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

TurboTax Federal Free Edition - File Taxes Online

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

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


© 2012 - 2018 All rights reserved.

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

H&r Block Free Filing

1040ez BookletAmended Tax Return FormIrs Tax ExtentionsTax Student1040x Download2011 Federal Tax Forms And Instructions2012.taxhowFree 1040 EzHow To File Taxes While UnemployedE File State Taxes FreeState ReturnsPrintable Tax Form 1040How To Get A 1040x Tax FormHow To File Tax Amendment1040ez 2013 File OnlineEfile Tax ReturnFiling Taxes In The MilitaryFile 2010 Tax Return LateOhio Free FileState Tax ReturnFree Irs Tax FilingIrs Tax Amendment FormHow To File 1040ez Online For FreeTax Planning Us 1040a1040ez TelefileRefile 2012 TaxesFederal Tax Return Forms 1040ezFile State Taxes Only For FreeWww Handrblock ComIrsefile ComH And R Block Free TaxesFiling 1040x With Form 9821040ez Tax Form 2013How Do I File My Taxes For 20102012 1040 Ez Tax FormI Need To File 2011 Tax ReturnTax Return AmendmentSelf Employment Tax Filing2008 Tax Forms 1040Turbotax Deluxe Federal E File State 2012 For Pc Download

H&r Block Free Filing

H&r block free filing Publication 3402 - Main Content Table of Contents What is a Limited Liability Company? Classification of an LLC LLCs Classified as Partnerships LLCs Classified as Disregarded Entities LLCs Classified as Corporations Subsequent Elections How To Get More InformationInternal Revenue Service Small Business Administration Other Federal Agencies What is a Limited Liability Company? For purposes of this publication, a limited liability company (LLC) is a business entity organized in the United States under state law. H&r block free filing Unlike a partnership, all of the members of an LLC have limited personal liability for its debts. H&r block free filing An LLC may be classified for federal income tax purposes as a partnership, corporation, or an entity disregarded as separate from its owner by applying the rules in Regulations section 301. H&r block free filing 7701-3. H&r block free filing The information in this publication applies to LLCs in general, and different rules may apply to special situations, including banks, insurance companies, or nonprofit organizations that are LLCs or that own LLCs. H&r block free filing Check your state's requirements and the federal tax regulations for further information. H&r block free filing Classification of an LLC Default classification rules. H&r block free filing   An LLC with at least two members is classified as a partnership for federal income tax purposes. H&r block free filing An LLC with only one member is treated as an entity disregarded as separate from its owner for income tax purposes (but as a separate entity for purposes of employment tax and certain excise taxes). H&r block free filing Also, an LLC's federal tax classification can subsequently change under certain default rules discussed later. H&r block free filing Elected classification. H&r block free filing   If an LLC does not choose to be classified under the above default classifications, it can elect to be classified as an association taxable as a corporation or as an S corporation. H&r block free filing After an LLC has determined its federal tax classification, it can later elect to change that classification. H&r block free filing For details, see Subsequent Elections, later. H&r block free filing LLCs Classified as Partnerships If an LLC has at least two members and is classified as a partnership, it generally must file Form 1065, U. H&r block free filing S. H&r block free filing Return of Partnership Income. H&r block free filing Generally, an LLC classified as a partnership is subject to the same filing and reporting requirements as partnerships. H&r block free filing For certain purposes, members of an LLC are treated as limited partners in a limited partnership. H&r block free filing For example, LLC members are treated as limited partners for purposes of material participation under the passive activity limitation rules (see Temporary Regulation section 1. H&r block free filing 469-5T(e)). H&r block free filing See the Instructions for Form 1065 for reporting rules that apply specifically to LLCs. H&r block free filing Member manager. H&r block free filing   Only a member manager of an LLC can sign the partnership tax return. H&r block free filing And only a member manager can represent the LLC as the tax matters partner under the consolidated audit proceedings in sections 6221 through 6234. H&r block free filing A member manager is any owner of an interest in the LLC who, alone or together with others, has the continuing authority to make the management decisions necessary to conduct the business for which the LLC was formed. H&r block free filing If there are no elected or designated member managers, each owner is treated as a member manager. H&r block free filing Change in default classification. H&r block free filing   If the number of members in an LLC classified as a partnership is reduced to only one member, it becomes an entity disregarded as separate from its owner under Regulations section 301. H&r block free filing 7701-3(f)(2). H&r block free filing However, if the LLC has made an election to be classified as a corporation (discussed later) and that elective classification is in effect at the time of the change in membership, the default classification as a disregarded entity will not apply. H&r block free filing   Other tax consequences of a change in membership, such as recognition of gain or loss, are determined by the transactions through which an interest in the LLC is acquired or disposed of. H&r block free filing If a partnership that becomes a disregarded entity as a result of a decrease in the number of members makes an election to be classified as a corporation, the applicable deemed transactions discussed under Subsequent Elections, later, apply. H&r block free filing Example 1. H&r block free filing Ethel and Francis are members of an LLC classified as a partnership for federal tax purposes. H&r block free filing Each holds an equal membership interest. H&r block free filing The LLC does not hold any unrealized receivables or substantially appreciated inventory. H&r block free filing Ethel sells her entire interest in the LLC to Francis for $10,000. H&r block free filing After the sale, the business is continued by the LLC, which is owned solely by Francis. H&r block free filing No entity classification election is made after the sale to treat the LLC as a corporation for federal tax purposes. H&r block free filing The partnership terminates when Francis buys Ethel's entire interest. H&r block free filing Ethel must treat the transaction as the sale of a partnership interest and must report gain or loss, if any, resulting from the sale of her partnership interest. H&r block free filing For purposes of determining the tax treatment of Francis, the partnership is deemed to make a liquidating distribution of all of its assets to Ethel and Francis, and after this distribution, Francis is treated as acquiring the assets deemed to have been distributed to Ethel in liquidation of Ethel's partnership interest. H&r block free filing Francis's basis in the assets attributable to Ethel's one-half interest in the partnership is $10,000, the purchase price for Ethel's partnership interest. H&r block free filing Upon the termination of the partnership, Francis is considered to receive a distribution of those assets attributable to Francis's former interest in the partnership. H&r block free filing Francis must recognize gain or loss, if any, on the deemed distribution of the assets to the extent required by Internal Revenue Code section 731(a). H&r block free filing See Partnership Distributions in Publication 541. H&r block free filing Example 2. H&r block free filing George and Henrietta are members of an LLC classified as a partnership for federal tax purposes. H&r block free filing Each holds an equal membership interest. H&r block free filing The LLC does not hold any unrealized receivables or substantially appreciated inventory. H&r block free filing George and Henrietta each sell their entire interests in the LLC to Ian, an unrelated person, in exchange for $10,000. H&r block free filing After the sale, the business is continued by the LLC, which is owned solely by Ian. H&r block free filing No entity classification election is made after the sale to treat the LLC as a corporation for federal tax purposes. H&r block free filing The partnership terminates when Ian purchases the entire interests of George and Henrietta in the LLC. H&r block free filing George and Henrietta must report gain or loss, if any, resulting from the sale of their partnership interests. H&r block free filing For purposes of classifying the acquisition by Ian, the partnership is deemed to make a liquidating distribution of its assets to George and Henrietta. H&r block free filing Immediately following this distribution, Ian is deemed to acquire, by purchase, all of the former partnership's assets. H&r block free filing   For more details on the preceding two examples, see Revenue Ruling 99-6, 1999-6 I. H&r block free filing R. H&r block free filing B. H&r block free filing 6. H&r block free filing You can find Revenue Ruling 99-6 at www. H&r block free filing irs. H&r block free filing gov/pub/irs-irbs/irb99-06. H&r block free filing pdf. H&r block free filing LLCs Classified as Disregarded Entities If an LLC has only one member and is classified as an entity disregarded as separate from its owner, its income, deductions, gains, losses, and credits are reported on the owner's income tax return. H&r block free filing For example, if the owner of the LLC is an individual, the LLC's income and expenses would be reported on the following schedules filed with the owner's Form 1040: Schedule C, Profit or Loss from Business (Sole Proprietorship); Schedule C-EZ, Net Profit From Business (Sole Proprietorship); Schedule E, Supplemental Income and Loss; or Schedule F, Profit or Loss From Farming. H&r block free filing Employment tax and certain excise taxes. H&r block free filing   A single-member LLC that is classified as a disregarded entity for income tax purposes is treated as a separate entity for purposes of employment tax and certain excise taxes. H&r block free filing For wages paid after January 1, 2009, the single-member LLC is required to use its name and employer identification number (EIN) for reporting and payment of employment taxes. H&r block free filing A single-member LLC is also required to use its name and EIN to register for excise tax activities on Form 637; pay and report excise taxes reported on Forms 720, 730, 2290, and 11-C; and claim any refunds, credits, and payments on Form 8849. H&r block free filing See the employment and excise tax returns for more information. H&r block free filing Self-employment tax rule for disregarded entity LLCs. H&r block free filing   An individual owner of a single-member LLC classified as a disregarded entity is not an employee of the LLC. H&r block free filing Instead, the owner is subject to tax on the net earnings from self-employment of the LLC which is treated in the same manner as a sole-proprietorship. H&r block free filing Example 3. H&r block free filing LLC is a disregarded entity owned by Irene. H&r block free filing LLC has three employees (Kent, Patricia, and Tex) and pays wages. H&r block free filing LLC is treated as an entity separate from its owner for purposes of employment taxes. H&r block free filing For the wages paid to Kent, Patricia, and Tex, LLC is liable for income tax withholding, Federal Insurance Contributions Act (FICA) taxes, and Federal Unemployment Tax Act (FUTA) taxes. H&r block free filing In addition, LLC must file under its name and EIN the applicable employment tax returns; make timely employment tax deposits; and file with the Social Security Administration and furnish to LLC's employees (Kent, Patricia, and Tex) Forms W-2, Wage and Tax Statement. H&r block free filing Irene is self-employed for purposes of the self-employment tax. H&r block free filing Thus, Irene is subject to self-employment tax on her net earnings from self-employment with respect to LLC's activities. H&r block free filing Irene is not an employee of LLC for purposes of employment taxes. H&r block free filing Because LLC is treated as a sole proprietorship of Irene for income tax purposes, Irene must report the income and expenses from LLC on her Schedule C. H&r block free filing Irene will figure the tax due on her net earnings from self-employment on Schedule SE. H&r block free filing Irene can also deduct one-half of her self-employment tax on line 27 of her Form 1040. H&r block free filing Taxpayer identification number. H&r block free filing   For all income tax purposes, a single-member LLC classified as a disregarded entity must use the owner's social security number (SSN) or EIN. H&r block free filing This includes all information returns and reporting related to income tax. H&r block free filing For example, if a disregarded entity LLC that is owned by an individual is required to provide a Form W-9, Request for Taxpayer Identification Number and Certification, the LLC must provide the owner's SSN or EIN, not the LLC's EIN. H&r block free filing   However, most new single-member LLCs classified as a disregarded entity will need to obtain an EIN for the LLC. H&r block free filing An LLC will need an EIN if it has any employees or if it will be required to file any of the excise tax forms listed above (see Employment tax and certain excise taxes earlier). H&r block free filing See Form SS-4, Application for Employer Identification Number, for information on applying for an EIN. H&r block free filing Change in default classification. H&r block free filing   If a single-member LLC classified as a disregarded entity for income tax purposes acquires an additional member, it becomes a partnership under Regulations section 301. H&r block free filing 7701-3(f)(2). H&r block free filing However, if the LLC has made an election to be classified as a corporation (discussed later) and that elective classification is in effect at the time of the change in membership, the default classification as a partnership will not apply. H&r block free filing   Other tax consequences of a change in membership, such as recognition of gain or loss, are determined by the transactions through which an interest in the LLC is acquired or disposed of. H&r block free filing If a disregarded entity that becomes a partnership as a result of an increase in the number of members makes an election to be classified as a corporation, the applicable deemed transactions discussed in Subsequent Elections, later, apply. H&r block free filing Example 4. H&r block free filing Bart, who is not related to Alain, buys 50% of Alain's interest in an LLC that is a disregarded entity for $5,000. H&r block free filing Alain does not contribute any portion of the $5,000 to the LLC. H&r block free filing Alain and Bart continue to operate the business of the LLC as co-owners of the LLC. H&r block free filing The LLC is converted to a partnership when the new member, Bart, buys an interest in the disregarded entity from the owner, Alain. H&r block free filing Bart's buying a 50% interest in Alain's ownership interest in the LLC is treated as Bart's buying a 50% interest in each of the LLC's assets, which are treated as owned directly by Alain for federal income tax purposes. H&r block free filing Immediately thereafter, Alain and Bart are treated as contributing their respective interests in those assets to a partnership in exchange for ownership interests in the partnership. H&r block free filing Alain recognizes gain or loss from the deemed sale to Bart of the 50% interest in the assets. H&r block free filing Neither Alain nor Bart recognizes any gain or loss as a result of the deemed contribution of the assets to the partnership. H&r block free filing Example 5. H&r block free filing Charles, who is not related to Danielle, contributes $10,000 to an LLC owned by Danielle for a 50% ownership interest in the LLC. H&r block free filing The LLC uses all of the contributed cash in its business. H&r block free filing Charles and Danielle continue to operate the business of the LLC as co-owners of the LLC. H&r block free filing The LLC is converted from a disregarded entity to a partnership when Charles contributes cash to the LLC. H&r block free filing Charles's contribution is treated as a contribution to a partnership in exchange for an ownership interest in the partnership. H&r block free filing Danielle is treated as contributing all of the assets of the LLC to the partnership in exchange for a partnership interest. H&r block free filing Neither Charles nor Danielle recognizes gain or loss as a result of the conversion of the disregarded entity to a partnership. H&r block free filing   For more details on the preceding two examples, see Revenue Ruling 99-5, 1999-6 I. H&r block free filing R. H&r block free filing B. H&r block free filing 8. H&r block free filing You can find Revenue Ruling 99-5 at www. H&r block free filing irs. H&r block free filing gov/pub/irs-irbs/irb99-06. H&r block free filing pdf. H&r block free filing LLCs Classified as Corporations An LLC with either a single member or more than one member can elect to be classified as a corporation rather than be classified as a partnership or disregarded entity under the default rules discussed earlier. H&r block free filing File Form 8832, Entity Classification Election, to elect classification as a C corporation. H&r block free filing File Form 2553, Election by a Small Business Corporation, to elect classification as an S corporation. H&r block free filing LLCs electing classification as an S corporation are not required to file Form 8832 to elect classification as a corporation before filing Form 2553. H&r block free filing By filing Form 2553, an LLC is deemed to have elected classification as a corporation in addition to the S corporation classification. H&r block free filing If the LLC elects to be classified as a corporation by filing Form 8832, a copy of the LLC's Form 8832 must be attached to the federal income tax return of each direct and indirect owner of the LLC for the tax year of the owner that includes the date on which the election took effect. H&r block free filing Example 6. H&r block free filing Classification as a corporation without an S election. H&r block free filing Wanda and Sylvester are members of an LLC. H&r block free filing They agree that the LLC should be classified as a corporation but do not want to elect to have the LLC be treated as an S corporation. H&r block free filing The LLC must file Form 8832. H&r block free filing Example 7. H&r block free filing Classification as a corporation with an S election. H&r block free filing Evelyn and Carol are members of an LLC. H&r block free filing They agree that the LLC should be classified as an S corporation. H&r block free filing The LLC must file Form 2553 instead of Form 8832. H&r block free filing If the LLC is classified as a corporation, it must file a corporation income tax return. H&r block free filing If it is a C corporation, it is taxed on its taxable income and distributions to the members are includible in the members' gross income to the extent of the corporation's earnings and profits (double taxation). H&r block free filing If it is an S corporation, the corporation is generally not subject to any income tax and the income, deductions, gains, losses, and credits of the corporation “pass through” to the members. H&r block free filing Corporations generally file either: Form 1120, U. H&r block free filing S. H&r block free filing Corporation Income Tax Return; or Form 1120S, U. H&r block free filing S. H&r block free filing Income Tax Return for an S Corporation. H&r block free filing For more information on the income taxation of corporations and their shareholders, see Publication 542, Corporations. H&r block free filing For more information on the income taxation of S corporations and their shareholders, see the Instructions for Form 1120S, U. H&r block free filing S. H&r block free filing Income Tax Return for an S Corporation. H&r block free filing Subsequent Elections An LLC can elect to change its classification. H&r block free filing Generally, once an LLC has elected to change its classification, it cannot elect again to change it classification during the 60 months after the effective date of the election. H&r block free filing An election by a newly formed LLC that is effective on the date of formation is not considered a change for purposes of this limitation. H&r block free filing For more information and exceptions, see Regulations section 301. H&r block free filing 7701-3(c) and the Form 8832 instructions. H&r block free filing An election to change classification can have significant tax consequences based on the following transactions that are deemed to occur as a result of the election. H&r block free filing Partnership to corporation. H&r block free filing   An election to change classification from a partnership to a corporation will be treated as if the partnership contributed all of its assets and liabilities to the corporation in exchange for stock and the partnership then immediately liquidated by distributing the stock to its partners. H&r block free filing   For more information, see Partnership Distributions in Publication 541 and Property Exchanged for Stock in Publication 542. H&r block free filing Corporation to partnership. H&r block free filing   An election to change classification from a corporation to a partnership will be treated as if the corporation distributed all of its assets and liabilities to its shareholders in liquidation and the shareholders then immediately contributed all of the distributed assets and liabilities to a new partnership. H&r block free filing   For more information, see Contribution of Property in Publication 541 and Distributions to Shareholders in Publication 542. H&r block free filing Corporation to disregarded entity. H&r block free filing   An election to change classification from a corporation to a disregarded entity will be treated as if the corporation distributed all of its assets and liabilities to its single owner in liquidation. H&r block free filing   For more information, see Distributions to Shareholders in Publication 542. H&r block free filing Disregarded entity to corporation. H&r block free filing   An election to change classification from a disregarded entity to a corporation will be treated as if the owner of the disregarded entity contributed all of the assets and liabilities to the corporation in exchange for stock. H&r block free filing   For more information, see Property Exchanged for Stock in Publication 542. H&r block free filing How To Get More Information This section describes the help the IRS and other federal agencies offer to taxpayers who operate their own businesses. H&r block free filing Internal Revenue Service You can get help with unresolved tax issues, order free publications and forms, ask tax questions, and get information from the IRS in several ways. H&r block free filing By selecting the method that is best for you, you will have quick and easy access to tax help. H&r block free filing Contacting your Taxpayer Advocate. H&r block free filing   The Taxpayer Advocate Service (TAS) is an independent organization within the IRS whose employees assist taxpayers who are experiencing economic harm, who are seeking help in resolving tax problems that have not been resolved through normal channels, or who believe that an IRS system or procedure is not working as it should. H&r block free filing   You can contact the TAS by calling the TAS toll-free case intake line at 1-877-777-4778 or TTY/TDD 1-800-829-4059 to see if you are eligible for assistance. H&r block free filing You can also call or write to your local taxpayer advocate, whose phone number and address are listed in your local telephone directory and in Publication 1546, Taxpayer Advocate Service — Your Voice at the IRS. H&r block free filing You can file Form 911, Request for Taxpayer Advocate Service Assistance (And Application for Taxpayer Assistance Order), or ask an IRS employee to complete it on your behalf. H&r block free filing For more information, go to www. H&r block free filing irs. H&r block free filing gov/advocate. H&r block free filing Low Income Taxpayer Clinics (LITCs). H&r block free filing   LITCs are independent organizations that provide low income taxpayers with representation in federal tax controversies with the IRS for free or for a nominal charge. H&r block free filing The clinics also provide tax education and outreach for taxpayers with limited English proficiency or who speak English as a second language. H&r block free filing Publication 4134, Low Income Taxpayer Clinic List, provides information on clinics in your area. H&r block free filing It is available at www. H&r block free filing irs. H&r block free filing gov or at your local IRS office. H&r block free filing Small business workshops. H&r block free filing   Small business workshops are designed to help the small business owner understand and fulfill their federal tax responsibilities. H&r block free filing Workshops are sponsored and presented by IRS partners who are federal tax specialists. H&r block free filing Workshop topics vary from a general overview of taxes to more specific topics such as recordkeeping and retirement plans. H&r block free filing Although most are free, some workshops have fees associated with them. H&r block free filing Any fees charged for a workshop are paid to the sponsoring organization, not the IRS. H&r block free filing   For more information, visit www. H&r block free filing irs. H&r block free filing gov/businesses/small. H&r block free filing Subscribe to e-news for small businesses. H&r block free filing   Join the e-News for Small Businesses mailing list to receive updates, reminders, and other information useful to small business owners and self employed individuals. H&r block free filing Visit the website at www. H&r block free filing irs. H&r block free filing gov/businesses/small and click on “Subscribe to e-News. H&r block free filing ” Free tax services. H&r block free filing   To find out what services are available, get Publication 910, IRS Guide to Free Tax Services. H&r block free filing It contains a list of free tax publications and describes other free tax information services, including tax education and assistance programs and a list of TeleTax topics. H&r block free filing   Accessible versions of IRS published products are available on request in a variety of alternative formats for people with disabilities. H&r block free filing Internet. H&r block free filing You can access the IRS website at www. H&r block free filing irs. H&r block free filing gov 24 hours a day, 7 days a week, to: E-file your return. H&r block free filing Find out about commercial tax preparation and e-file services available free to eligible taxpayers. H&r block free filing Check the status of your refund. H&r block free filing Go to www. H&r block free filing irs. H&r block free filing gov and click on Where's My Refund. H&r block free filing Wait at least 72 hours after the IRS acknowledges receipt of your e-filed return, or 3 to 4 weeks after mailing a paper return. H&r block free filing If you filed Form 8379 with your return, wait 14 weeks (11 weeks if you filed electronically). H&r block free filing Have your tax return available so you can provide your social security number, your filing status, and the exact whole dollar amount of your refund. H&r block free filing Download forms, instructions, and publications. H&r block free filing Order IRS products online. H&r block free filing Research your tax questions online. H&r block free filing Search publications online by topic or keyword. H&r block free filing View Internal Revenue Bulletins (IRBs) published in the last few years. H&r block free filing Figure your withholding allowances using the withholding calculator online at www. H&r block free filing irs. H&r block free filing gov/individuals. H&r block free filing Determine if Form 6251 must be filed using our Alternative Minimum Tax (AMT) Assistant. H&r block free filing Sign up to receive local and national tax news by email. H&r block free filing Get information on starting and operating a small business. H&r block free filing Phone. H&r block free filing Many services are available by phone. H&r block free filing Ordering forms, instructions, and publications. H&r block free filing Call 1-800-829-3676 to order current-year forms, instructions, and publications, and prior-year forms and instructions. H&r block free filing You should receive your order within 10 days. H&r block free filing Asking tax questions. H&r block free filing Call the IRS with your tax questions at 1-800-829-1040. H&r block free filing Solving problems. H&r block free filing You can get face-to-face help solving tax problems every business day in IRS Taxpayer Assistance Centers. H&r block free filing An employee can explain IRS letters, request adjustments to your account, or help you set up a payment plan. H&r block free filing Call your local Taxpayer Assistance Center for an appointment. H&r block free filing To find the number, go to www. H&r block free filing irs. H&r block free filing gov/localcontacts or look in the phone book under United States Government, Internal Revenue Service. H&r block free filing TTY/TDD equipment. H&r block free filing If you have access to TTY/TDD equipment, call 1-800-829-4059 to ask tax questions or to order forms and publications. H&r block free filing TeleTax topics. H&r block free filing Call 1-800-829-4477 to listen to pre-recorded messages covering various tax topics. H&r block free filing Refund information. H&r block free filing To check the status of your 2009 refund, call 1-800-829-1954 during business hours or 1-800-829-4477 (automated refund information 24 hours a day, 7 days a week). H&r block free filing Wait at least 72 hours after the IRS acknowledges receipt of your e-filed return, or 3 to 4 weeks after mailing a paper return. H&r block free filing If you filed Form 8379 with your return, wait 14 weeks (11 weeks if you filed electronically). H&r block free filing Have your 2009 tax return available so you can provide your social security number, your filing status, and the exact whole dollar amount of your refund. H&r block free filing Refunds are sent out weekly on Fridays. H&r block free filing If you check the status of your refund and are not given the date it will be issued, please wait until the next week before checking back. H&r block free filing Evaluating the quality of our telephone services. H&r block free filing To ensure IRS representatives give accurate, courteous, and professional answers, we use several methods to evaluate the quality of our telephone services. H&r block free filing One method is for a second IRS representative to listen in on or record random telephone calls. H&r block free filing Another is to ask some callers to complete a short survey at the end of the call. H&r block free filing Walk-in. H&r block free filing Many products and services are available on a walk-in basis. H&r block free filing Products. H&r block free filing You can walk in to many post offices, libraries, and IRS offices to pick up certain forms, instructions, and publications. H&r block free filing Some IRS offices, libraries, grocery stores, copy centers, city and county government offices, credit unions, and office supply stores have a collection of products available to print from a CD or photocopy from reproducible proofs. H&r block free filing Also, some IRS offices and libraries have the Internal Revenue Code, regulations, Internal Revenue Bulletins, and Cumulative Bulletins available for research purposes. H&r block free filing Services. H&r block free filing You can walk in to your local Taxpayer Assistance Center every business day for personal, face-to-face tax help. H&r block free filing An employee can explain IRS letters, request adjustments to your tax account, or help you set up a payment plan. H&r block free filing If you need to resolve a tax problem, have questions about how the tax law applies to your individual tax return, or you are more comfortable talking with someone in person, visit your local Taxpayer Assistance Center where you can spread out your records and talk with an IRS representative face-to-face. H&r block free filing No appointment is necessary—just walk in. H&r block free filing If you prefer, you can call your local Center and leave a message requesting an appointment to resolve a tax account issue. H&r block free filing A representative will call you back within 2 business days to schedule an in-person appointment at your convenience. H&r block free filing If you have an ongoing, complex tax account problem or a special need, such as a disability, an appointment can be requested. H&r block free filing All other issues will be handled without an appointment. H&r block free filing To find the number of your local office, go to www. H&r block free filing irs. H&r block free filing gov/localcontacts or look in the phone book under United States Government, Internal Revenue Service. H&r block free filing Mail. H&r block free filing You can send your order for forms, instructions, and publications to the address below. H&r block free filing You should receive a response within 10 days after your request is received. H&r block free filing Internal Revenue Service1201 N. H&r block free filing Mitsubishi MotorwayBloomington, IL 61705–6613 DVD for tax products. H&r block free filing You can order Publication 1796, IRS Tax Products DVD, and obtain: Current-year forms, instructions, and publications. H&r block free filing Prior-year forms, instructions, and publications. H&r block free filing Tax Map: an electronic research tool and finding aid. H&r block free filing Tax law frequently asked questions. H&r block free filing Tax Topics from the IRS telephone response system. H&r block free filing Internal Revenue Code—Title 26 of the U. H&r block free filing S. H&r block free filing Code. H&r block free filing Fill-in, print, and save features for most tax forms. H&r block free filing Internal Revenue Bulletins. H&r block free filing Toll-free and email technical support. H&r block free filing Two releases during the year. H&r block free filing – The first release will ship the beginning of January. H&r block free filing – The final release will ship the beginning of March. H&r block free filing Purchase the DVD from National Technical Information Service (NTIS) at www. H&r block free filing irs. H&r block free filing gov/cdorders for $30 (no handling fee) or call 1-877-CDFORMS (1-877-233-6767) toll free to buy the DVD for $30 (plus a $6 handling fee). H&r block free filing Small Business Administration The Small Business Administration (SBA) offers training and educational programs, counseling services, financial programs, and contract assistance for small business owners. H&r block free filing The SBA also has publications and videos on a variety of business topics. H&r block free filing The following briefly describes assistance provided by the SBA. H&r block free filing Small Business Development Centers (SBDCs). H&r block free filing   SBDCs provide counseling, training, and technical services to current and prospective small business owners who cannot afford the services of a private consultant. H&r block free filing Help is available when beginning, improving, or expanding a small business. H&r block free filing Business Information Centers (BICs). H&r block free filing   BICs offer a small business reference library, management video tapes, and computer technology to help plan a business. H&r block free filing BICs also offer one-on-one assistance. H&r block free filing Individuals who are in business or are interested in starting a business can use BICs as often as they wish at no charge. H&r block free filing Service Corps of Retired Executives (SCORE). H&r block free filing   SCORE provides small business counseling and training to current and prospective small business owners. H&r block free filing SCORE is made up of current and former business people who offer their expertise and knowledge to help people start, manage, and expand a small business. H&r block free filing SCORE also offers a variety of small business workshops. H&r block free filing    Internet. H&r block free filing You can visit the SBA website at www. H&r block free filing sba. H&r block free filing gov. H&r block free filing While visiting the SBA website, you can find a variety of information of interest to small business owners. H&r block free filing    Phone. H&r block free filing Call the SBA Answer Desk at 1-800-UASK-SBA (1-800-827-5722) for general information about programs available to assist small business owners. H&r block free filing    Walk-in. H&r block free filing You can walk in to a Small Business Development Center or Business Information Center to request assistance with your small business. H&r block free filing To find the location nearest you, visit the SBA website or call the SBA Answer Desk. H&r block free filing Other Federal Agencies Other federal agencies also publish publications and pamphlets to assist small businesses. H&r block free filing Most of these are available from the Superintendent of Documents at the Government Printing Office. H&r block free filing You can get information and order these publications and pamphlets in several ways. H&r block free filing Internet. H&r block free filing You can visit the GPO website at www. H&r block free filing access. H&r block free filing gpo. H&r block free filing gov. H&r block free filing Mail. H&r block free filing Write to the GPO at the following address. H&r block free filing Superintendent of DocumentsU. H&r block free filing S. H&r block free filing Government Printing OfficeP. H&r block free filing O. H&r block free filing Box 979050St. H&r block free filing Louis, MO 63917-9000 Phone. H&r block free filing Call the GPO toll-free at 1-866-512-1800 or at 202-512-1800 from the Washington, DC area. H&r block free filing Prev  Up  Next   Home   More Online Publications
Español

Bankruptcy Courts

Each of the 94 federal judicial districts handles bankruptcy matters, and in almost all districts, bankruptcy cases are filed in the bankruptcy court. Bankruptcy laws help people who can no longer pay their creditors get a fresh start by liquidating their assets to pay their debts, or by creating a repayment plan.

Contact the Agency or Department

The H&r Block Free Filing

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