Hermanner Volksblatt. [volume] (Hermann, Mo.) 1875-1928, 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 b De-
ducted-Special Form for Farm
lncome-Cash or Accruai
Basis for Computing.

A farmer, shopkeeper, 6 tradesman
must figure up his net income for 1919;
and if the farm or business income
plus his other income was sufficient to
require an income tax return, a COM
plete return must be flied with the col
lector of internal revenue by March 10.
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 a farmer Is
allowed to charge off all Of his neces-
sary expenses in the conduct of the
farm during the year. These tETfwTl
costs Of planting, %cultsvating, 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 b'
treated as an expense, in so far as
this cost represents actual outlay but
the value Of his W products fed to
animals is not a deductible item.
Other farm expenses allowable are
the cost of minor repairs on buildings
(but 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 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 Is
not allowed to claim a salary for him
self or members of his family who
work on the farm.
Wear and Tear.
Purchases 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 is used in the COZ
duct of the farm.
AS to autos and tractors, the cost OF
these is not an expense, although the
cost of their upkeer is an allowable
deduction, If the machines are used eX
clusively for farm pui poses and mo-
B for pleasure. Also, If such cases, a de
duction for wear and tea Is allowed.
Farm Losses.
The loss of a growing crop is not 6
proper deduction from income, mas
much as the value of the crop had 20
been taken into gross income. The
loss of q building OF Of machiner!
through storm, lightning, flood, etc, |!
an allowable deduction, but care should
be used to ascertain the correct loss
sustained, as restricted by income ta'
regulations.
No deduction is allowed in the cas-,
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 or value of farm
products held for favorable marke
prices cannot be deducted as a loss, 70
the reason that when such product
are sold the shrinkage will be reflected
in the selling price.
Sale Of Farms and Land.
The value Of agricultural lands ha
been jumping during the past fey
years, and during 1919 many owner
sold out part or all Of their lands at bi
profits. All such gains constitute In
come and must be taken into the ne
income for the year.
Any person who sol : part of a farr
or ranch, or part of a parcel of lane
must also show any gains realized b
the sale.
The method of figuring gains an
losses on such transactions is present.
ed in the Income Tax regulation!
copies Of which may be secured froI
9 Internal Revenue Collectors.
Forms for Returns.
The Internal Revenue Bureau has Is
\ sued an improved Form 1040F for tn
use of farmers. This form, togethe
with Form 1040A or 1040, will give tn
farmer explicit information as to no,
to properly figure his net income fo
1919.
There are two methods of figuring
farmers income tax return this yea.
He may make his return on the basl
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 yea
Or he may make his return on the a,
crual basis, which means computin
the receipts and expenses that pertai
80 tha fo~ohla yaar a cIudipU fncorr