Election To Postpone Determination

as To Whether the Presumption Applies That an

Activity Is Engaged in for Profit

Form 5213

(Rev. February 2006) OMB No. 1545-0195

Department of the Treasury

Internal Revenue Service To be filed by individuals, estates, trusts, partnerships, and S corporations.

Name(s) as shown on tax return Identifying number as shown on tax return

Address (number and street, apt. no., rural route) (or P.O. box number if mail is not delivered to street address)

City, town or post office, state, and ZIP code

The taxpayer named above elects to postpone a determination as to whether the presumption applies that the activity described

below is engaged in for profit. The determination is postponed until the close of:

● The 6th tax year, for an activity that consists mainly of breeding, training, showing, or racing horses or

● The 4th tax year for any other activity,

after the tax year in which the taxpayer first engaged in the activity.

1 Type of taxpayer engaged in the activity (check the box that applies):

Individual Partnership S corporation Estate or trust

2b First tax year you engaged in activity described in 2a

2a Description of activity for which you elect to postpone a determination

Under penalties of perjury, I declare that I have examined this election, including accompanying schedules, and to the best of my knowledge and belief, it is true,

correct, and complete.

(Signature of taxpayer or fiduciary) (Date)

(Signature of taxpayer’s spouse, if joint return was filed) (Date)

(Signature of general partner authorized to sign partnership return) (Date)

(Signature and title of officer, if an S corporation) (Date)

For Privacy Act and Paperwork Reduction Act Notice, see instructions on back. Cat. No. 42361U Form 5213 (Rev. 2-2006)
Form 5213 (Rev. 2-2006) Page 2

You may not use this form if you have been

engaged in:

General Instructions

● Breeding, training, showing, or racing

horses for more than 7 years or

● Any other activity for more than 5 years.

Automatic Extension of Period of

Limitations

Generally, filing this form automatically

extends the period of limitations for assessing

any income tax deficiency specifically

attributable to the activity during any year in

the presumption period. The extension also

applies to partners or shareholders in the

activity.

The time needed to complete and file this

form will vary depending on individual

circumstances. The estimated burden for

individual taxpayers filing this form is

approved under OMB control number

1545-0074 and is included in the estimates

shown in the instructions for their individual

income tax return. The estimated burden for

all other taxpayers who file this form is shown

below.

Recordkeeping 7 min.

The period is extended until 2 years after

the due date for filing the return (determined

without extensions) for the last tax year in the

presumption period. For example, for an

activity subject to a 5-year presumption

period that began in 2003 and ends in 2007,

the period of limitations automatically extends

to April 15, 2010, for all tax years in the

presumption period that would otherwise

expire before that date. Periods of limitations

for tax years in the 5-year period expiring

after April 15, 2010, would remain open until

their normal expiration date. However, early

termination of the presumption period does

not terminate the automatic extension of the

period of limitations.

Learning about the

law or the form 10 min.

Joint Returns

Preparing the form 10 min.

If you and your spouse filed a joint return,

both of you must elect to postpone the

determination even if only one of you is

engaged in the activity.

Copying, assembling, and

sending the form to the IRS 20 min.

If you have comments concerning the

accuracy of these time estimates or

suggestions for making this form simpler, we

would be happy to hear from you. See the

instructions for the tax return with which this

form is filed.

How Many Forms To File

Generally, if you want a postponement for

more than one activity, you must file a

separate Form 5213 for each activity.

However, you may file one form for more than

one activity if all of the activities have the

same presumption period. Be sure to

describe each activity in detail and list the

first tax year in which you were engaged in

the activities.

The automatic extension applies only to

those deductions attributable to the activity

and to any deductions (such as medical

expenses or charitable contribution

deductions) that are affected by changes

made to adjusted gross income.

Purpose of Form

Use Form 5213 to elect to postpone an IRS

determination as to whether the presumption

applies that an activity is engaged in for

profit.

The automatic extension does not affect

general waivers of the statute of limitations

that may be executed.

General Information

Generally, if you are an individual, estate,

trust, partnership, or S corporation in an

activity not engaged in for profit, some of

your deductions may not be allowed.

However, an activity is presumed to be

engaged in for profit (and, therefore,

deductions are not limited) if the gross

income exceeds the deductions:

Generally, in determining whether you are

engaged in more than one activity, you must

consider all of the following:

Specific Instructions

Name and Identifying Number as

Shown on Tax Return

● The similarity of the activities,

● The business purpose that is (or might be)

served by carrying on the activities separately

or together in a trade or business or

investment setting, and

Enter your name(s) and identifying number as

shown on your tax return for the first tax year

● The organizational and economic

interrelationship of the activities.

● From an activity that consists mainly of

breeding, training, showing, or racing horses

for each of 2 or more of the tax years in the

period of 7 consecutive tax years ending with

the tax year in question or

When To File

File this form within 3 years after the due date

of your return (determined without extensions)

for the first tax year in which you engaged in

the activity. However, if you received a written

notice that the IRS proposes to disallow

deductions attributable to an activity not

engaged in for profit (under Internal Revenue

Code section 183) and you want a

postponement of the determination, you must

file this form within 60 days after receiving the

notice. This 60-day period does not extend

the 3-year period referred to above.

If you and your spouse filed a joint return,

enter both your name and your spouse’s name

as they were shown on your tax return. Enter

the SSN that was shown first on your return as

your identifying number.

● From any other activity for each of 3 or

more of the tax years in the period of 5

consecutive tax years ending with the tax

year in question.

Who Should File

Individuals, estates, trusts, partnerships

(including limited liability companies or other

entities that are treated as partnerships for

Federal tax purposes), and S corporations

should use this form if they want to postpone

an IRS determination as to whether the

presumption applies that they are engaged in

an activity for profit. An election made by a

partnership or an S corporation is binding on

all persons who were partners or

shareholders at any time during the

presumption period.

Signature and Date

Where To File

Be sure to sign and date the form on the

appropriate line or lines. Keep a copy for your

records.

File this form with the Internal Revenue

Service Center where you are required to file

your return. Do not send it in with any other

return because that will delay processing the

election to postpone. However, if the IRS

notifies you about proposing to disallow

deductions for an activity not engaged in for

profit, file the form with the IRS office that

sent you the notification.

If you elect a postponement and file this

form on time, the IRS will generally postpone

the determination until after the end of the 4th

consecutive tax year (6th tax year for an

activity that consists mainly of breeding,

training, showing, or racing horses) after the

tax year in which you first engaged in the

activity. This period of 5 (or 7) tax years is

called the “presumption period.” The election

to postpone covers the entire presumption

period.

You are not required to provide the

information requested on a form that is

subject to the Paperwork Reduction Act

unless the form displays a valid OMB control

number. Books or records relating to a form

or its instructions must be retained as long as

their contents may become material in the

administration of any Internal Revenue law.

Generally, tax returns and return information

are confidential, as required by Code section

6103.

Privacy Act and Paperwork Reduction Act

Notice. We ask for the information on this

form to carry out the Internal Revenue laws of

the United States. We need this information

to determine your eligibility for making the

election to postpone determination as to

whether the presumption applies that an

activity is engaged in for profit. If you make

this election, you are required by Internal

Revenue Code section 183 to provide the

information requested on this form. Under

section 6109, you must disclose your SSN,

individual taxpayer identification number

(ITIN), or EIN. Routine uses of this information

include giving it to the Department of Justice

for civil and criminal litigation, and to cities,

states, and the District of Columbia for use in

administering their tax laws. We may also

disclose this information to other countries

under a tax treaty, to federal and state

agencies to enforce federal nontax criminal

laws, or to federal law enforcement and

intelligence agencies to combat terrorism. If

you fail to provide this information in a timely

manner, or provide incomplete or false

information, you may be liable for interest and

penalties.

For information on the limits on deductions

in not-for-profit activities, see Pub. 535,

Business Expenses.

in which you engaged in the activity. If you

are an individual, your identifying number is

your social security number (SSN). If you are

other than an individual, your identifying

number is your employer identification

number (EIN).