Contents Introduction  ........................................ 1 Important Changes for 1999  ............. 2 Important Changes for 2000  ............. 2 Important Reminders  ......................... 2 Important Dates  .................................. 3 Chapter 1.   Importance of Good Records  .... 4 2.   Filing Requirements and Return Forms  ........................................... 5 3.   Accounting Periods and Methods ........................................ 10 4.   Farm Income  ................................ 14 5.   Farm Business Expenses   .......... 23 6.   Soil and Water Conservation Expenses ...................................... 32 7.   Basis of Assets  ........................... 34 8.   Depreciation, Depletion, and Amortization  ................................ 39 9.   General Business Credit  ............ 52 10.   Gains and Losses  ....................... 55 11.   Dispositions of Property Used in Farming  ........................................ 63 12.   Installment Sales  ......................... 67 13.   Casualties, Thefts, and Condemnations  ........................... 71 14.   Alternative Minimum Tax   ........... 76 15.   Self-Employment Tax  .................. 78 16.   Employment Taxes   ..................... 83 17.   Retirement Plans  ......................... 86 18.   Excise Taxes  ................................ 90 19.   Your Rights as a Taxpayer   ........ 94 20.   Sample Return  ............................. 95 21.   How To Get More Information  ... 113 Index  .................................................... 114 Introduction You are in the business of farming if you cul- tivate, operate, or manage a farm for profit, either as owner or tenant.    A farm includes stock,   dairy,   poultry,   fish,   fruit,   and   truck farms. It also includes plantations, ranches, ranges, and orchards. This publication explains how the federal tax laws apply to farming. Use this publication as a guide to figure your taxes and complete your farm tax return. If you need more infor- mation on a subject, get the specific IRS tax publication covering that subject. We refer to many of these free publications throughout this publication. See chapter 21 for informa- tion on ordering these publications. Department of the Treasury Internal Revenue Service Publication 225 Cat. No. 11049L Farmer's Tax Guide For use in preparing 1999  Returns Acknowledgment  The  valuable  advice  and  assistance  given  us each year by the National Farm Income Tax Extension Committee is gratefully acknowledged.