The Ocala evening star. [volume] (Ocala, Fla.) 1895-1943, 1921-02-16
INCOME TAX FACTS
YOU SHOULD KNOW

Outstanding of the term is of para
mount Importance to the taxpayer, as
it is the basis upon which the return |
is made.
Income is defined by the revenue act
to include "gains. profits and income
derived from salaries, wages, or per-
sonal compensation. or from profess
sions, vocations, trades. business, COM
merce, or sales or dealings in proper
ty; also from interest, rents, divl-
bends, securities. or in the transaction
Of any business carried ON for gain
or profit, and income derived from any
source whatever" Practically every
dollar received by the taxpayer dur
ing the year 1920 must be shown in
his return as gross income, In arriv-
ing at net income. upon which the tax
is assessed, the taxpayer is allowed
certain specified deductions, such as
business expenses, losses. and depre-
citation, which will be fully explained
later.
| Wage Farmers Tax Returns
Taxpayers may be divided into four
general classes-the wage Garner or
salaried class, business, professional,
and agriculture. Any form of COM
pensation for personal services rem
dered by the wage Garner is income,
Including salaries, wages, commits
sions, fees and bonuses, pensions paid
retired employees, and tips. Payment
for personal services may be paid for
partly in cash and partly in board and
lodging. In this event a fair value
must be placed on the room and meals,
land the amount reported as income.
| Promissory notes received in pay
ment for services. and not merely as
security for such payments, constitute
income to the amount of their fair
market value. When services are paid
for in something other than money,
the fair market value of the thing
taken in payment is the amount to be
|, included as income.
/ IL the services were rendered at a
stipulated price, in the absence of evl-
Idence to the contrary such price will
!, be presumed to be the fair value OF
the compensation received. Compensa-
, ton credited to taxpayers account
and subject to withdrawal must be re.
lported as income whether actually re.
Iceived or not.
Il The gross income of the usual bust
mess consists of the gross profit or
:, sales, together with income from Other
> sources. The return must show tn.
lgross sales, purchases, and cost o.
goods sold. To reflect net income cor
: rectly and to ascertain gross incom,
inventories are necessary at the be
:, ginning and end of each taxable year
= The lawyer, doctor, architect, actor
), author, dentist, clergyman and othe
\ professional man must include in hi
:, return of gross income all fees, sal
: laries and other compensation for pro
lfessional services.
Return by Farmers
IL The farmer is required to report a
= gross income all profits derived from
% the sale or exchange of farm products
including crops and live stock whethe
produced on the farm or purchase
ard resold. Where farm produce j
!, exchanged for groceries, merchandise
= or other articles the fair market valu
of the article must be reported as in
q come. A farmer who rents his farr
!. on the crop-shareo basis must repor
- such income for the year in which tn
n crops are sold. Profit derived fror
!. the sale or rental of farm lands mus
be reported.
Within the meaning of the revenu
act the term t'farm" includes stool
: GARY, poultry, fruit and truck farms
- also ranches, plantations, and all Ian
- Used for farming operations. Ind
viduals, partnerships or corporation
that operate or manage farms fc
profit, either as owners or tenants, al
M designated farmers.
BOIL Every taxpayer is required to il
=. clude in his return of gross incon
MI the following items:
Interest received on notes and d,
posits in banks, including saving
banks.
Cash dividend on stock. The 81
preme court decided in March, 1872
> that stock dividends were not taxabl
hs Profits from the sale of such stoc
of however, are taxable income for Il
A year in which received. Only div
to Idens paid out of earnings or prof
accrued since March 1, 1913, are Ia,
ed.
Profits received from the sale
property, real or personal. If the pro-
fE erty was purchased prior to March
1913, the profit is based on the diffe
A. ence between the selling price and Il
rd fair market price or value as of Marc
at 7. 1918.
Partnership profits; partnerships ;
- - -, %b,1 100000 60