You are in the business of farming if you cultivate, operate, or manage a farm for profit, either as an owner or a tenant. You are in the business of farming if you harvest fruits and vegetables. In addition, you are considered a farmer if your business includes stock, dairy, poultry and fish. You're considered a farmer if your venture includes plantations, ranches, ranges, orchards, and truck farms. Use this topic to figure your taxes and complete your farm tax return. In this topic you will learn how the federal tax law applies to farming.

Material needed to complete this assignment:

You will need IRS Publication 225 and IRS Publication 538 to complete the questions for this topic.

Please answer the following as accurately as possible.

1. For tax year 2011, farm income averaging may be elected as a tax computation method:

A. Only before March 1 of the year following the end of the tax year.
B. Even if the time for filing a claim has expired for that election year.
C. After the due date of the return, such as an IRS audit adjustment.
D. Only if you were engaged in farming in the election year and all of the base years.

pub 225 page

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