The true northerner. [volume] (Paw Paw, Mich.) 1855-1920, 1918-01-11

sonable per cent for wear and tear on
fences, machinery, farm Implements,
vehicles, barns and other buildings, but
not on the house he lives in. sci
The percentage Of depreciation is
computed on the life Of the property.
On frame barns and other substantial
wooden structures is allowed 3 per cent;
on cement, stone or brick buildings 2
per cent; on machinery. farm equip
ment sand fences about 10 per cent;
auto trucks and tractors about la to
Is per cent. The depreciation is fig
ured ON the original cost and the mum
Der Of years it will wear
He is allowed to take deductions for.
taxes paid and interest paid, but he
cannot take deductions for any pay
ments he may have made on the farm
mortgage Or on the notes given for
machinery. If the farmer is "rent-
err he, can deduct for the cash rent
he pays. The person who receives the
rent will report it as income in his
income tax return.
Losses by fire, storm or other casual.
ties, or theft may be deducted only
to the extent. that they are not covered
by insurance. Property destroyed by
order of the state may be claimed as a
loss for the difference between the re-
endorsement and the actual value.
Personal or living expenses cannot be
deducted as the personal exemption of
$4,000 for a married person or 81 900
for a single person is calculated for
that purpose.
sThere is a further allowance of 5000
for each dependent child under Is
years of age; but the father must in
clude as income in his return any
amounts such dependent children may
earn by working out If the wife
has any income separate or independent
of his. the husband must include it in
his report.
A single person who is the sole sup
port of one or more persons through
marriage ties, blood relationship or
adoption and whose hight to exercise
control is based on legal or moral
obligation is termed the "head Of a
family" and is entitled to the same ex,
emption of $4,000 as a married person.
Now, in order to arrive at his tax
liability, the farmer will deduct from
"gross income all the above items as
they apply to his case, together with
the personal exemption. The remain;
der or net income is the item on which
the normal tax is figured at the rate
of per cent. If his net income goes
above $4,000 another per cent is add
ed on the amount over that figure: At
$4,000 the superior additional-taxes
begin and increase in rate at various
| amounts as the income increases until
the man who has million dollar in.
come will pay super taxes up to 90
per cent.
If a farmer receiver interest from
mortgages, notes or bank deposits, profit
from a road job, income from some es
tate, rent for some house in town or for
land he is not working himself, royal
ties, or profit from the sale of piece
of real estate he must also include
such income in his report.
A person cultivating or operating a
farm as a "side line' or for recrea-
ton or experiment and on a basis other
than the recognized principles of com
mercial farming, the result of which
is a continual loss from year to year,
is not regarded as farmer. In such
cases, if the expenses incurred in con-
nection with the farm are in excess of
the receipts therefrom, the entire re-
ceipts from sale of products may be
| ignored in rendering return Of in
come, and the expenses incurred being
regarded as personal expenses, will not
constitute allowable deductions in the
return of income derived from other
| sources. 80
So -t