Filing Your Taxes Online is Fast, Easy and Secure.
Start now and receive your tax refund in as little as 7 days.

1. Get Answers

Your online questions are customized to your unique tax situation.

2. Maximize your Refund

Find tax credits for everything from school tuition to buying a hybri

3. E-File for FREE

E-file free with direct deposit to get your refund in as few as 7 days.

Filing your taxes with paper mail can be difficult and it could take weeks for your refund to arrive. IRS e-file is easy, fast and secure. There is no paperwork going to the IRS so tax refunds can be processed in as little as 7 days with direct deposit. As you prepare your taxes online, you can see your tax refund in real time.

FREE audit support and representation from an enrolled agent – NEW and only from H&R Block

2010 1040ez Form

Download 2011 Tax FormsFree Online 1040x FilingDo Students Need To File TaxesIrs Form 1040x 2013H&r Block 2010 Tax SoftwareH And R Block On LineFederal 1040ez 2013Free 1040 Tax ReturnTax Software For 1040nrFind State Tax FormsWhere Can I File My 2011 Taxes Online1040ez Instruction BookFree Tax Usa 20111040ez DownloadAmended 1040Tax Form For 2011Free Tax Amended ReturnMilitary Income TaxWww Ir Gov2010 Form 1040ez1040ez Form For 20101040ez Form Printable2012 Tax Forms OnlineAmendment On TaxesFree State TaxesWww Freetaxhelp ComH&r Block Free Tax ReturnsFederal Tax Forms For 2012Taxes Supplemental Security Income Ssi2012 Free TaxesFree 1040ez Tax ReturnHow To File A Late Tax Return 2011How To File An Amended Return For 2012Irs1040ez Form2012 Tax Forms IrsWww Freefilefillableforms Com Ffa Freefileforms HtmFiling State ReturnsIrs Tax Forms For 2012Handr Block Free FileMilitary Tax Deductions

2010 1040ez Form

2010 1040ez form Index A Adjusted basis defined, Adjusted basis defined. 2010 1040ez form Administrative or management activities, Administrative or management activities. 2010 1040ez form Assistance (see Tax help) Attorneys, Place To Meet Patients, Clients, or Customers B Business expenses not for use of home, Business expenses not for use of your home. 2010 1040ez form Business furniture and equipment, Business Furniture and Equipment Business percentage, Business Percentage Business use of the home requirements (see Qualifying for a deduction) C Carryover of expenses, Carryover of unallowed expenses. 2010 1040ez form Casualty losses, Casualty losses. 2010 1040ez form Child and Adult Care Food Program reimbursements, Meals. 2010 1040ez form Computer Listed property, Listed Property D Daycare facilities, Daycare Facility, Standard meal and snack rates. 2010 1040ez form (see also Family daycare providers) Eligible children for standard meal and snack rates, Standard meal and snack rates. 2010 1040ez form Exceptions for regular use requirement, Daycare Facility Family daycare, Standard meal and snack rates. 2010 1040ez form Family daycare provider, Standard meal and snack rates. 2010 1040ez form Meals, Meals. 2010 1040ez form , Standard meal and snack rates. 2010 1040ez form Regular use, Daycare Facility Standard meal and snack rates, Meals. 2010 1040ez form , Standard meal and snack rates. 2010 1040ez form Deduction limit, Deduction Limit Deduction requirements Employee use, Additional tests for employee use. 2010 1040ez form Exceptions to exclusive use, Exceptions to Exclusive Use Exclusive use, Exclusive Use More than one trade or business, More Than One Trade or Business Place to meet clients, Place To Meet Patients, Clients, or Customers Principal place of business, Principal Place of Business Regular use, Regular Use Separate structure, Separate Structure Storage of inventory or product samples, Storage of inventory or product samples. 2010 1040ez form Trade or business use, Trade or Business Use Deductions Figuring, Figuring the Deduction, Part 2—Figure Your Allowable Deduction Limit, Deduction Limit Part-year use, Part-year use. 2010 1040ez form Qualifying for, Qualifying for a Deduction, Separate Structure Rental to employer, Rental to employer. 2010 1040ez form Unreimbursed partnership expenses, Deducting unreimbursed partnership expenses. 2010 1040ez form Using Actual Expenses, Using Actual Expenses Dentists, Place To Meet Patients, Clients, or Customers Depreciation, Property Bought for Business Use 5-year property, Depreciation 7-year property, Depreciation Adjusted basis, Adjusted basis defined. 2010 1040ez form Fair market value, Fair market value defined. 2010 1040ez form Figuring depreciation for the current year, Figuring the depreciation deduction for the current year. 2010 1040ez form Furniture and equipment, Business Furniture and Equipment, Depreciation Home, Depreciating Your Home Nonresidential real property, Figuring the depreciation deduction for the current year. 2010 1040ez form Percentage table for 39-year nonresidential real property, Depreciation table. 2010 1040ez form Permanent improvements, Permanent improvements. 2010 1040ez form , Depreciating permanent improvements. 2010 1040ez form Depreciation of home, Depreciating Your Home Basis adjustment, Basis Adjustment MACRS (Table 2), Depreciation table. 2010 1040ez form Property bought for business use, Depreciation Sale or exchange of home, Depreciation Doctors, Place To Meet Patients, Clients, or Customers E Employee use of home, Additional tests for employee use. 2010 1040ez form Employees Adequately accounting to employer, Adequately accounting to employer. 2010 1040ez form Casualty losses, Casualty losses. 2010 1040ez form Mortgage interest, Deductible mortgage interest. 2010 1040ez form Other expenses, Other expenses. 2010 1040ez form Real estate taxes, Real estate taxes. 2010 1040ez form Exclusive use, Exclusive Use Expenses Casualty losses, Casualty losses. 2010 1040ez form Direct, Actual Expenses Indirect, Actual Expenses Insurance, Insurance. 2010 1040ez form Mortgage interest, Deductible mortgage interest. 2010 1040ez form , Qualified mortgage insurance premiums. 2010 1040ez form Real estate taxes, Real estate taxes. 2010 1040ez form Related to tax-exempt income, Expenses related to tax-exempt income. 2010 1040ez form Rent, Rent. 2010 1040ez form Repairs, Repairs. 2010 1040ez form Security system, Security system. 2010 1040ez form Telephone, Telephone. 2010 1040ez form Types of, Actual Expenses Unrelated, Actual Expenses Utilities and services, Utilities and services. 2010 1040ez form Where to deduct, Where To Deduct F Fair market value, Fair market value defined. 2010 1040ez form Family daycare providers Meal and snack log (Exhibit A), Standard meal and snack rates. 2010 1040ez form Standard meal and snack rates, Standard meal and snack rates. 2010 1040ez form Standard meal and snack rates (Table 3), Standard meal and snack rates. 2010 1040ez form Figuring the deduction Business percentage, Business Percentage Deduction limit, Deduction Limit Form, Useful Items - You may want to see:, Self-Employed Persons, Real estate taxes. 2010 1040ez form 1040, Schedule F, Casualty losses. 2010 1040ez form 2106, Employees 4562, Reporting and recordkeeping requirements. 2010 1040ez form 4684, Casualty losses. 2010 1040ez form 8829, Actual Expenses, Casualty losses. 2010 1040ez form , Business Percentage, Daycare Facility W-2 Reimbursed expenses, Employees Free tax services, Free help with your tax return. 2010 1040ez form Furniture and equipment, Business Furniture and Equipment H Help (see Tax help) Home Business percentage, Business Percentage Depreciation, Depreciating Your Home Sale of, Sale or Exchange of Your Home Home expenses, Can you deduct business use of, Figure A, , Principal Place of Business I Improvements (see Permanent improvements) Insurance, Insurance. 2010 1040ez form Inventory, storage of, Storage of inventory or product samples. 2010 1040ez form L Listed property Computers, Listed Property Defined, Listed Property Employee requirements, Employee. 2010 1040ez form Reporting and recordkeeping requirements, Reporting and recordkeeping requirements. 2010 1040ez form Years following the year placed in service, Years following the year placed in service. 2010 1040ez form M MACRS percentage table 39-year nonresidential real property, Depreciation table. 2010 1040ez form Meals, Meals. 2010 1040ez form Meeting with patients, clients, or customers on premises, Place To Meet Patients, Clients, or Customers More than one place of business, More than one place of business. 2010 1040ez form More than one trade or business, More Than One Trade or Business More-than-50%-use test, More-than-50%-use test. 2010 1040ez form Mortgage interest, Deductible mortgage interest. 2010 1040ez form , Qualified mortgage insurance premiums. 2010 1040ez form P Partners, Partners Partnership expenses, unreimbursed, Deducting unreimbursed partnership expenses. 2010 1040ez form Permanent improvements, Permanent improvements. 2010 1040ez form , Depreciating permanent improvements. 2010 1040ez form Personal property converted to business use, Personal Property Converted to Business Use Place of business, more than one, More than one place of business. 2010 1040ez form Principal place of business, Principal Place of Business Product samples, Storage of inventory or product samples. 2010 1040ez form Property bought for business use Depreciation, Depreciation Section 179 deduction, Property Bought for Business Use, Section 179 Deduction Property converted to business use, Personal, Personal Property Converted to Business Use Publications, Useful Items - You may want to see: (see Tax help) Q Qualifying for a deduction, Qualifying for a Deduction R Real estate taxes, Real estate taxes. 2010 1040ez form Recordkeeping, Recordkeeping Recordkeeping requirements Business furniture and equipment, Reporting and recordkeeping requirements. 2010 1040ez form Family daycare provider meal and snack log (Exhibit A), Standard meal and snack rates. 2010 1040ez form Regular use, Regular Use Reminders, Reminders Rent, Rent. 2010 1040ez form Repairs, Repairs. 2010 1040ez form Reporting requirements Business furniture and equipment, Reporting and recordkeeping requirements. 2010 1040ez form S Sale or exchange of your home, Sale or Exchange of Your Home Basis adjustment, Basis Adjustment Depreciation taken, Depreciation Ownership and use tests, Ownership and use tests. 2010 1040ez form Section 179, Section 179 Deduction Furniture and equipment, Business Furniture and Equipment, Listed Property Listed property, Business Furniture and Equipment, Listed Property Personal property converted to business use, Personal Property Converted to Business Use Property bought for business use, Property Bought for Business Use Security system, Security system. 2010 1040ez form Self-employed persons Deduction of expenses, Self-Employed Persons Separate structure, Separate Structure Simplified Method Actual expenses and depreciation of your home, Actual expenses and depreciation of your home. 2010 1040ez form Allowable area, Allowable area. 2010 1040ez form Business expenses not related to use of the home, Business expenses not related to use of the home. 2010 1040ez form Electing the simplified method, Electing the Simplified Method More than one home, More than one home. 2010 1040ez form More than one qualified business use, More than one qualified business use. 2010 1040ez form Shared use, Shared use. 2010 1040ez form Expenses deductible without regard to business use, Expenses deductible without regard to business use. 2010 1040ez form No carryover of unallowed expenses, No deduction of carryover of actual expenses. 2010 1040ez form Simplified amount, Simplified Amount Space used regularly for daycare, Space used regularly for daycare. 2010 1040ez form Using the simplified method, Using the Simplified Method Standard meal and snack rates, Standard meal and snack rates. 2010 1040ez form Storage of inventory, Storage of inventory or product samples. 2010 1040ez form T Tables and figures MACRS Depreciation of home (Table 2), Depreciation table. 2010 1040ez form Qualifying for deduction (Figure A), Standard meal and snack rates (Table 3), Table 3. 2010 1040ez form Standard Meal and Snack Rates1 Types of expenses (Table 1), Actual Expenses Tax help, How To Get Tax Help Telephone, Telephone. 2010 1040ez form Trade or business use, Trade or Business Use TTY/TDD information, How To Get Tax Help Types of expenses, Actual Expenses U Utilities, Utilities and services. 2010 1040ez form W Where to deduct expenses, Where To Deduct Employees, Employees Self-employed, Self-Employed Persons Worksheets Area Adjustment Worksheet (for simplified method), Area Adjustment Worksheet (for simplified method) Worksheets to figure the deduction for business use of your home (simplified method), Worksheets To Figure the Deduction for Business Use of Your Home (Simplified Method) Daycare facility worksheet (for simplified method), Daycare Facility Worksheet (for simplified method) Simplified method worksheet, Simplified Method Worksheet Prev  Up     Home   More Online Publications
Español

A-Z Index of U.S. Government Departments and Agencies

The 2010 1040ez Form

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