The citizen-Republican. (Scotland, Bon Homme County, S.D.) 1???-19??, 1920-03-04
FARMERS INCOME.
SUBJECT TO TAX
Gains for 1919 i.lust Be Figured
Under U. S. LaW-Returns
Due March Is.
LAND SALE PROFITS TAXABLE.
Necessary Farm Exp ,nses May Be De.
ducted-special Form for Farm
Ineome-cash or Accrual
Basis for Computing. =
AND SALE PROFITS TAXABLE.

a iaitileI, slloIkeeper or traueSlnHr
must figure up his net income for 1919:
and If the farm or business income
plus his other income was sufficient to
require an income tax return. a com
plete return must he filed with the col
!ector of internal revenue Ivy March 15
A farmer Should ascertain the gross
income of his farm by computing all
gains derived from the sale or ex.
change of his products, whether pro,
duced on the farm or purchased and
resold
Farm Expenses.
From his gross income farmer Is
allowed to charge off all of his neces-
sary expenses IN the conduct of the
farm during the year. These include
costs of planting, cultivating, harvest
ing and marketing. In addition to
these costs he may deduct money spent
for ordinary farm tools of short life
bought during the year, such as shov-
els rakes, etc. Also, the cost of feed
purchased 70" his live stock may be
treated is an expense, in SO far Us
this cost represents actual outlay; but
T. the. value of his own products fed to
animals is not a deductibe item.
Other farm expenses allowable are
the cost f.minor repairs on buildings
(but not the dwelling house), on fences,
wagons and farm machinery also bills
paid for -horseshoeing, stock powders,
rock salt, services of veterinary, ins,lr-
ance Except on dwelling house), gaso-
line for operating power and sundry
other expenses which were paid for in
cash.
AS to hired help, all the productive
labor is a deductible expense; but the
wages of household servants, or help
hired to improve the farm, as in tree
planting, ditching, etc, cannot be
claimed against, earnings A farmer is
not allowed to claim salary for him.
self or members of his family who
work on the farm.
s Wear and Tear.
Purchases Of farm machinery, wag-
onsI work animals, etc. also the cost
Of construction or extensIon of build.
ings, silos, fencing, ETC., should be con-
sidered additional investments in-tle
|
against income.
A reasonable allowance may be
claimed for wear and tear on farm
buildings Except the farmhpuse),
fences, machinery, work animals WAC.
ons, tanks, windmills and other farm
equipment which is used in the cor
duct of the farm.
AS to autos and tractors, the cost of
these is not an expense, although the
! cost of their upkeer Is an allowable
deduction, if the machines are used cX-
clusiyeiy Tor farm purposes ana not
for pleasure. Also, in such cases. a de-
duction for wear and tear is allowed.
Farm Losses.
The loss Of a growing crop is not
proper deduction from income, mas
much as tho value Of the crop had lot
been taken into gross income. The
loss of building or of machinery
through storm, lightning, flood, ETC., is
an allowable deduction, but care should
be used to ascertain the correct loss
sustained, as restricted by inceme tax
regulations
No deduction Is allowed in the case
Il
but loss is deductible from gross in
come il the animals had been pur-
chased for draft or breeding purposes.
Shrnkage in weight or value of farm
products held for favorable market
prices cannot be deducted as a loss for
the reason that when such products
are sold the shrinkage will be reflected
in the selling price.
Sale Of Farms and Land.
The value of agricultural lands has
been jumping during the past few
years, ard during 1919 many owners
\ sold put part or all of their lands at big
profits. All such gains constitute In
: come and must be taken into the net
L income for the year.
i Any person who soil part of farm
or ranch, or part OF parcel OF land,
must also show any gains realized by
|, the sale.
The method of figuring gains and
losses on such transactions is prescrib-
! ed in the Income Tax regulations,
|. copies of which may be secured from
. Internal Revenue Collectors.
Forms for Returns.
5 i Lit 1utcIudt INStCuuC bureau mas IS
i sued an improved Form 104OF for the
: use of farmers This form, together
8 with Form iU4uA or 1u41, will give the
| farmer explicit information as to how
. to properly figure his net income for
: 1919.
~ There are two methods OF figuring
"a farmers income tax return this year.
He may make his return on the basis
of the difference between the money
! and goods received for his products
!, and the casl natd out for actual allow.
] able farm expenses within. the year.
= Or. he se4 his return oa the ac--
crual 6Hsis, which means computing
!. the. receipts md expenses that pertain
TO the taxable year, Excluding income
tarLsed and expenses incurred N nv
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