The Clio messenger. (Clio, Mich.) 1907-current, 1920-03-11
Gairc for 1919 Must Be Figured
Under u. S. laW-ReturnS
Due March Is.
LAND SALE PROFITS TAXABLE.
Necessary Farm Expenses May Be De-
ducted-Specal Form for Farm
lncon,e-cash CT Acerual
Basis for Computing.

A farmer, shopkeeper, or tradesman
mist figure mp his net income for 1919;
and II the farm or business income
plus his other income was sufficient TO
require an income tax return, COM
plete return must he filed with the col
lectOr or internal revenue by March 10.
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 of 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 az SHOW
els, rakes, etc. Also, the cost OF feed
purchased for his live stock may be
treated rs an expense, I'm so far as
this cost t.presents actual outlay; but
the value of his own products fed TO
animals is not deductible item.
Other farm expenses allowable are
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.
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 a salary for him
self or members Of his family who
work on the farm.
Wear and Tear.
Purchases of farm machinery, wag-
ol x, 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.
reasonable allowance may be
claimed for wear and tear on farm
buildings Except the farmhouse).
fences, machinery, work animals, wag-
ons, tanks, windmills and other farm
equipment which is used in the con.
duct 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, If the machines are used ex-
clusively for farm purposes and not
for pleasure. Also, i'm such cases, de-
duction for wear and tear is allowed.
Farm Losses.
The loss OF growing crop Is not
proper deduction from income. mas
much as the value OF the crop had lot
been taken into gross income. The
loss of Il building or of machinery
through storm, lightning, flood, etc, Is
an allowable deduction. but care should
he used to ascertain the correct loss
sustained. as restricted by income tax
regulations.
No deduction is allowed in the case
OF loss OF animals raised on the farm,
but loss is deductible from gross In
come IL the animals had been pur-
chased for draft or breeding purposes.
Shrinkage 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 bis
profits All such gains constitute In
come and must be taken into the net
income for the year.
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 fron
Internal Revenue Collectors.
Forms for Returns.
The Internal Revenue Bureau has is
sued an improved Form 1oi0F for the
use of farmers. This form, together
with Form 104OA or 1040, will give the
farmer explicit information as to how
to properly figure his net income fol
1910