How to make an election for Form 1040

To indicate that a return will be taking an “election” described in the IRS code, check the appropriate box on the ELEC screen. For most of the ELEC screen elections, a checked box automatically produces an explanation for that election on an Election page in View/Print mode. After you check an election, review the Election page. If an explanation does not appear for that election, or if the explanation is not sufficient, complete the SCH screen, selecting E (Election Explanation) from the Type of attachment drop list, and entering the explanation you want.* This produces a separate Election page that is printed and transmitted with the return.

The following elections are available in Form 1040.

• Form 1040

  • Schedule A - Claim decedent medical expenses

  • Retirement plan contribution sec 1.72-6

  • Form 6251 - SLE 904 limitation to figure AMTFTC

  • Elective Safe Harbor for oil and gas property

  • Nonresident taxed as resident

• Form 1040-NR

  • Income treated as from U.S. business

• Schedule B

  • Value of restricted stock included on Form W-2

  • OID - include market discount in current income

• Schedules C, E, F

  • Deduct environmental cleanup costs

  • Deduct up to $5000 business startup costs

  • Deduct costs for developing a mine

  • Capitalize carrying charges

  • Real estate taxes ratable accrued

  • Sec. 1.263 (a) - 1(f) de minimus election

  • Sec. 1.263 (a) - 3(n) election is made on screen 4562.

• Schedule D

  • Sales of securities to ESOP, postpone gain

  • Postpone gain on QSB stock

  • Rollover gain for empowerment zone assets

  • Mark-to-market election for traders

• Schedule E

  • Elective Safe Harbor for oil and gas property

  • Sec. 469(c)(7)(A) - Treat all interests in rental real estate as single rental activity

• Schedule F

  • Deduct pre-productive expenses

  • Elect not to exclude payments

  • Qualifying forest or reforestation costs

  • Treat tree cutting as sale or exchange

  • Use 20YY crop disaster payments in 20XX

• Form 1099

  • Tax-free transfers for cash distributions

  • 92-44 transfer for sec 403(b) contracts

• Form 1116

  • Use exchange rate on date paid

  • Recapture more overall loss than required

  • Form 6251 SLE 904 limitation to figure AMTFTC

  • Claim FTC without filing Form 1116 drop list

• Form 4562

  • Elect to exclude property from MACRS

  • Tax preference items amortized - no AMT

• Form 4797

  • Recognize gain on disposition of intangibles

  • Defer gain on qualifying electric transmission

  • Rollover gain for Empowerment Zone 60 days

  • Mark-to-market election for traders

• Form 6252

  • Election to pay interest on tax due from 6252

• Other

  • (Three fields are available for direct entry)

*An example of this might be making a Section 168(i)(6) election, or other code section elections not separately listed on the ELEC screen. Some elections are not available on the ELEC screen.

For example, a § 83(b) election must be made at the time the stock was awarded. When a § 83(b) election is made, the value of the stock is reported on Form W-2, box 1. There is nothing additional that needs to be done when filing Form 1040. See the IRS guidelines for details.

See Drake Tax - Business Returns: Elections for elections in other return types.