Chapter 20 Sample Return This sample return uses actual forms to show you how to prepareyour income tax return. However, the information shown on thefilled-in forms is not from any actual farming operation. Walter Brown is a dairy farmer and his wife, Jane, is a substituteteacher for the county school system. They have three children. Theirreturn has been prepared using the cash method of accounting. Seechapter 3 for an explanation of the cash method and other methods ofaccounting. Rounding off cents.You may round off cents to the nearest whole dollar on your returnand schedules. This will make it easier to complete your return. To doso, drop amounts under 50 cents and increase amounts from 50 to 99cents to the next dollar. For example, $129.49 becomes $129 and$235.50 becomes $236. If you do round off, do so for all amounts. However, if you have toadd two or more amounts to figure the total to enter on a line,include cents when adding the amounts and round off only the total. Losses from operating a farm.The sample return shows a gain from the operation of the farm.However, if your deductible farm expenses are more than your farmincome for the year, you have a loss from the operation of your farm.If your loss is more than your other income for the year, you may havea net operating loss (NOL). You may also have an NOL if you had acasualty or theft loss that was more than your income. discount hotels in GdanskIf you have an NOL this year, you may be able to reduce your income(and tax) in other years by carrying the NOL to those years anddeducting it from income. To determine if you have an NOL, complete your tax return for theyear. You may have an NOL if a negative figure appears on line 37 ofForm 1040. If this is the case, see Losses From Operating a Farmin chapter 5. Preparing the Return