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

Official information and services from the U.S. government

The Free Tax Amendment

Free tax amendment Index A Abandonment, Abandonment Accounting method Accrual, Accrual Method Cash, Cash Method Change in, Changes in Methods of Accounting Crop, Crop method. Free tax amendment Farm inventory, Farm Inventory Accounting periods, Introduction Accrual method of accounting, Accrual Method Additional Medicare Tax withholding, What's New for 2013, Additional Medicare Tax. Free tax amendment Adjusted basis for installment sale, Adjusted basis for installment sale purposes. Free tax amendment Adjusted basis of assets, Adjusted Basis Agricultural activity codes, Schedule F, Reminders Agricultural program payments, Agricultural Program Payments Agricultural structure, defined, Agricultural structure. Free tax amendment Alternative Depreciation System (ADS), Required use of ADS. Free tax amendment , ADS election. Free tax amendment Amortization Going into business, Business Start-Up Costs Reforestation expenses, Reforestation Costs Section 197 intangibles, Section 197 Intangibles Assessments By conservation district, Assessment by Conservation District Depreciable property, Assessment for Depreciable Property Assistance (see Tax help) Automobiles, depreciation, Limits for passenger automobiles. Free tax amendment B Bankruptcy, Bankruptcy. Free tax amendment Barter income, Barter income. Free tax amendment Basis Adjusted, Adjusted basis. Free tax amendment Installment sale, Adjusted basis for installment sale purposes. Free tax amendment Involuntary conversion, Basis for depreciation. Free tax amendment Like-kind exchange, Basis for depreciation. Free tax amendment Partner's basis, Property Distributed From a Partnership or Corporation Replacement property, Basis of replacement property. Free tax amendment Shareholder's basis, Property Distributed From a Partnership or Corporation Basis of assets Adjusted basis, Adjusted Basis Allocating to several assets, Allocating the Basis Changed to business use, Property changed from personal to business or rental use. Free tax amendment Constructing assets, Constructing assets. Free tax amendment Cost, Cost Basis Decreases, Decreases to Basis Depreciation, What Is the Basis for Depreciation? Exchanges Like-kind, Like-Kind Exchanges Nontaxable, Nontaxable Exchanges Partially nontaxable, Partially Nontaxable Exchanges Taxable, Taxable Exchanges Gifts, Property Received as a Gift Increases, Increases to Basis Real property, Real Property Received for services, Property received for services. Free tax amendment Uniform capitalization rules, Uniform Capitalization Rules Below-market loans, Below-market loans. Free tax amendment Books and records, Importance of Records Breeding fees, Breeding Fees Business income limit, section 179 expense deduction, Business Income Limit Business use of home, Business Use of Your Home C Canceled debt, Cancellation of Debt Capital assets, Capital Assets Capital expenses, Capital Expenses Car expenses, Truck and Car Expenses Cash method of accounting, Cash Method Casualties and thefts Adjustments to basis, Adjustments to basis. Free tax amendment Casualty, defined, Casualty. Free tax amendment Disaster area losses, Disaster Area Losses Leased property, Leased property. Free tax amendment Livestock, Livestock or produce bought for resale. Free tax amendment , Raised draft, breeding, dairy, or sporting animals. Free tax amendment Reimbursement, Insurance and other reimbursements. Free tax amendment Reporting gains and losses, Reporting Gains and Losses Theft, defined, Theft. Free tax amendment Change in accounting method, Changes in Methods of Accounting Chickens, purchased, Chickens, seeds, and young plants. Free tax amendment Christmas trees, Christmas tree cultivation. Free tax amendment , Christmas trees. Free tax amendment Club dues, Club dues and membership fees. Free tax amendment Comments on publication, Comments and suggestions. Free tax amendment Commodity Futures, Hedging (Commodity Futures) Wages, Noncash wages. Free tax amendment Commodity Credit Corporation (CCC) Loans, Commodity Credit Corporation (CCC) Loans Market gain, Market Gain Community property, Community property. Free tax amendment , Community property. Free tax amendment Computer, software, Computer software. Free tax amendment Condemnation, Casualties, Thefts, and Condemnations, Condemnation Conservation Cost-sharing exclusion, Conservation Expenses District assessments, Assessment by Conservation District Expenses, Conservation Expenses Plans, Conservation plan. Free tax amendment Conservation Reserve Program, Conservation Reserve Program (CRP) payments. Free tax amendment Conservation Reserve Program (CRP), Conservation Reserve Program (CRP) Constructing assets, Constructing assets. Free tax amendment Constructive receipt of income, Constructive receipt. Free tax amendment Contamination, Soil or other environmental contamination. Free tax amendment Contract price, Contract price. Free tax amendment Converted wetland, Converted Wetland and Highly Erodible Cropland Cooperatives, income from, Income From Cooperatives Cost-sharing exclusion, Cost-Sharing Exclusion (Improvements) Counter-cyclical payments, Direct payments and counter-cyclical payments. Free tax amendment , Payments Under the Farm Security and Rural Investment Act of 2002 and Under the Food, Conservation, and Energy Act of 2008 Credits Employment, Employment Credits Fuel tax, Fuel tax credit and refund. Free tax amendment , How To Claim a Credit or Refund, Claiming a Credit Social security and Medicare, Earning credits in 2013. Free tax amendment Social security coverage, How to become insured under social security. Free tax amendment State unemployment tax, Tax rate and credit. Free tax amendment Crew leaders, Crew Leaders Crop Destroyed, Standing crop destroyed by casualty. Free tax amendment Insurance proceeds, Crop Insurance and Crop Disaster Payments Method of accounting, Crop method. Free tax amendment Shares, Rents (Including Crop Shares) Unharvested, Cost of raising unharvested crops. Free tax amendment , Section 1231 transactions. Free tax amendment , Gain or loss. Free tax amendment Cropland, highly erodible, Converted Wetland and Highly Erodible Cropland D Damage Casualties and thefts, Casualties and Thefts Crop insurance, Crop Insurance and Crop Disaster Payments Tree seedlings, Tree Seedlings Debt Bad, Nonbusiness bad debt. Free tax amendment Canceled, Cancellation of Debt, Canceled debt excluded from income. Free tax amendment , Cancellation of debt. Free tax amendment , Canceled debt. Free tax amendment Nonrecourse, Amount realized on a nonrecourse debt. Free tax amendment Qualified farm, Qualified Farm Debt Qualified principal residence, Qualified Principal Residence Debt Recourse, Amount realized on a recourse debt. Free tax amendment Depletion, Depletion Depreciation, Claiming the Special Depreciation Allowance ADS election, ADS election. Free tax amendment Conservation assets, Depreciable conservation assets. Free tax amendment Deduction, Overview of Depreciation Incorrect amount deducted, How Do You Correct Depreciation Deductions? Limit for automobiles, Limits for passenger automobiles. Free tax amendment Listed property, Additional Rules for Listed Property Raised livestock, Livestock. Free tax amendment Recapture, When Do You Recapture MACRS Depreciation?, Depreciation Recapture, Section 1250 Property When to file, Do You Have To File Form 4562? Depreciation allowable, Basis adjustment for depreciation allowed or allowable. Free tax amendment Depreciation allowed, Basis adjustment for depreciation allowed or allowable. Free tax amendment Direct payments, Direct payments and counter-cyclical payments. Free tax amendment , Payments Under the Farm Security and Rural Investment Act of 2002 and Under the Food, Conservation, and Energy Act of 2008 Disaster area losses, Disaster Area Losses Disaster payments, Crop Insurance and Crop Disaster Payments Disaster relief grants, Federal disaster relief grants. Free tax amendment Disaster relief payments, Qualified disaster relief payments. Free tax amendment Dispositions, Sale or other disposal of land during 9-year period. Free tax amendment , Gain on sale of farmland. Free tax amendment , Introduction Domestic production activities deduction, Domestic Production Activities Deduction Dyed diesel fuel, Dyed Diesel Fuel and Dyed Kerosene Dyed kerosene, Dyed Diesel Fuel and Dyed Kerosene E e-file, Reminders Easement, Easements and rights-of-way. Free tax amendment , Easements. Free tax amendment Election ADS depreciation, Electing ADS. Free tax amendment , ADS election. Free tax amendment Amortization Business start-up costs, Business Start-Up Costs Reforestation costs, Reforestation Costs Crop method, Election to use crop method. Free tax amendment Cutting of timber, Election to treat cutting as a sale or exchange. Free tax amendment Deducting conservation expenses, When to Deduct or Capitalize Not excluding cost-sharing payments, Electing not to exclude payments. Free tax amendment Out of installment method, Electing out of the installment method. Free tax amendment Postponing casualty gain, Postponing Gain Postponing reporting crop insurance proceeds, Election to postpone reporting until the following year. Free tax amendment Section 179 expense deduction, How Do You Elect the Deduction? Electronic filing, Reminders Embryo transplants, Transplanted embryo. Free tax amendment Employer identification number, Reminders, Employer identification number (EIN). Free tax amendment Endangered species recovery expenses, Endangered species recovery expenses. Free tax amendment Environmental contamination, Soil or other environmental contamination. Free tax amendment Estimated tax Farm gross income, Gross Income From Farming Gross income, Gross Income Penalties, Estimated Tax Penalty for 2013 Exchanges Basis Like-kind, Like-Kind Exchanges Nontaxable, Nontaxable Exchanges Partially nontaxable, Partially Nontaxable Exchanges Taxable, Taxable Exchanges Like-kind, Like-Kind Exchanges Nontaxable, Like-Kind Exchanges Excise taxes Credit, Claiming a Credit Diesel fuel, Dyed Diesel Fuel and Dyed Kerosene Farming purposes, Fuels Used in Farming Home use of fuels, Fuels Used for Household Purposes or Other Than as a Fuel for Propulsion Engines Off-highway uses, Fuels Used in Off-Highway Business Use Refund, Claiming a Refund F Fair market value defined, Fair market value (FMV). Free tax amendment , Fair market value (FMV). Free tax amendment Family member Business expenses, Special rule for related persons. Free tax amendment Installment sale, Sale to a related person. Free tax amendment Like-kind exchange, Like-kind exchanges between related persons. Free tax amendment Loss on sale or exchange of property, Losses from sales or exchanges between related persons. Free tax amendment Personal-use property, Personal-use property. Free tax amendment Social security coverage, Family Employees Farm Business expenses, Farm Business Expenses Business, defined, Business of Farming Defined, Farm defined. Free tax amendment , Farm. Free tax amendment Income averaging, Income Averaging for Farmers Rental, Farm rental. Free tax amendment Sale of, Sale of a Farm Farmer, Farmer. Free tax amendment Federal unemployment tax (FUTA), Federal Unemployment (FUTA) Tax Fertilizer, Fertilizer and Lime, Fertilizer and Lime Foreclosure, Foreclosure or Repossession Forestation costs, Forestation and reforestation costs. Free tax amendment Form 1099-A, Form 1099-A. Free tax amendment , Forms 1099-A and 1099-C. Free tax amendment 1099-C, Cancellation of Debt, Form 1099-C. Free tax amendment , Forms 1099-A and 1099-C. Free tax amendment 1099-G, Market Gain, Payment to More Than One Person 1099-MISC, Reminders, Nonemployee compensation. Free tax amendment 1099-PATR, Form 1099-PATR. Free tax amendment 1128, Introduction 2210-F, Estimated Tax Penalty for 2013 3115, Changes in Methods of Accounting 4136, Claiming a Credit 4562, Do You Have To File Form 4562? 4797, Form 4797. Free tax amendment , Recapture. Free tax amendment , Reporting the exchange. Free tax amendment 4835, Rents (Including Crop Shares) 5213, Using the presumption later. Free tax amendment 6252, Form 6252. Free tax amendment 8822, Reminders 8824, Reporting the exchange. Free tax amendment 8849, Claiming a Refund 8886, Reminders 940, Form 940. Free tax amendment 943, Form 943. Free tax amendment 982, Form 982 I-9, Form I-9. Free tax amendment SS-4, Reminders, Employer identification number (EIN). Free tax amendment SS-5, Obtaining a social security number. Free tax amendment T (Timber), Form T (Timber). Free tax amendment W-2, Form W-2. Free tax amendment W-4, Reminders, New hire reporting. Free tax amendment , Form W-4. Free tax amendment W-4V, Commodity Credit Corporation (CCC) Loans, Crop Insurance and Crop Disaster Payments W-7, Obtaining an individual taxpayer identification number. Free tax amendment Free tax services, How To Get Tax Help, Free help with your tax return. Free tax amendment Fuel tax credit or refund, Fuel tax credit and refund. Free tax amendment , How To Claim a Credit or Refund G Gains and losses Basis of assets, Cost Basis Capital assets, defined, Capital Assets Casualty, How To Figure a Loss, Figuring a Gain Installment sales, Installment Sales Livestock, Livestock Long- or short-term, Long and Short Term Ordinary or capital, Ordinary or Capital Gain or Loss Sale of farm, Sale of a Farm Section 1231, Section 1231 Gains and Losses Theft, How To Figure a Loss, Figuring a Gain Timber, Timber General asset accounts, How Do You Use General Asset Accounts? Gifts, Crop shares you give to others (gift). Free tax amendment , Cost related to gifts. Free tax amendment , Property Received as a Gift, Gift. Free tax amendment Going into business, Business Start-Up Costs Grants, disaster relief, Federal disaster relief grants. Free tax amendment Gross profit percentage, Gross profit percentage. Free tax amendment Gross profit, defined, Gross profit. Free tax amendment Guarantee, Debt not payable on demand. Free tax amendment H Health insurance deduction, Self-employed health insurance deduction. Free tax amendment Hedging, Hedging (Commodity Futures) Help (see Tax help) Highway use tax, Highway use tax. Free tax amendment Holding period, Holding period. Free tax amendment Horticultural structure, Horticultural structure. Free tax amendment I Illegal irrigation subsidy, Illegal federal irrigation subsidy. Free tax amendment Important dates, Important Dates for 2014 Improvements, Cost-Sharing Exclusion (Improvements) Income Accounting for, Accounting Methods Accrual method of accounting, Income Canceled debt excluded, Cancellation of Debt From farming, Farm Income, Gross income from farming. Free tax amendment , Gross Income From Farming Gross, Gross Income Not-for-profit farming, Not-for-Profit Farming Pasture, Pasture income and rental. Free tax amendment Schedule F, Farm Income Withholding of tax, Federal Income Tax Withholding Income averaging (see Farm: Income averaging) Incorrect amount of depreciation deducted, How Do You Correct Depreciation Deductions? Individual taxpayer identification number (ITIN), Obtaining an individual taxpayer identification number. Free tax amendment Inherited property, Inherited Property Insolvency, Insolvency. Free tax amendment Installment sales, Form 6252. Free tax amendment Electing out, Electing out of the installment method. Free tax amendment Farm, sale of, Installment Sale of a Farm Figuring income, Figuring Installment Sale Income Reporting income, Form 6252. Free tax amendment Unstated interest, Unstated interest. Free tax amendment Insurance, Insurance, Self-employed health insurance deduction. Free tax amendment Intangible property, Section 197 Intangibles Interest Expense, Interest Income, Interest income. Free tax amendment Unstated, Unstated interest. Free tax amendment Inventory Items included, Farm Inventory Methods of valuation, Inventory valuation methods. Free tax amendment Involuntary conversions, Involuntary Conversions, Property acquired in a like-kind exchange or involuntary conversion. Free tax amendment , Introduction Irrigation Illegal subsidy, Illegal federal irrigation subsidy. Free tax amendment Project, Irrigation Project L Labor hired, Labor Hired Landlord participation, Landlord Participation in Farming Lease or purchase, Lease or Purchase Life tenant (see Term interests) Like-kind exchanges, Like-Kind Exchanges, Like-Kind Exchanges Lime, Fertilizer and Lime Limits At-risk, At-Risk Limits Business use of home, Deduction limit. Free tax amendment Capital losses, Treatment of Capital Losses Conservation expenses, Assessment for Depreciable Property, 25% Limit on Deduction Depreciation Business-use, What Is the Business-Use Requirement? Excluded farm debt, Exclusion limit. Free tax amendment Farm losses, Losses From Operating a Farm Loss of personal-use property, Deduction Limits on Losses of Personal-Use Property Not-for-profit farming, Not-for-Profit Farming Passive activity, Passive Activity Limits Percentage depletion, Taxable income limit. Free tax amendment Prepaid farm supplies, Deduction limit. Free tax amendment Reforestation costs, Reforestation Costs Section 179 expense deduction Automobile, Limits for passenger automobiles. Free tax amendment Business income, Business Income Limit Dollar, Dollar Limits Time to keep records, How Long To Keep Records Listed property Defined, What Is Listed Property? Passenger automobile, Passenger automobiles. Free tax amendment Rules, Additional Rules for Listed Property Livestock, Section 1231 transactions. Free tax amendment Casualty and theft losses, Livestock or produce bought for resale. Free tax amendment Crop shares, Crop shares you use to feed livestock. Free tax amendment Depreciation, Livestock. Free tax amendment Diseased, Diseased livestock. Free tax amendment Feed assistance, Feed Assistance and Payments Immature, Immature livestock. Free tax amendment Losses, Loss of livestock. Free tax amendment , Livestock Purchased, Purchased livestock. Free tax amendment Raised, Raised livestock. Free tax amendment Sale of, Sales of Farm Products, Livestock Unit-livestock-price, inventory valuation, Unit-livestock-price method. Free tax amendment Used in a farm business, Livestock used in farm business. Free tax amendment Weather-related sales, Sales Caused by Weather-Related Conditions, Weather-related sales of livestock. Free tax amendment Loans, Commodity Credit Corporation (CCC) Loans, Loan expenses. Free tax amendment Losses At-risk limits, At-Risk Limits Casualty, Casualties, Thefts, and Condemnations Disaster areas, Disaster Area Losses Farming, Farming Losses Growing crops, Loss of growing plants, produce, and crops. Free tax amendment Hobby farming, Not-for-Profit Farming Livestock, Livestock, Diseased livestock. Free tax amendment Nondeductible, Other Nondeductible Items Theft, Casualties, Thefts, and Condemnations Lost income payments, Lost income payments. Free tax amendment Lost property, Mislaid or lost property. Free tax amendment M MACRS property Involuntary conversion, Property acquired in a like-kind exchange or involuntary conversion. Free tax amendment Like-kind exchange, Property acquired in a like-kind exchange or involuntary conversion. Free tax amendment Nontaxable transfer, Property acquired in a nontaxable transfer. Free tax amendment Market gain, reporting, Market Gain Marketing quota penalties, Marketing Quota Penalties Material participation, Landlord Participation in Farming Meals, Meals. Free tax amendment Membership fees, Club dues and membership fees. Free tax amendment Methods of accounting, Accounting Methods Modified ACRS (MACRS) ADS election, ADS election. Free tax amendment Conventions, Which Convention Applies? Depreciation methods, Which Depreciation Method Applies? Exchange, Property acquired in a like-kind exchange or involuntary conversion. Free tax amendment Figuring the deduction, How Is the Depreciation Deduction Figured? Involuntary conversion, Property acquired in a like-kind exchange or involuntary conversion. Free tax amendment Nontaxable transfer, Property acquired in a nontaxable transfer. Free tax amendment Percentage tables, Rules for using the tables. Free tax amendment Property classes, Which Property Class Applies Under GDS? Recovery periods, Which Recovery Period Applies? N New hire reporting, New hire reporting. Free tax amendment Noncapital asset, Noncapital Assets Nontaxable exchanges, Like-Kind Exchanges Nontaxable transfer of MACRS property, Property acquired in a nontaxable transfer. Free tax amendment Not-for-profit farming, Not-for-Profit Farming O Organizational costs, Business start-up and organizational costs. Free tax amendment P Partners, limited, Limited partner. Free tax amendment Partners, retired, Retired partner. Free tax amendment Partners, Spouse, Business Owned and Operated by Spouses. Free tax amendment Partnership, Partnership income or loss. Free tax amendment Passenger automobile, Passenger automobiles. Free tax amendment Pasture income, Pasture income and rental. Free tax amendment Patronage dividends, Patronage Dividends Payments considered received, Payments Received or Considered Received Payments received, Payments Received or Considered Received Penalties Estimated tax, Estimated Tax Penalty for 2013 Returns, Estimated Tax Penalty for 2013 Trust fund recovery, Trust fund recovery penalty. Free tax amendment Per-unit retain certificates, Per-Unit Retain Certificates Personal expenses, Personal, Living, and Family Expenses Placed in service, Placed in Service, What Is the Placed-in-Service Date? Postponing casualty gain, Postponing Gain Prepaid expense Advance premiums, Advance premiums. Free tax amendment Extends useful life, Prepayment. Free tax amendment Farm supplies, Prepaid Farm Supplies Livestock feed, Prepaid Livestock Feed Prizes, Prizes. Free tax amendment Produce, Sales of Farm Products Property Changed to business use, Property changed from personal to business or rental use. Free tax amendment Received for services, Property received for services. Free tax amendment Repairs and improvements, How Do You Treat Repairs and Improvements? Section 1231, Section 1231 transactions. Free tax amendment Section 1245, Section 1245 Property Section 1250, Section 1250 Property Section 1252, Section 1252 property. Free tax amendment Section 1255, Section 1255 property. Free tax amendment Tangible personal, Tangible personal property. Free tax amendment Publications (see Tax help) Q Qualified disaster relief payments, Qualified disaster relief payments. Free tax amendment Qualified farm debt, Qualified Farm Debt Qualified joint venture, Qualified joint venture. Free tax amendment Qualified principal residence debt, Qualified Principal Residence Debt R Recapture Amortization, Depreciation and amortization. Free tax amendment Basis reductions, Recapture of basis reductions. Free tax amendment Certain depreciation, Recapture of certain depreciation. Free tax amendment Cost-sharing payments, Recapture. Free tax amendment Depreciation, When Do You Recapture MACRS Depreciation?, Depreciation Recapture, Depreciation recapture. Free tax amendment Section 1245 property, Section 1245 Property Section 1250 property, Section 1250 Property Section 179 expense deduction, When Must You Recapture the Deduction? Section 179 GO Zone property, Recapture for qualified section 179 GO Zone property. Free tax amendment Special depreciation allowance, When Must You Recapture an Allowance Recordkeeping, Importance of Records, Meals. Free tax amendment Records on depreciable property, Depreciation Recapture Reforestation costs, Forestation and reforestation costs. Free tax amendment , Reforestation Costs Refund Deduction taken, Refund or reimbursement. Free tax amendment Fuel tax, Fuel tax credit and refund. Free tax amendment , Including the Credit or Refund in Income Reimbursements Casualties and thefts, Casualty and theft losses. Free tax amendment , Casualties and Thefts, Insurance and other reimbursements. Free tax amendment Deduction taken, Refund or reimbursement. Free tax amendment Expenses, Reimbursed expenses. Free tax amendment Feed assistance, Feed Assistance and Payments Real estate taxes, Real estate taxes. Free tax amendment Reforestation expenses, Qualifying costs. Free tax amendment To employees, Reimbursements to employees. Free tax amendment Related persons, Special rule for related persons. Free tax amendment , Losses from sales or exchanges between related persons. Free tax amendment , Special rules for related persons. Free tax amendment , Like-kind exchanges between related persons. Free tax amendment , Sale to a related person. Free tax amendment , Buying replacement property from a related person. Free tax amendment , Related persons. Free tax amendment Rental income, Rents (Including Crop Shares) Rented property, improvements, Improvements to rented property. Free tax amendment Repairs, Repairs and Maintenance Repairs and improvements, How Do You Treat Repairs and Improvements? Repayment of income, Repayment of income. Free tax amendment Replacement Period, Replacement Period Property, Replacement Property Reportable transactions. Free tax amendment , Reminders Repossessions, Foreclosure or Repossession Right-of-way income, Easements and rights-of-way. Free tax amendment S Sale of home, Sale of your home. Free tax amendment Section 179 expense deduction, Section 179 Expense Deduction How to elect, How Do You Elect the Deduction? Listed property, Additional Rules for Listed Property Qualifying property, What Property Qualifies? Recapture, When Must You Recapture the Deduction? Self-employed health insurance, Self-employed health insurance deduction. Free tax amendment Self-employed health insurance deduction, Self-employed health insurance deduction. Free tax amendment Self-employment tax Community property, Community property. Free tax amendment Deduction, Deduction for employer-equivalent portion of self-employment tax. Free tax amendment How to pay, How To Pay Self-Employment Tax Landlord participation, Landlord Participation in Farming Material participation, Material participation for landlords. Free tax amendment Maximum net earnings, What's New for 2013 Methods for figuring net earnings, Methods for Figuring Net Earnings Optional method, Farm Optional Method Regular method, Regular Method Rental income, Landlord Participation in Farming Reporting, Reporting Self-Employment Tax Self-employment tax rate, Self-employment tax rate. Free tax amendment Share farming, Share farmer. Free tax amendment Tax rates, What's New for 2013 Who must pay, Who Must Pay Self-Employment Tax? Selling expenses, Selling expenses. Free tax amendment Selling price Defined, Selling price. Free tax amendment Reduced, Selling price reduced. Free tax amendment Settlement costs (fees), Settlement costs. Free tax amendment Social security and Medicare Credits of coverage, Earning credits in 2013. Free tax amendment Withholding of tax, Social Security and Medicare Taxes Social security number, Obtaining a social security number. Free tax amendment Software, computer, Computer software. Free tax amendment Soil Conservation, Conservation Expenses Contamination, Soil or other environmental contamination. Free tax amendment Special depreciation allowance How to elect not to claim, How Can You Elect Not To Claim the Allowance? Recapture, When Must You Recapture an Allowance Standard mileage rate, Standard mileage rate. Free tax amendment Start-up costs for businesses, Business start-up and organizational costs. Free tax amendment Suggestions for publication, Comments and suggestions. Free tax amendment T Tangible personal property, Tangible personal property. Free tax amendment Tax help, How To Get Tax Help Tax preparation fees, Tax preparation fees. Free tax amendment Tax shelter At-risk limits, At-Risk Limits Defined, Tax shelter. Free tax amendment Tax-free exchanges, Like-Kind Exchanges Taxes Excise, Excise Taxes Federal use, Highway use tax. Free tax amendment General, Taxes Self-employment, Self-Employment Tax State and federal, State and federal income taxes. Free tax amendment State and local general sales, State and local general sales taxes. Free tax amendment Withholding, Federal income tax withholding. Free tax amendment , Social Security and Medicare Taxes, Federal Income Tax Withholding Telephone expense, Telephone expense. Free tax amendment Tenant house expenses, Tenant House Expenses Term interests, Certain term interests in property. Free tax amendment Theft losses, Casualties, Thefts, and Condemnations Timber, Timber. Free tax amendment , Timber Depletion, Timber Tobacco quota buyout payments, Tobacco Quota Buyout Program Payments Tobacco settlement payments, National Tobacco Growers' Settlement Trust Fund Payments Trade-in, Sale and Purchase Travel expenses, Travel Expenses Truck expenses, Truck and Car Expenses Trust fund recovery penalty, Trust fund recovery penalty. Free tax amendment TTY/TDD information, How To Get Tax Help U Uniform capitalization rules Basis of assets, Uniform Capitalization Rules Inventory, Uniform capitalization rules. Free tax amendment Unstated interest, Unstated interest. Free tax amendment W Wages and salaries, Wages and salaries. Free tax amendment Water conservation, Conservation Expenses Water well, Water well. Free tax amendment , Water wells. Free tax amendment Weather-related sales, livestock, Sales Caused by Weather-Related Conditions, Weather-related sales of livestock. Free tax amendment Withholding Income tax, Federal Income Tax Withholding Social security and Medicare tax, Social Security and Medicare Taxes Prev  Up     Home   More Online Publications