The St. Charles herald. [volume] (Hahnville, La.) 1873-1993, 1920-03-06
FARMERS iSi..9g( s ii.
SUBJECT TO TAX
Gains for 1919 Must Be figured
Under U. s. laW-Rctlrns
Due March IS.
LAND SALE PROFITS TAXABLE
Necessary Farm Expenses May Be
Deducted-Special Form for Farm
income-cash or Accrual
Basis for Computing.
LAND SALE PROFITS TAXABLE

A farmer, shopk eeper, or tradesmen
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 u COM
plete return must be filed with the col
iector 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 tie 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, 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 MS 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 ami
mails is not a Gadu"tible item.
Other farm expenses allowable are
the cost Of minor repairs on buildings
ibut not tie dwelling I!ouSe), on fences,
wagons and farm machinery also bills
paid for horsesloeing. stock powders
rock salt. services Of veterinary, insur-
ance Except on dwelling h0use), gaso-
line for operating power and sundry
other expenses which We're paid for In
cash.
AS to hired help, all the productive
labor is a deductibie expense; but the
wages of household servants, or help
hired to improve the farm, as in tree
planting, tiitch.ng, 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.
Purchase 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 he
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 cases, a de-
duction for wear and tear is allowed.
Farm Losses.
The loss of a growing crop Is not q
proper deduction from income, mas
much as the value of the crop had not
been taken into gross income The
loss of building or Of machinery
storm. lightning, flood etc, il
an allowable deduction, hut 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 rnised on the farm,
but loss is deductibie from gross in
come if the animals had been pur-
chased for draft or breeding purposes.
Shrinkage in weight or value Of farm
products held for favorable marke,
prices cannot be deducted as n loss. for
the reason that when such products
are sold the shrinkage will be reelected
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
Income and must be taken into the net
income for the year.
Any person who sold part Of a 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 IL pre-
scriIjed in the Income Tax regulations,
copies of which may be secured from
Internal Revenue Collectors.
Forms for Returns.
The Internal Revenue Bureau has
issued an improved Form 104OF for
the use of farmers. This form, to-
sether with Form 104OA or 1910, will
give the farmer explicit information
IS to how to properly figure his net
income for 1913.
There are two methods OF fignring q
'armers income tax return this year
He may make his return on the basis
II the difference between the money
md goods received for his products
md the cash paid out for actual allow
lble farm expenses within the year.
DR. he may make his return on the &C.
crual basis, which means computing
he receipts and expenses that pertain
% the taxable year, excluding income
n T.