Table of Contents

• Publication 535 - Introductory Material
  • Introduction
    • Tax questions.
    • Ordering forms and publications.
  • What's New for 2005
  • What's New for 2006
  • Reminders
• 1.   Deducting Business Expenses
  • Introduction
  • Topics - This chapter discusses:
  • Useful Items - You may want to see:
  • What Can I Deduct?
    • Cost of Goods Sold
    • Capital Expenses
    • Capital versus Deductible Expenses
    • Personal versus Business Expenses
  • How Much Can I Deduct?
    • Not-for-profit limits.
    • At-risk limits.
    • Passive activities.
    • Net operating loss.
  • When Can I Deduct an Expense?
    • Economic performance.
  • Not-for-Profit Activities
    • Limit on Deductions
• 2.   Employees' Pay
  • Introduction
  • Topics - This chapter discusses:
  • Useful Items - You may want to see:
  • Tests for Deducting Pay
    • Test 1—Reasonableness
    • Test 2—For Services Performed
  • Kinds of Pay
    • Awards
    • Bonuses
    • Education Expenses
    • Fringe Benefits
    • Loans or Advances
    • Property
    • Reimbursements for Business Expenses
    • Sick and Vacation Pay
• 3.   Retirement Plans
  • What's New
  • What's New for 2005
  • Introduction
  • Topics - This chapter discusses:
  • Useful Items - You may want to see:
  • Simplified Employee Pension (SEP)
    • Contribution Limits
    • Deduction Limit
    • Salary Reduction Simplified Employee Pension (SARSEP)
    • Reporting SEP Contributions on Form W-2
  • SIMPLE Retirement Plans
    • SIMPLE IRA Plan
  • Qualified Plan
    • Kinds of Qualified Plans
    • Setting Up a Plan
    • Deduction Limits
    • Figuring Your Deduction
    • Example
  • Individual Retirement Arrangement (IRA)
• 4.   Rent Expense
  • Introduction
  • Topics - This chapter discusses:
  • Rent
    • Conditional sales contract.
    • Leveraged leases.
    • Leveraged leases of limited-use property.
  • Taxes on Leased Property
  • Cost of Getting a Lease
  • Improvements by Lessee
  • Capitalizing Rent Expenses
• 5.   Interest
  • Introduction
  • Topics - This chapter discusses:
  • Useful Items - You may want to see:
  • Allocation of Interest
    • Order of funds spent.
    • Payments from checking accounts.
    • Amounts paid within 30 days.
    • Optional method for determining date of reallocation.
    • Interest on a separate account.
    • How to report.
  • Interest You Can Deduct
    • Statement.
    • Expenses paid to obtain a mortgage.
    • Prepayment penalty.
    • De minimis OID.
    • Constant-yield method.
    • Loan or mortgage ends.
  • Interest You Cannot Deduct
    • Penalties.
    • Who is a key person?
    • Exceptions for pre-June 1997 contracts.
    • Interest allocated to unborrowed policy cash value.
  • Capitalization of Interest
  • When To Deduct Interest
    • Prepaid interest.
    • Discounted loan.
    • Refunds of interest.
    • Prepaid interest.
    • Discounted loan.
    • Tax deficiency.
    • Related person.
  • Below-Market Loans
    • Limit on forgone interest for gift loans of $100,000 or less.
• 6.   Taxes
  • Introduction
  • Topics - This chapter discusses:
  • Useful Items - You may want to see:
  • When To Deduct Taxes
  • Real Estate Taxes
    • Separate elections.
    • Making the election.
    • Form 3115.
  • Income Taxes
    • Accrual of contested income taxes.
  • Employment Taxes
  • Other Taxes
• 7.   Insurance
  • Introduction
  • Topics - This chapter discusses:
  • Useful Items - You may want to see:
  • Deductible Premiums
    • Self-Employed Health Insurance Deduction
  • Nondeductible Premiums
  • Capitalized Premiums
  • When To Deduct Premiums
• 8.   Costs You Can Deduct or Capitalize
  • Introduction
  • Topics - This chapter discusses:
  • Useful Items - You may want to see:
  • Carrying Charges
  • Research and Experimental Costs
    • Product.
    • Costs not included.
  • Intangible Drilling Costs
  • Exploration Costs
    • Partnerships.
  • Development Costs
  • Circulation Costs
  • Environmental Cleanup Costs
    • Hazardous substance.
    • Qualified contaminated site.
    • Expenditures for depreciable property.
    • Individuals.
    • All other entities.
    • More than one environmental cleanup cost.
  • Business Start-Up and Organizational Costs
  • Reforestation Costs
  • Retired Asset Removal Costs
  • Barrier Removal Costs
    • Other barrier removals.
• 9.   Amortization
  • What's New
  • Introduction
  • Topics - This chapter discusses:
  • Useful Items - You may want to see:
  • How To Deduct Amortization
  • Going Into Business
    • Business Start-Up Costs
    • Costs of Organizing a Corporation
    • Costs of Organizing a Partnership
    • How To Amortize
  • Getting a Lease
  • Section 197 Intangibles
    • Section 197 Intangibles Defined
    • Assets That Are Not Section 197 Intangibles
    • Safe Harbor for Creative Property Costs
    • Anti-Churning Rules
    • Incorrect Amount of Amortization Deducted
    • Disposition of Section 197 Intangibles
  • Reforestation Costs
    • Partner or shareholder.
    • Estate.
  • Geological and Geophysical Costs
  • Pollution Control Facilities
    • New identifiable treatment facility.
  • Research and Experimental Costs
  • Optional Write-off of Certain Tax Preferences
• 10.   Depletion
  • What's New
  • Introduction
  • Topics - This chapter discusses:
  • Who Can Claim Depletion?
  • Mineral Property
    • Cost Depletion
    • Percentage Depletion
    • Oil and Gas Wells
    • Mines and Geothermal Deposits
    • Lessor's Gross Income
  • Timber
    • Timber units.
    • Depletion unit.
• 11.   Business Bad Debts
  • Introduction
  • Topics - This chapter discusses:
  • Useful Items - You may want to see:
  • Business Bad Debt Defined
    • Accrual method.
    • Cash method.
    • Debt acquired from a decedent.
    • Liquidation.
    • Types of Business Bad Debts
  • When Debt Is Worthless
  • How To Treat
    • Specific Charge-Off Method
    • Nonaccrual-Experience Method
  • Recovery
    • Net operating loss (NOL) carryover.
    • More information.
  • Where To Deduct
• 12.   Electric and Clean-Fuel Vehicles
  • What's New
  • Reminder
  • Introduction
  • Topics - This chapter discusses:
  • Useful Items - You may want to see:
  • Definitions
  • Deductions for Clean-Fuel Vehicle and Refueling Property
    • Deduction for Clean-Fuel Vehicle Property
    • Deduction for Clean-Fuel Vehicle Refueling Property
    • How To Claim the Deductions
    • Recapture of the Deductions
    • Basis Adjustments
  • Electric Vehicle Credit
    • Qualified Electric Vehicle
    • Amount of the Credit
    • How To Claim the Credit
    • Recapture of the Credit
    • Basis Adjustments
• 13.   Other Expenses
  • What's New
  • Introduction
  • Topics - This chapter discusses:
  • Useful Items - You may want to see:
  • Reimbursement of Travel, Meals, and Entertainment
    • Reimbursements
  • Miscellaneous Expenses
    • Meaning of generally enforced.
    • Kickbacks.
    • Form 1099-MISC.
    • Exception.
    • Tax preparation fees.
    • Covered executive branch official.
    • Exceptions to denial of deduction.
    • Indirect political contributions.
    • Type of deduction.
    • Repayment—$3,000 or less.
    • Repayment—over $3,000.
    • Method 1.
    • Method 2.
    • Repayment does not apply.
    • Year of deduction (or credit).
    • Telephone.
• 14.   How To Get Tax Help
• Publication 535 - Additional Material
• Index