Bogalusa enterprise and American. (Bogalusa, La.) 1918-19??, 1919-01-23

IN purchasing stock Tor resale; but
when such stock is sold its cost is to
be deducted from sale price in as
certaining the gain to be included
in his return of income. The cosc
price of stock bought prior to 1917
cannot be deducted as in the cost
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 mer-
chandise, groceries, etc., the market
value of the articles received IN ex-
change must be included.
"AI other items of income arising
during the year through personal ser
vice, business or trade, through use
of property or money, should be add
ed 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 person.
! A person who cashed in an endow-
ment policy need report as income
| only that portion which exceeds the
total of the premiums 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 of the
annuity. Dividends on insurance
policies are not taxable income; but
dividends on paid-up policies must
be considered income. Aiimony is not
income to the recipient, nor is it an
allowable deduction on the part of
the person who pays.
'F'rom the total of all items of in
come there ape certain deductions al
lowable by law. All interest paid
on personal Indebtedness and all
taxes paid during the year are de-
ductible, except federal income and
excess profits taxes, inheritance taxes
and assessments for local improve
ments, such as sidewalks, sewers, etc.
| Losses incurred in business or trade
are allowable, also losses arising from
fires, storms, shipwreck or other cas-
ualty, or from theft, incases where
such losses are not compensated for
by insurance or otherwise. Losses
incurred outside of a persons regular
business are allowable to the extent
actions within the year. Debts due
to the taxpayer actually ascertained
to be worthless during the year are
deductible.
Depreciation on property used in
a 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 for
sale. The professional man may
claim similar deduction on his instru-
ments and, in the case of a 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
| work wagons. The theory of depre-
| citation, in connection with the In
come Tax, is that wear and tear
| caused by use in earning income is
4 real expense in the earning of that
income. The rate is determined by
The number of years that the prop
srty ordinarily would be useful, and
the cost of the property is the basis
IF computation. If the property suf-
.ering depreciation was bought or ae-
luired prior to March l 1913 the
market value of that date is used, in
ltead of the cost, in figuring depre-
,iation.
| Contributions or gifts actually
| made in 1918 to organizations oper-
ting exclusively for religious, char
table, scientific or educational pur-
ioses, and to societies for the pre-
'ention of cruelty to children or ami
mails, may be deducted to an amount
lot exceeding Is per cent of the net
Income, computed without the benefit
If this deduction.
4 4 Fl II. IL SCI