Harrisburg telegraph. [volume] (Harrisburg, Pa.) 1879-1948, 1918-01-05

(ContinuedD
The internal revenue bureau has
issued some very plain regulations
that set forth many conditions COW
cred by much technique in the two
revenue acts, under which the in
come tax Is imposed. Pensions and
the pay of retired Army and Navy
| officers are liable to income tax, If
exceeding the exemptions allowed.
Farm produce is not treated as in
come until sold. A farmer is free
from very many things in the taxa
tioh scheme. He may make deduc-
tons for labor, cost of seed, fertili-
zer, pay of labor for the care of live
stock purchased for resale, but must
report the entire proceeds of sale
as income.
A farmer does not report products
of the farm as income until sold. Pro-
ducts of the farm produced in 1916
and sold in 1917 become part of the
income of 1917; no report is made
OF product of the farm for 1917, un-
less sold in 1917. The farmer may
! make no deduction for the labor
useo in producing garden truck for
MS own table and does not need to
| include it as income.
Must Allow Fair Rental
In paying an employe room and
| beard plus q salary, a fair rental
must be allowed, also a fair value on
| the meals furnished must be re-
ported by the employe as income,
but If services are used in the en-
ployes' business the latter may claim
ABDUCTION for the rent of the room,
IL any, and a fair valuation for the
meals furnished, under the head CT
business deductions.
| Overdue salary must be returned
for the year in which it was finally
n!ade good.
Payments on account of contract
for work to be performed entered
into do not figure in income account
until contract is completed, as the
extent of the profit cannot be esti-
mated until finished. This is espe-
cislly intended for contractors.
Contributions and gifts to individ-
uals do not constitute allowable de-
ductions.
Contributions to organizations for
religious, charitable, scientific or ed
ucational purposes; for the Society
for the Prevention of Cruelty to Ami
mails, or the Society for the Preven-
! ton of Cruelty to Children, are de-
| ductable IL not more than Is per
cent of the income of the giver.
A renter of farm reports as in
come his share of the produce for
the year in which it is sold. -
An exchange of farm produce for
merchandise, groceries, etc, requires
the inclusion of fair price for the
groceries, etc, in the farmers in
! come. .s --s
Report Cost of Repairs
A tenant, under the terms of a
lease, is expected to pay cash rental
and make certain repairs. The cost
of the improvements plus the cash
rental must be made part of the
landlords schedule.
| Recipients of bonus, intended to
| stimulate zeal and enthusiasm or a
reward for past services must in
| clude bonuses in income. Christmas
| gifts, anniversary remem brances,
ETC., do not constitute bonuses.
Merchants to ascertain amount of
gain and profit should take an inven-
tory at the close of each calendar
year of the goods on hand, at the
cost price, add to the total cost price
| OF all goods on hand at the opening
of the year, the cost of all goods pur-
chased during the year, and the diff
ference between the amount thus OBJ
tanned and the inventory taken al
the close of the year, plus his total
gross receipts, is to be reported as
| his gross income.
Wage of Minor Child
Gross receipts should not be given
under gross income and the cost OF
the goods purchased, claimed as a
deduction.
The wage of a minor child is to be
reported in the parents income.