The commercial. (Union City, Tenn.) 190?-193?, 1920-03-12
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-
dueted-speelal Form for Farm
Ineome-cash or Aeerual
Basis for Computing.

A farmer, shopkeeper, or tradesman
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, COM
plete return must be filed with the col
lector of 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 farmer is
allowed to charge Off all of his neces-
snry 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 SHOW
els, rakes, etc. Also, the cost of feed
purchased for his live stock may be
treated as an expense, in so far as
this cost represents 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-
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-
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, in such Gases, de-
duction for wear and tear is allowed.
Farm Losses.
The loss of growing crop is not
proper deduction from income, mas
DIS llc value VI LhC NAOP Aou ~iVh
been taken into gross income. The
loss of a 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 income tax
regulations.
No deduction Is allowed In the case
of loss of animals raised on the farm,
but a 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 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, 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 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 from
Internal Revenue Collectors.