FORMS FOR CORPORATIONS UNDER FEDERAL INCOME TAX OF 1913 RETURN OF ANNUAL NET INCOME ended. RETURN OF NET INCOME Received during the calendar (fiscal) year ..... 191.., by..... (Name of banking or other financial institution) a corporation, the principal place of business of which is located. City or Town of..... at..... (Street and No.) in the State of............. (The "year" as hereinafter used means the calendar year or fiscal year as the case may be.) 1. Total amount of paid-up capital stock outstanding at close of the year, or if no capital stock, the cap ital employed in the business at the close of 2. Total amount of bonded and other indebtedness out standing at close of year... 3. GROSS INCOME (see Note A, and "Instructions," paragraphs 10, 17, 18, and 19 infra)........ DEDUCTIONS 4. (a) Total amount of all the ordinary and necessary expenses paid within the year in the maintenance and operation of the business and properties of the corporation EXCLUSIVE OF INTEREST PAYMENTS. (See Note B)..... ..... (b) All rentals or other payments required to be made as a condition to the continued use or possession of the property. (See paragraph 12 of "Instructions" infra) ..... $. 5. (a) Total amount of losses sustained during the year (c) Total amount of interest received from obliga- 7. (a) Total taxes paid during the year imposed under authority of the United States or any State or Territory thereof (b) Foreign taxes paid.. .... TOTAL DEDUCTIONS. 8. Net income on which tax at 1 per centum is calcu lated STATE OF. the... $. $ ..... TO WIT: Treasurer, of a corporation, whose return of annual net income is set forth above, being severally duly sworn, each for himself, deposes and says that the foregoing report and the several items therein set forth are, to his best knowledge and belief and from such information as he has been able to obtain, true and correct in each and every particular; that the amount of gross income therein set forth is the full amount of gross income, without any deduction whatsoever, received from all sources by the said corporation during the year stated, and that the net income therein set forth is the full amount upon which the tax at 1 per centum is to be calculated and assessed. SWORN AND SUBSCRIBED to before me this.... NOTE A.-Gross income shall consist of the total revenues derived from the operation and management of its business and properties, together with all amounts of income from other sources, including dividends received on stock of other organizations, whether subject to this tax or not, and interest received upon obligations of a State or political subdivision thereof, and upon the obligations of the United States or its possessions, as shown by entries upon its books during the year for which the return is made. NOTE B.-The deductions authorized shall include all expense items under the various heads acknowledged as liabilities by the corporation making the return and entered upon its books during the year. Amounts of income expended in paying dividends on stock, preferred or common, or in making permanent improvements or betterments, etc., or in any way transferred to capital account, should not be deducted in ascertaining annual net income. Interest paid on mortgage indebtedness on real estate occupied or used by a corporation may be deducted under Item 4, if the interest is paid as a rental or franchise charge, payment of which is required to be made as a condition to the continued use and possession of the property. The amount so paid and included in Item 4 should be stated separately under Item 4 (b). (See paragraph 12 of Instructions infra.) INSTRUCTIONS SPECIAL NOTICE.-This form, properly filled out and executed, must be in the hands of the collector of internal revenue for the district in which is located the principal business office of the corporation making the return, on or before March 1, in case the return is based on the calendar year, or within 60 days after the expiration of the fiscal year in case the return is made on that basis. For failure to comply with this provision of the law, the amount of the assessment is increased 50 per cent. and liability to a specific penalty not exceeding $10,000 is incurred. 1. This return of annual net income should be filed with the Collector of Internal Revenue of the district in which the corporation has its principal place of business. 2. The principal place of business as used in the act and in these regulations is held to mean the place in which the books of account and other data to be used in preparing the return of annual net income are ordinarily kept. 3. Returns must be verified by two officers of the corporation; that is, by two individuals, namely, the president, vice-president, or other principal officer, and treasurer or assistant treasurer, or chief financial officer. 4. The affidavit of verification must be made before a notary public or some other officer qualified to administer oaths, and the seal of the attesting officer, if such officer is required by law to have a seal, must be impressed on the return in the space reserved for that purpose. 5. The return must be true and accurate in every respect and must disclose all the income arising, accruing, or received from all sources during the year for which the return is made. 6. If the return is based upon the calendar year it should be filed with the collector on or before the first day of March next succeeding such calendar year. If it is made on the basis of business transacted during a fiscal year, duly designated in accordance with the law and the regulations, the return must be filed with the collector on or before the last day of the 60-day period next following the date designated as the close of the fiscal year. 7. In case of sickness or absence of an officer required to verify the return, the collector of the district is authorized to extend the time for filing such return not exceeding 30 days from the date when such return is otherwise due. Appellation for such extension should be made prior to the date when the return is due, or within the thirty-day period for which such extension is desired and can be granted. 8. Item No. 1 of the schedule of this form (supra) should not include unissued or treasury stock, but only such stock as has actually been issued and for which payment has been received; or, in case no stock is issued, there should be reported under this item the amount of capital actually employed in the business and property of the corporation. In cases wherein the capital stock is issued payable in installments or upon assessment. only so much of the capital as has been actually paid in upon such installments or assessments should be reported under this item. 9. Item No. 2 should include all interest-bearing indebtedness for the payment of which the corporation or its property is bound. In case of banking corporations and like financial institutions, deposits should not be reported as indebtedness under this head. 10. Item No. 3 of the return form (gross income) should include all income derived from the operations and management of the business and properties, together with all actual increases in value by appraisement, adjustment, or otherwise in the value of the assets which have been taken up on the books as income or credited to profit and loss during the year. In the case of a corporation organized, authorized, or existing under the laws of any foreign country, the gross income to be returned is the gross amount of its income for the year resulting from business transacted and capital invested within the United States. 11. Item No. 4 (a) should include the total amount of all ordinary and necessary expenses paid out of earnings in the maintenance and operation of the business and properties of the corporation, etc., exclusive of interest and other payments to be listed under their respective heads on the return forms. 12. Item No. 4 (b) should include all rentals or other payments required to be made as a condition to the continued use or possession of the property. In cases where interest on a mortgage on property occupied or used by the corporation is paid as a condition to its possession and use, thus becoming in the nature of a rental charge, such interest charge may be included in the deduction under this item. Mortgage indebtedness, assumed or unassumed, on property to which the corporation has taken or is taking title, or in which it has an equity, or in the acquirement of which the mortgage was considered a part of the purchase price, is held to be a debt of the corporation and interest paid on such indebtedness will be deductible only under Item 6 of the return. 13. The amount claimed under Item No. 5 (b) for depreciation should be such an amount as measures the loss which the corporation actually sustains during the year in the value of buildings, machinery, and such other property as is subject to depreciation on account of wear and tear, exhaustion, or obsolescence. The amount taken credit for on this account in order to be allowable should be so entered on the books as to constitute a liability against the assets of the corporation. |