The Delta independent., 1920-03-05
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 De.
ducted-Special Form for Farm
Ineome-cash or Aeerual
Basis for Computing.


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, COM
plete return must be filed with the col
lector of internal revenue by March 10.
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 as shsv-
els, rakes, etc Also, the cost of feed
purchased for his live stock may be
treated as an expense, in 80 far as
this cost represents actual outlay; but
the value Of his own products fed to
animals is not 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, fnsur-
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 salary for him
self or members of his family who
work on the farm.
Wear and Tear.
Purchases 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, windmills and other farm
equipment which is used in the coz
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 a growing crop Is not q
proper deduction from income, mas
much as the value of the crop had lot
been taken into gross income. The
loss of building or Of machinery
through storm, lightning, flood, ETC., IL
an allowable deduction, but care should
be used to ascertain the correct losl
sustained. as restricted by income tai
regulations.
No deduction is allowed In the cas>
Of loss of animals raised on tile farm
but a loss is deductible from gross In
come II the animals had been pur
chased for draft or breeding purposes
Shrinkage in weight 6r value of farm
products held for favorable marke
prices cannot be deducted as loss, 70
the reason that when such produetl
are sold the shrinkage will be renecte'
in the selling price. q
Sale Of Farms and Land.
The value Of agricultural lands ha
been jumping during the past fey
years, and during 1919 many owner
sold out part or all Of their lands at bi
profits. All such gains constitute II
come and must be taken into the ne
income for the year.
Any person who sol part of farr
or ranch, or part OF parcel of LIANT
must also show any gains realized
the sale.
! The method of figuring gains an
losses on such transactions is prescril
ed in the Income Tax regulation
copies of which may be secured frol
Internal Revenue Collectors.
Forms for Returns.
The Internal Revenue Bureau has Il
sued an improved Form 104OF for III
use Of farmers. This form. togethe
with Form 1O40A or 1040, will give Ii
farmer explicit information as to no
to properly figure his net income X
1919.
There are two methods Of figuring
farmers income tax return this yea
He may make his return on the bas
Of the difference between the mons
and goods received for his produc
ai. Il A..k l<.,. M, Ill.