Evening capital and Maryland gazette. (Annapolis, Md.) 1910-1922, 1922-02-06

ftuTeau OF tNteEAdi tNefehue- nc PHa
/pose OF this article. which has been
approved ty the bureau. Is 10 answer
those most frequently presented.
The new act requires that returns
shall le filed y every single person
the term including widows, widOwers
and persons not living with husband
or wife-whOse net income for the
year 1921 was $1,000 or more. or
whose gross income was $4,000 or
more. and ny every married person
living with hust and or wife whose
net income was S2O00 or more. or
whose gross income was $4,000 or
more.
NET income" is gross income. less
certain specified deductions, which are
more liberal than were provided by
the revenue act OF 1918. In gross in
come. the farmer is required TO in
clude all gains, Profits and income
derived from the sale or exchange OF
farm products, whether produced on
the farm or purchased and resold."
The requirement TO file a return o.
amount OF net income. Is a new pro-
vision OF law. Whether or not gross
income equalled or exceeded $4,000
returns must he filed by single per
sons II the net income equalle4 or
exceeded $1,000. and by married per
sons II the net income equalled or
exceeded $4,000. In computing the
net income OF married persons. the
earnings or other income OF depend
ent minor children must be included
The exemptions are 1000 for sin
gle persons. $4,000 for married per-
sons and heads Of families whose net
income for 1921 was $4,000 or less
and $4,000 for married persons and
heads OF families whose income was
in excess Of $4,000 Under the rev
enue act OF 1918, the exemption al
lowed such persons was $4,000. re
gardless OF the amount of net income
a person who supports in one house
hold one or more relatives (other than
wife or husband is the head OF q
family.
ed per cent on the first 1900 OF ne
income above the exemption and PEI
cent on the remaining net income The
exemption for dependents person
dependent ppon the taxpayer for chief
snpRort who Is under eighteen years
qt age or mentally or physically in
capac!tatedr-is increased from 5000 to
$500. Thus, married man with three
children under is years of age whose
income for 1921 was $4,000 is en-
titled 10 an exemption of $1,000. The
exemption allowed such a man for the
year 1920 was $4,000.
Deductions Allowed Farmers
All necessary expenses incurred
during the year 1921 in the opera
ton of farm as a business enter
Irise. are deductible items. These in
cludef harvesting and marketing of
crops and the cost of seed and fer
tnizer used. Amounts expended for
ihe cost OF feed for live stock mas
,he, claimed but the value of a far
mer's own products used for such pur-
poses. is not deductible item. Th2
farmer may deduct the cost OF farm
tools used up in the course of Yea
wages paid TO employees (other than
domestic servants) and rent paid for
farm lands and buildings (other than
the dwelling) cost OF repairs to
fences and TO wagons and machinery.
also bills paid for horseshowing
stock powders. rock salt. veterinary
service, insurance Except on the
dwellingl gasoline for operating DOW
er and sundry minor expenses.
The cost OF farm machinery of {
permanent character. sach as =
threshing machine or tractor and ex
tenSive repairs to farm buildings.
such as placing a new roof on the
barn. are not deductible expenses.
These are regarded as capital invest
ments. made for the purpose of i'm
proving the property and enhancing
its value. Amounts expended in
developments of farms. orchards and
ranches prior TO the time when the
productive state was reached. may be
regarded as investments of capital. al
so amounts expended for the pur-
chase OF breeding or dairy animals.
The purchase price OF an automobile.
even when wholly used in carrying on
farming operations. is not deductible.
but is regarded as an investment of
capital. The cost OF gasoline. repairs
and upkeep OF an automobile if used
wholly in the business of farming. is
deductihle as an expense; if used part
ly for business purposes and partly
for the pleasure or convenience of
the taxpayer or his family. such cost
may lie apportioned according to the
extent of such use. Only the propor-
ton OF cost attributable TO business IS
deducuble as a necessary expense.
The farmer who keeps his accounts
'on the receipts and disbursement
laSiS" which mans q ra,ora - =