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1040ez 2010 Tax Form

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1040ez 2010 Tax Form

1040ez 2010 tax form Publication 584SP - Additional Material Table of Contents This image is too large to be displayed in the current screen. 1040ez 2010 tax form Please click the link to view the image. 1040ez 2010 tax form Pasillo de Entrada (Entrance Hall) This image is too large to be displayed in the current screen. 1040ez 2010 tax form Please click the link to view the image. 1040ez 2010 tax form Sala de Estar (Living Room) This image is too large to be displayed in the current screen. 1040ez 2010 tax form Please click the link to view the image. 1040ez 2010 tax form Comedor (Dining Room) This image is too large to be displayed in the current screen. 1040ez 2010 tax form Please click the link to view the image. 1040ez 2010 tax form Cocina (Kitchen) This image is too large to be displayed in the current screen. 1040ez 2010 tax form Please click the link to view the image. 1040ez 2010 tax form Cuarto de Trabajo (Den) This image is too large to be displayed in the current screen. 1040ez 2010 tax form Please click the link to view the image. 1040ez 2010 tax form Dormitorios (Bedrooms) This image is too large to be displayed in the current screen. 1040ez 2010 tax form Please click the link to view the image. 1040ez 2010 tax form Baños (Bathrooms) This image is too large to be displayed in the current screen. 1040ez 2010 tax form Please click the link to view the image. 1040ez 2010 tax form Cuarto de Recreación/Juegos (Recreation Room) This image is too large to be displayed in the current screen. 1040ez 2010 tax form Please click the link to view the image. 1040ez 2010 tax form Lavadero y Sótano (Laundry and Basement) This image is too large to be displayed in the current screen. 1040ez 2010 tax form Please click the link to view the image. 1040ez 2010 tax form Garaje (Garage) This image is too large to be displayed in the current screen. 1040ez 2010 tax form Please click the link to view the image. 1040ez 2010 tax form Equipo Deportivo (Sporting Equipment) This image is too large to be displayed in the current screen. 1040ez 2010 tax form Please click the link to view the image. 1040ez 2010 tax form Ropa de Hombres (Men's Clothing) This image is too large to be displayed in the current screen. 1040ez 2010 tax form Please click the link to view the image. 1040ez 2010 tax form Ropa de Mujeres (Women's Clothing) This image is too large to be displayed in the current screen. 1040ez 2010 tax form Please click the link to view the image. 1040ez 2010 tax form Ropa de Niños (Children's Clothing) This image is too large to be displayed in the current screen. 1040ez 2010 tax form Please click the link to view the image. 1040ez 2010 tax form Joyería (Jewelry) This image is too large to be displayed in the current screen. 1040ez 2010 tax form Please click the link to view the image. 1040ez 2010 tax form Enseres Eléctricos (Electrical Appliances) This image is too large to be displayed in the current screen. 1040ez 2010 tax form Please click the link to view the image. 1040ez 2010 tax form Artículos de Hilo (Linens) This image is too large to be displayed in the current screen. 1040ez 2010 tax form Please click the link to view the image. 1040ez 2010 tax form Artículos Misceláneos (Miscellaneous) This image is too large to be displayed in the current screen. 1040ez 2010 tax form Please click the link to view the image. 1040ez 2010 tax form vehículos motorizados This image is too large to be displayed in the current screen. 1040ez 2010 tax form Please click the link to view the image. 1040ez 2010 tax form Hogar (Excluyendo su contenido) Hoja de Trabajo A. 1040ez 2010 tax form Costo u Otra Base (Ajustada) Precaución:Vea Instrucciones de la Hoja de Trabajo A antes de usar esta hoja de trabajo. 1040ez 2010 tax form         (a) Parte Personal (b) Parte Comercial/de Alquiler 1. 1040ez 2010 tax form   Anote el precio de compra de la vivienda dañada o destruida. 1040ez 2010 tax form (Si usted presentó el Formulario 2119 cuando en un principio adquirió dicha vivienda para aplazar ganancias provenientes de la venta de una vivienda anterior antes del 7 de mayo de 1997, anote la base ajustada de la vivienda nueva, usando la cantidad que aparece en dicho Formulario 2119). 1040ez 2010 tax form 1. 1040ez 2010 tax form     2. 1040ez 2010 tax form   Puntos pagados por el vendedor para una vivienda comprada después de 1990. 1040ez 2010 tax form No incluya puntos pagados por el vendedor que ya restó para llegar a la cantidad anotada en la línea 1 2. 1040ez 2010 tax form     3. 1040ez 2010 tax form   Reste la línea 2 de la línea 1 3. 1040ez 2010 tax form     4. 1040ez 2010 tax form   Cargos por liquidación o costos de cierre. 1040ez 2010 tax form (Vea Settlement Costs (Costos de Liquidación) en la Publicación 551, en inglés). 1040ez 2010 tax form Si la línea 1 incluye la base ajustada de la vivienda nueva del Formulario 2119, ignore las líneas 4a a la 4g y 5; para entonces pasar a la línea 6. 1040ez 2010 tax form         a. 1040ez 2010 tax form Honorarios por estudios de escritura 4a. 1040ez 2010 tax form       b. 1040ez 2010 tax form Honorarios legales (incluyendo honorarios por trámites relacionados con la escritura y la preparación de documentos) 4b. 1040ez 2010 tax form       c. 1040ez 2010 tax form Estudios topográficos 4c. 1040ez 2010 tax form       d. 1040ez 2010 tax form Seguro de escritura de propietario 4d. 1040ez 2010 tax form       e. 1040ez 2010 tax form Impuestos de traspaso o de sello 4e. 1040ez 2010 tax form       f. 1040ez 2010 tax form Cantidades que el vendedor adeudaba y que usted acordó pagar (impuestos atrasados o intereses, costos de registro o cargos hipotecarios y comisiones sobre las ventas) 4f. 1040ez 2010 tax form       g. 1040ez 2010 tax form Otros gastos 4g. 1040ez 2010 tax form     5. 1040ez 2010 tax form   Sume las líneas 4a a la 4g 5. 1040ez 2010 tax form     6. 1040ez 2010 tax form   Costo de ampliaciones y mejoras. 1040ez 2010 tax form (Vea Increases to Basis (Aumentos en la Base) en la Publicación 551, en inglés). 1040ez 2010 tax form No incluya ninguna de las ampliaciones o mejoras incluidas en la línea 1 6. 1040ez 2010 tax form     7. 1040ez 2010 tax form   Tasaciones tributarias especiales pagadas por concepto de mejoras locales, tales como calles y aceras o banquetas 7. 1040ez 2010 tax form     8. 1040ez 2010 tax form   Otros aumentos en la base 8. 1040ez 2010 tax form     9. 1040ez 2010 tax form   Sume las líneas 3, 5, 6, 7 y 8 9. 1040ez 2010 tax form     10. 1040ez 2010 tax form   Depreciación (permitida o permisible) relacionada con el uso comercial o alquiler de la vivienda 10. 1040ez 2010 tax form 0   11. 1040ez 2010 tax form   Otras disminuciones en la base (Vea Decreases to Basis (Disminuciones en la Base) en la Publicación 551, en inglés). 1040ez 2010 tax form 11. 1040ez 2010 tax form     12. 1040ez 2010 tax form   Sume las líneas 10 y 11 12. 1040ez 2010 tax form     13. 1040ez 2010 tax form   Costo u otra base (ajustada) de la vivienda dañada o destruida. 1040ez 2010 tax form Reste la línea 12 de la línea 9. 1040ez 2010 tax form Anote dicha cantidad aquí y en la línea 2 del Anexo 20 13. 1040ez 2010 tax form     Instrucciones para la Hoja de Trabajo A. 1040ez 2010 tax form Si usted usa la Hoja de Trabajo A para calcular el costo u otra base (ajustada) de su vivienda, siga estas instrucciones. 1040ez 2010 tax form NO utilice esta hoja de trabajo para determinar el costo de su base si adquirió interés de su vivienda por un difunto que falleció en 2010 y el albacea de su caudal hereditario presentó el Formulario 8939. 1040ez 2010 tax form SI. 1040ez 2010 tax form . 1040ez 2010 tax form . 1040ez 2010 tax form   ENTONCES. 1040ez 2010 tax form . 1040ez 2010 tax form . 1040ez 2010 tax form usted heredó su vivienda de un difunto que falleció antes o depués del 2010, o de un difunto que falleció en el 2010 pero la albacea de su caudal hereditario no presentó el Formulario 8939. 1040ez 2010 tax form 1 omita las líneas 1 a la 4 de la hoja de trabajo. 1040ez 2010 tax form 2 encuentre su base utilizando las reglas bajo Inherited Property (Bienes Heredados) en la Publicación 551, en inglés. 1040ez 2010 tax form Anote esta cantidad en la línea 5 de la hoja de trabajo. 1040ez 2010 tax form 3 llene las líneas 6 a la 13 de la hoja de trabajo. 1040ez 2010 tax form usted recibió su vivienda como un regalo (donación) 1 lea Property Received as Gift (Bienes Recibidos como Regalo (Donación)) en la Publicación 551, en inglés, y anote en las líneas 1 y 3 de la hoja de trabajo la base ajustada del donante o el valor justo de mercado de la vivienda en el momento del regalo (donación), lo que proceda. 1040ez 2010 tax form 2 si usted puede sumar algún impuesto federal sobre donaciones a su base, anote esa cantidad en la línea 5 de la hoja de trabajo. 1040ez 2010 tax form 3 llene el resto de la hoja de trabajo. 1040ez 2010 tax form usted recibió su vivienda como un canje por otra propiedad 1 anote en la línea 1 de la hoja de trabajo el valor justo de mercado de la otra propiedad al tiempo del canje. 1040ez 2010 tax form (Pero si usted recibió su vivienda como un canje por su vivienda anterior antes del 7 de mayo de 1997, y tuvo una ganancia en que el canje se aplazó utilizando el Formulario 2119, anote en la línea 1 de la hoja de trabajo la base ajustada de la vivienda nueva que aparece en dicho formulario). 1040ez 2010 tax form 2 llene el resto de la hoja de trabajo. 1040ez 2010 tax form usted construyó su vivienda 1 sume el precio de compra del terreno y el costo de la construcción de la vivienda. 1040ez 2010 tax form Anote ese total en la línea 1 de la hoja de trabajo. 1040ez 2010 tax form (Sin embargo, si usted presentó un Formulario 2119 para aplazar ganancias en la venta de una vivienda anterior antes del 7 de mayo de 1997, anote en la línea 1 de la hoja de trabajo la base ajustada de la vivienda nueva que aparece en dicho formulario). 1040ez 2010 tax form 2 llene el resto de la hoja de trabajo. 1040ez 2010 tax form usted recibió su vivienda de su cónyuge después del 18 de julio de 1984 1 ignore las líneas 1 a la 4 de la hoja de trabajo. 1040ez 2010 tax form 2 anote en la línea 5 de la hoja de trabajo el costo u otra base (ajustada) de su cónyuge en la vivienda justo antes de que usted la haya recibido. 1040ez 2010 tax form 3 llene las líneas 6 a la 13 de la hoja de trabajo, haciendo ajustes a la base solamente por acontecimientos después del traspaso. 1040ez 2010 tax form usted fue dueño de una vivienda conjuntamente con su cónyuge, el cual le traspasó su participación en la misma después del 18 de julio de 1984     llene una hoja de trabajo, haciendo los ajustes a la base por acontecimientos tanto antes como después del traspaso. 1040ez 2010 tax form   usted recibió su vivienda de su cónyuge antes del 19 de julio de 1984 1 ignore las líneas 1 a la 4 de la hoja de trabajo. 1040ez 2010 tax form 2 anote en la línea 5 de la hoja de trabajo el valor justo de mercado de la vivienda cuando usted la recibió. 1040ez 2010 tax form 3 llene las líneas 6 a la 13 de la hoja de trabajo, ajustando la base solamente por acontecimientos después del traspaso. 1040ez 2010 tax form usted fue dueño de una vivienda conjuntamente con su cónyuge, el cual le traspasó su participación en la misma antes del 19 de julio de 1984 1 llene una hoja de trabajo, las líneas 1 a la 13, ajustando la base solamente por acontecimientos antes del traspaso. 1040ez 2010 tax form 2 multiplique la cantidad de la línea 13 de esa hoja de trabajo por 0. 1040ez 2010 tax form 5 para obtener la base ajustada de la mitad de su participación a la hora del traspaso. 1040ez 2010 tax form 3 multiplique el valor justo de mercado de la vivienda a la hora del traspaso por 0. 1040ez 2010 tax form 5. 1040ez 2010 tax form Generalmente, el resultado corresponde a la base de la mitad de la participación de su cónyuge. 1040ez 2010 tax form 4 sume las cantidades de los pasos 2 y 3 y anote el total en la línea 5 de una segunda hoja de trabajo. 1040ez 2010 tax form 5 complete el resto de la segunda hoja de trabajo, ajustando la base solamente por acontecimientos después del traspaso. 1040ez 2010 tax form usted fue dueño de su vivienda conjuntamente con alguien (aparte de cónyuges que presenten una declaración conjunta) 1 llene las líneas 1 a la 13 de la hoja de trabajo. 1040ez 2010 tax form 2 multiplique la cantidad de la línea 13 para obtener la base ajustada suya por el porcentaje de su parte de su participación de la vivienda. 1040ez 2010 tax form Instrucciones para la Hoja de Trabajo A. 1040ez 2010 tax form (Continuación) SI. 1040ez 2010 tax form . 1040ez 2010 tax form . 1040ez 2010 tax form   ENTONCES. 1040ez 2010 tax form . 1040ez 2010 tax form . 1040ez 2010 tax form usted fue dueño de su vivienda conjuntamente con su cónyuge que falleció antes de 2010 y antes de un hecho fortuito 1 llene una hoja de trabajo, las líneas 1 a la 13, incluyendo ajustes a la base solamente por acontecimientos antes del fallecimiento de su cónyuge. 1040ez 2010 tax form 2 multiplique la cantidad de la línea 13 de esa hoja de trabajo por 0. 1040ez 2010 tax form 5 para obtener la base ajustada de la mitad de su participación a la fecha del fallecimiento. 1040ez 2010 tax form 3 calcule la base de la mitad de la participación de su cónyuge. 1040ez 2010 tax form Esto corresponde a la mitad del valor justo de mercado en la fecha del fallecimiento (o la valoración alternativa usada posteriormente para propósitos de los impuestos de sucesiones o caudales hereditarios). 1040ez 2010 tax form (La base de su mitad seguirá siendo la mitad de la base ajustada determinada en el paso 2). 1040ez 2010 tax form 4 sume las cantidades de los pasos 2 y 3 y anote el total en la línea 5 de una segunda hoja de trabajo. 1040ez 2010 tax form 5 complete las líneas 6 a la 13 de la segunda hoja de trabajo, ajustando la base solamente por acontecimientos después del fallecimiento de su cónyuge. 1040ez 2010 tax form usted fue dueño de su vivienda conjuntamente con su cónyuge que falleció antes de 2010 y antes de un hecho fortuito y, su vivienda permanente está en un estado donde rigen las leyes de la comunidad de bienes matrimoniales 1 ignore las líneas 1 a la 4 de la hoja de trabajo. 1040ez 2010 tax form 2 anote la cantidad de su base en la línea 5 de la hoja de trabajo. 1040ez 2010 tax form Generalmente, esto corresponde al valor justo de mercado de la vivienda al momento del fallecimiento. 1040ez 2010 tax form (No obstante, vea Community Property (Comunidad de Bienes Matrimoniales) en la Publicación 551, en inglés, para reglas especiales). 1040ez 2010 tax form 3 llene el resto de la hoja de trabajo, ajustando la base solamente por acontecimientos después del fallecimiento de su cónyuge. 1040ez 2010 tax form usted fue dueño de su vivienda conjuntamente con alguien (que no sean cónyuges que presenten la declaración conjunta) que falleció antes de 2010 y antes de un hecho fortuito 1 llene las líneas 1 a la 13 de la hoja de trabajo, incluyendo ajustes a la base solamente por acontecimientos antes del fallecimiento del codueño. 1040ez 2010 tax form 2 multiplique la cantidad de la línea 13 por el porcentaje de su parte de su participación de la vivienda para obtener la base ajustada suyo en la fecha del fallecimiento. 1040ez 2010 tax form 3 multiplique el valor justo del mercado en la fecha del fallecimiento (o use la valuació alterna usada posteriormente para propositos de los impuestos de sucesiones o caudales hereditarios) por el porcentaje que corresponde a la participación del codueño. 1040ez 2010 tax form Ésta es la base para el interés parcial del codueño. 1040ez 2010 tax form 4 sume las cantidades de los pasos 2 y 3 y anote el total en la línea 5 de una segunda hoja de trabajo. 1040ez 2010 tax form 5 complete las líneas 6 a la 13 de la segunda hoja de trabajo incluyendo ajustes a la base solamente por acontecimientos después del fallecimiento del codueño. 1040ez 2010 tax form alguna vez su vivienda sufrió daños debido a un hecho fortuito anterior 1 en la línea 8 de la hoja de trabajo, anote toda cantidad que haya gastado para restaurar la vivienda a su estado original antes del hecho fortuito anterior. 1040ez 2010 tax form 2 en la línea 11 anote: todo reembolso de seguros que usted haya recibido (o espera recibir) por la pérdida anterior  y toda pérdida por hecho fortuito deducible de años anteriores no cubierta por  su seguro. 1040ez 2010 tax form la persona que le vendió su vivienda pagó puntos sobre su préstamo y usted compró su vivienda después de 1990 pero antes del 4 de abril de 1994   en la línea 2 anote los puntos pagados por el vendedor solamente si usted los dedujo como intereses hipotecarios de la vivienda en el año en que fueron pagados (a no ser que haya utilizado los puntos pagados por el vendedor para reducir la cantidad de la línea 1). 1040ez 2010 tax form la persona que le vendió su vivienda pagó puntos sobre su préstamo y usted compró su vivienda después del 3 de abril de 1994   en la línea 2 anote los puntos pagados por el vendedor aun si usted no los dedujo (a no ser que haya utilizado los puntos pagados por el vendedor para reducir la cantidad de la línea 1). 1040ez 2010 tax form usted usó parte de la propiedad como su vivienda y parte de ella para propósitos comerciales o para generar ingresos de alquiler   usted debe asignar las anotaciones en la Hoja de Trabajo A entre la parte personal (columna (a)) y la parte comercial/de alquiler (columna (b)). 1040ez 2010 tax form no corresponde ninguno de los puntos anteriores   llene completamente la hoja de trabajo. 1040ez 2010 tax form Prev  Up  Next   Home   More Online Publications
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The 1040ez 2010 Tax Form

1040ez 2010 tax form 2. 1040ez 2010 tax form   Accounting Methods Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: Accounting MethodsCash Method Accrual Method Farm Inventory Cash Versus Accrual Method Special Methods of Accounting Combination Method Changes in Methods of Accounting Introduction You must use an accounting method that clearly shows your income and expenses. 1040ez 2010 tax form You must also figure your taxable income and file an income tax return for an annual accounting period called a tax year. 1040ez 2010 tax form This chapter discusses accounting methods. 1040ez 2010 tax form For information on accounting periods, see Publication 538, Accounting Periods and Methods, and the Instructions for Form 1128, Application To Adopt, Change, or Retain a Tax Year. 1040ez 2010 tax form Topics - This chapter discusses: Cash method Accrual method Farm inventory Special methods of accounting Changes in methods of accounting Useful Items - You may want to see: Publication 538 Accounting Periods and Methods 535 Business Expenses Form (and Instructions) 1128 Application To Adopt, Change, or Retain a Tax Year 3115 Application for Change in Accounting Method See chapter 16 for information about getting publications and forms. 1040ez 2010 tax form Accounting Methods An accounting method is a set of rules used to determine when and how your income and expenses are reported on your tax return. 1040ez 2010 tax form Your accounting method includes not only your overall method of accounting, but also the accounting treatment you use for any material item. 1040ez 2010 tax form A material item is one that affects the proper time for inclusion of income or allowance of a deduction. 1040ez 2010 tax form An item considered material for financial statement purposes is generally also considered material for income tax purposes. 1040ez 2010 tax form See Publication 538 for more information. 1040ez 2010 tax form You generally choose an accounting method for your farm business when you file your first income tax return that includes a Schedule F (Form 1040), Profit or Loss From Farming. 1040ez 2010 tax form If you later want to change your accounting method, you generally must get IRS approval. 1040ez 2010 tax form How to obtain IRS approval is discussed later under Changes in Methods of Accounting . 1040ez 2010 tax form Types of accounting methods. 1040ez 2010 tax form   Generally, you can use any of the following accounting methods. 1040ez 2010 tax form Each method is discussed in detail below. 1040ez 2010 tax form Cash method. 1040ez 2010 tax form Accrual method. 1040ez 2010 tax form Special methods of accounting for certain items of income and expenses. 1040ez 2010 tax form Combination (hybrid) method using elements of two or more of the above. 1040ez 2010 tax form Business and other items. 1040ez 2010 tax form   You can account for business and personal items using different accounting methods. 1040ez 2010 tax form For example, you can figure your business income under an accrual method, even if you use the cash method to figure personal items. 1040ez 2010 tax form Two or more businesses. 1040ez 2010 tax form   If you operate two or more separate and distinct businesses, you can use a different accounting method for each business. 1040ez 2010 tax form Generally, no business is separate and distinct unless a complete and separate set of books and records is maintained for each business. 1040ez 2010 tax form Cash Method Most farmers use the cash method because they find it easier to keep records using the cash method. 1040ez 2010 tax form However, certain farm corporations and partnerships and all tax shelters must use an accrual method of accounting. 1040ez 2010 tax form See Accrual Method Required , later. 1040ez 2010 tax form Income Under the cash method, include in your gross income all items of income you actually or constructively received during the tax year. 1040ez 2010 tax form Items of income include money received as well as property or services received. 1040ez 2010 tax form If you receive property or services, you must include the fair market value (FMV) of the property or services in income. 1040ez 2010 tax form See chapter 3 for information on how to report farm income on your income tax return. 1040ez 2010 tax form Constructive receipt. 1040ez 2010 tax form   Income is constructively received when an amount is credited to your account or made available to you without restriction. 1040ez 2010 tax form You do not need to have possession of the income for it to be treated as income for the tax year. 1040ez 2010 tax form If you authorize someone to be your agent and receive income for you, you are considered to have received the income when your agent receives it. 1040ez 2010 tax form Income is not constructively received if your receipt of the income is subject to substantial restrictions or limitations. 1040ez 2010 tax form Direct payments and counter-cyclical payments. 1040ez 2010 tax form   If you received direct payments or counter-cyclical payments under Subtitle A or C of the Farm Security and Rural Investment Act of 2002, you will not be considered to have constructively received a payment merely because you had the option to receive it in the year before it is required to be paid. 1040ez 2010 tax form Delaying receipt of income. 1040ez 2010 tax form   You cannot hold checks or postpone taking possession of similar property from one tax year to another to avoid paying tax on the income. 1040ez 2010 tax form You must report the income in the year the money or property is received or made available to you without restriction. 1040ez 2010 tax form Example. 1040ez 2010 tax form Frances Jones, a farmer, was entitled to receive a $10,000 payment on a grain contract in December 2013. 1040ez 2010 tax form She was told in December that her payment was available. 1040ez 2010 tax form She requested not to be paid until January 2014. 1040ez 2010 tax form However, she must still include this payment in her 2013 income because it was made available to her in 2013. 1040ez 2010 tax form Debts paid by another person or canceled. 1040ez 2010 tax form   If your debts are paid by another person or are canceled by your creditors, you may have to report part or all of this debt relief as income. 1040ez 2010 tax form If you receive income in this way, you constructively receive the income when the debt is canceled or paid. 1040ez 2010 tax form See Cancellation of Debt in chapter 3. 1040ez 2010 tax form Deferred payment contract. 1040ez 2010 tax form   If you sell an item under a deferred payment contract that calls for payment in a future year, there is no constructive receipt in the year of sale. 1040ez 2010 tax form However, if the sales contract states that you have the right to the proceeds of the sale from the buyer at any time after delivery of the item, then you must include the sales price in income in the year of the sale, regardless of when you actually receive payment. 1040ez 2010 tax form Example. 1040ez 2010 tax form You are a farmer who uses the cash method and a calendar tax year. 1040ez 2010 tax form You sell grain in December 2013 under a bona fide arm's-length contract that calls for payment in 2014. 1040ez 2010 tax form You include the proceeds from the sale in your 2014 gross income since that is the year payment is received. 1040ez 2010 tax form However, if the contract states that you have the right to the proceeds from the buyer at any time after the grain is delivered, you must include the sales price in your 2013 income, regardless of when you actually receive payment. 1040ez 2010 tax form Repayment of income. 1040ez 2010 tax form   If you include an amount in income and in a later year you have to repay all or part of it, then you can usually deduct the repayment in the year repaid. 1040ez 2010 tax form If the repayment is more than $3,000, a special rule applies. 1040ez 2010 tax form For details, see Repayments in chapter 11 of Publication 535, Business Expenses. 1040ez 2010 tax form Expenses Under the cash method, generally you deduct expenses in the tax year you pay them. 1040ez 2010 tax form This includes business expenses for which you contest liability. 1040ez 2010 tax form However, you may not be able to deduct an expense paid in advance or you may be required to capitalize certain costs, as explained under Uniform Capitalization Rules in chapter 6. 1040ez 2010 tax form See chapter 4 for information on how to deduct farm business expenses on your income tax return. 1040ez 2010 tax form Prepayment. 1040ez 2010 tax form   Generally, you cannot deduct expenses paid in advance. 1040ez 2010 tax form This rule applies to any expense paid far enough in advance to, in effect, create an asset with a useful life extending substantially beyond the end of the current tax year. 1040ez 2010 tax form Example. 1040ez 2010 tax form On November 1, 2013, you signed and paid $3,600 for a 3-year (36-month) insurance contract for equipment. 1040ez 2010 tax form In 2013, you are allowed to deduct only $200 (2/36 x $3,600) of the cost of the policy that is attributable to 2013. 1040ez 2010 tax form In 2014, you'll be able to deduct $1,200 (12/36 x $3,600); in 2015, you'll be able to deduct $1,200 (12/36 x $3,600); and in 2016 you'll be able to deduct the remaining balance of $1,000. 1040ez 2010 tax form An exception applies if the expense qualifies for the 12-month rule. 1040ez 2010 tax form See Publication 538 for more information and examples. 1040ez 2010 tax form See chapter 4 for special rules for prepaid farm supplies and prepaid livestock feed. 1040ez 2010 tax form Accrual Method Under an accrual method of accounting, you generally report income in the year earned and deduct or capitalize expenses in the year incurred. 1040ez 2010 tax form The purpose of an accrual method of accounting is to correctly match income and expenses. 1040ez 2010 tax form Certain businesses engaged in farming must use an accrual method of accounting for its farm business and for sales and purchases of inventory items. 1040ez 2010 tax form See Accrual Method Required and Farm Inventory , later. 1040ez 2010 tax form Income Generally, you include an amount in income for the tax year in which all events that fix your right to receive the income have occurred, and you can determine the amount with reasonable accuracy. 1040ez 2010 tax form Under this rule, include an amount in income on the earliest of the following dates. 1040ez 2010 tax form When you receive payment. 1040ez 2010 tax form When the income amount is due to you. 1040ez 2010 tax form When you earn the income. 1040ez 2010 tax form When title passes. 1040ez 2010 tax form If you use an accrual method of accounting, complete Part III of Schedule F (Form 1040) to report your income. 1040ez 2010 tax form Inventory. 1040ez 2010 tax form   If you keep an inventory, generally you must use an accrual method of accounting to determine your gross income. 1040ez 2010 tax form An inventory is necessary to clearly show income when the production, purchase, or sale of merchandise is an income-producing factor. 1040ez 2010 tax form See Publication 538 for more information. 1040ez 2010 tax form Also see Farm Inventory , later, for more information on items that must be included in inventory by farmers and inventory valuation methods for farmers. 1040ez 2010 tax form Expenses Under an accrual method of accounting, you generally deduct or capitalize a business expense when both of the following apply. 1040ez 2010 tax form The all-events test has been met. 1040ez 2010 tax form This test is met when: All events have occurred that fix the fact that you have a liability, and The amount of the liability can be determined with reasonable accuracy. 1040ez 2010 tax form Economic performance has occurred. 1040ez 2010 tax form Economic performance. 1040ez 2010 tax form   Generally, you cannot deduct or capitalize a business expense until economic performance occurs. 1040ez 2010 tax form If your expense is for property or services provided to you, or for your use of property, economic performance occurs as the property or services are provided or as the property is used. 1040ez 2010 tax form If your expense is for property or services you provide to others, economic performance occurs as you provide the property or services. 1040ez 2010 tax form Example. 1040ez 2010 tax form Jane, who is a farmer, uses a calendar tax year and an accrual method of accounting. 1040ez 2010 tax form She entered into a contract with ABC Farm Consulting in 2012. 1040ez 2010 tax form The contract stated that Jane pay ABC Farm Consulting $2,000 in December 2012. 1040ez 2010 tax form It further stipulates that ABC Farm Consulting will develop a plan for integrating her farm with a larger farm operation based in a neighboring state by March 1, 2013. 1040ez 2010 tax form Jane paid ABC Farm Consulting $2,000 in December 2012. 1040ez 2010 tax form Integration of operations according to the plan began in May 2013 and they completed the integration in December 2013. 1040ez 2010 tax form Economic performance for Jane's liability in the contract occurs as the services are provided. 1040ez 2010 tax form Jane incurs the $2,000 cost in 2013. 1040ez 2010 tax form An exception to the economic performance rule allows certain recurring items to be treated as incurred during a tax year even though economic performance has not occurred. 1040ez 2010 tax form For more information, see Economic Performance in Publication 538. 1040ez 2010 tax form Special rule for related persons. 1040ez 2010 tax form   Business expenses and interest owed to a related person who uses the cash method of accounting are not deductible until you make the payment and the corresponding amount is includible in the related person's gross income. 1040ez 2010 tax form Determine the relationship for this rule as of the end of the tax year for which the expense or interest would otherwise be deductible. 1040ez 2010 tax form For more information, see Internal Revenue Code section 267. 1040ez 2010 tax form Accrual Method Required Generally, the following businesses, if engaged in farming, must use an accrual method of accounting. 1040ez 2010 tax form A corporation (other than a family corporation) that had gross receipts of more than $1,000,000 for any tax year beginning after 1975. 1040ez 2010 tax form A family corporation that had gross receipts of more than $25,000,000 for any tax year beginning after 1985. 1040ez 2010 tax form A partnership with a corporation as a partner, if that corporation meets the requirements of (1) or (2) above. 1040ez 2010 tax form A tax shelter. 1040ez 2010 tax form Note. 1040ez 2010 tax form Items (1), (2), and (3) above do not apply to an S corporation or a business operating a nursery or sod farm, or the raising or harvesting of trees (other than fruit and nut trees). 1040ez 2010 tax form Family corporation. 1040ez 2010 tax form   A family corporation is generally a corporation that meets one of the following ownership requirements. 1040ez 2010 tax form Members of the same family own at least 50% of the total combined voting power of all classes of stock entitled to vote and at least 50% of the total shares of all other classes of stock of the corporation. 1040ez 2010 tax form Members of two families have owned, directly or indirectly, since October 4, 1976, at least 65% of the total combined voting power of all classes of voting stock and at least 65% of the total shares of all other classes of the corporation's stock. 1040ez 2010 tax form Members of three families have owned, directly or indirectly, since October 4, 1976, at least 50% of the total combined voting power of all classes of voting stock and at least 50% of the total shares of all other classes of the corporation's stock. 1040ez 2010 tax form For more information on family corporations, see Internal Revenue Code section 447. 1040ez 2010 tax form Tax shelter. 1040ez 2010 tax form   A tax shelter is a partnership, noncorporate enterprise, or S corporation that meets either of the following tests. 1040ez 2010 tax form Its principal purpose is the avoidance or evasion of federal income tax. 1040ez 2010 tax form It is a farming syndicate. 1040ez 2010 tax form A farming syndicate is an entity that meets either of the following tests. 1040ez 2010 tax form Interests in the activity have been offered for sale in an offering required to be registered with a federal or state agency with the authority to regulate the offering of securities for sale. 1040ez 2010 tax form More than 35% of the losses during the tax year are allocable to limited partners or limited entrepreneurs. 1040ez 2010 tax form   A “limited partner” is one whose personal liability for partnership debts is limited to the money or other property the partner contributed or is required to contribute to the partnership. 1040ez 2010 tax form   A “limited entrepreneur” is one who has an interest in an enterprise other than as a limited partner and does not actively participate in the management of the enterprise. 1040ez 2010 tax form Farm Inventory If you are required to keep an inventory, you should keep a complete record of your inventory as part of your farm records. 1040ez 2010 tax form This record should show the actual count or measurement of the inventory. 1040ez 2010 tax form It should also show all factors that enter into its valuation, including quality and weight, if applicable. 1040ez 2010 tax form Hatchery business. 1040ez 2010 tax form   If you are in the hatchery business, and use an accrual method of accounting, you must include in inventory eggs in the process of incubation. 1040ez 2010 tax form Products held for sale. 1040ez 2010 tax form   All harvested and purchased farm products held for sale or for feed or seed, such as grain, hay, silage, concentrates, cotton, tobacco, etc. 1040ez 2010 tax form , must be included in inventory. 1040ez 2010 tax form Supplies. 1040ez 2010 tax form   Supplies acquired for sale or that become a physical part of items held for sale must be included in inventory. 1040ez 2010 tax form Deduct the cost of supplies in the year used or consumed in operations. 1040ez 2010 tax form Do not include incidental supplies in inventory as these are deductible in the year of purchase. 1040ez 2010 tax form Livestock. 1040ez 2010 tax form   Livestock held primarily for sale must be included in inventory. 1040ez 2010 tax form Livestock held for draft, breeding, or dairy purposes can either be depreciated or included in inventory. 1040ez 2010 tax form See also Unit-livestock-price method , later. 1040ez 2010 tax form If you are in the business of breeding and raising chinchillas, mink, foxes, or other fur-bearing animals, these animals are livestock for inventory purposes. 1040ez 2010 tax form Growing crops. 1040ez 2010 tax form   Generally, growing crops are not required to be included in inventory. 1040ez 2010 tax form However, if the crop has a preproductive period of more than 2 years, you may have to capitalize (or include in inventory) costs associated with the crop. 1040ez 2010 tax form See Uniform capitalization rules below. 1040ez 2010 tax form Also see Uniform Capitalization Rules in  chapter 6. 1040ez 2010 tax form Items to include in inventory. 1040ez 2010 tax form   Your inventory should include all items held for sale, or for use as feed, seed, etc. 1040ez 2010 tax form , whether raised or purchased, that are unsold at the end of the year. 1040ez 2010 tax form Uniform capitalization rules. 1040ez 2010 tax form   The following applies if you are required to use an accrual method of accounting. 1040ez 2010 tax form The uniform capitalization rules apply to all costs of raising a plant, even if the preproductive period of raising a plant is 2 years or less. 1040ez 2010 tax form The costs of animals are subject to the uniform capitalization rules. 1040ez 2010 tax form Inventory valuation methods. 1040ez 2010 tax form   The following methods, described below, are those generally available for valuing inventory. 1040ez 2010 tax form The method you use must conform to generally accepted accounting principles for similar businesses and must clearly reflect income. 1040ez 2010 tax form Cost. 1040ez 2010 tax form Lower of cost or market. 1040ez 2010 tax form Farm-price method. 1040ez 2010 tax form Unit-livestock-price method. 1040ez 2010 tax form Cost and lower of cost or market methods. 1040ez 2010 tax form   See Publication 538 for information on these valuation methods. 1040ez 2010 tax form If you value your livestock inventory at cost or the lower of cost or market, you do not need IRS approval to change to the unit-livestock-price method. 1040ez 2010 tax form However, if you value your livestock inventory using the farm-price method, then you must obtain permission from the IRS to change to the unit-livestock-price method. 1040ez 2010 tax form Farm-price method. 1040ez 2010 tax form   Under this method, each item, whether raised or purchased, is valued at its market price less the direct cost of disposition. 1040ez 2010 tax form Market price is the current price at the nearest market in the quantities you usually sell. 1040ez 2010 tax form Cost of disposition includes broker's commissions, freight, hauling to market, and other marketing costs. 1040ez 2010 tax form If you use this method, you must use it for your entire inventory, except that livestock can be inventoried under the unit-livestock-price method. 1040ez 2010 tax form Unit-livestock-price method. 1040ez 2010 tax form   This method recognizes the difficulty of establishing the exact costs of producing and raising each animal. 1040ez 2010 tax form You group or classify livestock according to type and age and use a standard unit price for each animal within a class or group. 1040ez 2010 tax form The unit price you assign should reasonably approximate the normal costs incurred in producing the animals in such classes. 1040ez 2010 tax form Unit prices and classifications are subject to approval by the IRS on examination of your return. 1040ez 2010 tax form You must annually reevaluate your unit livestock prices and adjust the prices upward or downward to reflect increases or decreases in the costs of raising livestock. 1040ez 2010 tax form IRS approval is not required for these adjustments. 1040ez 2010 tax form Any other changes in unit prices or classifications do require IRS approval. 1040ez 2010 tax form   If you use this method, include all raised livestock in inventory, regardless of whether they are held for sale or for draft, breeding, sport, or dairy purposes. 1040ez 2010 tax form This method accounts only for the increase in cost of raising an animal to maturity. 1040ez 2010 tax form It does not provide for any decrease in the animal's market value after it reaches maturity. 1040ez 2010 tax form Also, if you raise cattle, you are not required to inventory hay you grow to feed your herd. 1040ez 2010 tax form   Do not include sold or lost animals in the year-end inventory. 1040ez 2010 tax form If your records do not show which animals were sold or lost, treat the first animals acquired as sold or lost. 1040ez 2010 tax form The animals on hand at the end of the year are considered those most recently acquired. 1040ez 2010 tax form   You must include in inventory all livestock purchased primarily for sale. 1040ez 2010 tax form You can choose either to include in inventory or depreciate livestock purchased for draft, breeding, sport or dairy purposes. 1040ez 2010 tax form However, you must be consistent from year to year, regardless of the method you have chosen. 1040ez 2010 tax form You cannot change your method without obtaining approval from the IRS. 1040ez 2010 tax form   You must include in inventory animals purchased after maturity or capitalize them at their purchase price. 1040ez 2010 tax form If the animals are not mature at purchase, increase the cost at the end of each tax year according to the established unit price. 1040ez 2010 tax form However, in the year of purchase, do not increase the cost of any animal purchased during the last 6 months of the year. 1040ez 2010 tax form This “no increase” rule does not apply to tax shelters which must make an adjustment for any animal purchased during the year. 1040ez 2010 tax form It also does not apply to taxpayers that must make an adjustment to reasonably reflect the particular period in the year in which animals are purchased, if necessary to avoid significant distortions in income. 1040ez 2010 tax form Uniform capitalization rules. 1040ez 2010 tax form   A farmer can determine costs required to be allocated under the uniform capitalization rules by using the farm-price or unit-livestock-price inventory method. 1040ez 2010 tax form This applies to any plant or animal, even if the farmer does not hold or treat the plant or animal as inventory property. 1040ez 2010 tax form Cash Versus Accrual Method The following examples compare the cash and accrual methods of accounting. 1040ez 2010 tax form Example 1. 1040ez 2010 tax form You are a farmer who uses an accrual method of accounting. 1040ez 2010 tax form You keep your books on the calendar year basis. 1040ez 2010 tax form You sell grain in December 2013 but you are not paid until January 2014. 1040ez 2010 tax form Because the accrual method was used and 2013 was the tax year in which the grain was sold, you must both include the sales proceeds and deduct the costs incurred in producing the grain on your 2013 tax return. 1040ez 2010 tax form Example 2. 1040ez 2010 tax form Assume the same facts as in Example 1 except that you use the cash method and there was no constructive receipt of the sales proceeds in 2013. 1040ez 2010 tax form Under this method, you include the sales proceeds in income for 2014, the year you receive payment. 1040ez 2010 tax form Deduct the costs of producing the grain in the year you pay for them. 1040ez 2010 tax form Special Methods of Accounting There are special methods of accounting for certain items of income and expense. 1040ez 2010 tax form Crop method. 1040ez 2010 tax form   If you do not harvest and dispose of your crop in the same tax year that you plant it, you can, with IRS approval, use the crop method of accounting. 1040ez 2010 tax form You cannot use the crop method for any tax return, including your first tax return, unless you receive approval from the IRS. 1040ez 2010 tax form Under this method, you deduct the entire cost of producing the crop, including the expense of seed or young plants, in the year you realize income from the crop. 1040ez 2010 tax form    See chapter 4 for details on deducting the costs of operating a farm. 1040ez 2010 tax form Also see Regulations section 1. 1040ez 2010 tax form 162-12. 1040ez 2010 tax form Other special methods. 1040ez 2010 tax form   Other special methods of accounting apply to the following items. 1040ez 2010 tax form Amortization, see chapter 7. 1040ez 2010 tax form Casualties, see chapter 11. 1040ez 2010 tax form Condemnations, see chapter 11. 1040ez 2010 tax form Depletion, see chapter 7. 1040ez 2010 tax form Depreciation, see chapter 7. 1040ez 2010 tax form Farm business expenses, see chapter 4. 1040ez 2010 tax form Farm income, see chapter 3. 1040ez 2010 tax form Installment sales, see chapter 10. 1040ez 2010 tax form Soil and water conservation expenses, see chapter 5. 1040ez 2010 tax form Thefts, see chapter 11. 1040ez 2010 tax form Combination Method Generally, you can use any combination of cash, accrual, and special methods of accounting if the combination clearly shows your income and expenses and you use it consistently. 1040ez 2010 tax form However, the following restrictions apply. 1040ez 2010 tax form If you use the cash method for figuring your income, you must use the cash method for reporting your expenses. 1040ez 2010 tax form If you use an accrual method for reporting your expenses, you must use an accrual method for figuring your income. 1040ez 2010 tax form Changes in Methods of Accounting A change in your method of accounting includes a change in: Your overall method, such as from the cash method to an accrual method, and Your treatment of any material item, such as a change in your method of valuing inventory (for example, a change from the farm-price method to the unit-livestock-price method, discussed earlier). 1040ez 2010 tax form Generally, once you have set up your accounting method, you must receive approval from the IRS before you can change to another method of accounting. 1040ez 2010 tax form You may also have to pay a fee. 1040ez 2010 tax form To obtain approval, you must generally file Form 3115. 1040ez 2010 tax form There are instances when you can obtain automatic consent to change certain methods of accounting. 1040ez 2010 tax form See the List of Automatic Accounting Method Changes located in the Instructions for Form 3115. 1040ez 2010 tax form For more information on changes in methods of accounting, see Form 3115 and the Instructions for Form 3115. 1040ez 2010 tax form Also see Publication 538. 1040ez 2010 tax form Prev  Up  Next   Home   More Online Publications