OCR Text |
Show YOUR INCOME TAX No. 8 Losses if incurred in a taxpayer's trade or business or profession or in "any transaction entered into for profit" not compensated for by insurance in-surance or otherwise are deductible from gross income is determining net Income upon which the income tax is assessed. To be allowed, losses not incurred in trade, business, or profession must conform closely to the wording of the statute. For example, ex-ample, a loss incurred in the sale of a tax-payer's home or automobile, J which at the time of purchase was not bought with the intention of resale, is not deductible, because it was not a transaction "entered into for profit." Losses substained in the operation of a farm as a business venture are deductible. de-ductible. If sustained in the operation opera-tion of a farm operated merely for the pleasure of the taxpayer, they are not duductible. |