Profit or Loss From Farming
This is archived information that pertains only to the 2006 Tax Year. If you
are looking for information for the current tax year, go to the Tax Prep Help Area.
Use Schedule F (Form 1040) to report farm income and expenses. File it with Form 1040, 1040NR, 1041, 1065, or 1065-B.
Your farming activity may subject you to state and local taxes and other requirements such as business licenses and fees.
Check with your state and
local governments for more information.
Additional information.
Pub. 225 has samples of filled-in forms and schedules, and lists important dates that apply to farmers.
Deduction for qualified clean-up costs.
You may be able to deduct
50% of amounts paid or incurred for removal of debris or demolition of structures located in the Gulf Opportunity (GO) Zone.
See
GO Zone clean-up costs on page F-6.
Increased expense limit for qualified timber property.
For qualified timber property you own in the GO Zone, the Rita GO Zone, or the Wilma GO Zone, the limit on expensing
reforestation expenditures is
increased by up to
$10,000. See
Forestation and reforestation costs on page F-6.
Increased section 179 limits for GO Zone property.
You may be able to take an increased section 179 deduction for qualified GO Zone property you placed in service in
2006. For information, see
Pub. 225.
Additional depreciation allowed for qualified property.
If, during
2006, you placed in service qualified property in the GO Zone, you may be able to claim additional depreciation deductions.
See
Pub. 225 for more information.
Employee retention credit has expired.
This credit was available for qualified wages paid before
January 1, 2006.
Clean-fuel vehicle and refueling property deductions have expired.
These deductions were available for property placed in service before January 1, 2006.
Indian employment credit has expired.
This credit was available for qualified wages paid before January 1, 2006.
At the time these instructions went to print, Congress was considering legislation that would extend the Indian employment
credit that expired at
the end of 2005. To find out if this legislation was enacted, and for more details, go to
www.irs.gov, click on More Forms and Publications, and then on
What's Hot in forms and publications, or see Pub. 553.
