Evening capital and Maryland gazette. (Annapolis, Md.) 1910-1922, 1922-02-06
Revenue Act OF 1921 And
It's Effect On The Farmers

purchased during the year. As ar
illustration OF the difference between
the receipts ami disbursements fasis
and the accrual lass. let US take ?
cash purchase on December l. 1921.
OF tons OF hay and 1000 bushels Of
corn and oats: by the receipts and
disbursements basis, the cost would
be deducted from gross income for
the year 1921, and by the accrual
method. tie cost OF only the amount
used in December would lie charged 10
that year. and the balance carried by
inventory into the year 1922, TO be a
charge agains, gross income OF THAI
year
Losses incurred in the operation OF
a farm as a business enterprise are
deducti! lie from GROSS income. If
however. farm products are held for
| favorable markets, no deduction is al
lowed on account of shrinkage in
weight or value. for the selling price
( The total loss by frost. storm, food
or FIRE OF a prospective crop is not
! deductille. The reason is that use
Jess the crop reaches maturity and
/ is harvested and sold. its value never
reached gross income, and therefore
an arbitrary deduction of such loss
cannot he allowed. The loss of 4
! growing crop simply means hat tha
farmer has so much less gross in
come 10 report and therefore would
pay reduced tax. if any tax at ali.
a loss in the value of animals raised
on tie farm Is M dedGCt.bic, except
as such loss is reflected in an in
yentory. If used. However. if live
stock was purchased for any purpose
and afterwards died from disease, ex-
posture or injury. or was killed by
order Ji the authorities of the state
or lie United States. the actual puT-
chase price less any depreciation
which may have been previously sus-
tained with respect 10 such stock. and
any insurance or indemnity recov-
cred may lie deducted as loss.
Deductions of family or living ex-
penses such rs rent for a dwelling. re-
pairs TO a dwelling. cost of food and
clothing for the family. education OF
children, servants wages and similar
LENS are expressly prohibited ny the
revenue act ul 1921 General dcduc-
tons. such as for taxes, interes, or
personal indebtedness. losses sustain
ed i'm transactions entermed into fOl
profit aside from the farmers regu.
lar business. losses sustained hy fire
storm, or other casualties bad debts
and contributions. are explained in
instructions on the form for filing re.
turns. The farmer must include ii
his return of gross income not only
the profits of his farm, but all other
income such as interest on bank de-
posits and profits received from tn,
sale or rent of farm lands The far
mer who lets out a farm on crop
| share basis must include in his in
= come tax return for the year the cast
! when received. A farmer who let.
= out farm on a cash rental basis ant
( is paid in crops must report the ex
act cash rental agreed upon whether
+ or not the crops are disposed of
The Bureau of Internal Revenue ha:
q had prepared for farmers a special
= form-1040 For recording sales o
live stock, produce and miscellaneou.
receipts All farm income from any
source whatever must lie reported il
this schedule. which must he attached
| IN g., IL
! turns.
Forms 1040A for income of $4,000
; or less and 1040 for individual incomes
in excess of $4,000. may he obtained
in the Offices of collectors of internal
revenue and branch offices. Thes,
forms will be mailed to persons who
filed similar returns of income for the
year 1920. Failure to receive the
form. however. does not relieve the
person from fling his return and pay
ing the tax within the time prescribed
ly law. The return must be filed on
or tefore March 10 1922 The tax
this year as last. may lie paid in full
at the. time OF filing the return. or in
four equal installments. due on or be
fore March 10. June Is. September IL
and December Is. Heavy penalties
are provided by the revenue act for
failure or wilful refusal to file a re-
turn and pay the tax on time.
Revenue officers are visiting every
county in the United States to assist
taxpayers in the preparation of their
! income tax returns for the year 1921.
The date of their arrival and the To-
cation of their offices Will be announc-
ed through the press, or may lie OBJ
tanned on inquiry At Offices of collec-
tors OF internal revenue and branch
offices This advisory service is with
out cost to the taxpayer. Before seek
ing such assistance. however. tax
payers should read carefully the in
structions on the forms.