United States Income and War Tax Guide Based on Revenue Act of and Regulations, Rulings and Decisions Up to

United States Income and War Tax Guide Based on Revenue Act of and Regulations, Rulings and Decisions Up to

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This historic book may have numerous typos and missing text. Purchasers can download a free scanned copy of the original book (without typos) from the publisher. Not indexed. Not illustrated. 1919 edition. Excerpt: ...its own bonds below par. Suppose the Fidelity Corporation issues bonds for $960 each, which it must pay in ten years at $1,000 each. There is obviously a loss of $40 on each bond and, although the loss is not actually sustained until the bonds are paid, the liability accrues at once and the corporation is allowed to prorate the loss over the life of the bonds, deducting in each year one-tenth of this loss. It is not permissible to deduct the entire amount the first year. The same rule applies to selling commissions and other expenses incurred in issuing the bonds. The premium paid for the redemption of bonds is also a deductible loss. It has been held that the corporation may deduct as a loss all that it pays in excess of what it originally receives. For example, if the ten-year bonds of the Fidelity Corporation which, in our illustration, were issued at 96, are redeemed after five years at par, the corporation would then have deducted only one-half of the loss under the prorating plan described; therefore it may now deduct the other one-half. If the bonds are redeemed at 102, the loss which may be then deducted is 2 points (or $20 on a $1,000 bond) greater. Suppose now that the bonds were issued at 102 and the corporation included the $20 premium in its taxable income. It may subsequently deduct the $20 when it redeems the bonds at 102. If, in that case, the whole amount received had been treated as capital and not as income when received, then there is no loss when the same amount of capital is repaid. p 170. Capital Stock Issued at Discount or Redeemed at Premium. As has been pointed out (par. 154) any discount upon the issue of capital stock or expenses incurred in selling such stock or raising the capital is entirely a reduction of capital...show more

Product details

  • Paperback | 64 pages
  • 189 x 246 x 3mm | 132g
  • Rarebooksclub.com
  • Miami Fl, United States
  • English
  • black & white illustrations
  • 1236507398
  • 9781236507396