The Prescott daily news., 1920-02-25
FARMERS INCOME SUBJECT TO TAX Gains for 1919 Must Be Figured Under U. s. LaW-ReturnS
 Due March 15. LAND SALE PROFITS TAXABLE. Necessary Farm Expenses May Be Deducted-Special Form for Farm
 lncome-cash or Accrual
 Basis for Computing.
LAND SALE PROFITS TAXABLE.

A farmer, shopkeeper, or tradesman 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 a com plete return must be filed with the col lector of internal revenue by March 15.
 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 ami mals is not a deductible 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 horseshoeing, 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, 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.
 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.
 4 reasonable allowance may be 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, de duction for wear and tear is allowed
 Farm Losses.
 The loss of growing crop is not a proper deduction from income, inas- much as the value of the crop had not been taken into gross income. The loss of buildinge or of machinery through storm, lightning, flood, etc, is an allowable deduction, but care should be used to ascertain the correct loss sustained, as restricted by income tax regulations
 No dedaction is allowed in iiso case of loss ft ul.iaais sa'sed oa ite fai1n, but loss K dedtpt.be from grosS in cor /. se ..aa.s hal Jsa nrr-