deductions from inyested
CAPITAL
The Revenue Act of 1921 requires
that all corporations having inadmis
sible assets must deduct from invest
ed capital “a per centage thereof
equal to the per centage which the
amount of inadmissible assets is of
the total amount of admissible and
unadmissible assets held during the
taxable year.” For example, the to
tal assets of a corporation for 1921
was $200,000, of which $150,000 was
in inadmissible assets and $50,000 in
admissible assets. The average in
vested capital was $80,000. Applying
the above rule, the invested capital
must be reduced by 75 per cent (the
per centage of the inadmissible as
sets, $150,000, to the total assets,
$200,000). The reduced invested cap
ital, therefore, will be $80,000 (the
invested capital) less $60,000 (75 per
<?ent of the invested capital) or $20,
000. Where a corporation’s income
is reported on a cash receipts and
disbursements basis, accrued items
cannot be taken into consideration in
computing its invested capital.
The payment of a stock dividend
has no effect upon the amount of in
vested capital. The capitilization of
current earnings does not increase the
invested capital. Appreciation in
good will and tangible property de
termined by an appraisal against
which a stock dividend was issued
cannot be allowed as invested capital.
The value of tangible property paid
in for stock or shares in an amount
as limited by Section 326 of the Reve
nue Act of 1921 may be included in
invested capital.
The Revenue Act of 1921 provides
that every corporation, joint stock
company, association and insurance
company not specifically exempt shall
file a return. . There shall be included
in the return a statement which will
enable the Commissioner of Internal
Revenue to determine the portion of
the earnings or profits (taxajjle or
non-taxable) accumulated during the
taxable year for which the return is
made, which have been distributed or
•ordered to be distributed to its stock
holders during such year.
A new and important provision of
the Revenue Act of 1921 is that where
a corporation is formed or availed of
to prevent the imposition of a surtax
upon its stockholders by permitting
its profits to accumulate instead of
being distributed as dividends, it may
be subject to a tax of 25 per cent in
addition to the normal tax of 10 per
cent imposed on corporations, "^he
stockholders, however, may agree
with the Commissioner of Internal
Revenue that the profits of the cor
poration shall be charged to them in
the same manner as the distrib*utive
share of the partners, and pay the
tax as partners. When the corpora
tion is a mere holding company or
its profits accumulate beyond the
normal needs of its business, this
shall be prima facie evidence of a
ptirpose to escape the surtax.- A
reasonable accumulation of surplus,
however, is permitted.
Returns must be filed with the Col
lector of Internal. Revenue for the
district in which the corporation’s
principal place of business is located.
Corporations must file their returns
on the basis of their existing account
ing period which is established as the
twelve month period ending on De
cember 31st or upon the last day of
some month other than December. A
corporation cannot change its ac
counting period without the permis
sion of the Commissioner.
STATE OF NORTH CAROLINA
Department of State
I, J. BRYAN GRIMES, Secretary
of State of the State of North Caro
lina, do hereby certify that Angus E.
Mason, Treasurer of the Carolina
Fruit Company, did, on the 23rd day
of January, A. D. 1922, file in my
office affidavit of the publication of
the preliminary certificate of dissolu
tion of said corporation as required
by Chapter 22 of the Consolidated
Statutes, entitled “Corporations.’’
IN TESTIMONY WHEREOF, I
have hereunto set my hand and affix
ed my official seal, this the 23rd day
of January, A. D. 1922.
J. BRYAN GRIMES,
IQ*’''* Secretary of State.
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AUTHORIZED DEALERS IN MOORE COUNTY
J. W. Austin Plnebluff, N. C.
A. B. Blake & Co....Eagle Springs, N. C.
C. C. Frye Hemp, N. C.
Fox Drug Co Aberdeen, N. C.
A. Green Southern Pines, N. C.
W. A. Johnson West End, N. C.
A. B. Caviness Cameron, N. C.
(P. O. Sanford, N. C.)
Cradtree & Co ...Cameron, N.C.
W. C. Davis Carthage, N. C.
W. C. Hough Carthage, N. C.
W. M. Sea well Carthage, N. C.
A. J. Jones .Glendon, N. C.
D. M. Phillips Glendon, N. C.
Keith's Store Co Vass, N. C.
Vass Mercantile Co Vass, N. C.
Now is the time to buy Automobile
xire:s
before the advance, which is coming
KETfirS GARAGE
The
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Knollwood
Development
The project of Knollv^rood village presents to Moore county
a factor that gives all promise of a big development in the en
tire area of the 5,000 acres belonging to the Knollwood corpora
tion, and to the territory immediately adjacent. Today the state
offers
Nothing: in the way of opimrtunity that is more
desirable as an investment
01* a chance to build up industry than is found right here in
this Knollwood center. From
Knollwood Village
center out to the margin of the property the development will
go on, slower on the margin than at the center, but certain in
all sections.
The Big Movement!
The big movement is now on at the village center, that sec
tion along the Midlands road from the Mid-Pines club to the
Southern Pines boundary. Those interested are invited to con
fer with
A. s. NEWCOMB & CO.
Selling Agents for Knollwood Village, at their office in Pinehurst.
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