The Logan Republican. [volume] (Logan, Utah) 1902-1924, 1920-03-09
FARMERS INCOME
SUBJECT TO TAX
Gains for 1919 Must Be Figured
Under U. S. LaW-ReturnS
Due March Is.
LAND SALE PROFITS TAXABLE.
Necessary Farm Expenses May Be
peducted--special Form for Farm
Income-Cash or Accrual
Basis for Computing.

A farmer shOpkeeper, or tradesman
must figure 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 COM
plete return must be filed with the col
lector OF Internal revenue by March 10.
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 farmer Is
allowed to charge Off all of his neces-
sary expenses I'm 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 10 far ~ tl,is
cost represents actual Ontlsy, bat the
value of his own products fed to AMI
mails Is not de,luctible item.
Other farm expenses allowable are
the cost Of minor repairs ON buildings
tbut not the dwelling h0usel, ON feucee.
Wagons and farm machinery also bits
paid for horseshoeing, stock powders,
rock salt. services of veterinary. insar-
ance Except on dwelling housed, gaso-
line for operating power and sundry
other expenses which were paid for In
cash.
As to hired help, all the productive
labor. Is n dcductible expense; bat the
wages of household servants, Of help
hired to improve the farm, rs in tree
planting, ditchng, etc. cannot be
claimed against earnings. A farmer Is
not allowed to claim u 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 he 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
ha fa
fences. machinery, work animals, way
ons, tanks, wndnills and other farM
equipment which Is used in the con-
dict of the farm.
As 10 autos and tractors, the cost Of
these Is not an expense, although the
cost of their upkeep Is an allowable
deduction, II the machines are used ex-
clusivcly for farm purposes AND not
for pleasure. Also. In such cases, q de-
duction for wear and tear is allowed.
Farm Losses.
The loss Of u growing crop liz net n
proper deduction from iAcefAe, has
much as the value of the crop had rot
been taken into gross income. ,fhe
loss OF building or Of machinery
through storm. lightning, flood, etc, In
an allowable deduction, bst care should
he used to ascertain the correct loss
sustained, as restricted by incone tax
regulations.
No deduction is allowed In the ease
OF loss OF animals raised on the farm,
but a loss Is deductible from gross In.
come IL the animals had been pMr-
chased for draft or breeding purposes.
Shrinkase In weight or value of farm
products held for favorable market
prices cannot he deducted as q loss, for
the reason that when suck products
are sold The shrlnkage 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
sold out part or all Of their lands ut
big profits. All such gains constitute
Income and must he taken into the net
Income for the year
Any person who sold part Of farm
or ranch, or part of n parcel Of land.
must also show any gains realized by
the sale.
The method Of figuring gains and
losses on such transactions IL pre-
scrlbed In the Income Tax regulations,
copies Of which may be secured from
Internal Revenue Collectors.
80 Forms for Returns. t.y- !.
The Internal Revenue Bureau has
issued AN improved Form l0I0F for
the use of farmers This form, to-
eeiher with Form 1O4OA or 1880 viii
give The farmer explicit information
ms to how to properly figure his net
income for 1919
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 prodsets
and the cash paid cut for acthai allow
able farm expenses within the year.
Or he may make his return ON the ac4
crnal basis. which means computing