Masonry Magazine October 1970 Page. 20
Taxes
(Continued from page 19)
If this bill becomes law then the gift taxes would have to be paid on a quarterly basis, effective for transfer made after 1970. Payment of estate taxes would be accelerated by a requirement that an estimated estate tax be paid seven months after death (provided the value of the estate exceeds $150,000.)
Secretary of the Treasury Kennedy stated before the Joint Economic Committee that economic stability and higher employment may be attained through these new tax collection speed-ups as well as a stabilized federal budget and the adoption of the proposed postal reform.
WHO MUST FILE
Since the Tax Reform Act of 1969, the income level at which an individual must file an income tax return has been raised.
Provided that an individual is entitled to make a joint return, he need not file a return until his gross income, combined with that of his spouse's, reaches $2300 in 1970, 1971, and 1972.
BUSINESS USE OF HOME
A taxpayer deducted the fair rental value of that part of his home that he used as an office and a laboratory. He argued that he had foregone a personal benefit equal to the rental value of the business portion of the house. The Tax Court disagreed.
A rental deduction for business property is allowed only for payments for the use of property to which the taxpayer has no title or in which he has no equity. This taxpayer had both title to and equity in his home. The court explained that his deduction was limited to a ratable portion of the maintenance cost of his home.
SPECIAL PARTNERS
A partnership adopted a profit-sharing plan and included in it as participants were the "special partners" of the partnership. The term "special partner" was defined in the partnership agreement to mean a limited partner who was employed by the partnership to perform such services as would be performed by a regular common-law employee of the partnership. These special partners were intended to have the dual status of employees and partners. Thus, they would receive compensation for services performed by them as employees and they would also receive a share of the partnership profits with respect to their investment in the partnership.
When asked for its opinion on this arrangement the IRS ruled that inclusion of such special partners in the profit-sharing plan would keep it from qualifying. The IRS takes the position that except to the limited extent applicable to the participation of self-employed individuals, partners are not eligible to participate in a qualified plan. The IRS has now ruled that once an individual's status is established as a bona fide partner of a partnership, it is immaterial, for purposes of his participation in a qualified plan of the partnership, how his partnership interest is defined. Rev. Rul. 70-411.
WORKING PARENT
Did you realize that the deduction for child care expenses is available to a father as well as a mother if he is widowed, divorced or separated? It is also available to a father if his wife is incapacitated or institutionalized.
The maximum amount of the deduction is $600 if only one child is cared for $900 if the expenses are for the care of two or more children. Note: the care may be for a dependent other than a child so long as that person is unable to care for himself.
The care of the child must be necessary in order for a taxpayer to hold down a full-time or part-time job.