The article discusses how the tax system works in terms of deducting and including income from asset transfers. It explains that taxpayers are given a "basis" in each asset, which represents the amount taxed upon receipt. When selling the asset, the taxpayer's basis offsets the amount received, and tax is only imposed on the excess. If the basis exceeds the amount received, it results in a deductible loss. Certain payments like charitable contributions and medical expenses have specific rules for deductions. The article also mentions tax credits for the elderly and disabled, as well as deductions for casualty losses.