The Dillon herald. [volume] (Dillon, S.C.) 1894-????, 1919-01-23

"A professional man arrives at his
professional income by ascertaining
the total of fees for service and de-
ducting therefrom all expenses con-
nected directly and solely with his
practice.
"a farmer must figure up all in
come derived from the sale or eX-
change of products during the year,
whether such produce was raised on
the farm or purchased and resold.
He is allowed to deduct from this
total his expenses of the year connect
ed with the planting, cultivation,
harvesting and marketing Of the crop
or the care feeding and marketing
of live stock. He is not allowed to
deduct the amount expended in 1918
in purchasing stock for resale; but
when such stock is sold it's cost is
to be deducted from sale price in as
certaining the gain to be included
in his return of income. The cost
price of stock bought prior to 1917
cannot be deducted as in the case
just cited, if such cost was included
in the deduction made in the year
of purchase.
'"The farmer is not required to in
clude in his income tax computation
the value of farm produce consumed
by himself and family. But in cases
where he exchanges produce for
merchandise, groceries, etc, the mar
ket value of the articles received in
exchange must be included.
"All other items of income aris-
ing during the year through person
al service business or trade, through
use of property or money, should be
added into the gains for 1918.
Everybody wants to know what
income is exempt from tax. Very few
plums that fall to the average man
may be legally disregarded in figur-
ing up his 1918. income. Gifts and
bequests can be eliminated; also pro-
ceeds of life insurance received BY
the beneficiary of an insured person.
A person who cashed in an endown-
ment policy need report as income
only that portion which exceeds the
total of the premiums he paid in
all years on that policy. Annuities are
not taxable, unless the person rece!y-
ed in the year payments which rep
resent, when added to all prior pay
ments on the annuity, an amount
greater than the original cost Of the
annuity. Dividends of unexpired life
insurance policies are not taxable
income; but dividends on paid up
policies must be considered income.
Alimony is not income to the recip-
lent, nor is it an allowable deduc-
tion on the part of the person who
pays.
From the total of all items Of in
come, there are certain deductions al
lowable by law. All interest paid on
personal Indebtedness and all taxes
paid during the year are deduetible
except Federal Income and Excess
Profits taxes, inheritance taxes and
for local improvements,
such as sidewalks, sewers, etc., losses
incurred in business or trade ar al
lowable, also losses arising from
fires, storms, shipwreck or other ca
sualty, or from theft, in cases where
such losses are not compensated for
by insurance or otherwise. Losses in
Cured outside of a persons regular
business are allowable to the extent
of gains reported from similar
transactions within the year. Debts
due to the taxpayer actually ascer-
tanned to be worthless during the
year are deductible.
Depreciation on property used in
profession, in business, or in farm
ing is another item that may be
claimed as deduction. The store
keeper may claim depreciation on his
fixtures, and on his delivery horses
and wagons, but not on his stock held
for sale. The professional man may
claim similar deduction on his in
struments; and, in case of physician
who maintains team or auto for
making his calls on patients, reason
able depreciation may be claimed.
The farmer may claim depreciation
on his farm buildings, aside from his
personal residence, also on his farm
machinery, his work horses and farm
wagons. The teory Of depreciation,
in connection with income tax, is that
wear and tear caused by use in earn
ing income is a real expense in the
earning OF that income. The rate
is determined by the number Of
years that the property ordinarily
would be useful, and the cost Of the
property is the basis Of the computa-
ton. II the property suffering de-
probation was bought or acquired
pr;or IN Morch tho 1o1S the mar