(t) COST OF GOODS SOLD PLUS TOTAL OTHER BUSINESS DEDUCTIONS (item k plus item s)............

(u) NET INCOME FROM BUSINESS OR PROFESSION (item e minus item t) (If net loss, enter in red ink and subtract). 10. INCOME FROM INTEREST

(a) Sale price (or fair market value of property received in exchange)..

(b) Cost (or fair market value on Jan. 1, 1919, if acquired prior thereto) of stocks and bonds sold or exchanged.

(e) PROFIT OR LOSS FROM SALE OR EXCHANGE OF STOCKS AND BONDS (item a minus item b) (If loss, enter in red ink and subtract).

14. PROFIT (OR LOSS) FROM SALE OR EXCHANGE OF LANDS, BUILDINGS AND OTHER PROPERTY (Not dealt in as a business and not included in Items 9 or 13) See Instruction 14

If there was more than one sale or exchange during the year, submit separate statement in similar form for each sale and enter net profit (or loss) on item k below.

2.

I swear (or affirm) that to the best of my knowledge and belief the statements contained in this return and the accompanying schedules and statements (if any) are true, and that this return is a true and complete statement of all income, gains and profits received by (or accrued to) the partnership during the taxable year 1919; and that all deductions entered or claimed herein are allowable under the law and regulations.

A. PARTNERSHIP RETURNS. Partnerships as such are not subject to taxation under the law, but every partnership deriving income (a) from property owned within the State of New York, or (b) from a business, trade, profession or occupation carried on in the State of New York must make a return of its income on this form regardless of the amount of its gross or net income, and regardless of the residence of the partners.

A partnership carries on a business, trade, profession or occu pation within the State, if it has, maintains and operates an office, a shop, a store, a warehouse, a factory, an agency or other place where its affairs are systematically and regularly carried

on.

The New York State Income Tax Law makes no distinction between limited partnerships and general partnerships, and all limited partnerships doing business within the State of New York must likewise make returns of income on this form.

An organization, the partnership interests in which are not transferable without the consent of the members is a partnership and not an association. Any so-called association or organiIzation not taxable under Article 9-a of the Tax Law (The Corporation Franchise Tax) and not exempted under such article, will be regarded as a partnership within the meaning of the Income Tax Law.

The New York State Income Tax Law differs from the Federal Income Tax Law in that personal service corporations are not classed as partnerships, and therefore are not distinguished from other corporations. Personal service corporations are not required to file any returns of income on this form, nor are the stockholders of personal service corporations required to report their distributive shares of the income thereof except insofar as they are distributed in the form of salaries or dividends.

B. ACCRUED OR RECEIVED INCOME. Partnership returns may be made

(a) On a cash basis; that is, reporting income received and expenses, etc., paid, or

(b) On an accrual basis; that is, showing income accrued and expenses, etc., incurred or accrued,

in accord with the method of accounting regularly employed in keeping the books of the partnership, provided such method clearly reflects the true income. If the partnership books are not kept on accrual basis, it should report income received and expenses, etc., paid, but in any event must not fail to include all its income even if not entered on the partnership books.

If the partnership reports income on a cash basis, it must include all income.constructively received, such as bank interest credited to its account, or interest coupons due and collectible, but not collected.

C. PERIOD TO BE COVERED BY RETURN. The dates on which the period covered by the return began and ended, if other than the calendar year 1919, must be plainly stated at the head of the return.

The partnership must report its net income for the calendar year 1919, unless its books of account were regularly closed in 1919 at the end of some month other than December, in which case the return must be made on the basis of the fiscal year which ended in 1919.

D. WHEN AND WHERE THE RETURN
SHOULD BE FILED.

This return should be filed at the office of the New York State Income Tax Bureau, Albany, N. Y., and may be sent or mailed to that address.

E. INDIVIDUAL RETURNS OF PARTNERS. Distributie shares tazable to partners.- Each partner must include in his individual return his distributive share, whether or not such share is distributed to, or withdrawn by the partner, of the net income of the partnership, during the partnership's accounting period (whether fiscal or calendar year) which ended during his taxable year (whether fiscal or calendar year). Every distribution or credit shall be deemed to be a ratable dietribution of income of each kind (taxable and non-taxable) received during the year.

A resident member of a partnership must include in his return his distributive share of the profits of every partnership, even though it did no business within the State of New York and derived no income from scurces within the State. If a resident is a member of a partnership that derives no income from sources within the State or fails to file a partnership return, he may be required to make a return of the net income of the partnership. A nonresident member of a partnership must include in his return his distributive share of that portion of the partnership income which was derived from sources within the State. If a nonresident is a member of a partnership that derived income (a) from property owned both within and without the State, or (b) from business carried on both within and without the State, there should be attached to and filed with the return, schedule of apportionment of income on Form 204-A prepared in accordance with the instructions on that form.

Taration of partners in partnership with fiscal year ending in 1919. If the fiscal year of a partnership began in 1918 and ended in 1919, each partner shall report that proportion of his distributive share of the net income of the partnership which the portion of the partnership's accounting period falling within his taxable year bears to the full year.

Charitable contributions by partnerships. In computing the net income of partnerships, charitable contributions may not be deducted. Each partner may, however, deduct from his personal return his proportionate share of such charitable contributions made by the partnership as are allowable deductions to individuals.

F. PENALTIES.

Penalties attach for failing to make a return on time, or for making a false and fraudulent return.

If there is any considerable difference be tween the total net income you did (or will) report on your U. S. retura, and item 19 of this return you should prepare a statement reconciling all differences, which, if not filed with the return, should be retained, as you may be required to submit such a statement Partnerships may submit in Heu of the statement of income called for on pages 2 and 3 of the return, copies of schedules A, B, C and D and supporting schedules thereto, submitted on its United States return for the same period.

later.

COME:

obligations of other states and their politica subdivisions is taxable).

(d) Interest on bonds or other obligations State of New York between June 1, 1917, and on which the investment tax was paid to the May 14, 1919, for the period of years for which such tax stail bave been paid

(e) Proceeds of life lacurance policies and to individual beneficiaries (but the therefrem uct be reported); but the amount by which the toll received on surrender or expiration of polleles during the life of the insured excrds the total premiams paid is income and must be reported in tem 15.