J-1 Cat. No. 25514J 1999 Instructions for Schedule J, Farm Income Averaging Use Schedule J (Form 1040) to elect to figure your 1999 tax by averaging, over the previous 3 years, all or part of your 1999 taxable income from your trade or business of farming. Making this election may give you a lower tax if your 1999 income from farming is high and your taxable income for one or more of the 3 prior years was low. General Instructions If you owe alternative minimum tax   (AMT)   for   1999   (figured without  regard  to  farm  income averaging), filing Schedule J will not reduce your total tax for 1999. Filing Schedule  J  may,  however,  increase  your credit for prior year minimum tax in a later tax year. You will need copies of your income tax returns for 1996, 1997, and 1998 to figure your tax on Schedule J. If you do not have copies of those returns, you can get them by filing Form 4506. See your Form 1040 in- struction booklet to find out how to get this form. This election does not aply when figuring your tentative minimum tax on Form 6251 (i.e., you cannot average your AMT farm income). In addition, you do not have to recompute, because of this election, the tax liability  of  any  minor  child  who  was  re- quired to use your tax rates in the prior years. Specific Instructions Line 2 Elected Farm Income To figure elected farm income, first figure your taxable income from farming. Taxable income from farming includes all income, gains, losses, and deductions attributable to any farming business. However, it does not include gain from the sale or other disposi- tion of land. Generally, farm income, gains, losses, and deductions are reported on:   Schedule D,   Schedule E, Part II,   Schedule F, and   Form 4797. Your elected farm income is the amount of your taxable income from farming that you choose to include on line 2. You do not have to include all of your taxable income from farming on line 2. It may be to your advantage   to   include   less   than   the   full amount, depending on how the amount you include on line 2 affects your tax bracket for the current and prior 3 tax years. If your taxable income from farming is more than the amount shown on line 1, you should not enter on line 2 more than the amount shown on line 1. Otherwise, you may not receive the maximum benefit from income averaging. Farming Business.  A farming business is the trade or business of cultivating land or raising or harvesting any agricultural or hor- ticultural commodity. This includes:   Operating a nursery or sod farm.   Raising or harvesting of trees bearing fruits, nuts, or other crops.   Raising ornamental trees (but not ever- green trees that are more than 6 years old when severed from the roots).   Raising, shearing, feeding, caring for, training, and managing animals. A farming business does not include:   Contract harvesting of an agricultural or horticultural commodity grown or raised by another.   Merely  buying  or  reselling  plants  or animals grown or raised by another. Line 4 Figure the tax on the amount on line 3 using the 1999 Tax Table, Tax Rate Schedules, or Capital Gain Tax Worksheet from your 1999 Form   1040   instruction   booklet,   or   use Schedule D. Enter the tax on line 4. Lines 5, 9, and 13 If you used the 1998 Schedule J to figure your tax and included the amount from line 22 of that Schedule J on your 1998 Form 1040, line 40, enter the amount from the appropriate line of that Schedule J on lines 5, 9, and 13. Otherwise, enter your taxable income for the applicable year. If you did not file a tax return for 1996, 1997, or 1998, enter the amount you would have reported as  your  taxable  income  had  you  filed  a return. If you filed your 1996, 1997, or 1998 tax return using TeleFile, enter your taxable income from line J of your TeleFile Tax Record. If you amended your return or the IRS made changes to it, enter the corrected amount. Note. Do not enter less than zero on line 5, 9, or 13.