INCOME TAX LAW AND ACCOUNTING

LAW AND ACCOUNTING

1918

BEING

A PRACTICAL APPLICATION OF THE PROVISIONS OF THE FEDERAL
INCOME TAX ACT OF SEPTEMBER 8, 1916, AS AMENDED;
THE WAR INCOME TAX AND THE WAR EXCESS
PROFITS TAX LAWS OF OCTOBER 3, 1917; AND

CONTAINING

THE CORPORATION CAPITAL STOCK TAX LAW AND RULINGS THERE-
ON; FEDERAL ESTATE TAX, EXCISE AND MISCELLANEOUS
WAR TAXES; AND THE NEW YORK STATE INCOME
TAX STATUTE APPLICABLE TO MANUFACTUR-

ING AND MERCANTILE CORPORATIONS

BY

GODFREY N. NELSON

MEMBER OF THE NEW YORK BAR

CERTIFIED PUBLIC ACCOUNTANT, STATE OF NEW YORK

SECOND EDITION

New York

THE MACMILLAN COMPANY

1918

All rights reserved

PREFACE TO SECOND EDITION

The numerous commendatory reports upon the first edition of this book and the requests, by those who used it, for one covering the new laws, have impelled the author to write the present revised and enlarged edition. By reason of the material amendments of the Income Tax Act of September 8, 1916, and the enactment of the War Income and the War Excess Profits Taxes, contained in the War Revenue Bill of October 3, 1917, all of which are treated herein, have necessitated the rewriting of the greater part of the book so that the present edition is, practically, an entirely new work. The original scheme of arrangement, however, has been largely adhered to with the view of making the book a practical guide to those required to prepared returns either for themselves or others.

All Treasury Decisions issued to date, bearing upon the Excess Profits Tax Law, have been incorporated herein either in the text or in foot-notes. From time to time additional decisions and regulations will be issued by the Treasury Department "as occasion demands," copies of which may be obtained upon application to the local collectors or to the Commissioner of Internal Revenue at Washington. Many problems arising under the Excess Profits Tax Law will not be ruled upon by the Department until applications for rulings are formally presented. In the absence of specific rulings the writer has suggested interpretations of the law, particularly with respect to methods of computing invested capital. In such matters as the writer has ventured his construction of the law the suggestions contained herein should be used in conjunction with the decisions and regulations that will be promulgated by the Department. The Department should be consulted freely and unhesitatingly and questions of importance should be submitted for special rulings. Such questions form the basis of decisions and rulings and the solution of your problems may help many others who encounter the same difficulties.

Time has not permitted the rewriting of some paragraphs