TABLE OF CONTENTS SECTION D ELECTION AND COMPUTATION FORMS

Transcription

1 TABLE OF CONTENTS SECTION D ELECTION AND COMPUTATION FORMS The election forms which are included in the Tax Manual have been bolded for reference purposes. The remaining election forms have been updated and can be accessed (in fillable form) at the online library maintained on the Iowa State Bar Association website [ and the Taxation Section webpage. These materials should be available in mid/late December, NOTE: To locate fillable forms, go to homepage of website, click on Tax Manual link or Visit the Taxation Section webpage. Page Annualized Income Calculation -- Individual 443(b) (Fed). 40 Annuities -- Exchange of Annuity Contract (a)(3).. 67 Auto Vehicle -- Election to Adopt Lease Valuation Rule -- IRC Reg (d)(7)... 1 Bankruptcy -- Short Year Election (Chapter 7) (d)(2) Bankruptcy -- Short Year Election (Chapter 11 ) (d)(2) Business Start-Up Expense Amortization CCC Loans Reported Under Election (Form 1040, Sch. F) 3 CCC Loans - Automatic Change from Cash Method to Loan Reporting (Form 3115/Attachment) Charitable Contribution Acknowledgement (f)(8) Charitable Contributions Treated as Paid in Preceding Tax Year (c) (Form 1041) Corporation -- Organizational Expense Amortization Corporate Stock Ordinary Loss Statement Corporate Stock (c)(2)(A)(iii) Post-Redemption Stock Acquisition Corporate Transferors Statement Corporate Transferees Statement Crop (Hail/Drought, etc.) Insurance Deferral (d) Depreciation Additional First Year Election Out/All Classes IRC 168(K)(2)(D)(iii) Depreciation Additional First Year Election Out/ Class-by-Class IRC 168(K)(2)(D)(iii)... 12

2 Page Depreciation -- Eligibility Computation (b)(3) (Individual) Depreciation -- Eligibility Computation (b)(3) (Partnership) Depreciation -- Eligibility Computation (b)(3) ("S" Corporation) Estate Distributions -- Election to Treat as Made in Prior Year (b) Estimated Tax Qualified Farmer Determination (i).. 81 Federal Estate Tax Deduction Waiver (Administrative Expenses) (g) Fiduciary Income Tax -- Form 1041, Prior Yr. Decedent's 1040 Filings (a)(1) Grouping of Activities Reg (c) Rental Real Estate Grain Storage Facility Hog Breeding Grain Ethanol Facility Income in Respect of Decedent (Federal Estate Tax Deduction Computation) (c) Individual Income Tax -- Prior Year Form 1040 Filings 6012(a)(1) Individual Retirement Account Rollover (c) Involuntary Conversion (Deferral of Gain on Personal Residence) (a)(2) Involuntary Conversion (Deferral of Gain on Personal Residence - Federally Declared Disasters) (h) Involuntary Conversion (Deferral of Gain on Business Assets) (a)(2)(A) Life Insurance -- Exchange of Policy/Contract (a). 66 Livestock (Drought, Flood or Weather-Related Conditions Deferral of Sale Proceeds (e) Mark-to-Market Election (Trader in Securities) Medical Expense Deduction Election (c) Net Operating Loss Calculation (1998 and After - General) Net Operating Loss Calculation (1998 and After - Farm) Net Operating Loss Calculation (Fiduciary) Net Operating Loss Calculation (Form Sch. A)

3 Page Net Operating Loss Carryover Election -- (General -- 2 yr.) (b)(3) Net Operating Loss Carryover Election (Farm - 5 yr.) (i)(3) Net Operating Loss Carryover Election (Farm - 5 yr./2 yr.) (i)(3)&(b)(3) Net Operating Loss Carryover/Carryback (b)(2) Net Operating Loss Carryover (Form Sch. B) (b)(2) Net Operating Loss Computation Worksheets Net Operating Loss Carryover Computation Worksheets (Itemized Deductions) (b)(2) Partnership - Organizational Expense Amortization - 709(b) 57 Partnership - Transferee Partner Basis Adjustment Partnership - Basis Adjustment Partnership -- Exclusion from Subchapter K (a) Pension and Annuity Income Worksheet -- 72(d)(1)... 2 Reacquisition of Real Property Residence Sale -- Business/Personal Allocation "S" Corporation -- Trust Eligibility (QSST) (d)(2) 71 S Corporation - Deemed Dividend Election ( C Corporation Retained Earnings) (e)(3) S Corporation - Dividend Election ( C Corporation Retained Earnings) (e)(3) "S" Corporation Revocation (d) "S" Corporation -- Election Re: Specific Accounting Rules in Connection with Termination of a Shareholder's Entire Interest (a)(2) Social Security Benefits (Single/Head of Household) -- 86(a)&(c)... 9 Social Security Benefits (Married Filing Jointly) -- 86(a)&(c) Statutory Employee (d)(3) Trust Distributions -- Election to Treat as Made in Prior Year (b) U.S. Series E Bond Election (Decedent's Final) (a). 46 U.S. Series E Bond Election (Individual) (a)... 45

4 Form 1040 SSN: ELECTION RE: ADOPTION OF LEASE VALUATION TABLES FOR EMPLOYEE USAGE OF VEHICLES PURSUANT TO IRC REG (d)(7) The undersigned hereby adopts the lease valuation tables set forth in IRC Reg (d)(2)(iii) for purposes of valuing the benefit derived from use of vehicles by non-owner employees. The election is being made on the first day upon which the vehicle identified below is being made available to said employee for personal use. DESCRIPTION OF VEHICLE CURRENT VALUE It is understood that the employer will utilize the vehicle lease valuation rules and tables specified by IRC Reg (d)(2)(iii) for the vehicle identified above for all subsequent years in which said vehicle is utilized by any employee for personal use. Dated this day of, 201., Employer D-1

5 SIMPLIFIED ANNUITY/PENSION BASIS RECOVERY COMPUTATION (IRC 72(d)(1)) Worksheet A. Simplified Method 1. Enter the total pension or annuity payments received this year. Also, add this amount to the total for Form 1040, line 16a; Form 1040A, line 12a; or Form 1040NR, line 17a Enter your cost in the plan (contract) at the annuity starting date plus any death benefit exclusion. See Cost (Investment in the Contract) earlier Note: If your annuity starting date was before this year and you completed this worksheet last year, skip line 3 and enter the amount from line 4 of last year s worksheet on line 4 below (even if the amount of your pension or annuity has changed). Otherwise, go to line Enter the appropriate number from Table 1 below. But if your annuity starting date was after 1997 and the payments are for your life and that of your beneficiary, enter the appropriate number from Table 2 below Divide line 2 by the number on line Multiply line 4 by the number of months for which this year s payments were made. If your annuity starting date was before 1987, enter this amount on line 8 below and skip lines 6, 7, 10, and 11. Otherwise, go to line Enter any amounts previously recovered tax free in years after This is the amount shown on line 10 of your worksheet for last year Subtract line 6 from line Enter the smaller of line 5 or line Taxable amount for year. Subtract line 8 from line 1. Enter the result, but not less than zero. Also, add this amount to the total for Form 1040, line 16b; Form 1040A, line 12b; or Form 1040NR, line 17b. Note: If your Form 1099-R shows a larger taxable amount, use the amount figured on this line instead. If you are a retired public safety officer, see Insurance Premiums for Retired Public Safety Officers earlier before entering an amount on your tax return Was your annuity starting date before 1987? M Yes. STOP. Do not complete the rest of this worksheet. M No. Add lines 6 and 8. This is the amount you have recovered tax free through You will need this number if you need to fill out this worksheet next year Balance of cost to be recovered. Subtract line 10 from line 2. If zero, you will not have to complete this worksheet next year. The payments you receive next year will generally be fully taxable A death benefit exclusion (up to 5,000) applied to certain benefits received by employees who died before August 21, Table 1 for Line 3 Above IF the age at annuity starting date was..... AND your annuity starting date was BEFORE November 19, 1996, AFTER November 18, 1996, enter on line enter on line or under or over Table 2 for Line 3 Above IF the combined ages at annuity starting date were THEN enter on line or under or over Publication 575 (2010) D

6 Schedule F, Line 5a Form 4835, Line 4a SSN/TIN: CCC LOANS REPORTED UNDER ELECTION -- IRC 77 Date Received Loan # What Sealed Amount Received Bushels Sealed TOTAL: D-3

7 Form 3115 FILED UNDER REV. PROC Application for Change in Accounting Method (Rev. December 2009) Department of the Treasury Internal Revenue Service OMB No Identification number (see instructions) Name of filer (name of parent corporation if a consolidated group) (see instructions) Principal business activity code number (see instructions) Number, street, and room or suite no. If a P.O. box, see the instructions. Tax year of change begins (MM/DD/YYYY) 01/01/11 12/31/11 Tax year of change ends (MM/DD/YYYY) City or town, state, and ZIP code Name of contact person (see instructions) Name of applicant(s) (if different than filer) and identification number(s) (see instructions) Contact person s telephone number If the applicant is a member of a consolidated group, check this box If Form 2848, Power of Attorney and Declaration of Representative, is attached (see instructions for when Form 2848 is required), check this box Check the box to indicate the type of applicant. Check the appropriate box to indicate the type Individual of accounting method change being requested. Cooperative (Sec. 1381) (see instructions) Corporation Partnership S corporation Depreciation or Amortization Controlled foreign corporation (Sec. 957) Insurance co. (Sec. 816(a)) Financial Products and/or Financial Activities of Financial Institutions 10/50 corporation (Sec. 904(d)(2)(E)) Insurance co. (Sec. 831) Other (specify) Other (specify) IRC 77 Election Qualified personal service corporation (Sec. 448(d)(2)) Exempt organization. Enter Code section Caution. To be eligible for approval of the requested change in method of accounting, the taxpayer must provide all information that is relevant to the taxpayer or to the taxpayer's requested change in method of accounting. This includes all information requested on this Form 3115 (including its instructions), as well as any other information that is not specifically requested. The taxpayer must attach all applicable supplemental statements requested throughout this form. Part I 1 Information For Automatic Change Request Enter the applicable designated automatic accounting method change number for the requested automatic change. Enter only one designated automatic accounting method change number, except as provided for in guidance published by the IRS. If the requested change has no designated automatic accounting method change number, check "Other," and provide both a description of the change and citation of the IRS guidance providing the automatic change. See instructions. Yes No 1 (b) Other (a) Change No. Description IRC 77 Election Do any of the scope limitations described in section 4.02 of Rev. Proc cause automatic consent to be unavailable for the applicant's requested change? If "Yes," attach an explanation Note. Complete Part II below and then Part IV, and also Schedules A through E of this form (if applicable). 2 Part II 3 4a Information For All Requests Yes No Did or will the applicant cease to engage in the trade or business to which the requested change relates, or terminate its existence, in the tax year of change (see instructions)? If Yes, the applicant is not eligible to make the change under automatic change request procedures. Does the applicant (or any present or former consolidated group in which the applicant was a member during the applicable tax year(s)) have any Federal income tax return(s) under examination (see instructions)?..... If No, go to line 5. b Is the method of accounting the applicant is requesting to change an issue (with respect to either the applicant or any present or former consolidated group in which the applicant was a member during the applicable tax year(s)) either (i) under consideration or (ii) placed in suspense (see instructions)? Signature (see instructions) Under penalties of perjury, I declare that I have examined this application, including accompanying schedules and statements, and to the best of my knowledge and belief, the application contains all the relevant facts relating to the application, and it is true, correct, and complete. Declaration of preparer (other than applicant) is based on all information of which preparer has any knowledge. Filer Preparer (other than filer/applicant) Signature and date Signature of individual preparing the application and date Name and title (print or type) Name of individual preparing the application (print or type) Name of firm preparing the application For Privacy Act and Paperwork Reduction Act Notice, see the instructions. D-4 Cat. No E Form 3115 (Rev )

8 Form 3115 (Rev ) Part II Page Information For All Requests (continued) 2 Yes No 4c Is the method of accounting the applicant is requesting to change an issue pending (with respect to either the applicant or any present or former consolidated group in which the applicant was a member during the applicable tax year(s)) for any tax year under examination (see instructions)? d Is the request to change the method of accounting being filed under the procedures requiring that the operating division director consent to the filing of the request (see instructions)? If Yes, attach the consent statement from the director. e Is the request to change the method of accounting being filed under the 90-day or 120-day window period?.. If Yes, check the box for the applicable window period and attach the required statement (see instructions). 90 day 120 day: Date examination ended f If you answered Yes to line 4a, enter the name and telephone number of the examining agent and the tax year(s) under examination. Name Tax year(s) Telephone number g Has a copy of this Form 3115 been provided to the examining agent identified on line 4f? a Does the applicant (or any present or former consolidated group in which the applicant was a member during the applicable tax year(s)) have any Federal income tax return(s) before Appeals and/or a Federal court?.... Appeals officer and/or counsel for the government, If Yes, enter the name of the (check the box) telephone number, and the tax year(s) before Appeals and/or a Federal court. Name Tax year(s) Telephone number SIMPLIFIED ANNUITY/PENSION BASIS RECOVERY COMPUTATION (IRC 72(d)(1)) b Has a copy of this Form 3115 been provided to the Appeals officer and/or counsel for the government identified on line 5a? c Is the method of accounting the applicant is requesting to change an issue under consideration by Appeals and/or a Federal court (for either the applicant or any present or former consolidated group in which the applicant was a member for the tax year(s) the applicant was a member) (see instructions)? If Yes, attach an explanation. If the applicant answered Yes to line 4a and/or 5a with respect to any present or former consolidated group, 6 attach a statement that provides each parent corporation s (a) name, (b) identification number, (c) address, and (d) tax year(s) during which the applicant was a member that is under examination, before an Appeals office, and/or before a Federal court. SIMPLIFIED ANNUITY/PENSION BASIS RECOVERY COMPUTATION (IRC 72(d)(1)) 7 If, for federal income tax purposes, the applicant is either an entity (including a limited liability company) treated as a partnership or an S corporation, is it requesting a change from a method of accounting that is an issue under consideration in an examination, before Appeals, or before a Federal court, with respect to a Federal income tax return of a partner, member, or shareholder of that entity? If Yes, the applicant is not eligible to make the change. 8a Does the applicable revenue procedure (advance consent or automatic consent) state that the applicant does not receive audit protection for the requested change (see instructions)? b If Yes, attach an explanation. 9a Has the applicant, its predecessor, or a related party requested or made (under either an automatic change procedure or a procedure requiring advance consent) a change in method of accounting within the past 5 years (including the year of the requested change)? b If "Yes," for each trade or business, attach a description of each requested change in method of accounting (including the tax year of change) and state whether the applicant received consent. c If any application was withdrawn, not perfected, or denied, or if a Consent Agreement granting a change was not signed and returned to the IRS, or the change was not made or not made in the requested year of change, attach an explanation. 10a Does the applicant, its predecessor, or a related party currently have pending any request (including any concurrently filed request) for a private letter ruling, change in method of accounting, or technical advice?... b If Yes, for each request attach a statement providing the name(s) of the taxpayer, identification number(s), the type of request (private letter ruling, change in method of accounting, or technical advice), and the specific issue(s) in the request(s). 11 Is the applicant requesting to change its overall method of accounting? If Yes, check the appropriate boxes below to indicate the applicant s present and proposed methods of accounting. Also, complete Schedule A on page 4 of this form. Present method: Cash Accrual Hybrid (attach description) Proposed method: Cash Accrual Hybrid (attach description) Form D SIMPLIFIED ANNUITY/PENSION BASIS RECOVERY COMPUTATION (IRC 72(d)(1)) (Rev )

9 Form 3115 (Rev ) Part II Page Information For All Requests (continued) 12 If the applicant is either (i) not changing its overall method of accounting, or (ii) is changing its overall method of accounting and also changing to a special method of accounting for one or more items, attach a detailed and complete description for each of the following: a The item(s) being changed. b The applicant s present method for the item(s) being changed. c The applicant s proposed method for the item(s) being changed. d The applicant s present overall method of accounting (cash, accrual, or hybrid). 13 Attach a detailed and complete description of the applicant s trade(s) or business(es), and the principal business activity code for each. If the applicant has more than one trade or business as defined in Regulations section (d), describe: whether each trade or business is accounted for separately; the goods and services provided by each trade or business and any other types of activities engaged in that generate gross income; the overall method of accounting for each trade or business; and which trade or business is requesting to change its accounting method as part of this application or a separate application. (Grain farming ) Will the proposed method of accounting be used for the applicant s books and records and financial statements? For insurance companies, see the instructions (see.. attached) If No, attach an explanation a Has the applicant engaged, or will it engage, in a transaction to which section 381(a) applies (e.g., a reorganization, merger, or liquidation) during the proposed tax year of change determined without regard to any potential closing of the year under section 381(b)(1)? b If Yes, for the items of income and expense that are the subject of this application, attach a statement identifying the methods of accounting used by the parties to the section 381(a) transaction immediately before the date of distribution or transfer and the method(s) that would be required by section 381(c)(4) or (c)(5) absent consent to the change(s) requested in this application. Does the applicant request a conference with the IRS National Office if the IRS proposes an adverse response? If the applicant is changing to either the overall cash method, an overall accrual method, or is changing its method of accounting for any property subject to section 263A, any long-term contract subject to section 460, or inventories subject to section 474, enter the applicant's gross receipts for the 3 tax years preceding the tax year of change. N/A 1st preceding year ended: mo. yr. Part III 18 3 Yes No 2nd preceding year ended: mo. yr. 3rd preceding year ended: mo. yr. Information For Advance Consent Request Yes No Is the applicant s requested change described in any revenue procedure, revenue ruling, notice, regulation, or other published guidance as an automatic change request? If Yes, attach an explanation describing why the applicant is submitting its request under advance consent request procedures. Attach a full explanation of the legal basis supporting the proposed method for the item being changed. Include a detailed and complete description of the facts that explains how the law specifically applies to the applicant s situation and that demonstrates that the applicant is authorized to use the proposed method. Include all authority (statutes, regulations, published rulings, court cases, etc.) supporting the proposed method. Also, include either a discussion of the contrary authorities or a statement that no contrary authority exists. 20 Attach a copy of all documents related to the proposed change (see instructions). 21 Attach a statement of the applicant s reasons for the proposed change. 22 If the applicant is a member of a consolidated group for the year of change, do all other members of the consolidated group use the proposed method of accounting for the item being changed? If No, attach an explanation. None (automatic change) 23a Enter the amount of user fee attached to this application (see instructions). b If the applicant qualifies for a reduced user fee, attach the required information or certification (see instructions). 19 Part IV Section 481(a) Adjustment N/A Yes No Does the applicable revenue procedure, revenue ruling, notice, regulation, or other published guidance require the applicant to implement the requested change in method of accounting on a cut-off basis rather than a section 481(a) adjustment?... If Yes, do not complete lines 25, 26, and 27 below. Enter the section 481(a) adjustment. Indicate whether the adjustment is an increase (+) or a decrease (-) in income. Attach a summary of the computation and an explanation of the methodology used to determine the section 481(a) adjustment. If it is based on more than one component, show the computation for each component. If more than one applicant is applying for the method change on the same application, attach a list of the name, identification number, principal business activity code (see instructions), and the amount of the section 481(a) adjustment attributable to each applicant. D-6 Form 3115 (Rev )

10 Form 3115 (Rev ) Part IV 26 Page Section 481(a) Adjustment (continued) 4 Yes No If the section 481(a) adjustment is an increase to income of less than 25,000, does the applicant elect to take the entire amount of the adjustment into account in the year of change? Is any part of the section 481(a) adjustment attributable to transactions between members of an affiliated group, a consolidated group, a controlled group, or other related parties? If Yes, attach an explanation. 27 Schedule A Change in Overall Method of Accounting (If Schedule A applies, Part I below must be completed.) Part I 1 Change in Overall Method (see instructions) Enter the following amounts as of the close of the tax year preceding the year of change. If none, state None. Also, attach a statement providing a breakdown of the amounts entered on lines 1a through 1g. Amount a Income accrued but not received (such as accounts receivable) b Income received or reported before it was earned (such as advanced payments). Attach a description of the income and the legal basis for the proposed method c Expenses accrued but not paid (such as accounts payable) d Prepaid expenses previously deducted e Supplies on hand previously deducted and/or not previously reported f Inventory on hand previously deducted and/or not previously reported. Complete Schedule D, Part II. g Other amounts (specify). Attach a description of the item and the legal basis for its inclusion in the calculation of the section 481(a) adjustment. h Net section 481(a) adjustment (Combine lines 1a 1g.) Indicate whether the adjustment is an increase (+) or decrease (-) in income. Also enter the net amount of this section 481(a) adjustment amount on Part IV, line Yes No Is the applicant also requesting the recurring item exception under section 461(h)(3)? Attach copies of the profit and loss statement (Schedule F (Form 1040) for farmers) and the balance sheet, if applicable, as of the close of the tax year preceding the year of change. Also attach a statement specifying the accounting method used when preparing the balance sheet. If books of account are not kept, attach a copy of the business schedules submitted with the Federal income tax return or other return (e.g., tax-exempt organization returns) for that period. If the amounts in Part I, lines 1a through 1g, do not agree with those shown on both the profit and loss statement and the balance sheet, attach a statement explaining the differences. Part II Change to the Cash Method For Advance Consent Request (see instructions) Applicants requesting a change to the cash method must attach the following information: 1 A description of inventory items (items whose production, purchase, or sale is an income-producing factor) and materials and supplies used in carrying out the business. An explanation as to whether the applicant is required to use the accrual method under any section of the Code or regulations. 2 Schedule B Change to the Deferral Method for Advance Payments (see instructions) 1 If the applicant is requesting to change to the Deferral Method for advance payments described in section 5.02 of Rev. Proc , C.B. 991, attach the following information: a A statement explaining how the advance payments meet the definition in section 4.01 of Rev. Proc b If the applicant is filing under the automatic change procedures of Rev. Proc , the information required by section 8.02(3)(a)-(c) of Rev. Proc c If the applicant is filing under the advance consent provisions of Rev. Proc , the information required by section 8.03(2)(a)-(f) of Rev. Proc If the applicant is requesting to change to the deferral method for advance payments described in Regulations section (b)(1)(ii), attach the following. A statement explaining how the advance payments meet the definition in Regulations section (a)(1). a b A statement explaining what portions of the advance payments, if any, are attributable to services, whether such services are integral to the provisions of goods or items, and whether any portions of the advance payments that are attributable to non-integral services are less than five percent of the total contract prices. See Regulations sections (a)(2)(i) and (3). c A statement explaining that the advance payments will be included in income no later than when included in gross receipts for purposes of the applicant's financial reports. See Regulations section (b)(1)(ii). d A statement explaining whether the inventoriable goods exception of Regulations section (c) applies and if so, when substantial advance payments will be received under the contracts, and how the exception will limit the deferral of income. Form D (Rev )

11 Form 3115 SSN/TIN: ADDITIONAL INFORMATION - APPLICATION FOR CHANGE IN ACCOUNTING METHOD CHANGE IN REPORTING CCC LOANS UNDER IRC 77 (Authorized by Rev. Proc , Appendix Section 2.01) Part II - Question 12: (a) (b) (c) (d) IRC 77 method for reporting Commodity Credit Corporation loans. Income method under prior IRC 77 election. Loan method. Cash. Part II - Question 14: (a) (b) The loan method for reporting CCC loans will be used for the taxpayer s books and records. The loan method for reporting CCC loans conforms to GAAP and to the best accounting practice for farmers. Part III - Question 18: Rev. Proc , Appendix Section 2.01, permits a taxpayer to automatically change from the income method of reporting CCC loans under IRC 77 to the loan method. Part III - Question 19 & 21: The Applicant is accomplishing this change under the automatic consent provisions of Rev. Proc , Appendix Section This will accomplish a change in reporting CCC loans from the income method to the loan method. Reporting CCC loan proceeds as loans rather than as income in the year of receipt of the loan proceeds allows the taxpayer greater flexibility in utilizing CCC loans in conjunction with other USDA farm programs. Part IV - Question 24: No Section 481(a) adjustment is required; per Rev. Proc , Section 2.06, this change is accomplished on a cutoff basis with no adjustment required. ADDITIONAL DOCUMENTATION ATTACHED: See attached Form 2848, Power of Attorney and Declaration of Representative. D-8

12 SOCIAL SECURITY BENEFITS: GROSS INCOME INCLUSION (IRC 86(a) & (c)) SINGLE, HEAD OF HOUSEHOLD AND MARRIED FILING SEPARTELY AND LIVED APART FROM SPOUSE FOR ENTIRE YEAR 1. Determine Provisional Income: ADJUSTED GROSS INCOME ADD: Tax-exempt interest/dividends Exclusion for foreign earned income; U.S. possession source income; and Puerto-Rican source income. MODIFIED ADJUSTED GROSS INCOME ADD: One-half of social security benefits received PROVISIONAL INCOME (if 25,000, STOP, no social security benefits are includible in gross income) 2. Is provisional income greater than 34,000? If YES, complete balance of worksheet If NO, determine gross income inclusion using only Step 3 3. Determine includible benefits under 50% rules: PROVISIONAL INCOME LESS: BASE AMOUNT EXCESS TIMES: 50% TENTATIVE GROSS INCOME INCLUSION (25,000) x 50% (A) SOCIAL SECURITY BENEFITS TIMES: 50% TENTATIVE GROSS INCOME INCLUSION X 50% (B) Includible benefits under 50% rules [Lesser of (A) or (B)] NOTE: IF PROVISIONAL INCOME IS LESS THAN 34,000, STOP HERE. STEP 3. COMPUTATION EQUALS GROSS INCOME INCLUSION. 4. Compute 50% of difference in base amounts [(34,000-25,000) X 50%] 4, Lesser of 3. or Determine includible benefits under the 85% rules: PROVISIONAL INCOME LESS: BASE AMOUNT EXCESS TIMES: 85% TENTATIVE GROSS INCOME INCLUSION ( 34,000) X 85% 7. Add Items 5. and Determine maximum includible benefits: SOCIAL SECURITY BENEFITS TIMES: 85% TENTATIVE GROSS INCOME INCLUSION X 85% 9. Gross Income Inclusion (Lesser of 7. or 8.) NOTE: If married filing separtely and lived with your spouse at any time during the year, threshold exemption = -0-. D-9

13 SOCIAL SECURITY BENEFITS: GROSS INCOME INCLUSION (IRC 86(a) & (c)) MARRIED FILING JOINTLY 1. Determine Provisional Income: ADJUSTED GROSS INCOME ADD: Tax-exempt interest/dividends Exclusion for foreign earned income; U.S. possession source income; and Puerto-Rican source income. MODIFIED ADJUSTED GROSS INCOME ADD: One-half of social security benefits received PROVISIONAL INCOME (if 32,000, STOP, no social security benefits are includible in gross income) 2. Is provisional income greater than 44,000? If YES, complete balance of worksheet If NO, determine gross income inclusion using only Step 3 3. Determine includible benefits under 50% rules: PROVISIONAL INCOME LESS: BASE AMOUNT EXCESS TIMES: 50% TENTATIVE GROSS INCOME INCLUSION (32,000) x 50% (A) SOCIAL SECURITY BENEFITS TIMES: 50% TENTATIVE GROSS INCOME INCLUSION X 50% (B) Includible benefits under 50% rules [Lesser of (A) or (B)] NOTE: IF PROVISIONAL INCOME IS LESS THAN 44,000, STOP HERE. STEP 3. COMPUTATION EQUALS GROSS INCOME INCLUSION. 4. Compute 50% of difference in base amounts [(44,000-32,000) X 50%] 6, Lesser of 3. or Determine includible benefits under the 85% rules: PROVISIONAL INCOME LESS: BASE AMOUNT EXCESS TIMES: 85% TENTATIVE GROSS INCOME INCLUSION (44,000) X 85% 7. Add Items 5. and Determine maximum includible benefits: SOCIAL SECURITY BENEFITS TIMES: 85% TENTATIVE GROSS INCOME INCLUSION X 85% 9. Gross Income Inclusion (Lesser of 7. or 8.) D-10

14 Form 4562 SSN/TIN: ELECTION NOT TO CLAIM ADDITIONAL FIRST YEAR DEPRECIATION (Pursuant to IRC 168(k)(2)(D)(iii)) (Election for All Applicable Recovery Period Classes) BE HEREBY ADVISED, that the taxpayer(s) elect(s) not to claim additional first year depreciation authorized by IRC 168(k) for qualified new ( original use ) property placed in service during the tax year, as follows: The taxpayer(s) hereby elect(s) not to claim the 50% first year additional depreciation for all qualified property in all applicable recovery period classes (3 yr, 5yr., 7 yr., 10 yr., 15 yr. and 20 yr.) BE FURTHER ADVISED that this election out is being made pursuant to IRC 168(k)(2)(D)(iii). The taxpayer(s) understand(s) that this election, once made, shall be irrevocable with respect to all qualified property placed in service during this calendar/fiscal year which is depreciable as part of the above noted applicable class/classes of recovery property. D-11

15 Form 4562 SSN/TIN: ELECTION NOT TO CLAIM ADDITIONAL FIRST YEAR DEPRECIATION (Pursuant to IRC 168(k)(2)(D)(iii)) (Class-by-Class Election) BE HEREBY ADVISED, that the taxpayer(s) elect(s) not to claim additional first year depreciation authorized by IRC 168(k) for certain qualified new ( original use ) property placed in service during the tax year. The taxpayer(s) hereby elect(s) not to claim additional first year additional depreciation on all qualified property in the following applicable recovery period classes: 3 yr. property 5 yr. property 7 yr. property 10 yr. property 15 yr. property 20 yr. property BE FURTHER ADVISED that this election out is being made pursuant to IRC 168(k)(2)(D)(iii). The taxpayer(s) understand(s) that this election, once made, shall be irrevocable with respect to all qualified property placed in service during this calendar/fiscal year which is depreciable as part of the above noted applicable class/classes of recovery property. D-12

16 ACKNOWLEDGMENT OF CHARITABLE CONTRIBUTION PURSUANT TO IRC 170(f)(8) and REG A-13(f) The undersigned charity hereby acknowledges receipt of the contribution(s) listed below from the taxpayer(s) whose name(s) appear below. All contributions were made in cash, unless otherwise denoted; and, the donee organization did not provide any goods or services in consideration for the property given. DONOR CASH AMOUNT GIVEN DATE OF GIFT DESCRIPTION OF PROPERTY (If Required) FMV OF PROPERTY DATE OF GIFT This acknowledgment is given for the purpose of satisfying the requirements of Section 170(f)(8) of the Internal Revenue Code of 1986, as amended. Dated this day of, 201. Charitable Organization By: Officer NOTE: The above Acknowledgement is required for contributions of 250 or more. D-13

17 Form 1040 SSN: NET OPERATING LOSS (NOL) CALCULATION (1998 and after) IN COMPLIANCE WITH INTERNAL REVENUE CODE REG (c) Adjusted Gross Income: Reduce Loss By: 1) NOL carryover or carry-back from another year ) Business capital losses in excess of business capital gains1 (Schedule D) ) Nonbusiness capital losses in excess of nonbusiness capital gains (Schedule D) ) MSA, HSA, IRA, 401(k), SEP, SIMPLE retirement plan deduction, etc.. 5) Alimony paid, interest penalty on early withdrawal, student loan interest deduction, tuition/fees deduction, HSA deduction, etc. Subtotal Increase Loss By: 1) 2) Schedule A casualty/theft losses Schedule A business deductions to extent exceed std. deduction: State income tax (allocate)... Misc. deductions (allocate)... 3) Nonbusiness income (Sch. B int./ div.; Sch. D gross nonbus. gains; alimony; Social Security benefits (taxable portion); retirement plans, pensions, etc.) to extent does not exceed standard deduction plus excess nonbusiness itemized deductions NOL for year2 Include only to extent of capital loss limitation on Schedule D. Usually must separate business and non-business portions. 1 Reduced by extent net nonbusiness capital gains (Schedule D) exceed net "other" nonbusiness deductions (Schedule A, Schedule B, etc.). 2 Carryback 2 years; carryover 20 years; unless election to forego carryback pursuant to Internal Revenue Code 172(b)(3). NOTE 2008 AND 2009 NOLs: Eligible for 2, 3, 4 or 5 year carryback. IRC 172(b)(1)(H). NOTE: Eligible for 5 year carryback if qualified disaster loss from federally declared disaster area after 12/31/07; or an NOL attributable to qualified disaster recovery assistance losses, or eligible storm losses, arising from the 2008 Midwestern disaster area. D-14

18 Form 1040 SSN: NET OPERATING LOSS (NOL) CALCULATION (1998 and after) IN COMPLIANCE WITH INTERNAL REVENUE CODE REG (c) Adjusted Gross Income: Reduce Loss By: 1) NOL carryover or carry-back from another year ) Business capital losses in excess of business capital gains1 (Schedule D) ) Nonbusiness capital losses in excess of nonbusiness capital gains (Schedule D) ) MSA, HSA, IRA, 401(k), SEP, SIMPLE retirement plan deduction, etc.. 5) Alimony paid, interest penalty on early withdrawal, student loan interest deduction, tuition/fees deduction, HSA deduction, etc. Subtotal Increase Loss By: 1) 2) Schedule A casualty/theft losses Schedule A business deductions to extent exceed std. deduction: State income tax (allocate)... Misc. deductions (allocate)... 3) Nonbusiness income (Sch. B int./ div.; Sch. D gross nonbus. gains; alimony; Social Security benefits (taxable portion); retirement plans, pensions, etc.) to extent does not exceed standard deduction plus excess nonbusiness itemized deductions NOL for year2 Farming loss portion of NOL (Schedule F) -- eligible for 5-yr. carryback (cannot exceed NOL for year) Remaining NOL for year -- (eligible for 2-yr. (or 5 yr.) carryback)2 FARMING LOSS (SCHEDULE F): A farming loss is defined as the amount of any NOL attributable to the income and deductions of a farming business as defined in IRC 263A(e)(4). A farming loss cannot exceed the taxpayer s NOL for the taxable year. Include only to extent of capital loss limitation on Schedule D. Usually must separate business and non-business portions. 1 Reduced by extent net nonbusiness capital gains (Schedule D) exceed net "other" nonbusiness deductions (Schedule A, Schedule B, etc.). 2 Carryback 2 years; carryover 20 years; unless election to forego carryback pursuant to Internal Revenue Code 172(b)(3). NOTE 2008 AND 2009 NOLs: Eligible for 2, 3, 4 or 5 year carryback. IRC 172(b)(1)(H). NOTE: Eligible for 5 year carryback if qualified disaster loss from federally declared disaster area after 12/31/07; or an NOL attributable to qualified disaster recovery assistance losses, or eligible storm losses, arising from the 2008 Midwestern disaster area. D-15

19 Page 2 Form 1045 (2011) Schedule A NOL (see instructions) 1 Enter the amount from your 2011 Form 1040, line 41, or Form 1040NR, line 39. Estates and trusts, enter taxable income increased by the total of the charitable deduction, income distribution deduction, and exemption amount Nonbusiness capital losses before limitation. Enter as a positive number Nonbusiness capital gains (without regard to any section 1202 exclusion) If line 2 is more than line 3, enter the difference. Otherwise, enter If line 3 is more than line 2, enter the difference. Otherwise, enter Nonbusiness deductions (see instructions) Nonbusiness income other than capital gains (see instructions) Add lines 5 and If line 6 is more than line 8, enter the difference. Otherwise, enter If line 8 is more than line 6, enter the difference. Otherwise, enter -0-. But do not enter more than line Business capital losses before limitation. Enter as a positive number.. Business capital gains (without regard to any section 1202 exclusion) Add lines 10 and Subtract line 13 from line 11. If zero or less, enter Add lines 4 and f o s a 1 t 1 f 0 a 2 r / D / Section 1202 exclusion. Enter as a positive number Subtract line 17 from line 16. If zero or less, enter Enter the loss, if any, from line 21 of your 2011 Schedule D (Form 1040). (Estates and trusts, enter the loss, if any, from line 16 of Schedule D (Form 1041).) Enter as a positive number If line 18 is more than line 19, enter the difference. Otherwise, enter If line 19 is more than line 18, enter the difference. Otherwise, enter Subtract line 20 from line 15. If zero or less, enter Domestic production activities deduction from your 2011 Form 1040, line 35, or Form 34 (or included on Form 1041, line 15a) line Enter the loss, if any, from line 16 of your 2011 Schedule D (Form 1040). (Estates and trusts, enter the loss, if any, from line 15, column (3), of Schedule D (Form 1041).) Enter as a positive number. If you do not have a loss on that line (and do not have a section 1202 exclusion), skip lines 16 through 21 and enter on line 22 the amount from line NR,... NOL deduction for losses from other years. Enter as a positive number NOL. Combine lines 1, 9, 17, and 21 through 24. If the result is less than zero, enter it here and on page 1, line 1a. If the result is zero or more, you do not have an NOL Form 1045 (2011) D-16

20 NOL Worksheet 1 Allocation of Ordinary Income between Business and Nonbusiness Ordinary Income Location Amount Form 1040 on tax Amount as Item return Disposition Business Line 7 Wages, salary, etc. Business _ Line 8a Taxable interest Nonbusiness xxxxxxxxx Line 8b Tax-exempt interest Nonbusiness1 xxxxxxxxx Line 9 Dividends Nonbusiness xxxxxxxxx Line 10 Taxable refunds Allocate2 _ Line 11 Alimony Nonbusiness xxxxxxxxx Line 12 Business income (loss) Business _ Schedule C Line 14 Form 4797 gains or losses Business _ Line 15b Taxable amount of IRA Nonbusiness xxxxxxxxx distributions Line 16b Taxable amount of pensions Nonbusiness xxxxxxxxx Line 17 Rents, royalties, and Usually _ partnership income business Line 18 Farm income (or loss) Business _ Line 19 Taxable unemployment Business _ Line 20b Taxable social security Nonbusiness xxxxxxxxx benefits Line 21 Other income Allocate _ TOTALS _ 1 Amount as Nonbusiness xxxxxxxxxx xxxxxxxxxx xxxxxxxxxx AMT Nonbusiness xxxxxxxxxx xxxxxxxxxx xxxxxxxxxx xxxxxxxxxx xxxxxxxxxx xxxxxxxxxx xxxxxxxxxx xxxxxxxxxx xxxxxxxxxx xxxxxxxxxx xxxxxxxxxx Nontaxable interest is nonbusiness income for AMT purposes only. The state and local income tax refund is to be allocated between business and nonbusiness income according to the income of the year that created the refund. For this allocation, salaries and wages are treated as business income. State and local income tax refunds are not included when calculating AMT. 2 D-17

21 NOL Worksheet 2 Allocation of Deductions between Business Deductions and Nonbusiness Deductions Location Amount Form 1040 on tax Amount as Item return Disposition Business Line 23 Educator expenses Business _ Amount as Nonbusiness xxxxxxxxxx AMT Nonbusiness xxxxxxxxxx Line 24 Line 25 Line 26 Line 27 Line 28 Reservist/artist expense HSA deduction Moving expenses SE tax (one-half) Keogh, SEP, SIMPLE & 401(k) Line 29 SE health insurance Line 30 Penalty, early withdrawal Line 31 Alimony Line 32 IRA deduction Line 33 Student loan interest Line 34 Tuition/fees Line 35 Domestic Prod. Activities Line 36 Other3 Line 40 Std. deduction (if claimed) Sch. A (Form 1040) (Itemized Deductions, if claimed) Line 4 Medical Line 9 Taxes Line 15 Interest Line 19 Contributions Line 20 Casualty Line 27 Misc. (2% floor) Line 28 Other misc. TOTALS 3 Business Nonbusiness Business Business Nonbusiness _ xxxxxxxxx xxxxxxxxx xxxxxxxxxx xxxxxxxxxx xxxxxxxxxx xxxxxxxxxx xxxxxxxxxx xxxxxxxxxx Business Nonbusiness Nonbusiness Nonbusiness Nonbusiness Nonbusiness Business Allocate Nonbusiness _ xxxxxxxxx xxxxxxxxx xxxxxxxxx xxxxxxxxx xxxxxxxxx xxxxxxxxx xxxxxxxxxx xxxxxxxxxx xxxxxxxxxx xxxxxxxxxx xxxxxxxxxx4 Nonbusiness Allocate6 Nonbusiness Nonbusiness Business Allocate8 Allocate9 xxxxxxxxx _ xxxxxxxxx xxxxxxxxx xxxxxxxxxx 5 xxxxxxxxxx 7 xxxxxxxxxx xxxxxxxxxx Include only other items such as Archer MSA deduction, jury duty pay given to employer, etc. Do not include amounts reported on lines 23 through If the standard deduction was claimed for the regular tax, neither the standard deduction nor the itemized deductions can be claimed for the AMT. 5 The medical deduction floor is 10% of the adjusted gross income for AMT purposes. 6 The state and local income taxes paid are allocated between business and nonbusiness deductions according to the income of the year that created the taxes. For this allocation, salaries and wages are treated as business income. Taxes are not allowed as a deduction when calculating AMT. 7 The alternative minimum tax interest deduction is the same as the regular tax interest deduction except for the following adjustments: (1) if debt on a personal residence has been refinanced, interest on debt in excess of the debt before refinancing cannot be deducted for AMT purposes; and (2) the investment interest deduction must be recalculated to include income from private activity bonds in investment income and the expenses on those bonds in investment expenses. 8 Since the amount on line 27, Schedule A, is reduced by 2% of AGI, the amounts allocated to business and nonbusiness must be reduced on a pro rata basis. Therefore, the amount in the business column should be the amount from line 27, Schedule A, multiplied by the total business miscellaneous deductions subject to the 2% floor and divided by the total miscellaneous deductions subject to the 2% floor. The amount in the nonbusiness column should be the amount from line 27, Schedule A, multiplied by the total nonbusiness deductions subject to the 2% floor and divided by the total miscellaneous deductions subject to the 2% floor. Miscellaneous itemized deductions are not allowed as a deduction when calculating AMT. 9 Deductions allowable for impairment-related work expenses are business deductions. Other deductions reported on line 28, Schedule A, are nonbusiness deductions. D-18

22 Form 1040/Form 1120 SSN/TIN: ELECTION TO RELINQUISH TWO (2) YEAR CARRYBACK PERIOD WITH RESPECT TO NET OPERATING LOSS: PURSUANT TO INTERNAL REVENUE CODE 172(b)(3) BE HEREBY ADVISED, that the taxpayer(s) incurred a net operating loss in the amount of (see attached schedule for computation), for the current taxable year, and is/are entitled to a two (2) year carryback of said loss under the provisions of IRC 172(b)(1)(A). BE FURTHER ADVISED, that pursuant to IRC 172(b)(3) the taxpayer(s) hereby elect(s) to relinquish the two (2) year general carryback period with respect to said net operating loss. The taxpayer(s) understand(s) that this election, once made, shall be irrevocable with respect to this net operating loss. D-19

23 Form 1040/Form 1120 Schedule F SSN/TIN: ELECTION TO RELINQUISH FIVE (5) YEAR CARRYBACK PERIOD WITH RESPECT TO FARM NET OPERATING LOSS: PURSUANT TO INTERNAL REVENUE CODE 172(i)(3) BE HEREBY ADVISED, that the taxpayer(s) incurred a net operating loss from farming operations in the amount of (see attached schedule for computation), for the current taxable year, and is/are entitled to a five (5) year carryback of said loss under the provisions of IRC 172(b)(1)(G). BE FURTHER ADVISED, that pursuant to IRC 172(i)(3) the taxpayer(s) hereby elect(s) to relinquish the five (5) year carryback period with respect to said net operating loss from farming operations. The taxpayer(s) understand(s) that this election, once made, shall be irrevocable with respect to this net operating loss. BE FURTHER ADVISED, that the taxpayer(s) is/are only relinquishing his/her right to a five (5) year carryback of a loss from farming operations. The taxpayer(s) is/are not relinquishing the general two (2) year net operating loss carryback provided by IRC 172(b)(1)(A). D-20

24 Form 1040/Form 1120 Schedule F SSN/TIN: ELECTION TO RELINQUISH BOTH THE FIVE (5) YEAR CARRYBACK AND TWO (2) YEAR CARRYBACK PERIOD WITH RESPECT TO FARM NET OPERATING LOSS: PURSUANT TO INTERNAL REVENUE CODE 172(i)(3) and 172(b)(3) BE HEREBY ADVISED, that the taxpayer(s) incurred a net operating loss from farming operations in the amount of (see attached schedule for computation), for the current taxable year, and is/are entitled to a five (5) year carryback of said loss under the provisions of IRC 172(b)(1)(G). In the alternative, the taxpayers are entitled to a two (2) year carryback of said loss under the provisions of IRC 172(b)(1)(A). BE FURTHER ADVISED, that pursuant to IRC 172(i)(3) and IRC 172(b)(3) the taxpayer(s) hereby elect(s) to relinquish both the five (5) year farming loss carryback and the two (2) year general carryback period with respect to said net operating loss from farming operations. The taxpayer(s) understand(s) that this election, once made, shall be irrevocable with respect to this net operating loss. D-21

25 D-22 (To ) Tax Yr (To ) Tax Yr Tax year Tax year (For use if modified AGI is less than 100,000) SSN: Computation of NOL Carryback/Carryover when NOL is Not Fully Absorbed in Preceding Tax Year(s)--IRC 172(b)(2); Reg (a)(2) & (3) Net Operating Loss: Amount of Carryback/Carryover: Adjusted Gross Inc. (per orig. return): ADD: 1) Capital losses in excess of capital gains (Sch. D)... SUBTOTAL ADD ADJ: 1) Passive Loss (Rental RE)... 2) Tax. Social Security Benefits... 3) IRA Deduction... 4) Excl. Svgs Bond Interest... 5) Student loan int. deduct... 6) Tuition and fees deduction... SUBTOTAL Modified Adjusted Gross Income: LESS: 1) Charit. Contrib. (Adj. to limit deduct. to 50%/30%/20% of original AGI) 2) Medical Expenses (7.5% floor) Misc. Deduct. (2% floor-post 86) Casualty/Theft Loss (10% floor) (Adj. to limit deduct. to reflect change due to modified AGI) 3) Remaining Itemized Deductions or Std. Deduction (If did not itemize) Total1 Recomputed Taxable Income NOL Remaining for Carryover 1 Deduct total itemized deductions without reducing by Std. Deduction. If you do not itemize, deduct Std. Deduction Year of NOL 201 Form 1040

26 NOL WORKSHEET (ITEMIZED DEDUCTIONS) Medical expense deduction: Form Floor is 7.5% of the after-carryback amount on line 11, Contribution deduction limitation (50%, 30% or 20% of AGI): Calculated using the original adjusted gross income from line 11, Form IRC 170(b)(1)(F). Casualty and theft losses: Calculated using the after-carryback amount on line 11, Form 1045 to determine the 10% of adjusted gross income floor. Miscellaneous Deductions: Calculated using the after-carryback amount on line 11, Form 1045 to determine the 2% of adjusted gross income floor. D-23