The Grangeville globe. [volume] (Grangeville, Idaho) 1907-1922, 1920-03-11
Gains for 1919 Must Be Figured
Under u. S. LaW-ReturnS
Due March IS.
LAND SALE PROFITS TAXABLE.
Necessary Farm Expenses May Be De
ducted-SpeciaI Form for Farm
lncome-Cash or Accrual
Basis for Computing.

farmer, shopkeeper, or 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, Il COM
plete return must be filed 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 include
costs of planting, cultlvating. 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 shov-
els, Fakes, 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
animals Is not 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 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 con
/ duct of the farm
AS to autos and tractors, the cost of
these is not an expense, although the
cost of their upkeep is an allowable
deduction. II the machines are used ex-
clusvely for farm purposes and not
for pleasure. Also in such cases, de
duction for wear and tear Is allowed.
Farm Losses.
The loss of growing crop Is not q
| proper deduction from income, mas
much as the value of the crop had .ot
been taken into gross income. The
loss of building or of machinery
through storm, lightning, food, etc, is
an allowable DEDUCTION, but care should
| nt uSth w VI ldlIl iht NOliNNl lpoe
sustained as restricted by income tar
regulations.
No deduction is allowed in the case
OF loss of animals raised on the farm
but loss is deductible from gross in
come II the animals had been pur
chased for draft or breeding purposes
Shrinkage in weight or value Of farm
| hold for faNnrahIa M = a
prices cannot be deducted as a loss, fol
the reason that when such products
are sold the shrnkage 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. and during 1919 many owner
sold out part or all of their lands at BIZ
profits. All such gains constitute In
come and must be taken into the ne
income for the ear.
Any perssn who sol part Of 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 fror
Internal Revenue Collectors.
Forms for Returns.
The Internal Revenue Bureau has 4
sued an improved Form 1040F for tn
use of farmers. This form, togethe
with Form 1040A or 1910, will give tn
farmer explicit information as to ho'
to properly figure his net income fo
1919.
TheiP are two methods of figuring
farmer income tax return this yea
He may mike his return on the bas
of tie III ference between the none
and optis r'"eived for his product
and H. ,i..l pnid ont for actual ALLOW
able farm expenses within the yea
Or lie Nar lake his return on the q