2010 Instruction 1040 Schedule C by warnydapilo


									           Department of the Treasury
           Internal Revenue Service

2010 Instructions for Schedule C
                Use Schedule C (Form 1040) to report income or loss from a business you operated or a
Profit or Loss  profession you practiced as a sole proprietor. An activity qualifies as a business if your
                primary purpose for engaging in the activity is for income or profit and you are involved in
From Business the Form 1040,a business.orToand regularity. For example, a sporadic activity or a instructions
                    activity with continuity
                not qualify as               report income from a nonbusiness activity, see the
                                 line 21, Form 1040NR, line 21.
                                                                                                 hobby does

                                                    Also, use Schedule C to report (a) wages and expenses you had as a statutory employee,
                                                (b) income and deductions of qualified joint ventures, and (c) certain income shown on Form
                                                1099-MISC, Miscellaneous Income. See the Instructions for Recipient (back of Copy B of
                                                Form 1099-MISC) for the types of income to report on Schedule C.
                                                    Small businesses and statutory employees with expenses of $5,000 or less may be able to
                                                file Schedule C-EZ instead of Schedule C. See Schedule C-EZ for details.
                                                    You may be subject to state and local taxes and other requirements such as business
                                                licenses and fees. Check with your state and local governments for more information.

Section references are to the Internal          property no longer includes cellular phones     property, or to report information on listed
Revenue Code unless otherwise noted.            and similar telecommunications.                 property.
                                                                                                   • Form 4684 to report a casualty or theft
                                                Excess farm losses. If your Schedule C ac-      gain or loss involving property used in your
                                                tivity includes processing a farm commod-       trade or business or income-producing
What’s New                                      ity, any losses you have from that activity     property.
Increase in section 179 expense. You may        may be reduced or eliminated. See page             • Form 4797 to report sales, exchanges,
now deduct up to $500,000 of the cost of        C-7 and the Instructions for Schedule F for     and involuntary conversions (not from a
section 179 property placed in service in       more details.                                   casualty or theft) of trade or business prop-
2010. This deduction is phased out if the       New credit for small employer health
cost of the property exceeds $2,000,000.                                                           • Form 6198 to figure your allowable
                                                insurance premiums. If your line 14 ex-         loss if you have a business loss and you
The cost of certain qualified real property     penses include the cost of providing health     have amounts invested in the business for
placed in service in 2010 may also be de-       insurance coverage to your employees, you       which you are not at risk.
ducted but is limited to $250,000. For more
details, see Pub. 946.
                                                must reduce your expenses by the amount            • Form 8582 to figure your deductible
                                                of any credit determined on Form 8941.          loss from passive activities.
                                                See page C-5 and Form 8941 and its in-             • Form 8594 to report certain purchases
Extension of special allowance. The spe-
                                                structions.                                     or sales of groups of assets that constitute a
cial first-year depreciation allowance has
been extended to property placed in service                                                     trade or business.
in 2010. See Pub. 946 for details on which                                                         • Form 8824 to report like-kind ex-
property is eligible for the special allow-
ance.                                           General Instructions                               • Form 8829 to claim expenses for busi-
                                                                                                ness use of your home.
Increased deduction for start-up costs. If      Other Schedules and Forms                          • Form 8903 to take a deduction for in-
your business began in 2010, you can de-        You May Have To File                            come from domestic production activities.
duct up to $5,000 of certain business            • Schedule A to deduct interest, taxes,        Single-member limited liability company
start-up costs paid or incurred after October   and casualty losses not related to your busi-   (LLC). Generally, a single-member do-
22, 2004, in tax years before 2010, and up      ness.                                           mestic LLC is not treated as a separate en-
to $10,000 of certain business start-up costs      • Schedule E to report rental real estate    tity for federal income tax purposes. If you
paid or incurred in 2010. See page C-9 for      and royalty income or (loss) that is not sub-   are the sole member of a domestic LLC,
more details.                                   ject to self-employment tax.                    file Schedule C or C-EZ (or Schedule E or
                                                   • Schedule F to report profit or (loss)      F, if applicable). However, you can elect to
Standard mileage rate. The business stan-                                                       treat a domestic LLC as a corporation. See
                                                from farming.
dard mileage rate for 2010 decreased to 50                                                      Form 8832 for details on the election and
cents per mile. See the instructions for line      • Schedule J to figure your tax by aver-     the tax treatment of a foreign LLC.
9 beginning on page C-4 for more details.       aging your farming or fishing income over
                                                the previous 3 years. Doing so may reduce       Single – member limited liability
                                                your tax.                                       companies (LLCs) with employees.
Reportable transaction penalties limited.                                                       Single-member LLCs that are disregarded
The penalties for failure to disclose a re-        • Schedule SE to pay self-employment         as entities separate from their owner for
portable transaction have changed. See the      tax on income from any trade or business.
                                                                                                federal income tax purposes are now re-
Instructions for Form 8886 for more de-            • Form 3800 to claim any of the general      quired to file employment tax returns using
tails.                                          business credits.                               the LLC’s name and employer identifica-
                                                   • Form 4562 to claim depreciation (in-       tion number (EIN) rather than the LLC
Removal of cellular phones and similar          cluding the special allowance) on assets        owner’s name and EIN. Single-member
telecommunications equipment from listed        placed in service in 2010, to claim amorti-     LLCs not previously needing an EIN may
property. Beginning in taxable years be-        zation that began in 2010, to make an elec-     now need to obtain an EIN for the payment
ginning after December 31, 2009, listed         tion under section 179 to expense certain       and reporting of these taxes. For more in-
                                                              Cat. No. 24329W
formation, see the Instructions for Form          tion will be necessary for any future year in    Reportable Transaction
SS-4.                                             which the spouses meet the requirements to
                                                  be treated as a qualified joint venture.         Disclosure Statement
Heavy highway vehicle use tax. If you use                                                          Use Form 8886 to disclose information for
certain highway trucks, truck-trailers,               The election generally does not require      each reportable transaction in which you
tractor-trailers, or buses in your trade or       that you and your spouse obtain an em-           participated. Form 8886 must be filed for
business, you may have to pay a federal           ployer identification number (EIN) since         each tax year that your federal income tax
highway motor vehicle use tax. See the In-        you and your spouse will file as sole propri-    liability is affected by your participation in
structions for Form 2290 to find out if you       etors. However, you may need an EIN to           the transaction. You may have to pay a pen-
must pay this tax.                                file other returns such as employment or         alty if you are required to file Form 8886
Information returns. You may have to file         excise tax returns. To apply for an EIN, see     but do not do so. You may also have to pay
information returns for wages paid to em-         the Instructions for Form SS-4.                  interest and penalties on any reportable
ployees, certain payments of fees and other                                                        transaction understatements. The following
nonemployee compensation, interest, rents,           For more information on qualified joint       are reportable transactions.
royalties, real estate transactions, annuities,   ventures, go to IRS.gov. Enter “QJV elec-           • Any listed transaction that is the same
and pensions. You may also have to file an        tion,” in the search box and select “Benefits    as or substantially similar to tax avoidance
information return if you sold $5,000 or          of Qualified Joint Ventures for Family           transactions identified by the IRS.
more of consumer products to a person on a                                                            • Any transaction offered to you or a re-
buy-sell, deposit-commission, or other sim-                                                        lated party under conditions of confidenti-
ilar basis for resale. For details, see the       Rental real estate business. If you and          ality for which you paid an advisor a fee of
2010 General Instructions for Certain In-         your spouse make the election for your           at least $50,000.
formation Returns (Forms 1098, 1099,              rental real estate business, you must each
3921, 3922, 5498, and W-2G).                      report your share of income and deductions          • Certain transactions for which you or
                                                  on Schedule C or C-EZ instead of Schedule        a related party have contractual protection
    If you received cash of more than             E. Rental real estate income generally is not    against disallowance of the tax benefits.
$10,000 in one or more related transactions       included in net earnings from self-employ-          • Certain transactions resulting in a loss
in your trade or business, you may have to        ment subject to self-employment tax and          of at least $2 million in any single tax year
file Form 8300. For details, see Pub. 1544.       generally is subject to the passive loss limi-   or $4 million in any combination of tax
                                                  tation rules. Electing qualified joint venture   years. (At least $50,000 for a single tax
Husband-Wife                                      status and using the Schedule C or C-EZ          year if the loss arose from a foreign cur-
Qualified Joint Venture                           does not alter the application of the            rency transaction defined in section
If you and your spouse each materially par-       self-employment tax or the passive loss          988(c)(1), whether or not the loss flows
ticipate (see Material participation on page      limitation rules.                                through from an S corporation or partner-
C-3) as the only members of a jointly                                                              ship.)
owned and operated business and you file a             If you and your spouse have a rental           • Certain transactions of interest en-
joint return for the tax year, you can make       real estate business not otherwise subject to    tered into after November 1, 2006, that are
an election to be taxed as a qualified joint      self-employment tax and no other income          the same or substantially similar to one of
venture instead of a partnership. This elec-      subject to self-employment, you each must        the types of transactions that the IRS has
tion, in most cases, will not increase the to-    check the box on Schedule C, line 1. In that     identified by published guidance as a trans-
tal tax owed on the joint return, but it does     case, you and your spouse each should not        action of interest.
give each of you credit for social security       file Schedule SE. However, if there are
                                                  other net earnings from self-employment of           See the Instructions for Form 8886 for
earnings on which retirement benefits are                                                          more details.
based and for Medicare coverage. By mak-          $400 or more, the spouse(s) with the other
                                                  net earnings from self-employment should
ing the election, you will not be required to
                                                  file Schedule SE without including the           Capital Construction Fund
file Form 1065 for any year the election is
in effect and will instead report the income      amount of net profit from rental real estate     Do not claim on Schedule C or C-EZ the
and deductions directly on your joint re-         business from Schedule C on Schedule SE,         deduction for amounts contributed to a cap-
turn. If you and your spouse filed a Form         line 2. In that case, do not check the box on    ital construction fund set up under chapter
1065 for the year prior to the election, the      line 1 of Schedule C.                            535 of title 46 of the United States Code.
partnership terminates at the end of the tax                                                       Instead, reduce the amount you would oth-
year immediately preceding the year the           Exception —Community Income                      erwise enter on Form 1040, line 43, by the
election takes effect.                            If you and your spouse wholly own an un-         amount of the deduction. Next to line 43,
                                                  incorporated business as community prop-         enter “CCF” and the amount of the deduc-
Note. Mere joint ownership of property            erty under the community property laws of        tion. For details, see Pub. 595.
that is not a trade or business does not qual-    a state, foreign country, or U.S. possession,
ify for the election.                             the income and deductions are reported as        Additional Information
                                                  follows.                                         See Pub. 334 for more information for
Making the election. To make this elec-
tion, you must divide all items of income,           • If only one spouse participates in the      small businesses.
gain, loss, deduction, and credit attributable    business, all of the income from that busi-
to the business between you and your              ness is the self-employment earnings of the
spouse in accordance with your respective
interests in the venture. Each of you must
                                                  spouse who carried on the business.
                                                     • If both spouses participate, the income     Specific Instructions
file a separate Schedule C, C-EZ, or F. On        and deductions are allocated to the spouses      Filers of Form 1041. Do not complete the
each line of your separate Schedule C,            based on their distributive shares.              block labeled “Social security number
C-EZ, or F, you must enter your share of             • If either or both you and your spouse       (SSN).” Instead, enter the employer identi-
the applicable income, deduction, or loss.        are partners in a partnership, see Pub. 541.     fication number (EIN) issued to the estate
Each of you must also file a separate
Schedule SE to pay self-employment tax,              • If you and your spouse elected to treat     or trust on line D.
as applicable.                                    the business as a qualifying joint venture,
                                                  see Husband-Wife Qualified Joint Venture
    Once made, the election can be revoked        on this page.
only with the permission of the IRS. How-                                                          Line A
ever, the election technically remains in ef-        The only states with community prop-          Describe the business or professional activ-
fect only for as long as the spouses filing as    erty laws are Arizona, California, Idaho,        ity that provided your principal source of
a qualified joint venture continue to meet        Louisiana, Nevada, New Mexico, Texas,            income reported on line 1. If you owned
the requirements for filing the election. If      Washington, and Wisconsin. A change in           more than one business, you must complete
the spouses fail to meet the qualified joint      your reporting position will be treated as a     a separate Schedule C for each business.
venture requirements for a year, a new elec-      conversion of the entity.                        Give the general field or activity and the
type of product or service. If your general       only in part for the year of the payment. See        Work you did as an investor in an activ-
field or activity is wholesale or retail trade,   chapter 1 of Pub. 535.                           ity is not treated as participation unless you
or services connected with production serv-                                                        were directly involved in the day-to-day
ices (mining, construction, or manufactur-           If you use the accrual method, report in-     management or operations of the activity.
ing), also give the type of customer or           come when you earn it and deduct expenses        Work done as an investor includes:
                                                  when you incur them even if you do not pay
client. For example, “wholesale sale of
                                                  them during the tax year. Accrual-basis             • Studying and reviewing financial
hardware to retailers” or “appraisal of real                                                       statements or reports on the activity,
estate for lending institutions.”                 taxpayers are put on a cash basis for de-
                                                  ducting business expenses owed to a re-             • Preparing or compiling summaries or
                                                  lated cash-basis taxpayer. Other rules           analyses of the finances or operations of the
                                                  determine the timing of deductions based         activity for your own use, and
Line D                                            on economic performance. See Pub. 538.              • Monitoring the finances or operations
Enter on line D the employer identification                                                        of the activity in a nonmanagerial capacity.
                                                     To change your accounting method, you
number (EIN) that was issued to you on            generally must file Form 3115. You may               Participation by your spouse during the
Form SS-4. Do not enter your SSN. Do not          also have to make an adjustment to prevent       tax year in an activity you own can be
enter another taxpayer’s EIN (for example,        amounts of income or expense from being          counted as your participation in the activ-
from any Forms 1099-MISC that you re-             duplicated or omitted. This is called a sec-     ity. This rule applies even if your spouse
ceived). If you do not have an EIN, leave         tion 481(a) adjustment.                          did not own an interest in the activity and
line D blank.                                                                                      whether or not you and your spouse file a
                                                     Example. You change to the cash
    You need an EIN only if you have a            method of accounting and choose to ac-           joint return. However, this rule does not ap-
qualified retirement plan or are required to      count for inventoriable items in the same        ply for purposes of determining whether
file employment, excise, alcohol, tobacco,        manner as materials and supplies that are        you and your spouse can elect to have your
or firearms returns, or are a payer of gam-       not incidental. You accrued sales in 2009        business treated as a qualified joint venture
bling winnings. If you need an EIN, see the       for which you received payment in 2010.          instead of a partnership (see Husband-Wife
Instructions for Form SS-4.                       You must report those sales in both years as     Qualified Joint Venture on page C-2 ).
                                                  a result of changing your accounting                 For purposes of the passive activity
Single member LLCs. If you are the sole           method and must make a section 481(a) ad-        rules, you materially participated in the op-
owner of an LLC that is not treated as a          justment to prevent duplication of income.       eration of this trade or business activity
separate entity for federal income tax pur-                                                        during 2010 if you met any of the following
poses, you may have an EIN that was is-              A net negative section 481(a) adjust-
                                                  ment is taken into account entirely in the       seven tests.
sued to the LLC (and in the LLC’s legal
name) if you are required to file employ-         year of the change. A net positive section          1. You participated in the activity for
ment tax returns and certain excise tax re-       481(a) adjustment is generally taken into        more than 500 hours during the tax year.
turns. However, you should enter on line          account over a period of 4 years. Include           2. Your participation in the activity for
D only the EIN issued to you and in your          any net positive section 481(a) adjustments      the tax year was substantially all of the par-
name as a sole proprietor. If you do not          on line 6. If the net section 481(a) adjust-     ticipation in the activity of all individuals
have such an EIN, leave line D blank. Do          ment is negative, report it in Part V.           (including individuals who did not own any
not enter on line D the EIN issued to the            For details on figuring section 481(a)        interest in the activity) for the tax year.
LLC.                                              adjustments, see the Instructions for Form          3. You participated in the activity for
                                                  3115, and Rev. Proc. 2006-12, 2006-3             more than 100 hours during the tax year,
                                                  I.R.B. 310, available at                         and you participated at least as much as any
Line E                                            www.irs.gov/irb/2006-03_IRB/ar14.html.
                                                  Also see Rev. Proc. 2006-37, 2006-38
                                                                                                   other person for the tax year. This includes
                                                                                                   individuals who did not own any interest in
Enter your business address. Show a street        I.R.B. 499, available at                         the activity.
address instead of a box number. Include          www.irs.gov/irb/2006-38_IRB/ar10.html.              4. The activity is a significant partici-
the suite or room number, if any. If you                                                           pation activity for the tax year, and you par-
conducted the business from your home lo-                                                          ticipated in all significant participation
cated at the address shown on Form 1040,
page 1, you do not have to complete this          Line G                                           activities for more than 500 hours during
                                                                                                   the year. An activity is a “significant par-
line.                                             If your business activity was not a rental       ticipation activity” if it involves the con-
                                                  activity and you met any of the material         duct of a trade or business, you participated
                                                  participation tests, explained next, or the      in the activity for more than 100 hours dur-
Line F                                            exception for oil and gas applies (explained
                                                  later on page 4), check the “Yes” box. Oth-
                                                                                                   ing the tax year, and you did not materially
                                                                                                   participate under any of the material par-
Generally, you can use the cash method,           erwise, check the “No” box. If you check         ticipation tests (other than this test 4).
accrual method, or any other method per-          the “No” box, this business is a passive ac-        5. You materially participated in the ac-
mitted by the Internal Revenue Code. In all       tivity. If you have a loss from this business,   tivity for any 5 of the prior 10 tax years.
cases, the method used must clearly reflect       see Limit on losses on page 4. If you have a
income. Unless you are a qualifying tax-          profit from this business activity but have         6. The activity is a personal service ac-
payer or a qualifying small business tax-         current year losses from other passive ac-       tivity in which you materially participated
payer (see the Part III instructions on page      tivities or you have prior year unallowed        for any 3 prior tax years. A personal service
C-8), you must use the accrual method for         passive activity losses, see the Instructions    activity is an activity that involves perform-
sales and purchases of inventory items.           for Form 8582.                                   ing personal services in the fields of health,
Special rules apply to long-term contracts                                                         law, engineering, architecture, accounting,
(see section 460 for details).                    Material participation. For purposes of          actuarial science, performing arts, consult-
                                                  the seven material participation tests listed    ing, or any other trade or business in which
    If you use the cash method, show all          below, participation generally includes any      capital is not a material income-producing
items of taxable income actually or con-          work you did in connection with an activity      factor.
structively received during the year (in          if you owned an interest in the activity at         7. Based on all the facts and circum-
cash, property, or services). Income is con-      the time you did the work. The capacity in       stances, you participated in the activity on a
structively received when it is credited to       which you did the work does not matter.          regular, continuous, and substantial basis
your account or set aside for you to use.         However, work is not treated as partici-         for more than 100 hours during the tax
Also, show amounts actually paid during           pation if it is work that an owner would not     year. Your participation in managing the
the year for deductible expenses. However,        customarily do in the same type of activity      activity does not count in determining if
if the payment of an expenditure creates an       and one of your main reasons for doing the       you meet this test if any person (except
asset having a useful life that extends sub-      work was to avoid the disallowance of            you) (a) received compensation for per-
stantially beyond the close of the year, it       losses or credits from the activity under the    forming management services in connec-
may not be deductible or may be deductible        passive activity rules.                          tion with the activity, or (b) spent more
hours during the tax year than you spent                                                              include any recapture of the deduction for
performing management services in con-             Line 1                                             clean-fuel vehicles and clean-fuel vehicle
nection with the activity (regardless of           Enter gross receipts from your trade or            refueling property used in your business.
whether the person was compensated for             business. Include amounts you received in          See Regulations section 1.179A-1 for de-
the services).                                     your trade or business that were properly          tails.
                                                   shown on Forms 1099-MISC. If the total
Rental of property. Generally, a rental ac-        amounts that were reported in box 7 of                 If the business use percentage of any
tivity (such as long-term equipment leasing        Forms 1099-MISC are more than the total            listed property (defined in the instructions
or rental real estate) is a passive activity       you are reporting on line 1, attach a state-       for line 13) dropped to 50% or less in 2010,
even if you materially participated in the         ment explaining the difference.                    report on this line any recapture of excess
activity. However, if you materially partici-                                                         depreciation, including any section 179 ex-
pated in a rental real estate activity as a real   Statutory employees.     If you received a         pense deduction. Use Part IV of Form 4797
estate professional, it is not a passive activ-    Form W-2 and the “Statutory employee”              to figure the recapture. Also, if the business
ity. Also, if you met any of the five excep-       box in box 13 of that form was checked,            use percentage drops to 50% or less on
tions listed under Rental Activities in the        report your income and expenses related to         leased listed property (other than a vehi-
Instructions for Form 8582, the rental of the      that income on Schedule C or C-EZ. Enter           cle), include on this line any inclusion
property is not treated as a rental activity       your statutory employee income from box            amount. See chapter 5 of Pub. 946 to figure
and the material participation rules above         1 of Form W-2 on line 1 of Schedule C or           the amount.
apply. See Activities That Are Not Passive         C-EZ and check the box on that line. Social
Activities in the Instructions for Form 8582       security and Medicare tax should have been
for the definition of a real estate profes-        withheld from your earnings; as a result,
sional.                                            you do not owe self-employment tax on
                                                   these earnings. Statutory employees in-
                                                                                                      Part II. Expenses
Exception for oil and gas. If you are filing       clude full-time life insurance agents, cer-        Capitalizing costs of property. If you pro-
Schedule C to report income and deduc-             tain agent or commission drivers and               duced real or tangible personal property or
tions from an oil or gas well in which you         traveling salespersons, and certain home-          acquired property for resale, certain ex-
own a working interest directly or through         workers.                                           penses attributable to the property gener-
an entity that does not limit your liability,                                                         ally must be included in inventory costs or
                                                      If you had both self-employment in-             capitalized. In addition to direct costs, pro-
check the “Yes” box. The activity of own-          come and statutory employee income, you
ing a working interest is not a passive activ-                                                        ducers of inventory property generally
                                                   must file two Schedules C. You cannot use          must also include part of certain indirect
ity, regardless of your participation.             Schedule C-EZ or combine these amounts             costs in their inventory. Purchasers of per-
Limit on losses. Your loss may be limited          on a single Schedule C.                            sonal property acquired for resale must in-
if:                                                Qualified joint ventures reporting only            clude part of certain indirect costs in
      • You checked the “No” box on line G,        rental real estate income. See the instruc-        inventory only if the average annual gross
or                                                 tions under Rental real estate business on         receipts for the 3 prior tax years exceed $10
      • You are a qualified joint venture re-      page C-2.                                          million. Also, you must capitalize part of
porting only rental real estate income, but                                                           the indirect costs that benefit real or tangi-
not as a real estate professional. In these        Installment sales. Generally, the install-         ble personal property constructed for use in
situations you may have a loss from a pas-         ment method cannot be used to report in-           a trade or business, or noninventory prop-
sive activity, and you may have to use             come from the sale of (a) personal property        erty produced for sale to customers. Re-
Form 8582 to figure your allowable loss, if        regularly sold under the installment               duce the amounts on lines 8 through 26 and
any, to enter on Schedule C, line 31.              method, or (b) real property held for resale       Part V by amounts capitalized. See Pub.
                                                   to customers. But the installment method           538 for a discussion of uniform capitaliza-
   Generally, you can deduct losses from           can be used to report income from sales of         tion rules.
passive activities only to the extent of in-       certain residential lots and timeshares if
come from passive activities. For details,         you elect to pay interest on the tax due on            Exception for certain producers. Pro-
see Pub. 925.                                      that income after the year of sale. See sec-       ducers who account for inventoriable items
                                                   tion 453(l)(2)(B) for details. If you make         in the same manner as materials and sup-
                                                   this election, include the interest in the total   plies that are not incidental can currently
                                                   on Form 1040, line 60. Also, enter                 deduct expenditures for direct labor and all
Line H                                             “453(l)(3)” and the amount of the interest         indirect costs that would otherwise be in-
If you started or acquired this business in        on the dotted line to the left of line 60.         cluded in inventory costs. See Part III. Cost
2010, check the box on line H. Also check                                                             of Goods Sold on page C-8 for more de-
                                                       If you use the installment method, at-         tails.
the box if you are reopening or restarting         tach a schedule to your return. Show sepa-
this business after temporarily closing it,        rately for 2010 and the 3 preceding years:            Exception for creative property. If you
and you did not file a 2009 Schedule C or          gross sales, cost of goods sold, gross profit,     are a freelance artist, author, or photogra-
C-EZ for this business.                            percentage of gross profit to gross sales,         pher, you may be exempt from the capitali-
                                                   amounts collected, and gross profit on             zation rules. However, your personal
                                                   amounts collected.                                 efforts must have created (or reasonably be
                                                                                                      expected to create) the property. This ex-
Part I. Income                                                                                        ception does not apply to any expense re-
                                                                                                      lated to printing, photographic plates,
Except as otherwise provided in the Inter-         Line 6                                             motion picture films, video tapes, or similar
nal Revenue Code, gross income includes                                                               items. These expenses are subject to the
income from whatever source derived. In            Report on line 6 amounts from finance re-
                                                   serve income, scrap sales, bad debts you           capitalization rules. For details, see Uni-
certain circumstances, however, gross in-                                                             form Capitalization Rules in Pub. 538.
come does not include extraterritorial in-         recovered, interest (such as on notes and
come that is qualifying foreign trade              accounts receivable), state gasoline or fuel
income. Use Form 8873 to figure the extra-         tax refunds you received in 2010, credit for
territorial income exclusion. Report it on         biodiesel and renewable diesel fuels
                                                   claimed on line 8 of Form 8864, credit for
                                                                                                      Line 9
Schedule C as explained in the Instructions
for Form 8873.                                     alcohol and cellulosic biofuel fuels claimed       You can deduct the actual expenses of op-
                                                   on line 7 of Form 6478, credit for federal         erating your car or truck or take the stan-
   If you were a debtor in a chapter 11            tax paid on fuels claimed on your 2009             dard mileage rate. You must use actual
bankruptcy case during 2010, see Chapter           Form 1040, prizes and awards related to            expenses if you used your vehicle for hire
11 Bankruptcy Cases under Income in the            your trade or business, and other kinds of         (such as a taxicab) or you used five or more
instructions for Form 1040 and page SE-2           miscellaneous business income. Include             vehicles simultaneously in your business
of the instructions for Schedule SE (Form          amounts you received in your trade or busi-        (such as in fleet operations). You cannot
1040).                                             ness as shown on Form 1099-PATR. Also,             use actual expenses for a leased vehicle if
you previously used the standard mileage                                                          pendent care assistance programs. If you
rate for that vehicle.                           Line 13                                          made contributions on your behalf as a
                                                 Depreciation and section 179 expense de-         self-employed person to a dependent care
   You can take the standard mileage rate                                                         assistance program, complete Form 2441,
for 2010 only if you:                            duction. Depreciation is the annual deduc-
                                                 tion allowed to recover the cost or other        Parts I and III, to figure your deductible
   • Owned the vehicle and used the stan-        basis of business or investment property         contributions to that program.
dard mileage rate for the first year you         having a useful life substantially beyond
placed the vehicle in service, or                                                                     You cannot deduct contributions you
                                                 the tax year. You can also depreciate im-        made on your behalf as a self-employed
   • Leased the vehicle and are using the        provements made to leased business prop-         person for group-term life insurance.
standard mileage rate for the entire lease       erty. However, stock in trade, inventories,
period (except the period, if any, before        and land are not depreciable. Depreciation           Do not include on line 14 any contribu-
1998).                                           starts when you first use the property in        tions you made on your behalf as a self-em-
                                                 your business or for the production of in-       ployed person to an accident and health
   If you take the standard mileage rate:        come. It ends when you take the property         plan. However, you may be able to deduct
                                                 out of service, deduct all your depreciable      on Form 1040, line 29, or Form 1040NR,
   • Multiply the number of business miles                                                        line 29, the amount you paid for health
driven by 50 cents, and                          cost or other basis, or no longer use the
                                                 property in your business or for the produc-     insurance on behalf of yourself, your
   • Add to this amount your parking fees        tion of income. You can also elect under         spouse, and dependents, even if you do not
and tolls, and enter the total on line 9.        section 179 to expense part or all of the cost   itemize your deductions. See the instruc-
                                                 of certain property you bought in 2010 for       tions for Form 1040, line 29, or Form
   Do not deduct depreciation, rent or lease                                                      1040NR, line 29, for details.
payments, or your actual operating ex-           use in your business. See the Instructions
penses.                                          for Form 4562 and Pub. 946 to figure the             You must reduce your line 14 deduction
                                                 amount to enter on line 13.                      by the amount of any credit for small em-
   If you deduct actual expenses:                                                                 ployer health insurance premiums deter-
                                                 When to attach Form 4562. You must
  • Include on line 9 the business portion       complete and attach Form 4562 only if you
                                                                                                  mined on Form 8941. See Form 8941 and
of expenses for gasoline, oil, repairs, insur-                                                    its instructions to determine which ex-
                                                 are claiming:                                    penses are eligible for the credit.
ance, tires, license plates, etc., and
   • Show depreciation on line 13 and rent          • Depreciation on property placed in
                                                 service during 2010;
or lease payments on line 20a.
                                                    • Depreciation on listed property (de-
   For details, see chapter 4 of Pub. 463.       fined below), regardless of the date it was      Line 15
                                                 placed in service; or                            Deduct premiums paid for business insur-
Information on your vehicle. If you claim
any car and truck expenses, you must pro-           • A section 179 expense deduction.            ance on line 15. Deduct on line 14 amounts
                                                                                                  paid for employee accident and health in-
vide certain information on the use of your          If you acquired depreciable property for     surance. Do not deduct amounts credited to
vehicle by completing one of the following.      the first time in 2010, see Pub. 946.            a reserve for self-insurance or premiums
   • Schedule C, Part IV, or Schedule                Listed property generally includes but is    paid for a policy that pays for your lost
C-EZ, Part III, if: (a) you are claiming the     not limited to:                                  earnings due to sickness or disability. For
standard mileage rate, you lease your vehi-         • Passenger automobiles weighing              details, see chapter 6 of Pub. 535.
cle, or your vehicle is fully depreciated, and   6,000 pounds or less;
(b) you are not required to file Form 4562
for any other reason. If you used more than         • Any other property used for transpor-
one vehicle during the year, attach your         tation if the nature of the property lends
                                                 itself to personal use, such as motorcycles,
                                                                                                  Lines 16a and 16b
own schedule with the information re-                                                             Interest allocation rules. The tax treatment
quested in Schedule C, Part IV, or Schedule      pickup trucks, etc.;
                                                                                                  of interest expense differs depending on its
C-EZ, Part III, for each additional vehicle.        • Any property used for entertainment         type. For example, home mortgage interest
   • Form 4562, Part V, if you are claim-        or recreational purposes (such as photo-         and investment interest are treated differ-
ing depreciation on your vehicle or you are      graphic, phonographic, communication,            ently. “Interest allocation” rules require
required to file Form 4562 for any other         and video recording equipment); and              you to allocate (classify) your interest ex-
reason (see the instructions for line 13).          • Computers or peripheral equipment.          pense so it is deducted (or capitalized) on
                                                 Exceptions. Listed property does not in-         the correct line of your return and receives
                                                 clude photographic, phonographic, com-           the right tax treatment. These rules could
                                                                                                  affect how much interest you are allowed to
Line 11                                          munication, or video equipment used
                                                 exclusively in your trade or business or at      deduct on Schedule C or C-EZ.
Enter the total cost of contract labor for the   your regular business establishment. It also         Generally, you allocate interest expense
tax year. Contract labor includes payments       does not include any computer or periph-         by tracing how the proceeds of the loan
to persons you do not treat as employees         eral equipment used exclusively at a regu-       were used. See chapter 4 of Pub. 535 for
(for example, independent contractors) for       lar business establishment and owned or          details.
services performed for your trade or busi-       leased by the person operating the estab-
ness. Do not include contract labor de-          lishment. For purposes of these exceptions,          If you paid interest on a debt secured by
ducted elsewhere on your return, such as         a portion of your home is treated as a regu-     your main home and any of the proceeds
contract labor includible on line 17, 21, 26,    lar business establishment only if that por-     from that debt were used in connection
or 37. Also, do not include salaries and         tion meets the requirements under section        with your trade or business, see chapter 4 of
wages paid to your employees; instead see        280A(c)(1) for deducting expenses for the        Pub. 535 to figure the amount that is de-
line 26.                                         business use of your home.                       ductible on Schedule C or C-EZ.
   You must file Form 1099-MISC, Mis-                See the instructions for line 6 on page      How to report. If you have a mortgage on
cellaneous Income, to report contract labor      C-4 if the business use percentage of any        real property used in your business (other
payments of $600 or more during the year.        listed property dropped to 50% or less in        than your main home), enter on line 16a the
See the Instructions for Form 1099-MISC          2010.                                            interest you paid for 2010 to banks or other
for details.                                                                                      financial institutions for which you re-
                                                                                                  ceived a Form 1098 (or similar statement).
                                                                                                  If you did not receive a Form 1098, enter
                                                 Line 14                                          the interest on line 16b.
Line 12                                          Deduct contributions to employee benefit             If you paid more mortgage interest than
Enter your deduction for depletion on this       programs that are not an incidental part of a    is shown on Form 1098, see chapter 4 of
line. If you have timber depletion, attach       pension or profit-sharing plan included on       Pub. 535 to find out if you can deduct the
Form T. See chapter 9 of Pub. 535 for de-        line 19. Examples are accident and health        additional interest. If you can, include the
tails.                                           plans, group-term life insurance, and de-        amount on line 16a. Attach a statement to
your return explaining the difference and
                                                Lines 20a and 20b                                   • Federal income taxes, including your
enter “See attached” in the margin next to                                                       self-employment tax. However, you can
line 16a.                                       If you rented or leased vehicles, machinery,     deduct one-half of your self-employment
    If you and at least one other person        or equipment, enter on line 20a the business     tax on Form 1040, line 27, (or Form
(other than your spouse if you file a joint     portion of your rental cost. But if you          1040NR, line 27, when covered under the
return) were liable for and paid interest on    leased a vehicle for a term of 30 days or        U.S. social security system due to an inter-
the mortgage and the other person received      more, you may have to reduce your deduc-         national social security agreement).
the Form 1098, include your share of the        tion by an amount called the inclusion              • Estate and gift taxes.
interest on line 16b. Attach a statement to     amount. See Leasing a Car in chapter 4 of           • Taxes assessed to pay for improve-
your return showing the name and address        Pub. 463 to figure this amount.                  ments, such as paving and sewers.
of the person who received the Form 1098.           Enter on line 20b amounts paid to rent          • Taxes on your home or personal use
In the margin next to line 16b, enter “See      or lease other property, such as office space    property.
attached.”                                      in a building.                                      • State and local sales taxes on property
   If you paid interest in 2010 that also                                                        purchased for use in your business. Instead,
applies to future years, deduct only the part                                                    treat these taxes as part of the cost of the
that applies to 2010.                           Line 21                                          property.
                                                Deduct the cost of incidental repairs and
                                                                                                    • State and local sales taxes imposed on
                                                                                                 the buyer that you were required to collect
                                                maintenance that do not add to the
Line 17                                         property’s value or appreciably prolong its
                                                                                                 and pay over to state or local governments.
                                                                                                 These taxes are not included in gross re-
Include on this line fees charged by ac-        life. Do not deduct the value of your own        ceipts or sales nor are they a deductible
countants and attorneys that are ordinary       labor. Do not deduct amounts spent to re-        expense. However, if the state or local gov-
and necessary expenses directly related to      store or replace property; they must be cap-     ernment allowed you to retain any part of
operating your business.                        italized.                                        the sales tax you collected, you must in-
   Include fees for tax advice related to                                                        clude that amount as income on line 6.
your business and for preparation of the tax                                                        • Other taxes and license fees not re-
forms related to your business. Also in-        Line 22                                          lated to your business.
clude expenses incurred in resolving as-        In most cases, you can deduct the cost of
serted tax deficiencies relating to your        materials and supplies only to the extent
business.                                       you actually consumed and used them in
                                                your business during the tax year (unless
                                                                                                 Line 24a
   For more information, see Pub. 334 or                                                         Enter your expenses for lodging and trans-
535.                                            you deducted them in a prior tax year).
                                                However, if you had incidental materials         portation connected with overnight travel
                                                and supplies on hand for which you kept no       for business while away from your tax
                                                inventories or records of use, you can de-       home. In most cases, your tax home is your
Line 18                                         duct the cost of those you actually pur-         main place of business, regardless of where
                                                                                                 you maintain your family home. You can-
                                                chased during the tax year, provided that
Include on this line your expenses for          method clearly reflects income.                  not deduct expenses paid or incurred in
office supplies and postage.                                                                     connection with employment away from
                                                   You can also deduct the cost of books,        home if that period of employment exceeds
                                                professional instruments, equipment, etc.,       1 year. Also, you cannot deduct travel ex-
                                                if you normally use them within a year.          penses for your spouse, your dependent, or
Line 19                                         However, if their usefulness extends sub-        any other individual unless that person is
Enter your deduction for contributions to a     stantially beyond a year, you must gener-        your employee, the travel is for a bona fide
pension, profit-sharing, or annuity plan, or    ally recover their costs through                 business purpose, and the expenses would
plan for the benefit of your employees. If      depreciation.                                    otherwise be deductible by that person.
the plan included you as a self-employed
person, enter contributions made as an em-                                                          Do not include expenses for meals and
                                                                                                 entertainment on this line. Instead, see the
ployer on your behalf on Form 1040, line
28, or Form 1040NR, line 28, not on             Line 23                                          instructions for line 24b.
Schedule C.                                     You can deduct the following taxes and
                                                licenses on this line.                              Instead of keeping records of your ac-
   In most cases, you must file the applica-                                                     tual incidental expenses, you can use an
ble form listed below if you maintain a            • State and local sales taxes imposed on      optional method for deducting incidental
pension, profit-sharing, or other funded-de-    you as the seller of goods or services. If you   expenses only if you did not pay or incur
ferred compensation plan. The filing re-        collected this tax from the buyer, you must      meal expenses on a day you were traveling
quirement is not affected by whether or not     also include the amount collected in gross       away from your tax home. The amount of
the plan qualified under the Internal Reve-     receipts or sales on line 1.                     the deduction is $5 a day. Incidental ex-
nue Code, or whether or not you claim a            • Real estate and personal property           penses include fees and tips given to por-
deduction for the current tax year. There is    taxes on business assets.                        ters, baggage carriers, bellhops, hotel
a penalty for failure to timely file these         • Licenses and regulatory fees for your       maids, stewards or stewardesses and others
forms.                                          trade or business paid each year to state or     on ships, and hotel servants in foreign
                                                local governments. But some licenses, such       countries. They do not include expenses for
Form 5500-EZ. File this form if you have        as liquor licenses, may have to be amor-         laundry, cleaning and pressing of clothing,
a one-participant retirement plan that meets    tized. See chapter 8 of Pub. 535 for details.    lodging taxes, or the costs of telegrams or
certain requirements. A one-participant                                                          telephone calls. You cannot use this
plan is a plan that covers only you (or you        • Social security and Medicare taxes          method on any day that you use the stan-
and your spouse).                               paid to match required withholding from
                                                your employees’ wages. Reduce your de-           dard meal allowance (as explained in the
Form 5500-SF. File this form if you have a      duction by the amount shown on Form              instructions for line 24b).
small plan (fewer than 100 participants in      8846, line 4.                                       You cannot deduct expenses for attend-
most cases) that meets certain require-            • Federal unemployment tax paid.              ing a convention, seminar, or similar meet-
ments.                                             • Federal highway use tax.                    ing held outside the North American area
Form 5500. File this form for a plan that          • Contributions to state unemployment         unless the meeting is directly related to
does not meet the requirements for filing       insurance fund or disability benefit fund if     your trade or business and it is as reasona-
Form 5500-EZ or Form 5500-SF.                   they are considered taxes under state law.       ble for the meeting to be held outside the
                                                                                                 North American area as within it. These
   For details, see Pub. 560.                      Do not deduct the following.                  rules apply to both employers and employ-
ees. Other rules apply to luxury water          Individuals subject to the DOT hours of
travel.                                         service limits include the following.           Line 30
    For details on travel expenses, see chap-      • Certain air transportation workers         Business use of your home. You may be
ter 1 of Pub. 463.                              (such as pilots, crew, dispatchers, mechan-     able to deduct certain expenses for business
                                                ics, and control tower operators) who are       use of your home, subject to limitations.
                                                under Federal Aviation Administration reg-      You must attach Form 8829 if you claim
                                                ulations.                                       this deduction. For details, see the Instruc-
Line 24b                                           • Interstate truck operators who are         tions for Form 8829 and Pub. 587.
Enter your total deductible business meal       under DOT regulations.
and entertainment expenses. This includes          • Certain merchant mariners who are
expenses for meals while traveling away
from home for business and for meals that
                                                under Coast Guard regulations.                  Line 31
are business-related entertainment.                However, you can fully deduct meals,         If you have a loss, the amount of loss you
                                                incidentals, and entertainment furnished or     can deduct this year may be limited. Go to
Deductible expenses. Business meal ex-          reimbursed to an employee if you properly       line 32 before entering your loss on line 31.
penses are deductible only if they are (a)      treat the expense as wages subject to with-     If you answered “No” on line G or are a
directly related to or associated with the      holding. You can also fully deduct meals,       qualified joint venture reporting only rental
active conduct of your trade or business, (b)   incidentals, and entertainment provided to      real estate, also see the Instructions for
not lavish or extravagant, and (c) incurred     a nonemployee to the extent the expenses        Form 8582. Enter the net profit or deducti-
while you or your employee is present at        are includible in the gross income of that      ble loss here. Combine this amount with
the meal.                                       person and reported on Form 1099-MISC.          any profit or loss from other businesses and
    You cannot deduct any expense paid or       See Pub. 535 for details and other excep-       enter the total on both Form 1040, line 12,
incurred for a facility (such as a yacht or     tions.                                          and Schedule SE, line 2, or on Form
hunting lodge) used for any activity usually                                                    1040NR, line 13. Nonresident aliens using
considered entertainment, amusement, or         Daycare providers. If you qualify as a          Form 1040NR should also enter the total on
recreation.                                     family daycare provider, you can use the        Schedule SE, line 2, if you are covered
    Also, you cannot deduct membership          standard meal and snack rates, instead of       under the U.S. social security system due to
dues for any club organized for business,       actual costs, to compute the deductible cost    an international social security agreement
pleasure, recreation, or other social pur-      of meals and snacks provided to eligible        currently in effect. See the Schedule SE
pose. This includes country clubs, golf and     children. See Pub. 587 for details, includ-     instructions for information on interna-
athletic clubs, airline and hotel clubs, and    ing recordkeeping requirements.                 tional social security agreements. Estates
clubs operated to provide meals under con-                                                      and trusts should enter the total on Form
ditions favorable to business discussion.                                                       1041, line 3.
But it does not include civic or public serv-   Line 25                                         Excess farm loss rules. If your Schedule C
ice organizations, professional organiza-                                                       activity includes processing a farm com-
tions (such as bar and medical                  Deduct utility expenses only for your trade     modity as part of your farming business,
associations), business leagues, trade as-      or business.                                    your deductible loss from that activity may
sociations, chambers of commerce, boards        Local telephone service. If you used your       be limited if you received certain subsidies.
of trade, and real estate boards, unless a      home phone for business, do not deduct the      See page F-7 of the Instructions for Sched-
principal purpose of the organization is to     base rate (including taxes) of the first        ule F for a list of those subsidies. Use one
entertain, or provide entertainment facili-     phone line into your residence. But you can     of the worksheets beginning on page F-9 to
ties for, members or their guests.              deduct any additional costs you incurred        determine if you have an excess farm loss.
    There are exceptions to these rules as      for business that are more than the base rate   See the Instructions for Schedule F for
well as other rules that apply to sky-box       of the first phone line. For example, if you    more details on how to complete the work-
rentals and tickets to entertainment events.    had a second line, you can deduct the busi-     sheets.
See chapters 1 and 2 of Pub. 463.               ness percentage of the charges for that line,   Statutory employees and qualified joint
Standard meal allowance. Instead of de-         including the base rate charges.                ventures reporting only rental real estate
ducting the actual cost of your meals while                                                     income not subject to self-employment tax.
traveling away from home, you can use the                                                       Include your net profit or deductible loss
                                                                                                from line 31 with other Schedule C
standard meal allowance for your daily          Line 26                                         amounts on Form 1040, line 12, or on Form
meals and incidental expenses. Under this
method, you deduct a specified amount, de-      Enter the total salaries and wages for the      1040NR, line 13. However, do not report
pending on where you travel, instead of         tax year. Do not include salaries and wages     this amount on Schedule SE, line 2. If you
keeping records of your actual meal ex-         deducted elsewhere on your return or            were a statutory employee and are required
penses. However, you must still keep rec-       amounts paid to yourself. Reduce your de-       to file Schedule SE because of other
ords to prove the time, place, and business     duction by the amounts claimed on:              self-employment income, see page SE-4 of
purpose of your travel.                            • Form 5884, Work Opportunity Credit,        the instructions for Schedule SE.
                                                line 2;                                         Rental real estate activity. Unless you are
    The standard meal allowance is the fed-
eral M&IE rate. You can find these rates on        • Form 8844, Empowerment Zone and            a qualifying real estate professional, a
the Internet at www.gsa.gov. Click on “Per      Renewal Community Employment Credit,            rental real estate activity is a passive activ-
Diem Rates” for links to locations inside       line 2;                                         ity, even if you materially participated in
and outside the continental United States.         • Form 8845, Indian Employment               the activity. If you have a loss, you may
                                                Credit, line 4; and                             need to file Form 8582 to figure your de-
    See chapter 1 of Pub. 463 for details on                                                    ductible loss to enter on line 31. See the
how to figure your deduction using the             • Form 8932, Credit for Employer Dif-        Instructions for Form 8582.
standard meal allowance, including special      ferential Wage Payments, line 2.
rules for partial days of travel.                                                               Notary public. Do not enter your net profit
                                                           If you provided taxable fringe       from line 31 on Schedule SE, line 2, unless
Amount of deduction. In most cases, you                    benefits to your employees,          you are required to file Schedule SE be-
can deduct only 50% of your business meal                  such as personal use of a car, do    cause of other self-employment income.
and entertainment expenses, including                      not deduct as wages the amount       See page SE-4 of the instructions for
meals incurred while away from home on          applicable to depreciation and other ex-        Schedule SE.
business. However, for individuals subject      penses claimed elsewhere.
to the Department of Transportation (DOT)                                                       Community income. If you and your
hours of service limits, that percentage is        In most cases, you are required to file      spouse had community income and are fil-
increased to 80% for business meals con-        Form W-2, Wage and Tax Statement, for           ing separate returns, see page SE-2 of the
sumed during, or incident to, any period of     each employee. See the Instructions for         instructions for Schedule SE before figur-
duty for which those limits are in effect.      Forms W-2 and W-3.                              ing self-employment tax.
Earned income credit. If you have a net            For details, see the Instructions for
profit on line 31, this amount is earned in-    Form 6198 and Pub. 925.                          Line 33
come and may qualify you for the earned                                                          Your inventories can be valued at cost, the
income credit (EIC).                                                                             lower of cost or market, or any other
                                                                                                 method approved by the IRS. However,
           To figure your EIC, use the in-
           structions for Form 1040, lines      Part III. Cost of Goods                          you are required to use cost if you are using
                                                                                                 the cash method of accounting.
           64a and 64b. Complete all ap-
           plicable steps plus Worksheet        Sold
B. If you are required to file Schedule SE,     In most cases, if you engaged in a trade or
remember to enter one-half of your
self-employment tax in Part 1, line 1d, of
                                                business in which the production, purchase,      Line 35
                                                or sale of merchandise was an income-pro-
Worksheet B.                                    ducing factor, you must take inventories         If you are changing your method of ac-
                                                into account at the beginning and end of         counting beginning with 2010, refigure last
                                                your tax year.                                   year’s closing inventory using your new
                                                                                                 method of accounting and enter the result
Line 32                                         Exception for certain taxpayers. If you are
                                                                                                 on line 35. If there is a difference between
At-risk rules. In most cases, if you have a                                                      last year’s closing inventory and the
                                                a qualifying taxpayer or a qualifying small      refigured amount, attach an explanation
business loss and amounts invested in the       business taxpayer (discussed next), you can
business for which you are not at risk, you                                                      and take it into account when figuring your
                                                account for inventoriable items in the same      section 481(a) adjustment. For details, see
must complete Form 6198 to figure your          manner as materials and supplies that are
allowable loss. The at-risk rules generally                                                      the example on page C-3 under Line F.
                                                not incidental. Under this accounting
limit the amount of loss (including loss on     method, inventory costs for raw materials
the disposition of assets) you can claim to     purchased for use in producing finished
the amount you could actually lose in the
                                                goods and merchandise purchased for re-          Line 41
                                                sale are deductible in the year the finished     If you account for inventoriable items in
    Check box 32b if you have amounts in-       goods or merchandise are sold (but not           the same manner as materials and supplies
vested in this business for which you are       before the year you paid for the raw materi-     that are not incidental, enter on line 41 the
not at risk, such as the following.             als or merchandise, if you are also using the    portion of your raw materials and merchan-
   • Nonrecourse loans used to finance the      cash method). Enter amounts paid for all         dise purchased for resale that is included on
business, to acquire property used in the       raw materials and merchandise during             line 40 and was not sold during the year.
business, or to acquire the business that are   2010 on line 36. The amount you can de-
not secured by your own property (other         duct for 2010 is figured on line 42.
than property used in the business). How-
                                                    Qualifying taxpayer. This is a taxpayer
ever, there is an exception for certain non-
recourse financing borrowed by you in           (a) whose average annual gross receipts for
                                                the 3 prior tax years are $1 million or less,
                                                                                                 Part IV. Information on
connection with holding real property.
   • Cash, property, or borrowed amounts        and (b) whose business is not a tax shelter
                                                (as defined in section 448(d)(3)).
                                                                                                 Your Vehicle
used in the business (or contributed to the
business, or used to acquire the business)         Qualifying small business taxpayer.
that are protected against loss by a guaran-
tee, stop-loss agreement, or other similar
                                                This is a taxpayer (a) whose average annual      Line 44b
                                                gross receipts for the 3 prior tax years are
arrangement (excluding casualty insurance       $10 million or less, (b) whose business is       In most cases, commuting is travel between
and insurance against tort liability).          not a tax shelter (as defined in section         your home and a work location. If you con-
   • Amounts borrowed for use in the busi-      448(d)(3)), and (c) whose principal busi-        verted your vehicle during the year from
ness from a person who has an interest in       ness activity is not an ineligible activity as   personal to business use (or vice versa),
the business, other than as a creditor, or      explained in Rev. Proc. 2002-28. You can         enter your commuting miles only for the
who is related under section 465(b)(3)(C)       find Rev. Proc. 2002-28 on page 815 of           period you drove your vehicle for business.
to a person (other than you) having such an     Internal Revenue Bulletin 2002-18 at             For information on certain travel that is
interest.                                       www.irs.gov/pub/irs-irbs/irb02-18.pdf.           considered a business expense rather than
    Figuring your deductible loss. If all                                                        commuting, see the Instructions for
amounts are at risk in this business, check        Changing accounting methods. File
                                                Form 3115 if you are a qualifying taxpayer       Form 2106.
box 32a. If you answered “Yes” on line G,
enter your loss on line 31. But if you an-      or qualifying small business taxpayer and
swered “No” on line G or are a qualified        want to change to the cash method or to
                                                account for inventoriable items as non-inci-
joint venture reporting only rental real es-
tate, you may need to complete Form 8582        dental materials and supplies.                   Part V. Other
to figure your allowable loss to enter on
line 31. See the Instructions for Form 8582        Additional information. For additional
                                                guidance on this method of accounting for
for details.                                                                                     Include all ordinary and necessary business
                                                inventoriable items, see the following.
    If you checked box 32b, first complete                                                       expenses not deducted elsewhere on
Form 6198 to determine the amount of your          • Pub. 538 discusses both exceptions.         Schedule C. List the type and amount of
deductible loss. If you answered “Yes” on          • If you are a qualifying taxpayer, see       each expense separately in the space pro-
line G, enter that amount on line 31. But if    Rev. Proc. 2001-10, on page 272 of Internal      vided. Enter the total on lines 48 and 27. Do
you answered “No” on line G or are a quali-     Revenue Bulletin 2001-2 at                       not include the cost of business equipment
fied joint venture reporting only rental real   www.irs.gov/pub/irs-irbs/irb01-02.pdf.           or furniture, replacements or permanent
estate, your loss may be further limited. See      • If you are a qualifying small business      improvements to property, or personal, liv-
the Instructions for Form 8582. If your         taxpayer, see Rev. Proc. 2002-28, on page        ing, and family expenses. Do not include
at-risk amount is zero or less, enter -0- on    815 of Internal Revenue Bulletin 2002-18         charitable contributions. Also, you cannot
line 31. Be sure to attach Form 6198 to         at www.irs.gov/pub/irs-irbs/irb02-18.pdf.        deduct fines or penalties paid to a govern-
your return. If you checked box 32b and                                                          ment for violating any law. For details on
you do not attach Form 6198, the process-                                                        business expenses, see Pub. 535.
                                                           Certain direct and indirect ex-
ing of your tax return may be delayed.                     penses may have to be capital-        Amortization. Include amortization in this
    Any loss from this business not allowed                ized or included in inventory.        part. For amortization that begins in 2010,
for 2010 only because of the at-risk rules is              See the instructions for Part II      you must complete and attach Form 4562.
treated as a deduction allocable to the busi-   on page C-4. See Pub. 538 for additional
ness in 2011.                                   information.                                        You can elect to amortize such costs as:
   • The cost of pollution-control facili-                income in the year collected. For details,                    remove architectural or transportation bar-
ties;                                                     see Pub. 535.                                                 riers to individuals with disabilities and the
   • Amounts paid for research and experi-                                                                              elderly. However, you cannot take both a
                                                          Business start-up costs. If your business                     credit (on Form 8826) and a deduction for
mentation;                                                began in 2010, you can elect to deduct up to                  the same expenditures.
   • Qualified revitalization expenditures;               $5,000 of certain business start-up costs
                                                          paid or incurred after October 24, 2004, in                   Qualified disaster expenses. You can elect
   • Amounts paid to acquire, protect, ex-                                                                              to deduct certain expenses you paid or in-
pand, register, or defend trademarks or                   tax years before 2010, and up to $10,000 of
                                                          certain business start-up costs paid or in-                   curred as a result of a federally declared
trade names;                                                                                                            disaster occurring before January 1, 2011.
                                                          curred in 2010. The $5,000 limit is reduced
   • Goodwill and certain other in-                       (but not below zero) by the amount by                         For more information, see chapter 7 of Pub.
tangibles; or                                             which your total start-up costs exceed                        535.
   • Certain expenses paid or incurred to                 $50,000 and the $10,000 limit is reduced                      Film and television production expenses.
create or acquire a musical composition or                (but not below zero) by the amount by                         You can elect to deduct costs of certain
its copyright.                                            which your start-up costs exceed $60,000.                     qualified film and television productions.
    In most cases, you cannot amortize real                  For details, see chapters 7 and 8 of Pub.                  For details, see Pub. 535.
property construction period interest and                 535. For amortization that begins in 2010,                    Forestation and reforestation costs. Re-
taxes. Special rules apply for allocating in-             you must complete and attach Form 4562.                       forestation costs are generally capital ex-
terest to real or personal property produced                                                                            penditures. However, for each qualified
in your trade or business.                                Costs of making commercial buildings
                                                          energy efficient. You may be able to de-                      timber property, you can elect to expense
    For a complete list, see the Instructions             duct part or all of the cost of modifying                     up to $10,000 ($5,000 if married filing sep-
for Form 4562, Part VI.                                   existing commercial buildings to make                         arately) of qualifying reforestation costs
At-risk loss deduction. Any loss from this                them energy efficient. For details, see sec-                  paid or incurred in 2010.
business that was not allowed as a deduc-                 tion 179D, Notice 2006-52, and Notice                            You can elect to amortize the remaining
tion last year only because of the at-risk                2008-40. Notice 2006-52, 2006-26 I.R.B.                       costs over 84 months. For amortization that
rules is treated as a deduction allocable to              1175, is available at                                         begins in 2010, you must complete and at-
this business in 2010. For the loss to be                 www.irs.gov/irb/2006-26_IRB/ar11.html.                        tach Form 4562.
deductible, the amount that is “at risk” must             Notice 2008-40, 2008-14 I.R.B. 725, is                           The amortization election does not ap-
be increased.                                             available at                                                  ply to trusts, and the expense election does
                                                          www.irs.gov/irb/2008-14_IRB/ar12.html.                        not apply to estates and trusts. For details
Bad debts. Include debts and partial debts
from sales or services that were included in              Deduction for removing barriers to                            on reforestation expenses, see chapters 7
income and are definitely known to be                     individuals with disabilities and the eld-                    and 8 of Pub. 535.
worthless. If you later collect a debt that               erly. You may be able to deduct up to
you deducted as a bad debt, include it as                 $15,000 of costs paid or incurred in 2010 to

Principal Business or Professional Activity Codes

These codes for the Principal Business or Professional       Select the category that best describes your primary       of real estate agents and brokers) and enter it on
Activity classify sole proprietorships by the type of     business activity (for example, Real Estate). Then            Schedule C or C-EZ, line B.
activity they are engaged in to facilitate the            select the activity that best identifies the principal           Note. If your principal source of income is from
administration of the Internal Revenue Code. These        source of your sales or receipts (for example, real           farming activities, you should file Schedule F.
six-digit codes are based on the North American           estate agent). Now find the six-digit code assigned to
Industry Classification System (NAICS).                   this activity (for example, 531210, the code for offices

Accommodation, Food                         561600 Investigation & security             Support Activities for Agriculture &         711210 Spectator sports (including
Services, & Drinking Places                          services                           Forestry                                            professional sports clubs &
                                            561720 Janitorial services                  115210 Support activities for animal                racetrack operations)
                                            561730 Landscaping services                          production (including farriers)
721310 Rooming & boarding houses                                                                                                     Construction of Buildings
                                            561110 Office administrative services       115110 Support activities for crop
721210 RV (recreational vehicle)                                                                 production (including cotton        236200 Nonresidential building
        parks & recreational camps          561420 Telephone call centers
                                                     (including telephone                        ginning, soil preparation,                   construction
721100 Traveler accommodation                                                                    planting, & cultivating)            236100 Residential building
        (including hotels, motels, &                 answering services &
                                                     telemarketing bureaus)             115310 Support activities for forestry                construction
        bed & breakfast inns)
                                            561500 Travel arrangement &                                                              Heavy and Civil Engineering
Food Services & Drinking Places                                                         Arts, Entertainment, &                       Construction
                                                     reservation services
722410 Drinking places (alcoholic           561490 Other business support               Recreation                                   237310 Highway, street, & bridge
        beverages)                                   services (including                Amusement, Gambling, & Recreation                     construction
722110 Full-service restaurants                      repossession services, court       Industries                                   237210 Land subdivision
722210 Limited-service eating places                 reporting, & stenotype             713100 Amusement parks & arcades             237100 Utility system construction
722300 Special food services                         services)                          713200 Gambling industries                   237990 Other heavy & civil
        (including food service             561790 Other services to buildings &                                                              engineering construction
        contractors & caterers)                                                         713900 Other amusement &
                                                     dwellings                                    recreation services (including     Specialty Trade Contractors
                                            561900 Other support services                         golf courses, skiing facilities,
Administrative & Support and                         (including packaging &                                                          238310 Drywall & insulation
                                                                                                  marinas, fitness centers,                   contractors
Waste Management &                                   labeling services, &                         bowling centers, skating
Remediation Services                                 convention & trade show                      rinks, miniature golf courses)     238210 Electrical contractors
Administrative & Support Services                    organizers)                        Museums, Historical Sites, & Similar         238350 Finish carpentry contractors
561430 Business service centers             Waste Management & Remediation              Institutions                                 238330 Flooring contractors
        (including private mail             Services                                                                                 238130 Framing carpentry contractors
                                                                                        712100 Museums, historical sites, &
        centers & copy shops)               562000 Waste management &                             similar institutions               238150 Glass & glazing contractors
561740 Carpet & upholstery cleaning                  remediation services               Performing Arts, Spectator Sports, &         238140 Masonry contractors
        services                                                                        Related Industries                           238320 Painting & wall covering
561440 Collection agencies                  Agriculture, Forestry, Hunting,                                                                   contractors
                                            & Fishing                                   711410 Agents & managers for
561450 Credit bureaus                                                                             artists, athletes, entertainers,   238220 Plumbing, heating & air-
561410 Document preparation                 112900 Animal production (including                   & other public figures                      conditioning contractors
        services                                   breeding of cats and dogs)           711510 Independent artists, writers, &       238110 Poured concrete foundation &
561300 Employment services                  114110 Fishing                                        performers                                  structure contractors
561710 Exterminating & pest control         113000 Forestry & logging (including        711100 Performing arts companies             238160 Roofing contractors
        services                                   forest nurseries & timber            711300 Promoters of performing arts,         238170 Siding contractors
                                                   tracts)                                        sports, & similar events
561210 Facilities support                                                                                                            238910 Site preparation contractors
        (management) services               114210 Hunting & trapping

Principal Business or Professional Activity Codes (continued)
238120 Structural steel & precast           Hospitals                                 311500 Dairy product mfg.               811430 Footwear & leather goods
       concrete construction                622000 Hospitals                          311400 Fruit & vegetable preserving            repair
       contractors                          Nursing & Residential Care Facilities             & speciality food mfg.          811410 Home & garden equipment &
238340 Tile & terrazzo contractors                                                    311200 Grain & oilseed milling                 appliance repair &
                                            623000 Nursing & residential care                                                        maintenance
238290 Other building equipment                      facilities                       311610 Animal slaughtering &
       contractors                                                                            processing                      811420 Reupholstery & furniture
                                            Social Assistance                                                                        repair
238390 Other building finishing                                                       311710 Seafood product preparation
       contractors                          624410 Child day care services                    & packaging                     811490 Other personal & household
238190 Other foundation, structure, &       624200 Community food & housing,          311300 Sugar & confectionery                   goods repair & maintenance
       building exterior contractors                 & emergency & other relief               product mfg.
238990 All other specialty trade                     services
                                                                                      311900 Other food mfg. (including
                                                                                                                              Professional, Scientific, &
       contractors                          624100 Individual & family services               coffee, tea, flavorings, &      Technical Services
                                            624310 Vocational rehabilitation                  seasonings)                     541100 Legal services
Educational Services                                 services                         Leather & Allied Product                541211 Offices of certified public
611000 Educational services                                                           Manufacturing                                     accountants
       (including schools, colleges,        Information                                                                       541214 Payroll services
                                                                                      316210 Footwear mfg. (including
       & universities)                      511000 Publishing industries (except              leather, rubber, & plastics)    541213 Tax preparation services
                                                                                      316110 Leather & hide tanning &         541219 Other accounting services
Finance & Insurance                         Broadcasting (except Internet) &                  finishing
                                            Telecommunications                                                                Architectural, Engineering, &
Credit Intermediation & Related                                                       316990 Other leather & allied product   Related Services
Activities                                  515000 Broadcasting (except Internet)             mfg.                            541310 Architectural services
522100 Depository credit                    517000 Telecommunications &               Nonmetallic Mineral Product
           intermediation (including                Internet service providers                                                541350 Building inspection services
                                                                                      Manufacturing                           541340 Drafting services
           commercial banking, savings      Data Processing Services
           institutions, & credit unions)                                             327300 Cement & concrete product        541330 Engineering services
                                            518210 Data processing, hosting, &                mfg.
522200 Nondepository credit                         related services                                                          541360 Geophysical surveying &
           intermediation (including                                                  327100 Clay product & refractory                  mapping services
                                            519100 Other information services                 mfg.
           sales financing & consumer               (including news syndicates &                                              541320 Landscape architecture
           lending)                                                                   327210 Glass & glass product mfg.                 services
                                                    libraries, Internet publishing
522300 Activities related to credit                 & broadcasting)                   327400 Lime & gypsum product mfg.       541370 Surveying & mapping (except
           intermediation (including loan   Motion Picture & Sound Recording          327900 Other nonmetallic mineral                  geophysical) services
           brokers)                                                                           product mfg.                    541380 Testing laboratories
Insurance Agents, Brokers, &                512100 Motion picture & video
                                                    industries (except video          Mining                                  Computer Systems Design & Related
Related Activities                                                                                                            Services
524210 Insurance agencies &                                                           212110 Coal mining
                                            512200 Sound recording industries                                                 541510 Computer systems design &
           brokerages                                                                 212200 Metal ore mining                           related services
524290 Other insurance related              Manufacturing                             212300 Nonmetallic mineral mining       Specialized Design Services
           activities                                                                        & quarrying
                                            315000 Apparel mfg.                                                               541400 Specialized design services
Securities, Commodity Contracts, &                                                    211110 Oil & gas extraction                       (including interior, industrial,
Other Financial Investments &               312000 Beverage & tobacco product
                                                    mfg.                              213110 Support activities for mining              graphic, & fashion design)
Related Activities
                                            334000 Computer & electronic                                                      Other Professional, Scientific, &
523140 Commodity contracts brokers
                                                    product mfg.                      Other Services                          Technical Services
523130 Commodity contracts dealers                                                    Personal & Laundry Services             541800 Advertising & related services
                                            335000 Electrical equipment,
523110 Investment bankers &                         appliance, & component mfg.       812111 Barber shops                     541600 Management, scientific, &
           securities dealers                                                         812112 Beauty salons                              technical consulting services
                                            332000 Fabricated metal product mfg.
523210 Securities & commodity                                                         812220 Cemeteries & crematories         541910 Market research & public
           exchanges                        337000 Furniture & related product
                                                    mfg.                              812310 Coin-operated laundries &                  opinion polling
523120 Securities brokers                                                                      drycleaners                    541920 Photographic services
                                            333000 Machinery mfg.
523900 Other financial investment                                                     812320 Drycleaning & laundry            541700 Scientific research &
           activities (including            339110 Medical equipment &
                                                    supplies mfg.                              services (except                         development services
           investment advice)                                                                  coin-operated) (including
                                            322000 Paper mfg.                                                                 541930 Translation & interpretation
                                                                                               laundry & drycleaning                    services
Health Care & Social                        324100 Petroleum & coal products                   dropoff & pickup sites)
Assistance                                          mfg.                                                                      541940 Veterinary services
                                            326000 Plastics & rubber products         812210 Funeral homes & funeral          541990 All other professional,
Ambulatory Health Care Services                                                                services
                                                    mfg.                                                                                scientific, & technical
621610 Home health care services                                                      812330 Linen & uniform supply                     services
                                            331000 Primary metal mfg.
621510 Medical & diagnostic                                                           812113 Nail salons
                                            323100 Printing & related support
                                                    activities                        812930 Parking lots & garages           Real Estate & Rental &
621310 Offices of chiropractors
                                            313000 Textile mills                      812910 Pet care (except veterinary)     Leasing
621210 Offices of dentists                                                                     services                       Real Estate
                                            314000 Textile product mills
621330 Offices of mental health                                                       812920 Photofinishing                   531100 Lessors of real estate
       practitioners (except                336000 Transportation equipment
                                                    mfg.                              812190 Other personal care services              (including miniwarehouses &
       physicians)                                                                             (including diet & weight                self-storage units)
621320 Offices of optometrists              321000 Wood product mfg.                           reducing centers)
                                            339900 Other miscellaneous mfg.                                                   531210 Offices of real estate agents
621340 Offices of physical,                                                           812990 All other personal services               & brokers
       occupational & speech                Chemical Manufacturing                    Repair & Maintenance                    531320 Offices of real estate
       therapists, & audiologists           325100 Basic chemical mfg.                                                                 appraisers
                                                                                      811120 Automotive body, paint,
621111 Offices of physicians (except        325500 Paint, coating, & adhesive                  interior, & glass repair       531310 Real estate property managers
       mental health specialists)                   mfg.                                                                      531390 Other activities related to real
                                                                                      811110 Automotive mechanical &
621112 Offices of physicians, mental        325300 Pesticide, fertilizer, & other              electrical repair &                     estate
       health specialists                           agricultural chemical mfg.                 maintenance                    Rental & Leasing Services
621391 Offices of podiatrists               325410 Pharmaceutical & medicine          811190 Other automotive repair &
                                                    mfg.                                                                      532100 Automotive equipment rental
621399 Offices of all other                                                                    maintenance (including oil              & leasing
       miscellaneous health                 325200 Resin, synthetic rubber, &                  change & lubrication shops &
       practitioners                                artificial & synthetic fibers &                                           532400 Commercial & industrial
                                                                                               car washes)                             machinery & equipment
621400 Outpatient care centers                      filaments mfg.                    811310 Commercial & industrial                   rental & leasing
621900 Other ambulatory health care         325600 Soap, cleaning compound, &                  machinery & equipment          532210 Consumer electronics &
       services (including ambulance                toilet preparation mfg.                    (except automotive &                    appliances rental
       services, blood, & organ             325900 Other chemical product &                    electronic) repair &
       banks)                                       preparation mfg.                           maintenance                    532220 Formal wear & costume
                                            Food Manufacturing                        811210 Electronic & precision
                                                                                               equipment repair &             532310 General rental centers
                                            311110 Animal food mfg.                                                           532230 Video tape & disc rental
                                            311800 Bakeries & tortilla mfg.

Principal Business or Professional Activity Codes (continued)
532290 Other consumer goods rental      General Merchandise Stores               454210 Vending machine operators           423940 Jewelry, watch, precious
                                        452000 General merchandise stores        454390 Other direct selling                       stone, & precious metals
Religious, Grantmaking, Civic,          Health & Personal Care Stores                   establishments (including           423300 Lumber & other construction
Professional, & Similar                                                                 door-to-door retailing, frozen             materials
Organizations                           446120 Cosmetics, beauty supplies, &            food plan providers, party
                                                 perfume stores                                                             423800 Machinery, equipment, &
813000 Religious, grantmaking, civic,                                                   plan merchandisers, &                      supplies
                                        446130 Optical goods stores                     coffee-break service
       professional, & similar                                                                                              423500 Metal & mineral (except
       organizations                    446110 Pharmacies & drug stores                 providers)                                 petroleum)
                                        446190 Other health & personal care                                                 423100 Motor vehicle & motor
Retail Trade                                     stores                          Transportation &                                  vehicle parts & supplies
                                        Motor Vehicle & Parts Dealers            Warehousing
Building Material & Garden                                                                                                  423400 Professional & commercial
Equipment & Supplies Dealers            441300 Automotive parts, accessories,    481000   Air transportation                       equipment & supplies
444130 Hardware stores                           & tire stores                   485510   Charter bus industry              423930 Recyclable materials
444110 Home centers                     441222 Boat dealers                      484110   General freight trucking, local   423910 Sporting & recreational goods
444200 Lawn & garden equipment &        441221 Motorcycle dealers                484120   General freight trucking, long           & supplies
         supplies stores                441110 New car dealers                            distance                          423920 Toy & hobby goods &
444120 Paint & wallpaper stores         441210 Recreational vehicle dealers      485210 Interurban & rural bus                     supplies
                                                 (including motor home &                  transportation                    423990 Other miscellaneous durable
444190 Other building materials
         dealers                                 travel trailer dealers)         486000 Pipeline transportation                    goods
Clothing & Accessories Stores           441120 Used car dealers                  482110 Rail transportation                 Merchant Wholesalers, Nondurable
                                        441229 All other motor vehicle           487000 Scenic & sightseeing                Goods
448130 Children’s & infants’ clothing
         stores                                  dealers                                  transportation                    424300 Apparel, piece goods, &
448150 Clothing accessories stores      Sporting Goods, Hobby, Book, &           485410 School & employee bus                      notions
                                        Music Stores                                      transportation                    424800 Beer, wine, & distilled
448140 Family clothing stores
                                        451211 Book stores                       484200 Specialized freight trucking               alcoholic beverage
448310 Jewelry stores                                                                     (including household moving
                                        451120 Hobby, toy, & game stores                                                    424920 Books, periodicals, &
448320 Luggage & leather goods                                                            vans)                                    newspapers
         stores                         451140 Musical instrument &
                                                 supplies stores                 485300 Taxi & limousine service            424600 Chemical & allied products
448110 Men’s clothing stores                                                     485110 Urban transit systems
                                        451212 News dealers & newsstands                                                    424210 Drugs & druggists’ sundries
448210 Shoe stores                                                               483000 Water transportation
                                        451220 Prerecorded tape, compact                                                    424500 Farm product raw materials
448120 Women’s clothing stores                   disc, & record stores           485990 Other transit & ground              424910 Farm supplies
448190 Other clothing stores            451130 Sewing, needlework, & piece                passenger transportation          424930 Flower, nursery stock, &
Electronic & Appliance Stores                    goods stores                    488000 Support activities for                     florists’ supplies
443130 Camera & photographic            451110 Sporting goods stores                      transportation (including         424400 Grocery & related products
         supplies stores                                                                  motor vehicle towing)
                                        Miscellaneous Store Retailers                                                       424950 Paint, varnish, & supplies
443120 Computer & software stores                                                Couriers & Messengers
                                        453920 Art dealers                                                                  424100 Paper & paper products
443111 Household appliance stores                                                492000 Couriers & messengers
                                        453110 Florists                                                                     424700 Petroleum & petroleum
443112 Radio, television, & other                                                Warehousing & Storage Facilities                  products
                                        453220 Gift, novelty, & souvenir
         electronics stores                      stores                          493100 Warehousing & storage               424940 Tobacco & tobacco products
Food & Beverage Stores                  453930 Manufactured (mobile) home                 (except leases of                 424990 Other miscellaneous
445310 Beer, wine, & liquor stores               dealers                                  miniwarehouses &                         nondurable goods
445220 Fish & seafood markets                                                             self-storage units)
                                        453210 Office supplies & stationery
445230 Fruit & vegetable markets                 stores                          Utilities                                  Wholesale Electronic Markets
445100 Grocery stores (including        453910 Pet & pet supplies stores                                                    and Agents & Brokers
                                                                                 221000 Utilities
         supermarkets & convenience     453310 Used merchandise stores                                                      425110 Business to business
         stores without gas)            453990 All other miscellaneous store                                                       electronic markets
                                                                                 Wholesale Trade
445210 Meat markets                              retailers (including tobacco,                                              425120 Wholesale trade agents &
                                                 candle, & trophy shops)         Merchant Wholesalers, Durable                     brokers
445290 Other specialty food stores                                               Goods
Furniture & Home Furnishing Stores      Nonstore Retailers
                                                                                 423600 Electrical & electronic goods       999999 Unclassified establishments
442110 Furniture stores                 454112 Electronic auctions               423200 Furniture & home furnishing                (unable to classify)
442200 Home furnishings stores          454111 Electronic shopping               423700 Hardware, & plumbing &
Gasoline Stations                       454310 Fuel dealers                             heating equipment & supplies
447100 Gasoline stations (including     454113 Mail-order houses
         convenience stores with gas)

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