The Wahpeton times. [volume] (Wahpeton, Richland County, Dakota [N.D.]) 1879-1919, 1918-02-07


ing the farm should place a fair
value on same Of March. 1, 1917,
and add all amounts spent for
permanent improvements and the
deduct all depreciation previously
claimed. Deducting the net re.
suit from the selling price gives
the profit to be reported " the in
come tax return.
An interested taxpayer Of Oil
the, Kas., writes: Please define a |
reasonable reduction per cent OH
income that merchant would be
allowed on goods. Is farmer al
lowed for fertilizer used, also clov-
er seed used in order to keep up
fertility of soil? Where farmer
does not employ much hired labor,
is he allowed for his labor? What
is a reasonable depreciation Of
rental of buildings? In arriving
at an income of farmer does It
mean the production of a season or
from January l, 1917, to January
l, 1918?
A merchant is not allowed to
deduct depreciation on goods as
the depreciation is automatically
reflected in the inventory during
the year in which the goods are
sold.
A farmer is allowed to deduct
expense of fertilizing and seeding
to keep up the fertility Of the
soil.
A farmer cannot deduct as an
expense his won labor. Should he
be permitted to do so that he would
be required to include in his in
come like amount.
The department in Washington
will not fix an arbitrary rate to
cover a reasonable depreciation OH
rented buildings. A person must
figure the Govt cf the rented build
ings, the estimated life and the
construction. Where money is ex-
pended for the ordinary upkeep of
rented buildings, the deprecia-
ton is reduced.
The income of farmer is based
on the business Of the calendar
year.
j. r. II. of Gre4t Bend has two
motor cars-one a pleasure car and
the other he designates his freight
car" His freight car is used ex-
clusively in hauling supplies and
machinery from his farms. He
asks if he may deduct his expens-
es-such as repairs, gas, oil, re-
placement Of tires, etc.-of his
'freight" car in his income tax
return.
He buys mules to work on his
farm and gets about ten years
service out of them. Can he charge
off onc-tcnth of the original in
vestment of these mules each yea"
to expense?
Answer:
The expenses of his freight "
car, such as he cnumcratcs, are
certainly necessary expenses in
his business and proper dcduc-
lions. I do think the government
would not object to charging off
one-tenth each year on the mules.
However, should the mules be old
after ten years service, the entire
sale price would be reported as in
come the year in which sold. II
the mules lasted more than ten
years he would not charge off any
thing on them after the tenth year.
P. of Home City, Kas., desires
to know if farmer figures in
come tax on the amount of stuff he
sells during 1917. Is there a de-
duction of 5000 figured on the
amount of products consumed, that
is, taken from the exemption Of
$2,O0O3 If he sells over $4,000,
but is exempt, does he have to
make his report to the collector7
Answer:
All grain, stock and other pro-
ducts sold during 1917 should be
reported as income In his tax re-
turn, regardless Of when same was
raised. He should then deduct as
expenses all money paid by hi.
in 1917 for labor in preparing and
fn,. cron and the cultivation harv-