Show FARMERS INCOME UN SUBJECT TO TAX gains for 1919 must be figured under D U S law returns due march 15 LAND SALE PROFITS TAXABLE necessary farm expenses may be deducted special form for farm income cash or accrual basis for computing A farmer shopkeeper hop keeper or tradesman must figure up his net income for 1919 and it if the farm or business income plus his other ineice was sufficient to require nn an income tax return a complete return must be filed with the collector of internal revenue by 15 A firmer farmer should ascertain asperl ain the gross income of ills his farm by computing all gains derived from the sale or exchange of its ills products whether produced on oil the larm farm or purchased and resold farm expenses from his gross income a farmer Is allowed to harge charge ott off all of his necessary expenses in the conduct of the farm dating duding the year these include costs of planting cultivating harvesting and marketing mai koting in addition to bliese costs lie may deduct money spent for ordinary farm tools of short life during the year tear such as chov els rakes etc also tile the cost of feed purchased for his live stock may be treated as nn in expense in so far ns as this cost represents actual outlay but the value of his own products prod acts red fed to animals balsis Is not a deductible item other farm expenses allowable are the lie cost of minor repairs on buildings hut not the dwell dwelling in houe on fences wagons and farm machinery also bills paid for horse shoeing stock powders rock salt services service ot of veterinary insurance except on dwelling house lio gasoline 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 hire to improve the farm as in tree planting dite ditching liln I 1 etc cannot be claimed against again A earnings A farmer is not allowed to claim a salary for himself or members of his family who work on the farm wear a and nd tear ru purchase of farm machinery wagons work animals etc also tile the cost of construction or extension of buildings silos fencing etc elc should be considered ed additional investments in tile the farm farin and are not proper deductions u against g income A rewo reasonable allo allowance Nance may be claimed for wear and tear on farm buildings except the farmhouse tann honse fences machinery work animals wag va fins anns tanks windmills windmill find and other farm equipment which is used in the conduct of the farm As to autos and tractors the cost of those these is not an expense although the cot cost of their upkeep is an allowable deduction it if the ma machines babines bines are used exclusively clu for firm farm pur purposes poles aud and not for pleasure also in such cases case a deduction for wear and tear is allowed farm losses the lrus loss of a grol growing ng crop is not a proper deduct deduction lon from income 1119 inasmuch us as the lie value of tile the crop had not been taken into gross income the loss of a building or of machinery through storm lightning flood etc is I 1 an allowable allo wahle deduction hut but care should be 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 a n lo 10 aos Is deductible from gross groa income if the rini animals mals had been purchased for draft or breeding pur purposes poes shrinkage in weight or value of f farm arm products held for favorable market prices cannot be deduct deducted edris 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 tile value of agricultural lands kinds hns been jumping during 3 the past few years and during 1 1910 19 many owners sold out part or all of their lands at big profits ball all such mch sains constitute income inyonie rind and into the nat net income for the year any person who sold part lart of h a farm or ranch or part of a parcel of land must also show any gains realized by tile the sale the method of 11 figuring gains and losses on such transactions Is I 1 pre ed in the lie income tax regulations regulation 1 copies of which may be secured fro from ul internal Re revenue collectors forms for returns the internal revenue bureau has bris issued an improved form for the use of farmers tills this form together with form or 1040 will give the farmer explicit information as to how to properly figure his net income for 1019 1910 there are two methods of fl figuring uran a farmers income tax return this year yean tic lie amny make mahe his return on the basis of tile the difference between ill aliu money and goods received for his products and t alio he cash paid out tor for actual allowable farm fann expenses the year or he way may make ills his return on oil the accrual basis which means computing the receipts and expenses that pertain to the taxable jear ar excluding income earne earned 1 I and expenses incurred lu in previous or succeeding years |