Am I right that I need to use all 3 prior years for this form? I only would like to use one of the three prior years but don't see that this is possible. Am I on the right track?
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Bump
Gretel I think you are right unless perhaps there was no farming or fishing for some years in which case I would have no idea. I'm bumping this up so the smart people can answer it though. I'd like to know the answer also. -
You must use all 3 base years to make the calculation. TP is not required to have had farm income in the base years, however.Comment
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Farm income average
It's been a few years since I have prepared a Sch J but if I remember correctly you don't have to pick up all the farm income in the prior years. As long as it is farm related you can use it in your calculation or not. The instructions read "you 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. 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."Comment
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...this applies only to the "elected farm income", not to the three prior years.
Since this thread gets more attention then the thread posted by me for an NOL carried back to a year where Schedule J has been used, I would like to come back to this (mis)using this thread.
I am pretty sure that Sch. J needs to be re-calculated if NOL is carried back since it was used for the tax calculating in the first place. However, I would feel much better if someone could confirm this.Comment
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