Formulaire 1040 Annexe J Instructions

Instructions pour l'annexe J (formulaire 1040 ou 1040-SR), Calcul du revenu des agriculteurs et des pêcheurs

Rév. 2023

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Formulaire 1040 Tableau J - Moyenne des revenus des agriculteurs et des pêcheurs

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Department of the Treasury

Internal Revenue Service

2023 Instructions for Schedule J

Use Schedule J (Form 1040) to elect to figure your 2023 income tax by averaging,

over the previous 3 years (base years), all or part of your 2023 taxable income from

your trade or business of farming or fishing. This election may give you a lower tax if

your 2023 income from farming or fishing is high and your taxable income for 1 or

more of the 3 prior years was low.

Income

Averaging for

Farmers and

Fishermen

In order to qualify for this election, you aren't required to have been in the business

of farming or fishing during any of the base years.

You may elect to average farming or fishing income even if your filing status wasn't

the same in the election year and the base years.

This election doesn't apply when figuring your alternative minimum tax on Form

6251. Also, you don't have to refigure, because of this election, the tax liability of any

minor child who was required to use your tax rates in the prior years.

Section references are to the Internal

Revenue Code unless otherwise noted.

applied for Qualifying widow(er) apply

to Qualifying surviving spouse. We will

match the term to the year of use

throughout these instructions.

the fish harvested, either in whole or in

part, are intended to enter commerce or

enter commerce through sale, barter, or

trade. This includes:

Future Developments

For the latest information about devel-

opments related to Schedule J (Form

1040) and its instructions, such as legis-

lation enacted after they were published,

go to IRS.gov/ScheduleJ.

1. The catching, taking, or harvest-

ing of fish;

Definitions

Farming business. A farming business

is the trade or business of cultivating

land or raising or harvesting any agricul-

tural or horticultural commodity. This

includes:

2. The attempted catching, taking,

or harvesting of fish;

3. Any other activity that can rea-

sonably be expected to result in the

catching, taking, or harvesting of fish;

General

1. Operating a nursery or sod farm;

4. Any operations at sea in support

of, or in preparation for, any activity de-

scribed in (1) through (3) above;

Instructions

2. Raising or harvesting of trees

bearing fruits, nuts, or other crops;

Prior Year Tax Returns

3. Raising ornamental trees (but not

evergreen trees that are more than 6

years old when severed from the roots);

5. Leasing a fishing vessel, but only

if the lease payments are (a) based on a

share of the catch (or a share of the pro-

ceeds from the sale of the catch) from

the lessee's use of the vessel in a fishing

business (not a fixed payment), and (b)

determined under a written lease entered

into before the lessee begins any signifi-

cant fishing activities resulting in the

catch; and

You may need copies of your original or

amended income tax returns for 2020,

2021, and 2022 to figure your tax on

Schedule J.

4. Raising, shearing, feeding, caring

for, training, and managing animals; and

If you need copies of your tax re-

turns, use Form 4506. There is a fee for

each return requested. See Form 4506

for the fee amount. If your main home,

principal place of business, or tax re-

cords are located in a federally declared

disaster area, this fee will be waived. If

you want a free transcript of your tax re-

turn or account, use Form 4506-T. See

the Instructions for Form 1040 to find

out how to get these forms.

5. Leasing land to a tenant engaged

in a farming business, but only if the

lease payments are (a) based on a share

of the tenant's production (not a fixed

amount), and (b) determined under a

written agreement entered into before

the tenant begins significant activities on

the land.

6. Compensation as a crew member

on a vessel engaged in a fishing busi-

ness, but only if the compensation is

based on a share of the catch (or a share

of the proceeds from the sale of the

catch).

A farming business doesn't include:

Contract harvesting of an agricul-

tural or horticultural commodity grown

or raised by someone else, or

•

Keep a copy of your 2023 income tax

return to use for income averaging in

2024, 2025, or 2026.

The word “fish” means finfish, mol-

lusks, crustaceans, and all other forms of

marine animal and plant life other than

marine mammals and birds.

Merely buying or reselling plants

or animals grown or raised by someone

else.

•

Note. For tax years beginning in

2022, the filing status “Qualifying wid-

ow(er)” is called “Qualifying surviving

spouse.” The rules for the filing status

have not changed. The same rules that

A fishing business doesn't include

any scientific research activity conduc-

ted by a scientific research vessel.

Fishing business. A fishing business is

the trade or business of fishing in which

J-1

Cat. No. 25514J

Sep 28, 2023

2023 Form 1040, 1040-SR, or

long-term capital gain over net

short-term capital loss.

•

Additional Information

1040-NR, line 15, CCF reduction, ex-

cept to the extent that any earnings

(without regard to the carryback of any

net operating or net capital loss) from

the operation of agreement vessels in the

fisheries of the United States or in the

foreign or domestic commerce of the

United States aren't attributable to your

fishing business;

See Pub. 225 and Regulations section

1.1301-1 for more information.

Line 2b. Enter on line 2b the portion of

your elected farm income on line 2a

treated as a net capital gain. The amount

you enter on line 2b can't exceed the

smaller of your total net capital gain or

the net capital gain attributable to your

farming or fishing business.

Specific

Instructions

Line 2c. Enter on line 2c the smaller of

line 2b or the unrecaptured section 1250

gain attributable to your farming or fish-

ing business, if any.

Line 2a

Elected Farm Income

Schedule C;

Schedule D;

Schedule E, Part II;

Schedule F;

Form 4797;

Form 4835;

Form 8903, Domestic Production

•

To figure your elected farm income, first

figure your taxable income from farm-

ing 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.

•

Line 4

•

Figure the tax on the amount on line 3

using:

•

Activities Deduction, but only to the ex-

tent that deduction is attributable to your

farming or fishing business; and

The 2023 Tax Table, Tax Compu-

•

tation Worksheet, or Qualified Divi-

dends and Capital Gain Tax Worksheet

from the 2023 Instructions for Form

1040 or the 2023 Instructions for Form

1040-NR;

Form 8949.

•

Your elected farm income is the

amount of your taxable income from

farming or fishing that you elect to in-

clude on line 2a.

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 cessa-

tion 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 disposi-

tion within 1 year of the cessation is pre-

sumed to be within a reasonable time.

The 2023 Foreign Earned Income

Tax Worksheet from the 2023 Instruc-

tions for Form 1040; or

•

You don't have to include all of

your taxable income from farm-

ing or fishing on line 2a. It may

TIP

The Schedule D Tax Worksheet in

the 2023 Instructions for Schedule D.

•

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.

Enter the tax on line 4.

Line 5

If you used Schedule J to figure your tax

for:

The excess farm loss limitation rules

don't apply for tax years beginning after

2017 and before 2029. The excess farm

loss limitation rules are suspended dur-

ing those years and replaced by the ex-

cess business loss limitation rules for tax

years beginning after 2020 and before

2029. The at-risk limits and the passive

activity limits are applied before calcu-

lating the amount of any excess business

loss. The amount of any excess business

loss allocable to your farming or fishing

business(es) is not used in calculating

the amount of your elected farm income.

See generally the Instructions for Sched-

ule F (Form 1040) and Form 461.

2022 (that is, you entered the

•

amount from the 2022 Schedule J,

line 23, on your 2022 Form 1040,

1040-SR, or Form 1040-NR, line 16; or

on your 2022 Form 1040-X, line 6), en-

ter on line 5 the amount from your 2022

Schedule J, line 11;

Elected farm income doesn't 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.

2021 but not 2022, enter on line 5

the amount from your 2021 Schedule J,

line 15; or

•

You should find your income, gains,

losses, and deductions from farming or

fishing reported on different tax forms,

such as:

2020 but not 2021 or 2022, enter

on line 5 the amount from your 2020

Schedule J, line 3.

•

2023 Form 1040 or 1040-SR, or

•

Form 1040-NR, line 1a, income from

wages and other compensation you re-

ceived (a) as a shareholder in an S cor-

poration engaged in a farming or fishing

business, or (b) as a crew member on a

vessel engaged in a fishing business (but

see Fishing business, earlier);

If you figured your tax for 2020,

2021, and 2022 without using Sched-

ule J, enter on line 5 the taxable income

from your 2020 tax return (or as previ-

ously adjusted by the IRS, or corrected

on an amended return). But if that

amount is zero or less, complete the

2020 Taxable Income Worksheet to fig-

ure the amount to enter on line 5.

Your elected farm income can't ex-

ceed your taxable income.

Lines 2b and 2c

2023 Schedule 1 (Form 1040),

•

line 15, deductible part of self-employ-

ment tax, but only to the extent that de-

duction is attributable to your farming or

fishing business;

Complete lines 2b and 2c if the amount

of your elected farm income on line 2a

includes net capital gain. Net capital

gain is the excess, if any, of net

If you didn't file a tax return for

2020, use the amount you would have

J-2

2020 Taxable Income Worksheet—Line 5

Keep for Your Records

Complete this worksheet if you didn’t use Schedule J to figure your tax for 2021 and 2022 and your 2020 taxable income was zero or

less. See the instructions for line 5 before completing this worksheet.

1. Figure the taxable income from your 2020 tax return (or as previously adjusted) without limiting it to

zero. If you had an NOL for 2020, don't include any NOL carryovers or carrybacks to 2020. Enter the

result as a positive amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.

2. If there is a loss on your 2020 Schedule D, line 21, add that loss (as a positive

amount) and your 2020 capital loss carryover to 2021. Subtract from that sum the

amount of the loss on your 2020 Schedule D, line 16, and enter the result . . . . . . . .

3. If you had an NOL for 2020, enter it as a positive amount. Otherwise, enter as a

positive amount the portion, if any, of the NOL carryovers and carrybacks to 2020

that weren't used in 2020 and were carried to years after 2020 . . . . . . . . . . . . . . . . .

4. Add lines 2 and 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5. Subtract line 4 from line 1. Enter the result as a negative amount on Schedule J, line 5 . . . . . . . . . . . . . . .

reported as your taxable income had you

been required to file a tax return. Be

sure to keep all your records for 2020

for at least 3 years after April 15, 2024

(or the date you file your 2023 tax re-

turn, if later).

Example. A farmer, who is single,

didn't use income averaging for 2020,

2021, or 2022. For 2023, the farmer has

$18,000 of elected farm income on

Schedule J, line 2a. The taxable income

on the farmer’s 2020 Form 1040,

line 15, is $850. However, the farmer

had a $14,700 NOL for 2021, $9,000 of

which was remaining to carry to 2020

after the NOL was carried back to 2019.

To complete line 1 of the 2020 Taxable

Income Worksheet, the farmer combines

the $9,000 NOL deduction with the

$850 from the farmer’s 2020 Form

1040, line 15. The result is a negative

$8,150, the farmer’s 2020 taxable in-

come, which the farmer enters as a posi-

tive amount on line 1 of the 2020 Taxa-

ble Income Worksheet.

loss deduction reduced the amount of

the 2021 NOL carryback. As a result,

only $5,150 ($9,000 – $850 – $3,000 =

$5,150) was available to carry to 2022

and later years, as shown on the farmer’s

2021 Form 1045, Schedule B, line 10.

The farmer enters the $5,150 on line 3

of the worksheet, and $8,150 ($5,150

plus the $3,000 line 2 amount) on line 4.

The farmer then subtracts the $8,150

from the $8,150 on line 1 and enters the

result, $0, on line 5 of the worksheet.

The farmer enters a $0 on Schedule J,

line 5. The farmer combines that amount

with the $6,000 on Schedule J, line 6,

and enters $6,000 on Schedule J, line 7.

Instructions for 2020 Taxable

Income Worksheet

Line 2. Any net capital loss deduction

on your 2020 Schedule D, line 21, isn't

allowed for income averaging purposes

to the extent it didn't reduce your capital

loss carryover to 2021. This could hap-

pen if the taxable income—shown on

your 2020 Form 1040, line 15, or your

2020 Form 1040-NR, line 15 (or as pre-

viously adjusted)—was less than zero.

Enter on line 2 the amount by which

your 2020 capital loss carryover to 2021

(the sum of your short- and long-term

capital loss carryovers) exceeds the ex-

cess of the loss on your 2020 Sched-

ule D, line 16, over the loss on your

2020 Schedule D, line 21. If you had

any net operating loss (NOL) carrybacks

to 2020, be sure you refigured your 2020

capital loss carryover to 2021.

Line 8

If line 7 is zero, enter -0- on line 8. Oth-

erwise, figure the tax on the amount on

line 7 using:

When the farmer filed the 2020 tax

return, the farmer had a $3,000 net capi-

tal loss deduction on Schedule D, line 21

(which was also entered on Form 1040,

line 7); a $7,000 loss on Schedule D,

line 16; and a $4,000 capital loss carry-

over to 2021. However, when the farmer

carried back the 2021 NOL ($9,000 of

which was carried to 2020), the farmer

refigured the 2020 capital loss carryover

to 2021 as $7,000. The farmer adds the

$3,000 from Schedule D, line 21, and

the $7,000 capital loss carryover. The

farmer subtracts from the $10,000 result

the $7,000 loss on the Schedule D,

line 16, and enters $3,000 on line 2 of

the worksheet.

The 2020 Tax Rate Schedules be-

•

low;

The 2020 Qualified Dividends and

Capital Gain Tax Worksheet, later;

•

The 2020 Schedule D Tax Work-

•

sheet in the 2020 Schedule D instruc-

tions (but use the 2020 Tax Rate Sched-

ules below when figuring the tax on

lines 34 and 36 of the Schedule D Tax

Worksheet); or

Line 3. If you had an NOL for 2020,

enter the amount of that NOL from the

2020 Form 1045, Schedule A, line 24,

you filed with Form 1045 or Form

1040X. If you didn't have an NOL for

2020, enter the portion, if any, of the

NOL carryovers and carrybacks to 2020

that weren't used in 2020 and were car-

ried to years after 2020.

The 2020 Foreign Earned Income

Tax Worksheet, later.

•

If your elected farm income includes

net capital gain, you must use the 2020

Schedule D Tax Worksheet to figure the

tax on the amount on line 7. However, if

you filed Form 2555 for 2020, you must

first complete the 2020 Foreign Earned

The farmer had $850 of taxable in-

come in 2020 that reduced the 2021

NOL carryback. The $3,000 net capital

J-3

Income Tax Worksheet, and then use the

2020 Schedule D Tax Worksheet to fig-

ure the tax on the amount on line 3 of

the Foreign Earned Income Tax Work-

sheet.

When completing the Schedule D

Tax Worksheet, you must allocate 1/3 of

the amount on Schedule J, line 2b, (and

1/3 of the amount on line 2c, if any) to

2020. If for 2020 you had a capital loss

that resulted in a capital loss carryover

to 2021, don't reduce the elected farm

income allocated to 2020 by any part of

the carryover.

2020 Tax Rate Schedules—Line 8

Schedule X—Use if your 2020 filing status was Single.

Schedule Y-2—Use if your 2020 filing status was Married filing separately.

Enter on

Schedule J,

line 8

Enter on

Schedule J,

line 8

Schedule J,

line 7, is:

Over—

of the

Schedule J,

But

not

over—

But not

over—

amount line 7, is:

over— Over—

of the amount

over—

$0 $9,875

9,875 40,125

...........

10%

12%

22%

24%

32%

35%

37%

$0 $9,875

...........

10%

12%

22%

24%

32%

35%

37%

$987.50

4,617.50

9,875

40,125

9,875 40,125

40,125 85,525

85,525 163,300

163,300 207,350

207,350 311,025

311,025 ..........

$987.50

4,617.50

9,875

40,125

40,125 85,525

85,525 163,300

163,300 207,350

207,350 518,400

518,400 .............

14,605.50

33,271.50

47,376.50

156,235.00

85,525

14,605.50

33,271.50

47,367.50

83,653.75

85,525

163,300

207,350

518,400

163,300

207,350

311,025

Schedule Y-1—Use if your 2020 filing status was Married

filing jointly or Qualifying widow(er).

Schedule Z—Use if your 2020 filing status was Head of household.

Enter on

Schedule J,

line 8

Enter on

Schedule J,

line 8

Schedule J,

line 7, is:

Over—

of the

Schedule J,

But

not

over—

But not

over—

amount line 7, is:

over— Over—

of the amount

over—

$0 $19,750

19,750 80,250

80,250 171,050

171,050 326,600

326,600 414,700

414,700 622,050

622,050 ............

...........

10%

12%

22%

24%

32%

35%

37%

$0 $14,100

...........

10%

12%

22%

24%

32%

35%

37%

14,100

$1,975.00

9,235.00

19,750

80,250

14,100 53,700

53,700 85,500

85,500 163,300

163,300 207,350

207,350 518,400

518,400 ...........

$1,410.00

6,162.00

53,700

29,211.00

66,543.00

94,735.00

167,307.50

171,050

326,600

414,700

622,050

13,158.00

31,830.00

45,926.00

154,793.50

85,500

163,300

207,350

518,400

J-4

Keep for Your Records

2020 Qualified Dividends and Capital Gain Tax Worksheet—Line 8

Use this worksheet only if both of the following apply.

Your elected farm income on your 2023 Schedule J, line 2a, doesn't include any net capital gain.

•

You (a) entered qualified dividends on your 2020 Form 1040, line 3a, or 2020 Form 1040-NR, line 3a; (b) entered capital gain distributions

•

directly on your 2020 Form 1040, line 7, or your 2020 Form 1040-NR, line 7, and weren't required to file Schedule D; or (c) filed Schedule D in

2020 and you answered “Yes” on lines 17 and 20 of that Schedule D.

1. Amount from your 2023 Schedule J, line 7. If for 2020 you filed Form 2555, enter the

amount from line 3 of the 2020 Foreign Earned Income Tax Worksheet . . . . . . . . . . . . . . . 1.

2. Amount from your 2020 Form 1040, line 3a* (or your 2020 Form

1040-NR, line 3a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.

3. Did you file Schedule D in 2020?*

Enter the smaller of line 15 or 16 of your 2020

Schedule D, but don't enter less than -0-.

Yes.

. . . .

3..

Enter the amount from your 2020 Form 1040,

line 7, or 2020 Form 1040-NR, line 7.

No.

4. Add lines 2 and 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5. Amount, if any, from your 2019 Form 4952, line 4g . . . . . . . . . . . . . .

6. Subtract line 5 from line 4. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7. Subtract line 6 from line 1. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8. Enter one of the following three amounts depending on your

filing status.

$40,000 if single or married filing separately.

$80,000 if married filing jointly or qualifying widow(er).

$53,600 if head of household.

•

. . . . . . . . . . 8.

•

9. Enter the smaller of line 1 or line 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

10. Enter the smaller of line 7 or line 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

11. Subtract line 10 from line 9. This amount is taxed at 0% . . . . . . . . . . . . . . . . . . . . . . . . . .

12. Enter the smaller of line 1 or line 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

13. Enter the amount from line 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

14. Subtract line 13 from line 12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

15. Enter one of the following amounts depending on your filing status.

10.

11.

12.

13.

14.

$441,450 if single.

•

$248,300 if married filing separately.

. . . . . . . . . . 15.

•

$496,600 if married filing jointly or qualifying widow(er).

$469,050 if head of household.

16. Enter the smaller of line 1 or line 15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.

17. Add lines 7 and 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.

18. Subtract line 17 from line 16. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18.

19. Enter the smaller of line 14 or line 18 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.

20. Multiply line 19 by 15% (0.15) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.

21. Add lines 11 and 19 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21.

22. Subtract line 21 from line 12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22.

23. Multiply line 22 by 20% (0.20) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23.

24. Figure the tax on the amount on line 7. Use the 2020 Tax Rate Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24.

25. Add lines 20, 23, and 24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.

26. Figure the tax on the amount on line 1. Use the 2020 Tax Rate Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.

27. Tax. Enter the smaller of line 25 or line 26 here and on your 2023 Schedule J, line 8. If for 2020 you filed Form

2555, don't enter this amount on Schedule J, line 8. Instead, enter it on line 4 of the 2020 Foreign Earned Income Tax

Worksheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.

* If for 2020 you filed Form 2555, see the footnote in the 2020 Foreign Earned Income Tax Worksheet before completing this line.

J-5

2020 Foreign Earned Income Tax Worksheet—Line 8

Keep for Your Records

Use this worksheet if you claimed the foreign earned income exclusion or housing exclusion on your 2020 Form 1040 using

Form 2555. However, if Schedule J, line 7, is zero or less, don't complete this worksheet.

1. Enter the amount from your 2023 Schedule J, line 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2a. Enter the amount from your (and your spouse's, if filing jointly) 2020 Form 2555, lines 45 and

50 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2a.

b. Enter the total amount of any itemized deductions or exclusions you could not claim for 2020

because they were related to excluded income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b.

c. Subtract line 2b from line 2a. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3. Add lines 1 and 2c . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4. Figure the tax on the amount on line 3. Use the 2020 Tax Rate Schedules, the 2020 Qualified

Dividends and Capital Gain Tax Worksheet,* or the 2020 Schedule D Tax Worksheet in the 2020

Schedule D instructions,* whichever applies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.

5. Figure the tax on the amount on line 2c. Use the 2020 Tax Rate Schedules . . . . . . . . . . . . . . . . . . . .

6. Subtract line 5 from line 4. Enter the result. If zero or less, enter -0-. Also include this amount on

your 2023 Schedule J, line 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.

* Enter the amount from line 3 above on line 1 of the 2020 Qualified Dividends and Capital Gain Tax Worksheet or the 2020 Schedule D Tax

Worksheet if you use either of those worksheets to figure the tax on line 4 above. Complete the rest of that worksheet through line 6 (line 10 if

you use the Schedule D Tax Worksheet). Next, you must determine if you had a capital gain excess. To find out if you had a capital gain excess,

subtract the amount from your 2023 Schedule J, line 7, from line 6 of your 2020 Qualified Dividends and Capital Gain Tax Worksheet (line 10

of your 2020 Schedule D Tax Worksheet). If the result is more than zero, that amount is your capital gain excess.

If you didn't have a capital gain excess, complete the rest of either of those worksheets according to the worksheet's instructions. Then

complete lines 5 and 6 above.

If you had a capital gain excess, complete a second 2020 Qualified Dividends and Capital Gain Tax Worksheet or 2020 Schedule D Tax

Worksheet (whichever applies) as instructed above but in its entirety and with the following additional modifications. Then complete lines 5

and 6 above. These modifications are to be made only for purposes of filling out the 2020 Foreign Earned Income Tax Worksheet above.

1. Reduce (but not below zero) the amount you would otherwise enter on line 3 of your 2020 Qualified Dividends and Capital Gain Tax

Worksheet or line 9 of your 2020 Schedule D Tax Worksheet by your capital gain excess.

2. Reduce (but not below zero) the amount you would otherwise enter on line 2 of your 2020 Qualified Dividends and Capital Gain Tax

Worksheet or line 6 of your 2020 Schedule D Tax Worksheet by any of your capital gain excess not used in (1) above.

3. Reduce (but not below zero) the amount on your 2020 Schedule D (Form 1040), line 18, by your capital gain excess.

4. Include your capital gain excess as a loss on line 16 of your 2020 Unrecaptured Section 1250 Gain Worksheet in the 2020 Instructions for

Schedule D (Form 1040).

J-6

loss carryover to 2022. This could hap-

pen if the taxable income—shown on

your 2021 Form 1040, 1040-SR, or

Form 1040-NR, line 15 (or as previously

adjusted)—was less than zero. Enter on

line 2 the amount by which your 2021

capital loss carryover to 2022 (the sum

of your short- and long-term capital loss

carryovers) exceeds the excess of the

loss on your 2021 Schedule D, line 16,

over the loss on your 2021 Schedule D,

line 21. If you had any NOL carrybacks

to 2021, be sure you refigured your 2021

capital loss carryover to 2022.

tal loss deduction on Schedule D, line 21

(which was also entered on Form 1040,

line 7), and a $7,000 loss on Sched-

ule D, line 16 (as adjusted). The farmer

also had a $7,000 capital loss carryover

to 2022.

Line 9

If you used Schedule J to figure your tax

for:

2022 (that is, you entered the

•

amount from the 2022 Schedule J,

line 23, on your 2022 Form 1040,

1040-SR, or Form 1040-NR, line 16; or

2022 Form 1040-X, line 6), enter on

line 9 the amount from your 2022

Schedule J, line 15; or

The farmer adds the $3,000 from

Schedule D, line 21, and the $7,000 cap-

ital loss carryover. The farmer subtracts

from the $10,000 result the $7,000 loss

on the Schedule D, line 16, and enters

$3,000 on line 2 of the worksheet.

2021 but not 2022, enter on line 9

the amount from your 2021 Schedule J,

line 3.

•

The farmer enters $14,500 on line 3

of the worksheet, the 2021 NOL from

their 2021 Form 1045, Schedule A,

line 24. Of the $29,900 negative taxable

income, the $0 deduction for the suspen-

ded exemptions, the $3,000 capital loss

deduction, and the farmer’s $12,400

standard deduction weren’t allowed in

figuring the NOL. The farmer had a

$14,500 loss on the 2021 Schedule F, the

only other item on the farmer’s 2021 tax

return.

Line 3. If you had an NOL for 2021,

enter the amount of that NOL from the

2021 Form 1045, Schedule A, line 24,

you filed with Form 1045 or Form

1040-X. If you didn't have an NOL for

2021, enter the portion, if any, of the

NOL carryovers and carrybacks to 2021

that weren't used in 2021 and were car-

ried to years after 2021.

If you figured your tax for both 2021

and 2022 without using Schedule J, en-

ter on line 9 the taxable income from

your 2021 tax return (or as previously

adjusted by the IRS, or corrected on an

amended return). But if that amount is

zero or less, complete the worksheet be-

low to figure the amount to enter on

line 9.

Example. The farmer didn't use in-

come averaging for 2020, 2021, or 2022.

The taxable income on the farmer’s

2021 Form 1040, line 15, is a negative

$29,900. The deduction for exemptions

has been suspended. The farmer sub-

tracts from the $29,900 loss the $0 de-

duction for the suspended exemptions.

The result is a negative $29,900, the

farmer’s 2021 taxable income, which the

farmer enters as a positive amount on

line 1 of the 2021 Taxable Income

Worksheet.

If you didn't file a tax return for

2021, use the amount you would have

reported as your taxable income had you

been required to file a tax return. Be

sure to keep all your records for 2021

until at least 3 years after April 15, 2024

(or the date you file your 2023 tax re-

turn, if later).

The farmer enters $17,500 (the

$3,000 line 2 amount plus the $14,500

line 3 amount) on line 4 and $12,400

(the $29,900 line 1 amount minus the

$17,500 line 4 amount) on line 5. The

farmer enters $12,400 as a negative

amount on Schedule J, line 9. The farm-

er enters $6,000 on Schedule J, line 10,

and a negative $6,200 on Schedule J,

line 11. If the farmer uses Schedule J to

figure their tax for 2024, the farmer will

enter the negative $6,200 amount on

their 2024 Schedule J as the farmer’s

2021 taxable income for income averag-

ing purposes.

Instructions for 2021 Taxable

Income Worksheet

Line 2. Any net capital loss deduction

on your 2021 Schedule D, line 21, isn't

allowed for income averaging purposes

to the extent it didn't reduce your capital

When the farmer filed their 2021 tax

return, the farmer had a $3,000 net capi-

J-7

2021 Taxable Income Worksheet—Line 9

Keep for Your Records

Complete this worksheet if you didn’t use Schedule J to figure your tax for 2022 and your 2021 taxable income was zero or less. See

the instructions above before completing this worksheet.

1. Figure the taxable income from your 2021 tax return (or as previously adjusted) without limiting it to

zero. If you had an NOL for 2021, don't include any NOL carryovers or carrybacks to 2021. Enter the

result as a positive amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.

2. If there is a loss on your 2021 Schedule D, line 21, add that loss (as a positive

amount) and your 2021 capital loss carryover to 2022. Subtract from that sum the

amount of the loss on your 2021 Schedule D, line 16, and enter the result . . . . . . . .

3. If you had an NOL for 2021, enter it as a positive amount. Otherwise, enter as a

positive amount the portion, if any, of the NOL carryovers and carrybacks to 2021

that weren't used in 2021 and were carried to years after 2021 . . . . . . . . . . . . . . . . .

4. Add lines 2 and 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5. Subtract line 4 from line 1. Enter the result as a negative amount on Schedule J, line 9 . . . . . . . . . . . . . . .

J-8

Schedule D Tax Worksheet, lines 42 and

44); or

to figure the tax on the amount on line 3

of the Foreign Earned Income Tax

Worksheet.

Line 12

The 2021 Foreign Earned Income

Tax Worksheet, later.

If line 11 is zero or less, enter -0- on

line 12. Otherwise, figure the tax on the

amount on line 11 using:

•

When completing the Schedule D

Tax Worksheet, you must allocate 1/3 of

the amount on Schedule J, line 2b, (and

1/3 of the amount on line 2c, if any) to

2021. If for 2021 you had a capital loss

that resulted in a capital loss carryover

to 2022, don't reduce the elected farm

income allocated to 2021 by any part of

the carryover.

If your elected farm income includes

net capital gain, you must use the 2021

Schedule D Tax Worksheet to figure the

tax on the amount on line 11. However,

if you filed Form 2555 for 2021, you

must first complete the 2021 Foreign

Earned Income Tax Worksheet, and then

use the 2021 Schedule D Tax Worksheet

The 2021 Tax Rate Schedules be-

•

low;

The 2021 Qualified Dividends and

Capital Gain Tax Worksheet, later;

•

The 2021 Schedule D Tax Work-

•

sheet in the 2021 Schedule D instruc-

tions (but use the 2021 Tax Rate Sched-

ules below when figuring the tax on the

2021 Tax Rate Schedules—Line 12

Schedule X—Use if your 2021 filing status was Single.

Schedule Y-2—Use if your 2021 filing status was Married filing separately.

Enter on

Schedule J,

line 12

Enter on

Schedule J,

line 12

Schedule J,

line 11, is: But not

Over—

of the

Schedule J,

amount line 11, is:

over— Over—

But not

over—

of the amount

over—

$0 $9,950

...........

10%

12%

22%

24%

32%

35%

37%

$0 $9,950

...........

10%

12%

22%

24%

32%

35%

37%

9,950 40,525

$995.00

4,664.00

9,950

40,525

9,950 40,525

40,525 86,375

86,375 164,925

164,925 209,425

209,425 314,150

314,150 ..........

$995.00

4,664.00

9,950

40,525

40,525 86,375

86,375 164,925

164,925 209,425

209,425 523,600

523,600 .............

14,751.00

33,603.00

47,843.00

157,804.25

86,375

14,751.00

33,603.00

47,843.00

84,496.75

86,375

164,925

209,425

523,600

164,925

209,425

314,150

Schedule Y-1—Use if your 2021 filing status was Married

filing jointly or Qualifying widow(er).

Schedule Z—Use if your 2021 filing status was Head of household.

Enter on

Schedule J,

line 12

Enter on

Schedule J,

line 12

Schedule J,

line 11, is: But not

Over—

of the

Schedule J,

amount line 11, is:

over— Over—

But not

over—

of the amount

over—

$0 $19,900

...........

10%

12%

22%

24%

32%

35%

37%

$0 $14,200

...........

10%

12%

22%

24%

32%

35%

37%

14,200

19,900 81,050

81,050 172,750

172,750 329,850

329,850 418,850

418,850 628,300

628,300 ............

$1,990.00

9,328.00

19,900

81,050

14,200 54,200

54,200 86,350

86,350 164,900

164,900 209,400

209,400 523,600

523,600 ...........

$1,420.00

6,220.00

54,200

29,502.00

67,206.00

95,686.00

168,993.50

172,750

329,850

418,850

628,300

13,293.00

32,145.00

46,385.00

156,355.00

86,350

164,900

209,400

523,600

J-9

Keep for Your Records

2021 Qualified Dividends and Capital Gain Tax Worksheet—Line 12

Use this worksheet only if both of the following apply.

Your elected farm income on your 2023 Schedule J, line 2a, doesn't include any net capital gain.

•

You (a) entered qualified dividends on your 2021 Form 1040, 1040-SR, or 1040-NR, line 3a; (b) entered capital gain distributions directly on

•

your 2021 Form 1040, 1040-SR, or 1040-NR, line 7, and weren't required to file Schedule D; or (c) filed Schedule D in 2021 and you answered

“Yes” on lines 17 and 20 of that Schedule D.

1. Amount from your 2023 Schedule J, line 11. If for 2021 you filed Form 2555, enter the

amount from line 3 of the 2021 Foreign Earned Income Tax Worksheet . . . . . . . . . . . . . . 1.

2. Amount from your 2021 Form 1040, 1040-SR, or 1040-NR,

line 3a* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.

3. Did you file Schedule D in 2021?*

Enter the smaller of line 15 or 16 of your 2021

Schedule D, but don't enter less than -0-.

Yes.

. . . . . 3.

Enter the amount from your 2021 Form 1040,

1040-SR, or 1040-NR, line 7.

No.

4. Add lines 2 and 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5. Amount, if any, from your 2021 Form 4952, line 4g . . . . . . . . . . .

6. Subtract line 5 from line 4. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7. Subtract line 6 from line 1. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8. Enter one of the following three amounts depending on your

filing status.

$40,400 if single or married filing separately.

$80,800 if married filing jointly or qualifying widow(er).

$54,100 if head of household.

•

. . . . . . . . . . . 8.

•

9. Enter the smaller of line 1 or line 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

10. Enter the smaller of line 7 or line 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

11. Subtract line 10 from line 9. This amount is taxed at 0% . . . . . . . . . . . . . . . . . . . . . . . . .

12. Enter the smaller of line 1 or line 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

13. Enter the amount from line 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

14. Subtract line 13 from line 12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

15. Enter one of the following amounts depending on your filing status.

10.

11.

12.

13.

14.

$445,850 if single.

•

$250,800 if married filing separately.

$501,600 if married filing jointly or qualifying widow(er).

$473,750 if head of household.

. . . . . . . . . . . 15.

•

16. Enter the smaller of line 1 or line 15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.

17. Add lines 7 and 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.

18. Subtract line 17 from line 16. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . 18.

19. Enter the smaller of line 14 or line 18 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.

20. Multiply line 19 by 15% (0.15) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20.

21. Add lines 11 and 19 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21.

22. Subtract line 21 from line 12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22.

23. Multiply line 22 by 20% (0.20) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23.

24. Figure the tax on the amount on line 7. Use the 2021 Tax Rate Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .24.

25. Add lines 20, 23, and 24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25.

26. Figure the tax on the amount on line 1. Use the 2021 Tax Rate Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .26.

27. Tax. Enter the smaller of line 25 or line 26 here and on your 2023 Schedule J, line 12. If for 2021 you filed Form

2555, don't enter this amount on Schedule J, line 12. Instead, enter it on line 4 of the 2021 Foreign Earned Income

Tax Worksheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27.

* If for 2021 you filed Form 2555, see the footnote in the 2021 Foreign Earned Income Tax Worksheet before completing this line.

J-10

2021 Foreign Earned Income Tax Worksheet—Line 12

Keep for Your Records

Use this worksheet if you claimed the foreign earned income exclusion or housing exclusion on your 2021 Form 1040 or

1040-SR using Form 2555. However, if Schedule J, line 11, is zero or less, don't complete this worksheet.

1. Enter the amount from your 2023 Schedule J, line 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2a. Enter the amount from your (and your spouse's, if filing jointly) 2021 Form 2555, lines 45 and

50 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2a.

b. Enter the total amount of any itemized deductions or exclusions you could not claim for 2021

because they were related to excluded income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b.

c. Subtract line 2b from line 2a. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3. Add lines 1 and 2c . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4. Figure the tax on the amount on line 3. Use the 2021 Tax Rate Schedules, the 2021 Qualified

Dividends and Capital Gain Tax Worksheet,* or the 2021 Schedule D Tax Worksheet in the 2021

Schedule D instructions,* whichever applies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.

5. Figure the tax on the amount on line 2c. Use the 2021 Tax Rate Schedules . . . . . . . . . . . . . . . . . . . .

6. Subtract line 5 from line 4. Enter the result. If zero or less, enter -0-. Also include this amount on

your 2023 Schedule J, line 12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.

* Enter the amount from line 3 above on line 1 of the 2021 Qualified Dividends and Capital Gain Tax Worksheet or the 2021 Schedule D Tax

Worksheet if you use either of those worksheets to figure the tax on line 4 above. Complete the rest of that worksheet through line 6 (line 10 if

you use the Schedule D Tax Worksheet). Next, you must determine if you had a capital gain excess. To find out if you had a capital gain excess,

subtract the amount from your 2023 Schedule J, line 11, from line 6 of your 2021 Qualified Dividends and Capital Gain Tax Worksheet (line 10

of your 2021 Schedule D Tax Worksheet). If the result is more than zero, that amount is your capital gain excess.

If you didn't have a capital gain excess, complete the rest of either of those worksheets according to the worksheet's instructions. Then

complete lines 5 and 6 above.

If you had a capital gain excess, complete a second 2021 Qualified Dividends and Capital Gain Tax Worksheet or 2021 Schedule D Tax

Worksheet (whichever applies) as instructed above but in its entirety and with the following additional modifications. Then complete lines 5

and 6 above. These modifications are to be made only for purposes of filling out the 2021 Foreign Earned Income Tax Worksheet above.

1. Reduce (but not below zero) the amount you would otherwise enter on line 3 of your 2021 Qualified Dividends and Capital Gain Tax

Worksheet or line 9 of your 2021 Schedule D Tax Worksheet by your capital gain excess.

2. Reduce (but not below zero) the amount you would otherwise enter on line 2 of your 2021 Qualified Dividends and Capital Gain Tax

Worksheet or line 6 of your 2021 Schedule D Tax Worksheet by any of your capital gain excess not used in (1) above.

3. Reduce (but not below zero) the amount on your 2021 Schedule D (Form 1040), line 18, by your capital gain excess.

4. Include your capital gain excess as a loss on line 16 of your 2021 Unrecaptured Section 1250 Gain Worksheet in the 2021 Instructions for

Schedule D (Form 1040).

J-11

if you could have entered a negative

amount on that line. Enter on line 2 the

amount by which your 2022 capital loss

carryover to 2023 (the sum of your

short- and long-term capital loss carry-

overs) exceeds the excess of the loss on

your 2022 Schedule D, line 16, over the

loss on your 2022 Schedule D, line 21.

tal loss deduction on Schedule D, line 21

(which was also entered on Form 1040,

line 7); a $7,000 loss on Schedule D,

line 16; and a $5,000 capital loss carry-

over to 2023 (the farmer’s 2022 capital

loss carryover to 2023 was $5,000, not

$4,000, because the amount on the Form

1040, line 15, would have been a nega-

tive $1,000 if the farmer could have en-

tered a negative number on that line).

The farmer adds the $3,000 from Sched-

ule D, line 21, and the $5,000 carryover.

The farmer subtracts from the $8,000 re-

sult the $7,000 loss on the Schedule D,

line 16, and enters $1,000 on line 2 of

the worksheet.

Line 13

If you used Schedule J to figure your tax

for 2022 (that is, you entered the amount

from the 2022 Schedule J, line 23, on

your 2022 Form 1040, 1040-SR, or

1040-NR, line 16; or on Form 1040-X,

line 6, for 2022), enter on line 13 the

amount from your 2022 Schedule J,

line 3.

Line 3. If you had an NOL for 2022,

enter the amount of that NOL from the

2022 Form 1045, Schedule A, line 24,

you filed with Form 1045 or Form

1040-X. If you didn't have an NOL for

2022, enter the portion, if any, of the

NOL carryovers and carrybacks to 2022

that weren't used in 2022 and were car-

ried to years after 2022.

If you didn't use Schedule J to figure

your tax for 2022, enter on line 13 the

taxable income from your 2022 tax re-

turn (or as previously adjusted by the

IRS, or corrected on an amended return).

But if that amount is zero or less, com-

plete the worksheet below to figure the

amount to enter on line 13.

The farmer enters -0- on line 3 of the

worksheet because the farmer doesn't

have an NOL for 2022 and didn't have

an NOL carryover from 2022 available

to carry to 2023 and later years. The

NOL deduction for 2022 of $5,150 was

reduced to zero because it didn't exceed

the farmer’s modified taxable income of

$7,150. Modified taxable income is fig-

ured by adding back the $3,000 net capi-

tal loss deduction to taxable income (fig-

ured without regard to the NOL deduc-

tion) of $4,150. The farmer enters

$1,000 on line 4 and $0 on line 5 of the

worksheet. The farmer enters $0 on

Schedule J, line 13. The farmer enters

$6,000 on Schedule J, line 14, and

$6,000 on Schedule J, line 15. If the

farmer uses Schedule J to figure the

farmer’s tax for 2024, the farmer will

enter $6,000 on the farmer’s 2024

Schedule J as the 2022 taxable income

for income averaging purposes.

Example. The farmer didn't use in-

come averaging for 2020, 2021, or 2022.

The taxable income on the farmer’s

2022 Form 1040, line 15, would have

been a negative $1,000 if the farmer

could have entered a negative number

on that line. This amount includes an

NOL deduction on the farmer’s 2022

Schedule 1 (Form 1040), line 8a, of

$5,150. The $5,150 is the portion of the

2021 NOL that was remaining from

2020 to be carried to 2022. See the ex-

amples earlier. The farmer’s taxable in-

come is limited to zero and the farmer

doesn’t have an NOL for 2022. The re-

sult is a negative $1,000, the farmer’s

2022 taxable income, which the farmer

enters as a positive amount on line 1 of

the 2022 Taxable Income Worksheet.

If you didn't file a tax return for

2022, use the amount you would have

reported as your taxable income had you

been required to file a tax return. Be

sure to keep all your records for 2022

until at least 3 years after April 15, 2024

(or the date you file your 2023 tax re-

turn, if later).

Instructions for 2022 Taxable

Income Worksheet

Line 2. Any net capital loss deduction

on your 2022 Schedule D, line 21, isn't

allowed for income averaging purposes

to the extent it didn't reduce your capital

loss carryover to 2023. This could hap-

pen if the taxable income—shown on

your 2022 Form 1040, 1040-SR, or

1040-NR, line 15 (or as previously ad-

justed)—would have been less than zero

When the farmer filed the 2022 tax

return, the farmer had a $3,000 net capi-

2022 Taxable Income Worksheet—Line 13

Keep for Your Records

Complete this worksheet if your 2022 taxable income was zero or less. See the instructions above before completing this worksheet.

1. Figure the taxable income from your 2022 tax return (or as previously adjusted) without limiting it to

zero. If you had an NOL for 2022, don't include any NOL carryovers or carrybacks to 2022. Enter the

result as a positive amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.

2. If there is a loss on your 2022 Schedule D, line 21, add that loss (as a positive

amount) and your 2022 capital loss carryover to 2023. Subtract from that sum the

amount of the loss on your 2022 Schedule D, line 16, and enter the result . . . . . . . .

3. If you had an NOL for 2022, enter it as a positive amount. Otherwise, enter as a

positive amount the portion, if any, of the NOL carryovers and carrybacks to 2022

that weren't used in 2022 and were carried to years after 2022 . . . . . . . . . . . . . . . . .

4. Add lines 2 and 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5. Subtract line 4 from line 1. Enter the result as a negative amount on Schedule J, line 13 . . . . . . . . . . . . . .

J-12

ule D Tax Worksheet, lines 44 and 46);

to figure the tax on the amount on line 3

of the Foreign Earned Income Tax

Worksheet.

Line 16

The 2022 Foreign Earned Income

Tax Worksheet, later.

If line 15 is zero or less, enter -0- on

line 16. Otherwise, figure the tax on the

amount on line 15 using:

•

When completing the Schedule D

Tax Worksheet, you must allocate 1/3 of

the amount on Schedule J, line 2b, (and

1/3 of the amount on line 2c, if any) to

2022. If for 2022 you had a capital loss

that resulted in a capital loss carryover

to 2023, don't reduce the elected farm

income allocated to 2022 by any part of

the carryover.

If your elected farm income includes

net capital gain, you must use the 2022

Schedule D Tax Worksheet to figure the

tax on the amount on line 15. However,

if you filed Form 2555 for 2022, you

must first complete the 2022 Foreign

Earned Income Tax Worksheet and then

use the 2022 Schedule D Tax Worksheet

The 2022 Tax Rate Schedules be-

•

low;

The 2022 Qualified Dividends and

Capital Gain Tax Worksheet, later;

•

The 2022 Schedule D Tax Work-

•

sheet in the 2022 Schedule D instruc-

tions (but use the 2022 Tax Rate Sched-

ules when figuring the tax on the Sched-

2022 Tax Rate Schedules—Line 16

Schedule X—Use if your 2022 filing status was Single.

Schedule Y-2—Use if your 2022 filing status was Married filing separately.

Enter on

Schedule J,

line 16

Enter on

Schedule J,

line 16

Schedule J,

line 15, is: But not

of the

Schedule J,

But

not

amount line 15, is:

of the amount

over—

Over—

over—

over— Over—

over—

$0 $10,275

...........

10%

12%

22%

24%

32%

35%

37%

$0 $10,275

...........

10%

12%

22%

24%

32%

35%

37%

10,275 41,775

41,775 89,075

89,075 170,050

170,050 215,950

215,950 539,900

539,900 .............

$1,075.50

4,807.50

10,275

41,775

10,275 41,775

41,775 89,075

89,075 170,050

170,050 215,950

215,950 323,925

323,925 ..........

$1,027.50

4,807.50

10,275

41,775

15,213.50

34,647.50

49,335.50

162,718.00

89,075

15,213.50

34,647.50

49,335.50

87,126.75

89,075

170,050

215,950

539,900

170,050

215,950

323,925

Schedule Y-1—Use if your 2022 filing status was Married

filing jointly or Qualifying surviving spouse.

Schedule Z—Use if your 2022 filing status was Head of household.

Enter on

Schedule J,

line 16

Enter on

Schedule J,

line 16

Schedule J,

line 15, is: But not

of the

Schedule J,

But

not

amount line 15, is:

of the amount

over—

Over—

over—

over— Over—

over—

$0 $20,550

...........

10%

12%

22%

24%

32%

35%

37%

$0 $14,650

...........

10%

12%

22%

24%

32%

35%

37%

14,650

20,550 83,550

83,550 178,150

178,150 340,100

340,100 431,900

431,900 647,850

647,850 ............

$2,055.00

9,615.00

20,550

83,550

14,650 55,900

55,900 89,050

89,050 170,050

170,050 215,950

215,950 539,900

539,900 ...........

$1,465.00

6,415.00

55,900

30,427.00

69,295.00

98,671.00

174,253.50

178,150

340,100

431,900

647,850

13,708.00

33,148.00

47,836.00

161,218.50

89,050

170,050

215,950

539,900

J-13

Keep for Your Records

2022 Qualified Dividends and Capital Gain Tax Worksheet—Line 16

Use this worksheet only if both of the following apply.

Your elected farm income on your 2023 Schedule J, line 2a, doesn't include any net capital gain.

•

You (a) entered qualified dividends on your 2022 Form 1040, 1040-SR, or 1040-NR, line 3a; (b) entered capital gain distributions directly on

•

your 2022 Form 1040, 1040-SR, or 1040-NR, line 7, and weren't required to file Schedule D; or (c) filed Schedule D in 2022 and you answered

“Yes” on lines 17 and 20 of that Schedule D.

1. Amount from your 2023 Schedule J, line 15. If for 2022 you filed Form 2555, enter the

amount from line 3 of the 2022 Foreign Earned Income Tax Worksheet . . . . . . . . . . . . . . . 1.

2. Amount from your 2022 Form 1040, 1040-SR, or 1040-NR,

line 3a* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.

3. Did you file Schedule D in 2022?*

Enter the smaller of line 15 or 16 of your 2022

Schedule D, but don't enter less than -0-.

Yes.

. . . . .

Enter the amount from your 2022 Form 1040,

1040-SR, or 1040-NR, line 7.

No.

4. Add lines 2 and 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5. Amount, if any, from your 2022 Form 4952, line 4g . . . . . . . . . . . . .

6. Subtract line 5 from line 4. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7. Subtract line 6 from line 1. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8. Enter one of the following three amounts depending on your

filing status.

$41,675 if single or married filing separately.

$83,350 if married filing jointly or qualifying surviving spouse.

$55,800 if head of household.

•

. . . . . . . . . . 8.

•

9. Enter the smaller of line 1 or line 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

10. Enter the smaller of line 7 or line 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

11. Subtract line 10 from line 9. This amount is taxed at 0% . . . . . . . . . . . . . . . . . . . . . . . . . .

12. Enter the smaller of line 1 or line 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

13. Enter the amount from line 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

14. Subtract line 13 from line 12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

15. Enter one of the following amounts depending on your filing status.

10.

11.

12.

13.

14.

$459,750 if single.

•

$258,600 if married filing separately.

. . . . . . . . . . 15.

•

$517,200 if married filing jointly or qualifying surviving spouse.

$488,500 if head of household.