The Brookings register. [volume] (Brookings, Brookings County, S.D.) 1903-1971, 1918-01-31
MANT0
HELP TAXPAYERS
GOVERNMENT AGENT IS NOW IN
BROOkiNGS TO HELP FARM
ERS WITH SCHEDULES.
LAW IS TO Be ExPLA|NO At MEETINGS
Careful Attention To Making Returns
Complete Will Save Later
Worry.

The following summary Of a Treas
ury decision regarding the income
taxes of farmers was furnished the
De Smet Independent by the deputy
collector now working in that county,
and we reproduce it for the benefit OF
our farmer readers in this county.
The term farm" is taken to embrace
the farm in the ordinary accepted
sense, including plantations, ranches.
stock farms, truck farms, and all lands
used for similar purposes; and all per.
sons who operate such farms for gain
or profit. whether as owners or tenants
are farmers.
All gains profits and income derived
from the sale or exchange Of farm pro-
ducts, whether produced on the farm
or purchased and resold by a farmer,
shall be included in the return Of IN
come for the year in which the pro-
ducts were actually marketed and sold;
and all allowable deductions, including
the legitimate expenses incident to the
production of that year or future years
may be claimed in the return of income
for the tax year in which the right to
such deduction shall arise, alth ugh
the products to which such expenses
and deductions are Incidental may not
have been sold or exchanged for
money, or a money equivalent, during
the year for which the return is rem
dered.
Rents received in crop shares shall
likewise be returned as of the year in
which the r shares are reduced to
money or a money equivalent, and al
lowable deductions, likewise, shall be
claimed in the return Of income for
the year to which they apply, although
expenses and deductions may be Incl
dent to products which remained un-
sold at the end Of the year for which
the deductions are claimed.
When farm products are held for
favorable market prices, no deduction
on account of shrinkage in weight or
physical value, OF loss by reason Of
such shrinkage or deterioration in
storage shall be allowed.
Cost of stock purchased for resale
is an allowable deduction under the
item of expense, but money expended
for stock for breeding purposes Is re-
garded as capital invested, and
tute allowable deductions except as
hereinafter stated.
Where stock has been purchased for
any purpose, and afterwards dies from
disease or injury, or is killed by order
Of the authorities Of the State or the
United States and the cost thereof has
not been claimed as an item of ex-
pense. the actual purchase price of
such stock, less any depreciation which
may "a been previously claimed,
may be deducted as a loss. Property
destroyed by order of the authorities
of a State or the United States may,
in like manner, be claimed as a loss;
but if reimbursement is made by a
State or the United States, in whole or
in part, on account of stock killed Or
property destroyed, the amount receiv-
ed shall be reported as income for the
year in which reimbursement was
made.
The cost of farm machinery is not
allowable deduction as an item of ex.
pense. but the cost Of ordinary tools
may be included under this item.
Under the sixth de 'uction enumer-
ated in paragraph B. providing for a
reasonable allowance for the exhaus
ton, wear and tear of property arising
out of it's use or employment, there
may be claimed a reasonable allow
ance for depreciation on farm build
ings (other than a dwelling occupied
other physical property, including
stock purchased for breeding purposes
but no claim for depreciation on
stock raised or purchased for resale
will be allowed.
Farmers who keep books according
to some approved method of account
ing may prepare their returns from
such books, although the method of
accounting may not be strictly in &C.
%cordance with the provisions of this
decision.
A person operating a farm for rec
~reation or pleasure Is not regarded as
Continued on Pare 1O)