2024 Business and Accountancy Catalog

J. Charitable and Other Contributions

1. Kinds of charitable contributions ........................................ 206 2. Requisites for deductibility .................................................. 206 3. Deductible contributions ..................................................... 206 4. Valuation of donations.......................................................... 208 5. Contributions deductible in full ........................................... 210 6. Deductibility of donations ................................................... 213 7. Manner of calculation .......................................................... 215 8. Accreditation ....................................................................... 216 9. Formalities required ............................................................. 217 10. Proof of deductions................................................................ 218 11. Right of taxpayer to prove contribution without receipt ............................................................ 219

G. Bad Debts

1. Definition of bad debts .......................................................... 166 2. Requisites for deductibility of bad debts ............................. 166 3. Existence of valid and subsisting debt ................................ 167 4. Ascertainment of worthlessness .......................................... 167 5. Circumstances affecting worthlessness............................... 169 6. Year in which charge off must be made .............................. 170 7. Amount of debt deductible ................................................... 170 8. Deduction by foreign corporations ....................................... 173 9. Securities becoming worthless ............................................. 173 10. Losses from theft or embezzlement ..................................... 174 11. Recovery of bad debt previously written-off ........................ 174 12. Tax-benefit rule ..................................................................... 175 13. Condonation of indebtedness .............................................. 176

K. Research and Development

THE LAW ON INCOME TAXATION

1. In general .............................................................................. 219 2. Amortization of certain research and development expenditures .......................................... 219 3. Limitations on deduction...................................................... 221

L. Pension Trusts

H. Depreciation

1. General rule .......................................................................... 221 2. Requisites for deductibility of payments to pension trusts.......................................................... 222 3. Payments deductible............................................................. 222 4. Private retirement benefit plan ........................................... 224 5. Requisites of a reasonable retirement benefit plan ............ 224

1. Definition of depreciation ..................................................... 177 2. Necessity and theory of depreciation allowance ................. 177 3. Persons entitled to claim depreciation allowance ............... 177 4. Requisites for deductibility .................................................. 179 5. Reasonableness of allowance................................................ 179 6. Depreciable property ............................................................ 180 7. Assets not subject to depreciation........................................ 180 8. Charging off depreciation ..................................................... 181 9. Statement to be attached to return ..................................... 182 10. Commencement of depreciation ........................................... 182 11. Proper allowance for depreciation ....................................... 182 12. Basis of depreciation............................................................. 183 13. Deductions limited to capital invested ................................ 183 14. Depreciation of intangible property..................................... 184 15. Depreciation of patent or copyright ..................................... 184 16. Depreciation of drawings and models.................................. 186 17. Depreciation of vehicles........................................................ 186 18. Methods of computing depreciation allowance ................... 188 19. Adjustments for depreciation ............................................... 191 20. Agreement as to useful life on which depreciation rate is based................................................................. 191 21. Deduction for obsolescence ................................................... 192

M. Optional Standard Deduction

1. Option available to taxpayers .............................................. 226 2. Other implications of the optional standard deduction...... 227 3. Determination of OSD for general professional partnership and partners .......................................... 230

N. Special Deductions

1. Special rules for deductions ................................................. 233 2. Insurance companies ............................................................ 233 3. Mutual insurance companies ............................................... 235 4. Mutual marine insurance companies .................................. 235 5. Assessment insurance companies........................................ 236 6. Estates and trusts................................................................. 236 7. Private educational institutions .......................................... 236

I. Depletion

Chapter VI. — Items Not Deductible

x 1. Definition of depletion .......................................................... 192 2. Theory and purpose of depletion allowance ........................ 192 3. Persons entitled to claim depletion allowance .................... 193 4. Methods of depletion ............................................................ 193 5. Allowable cost depletion allowance...................................... 194 6. Limitations of allowable cost depletion .............................. 195 7. Manner of computation of cost depletion ............................ 196 8. Determination of mineral content of deposits remaining as of the taxable year................................ 197 9. Accelerated deduction of exploration and development expenditures .......................................... 199

1. General rule .......................................................................... 237 2. Capital expenditures ............................................................ 237 3. Premiums on life insurance of employees or officers .......... 239 4. Losses from sales or exchanges of property ........................ 239

Chapter VII. — Gains and Losses From Disposition of Property

A. Tax Basis of Property Sold or Exchanged

1. Measure of gain or loss in general ....................................... 241 2. Factors in determining gain or loss ..................................... 241 3. Computation of gain or loss.................................................. 242 4. Basis of property sold or disposed of.................................... 242 5. Measure of gain or loss from sale or in exchange of property ................................................................... 243 6. Gain or loss involving exchange of property ....................... 244 7. Acquisition before to March 1, 1913 .................................... 244 8. Acquisition on or after March 1, 1913 ................................. 246 9. Readjustment of interest in a general professional partnership .................................................................. 246 10. Exceptions to the general rule ............................................. 247

J. Charitable and Other Contributions

B. Exchanges of Properties in Corporate Readjustments

K. Research and Development

1. Definition of terms ................................................................ 248 2. Non-recognition merely deferred ........................................ 249 3. Recognition of gain but not of loss ....................................... 250 4. Basis of stock or securities ................................................... 253

L. Pension Trusts

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