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2011 1040x

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2011 1040x

2011 1040x 7. 2011 1040x   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. 2011 1040x Free help with your tax return. 2011 1040x   You can get free help preparing your return nationwide from IRS-certified volunteers. 2011 1040x The Volunteer Income Tax Assistance (VITA) program helps low-to-moderate income, elderly, people with disabilities, and limited English proficient taxpayers. 2011 1040x The Tax Counseling for the Elderly (TCE) program helps taxpayers age 60 and older with their tax returns. 2011 1040x 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. 2011 1040x In addition, some VITA and TCE sites provide taxpayers the opportunity to prepare their own return with help from an IRS-certified volunteer. 2011 1040x To find the nearest VITA or TCE site, you can use the VITA Locator Tool on IRS. 2011 1040x gov, download the IRS2Go app, or call 1-800-906-9887. 2011 1040x   As part of the TCE program, AARP offers the Tax-Aide counseling program. 2011 1040x To find the nearest AARP Tax-Aide site, visit AARP's website at www. 2011 1040x aarp. 2011 1040x org/money/taxaide or call 1-888-227-7669. 2011 1040x For more information on these programs, go to IRS. 2011 1040x gov and enter “VITA” in the search box. 2011 1040x Internet. 2011 1040x    IRS. 2011 1040x gov and IRS2Go are ready when you are —24 hours a day, 7 days a week. 2011 1040x Download the free IRS2Go app from the iTunes app store or from Google Play. 2011 1040x 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. 2011 1040x Check the status of your 2013 refund with the Where's My Refund? application on IRS. 2011 1040x gov or download the IRS2Go app and select the Refund Status option. 2011 1040x The IRS issues more than 9 out of 10 refunds in less than 21 days. 2011 1040x 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. 2011 1040x You will also be given a personalized refund date as soon as the IRS processes your tax return and approves your refund. 2011 1040x The IRS updates Where's My Refund? every 24 hours, usually overnight, so you only need to check once a day. 2011 1040x Use the Interactive Tax Assistant (ITA) to research your tax questions. 2011 1040x No need to wait on the phone or stand in line. 2011 1040x 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. 2011 1040x When you reach the response screen, you can print the entire interview and the final response for your records. 2011 1040x New subject areas are added on a regular basis. 2011 1040x  Answers not provided through ITA may be found in Tax Trails, one of the Tax Topics on IRS. 2011 1040x gov which contain general individual and business tax information or by searching the IRS Tax Map, which includes an international subject index. 2011 1040x You can use the IRS Tax Map, to search publications and instructions by topic or keyword. 2011 1040x The IRS Tax Map integrates forms and publications into one research tool and provides single-point access to tax law information by subject. 2011 1040x 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. 2011 1040x 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. 2011 1040x You can also ask the IRS to mail a return or an account transcript to you. 2011 1040x Only the mail option is available by choosing the Tax Records option on the IRS2Go app by selecting Mail Transcript on IRS. 2011 1040x gov or by calling 1-800-908-9946. 2011 1040x Tax return and tax account transcripts are generally available for the current year and the past three years. 2011 1040x Determine if you are eligible for the EITC and estimate the amount of the credit with the Earned Income Tax Credit (EITC) Assistant. 2011 1040x Visit Understanding Your IRS Notice or Letter to get answers to questions about a notice or letter you received from the IRS. 2011 1040x 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. 2011 1040x Check the status of your amended return using Where's My Amended Return? Go to IRS. 2011 1040x gov and enter Where's My Amended Return? in the search box. 2011 1040x You can generally expect your amended return to be processed up to 12 weeks from the date we receive it. 2011 1040x It can take up to 3 weeks from the date you mailed it to show up in our system. 2011 1040x Make a payment using one of several safe and convenient electronic payment options available on IRS. 2011 1040x gov. 2011 1040x Select the Payment tab on the front page of IRS. 2011 1040x gov for more information. 2011 1040x Determine if you are eligible and apply for an online payment agreement, if you owe more tax than you can pay today. 2011 1040x Figure your income tax withholding with the IRS Withholding Calculator on IRS. 2011 1040x gov. 2011 1040x 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. 2011 1040x Determine if you might be subject to the Alternative Minimum Tax by using the Alternative Minimum Tax Assistant on IRS. 2011 1040x gov. 2011 1040x Request an Electronic Filing PIN by going to IRS. 2011 1040x gov and entering Electronic Filing PIN in the search box. 2011 1040x Download forms, instructions and publications, including accessible versions for people with disabilities. 2011 1040x Locate the nearest Taxpayer Assistance Center (TAC) using the Office Locator tool on IRS. 2011 1040x gov, or choose the Contact Us option on the IRS2Go app and search Local Offices. 2011 1040x An employee can answer questions about your tax account or help you set up a payment plan. 2011 1040x Before you visit, check the Office Locator on IRS. 2011 1040x gov, or Local Offices under Contact Us on IRS2Go to confirm the address, phone number, days and hours of operation, and the services provided. 2011 1040x If you have a special need, such as a disability, you can request an appointment. 2011 1040x Call the local number listed in the Office Locator, or look in the phone book under United States Government, Internal Revenue Service. 2011 1040x Apply for an Employer Identification Number (EIN). 2011 1040x Go to IRS. 2011 1040x gov and enter Apply for an EIN in the search box. 2011 1040x Read the Internal Revenue Code, regulations, or other official guidance. 2011 1040x Read Internal Revenue Bulletins. 2011 1040x Sign up to receive local and national tax news and more by email. 2011 1040x Just click on “subscriptions” above the search box on IRS. 2011 1040x gov and choose from a variety of options. 2011 1040x Phone. 2011 1040x    You can call the IRS, or you can carry it in your pocket with the IRS2Go app on your smart phone or tablet. 2011 1040x Download the free IRS2Go app from the iTunes app store or from Google Play. 2011 1040x Call to locate the nearest volunteer help site, 1-800-906-9887 or you can use the VITA Locator Tool on IRS. 2011 1040x gov, or download the IRS2Go app. 2011 1040x 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. 2011 1040x The Tax Counseling for the Elderly (TCE) program helps taxpayers age 60 and older with their tax returns. 2011 1040x Most VITA and TCE sites offer free electronic filing. 2011 1040x Some VITA and TCE sites provide IRS-certified volunteers who can help prepare your tax return. 2011 1040x Through the TCE program, AARP offers the Tax-Aide counseling program; call 1-888-227-7669 to find the nearest Tax-Aide location. 2011 1040x 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. 2011 1040x 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. 2011 1040x The IRS issues more than 9 out of 10 refunds in less than 21 days. 2011 1040x Where's My Refund? will give you a personalized refund date as soon as the IRS processes your tax return and approves your refund. 2011 1040x 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. 2011 1040x The IRS updates Where's My Refund? every 24 hours, usually overnight, so you only need to check once a day. 2011 1040x Note, the above information is for our automated hotline. 2011 1040x 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. 2011 1040x Call the Amended Return Hotline, 1-866-464-2050, to check the status of your amended return. 2011 1040x You can generally expect your amended return to be processed up to 12 weeks from the date we receive it. 2011 1040x It can take up to 3 weeks from the date you mailed it to show up in our system. 2011 1040x 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). 2011 1040x You should receive your order within 10 business days. 2011 1040x Call TeleTax, 1-800-829-4477, to listen to pre-recorded messages covering general and business tax information. 2011 1040x 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. 2011 1040x Call using TTY/TDD equipment, 1-800-829-4059 to ask tax questions or order forms and publications. 2011 1040x The TTY/TDD telephone number is for people who are deaf, hard of hearing, or have a speech disability. 2011 1040x These individuals can also contact the IRS through relay services such as the Federal Relay Service. 2011 1040x Walk-in. 2011 1040x   You can find a selection of forms, publications and services — in-person. 2011 1040x Products. 2011 1040x You can walk in to some post offices, libraries, and IRS offices to pick up certain forms, instructions, and publications. 2011 1040x Some IRS offices, libraries, and city and county government offices have a collection of products available to photocopy from reproducible proofs. 2011 1040x Services. 2011 1040x You can walk in to your local TAC for face-to-face tax help. 2011 1040x An employee can answer questions about your tax account or help you set up a payment plan. 2011 1040x Before visiting, use the Office Locator tool on IRS. 2011 1040x gov, or choose the Contact Us option on the IRS2Go app and search Local Offices for days and hours of operation, and services provided. 2011 1040x Mail. 2011 1040x   You can send your order for forms, instructions, and publications to the address below. 2011 1040x You should receive a response within 10 business days after your request is received. 2011 1040x Internal Revenue Service 1201 N. 2011 1040x Mitsubishi Motorway Bloomington, IL 61705-6613    The Taxpayer Advocate Service Is Here to Help You. 2011 1040x The Taxpayer Advocate Service (TAS) is your voice at the IRS. 2011 1040x Our job is to ensure that every taxpayer is treated fairly and that you know and understand your rights. 2011 1040x   What can TAS do for you? We can offer you free help with IRS problems that you can't resolve on your own. 2011 1040x 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. 2011 1040x You face (or your business is facing) an immediate threat of adverse action. 2011 1040x You've tried repeatedly to contact the IRS but no one has responded, or the IRS hasn't responded by the date promised. 2011 1040x   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. 2011 1040x Here's why we can help: TAS is an independent organization within the IRS. 2011 1040x Our advocates know how to work with the IRS. 2011 1040x Our services are free and tailored to meet your needs. 2011 1040x We have offices in every state, the District of Columbia, and Puerto Rico. 2011 1040x   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. 2011 1040x   How else does TAS help taxpayers?  TAS also works to resolve large-scale, systemic problems that affect many taxpayers. 2011 1040x If you know of one of these broad issues, please report it to us through our Systemic Advocacy Management System. 2011 1040x Low Income Taxpayer Clinics. 2011 1040x   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. 2011 1040x Some clinics can provide information about taxpayer rights and responsibilities in different languages for individuals who speak English as a second language. 2011 1040x Visit www. 2011 1040x TaxpayerAdvocate. 2011 1040x irs. 2011 1040x gov or see IRS Publication 4134, Low Income Taxpayer Clinic List. 2011 1040x Prev  Up  Next   Home   More Online Publications
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The 2011 1040x

2011 1040x 5. 2011 1040x   Soil and Water Conservation Expenses Table of Contents Introduction Topics - This chapter discusses: Business of Farming Plan Certification Conservation ExpensesWater well. 2011 1040x Assessment by Conservation DistrictAssessment for Depreciable Property 25% Limit on DeductionNet operating loss. 2011 1040x When to Deduct or Capitalize Sale of a Farm Introduction If you are in the business of farming, you can choose to deduct certain expenses for: Soil or water conservation, Prevention of erosion of land used in farming, or Endangered species recovery. 2011 1040x Otherwise, these are capital expenses that must be added to the basis of the land. 2011 1040x (See chapter 6 for information on determining basis. 2011 1040x ) Conservation expenses for land in a foreign country do not qualify for this special treatment. 2011 1040x The deduction for conservation expenses cannot be more than 25% of your gross income from farming. 2011 1040x See 25% Limit on Deduction , later. 2011 1040x Although some expenses are not deductible as soil and water conservation expenses, they may be deductible as ordinary and necessary farm expenses. 2011 1040x These include interest and taxes, the cost of periodically clearing brush from productive land, the regular removal of sediment from a drainage ditch, and expenses paid or incurred primarily to produce an agricultural crop that may also conserve soil. 2011 1040x You must include in income most government payments for approved conservation practices. 2011 1040x However, you can exclude some payments you receive under certain cost-sharing conservation programs. 2011 1040x For more information, see Agricultural Program Payments in chapter 3. 2011 1040x To get the full deduction to which you are entitled, you should maintain your records to clearly distinguish between your ordinary and necessary farm business expenses and your soil and water conservation expenses. 2011 1040x Topics - This chapter discusses: Business of farming Plan certification Conservation expenses Assessment by conservation district 25% limit on deduction When to deduct or capitalize Sale of a farm Business of Farming For purposes of soil and water conservation expenses, you are in the business of farming if you cultivate, operate, or manage a farm for profit, either as an owner or a tenant. 2011 1040x You are not in the business of farming if you cultivate or operate a farm for recreation or pleasure, rather than for profit. 2011 1040x You are not farming if you are engaged only in forestry or the growing of timber. 2011 1040x Farm defined. 2011 1040x   A farm includes livestock, dairy, poultry, fish, fruit, and truck farms. 2011 1040x It also includes plantations, ranches, ranges, and orchards. 2011 1040x A fish farm is an area where fish and other marine animals are grown or raised and artificially fed, protected, etc. 2011 1040x It does not include an area where they are merely caught or harvested. 2011 1040x A plant nursery is a farm for purposes of deducting soil and water conservation expenses. 2011 1040x Farm rental. 2011 1040x   If you own a farm and receive farm rental payments based on farm production, either in cash or crop shares, you are in the business of farming. 2011 1040x If you get cash rental for a farm you own that is not used in farm production, you cannot deduct soil and water conservation expenses for that farm. 2011 1040x   If you receive a fixed rental payment that is not based on farm production, you are in the business of farming only if you materially participate in operating or managing the farm. 2011 1040x Example. 2011 1040x You own a farm in Iowa and live in California. 2011 1040x You rent the farm for $175 in cash per acre and do not materially participate in producing or managing production of the crops grown on the farm. 2011 1040x You cannot deduct your soil conservation expenses for this farm. 2011 1040x You must capitalize the expenses and add them to the basis of the land. 2011 1040x     For more information, see Material participation for landlords under Landlord Participation in Farming in chapter 12. 2011 1040x Plan Certification You can deduct soil and water conservation expenses only if they are consistent with a plan approved by the Natural Resources Conservation Service (NRCS) of the Department of Agriculture. 2011 1040x If no such plan exists, the expenses must be consistent with a soil conservation plan of a comparable state agency. 2011 1040x Keep a copy of the plan with your books and records to support your deductions. 2011 1040x Conservation plan. 2011 1040x   A conservation plan includes the farming conservation practices approved for the area where your farmland is located. 2011 1040x There are three types of approved plans. 2011 1040x NRCS individual site plans. 2011 1040x These plans are issued individually to farmers who request assistance from NRCS to develop a conservation plan designed specifically for their farmland. 2011 1040x NRCS county plans. 2011 1040x These plans include a listing of farm conservation practices approved for the county where the farmland is located. 2011 1040x You can deduct expenses for conservation practices not included on the NRCS county plans only if the practice is a part of an individual site plan. 2011 1040x Comparable state agency plans. 2011 1040x These plans are approved by state agencies and can be approved individual site plans or county plans. 2011 1040x   A list of NRCS conservation programs is available at www. 2011 1040x nrcs. 2011 1040x usda. 2011 1040x gov/programs. 2011 1040x Individual site plans can be obtained from NRCS offices and the comparable state agencies. 2011 1040x Conservation Expenses You can deduct conservation expenses only for land you or your tenant are using, or have used in the past, for farming. 2011 1040x These expenses include, but are not limited to, the following. 2011 1040x The treatment or movement of earth, such as: Leveling, Conditioning, Grading, Terracing, Contour furrowing, and Restoration of soil fertility. 2011 1040x The construction, control, and protection of: Diversion channels, Drainage ditches, Irrigation ditches, Earthen dams, and Watercourses, outlets, and ponds. 2011 1040x The eradication of brush. 2011 1040x The planting of windbreaks. 2011 1040x You cannot deduct expenses to drain or fill wetlands, or to prepare land for center pivot irrigation systems, as soil and water conservation expenses. 2011 1040x These expenses are added to the basis of the land. 2011 1040x If you choose to deduct soil and water conservation expenses, you cannot exclude from gross income any cost-sharing payments you receive for those expenses. 2011 1040x See chapter 3 for information about payments eligible for the cost-sharing exclusion. 2011 1040x New farm or farmland. 2011 1040x   If you acquire a new farm or new farmland from someone who was using it in farming immediately before you acquired the land, soil and water conservation expenses you incur on it will be treated as made on land used in farming at the time the expenses were paid or incurred. 2011 1040x You can deduct soil and water conservation expenses for this land if your use of it is substantially a continuation of its use in farming. 2011 1040x The new farming activity does not have to be the same as the old farming activity. 2011 1040x For example, if you buy land that was used for grazing cattle and then prepare it for use as an apple orchard, you can deduct your conservation expenses. 2011 1040x Land not used for farming. 2011 1040x   If your conservation expenses benefit both land that does not qualify as land used for farming and land that does qualify, you must allocate the expenses between the two types of land. 2011 1040x For example, if the expenses benefit 200 acres of your land, but only 120 acres of this land are used for farming, then you can deduct 60% (120 ÷ 200) of the expenses. 2011 1040x You can use another method to allocate these expenses if you can clearly show that your method is more reasonable. 2011 1040x Depreciable conservation assets. 2011 1040x   You generally cannot deduct your expenses for depreciable conservation assets. 2011 1040x However, you can deduct certain amounts you pay or incur for an assessment for depreciable property that a soil and water conservation or drainage district levies against your farm. 2011 1040x See Assessment for Depreciable Property , later. 2011 1040x   You must capitalize expenses to buy, build, install, or improve depreciable structures or facilities. 2011 1040x These expenses include those for materials, supplies, wages, fuel, hauling, and moving dirt when making structures such as tanks, reservoirs, pipes, culverts, canals, dams, wells, or pumps composed of masonry, concrete, tile, metal, or wood. 2011 1040x You recover your capital investment through annual allowances for depreciation. 2011 1040x   You can deduct soil and water conservation expenses for nondepreciable earthen items. 2011 1040x Nondepreciable earthen items include certain dams, ponds, and terraces described under Property Having a Determinable Useful Life in chapter 7. 2011 1040x Water well. 2011 1040x   You cannot deduct the cost of drilling a water well for irrigation and other agricultural purposes as a soil and water conservation expense. 2011 1040x It is a capital expense. 2011 1040x You recover your cost through depreciation. 2011 1040x You also must capitalize your cost for drilling a test hole. 2011 1040x If the test hole produces no water and you continue drilling, the cost of the test hole is added to the cost of the producing well. 2011 1040x You can recover the total cost through depreciation deductions. 2011 1040x   If a test hole, dry hole, or dried-up well (resulting from prolonged lack of rain, for instance) is abandoned, you can deduct your unrecovered cost in the year of abandonment. 2011 1040x Abandonment means that all economic benefits from the well are terminated. 2011 1040x For example, filling or sealing a well excavation or casing so that all economic benefits from the well are terminated constitutes an abandonment. 2011 1040x Endangered species recovery expenses. 2011 1040x   If you are in the business of farming and meet other specific requirements, you can choose to deduct the conservation expenses discussed earlier as endangered species recovery expenses. 2011 1040x Otherwise, these are capital expenses that must be added to the basis of the land. 2011 1040x   The expenses must be paid or incurred for the purpose of achieving site-specific management actions recommended in a recovery plan approved under section 4(f) of the Endangered Species Act of 1973. 2011 1040x See Internal Revenue Code section 175 for more information. 2011 1040x Assessment by Conservation District In some localities, a soil or water conservation or drainage district incurs expenses for soil or water conservation and levies an assessment against the farmers who benefit from the expenses. 2011 1040x You can deduct as a conservation expense amounts you pay or incur for the part of an assessment that: Covers expenses you could deduct if you had paid them directly, or Covers expenses for depreciable property used in the district's business. 2011 1040x Assessment for Depreciable Property You generally can deduct as a conservation expense amounts you pay or incur for the part of a conservation or drainage district assessment that covers expenses for depreciable property. 2011 1040x This includes items such as pumps, locks, concrete structures (including dams and weir gates), draglines, and similar equipment. 2011 1040x The depreciable property must be used in the district's soil and water conservation activities. 2011 1040x However, the following limits apply to these assessments. 2011 1040x The total assessment limit. 2011 1040x The yearly assessment limit. 2011 1040x After you apply these limits, the amount you can deduct is added to your other conservation expenses for the year. 2011 1040x The total for these expenses is then subject to the 25% of gross income from farming limit on the deduction, discussed later. 2011 1040x See Table 5-1 for a brief summary of these limits. 2011 1040x Table 5-1. 2011 1040x Limits on Deducting an Assessment by a Conservation District for Depreciable Property Total Limit on Deduction for Assessment for Depreciable Property Yearly Limit on Deduction for Assessment for Depreciable Property Yearly Limit for All Conservation Expenses 10% of: $500 + 10% of: 25% of: Total assessment against all members of the district for the property. 2011 1040x Your deductible share of the cost to the district for the property. 2011 1040x Your gross income from farming. 2011 1040x No one taxpayer can deduct more than 10% of the total assessment. 2011 1040x Any amount over 10% is a capital expense and is added to the basis of your land. 2011 1040x If an assessment is paid in installments, each payment must be prorated between the conservation expense and the capital expense. 2011 1040x If the amount you pay or incur for any year is more than the limit, you can deduct for that year only 10% of your deductible share of the cost. 2011 1040x You can deduct the remainder in equal amounts over the next 9 tax years. 2011 1040x Limit for all conservation expenses, including assessments for depreciable property. 2011 1040x Amounts greater than 25% can be carried to the following year and added to that year's expenses. 2011 1040x The total is then subject to the 25% of gross income from farming limit in that year. 2011 1040x To ensure your deduction is within the deduction limits, keep records to show the following. 2011 1040x The total assessment against all members of the district for the depreciable property. 2011 1040x Your deductible share of the cost to the district for the depreciable property. 2011 1040x Your gross income from farming. 2011 1040x Total assessment limit. 2011 1040x   You cannot deduct more than 10% of the total amount assessed to all members of the conservation or drainage district for the depreciable property. 2011 1040x This applies whether you pay the assessment in one payment or in installments. 2011 1040x If your assessment is more than 10% of the total amount assessed, both the following rules apply. 2011 1040x The amount over 10% is a capital expense and is added to the basis of your land. 2011 1040x If the assessment is paid in installments, each payment must be prorated between the conservation expense and the capital expense. 2011 1040x Yearly assessment limit. 2011 1040x   The maximum amount you can deduct in any one year is the total of 10% of your deductible share of the cost as explained earlier, plus $500. 2011 1040x If the amount you pay or incur is equal to or less than the maximum amount, you can deduct it in the year it is paid or incurred. 2011 1040x If the amount you pay or incur is more, you can deduct in that year only 10% of your deductible share of the cost. 2011 1040x You can deduct the remainder in equal amounts over the next 9 tax years. 2011 1040x Your total conservation expense deduction for each year is also subject to the 25% of gross income from farming limit on the deduction, discussed later. 2011 1040x Example 1. 2011 1040x This year, the soil conservation district levies and you pay an assessment of $2,400 against your farm. 2011 1040x Of the assessment, $1,500 is for digging drainage ditches. 2011 1040x You can deduct this part as a soil or conservation expense as if you had paid it directly. 2011 1040x The remaining $900 is for depreciable equipment to be used in the district's irrigation activities. 2011 1040x The total amount assessed by the district against all its members for the depreciable equipment is $7,000. 2011 1040x The total amount you can deduct for the depreciable equipment is limited to 10% of the total amount assessed by the district against all its members for depreciable equipment, or $700. 2011 1040x The $200 excess ($900 − $700) is a capital expense you must add to the basis of your farm. 2011 1040x To figure the maximum amount you can deduct for the depreciable equipment this year, multiply your deductible share of the total assessment ($700) by 10%. 2011 1040x Add $500 to the result for a total of $570. 2011 1040x Your deductible share, $700, is greater than the maximum amount deductible in one year, so you can deduct only $70 of the amount you paid or incurred for depreciable property this year (10% of $700). 2011 1040x You can deduct the balance at the rate of $70 a year over the next 9 years. 2011 1040x You add $70 to the $1,500 portion of the assessment for drainage ditches. 2011 1040x You can deduct $1,570 of the $2,400 assessment as a soil and water conservation expense this year, subject to the 25% of gross income from farming limit on the deduction, discussed later. 2011 1040x Example 2. 2011 1040x Assume the same facts in Example 1 except that $1,850 of the $2,400 assessment is for digging drainage ditches and $550 is for depreciable equipment. 2011 1040x The total amount assessed by the district against all its members for depreciable equipment is $5,500. 2011 1040x The total amount you can deduct for the depreciable equipment is limited to 10% of this amount, or $550. 2011 1040x The maximum amount you can deduct this year for the depreciable equipment is $555 (10% of your deductible share of the total assessment, $55, plus $500). 2011 1040x Since your deductible share is less than the maximum amount deductible in one year, you can deduct the entire $550 this year. 2011 1040x You can deduct the entire assessment, $2,400, as a soil and water conservation expense this year, subject to the 25% of gross income from farming limit on the deduction, discussed below. 2011 1040x Sale or other disposal of land during 9-year period. 2011 1040x   If you dispose of the land during the 9-year period for deducting conservation expenses subject to the yearly limit, any amounts you have not yet deducted because of this limit are added to the basis of the property. 2011 1040x Death of farmer during 9-year period. 2011 1040x   If a farmer dies during the 9-year period, any remaining amounts not yet deducted are deducted in the year of death. 2011 1040x 25% Limit on Deduction The total deduction for conservation expenses in any tax year is limited to 25% of your gross income from farming for the year. 2011 1040x Gross income from farming. 2011 1040x   Gross income from farming is the income you derive in the business of farming from the production of crops, fish, fruits, other agricultural products, or livestock. 2011 1040x Gains from sales of draft, breeding, or dairy livestock are included. 2011 1040x Gains from sales of assets such as farm machinery, or from the disposition of land, are not included. 2011 1040x Carryover of deduction. 2011 1040x   If your deductible conservation expenses in any year are more than 25% of your gross income from farming for that year, you can carry the unused deduction over to later years. 2011 1040x However, the deduction in any later year is limited to 25% of the gross income from farming for that year as well. 2011 1040x Example. 2011 1040x In 2012, you have gross income of $32,000 from two farms. 2011 1040x During the year, you incurred $10,000 of deductible soil and water conservation expenses for one of the farms. 2011 1040x However, your deduction is limited to 25% of $32,000, or $8,000. 2011 1040x The $2,000 excess ($10,000 − $8,000) is carried over to 2013 and added to deductible soil and water conservation expenses made in that year. 2011 1040x The total of the 2012 carryover plus 2013 expenses is deductible in 2013, subject to the limit of 25% of your gross income from farming in 2013. 2011 1040x Any expenses over the limit in that year are carried to 2014 and later years. 2011 1040x Net operating loss. 2011 1040x   The deduction for soil and water conservation expenses, after applying the 25% limit, is included when figuring a net operating loss (NOL) for the year. 2011 1040x If the NOL is carried to another year, the soil and water conservation deduction included in the NOL is not subject to the 25% limit in the year to which it is carried. 2011 1040x When to Deduct or Capitalize If you choose to deduct soil and water conservation expenses, you must deduct the total allowable amount on your tax return for the first year you pay or incur these expenses. 2011 1040x If you do not choose to deduct the expenses, you must capitalize them. 2011 1040x Change of method. 2011 1040x   If you want to change your method for the treatment of soil and water conservation expenses, or you want to treat the expenses for a particular project or a single farm in a different manner, you must get the approval of the IRS. 2011 1040x To get this approval, submit a written request by the due date of your return for the first tax year you want the new method to apply. 2011 1040x You or your authorized representative must sign the request. 2011 1040x   The request must include the following information. 2011 1040x Your name and address. 2011 1040x The first tax year the method or change of method is to apply. 2011 1040x Whether the method or change of method applies to all your soil and water conservation expenses or only to those for a particular project or farm. 2011 1040x If the method or change of method does not apply to all your expenses, identify the project or farm to which the expenses apply. 2011 1040x The total expenses you paid or incurred in the first tax year the method or change of method is to apply. 2011 1040x A statement that you will account separately in your books for the expenses to which this method or change of method relates. 2011 1040x Send your request to the following  address. 2011 1040x  Department of the Treasury Internal Revenue Service Center Cincinnati, OH 45999  For more information, see Change in  Accounting Method in chapter 2. 2011 1040x Sale of a Farm If you sell your farm, you cannot adjust the basis of the land at the time of the sale for any unused carryover of soil and water conservation expenses (except for deductions of assessments for depreciable property, discussed earlier). 2011 1040x However, if you acquire another farm and return to the business of farming, you can start taking deductions again for the unused carryovers. 2011 1040x Gain on sale of farmland. 2011 1040x   If you held the land 5 years or less before you sold it, gain on the sale of the land is treated as ordinary income up to the amount you previously deducted for soil and water conservation expenses. 2011 1040x If you held the land less than 10 but more than 5 years, the gain is treated as ordinary income up to a specified percentage of the previous deductions. 2011 1040x See Section 1252 property under Other Gains in chapter 9. 2011 1040x Prev  Up  Next   Home   More Online 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