NEGROES MAKE UP COMPLETE COMPLEMENT OF NURSES AT SAN LUIS OBISPO Negro nurses now make up the complete complement of nurses on the Staff of the Station Hospital, Camp San Luis Obispo, California. First Lieutenant Daisy R. Evans. Wilmington. Delaware, heads the contingent •>f 19 Negro officers of the Army Nurse Corps. Unusual promptness with which the new officers have fitted themselves into their varied assign merits Is emphasized by Colonel Frank W. Pinger, Post Surgeon: ‘‘Readi 7. is on the part of our recently assigned Negro nursing staff in taking j its immensely important place within our organization is a source ofj gratification to me personally, and I believe I can speak for all person.' nel who serve, or are served by, hte hospital.” Left photo shows Chief. ™™™■■■■■■■■™^™■■■■■™^■■■■"^ .Nrse Evans (seated) checking duty assignments with Lieutenant Bar bara McDonald, Detroit, Michigan. In center photo, Lieutenant Gwyneth Blessit. Mt. Vernon New York takes the temperature pulse and respir ation of an orthopedic patient. At right Lieutenant Elgecia Ball (right Birmingham, Alabama, is shown checking diets with a civilian hospital i mess attendant. (U.S. Signal Corps photos from BPR) PUBLIC WANTS MORE AND MORE HEALTH PROTECTION 17,000,000 Blue Cross Plan Members Want To Help You Get This Security... Will You Let Them? -— ! Program is “A Vital and Democratic Link in Social Security emphasizing public service, But Utilizing Private Initiative.” “The federal government might make grants-in aid to the states for the encouragement and assist ance of voluntary insurance efforts, such as the Blue Cross Plans,” Louis H. Pink, President of the Associated Hospital Service of New York, suggests in The Story of Blue Cross on the Road to Better Health facilities are least satisfactory. Federal assistance should be used to enrich hospital and medical care in every respect, both in the provision of facilities and encouragement of methods for fin ancing the care.” The public wants more and more health protec tion, the pamphlet finds; it wants its doctor bills prepaid as well as its hospital bills; it wants pre ventive as well as curative service; and it favors the gradual and sould extension of social security. These demands call for a broad national health program, Mr. Pink points out—one that “implies a working partnership between federal, state and lo ~cal government and all efficient and well-directed voluntary efforts, such as medical schools, dental J clinics, research institutions, medical societies, Blue Cross Plans, voluntary hospitals, visiting nurse as sociations, and fraternal, social, and educational bodies.” In a nation-wide health program, the Blue Cross Plan and other voluntary insurance plans for hos pital and health care will undoubtedly continue to play a large part, the author feels, for they are “a vital and democratic link in social security, .emphas izing publii servant, but utilizing private initiative.’ According to Mr. Pink, Blue Cross Plans through out the nation are working for adoption of a nation al contract so that the heads of national business __L3 DARK SKIN . . . BLACKHEADS . . . PIMPLES (Externally Caused) THEN READ EVERY WORD ABOUT THIS AMAZINC *»7IWSSS! 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Each 25c at druggists. >-— organizations can offer uniform Blue Cross cover age which will protect their employees in plants ' scattered throughout the country. Mr. Pink also suggests that “the larger Blue Cross Plans might well join with hospitals, the med ical profession, foundations, and other welfare a | gencies in the financial support of diagnostic cent ers. If 1 percent of their income were devoted to preventive medicine, the expenditure would be jus tified as a practical deterrent to illness and hospit alization.” The Blue Cross Plans have grown phenomenally. In the last eight years, the membership has increas ed from half a million to 17,000,000 subscribers; and the number of Blue Cross Plans throughout the country is now seventy-five. At its present rate of expansion, Blue Cross expects to double its mem bership and thus protect more than 35,000,000 sub scribers within the next six years. The growth in membership has been accompan ied by increased payments to hospitals, expanded benefits, and better service, including X-ray, labor atory, and other special services. And in addition to the plans for hospital care, there are now nine teen plans for prepaid medical care affiliated with Blue Cross organizations. The Story of Blue Cross on the Road to Better Health, by Louis II. Pink, is pamphlet No. 101 in the series of popular, factual, ten cent pamphlets pub lished by the Public Affairs Committee, Inc., a non profit, educational organization at 30 Rockefeller Plaza, New York 20, N. Y. i— ■ t'- — 1 — »■— -1' »■ —1» .. . i I'- . 1 " =r Accountant*s P-H WEEKLY Newsletter ★—if—A • Facts and Figures You Should Know About. PAYMENTS TO EMPLOYEES IN ARMED SERVICES! Salary Stabil ization Unit has ruled on the ques tion of compensating former em ployees now serving in the armed forces (SSU 83, 3-5-45, P-H Labor, Paragraph 77X9). Employer may pay, without approval, up to the higher of: (a) the amount paid under em ployer’s practice in effect prior to Oct. 3, 1942 (salaries over $5,000) or Oct. 27, 1942 (salaries $5,000 or less) or (b) employee’s annual salary im mediately prior to induction. • Subject to the above limita tions, employer may increase the a mount already being paid to such employees. Presumably, payment may be decreased or discontinued entirely. Bonuses: SSU also rules that a bonus may be paid without approv al if it does not exceed the bonus to which the serviceman would have been entitled (under SSU reg ulations) had he remained in his job. Do you suffer from MONTHLY NERVOUS TENSION with its weak, tired feelings? If functional periodic disturbances make you feel nervous, tired, restless— | at such times—try this great medicine ' —Lydia E. Plnkham's Vegetable Com pound to relieve such symptoms. Taken regularly—It helps build up resistance against such distress. Also a grand stomachic tonic. Follow label directions. £.0*vnJdumC& compound WLB rules: Employer may con tinue without approval all or part of wages of former employee now in military service (Interp. Bill. No. 4). With respect to bonus pay ments to such employees, no limit ation is placed upon the amount, (GO 10. A). ...INCOME TAX: Bureau of Inter nal Revenue will allow, as an in come tax deduction., payments to employees in the armed forces if such payments are reasonable, ac cording to its most recent ruling (Letter, 3-14-45; see also IT 3417). It is immaterial that employer had no prior plan of making such pay ments. This modifies a prior rul ing that no deduction was allowable unless payments were made under plan which did not discriminate in favor of particular employee. PAYROLL TAXES: Such salary payments are not subject to Feder al social security taxes. Income tax, however, must be withheld by the former employer. (Letter, 7-20 -44). In this connection, note that the old Form W-4 withholding re ceipt is not effective in 1945. Thus if former employee has not filed a Form W-4 (Rev.) for 1945, employ er must withhold as if no exemp tions iwere claimed. Presumably, if a W-4 (Rev.) was filed, it must be given effect even though the serviceman is no longer employed. SALE OF CORPORATE ASSETS— DOUBLE TAXATION: Where a cor porator! sells its assets at a profit and then liquidates, there is a ! double tax: A. The corporation is taxed on its gain: B. The stockholders have a tax able gain, if the amount received ex ceeds the bases of their shares. A favorite device employed to eliminate the corporate tax is to transfer the assets to the stock holders in kind and have them as individuals make the ale. It v.es thereby thought that the corporate tax v'ould be eliminated. In teh first case on this quest'd to reach the Supreme Court, cor poration had orally agreed to sell but broke off negotiations and tran sferred its assets to its stockhold ers. They shortly sold to the pros pective purchasers nominee upon terms substantially the same as the oral agreement. The Court holds j that the form of the sale will be I disregarded and the corporation tax ed where the facts show that in substance the corporation is the sel ler (Comm. v. Court Holding Co., 3-21-45, P-H Fed. Tax, Paragraph 72,020). The Court had before it only the question of the corporation’s tax. It viewed the transaction as a plan to avoid that tax. The fact that the transaction “viewed as a whole’ from the standpoint of both corpor ation and shareholders merely had for its purpose avoidance of one of two taxes was not considered. • The best method of preventing double taxation of the gain is for the shareholders to sell their stock to the prospective purchasers if this is practicable. This method results in taxable gains only to the shareholders. In any case in which the plan is to sell assets there is a possibility that the cor poration will be taxed, as well as the shareholders, regardless of how the plan is carried out. TIME FOR DEDUCTING RETRO ACTIVE WAGE INCREASES! Bur eau of Internal Revenue officially rules (IT 3716. P-H Fed. Tax. Para graph 76,140): 1. Where an employer is willing and able to pay retroactive wage increases requiring the approval of the War Labor Board, such wage! are accruable and deductiable in the year the application for approv al is filed to the extent that they relate to services renderd in that yar and prior years. 2. Where the employer contests the proposed increases they are ac cruable and deductible in the year in which the controversy is settled. 3. The foregoing principles are equally applicable to wage or sal ary increases requiring the approv al of the Salary Stabilization Unit or the War Foods Administrator. • Early in 1944, the Bureau is sued several letter rulings to the ef feet that in voluntary cases the in crease should be deducted in the year in which the services were rendered. Taxpayers who filed re. turns on such basis should file a mended returns; also claims for re fund for any of the years in which the deduction is increased under the principle of the new ruling. • Of course, a cash basis taxpay er can deduct such items only in the year the retroactive wyages are paid. FEDERAL TAXATION Property Dividend—Effect on Earnings and Profits: Where ac cumulated earnings exceed the am ount of a dividend distribution, the dividends are fully taxable to stockholders because it is assumed the dviidends are paid from earn ings (as distinguished from divid ends paid from capital which are nontaxable) (IRC. j 115 (a). A recent Tax Court decision sug gests a method of materially reduc. ing stockholder’s taxes, provided the corporation has property which has creased in value Merrill Co. 4 TC No. 115, P-H Fed. Tax, q 74,304 Facts: Earning and profits were $138,500. Corporation distributed to stockholders property which cost it $1 14,000. but which was worth only $500. Later corporation dis tributed $00,000 in cash Held: (1) $00.000 u 1st r bufion , it dividend only to "he ext -it of $23, 000. (!) Stockholders •■! •• r - • \ ed dividend incoi”“ < f ■' f,0 tie : 1 ue of the property rece■ vt 1. Reasoning: While the $500 prop erty dividend is taxable to the stock holders only to the extent i f the value of the property at the time of receipt, earnings and profits un reduced bv the cost (adjusted necessary) of the property distrib uted. Hence at the time the cash was distributed, the earnings ava.. able for dividends were only $21. 000 ($138,500—$114,000_|_ $500). • That part of the cash not tax able as a dividend, i. e., $36,000, is a recovery of capital, applied to re. duce the bases of the stockholders’ shares and nontaxable until It ex ceeds the basis. Any excess is tax able as a capital gain (IRC, (115 (d BASIS—EFFECT OF COURT DE CISION: Not infrequently, a third party (for instance, a customer or supplier) makes a contribution to ward the cost of taxpayer’s plant or other facilities. Such contribu tion is not includible in the cost basis upon which to compute de preciation (Detroit-Edison, 319 US 98). Prior to the Detroit-Edison dec ision, in the case of another taxpay. er, the Fourt Circuit held (129 F. (2d) 762) that the basis for deprec iation did include such a contribu tion. The decision became final. Even though such decision is ob viously erroneous, it is binding on the Commissoner, the Tax Court holds. Hence, such taxpayer may contnue to compute its depreciation deduction by including the contri bution as part of its cost (Arundel Brooks, 4 TC No. 113, P-H Fed. Tax (jj 74,302). Presumably, the basis to compute gain or loss on sale would also include the contri bution. • If the unadjusted basis has been established by a final court decision, it continues to be the un adjusted absis in the absence of new legislation or facts affecting the situation. DEATH OF SERVICEMAN—TAX REI.IEF: Where a serviceman or woman dies while in active service: 1. His or her Federal income tax for the year in which death oc curs is cancelled, and 2. Any unpaid Federal income taxes for prior years, whether on military or civilian income, are for given (IRC, J 421, P-H Fed. Tax,