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previous pagePrevious Page: Instructions for Schedule C (Form 1040), Profit or Loss From Business (Sole Proprietorship) - What's New—Disaster Areas
next pageNext Page: Instructions for Schedule C (Form 1040), Profit or Loss From Business (Sole Proprietorship) - Specific Instructions
 Use previous pagenext page to find additional occurrences of topic items.Index for these Instructions
taxmap/instr/i1040sc-002.htm#TXMP5051e863

General Instructions(p1)


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taxmap/instr/i1040sc-002.htm#TXMP66881055

Other Schedules and Forms You May Have To File(p1)


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taxmap/instr/i1040sc-002.htm#TXMP4217c3b0

Single-member limited liability company (LLC).(p2)

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Generally, a single-member domestic LLC is not treated as a separate entity for federal income tax purposes. If you are the sole member of a domestic LLC, file Schedule C or C-EZ (or Schedule E or F, if applicable). However, you can elect to treat a domestic LLC as a corporation. See Form 8832 for details on the election and the tax treatment of a foreign LLC.
taxmap/instr/i1040sc-002.htm#TXMP28fa0289

Heavy highway vehicle use tax.(p2)

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If you use certain highway trucks, truck-trailers, tractor-trailers, or buses in your trade or business, you may have to pay a federal highway motor vehicle use tax. See the Instructions for Form 2290 to find out if you must pay this tax.
taxmap/instr/i1040sc-002.htm#TXMP517bdd82

Information returns.(p2)

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You may have to file information returns for wages paid to employees, certain payments of fees and other nonemployee compensation, interest, rents, royalties, real estate transactions, annuities, and pensions. You may also have to file an information return if you sold $5,000 or more of consumer products to a person on a buy-sell, deposit-commission, or other similar basis for resale. For details, see the 2008 General Instructions for Forms 1099, 1098, 5498, and W-2G.
If you received cash of more than $10,000 in one or more related transactions in your trade or business, you may have to file Form 8300. For details, see Pub. 1544.
taxmap/instr/i1040sc-002.htm#TXMP7c91e428

Husband-Wife Business(p2)


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Generally, if you and your spouse jointly own and operate an unincorporated business and share in the profits and losses, you are partners in a partnership, whether or not you have a formal partnership agreement. Do not use Schedule C or C-EZ. Instead, file Form 1065. See Pub. 541 for more details.
taxmap/instr/i1040sc-002.htm#TXMP634af38c

Exception—Qualified Joint Venture(p2)


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If you and your spouse each materially participate (see Material participation on page C-3) as the only members of a jointly owned and operated business, and you file a joint return for the tax year, you can make a joint election to be treated as a qualified joint venture instead of a partnership. By making the election, you will not be required to file Form 1065 for any year the election is in effect and will instead report the income and deductions directly on your joint return. If you and your spouse filed a Form 1065 for the year prior to the election, the partnership terminates at the end of the tax year immediately preceding the year the election takes effect. Note.(p2) Mere joint ownership of property that is not a trade or business does not qualify for the election.

taxmap/instr/i1040sc-002.htm#TXMP56fd68ff

Making the election.(p2)

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To make this election, you must divide all items of income, gain, loss, deduction, and credit attributable to the business between you and your spouse in accordance with your respective interests in the venture. Each of you must file a separate Schedule C, C-EZ, or F. On each line of your separate Schedule C, C-EZ, or F, you must enter your share of the applicable income, deduction, or loss. Each of you must also file a separate Schedule SE to pay self-employment tax, as applicable.
If you have employees or otherwise need an employer identification number (EIN) for the business, see www.irs.gov, keyword qualified joint venture, for more information.
Once made, the election can be revoked only with the permission of the IRS. However, the election technically remains in effect only for as long as the spouses filing as a qualified joint venture continue to meet the requirements for filing the election. If the spouses fail to meet the qualified joint venture requirements for a year, a new election will be necessary for any future year in which the spouses meet the requirements to be treated as a qualified joint venture.
taxmap/instr/i1040sc-002.htm#TXMP7a7e1ab3

Rental real estate business.(p2)

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If you and your spouse make the election for your rental real estate business, you must each report your share of income and deductions on Schedule C or C-EZ instead of Schedule E. Rental real estate income generally is not included in net earnings from self-employment subject to self-employment tax and generally is subject to the passive loss limitation rules. Electing qualified joint venture status and using the Schedule C or C-EZ does not alter the application of the self-employment tax or the passive loss limitation rules.
taxmap/instr/i1040sc-002.htm#TXMP501053f6

Exception—Community Income(p2)


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If you and your spouse wholly own an unincorporated business as community property under the community property laws of a state, foreign country, or U.S. possession, the income and deductions are reported based on the following.
The only states with community property laws are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. A change in your reporting position will be treated as a conversion of the entity.
taxmap/instr/i1040sc-002.htm#TXMP64aee7f4

Reportable Transaction Disclosure Statement(p2)


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Use Form 8886 to disclose information for each reportable transaction in which you participated. Form 8886 must be filed for each tax year that your federal income tax liability is affected by your participation in the transaction. You may have to pay a penalty if you are required to file Form 8886 but do not do so. You may also have to pay interest and penalties on any reportable transaction understatements. The following are reportable transactions.
See the Instructions for Form 8886 for more details.
taxmap/instr/i1040sc-002.htm#TXMP58b77238

Capital Construction Fund(p3)


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Do not claim on Schedule C or C-EZ the deduction for amounts contributed to a capital construction fund set up under the Merchant Marine Act of 1936. Instead, reduce the amount you would otherwise enter on Form 1040, line 43, by the amount of the deduction. Next to line 43, enter CCF and the amount of the deduction. For details, see Pub. 595.
taxmap/instr/i1040sc-002.htm#TXMP20c49f40

Additional Information(p3)


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See Pub. 334 for more information for small businesses.
previous pagePrevious Page: Instructions for Schedule C (Form 1040), Profit or Loss From Business (Sole Proprietorship) - What's New—Disaster Areas
next pageNext Page: Instructions for Schedule C (Form 1040), Profit or Loss From Business (Sole Proprietorship) - Specific Instructions
 Use previous pagenext page to find additional occurrences of topic items.Index for these Instructions