All corporations are required to file returns regardless of amount of net income or loss, except those specifically exempt as mutual, cooperative, fraternal, civic, charitable, 2 For 1918 and subsequent years foreign corporations not allowed specific exemption. 3 For 1918-1921, inclusive, war-profits and excess-profits tax of foreign corporations is computed by comparison with representative corporations whose invested capital can be satisfactorily determined and which are engaged in a like or similar trade or business and similarly circumstanced. (See sec. 328, revenue acts 1918 and 1921.) • Net income means "statutory" net income. i. e., the excess of gross income over deductions as defined in the various revenue acts. Foreign corporations report only the net income from sources within the United States. Net income has been adjusted from time to time as follows: (a) Amortization of buildings, machinery, equipment, or other facilities constructed or acquired on or after Apr. 6, 1917, for the production of articles contributing to the procesution of the war, are included to a reasonable amount in business deductions for 1918, 1919, 1920, and 1921. (b) Dividends of domestic corporations were entirely tax exempt for 1918 and subsequent years. The revenue act of 1918 provides, in the case of a net loss for any taxable year beginning after Oct. 31, 1918, and ending prior to Jan. 1, 1920, for (c) Net loss for prior year. the deduction of such loss from the net income of the preceding year, a redetermination of taxes for the preceding year being made. If the net loss exceeds the net income for the preceding year, the amount of such excess is to be deducted from the net income of the succeeding taxable year. For 1921 and subsequent years the revenue acts provide for net loss in any year beginning after Dec. 31, 1920, to be deducted from the net income of the succeeding taxable year and if such net loss exceeds the net income for the succeeding year, the amount of such excess is to be allowed in the neat succeeding year. (d) For insurance companies see special provisions in the various revenue acts. Foreign corporations not allowed the $3,000. Invested capital within the meaning of the statute is the capital actually paid in to the corporation by the stockholders, including surplus and undivided profits (exclusive of that for the current year), stocks, bonds, and other obligations (other than obligations of the United States) the dividends or interest from which are not included in computing net income, and excluding inadmissible assets. (See art. 831 of Regulations 45.) For 1917 foreign corporations reported that proportion of invested capital which net income from sources within the United States was of the entire net income. For 1918-1921, inclusive, it was not necessary for foreign corporations to report invested capital. (See note 3.) 8 Allowed domestic corporations with net income of $25,000 or less. Income of insurance companies, exclusive of mutual companies other than life, taxable at 121⁄2 percent. 11 Same as 1919 and 1920. D.-Corporation income and profits tax rates, exemptions, and credits under the revenue acls of 1909-1928, inclusive-Continued taken that the taxpayer's net income from sources without the United For 1918-21, Inclusive, war-profits and excess-profits tax of foreign corporations is computed by comparison with representative corporations with invested capital can be satisfactorily determined and which are engaged in a like or similar trade or business and similarly circumstanced. (Ree Reo. 328, revenue acts 1918 and 1991. If corporation not in existence during the whole of a least one calendar year during the pre-war perion, the credit with certain exceptions), where the s an amount equal to the same percentage of invested capital for the taxable year an the TIE (AND YO pertentage of net neome to invested in for the taxable CAL but much amount hall in no rates se loan than 10 percent of the invental corporations in excess of the income actually employed in the business, or invested in obligations of the United States sisued after Sept. 1, 1917. For the years 1918 to 1920, a corporation that permitted an unreasonable accumulation of profits was not subject to the ordinary corporation income tax but the individual stockholders were taxed upon their distributive shares of its net income in the same manner as the members of a partnership or a personal-service corporation. For the years 1921 to 1923, an additional tax of 25 percent was imposed upon the taxable net income of a corporation, where it was shown that there had been an evasion of surtax NOTE. For the year 1917, there was also a tax of 10 percent upon that portion of 4431 EXHIBIT No. 1389 [File: Annual Report (P. S. du Pont)] MEMORANDUM FOR MR. P. S. DU PONT Gross receipts from all sources for the years 1915, 1916, 1917, B. Bonus to employees-- $225, 000, 000. 00 602, 000, 000. 00 72, 000, 000. 00 228, 731, 000, 00 The net profits as a result of operations for the period from 1915 to 1918 inclusive aggregated.. Out of which there was paid to stockholders. Leaving Of which there was capitalized and is now represented by capital stock__ 93, 643, 000, 00 29, 955, 000 00 63, 688, 000, 00 71, 206, 000, 00 |