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I 2-C—THE CHRONICLE, Clinton, S. C., May 7, 1970 y Minding Your Business vxjvxwx^wvx-xvx-s;: Bad Debts BY JOHN J. SUTHERLAND Certified Public Accountant If someone owes you money and cannot or will not pay you back, you have a tax deduct ible, with few exceptions, bad debt It is not necessary, as some say, to sue the debtor to prove its worthlessness. To be deductible a valid obligation must exist. This is to say that you must have loaned money or sold merchandise to the debtor with full and complete expecta tion to be repaid at some future date. The existence of a bad debt is primarily a matter of judg ment and can always be subject to dispute. There are a few guidelines to follow in applying judgment, some better than oth ers, as follows. If the debtor is bankrupt, insolvent, or in weak financial condition you have a strong indication of worthlessness. If the statute of limitations has expired or if you have foreclosed on the security and found it inadequate, you most certainly have a deduc tion. If the debtor has refused to pay and the cost of collec tion would exceed the amount of the debt, you will not be denied a deduction. These are a few of the factors that consti tute proof but almost any evi dence that indicates that the debt will never be paid will be considered. If you have loaned money to a relative or friend, you must prove that you intended to be repaid or it may be repaid or it may be considered a gift. If a personal loan, as opposed to a business-connected loan, becomes worthless or partially so, you must treat it as a short term capital loss. This means that it must be deducted from any long-term capital gains and any excess deduction will be limited to $1,000 per taxpayer per year. If the debt was incurred in connection with your “trade or business" you may deduct it as an operating expense. A work of caution is in order here. Just because you are in busi ness and incidentally make loans does not prove that it is a business-connected loan. If you are in business you have a choice of methods in arriving at your annual bad debt deduction. These methods are the direct write-off and the re serve methods. Under the direct write-off method, as the name implies, you take a deduction each year for the actual accounts deter mined to be worthless in that year. Timing could be import ant because as for any other expense you cannot switch years just because you need the de duction more in one year than in another, and if you choose the wrong year you could lose the entire deduction because of a technicality too complicated for this article. Under the reserve method you estimate the allowance neces sary to cover the “doubtful” accounts. Note the term doubt ful. It is not necessary to prove wothlessness, just doubt. When a debt is proved worthless it is charged against this reserve. The additions to the reserve are the annual allowable deductions. * * * 1ht Old s “Engineers are trying to build a car that will stop smoking—I’d like to find one that will stop drinking.” There are 185,000 (conser vatively estimated) persons in South Carolina 65 years of age or more. Lee Receives Bronze Star BILOXI, MBS. - U. S. Air Force Technical Sergeant Cal vin M. Lee, son of Mrs. Pau line L. West, 470 S. Church St., Spartanburg, has been de corated with the Bronze Star Medal for meritorious service while engaged in military op erations against Viet Cong forc es. Sergeant Lee distinguished himself while assigned to Head quarters, Military Assistance Command, Vietnam, Armed Forces Language School, Sai gon. He was presented the medal at Keesler AFB, Miss., where he now serves as an educa tion and training technician with the headquarters squadron of the 3380th Technical School, a unit of the Air Training Com mand which provides flying, technical and basic military training for U.S. Air Force per sonnel. The sergeant, a graduate of Clinton High School, attended the University of Washington extension division at Sumter. His wife, Joan, is the daugh ter of Roy Cannon of Clinton. Mrs. Lee’s mother, Mrs. Vir ginia Cannon, resides on Forest Drive, Biloxi, Miss. St. John's Hosts Skillshop On Sunday afternoon, May 10th, Lutherans from the areas of Newberry, Greenville and Spartanburg will converge on St. John’s Lutheran Church in Clinton for a Skillshop-in-the- Round. Sponsored by the Parish Edu cation Committee of the South Carolina Synod, the Skillshop is designed to offer all teachers in the various schools of the church, and especially the teachers of Vacation Church School, training in developing personal skills in such areas as creative arts, discussion and Bible study, and worship and music. Three members of the Board of Parish Education of the Lu theran Church in America from Philadelphia, Pennsylvania, will serve as resource per sons for the Skillshop. w, ; t -.i w. 4 Zif ' r r '-‘~v * m 'v>£t Dear Sally Make An Appointment 'Y' v- 1 ;K-\ WINS ESSAY CONTEST — Bernadette Crumlin receives the prize which she won in the Chevrolet “I Am Proud of South Carolina” contest. Present ing the prize is Tom Plaxieo.—(Yarborough Pho to) Bell Street Junior Wins Essay Contest Bernadette Crumlin, a junior at Bell Street High School, has been announced as the winner of the Chevrolet Student Essay Contest for Laurens School District 56. The daughter of Rev. and Mrs. E. Wallace Crumlin, she re ceived a $ 25 Savings Bond and is now eligible for district com petition. The contest is part of a program sponsored by all South Carolina Chevrolet dealers in celebration of the S. C. Tricentennial. It was spon sored locally by Plaxieo Chev rolet. Miss Crumlin’s essay reads: winning Una because of its people, cul ture, institutions and religion. The people, along with the help of God, made South Carolina the prosperous and industrious land it is today. Here we have museums, schools, colleges and libraries. Also, here are insti tutions for the handicapped and beautiful churches in which to worship. “I am proud of this land’s historical background, and the love and warmth each South Carolinian shares with one a- nother. “Mainly, I am proud of South Carolina because of my heri tage. Here, my forefathers and I were born.” “I am proud of South Caro- BY SALLY SHAW DEAR SALLY: I was recently introduced to a doctor at a cocktail party, and he was very friendly . . .until I happened to bring up the subject of a little physical disorder I am suffer ing from and asked his opinion about it. He cooled off as though I had tossed some ice water oo him! Do you think he was living up to his professional code by acting this way? Mrs. G. DEAR MRS. G.: What you did was probably the most common breach ofgood manners regard ing any professional man who gives advice of any kind. Just because you were both guests at the same party did not give you the license to solicit free advice from him. He could not venture any opinion without ex amining you, so your efforts were useless anyway. If you meet a doctor socially and would like to use him as your own, make an appointment to see him in his office, keeping that part of your relationship on a strict ly businesslike basis. DEAR SALLY: A new neigh bor is trying much too hard to be friendly with me, and has become arealpest She isavery nice person, but she has the ha bit of dropping in on me almost every day just to sit and yak. These caUs put me terribly be hind in my housework. I’m at my wits’ end as to how to deal with her tactfully and kindly, without hurting her feelings. Any sug gestions? HARASSED. DEAR HARASSED: The solu tion is easy. The next time you see her headed your way, meet her at the door with some such statement as “I’m sorry, but I just don’t have the time to talk now. I’m up to my ears in work.” DEAR SALLY: We’ve been married only five months, and my husband keeps embarras sing me by addressing me by the siUiest pet names in front of our friends . . .“Angelface,” “Doll baby,” “Sugar cookie," and the like. I’ve tried to re monstrate with him, but he just laughs me off and accuses me of being ashamed of his show of affection in the presence of others. What can I do? PET PEEVE. DEAR PET PEEVE: How a- bout feeding him some of his own medicine? Begin addressing him with a few gushy pet names in front of others . . .things like “Lamby-pie," “Babykins,” or ‘Sweetie face. ’ A little such treatment just might cure him. DEAR SALLY: My wife has criticized my behaviour recent ly while we were dining in a friend’s home. I accidentally dropped my fork onto the floor, and when I picked it up I hand ed it over to our hostess for replacement. My wife claims this was presumptuous of me, and that I should have wiped the fork off on my napkin and continued to use it. How about this? FUMBLER. DEAR F t UMBLER: Your wife is off-base >on this. One’s nap kin is nevei'used for wiping off or polishing one’s silverware, nor does any hostess expect a guest to continue using a piece of silverware that has accident ally faUen onto the floor. THE ACTION “The National Chamber is an instrument of change -- not the status quo. At the local level, there’s no more natural orga nization to serve as the com munity’s instrument for change and action than the local cham- x ber. Chambers of commerce 'promote change, rather than re sist it. They instigate, lead and foster change.” --- Arch N. Bpoth, executive vice presi dent, Chamber of Commerce of the United States. ^OSES BECAUSE THEY SAY IT SO WELL. . . BECAUSE THEIR QUALITY ADDS WARMTH] TO WHAT THEY SAY . . x \\ \ vl r IL. L' II !h di' SEND A MOTHER’S DAY CARD by Cj/r>ty* ’etmeiitf WBHIER Qua/fty, fa dService for Your foodDl ■all SOFT I DRINKS HEINZ TOMATO SOUP lO'/z-Oz. Can 10c POSS FAMOUS HASH 1-LB. CAN FRESH FRYERS Dixie Crystals or Domino SUGAR TEXIZE BLEACH Yi GAL. South Carolina Large Brown EGGS Carton PLUS DEPOSIT Limit: 4 With *5.M or More Whole, 29c 5-Lb. Bag Grade A Dozen Limit: 1 With $5.00 or More Grocery Order, Please! MARCAL PAP^R TOWELS 3 Big Rolls Fresh GROUND BEEF Lb. 59c Ole Dix CHARCOLAL BRIQUETS 10 Lbs. 59c A-G TEA BAGS 100 Bags 69c A-G H/ ? Lb. Loaves BREAD 4 for 89c Market Sliced BACON Lb. 69c DOG FOOD 4 Cans 29c Duncan Hines l*Os. Box CAKE MIXES 39c Golden Ripe BANANAS Lb. 15c Warner’s ORANGE DRINK Quart Bottle 27c Lor Cabin—In Pitcher SYRUP 1 Pint 69c P-P Sweet Mixed PICKLE Quart Bottle 49c Trellis SWEET PEAS SOS Can 2 for 25c SanUst, Juicy LEMONS NESCAFE COFFEE 6-Oz. Jar in*: 1 With $6.00 Grocery Order, I PRICES EFFECTIVE MAY 7-8-9 MILLS STORE - LYDIA MILLS STORE Y*' i , •'* r ” v * r ' FREE DELIVERY SERVICE PHONE 833-0631