New Ulm review. (New Ulm, Brown County, Minn.) 1892-1961, 1918-02-27
ceiling price is the amount to be reported

If you purchased the property on or
after March l, 1918, the difference be-
tween it's cost, plus all amounts sub
sequently expended for permanent i'm
provements less depreciation previously
claimed, and its selling price, is to be
returned.
| If the property came to you on or
after March /, 1918, as an inheritance,
the difference between the appraised
value placed upon. it at that time plus
all amounts subsequently expended for
permanent improvements less deprecia-
tion previously claimed, and its selling
price, is to be returned.
When is a farmer to return for tax
purposea the value of crops and
stocks produced?
The value of grain, stock, and other
products produced on a farm is not con-
sidered taxable income until reduced to
cash or the equivalent of cash. There
fores if crops and stock were produced
in 1916 on farm owned by you and they
were sold in 1917, the total amount re-
ceived therefor is to be included under
"Gross income" in your 1917 return.
Crops and stock produced in 1917, and
on hand December 81 of that year, need
not be considered; but the amount re-
ceived therefor should be included in
your return rendered for the year during
which they are sold.
Is farmer required to report the
value of the farm produce which is
consumed by himself and family?
No; but any amount OF expense in
cured in producing garden truck, or
other products so consumed, can not
be claimed as deduction.
If farmer exchanges produce for
merchandise, groceries, ETC., is the
value of such merchandise to be re-
turned for tax purposes?
Yes; the price placed by the merchant
upon the goods exchanged for farm pro-
duce is to be included as income in the
farmers return.
What method should merchant
adopt to ascertain the amount of
gain or profit which is to be reported
under gross income?
Any individual who conducts grocery,
dry goods, clothing, or unemployment
business or any other business which re-
quires that a stock be carried should
take an inventory at the close of each
calendar year. To tie total, of his in
ventory taken at the beginning of the
year for which the return is to, be rendered
should be added the cost of all goods
purchased during that year, and the
difference between the amount thus OBJ
tanned and the total of his inventory
taken at the close of the tax year, plus
his total gross receipts, is the amount
to be reported under "Gross income :"
Gross receipts should not be reported
under "Gross income and the cost of
the goods purchas ed claimed as a de-
duction.
l have two children who live at
home and are regularly employed.
One is II years old; the other, Fl
years old. Am l required to include
the amount of income which accrues
to each during calendar year in my
own personal return?
AS the first child has not reached it's
majority and is still legally under your
control, the amount of its income is to
be included in your personal return and
is subject to tax in your hands. The in
come of the child which has attained it's
majority is not to be included in your
return and is only subject to tax in the
hands of that child.
Must l include in my personal
return the amount of interest l re-
ceive on Liberty Loan bonds, or is
that interest exempt from tax?
All interest derived from the Liberty
Loan 3 IL per cent bonds issued under
the act Of April "a, 1917, is exempt
from both the normal and additional in
come tax,
Are amounts placed to the credit
of 6. -r2holder in building and
loan association subject to income
tax?
Any amount credited to shareholder
when TIE title to such credit passes to
the latter at the time of the credit has a
taxable status for the normal and adj
ditional income tax and should be in
cluded in the return rendered for the year
during which the credit is made. <.
Where the amount of accumulations
credited does not become available to
the shareholder until the maturity of a
share it need not be reported as income,
but upon maturity of the share the
amount received in excess of the total
amount actually paid in by the share
holder is to be returned.
What constitutes an item allow
able as deduction under the head
Business expenses? ..---
All amounts OF expenses actually paid
during the tax year in the conduct OF a
business, trade, or profession.
This includes all amounts actually
paid by a farmer for labor in preparing
his. land for a crop and the cultivation,
harvesting, and marketing Of the crop;
the cost of the seed and fertilizer used;
the amounts expended for labor used
in caring for live stock and the cost of
the feed; the cost of stock purchased
| for the purpose of resale. Ut should be
understood, however, that if such cost
is claimed as deduction, the entire
proceeds received upon sale of the
stock is to be returned as mooney The
amounts actually paid in making repairs
to farm buildings, but not the dwelling
house; repairs to fences: farm machinery
etc.; the cost of materials for Immediate
use and farm tools which are used up in
the course of year or two, such as bind
ing Irvine, stock powders, pitchforks,
spades, etc.; and the amount of rent
paid for farm may also be claimed. The
amounts paid for live stock which is to
be used for breeding purposes are held
to represent investment of capital and