IRS Form 5213 Election to Postpone Determination as to Whether the Presumption Applies That an Activity Is Engaged in for Profit

What Is IRS Form 5213?

IRS Form 5213, Election to Postpone Determination as to Whether the Presumption Applies that an Activity Is Engaged in for Profit is the document you complete to ask to postpone the determination of profitability of your business. The form can be completed by individuals, estates, trusts, and S corporations. The election made on this form allows you five years to show a profit from your activity. You have seven years to show a profit if you are engaged in breeding, showing, training, or racing horses.

The form is issued by the Internal Revenue Service (IRS) with the most recent revision of the form released in February 2006. Download the latest version of the fillable IRS Form 5213 through the link provided below.

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5213
Election To Postpone Determination
Form
as To Whether the Presumption Applies That an
OMB No. 1545-0195
(Rev. February 2006)
Activity Is Engaged in for Profit
Department of the Treasury
To be filed by individuals, estates, trusts, partnerships, and S corporations.
Internal Revenue Service
Name(s) as shown on tax return
Identifying number as shown on tax return
Address (number and street, apt. no., rural route) (or P.O. box number if mail is not delivered to street address)
City, town or post office, state, and ZIP code
The taxpayer named above elects to postpone a determination as to whether the presumption applies that the activity described
below is engaged in for profit. The determination is postponed until the close of:
● The 6th tax year, for an activity that consists mainly of breeding, training, showing, or racing horses or
● The 4th tax year for any other activity,
after the tax year in which the taxpayer first engaged in the activity.
1
Type of taxpayer engaged in the activity (check the box that applies):
Individual
Partnership
S corporation
Estate or trust
2a
Description of activity for which you elect to postpone a determination
2b
First tax year you engaged in activity described in 2a
Under penalties of perjury, I declare that I have examined this election, including accompanying schedules, and to the best of my knowledge and belief, it is true,
correct, and complete.
(Signature of taxpayer or fiduciary)
(Date)
(Signature of taxpayer’s spouse, if joint return was filed)
(Date)
(Signature of general partner authorized to sign partnership return)
(Date)
(Signature and title of officer, if an S corporation)
(Date)
5213
For Privacy Act and Paperwork Reduction Act Notice, see instructions on back.
Cat. No. 42361U
Form
(Rev. 2-2006)
5213
Election To Postpone Determination
Form
as To Whether the Presumption Applies That an
OMB No. 1545-0195
(Rev. February 2006)
Activity Is Engaged in for Profit
Department of the Treasury
To be filed by individuals, estates, trusts, partnerships, and S corporations.
Internal Revenue Service
Name(s) as shown on tax return
Identifying number as shown on tax return
Address (number and street, apt. no., rural route) (or P.O. box number if mail is not delivered to street address)
City, town or post office, state, and ZIP code
The taxpayer named above elects to postpone a determination as to whether the presumption applies that the activity described
below is engaged in for profit. The determination is postponed until the close of:
● The 6th tax year, for an activity that consists mainly of breeding, training, showing, or racing horses or
● The 4th tax year for any other activity,
after the tax year in which the taxpayer first engaged in the activity.
1
Type of taxpayer engaged in the activity (check the box that applies):
Individual
Partnership
S corporation
Estate or trust
2a
Description of activity for which you elect to postpone a determination
2b
First tax year you engaged in activity described in 2a
Under penalties of perjury, I declare that I have examined this election, including accompanying schedules, and to the best of my knowledge and belief, it is true,
correct, and complete.
(Signature of taxpayer or fiduciary)
(Date)
(Signature of taxpayer’s spouse, if joint return was filed)
(Date)
(Signature of general partner authorized to sign partnership return)
(Date)
(Signature and title of officer, if an S corporation)
(Date)
5213
For Privacy Act and Paperwork Reduction Act Notice, see instructions on back.
Cat. No. 42361U
Form
(Rev. 2-2006)
2
Form 5213 (Rev. 2-2006)
Page
General Instructions
Generally, in determining whether you are
in which you engaged in the activity. If you
engaged in more than one activity, you must
are an individual, your identifying number is
Purpose of Form
consider all of the following:
your social security number (SSN). If you are
other than an individual, your identifying
● The similarity of the activities,
Use Form 5213 to elect to postpone an IRS
number is your employer identification
● The business purpose that is (or might be)
determination as to whether the presumption
number (EIN).
applies that an activity is engaged in for
served by carrying on the activities separately
If you and your spouse filed a joint return,
profit.
or together in a trade or business or
enter both your name and your spouse’s name
investment setting, and
General Information
as they were shown on your tax return. Enter
● The organizational and economic
the SSN that was shown first on your return as
Generally, if you are an individual, estate,
interrelationship of the activities.
your identifying number.
trust, partnership, or S corporation in an
When To File
activity not engaged in for profit, some of
Signature and Date
your deductions may not be allowed.
File this form within 3 years after the due date
Be sure to sign and date the form on the
However, an activity is presumed to be
of your return (determined without extensions)
appropriate line or lines. Keep a copy for your
engaged in for profit (and, therefore,
for the first tax year in which you engaged in
records.
deductions are not limited) if the gross
the activity. However, if you received a written
income exceeds the deductions:
notice that the IRS proposes to disallow
● From an activity that consists mainly of
Privacy Act and Paperwork Reduction Act
deductions attributable to an activity not
Notice. We ask for the information on this
breeding, training, showing, or racing horses
engaged in for profit (under Internal Revenue
form to carry out the Internal Revenue laws of
for each of 2 or more of the tax years in the
Code section 183) and you want a
the United States. We need this information
period of 7 consecutive tax years ending with
postponement of the determination, you must
to determine your eligibility for making the
the tax year in question or
file this form within 60 days after receiving the
election to postpone determination as to
● From any other activity for each of 3 or
notice. This 60-day period does not extend
whether the presumption applies that an
the 3-year period referred to above.
more of the tax years in the period of 5
activity is engaged in for profit. If you make
consecutive tax years ending with the tax
Where To File
this election, you are required by Internal
year in question.
Revenue Code section 183 to provide the
File this form with the Internal Revenue
For information on the limits on deductions
information requested on this form. Under
Service Center where you are required to file
in not-for-profit activities, see Pub. 535,
section 6109, you must disclose your SSN,
your return. Do not send it in with any other
Business Expenses.
individual taxpayer identification number
return because that will delay processing the
(ITIN), or EIN. Routine uses of this information
Who Should File
election to postpone. However, if the IRS
include giving it to the Department of Justice
notifies you about proposing to disallow
Individuals, estates, trusts, partnerships
for civil and criminal litigation, and to cities,
deductions for an activity not engaged in for
(including limited liability companies or other
states, and the District of Columbia for use in
profit, file the form with the IRS office that
entities that are treated as partnerships for
administering their tax laws. We may also
sent you the notification.
Federal tax purposes), and S corporations
disclose this information to other countries
should use this form if they want to postpone
Automatic Extension of Period of
under a tax treaty, to federal and state
an IRS determination as to whether the
Limitations
agencies to enforce federal nontax criminal
presumption applies that they are engaged in
laws, or to federal law enforcement and
Generally, filing this form automatically
an activity for profit. An election made by a
intelligence agencies to combat terrorism. If
extends the period of limitations for assessing
partnership or an S corporation is binding on
you fail to provide this information in a timely
any income tax deficiency specifically
all persons who were partners or
manner, or provide incomplete or false
attributable to the activity during any year in
shareholders at any time during the
information, you may be liable for interest and
the presumption period. The extension also
presumption period.
penalties.
applies to partners or shareholders in the
You may not use this form if you have been
You are not required to provide the
activity.
engaged in:
information requested on a form that is
The period is extended until 2 years after
● Breeding, training, showing, or racing
subject to the Paperwork Reduction Act
the due date for filing the return (determined
horses for more than 7 years or
unless the form displays a valid OMB control
without extensions) for the last tax year in the
● Any other activity for more than 5 years.
number. Books or records relating to a form
presumption period. For example, for an
or its instructions must be retained as long as
If you elect a postponement and file this
activity subject to a 5-year presumption
their contents may become material in the
form on time, the IRS will generally postpone
period that began in 2003 and ends in 2007,
administration of any Internal Revenue law.
the determination until after the end of the 4th
the period of limitations automatically extends
Generally, tax returns and return information
consecutive tax year (6th tax year for an
to April 15, 2010, for all tax years in the
are confidential, as required by Code section
activity that consists mainly of breeding,
presumption period that would otherwise
6103.
training, showing, or racing horses) after the
expire before that date. Periods of limitations
The time needed to complete and file this
tax year in which you first engaged in the
for tax years in the 5-year period expiring
form will vary depending on individual
activity. This period of 5 (or 7) tax years is
after April 15, 2010, would remain open until
circumstances. The estimated burden for
called the “presumption period.” The election
their normal expiration date. However, early
individual taxpayers filing this form is
to postpone covers the entire presumption
termination of the presumption period does
approved under OMB control number
period.
not terminate the automatic extension of the
1545-0074 and is included in the estimates
period of limitations.
Joint Returns
shown in the instructions for their individual
The automatic extension applies only to
income tax return. The estimated burden for
If you and your spouse filed a joint return,
those deductions attributable to the activity
all other taxpayers who file this form is shown
both of you must elect to postpone the
and to any deductions (such as medical
below.
determination even if only one of you is
expenses or charitable contribution
engaged in the activity.
Recordkeeping
7 min.
deductions) that are affected by changes
made to adjusted gross income.
Learning about the
How Many Forms To File
law or the form
10 min.
The automatic extension does not affect
Generally, if you want a postponement for
general waivers of the statute of limitations
Preparing the form
10 min.
more than one activity, you must file a
that may be executed.
Copying, assembling, and
separate Form 5213 for each activity.
sending the form to the IRS
20 min.
However, you may file one form for more than
Specific Instructions
one activity if all of the activities have the
If you have comments concerning the
same presumption period. Be sure to
accuracy of these time estimates or
Name and Identifying Number as
describe each activity in detail and list the
suggestions for making this form simpler, we
Shown on Tax Return
first tax year in which you were engaged in
would be happy to hear from you. See the
Enter your name(s) and identifying number as
the activities.
instructions for the tax return with which this
shown on your tax return for the first tax year
form is filed.

Download IRS Form 5213 Election to Postpone Determination as to Whether the Presumption Applies That an Activity Is Engaged in for Profit

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IRS Form 5213 Instructions

The IRS 5213 instructions are as follows:

  • If a partnership or an S corporation makes an election on this form, it is legally binding on all partners and shareholders during the presumption period;
  • If you file the form on time, the IRS usually postpones the determination to the end of the fourth tax year since the year you first started your business. If the business is connected with training, showing, breeding, or racing horses, the determination is postponed until the end of the sixth year. This time is called the "presumption period";
  • If you file the tax return jointly with your spouse, the postponement election must be made by both of you, even if only one of the spouses is engaged in the business;
  • If you want to request a postponement for several activities, you usually file a separate form for each of them;
  • If all activities you claim the postponement for share the same presumption period, you can claim a postponement on the same form;
  • Submit this election within three years since the due date of your return. However, if the IRS sends you a proposition to disallow deductions for an activity not engaged in for profit, and you wish to postpone the determination, submit this election within 60 days after you have received the IRS notice;
  • File this form with the same IRS office you file all of your tax deductions and returns. Find the list of the offices by the state on the IRS website;
  • When completing the form, specify your name as it appears on the tax return for the first year you engaged in the business;
  • If you file the tax return jointly with your spouse, provide both your and your spouse's name on this form;
  • The identification number requested by this form is either your Social Security number (if you are an individual) or the employer identification number (if you fill out the form for the partnership, estate, trust, or S corporation);
  • If you file the joint tax return, enter only the Social Security number shown first on your return for the requested identifying number;
  • Describe the activity you request determination postponement for in details and make sure you specified the tax year you started the activity;
  • For the form to be valid, sign and date it on the line that applies to your situation.

After completing the form, copy it and keep for your records.

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