The principles which apply to interest are in a general way applicable to taxes - with the marked difference that the actual payment of taxes on the whole assessed value admits of no evasion. Though a necessary expenditure as well as expense, taxes do not enhance the value of property and should be treated, as a rule, in the same manner as interest.

Possibly, in the treatment of taxes and assessments upon subdivision property, the clearest way is to keep distinct the taxes upon each subdivision for a given year; and at the closing of the books, after calculating the earned or realized profits on this particular subdivision, to deduct from that profit the taxes which apply to the year under consideration. This brings them eventually into the Profit and Loss account, and gives the same final result as if all taxes were charged direct to Taxes account, which also is written off as a whole to the debit of Profit and Loss account. The plan first outlined has the advantage of showing exactly the net results yielded by each subdivision. (See also Chapter XXXV (Taxes. Section 335. Entering Tax Payments On The Books).)