Posts Tagged ‘filing an amended return’

Optional Write-off of Certain Tax Preferences

Wednesday, March 10th, 2010
Optional Write-off of Certain Tax Preferences
You can elect to amortize certain tax preference items over an optional period beginning in the tax year in which you incurred the costs. If you make this election there is no AMT adjustment. The applicable costs and the optional recovery periods are as follows:
Circulation costs — 3 years,
Intangible drilling and development costs — 60 months,
Mining exploration and development costs — 10 years, and
Research and experimental costs — 10 years.
How to make the election.   To elect to amortize qualifying costs over the optional recovery period, complete Part VI of Form 4562 and attach a statement containing the following information to your return for the tax year in which the election begins:
Your name, address, and taxpayer identification number; and
The type of cost and the specific amount of the cost for which you are making the election.
Generally, the election must be made on a timely filed return (including extensions) for the tax year in which you incurred the costs. However, if you timely filed your return for the year without making the election, you can still make the election by filing an amended return within 6 months of the due date of the return (excluding extensions). Attach Form 4562 to the amended return and write “Filed pursuant to section 301.9100-2” on Form 4562. File the amended return at the same address you filed the original return.
Revoking the election.   You must obtain consent from the IRS to revoke your election. Your request to revoke the election must be submitted to the IRS in the form of a letter ruling before the end of the tax year in which the optional recovery period ends. The request must contain all of the information necessary to demonstrate the rare and unusual circumstances that would justify granting revocation. If the request for revocation is approved, any unamortized costs are deductible in the year the revocation is effective.

Optional Write-off of Certain Tax Preferences

You can elect to amortize certain tax preference items over an optional period beginning in the tax year in which you incurred the costs. If you make this election there is no AMT adjustment. The applicable costs and the optional recovery periods are as follows:

  • Circulation costs — 3 years,
  • Intangible drilling and development costs — 60 months,
  • Mining exploration and development costs — 10 years, and
  • Research and experimental costs — 10 years.

How to make the election.   To elect to amortize qualifying costs over the optional recovery period, complete Part VI of Form 4562 and attach a statement containing the following information to your return for the tax year in which the election begins:

  • Your name, address, and taxpayer identification number; and
  • The type of cost and the specific amount of the cost for which you are making the election.

Generally, the election must be made on a timely filed return (including extensions) for the tax year in which you incurred the costs. However, if you timely filed your return for the year without making the election, you can still make the election by filing an amended return within 6 months of the due date of the return (excluding extensions). Attach Form 4562 to the amended return and write “Filed pursuant to section 301.9100-2” on Form 4562. File the amended return at the same address you filed the original return.

Revoking the election.   You must obtain consent from the IRS to revoke your election. Your request to revoke the election must be submitted to the IRS in the form of a letter ruling before the end of the tax year in which the optional recovery period ends. The request must contain all of the information necessary to demonstrate the rare and unusual circumstances that would justify granting revocation. If the request for revocation is approved, any unamortized costs are deductible in the year the revocation is effective.

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Research and Experimental Costs

Saturday, March 6th, 2010
Research and Experimental Costs
You can elect to amortize your research and experimental costs, deduct them as current business expenses, or write them off over a 10-year period. If you elect to amortize these costs, deduct them in equal amounts over 60 months or more. The amortization period begins the month you first receive an economic benefit from the costs. For a definition of “research and experimental costs” and information on deducting them as current business expenses, see chapter 7.
Optional write-off method.   Rather than amortize these costs or deduct them as a current expense, you have the option of deducting (writing off) research and experimental costs ratably over a 10-year period beginning with the tax year in which you incurred the costs.
Costs you can amortize.   You can amortize costs chargeable to a capital account if you meet both the following requirements.
You paid or incurred the costs in your trade or business.
You are not deducting the costs currently.
How to make the election.   To elect to amortize research and experimental costs, complete Part VI of Form 4562 and attach it to your income tax return. Generally, you must file the return by the due date (including extensions). However, if you timely filed your return for the year without making the election, you can still make the election by filing an amended return within 6 months of the due date of the return (excluding extensions). Attach Form 4562 to the amended return and write “Filed pursuant to section 301.9100-2” on Form 4562. File the amended return at the same address you filed the original return.
Your election is binding for the year it is made and for all later years unless you obtain approval from the IRS to change to a different method.

Research and Experimental Costs

You can elect to amortize your research and experimental costs, deduct them as current business expenses, or write them off over a 10-year period. If you elect to amortize these costs, deduct them in equal amounts over 60 months or more. The amortization period begins the month you first receive an economic benefit from the costs. For a definition of “research and experimental costs” and information on deducting them as current business expenses, see chapter 7.

Optional write-off method.   Rather than amortize these costs or deduct them as a current expense, you have the option of deducting (writing off) research and experimental costs ratably over a 10-year period beginning with the tax year in which you incurred the costs.

Costs you can amortize.   You can amortize costs chargeable to a capital account if you meet both the following requirements.

  • You paid or incurred the costs in your trade or business.
  • You are not deducting the costs currently.

How to make the election.   To elect to amortize research and experimental costs, complete Part VI of Form 4562 and attach it to your income tax return. Generally, you must file the return by the due date (including extensions). However, if you timely filed your return for the year without making the election, you can still make the election by filing an amended return within 6 months of the due date of the return (excluding extensions). Attach Form 4562 to the amended return and write “Filed pursuant to section 301.9100-2” on Form 4562. File the amended return at the same address you filed the original return.

Your election is binding for the year it is made and for all later years unless you obtain approval from the IRS to change to a different method.

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