File your Taxes for Free!
  • Get your maximum refund*
  • 100% accurate calculations guaranteed*

TurboTax Federal Free Edition - File Taxes Online

Don't let filing your taxes get you down! We'll help make it as easy as possible. With e-file and direct deposit, there's no faster way to get your refund!

Approved TurboTax Affiliate Site. TurboTax and TurboTax Online, among others, are registered trademarks and/or service marks of Intuit Inc. in the United States and other countries. Other parties' trademarks or service marks are the property of the respective owners.


© 2012 - 2018 All rights reserved.

This is an Approved TurboTax Affiliate site. TurboTax and TurboTax Online, among other are registered trademarks and/or service marks of Intuit, Inc. in the United States and other countries. Other parties' trademarks or service marks are the property of the respective owners.
When discussing "Free e-file", note that state e-file is an additional fee. E-file fees do not apply to New York state returns. Prices are subject to change without notice. E-file and get your refund faster
*If you pay an IRS or state penalty or interest because of a TurboTax calculations error, we'll pay you the penalty and interest.
*Maximum Refund Guarantee - or Your Money Back: If you get a larger refund or smaller tax due from another tax preparation method, we'll refund the applicable TurboTax federal and/or state purchase price paid. TurboTax Federal Free Edition customers are entitled to payment of $14.99 and a refund of your state purchase price paid. Claims must be submitted within sixty (60) days of your TurboTax filing date and no later than 6/15/14. E-file, Audit Defense, Professional Review, Refund Transfer and technical support fees are excluded. This guarantee cannot be combined with the TurboTax Satisfaction (Easy) Guarantee. *We're so confident your return will be done right, we guarantee it. Accurate calculations guaranteed. If you pay an IRS or state penalty or interest because of a TurboTax calculations error, we'll pay you the penalty and interest.
https://turbotax.intuit.com/corp/guarantees.jsp

Amend 2011 Federal Return

File 2006 Taxes Free1040 Es Payment VoucherFree E File Federal And State Tax ReturnCan I Refile My Taxes1040x Irs Form1040 ComIrs Tax Return Forms 2011Amend My Federal Tax Return1040 Tax Forms Printable1040x 2010 FormAmend 2008 Tax Return2011 Irs Form 1040ez1040zFree 1040ezFile 2008 Taxes Online2011 Federal Income Tax Forms 1040 EzH And R Block Free TaxE File Taxes Free2012 Pdf Tax Forms 1040How To File 2010 Taxes In 2013Federal Tax Forms 2011 EzIrs Form Ez 1040Amend Tax ReturnsHow To File 1040ezHow To Fill Out A 1040x Tax Amendment FormState Income Tax Forms 2013H And R Block Tax SoftwareFree Tax SoftwareE File 1040x Free1040 VFile Taxes FreeState Tax Forms 20121040ez Form For 2012Turbotax 20102010 Taxes Cheap 1099g Form W 2Irs Gov 1040x FormTax 1040nrTurbotax Military Discount 20122010 Turbo TaxI Need To File My State Taxes Only

Amend 2011 Federal Return

Amend 2011 federal return 8. Amend 2011 federal return   Amortization Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: How To Deduct Amortization Starting a BusinessBusiness Start-Up Costs Costs of Organizing a Corporation Costs of Organizing a Partnership How To Amortize Getting a Lease Section 197 IntangiblesSection 197 Intangibles Defined Assets That Are Not Section 197 Intangibles Safe Harbor for Creative Property Costs Anti-Churning Rules Incorrect Amount of Amortization Deducted Disposition of Section 197 Intangibles Reforestation Costs Geological and Geophysical Costs Pollution Control FacilitiesNew identifiable treatment facility. Amend 2011 federal return Research and Experimental Costs Optional Write-off of Certain Tax Preferences Introduction Amortization is a method of recovering (deducting) certain capital costs over a fixed period of time. Amend 2011 federal return It is similar to the straight line method of depreciation. Amend 2011 federal return The various amortizable costs covered in this chapter are included in the list below. Amend 2011 federal return However, this chapter does not discuss amortization of bond premium. Amend 2011 federal return For information on that topic, see chapter 3 of Publication 550, Investment Income and Expenses. Amend 2011 federal return Topics - This chapter discusses: Deducting amortization Amortizing costs of starting a business Amortizing costs of getting a lease Amortizing costs of section 197 intangibles Amortizing reforestation costs Amortizing costs of geological and geophysical costs Amortizing costs of pollution control facilities Amortizing costs of research and experimentation Amortizing costs of certain tax preferences Useful Items - You may want to see: Publication 544 Sales and Other Dispositions of Assets 550 Investment Income and Expenses 946 How To Depreciate Property Form (and Instructions) 4562 Depreciation and Amortization 4626 Alternative Minimum Tax—Corporations 6251 Alternative Minimum Tax—Individuals See chapter 12 for information about getting publications and forms. Amend 2011 federal return How To Deduct Amortization To deduct amortization that begins during the current tax year, complete Part VI of Form 4562 and attach it to your income tax return. Amend 2011 federal return To report amortization from previous years, in addition to amortization that begins in the current year, list on Form 4562 each item separately. Amend 2011 federal return For example, in 2012, you began to amortize a lease. Amend 2011 federal return In 2013, you began to amortize a second lease. Amend 2011 federal return Report amortization from the new lease on line 42 of your 2013 Form 4562. Amend 2011 federal return Report amortization from the 2012 lease on line 43 of your 2013 Form 4562. Amend 2011 federal return If you do not have any new amortizable expenses for the current year, you are not required to complete Form 4562 (unless you are claiming depreciation). Amend 2011 federal return Report the current year's deduction for amortization that began in a prior year directly on the “Other deduction” or “Other expense line” of your return. Amend 2011 federal return Starting a Business When you start a business, treat all eligible costs you incur before you begin operating the business as capital expenditures which are part of your basis in the business. Amend 2011 federal return Generally, you recover costs for particular assets through depreciation deductions. Amend 2011 federal return However, you generally cannot recover other costs until you sell the business or otherwise go out of business. Amend 2011 federal return For a discussion on how to treat these costs, see If your attempt to go into business is unsuccessful under Capital Expenses in chapter 1. Amend 2011 federal return For costs paid or incurred after September 8, 2008, you can deduct a limited amount of start-up and organizational costs. Amend 2011 federal return The costs that are not deducted currently can be amortized ratably over a 180-month period. Amend 2011 federal return The amortization period starts with the month you begin operating your active trade or business. Amend 2011 federal return You are not required to attach a statement to make this election. Amend 2011 federal return You can choose to forgo this election by affirmatively electing to capitalize your start-up costs on your income tax return filed by the due date (including extensions) for the tax year in which the active trade or business begins. Amend 2011 federal return Once made, the election to either amortize or capitalize start-up costs is irrevocable and applies to all start-up costs that are related to your trade or business. Amend 2011 federal return See Regulations sections 1. Amend 2011 federal return 195-1, 1. Amend 2011 federal return 248-1, and 1. Amend 2011 federal return 709-1. Amend 2011 federal return For costs paid or incurred after October 22, 2004, and before September 9, 2008, you can elect to deduct a limited amount of business start-up and organizational costs in the year your active trade or business begins. Amend 2011 federal return Any costs not deducted can be amortized ratably over a 180-month period, beginning with the month you begin business. Amend 2011 federal return If the election is made, you must attach any statement required by Regulations sections 1. Amend 2011 federal return 195-1(b), 1. Amend 2011 federal return 248-1(c), and 1. Amend 2011 federal return 709-1(c), as in effect before September 9, 2008. Amend 2011 federal return Note. Amend 2011 federal return You can apply the provisions of Regulations sections 1. Amend 2011 federal return 195-1, 1. Amend 2011 federal return 248-1, and 1. Amend 2011 federal return 709-1 to all business start-up and organizational costs paid or incurred after October 22, 2004, provided the period of limitations on assessment has not expired for the year of the election. Amend 2011 federal return Otherwise, the provisions under Regulations sections 1. Amend 2011 federal return 195-1(b), 1. Amend 2011 federal return 248-1(c), and 1. Amend 2011 federal return 709-1(c), as in effect before September 9, 2008, will apply. Amend 2011 federal return For costs paid or incurred before October 23, 2004, you can elect to amortize business start-up and organization costs over an amortization period of 60 months or more. Amend 2011 federal return See How To Make the Election , later. Amend 2011 federal return The cost must qualify as one of the following. Amend 2011 federal return A business start-up cost. Amend 2011 federal return An organizational cost for a corporation. Amend 2011 federal return An organizational cost for a partnership. Amend 2011 federal return Business Start-Up Costs Start-up costs are amounts paid or incurred for: (a) creating an active trade or business; or (b) investigating the creation or acquisition of an active trade or business. Amend 2011 federal return Start-up costs include amounts paid or incurred in connection with an existing activity engaged in for profit; and for the production of income in anticipation of the activity becoming an active trade or business. Amend 2011 federal return Qualifying costs. Amend 2011 federal return   A start-up cost is amortizable if it meets both of the following tests. Amend 2011 federal return It is a cost you could deduct if you paid or incurred it to operate an existing active trade or business (in the same field as the one you entered into). Amend 2011 federal return It is a cost you pay or incur before the day your active trade or business begins. Amend 2011 federal return   Start-up costs include amounts paid for the following: An analysis or survey of potential markets, products, labor supply, transportation facilities, etc. Amend 2011 federal return Advertisements for the opening of the business. Amend 2011 federal return Salaries and wages for employees who are being trained and their instructors. Amend 2011 federal return Travel and other necessary costs for securing prospective distributors, suppliers, or customers. Amend 2011 federal return Salaries and fees for executives and consultants, or for similar professional services. Amend 2011 federal return Nonqualifying costs. Amend 2011 federal return   Start-up costs do not include deductible interest, taxes, or research and experimental costs. Amend 2011 federal return See Research and Experimental Costs , later. Amend 2011 federal return Purchasing an active trade or business. Amend 2011 federal return   Amortizable start-up costs for purchasing an active trade or business include only investigative costs incurred in the course of a general search for or preliminary investigation of the business. Amend 2011 federal return These are costs that help you decide whether to purchase a business. Amend 2011 federal return Costs you incur in an attempt to purchase a specific business are capital expenses that you cannot amortize. Amend 2011 federal return Example. Amend 2011 federal return On June 1st, you hired an accounting firm and a law firm to assist you in the potential purchase of XYZ, Inc. Amend 2011 federal return They researched XYZ's industry and analyzed the financial projections of XYZ, Inc. Amend 2011 federal return In September, the law firm prepared and submitted a letter of intent to XYZ, Inc. Amend 2011 federal return The letter stated that a binding commitment would result only after a purchase agreement was signed. Amend 2011 federal return The law firm and accounting firm continued to provide services including a review of XYZ's books and records and the preparation of a purchase agreement. Amend 2011 federal return On October 22nd, you signed a purchase agreement with XYZ, Inc. Amend 2011 federal return All amounts paid or incurred to investigate the business before October 22nd are amortizable investigative costs. Amend 2011 federal return Amounts paid on or after that date relate to the attempt to purchase the business and therefore must be capitalized. Amend 2011 federal return Disposition of business. Amend 2011 federal return   If you completely dispose of your business before the end of the amortization period, you can deduct any remaining deferred start-up costs. Amend 2011 federal return However, you can deduct these deferred start-up costs only to the extent they qualify as a loss from a business. Amend 2011 federal return Costs of Organizing a Corporation Amounts paid to organize a corporation are the direct costs of creating the corporation. Amend 2011 federal return Qualifying costs. Amend 2011 federal return   To qualify as an organizational cost, it must be: For the creation of the corporation, Chargeable to a capital account (see chapter 1), Amortized over the life of the corporation if the corporation had a fixed life, and Incurred before the end of the first tax year in which the corporation is in business. Amend 2011 federal return   A corporation using the cash method of accounting can amortize organizational costs incurred within the first tax year, even if it does not pay them in that year. Amend 2011 federal return   Examples of organizational costs include: The cost of temporary directors. Amend 2011 federal return The cost of organizational meetings. Amend 2011 federal return State incorporation fees. Amend 2011 federal return The cost of legal services. Amend 2011 federal return Nonqualifying costs. Amend 2011 federal return   The following items are capital expenses that cannot be amortized: Costs for issuing and selling stock or securities, such as commissions, professional fees, and printing costs. Amend 2011 federal return Costs associated with the transfer of assets to the corporation. Amend 2011 federal return Costs of Organizing a Partnership The costs to organize a partnership are the direct costs of creating the partnership. Amend 2011 federal return Qualifying costs. Amend 2011 federal return   A partnership can amortize an organizational cost only if it meets all the following tests. Amend 2011 federal return It is for the creation of the partnership and not for starting or operating the partnership trade or business. Amend 2011 federal return It is chargeable to a capital account (see chapter 1). Amend 2011 federal return It could be amortized over the life of the partnership if the partnership had a fixed life. Amend 2011 federal return It is incurred by the due date of the partnership return (excluding extensions) for the first tax year in which the partnership is in business. Amend 2011 federal return However, if the partnership uses the cash method of accounting and pays the cost after the end of its first tax year, see Cash method partnership under How To Amortize, later. Amend 2011 federal return It is for a type of item normally expected to benefit the partnership throughout its entire life. Amend 2011 federal return   Organizational costs include the following fees. Amend 2011 federal return Legal fees for services incident to the organization of the partnership, such as negotiation and preparation of the partnership agreement. Amend 2011 federal return Accounting fees for services incident to the organization of the partnership. Amend 2011 federal return Filing fees. Amend 2011 federal return Nonqualifying costs. Amend 2011 federal return   The following costs cannot be amortized. Amend 2011 federal return The cost of acquiring assets for the partnership or transferring assets to the partnership. Amend 2011 federal return The cost of admitting or removing partners, other than at the time the partnership is first organized. Amend 2011 federal return The cost of making a contract concerning the operation of the partnership trade or business including a contract between a partner and the partnership. Amend 2011 federal return The costs for issuing and marketing interests in the partnership such as brokerage, registration, and legal fees and printing costs. Amend 2011 federal return These “syndication fees” are capital expenses that cannot be depreciated or amortized. Amend 2011 federal return Liquidation of partnership. Amend 2011 federal return   If a partnership is liquidated before the end of the amortization period, the unamortized amount of qualifying organizational costs can be deducted in the partnership's final tax year. Amend 2011 federal return However, these costs can be deducted only to the extent they qualify as a loss from a business. Amend 2011 federal return How To Amortize Deduct start-up and organizational costs in equal amounts over the applicable amortization period (discussed earlier). Amend 2011 federal return You can choose an amortization period for start-up costs that is different from the period you choose for organizational costs, as long as both are not less than the applicable amortization period. Amend 2011 federal return Once you choose an amortization period, you cannot change it. Amend 2011 federal return To figure your deduction, divide your total start-up or organizational costs by the months in the amortization period. Amend 2011 federal return The result is the amount you can deduct for each month. Amend 2011 federal return Cash method partnership. Amend 2011 federal return   A partnership using the cash method of accounting can deduct an organizational cost only if it has been paid by the end of the tax year. Amend 2011 federal return However, any cost the partnership could have deducted as an organizational cost in an earlier tax year (if it had been paid that year) can be deducted in the tax year of payment. Amend 2011 federal return How To Make the Election To elect to amortize start-up or organizational costs, you must complete and attach Form 4562 to your return for the first tax year you are in business. Amend 2011 federal return You may also be required to attach an accompanying statement (described later) to your return. Amend 2011 federal return For start-up or organizational costs paid or incurred after September 8, 2008, an accompanying statement is not required. Amend 2011 federal return Generally, for start-up or organizational costs paid or incurred before September 9, 2008, and after October 22, 2004, unless you choose to apply Regulations sections 1. Amend 2011 federal return 195-1, 1. Amend 2011 federal return 248-1, and 1. Amend 2011 federal return 709-1, you must also attach an accompanying statement to elect to amortize the costs. Amend 2011 federal return If you have both start-up and organizational costs, attach a separate statement (if required) to your return for each type of cost. Amend 2011 federal return See Starting a Business , earlier, for more information. Amend 2011 federal return Generally, you must file the return by the due date (including any extensions). Amend 2011 federal return However, if you timely filed your return for the year without making the election, you can still make the election by filing an amended return within 6 months of the due date of the return (excluding extensions). Amend 2011 federal return For more information, see the instructions for Part VI of Form 4562. Amend 2011 federal return You can choose to forgo the election to amortize by affirmatively electing to capitalize your start-up or organizational costs on your income tax return filed by the due date (including extensions) for the tax year in which the active trade or business begins. Amend 2011 federal return Note. Amend 2011 federal return The election to either amortize or capitalize start-up or organizational costs is irrevocable and applies to all start-up and organizational costs that are related to the trade or business. Amend 2011 federal return If your business is organized as a corporation or partnership, only the corporation or partnership can elect to amortize its start-up or organizational costs. Amend 2011 federal return A shareholder or partner cannot make this election. Amend 2011 federal return You, as a shareholder or partner, cannot amortize any costs you incur in setting up your corporation or partnership. Amend 2011 federal return Only the corporation or partnership can amortize these costs. Amend 2011 federal return However, you, as an individual, can elect to amortize costs you incur to investigate an interest in an existing partnership. Amend 2011 federal return These costs qualify as business start-up costs if you acquire the partnership interest. Amend 2011 federal return Start-up costs election statement. Amend 2011 federal return   If you elect to amortize your start-up costs, attach a separate statement (if required) that contains the following information. Amend 2011 federal return A description of the business to which the start-up costs relate. Amend 2011 federal return A description of each start-up cost incurred. Amend 2011 federal return The month your active business began (or was acquired). Amend 2011 federal return The number of months in your amortization period (which is generally 180 months). Amend 2011 federal return Filing the statement early. Amend 2011 federal return   You can elect to amortize your start-up costs by filing the statement with a return for any tax year before the year your active business begins. Amend 2011 federal return If you file the statement early, the election becomes effective in the month of the tax year your active business begins. Amend 2011 federal return Revised statement. Amend 2011 federal return   You can file a revised statement to include any start-up costs not included in your original statement. Amend 2011 federal return However, you cannot include on the revised statement any cost you previously treated on your return as a cost other than a start-up cost. Amend 2011 federal return You can file the revised statement with a return filed after the return on which you elected to amortize your start-up costs. Amend 2011 federal return Organizational costs election statement. Amend 2011 federal return   If you elect to amortize your corporation's or partnership's organizational costs, attach a separate statement (if required) that contains the following information. Amend 2011 federal return A description of each cost. Amend 2011 federal return The amount of each cost. Amend 2011 federal return The date each cost was incurred. Amend 2011 federal return The month your corporation or partnership began active business (or acquired the business). Amend 2011 federal return The number of months in your amortization period (which is generally 180 months). Amend 2011 federal return Partnerships. Amend 2011 federal return   The statement prepared for a cash basis partnership must also indicate the amount paid before the end of the year for each cost. Amend 2011 federal return   You do not need to separately list any partnership organizational cost that is less than $10. Amend 2011 federal return Instead, you can list the total amount of these costs with the dates the first and last costs were incurred. Amend 2011 federal return   After a partnership makes the election to amortize organizational costs, it can later file an amended return to include additional organizational costs not included in the partnership's original return and statement. Amend 2011 federal return Getting a Lease If you get a lease for business property, you may recover the cost of acquiring the lease by amortizing it over the term of the lease. Amend 2011 federal return The term of the lease for amortization purposes generally includes all renewal options (and any other period for which you and the lessor reasonably expect the lease to be renewed). Amend 2011 federal return However, renewal periods are not included if 75% or more of the cost of acquiring the lease is for the term of the lease remaining on the acquisition date (not including any period for which you may choose to renew, extend, or continue the lease). Amend 2011 federal return For more information on the costs of getting a lease, see Cost of Getting a Lease in  chapter 3. Amend 2011 federal return How to amortize. Amend 2011 federal return   Enter your deduction in Part VI of Form 4562 if you are deducting amortization that begins during the current year, or on the appropriate line of your tax return if you are not otherwise required to file Form 4562. Amend 2011 federal return Section 197 Intangibles Generally, you may amortize the capitalized costs of “section 197 intangibles” (defined later) ratably over a 15-year period. Amend 2011 federal return You must amortize these costs if you hold the section 197 intangibles in connection with your trade or business or in an activity engaged in for the production of income. Amend 2011 federal return You may not be able to amortize section 197 intangibles acquired in a transaction that did not result in a significant change in ownership or use. Amend 2011 federal return See Anti-Churning Rules, later. Amend 2011 federal return Your amortization deduction each year is the applicable part of the intangible's adjusted basis (for purposes of determining gain), figured by amortizing it ratably over 15 years (180 months). Amend 2011 federal return The 15-year period begins with the later of: The month the intangible is acquired, or The month the trade or business or activity engaged in for the production of income begins. Amend 2011 federal return You cannot deduct amortization for the month you dispose of the intangible. Amend 2011 federal return If you pay or incur an amount that increases the basis of an amortizable section 197 intangible after the 15-year period begins, amortize it over the remainder of the 15-year period beginning with the month the basis increase occurs. Amend 2011 federal return You are not allowed any other depreciation or amortization deduction for an amortizable section 197 intangible. Amend 2011 federal return Tax-exempt use property subject to a lease. Amend 2011 federal return   The amortization period for any section 197 intangible leased under a lease agreement entered into after March 12, 2004, to a tax-exempt organization, governmental unit, or foreign person or entity (other than a partnership), shall not be less than 125 percent of the lease term. Amend 2011 federal return Cost attributable to other property. Amend 2011 federal return   The rules for section 197 intangibles do not apply to any amount that is included in determining the cost of property that is not a section 197 intangible. Amend 2011 federal return For example, if the cost of computer software is not separately stated from the cost of hardware or other tangible property and you consistently treat it as part of the cost of the hardware or other tangible property, these rules do not apply. Amend 2011 federal return Similarly, none of the cost of acquiring real property held for the production of rental income is considered the cost of goodwill, going concern value, or any other section 197 intangible. Amend 2011 federal return Section 197 Intangibles Defined The following assets are section 197 intangibles and must be amortized over 180 months: Goodwill; Going concern value; Workforce in place; Business books and records, operating systems, or any other information base, including lists or other information concerning current or prospective customers; A patent, copyright, formula, process, design, pattern, know-how, format, or similar item; A customer-based intangible; A supplier-based intangible; Any item similar to items (3) through (7); A license, permit, or other right granted by a governmental unit or agency (including issuances and renewals); A covenant not to compete entered into in connection with the acquisition of an interest in a trade or business; Any franchise, trademark, or trade name; and A contract for the use of, or a term interest in, any item in this list. Amend 2011 federal return You cannot amortize any of the intangibles listed in items (1) through (8) that you created rather than acquired unless you created them in acquiring assets that make up a trade or business or a substantial part of a trade or business. Amend 2011 federal return Goodwill. Amend 2011 federal return   This is the value of a trade or business based on expected continued customer patronage due to its name, reputation, or any other factor. Amend 2011 federal return Going concern value. Amend 2011 federal return   This is the additional value of a trade or business that attaches to property because the property is an integral part of an ongoing business activity. Amend 2011 federal return It includes value based on the ability of a business to continue to function and generate income even though there is a change in ownership (but does not include any other section 197 intangible). Amend 2011 federal return It also includes value based on the immediate use or availability of an acquired trade or business, such as the use of earnings during any period in which the business would not otherwise be available or operational. Amend 2011 federal return Workforce in place, etc. Amend 2011 federal return   This includes the composition of a workforce (for example, its experience, education, or training). Amend 2011 federal return It also includes the terms and conditions of employment, whether contractual or otherwise, and any other value placed on employees or any of their attributes. Amend 2011 federal return   For example, you must amortize the part of the purchase price of a business that is for the existence of a highly skilled workforce. Amend 2011 federal return Also, you must amortize the cost of acquiring an existing employment contract or relationship with employees or consultants. Amend 2011 federal return Business books and records, etc. Amend 2011 federal return   This includes the intangible value of technical manuals, training manuals or programs, data files, and accounting or inventory control systems. Amend 2011 federal return It also includes the cost of customer lists, subscription lists, insurance expirations, patient or client files, and lists of newspaper, magazine, radio, and television advertisers. Amend 2011 federal return Patents, copyrights, etc. Amend 2011 federal return   This includes package design, computer software, and any interest in a film, sound recording, videotape, book, or other similar property, except as discussed later under Assets That Are Not Section 197 Intangibles . Amend 2011 federal return Customer-based intangible. Amend 2011 federal return   This is the composition of market, market share, and any other value resulting from the future provision of goods or services because of relationships with customers in the ordinary course of business. Amend 2011 federal return For example, you must amortize the part of the purchase price of a business that is for the existence of the following intangibles. Amend 2011 federal return A customer base. Amend 2011 federal return A circulation base. Amend 2011 federal return An undeveloped market or market growth. Amend 2011 federal return Insurance in force. Amend 2011 federal return A mortgage servicing contract. Amend 2011 federal return An investment management contract. Amend 2011 federal return Any other relationship with customers involving the future provision of goods or services. Amend 2011 federal return   Accounts receivable or other similar rights to income for goods or services provided to customers before the acquisition of a trade or business are not section 197 intangibles. Amend 2011 federal return Supplier-based intangible. Amend 2011 federal return   A supplier-based intangible is the value resulting from the future acquisitions, (through contract or other relationships with suppliers in the ordinary course of business) of goods or services that you will sell or use. Amend 2011 federal return The amount you pay or incur for supplier-based intangibles includes, for example, any portion of the purchase price of an acquired trade or business that is attributable to the existence of a favorable relationship with persons providing distribution services (such as a favorable shelf or display space or a retail outlet), or the existence of favorable supply contracts. Amend 2011 federal return Do not include any amount required to be paid for the goods or services to honor the terms of the agreement or other relationship. Amend 2011 federal return Also, see Assets That Are Not Section 197 Intangibles below. Amend 2011 federal return Government-granted license, permit, etc. Amend 2011 federal return   This is any right granted by a governmental unit or an agency or instrumentality of a governmental unit. Amend 2011 federal return For example, you must amortize the capitalized costs of acquiring (including issuing or renewing) a liquor license, a taxicab medallion or license, or a television or radio broadcasting license. Amend 2011 federal return Covenant not to compete. Amend 2011 federal return   Section 197 intangibles include a covenant not to compete (or similar arrangement) entered into in connection with the acquisition of an interest in a trade or business, or a substantial portion of a trade or business. Amend 2011 federal return An interest in a trade or business includes an interest in a partnership or a corporation engaged in a trade or business. Amend 2011 federal return   An arrangement that requires the former owner to perform services (or to provide property or the use of property) is not similar to a covenant not to compete to the extent the amount paid under the arrangement represents reasonable compensation for those services or for that property or its use. Amend 2011 federal return Franchise, trademark, or trade name. Amend 2011 federal return   A franchise, trademark, or trade name is a section 197 intangible. Amend 2011 federal return You must amortize its purchase or renewal costs, other than certain contingent payments that you can deduct currently. Amend 2011 federal return For information on currently deductible contingent payments, see chapter 11. Amend 2011 federal return Professional sports franchise. Amend 2011 federal return   A franchise engaged in professional sports and any intangible assets acquired in connection with acquiring the franchise (including player contracts) is a section 197 intangible amortizable over a 15-year period. Amend 2011 federal return Contract for the use of, or a term interest in, a section 197 intangible. Amend 2011 federal return   Section 197 intangibles include any right under a license, contract, or other arrangement providing for the use of any section 197 intangible. Amend 2011 federal return It also includes any term interest in any section 197 intangible, whether the interest is outright or in trust. Amend 2011 federal return Assets That Are Not Section 197 Intangibles The following assets are not section 197 intangibles. Amend 2011 federal return Any interest in a corporation, partnership, trust, or estate. Amend 2011 federal return Any interest under an existing futures contract, foreign currency contract, notional principal contract, interest rate swap, or similar financial contract. Amend 2011 federal return Any interest in land. Amend 2011 federal return Most computer software. Amend 2011 federal return (See Computer software , later. Amend 2011 federal return ) Any of the following assets not acquired in connection with the acquisition of a trade or business or a substantial part of a trade or business. Amend 2011 federal return An interest in a film, sound recording, video tape, book, or similar property. Amend 2011 federal return A right to receive tangible property or services under a contract or from a governmental agency. Amend 2011 federal return An interest in a patent or copyright. Amend 2011 federal return Certain rights that have a fixed duration or amount. Amend 2011 federal return (See Rights of fixed duration or amount , later. Amend 2011 federal return ) An interest under either of the following. Amend 2011 federal return An existing lease or sublease of tangible property. Amend 2011 federal return A debt that was in existence when the interest was acquired. Amend 2011 federal return A right to service residential mortgages unless the right is acquired in connection with the acquisition of a trade or business or a substantial part of a trade or business. Amend 2011 federal return Certain transaction costs incurred by parties to a corporate organization or reorganization in which any part of a gain or loss is not recognized. Amend 2011 federal return Intangible property that is not amortizable under the rules for section 197 intangibles can be depreciated if it meets certain requirements. Amend 2011 federal return You generally must use the straight line method over its useful life. Amend 2011 federal return For certain intangibles, the depreciation period is specified in the law and regulations. Amend 2011 federal return For example, the depreciation period for computer software that is not a section 197 intangible is generally 36 months. Amend 2011 federal return For more information on depreciating intangible property, see Intangible Property under What Method Can You Use To Depreciate Your Property? in chapter 1 of Publication 946. Amend 2011 federal return Computer software. Amend 2011 federal return   Section 197 intangibles do not include the following types of computer software. Amend 2011 federal return Software that meets all the following requirements. Amend 2011 federal return It is, or has been, readily available for purchase by the general public. Amend 2011 federal return It is subject to a nonexclusive license. Amend 2011 federal return It has not been substantially modified. Amend 2011 federal return This requirement is considered met if the cost of all modifications is not more than the greater of 25% of the price of the publicly available unmodified software or $2,000. Amend 2011 federal return Software that is not acquired in connection with the acquisition of a trade or business or a substantial part of a trade or business. Amend 2011 federal return Computer software defined. Amend 2011 federal return   Computer software includes all programs designed to cause a computer to perform a desired function. Amend 2011 federal return It also includes any database or similar item that is in the public domain and is incidental to the operation of qualifying software. Amend 2011 federal return Rights of fixed duration or amount. Amend 2011 federal return   Section 197 intangibles do not include any right under a contract or from a governmental agency if the right is acquired in the ordinary course of a trade or business (or in an activity engaged in for the production of income) but not as part of a purchase of a trade or business and either: Has a fixed life of less than 15 years, or Is of a fixed amount that, except for the rules for section 197 intangibles, would be recovered under a method similar to the unit-of-production method of cost recovery. Amend 2011 federal return However, this does not apply to the following intangibles. Amend 2011 federal return Goodwill. Amend 2011 federal return Going concern value. Amend 2011 federal return A covenant not to compete. Amend 2011 federal return A franchise, trademark, or trade name. Amend 2011 federal return A customer-related information base, customer-based intangible, or similar item. Amend 2011 federal return Safe Harbor for Creative Property Costs If you are engaged in the trade or business of film production, you may be able to amortize the creative property costs for properties not set for production within 3 years of the first capitalized transaction. Amend 2011 federal return You may amortize these costs ratably over a 15-year period beginning on the first day of the second half of the tax year in which you properly write off the costs for financial accounting purposes. Amend 2011 federal return If, during the 15-year period, you dispose of the creative property rights, you must continue to amortize the costs over the remainder of the 15-year period. Amend 2011 federal return Creative property costs include costs paid or incurred to acquire and develop screenplays, scripts, story outlines, motion picture production rights to books and plays, and other similar properties for purposes of potential future film development, production, and exploitation. Amend 2011 federal return Amortize these costs using the rules of Revenue Procedure 2004-36. Amend 2011 federal return For more information, see Revenue Procedure 2004-36, 2004-24 I. Amend 2011 federal return R. Amend 2011 federal return B. Amend 2011 federal return 1063, available at  www. Amend 2011 federal return irs. Amend 2011 federal return gov/irb/2004-24_IRB/ar16. Amend 2011 federal return html. Amend 2011 federal return A change in the treatment of creative property costs is a change in method of accounting. Amend 2011 federal return Anti-Churning Rules Anti-churning rules prevent you from amortizing most section 197 intangibles if the transaction in which you acquired them did not result in a significant change in ownership or use. Amend 2011 federal return These rules apply to goodwill and going concern value, and to any other section 197 intangible that is not otherwise depreciable or amortizable. Amend 2011 federal return Under the anti-churning rules, you cannot use 15-year amortization for the intangible if any of the following conditions apply. Amend 2011 federal return You or a related person (defined later) held or used the intangible at any time from July 25, 1991, through August 10, 1993. Amend 2011 federal return You acquired the intangible from a person who held it at any time during the period in (1) and, as part of the transaction, the user did not change. Amend 2011 federal return You granted the right to use the intangible to a person (or a person related to that person) who held or used it at any time during the period in (1). Amend 2011 federal return This applies only if the transaction in which you granted the right and the transaction in which you acquired the intangible are part of a series of related transactions. Amend 2011 federal return See Related person , later, for more information. Amend 2011 federal return Exceptions. Amend 2011 federal return   The anti-churning rules do not apply in the following situations. Amend 2011 federal return You acquired the intangible from a decedent and its basis was stepped up to its fair market value. Amend 2011 federal return The intangible was amortizable as a section 197 intangible by the seller or transferor you acquired it from. Amend 2011 federal return This exception does not apply if the transaction in which you acquired the intangible and the transaction in which the seller or transferor acquired it are part of a series of related transactions. Amend 2011 federal return The gain-recognition exception, discussed later, applies. Amend 2011 federal return Related person. Amend 2011 federal return   For purposes of the anti-churning rules, the following are related persons. Amend 2011 federal return An individual and his or her brothers, sisters, half-brothers, half-sisters, spouse, ancestors (parents, grandparents, etc. Amend 2011 federal return ), and lineal descendants (children, grandchildren, etc. Amend 2011 federal return ). Amend 2011 federal return A corporation and an individual who owns, directly or indirectly, more than 20% of the value of the corporation's outstanding stock. Amend 2011 federal return Two corporations that are members of the same controlled group as defined in section 1563(a) of the Internal Revenue Code, except that “more than 20%” is substituted for “at least 80%” in that definition and the determination is made without regard to subsections (a)(4) and (e)(3)(C) of section 1563. Amend 2011 federal return (For an exception, see section 1. Amend 2011 federal return 197-2(h)(6)(iv) of the regulations. Amend 2011 federal return ) A trust fiduciary and a corporation if more than 20% of the value of the corporation's outstanding stock is owned, directly or indirectly, by or for the trust or grantor of the trust. Amend 2011 federal return The grantor and fiduciary, and the fiduciary and beneficiary, of any trust. Amend 2011 federal return The fiduciaries of two different trusts, and the fiduciaries and beneficiaries of two different trusts, if the same person is the grantor of both trusts. Amend 2011 federal return The executor and beneficiary of an estate. Amend 2011 federal return A tax-exempt educational or charitable organization and a person who directly or indirectly controls the organization (or whose family members control it). Amend 2011 federal return A corporation and a partnership if the same persons own more than 20% of the value of the outstanding stock of the corporation and more than 20% of the capital or profits interest in the partnership. Amend 2011 federal return Two S corporations, and an S corporation and a regular corporation, if the same persons own more than 20% of the value of the outstanding stock of each corporation. Amend 2011 federal return Two partnerships if the same persons own, directly or indirectly, more than 20% of the capital or profits interests in both partnerships. Amend 2011 federal return A partnership and a person who owns, directly or indirectly, more than 20% of the capital or profits interests in the partnership. Amend 2011 federal return Two persons who are engaged in trades or businesses under common control (as described in section 41(f)(1) of the Internal Revenue Code). Amend 2011 federal return When to determine relationship. Amend 2011 federal return   Persons are treated as related if the relationship existed at the following time. Amend 2011 federal return In the case of a single transaction, immediately before or immediately after the transaction in which the intangible was acquired. Amend 2011 federal return In the case of a series of related transactions (or a series of transactions that comprise a qualified stock purchase under section 338(d)(3) of the Internal Revenue Code), immediately before the earliest transaction or immediately after the last transaction. Amend 2011 federal return Ownership of stock. Amend 2011 federal return   In determining whether an individual directly or indirectly owns any of the outstanding stock of a corporation, the following rules apply. Amend 2011 federal return Rule 1. Amend 2011 federal return   Stock directly or indirectly owned by or for a corporation, partnership, estate, or trust is considered owned proportionately by or for its shareholders, partners, or beneficiaries. Amend 2011 federal return Rule 2. Amend 2011 federal return   An individual is considered to own the stock directly or indirectly owned by or for his or her family. Amend 2011 federal return Family includes only brothers and sisters, half-brothers and half-sisters, spouse, ancestors, and lineal descendants. Amend 2011 federal return Rule 3. Amend 2011 federal return   An individual owning (other than by applying Rule 2) any stock in a corporation is considered to own the stock directly or indirectly owned by or for his or her partner. Amend 2011 federal return Rule 4. Amend 2011 federal return   For purposes of applying Rule 1, 2, or 3, treat stock constructively owned by a person under Rule 1 as actually owned by that person. Amend 2011 federal return Do not treat stock constructively owned by an individual under Rule 2 or 3 as owned by the individual for reapplying Rule 2 or 3 to make another person the constructive owner of the stock. Amend 2011 federal return Gain-recognition exception. Amend 2011 federal return   This exception to the anti-churning rules applies if the person you acquired the intangible from (the transferor) meets both of the following requirements. Amend 2011 federal return That person would not be related to you (as described under Related person , earlier) if the 20% test for ownership of stock and partnership interests were replaced by a 50% test. Amend 2011 federal return That person chose to recognize gain on the disposition of the intangible and pay income tax on the gain at the highest tax rate. Amend 2011 federal return See chapter 2 in Publication 544 for information on making this choice. Amend 2011 federal return   If this exception applies, the anti-churning rules apply only to the amount of your adjusted basis in the intangible that is more than the gain recognized by the transferor. Amend 2011 federal return Notification. Amend 2011 federal return   If the person you acquired the intangible from chooses to recognize gain under the rules for this exception, that person must notify you in writing by the due date of the return on which the choice is made. Amend 2011 federal return Anti-abuse rule. Amend 2011 federal return   You cannot amortize any section 197 intangible acquired in a transaction for which the principal purpose was either of the following. Amend 2011 federal return To avoid the requirement that the intangible be acquired after August 10, 1993. Amend 2011 federal return To avoid any of the anti-churning rules. Amend 2011 federal return More information. Amend 2011 federal return   For more information about the anti-churning rules, including additional rules for partnerships, see Regulations section 1. Amend 2011 federal return 197-2(h). Amend 2011 federal return Incorrect Amount of Amortization Deducted If you later discover that you deducted an incorrect amount for amortization for a section 197 intangible in any year, you may be able to make a correction for that year by filing an amended return. Amend 2011 federal return See Amended Return , next. Amend 2011 federal return If you are not allowed to make the correction on an amended return, you can change your accounting method to claim the correct amortization. Amend 2011 federal return See Changing Your Accounting Method , later. Amend 2011 federal return Amended Return If you deducted an incorrect amount for amortization, you can file an amended return to correct the following. Amend 2011 federal return A mathematical error made in any year. Amend 2011 federal return A posting error made in any year. Amend 2011 federal return An amortization deduction for a section 197 intangible for which you have not adopted a method of accounting. Amend 2011 federal return When to file. Amend 2011 federal return   If an amended return is allowed, you must file it by the later of the following dates. Amend 2011 federal return 3 years from the date you filed your original return for the year in which you did not deduct the correct amount. Amend 2011 federal return (A return filed early is considered filed on the due date. Amend 2011 federal return ) 2 years from the time you paid your tax for that year. Amend 2011 federal return Changing Your Accounting Method Generally, you must get IRS approval to change your method of accounting. Amend 2011 federal return File Form 3115, Application for Change in Accounting Method, to request a change to a permissible method of accounting for amortization. Amend 2011 federal return The following are examples of a change in method of accounting for amortization. Amend 2011 federal return A change in the amortization method, period of recovery, or convention of an amortizable asset. Amend 2011 federal return A change in the accounting for amortizable assets from a single asset account to a multiple asset account (pooling), or vice versa. Amend 2011 federal return A change in the accounting for amortizable assets from one type of multiple asset account to a different type of multiple asset account. Amend 2011 federal return Changes in amortization that are not a change in method of accounting include the following: A change in computing amortization in the tax year in which your use of the asset changes. Amend 2011 federal return An adjustment in the useful life of an amortizable asset. Amend 2011 federal return Generally, the making of a late amortization election or the revocation of a timely valid amortization election. Amend 2011 federal return Any change in the placed-in-service date of an amortizable asset. Amend 2011 federal return See Regulations section 1. Amend 2011 federal return 446-1(e)(2)(ii)(a) for more information and examples. Amend 2011 federal return Automatic approval. Amend 2011 federal return   In some instances, you may be able to get automatic approval from the IRS to change your method of accounting for amortization. Amend 2011 federal return For a list of automatic accounting method changes, see the Instructions for Form 3115. Amend 2011 federal return Also see the Instructions for Form 3115 for more information on getting approval, automatic approval procedures, and a list of exceptions to the automatic approval process. Amend 2011 federal return For more information, see Revenue Procedure 2006-12, as modified by Revenue Procedure 2006-37, and Revenue Procedure 2008-52, as amplified, clarified, and modified by Revenue Procedure 2009-39, as clarified and modified by Revenue Procedure 2011-14, as modified and amplified by Revenue Procedure 2011-22, as modified by Revenue Procedure 2012-39, or any successor. Amend 2011 federal return See Revenue Procedure 2006-12, 2006-3 I. Amend 2011 federal return R. Amend 2011 federal return B. Amend 2011 federal return 310, available at  www. Amend 2011 federal return irs. Amend 2011 federal return gov/irb/2006-03_IRB/ar14. Amend 2011 federal return html. Amend 2011 federal return  See Revenue Procedure 2006-37, 2006-38 I. Amend 2011 federal return R. Amend 2011 federal return B. Amend 2011 federal return 499, available at  www. Amend 2011 federal return irs. Amend 2011 federal return gov/irb/2006-38_IRB/ar10. Amend 2011 federal return html. Amend 2011 federal return  See Revenue Procedure 2008-52, 2008-36 I. Amend 2011 federal return R. Amend 2011 federal return B. Amend 2011 federal return 587, available at www. Amend 2011 federal return irs. Amend 2011 federal return gov/irb/2008-36_IRB/ar09. Amend 2011 federal return html. Amend 2011 federal return  See Revenue Procedure 2009-39, 2009-38 I. Amend 2011 federal return R. Amend 2011 federal return B. Amend 2011 federal return 371, available at  www. Amend 2011 federal return irs. Amend 2011 federal return gov/irb/2009-38_IRB/ar08. Amend 2011 federal return html. Amend 2011 federal return  See Revenue Procedure 2011-14, 2011-4 I. Amend 2011 federal return R. Amend 2011 federal return B. Amend 2011 federal return 330, available at  www. Amend 2011 federal return irs. Amend 2011 federal return gov/irb/2011-04_IRB/ar08. Amend 2011 federal return html. Amend 2011 federal return  See Revenue Procedure 2011-22, 2011-18 I. Amend 2011 federal return R. Amend 2011 federal return B. Amend 2011 federal return 737, available at  www. Amend 2011 federal return irs. Amend 2011 federal return gov/irb/2011-18_IRB/ar08. Amend 2011 federal return html. Amend 2011 federal return Also, see Revenue Procedure 2012-39, 2012-41 I. Amend 2011 federal return R. Amend 2011 federal return B. Amend 2011 federal return 470 available at www. Amend 2011 federal return irs. Amend 2011 federal return gov/irb/2012-41_IRB/index. Amend 2011 federal return html. Amend 2011 federal return Disposition of Section 197 Intangibles A section 197 intangible is treated as depreciable property used in your trade or business. Amend 2011 federal return If you held the intangible for more than 1 year, any gain on its disposition, up to the amount of allowable amortization, is ordinary income (section 1245 gain). Amend 2011 federal return If multiple section 197 intangibles are disposed of in a single transaction or a series of related transactions, treat all of the section 197 intangibles as if they were a single asset for purposes of determining the amount of gain that is ordinary income. Amend 2011 federal return Any remaining gain, or any loss, is a section 1231 gain or loss. Amend 2011 federal return If you held the intangible 1 year or less, any gain or loss on its disposition is an ordinary gain or loss. Amend 2011 federal return For more information on ordinary or capital gain or loss on business property, see chapter 3 in Publication 544. Amend 2011 federal return Nondeductible loss. Amend 2011 federal return   You cannot deduct any loss on the disposition or worthlessness of a section 197 intangible that you acquired in the same transaction (or series of related transactions) as other section 197 intangibles you still have. Amend 2011 federal return Instead, increase the adjusted basis of each remaining amortizable section 197 intangible by a proportionate part of the nondeductible loss. Amend 2011 federal return Figure the increase by multiplying the nondeductible loss on the disposition of the intangible by the following fraction. Amend 2011 federal return The numerator is the adjusted basis of each remaining intangible on the date of the disposition. Amend 2011 federal return The denominator is the total adjusted bases of all remaining amortizable section 197 intangibles on the date of the disposition. Amend 2011 federal return Covenant not to compete. Amend 2011 federal return   A covenant not to compete, or similar arrangement, is not considered disposed of or worthless before you dispose of your entire interest in the trade or business for which you entered into the covenant. Amend 2011 federal return Nonrecognition transfers. Amend 2011 federal return   If you acquire a section 197 intangible in a nonrecognition transfer, you are treated as the transferor with respect to the part of your adjusted basis in the intangible that is not more than the transferor's adjusted basis. Amend 2011 federal return You amortize this part of the adjusted basis over the intangible's remaining amortization period in the hands of the transferor. Amend 2011 federal return Nonrecognition transfers include transfers to a corporation, partnership contributions and distributions, like-kind exchanges, and involuntary conversions. Amend 2011 federal return   In a like-kind exchange or involuntary conversion of a section 197 intangible, you must continue to amortize the part of your adjusted basis in the acquired intangible that is not more than your adjusted basis in the exchanged or converted intangible over the remaining amortization period of the exchanged or converted intangible. Amend 2011 federal return Amortize over a new 15-year period the part of your adjusted basis in the acquired intangible that is more than your adjusted basis in the exchanged or converted intangible. Amend 2011 federal return Example. Amend 2011 federal return You own a section 197 intangible you have amortized for 4 full years. Amend 2011 federal return It has a remaining unamortized basis of $30,000. Amend 2011 federal return You exchange the asset plus $10,000 for a like-kind section 197 intangible. Amend 2011 federal return The nonrecognition provisions of like-kind exchanges apply. Amend 2011 federal return You amortize $30,000 of the $40,000 adjusted basis of the acquired intangible over the 11 years remaining in the original 15-year amortization period for the transferred asset. Amend 2011 federal return You amortize the other $10,000 of adjusted basis over a new 15-year period. Amend 2011 federal return For more information, see Regulations section 1. Amend 2011 federal return 197-2(g). Amend 2011 federal return Reforestation Costs You can elect to deduct a limited amount of reforestation costs paid or incurred during the tax year. Amend 2011 federal return See Reforestation Costs in chapter 7. Amend 2011 federal return You can elect to amortize the qualifying costs that are not deducted currently over an 84-month period. Amend 2011 federal return There is no limit on the amount of your amortization deduction for reforestation costs paid or incurred during the tax year. Amend 2011 federal return The election to amortize reforestation costs incurred by a partnership, S corporation, or estate must be made by the partnership, corporation, or estate. Amend 2011 federal return A partner, shareholder, or beneficiary cannot make that election. Amend 2011 federal return A partner's or shareholder's share of amortizable costs is figured under the general rules for allocating items of income, loss, deduction, etc. Amend 2011 federal return , of a partnership or S corporation. Amend 2011 federal return The amortizable costs of an estate are divided between the estate and the income beneficiary based on the income of the estate allocable to each. Amend 2011 federal return Qualifying costs. Amend 2011 federal return   Reforestation costs are the direct costs of planting or seeding for forestation or reforestation. Amend 2011 federal return Qualifying costs include only those costs you must capitalize and include in the adjusted basis of the property. Amend 2011 federal return They include costs for the following items. Amend 2011 federal return Site preparation. Amend 2011 federal return Seeds or seedlings. Amend 2011 federal return Labor. Amend 2011 federal return Tools. Amend 2011 federal return Depreciation on equipment used in planting and seeding. Amend 2011 federal return Qualifying costs do not include costs for which the government reimburses you under a cost-sharing program, unless you include the reimbursement in your income. Amend 2011 federal return Qualified timber property. Amend 2011 federal return   Qualified timber property is property that contains trees in significant commercial quantities. Amend 2011 federal return It can be a woodlot or other site that you own or lease. Amend 2011 federal return The property qualifies only if it meets all of the following requirements. Amend 2011 federal return It is located in the United States. Amend 2011 federal return It is held for the growing and cutting of timber you will either use in, or sell for use in, the commercial production of timber products. Amend 2011 federal return It consists of at least one acre planted with tree seedlings in the manner normally used in forestation or reforestation. Amend 2011 federal return Qualified timber property does not include property on which you have planted shelter belts or ornamental trees, such as Christmas trees. Amend 2011 federal return Amortization period. Amend 2011 federal return   The 84-month amortization period starts on the first day of the first month of the second half of the tax year you incur the costs (July 1 for a calendar year taxpayer), regardless of the month you actually incur the costs. Amend 2011 federal return You can claim amortization deductions for no more than 6 months of the first and last (eighth) tax years of the period. Amend 2011 federal return Life tenant and remainderman. Amend 2011 federal return   If one person holds the property for life with the remainder going to another person, the life tenant is entitled to the full amortization for qualifying reforestation costs incurred by the life tenant. Amend 2011 federal return Any remainder interest in the property is ignored for amortization purposes. Amend 2011 federal return Recapture. Amend 2011 federal return   If you dispose of qualified timber property within 10 years after the tax year you incur qualifying reforestation expenses, report any gain as ordinary income up to the amortization you took. Amend 2011 federal return See chapter 3 of Publication 544 for more information. Amend 2011 federal return How to make the election. Amend 2011 federal return   To elect to amortize qualifying reforestation costs, complete Part VI of Form 4562 and attach a statement that contains the following information. Amend 2011 federal return A description of the costs and the dates you incurred them. Amend 2011 federal return A description of the type of timber being grown and the purpose for which it is grown. Amend 2011 federal return Attach a separate statement for each property for which you amortize reforestation costs. Amend 2011 federal return   Generally, you must make the election on a timely filed return (including extensions) for the tax year in which you incurred the costs. Amend 2011 federal return However, if you timely filed your return for the year without making the election, you can still make the election by filing an amended return within 6 months of the due date of the return (excluding extensions). Amend 2011 federal return Attach Form 4562 and the statement to the amended return and write “Filed pursuant to section 301. Amend 2011 federal return 9100-2” on Form 4562. Amend 2011 federal return File the amended return at the same address you filed the original return. Amend 2011 federal return Revoking the election. Amend 2011 federal return   You must get IRS approval to revoke your election to amortize qualifying reforestation costs. Amend 2011 federal return Your application to revoke the election must include your name, address, the years for which your election was in effect, and your reason for revoking it. Amend 2011 federal return Please provide your daytime telephone number (optional), in case we need to contact you. Amend 2011 federal return You, or your duly authorized representative, must sign the application and file it at least 90 days before the due date (without extensions) for filing your income tax return for the first tax year for which your election is to end. Amend 2011 federal return    Send the application to: Internal Revenue Service Associate Chief Counsel Passthroughs and Special Industries CC:PSI:6 1111 Constitution Ave. Amend 2011 federal return NW, IR-5300 Washington, DC 20224 Geological and Geophysical Costs You can amortize the cost of geological and geophysical expenses paid or incurred in connection with oil and gas exploration or development within the United States. Amend 2011 federal return These costs can be amortized ratably over a 24-month period beginning on the mid-point of the tax year in which the expenses were paid or incurred. Amend 2011 federal return For major integrated oil companies (as defined in section 167(h)(5)), these costs must be amortized ratably over a 5-year period for costs paid or incurred after May 17, 2006 (a 7-year period for costs paid or incurred after December 19, 2007). Amend 2011 federal return If you retire or abandon the property during the amortization period, no amortization deduction is allowed in the year of retirement or abandonment. Amend 2011 federal return Pollution Control Facilities You can elect to amortize the cost of a certified pollution control facility over 60 months. Amend 2011 federal return However, see Atmospheric pollution control facilities for an exception. Amend 2011 federal return The cost of a pollution control facility that is not eligible for amortization can be depreciated under the regular rules for depreciation. Amend 2011 federal return Also, you can claim a special depreciation allowance on a certified pollution control facility that is qualified property even if you elect to amortize its cost. Amend 2011 federal return You must reduce its cost (amortizable basis) by the amount of any special allowance you claim. Amend 2011 federal return See chapter 3 of Publication 946. Amend 2011 federal return A certified pollution control facility is a new identifiable treatment facility used in connection with a plant or other property in operation before 1976, to reduce or control water or atmospheric pollution or contamination. Amend 2011 federal return The facility must do so by removing, changing, disposing, storing, or preventing the creation or emission of pollutants, contaminants, wastes, or heat. Amend 2011 federal return The facility must be certified by state and federal certifying authorities. Amend 2011 federal return The facility must not significantly increase the output or capacity, extend the useful life, or reduce the total operating costs of the plant or other property. Amend 2011 federal return Also, it must not significantly change the nature of the manufacturing or production process or facility. Amend 2011 federal return The federal certifying authority will not certify your property to the extent it appears you will recover (over the property's useful life) all or part of its cost from the profit based on its operation (such as through sales of recovered wastes). Amend 2011 federal return The federal certifying authority will describe the nature of the potential cost recovery. Amend 2011 federal return You must then reduce the amortizable basis of the facility by this potential recovery. Amend 2011 federal return New identifiable treatment facility. Amend 2011 federal return   A new identifiable treatment facility is tangible depreciable property that is identifiable as a treatment facility. Amend 2011 federal return It does not include a building and its structural components unless the building is exclusively a treatment facility. Amend 2011 federal return Atmospheric pollution control facilities. Amend 2011 federal return   Certain atmospheric pollution control facilities can be amortized over 84 months. Amend 2011 federal return To qualify, the following must apply. Amend 2011 federal return The facility must be acquired and placed in service after April 11, 2005. Amend 2011 federal return If acquired, the original use must begin with you after April 11, 2005. Amend 2011 federal return The facility must be used in connection with an electric generation plant or other property placed in operation after December 31, 1975, that is primarily coal fired. Amend 2011 federal return If you construct, reconstruct, or erect the facility, only the basis attributable to the construction, reconstruction, or erection completed after April 11, 2005, qualifies. Amend 2011 federal return Basis reduction for corporations. Amend 2011 federal return   A corporation must reduce the amortizable basis of a pollution control facility by 20% before figuring the amortization deduction. Amend 2011 federal return More information. Amend 2011 federal return   For more information on the amortization of pollution control facilities, see Code sections 169 and 291(c) and the related regulations. Amend 2011 federal return Research and Experimental Costs You can elect to amortize your research and experimental costs, deduct them as current business expenses, or write them off over a 10-year period (see Optional write-off method below). Amend 2011 federal return If you elect to amortize these costs, deduct them in equal amounts over 60 months or more. Amend 2011 federal return The amortization period begins the month you first receive an economic benefit from the costs. Amend 2011 federal return For a definition of “research and experimental costs” and information on deducting them as current business expenses, see chapter 7. Amend 2011 federal return Optional write-off method. Amend 2011 federal return   Rather than amortize these costs or deduct them as a current expense, you have the option of deducting (writing off) research and experimental costs ratably over a 10-year period beginning with the tax year in which you incurred the costs. Amend 2011 federal return For more information, see Optional Write-off of Certain Tax Preferences , later, and section 59(e) of the Internal Revenue Code. Amend 2011 federal return Costs you can amortize. Amend 2011 federal return   You can amortize costs chargeable to a capital account (see chapter 1) if you meet both of the following requirements. Amend 2011 federal return You paid or incurred the costs in your trade or business. Amend 2011 federal return You are not deducting the costs currently. Amend 2011 federal return How to make the election. Amend 2011 federal return   To elect to amortize research and experimental costs, complete Part VI of Form 4562 and attach it to your income tax return. Amend 2011 federal return Generally, you must file the return by the due date (including extensions). Amend 2011 federal return However, if you timely filed your return for the year without making the election, you can still make the election by filing an amended return within 6 months of the due date of the return (excluding extensions). Amend 2011 federal return Attach Form 4562 to the amended return and write “Filed pursuant to section 301. Amend 2011 federal return 9100-2” on Form 4562. Amend 2011 federal return File the amended return at the same address you filed the original return. Amend 2011 federal return   Your election is binding for the year it is made and for all later years unless you obtain approval from the IRS to change to a different method. Amend 2011 federal return Optional Write-off of Certain Tax Preferences You can elect to amortize certain tax preference items over an optional period beginning in the tax year in which you incurred the costs. Amend 2011 federal return If you make this election, there is no AMT adjustment. Amend 2011 federal return The applicable costs and the optional recovery periods are as follows: Circulation costs — 3 years, Intangible drilling and development costs — 60 months, Mining exploration and development costs — 10 years, and Research and experimental costs — 10 years. Amend 2011 federal return How to make the election. Amend 2011 federal return   To elect to amortize qualifying costs over the optional recovery period, complete Part VI of Form 4562 and attach a statement containing the following information to your return for the tax year in which the election begins: Your name, address, and taxpayer identification number; and The type of cost and the specific amount of the cost for which you are making the election. Amend 2011 federal return   Generally, the election must be made on a timely filed return (including extensions) for the tax year in which you incurred the costs. Amend 2011 federal return However, if you timely filed your return for the year without making the election, you can still make the election by filing an amended return within 6 months of the due date of the return (excluding extensions). Amend 2011 federal return Attach Form 4562 to the amended return and write “Filed pursuant to section 301. Amend 2011 federal return 9100-2” on Form 4562. Amend 2011 federal return File the amended return at the same address you filed the original return. Amend 2011 federal return Revoking the election. Amend 2011 federal return   You must obtain consent from the IRS to revoke your election. Amend 2011 federal return Your request to revoke the election must be submitted to the IRS in the form of a letter ruling before the end of the tax year in which the optional recovery period ends. Amend 2011 federal return The request must contain all of the information necessary to demonstrate the rare and unusual circumstances that would justify granting revocation. Amend 2011 federal return If the request for revocation is approved, any unamortized costs are deductible in the year the revocation is effective. Amend 2011 federal return Prev  Up  Next   Home   More Online Publications
Print - Click this link to Print this page

Understanding Your CP20 Notice

We believe you incorrectly claimed one or more deductions or credits. As a result, your refund is less than you expected.


What you need to do

  • Review your notice and compare our changes to your tax return.
  • Complete and return the Response form.

You may want to...

  • Review this notice with your tax preparer.
  • Read about the deduction or credit in Publication 17.
  • Call us for clarification at the number listed on your notice.

Answers to Common Questions

What is the notice telling me?
Based on the information shown on your tax return, it appears you have not met the requirements for claiming one or more deductions or credits. As a result, your refund is less than you expected.

What do I have to do?
Review the requirements for the deduction or credit we adjusted. Return the Response form indicating thereon your agreement or disagreement with the changes we made.

If you feel your tax return was correct as filed, send us the documentation listed on page 2 of the notice to verify you qualify for the exemption or credit.


Tips for next year

Consider filing your taxes electronically. Filing online can help you avoid mistakes and find credits and deductions that you may qualify for. In many cases you can file for free. Learn more about e-file.

Page Last Reviewed or Updated: 20-Feb-2014

Printable samples of this notice (PDF)

 

 

How to get help

  • Call the 1-800 number listed on the top right corner of your notice.
  • Authorize someone (e.g., accountant) to contact the IRS on your behalf using Form 2848.
  • See if you qualify for help from a Low Income Taxpayer Clinic.
     

The Amend 2011 Federal Return

Amend 2011 federal return Publication 907 - Introductory Material Table of Contents Future Developments IntroductionOrdering forms and publications. Amend 2011 federal return Tax questions. Amend 2011 federal return Future Developments For the latest information about developments related to Publication 907, such as legislation enacted after this publication was published, go to www. Amend 2011 federal return IRS. Amend 2011 federal return gov/pub907. Amend 2011 federal return    Introduction This publication gives you a brief introduction to certain parts of the tax law of particular interest to people with disabilities and those who care for people with disabilities. Amend 2011 federal return It includes highlights about: Income, Itemized deductions, Tax credits, Household employers, and Business tax incentives. Amend 2011 federal return You will find most of the information you need to complete your tax return in your form instruction booklet. Amend 2011 federal return If you need additional information, you may want to order a free tax publication. Amend 2011 federal return You may also want to take advantage of the other free tax help services that the IRS provides. Amend 2011 federal return See How To Get Tax Help , at the end of this publication, for information about getting publications, forms, and free tax services. Amend 2011 federal return Comments and suggestions. Amend 2011 federal return   We welcome your comments about this publication and your suggestions for future editions. Amend 2011 federal return   You can write to us at the following address: Internal Revenue Service Tax Forms and Publications Division 1111 Constitution Ave. Amend 2011 federal return NW, IR-6526 Washington, DC 20224   We respond to many letters by telephone. Amend 2011 federal return Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence. Amend 2011 federal return   You can send your comments from www. Amend 2011 federal return irs. Amend 2011 federal return gov/formspubs/. Amend 2011 federal return Click on “More Information” and then on “Comment on Tax Forms and Publications”. Amend 2011 federal return   Although we cannot respond individually to each comment received, we do appreciate your feedback and will consider your comments as we revise our tax products. Amend 2011 federal return Ordering forms and publications. Amend 2011 federal return   Visit www. Amend 2011 federal return irs. Amend 2011 federal return gov/formspubs/ to download forms and publications, call 1-800-TAX-FORM (1-800-829-3676), or write to the address below and receive a response within 10 days after your request is received. Amend 2011 federal return Internal Revenue Service 1201 N. Amend 2011 federal return Mitsubishi Motorway Bloomington, IL 61705-6613 Tax questions. Amend 2011 federal return   If you have a tax question, check the information available on IRS. Amend 2011 federal return gov or call 1-800-829-1040. Amend 2011 federal return We cannot answer tax questions sent to either of the above addresses. Amend 2011 federal return Prev  Up  Next   Home   More Online Publications