Instructions For Schedule J (Form 1040) - Income Averaging For Farmers And Fishermen - 2017 Page 10

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2015 Foreign Earned Income Tax Worksheet—Line 12
Keep for Your Records
Use this worksheet if you claimed the foreign earned income exclusion or housing exclusion on your 2015 Form 1040 using
Form 2555 or 2555-EZ. However, if Schedule J, line 11, is zero or less, don't complete this worksheet.
1. Enter the amount from your 2017 Schedule J, line 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.
2a. Enter the amount from your (and your spouse's, if filing jointly) 2015 Form 2555, lines 45 and 50,
or Form 2555-EZ, line 18 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2a.
b. Enter the total amount of any itemized deductions or exclusions you could not claim for 2015
because they were related to excluded income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b.
c. Subtract line 2b from line 2a. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . c.
3. Add lines 1 and 2c . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.
4. Figure the tax on the amount on line 3. Use the 2015 Tax Rate Schedules, the 2015 Qualified
Dividends and Capital Gain Tax Worksheet,* or the 2015 Schedule D Tax Worksheet in the 2015
Schedule D instructions,* whichever applies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.
5. Figure the tax on the amount on line 2c. Use the 2015 Tax Rate Schedules. . . . . . . . . . . . . . . . . . . . 5.
6. Subtract line 5 from line 4. Enter the result. If zero or less, enter -0-. Also include this amount on
your 2017 Schedule J, line 12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.
*Enter the amount from line 3 above on line 1 of the 2015 Qualified Dividends and Capital Gain Tax Worksheet or the 2015 Schedule D Tax
Worksheet if you use either of those worksheets to figure the tax on line 4 above. Complete the rest of that worksheet through line 6 (line 10 if
you use the Schedule D Tax Worksheet). Next, you must determine if you had a capital gain excess. To find out if you had a capital gain excess,
subtract the amount from your 2017 Schedule J, line 11, from line 6 of your 2015 Qualified Dividends and Capital Gain Tax Worksheet
(line 10 of your 2015 Schedule D Tax Worksheet). If the result is more than zero, that amount is your capital gain excess.
If you didn't have a capital gain excess, complete the rest of either of those worksheets according to the worksheet's instructions. Then
complete lines 5 and 6 above.
If you had a capital gain excess, complete a second 2015 Qualified Dividends and Capital Gain Tax Worksheet or 2015 Schedule D Tax
Worksheet (whichever applies) as instructed above but in its entirety and with the following additional modifications. Then complete lines 5
and 6 above. These modifications are to be made only for purposes of filling out the 2015 Foreign Earned Income Tax Worksheet above.
1. Reduce (but not below zero) the amount you would otherwise enter on line 3 of your 2015 Qualified Dividends and Capital Gain Tax
Worksheet or line 9 of your 2015 Schedule D Tax Worksheet by your capital gain excess.
2. Reduce (but not below zero) the amount you would otherwise enter on line 2 of your 2015 Qualified Dividends and Capital Gain Tax
Worksheet or line 6 of your 2015 Schedule D Tax Worksheet by any of your capital gain excess not used in (1) above.
3. Reduce (but not below zero) the amount on your 2015 Schedule D (Form 1040), line 18, by your capital gain excess.
4. Include your capital gain excess as a loss on line 16 of your 2015 Unrecaptured Section 1250 Gain Worksheet in the 2015 Instructions for
Schedule D (Form 1040).
sure to keep all your records for 2016
over the loss on your 2016 Schedule D,
Line 13
until at least 3 years after April 17, 2018
line 21.
If you used Schedule J to figure your tax
(or the date you file your 2017 tax re-
Line 3. If you had an NOL for 2016,
turn, if later).
for 2016 (that is, you entered the amount
enter the amount of that NOL from the
from the 2016 Schedule J, line 23, on
2016 Form 1045, Schedule A, line 25,
Instructions for 2016 Taxable
your 2016 Form 1040, line 44, on your
you filed with Form 1045 or Form
Income Worksheet
2016 Form 1040NR, line 42, or on Form
1040X. If you didn't have an NOL for
1040X for 2016), enter on line 13 the
2016, enter the portion, if any, of the
Line 2. Any net capital loss deduction
amount from your 2016 Schedule J,
NOL carryovers and carrybacks to 2016
on your 2016 Schedule D, line 21, isn't
line 3.
that weren't used in 2016 and were car-
allowed for income averaging purposes
ried to years after 2016.
If you didn't use Schedule J to figure
to the extent it didn't reduce your capital
your tax for 2016, enter on line 13 the
Example. John Farmington didn't
loss carryover to 2017. This could hap-
taxable income from your 2016 tax re-
use income averaging for 2014, 2015, or
pen if the taxable income before sub-
turn (or as previously adjusted by the
2016. The taxable income before sub-
tracting exemptions—shown on your
IRS or corrected on an amended return).
tracting exemptions on his 2016 Form
2016 Form 1040, line 41, or your 2016
But if that amount is zero or less, com-
1040, line 41, is a negative $1,000. This
Form 1040NR, line 39 (or as previously
plete the worksheet below to figure the
amount includes an NOL deduction on
adjusted)—was less than zero. Enter on
amount to enter on line 13.
his 2016 Form 1040, line 21, of $1,200.
line 2 the amount by which your 2016
The $1,200 is the portion of the 2015
capital loss carryover to 2017 (the sum
If you didn't file a tax return for
NOL that was remaining from 2014 to
of your short- and long-term capital loss
2016, use the amount you would have
be carried to 2016. See the examples
carryovers) exceeds the excess of the
reported as your taxable income had you
earlier. A deduction for exemptions of
loss on your 2016 Schedule D, line 16,
been required to file a tax return. Be
J-10

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