The Courier News from Blytheville, Arkansas on January 25, 1956 · Page 7
Get access to this page with a Free Trial

The Courier News from Blytheville, Arkansas · Page 7

Blytheville, Arkansas
Issue Date:
Wednesday, January 25, 1956
Page 7
Start Free Trial

WEDNESDAY, JANUARY .25, 1956 BLYTHEVILLE (ARK.) COURIER NEWS PAGE SEVEN Income Tax Primer VIII: Form 1040 Has Place for All Income-Even Your Winnings By RICHARD A. MULLENS Written for NBA Service No matter what type of income you received in 1955, there is a place to report it on Form 1040. Even the lucky winners of the $64,000 giveaway program have a line on which they report their happy news so the tax collector can take his bite. True, the line is headed "Other Sources" and is used for reporting otherjjt- come, but it is there just the same. This article takes up the last three schedules for reporting income on Form 1040. It will help you if you have, income from pensions or annuities, rents and royalties, and miscellaneous items of incoms such as prizes and awards. Pensions and annuities are reported in Schedule E, page 3 of Form 1040. Under the new annuity rule, the recipient is not taxed on that part of his annual annuiry which Is equal tp the cost of his annuity divided by his total expected return over the life of the contract. He is taxed on.any excess. Once the taxable and non-tax- nble portion of his annual annuity are established, they remain constant throughout the term of his annuity and are reported in Part t of Schedule E on page 3 of Form 1040. In order to fill out Fart I of Schedule E so as to arrive at 'he tai«ble portion of an annuity, it Is necessary to determine several amounts. One ol these, the investment in the contract or annuity, which BO« on UM *• u tne total cost to you of the contract or annuity less any payments received tax-free in previous years under the old three per cent rule. Line 3 of Schedule E calls for an •mount equal to the expected payment* to be received. If the annuity contract 1* lor a fixed number of years, that determines the number of annual payment* whicn, whin multipied by, the amount of the annual payment, will giv« the txpected return. Most annuities, however, ar« for the life of one or more persons. The expected returns from such contracts can only b« determined by using complicated life expectancy tablet. If you lire receiving an annuity or pension, it It suggested that you contact tha Insurance company or other ajrency from which you re- ecivt payments. Most of theM orra- niratlon. are set up to furnish yon the Information needed to fill out Schedule E. Tha fact that an annuity contract or pension was partially paid for by your employer does not affect the method by which it is tax-> ed. However, you must separate your share of the cost from the amount contributed by your employer and show only your cost in line 1 of Schedule E. Your employ- tr of the agency which pays you the Tax Bite on that Big Question- The winner doesn't take all. He has to share a big chunk of it with the tax collector. Here's what the tax bite would be, for instance, on "The $64,000 Question," assuming the winner is a single person with no other Income and no dependents: If he wins ?16,000 ?32,000 $64,000 The la* bite Is 4,448 13,468 36,19* And he keeps $11,552 $18,533 $21,808 If "the" winner has other income, tax on the above amounts Iarl7ar - - -- DAR WINNER — Miss Ruth Ann Ashmore has been named DAB Good Citizenship Girl. She's a member of Armorel High School's f'1'rlPrt (way. annuity or pension should furnish this information. If your contribution is not more than the amount of the pension or annuity payments which you will receive In the first three years after payments start, then you do not report the amounts received under the general rule discussed above. Instead you report the amounts in Part n of Schedule E. This part s quite simple to fill out. It permits your pension or annuity payments to be recovered tax-free up to the amount of your cost or contribution. Thereafter, the payments are fully taxed. Do not report the following pensions or benefits, »s they are not taxable: Government pensions to veterans or their families. Social security benefits. Railroad retirement pensions. Armed forces retirement pay based on a disability resulting from active service. Rental Income is reported on Schedule G of Form 1040. Money you receive for renting any property must be reported. However, the schedule has columns for deducting expenses so that you are only taxed on the profit. Read over the section on Rents and Royalties on page 9 of the official Instructions. This tells what to report as income and also covers the items you can deduct as expenses, Depreciation is the most difficult rental expense to compute, especially for thoM who rent only a room or two in their home. The offlcla. explanation of ftepreciation is on page 10. Schedule I must be .filled out to explain any deduction for depreciation. There are three items whicn should be carefully determined the first year you use Schedule I. One is the "cost or other basis," which goes in column 3; another Is the method of depreciation to be used which goes in column 5; and the last is the expected life of the property If you »re renting out a house o anything larger, you would be wise to get expert help in setting up Schedule I for th« first time. If however, you art renting Just a par of your house or relatively smal items such as house furnishings, the following simple rules for filling ou Schedule I will generally satisfy tn Internal Revenue Service: The 'cost of other basis," was full: explained in Article 6 of this series Land is not depreciable so do no include the value of your lot in the "cost or other basis" of your house in computing depreciation, However, the cost of any major improvements or additions should be included in ••cost or other basis" of your home. If you are renting two out ot six rooms in your house, take one- third of the "cost or other basis' and put that amount in column 3 ot Schedule I after filling out columns 1 and 2. If you rent one out of seven rooms, take one-seventh, ana o on. Next, estimate how many years your house or other rented, property will last from the time you first began renting a part of it. The Iry- ternal Revenue Service has found the average brick house lasts about 40 years from the time it was built and an average frame house about 30 years. Home furnishings average about 10 years. you can use these estimates a. a guide for determining how much onger your property will last. If you think your property will last longer than the above guides, use the longer period. put the number of estimated years in column 6. Put In 'column 4 the total depreciation on the property you have deducted in previous years. The amount shown in column 3 of Schedule O cannot be more than column 3 minus column 4 Schedule I. ' If you are using the straightnne method of depreciation enter in column 5 of Schedule I the words "Straight Line." This means you are dviding it up into equal yearly portions. Now divide the amount you put in column 3 by the number .of years in column 6. This will give you the depreciation to show in column 7 This same amount is then shown In .column 3 of Schedule a. Note that the instructions aay to "report room rent as business Income in Schedule C if you render service, to the occupant. This applies t people operating rooming or board ing houses as a business. Any remaining items of incomi are reported on Schedule H. This 1 the place to report income from an estate or trust, alimony or sep arate maintenance received under n court order, rewards or prizes, re coveries of bad debts, 'and health or accident insurance payments re cei'ved by you as reimbursements fo: medical expenses which reduce, your tax in a prior year. NEXT: Itemized or standard de ductions? burglary Squad To the Rescue LOUISVILLE, Ky. Ufl — Lt. Bert Hawkins, a. detective in the burg- ary 'division, came to the rescue Monday night when a lock jammed Louisville's new police headquarters. A policeman and three switchyard operators were locked in the elephone room about 45 minutes. Nobody could get in or out. But Harfkins, who knows the tricks of the trade he investigates used a coat hanger and two screwdrivers to open the metal door. STARR GAZING B 7 BETTVE NELLE STAKK C.urier Ntwi Stall Cerreipoudenl Des Moines was chosen on this date in 1855 to be the capital ot [owa. Leacue of Nations plan was adopted at Versailles, France on this date in 1919. Thomas Edison's first incanndes- cent lamp was patented on Jan. 21, 1880. First train to run on Panama R&ilroad was on Jan. 28, 1855. Edgar Allan Poe's "Raven" was published on Jan. 29, 1845. It was published in the New York "Even- Ing Mirror" under the pen-name ol Quarles. Mohandas Ganhi was killed on Jan. 30, 1945. Franz Petes- Schubert was born on Jan. 31, W. Defeat never comes to any man until he admits it. Defeat isn't bitter if you don't swallow it. "Cunning" is like a short blanket. If you pull it over lace, you expose your feet. ^A suggested slogan for the dental profession: "Be true to your teeth or they will be false to you." is plain ole rat cheese. Pour Into your fancy chafing dish or else make It right at the table in front of everybody as some iolks always want to know how you make so and so, this way will show 'em. A dash of pure ground gavlic puts a little extra oomph to this dip. Getting back to the chipped beef, fo- heaven's sake pull it apart into little shreds or else somebody will get it ail and the fellow next m line won't get a bit. Dictatorship is like a great beech- tree, nice to look at, but nothing grows under it. Here's a good dip and also a good chance to show off your chafing dish. 1 No. 2 can of tomatoes, mashed 1 large onion chopped 1 glass of dried chipped beef 1 tablespoon chili sauce 1 tablespoon Lea and Perrin sauce 1 teaspoon white pepper 1 pound of grated cheese. Simmer tomatoes and onions together until almost dry. I said almost. Add rest of Ingredients, mix well and barely simmer until cheese melts and the best cheese for this Some men are successful chiefly because they didn't have the advantages others had. History repeats Itself; that's one of the things that's wrong with history, so Clarence Darrow once said. There are well-dressed foolis.1 ideas just as there are well-dressed fools. Tne best way for big business to keep on the upgrade is la stay on the level. Liquor .talks mignuy loud when it gets loose from the jug. Love, so Josh Billings said, is like the measles. The later in life we have It, the tougher it goes with us, Even the most selfish person Is convinced he lives for others. It's all right for a girl to seek a model husband, but while she is at it, she should be sure he is a working model. I found out on my recent trip to Houston, Tex., what the songwriter had in mind when he wrote "It's June in January." Roses, in all their glory, were In full bloom. Libiscus in shades of deep red to a delicate pastel to say nothing of the white ones, grew as tall as an ordinary one story house. Pansies nodding in every direction. I thought immediately of those that jrow like mad out In the yards and ,n one yard, the occupant had trained a bush of them up an Iroa trellis which framed the front ot the house. Coming through Louisiana, tn» early marcisst were in full bloom and to make you even more zealous for warmer weather, the bathers down in the Gulf at Galvestoa were decked out in the latest styles In swim suits and children were digging in the sand looking for sea sheels. Imagine my surprise when we hit "snow and ice" around Pine Bluff on our way home. All that ran around in my sleepy head was to hurry home &nd m»l» a gallon of boiled custard and treat myself to a glass of snow ice cream that those down in Texas way ontr have visions about. The person who wakes up and Mrs. aiocuuM Blytheville. One yard that stood out along the by-way had planted beds of pansies around the stately pine trees that lined the highway in front of the house. The beds were lined with the old- fashion favorite of white sweet alyssum. You'd have to see the poinsettias to believe me. The ones we nurse in the house. 11 Injured In Train Crash t nMnnw nr.» im — TOovon sons were injured, apparently norj* seriously, in the headon crash Monday night of two Canadian National Railway pasenger trains on th« London-Stratford-Toronto main lin» 20 miles northeast of London. Railway sources said ordinarily one of the trains would have been on a siding but officials -would not explain why it was not. SIMPLIFY SHOPPING AND SAVING WITH _What do you Need? - Get it fast with a low cost want ad! Thrifty women - and mtn, too - read our clawified adi .very day for th. b«tt rtaion in rhe world: YOU SAVl! /Want adi in this paper are a market place for everything yo U want to buy, sell, or swap and - for expert services. ... Get the cloiiified shopping habit, now. ... we will help you write the Ad! Adi placed before 5 p.m. will appear next day, except for Monday's paper when ads must be placed by noon Saturday. All classified advertising payable in adyance. Bi YTHEVII i E COURIER NEWS If you live out of town... and want THE COURIER NEWS Contact these agents LUXORA —C.H.Bpnner OSCEOLA - Mrs. Margaret Morse 325 Elizabeth, Phone 387 WILSON Billy Burns 27 Adams Keiser Truman Henderson DELL Donnie Baker MANILA Charles Miller HOLLAND --Jimmy Jones STEELE Sonny Stroud HAYTI Clifford Dickerson 600 N. Third CARUTHERSVILLE - - Mike Dale 1808 Parkview, Phone 1127 INVESTMENT OPPORTUNITY IN A FAST GROWING ARKANSAS CORPORATION THE MISSISSIPPI VALLEY COMPANY HAS AUTHORIZED SALE TO BONAFIDE RESIDENTS OF ARKANSAS 10,000 SHARES OF STOCK AT 25 PER SHARE FOR THE PURPOSE OF EXPANDING The MISSISSIPPI VALLEY INSURANCE CO. of Jonesboro, Arkansas An Old Line Legal Reserve Company Operating Since 1951 Every share of stock sold In the previous issues was to Arkansans; none has been sold at less than $10, and none has been given for service. The largest shareholder owns leas than 20 per cent of the stock and the combined total owned by the board of director is less than 50 per cent. The company is truly owned and operated by the stockholders. •Obviously, the large dividends th»t Investors seek In buying insurance stocks cannot materialize unlll the company has a substantial amount of business on Us books. How much Is 'substantial'? It varies in every situation, but It Is generally agreed among Insurance people that a young company baling 55,000,000 of Life Insurance in force is well 'on Its wa.y-r-r-7-ana-th»t-one-wtth $20,000,000 has 'arrived.'" Richard Cole in "The Hidden Way To Wealth" $ MISSISSIPPI VALLEY LIFE INSURANCE COMPANY Has Insurance Totaling Approximately 5,000,000 IN FORCE NOW IS THE TIME TO INVEST HAMBURGERS For your protection, our Hamburger Patties are prepared and delivered frozen by a nationally known government inspected meat packing plant. A warm well-seasoned bun enhances the wholesome deliciousness of this pure hamburger. KREAM KASTLE MISSISSIPPI VALLEY LIFE INSURANCE COMPANY WROTE MORE THAN $3,000,000 IN NEW BUSINESS IN 1955. THE GOAL FOR 1956 IS $5,000,000 ADDITIONAL. You Can't Afford to Miss This Opportunity! _ . _ . 1 LJ p This offer expires March 1, 1956, or as soon as 10,000 shares DE AD LI N t! are sold and is limited to Arkansas residents. Mail This Coupon and Get Full Details on How You Car, Put Money to Work For BIG PROFITS Walnut & Division Phone 3-8051 DRIVE-IN nniT • FLASH CAMERAS KLNI • MOVIE CAMERAS Complete Selection of Flash Bulbs, Polaroid Film, Color Film, Movie Film BARNEY'S DRUG STORE 2006 W. Main Ph. 3-3647 The Mississippi Valley Co. 910 South Main Street Jonesboro, Ark. Gentlemen: With no obligation on my part, please send me information concerning purchases of your stock. NAME ADDRESS CITY _•__•__ • YOU MAY INVEST $25 TO $2,500 • 12-MONTH INSTALLMENT PLAN i Sold Only to Arkansas Residents OFFICERS and DIRECTORS Freri Carter, Lake City Frctl C. Graubcrger, Jones- horo P. K. Holmes, Newport Dr. W. !•'. Berry, Jonesboro Earclic Shannon, Leachville Glenn 11. Lcary, Jonesboro Julian James, Jonesboro M. S. Ruhenstcin, Lake City Dr. J. A. Pulliam, Jonesboro FranU Angelo, Jonesboro Don Wylie, T.vronza Eugene C. Graubcrger, Jono.sboro J. Don Welch, Jonesboro Doyne I). Brown, Jonesboro LEGAL COUNSKLi Barrett, VVhealley, Smith & Deaton Minimum 5 Shares Mississippi Valley Company

Get access to

  • The largest online newspaper archive
  • 11,200+ newspapers from the 1700s–2000s
  • Millions of additional pages added every month

Try it free