The Big Sandy news. [volume] (Louisa, Ky.) 1885-1929, 1920-03-05


plus his other income WINS sufficient TO
require an income tax return com
plete return must be filed with the col
leetor 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 of 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 us SHOW
els, rakes, etc. Also, the cost OF feed
purchased for his live stock may be
treated rs an expense In so far as this
cost represents actual outlay, but the
value Of his own products fed TO ami
mails is not a deductlble item.
Other farm expenses allowable are
the cost of minor repairs on buildings
(but not the dwelling housed, on fences,
wagons and farm machinery also bills
paid for horseshoelng, stock powders.
rock SAT-, services OF veterinary, insnr-
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 deductible expense; but the
wages of household servants, or help
hired to improve the farm, as in tree
planting, dltching. etc. cannot he
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 be 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
buildings Except the farmhouse).
fences, machinery, work animals, wag-
ons, tanks, wlndmilIs and other farm
equipment which is used In the con-
duct 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-
cluslvely for farm purposes and not
for pleasure, Also. In such cases. a de-
duction for wear and tear is allowed.
Farm Losses.
The loss of growing crop Is not a
proper deduction from income, mas
much as the value of the crop had not
been taken into gross income. The
loss OF building 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 deduction is allowed I'm the case
Of loss of animals raised on the farm,
but loss is deduetible from gross In
come II 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 a loss, for
the reason that when such 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 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 farm
or ranch, or part of a parcel of land,
must also show any gains realized by
Lhe sale.
The method Of figuring gains and
osses on such transactions is pre-
Icribed in the Income Tax regulations
,opies Of which may be secured from
Revenue Collectors
Forms for Returns.
The Internal Revenue Bureau has
ssued an improved Form 1040F for
he use Of farmers This form, to-
.ether with Form 1040A or 1910, will
i've the farmer explicit information
is to how to properly figure his net
income for 1919.
There are two methods of figuring a
armer's income tax return this year.
lie may make his return on the basis
# the difference between the money
md goods received for his products
md the cash paid out for actual allow
bile farm expenses within the year.
Or he may make his return on the ae-
rual basis, which means computing
he receipts and expenses that pertain
o the taxable year, excluding Income
armed and expenses incurrey W pre-
ious or succeeding wears