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Instructions for Schedule J (Form 1040)
taxmap/instr/i1040sj-002.htm#TXMP03b93458

Specific Instructions(p2)

rule
taxmap/instr/i1040sj-002.htm#TXMP70dbc46a

Line 2a(p2)

rule
taxmap/instr/i1040sj-002.htm#TXMP0f316442

Elected Farm Income(p2)

rule
To figure your elected farm income, first figure your taxable income from farming or fishing. This includes all income, gains, losses, and deductions attributable to your farming or fishing business. If you conduct both farming and fishing businesses, you must figure your elected farm income by combining income, gains, losses, and deductions attributable to your farming and fishing businesses.
Elected farm income also includes any gain or loss from the sale or other disposition of property regularly used in your farming or fishing business for a substantial period of time. However, if such gain or loss is realized after cessation of the farming or fishing business, the gain or loss is treated as attributable to a farming or fishing business only if the property is sold within a reasonable time after cessation of the farming or fishing business. A sale or other disposition within 1 year of the cessation is considered to be within a reasonable time.
Elected farm income does not include income, gain, or loss from the sale or other disposition of land or from the sale of development rights, grazing rights, and other similar rights.
You should find your income, gains, losses, and deductions from farming or fishing reported on different tax forms, such as:
Your elected farm income is the amount of your taxable income from farming or fishing that you elect to include on line 2a. However, you do not have to include all of your taxable income from farming or fishing on line 2a. It may be to your advantage to include less than the entire amount, depending on how the amount you include on line 2a affects your tax bracket for the current and prior 3 tax years.
If you received certain subsidies in 2011, your elected farm income cannot include excess farm losses. See the Instructions for Schedule F (Form 1040).
Your elected farm income cannot exceed your taxable income.