Looking for a Irs Forms And Templates? Download it for free!

Department of the Treasury

Internal Revenue Service

2017 Instructions for Schedule J

Income

Use Schedule J (Form 1040) to elect to figure your 2017 income tax by averaging,

over the previous 3 years (base years), all or part of your 2017 taxable income from

Averaging for

your trade or business of farming or fishing. This election may give you a lower tax if

your 2017 income from farming or fishing is high and your taxable income for one or

Farmers and

more of the 3 prior years was low.

In order to qualify for this election, you aren't required to have been in the business

Fishermen

of farming or fishing during any of the base years.

You may elect to average farming or fishing income even if your filing status

wasn't the same in the election year and the base years.

This election doesn't apply when figuring your alternative minimum tax on Form

6251. Also, you don't have to refigure, because of this election, the tax liability of any

minor child who was required to use your tax rates in the prior years.

Section references are to the Internal

tural or horticultural commodity. This

3. Any other activity which can rea-

Revenue Code unless otherwise noted.

includes:

sonably be expected to result in the

catching, taking, or harvesting of fish;

1. Operating a nursery or sod farm;

Future Developments

4. Any operations at sea in support

2. Raising or harvesting of trees

of, or in preparation for, any activity de-

For the latest information about devel-

bearing fruits, nuts, or other crops;

opments related to Schedule J (Form

scribed in (1) through (3) above;

3. Raising ornamental trees (but not

1040) and its instructions, such as legis-

5. Leasing a fishing vessel, but only

evergreen trees that are more than 6

lation enacted after they were published,

if the lease payments are (a) based on a

years old when severed from the roots);

go to IRS.gov/ScheduleJ.

share of the catch (or a share of the pro-

4. Raising, shearing, feeding, caring

ceeds from the sale of the catch) from

General

for, training, and managing animals; and

the lessee's use of the vessel in a fishing

Instructions

5. Leasing land to a tenant engaged

business (not a fixed payment), and (b)

in a farming business, but only if the

determined under a written lease entered

lease payments are (a) based on a share

into before the lessee begins any signifi-

Prior Year Tax Returns

of the tenant's production (not a fixed

cant fishing activities resulting in the

amount), and (b) determined under a

catch; and

You may need copies of your original or

written agreement entered into before

6. Compensation as a crew member

amended income tax returns for 2014,

the tenant begins significant activities on

on a vessel engaged in a fishing busi-

2015, and 2016 to figure your tax on

the land.

ness, but only if the compensation is

Schedule J.

A farming business doesn't include:

based on a share of the catch (or a share

If you need copies of your tax re-

of the proceeds from the sale of the

Contract harvesting of an agricul-

turns, use Form 4506. There is a fee for

catch).

tural or horticultural commodity grown

each return requested. See Form 4506

or raised by someone else, or

for the fee amount. If your main home,

The word “fish” means finfish, mol-

Merely buying or reselling plants

principal place of business, or tax re-

lusks, crustaceans, and all other forms of

or animals grown or raised by someone

cords are located in a federally declared

marine animal and plant life other than

else.

disaster area, this fee will be waived. If

marine mammals and birds.

you want a free transcript of your tax re-

A fishing business doesn't include

turn or account, use Form 4506-T. See

Fishing business. A fishing business is

any scientific research activity conduc-

your Form 1040 instructions to find out

the trade or business of fishing in which

ted by a scientific research vessel.

how to get these forms.

the fish harvested, either in whole or in

Settlement from Exxon Valdez liti

part, are intended to enter commerce or

Keep a copy of your 2017 income tax

gation. You will be treated as engaged

enter commerce through sale, barter, or

return to use for income averaging in

in a fishing business with respect to any

trade. This includes:

2018, 2019, or 2020.

qualified settlement income you re-

1. The catching, taking, or harvest-

Definitions

ceived if either of the following applies.

ing of fish;

1. You were a plaintiff in the civil

2. The attempted catching, taking,

Farming business. A farming business

action

Exxon

Valdez,

No.

or harvesting of fish;

is the trade or business of cultivating

land or raising or harvesting any agricul-

J-1

Aug 01, 2017

Cat. No. 25514J

Instructions For Schedule J (Form 1040) - Income Averaging For Farmers And Fishermen - 2017

Related Articles

Related forms

Related Categories