The Farmington times. (Farmington, St. Francois County, Mo.) 1905-1926, 1919-01-31

chasing stock for resale, unless sold
in the same year; but when such
stock is sold its cost is to be deducted
from sale price in ascertaining the
gain to be included in his return of
income. The cost price of stock
bought prior to 1917 cannot be de-
Quoted as in the case just cited. If
such cost was included in the deduc-
ton made in the year of purchase.
"a 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 mer-
chandise, groceries, etc., the market
value of the articles received in ex-
change must be included.
"All other items of income arising
during the year through personal SER
vice, business or trade, through use
of property or money should be added
into the gains for 1918.
Income That Is Exempt from Tas
Everybody wants to know what
income is exempt from tax. Gifts
and requests can be eliminated; also
proceeds of life assurances received
by the beneficiary of an insured per-
son. A person who cashed in an en-
dowment 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 re-
ceived in the year payments which
represent, when added to all prior
payments on the annuity, an amount
greater than the original cost. Divi-
dends on all unexpired life insurance
policies are not taxable income; but
dividends on paid up policies must be
| considered income. Alimony is not
income to the recipient, nor is it al
lowable deduction on the part of the
person who pays.
Deductions That Are Allowable
"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 deductible,
except Federal Income and Excess
Profits taxes, inheritance taxes and
assessments for local Improvements.
Losses incurred in business or trade
are allowable, also losses arising from
fire, storms, shipwreck, or other cas-
ualty, 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 only to the ex-
tent Of gains reported from similar
transactions. Debts due 10 the tax
payer actually ascertained to be
worthless during the year are deduct
lible.
I Depreciation on property used In
profession, in business or In farming
is another item that may be claimed
as deduction. The storekeeper may
tclaim depreciation on his fixtures, and
on his delivery horses and wagons
but not on his stock held for sale
The professional man may claim sim
liar deductions on his instruments
and, in the case of physician who
maintains team or auto for max.
ing his calls on patients, reasonable
depreciation may be claimed. The
farmer may claim depreciation on his
farm buildings aside from his person
al residence, also on his farm machin-
cry, his work horses and farm wagons
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. If the property suffering depre-
citation was bought or acquired prioI