The Aberdeen weekly. [volume] (Aberdeen, Miss.) 1878-1933, 1920-03-05
Gains for 1919 Must Be Figured
Under U. S. laW-ReturnS
Due March Is.
LAND SALE PROFITS TAXABLE.
Necessary Farm Expenses May Ne De-
aucted-Speeiai Form for Farm
fnesme-Cash Or Aceruai
Basis fer cemputina.

plus his other income was sufficient to
require an income tax return, = cont
plete return must be aled with the col
iector 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-
dueed 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. cuitivating. harvest
ing and marketing. In addition to
these costs he may deduct msney spent
for ordinary farm tools Of short life
bought during the year. such as SHOW
els, rakeS, etc. Also, the ceSt of feed
purchased for his live stock may be
treated as an expense, I'm So far as
this cost represents actual outlay but
the value of his own products fed to
animals is not a deductible item.
Other farm expenses all ,wable are
the cost Of minor repairs = buildings
(but not the dwelling hcuse) ,R fences.
wagons and farm machinery :sliso bills
paid for horseshoeing, stock powders,
rock salt, services of veterinary, insur-
ance Except on dwelling housed, case
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, canRet be
claimed against earnings. A farmer is
not allowed to claim a salary for him
work on the farm.
Wear and Tear.
Purchases of farm machinery, way
onS, work animals, etc, also the cost
Of construction or extension of build
ings, silos, fencing. etc, should be con-
sdered additional investments in the
farm and are nst 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, windmiils and other farm
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, de-
d~ -tie- for wear and tear is allowed.
Farm lsssss
The loss of 4 growing crop is not 4
proper deduction from income. mas
much as the value of the crop had not
been taken into gross iacome. The
loss of a building or Of machinery
through storm, lightning. food. etc. In
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 Asductibie 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 fer favorable market
prices cannot be deducted as loss, fer
the reason that when such products
are sold the shrinkage will be reflected
In the selling price.
Sale 81 Farms and Land.
The value Of agricultural lands has
been jumping during the past few
years. and during 1918 many owners
sold cut part or all Of their lands at big
profits. All such gains constitute In
come and must be taken ists the net
income for the year.
Any person who sol part of a farm
or ranch. or part Of q parcel sf land,
must also show any gains realized by
the sale.
The method Of figuring gains and
losses on such transactions is prescrib-
copies Of which may be secured from
Internal Revenue Collectors.
FERNS fer Returns
The Iaternal Revenue kwresu sas IS
sued an Improved Form 1o4eF fer the
use Of farmers. This form, together
with Fsrm 104oA or 1919. will give the
farmer explicit infcrnatieA NJ to how
to properly Agure his net income for
1919
There are two methods Of figuring q
farmers income tax return this year
He may make his return a the basis
Of the difference between the msney
and goeds received for his products
and the cash paid out for actual allow
able farm expenses within the year.
Or he may make his return ea the ac-
crual basis, which means computing
the receipts and expenses that pertain
to the taxable year. e.eiuding income
earned and expenses incurred In pre-
yiOus or succeeding years.