The copper era and Morenci leader., 1919-01-31

necessary minor repairs, fire insur- ance, any interest he may have paid on mortgage, and a reasonable allow ance for annuaIo wear and tear of the
 rented proprety. The balance is
 included in gross income for the year.
 Interest on bank deposits, whether
 withdrawn or added to his bank
 balances, must be included in all calculation of income. Bond interest received during the year must be iu- cluded, except interest on municipal, county or state bonds. Interest on
 United States Bonds need not be in-
 cluded by the ordinary bond holder who purchased small amounts. Hold
 CTS of large amounts of Liberty
 Bonds however, should ask their
 bankers to write to my office for the
 rule applying to tax on such interest.
 Dividends on stock shares are iA-
 come and must be included in the
 gross figures, although the law does
 not impose the normal tax on distri-
 buttons made by domestic corpora.
 tions.
 A person buying and selling mer-
 chandise must find his profits for the
 year on the following basis: First
 ascertain the gross sales or total cash
 receipts. Then add together the in
 ventory at the beginning of the year
 and the purchase of goods for re
 sale. From this latter sum subtract
 the inventory of goods on hand al
 the years end, and the result is thG
 cost of theg oods sold. This cost, plus
 through conduct of the business, is to be deducted from the gross sales , and the result is the net earnings O.
 the business.
 A professional man arrives at hi: professional income by ascertainins . the total of fees for services and de , ducting therefrom all expenses con : nected directly and solely with hi. f practice.
 t A farmer must figure up all incom, v derived from the sale or exchange O
 his products during the year, whethe f such produce was raised on the farn l. or purchased and resold. He is allow f ed to deduct from this total his es 9 penses for the year connected wit the planting, cultivation, harvestini -- and marketing of the crop, or the care f feeding and marketing of live stock 1 He is not allowed to deduct tn g amount expended in 1918 in purcha, n ing stock for resale; but when sue n stock is sold it's cost is included i r. his return of income. The cost pric n of stock bought prior to 1917 cannc
 be deducted as in the case just cited if such cost was included in the d. h duction made in the year of pu c chase.
 d The farmer is not required to il I. clude in his income tax computatio d the value of farm produce consume F by himself and family. But in case
 where he exchangesproduee for me e chandise, groceries, etc, the marke V value of the articles received in e: r. change must be included.
 if All other items of income arisin a during the year through personal SC
 vices, business or trade, through us " of property or money, should be ad n ed to the gains for 1918.
 d Everyone desires to know whs ,r income is exempt from tax. Gift O. and bequests can be eliminated; als
 proceeds from life insurance receive is by the benificiary of an insured pc 70 son. person who cashed in an e g dcwment policy need report as i d come cnly that portion which c V. ceeds the total of the premiums IS. paid in all years on that policy. A ,g nuities are not taxable, unless u
 person received in the year Daymen f. which represent, when added to a n, prior payments on the annuity, 8 70 amount greater than the origins ,, cost of the annuity. Dividends ( ,r unexpired life insurance policies al ,+ not tavable income: but dividends ( ,r paid-un rnlicies must be c1nsidere 70 income. Aliroonysis net income 10 u
 recinirnt, nCr is it an allowable d = duction on the part of the person WI 7. pays.
 i From the total cf ." items of i come. there arc certain deducti"'
 allowable by law. All inte~rSt pa 1. on personal indebtedness and a