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2005 Tax Preparation

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2005 Tax Preparation

2005 tax preparation Publication 584SP - Main Content Table of Contents Cómo Utilizar Este Registro PérdidasCosto u otra base. 2005 tax preparation Valor justo de mercado. 2005 tax preparation Excepción en el caso de propiedad inmueble de uso personal. 2005 tax preparation Más información. 2005 tax preparation Para pedir formularios y publicaciones. 2005 tax preparation Preguntas sobre los impuestos. 2005 tax preparation Cómo Obtener Ayuda con los ImpuestosTalleres para Contribuyentes de Ingresos Bajos (LITC por sus siglas en inglés). 2005 tax preparation Cómo Utilizar Este Registro Puede utilizar este registro siguiendo estos cinco pasos. 2005 tax preparation Lea la Publicación 547(SP) para saber más sobre las leyes tributarias relacionadas con hechos fortuitos, desastres y robos. 2005 tax preparation Familiarícese con las definiciones de costo u otra base y valor justo de mercado, las cuales se explican más adelante. 2005 tax preparation Llene los Anexos 1 al 20. 2005 tax preparation Lea las instrucciones del Formulario 4684, en inglés. 2005 tax preparation Llene el Formulario 4684, en inglés, utilizando la información que usted escribió en los Anexos 1 al 20. 2005 tax preparation Utilice la tabla que se encuentra a continuación para saber cómo hacer uso de los Anexos 1 al 19 a fin de llenar el Formulario 4684, en inglés. 2005 tax preparation Utilice lo que se halla en la. 2005 tax preparation . 2005 tax preparation . 2005 tax preparation Y anótelo en el Formulario 4684. 2005 tax preparation . 2005 tax preparation . 2005 tax preparation Columna 1 Línea 1 Columna 2 Línea 2 Columna 3 Línea 3 Columna 4 Línea 4 Columna 5 Línea 5 Columna 6 Línea 6 Columna 7 Línea 7 Columna 8 Línea 8 Columna 9 Línea 9 Pérdidas Generalmente, tiene el derecho de deducir en su declaración de impuesto federal las pérdidas sufridas en su domicilio, sus enseres domésticos y vehículos motorizados. 2005 tax preparation Sin embargo, no puede deducir una pérdida por hecho fortuito o robo que esté cubierta por seguro a menos que haya presentado oportunamente una reclamación de reembolso al seguro. 2005 tax preparation Todo reembolso que usted reciba reducirá la cantidad de la pérdida. 2005 tax preparation Si no presentó una reclamación de reembolso al seguro, puede deducir únicamente la porción de la pérdida que no haya sido protegida por dicho seguro. 2005 tax preparation Cantidad de la pérdida. 2005 tax preparation   Calcule la cantidad de su pérdida de la siguiente forma: Determine su costo u otra base en la propiedad antes del hecho fortuito o robo. 2005 tax preparation Determine la disminución en el valor justo de mercado de la propiedad como resultado del hecho fortuito o robo. 2005 tax preparation (La disminución del valor justo de mercado es la diferencia entre el valor de la propiedad inmediatamente antes e inmediatamente después del hecho fortuito o robo). 2005 tax preparation De la cantidad menor de los puntos anteriores (1) y (2), reste todo reembolso del seguro o de otra fuente que usted haya recibido o espere recibir. 2005 tax preparation   Aplique los límites a la deducción, explicados más adelante, para determinar la cantidad de su pérdida deducible. 2005 tax preparation Costo u otra base. 2005 tax preparation   El costo u otra base significa generalmente el costo original más toda mejora realizada a la propiedad. 2005 tax preparation Si no adquirió la propiedad por medio de una compra, su base se determina según se explica en la Publicación 551, Basis of Assets (Base de los Bienes), en inglés. 2005 tax preparation Si usted heredó propiedad de alguien que falleció en 2010 y el albacea del caudal hereditario eligió presentar el Formulario 8939, favor de referirse a la información proporcionada por el albacea, o vea la Publicación 4895, Tax Treatment of Property Acquired from a Decedent Dying in 2010 (Trato tributario de la propiedad adquirida de un difunto que falleció en 2010), en inglés. 2005 tax preparation Valor justo de mercado. 2005 tax preparation   El valor justo de mercado (FMV, por sus siglas en inglés) es el precio por el cual podría vender su propiedad a una persona dispuesta a comprarla, cuando ninguno de los dos tiene que vender o comprar y ambos están informados de todos los hechos pertinentes. 2005 tax preparation Al llenar los Anexos 1 al 20, se necesita saber el valor justo de mercado de la propiedad inmediatamente antes e inmediatamente después del desastre, hecho fortuito o robo. 2005 tax preparation Cálculos separados. 2005 tax preparation   Generalmente, si un solo hecho fortuito o robo involucra más de un artículo de propiedad, usted tiene que calcular la pérdida de cada artículo por separado. 2005 tax preparation Luego, sume las pérdidas para determinar la pérdida total de ese hecho fortuito o robo. 2005 tax preparation Excepción en el caso de propiedad inmueble de uso personal. 2005 tax preparation   Para calcular una pérdida de bienes inmuebles (bienes raíces) de uso personal, la propiedad entera (incluidas todas las mejoras como edificios, árboles y arbustos) se considera una unidad. 2005 tax preparation Calcule la pérdida utilizando la menor de las siguientes cantidades: La disminución en el valor justo de mercado de toda la propiedad. 2005 tax preparation La base ajustada de toda la propiedad. 2005 tax preparation Límites de la deducción. 2005 tax preparation   Después de calcular la cantidad de su pérdida según la explicación anterior, tiene que calcular qué cantidad de la pérdida puede deducir. 2005 tax preparation Esto se hace en la sección A del Formulario 4684, en inglés. 2005 tax preparation Si la pérdida fue de bienes de uso personal o de su familia, existen dos límites sobre la cantidad que puede deducir como pérdida por hecho fortuito o robo: Tiene que reducir cada pérdida por hecho fortuito o robo por $100 (la regla de $100). 2005 tax preparation Tiene que reducir además el total de todas sus pérdidas por 10% de su ingreso bruto ajustado (la regla del 10%). 2005 tax preparation Más información. 2005 tax preparation   Vea la Publicación 547(SP) para más información sobre los límites de esta deducción. 2005 tax preparation Cuándo su pérdida es deducible. 2005 tax preparation   Normalmente, puede deducir una pérdida por hecho fortuito, o aquélla sufrida en una zona de desastre, sólo en el año tributario en el que aconteció el hecho fortuito o desastre. 2005 tax preparation Normalmente puede deducir una pérdida por robo de propiedad sólo en el año en el que descubrió dicho robo. 2005 tax preparation No obstante, tiene la opción de deducir las pérdidas sufridas en una zona de desastre en la declaración del año inmediatamente antes del año del desastre si el Presidente de los Estados Unidos ha declarado dicha área como zona de desastre federal. 2005 tax preparation Para más información, vea el tema Pérdidas en Zonas de Desastre en la Publicación 547(SP). 2005 tax preparation Comentarios y sugerencias. 2005 tax preparation   Agradecemos sus comentarios acerca de esta publicación, así como sus sugerencias para ediciones futuras. 2005 tax preparation   Nos puede escribir a la dirección siguiente:  Internal Revenue Service Individual Forms and Publications Branch SE:W:CAR:MP:T:I 1111 Constitution Ave. 2005 tax preparation NW, IR-6526 Washington, DC 20224   Contestamos muchas cartas por teléfono. 2005 tax preparation Por lo tanto, sería útil que incluyera en la correspondencia su número de teléfono, con el código de área, para llamar durante el día. 2005 tax preparation   Nos puede enviar correspondencia electrónica (email) a la dirección electrónica taxforms@irs. 2005 tax preparation gov. 2005 tax preparation Escriba “Publications Comment” (Comentario sobre una Publicación) en la línea para asunto. 2005 tax preparation Usted también nos puede enviar comentarios desde la página web en www. 2005 tax preparation irs. 2005 tax preparation gov/formspubs, en inglés, seleccionando “Comment on Tax Forms and Publications” (Enviar comentarios sobre los formularios y publicaciones de impuestos), bajo la sección “Information About” (Información sobre). 2005 tax preparation Aunque no podemos contestar individualmente cada comentario, agradecemos sus comentarios y sugerencias y los tendremos en cuenta para ediciones futuras de nuestros productos tributarios. 2005 tax preparation Para pedir formularios y publicaciones. 2005 tax preparation   Visite www. 2005 tax preparation irs. 2005 tax preparation gov/formspubs para descargar formularios y publicaciones, llame al 1-800-829-3676 para pedir formulario y publicaciones o escriba a la dirección a continuación para recibir una respuesta dentro de los 10 días después de recibir su solicitud. 2005 tax preparation  Internal Revenue Service 1201 N. 2005 tax preparation Mitsubishi Motorway Bloomington, IL 61705-6613 Preguntas sobre los impuestos. 2005 tax preparation   Si tiene una pregunta sobre los impuestos, verifique la información disponible en IRS. 2005 tax preparation gov/espanol o llame al 1-800-829-1040. 2005 tax preparation No podemos contestar preguntas sobre impuestos enviadas a ninguna de las dos direcciones anteriores. 2005 tax preparation Cómo Obtener Ayuda con los Impuestos Puede obtener ayuda con asuntos relacionados con sus impuestos que no hayan sido aún resueltos, pedir gratuitamente publicaciones y formularios, hacer preguntas acerca de los impuestos, así como obtener más información del IRS de varias maneras. 2005 tax preparation Al seleccionar el método que le resulte mejor, usted tendrá acceso rápido y fácil a ayuda relacionada con los impuestos Ayuda gratuita con la preparación de la declaración de impuestos. 2005 tax preparation   Existe ayuda gratuita para la preparación de la declaración de impuestos en todo el país con voluntarios certificados por el IRS. 2005 tax preparation El programa Volunteer Income Tax Assistance (Programa de Ayuda Voluntaria a los Contribuyentes o VITA, por sus siglas en inglés) está diseñado para ayudar a los contribuyentes de recursos bajos a medianos y el programa Tax Counseling for the Elderly (Programa de Asesoramiento para las Personas de Edad Avanzada o TCE, por sus siglas en inglés) está diseñado para ayudar a los contribuyentes de 60 años de edad o más con su declaración de impuestos. 2005 tax preparation En la mayoría de estos locales usted puede presentar la declaración electrónicamente gratis y los voluntarios le informarán sobre los créditos y deducciones a los que quizás tenga derecho. 2005 tax preparation Para ubicar un local de ayuda VITA o TCE cerca de usted, visite IRS. 2005 tax preparation gov o llame al 1-800-906-9887 o 1-800-829-1040. 2005 tax preparation   Como parte del programa TCE, la Asociación Estadounidense de Personas Jubiladas (AARP, por sus siglas en inglés) ofrece el programa de asesoramiento AARP Tax-Aide (Programa de Ayuda Tributaria de la Asociación Estadounidense de Personas Jubiladas). 2005 tax preparation Para ubicar el sitio del programa AARP Tax-Aide más cercano, llame al 1-888-227-7669 o visite el sitio web de la AARP, www. 2005 tax preparation aarp. 2005 tax preparation org/money/taxaide. 2005 tax preparation   Para más información sobre estos programas, visite IRS. 2005 tax preparation gov e ingrese la palabra clave “VITA” en la esquina superior derecha. 2005 tax preparation Internet. 2005 tax preparation Puede tener acceso al sitio web del IRS, www. 2005 tax preparation irs. 2005 tax preparation gov/espanol las 24 horas del día, 7 días a la semana para: Revisar el estado de su reembolso para el año 2011. 2005 tax preparation Visite www. 2005 tax preparation irs. 2005 tax preparation gov/espanol y pulse sobre el enlace “¿Dónde Está mi Reembolso?” . 2005 tax preparation Asegúrese de esperar por lo menos 72 horas después de que el IRS acuse recibo de su declaración presentada por vía electrónica o 3 a 4 semanas después de enviar una declaración en papel. 2005 tax preparation Si presentó el Formulario 8379 junto con su declaración, espere 14 semanas (11 semanas si la presentó electrónicamente). 2005 tax preparation Tenga a mano su declaración de impuestos del año 2011 para poder facilitar su número de Seguro Social, su estado civil para efectos de la declaración y la cantidad exacta en dólares enteros de su reembolso. 2005 tax preparation Presentar la declaración por medio del sistema electrónico e-file. 2005 tax preparation Aprenda sobre programas comerciales para la preparación de la declaración y los servicios e-file gratuitos para los contribuyentes que cumplan los requisitos. 2005 tax preparation Descargar formularios, incluidos audioformularios, instrucciones y publicaciones. 2005 tax preparation Pedir productos del IRS a través de Internet. 2005 tax preparation Buscar información en Internet para aclarar sus preguntas acerca de impuestos. 2005 tax preparation Buscar publicaciones en Internet por tema o palabra clave. 2005 tax preparation Utilizar el Código o regulaciones de Impuestos Internos en Internet u otra información oficial. 2005 tax preparation Ver los Internal Revenue Bulletins (Boletines del IRS o IRB, por sus siglas en inglés) publicados en los últimos años. 2005 tax preparation Calcular los descuentos de la retención usando nuestra calculadora diseñada para este propósito en el sitio web www. 2005 tax preparation irs. 2005 tax preparation gov/espanol. 2005 tax preparation Saber si se tiene que presentar el Formulario 6251 utilizando el Alternative Minimum Tax (AMT) Assistant (Hoja de Cómputo Electrónica para Calcular el Impuesto Mínimo Alternativo), en inglés, disponible por Internet en www. 2005 tax preparation irs. 2005 tax preparation gov/individuals. 2005 tax preparation Suscribirse para recibir noticias sobre impuestos locales y nacionales por medio de correo electrónico. 2005 tax preparation Obtener información acerca de cómo abrir y administrar un pequeño negocio. 2005 tax preparation Teléfono. 2005 tax preparation Muchos servicios están disponibles por teléfono. 2005 tax preparation Cómo pedir formularios, instrucciones y publicaciones. 2005 tax preparation Llame al 1-800-829-3676 (servicio disponible en español) para pedir formularios, instrucciones y publicaciones de este año, así como de años anteriores. 2005 tax preparation Deberá recibir lo que ha pedido dentro de 10 días. 2005 tax preparation Cómo hacer preguntas relacionadas con los impuestos. 2005 tax preparation Llame al IRS para hacer preguntas al 1-800-829-1040. 2005 tax preparation Cómo resolver problemas. 2005 tax preparation Puede recibir ayuda en persona para resolver problemas tributarios en días laborables en los IRS Taxpayer Assistance Centers (Centros de Ayuda del IRS para Contribuyentes). 2005 tax preparation Un funcionario le puede explicar las cartas que le ha enviado el IRS, ayudarle a hacer solicitudes para ajustes a su cuenta o ayudarle a establecer un plan de pagos. 2005 tax preparation Llame al Centro de Ayuda del IRS para Contribuyentes local para pedir una cita. 2005 tax preparation Para obtener el número telefónico, visite el sitio web www. 2005 tax preparation irs. 2005 tax preparation gov/localcontacts, en inglés, o consulte la guía telefónica bajo United States Government, Internal Revenue Service (Gobierno de los Estados Unidos, Servicio de Impuestos Internos). 2005 tax preparation Equipo TTY/TDD. 2005 tax preparation Si tiene acceso a equipo TTY/TDD, llame al 1-800-829-4059 para hacer preguntas relacionadas con los impuestos o para pedir formularios y publicaciones. 2005 tax preparation Temas TeleTax. 2005 tax preparation Llame al 1-800-829-4477 y presione el 2 para escuchar mensajes grabados en español sobre varios temas relacionados con los impuestos. 2005 tax preparation Información sobre los reembolsos. 2005 tax preparation Usted puede averiguar el estado de su reembolso con la nueva aplicación para teléfonos celulares del IRS. 2005 tax preparation Descargue la aplicación IRS2Go gratis cuando visite la página Web de la tienda de aplicaciones de iTunes o la del Android Marketplace. 2005 tax preparation La aplicación IRS2Go es una manera nueva para nosotros proveerle información. 2005 tax preparation Para averiguar el estado de su reembolso por teléfono, llame al 1-800-829-4477 y presione el 2 para escuchar información automatizada en español, 24 horas al día, 7 días a la semana. 2005 tax preparation Asegúrese de esperar por lo menos 72 horas después de que el IRS acuse recibo de su declaración presentada por vía electrónica o 3 a 4 semanas después de enviar una declaración en papel. 2005 tax preparation Si presentó el Formulario 8379 junto con su declaración, espere 14 semanas (11 semanas si la presentó electrónicamente). 2005 tax preparation Tenga a mano su declaración de impuestos del año 2011 para poder facilitar su número de Seguro Social, su estado civil para efectos de la declaración y la cantidad exacta en dólares enteros de su reembolso. 2005 tax preparation Si comprueba el estado de su reembolso y no se le da una fecha de envío, espere a la siguiente semana para volver a comprobarlo. 2005 tax preparation Otra información relacionada con los reembolsos. 2005 tax preparation Para averiguar el estado del reembolso o de una declaración enmendada correspondiente a un año anterior, llame al 1-800-829-1040. 2005 tax preparation Cómo evaluar la calidad de nuestros servicios telefónicos. 2005 tax preparation Para asegurar que las respuestas que reciba de los funcionarios del IRS sean correctas, corteses y profesionales, evaluamos la calidad de nuestros servicios telefónicos de diversas maneras. 2005 tax preparation Una manera es que un segundo funcionario del IRS escuche o grabe las llamadas telefónicas en el momento en que éstas se llevan a cabo. 2005 tax preparation Otra manera es pedirles a algunas de las personas que llaman que contesten una breve encuesta al final de la llamada. 2005 tax preparation Visitas en persona. 2005 tax preparation Muchos productos y servicios están disponibles en varios lugares públicos. 2005 tax preparation Productos. 2005 tax preparation Puede visitar diversas oficinas de correos, bibliotecas y oficinas del IRS para obtener formularios, instrucciones y publicaciones. 2005 tax preparation Algunas oficinas del IRS, bibliotecas, supermercados, centros para hacer copias, oficinas de gobiernos municipales y de condados, cooperativas de crédito y tiendas de artículos de oficina tienen una colección de productos que se pueden imprimir de un CD o fotocopiar del documento original impreso. 2005 tax preparation Además, algunas oficinas del IRS así como algunas bibliotecas tienen el Código Tributario del IRS, reglamentaciones, Boletines del IRS y Boletines Cumulativos disponibles para la búsqueda de información. 2005 tax preparation Servicios. 2005 tax preparation Usted puede visitar su Taxpayer Assistance Center (Centro de Ayuda para el Contribuyente) local del IRS cada día laborable para recibir ayuda en persona con respecto a todo problema relacionado con los impuestos. 2005 tax preparation Un funcionario puede explicarle las cartas que le envía el IRS, le puede ayudar a hacer solicitudes para ajustar su cuenta o ayudarle a establecer un plan de pagos. 2005 tax preparation Si necesita resolver un problema relacionado con los impuestos, tiene preguntas sobre cómo las leyes tributarias son aplicables a su declaración de impuestos personal o se siente más a gusto hablando con alguien en persona, visite su Centro de Ayuda para el Contribuyente a nivel local donde podrá mostrar sus archivos y documentación y hablar con un funcionario del IRS en persona. 2005 tax preparation No se necesita cita, simplemente venga a hacer su consulta. 2005 tax preparation Pero si prefiere, puede llamar a su centro local y dejar un mensaje solicitando una cita para resolver un asunto relacionado con su cuenta tributaria. 2005 tax preparation Un funcionario le llamará dentro de 2 días laborables para hacer una cita en persona con usted. 2005 tax preparation Si le queda por resolver algún problema complicado relacionado con los impuestos o si tiene alguna necesidad especial, como una discapacidad, puede solicitar una cita. 2005 tax preparation Los demás asuntos se tramitan sin necesidad de hacer una cita. 2005 tax preparation Para obtener el número telefónico de la oficina local, visite el sitio web www. 2005 tax preparation irs. 2005 tax preparation gov/localcontacts o consulte la guía telefónica bajo United States Government, Internal Revenue Service (Gobierno de los Estados Unidos, Servicio de Impuestos Internos). 2005 tax preparation Correspondencia. 2005 tax preparation Puede solicitar formularios, instrucciones y publicaciones enviando una solicitud a la dirección indicada a continuación y le contestaremos dentro de un período de 10 días después de haber recibido su solicitud. 2005 tax preparation  Internal Revenue Service 1201 N. 2005 tax preparation Mitsubishi Motorway Bloomington, IL 61705–6613 Servicio del Defensor del Contribuyente. 2005 tax preparation   El Servicio del Defensor del Contribuyente (TAS por sus siglas en inglés), es su voz ante el IRS. 2005 tax preparation Nuestro deber es asegurar que a cada contribuyente se le trate de forma justa, y que usted conozca y entienda sus derechos. 2005 tax preparation Le ofrecemos ayuda gratuita para ayudarle a navegar el proceso, frecuentemente confuso, de resolver problemas tributarios que no ha podido resolver usted mismo. 2005 tax preparation Tenga presente que lo peor que se puede hacer es no hacer nada. 2005 tax preparation   El Servicio del Defensor del Contribuyente le puede ayudar si usted no puede resolver su problema con el IRS y además: Si su problema le causa problemas financieros a usted, su familia o su negocio. 2005 tax preparation Si usted (o su negocio) está enfrentando la amenaza de acción adversa inmediata. 2005 tax preparation Si usted ha intentado, vez tras vez, comunicarse con el IRS pero nadie le ha respondido, o si el IRS no le ha respondido antes de la fecha prometida. 2005 tax preparation   Si usted reúne los requisitos para recibir nuestra ayuda, haremos todo lo posible para resolverle su problema. 2005 tax preparation A usted se le asignará un defensor, quien estará a su lado en cada paso del camino. 2005 tax preparation Tenemos oficinas en cada estado, el Distrito de Columbia, y Puerto Rico. 2005 tax preparation Aunque TAS es una sección independiente dentro del IRS, nuestros defensores saben trabajar junto con el IRS para resolver sus provlemas. 2005 tax preparation ¡Y nuestros servicios son siempre gratuitos!   Como contribuyente, usted tiene derechos que el IRS tiene que respetar cuando trata con usted. 2005 tax preparation Nuestro kit de herramientas tributarias, disponible en www. 2005 tax preparation taxpayeradvocate. 2005 tax preparation irs. 2005 tax preparation gov/Home/Spanish le puede ayudar a entender estos derechos. 2005 tax preparation   Si usted cree que el TAS posiblemente le puede ayudar, llame al defensor local, cuyo número de teléfono se halla en el directorio del teléfono, y también en nuestra página Web, en www. 2005 tax preparation irs. 2005 tax preparation gov/advocate. 2005 tax preparation Usted también podría llamarnos gratis al 1-877-777-4778. 2005 tax preparation   El TAS se ocupa de resolver problemas de gran escala o problemas sistémicos que afectan a muchos contribuyentes. 2005 tax preparation Si usted conoce alguno de estos asuntos, favor de informarnos del mismo utilizando el Systemic Advocacy Management System (Sistema de administración de la defensa sistémica), en inglés, en el sitio www. 2005 tax preparation irs. 2005 tax preparation gov/advocate. 2005 tax preparation Talleres para Contribuyentes de Ingresos Bajos (LITC por sus siglas en inglés). 2005 tax preparation   Los Talleres para Contribuyentes de Ingresos Bajos (LITC) son independientes del IRS. 2005 tax preparation Algunos Talleres sirven a las personas cuyos ingresos estén por debajo de cierto nivel, y quienes necesitan resolver un problema tributaria. 2005 tax preparation Estos talleres proporcionan gratis, o por una cuota pequeña, representación profesional ante el IRS, en la corte durante auditorias, apelaciones, disputas de cobro de impuestos, y en otros asuntos. 2005 tax preparation Para esas personas que hablan inglés como segundo idioma, algunos Talleres pueden proveer información en muchos idiomas diferentes sobre los derechos y responsabilidades del contribuyente. 2005 tax preparation Para más información y para hallar un Taller cerca de usted, vea la página Web de los LITC en www. 2005 tax preparation irs. 2005 tax preparation gov/espanol/article/0,,id=219303,00. 2005 tax preparation html o en la Publicación 4134SP, Lista de Talleres para Contribuyentes de Bajos Ingresos. 2005 tax preparation Esta publicación también le está disponible en la oficina local del IRS o llamando al 1-800-829-3676. 2005 tax preparation Servicios Tributarios Gratuitos. 2005 tax preparation   La Publicación 910, IRS Guide to Free Tax Services, (Guía de servicios gratuitos del IRS, en inglés), es su guía para los servicios y recursos proporcionados por el IRS. 2005 tax preparation Con ella puede aprender más sobre la información tributaria que el IRS le proporciona gratis, inclusive publicaciones, servicios, y programas de educación y ayuda. 2005 tax preparation La publicación le brinda también una índice de más de 100 temas tributarios TeleTax (información tributaria grabada) que usted puede escuchar por teléfono. 2005 tax preparation La mayoría de la información y los servicios enumerados en esta publicación se le proporcionan sin costo a usted. 2005 tax preparation Si hay una cuota asociada con algún recurso o servicio, esta se indica en la publicación. 2005 tax preparation   Versiones accesibles de los productos publicadas por el IRS se la hacen disponibles a personas discapacitadas en varios formatos, si ellos las piden. 2005 tax preparation Discos DVD para productos tributarios. 2005 tax preparation Usted puede solicitar la Publicación 1796, IRS Tax Products DVD (DVD de productos tributarios del IRS), en inglés, y obtener: Formularios, instrucciones y publicaciones de impuestos del año en curso. 2005 tax preparation Formularios, instrucciones y publicaciones de impuestos de años anteriores. 2005 tax preparation Mapa Tributario: una herramienta de búsqueda electrónica y de ayuda. 2005 tax preparation Preguntas sobre leyes tributarias hechas con frecuencia. 2005 tax preparation Tax Topics (Temas Tributarios) del sistema telefónico de respuestas del IRS. 2005 tax preparation Código de Impuestos Internos —Título 26 del Código de los Estados Unidos. 2005 tax preparation Opciones para completar, imprimir y guardar la mayoría de los formularios de impuestos. 2005 tax preparation Internal Revenue Bulletins (Boletines del IRS). 2005 tax preparation Apoyo técnico telefónico gratuito y por correo electrónico. 2005 tax 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Fuel Tax Credit Extensions Frequently Asked Questions

American Taxpayer Relief Act of 2012 (Pub. L. 112-240)

The American Taxpayer Relief Act of 2012 (Pub. L. 112-240) retroactively extends certain fuel tax credits that expired on Dec. 31, 2011. The retroactively extended fuel tax credits are the biodiesel mixture credit, biodiesel credit, alternative fuel credit and alternative fuel mixture credit. These credits are now scheduled to expire on Dec. 31, 2013.

These Q&As tell taxpayers how to claim the credits for qualifying sales or uses during 2012. They also describe changes to the cellulosic biofuel credit for 2013. 

More information on qualification for the credits is on Form 720, Quarterly Federal Excise Tax Return; Form 720X, Amended Quarterly Federal Excise Tax Return; Form 4136, Credit for Federal Tax Paid on Fuels; Form 6478, Alcohol and Cellulosic Biofuel Fuels Credit; Form 8849, Claim for Refund of Excise Taxes; and Form 8864, Biodiesel and Renewable Diesel Fuels Credit.

Q1. How do I claim the biodiesel mixture (including renewable diesel mixture) credit for qualifying sales and uses during 2012? What is the deadline for filing a claim?

A1. Choose one of the following options to claim the credit:

OPTION 1: Follow the procedures in Notice 2013-26. These procedures allow all claims to be made on Form 8849 for all qualifying sales and uses in 2012. These claims must be made by July 1, 2013.

OPTION 2: If you do not make the claim by July 1, 2013, for sales and uses in 2012, follow the procedures below.

If you reported excise tax liability for gasoline, diesel fuel, or kerosene on Form 720 during any quarter of 2012, you must amend that Form 720 to claim a credit against those liabilities. The amount of this credit may not exceed the total amount of those liabilities.

    • To amend your Form 720, file Form 720X in accordance with the instructions to that form.
    • You may use a single Form 720X to amend multiple quarters, but state each quarter separately.
    • If your biodiesel mixture (including renewable diesel mixture) credit exceeds the amount that you claim on Form 720X, you may claim that excess as an income tax credit on your 2012 federal income tax return by attaching to the return Form 4136 in accordance with the instructions for that form.
    • Generally, you have three years from the due date of each Form 720 you filed during 2012 to claim the credit against your excise tax liability for a particular quarter. Generally, you have three years from the due date of your income tax return to claim the credit by attaching Form 4136 to an amended income tax return.

Q2. Do I need to submit Certificates for Biodiesel with my biodiesel mixture claims?

A2. Yes. See the instructions to Form 720, Form 8849, or Form 4136, as appropriate. If you did not receive certificates during 2012, the biodiesel producer may issue them to you now. However, the IRS cannot require biodiesel producers to issue a certificate.

Q3. How do I claim the biodiesel (including renewable diesel) credit for qualifying sales or uses during 2012? What is the deadline for filing a claim?

A3. You may claim the biodiesel (including renewable diesel) credit for qualifying sales or uses during 2012 as an income tax credit on your 2012 federal income tax return by attaching to the return Form 8864, in accordance with the instructions for that form. Generally, you have three years from the due date of your income tax return to claim the credit by attaching Form 8864 to an amended income tax return.

Q4. How do I claim the alternative fuel credit for qualifying sales or uses during 2012? What is the deadline for filing a claim?

A4. The term “alternative fuel” generally includes:

  • Liquefied petroleum gas.
  • P Series Fuels.
  • Compressed or liquefied natural gas.
  • Liquefied hydrogen.
  • Any liquid fuel which meets certain carbon recapture requirements and that is derived from coal (including peat) through the Fischer-Tropsch process.
  • Compressed or liquefied gas derived from biomass (as defined in section 45K(c)(3)).
  • Liquid fuel derived from biomass (as defined in section 45K(c)(3)).

Choose one of the following options to claim the credit:

OPTION 1: Follow the procedures in Notice 2013-26. These procedures allow all claims to be made on Form 8849 for all qualifying sales and uses in 2012. These claims must be made by July 1, 2013.

OPTION 2: If you do not make the claim by July 1, 2013, for sales and uses in 2012, follow the procedures below.

    • If you reported excise tax liability for alternative fuel on Form 720 during any quarter of 2012, you must amend that Form 720 to claim a credit against those liabilities. The amount of this credit may not exceed the total amount of those liabilities.
    • To amend your Form 720, file Form 720X in accordance with the instructions to that form.
    • You may use a single Form 720X to amend multiple quarters, but state each quarter separately.
    • If your alternative fuel credit exceeds the amount that you claim on Form 720X, you may claim the excess as an income tax credit on your 2012 federal income tax return by attaching to the return Form 4136 in accordance with the instructions for that form.
    • Generally, you have three years from the due date of each Form 720 you filed during 2012 to claim the credit against your excise tax liability for a particular quarter. Generally, you have three years from the due date of your income tax return to claim the credit by attaching Form 4136 to an amended income tax return.

Q5. How do I claim the alternative fuel mixture credit for qualifying sales or uses during 2012? What is the deadline for filing a claim?

A5. See below.

  • If you reported excise tax liability for gasoline, diesel fuel or kerosene on Form 720, during any quarter of 2012, you must amend that Form 720 to claim a credit against those liabilities. The amount of this credit may not exceed the amount of those liabilities.
  • To amend your Form 720, file Form 720X in accordance with the instructions to the form.
  • You may use a single Form 720X to amend multiple quarters, but state each quarter separately.
  • You may claim the alternative fuel mixture credit only up to the amount of your tax liabilities for gasoline, diesel fuel or kerosene.
  • You may not claim any excess alternative fuel mixture credit on your income tax return or receive a payment for that amount. 

Q6. Do I have to be registered by IRS to claim the biodiesel mixture credit (including renewable diesel mixture credit), biodiesel credit (including renewable diesel credit), alternative fuel credit or alternative fuel mixture credit?

A6. You must be registered by the IRS at the time you file your claims for the alternative fuel credit and the alternative fuel mixture credit.

If you are already registered with an AL (alternative fuel) or AM (alternative fuel mixture) activity letter, as appropriate, do not apply again for registration. 

However, if you are not already registered by the IRS with the appropriate activity letter, apply to the IRS for registration by filing Form 637, Application for Registration (For Certain Excise Tax Activities), in accordance with the instructions to Form 637. You are not registered with the IRS until you receive your letter of registration from the IRS.

Q7. How do I claim the cellulosic biofuel credit for qualifying sales or uses during 2012?

A7. You may claim the cellulosic biofuel credit for qualifying sales or uses during 2012 as an income tax credit on your 2012 federal income tax return by attaching Form 6478 to the return in accordance with the instructions for that form.

You must be registered by the IRS at the time you file your claim for the cellulosic biofuel credit.

If you are already registered with a CB (producers of cellulosic biofuel) activity letter, do not apply again for registration. However, if you are not already registered by the IRS with the CB activity letter, you may apply to the IRS for registration by filing Form 637, Application for Registration (For Certain Excise Tax Activities), in accordance with the instructions to Form 637. You are not registered with the IRS until you receive your letter of registration from the IRS.

Q8. What changes did the American Taxpayer Relief Act make to the cellulosic biofuel credit?

A8. Effective Jan. 3, 2013, the Act changed the designation of the credit to “second generation biofuel credit.” Also effective on Jan. 3, 2013, biofuels produced from algae, cyanobacteria, and lemna feedstocks are eligible for the credit. The second generation biofuel credit expires for fuel produced after Dec. 31, 2013.

Q9. If I am a second generation biofuel producer, do I need to be registered by the IRS to claim the credit?

A9. Yes, you must be registered by the IRS at the time you file your claims for second generation biofuel credit. Apply for activity letter “CB” using Form 637. If you are already registered by the IRS with a CB activity letter, do not apply again for registration.

Related Item: IRS Forms and Publications

Page Last Reviewed or Updated: 07-Mar-2014

The 2005 Tax Preparation

2005 tax preparation 7. 2005 tax preparation   Interest Income Table of Contents Reminder Introduction Useful Items - You may want to see: General InformationSSN for joint account. 2005 tax preparation Custodian account for your child. 2005 tax preparation Penalty for failure to supply SSN. 2005 tax preparation Reporting backup withholding. 2005 tax preparation Savings account with parent as trustee. 2005 tax preparation Interest not reported on Form 1099-INT. 2005 tax preparation Nominees. 2005 tax preparation Incorrect amount. 2005 tax preparation Information reporting requirement. 2005 tax preparation Taxable InterestInterest subject to penalty for early withdrawal. 2005 tax preparation Money borrowed to invest in certificate of deposit. 2005 tax preparation U. 2005 tax preparation S. 2005 tax preparation Savings Bonds Education Savings Bond Program U. 2005 tax preparation S. 2005 tax preparation Treasury Bills, Notes, and Bonds Bonds Sold Between Interest Dates Insurance State or Local Government Obligations Original Issue Discount (OID) When To Report Interest IncomeConstructive receipt. 2005 tax preparation How To Report Interest IncomeSchedule B (Form 1040A or 1040). 2005 tax preparation Reporting tax-exempt interest. 2005 tax preparation U. 2005 tax preparation S. 2005 tax preparation savings bond interest previously reported. 2005 tax preparation Reminder Foreign-source income. 2005 tax preparation  If you are a U. 2005 tax preparation S. 2005 tax preparation citizen with interest income from sources outside the United States (foreign income), you must report that income on your tax return unless it is exempt by U. 2005 tax preparation S. 2005 tax preparation law. 2005 tax preparation This is true whether you reside inside or outside the United States and whether or not you receive a Form 1099 from the foreign payer. 2005 tax preparation Introduction This chapter discusses the following topics. 2005 tax preparation Different types of interest income. 2005 tax preparation What interest is taxable and what interest is nontaxable. 2005 tax preparation When to report interest income. 2005 tax preparation How to report interest income on your tax return. 2005 tax preparation In general, any interest you receive or that is credited to your account and can be withdrawn is taxable income. 2005 tax preparation Exceptions to this rule are discussed later in this chapter. 2005 tax preparation You may be able to deduct expenses you have in earning this income on Schedule A (Form 1040) if you itemize your deductions. 2005 tax preparation See Money borrowed to invest in certificate of deposit , later, and chapter 28. 2005 tax preparation Useful Items - You may want to see: Publication 537 Installment Sales 550 Investment Income and Expenses 1212 Guide to Original Issue Discount (OID) Instruments Form (and Instructions) Schedule B (Form 1040A or 1040) Interest and Ordinary Dividends 8815 Exclusion of Interest From Series EE and I U. 2005 tax preparation S. 2005 tax preparation Savings Bonds Issued After 1989 8818 Optional Form To Record Redemption of Series EE and I U. 2005 tax preparation S. 2005 tax preparation Savings Bonds Issued After 1989 General Information A few items of general interest are covered here. 2005 tax preparation Recordkeeping. 2005 tax preparation You should keep a list showing sources and interest amounts received during the year. 2005 tax preparation Also, keep the forms you receive showing your interest income (Forms 1099-INT, for example) as an important part of your records. 2005 tax preparation Tax on unearned income of certain children. 2005 tax preparation    Part of a child's 2013 unearned income may be taxed at the parent's tax rate. 2005 tax preparation If so, Form 8615, Tax for Certain Children Who Have Unearned Income, must be completed and attached to the child's tax return. 2005 tax preparation If not, Form 8615 is not required and the child's income is taxed at his or her own tax rate. 2005 tax preparation   Some parents can choose to include the child's interest and dividends on the parent's return. 2005 tax preparation If you can, use Form 8814, Parents' Election To Report Child's Interest and Dividends, for this purpose. 2005 tax preparation   For more information about the tax on unearned income of children and the parents' election, see chapter 31. 2005 tax preparation Beneficiary of an estate or trust. 2005 tax preparation   Interest you receive as a beneficiary of an estate or trust is generally taxable income. 2005 tax preparation You should receive a Schedule K-1 (Form 1041), Beneficiary's Share of Income, Deductions, Credits, etc. 2005 tax preparation , from the fiduciary. 2005 tax preparation Your copy of Schedule K-1 (Form 1041) and its instructions will tell you where to report the income on your Form 1040. 2005 tax preparation Social security number (SSN). 2005 tax preparation   You must give your name and SSN or individual tax identification number (ITIN) to any person required by federal tax law to make a return, statement, or other document that relates to you. 2005 tax preparation This includes payers of interest. 2005 tax preparation If you do not give your SSN or ITIN to the payer of interest, you may have to pay a penalty. 2005 tax preparation SSN for joint account. 2005 tax preparation   If the funds in a joint account belong to one person, list that person's name first on the account and give that person's SSN to the payer. 2005 tax preparation (For information on who owns the funds in a joint account, see Joint accounts , later. 2005 tax preparation ) If the joint account contains combined funds, give the SSN of the person whose name is listed first on the account. 2005 tax preparation This is because only one name and SSN can be shown on Form 1099. 2005 tax preparation   These rules apply both to joint ownership by a married couple and to joint ownership by other individuals. 2005 tax preparation For example, if you open a joint savings account with your child using funds belonging to the child, list the child's name first on the account and give the child's SSN. 2005 tax preparation Custodian account for your child. 2005 tax preparation   If your child is the actual owner of an account that is recorded in your name as custodian for the child, give the child's SSN to the payer. 2005 tax preparation For example, you must give your child's SSN to the payer of interest on an account owned by your child, even though the interest is paid to you as custodian. 2005 tax preparation Penalty for failure to supply SSN. 2005 tax preparation   If you do not give your SSN to the payer of interest, you may have to pay a penalty. 2005 tax preparation See Failure to supply SSN under Penalties in chapter 1. 2005 tax preparation Backup withholding also may apply. 2005 tax preparation Backup withholding. 2005 tax preparation   Your interest income is generally not subject to regular withholding. 2005 tax preparation However, it may be subject to backup withholding to ensure that income tax is collected on the income. 2005 tax preparation Under backup withholding, the payer of interest must withhold, as income tax, on the amount you are paid, applying the appropriate withholding rate. 2005 tax preparation   Backup withholding may also be required if the IRS has determined that you underreported your interest or dividend income. 2005 tax preparation For more information, see Backup Withholding in chapter 4. 2005 tax preparation Reporting backup withholding. 2005 tax preparation   If backup withholding is deducted from your interest income, the payer must give you a Form 1099-INT for the year indicating the amount withheld. 2005 tax preparation The Form 1099-INT will show any backup withholding as “Federal income tax withheld. 2005 tax preparation ” Joint accounts. 2005 tax preparation   If two or more persons hold property (such as a savings account or bond) as joint tenants, tenants by the entirety, or tenants in common, each person's share of any interest from the property is determined by local law. 2005 tax preparation Income from property given to a child. 2005 tax preparation   Property you give as a parent to your child under the Model Gifts of Securities to Minors Act, the Uniform Gifts to Minors Act, or any similar law becomes the child's property. 2005 tax preparation   Income from the property is taxable to the child, except that any part used to satisfy a legal obligation to support the child is taxable to the parent or guardian having that legal obligation. 2005 tax preparation Savings account with parent as trustee. 2005 tax preparation   Interest income from a savings account opened for a minor child, but placed in the name and subject to the order of the parents as trustees, is taxable to the child if, under the law of the state in which the child resides, both of the following are true. 2005 tax preparation The savings account legally belongs to the child. 2005 tax preparation The parents are not legally permitted to use any of the funds to support the child. 2005 tax preparation Form 1099-INT. 2005 tax preparation   Interest income is generally reported to you on Form 1099-INT, or a similar statement, by banks, savings and loans, and other payers of interest. 2005 tax preparation This form shows you the interest you received during the year. 2005 tax preparation Keep this form for your records. 2005 tax preparation You do not have to attach it to your tax return. 2005 tax preparation   Report on your tax return the total interest income you receive for the tax year. 2005 tax preparation Interest not reported on Form 1099-INT. 2005 tax preparation   Even if you do not receive Form 1099-INT, you must still report all of your interest income. 2005 tax preparation For example, you may receive distributive shares of interest from partnerships or S corporations. 2005 tax preparation This interest is reported to you on Schedule K-1 (Form 1065), Partner's Share of Income, Deduction, Credits, etc. 2005 tax preparation , or Schedule K-1 (Form 1120S), Shareholder's Share of Income, Deductions, Credits, etc. 2005 tax preparation Nominees. 2005 tax preparation   Generally, if someone receives interest as a nominee for you, that person must give you a Form 1099-INT showing the interest received on your behalf. 2005 tax preparation   If you receive a Form 1099-INT that includes amounts belonging to another person, see the discussion on nominee distributions under How To Report Interest Income in chapter 1 of Publication 550, or Schedule B (Form 1040A or 1040) instructions. 2005 tax preparation Incorrect amount. 2005 tax preparation   If you receive a Form 1099-INT that shows an incorrect amount (or other incorrect information), you should ask the issuer for a corrected form. 2005 tax preparation The new Form 1099-INT you receive will be marked “Corrected. 2005 tax preparation ” Form 1099-OID. 2005 tax preparation   Reportable interest income also may be shown on Form 1099-OID, Original Issue Discount. 2005 tax preparation For more information about amounts shown on this form, see Original Issue Discount (OID) , later in this chapter. 2005 tax preparation Exempt-interest dividends. 2005 tax preparation   Exempt-interest dividends you receive from a mutual fund or other regulated investment company, including those received from a qualified fund of funds in any tax year beginning after December 22, 2010, are not included in your taxable income. 2005 tax preparation (However, see Information reporting requirement , next. 2005 tax preparation ) Exempt-interest dividends should be shown in box 10 of Form 1099-DIV. 2005 tax preparation You do not reduce your basis for distributions that are exempt-interest dividends. 2005 tax preparation Information reporting requirement. 2005 tax preparation   Although exempt-interest dividends are not taxable, you must show them on your tax return if you have to file. 2005 tax preparation This is an information reporting requirement and does not change the exempt-interest dividends into taxable income. 2005 tax preparation Note. 2005 tax preparation Exempt-interest dividends paid from specified private activity bonds may be subject to the alternative minimum tax. 2005 tax preparation See Alternative Minimum Tax (AMT) in chapter 30 for more information. 2005 tax preparation Chapter 1 of Publication 550 contains a discussion on private activity bonds under State or Local Government Obligations. 2005 tax preparation Interest on VA dividends. 2005 tax preparation   Interest on insurance dividends left on deposit with the Department of Veterans Affairs (VA) is not taxable. 2005 tax preparation This includes interest paid on dividends on converted United States Government Life Insurance and on National Service Life Insurance policies. 2005 tax preparation Individual retirement arrangements (IRAs). 2005 tax preparation   Interest on a Roth IRA generally is not taxable. 2005 tax preparation Interest on a traditional IRA is tax deferred. 2005 tax preparation You generally do not include it in your income until you make withdrawals from the IRA. 2005 tax preparation See chapter 17. 2005 tax preparation Taxable Interest Taxable interest includes interest you receive from bank accounts, loans you make to others, and other sources. 2005 tax preparation The following are some sources of taxable interest. 2005 tax preparation Dividends that are actually interest. 2005 tax preparation   Certain distributions commonly called dividends are actually interest. 2005 tax preparation You must report as interest so-called “dividends” on deposits or on share accounts in: Cooperative banks, Credit unions, Domestic building and loan associations, Domestic savings and loan associations, Federal savings and loan associations, and Mutual savings banks. 2005 tax preparation  The “dividends” will be shown as interest income on Form 1099-INT. 2005 tax preparation Money market funds. 2005 tax preparation   Money market funds pay dividends and are offered by nonbank financial institutions, such as mutual funds and stock brokerage houses. 2005 tax preparation Generally, amounts you receive from money market funds should be reported as dividends, not as interest. 2005 tax preparation Certificates of deposit and other deferred interest accounts. 2005 tax preparation   If you open any of these accounts, interest may be paid at fixed intervals of 1 year or less during the term of the account. 2005 tax preparation You generally must include this interest in your income when you actually receive it or are entitled to receive it without paying a substantial penalty. 2005 tax preparation The same is true for accounts that mature in 1 year or less and pay interest in a single payment at maturity. 2005 tax preparation If interest is deferred for more than 1 year, see Original Issue Discount (OID) , later. 2005 tax preparation Interest subject to penalty for early withdrawal. 2005 tax preparation   If you withdraw funds from a deferred interest account before maturity, you may have to pay a penalty. 2005 tax preparation You must report the total amount of interest paid or credited to your account during the year, without subtracting the penalty. 2005 tax preparation See Penalty on early withdrawal of savings in chapter 1 of Publication 550 for more information on how to report the interest and deduct the penalty. 2005 tax preparation Money borrowed to invest in certificate of deposit. 2005 tax preparation   The interest you pay on money borrowed from a bank or savings institution to meet the minimum deposit required for a certificate of deposit from the institution and the interest you earn on the certificate are two separate items. 2005 tax preparation You must report the total interest you earn on the certificate in your income. 2005 tax preparation If you itemize deductions, you can deduct the interest you pay as investment interest, up to the amount of your net investment income. 2005 tax preparation See Interest Expenses in chapter 3 of Publication 550. 2005 tax preparation Example. 2005 tax preparation You deposited $5,000 with a bank and borrowed $5,000 from the bank to make up the $10,000 minimum deposit required to buy a 6-month certificate of deposit. 2005 tax preparation The certificate earned $575 at maturity in 2013, but you received only $265, which represented the $575 you earned minus $310 interest charged on your $5,000 loan. 2005 tax preparation The bank gives you a Form 1099-INT for 2013 showing the $575 interest you earned. 2005 tax preparation The bank also gives you a statement showing that you paid $310 interest for 2013. 2005 tax preparation You must include the $575 in your income. 2005 tax preparation If you itemize your deductions on Schedule A (Form 1040), you can deduct $310, subject to the net investment income limit. 2005 tax preparation Gift for opening account. 2005 tax preparation   If you receive noncash gifts or services for making deposits or for opening an account in a savings institution, you may have to report the value as interest. 2005 tax preparation   For deposits of less than $5,000, gifts or services valued at more than $10 must be reported as interest. 2005 tax preparation For deposits of $5,000 or more, gifts or services valued at more than $20 must be reported as interest. 2005 tax preparation The value is determined by the cost to the financial institution. 2005 tax preparation Example. 2005 tax preparation You open a savings account at your local bank and deposit $800. 2005 tax preparation The account earns $20 interest. 2005 tax preparation You also receive a $15 calculator. 2005 tax preparation If no other interest is credited to your account during the year, the Form 1099-INT you receive will show $35 interest for the year. 2005 tax preparation You must report $35 interest income on your tax return. 2005 tax preparation Interest on insurance dividends. 2005 tax preparation   Interest on insurance dividends left on deposit with an insurance company that can be withdrawn annually is taxable to you in the year it is credited to your account. 2005 tax preparation However, if you can withdraw it only on the anniversary date of the policy (or other specified date), the interest is taxable in the year that date occurs. 2005 tax preparation Prepaid insurance premiums. 2005 tax preparation   Any increase in the value of prepaid insurance premiums, advance premiums, or premium deposit funds is interest if it is applied to the payment of premiums due on insurance policies or made available for you to withdraw. 2005 tax preparation U. 2005 tax preparation S. 2005 tax preparation obligations. 2005 tax preparation   Interest on U. 2005 tax preparation S. 2005 tax preparation obligations, such as U. 2005 tax preparation S. 2005 tax preparation Treasury bills, notes, and bonds, issued by any agency or instrumentality of the United States is taxable for federal income tax purposes. 2005 tax preparation Interest on tax refunds. 2005 tax preparation   Interest you receive on tax refunds is taxable income. 2005 tax preparation Interest on condemnation award. 2005 tax preparation   If the condemning authority pays you interest to compensate you for a delay in payment of an award, the interest is taxable. 2005 tax preparation Installment sale payments. 2005 tax preparation   If a contract for the sale or exchange of property provides for deferred payments, it also usually provides for interest payable with the deferred payments. 2005 tax preparation That interest is taxable when you receive it. 2005 tax preparation If little or no interest is provided for in a deferred payment contract, part of each payment may be treated as interest. 2005 tax preparation See Unstated Interest and Original Issue Discount in Publication 537, Installment Sales. 2005 tax preparation Interest on annuity contract. 2005 tax preparation   Accumulated interest on an annuity contract you sell before its maturity date is taxable. 2005 tax preparation Usurious interest. 2005 tax preparation   Usurious interest is interest charged at an illegal rate. 2005 tax preparation This is taxable as interest unless state law automatically changes it to a payment on the principal. 2005 tax preparation Interest income on frozen deposits. 2005 tax preparation   Exclude from your gross income interest on frozen deposits. 2005 tax preparation A deposit is frozen if, at the end of the year, you cannot withdraw any part of the deposit because: The financial institution is bankrupt or insolvent, or The state where the institution is located has placed limits on withdrawals because other financial institutions in the state are bankrupt or insolvent. 2005 tax preparation   The amount of interest you must exclude is the interest that was credited on the frozen deposits minus the sum of: The net amount you withdrew from these deposits during the year, and The amount you could have withdrawn as of the end of the year (not reduced by any penalty for premature withdrawals of a time deposit). 2005 tax preparation If you receive a Form 1099-INT for interest income on deposits that were frozen at the end of 2013, see Frozen deposits under How To Report Interest Income in chapter 1 of Publication 550, for information about reporting this interest income exclusion on your tax return. 2005 tax preparation   The interest you exclude is treated as credited to your account in the following year. 2005 tax preparation You must include it in income in the year you can withdraw it. 2005 tax preparation Example. 2005 tax preparation $100 of interest was credited on your frozen deposit during the year. 2005 tax preparation You withdrew $80 but could not withdraw any more as of the end of the year. 2005 tax preparation You must include $80 in your income and exclude $20 from your income for the year. 2005 tax preparation You must include the $20 in your income for the year you can withdraw it. 2005 tax preparation Bonds traded flat. 2005 tax preparation   If you buy a bond at a discount when interest has been defaulted or when the interest has accrued but has not been paid, the transaction is described as trading a bond flat. 2005 tax preparation The defaulted or unpaid interest is not income and is not taxable as interest if paid later. 2005 tax preparation When you receive a payment of that interest, it is a return of capital that reduces the remaining cost basis of your bond. 2005 tax preparation Interest that accrues after the date of purchase, however, is taxable interest income for the year it is received or accrued. 2005 tax preparation See Bonds Sold Between Interest Dates , later, for more information. 2005 tax preparation Below-market loans. 2005 tax preparation   In general, a below-market loan is a loan on which no interest is charged or on which interest is charged at a rate below the applicable federal rate. 2005 tax preparation See Below-Market Loans in chapter 1 of Publication 550 for more information. 2005 tax preparation U. 2005 tax preparation S. 2005 tax preparation Savings Bonds This section provides tax information on U. 2005 tax preparation S. 2005 tax preparation savings bonds. 2005 tax preparation It explains how to report the interest income on these bonds and how to treat transfers of these bonds. 2005 tax preparation For other information on U. 2005 tax preparation S. 2005 tax preparation savings bonds, write to:  For series EE and I paper savings bonds: Bureau of the Public Debt Division of Customer Assistance P. 2005 tax preparation O. 2005 tax preparation Box 7012 Parkersburg, WV 26106-7012  For series EE and I electronic bonds: Bureau of the Public Debt Division of Customer Assistance P. 2005 tax preparation O. 2005 tax preparation Box 7015 Parkersburg, WV 26106–7015  For series HH/H: Bureau of the Public Debt Division of Customer Assistance P. 2005 tax preparation O. 2005 tax preparation Box 2186 Parkersburg, WV 26106-2186 Or, on the Internet, visit: www. 2005 tax preparation treasurydirect. 2005 tax preparation gov/indiv/indiv. 2005 tax preparation htm. 2005 tax preparation Accrual method taxpayers. 2005 tax preparation   If you use an accrual method of accounting, you must report interest on U. 2005 tax preparation S. 2005 tax preparation savings bonds each year as it accrues. 2005 tax preparation You cannot postpone reporting interest until you receive it or until the bonds mature. 2005 tax preparation Accrual methods of accounting are explained in chapter 1 under Accounting Methods . 2005 tax preparation Cash method taxpayers. 2005 tax preparation   If you use the cash method of accounting, as most individual taxpayers do, you generally report the interest on U. 2005 tax preparation S. 2005 tax preparation savings bonds when you receive it. 2005 tax preparation The cash method of accounting is explained in chapter 1 under Accounting Methods. 2005 tax preparation But see Reporting options for cash method taxpayers , later. 2005 tax preparation Series HH bonds. 2005 tax preparation    These bonds were issued at face value. 2005 tax preparation Interest is paid twice a year by direct deposit to your bank account. 2005 tax preparation If you are a cash method taxpayer, you must report interest on these bonds as income in the year you receive it. 2005 tax preparation   Series HH bonds were first offered in 1980 and last offered in August 2004. 2005 tax preparation Before 1980, series H bonds were issued. 2005 tax preparation Series H bonds are treated the same as series HH bonds. 2005 tax preparation If you are a cash method taxpayer, you must report the interest when you receive it. 2005 tax preparation   Series H bonds have a maturity period of 30 years. 2005 tax preparation Series HH bonds mature in 20 years. 2005 tax preparation The last series H bonds matured in 2009. 2005 tax preparation Series EE and series I bonds. 2005 tax preparation   Interest on these bonds is payable when you redeem the bonds. 2005 tax preparation The difference between the purchase price and the redemption value is taxable interest. 2005 tax preparation Series EE bonds. 2005 tax preparation   Series EE bonds were first offered in January 1980 and have a maturity period of 30 years. 2005 tax preparation   Before July 1980, series E bonds were issued. 2005 tax preparation The original 10-year maturity period of series E bonds has been extended to 40 years for bonds issued before December 1965 and 30 years for bonds issued after November 1965. 2005 tax preparation Paper series EE and series E bonds are issued at a discount. 2005 tax preparation The face value is payable to you at maturity. 2005 tax preparation Electronic series EE bonds are issued at their face value. 2005 tax preparation The face value plus accrued interest is payable to you at maturity. 2005 tax preparation As of January 1, 2012, paper savings bonds were no longer sold at financial institutions. 2005 tax preparation   Owners of paper series EE bonds can convert them to electronic bonds. 2005 tax preparation These converted bonds do not retain the denomination listed on the paper certificate but are posted at their purchase price (with accrued interest). 2005 tax preparation Series I bonds. 2005 tax preparation   Series I bonds were first offered in 1998. 2005 tax preparation These are inflation-indexed bonds issued at their face amount with a maturity period of 30 years. 2005 tax preparation The face value plus all accrued interest is payable to you at maturity. 2005 tax preparation Reporting options for cash method taxpayers. 2005 tax preparation   If you use the cash method of reporting income, you can report the interest on series EE, series E, and series I bonds in either of the following ways. 2005 tax preparation Method 1. 2005 tax preparation Postpone reporting the interest until the earlier of the year you cash or dispose of the bonds or the year they mature. 2005 tax preparation (However, see Savings bonds traded , later. 2005 tax preparation )  Note. 2005 tax preparation Series EE bonds issued in 1983 matured in 2013. 2005 tax preparation If you have used method 1, you generally must report the interest on these bonds on your 2013 return. 2005 tax preparation The last series E bonds were issued in 1980 and matured in 2010. 2005 tax preparation If you used method 1, you generally should have reported the interest on these bonds on your 2010 return. 2005 tax preparation Method 2. 2005 tax preparation Choose to report the increase in redemption value as interest each year. 2005 tax preparation You must use the same method for all series EE, series E, and series I bonds you own. 2005 tax preparation If you do not choose method 2 by reporting the increase in redemption value as interest each year, you must use method 1. 2005 tax preparation    If you plan to cash your bonds in the same year you will pay for higher education expenses, you may want to use method 1 because you may be able to exclude the interest from your income. 2005 tax preparation To learn how, see Education Savings Bond Program, later. 2005 tax preparation Change from method 1. 2005 tax preparation   If you want to change your method of reporting the interest from method 1 to method 2, you can do so without permission from the IRS. 2005 tax preparation In the year of change you must report all interest accrued to date and not previously reported for all your bonds. 2005 tax preparation   Once you choose to report the interest each year, you must continue to do so for all series EE, series E, and series I bonds you own and for any you get later, unless you request permission to change, as explained next. 2005 tax preparation Change from method 2. 2005 tax preparation   To change from method 2 to method 1, you must request permission from the IRS. 2005 tax preparation Permission for the change is automatically granted if you send the IRS a statement that meets all the following requirements. 2005 tax preparation You have typed or printed the following number at the top: “131. 2005 tax preparation ” It includes your name and social security number under “131. 2005 tax preparation ” It includes the year of change (both the beginning and ending dates). 2005 tax preparation It identifies the savings bonds for which you are requesting this change. 2005 tax preparation It includes your agreement to: Report all interest on any bonds acquired during or after the year of change when the interest is realized upon disposition, redemption, or final maturity, whichever is earliest, and Report all interest on the bonds acquired before the year of change when the interest is realized upon disposition, redemption, or final maturity, whichever is earliest, with the exception of the interest reported in prior tax years. 2005 tax preparation   You must attach this statement to your tax return for the year of change, which you must file by the due date (including extensions). 2005 tax preparation   You can have an automatic extension of 6 months from the due date of your return for the year of change (excluding extensions) to file the statement with an amended return. 2005 tax preparation On the statement, type or print “Filed pursuant to section 301. 2005 tax preparation 9100-2. 2005 tax preparation ” To get this extension, you must have filed your original return for the year of the change by the due date (including extensions). 2005 tax preparation    By the date you file the original statement with your return, you must also send a signed copy to the address below. 2005 tax preparation   Internal Revenue Service Attention: CC:IT&A (Automatic Rulings Branch) P. 2005 tax preparation O. 2005 tax preparation Box 7604 Benjamin Franklin Station Washington, DC 20044   If you use a private delivery service, send the signed copy to the address below. 2005 tax preparation   Internal Revenue Service Attention: CC:IT&A (Automatic Rulings Branch) Room 5336 1111 Constitution Avenue, NW  Washington, DC 20224   Instead of filing this statement, you can request permission to change from method 2 to method 1 by filing Form 3115, Application for Change in Accounting Method. 2005 tax preparation In that case, follow the form instructions for an automatic change. 2005 tax preparation No user fee is required. 2005 tax preparation Co-owners. 2005 tax preparation   If a U. 2005 tax preparation S. 2005 tax preparation savings bond is issued in the names of co-owners, such as you and your child or you and your spouse, interest on the bond is generally taxable to the co-owner who bought the bond. 2005 tax preparation One co-owner's funds used. 2005 tax preparation    If you used your funds to buy the bond, you must pay the tax on the interest. 2005 tax preparation This is true even if you let the other co-owner redeem the bond and keep all the proceeds. 2005 tax preparation Under these circumstances, the co-owner who redeemed the bond will receive a Form 1099-INT at the time of redemption and must provide you with another Form 1099-INT showing the amount of interest from the bond taxable to you. 2005 tax preparation The co-owner who redeemed the bond is a “nominee. 2005 tax preparation ” See Nominee distributions under How To Report Interest Income in chapter 1 of Publication 550 for more information about how a person who is a nominee reports interest income belonging to another person. 2005 tax preparation Both co-owners' funds used. 2005 tax preparation   If you and the other co-owner each contribute part of the bond's purchase price, the interest is generally taxable to each of you, in proportion to the amount each of you paid. 2005 tax preparation Community property. 2005 tax preparation   If you and your spouse live in a community property state and hold bonds as community property, one-half of the interest is considered received by each of you. 2005 tax preparation If you file separate returns, each of you generally must report one-half of the bond interest. 2005 tax preparation For more information about community property, see Publication 555. 2005 tax preparation Table 7-1. 2005 tax preparation   These rules are also shown in Table 7-1. 2005 tax preparation Ownership transferred. 2005 tax preparation   If you bought series E, series EE, or series I bonds entirely with your own funds and had them reissued in your co-owner's name or beneficiary's name alone, you must include in your gross income for the year of reissue all interest that you earned on these bonds and have not previously reported. 2005 tax preparation But, if the bonds were reissued in your name alone, you do not have to report the interest accrued at that time. 2005 tax preparation   This same rule applies when bonds (other than bonds held as community property) are transferred between spouses or incident to divorce. 2005 tax preparation Purchased jointly. 2005 tax preparation   If you and a co-owner each contributed funds to buy series E, series EE, or series I bonds jointly and later have the bonds reissued in the co-owner's name alone, you must include in your gross income for the year of reissue your share of all the interest earned on the bonds that you have not previously reported. 2005 tax preparation The former co-owner does not have to include in gross income at the time of reissue his or her share of the interest earned that was not reported before the transfer. 2005 tax preparation This interest, however, as well as all interest earned after the reissue, is income to the former co-owner. 2005 tax preparation   This income-reporting rule also applies when the bonds are reissued in the name of your former co-owner and a new co-owner. 2005 tax preparation But the new co-owner will report only his or her share of the interest earned after the transfer. 2005 tax preparation   If bonds that you and a co-owner bought jointly are reissued to each of you separately in the same proportion as your contribution to the purchase price, neither you nor your co-owner has to report at that time the interest earned before the bonds were reissued. 2005 tax preparation    Table 7-1. 2005 tax preparation Who Pays the Tax on U. 2005 tax preparation S. 2005 tax preparation Savings Bond Interest IF . 2005 tax preparation . 2005 tax preparation . 2005 tax preparation THEN the interest must be reported by . 2005 tax preparation . 2005 tax preparation . 2005 tax preparation you buy a bond in your name and the name of another person as co-owners, using only your own funds you. 2005 tax preparation you buy a bond in the name of another person, who is the sole owner of the bond the person for whom you bought the bond. 2005 tax preparation you and another person buy a bond as co-owners, each contributing part of the purchase price both you and the other co-owner, in proportion to the amount each paid for the bond. 2005 tax preparation you and your spouse, who live in a community property state, buy a bond that is community property you and your spouse. 2005 tax preparation If you file separate returns, both you and your spouse generally report one-half of the interest. 2005 tax preparation Example 1. 2005 tax preparation You and your spouse each spent an equal amount to buy a $1,000 series EE savings bond. 2005 tax preparation The bond was issued to you and your spouse as co-owners. 2005 tax preparation You both postpone reporting interest on the bond. 2005 tax preparation You later have the bond reissued as two $500 bonds, one in your name and one in your spouse's name. 2005 tax preparation At that time neither you nor your spouse has to report the interest earned to the date of reissue. 2005 tax preparation Example 2. 2005 tax preparation You bought a $1,000 series EE savings bond entirely with your own funds. 2005 tax preparation The bond was issued to you and your spouse as co-owners. 2005 tax preparation You both postpone reporting interest on the bond. 2005 tax preparation You later have the bond reissued as two $500 bonds, one in your name and one in your spouse's name. 2005 tax preparation You must report half the interest earned to the date of reissue. 2005 tax preparation Transfer to a trust. 2005 tax preparation   If you own series E, series EE, or series I bonds and transfer them to a trust, giving up all rights of ownership, you must include in your income for that year the interest earned to the date of transfer if you have not already reported it. 2005 tax preparation However, if you are considered the owner of the trust and if the increase in value both before and after the transfer continues to be taxable to you, you can continue to defer reporting the interest earned each year. 2005 tax preparation You must include the total interest in your income in the year you cash or dispose of the bonds or the year the bonds finally mature, whichever is earlier. 2005 tax preparation   The same rules apply to previously unreported interest on series EE or series E bonds if the transfer to a trust consisted of series HH or series H bonds you acquired in a trade for the series EE or series E bonds. 2005 tax preparation See Savings bonds traded , later. 2005 tax preparation Decedents. 2005 tax preparation   The manner of reporting interest income on series E, series EE, or series I bonds, after the death of the owner (decedent), depends on the accounting and income-reporting methods previously used by the decedent. 2005 tax preparation This is explained in chapter 1 of Publication 550. 2005 tax preparation Savings bonds traded. 2005 tax preparation   If you postponed reporting the interest on your series EE or series E bonds, you did not recognize taxable income when you traded the bonds for series HH or series H bonds, unless you received cash in the trade. 2005 tax preparation (You cannot trade series I bonds for series HH bonds. 2005 tax preparation After August 31, 2004, you cannot trade any other series of bonds for series HH bonds. 2005 tax preparation ) Any cash you received is income up to the amount of the interest earned on the bonds traded. 2005 tax preparation When your series HH or series H bonds mature, or if you dispose of them before maturity, you report as interest the difference between their redemption value and your cost. 2005 tax preparation Your cost is the sum of the amount you paid for the traded series EE or series E bonds plus any amount you had to pay at the time of the trade. 2005 tax preparation Example. 2005 tax preparation You traded series EE bonds (on which you postponed reporting the interest) for $2,500 in series HH bonds and $223 in cash. 2005 tax preparation You reported the $223 as taxable income on your tax return. 2005 tax preparation At the time of the trade, the series EE bonds had accrued interest of $523 and a redemption value of $2,723. 2005 tax preparation You hold the series HH bonds until maturity, when you receive $2,500. 2005 tax preparation You must report $300 as interest income in the year of maturity. 2005 tax preparation This is the difference between their redemption value, $2,500, and your cost, $2,200 (the amount you paid for the series EE bonds). 2005 tax preparation (It is also the difference between the accrued interest of $523 on the series EE bonds and the $223 cash received on the trade. 2005 tax preparation ) Choice to report interest in year of trade. 2005 tax preparation   You could have chosen to treat all of the previously unreported accrued interest on the series EE or series E bonds traded for series HH bonds as income in the year of the trade. 2005 tax preparation If you made this choice, it is treated as a change from method 1. 2005 tax preparation See Change from method 1 under Series EE and series I bonds, earlier. 2005 tax preparation Form 1099-INT for U. 2005 tax preparation S. 2005 tax preparation savings bonds interest. 2005 tax preparation   When you cash a bond, the bank or other payer that redeems it must give you a Form 1099-INT if the interest part of the payment you receive is $10 or more. 2005 tax preparation Box 3 of your Form 1099-INT should show the interest as the difference between the amount you received and the amount paid for the bond. 2005 tax preparation However, your Form 1099-INT may show more interest than you have to include on your income tax return. 2005 tax preparation For example, this may happen if any of the following are true. 2005 tax preparation You chose to report the increase in the redemption value of the bond each year. 2005 tax preparation The interest shown on your Form 1099-INT will not be reduced by amounts previously included in income. 2005 tax preparation You received the bond from a decedent. 2005 tax preparation The interest shown on your Form 1099-INT will not be reduced by any interest reported by the decedent before death, or on the decedent's final return, or by the estate on the estate's income tax return. 2005 tax preparation Ownership of the bond was transferred. 2005 tax preparation The interest shown on your Form 1099-INT will not be reduced by interest that accrued before the transfer. 2005 tax preparation You were named as a co-owner, and the other co-owner contributed funds to buy the bond. 2005 tax preparation The interest shown on your Form 1099-INT will not be reduced by the amount you received as nominee for the other co-owner. 2005 tax preparation (See Co-owners , earlier in this chapter, for more information about the reporting requirements. 2005 tax preparation ) You received the bond in a taxable distribution from a retirement or profit-sharing plan. 2005 tax preparation The interest shown on your Form 1099-INT will not be reduced by the interest portion of the amount taxable as a distribution from the plan and not taxable as interest. 2005 tax preparation (This amount is generally shown on Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. 2005 tax preparation , for the year of distribution. 2005 tax preparation )   For more information on including the correct amount of interest on your return, see How To Report Interest Income , later. 2005 tax preparation Publication 550 includes examples showing how to report these amounts. 2005 tax preparation    Interest on U. 2005 tax preparation S. 2005 tax preparation savings bonds is exempt from state and local taxes. 2005 tax preparation The Form 1099-INT you receive will indicate the amount that is for U. 2005 tax preparation S. 2005 tax preparation savings bond interest in box 3. 2005 tax preparation Education Savings Bond Program You may be able to exclude from income all or part of the interest you receive on the redemption of qualified U. 2005 tax preparation S. 2005 tax preparation savings bonds during the year if you pay qualified higher educational expenses during the same year. 2005 tax preparation This exclusion is known as the Education Savings Bond Program. 2005 tax preparation You do not qualify for this exclusion if your filing status is married filing separately. 2005 tax preparation Form 8815. 2005 tax preparation   Use Form 8815 to figure your exclusion. 2005 tax preparation Attach the form to your Form 1040 or Form 1040A. 2005 tax preparation Qualified U. 2005 tax preparation S. 2005 tax preparation savings bonds. 2005 tax preparation   A qualified U. 2005 tax preparation S. 2005 tax preparation savings bond is a series EE bond issued after 1989 or a series I bond. 2005 tax preparation The bond must be issued either in your name (sole owner) or in your and your spouse's names (co-owners). 2005 tax preparation You must be at least 24 years old before the bond's issue date. 2005 tax preparation For example, a bond bought by a parent and issued in the name of his or her child under age 24 does not qualify for the exclusion by the parent or child. 2005 tax preparation    The issue date of a bond may be earlier than the date the bond is purchased because the issue date assigned to a bond is the first day of the month in which it is purchased. 2005 tax preparation Beneficiary. 2005 tax preparation   You can designate any individual (including a child) as a beneficiary of the bond. 2005 tax preparation Verification by IRS. 2005 tax preparation   If you claim the exclusion, the IRS will check it by using bond redemption information from the Department of the Treasury. 2005 tax preparation Qualified expenses. 2005 tax preparation   Qualified higher educational expenses are tuition and fees required for you, your spouse, or your dependent (for whom you claim an exemption) to attend an eligible educational institution. 2005 tax preparation   Qualified expenses include any contribution you make to a qualified tuition program or to a Coverdell education savings account. 2005 tax preparation   Qualified expenses do not include expenses for room and board or for courses involving sports, games, or hobbies that are not part of a degree or certificate granting program. 2005 tax preparation Eligible educational institutions. 2005 tax preparation   These institutions include most public, private, and nonprofit universities, colleges, and vocational schools that are accredited and eligible to participate in student aid programs run by the U. 2005 tax preparation S. 2005 tax preparation Department of Education. 2005 tax preparation Reduction for certain benefits. 2005 tax preparation   You must reduce your qualified higher educational expenses by all of the following tax-free benefits. 2005 tax preparation Tax-free part of scholarships and fellowships (see Scholarships and fellowships in chapter 12). 2005 tax preparation Expenses used to figure the tax-free portion of distributions from a Coverdell ESA. 2005 tax preparation Expenses used to figure the tax-free portion of distributions from a qualified tuition program. 2005 tax preparation Any tax-free payments (other than gifts or inheritances) received for educational expenses, such as Veterans' educational assistance benefits, Qualified tuition reductions, or Employer-provided educational assistance. 2005 tax preparation Any expense used in figuring the American Opportunity and lifetime learning credits. 2005 tax preparation Amount excludable. 2005 tax preparation   If the total proceeds (interest and principal) from the qualified U. 2005 tax preparation S. 2005 tax preparation savings bonds you redeem during the year are not more than your adjusted qualified higher educational expenses for the year, you may be able to exclude all of the interest. 2005 tax preparation If the proceeds are more than the expenses, you may be able to exclude only part of the interest. 2005 tax preparation   To determine the excludable amount, multiply the interest part of the proceeds by a fraction. 2005 tax preparation The numerator of the fraction is the qualified higher educational expenses you paid during the year. 2005 tax preparation The denominator of the fraction is the total proceeds you received during the year. 2005 tax preparation Example. 2005 tax preparation In February 2013, Mark and Joan, a married couple, cashed a qualified series EE U. 2005 tax preparation S. 2005 tax preparation savings bond they bought in April 1997. 2005 tax preparation They received proceeds of $8,372 representing principal of $5,000 and interest of $3,372. 2005 tax preparation In 2013, they paid $4,000 of their daughter's college tuition. 2005 tax preparation They are not claiming an education credit for that amount, and their daughter does not have any tax-free educational assistance. 2005 tax preparation They can exclude $1,611 ($3,372 × ($4,000 ÷ $8,372)) of interest in 2013. 2005 tax preparation They must pay tax on the remaining $1,761 ($3,372 − $1,611) interest. 2005 tax preparation Modified adjusted gross income limit. 2005 tax preparation   The interest exclusion is limited if your modified adjusted gross income (modified AGI) is: $74,700 to $89,700 for taxpayers filing single or head of household, and $112,050 to $142,050 for married taxpayers filing jointly or for a qualifying widow(er) with dependent child. 2005 tax preparation You do not qualify for the interest exclusion if your modified AGI is equal to or more than the upper limit for your filing status. 2005 tax preparation   Modified AGI, for purposes of this exclusion, is adjusted gross income (Form 1040, line 37, or Form 1040A, line 21) figured before the interest exclusion, and modified by adding back any: Foreign earned income exclusion, Foreign housing exclusion and deduction, Exclusion of income for bona fide residents of American Samoa, Exclusion for income from Puerto Rico, Exclusion for adoption benefits received under an employer's adoption assistance program, Deduction for tuition and fees, Deduction for student loan interest, and Deduction for domestic production activities. 2005 tax preparation   Use the Line 9 Worksheet in the Form 8815 instructions to figure your modified AGI. 2005 tax preparation If you claim any of the exclusion or deduction items listed above (except items 6, 7, and 8), add the amount of the exclusion or deduction (except items 6, 7, and 8) to the amount on line 5 of the worksheet, and enter the total on Form 8815, line 9, as your modified AGI. 2005 tax preparation   If you have investment interest expense incurred to earn royalties and other investment income, see Education Savings Bond Program in chapter 1 of Publication 550. 2005 tax preparation Recordkeeping. 2005 tax preparation If you claim the interest exclusion, you must keep a written record of the qualified U. 2005 tax preparation S. 2005 tax preparation savings bonds you redeem. 2005 tax preparation Your record must include the serial number, issue date, face value, and total redemption proceeds (principal and interest) of each bond. 2005 tax preparation You can use Form 8818 to record this information. 2005 tax preparation You should also keep bills, receipts, canceled checks, or other documentation that shows you paid qualified higher educational expenses during the year. 2005 tax preparation U. 2005 tax preparation S. 2005 tax preparation Treasury Bills, Notes, and Bonds Treasury bills, notes, and bonds are direct debts (obligations) of the U. 2005 tax preparation S. 2005 tax preparation Government. 2005 tax preparation Taxation of interest. 2005 tax preparation   Interest income from Treasury bills, notes, and bonds is subject to federal income tax but is exempt from all state and local income taxes. 2005 tax preparation You should receive Form 1099-INT showing the interest (in box 3) paid to you for the year. 2005 tax preparation   Payments of principal and interest generally will be credited to your designated checking or savings account by direct deposit through the TreasuryDirect® system. 2005 tax preparation Treasury bills. 2005 tax preparation   These bills generally have a 4-week, 13-week, 26-week, or 52-week maturity period. 2005 tax preparation They are generally issued at a discount in the amount of $100 and multiples of $100. 2005 tax preparation The difference between the discounted price you pay for the bills and the face value you receive at maturity is interest income. 2005 tax preparation Generally, you report this interest income when the bill is paid at maturity. 2005 tax preparation If you paid a premium for a bill (more than the face value), you generally report the premium as a section 171 deduction when the bill is paid at maturity. 2005 tax preparation Treasury notes and bonds. 2005 tax preparation   Treasury notes have maturity periods of more than 1 year, ranging up to 10 years. 2005 tax preparation Maturity periods for Treasury bonds are longer than 10 years. 2005 tax preparation Both generally are issued in denominations of $100 to $1 million and generally pay interest every 6 months. 2005 tax preparation Generally, you report this interest for the year paid. 2005 tax preparation For more information, see U. 2005 tax preparation S. 2005 tax preparation Treasury Bills, Notes, and Bonds in chapter 1 of Publication 550. 2005 tax preparation For other information on Treasury notes or bonds, write to:  Bureau of the Public Debt P. 2005 tax preparation O. 2005 tax preparation Box 7015 Parkersburg, WV 26106-7015 Or, on the Internet, visit: www. 2005 tax preparation treasurydirect. 2005 tax preparation gov/indiv/indiv. 2005 tax preparation htm. 2005 tax preparation For information on series EE, series I, and series HH savings bonds, see U. 2005 tax preparation S. 2005 tax preparation Savings Bonds , earlier. 2005 tax preparation Treasury inflation-protected securities (TIPS). 2005 tax preparation   These securities pay interest twice a year at a fixed rate, based on a principal amount adjusted to take into account inflation and deflation. 2005 tax preparation For the tax treatment of these securities, see Inflation-Indexed Debt Instruments under Original Issue Discount (OID), in Publication 550. 2005 tax preparation Bonds Sold Between Interest Dates If you sell a bond between interest payment dates, part of the sales price represents interest accrued to the date of sale. 2005 tax preparation You must report that part of the sales price as interest income for the year of sale. 2005 tax preparation If you buy a bond between interest payment dates, part of the purchase price represents interest accrued before the date of purchase. 2005 tax preparation When that interest is paid to you, treat it as a return of your capital investment, rather than interest income, by reducing your basis in the bond. 2005 tax preparation See Accrued interest on bonds under How To Report Interest Income in chapter 1 of Publication 550 for information on reporting the payment. 2005 tax preparation Insurance Life insurance proceeds paid to you as beneficiary of the insured person are usually not taxable. 2005 tax preparation But if you receive the proceeds in installments, you must usually report a part of each installment payment as interest income. 2005 tax preparation For more information about insurance proceeds received in installments, see Publication 525, Taxable and Nontaxable Income. 2005 tax preparation Annuity. 2005 tax preparation   If you buy an annuity with life insurance proceeds, the annuity payments you receive are taxed as pension and annuity income from a nonqualified plan, not as interest income. 2005 tax preparation See chapter 10 for information on pension and annuity income from nonqualified plans. 2005 tax preparation State or Local Government Obligations Interest on a bond used to finance government operations generally is not taxable if the bond is issued by a state, the District of Columbia, a possession of the United States, or any of their political subdivisions. 2005 tax preparation Bonds issued after 1982 (including tribal economic development bonds issued after February 17, 2009) by an Indian tribal government are treated as issued by a state. 2005 tax preparation Interest on these bonds is generally tax exempt if the bonds are part of an issue of which substantially all proceeds are to be used in the exercise of any essential government function. 2005 tax preparation For information on federally guaranteed bonds, mortgage revenue bonds, arbitrage bonds, private activity bonds, qualified tax credit bonds, and Build America bonds, see State or Local Government Obligations in chapter 1 of Publication 550. 2005 tax preparation Information reporting requirement. 2005 tax preparation   If you must file a tax return, you are required to show any tax-exempt interest you received on your return. 2005 tax preparation This is an information reporting requirement only. 2005 tax preparation It does not change tax-exempt interest to taxable interest. 2005 tax preparation Original Issue Discount (OID) Original issue discount (OID) is a form of interest. 2005 tax preparation You generally include OID in your income as it accrues over the term of the debt instrument, whether or not you receive any payments from the issuer. 2005 tax preparation A debt instrument generally has OID when the instrument is issued for a price that is less than its stated redemption price at maturity. 2005 tax preparation OID is the difference between the stated redemption price at maturity and the issue price. 2005 tax preparation All debt instruments that pay no interest before maturity are presumed to be issued at a discount. 2005 tax preparation Zero coupon bonds are one example of these instruments. 2005 tax preparation The OID accrual rules generally do not apply to short-term obligations (those with a fixed maturity date of 1 year or less from date of issue). 2005 tax preparation See Discount on Short-Term Obligations in chapter 1 of Publication 550. 2005 tax preparation De minimis OID. 2005 tax preparation   You can treat the discount as zero if it is less than one-fourth of 1% (. 2005 tax preparation 0025) of the stated redemption price at maturity multiplied by the number of full years from the date of original issue to maturity. 2005 tax preparation This small discount is known as “de minimis” OID. 2005 tax preparation Example 1. 2005 tax preparation You bought a 10-year bond with a stated redemption price at maturity of $1,000, issued at $980 with OID of $20. 2005 tax preparation One-fourth of 1% of $1,000 (stated redemption price) times 10 (the number of full years from the date of original issue to maturity) equals $25. 2005 tax preparation Because the $20 discount is less than $25, the OID is treated as zero. 2005 tax preparation (If you hold the bond at maturity, you will recognize $20 ($1,000 − $980) of capital gain. 2005 tax preparation ) Example 2. 2005 tax preparation The facts are the same as in Example 1, except that the bond was issued at $950. 2005 tax preparation The OID is $50. 2005 tax preparation Because the $50 discount is more than the $25 figured in Example 1, you must include the OID in income as it accrues over the term of the bond. 2005 tax preparation Debt instrument bought after original issue. 2005 tax preparation   If you buy a debt instrument with de minimis OID at a premium, the discount is not includible in income. 2005 tax preparation If you buy a debt instrument with de minimis OID at a discount, the discount is reported under the market discount rules. 2005 tax preparation See Market Discount Bonds in chapter 1 of Publication 550. 2005 tax preparation Exceptions to reporting OID. 2005 tax preparation   The OID rules discussed in this chapter do not apply to the following debt instruments. 2005 tax preparation Tax-exempt obligations. 2005 tax preparation (However, see Stripped tax-exempt obligations under Stripped Bonds and Coupons in chapter 1 of Publication 550). 2005 tax preparation U. 2005 tax preparation S. 2005 tax preparation savings bonds. 2005 tax preparation Short-term debt instruments (those with a fixed maturity date of not more than 1 year from the date of issue). 2005 tax preparation Obligations issued by an individual before March 2, 1984. 2005 tax preparation Loans between individuals if all the following are true. 2005 tax preparation The lender is not in the business of lending money. 2005 tax preparation The amount of the loan, plus the amount of any outstanding prior loans between the same individuals, is $10,000 or less. 2005 tax preparation Avoiding any federal tax is not one of the principal purposes of the loan. 2005 tax preparation Form 1099-OID. 2005 tax preparation   The issuer of the debt instrument (or your broker if you held the instrument through a broker) should give you Form 1099-OID, or a similar statement, if the total OID for the calendar year is $10 or more. 2005 tax preparation Form 1099-OID will show, in box 1, the amount of OID for the part of the year that you held the bond. 2005 tax preparation It also will show, in box 2, the stated interest you must include in your income. 2005 tax preparation A copy of Form 1099-OID will be sent to the IRS. 2005 tax preparation Do not file your copy with your return. 2005 tax preparation Keep it for your records. 2005 tax preparation   In most cases, you must report the entire amount in boxes 1 and 2 of Form 1099-OID as interest income. 2005 tax preparation But see Refiguring OID shown on Form 1099-OID, later in this discussion, for more information. 2005 tax preparation Form 1099-OID not received. 2005 tax preparation   If you had OID for the year but did not receive a Form 1099-OID, you can find tables on IRS. 2005 tax preparation gov that list total OID on certain debt instruments and have information that will help you figure OID. 2005 tax preparation For the latest OID tables, go to www. 2005 tax preparation irs. 2005 tax preparation gov and enter “OID tables” in the Search box. 2005 tax preparation If your debt instrument is not listed, consult the issuer for further information about the accrued OID for the year. 2005 tax preparation Nominee. 2005 tax preparation   If someone else is the holder of record (the registered owner) of an OID instrument belonging to you and receives a Form 1099-OID on your behalf, that person must give you a Form 1099-OID. 2005 tax preparation Refiguring OID shown on Form 1099-OID. 2005 tax preparation   You must refigure the OID shown in box 1 or box 8 of Form 1099-OID if either of the following apply. 2005 tax preparation You bought the debt instrument after its original issue and paid a premium or an acquisition premium. 2005 tax preparation The debt instrument is a stripped bond or a stripped coupon (including certain zero coupon instruments). 2005 tax preparation For information about figuring the correct amount of OID to include in your income, see Figuring OID on Long-Term Debt Instruments in Publication 1212. 2005 tax preparation Refiguring periodic interest shown on Form 1099-OID. 2005 tax preparation   If you disposed of a debt instrument or acquired it from another holder during the year, see Bonds Sold Between Interest Dates , earlier, for information about the treatment of periodic interest that may be shown in box 2 of Form 1099-OID for that instrument. 2005 tax preparation Certificates of deposit (CDs). 2005 tax preparation   If you buy a CD with a maturity of more than 1 year, you must include in income each year a part of the total interest due and report it in the same manner as other OID. 2005 tax preparation   This also applies to similar deposit arrangements with banks, building and loan associations, etc. 2005 tax preparation , including: Time deposits, Bonus plans, Savings certificates, Deferred income certificates, Bonus savings certificates, and Growth savings certificates. 2005 tax preparation Bearer CDs. 2005 tax preparation   CDs issued after 1982 generally must be in registered form. 2005 tax preparation Bearer CDs are CDs not in registered form. 2005 tax preparation They are not issued in the depositor's name and are transferable from one individual to another. 2005 tax preparation   Banks must provide the IRS and the person redeeming a bearer CD with a Form 1099-INT. 2005 tax preparation More information. 2005 tax preparation   See chapter 1 of Publication 550 for more information about OID and related topics, such as market discount bonds. 2005 tax preparation When To Report Interest Income When to report your interest income depends on whether you use the cash method or an accrual method to report income. 2005 tax preparation Cash method. 2005 tax preparation   Most individual taxpayers use the cash method. 2005 tax preparation If you use this method, you generally report your interest income in the year in which you actually or constructively receive it. 2005 tax preparation However, there are special rules for reporting the discount on certain debt instruments. 2005 tax preparation See U. 2005 tax preparation S. 2005 tax preparation Savings Bonds and Original Issue Discount (OID) , earlier. 2005 tax preparation Example. 2005 tax preparation On September 1, 2011, you loaned another individual $2,000 at 12%, compounded annually. 2005 tax preparation You are not in the business of lending money. 2005 tax preparation The note stated that principal and interest would be due on August 31, 2013. 2005 tax preparation In 2013, you received $2,508. 2005 tax preparation 80 ($2,000 principal and $508. 2005 tax preparation 80 interest). 2005 tax preparation If you use the cash method, you must include in income on your 2013 return the $508. 2005 tax preparation 80 interest you received in that year. 2005 tax preparation Constructive receipt. 2005 tax preparation   You constructively receive income when it is credited to your account or made available to you. 2005 tax preparation You do not need to have physical possession of it. 2005 tax preparation For example, you are considered to receive interest, dividends, or other earnings on any deposit or account in a bank, savings and loan, or similar financial institution, or interest on life insurance policy dividends left to accumulate, when they are credited to your account and subject to your withdrawal. 2005 tax preparation This is true even if they are not yet entered in your passbook. 2005 tax preparation   You constructively receive income on the deposit or account even if you must: Make withdrawals in multiples of even amounts, Give a notice to withdraw before making the withdrawal, Withdraw all or part of the account to withdraw the earnings, or Pay a penalty on early withdrawals, unless the interest you are to receive on an early withdrawal or redemption is substantially less than the interest payable at maturity. 2005 tax preparation Accrual method. 2005 tax preparation   If you use an accrual method, you report your interest income when you earn it, whether or not you have received it. 2005 tax preparation Interest is earned over the term of the debt instrument. 2005 tax preparation Example. 2005 tax preparation If, in the previous example, you use an accrual method, you must include the interest in your income as you earn it. 2005 tax preparation You would report the interest as follows: 2011, $80; 2012, $249. 2005 tax preparation 60; and 2013, $179. 2005 tax preparation 20. 2005 tax preparation Coupon bonds. 2005 tax preparation   Interest on coupon bonds is taxable in the year the coupon becomes due and payable. 2005 tax preparation It does not matter when you mail the coupon for payment. 2005 tax preparation How To Report Interest Income Generally, you report all your taxable interest income on Form 1040, line 8a; Form 1040A, line 8a; or Form 1040EZ, line 2. 2005 tax preparation You cannot use Form 1040EZ if your taxable interest income is more than $1,500. 2005 tax preparation Instead, you must use Form 1040A or Form 1040. 2005 tax preparation Form 1040A. 2005 tax preparation   You must complete Schedule B (Form 1040A or 1040), Part I, if you file Form 1040A and any of the following are true. 2005 tax preparation Your taxable interest income is more than $1,500. 2005 tax preparation You are claiming the interest exclusion under the Education Savings Bond Program (discussed earlier). 2005 tax preparation You received interest from a seller-financed mortgage, and the buyer used the property as a home. 2005 tax preparation You received a Form 1099-INT for U. 2005 tax preparation S. 2005 tax preparation savings bond interest that includes amounts you reported before 2013. 2005 tax preparation You received, as a nominee, interest that actually belongs to someone else. 2005 tax preparation You received a Form 1099-INT for interest on frozen deposits. 2005 tax preparation You are reporting OID in an amount less than the amount shown on Form 1099-OID. 2005 tax preparation You received a Form 1099-INT for interest on a bond you bought between interest payment dates. 2005 tax preparation You acquired taxable bonds after 1987 and choose to reduce interest income from the bonds by any amortizable bond premium (see Bond Premium Amortization in chapter 3 of Publication 550). 2005 tax preparation List each payer's name and the amount of interest income received from each payer on line 1. 2005 tax preparation If you received a Form 1099-INT or Form 1099-OID from a brokerage firm, list the brokerage firm as the payer. 2005 tax preparation   You cannot use Form 1040A if you must use Form 1040, as described next. 2005 tax preparation Form 1040. 2005 tax preparation   You must use Form 1040 instead of Form 1040A or Form 1040EZ if: You forfeited interest income because of the early withdrawal of a time deposit; You acquired taxable bonds after 1987, you choose to reduce interest income from the bonds by any amortizable bond premium, and you are deducting the excess of bond premium amortization for the accrual period over the qualified stated interest for the period (see Bond Premium Amortization in chapter 3 of Publication 550); or You received tax-exempt interest from private activity bonds issued after August 7, 1986. 2005 tax preparation Schedule B (Form 1040A or 1040). 2005 tax preparation   You must complete Schedule B (Form 1040A or 1040), Part I, if you file Form 1040 and any of the following apply. 2005 tax preparation Your taxable interest income is more than $1,500. 2005 tax preparation You are claiming the interest exclusion under the Education Savings Bond Program (discussed earlier). 2005 tax preparation You received interest from a seller-financed mortgage, and the buyer used the property as a home. 2005 tax preparation You received a Form 1099-INT for U. 2005 tax preparation S. 2005 tax preparation savings bond interest that includes amounts you reported before 2013. 2005 tax preparation You received, as a nominee, interest that actually belongs to someone else. 2005 tax preparation You received a Form 1099-INT for interest on frozen deposits. 2005 tax preparation You received a Form 1099-INT for interest on a bond you bought between interest payment dates. 2005 tax preparation You are reporting OID in an amount less than the amount shown on Form 1099-OID. 2005 tax preparation Statement (2) in the preceding list under Form 1040 is true. 2005 tax preparation In Part I, line 1, list each payer's name and the amount received from each. 2005 tax preparation If you received a Form 1099-INT or Form 1099-OID from a brokerage firm, list the brokerage firm as the payer. 2005 tax preparation Reporting tax-exempt interest. 2005 tax preparation   Total your tax-exempt interest (such as interest or accrued OID on certain state and municipal bonds, including tax-exempt interest on zero coupon municipal bonds) and exempt-interest dividends from a mutual fund as shown on Form 1099-INT, box 8, and on Form 1099-DIV, box 10. 2005 tax preparation Add these amounts to any other tax-exempt interest you received. 2005 tax preparation Report the total on line 8b of Form 1040A or 1040. 2005 tax preparation   If you file Form 1040EZ, enter “TEI” and the amount in the space to the left of line 2. 2005 tax preparation Do not add tax-exempt interest in the total on Form 1040EZ, line 2. 2005 tax preparation   Form 1099-INT, box 9, and Form 1099-DIV, box 11, show the tax-exempt interest subject to the alternative minimum tax on Form 6251. 2005 tax preparation These amounts are already included in the amounts on Form 1099-INT, box 8, and Form 1099-DIV, box 10. 2005 tax preparation Do not add the amounts in Form 1099-INT, box 9 and Form 1099-DIV, box 11 to, or subtract them from, the amounts on Form 1099-INT, box 8, and Form 1099-DIV, box 10. 2005 tax preparation    Do not report interest from an individual retirement account (IRA) as tax-exempt interest. 2005 tax preparation Form 1099-INT. 2005 tax preparation   Your taxable interest income, except for interest from U. 2005 tax preparation S. 2005 tax preparation savings bonds and Treasury obligations, is shown in box 1 of Form 1099-INT. 2005 tax preparation Add this amount to any other taxable interest income you received. 2005 tax preparation You must report all of your taxable interest income even if you do not receive a Form 1099-INT. 2005 tax preparation Generally, contact your financial institution if you do not receive a Form 1099-INT by February 15. 2005 tax preparation Your identifying number may be truncated on any paper Form 1099-INT you receive. 2005 tax preparation   If you forfeited interest income because of the early withdrawal of a time deposit, the deductible amount will be shown on Form 1099-INT in box 2. 2005 tax preparation See Penalty on early withdrawal of savings in chapter 1 of Publication 550. 2005 tax preparation   Box 3 of Form 1099-INT shows the interest income you received from U. 2005 tax preparation S. 2005 tax preparation savings bonds, Treasury bills, Treasury notes, and Treasury bonds. 2005 tax preparation Add the amount shown in box 3 to any other taxable interest income you received, unless part of the amount in box 3 was previously included in your interest income. 2005 tax preparation If part of the amount shown in box 3 was previously included in your interest income, see U. 2005 tax preparation S. 2005 tax preparation savings bond interest previously reported , later. 2005 tax preparation   Box 4 of Form 1099-INT will contain an amount if you were subject to backup withholding. 2005 tax preparation Report the amount from box 4 on Form 1040EZ, line 7; on Form 1040A, line 36; or Form 1040, line 62 (federal income tax withheld). 2005 tax preparation   Box 5 of Form 1099-INT shows investment expenses you may be able to deduct as an itemized deduction. 2005 tax preparation See chapter 28 for more information about investment expenses. 2005 tax preparation   If there are entries in boxes 6 and 7 of Form 1099-INT, you must file Form 1040. 2005 tax preparation You may be able to take a credit for the amount shown in box 6 unless you deduct this amount on line 8 of Schedule A (Form 1040). 2005 tax preparation To take the credit, you may have to file Form 1116, Foreign Tax Credit. 2005 tax preparation For more information, see Publication 514, Foreign Tax Credit for Individuals. 2005 tax preparation U. 2005 tax preparation S. 2005 tax preparation savings bond interest previously reported. 2005 tax preparation   If you received a Form 1099-INT for U. 2005 tax preparation S. 2005 tax preparation savings bond interest, the form may show interest you do not have to report. 2005 tax preparation See Form 1099-INT for U. 2005 tax preparation S. 2005 tax preparation savings bonds interest , earlier, under U. 2005 tax preparation S. 2005 tax preparation Savings Bonds. 2005 tax preparation   On Schedule B (Form 1040A or 1040), Part I, line 1, report all the interest shown on your Form 1099-INT. 2005 tax preparation Then follow these steps. 2005 tax preparation Several lines above line 2, enter a subtotal of all interest listed on line 1. 2005 tax preparation Below the subtotal enter “U. 2005 tax preparation S. 2005 tax preparation Savings Bond Interest Previously Reported” and enter amounts previously reported or interest accrued before you received the bond. 2005 tax preparation Subtract these amounts from the subtotal and enter the result on line 2. 2005 tax preparation More information. 2005 tax preparation   For more information about how to report interest income, see chapter 1 of Publication 550 or the instructions for the form you must file. 2005 tax preparation Prev  Up  Next   Home   More Online Publications