valid personal property assessment, of the character described in the last preceding answer, is made prior to August 1, 1919, a valid tax may be levied thereon after that date.

14. How are the taxes collected by the comptroller to be applied?

The comptroller is required (a) to retain a fund of $250,000 from which to pay refunds and abatements to taxpayers; (b) of the remainder, 50 per cent is to be paid into the treasury of the state and used for and applied to state uses and purposes; (c) the remaining 50 per cent is to be apportioned periodically,

at least once in three months by the comptroller, and paid to the treasurers of the several counties of the state in the proportion that the assessed valuation of the real property of each county bears to the aggregate assessed valuation of the real property of the state. In the case of counties included in

the city of New York, payments shall be made to the receiver of taxes of such city.

(Section 382)

15. How will the portion paid to a county treasurer outside of Greater New York be applied?

The county treasurer of each county is required to apportion the amount received among the several towns and cities within the county in the proportion that the assessed valuation of real property of each town or city bears to the aggregate assessed valuation of the real property of the county. In the case of a city, he shall pay the amount apportioned to its chief fiscal officer to be used for general city purposes. In the case of a town, he shall credit the amount apportioned against the county tax payable by a town. If the amount apportioned exceeds the town's share of the county tax, the excess shall be paid to the supervisor to be applied to general town uses and purposes. In the case of the city of New York, the shares of the several counties wholly contained within the city shall be paid into the general fund for the reduction of taxation of the city.

PERSONS TAXED

16. Who is an income taxpayer?

Any person, trust or estate who or which is subject to, or whose income is, in whole or in part, subject to a tax imposed by article 16 of the tax law.

17. Upon whom or the incomes of whom is a tax imposed?

A tax is imposed in respect of the incomes of (a) residents and (b) nonresidents.

18. Who is a resident?

A natural person, not a transient, is a resident of the state for purposes of the income tax. Whether or not one is a transient is determined by his intentions with regard to his

stay. A person who becomes a resident of the state at any time before March 15 of the next succeeding calendar year is a resident of the state for the calendar year for purposes of the income tax. (Section 350, subdivision 7)

19. Who is a nonresident?

A person is a nonresident, within the meaning of the act, if he receives taxable income from property owned or from a business, trade, profession or occupation carried on in the state but is not a resident thereof.

20. Is an alien taxable under this act?

Yes; accordingly as the tax is imposed on him if a resident, or upon his income if a nonresident.

21. Is a corporation taxable under this law?

No. A corporation is taxable under other provisions of law.

22. May a minor be a taxpayer?

Yes. A minor, as such, is not exempt.

23. Is a partnership liable to a tax ?

No, but the members of the partnership are, as individuals. The law, in effect, ignores the partnership's existence as an independent entity and imposes no tax against it, but each individual member of a partnership is taxed on his share of the partnership's "net income ", whether distributed or not. (Section 364)

24. Who is a "fiduciary"?

An individual or corporation acting in a fiduciary capacity for any person, trust or estate; as, for instance, a guardian, trustee, executor, administrator, receiver or conservator. (Section 350, subdivision 5)

25. Is a fiduciary a taxpayer?

Technically, no; practically speaking, yes, because a fiduciary is responsible for the payment of the tax imposed on the income received by certain estates or trusts (section 365). (See answers 41 and 42.)

YEAR

TAXABLE AND FISCAL

26. What is a taxable year?

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The words taxable year mean the calendar year or the fiscal year upon the basis of which net income " is computed. (Section 350, subdivision 4)

27. What is a fiscal year?

The words "fiscal year

mean an accounting period of twelve months, ending on the last day of any month other than December. (Section 350, subdivision 4)

27a. What is the first taxable year?

The calendar year 1919, or that part of a fiscal year ending in 1919, between January 1, 1919, and the end of such fiscal year.

28. Must one return income for a calendar year?

No; in reporting income of 1919, one may elect whether to report for the calendar year or for a fiscal year ending during such calendar year. This statement is subject to the following qualifications: (1) That "net income "must be computed upon the basis of the taxpayer's annual accounting period. (2) If his annual accounting period is other than a fiscal year, as defined, or if he has no accounting period or does not keep books, then " net income " must be computed on the basis of the calendar year. (Section 358). The return should be made for the same accounting period as that used for the federal return, if such basis clearly reflects income.

29. If one reports income for a "fiscal year" ending during 1919, is a tax imposed on the "net income" for the entire fiscal year?

No. It is said in section 351:

"Such tax shall first be levied, collected and paid in the year 1920 upon and with respect to the taxable income for the calendar year 1919, or for any taxable year ending during the year 1919 ",

but that statement must be construed in conjunction with the the following quotation from section 370:

"If a taxpayer making his first return for income tax keeps his accounts on the basis of a fiscal year, he shall make a separate return for the period between the begining of a calendar year in which such fiscal year ends and the end of such fiscal year.

"In all of the above cases the net income shall be computed on the basis of such period for which separate return is made and the tax shall be paid thereon at the rate for the calendar year in which such period is included."

The taxpayer who keeps his accounts by a fiscal year, as defined, will, in 1920, for 1919, unless he elects to change to the calendar year, file two returns with the comptroller, one for the fiscal year, and one for the period commenced January 1. 1919, and ended on the date of the ending of his fiscal year. The two returns are needed in the first year because of the

necessity of having the income and expenses of the entire year in order to determine the taxable income for the portion of the year. His tax will be calculated on the net income disclosed by the report for the shorter period.

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30. If one reports in the first instance according to the calendar year, may he later change to a fiscal year?

Yes, if he first obtains the consent of the comptroller.

31. If one reports in the first instance for a fiscal year, may he later change to the calendar year?

Yes, if he first obtains the consent of the comptroller.

32. If one is a member of a partnership and calculates his "net income" upon the basis of a period different from that upon the basis of which the net income of the partnership is computed, what must he return as his share of the "net income " of the partnership?

He is required to return his distributive share of the "net income" of the partnership for any accounting period of the partnership ending within the fiscal or calendar year upon the basis of which his "net income" is computed. (Section 364) 33. Is that true of 1919 income returns?

This question will be more fully answered by rules and regulations hereafter promulgated. Quite likely in such a case the individual will be required to include in his return only his distributive share of the " net income" of the partnership earned after January 1, 1919, and before the end of the partnership's fiscal year.

INCOME GROSS, NET AND TAXABLE

34. What is income?

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Income, in a broad, general way, means all wealth which flows into a taxpayer other than as a mere return of capital. It includes gains and profits ", including gains derived from the sale, exchange or other disposition of capital assets. It is not limited to cash alone. The statute recognizes as incomedetermining factors other items, among which are inventories, accounts receivable, property exhaustion and accounts payable for expenses incurred.

Gross income means income in the broad sense, less such items thereof as are specifically exempted by statutory provisions.

36. What is "net income "?

That which remains of "gross income " after subtracting

the deductions allowed by law, is

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net income ".

37. What is "taxable income "?

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"Taxable income " is what remains of " net income." after deducting the personal exemption, if any, allowed by section 362, or the credit, if any, granted by section 363. It is the base upon which the income tax is calculated.

38. Does gross income" have the same meaning with reference to both residents and non-residents?

No. In general, with reference to residents, it means income from all sources within and without the State, and, as applied to non-residents, it means income from all sources within the State only.

39. What constitutes the " gross income " of a resident?

It is the total of every item of income derived from all sources whatever except those enumerated in paragraphs to "n" of this answer, received or accrued during the taxable year for which a return is rendered, whether in cash or its equivalent. It includes gains, profits and income derived:

(a) From salaries, wages or compensation for personal service, of whatever kind and in whatever form paid.

(b) From professions, vocations, trades, businesses, commerce, sales, dealings in property, whether real or personal growing out of the ownership or use of or interest in such property.

(c) From interest, rent, dividends, securities.

(d) From the transaction of any business carried on for gain or profit.

(e) From any other source whatever.

It excludes the following items, which are exempt:

(f) Proceeds of life insurance policies paid upon the death of the insured to individual beneficiaries or to the estate of the insured. (Section 359, subdivision 2, paragraph "a")

(g) Amounts received as a return of premium or premiums, by the insured under life insurance, endowment or annuity contracts. (Section 359, subdivision 2, paragraph "b")

(h) Amounts received for personal injuries or sickness, through accident or health insurance or under workmen's compensation acts. (Section 359, subdivision 2, paragraph 'e "')

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(i) Damages received, whether by suit or agreement on account of injuries or sickness, or through the war risk insurance act or any law providing relief for injured or disabled members of the federal military or naval forces. (Section 359, subdivision 2, paragraph" e ")

(j) Gifts, bequests and devises; but income from these is not exempt. (Section 359, subdivision 2, paragraph "C")