Highland recorder. (Monterey, Highland County, Va.) 1877-1972, 1920-03-12
fARNE:R'S INCOME:
SUBJECT 1 TO TAX
Gains for 1919 Must Be Figured
Under U. s. Law-Returns
Due March rs.
LAND SALE: PROFITS TAXABLE.
Necessary Farm Expenses May Be
Dcducted-speciaI Form for Farm
ln.omc-css., or AccruaI
cars for Computing.

~.
caas for Computing.
i A farmer, shopkeeper, or tradesman
must figure up his net income for19i9;
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 bysMarch 10.
A farmer should ascertain the gross
income Of his farm by computing all
gains derived from the sale or en-,
change of his products, whether pro-
rtluced OH the farm or purchased and
resold. -,
Farm Expenses
From his gross income 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, cuItivating, harvest
ing and marketing. LII 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 ami
mails issnot deductible item.
Other farm expenses allowable are
the cost of minor repairs on buildings
(but not-the dwelling house), OH fences,
wagons and farm machinery; also bills
paid for, horseshoeing, stock powders.
rock SALT. services veterinary, insur-
ance Except ON dwelling house), gasO-
line for operating power and sundry
other expenses which were paid for III
cash.
AS to hired help, ali the productive
labor is deductible expense; but The
wages of household servants, or help
hired TO improve the farm, as in tree
planting, lditclling, ETC.. cannot BIZ
claimed against earnings. A farmer is
not allowed to claim Il salary for HIM
self or members of his family who
work on the farm. -"
Wear and Tear.
Purchase of farm machinery, wag-
ons, work aQimals, 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
gainstncome.
A reasonable. allowance may be
claimed for Wear and tear OH 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, de-
duction for wear and tear is allowed.
Farm Losses.
The loss of Il growing crop Is not
proper 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, food. 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 OH 1Ie farm,
but Joss is deductible 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 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. s:< y.
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 Il 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 OH such transactions is pre-
scrbed 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 i040F for
the use cr farmers. This form, to-
gether with Form 10l0A or 1910, will
give the farmer explicit information
as to Low to properly figure his net
income for 1918.
There are two methods Of figuring
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-
vious or succeeding Years.