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File state taxes only 8. File state taxes only   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. File state taxes only 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. File state taxes only It is similar to the straight line method of depreciation. File state taxes only The various amortizable costs covered in this chapter are included in the list below. File state taxes only However, this chapter does not discuss amortization of bond premium. File state taxes only For information on that topic, see chapter 3 of Publication 550, Investment Income and Expenses. File state taxes only 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. File state taxes only 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. File state taxes only To report amortization from previous years, in addition to amortization that begins in the current year, list on Form 4562 each item separately. File state taxes only For example, in 2012, you began to amortize a lease. File state taxes only In 2013, you began to amortize a second lease. File state taxes only Report amortization from the new lease on line 42 of your 2013 Form 4562. File state taxes only Report amortization from the 2012 lease on line 43 of your 2013 Form 4562. File state taxes only 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). File state taxes only 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. File state taxes only 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. File state taxes only Generally, you recover costs for particular assets through depreciation deductions. File state taxes only However, you generally cannot recover other costs until you sell the business or otherwise go out of business. File state taxes only 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. File state taxes only For costs paid or incurred after September 8, 2008, you can deduct a limited amount of start-up and organizational costs. File state taxes only The costs that are not deducted currently can be amortized ratably over a 180-month period. File state taxes only The amortization period starts with the month you begin operating your active trade or business. File state taxes only You are not required to attach a statement to make this election. File state taxes only 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. File state taxes only 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. File state taxes only See Regulations sections 1. File state taxes only 195-1, 1. File state taxes only 248-1, and 1. File state taxes only 709-1. File state taxes only 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. File state taxes only Any costs not deducted can be amortized ratably over a 180-month period, beginning with the month you begin business. File state taxes only If the election is made, you must attach any statement required by Regulations sections 1. File state taxes only 195-1(b), 1. File state taxes only 248-1(c), and 1. File state taxes only 709-1(c), as in effect before September 9, 2008. File state taxes only Note. File state taxes only You can apply the provisions of Regulations sections 1. File state taxes only 195-1, 1. File state taxes only 248-1, and 1. File state taxes only 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. File state taxes only Otherwise, the provisions under Regulations sections 1. File state taxes only 195-1(b), 1. File state taxes only 248-1(c), and 1. File state taxes only 709-1(c), as in effect before September 9, 2008, will apply. File state taxes only 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. File state taxes only See How To Make the Election , later. File state taxes only The cost must qualify as one of the following. File state taxes only A business start-up cost. File state taxes only An organizational cost for a corporation. File state taxes only An organizational cost for a partnership. File state taxes only 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. File state taxes only 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. File state taxes only Qualifying costs. File state taxes only   A start-up cost is amortizable if it meets both of the following tests. File state taxes only 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). File state taxes only It is a cost you pay or incur before the day your active trade or business begins. File state taxes only   Start-up costs include amounts paid for the following: An analysis or survey of potential markets, products, labor supply, transportation facilities, etc. File state taxes only Advertisements for the opening of the business. File state taxes only Salaries and wages for employees who are being trained and their instructors. File state taxes only Travel and other necessary costs for securing prospective distributors, suppliers, or customers. File state taxes only Salaries and fees for executives and consultants, or for similar professional services. File state taxes only Nonqualifying costs. File state taxes only   Start-up costs do not include deductible interest, taxes, or research and experimental costs. File state taxes only See Research and Experimental Costs , later. File state taxes only Purchasing an active trade or business. File state taxes only   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. File state taxes only These are costs that help you decide whether to purchase a business. File state taxes only Costs you incur in an attempt to purchase a specific business are capital expenses that you cannot amortize. File state taxes only Example. File state taxes only On June 1st, you hired an accounting firm and a law firm to assist you in the potential purchase of XYZ, Inc. File state taxes only They researched XYZ's industry and analyzed the financial projections of XYZ, Inc. File state taxes only In September, the law firm prepared and submitted a letter of intent to XYZ, Inc. File state taxes only The letter stated that a binding commitment would result only after a purchase agreement was signed. File state taxes only 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. File state taxes only On October 22nd, you signed a purchase agreement with XYZ, Inc. File state taxes only All amounts paid or incurred to investigate the business before October 22nd are amortizable investigative costs. File state taxes only Amounts paid on or after that date relate to the attempt to purchase the business and therefore must be capitalized. File state taxes only Disposition of business. File state taxes only   If you completely dispose of your business before the end of the amortization period, you can deduct any remaining deferred start-up costs. File state taxes only However, you can deduct these deferred start-up costs only to the extent they qualify as a loss from a business. File state taxes only Costs of Organizing a Corporation Amounts paid to organize a corporation are the direct costs of creating the corporation. File state taxes only Qualifying costs. File state taxes only   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. File state taxes only   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. File state taxes only   Examples of organizational costs include: The cost of temporary directors. File state taxes only The cost of organizational meetings. File state taxes only State incorporation fees. File state taxes only The cost of legal services. File state taxes only Nonqualifying costs. File state taxes only   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. File state taxes only Costs associated with the transfer of assets to the corporation. File state taxes only Costs of Organizing a Partnership The costs to organize a partnership are the direct costs of creating the partnership. File state taxes only Qualifying costs. File state taxes only   A partnership can amortize an organizational cost only if it meets all the following tests. File state taxes only It is for the creation of the partnership and not for starting or operating the partnership trade or business. File state taxes only It is chargeable to a capital account (see chapter 1). File state taxes only It could be amortized over the life of the partnership if the partnership had a fixed life. File state taxes only 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. File state taxes only 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. File state taxes only It is for a type of item normally expected to benefit the partnership throughout its entire life. File state taxes only   Organizational costs include the following fees. File state taxes only Legal fees for services incident to the organization of the partnership, such as negotiation and preparation of the partnership agreement. File state taxes only Accounting fees for services incident to the organization of the partnership. File state taxes only Filing fees. File state taxes only Nonqualifying costs. File state taxes only   The following costs cannot be amortized. File state taxes only The cost of acquiring assets for the partnership or transferring assets to the partnership. File state taxes only The cost of admitting or removing partners, other than at the time the partnership is first organized. File state taxes only The cost of making a contract concerning the operation of the partnership trade or business including a contract between a partner and the partnership. File state taxes only The costs for issuing and marketing interests in the partnership such as brokerage, registration, and legal fees and printing costs. File state taxes only These “syndication fees” are capital expenses that cannot be depreciated or amortized. File state taxes only Liquidation of partnership. File state taxes only   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. File state taxes only However, these costs can be deducted only to the extent they qualify as a loss from a business. File state taxes only How To Amortize Deduct start-up and organizational costs in equal amounts over the applicable amortization period (discussed earlier). File state taxes only 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. File state taxes only Once you choose an amortization period, you cannot change it. File state taxes only To figure your deduction, divide your total start-up or organizational costs by the months in the amortization period. File state taxes only The result is the amount you can deduct for each month. File state taxes only Cash method partnership. File state taxes only   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. File state taxes only 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. File state taxes only 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. File state taxes only You may also be required to attach an accompanying statement (described later) to your return. File state taxes only For start-up or organizational costs paid or incurred after September 8, 2008, an accompanying statement is not required. File state taxes only 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. File state taxes only 195-1, 1. File state taxes only 248-1, and 1. File state taxes only 709-1, you must also attach an accompanying statement to elect to amortize the costs. File state taxes only If you have both start-up and organizational costs, attach a separate statement (if required) to your return for each type of cost. File state taxes only See Starting a Business , earlier, for more information. File state taxes only Generally, you must file the return by the due date (including any extensions). File state taxes only 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). File state taxes only For more information, see the instructions for Part VI of Form 4562. File state taxes only 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. File state taxes only Note. File state taxes only 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. File state taxes only 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. File state taxes only A shareholder or partner cannot make this election. File state taxes only You, as a shareholder or partner, cannot amortize any costs you incur in setting up your corporation or partnership. File state taxes only Only the corporation or partnership can amortize these costs. File state taxes only However, you, as an individual, can elect to amortize costs you incur to investigate an interest in an existing partnership. File state taxes only These costs qualify as business start-up costs if you acquire the partnership interest. File state taxes only Start-up costs election statement. File state taxes only   If you elect to amortize your start-up costs, attach a separate statement (if required) that contains the following information. File state taxes only A description of the business to which the start-up costs relate. File state taxes only A description of each start-up cost incurred. File state taxes only The month your active business began (or was acquired). File state taxes only The number of months in your amortization period (which is generally 180 months). File state taxes only Filing the statement early. File state taxes only   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. File state taxes only If you file the statement early, the election becomes effective in the month of the tax year your active business begins. File state taxes only Revised statement. File state taxes only   You can file a revised statement to include any start-up costs not included in your original statement. File state taxes only 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. File state taxes only You can file the revised statement with a return filed after the return on which you elected to amortize your start-up costs. File state taxes only Organizational costs election statement. File state taxes only   If you elect to amortize your corporation's or partnership's organizational costs, attach a separate statement (if required) that contains the following information. File state taxes only A description of each cost. File state taxes only The amount of each cost. File state taxes only The date each cost was incurred. File state taxes only The month your corporation or partnership began active business (or acquired the business). File state taxes only The number of months in your amortization period (which is generally 180 months). File state taxes only Partnerships. File state taxes only   The statement prepared for a cash basis partnership must also indicate the amount paid before the end of the year for each cost. File state taxes only   You do not need to separately list any partnership organizational cost that is less than $10. File state taxes only Instead, you can list the total amount of these costs with the dates the first and last costs were incurred. File state taxes only   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. File state taxes only 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. File state taxes only 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). File state taxes only 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). File state taxes only For more information on the costs of getting a lease, see Cost of Getting a Lease in  chapter 3. File state taxes only How to amortize. File state taxes only   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. File state taxes only Section 197 Intangibles Generally, you may amortize the capitalized costs of “section 197 intangibles” (defined later) ratably over a 15-year period. File state taxes only 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. File state taxes only 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. File state taxes only See Anti-Churning Rules, later. File state taxes only 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). File state taxes only 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. File state taxes only You cannot deduct amortization for the month you dispose of the intangible. File state taxes only 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. File state taxes only You are not allowed any other depreciation or amortization deduction for an amortizable section 197 intangible. File state taxes only Tax-exempt use property subject to a lease. File state taxes only   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. File state taxes only Cost attributable to other property. File state taxes only   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. File state taxes only 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. File state taxes only 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. File state taxes only 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. File state taxes only 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. File state taxes only Goodwill. File state taxes only   This is the value of a trade or business based on expected continued customer patronage due to its name, reputation, or any other factor. File state taxes only Going concern value. File state taxes only   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. File state taxes only 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). File state taxes only 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. File state taxes only Workforce in place, etc. File state taxes only   This includes the composition of a workforce (for example, its experience, education, or training). File state taxes only 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. File state taxes only   For example, you must amortize the part of the purchase price of a business that is for the existence of a highly skilled workforce. File state taxes only Also, you must amortize the cost of acquiring an existing employment contract or relationship with employees or consultants. File state taxes only Business books and records, etc. File state taxes only   This includes the intangible value of technical manuals, training manuals or programs, data files, and accounting or inventory control systems. File state taxes only 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. File state taxes only Patents, copyrights, etc. File state taxes only   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 . File state taxes only Customer-based intangible. File state taxes only   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. File state taxes only For example, you must amortize the part of the purchase price of a business that is for the existence of the following intangibles. File state taxes only A customer base. File state taxes only A circulation base. File state taxes only An undeveloped market or market growth. File state taxes only Insurance in force. File state taxes only A mortgage servicing contract. File state taxes only An investment management contract. File state taxes only Any other relationship with customers involving the future provision of goods or services. File state taxes only   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. File state taxes only Supplier-based intangible. File state taxes only   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. File state taxes only 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. File state taxes only Do not include any amount required to be paid for the goods or services to honor the terms of the agreement or other relationship. File state taxes only Also, see Assets That Are Not Section 197 Intangibles below. File state taxes only Government-granted license, permit, etc. File state taxes only   This is any right granted by a governmental unit or an agency or instrumentality of a governmental unit. File state taxes only 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. File state taxes only Covenant not to compete. File state taxes only   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. File state taxes only An interest in a trade or business includes an interest in a partnership or a corporation engaged in a trade or business. File state taxes only   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. File state taxes only Franchise, trademark, or trade name. File state taxes only   A franchise, trademark, or trade name is a section 197 intangible. File state taxes only You must amortize its purchase or renewal costs, other than certain contingent payments that you can deduct currently. File state taxes only For information on currently deductible contingent payments, see chapter 11. File state taxes only Professional sports franchise. File state taxes only   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. File state taxes only Contract for the use of, or a term interest in, a section 197 intangible. File state taxes only   Section 197 intangibles include any right under a license, contract, or other arrangement providing for the use of any section 197 intangible. File state taxes only It also includes any term interest in any section 197 intangible, whether the interest is outright or in trust. File state taxes only Assets That Are Not Section 197 Intangibles The following assets are not section 197 intangibles. File state taxes only Any interest in a corporation, partnership, trust, or estate. File state taxes only Any interest under an existing futures contract, foreign currency contract, notional principal contract, interest rate swap, or similar financial contract. File state taxes only Any interest in land. File state taxes only Most computer software. File state taxes only (See Computer software , later. File state taxes only ) 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. File state taxes only An interest in a film, sound recording, video tape, book, or similar property. File state taxes only A right to receive tangible property or services under a contract or from a governmental agency. File state taxes only An interest in a patent or copyright. File state taxes only Certain rights that have a fixed duration or amount. File state taxes only (See Rights of fixed duration or amount , later. File state taxes only ) An interest under either of the following. File state taxes only An existing lease or sublease of tangible property. File state taxes only A debt that was in existence when the interest was acquired. File state taxes only 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. File state taxes only Certain transaction costs incurred by parties to a corporate organization or reorganization in which any part of a gain or loss is not recognized. File state taxes only Intangible property that is not amortizable under the rules for section 197 intangibles can be depreciated if it meets certain requirements. File state taxes only You generally must use the straight line method over its useful life. File state taxes only For certain intangibles, the depreciation period is specified in the law and regulations. File state taxes only For example, the depreciation period for computer software that is not a section 197 intangible is generally 36 months. File state taxes only 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. File state taxes only Computer software. File state taxes only   Section 197 intangibles do not include the following types of computer software. File state taxes only Software that meets all the following requirements. File state taxes only It is, or has been, readily available for purchase by the general public. File state taxes only It is subject to a nonexclusive license. File state taxes only It has not been substantially modified. File state taxes only 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. File state taxes only Software that is not acquired in connection with the acquisition of a trade or business or a substantial part of a trade or business. File state taxes only Computer software defined. File state taxes only   Computer software includes all programs designed to cause a computer to perform a desired function. File state taxes only It also includes any database or similar item that is in the public domain and is incidental to the operation of qualifying software. File state taxes only Rights of fixed duration or amount. File state taxes only   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. File state taxes only However, this does not apply to the following intangibles. File state taxes only Goodwill. File state taxes only Going concern value. File state taxes only A covenant not to compete. File state taxes only A franchise, trademark, or trade name. File state taxes only A customer-related information base, customer-based intangible, or similar item. File state taxes only 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. File state taxes only 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. File state taxes only 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. File state taxes only 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. File state taxes only Amortize these costs using the rules of Revenue Procedure 2004-36. File state taxes only For more information, see Revenue Procedure 2004-36, 2004-24 I. File state taxes only R. File state taxes only B. File state taxes only 1063, available at  www. File state taxes only irs. File state taxes only gov/irb/2004-24_IRB/ar16. File state taxes only html. File state taxes only A change in the treatment of creative property costs is a change in method of accounting. File state taxes only 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. File state taxes only These rules apply to goodwill and going concern value, and to any other section 197 intangible that is not otherwise depreciable or amortizable. File state taxes only Under the anti-churning rules, you cannot use 15-year amortization for the intangible if any of the following conditions apply. File state taxes only You or a related person (defined later) held or used the intangible at any time from July 25, 1991, through August 10, 1993. File state taxes only 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. File state taxes only 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). File state taxes only 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. File state taxes only See Related person , later, for more information. File state taxes only Exceptions. File state taxes only   The anti-churning rules do not apply in the following situations. File state taxes only You acquired the intangible from a decedent and its basis was stepped up to its fair market value. File state taxes only The intangible was amortizable as a section 197 intangible by the seller or transferor you acquired it from. File state taxes only 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. File state taxes only The gain-recognition exception, discussed later, applies. File state taxes only Related person. File state taxes only   For purposes of the anti-churning rules, the following are related persons. File state taxes only An individual and his or her brothers, sisters, half-brothers, half-sisters, spouse, ancestors (parents, grandparents, etc. File state taxes only ), and lineal descendants (children, grandchildren, etc. File state taxes only ). File state taxes only A corporation and an individual who owns, directly or indirectly, more than 20% of the value of the corporation's outstanding stock. File state taxes only 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. File state taxes only (For an exception, see section 1. File state taxes only 197-2(h)(6)(iv) of the regulations. File state taxes only ) 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. File state taxes only The grantor and fiduciary, and the fiduciary and beneficiary, of any trust. File state taxes only 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. File state taxes only The executor and beneficiary of an estate. File state taxes only A tax-exempt educational or charitable organization and a person who directly or indirectly controls the organization (or whose family members control it). File state taxes only 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. File state taxes only 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. File state taxes only Two partnerships if the same persons own, directly or indirectly, more than 20% of the capital or profits interests in both partnerships. File state taxes only A partnership and a person who owns, directly or indirectly, more than 20% of the capital or profits interests in the partnership. File state taxes only Two persons who are engaged in trades or businesses under common control (as described in section 41(f)(1) of the Internal Revenue Code). File state taxes only When to determine relationship. File state taxes only   Persons are treated as related if the relationship existed at the following time. File state taxes only In the case of a single transaction, immediately before or immediately after the transaction in which the intangible was acquired. File state taxes only 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. File state taxes only Ownership of stock. File state taxes only   In determining whether an individual directly or indirectly owns any of the outstanding stock of a corporation, the following rules apply. File state taxes only Rule 1. File state taxes only   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. File state taxes only Rule 2. File state taxes only   An individual is considered to own the stock directly or indirectly owned by or for his or her family. File state taxes only Family includes only brothers and sisters, half-brothers and half-sisters, spouse, ancestors, and lineal descendants. File state taxes only Rule 3. File state taxes only   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. File state taxes only Rule 4. File state taxes only   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. File state taxes only 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. File state taxes only Gain-recognition exception. File state taxes only   This exception to the anti-churning rules applies if the person you acquired the intangible from (the transferor) meets both of the following requirements. File state taxes only 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. File state taxes only That person chose to recognize gain on the disposition of the intangible and pay income tax on the gain at the highest tax rate. File state taxes only See chapter 2 in Publication 544 for information on making this choice. File state taxes only   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. File state taxes only Notification. File state taxes only   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. File state taxes only Anti-abuse rule. File state taxes only   You cannot amortize any section 197 intangible acquired in a transaction for which the principal purpose was either of the following. File state taxes only To avoid the requirement that the intangible be acquired after August 10, 1993. File state taxes only To avoid any of the anti-churning rules. File state taxes only More information. File state taxes only   For more information about the anti-churning rules, including additional rules for partnerships, see Regulations section 1. File state taxes only 197-2(h). File state taxes only 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. File state taxes only See Amended Return , next. File state taxes only If you are not allowed to make the correction on an amended return, you can change your accounting method to claim the correct amortization. File state taxes only See Changing Your Accounting Method , later. File state taxes only Amended Return If you deducted an incorrect amount for amortization, you can file an amended return to correct the following. File state taxes only A mathematical error made in any year. File state taxes only A posting error made in any year. File state taxes only An amortization deduction for a section 197 intangible for which you have not adopted a method of accounting. File state taxes only When to file. File state taxes only   If an amended return is allowed, you must file it by the later of the following dates. File state taxes only 3 years from the date you filed your original return for the year in which you did not deduct the correct amount. File state taxes only (A return filed early is considered filed on the due date. File state taxes only ) 2 years from the time you paid your tax for that year. File state taxes only Changing Your Accounting Method Generally, you must get IRS approval to change your method of accounting. File state taxes only File Form 3115, Application for Change in Accounting Method, to request a change to a permissible method of accounting for amortization. File state taxes only The following are examples of a change in method of accounting for amortization. File state taxes only A change in the amortization method, period of recovery, or convention of an amortizable asset. File state taxes only A change in the accounting for amortizable assets from a single asset account to a multiple asset account (pooling), or vice versa. File state taxes only A change in the accounting for amortizable assets from one type of multiple asset account to a different type of multiple asset account. File state taxes only 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. File state taxes only An adjustment in the useful life of an amortizable asset. File state taxes only Generally, the making of a late amortization election or the revocation of a timely valid amortization election. File state taxes only Any change in the placed-in-service date of an amortizable asset. File state taxes only See Regulations section 1. File state taxes only 446-1(e)(2)(ii)(a) for more information and examples. File state taxes only Automatic approval. File state taxes only   In some instances, you may be able to get automatic approval from the IRS to change your method of accounting for amortization. File state taxes only For a list of automatic accounting method changes, see the Instructions for Form 3115. File state taxes only 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. File state taxes only 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. File state taxes only See Revenue Procedure 2006-12, 2006-3 I. File state taxes only R. File state taxes only B. File state taxes only 310, available at  www. File state taxes only irs. File state taxes only gov/irb/2006-03_IRB/ar14. File state taxes only html. File state taxes only  See Revenue Procedure 2006-37, 2006-38 I. File state taxes only R. File state taxes only B. File state taxes only 499, available at  www. File state taxes only irs. File state taxes only gov/irb/2006-38_IRB/ar10. File state taxes only html. File state taxes only  See Revenue Procedure 2008-52, 2008-36 I. File state taxes only R. File state taxes only B. File state taxes only 587, available at www. File state taxes only irs. File state taxes only gov/irb/2008-36_IRB/ar09. File state taxes only html. File state taxes only  See Revenue Procedure 2009-39, 2009-38 I. File state taxes only R. File state taxes only B. File state taxes only 371, available at  www. File state taxes only irs. File state taxes only gov/irb/2009-38_IRB/ar08. File state taxes only html. File state taxes only  See Revenue Procedure 2011-14, 2011-4 I. File state taxes only R. File state taxes only B. File state taxes only 330, available at  www. File state taxes only irs. File state taxes only gov/irb/2011-04_IRB/ar08. File state taxes only html. File state taxes only  See Revenue Procedure 2011-22, 2011-18 I. File state taxes only R. File state taxes only B. File state taxes only 737, available at  www. File state taxes only irs. File state taxes only gov/irb/2011-18_IRB/ar08. File state taxes only html. File state taxes only Also, see Revenue Procedure 2012-39, 2012-41 I. File state taxes only R. File state taxes only B. File state taxes only 470 available at www. File state taxes only irs. File state taxes only gov/irb/2012-41_IRB/index. File state taxes only html. File state taxes only Disposition of Section 197 Intangibles A section 197 intangible is treated as depreciable property used in your trade or business. File state taxes only 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). File state taxes only 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. File state taxes only Any remaining gain, or any loss, is a section 1231 gain or loss. File state taxes only If you held the intangible 1 year or less, any gain or loss on its disposition is an ordinary gain or loss. File state taxes only For more information on ordinary or capital gain or loss on business property, see chapter 3 in Publication 544. File state taxes only Nondeductible loss. File state taxes only   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. File state taxes only Instead, increase the adjusted basis of each remaining amortizable section 197 intangible by a proportionate part of the nondeductible loss. File state taxes only Figure the increase by multiplying the nondeductible loss on the disposition of the intangible by the following fraction. File state taxes only The numerator is the adjusted basis of each remaining intangible on the date of the disposition. File state taxes only The denominator is the total adjusted bases of all remaining amortizable section 197 intangibles on the date of the disposition. File state taxes only Covenant not to compete. File state taxes only   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. File state taxes only Nonrecognition transfers. File state taxes only   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. File state taxes only You amortize this part of the adjusted basis over the intangible's remaining amortization period in the hands of the transferor. File state taxes only Nonrecognition transfers include transfers to a corporation, partnership contributions and distributions, like-kind exchanges, and involuntary conversions. File state taxes only   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. File state taxes only 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. File state taxes only Example. File state taxes only You own a section 197 intangible you have amortized for 4 full years. File state taxes only It has a remaining unamortized basis of $30,000. File state taxes only You exchange the asset plus $10,000 for a like-kind section 197 intangible. File state taxes only The nonrecognition provisions of like-kind exchanges apply. File state taxes only 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. File state taxes only You amortize the other $10,000 of adjusted basis over a new 15-year period. File state taxes only For more information, see Regulations section 1. File state taxes only 197-2(g). File state taxes only Reforestation Costs You can elect to deduct a limited amount of reforestation costs paid or incurred during the tax year. File state taxes only See Reforestation Costs in chapter 7. File state taxes only You can elect to amortize the qualifying costs that are not deducted currently over an 84-month period. File state taxes only There is no limit on the amount of your amortization deduction for reforestation costs paid or incurred during the tax year. File state taxes only The election to amortize reforestation costs incurred by a partnership, S corporation, or estate must be made by the partnership, corporation, or estate. File state taxes only A partner, shareholder, or beneficiary cannot make that election. File state taxes only A partner's or shareholder's share of amortizable costs is figured under the general rules for allocating items of income, loss, deduction, etc. File state taxes only , of a partnership or S corporation. File state taxes only 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. File state taxes only Qualifying costs. File state taxes only   Reforestation costs are the direct costs of planting or seeding for forestation or reforestation. File state taxes only Qualifying costs include only those costs you must capitalize and include in the adjusted basis of the property. File state taxes only They include costs for the following items. File state taxes only Site preparation. File state taxes only Seeds or seedlings. File state taxes only Labor. File state taxes only Tools. File state taxes only Depreciation on equipment used in planting and seeding. File state taxes only 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. File state taxes only Qualified timber property. File state taxes only   Qualified timber property is property that contains trees in significant commercial quantities. File state taxes only It can be a woodlot or other site that you own or lease. File state taxes only The property qualifies only if it meets all of the following requirements. File state taxes only It is located in the United States. File state taxes only 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. File state taxes only It consists of at least one acre planted with tree seedlings in the manner normally used in forestation or reforestation. File state taxes only Qualified timber property does not include property on which you have planted shelter belts or ornamental trees, such as Christmas trees. File state taxes only Amortization period. File state taxes only   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. File state taxes only You can claim amortization deductions for no more than 6 months of the first and last (eighth) tax years of the period. File state taxes only Life tenant and remainderman. File state taxes only   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. File state taxes only Any remainder interest in the property is ignored for amortization purposes. File state taxes only Recapture. File state taxes only   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. File state taxes only See chapter 3 of Publication 544 for more information. File state taxes only How to make the election. File state taxes only   To elect to amortize qualifying reforestation costs, complete Part VI of Form 4562 and attach a statement that contains the following information. File state taxes only A description of the costs and the dates you incurred them. File state taxes only A description of the type of timber being grown and the purpose for which it is grown. File state taxes only Attach a separate statement for each property for which you amortize reforestation costs. File state taxes only   Generally, you must make the election on a timely filed return (including extensions) for the tax year in which you incurred the costs. File state taxes only 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). File state taxes only Attach Form 4562 and the statement to the amended return and write “Filed pursuant to section 301. File state taxes only 9100-2” on Form 4562. File state taxes only File the amended return at the same address you filed the original return. File state taxes only Revoking the election. File state taxes only   You must get IRS approval to revoke your election to amortize qualifying reforestation costs. File state taxes only 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. File state taxes only Please provide your daytime telephone number (optional), in case we need to contact you. File state taxes only 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. File state taxes only    Send the application to: Internal Revenue Service Associate Chief Counsel Passthroughs and Special Industries CC:PSI:6 1111 Constitution Ave. File state taxes only 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. File state taxes only 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. File state taxes only 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). File state taxes only If you retire or abandon the property during the amortization period, no amortization deduction is allowed in the year of retirement or abandonment. File state taxes only Pollution Control Facilities You can elect to amortize the cost of a certified pollution control facility over 60 months. File state taxes only However, see Atmospheric pollution control facilities for an exception. File state taxes only The cost of a pollution control facility that is not eligible for amortization can be depreciated under the regular rules for depreciation. File state taxes only 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. File state taxes only You must reduce its cost (amortizable basis) by the amount of any special allowance you claim. File state taxes only See chapter 3 of Publication 946. File state taxes only 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. File state taxes only The facility must do so by removing, changing, disposing, storing, or preventing the creation or emission of pollutants, contaminants, wastes, or heat. File state taxes only The facility must be certified by state and federal certifying authorities. File state taxes only 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. File state taxes only Also, it must not significantly change the nature of the manufacturing or production process or facility. File state taxes only 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). File state taxes only The federal certifying authority will describe the nature of the potential cost recovery. File state taxes only You must then reduce the amortizable basis of the facility by this potential recovery. File state taxes only New identifiable treatment facility. File state taxes only   A new identifiable treatment facility is tangible depreciable property that is identifiable as a treatment facility. File state taxes only It does not include a building and its structural components unless the building is exclusively a treatment facility. File state taxes only Atmospheric pollution control facilities. File state taxes only   Certain atmospheric pollution control facilities can be amortized over 84 months. File state taxes only To qualify, the following must apply. File state taxes only The facility must be acquired and placed in service after April 11, 2005. File state taxes only If acquired, the original use must begin with you after April 11, 2005. File state taxes only 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. File state taxes only If you construct, reconstruct, or erect the facility, only the basis attributable to the construction, reconstruction, or erection completed after April 11, 2005, qualifies. File state taxes only Basis reduction for corporations. File state taxes only   A corporation must reduce the amortizable basis of a pollution control facility by 20% before figuring the amortization deduction. File state taxes only More information. File state taxes only   For more information on the amortization of pollution control facilities, see Code sections 169 and 291(c) and the related regulations. File state taxes only 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). File state taxes only If you elect to amortize these costs, deduct them in equal amounts over 60 months or more. File state taxes only The amortization period begins the month you first receive an economic benefit from the costs. File state taxes only For a definition of “research and experimental costs” and information on deducting them as current business expenses, see chapter 7. File state taxes only Optional write-off method. File state taxes only   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. File state taxes only For more information, see Optional Write-off of Certain Tax Preferences , later, and section 59(e) of the Internal Revenue Code. File state taxes only Costs you can amortize. File state taxes only   You can amortize costs chargeable to a capital account (see chapter 1) if you meet both of the following requirements. File state taxes only You paid or incurred the costs in your trade or business. File state taxes only You are not deducting the costs currently. File state taxes only How to make the election. File state taxes only   To elect to amortize research and experimental costs, complete Part VI of Form 4562 and attach it to your income tax return. File state taxes only Generally, you must file the return by the due date (including extensions). File state taxes only 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). File state taxes only Attach Form 4562 to the amended return and write “Filed pursuant to section 301. File state taxes only 9100-2” on Form 4562. File state taxes only File the amended return at the same address you filed the original return. File state taxes only   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. File state taxes only 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. File state taxes only If you make this election, there is no AMT adjustment. File state taxes only 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. File state taxes only How to make the election. File state taxes only   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. File state taxes only   Generally, the election must be made on a timely filed return (including extensions) for the tax year in which you incurred the costs. File state taxes only 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). File state taxes only Attach Form 4562 to the amended return and write “Filed pursuant to section 301. File state taxes only 9100-2” on Form 4562. File state taxes only File the amended return at the same address you filed the original return. File state taxes only Revoking the election. File state taxes only   You must obtain consent from the IRS to revoke your election. File state taxes only 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. File state taxes only The request must contain all of the information necessary to demonstrate the rare and unusual circumstances that would justify granting revocation. File state taxes only If the request for revocation is approved, any unamortized costs are deductible in the year the revocation is effective. File state taxes only Prev  Up  Next   Home   More Online Publications
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Foreign Agricultural Service

The Foreign Agricultural Service helps bring U.S. agricultural products to international markets by prodviding resource and market intelligence assistance to exporters. The Foreign Agricultural Service also assists in the administration of foreign food aid, including helping to boost the agricultural capabilities of aid recipients.

Contact the Agency or Department

Website: Foreign Agricultural Service

Address: Foreign Agricultural Service
1400 Independence Ave SW

Washington, DC 20250

The File State Taxes Only

File state taxes only Index A Accountable plan, Accountable plans. File state taxes only Additional Medicare Tax, What's New, Introduction, Additional Medicare Tax. File state taxes only Administrators, Teachers or administrators. File state taxes only American Samoa, Residents of Puerto Rico, the U. File state taxes only S. File state taxes only Virgin Islands, Guam, the CNMI, and American Samoa. File state taxes only , Specified U. File state taxes only S. File state taxes only possessions. File state taxes only Assistance (see Tax help) C Cantors, Cantors. File state taxes only Christian Science Practitioners, Table 1. File state taxes only Are Your Ministerial Earnings* Covered Under FICA or SECA?, Christian Science Practitioners and Readers, Practitioners. File state taxes only , Christian Science Practitioners and Readers, Members of the Clergy Readers, Table 1. File state taxes only Are Your Ministerial Earnings* Covered Under FICA or SECA?, Christian Science Practitioners and Readers, Readers. File state taxes only , Christian Science Practitioners and Readers Common-law employee, Common-law employee. File state taxes only Commonwealth of the Northern Mariana Islands (CNMI), Residents of Puerto Rico, the U. File state taxes only S. File state taxes only Virgin Islands, Guam, the CNMI, and American Samoa. File state taxes only , Specified U. File state taxes only S. File state taxes only possessions. File state taxes only Comprehensive example, Comprehensive Example, Attachment 2—John E. File state taxes only White011-00-2222 Worksheet 4. File state taxes only Figuring Net Self-Employment Income for Schedule SE (Form 1040) Credit Earned income, Earned Income Credit Retirement savings contributions, Retirement savings contributions credit. File state taxes only D Deduction for self-employment tax, Deduction for SE Tax E Earned income credit, Earned Income Credit Effective date Exemption from FICA taxes, Effective date. File state taxes only Exemption from self-employment (SE) tax, Effective date of exemption. File state taxes only , Effective date of exemption. File state taxes only Employment status, Employment status for other tax purposes. File state taxes only Estimated tax, Income Tax Withholding and Estimated Tax Exclusion, foreign earned income, Foreign Earned Income Exemption Form 4029, Table 2. File state taxes only The Self-Employment Tax Exemption Application and Approval Process, Requesting Exemption—Form 4029 Form 4361, Table 2. File state taxes only The Self-Employment Tax Exemption Application and Approval Process, Requesting Exemption—Form 4361 From FICA taxes, Exemption From FICA Taxes From self-employment (SE) tax, Exemption From Self-Employment (SE) Tax, Refunds of SE tax paid. File state taxes only F Federal Insurance Contributions Act (see FICA) FICA Earnings covered, Table 1. File state taxes only Are Your Ministerial Earnings* Covered Under FICA or SECA? Effective date of exemption, Effective date. File state taxes only Election to exclude church employees, Election by Church To Exclude Its Employees From FICA Coverage Filing requirements for most taxpayers, Filing Your Return Foreign earned income, Foreign Earned Income Form 1040, Excess rental allowance. File state taxes only , Health Insurance Costs of Self-Employed Ministers, Deduction for SE Tax, Exemption from SE tax. File state taxes only , Form 1040, , 1040-ES, Income Tax Withholding and Estimated Tax 1040X, Refunds of SE tax. File state taxes only , Refunds of SE tax paid. File state taxes only 2106-EZ, 4029, Table 2. File state taxes only The Self-Employment Tax Exemption Application and Approval Process, Requesting Exemption—Form 4029, Exemption from SE tax. File state taxes only 4361, Table 2. File state taxes only The Self-Employment Tax Exemption Application and Approval Process, Requesting Exemption—Form 4361, Exemption from SE tax. File state taxes only 8959, What's New, Introduction, Additional Medicare Tax. File state taxes only 941, Forms 941, 943, and 944. File state taxes only 943, Forms 941, 943, and 944. File state taxes only 944, Forms 941, 943, and 944. File state taxes only Schedule A (Form 1040), Schedule C-EZ (Form 1040), Schedule SE (Form 1040), SS-8, Form SS-8. File state taxes only Free tax services, Free help with your tax return. File state taxes only G Gross income Amounts included in, Amounts included in gross income. File state taxes only Amounts not included in, Amounts not included in gross income. File state taxes only Guam, Residents of Puerto Rico, the U. File state taxes only S. File state taxes only Virgin Islands, Guam, the CNMI, and American Samoa. File state taxes only , Specified U. File state taxes only S. File state taxes only possessions. File state taxes only H Health insurance costs, deductibility, Health Insurance Costs of Self-Employed Ministers Help (see Tax help) Home ownership, exclusion of allowance, Home ownership. File state taxes only , Cantors. File state taxes only House or parsonage, fair rental value, Fair rental value of parsonage. File state taxes only I Income tax Estimated tax, Income Tax Withholding and Estimated Tax Income and expenses, Income Tax: Income and Expenses, Income Tax Withholding and Estimated Tax Withholding, Income Tax Withholding and Estimated Tax Individual retirement arrangements (IRAs), Individual retirement arrangements (IRAs). File state taxes only K Keogh (H. File state taxes only R. File state taxes only 10) plans, Retirement plans for the self-employed. File state taxes only L Lay employees (see Religious workers) Living abroad, Overseas duty. File state taxes only , Foreign Earned Income M Members of recognized religious sects, Table 1. File state taxes only Are Your Ministerial Earnings* Covered Under FICA or SECA?, Members of Recognized Religious Sects Members of religious orders, Table 1. File state taxes only Are Your Ministerial Earnings* Covered Under FICA or SECA?, Members of Religious Orders, Members of Religious Orders, Members of the Clergy, Refunds of SE tax. File state taxes only , Earnings—Members of Religious Orders Ministerial services, exemption for Christian Science practitioners and readers, Christian Science Practitioners and Readers Members of religious orders, Members of Religious Orders Ministers, Ministers Ministers, Table 1. File state taxes only Are Your Ministerial Earnings* Covered Under FICA or SECA?, Ministers, Ministers defined. File state taxes only , Form SS-8. File state taxes only , Ministers, Members of the Clergy, Refunds of SE tax. File state taxes only , Income Tax: Income and Expenses, Income Tax Withholding and Estimated Tax Retired, Retired ministers. File state taxes only Missionary team, married couple, Married Couple Missionary Team N Nonaccountable plan, Nonaccountable plan. File state taxes only Nonfarm optional method, Nonfarm Optional Method Nonresident aliens, U. File state taxes only S. File state taxes only Citizens and Resident and Nonresident Aliens O Offerings and fees, Amounts included in gross income. File state taxes only , Offerings and Fees Overseas duty, Overseas duty. File state taxes only , Foreign Earned Income P Parsonage allowance, Amounts included in gross income. File state taxes only , Exclusion of Rental Allowance and Fair Rental Value of a Parsonage, Cantors. File state taxes only Publications (see Tax help) Puerto Rico, Residents of Puerto Rico, the U. File state taxes only S. File state taxes only Virgin Islands, Guam, the CNMI, and American Samoa. File state taxes only , Specified U. File state taxes only S. File state taxes only possessions. File state taxes only Q Qualified retirement plan, Retirement plans for the self-employed. File state taxes only R Refunds, self-employment tax, Refunds of SE tax. File state taxes only , Refunds of SE tax paid. File state taxes only Reimbursements, Employee reimbursement arrangements. File state taxes only Religious orders, members of, Table 1. File state taxes only Are Your Ministerial Earnings* Covered Under FICA or SECA?, Members of Religious Orders, Members of Religious Orders, Members of the Clergy, Refunds of SE tax. File state taxes only , Earnings—Members of Religious Orders Religious workers, Table 1. File state taxes only Are Your Ministerial Earnings* Covered Under FICA or SECA?, Coverage of Religious Workers (Church Employees) Rental allowance, Amounts included in gross income. File state taxes only , Exclusion of Rental Allowance and Fair Rental Value of a Parsonage, Rental allowances. File state taxes only , Cantors. File state taxes only Resident aliens, U. File state taxes only S. File state taxes only Citizens and Resident and Nonresident Aliens Retired ministers, Retired ministers. File state taxes only Retirement savings arrangements, Retirement Savings Arrangements Retirement savings contributions credit, Retirement savings contributions credit. File state taxes only Royalty income from books, Books or articles. File state taxes only S SECA, Table 1. File state taxes only Are Your Ministerial Earnings* Covered Under FICA or SECA?, Social Security Coverage Sects, members of recognized religious, Table 1. File state taxes only Are Your Ministerial Earnings* Covered Under FICA or SECA?, Members of Recognized Religious Sects Self-Employment Contributions Act (see SECA) Self-employment tax Deduction, Deduction for SE Tax Exemption, Exemption From Self-Employment (SE) Tax, Refunds of SE tax paid. File state taxes only , Exemption from SE tax. File state taxes only Maximum earnings, Earnings Subject to SE Tax Nonfarm optional method, Nonfarm Optional Method Refunds of, Refunds of SE tax. File state taxes only , Refunds of SE tax paid. File state taxes only Regular method, Regular Method Self-employment, net earnings from, Self-Employment Tax: Figuring Net Earnings, More information. File state taxes only SIMPLE plan, Retirement plans for the self-employed. File state taxes only Simplified employee pension (SEP) plan, Retirement plans for the self-employed. File state taxes only Social security coverage, Social Security Coverage T Tax help, How To Get Tax Help Tax-free income, deductibility of expenses, Expenses Allocable to Tax-Free Income Tax-sheltered annuity plans, Tax-sheltered annuity plans. File state taxes only Teachers, Teachers or administrators. File state taxes only Theological students, Theological students. File state taxes only Traveling evangelists, Traveling evangelists. File state taxes only U U. File state taxes only S. File state taxes only citizens, U. File state taxes only S. File state taxes only Citizens and Resident and Nonresident Aliens U. File state taxes only S. File state taxes only Virgin Islands, Residents of Puerto Rico, the U. File state taxes only S. File state taxes only Virgin Islands, Guam, the CNMI, and American Samoa. File state taxes only , Specified U. File state taxes only S. File state taxes only possessions. File state taxes only V Vow of poverty, Table 1. File state taxes only Are Your Ministerial Earnings* Covered Under FICA or SECA?, Vow of poverty. File state taxes only , Services performed outside the order. File state taxes only , Effect of employee status. File state taxes only , Exemption From Self-Employment (SE) Tax, Earnings—Members of Religious Orders Prev  Up     Home   More Online Publications