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About Herald and news. (Klamath Falls, Or.) 1942-current | View Entire Issue (Feb. 6, 1959)
FRIDAY, FEBRUARY . 1959 HERALD AN'P NEWS. KLAMATH FALLS. OREGON Your Annual Income Tax Primer By RICHARD A. MULLENS Written (or NEA Service A somewhat complicated but very useful provision in the tax law permits a taxpayer, under certain conditions, to postpone pay ing tax on the gain from the sale of his residence. In this day and age of rising prices, it is not unusual for a man who bought a home for $7,500 in 1940 to find that it is worth $15,000 120.000 today. That sounds sood fof the home owner, but under the old law it could result in a real hardship. Suppose such person were sud denly transferred to a job in an other city. I'nder the old law, if he sold his home for say $17,500, he would be taxed on the cain. The capital gains tax on a profit ot sio.ooo could run as high as $2,500. This would mean that without putting up additional cash or bor- rsr JAit anJ Jane ft'iojsfqSfjC.Ueiiiit t we. Ch- K M ntou m Mi f U M tTrnm Jit. R taHtw tJ 7, 500 CO . f75.ea ,J(,51S.oa ,'JCt5ZSoo. J66.66 ?.Q QCQ.CO M. 0taW ( H uW Urn Ik. imUm II. a M t-wkU riM. it L.. m. itf lmm , ,, ). t... i.j f: ii o y7.oq CflhllNT D NuiliHt 1KD !'( TO iLT UflPlIt CUN ' y I r I I - Ti. . Of UU Of OLD t HOt Bd TO HH1 Of fit ILIIDENCI l-tJ ..I. ..--- li W l.. , I M & l rA iTt Im. mj. , . I . U ''"'"'"'v""1 l).c HU la )n .xniucl'i. iu nil i.'ftl !--- ja. .uuftW.3 -r 7-5 rsmi u $r6Q.PM2 ,,,-57 New Capital Deficit Seen At SI Billion By Expert By ELMER C. WALZER UPI Financial Editor NEW YORK (UPI) Estimates on 1959 financing show there will be a deficit of $1 billion in new capital, according to Girard L. Spencer of the stock exchange firm ot Salomon Bros & Hutzler. As a result of this excess of demand for long-term capital and continuing restrictive monetary policy, pressure is expected to continue in the money market. InteresJ rates are likely to con tinue to rise, says Spencer, at least during the first half of the year. But the rise is expected to -,. be less rapid than in the second J rtull 0frl95B. --JT - 7 . Spencer anticipates a supply of $23.7 Million in long-term tunas . seeking investment. He places demand for these funds at $24.7 billion. Here are the sources of supply Life insurance companies $4.7 billion, mutual savings banks $2.2 billion, savings and loan associa tions $5.5 billion, corporate pen. sion funds (not funded with insur ance companies) $3.3 billion, state and municipal retirement and pension funds $1.6 billion. fire and casualty insurance com- I pames $1.3 billion, and other long ; term funds $5.1 billion. Demand for long-term funds is expected to come from mortgage financing $13.3 billion; slate, municipal and public revenue au- thority financing $3.5 billion, and i corporate financing $7.9 Diuion. Spencer arrives at his mortgage financing estimate on the basis ' of 1.150.000 private housing starts. Corporate financing consists of $8.6 billion bonds and notes. $10.5 billion preferred stocks, and $1.6 billion common stocks, less $2.8 billion maturities and sinking fund retirements. It is interesting to note that this calculation includes more than $2 billion in stocks, including pre ferreds. Wall Street has been looking for rise in stock offerings for in dustry financing in 1959. In the first place, the stock market is strong for making a climate to absorb new oiferings, and the bond market unpopular as well as cluttered with municipal flota tions. . The Journal of Commerce notes that public utility companies are the first important group to take advantage of the rise in the stock market to step up equity financ ing. Some pickup is noted in equity financing by industrial compan ies but thus far this has been PAGE' NINE relatively small, it is noted. The stock exchange firm of Shearson, Mill & Co. notes that several companies have' called their convertible issues, including Continental Can, National Cash Register, and American Machine & Foundry, thus providing more stocK lor tne market. Barron's recently noted another means of increasing the supply ot stock tor the market. This is through secondary offerings of stocK. Also, Barron notes, a growinc number of companies, mindful of tne tinancing opportunities of lered by the current market, have decided to raise money by float ing convertible debentures. "While perhaps not technically equity financing. such flotations, in fact, inevitably mean a greater availability of common stock," says the publication. In the first half of 1958. the total of corporate securities of fered for sale, totaled $6,222,000. 000 and of this only $816,000,000 was in equities. For the full year of 1957, financ ing totaled $12,884,000,000 with common stocks making up $2,927,000,000 of the total. The lure . of floating common stocks is the - big demand for them. Corporations have had a tendency to resort to bonds in their financing. These have an advantage in that the corporation does not have to pay income taxes on the interest it pays on its bonds. It does have to pay taxes on the dividends it pays to stockholders. The disadvantage in bonds is that in case of a bad year, a company may be thrown into bankruptcy if it cannot meet Bond interest. rowing money, he could not buy as nice a new home as was his old one. The law was changed in 1954 Now. even though yon sell your principal residence at a gain, the gain is not taxed if you buy a new residence within a period begin ning one year before the date of sale and ending one year there- alter and if the adjusted sales price" of the old residence is less than the cost of the new one. As usual, this general rule needs some explanation. For example, adjusted sales price' ot the old residence means the selling price less expenses of sale and also less any "fixing-up expenses." The lat ter means expenses for work per formed wilhin 90 days before the contract of sale on the old resi dence in order to assist in its sale. Such expenses must be paid within 30 days after the date of the contract of sale in order to qualify as "fixing-up expenses." The rule also applies if the cost of constructing a principal resi dence is as much or more than the adjusted sales price of the old residence. In this case, if you begin con struction of the new residence yourself (that is, you do not take over a construction . contract be gun by another person before the expiration of one year after the sale of the old residence, you may have an additional six months in which to complete the new house and move in. The one-year or 18-monlh pe riod referred to above is suspend ed while taxpayer serves on ex tended active duly with the Armed Forces of the U.S., but not for more than four years after the date of sale of the old residence. The term "residence" includes a house, houseboat, or house trail er. It you. live in more than one place, it must be your principal residence. When part of the property is used as your principal residence, and part is used for business pur poses or rented out, only the allo cated gain on that part of the prop erty used as the principal rest dence is not taxed. The gain on the business or rented part of the properly must be reported. For example, if a taxpayer rent ing one-third of his residence sells it for $6,000 profit, he must re port one-third of the gain, or $2,000 but need not report $4,000 of the profit if he otherwise complies with the special rules on sale of a residence. Even though you did not pur chase a new home by Dec. 31, 1958, if you think you may either buy or build within the required pe nod, you need not report a tax on the profit from the sale of your old residence on your 1958 return You must, however, show the sale of the old residence on Schedule! D, Form ' 1040, but should enter "none" in column (h), headed "gain or loss." If it develops that you don't buy or build and occupy a new resi dence within the specified time. then you must file an amended 1958 tax return and pay a tax on the profit. The Revenue Service has avail able Form 2119 which can be used to determine the tax consequences of a sale of your personal resi dence. It is not necessary to use or file this form,, but it will be helpful to use it. One of these forms, properly filled out, is print ed with this article. &jf i It f M fJfT TRADING POST ? I irs i .CENTENNIAL THEME is exemplified at Rickys Town and Country through centennial dinnerware and a trading post for buy, sell and swap items. Bob Scholl, manager, with a centennial beard, stands beside the china display. Bavarian luncheon or salad plates, cups and saucers and ash trays are imported through Tirschenreuter and im printed in this country with a center picture on the coupe shaped plates. The picture has four scenes Mount Hood, Oregon Coast, covered wagons on the Oregon Trail and a picture of Crater Lake. Ranger Given New Position Promotion and transfer of Rex ford A. Resler. district ranger. I'nion Creek District, to the su pervisor's office ot the Willamette National Forest, Eugene, has just been announced by Forest Super visor C. E. Brown. Resler will handle tne timber management activities on the Willamette For est. Resler served four and one half years with the Air Force as in structor in radio communication and repair. He was graduated from Oregon Stale College in r.).')3 with a de gree in forestry and received a master's degree in 1954. while on part time work with the Forest Service. He received his appointment in 1953 as a junior forester on the Siuslaw National Forest where he served as timber sale officer on the Waldport District until July! 1955, when he was made district ranger of the newly formed Mary's Peak Ranger District. In May of 1957 he was moved to the Union Creek District. Home Extension MIDLAND The Midland Home Extension Unit met at the county fairgrounds, at which time new officers were named. Fanny Horsley was named chair man succeeding Edythc Casehier. resigned: Helen Warren was elect ed vice chairman succeeding Pau line Risley, resigned; and fhclina Houck was named food chairman, succeeding Sue Combes, resigned. After a noon sack lunch, mem bers enjoyed an open meeting of visiting, knitting and discussing a low calorie menu which will be demonstrated at the next meet ing. 1 MECHANIZE' FARM METHODS TAIPEI. Formosa (UPIi-Agri- culture officials have launched a long-range program to mechanize 000-year-old farming methods on this island stronghold of the Chi nese Nationalists. FT r show me lins bifocals ft . ; a Examine me for Noles BleVec lenses! Now you can have the appearance of youth and free dom from bifocal discomforts through this sensational new lens which eliminates the objectionable tattle tale age line and unpleasant eye-jump caused by old-fashioned bifocal lenses. Blendvues are the perfect lenses for our high-style imported PER SONALITY GLASSES frames. Open All Day Saturday X?K Green Stamps Courteous Credit Always out S4& HMX COLUMBIAN OPTICAL CO. 730 Main St. TU 4-7121 Dn. Omar J. Nolo and Don R. Haylor Sr. SPEEDUP SOUGHT OAKLAND, Calif. (UPD George Matthews, 94, has asked the court to speed up hisrequest for a divorce that would 'end his marriage of '5 years. Matthews told Judge Chris B. Fox, "I want to live my last few years on earth in peace." Gilchrist High News By RUTH' FORSTER The Gilchrist High School win ner of the Betty Crocker Home maker of Tomorrow contest is Sue Roland of Gilchrist. On a 50 minute examination on homemak ing knowledge given to all grad uating senior girls. Sue received the highest score. Her paper has been entered in competition with those of other Oregon school win ners for the state title Betty Crock er Homemaker of Tomorrow.. Each state wmner will receive a 11,500 scholarship from General Mills, an educational trip April 4-10 with her school adviser to Washington, D.C., colonial Wil liamsburg, New York City and Minneapolis. She will be a candi date for the All-American Home maker of Tomorrow. To the runner-up in the state will be given $500 scholarship. Sue was presented with a pin representing the slogan, "Home Is Where The Heart Is." by Dorothy Houston, homomaking instructor, at a student body meeting last eek. mm ROCK N ROLL featuring Capitol Recording Star GENE BE-BOP-A-LULA VINCENT ma PLUS CLAYTON VATSON and the SILHOUETTES THIS IS A REAL ROCKIN' BAND AND HAS BEEN TOUR ING WITH JIMMY RODGERS AND JERRY LEE LEWIS AND WILL BACK GENE ON HIS RECORDS FROM NOW ON. AUDITORIUM SAT. NIGHT DANCING 9-1 $2.00 PER PERSON i'" ""'-1'- '' -,- !- -- - f ; - - ,....., MM BEEF STE MALLEY'S BEEF "STEW For reel horn style beef ttew In Min utes serve Nolley's. Nal ley's exclusive pre-broising proceM teak in tM ot the delicious meat uicet 1 . . give Nalley'e beef itew a flavor ell Its ewn. ! . f.
