Form 5213 - Election To Postpone Determination As To Whether The Presumption Applies That An Activity Is Engaged In For Profit Page 2
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Form 5213 (Rev. 2-2006)
Page
General Instructions
Generally, in determining whether you are
in which you engaged in the activity. If you
engaged in more than one activity, you must
are an individual, your identifying number is
Purpose of Form
consider all of the following:
your social security number (SSN). If you are
other than an individual, your identifying
● The similarity of the activities,
Use Form 5213 to elect to postpone an IRS
number is your employer identification
● The business purpose that is (or might be)
determination as to whether the presumption
number (EIN).
applies that an activity is engaged in for
served by carrying on the activities separately
If you and your spouse filed a joint return,
profit.
or together in a trade or business or
enter both your name and your spouse’s name
investment setting, and
General Information
as they were shown on your tax return. Enter
● The organizational and economic
the SSN that was shown first on your return as
Generally, if you are an individual, estate,
interrelationship of the activities.
your identifying number.
trust, partnership, or S corporation in an
When To File
activity not engaged in for profit, some of
Signature and Date
your deductions may not be allowed.
File this form within 3 years after the due date
Be sure to sign and date the form on the
However, an activity is presumed to be
of your return (determined without extensions)
appropriate line or lines. Keep a copy for your
engaged in for profit (and, therefore,
for the first tax year in which you engaged in
records.
deductions are not limited) if the gross
the activity. However, if you received a written
income exceeds the deductions:
notice that the IRS proposes to disallow
● From an activity that consists mainly of
Privacy Act and Paperwork Reduction Act
deductions attributable to an activity not
Notice. We ask for the information on this
breeding, training, showing, or racing horses
engaged in for profit (under Internal Revenue
form to carry out the Internal Revenue laws of
for each of 2 or more of the tax years in the
Code section 183) and you want a
the United States. We need this information
period of 7 consecutive tax years ending with
postponement of the determination, you must
to determine your eligibility for making the
the tax year in question or
file this form within 60 days after receiving the
election to postpone determination as to
● From any other activity for each of 3 or
notice. This 60-day period does not extend
whether the presumption applies that an
the 3-year period referred to above.
more of the tax years in the period of 5
activity is engaged in for profit. If you make
consecutive tax years ending with the tax
Where To File
this election, you are required by Internal
year in question.
Revenue Code section 183 to provide the
File this form with the Internal Revenue
For information on the limits on deductions
information requested on this form. Under
Service Center where you are required to file
in not-for-profit activities, see Pub. 535,
section 6109, you must disclose your SSN,
your return. Do not send it in with any other
Business Expenses.
individual taxpayer identification number
return because that will delay processing the
(ITIN), or EIN. Routine uses of this information
Who Should File
election to postpone. However, if the IRS
include giving it to the Department of Justice
notifies you about proposing to disallow
Individuals, estates, trusts, partnerships
for civil and criminal litigation, and to cities,
deductions for an activity not engaged in for
(including limited liability companies or other
states, and the District of Columbia for use in
profit, file the form with the IRS office that
entities that are treated as partnerships for
administering their tax laws. We may also
sent you the notification.
Federal tax purposes), and S corporations
disclose this information to other countries
should use this form if they want to postpone
Automatic Extension of Period of
under a tax treaty, to federal and state
an IRS determination as to whether the
Limitations
agencies to enforce federal nontax criminal
presumption applies that they are engaged in
laws, or to federal law enforcement and
Generally, filing this form automatically
an activity for profit. An election made by a
intelligence agencies to combat terrorism. If
extends the period of limitations for assessing
partnership or an S corporation is binding on
you fail to provide this information in a timely
any income tax deficiency specifically
all persons who were partners or
manner, or provide incomplete or false
attributable to the activity during any year in
shareholders at any time during the
information, you may be liable for interest and
the presumption period. The extension also
presumption period.
penalties.
applies to partners or shareholders in the
You may not use this form if you have been
You are not required to provide the
activity.
engaged in:
information requested on a form that is
The period is extended until 2 years after
● Breeding, training, showing, or racing
subject to the Paperwork Reduction Act
the due date for filing the return (determined
horses for more than 7 years or
unless the form displays a valid OMB control
without extensions) for the last tax year in the
● Any other activity for more than 5 years.
number. Books or records relating to a form
presumption period. For example, for an
or its instructions must be retained as long as
If you elect a postponement and file this
activity subject to a 5-year presumption
their contents may become material in the
form on time, the IRS will generally postpone
period that began in 2003 and ends in 2007,
administration of any Internal Revenue law.
the determination until after the end of the 4th
the period of limitations automatically extends
Generally, tax returns and return information
consecutive tax year (6th tax year for an
to April 15, 2010, for all tax years in the
are confidential, as required by Code section
activity that consists mainly of breeding,
presumption period that would otherwise
6103.
training, showing, or racing horses) after the
expire before that date. Periods of limitations
The time needed to complete and file this
tax year in which you first engaged in the
for tax years in the 5-year period expiring
form will vary depending on individual
activity. This period of 5 (or 7) tax years is
after April 15, 2010, would remain open until
circumstances. The estimated burden for
called the “presumption period.” The election
their normal expiration date. However, early
individual taxpayers filing this form is
to postpone covers the entire presumption
termination of the presumption period does
approved under OMB control number
period.
not terminate the automatic extension of the
1545-0074 and is included in the estimates
period of limitations.
Joint Returns
shown in the instructions for their individual
The automatic extension applies only to
income tax return. The estimated burden for
If you and your spouse filed a joint return,
those deductions attributable to the activity
all other taxpayers who file this form is shown
both of you must elect to postpone the
and to any deductions (such as medical
below.
determination even if only one of you is
expenses or charitable contribution
engaged in the activity.
Recordkeeping
7 min.
deductions) that are affected by changes
made to adjusted gross income.
Learning about the
How Many Forms To File
law or the form
10 min.
The automatic extension does not affect
Generally, if you want a postponement for
general waivers of the statute of limitations
Preparing the form
10 min.
more than one activity, you must file a
that may be executed.
Copying, assembling, and
separate Form 5213 for each activity.
sending the form to the IRS
20 min.
However, you may file one form for more than
Specific Instructions
one activity if all of the activities have the
If you have comments concerning the
same presumption period. Be sure to
accuracy of these time estimates or
Name and Identifying Number as
describe each activity in detail and list the
suggestions for making this form simpler, we
Shown on Tax Return
first tax year in which you were engaged in
would be happy to hear from you. See the
Enter your name(s) and identifying number as
the activities.
instructions for the tax return with which this
shown on your tax return for the first tax year
form is filed.
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