The Powder River County examiner and the Broadus independent. [volume] (Broadus, Mont.) 1919-1935, 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
peduoted-special Form for Farm
inccn7e-Cash or Accrual
Basis for Computing.
LAND SALE PROFITS TAXABLE.

A farmer, shopkeeper, or tradesman
mus tisur. up his net income for 1919;
and ii the farm CT business income
plus his other income was sufficient to
require an income tax return com
p]etc return must be filed with.the col
lectcr of internal revenue by March 10
A farmer should ascertain the gross
income uf his farm by computing all
gains derived from the sale or ex-
chance o. his products, whether pro-
ducca on the farm or purchased and
resold
Farm Expenses.
FROM hs gross income a farmer is
allowed 10 charge off all of his neces-
sary expenses IN the conduct of the
farm during the year. These include
costs Ct planting, euitiva1ins. harvest
ing aid marketing. In addition to
these costs he may deduct money spent
for ordinary farm tools OF short life
bought during the year, such as Shoy-
els, rahcS etc Also, the cost of feed
purchased fer his live stock may be
treated a> m expense in SO far as this
cost represents actual outlay but the
value ~ his own produces fed to AMI
| mails Is not a deducthle item.
Other farm expenses allowable are
the cost of minor repairs on buildings
(but not the dwelling house), on fences
wagons ana farm machinery also bills
paid for horse Sh0eing, stock powders
rock salt, services IF veterinary. insur-
ance Except on dwelling house>. gaso-
line fo; operating power and sunary
other expenses which were paid for in
! cash
As 70 Hired help, All The productive
| labor is a dcduclblc expense; but the
! wages cf household servants, or help
| hired 10 improve the farm, as in tree
| plartin|. ditchin-, etc. cannot be
| claimed aa,nst earnings. 4 farmer is
| not allowed 10 claim salary for him.
sci: Or members Of his family who
work on the farm.
| Wear ana Tear.
| Purchase Of farm, machinery. wag-
! ons. work animals, cite, also tho cost
/ Of construction or extension Of build
! ings. Sio%. fencing etc. should be CON
! >tlered additional investments in the
farm ana are not proper deductions
against income,
A reasonable allowance may h"
claimed 70: wear and tear on farm
buildings Except the farnlhouse),
/ tences. machn"rF, work animals wag
! ors. tanks. WndmiIls and other farm
equipment which is used in The con-
duct of tie farm.
As io autos and tractors, the cost of
these is no, an expense, although the
cost OF their upkeep is an allowable
deduction, if the machines are used ex-
eiUsiyely for farm purposes and not
for pleasure. Also. in such cases, de-
duclien FOR wear and tear is allowed
Farm Losses.
Tile loss of q growing crop is not a
proper deduction from income mas
much as the value Of the crop had not
hecn taken into gross income. The
loss of building or Of machinery
through STERN, lightning, flood. etc, Is
an allowable deduction, but care should
ne used to ascertain the correct loss
sustained. as restricted by income tax
resuia lions.
No deduction is allowed in the case
OF loss OF animals raised on the farm,
but a loss is deductible from gross in
come il the animals had been pur-
chased for draf or breeding purposes.
Shrnkage in weight or value Of farm
products held for favorable marke,
prices cannot he deducted as a loss. fol-
he reason that when such products
, are sold the shrnkase will be reflected
in the selling price.
Sale Of Farms and Land,
The value Of agricultural lands ha.
been jumping during the past few
years. aud during 1919 many owners
sold out part ar all OF their lands q
= big profits. All such gains constitut,
I income and must be taken into the ne
income for the year.
Any person who sold part OF a farl,
or ranch, or part Of parcel of land
must also show any gains realized b.
- the sale.
r. The method of figuring gains an,
losses on such transactions /. pre-
scribed in the Income Tax regulations
copies Of which may be secured frol
., Internal Revenue Collectors
Forms for Returns.
The Internal Revenue Bureau ha
= issued an improved Form 1O4OF fo
Il the use Of farmers. This form, tc
a sether with Form 104oA or 1910, vii
= give the farmer explicit informatio
as to how to properly figure his ne
:, income for 1919
There are tive methods OF figuring
: farmers income tax return this yea
: he may make his return on the basi
e Of the difference between the none
: and goods received fer his predac,
: and the cash paid cut for actual 2ilev
, able farm expenses within the yea,
Or he MAY make his rstarn on the =,