Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1919-01-21


lowed to deduct from this total HE
expenses OF the year connected with
the planting. cultivation. harvesting
feeding and marketing Of live stock,
He Ia not allowed to deduct the
amount expended In 1914 In purchas-
Ing stock for resale; but when such
stock Ia sold It's cost 10 to he de-
Quoted from sale price In ascerthinins
the gain to he included In his return
~ income. The COS, price OF stock
bought prior to 1917 can not be de-
Quoted as In the case just cited, II
such coat was included In the deduc-
ton made In the year OF purchase.
The farmer Ia not required to In
clude In his income tax computation
the value Of farm produce cons ,n,ed by
himself and family But In cases where
he exchanges produce for merchandise,
groceries, etc. the market value OF the
articles received In exchange must be
included.
during the year thru personal service.
business or trade. thru use OF property
or money. should be added into the
gains for 1918.
Little 10 Exempt.
Everybody wants to know what In
come Is exempt from tax. Very few
plums that fall to the average man
may be legally disregarded in the fig
uring UP his 1918 income. Gifts and
requests can 10 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
portion which exceeds the total OF the
premiums he paid In all years on that
policy. Annuities are not taxable. I'M
less the person received In the yea"
payments which represent, when added
to all prior payments on the annuity.
an amount greater than the original
cost Of the annuity. Dividends on un-
expired life insurance policies are not
taxable income: but dividends on paid"
up policies must be considered income.
Al'monv is not income to tho 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 on
personal Indebtedness and all taxes
paid during the year are deductable.
except federal income and excess pro-
fits taxes, inheritance taxes and as
sessments for local improvements,
such as sidewalks. sewers. etc. Loss
es incurred In business or trade are al
lowable. also losses arising from fires.
storms. shipwreck or other casualty, or
from theft in cases where such losses
are not compensated for by insurance
or otherwise. Losses incurred outside
OF a persons regular business are al
1owable TO the extent OF gains reported
from similar transactions within the
year Debt due to the taxpayer actu-
ally ascertained to be worthless dur
ing the year are deductahle.
Depreciation - Deduction.
Depreciation on property used in a
profession. in business. or in farming
is another item that may he claimed as
deduction. The e storekeeper NAV
ella ini depreciation on his fixtures. and
or his delivery horses and wagons, bat
not on mis- stock held for sale. The
professional man may claim similar
the case of a physician who maintains
a team or auto for making calls on pat
tents. reasonable depreciation may he
claimed. The farmer NAV claim do
precia lion on his farm buildings. aside
from. his personal residence. also on
his farm machinery. his work horses
and farm work wagons. The theory
Of depreciation. 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 in
come. The rate is determined by the
number OF years that the property or
dinarily would b useful. and the cost OF
the property is the basis Of the compu-
tation. II the property suffering de-
probation was bought or acquired
prior to March l, 1918. the market
value as Of that date is used. instead
Of the cost. in figuring depreciation.
Contributions or gifts actually
made in 1918 to organizations operat-
ing exclusiy ely for religious. charitable,
scientific or education purposes. and to
societies for the prevention Of cruelty
to children or animals, may be de-
Quoted, to an amount not exceeding | )
per cent Of tho net income computed
without the benefit Of this deduction.
After the total Of all income is
found. and the deductions allowable by
law have been computed as an offset
the amount OF income in excess of sucn
deductions is the net income. which
forms the basis Of the assessment Of
tax.
"If every person in this district will
examine his own 1918 income and his
allowable deductions. in line with data
that I have given, he will know be-
yond doubt whether he must file his
return when the blanks arrive. And
here is how he will determine his LA
bility to file a return. II he IS single he
must file II his net income was $1,000
or more. and this requirement Is en-
forced whether or not he is the head of
a family. II he Is married. ne must
file his return if his net income. in
GLIDING that of his wife and minor
children. was $4,000 or more.
II want to emphasize the co-opera
ton feature of the collection Of the in
come tax this year. The policy OF the
internal revenue bureau is to aid tax
payers to meet the requirements Of the
law. We are going right to the people.
not to swing club or to mulct the wage
Garner Of his savings. but offering ev-
cry helpful government function that
will assist people to do their duty"
One Hog Brinss $11s.55. t.
Perry. Jan. 21.-One OF the biggest
checks ever received for a single hog