When quarters are furnished in kind, of a less number of rooms than the number allowed by law, the money equivalent only of the number of rooms actually assigned shall be returned as income. When quarters are furnished in kind, of a greater number of rooms than the number allowed by law, it is to be assumed that the excess number is assigned for the convenience of the Government, and the money equivalent only of the number of rooms allowed by law shall be returned as income.

(2) Heat and Light.-Amounts received by, or paid for, an officer for heat and light shall be returned as income.

This includes the money equivalent, as fixed by the Government, of heat and light furnished to an officer occupying public quarters.

(3) Mileage. The difference between the amount received as mileage and the amount of actual necessary expenses incurred on a journey shall be returned as income.

Mileage, as such, is not gain, profit, or income to the officer, as he is required to pay his actual expenses while traveling under mileage orders. The gain, profit, or income is the difference between the amount received as mileage and the amount properly expended by the officer while traveling, and this difference only should be returned as income.

The actual expenses to be deducted by the individual before ascertaining his gain, profit, or income on account of mileage are the expenses for which reimbursement would be made by the Government if he had traveled on an actual expense basis. instead of a mileage basis.

(4) Reimbursement for Actual Expenses.-Amounts paid by the Government in the nature of reimbursement for subsistence and other items of actual expenses incurred while absent on business for the Government are not required to be returned as income.

(5) Per Diem Allowances in Lieu of Subsistence While Traveling Under Orders.-The difference between the amount received as a per diem allowance and the amount of actual necessary expenses incurred on a journey shall be returned as income.

(B) Withholding Requirements.

Payments in connection with (1) quarters, (2) heat and light, (3) mileage, (4) reimbursement for actual expenses, and (5) per diem allowances in lieu of subsistence while traveling under orders are indefinite and irregular as to right of possession, amount, and time of accrual, and are not, therefore, subject to withholding as "fixed or determinable annual or periodical gains, profits, and income" under the require ments of the income-tax law.

(T. D. 2090.)

Synopsis of rulings on questions relating to the income tax imposed by section 2 of the act of October 3, 1913.

The following synopsis of rulings on questions relating to the income tax imposed by section 2 of the act of October 3, 1913, on individuals, corporations, joint-stock companies, associations, and insurance companies, is published for the information of internal-revenue officers and others concerned. All rulings or parts of rulings heretofore made which are in conflict herewith are hereby revoked.

PART I.

RULINGS IN RELATION TO PERSONAL INCOME TAX.

Actors and Actresses.-If costumes purchased by actors and actresses are used exclusively in the production of a play, and are not adapted for occasional personal use and are not so used, a deduction may be claimed on account of such depreciation in their value as occurs during the year on account of wear and tear arising from their use in the productions of the play or to their becoming obsolete at the close of the production.

Administration of estates, expenses of.-Expenses of administration of an estate, such as court costs, attorneys' fees, executors' commissions, etc., are chargeable against the corpus

of the estate and are not allowable deductions in a return of a fiduciary on Form 1041.

Administrators.-See Executors and administrators.

Agent. The word "agents" as used in paragraphs D and E of the income-tax law in connection with the words "control, receipt, custody, disposal or payment of income to another person," does not relate to agents not acting in a fiduciary capacity. Agents not acting in a fiduciary capacity have no responsibility with reference to withholding the tax on, or making a return of, income turned over to resident aliens or citizens of the United States; but the responsible heads, agents, or representatives of nonresident aliens who are in charge of property owned, business carried on, or capital invested within the United States shall make full and complete returns of the income therefrom on Form 1040, revised, and pay the tax thereon. See Nonresident alien, agent of.

Agent, real estate.-See Real estate agent.

Agent for nonresident alien.-See Nonresident alien, agent of.

Aids' pay. See Pay.

Alimony.-Alimony is regarded as fixed and determinable income, and in cases where it is in excess of $3,000 the person paying such alimony is required to withhold the normal tax on the same unless exemption is claimed under paragraph C, in which case the normal tax will be withheld only on the amount paid in excess of the exemption claimed. It must be accounted for as income if, together with other income, the recipient is in receipt of a net income of $3,000 or more. It is regarded as a personal expense to the person paying it and is, therefore, not an allowable deduction in his return.

Annuity. The amount paid under a life insurance, endowment, or annuity contract is not income when returned to the person making the contract, either upon the maturity or surrender of the contract; but the amount by which the sum received exceeds the sum paid and coming into the hands of the person making the contract and payment is income.

When the settlement under such a contract is made in more than one payment each payment will be considered as being composed of interest and a proportionate part of the principal. Where the entire annuity is composed of an interest return upon the principal sum paid therefor, the entire annuity is income. (Amended T. D. 2152.)

Assessments on stock.-Assessments made by a corporation on its capital stock are regarded as an investment of capital and do not constitute an allowable deduction in the return of the individual.

Bad debt.-See Debt.

Beneficiary.-A beneficiary is liable for the normal tax upon the amount of net income derived by him from a taxable source through a fiduciary, less the amount of exemption claimed and the amount of income on which the normal tax has been withheld at source, and is also liable for the additional tax assessable on the amount of net income received by him in excess of $20,000; and in order to determine whether the net income of a beneficiary is or is not in excess of $20,000 and subject to the additional tax, the amount derived by him from an estate and all other taxable sources ́is required to be shown on his personal annual return.

Board of education, requirements of, with reference to withholding.-See Rent.

Bond, premium on.-Where an employee is required to furnish bond and pay the premium on such bond, as a necessary incident of his employment, the premium on the bond will constitute an allowable deduction in computing net in

come.

Bonds containing tax-free covenant clause.-The stipulation in bonds whereby the tax which may be assessed against them, or the income therefrom is guaranteed, is a contract wholly between the corporation and the bondholder, and in so far as the income-tax law applies, the Government will not differentiate between coupons from bonds of this character and those from bonds carrying no such guaranty. The debtor corporation or its duly authorized withholding agent

will be held responsible for the normal tax due in such cases when no exemption is claimed. When coupons are accompanied by certificates of ownership in which no exemption is claimed, the income from such coupons may be included in the return of the individual (under column A, p. 2, of Form 1040, revised) as income upon which the normal tax of 1 per cent has been paid or is to be paid at the source. (T. D. 1948.)

Bonds, interest on.-The exchange of interest coupons for funding bonds is a payment of interest on the bonds and the income tax should be imposed and paid upon such interest as income for the year in which it matures and such payment is made, and in the absence of proper claim for exemption the tax should be deducted and withheld on the amount represented by the coupons.

Book value.-Book values which reflect a shrinkage in the value of assets are not a basis for determining taxable income. (T. D. 2005.)

Certificate of merit, pay for.-See Pay.

Certificate of ownership.-Where bonds, under contract provisions in the bonds, are retired within an interest period and prior to the expiration of the full term of the bond, ownership certificates will be required and should cover that part of the interest period affected between the beginning of such period and the date of the retirement of the bonds.

Certificates. The department will furnish blank forms of certificates to be used in connection with the collection of the income tax by such parties as may make application for the Private corporations and others desiring to have these certificates printed for themselves may do so if they will strictly observe the requirements of the department as to size, print, form, color, and contents.

same.

Certificates to be used in claiming exemption from withholding on income derived from foreign sources. See Income derived from coupons, checks, etc.

Citizenship.-An American woman who marries a foreigner takes the nationality of her husband and can not claim exemption under paragraph C.