QUESTIONS AND ANSWERS ON FEDERAL TAX LAWS 46: .17 192 Based on Revenue Act of 1924 JANUARY, 1925 IRVING BANK-COLUMBIA TRUST COMPANY, New York The Revenue Act of 1924, superseding the Revenue Act of 1921, was signed by President Coolidge June 2, 1924. It differs from the former Law in many particulars. Some of its provisions were retroactive to January 1, 1924, among them Title II, which covers individual and corporation income taxes. Others, like the estate tax (Title III), became effective upon the enactment of the Law. Still other sections, such as the tax on admissions and dues, the repeal of the tax on telephone and telegraph messages and the repeal of the stamp tax on notes and drafts, went into effect thirty days after enactment. The rates of tax on the incomes of individuals have been materially lowered, and the tax for 1923, payable in 1924, was reduced 25 per cent. The tax on corporate net income is 121⁄2 per cent as under the Revenue Act of 1921. New provisions, not in any previous Acts, are Section 209, providing for a lower tax on "earned income"-as from salaries, wages and professional fees; Sections 319 to 324, providing for a gift tax, payable by the donor, on gifts aggregating more than $50,000, and Section 257, which requires the Commissioner of Internal Revenue to publish lists of taxpayers showing the amount paid by each. A Board of Tax Appeals has been created to expedite the disposition of tax cases. Some of the changes follow: Returns Under the Revenue Act of 1921 a married person living with spouse was required to file a return if his net income was more than $2,000, regardless of his exemption. Now he must file a return only when his net income exceeds $2,500, unless his gross income is $5,000 or more, in which case, as under the old Law, a return is required, regardless of the size of the net income. Personal Exemptions The credit of $2,500 to a married person or the head of a family, which was allowed by the Act of 1921 only if the net income was $5,000 or less, now is granted regardless of the size of the net income. A new provision is that if the status of a taxpayer changes during the taxable year from single to married or to head of a family, or vice versa, the appropriate amounts of specific exemption ($1,000 or $2,500 as the case may be) are to be prorated on a monthly basis, and the sum of the two is the al |