not required to include in your tax return the earnings of your wife. Your wife will have to file her own return and pay her own tax. I might mention that since you are not living with your wife, you are' not entitled to the married man’s exemption, so that your exemption will ordinarily be SI,OOO. o PAGES OF DAILY THOUGHTS From An Old Adams County Boy Now Residing In New York City Opportunities come, opportunities go. Everybody welcomes opportunity; The wise make ready to receive them, And the worthy catch them on the flyEvery great event, like the eclipse,! proclaims and firmly establishes thistruth. Great events bring great opportunities and with them come, those greater responsibilities which should be , anticipated and judiciously arranged for, so that a wise and proper accounting may be given. Cameras on hand and telescopes too. I All men know what they’re expected to do; ' Lenses inspected, the films are withI in, J Instruments polished “as clean as a pin," ' The occasion ours, if the dfty is fair. Our “men of the hour’’ are sure to he there; ■ No sound will be heard, without or within, iTo voice a regret “that it might have been,” For when the moon darkens the sun's bright eye, The truth will be set right out of the sky. Success is never had simply by the opportunity, but is measured out to us in proportion to the relation of our readiness and ability to receive it, and the willingness and promptness with which we embrace it. The time to make ready for an event is not found at the moment when the opportunity presents itself, but beforehand. TTie learned scientist who was not ready for the eclipse when jt came, lost the opportunity which may never come to him again. ' Many people are thus never ready for ’an opportunity when it comes to them, and are prevented from doing what they would like to do. Their desires are unfulfilled. They never accomplish the longing of their own mind and heart. o „ Simple Way to Take Off Fat Can anything be simpler than taking a convenient little tablet four time each day until your weight is reduced to normal? Os course not. Just purchase a l>ox of Marmola Prescription Tablets from your druggist for one dollar, and start now' to reduce. Follow directions—no starvation dieting or tiresome exercising. Eat substantial food, be as lazy as you like, and keep on getting slender. Thousands of men and women each year regain healthy, slender figures by using Marmola Tablets. Purchase them from your druggist, or send <ll- ■ rect to Marmola Co., General Motors Bldg., Detroit, Mich. o CARD OF THANKS I wish to thank the many friends and neighbors and the nurses at the hospital who so kindly assisted us during the illness and death of MrsChronister. Jam also grateful to those who sent floral offerings and wish to express my appreciation to those who assisted us in time of sorrow’. ROBERT CHRONISTER — o Bloomington.,— “Stop and Go” automatic traffic signals’ operated by electricity have been installed in the public square, here.

DECATUR DAH-Y DEMOCRAT.THURSDAY. JANUARY 29, 1925,

IN MEMORY OF MY WIFE MRS MARCELLA CHRONISTEf! The reaper ha-, plucked a flower, I a illy, tender and while, whom pot.iLij hail scarcely opened to the curly morning light; who-.e life was just beginning to shed it s-.voet perfunie,! e’er it was called for tile Master, andtaken in its Idooin For when God looked on Its party, Ho thought of this world of . in, of the sorrows and trife to battle against, so 11.- said: "111 cal) her homo." Clod Is wise, lie duet It best We should not doubt Hi . love, but watch and wall for lite coining Joy, when we meet in Heaven above Robert <'lironi ter.

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1 ■. - . — Last Call For These Great Values In Our Final Clean - Up Sale Os Suits and Overcoats - Hart Schaffner & Marx - Clothcraft - Griffon Clothes $ 19 50 $ 29 50 39” Values to S2B Values to S4O Values to SSO IF YOU WANT TO SAVE BIG MONEY ON A SUIT OR OVERCOATON A HAT OR SHIRT-NOW IS THE TIME TO ACT 1 Lot-Of i L ot of Young Men’s Suits Men’s Dress Shirts 1-2 Price 1-4 Off ( 1 i > L - , , / Holthouse Schulte & Co. “Good Clothes Sellers For Men & Boys” CLEANING PRESSING REPAIRING V- . .

ECZEMA * CAN BE CURED * So can the various sltln and scalp S jdl-eiffs If afflicted try a box of 9 B. B. Oi lit men l | When used according to Instruction*! ■ It will euro most skin or naif di L ii-oj. no mutter from what cause it ■ I originated or of how long standing, m Sold by all druggists. 3 i Don’t wait. GM a box today. ■ _ i 9 MUST SELL COAL The high quality coal I now have I on hands must lie sold, regardless of 1 1 cost; have part, of a car at .Monroe I mid about one ami one half cars at I Decatur. Tills coal will be sold at a R price o ven can afford Io carry II over until next year ami make money doing it. 1 am leaving and must sell it. JOHN 3, BOWERS w t

| AUTO DAY SPECIALS j Socket Wrench Sei _ f ._. /W Consisting of 6 sockets and the I wrench; made of good quality steel. J V Sockets are made in one piece anil are not swedged. Will fit practical- §DOt I |y everv nut on a Ford and many r* 5 „ ...... I ans. —is a very necessary accessory for other cars. Guaranteed < night diving. Insures you against isfactorv service, Regularly sells man y things. We are offering a dandy that sells regularly for $2.50. for " ,c ’ One look at this and you immediateCPl?riAl mi? ly appreciate our offer. SPECIAL IOR SPECIAL FOR AUTO DAY ONLY! AIITO DAY ONLY 49c $1.39 Adams County Auto Company , “INSIST ON GENUINE FORD PARTS” Madison Street Phone 80 EXCLUSIVE FORD DEALERS —— '■' -