Deductions and Write-Offs

Land is not depreciable.

Farmland is not depreciable. Farm Buildings and machinery used on the farm are depreciable.

Trees and bushes planted on your business property can be depreciated over a 15 year period. Landscapping service expenses can be deducted in the year performed.

Property includable in inventory is not depreciable. Beginning and ending and purchased inventory costs are used in your cost of goods sold calculation to determine your gross profit.

You may be treated as actively participating if for example you participate in making management decisions or arrange for others to provide services. Examples of management decisions are, approving new tenants, deciding on rental terms, approving capital or repair expenditures and other similar decisions.

The Gift tax return, Form 709 is due to be filed by April 15th of the year following the year of the gift. Extension forms may be filied if needed.

The IRS has announced that interest rates will not change for the first quarter of 2012, which begins on January 1, 2012 and goes through March 31, 2012. Interest Rates for Q1 2012
IRS interest rates will continue to be charged as follows:
•3% for overpayments (2% for corporations)
•3% for underpayments
•5% for large corporate underpayments
•0.5% for the portion of a corporate overpayment in excess of $10k.
Additionally, the 3% IRS underpayment interest rate applies to estimated tax underpayments for the first quarter of 2012 and will continue through April 15, 2012. The federal short-term rate will also remain the same throughout this period of time.

Interest Rates for Q1, Q2 and Q3 for 2013 will continue to be charged as follows:
3% for overpayments (2% for corporations)
3% for underpayments
5% for large corporate underpayments
0.5% for the portion of a corporate overpayment in excess of $10k.
Under the Internal Revenue Code, the rate of interest is determined on a quarterly basis. For taxpayers other than corporations, the overpayment and underpayment rate is the federal short-term rate plus 3 percentage points. Generally, in the case of a corporation, the underpayment rate is the federal short-term rate plus 3 percentage points and the overpayment rate is the federal short-term rate plus 2 percentage points. The rate for large corporate underpayments is the federal short-term rate plus 5 percentage points.
The rate on the portion of a corporate overpayment of tax exceeding $10,000 for a taxable period is the federal short-term rate plus one-half (0.5) of a percentage point. Further, the federal short-term rate that applies during the third month following the taxable year also applies when determining estimated tax underpayments during the first 15 days of the fourth month following the taxable year

You can donate unproductive inventory to a registered charity and claim a federal income tax deduction. Examples of unproductive inventory include slow sellers and nonmoving and discontinued stock.