INSTRUCTIONS: INCOME AVERAGING FOR FARMERS AND FISHERMAN SCHEDULE J

“Income Averaging for Farmers and Fisherman Schedule J Step 1”

A farming business qualifies as the following:

· operating a nursery or sod farm

· raising or harvesting of trees bearing fruits, nuts, or other crops

· raising ornamental trees

· raising, shearing, feeding, caring for, training, and managing animals

· leasing land to a tenant engaged in a farming business, but only if lease payments are based on share of tenant’s production or determined under a written agreement

A fishing business qualifies as the following:

· catching, taking, or harvesting of fish

· attempted catching, taking, or harvesting

· any operations at sea in support of the activities listed above

· leasing of a fishing vessel, but only if payments are based on share of catch or determined under a written lease before lease begins

· compensation as a crew member on a vessel in a fishing business, but only if compensation is based on share of the catch

The IRS provides specific instructions for this form at the following link: http://www.irs.gov/pub/irs-pdf/i1040sj.pdf

“Income Averaging for Farmers and Fisherman Schedule J Step 2”

On line 1, provide the taxable income from your 2011 Form 1040, line 43, or Form 1-40NR, line 41.

“Income Averaging for Farmers and Fisherman Schedule J Step 3”

For lines 2a through 5, refer to page J-2 and J-3 on the instructions provided by the IRS.

“Income Averaging for Farmers and Fisherman Schedule J Step 4”

For line 6, divide the amount on line 2a by 3.0. On line 7, combine the totals on lines 5 and 6. If the amount is -0- or less, enter -0-.

“Income Averaging for Farmers and Fisherman Schedule J Step 5”

For specific instructions on line 8, refer to pages J-4 through J-6 on the instructions provided by the IRS.

“Income Averaging for Farmers and Fisherman Schedule J Step 6”

Refer to the instructions from the IRS on page J-7 for line 9.

“Income Averaging for Farmers and Fisherman Schedule J Step 7”

For line 12, refer to pages J-8 through J-10.

“Income Averaging for Farmers and Fisherman Schedule J Step 8”

For instructions on lines 13 and 16, refer to pages J-11 through J-14.

“Income Averaging for Farmers and Fisherman Schedule J Step 9”

For lines 19,20,21, enter the corrected amount if you amended your return of the IRS made changes.