Purchase of this book includes free trial access to www.million-books.com where you can read more than a million books for free. This is an OCR edition with typos. Excerpt from book: CHAPTER m INCOME TAX AS APPLIED TO PARTNERSHIPS IX. General Partnerships Persons conducting business in partnership are liable for Partners income taxes and war income taxes only in their hfdividu- individual capacity. Under the Excess Profits ally Only. Tax Law, however, partnerships are liable as separate entities the same as are corporations. (See page 120.) Partnerships are not required to make returns of net income unless especially ordered to do so by the Commissioner of In- R ternal Revenue or any district collector. Where required, the returns shall be prepared on Form 1065, calling for the gross income, deductions and credits, and the names and addresses of the individuals who would be entitled to the net income, if distributed. The individual members of the partnership are required to include in their returns their prorata share of the earnings of partnerships as shown by the books of account, whether such earnings were distributed or not. A partnership, when required to make a return, has the Fiscal privilege of making the same for its own fiscal year Year. the same as a corporation. In case the fiscal year ends during a calendar year for which there is a rate of tax different from the rate for the preceding calendar year (for example, 1917 and 1916) the rate for the preceding calendar year will apply to an amount of each partner's share of such partnership profits equal to the proportion which the part of such fiscal year falling within such calendar year bears to the full fiscal year; the rate for the calendar year during which such fiscal year ends will apply to the remainder. For example: If the fiscal year of a partnership ends on June 30, 1917, that proportion thereof (%) which falls within the year 1916 should be included as income of the ...