The Pioche record. [volume] (Pioche, Nev.) 1908-1925, 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 %
oeduetsd-spseIai Form for Farm
ineoms-cash or Aeerual
Basis fer Computing.

S0"e-Saen OF Aees0au
Basis fer Computing.
A farmer. shopkeeper. or tradesman
must ngure up his net income for 1919:
and II the farm or business income
plus his other income was SUFFICIENT to
require an income tax return o COM
plete return must be fled with the COL
lector Of internal revenue by March Is.
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 q farmer Il
allowed to charge or 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 so far as this
cost represents actual outlay, but the
value Of his own products fed to ami
mails is not deductible item.
Other farm expenses allowable are
the cost Of minor repairs on buildings
(but not the dwelling housed, on fences,
wagons AID farm machinery; also bills
paid for horseshoeing, stock powders.
rock salt, services of veterinary. insur-
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 II
not allowed to claim salary for him.
self or members Of his family who
work on the farm.
Wear and Tear.
|
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
2 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-
3 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, a de-
|, duction for wear and tear is allowed.
Farm Losses.
. The loss Of growing crop is not Z
!. proper deduction from income, sinas-
!. much as the value Of the crop had not
4 been taken into gross income. The
: loss of building or OF machinery
. through storm, lightning, food, 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 in the case
OF loss Of animals raised on the farm
? but loss is deductible from gross in
: come il the animals had been pur
), chased for draft or breeding purposes.
Shrinkage in weight or value of farm
: products held for favorable marke,
;. prices cannot be deducted as loss, fol
: the reason that when such product.
: are sold the shrinkage will be reflected
e in the selling price.
Sale Of Farms and Land.
The value Of agricultural lands ha,
been jumping during the past few
: years. and during 1919 many owner,
y sold out part or all Of their lands a
/ big profits. All such gains constitut,
y income and must be taken into the ne
T. income for the year.
y Any person who sold part Of farm
I or ranch, or part of a parcel Of land
'"uSe o'sV ShoW any gums TcdtlZcu "
/ the sale.
n The method of figuring gains ant
r, losses on such transactions Is pre-
y scribed in the Income Tax regulations
Is copies Of which may be secured from
y Internal Revenue Collectors.
= Forms for Returns.
!. The Internal Revenue Bureau ha,
- issued an improved Form 1O4OF fol
the use OF farmers. This form, to
gether with Form 1040A or 1910, vii
!. gether with Form 1040A or 1910, vii
- give the farmer explicit information
as to how to properly figure his ne
income for 1919.
There are two methods Of figuring [
farmers income tax return this year
ID He may make his return on the basil
rs OF the difference between the none,
r. and goods received for his product