Montgomery County sentinel. [volume] (Rockville, Md.) 1855-1974, 1918-02-15

The amount spent in repairs on any
machine or building should be subtracted
from the depreciation allowed for it before
entry is made for the latter.
Losses" provide for deductions for losses
not covered by insurance. If livestock dies
of disease or injury or is killed by the
order of the health authorities, the actual
cost of the livestock may be deducted as
loss. Right here is a peculiar feature
of the law. namely. that only the value of
livestock that has been purchased and
afterward dies can be deducted. No de-
duction can be made on account of loss of
livestock raised on the farm. Deduction
cannot be made for shrinkage in weight
or value of products held for market. Only
losses actually incurred, not in any way
covered by repairs mentioned elsewhere.
can be deducted. Losses not actually
experienced, such as the decrease in
value of land due to some outside influ-
ence, cannot be deducted.
"Other Expenses" is the last heading for
deductions. and may include items not
properly falling into any of the divisions
above.
The total expenses are then deducted
from the total cash received, and the re-
suit is the net income from the farm.
The last line in Block B provides for a
statement of the nature of the property.
Under Construction of Buildings enter
frame. brick. stone." etc. Then enter the
cost when new and the cost of the farm
equipment, machinery, tools. etc.
II farm or any personal property has
been sold during the year. entry must be
made in Block c. The cost must be the
actual cost or fair estimate Of the value
on March 1. 1918. If owned before that
time. plus repairs. less depreciation.
II an owner rents farm. the entry must
be made in Block d. A cash rent propo-
sition is simple. but share rental must
show the actual values of the shares re-
ceived and sold with deductions for repairs.
your share of all seeds. fertilizers, etc.,
summarized in total.
Under General Deductions" Block G.
on Form 1040A, should be entered interest
paid on Indebtedness such as mortgages.
bonds. notes and accounts. Note that in
terest incurred in the purchase of any
United States Bonds. Federal Farm Loan
Bonds, or the bonds of any State or politi-
cal subdivision. cannot be deducted.
Under Taxes" include all taxes paid
on the farm. personal property and also on
the farm dwelling. The exceptions here
are taxes assessed for loca improvements,
such as roads. streets, sewers, and so forth |;
also inheritance taxes and Federal income
taxes.
Deductions may be made for contribu-
tons to certain purposes, which, for most
farmers, will include the church. grange.
farmers associations for agricultural i'm
provement, and so forth. provided the
amount does not exceed fifteen per cent.
Of the taxpayers total net income.
In fairness to farmers the collector will
be lenent this year and anyone who makes
an obviously honest effort to make COM
plete and correct return need have no
fears. 1t is only those who try to misrep-
resent their incomes who should beware.
Another year. however, there will be less
excuse for error. Now is the time to begin
to prepare the report for 1918 by starting
a complete set of farm accounts. The
basis for this system is already available
in printed form in Farmers Bulletin No.
66l, entitled "A Method of Analysing the
Farm Business"