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Late Tax Filing

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Late Tax Filing

Late tax filing Índice Pérdidas en ciertas actividades madereras, retroactivación a 5 años, Traspaso a 5 años de NOL por ciertas pérdidas en actividades madereras. Late tax filing A Actividad maderera: Costos de reforestación, Costos de Reforestación Retroactivación a 5 años de NOL, Costos de Reforestación Apógrafo de la declaración de impuestos, solicitud de, Solicitud de apógrafo de la declaración de impuestos. Late tax filing Ayuda: Ayuda especial del IRS, Cómo Obtener Ayuda con los Impuestos Cibersitio del IRS, Cómo Obtener Ayuda con los Impuestos Cómo obtener, Cómo Obtener Ayuda con los Impuestos Teléfono, Cómo Obtener Ayuda con los Impuestos C Cancelación de endeudamiento, Exclusión de Ciertas Cancelaciones de Endeudamiento por Motivos del Huracán Katrina Cibersitio del IRS, Servicios gratis con los impuestos. Late tax filing Contribuciones caritativas, Suspensión Temporal de los Límites sobre las Contribuciones Caritativas Contribuyentes afectados, Contribuyentes afectados. Late tax filing Conversión involuntaria (ver Plazo de reposición para que las ganancias no sean reconocidas) Copia de su declaración de impuestos, solicitud de, Solicitud de copia de la declaración de impuestos. Late tax filing Costos de demolición, Costos de Demolición y Limpieza Costos de limpieza, Costos de Demolición y Limpieza Costos de reforestación, Costos de Reforestación Crédito Hope (ver Créditos por enseñanza superior) Crédito perpétuo (vitalicio) por aprendizaje (ver Créditos por enseñanza superior) Crédito por ingreso del trabajo, Crédito por Ingreso del Trabajo y Crédito Tributario por Hijos Crédito por la retención de empleados, Créditos por la Retención de Empleados Crédito por oportunidad de trabajo, Crédito por Oportunidad de Trabajo Crédito por vivienda para afectados por el huracán Katrina, Crédito por Vivienda del Huracán Katrina Crédito tributario por hijos, Crédito por Ingreso del Trabajo y Crédito Tributario por Hijos Crédito tributario por rehabilitación, Aumento del Crédito Tributario por Rehabilitación Créditos por enseñanza superior, Créditos Tributarios por Enseñanza Superior Créditos: Enseñanza superior, Créditos Tributarios por Enseñanza Superior Impuesto por rehabilitación, Aumento del Crédito Tributario por Rehabilitación Ingreso del trabajo, Crédito por Ingreso del Trabajo y Crédito Tributario por Hijos Oportunidad de trabajo, Crédito por Oportunidad de Trabajo Retención de empleados , Créditos por la Retención de Empleados Tributario por hijos, Crédito por Ingreso del Trabajo y Crédito Tributario por Hijos Vivienda para afectados por el huracán Katrina, Crédito por Vivienda del Huracán Katrina Cuentas IRA y otros planes de jubilación, Las Cuentas IRA y Otros Planes de Jubilación D Declaración de impuestos: Solicitud de apógrafo, Solicitud de apógrafo de la declaración de impuestos. Late tax filing Solicitud de una copia, Solicitud de copia de la declaración de impuestos. Late tax filing Deducción caritativa: Inventario de alimentos, Deducción Caritativa por Contribuciones de Inventario de Alimentos Inventario de libros, Deducción Caritativa por Contribuciones de Inventarios de Libros a Escuelas Públicas Deducción conforme a la sección 179, Mayor Deducción Conforme a la Sección 179 Defensor del contribuyente, Poniéndose en contacto con el Defensor del Contribuyente. Late tax filing Depreciación : Asignación especial , Asignación (Descuento) Especial de Depreciación Depreciación: Propiedad calificada de la Zona GO, Propiedad calificada de la Zona GO. Late tax filing Distribución calificada por motivos del huracán, Distribución calificada por motivos del huracán. Late tax filing Distribuciones: Compra o construcción de una vivienda, Reintegro de Distribuciones Calificadas por la Compra o Construcción de un Hogar Principal Huracán calificado, Distribución calificada por motivos del huracán. Late tax filing Reintegro de, Reintegro de Distribuciones Calificadas por Motivos de un Huracán Tributación de, Tributación de Distribuciones Calificadas por Motivos de un Huracán E Exención adicional por provisión de vivienda, Exenciones Adicionales por la Provisión de Vivienda para Personas que Tuvieron que Abandonar sus Hogares por Causa del Huracán Katrina F Fechas de vencimiento, prorrogadas, Prórrogas de las Fechas de Vencimiento Tributarias I Internet: Cibersitio del IRS, Servicios gratis con los impuestos. Late tax filing Inventario de alimentos, deducción caritativa por , Deducción Caritativa por Contribuciones de Inventario de Alimentos Inventario de libros, deducción caritativa por, Deducción Caritativa por Contribuciones de Inventarios de Libros a Escuelas Públicas P Pérdida calificada en una Zona GO, Pérdida calificada en una Zona GO. Late tax filing Pérdidas netas de operación , Pérdidas Netas de Operación Pérdidas por hechos fortuitos y robos, Pérdidas por Hechos Fortuitos y Robos Pérdidas por robo, Pérdidas por Hechos Fortuitos y Robos Plan de jubilación elegible, Plan de jubilación elegible. Late tax filing Planes de jubilación, Las Cuentas IRA y Otros Planes de Jubilación Plazo de reposición para que las ganancias no sean reconocidas, Período de Reposición para que las Ganancias no sean Reconocidas R Reembolsos de millas, voluntarios que prestaron servicios con fines caritativos, Reembolsos de Millas a Voluntarios que Prestaron Servicios con Fines Caritativos Reubicación temporal, Alivio Tributario para la Reubicación Temporal S Servicio de Impuestos Internos (IRS): Cibersitio del, Servicios gratis con los impuestos. Late tax filing Subsidio hipotecario federal, recuperación, Recuperación del Subsidio Hipotecario Federal T Tasa estándar por milla, uso con fines caritativos, Tasa Estándar por Milla para el Uso de Vehículos para Fines Caritativos Z Zona central del desastre, Zona de Oportunidad del Golfo (GO) (Zona Central del Desastre) Zona de desastre con cobertura: Katrina, Zona de Desastre del Huracán Katrina con Cobertura Rita, Zona de Desastre del Huracán Rita (Zona de Desastre de Rita con Cobertura) Wilma, Zona de Desastre del Huracán Wilma con Cobertura Zona de desastre: Huracán Katrina, Zona de Desastre del Huracán Katrina Huracán Rita, Zona de Desastre del Huracán Rita (Zona de Desastre de Rita con Cobertura) Huracán Wilma, Zona de Desastre del Huracán Wilma Zona de Oportunidad del Golfo (GO), Zona de Oportunidad del Golfo (GO) (Zona Central del Desastre) Zona GO de Rita, Zona GO de Rita Zona GO de Wilma, Zona GO de Wilma Anterior  Subir     Inicio   More Online Publications
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Contact My Local Office in Delaware

Face-to-face Tax Help

IRS Taxpayer Assistance Centers (TACs) are your source for personal tax help when you believe your tax issue can only be handled face-to-face. No appointment is necessary.

Keep in mind, many questions can be resolved online without waiting in line. Through IRS.gov you can:
• Set up a payment plan.
• Get a transcript of your tax return.
• Make a payment.
• Check on your refund.
• Find answers to many of your tax questions.

We are now referring all requests for tax return preparation services to other available resources. You can take advantage of free tax preparation through Free File, Free File Fillable Forms or through a volunteer site in your community. To find the nearest volunteer site location or to get more information about Free File, go to the top of the page and enter “Free Tax Help” in the Search box.

If you have a tax account issues and feel that it requires talking with someone face-to-face, visit your local TAC.

Caution:  Many of our offices are located in Federal Office Buildings. These buildings may not allow visitors to bring in cell phones with camera capabilities.

Multilingual assistance is available in every office. Hours of operation are subject to change.

Before visiting your local office click on "Services Provided" in the chart below to see what services are available. Services are limited and not all services are available at every TAC office and may vary from site to site. You can get these services on a walk-in basis.

City  Street Address  Days/Hours of Service  Telephone* 
Dover  611 S. Dupont Hwy. 
Dover, DE 19901 

Monday-Friday - 8:30 a.m.- 4:30 p.m.

 

Services Provided

(302) 678-2784 
Georgetown  21309 Berlin Rd. Unit 13
Georgetown, DE 19947 

Monday-Friday - 8:30 a.m.- 4:30 
(Closed for lunch 12:30 p.m.- 1:30 p.m.)

 

**This office will be open until 6:00 p.m. on 4/14 & 4/15**

 

Services Provided

(301) 695-7615 
Wilmington  844 King St.
Wilmington, DE 19801 

Monday-Friday - 8:30 a.m.- 4:30 p.m.

 

Services Provided

(302) 573-6343 

* Note: The phone numbers in the chart above are not toll-free for all locations. When you call, you will reach a recorded business message with information about office hours, locations and services provided in that office. If  face-to-face assistance is not a priority for you, you may also get help with IRS letters or resolve tax account issues by phone, toll free at 1-800-829-1040 (individuals) or 1-800-829-4933 (businesses).

For information on where to file your tax return please see Where to File Addresses.

The Taxpayer Advocate Service: Call 302-286-1654 in Wilmington or 1-877-777-4778 elsewhere, or see  Publication 1546, The Taxpayer Advocate Service of the IRS. For further information, see  Tax Topic 104.

Partnerships

IRS and organizations all over the country are partnering to assist taxpayers. Through these partnerships, organizations are also achieving their own goals. These mutually beneficial partnerships are strengthening outreach efforts and bringing education and assistance to millions.

For more information about these programs for individuals and families, contact the Stakeholder Partnerships, Education and Communication Office at:

Internal Revenue Service
Silver Side Corp Ctr.
409 Silverside Rd
Wilmington DE 19809

For more information about these programs for businesses, your local Stakeholder Liaison office establishes relationships with organizations representing small business and self-employed taxpayers. They provide information about the policies, practices and procedures the IRS uses to ensure compliance with the tax laws. To establish a relationship with us, use this list to find a contact in your state:

Stakeholder Liaison (SL) Phone Numbers for Organizations Representing Small Businesses and Self-employed Taxpayers.

Page Last Reviewed or Updated: 28-Mar-2014

The Late Tax Filing

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