The Ely miner. [volume] (Ely, Minn.) 1895-1986, 1919-01-31

chandise, groceries, etc., the mar
ket value Of the articles received in
exchange must be included.
"All other items of income arising
during.the year through personal SER
vice, bushes or trade, through use
of property or money, should be adj
ded into the gains of 1913.
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 the 1918 income. Gifts
and requests can be eliminated; also
proceeds Of life insurance received
by the beneficiary of an insured per-
son. A person who cashed an en-
dowment policy need report as in
come only that portion which exceeds
the total Of the premiums he 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 or unexpired
life insurance policies are not tax
able income; but dividends on paid
up policies must be considered in
come. Alimony is not income to the
recipient, nor is it 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
lowable by law. All interest paid
on personal indebtedness and all tax
es paid during the year are deduct
IDLE, except Federal Income and Ex-
cess 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 in cases where
such losses are compensated for by
insurance or otherwise. Losses in
Cured outside of a persons regular
business are allowable to the extent
of gains reported from similar trans
actions within the year. Debts due
to the taxpayer actually ascertained
to be worthless during th year are
deductible.
Depreciation on property used in
a profession in business, or in farm
ing is another item that may be
claimed as a deduction. The store
keeper may claim depreciation on
his fixtures, and on his delivery
horses and wagons, but not on his
stock held for sale. Ehe pro-
fessional man may claim similar de-
duction on his instrumental; and, in
the case of physicians who main
tains team or auto for making his
calls on patients, reasonable de-
probation may be claimed. The far
mer may claim depreciation on his
farm buildings, aside from his per-
sonal residence, also on his farm ma
chinery, his work horses and farm
work wagons. The theory of depre-
citation in connection with the Income
Tax, is that wear and tear caused by
use in earning income is real expense
in the earning of that income. The
rate is determined by the number of
years that the property ordinarily
would be useful, and the cost of the
property is the basis of the compu-
tation. If the property suffering de-
probation was bought or acquired
prior to March 1, 1913, the market
value as of that date is used, instead
of the cost in figuring depreciation.
contributions of gifts actually
made in 1918 to organizations opera
ting exclusively for religious, char
iitable, scientific or educational pur-
poses, and to societies for the pre-
vention Of cruelty to children or an
finals, may be deducted, to an amount
not exceeding Is per cent Of the net
income computed without the benefit
of this deduction.
'"After the total of all income is
found, and the deduction allowable
by law have been computed as an off
set, the amount Of income in excess
of such deductions is the net income,
which forms the basis Of the assess
ment Of the tax.
eff every person in this district
will examine his own 1913 income
and his allowable deductions, in line
with data that / have given, he will
know beyond doubt whether he must
file his return when the blanks ar
rive. And here il how he win de-
termine his liability to file re-
turn. If he is a single man he must
file if his net income was 81, 900 or
more, and this requirement is en-
forced whether or not he is the head
Of a family. II he is married, he
must file his return if his net income,
including that that of his wife and
minor children was $4,000 or more.
II want to emphasize the coopera-
ton feature of the collection Of the
Income Tax this year. The policy Of
the Internal Revenue Bureau is to
aid taxpayers to meet the require
ments Of the law. We are going
x;rh% ~ %ha xonrla rOt 80 cu,;r a,