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Full Time Student Filing Taxes

Full time student filing taxes 7. Full time student filing taxes   How To Get Tax Help Table of Contents Whether it's help with a tax issue, preparing your tax return or a need for a free publication or form, get the help you need the way you want it: online, use a smart phone, call or walk in to an IRS office or volunteer site near you. Full time student filing taxes Free help with your tax return. Full time student filing taxes   You can get free help preparing your return nationwide from IRS-certified volunteers. Full time student filing taxes The Volunteer Income Tax Assistance (VITA) program helps low-to-moderate income, elderly, people with disabilities, and limited English proficient taxpayers. Full time student filing taxes The Tax Counseling for the Elderly (TCE) program helps taxpayers age 60 and older with their tax returns. Full time student filing taxes Most VITA and TCE sites offer free electronic filing and all volunteers will let you know about credits and deductions you may be entitled to claim. Full time student filing taxes In addition, some VITA and TCE sites provide taxpayers the opportunity to prepare their own return with help from an IRS-certified volunteer. Full time student filing taxes To find the nearest VITA or TCE site, you can use the VITA Locator Tool on IRS. Full time student filing taxes gov, download the IRS2Go app, or call 1-800-906-9887. Full time student filing taxes   As part of the TCE program, AARP offers the Tax-Aide counseling program. Full time student filing taxes To find the nearest AARP Tax-Aide site, visit AARP's website at www. Full time student filing taxes aarp. Full time student filing taxes org/money/taxaide or call 1-888-227-7669. Full time student filing taxes For more information on these programs, go to IRS. Full time student filing taxes gov and enter “VITA” in the search box. Full time student filing taxes Internet. Full time student filing taxes    IRS. Full time student filing taxes gov and IRS2Go are ready when you are —24 hours a day, 7 days a week. Full time student filing taxes Download the free IRS2Go app from the iTunes app store or from Google Play. Full time student filing taxes Use it to check your refund status, order transcripts of your tax returns or tax account, watch the IRS YouTube channel, get IRS news as soon as it's released to the public, subscribe to filing season updates or daily tax tips, and follow the IRS Twitter news feed, @IRSnews, to get the latest federal tax news, including information about tax law changes and important IRS programs. Full time student filing taxes Check the status of your 2013 refund with the Where's My Refund? application on IRS. Full time student filing taxes gov or download the IRS2Go app and select the Refund Status option. Full time student filing taxes The IRS issues more than 9 out of 10 refunds in less than 21 days. Full time student filing taxes Using these applications, you can start checking on the status of your return within 24 hours after we receive your e-filed return or 4 weeks after you mail a paper return. Full time student filing taxes You will also be given a personalized refund date as soon as the IRS processes your tax return and approves your refund. Full time student filing taxes The IRS updates Where's My Refund? every 24 hours, usually overnight, so you only need to check once a day. Full time student filing taxes Use the Interactive Tax Assistant (ITA) to research your tax questions. Full time student filing taxes No need to wait on the phone or stand in line. Full time student filing taxes The ITA is available 24 hours a day, 7 days a week, and provides you with a variety of tax information related to general filing topics, deductions, credits, and income. Full time student filing taxes When you reach the response screen, you can print the entire interview and the final response for your records. Full time student filing taxes New subject areas are added on a regular basis. Full time student filing taxes  Answers not provided through ITA may be found in Tax Trails, one of the Tax Topics on IRS. Full time student filing taxes gov which contain general individual and business tax information or by searching the IRS Tax Map, which includes an international subject index. Full time student filing taxes You can use the IRS Tax Map, to search publications and instructions by topic or keyword. Full time student filing taxes The IRS Tax Map integrates forms and publications into one research tool and provides single-point access to tax law information by subject. Full time student filing taxes When the user searches the IRS Tax Map, they will be provided with links to related content in existing IRS publications, forms and instructions, questions and answers, and Tax Topics. Full time student filing taxes Coming this filing season, you can immediately view and print for free all 5 types of individual federal tax transcripts (tax returns, tax account, record of account, wage and income statement, and certification of non-filing) using Get Transcript. Full time student filing taxes You can also ask the IRS to mail a return or an account transcript to you. Full time student filing taxes Only the mail option is available by choosing the Tax Records option on the IRS2Go app by selecting Mail Transcript on IRS. Full time student filing taxes gov or by calling 1-800-908-9946. Full time student filing taxes Tax return and tax account transcripts are generally available for the current year and the past three years. Full time student filing taxes Determine if you are eligible for the EITC and estimate the amount of the credit with the Earned Income Tax Credit (EITC) Assistant. Full time student filing taxes Visit Understanding Your IRS Notice or Letter to get answers to questions about a notice or letter you received from the IRS. Full time student filing taxes If you received the First Time Homebuyer Credit, you can use the First Time Homebuyer Credit Account Look-up tool for information on your repayments and account balance. Full time student filing taxes Check the status of your amended return using Where's My Amended Return? Go to IRS. Full time student filing taxes gov and enter Where's My Amended Return? in the search box. Full time student filing taxes You can generally expect your amended return to be processed up to 12 weeks from the date we receive it. Full time student filing taxes It can take up to 3 weeks from the date you mailed it to show up in our system. Full time student filing taxes Make a payment using one of several safe and convenient electronic payment options available on IRS. Full time student filing taxes gov. Full time student filing taxes Select the Payment tab on the front page of IRS. Full time student filing taxes gov for more information. Full time student filing taxes Determine if you are eligible and apply for an online payment agreement, if you owe more tax than you can pay today. Full time student filing taxes Figure your income tax withholding with the IRS Withholding Calculator on IRS. Full time student filing taxes gov. Full time student filing taxes Use it if you've had too much or too little withheld, your personal situation has changed, you're starting a new job or you just want to see if you're having the right amount withheld. Full time student filing taxes Determine if you might be subject to the Alternative Minimum Tax by using the Alternative Minimum Tax Assistant on IRS. Full time student filing taxes gov. Full time student filing taxes Request an Electronic Filing PIN by going to IRS. Full time student filing taxes gov and entering Electronic Filing PIN in the search box. Full time student filing taxes Download forms, instructions and publications, including accessible versions for people with disabilities. Full time student filing taxes Locate the nearest Taxpayer Assistance Center (TAC) using the Office Locator tool on IRS. Full time student filing taxes gov, or choose the Contact Us option on the IRS2Go app and search Local Offices. Full time student filing taxes An employee can answer questions about your tax account or help you set up a payment plan. Full time student filing taxes Before you visit, check the Office Locator on IRS. Full time student filing taxes gov, or Local Offices under Contact Us on IRS2Go to confirm the address, phone number, days and hours of operation, and the services provided. Full time student filing taxes If you have a special need, such as a disability, you can request an appointment. Full time student filing taxes Call the local number listed in the Office Locator, or look in the phone book under United States Government, Internal Revenue Service. Full time student filing taxes Apply for an Employer Identification Number (EIN). Full time student filing taxes Go to IRS. Full time student filing taxes gov and enter Apply for an EIN in the search box. Full time student filing taxes Read the Internal Revenue Code, regulations, or other official guidance. Full time student filing taxes Read Internal Revenue Bulletins. Full time student filing taxes Sign up to receive local and national tax news and more by email. Full time student filing taxes Just click on “subscriptions” above the search box on IRS. Full time student filing taxes gov and choose from a variety of options. Full time student filing taxes Phone. Full time student filing taxes    You can call the IRS, or you can carry it in your pocket with the IRS2Go app on your smart phone or tablet. Full time student filing taxes Download the free IRS2Go app from the iTunes app store or from Google Play. Full time student filing taxes Call to locate the nearest volunteer help site, 1-800-906-9887 or you can use the VITA Locator Tool on IRS. Full time student filing taxes gov, or download the IRS2Go app. Full time student filing taxes Low-to-moderate income, elderly, people with disabilities, and limited English proficient taxpayers can get free help with their tax return from the nationwide Volunteer Income Tax Assistance (VITA) program. Full time student filing taxes The Tax Counseling for the Elderly (TCE) program helps taxpayers age 60 and older with their tax returns. Full time student filing taxes Most VITA and TCE sites offer free electronic filing. Full time student filing taxes Some VITA and TCE sites provide IRS-certified volunteers who can help prepare your tax return. Full time student filing taxes Through the TCE program, AARP offers the Tax-Aide counseling program; call 1-888-227-7669 to find the nearest Tax-Aide location. Full time student filing taxes Call the automated Where's My Refund? information hotline to check the status of your 2013 refund 24 hours a day, 7 days a week at 1-800-829-1954. Full time student filing taxes If you e-file, you can start checking on the status of your return within 24 hours after the IRS receives your tax return or 4 weeks after you've mailed a paper return. Full time student filing taxes The IRS issues more than 9 out of 10 refunds in less than 21 days. Full time student filing taxes Where's My Refund? will give you a personalized refund date as soon as the IRS processes your tax return and approves your refund. Full time student filing taxes Before you call this automated hotline, have your 2013 tax return handy so you can enter your social security number, your filing status, and the exact whole dollar amount of your refund. Full time student filing taxes The IRS updates Where's My Refund? every 24 hours, usually overnight, so you only need to check once a day. Full time student filing taxes Note, the above information is for our automated hotline. Full time student filing taxes Our live phone and walk-in assistors can research the status of your refund only if it's been 21 days or more since you filed electronically or more than 6 weeks since you mailed your paper return. Full time student filing taxes Call the Amended Return Hotline, 1-866-464-2050, to check the status of your amended return. Full time student filing taxes You can generally expect your amended return to be processed up to 12 weeks from the date we receive it. Full time student filing taxes It can take up to 3 weeks from the date you mailed it to show up in our system. Full time student filing taxes Call 1-800-TAX-FORM (1-800-829-3676) to order current-year forms, instructions, publications, and prior-year forms and instructions (limited to 5 years). Full time student filing taxes You should receive your order within 10 business days. Full time student filing taxes Call TeleTax, 1-800-829-4477, to listen to pre-recorded messages covering general and business tax information. Full time student filing taxes If, between January and April 15, you still have questions about the Form 1040, 1040A, or 1040EZ (like filing requirements, dependents, credits, Schedule D, pensions and IRAs or self-employment taxes), call 1-800-829-1040. Full time student filing taxes Call using TTY/TDD equipment, 1-800-829-4059 to ask tax questions or order forms and publications. Full time student filing taxes The TTY/TDD telephone number is for people who are deaf, hard of hearing, or have a speech disability. Full time student filing taxes These individuals can also contact the IRS through relay services such as the Federal Relay Service. Full time student filing taxes Walk-in. Full time student filing taxes   You can find a selection of forms, publications and services — in-person. Full time student filing taxes Products. Full time student filing taxes You can walk in to some post offices, libraries, and IRS offices to pick up certain forms, instructions, and publications. Full time student filing taxes Some IRS offices, libraries, and city and county government offices have a collection of products available to photocopy from reproducible proofs. Full time student filing taxes Services. Full time student filing taxes You can walk in to your local TAC for face-to-face tax help. Full time student filing taxes An employee can answer questions about your tax account or help you set up a payment plan. Full time student filing taxes Before visiting, use the Office Locator tool on IRS. Full time student filing taxes gov, or choose the Contact Us option on the IRS2Go app and search Local Offices for days and hours of operation, and services provided. Full time student filing taxes Mail. Full time student filing taxes   You can send your order for forms, instructions, and publications to the address below. Full time student filing taxes You should receive a response within 10 business days after your request is received. Full time student filing taxes Internal Revenue Service 1201 N. Full time student filing taxes Mitsubishi Motorway Bloomington, IL 61705-6613    The Taxpayer Advocate Service Is Here to Help You. Full time student filing taxes The Taxpayer Advocate Service (TAS) is your voice at the IRS. Full time student filing taxes Our job is to ensure that every taxpayer is treated fairly and that you know and understand your rights. Full time student filing taxes   What can TAS do for you? We can offer you free help with IRS problems that you can't resolve on your own. Full time student filing taxes We know this process can be confusing, but the worst thing you can do is nothing at all! TAS can help if you can't resolve your tax problem and: Your problem is causing financial difficulties for you, your family, or your business. Full time student filing taxes You face (or your business is facing) an immediate threat of adverse action. Full time student filing taxes You've tried repeatedly to contact the IRS but no one has responded, or the IRS hasn't responded by the date promised. Full time student filing taxes   If you qualify for our help, you'll be assigned to one advocate who'll be with you at every turn and will do everything possible to resolve your problem. Full time student filing taxes Here's why we can help: TAS is an independent organization within the IRS. Full time student filing taxes Our advocates know how to work with the IRS. Full time student filing taxes Our services are free and tailored to meet your needs. Full time student filing taxes We have offices in every state, the District of Columbia, and Puerto Rico. Full time student filing taxes   How can you reach us? If you think TAS can help you, call your local advocate, whose number is in your local directory and at Taxpayer Advocate, or call us toll-free at 1-877-777-4778. Full time student filing taxes   How else does TAS help taxpayers?  TAS also works to resolve large-scale, systemic problems that affect many taxpayers. Full time student filing taxes If you know of one of these broad issues, please report it to us through our Systemic Advocacy Management System. Full time student filing taxes Low Income Taxpayer Clinics. Full time student filing taxes   Low Income Taxpayer Clinics (LITCs) serve individuals whose income is below a certain level and need to resolve tax problems such as audits, appeals, and tax collection disputes. Full time student filing taxes Some clinics can provide information about taxpayer rights and responsibilities in different languages for individuals who speak English as a second language. Full time student filing taxes Visit www. Full time student filing taxes TaxpayerAdvocate. Full time student filing taxes irs. Full time student filing taxes gov or see IRS Publication 4134, Low Income Taxpayer Clinic List. Full time student filing taxes Prev  Up  Next   Home   More Online Publications
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The Full Time Student Filing Taxes

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