The Richmond palladium and sun-telegram. [volume] (Richmond, Ind.) 1907-1939, 1920-01-10
MANY EXPENSES OF
BUSINESS SUBTRACT
FROM INCOME TAX

Deductions from gross income IN De
termining net income include all bust
ness expenses, which are the amounts
actually incurred during the tax year
in the conduct Of q business, trade, or
profession.
A merchant may claim az deduc-
lions the amount paid for advertising.
hire Of clerks. and other employees. the
cost of light. fuel. heat, water and
telephone used in his place Of bust
ness, the cost Of operating delivery
wagons. motor trucks, and incidental
repairs to such vehicles.
a physician may claim 40 deduc-
tons the cost of medicines and medic
inal supplies used by him In his prac-
tice, a reasonable proportion OF the ex-
penses paid In the maintenance and
repair Of an automobile used In max
ing professional calls, the expenses Of
attending medical conventions, dues
to medical societies and subscriptions
to medical journals, the rent paid for
Office rooms and the cost Of heat. wa
ter, light. telephone, etc.. used in such
office rooms, and salaries paid to
Office assistants. The same deduc-
tions are allowed dentist.
Farmers Also Considered.
The farmer may deduct all amounts
paid in preparing his land for crop.
and the cultivation, harvesting. and
marketing of the crop. The cost OF
seed and fertilizer used and amounts
spent In caring for live stock are de-
ductible items. The cost of minor re-
pairs to farm buildings, other than the
dwelling. and of fences, farm machin-
cry. and wagons may be claimed. also
the cost OF farm tools which are used
up in the course Of year or two.
The cost Of machinery Of q permanent
character. such as a thrashing ma.
chine or tractor, is held to be a CAPT
tai investment, and Is not an allow.
able deduction. Rent paid for farm
| 10 deductible.
! The principles underlying these al
lowances are equally applicable to the
conduct of any trade, business. or pro
lesson. In short, all expenses con
nected solely and directly with the
conduct of an income-producing bust
ness. trade, profession or vocation are
| allowable.
Deductions for Losses.
Losses incurred by taxpayer in an!
transaction entered into for profit out
side of his regular business are al
lowed. Under the 1917 act deduction
for such losses were allowed only II
the extent Of gains In similar trans
actions. II for example, a person made
1000 in one stock market transaction
and in another lost $4,000, he was re
quired to include the 81 1000 In his re
turn OF gross income, and could deduc
only that amount as loss. Under tn,
current act he is allowed a deduction
Of $4,000. sa@3g
A reasonable allowance is made 10
depreciation of business property an,
obsolescence and for the depletion Q
oil and gas wells and other natura
deposits.
:. Contributions of gifts made durin
the year 1919 to corporations organ
ICED for charitable. scientific, religious
or educational purposes, or for tn
prevention Of cruelty to animals or t
the special fund for vocational rehabi
itation may be deducted to an amour
not exceeding Is per cent of the tai
payers income.
other Deductibte Items.
Other items which may be deducte
are as follows:
Taxes paid or accrued during tn
, year 1919, except income, war profits
or excess profit taxes, and those as
sessed against local benefits of kin
+ tending to improve the value of tn
property.
Loss of property not connected. wit
trade or business rising from fire!
storms, shipwreck, or other casualt.
> or from theft, If not compensated 70
by insurance or otherwise.
, Debts ascertained to be WORTHLESS
;. and charged off within the year.
Interest paid or accrued on indeb
edness except Indebtedness INQUIRE
, to purchase securities, the inters
upon which is xmept from tax