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THE CANADIAN STATESMAIf. BOWMA"V!LE. ONTAMRO THUTRSDAY, 140V. SM1, 1950 UNTY L Because Faim Income Varies Averagiug Income Is Beneficial States Ottawa Income Tax Expert Due ta circumstances bcyond our contraI, aur last issue did not 1 include an explanation o! the question: "Explain wbat is meant by averaging income andI of what value is it?" Hcrewith is aur interpretation o! the sub- ject as suggested fby income tax expert, D. J. Gill. at the query forum held in Orono, Nov. 21. The privilege o! averaging in- carne for income tax purposes is highly important ta a vcry large number o! farmers and fisher- men who elccita pay their 1950 incarne tax on the basis o! their average incorne for the five tax- ation years 1946, 1947, 1948, 1949 and 1950. It is stipulated, however, that in order ta qualify to aver- age income: (1) a taxpayer's chie! source o! income for eacb year must have been from ither farming or fishing, and (2) he miust have filed incarne tax re- turns, for each year by the date required. Ini as much as wc arc moie particularly interested i farming-farming is said Ia in- clude the tillage o! the soul, live- stock raising, raising o! poultry, fur-farming, dairying, fruit grow- ing and the keeping of becs. It does not include an office or cm- ployment under a person engaged in the business o! farming. Privilege Restricted As may be seen, the privilege o! averaging incarne is definitely restricted. Originally, ibis meth- od o! computing incorne tax was set up on a thrce year basis in 1947. However, the Canadian Federation of Agriculture re- quested that the Government arnend the avcraging period in favour o! one which would lend itsel! ta sirnplificd calculations. With tis in mmnd, the Govern- WHY SHGULD YGUR OLD HORSE BE SflLD TO THE NARGWILL FUR FARM? 1. You get the best price. 2. Tour horse will be killed humanely. 3. Tour horse wilI not be re- sold. (This means it will not go to another farmer, wvhere It might be niistreated). We know nxost farmers apprec- a iate this guarantee. FOR BEST SERVICE- ALWAYS CALL Margwill Fuir Farm R.R. 1, TYRONE PHONE: BOWMANVILLE 2679 For speedy dead farm stock pick-up - Cali us Collect. Tested in Your Soif!, Proved in Your Kilns! NOWBlenaÀ I EVEN MORE ADAPTABLE!, 0 Aga1n for neit season you can get the same high quality Blenn that Ontario growers have provedl produces tobacco wth full-bodied, fine-textured leaves of good colour. But now Blen I8 avallable in an analysis that makes it more versatile -more growers can benefit by its advantages. So order your supply now from your Blenn dealer. I'm for Bie nn 100 pe r cent" That's the recommendation of joseph Kekeý, R.R. No. 1, EdendE on0e lasOnweeMtOnt.,-who adds: "The results 1 got last year using Blenn Plant Food W 0 ý e or tft h addusý'g T Vere outstanding. It is the finest crop I have ever grown in my entire 'od growing experience. The yield was n u nal e exceptional and 1 par- ticularly liked the .ndý g_ It e nes s u ge quality and colour when the large, fine-textured leaves were curd."trt PLANT FOOUD DIVISION P.O. Box 39, New Toronto, Ont. ment repcaled the 3 year b~ase in 1948 and substituteil a base of five ycars. Sbould you elect to average your income this year, you may include. the taxation years 1946 to 1950 ini your return. The next averaging year will bc 1955. The question: "How do I av- erage my income?" will no doubt risc in many minds. As brîefly as possible, this is the way it is donc. The Taxation Division of the Departmcnt of National Revenue publishes a form titled "Election to Average Income" which is pri- marily intended for farmers and fishermen. They may bc obtain- cd from your District Income Tax Office or from the Department.. The form, autborized by the Min- ister and complete in one page, bas one important section, and that section "Calculation of In- come Tax-Averaged Basis" ai- though appearing formidable, is relatively simple to the farmer wbo makes a habit of keeping re- cords. Form Is Explained There are six columns under this section. In the first, num- bcring from 1 t 10, is a brie! -in- dication of the type of entry to be made in the five parallel columns appropriately headcd by the tax- ation years 1946, 1947, 1948, 19491 and 1950. The column on the right is headed "Total" and is self -explanatory. In computing your average in- corne, beside item 1 which rcads, "Net Income," you conter your in- corne for each year. Example. Under 1946 you might bave $2,- 345.67; under 1947 you' might have $6,154.50> and 50 on. Items 2 and 3 arc for charitable dona- tions allowed and medical expen- ses allowed. The total of items two and three is subtracted from item 1 (Net Income) and the re- sulting figure is your "Income Before Personal Exemptions" are deducted. For a married man with no dependents let us say the amounts appcaring frorn 1946 to 1950 are: $2,260; $6,100; $1,200; $6000 and $3,305. Totalling these five amounts across the page gives you your total income. This total, for example could be $20,000. is dividcd by five (the averaging period) and the arn- ount of $4,000 will bc entercd in each column on the ine corres- ponding with item 5 which reads "'Averaged Income (1/5 of Total above) ." Personal Exemptions Item 6 'rcads: "Less: Personal Exemptions." In 1946 there will be no entry made because in that taxation year the allowance for personal exemptions was includ- cd in the tax calculation. In 1947 and 1948, a married man was entitled to $1.500 exemption plus a further exemption for each cbild. In 1949 and 1950, a mar- ricd man's exemption is $2,000 plus a $500 exemption for each child under 16. Subtracting item 6 (exemptions) from item 5 (averaged income) will give you a figure described as "Taxable Averaged Incomne" in item 7. The figures entered beside item 8, are explained as Income TaxI on Taxable Averagcd Incarne ai rates for eacb year" wbicb will bc the truc tax payable on itemn 7, (Taxable Averaged Incorne). Let us say, for exatnple, the figures alongside item 8 and under col- umns reading frorn 1946 to 1950 are: $737.64; $511.74, $426.60; $281.41 and for 1950 $281.41. This gives you a total tax on averaged income of $2,236.80. BUT you have already paid income tax each yegr on your annual repart. Let us say the arnounts were: $268.13; $1,114-26, NIL (you werc not tax- able in 1948-or suffered a loss) and $700 for 1949. Naturally there will be no tax entered for 1950 because you are just making up that rcturn. Totalling these figures gives you $2082.38. paid in over a five year period in in- corne tax. NOW-subtract Ibis total from the total truc tax on vour averaged income. as ahove, and you gel: $2,236.338-less- $2,082.38 wbich gzives you a 1950 tax o!1514.42. Method Saves MoneY Beside item 4, under 1950, ap- pears an amount $3,305.00. If you were paying income tax on ORDER YOUR A CHRISTMAS FOWL 04ee E A RL Y!e!t bà BY ORDERING EARLY YOU SAVE DISAPPOINTMENT AND ARE ASSURED 0F GETTING THE BEST. m DUCKS m CHICKENS -PHONE 3367 WITH YOUR ORDER FREE DELIVERY 0F MEATS AND GROCERIES ALLIN'S Quality Meats and Groceries- M. A. "Pat" Yeo, Proprietor- - 55 KING ST. E. BOIVMANVILLE PHONE 33(.d Prize Potatoes at Royal Fair Bushel basket of the best crop of potatoes grown in Ontario this year is shown with growers Archie (with glasses) and Bill McDougall, Strathroy brothers, who took home the C.I.L. Trophy and $250 cash award at the Royal Winter Fair, Toronto. a ycarly basis, you would bave1 ta pay $201.85 ini 1950. But whcn, you average your income, as above, your 1950 tax is only $154.- 42 whicb represents a saving o! $47.43. By the "avcraging in- corne" rnethod you can spread your lasses over a f ive ycar period instead o! claiming tbem in one year only. If you make application ta av- erage your income and you bave nat got tax rcturns available frorn which ta compute, f ill in the figures you do know and for- ward the return ta tbc Depart- ment o! Incorne Tax with a cov- ering letter requesting them ta complete the form and average your incarne for you. According ta D. J. Gili, cm- playees of tbc Department are bonest people and are flot out to gyp you. If, when you send your form ta Toronto, an assessor finds that "1averaging your incarne" is not ta your advantage, ie: If yau pay a greater tax tbrough this mnetbod o! computation iban you would on a anc year basis, hc wiil advisc you nat to prefer taxation in ibis manner. Saîd Mr. Gill, "We ask that tax which bbc law dcmands, no more-no lcss." File Returns Yeazly The tbing ta remember in tbinking along the ines o! aver- aging incarne is that you must bave filed a regular incorne tax return in 1946. 1947, 1948 andi 1949. When the6 Department is1 going ta average your incarne. they require ail previaus tax rr turns. YOU MUST EVEN FIL AN ORDINARY RETURN FO1, 1950. The Department will give you assistance in- any way bhey possibly can. If yau are in doubt, write .ta tbern, but they request that simple quùestions are not forwarded. Federation of Agriculture Advises Farmers to Establish Basic Herds For Federal Income Tax Purposes Until recently, the Canadian Federation of Agriculture, through the medium of press and farma publications, bas opposed the es- tablishment of Basic Herds. To- day, however, the Federation has changed its viewpoint and accord- ing to R. A. Stewart, past presi- dent of the Ontario Federation of Agriculture and present Chair- man of the Income Tax Commit- tee, it is 100 per cent behind the Basic Herd idea. Mr. Stewart re- lcased this information at the re- cent income tax query forum held at Orono, Nov. 21. Is it advisable to establish a basic herd? Why? The Basic Herd, for income tax purposes, is extended to cattle, horses. sheep and swine. In ord- er to establish one, a taxpayer must complete a "Basic Herd Ap- plication Form" which is obtain- able from any District Income Tax Office or the Minister of Nation- al Revenue at Ottawa. If you are engaged in the pro- duction of livestock or livestock products for sale and you main- tain a permanent herd for that purpose, you mày have such per- manent Herd approved as Basic Herd for income tax purposes. Howcver, although application may be ftiade by any taxpayer who was engaged in livestock op- erations on or after January 1, 1947, there are qualifying stipu- lations. You must have filed in- corne tax returns in each ycar subsequent to originating live- stock operations, or have filed returns for at least three consec- utive years prior to the date you began livestock operations. According to information re- ceived in this office, approval o! a Basic Herd may be applicd for to be effective as of January 1, 1947, if you were engaged in live- stock operations on that date, or it may be applied for on the date o! commencement of operations if such date is subsequent to Jan- uary 1, 1947. Some who were cngaged in livestock production prior to the qualifying da'le may not have accurate records of their herd as far back as 1944, three years prior to the date of com- mencement of Basic Herds. In LINIMENT ~ u .fret3y and- q5 u.c r'if. dFem;ISUL LAGE ONNC tFAtdRy.gNo arrO sult 65C OO such cases, il is essential that It be estabiisbcd you bad a herd during that period and the num- ber of that berd obtained. T. B. tests, sometimes tacked ta barn wails, have been used in the past as verification o! a livcstock herd. A Basic Herd is determined as the number o! "mature animals"' wbicb a -taxpayer can cstabiish ta 'be acquired by (1) gift, (2) in- beritances (3) purchase in any taxation year provided no part o! bbc cost was cbarged against incarne. A farmer who was in the live- stock business as o! January 1, 1947. is entitled ta a Basic Herd consisting o! the total number .-f animals in bis inventary at that date. This, of course, applies ta mature animaIs only. The num- ber o! animais in the initial Basic Herd may lie increased in subse- quent ycars if they arc acquired under any anc o! the stipuiatigns rnentioned in the prcceding para- grapb. A mature animal is anc wbich bas attaincd the actual age o! two ycars in bbc case o! cattie, threc years in the case o! horses *and anc year in the case o! sheep or swinc. Twa immature anirnals, animais whose age is below that mentioned ini the preceding sec- lion, wiil be considcred equival- cnt ta anc mature animal. If a farmer reduces the size o! his Basic Herd by selling part o! it, for example, the difference between. the number o! animais remainingz and the proper total of Basic Herd will be cbnsidered capital disposition. The Basic Herd will be considered capital disposition. The Basic Herd f ig- ure will be reduced ta that o! the number o!. animals remaining, and the money earned from the sale of a part o! that herd is con- eidered capital realization and is not subject to income tax. Here again, the application is made ta mature animals. In order to de- termine the amount of capital re- alization in the above case. the average pricel of aIl animals sold in that year, and whose sale re- duces the Basic Herd, shall be used as the amount o! capital re- PROVIDENCE FORUM Providence Forum thinks that we have adequate medical f a- cilties in this community. This opinion was cxprcssed when we met ai the home o! Mrs. I. Bragg. The topic was "Wbat's Happened ta bbc Country Doctor?" Nurses are at times difficulita gel wbicb shows there is a shortage there. When the new bospital is corn- pletcd there will be fia shortage o! baspital beds in Ibis district. Den- tists are busy and anc must wait for an appointment but there was fia complaint that services arc Inadequate. This is all possible because we lîve close ta a centre of popula- tion. Wc know that there arc many districts where these ser- vices are not available or are very difficult ta get. In Ontario there is one doctor ta about 800 people wbereas New Brunswick bas ônly one ta about 1600 peaple. Meeting next Monday night at the hame o! Mr. and Mrs. Muttan. Topic: "A Pension for Everyonc." YELVERTON FORUM larm Forum was held Mon- nigbt,at the home o! Mr. and Rae Malcolm with 24 mcm- _,.ýcs present. The tapic for the evening was "What's happcned to the Country Doctor?" Il was tbe general opinion o! Uic Forum that the medical ser- vices arc fairly adequate here as far as wc arc concerned. There cauid be larger hospitals and more nurses available as people use the bospitals more now since Hospital Insurance bas core ne m effect. Il was felt that if we had better road conditions, especially in the winter time, it wauld be mare enticing ta country doctors. The gucsts for the evening werc Messrs. Charles Osborne and Walter Rundle, of Bowmanvillc. Bath gentlemen gave some in- teresting information re Federa- lion activities. Mr. Harvey Malcolm then con- ducted a couple o! cantcsts and lunch was servcd. The next meeting will be at the home o! Mr. and Mrs. Murray Malcolmn. BLACKSTOCK FORUM Blackstock Forum is of the opinion that medical services in this community are inadequate. It has become very difficuit for anyone requiring hospitaliz- ation to get a room, some having had to wait for months to get that accommodation. It is very dîffîcuit to secure a special nurse when one is requir- ed and to have a nurse or a prac- tical nurse corne to the home is almost impossible. It was feit that this shortage of hospital accommodation might be discouraging to a doctor in this community just now. But it is hoped that this condition will be improved with the completion of new hospitals now being built in Bowmanville and Port Perry. Oth- erwisc, this community has good schools and other living conditions for a country doctor. The visiting team from the Federation of Agriculture made their annual visit this week, namely Mr. Edgar Nichols and Mr. Weston Bannister. alization. The sale of a female with progeny, if sold together, shall be counted as thc sale of one animal. According ta D. J. Gill, Di.rec- tor o! the Primary Products Di- vision o! the Income Tax Depart- ment, Canada bas the best Basic Herd in the world. "Unquestion- ably," he saîd, "it is the best thing for thc farmer and bis cap- ital assets."' He suggcsted that farmers make an immediate at- tempi to secure explanatory in- formation on the subi ect. In tbis vein, a farmer cannot derive any benefit from a Basic Herd until he applies for one and then only 30 days after the appli- cation has been filed.-1 They brought grectings from the Federation and Mr. Bannister outlined briefly some o! the things the Fcderatioil wcre striv- ing for to aid the agriculturist ta fili their necessary and im- portant place in the economy and welfarc o! the world. About 35 were present at the home o! Mr. and Mrs. Neil Mal- colm for this meeting and were served a dainty lunch by the hostess. Mr. and Mrs. Dalton Dorrdl conducted a contest during the bal! hour o! recreation. Next week's meeting at Mr. Harold Kyte's home. NE WTON VILLE FORUM Newbonville Farm Forum met ai, the home o! Mr. and Mrs. Wil- fred Wood witb 22 present. The topic under discussion for the evening was, "What's Hap- pencd 10 the Country Doctori" The f irst question for discussion was: 1. Arc the medical ser- vices in ygur community ade- quate? We feut that bbc medical services in our community are inadequate. Our nearest doctors are ten miles distant. A doctor situated in cubher Newcastle or Ncwtonville wouid certainly be an asset ta bbc cornmunity. The second - quebtion asked was: What factors in your communîty would be likely ta discourage a doctor from practicing there? One big factor is the lack o! hospital cquiprncnt. However wc feel that the new hospital in Bowman- ville will solve this problern. Our community would wclcorne PAGdcaEdctran bs aml and we would do our best ta malte life pleasant for thcm. A lovely lunch was served by the hostess and a social time spent. Next meeting at the home of Mr. and Mrs. Lloyd Atchison. Fcgrmers Borrowed Over $5 Million Thru Farmn Loan Board The CanadianFarm Loan Board has just issued its twenty-first Annual Report covering opera- tions for the year ended March 31, 1950. The Board is aDe minion Government agency whicî makes long termn mortgage loans to farmers. During the year the Board ap- proved $5,189,400 in loans. Over 60 per cent of this amount wvas for the purchase of land and the refinancing of land secured debt. The amount approved represents a small increase over the pre- vious year and is the largest an- nual volume of business in the last 13 years. The Board's cur- rent investment in farm mort. gages increased by more than $2,000,000 in the last year and now exceeds $26,000,000. Inter- est arrears at March 31, 1950 equalled only .246 per cent. of principal outstanding. The Board makes first mort- gage loans up to $5,000 at 41j per cent repayable over a period flot exceeding 25 years. Thi Board may make additional aC. vances to bring the total loans up- to $6,000 in certain circumstan- ces. Loans are made to pay debts, buy livestock and equip- ment and farm lands, and to erect and repair buildings and make other farm improvements. Two old timers were discussing a mutual friend. Cash Needed Quickly? - Don't SeIl Your Bonds You may need cash in a hurry. and think of selling your bonds to meet that necd. But bonds that have been saved over the years are often pretty hard to replace. 0 And there are better ways of raising the money. Herc's ýwhat 7Mr. Moody, Manager of the local branch of the Bank of Montreal, suggests: 'if you want money for a good purpose, pay us a cail at the B of M. Your bonds will serve as security for one of our low-cost personal loans, and will assure you an appreciably lower rate of interest than for a loan >without such security. As a mat- ter of fact, the intcrest on the bonds very nearly covers the interest on the boan." B of M personal boans can be rrepaid in easy, regular instal- tments. By making use of this service, when you need cash in a hurry, you will proteet that re- 1serve fund you're building for the future. The next time you need monev on short notice talk to Mr. Moody. 4 j SERVICE WHEN YOV, buy equip- ment from us Çou are suÈte that you are going to get service. With every piece of equip- ment we seli you have our guarantee of service. Don't hestitate to give us a cal when in trouble. Our slogan is - "Seýrvice With a Smile" j PRACE 0F MIMD AND SECURITY Th.e married worman wants peace ai mmnd and security for herseif and her family-nioney for food- shelter- clothes -education. The business womari wants peace ai mmnd and security at re- Ask for our pamphlet especially written for women *ntitled "I Want Insurance". It will interest you. C oujederatiou Life N A0 FF c9 Association o a*oN T o j I Branch Office: 169 Charlotte Street, Peterborough. P. J. MATHER, Divisional ManagerI iA e_ vu lie Durham County FARM FORUMS TUIKETS W. Ho, BROWN DEALER FOR Case Farm Machlnery -- Firestone Tires DeLaval Milkers and Separators Beatty Bras. Stable Equipment KING ST. W.. PHONE 497 m GEESE - DURBAbi COUNTY mm g MEMBER OF O.R.F.E.D.ýL 1