Instructions For 2003 Form Fia-40 - Farm Income Averaging printable pdf download

O R E G O N

INSTRUCTIONS FOR 2003 FORM FIA-40

D E PA R T M E N T

Farm Income Averaging

O F R E V E N U E

• Raising, shearing, feeding, caring for, training, and man-

You may elect to figure your 2003 tax by averaging, over

aging animals.

the previous three years (base years), all or part of your 2003

• Leasing land to a tenant engaged in a farming business,

taxable farm income.

but only if the lease payments are based on a share of the

You will need copies of your original or amended

tenant’s production (not a fixed amount).

Oregon income tax returns for tax years 2000, 2001, and

• Wages and other compensation you received as a share-

2002. You can obtain copies of prior years’ returns for a fee

holder in an S corporation engaged in a farming business.

from the Oregon Department of Revenue. See Taxpayer As-

A farming business does not include:

sistance on page 4 for numbers to call.

• Contract harvesting of an agricultural or horticultural

If you filed an Oregon part-year or nonresident return in any

commodity grown or raised by someone else, or

of the three base years, you will need Schedule Z, Compu-

• Merely buying or reselling plants or animals grown or

tation of Tax, to complete Form FIA-40. If any of the three

raised by someone else.

base years are part-year or nonresident returns, ignore the

computation of tax for the applicable year on Form FIA-40

Line instructions

and complete Schedule Z. Fill in the computed tax from

Line 5. If you used FIA-40 to figure your tax for 2002, enter

Schedule Z on lines 8, 12, or 16, whichever applies.

the amount from your 2002 FIA-40, line 11, on line 5. If you

used Schedule Z to figure your tax for 2002, enter on line 5

Elected farm income

the amount from your 2002 Schedule Z, Computation for

Your elected farm income is the amount of your taxable

Tax Year 2000. If you used Computation A, use the amount

income from farming that you elect to include on Form FIA-

on line 9. If you used Computation B, use the amount on line

40, line 2. This is the amount on federal Schedule J, line 2, if

6. If you used Computation C, use the amount on line 3. If

you elect to use farm income averaging for federal. Do not

your 2000 taxable income was -0- or less, use the worksheet

enter more than the amount on line 1.

below to figure the amount to enter on Form FIA-40, line 5.

To figure elected farm income, first figure your taxable

NOL means net operating loss and applies to the year of the

income from farming. Taxable income from farming includes

actual loss. NOLD means net operating loss deduction and

all income, gains, losses, and deductions attributable to any

applies to the year the NOL is carried to.

farming business. Gains and losses from the sale or other dis-

2000 Taxable Income Worksheet

position of property (other than land) must be from property

1. Figure the taxable income from

regularly used for a substantial period of time in your farm-

your 2000 tax return without

ing business. However, it does not include gain from the sale

limiting it to -0-. Include any

or other disposition of land. You do not have to include all

NOLD carryovers or carrybacks

of your taxable income from farming on Form FIA-40, line 2.

if you did not have a NOL in

Your elected farm income cannot exceed your Oregon tax-

2000. Do not include any NOLD

able income. Also, the portion of your elected farm income

carryover or carryback from

treated as a net capital gain cannot exceed the smaller of

other years if you had a NOL

your total net capital gain or your net capital gain attribut-

in 2000. Enter the result here ............... $ ___________

able to your farming business. If your elected farm income

2. If there is a loss on your 2000

includes net capital gain, you must allocate an equal portion

federal Schedule D, line 18, add

of the net capital gain to each of the base years.

that loss (as a positive amount)

If, for any base year, you had a capital loss that resulted in

and your 2000 capital loss carry-

a capital loss carryover to the next tax year, do not reduce

over to 2001. Subtract from that

the elected farm income allocated to that base year by any

sum the amount of the loss on your

part of the carryover.

2000 federal Schedule D, line 17.

Enter the result here ............................. $ ___________

Farming business

3. If you had an NOL for 2000,

A farming business is the trade or business of cultivating

enter it as a positive amount here.

land or raising or harvesting any agricultural or horticul-

Otherwise, enter the portion

tural commodity. This includes:

(if any) of the NOLD carryovers

and carrybacks to 2000 that were

• Operating a nursery or sod farm.

not used in 2000 and were carried

• Raising or harvesting of trees bearing fruits, nuts, or other

to tax years after 2000 as a

crops.

positive amount here ............................ $ ___________

• Raising ornamental trees (but not evergreen trees that are

more than 6 years old when severed from the roots).

4. Add lines 2 and 3 .................................. $ ___________

Instructions For 2003 Form Fia-40 - Farm Income Averaging

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