Cresco plain dealer. (Cresco, Howard County, Iowa) 1913-1945, 1920-03-12
Gains for 1919 Must Be Figured
Under U. S., LaW-Returns
/. 81, Due March IS.
] LAND SALE PROFITS TAXABLE.
|, Necessary Farm Expenses May 30
Dedueted-speeia'Form for Farm
tneome-Cashg Or AccruaI
az ss. Basis for Computing.

lector of internal revenue by March 10
A farmer should ascertain the gross
income Of his farm by computing all
Hajas derived from the sale or ex-
41ange Of his products, whether pro-
4ueed on the farm or purchased and
1GGold. Va.
s7' Farm Expenses. :,
From his gross income farmer Is
allowed to charge. of all Of his neces-
sary expenses in the conduct Of the
5nifm during the year. These include
osts Of planting, cultivating, harvest
~ and marketing. In addition to
tAe1o costs he may deduct money spent
IT ordinary farm tools of short life
bought during the year, such as shov-
sla rakes, etc. Also, the cost Of feed
lmchased for his live stock may be
tsDated - IN expense in 50 far - this
eoDt represents actual outlay. but the
y01us Of his own products fed to AMI
lalo 10 not q aeductible item. N,*.
Osher farm. expenses allowable aro
~ eost Of minor repairs on buildings
az not tho dwelling hopse), on fences,
tpeons and; farm machinery: alao bt1ls
IA for horseshoeing, stock powders,
YOek salt, services Of veterinary, 1nsur-
anes (except on dwelling house,, case
~ Ter operating power and sundry
e1ber expenses which were paid for In
enUh - . - .-
~ to hired help, all the productive
I00or II . deductible expense; but the
w1yes Of household servants, or help
51o0 70 improve the farm, ~ In tree
Jhnting, ditching, ETC.. cannot bs
&a11Ded against earnings. A farmer IL
Ut allowed to claim a salary for him
sGlf or members Of his family who
work on the farm.
Wear and Tear.
Purchase Of farm machinery, wag-
go, work animals, etc, also the cost
q construction or extension of build
~, silos, fencing, etc, should be con-
01Dered additional, investments In the
faIn and are not proper deductions
AH1iDst income. -
Y a reasonable allowance may be
claimed for wear and tear on, farm
b0ildings Except the farinhouse).
fences, machinery, work animals. wag-
-. tanks, windmills and other farm
equipment which il used in the con-
duct Of the farm. Il
Al to autos and tractors, the cost Of
thoDe 10 not an expense, although the
est Of their upkeep 10 an allowable
A>2snn%ann - Tho ms kinos q "a r,RnA ~.
<3asively for farm purposes and not
1 esDieasure. Also, in such cases. de-
14ction for wear and tear IL allowed.
!. tg.. 4 = 5.&:5z Farm Lessee.
he loss Of growing crop IL not 4
beUpef deduction from income, mas
much ~ tho value Of the crop had not
66en taken into gross incomes The
- Of . building Or Of machinery
tArOuxh storm, lightning, Hood, ETC., 10
IN allowable deduction, but care should
b used to ascertain. the correct loss
sustained, az restricted by Income tax
regulations.
No deduction IL allowed in the case
q loss Of animals raised on the farm,
Int 2 loss IL deductible from gross in.
eo6e II the animals had been pur-
eaDed for draft or breeding purposes.
sf4hrinkage in weight or value Of farm
De04ucts held for favorable market
DGices cannot be deducted as loss, for
2fAe reason that when such products
are sold the shrinkage will be reflected
n the selling price.
sss Sale OF Farms and Land.
he value Of agricultural lands has
been Jumping during the past few
years, and during 1919 many owners
Gead out part or all Of their lands at
BIC profits. All such gains constitute
income and must be taken into the net
income for the year.
Any person who sold part of farm
Or ranch, or part of a parcel Of land,
must also show any gains realized by
the sale.
The method Of figuring gains and
losses on such transactions 10 pre-
scribed 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 1040F for
the use of farmers. This form, to-
gether with Form 1O4OA or 1910, will
give the farmer explicit information
~ to how to properly figure 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 betweensthe 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 &C.
oual basis, which means computing
the receipts and expenses that pertain
to the taxable year, excluding income
earned and expenses incurred in pre-
4)eus or succeeding years.