The Miller press. [volume] (Miller, S.D.) 190?-current, 1920-02-26

I1lSt ngure up his net income for 1919
and IL the farm or business income
plus his other income was sufficient TO
require an income tax return, a com
plete return must be filed with the col
lector 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-
duced on the 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 as shov-
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 a d~eductible 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 ho~rseshoeing, stock powders,
rock salt, services of veterinary, insur-
ance Except on dwelling house), gaso-
line for operating power and supdry
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 tine 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
ifigs, silos, fencing. ETC., should be con
sidered additional investments in the
farm and are o proper deductions
against income.
A reasonable allowance may be
claimed for wear and teal on farm
buildings Except the farmhou-e),
fanoas maabfnarv worL apipnoIc N
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 unkeen Is az allowable
deduction, If the machines are used ex-
clusively for farm purposes and not
for pleasure. Also, in such cases. a de-
dpction for wear and tear is allowed.
Farm Losses.
The loss of a growing crop Is not a
deduction from income, mas
much as the value of the crop had not
been taken into gross income. The
loss of a building or of machinery
through storm, lightning, flood, etc. is
allowable deduction, but are should
be used to ascertain the correct loss
sustained, as restricted by income tax
No deduction is allowed in the case
of loss OF animals raised on the farm,
but a loss is deductible from gross in
II the animals had been pur-
for draft or breeding purposes.
Shrlnkage In weight or value OF farm
products held for favorable market
prices cannot be deducted as a loss, for
the reason that when such products
are sold tine shrinkage will be reflected
in the selling price.
Sale OF Farms and Land.
The value OF agricultural lands has
jumping during the past few
vars, and during 1919 many owners
sold out part or all of their lands at big
profits. All such gains constitute in.
come and must he taken into the net
Income for the year.
Any person who sol part of a farm
or ranch. or part of a parcel of land,
must also show n 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.
Forms for Returns.
The Internal Revenue Bureau has is
SUED an improved Form 1040F for the
use Of farmers. This form, together
with Form lO40A or 1040. win give the
farmer explicit information as to how
TO properly fisire his net income for
1919
There are two methods Of figuring q
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 nc
crual basis, which computing
the receipts and expenses that pertain
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