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Free State Tax Filling

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Free State Tax Filling

Free state tax filling 3. Free state tax filling   Farm Income Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: Schedule F (Form 1040) Sales of Farm ProductsSchedule F. Free state tax filling Form 4797. Free state tax filling Sales Caused by Weather-Related Conditions Rents (Including Crop Shares)Crop Shares Agricultural Program PaymentsCommodity Credit Corporation (CCC) Loans Conservation Reserve Program (CRP) Crop Insurance and Crop Disaster Payments Feed Assistance and Payments Cost-Sharing Exclusion (Improvements) Payments Under the Farm Security and Rural Investment Act of 2002 and Under the Food, Conservation, and Energy Act of 2008 Tobacco Quota Buyout Program Payments Other Payments Payment to More Than One Person Income From CooperativesPatronage Dividends Per-Unit Retain Certificates Cancellation of DebtGeneral Rule Exceptions Exclusions Income From Other SourcesSod. Free state tax filling Granting the right to remove deposits. Free state tax filling Income Averaging for FarmersElected Farm Income (EFI) How To Figure the Tax Effect on Other Tax Determinations Tax for Certain Children Who Have Unearned Income Alternative Minimum Tax (AMT) Schedule J Introduction You may receive income from many sources. Free state tax filling You must report the income from all the different sources on your tax return, unless it is excluded by law. Free state tax filling Where you report the income on your tax return depends on its source. Free state tax filling This chapter discusses farm income you report on Schedule F (Form 1040), Profit or Loss From Farming. Free state tax filling For information on where to report other income, see the Instructions for Form 1040, U. Free state tax filling S. Free state tax filling Individual Income Tax Return. Free state tax filling Accounting method. Free state tax filling   The rules discussed in this chapter assume you use the cash method of accounting. Free state tax filling Under the cash method, you generally include an item of income in gross income in the year you receive it. Free state tax filling See Cash Method in chapter 2. Free state tax filling   If you use an accrual method of accounting, different rules may apply to your situation. Free state tax filling See Accrual Method in chapter 2. Free state tax filling Topics - This chapter discusses: Schedule F Sales of farm products Rents (including crop shares) Agricultural program payments Income from cooperatives Cancellation of debt Income from other sources Income averaging for farmers Useful Items - You may want to see: Publication 525 Taxable and Nontaxable Income 550 Investment Income and Expenses 908 Bankruptcy Tax Guide 925 Passive Activity and At-Risk Rules 4681 Canceled Debts, Foreclosures, Repossessions, and Abandonments Form (and Instructions) 982 Reduction of Tax Attributes Due to Discharge of Indebtedness Sch E (Form 1040) Supplemental Income and Loss Sch J (Form 1040) Income Averaging for Farmers and Fishermen 1099-G Certain Government Payments 1099-PATR Taxable Distributions Received From Cooperatives 4797 Sales of Business Property 4835 Farm Rental Income and Expenses See chapter 16 for information about getting publications and forms. Free state tax filling Schedule F (Form 1040) Individuals, trusts, and partnerships report farm income on Schedule F (Form 1040), Profit or Loss From Farming. Free state tax filling Use this schedule to figure the net profit or loss from regular farming operations. Free state tax filling Income from farming reported on Schedule F includes amounts you receive from cultivating, operating, or managing a farm for gain or profit, either as owner or tenant. Free state tax filling This includes income from operating a stock, dairy, poultry, fish, fruit, or truck farm and income from operating a plantation, ranch, range, or orchard. Free state tax filling It also includes income from the sale of crop shares if you materially participate in producing the crop. Free state tax filling See Rents (Including Crop Shares) , later. Free state tax filling Income received from operating a nursery, which specializes in growing ornamental plants, is considered to be income from farming. Free state tax filling Income reported on Schedule F does not include gains or losses from sales or other dispositions of the following farm assets. Free state tax filling Land. Free state tax filling Depreciable farm equipment. Free state tax filling Buildings and structures. Free state tax filling Livestock held for draft, breeding, sport, or dairy purposes. Free state tax filling Gains and losses from most dispositions of farm assets are discussed in chapters 8 and 9. Free state tax filling Gains and losses from casualties, thefts, and condemnations are discussed in chapter 11. Free state tax filling Sales of Farm Products Where to report. Free state tax filling    Table 3-1 shows where to report the sale of farm products on your tax return. Free state tax filling Schedule F. Free state tax filling   Amounts received from the sales of products you raised on your farm for sale (or bought for resale), such as livestock, produce, or grains, are reported on Schedule F. Free state tax filling This includes money and the fair market value of any property or services you receive. Free state tax filling When you sell farm products bought for resale, your profit or loss is the difference between your selling price (money plus the fair market value of any property) and your basis in the item (usually the cost). Free state tax filling See chapter 6 for information on the basis of assets. Free state tax filling You generally report these amounts on Schedule F for the year you receive payment. Free state tax filling Example. Free state tax filling In 2012, you bought 20 feeder calves for $11,000 for resale. Free state tax filling You sold them in 2013 for $21,000. Free state tax filling You report the $21,000 sales price on Schedule F, line 1b, subtract your $11,000 basis on line 1d, and report the resulting $10,000 profit on line 1e. Free state tax filling Form 4797. Free state tax filling   Sales of livestock held for draft, breeding, sport, or dairy purposes may result in ordinary or capital gains or losses, depending on the circumstances. Free state tax filling In either case, you should always report these sales on Form 4797 instead of Schedule F. Free state tax filling See Livestock under Ordinary or Capital Gain or Loss in chapter 8. Free state tax filling Animals you do not hold primarily for sale are considered business assets of your farm. Free state tax filling Table 3-1. Free state tax filling Where To Report Sales of Farm Products Item Sold Schedule F Form 4797 Farm products raised for sale X   Farm products bought for resale X   Farm assets not held primarily for sale, such as livestock held for draft, breeding, sport, or dairy purposes (bought or raised)   X Sale by agent. Free state tax filling   If your agent sells your farm products, you have constructive receipt of the income when your agent receives payment and you must include the net proceeds from the sale in gross income for the year the agent receives payment. Free state tax filling This applies even if your agent pays you in a later year. Free state tax filling For a discussion on constructive receipt of income, see Cash Method under Accounting Methods in chapter 2. Free state tax filling Sales Caused by Weather-Related Conditions If you sell or exchange more livestock, including poultry, than you normally would in a year because of a drought, flood, or other weather-related condition, you may be able to postpone reporting the gain from the additional animals until the next year. Free state tax filling You must meet all the following conditions to qualify. Free state tax filling Your principal trade or business is farming. Free state tax filling You use the cash method of accounting. Free state tax filling You can show that, under your usual business practices, you would not have sold or exchanged the additional animals this year except for the weather-related condition. Free state tax filling The weather-related condition caused an area to be designated as eligible for assistance by the federal government. Free state tax filling Sales or exchanges made before an area became eligible for federal assistance qualify if the weather-related condition that caused the sale or exchange also caused the area to be designated as eligible for federal assistance. Free state tax filling The designation can be made by the President, the Department of Agriculture (or any of its agencies), or by other federal departments or agencies. Free state tax filling A weather-related sale or exchange of livestock (other than poultry) held for draft, breeding, or dairy purposes may be an involuntary conversion. Free state tax filling See Other Involuntary Conversions in chapter 11. Free state tax filling Usual business practice. Free state tax filling   You must determine the number of animals you would have sold had you followed your usual business practice in the absence of the weather-related condition. Free state tax filling Do this by considering all the facts and circumstances, but do not take into account your sales in any earlier year for which you postponed the gain. Free state tax filling If you have not yet established a usual business practice, rely on the usual business practices of similarly situated farmers in your general region. Free state tax filling Connection with affected area. Free state tax filling   The livestock does not have to be raised or sold in an area affected by a weather-related condition for the postponement to apply. Free state tax filling However, the sale must occur solely because of a weather-related condition that affected the water, grazing, or other requirements of the livestock. Free state tax filling This requirement generally will not be met if the costs of feed, water, or other requirements of the livestock affected by the weather-related condition are not substantial in relation to the total costs of holding the livestock. Free state tax filling Classes of livestock. Free state tax filling   You must figure the amount to be postponed separately for each generic class of animals—for example, hogs, sheep, and cattle. Free state tax filling Do not separate animals into classes based on age, sex, or breed. Free state tax filling Amount to be postponed. Free state tax filling   Follow these steps to figure the amount of gain to be postponed for each class of animals. Free state tax filling Divide the total income realized from the sale of all livestock in the class during the tax year by the total number of such livestock sold. Free state tax filling For this purpose, do not treat any postponed gain from the previous year as income received from the sale of livestock. Free state tax filling Multiply the result in (1) by the excess number of such livestock sold solely because of weather-related conditions. Free state tax filling Example. Free state tax filling You are a calendar year taxpayer and you normally sell 100 head of beef cattle a year. Free state tax filling As a result of drought, you sold 135 head during 2012. Free state tax filling You realized $70,200 from the sale. Free state tax filling On August 9, 2012, as a result of drought, the affected area was declared a disaster area eligible for federal assistance. Free state tax filling The income you can postpone until 2013 is $18,200 [($70,200 ÷ 135) × 35]. Free state tax filling How to postpone gain. Free state tax filling   To postpone gain, attach a statement to your tax return for the year of the sale. Free state tax filling The statement must include your name and address and give the following information for each class of livestock for which you are postponing gain. Free state tax filling A statement that you are postponing gain under Internal Revenue Code (IRC) section 451(e). Free state tax filling Evidence of the weather-related conditions that forced the early sale or exchange of the livestock and the date, if known, on which an area was designated as eligible for assistance by the federal government because of weather-related conditions. Free state tax filling A statement explaining the relationship of the area affected by the weather-related condition to your early sale or exchange of the livestock. Free state tax filling The number of animals sold in each of the 3 preceding years. Free state tax filling The number of animals you would have sold in the tax year had you followed your normal business practice in the absence of weather-related conditions. Free state tax filling The total number of animals sold and the number sold because of weather-related conditions during the tax year. Free state tax filling A computation, as described above, of the income to be postponed for each class of livestock. Free state tax filling   Generally, you must file the statement and the return by the due date of the return, including extensions. Free state tax filling However, for sales or exchanges treated as an involuntary conversion from weather-related sales of livestock in an area eligible for federal assistance (discussed in chapter 11), you can file this statement at any time during the replacement period. Free state tax filling For other sales or exchanges, if you timely filed your return for the year without postponing gain, you can still postpone gain by filing an amended return within 6 months of the due date of the return (excluding extensions). Free state tax filling Attach the statement to the amended return and write “Filed pursuant to section 301. Free state tax filling 9100-2” at the top of the amended return. Free state tax filling File the amended return at the same address you filed the original return. Free state tax filling Once you have filed the statement, you can cancel your postponement of gain only with the approval of the IRS. Free state tax filling Rents (Including Crop Shares) The rent you receive for the use of your farmland is generally rental income, not farm income. Free state tax filling However, if you materially participate in farming operations on the land, the rent is farm income. Free state tax filling See Landlord Participation in Farming in chapter 12. Free state tax filling Pasture income and rental. Free state tax filling   If you pasture someone else's livestock and take care of them for a fee, the income is from your farming business. Free state tax filling You must enter it as Other income on Schedule F. Free state tax filling If you simply rent your pasture for a flat cash amount without providing services, report the income as rent on Part I of Schedule E (Form 1040), Supplemental Income and Loss. Free state tax filling Crop Shares You must include rent you receive in the form of crop shares in income in the year you convert the shares to money or the equivalent of money. Free state tax filling It does not matter whether you use the cash method of accounting or an accrual method of accounting. Free state tax filling If you materially participate in operating a farm from which you receive rent in the form of crop shares or livestock, the rental income is included in self-employment income. Free state tax filling See Landlord Participation in Farming in chapter 12. Free state tax filling Report the rental income on Schedule F. Free state tax filling If you do not materially participate in operating the farm, report this income on Form 4835 and carry the net income or loss to Schedule E (Form 1040). Free state tax filling The income is not included in self-employment income. Free state tax filling Crop shares you use to feed livestock. Free state tax filling   Crop shares you receive as a landlord and feed to your livestock are considered converted to money when fed to the livestock. Free state tax filling You must include the fair market value of the crop shares in income at that time. Free state tax filling You are entitled to a business expense deduction for the livestock feed in the same amount and at the same time you include the fair market value of the crop share as rental income. Free state tax filling Although these two transactions cancel each other for figuring adjusted gross income on Form 1040, they may be necessary to figure your self-employment tax. Free state tax filling See  chapter 12. Free state tax filling Crop shares you give to others (gift). Free state tax filling   Crop shares you receive as a landlord and give to others are considered converted to money when you make the gift. Free state tax filling You must report the fair market value of the crop share as income, even though someone else receives payment for the crop share. Free state tax filling Example. Free state tax filling A tenant farmed part of your land under a crop-share arrangement. Free state tax filling The tenant harvested and delivered the crop in your name to an elevator company. Free state tax filling Before selling any of the crop, you instructed the elevator company to cancel your warehouse receipt and make out new warehouse receipts in equal amounts of the crop in the names of your children. Free state tax filling They sell their crop shares in the following year and the elevator company makes payments directly to your children. Free state tax filling In this situation, you are considered to have received rental income and then made a gift of that income. Free state tax filling You must include the fair market value of the crop shares in your income for the tax year you gave the crop shares to your children. Free state tax filling Crop share loss. Free state tax filling   If you are involved in a rental or crop-share lease arrangement, any loss from these activities may be subject to the limits under the passive loss rules. Free state tax filling See Publication 925 for information on these rules. Free state tax filling Agricultural Program Payments You must include in income most government payments, such as those for approved conservation practices, direct payments, and counter-cyclical payments, whether you receive them in cash, materials, services, or commodity certificates. Free state tax filling However, you can exclude from income some payments you receive under certain cost-sharing conservation programs. Free state tax filling See Cost-Sharing Exclusion (Improvements) , later. Free state tax filling Report the agricultural program payment on the appropriate line of Schedule F, Part I. Free state tax filling Report the full amount even if you return a government check for cancellation, refund any of the payment you receive, or the government collects all or part of the payment from you by reducing the amount of some other payment or Commodity Credit Corporation (CCC) loan. Free state tax filling However, you can deduct the amount you refund or return or that reduces some other payment or loan to you. Free state tax filling Claim the deduction on Schedule F for the year of repayment or reduction. Free state tax filling Commodity Credit Corporation (CCC) Loans Generally, you do not report loans you receive as income. Free state tax filling However, if you pledge part or all of your production to secure a CCC loan, you can treat the loan as if it were a sale of the crop and report the loan proceeds as income in the year you receive them. Free state tax filling You do not need approval from the IRS to adopt this method of reporting CCC loans. Free state tax filling Once you report a CCC loan as income for the year received, you generally must report all CCC loans in that year and later years in the same way. Free state tax filling However, you can obtain for your tax year an automatic consent to change your method of accounting for loans received from the CCC, from including the loan amount in gross income for the tax year in which the loan is received to treating the loan amount as a loan. Free state tax filling For more information, see Part I of the Instructions for Form 3115 and Revenue Procedure 2008-52. Free state tax filling Revenue Procedure 2008-52, 2008-36 I. Free state tax filling R. Free state tax filling B. Free state tax filling 587, is available at  www. Free state tax filling irs. Free state tax filling gov/irb/2008-36_IRB/ar09. Free state tax filling html. Free state tax filling You can request income tax withholding from CCC loan payments you receive. Free state tax filling Use Form W-4V, Voluntary Withholding Request. Free state tax filling See chapter 16 for information about ordering the form. Free state tax filling To elect to report a CCC loan as income, include the loan proceeds as income on Schedule F, line 7a, for the year you receive it. Free state tax filling Attach a statement to your return showing the details of the loan. Free state tax filling You must file the statement and the return by the due date of the return, including extensions. Free state tax filling 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). Free state tax filling Attach the statement to the amended return and write “Filed pursuant to section 301. Free state tax filling 9100-2” at the top of the return. Free state tax filling File the amended return at the same address you filed the original return. Free state tax filling When you make this election, the amount you report as income becomes your basis in the commodity. Free state tax filling See chapter 6 for information on the basis of assets. Free state tax filling If you later repay the loan, redeem the pledged commodity, and sell it, you report as income at the time of sale the sale proceeds minus your basis in the commodity. Free state tax filling If the sale proceeds are less than your basis in the commodity, you can report the difference as a loss on Schedule F. Free state tax filling If you forfeit the pledged crops to the CCC in full payment of the loan, the forfeiture is treated for tax purposes as a sale of the crops. Free state tax filling If you did not report the loan proceeds as income for the year you received them, you must include them in your income for the year of the forfeiture. Free state tax filling Form 1099-A. Free state tax filling   If you forfeit pledged crops to the CCC in full payment of a loan, you may receive a Form 1099-A, Acquisition or Abandonment of Secured Property. Free state tax filling “CCC” should be shown in box 6. Free state tax filling The amount of any CCC loan outstanding when you forfeited your commodity should also be indicated on the form. Free state tax filling Market Gain Under the CCC nonrecourse marketing assistance loan program, your repayment amount for a loan secured by your pledge of an eligible commodity is generally based on the lower of the loan rate or the prevailing world market price for the commodity on the date of repayment. Free state tax filling If you repay the loan when the world price is lower, the difference between that repayment amount and the original loan amount is market gain. Free state tax filling Whether you use cash or CCC certificates to repay the loan, you will receive a Form 1099-G showing the market gain you realized. Free state tax filling Market gain should be reported as follows. Free state tax filling If you elected to include the CCC loan in income in the year you received it, do not include the market gain in income. Free state tax filling However, adjust the basis of the commodity for the amount of the market gain. Free state tax filling If you did not include the CCC loan in income in the year received, include the market gain in your income. Free state tax filling The following examples show how to report market gain. Free state tax filling Example 1. Free state tax filling Mike Green is a cotton farmer. Free state tax filling He uses the cash method of accounting and files his tax return on a calendar year basis. Free state tax filling He has deducted all expenses incurred in producing the cotton and has a zero basis in the commodity. Free state tax filling In 2012, Mike pledged 1,000 pounds of cotton as collateral for a CCC loan of $2,000 (a loan rate of $2. Free state tax filling 00 per pound). Free state tax filling In 2013, he repaid the loan and redeemed the cotton for $1,500 when the world price was $1. Free state tax filling 50 per pound (lower than the loan amount). Free state tax filling Later in 2013, he sold the cotton for $2,500. Free state tax filling The market gain on the redemption was $. Free state tax filling 50 ($2. Free state tax filling 00 – $1. Free state tax filling 50) per pound. Free state tax filling Mike realized total market gain of $500 ($. Free state tax filling 50 x 1,000 pounds). Free state tax filling How he reports this market gain and figures his gain or loss from the sale of the cotton depends on whether he included CCC loans in income in 2012. Free state tax filling Included CCC loan. Free state tax filling   Mike reported the $2,000 CCC loan as income for 2012 on Schedule F, line 1b, so he is treated as if he sold the cotton for $2,000 when he pledged it and repurchased the cotton for $1,500 when he redeemed it. Free state tax filling The $500 market gain is not recognized on the redemption. Free state tax filling He reports it for 2013 as an agricultural program payment on Schedule F, line 4a, but does not include it as a taxable amount on line 4b. Free state tax filling   Mike's basis in the cotton after he redeemed it was $1,500, which is the redemption (repurchase) price paid for the cotton. Free state tax filling His gain from the sale is $1,000 ($2,500 – $1,500). Free state tax filling He reports the $1,000 gain as income for 2013 on Schedule F, line 1b. Free state tax filling Excluded CCC loan. Free state tax filling   Mike has income of $500 from market gain in 2013. Free state tax filling He reports it on Schedule F, lines 4a and 4b. Free state tax filling His basis in the cotton is zero, so his gain from its sale is $2,500. Free state tax filling He reports the $2,500 gain as income for 2013 on Schedule F, line 1b. Free state tax filling Example 2. Free state tax filling The facts are the same as in Example 1 except that, instead of selling the cotton for $2,500 after redeeming it, Mike entered into an option-to-purchase contract with a cotton buyer before redeeming the cotton. Free state tax filling Under that contract, Mike authorized the cotton buyer to pay the CCC loan on Mike's behalf. Free state tax filling In 2013, the cotton buyer repaid the loan for $1,500 and immediately exercised his option, buying the cotton for $1,500. Free state tax filling How Mike reports the $500 market gain on the redemption of the cotton and figures his gain or loss from its sale depends on whether he included CCC loans in income in 2012. Free state tax filling Included CCC loan. Free state tax filling   As in Example 1, Mike is treated as though he sold the cotton for $2,000 when he pledged it and repurchased the cotton for $1,500 when the cotton buyer redeemed it for him. Free state tax filling The $500 market gain is not recognized on the redemption. Free state tax filling Mike reports it for 2013 as an agricultural program payment on Schedule F, line 4a, but does not include it as a taxable amount on line 4b. Free state tax filling   Also, as in Example 1, Mike's basis in the cotton when the cotton buyer redeemed it for him was $1,500. Free state tax filling Mike has no gain or loss on its sale to the cotton buyer for that amount. Free state tax filling Excluded CCC loan. Free state tax filling   As in Example 1, Mike has income of $500 from market gain in 2013. Free state tax filling He reports it on Schedule F, lines 4a and 4b. Free state tax filling His basis in the cotton is zero, so his gain from its sale is $1,500. Free state tax filling He reports the $1,500 gain as income for 2013 on Schedule F, line 1b. Free state tax filling Conservation Reserve Program (CRP) Under the Conservation Reserve Program (CRP), if you own or operate highly erodible or other specified cropland, you may enter into a long-term contract with the USDA, agreeing to convert to a less intensive use of that cropland. Free state tax filling You must include the annual rental payments and any one-time incentive payment you receive under the program on Schedule F, lines 4a and 4b. Free state tax filling Cost-share payments you receive may qualify for the cost-sharing exclusion. Free state tax filling See Cost-Sharing Exclusion (Improvements) , later. Free state tax filling CRP payments are reported to you on Form 1099-G. Free state tax filling Individuals who are receiving Social Security retirement or disability benefits may exclude CRP payments when calculating self-employment tax. Free state tax filling See the instructions for Schedule SE (Form 1040). Free state tax filling Crop Insurance and Crop Disaster Payments You must include in income any crop insurance proceeds you receive as the result of physical crop damage or reduction of crop revenue, or both. Free state tax filling You generally include them in the year you receive them. Free state tax filling Treat as crop insurance proceeds the crop disaster payments you receive from the federal government as the result of destruction or damage to crops, or the inability to plant crops, because of drought, flood, or any other natural disaster. Free state tax filling You can request income tax withholding from crop disaster payments you receive from the federal government. Free state tax filling Use Form W-4V, Voluntary Withholding Request. Free state tax filling See chapter 16 for information about ordering the form. Free state tax filling Election to postpone reporting until the following year. Free state tax filling   You can postpone reporting some or all crop insurance proceeds as income until the year following the year the physical damage occurred if you meet all the following conditions. Free state tax filling You use the cash method of accounting. Free state tax filling You receive the crop insurance proceeds in the same tax year the crops are damaged. Free state tax filling You can show that under your normal business practice you would have included income from the damaged crops in any tax year following the year the damage occurred. Free state tax filling   Deferral is not permitted for proceeds received from revenue insurance policies. Free state tax filling   To postpone reporting some or all crop insurance proceeds received in 2013, report the amount you received on Schedule F, line 6a, but do not include it as a taxable amount on line 6b. Free state tax filling Check the box on line 8c and attach a statement to your tax return. Free state tax filling The statement must include your name and address and contain the following information. Free state tax filling A statement that you are making an election under IRC section 451(d) and Regulations section 1. Free state tax filling 451-6. Free state tax filling The specific crop or crops physically destroyed or damaged. Free state tax filling A statement that under your normal business practice you would have included income from some or all of the destroyed or damaged crops in gross income for a tax year following the year the crops were destroyed or damaged. Free state tax filling The cause of the physical destruction or damage and the date or dates it occurred. Free state tax filling The total payments you received from insurance carriers, itemized for each specific crop, and the date you received each payment. Free state tax filling The name of each insurance carrier from whom you received payments. Free state tax filling   One election covers all crops representing a single trade or business. Free state tax filling If you have more than one farming business, make a separate election for each one. Free state tax filling For example, if you operate two separate farms on which you grow different crops and you keep separate books for each farm, you should make two separate elections to postpone reporting insurance proceeds you receive for crops grown on each of your farms. Free state tax filling   An election is binding for the year unless the IRS approves your request to change it. Free state tax filling To request IRS approval to change your election, write to the IRS at the following address giving your name, address, identification number, the year you made the election, and your reasons for wanting to change it. Free state tax filling Ogden Submission Processing Center P. Free state tax filling O. Free state tax filling Box 9941 Ogden, UT 84409 Feed Assistance and Payments The Disaster Assistance Act of 1988 authorizes programs to provide feed assistance, reimbursement payments, and other benefits to qualifying livestock producers if the Secretary of Agriculture determines that, because of a natural disaster, a livestock emergency exists. Free state tax filling These programs include partial reimbursement for the cost of purchased feed and for certain transportation expenses. Free state tax filling They also include the donation or sale at a below-market price of feed owned by the Commodity Credit Corporation. Free state tax filling Include in income: The market value of donated feed, The difference between the market value and the price you paid for feed you buy at below-market prices, and Any cost reimbursement you receive. Free state tax filling You must include these benefits in income in the year you receive them. Free state tax filling You cannot postpone reporting them under the rules explained earlier for weather-related sales of livestock or crop insurance proceeds. Free state tax filling Report the benefits on Schedule F, Part I, as agricultural program payments. Free state tax filling You can usually take a current deduction for the same amount as a feed expense. Free state tax filling Cost-Sharing Exclusion (Improvements) You can exclude from your income part or all of a payment you receive under certain federal or state cost-sharing conservation, reclamation, and restoration programs. Free state tax filling A payment is any economic benefit you get as a result of an improvement. Free state tax filling However, this exclusion applies only to that part of a payment that meets all three of the following tests. Free state tax filling It was for a capital expense. Free state tax filling You cannot exclude any part of a payment for an expense you can deduct in the year you pay or incur it. Free state tax filling You must include the payment for a deductible expense in income, and you can take any offsetting deduction. Free state tax filling See chapter 5 for information on deducting soil and water conservation expenses. Free state tax filling It does not substantially increase your annual income from the property for which it is made. Free state tax filling An increase in annual income is substantial if it is more than the greater of the following amounts. Free state tax filling 10% of the average annual income derived from the affected property before receiving the improvement. Free state tax filling $2. Free state tax filling 50 times the number of affected acres. Free state tax filling The Secretary of Agriculture certified that the payment was primarily made for conserving soil and water resources, protecting or restoring the environment, improving forests, or providing a habitat for wildlife. Free state tax filling Qualifying programs. Free state tax filling   If the three tests listed above are met, you can exclude part or all of the payments from the following programs. Free state tax filling The rural clean water program authorized by the Federal Water Pollution Control Act. Free state tax filling The rural abandoned mine program authorized by the Surface Mining Control and Reclamation Act of 1977. Free state tax filling The water bank program authorized by the Water Bank Act. Free state tax filling The emergency conservation measures program authorized by title IV of the Agricultural Credit Act of 1978. Free state tax filling The agricultural conservation program authorized by the Soil Conservation and Domestic Allotment Act. Free state tax filling The great plains conservation program authorized by the Soil Conservation and Domestic Policy Act. Free state tax filling The resource conservation and development program authorized by the Bankhead-Jones Farm Tenant Act and by the Soil Conservation and Domestic Allotment Act. Free state tax filling Certain small watershed programs, listed later. Free state tax filling Any program of a state, possession of the United States, a political subdivision of any of these, or of the District of Columbia under which payments are made to individuals primarily for conserving soil, protecting or restoring the environment, improving forests, or providing a habitat for wildlife. Free state tax filling Several state programs have been approved. Free state tax filling For information about the status of those programs, contact the state offices of the Farm Service Agency (FSA) and the Natural Resources and Conservation Service (NRCS). Free state tax filling Small watershed programs. Free state tax filling   If the three tests listed earlier are met, you can exclude part or all of the payments you receive under the following programs for improvements made in connection with a watershed. Free state tax filling The programs under the Watershed Protection and Flood Prevention Act. Free state tax filling The flood prevention projects under the Flood Control Act of 1944. Free state tax filling The Emergency Watershed Protection Program under the Flood Control Act of 1950. Free state tax filling Certain programs under the Colorado River Basin Salinity Control Act. Free state tax filling The Wetlands Reserve Program authorized by the Food Security Act of 1985, the Federal Agriculture Improvement and Reform Act of 1996 and the Farm Security and Rural Investment Act of 2002. Free state tax filling The Environmental Quality Incentives Program (EQIP) authorized by the Federal Agriculture Improvement and Reform Act of 1996. Free state tax filling The Wildlife Habitat Incentives Program (WHIP) authorized by the Federal Agriculture Improvement and Reform Act of 1996. Free state tax filling The Soil and Water Conservation Assistance Program authorized by the Agricultural Risk Protection Act of 2000. Free state tax filling The Agricultural Management Assistance Program authorized by the Agricultural Risk Protection Act of 2000. Free state tax filling The Conservation Reserve Program authorized by the Food Security Act of 1985 and the Federal Agriculture Improvement and Reform Act of 1996. Free state tax filling The Forest Land Enhancement Program authorized under the Farm Security and Rural Investment Act of 2002. Free state tax filling The Conservation Security Program authorized by the Food Security Act of 1985. Free state tax filling The Forest Health Protection Program (FHPP) authorized by the Cooperative Forestry Assistance Act of 1978. Free state tax filling Income realized. Free state tax filling   The gross income you realize upon getting an improvement under these cost-sharing programs is the value of the improvement reduced by the sum of the excludable portion and your share of the cost of the improvement (if any). Free state tax filling Value of the improvement. Free state tax filling   You determine the value of the improvement by multiplying its fair market value (defined in chapter 6) by a fraction. Free state tax filling The numerator of the fraction is the total cost of the improvement (all amounts paid either by you or by the government for the improvement) reduced by the sum of the following items. Free state tax filling Any government payments under a program not listed earlier. Free state tax filling Any part of a government payment under a program listed earlier that the Secretary of Agriculture has not certified as primarily for conservation. Free state tax filling Any government payment to you for rent or for your services. Free state tax filling The denominator of the fraction is the total cost of the improvement. Free state tax filling Excludable portion. Free state tax filling   The excludable portion is the present fair market value of the right to receive annual income from the affected acreage of the greater of the following amounts. Free state tax filling 10% of the prior average annual income from the affected acreage. Free state tax filling The prior average annual income is the average of the gross receipts from the affected acreage for the last 3 tax years before the tax year in which you started to install the improvement. Free state tax filling $2. Free state tax filling 50 times the number of affected acres. Free state tax filling The calculation of present fair market value of the right to receive annual income is too complex to discuss in this publication. Free state tax filling You may need to consult your tax advisor for assistance. Free state tax filling Example. Free state tax filling One hundred acres of your land was reclaimed under a rural abandoned mine program contract with the Natural Resources Conservation Service of the USDA. Free state tax filling The total cost of the improvement was $500,000. Free state tax filling The USDA paid $490,000. Free state tax filling You paid $10,000. Free state tax filling The value of the cost-sharing improvement is $15,000. Free state tax filling The present fair market value of the right to receive the annual income described in (1) above is $1,380, and the present fair market value of the right to receive the annual income described in (2) is $1,550. Free state tax filling The excludable portion is the greater amount, $1,550. Free state tax filling You figure the amount to include in gross income as follows: Value of cost-sharing improvement $15,000 Minus: Your share $10,000     Excludable portion 1,550 11,550 Amount included in income $ 3,450 Effects of the exclusion. Free state tax filling   When you figure the basis of property you acquire or improve using cost-sharing payments excluded from income, subtract the excluded payments from your capital costs. Free state tax filling Any payment excluded from income is not part of your basis. Free state tax filling In the example above, the increase in basis is $500,000 – $490,000 + $3,450 = $13,450. Free state tax filling   In addition, you cannot take depreciation, amortization, or depletion deductions for the part of the cost of the property for which you receive cost-sharing payments you exclude from income. Free state tax filling How to report the exclusion. Free state tax filling   Attach a statement to your tax return (or amended return) for the tax year you receive the last government payment for the improvement. Free state tax filling The statement must include the following information. Free state tax filling The dollar amount of the cost funded by the government payment. Free state tax filling The value of the improvement. Free state tax filling The amount you are excluding. Free state tax filling   Report the total cost-sharing payments you receive on Schedule F, line 4a, and the taxable amount on line 4b. Free state tax filling Recapture. Free state tax filling   If you dispose of the property within 20 years after you received the excluded payments, you must treat as ordinary income part or all of the cost-sharing payments you excluded. Free state tax filling In the above example, if the 100 acres were sold within 20 years of the exclusion for a gain of $2,000, $1,550 of that amount would be included in ordinary income. Free state tax filling You must report the recapture on Form 4797. Free state tax filling See Section 1255 property under Other Gains in chapter 9. Free state tax filling Electing not to exclude payments. Free state tax filling   You can elect not to exclude all or part of any payments you receive under these programs. Free state tax filling If you make this election for all of these payments, none of the above restrictions and rules apply. Free state tax filling You must make this election by the due date, including extensions, for filing your return. Free state tax filling In the example above, an election not to exclude payments results in $5,000 included in income and a $15,000 increase in basis. Free state tax filling 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). Free state tax filling Write “Filed pursuant to section 301. Free state tax filling 9100-2” at the top of the amended return and file it at the same address you filed the original return. Free state tax filling Payments Under the Farm Security and Rural Investment Act of 2002 and Under the Food, Conservation, and Energy Act of 2008 The Farm Security and Rural Investment Act of 2002 created two new types of payments—direct and counter-cyclical payments. Free state tax filling You must include these payments on Schedule F, lines 4a and 4b. Free state tax filling The Food, Conservation, and Energy Act of 2008 provides for direct and counter-cyclical payments (DCP) as well as Average Crop Revenue Election (ACRE) payments. Free state tax filling You must include these payments on Schedule F, lines 6a and 6b. Free state tax filling The American Taxpayer Relief Act of 2012, enacted on January 2, 2013, amends the Food, Conservation, and Energy Act of 2008 and provided a one-year extension for these payments. Free state tax filling Tobacco Quota Buyout Program Payments The Fair and Equitable Tobacco Reform Act of 2004, title VI of the American Jobs Creation Act of 2004, terminated the tobacco marketing quota program and the tobacco price support program. Free state tax filling As a result, the USDA offered to enter into contracts with eligible tobacco quota holders and growers to provide compensation for the lost value of the quotas and related price support. Free state tax filling If you are an eligible tobacco quota holder, your contract entitles you to receive total payments of $7 per pound of quota in 10 equal annual payments in fiscal years 2005 through 2014. Free state tax filling If you are an eligible tobacco grower, your contract entitles you to receive total payments of up to $3 per pound of quota in 10 equal annual payments in fiscal years 2005 through 2014. Free state tax filling Tobacco Quota Holders Contract payments you receive are considered proceeds from a sale of your tobacco quota as of the date on which you and the USDA enter into the contract. Free state tax filling Your taxable gain or loss is the total amount received for your quota reduced by any amount treated as interest (discussed below), over your adjusted basis. Free state tax filling The gain or loss is capital or ordinary depending on how you used the quota. Free state tax filling See Capital or ordinary gain or loss , later. Free state tax filling Report the entire gain on your income tax return for the tax year that includes the date you entered into the contract if you elect not to use the installment method. Free state tax filling Adjusted basis. Free state tax filling   The adjusted basis of your quota is determined differently depending on how you obtained the quota. Free state tax filling The basis of a quota derived from an original grant by the federal government is zero. Free state tax filling The basis of a purchased quota is the purchase price. Free state tax filling The basis of a quota received as a gift is generally the same as the donor's basis. Free state tax filling However, under certain circumstances, the basis is increased by the amount of gift taxes paid. Free state tax filling If the basis is greater than the fair market value of the quota at the time of the gift, the basis for determining loss is the fair market value. Free state tax filling The basis of an inherited quota is generally the fair market value of the quota at the time of the decedent's death. Free state tax filling Reduction of basis. Free state tax filling   You are required to reduce the basis of your tobacco quota by the following amounts. Free state tax filling Deductions you took for amortization, depletion, or depreciation. Free state tax filling Amounts you previously deducted as a loss because of a reduction in the number of pounds of tobacco allowable under the quota. Free state tax filling The entire cost of a purchased quota you deducted in an earlier year (which reduces your basis to zero). Free state tax filling Amount treated as interest. Free state tax filling   You must reduce your tobacco quota buyout program payment by the amount treated as interest. Free state tax filling The interest is reportable as ordinary income. Free state tax filling If payments total $3,000 or less, your total quota buyout program payment does not include any amount treated as interest and you are not required to reduce the total payment you receive. Free state tax filling   In all other cases, a portion of each payment may be treated as interest for federal tax purposes. Free state tax filling You may be required to reduce your total quota buyout program payment before you calculate your gain or loss. Free state tax filling For more information, see Notice 2005-57, 2005-32 I. Free state tax filling R. Free state tax filling B. Free state tax filling 267, available at www. Free state tax filling irs. Free state tax filling gov/irb/2005-32_IRB/ar13. Free state tax filling html. Free state tax filling Installment method. Free state tax filling   You may use the installment method to report a gain if you receive at least one payment after the close of your tax year. Free state tax filling Under the installment method, a portion of the gain is taken into account in each year in which a payment is received. Free state tax filling See chapter 10 for more information. Free state tax filling Capital or ordinary gain or loss. Free state tax filling   Whether your gain or loss is ordinary or capital depends on how you used the quota. Free state tax filling Quota used in the trade or business of farming. Free state tax filling   If you used the quota in the trade or business of farming and you held it for more than one year, you report the transaction as a section 1231 transaction on Form 4797. Free state tax filling See Section 1231 transactions in the Instructions for Form 4797 for detailed information on reporting section 1231 transactions. Free state tax filling Quota held for investment. Free state tax filling   If you held the quota for investment purposes, any gain or loss is capital gain or loss. Free state tax filling The same result also applies if you held the quota for the production of income, though not connected with a trade or business. Free state tax filling Gain treated as ordinary income. Free state tax filling   If you previously deducted any of the following items, some or all of the capital gain must be recharacterized and reported as ordinary income. Free state tax filling Any resulting capital gain is taxed as ordinary income up to the amount previously deducted. Free state tax filling The cost of acquiring a quota. Free state tax filling Amounts for amortization, depletion, or depreciation. Free state tax filling Amounts to reflect a reduction in the quota pounds. Free state tax filling   You should include the ordinary income on your return for the tax year even if you use the installment method to report the remainder of the gain. Free state tax filling Self-employment income. Free state tax filling   The tobacco quota buyout payments are not self-employment income. Free state tax filling Income averaging for farmers. Free state tax filling   The gain or loss resulting from the quota payments does not qualify for income averaging. Free state tax filling A tobacco quota is considered an interest in land. Free state tax filling Income averaging is not available for gain or loss arising from the sale or other disposition of land. Free state tax filling Involuntary conversion. Free state tax filling   The buyout of the tobacco quota is not an involuntary conversion. Free state tax filling Form 1099-S. Free state tax filling   A tobacco quota is considered an interest in land, so the USDA will generally report the total amount you receive under a contract on Form 1099-S, Proceeds From Real Estate Transactions, if the amount is $600 or more. Free state tax filling The USDA will generally report any portion of a payment treated as interest of $600 or more to you on Form 1099-INT, Interest Income, for the year in which the payment is made. Free state tax filling Like-kind exchange of quota. Free state tax filling   You may postpone reporting the gain or loss from tobacco quota buyout payments by entering into a like-kind exchange if you comply with the requirements of section 1031 and the regulations thereunder. Free state tax filling See Notice 2005-57 for more information. Free state tax filling Tobacco Growers Contract payments you receive are determined by reference to the amount of quota under which you produced (or planted) quota tobacco during the 2002, 2003, and 2004 tobacco marketing years and are prorated based on the number of years that you produced (or planted) quota tobacco during those years. Free state tax filling Taxation of payments to tobacco growers. Free state tax filling   Payments to growers replace ordinary income that would have been earned had the tobacco marketing quota and price support programs continued. Free state tax filling Individuals will generally report the payments as an Agricultural program payment on Schedule F. Free state tax filling If you are a landowner who does not materially participate in the operation or management of the farm and are receiving the grower payment because your farm rental income is based on the tobacco grown by a tenant, the grower payment should be reported on Form 4835. Free state tax filling Self-employment income. Free state tax filling   Payments to growers generally represent self-employment income. Free state tax filling If the grower is an individual carrying on a trade or business and deriving income (other than farm rental income properly reported on Form 4835) from that trade or business, the payments are net earnings from self-employment. Free state tax filling Income averaging for farmers. Free state tax filling   Payments to growers who are individuals qualify for farm income averaging. Free state tax filling Form 1099-G. Free state tax filling   If the amount received in a taxable year is $600 or more, the amount will generally be reported by the USDA on a Form 1099-G. Free state tax filling Other Payments You must include most other government program payments in income. Free state tax filling Fertilizer and Lime Include in income the value of fertilizer or lime you receive under a government program. Free state tax filling How to claim the offsetting deduction is explained under Fertilizer and Lime in chapter 4. Free state tax filling Improvements If government payments are based on improvements, such as a pollution control facility, you must include them in income. Free state tax filling You must also capitalize the full cost of the improvement. Free state tax filling Since you have included the payments in income, they do not reduce your basis. Free state tax filling However, see Cost-Sharing Exclusion (Improvements) , earlier, for additional information. Free state tax filling National Tobacco Growers' Settlement Trust Fund Payments If you are a producer, landowner, or tobacco quota owner who receives money from the National Tobacco Growers' Settlement Trust Fund, you must report those payments as income. Free state tax filling You should receive a Form 1099-MISC, Miscellaneous Income, that shows the payment amount. Free state tax filling If you produce a tobacco crop, report the payments as income from farming on your Schedule F. Free state tax filling If you are a landowner or tobacco quota owner who leases tobacco-related property but you do not produce the crop, report the payments as farm rental income on Form 4835. Free state tax filling Payment to More Than One Person The USDA reports program payments to the IRS. Free state tax filling It reports a program payment intended for more than one person as having been paid to the person whose identification number is on record for that payment (payee of record). Free state tax filling If you, as the payee of record, receive a program payment belonging to someone else, such as your landlord, the amount belonging to the other person is a nominee distribution. Free state tax filling You should file Form 1099-G to report the identity of the actual recipient to the IRS. Free state tax filling You should also give this information to the recipient. Free state tax filling You can avoid the inconvenience of unnecessary inquiries about the identity of the recipient if you file this form. Free state tax filling Report the total amount reported to you as the payee of record on Schedule F, line 4a or 6a. Free state tax filling However, do not report as a taxable amount on line 4b or 6b any amount belonging to someone else. Free state tax filling See chapter 16 for information about ordering Form 1099-G. Free state tax filling Income From Cooperatives If you buy farm supplies through a cooperative, you may receive income from the cooperative in the form of patronage dividends (refunds). Free state tax filling If you sell your farm products through a cooperative, you may receive either patronage dividends or a per-unit retain certificate, explained later, from the cooperative. Free state tax filling Form 1099-PATR. Free state tax filling   The cooperative will report the income to you on Form 1099-PATR or a similar form and send a copy to the IRS. Free state tax filling Form 1099-PATR may also show an alternative minimum tax adjustment that you must include on Form 6251, Alternative Minimum Tax—Individuals, if you are required to file the form. Free state tax filling For information on the alternative minimum tax, see the Instructions for Form 6251. Free state tax filling Patronage Dividends You generally report patronage dividends as income on Schedule F, lines 3a and 3b, for the tax year you receive them. Free state tax filling They include the following items. Free state tax filling Money paid as a patronage dividend, including cash advances received (for example, from a marketing cooperative). Free state tax filling The stated dollar value of qualified written notices of allocation. Free state tax filling The fair market value of other property. Free state tax filling Do not report as income on line 3b any patronage dividends you receive from expenditures that were not deductible, such as buying personal or family items, capital assets, or depreciable property. Free state tax filling You must reduce the cost or other basis of these items by the amount of such patronage dividends received. Free state tax filling Personal items include fuel purchased for personal use, basic local telephone service, and personal long distance calls. Free state tax filling If you cannot determine what the dividend is for, report it as income on lines 3a and 3b. Free state tax filling Qualified written notice of allocation. Free state tax filling   If you receive a qualified written notice of allocation as part of a patronage dividend, you must generally include its stated dollar value in your income on Schedule F, lines 3a and 3b, in the year you receive it. Free state tax filling A written notice of allocation is qualified if at least 20% of the patronage dividend is paid in money or by qualified check and either of the following conditions is met. Free state tax filling The notice must be redeemable in cash for at least 90 days after it is issued, and you must have received a written notice of your right of redemption at the same time as the written notice of allocation. Free state tax filling You must have agreed to include the stated dollar value in income in the year you receive the notice by doing one of the following. Free state tax filling Signing and giving a written agreement to the cooperative. Free state tax filling Getting or keeping membership in the cooperative after it adopted a bylaw providing that membership constitutes agreement. Free state tax filling The cooperative must notify you in writing of this bylaw and give you a copy. Free state tax filling Endorsing and cashing a qualified check paid as part of the same patronage dividend. Free state tax filling You must cash the check by the 90th day after the close of the payment period for the cooperative's tax year for which the patronage dividend was paid. Free state tax filling Qualified check. Free state tax filling   A qualified check is any instrument that is redeemable in money and meets both of the following requirements. Free state tax filling It is part of a patronage dividend that also includes a qualified written notice of allocation for which you met condition 2(c), above. Free state tax filling It is imprinted with a statement that endorsing and cashing it constitutes the payee's consent to include in income the stated dollar value of any written notices of allocation paid as part of the same patronage dividend. Free state tax filling Loss on redemption. Free state tax filling   You can deduct on Schedule F, Part II, any loss incurred on the redemption of a qualified written notice of allocation you received in the ordinary course of your farming business. Free state tax filling The loss is the difference between the stated dollar amount of the qualified written notice you included in income and the amount you received when you redeemed it. Free state tax filling Nonqualified notice of allocation. Free state tax filling   Do not include the stated dollar value of any nonqualified notice of allocation in income when you receive it. Free state tax filling Your basis in the notice is zero. Free state tax filling You must include in income for the tax year of disposition any amount you receive from its sale, redemption, or other disposition. Free state tax filling Report that amount, up to the stated dollar value of the notice, on Schedule F, lines 3a and 3b. Free state tax filling However, do not include that amount in your income if the notice resulted from buying or selling capital assets or depreciable property or from buying personal items, as explained in the following discussions. Free state tax filling   If the amount you receive is more than the stated dollar value of the notice, report the excess as the type of income it represents. Free state tax filling For example, if it represents interest income, report it on your return as interest. Free state tax filling Buying or selling capital assets or depreciable property. Free state tax filling   Do not include in income patronage dividends from buying capital assets or depreciable property used in your business. Free state tax filling You must, however, reduce the basis of these assets by the dividends. Free state tax filling This reduction is taken into account as of the first day of the tax year in which the dividends are received. Free state tax filling If the dividends are more than your unrecovered basis, reduce the unrecovered basis to zero and include the difference on Schedule F, line 3a, for the tax year you receive them. Free state tax filling   This rule and the exceptions explained below also apply to amounts you receive from the sale, redemption, or other disposition of a nonqualified notice of allocation that resulted from buying or selling capital assets or depreciable property. Free state tax filling Example. Free state tax filling On July 1, 2012, Mr. Free state tax filling Brown, a patron of a cooperative association, bought a machine for his dairy farm business from the association for $2,900. Free state tax filling The machine has a life of 7 years under MACRS (as provided in the Table of Class Lives and Recovery Periods in Appendix B of Publication 946, Depreciation and Amortization). Free state tax filling Mr. Free state tax filling Brown files his return on a calendar year basis. Free state tax filling For 2012, he claimed a depreciation deduction of $311, using the 10. Free state tax filling 71% depreciation rate from the 150% declining balance, half-year convention table (shown in Table A-14 in Appendix A of Publication 946). Free state tax filling On July 2, 2013, the cooperative association paid Mr. Free state tax filling Brown a $300 cash patronage dividend for buying the machine. Free state tax filling Mr. Free state tax filling Brown adjusts the basis of the machine and figures his depreciation deduction for 2013 (and later years) as follows. Free state tax filling Cost of machine on July 1, 2012 $2,900 Minus: 2012 depreciation $311     2013 cash dividend 300 611 Adjusted basis for  depreciation for 2013: $2,289 Depreciation rate: 1 ÷ 6½ (remaining recovery period as of 1/1/2012) = 15. Free state tax filling 38% × 1. Free state tax filling 5 = 23. Free state tax filling 07% Depreciation deduction for 2013 ($2,289 × 23. Free state tax filling 07%) $528 Exceptions. Free state tax filling   If the dividends are for buying or selling capital assets or depreciable property you did not own at any time during the year you received the dividends, you must include them on Schedule F, lines 3a and 3b, unless one of the following rules applies. Free state tax filling If the dividends relate to a capital asset you held for more than 1 year for which a loss was or would have been deductible, treat them as gain from the sale or exchange of a capital asset held for more than 1 year. Free state tax filling If the dividends relate to a capital asset for which a loss was not or would not have been deductible, do not report them as income (ordinary or capital gain). Free state tax filling   If the dividends are for selling capital assets or depreciable property during the year you received the dividends, treat them as an additional amount received on the sale. Free state tax filling Personal purchases. Free state tax filling   Because you cannot deduct the cost of personal, living, or family items, such as supplies, equipment, or services not related to the production of farm income, you can omit from the taxable amount of patronage dividends on Schedule F, line 3b, any dividends from buying those items (and you must reduce the cost or other basis of those items by the amount of the dividends). Free state tax filling This rule also applies to amounts you receive from the sale, redemption, or other disposition of a nonqualified written notice of allocation resulting from these purchases. Free state tax filling Per-Unit Retain Certificates A per-unit retain certificate is any written notice that shows the stated dollar amount of a per-unit retain allocation made to you by the cooperative. Free state tax filling A per-unit retain allocation is an amount paid to patrons for products sold for them that is fixed without regard to the net earnings of the cooperative. Free state tax filling These allocations can be paid in money, other property, or qualified certificates. Free state tax filling Per-unit retain certificates issued by a cooperative generally receive the same tax treatment as patronage dividends, discussed earlier. Free state tax filling Qualified certificates. Free state tax filling   Qualified per-unit retain certificates are those issued to patrons who have agreed to include the stated dollar amount of these certificates in income in the year of receipt. Free state tax filling The agreement may be made in writing or by getting or keeping membership in a cooperative whose bylaws or charter states that membership constitutes agreement. Free state tax filling If you receive qualified per-unit retain certificates, include the stated dollar amount of the certificates in income on Schedule F, lines 3a and 3b, for the tax year you receive them. Free state tax filling Nonqualified certificates. Free state tax filling   Do not include the stated dollar value of a nonqualified per-unit retain certificate in income when you receive it. Free state tax filling Your basis in the certificate is zero. Free state tax filling You must include in income any amount you receive from its sale, redemption, or other disposition. Free state tax filling Report the amount you receive from the disposition as ordinary income on Schedule F, lines 3a and 3b, for the tax year of disposition. Free state tax filling Cancellation of Debt This section explains the general rule for including canceled debt in income and the exceptions to the general rule. Free state tax filling For more information on canceled debt, see Publication 4681, Canceled Debts, Foreclosures, Repossessions, and Abandonments. Free state tax filling General Rule Generally, if your debt is canceled or forgiven, other than as a gift or bequest to you, you must include the canceled amount in gross income for tax purposes. Free state tax filling Discharge of qualified farm indebtedness (defined below) is one of the exceptions to the general rule. Free state tax filling It is excluded from taxable income (see Exclusions , later). Free state tax filling Report the canceled amount on Schedule F, line 8, if you incurred the debt in your farming business. Free state tax filling If the debt is a nonbusiness debt, report the canceled amount as other income on Form 1040, line 21. Free state tax filling Election to defer income from discharge of indebtedness. Free state tax filling   You can elect to defer income from a discharge of business indebtedness that occurred after 2008 and before 2011. Free state tax filling Generally, if the election is made, the deferred income is included in gross income ratably over a 5-year period beginning in 2014 (for calendar year taxpayers) and the exclusions listed below do not apply. Free state tax filling See IRC section 108(i) and Publication 4681 for details. Free state tax filling Form 1099-C. Free state tax filling   If a federal agency, financial institution, credit union, finance company, or credit card company cancels or forgives your debt of $600 or more, you will receive a Form 1099-C, Cancellation of Debt. Free state tax filling The amount of debt canceled is shown in box 2. Free state tax filling Exceptions The following discussion covers some exceptions to the general rule for canceled debt. Free state tax filling These exceptions apply before the exclusions discussed below. Free state tax filling Price reduced after purchase. Free state tax filling   If your purchase of property was financed by the seller and the seller reduces the amount of the debt at a time when you are not insolvent and the reduction does not occur in a chapter 11 bankruptcy case, the amount of the debt reduction will be treated as a reduction in the purchase price of the property. Free state tax filling Reduce your basis in the property by the amount of the reduction in the debt. Free state tax filling The rules that apply to bankruptcy and insolvency are explained below under Exclusions . Free state tax filling Deductible debt. Free state tax filling   You do not realize income from a canceled debt to the extent the payment of the debt would have been a deductible expense. Free state tax filling This exception applies before the price reduction exception discussed above and the bankruptcy and insolvency exclusions discussed next. Free state tax filling Example. Free state tax filling You get accounting services for your farm on credit. Free state tax filling Later, you have trouble paying your farm debts, but you are not bankrupt or insolvent. Free state tax filling Your accountant forgives part of the amount you owe for the accounting services. Free state tax filling How you treat the canceled debt depends on your method of accounting. Free state tax filling Cash method — You do not include the canceled debt in income because payment of the debt would have been deductible as a business expense. Free state tax filling Accrual method — You include the canceled debt in income because the expense was deductible when you incurred the debt. Free state tax filling Exclusions Do not include canceled debt in income in the following situations. Free state tax filling The cancellation takes place in a bankruptcy case under title 11 of the U. Free state tax filling S. Free state tax filling Code. Free state tax filling The cancellation takes place when you are insolvent. Free state tax filling The canceled debt is a qualified farm debt. Free state tax filling The canceled debt is a qualified real property business debt (in the case of a taxpayer other than a C corporation). Free state tax filling See Publication 334, Tax Guide for Small Business, chapter 5. Free state tax filling The canceled debt is qualified principal residence indebtedness which is discharged after 2006 and before 2014. Free state tax filling The exclusions do not apply in the following situations: If a canceled debt is excluded from income because it takes place in a bankruptcy case, the exclusions in situations (2), (3), (4), and (5) do not apply. Free state tax filling If a canceled debt is excluded from income because it takes place when you are insolvent, the exclusions in situations (3) and (4) do not apply to the extent you are insolvent. Free state tax filling If a canceled debt is excluded from income because it is qualified principal residence indebtedness, the exclusion in situation (2) does not apply unless you elect to apply situation (2) instead of the exclusion for qualified principal residence indebtedness. Free state tax filling See Form 982 , later, for information on how to claim an exclusion for a canceled debt. Free state tax filling Debt. Free state tax filling   For this discussion, debt includes any debt for which you are liable or that attaches to property you hold. Free state tax filling Bankruptcy and Insolvency You can exclude a canceled debt from income if you are bankrupt or to the extent you are insolvent. Free state tax filling Bankruptcy. Free state tax filling   A bankruptcy case is a case under title 11 of the U. Free state tax filling S. Free state tax filling Code if you are under the jurisdiction of the court and the cancellation of the debt is granted by the court or is the result of a plan approved by the court. Free state tax filling   Do not include debt canceled in a bankruptcy case in your income in the year it is canceled. Free state tax filling Instead, you must use the amount canceled to reduce your tax attributes, explained below under Reduction of tax attributes . Free state tax filling Insolvency. Free state tax filling   You are insolvent to the extent your liabilities are more than the fair market value of your assets immediately before the cancellation of debt. Free state tax filling   You can exclude canceled debt from gross income up to the amount by which you are insolvent. Free state tax filling If the canceled debt is more than this amount and the debt qualifies, you can apply the rules for qualified farm debt or qualified real property business debt to the difference. Free state tax filling Otherwise, you include the difference in gross income. Free state tax filling Use the amount excluded because of insolvency to reduce any tax attributes, as explained below under Reduction of tax attributes . Free state tax filling You must reduce the tax attributes under the insolvency rules before applying the rules for qualified farm debt or for qualified real property business debt. Free state tax filling Example. Free state tax filling You had a $15,000 debt that was not qualified principal residence debt canceled outside of bankruptcy. Free state tax filling Immediately before the cancellation, your liabilities totaled $80,000 and your assets totaled $75,000. Free state tax filling Since your liabilities were more than your assets, you were insolvent to the extent of $5,000 ($80,000 − $75,000). Free state tax filling You can exclude this amount from income. Free state tax filling The remaining canceled debt ($10,000) may be subject to the qualified farm debt or qualified real property business debt rules. Free state tax filling If not, you must include it in income. Free state tax filling Reduction of tax attributes. Free state tax filling   If you exclude canceled debt from income in a bankruptcy case or during insolvency, you must use the excluded debt to reduce certain tax attributes. Free state tax filling Order of reduction. Free state tax filling   You must use the excluded canceled debt to reduce the following tax attributes in the order listed unless you elect to reduce the basis of depreciable property first, as explained later. Free state tax filling Net operating loss (NOL). Free state tax filling Reduce any NOL for the tax year of the debt cancellation, and then any NOL carryover to that year. Free state tax filling Reduce the NOL or NOL carryover one dollar for each dollar of excluded canceled debt. Free state tax filling General business credit carryover. Free state tax filling Reduce the credit carryover to or from the tax year of the debt cancellation. Free state tax filling Reduce the carryover 331/3 cents for each dollar of excluded canceled debt. Free state tax filling Minimum tax credit. Free state tax filling Reduce the minimum tax credit available at the beginning of the tax year following the tax year of the debt cancellation. Free state tax filling Reduce the credit 331/3 cents for each dollar of excluded canceled debt. Free state tax filling Capital loss. Free state tax filling Reduce any net capital loss for the tax year of the debt cancellation, and then any capital loss carryover to that year. Free state tax filling Reduce the capital loss or loss carryover one dollar for each dollar of excluded canceled debt. Free state tax filling Basis. Free state tax filling Reduce the basis of the property you hold at the beginning of the tax year following the tax year of the debt cancellation in the following order. Free state tax filling Real property (except inventory) used in your trade or business or held for investment that secured the canceled debt. Free state tax filling Personal property (except inventory and accounts and notes receivable) used in your trade or business or held for investment that secured the canceled debt. Free state tax filling Other property (except inventory and accounts and notes receivable) used in your trade or business or held for investment. Free state tax filling Inventory and accounts and notes receivable. Free state tax filling Other property. Free state tax filling Reduce the basis one dollar for each dollar of excluded canceled debt. Free state tax filling However, the reduction cannot be more than the total basis of property and the amount of money you hold immediately after the debt cancellation minus your total liabilities immediately after the cancellation. Free state tax filling For allocation rules that apply to basis reductions for multiple canceled debts, see Regulations section 1. Free state tax filling 1017-1(b)(2). Free state tax filling Also see Electing to reduce the basis of depreciable property
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Know Your Rights as a Car Owner

Sometimes a manufacturer makes a design or production mistake on a motor vehicle. A service bulletin notifies the dealer of the problem and how to resolve it. Because these free repairs are not publicized, they are called "secret warranties." The National Highway Traffic Safety Administration maintains a database of service bulletins filed by manufacturers.

If you have a problem with a vehicle that is a safety hazard, check whether the manufacturer has recalled your vehicle. Click on Recalls or call NHTSA at 1-800-424-9393.Hazards that aren't listed should be reported to your dealer, the manufacturer of the vehicle, and NHTSA. If a safety-related defect exists, the maker must fix it at no cost to you-even if your warranty has expired.

If you have a vehicle with a unique problem that just never seems to get fixed, you may have a lemon. Some states have laws concerning lemons that require a refund or replacement if a problem is not fixed within a reasonable number of tries or if you haven't been able to use your vehicle for a certain number of days. Contact your local consumer protection office to learn whether you have such protections and what steps you must take to solve your problem. If you believe your car is a lemon:

  • Give the dealer a list of the problems every time you bring it in for repairs.
  • Get and keep copies of the repair orders listing the problems, the work done, and the dates the car was in the shop.
  • Contact the manufacturer, as well as the dealer, to report the problem. Check your owner's manual or the directory for the auto manufacturers.
  • Help other consumers avoid purchasing your lemon by registering it at safetyforum.com.

The Center for Auto Safety gathers information and complaints concerning safety defects, recalls, service bulletins and state lemon laws.

The Free State Tax Filling

Free state tax filling Index A Affected taxpayer, Affected taxpayer. Free state tax filling B Book inventories, charitable deduction for, Charitable Deduction for Contributions of Book Inventories to Public Schools C Cancellation of indebtedness, Exclusion of Certain Cancellations of Indebtedness by Reason of Hurricane Katrina Casualty and theft losses, Casualty and Theft Losses Charitable contributions, Temporary Suspension of Limits on Charitable Contributions Charitable deduction: Book inventory, Charitable Deduction for Contributions of Book Inventories to Public Schools Food inventory, Charitable Deduction for Contributions of Food Inventory Child tax credit, Earned Income Credit and Child Tax Credit Clean-up costs, Demolition and Clean-up Costs Copy of tax return, request for, Request for copy of tax return. Free state tax filling Core disaster area, Gulf Opportunity (GO) Zone (Core Disaster Area) Covered disaster area: Katrina, Katrina Covered Disaster Area Rita, Hurricane Rita Disaster Area (Rita Covered Disaster Area) Wilma, Wilma Covered Disaster Area Credits: Child tax, Earned Income Credit and Child Tax Credit Earned income, Earned Income Credit and Child Tax Credit Education, Education Credits Employee retention, Employee Retention Credit Hurricane Katrina housing, Hurricane Katrina Housing Credit Rehabilitation tax, Increase in Rehabilitation Tax Credit Work opportunity, Work Opportunity Credit D Deadlines, extended, Extended Tax Deadlines Demolition costs, Demolition and Clean-up Costs Depreciation: Qualified GO Zone property, Qualified GO Zone property. Free state tax filling Special allowance, Special Depreciation Allowance Disaster area: Hurricane Katrina, Hurricane Katrina Disaster Area Hurricane Rita, Hurricane Rita Disaster Area (Rita Covered Disaster Area) Hurricane Wilma, Hurricane Wilma Disaster Area Distributions: Home purchase or construction, Repayment of Qualified Distributions for the Purchase or Construction of a Main Home Qualified hurricane, Qualified hurricane distribution. Free state tax filling Repayment of, Repayment of Qualified Hurricane Distributions Taxation of, Taxation of Qualified Hurricane Distributions E Earned income credit, Earned Income Credit and Child Tax Credit Education credits, Education Credits Eligible retirement plan, Eligible retirement plan. Free state tax filling Employee retention credit, Employee Retention Credit Exemption, additional for housing, Additional Exemption for Housing Individuals Displaced by Hurricane Katrina F Federal mortgage subsidy, recapture of, Recapture of Federal Mortgage Subsidy Food inventory, charitable deduction for, Charitable Deduction for Contributions of Food Inventory G Gulf Opportunity (GO) Zone, Gulf Opportunity (GO) Zone (Core Disaster Area) H Help: How to get, How To Get Tax Help Phone number, How To Get Tax Help Special IRS assistance, How To Get Tax Help Website, How To Get Tax Help Hope credit (see Education credits) Hurricane Katrina disaster area, Hurricane Katrina Disaster Area Hurricane Katrina housing credit, Hurricane Katrina Housing Credit Hurricane Rita disaster area, Hurricane Rita Disaster Area (Rita Covered Disaster Area) Hurricane Wilma disaster area, Hurricane Wilma Disaster Area I Involuntary conversion (see Replacement period for nonrecognition of gain) IRAs and other retirement plans, IRAs and Other Retirement Plans L Lifetime learning credit (see Education credits) M Mileage reimbursements, charitable volunteers, Mileage Reimbursements to Charitable Volunteers N Net operating losses, Net Operating Losses Q Qualified GO Zone loss, Qualified GO Zone loss. Free state tax filling Qualified hurricane distribution, Qualified hurricane distribution. Free state tax filling R Reforestation costs, Reforestation Costs Rehabilitation tax credit, Increase in Rehabilitation Tax Credit Relocation, temporary, Tax Relief for Temporary Relocation Replacement period for nonrecognition of gain, Replacement Period for Nonrecognition of Gain Retirement plan, eligible, Eligible retirement plan. Free state tax filling Retirement plans, IRAs and Other Retirement Plans Rita GO Zone, Rita GO Zone S Section 179 deduction, Increased Section 179 Deduction Standard mileage rate, charitable use, Standard Mileage Rate for Charitable Use of Vehicles T Tax return: Request for copy, Request for copy of tax return. Free state tax filling Request for transcript, Request for transcript of tax return. Free state tax filling Taxpayer Advocate, Contacting your Taxpayer Advocate. Free state tax filling Temporary relocation, Tax Relief for Temporary Relocation Theft losses, Casualty and Theft Losses Timber: 5-year NOL carryback, 5-year NOL carryback of certain timber losses. Free state tax filling Reforestation costs, Reforestation Costs Transcript of tax return, request for, Request for transcript of tax return. Free state tax filling W Wilma GO Zone, Wilma GO Zone Work opportunity credit, Work Opportunity Credit Prev  Up     Home   More Online Publications