I am not required to file Form T. Where do I enter reforestation expenses in excess of $10,000 per property so that they are properly amortized on Form 4562?

[frank-e-cook]

IRS instructions are to include on Form 4562 Line 42(a)-(f) and amortize over 84 months with 6/84th the first year.

[DavidS127]

To enter your Reforestation expenses:

1. Select Federal on the left panel, then Other Tax Situations tab at the top.
2. Find Business Taxes and Deductions (You may need to select the "see all uncommon situations" to get the Business Taxes and Deductions line to appear)
3. Open the Business Taxes and Deductions dropdown, and you will see Reforestation Amortization as an option. 

[frank-e-cook]

That doesn't produce the desired result. When I click on Reforestation Amortization, the next page is headed Reforestation Deduction with instructions on the deduction and a box to enter the deduction amount. When I click continue, that ends the topic. It never asks for the amounts in excess of the deduction that are to be amortized. Where are those details entered?

[frank-e-cook]

@DavidS127 

Will I receive a reply to my prior reply to your reply?  Do I need to submit my question through a different venue? Or should I switch to a competitor?

[DavidS127]

There is not a box to enter the over $10,000 amount.  Instead, per the instructions in the "Learn More" link on the Reforestation Deduction page, you must calculate the amortization “manually” and add the amortization for the current year and add that to the $10,000, and enter the total in the “Reforestation Deduction” box.  Note that the line above the box is asking for “total …reforestation deduction for 2019”.

Per the instructions in the “Learn More” link on the Reforestation Deduction page, here’s how you would calculate your amortization for 2019:

For example, Denise spent $94,000 on reforestation expenses on April 1, 2019, she can deduct $10,000 this year and amortize the balance of $84,000 over 84 months. For 2019, Denise can deduct $10,000 plus 6 months' amortization of $6,000 ($84,000 / 84 X 6) for a total of $16,000.

In the above example, the total of $16,000 is entered into the “Reforestation deduction” box.

Note that the instructions in the “Learn More” link include a requirement to attach a separate statement for each property for which you amortize reforestation costs.  As a result, you will need to print and mail the tax return with the supporting statement(s).

[frank-e-cook]

@DavidS127 

That is not in accordance with the plain language of the 2018 version of IRS Publication 535, Business Expenses, Chapter 8, Amortization, the section on Reforestation Costs found on pages 33 and 34, which states, "To elect to amortize qualifying reforestation costs, complete Part VI of Form 4562..." Publication 535 is being revised, but it appears only as it applies to the Qualified Business Income Deduction. Unless you can tell me (1) how to properly report these expenses on Form 4562 or (2) that the IRS has eliminated the instructions to use Form 4562 to amortize qualifying reforestation costs, I will use one of your competitors to file my 2019 return.

[DavidS127]

The TurboTax instructions in the “Learn More” link on the Reforestation Deduction page specify exactly the requirement you quoted from IRS Publication 535:

“If you have additional expenses to amortize, you must also attach Form 4562 with Part VI completed. (Note these requirements must be done manually as they are not supported in TurboTax.)”

You must print and mail your return with an attached separate statement for each property for which you amortize reforestation costs and a manually prepared Form 4562 with Part VI completed.
 

[frank-e-cook]

@DavidS127 

I don't pay for tax prep software with the expectation that I will need to manually prepare forms. I'll use one of your competitors. 

[hugh1234]

If I fill in Form 4532 line 42a-f manually, how does the amortization amount get back into the deductions in TurboTax return?

Thanks in advance for any assistance.  I have spent about three hours trying to get this right.  You are correct in that TT will not let me enter anything on line 42, Form 4532.

I just looked up the IRS instructions for Form 4562 and found

"Report the total amortization, including the allowable portion of forestation or reforestation amortization, on the applicable “Other Deductions” or “Other Expenses” line of your return."

I plan on entering my amortized reforestation amount on Line 19 of Schedule E, filing manually and including Form 4532.  If is is not correct, please let me know.

Thanks,

Hugh