OCR Text |
Show year or two; fuel and oil used for farm work; repairs and maintenance mainten-ance of farm machinery; hired laborers la-borers and hired machines, and cost of commercial fertilizers the benefit of which is of short dura- ti0The cost of farm machinery, equipment and farm buildings; amounts expended in the development develop-ment of farms, orchards and ranches? ranch-es? as well as the amounts expended expend-ed in the restoration of soil fertility fer-tility preparatory to actual production pro-duction crops and the cost of liming soil to increase productiveness productive-ness over a period of years, are capital ca-pital expenditures. Losses incurred in the operation of farms as business enterprises are deductible from gross income. If livestock has been purchased for any purpose, and ' afterwards dies from disease, exposure or injury, or is killed by order of the authorities authori-ties of a state or the United States the actual purchase price of such livestock, less any depreciation depre-ciation 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 in-surance or otherwise. If gross income is ascertamed by the use of inventories, no deduction deduc-tion can be taken separately for livestock or products lost during the year. FARMERS TO FILE INCOME TAX FOR FIRST TIME Many farmers will be liable for filing income tax returns and payment pay-ment of tax for the first time : this year. The term "farmers" mcludes livestock raisers, fruit and truck growers, and operators of plantations planta-tions and ranches. Farmers may maintain their records rec-ords and file their returns of income in-come on either the cash receipts and disbursements basis or on the accrual basis of accounting. A consistent con-sistent method must, however, be employed. If a cash basis is used, Form 1040F, "Schedule of Farm Income and Expenses," is required to be filled out and filed in conjunction con-junction with Form 1040. Deductions from gross income may be made by farmers as necessary ne-cessary expenses, all amounts expended ex-pended (other than those constituting consti-tuting capital expenditures) m carrying car-rying on the business of farming. Deductions for expenses include such items as cost of feeding and raising livestock (except the value of farm produce grown upon the farm and the labor of the taxpayer) taxpay-er) ; cost of seed, minor repairs to farm buildings (other than the dwelling of the farmer); small tools used up in the course of a |