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2013 Ohio State Tax Form

2013 Ohio State Tax Form2013 Ohio State Tax Form2013 Ohio State Tax Form2013 Ohio State Tax Form2013 Ohio State Tax Form2013 Ohio State Tax Form2013 Ohio State Tax Form2013 Ohio State Tax Form2013 Ohio State Tax Form2013 Ohio State Tax Form2013 Ohio State Tax Form2013 Ohio State Tax Form2013 Ohio State Tax Form2013 Ohio State Tax Form2013 Ohio State Tax Form2013 Ohio State Tax Form2013 Ohio State Tax Form2013 Ohio State Tax Form2013 Ohio State Tax Form2013 Ohio State Tax Form2013 Ohio State Tax Form2013 Ohio State Tax Form2013 Ohio State Tax Form2013 Ohio State Tax Form2013 Ohio State Tax Form2013 Ohio State Tax Form2013 Ohio State Tax Form2013 Ohio State Tax Form2013 Ohio State Tax Form2013 Ohio State Tax Form2013 Ohio State Tax Form2013 Ohio State Tax Form2013 Ohio State Tax Form2013 Ohio State Tax Form2013 Ohio State Tax Form2013 Ohio State Tax Form2013 Ohio State Tax Form2013 Ohio State Tax Form2013 Ohio State Tax Form2013 Ohio State Tax Form

2013 Ohio State Tax Form

2013 ohio state tax form 11. 2013 ohio state tax form   Casualties, Thefts, and Condemnations Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: Casualties and TheftsDeductible losses. 2013 ohio state tax form Nondeductible losses. 2013 ohio state tax form Family pet. 2013 ohio state tax form Progressive deterioration. 2013 ohio state tax form Decline in market value of stock. 2013 ohio state tax form Mislaid or lost property. 2013 ohio state tax form Farming Losses How To Figure a Loss Deduction Limits on Losses of Personal-Use Property When Loss Is Deductible Proof of Loss Figuring a Gain Other Involuntary ConversionsCondemnation Irrigation Project Livestock Losses Tree Seedlings Postponing GainException. 2013 ohio state tax form Related persons. 2013 ohio state tax form Replacement Property Replacement Period How To Postpone Gain Disaster Area LossesWho is eligible. 2013 ohio state tax form Covered disaster area. 2013 ohio state tax form Reporting Gains and Losses Introduction This chapter explains the tax treatment of casualties, thefts, and condemnations. 2013 ohio state tax form A casualty occurs when property is damaged, destroyed, or lost due to a sudden, unexpected, or unusual event. 2013 ohio state tax form A theft occurs when property is stolen. 2013 ohio state tax form A condemnation occurs when private property is legally taken for public use without the owner's consent. 2013 ohio state tax form A casualty, theft, or condemnation may result in a deductible loss or taxable gain on your federal income tax return. 2013 ohio state tax form You may have a deductible loss or a taxable gain even if only a portion of your property was affected by a casualty, theft, or condemnation. 2013 ohio state tax form An involuntary conversion occurs when you receive money or other property as reimbursement for a casualty, theft, condemnation, disposition of property under threat of condemnation, or certain other events discussed in this chapter. 2013 ohio state tax form If an involuntary conversion results in a gain and you buy qualified replacement property within the specified replacement period, you can postpone reporting the gain on your income tax return. 2013 ohio state tax form For more information, see Postponing Gain , later. 2013 ohio state tax form Topics - This chapter discusses: Casualties and thefts How to figure a loss or gain Other involuntary conversions Postponing gain Disaster area losses Reporting gains and losses Drought involving property connected with a trade or business or a transaction entered into for profit Useful Items - You may want to see: Publication 523 Selling Your Home 525 Taxable and Nontaxable Income 536 Net Operating Losses (NOLs) for Individuals, Estates, and Trusts 544 Sales and Other Dispositions of Assets 547 Casualties, Disasters, and Thefts 584 Casualty, Disaster, and Theft Loss Workbook (Personal-Use Property) 584-B Business Casualty, Disaster, and Theft Loss Workbook Form (and Instructions) Sch A (Form 1040) Itemized Deductions Sch D (Form 1040) Capital Gains and Losses Sch F (Form 1040) Profit or Loss From Farming 4684 Casualties and Thefts 4797 Sales of Business Property See chapter 16 for information about getting publications and forms. 2013 ohio state tax form Casualties and Thefts If your property is destroyed, damaged, or stolen, you may have a deductible loss. 2013 ohio state tax form If the insurance or other reimbursement is more than the adjusted basis of the destroyed, damaged, or stolen property, you may have a taxable gain. 2013 ohio state tax form Casualty. 2013 ohio state tax form   A casualty is the damage, destruction, or loss of property resulting from an identifiable event that is sudden, unexpected, or unusual. 2013 ohio state tax form A sudden event is one that is swift, not gradual or progressive. 2013 ohio state tax form An unexpected event is one that is ordinarily unanticipated and unintended. 2013 ohio state tax form An unusual event is one that is not a day-to-day occurrence and that is not typical of the activity in which you were engaged. 2013 ohio state tax form Deductible losses. 2013 ohio state tax form   Deductible casualty losses can result from a number of different causes, including the following. 2013 ohio state tax form Airplane crashes. 2013 ohio state tax form Car, truck, or farm equipment accidents not resulting from your willful act or willful negligence. 2013 ohio state tax form Earthquakes. 2013 ohio state tax form Fires (but see Nondeductible losses next for exceptions). 2013 ohio state tax form Floods. 2013 ohio state tax form Freezing. 2013 ohio state tax form Government-ordered demolition or relocation of a home that is unsafe to use because of a disaster as discussed under Disaster Area Losses, in Publication 547. 2013 ohio state tax form Lightning. 2013 ohio state tax form Storms, including hurricanes and tornadoes. 2013 ohio state tax form Terrorist attacks. 2013 ohio state tax form Vandalism. 2013 ohio state tax form Volcanic eruptions. 2013 ohio state tax form Nondeductible losses. 2013 ohio state tax form   A casualty loss is not deductible if the damage or destruction is caused by the following. 2013 ohio state tax form Accidentally breaking articles such as glassware or china under normal conditions. 2013 ohio state tax form A family pet (explained below). 2013 ohio state tax form A fire if you willfully set it, or pay someone else to set it. 2013 ohio state tax form A car, truck, or farm equipment accident if your willful negligence or willful act caused it. 2013 ohio state tax form The same is true if the willful act or willful negligence of someone acting for you caused the accident. 2013 ohio state tax form Progressive deterioration (explained below). 2013 ohio state tax form Family pet. 2013 ohio state tax form   Loss of property due to damage by a family pet is not deductible as a casualty loss unless the requirements discussed above under Casualty are met. 2013 ohio state tax form Example. 2013 ohio state tax form You keep your horse in your yard. 2013 ohio state tax form The ornamental fruit trees in your yard were damaged when your horse stripped the bark from them. 2013 ohio state tax form Some of the trees were completely girdled and died. 2013 ohio state tax form Because the damage was not unexpected or unusual, the loss is not deductible. 2013 ohio state tax form Progressive deterioration. 2013 ohio state tax form   Loss of property due to progressive deterioration is not deductible as a casualty loss. 2013 ohio state tax form This is because the damage results from a steadily operating cause or a normal process, rather than from a sudden event. 2013 ohio state tax form Examples of damage due to progressive deterioration include damage from rust, corrosion, or termites. 2013 ohio state tax form However, weather-related conditions or disease may cause another type of involuntary conversion. 2013 ohio state tax form See Other Involuntary Conversions , later. 2013 ohio state tax form Theft. 2013 ohio state tax form   A theft is the taking and removing of money or property with the intent to deprive the owner of it. 2013 ohio state tax form The taking of property must be illegal under the law of the state where it occurred and it must have been done with criminal intent. 2013 ohio state tax form You do not need to show a conviction for theft. 2013 ohio state tax form   Theft includes the taking of money or property by the following means: Blackmail, Burglary, Embezzlement, Extortion, Kidnapping for ransom, Larceny, Robbery, or Threats. 2013 ohio state tax form The taking of money or property through fraud or misrepresentation is theft if it is illegal under state or local law. 2013 ohio state tax form Decline in market value of stock. 2013 ohio state tax form   You cannot deduct as a theft loss the decline in market value of stock acquired on the open market for investment if the decline is caused by disclosure of accounting fraud or other illegal misconduct by the officers or directors of the corporation that issued the stock. 2013 ohio state tax form However, you can deduct as a capital loss the loss you sustain when you sell or exchange the stock or the stock becomes completely worthless. 2013 ohio state tax form You report a capital loss on Schedule D (Form 1040). 2013 ohio state tax form For more information about stock sales, worthless stock, and capital losses, see chapter 4 of Publication 550. 2013 ohio state tax form Mislaid or lost property. 2013 ohio state tax form   The simple disappearance of money or property is not a theft. 2013 ohio state tax form However, an accidental loss or disappearance of property can qualify as a casualty if it results from an identifiable event that is sudden, unexpected, or unusual. 2013 ohio state tax form Example. 2013 ohio state tax form A car door is accidentally slammed on your hand, breaking the setting of your diamond ring. 2013 ohio state tax form The diamond falls from the ring and is never found. 2013 ohio state tax form The loss of the diamond is a casualty. 2013 ohio state tax form Farming Losses You can deduct certain casualty or theft losses that occur in the business of farming. 2013 ohio state tax form The following is a discussion of some losses you can deduct and some you cannot deduct. 2013 ohio state tax form Livestock or produce bought for resale. 2013 ohio state tax form   Casualty or theft losses of livestock or produce bought for resale are deductible if you report your income on the cash method. 2013 ohio state tax form If you report your income on an accrual method, take casualty and theft losses on property bought for resale by omitting the item from the closing inventory for the year of the loss. 2013 ohio state tax form You cannot take a separate deduction. 2013 ohio state tax form Livestock, plants, produce, and crops raised for sale. 2013 ohio state tax form   Losses of livestock, plants, produce, and crops raised for sale are generally not deductible if you report your income on the cash method. 2013 ohio state tax form You have already deducted the cost of raising these items as farm expenses, so their basis is equal to zero. 2013 ohio state tax form   For plants with a preproductive period of more than 2 years, you may have a deductible loss if you have a tax basis in the plants. 2013 ohio state tax form You usually have a tax basis if you capitalized the expenses associated with these plants under the uniform capitalization rules. 2013 ohio state tax form The uniform capitalization rules are discussed in chapter 6. 2013 ohio state tax form   If you report your income on an accrual method, casualty or theft losses are deductible only if you included the items in your inventory at the beginning of your tax year. 2013 ohio state tax form You get the deduction by omitting the item from your inventory at the close of your tax year. 2013 ohio state tax form You cannot take a separate casualty or theft deduction. 2013 ohio state tax form Income loss. 2013 ohio state tax form   A loss of future income is not deductible. 2013 ohio state tax form Example. 2013 ohio state tax form A severe flood destroyed your crops. 2013 ohio state tax form Because you are a cash method taxpayer and already deducted the cost of raising the crops as farm expenses, this loss is not deductible, as explained above under Livestock, plants, produce, and crops raised for sale . 2013 ohio state tax form You estimate that the crop loss will reduce your farm income by $25,000. 2013 ohio state tax form This loss of future income is also not deductible. 2013 ohio state tax form Loss of timber. 2013 ohio state tax form   If you sell timber downed as a result of a casualty, treat the proceeds from the sale as a reimbursement. 2013 ohio state tax form If you use the proceeds to buy qualified replacement property, you can postpone reporting the gain. 2013 ohio state tax form See Postponing Gain , later. 2013 ohio state tax form Property used in farming. 2013 ohio state tax form   Casualty and theft losses of property used in your farm business usually result in deductible losses. 2013 ohio state tax form If a fire or storm destroyed your barn, or you lose by casualty or theft an animal you bought for draft, breeding, dairy, or sport, you may have a deductible loss. 2013 ohio state tax form See How To Figure a Loss , later. 2013 ohio state tax form Raised draft, breeding, dairy, or sporting animals. 2013 ohio state tax form   Generally, losses of raised draft, breeding, dairy, or sporting animals do not result in deductible casualty or theft losses because you have no basis in the animals. 2013 ohio state tax form However, you may have a basis in the animal and therefore may be able to claim a deduction if either of the following situations applies to you. 2013 ohio state tax form You use inventories to determine your income and you included the animals in your inventory. 2013 ohio state tax form You capitalized the expenses associated with the animals under the uniform capitalization rules and therefore have a tax basis in the animals subject to a casualty or theft. 2013 ohio state tax form When you include livestock in inventory, its last inventory value is its basis. 2013 ohio state tax form When you lose an inventoried animal held for draft, breeding, dairy, or sport by casualty or theft during the year, decrease ending inventory by the amount you included in inventory for the animal. 2013 ohio state tax form You cannot take a separate deduction. 2013 ohio state tax form How To Figure a Loss How you figure a deductible casualty or theft loss depends on whether the loss was to farm or personal-use property and whether the property was stolen or partly or completely destroyed. 2013 ohio state tax form Farm property. 2013 ohio state tax form   Farm property is the property you use in your farming business. 2013 ohio state tax form If your farm property was completely destroyed or stolen, your loss is figured as follows:      Your adjusted basis in the property     MINUS     Any salvage value     MINUS     Any insurance or other reimbursement you  receive or expect to receive      You can use the schedules in Publication 584-B to list your stolen, damaged, or destroyed business property and to figure your loss. 2013 ohio state tax form   If your farm property was partially damaged, use the steps shown under Personal-use property next to figure your casualty loss. 2013 ohio state tax form However, the deduction limits, discussed later, do not apply to farm property. 2013 ohio state tax form Personal-use property. 2013 ohio state tax form   Personal-use property is property used by you or your family members for personal purposes and not used in your farm business or for income-producing purposes. 2013 ohio state tax form The following items are examples of personal-use property: Your main home. 2013 ohio state tax form Furniture and electronics used in your main home and not used in a home office or for business purposes. 2013 ohio state tax form Clothing and jewelry. 2013 ohio state tax form An automobile used for nonbusiness purposes. 2013 ohio state tax form You figure the casualty or theft loss on this property by taking the following steps. 2013 ohio state tax form Determine your adjusted basis in the property before the casualty or theft. 2013 ohio state tax form Determine the decrease in fair market value of the property as a result of the casualty or theft. 2013 ohio state tax form From the smaller of the amounts you determined in (1) and (2), subtract any insurance or other reimbursement you receive or expect to receive. 2013 ohio state tax form You must apply the deduction limits, discussed later, to determine your deductible loss. 2013 ohio state tax form    You can use Publication 584 to list your stolen or damaged personal-use property and figure your loss. 2013 ohio state tax form It includes schedules to help you figure the loss on your home, its contents, and your motor vehicles. 2013 ohio state tax form Adjusted basis. 2013 ohio state tax form   Adjusted basis is your basis (usually cost) increased or decreased by various events, such as improvements and casualty losses. 2013 ohio state tax form For more information about adjusted basis, see chapter 6. 2013 ohio state tax form Decrease in fair market value (FMV). 2013 ohio state tax form   The decrease in FMV is the difference between the property's value immediately before the casualty or theft and its value immediately afterward. 2013 ohio state tax form FMV is defined in chapter 10 under Payments Received or Considered Received . 2013 ohio state tax form Appraisal. 2013 ohio state tax form   To figure the decrease in FMV because of a casualty or theft, you generally need a competent appraisal. 2013 ohio state tax form But other measures, such as the cost of cleaning up or making repairs (discussed next) can be used to establish decreases in FMV. 2013 ohio state tax form   An appraisal to determine the difference between the FMV of the property immediately before a casualty or theft and immediately afterward should be made by a competent appraiser. 2013 ohio state tax form The appraiser must recognize the effects of any general market decline that may occur along with the casualty. 2013 ohio state tax form This information is needed to limit any deduction to the actual loss resulting from damage to the property. 2013 ohio state tax form Cost of cleaning up or making repairs. 2013 ohio state tax form   The cost of cleaning up after a casualty is not part of a casualty loss. 2013 ohio state tax form Neither is the cost of repairing damaged property after a casualty. 2013 ohio state tax form But you can use the cost of cleaning up or making repairs after a casualty as a measure of the decrease in FMV if you meet all the following conditions. 2013 ohio state tax form The repairs are actually made. 2013 ohio state tax form The repairs are necessary to bring the property back to its condition before the casualty. 2013 ohio state tax form The amount spent for repairs is not excessive. 2013 ohio state tax form The repairs fix the damage only. 2013 ohio state tax form The value of the property after the repairs is not, due to the repairs, more than the value of the property before the casualty. 2013 ohio state tax form Related expenses. 2013 ohio state tax form   The incidental expenses due to a casualty or theft, such as expenses for the treatment of personal injuries, temporary housing, or a rental car, are not part of your casualty or theft loss. 2013 ohio state tax form However, they may be deductible as farm business expenses if the damaged or stolen property is farm property. 2013 ohio state tax form Separate computations for more than one item of property. 2013 ohio state tax form   Generally, if a single casualty or theft involves more than one item of property, you must figure your loss separately for each item of property. 2013 ohio state tax form Then combine the losses to determine your total loss. 2013 ohio state tax form    There is an exception to this rule for personal-use real property. 2013 ohio state tax form See Exception for personal-use real property, later. 2013 ohio state tax form Example. 2013 ohio state tax form A fire on your farm damaged a tractor and the barn in which it was stored. 2013 ohio state tax form The tractor had an adjusted basis of $3,300. 2013 ohio state tax form Its FMV was $28,000 just before the fire and $10,000 immediately afterward. 2013 ohio state tax form The barn had an adjusted basis of $28,000. 2013 ohio state tax form Its FMV was $55,000 just before the fire and $25,000 immediately afterward. 2013 ohio state tax form You received insurance reimbursements of $2,100 on the tractor and $26,000 on the barn. 2013 ohio state tax form Figure your deductible casualty loss separately for the two items of property. 2013 ohio state tax form     Tractor Barn 1) Adjusted basis $3,300 $28,000 2) FMV before fire $28,000 $55,000 3) FMV after fire 10,000 25,000 4) Decrease in FMV  (line 2 − line 3) $18,000 $30,000 5) Loss (lesser of line 1 or line 4) $3,300 $28,000 6) Minus: Insurance 2,100 26,000 7) Deductible casualty loss $1,200 $2,000 8) Total deductible casualty loss $3,200 Exception for personal-use real property. 2013 ohio state tax form   In figuring a casualty loss on personal-use real property, the entire property (including any improvements, such as buildings, trees, and shrubs) is treated as one item. 2013 ohio state tax form Figure the loss using the smaller of the following. 2013 ohio state tax form The decrease in FMV of the entire property. 2013 ohio state tax form The adjusted basis of the entire property. 2013 ohio state tax form Example. 2013 ohio state tax form You bought a farm in 1990 for $160,000. 2013 ohio state tax form The adjusted basis of the residential part is now $128,000. 2013 ohio state tax form In 2013, a windstorm blew down shade trees and three ornamental trees planted at a cost of $7,500 on the residential part. 2013 ohio state tax form The adjusted basis of the residential part includes the $7,500. 2013 ohio state tax form The fair market value (FMV) of the residential part immediately before the storm was $400,000, and $385,000 immediately after the storm. 2013 ohio state tax form The trees were not covered by insurance. 2013 ohio state tax form 1) Adjusted basis $128,000 2) FMV before the storm $400,000 3) FMV after the storm 385,000 4) Decrease in FMV (line 2 − line 3) $15,000 5) Loss before insurance (lesser of line 1 or line 4) $15,000 6) Minus: Insurance -0- 7) Amount of loss $15,000 Insurance and other reimbursements. 2013 ohio state tax form   If you receive an insurance or other type of reimbursement, you must subtract the reimbursement when you figure your loss. 2013 ohio state tax form You do not have a casualty or theft loss to the extent you are reimbursed. 2013 ohio state tax form   If you expect to be reimbursed for part or all of your loss, you must subtract the expected reimbursement when you figure your loss. 2013 ohio state tax form You must reduce your loss even if you do not receive payment until a later tax year. 2013 ohio state tax form    Do not subtract from your loss any insurance payments you receive for living expenses if you lose the use of your main home or are denied access to it because of a casualty. 2013 ohio state tax form You may have to include a portion of these payments in your income. 2013 ohio state tax form See Insurance payments for living expenses in Publication 547 for details. 2013 ohio state tax form Disaster relief. 2013 ohio state tax form   Food, medical supplies, and other forms of assistance you receive do not reduce your casualty loss, unless they are replacements for lost or destroyed property. 2013 ohio state tax form Excludable cash gifts you receive also do not reduce your casualty loss if there are no limits on how you can use the money. 2013 ohio state tax form   Generally, disaster relief grants received under the Robert T. 2013 ohio state tax form Stafford Disaster Relief and Emergency Assistance Act are not included in your income. 2013 ohio state tax form See Federal disaster relief grants , later, under Disaster Area Losses . 2013 ohio state tax form   Qualified disaster relief payments for expenses you incurred as a result of a federally declared disaster are not taxable income to you. 2013 ohio state tax form See Qualified disaster relief payments , later, under Disaster Area Losses . 2013 ohio state tax form Reimbursement received after deducting loss. 2013 ohio state tax form   If you figure your casualty or theft loss using your expected reimbursement, you may have to adjust your tax return for the tax year in which you get your actual reimbursement. 2013 ohio state tax form Actual reimbursement less than expected. 2013 ohio state tax form   If you later receive less reimbursement than you expected, include that difference as a loss with your other losses (if any) on your return for the year in which you can reasonably expect no more reimbursement. 2013 ohio state tax form Actual reimbursement more than expected. 2013 ohio state tax form   If you later receive more reimbursement than you expected after you have claimed a deduction for the loss, you may have to include the extra reimbursement in your income for the year you receive it. 2013 ohio state tax form However, if any part of your original deduction did not reduce your tax for the earlier year, do not include that part of the reimbursement in your income. 2013 ohio state tax form Do not refigure your tax for the year you claimed the deduction. 2013 ohio state tax form See Recoveries in Publication 525 to find out how much extra reimbursement to include in income. 2013 ohio state tax form If the total of all the reimbursements you receive is more than your adjusted basis in the destroyed or stolen property, you will have a gain on the casualty or theft. 2013 ohio state tax form See Figuring a Gain in Publication 547 for information on how to treat a gain from the reimbursement you receive because of a casualty or theft. 2013 ohio state tax form Actual reimbursement same as expected. 2013 ohio state tax form   If you receive exactly the reimbursement you expected to receive, you do not have to include any of the reimbursement in your income and you cannot deduct any additional loss. 2013 ohio state tax form Lump-sum reimbursement. 2013 ohio state tax form   If you have a casualty or theft loss of several assets at the same time without an allocation of reimbursement to specific assets, divide the lump-sum reimbursement among the assets according to the fair market value of each asset at the time of the loss. 2013 ohio state tax form Figure the gain or loss separately for each asset that has a separate basis. 2013 ohio state tax form Adjustments to basis. 2013 ohio state tax form   If you have a casualty or theft loss, you must decrease your basis in the property by any insurance or other reimbursement you receive and by any deductible loss. 2013 ohio state tax form The result is your adjusted basis in the property. 2013 ohio state tax form Amounts you spend on repairs to restore your property to its pre-casualty condition increase your adjusted basis. 2013 ohio state tax form See Adjusted Basis in chapter 6 for more information. 2013 ohio state tax form Example. 2013 ohio state tax form You built a new silo for $25,000. 2013 ohio state tax form This is the basis in your silo because that is the total cost you incurred to build it. 2013 ohio state tax form During the year, a tornado damaged your silo and your allowable casualty loss deduction was $1,000. 2013 ohio state tax form In addition, your insurance company reimbursed you $4,000 for the damage and you spent $6,000 to restore the silo to its pre-casualty condition. 2013 ohio state tax form Your adjusted basis in the silo after the casualty is $26,000 ($25,000 - $1,000 - $4,000 + $6,000). 2013 ohio state tax form Deduction Limits on Losses of Personal-Use Property Casualty and theft losses of property held for personal use may be deductible if you itemize deductions on Schedule A (Form 1040). 2013 ohio state tax form There are two limits on the deduction for casualty or theft loss of personal-use property. 2013 ohio state tax form You figure these limits on Form 4684. 2013 ohio state tax form $100 rule. 2013 ohio state tax form   You must reduce each casualty or theft loss on personal-use property by $100. 2013 ohio state tax form This rule applies after you have subtracted any reimbursement. 2013 ohio state tax form 10% rule. 2013 ohio state tax form   You must further reduce the total of all your casualty or theft losses on personal-use property by 10% of your adjusted gross income. 2013 ohio state tax form Apply this rule after you reduce each loss by $100. 2013 ohio state tax form Adjusted gross income is on line 38 of Form 1040. 2013 ohio state tax form Example. 2013 ohio state tax form In June, you discovered that your house had been burglarized. 2013 ohio state tax form Your loss after insurance reimbursement was $2,000. 2013 ohio state tax form Your adjusted gross income for the year you discovered the burglary is $57,000. 2013 ohio state tax form Figure your theft loss deduction as follows: 1. 2013 ohio state tax form Loss after insurance $2,000 2. 2013 ohio state tax form Subtract $100 100 3. 2013 ohio state tax form Loss after $100 rule $1,900 4. 2013 ohio state tax form Subtract 10% (. 2013 ohio state tax form 10) × $57,000 AGI $5,700 5. 2013 ohio state tax form Theft loss deduction -0- You do not have a theft loss deduction because your loss ($1,900) is less than 10% of your adjusted gross income ($5,700). 2013 ohio state tax form    If you have a casualty or theft gain in addition to a loss, you will have to make a special computation before you figure your 10% limit. 2013 ohio state tax form See 10% Rule in Publication 547. 2013 ohio state tax form When Loss Is Deductible Generally, you can deduct casualty losses that are not reimbursable only in the tax year in which they occur. 2013 ohio state tax form You generally can deduct theft losses that are not reimbursable only in the year you discover your property was stolen. 2013 ohio state tax form However, losses in federally declared disaster areas are subject to different rules. 2013 ohio state tax form See Disaster Area Losses , later, for an exception. 2013 ohio state tax form If you are not sure whether part of your casualty or theft loss will be reimbursed, do not deduct that part until the tax year when you become reasonably certain that it will not be reimbursed. 2013 ohio state tax form Leased property. 2013 ohio state tax form   If you lease property from someone else, you can deduct a loss on the property in the year your liability for the loss is fixed. 2013 ohio state tax form This is true even if the loss occurred or the liability was paid in a different year. 2013 ohio state tax form You are not entitled to a deduction until your liability under the lease can be determined with reasonable accuracy. 2013 ohio state tax form Your liability can be determined when a claim for recovery is settled, adjudicated, or abandoned. 2013 ohio state tax form Example. 2013 ohio state tax form Robert leased a tractor from First Implement, Inc. 2013 ohio state tax form , for use in his farm business. 2013 ohio state tax form The tractor was destroyed by a tornado in June 2012. 2013 ohio state tax form The loss was not insured. 2013 ohio state tax form First Implement billed Robert for the fair market value of the tractor on the date of the loss. 2013 ohio state tax form Robert disagreed with the bill and refused to pay it. 2013 ohio state tax form First Implement later filed suit in court against Robert. 2013 ohio state tax form In 2013, Robert and First Implement agreed to settle the suit for $20,000, and the court entered a judgment in favor of First Implement. 2013 ohio state tax form Robert paid $20,000 in June 2013. 2013 ohio state tax form He can claim the $20,000 as a loss on his 2013 tax return. 2013 ohio state tax form Net operating loss (NOL). 2013 ohio state tax form   If your deductions, including casualty or theft loss deductions, are more than your income for the year, you may have an NOL. 2013 ohio state tax form An NOL can be carried back or carried forward and deducted from income in other years. 2013 ohio state tax form See Publication 536 for more information on NOLs. 2013 ohio state tax form Proof of Loss To deduct a casualty or theft loss, you must be able to prove that there was a casualty or theft. 2013 ohio state tax form You must have records to support the amount you claim for the loss. 2013 ohio state tax form Casualty loss proof. 2013 ohio state tax form   For a casualty loss, your records should show all the following information. 2013 ohio state tax form The type of casualty (car accident, fire, storm, etc. 2013 ohio state tax form ) and when it occurred. 2013 ohio state tax form That the loss was a direct result of the casualty. 2013 ohio state tax form That you were the owner of the property or, if you leased the property from someone else, that you were contractually liable to the owner for the damage. 2013 ohio state tax form Whether a claim for reimbursement exists for which there is a reasonable expectation of recovery. 2013 ohio state tax form Theft loss proof. 2013 ohio state tax form   For a theft loss, your records should show all the following information. 2013 ohio state tax form When you discovered your property was missing. 2013 ohio state tax form That your property was stolen. 2013 ohio state tax form That you were the owner of the property. 2013 ohio state tax form Whether a claim for reimbursement exists for which there is a reasonable expectation of recovery. 2013 ohio state tax form Figuring a Gain A casualty or theft may result in a taxable gain. 2013 ohio state tax form If you receive an insurance payment or other reimbursement that is more than your adjusted basis in the destroyed, damaged, or stolen property, you have a gain from the casualty or theft. 2013 ohio state tax form You generally report your gain as income in the year you receive the reimbursement. 2013 ohio state tax form However, depending on the type of property you receive, you may not have to report your gain. 2013 ohio state tax form See Postponing Gain , later. 2013 ohio state tax form Your gain is figured as follows: The amount you receive, minus Your adjusted basis in the property at the time of the casualty or theft. 2013 ohio state tax form Even if the decrease in FMV of your property is smaller than the adjusted basis of your property, use your adjusted basis to figure the gain. 2013 ohio state tax form Amount you receive. 2013 ohio state tax form   The amount you receive includes any money plus the value of any property you receive, minus any expenses you have in obtaining reimbursement. 2013 ohio state tax form It also includes any reimbursement used to pay off a mortgage or other lien on the damaged, destroyed, or stolen property. 2013 ohio state tax form Example. 2013 ohio state tax form A tornado severely damaged your barn. 2013 ohio state tax form The adjusted basis of the barn was $25,000. 2013 ohio state tax form Your insurance company reimbursed you $40,000 for the damaged barn. 2013 ohio state tax form However, you had legal expenses of $2,000 to collect that insurance. 2013 ohio state tax form Your insurance minus your expenses to collect the insurance is more than your adjusted basis in the barn, so you have a gain. 2013 ohio state tax form 1) Insurance reimbursement $40,000 2) Legal expenses 2,000 3) Amount received  (line 1 − line 2) $38,000 4) Adjusted basis 25,000 5) Gain on casualty (line 3 − line 4) $13,000 Other Involuntary Conversions In addition to casualties and thefts, other events cause involuntary conversions of property. 2013 ohio state tax form Some of these are discussed in the following paragraphs. 2013 ohio state tax form Gain or loss from an involuntary conversion of your property is usually recognized for tax purposes. 2013 ohio state tax form You report the gain or deduct the loss on your tax return for the year you realize it. 2013 ohio state tax form However, depending on the type of property you receive, you may not have to report your gain on the involuntary conversion. 2013 ohio state tax form See Postponing Gain , later. 2013 ohio state tax form Condemnation Condemnation is the process by which private property is legally taken for public use without the owner's consent. 2013 ohio state tax form The property may be taken by the federal government, a state government, a political subdivision, or a private organization that has the power to legally take property. 2013 ohio state tax form The owner receives a condemnation award (money or property) in exchange for the property taken. 2013 ohio state tax form A condemnation is a forced sale, the owner being the seller and the condemning authority being the buyer. 2013 ohio state tax form Threat of condemnation. 2013 ohio state tax form   Treat the sale of your property under threat of condemnation as a condemnation, provided you have reasonable grounds to believe that your property will be condemned. 2013 ohio state tax form Main home condemned. 2013 ohio state tax form   If you have a gain because your main home is condemned, you generally can exclude the gain from your income as if you had sold or exchanged your home. 2013 ohio state tax form For information on this exclusion, see Publication 523. 2013 ohio state tax form If your gain is more than the amount you can exclude, but you buy replacement property, you may be able to postpone reporting the excess gain. 2013 ohio state tax form See Postponing Gain , later. 2013 ohio state tax form (You cannot deduct a loss from the condemnation of your main home. 2013 ohio state tax form ) More information. 2013 ohio state tax form   For information on how to figure the gain or loss on condemned property, see chapter 1 in Publication 544. 2013 ohio state tax form Also see Postponing Gain , later, to find out if you can postpone reporting the gain. 2013 ohio state tax form Irrigation Project The sale or other disposition of property located within an irrigation project to conform to the acreage limits of federal reclamation laws is an involuntary conversion. 2013 ohio state tax form Livestock Losses Diseased livestock. 2013 ohio state tax form   If your livestock die from disease, or are destroyed, sold, or exchanged because of disease, even though the disease is not of epidemic proportions, treat these occurrences as involuntary conversions. 2013 ohio state tax form If the livestock were raised or purchased for resale, follow the rules for livestock discussed earlier under Farming Losses . 2013 ohio state tax form Otherwise, figure the gain or loss from these conversions using the rules discussed under Determining Gain or Loss in chapter 8. 2013 ohio state tax form If you replace the livestock, you may be able to postpone reporting the gain. 2013 ohio state tax form See Postponing Gain below. 2013 ohio state tax form Reporting dispositions of diseased livestock. 2013 ohio state tax form   If you choose to postpone reporting gain on the disposition of diseased livestock, you must attach a statement to your return explaining that the livestock were disposed of because of disease. 2013 ohio state tax form You must also include other information on this statement. 2013 ohio state tax form See How To Postpone Gain , later, under Postponing Gain . 2013 ohio state tax form Weather-related sales of livestock. 2013 ohio state tax form   If you sell or exchange livestock (other than poultry) held for draft, breeding, or dairy purposes solely because of drought, flood, or other weather-related conditions, treat the sale or exchange as an involuntary conversion. 2013 ohio state tax form Only livestock sold in excess of the number you normally would sell under usual business practice, in the absence of weather-related conditions, are considered involuntary conversions. 2013 ohio state tax form Figure the gain or loss using the rules discussed under Determining Gain or Loss in chapter 8. 2013 ohio state tax form If you replace the livestock, you may be able to postpone reporting the gain. 2013 ohio state tax form See Postponing Gain below. 2013 ohio state tax form Example. 2013 ohio state tax form It is your usual business practice to sell five of your dairy animals during the year. 2013 ohio state tax form This year you sold 20 dairy animals because of drought. 2013 ohio state tax form The sale of 15 animals is treated as an involuntary conversion. 2013 ohio state tax form    If you do not replace the livestock, you may be able to report the gain in the following year's income. 2013 ohio state tax form This rule also applies to other livestock (including poultry). 2013 ohio state tax form See Sales Caused by Weather-Related Conditions in chapter 3. 2013 ohio state tax form Tree Seedlings If, because of an abnormal drought, the failure of planted tree seedlings is greater than normally anticipated, you may have a deductible loss. 2013 ohio state tax form Treat the loss as a loss from an involuntary conversion. 2013 ohio state tax form The loss equals the previously capitalized reforestation costs you had to duplicate on replanting. 2013 ohio state tax form You deduct the loss on the return for the year the seedlings died. 2013 ohio state tax form Postponing Gain Do not report a gain if you receive reimbursement in the form of property similar or related in service or use to the destroyed, stolen, or other involuntarily converted property. 2013 ohio state tax form Your basis in the new property is generally the same as your adjusted basis in the property it replaces. 2013 ohio state tax form You must ordinarily report the gain on your stolen, destroyed, or other involuntarily converted property if you receive money or unlike property as reimbursement. 2013 ohio state tax form However, you can choose to postpone reporting the gain if you purchase replacement property similar or related in service or use to your destroyed, stolen, or other involuntarily converted property within a specific replacement period. 2013 ohio state tax form If you have a gain on damaged property, you can postpone reporting the gain if you spend the reimbursement to restore the property. 2013 ohio state tax form To postpone reporting all the gain, the cost of your replacement property must be at least as much as the reimbursement you receive. 2013 ohio state tax form If the cost of the replacement property is less than the reimbursement, you must include the gain in your income up to the amount of the unspent reimbursement. 2013 ohio state tax form Example 1. 2013 ohio state tax form In 1985, you constructed a barn to store farm equipment at a cost of $20,000. 2013 ohio state tax form In 1987, you added a silo to the barn at a cost of $15,000 to store grain. 2013 ohio state tax form In May of this year, the property was worth $100,000. 2013 ohio state tax form In June the barn and silo were destroyed by a tornado. 2013 ohio state tax form At the time of the tornado, you had an adjusted basis of $0 in the property. 2013 ohio state tax form You received $85,000 from the insurance company. 2013 ohio state tax form You had a gain of $85,000 ($85,000 – $0). 2013 ohio state tax form You spent $80,000 to rebuild the barn and silo. 2013 ohio state tax form Since this is less than the insurance proceeds received, you must include $5,000 ($85,000 – $80,000) in your income. 2013 ohio state tax form Example 2. 2013 ohio state tax form In 1970, you bought a cabin in the mountains for your personal use at a cost of $18,000. 2013 ohio state tax form You made no further improvements or additions to it. 2013 ohio state tax form When a storm destroyed the cabin this January, the cabin was worth $250,000. 2013 ohio state tax form You received $146,000 from the insurance company in March. 2013 ohio state tax form You had a gain of $128,000 ($146,000 − $18,000). 2013 ohio state tax form You spent $144,000 to rebuild the cabin. 2013 ohio state tax form Since this is less than the insurance proceeds received, you must include $2,000 ($146,000 − $144,000) in your income. 2013 ohio state tax form Buying replacement property from a related person. 2013 ohio state tax form   You cannot postpone reporting a gain from a casualty, theft, or other involuntary conversion if you buy the replacement property from a related person (discussed later). 2013 ohio state tax form This rule applies to the following taxpayers. 2013 ohio state tax form C corporations. 2013 ohio state tax form Partnerships in which more than 50% of the capital or profits interest is owned by C corporations. 2013 ohio state tax form Individuals, partnerships (other than those in (2) above), and S corporations if the total realized gain for the tax year on all involuntarily converted properties on which there are realized gains is more than $100,000. 2013 ohio state tax form For involuntary conversions described in (3) above, gains cannot be offset by any losses when determining whether the total gain is more than $100,000. 2013 ohio state tax form If the property is owned by a partnership, the $100,000 limit applies to the partnership and each partner. 2013 ohio state tax form If the property is owned by an S corporation, the $100,000 limit applies to the S corporation and each shareholder. 2013 ohio state tax form Exception. 2013 ohio state tax form   This rule does not apply if the related person acquired the property from an unrelated person within the period of time allowed for replacing the involuntarily converted property. 2013 ohio state tax form Related persons. 2013 ohio state tax form   Under this rule, related persons include, for example, a parent and child, a brother and sister, a corporation and an individual who owns more than 50% of its outstanding stock, and two partnerships in which the same C corporations own more than 50% of the capital or profits interests. 2013 ohio state tax form For more information on related persons, see Nondeductible Loss under Sales and Exchanges Between Related Persons in chapter 2 of Publication 544. 2013 ohio state tax form Death of a taxpayer. 2013 ohio state tax form   If a taxpayer dies after having a gain, but before buying replacement property, the gain must be reported for the year in which the decedent realized the gain. 2013 ohio state tax form The executor of the estate or the person succeeding to the funds from the involuntary conversion cannot postpone reporting the gain by buying replacement property. 2013 ohio state tax form Replacement Property You must buy replacement property for the specific purpose of replacing your property. 2013 ohio state tax form Your replacement property must be similar or related in service or use to the property it replaces. 2013 ohio state tax form You do not have to use the same funds you receive as reimbursement for your old property to acquire the replacement property. 2013 ohio state tax form If you spend the money you receive for other purposes, and borrow money to buy replacement property, you can still choose to postpone reporting the gain if you meet the other requirements. 2013 ohio state tax form Property you acquire by gift or inheritance does not qualify as replacement property. 2013 ohio state tax form Owner-user. 2013 ohio state tax form   If you are an owner-user, similar or related in service or use means that replacement property must function in the same way as the property it replaces. 2013 ohio state tax form Examples of property that functions in the same way as the property it replaces are a home that replaces another home, a dairy cow that replaces another dairy cow, and farm land that replaces other farm land. 2013 ohio state tax form A grinding mill that replaces a tractor does not qualify. 2013 ohio state tax form Neither does a breeding or draft animal that replaces a dairy cow. 2013 ohio state tax form Soil or other environmental contamination. 2013 ohio state tax form   If, because of soil or other environmental contamination, it is not feasible for you to reinvest your insurance money or other proceeds from destroyed or damaged livestock in property similar or related in service or use to the livestock, you can treat other property (including real property) used for farming purposes, as property similar or related in service or use to the destroyed or damaged livestock. 2013 ohio state tax form Weather-related conditions. 2013 ohio state tax form   If, because of drought, flood, or other weather-related conditions, it is not feasible for you to reinvest the insurance money or other proceeds in property similar or related in service or use to the livestock, you can treat other property (excluding real property) used for farming purposes, as property similar or related in service or use to the livestock you disposed of. 2013 ohio state tax form Example. 2013 ohio state tax form Each year you normally sell 25 cows from your beef herd. 2013 ohio state tax form However, this year you had to sell 50 cows. 2013 ohio state tax form This is because a severe drought significantly reduced the amount of hay and pasture yield needed to feed your herd for the rest of the year. 2013 ohio state tax form Because, as a result of the severe drought, it is not feasible for you to use the proceeds from selling the extra cows to buy new cows, you can treat other property (excluding real property) used for farming purposes, as property similar or related in service or use to the cows you sold. 2013 ohio state tax form Standing crop destroyed by casualty. 2013 ohio state tax form   If a storm or other casualty destroyed your standing crop and you use the insurance money to acquire either another standing crop or a harvested crop, this purchase qualifies as replacement property. 2013 ohio state tax form The costs of planting and raising a new crop qualify as replacement costs for the destroyed crop only if you use the crop method of accounting (discussed in chapter 2). 2013 ohio state tax form In that case, the costs of bringing the new crop to the same level of maturity as the destroyed crop qualify as replacement costs to the extent they are incurred during the replacement period. 2013 ohio state tax form Timber loss. 2013 ohio state tax form   Standing timber you bought with the proceeds from the sale of timber downed as a result of a casualty, such as high winds, earthquakes, or volcanic eruptions, qualifies as replacement property. 2013 ohio state tax form If you bought the standing timber within the replacement period, you can postpone reporting the gain. 2013 ohio state tax form Business or income-producing property located in a federally declared disaster area. 2013 ohio state tax form   If your destroyed business or income-producing property was located in a federally declared disaster area, any tangible replacement property you acquire for use in any business is treated as similar or related in service or use to the destroyed property. 2013 ohio state tax form For more information, see Disaster Area Losses in Publication 547. 2013 ohio state tax form Substituting replacement property. 2013 ohio state tax form   Once you have acquired qualified replacement property that you designate as replacement property in a statement attached to your tax return, you cannot substitute other qualified replacement property. 2013 ohio state tax form This is true even if you acquire the other property within the replacement period. 2013 ohio state tax form However, if you discover that the original replacement property was not qualified replacement property, you can, within the replacement period, substitute the new qualified replacement property. 2013 ohio state tax form Basis of replacement property. 2013 ohio state tax form   You must reduce the basis of your replacement property (its cost) by the amount of postponed gain. 2013 ohio state tax form In this way, tax on the gain is postponed until you dispose of the replacement property. 2013 ohio state tax form Replacement Period To postpone reporting your gain, you must buy replacement property within a specified period of time. 2013 ohio state tax form This is the replacement period. 2013 ohio state tax form The replacement period begins on the date your property was damaged, destroyed, stolen, sold, or exchanged. 2013 ohio state tax form The replacement period generally ends 2 years after the close of the first tax year in which you realize any part of your gain from the involuntary conversion. 2013 ohio state tax form Example. 2013 ohio state tax form You are a calendar year taxpayer. 2013 ohio state tax form While you were on vacation, farm equipment that cost $2,200 was stolen from your farm. 2013 ohio state tax form You discovered the theft when you returned to your farm on November 11, 2012. 2013 ohio state tax form Your insurance company investigated the theft and did not settle your claim until January 5, 2013, when they paid you $3,000. 2013 ohio state tax form You first realized a gain from the reimbursement for the theft during 2013, so you have until December 31, 2015, to replace the property. 2013 ohio state tax form Main home in disaster area. 2013 ohio state tax form   For your main home (or its contents) located in a federally declared disaster area, the replacement period ends 4 years after the close of the first tax year in which you realize any part of your gain from the involuntary conversion. 2013 ohio state tax form See Disaster Area Losses , later. 2013 ohio state tax form Property in the Midwestern disaster areas. 2013 ohio state tax form   For property located in the Midwestern disaster areas (defined in Table 4 in the 2008 Publication 547) that was destroyed, damaged, stolen, or condemned, the replacement period ends 5 years after the close of the first tax year in which any part of your gain is realized. 2013 ohio state tax form This 5-year replacement period applies only if substantially all of the use of the replacement property is in the Midwestern disaster areas. 2013 ohio state tax form Property in the Kansas disaster area. 2013 ohio state tax form   For property located in the Kansas disaster area that was destroyed, damaged, stolen, or condemned after May 3, 2007, as a result of the Kansas storms and tornadoes, the replacement period ends 5 years after the close of the first tax year in which any part of your gain is realized. 2013 ohio state tax form This 5-year replacement period applies only if substantially all of the use of the replacement property is in the Kansas disaster area. 2013 ohio state tax form Property in the Hurricane Katrina disaster area. 2013 ohio state tax form   For property located in the Hurricane Katrina disaster area that was destroyed, damaged, stolen, or condemned after August 24, 2005, as a result of Hurricane Katrina, the replacement period ends 5 years after the close of the first tax year in which any part of your gain is realized. 2013 ohio state tax form This 5-year replacement period applies only if substantially all of the use of the replacement property is in the Hurricane Katrina disaster area. 2013 ohio state tax form Weather-related sales of livestock in an area eligible for federal assistance. 2013 ohio state tax form   For the sale or exchange of livestock due to drought, flood, or other weather-related conditions in an area eligible for federal assistance, the replacement period ends 4 years after the close of the first tax year in which you realize any part of your gain from the sale or exchange. 2013 ohio state tax form The IRS may extend the replacement period on a regional basis if the weather-related conditions continue for longer than 3 years. 2013 ohio state tax form   For information on extensions of the replacement period because of persistent drought, see Notice 2006-82, 2006-39 I. 2013 ohio state tax form R. 2013 ohio state tax form B. 2013 ohio state tax form 529, available at  www. 2013 ohio state tax form irs. 2013 ohio state tax form gov/irb/2006-39_IRB/ar11. 2013 ohio state tax form html. 2013 ohio state tax form For a list of counties for which exceptional, extreme, or severe drought was reported during the 12 months ending August 31, 2013, see Notice 2013-62, available at IRS. 2013 ohio state tax form gov. 2013 ohio state tax form Condemnation. 2013 ohio state tax form   The replacement period for a condemnation begins on the earlier of the following dates. 2013 ohio state tax form The date on which you disposed of the condemned property. 2013 ohio state tax form The date on which the threat of condemnation began. 2013 ohio state tax form The replacement period generally ends 2 years after the close of the first tax year in which any part of the gain on the condemnation is realized. 2013 ohio state tax form But see Main home in disaster area , Property in the Midwestern disaster areas , Property in the Kansas disaster area , and Property in the Hurricane Katrina disaster area , earlier, for exceptions. 2013 ohio state tax form Business or investment real property. 2013 ohio state tax form   If real property held for use in a trade or business or for investment (not including property held primarily for sale) is condemned, the replacement period ends 3 years after the close of the first tax year in which any part of the gain on the condemnation is realized. 2013 ohio state tax form Extension. 2013 ohio state tax form   You can apply for an extension of the replacement period. 2013 ohio state tax form Send your written application to the Internal Revenue Service Center where you file your tax return. 2013 ohio state tax form See your tax return instructions for the address. 2013 ohio state tax form Include all the details about your need for an extension. 2013 ohio state tax form Make your application before the end of the replacement period. 2013 ohio state tax form However, you can file an application within a reasonable time after the replacement period ends if you can show a good reason for the delay. 2013 ohio state tax form You will get an extension of the replacement period if you can show reasonable cause for not making the replacement within the regular period. 2013 ohio state tax form How To Postpone Gain You postpone reporting your gain by reporting your choice on your tax return for the year you have the gain. 2013 ohio state tax form You have the gain in the year you receive insurance proceeds or other reimbursements that result in a gain. 2013 ohio state tax form Required statement. 2013 ohio state tax form   You should attach a statement to your return for the year you have the gain. 2013 ohio state tax form This statement should include all the following information. 2013 ohio state tax form The date and details of the casualty, theft, or other involuntary conversion. 2013 ohio state tax form The insurance or other reimbursement you received. 2013 ohio state tax form How you figured the gain. 2013 ohio state tax form Replacement property acquired before return filed. 2013 ohio state tax form   If you acquire replacement property before you file your return for the year you have the gain, your statement should also include detailed information about all the following items. 2013 ohio state tax form The replacement property. 2013 ohio state tax form The postponed gain. 2013 ohio state tax form The basis adjustment that reflects the postponed gain. 2013 ohio state tax form Any gain you are reporting as income. 2013 ohio state tax form Replacement property acquired after return filed. 2013 ohio state tax form   If you intend to buy replacement property after you file your return for the year you realize gain, your statement should also say that you are choosing to replace the property within the required replacement period. 2013 ohio state tax form   You should then attach another statement to your return for the year in which you buy the replacement property. 2013 ohio state tax form This statement should contain detailed information on the replacement property. 2013 ohio state tax form If you acquire part of your replacement property in one year and part in another year, you must attach a statement to each year's return. 2013 ohio state tax form Include in the statement detailed information on the replacement property bought in that year. 2013 ohio state tax form Reporting weather-related sales of livestock. 2013 ohio state tax form   If you choose to postpone reporting the gain on weather-related sales or exchanges of livestock, show all the following information on a statement attached to your return for the tax year in which you first realize any of the gain. 2013 ohio state tax form Evidence of the weather-related conditions that forced the sale or exchange of the livestock. 2013 ohio state tax form The gain realized on the sale or exchange. 2013 ohio state tax form The number and kind of livestock sold or exchanged. 2013 ohio state tax form The number of livestock of each kind you would have sold or exchanged under your usual business practice. 2013 ohio state tax form   Show all the following information and the preceding information on the return for the year in which you replace the livestock. 2013 ohio state tax form The dates you bought the replacement property. 2013 ohio state tax form The cost of the replacement property. 2013 ohio state tax form Description of the replacement property (for example, the number and kind of the replacement livestock). 2013 ohio state tax form Amended return. 2013 ohio state tax form   You must file an amended return (Form 1040X) for the tax year of the gain in either of the following situations. 2013 ohio state tax form You do not acquire replacement property within the replacement period, plus extensions. 2013 ohio state tax form On this amended return, you must report the gain and pay any additional tax due. 2013 ohio state tax form You acquire replacement property within the required replacement period, plus extensions, but at a cost less than the amount you receive from the casualty, theft, or other involuntary conversion. 2013 ohio state tax form On this amended return, you must report the part of the gain that cannot be postponed and pay any additional tax due. 2013 ohio state tax form Disaster Area Losses Special rules apply to federally declared disaster area losses. 2013 ohio state tax form A federally declared disaster is a disaster that occurred in an area declared by the President to be eligible for federal assistance under the Robert T. 2013 ohio state tax form Stafford Disaster Relief and Emergency Assistance Act. 2013 ohio state tax form It includes a major disaster or emergency declaration under the act. 2013 ohio state tax form A list of the areas warranting public or individual assistance (or both) under the Act is available at the Federal Emergency Management Agency (FEMA) web site at www. 2013 ohio state tax form fema. 2013 ohio state tax form gov. 2013 ohio state tax form This part discusses the special rules for when to deduct a disaster area loss and what tax deadlines may be postponed. 2013 ohio state tax form For other special rules, see Disaster Area Losses in Publication 547. 2013 ohio state tax form When to deduct the loss. 2013 ohio state tax form   You generally must deduct a casualty loss in the year it occurred. 2013 ohio state tax form However, if you have a deductible loss from a disaster that occurred in an area warranting public or individual assistance (or both), you can choose to deduct that loss on your return or amended return for the tax year immediately preceding the tax year in which the disaster happened. 2013 ohio state tax form If you make this choice, the loss is treated as having occurred in the preceding year. 2013 ohio state tax form    Claiming a qualifying disaster loss on the previous year's return may result in a lower tax for that year, often producing or increasing a cash refund. 2013 ohio state tax form   You must make the choice to take your casualty loss for the disaster in the preceding year by the later of the following dates. 2013 ohio state tax form The due date (without extensions) for filing your tax return for the tax year in which the disaster actually occurred. 2013 ohio state tax form The due date (with extensions) for the return for the preceding tax year. 2013 ohio state tax form Federal disaster relief grants. 2013 ohio state tax form   Do not include post-disaster relief grants received under the Robert T. 2013 ohio state tax form Stafford Disaster Relief and Emergency Assistance Act in your income if the grant payments are made to help you meet necessary expenses or serious needs for medical, dental, housing, personal property, transportation, or funeral expenses. 2013 ohio state tax form Do not deduct casualty losses or medical expenses to the extent they are specifically reimbursed by these disaster relief grants. 2013 ohio state tax form If the casualty loss was specifically reimbursed by the grant and you received the grant after the year in which you deducted the casualty loss, see Reimbursement received after deducting loss , earlier. 2013 ohio state tax form Unemployment assistance payments under the Act are taxable unemployment compensation. 2013 ohio state tax form Qualified disaster relief payments. 2013 ohio state tax form   Qualified disaster relief payments are not included in the income of individuals to the extent any expenses compensated by these payments are not otherwise compensated for by insurance or other reimbursement. 2013 ohio state tax form These payments are not subject to income tax, self-employment tax, or employment taxes (social security, Medicare, and federal unemployment taxes). 2013 ohio state tax form No withholding applies to these payments. 2013 ohio state tax form   Qualified disaster relief payments include payments you receive (regardless of the source) for the following expenses. 2013 ohio state tax form Reasonable and necessary personal, family, living, or funeral expenses incurred as a result of a federally declared disaster. 2013 ohio state tax form Reasonable and necessary expenses incurred for the repair or rehabilitation of a personal residence due to a federally declared disaster. 2013 ohio state tax form (A personal residence can be a rented residence or one you own. 2013 ohio state tax form ) Reasonable and necessary expenses incurred for the repair or replacement of the contents of a personal residence due to a federally declared disaster. 2013 ohio state tax form   Qualified disaster relief payments include amounts paid by a federal, state, or local government in connection with a federally declared disaster to individuals affected by the disaster. 2013 ohio state tax form    Qualified disaster relief payments do not include: Payments for expenses otherwise paid for by insurance or other reimbursements, or Income replacement payments, such as payments of lost wages, lost business income, or unemployment compensation. 2013 ohio state tax form Qualified disaster mitigation payments. 2013 ohio state tax form   Qualified disaster mitigation payments made under the Robert T. 2013 ohio state tax form Stafford Disaster Relief and Emergency Assistance Act or the National Flood Insurance Act (as in effect on April 15, 2005) are not included in income. 2013 ohio state tax form These are payments you, as a property owner, receive to reduce the risk of future damage to your property. 2013 ohio state tax form You cannot increase your basis in property, or take a deduction or credit, for expenditures made with respect to those payments. 2013 ohio state tax form Sale of property under hazard mitigation program. 2013 ohio state tax form   Generally, if you sell or otherwise transfer property, you must recognize any gain or loss for tax purposes unless the property is your main home. 2013 ohio state tax form You report the gain or deduct the loss on your tax return for the year you realize it. 2013 ohio state tax form (You cannot deduct a loss on personal-use property unless the loss resulted from a casualty, as discussed earlier. 2013 ohio state tax form ) However, if you sell or otherwise transfer property to the Federal Government, a state or local government, or an Indian tribal government under a hazard mitigation program, you can choose to postpone reporting the gain if you buy qualifying replacement property within a certain period of time. 2013 ohio state tax form See Postponing Gain , earlier, for the rules that apply. 2013 ohio state tax form Other federal assistance programs. 2013 ohio state tax form    For more information about other federal assistance programs, see Crop Insurance and Crop Disaster Payments and Feed Assistance and Payments in chapter 3 earlier. 2013 ohio state tax form Postponed tax deadlines. 2013 ohio state tax form   The IRS may postpone for up to 1 year certain tax deadlines of taxpayers who are affected by a federally declared disaster. 2013 ohio state tax form The tax deadlines the IRS may postpone include those for filing income, excise, and employment tax returns, paying income, excise, and employment taxes, and making contributions to a traditional IRA or Roth IRA. 2013 ohio state tax form   If any tax deadline is postponed, the IRS will publicize the postponement in your area and publish a news release, revenue ruling, revenue procedure, notice, announcement, or other guidance in the Internal Revenue Bulletin (IRB). 2013 ohio state tax form Go to http://www. 2013 ohio state tax form irs. 2013 ohio state tax form gov/uac/Tax-Relief-in-Disaster-Situations to find out if a tax deadline has been postponed for your area. 2013 ohio state tax form Who is eligible. 2013 ohio state tax form   If the IRS postpones a tax deadline, the following taxpayers are eligible for the postponement. 2013 ohio state tax form Any individual whose main home is located in a covered disaster area (defined next). 2013 ohio state tax form Any business entity or sole proprietor whose principal place of business is located in a covered disaster area. 2013 ohio state tax form Any individual who is a relief worker affiliated with a recognized government or philanthropic organization and who is assisting in a covered disaster area. 2013 ohio state tax form Any individual, business entity, or sole proprietorship whose records are needed to meet a postponed tax deadline, provided those records are maintained in a covered disaster area. 2013 ohio state tax form The main home or principal place of business does not have to be located in the covered disaster area. 2013 ohio state tax form Any estate or trust that has tax records necessary to meet a postponed tax deadline, provided those records are maintained in a covered disaster area. 2013 ohio state tax form The spouse on a joint return with a taxpayer who is eligible for postponements. 2013 ohio state tax form Any individual, business entity, or sole proprietorship not located in a covered disaster area, but whose necessary records to meet a postponed tax deadline are located in the covered disaster area. 2013 ohio state tax form Any individual visiting the covered disaster area who was killed or injured as a result of the disaster. 2013 ohio state tax form Any other person determined by the IRS to be affected by a federally declared disaster. 2013 ohio state tax form Covered disaster area. 2013 ohio state tax form   This is an area of a federally declared disaster area in which the IRS has decided to postpone tax deadlines for up to 1 year. 2013 ohio state tax form Abatement of interest and penalties. 2013 ohio state tax form   The IRS may abate the interest and penalties on the underpaid income tax for the length of any postponement of tax deadlines. 2013 ohio state tax form Reporting Gains and Losses You will have to file one or more of the following forms to report your gains or losses from involuntary conversions. 2013 ohio state tax form Form 4684. 2013 ohio state tax form   Use this form to report your gains and losses from casualties and thefts. 2013 ohio state tax form Form 4797. 2013 ohio state tax form   Use this form to report involuntary conversions (other than from casualty or theft) of property used in your trade or business and capital assets held in connection with a trade or business or a transaction entered into for profit. 2013 ohio state tax form Also use this form if you have a gain from a casualty or theft on trade, business or income-producing property held for more than 1 year and you have to recapture some or all of your gain as ordinary income. 2013 ohio state tax form Form 8949. 2013 ohio state tax form   Use this form to report gain from an involuntary conversion (other than from casualty or theft) of personal-use property. 2013 ohio state tax form Schedule A (Form 1040). 2013 ohio state tax form   Use this form to deduct your losses from casualties and thefts of personal-use property and income-producing property, that you reported on Form 4684. 2013 ohio state tax form Schedule D (Form 1040). 2013 ohio state tax form   Use this form to carry over the following gains. 2013 ohio state tax form Net gain shown on Form 4797 from an involuntary conversion of business property held for more than 1 year. 2013 ohio state tax form Net gain shown on Form 4684 from the casualty or theft of personal-use property. 2013 ohio state tax form    Also use this form to figure the overall gain or loss from transactions reported on Form 8949. 2013 ohio state tax form Schedule F (Form 1040). 2013 ohio state tax form   Use this form to deduct your losses from casualty or theft of livestock or produce bought for sale under Other expenses in Part II, line 32, if you use the cash method of accounting and have not otherwise deducted these losses. 2013 ohio state tax form Prev  Up  Next   Home   More Online Publications
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Watch Out for Tax Scams as Filing Season Opening Nears

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IR-2014-5, Jan. 23, 2014

WASHINGTON — With the start of the 2014 tax season approaching on Jan. 31, the Internal Revenue Service urged taxpayers to be aware that tax-related scams using the IRS name proliferate during this time of year.

Tax scams can take many forms, with perpetrators posing as the IRS in everything from e-mail refund schemes to phone impersonators. The IRS warned taxpayers to be vigilant of any unexpected communication that is purportedly from the IRS at the start of tax season.

The IRS encourages taxpayers to be on the lookout for phone and email scams that use the IRS as a lure. The IRS does not initiate contact with taxpayers by email to request personal or financial information. This includes any type of electronic communication, such as text messages and social media channels. The IRS also does not ask for personal identification numbers (PINs), passwords or similar confidential access information for credit card, bank or other financial accounts. Recipients should not open any attachments or click on any links contained in the message. Instead, forward the e-mail to phishing@irs.gov.

Additional information on how to report phishing scams involving the IRS is available on the genuine IRS website, IRS.gov.

In addition, the IRS continues to aggressively expand its efforts to protect and prevent refund fraud involving identity theft as well as work with federal, state and local officials to pursue the perpetrators of this fraud.

The IRS offers several suggestions for taxpayers to help protect themselves against scams and identity theft:

  • Don’t carry your Social Security card or any documents that include your Social Security number (SSN) or Individual Taxpayer Identification Number (ITIN).
  • Don’t give a business your SSN or ITIN just because they ask. Give it only when required.
  • Protect your financial information.
  • Check your credit report every 12 months.
  • Secure personal information in your home.
  • Protect your personal computers by using firewalls and anti-spam/virus software, updating security patches and changing passwords for Internet accounts.
  • Don’t give personal information over the phone, through the mail or on the Internet unless you have initiated the contact and are sure of the recipient.

For more information, see the special identity theft section on IRS.gov and IRS Fact Sheet 2014-1, IRS Combats Identity Theft and Refund Fraud on Many Fronts.

Taxpayers also should be very careful when choosing a tax preparer. While most preparers provide excellent service to their clients, a few unscrupulous return preparers file false and fraudulent tax returns and ultimately defraud their clients. It is important to know that even if someone else prepares your return, you are ultimately responsible for all the information on the tax return.

Refer to our Tips to Help you Choose a Tax Preparer for the upcoming 2014 Tax Season starting Jan. 31.  

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Page Last Reviewed or Updated: 23-Jan-2014

The 2013 Ohio State Tax Form

2013 ohio state tax form 3. 2013 ohio state tax form   Farm Income Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: Schedule F (Form 1040) Sales of Farm ProductsSchedule F. 2013 ohio state tax form Form 4797. 2013 ohio state tax form Sales Caused by Weather-Related Conditions Rents (Including Crop Shares)Crop Shares Agricultural Program PaymentsCommodity Credit Corporation (CCC) Loans Conservation Reserve Program (CRP) Crop Insurance and Crop Disaster Payments Feed Assistance and Payments Cost-Sharing Exclusion (Improvements) Payments Under the Farm Security and Rural Investment Act of 2002 and Under the Food, Conservation, and Energy Act of 2008 Tobacco Quota Buyout Program Payments Other Payments Payment to More Than One Person Income From CooperativesPatronage Dividends Per-Unit Retain Certificates Cancellation of DebtGeneral Rule Exceptions Exclusions Income From Other SourcesSod. 2013 ohio state tax form Granting the right to remove deposits. 2013 ohio state tax form Income Averaging for FarmersElected Farm Income (EFI) How To Figure the Tax Effect on Other Tax Determinations Tax for Certain Children Who Have Unearned Income Alternative Minimum Tax (AMT) Schedule J Introduction You may receive income from many sources. 2013 ohio state tax form You must report the income from all the different sources on your tax return, unless it is excluded by law. 2013 ohio state tax form Where you report the income on your tax return depends on its source. 2013 ohio state tax form This chapter discusses farm income you report on Schedule F (Form 1040), Profit or Loss From Farming. 2013 ohio state tax form For information on where to report other income, see the Instructions for Form 1040, U. 2013 ohio state tax form S. 2013 ohio state tax form Individual Income Tax Return. 2013 ohio state tax form Accounting method. 2013 ohio state tax form   The rules discussed in this chapter assume you use the cash method of accounting. 2013 ohio state tax form Under the cash method, you generally include an item of income in gross income in the year you receive it. 2013 ohio state tax form See Cash Method in chapter 2. 2013 ohio state tax form   If you use an accrual method of accounting, different rules may apply to your situation. 2013 ohio state tax form See Accrual Method in chapter 2. 2013 ohio state tax form Topics - This chapter discusses: Schedule F Sales of farm products Rents (including crop shares) Agricultural program payments Income from cooperatives Cancellation of debt Income from other sources Income averaging for farmers Useful Items - You may want to see: Publication 525 Taxable and Nontaxable Income 550 Investment Income and Expenses 908 Bankruptcy Tax Guide 925 Passive Activity and At-Risk Rules 4681 Canceled Debts, Foreclosures, Repossessions, and Abandonments Form (and Instructions) 982 Reduction of Tax Attributes Due to Discharge of Indebtedness Sch E (Form 1040) Supplemental Income and Loss Sch J (Form 1040) Income Averaging for Farmers and Fishermen 1099-G Certain Government Payments 1099-PATR Taxable Distributions Received From Cooperatives 4797 Sales of Business Property 4835 Farm Rental Income and Expenses See chapter 16 for information about getting publications and forms. 2013 ohio state tax form Schedule F (Form 1040) Individuals, trusts, and partnerships report farm income on Schedule F (Form 1040), Profit or Loss From Farming. 2013 ohio state tax form Use this schedule to figure the net profit or loss from regular farming operations. 2013 ohio state tax form Income from farming reported on Schedule F includes amounts you receive from cultivating, operating, or managing a farm for gain or profit, either as owner or tenant. 2013 ohio state tax form This includes income from operating a stock, dairy, poultry, fish, fruit, or truck farm and income from operating a plantation, ranch, range, or orchard. 2013 ohio state tax form It also includes income from the sale of crop shares if you materially participate in producing the crop. 2013 ohio state tax form See Rents (Including Crop Shares) , later. 2013 ohio state tax form Income received from operating a nursery, which specializes in growing ornamental plants, is considered to be income from farming. 2013 ohio state tax form Income reported on Schedule F does not include gains or losses from sales or other dispositions of the following farm assets. 2013 ohio state tax form Land. 2013 ohio state tax form Depreciable farm equipment. 2013 ohio state tax form Buildings and structures. 2013 ohio state tax form Livestock held for draft, breeding, sport, or dairy purposes. 2013 ohio state tax form Gains and losses from most dispositions of farm assets are discussed in chapters 8 and 9. 2013 ohio state tax form Gains and losses from casualties, thefts, and condemnations are discussed in chapter 11. 2013 ohio state tax form Sales of Farm Products Where to report. 2013 ohio state tax form    Table 3-1 shows where to report the sale of farm products on your tax return. 2013 ohio state tax form Schedule F. 2013 ohio state tax form   Amounts received from the sales of products you raised on your farm for sale (or bought for resale), such as livestock, produce, or grains, are reported on Schedule F. 2013 ohio state tax form This includes money and the fair market value of any property or services you receive. 2013 ohio state tax form When you sell farm products bought for resale, your profit or loss is the difference between your selling price (money plus the fair market value of any property) and your basis in the item (usually the cost). 2013 ohio state tax form See chapter 6 for information on the basis of assets. 2013 ohio state tax form You generally report these amounts on Schedule F for the year you receive payment. 2013 ohio state tax form Example. 2013 ohio state tax form In 2012, you bought 20 feeder calves for $11,000 for resale. 2013 ohio state tax form You sold them in 2013 for $21,000. 2013 ohio state tax form You report the $21,000 sales price on Schedule F, line 1b, subtract your $11,000 basis on line 1d, and report the resulting $10,000 profit on line 1e. 2013 ohio state tax form Form 4797. 2013 ohio state tax form   Sales of livestock held for draft, breeding, sport, or dairy purposes may result in ordinary or capital gains or losses, depending on the circumstances. 2013 ohio state tax form In either case, you should always report these sales on Form 4797 instead of Schedule F. 2013 ohio state tax form See Livestock under Ordinary or Capital Gain or Loss in chapter 8. 2013 ohio state tax form Animals you do not hold primarily for sale are considered business assets of your farm. 2013 ohio state tax form Table 3-1. 2013 ohio state tax form Where To Report Sales of Farm Products Item Sold Schedule F Form 4797 Farm products raised for sale X   Farm products bought for resale X   Farm assets not held primarily for sale, such as livestock held for draft, breeding, sport, or dairy purposes (bought or raised)   X Sale by agent. 2013 ohio state tax form   If your agent sells your farm products, you have constructive receipt of the income when your agent receives payment and you must include the net proceeds from the sale in gross income for the year the agent receives payment. 2013 ohio state tax form This applies even if your agent pays you in a later year. 2013 ohio state tax form For a discussion on constructive receipt of income, see Cash Method under Accounting Methods in chapter 2. 2013 ohio state tax form Sales Caused by Weather-Related Conditions If you sell or exchange more livestock, including poultry, than you normally would in a year because of a drought, flood, or other weather-related condition, you may be able to postpone reporting the gain from the additional animals until the next year. 2013 ohio state tax form You must meet all the following conditions to qualify. 2013 ohio state tax form Your principal trade or business is farming. 2013 ohio state tax form You use the cash method of accounting. 2013 ohio state tax form You can show that, under your usual business practices, you would not have sold or exchanged the additional animals this year except for the weather-related condition. 2013 ohio state tax form The weather-related condition caused an area to be designated as eligible for assistance by the federal government. 2013 ohio state tax form Sales or exchanges made before an area became eligible for federal assistance qualify if the weather-related condition that caused the sale or exchange also caused the area to be designated as eligible for federal assistance. 2013 ohio state tax form The designation can be made by the President, the Department of Agriculture (or any of its agencies), or by other federal departments or agencies. 2013 ohio state tax form A weather-related sale or exchange of livestock (other than poultry) held for draft, breeding, or dairy purposes may be an involuntary conversion. 2013 ohio state tax form See Other Involuntary Conversions in chapter 11. 2013 ohio state tax form Usual business practice. 2013 ohio state tax form   You must determine the number of animals you would have sold had you followed your usual business practice in the absence of the weather-related condition. 2013 ohio state tax form Do this by considering all the facts and circumstances, but do not take into account your sales in any earlier year for which you postponed the gain. 2013 ohio state tax form If you have not yet established a usual business practice, rely on the usual business practices of similarly situated farmers in your general region. 2013 ohio state tax form Connection with affected area. 2013 ohio state tax form   The livestock does not have to be raised or sold in an area affected by a weather-related condition for the postponement to apply. 2013 ohio state tax form However, the sale must occur solely because of a weather-related condition that affected the water, grazing, or other requirements of the livestock. 2013 ohio state tax form This requirement generally will not be met if the costs of feed, water, or other requirements of the livestock affected by the weather-related condition are not substantial in relation to the total costs of holding the livestock. 2013 ohio state tax form Classes of livestock. 2013 ohio state tax form   You must figure the amount to be postponed separately for each generic class of animals—for example, hogs, sheep, and cattle. 2013 ohio state tax form Do not separate animals into classes based on age, sex, or breed. 2013 ohio state tax form Amount to be postponed. 2013 ohio state tax form   Follow these steps to figure the amount of gain to be postponed for each class of animals. 2013 ohio state tax form Divide the total income realized from the sale of all livestock in the class during the tax year by the total number of such livestock sold. 2013 ohio state tax form For this purpose, do not treat any postponed gain from the previous year as income received from the sale of livestock. 2013 ohio state tax form Multiply the result in (1) by the excess number of such livestock sold solely because of weather-related conditions. 2013 ohio state tax form Example. 2013 ohio state tax form You are a calendar year taxpayer and you normally sell 100 head of beef cattle a year. 2013 ohio state tax form As a result of drought, you sold 135 head during 2012. 2013 ohio state tax form You realized $70,200 from the sale. 2013 ohio state tax form On August 9, 2012, as a result of drought, the affected area was declared a disaster area eligible for federal assistance. 2013 ohio state tax form The income you can postpone until 2013 is $18,200 [($70,200 ÷ 135) × 35]. 2013 ohio state tax form How to postpone gain. 2013 ohio state tax form   To postpone gain, attach a statement to your tax return for the year of the sale. 2013 ohio state tax form The statement must include your name and address and give the following information for each class of livestock for which you are postponing gain. 2013 ohio state tax form A statement that you are postponing gain under Internal Revenue Code (IRC) section 451(e). 2013 ohio state tax form Evidence of the weather-related conditions that forced the early sale or exchange of the livestock and the date, if known, on which an area was designated as eligible for assistance by the federal government because of weather-related conditions. 2013 ohio state tax form A statement explaining the relationship of the area affected by the weather-related condition to your early sale or exchange of the livestock. 2013 ohio state tax form The number of animals sold in each of the 3 preceding years. 2013 ohio state tax form The number of animals you would have sold in the tax year had you followed your normal business practice in the absence of weather-related conditions. 2013 ohio state tax form The total number of animals sold and the number sold because of weather-related conditions during the tax year. 2013 ohio state tax form A computation, as described above, of the income to be postponed for each class of livestock. 2013 ohio state tax form   Generally, you must file the statement and the return by the due date of the return, including extensions. 2013 ohio state tax form However, for sales or exchanges treated as an involuntary conversion from weather-related sales of livestock in an area eligible for federal assistance (discussed in chapter 11), you can file this statement at any time during the replacement period. 2013 ohio state tax form For other sales or exchanges, if you timely filed your return for the year without postponing gain, you can still postpone gain by filing an amended return within 6 months of the due date of the return (excluding extensions). 2013 ohio state tax form Attach the statement to the amended return and write “Filed pursuant to section 301. 2013 ohio state tax form 9100-2” at the top of the amended return. 2013 ohio state tax form File the amended return at the same address you filed the original return. 2013 ohio state tax form Once you have filed the statement, you can cancel your postponement of gain only with the approval of the IRS. 2013 ohio state tax form Rents (Including Crop Shares) The rent you receive for the use of your farmland is generally rental income, not farm income. 2013 ohio state tax form However, if you materially participate in farming operations on the land, the rent is farm income. 2013 ohio state tax form See Landlord Participation in Farming in chapter 12. 2013 ohio state tax form Pasture income and rental. 2013 ohio state tax form   If you pasture someone else's livestock and take care of them for a fee, the income is from your farming business. 2013 ohio state tax form You must enter it as Other income on Schedule F. 2013 ohio state tax form If you simply rent your pasture for a flat cash amount without providing services, report the income as rent on Part I of Schedule E (Form 1040), Supplemental Income and Loss. 2013 ohio state tax form Crop Shares You must include rent you receive in the form of crop shares in income in the year you convert the shares to money or the equivalent of money. 2013 ohio state tax form It does not matter whether you use the cash method of accounting or an accrual method of accounting. 2013 ohio state tax form If you materially participate in operating a farm from which you receive rent in the form of crop shares or livestock, the rental income is included in self-employment income. 2013 ohio state tax form See Landlord Participation in Farming in chapter 12. 2013 ohio state tax form Report the rental income on Schedule F. 2013 ohio state tax form If you do not materially participate in operating the farm, report this income on Form 4835 and carry the net income or loss to Schedule E (Form 1040). 2013 ohio state tax form The income is not included in self-employment income. 2013 ohio state tax form Crop shares you use to feed livestock. 2013 ohio state tax form   Crop shares you receive as a landlord and feed to your livestock are considered converted to money when fed to the livestock. 2013 ohio state tax form You must include the fair market value of the crop shares in income at that time. 2013 ohio state tax form You are entitled to a business expense deduction for the livestock feed in the same amount and at the same time you include the fair market value of the crop share as rental income. 2013 ohio state tax form Although these two transactions cancel each other for figuring adjusted gross income on Form 1040, they may be necessary to figure your self-employment tax. 2013 ohio state tax form See  chapter 12. 2013 ohio state tax form Crop shares you give to others (gift). 2013 ohio state tax form   Crop shares you receive as a landlord and give to others are considered converted to money when you make the gift. 2013 ohio state tax form You must report the fair market value of the crop share as income, even though someone else receives payment for the crop share. 2013 ohio state tax form Example. 2013 ohio state tax form A tenant farmed part of your land under a crop-share arrangement. 2013 ohio state tax form The tenant harvested and delivered the crop in your name to an elevator company. 2013 ohio state tax form Before selling any of the crop, you instructed the elevator company to cancel your warehouse receipt and make out new warehouse receipts in equal amounts of the crop in the names of your children. 2013 ohio state tax form They sell their crop shares in the following year and the elevator company makes payments directly to your children. 2013 ohio state tax form In this situation, you are considered to have received rental income and then made a gift of that income. 2013 ohio state tax form You must include the fair market value of the crop shares in your income for the tax year you gave the crop shares to your children. 2013 ohio state tax form Crop share loss. 2013 ohio state tax form   If you are involved in a rental or crop-share lease arrangement, any loss from these activities may be subject to the limits under the passive loss rules. 2013 ohio state tax form See Publication 925 for information on these rules. 2013 ohio state tax form Agricultural Program Payments You must include in income most government payments, such as those for approved conservation practices, direct payments, and counter-cyclical payments, whether you receive them in cash, materials, services, or commodity certificates. 2013 ohio state tax form However, you can exclude from income some payments you receive under certain cost-sharing conservation programs. 2013 ohio state tax form See Cost-Sharing Exclusion (Improvements) , later. 2013 ohio state tax form Report the agricultural program payment on the appropriate line of Schedule F, Part I. 2013 ohio state tax form Report the full amount even if you return a government check for cancellation, refund any of the payment you receive, or the government collects all or part of the payment from you by reducing the amount of some other payment or Commodity Credit Corporation (CCC) loan. 2013 ohio state tax form However, you can deduct the amount you refund or return or that reduces some other payment or loan to you. 2013 ohio state tax form Claim the deduction on Schedule F for the year of repayment or reduction. 2013 ohio state tax form Commodity Credit Corporation (CCC) Loans Generally, you do not report loans you receive as income. 2013 ohio state tax form However, if you pledge part or all of your production to secure a CCC loan, you can treat the loan as if it were a sale of the crop and report the loan proceeds as income in the year you receive them. 2013 ohio state tax form You do not need approval from the IRS to adopt this method of reporting CCC loans. 2013 ohio state tax form Once you report a CCC loan as income for the year received, you generally must report all CCC loans in that year and later years in the same way. 2013 ohio state tax form However, you can obtain for your tax year an automatic consent to change your method of accounting for loans received from the CCC, from including the loan amount in gross income for the tax year in which the loan is received to treating the loan amount as a loan. 2013 ohio state tax form For more information, see Part I of the Instructions for Form 3115 and Revenue Procedure 2008-52. 2013 ohio state tax form Revenue Procedure 2008-52, 2008-36 I. 2013 ohio state tax form R. 2013 ohio state tax form B. 2013 ohio state tax form 587, is available at  www. 2013 ohio state tax form irs. 2013 ohio state tax form gov/irb/2008-36_IRB/ar09. 2013 ohio state tax form html. 2013 ohio state tax form You can request income tax withholding from CCC loan payments you receive. 2013 ohio state tax form Use Form W-4V, Voluntary Withholding Request. 2013 ohio state tax form See chapter 16 for information about ordering the form. 2013 ohio state tax form To elect to report a CCC loan as income, include the loan proceeds as income on Schedule F, line 7a, for the year you receive it. 2013 ohio state tax form Attach a statement to your return showing the details of the loan. 2013 ohio state tax form You must file the statement and the return by the due date of the return, including extensions. 2013 ohio state tax form 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). 2013 ohio state tax form Attach the statement to the amended return and write “Filed pursuant to section 301. 2013 ohio state tax form 9100-2” at the top of the return. 2013 ohio state tax form File the amended return at the same address you filed the original return. 2013 ohio state tax form When you make this election, the amount you report as income becomes your basis in the commodity. 2013 ohio state tax form See chapter 6 for information on the basis of assets. 2013 ohio state tax form If you later repay the loan, redeem the pledged commodity, and sell it, you report as income at the time of sale the sale proceeds minus your basis in the commodity. 2013 ohio state tax form If the sale proceeds are less than your basis in the commodity, you can report the difference as a loss on Schedule F. 2013 ohio state tax form If you forfeit the pledged crops to the CCC in full payment of the loan, the forfeiture is treated for tax purposes as a sale of the crops. 2013 ohio state tax form If you did not report the loan proceeds as income for the year you received them, you must include them in your income for the year of the forfeiture. 2013 ohio state tax form Form 1099-A. 2013 ohio state tax form   If you forfeit pledged crops to the CCC in full payment of a loan, you may receive a Form 1099-A, Acquisition or Abandonment of Secured Property. 2013 ohio state tax form “CCC” should be shown in box 6. 2013 ohio state tax form The amount of any CCC loan outstanding when you forfeited your commodity should also be indicated on the form. 2013 ohio state tax form Market Gain Under the CCC nonrecourse marketing assistance loan program, your repayment amount for a loan secured by your pledge of an eligible commodity is generally based on the lower of the loan rate or the prevailing world market price for the commodity on the date of repayment. 2013 ohio state tax form If you repay the loan when the world price is lower, the difference between that repayment amount and the original loan amount is market gain. 2013 ohio state tax form Whether you use cash or CCC certificates to repay the loan, you will receive a Form 1099-G showing the market gain you realized. 2013 ohio state tax form Market gain should be reported as follows. 2013 ohio state tax form If you elected to include the CCC loan in income in the year you received it, do not include the market gain in income. 2013 ohio state tax form However, adjust the basis of the commodity for the amount of the market gain. 2013 ohio state tax form If you did not include the CCC loan in income in the year received, include the market gain in your income. 2013 ohio state tax form The following examples show how to report market gain. 2013 ohio state tax form Example 1. 2013 ohio state tax form Mike Green is a cotton farmer. 2013 ohio state tax form He uses the cash method of accounting and files his tax return on a calendar year basis. 2013 ohio state tax form He has deducted all expenses incurred in producing the cotton and has a zero basis in the commodity. 2013 ohio state tax form In 2012, Mike pledged 1,000 pounds of cotton as collateral for a CCC loan of $2,000 (a loan rate of $2. 2013 ohio state tax form 00 per pound). 2013 ohio state tax form In 2013, he repaid the loan and redeemed the cotton for $1,500 when the world price was $1. 2013 ohio state tax form 50 per pound (lower than the loan amount). 2013 ohio state tax form Later in 2013, he sold the cotton for $2,500. 2013 ohio state tax form The market gain on the redemption was $. 2013 ohio state tax form 50 ($2. 2013 ohio state tax form 00 – $1. 2013 ohio state tax form 50) per pound. 2013 ohio state tax form Mike realized total market gain of $500 ($. 2013 ohio state tax form 50 x 1,000 pounds). 2013 ohio state tax form How he reports this market gain and figures his gain or loss from the sale of the cotton depends on whether he included CCC loans in income in 2012. 2013 ohio state tax form Included CCC loan. 2013 ohio state tax form   Mike reported the $2,000 CCC loan as income for 2012 on Schedule F, line 1b, so he is treated as if he sold the cotton for $2,000 when he pledged it and repurchased the cotton for $1,500 when he redeemed it. 2013 ohio state tax form The $500 market gain is not recognized on the redemption. 2013 ohio state tax form He reports it for 2013 as an agricultural program payment on Schedule F, line 4a, but does not include it as a taxable amount on line 4b. 2013 ohio state tax form   Mike's basis in the cotton after he redeemed it was $1,500, which is the redemption (repurchase) price paid for the cotton. 2013 ohio state tax form His gain from the sale is $1,000 ($2,500 – $1,500). 2013 ohio state tax form He reports the $1,000 gain as income for 2013 on Schedule F, line 1b. 2013 ohio state tax form Excluded CCC loan. 2013 ohio state tax form   Mike has income of $500 from market gain in 2013. 2013 ohio state tax form He reports it on Schedule F, lines 4a and 4b. 2013 ohio state tax form His basis in the cotton is zero, so his gain from its sale is $2,500. 2013 ohio state tax form He reports the $2,500 gain as income for 2013 on Schedule F, line 1b. 2013 ohio state tax form Example 2. 2013 ohio state tax form The facts are the same as in Example 1 except that, instead of selling the cotton for $2,500 after redeeming it, Mike entered into an option-to-purchase contract with a cotton buyer before redeeming the cotton. 2013 ohio state tax form Under that contract, Mike authorized the cotton buyer to pay the CCC loan on Mike's behalf. 2013 ohio state tax form In 2013, the cotton buyer repaid the loan for $1,500 and immediately exercised his option, buying the cotton for $1,500. 2013 ohio state tax form How Mike reports the $500 market gain on the redemption of the cotton and figures his gain or loss from its sale depends on whether he included CCC loans in income in 2012. 2013 ohio state tax form Included CCC loan. 2013 ohio state tax form   As in Example 1, Mike is treated as though he sold the cotton for $2,000 when he pledged it and repurchased the cotton for $1,500 when the cotton buyer redeemed it for him. 2013 ohio state tax form The $500 market gain is not recognized on the redemption. 2013 ohio state tax form Mike reports it for 2013 as an agricultural program payment on Schedule F, line 4a, but does not include it as a taxable amount on line 4b. 2013 ohio state tax form   Also, as in Example 1, Mike's basis in the cotton when the cotton buyer redeemed it for him was $1,500. 2013 ohio state tax form Mike has no gain or loss on its sale to the cotton buyer for that amount. 2013 ohio state tax form Excluded CCC loan. 2013 ohio state tax form   As in Example 1, Mike has income of $500 from market gain in 2013. 2013 ohio state tax form He reports it on Schedule F, lines 4a and 4b. 2013 ohio state tax form His basis in the cotton is zero, so his gain from its sale is $1,500. 2013 ohio state tax form He reports the $1,500 gain as income for 2013 on Schedule F, line 1b. 2013 ohio state tax form Conservation Reserve Program (CRP) Under the Conservation Reserve Program (CRP), if you own or operate highly erodible or other specified cropland, you may enter into a long-term contract with the USDA, agreeing to convert to a less intensive use of that cropland. 2013 ohio state tax form You must include the annual rental payments and any one-time incentive payment you receive under the program on Schedule F, lines 4a and 4b. 2013 ohio state tax form Cost-share payments you receive may qualify for the cost-sharing exclusion. 2013 ohio state tax form See Cost-Sharing Exclusion (Improvements) , later. 2013 ohio state tax form CRP payments are reported to you on Form 1099-G. 2013 ohio state tax form Individuals who are receiving Social Security retirement or disability benefits may exclude CRP payments when calculating self-employment tax. 2013 ohio state tax form See the instructions for Schedule SE (Form 1040). 2013 ohio state tax form Crop Insurance and Crop Disaster Payments You must include in income any crop insurance proceeds you receive as the result of physical crop damage or reduction of crop revenue, or both. 2013 ohio state tax form You generally include them in the year you receive them. 2013 ohio state tax form Treat as crop insurance proceeds the crop disaster payments you receive from the federal government as the result of destruction or damage to crops, or the inability to plant crops, because of drought, flood, or any other natural disaster. 2013 ohio state tax form You can request income tax withholding from crop disaster payments you receive from the federal government. 2013 ohio state tax form Use Form W-4V, Voluntary Withholding Request. 2013 ohio state tax form See chapter 16 for information about ordering the form. 2013 ohio state tax form Election to postpone reporting until the following year. 2013 ohio state tax form   You can postpone reporting some or all crop insurance proceeds as income until the year following the year the physical damage occurred if you meet all the following conditions. 2013 ohio state tax form You use the cash method of accounting. 2013 ohio state tax form You receive the crop insurance proceeds in the same tax year the crops are damaged. 2013 ohio state tax form You can show that under your normal business practice you would have included income from the damaged crops in any tax year following the year the damage occurred. 2013 ohio state tax form   Deferral is not permitted for proceeds received from revenue insurance policies. 2013 ohio state tax form   To postpone reporting some or all crop insurance proceeds received in 2013, report the amount you received on Schedule F, line 6a, but do not include it as a taxable amount on line 6b. 2013 ohio state tax form Check the box on line 8c and attach a statement to your tax return. 2013 ohio state tax form The statement must include your name and address and contain the following information. 2013 ohio state tax form A statement that you are making an election under IRC section 451(d) and Regulations section 1. 2013 ohio state tax form 451-6. 2013 ohio state tax form The specific crop or crops physically destroyed or damaged. 2013 ohio state tax form A statement that under your normal business practice you would have included income from some or all of the destroyed or damaged crops in gross income for a tax year following the year the crops were destroyed or damaged. 2013 ohio state tax form The cause of the physical destruction or damage and the date or dates it occurred. 2013 ohio state tax form The total payments you received from insurance carriers, itemized for each specific crop, and the date you received each payment. 2013 ohio state tax form The name of each insurance carrier from whom you received payments. 2013 ohio state tax form   One election covers all crops representing a single trade or business. 2013 ohio state tax form If you have more than one farming business, make a separate election for each one. 2013 ohio state tax form For example, if you operate two separate farms on which you grow different crops and you keep separate books for each farm, you should make two separate elections to postpone reporting insurance proceeds you receive for crops grown on each of your farms. 2013 ohio state tax form   An election is binding for the year unless the IRS approves your request to change it. 2013 ohio state tax form To request IRS approval to change your election, write to the IRS at the following address giving your name, address, identification number, the year you made the election, and your reasons for wanting to change it. 2013 ohio state tax form Ogden Submission Processing Center P. 2013 ohio state tax form O. 2013 ohio state tax form Box 9941 Ogden, UT 84409 Feed Assistance and Payments The Disaster Assistance Act of 1988 authorizes programs to provide feed assistance, reimbursement payments, and other benefits to qualifying livestock producers if the Secretary of Agriculture determines that, because of a natural disaster, a livestock emergency exists. 2013 ohio state tax form These programs include partial reimbursement for the cost of purchased feed and for certain transportation expenses. 2013 ohio state tax form They also include the donation or sale at a below-market price of feed owned by the Commodity Credit Corporation. 2013 ohio state tax form Include in income: The market value of donated feed, The difference between the market value and the price you paid for feed you buy at below-market prices, and Any cost reimbursement you receive. 2013 ohio state tax form You must include these benefits in income in the year you receive them. 2013 ohio state tax form You cannot postpone reporting them under the rules explained earlier for weather-related sales of livestock or crop insurance proceeds. 2013 ohio state tax form Report the benefits on Schedule F, Part I, as agricultural program payments. 2013 ohio state tax form You can usually take a current deduction for the same amount as a feed expense. 2013 ohio state tax form Cost-Sharing Exclusion (Improvements) You can exclude from your income part or all of a payment you receive under certain federal or state cost-sharing conservation, reclamation, and restoration programs. 2013 ohio state tax form A payment is any economic benefit you get as a result of an improvement. 2013 ohio state tax form However, this exclusion applies only to that part of a payment that meets all three of the following tests. 2013 ohio state tax form It was for a capital expense. 2013 ohio state tax form You cannot exclude any part of a payment for an expense you can deduct in the year you pay or incur it. 2013 ohio state tax form You must include the payment for a deductible expense in income, and you can take any offsetting deduction. 2013 ohio state tax form See chapter 5 for information on deducting soil and water conservation expenses. 2013 ohio state tax form It does not substantially increase your annual income from the property for which it is made. 2013 ohio state tax form An increase in annual income is substantial if it is more than the greater of the following amounts. 2013 ohio state tax form 10% of the average annual income derived from the affected property before receiving the improvement. 2013 ohio state tax form $2. 2013 ohio state tax form 50 times the number of affected acres. 2013 ohio state tax form The Secretary of Agriculture certified that the payment was primarily made for conserving soil and water resources, protecting or restoring the environment, improving forests, or providing a habitat for wildlife. 2013 ohio state tax form Qualifying programs. 2013 ohio state tax form   If the three tests listed above are met, you can exclude part or all of the payments from the following programs. 2013 ohio state tax form The rural clean water program authorized by the Federal Water Pollution Control Act. 2013 ohio state tax form The rural abandoned mine program authorized by the Surface Mining Control and Reclamation Act of 1977. 2013 ohio state tax form The water bank program authorized by the Water Bank Act. 2013 ohio state tax form The emergency conservation measures program authorized by title IV of the Agricultural Credit Act of 1978. 2013 ohio state tax form The agricultural conservation program authorized by the Soil Conservation and Domestic Allotment Act. 2013 ohio state tax form The great plains conservation program authorized by the Soil Conservation and Domestic Policy Act. 2013 ohio state tax form The resource conservation and development program authorized by the Bankhead-Jones Farm Tenant Act and by the Soil Conservation and Domestic Allotment Act. 2013 ohio state tax form Certain small watershed programs, listed later. 2013 ohio state tax form Any program of a state, possession of the United States, a political subdivision of any of these, or of the District of Columbia under which payments are made to individuals primarily for conserving soil, protecting or restoring the environment, improving forests, or providing a habitat for wildlife. 2013 ohio state tax form Several state programs have been approved. 2013 ohio state tax form For information about the status of those programs, contact the state offices of the Farm Service Agency (FSA) and the Natural Resources and Conservation Service (NRCS). 2013 ohio state tax form Small watershed programs. 2013 ohio state tax form   If the three tests listed earlier are met, you can exclude part or all of the payments you receive under the following programs for improvements made in connection with a watershed. 2013 ohio state tax form The programs under the Watershed Protection and Flood Prevention Act. 2013 ohio state tax form The flood prevention projects under the Flood Control Act of 1944. 2013 ohio state tax form The Emergency Watershed Protection Program under the Flood Control Act of 1950. 2013 ohio state tax form Certain programs under the Colorado River Basin Salinity Control Act. 2013 ohio state tax form The Wetlands Reserve Program authorized by the Food Security Act of 1985, the Federal Agriculture Improvement and Reform Act of 1996 and the Farm Security and Rural Investment Act of 2002. 2013 ohio state tax form The Environmental Quality Incentives Program (EQIP) authorized by the Federal Agriculture Improvement and Reform Act of 1996. 2013 ohio state tax form The Wildlife Habitat Incentives Program (WHIP) authorized by the Federal Agriculture Improvement and Reform Act of 1996. 2013 ohio state tax form The Soil and Water Conservation Assistance Program authorized by the Agricultural Risk Protection Act of 2000. 2013 ohio state tax form The Agricultural Management Assistance Program authorized by the Agricultural Risk Protection Act of 2000. 2013 ohio state tax form The Conservation Reserve Program authorized by the Food Security Act of 1985 and the Federal Agriculture Improvement and Reform Act of 1996. 2013 ohio state tax form The Forest Land Enhancement Program authorized under the Farm Security and Rural Investment Act of 2002. 2013 ohio state tax form The Conservation Security Program authorized by the Food Security Act of 1985. 2013 ohio state tax form The Forest Health Protection Program (FHPP) authorized by the Cooperative Forestry Assistance Act of 1978. 2013 ohio state tax form Income realized. 2013 ohio state tax form   The gross income you realize upon getting an improvement under these cost-sharing programs is the value of the improvement reduced by the sum of the excludable portion and your share of the cost of the improvement (if any). 2013 ohio state tax form Value of the improvement. 2013 ohio state tax form   You determine the value of the improvement by multiplying its fair market value (defined in chapter 6) by a fraction. 2013 ohio state tax form The numerator of the fraction is the total cost of the improvement (all amounts paid either by you or by the government for the improvement) reduced by the sum of the following items. 2013 ohio state tax form Any government payments under a program not listed earlier. 2013 ohio state tax form Any part of a government payment under a program listed earlier that the Secretary of Agriculture has not certified as primarily for conservation. 2013 ohio state tax form Any government payment to you for rent or for your services. 2013 ohio state tax form The denominator of the fraction is the total cost of the improvement. 2013 ohio state tax form Excludable portion. 2013 ohio state tax form   The excludable portion is the present fair market value of the right to receive annual income from the affected acreage of the greater of the following amounts. 2013 ohio state tax form 10% of the prior average annual income from the affected acreage. 2013 ohio state tax form The prior average annual income is the average of the gross receipts from the affected acreage for the last 3 tax years before the tax year in which you started to install the improvement. 2013 ohio state tax form $2. 2013 ohio state tax form 50 times the number of affected acres. 2013 ohio state tax form The calculation of present fair market value of the right to receive annual income is too complex to discuss in this publication. 2013 ohio state tax form You may need to consult your tax advisor for assistance. 2013 ohio state tax form Example. 2013 ohio state tax form One hundred acres of your land was reclaimed under a rural abandoned mine program contract with the Natural Resources Conservation Service of the USDA. 2013 ohio state tax form The total cost of the improvement was $500,000. 2013 ohio state tax form The USDA paid $490,000. 2013 ohio state tax form You paid $10,000. 2013 ohio state tax form The value of the cost-sharing improvement is $15,000. 2013 ohio state tax form The present fair market value of the right to receive the annual income described in (1) above is $1,380, and the present fair market value of the right to receive the annual income described in (2) is $1,550. 2013 ohio state tax form The excludable portion is the greater amount, $1,550. 2013 ohio state tax form You figure the amount to include in gross income as follows: Value of cost-sharing improvement $15,000 Minus: Your share $10,000     Excludable portion 1,550 11,550 Amount included in income $ 3,450 Effects of the exclusion. 2013 ohio state tax form   When you figure the basis of property you acquire or improve using cost-sharing payments excluded from income, subtract the excluded payments from your capital costs. 2013 ohio state tax form Any payment excluded from income is not part of your basis. 2013 ohio state tax form In the example above, the increase in basis is $500,000 – $490,000 + $3,450 = $13,450. 2013 ohio state tax form   In addition, you cannot take depreciation, amortization, or depletion deductions for the part of the cost of the property for which you receive cost-sharing payments you exclude from income. 2013 ohio state tax form How to report the exclusion. 2013 ohio state tax form   Attach a statement to your tax return (or amended return) for the tax year you receive the last government payment for the improvement. 2013 ohio state tax form The statement must include the following information. 2013 ohio state tax form The dollar amount of the cost funded by the government payment. 2013 ohio state tax form The value of the improvement. 2013 ohio state tax form The amount you are excluding. 2013 ohio state tax form   Report the total cost-sharing payments you receive on Schedule F, line 4a, and the taxable amount on line 4b. 2013 ohio state tax form Recapture. 2013 ohio state tax form   If you dispose of the property within 20 years after you received the excluded payments, you must treat as ordinary income part or all of the cost-sharing payments you excluded. 2013 ohio state tax form In the above example, if the 100 acres were sold within 20 years of the exclusion for a gain of $2,000, $1,550 of that amount would be included in ordinary income. 2013 ohio state tax form You must report the recapture on Form 4797. 2013 ohio state tax form See Section 1255 property under Other Gains in chapter 9. 2013 ohio state tax form Electing not to exclude payments. 2013 ohio state tax form   You can elect not to exclude all or part of any payments you receive under these programs. 2013 ohio state tax form If you make this election for all of these payments, none of the above restrictions and rules apply. 2013 ohio state tax form You must make this election by the due date, including extensions, for filing your return. 2013 ohio state tax form In the example above, an election not to exclude payments results in $5,000 included in income and a $15,000 increase in basis. 2013 ohio state tax form 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). 2013 ohio state tax form Write “Filed pursuant to section 301. 2013 ohio state tax form 9100-2” at the top of the amended return and file it at the same address you filed the original return. 2013 ohio state tax form Payments Under the Farm Security and Rural Investment Act of 2002 and Under the Food, Conservation, and Energy Act of 2008 The Farm Security and Rural Investment Act of 2002 created two new types of payments—direct and counter-cyclical payments. 2013 ohio state tax form You must include these payments on Schedule F, lines 4a and 4b. 2013 ohio state tax form The Food, Conservation, and Energy Act of 2008 provides for direct and counter-cyclical payments (DCP) as well as Average Crop Revenue Election (ACRE) payments. 2013 ohio state tax form You must include these payments on Schedule F, lines 6a and 6b. 2013 ohio state tax form The American Taxpayer Relief Act of 2012, enacted on January 2, 2013, amends the Food, Conservation, and Energy Act of 2008 and provided a one-year extension for these payments. 2013 ohio state tax form Tobacco Quota Buyout Program Payments The Fair and Equitable Tobacco Reform Act of 2004, title VI of the American Jobs Creation Act of 2004, terminated the tobacco marketing quota program and the tobacco price support program. 2013 ohio state tax form As a result, the USDA offered to enter into contracts with eligible tobacco quota holders and growers to provide compensation for the lost value of the quotas and related price support. 2013 ohio state tax form If you are an eligible tobacco quota holder, your contract entitles you to receive total payments of $7 per pound of quota in 10 equal annual payments in fiscal years 2005 through 2014. 2013 ohio state tax form If you are an eligible tobacco grower, your contract entitles you to receive total payments of up to $3 per pound of quota in 10 equal annual payments in fiscal years 2005 through 2014. 2013 ohio state tax form Tobacco Quota Holders Contract payments you receive are considered proceeds from a sale of your tobacco quota as of the date on which you and the USDA enter into the contract. 2013 ohio state tax form Your taxable gain or loss is the total amount received for your quota reduced by any amount treated as interest (discussed below), over your adjusted basis. 2013 ohio state tax form The gain or loss is capital or ordinary depending on how you used the quota. 2013 ohio state tax form See Capital or ordinary gain or loss , later. 2013 ohio state tax form Report the entire gain on your income tax return for the tax year that includes the date you entered into the contract if you elect not to use the installment method. 2013 ohio state tax form Adjusted basis. 2013 ohio state tax form   The adjusted basis of your quota is determined differently depending on how you obtained the quota. 2013 ohio state tax form The basis of a quota derived from an original grant by the federal government is zero. 2013 ohio state tax form The basis of a purchased quota is the purchase price. 2013 ohio state tax form The basis of a quota received as a gift is generally the same as the donor's basis. 2013 ohio state tax form However, under certain circumstances, the basis is increased by the amount of gift taxes paid. 2013 ohio state tax form If the basis is greater than the fair market value of the quota at the time of the gift, the basis for determining loss is the fair market value. 2013 ohio state tax form The basis of an inherited quota is generally the fair market value of the quota at the time of the decedent's death. 2013 ohio state tax form Reduction of basis. 2013 ohio state tax form   You are required to reduce the basis of your tobacco quota by the following amounts. 2013 ohio state tax form Deductions you took for amortization, depletion, or depreciation. 2013 ohio state tax form Amounts you previously deducted as a loss because of a reduction in the number of pounds of tobacco allowable under the quota. 2013 ohio state tax form The entire cost of a purchased quota you deducted in an earlier year (which reduces your basis to zero). 2013 ohio state tax form Amount treated as interest. 2013 ohio state tax form   You must reduce your tobacco quota buyout program payment by the amount treated as interest. 2013 ohio state tax form The interest is reportable as ordinary income. 2013 ohio state tax form If payments total $3,000 or less, your total quota buyout program payment does not include any amount treated as interest and you are not required to reduce the total payment you receive. 2013 ohio state tax form   In all other cases, a portion of each payment may be treated as interest for federal tax purposes. 2013 ohio state tax form You may be required to reduce your total quota buyout program payment before you calculate your gain or loss. 2013 ohio state tax form For more information, see Notice 2005-57, 2005-32 I. 2013 ohio state tax form R. 2013 ohio state tax form B. 2013 ohio state tax form 267, available at www. 2013 ohio state tax form irs. 2013 ohio state tax form gov/irb/2005-32_IRB/ar13. 2013 ohio state tax form html. 2013 ohio state tax form Installment method. 2013 ohio state tax form   You may use the installment method to report a gain if you receive at least one payment after the close of your tax year. 2013 ohio state tax form Under the installment method, a portion of the gain is taken into account in each year in which a payment is received. 2013 ohio state tax form See chapter 10 for more information. 2013 ohio state tax form Capital or ordinary gain or loss. 2013 ohio state tax form   Whether your gain or loss is ordinary or capital depends on how you used the quota. 2013 ohio state tax form Quota used in the trade or business of farming. 2013 ohio state tax form   If you used the quota in the trade or business of farming and you held it for more than one year, you report the transaction as a section 1231 transaction on Form 4797. 2013 ohio state tax form See Section 1231 transactions in the Instructions for Form 4797 for detailed information on reporting section 1231 transactions. 2013 ohio state tax form Quota held for investment. 2013 ohio state tax form   If you held the quota for investment purposes, any gain or loss is capital gain or loss. 2013 ohio state tax form The same result also applies if you held the quota for the production of income, though not connected with a trade or business. 2013 ohio state tax form Gain treated as ordinary income. 2013 ohio state tax form   If you previously deducted any of the following items, some or all of the capital gain must be recharacterized and reported as ordinary income. 2013 ohio state tax form Any resulting capital gain is taxed as ordinary income up to the amount previously deducted. 2013 ohio state tax form The cost of acquiring a quota. 2013 ohio state tax form Amounts for amortization, depletion, or depreciation. 2013 ohio state tax form Amounts to reflect a reduction in the quota pounds. 2013 ohio state tax form   You should include the ordinary income on your return for the tax year even if you use the installment method to report the remainder of the gain. 2013 ohio state tax form Self-employment income. 2013 ohio state tax form   The tobacco quota buyout payments are not self-employment income. 2013 ohio state tax form Income averaging for farmers. 2013 ohio state tax form   The gain or loss resulting from the quota payments does not qualify for income averaging. 2013 ohio state tax form A tobacco quota is considered an interest in land. 2013 ohio state tax form Income averaging is not available for gain or loss arising from the sale or other disposition of land. 2013 ohio state tax form Involuntary conversion. 2013 ohio state tax form   The buyout of the tobacco quota is not an involuntary conversion. 2013 ohio state tax form Form 1099-S. 2013 ohio state tax form   A tobacco quota is considered an interest in land, so the USDA will generally report the total amount you receive under a contract on Form 1099-S, Proceeds From Real Estate Transactions, if the amount is $600 or more. 2013 ohio state tax form The USDA will generally report any portion of a payment treated as interest of $600 or more to you on Form 1099-INT, Interest Income, for the year in which the payment is made. 2013 ohio state tax form Like-kind exchange of quota. 2013 ohio state tax form   You may postpone reporting the gain or loss from tobacco quota buyout payments by entering into a like-kind exchange if you comply with the requirements of section 1031 and the regulations thereunder. 2013 ohio state tax form See Notice 2005-57 for more information. 2013 ohio state tax form Tobacco Growers Contract payments you receive are determined by reference to the amount of quota under which you produced (or planted) quota tobacco during the 2002, 2003, and 2004 tobacco marketing years and are prorated based on the number of years that you produced (or planted) quota tobacco during those years. 2013 ohio state tax form Taxation of payments to tobacco growers. 2013 ohio state tax form   Payments to growers replace ordinary income that would have been earned had the tobacco marketing quota and price support programs continued. 2013 ohio state tax form Individuals will generally report the payments as an Agricultural program payment on Schedule F. 2013 ohio state tax form If you are a landowner who does not materially participate in the operation or management of the farm and are receiving the grower payment because your farm rental income is based on the tobacco grown by a tenant, the grower payment should be reported on Form 4835. 2013 ohio state tax form Self-employment income. 2013 ohio state tax form   Payments to growers generally represent self-employment income. 2013 ohio state tax form If the grower is an individual carrying on a trade or business and deriving income (other than farm rental income properly reported on Form 4835) from that trade or business, the payments are net earnings from self-employment. 2013 ohio state tax form Income averaging for farmers. 2013 ohio state tax form   Payments to growers who are individuals qualify for farm income averaging. 2013 ohio state tax form Form 1099-G. 2013 ohio state tax form   If the amount received in a taxable year is $600 or more, the amount will generally be reported by the USDA on a Form 1099-G. 2013 ohio state tax form Other Payments You must include most other government program payments in income. 2013 ohio state tax form Fertilizer and Lime Include in income the value of fertilizer or lime you receive under a government program. 2013 ohio state tax form How to claim the offsetting deduction is explained under Fertilizer and Lime in chapter 4. 2013 ohio state tax form Improvements If government payments are based on improvements, such as a pollution control facility, you must include them in income. 2013 ohio state tax form You must also capitalize the full cost of the improvement. 2013 ohio state tax form Since you have included the payments in income, they do not reduce your basis. 2013 ohio state tax form However, see Cost-Sharing Exclusion (Improvements) , earlier, for additional information. 2013 ohio state tax form National Tobacco Growers' Settlement Trust Fund Payments If you are a producer, landowner, or tobacco quota owner who receives money from the National Tobacco Growers' Settlement Trust Fund, you must report those payments as income. 2013 ohio state tax form You should receive a Form 1099-MISC, Miscellaneous Income, that shows the payment amount. 2013 ohio state tax form If you produce a tobacco crop, report the payments as income from farming on your Schedule F. 2013 ohio state tax form If you are a landowner or tobacco quota owner who leases tobacco-related property but you do not produce the crop, report the payments as farm rental income on Form 4835. 2013 ohio state tax form Payment to More Than One Person The USDA reports program payments to the IRS. 2013 ohio state tax form It reports a program payment intended for more than one person as having been paid to the person whose identification number is on record for that payment (payee of record). 2013 ohio state tax form If you, as the payee of record, receive a program payment belonging to someone else, such as your landlord, the amount belonging to the other person is a nominee distribution. 2013 ohio state tax form You should file Form 1099-G to report the identity of the actual recipient to the IRS. 2013 ohio state tax form You should also give this information to the recipient. 2013 ohio state tax form You can avoid the inconvenience of unnecessary inquiries about the identity of the recipient if you file this form. 2013 ohio state tax form Report the total amount reported to you as the payee of record on Schedule F, line 4a or 6a. 2013 ohio state tax form However, do not report as a taxable amount on line 4b or 6b any amount belonging to someone else. 2013 ohio state tax form See chapter 16 for information about ordering Form 1099-G. 2013 ohio state tax form Income From Cooperatives If you buy farm supplies through a cooperative, you may receive income from the cooperative in the form of patronage dividends (refunds). 2013 ohio state tax form If you sell your farm products through a cooperative, you may receive either patronage dividends or a per-unit retain certificate, explained later, from the cooperative. 2013 ohio state tax form Form 1099-PATR. 2013 ohio state tax form   The cooperative will report the income to you on Form 1099-PATR or a similar form and send a copy to the IRS. 2013 ohio state tax form Form 1099-PATR may also show an alternative minimum tax adjustment that you must include on Form 6251, Alternative Minimum Tax—Individuals, if you are required to file the form. 2013 ohio state tax form For information on the alternative minimum tax, see the Instructions for Form 6251. 2013 ohio state tax form Patronage Dividends You generally report patronage dividends as income on Schedule F, lines 3a and 3b, for the tax year you receive them. 2013 ohio state tax form They include the following items. 2013 ohio state tax form Money paid as a patronage dividend, including cash advances received (for example, from a marketing cooperative). 2013 ohio state tax form The stated dollar value of qualified written notices of allocation. 2013 ohio state tax form The fair market value of other property. 2013 ohio state tax form Do not report as income on line 3b any patronage dividends you receive from expenditures that were not deductible, such as buying personal or family items, capital assets, or depreciable property. 2013 ohio state tax form You must reduce the cost or other basis of these items by the amount of such patronage dividends received. 2013 ohio state tax form Personal items include fuel purchased for personal use, basic local telephone service, and personal long distance calls. 2013 ohio state tax form If you cannot determine what the dividend is for, report it as income on lines 3a and 3b. 2013 ohio state tax form Qualified written notice of allocation. 2013 ohio state tax form   If you receive a qualified written notice of allocation as part of a patronage dividend, you must generally include its stated dollar value in your income on Schedule F, lines 3a and 3b, in the year you receive it. 2013 ohio state tax form A written notice of allocation is qualified if at least 20% of the patronage dividend is paid in money or by qualified check and either of the following conditions is met. 2013 ohio state tax form The notice must be redeemable in cash for at least 90 days after it is issued, and you must have received a written notice of your right of redemption at the same time as the written notice of allocation. 2013 ohio state tax form You must have agreed to include the stated dollar value in income in the year you receive the notice by doing one of the following. 2013 ohio state tax form Signing and giving a written agreement to the cooperative. 2013 ohio state tax form Getting or keeping membership in the cooperative after it adopted a bylaw providing that membership constitutes agreement. 2013 ohio state tax form The cooperative must notify you in writing of this bylaw and give you a copy. 2013 ohio state tax form Endorsing and cashing a qualified check paid as part of the same patronage dividend. 2013 ohio state tax form You must cash the check by the 90th day after the close of the payment period for the cooperative's tax year for which the patronage dividend was paid. 2013 ohio state tax form Qualified check. 2013 ohio state tax form   A qualified check is any instrument that is redeemable in money and meets both of the following requirements. 2013 ohio state tax form It is part of a patronage dividend that also includes a qualified written notice of allocation for which you met condition 2(c), above. 2013 ohio state tax form It is imprinted with a statement that endorsing and cashing it constitutes the payee's consent to include in income the stated dollar value of any written notices of allocation paid as part of the same patronage dividend. 2013 ohio state tax form Loss on redemption. 2013 ohio state tax form   You can deduct on Schedule F, Part II, any loss incurred on the redemption of a qualified written notice of allocation you received in the ordinary course of your farming business. 2013 ohio state tax form The loss is the difference between the stated dollar amount of the qualified written notice you included in income and the amount you received when you redeemed it. 2013 ohio state tax form Nonqualified notice of allocation. 2013 ohio state tax form   Do not include the stated dollar value of any nonqualified notice of allocation in income when you receive it. 2013 ohio state tax form Your basis in the notice is zero. 2013 ohio state tax form You must include in income for the tax year of disposition any amount you receive from its sale, redemption, or other disposition. 2013 ohio state tax form Report that amount, up to the stated dollar value of the notice, on Schedule F, lines 3a and 3b. 2013 ohio state tax form However, do not include that amount in your income if the notice resulted from buying or selling capital assets or depreciable property or from buying personal items, as explained in the following discussions. 2013 ohio state tax form   If the amount you receive is more than the stated dollar value of the notice, report the excess as the type of income it represents. 2013 ohio state tax form For example, if it represents interest income, report it on your return as interest. 2013 ohio state tax form Buying or selling capital assets or depreciable property. 2013 ohio state tax form   Do not include in income patronage dividends from buying capital assets or depreciable property used in your business. 2013 ohio state tax form You must, however, reduce the basis of these assets by the dividends. 2013 ohio state tax form This reduction is taken into account as of the first day of the tax year in which the dividends are received. 2013 ohio state tax form If the dividends are more than your unrecovered basis, reduce the unrecovered basis to zero and include the difference on Schedule F, line 3a, for the tax year you receive them. 2013 ohio state tax form   This rule and the exceptions explained below also apply to amounts you receive from the sale, redemption, or other disposition of a nonqualified notice of allocation that resulted from buying or selling capital assets or depreciable property. 2013 ohio state tax form Example. 2013 ohio state tax form On July 1, 2012, Mr. 2013 ohio state tax form Brown, a patron of a cooperative association, bought a machine for his dairy farm business from the association for $2,900. 2013 ohio state tax form The machine has a life of 7 years under MACRS (as provided in the Table of Class Lives and Recovery Periods in Appendix B of Publication 946, Depreciation and Amortization). 2013 ohio state tax form Mr. 2013 ohio state tax form Brown files his return on a calendar year basis. 2013 ohio state tax form For 2012, he claimed a depreciation deduction of $311, using the 10. 2013 ohio state tax form 71% depreciation rate from the 150% declining balance, half-year convention table (shown in Table A-14 in Appendix A of Publication 946). 2013 ohio state tax form On July 2, 2013, the cooperative association paid Mr. 2013 ohio state tax form Brown a $300 cash patronage dividend for buying the machine. 2013 ohio state tax form Mr. 2013 ohio state tax form Brown adjusts the basis of the machine and figures his depreciation deduction for 2013 (and later years) as follows. 2013 ohio state tax form Cost of machine on July 1, 2012 $2,900 Minus: 2012 depreciation $311     2013 cash dividend 300 611 Adjusted basis for  depreciation for 2013: $2,289 Depreciation rate: 1 ÷ 6½ (remaining recovery period as of 1/1/2012) = 15. 2013 ohio state tax form 38% × 1. 2013 ohio state tax form 5 = 23. 2013 ohio state tax form 07% Depreciation deduction for 2013 ($2,289 × 23. 2013 ohio state tax form 07%) $528 Exceptions. 2013 ohio state tax form   If the dividends are for buying or selling capital assets or depreciable property you did not own at any time during the year you received the dividends, you must include them on Schedule F, lines 3a and 3b, unless one of the following rules applies. 2013 ohio state tax form If the dividends relate to a capital asset you held for more than 1 year for which a loss was or would have been deductible, treat them as gain from the sale or exchange of a capital asset held for more than 1 year. 2013 ohio state tax form If the dividends relate to a capital asset for which a loss was not or would not have been deductible, do not report them as income (ordinary or capital gain). 2013 ohio state tax form   If the dividends are for selling capital assets or depreciable property during the year you received the dividends, treat them as an additional amount received on the sale. 2013 ohio state tax form Personal purchases. 2013 ohio state tax form   Because you cannot deduct the cost of personal, living, or family items, such as supplies, equipment, or services not related to the production of farm income, you can omit from the taxable amount of patronage dividends on Schedule F, line 3b, any dividends from buying those items (and you must reduce the cost or other basis of those items by the amount of the dividends). 2013 ohio state tax form This rule also applies to amounts you receive from the sale, redemption, or other disposition of a nonqualified written notice of allocation resulting from these purchases. 2013 ohio state tax form Per-Unit Retain Certificates A per-unit retain certificate is any written notice that shows the stated dollar amount of a per-unit retain allocation made to you by the cooperative. 2013 ohio state tax form A per-unit retain allocation is an amount paid to patrons for products sold for them that is fixed without regard to the net earnings of the cooperative. 2013 ohio state tax form These allocations can be paid in money, other property, or qualified certificates. 2013 ohio state tax form Per-unit retain certificates issued by a cooperative generally receive the same tax treatment as patronage dividends, discussed earlier. 2013 ohio state tax form Qualified certificates. 2013 ohio state tax form   Qualified per-unit retain certificates are those issued to patrons who have agreed to include the stated dollar amount of these certificates in income in the year of receipt. 2013 ohio state tax form The agreement may be made in writing or by getting or keeping membership in a cooperative whose bylaws or charter states that membership constitutes agreement. 2013 ohio state tax form If you receive qualified per-unit retain certificates, include the stated dollar amount of the certificates in income on Schedule F, lines 3a and 3b, for the tax year you receive them. 2013 ohio state tax form Nonqualified certificates. 2013 ohio state tax form   Do not include the stated dollar value of a nonqualified per-unit retain certificate in income when you receive it. 2013 ohio state tax form Your basis in the certificate is zero. 2013 ohio state tax form You must include in income any amount you receive from its sale, redemption, or other disposition. 2013 ohio state tax form Report the amount you receive from the disposition as ordinary income on Schedule F, lines 3a and 3b, for the tax year of disposition. 2013 ohio state tax form Cancellation of Debt This section explains the general rule for including canceled debt in income and the exceptions to the general rule. 2013 ohio state tax form For more information on canceled debt, see Publication 4681, Canceled Debts, Foreclosures, Repossessions, and Abandonments. 2013 ohio state tax form General Rule Generally, if your debt is canceled or forgiven, other than as a gift or bequest to you, you must include the canceled amount in gross income for tax purposes. 2013 ohio state tax form Discharge of qualified farm indebtedness (defined below) is one of the exceptions to the general rule. 2013 ohio state tax form It is excluded from taxable income (see Exclusions , later). 2013 ohio state tax form Report the canceled amount on Schedule F, line 8, if you incurred the debt in your farming business. 2013 ohio state tax form If the debt is a nonbusiness debt, report the canceled amount as other income on Form 1040, line 21. 2013 ohio state tax form Election to defer income from discharge of indebtedness. 2013 ohio state tax form   You can elect to defer income from a discharge of business indebtedness that occurred after 2008 and before 2011. 2013 ohio state tax form Generally, if the election is made, the deferred income is included in gross income ratably over a 5-year period beginning in 2014 (for calendar year taxpayers) and the exclusions listed below do not apply. 2013 ohio state tax form See IRC section 108(i) and Publication 4681 for details. 2013 ohio state tax form Form 1099-C. 2013 ohio state tax form   If a federal agency, financial institution, credit union, finance company, or credit card company cancels or forgives your debt of $600 or more, you will receive a Form 1099-C, Cancellation of Debt. 2013 ohio state tax form The amount of debt canceled is shown in box 2. 2013 ohio state tax form Exceptions The following discussion covers some exceptions to the general rule for canceled debt. 2013 ohio state tax form These exceptions apply before the exclusions discussed below. 2013 ohio state tax form Price reduced after purchase. 2013 ohio state tax form   If your purchase of property was financed by the seller and the seller reduces the amount of the debt at a time when you are not insolvent and the reduction does not occur in a chapter 11 bankruptcy case, the amount of the debt reduction will be treated as a reduction in the purchase price of the property. 2013 ohio state tax form Reduce your basis in the property by the amount of the reduction in the debt. 2013 ohio state tax form The rules that apply to bankruptcy and insolvency are explained below under Exclusions . 2013 ohio state tax form Deductible debt. 2013 ohio state tax form   You do not realize income from a canceled debt to the extent the payment of the debt would have been a deductible expense. 2013 ohio state tax form This exception applies before the price reduction exception discussed above and the bankruptcy and insolvency exclusions discussed next. 2013 ohio state tax form Example. 2013 ohio state tax form You get accounting services for your farm on credit. 2013 ohio state tax form Later, you have trouble paying your farm debts, but you are not bankrupt or insolvent. 2013 ohio state tax form Your accountant forgives part of the amount you owe for the accounting services. 2013 ohio state tax form How you treat the canceled debt depends on your method of accounting. 2013 ohio state tax form Cash method — You do not include the canceled debt in income because payment of the debt would have been deductible as a business expense. 2013 ohio state tax form Accrual method — You include the canceled debt in income because the expense was deductible when you incurred the debt. 2013 ohio state tax form Exclusions Do not include canceled debt in income in the following situations. 2013 ohio state tax form The cancellation takes place in a bankruptcy case under title 11 of the U. 2013 ohio state tax form S. 2013 ohio state tax form Code. 2013 ohio state tax form The cancellation takes place when you are insolvent. 2013 ohio state tax form The canceled debt is a qualified farm debt. 2013 ohio state tax form The canceled debt is a qualified real property business debt (in the case of a taxpayer other than a C corporation). 2013 ohio state tax form See Publication 334, Tax Guide for Small Business, chapter 5. 2013 ohio state tax form The canceled debt is qualified principal residence indebtedness which is discharged after 2006 and before 2014. 2013 ohio state tax form The exclusions do not apply in the following situations: If a canceled debt is excluded from income because it takes place in a bankruptcy case, the exclusions in situations (2), (3), (4), and (5) do not apply. 2013 ohio state tax form If a canceled debt is excluded from income because it takes place when you are insolvent, the exclusions in situations (3) and (4) do not apply to the extent you are insolvent. 2013 ohio state tax form If a canceled debt is excluded from income because it is qualified principal residence indebtedness, the exclusion in situation (2) does not apply unless you elect to apply situation (2) instead of the exclusion for qualified principal residence indebtedness. 2013 ohio state tax form See Form 982 , later, for information on how to claim an exclusion for a canceled debt. 2013 ohio state tax form Debt. 2013 ohio state tax form   For this discussion, debt includes any debt for which you are liable or that attaches to property you hold. 2013 ohio state tax form Bankruptcy and Insolvency You can exclude a canceled debt from income if you are bankrupt or to the extent you are insolvent. 2013 ohio state tax form Bankruptcy. 2013 ohio state tax form   A bankruptcy case is a case under title 11 of the U. 2013 ohio state tax form S. 2013 ohio state tax form Code if you are under the jurisdiction of the court and the cancellation of the debt is granted by the court or is the result of a plan approved by the court. 2013 ohio state tax form   Do not include debt canceled in a bankruptcy case in your income in the year it is canceled. 2013 ohio state tax form Instead, you must use the amount canceled to reduce your tax attributes, explained below under Reduction of tax attributes . 2013 ohio state tax form Insolvency. 2013 ohio state tax form   You are insolvent to the extent your liabilities are more than the fair market value of your assets immediately before the cancellation of debt. 2013 ohio state tax form   You can exclude canceled debt from gross income up to the amount by which you are insolvent. 2013 ohio state tax form If the canceled debt is more than this amount and the debt qualifies, you can apply the rules for qualified farm debt or qualified real property business debt to the difference. 2013 ohio state tax form Otherwise, you include the difference in gross income. 2013 ohio state tax form Use the amount excluded because of insolvency to reduce any tax attributes, as explained below under Reduction of tax attributes . 2013 ohio state tax form You must reduce the tax attributes under the insolvency rules before applying the rules for qualified farm debt or for qualified real property business debt. 2013 ohio state tax form Example. 2013 ohio state tax form You had a $15,000 debt that was not qualified principal residence debt canceled outside of bankruptcy. 2013 ohio state tax form Immediately before the cancellation, your liabilities totaled $80,000 and your assets totaled $75,000. 2013 ohio state tax form Since your liabilities were more than your assets, you were insolvent to the extent of $5,000 ($80,000 − $75,000). 2013 ohio state tax form You can exclude this amount from income. 2013 ohio state tax form The remaining canceled debt ($10,000) may be subject to the qualified farm debt or qualified real property business debt rules. 2013 ohio state tax form If not, you must include it in income. 2013 ohio state tax form Reduction of tax attributes. 2013 ohio state tax form   If you exclude canceled debt from income in a bankruptcy case or during insolvency, you must use the excluded debt to reduce certain tax attributes. 2013 ohio state tax form Order of reduction. 2013 ohio state tax form   You must use the excluded canceled debt to reduce the following tax attributes in the order listed unless you elect to reduce the basis of depreciable property first, as explained later. 2013 ohio state tax form Net operating loss (NOL). 2013 ohio state tax form Reduce any NOL for the tax year of the debt cancellation, and then any NOL carryover to that year. 2013 ohio state tax form Reduce the NOL or NOL carryover one dollar for each dollar of excluded canceled debt. 2013 ohio state tax form General business credit carryover. 2013 ohio state tax form Reduce the credit carryover to or from the tax year of the debt cancellation. 2013 ohio state tax form Reduce the carryover 331/3 cents for each dollar of excluded canceled debt. 2013 ohio state tax form Minimum tax credit. 2013 ohio state tax form Reduce the minimum tax credit available at the beginning of the tax year following the tax year of the debt cancellation. 2013 ohio state tax form Reduce the credit 331/3 cents for each dollar of excluded canceled debt. 2013 ohio state tax form Capital loss. 2013 ohio state tax form Reduce any net capital loss for the tax year of the debt cancellation, and then any capital loss carryover to that year. 2013 ohio state tax form Reduce the capital loss or loss carryover one dollar for each dollar of excluded canceled debt. 2013 ohio state tax form Basis. 2013 ohio state tax form Reduce the basis of the property you hold at the beginning of the tax year following the tax year of the debt cancellation in the following order. 2013 ohio state tax form Real property (except inventory) used in your trade or business or held for investment that secured the canceled debt. 2013 ohio state tax form Personal property (except inventory and accounts and notes receivable) used in your trade or business or held for investment that secured the canceled debt. 2013 ohio state tax form Other property (except inventory and accounts and notes receivable) used in your trade or business or held for investment. 2013 ohio state tax form Inventory and accounts and notes receivable. 2013 ohio state tax form Other property. 2013 ohio state tax form Reduce the basis one dollar for each dollar of excluded canceled debt. 2013 ohio state tax form However, the reduction cannot be more than the total basis of property and the amount of money you hold immediately after the debt cancellation minus your total liabilities immediately after the cancellation. 2013 ohio state tax form For allocation rules that apply to basis reductions for multiple canceled debts, see Regulations section 1. 2013 ohio state tax form 1017-1(b)(2). 2013 ohio state tax form Also see Electing to reduce the basis of depreciable property