Instructions For 2005 Form Fia-40 - Farm Income Averaging (Page 3 of 4) in pdf

income from Form 40, line 28 is $1,112. For tax year 2003,

He subtracts the recomputed tax of $1,593 on line 21 from

Kevin’s taxable income from Form 40, line 28 is $14,250.

the recomputed tax of $3,585 on line 17 and enters the result

For tax year 2004, Kevin’s taxable income from Form

of $1,992 on line 22. This is Kevin’s 2005 tax liability from

40, line 28 is $12,777. For tax year 2005, Kevin’s taxable

farm income averaging. He enters this figure on Form 40,

income from Form 40, line 28 is $27,900 and his elected

line 29.

farm income is $24,000. For the tax years above, he has

Example 2. John Farmington did not use farm income av-

no net operating losses, no net operating carryforwards or

er ag ing for 2002, 2003, or 2004. For tax year 2005, John has

carrybacks and no capital losses.

elect ed farm income on Form FIA-40, line 2 of $18,000. His

Or e gon tax able income shown on his 2002 Form 40, line 28,

Kevin income averaged for tax year 2004. Kevin has $12,777

is $6,150.

of taxable income and elected to farm income average

$9,000, leaving Oregon taxable income of $3,777. For 2002,

John had a net operating loss (NOL) for tax year 2003 of

Kevin’s recomputed taxable income after adding one-third

$22,950, which he elected to carryback five years. Of the

of elected farm income from his 2004 Form FIA-40, line 11

$22,950 loss, $9,000 was car ried back to tax year 2002. To

is $4,112. For 2003, Kevin’s recomputed taxable income after

com plete line 1 of the 2002 worksheet, John com bines the

adding one-third of his elected farm income from his 2004

$9,000 net op er at ing loss de duc tion (NOLD) with his 2002

Form FIA-40, line 15 is $17,250. For 2004, Kevin’s recom-

Or e gon tax able in come of $6,150 from Form 40, line 28. The

puted tax after removing his elected farm income is $188

result, a neg a tive $2,850, is en tered on line 1 of the 2002

from 2004 Form FIA-40, line 4.

worksheet.

For tax year 2005, Kevin’s Oregon taxable income is $27,900.

When John filed his 2002 tax return, he had a $3,000 net cap-

On line 2 Kevin enters his elected farm income of $24,000.

i tal loss deduction on federal Schedule D, line 18, a $7,000

He subtracts line 2 from line 1 and enters $3,900 on line 3.

loss on federal Schedule D, line 17, and a $4,000 cap i tal loss

This is his remaining Oregon taxable income. He calculates

carryover to 2003. However, when John car ried back the

his 2005 Oregon tax using the tax tables under married filing

2003 NOL to 2002, he refigured his 2002 capital loss car-

joint status and enters $198 on line 4.

ryover to tax year 2003 as $7,000. To cal cu late line 2 of the

2002 worksheet, John adds the $3,000 from fed er al Sched ule

For 2002, Kevin enters $4,112 from line 11, 2004 Form FIA-

D, line 18, and the $7,000 carryover. He sub tracts from the

40 on line 5 of the 2005 Form FIA-40. He divides his elected

re sult the $7,000 loss on his federal Sched ule D, line 17, and

farm income of $24,000 by 3 and enters $8,000 on line 6 of

en ters $3,000 on line 2 of the 2002 worksheet.

the 2005 Form FIA-40. He adds lines 5 and 6 and enters

$12,112 on line 7. This is his recomputed 2002 Oregon tax-

John had $6,150 of Oregon taxable income in 2002 that

able income. He calculates his 2002 Oregon tax using the

reduced the 2003 NOL carryback. The $3,000 net capital loss

tax table under married filing joint status and enters $751

de duc tion also reduced the amount of the 2003 NOL carry-

on line 8.

back. Since these two figures together total $9,150, there is

no NOLD left to carry over to tax year 2004. There fore, John

For 2003, Kevin enters $17,250 from line 15, 2004 Form FIA-

enters -0- on line 3. He adds line 2 and line 3 and enters the

40 on line 9 of the 2005 Form FIA-40. He enters $8,000 from

result, $3,000, on line 4 of the worksheet. John adds line 1,

line 6 (2005 Form FIA-40) on line 10 of the 2005 Form FIA-40.

a negative $2,850, plus line 4, a positive $3,000, and enters

He adds lines 9 and 10 and enters $25,250 on line 11. This is

the result, a pos i tive $150, on line 5 of the worksheet and

his recomputed 2003 Oregon taxable income. He calculates

on 2005 Form FIA-40, line 5. This fig ure rep re sents John’s

his 2003 Oregon tax using the tax tables under married filing

re com put ed Or e gon taxable in come for tax year 2002.

joint status and enters $1,917 on line 12.

For tax year 2003, John’s taxable income from Form 40, line

For 2004, Kevin enters $3,777 from line 3, 2004 Form FIA-40

28 is negative $30,250, which he enters on line 6 of the 2003

on line 13 of the 2005 Form FIA-40. He enters $8,000 from

worksheet.

line 6 (2005 Form FIA-40) on line 14 of the 2005 Form FIA-40.

John had a $3,000 net capital loss deduction on Sched ule D,

He adds lines 13 and 14 and enters $11,777 on line 15. This is

line 18 and a $7,000 loss on Schedule D, line 17a, the carry-

his recomputed 2004 Oregon taxable income. He calculates

over from 2002 to 2003. John adds the $3,000 from Sched ule

his 2004 Oregon tax using the tax tables under married filing

D, line 18, and the $7,000 carryover. He sub tracts from the

joint status and enters $719 on line 16.

re sult the $7,000 loss on Schedule D, line 17a, and en ters

On his 2005 Form FIA-40, he adds lines 4, 8, 12, and 16 and

$3,000 on line 7 of the worksheet. John enters $22,950 on line

enters $3,585 on line 17. He enters his recomputed 2002 tax

8 of the worksheet, his 2003 NOL.

of $208 from 2004 Form FIA-40, line 12 on line 18 of the 2005

John enters $25,950 ($22,950 and $3,000) on line 9 of the

Form FIA-40. He enters his recomputed 2003 tax of $1,197

worksheet. He adds line 6 and line 9 and en ters the result,

from 2004 Form FIA-40, line 16 on line 19 of the 2004 Form

a negative $4,300, on line 10 of the worksheet and on 2005

FIA-40. He enters his recomputed 2004 tax of $188 from 2004

Form FIA-40, line 9. This fig ure rep re sents John’s re com -

Form FIA-40, line 4 on line 20 of the 2005 Form FIA-40. He

put ed Or e gon tax able in come for tax year 2003.

adds lines 18, 19, and 20 and enters $1,593 on line 21. This

is the recomputed tax he paid for the 2002, 2003, and 2004

For tax year 2004, John’s taxable income from Form 40,

tax years.

line 28 is negative $1,750. This amount includes an NOLD

Instructions For 2005 Form Fia-40 - Farm Income Averaging Page 3

Related Articles

Related forms

Related Categories