Instructions For Schedule F - Profit Or Loss From Farming Form 2006 (Page 7 of 7) in pdf

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Cash, property, or borrowed amounts

You are not required to provide the in-

Part III. Farm

used in the activity (or contributed to the

formation requested on a form that is sub-

activity, or used to acquire the activity) that

ject to the Paperwork Reduction Act unless

Income—Accrual

are protected against loss by a guarantee,

the form displays a valid OMB control

stop-loss agreement, or other similar ar-

number. Books or records relating to a form

Method

rangement (excluding casualty insurance

or its instructions must be retained as long

and insurance against tort liability).

as their contents may become material in

If you use an accrual method, report farm

•

the administration of any Internal Revenue

Amounts borrowed for use in the ac-

income when you earn it, not when you

law. Generally, tax returns and return infor-

tivity from a person who has an interest in

receive it. Generally, you must include ani-

mation are confidential, as required by sec-

the activity, other than as a creditor, or who

mals and crops in your inventory if you use

tion 6103.

is related under section 465(b)(3) to a per-

this method. See Pub. 225 for exceptions,

son (other than you) having such an inter-

The time needed to complete and file

inventory methods, how to change methods

est.

this form will vary depending on individual

of accounting, and for rules that require

circumstances. The estimated burden for

Figuring your deductible loss. If all

certain costs to be capitalized or included in

individual taxpayers filing this form is in-

amounts are at risk in this activity, check

inventory.

cluded in the estimates shown in the in-

box 37a. If you checked the “Yes” box on

Chapter 11 bankruptcy.

If you were a

structions for their individual income tax

line E, enter your loss on line 36. But if you

debtor in a chapter 11 bankruptcy case dur-

return. The estimated burden for all other

checked the “No” box on line E, you may

ing 2006, see page 22 of the instructions for

taxpayers who file this form is approved

need to complete Form 8582 to figure your

Form 1040 and page SE-2 of the instruc-

under OMB control numbers 1545-1975

allowable loss to enter on line 36. See the

tions for Schedule SE (Form 1040).

and 1545-1976 and is shown below.

Instructions for Form 8582.

If you checked box 37b, see Form 6198

Recordkeeping . . . . . . . . . 7 hr., 5 min.

to determine the amount of your deductible

Lines 39a Through 41c

loss. If you checked the “Yes” box on line

Learning about the law or

E, enter that amount on line 36. But if you

See the instructions for lines 5a through 7c

the form . . . . . . . . . . . . . . 1 hr., 2 min.

checked the “No” box on line E, your loss

that begin on page F-2.

may be further limited. See the Instructions

Preparing the form . . . . . . 2 hr., 52 min.

for Form 8582. If your at-risk amount is

Copying, assembling, and

zero or less, enter -0- on line 36. Be sure to

sending the form to the IRS

40 min.

Line 44

attach Form 6198 to your return. If you

checked box 37b and you do not attach

If you have comments concerning the

See the instructions for line 10 on page F-3.

Form 6198, the processing of your tax re-

accuracy of these time estimates or sugges-

turn may be delayed.

tions for making this form simpler, we

Paperwork Reduction Act Notice.

We ask

Any loss from this activity not allowed

would be happy to hear from you. See the

for the information on this form to carry out

for 2006 because of the at-risk rules is

instructions for the tax return with which

the Internal Revenue laws of the United

treated as a deduction allocable to the activ-

this form is filed.

States. You are required to give us the in-

ity in 2007.

formation. We need it to ensure that you are

complying with these laws and to allow us

For details, see Pub. 925 and the

to figure and collect the right amount of

Instructions for Form 6198.

tax.

F-7

Instructions For Schedule F - Profit Or Loss From Farming Form 2006 Page 7

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