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Show FARMER'S INCOME1 SUBJECTJO TAX: Gains for 1919 Must Be Figured Under U. S. Law Returns ! i ., Due March 15. I LAND SALE PROFITS TAXABLE., ' I J Nocary Farm Expenses May Be , 1 ' Deducted Special Form for Farm I , Income Cash or Accrual L Basis for Computing. I J A fanner, shopkeeper, or tradesman must figure up his not Incomo for 1010 ; nnd If the farm or business Income plus his other Income wns sufficient to , roqulro an Income tax return n com- filote return must be tiled with the collector col-lector of Internal rovenuo by Mnrch 10. A farmer should ascertain the gross Income of his farm by computing nil gains derived from the sale or exchange ex-change of his products, whether produced pro-duced on the farm or purchased and resold. Farm Expenses. From his gross Income n farmer Is allowed to charge off all of his necessary neces-sary expenses In the conduct of the farm during the year. These Include costs of planting, cultivating, harvesting harvest-ing and mnrkctlng. In addition to these costs lic'nmy deduct money spent for ordinary farm tools of short life bought during tho year, such ns shov-elfl, shov-elfl, rakes, etc. Also, the cost of feed purchased for his live stock may be treated as nn expense In so far as this ), cost represents actual outlay, but the V m value of his own products fed to mil- I mills Is not a deductible Item. I Other farm expenses nllownblc are I the cost of minor repairs on buildings 1 (but not tho dwelling house), on fences, t wagons and farm machinery; also bills paid for horseshoeing, stock powders, I m rock salt, services of veterinary, Insur-I Insur-I , anco (except on dwelling house), gaso- lino for operating power nnd sundry jj other expenses which were paid for in I cash. I As to hired help, all the productive JT; labor Is a deductible expense; but the wages of household servants, or help R hired to improve tho farm, as In tree I planting, ditching, etc., cannot be S claimed against earnings. A farmer Is 1 not allowed to claim n salary for htm- ji self or members of his family who I work on the farm. R Wear and Tear. I Purchase of farm machinery, wag- I-,w. . ons, work animals, .etc., also the cost """ of construction or extension of build-"i build-"i lngs, silos, fencing, etc., should bo considered con-sidered additional 'investments in the farm and ore not proper deductions agnlnst Income. A reasonable nllowonco may be claimed for wear and tear on farm buildings (except tho farmhouse), fences, machinery, work animals, wagons, wag-ons, tanks, windmills and other farm equipment which is used In tho conduct con-duct of the farm. 0 As to autos and tractors, tho cost of 1 these Is not an expense, although the .' cost of their upkeep is an, nllownble deduction, if the machines are used exclusively ex-clusively for farm purposes nnd not 1 for pleasure. Also, In such cases, a dc- i auction for wear and tear is allowed. Farm Losses. The loss of n growing crop is not n I proper deduction from income, Inas much as the value of tho crop had not J been taken Into gross Income. The loss of n building or of machinery through storm, lightning, flood, etc., Is ! an nllownblo deduction, but care should be used to nsccrtaln the correct loss sustnlncd, ns restricted by income tnx regulations. No deduction Is allowed in tho case of loss of animals raised on the farm, hut a loss Is deductible from gross income in-come if the animals bad been purchased pur-chased for draft or breeding purposes. Shrinkage In weight or value of farm products held for favorable market prices cannot he deducted ns n loss, for the reason that when such products are sold the shrlnkngo will be reflected In the selling price, i Sale of Farms and Land. ! Tho value of agricultural lands lias J been jumping during the past few i . years, and during 1010 mnny owners sold out pnrt or nil of their lands at l big profits. All Kjich gains constitute I income and must be taken Into tho net s Incomo for tho year. ' Any person who sold part of n farm ! or ranch, or part of n parcel of land, ; must nlso show nny gains realized by the sale. Tho method of figuring gains nnd losses on such transactions is prescribed pre-scribed In tho Incomo Tnx regulations, (copies of which mny bo secured from Internnl Revenue Collectors. 1 Forms for Returns. Tho Internnl Revenue Burenu has issued an Improved Form 1010F for tho uso of farmers. This form, to-, to-, gether with Form 1040A or 10-10, will glvo tho farmer explicit Information as to how to properly flguro his not I Incomo for 1010. J There nro two methods of figuring a farmer's Incomo tax return this year. IIo mny make his return on tho basis ', of tho difference between tho money and goods received for his products and tho cash paid out for nctual allowable allow-able farm expenses within tho year. Or ho may mnko his return on tho nc-orual nc-orual basis, which means computing tho rocelpts nnd expenses that pertain to tho taxable year, excluding Incomo enrned and expenses Incurred la pro- vlous or succeeding years. i i |