2022 Schedule OR-FIA-40-P Instructions
Page 1 of 1, 150-101-166-1 Oregon Department of Revenue
(Rev. 08-23-22)

Oregon Farm Income Averaging for Part-year Residents

General information                                             Schedule OR-FIA-40-P, line 1. While federal law allows averag-
                                                                ing of fishing business income, Oregon law doesn’t. Don’t include 
Purpose. You may elect to figure your 2022 tax by averaging, 
over the previous three years (base years), all or part of your fishing business income on Schedule OR-FIA-40-P, line 2.

2022 taxable farm income.                                       To figure elected farm income, first figure your taxable 
Use Schedule OR-FIA-40-P to calculate your average Oregon       income from farming. Taxable income from farming includes 
farm income, if you are a part-year resident.                   all income, gains, losses, and deductions attributable to any 
You will need copies of your original or amended Oregon         farming business. Gains and losses from the sale or other 
income tax returns for tax years 2019, 2020, and 2021 to fig-   disposition of property (other than land) must be from prop-
ure your tax on Schedule OR-FIA-40-P. If your return was        erty regularly used for a substantial period of time in your 
adjusted, use the taxable income and tax from the adjust-       farming business. However, it doesn’t include gain from the 
ment. You can obtain copies of prior years’ returns for a 
                                                                sale or other disposition of land. Oregon source farm income 
small fee by going to  www.oregon.gov/dor and logging in 
to Revenue Online, or by requesting copies by mail. You can     includes income or loss received from an Oregon farm while 
also request a return transcript for free by sending a message  you were a nonresident and farm income or loss received 
in Revenue Online or by calling us directly. You will also need during any portion of the year you were an Oregon resident.
tax instruction booklets for those years along with Schedule 
                                                                You don’t have to include all of your taxable income from 
OR-FIA-COMP and instructions, which you can download 
from our website, or you can contact us to request them.        farming on Schedule OR-FIA-40-P, line 2.

Farm income averaging can’t be used with the qualified          Your elected farm income can’t exceed your Oregon tax-
business income reduced tax rate under Oregon Revised           able income. Also, the portion of your elected farm income 
Statute (ORS) 316.043.                                          treated as a net capital gain can’t exceed the smaller of your 
                                                                total net capital gain or your net capital gain attributable to 
Farming business                                                your farming business. If your elected farm income includes 
A farming business is the trade or business of cultivating      net capital gain, you must allocate an equal portion of the 
land or raising or harvesting any agricultural or horticultural net capital gain to each of the base years.
commodity. This includes:
                                                                If you had a capital loss, for any base year, that resulted in a 
• Operating a nursery or sod farm.
                                                                capital loss carryover to the next tax year, don’t reduce the 
• Raising or harvesting trees bearing fruits, nuts, or other 
crops.                                                          elected farm income allocated to that base year by any part 
• Raising ornamental trees (but not evergreen trees that are    of the carryover.
more than six years old when severed from the roots).
• Raising, shearing, feeding, caring for, training, and manag-  Forms and additional resources
ing animals.
• Leasing land to a tenant engaged in a farming business,       Visit our website at  www.oregon.gov/dor/forms, to 
but only if the lease payments are based on a share of the      download:
tenant’s farm production (not a fixed amount).
                                                                • Current forms, instructions, and publications.
• Wages and other compensation you received as a share-
holder in an S corporation engaged in a farming business.       • Prior year forms and instructions.

A farming business doesn’t include:                             Access Oregon tax forms and instructions on our website 
                                                                anytime, or contact us to order them.
• Contract harvesting of an agricultural or horticultural 
commodity grown or raised by someone else; or
• Merely buying or reselling plants or animals grown or         Do you have questions or need help?
raised by someone else.
                                                                  www.oregon.gov/dor
                                                                503-378-4988 or 800-356-4222
Elected farm income
                                                                questions.dor@dor.oregon.gov
Your elected farm income is the amount of your taxable 
income from farming that you elect to include on Schedule       Contact us for ADA accommodations or assistance in other 
OR-FIA-40-P, line 2. Don’t enter more than the amount on        languages.