Western Kansas world. [volume] (WaKeeney, Kan.) 1885-current, 1920-03-04
Gains for 1919 Must Be Figured
Under u S. LaW-Returns
Due March IS.
LAND SALE PROFITS TAXABLE
Necessary Farm Expenses May Be
Deducted-SpeeiaIF Form for Farm
Income-Cash or Accrual
Basis for Computing.

and If the farm business income
plus his other income was sufficient to
require~an income tax return COM
plete return must be filed with the COL
1ector of internal revenue by March Is.
farmer should ascertain the gross I
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 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 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
tbut not the dwelling house,, on fences,
wagons and farm machinery; also bills
paid for horseshoeing, stock powders,
rock salt, services of veterinary, insur-
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 a deductible expense; but the
wages of household servants, or help
hired to Improve the farm, in tree
planting, dit ching. etc. cannot be
claimed against earnings A farmer is
not. allowed to claim salary for him
self, members OF his family who
work on the farm.
l. Wear and Tear.
| Purchase OF farm machinery, wag-
ons, work animals, ETC., also the cost
OF construction or extension of build
fngs, 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 farm
buildings Except the farmhouse),
fences, machinery, work animals, wagr
ons, tanks, windmflls and other farm
equipment which is used in the cons
| duct of the farm.
tT-as-As' to autos and tractors. the cost Of
these is not1an 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 a growing crop is not q
| proper deduction from income, mas
much as the value of the crop had not
| been taken into gross income. The
| loss of a building 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 in the case
of loss of animals raised on the farm,
but a loss is deductible from gross in
come if the animals had been pur-
chased for draft or breeding purposes.
Shrinkage in weight value of far
products held for favorable market
prices cannot be deducted as a loss. for
the reason that when such products
| are sold the shrfnkage 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 a
| big profits. All such gains constitute
income and must be taken into the ne
| 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 b,
the SALE
The method of figuring gains ant
scribed in the Income Tax regulations
copies Of which may be secured from
internal Revenue Collectors
Forms for Returns
The Internal Revenue Bureau ha
issued an improved Form 1o4oF TO
the use of farmers This FORM to
| gether with Form 1o4OA or 1910 viii
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 Yea,
He may make his return on the basi
OF the difference between the none
and goods received for his product
and the cash paid out for actual allow
able farm expenses within the wear
Or he may make his return on the ae
crual basis, which means computin
the receipts and expenses that pertain
to the taxable year excluding incom
earned and expenses incurred in pre-
Ievfous RMcc0G0fx129