The daily Gate City and constitution-Democrat. (Keokuk, Iowa) 1916-1922, 1919-01-25

\
Quoted as in the case just cited, IL
such cost WAS included in the deduc-
! ton 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 lot
imerch andise, groceries, ETC., the mar
iket value of the articles received IN
exchange must be included.
| -it"All other items of income arising
during the year through personal serv.
ice, business or trade, through use OF
property or money, shoulo be added
into the gains for 1915
Everybody wants to know what IN
come is exempt from tax. Very rev
plums that fall to the average IN
may be legally disreSarded in fEspring I
up his 1918 income Gifts and beQuests
can be eliminated; also proceeds OF
life insurance received by the benefi- /
ciary OF an insured person A person |
who cashed in an endowment policy
need report as income only that por-
! tion which exceeds the total OF the
premiums he paid in all years on that
policy AnnuitieS are not taxable, IN
| less the person received in the year
payments which represent, when ad-
| ded to all prior payments on the an
nuity, an amount greater than the ori-
ginal cost OF the annuity. Dividends
on 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 1t an allowable de-
duction on the part OF the person who
| pays.
From the total OF all items OF In
come there are certain deductions al
Iowable by law. All interest paid on
personal property Indebtedness and
all taxes and assessments for local
Improvement, such as sidewalks, sew
ers, ETC. Losses incurred In business
or trade are allowable; also losses
Z arising from fires, storms, shlpwrecK
or other casualty. or from inert, IN
cases where such losses are not COM
pensated for by insurance or other
wise. Losses incurred outside OF
rerson's regular business are allowable
to the extent Of gains reported from
similar transactions within the year
Debts due to the taxpayer actually as
certained to be worthless during the
year are deductible-
Depreciation on property used In
profession, in business. or in farm
ing is another item that may be claim
ed as deduction The storekeeper
may claim depreciation on his fixtures,
on his delivery horses and wagons, but
not on his stock held for sale. the
: professional man may claim similar
deduction on his INSTRUMENTS; and.
In the case OF physician who main
tins team or auto for making Calls
, on patients, reasonable depreciation
T may be claimed The farmer may claim
r depreciation on his farm buildings,
: aside from his personal residence, al
!. SO on his farm machinery, his work
e horses and farm work wagons. The
i theory OF depreciation IN connection
with the income tax, is that wear a.
+ tear caused by use in earning income
r is q real expense in the earning
Y Of that income. The rate is de.
q termined by the number OF
0 years that the property ordinarily
would be useful, and the cost OF the
property is the basis of the computa-
S ton II the property suffering deDre-
S citation was bought or acquired prior
: to March /, 1913, the market value as
S If that date is used, instead OF the
d cost in figuring depreciation
= "ContribEtions or Sits actually
g maIe in 1918 to organizations opera
ting exclusively for religious, charita
( BILE, scientific or education purposes
+ and to societies for the prevention Of
4 cruelty to children or animals, may be
: deducted, to an amount not exceeding
a Is per cent OF the net income comput
= ed without the benefit of this deduct
d ion "
4 After the total OF all income i:
a found and the deductions allowable
i by law have been computed as an off
: set. the amount Of income in excess o
= such deductions Is the net income
which forms the basis of the assess
:. ment OF tax.
!, eff every person in this district vii
examine his own 1918 income and hi
: |. allowable deductions, In line with da
ia that have given. he will know be
4 !, yond doubt whether he must file hi
y return when the blanks arrive. Ant
~ here Is how he will determine his liza
y hility to file p return. II he Is singh
= he must file II his net income wa
U 81, 1000 or more, and this requirement
s. is enforced whether or not he is tn
20 head of a family II he Is married. h.
must file his return * his net income
including that OF his wife and mino
n children, was So O0o or more.
lie at want to emphasize the co-opera
% ton feature Of the collect.J-- Of TIL
Il income tax this yer. The policy OF tn
a internal revenue bureau Is to aid tai
nayers to meet the requirements Of tn
r. law. We are going right 20 rne people
he not to swing clubs or to mu1ct tn
1t, wage-earner Of his savings, but Offer
III ing every helpful governmental funct
n ion that viii assist people to do thei
ar duty"
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