The Bluffton news. [volume] (Bluffton, Ohio) 1875-current, 1943-03-11

Internal Rerefiue designed to help
clarity requirements of the 1912
Revenue Act for those scho are
neu income tar pogers.-EDIToR
LOSSES OF FARMERS
Losses incurred in the operation of
farms as business enterprises are de-
ductible from gross income. If farm
products are held for favorable mar
kets, no deduction on account of the
shrinkage in weight or physical value
or by reason of deterioration in stor
age, is allowed, except as such shrink
age may be reflected in an inventory
if used in determining profits.
The destruction by frost, storm,
flood, or fire of prospective crops is
not a deductible loss in computing
income since it represents the loss of
anticipated profits which lave never
been reported as income Likewise,
farmer engaged in raising and SELL
ing livestock, such as cattle, sheep,
and hogs, is not entitled to claim as
loss the value of animals that perish
from among those animals that were
raised on the farm, except as such
loss is reflected in an inventory, if
used. If livestock has been purchased
for any purpose, and afterwards dies
from disease, exposure, or injury, or
is killed by order of the authorities of
State or the United States, the ac-
tual purchase price of such livestock,
less and depreciation allowable as a
deduction in respect of such perished
livestock, may be deducted as a loss
If the loss is not compensated
for by insurance or otherwise.
The actual cost of other property
with proper adjustments for depre-
ciation) which is destroyed by order
of State or Federal authorities may
likewise be claimed as loss. If re-
endorsement is made by a State or
the United States in whole or in part
on account of stock killed or other
property destroyed in respect of which
a loss was claimed in a prior year,
the amount received is required to be
reported as income for the year i'm
which reimbursement is made. The
cost of any feed, pasture, or care
which has been deducted as an ex-
pense of operation must not be includ-
ed as part of the cost of the stock
for the purpose of ascertaining the
amount of deductible loss.
If gross income is ascertained by
the use of inventories, no deduction
can be taken separately for livestock
or products lost during the year
whether purchased for resale or pro-
duced on the farm, as such losses will
be reflected in the inventory by re.
| ducing the amount of livestock or pro.
| ducts ON hand at the close of the year
which has the effect of reducing gros:
income from business by the amoun
of the loss.
| If an individual owns and operates
a farm in addition to being engaged il
another trade or business or calling
and sustains loss from the farming
operations, such loss may be deducted
from gross income received from al
sources in determining the taxpayers
net income, provided such farm is not
| operated for recreation or pleasure.
If a farm is operated for recreation
or pleasure and not on commercial
basis, and if the expenses incurred in
connection Herewith are in excess 'oi
the receipts therefrom, the entire re.
ceipts from the sale of prduce may be
ignored in rendering a return of in.
come land the expenses incurred, be.
ing regarded as personal expenses will
not constitute allowable deductions
for Federal income tax purposes.
L