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Income Tax Reports
When Sales Are Made on Terms
Income Received When Sales Are Made on Terms Is Covered
by Section 221 of the Revenue Act of 1926—Regulations
Promulgated on Instalment Income by Government Officials
W
ASHINGTON, D. C, January 17.—In
view of the fact that music dealers
throughout the country will shortly be
called to render their tax returns for 1926, it is
timely to call to their attention Section 212 of
the 1°26 revenue act, which provided that in the
case of instalment sales only, such income as is
actually received during the taxable year need
be reported. Until the adoption of this pro-
vision, merchants selling on the instalment plan
were required to report the gross value of their
sales.
Under section 212 (d) of the 1926 act, mer-
chants selling personal property on the instal-
ment plan need return as income from such
sales in any taxable year only "such proportion
of the instalment payments actually received in
that year which the total profit realized, or to
be realized when the payment is completed,
bears to the total contract price." This relief
applies toall sales up to $1,000 in value; in the
case of sales in excess -of $1,000, it is applicable
only if not more than one-fourth of the selling
price is received as an initial payment.
Regulations promulgated by the Bureau of
Internal Revenue for the making of returns
under this section of the law were reported in
the September 4 issue of The Music Trade Re-
view, but are again summarized for the benefit
of music dealers who wish to avail themselves
of the provision. It is not mandatory, however,
that taxpayers adopt the instalment method of
accounting for such income; where they choose,
as a matter of consistent practice, to return the
'income from instalment sales on the straight
accrual or cash receipts and disbursements basis,
they may do so.
The bureau's regulations provide that "a per-
son who regularly sells or otherwise disposes of
personal property on the instalment plan,
whether or not title remains in the vendor un-
til the property is fully paid for, may return as
income therefrom in any taxable year that pro-
portion of the instalment payments actually re-
ceived in that year which the total or gross
profit (that is, sales less cost of goods sold)
realized or to be realized when the property is
paid for, bears to the total contract price.
"Thus the income of a dealer in personal
property on the instalment plan may be ascer-
tained by taking as income that proportion of
the total payments received in the taxable year
from instalment sales (such payments being al-
located to the year against the sales of which
they apply), which the total or gross profit
realized or to be realized on the total instal-
ment sales made during each year bears to the
total contract price of all such sales made dur-
ing that respective year.
"No payments received in the taxable year
shall be excluded in computing the amount of
income to be returned on the ground that they
were received under a sale the total profit from
which was returned as income during a taxable
year or years prior to the change by the tax-
payer to the instalment basis of returning in-
come, nor are deductible items to be allocated
to the years in which the profits from the sales
of a particular year are to be returned as in-
come, but must be deducted for the taxable year
m which the items are paid or incurred or paid
or accrued, as provided by section 200 (d) of
the revenue act of 1916.
"In the case of a casual sale or other casual
disposition of personal property for a price ex-
ceeding $1,000, income may be returned on the
instalment basis provided the payments received
in cash or property other than evidences of in-
debtedness of the purchaser during the taxable
year in which the sale or other disposition is
made do not exceed one-fourth of the purchase
price.
"If for any reason the purchaser defaults in
any of his payments, and the vendor returning
income on the instalment plan repossesses the
property, the entire amount received on in-
stalment payments and retained by the vendor,
less the profits previously returned as income,
will be income of the vendor for the year in
which the property is repossessed, and the prop-
erty repossessed must be included in the in-
ventory of the vendor at its original cost, less
proper allowance for damage and use, if any."
Franklin's Musical Side
Even the Newspapers
Featured on Birthday
Talked About It
Sesquicentennial Year Celebration of Benjamin
Franklin's Birthday Affords Opportunity For
Stressing His Interest in Music
Widespread observance of sesquicentennial
anniversaries of events in which Benjamin
Franklin took so active a part, are again bring-
ing to the front interest in his musical side,
Courtesy of the Etude
Franklin as a Musician
which has been noted from time to time by the
organized music industries. His birthday an-
niversary was celebrated January 17. A number
of requests for the songs he wrote, which were
published several years ago by the Music Indus-
tries Chamber of Commerce, were received in-
cluding one for fifty copies by Franklin Rache
Huntington, a direct descendant, who is in charge
of the Franklin Day celebration at Philadelphia.
This was under auspices of the Poor Richard
Club and was a big event this year. Franklin in-
vented the (h) armonica, an instrument based
on musical glasses, which attained some popu-
larity and for which Beethoven and Mozart are
said to have written compositions. The notice
taken of Franklin's musical side included his
adoption by resolution as a patron saint of the
music industries, in convention in New York
last June. The musical phase of Franklin's
many activities is new to many people and has
resulted in much publicity. C. L. Dennis, of
the Chamber, was elected a trustee of the In-
ternational Benjamin Franklin Society.
Window Display of Aeolian Representative in
Terre Haute Attracts Wide Attention
TERRK HAUTK, I ND., January 15.—Considerable
attention has been drawn to the window of
Paige's Music Store here recently, where the
photographs of many local residences posses-
sing Steinway or Weber Duo-Art pianos are on
display. Comment was also made in the Terre
Haute Saturday Spectator, which carried the
following notice: "Charming, indeed, are some
of the interiors shown. This \\as certainly been
proven by a number of people who have stopped
to look in the window. Homekeepers who are
always looking for something different for
their own home have been noticed to make note
of something that especially caught their eye
and one can imagine that it will not be long
until there is a similar arrangement in their
home.
"There are about a dozen different views
shown, all of which contain one of these finer
pianos. Surely this should prove that Terre
Haute is not lacking in appreciation of the finer
things. These are only a few of the homes
which have in them such pianos, however, and
there are many more not shown in the display.
Mr. Stratton, an Aeolian salesman who was here
recently, said, 'I know of no place where there
are so many fine pianos sold as there are in
Terre Haute, outside of the larger cities.' "
Lawrence Go. Chartered
LKWISTON, MI:., January IS.—Papers of incor-
poration for the Lawrence Music Co., of this
city, were filed recently and common stock of
1,000 shares was issued as capital stock with
nothing paid in. The officers of the company
are: President, Winworth T. Warren, of Lewis-
ton; Treasurer, Henry H. Gautier, of Auburn,
and Vice-president, Alice P. Warren, of Lewis-
ion.
W. B. Whitney Dies
Walter H. Whitney, formerly of Binghamton,
N. Y., who has been manager of the Weeks &
Dickinson music store in Endicott, N. Y., for
the past five years, died recently at his home
at the former place as the result of a heart
attack. He was seventy years of age-at the time
of his death.