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Need To File 2011 Taxes Online

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Need To File 2011 Taxes Online

Need to file 2011 taxes online Publication 525 - Introductory Material Table of Contents Future Developments What's New Reminders IntroductionAssignment of income. Need to file 2011 taxes online Ordering forms and publications. Need to file 2011 taxes online Tax questions. Need to file 2011 taxes online Useful Items - You may want to see: Future Developments For the latest information about developments related to Publication 525, such as legislation enacted after it was published, go to www. Need to file 2011 taxes online irs. Need to file 2011 taxes online gov/pub525. Need to file 2011 taxes online What's New Health flexible spending arrangements (health FSAs) under cafeteria plans. Need to file 2011 taxes online  For plan years beginning after 2012, health FSAs are subject to a $2,500 limit on salary reduction contributions. Need to file 2011 taxes online For plan years beginning after 2013, the $2,500 limit is subject to an inflation adjustment. Need to file 2011 taxes online Itemized deduction for medical expenses. Need to file 2011 taxes online  Beginning in 2013, an itemized deduction is generally allowed for uncompensated medical expenses that exceed 10% of adjusted gross income (AGI). Need to file 2011 taxes online If an individual or an individual’s spouse was born before January 2, 1949, the deduction is allowed for expenses that exceed 7. Need to file 2011 taxes online 5% of AGI. Need to file 2011 taxes online Additional Medicare Tax. Need to file 2011 taxes online  Beginning in 2013, a 0. Need to file 2011 taxes online 9% Additional Medicare Tax applies to Medicare wages, railroad retirement (RRTA) compensation, and self-employment income that are more than: $125,000 if married filing separately, $250,000 if married filing jointly, or $200,000 if single, head of household, or qualifying widow(er). Need to file 2011 taxes online For more information, see Form 8959 and its instructions. Need to file 2011 taxes online Net Investment Income Tax (NIIT). Need to file 2011 taxes online  Beginning in 2013, the NIIT applies at a rate of 3. Need to file 2011 taxes online 8% to certain net investment income of individuals, estates and trusts that have income above the threshold amounts. Need to file 2011 taxes online Individuals will owe the tax if they have net investment income and also have modified adjusted gross income over the following thresholds for their filing status: Married filing jointly, $250,000; Married filing separately, $125,000; Single, $200,000; Head of household (with qualifying person), $200,000; Qualifying widow(er) with dependent child, $250,000. Need to file 2011 taxes online For more information, see Form 8960 and its instructions. Need to file 2011 taxes online Reminders Terrorist attacks. Need to file 2011 taxes online  You can exclude from income certain disaster assistance, disability, and death payments received as a result of a terrorist or military action. Need to file 2011 taxes online For more information, see Publication 3920, Tax Relief for Victims of Terrorist Attacks. Need to file 2011 taxes online Gulf oil spill. Need to file 2011 taxes online  You are required to include in your gross income payments you received for lost wages, lost business income, or lost profits. Need to file 2011 taxes online See Gulf oil spill under Other Income, later. Need to file 2011 taxes online Qualified settlement income. Need to file 2011 taxes online . Need to file 2011 taxes online  If you are a qualified taxpayer, you can contribute all or part of your qualified settlement income, up to $100,000, to an eligible retirement plan, including an IRA. Need to file 2011 taxes online Contributions to eligible retirement plans, other than a Roth IRA or a designated Roth contribution, reduce the qualified settlement income that you must include in income. Need to file 2011 taxes online See Exxon Valdez settlement income under Other Income, later. Need to file 2011 taxes online Foreign income. Need to file 2011 taxes online  If you are a U. Need to file 2011 taxes online S. Need to file 2011 taxes online citizen or resident alien, you must report income from sources outside the United States (foreign income) on your tax return unless it is exempt by U. Need to file 2011 taxes online S. Need to file 2011 taxes online law. Need to file 2011 taxes online This is true whether you reside inside or outside the United States and whether or not you receive a Form W-2, Wage and Tax Statement, or Form 1099 from the foreign payer. Need to file 2011 taxes online This applies to earned income (such as wages and tips) as well as unearned income (such as interest, dividends, capital gains, pensions, rents, and royalties). Need to file 2011 taxes online If you reside outside the United States, you may be able to exclude part or all of your foreign source earned income. Need to file 2011 taxes online For details, see Publication 54, Tax Guide for U. Need to file 2011 taxes online S. Need to file 2011 taxes online Citizens and Resident Aliens Abroad. Need to file 2011 taxes online Disaster mitigation payments. Need to file 2011 taxes online . Need to file 2011 taxes online  You can exclude from income grants you use to mitigate (reduce the severity of) potential damage from future natural disasters that are paid to you through state and local governments. Need to file 2011 taxes online For more information, see Disaster mitigation payments under Welfare and Other Public Assistance Benefits, later. Need to file 2011 taxes online Qualified joint venture. Need to file 2011 taxes online  A qualified joint venture conducted by you and your spouse may not be treated as a partnership if you file a joint return for the tax year. Need to file 2011 taxes online See Partnership Income under Business and Investment Income, later. Need to file 2011 taxes online Photographs of missing children. Need to file 2011 taxes online  The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. Need to file 2011 taxes online Photographs of missing children selected by the Center may appear in this publication on pages that otherwise would be blank. Need to file 2011 taxes online You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child. Need to file 2011 taxes online Introduction You can receive income in the form of money, property, or services. Need to file 2011 taxes online This publication discusses many kinds of income and explains whether they are taxable or nontaxable. Need to file 2011 taxes online It includes discussions on employee wages and fringe benefits, and income from bartering, partnerships, S corporations, and royalties. Need to file 2011 taxes online It also includes information on disability pensions, life insurance proceeds, and welfare and other public assistance benefits. Need to file 2011 taxes online Check the index for the location of a specific subject. Need to file 2011 taxes online In most cases, an amount included in your income is taxable unless it is specifically exempted by law. Need to file 2011 taxes online Income that is taxable must be reported on your return and is subject to tax. Need to file 2011 taxes online Income that is nontaxable may have to be shown on your tax return but is not taxable. Need to file 2011 taxes online Constructively received income. Need to file 2011 taxes online   You are generally taxed on income that is available to you, regardless of whether it is actually in your possession. Need to file 2011 taxes online    A valid check that you received or that was made available to you before the end of the tax year is considered income constructively received in that year, even if you do not cash the check or deposit it to your account until the next year. Need to file 2011 taxes online For example, if the postal service tries to deliver a check to you on the last day of the tax year but you are not at home to receive it, you must include the amount in your income for that tax year. Need to file 2011 taxes online If the check was mailed so that it could not possibly reach you until after the end of the tax year, and you otherwise could not get the funds before the end of the year, you include the amount in your income for the next tax year. Need to file 2011 taxes online Assignment of income. Need to file 2011 taxes online   Income received by an agent for you is income you constructively received in the year the agent received it. Need to file 2011 taxes online If you agree by contract that a third party is to receive income for you, you must include the amount in your income when the third party receives it. Need to file 2011 taxes online Example. Need to file 2011 taxes online You and your employer agree that part of your salary is to be paid directly to one of your creditors. Need to file 2011 taxes online You must include that amount in your income when your creditor receives it. Need to file 2011 taxes online Prepaid income. Need to file 2011 taxes online   In most cases, prepaid income, such as compensation for future services, is included in your income in the year you receive it. Need to file 2011 taxes online However, if you use an accrual method of accounting, you can defer prepaid income you receive for services to be performed before the end of the next tax year. Need to file 2011 taxes online In this case, you include the payment in your income as you earn it by performing the services. Need to file 2011 taxes online Comments and suggestions. Need to file 2011 taxes online   We welcome your comments about this publication and your suggestions for future editions. Need to file 2011 taxes online   You can write to us at the following address: Internal Revenue Service Tax Forms and Publications Division 1111 Constitution Ave. Need to file 2011 taxes online NW, IR-6526 Washington, DC 20224   We respond to many letters by telephone. Need to file 2011 taxes online Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence. Need to file 2011 taxes online   You can send your comments from www. Need to file 2011 taxes online irs. Need to file 2011 taxes online gov/formspubs/. Need to file 2011 taxes online Click on “More Information” and then on “Comment on Tax Forms and Publications. Need to file 2011 taxes online ”   Although we cannot respond individually to each comment received, we do appreciate your feedback and will consider your comments as we revise our tax products. Need to file 2011 taxes online Ordering forms and publications. Need to file 2011 taxes online   Visit www. Need to file 2011 taxes online irs. Need to file 2011 taxes online gov/formspubs/ to download forms and publications, call 1-800-TAX-FORM (1-800-829-3676), or write to the address below and receive a response within 10 days after your request is received. Need to file 2011 taxes online Internal Revenue Service 1201 N. Need to file 2011 taxes online Mitsubishi Motorway Bloomington, IL 61705-6613 Tax questions. Need to file 2011 taxes online   If you have a tax question, check the information available on IRS. Need to file 2011 taxes online gov or call 1-800-829-1040. Need to file 2011 taxes online We cannot answer tax questions sent to either of the above addresses. Need to file 2011 taxes online Useful Items - You may want to see: Publication 334 Tax Guide for Small Business 523 Selling Your Home 527 Residential Rental Property 541 Partnerships 544 Sales and Other Dispositions of Assets 550 Investment Income and Expenses 559 Survivors, Executors, and Administrators 575 Pension and Annuity Income 915 Social Security and Equivalent Railroad Retirement Benefits 970 Tax Benefits for Education 4681 Canceled Debts, Foreclosures, Repossessions, and Abandonments Form (and Instructions) 1040 U. Need to file 2011 taxes online S. Need to file 2011 taxes online Individual Income Tax Return 1040A U. Need to file 2011 taxes online S. Need to file 2011 taxes online Individual Income Tax Return 1040EZ Income Tax Return for Single and Joint Filers With No Dependents 1040NR U. Need to file 2011 taxes online S. Need to file 2011 taxes online Nonresident Alien Income Tax Return 1099-R Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. Need to file 2011 taxes online W-2 Wage and Tax Statement  See How To Get Tax Help , near the end of this publication, for information about getting these publications. Need to file 2011 taxes online Prev  Up  Next   Home   More Online Publications
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The Need To File 2011 Taxes Online

Need to file 2011 taxes online 9. Need to file 2011 taxes online   Depletion Table of Contents Introduction Topics - This chapter discusses: Who Can Claim Depletion? Mineral PropertyCost Depletion Percentage Depletion Oil and Gas Wells Mines and Geothermal Deposits Lessor's Gross Income TimberTimber units. Need to file 2011 taxes online Depletion unit. Need to file 2011 taxes online Introduction Depletion is the using up of natural resources by mining, drilling, quarrying stone, or cutting timber. Need to file 2011 taxes online The depletion deduction allows an owner or operator to account for the reduction of a product's reserves. Need to file 2011 taxes online There are two ways of figuring depletion: cost depletion and percentage depletion. Need to file 2011 taxes online For mineral property, you generally must use the method that gives you the larger deduction. Need to file 2011 taxes online For standing timber, you must use cost depletion. Need to file 2011 taxes online Topics - This chapter discusses: Who can claim depletion Mineral property Timber Who Can Claim Depletion? If you have an economic interest in mineral property or standing timber, you can take a deduction for depletion. Need to file 2011 taxes online More than one person can have an economic interest in the same mineral deposit or timber. Need to file 2011 taxes online In the case of leased property, the depletion deduction is divided between the lessor and the lessee. Need to file 2011 taxes online You have an economic interest if both the following apply. Need to file 2011 taxes online You have acquired by investment any interest in mineral deposits or standing timber. Need to file 2011 taxes online You have a legal right to income from the extraction of the mineral or cutting of the timber to which you must look for a return of your capital investment. Need to file 2011 taxes online A contractual relationship that allows you an economic or monetary advantage from products of the mineral deposit or standing timber is not, in itself, an economic interest. Need to file 2011 taxes online A production payment carved out of, or retained on the sale of, mineral property is not an economic interest. Need to file 2011 taxes online Individuals, corporations, estates, and trusts who claim depletion deductions may be liable for alternative minimum tax. Need to file 2011 taxes online Basis adjustment for depletion. Need to file 2011 taxes online   You must reduce the basis of your property by the depletion allowed or allowable, whichever is greater. Need to file 2011 taxes online Mineral Property Mineral property includes oil and gas wells, mines, and other natural deposits (including geothermal deposits). Need to file 2011 taxes online For this purpose, the term “property” means each separate interest you own in each mineral deposit in each separate tract or parcel of land. Need to file 2011 taxes online You can treat two or more separate interests as one property or as separate properties. Need to file 2011 taxes online See section 614 of the Internal Revenue Code and the related regulations for rules on how to treat separate mineral interests. Need to file 2011 taxes online There are two ways of figuring depletion on mineral property. Need to file 2011 taxes online Cost depletion. Need to file 2011 taxes online Percentage depletion. Need to file 2011 taxes online Generally, you must use the method that gives you the larger deduction. Need to file 2011 taxes online However, unless you are an independent producer or royalty owner, you generally cannot use percentage depletion for oil and gas wells. Need to file 2011 taxes online See Oil and Gas Wells , later. Need to file 2011 taxes online Cost Depletion To figure cost depletion you must first determine the following. Need to file 2011 taxes online The property's basis for depletion. Need to file 2011 taxes online The total recoverable units of mineral in the property's natural deposit. Need to file 2011 taxes online The number of units of mineral sold during the tax year. Need to file 2011 taxes online Basis for depletion. Need to file 2011 taxes online   To figure the property's basis for depletion, subtract all the following from the property's adjusted basis. Need to file 2011 taxes online Amounts recoverable through: Depreciation deductions, Deferred expenses (including deferred exploration and development costs), and Deductions other than depletion. Need to file 2011 taxes online The residual value of land and improvements at the end of operations. Need to file 2011 taxes online The cost or value of land acquired for purposes other than mineral production. Need to file 2011 taxes online Adjusted basis. Need to file 2011 taxes online   The adjusted basis of your property is your original cost or other basis, plus certain additions and improvements, and minus certain deductions such as depletion allowed or allowable and casualty losses. Need to file 2011 taxes online Your adjusted basis can never be less than zero. Need to file 2011 taxes online See Publication 551, Basis of Assets, for more information on adjusted basis. Need to file 2011 taxes online Total recoverable units. Need to file 2011 taxes online   The total recoverable units is the sum of the following. Need to file 2011 taxes online The number of units of mineral remaining at the end of the year (including units recovered but not sold). Need to file 2011 taxes online The number of units of mineral sold during the tax year (determined under your method of accounting, as explained next). Need to file 2011 taxes online   You must estimate or determine recoverable units (tons, pounds, ounces, barrels, thousands of cubic feet, or other measure) of mineral products using the current industry method and the most accurate and reliable information you can obtain. Need to file 2011 taxes online You must include ores and minerals that are developed, in sight, blocked out, or assured. Need to file 2011 taxes online You must also include probable or prospective ores or minerals that are believed to exist based on good evidence. Need to file 2011 taxes online But see Elective safe harbor for owners of oil and gas property , later. Need to file 2011 taxes online Number of units sold. Need to file 2011 taxes online   You determine the number of units sold during the tax year based on your method of accounting. Need to file 2011 taxes online Use the following table to make this determination. Need to file 2011 taxes online    IF you  use . Need to file 2011 taxes online . Need to file 2011 taxes online . Need to file 2011 taxes online THEN the units sold during the year are . Need to file 2011 taxes online . Need to file 2011 taxes online . Need to file 2011 taxes online The cash method of accounting The units sold for which you receive payment during the tax year (regardless of the year of sale). Need to file 2011 taxes online An accrual method of accounting The units sold based on your inventories and method of accounting for inventory. Need to file 2011 taxes online   The number of units sold during the tax year does not include any for which depletion deductions were allowed or allowable in earlier years. Need to file 2011 taxes online Figuring the cost depletion deduction. Need to file 2011 taxes online   Once you have figured your property's basis for depletion, the total recoverable units, and the number of units sold during the tax year, you can figure your cost depletion deduction by taking the following steps. Need to file 2011 taxes online Step Action Result 1 Divide your property's basis for depletion by total recoverable units. Need to file 2011 taxes online Rate per unit. Need to file 2011 taxes online 2 Multiply the rate per unit by units sold during the tax year. Need to file 2011 taxes online Cost depletion deduction. Need to file 2011 taxes online You must keep accounts for the depletion of each property and adjust these accounts each year for units sold and depletion claimed. Need to file 2011 taxes online Elective safe harbor for owners of oil and gas property. Need to file 2011 taxes online   Instead of using the method described earlier to determine the total recoverable units, you can use an elective safe harbor. Need to file 2011 taxes online If you choose the elective safe harbor, the total recoverable units equal 105% of a property's proven reserves (both developed and undeveloped). Need to file 2011 taxes online For details, see Revenue Procedure 2004-19 on page 563 of Internal Revenue Bulletin 2004-10, available at www. Need to file 2011 taxes online irs. Need to file 2011 taxes online gov/pub/irs-irbs/irb04-10. Need to file 2011 taxes online pdf. Need to file 2011 taxes online   To make the election, attach a statement to your timely filed (including extensions) original return for the first tax year for which the safe harbor is elected. Need to file 2011 taxes online The statement must indicate that you are electing the safe harbor provided by Revenue Procedure 2004-19. Need to file 2011 taxes online The election, if made, is effective for the tax year in which it is made and all later years. Need to file 2011 taxes online It cannot be revoked for the tax year in which it is elected, but may be revoked in a later year. Need to file 2011 taxes online Once revoked, it cannot be re-elected for the next 5 years. Need to file 2011 taxes online Percentage Depletion To figure percentage depletion, you multiply a certain percentage, specified for each mineral, by your gross income from the property during the tax year. Need to file 2011 taxes online The rates to be used and other rules for oil and gas wells are discussed later under Independent Producers and Royalty Owners and under Natural Gas Wells . Need to file 2011 taxes online Rates and other rules for percentage depletion of other specific minerals are found later in Mines and Geothermal Deposits . Need to file 2011 taxes online Gross income. Need to file 2011 taxes online   When figuring percentage depletion, subtract from your gross income from the property the following amounts. Need to file 2011 taxes online Any rents or royalties you paid or incurred for the property. Need to file 2011 taxes online The part of any bonus you paid for a lease on the property allocable to the product sold (or that otherwise gives rise to gross income) for the tax year. Need to file 2011 taxes online A bonus payment includes amounts you paid as a lessee to satisfy a production payment retained by the lessor. Need to file 2011 taxes online   Use the following fraction to figure the part of the bonus you must subtract. Need to file 2011 taxes online No. Need to file 2011 taxes online of units sold in the tax year Recoverable units from the property × Bonus Payments For oil and gas wells and geothermal deposits, more information about the definition of gross income from the property is under Oil and Gas Wells , later. Need to file 2011 taxes online For other property, more information about the definition of gross income from the property is under Mines and Geothermal Deposits , later. Need to file 2011 taxes online Taxable income limit. Need to file 2011 taxes online   The percentage depletion deduction generally cannot be more than 50% (100% for oil and gas property) of your taxable income from the property figured without the depletion deduction and the domestic production activities deduction. Need to file 2011 taxes online   Taxable income from the property means gross income from the property minus all allowable deductions (except any deduction for depletion or domestic production activities) attributable to mining processes, including mining transportation. Need to file 2011 taxes online These deductible items include, but are not limited to, the following. Need to file 2011 taxes online Operating expenses. Need to file 2011 taxes online Certain selling expenses. Need to file 2011 taxes online Administrative and financial overhead. Need to file 2011 taxes online Depreciation. Need to file 2011 taxes online Intangible drilling and development costs. Need to file 2011 taxes online Exploration and development expenditures. Need to file 2011 taxes online Deductible taxes (see chapter 5), but not taxes that you capitalize or take as a credit. Need to file 2011 taxes online Losses sustained. Need to file 2011 taxes online   The following rules apply when figuring your taxable income from the property for purposes of the taxable income limit. Need to file 2011 taxes online Do not deduct any net operating loss deduction from the gross income from the property. Need to file 2011 taxes online Corporations do not deduct charitable contributions from the gross income from the property. Need to file 2011 taxes online If, during the year, you dispose of an item of section 1245 property that was used in connection with mineral property, reduce any allowable deduction for mining expenses by the part of any gain you must report as ordinary income that is allocable to the mineral property. Need to file 2011 taxes online See section 1. Need to file 2011 taxes online 613-5(b)(1) of the regulations for information on how to figure the ordinary gain allocable to the property. Need to file 2011 taxes online Oil and Gas Wells You cannot claim percentage depletion for an oil or gas well unless at least one of the following applies. Need to file 2011 taxes online You are either an independent producer or a royalty owner. Need to file 2011 taxes online The well produces natural gas that is either sold under a fixed contract or produced from geopressured brine. Need to file 2011 taxes online If you are an independent producer or royalty owner, see Independent Producers and Royalty Owners , next. Need to file 2011 taxes online For information on the depletion deduction for wells that produce natural gas that is either sold under a fixed contract or produced from geopressured brine, see Natural Gas Wells , later. Need to file 2011 taxes online Independent Producers and Royalty Owners If you are an independent producer or royalty owner, you figure percentage depletion using a rate of 15% of the gross income from the property based on your average daily production of domestic crude oil or domestic natural gas up to your depletable oil or natural gas quantity. Need to file 2011 taxes online However, certain refiners, as explained next, and certain retailers and transferees of proven oil and gas properties, as explained next, cannot claim percentage depletion. Need to file 2011 taxes online For information on figuring the deduction, see Figuring percentage depletion , later. Need to file 2011 taxes online Refiners who cannot claim percentage depletion. Need to file 2011 taxes online   You cannot claim percentage depletion if you or a related person refine crude oil and you and the related person refined more than 75,000 barrels on any day during the tax year based on average (rather than actual) daily refinery runs for the tax year. Need to file 2011 taxes online The average daily refinery run is computed by dividing total refinery runs for the tax year by the total number of days in the tax year. Need to file 2011 taxes online Related person. Need to file 2011 taxes online   You and another person are related persons if either of you holds a significant ownership interest in the other person or if a third person holds a significant ownership interest in both of you. Need to file 2011 taxes online For example, a corporation, partnership, estate, or trust and anyone who holds a significant ownership interest in it are related persons. Need to file 2011 taxes online A partnership and a trust are related persons if one person holds a significant ownership interest in each of them. Need to file 2011 taxes online For purposes of the related person rules, significant ownership interest means direct or indirect ownership of 5% or more in any one of the following. Need to file 2011 taxes online The value of the outstanding stock of a corporation. Need to file 2011 taxes online The interest in the profits or capital of a partnership. Need to file 2011 taxes online The beneficial interests in an estate or trust. Need to file 2011 taxes online Any interest owned by or for a corporation, partnership, trust, or estate is considered to be owned directly both by itself and proportionately by its shareholders, partners, or beneficiaries. Need to file 2011 taxes online Retailers who cannot claim percentage depletion. Need to file 2011 taxes online   You cannot claim percentage depletion if both the following apply. Need to file 2011 taxes online You sell oil or natural gas or their by-products directly or through a related person in any of the following situations. Need to file 2011 taxes online Through a retail outlet operated by you or a related person. Need to file 2011 taxes online To any person who is required under an agreement with you or a related person to use a trademark, trade name, or service mark or name owned by you or a related person in marketing or distributing oil, natural gas, or their by-products. Need to file 2011 taxes online To any person given authority under an agreement with you or a related person to occupy any retail outlet owned, leased, or controlled by you or a related person. Need to file 2011 taxes online The combined gross receipts from sales (not counting resales) of oil, natural gas, or their by-products by all retail outlets taken into account in (1) are more than $5 million for the tax year. Need to file 2011 taxes online   For the purpose of determining if this rule applies, do not count the following. Need to file 2011 taxes online Bulk sales (sales in very large quantities) of oil or natural gas to commercial or industrial users. Need to file 2011 taxes online Bulk sales of aviation fuels to the Department of Defense. Need to file 2011 taxes online Sales of oil or natural gas or their by-products outside the United States if none of your domestic production or that of a related person is exported during the tax year or the prior tax year. Need to file 2011 taxes online Related person. Need to file 2011 taxes online   To determine if you and another person are related persons, see Related person under Refiners who cannot claim percentage depletion, earlier. Need to file 2011 taxes online Sales through a related person. Need to file 2011 taxes online   You are considered to be selling through a related person if any sale by the related person produces gross income from which you may benefit because of your direct or indirect ownership interest in the person. Need to file 2011 taxes online   You are not considered to be selling through a related person who is a retailer if all the following apply. Need to file 2011 taxes online You do not have a significant ownership interest in the retailer. Need to file 2011 taxes online You sell your production to persons who are not related to either you or the retailer. Need to file 2011 taxes online The retailer does not buy oil or natural gas from your customers or persons related to your customers. Need to file 2011 taxes online There are no arrangements for the retailer to acquire oil or natural gas you produced for resale or made available for purchase by the retailer. Need to file 2011 taxes online Neither you nor the retailer knows of or controls the final disposition of the oil or natural gas you sold or the original source of the petroleum products the retailer acquired for resale. Need to file 2011 taxes online Transferees who cannot claim percentage depletion. Need to file 2011 taxes online   You cannot claim percentage depletion if you received your interest in a proven oil or gas property by transfer after 1974 and before October 12, 1990. Need to file 2011 taxes online For a definition of the term “transfer,” see section 1. Need to file 2011 taxes online 613A-7(n) of the regulations. Need to file 2011 taxes online For a definition of the term “interest in proven oil or gas property,” see section 1. Need to file 2011 taxes online 613A-7(p) of the regulations. Need to file 2011 taxes online Figuring percentage depletion. Need to file 2011 taxes online   Generally, as an independent producer or royalty owner, you figure your percentage depletion by computing your average daily production of domestic oil or gas and comparing it to your depletable oil or gas quantity. Need to file 2011 taxes online If your average daily production does not exceed your depletable oil or gas quantity, you figure your percentage depletion by multiplying the gross income from the oil or gas property (defined later) by 15%. Need to file 2011 taxes online If your average daily production of domestic oil or gas exceeds your depletable oil or gas quantity, you must make an allocation as explained later under Average daily production. Need to file 2011 taxes online   In addition, there is a limit on the percentage depletion deduction. Need to file 2011 taxes online See Taxable income limit , later. Need to file 2011 taxes online Average daily production. Need to file 2011 taxes online   Figure your average daily production by dividing your total domestic production of oil or gas for the tax year by the number of days in your tax year. Need to file 2011 taxes online Partial interest. Need to file 2011 taxes online   If you have a partial interest in the production from a property, figure your share of the production by multiplying total production from the property by your percentage of interest in the revenues from the property. Need to file 2011 taxes online   You have a partial interest in the production from a property if you have a net profits interest in the property. Need to file 2011 taxes online To figure the share of production for your net profits interest, you must first determine your percentage participation (as measured by the net profits) in the gross revenue from the property. Need to file 2011 taxes online To figure this percentage, you divide the income you receive for your net profits interest by the gross revenue from the property. Need to file 2011 taxes online Then multiply the total production from the property by your percentage participation to figure your share of the production. Need to file 2011 taxes online Example. Need to file 2011 taxes online Javier Robles owns oil property in which Pablo Olmos owns a 20% net profits interest. Need to file 2011 taxes online During the year, the property produced 10,000 barrels of oil, which Javier sold for $200,000. Need to file 2011 taxes online Javier had expenses of $90,000 attributable to the property. Need to file 2011 taxes online The property generated a net profit of $110,000 ($200,000 − $90,000). Need to file 2011 taxes online Pablo received income of $22,000 ($110,000 × . Need to file 2011 taxes online 20) for his net profits interest. Need to file 2011 taxes online Pablo determined his percentage participation to be 11% by dividing $22,000 (the income he received) by $200,000 (the gross revenue from the property). Need to file 2011 taxes online Pablo determined his share of the oil production to be 1,100 barrels (10,000 barrels × 11%). Need to file 2011 taxes online Depletable oil or natural gas quantity. Need to file 2011 taxes online   Generally, your depletable oil quantity is 1,000 barrels. Need to file 2011 taxes online Your depletable natural gas quantity is 6,000 cubic feet multiplied by the number of barrels of your depletable oil quantity that you choose to apply. Need to file 2011 taxes online If you claim depletion on both oil and natural gas, you must reduce your depletable oil quantity (1,000 barrels) by the number of barrels you use to figure your depletable natural gas quantity. Need to file 2011 taxes online Example. Need to file 2011 taxes online You have both oil and natural gas production. Need to file 2011 taxes online To figure your depletable natural gas quantity, you choose to apply 360 barrels of your 1000-barrel depletable oil quantity. Need to file 2011 taxes online Your depletable natural gas quantity is 2. Need to file 2011 taxes online 16 million cubic feet of gas (360 × 6000). Need to file 2011 taxes online You must reduce your depletable oil quantity to 640 barrels (1000 − 360). Need to file 2011 taxes online If you have production from marginal wells, see section 613A(c)(6) of the Internal Revenue Code to figure your depletable oil or natural gas quantity. Need to file 2011 taxes online Also, see Notice 2012-50, available at www. Need to file 2011 taxes online irs. Need to file 2011 taxes online gov/irb/2012–31_IRB/index. Need to file 2011 taxes online html. Need to file 2011 taxes online Business entities and family members. Need to file 2011 taxes online   You must allocate the depletable oil or gas quantity among the following related persons in proportion to each entity's or family member's production of domestic oil or gas for the year. Need to file 2011 taxes online Corporations, trusts, and estates if 50% or more of the beneficial interest is owned by the same or related persons (considering only persons that own at least 5% of the beneficial interest). Need to file 2011 taxes online You and your spouse and minor children. Need to file 2011 taxes online A related person is anyone mentioned in the related persons discussion under Nondeductible loss in chapter 2 of Publication 544, except that for purposes of this allocation, item (1) in that discussion includes only an individual, his or her spouse, and minor children. Need to file 2011 taxes online Controlled group of corporations. Need to file 2011 taxes online   Members of the same controlled group of corporations are treated as one taxpayer when figuring the depletable oil or natural gas quantity. Need to file 2011 taxes online They share the depletable quantity. Need to file 2011 taxes online A controlled group of corporations is defined in section 1563(a) of the Internal Revenue Code, except that, for this purpose, the stock ownership requirement in that definition is “more than 50%” rather than “at least 80%. Need to file 2011 taxes online ” Gross income from the property. Need to file 2011 taxes online   For purposes of percentage depletion, gross income from the property (in the case of oil and gas wells) is the amount you receive from the sale of the oil or gas in the immediate vicinity of the well. Need to file 2011 taxes online If you do not sell the oil or gas on the property, but manufacture or convert it into a refined product before sale or transport it before sale, the gross income from the property is the representative market or field price (RMFP) of the oil or gas, before conversion or transportation. Need to file 2011 taxes online   If you sold gas after you removed it from the premises for a price that is lower than the RMFP, determine gross income from the property for percentage depletion purposes without regard to the RMFP. Need to file 2011 taxes online   Gross income from the property does not include lease bonuses, advance royalties, or other amounts payable without regard to production from the property. Need to file 2011 taxes online Average daily production exceeds depletable quantities. Need to file 2011 taxes online   If your average daily production for the year is more than your depletable oil or natural gas quantity, figure your allowance for depletion for each domestic oil or natural gas property as follows. Need to file 2011 taxes online Figure your average daily production of oil or natural gas for the year. Need to file 2011 taxes online Figure your depletable oil or natural gas quantity for the year. Need to file 2011 taxes online Figure depletion for all oil or natural gas produced from the property using a percentage depletion rate of 15%. Need to file 2011 taxes online Multiply the result figured in (3) by a fraction, the numerator of which is the result figured in (2) and the denominator of which is the result figured in (1). Need to file 2011 taxes online This is your depletion allowance for that property for the year. Need to file 2011 taxes online Taxable income limit. Need to file 2011 taxes online   If you are an independent producer or royalty owner of oil and gas, your deduction for percentage depletion is limited to the smaller of the following. Need to file 2011 taxes online 100% of your taxable income from the property figured without the deduction for depletion and the deduction for domestic production activities under section 199 of the Internal Revenue Code. Need to file 2011 taxes online For a definition of taxable income from the property, see Taxable income limit , earlier, under Mineral Property. Need to file 2011 taxes online 65% of your taxable income from all sources, figured without the depletion allowance, the deduction for domestic production activities, any net operating loss carryback, and any capital loss carryback. Need to file 2011 taxes online You can carry over to the following year any amount you cannot deduct because of the 65%-of-taxable-income limit. Need to file 2011 taxes online Add it to your depletion allowance (before applying any limits) for the following year. Need to file 2011 taxes online Partnerships and S Corporations Generally, each partner or S corporation shareholder, and not the partnership or S corporation, figures the depletion allowance separately. Need to file 2011 taxes online (However, see Electing large partnerships must figure depletion allowance , later. Need to file 2011 taxes online ) Each partner or shareholder must decide whether to use cost or percentage depletion. Need to file 2011 taxes online If a partner or shareholder uses percentage depletion, he or she must apply the 65%-of-taxable-income limit using his or her taxable income from all sources. Need to file 2011 taxes online Partner's or shareholder's adjusted basis. Need to file 2011 taxes online   The partnership or S corporation must allocate to each partner or shareholder his or her share of the adjusted basis of each oil or gas property held by the partnership or S corporation. Need to file 2011 taxes online The partnership or S corporation makes the allocation as of the date it acquires the oil or gas property. Need to file 2011 taxes online   Each partner's share of the adjusted basis of the oil or gas property generally is figured according to that partner's interest in partnership capital. Need to file 2011 taxes online However, in some cases, it is figured according to the partner's interest in partnership income. Need to file 2011 taxes online   The partnership or S corporation adjusts the partner's or shareholder's share of the adjusted basis of the oil and gas property for any capital expenditures made for the property and for any change in partnership or S corporation interests. Need to file 2011 taxes online Recordkeeping. Need to file 2011 taxes online Each partner or shareholder must separately keep records of his or her share of the adjusted basis in each oil and gas property of the partnership or S corporation. Need to file 2011 taxes online The partner or shareholder must reduce his or her adjusted basis by the depletion allowed or allowable on the property each year. Need to file 2011 taxes online The partner or shareholder must use that reduced adjusted basis to figure cost depletion or his or her gain or loss if the partnership or S corporation disposes of the property. Need to file 2011 taxes online Reporting the deduction. Need to file 2011 taxes online   Information that you, as a partner or shareholder, use to figure your depletion deduction on oil and gas properties is reported by the partnership or S corporation on Schedule K-1 (Form 1065) or on Schedule K-1 (Form 1120S). Need to file 2011 taxes online Deduct oil and gas depletion for your partnership or S corporation interest on Schedule E (Form 1040). Need to file 2011 taxes online The depletion deducted on Schedule E is included in figuring income or loss from rental real estate or royalty properties. Need to file 2011 taxes online The instructions for Schedule E explain where to report this income or loss and whether you need to file either of the following forms. Need to file 2011 taxes online Form 6198, At-Risk Limitations. Need to file 2011 taxes online Form 8582, Passive Activity Loss Limitations. Need to file 2011 taxes online Electing large partnerships must figure depletion allowance. Need to file 2011 taxes online   An electing large partnership, rather than each partner, generally must figure the depletion allowance. Need to file 2011 taxes online The partnership figures the depletion allowance without taking into account the 65-percent-of-taxable-income limit and the depletable oil or natural gas quantity. Need to file 2011 taxes online Also, the adjusted basis of a partner's interest in the partnership is not affected by the depletion allowance. Need to file 2011 taxes online   An electing large partnership is one that meets both the following requirements. Need to file 2011 taxes online The partnership had 100 or more partners in the preceding year. Need to file 2011 taxes online The partnership chooses to be an electing large partnership. Need to file 2011 taxes online Disqualified persons. Need to file 2011 taxes online   An electing large partnership does not figure the depletion allowance of its partners that are disqualified persons. Need to file 2011 taxes online Disqualified persons must figure it themselves, as explained earlier. Need to file 2011 taxes online   All the following are disqualified persons. Need to file 2011 taxes online Refiners who cannot claim percentage depletion (discussed under Independent Producers and Royalty Owners , earlier). Need to file 2011 taxes online Retailers who cannot claim percentage depletion (discussed under Independent Producers and Royalty Owners , earlier). Need to file 2011 taxes online Any partner whose average daily production of domestic crude oil and natural gas is more than 500 barrels during the tax year in which the partnership tax year ends. Need to file 2011 taxes online Average daily production is discussed earlier. Need to file 2011 taxes online Natural Gas Wells You can use percentage depletion for a well that produces natural gas that is either Sold under a fixed contract, or Produced from geopressured brine. Need to file 2011 taxes online Natural gas sold under a fixed contract. Need to file 2011 taxes online   Natural gas sold under a fixed contract qualifies for a percentage depletion rate of 22%. Need to file 2011 taxes online This is domestic natural gas sold by the producer under a contract that does not provide for a price increase to reflect any increase in the seller's tax liability because of the repeal of percentage depletion for gas. Need to file 2011 taxes online The contract must have been in effect from February 1, 1975, until the date of sale of the gas. Need to file 2011 taxes online Price increases after February 1, 1975, are presumed to take the increase in tax liability into account unless demonstrated otherwise by clear and convincing evidence. Need to file 2011 taxes online Natural gas from geopressured brine. Need to file 2011 taxes online   Qualified natural gas from geopressured brine is eligible for a percentage depletion rate of 10%. Need to file 2011 taxes online This is natural gas that is both the following. Need to file 2011 taxes online Produced from a well you began to drill after September 1978 and before 1984. Need to file 2011 taxes online Determined in accordance with section 503 of the Natural Gas Policy Act of 1978 to be produced from geopressured brine. Need to file 2011 taxes online Mines and Geothermal Deposits Certain mines, wells, and other natural deposits, including geothermal deposits, qualify for percentage depletion. Need to file 2011 taxes online Mines and other natural deposits. Need to file 2011 taxes online   For a natural deposit, the percentage of your gross income from the property that you can deduct as depletion depends on the type of deposit. Need to file 2011 taxes online   The following is a list of the percentage depletion rates for the more common minerals. Need to file 2011 taxes online DEPOSITS RATE Sulphur, uranium, and, if from deposits in the United States, asbestos, lead ore, zinc ore, nickel ore, and mica 22% Gold, silver, copper, iron ore, and certain oil shale, if from deposits in the United States 15% Borax, granite, limestone, marble, mollusk shells, potash, slate, soapstone, and carbon dioxide produced from a well 14% Coal, lignite, and sodium chloride 10% Clay and shale used or sold for use in making sewer pipe or bricks or used or sold for use as sintered or burned lightweight aggregates 7½% Clay used or sold for use in making drainage and roofing tile, flower pots, and kindred products, and gravel, sand, and stone (other than stone used or sold for use by a mine owner or operator as dimension or ornamental stone) 5%   You can find a complete list of minerals and their percentage depletion rates in section 613(b) of the Internal Revenue Code. Need to file 2011 taxes online Corporate deduction for iron ore and coal. Need to file 2011 taxes online   The percentage depletion deduction of a corporation for iron ore and coal (including lignite) is reduced by 20% of: The percentage depletion deduction for the tax year (figured without this reduction), minus The adjusted basis of the property at the close of the tax year (figured without the depletion deduction for the tax year). Need to file 2011 taxes online Gross income from the property. Need to file 2011 taxes online   For property other than a geothermal deposit or an oil or gas well, gross income from the property means the gross income from mining. Need to file 2011 taxes online Mining includes all the following. Need to file 2011 taxes online Extracting ores or minerals from the ground. Need to file 2011 taxes online Applying certain treatment processes described later. Need to file 2011 taxes online Transporting ores or minerals (generally, not more than 50 miles) from the point of extraction to the plants or mills in which the treatment processes are applied. Need to file 2011 taxes online Excise tax. Need to file 2011 taxes online   Gross income from mining includes the separately stated excise tax received by a mine operator from the sale of coal to compensate the operator for the excise tax the mine operator must pay to finance black lung benefits. Need to file 2011 taxes online Extraction. Need to file 2011 taxes online   Extracting ores or minerals from the ground includes extraction by mine owners or operators of ores or minerals from the waste or residue of prior mining. Need to file 2011 taxes online This does not apply to extraction from waste or residue of prior mining by the purchaser of the waste or residue or the purchaser of the rights to extract ores or minerals from the waste or residue. Need to file 2011 taxes online Treatment processes. Need to file 2011 taxes online   The processes included as mining depend on the ore or mineral mined. Need to file 2011 taxes online To qualify as mining, the treatment processes must be applied by the mine owner or operator. Need to file 2011 taxes online For a listing of treatment processes considered as mining, see section 613(c)(4) of the Internal Revenue Code and the related regulations. Need to file 2011 taxes online Transportation of more than 50 miles. Need to file 2011 taxes online   If the IRS finds that the ore or mineral must be transported more than 50 miles to plants or mills to be treated because of physical and other requirements, the additional authorized transportation is considered mining and included in the computation of gross income from mining. Need to file 2011 taxes online    If you wish to include transportation of more than 50 miles in the computation of gross income from mining, request an advance ruling from the IRS. Need to file 2011 taxes online Include in the request the facts about the physical and other requirements that prevented the construction and operation of the plant within 50 miles of the point of extraction. Need to file 2011 taxes online For more information about requesting an advance ruling, see Revenue Procedure 2013-1, available at www. Need to file 2011 taxes online irs. Need to file 2011 taxes online gov/irb/2013-01_IRB/ar11. Need to file 2011 taxes online html. Need to file 2011 taxes online Disposal of coal or iron ore. Need to file 2011 taxes online   You cannot take a depletion deduction for coal (including lignite) or iron ore mined in the United States if both the following apply. Need to file 2011 taxes online You disposed of it after holding it for more than 1 year. Need to file 2011 taxes online You disposed of it under a contract under which you retain an economic interest in the coal or iron ore. Need to file 2011 taxes online Treat any gain on the disposition as a capital gain. Need to file 2011 taxes online Disposal to related person. Need to file 2011 taxes online   This rule does not apply if you dispose of the coal or iron ore to one of the following persons. Need to file 2011 taxes online A related person (as listed in chapter 2 of Publication 544). Need to file 2011 taxes online A person owned or controlled by the same interests that own or control you. Need to file 2011 taxes online Geothermal deposits. Need to file 2011 taxes online   Geothermal deposits located in the United States or its possessions qualify for a percentage depletion rate of 15%. Need to file 2011 taxes online A geothermal deposit is a geothermal reservoir of natural heat stored in rocks or in a watery liquid or vapor. Need to file 2011 taxes online For percentage depletion purposes, a geothermal deposit is not considered a gas well. Need to file 2011 taxes online   Figure gross income from the property for a geothermal steam well in the same way as for oil and gas wells. Need to file 2011 taxes online See Gross income from the property , earlier, under Oil and Gas Wells. Need to file 2011 taxes online Percentage depletion on a geothermal deposit cannot be more than 50% of your taxable income from the property. Need to file 2011 taxes online Lessor's Gross Income In the case of leased property, the depletion deduction is divided between the lessor and the lessee. Need to file 2011 taxes online A lessor's gross income from the property that qualifies for percentage depletion usually is the total of the royalties received from the lease. Need to file 2011 taxes online Bonuses and advanced royalties. Need to file 2011 taxes online   Bonuses and advanced royalties are payments a lessee makes before production to a lessor for the grant of rights in a lease or for minerals, gas, or oil to be extracted from leased property. Need to file 2011 taxes online If you are the lessor, your income from bonuses and advanced royalties received is subject to an allowance for depletion, as explained in the next two paragraphs. Need to file 2011 taxes online Figuring cost depletion. Need to file 2011 taxes online   To figure cost depletion on a bonus, multiply your adjusted basis in the property by a fraction, the numerator of which is the bonus and the denominator of which is the total bonus and royalties expected to be received. Need to file 2011 taxes online To figure cost depletion on advanced royalties, use the computation explained earlier under Cost Depletion , treating the number of units for which the advanced royalty is received as the number of units sold. Need to file 2011 taxes online Figuring percentage depletion. Need to file 2011 taxes online   In the case of mines, wells, and other natural deposits other than gas, oil, or geothermal property, you may use the percentage rates discussed earlier under Mines and Geothermal Deposits . Need to file 2011 taxes online Any bonus or advanced royalty payments are generally part of the gross income from the property to which the rates are applied in making the calculation. Need to file 2011 taxes online However, for oil, gas, or geothermal property, gross income does not include lease bonuses, advanced royalties, or other amounts payable without regard to production from the property. Need to file 2011 taxes online Ending the lease. Need to file 2011 taxes online   If you receive a bonus on a lease that ends or is abandoned before you derive any income from mineral extraction, include in income the depletion deduction you took. Need to file 2011 taxes online Do this for the year the lease ends or is abandoned. Need to file 2011 taxes online Also increase your adjusted basis in the property to restore the depletion deduction you previously subtracted. Need to file 2011 taxes online   For advanced royalties, include in income the depletion claimed on minerals for which the advanced royalties were paid if the minerals were not produced before the lease ended. Need to file 2011 taxes online Include this amount in income for the year the lease ends. Need to file 2011 taxes online Increase your adjusted basis in the property by the amount you include in income. Need to file 2011 taxes online Delay rentals. Need to file 2011 taxes online   These are payments for deferring development of the property. Need to file 2011 taxes online Since delay rentals are ordinary rent, they are ordinary income that is not subject to depletion. Need to file 2011 taxes online These rentals can be avoided by either abandoning the lease, beginning development operations, or obtaining production. Need to file 2011 taxes online Timber You can figure timber depletion only by the cost method. Need to file 2011 taxes online Percentage depletion does not apply to timber. Need to file 2011 taxes online Base your depletion on your cost or other basis in the timber. Need to file 2011 taxes online Your cost does not include the cost of land or any amounts recoverable through depreciation. Need to file 2011 taxes online Depletion takes place when you cut standing timber. Need to file 2011 taxes online You can figure your depletion deduction when the quantity of cut timber is first accurately measured in the process of exploitation. Need to file 2011 taxes online Figuring cost depletion. Need to file 2011 taxes online   To figure your cost depletion allowance, you multiply the number of timber units cut by your depletion unit. Need to file 2011 taxes online Timber units. Need to file 2011 taxes online   When you acquire timber property, you must make an estimate of the quantity of marketable timber that exists on the property. Need to file 2011 taxes online You measure the timber using board feet, log scale, cords, or other units. Need to file 2011 taxes online If you later determine that you have more or less units of timber, you must adjust the original estimate. Need to file 2011 taxes online   The term “timber property” means your economic interest in standing timber in each tract or block representing a separate timber account. Need to file 2011 taxes online Depletion unit. Need to file 2011 taxes online   You figure your depletion unit each year by taking the following steps. Need to file 2011 taxes online Determine your cost or adjusted basis of the timber on hand at the beginning of the year. Need to file 2011 taxes online Adjusted basis is defined under Cost Depletion in the discussion on Mineral Property. Need to file 2011 taxes online Add to the amount determined in (1) the cost of any timber units acquired during the year and any additions to capital. Need to file 2011 taxes online Figure the number of timber units to take into account by adding the number of timber units acquired during the year to the number of timber units on hand in the account at the beginning of the year and then adding (or subtracting) any correction to the estimate of the number of timber units remaining in the account. Need to file 2011 taxes online Divide the result of (2) by the result of (3). Need to file 2011 taxes online This is your depletion unit. Need to file 2011 taxes online Example. Need to file 2011 taxes online You bought a timber tract for $160,000 and the land was worth as much as the timber. Need to file 2011 taxes online Your basis for the timber is $80,000. Need to file 2011 taxes online Based on an estimated one million board feet (1,000 MBF) of standing timber, you figure your depletion unit to be $80 per MBF ($80,000 ÷ 1,000). Need to file 2011 taxes online If you cut 500 MBF of timber, your depletion allowance would be $40,000 (500 MBF × $80). Need to file 2011 taxes online When to claim depletion. Need to file 2011 taxes online   Claim your depletion allowance as a deduction in the year of sale or other disposition of the products cut from the timber, unless you choose to treat the cutting of timber as a sale or exchange (explained below). Need to file 2011 taxes online Include allowable depletion for timber products not sold during the tax year the timber is cut as a cost item in the closing inventory of timber products for the year. Need to file 2011 taxes online The inventory is your basis for determining gain or loss in the tax year you sell the timber products. Need to file 2011 taxes online Example. Need to file 2011 taxes online The facts are the same as in the previous example except that you sold only half of the timber products in the cutting year. Need to file 2011 taxes online You would deduct $20,000 of the $40,000 depletion that year. Need to file 2011 taxes online You would add the remaining $20,000 depletion to your closing inventory of timber products. Need to file 2011 taxes online Electing to treat the cutting of timber as a sale or exchange. Need to file 2011 taxes online   You can elect, under certain circumstances, to treat the cutting of timber held for more than 1 year as a sale or exchange. Need to file 2011 taxes online You must make the election on your income tax return for the tax year to which it applies. Need to file 2011 taxes online If you make this election, subtract the adjusted basis for depletion from the fair market value of the timber on the first day of the tax year in which you cut it to figure the gain or loss on the cutting. Need to file 2011 taxes online You generally report the gain as long-term capital gain. Need to file 2011 taxes online The fair market value then becomes your basis for figuring your ordinary gain or loss on the sale or other disposition of the products cut from the timber. Need to file 2011 taxes online For more information, see Timber in chapter 2 of Publication 544, Sales and Other Dispositions of Assets. Need to file 2011 taxes online   You may revoke an election to treat the cutting of timber as a sale or exchange without IRS's consent. Need to file 2011 taxes online The prior election (and revocation) is disregarded for purposes of making a subsequent election. Need to file 2011 taxes online See Form T (Timber), Forest Activities Schedule, for more information. Need to file 2011 taxes online Form T. Need to file 2011 taxes online   Complete and attach Form T (Timber) to your income tax return if you claim a deduction for timber depletion, choose to treat the cutting of timber as a sale or exchange, or make an outright sale of timber. Need to file 2011 taxes online Prev  Up  Next   Home   More Online Publications