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Show YOUR INCOME TAX EXPENSE OF FARMERS A farmer who operates a farm for profit is entitled to deduct from gross income as necessary expenses all amounts expended (other than those constituting capital cap-ital expendituers) in the carrying on of the business of farming. The cost of feeding and raising livestock live-stock may be treated as an expense ex-pense deduction insofar as such costs represent actual outlay, but not including the value of farm produce grown upon the farm or the labor of the taxpayer. Also deductible is the cost of seed, minor repairs to farm buildings (other than the dwelling of the farmer), end small tools used up in the course of a short period. The cost of fuel and oil used for farm work, as well as repairs and maintenance of farm machinery, machin-ery, is deductible as a business expense; but the cost of farm machinery, ma-chinery, equipment, and farm buildings represents a capital investment in-vestment and is not an allowable deduction. The cost, however, may be recovered by depreciation allowances. al-lowances. In the case of the farmer, farm-er, the farm dwelling is not depreciable, de-preciable, except such part of it g s may be used directly in farming farm-ing operations. The cost of gasoline, gaso-line, repairs and upkeep of an automobile au-tomobile if used wholly in connection connec-tion with the taxpayer's farm operations, op-erations, as well as depreciation thereon, may be deducted, but if an automobile is used partly for business and partly for pleasure or the convenience of the taxpayer taxpay-er or his family, the cost of operation op-eration may be apportioned according accord-ing to the extent of the use for purposes of business and for pleasure or convenience, and the portion attributable to business will be deductible as a necessary business expense. The cost of hired laborers and hired machines on a farm and the part , of the ' board which is purchased pur-chased for hired laborers are deductible. de-ductible. The value of products furnished by the farm and used in the board of hired laborers is not a deductible expense. Rations purchase pur-chase and furnished to laborers or sharecroppers are deductible as a part of the labor expense. Amounts paid to persons engaged in household house-hold work to the extent that their services are used in boarding and otherwise caring for farm laborers are .deductible, but amounts paid for services of such employees engaged en-gaged in caring for the farmer's own household are not a deductible deducti-ble expense. Amounts expended in the development de-velopment of farms, orchards, and ranches prior to the time when the productive state is reached may be regarded as investments of capital. The cost of "planting trees, as well as the amounts expended by a farmer in the restoration of soil fertility preparatory to actual production pro-duction of crops and the cost of liming soil to increase productiveness productive-ness over a period of years are capital expenditures; but the cost of commercial fertilizers, the benefit bene-fit of which is of short duration and which have to be used every year or so, even after a farm reaches the productive state, is deductible as an expense. Amounts expended in purchasing work, breeding, or dairy animals are regarded as investments of capital and may be depreciated unless such animals are included in inventory. |