The Hope pioneer. [volume] (Hope, N.D.) 1882-1964, 1920-03-04
SALE PROFITS TAXABLE.

Necessary Farm 1xpsasss Nay D
psduetsd-epeeIaI Form SeP Farm
lneom-cash o. Aeesual
Basis for Computing
A farmer, shopkeepsr. OF t1adesmal
must figure up his net income Tor 1919;
and IL the farm OF business income
plus his other income was su@cieot to
require an income tax return Q COM
plets return must be filed With the COL
lector Of internal revenue BY March ID.
A farmer should ascertain the gross
income Of his farm by computing all
gains derived from the sale OF e1-
change Of his products, whether pro-
duced on the farm or purchased and
resold.
Farm Expenses.
From his gross Income q farmer 10
allowed to charge of all Of his neces-
sary expenses in the conduct Of the
farm during the year. These include
costs Of planting. cultivatanE, 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 a. SHOW
els, rakes, etc. Also, the cost Of feed
purchased for his live stock may be
treated as an expense In 70 far % this
cost represents actual outlay, but the
value Of his own products fed to All
mails 10 not q deductiblo item.
Other farm expenses allowable are
the cost Of minor repairs on buildings
(but not the dwelling houss), on fences,
wagons and farm machinery, also bills
paid for horseshoeing, stock powders,
rock salt, services Of veterinary, insur-
ance Except on dwelling house), case
line for operating power and sundry
other expenses which were paid for In
cash.
Az to hired help. al tho productive
labor 10 q deducdble expense; but the
wages Of household servants, or help
hired to improve the farm, % in tree
planting, ditching, etc., cannot DO
claimed against earnings. A farmer 10
not allowed to claim q salary for him.
self or members Of his family who
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, 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 IL used in the con.
duct Of the farm.
A to autos and tractors, the cost Of
these IL not an expense, although the
cost Of their upkesp IL an allowable
deduction, II the machines are used ex-
clusively for farm purposes and not
for pleasure. Also. In such cases, q de-
duction for veal and tear 10 allowed.
Farm lessea.
The loss Of q growing crop Is not 4
proper deduction from income, mas
much as the value Of the crop had not
been taken into gross income. The
loss Of a 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 q loss Is deductibls from gross In.
come II the animals had been Dur.
chased for draft or breeding purposes.
Shrinkage1 IN weight or value Of farm
products held for favorable market
prices cannot be deducted % 4 loss. for
the reason that when such products
are sold the shrinkags win b reelected
in the selling price.
Sale % Farms and Land.
The value Of agricultural lands has
been Jumping during the past few
years. and during 1919 many owners
sold cut part or Ill Of their lands NJ
big profits. Al such gains constitute
income and must b TAKEN into the net
income for the year.
Any person who sold part q q farm
OF ranch, or part q q parcel Of land.
must also show any gains realised BY
the sale. g
The method Of figuring gains and
losses on such transactions - pre.
scribed In the Income Tux regulations,
copies Of which may - secured fnem
Internal REVENUE ConeetorA
FERNS fop Rotusoa.