The Lynden tribune. [volume] (Lynden, Wash.) 1908-current, 1920-11-18
GIVES LYNDEN MEN
FACTS ABOUT TAXES
Arthur Il. Culmer. District Federal
Collector, Advises Farmers About
Income Returns

VINO mas cnaf3o or the collection o
Income tax retuvra for the Lynde,
district, is anxious to assist the loca
farmers in submitting their tax ,e
turns.
He sent out today the following in
formation for ii ~ benefit:
Much difficulty is experienced ir
determining the income, subject tt
income tax, due from the ayerag &c
farmer, because of the fact that in
most cases few il any accounts are
kept of receipts and expenses. The
income tax regulation requires that
records of some sort be kept of all
business from which income is de-
rived and the operating of a farm is
business in every sense Of the word
The fact that expense accounts are
not kept by the average farmer re-
fleets against him in dollars and cents
for when he is called upon to file an
income tax return, if he cannot show
record of his expenses they cannot
be allowed and as result he pro-
badly pays more tax than he would
if he could produce an accurate ac-
count of his statutory deductions.
A closer check is to be kept on the
farmers of this district for income
tax purposes and a complete canvas
Is soon to start to discover deiin-
quents for the years 1918 and 1919
and when such delinquents are found
severe penalties are assessed in ad-
dition to the tax itself. especially
when it was found there was wilful
evasion of the tax.
This department receives from the
Condenseries. creameries, dairies and
commission houses reports of the
amount of farm. dairy or poultry pro-
duce purchased from the producer
and thus knows to a great extent the
farmers income, but it is up to the
farmer himself to produce record
of his statutory deductions.
The income tax law provides that
every citizen of the United States
and every resident alien is liable
to income tax and that every married
person whose net income is $4,000
or more and every single person
whose net income is $1,000 or more.
must file a return regardless of what
his personal exemptions might be.
All gains. profits and income de-
rived from the sale or exchanges of
farm or purchased and resold, shall
be included in the return of income
for the year in which the products
were actually mark eted and sold, un-
less an inventory is used. In case of
the sale of machinery. and of animals
purchased as draft or work animals
or solely for breeding purposes and
not for resale, any excess over the
cost thereof reduced by all sums
heretofore deducted for depreciation
shall be included as gross income in
preparing the taxpayers return.
Where farm produce is exchanged
for merchandise, groceries or mill
products, the market value OF the ar
ticle or product received in exchange
Is to be returned as Of the year in
which the crop shares are reduced
to money or a money equivalont. II
a farmer is engaged in producing
crops which take more than year
from the time of planting 70 the time
OF gathering and dieposing. the in
come therefrom may be computed up
on the crop basis. but in any such
cuse the entire cost of producing the
crop must be taken as a deduction in
the year in which the gross income
from the crop is realized. When live
stock purchased is sold, its cost is
to be deducted from the sales price
in ascertaining the amount Of gain
or profit to be returned for tax pur-
poses. If, however, an inventory is
used, the cost price Of the article
sold must not be taken as an nddi-
tional deduction in the return OF in
come, as such cost price Will be re-
flected in the inventory. AS herein
used the term farm" embraces the
farm in the ordinarily adopted sense,
and includes stock, dairy, poultry,
fruit and truck farms, also planta-
tions, ranches and all land used FOR
farming operations. All individuals,
nartnerships or corporations that cul-
tivate. operate or manage farms for
gain or profit. either as owners or
tenants, are designated farmers.
Net Income. means gross income
less statutory deductions, such as
feed purchased, labor, rent taxes
seed. insurance, breeding fees. vet
erinary fees, interest, bags and crates
expense of truck and tractors, etc.
As stated above complete can
vas of this district is to be made Tor
delinuuent taxpayers covering the