The Madison journal. (Tallulah, Madison Parish, La.) 1888-current, 1919-02-01

gross ERures, altnOuRn the ID" uoce
not impose the normal tax on dis
tributions made by domestic cor
porations.
ga person buying and selling
merchandise must find his profits fol-
the year on the following basis:
First, ascertain the gross sales or to-
tai cash receipts. Then add together
the inventory at the beginning of the
year and the purchase of goods fol-
resale. From this latter sum subtract
the inventory Of goods on hand at
the years. end, and the result Is the
cost, plus necessary expenses in
Cured solely through conduct Of the
business, is to be deducted from the
gross sales, and the result Is the net
earnings OF the business.
ga professional man arrives at his
professional income by ascertaining
the total OF fees for services and de-
Quoting 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 con-
nected 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 ex-
pended in 1918 in purchasing stock
for resale; 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 deducted as in the
case just cited, II such cost was in
cluded in the deduction made in the
year of purchase.
"Tbe 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.
GAN other items OF income arising
during the year through personal
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
figuring up his 1918 income. Gifts
and requests can be eliminated; also
proceeds Of life insurance received
BY the beneficiary of an insured per-
ION. A person who cashed in an en-
1owment policy need report as in
come only that portion which exceeds
he total OF the pre- miums he paid in
I'll years on that policy. Annuities
ire not taxable, unless the person re-
'eived in the year payments which
epresent, when added to all prior
payments on the annuity, an amount
greater than the original cost of the
nnuity. Dividends on unpaid life
insurance policies are not taxable in
ONE; but dividends on paid-up pol
cies must be considered income. Al
moDy is not income to the recipient,
or is it an allowable deduction on
he part Of the person who pays.
From the total of all items of IN
ONE, there are certain deductions
llowable by law. All interest paid
n personal Indebtedness and all
'xes paid during the year are de-
nctible, except Federal Income and
xcess Profits taxes, inheritance taxes
assessments tor local improvements,
,ch ss side walks, sewers, etc. Loses
curred In business or trade are al.
wable, also losses arising from fires,
orms, shipwreck or other casualty,
from theft, in cases where such
sses are not compensated for py
surance or otherwise. Losses in
lrred outside OF PERSONS regular
lsiness are allowable to the extent
gains reported from similar trans
tions within the year. Debts due .
the taxpayer actually ascertaired
be worthless during the year are {
ductible.
depreciation on property used in
profession, In business, or in farm j
: Ia another item that may be
lined IS a deduction. The store !
eper may claim depreciation on =
fixtures, and on his delivery
rses and wagons but not on his s
ok held for sale. t
The professional man may claim Y
'ilar deduction on his instrupents, n
!, Ia the case Of q physician who O
intains team or auto for making s.
calls on patients, reasonable de- =. u,
citation may be claimed. The far a,
may claim depreciation on his
y boildings, aside from his per. m
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