The Raymer enterprise., 1920-03-04
FARMERS INCOME.
SUBJECT TO TAX
Gains for 1919 Must Be Figured
Under U. S. LaW-Returns
Due March IS.
LAND SALE PROFITS TAXABLE.
Necessary Farm Expenses May Be De.
ducted-special Form for Farm
lncome-cash or AccruaI
Basis for Computing.

A farmer, shopkeeper, or tradssman
must hgure up his net income for 1919 /;
and II the farm or business income
Plus his other income was sufficient to
require an. income tax return, a COM
plete return must be filed with the col
lector of internal revenue by March Is.
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 a 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, cultlvating, 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 for his live stock may bel
treated as an expense, In SO far as
this cost represents actual outlay; butt
the value of his own products fed to|
animals Is not a deductible item.
Other farm expenses allowable are1
the cost of 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 insur-
ance Except on dwelling house), gaso-
limo for operating power und sundry|
other expenses which were paid for In|
cash.
AS to hired help, all the productive
labor is a deductlbe expense; but the
wages of household servants, or help
hired to improve the farm as In tree
planting, ditching, etc, cannot bel
against earnings. A farmer Is /
not allowed to claim salary for him
self or members of his family who
work on the farm.
Wear and Tear.
Purchases of farm machinery, wag-
ons, work animals, etc, also the cost
Of construction or extension of build
Ings, silos, fencing, etc, should be con.
sidered additional investments In the
farm and are not proper deductions
against income.
A reasonable allowance may be
claimed for wear and tear on farm
buildings Except the farmhouse),
fences, machinery, work animals, wag-
Dns, tanks, windmills and other farm
equipment which is used In the COZ
duet of the farm.
As to autos and tractors, the cost Of
these Is not an expense, although the
cost OF their upkeep is an allowable
deduction, II the machines are used ex-
clusively for farm purposes and not
for pleasure. Also, in such cases, de-
iuction for wear and tear Is allowed.
Farm Losses.
The loss Of growing crop is not a
proper deduction from income, inas.
much as the value of the crop had sol
been taken into gross income. The
loss of building or Of machinery
through storm, lightning, food. etc, is
M allowable deduction, but care should
be used to ascertain the correct loss
sustained, as restricted by income tax
No deduction Is allowed In the case
Of loss OF animals raised on the farm,
but loss is deductible from gross in
come If the animals had been pur-
chased for draft or breeding purposes.
Shrlnkage In weight or value of farm
products held for favorable market
prices cannot be deducted as loss, for
the reason that when such products
are sold the shrlnkage 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, and during 1919 many owners
sold out part or all of their lands at big
profits. All such gains constitute In
come and must be taken into the net
income for the wear.
Any person who sol 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.
The Internal Revenue Bureau has Is
sued an improved Form 1040F for the
use Of farmers. This form, together