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2011 1040 Ez Form

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2011 1040 Ez Form

2011 1040 ez form Publication 547(SP) - Introductory Material Table of Contents Qué Hay de Nuevo Recordatorios IntroductionCómo pedir formularios y publicaciones. 2011 1040 ez form Preguntas sobre los impuestos. 2011 1040 ez form Useful Items - You may want to see: Qué Hay de Nuevo Nueva Sección C en el Formulario 4684 para esquemas de inversión de tipo Ponzi (Ponzi-type schemes). 2011 1040 ez form  La Sección C del Formulario 4684 (disponible en inglés) es nueva para el año 2013. 2011 1040 ez form Usted debe completar la Seción C si está reclamando una deducción de pérdida por robo debido a un esquema de inversión de tipo Ponzi (Ponzi-type scheme) y estará usando el Procedimiento Tributario (Revenue Procedure) 2009-20, según modificado por el Procedimiento Tributario (Revenue Procedure) 2011-58. 2011 1040 ez form La Sección C del Formulario 4864 reemplaza el Anexo A del Procedimiento Tributario (Revenue Procedure) 2009-20. 2011 1040 ez form No necesita completar el Anexo A. 2011 1040 ez form Para más información, vea Pérdidas provenientes de esquemas de inversión de tipo Ponzi (Ponzi-type schemes) , más adelante. 2011 1040 ez form Recordatorios Acontecimientos futuros. 2011 1040 ez form  Si desea obtener la información más reciente sobre los acontecimientos relacionados con la Publicación 547(SP), tal como legislación promulgada después que ésta fue impresa, acceda a www. 2011 1040 ez form irs. 2011 1040 ez form gov/Spanish/About-Publication-547(SP). 2011 1040 ez form Fotografías de niños desaparecidos. 2011 1040 ez form  El Servicio de Impuestos Internos (IRS, por sus siglas en inglés) se enorgullece en colaborar con el Centro Nacional de Niños Desaparecidos y Explotados (National Center for Missing and Exploited Children). 2011 1040 ez form En esta publicación, pueden aparecer fotografías de niños desaparecidos que han sido seleccionadas por el Centro. 2011 1040 ez form Estas fotografías aparecen en páginas que de otra manera estarían en blanco. 2011 1040 ez form Usted puede ayudar a que estos niños regresen a sus hogares si identifica alguno de ellos y llama gratis al 1-800-THE-LOST (1-800-843-5678). 2011 1040 ez form Introduction Esta publicación explica el trato tributario de casos de hechos fortuitos, robos y pérdidas de depósitos monetarios. 2011 1040 ez form Un hecho fortuito ocurre cuando su propiedad resulta dañada por causa de algún desastre, como por ejemplo, una tormenta, un incendio, un accidente automovilístico u otro suceso de esta índole. 2011 1040 ez form Un robo ocurre cuando alguien hurta sus bienes. 2011 1040 ez form La pérdida de depósitos monetarios ocurre cuando su institución bancaria se declara insolvente o en quiebra (bancarrota). 2011 1040 ez form Esta publicación aborda los siguientes temas: Definiciones de hecho fortuito, robo y pérdida de depósitos monetarios. 2011 1040 ez form Cómo calcular el monto de su pérdida o ganancia. 2011 1040 ez form Cómo se tratan tributariamente seguros y otros reembolsos que reciba. 2011 1040 ez form Límites de la deducción. 2011 1040 ez form Cómo y cuándo declarar un caso de hecho fortuito o robo. 2011 1040 ez form Reglas especiales para pérdidas en zonas de desastre. 2011 1040 ez form Formularios que tiene que presentar. 2011 1040 ez form   Normalmente, si es víctima de un hecho fortuito o robo, tiene que presentar el Formulario 4684 (disponible sólo en inglés). 2011 1040 ez form Asimismo, es posible que tenga que presentar uno o más de los siguientes formularios (todos en inglés): Anexo A (Formulario 1040). 2011 1040 ez form Formulario 1040NR, Anexo A (para extranjeros no residentes). 2011 1040 ez form Anexo D. 2011 1040 ez form Formulario 4797. 2011 1040 ez form Para información adicional sobre qué formulario utilizar, vea más adelante la sección sobre Cómo Declarar Pérdidas y Ganancias . 2011 1040 ez form Expropiaciones forzosas. 2011 1040 ez form   Para obtener información sobre expropiaciones forzosas de propiedades, vea el tema Involuntary Conversions (Conversiones involuntarias) en el capítulo 1 de la Publicación 544, Sales and Other Dispositions of Assets (Ventas y otras enajenaciones de activos), en inglés. 2011 1040 ez form Registros para el cálculo de pérdidas por hecho fortuito y robo. 2011 1040 ez form   La Publicación 584SP, Registro de Pérdidas por Hechos Fortuitos (Imprevistos), Desastres y Robos (Propiedad de uso Personal) está a su disposición para ayudarle a hacer una lista de artículos de sus bienes de uso personal que hayan sido robados o dañados y calcular su pérdida. 2011 1040 ez form En dicha publicación se incluyen tablas para ayudarle a calcular el monto de las pérdidas de su vivienda, artículos de la misma y vehículos motorizados. 2011 1040 ez form   La Publicación 584-B, Business Casualty, Disaster, and Theft Loss Workbook (Registro de pérdidas por hechos fortuitos, desastres y robos de propiedad de uso comercial), en inglés puede ayudarle a hacer una lista de artículos que hayan sido robados o dañados en su empresa o bienes de generación de ingresos, y calcular su pérdida. 2011 1040 ez form Comentarios y sugerencias. 2011 1040 ez form   Agradecemos sus comentarios y sugerencias sobre esta publicación para ediciones futuras. 2011 1040 ez form   Puede escribirnos a la siguiente dirección: Internal Revenue Service Tax Forms and Publications Division 1111 Constitution Ave. 2011 1040 ez form NW, IR-6526 Washington, DC 20224   Contestamos gran parte de correspondencia por teléfono. 2011 1040 ez form Por lo tanto, nos sería útil si en su correspondencia incluye el número telefónico con su código de área donde podemos ubicarlo durante el día. 2011 1040 ez form   Puede enviarnos comentarios a través de www. 2011 1040 ez form irs. 2011 1040 ez form gov/formspubs, pulsando sobre “ Comment on Tax Forms and Publications ” (Comentarios sobre formularios y publicaciones tributarios) bajo el título “ Information about ” (Información sobre), en inglés. 2011 1040 ez form   Aunque no podemos contestar cada uno de los comentarios, agradecemos su opinión y tendremos en cuenta sus comentarios cuando revisemos nuestros productos. 2011 1040 ez form Cómo pedir formularios y publicaciones. 2011 1040 ez form   Visite el sitio web del IRS www. 2011 1040 ez form irs. 2011 1040 ez form gov/espanol y pulse sobre el enlace “Formularios y Publicaciones” para descargar formularios y publicaciones. 2011 1040 ez form Llame al 1-800-829-3676 o escriba a la dirección que aparece a continuación y recibirá respuesta a los 10 días de que el IRS reciba su solicitud: Internal Revenue Service 1201 N. 2011 1040 ez form Mitsubishi Motorway Bloomington, IL 61705-6613 Preguntas sobre los impuestos. 2011 1040 ez form   Si tiene alguna pregunta acerca de sus impuestos, consulte la información disponible en IRS. 2011 1040 ez form gov/espanol o llame al número 1-800-829-1040. 2011 1040 ez form No podemos contestar preguntas sobre impuestos enviadas a las direcciones anteriores. 2011 1040 ez form Useful Items - You may want to see: Publicación 523 Selling Your Home (Venta de su vivienda), en inglés 525 Taxable and Nontaxable Income (Ingresos tributables y no tributables), en inglés 550 Investment Income and Expenses (Ingresos y gastos de inversiones), en inglés 551 Basis of Assets (Base de activos), en inglés 584SP Registro de Pérdidas por Hechos Fortuitos (Imprevistos), Desastres y Robos (Propiedad de Uso Personal) 584-B Business Casualty, Disaster, and Theft Loss Workbook (Registro de pérdidas por hechos fortuitos, desastres y robos comerciales), en inglés  Formulario (e Instrucciones) Anexo A (Formulario 1040) Itemized Deductions (Deducciones detalladas), en inglés Anexo A (Formulario 1040NR) Itemized Deductions (for nonresident aliens) (Deducciones detalladas (para extranjeros no residentes)), en inglés Anexo D (Formulario 1040) Capital Gains and Losses (Pérdidas y ganancias de capital), en inglés 4684 Casualties and Thefts (Hechos fortuitos y robos), en inglés 4797 Sales of Business Property (Ventas de bienes comerciales), en inglés  Para más información sobre cómo obtener publicaciones y formularios, vea la sección Cómo Obtener Ayuda con los Impuestos al final de esta publicación. 2011 1040 ez form Prev  Up  Next   Home   More Online Publications
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Tax Relief for Victims of Freedom and Noble Wildfires in Oklahoma

OK-2012-09, Aug. 23, 2012

Updated 9/27/2012 to include Noble Wildfire and include Cleveland County.

OKLAHOMA CITY — Victims of the Freedom and Noble Wildfires that began on Aug. 3, 2012, in parts of Oklahoma may qualify for tax relief from the Internal Revenue Service.

The President has declared Creek and Cleveland counties a federal disaster area. Individuals who reside or have a business in these counties may qualify for tax relief.

The declaration permits the IRS to postpone certain deadlines for taxpayers who reside or have a business in the disaster area. For instance, certain deadlines falling on or after Aug. 3, and on or before Oct. 2, have been postponed to Oct. 2, 2012. This includes the quarterly estimated tax payment due on Sept. 17, 2012.

In addition, the IRS is waiving the failure-to-deposit penalties for employment and excise tax deposits due on or after Aug. 3, and on or before Aug. 20, as long as the deposits are made by Aug. 20, 2012.

If an affected taxpayer receives a penalty notice from the IRS, the taxpayer should call the telephone number on the notice to have the IRS abate any interest and any late filing or late payment penalties that would otherwise apply. Penalties or interest will be abated only for taxpayers who have an original or extended filing, payment or deposit due date, including an extended filing or payment due date, that falls within the postponement period.

The IRS automatically identifies taxpayers located in the covered disaster area and applies automatic filing and payment relief. But affected taxpayers who reside or have a business located outside the covered disaster area must call the IRS disaster hotline at 1-866-562-5227 to request this tax relief.

Covered Disaster Area

The counties listed above constitute a covered disaster area for purposes of Treas. Reg. § 301.7508A-1(d)(2) and is entitled to the relief detailed below.

Affected Taxpayers

Taxpayers considered to be affected taxpayers eligible for the postponement of time to file returns, pay taxes and perform other time-sensitive acts are those taxpayers listed in Treas. Reg. § 301.7508A-1(d)(1), and include individuals who live, and businesses whose principal place of business is located, in the covered disaster area. Taxpayers not in the covered disaster area, but whose records necessary to meet a deadline listed in Treas. Reg. § 301.7508A-1(c) are in the covered disaster area, are also entitled to relief. In addition, all relief workers affiliated with a recognized government or philanthropic organization assisting in the relief activities in the covered disaster area and any individual visiting the covered disaster area who was killed or injured as a result of the disaster are entitled to relief.

Grant of Relief

Under section 7508A, the IRS gives affected taxpayers until Oct. 2 to file most tax returns (including individual, corporate, and estate and trust income tax returns; partnership returns, S corporation returns, and trust returns; estate, gift, and generation-skipping transfer tax returns; and employment and certain excise tax returns), or to make tax payments, including estimated tax payments, that have either an original or extended due date occurring on or after Aug. 3 and on or before Oct. 2.

The IRS also gives affected taxpayers until Oct. 2 to perform other time-sensitive actions described in Treas. Reg. § 301.7508A-1(c)(1) and Rev. Proc. 2007-56, 2007-34 I.R.B. 388 (Aug. 20, 2007), that are due to be performed on or after Aug. 3 and on or before Oct. 2.

This relief also includes the filing of Form 5500 series returns, in the manner described in section 8 of Rev. Proc. 2007-56. The relief described in section 17 of Rev. Proc. 2007-56, pertaining to like-kind exchanges of property, also applies to certain taxpayers who are not otherwise affected taxpayers and may include acts required to be performed before or after the period above.

The postponement of time to file and pay does not apply to information returns in the W-2, 1098, 1099 series, or to Forms 1042-S or 8027. Penalties for failure to timely file information returns can be waived under existing procedures for reasonable cause. Likewise, the postponement does not apply to employment and excise tax deposits. The IRS, however, will abate penalties for failure to make timely employment and excise tax deposits due on or after Aug. 3 and on or before Aug. 20 provided the taxpayer makes these deposits by Aug. 20.

Casualty Losses

Affected taxpayers in a federally declared disaster area have the option of claiming disaster-related casualty losses on their federal income tax return for either this year or last year. Claiming the loss on an original or amended return for last year will get the taxpayer an earlier refund, but waiting to claim the loss on this year’s return could result in a greater tax saving, depending on other income factors.

Individuals may deduct personal property losses that are not covered by insurance or other reimbursements. For details, see Form 4684 and its instructions.

Affected taxpayers claiming the disaster loss on last year’s return should put the Disaster Designation “OKLAHOMA/FREEDOM WILDFIRE” or "OKLAHOMA/NOBLE WILDFIRE" at the top of the form so that the IRS can expedite the processing of the refund.

Other Relief

The IRS will waive the usual fees and expedite requests for copies of previously filed tax returns for affected taxpayers. Taxpayers should put the assigned Disaster Designation in red ink at the top of Form 4506, Request for Copy of Tax Return, or Form 4506-T, Request for Transcript of Tax Return, as appropriate, and submit it to the IRS.

Affected taxpayers who are contacted by the IRS on a collection or examination matter should explain how the disaster impacts them so that the IRS can provide appropriate consideration to their case.

Taxpayers may download forms and publications from the official IRS website, IRS.gov, or order them by calling 1-800-TAX-FORM (1-800-829-3676). The IRS toll-free number for general tax questions is 1-800-829-1040.

Page Last Reviewed or Updated: 14-Aug-2013

The 2011 1040 Ez Form

2011 1040 ez form 5. 2011 1040 ez form   Soil and Water Conservation Expenses Table of Contents Introduction Topics - This chapter discusses: Business of Farming Plan Certification Conservation ExpensesWater well. 2011 1040 ez form Assessment by Conservation DistrictAssessment for Depreciable Property 25% Limit on DeductionNet operating loss. 2011 1040 ez form When to Deduct or Capitalize Sale of a Farm Introduction If you are in the business of farming, you can choose to deduct certain expenses for: Soil or water conservation, Prevention of erosion of land used in farming, or Endangered species recovery. 2011 1040 ez form Otherwise, these are capital expenses that must be added to the basis of the land. 2011 1040 ez form (See chapter 6 for information on determining basis. 2011 1040 ez form ) Conservation expenses for land in a foreign country do not qualify for this special treatment. 2011 1040 ez form The deduction for conservation expenses cannot be more than 25% of your gross income from farming. 2011 1040 ez form See 25% Limit on Deduction , later. 2011 1040 ez form Although some expenses are not deductible as soil and water conservation expenses, they may be deductible as ordinary and necessary farm expenses. 2011 1040 ez form These include interest and taxes, the cost of periodically clearing brush from productive land, the regular removal of sediment from a drainage ditch, and expenses paid or incurred primarily to produce an agricultural crop that may also conserve soil. 2011 1040 ez form You must include in income most government payments for approved conservation practices. 2011 1040 ez form However, you can exclude some payments you receive under certain cost-sharing conservation programs. 2011 1040 ez form For more information, see Agricultural Program Payments in chapter 3. 2011 1040 ez form To get the full deduction to which you are entitled, you should maintain your records to clearly distinguish between your ordinary and necessary farm business expenses and your soil and water conservation expenses. 2011 1040 ez form Topics - This chapter discusses: Business of farming Plan certification Conservation expenses Assessment by conservation district 25% limit on deduction When to deduct or capitalize Sale of a farm Business of Farming For purposes of soil and water conservation expenses, you are in the business of farming if you cultivate, operate, or manage a farm for profit, either as an owner or a tenant. 2011 1040 ez form You are not in the business of farming if you cultivate or operate a farm for recreation or pleasure, rather than for profit. 2011 1040 ez form You are not farming if you are engaged only in forestry or the growing of timber. 2011 1040 ez form Farm defined. 2011 1040 ez form   A farm includes livestock, dairy, poultry, fish, fruit, and truck farms. 2011 1040 ez form It also includes plantations, ranches, ranges, and orchards. 2011 1040 ez form A fish farm is an area where fish and other marine animals are grown or raised and artificially fed, protected, etc. 2011 1040 ez form It does not include an area where they are merely caught or harvested. 2011 1040 ez form A plant nursery is a farm for purposes of deducting soil and water conservation expenses. 2011 1040 ez form Farm rental. 2011 1040 ez form   If you own a farm and receive farm rental payments based on farm production, either in cash or crop shares, you are in the business of farming. 2011 1040 ez form If you get cash rental for a farm you own that is not used in farm production, you cannot deduct soil and water conservation expenses for that farm. 2011 1040 ez form   If you receive a fixed rental payment that is not based on farm production, you are in the business of farming only if you materially participate in operating or managing the farm. 2011 1040 ez form Example. 2011 1040 ez form You own a farm in Iowa and live in California. 2011 1040 ez form You rent the farm for $175 in cash per acre and do not materially participate in producing or managing production of the crops grown on the farm. 2011 1040 ez form You cannot deduct your soil conservation expenses for this farm. 2011 1040 ez form You must capitalize the expenses and add them to the basis of the land. 2011 1040 ez form     For more information, see Material participation for landlords under Landlord Participation in Farming in chapter 12. 2011 1040 ez form Plan Certification You can deduct soil and water conservation expenses only if they are consistent with a plan approved by the Natural Resources Conservation Service (NRCS) of the Department of Agriculture. 2011 1040 ez form If no such plan exists, the expenses must be consistent with a soil conservation plan of a comparable state agency. 2011 1040 ez form Keep a copy of the plan with your books and records to support your deductions. 2011 1040 ez form Conservation plan. 2011 1040 ez form   A conservation plan includes the farming conservation practices approved for the area where your farmland is located. 2011 1040 ez form There are three types of approved plans. 2011 1040 ez form NRCS individual site plans. 2011 1040 ez form These plans are issued individually to farmers who request assistance from NRCS to develop a conservation plan designed specifically for their farmland. 2011 1040 ez form NRCS county plans. 2011 1040 ez form These plans include a listing of farm conservation practices approved for the county where the farmland is located. 2011 1040 ez form You can deduct expenses for conservation practices not included on the NRCS county plans only if the practice is a part of an individual site plan. 2011 1040 ez form Comparable state agency plans. 2011 1040 ez form These plans are approved by state agencies and can be approved individual site plans or county plans. 2011 1040 ez form   A list of NRCS conservation programs is available at www. 2011 1040 ez form nrcs. 2011 1040 ez form usda. 2011 1040 ez form gov/programs. 2011 1040 ez form Individual site plans can be obtained from NRCS offices and the comparable state agencies. 2011 1040 ez form Conservation Expenses You can deduct conservation expenses only for land you or your tenant are using, or have used in the past, for farming. 2011 1040 ez form These expenses include, but are not limited to, the following. 2011 1040 ez form The treatment or movement of earth, such as: Leveling, Conditioning, Grading, Terracing, Contour furrowing, and Restoration of soil fertility. 2011 1040 ez form The construction, control, and protection of: Diversion channels, Drainage ditches, Irrigation ditches, Earthen dams, and Watercourses, outlets, and ponds. 2011 1040 ez form The eradication of brush. 2011 1040 ez form The planting of windbreaks. 2011 1040 ez form You cannot deduct expenses to drain or fill wetlands, or to prepare land for center pivot irrigation systems, as soil and water conservation expenses. 2011 1040 ez form These expenses are added to the basis of the land. 2011 1040 ez form If you choose to deduct soil and water conservation expenses, you cannot exclude from gross income any cost-sharing payments you receive for those expenses. 2011 1040 ez form See chapter 3 for information about payments eligible for the cost-sharing exclusion. 2011 1040 ez form New farm or farmland. 2011 1040 ez form   If you acquire a new farm or new farmland from someone who was using it in farming immediately before you acquired the land, soil and water conservation expenses you incur on it will be treated as made on land used in farming at the time the expenses were paid or incurred. 2011 1040 ez form You can deduct soil and water conservation expenses for this land if your use of it is substantially a continuation of its use in farming. 2011 1040 ez form The new farming activity does not have to be the same as the old farming activity. 2011 1040 ez form For example, if you buy land that was used for grazing cattle and then prepare it for use as an apple orchard, you can deduct your conservation expenses. 2011 1040 ez form Land not used for farming. 2011 1040 ez form   If your conservation expenses benefit both land that does not qualify as land used for farming and land that does qualify, you must allocate the expenses between the two types of land. 2011 1040 ez form For example, if the expenses benefit 200 acres of your land, but only 120 acres of this land are used for farming, then you can deduct 60% (120 ÷ 200) of the expenses. 2011 1040 ez form You can use another method to allocate these expenses if you can clearly show that your method is more reasonable. 2011 1040 ez form Depreciable conservation assets. 2011 1040 ez form   You generally cannot deduct your expenses for depreciable conservation assets. 2011 1040 ez form However, you can deduct certain amounts you pay or incur for an assessment for depreciable property that a soil and water conservation or drainage district levies against your farm. 2011 1040 ez form See Assessment for Depreciable Property , later. 2011 1040 ez form   You must capitalize expenses to buy, build, install, or improve depreciable structures or facilities. 2011 1040 ez form These expenses include those for materials, supplies, wages, fuel, hauling, and moving dirt when making structures such as tanks, reservoirs, pipes, culverts, canals, dams, wells, or pumps composed of masonry, concrete, tile, metal, or wood. 2011 1040 ez form You recover your capital investment through annual allowances for depreciation. 2011 1040 ez form   You can deduct soil and water conservation expenses for nondepreciable earthen items. 2011 1040 ez form Nondepreciable earthen items include certain dams, ponds, and terraces described under Property Having a Determinable Useful Life in chapter 7. 2011 1040 ez form Water well. 2011 1040 ez form   You cannot deduct the cost of drilling a water well for irrigation and other agricultural purposes as a soil and water conservation expense. 2011 1040 ez form It is a capital expense. 2011 1040 ez form You recover your cost through depreciation. 2011 1040 ez form You also must capitalize your cost for drilling a test hole. 2011 1040 ez form If the test hole produces no water and you continue drilling, the cost of the test hole is added to the cost of the producing well. 2011 1040 ez form You can recover the total cost through depreciation deductions. 2011 1040 ez form   If a test hole, dry hole, or dried-up well (resulting from prolonged lack of rain, for instance) is abandoned, you can deduct your unrecovered cost in the year of abandonment. 2011 1040 ez form Abandonment means that all economic benefits from the well are terminated. 2011 1040 ez form For example, filling or sealing a well excavation or casing so that all economic benefits from the well are terminated constitutes an abandonment. 2011 1040 ez form Endangered species recovery expenses. 2011 1040 ez form   If you are in the business of farming and meet other specific requirements, you can choose to deduct the conservation expenses discussed earlier as endangered species recovery expenses. 2011 1040 ez form Otherwise, these are capital expenses that must be added to the basis of the land. 2011 1040 ez form   The expenses must be paid or incurred for the purpose of achieving site-specific management actions recommended in a recovery plan approved under section 4(f) of the Endangered Species Act of 1973. 2011 1040 ez form See Internal Revenue Code section 175 for more information. 2011 1040 ez form Assessment by Conservation District In some localities, a soil or water conservation or drainage district incurs expenses for soil or water conservation and levies an assessment against the farmers who benefit from the expenses. 2011 1040 ez form You can deduct as a conservation expense amounts you pay or incur for the part of an assessment that: Covers expenses you could deduct if you had paid them directly, or Covers expenses for depreciable property used in the district's business. 2011 1040 ez form Assessment for Depreciable Property You generally can deduct as a conservation expense amounts you pay or incur for the part of a conservation or drainage district assessment that covers expenses for depreciable property. 2011 1040 ez form This includes items such as pumps, locks, concrete structures (including dams and weir gates), draglines, and similar equipment. 2011 1040 ez form The depreciable property must be used in the district's soil and water conservation activities. 2011 1040 ez form However, the following limits apply to these assessments. 2011 1040 ez form The total assessment limit. 2011 1040 ez form The yearly assessment limit. 2011 1040 ez form After you apply these limits, the amount you can deduct is added to your other conservation expenses for the year. 2011 1040 ez form The total for these expenses is then subject to the 25% of gross income from farming limit on the deduction, discussed later. 2011 1040 ez form See Table 5-1 for a brief summary of these limits. 2011 1040 ez form Table 5-1. 2011 1040 ez form Limits on Deducting an Assessment by a Conservation District for Depreciable Property Total Limit on Deduction for Assessment for Depreciable Property Yearly Limit on Deduction for Assessment for Depreciable Property Yearly Limit for All Conservation Expenses 10% of: $500 + 10% of: 25% of: Total assessment against all members of the district for the property. 2011 1040 ez form Your deductible share of the cost to the district for the property. 2011 1040 ez form Your gross income from farming. 2011 1040 ez form No one taxpayer can deduct more than 10% of the total assessment. 2011 1040 ez form Any amount over 10% is a capital expense and is added to the basis of your land. 2011 1040 ez form If an assessment is paid in installments, each payment must be prorated between the conservation expense and the capital expense. 2011 1040 ez form If the amount you pay or incur for any year is more than the limit, you can deduct for that year only 10% of your deductible share of the cost. 2011 1040 ez form You can deduct the remainder in equal amounts over the next 9 tax years. 2011 1040 ez form Limit for all conservation expenses, including assessments for depreciable property. 2011 1040 ez form Amounts greater than 25% can be carried to the following year and added to that year's expenses. 2011 1040 ez form The total is then subject to the 25% of gross income from farming limit in that year. 2011 1040 ez form To ensure your deduction is within the deduction limits, keep records to show the following. 2011 1040 ez form The total assessment against all members of the district for the depreciable property. 2011 1040 ez form Your deductible share of the cost to the district for the depreciable property. 2011 1040 ez form Your gross income from farming. 2011 1040 ez form Total assessment limit. 2011 1040 ez form   You cannot deduct more than 10% of the total amount assessed to all members of the conservation or drainage district for the depreciable property. 2011 1040 ez form This applies whether you pay the assessment in one payment or in installments. 2011 1040 ez form If your assessment is more than 10% of the total amount assessed, both the following rules apply. 2011 1040 ez form The amount over 10% is a capital expense and is added to the basis of your land. 2011 1040 ez form If the assessment is paid in installments, each payment must be prorated between the conservation expense and the capital expense. 2011 1040 ez form Yearly assessment limit. 2011 1040 ez form   The maximum amount you can deduct in any one year is the total of 10% of your deductible share of the cost as explained earlier, plus $500. 2011 1040 ez form If the amount you pay or incur is equal to or less than the maximum amount, you can deduct it in the year it is paid or incurred. 2011 1040 ez form If the amount you pay or incur is more, you can deduct in that year only 10% of your deductible share of the cost. 2011 1040 ez form You can deduct the remainder in equal amounts over the next 9 tax years. 2011 1040 ez form Your total conservation expense deduction for each year is also subject to the 25% of gross income from farming limit on the deduction, discussed later. 2011 1040 ez form Example 1. 2011 1040 ez form This year, the soil conservation district levies and you pay an assessment of $2,400 against your farm. 2011 1040 ez form Of the assessment, $1,500 is for digging drainage ditches. 2011 1040 ez form You can deduct this part as a soil or conservation expense as if you had paid it directly. 2011 1040 ez form The remaining $900 is for depreciable equipment to be used in the district's irrigation activities. 2011 1040 ez form The total amount assessed by the district against all its members for the depreciable equipment is $7,000. 2011 1040 ez form The total amount you can deduct for the depreciable equipment is limited to 10% of the total amount assessed by the district against all its members for depreciable equipment, or $700. 2011 1040 ez form The $200 excess ($900 − $700) is a capital expense you must add to the basis of your farm. 2011 1040 ez form To figure the maximum amount you can deduct for the depreciable equipment this year, multiply your deductible share of the total assessment ($700) by 10%. 2011 1040 ez form Add $500 to the result for a total of $570. 2011 1040 ez form Your deductible share, $700, is greater than the maximum amount deductible in one year, so you can deduct only $70 of the amount you paid or incurred for depreciable property this year (10% of $700). 2011 1040 ez form You can deduct the balance at the rate of $70 a year over the next 9 years. 2011 1040 ez form You add $70 to the $1,500 portion of the assessment for drainage ditches. 2011 1040 ez form You can deduct $1,570 of the $2,400 assessment as a soil and water conservation expense this year, subject to the 25% of gross income from farming limit on the deduction, discussed later. 2011 1040 ez form Example 2. 2011 1040 ez form Assume the same facts in Example 1 except that $1,850 of the $2,400 assessment is for digging drainage ditches and $550 is for depreciable equipment. 2011 1040 ez form The total amount assessed by the district against all its members for depreciable equipment is $5,500. 2011 1040 ez form The total amount you can deduct for the depreciable equipment is limited to 10% of this amount, or $550. 2011 1040 ez form The maximum amount you can deduct this year for the depreciable equipment is $555 (10% of your deductible share of the total assessment, $55, plus $500). 2011 1040 ez form Since your deductible share is less than the maximum amount deductible in one year, you can deduct the entire $550 this year. 2011 1040 ez form You can deduct the entire assessment, $2,400, as a soil and water conservation expense this year, subject to the 25% of gross income from farming limit on the deduction, discussed below. 2011 1040 ez form Sale or other disposal of land during 9-year period. 2011 1040 ez form   If you dispose of the land during the 9-year period for deducting conservation expenses subject to the yearly limit, any amounts you have not yet deducted because of this limit are added to the basis of the property. 2011 1040 ez form Death of farmer during 9-year period. 2011 1040 ez form   If a farmer dies during the 9-year period, any remaining amounts not yet deducted are deducted in the year of death. 2011 1040 ez form 25% Limit on Deduction The total deduction for conservation expenses in any tax year is limited to 25% of your gross income from farming for the year. 2011 1040 ez form Gross income from farming. 2011 1040 ez form   Gross income from farming is the income you derive in the business of farming from the production of crops, fish, fruits, other agricultural products, or livestock. 2011 1040 ez form Gains from sales of draft, breeding, or dairy livestock are included. 2011 1040 ez form Gains from sales of assets such as farm machinery, or from the disposition of land, are not included. 2011 1040 ez form Carryover of deduction. 2011 1040 ez form   If your deductible conservation expenses in any year are more than 25% of your gross income from farming for that year, you can carry the unused deduction over to later years. 2011 1040 ez form However, the deduction in any later year is limited to 25% of the gross income from farming for that year as well. 2011 1040 ez form Example. 2011 1040 ez form In 2012, you have gross income of $32,000 from two farms. 2011 1040 ez form During the year, you incurred $10,000 of deductible soil and water conservation expenses for one of the farms. 2011 1040 ez form However, your deduction is limited to 25% of $32,000, or $8,000. 2011 1040 ez form The $2,000 excess ($10,000 − $8,000) is carried over to 2013 and added to deductible soil and water conservation expenses made in that year. 2011 1040 ez form The total of the 2012 carryover plus 2013 expenses is deductible in 2013, subject to the limit of 25% of your gross income from farming in 2013. 2011 1040 ez form Any expenses over the limit in that year are carried to 2014 and later years. 2011 1040 ez form Net operating loss. 2011 1040 ez form   The deduction for soil and water conservation expenses, after applying the 25% limit, is included when figuring a net operating loss (NOL) for the year. 2011 1040 ez form If the NOL is carried to another year, the soil and water conservation deduction included in the NOL is not subject to the 25% limit in the year to which it is carried. 2011 1040 ez form When to Deduct or Capitalize If you choose to deduct soil and water conservation expenses, you must deduct the total allowable amount on your tax return for the first year you pay or incur these expenses. 2011 1040 ez form If you do not choose to deduct the expenses, you must capitalize them. 2011 1040 ez form Change of method. 2011 1040 ez form   If you want to change your method for the treatment of soil and water conservation expenses, or you want to treat the expenses for a particular project or a single farm in a different manner, you must get the approval of the IRS. 2011 1040 ez form To get this approval, submit a written request by the due date of your return for the first tax year you want the new method to apply. 2011 1040 ez form You or your authorized representative must sign the request. 2011 1040 ez form   The request must include the following information. 2011 1040 ez form Your name and address. 2011 1040 ez form The first tax year the method or change of method is to apply. 2011 1040 ez form Whether the method or change of method applies to all your soil and water conservation expenses or only to those for a particular project or farm. 2011 1040 ez form If the method or change of method does not apply to all your expenses, identify the project or farm to which the expenses apply. 2011 1040 ez form The total expenses you paid or incurred in the first tax year the method or change of method is to apply. 2011 1040 ez form A statement that you will account separately in your books for the expenses to which this method or change of method relates. 2011 1040 ez form Send your request to the following  address. 2011 1040 ez form  Department of the Treasury Internal Revenue Service Center Cincinnati, OH 45999  For more information, see Change in  Accounting Method in chapter 2. 2011 1040 ez form Sale of a Farm If you sell your farm, you cannot adjust the basis of the land at the time of the sale for any unused carryover of soil and water conservation expenses (except for deductions of assessments for depreciable property, discussed earlier). 2011 1040 ez form However, if you acquire another farm and return to the business of farming, you can start taking deductions again for the unused carryovers. 2011 1040 ez form Gain on sale of farmland. 2011 1040 ez form   If you held the land 5 years or less before you sold it, gain on the sale of the land is treated as ordinary income up to the amount you previously deducted for soil and water conservation expenses. 2011 1040 ez form If you held the land less than 10 but more than 5 years, the gain is treated as ordinary income up to a specified percentage of the previous deductions. 2011 1040 ez form See Section 1252 property under Other Gains in chapter 9. 2011 1040 ez form Prev  Up  Next   Home   More Online Publications