OCR Text |
Show FARMERS MUST MAKEREPORT Thousands of farmers whose net income for 1920 equaled or exceeded exceed-ed the exemptions of $1,000 for single sin-gle persons will be required to file on or before March 15, 1921, income tax returns for the year 1920. As an aid to farmers the Bureau of Internal Revenue has prepared a special form 1040F, for recording sal es of livestock, produce and a summary sum-mary of income and expenses. This form should be attached to the taxpayer's tax-payer's individual return on Form 1040 or 1040A. Full instructions for making out the forms are contained con-tained in each. Under gross income a farmer is required tO' include all proceeds derived from the sale of farm products whether produced on a farm or purchased for resale. When he exchanges his produce for groceries, clothing or other merchandise merchan-dise he must include in his income the value of the articles received and .exchanged. Profit received from the sale of farm land or rent received for the use thereof must also be included. in-cluded. In determining his net income, up on which the tax is assessed, the farmer far-mer may deduct all necessary expenses expen-ses incurred in the operation of his farm during the year. These include cost of cultivation, harvesting, and marketing of his crops, the cest of seed and fertilizer use, amount spent in repair to farm buildings other than the dewelling, and to fences and machinery. The cost of farm tools used up in the course of the year, wages paid to employees other than domestic servants, and rent paid for farm land and buildings (other than dwelling) are deductible deduct-ible items. Farmers who keep no records or only records of cash receipts and disbursements dis-bursements should make their reports re-ports on the basis of actual receipts, but farmers who keep complete accounts ac-counts and who take inventories at the beginning and the end of the year to determine their profits should report on the accrual' basis. Both methods are fully explained on form 1040F, copies of which' may be obtained ob-tained from the offices of collectors of internal revenue. |