Richmond daily register. (Richmond, Madison County, Ky.) 1917-1978, 1919-02-15
write to the office for the rule apply
ing on such interest.

Dividends on stock shares are in
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 as
certain the gross sales or total cash |
receipts; then add together the in
ventory at the beginning of the year,
and the purchases of goods for resale.
From this latter sum subtract the in
ventory of goods on hand at the years
end, and the result is the cost Of the
goods sold. This cost, plus necessary
expenses incurred solely through con-
duct of the business, is to be deducted
from the gross sales, and the result
is the net earnings of the business.
"a professional man arrives at his
income by ascertaining the total of
fees for services and deducting there
from all expenses connected 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 products were raised on
the farm or purchased and resold. He
is allowed to deduct from this total
his expenses Of the year connected
with the planting, cultivation, har-
vesting and marketing Of the crop, or
the care, feeding and marketing of
! live stock.
"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
"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.
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 be-
quests can be eliminated; also pro-
ceeds of life insurance received by the
beneficiary Of an insured person. A
person who cashed in an endowment
policy need report as income only that
Iportion which exceeds the total of the
premiums he paid in all years on that
policy. Annuities are not taxable,
unless the person received in the year
payments which represent, when add
ed TO all prior payments on the annu-
ity, an amount greater than the orig
inal annuity. Dividends on unexpired
life insurance policies are not taxable
income; but dividends on paid-up pol.
Iicies must be considered income. Ali.
mony is not in come to the recipient
nor is it an allowable deduction 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 OF
: personal indebtedness and all taxei
, paid during the year are deductible
J except Federal Income and Excess
, Profits taxes, inheritance taxes ant
assessments for local improvements
; such as sidewalks, sewers, etc. Loss
: es incurred in business or trade ar
? allowable, also loses arising from
. fires, storms, shipwrecks, or other cas-
t ualty, or from theft, in cases wher
1 such losses are not compensated TO
. by insurance or otherwise. Losses in
: Cured outside Of a persons regula
r business are allowable to the extent o
= gains reported from similar transac
a tions within the year. Debts due :
D the taxpayer actually ascertained T
v ibe worthless during the year are de
tductible.
Depreciation OF property used In
5 profession, or in a business or i
: farming, is another item that may b
S claimed as a deduction. The store
keeper may claim depreciation on hi
0 fixtures, and on his delivery wagon
: and horses, but not on his stock hel
for sale. The professional man ma
), claim similar deduction on his instru
: ments; and, in the case Of physicia
d who maintains q team or an auto TO
d making his calls on patients reason
e able depreciation may be claimed Th
: farmer may claim depreciation on HI
e farm buildings, aside from his person
e al residence, also on his farm machir
e cry his work horses and farm wa
4 go1s. The theory Of depreciation