The Bemidji daily pioneer. [volume] (Bemidji, Minn.) 1904-1971, 1920-03-04
FARMERS || /: 5; INCOME M;
!: SUBJECT 9 TO TAX
q. ! Il p,
Cain. for 1919 Must Be Figured
Under y. $. Law-Return' )
Due March Is. -.
LAND SALE PROFITS TAXABLE.

=
Necessary Farm Expenses May y
Deducted Especial FERN ser Farm
Ineems-cash o. Aeerual
easIs for Computing.
A farmer, shopkeeper, or tradesman
must figure up his net income for 1912
aaA II the farm or business income
M his ether income was SUFFICIENT to
require al income tax return . com
plete return must be filed with the COL
lsetsr Of internal revenue by March 10
4 farmer. should ascertain the gross
1nceme Of his farm BY computing oil
gains derived from the sale or e1-
Change Of his products. whether pro-
Aucsd On the farm or purchased and
Rseold.
, ~ Farm Expenoes.
From his gross income q farmer ID
allowed to charge OF Ill Of his neces-
sary expenses in the conduct OF the
aaYn during the year. These includs
eosts Of planting. cultivating, harvest
hg and marketing. In addition to
these costs he may deduct money spent
1sr ordinary farm tools Of short nfs
beusAt during the year, such ~ show
IL rakes, etc. Also, he cost Of feed
purchased for his live stock may be
treated ~ an expense In - far % this
eost represents actual outlay, but the
value Of his own products fed to AMI
mails u not q deductible item.
Other farm expenses allowable are
TIE cost Of minor repairs on buildings
Out 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-
lire 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 IL
not allowed to claim q salary for him
self or members Of his family who
work on the farm.
Wsap and Tear.
Purchase of farm machinery, wag-
ems, 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, If the machines are used ex-
clusively for farm purposes and not
for pleasure. Also, in such cases, a de.
duction for wear and tear is allowed.
Farm Losses.
The loss Of q growing crop Is not q
proper deduction from income, mas
much as the value Of the crop had not
been taken into gross income. The
loss of building or of machinery
through storm, lightning, food etc, is
an allowable deduction, but care should
he 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 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 market
prices cannot be deducted as a loss, for
the reason that when such products
are sold the shrinkage will be reflected
in the selling price.
Sale Of Farms and Land.
1uC NdiUC VI agricultural lduUS mas
been jumping during the past few
years, and during 1919 many owners
sold out part or all Of their lands at
big profits All such gains constitute
income and must he taken into the net
income for the year. e..
ANY person who sold part Of farm
or ranch, or part Of parcel of land,
must also show any gains realized by
the sale.
The method Of figuring gains and
losses on such transactions is pre-
scribed in the Income Tax regulations.
copies Of which may be secured from
Internal Revenue Collectors.
Forms for Returns.
The Internal Revenue Bureau has
issued an improved Form 104OF for
the use of farmers. This form, to-
gether with Form 1O4OA or 1910, will
give the farmer explicit information
rs to how to properly figure his net
income for 1919.