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2022 Schedule OR-FIA-40 Instructions
Page 1 of 4, 150-101-160-1 Oregon Department of Revenue
(Rev. 08-25-22)

Oregon Farm Income Averaging for Full-year Residents

General information • Merely buying or reselling plants or animals grown or
raised by someone else.
Purpose. You may elect to figure your 2022 tax by averaging,
over the previous three years (base years), all or part of your
Elected farm income
2022 taxable farm income.
Your elected farm income is the amount of your taxable income
Use Schedule OR-FIA-40 to calculate your Oregon farm
from farming that you elect to include on Schedule OR-FIA-40,
average income in an effort to reduce your personal income
line 2. This is the amount from a farming business on federal
tax if you are a full-year resident.
Schedule J, line 2a, if you elect to use farm income averaging
You will need copies of your original or amended Oregon for federal. Don’t enter more than the amount on Schedule OR-
income tax returns for tax years 2019, 2020, and 2021. If your FIA-40, line 1. While federal law allows averaging of fishing business
return was adjusted, use the taxable income and tax from income, Oregon law doesn’t. Don’t include fishing business income
the adjustment. You can obtain copies of prior years’ returns on Schedule OR-FIA-40, line 2.
for a small fee by going to www.oregon.gov/dor and log-
To figure elected farm income, first figure your taxable
ging in to Revenue Online, or by requesting copies by mail. income from farming. Taxable income from farming includes
You can also request a return transcript for free by sending a all income, gains, losses, and deductions attributable to any
message in Revenue Online or by calling us directly. You will farming business. Gains and losses from the sale or other
also need tax instruction booklets for those years. You can disposition of property (other than land) must be from prop-
download instructions from our website, or you can contact erty regularly used for a substantial period of time in your
us to request them. farming business. However, it doesn’t include gain from the
If you filed an Oregon part-year or nonresident return in any of sale or other disposition of land. You don’t have to include
the three base years, you will need Schedule OR-FIA-COMP to all of your taxable income from farming on Schedule OR-
complete Schedule OR-FIA-40. If any of the three base years are FIA-40, line 2.
part-year or nonresident returns, ignore the computation of tax Your elected farm income can’t exceed your Oregon tax-
for the applicable year on Schedule OR-FIA-40 and complete able income. Also, the portion of your elected farm income
Schedule OR-FIA-COMP. Fill in the computed tax from Sched- treated as a net capital gain can’t exceed the smaller of your
ule OR-FIA-COMP on Schedule OR-FIA-40, lines 8, 12, and 16. total net capital gain or your net capital gain attributable to
Farm income averaging can’t be used with the qualified your farming business. If your elected farm income includes
business income reduced tax rate under Oregon Revised net capital gain, you must allocate an equal portion of the
Statutes (ORS) 316.043. net capital gain to each of the base years.
If you had a capital loss, for any base year, that resulted in a
Farming business capital loss carryover to the next tax year, don’t reduce the
elected farm income allocated to that base year by any part
A farming business is the trade or business of cultivating
of the carryover.
land or raising or harvesting any agricultural or horticultural
commodity. This includes:
Line instructions
• Operating a nursery or sod farm.
• Raising or harvesting of trees bearing fruits, nuts, or other Line 5, 2019 taxable income. If you used FIA to figure your
crops. tax for 2021, enter on line 5 the amount from your 2021
• Raising ornamental trees (but not evergreen trees that are Schedule OR-FIA-40, line 11. If you used Schedule OR-FIA-
more than six years old when severed from the roots). COMP to figure your tax for 2021 on Schedule OR-FIA-40,
• Raising, shearing, feeding, caring for, training, and manag- OR-FIA-40-N, or OR-FIA-40-P, enter on line 5 the amount
ing animals. from your 2021 Schedule OR-FIA-COMP, Computation for
Tax year 2019. If you used Computation A, use the amount
• Leasing land to a tenant engaged in a farming business,
on line 9. If you used Computation B, use the amount on
but only if the lease payments are based on a share of the
line 6. If you used Computation C, use the amount on line 3.
tenant’s farm production (not a fixed amount).
• Wages and other compensation you received as a share- If you used FIA to figure your tax for 2020 but not 2021, enter
holder in an S corporation engaged in a farming business. on line 5 the amount from your 2020 Schedule OR-FIA-40,
line 15. If you used Schedule OR-FIA-COMP to figure
A farming business doesn’t include:
your tax for 2020 on Schedule OR-FIA-40, OR-FIA-40-N,
• Contract harvesting of an agricultural or horticultural or OR-FIA-40-P, enter on line 5 the amount from your 2020
commodity grown or raised by someone else; or Schedule OR-FIA-COMP, computation for tax year 2019. If

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you used Computation A, use the amount on line 9. If you income from his 2021 Schedule OR-FIA-40, line 15 is $17,250.
used Computation B, use the amount on line 6. If you used For 2021, Kevin’s recomputed tax after removing his elected
Computation C, use the amount on line 3. farm income is $178 from 2021 Schedule OR-FIA-40, line 4.
If you used FIA to figure your tax for 2019 but didn’t for 2020 For tax year 2022, Kevin’s Oregon taxable income is $27,900.
or 2021, enter on line 5 the amount from your 2019 Schedule On line 2, Kevin enters his elected farm income of $24,000.
OR-FIA-40, line 3; OR-FIA-40-N, line 8; or OR-FIA-40-P, line 6. He subtracts line 2 from line 1 and enters $3,900 on line 3.
This is his remaining Oregon taxable income. He calculates
If your 2019 taxable income was 0 or less, use the worksheet
his 2022 Oregon tax using the tax tables under married filing
at the end of these instructions to figure the amount to enter
joint status and enters $188 on line 4.
on OR-FIA-40, line 5.
NOL means net operating loss and applies to the year of the For 2019, Kevin enters $4,112 from his 2021 Schedule OR-
actual loss. NOLD means net operating loss deduction and FIA-40, line 11, on his 2022 Schedule OR-FIA-40, line 5. He
applies to the year to which the NOL is carried. divides his elected farm income of $24,000 by 3 and enters
$8,000 on his 2022 Schedule OR-FIA-40, line 6. He adds lines
Line 9, 2020 taxable income. If you used FIA to figure your 5 and 6 and enters $12,112 on line 7. This is his recomputed
tax for 2021, enter on line 9 the amount from your 2021 2019 Oregon taxable income. He calculates his 2019 Oregon
Schedule OR-FIA-40, line 15. If you used Schedule OR-FIA- tax using the 2019 tax tables under married filing joint status
COMP to figure your tax for 2021 on Schedule OR-FIA-40, and enters $709 on line 8.
OR-FIA-40-N, or OR-FIA-40-P, enter on line 9 the amount
from your 2021 Schedule OR-FIA-COMP, Computation for For 2020, Kevin enters $17,250 from his 2021 Schedule OR-
Tax Year 2020. If you used Computation A, use the amount FIA-40, line 15, on his 2022 Schedule OR-FIA-40, line 9. He
on line 9. If you used Computation B, use the amount on enters $8,000 from his 2022 Schedule OR-FIA-40, line 6, on
line 6. If you used Computation C, use the amount on line 3. his 2022 Schedule OR-FIA-40, line 10. He adds lines 9 and
10 and enters $25,250 on line 11. This is his recomputed 2020
If you used FIA to figure your tax for 2020 but not for 2021, Oregon taxable income. He calculates his 2020 Oregon tax
enter on line 9 the amount from your 2020 Schedule OR- using the 2020 tax tables under married filing joint status
FIA-40, line 3; OR-FIA-40-N, line 8; or OR-FIA-40-P, line 6. and enters $1,704 on line 12.
If your 2020 taxable income was 0 or less, use the worksheet For 2021, Kevin enters $3,777 from his 2021 Schedule OR-
at the end of these instructions to figure the amount to enter FIA-40, line 3, on his 2022 Schedule OR-FIA-40, line 13. He
on Schedule OR-FIA-40, line 9. enters $8,000 from his 2022 Schedule OR-FIA-40, line 6, on
Line 13, 2021 taxable income. If you used FIA to figure his 2022 Schedule OR-FIA-40, line 14. He adds lines 13 and
your tax for 2021, enter on line 13 the amount from your 14 and enters $11,777 on line 15. This is his recomputed 2021
2021 Schedule OR-FIA-40, line 3; OR-FIA-40-N, line 8; or Oregon taxable income. He calculates his 2021 Oregon tax
OR-FIA-40-P, line 6. using the 2021 tax tables under married filing joint status
and enters $647 on line 16.
If your 2021 taxable income was 0 or less, use the worksheet
at the end of these instructions to figure the amount to enter On his 2022 Schedule OR-FIA-40, he adds lines 4, 8, 12, and
on Schedule OR-FIA-40, line 13. 16 and enters $3,248 on line 17. He enters his recomputed
2019 tax of $208 from 2021 Schedule OR-FIA-40, line 12,
Example 1. Kevin didn’t income-average for tax year 2019 on his 2022 Schedule OR-FIA-40, line 18. Kevin enters his
or 2020 but he did so for tax year 2021 and he wants to do recomputed 2020 tax of $1,020 from 2021 Schedule OR-
the same for tax year 2022. For tax years 2019, 2020, and 2021 FIA-40, line 16, on his 2022 Schedule OR-FIA-40, line 19. He
Kevin filed joint returns. His filing status for tax year 2022 is enters his recomputed 2021 tax of $178 from 2021 Schedule
also married filing jointly. For tax year 2019, Kevin’s taxable OR-FIA-40, line 4, on his 2022 Schedule OR-FIA-40, line 20.
income from Form OR-40, line 19 is $1,112. For tax year 2020, He adds lines 18, 19, and 20 and enters $1,406 on line 21.
Kevin’s taxable income from Form OR-40, line 19 is $14,250. This is the recomputed tax he paid for the 2019, 2020, and
For tax year 2021, Kevin’s taxable income from Form OR-40, 2021 tax years.
line 19 is $12,777. For tax year 2022, Kevin’s taxable income
from Form OR-40, line 19 is $27,900 and his elected farm Kevin subtracts the recomputed tax of $1,406 on line 21 from
income is $24,000. For the tax years above, he has no NOLs, the recomputed tax of $3,248 on line 17 and enters the result of
no NOLD carryforwards or carrybacks, and no capital losses. $1,842 on line 22. He figures his tax on $27,900 using the 2022
tax tables and enters $1,918 on line 23. Because the FIA tax is
For 2021, Kevin had $12,777 of taxable income and elected
less than the tax tables, he will enter $1,842 on line 24. This
$9,000 to do farm income average, leaving $3,777 of Oregon
is Kevin’s 2022 tax liability from farm income averaging. He
taxable income on his 2021 Schedule OR-FIA-40, line 3.
enters this figure on his 2022 Form OR-40, line 20, and checks
For 2019, Kevin’s recomputed taxable income after adding
box 20a.
one-third of elected farm income from his 2021 Schedule
OR-FIA-40, line 11 is $4,112. For 2020, Kevin’s recomputed Example 2. John didn’t use farm income averaging for 2019,
taxable income after adding one-third of his elected farm 2020, or 2021. For tax year 2022, John has elected farm income
Page 2 of 4, 150-101-160-1
(Rev. 08-25-22) 2022 Schedule OR-FIA-40 instructions

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on Schedule OR-FIA-40, line 2 of $18,000. His Oregon taxable For tax year 2021, John’s taxable income from Form OR-40,
income shown on his 2019 Form OR-40, line 19, is $6,150. line 19 is negative $1,750. This amount includes an NOLD
of $2,300 which was the portion of the 2020 NOL that was
John had an NOL for tax year 2020 of $22,950, which he
remaining to be carried forward from tax year 2019. John
elected to carry back two years. Of the $22,950 loss, $9,000
doesn’t have an NOL for tax year 2021. John enters negative
was carried back to tax year 2019. To complete line 1 of the
$1,750 on the 2021 worksheet, line 9.
2019 worksheet, John combines the $9,000 NOLD with his
2019 Oregon taxable income of $6,150 from Form OR-40, John had a $3,000 net capital loss deduction on Schedule
line 19. The result, a negative $2,850, is entered on the 2019 D, line 21, a $7,000 loss on Schedule D, line 16, and a $5,000
worksheet, line 1. capital loss carryover to 2021 (his 2020 capital loss carryover
to 2021 was $5,000, not $4,000, because his federal taxable
When John filed his 2019 tax return, he had a $3,000 net
income before exemptions was a negative $1,000). John adds
capital loss deduction on federal Schedule D, line 21, a $7,000
the $3,000 from Schedule D, line 21, and the $5,000 carryover.
loss on federal Schedule D, line 16, and a $4,000 capital loss
He reduces the result by the $7,000 loss on his Schedule D,
carryover to 2020. However, when John carried back the 2020
line 16, and enters $1,000 on the 2021 worksheet, line 10.
NOL to 2019, he refigured his 2019 capital loss carryover to
tax year 2020 as $7,000. To calculate line 2 of the 2019 work- John enters 0 on line 11 of the worksheet because he doesn’t
sheet, John adds the $3,000 from federal Schedule D, line have an NOL for 2021 and didn’t have any remaining NOLD
21, and the $7,000 carryover. He subtracts from the result to carryforward. John’s $2,300 NOLD for 2021 was reduced
the $7,000 loss on his federal Schedule D, line 16, and enters to 0 because it didn’t exceed his federal AGI as modified for
$3,000 on the 2019 worksheet, line 2. the capital loss deduction, the net operating loss, and the
standard or recomputed itemized deductions. John adds
John had $6,150 of Oregon taxable income in 2019 that
lines 9, 10, and 11 (< $1,750 > + $1,000 + $0), and enters the
reduced the 2020 NOL carryback. The $3,000 net capital loss
result, negative $750, on line 12 of the worksheet and on 2022
deduction also reduced the amount of the 2020 NOL carry-
Schedule OR-FIA-40, line 13. This figure represents John’s
back. Since these two figures together total $9,150, there is
recomputed Oregon taxable income for tax year 2021.
no NOLD left to carry over to tax year 2021. Therefore, John
enters 0 on line 3. John adds line 1, a negative $2,850, line
2, a positive $3,000, and line 3. He enters the result, a posi- Forms and additional resources
tive $150, on line 4 of the worksheet and on 2022 Schedule Visit our website at www.oregon.gov/dor/forms, to
OR-FIA-40, line 5. This figure represents John’s recomputed download:
Oregon taxable income for tax year 2019.
• Current forms, instructions, and publications.
For tax year 2020, John’s taxable income from Form OR-40, • Prior year forms and instructions.
line 21 is negative $30,250, which he enters on the 2020
worksheet, line 5. Access Oregon tax forms and instructions on our website
anytime, or contact us to order them.
John had a $3,000 net capital loss deduction on Schedule D,
line 21 and a $7,000 loss on Schedule D, line 16, the carryover Do you have questions or need help?
from 2019 to 2020. John adds the $3,000 from Schedule D,
line 21, and the $7,000 carryover. He subtracts from the result www.oregon.gov/dor
the $7,000 loss on Schedule D, line 16, and enters $3,000 on 503-378-4988 or 800-356-4222
line 6 of the worksheet. John enters $22,950 on line 7 of the questions.dor @ dor.oregon.gov
worksheet, his 2020 NOL. Contact us for ADA accommodations or assistance in other
John adds lines 5, 6, and 7 (< $30,250 > + $3,000 + $22,950) languages.
and enters the result, negative $4,300, on line 8 of the work-
sheet and on 2022 Schedule OR-FIA-40, line 9. This figure
represents John’s recomputed Oregon taxable income for
tax year 2020.

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(Rev. 08-25-22) 2022 Schedule OR-FIA-40 instructions

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2019 taxable income worksheet 7. If you had an NOL for 2020,
enter it as a positive amount
1. Figure the taxable income from here. Otherwise, enter the
your 2019 tax return without portion (if any) of the NOLD
limiting it to 0. Include any carryovers and carrybacks to
NOLD carryovers or carrybacks 2020 that were not used in 2020
if you didn’t have an NOL in and were carried to tax years
2019. Don’t include any NOLD after 2020 as a positive
carryover or carryback from amount here ........................................... 7. ___________
other years if you had an NOL
in 2019. Enter the result here ............... 1. ___________ 8. Add lines 5, 6, and 7. Enter the result
here and on OR-FIA-40, line 9 ............. 8. ___________
2. If there is a loss on your 2019
federal Schedule D, line 21, add 2021 taxable income worksheet
that loss (as a positive amount)
and your 2019 capital loss carryover 9. Figure the taxable income from
to 2020. Subtract from that sum your 2021 tax return without
the amount of the loss on your limiting it to 0. Include any
2019 federal Schedule D, line 16. NOLD carryovers or carrybacks
Enter the result here .............................. 2. ___________ if you didn’t have an NOL in 2021.
Don’t include any NOLD carryover
3. If you had an NOL for 2019,
or carryback from other
enter it as a positive amount here.
years if you had an NOL in 2021.
Otherwise, enter the portion
Enter the result here .............................. 9. ___________
(if any) of the NOLD carryovers
and carrybacks to 2019 that were 10. If there is a loss on your 2021
not used in 2019 and were carried federal Schedule D, line 21,
to tax years after 2019 as a add that loss (as a positive
positive amount here ............................ 3. ___________ amount) and your 2021 capital
loss carryover to tax year 2022.
4. Add lines 1, 2, and 3.
Subtract from that sum the
Enter the result here, and
amount of the loss on your
on OR-FIA-40, line 5 ............................. 4. ___________
2021 federal Schedule D,
2020 taxable income worksheet line 16. Enter the result here ................ 10. __________
11. If you had an NOL for 2021,
5. Figure the taxable income from enter it as a positive amount
your 2020 tax return without here. Otherwise, enter the portion
limiting it to 0. Include any (if any) of the NOLD carryovers
NOLD carryovers or carrybacks and carrybacks to 2021 that were
if you didn’t have an NOL in 2020. not used in 2021 and were carried
Don’t include any NOLD carryover to tax years after 2021 as a positive
or carryback from other years amount here ........................................... 11. __________
if you had an NOL in 2020.
Enter the result here .............................. 5. ___________ 12. Add lines 9, 10, and 11.
Enter the result here and on
6. If there is a loss on your 2020 OR-FIA-40, line 13 ................................. 12. __________
federal Schedule D, line 21, add
that loss (as a positive amount)
and your 2020 capital loss carryover
to 2021. Subtract from that
sum the amount of the loss on
your 2020 federal Schedule D,
line 16. Enter the result here ................ 6. ___________

Page 4 of 4, 150-101-160-1
(Rev. 08-25-22) 2022 Schedule OR-FIA-40 instructions

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