Newark post., 1920-02-11
THE FARMER AND
THE INCOME TAX
Bureau of Internal Revenue
Advises as to Disputed
Points

FONTS
The "idle" winter days supposed
to be spent by the farmer in at
tending meetings of the "Store Box
Club" at the grocery or attending
the numerous sales that are sched-
uled to occur in the so-called
"idle" winter months, are as ex-
tinct now as the dodo bird or the
ichthyosaurus or the things that !
naturalists talk about in their idle |
hours.
This winters activities have left
little opportunity to join the ranks
of, the knockers at the grocery
store or the blacksmith shop even
if the modern farmer should be
inclined to spend his time that
way, which he isn't. To begin
with there was a lot of close figur-
ing to be done for the census taker
and now there's lot more for the
Income Tax Collector. This must
be done before March Is and many
are already at work on the job,
which isn't so bad after it's start
ed.
The conditions are the same for
farmers as for others: an unmar-
ried person must file a return if.
he or she has an income of $1,000
or over, a married person living
with wife or husband if the net in
come was $4,000 or over. The re-
turn must be made even though no
tax is due.
Form 1040F is to be used by
farmers, in addition to 1040 or
104OA.
Branches OF Farming
The term farm" as used in in
come tax includes stock farms,
dairy farms, poultry farms, fruit
farms and truck farms, also plan
tations, ranches, and all land used
for farming operations. Whether
the owner of the farm or a tenant
the person or firm operating the
farm is required to consider in.
come-tax liability on the annua.
gains.
Gross Income
In gross income a farmer is re
quired to include "all gains, pro
fits, and income derived from tn,
sale or exchange of farm product
whether produced on the farm O.
purchased and resold." When h
exchanges his products for grocer
les, clothing or other articles h
must include in his gross incom
the value Of the articles receive
in exchange. A farmer who let
out farm on crop-share basl
must report the cash receive
when the crops are sold. A farm
err who lets out a farm on a cas-
rental basis and is paid in crop
must report the exact cash rents
agreed upon whether or not tn
crops are disposed of. Care mus
be taken in figuring gain from tn
sale of live stock. If the stock wa
previously purchased, it's cos
should be deducted from the sale
price to ascertain the gain unles
the inventory method is in use b
the farmer.
The entire amount received fo
animals raised on the farm shoul
be included in gross income.
In case farmer sold any wor
animals or farm machinery pre-
viously purchased there should b
included in the gross income an
gain realized. The cost thereo.
reduced by the amount of wea
and tear sustained on such an
mails and machinery, is subtracte
from selling price to arrive at tn
profit.
Losses through crop failu,
death of farm animals, fire, lightl
ing will be computed on the cos
less any ueducClOnS Tor Qepfecl;
tion. If insurance has been r
ceived that must also be conside
ed.
Defining Farm Expenses
From his gross income a farm,
is allowed to charge off all of h
necessary expenses in the condu
of the farm during the yea
These include costs of putting
his crop, of caring for his Gro
and of harvesting and marketin
In addition to these costs he nj
deduct money spent for ordina
farm tools Of short life boug
during the year, such as shove
rakes, etc. Also, the cost of fe