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Irs Amended Tax Return

Form 1040x Fillable1040ez Form InstructionsTax Act 2009How To File An Extension For 2012 TaxesFederal Income Tax Amended ReturnIrs 2009Free Tax Act 20112011 Free Tax FileIrs 1040ez FormTax 1040nrMilitary Onesource TurbotaxFree Federal & State E-fileTax Amendment Form 2011Free Tax File1040 Ez Forms Tax ReturnIrs Form 1040esAmended 1040 EzFree Filing Of State TaxesCan I Efile A 2012 Tax ReturnFile For Extension 2012 TaxesWww Irs Gov EfileAmending A State Tax ReturnWww Irs Gov FormspubsI Need To File My State Taxes Only1040 State Tax FormStudents Filing Taxes 2013File Income Tax Extension FreeFree Tax Filing For Low IncomeFree Tax Filing For Unemployed2012 Ez Tax FormsFiling Taxes Self EmployedIrs Tax Forms 1040ezState Taxes For MilitaryDo Active Duty Military Pay State TaxesTax Forms 1040Amend 1040xFiling Amended Federal Tax Return1040 State Tax FormTaxact 2010 ReturnPrint Free 1040ez Tax Form

Irs Amended Tax Return

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Understanding Your CP53C Notice

We tried to direct deposit your refund, but the financial institution couldn’t process it. When refund payments are questionable, we review related returns to ensure the return is valid. We are researching your account, but it will take 8 to 10 weeks to complete our review and verify this refund.


What you need to do

  • You don’t need to do anything at this time.

You may want to

  • Call us at the toll-free number on the notice if you don’t receive your refund check or a follow-up letter within 10 weeks
  • Monitor your financial accounts

However, if you call us before 10 weeks have passed, we won’t have any information about the status of your refund.


Answers to Common Questions

Q. Why was my direct deposit refund returned to the IRS?

A. A financial institution will reject a refund for a variety of reasons. Most often, the personal information on the direct deposit doesn’t match its records: 

  • Name
  • SSN
  • Routing number

Q. Why could the refund review take up to 10 weeks?

A. We must research your account to determine if you are entitled to the refund. We try to balance customer service and tax compliance when we review tax returns. Refund timeframes are also affected by:

  • Bankruptcy
  • An open audit
  • A balance due on a related account (such as a different tax year)

Q. Will calling the IRS give me additional information or speed my refund?

A. No, calling us won’t speed up your refund. You don’t need to call us unless we send you a letter asking ask you to contact us. Our telephone assistors won’t be able to provide any additional information.


Tips for next year

If you request a direct deposit refund, be sure the account you specify is in your name (or your spouse’s if you have a joint refund).


If you changed your name as a result of a recent marriage or divorce, be sure you’ll want to take the necessary steps to ensure the name on your tax return matches the name registered with the Social Security Administration.


Never direct your refund to an account that belongs to a relative, friend, or tax return preparer.

Page Last Reviewed or Updated: 22-Jan-2014

Printable samples of this notice (PDF)

 

 

How to get help

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

The Irs Amended Tax Return

Irs amended tax return 9. Irs amended tax return   Dispositions of Property Used in Farming Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: Section 1231 Gains and LossesNonrecaptured section 1231 losses. Irs amended tax return Depreciation RecaptureSection 1245 Property Section 1250 Property Installment Sale Other Dispositions Other GainsExceptions. Irs amended tax return Amount to report as ordinary income. Irs amended tax return Applicable percentage. Irs amended tax return Amount to report as ordinary income. Irs amended tax return Applicable percentage. Irs amended tax return Introduction When you dispose of property used in your farm business, your taxable gain or loss is usually treated as ordinary income (which is taxed at the same rates as wages and interest income) or capital gain (which is generally taxed at lower rates) under the rules for section 1231 transactions. Irs amended tax return When you dispose of depreciable property (section 1245 property or section 1250 property) at a gain, you may have to recognize all or part of the gain as ordinary income under the depreciation recapture rules. Irs amended tax return Any gain remaining after applying the depreciation recapture rules is a section 1231 gain, which may be taxed as a capital gain. Irs amended tax return Gains and losses from property used in farming are reported on Form 4797, Sales of Business Property. Irs amended tax return Table 9-1 contains examples of items reported on Form 4797 and refers to the part of that form on which they first should be reported. Irs amended tax return Topics - This chapter discusses: Section 1231 gains and losses Depreciation recapture Other gains Useful Items - You may want to see: Publication 544 Sales and Other Dispositions of Assets Form (and Instructions) 4797 Sales of Business Property See chapter 16 for information about getting publications and forms. Irs amended tax return Section 1231 Gains and Losses Section 1231 gains and losses are the taxable gains and losses from section 1231 transactions (explained below). Irs amended tax return Their treatment as ordinary or capital gains depends on whether you have a net gain or a net loss from all of your section 1231 transactions in the tax year. Irs amended tax return Table 9-1. Irs amended tax return Where to First Report Certain Items on Form 4797 Type of property Held 1 year  or less Held more than  1 year 1 Depreciable trade or business property:       a Sold or exchanged at a gain Part II Part III (1245, 1250)   b Sold or exchanged at a loss Part II Part I 2 Farmland held less than 10 years for which soil, water, or land clearing expenses were deducted:       a Sold at a gain Part II Part III (1252)   b Sold at a loss Part II Part I 3 All other farmland Part II Part I 4 Disposition of cost-sharing payment property described in section 126 Part II Part III (1255) 5 Cattle and horses used in a trade or business for draft, breeding, dairy, or sporting purposes: Held less  than 24 mos. Irs amended tax return Held 24 mos. Irs amended tax return  or more   a Sold at a gain Part II Part III (1245)   b Sold at a loss Part II Part I   c Raised cattle and horses sold at a gain Part II Part I 6 Livestock other than cattle and horses used in a trade or business for draft, breeding, dairy, or sporting purposes: Held less  than 12 mos. Irs amended tax return Held 12 mos. Irs amended tax return   or more   a Sold at a gain Part II Part III (1245)   b Sold at a loss Part II Part I   c Raised livestock sold at a gain Part II Part I If you have a gain from a section 1231 transaction, first determine whether any of the gain is ordinary income under the depreciation recapture rules (explained later). Irs amended tax return Do not take that gain into account as section 1231 gain. Irs amended tax return Section 1231 transactions. Irs amended tax return   Gain or loss on the following transactions is subject to section 1231 treatment. Irs amended tax return Sale or exchange of cattle and horses. Irs amended tax return The cattle and horses must be held for draft, breeding, dairy, or sporting purposes and held for 24 months or longer. Irs amended tax return Sale or exchange of other livestock. Irs amended tax return This livestock must be held for draft, breeding, dairy, or sporting purposes and held for 12 months or longer. Irs amended tax return Other livestock includes hogs, mules, sheep, goats, donkeys, and other fur-bearing animals. Irs amended tax return Other livestock does not include poultry. Irs amended tax return Sale or exchange of depreciable personal property. Irs amended tax return This property must be used in your business and held longer than 1 year. Irs amended tax return Generally, property held for the production of rents or royalties is considered to be used in a trade or business. Irs amended tax return Examples of depreciable personal property include farm machinery and trucks. Irs amended tax return It also includes amortizable section 197 intangibles. Irs amended tax return Sale or exchange of real estate. Irs amended tax return This property must be used in your business and held longer than 1 year. Irs amended tax return Examples are your farm or ranch (including barns and sheds). Irs amended tax return Sale or exchange of unharvested crops. Irs amended tax return The crop and land must be sold, exchanged, or involuntarily converted at the same time and to the same person, and the land must have been held longer than 1 year. Irs amended tax return You cannot keep any right or option to reacquire the land directly or indirectly (other than a right customarily incident to a mortgage or other security transaction). Irs amended tax return Growing crops sold with a leasehold on the land, even if sold to the same person in a single transaction, are not included. Irs amended tax return Distributive share of partnership gains and losses. Irs amended tax return Your distributive share must be from the sale or exchange of property listed above and held longer than 1 year (or for the required period for certain livestock). Irs amended tax return Cutting or disposal of timber. Irs amended tax return Special rules apply if you owned the timber longer than 1 year and elect to treat timber cutting as a sale or exchange, or you enter into a cutting contract, as described in chapter 8 under Timber . Irs amended tax return Condemnation. Irs amended tax return The condemned property (defined in chapter 11) must have been held longer than 1 year. Irs amended tax return It must be business property or a capital asset held in connection with a trade or business or a transaction entered into for profit, such as investment property. Irs amended tax return It cannot be property held for personal use. Irs amended tax return Casualty or theft. Irs amended tax return The casualty or theft must have affected business property, property held for the production of rents or royalties, or investment property (such as notes and bonds). Irs amended tax return You must have held the property longer than 1 year. Irs amended tax return However, if your casualty or theft losses are more than your casualty or theft gains, neither the gains nor the losses are taken into account in the section 1231 computation. Irs amended tax return Section 1231 does not apply to personal casualty gains and losses. Irs amended tax return See chapter 11 for information on how to treat those gains and losses. Irs amended tax return If the property is not held for the required holding period, the transaction is not subject to section 1231 treatment, and any gain or loss is ordinary income reported in Part II of Form 4797. Irs amended tax return See Table 9-1. Irs amended tax return Property for sale to customers. Irs amended tax return   A sale, exchange, or involuntary conversion of property held mainly for sale to customers is not a section 1231 transaction. Irs amended tax return If you will get back all, or nearly all, of your investment in the property by selling it rather than by using it up in your business, it is property held mainly for sale to customers. Irs amended tax return Treatment as ordinary or capital. Irs amended tax return   To determine the treatment of section 1231 gains and losses, combine all of your section 1231 gains and losses for the year. Irs amended tax return If you have a net section 1231 loss, it is an ordinary loss. Irs amended tax return If you have a net section 1231 gain, it is ordinary income up to your nonrecaptured section 1231 losses from previous years, explained next. Irs amended tax return The rest, if any, is long-term capital gain. Irs amended tax return Nonrecaptured section 1231 losses. Irs amended tax return   Your nonrecaptured section 1231 losses are your net section 1231 losses for the previous 5 years that have not been applied against a net section 1231 gain by treating the gain as ordinary income. Irs amended tax return These losses are applied against your net section 1231 gain beginning with the earliest loss in the 5-year period. Irs amended tax return Example. Irs amended tax return In 2013, Ben has a $2,000 net section 1231 gain. Irs amended tax return To figure how much he has to report as ordinary income and long-term capital gain, he must first determine his section 1231 gains and losses from the previous 5-year period. Irs amended tax return From 2008 through 2012 he had the following section 1231 gains and losses. Irs amended tax return Year Amount 2008 -0- 2009 -0- 2010 ($2,500) 2011 -0- 2012 $1,800   Ben uses this information to figure how to report his net section 1231 gain for 2013 as shown below. Irs amended tax return 1) Net section 1231 gain (2013) $2,000 2) Net section 1231 loss (2010) ($2,500)   3) Net section 1231 gain (2012) 1,800   4) Remaining net section 1231 loss from prior 5 years ($700)   5) Gain treated as  ordinary income $700 6) Gain treated as long-term  capital gain $1,300 His remaining net section 1231 loss from 2010 is completely recaptured in 2013. Irs amended tax return Depreciation Recapture If you dispose of depreciable or amortizable property at a gain, you may have to treat all or part of the gain (even if it is otherwise nontaxable) as ordinary income. Irs amended tax return To figure any gain that must be reported as ordinary income, you must keep permanent records of the facts necessary to figure the depreciation or amortization allowed or allowable on your property. Irs amended tax return For more information, see chapter 3 of Publication 544. Irs amended tax return Section 1245 Property A gain on the disposition of section 1245 property is treated as ordinary income to the extent of depreciation allowed or allowable. Irs amended tax return Any recognized gain that is more than the part that is ordinary income is a section 1231 gain. Irs amended tax return See Treatment as ordinary or capital under Section 1231 Gains and Losses , earlier. Irs amended tax return Section 1245 property includes any property that is or has been subject to an allowance for depreciation or amortization and that is any of the following types of property. Irs amended tax return Personal property (either tangible or intangible). Irs amended tax return Other tangible property (except buildings and their structural components) used as any of the following. Irs amended tax return See Buildings and structural components below. Irs amended tax return An integral part of manufacturing, production, or extraction, or of furnishing certain services. Irs amended tax return A research facility in any of the activities in (a). Irs amended tax return A facility in any of the activities in (a) above, for the bulk storage of fungible commodities (discussed later). Irs amended tax return That part of real property (not included in (2)) with an adjusted basis reduced by (but not limited to) the following. Irs amended tax return Amortization of certified pollution control facilities. Irs amended tax return The section 179 expense deduction. Irs amended tax return Deduction for clean-fuel vehicles and certain refueling property. Irs amended tax return Expenditures to remove architectural and transportation barriers to the handicapped and elderly. Irs amended tax return Certain reforestation expenditures (as described under Reforestation Costs in chapter 7. Irs amended tax return Single purpose agricultural (livestock) or horticultural structures. Irs amended tax return Storage facilities (except buildings and their structural components) used in distributing petroleum or any primary product of petroleum. Irs amended tax return Buildings and structural components. Irs amended tax return   Section 1245 property does not include buildings and structural components. Irs amended tax return The term building includes a house, barn, warehouse, or garage. Irs amended tax return The term structural component includes walls, floors, windows, doors, central air conditioning systems, light fixtures, etc. Irs amended tax return   Do not treat a structure that is essentially machinery or equipment as a building or structural component. Irs amended tax return Also, do not treat a structure that houses property used as an integral part of an activity as a building or structural component if the structure's use is so closely related to the property's use that the structure can be expected to be replaced when the property it initially houses is replaced. Irs amended tax return   The fact that the structure is specially designed to withstand the stress and other demands of the property and cannot be used economically for other purposes indicates it is closely related to the use of the property it houses. Irs amended tax return Structures such as oil and gas storage tanks, grain storage bins, and silos are not treated as buildings, but as section 1245 property. Irs amended tax return Facility for bulk storage of fungible commodities. Irs amended tax return   This is a facility used mainly for the bulk storage of fungible commodities. Irs amended tax return Bulk storage means storage of a commodity in a large mass before it is used. Irs amended tax return For example, if a facility is used to store oranges that have been sorted and boxed, it is not used for bulk storage. Irs amended tax return To be fungible, a commodity must be such that one part may be used in place of another. Irs amended tax return Gain Treated as Ordinary Income The gain treated as ordinary income on the sale, exchange, or involuntary conversion of section 1245 property, including a sale and leaseback transaction, is the lesser of the following amounts. Irs amended tax return The depreciation (which includes any section 179 deduction claimed) and amortization allowed or allowable on the property. Irs amended tax return The gain realized on the disposition (the amount realized from the disposition minus the adjusted basis of the property). Irs amended tax return For any other disposition of section 1245 property, ordinary income is the lesser of (1) above or the amount by which its fair market value (FMV) is more than its adjusted basis. Irs amended tax return For details, see chapter 3 of Publication 544. Irs amended tax return Use Part III of Form 4797 to figure the ordinary income part of the gain. Irs amended tax return Depreciation claimed on other property or claimed by other taxpayers. Irs amended tax return   Depreciation and amortization include the amounts you claimed on the section 1245 property as well as the following depreciation and amortization amounts. Irs amended tax return Amounts you claimed on property you exchanged for, or converted to, your section 1245 property in a like-kind exchange or involuntary conversion. Irs amended tax return For details on exchanges of property that are not taxable, see Like-Kind Exchanges in chapter 8. Irs amended tax return Amounts a previous owner of the section 1245 property claimed if your basis is determined with reference to that person's adjusted basis (for example, the donor's depreciation deductions on property you received as a gift and part of the transfer is a sale or exchange). Irs amended tax return Example. Irs amended tax return Jeff Free paid $120,000 for a tractor in 2012. Irs amended tax return On February 23, 2013, he traded it for a chopper and paid an additional $30,000. Irs amended tax return To figure his depreciation deduction on the chopper for the current year, Jeff continues to use the basis of the tractor as he would have before the trade. Irs amended tax return Jeff can also depreciate the additional $30,000 for the chopper. Irs amended tax return Depreciation and amortization. Irs amended tax return   Depreciation and amortization deductions that must be recaptured as ordinary income include (but are not limited to) the following items. Irs amended tax return See Depreciation Recapture in chapter 3 of Publication 544 for more details. Irs amended tax return Ordinary depreciation deductions. Irs amended tax return Section 179 deduction (see chapter 7). Irs amended tax return Any special depreciation allowance. Irs amended tax return Amortization deductions for all the following costs. Irs amended tax return Acquiring a lease. Irs amended tax return Lessee improvements. Irs amended tax return Pollution control facilities. Irs amended tax return Reforestation expenses. Irs amended tax return Section 197 intangibles. Irs amended tax return Qualified disaster expenses. Irs amended tax return Franchises, trademarks, and trade names acquired before August 11, 1993. Irs amended tax return Example. Irs amended tax return You file your returns on a calendar year basis. Irs amended tax return In February 2011, you bought and placed in service for 100% use in your farming business a light-duty truck (5-year property) that cost $10,000. Irs amended tax return You used the half-year convention and your MACRS deductions for the truck were $1,500 in 2011 and $2,550 in 2012. Irs amended tax return You did not claim the section 179 expense deduction for the truck. Irs amended tax return You sold it in May 2013 for $7,000. Irs amended tax return The MACRS deduction in 2013, the year of sale, is $893 (½ of $1,785). Irs amended tax return Figure the gain treated as ordinary income as follows. Irs amended tax return 1) Amount realized $7,000 2) Cost (February 2011) $10,000   3) Depreciation allowed or allowable (MACRS deductions: $1,500 + $2,550 + $893) 4,943   4) Adjusted basis (subtract line 3 from line 2) $5,057 5) Gain realized (subtract line 4 from line 1) 1,943 6) Gain treated as ordinary income (lesser of line 3 or line 5) $1,943 Depreciation allowed or allowable. Irs amended tax return   You generally use the greater of the depreciation allowed or allowable when figuring the part of gain to report as ordinary income. Irs amended tax return If, in prior years, you have consistently taken proper deductions under one method, the amount allowed for your prior years will not be increased even though a greater amount would have been allowed under another proper method. Irs amended tax return If you did not take any deduction at all for depreciation, your adjustments to basis for depreciation allowable are figured by using the straight line method. Irs amended tax return This treatment applies only when figuring what part of the gain is treated as ordinary income under the rules for section 1245 depreciation recapture. Irs amended tax return Disposition of plants and animals. Irs amended tax return   If you elect not to use the uniform capitalization rules (see chapter 6), you must treat any plant you produce as section 1245 property. Irs amended tax return If you have a gain on the property's disposition, you must recapture the pre-productive expenses you would have capitalized if you had not made the election by treating the gain, up to the amount of these expenses, as ordinary income. Irs amended tax return For section 1231 transactions, show these expenses as depreciation on Form 4797, Part III, line 22. Irs amended tax return For plant sales that are reported on Schedule F (1040), Profit or Loss From Farming, this recapture rule does not change the reporting of income because the gain is already ordinary income. Irs amended tax return You can use the farm-price method or the unit-livestock-price method discussed in  chapter 2 to figure these expenses. Irs amended tax return Example. Irs amended tax return Janet Maple sold her apple orchard in 2013 for $80,000. Irs amended tax return Her adjusted basis at the time of sale was $60,000. Irs amended tax return She bought the orchard in 2006, but the trees did not produce a crop until 2009. Irs amended tax return Her pre-productive expenses were $6,000. Irs amended tax return She elected not to use the uniform capitalization rules. Irs amended tax return Janet must treat $6,000 of the gain as ordinary income. Irs amended tax return Section 1250 Property Section 1250 property includes all real property subject to an allowance for depreciation that is not and never has been section 1245 property. Irs amended tax return It includes buildings and structural components that are not section 1245 property (discussed earlier). Irs amended tax return It includes a leasehold of land or section 1250 property subject to an allowance for depreciation. Irs amended tax return A fee simple interest in land is not section 1250 property because, like land, it is not depreciable. Irs amended tax return Gain on the disposition of section 1250 property is treated as ordinary income to the extent of additional depreciation allowed or allowable. Irs amended tax return To determine the additional depreciation on section 1250 property, see Depreciation Recapture in chapter 3 of Publication 544. Irs amended tax return You will not have additional depreciation if any of the following apply to the property disposed of. Irs amended tax return You figured depreciation for the property using the straight line method or any other method that does not result in depreciation that is more than the amount figured by the straight line method and you have held the property longer than 1 year. Irs amended tax return You chose the alternate ACRS (straight line) method for the property, which was a type of 15-, 18-, or 19-year real property covered by the section 1250 rules. Irs amended tax return The property was nonresidential real property placed in service after 1986 (or after July 31, 1986, if the choice to use MACRS was made) and you held it longer than 1 year. Irs amended tax return These properties are depreciated using the straight line method. Irs amended tax return Installment Sale If you report the sale of property under the installment method, any depreciation recapture under section 1245 or 1250 is taxable as ordinary income in the year of sale. Irs amended tax return This applies even if no payments are received in that year. Irs amended tax return If the gain is more than the depreciation recapture income, report the rest of the gain using the rules of the installment method. Irs amended tax return For this purpose, include the recapture income in your installment sale basis to determine your gross profit on the installment sale. Irs amended tax return If you dispose of more than one asset in a single transaction, you must separately figure the gain on each asset so that it may be properly reported. Irs amended tax return To do this, allocate the selling price and the payments you receive in the year of sale to each asset. Irs amended tax return Report any depreciation recapture income in the year of sale before using the installment method for any remaining gain. Irs amended tax return For more information on installment sales, see chapter 10. Irs amended tax return Other Dispositions Chapter 3 of Publication 544 discusses the tax treatment of the following transfers of depreciable property. Irs amended tax return By gift. Irs amended tax return At death. Irs amended tax return In like-kind exchanges. Irs amended tax return In involuntary conversions. Irs amended tax return Publication 544 also explains how to handle a single transaction involving multiple properties. Irs amended tax return Other Gains This section discusses gain on the disposition of farmland for which you were allowed either of the following. Irs amended tax return Deductions for soil and water conservation expenditures (section 1252 property). Irs amended tax return Exclusions from income for certain cost sharing payments (section 1255 property). Irs amended tax return Section 1252 property. Irs amended tax return   If you disposed of farmland you held more than 1 year and less than 10 years at a gain and you were allowed deductions for soil and water conservation expenses for the land, as discussed in chapter 5, you must treat part of the gain as ordinary income and treat the balance as section 1231 gain. Irs amended tax return Exceptions. Irs amended tax return   Do not treat gain on the following transactions as gain on section 1252 property. Irs amended tax return Disposition of farmland by gift. Irs amended tax return Transfer of farm property at death (except for income in respect of a decedent). Irs amended tax return For more information, see Regulations section 1. Irs amended tax return 1252-2. Irs amended tax return Amount to report as ordinary income. Irs amended tax return   You report as ordinary income the lesser of the following amounts. Irs amended tax return Your gain (determined by subtracting the adjusted basis from the amount realized from a sale, exchange, or involuntary conversion, or the FMV for all other dispositions). Irs amended tax return The total deductions allowed for soil and water conservation expenses multiplied by the applicable percentage, discussed next. Irs amended tax return Applicable percentage. Irs amended tax return   The applicable percentage is based on the length of time you held the land. Irs amended tax return If you dispose of your farmland within 5 years after the date you acquired it, the percentage is 100%. Irs amended tax return If you dispose of the land within the 6th through 9th year after you acquired it, the applicable percentage is reduced by 20% a year for each year or part of a year you hold the land after the 5th year. Irs amended tax return If you dispose of the land 10 or more years after you acquired it, the percentage is 0%, and the entire gain is a section 1231 gain. Irs amended tax return Example. Irs amended tax return You acquired farmland on January 19, 2005. Irs amended tax return On October 3, 2013, you sold the land at a $30,000 gain. Irs amended tax return Between January 1 and October 3, 2013, you incur soil and water conservation expenditures of $15,000 for the land that are fully deductible in 2013. Irs amended tax return The applicable percentage is 40% since you sold the land within the 8th year after you acquired it. Irs amended tax return You treat $6,000 (40% of $15,000) of the $30,000 gain as ordinary income and the $24,000 balance as a section 1231 gain. Irs amended tax return Section 1255 property. Irs amended tax return   If you receive certain cost-sharing payments on property and you exclude those payments from income (as discussed in chapter 3), you may have to treat part of any gain as ordinary income and treat the balance as a section 1231 gain. Irs amended tax return If you chose not to exclude these payments, you will not have to recognize ordinary income under this provision. Irs amended tax return Amount to report as ordinary income. Irs amended tax return   You report as ordinary income the lesser of the following amounts. Irs amended tax return The applicable percentage of the total excluded cost-sharing payments. Irs amended tax return The gain on the disposition of the property. Irs amended tax return You do not report ordinary income under this rule to the extent the gain is recognized as ordinary income under sections 1231 through 1254, 1256, and 1257. Irs amended tax return However, if applicable, gain reported under this rule must be reported regardless of any contrary provisions (including nonrecognition provisions) under any other section. Irs amended tax return Applicable percentage. Irs amended tax return   The applicable percentage of the excluded cost-sharing payments to be reported as ordinary income is based on the length of time you hold the property after receiving the payments. Irs amended tax return If the property is held less than 10 years after you receive the payments, the percentage is 100%. Irs amended tax return After 10 years, the percentage is reduced by 10% a year, or part of a year, until the rate is 0%. Irs amended tax return Form 4797, Part III. Irs amended tax return   Use Form 4797, Part III, to figure the ordinary income part of a gain from the sale, exchange, or involuntary conversion of section 1252 property and section 1255 property. Irs amended tax return Prev  Up  Next   Home   More Online Publications