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Free E-file State Taxes Only

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Free E-file State Taxes Only

Free e-file state taxes only 3. Free e-file state taxes only   Rent Expense Table of Contents Introduction Topics - This chapter discusses: RentConditional sales contract. Free e-file state taxes only Leveraged leases. Free e-file state taxes only Leveraged leases of limited-use property. Free e-file state taxes only Taxes on Leased Property Cost of Getting a Lease Improvements by Lessee Capitalizing Rent Expenses Introduction This chapter discusses the tax treatment of rent or lease payments you make for property you use in your business but do not own. Free e-file state taxes only It also discusses how to treat other kinds of payments you make that are related to your use of this property. Free e-file state taxes only These include payments you make for taxes on the property. Free e-file state taxes only Topics - This chapter discusses: The definition of rent Taxes on leased property The cost of getting a lease Improvements by the lessee Capitalizing rent expenses Rent Rent is any amount you pay for the use of property you do not own. Free e-file state taxes only In general, you can deduct rent as an expense only if the rent is for property you use in your trade or business. Free e-file state taxes only If you have or will receive equity in or title to the property, the rent is not deductible. Free e-file state taxes only Unreasonable rent. Free e-file state taxes only   You cannot take a rental deduction for unreasonable rent. Free e-file state taxes only Ordinarily, the issue of reasonableness arises only if you and the lessor are related. Free e-file state taxes only Rent paid to a related person is reasonable if it is the same amount you would pay to a stranger for use of the same property. Free e-file state taxes only Rent is not unreasonable just because it is figured as a percentage of gross sales. Free e-file state taxes only For examples of related persons, see Related persons in chapter 2, Publication 544. Free e-file state taxes only Rent on your home. Free e-file state taxes only   If you rent your home and use part of it as your place of business, you may be able to deduct the rent you pay for that part. Free e-file state taxes only You must meet the requirements for business use of your home. Free e-file state taxes only For more information, see Business use of your home in chapter 1. Free e-file state taxes only Rent paid in advance. Free e-file state taxes only   Generally, rent paid in your trade or business is deductible in the year paid or accrued. Free e-file state taxes only If you pay rent in advance, you can deduct only the amount that applies to your use of the rented property during the tax year. Free e-file state taxes only You can deduct the rest of your payment only over the period to which it applies. Free e-file state taxes only Example 1. Free e-file state taxes only You are a calendar year taxpayer and you leased a building for 5 years beginning July 1. Free e-file state taxes only Your rent is $12,000 per year. Free e-file state taxes only You paid the first year's rent ($12,000) on June 30. Free e-file state taxes only You can deduct only $6,000 (6/12 × $12,000) for the rent that applies to the first year. Free e-file state taxes only Example 2. Free e-file state taxes only You are a calendar year taxpayer. Free e-file state taxes only Last January you leased property for 3 years for $6,000 a year. Free e-file state taxes only You paid the full $18,000 (3 × $6,000) during the first year of the lease. Free e-file state taxes only Each year you can deduct only $6,000, the part of the lease that applies to that year. Free e-file state taxes only Canceling a lease. Free e-file state taxes only   You generally can deduct as rent an amount you pay to cancel a business lease. Free e-file state taxes only Lease or purchase. Free e-file state taxes only   There may be instances in which you must determine whether your payments are for rent or for the purchase of the property. Free e-file state taxes only You must first determine whether your agreement is a lease or a conditional sales contract. Free e-file state taxes only Payments made under a conditional sales contract are not deductible as rent expense. Free e-file state taxes only Conditional sales contract. Free e-file state taxes only   Whether an agreement is a conditional sales contract depends on the intent of the parties. Free e-file state taxes only Determine intent based on the provisions of the agreement and the facts and circumstances that exist when you make the agreement. Free e-file state taxes only No single test, or special combination of tests, always applies. Free e-file state taxes only However, in general, an agreement may be considered a conditional sales contract rather than a lease if any of the following is true. Free e-file state taxes only The agreement applies part of each payment toward an equity interest you will receive. Free e-file state taxes only You get title to the property after you make a stated amount of required payments. Free e-file state taxes only The amount you must pay to use the property for a short time is a large part of the amount you would pay to get title to the property. Free e-file state taxes only You pay much more than the current fair rental value of the property. Free e-file state taxes only You have an option to buy the property at a nominal price compared to the value of the property when you may exercise the option. Free e-file state taxes only Determine this value when you make the agreement. Free e-file state taxes only You have an option to buy the property at a nominal price compared to the total amount you have to pay under the agreement. Free e-file state taxes only The agreement designates part of the payments as interest, or that part is easy to recognize as interest. Free e-file state taxes only Leveraged leases. Free e-file state taxes only   Leveraged lease transactions may not be considered leases. Free e-file state taxes only Leveraged leases generally involve three parties: a lessor, a lessee, and a lender to the lessor. Free e-file state taxes only Usually the lease term covers a large part of the useful life of the leased property, and the lessee's payments to the lessor are enough to cover the lessor's payments to the lender. Free e-file state taxes only   If you plan to take part in what appears to be a leveraged lease, you may want to get an advance ruling. Free e-file state taxes only Revenue Procedure 2001-28 on page 1156 of Internal Revenue Bulletin 2001-19 contains the guidelines the IRS will use to determine if a leveraged lease is a lease for federal income tax purposes. Free e-file state taxes only Revenue Procedure 2001-29 on page 1160 of the same Internal Revenue Bulletin provides the information required to be furnished in a request for an advance ruling on a leveraged lease transaction. Free e-file state taxes only Internal Revenue Bulletin 2001-19 is available at www. Free e-file state taxes only irs. Free e-file state taxes only gov/pub/irs-irbs/irb01-19. Free e-file state taxes only pdf. Free e-file state taxes only   In general, Revenue Procedure 2001-28 provides that, for advance ruling purposes only, the IRS will consider the lessor in a leveraged lease transaction to be the owner of the property and the transaction to be a valid lease if all the factors in the revenue procedure are met, including the following. Free e-file state taxes only The lessor must maintain a minimum unconditional “at risk” equity investment in the property (at least 20% of the cost of the property) during the entire lease term. Free e-file state taxes only The lessee may not have a contractual right to buy the property from the lessor at less than fair market value when the right is exercised. Free e-file state taxes only The lessee may not invest in the property, except as provided by Revenue Procedure 2001-28. Free e-file state taxes only The lessee may not lend any money to the lessor to buy the property or guarantee the loan used by the lessor to buy the property. Free e-file state taxes only The lessor must show that it expects to receive a profit apart from the tax deductions, allowances, credits, and other tax attributes. Free e-file state taxes only   The IRS may charge you a user fee for issuing a tax ruling. Free e-file state taxes only For more information, see Revenue Procedure 2014-1 available at  www. Free e-file state taxes only irs. Free e-file state taxes only gov/irb/2014-1_IRB/ar05. Free e-file state taxes only html. Free e-file state taxes only Leveraged leases of limited-use property. Free e-file state taxes only   The IRS will not issue advance rulings on leveraged leases of so-called limited-use property. Free e-file state taxes only Limited-use property is property not expected to be either useful to or usable by a lessor at the end of the lease term except for continued leasing or transfer to a lessee. Free e-file state taxes only See Revenue Procedure 2001-28 for examples of limited-use property and property that is not limited-use property. Free e-file state taxes only Leases over $250,000. Free e-file state taxes only   Special rules are provided for certain leases of tangible property. Free e-file state taxes only The rules apply if the lease calls for total payments of more than $250,000 and any of the following apply. Free e-file state taxes only Rents increase during the lease. Free e-file state taxes only Rents decrease during the lease. Free e-file state taxes only Rents are deferred (rent is payable after the end of the calendar year following the calendar year in which the use occurs and the rent is allocated). Free e-file state taxes only Rents are prepaid (rent is payable before the end of the calendar year preceding the calendar year in which the use occurs and the rent is allocated). Free e-file state taxes only These rules do not apply if your lease specifies equal amounts of rent for each month in the lease term and all rent payments are due in the calendar year to which the rent relates (or in the preceding or following calendar year). Free e-file state taxes only   Generally, if the special rules apply, you must use an accrual method of accounting (and time value of money principles) for your rental expenses, regardless of your overall method of accounting. Free e-file state taxes only In addition, in certain cases in which the IRS has determined that a lease was designed to achieve tax avoidance, you must take rent and stated or imputed interest into account under a constant rental accrual method in which the rent is treated as accruing ratably over the entire lease term. Free e-file state taxes only For details, see section 467 of the Internal Revenue Code. Free e-file state taxes only Taxes on Leased Property If you lease business property, you can deduct as additional rent any taxes you have to pay to or for the lessor. Free e-file state taxes only When you can deduct these taxes as additional rent depends on your accounting method. Free e-file state taxes only Cash method. Free e-file state taxes only   If you use the cash method of accounting, you can deduct the taxes as additional rent only for the tax year in which you pay them. Free e-file state taxes only Accrual method. Free e-file state taxes only   If you use an accrual method of accounting, you can deduct taxes as additional rent for the tax year in which you can determine all the following. Free e-file state taxes only That you have a liability for taxes on the leased property. Free e-file state taxes only How much the liability is. Free e-file state taxes only That economic performance occurred. Free e-file state taxes only   The liability and amount of taxes are determined by state or local law and the lease agreement. Free e-file state taxes only Economic performance occurs as you use the property. Free e-file state taxes only Example 1. Free e-file state taxes only Oak Corporation is a calendar year taxpayer that uses an accrual method of accounting. Free e-file state taxes only Oak leases land for use in its business. Free e-file state taxes only Under state law, owners of real property become liable (incur a lien on the property) for real estate taxes for the year on January 1 of that year. Free e-file state taxes only However, they do not have to pay these taxes until July 1 of the next year (18 months later) when tax bills are issued. Free e-file state taxes only Under the terms of the lease, Oak becomes liable for the real estate taxes in the later year when the tax bills are issued. Free e-file state taxes only If the lease ends before the tax bill for a year is issued, Oak is not liable for the taxes for that year. Free e-file state taxes only Oak cannot deduct the real estate taxes as rent until the tax bill is issued. Free e-file state taxes only This is when Oak's liability under the lease becomes fixed. Free e-file state taxes only Example 2. Free e-file state taxes only The facts are the same as in Example 1 except that, according to the terms of the lease, Oak becomes liable for the real estate taxes when the owner of the property becomes liable for them. Free e-file state taxes only As a result, Oak will deduct the real estate taxes as rent on its tax return for the earlier year. Free e-file state taxes only This is the year in which Oak's liability under the lease becomes fixed. Free e-file state taxes only Cost of Getting a Lease You may either enter into a new lease with the lessor of the property or get an existing lease from another lessee. Free e-file state taxes only Very often when you get an existing lease from another lessee, you must pay the previous lessee money to get the lease, besides having to pay the rent on the lease. Free e-file state taxes only If you get an existing lease on property or equipment for your business, you generally must amortize any amount you pay to get that lease over the remaining term of the lease. Free e-file state taxes only For example, if you pay $10,000 to get a lease and there are 10 years remaining on the lease with no option to renew, you can deduct $1,000 each year. Free e-file state taxes only The cost of getting an existing lease of tangible property is not subject to the amortization rules for section 197 intangibles discussed in chapter 8. Free e-file state taxes only Option to renew. Free e-file state taxes only   The term of the lease for amortization includes all renewal options plus any other period for which you and the lessor reasonably expect the lease to be renewed. Free e-file state taxes only However, this applies only if less than 75% of the cost of getting the lease is for the term remaining on the purchase date (not including any period for which you may choose to renew, extend, or continue the lease). Free e-file state taxes only Allocate the lease cost to the original term and any option term based on the facts and circumstances. Free e-file state taxes only In some cases, it may be appropriate to make the allocation using a present value computation. Free e-file state taxes only For more information, see Regulations section 1. Free e-file state taxes only 178-1(b)(5). Free e-file state taxes only Example 1. Free e-file state taxes only You paid $10,000 to get a lease with 20 years remaining on it and two options to renew for 5 years each. Free e-file state taxes only Of this cost, you paid $7,000 for the original lease and $3,000 for the renewal options. Free e-file state taxes only Because $7,000 is less than 75% of the total $10,000 cost of the lease (or $7,500), you must amortize the $10,000 over 30 years. Free e-file state taxes only That is the remaining life of your present lease plus the periods for renewal. Free e-file state taxes only Example 2. Free e-file state taxes only The facts are the same as in Example 1, except that you paid $8,000 for the original lease and $2,000 for the renewal options. Free e-file state taxes only You can amortize the entire $10,000 over the 20-year remaining life of the original lease. Free e-file state taxes only The $8,000 cost of getting the original lease was not less than 75% of the total cost of the lease (or $7,500). Free e-file state taxes only Cost of a modification agreement. Free e-file state taxes only   You may have to pay an additional “rent” amount over part of the lease period to change certain provisions in your lease. Free e-file state taxes only You must capitalize these payments and amortize them over the remaining period of the lease. Free e-file state taxes only You cannot deduct the payments as additional rent, even if they are described as rent in the agreement. Free e-file state taxes only Example. Free e-file state taxes only You are a calendar year taxpayer and sign a 20-year lease to rent part of a building starting on January 1. Free e-file state taxes only However, before you occupy it, you decide that you really need less space. Free e-file state taxes only The lessor agrees to reduce your rent from $7,000 to $6,000 per year and to release the excess space from the original lease. Free e-file state taxes only In exchange, you agree to pay an additional rent amount of $3,000, payable in 60 monthly installments of $50 each. Free e-file state taxes only   You must capitalize the $3,000 and amortize it over the 20-year term of the lease. Free e-file state taxes only Your amortization deduction each year will be $150 ($3,000 ÷ 20). Free e-file state taxes only You cannot deduct the $600 (12 × $50) that you will pay during each of the first 5 years as rent. Free e-file state taxes only Commissions, bonuses, and fees. Free e-file state taxes only   Commissions, bonuses, fees, and other amounts you pay to get a lease on property you use in your business are capital costs. Free e-file state taxes only You must amortize these costs over the term of the lease. Free e-file state taxes only Loss on merchandise and fixtures. Free e-file state taxes only   If you sell at a loss merchandise and fixtures that you bought solely to get a lease, the loss is a cost of getting the lease. Free e-file state taxes only You must capitalize the loss and amortize it over the remaining term of the lease. Free e-file state taxes only Improvements by Lessee If you add buildings or make other permanent improvements to leased property, depreciate the cost of the improvements using the modified accelerated cost recovery system (MACRS). Free e-file state taxes only Depreciate the property over its appropriate recovery period. Free e-file state taxes only You cannot amortize the cost over the remaining term of the lease. Free e-file state taxes only If you do not keep the improvements when you end the lease, figure your gain or loss based on your adjusted basis in the improvements at that time. Free e-file state taxes only For more information, see the discussion of MACRS in Publication 946, How To Depreciate Property. Free e-file state taxes only Assignment of a lease. Free e-file state taxes only   If a long-term lessee who makes permanent improvements to land later assigns all lease rights to you for money and you pay the rent required by the lease, the amount you pay for the assignment is a capital investment. Free e-file state taxes only If the rental value of the leased land increased since the lease began, part of your capital investment is for that increase in the rental value. Free e-file state taxes only The rest is for your investment in the permanent improvements. Free e-file state taxes only   The part that is for the increased rental value of the land is a cost of getting a lease, and you amortize it over the remaining term of the lease. Free e-file state taxes only You can depreciate the part that is for your investment in the improvements over the recovery period of the property as discussed earlier, without regard to the lease term. Free e-file state taxes only Capitalizing Rent Expenses Under the uniform capitalization rules, you must capitalize the direct costs and part of the indirect costs for certain production or resale activities. Free e-file state taxes only Include these costs in the basis of property you produce or acquire for resale, rather than claiming them as a current deduction. Free e-file state taxes only You recover the costs through depreciation, amortization, or cost of goods sold when you use, sell, or otherwise dispose of the property. Free e-file state taxes only Indirect costs include amounts incurred for renting or leasing equipment, facilities, or land. Free e-file state taxes only Uniform capitalization rules. Free e-file state taxes only   You may be subject to the uniform capitalization rules if you do any of the following, unless the property is produced for your use other than in a business or an activity carried on for profit. Free e-file state taxes only Produce real property or tangible personal property. Free e-file state taxes only For this purpose, tangible personal property includes a film, sound recording, video tape, book, or similar property. Free e-file state taxes only Acquire property for resale. Free e-file state taxes only However, these rules do not apply to the following property. Free e-file state taxes only Personal property you acquire for resale if your average annual gross receipts are $10 million or less for the 3 prior tax years. Free e-file state taxes only Property you produce if you meet either of the following conditions. Free e-file state taxes only Your indirect costs of producing the property are $200,000 or less. Free e-file state taxes only You use the cash method of accounting and do not account for inventories. Free e-file state taxes only Example 1. Free e-file state taxes only You rent construction equipment to build a storage facility. Free e-file state taxes only If you are subject to the uniform capitalization rules, you must capitalize as part of the cost of the building the rent you paid for the equipment. Free e-file state taxes only You recover your cost by claiming a deduction for depreciation on the building. Free e-file state taxes only Example 2. Free e-file state taxes only You rent space in a facility to conduct your business of manufacturing tools. Free e-file state taxes only If you are subject to the uniform capitalization rules, you must include the rent you paid to occupy the facility in the cost of the tools you produce. Free e-file state taxes only More information. Free e-file state taxes only   For more information on these rules, see Uniform Capitalization Rules in Publication 538 and the regulations under Internal Revenue Code section 263A. Free e-file state taxes only Prev  Up  Next   Home   More Online Publications
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Understanding IRS Guidance - A Brief Primer

For anyone not familiar with the inner workings of tax administration, the array of IRS guidance may seem, well, a little puzzling at first glance. To take a little of the mystery away, here's a brief look at seven of the most common forms of guidance.

In its role in administering the tax laws enacted by the Congress, the IRS must take the specifics of these laws and translate them into detailed regulations, rules and procedures. The Office of Chief Counsel fills this crucial role by producing several different kinds of documents and publications that provide guidance to taxpayers, firms and charitable groups.

Regulation

A regulation is issued by the Internal Revenue Service and Treasury Department to provide guidance for new legislation or to address issues that arise with respect to existing Internal Revenue Code sections. Regulations interpret and give directions on complying with the law. Regulations are published in the Federal Register. Generally, regulations are first published in proposed form in a Notice of Proposed Rulemaking (NPRM). After public input is fully considered through written comments and even a public hearing, a final regulation or a temporary regulation is published as a Treasury Decision (TD), again, in the Federal Register.

Revenue Ruling

A revenue ruling is an official interpretation by the IRS of the Internal Revenue Code, related statutes, tax treaties and regulations. It is the conclusion of the IRS on how the law is applied to a specific set of facts. Revenue rulings are published in the Internal Revenue Bulletin for the information of and guidance to taxpayers, IRS personnel and tax professionals. For example, a revenue ruling may hold that taxpayers can deduct certain automobile expenses.

Revenue Procedure

A revenue procedure is an official statement of a procedure that affects the rights or duties of taxpayers or other members of the public under the Internal Revenue Code, related statutes, tax treaties and regulations and that should be a matter of public knowledge. It is also published in the Internal Revenue Bulletin. While a revenue ruling generally states an IRS position, a revenue procedure provides return filing or other instructions concerning an IRS position. For example, a revenue procedure might specify how those entitled to deduct certain automobile expenses should compute them by applying a certain mileage rate in lieu of calculating actual operating expenses.

Private Letter Ruling

A private letter ruling, or PLR, is a written statement issued to a taxpayer that interprets and applies tax laws to the taxpayer's specific set of facts. A PLR is issued to establish with certainty the federal tax consequences of a particular transaction before the transaction is consummated or before the taxpayer's return is filed. A PLR is issued in response to a written request submitted by a taxpayer and is binding on the IRS if the taxpayer fully and accurately described the proposed transaction in the request and carries out the transaction as described. A PLR may not be relied on as precedent by other taxpayers or IRS personnel. PLRs are generally made public after all information has been removed that could identify the taxpayer to whom it was issued.

Technical Advice Memorandum

A technical advice memorandum, or TAM, is guidance furnished by the Office of Chief Counsel upon the request of an IRS director or an area director, appeals, in response to technical or procedural questions that develop during a proceeding. A request for a TAM generally stems from an examination of a taxpayer's return, a consideration of a taxpayer's claim for a refund or credit, or any other matter involving a specific taxpayer under the jurisdiction of the territory manager or the area director, appeals. Technical Advice Memoranda are issued only on closed transactions and provide the interpretation of proper application of tax laws, tax treaties, regulations, revenue rulings or other precedents. The advice rendered represents a final determination of the position of the IRS, but only with respect to the specific issue in the specific case in which the advice is issued. Technical Advice Memoranda are generally made public after all information has been removed that could identify the taxpayer whose circumstances triggered a specific memorandum.

Notice

A notice is a public pronouncement that may contain guidance that involves substantive interpretations of the Internal Revenue Code or other provisions of the law. For example, notices can be used to relate what regulations will say in situations where the regulations may not be published in the immediate future.
 

Announcement

An announcement is a public pronouncement that has only immediate or short-term value. For example, announcements can be used to summarize the law or regulations without making any substantive interpretation; to state what regulations will say when they are certain to be published in the immediate future; or to notify taxpayers of the existence of an approaching deadline.

Page Last Reviewed or Updated: 12-Feb-2014

The Free E-file State Taxes Only

Free e-file state taxes only 7. Free e-file state taxes only   Costs You Can Deduct or Capitalize Table of Contents What's New Introduction Topics - This chapter discusses: Useful Items - You may want to see: Carrying Charges Research and Experimental CostsProduct. Free e-file state taxes only Costs not included. Free e-file state taxes only Intangible Drilling Costs Exploration CostsPartnerships and S corporations. Free e-file state taxes only Development Costs Circulation Costs Business Start-Up and Organizational Costs Reforestation Costs Retired Asset Removal Costs Barrier Removal CostsOther barrier removals. Free e-file state taxes only Film and Television Production Costs What's New Film and television productions costs. Free e-file state taxes only  The election to expense film and television production costs does not apply to productions that begin after December 31, 2013. Free e-file state taxes only See Film and Television Production Costs , later. Free e-file state taxes only Introduction This chapter discusses costs you can elect to deduct or capitalize. Free e-file state taxes only You generally deduct a cost as a current business expense by subtracting it from your income in either the year you incur it or the year you pay it. Free e-file state taxes only If you capitalize a cost, you may be able to recover it over a period of years through periodic deductions for amortization, depletion, or depreciation. Free e-file state taxes only When you capitalize a cost, you add it to the basis of property to which it relates. Free e-file state taxes only A partnership, corporation, estate, or trust makes the election to deduct or capitalize the costs discussed in this chapter except for exploration costs for mineral deposits. Free e-file state taxes only Each individual partner, shareholder, or beneficiary elects whether to deduct or capitalize exploration costs. Free e-file state taxes only You may be subject to the alternative minimum tax (AMT) if you deduct research and experimental, intangible drilling, exploration, development, circulation, or business organizational costs. Free e-file state taxes only For more information on the alternative minimum tax, see the instructions for the following forms. Free e-file state taxes only Form 6251, Alternative Minimum Tax—Individuals. Free e-file state taxes only Form 4626, Alternative Minimum Tax—Corporations. Free e-file state taxes only Topics - This chapter discusses: Carrying charges Research and experimental costs Intangible drilling costs Exploration costs Development costs Circulation costs Qualified disaster expenses Business start-up and organizational costs Reforestation costs Retired asset removal costs Barrier removal costs Film and television production costs Useful Items - You may want to see: Publication 544 Sales and Other Dispositions of Assets Form (and Instructions) 3468 Investment Credit 8826 Disabled Access Credit See chapter 12 for information about getting publications and forms. Free e-file state taxes only Carrying Charges Carrying charges include the taxes and interest you pay to carry or develop real property or to carry, transport, or install personal property. Free e-file state taxes only Certain carrying charges must be capitalized under the uniform capitalization rules. Free e-file state taxes only (For information on capitalization of interest, see chapter 4 . Free e-file state taxes only ) You can elect to capitalize carrying charges not subject to the uniform capitalization rules, but only if they are otherwise deductible. Free e-file state taxes only You can elect to capitalize carrying charges separately for each project you have and for each type of carrying charge. Free e-file state taxes only For unimproved and unproductive real property, your election is good for only 1 year. Free e-file state taxes only You must decide whether to capitalize carrying charges each year the property remains unimproved and unproductive. Free e-file state taxes only For other real property, your election to capitalize carrying charges remains in effect until construction or development is completed. Free e-file state taxes only For personal property, your election is effective until the date you install or first use it, whichever is later. Free e-file state taxes only How to make the election. Free e-file state taxes only   To make the election to capitalize a carrying charge, attach a statement to your original tax return for the year the election is to be effective indicating which charges you are electing to capitalize. Free e-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). Free e-file state taxes only Attach the statement to the amended return and write “Filed pursuant to section 301. Free e-file state taxes only 9100-2” on the statement. Free e-file state taxes only File the amended return at the same address you filed the original return. Free e-file state taxes only Research and Experimental Costs The costs of research and experimentation are generally capital expenses. Free e-file state taxes only However, you can elect to deduct these costs as a current business expense. Free e-file state taxes only Your election to deduct these costs is binding for the year it is made and for all later years unless you get IRS approval to make a change. Free e-file state taxes only If you meet certain requirements, you may elect to defer and amortize research and experimental costs. Free e-file state taxes only For information on electing to defer and amortize these costs, see Research and Experimental Costs in chapter 8. Free e-file state taxes only Research and experimental costs defined. Free e-file state taxes only   Research and experimental costs are reasonable costs you incur in your trade or business for activities intended to provide information that would eliminate uncertainty about the development or improvement of a product. Free e-file state taxes only Uncertainty exists if the information available to you does not establish how to develop or improve a product or the appropriate design of a product. Free e-file state taxes only Whether costs qualify as research and experimental costs depends on the nature of the activity to which the costs relate rather than on the nature of the product or improvement being developed or the level of technological advancement. Free e-file state taxes only      The costs of obtaining a patent, including attorneys' fees paid or incurred in making and perfecting a patent application, are research and experimental costs. Free e-file state taxes only However, costs paid or incurred to obtain another's patent are not research and experimental costs. Free e-file state taxes only Product. Free e-file state taxes only   The term “product” includes any of the following items. Free e-file state taxes only Formula. Free e-file state taxes only Invention. Free e-file state taxes only Patent. Free e-file state taxes only Pilot model. Free e-file state taxes only Process. Free e-file state taxes only Technique. Free e-file state taxes only Property similar to the items listed above. Free e-file state taxes only It also includes products used by you in your trade or business or held for sale, lease, or license. Free e-file state taxes only Costs not included. Free e-file state taxes only   Research and experimental costs do not include expenses for any of the following activities. Free e-file state taxes only Advertising or promotions. Free e-file state taxes only Consumer surveys. Free e-file state taxes only Efficiency surveys. Free e-file state taxes only Management studies. Free e-file state taxes only Quality control testing. Free e-file state taxes only Research in connection with literary, historical, or similar projects. Free e-file state taxes only The acquisition of another's patent, model, production, or process. Free e-file state taxes only When and how to elect. Free e-file state taxes only   You make the election to deduct research and experimental costs by deducting them on your tax return for the year in which you first pay or incur research and experimental costs. Free e-file state taxes only If you do not make the election to deduct research and experimental costs in the first year in which you pay or incur the costs, you can deduct the costs in a later year only with approval from the IRS. Free e-file state taxes only Deducting or Amortizing Research and Experimentation Costs IF you . Free e-file state taxes only . Free e-file state taxes only . Free e-file state taxes only THEN . Free e-file state taxes only . Free e-file state taxes only . Free e-file state taxes only Elect to deduct research and experimental costs as a current business expense Deduct all research and experimental costs in the first year you pay or incur the costs and all later years. Free e-file state taxes only Do not deduct research and experimental costs as a current business expense If you meet the requirements, amortize them over at least 60 months, starting with the month you first receive an economic benefit from the research. Free e-file state taxes only See Research and Experimental Costs in chapter 8. Free e-file state taxes only Research credit. Free e-file state taxes only   If you pay or incur qualified research expenses, you may be able to take the research credit. Free e-file state taxes only For more information see Form 6765, Credit for Increasing Research Activities and its instructions. Free e-file state taxes only Intangible Drilling Costs The costs of developing oil, gas, or geothermal wells are ordinarily capital expenditures. Free e-file state taxes only You can usually recover them through depreciation or depletion. Free e-file state taxes only However, you can elect to deduct intangible drilling costs (IDCs) as a current business expense. Free e-file state taxes only These are certain drilling and development costs for wells in the United States in which you hold an operating or working interest. Free e-file state taxes only You can deduct only costs for drilling or preparing a well for the production of oil, gas, or geothermal steam or hot water. Free e-file state taxes only You can elect to deduct only the costs of items with no salvage value. Free e-file state taxes only These include wages, fuel, repairs, hauling, and supplies related to drilling wells and preparing them for production. Free e-file state taxes only Your cost for any drilling or development work done by contractors under any form of contract is also an IDC. Free e-file state taxes only However, see Amounts paid to contractor that must be capitalized , later. Free e-file state taxes only You can also elect to deduct the cost of drilling exploratory bore holes to determine the location and delineation of offshore hydrocarbon deposits if the shaft is capable of conducting hydrocarbons to the surface on completion. Free e-file state taxes only It does not matter whether there is any intent to produce hydrocarbons. Free e-file state taxes only If you do not elect to deduct your IDCs as a current business expense, you can elect to deduct them over the 60-month period beginning with the month they were paid or incurred. Free e-file state taxes only Amounts paid to contractor that must be capitalized. Free e-file state taxes only   Amounts paid to a contractor must be capitalized if they are either: Amounts properly allocable to the cost of depreciable property, or Amounts paid only out of production or proceeds from production if these amounts are depletable income to the recipient. Free e-file state taxes only How to make the election. Free e-file state taxes only   You elect to deduct IDCs as a current business expense by taking the deduction on your income tax return for the first tax year you have eligible costs. Free e-file state taxes only No formal statement is required. Free e-file state taxes only If you file Schedule C (Form 1040), enter these costs under “Other expenses. Free e-file state taxes only ”   For oil and gas wells, your election is binding for the year it is made and for all later years. Free e-file state taxes only For geothermal wells, your election can be revoked by the filing of an amended return on which you do not take the deduction. Free e-file state taxes only You can file the amended return for the year up to the normal time of expiration for filing a claim for credit or refund, generally, within 3 years after the date you filed the original return or within 2 years after the date you paid the tax, whichever is later. Free e-file state taxes only Energy credit for costs of geothermal wells. Free e-file state taxes only   If you capitalize the drilling and development costs of geothermal wells that you place in service during the tax year, you may be able to claim a business energy credit. Free e-file state taxes only See the Instructions for Form 3468 for more information. Free e-file state taxes only Nonproductive well. Free e-file state taxes only   If you capitalize your IDCs, you have another option if the well is nonproductive. Free e-file state taxes only You can deduct the IDCs of the nonproductive well as an ordinary loss. Free e-file state taxes only You must indicate and clearly state your election on your tax return for the year the well is completed. Free e-file state taxes only Once made, the election for oil and gas wells is binding for all later years. Free e-file state taxes only You can revoke your election for a geothermal well by filing an amended return that does not claim the loss. Free e-file state taxes only Costs incurred outside the United States. Free e-file state taxes only   You cannot deduct as a current business expense all the IDCs paid or incurred for an oil, gas, or geothermal well located outside the United States. Free e-file state taxes only However, you can elect to include the costs in the adjusted basis of the well to figure depletion or depreciation. Free e-file state taxes only If you do not make this election, you can deduct the costs over the 10-year period beginning with the tax year in which you paid or incurred them. Free e-file state taxes only These rules do not apply to a nonproductive well. Free e-file state taxes only Exploration Costs The costs of determining the existence, location, extent, or quality of any mineral deposit are ordinarily capital expenditures if the costs lead to the development of a mine. Free e-file state taxes only You recover these costs through depletion as the mineral is removed from the ground. Free e-file state taxes only However, you can elect to deduct domestic exploration costs paid or incurred before the beginning of the development stage of the mine (except those for oil and gas wells). Free e-file state taxes only How to make the election. Free e-file state taxes only   You elect to deduct exploration costs by taking the deduction on your income tax return, or on an amended income tax return, for the first tax year for which you wish to deduct the costs paid or incurred during the tax year. Free e-file state taxes only Your return must adequately describe and identify each property or mine, and clearly state how much is being deducted for each one. Free e-file state taxes only The election applies to the tax year you make this election and all later tax years. Free e-file state taxes only Partnerships and S corporations. Free e-file state taxes only   Each partner, not the partnership, elects whether to capitalize or to deduct that partner's share of exploration costs. Free e-file state taxes only Each shareholder, not the S corporation, elects whether to capitalize or to deduct that shareholder's share of exploration costs. Free e-file state taxes only Reduced corporate deductions for exploration costs. Free e-file state taxes only   A corporation (other than an S corporation) can deduct only 70% of its domestic exploration costs. Free e-file state taxes only It must capitalize the remaining 30% of costs and amortize them over the 60-month period starting with the month the exploration costs are paid or incurred. Free e-file state taxes only A corporation may also elect to capitalize and amortize mining exploration costs over a 10-year period. Free e-file state taxes only For more information on this method of amortization, see Internal Revenue Code section 59(e). Free e-file state taxes only   The 30% the corporation capitalizes cannot be added to its basis in the property to figure cost depletion. Free e-file state taxes only However, the amount amortized is treated as additional depreciation and is subject to recapture as ordinary income on a disposition of the property. Free e-file state taxes only See Section 1250 Property under Depreciation Recapture in chapter 3 of Publication 544. Free e-file state taxes only   These rules also apply to the deduction of development costs by corporations. Free e-file state taxes only See Development Costs , later. Free e-file state taxes only Recapture of exploration expenses. Free e-file state taxes only   When your mine reaches the producing stage, you must recapture any exploration costs you elected to deduct. Free e-file state taxes only Use either of the following methods. Free e-file state taxes only Method 1—Include the deducted costs in gross income for the tax year the mine reaches the producing stage. Free e-file state taxes only Your election must be clearly indicated on the return. Free e-file state taxes only Increase your adjusted basis in the mine by the amount included in income. Free e-file state taxes only Generally, you must elect this recapture method by the due date (including extensions) of your return. Free e-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). Free e-file state taxes only Make the election on your amended return and write “Filed pursuant to section 301. Free e-file state taxes only 9100-2” on the form where you are including the income. Free e-file state taxes only File the amended return at the same address you filed the original return. Free e-file state taxes only Method 2—Do not claim any depletion deduction for the tax year the mine reaches the producing stage and any later tax years until the depletion you would have deducted equals the exploration costs you deducted. Free e-file state taxes only   You also must recapture deducted exploration costs if you receive a bonus or royalty from mine property before it reaches the producing stage. Free e-file state taxes only Do not claim any depletion deduction for the tax year you receive the bonus or royalty and any later tax years until the depletion you would have deducted equals the exploration costs you deducted. Free e-file state taxes only   Generally, if you dispose of the mine before you have fully recaptured the exploration costs you deducted, recapture the balance by treating all or part of your gain as ordinary income. Free e-file state taxes only Under these circumstances, you generally treat as ordinary income all of your gain if it is less than your adjusted exploration costs with respect to the mine. Free e-file state taxes only If your gain is more than your adjusted exploration costs, treat as ordinary income only a part of your gain, up to the amount of your adjusted exploration costs. Free e-file state taxes only Foreign exploration costs. Free e-file state taxes only   If you pay or incur exploration costs for a mine or other natural deposit located outside the United States, you cannot deduct all the costs in the current year. Free e-file state taxes only You can elect to include the costs (other than for an oil, gas, or geothermal well) in the adjusted basis of the mineral property to figure cost depletion. Free e-file state taxes only (Cost depletion is discussed in chapter 9 . Free e-file state taxes only ) If you do not make this election, you must deduct the costs over the 10-year period beginning with the tax year in which you pay or incur them. Free e-file state taxes only These rules also apply to foreign development costs. Free e-file state taxes only Development Costs You can deduct costs paid or incurred during the tax year for developing a mine or any other natural deposit (other than an oil or gas well) located in the United States. Free e-file state taxes only These costs must be paid or incurred after the discovery of ores or minerals in commercially marketable quantities. Free e-file state taxes only Development costs also include depreciation on improvements used in the development of ores or minerals and costs incurred for you by a contractor. Free e-file state taxes only Development costs do not include the costs for the acquisition or improvement of depreciable property. Free e-file state taxes only Instead of deducting development costs in the year paid or incurred, you can elect to treat the cost as deferred expenses and deduct them ratably as the units of produced ores or minerals benefited by the expenses are sold. Free e-file state taxes only This election applies each tax year to expenses paid or incurred in that year. Free e-file state taxes only Once made, the election is binding for the year and cannot be revoked for any reason. Free e-file state taxes only How to make the election. Free e-file state taxes only   The election to deduct development costs ratably as the ores or minerals are sold must be made for each mine or other natural deposit by a clear indication on your return or by a statement filed with the IRS office where you file your return. Free e-file state taxes only Generally, you must make the election by the due date of the return (including extensions). Free e-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). Free e-file state taxes only Clearly indicate the election on your amended return and write “Filed pursuant to section 301. Free e-file state taxes only 9100-2. Free e-file state taxes only ” File the amended return at the same address you filed the original return. Free e-file state taxes only Foreign development costs. Free e-file state taxes only   The rules discussed earlier for foreign exploration costs apply to foreign development costs. Free e-file state taxes only Reduced corporate deductions for development costs. Free e-file state taxes only   The rules discussed earlier for reduced corporate deductions for exploration costs also apply to corporate deductions for development costs. Free e-file state taxes only Circulation Costs A publisher can deduct as a current business expense the costs of establishing, maintaining, or increasing the circulation of a newspaper, magazine, or other periodical. Free e-file state taxes only For example, a publisher can deduct the cost of hiring extra employees for a limited time to get new subscriptions through telephone calls. Free e-file state taxes only Circulation costs are deductible even if they normally would be capitalized. Free e-file state taxes only This rule does not apply to the following costs that must be capitalized. Free e-file state taxes only The purchase of land or depreciable property. Free e-file state taxes only The acquisition of circulation through the purchase of any part of the business of another publisher of a newspaper, magazine, or other periodical, including the purchase of another publisher's list of subscribers. Free e-file state taxes only Other treatment of circulation costs. Free e-file state taxes only   If you do not want to deduct circulation costs as a current business expense, you can elect one of the following ways to recover these costs. Free e-file state taxes only Capitalize all circulation costs that are properly chargeable to a capital account (see chapter 1 ). Free e-file state taxes only Amortize circulation costs over the 3-year period beginning with the tax year they were paid or incurred. Free e-file state taxes only How to make the election. Free e-file state taxes only   You elect to capitalize circulation costs by attaching a statement to your return for the first tax year the election applies. Free e-file state taxes only Your election is binding for the year it is made and for all later years, unless you get IRS approval to revoke it. Free e-file state taxes only Business Start-Up and Organizational Costs Business start-up and organizational costs are generally capital expenditures. Free e-file state taxes only However, you can elect to deduct up to $5,000 of business start-up and $5,000 of organizational costs paid or incurred after October 22, 2004. Free e-file state taxes only The $5,000 deduction is reduced by the amount your total start-up or organizational costs exceed $50,000. Free e-file state taxes only Any remaining costs must be amortized. Free e-file state taxes only For information about amortizing start-up and organizational costs, see chapter 8 . Free e-file state taxes only Start-up costs include any amounts paid or incurred in connection with creating an active trade or business or investigating the creation or acquisition of an active trade or business. Free e-file state taxes only Organizational costs include the costs of creating a corporation. Free e-file state taxes only For more information on start-up and organizational costs, see chapter 8 . Free e-file state taxes only How to make the election. Free e-file state taxes only   You elect to deduct the start-up or organizational costs by claiming the deduction on your income tax return (filed by the due date including extensions) for the tax year in which the active trade or business begins. Free e-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). Free e-file state taxes only Clearly indicate the election on your amended return and write “Filed pursuant to section 301. Free e-file state taxes only 9100-2. Free e-file state taxes only ” File the amended return at the same address you filed the original return. Free e-file state taxes only The election applies when computing taxable income for the current tax year and all subsequent years. Free e-file state taxes only Reforestation Costs Reforestation costs are generally capital expenditures. Free e-file state taxes only However, you can elect to deduct up to $10,000 ($5,000 if married filing separately; $0 for a trust) of qualifying reforestation costs paid or incurred after October 22, 2004, for each qualified timber property. Free e-file state taxes only The remaining costs can be amortized over an 84-month period. Free e-file state taxes only For information about amortizing reforestation costs, see chapter 8 . Free e-file state taxes only Qualifying reforestation costs are the direct costs of planting or seeding for forestation or reforestation. Free e-file state taxes only Qualified timber property is property that contains trees in significant commercial quantities. Free e-file state taxes only See chapter 8 for more information on qualifying reforestation costs and qualified timber property. Free e-file state taxes only If you elect to deduct qualified reforestation costs, create and maintain separate timber accounts for each qualified timber property and include all reforestation costs and the dates each was applied. Free e-file state taxes only Do not include this qualified timber property in any account (for example, depletion block) for which depletion is allowed. Free e-file state taxes only How to make the election. Free e-file state taxes only   You elect to deduct qualifying reforestation costs by claiming the deduction on your timely filed income tax return (including extensions) for the tax year the expenses were paid or incurred. Free e-file state taxes only If Form T (Timber), Forest Activities Schedule, is required, complete Part IV of Form T. Free e-file state taxes only If Form T is not required, attach a statement containing the following information for each qualified timber property for which an election is being made. Free e-file state taxes only The unique stand identification numbers. Free e-file state taxes only The total number of acres reforested during the tax year. Free e-file state taxes only The nature of the reforestation treatments. Free e-file state taxes only The total amounts of qualified reforestation expenditures eligible to be amortized or deducted. Free e-file state taxes only   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). Free e-file state taxes only Clearly indicate the election on your amended return and write “Filed pursuant to section 301. Free e-file state taxes only 9100-2. Free e-file state taxes only ” File the amended return at the same address you filed the original return. Free e-file state taxes only The election applies when computing taxable income for the current tax year and all subsequent years. Free e-file state taxes only   For additional information on reforestation costs, see chapter 8 . Free e-file state taxes only Recapture. Free e-file state taxes only   This deduction may have to be recaptured as ordinary income under section 1245 when you sell or otherwise dispose of the property that would have received an addition to basis if you had not elected to deduct the expenditure. Free e-file state taxes only For more information on recapturing the deduction, see Depreciation Recapture in Publication 544. Free e-file state taxes only Retired Asset Removal Costs If you retire and remove a depreciable asset in connection with the installation or production of a replacement asset, you can deduct the costs of removing the retired asset. Free e-file state taxes only However, if you replace a component (part) of a depreciable asset, capitalize the removal costs if the replacement is an improvement and deduct the costs if the replacement is a repair. Free e-file state taxes only Barrier Removal Costs The cost of an improvement to a business asset is normally a capital expense. Free e-file state taxes only However, you can elect to deduct the costs of making a facility or public transportation vehicle more accessible to and usable by those who are disabled or elderly. Free e-file state taxes only You must own or lease the facility or vehicle for use in connection with your trade or business. Free e-file state taxes only A facility is all or any part of buildings, structures, equipment, roads, walks, parking lots, or similar real or personal property. Free e-file state taxes only A public transportation vehicle is a vehicle, such as a bus or railroad car, that provides transportation service to the public (including service for your customers, even if you are not in the business of providing transportation services). Free e-file state taxes only You cannot deduct any costs that you paid or incurred to completely renovate or build a facility or public transportation vehicle or to replace depreciable property in the normal course of business. Free e-file state taxes only Deduction limit. Free e-file state taxes only   The most you can deduct as a cost of removing barriers to the disabled and the elderly for any tax year is $15,000. Free e-file state taxes only However, you can add any costs over this limit to the basis of the property and depreciate these excess costs. Free e-file state taxes only Partners and partnerships. Free e-file state taxes only   The $15,000 limit applies to a partnership and also to each partner in the partnership. Free e-file state taxes only A partner can allocate the $15,000 limit in any manner among the partner's individually incurred costs and the partner's distributive share of partnership costs. Free e-file state taxes only If the partner cannot deduct the entire share of partnership costs, the partnership can add any costs not deducted to the basis of the improved property. Free e-file state taxes only   A partnership must be able to show that any amount added to basis was not deducted by the partner and that it was over a partner's $15,000 limit (as determined by the partner). Free e-file state taxes only If the partnership cannot show this, it is presumed that the partner was able to deduct the distributive share of the partnership's costs in full. Free e-file state taxes only Example. Free e-file state taxes only Emilio Azul's distributive share of ABC partnership's deductible expenses for the removal of architectural barriers was $14,000. Free e-file state taxes only Emilio had $12,000 of similar expenses in his sole proprietorship. Free e-file state taxes only He elected to deduct $7,000 of them. Free e-file state taxes only Emilio allocated the remaining $8,000 of the $15,000 limit to his share of ABC's expenses. Free e-file state taxes only Emilio can add the excess $5,000 of his own expenses to the basis of the property used in his business. Free e-file state taxes only Also, if ABC can show that Emilio could not deduct $6,000 ($14,000 – $8,000) of his share of the partnership's expenses because of how Emilio applied the limit, ABC can add $6,000 to the basis of its property. Free e-file state taxes only Qualification standards. Free e-file state taxes only   You can deduct your costs as a current expense only if the barrier removal meets the guidelines and requirements issued by the Architectural and Transportation Barriers Compliance Board under the Americans with Disabilities Act (ADA) of 1990. Free e-file state taxes only You can view the Americans with Disabilities Act at www. Free e-file state taxes only ada. Free e-file state taxes only gov/pubs/ada. Free e-file state taxes only htm. Free e-file state taxes only   The following is a list of some architectural barrier removal costs that can be deducted. Free e-file state taxes only Ground and floor surfaces. Free e-file state taxes only Walks. Free e-file state taxes only Parking lots. Free e-file state taxes only Ramps. Free e-file state taxes only Entrances. Free e-file state taxes only Doors and doorways. Free e-file state taxes only Stairs. Free e-file state taxes only Floors. Free e-file state taxes only Toilet rooms. Free e-file state taxes only Water fountains. Free e-file state taxes only Public telephones. Free e-file state taxes only Elevators. Free e-file state taxes only Controls. Free e-file state taxes only Signage. Free e-file state taxes only Alarms. Free e-file state taxes only Protruding objects. Free e-file state taxes only Symbols of accessibility. Free e-file state taxes only You can find the ADA guidelines and requirements for architectural barrier removal at www. Free e-file state taxes only usdoj. Free e-file state taxes only gov/crt/ada/reg3a. Free e-file state taxes only html. Free e-file state taxes only   The costs for removal of transportation barriers from rail facilities, buses, and rapid and light rail vehicles are deductible. Free e-file state taxes only You can find the guidelines and requirements for transportation barrier removal at www. Free e-file state taxes only fta. Free e-file state taxes only dot. Free e-file state taxes only gov. Free e-file state taxes only   Also, you can access the ADA website at www. Free e-file state taxes only ada. Free e-file state taxes only gov for additional information. Free e-file state taxes only Other barrier removals. Free e-file state taxes only   To be deductible, expenses of removing any barrier not covered by the above standards must meet all three of the following tests. Free e-file state taxes only The removed barrier must be a substantial barrier to access or use of a facility or public transportation vehicle by persons who have a disability or are elderly. Free e-file state taxes only The removed barrier must have been a barrier for at least one major group of persons who have a disability or are elderly (such as people who are blind, deaf, or wheelchair users). Free e-file state taxes only The barrier must be removed without creating any new barrier that significantly impairs access to or use of the facility or vehicle by a major group of persons who have a disability or are elderly. Free e-file state taxes only How to make the election. Free e-file state taxes only   If you elect to deduct your costs for removing barriers to the disabled or the elderly, claim the deduction on your income tax return (partnership return for partnerships) for the tax year the expenses were paid or incurred. Free e-file state taxes only Identify the deduction as a separate item. Free e-file state taxes only The election applies to all the qualifying costs you have during the year, up to the $15,000 limit. Free e-file state taxes only If you make this election, you must maintain adequate records to support your deduction. Free e-file state taxes only   For your election to be valid, you generally must file your return by its due date, including extensions. Free e-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). Free e-file state taxes only Clearly indicate the election on your amended return and write “Filed pursuant to section 301. Free e-file state taxes only 9100-2. Free e-file state taxes only ” File the amended return at the same address you filed the original return. Free e-file state taxes only Your election is irrevocable after the due date, including extensions, of your return. Free e-file state taxes only Disabled access credit. Free e-file state taxes only   If you make your business accessible to persons with disabilities and your business is an eligible small business, you may be able to claim the disabled access credit. Free e-file state taxes only If you choose to claim the credit, you must reduce the amount you deduct or capitalize by the amount of the credit. Free e-file state taxes only   For more information, see Form 8826, Disabled Access Credit. Free e-file state taxes only Film and Television Production Costs Film and television production costs are generally capital expenses. Free e-file state taxes only However, you can elect to deduct costs paid or incurred for certain productions commencing before January 1, 2014. Free e-file state taxes only For more information, see section 181 of the Internal Revenue Code and the related Treasury Regulations. Free e-file state taxes only Prev  Up  Next   Home   More Online Publications