The spectator., 1920-03-02
Gains for 1919 Must De Figured Under U. s. laW--Returny
 Due March IS.
LAND SALE PROFITS TAXABLE.
Necessary Farm ExpeAsss May Sc oeducted-Speeiai Fsrm fer Farm income--Cash s~ Aoesvat
 Basls Ses Computing

and k the farm or business income plus his ssnsr Income vas sufficient to sequ4se an iseoms tax return a com Dasts retura nast be filed with the col leetsr of internal revenue by March 15.
 A farmer should ascertain the gross iAcsae of hls farm by computing all gaias derived from the safe or ex- change of his products, whether pro duceA ss the farm CT purchased and rsselA
 Fa~ 9xpenses.
 From ais gross income a farmer is allowed to charge of all of his nsces- sary expenses is the conduct of the farm during the year These include costs of planting, cultivsting, harvest ing and marketing. Tn addition ts these costs he may deduct money spent fos ordinary farm tools of short life bought during the year, such as show els, rakes, etc Also, the cost of feed purchased fer his live stock may be treated as an expense In 90 far as this cost represents actual outlay, but the value of his own products fed ts sni- msls Is not . deduetfble iten
 Other farm expenses allowable are the cost of minor repairs sn buildings Out not the dwelling house), on fences, wagons and farm machinery also bills paid for hcrseshoeing, 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, ss in tree planting, ditching. etc, cannot he claimed against earnings. A farmer Is not allowed to claim q salary for him self or members of his family who work on the farm.
 Wear and Year
 Purchase ef farm machinery, wag- ons. work animals, etc, also the cost of construction or extension of build lngs silos, tencing 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, wsg- ons. tanks, windmills and other farm equipment which is used in the con duct of the farm
 AS to autos and tractors, the cost sf these Is not an expense, although the cost of their upkeep is sn allowable deduction, If the machines are used ey- clusively for farm purposes and not for pleasure. Also. in such cases, a de. iuction for wear and tear Is allowed
 Farm Losses.
 The loss of a growing crop is nor proper deduction from income, mas. much as the value of the crop had noy 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 ts 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 deductibie from gross in. come If the animals had been pur chased for draft or breeding purposes
 ShrinLage in weight or value of farm products held for favorable market prices cannot be deducted as d 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 sod 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 farm or ranch, or part of parcel of land, must also show any gains realized by he sale.
 The method of figuring gains and losses on such transactions is pre- scribed 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 l04oF for the use of farmers This form, to- gether with Form l040A or 10i0, 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 cash paid out for actual allow able farm expenses within the year. Or he may make his return on the ac- crual basis, which means computing the receipts and expenses that pertain to the taxable year, excluding income earned and expenses incurred in pre-