U.S. Individual Income Tax Return

Department of the Treasury
Internal Revenue Service

2011 Instructions for Schedule J
Use Schedule J (Form 1040) to elect to figure your 2011 income tax by averaging, over the
previous 3 years (base years), all or part of your 2011 taxable income from your trade or
Income
business of farming or fishing. This election may give you a lower tax if your 2011 income
from farming or fishing is high and your taxable income for one or more of the 3 prior years
Averaging for
was low.
In order to qualify for this election, you are not required to have been in the business of
farming or fishing during any of the base years.
Farmers and
You may elect to average farming or fishing income even if your filing status was not the
same in the election year and the base years.
Fishermen
This election does not apply when figuring your alternative minimum tax on Form 6251.
Also, you do not have to recompute, because of this election, the tax liability of any minor
child who was required to use your tax rates in the prior years.

What’s New
The IRS has created a page on IRS.gov for
information about Form 1040 and its instructions, at www.irs.gov/form1040. Information about any future developments
affecting Form 1040 (such as legislation
enacted after we release it) will be posted
on that page.

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.

only if the compensation is based on a share
of the catch (or a share of the proceeds from
the sale of the catch).
The word fish means finfish, mollusks,
crustaceans, and all other forms of marine
animal and plant life other than marine
mammals and birds.

A farming business does not include:

General Instructions
Prior Year Tax Returns
You may need copies of your original or
amended income tax returns for 2008,
2009, and 2010 to figure your tax on
Schedule J.
If you need copies of your tax returns,
use Form 4506. There is a $57 fee (subject
to change) for each return requested. If
your main home, principal place of business, or tax records are located in a federally declared disaster area, this fee will be
waived. If you want a free transcript of
your tax return or account, use Form
4506-T. See your Form 1040 instructions
to find out how to get these forms.
Keep a copy of your 2011 income tax
return to use for income averaging in 2012,
2013, or 2014.

Definitions
Farming business. A farming business is

the trade or business of cultivating land or
raising or harvesting any agricultural or
horticultural commodity. This includes:
1. Operating a nursery or sod farm;
2. Raising or harvesting of trees bearing
fruits, nuts, or other crops;
3. Raising ornamental trees (but not evergreen trees that are more than 6 years old
when severed from the roots);
4. Raising, shearing, feeding, caring for,
training, and managing animals; and

• Contract harvesting of an agricultural

or horticultural commodity grown or raised
by someone else, or
• Merely buying or reselling plants or
animals grown or raised by someone else.

Fishing business. A fishing business is the

trade or business of fishing in which the
fish harvested, either in whole or in part,
are intended to enter commerce or enter
commerce through sale, barter, or trade.
This includes:

1. The catching, taking, or harvesting of
fish;
2. The attempted catching, taking, or
harvesting of fish;
3. Any other activity which can reasonably be expected to result in the catching,
taking, or harvesting of fish;
4. Any operations at sea in support of, or
in preparation for, any activity described in
(1) through (3) above;
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 proceeds 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 significant fishing activities resulting in the catch; and
6. Compensation as a crew member on a
vessel engaged in a fishing business, but

J-1
Nov 02, 2011

Cat. No. 25514J

A fishing business does not include any
scientific research activity conducted by a
scientific research vessel.
Settlement from Exxon Valdez litigation. You will be treated as engaged in a
fishing business with respect to any qualified settlement income you received if either of the following applies.

1. You were a plaintiff in the civil action
In re Exxon Valdez, No. 89-095-CV
(HRH) (Consolidated) (D. Alaska); or
2. All of the following apply.
a. You were a beneficiary of a plaintiff
described in (1) above,
b. You acquired the right to receive
qualified settlement income from that
plaintiff, and
c. You were the spouse or an immediate
relative of that plaintiff.
Qualified settlement income is any taxable interest and punitive damage awards
you received (whether as lump sums or periodic payments) in connection with the
Exxon Valdez civil action described above.
Qualified settlement income includes all
such awards, whether received before or after the judgment and whether related to a
settlement or a judgment.

Additional Information
See Pub. 225 and Regulations section
1.1301-1 for more information.

Specific Instructions
Line 2a
Elected Farm Income
To figure your elected farm income, first
figure your taxable income from farming 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.
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 cessation 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 disposition within 1 year of the cessation is considered to be within a reasonable
time.
Elected farm income does not 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.
You should find your income, gains,
losses, and deductions from farming or
fishing reported on different tax forms,
such as:
• 2011 Form 1040, line 7, or Form
1040NR, line 8, income from wages and
other compensation you received (a) as a
shareholder in an S corporation 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);
• 2011 Form 1040, line 21, or Form
1040NR, line 21, income from Exxon
Valdez litigation;
• 2011 Form 1040, line 27, or Form
1040NR, line 27, deductible part of
self-employment tax, but only to the extent
that deduction is attributable to your farming or fishing business;
• 2011 Form 1040, line 43, or Form
1040NR, line 41, CCF reduction, except 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 are not attributable to your fishing business;
• Schedule C or C-EZ;
• Schedule D;
• Schedule E, Part II;

•
•
•
•

Schedule F;
Form 4797;
Form 4835;
Form 8903, domestic production activities deduction, but only to the extent
that deduction is attributable to your farming or fishing business; and
• Form 8949.
Your elected farm income is the amount
of your taxable income from farming or
fishing that you elect to include on line 2a.
However, you do not have to include all of
your taxable income from farming or fishing on line 2a. It may 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.
If you received certain subsidies in
2011, your elected farm income cannot include excess farm losses. See the Instructions for Schedule F (Form 1040).
Your elected farm income cannot exceed your taxable income.

Lines 2b and 2c
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 long-term capital
gain over net short-term capital loss.
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 cannot exceed the smaller of
your total net capital gain or the net capital
gain attributable to your farming or fishing
business.
Line 2c. Enter on line 2c the smaller of

line 2b or the unrecaptured section 1250
gain attributable to your farming or fishing
business, if any.

Line 4
Figure the tax on the amount on line 3 using:
• The 2011 Tax Table, Tax Computation Worksheet, or Qualified Dividends
and Capital Gain Tax Worksheet from the
2011 Instructions for Form 1040 or Form
1040NR;
• The 2011 Foreign Earned Income Tax
Worksheet from the 2011 Instructions for
Form 1040; or
• The Schedule D Tax Worksheet in the
2011 Instructions for Schedule D.
Enter the tax on line 4.

Line 5
If you used Schedule J to figure your tax
for:

J-2

• 2010 (that is, you entered the amount
from the 2010 Schedule J, line 23, on line
44 of your 2010 Form 1040, on line 42 of
your 2010 Form 1040NR, or on Form
1040X for 2010), enter on line 5 the
amount from your 2010 Schedule J, line 11.
• 2009 but not 2010, enter on line 5 the
amount from your 2009 Schedule J, line 15.
• 2008 but not 2009 or 2010, enter on
line 5 the amount from your 2008 Schedule
J, line 3.
If you figured your tax for 2008, 2009,
and 2010 without using Schedule J, enter
on line 5 the taxable income from your
2008 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 2008 Taxable Income Worksheet to figure the amount to enter on line
5.
If you did not file a tax return for 2008,
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 2008 for at least 3 years after
April 17, 2012 (or the date you file your
2011 tax return, if later).

Instructions for 2008 Taxable
Income Worksheet
Line 2. Any net capital loss deduction on

your 2008 Schedule D, line 21, is not allowed for income averaging purposes to the
extent it did not reduce your capital loss
carryover to 2009. This could happen if the
taxable income before subtracting exemptions — shown on your 2008 Form 1040,
line 41, or your 2008 Form 1040NR, line
38 (or as previously adjusted) — was less
than zero. Enter on line 2 the amount by
which your 2008 capital loss carryover to
2009 (the sum of your short- and long-term
capital loss carryovers) exceeds the excess
of the loss on your 2008 Schedule D, line
16, over the loss on your 2008 Schedule D,
line 21. If you had any Net Operating Loss
(NOL) carrybacks to 2008, be sure you
refigured your 2008 capital loss carryover
to 2009.
Line 3. If you had an NOL for 2008, enter

the amount of that NOL from line 25 of the
2008 Form 1045, Schedule A, you filed
with Form 1045 or Form 1040X. If you did
not have an NOL for 2008, enter the portion, if any, of the NOL carryovers and carrybacks to 2008 that were not used in 2008
and were carried to years after 2008.
Example. John Farmington, who is single,

did not use income averaging for 2008,
2009, or 2010. For 2011, John has $18,000
of elected farm income on Schedule J, line
2a. The taxable income before subtracting
exemptions on his 2008 Form 1040, line
41, is $4,350. A deduction for exemptions
of $3,500 is shown on line 42, and line 43,
taxable income, is $850. However, John
had a $21,200 NOL for 2009, $9,000 of
which was remaining to carry to 2008 after
the NOL was carried back to 2007. To

complete line 1 of the 2008 Taxable Income Worksheet, John combines the
$9,000 NOL deduction with the $850 from
his 2008 Form 1040, line 43. The result is a
negative $8,150, John’s 2008 taxable income, which he enters as a positive amount
on line 1 of the 2008 Taxable Income
Worksheet.
When John filed his 2008 tax return, he
had a $3,000 net capital loss deduction on
Schedule D, line 21 (which was also entered on Form 1040, line 13), a $7,000 loss
on Schedule D, line 16, and a $4,000 capital loss carryover to 2009. However, when

John carried back the 2009 NOL ($9,000 of
which was carried to 2008), he refigured
his 2008 capital loss carryover to 2009 as
$7,000. John adds the $3,000 from Schedule D, line 21, and the $7,000 carryover. He
subtracts from the $10,000 result the
$7,000 loss on his Schedule D, line 16, and
enters $3,000 on line 2 of the worksheet.
John had $850 of taxable income in
2008 that reduced the 2009 NOL carryback. The $3,500 exemption deduction
and $3,000 net capital loss deduction also
reduced the amount of the 2009 NOL car-

2008 Taxable Income Worksheet—Line 5

ryback. As a result, only $1,650 was available to carry to 2010 and later years, as
shown on line 10 of his 2009 Form 1045,
Schedule B. John enters the $1,650 on line
3 of the worksheet, and $4,650 ($1,650 plus
the $3,000 line 2 amount) on line 4. He then
subtracts the $4,650 from the $8,150 on
line 1 and enters the result, $3,500, on line
5 of the worksheet. He enters a negative
$3,500 on Schedule J, line 5. He combines
that amount with the $6,000 on Schedule J,
line 6, and enters $2,500 on Schedule J, line
7.

Keep for Your Records

Complete this worksheet if you did not use Schedule J to figure your tax for 2009 and 2010 and your 2008 taxable income was
zero or less. See the instructions above before completing this worksheet for line 5.
1. Figure the taxable income from your 2008 tax return (or as previously adjusted) without limiting it to
zero. If you had an NOL for 2008, do not include any NOL carryovers or carrybacks to 2008. Enter
the result as a positive amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2. If there is a loss on your 2008 Schedule D, line 21, add that loss (as a positive
amount) and your 2008 capital loss carryover to 2009. Subtract from that sum the
amount of the loss on your 2008 Schedule D, line 16, and enter the result . . . . . . . 2.
3. If you had an NOL for 2008, enter it as a positive amount. Otherwise, enter as a
positive amount the portion, if any, of the NOL carryovers and carrybacks to 2008
that were not used in 2008 and were carried to years after 2008 . . . . . . . . . . . . . . 3.
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 . . . . . . . . . . .

J-3

1.

4.
5.

Line 8
If line 7 is zero, enter -0- on line 8. Otherwise, figure the tax on the amount on line 7
using:
• The 2008 Tax Rate Schedules below,
• The 2008 Qualified Dividends and
Capital Gain Tax Worksheet, later,
• The 2008 Schedule D Tax Worksheet
in the 2008 Schedule D instructions (but
use the 2008 Tax Rate Schedules below

when figuring the tax on lines 33 and 35 of
the Schedule D Tax Worksheet), or
• The 2008 Foreign Earned Income Tax
Worksheet, later.
If your elected farm income includes net
capital gain, you must use the 2008 Schedule D Tax Worksheet to figure the tax on
the amount on line 7. However, if you filed
Form 2555 or 2555-EZ for 2008, you must
first complete the 2008 Foreign Earned Income Tax Worksheet, and then use the

2008 Schedule D Tax Worksheet to figure
the tax on the amount on line 3 of that
worksheet.
When completing the Schedule D Tax
Worksheet, you must allocate 1/3 of the
amount on line 2b (and 1/3 of the amount
on line 2c, if any) to 2008. If for 2008 you
had a capital loss that resulted in a capital
loss carryover to 2009, do not reduce the
elected farm income allocated to 2008 by
any part of the carryover.

2008 Tax Rate Schedules—Line 8
Schedule X — Use if your 2008 filing status was Single or you checked
filing status box 1 or 2 on Form 1040NR
If Schedule J,
line 7, is:
Over —

But not
over —

$0
8,025
32,550
78,850
164,550
357,700

$8,025
32,550
78,850
164,550
357,700
.............

of the
amount
over —

Enter on
Schedule J,
line 8
...........
$802.50 +
4,481.25 +
16,056.25 +
40,052.25 +
103,791.75 +

10%
15%
25%
28%
33%
35%

$0
8,025
32,550
78,850
164,550
357,700

Schedule Y-1 — Use if your 2008 filing status was Married filing
jointly or Qualifying widow(er) or you checked filing
status box 6 on Form 1040NR
If Schedule J,
line 7, is:
Over —

But not
over —

$0
16,050
65,100
131,450
200,300
357,700

$16,050
65,100
131,450
200,300
357,700
............

of the
amount
over —

Enter on
Schedule J,
line 8
...........
$1,605.00 +
8,962.50 +
25,550.00 +
44,828.00 +
96,770.00 +

10%
15%
25%
28%
33%
35%

$0
16,050
65,100
131,450
200,300
357,700

Schedule Y-2 — Use if your 2008 filing status was Married filing
separately or you checked filing status box 3, 4, or 5 on
Form 1040NR
If Schedule J,
line 7, is:
Over —
$0
8,025
32,550
65,725
100,150
178,850

But not
over —
$8,025
32,550
65,725
100,150
178,850
.............

of the
amount
over —

Enter on
Schedule J,
line 8
...........
$802.50 +
4,481.25 +
12,775.00 +
22,414.00 +
48,385.00 +

10%
15%
25%
28%
33%
35%

$0
8,025
32,550
65,725
100,150
178,850

Schedule Z — Use if your 2008 filing status was Head of household
If Schedule J,
line 7, is:
Over —
$0
11,450
43,650
112,650
182,400
357,700

J-4

But not
over —

Enter on
Schedule J,
line 8

$11,450
43,650
112,650
182,400
357,700
.............

...........
$1,145.00 +
5,975.00 +
23,225.00 +
42,755.00 +
100,604.00 +

of the
amount
over —
10%
15%
25%
28%
33%
35%

$0
11,450
43,650
112,650
182,400
357,700

2008 Qualified Dividends and Capital Gain Tax Worksheet—Line 8

Keep for Your Records

Use this worksheet only if both of the following apply.
• Your elected farm income on your 2011 Schedule J, line 2a, does not include any net capital gain.
• You (a) entered qualified dividends on your 2008 Form 1040, line 9b (or your 2008 Form 1040A, line 9b, or 2008 Form
1040NR, line 10b); (b) entered capital gain distributions directly on your 2008 Form 1040, line 13 (or your 2008 Form
1040A, line 10, or 2008 Form 1040NR, line 14) and were not required to file Schedule D; or (c) filed Schedule D in 2008 and
you answered “Yes” on lines 17 and 20 of that Schedule D.
1. Amount from your 2011 Schedule J, line 7. If for 2008 you filed Form 2555 or
2555-EZ, enter the amount from line 3 of the 2008 Foreign Earned Income Tax
Worksheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.
2. Amount from your 2008 Form 1040, line 9b* (or your
2008 Form 1040A, line 9b, or 2008 Form 1040NR, line
10b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2.
3. Did you file Schedule D in 2008?*
Yes. Enter the smaller of line 15 or 16 of your
2008 Schedule D, but do not enter less than
-03.
No. Enter the amount from your 2008 Form 1040,
line 13 (or your 2008 Form 1040A, line 10,
or 2008 Form 1040NR, line 14)
4. Add lines 2 and 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.
5. Amount, if any, from your 2008 Form 4952, line 4g . . . .
5.
6. Subtract line 5 from line 4. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . . . . 6.
7. Subtract line 6 from line 1. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . . . . 7.
8. Enter the smaller of:
• The amount on line 1, or
• $32,550 if single or married filing separately or if you
checked filing status box 1, 2, 3, 4, or 5 on Form 1040NR; . . . . . . . . . . . 8.
$65,100 if married filing jointly or qualifying widow(er)
or if you checked filing status box 6 on Form 1040NR;
$43,650 if head of household.
9. Is the amount on line 7 equal to or more than the amount on line 8?
Yes. Skip lines 9 and 10; go to line 11 and check the ‘‘No’’ box.
No. Enter the amount from line 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.
10. Subtract line 9 from line 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.
11. Are the amounts on lines 6 and 10 the same?
Yes. Skip lines 11 through 14; go to line 15.
No. Enter the smaller of line 1 or line 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.
12. Enter the amount from line 10 (if line 10 is blank, enter -0-) . . . . . . . . . . . . . . . 12.
13. Subtract line 12 from line 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.
14. Multiply line 13 by 15% (.15) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.
15. Figure the tax on the amount on line 7. Use the 2008 Tax Rate Schedules . . . . . . . . . . . . . . . . . . . . 15.
16. Add lines 14 and 15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.
17. Figure the tax on the amount on line 1. Use the 2008 Tax Rate Schedules . . . . . . . . . . . . . . . . . . . . 17.
18. Tax. Enter the smaller of line 16 or line 17 here and on your 2011 Schedule J, line 8. If for 2008
you filed Form 2555 or 2555-EZ, do not enter this amount on Schedule J, line 8. Instead, enter it on
line 4 of the 2008 Foreign Earned Income Tax Worksheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18.

}

}

*If for 2008 you filed Form 2555 or 2555-EZ, see the footnote in the 2008 Foreign Earned Income Tax Worksheet before completing this
line.

J-5

2008 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 2008 Form 1040 using Form 2555 or
2555-EZ. However, if Schedule J, line 7, is zero or less do not complete this worksheet.
1. Enter the amount from your 2011 Schedule J, line 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2. Enter the amount from your (and your spouse’s, if filing jointly) 2008 Form 2555, lines 45 and 50, or Form
2555-EZ, line 18 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3. Add lines 1 and 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4. Tax on the amount on line 3. Use the 2008 Tax Rate Schedules, the 2008 Qualified Dividends and Capital
Gain Tax Worksheet,* or the 2008 Schedule D Tax Worksheet in the 2008 Schedule D instructions,*
whichever applies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5. Tax on the amount on line 2. Use the 2008 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 2011
Schedule J, line 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . 1.
. . 2.
. . 3.

. . 4.
. . 5.
. . 6.

*Enter the amount from line 3 above on line 1 of the 2008 Qualified Dividends and Capital Gain Tax Worksheet or the 2008 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 2011
Schedule J, line 7, from line 6 of your 2008 Qualified Dividends and Capital Gain Tax Worksheet (line 10 of your 2008 Schedule D Tax Worksheet). If the
result is more than zero, that amount is your capital gain excess.
If you did not 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 2008 Qualified Dividends and Capital Gain Tax Worksheet or 2008 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 2008 Foreign Earned Income Tax Worksheet above.
1. Reduce (but not below zero) the amount you would otherwise enter on line 3 of your 2008 Qualified Dividends and Capital Gain Tax Worksheet or line 9
of your 2008 Schedule D Tax Worksheet by your capital gain excess.
2. Reduce (but not below zero) the amount you would otherwise enter on your 2008 Form 1040, line 9b, by any of your capital gain excess not used in (1)
above.
3. Reduce (but not below zero) the amount on your 2008 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 2008 Unrecaptured Section 1250 Gain Worksheet in the 2008 Instructions for Schedule D
(Form 1040).

J-6

Line 9
If you used Schedule J to figure your tax
for:
• 2010 (that is, you entered the amount
from the 2010 Schedule J, line 23, on line
44 of your 2010 Form 1040, on line 42 of
2010 Form 1040NR, or on Form 1040X for
2010), enter on line 9 the amount from your
2010 Schedule J, line 15.
• 2009 but not 2010, enter on line 9 the
amount from your 2009 Schedule J, line 3.
If you figured your tax for both 2009
and 2010 without using Schedule J, enter
on line 9 the taxable income from your
2009 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 below to figure the
amount to enter on line 9.
If you did not file a tax return for 2009,
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 2009 until at least 3 years after
April 17, 2012 (or the date you file your
2011 tax return, if later).

Instructions for 2009 Taxable
Income Worksheet
Line 2. Any net capital loss deduction on

your 2009 Schedule D, line 21, is not allowed for income averaging purposes to the
extent it did not reduce your capital loss
carryover to 2010. This could happen if the

taxable income before subtracting exemptions — shown on your 2009 Form 1040,
line 41, or your 2009 Form 1040NR, line
38 (or as previously adjusted) — was less
than zero. Enter on line 2 the amount by
which your 2009 capital loss carryover to
2010 (the sum of your short- and long-term
capital loss carryovers) exceeds the excess
of the loss on your 2009 Schedule D, line
16, over the loss on your 2009 Schedule D,
line 21. If you had any NOL carrybacks to
2009, be sure you refigured your 2009 capital loss carryover to 2010.
Line 3. If you had an NOL for 2009, enter

the amount of that NOL from line 25 of the
2009 Form 1045, Schedule A, you filed
with Form 1045 or Form 1040X. If you did
not have an NOL for 2009, enter the portion, if any, of the NOL carryovers and carrybacks to 2009 that were not used in 2009
and were carried to years after 2009.
Example. John Farmington did not use in-

come averaging for 2008, 2009, or 2010.
The taxable income before subtracting exemptions on his 2009 Form 1040, line 41,
is a negative $29,900. A deduction for exemptions of $3,650 is shown on line 42,
and line 43, taxable income, is limited to
zero. John subtracts from the $29,900 loss
the $3,650 deduction for exemptions. The
result is a negative $33,550, John’s 2009
taxable income, which he enters as a positive amount on line 1 of the 2009 Taxable
Income Worksheet.

2009 Taxable Income Worksheet—Line 9

When John filed his 2009 tax return, he
had a $3,000 net capital loss deduction on
Schedule D, line 21 (which was also entered on Form 1040, line 13), and a $7,000
loss on Schedule D, line 16 (as adjusted).
He also had a $7,000 capital loss carryover
to 2010. John adds the $3,000 from Schedule D, line 21, and the $7,000 carryover. He
subtracts from the $10,000 result the
$7,000 loss on his Schedule D, line 16, and
enters $3,000 on line 2 of the worksheet.
John enters $21,200 on line 3 of the
worksheet, the 2009 NOL from his 2009
Form 1045, Schedule A, line 25. Of the
$33,550 negative taxable income, the
$3,650 deduction for exemptions, the
$3,000 capital loss deduction, and his
$5,700 standard deduction were not allowed in figuring the NOL. John had a
$21,200 loss on his 2009 Schedule F, the
only other item on his 2009 tax return.
John enters $24,200 (the $3,000 line 2
amount plus the $21,200 line 3 amount) on
line 4 and $9,350 (the $33,550 line 1
amount minus the $24,200 line 4 amount)
on line 5. He enters $9,350 as a negative
amount on Schedule J, line 9. He enters
$6,000 on Schedule J, line 10, and a negative $3,350 on Schedule J, line 11. If he
uses Schedule J to figure his tax for 2012,
he will enter the negative $3,350 amount on
his 2012 Schedule J as his 2009 taxable income for income averaging purposes.

Keep for Your Records

Complete this worksheet if you did not use Schedule J to figure your tax for 2010 and your 2009 taxable income was zero or
less. See the instructions above before completing this worksheet.
1. Figure the taxable income from your 2009 tax return (or as previously adjusted) without limiting it to
zero. If you had an NOL for 2009, do not include any NOL carryovers or carrybacks to 2009. Enter
the result as a positive amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2. If there is a loss on your 2009 Schedule D, line 21, add that loss (as a positive
amount) and your 2009 capital loss carryover to 2010. Subtract from that sum the
amount of the loss on your 2009 Schedule D, line 16, and enter the result . . . . . .
2.
3. If you had an NOL for 2009, enter it as a positive amount. Otherwise, enter as a
positive amount the portion, if any, of the NOL carryovers and carrybacks to 2009
that were not used in 2009 and were carried to years after 2009 . . . . . . . . . . . . .
3.
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-7

1.

4.
5.

Line 12

• The 2009 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:
• The 2009 Tax Rate Schedules below,
• The 2009 Qualified Dividends and
Capital Gain Tax Worksheet, later,
• The 2009 Schedule D Tax Worksheet
in the 2009 Schedule D instructions (but
use the 2009 Tax Rate Schedules below
when figuring the tax on the Schedule D
Tax Worksheet, lines 33 and 35), or

If your elected farm income includes net
capital gain, you must use the 2009 Schedule D Tax Worksheet to figure the tax on
the amount on line 11. However, if you
filed Form 2555 or 2555-EZ for 2009, you
must first complete the 2009 Foreign
Earned Income Tax Worksheet, and then
use the 2009 Schedule D Tax Worksheet to
figure the tax on the amount on line 3 of
that worksheet.

When completing the Schedule D Tax
Worksheet, you must allocate 1/3 of the
amount on line 2b (and 1/3 of the amount
on line 2c, if any) to 2009. If for 2009 you
had a capital loss that resulted in a capital
loss carryover to 2010, do not reduce the
elected farm income allocated to 2009 by
any part of the carryover.

2009 Tax Rate Schedules—Line 12
Schedule X — Use if your 2009 filing status was Single or you checked
filing status box 1 or 2 on Form 1040NR
If Schedule J,
line 11, is:
Over —

But not
over —

$0
8,350
33,950
82,250
171,550
372,950

$8,350
33,950
82,250
171,550
372,950
.............

of the
amount
over —

Enter on
Schedule J,
line 12
...........
$835.00 +
4,675.00 +
16,750.00 +
41,754.00 +
108,216.00 +

10%
15%
25%
28%
33%
35%

$0
8,350
33,950
82,250
171,550
372,950

Schedule Y-1 — Use if your 2009 filing status was Married filing
jointly or Qualifying widow(er) or you checked filing
status box 6 on Form 1040NR
If Schedule J,
line 11, is:
Over —

But not
over —

$0
16,700
67,900
137,050
208,850
372,950

$16,700
67,900
137,050
208,850
372,950
............

of the
amount
over —

Enter on
Schedule J,
line 12
...........
$1,670.00 +
9,350.00 +
26,637.50 +
46,741.50 +
100,894.50 +

10%
15%
25%
28%
33%
35%

$0
16,700
67,900
137,050
208,850
372,950

Schedule Y-2 — Use if your 2009 filing status was Married filing
separately or you checked filing status box 3, 4, or 5 on
Form 1040NR
If Schedule J,
line 11, is:
Over —
$0
8,350
33,950
68,525
104,425
186,475

But not
over —
$8,350
33,950
68,525
104,425
186,475
.............

of the
amount
over —

Enter on
Schedule J,
line 12
...........
$835.00 +
4,675.00 +
13,318.75 +
23,370.75 +
50,447.25 +

10%
15%
25%
28%
33%
35%

$0
8,350
33,950
68,525
104,425
186,475

Schedule Z — Use if your 2009 filing status was Head of household
If Schedule J,
line 11, is:
Over —
$0
11,950
45,500
117,450
190,200
372,950

J-8

But not
over —

Enter on
Schedule J,
line 12

$11,950
45,500
117,450
190,200
372,950
.............

...........
$1,195.00 +
6,227.50 +
24,215.00 +
44,585.00 +
104,892.50 +

of the
amount
over —
10%
15%
25%
28%
33%
35%

$0
11,950
45,500
117,450
190,200
372,950

2009 Qualified Dividends and Capital Gain Tax Worksheet—Line 12

Keep for Your Records

Use this worksheet only if both of the following apply.
• Your elected farm income on your 2011 Schedule J, line 2a, does not include any net capital gain.
• You (a) entered qualified dividends on your 2009 Form 1040, line 9b (or your 2009 Form 1040A, line 9b, or 2009 Form
1040NR, line 10b); (b) entered capital gain distributions directly on your 2009 Form 1040, line 13 (or your 2009 Form
1040A, line 10, or 2009 Form 1040NR, line 14) and were not required to file Schedule D; or (c) filed Schedule D in 2009 and
you answered “Yes” on lines 17 and 20 of that Schedule D.
1. Amount from your 2011 Schedule J, line 11. If for 2009 you filed Form 2555 or
2555-EZ, enter the amount from line 3 of the 2009 Foreign Earned Income Tax
Worksheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.
2. Amount from your 2009 Form 1040, line 9b* (or your
2009 Form 1040A, line 9b, or 2009 Form 1040NR, line
10b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2.
3. Did you file Schedule D in 2009?*
Yes. Enter the smaller of line 15 or 16 of your
2009 Schedule D, but do not enter less than
-03.
No. Enter the amount from your 2009 Form
1040, line 13 (or your 2009 Form 1040A,
line 10, or 2009 Form 1040NR, line 14)
4. Add lines 2 and 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.
5. Amount, if any, from your 2009 Form 4952, line 4g . . .
5.
6. Subtract line 5 from line 4. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . . . . 6.
7. Subtract line 6 from line 1. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . . . . 7.
8. Enter the smaller of:
• The amount on line 1, or
• $33,950 if single or married filing separately, or if you
checked filing status box 1, 2, 3, 4, or 5 on Form 1040NR; . . . . . . . . . . . 8.
$67,900 if married filing jointly or qualifying widow(er)
or if you checked filing status box 6 on Form 1040NR;
$45,500 if head of household.
9. Is the amount on line 7 equal to or more than the amount on line 8?
Yes. Skip lines 9 and 10; go to line 11 and check the ‘‘No’’ box.
No. Enter the amount from line 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.
10. Subtract line 9 from line 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.
11. Are the amounts on lines 6 and 10 the same?
Yes. Skip lines 11 through 14; go to line 15.
No. Enter the smaller of line 1 or line 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.
12. Enter the amount from line 10 (if line 10 is blank, enter -0-) . . . . . . . . . . . . . . . 12.
13. Subtract line 12 from line 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.
14. Multiply line 13 by 15% (.15) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14.
15. Figure the tax on the amount on line 7. Use the 2009 Tax Rate Schedules . . . . . . . . . . . . . . . . . . . .15.
16. Add lines 14 and 15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16.
17. Figure the tax on the amount on line 1. Use the 2009 Tax Rate Schedules . . . . . . . . . . . . . . . . . . . .17.
18. Tax. Enter the smaller of line 16 or line 17 here and on your 2011 Schedule J, line 12. If for 2009
you filed Form 2555 or 2555-EZ, do not enter this amount on Schedule J, line 12. Instead, enter it on
line 4 of the 2009 Foreign Earned Income Tax Worksheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18.

}

}

*If for 2009 you filed Form 2555 or 2555-EZ, see the footnote in the 2009 Foreign Earned Income Tax Worksheet before completing this
line.

J-9

2009 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 2009 Form 1040 using Form 2555 or
2555-EZ. However, if Schedule J, line 11, is zero or less do not complete this worksheet.
1. Enter the amount from your 2011 Schedule J, line 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2. Enter the amount from your (and your spouse’s, if filing jointly) 2009 Form 2555, lines 45 and 50, or Form
2555-EZ, line 18 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3. Add lines 1 and 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4. Tax on the amount on line 3. Use the 2009 Tax Rate Schedules, the 2009 Qualified Dividends and Capital
Gain Tax Worksheet,* or the 2009 Schedule D Tax Worksheet in the 2009 Schedule D instructions,*
whichever applies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5. Tax on the amount on line 2. Use the 2009 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 2011
Schedule J, line 12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . 1.
. . 2.
. . 3.

. . 4.
. . 5.
. . 6.

*Enter the amount from line 3 above on line 1 of the 2009 Qualified Dividends and Capital Gain Tax Worksheet or the 2009 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 2011
Schedule J, line 11, from line 6 of your 2009 Qualified Dividends and Capital Gain Tax Worksheet (line 10 of your 2009 Schedule D Tax Worksheet). If the
result is more than zero, that amount is your capital gain excess.
If you did not 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 2009 Qualified Dividends and Capital Gain Tax Worksheet or 2009 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 2009 Foreign Earned Income Tax Worksheet above.
1. Reduce (but not below zero) the amount you would otherwise enter on line 3 of your 2009 Qualified Dividends and Capital Gain Tax Worksheet or line 9
of your 2009 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 2009 Qualified Dividends and Capital Gain Tax Worksheet or line 6
of your 2009 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 2009 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 2009 Unrecaptured Section 1250 Gain Worksheet in the 2009 Instructions for Schedule D
(Form 1040).

J-10

Line 13
If you used Schedule J to figure your tax for
2010 (that is, you entered the amount from
the 2010 Schedule J, line 23, on line 44 of
your 2010 Form 1040, on line 42 of your
2010 Form 1040NR, or on Form 1040X for
2010), enter on line 13 the amount from
your 2010 Schedule J, line 3.
If you did not use Schedule J to figure
your tax for 2010, enter on line 13 the taxable income from your 2010 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 below to figure the amount to enter on
line 13.
If you did not file a tax return for 2010,
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 2010 until at least 3 years after
April 17, 2012 (or the date you file your
2011 tax return, if later).

Instructions for 2010 Taxable
Income Worksheet
Line 2. Any net capital loss deduction on

your 2010 Schedule D, line 21, is not allowed for income averaging purposes to the
extent it did not reduce your capital loss
carryover to 2011. This could happen if the
taxable income before subtracting exemptions — shown on your 2010 Form 1040,
line 41, or your 2010 Form 1040NR, line
39 (or as previously adjusted) — was less
than zero. Enter on line 2 the amount by
which your 2010 capital loss carryover to
2011 (the sum of your short- and long-term
capital loss carryovers) exceeds the excess
of the loss on your 2010 Schedule D, line
16, over the loss on your 2010 Schedule D,
line 21.
Line 3. If you had an NOL for 2010, enter

the amount of that NOL from line 25 of the
2010 Form 1045, Schedule A, you filed
with Form 1045 or Form 1040X. If you did
not have an NOL for 2010, enter the por-

tion, if any, of the NOL carryovers and carrybacks to 2010 that were not used in 2010
and were carried to years after 2010.
Example. John Farmington did not use in-

come averaging for 2008, 2009, or 2010.
The taxable income before subtracting exemptions on his 2010 Form 1040, line 41,
is a negative $1,000. This amount includes
an NOL deduction on his 2010 Form 1040,
line 21, of $1,650. The $1,650 is the portion of the 2009 NOL that was remaining
from 2008 to be carried to 2010. See the
examples, earlier. A deduction for exemptions of $3,650 is shown on Form 1040,
line 42, and line 43, taxable income, is limited to zero. John does not have an NOL for
2010. John subtracts from the $1,000 negative amount on Form 1040, line 41, the
$3,650 deduction for exemptions. The result is a negative $4,650, John’s 2010 taxable income, which he enters as a positive
amount on line 1 of the 2010 Taxable Income Worksheet.
When John filed his 2010 tax return, he
had a $3,000 net capital loss deduction on
Schedule D, line 21 (which was also entered on Form 1040, line 13), a $7,000 loss
on Schedule D, line 16, and a $5,000 capital loss carryover to 2011 (his 2010 capital
loss carryover to 2011 was $5,000, not
$4,000, because the amount on his Form
1040, line 41, was a negative $1,000). John
adds the $3,000 from Schedule D, line 21,
and the $5,000 carryover. He subtracts
from the $8,000 result the $7,000 loss on
his Schedule D, line 16, and enters $1,000
on line 2 of the worksheet.
John enters -0- on line 3 of the worksheet because he does not have an NOL for
2010 and did not have an NOL carryover
from 2010 available to carry to 2011 and
later years. The NOL deduction for 2010 of
$1,650 was reduced to zero because it did
not exceed his modified taxable income of
$3,650. Modified taxable income is figured
by adding back the $3,000 net capital loss
deduction and the $3,650 exemption de-

2010 Taxable Income Worksheet—Line 13

duction to negative taxable income (figured
without regard to the NOL deduction) of
$3,000. John enters $1,000 on line 4 and
$3,650 on line 5. He enters $3,650 as a negative amount on Schedule J, line 13. He enters $6,000 on Schedule J, line 14, and
$2,350 on Schedule J, line 15. If he uses
Schedule J to figure his tax for 2012, he
will enter $2,350 on his 2012 Schedule J as
his 2010 taxable income for income averaging purposes.

Line 16
If line 15 is zero or less, enter -0- on line 16.
Otherwise, figure the tax on the amount on
line 15 using:
• The 2010 Tax Rate Schedules, later,
• The 2010 Qualified Dividends and
Capital Gain Tax Worksheet, later,
• The 2010 Schedule D Tax Worksheet
in the 2010 Schedule D instructions (but
use the 2010 Tax Rate Schedules when figuring the tax on the Schedule D Tax Worksheet, lines 34 and 36), or
• The 2010 Foreign Earned Income Tax
Worksheet, later.
If your elected farm income includes net
capital gain, you must use the 2010 Schedule D Tax Worksheet to figure the tax on
the amount on line 15. However, if you
filed Form 2555 or 2555-EZ for 2010, you
must first complete the 2010 Foreign
Earned Income Tax Worksheet, and then
use the 2010 Schedule D Tax Worksheet to
figure the tax on the amount on line 3 of
that worksheet.
When completing the Schedule D Tax
Worksheet, you must allocate 1/3 of the
amount on line 2b (and 1/3 of the amount
on line 2c, if any) to 2010. If for 2010 you
had a capital loss that resulted in a capital
loss carryover to 2011, do not reduce the
elected farm income allocated to 2010 by
any part of the carryover.

Keep for Your Records

Complete this worksheet if your 2010 taxable income was zero or less. See the instructions above before completing this
worksheet.
1. Figure the taxable income from your 2010 tax return (or as previously adjusted) without limiting it to
zero. If you had an NOL for 2010, do not include any NOL carryovers or carrybacks to 2010. Enter
the result as a positive amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2. If there is a loss on your 2010 Schedule D, line 21, add that loss (as a positive
amount) and your 2010 capital loss carryover to 2011. Subtract from that sum the
amount of the loss on your 2010 Schedule D, line 16, and enter the result . . . . . .
2.
3. If you had an NOL for 2010, enter it as a positive amount. Otherwise, enter as a
positive amount the portion, if any, of the NOL carryovers and carrybacks to 2010
that were not used in 2010 and were carried to years after 2010 . . . . . . . . . . . . .
3.
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-11

1.

4.
5.

2010 Tax Rate Schedules—Line 16
Schedule X — Use if your 2010 filing status was Single or you
checked filing status box 1 or 2 on Form 1040NR
If Schedule J,
line 15, is:
But not
Over —
over —

Enter on
Schedule J,
line 16

$0
8,375
34,000
82,400
171,850
373,650

...........
$837.50 +
4,681.25 +
16,781.25 +
41,827.25 +
108,421.25 +

$8,375
34,000
82,400
171,850
373,650
.............

of the
amount
over —
10%
15%
25%
28%
33%
35%

$0
8,375
34,000
82,400
171,850
373,650

Schedule Y-1 — Use if your 2010 filing status was Married filing
jointly or Qualifying widow(er) or you checked
filing status box 6 on Form 1040NR
If Schedule J,
line 15, is:
But not
Over —
over —

Enter on
Schedule J,
line 16

$0
16,750
68,000
137,300
209,250
373,650

...........
$1,675.00 +
9,362.50 +
26,687.50 +
46,833.50 +
101,085.50 +

$16,750
68,000
137,300
209,250
373,650
............

of the
amount
over —
10%
15%
25%
28%
33%
35%

$0
16,750
68,000
137,300
209,250
373,650

Schedule Y-2 — Use if your 2010 filing status was Married filing
separately or you checked filing status
box 3, 4, or 5 on Form 1040NR
If Schedule J,
line 15, is:
Over —
$0
8,375
34,000
68,650
104,625
186,825

But not
over —
$8,375
34,000
68,650
104,625
186,825
.............

of the
amount
over —

Enter on
Schedule J,
line 16
...........
$837.50 +
4,681.25 +
13,343.75 +
23,416.75 +
50,542.75 +

10%
15%
25%
28%
33%
35%

$0
8,375
34,000
68,650
104,625
186,825

Schedule Z — Use if your 2010 filing status was Head of household
If Schedule J,
line 15, is:
Over —
$0
11,950
45,550
117,650
190,550
373,650

J-12

But not
over —

Enter on
Schedule J,
line 16

$11,950
45,550
117,650
190,550
373,650
.............

...........
$1,195.00 +
6,235.00 +
24,260.00 +
44,672.00 +
105,095.00 +

of the
amount
over —
10%
15%
25%
28%
33%
35%

$0
11,950
45,550
117,650
190,550
373,650

2010 Qualified Dividends and Capital Gain Tax Worksheet—Line 16

Keep for Your Records

Use this worksheet only if both of the following apply.
• Your elected farm income on your 2011 Schedule J, line 2a, does not include any net capital gain.
• You (a) entered qualified dividends on your 2010 Form 1040, line 9b (or your 2010 Form 1040A, line 9b, or 2010 Form
1040NR, line 10b); (b) entered capital gain distributions directly on your 2010 Form 1040, line 13 (or your 2010 Form
1040A, line 10, or 2010 Form 1040NR, line 14) and were not required to file Schedule D; or (c) filed Schedule D in 2010 and
you answered “Yes” on lines 17 and 20 of that Schedule D.
1. Amount from your 2011 Schedule J, line 15. If for 2010 you filed Form 2555 or
2555-EZ, enter the amount from line 3 of the 2010 Foreign Earned Income Tax
Worksheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2. Amount from your 2010 Form 1040, line 9b* (or your
2010 Form 1040A, line 9b, or 2010 Form 1040NR, line
10b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2.
3. Did you file Schedule D in 2010?*
Yes. Enter the smaller of line 15 or 16 of your
2010 Schedule D, but do not enter less than
-03.
No. Enter the amount from your 2010 Form
1040, line 13 (or your 2010 Form 1040A,
line 10, or 2010 Form 1040NR, line 14)
4. Add lines 2 and 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.
5. Amount, if any, from your 2010 Form 4952, line 4g . . .
5.
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:
• $34,000 if single or married filing separately, or if you
checked filing status box 1, 2, 3, 4, or 5 on Form 1040NR; . . . . . . . . . . .
• $68,000 if married filing jointly or qualifying widow(er)
or if you checked filing status box 6 on Form 1040NR;
• $45,550 if head of household.

1.

}

}

9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.

6.
7.

8.

Enter the smaller of line 1 or line 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.
Enter the smaller of line 7 or line 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.
Subtract line 10 from line 9. This amount is taxed at 0% . . . . . . . . . . . . . . . . . . 11.
Enter the smaller of line 1 or line 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.
Enter the amount from line 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.
Subtract line 13 from line 12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.
Multiply line 14 by 15% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Figure the tax on the amount on line 7. Use the 2010 Tax Rate Schedules . . . . . . . . . . . . . . . . . . . .
Add lines 15 and 16 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Figure the tax on the amount on line 1. Use the 2010 Tax Rate Schedules . . . . . . . . . . . . . . . . . . . .
Tax. Enter the smaller of line 17 or line 18 here and on your 2011 Schedule J line 16. If for 2010
you filed Form 2555 or 2555–EZ, do not enter this amount on Schedule J, line 16. Instead, enter it
on line 4 of the 2010 Foreign Earned Income Tax Worksheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

15.
16.
17.
18.
18.

*If for 2010 you filed Form 2555 or 2555-EZ, see the footnote in the 2010 Foreign Earned Income Tax Worksheet before completing this
line.

J-13

2010 Foreign Earned Income Tax Worksheet—Line 16

Keep for Your Records

Use this worksheet if you claimed the foreign earned income exclusion or housing exclusion on your 2010 Form 1040 using Form 2555 or
2555-EZ. However, if Schedule J, line 15, is zero or less do not complete this worksheet.
1. Enter the amount from your 2011 Schedule J, line 15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2. Enter the amount from your (and your spouse’s, if filing jointly) 2010 Form 2555, lines 45 and 50, or Form
2555-EZ, line 18 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3. Add lines 1 and 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4. Tax on the amount on line 3. Use the 2010 Tax Rate Schedules, the 2010 Qualified Dividends and Capital
Gain Tax Worksheet,* or the 2010 Schedule D Tax Worksheet in the 2010 Schedule D instructions,*
whichever applies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5. Tax on the amount on line 2. Use the 2010 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 2011
Schedule J, line 16 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . 1.
. . 2.
. . 3.

. . 4.
. . 5.
. . 6.

*Enter the amount from line 3 above on line 1 of the 2010 Qualified Dividends and Capital Gain Tax Worksheet or the 2010 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 2011
Schedule J, line 15, from line 6 of your 2010 Qualified Dividends and Capital Gain Tax Worksheet (line 10 of your 2010 Schedule D Tax Worksheet). If the
result is more than zero, that amount is your capital gain excess.
If you did not 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 2010 Qualified Dividends and Capital Gain Tax Worksheet or 2010 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 2010 Foreign Earned Income Tax Worksheet above.
1. Reduce (but not below zero) the amount you would otherwise enter on line 3 of your 2010 Qualified Dividends and Capital Gain Tax Worksheet or line 9
of your 2010 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 2010 Qualified Dividends and Capital Gain Tax Worksheet or line 6
of your 2010 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 2010 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 2010 Unrecaptured Section 1250 Gain Worksheet in the 2010 Instructions for Schedule D
(Form 1040).

Lines 19, 20, and 21
If you amended your return or the IRS
made changes to it, enter the corrected
amount.

J-14
Printed on recycled paper