The Cecil Whig. [volume] (Elkton, Md.) 1841-current, 1914-03-07

celptS from the sale of products Of
every description from the farm, but
he may deduct from these items the
amounts actually paid as purchase
money for the animals sold or slaugh-
tered during the year. When the ami
mails raised by the owner are sold or
slaughtered, however, their value
should not be deducted.
From the gross income there must
be deducted amounts of money actual
ly paid as expenses for operating the
farm and producing the farm pro-
ducts, live stock, etc. This would in
clude hired farm labor, farm supplies
purchased that are necessary to carry
on the business and not an investment
that represents principal, etc. Ex-
penses of repairs on farm property
may be deducted, provided the amount
deducted does not exceed the amount
spent for such repairs during the year
for which the return is made. The
cost of replacing tools or machinery
may also be deducted to the extent
that the cost of the new articles does
not exceed the value of the old. No
deduction may be made for the cost of
additional farm machinery, but credit
may be allowed for the annual depre-
citation in the value of such machinery.
or example, if machine cost 500
and is regarded as good for ten years
OF service, the annual depreciation
would be 10 per cent, and deduction
of $40 each year could be made on
this account, as part of the expense of
operating the farm. The expense of
supporting the family, however, can
not be deducted from the gross in
come. In case an Individual owns his
own residence he cannot deduct the
estimated value of his rent But
tenant operating a rented farm as
proprietor may deduct the rent of the
farm as part of the expense of his
business.
Farmers are not required to include
in their income the produce taken
from the farm and consumed by the
family. Only produce sold off the
farm is to be included. \ farmer is
not entitled to deduction for his own
labor, or for expense of feeding live
stock. He may, however, deduct such
items as cost of fertilizer and other
supplies and materials which are used
up in the course of his operations.
The law provides that for the year
1913 the tax shall be computed only
on the net income for the ten months
from March l to December 81, and
that returns shall be made on the basis
of five-siXths Of the year. Therefore,
if the net income for the last ten
months of 1913 amounts To $1,000 ex-
emption and in the case Of husband
and wife living together S3,333.33 eX-
emption. In computin~ the net in
come for this period deductions should
be made for only five-sixths of the
amounts properly allowable for the
whole year. Returns for 1913 must
be made by March /, 1914.
Blanks for making returns for the
income tax may be obtained from the
collectors of Internal Revenue officials
throughout the country, or from the
Bureau Of Internal Revenue of the
Treasury Department at Washington,
u. c. In case of failure on the part
of any one who is subject to the tax
to file the return by the first of March,
the law fixes a penalty OF so per cent
of the amount of the tax assessed and
so to 81 900 fine. In case of false or
fraudulent return there is penalty of
100 per cent. and $50 to $4,000 fine
and one years Imprisonment or both