**OFFICE OF**  THE AlTORNEY **GENERAL** OF TEXAS **AUSTIN**

gonorabloIi.Pat gdwlrda cirll Dlrtrlat Attornty lM1l.m county prma, Telm
Attention: Mr. Allen Idelton

**tax purpo808**  **of** in the procerr OS ions rllovanoe of Ion for federal ad by **taxpayer.** 1943, December 13, our opinion on l

reported AIIinventory t At $155,872.18. Thlr

Yith rrrpeat **to** thi8 8ituatlonyou h8re inquired rub8tAntiAllya8 **fO11OW8 :** 

(1) Uhothcr Zttma ot labor, overheadand generr1 admiairtratlvbrxpe~es 8ro to be laoluded a8 items of 888tt8 ia rrrlving At 

### the taxable **T81U8 Of**  the **per8OMl** property **Of** t **bU8ioe88** tllteI’@8b,vhertp&ablt **8.** P8t **&tdYICd8, plg8**  2

**8U8h** proparty L8 in t&o procs88 OS hb rlc rtlon lu3 vhrrr tht forego- itaM hare **born** l ~ad.d

**in** aoamotloo ulth 8UOh frbrloatlon. (2) Uhethor the **tarprpr** 8hOUldbo pormlttod to deduct the amount **Ov8d** for **red0wi** lnoome oad tx**tt88** JS'Ofit8 t&X88 **fiw** it8 **8OOOWt8** 8lAd bill8 rtorivaok.
HO 8~Oii10 pOV181OM in the 8trtUtt8Of thlr St8te drrlvlth the valuationof good8 in tht proar88 of irbrlo~tloa. IDytver,the gonorrl rtrtutorf porl8loM vlth **re8peot** to the &u8t:Oli**Of &bW8OlUl**  **pOmrtr** MO l**8 iO11OV8:** 

"Arti 7174

**. .**  **..Ptl. ‘** **8olul** ~OptrtJ **Of** l VOry **dt 88rljation**  &All be valued **at it8**  **true** aad full valua in aonty.
"Art101t7149....

The terr @true and full value', vherever **urtd rhtll**  ba hold **to U88n**  the fair market **V81U8,** la oMh, at th8 phOt vhtrt 

### th8 **pl'owrty to**  vhioh the tor8 18 applied 8bll be at the tirr OS @Ire88mettt,

being the prloe uhiah OOUldba obtelaed thertfol,

tt &dV8tt **8t10,** 8nd Wt 8t fOr8td OF 8Uot1oo 8alt.F
Yloreovtr

, “narlret

va1~8~ or *farir)

urket valuog hrr bea deftned a8 "tht amount of roat~ thAt t per8013 d88irbg to 8011,but lrat

bo\ab **to do**  **80, Could,**  vlthin l rra8oMbh tire, pooure foV 8uah prOprtJ **tl'O8l** l pr8W uho **dO8tit8** Bad **i8** able **to** buy, **but** l8 not bound to **gUl ’** **Oht8t** the prowrty. ft **18** the mount that eould~boobtalaod at priv&te 

### 8tlt Aad not 8 ioroed or auct$oa 8tiO.' 40 To%. J\P. 150.

Vhrrt trublr prOptHy **w88t88.~; X0**  Fklt V81U8, th8 **tU&8lJO88OF W8t**  **888088 8UOh**  **&WOmrtt 8t**  **it8 ma1**  **Or** ilitria8i.o

Artlole 7211. &Id, l8 18 **Uid ia**  40 **‘ IltX.**  **J(P. 149,**  "IO& FatrLarlO**V8lU0 18**  **aOt** mentlOMd **in** the **8tatUte (R.**  **S., ht.**  **7206) that**  **d~tfirre8 tht**  **(but** only in rith rtrgeot to **tht** l **88t88Or,** Iatrlnrlo worth; but 

### thl8 18 done on17 

### whenl d lf 

### it **rppe858 t&t**  the **property** la **qutrtioa brr**  **no wrkrt**  value."worrblt 8. ht Rdvrrdr, page 3

Tha qUO8tiUlI

of vhothor t&88 gOOd8 all be 881d to 

### urkot value fror vhleh thtlr true @ad full valw am 

# -?r 8088

l 4et0FmiIWd 18 l qU08tIOa Of ftOt upoa vhloh thl8 dopartmtnt u 

# got oompetont to pall. m80, .t al*, @ s. w. ut8t %X&8 &to1 co. v. citr **0r** El (26) 772 777 (OrrOPdi8mi88td). tit 01 oooy of bus O~IaIon No. 0-2kO l oolored hrrcovlth. COn88- **,~&tl~, V8**  

### OF. urublrto 8tatm uhethrr th8 groptrt7 Ia QUt8- **ason rhotid**  **bo** l

88088.d**at** It8 **nrktt** valw or at It8 

### real or ~trln810 Vallu. Eovev8r, you are r~rpotrull~ l dVI8@6that **if** th#QUalifItdOffiOkl8 dtt.rtiM **tht** thI8 WOgdrtr m88088d 8 **-tit** valw On J8IMr7 1, 8UOh PPOpWtr 8hOtidbe taxtd at **it8 sarkrt**  valw aooordlng to th8 **above** formuhe.



### Onthe other brad, ii it rhould be deolded th8t thlr popertf pot8t8804 no market- value on JUWPJ 1, the property &ould **be ~rrrred**  and taxed at it8 “rul or latrln8lovalue." **11 ua8t**  Tax48 **Rot01** CO. **1. City**  Of El P880, **8U** l, the El **PI80** Court Of Civil 4&W818 qqrored 8 Chtl'gt by t OVtr oourt to the r effectthat;

'thr Peal or lntrln8lovalue of **property** 18 rtprorentedbr that 8Um Of ronty vhloh 18 l fair 8qUiVl 

### ltnt of ruch property. Tht **proptr** determlnatlon of

of among the tlawntr th8t may **b8 trken**  into oonrlberrtion 18 the location, 008t alrd ohrrotor **0r** iXpOV8- uat8, 

### rent81 hirtory, **ir** any, locrtlona8 **to** Suture grovth of the Cltr, rale8 of 

### l djaorat **property,** If Any, the **U808** to vhloh tht it 18 iWa8OolblY 8U8009tibl mrtr **18 DUt**  **or of**  vhleh 0. (Eaplmsl8 added)
COr tart

pUFpo888, **thi8 18**  the Only judiliildef%nltlon of the **torn** 'ro81 or l.ntrln8lc value" vhloh vt htvo found in the. 8888 **hV** Of thi8 St8t,, **Uhilr** thlr deSl.nltloa **~88 rormulated**  vith rompret 

### to tht vrluatlcm oi real woptrty, ve think **that** vwh oi the **lragwge** of thr oourt, and pmtlO5rlJ th# portion above underlined,rr proper17 **br** wtd 88 8 guide by thr t8x 80- 1088OPand tht bOtrd Of 8qWlit@tiOfk in 88Mrt~illi&% the I'881 OC latrlnrlovrlw **0r** ptrrontlty.**MV8rd8,** 986t 

### 4

ynablt to 8af_

to vhrt rxtant,~irat all, ex-

- diture8 **for** labor, *to., will, la a prrtioular ca80, enter to a 6otar8laatloaeither Of **wrkrt** value 

### or of rob1 

### or la

### ralw. **It 18**  pO88ibl0 **VI** ftti, **t0 pO8it**  **8 8itWtiolr**  **u** vhloh 8uoh 

### l

**Xptaditurtr** rod4 **b8** hl&lr 8i@kifiO@Iit~ eontrar;- **vita, 000**  **OAI tt8ill**  **i.M~iM 8**  **8itWtiOn iB**  **vhioh** ruch **tXptnd;- ~~08**  

### wouldhave an l xtromoly nogli(llbla l **rre0t upon**  the valua- (100of tha truble px-operty, 

### pther with the extent to ~OOrt8btie8 8uOh 88 **tb80,** tovhlah the VblWtlOll

### of propertg 18 a 

### (U88tlOa0s snot, prertnt our giviaga 

### more detailed la8var to **P~r** rirrt **iaquirr.**



### With **rtrpeot** to your reoond quartion, Article 

### 7147 definer 'per8onal**ptiopert~ ”**  **for** purporrr **0s** taxatioa a8 lnoladlng, 

### inter 8118:

II

.. all rontyr At lntrrrrt,

### l lthtr vlthln or vlthou; the **St&t@.** du8 the Mr8on. to **ba** tued 

### over **8nd** &bow **What** 

### he-pay8 lnt&8t 6r, ~bndall other debt8 **due** 8uOh 9er8On **OVtC 8Bd**  abott hi8 Illdbebt8dM88." 4

lit underrtaadfrom your ltttrrr that the **trxpryer** in quertlonolalu that it 18 entitled to dtduot the amount Of it8 fedtrallnoo8e and *xc088 profit8 trxer for tho prectdlrrg **par** f'ro~ it8 looount8 8Pd bill8 racelvablela datarmlnlng the usount of it8 t8xablr~r8onal property. If the taxpayer **18** tatltltd to thfr deduotlon, it 18 only brcrrwt ruoh tax88 can bo oonslderod 80 "iad.btOdne88' within the **MO8lliw Of**  

### the &bow quota6 8t8t

### 8t(r. Although oa Jaawrf 1 the fedora1tura for the prtctdlag 

### vu are 

### a llabIllt~ l gaIn8t the **taxpayer,** and although 

### the aorm811~art a praftrred lI~blllt~,8UCh tu88 **are not**  the Elad Of llablllt~vhloh our OOlU't8 bad there ia othtr juri8dlOtlOn8 htr aonrldertda8 an lndebtednerr. In Aopubllo **In8. Go.**  **v.** 

### E$hland Park 148 ndont Sohool Dl8trlOt of Dallar County, et '# 102 9. W. (2d7el&, the Supreu Court rtatrdr ,' 

### 'Wodo 

### not think taxer 

### are 'deduotlbla a8 a **debt uhder**  

### Art1010 7147, R. 8. 1925. Se* 

### l uthorltio8, AbOW Olttd, AId th0 Oalt Of **TU** Corrri88iOn V. Hat- ~lonal J4elleablt

Carting Cospaa 

### 144 N. B. 604, 55 A. 

### L R. 1448; :ki :%::io:!”
IQ a 8Ub8eqUelkt **8Uit** bttveen thr **8OY ptrtit8,**  **rt** l’tod 18 162 3. Y. **(24)** (r8Ter8edon other groundr, 1‘71 3, W. r24)

### 5%

01~11 **Appt818** rtiboratedupon ihlr

Vt aoaoludr that taxer do not oorutltut880 ‘lrrd.bt.dat88’

within tht **9UrVl.V** Of hPtlOh 7147 R. 8. **‘ A8**  the obllgatlon t0 **98J tUt8**  **do88 not**  Port 

### uponany ooatraot rxprarr or Impllrd,or upoa the OOa8Wt 

### 0s tht **taxpapr,** a 

### tu **18** 

### not **a** 

### debt **In** 

### thr ordlnar~ **8t118t 0s**  

### the VOrdJ althoryh it **18** 

### a llabllIt~ or obligation,**a.( 61 C. **J.** Taxation,9. 70 1 4. A998llao~8tu ro88rvta are therrforel88888able until **exempted b**  l

**x9rt88 rrfrroaoo**  **I.8 a**  **debt** rtatuta 8uoh **a8 Art.**  71 7.’

1 Conrrqu8atlf,in ln8verto vour rroond quertlon, JOU 6p8 **r88p@OtfUll~** ,bdVl884 that the t8xppr 8hould not **bo** 

### per- &ted 

### to drduot tht amount owed for foderrl

### lnoome and l **xct88** pafit taxer from **it8** boOOUnt8 **bti bill8**  rroolvablo in dtterdairy the **mount** 0s it8 taxable ptrronal 

### proprrty.

Trurtlag that the foregoing 8atl8r8otorlly8OIV0l’l lour lnqulrla8,v8 are
**Ver7** truly **70~8**
**e:& T?FG** 

**c.1. .:-** **‘ ::li**  **cl.:: ’**  **,.. ,.I.** 

**.** R. %an Woorhead **A88irtUkt** 

### 2DNrdb
Bnolorurr