2003 Tax Help Archives  
Instructions for Schedule J 2003 Tax Year

Specific Instructions

This is archived information that pertains only to the 2003 Tax Year. If you
are looking for information for the current tax year, go to the Tax Prep Help Area.

Line 2

Elected Farm Income

To figure elected farm income, first figure your taxable income from farming. Taxable income from farming includes all income, gains, losses, and deductions attributable to any farming business. However, it does not include gain from the sale or other disposition of land.

Your elected farm income is the amount of your taxable income from farming that you elect to include on line 2. You do not have to include all of your taxable income from farming on line 2. It may be to your advantage to include less than the full amount, depending on how the amount you include on line 2 affects your tax bracket for the current and prior 3 tax years.

Your elected farm income cannot exceed your taxable income. Also, the portion of your elected farm income treated as a net capital gain cannot exceed the smaller of your total net capital gain or your net capital gain attributable to your farming business. If your elected farm income includes net capital gain, you must allocate an equal portion of the net capital gain to each of the base years. If, for any base year, you had a capital loss that resulted in a capital loss carryover to the next tax year, do not reduce the elected farm income allocated to that base year by any part of the carryover.

Farming Business.    A farming business is the trade or business of cultivating land or raising or harvesting any agricultural or horticultural commodity. This includes:
  • Operating a nursery or sod farm;
  • Raising or harvesting of trees bearing fruits, nuts, or other crops;
  • Raising ornamental trees (but not evergreen trees that are more than 6 years old when severed from the roots);
  • Raising, shearing, feeding, caring for, training, and managing animals; and
  • Leasing land to a tenant engaged in a farming business, but only if the lease payments are (a) based on a share of the tenant's production (not a fixed amount) and (b) determined under a written agreement entered into before the tenant begins significant activities on the land.

  A farming business does not include:
  • Contract harvesting of an agricultural or horticultural commodity grown or raised by someone else or
  • Merely buying or reselling plants or animals grown or raised by someone else.

  
Tip

  Generally, farm income, gains, losses, and deductions are reported on:
  • Form 1040, line 7, to the extent of wages and other compensation you received as a shareholder in an S corporation engaged in a farming business;
  • Schedule D;
  • Schedule E, Part II;
  • Schedule F;
  • Form 4797; and
  • Form 4835.

Line 4

Figure the tax on the amount on line 3 using the 2003 Tax Table, Tax Rate Schedules, or Qualified Dividends and Capital Gain Tax Worksheet from your 2003 Form 1040 instruction booklet, or use Schedule D. Enter the tax on line 4.

Line 5

If you used Schedule J to figure your tax for 2002 (that is, you entered the amount from line 22 of that Schedule J on Form 1040, line 42, or on Form 1040X), enter on line 5 the amount from line 11 of your 2002 Schedule J. If you used Schedule J to figure your tax for 2001 but not 2002, enter on line 5 the amount from line 15 of your 2001 Schedule J. If you used Schedule J to figure your tax for 2000 but not 2001 nor 2002, enter on line 5 the amount from line 3 of your 2000 Schedule J.

If you figured your tax for 2000, 2001, and 2002 without using Schedule J, enter on line 5 the taxable income from your 2000 tax return (or as previously adjusted by the IRS, an amended return, etc.). But if that amount is zero or less, complete the worksheet below to figure the amount to enter on line 5.

If you filed your 2000 tax return using TeleFile, enter the taxable income from your TeleFile Tax Record. If you did not file a tax return for 2000, use the amount you would have reported as your taxable income had you been required to file a tax return. Be sure to keep all your records for 2000 for at least 3 years after April 15, 2004 (or the date you file your 2003 tax return, if later), even if you did not file a tax return for 2000.

Instructions for 2000 Taxable Income Worksheet

Line 2.   Any net capital loss deduction on your 2000 Schedule D, line 18, is not allowed for farm income averaging purposes to the extent it did not reduce your capital loss carryover to 2001. This could happen if the taxable income before subtracting exemptions shown on your 2000 Form 1040, line 37 (or as previously adjusted), was less than zero. Enter the amount by which your 2000 capital loss carryover to 2001 (the sum of your short- and long-term capital loss carryovers) exceeds the excess of the loss on your 2000 Schedule D, line 17, over the loss on your 2000 Schedule D, line 18. If you had any net operating loss (NOL) carrybacks to 2000, be sure you refigured your 2000 capital loss carryover to 2001.

Line 3.   If you had an NOL for 2000, enter the amount of that NOL as figured on line 27 of the 2000 Form 1045, Schedule A, you filed with Form 1045 or Form 1040X. If you did not have an NOL for 2000, enter the portion, if any, of the NOL carryovers and carrybacks to 2000 that were not used in 2000 and were carried to years after 2000.

Example.   John Farmington did not use farm income averaging for 2000, 2001, nor 2002. John has $18,000 of elected farm income on line 2. The taxable income before subtracting exemptions shown on his 2000 Form 1040, line 37, was $3,800. A deduction for exemptions of $2,800 was shown on line 38, and line 39, taxable income, was $1,000. However, John had a $22,550 NOL in 2001, $9,000 of which was remaining to carry to 2000 after the NOL was carried back to 1999. To complete line 1 of the worksheet, John combines the $9,000 NOL deduction with the $1,000 from his 2000 Form 1040, line 39. The result is a negative $8,000, John's 2000 taxable income, which he enters as a positive amount on line 1 of the 2000 worksheet.

  When John filed his 2000 tax return, he had a $3,000 net capital loss deduction on Schedule D, line 18 (which was also entered on Form 1040, line 13), a $7,000 loss on Schedule D, line 17, and a $4,000 capital loss carryover to 2001. However, when John carried back the 2001 NOL to 2000, he refigured his 2000 capital loss carryover to 2001 as $7,000. John adds the $3,000 from Schedule D, line 18, and the $7,000 carryover. He subtracts from the result the $7,000 loss on his Schedule D, line 17, and enters $3,000 on line 2 of the worksheet.

  John had $1,000 of taxable income in 2000 that reduced the 2001 NOL carryback. The $2,800 of exemptions and $3,000 net capital loss deduction also reduced the amount of the 2001 NOL carryback. Therefore, only $2,200 was available to carry to 2002 and later years, as shown on his 2001 Form 1045, Schedule B, line 9. John enters the $2,200 on line 3 of the worksheet, and $5,200 on line 4. He then subtracts the $5,200 from the $8,000 on line 1 and enters the result, $2,800, on line 5 of the worksheet. He enters a negative $2,800 on Schedule J, line 5. He combines that amount with the $6,000 on Schedule J, line 6, and enters $3,200 on Schedule J, line 7.

2000 Taxable Income Worksheet—Line 5

Keep for your Records
Complete this worksheet if you figured your tax for both 2001 and 2002 without using Schedule J and your 2000 taxable income was zero or less. See the instructions above before completing this worksheet.
Worksheet you may need to fill in
 
1. Figure the taxable income from your 2000 tax return (or as previously adjusted) without limiting it to zero. If you had an NOL for 2000, do not include any NOL carryovers or carrybacks to 2000. Enter the result as a positive amount 1.    
2. If there is a loss on your 2000 Schedule D, line 18, add that loss (as a positive amount) and your 2000 capital loss carryover to 2001. Subtract from that sum the amount of the loss on your 2000 Schedule D, line 17, and enter the result 2.        
3. If you had an NOL for 2000, enter it as a positive amount. Otherwise, enter as a positive amount the portion, if any, of the NOL carryovers and carrybacks to 2000 that were not used in 2000 and were carried to years after 2000 3.        
4. Add lines 2 and 3 4.    
5. Subtract line 4 from line 1. Enter the result as a negative amount on Schedule J, line 5 5.    
             

Line 8

If line 7 is zero, enter zero on line 8. Otherwise, figure the tax on the amount on line 7 using:

  • The 2000 Tax Rate Schedules below,
  • The 2000 Capital Gain Tax Worksheet below, or
  • The Schedule D you filed for 2000 (but use the 2000 Tax Rate Schedules below instead of the 2000 Tax Table when figuring the tax on Schedule D, lines 33 and 53).

2000 Tax Rate Schedules—Line 8

Schedule X—Use if your 2000 filing status was Single Schedule Y-2—Use if your 2000 filing status was
Married filing separately
If Schedule J, line 7, is:
Over—
But not over— Enter on
Schedule J,
line 8
of the amount over— If Schedule J, line 7, is:
Over—
But not over— Enter on
Schedule J,
line 8
of the amount over—
$0
26,250
63,550
132,600
288,350
$26,250
63,550
132,600
288,350
.............
...........
$3,937.50 +
14,381.50 +
35,787.00 +
91,857.00 +
15%
28%
31%
36%
39.6%
$0
26,250
63,550
132,600
288,350
$0
21,925
52,975
80,725
144,175
$21,925
52,975
80,725
144,175
.............
...........
$3,288.75 +
11,982.75 +
20,585.25 +
43,427.25 +
15%
28%
31%
36%
39.6%
$0
21,925
52,975
80,725
144,175
Schedule Y-1—Use if your 2000 filing status was Married
filing jointly
or Qualifying widow(er)
Schedule Z—Use if your 2000 filing status was Head of
household
If Schedule J, line 7, is:
Over—
But not over— Enter on
Schedule J,
line 8
of the amount over— If Schedule J, line 7, is:
Over—
But not over— Enter on
Schedule J,
line 8
of the amount over—
$0
43,850
105,950
161,450
288,350
$43,850
105,950
161,450
288,350
.............
...........
$6,577.50 +
23,965.50 +
41,170.50 +
86,854.50 +
15%
28%
31%
36%
39.6%
$0
43,850
105,950
161,450
288,350
$0
35,150
90,800
147,050
288,350
$35,150
90,800
147,050
288,350
.............
...........
$5,272.50 +
20,854.50 +
38,292.00 +
89,160.00 +
15%
28%
31%
36%
39.6%
$0
35,150
90,800
147,050
288,350

2000 Capital Gain Tax Worksheet—Line 8

Use this worksheet only if you entered capital gain distributions directly on line 13 of your 2000 Form 1040 (or line 10 of your 2000 Form 1040A) and checked the box on that line and elected farm income included on Schedule J, lines 5 and 6, does not include any net capital gain.
Worksheet you may need to fill in
 
1.   Amount from Schedule J, line 7   1.          
2.   Amount from your 2000 Form 1040, line 13 (or Form 1040A, line 10)   2.          
3.   Subtract line 2 from line 1. If zero or less, enter -0-   3.          
4.   Figure the tax on the amount on line 3. Use the 2000 Tax Rate Schedules above   4.    
5.   Enter the smaller of:                  
 
  • The amount on line 1 above or
  • $26,250 if single for 2000; $43,850 if married filing
    jointly or qualifying widow(er); $21,925 if married
    filing separately; or $35,150 if head of household.
Right brace
    5.          
6.   Enter the amount from line 3   6.          
7.   Subtract line 6 from line 5. If zero or less, enter -0- and go to line 9   7.          
8.   Multiply line 7 by 10% (.10)   8.    
9.   Enter the smaller of line 1 or line 2   9.          
10.   Enter the amount from line 7   10.          
11.   Subtract line 10 from line 9. If zero or less, enter -0- and go to line 13   11.          
12.   Multiply line 11 by 20% (.20)   12.    
13.   Add lines 4, 8, and 12   13.    
14.   Figure the tax on the amount on line 1. Use the 2000 Tax Rate Schedules above   14.    
15.   Tax. Enter the smaller of line 13 or line 14 here and on Schedule J, line 8.   15.    
                       

Line 9

If you used Schedule J to figure your tax for 2002 (that is, you entered the amount from line 22 of that Schedule J on Form 1040, line 42, or on Form 1040X), enter on line 9 the amount from line 15 of your 2002 Schedule J. If you used Schedule J to figure your tax for 2001 but not 2002, enter on line 9 the amount from line 3 of your 2001 Schedule J.

If you figured your tax for both 2001 and 2002 without using Schedule J, enter on line 9 the taxable income from your 2001 tax return (or as previously adjusted by the IRS, an amended return, etc.). But if that amount is zero or less, complete the worksheet below to figure the amount to enter on line 9.

If you filed your 2001 tax return using TeleFile, enter the taxable income from your TeleFile Tax Record. If you did not file a tax return for 2001, use the amount you would have reported as your taxable income had you been required to file a tax return. Be sure to keep all your records for 2001 until at least 3 years after April 15, 2004 (or the date you file your 2003 tax return, if later), even if you did not file a tax return for 2001.

Instructions for 2001 Taxable Income Worksheet

Line 2.   Any net capital loss deduction on your 2001 Schedule D, line 18, is not allowed for farm income averaging purposes to the extent it did not reduce your capital loss carryover to 2002. This could happen if the taxable income before subtracting exemptions shown on your 2001 Form 1040, line 37 (or as previously adjusted), was less than zero. Enter the amount by which your 2001 capital loss carryover to 2002 (the sum of your short- and long-term capital loss carryovers) exceeds the excess of the loss on your 2001 Schedule D, line 17, over the loss on your 2001 Schedule D, line 18. If you had any NOL carrybacks to 2001, be sure you refigured your 2001 capital loss carryover to 2002.

Line 3.   If you had an NOL for 2001, enter the amount of that NOL as figured on line 27 of the 2001 Form 1045, Schedule A, you filed with Form 1045 or Form 1040X. If you did not have an NOL for 2001, enter the portion, if any, of the NOL carryovers and carrybacks to 2001 that were not used in 2001 and were carried to years after 2001.

Example.   John Farmington did not use farm income averaging for 2000, 2001, nor 2002. The taxable income before subtracting exemptions on his 2001 Form 1040, line 37, is a negative $30,100. A deduction for exemptions of $2,900 is shown on line 38, and line 39, taxable income, is limited to zero. John subtracts from the $30,100 loss the $2,900 deduction for exemptions. The result is a negative $33,000, John's 2001 taxable income, which he enters as a positive amount on line 1 of the 2001 worksheet.

  John had a $3,000 net capital loss deduction on Schedule D, line 18 (which was also entered on Form 1040, line 13), and a $7,000 loss on Schedule D, line 17 (as adjusted). He also had a $7,000 capital loss carryover to 2002. John adds the $3,000 from Schedule D, line 18, and the $7,000 carryover. He subtracts from the result the $7,000 loss on his Schedule D, line 17, and enters $3,000 on line 2 of the worksheet.

  John enters $22,550 on line 3 of the worksheet, the 2001 NOL from his 2001 Form 1045, Schedule A, line 27. Of the $33,000 negative taxable income, the $2,900 deduction for exemptions, the $3,000 capital loss deduction, and his $4,550 standard deduction were not allowed in figuring the NOL. John had a $22,550 loss on his 2001 Schedule F, the only other item on his 2001 tax return.

  John enters $25,550 on line 4 and $7,450 on line 5. He enters $7,450 as a negative amount on Schedule J, line 9. He enters $6,000 on Schedule J, line 10, and a negative $1,450 on Schedule J, line 11. If he uses Schedule J to figure his tax for 2004, he will enter the negative $1,450 amount on his 2004 Schedule J as his 2001 taxable income for farm income averaging purposes.

2001 Taxable Income Worksheet—Line 9

Keep for your Records
Complete this worksheet if you did not use Schedule J to figure your tax for 2002 and your 2001 taxable income was zero or less. See the instructions above before completing this worksheet.
Worksheet you may need to fill in
 
1. Figure the taxable income from your 2001 tax return (or as previously adjusted) without limiting it to zero. If you had an NOL for 2001, do not include any NOL carryovers or carrybacks to 2001. Enter the result as a positive amount 1.    
2. If there is a loss on your 2001 Schedule D, line 18, add that loss (as a positive amount) and your 2001 capital loss carryover to 2002. Subtract from that sum the amount of the loss on your 2001 Schedule D, line 17, and enter the result 2.        
3. If you had an NOL for 2001, enter it as a positive amount. Otherwise, enter as a positive amount the portion, if any, of the NOL carryovers and carrybacks to 2001 that were not used in 2001 and were carried to years after 2001 3.        
4. Add lines 2 and 3 4.    
5. Subtract line 4 from line 1. Enter the result as a negative amount on Schedule J, line 9 5.    
             

Line 12

If line 11 is zero or less, enter zero on line 12. Otherwise, figure the tax on the amount on line 11 using:

  • The 2001 Tax Rate Schedules below,
  • The 2001 Capital Gain Tax Worksheet below, or
  • The Schedule D you filed for 2001 (but use the 2001 Tax Rate Schedules below instead of the 2001 Tax Table when figuring the tax on Schedule D, lines 25 and 39, or on lines 15 and 36 of the Schedule D Tax Worksheet).

Exception.    You must use the 2001 Tax Computation Worksheet for Certain Dependents and Nonresident Alien Individuals on page J-6 if you, or your spouse if filing jointly, did not receive (before offset) an advance payment of your 2001 taxes and either of the following apply.
  • You, or your spouse if filing jointly, could be claimed as a dependent on someone else's 2001 tax return.
  • You filed Form 1040NR for 2001.

    If the 2001 Capital Gain Tax Worksheet or Schedule D also applies, follow the Special Rules on the worksheet on page J-6 to figure your tax.

2001 Tax Rate Schedules—Line 12

Schedule X—Use if your 2001 filing status was Single Schedule Y-2—Use if your 2001 filing status was
Married filing separately
If Schedule J, line 11, is:
Over—
But not over— Enter on
Schedule J,
line 12
of the amount over— If Schedule J, line 11, is:
Over—
But not over— Enter on
Schedule J,
line 12
of the amount over—
$0
27,050
65,550
136,750
297,350
$27,050
65,550
136,750
297,350
.............
...........
$4,057.50 +
14,645.00 +
36,361.00 +
93,374.00 +
15%
27.5%
30.5%
35.5%
39.1%
$0
27,050
65,550
136,750
297,350
$0
22,600
54,625
83,250
148,675
$22,600
54,625
83,250
148,675
.............
...........
$3,390.00 +
12,196.88 +
20,927.50 +
44,153.38 +
15%
27.5%
30.5%
35.5%
39.1%
$0
22,600
54,625
83,250
148,675
Schedule Y-1—Use if your 2001 filing status was Married
filing jointly
or Qualifying widow(er)
Schedule Z—Use if your 2001 filing status was Head of
household
If Schedule J, line 11, is:
Over—
But not over— Enter on
Schedule J,
line 12
of the amount over— If Schedule J, line 11, is:
Over—
But not over— Enter on
Schedule J,
line 12
of the amount over—
$0
45,200
109,250
166,500
297,350
$45,200
109,250
166,500
297,350
.............
...........
$6,780.00 +
24,393.75 +
41,855.00 +
88,306.75 +
15%
27.5%
30.5%
35.5%
39.1%
$0
45,200
109,250
166,500
297,350
$0
36,250
93,650
151,650
297,350
$36,250
93,650
151,650
297,350
.............
...........
$5,437.50 +
21,222.50 +
38,912.50 +
90,636.00 +
15%
27.5%
30.5%
35.5%
39.1%
$0
36,250
93,650
151,650
297,350

2001 Capital Gain Tax Worksheet—Line 12

Use this worksheet only if you entered capital gain distributions directly on line 13 of your 2001 Form 1040 (or line 10 of your 2001 Form 1040A) and checked the box on that line and elected farm income included on Schedule J, lines 9 and 10, does not include any net capital gain.
Worksheet you may need to fill in
 
1.   Amount from Schedule J, line 11   1.          
2.   Amount from your 2001 Form 1040, line 13 (or Form 1040A, line 10)   2.          
3.   Subtract line 2 from line 1. If zero or less, enter -0-   3.          
4.   Figure the tax on the amount on line 3. Use the 2001 Tax Rate Schedules above   4.    
5.   Enter the smaller of:                  
 
  • The amount on line 1 above or
  • $27,050 if single for 2001; $45,200 if married
    filing jointly or qualifying widow(er); $22,600 if
    married filing separately; or $36,250 if head of
    household.
Right brace
    5.          
6.   Enter the amount from line 3   6.          
7.   Subtract line 6 from line 5. If zero or less, enter -0- and go to line 9   7.          
8.   Multiply line 7 by 10% (.10)   8.    
9.   Enter the smaller of line 1 or line 2   9.          
10.   Enter the amount from line 7   10.          
11.   Subtract line 10 from line 9. If zero or less, enter -0- and go to line 13   11.          
12.   Multiply line 11 by 20% (.20)   12.    
13.   Add lines 4, 8, and 12   13.    
14.   Figure the tax on the amount on line 1. Use the 2001 Tax Rate Schedules above   14.    
15.   Tax. Enter the smaller of line 13 or line 14 here and on Schedule J, line 12.   15.    
                       

2001 Tax Computation Worksheet for Certain Dependents and
Nonresident Alien Individuals — Line 12

Keep for your Records
Use this worksheet only if you, or your spouse if filing jointly, did not receive (before offset) an advance payment of your 2001 taxes and (a) you, or your spouse if filing jointly, could be claimed as a dependent on someone else's 2001 tax return or (b) you filed Form 1040NR for 2001.
Worksheet you may need to fill in
 
Special Rules. If:          
  The 2001 Capital Gain Tax Worksheet on page J-5 applies, use this worksheet to figure the tax on lines 4 and 14 of the 2001 Capital Gain Tax Worksheet.  
  Part IV of the 2001 Schedule D applies, use this worksheet to figure the tax on lines 25 and 39 of Part IV. If the 2001 Schedule D Tax Worksheet applies, use this worksheet to figure the tax on lines 15 and 36 of the Schedule D Tax Worksheet.  
1. Figure the tax on the amount on Schedule J, line 11 (or the applicable line of the worksheet or schedule listed above). Use the 2001 Tax Rate Schedules on page J-5 1.    
2. Is the amount on line 1 more than the amount shown below for your 2001 filing status?      
  Single or married filing separately—$900          
  Married filing jointly or qualifying widow(er)—$1,800          
  Head of household—$1,500          
 
Yes. Enter: $300 if single or married filing separately for 2001; $500 if
Right brace
2.    
    head of household; $600 if married filing jointly or qualifying widow(er).
 
No. Divide the amount on line 1 by 3.0.          
3. Subtract line 2 from line 1. Enter the result here and on Schedule J, line 12 (or the applicable line of the worksheet or schedule listed above) 3.    
               

Line 13

If you used Schedule J to figure your tax for 2002 (that is, you entered the amount from line 22 of that Schedule J on Form 1040, line 42, or on Form 1040X), enter on line 13 the amount from line 3 of that Schedule J.

If you did not use Schedule J to figure your tax for 2002, enter on line 13 the taxable income from your 2002 tax return (or as previously adjusted by the IRS, an amended return, etc.). But if that amount is zero or less, complete the worksheet below to figure the amount to enter on line 13.

If you filed your 2002 tax return using TeleFile, enter the taxable income from your TeleFile Tax Record. If you did not file a tax return for 2002, use the amount you would have reported as your taxable income had you been required to file a tax return. Be sure to keep all your records for 2002 until at least 3 years after April 15, 2004 (or the date you file your 2003 tax return, if later), even if you did not file a tax return for 2002.

Instructions for 2002 Taxable Income Worksheet

Line 2.   Any net capital loss deduction on your 2002 Schedule D, line 18, is not allowed for farm income averaging purposes to the extent it did not reduce your capital loss carryover to 2003. This could happen if the taxable income before subtracting exemptions shown on your 2002 Form 1040, line 39 (or as previously adjusted), was less than zero. Enter the amount by which your 2002 capital loss carryover to 2003 (the sum of your short- and long-term capital loss carryovers) exceeds the excess of the loss on your 2002 Schedule D, line 17, over the loss on your 2002 Schedule D, line 18.

Line 3.   If you had an NOL for 2002, enter the amount of that NOL as figured on line 27 of the 2002 Form 1045, Schedule A, you filed with Form 1045 or Form 1040X. If you did not have an NOL for 2002, enter the portion, if any, of the NOL carryovers and carrybacks to 2002 that were not used in 2002 and were carried to years after 2002.

Example.   John Farmington did not use farm income averaging for 2000, 2001, nor 2002. The taxable income before subtracting exemptions on his 2002 Form 1040, line 39, is a negative $1,000. This amount includes an NOL deduction (NOLD) on his 2002 Form 1040, line 21, of $2,200. The $2,200 is the portion of the 2001 NOL that was remaining from 2000 to be carried to 2002. See the examples on pages J-2 and J-4. A deduction for exemptions of $3,000 is shown on Form 1040, line 40, and line 41, taxable income, is limited to zero. John does not have an NOL for 2002. John subtracts from the $1,000 negative amount on Form 1040, line 39, the $3,000 deduction for exemptions. The result is a negative $4,000, John's 2002 taxable income, which he enters as a positive amount on line 1 of the 2002 worksheet.

  John had a $3,000 net capital loss deduction on Schedule D, line 18 (which was also entered on Form 1040, line 13), a $7,000 loss on Schedule D, line 17, and a $5,000 capital loss carryover to 2003 (his 2002 capital loss carryover to 2003 was $5,000, not $4,000, because the amount on his Form 1040, line 39, was a negative $1,000). John adds the $3,000 from Schedule D, line 18, and the $5,000 carryover. He reduces the result by the $7,000 loss on his Schedule D, line 17, and enters $1,000 on line 2 of the worksheet.

  John enters zero on line 3 of the worksheet because he does not have an NOL for 2002 and did not have an NOL carryover from 2002 available to carry to 2003 and later years. The NOLD for 2002 of $2,200 was reduced to zero because it did not exceed his modified taxable income of $4,200. Modified taxable income is figured by adding back the $3,000 net capital loss deduction and the $3,000 of exemptions to negative taxable income (figured without regard to the NOLD) of $1,800. John enters $1,000 on line 4 and $3,000 on line 5. He enters $3,000 as a negative amount on Schedule J, line 13. He enters $6,000 on Schedule J, line 14, and $3,000 on Schedule J, line 15. If he uses Schedule J to figure his tax for 2004, he will enter $3,000 on his 2004 Schedule J as his 2002 taxable income for farm income averaging purposes.

2002 Taxable Income Worksheet—Line 13

Keep for your Records
Complete this worksheet if your 2002 taxable income is zero or less. See the instructions above before completing this worksheet.
Worksheet you may need to fill in
 
1. Figure the taxable income from your 2002 tax return (or as previously adjusted) without limiting it to zero. If you had an NOL for 2002, do not include any NOL carryovers or carrybacks to 2002. Enter the result as a positive amount 1.    
2. If there is a loss on your 2002 Schedule D, line 18, add that loss (as a positive amount) and your 2002 capital loss carryover to 2003. Subtract from that sum the amount of the loss on your 2002 Schedule D, line 17, and enter the result 2.        
3. If you had an NOL for 2002, enter it as a positive amount. Otherwise, enter as a positive amount the portion, if any, of the NOL carryovers and carrybacks to 2002 that were not used in 2002 and were carried to years after 2002 3.        
4. Add lines 2 and 3 4.    
5. Subtract line 4 from line 1. Enter the result as a negative amount on Schedule J, line 13 5.    
             

Line 16

If line 15 is zero or less, enter zero on line 16. Otherwise, figure the tax on the amount on line 15 using:

  • The 2002 Tax Rate Schedules below,
  • The 2002 Capital Gain Tax Worksheet below, or
  • The Schedule D you filed for 2002 (but use the 2002 Tax Rate Schedules below instead of the 2002 Tax Table when figuring the tax on Schedule D, lines 25 and 39, or on lines 15 and 36 of the Schedule D Tax Worksheet).

2002 Tax Rate Schedules—Line 16

Schedule X—Use if your 2002 filing status was Single Schedule Y-2—Use if your 2002 filing status was
Married filing separately
If Schedule J, line 15, is:
Over—
But not over— Enter on
Schedule J,
line 16
of the amount over— If Schedule J, line 15, is:
Over—
But not over— Enter on
Schedule J,
line 16
of the amount over—
$0
6,000
27,950
67,700
141,250
307,050
$6,000 27,950
67,700
141,250
307,050
.............
...........
$600.00 +
3,892.50 +
14,625.00 +
36,690.00 +
94,720.00 +


10%
15%
27%

30%
35%
38.6%
$0
6,000 27,950
67,700
141,250
307,050
$0
6,000
23,350
56,425
85,975
153,525
$6,000 23,350
56,425
85,975
153,525
.............
...........
$600.00 + 3,202.50 +
12,132.75 +
20,997.75 +
44,640.25 +
10%
15%

27%
30%
35%
38.6%
$0
6,000

23,350
56,425
85,975
153,525
Schedule Y-1—Use if your 2002 filing status was Married
filing jointly
or Qualifying widow(er)
Schedule Z—Use if your 2002 filing status was Head of
household
If Schedule J, line 15, is:
Over—
But not over— Enter on
Schedule J,
line 16
of the amount over— If Schedule J, line 15, is:
Over—
But not over— Enter on
Schedule J,
line 16
of the amount over—
$0
12,000
46,700
112,850
171,950
307,050
$12,000 46,700
112,850
171,950
307,050
.............
...........
$1,200.00 +
6,405.00 +
24,265.50 +
41,995.50 +
89,280.50 +


10%
15%

27%

30%
35%
38.6%
$0
12,000
46,700
112,850
171,950
307,050
$0
10,000
37,450
96,700
156,600
307,050
$10,000 37,450
96,700
156,600
307,050
.............
...........
$1,000.00 + 5,117.50 +
21,115.00 +
39,085.00 +
91,742.50 +
10%
15%

27%
30%
35%
38.6%
$0
10,000
37,450
96,700
156,600
307,050

2002 Capital Gain Tax Worksheet—Line 16

Use this worksheet only if you entered capital gain distributions directly on line 13 of your 2002 Form 1040 (or line 10 of your 2002 Form 1040A) and checked the box on that line and elected farm income on Schedule J, line 2, does not include any net capital gain.
Worksheet you may need to fill in
 
1.   Amount from Schedule J, line 15   1.          
2.   Amount from your 2002 Form 1040, line 13 (or Form 1040A, line 10)   2.          
3.   Subtract line 2 from line 1. If zero or less, enter -0-   3.          
4.   Figure the tax on the amount on line 3. Use the 2002 Tax Rate Schedules above   4.    
5.   Enter the smaller of:                  
 
  • The amount on line 1 above or
  • $27,950 if single for 2002; $46,700 if married
    filing jointly or qualifying widow(er); $23,350 if
    married filing separately; or $37,450 if head of
    household.
Right brace
    5.          
6.   Enter the amount from line 3   6.          
7.   Subtract line 6 from line 5. If zero or less, enter -0- and go to line 9   7.          
8.   Multiply line 7 by 10% (.10)   8.    
9.   Enter the smaller of line 1 or line 2   9.          
10.   Enter the amount from line 7   10.          
11.   Subtract line 10 from line 9. If zero or less, enter -0- and go to line 13   11.          
12.   Multiply line 11 by 20% (.20)   12.    
13.   Add lines 4, 8, and 12   13.    
14.   Figure the tax on the amount on line 1. Use the 2002 Tax Rate Schedules above   14.    
15.   Tax. Enter the smaller of line 13 or line 14 here and on Schedule J, line 16.   15.    
                       

Lines 18, 19, and 20

If you filed your 2000, 2001, or 2002 tax return using TeleFile, enter your tax from your TeleFile Tax Record. If you amended your return or the IRS made changes to it, enter the corrected amount.

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