Audubon Republican. [volume] (Audubon, Iowa) 1894-1925, 1920-03-04

plus his other incomeswas sufiiclent 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 pros
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 SHOW
els, rakes, etc. Also, the cost Of feed
purchased for his live stock may be
treated as an expense In 20 far as this
cost represents actual outlay, but the
value Of his avn products fed to AMI
mails is net deductible item.
Other farm expenses allowable are
the cost Of miner repairs on buildings
| tbur not the dwelling heuse), on fences,
wagons and farm machinery; also bills
paid for horsesh0eing, stock powders.
rock salt, services of veterinary, 'nsur-
ance Except on dwelling house,, case.
line for operating power and sundry
! other expenses which were paid for In
I cash. 81
| AS to hired help, all tho productive
| labor is-a deductible expense bat 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 whs
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, siIos, fencing, etc, should be cen
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, 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, il 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 a 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
he 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 on tbe farm,
but loss 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.
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 he taken into the net
income for the year.
4 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 IL 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 l0i0F for
the use OF farmers. This form, to-
gether with Form 1040A or 1910, will
give the farmer explicit information
as to how TO properly figure his net
income for 1910
There are two methods of figuring a.
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-
yious or succeeding years