Masonry Magazine April 1972 Page. 26
Taxes
(Continued from page 25)
The credit amounts to 20% of cash wages or salaries paid to a WIN employee for his first 12 months of employment. It is not necessary for the 12 months to be consecutive, but they must be within the first two years of employment.
The WIN employee must work in an employer's trade or business, and therefore a household employee would not be eligible. It is necessary that the Labor Department certify that these employees are placed under the WIN program and do not displace other workers.
The IRS advises businessmen who are interested in this program to contact their local state employment service offices. These offices will be able to provide the necessary certification forms. Of course, any information desired on this tax credit may be requested from the local IRS office. (IRS News Release No. 1210.)
EMPLOYEE PLANS
The IRS has announced the development of two new forms and revisions in certain existing forms for use with employee's pension, profit-sharing, and other funded deferred compensation plans. The new and revised forms are to be used for taxable years ending on or after December 31, 1971, and they will be available after March 10, 1972.
The IRS believes that the new forms will help assure that plans will continue to operate in such a manner that they will remain qualified. (T.I.R. No. 1143.)
W-2 SUSPENSION
Employers will not be required to provide copies of the wage and tax statement (W-2) to employees within 30 days after their services are terminated in 1972 until further notice is given by the IRS. The reason behind this is that the IRS has delayed the printing of Form W-2 for 1972 because of pending Social Security legislation. In the event that these Social Security amendments are adopted, then new Social Security information would have to be shown on the W-2. (News Rel. No. 1205.)
BUSINESS LOSS?
How do you determine if a loss is attributable to a taxpayer's business and thus deductible as an ordinary loss? The answer seems to be that there must be a "proximate relationship" between the loss and the taxpayer's trade or business. In a recent case, a taxpayer claimed that he was entitled to take a business loss when he sold stock that he had bought in order to obtain employment with the corporation. This taxpayer could not find employment in his line of work so he finally entered into employment negotiations with a corporation in his field. As a condition of his employment he was required to purchase stock and make loans to the corporation.
The Tax Court found that the taxpayer's primary motivation in the purchase of the stock and in making the loans