State Of New York et al v. Mnuchin et al

Filing 47

DECLARATION of Owen T. Conroy in Support re: 44 CROSS MOTION for Summary Judgment .. Document filed by State Of Connecticut, State Of New York, State of Maryland, State of New Jersey. (Attachments: # 1 Exhibit 1, # 2 Exhibit 2, # 3 Exhibit 3, # 4 Exhibit 4, # 5 Exhibit 5, # 6 Exhibit 6, # 7 Exhibit 7, # 8 Exhibit 8, # 9 Exhibit 9, # 10 Exhibit 10, # 11 Exhibit 11, # 12 Exhibit 12, # 13 Exhibit 13, # 14 Exhibit 14, # 15 Exhibit 15, # 16 Exhibit 16, # 17 Exhibit 17, # 18 Exhibit 18, # 19 Exhibit 19, # 20 Exhibit 20, # 21 Exhibit 21, # 22 Exhibit 22, # 23 Exhibit 23, # 24 Exhibit 24, # 25 Exhibit 25, # 26 Exhibit 26, # 27 Exhibit 27, # 28 Exhibit 28, # 29 Exhibit 29, # 30 Exhibit 30, # 31 Exhibit 31, # 32 Exhibit 32, # 33 Exhibit 33, # 34 Exhibit 34, # 35 Exhibit 35, # 36 Exhibit 36, # 37 Exhibit 37, # 38 Exhibit 38, # 39 Exhibit 39, # 40 Exhibit 40, # 41 Exhibit 41, # 42 Exhibit 42, # 43 Exhibit 43, # 44 Exhibit 44, # 45 Exhibit 45, # 46 Exhibit 46, # 47 Exhibit 47, # 48 Exhibit 48, # 49 Exhibit 49, # 50 Exhibit 50, # 51 Exhibit 51, # 52 Exhibit 52, # 53 Exhibit 53, # 54 Exhibit 54, # 55 Exhibit 55, # 56 Exhibit 56, # 57 Exhibit 57, # 58 Exhibit 58, # 59 Exhibit 59, # 60 Exhibit 60, # 61 Exhibit 61, # 62 Exhibit 62, # 63 Exhibit 63, # 64 Exhibit 64, # 65 Exhibit 65, # 66 Exhibit 66, # 67 Exhibit 67, # 68 Exhibit 68, # 69 Exhibit 69, # 70 Exhibit 70, # 71 Exhibit 71, # 72 Exhibit 72, # 73 Exhibit 73, # 74 Exhibit 74, # 75 Exhibit 75, # 76 Exhibit 76, # 77 Exhibit 77, # 78 Exhibit 78, # 79 Exhibit 79, # 80 Exhibit 80, # 81 Exhibit 81, # 82 Exhibit 82, # 83 Exhibit 83, # 84 Exhibit 84, # 85 Exhibit 85, # 86 Exhibit 86, # 87 Exhibit 87, # 88 Exhibit 88, # 89 Exhibit 89, # 90 Exhibit 90, # 91 Exhibit 91, # 92 Exhibit 92, # 93 Exhibit 93, # 94 Exhibit 94, # 95 Exhibit 95, # 96 Exhibit 96, # 97 Exhibit 97, # 98 Exhibit 98, # 99 Exhibit 99, # 100 Exhibit 100, # 101 Exhibit 101, # 102 Exhibit 102, # 103 Exhibit 103, # 104 Exhibit 104, # 105 Exhibit 105, # 106 Exhibit 106)(Conroy, Owen)

Exhibit 32

SIXTY-EIGHTH CONGRESS.

SEss. I. CH1. 234.

1924.

269

scoMd
2TAX.
Territory, political subdivision, or the District of Columbia, bears to
the amount of the net income from the operation of such public
utility for such taxable year.Io
accrueto
(B) If by the terms of such contract no part of the proceeds from state, et.. Xtthe net In.
the operation of the public utility for the taxable year would, irre- comeofper son taxable.
spective of the tax imposed by this title, accrue directly to or for the
use of such State, Territory, political subdivision, or the District of
Columbia, then the tax upon the net income of such person from the
operation of such public utility shall be levied, assessed, collected,
and aid in the manner and at the r&Ites prescribed in this title;
from for.
8)The income of a nonresident alien or foreign corporation eg sialps brnonrest.
w
consists exclusively of earmngs derived from the operation of dent alien,
a ship or ships documented under the laws of a foreign country ConditionCs.
which grants an equivalent exemption to citizens of the United

States and to corporations organized in the United States;

(9) Amounts received as compensation, family allotments and itatbonalloMand rehabll.
wanes, and
o
allowances under the provisions of the War Risk Insurance and the
Vocational Rehabilitation Acts or the World War Veterans' Act,
1924, or as pensions from the United States for service of the beneficiary or another in the military or naval forces of the United
States in time of war, or as a State pension for services rendered
by the beneficiary or another for which the State is paying a pension;
do*
(10) The amount received by an individual before Januar 1 Dividend s fromasso
Iding
1927, as dividends or interest from domestic building and loan eam8bons beto)ror
January
associations, substantially all the business of which is confined to "'
making loans to members, but the amount excluded from gross in- LiWt.
come under this paragraph in any taxable year shall not exceed $300; Rent of
(11) The rental value of a dwelling house and appurtenances ddf
thereof furnished to a minister of the gospel as part of his compensation;
of ship.
(12) The receipts of shipowners' mutual protection and indemnity of
u' ta I d
associations, not organized for profit and no part of the net earn- anOns ons.
ings of which inures to the benefit of any private shareholder; but nestrien
such corporations shall be subject as other persons to the tax upon
their net income from interest, dividends, and rents;

1vidends to

(18) In the case of an individual, amounts distributed as divi. chi"nweri dents from
dends to or for his benefit by a corporation organized under the rations. de Act cor.
China Trade Act, 1922, if, at the time of such distribution, he is a vol , P M.
citizen of China, resident' therein, and the equitable right to the - P
income of the shares of stock of th; corporation is in good faith
vested in him.
aliens.
(c) In the case of' a nonresident alien individual, gross income Nonreside ent of only
ome
means only the gross income from sources within the United States, from Unit eod Atates
sources.
determined under the provisions of section 211.
DEDUCTIONS ALLOWED INDIVIDUALS.

Deductions allowed.

SEO. 214. (a) In,computing net income there shall be allowed as Items speified.
deductions:
Business expenses.
(1) All the ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or business, including
a reasonable allowance for salaries or other compensation for per- Traveling, etc., In.
sonal services actually rendered; traveling expenses (including the eluded as.
entire amount expended for meals and lodging) while away from
home in the pursuit of a trade or business; and rentals or other payments required to be made as a condition to the continued use or possession, for purposes of the trade or business, of property to which
the taxpayer has not taken or is not taking title or in which he has

no equity;

-INN.m

SIXTY-EIGHTH CONGRESS.

270

.
SES 1. CHI234.

1924.

(2) All interest paid or accrued within the taxable year on indebtedness, except on indebtedness incurred or continued to purchase
t
xception.
the
or carry obligations or securities (other than obligations of suband originally
United States issued after September 24, 1917,
scribed for by the taxpayer) the interest upon which is wholly exempt from taxation under this title;the taxable year except (A) in(3) Taxes paid or accrued within
Taxes paid.
come, war-profits, and excess-profits taxes imposed by the authority
Exceptions'
of. the United States, (B) so much of the income, war-profits and
excess-profits taxes, imposed b the authority of any foreign country
is allowed as a credit under
or possession of the United Sates, as local benefits of a kind tendsection 222, (0) taxes assessed against
taxes
ing to increase the value of the property assessed, and (D) of a
imposed upon the taxpayer upon his interest as shareholder
are paid by the corporation without reimburseAcual of estate, corporation, which
ment from the taxpayer. For the purpose of this paragraph, estate,
etc., taxes.
inheritance, legacy, and succession taxes accrue on the duo date
thereof except as otherwise provided by the law of the jurisdiction
imposing such taxes;
(4) Losses sustained during the taxable year and not compensated
if incurred in trade or business;
Losses not connected for by insurance or otherwise, the taxable year and not compensated
sustained during
(6) Losses
with trade or business.
for by insurance or otherwise, if incurred in any transaction entered
or business; but
into for profit, though not connected with the tradethe profit if such
only if
in the case of a nonresident alien individual
in a profit, would be taxable under tius title.
Itestrictionas toSalestransaction had resulted
for any
No deduction shall be allowed under this paragraph dispositionloss
of stock, etc.
of
in any sale or other
claimed to have been sustained
shares of stock or securities where it appears that within thirty days
before or after the date of such sale or other disposition the taxpayer
has enhas acquired (otherwise than by bequest or inheritance oridentical
tered into a contract or option to acquire substantially
for
Ins

eX
on.

held b the taxpayer

property so acquired is
periodand the
owanceorarto property, after such sal or other disposition.

such acquisition

or the contract or option to acquire is to the extent of part only of
substantially identical property, then only a proportionate part of
asss otthe loss shall be disallowed;
Casaly
year property
(6) Losses sustained during the taxable.in theofcase of a not conwith the
connected
nonresinected with the trade or business (but
business.
dent alien individual only property within the United States) if
arising from fires, storms, shipwreck, or other casualty, or from
The
and if not compensated for by insurance or otherwise. paradductons dtringheft,
of the deduction under this
basik for determining the amount
shall be the same as is provided in
graph, or paragraph (4) or (5), ga or loss from the sale or other
the
section 204 for determining
Ante, p 258.
dorthlesbts

disposition ofascertaine
property;
(ot
.Debts

worthless and charged off within the
reasonable
taxable year (or, in the discretion of the Commissioner, athat a debt
h
s
dofwti
when
to a reserve for ob otls
to ebargeofmrt; bad debts); and ndca atisfied
AMaddition
is recoverable only in part, the Commissioner may allow such debt
ofinl paloanc for the exhaustion, wear and tear of
Exhaustionl, etc., of to b )
busrproper used in the trade or business, including a reasonable allowty
Otbe

Minsoi ad asance for obsolescence; mines,
Mes, tcl
(ad In the case of
9)

ble allow*
for depletion, et.

leasesand

oil and gas wells, other natural deposits,
an timber, a reasonable allowance for depletion and for depreeation of improvements, according to the peculiar conditions n each
easee Auch reasonable allowance in all cases tobe made under rules
'regutlations to be prescribed by of Commissioner, with the approval of the Secretary In the casethe leases he deduction allowed

SIXTY-EIGHTH CONGRESS.

SESS. I. CII. 234.

1924.

271

NCOM TAX
b this paragraph shall be.equitably apportioned between the lessor
and lessee;
to or
(10) Contributions or gifts made within the taxable yearor any Gifts, etc. uses.
For public
for the use of: (A) The United States, any State, Territory,
political subdivision thereof, or the District of Columbia, for ex- Corptions, corn.
elusively public purposes; (B any corporation, or trust, or com- miunity chsts, religiunity chest, fund, or oundation organized and operated ex- OUs, scientific, etc.,
elusively for religious, charitable, scientific, literary, or educational o
purposes, or for the prevention of cruelty to children or animals, Condtion.
no part of the net earnings of which inures to the benefit of any vocational rehabili.
private shareholder or individual; (C) the special fund for voca- ttion.
tional rehabilitation authorized by section 7 of the Vocational Re- Vol. 40, p. 019.

habilitation Act; (D) posts or organizations of war veterans, or inoet1erm

oran,

auxiliary units or societies of any such posts or organizations, if
such posts, organizations, units, or societies are organized in the
United States or any of its possessions, and if no part of their net
earnings inures to the benefit of any private shareholder or indi- Fraternalodges, etc.
vidual; or (E) a fraternal society, order, or association, operating Conditions.
under the lodge system, but only if such contributions or gifts are to
be used exclusively for religious, charitable, scientific literary, or Prevention o(cruelty
educational purposes, or for e prevention of cruelty to children or to children, etc.
animals; to an amount which in all the above cases combined does Limi.
not exceed 15 per centum of the taxpayer's net income as computed Allowance of full
without the benefit of this paragraph, except that if in the taxable amount
inplalcases.

year and in each of the ten preceding taxable years the amount in

Conditions.

all the above cases combined exceeds 90 per centuni of the taxpayer's
net income for each such year, as computed without the benefit of

this paragrap,

then to the. full amount of such contributions and
.

gifts made within the taxable year. In case of a nonresident alien
individual this deduction shall be allowed only as to contributions
or gifts made to domestic corporations or to community chests, funds
or foundations created in te United states, or to such vocational
rehabilitation lund. Such contributions or gifts shall be allowable
as deductions only if verified under rules and regulations prescribed
by the Commissioner, with the approval of the Secretary.
(b) In the case of a nonresident alien individual, the deductions

allowed in subdivision (a), except those alloWed in paragraphs (5),
(6), and (10), shall be allowed only if and to the extent that they are
connected with income from sources within the United States; and
the proper apportionment and allocation of the deductions with
respect to sources of income within and without the United States
shall be determined as provided in section 217 under rules and regulations prescribed by the Commissioner with the approval of the

Nonresident
alens.

Verifiaton required.
Norsidt aliens.
coan
ns
6,dg(h
from
8
Anowd

A

Secretary. In the case of a citizen entitled to the benefits of see- msour In United
tion 262 the deductions shall be the same and shall be determined stat, posIOns.
in the same manner as in the case of a nonresident alien individual,.Po
ITEMS NOT DEDUCTIBLE.

SEO. 215. (a) In computing net income no deduction shall in any

21.

Items not deductible.
Objects specied.
Personal, etc.,

case be allowed in respect ofPersonaliving, or family expenses:
penses.
2 Anyamount paid out for new buildings or for permanent ' n ripo
improvements or betterments made to increase the value of any
property or estate;
neswring, etc.,
(3)Any amount expended in restoring property or in making ert
good the exhaustion thereof for which an allowance is or has been
nade; or
45822*---25t-20