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2011 Turbo Tax Software

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2011 Turbo Tax Software

2011 turbo tax software Publication 584-B - Additional Material Table of Contents This image is too large to be displayed in the current screen. 2011 turbo tax software Please click the link to view the image. 2011 turbo tax software Office Furniture and Fixtures This image is too large to be displayed in the current screen. 2011 turbo tax software Please click the link to view the image. 2011 turbo tax software Information Systems This image is too large to be displayed in the current screen. 2011 turbo tax software Please click the link to view the image. 2011 turbo tax software Motor Vehicles This image is too large to be displayed in the current screen. 2011 turbo tax software Please click the link to view the image. 2011 turbo tax software Office Supplies This image is too large to be displayed in the current screen. 2011 turbo tax software Please click the link to view the image. 2011 turbo tax software Building, Components, and Land This image is too large to be displayed in the current screen. 2011 turbo tax software Please click the link to view the image. 2011 turbo tax software Equipment Tax Publications for Individual TaxpayersSee How To Get Tax Help for a variety of ways to get publications, including by computer, phone, and mail. 2011 turbo tax software General Guides 1 Your Rights as a Taxpayer 17 Your Federal Income Tax For Individuals 334 Tax Guide for Small Business (For Individuals Who Use Schedule C or C-EZ) 509 Tax Calendars for 2012 910 IRS Guide to Free Tax Services Specialized Publications 3 Armed Forces’ Tax Guide 54 Tax Guide for U. 2011 turbo tax software S. 2011 turbo tax software Citizens and Resident Aliens Abroad 225 Farmer’s Tax Guide 463 Travel, Entertainment, Gift, and Car Expenses 501 Exemptions, Standard Deduction, and Filing Information 502 Medical and Dental Expenses (Including the Health Coverage Tax Credit) 503 Child and Dependent Care Expenses 504 Divorced or Separated Individuals 505 Tax Withholding and Estimated Tax 514 Foreign Tax Credit for Individuals 516 U. 2011 turbo tax software S. 2011 turbo tax software Government Civilian Employees Stationed Abroad 517 Social Security and Other Information for Members of the Clergy and Religious Workers 519 U. 2011 turbo tax software S. 2011 turbo tax software Tax Guide for Aliens 521 Moving Expenses 523 Selling Your Home 524 Credit for the Elderly or the Disabled 525 Taxable and Nontaxable Income 526 Charitable Contributions 527 Residential Rental Property (Including Rental of Vacation Homes) 529 Miscellaneous Deductions 530 Tax Information for Homeowners 531 Reporting Tip Income 535 Business Expenses 536 Net Operating Losses (NOLs) for Individuals, Estates, and Trusts 537 Installment Sales 541 Partnerships 544 Sales and Other Dispositions of Assets 547 Casualties, Disasters, and Thefts 550 Investment Income and Expenses (Including Capital Gains and Losses) 551 Basis of Assets 554 Tax Guide for Seniors 555 Community Property 556 Examination of Returns, Appeal Rights, and Claims for Refund 559 Survivors, Executors, and Administrators 561 Determining the Value of Donated Property 570 Tax Guide for Individuals With Income From U. 2011 turbo tax software S. 2011 turbo tax software Possessions 571 Tax-Sheltered Annuity Plans (403(b) Plans) For Employees of Public Schools and Certain Tax-Exempt Organizations 575 Pension and Annuity Income 584 Casualty, Disaster, and Theft Loss Workbook (Personal-Use Property) 587 Business Use of Your Home (Including Use by Daycare Providers) 590 Individual Retirement Arrangements (IRAs) 594 The IRS Collection Process 596 Earned Income Credit (EIC) 721 Tax Guide to U. 2011 turbo tax software S. 2011 turbo tax software Civil Service Retirement Benefits 901 U. 2011 turbo tax software S. 2011 turbo tax software Tax Treaties 907 Tax Highlights for Persons with Disabilities 908 Bankruptcy Tax Guide 915 Social Security and Equivalent Railroad Retirement Benefits 925 Passive Activity and At-Risk Rules 926 Household Employer’s Tax Guide For Wages Paid in 2012 929 Tax Rules for Children and Dependents 936 Home Mortgage Interest Deduction 946 How To Depreciate Property 947 Practice Before the IRS and Power of Attorney 950 Introduction to Estate and Gift Taxes 969 Health Savings Accounts and Other Tax-Favored Health Plans 970 Tax Benefits for Education 971 Innocent Spouse Relief 972 Child Tax Credit 1542 Per Diem Rates (For Travel Within the Continental United States) 1544 Reporting Cash Payments of Over $10,000 (Received in a Trade or Business) 1546 Taxpayer Advocate Service – Your Voice at the IRS Spanish Language Publications 1SP Derechos del Contribuyente 17(SP) El Impuesto Federal sobre los Ingresos Para Personas Fisicas 547(SP) Hechos Fortuitos Desastres y Robos 584(SP) Registro de Pérdidas por Hechos Fortuitos (Imprevistos), Desastres y Robos (Propiedad de Uso Personal) 594SP El Proceso de Cobro del IRS 596SP Crédito por Ingreso del Trabajo 850(EN/SP) English-Spanish Glossary of Words and Phrases Used in Publications Issued by the Internal Revenue Service 1544 (SP) Informe de Pagos en Efectivo en Exceso de $10,000 (Recibidos en una Ocupación o Negocio) Commonly Used Tax FormsSee How To Get Tax Help for a variety of ways to get forms, including by computer, phone, and mail. 2011 turbo tax software Form Number and Title 1040 U. 2011 turbo tax software S. 2011 turbo tax software Individual Income Tax Return Sch A Itemized Deductions Sch B Interest and Ordinary Dividends Sch C Profit or Loss From Business Sch C-EZ Net Profit From Business Sch D Capital Gains and Losses Sch E Supplemental Income and Loss Sch EIC Earned Income Credit Sch F Profit or Loss From Farming Sch H Household Employment Taxes Sch J Income Averaging for Farmers and Fishermen Sch R Credit for the Elderly or the Disabled Sch SE Self-Employment Tax 1040A U. 2011 turbo tax software S. 2011 turbo tax software Individual Income Tax Return Sch B Interest and Ordinary Dividends 1040EZ Income Tax Return for Single and Joint Filers With No Dependents 1040-ES Estimated Tax for Individuals 1040X Amended U. 2011 turbo tax software S. 2011 turbo tax software Individual Income Tax Return 2106 Employee Business Expenses 2106-EZ Unreimbursed Employee Business Expenses 2210 Underpayment of Estimated Tax by Individuals, Estates, and Trusts 2441 Child and Dependent Care Expenses 2848 Power of Attorney and Declaration of Representative 2848(SP) Poder Legal y Declaración del Representante 3903 Moving Expenses 4562 Depreciation and Amortization 4868 Application for Automatic Extension of Time To File U. 2011 turbo tax software S. 2011 turbo tax software Individual Income Tax Return 4868(SP) Solicitud de Prórroga Automática para Presentar la Declaración del Impuesto sobre el Ingreso Personal de los Estados Unidos 4952 Investment Interest Expense Deduction 5329 Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts 6251 Alternative Minimum Tax—Individuals 8283 Noncash Charitable Contributions 8582 Passive Activity Loss Limitations 8606 Nondeductible IRAs 8812 Additional Child Tax Credit 8822 Change of Address 8829 Expenses for Business Use of Your Home 8863 Education Credits (American Opportunity and Lifetime Learning Credits) 8949 Sales and Other Dispositions of Capital Assets 9465 Installment Agreement Request 9465(SP) Solicitud para un Plan de Pagos a Plazos         Prev  Up  Next   Home   More Online Publications
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Face-to-face Tax Help

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

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

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

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

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

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

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

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

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

 

Services Provided

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

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

 

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

 

Services Provided

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

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

 

Services Provided

(302) 573-6343 

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

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

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

Partnerships

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

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

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

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

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

Page Last Reviewed or Updated: 28-Mar-2014

The 2011 Turbo Tax Software

2011 turbo tax software 2. 2011 turbo tax software   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. 2011 turbo tax software You must also figure your taxable income and file an income tax return for an annual accounting period called a tax year. 2011 turbo tax software This chapter discusses accounting methods. 2011 turbo tax software 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. 2011 turbo tax software 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. 2011 turbo tax software 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. 2011 turbo tax software Your accounting method includes not only your overall method of accounting, but also the accounting treatment you use for any material item. 2011 turbo tax software A material item is one that affects the proper time for inclusion of income or allowance of a deduction. 2011 turbo tax software An item considered material for financial statement purposes is generally also considered material for income tax purposes. 2011 turbo tax software See Publication 538 for more information. 2011 turbo tax software 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. 2011 turbo tax software If you later want to change your accounting method, you generally must get IRS approval. 2011 turbo tax software How to obtain IRS approval is discussed later under Changes in Methods of Accounting . 2011 turbo tax software Types of accounting methods. 2011 turbo tax software   Generally, you can use any of the following accounting methods. 2011 turbo tax software Each method is discussed in detail below. 2011 turbo tax software Cash method. 2011 turbo tax software Accrual method. 2011 turbo tax software Special methods of accounting for certain items of income and expenses. 2011 turbo tax software Combination (hybrid) method using elements of two or more of the above. 2011 turbo tax software Business and other items. 2011 turbo tax software   You can account for business and personal items using different accounting methods. 2011 turbo tax software For example, you can figure your business income under an accrual method, even if you use the cash method to figure personal items. 2011 turbo tax software Two or more businesses. 2011 turbo tax software   If you operate two or more separate and distinct businesses, you can use a different accounting method for each business. 2011 turbo tax software Generally, no business is separate and distinct unless a complete and separate set of books and records is maintained for each business. 2011 turbo tax software Cash Method Most farmers use the cash method because they find it easier to keep records using the cash method. 2011 turbo tax software However, certain farm corporations and partnerships and all tax shelters must use an accrual method of accounting. 2011 turbo tax software See Accrual Method Required , later. 2011 turbo tax software Income Under the cash method, include in your gross income all items of income you actually or constructively received during the tax year. 2011 turbo tax software Items of income include money received as well as property or services received. 2011 turbo tax software If you receive property or services, you must include the fair market value (FMV) of the property or services in income. 2011 turbo tax software See chapter 3 for information on how to report farm income on your income tax return. 2011 turbo tax software Constructive receipt. 2011 turbo tax software   Income is constructively received when an amount is credited to your account or made available to you without restriction. 2011 turbo tax software You do not need to have possession of the income for it to be treated as income for the tax year. 2011 turbo tax software 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. 2011 turbo tax software Income is not constructively received if your receipt of the income is subject to substantial restrictions or limitations. 2011 turbo tax software Direct payments and counter-cyclical payments. 2011 turbo tax software   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. 2011 turbo tax software Delaying receipt of income. 2011 turbo tax software   You cannot hold checks or postpone taking possession of similar property from one tax year to another to avoid paying tax on the income. 2011 turbo tax software You must report the income in the year the money or property is received or made available to you without restriction. 2011 turbo tax software Example. 2011 turbo tax software Frances Jones, a farmer, was entitled to receive a $10,000 payment on a grain contract in December 2013. 2011 turbo tax software She was told in December that her payment was available. 2011 turbo tax software She requested not to be paid until January 2014. 2011 turbo tax software However, she must still include this payment in her 2013 income because it was made available to her in 2013. 2011 turbo tax software Debts paid by another person or canceled. 2011 turbo tax software   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. 2011 turbo tax software If you receive income in this way, you constructively receive the income when the debt is canceled or paid. 2011 turbo tax software See Cancellation of Debt in chapter 3. 2011 turbo tax software Deferred payment contract. 2011 turbo tax software   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. 2011 turbo tax software 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. 2011 turbo tax software Example. 2011 turbo tax software You are a farmer who uses the cash method and a calendar tax year. 2011 turbo tax software You sell grain in December 2013 under a bona fide arm's-length contract that calls for payment in 2014. 2011 turbo tax software You include the proceeds from the sale in your 2014 gross income since that is the year payment is received. 2011 turbo tax software 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. 2011 turbo tax software Repayment of income. 2011 turbo tax software   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. 2011 turbo tax software If the repayment is more than $3,000, a special rule applies. 2011 turbo tax software For details, see Repayments in chapter 11 of Publication 535, Business Expenses. 2011 turbo tax software Expenses Under the cash method, generally you deduct expenses in the tax year you pay them. 2011 turbo tax software This includes business expenses for which you contest liability. 2011 turbo tax software 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. 2011 turbo tax software See chapter 4 for information on how to deduct farm business expenses on your income tax return. 2011 turbo tax software Prepayment. 2011 turbo tax software   Generally, you cannot deduct expenses paid in advance. 2011 turbo tax software 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. 2011 turbo tax software Example. 2011 turbo tax software On November 1, 2013, you signed and paid $3,600 for a 3-year (36-month) insurance contract for equipment. 2011 turbo tax software 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. 2011 turbo tax software 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. 2011 turbo tax software An exception applies if the expense qualifies for the 12-month rule. 2011 turbo tax software See Publication 538 for more information and examples. 2011 turbo tax software See chapter 4 for special rules for prepaid farm supplies and prepaid livestock feed. 2011 turbo tax software 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. 2011 turbo tax software The purpose of an accrual method of accounting is to correctly match income and expenses. 2011 turbo tax software Certain businesses engaged in farming must use an accrual method of accounting for its farm business and for sales and purchases of inventory items. 2011 turbo tax software See Accrual Method Required and Farm Inventory , later. 2011 turbo tax software 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. 2011 turbo tax software Under this rule, include an amount in income on the earliest of the following dates. 2011 turbo tax software When you receive payment. 2011 turbo tax software When the income amount is due to you. 2011 turbo tax software When you earn the income. 2011 turbo tax software When title passes. 2011 turbo tax software If you use an accrual method of accounting, complete Part III of Schedule F (Form 1040) to report your income. 2011 turbo tax software Inventory. 2011 turbo tax software   If you keep an inventory, generally you must use an accrual method of accounting to determine your gross income. 2011 turbo tax software An inventory is necessary to clearly show income when the production, purchase, or sale of merchandise is an income-producing factor. 2011 turbo tax software See Publication 538 for more information. 2011 turbo tax software Also see Farm Inventory , later, for more information on items that must be included in inventory by farmers and inventory valuation methods for farmers. 2011 turbo tax software Expenses Under an accrual method of accounting, you generally deduct or capitalize a business expense when both of the following apply. 2011 turbo tax software The all-events test has been met. 2011 turbo tax software 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. 2011 turbo tax software Economic performance has occurred. 2011 turbo tax software Economic performance. 2011 turbo tax software   Generally, you cannot deduct or capitalize a business expense until economic performance occurs. 2011 turbo tax software 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. 2011 turbo tax software If your expense is for property or services you provide to others, economic performance occurs as you provide the property or services. 2011 turbo tax software Example. 2011 turbo tax software Jane, who is a farmer, uses a calendar tax year and an accrual method of accounting. 2011 turbo tax software She entered into a contract with ABC Farm Consulting in 2012. 2011 turbo tax software The contract stated that Jane pay ABC Farm Consulting $2,000 in December 2012. 2011 turbo tax software 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. 2011 turbo tax software Jane paid ABC Farm Consulting $2,000 in December 2012. 2011 turbo tax software Integration of operations according to the plan began in May 2013 and they completed the integration in December 2013. 2011 turbo tax software Economic performance for Jane's liability in the contract occurs as the services are provided. 2011 turbo tax software Jane incurs the $2,000 cost in 2013. 2011 turbo tax software 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. 2011 turbo tax software For more information, see Economic Performance in Publication 538. 2011 turbo tax software Special rule for related persons. 2011 turbo tax software   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. 2011 turbo tax software Determine the relationship for this rule as of the end of the tax year for which the expense or interest would otherwise be deductible. 2011 turbo tax software For more information, see Internal Revenue Code section 267. 2011 turbo tax software Accrual Method Required Generally, the following businesses, if engaged in farming, must use an accrual method of accounting. 2011 turbo tax software A corporation (other than a family corporation) that had gross receipts of more than $1,000,000 for any tax year beginning after 1975. 2011 turbo tax software A family corporation that had gross receipts of more than $25,000,000 for any tax year beginning after 1985. 2011 turbo tax software A partnership with a corporation as a partner, if that corporation meets the requirements of (1) or (2) above. 2011 turbo tax software A tax shelter. 2011 turbo tax software Note. 2011 turbo tax software 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). 2011 turbo tax software Family corporation. 2011 turbo tax software   A family corporation is generally a corporation that meets one of the following ownership requirements. 2011 turbo tax software 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. 2011 turbo tax software 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. 2011 turbo tax software 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. 2011 turbo tax software For more information on family corporations, see Internal Revenue Code section 447. 2011 turbo tax software Tax shelter. 2011 turbo tax software   A tax shelter is a partnership, noncorporate enterprise, or S corporation that meets either of the following tests. 2011 turbo tax software Its principal purpose is the avoidance or evasion of federal income tax. 2011 turbo tax software It is a farming syndicate. 2011 turbo tax software A farming syndicate is an entity that meets either of the following tests. 2011 turbo tax software 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. 2011 turbo tax software More than 35% of the losses during the tax year are allocable to limited partners or limited entrepreneurs. 2011 turbo tax software   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. 2011 turbo tax software   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. 2011 turbo tax software 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. 2011 turbo tax software This record should show the actual count or measurement of the inventory. 2011 turbo tax software It should also show all factors that enter into its valuation, including quality and weight, if applicable. 2011 turbo tax software Hatchery business. 2011 turbo tax software   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. 2011 turbo tax software Products held for sale. 2011 turbo tax software   All harvested and purchased farm products held for sale or for feed or seed, such as grain, hay, silage, concentrates, cotton, tobacco, etc. 2011 turbo tax software , must be included in inventory. 2011 turbo tax software Supplies. 2011 turbo tax software   Supplies acquired for sale or that become a physical part of items held for sale must be included in inventory. 2011 turbo tax software Deduct the cost of supplies in the year used or consumed in operations. 2011 turbo tax software Do not include incidental supplies in inventory as these are deductible in the year of purchase. 2011 turbo tax software Livestock. 2011 turbo tax software   Livestock held primarily for sale must be included in inventory. 2011 turbo tax software Livestock held for draft, breeding, or dairy purposes can either be depreciated or included in inventory. 2011 turbo tax software See also Unit-livestock-price method , later. 2011 turbo tax software 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. 2011 turbo tax software Growing crops. 2011 turbo tax software   Generally, growing crops are not required to be included in inventory. 2011 turbo tax software 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. 2011 turbo tax software See Uniform capitalization rules below. 2011 turbo tax software Also see Uniform Capitalization Rules in  chapter 6. 2011 turbo tax software Items to include in inventory. 2011 turbo tax software   Your inventory should include all items held for sale, or for use as feed, seed, etc. 2011 turbo tax software , whether raised or purchased, that are unsold at the end of the year. 2011 turbo tax software Uniform capitalization rules. 2011 turbo tax software   The following applies if you are required to use an accrual method of accounting. 2011 turbo tax software 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. 2011 turbo tax software The costs of animals are subject to the uniform capitalization rules. 2011 turbo tax software Inventory valuation methods. 2011 turbo tax software   The following methods, described below, are those generally available for valuing inventory. 2011 turbo tax software The method you use must conform to generally accepted accounting principles for similar businesses and must clearly reflect income. 2011 turbo tax software Cost. 2011 turbo tax software Lower of cost or market. 2011 turbo tax software Farm-price method. 2011 turbo tax software Unit-livestock-price method. 2011 turbo tax software Cost and lower of cost or market methods. 2011 turbo tax software   See Publication 538 for information on these valuation methods. 2011 turbo tax software 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. 2011 turbo tax software 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. 2011 turbo tax software Farm-price method. 2011 turbo tax software   Under this method, each item, whether raised or purchased, is valued at its market price less the direct cost of disposition. 2011 turbo tax software Market price is the current price at the nearest market in the quantities you usually sell. 2011 turbo tax software Cost of disposition includes broker's commissions, freight, hauling to market, and other marketing costs. 2011 turbo tax software 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. 2011 turbo tax software Unit-livestock-price method. 2011 turbo tax software   This method recognizes the difficulty of establishing the exact costs of producing and raising each animal. 2011 turbo tax software You group or classify livestock according to type and age and use a standard unit price for each animal within a class or group. 2011 turbo tax software The unit price you assign should reasonably approximate the normal costs incurred in producing the animals in such classes. 2011 turbo tax software Unit prices and classifications are subject to approval by the IRS on examination of your return. 2011 turbo tax software 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. 2011 turbo tax software IRS approval is not required for these adjustments. 2011 turbo tax software Any other changes in unit prices or classifications do require IRS approval. 2011 turbo tax software   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. 2011 turbo tax software This method accounts only for the increase in cost of raising an animal to maturity. 2011 turbo tax software It does not provide for any decrease in the animal's market value after it reaches maturity. 2011 turbo tax software Also, if you raise cattle, you are not required to inventory hay you grow to feed your herd. 2011 turbo tax software   Do not include sold or lost animals in the year-end inventory. 2011 turbo tax software If your records do not show which animals were sold or lost, treat the first animals acquired as sold or lost. 2011 turbo tax software The animals on hand at the end of the year are considered those most recently acquired. 2011 turbo tax software   You must include in inventory all livestock purchased primarily for sale. 2011 turbo tax software You can choose either to include in inventory or depreciate livestock purchased for draft, breeding, sport or dairy purposes. 2011 turbo tax software However, you must be consistent from year to year, regardless of the method you have chosen. 2011 turbo tax software You cannot change your method without obtaining approval from the IRS. 2011 turbo tax software   You must include in inventory animals purchased after maturity or capitalize them at their purchase price. 2011 turbo tax software If the animals are not mature at purchase, increase the cost at the end of each tax year according to the established unit price. 2011 turbo tax software However, in the year of purchase, do not increase the cost of any animal purchased during the last 6 months of the year. 2011 turbo tax software This “no increase” rule does not apply to tax shelters which must make an adjustment for any animal purchased during the year. 2011 turbo tax software 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. 2011 turbo tax software Uniform capitalization rules. 2011 turbo tax software   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. 2011 turbo tax software This applies to any plant or animal, even if the farmer does not hold or treat the plant or animal as inventory property. 2011 turbo tax software Cash Versus Accrual Method The following examples compare the cash and accrual methods of accounting. 2011 turbo tax software Example 1. 2011 turbo tax software You are a farmer who uses an accrual method of accounting. 2011 turbo tax software You keep your books on the calendar year basis. 2011 turbo tax software You sell grain in December 2013 but you are not paid until January 2014. 2011 turbo tax software 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. 2011 turbo tax software Example 2. 2011 turbo tax software 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. 2011 turbo tax software Under this method, you include the sales proceeds in income for 2014, the year you receive payment. 2011 turbo tax software Deduct the costs of producing the grain in the year you pay for them. 2011 turbo tax software Special Methods of Accounting There are special methods of accounting for certain items of income and expense. 2011 turbo tax software Crop method. 2011 turbo tax software   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. 2011 turbo tax software You cannot use the crop method for any tax return, including your first tax return, unless you receive approval from the IRS. 2011 turbo tax software 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. 2011 turbo tax software    See chapter 4 for details on deducting the costs of operating a farm. 2011 turbo tax software Also see Regulations section 1. 2011 turbo tax software 162-12. 2011 turbo tax software Other special methods. 2011 turbo tax software   Other special methods of accounting apply to the following items. 2011 turbo tax software Amortization, see chapter 7. 2011 turbo tax software Casualties, see chapter 11. 2011 turbo tax software Condemnations, see chapter 11. 2011 turbo tax software Depletion, see chapter 7. 2011 turbo tax software Depreciation, see chapter 7. 2011 turbo tax software Farm business expenses, see chapter 4. 2011 turbo tax software Farm income, see chapter 3. 2011 turbo tax software Installment sales, see chapter 10. 2011 turbo tax software Soil and water conservation expenses, see chapter 5. 2011 turbo tax software Thefts, see chapter 11. 2011 turbo tax software 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. 2011 turbo tax software However, the following restrictions apply. 2011 turbo tax software If you use the cash method for figuring your income, you must use the cash method for reporting your expenses. 2011 turbo tax software If you use an accrual method for reporting your expenses, you must use an accrual method for figuring your income. 2011 turbo tax software 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). 2011 turbo tax software 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. 2011 turbo tax software You may also have to pay a fee. 2011 turbo tax software To obtain approval, you must generally file Form 3115. 2011 turbo tax software There are instances when you can obtain automatic consent to change certain methods of accounting. 2011 turbo tax software See the List of Automatic Accounting Method Changes located in the Instructions for Form 3115. 2011 turbo tax software For more information on changes in methods of accounting, see Form 3115 and the Instructions for Form 3115. 2011 turbo tax software Also see Publication 538. 2011 turbo tax software Prev  Up  Next   Home   More Online Publications