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2011 1040 Income Tax Form

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2011 1040 Income Tax Form

2011 1040 income tax form 5. 2011 1040 income tax form   Business Income Table of Contents Introduction Kinds of IncomeBartering for Property or Services Real Estate Rents Personal Property Rents Interest and Dividend Income Canceled Debt Other Income Items That Are Not IncomeAmount you can exclude. 2011 1040 income tax form Short-term lease. 2011 1040 income tax form Retail space. 2011 1040 income tax form Qualified long-term real property. 2011 1040 income tax form Guidelines for Selected Occupations Accounting for Your Income Introduction This chapter primarily explains business income and how to account for it on your tax return, what items are not considered income, and gives guidelines for selected occupations. 2011 1040 income tax form If there is a connection between any income you receive and your business, the income is business income. 2011 1040 income tax form A connection exists if it is clear that the payment of income would not have been made if you did not have the business. 2011 1040 income tax form You can have business income even if you are not involved in the activity on a regular full-time basis. 2011 1040 income tax form Income from work you do on the side in addition to your regular job can be business income. 2011 1040 income tax form You report most business income, such as income from selling your products or services, on Schedule C or C-EZ. 2011 1040 income tax form But you report the income from the sale of business assets, such as land and office buildings, on other forms instead of Schedule C or C-EZ. 2011 1040 income tax form For information on selling business assets, see chapter 3. 2011 1040 income tax form Nonemployee compensation. 2011 1040 income tax form Business income includes amounts you received in your business that were properly shown on Forms 1099-MISC. 2011 1040 income tax form This includes amounts reported as nonemployee compensation in box 7 of the form. 2011 1040 income tax form You can find more information in the instructions on the back of the Form 1099-MISC you received. 2011 1040 income tax form Kinds of Income You must report on your tax return all income you receive from your business unless it is excluded by law. 2011 1040 income tax form In most cases, your business income will be in the form of cash, checks, and credit card charges. 2011 1040 income tax form But business income can be in other forms, such as property or services. 2011 1040 income tax form These and other types of income are explained next. 2011 1040 income tax form If you are a U. 2011 1040 income tax form S. 2011 1040 income tax form citizen who has business income from sources outside the United States (foreign income), you must report that income on your tax return unless it is exempt from tax under U. 2011 1040 income tax form S. 2011 1040 income tax form law. 2011 1040 income tax form If you live outside the United States, you may be able to exclude part or all of your foreign-source business income. 2011 1040 income tax form For details, see Publication 54, Tax Guide for U. 2011 1040 income tax form S. 2011 1040 income tax form Citizens and Resident Aliens Abroad. 2011 1040 income tax form Bartering for Property or Services Bartering is an exchange of property or services. 2011 1040 income tax form You must include in your gross receipts, at the time received, the fair market value of property or services you receive in exchange for something else. 2011 1040 income tax form If you exchange services with another person and you both have agreed ahead of time on the value of the services, that value will be accepted as the fair market value unless the value can be shown to be otherwise. 2011 1040 income tax form Example 1. 2011 1040 income tax form You are a self-employed lawyer. 2011 1040 income tax form You perform legal services for a client, a small corporation. 2011 1040 income tax form In payment for your services, you receive shares of stock in the corporation. 2011 1040 income tax form You must include the fair market value of the shares in income. 2011 1040 income tax form Example 2. 2011 1040 income tax form You are an artist and create a work of art to compensate your landlord for the rent-free use of your apartment. 2011 1040 income tax form You must include the fair rental value of the apartment in your gross receipts. 2011 1040 income tax form Your landlord must include the fair market value of the work of art in his or her rental income. 2011 1040 income tax form Example 3. 2011 1040 income tax form You are a self-employed accountant. 2011 1040 income tax form Both you and a house painter are members of a barter club, an organization that each year gives its members a directory of members and the services each member provides. 2011 1040 income tax form Members get in touch with other members directly and bargain for the value of the services to be performed. 2011 1040 income tax form In return for accounting services you provided for the house painter's business, the house painter painted your home. 2011 1040 income tax form You must include in gross receipts the fair market value of the services you received from the house painter. 2011 1040 income tax form The house painter must include the fair market value of your accounting services in his or her gross receipts. 2011 1040 income tax form Example 4. 2011 1040 income tax form You are a member of a barter club that uses credit units to credit or debit members' accounts for goods or services provided or received. 2011 1040 income tax form As soon as units are credited to your account, you can use them to buy goods or services or sell or transfer the units to other members. 2011 1040 income tax form You must include the value of credit units you received in your gross receipts for the tax year in which the units are credited to your account. 2011 1040 income tax form The dollar value of units received for services by an employee of the club, who can use the units in the same manner as other members, must be included in the employee's gross income for the tax year in which received. 2011 1040 income tax form It is wages subject to social security and Medicare taxes (FICA), federal unemployment taxes (FUTA), and income tax withholding. 2011 1040 income tax form See Publication 15 (Circular E), Employer's Tax Guide. 2011 1040 income tax form Example 5. 2011 1040 income tax form You operate a plumbing business and use the cash method of accounting. 2011 1040 income tax form You join a barter club and agree to provide plumbing services to any member for a specified number of hours. 2011 1040 income tax form Each member has access to a directory that lists the members of the club and the services available. 2011 1040 income tax form Members contact each other directly and request services to be performed. 2011 1040 income tax form You are not required to provide services unless requested by another member, but you can use as many of the offered services as you wish without paying a fee. 2011 1040 income tax form You must include the fair market value of any services you receive from club members in your gross receipts when you receive them even if you have not provided any services to club members. 2011 1040 income tax form Information returns. 2011 1040 income tax form   If you are involved in a bartering transaction, you may have to file either of the following forms. 2011 1040 income tax form Form 1099-B, Proceeds From Broker and Barter Exchange Transactions. 2011 1040 income tax form Form 1099-MISC, Miscellaneous Income. 2011 1040 income tax form For information about these forms, see the General Instructions for Certain Information Returns. 2011 1040 income tax form Real Estate Rents If you are a real estate dealer who receives income from renting real property or an owner of a hotel, motel, etc. 2011 1040 income tax form , who provides services (maid services, etc. 2011 1040 income tax form ) for guests, report the rental income and expenses on Schedule C or C-EZ. 2011 1040 income tax form If you are not a real estate dealer or the kind of owner described in the preceding sentence, report the rental income and expenses on Schedule E. 2011 1040 income tax form For more information, see Publication 527, Residential Rental Property (Including Rental of Vacation Homes). 2011 1040 income tax form Real estate dealer. 2011 1040 income tax form   You are a real estate dealer if you are engaged in the business of selling real estate to customers with the purpose of making a profit from those sales. 2011 1040 income tax form Rent you receive from real estate held for sale to customers is subject to SE tax. 2011 1040 income tax form However, rent you receive from real estate held for speculation or investment is not subject to SE tax. 2011 1040 income tax form Trailer park owner. 2011 1040 income tax form   Rental income from a trailer park is subject to SE tax if you are a self-employed trailer park owner who provides trailer lots and facilities and substantial services for the convenience of your tenants. 2011 1040 income tax form    You generally are considered to provide substantial services for tenants if they are primarily for the tenants' convenience and normally are not provided to maintain the lots in a condition for occupancy. 2011 1040 income tax form Services are substantial if the compensation for the services makes up a material part of the tenants' rental payments. 2011 1040 income tax form   Examples of services that are not normally provided for the tenants' convenience include supervising and maintaining a recreational hall provided by the park, distributing a monthly newsletter to tenants, operating a laundry facility, and helping tenants buy or sell their trailers. 2011 1040 income tax form   Examples of services that are normally provided to maintain the lots in a condition for tenant occupancy include city sewerage, electrical connections, and roadways. 2011 1040 income tax form Hotels, boarding houses, and apartments. 2011 1040 income tax form   Rental income you receive for the use or occupancy of hotels, boarding houses, or apartment houses is subject to SE tax if you provide services for the occupants. 2011 1040 income tax form   Generally, you are considered to provide services for the occupants if the services are primarily for their convenience and are not services normally provided with the rental of rooms for occupancy only. 2011 1040 income tax form An example of a service that is not normally provided for the convenience of the occupants is maid service. 2011 1040 income tax form However, providing heat and light, cleaning stairways and lobbies, and collecting trash are services normally provided for the occupants' convenience. 2011 1040 income tax form Prepaid rent. 2011 1040 income tax form   Advance payments received under a lease that does not put any restriction on their use or enjoyment are income in the year you receive them. 2011 1040 income tax form This is true no matter what accounting method or period you use. 2011 1040 income tax form Lease bonus. 2011 1040 income tax form   A bonus you receive from a lessee for granting a lease is an addition to the rent. 2011 1040 income tax form Include it in your gross receipts in the year received. 2011 1040 income tax form Lease cancellation payments. 2011 1040 income tax form   Report payments you receive from your lessee for canceling a lease in your gross receipts in the year received. 2011 1040 income tax form Payments to third parties. 2011 1040 income tax form   If your lessee makes payments to someone else under an agreement to pay your debts or obligations, include the payments in your gross receipts when the lessee makes the payments. 2011 1040 income tax form A common example of this kind of income is a lessee's payment of your property taxes on leased real property. 2011 1040 income tax form Settlement payments. 2011 1040 income tax form   Payments you receive in settlement of a lessee's obligation to restore the leased property to its original condition are income in the amount that the payments exceed the adjusted basis of the leasehold improvements destroyed, damaged, removed, or disconnected by the lessee. 2011 1040 income tax form Personal Property Rents If you are in the business of renting personal property (equipment, vehicles, formal wear, etc. 2011 1040 income tax form ), include the rental amount you receive in your gross receipts on Schedule C or C-EZ. 2011 1040 income tax form Prepaid rent and other payments described in the preceding Real Estate Rents discussion can also be received for renting personal property. 2011 1040 income tax form If you receive any of those payments, include them in your gross receipts as explained in that discussion. 2011 1040 income tax form Interest and Dividend Income Interest and dividends may be considered business income. 2011 1040 income tax form Interest. 2011 1040 income tax form   Interest received on notes receivable that you have accepted in the ordinary course of business is business income. 2011 1040 income tax form Interest received on loans is business income if you are in the business of lending money. 2011 1040 income tax form Uncollectible loans. 2011 1040 income tax form   If a loan payable to you becomes uncollectible during the tax year and you use an accrual method of accounting, you must include in gross income interest accrued up to the time the loan became uncollectible. 2011 1040 income tax form If the accrued interest later becomes uncollectible, you may be able to take a bad debt deduction. 2011 1040 income tax form See Bad Debts in chapter 8. 2011 1040 income tax form Unstated interest. 2011 1040 income tax form   If little or no interest is charged on an installment sale, you may have to treat a part of each payment as unstated interest. 2011 1040 income tax form See Unstated Interest and Original Issue Discount (OID) in Publication 537, Installment Sales. 2011 1040 income tax form Dividends. 2011 1040 income tax form   Generally, dividends are business income to dealers in securities. 2011 1040 income tax form For most sole proprietors and statutory employees, however, dividends are nonbusiness income. 2011 1040 income tax form If you hold stock as a personal investment separately from your business activity, the dividends from the stock are nonbusiness income. 2011 1040 income tax form   If you receive dividends from business insurance premiums you deducted in an earlier year, you must report all or part of the dividend as business income on your return. 2011 1040 income tax form To find out how much you have to report, see   Recovery of items previously deducted under Other Income, later. 2011 1040 income tax form Canceled Debt The following explains the general rule for including canceled debt in income and the exceptions to the general rule. 2011 1040 income tax form General Rule Generally, if your debt is canceled or forgiven, other than as a gift or bequest to you, you must include the canceled amount in your gross income for tax purposes. 2011 1040 income tax form Report the canceled amount on line 6 of Schedule C if you incurred the debt in your business. 2011 1040 income tax form If the debt is a nonbusiness debt, report the canceled amount on line 21 of Form 1040. 2011 1040 income tax form Exceptions The following discussion covers some exceptions to the general rule for canceled debt. 2011 1040 income tax form Price reduced after purchase. 2011 1040 income tax form   If you owe a debt to the seller for property you bought and the seller reduces the amount you owe, you generally do not have income from the reduction. 2011 1040 income tax form Unless you are bankrupt or insolvent, treat the amount of the reduction as a purchase price adjustment and reduce your basis in the property. 2011 1040 income tax form Deductible debt. 2011 1040 income tax form   You do not realize income from a canceled debt to the extent the payment of the debt would have led to a deduction. 2011 1040 income tax form Example. 2011 1040 income tax form You get accounting services for your business on credit. 2011 1040 income tax form Later, you have trouble paying your business debts, but you are not bankrupt or insolvent. 2011 1040 income tax form Your accountant forgives part of the amount you owe for the accounting services. 2011 1040 income tax form How you treat the canceled debt depends on your method of accounting. 2011 1040 income tax form Cash method — You do not include the canceled debt in income because payment of the debt would have been deductible as a business expense. 2011 1040 income tax form Accrual method — You include the canceled debt in income because the expense was deductible when you incurred the debt. 2011 1040 income tax form   For information on the cash and accrual methods of accounting, see chapter 2. 2011 1040 income tax form Exclusions Do not include canceled debt in income in the following situations. 2011 1040 income tax form However, you may be required to file Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness. 2011 1040 income tax form For more information, see Form 982. 2011 1040 income tax form The cancellation takes place in a bankruptcy case under title 11 of the U. 2011 1040 income tax form S. 2011 1040 income tax form Code (relating to bankruptcy). 2011 1040 income tax form See Publication 908, Bankruptcy Tax Guide. 2011 1040 income tax form The cancellation takes place when you are insolvent. 2011 1040 income tax form You can exclude the canceled debt to the extent you are insolvent. 2011 1040 income tax form See Publication 908. 2011 1040 income tax form The canceled debt is a qualified farm debt owed to a qualified person. 2011 1040 income tax form See chapter 3 in Publication 225, Farmer's Tax Guide. 2011 1040 income tax form The canceled debt is a qualified real property business debt. 2011 1040 income tax form This situation is explained later. 2011 1040 income tax form The canceled debt is qualified principal residence indebtedness which is discharged after 2006. 2011 1040 income tax form See Form 982. 2011 1040 income tax form If a canceled debt is excluded from income because it takes place in a bankruptcy case, the exclusions in situations 2 through 5 do not apply. 2011 1040 income tax form If it takes place when you are insolvent, the exclusions in situations 3 and 4 do not apply to the extent you are insolvent. 2011 1040 income tax form Debt. 2011 1040 income tax form   For purposes of this discussion, debt includes any debt for which you are liable or which attaches to property you hold. 2011 1040 income tax form Qualified real property business debt. 2011 1040 income tax form   You can elect to exclude (up to certain limits) the cancellation of qualified real property business debt. 2011 1040 income tax form If you make the election, you must reduce the basis of your depreciable real property by the amount excluded. 2011 1040 income tax form Make this reduction at the beginning of your tax year following the tax year in which the cancellation occurs. 2011 1040 income tax form However, if you dispose of the property before that time, you must reduce its basis immediately before the disposition. 2011 1040 income tax form Cancellation of qualified real property business debt. 2011 1040 income tax form   Qualified real property business debt is debt (other than qualified farm debt) that meets all the following conditions. 2011 1040 income tax form It was incurred or assumed in connection with real property used in a trade or business. 2011 1040 income tax form It was secured by such real property. 2011 1040 income tax form It was incurred or assumed at either of the following times. 2011 1040 income tax form Before January 1, 1993. 2011 1040 income tax form After December 31, 1992, if incurred or assumed to acquire, construct, or substantially improve the real property. 2011 1040 income tax form It is debt to which you choose to apply these rules. 2011 1040 income tax form   Qualified real property business debt includes refinancing of debt described in (3) earlier, but only to the extent it does not exceed the debt being refinanced. 2011 1040 income tax form   You cannot exclude more than either of the following amounts. 2011 1040 income tax form The excess (if any) of: The outstanding principal of qualified real property business debt (immediately before the cancellation), over The fair market value (immediately before the cancellation) of the business real property that is security for the debt, reduced by the outstanding principal amount of any other qualified real property business debt secured by this property immediately before the cancellation. 2011 1040 income tax form The total adjusted bases of depreciable real property held by you immediately before the cancellation. 2011 1040 income tax form These adjusted bases are determined after any basis reduction due to a cancellation in bankruptcy, insolvency, or of qualified farm debt. 2011 1040 income tax form Do not take into account depreciable real property acquired in contemplation of the cancellation. 2011 1040 income tax form Election. 2011 1040 income tax form   To make this election, complete Form 982 and attach it to your income tax return for the tax year in which the cancellation occurs. 2011 1040 income tax form You must file your return by the due date (including extensions). 2011 1040 income tax form If you timely filed your return for the year without making the election, you can still make the election by filing an amended return within 6 months of the due date of the return (excluding extensions). 2011 1040 income tax form For more information, see When To File in the form instructions. 2011 1040 income tax form Other Income The following discussion explains how to treat other types of business income you may receive. 2011 1040 income tax form Restricted property. 2011 1040 income tax form   Restricted property is property that has certain restrictions that affect its value. 2011 1040 income tax form If you receive restricted stock or other property for services performed, the fair market value of the property in excess of your cost is included in your income on Schedule C or C-EZ when the restriction is lifted. 2011 1040 income tax form However, you can choose to be taxed in the year you receive the property. 2011 1040 income tax form For more information on including restricted property in income, see Publication 525, Taxable and Nontaxable Income. 2011 1040 income tax form Gains and losses. 2011 1040 income tax form   Do not report on Schedule C or C-EZ a gain or loss from the disposition of property that is neither stock in trade nor held primarily for sale to customers. 2011 1040 income tax form Instead, you must report these gains and losses on other forms. 2011 1040 income tax form For more information, see chapter 3. 2011 1040 income tax form Promissory notes. 2011 1040 income tax form   Report promissory notes and other evidences of debt issued to you in a sale or exchange of property that is stock in trade or held primarily for sale to customers on Schedule C or C-EZ. 2011 1040 income tax form In general, you report them at their stated principal amount (minus any unstated interest) when you receive them. 2011 1040 income tax form Lost income payments. 2011 1040 income tax form   If you reduce or stop your business activities, report on Schedule C or C-EZ any payment you receive for the lost income of your business from insurance or other sources. 2011 1040 income tax form Report it on Schedule C or C-EZ even if your business is inactive when you receive the payment. 2011 1040 income tax form Damages. 2011 1040 income tax form   You must include in gross income compensation you receive during the tax year as a result of any of the following injuries connected with your business. 2011 1040 income tax form Patent infringement. 2011 1040 income tax form Breach of contract or fiduciary duty. 2011 1040 income tax form Antitrust injury. 2011 1040 income tax form Economic injury. 2011 1040 income tax form   You may be entitled to a deduction against the income if it compensates you for actual economic injury. 2011 1040 income tax form Your deduction is the smaller of the following amounts. 2011 1040 income tax form The amount you receive or accrue for damages in the tax year reduced by the amount you pay or incur in the tax year to recover that amount. 2011 1040 income tax form Your loss from the injury that you have not yet deducted. 2011 1040 income tax form Punitive damages. 2011 1040 income tax form   You must also include punitive damages in income. 2011 1040 income tax form Kickbacks. 2011 1040 income tax form   If you receive any kickbacks, include them in your income on Schedule C or C-EZ. 2011 1040 income tax form However, do not include them if you properly treat them as a reduction of a related expense item, a capital expenditure, or cost of goods sold. 2011 1040 income tax form Recovery of items previously deducted. 2011 1040 income tax form   If you recover a bad debt or any other item deducted in a previous year, include the recovery in income on Schedule C or C-EZ. 2011 1040 income tax form However, if all or part of the deduction in earlier years did not reduce your tax, you can exclude the part that did not reduce your tax. 2011 1040 income tax form If you exclude part of the recovery from income, you must include with your return a computation showing how you figured the exclusion. 2011 1040 income tax form Example. 2011 1040 income tax form Joe Smith, a sole proprietor, had gross income of $8,000, a bad debt deduction of $300, and other allowable deductions of $7,700. 2011 1040 income tax form He also had 2 personal exemptions for a total of $7,800. 2011 1040 income tax form He would not pay income tax even if he did not deduct the bad debt. 2011 1040 income tax form Therefore, he will not report as income any part of the $300 he may recover in any future year. 2011 1040 income tax form Exception for depreciation. 2011 1040 income tax form   This rule does not apply to depreciation. 2011 1040 income tax form You recover depreciation using the rules explained next. 2011 1040 income tax form Recapture of depreciation. 2011 1040 income tax form   In the following situations, you have to recapture the depreciation deduction. 2011 1040 income tax form This means you include in income part or all of the depreciation you deducted in previous years. 2011 1040 income tax form Listed property. 2011 1040 income tax form   If your business use of listed property (explained in chapter 8 under Depreciation ) falls to 50% or less in a tax year after the tax year you placed the property in service, you may have to recapture part of the depreciation deduction. 2011 1040 income tax form You do this by including in income on Schedule C part of the depreciation you deducted in previous years. 2011 1040 income tax form Use Part IV of Form 4797, Sales of Business Property, to figure the amount to include on Schedule C. 2011 1040 income tax form For more information, see What is the Business-Use Requirement? in chapter 5 of Publication 946, How To Depreciate Property. 2011 1040 income tax form That chapter explains how to determine whether property is used more than 50% in your business. 2011 1040 income tax form Section 179 property. 2011 1040 income tax form   If you take a section 179 deduction (explained in chapter 8 under Depreciation ) for an asset and before the end of the asset's recovery period the percentage of business use drops to 50% or less, you must recapture part of the section 179 deduction. 2011 1040 income tax form You do this by including in income on Schedule C part of the deduction you took. 2011 1040 income tax form Use Part IV of Form 4797 to figure the amount to include on Schedule C. 2011 1040 income tax form See chapter 2 in Publication 946 to find out when you recapture the deduction. 2011 1040 income tax form Sale or exchange of depreciable property. 2011 1040 income tax form   If you sell or exchange depreciable property at a gain, you may have to treat all or part of the gain due to depreciation as ordinary income. 2011 1040 income tax form You figure the income due to depreciation recapture in Part III of Form 4797. 2011 1040 income tax form For more information, see chapter 4 in Publication 544, Sales and Other Dispositions of Assets. 2011 1040 income tax form Items That Are Not Income In some cases the property or money you receive is not income. 2011 1040 income tax form Appreciation. 2011 1040 income tax form   Increases in value of your property are not income until you realize the increases through a sale or other taxable disposition. 2011 1040 income tax form Consignments. 2011 1040 income tax form   Consignments of merchandise to others to sell for you are not sales. 2011 1040 income tax form The title of merchandise remains with you, the consignor, even after the consignee possesses the merchandise. 2011 1040 income tax form Therefore, if you ship goods on consignment, you have no profit or loss until the consignee sells the merchandise. 2011 1040 income tax form Merchandise you have shipped out on consignment is included in your inventory until it is sold. 2011 1040 income tax form   Do not include merchandise you receive on consignment in your inventory. 2011 1040 income tax form Include your profit or commission on merchandise consigned to you in your income when you sell the merchandise or when you receive your profit or commission, depending upon the method of accounting you use. 2011 1040 income tax form Construction allowances. 2011 1040 income tax form   If you enter into a lease after August 5, 1997, you can exclude from income the construction allowance you receive (in cash or as a rent reduction) from your landlord if you receive it under both the following conditions. 2011 1040 income tax form Under a short-term lease of retail space. 2011 1040 income tax form For the purpose of constructing or improving qualified long-term real property for use in your business at that retail space. 2011 1040 income tax form Amount you can exclude. 2011 1040 income tax form   You can exclude the construction allowance to the extent it does not exceed the amount you spent for construction or improvements. 2011 1040 income tax form Short-term lease. 2011 1040 income tax form   A short-term lease is a lease (or other agreement for occupancy or use) of retail space for 15 years or less. 2011 1040 income tax form The following rules apply in determining whether the lease is for 15 years or less. 2011 1040 income tax form Take into account options to renew when figuring whether the lease is for 15 years or less. 2011 1040 income tax form But do not take into account any option to renew at fair market value determined at the time of renewal. 2011 1040 income tax form Two or more successive leases that are part of the same transaction (or a series of related transactions) for the same or substantially similar retail space are treated as one lease. 2011 1040 income tax form Retail space. 2011 1040 income tax form   Retail space is real property leased, occupied, or otherwise used by you as a tenant in your business of selling tangible personal property or services to the general public. 2011 1040 income tax form Qualified long-term real property. 2011 1040 income tax form   Qualified long-term real property is nonresidential real property that is part of, or otherwise present at, your retail space and that reverts to the landlord when the lease ends. 2011 1040 income tax form Exchange of like-kind property. 2011 1040 income tax form   If you exchange your business property or property you hold for investment solely for property of a like kind to be used in your business or to be held for investment, no gain or loss is recognized. 2011 1040 income tax form This means that the gain is not taxable and the loss is not deductible. 2011 1040 income tax form A common type of nontaxable exchange is the trade-in of a business automobile for another business automobile. 2011 1040 income tax form For more information, see Form 8824. 2011 1040 income tax form Leasehold improvements. 2011 1040 income tax form   If a tenant erects buildings or makes improvements to your property, the increase in the value of the property due to the improvements is not income to you. 2011 1040 income tax form However, if the facts indicate that the improvements are a payment of rent to you, then the increase in value would be income. 2011 1040 income tax form Loans. 2011 1040 income tax form   Money borrowed through a bona fide loan is not income. 2011 1040 income tax form Sales tax. 2011 1040 income tax form   State and local sales taxes imposed on the buyer, which you were required to collect and pay over to state or local governments, are not income. 2011 1040 income tax form Guidelines for Selected Occupations This section provides information to determine whether your earnings should be reported on Schedule C (Form 1040) or C-EZ (Form 1040). 2011 1040 income tax form Direct seller. 2011 1040 income tax form   You must report all income you receive as a direct seller on Schedule C or C-EZ. 2011 1040 income tax form This includes any of the following. 2011 1040 income tax form Income from sales—payments you receive from customers for products they buy from you. 2011 1040 income tax form Commissions, bonuses, or percentages you receive for sales and the sales of others who work under you. 2011 1040 income tax form Prizes, awards, and gifts you receive from your selling business. 2011 1040 income tax form You must report this income regardless of whether it is reported to you on an information return. 2011 1040 income tax form   You are a direct seller if you meet all the following conditions. 2011 1040 income tax form You are engaged in one of the following trades or businesses. 2011 1040 income tax form Selling or soliciting the sale of consumer products either in a home or other place that is not a permanent retail establishment, or to any buyer on a buy-sell basis or a deposit-commission basis for resale in a home or other place of business that is not a permanent retail establishment. 2011 1040 income tax form Delivering or distributing newspapers or shopping news (including any services directly related to that trade or business). 2011 1040 income tax form Substantially all your pay (whether paid in cash or not) for services described above is directly related to sales or other output (including performance of services) rather than to the number of hours worked. 2011 1040 income tax form Your services are performed under a written contract between you and the person for whom you perform the services, and the contract provides that you will not be treated as an employee for federal tax purposes. 2011 1040 income tax form Executor or administrator. 2011 1040 income tax form   If you administer a deceased person's estate, your fees are reported on Schedule C or C-EZ if you are one of the following: A professional fiduciary. 2011 1040 income tax form A nonprofessional fiduciary (personal representative) and both of the following apply. 2011 1040 income tax form The estate includes an active trade or business in which you actively participate. 2011 1040 income tax form Your fees are related to the operation of that trade or business. 2011 1040 income tax form A nonprofessional fiduciary of a single estate that requires extensive managerial activities on your part for a long period of time, provided these activities are enough to be considered a trade or business. 2011 1040 income tax form    If the fees do not meet the above requirements, report them on line 21 of Form 1040. 2011 1040 income tax form Fishing crew member. 2011 1040 income tax form    If you are a member of the crew that catches fish or other water life, your earnings are reported on Schedule C or C-EZ if you meet all the requirements shown in chapter 10 under Fishing crew member . 2011 1040 income tax form Insurance agent, former. 2011 1040 income tax form   Termination payments you receive as a former self-employed insurance agent from an insurance company because of services you performed for that company are not reported on Schedule C or C-EZ if all the following conditions are met. 2011 1040 income tax form You received payments after your agreement to perform services for the company ended. 2011 1040 income tax form You did not perform any services for the company after your service agreement ended and before the end of the year in which you received the payment. 2011 1040 income tax form You entered into a covenant not to compete against the company for at least a 1-year period beginning on the date your service agreement ended. 2011 1040 income tax form The amount of the payments depended primarily on policies sold by you or credited to your account during the last year of your service agreement or the extent to which those policies remain in force for some period after your service agreement ended, or both. 2011 1040 income tax form The amount of the payment did not depend to any extent on length of service or overall earnings from services performed for the company (regardless of whether eligibility for the payments depended on length of service). 2011 1040 income tax form Insurance agent, retired. 2011 1040 income tax form   Income paid by an insurance company to a retired self-employed insurance agent based on a percentage of commissions received before retirement is reported on Schedule C or C-EZ. 2011 1040 income tax form Also, renewal commissions and deferred commissions for sales made before retirement are generally reported on Schedule C or C-EZ. 2011 1040 income tax form   However, renewal commissions paid to the survivor of an insurance agent are not reported on Schedule C or C-EZ. 2011 1040 income tax form Newspaper carrier or distributor. 2011 1040 income tax form   You are a direct seller and your earnings are reported on Schedule C or C-EZ if all the following conditions apply. 2011 1040 income tax form You are in the business of delivering or distributing newspapers or shopping news (including directly related services such as soliciting customers and collecting receipts). 2011 1040 income tax form Substantially all your pay for these services directly relates to your sales or other output rather than to the number of hours you work. 2011 1040 income tax form You perform the services under a written contract that says you will not be treated as an employee for federal tax purposes. 2011 1040 income tax form   This rule applies whether or not you hire others to help you make deliveries. 2011 1040 income tax form It also applies whether you buy the papers from the publisher or are paid based on the number of papers you deliver. 2011 1040 income tax form Newspaper or magazine vendor. 2011 1040 income tax form   If you are 18 or older and you sell newspapers or magazines, your earnings are reported on Schedule C or C-EZ if all the following conditions apply. 2011 1040 income tax form You sell newspapers or magazines to ultimate consumers. 2011 1040 income tax form You sell them at a fixed price. 2011 1040 income tax form Your earnings are based on the difference between the sales price and your cost of goods sold. 2011 1040 income tax form   This rule applies whether or not you are guaranteed a minimum amount of earnings. 2011 1040 income tax form It also applies whether or not you receive credit for unsold newspapers or magazines you return to your supplier. 2011 1040 income tax form Notary public. 2011 1040 income tax form   Fees you receive for services you perform as a notary public are reported on Schedule C or C-EZ. 2011 1040 income tax form These payments are not subject to self-employment tax (see the instructions for Schedule SE (Form 1040)). 2011 1040 income tax form Public official. 2011 1040 income tax form   Public officials generally do not report what they earn for serving in public office on Schedule C or C-EZ. 2011 1040 income tax form This rule applies to payments received by an elected tax collector from state funds on the basis of a fixed percentage of the taxes collected. 2011 1040 income tax form Public office includes any elective or appointive office of the United States or its possessions, the District of Columbia, a state or its political subdivisions, or a wholly owned instrumentality of any of these. 2011 1040 income tax form   Public officials of state or local governments report their fees on Schedule C or C-EZ if they are paid solely on a fee basis and if their services are eligible for, but not covered by, social security under a federal-state agreement. 2011 1040 income tax form Real estate agent or direct seller. 2011 1040 income tax form   If you are a licensed real estate agent or a direct seller, your earnings are reported on Schedule C or C-EZ if both the following apply. 2011 1040 income tax form Substantially all your pay for services as a real estate agent or direct seller directly relates to your sales or other output rather than to the number of hours you work. 2011 1040 income tax form You perform the services under a written contract that says you will not be treated as an employee for federal tax purposes. 2011 1040 income tax form Securities dealer. 2011 1040 income tax form   If you are a dealer in options or commodities, your gains and losses from dealing or trading in section 1256 contracts (regulated futures contracts, foreign currency contracts, nonequity options, dealer equity options, and dealer securities futures contracts) or property related to those contracts (such as stock used to hedge options) are reported on Schedule C or C-EZ. 2011 1040 income tax form For more information, see sections 1256 and 1402(i). 2011 1040 income tax form Securities trader. 2011 1040 income tax form   You are a trader in securities if you are engaged in the business of buying and selling securities for your own account. 2011 1040 income tax form As a trader in securities, your gain or loss from the disposition of securities is not reported on Schedule C or C-EZ. 2011 1040 income tax form However, see Securities dealer , earlier, for an exception that applies to section 1256 contracts. 2011 1040 income tax form For more information about securities traders, see Publication 550, Investment Income and Expenses. 2011 1040 income tax form Accounting for Your Income Accounting for your income for income tax purposes differs at times from accounting for financial purposes. 2011 1040 income tax form This section discusses some of the more common differences that may affect business transactions. 2011 1040 income tax form Figure your business income on the basis of a tax year and according to your regular method of accounting (see chapter 2). 2011 1040 income tax form If the sale of a product is an income-producing factor in your business, you usually have to use inventories to clearly show your income. 2011 1040 income tax form Dealers in real estate are not allowed to use inventories. 2011 1040 income tax form For more information on inventories, see chapter 2. 2011 1040 income tax form Income paid to a third party. 2011 1040 income tax form   All income you earn is taxable to you. 2011 1040 income tax form You cannot avoid tax by having the income paid to a third party. 2011 1040 income tax form Example. 2011 1040 income tax form You rent out your property and the rental agreement directs the lessee to pay the rent to your son. 2011 1040 income tax form The amount paid to your son is gross income to you. 2011 1040 income tax form Cash discounts. 2011 1040 income tax form   These are amounts the seller permits you to deduct from the invoice price for prompt payment. 2011 1040 income tax form For income tax purposes, you can use either of the following two methods to account for cash discounts. 2011 1040 income tax form Deduct the cash discount from purchases (see Line 36, Purchases Less Cost of Items Withdrawn for Personal Use in chapter 6). 2011 1040 income tax form Credit the cash discount to a discount income account. 2011 1040 income tax form You must use the chosen method every year for all your purchase discounts. 2011 1040 income tax form   If you use the second method, the credit balance in the account at the end of your tax year is business income. 2011 1040 income tax form Under this method, you do not reduce the cost of goods sold by the cash discounts you received. 2011 1040 income tax form When valuing your closing inventory, you cannot reduce the invoice price of merchandise on hand at the close of the tax year by the average or estimated discounts received on the merchandise. 2011 1040 income tax form Trade discounts. 2011 1040 income tax form   These are reductions from list or catalog prices and usually are not written into the invoice or charged to the customer. 2011 1040 income tax form Do not enter these discounts on your books of account. 2011 1040 income tax form Instead, use only the net amount as the cost of the merchandise purchased. 2011 1040 income tax form For more information, see Trade discounts in chapter 6. 2011 1040 income tax form Payment placed in escrow. 2011 1040 income tax form   If the buyer of your property places part or all of the purchase price in escrow, you do not include any part of it in gross sales until you actually or constructively receive it. 2011 1040 income tax form However, upon completion of the terms of the contract and the escrow agreement, you will have taxable income, even if you do not accept the money until the next year. 2011 1040 income tax form Sales returns and allowances. 2011 1040 income tax form   Credits you allow customers for returned merchandise and any other allowances you make on sales are deductions from gross sales in figuring net sales. 2011 1040 income tax form Advance payments. 2011 1040 income tax form   Special rules dealing with an accrual method of accounting for payments received in advance are discussed in chapter 2 under Accrual Method. 2011 1040 income tax form Insurance proceeds. 2011 1040 income tax form   If you receive insurance or another type of reimbursement for a casualty or theft loss, you must subtract it from the loss when you figure your deduction. 2011 1040 income tax form You cannot deduct the reimbursed part of a casualty or theft loss. 2011 1040 income tax form   For information on casualty or theft losses, see Publication 547, Casualties, Disasters, and Thefts. 2011 1040 income tax form Prev  Up  Next   Home   More Online Publications
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The 2011 1040 Income Tax Form

2011 1040 income tax form Publication 526 - Main Content Table of Contents Organizations That Qualify To Receive Deductible ContributionsTypes of Qualified Organizations Contributions You Can DeductContributions From Which You Benefit Expenses Paid for Student Living With You Out-of-Pocket Expenses in Giving Services Expenses of Whaling Captains Contributions You Cannot DeductContributions to Individuals Contributions to Nonqualified Organizations Contributions From Which You Benefit Value of Time or Services Personal Expenses Appraisal Fees Contributions to Donor-Advised Funds Partial Interest in Property Contributions of PropertyContributions Subject to Special Rules Determining Fair Market Value Giving Property That Has Decreased in Value Giving Property That Has Increased in Value Penalty When To DeductChecks. 2011 1040 income tax form Text message. 2011 1040 income tax form Credit card. 2011 1040 income tax form Pay-by-phone account. 2011 1040 income tax form Stock certificate. 2011 1040 income tax form Promissory note. 2011 1040 income tax form Option. 2011 1040 income tax form Borrowed funds. 2011 1040 income tax form Conditional gift. 2011 1040 income tax form Limits on Deductions50% Limit 30% Limit Special 30% Limit for Capital Gain Property 20% Limit Special 50% Limit for Qualified Conservation Contributions How To Figure Your Deduction When Limits Apply Records To KeepCash Contributions Noncash Contributions Out-of-Pocket Expenses How To ReportReporting expenses for student living with you. 2011 1040 income tax form Total deduction over $500. 2011 1040 income tax form Deduction over $5,000 for one item. 2011 1040 income tax form Vehicle donations. 2011 1040 income tax form Clothing and household items not in good used condition. 2011 1040 income tax form Easement on building in historic district. 2011 1040 income tax form Deduction over $500,000. 2011 1040 income tax form How To Get Tax HelpLow Income Taxpayer Clinics Organizations That Qualify To Receive Deductible Contributions You can deduct your contributions only if you make them to a qualified organization. 2011 1040 income tax form Most organizations, other than churches and governments, must apply to the IRS to become a qualified organization. 2011 1040 income tax form How to check whether an organization can receive deductible charitable contributions. 2011 1040 income tax form   You can ask any organization whether it is a qualified organization, and most will be able to tell you. 2011 1040 income tax form Or go to IRS. 2011 1040 income tax form gov. 2011 1040 income tax form Click on “Tools” and then on “Exempt Organizations Select Check” (www. 2011 1040 income tax form irs. 2011 1040 income tax form gov/Charities-&-Non-Profits/Exempt-Organizations-Select-Check). 2011 1040 income tax form This online tool will enable you to search for qualified organizations. 2011 1040 income tax form You can also call the IRS to find out if an organization is qualified. 2011 1040 income tax form Call 1-877-829-5500. 2011 1040 income tax form People who are deaf, hard of hearing, or have a speech disability and who have access to TTY/TDD equipment can call 1-800-829-4059. 2011 1040 income tax form Deaf or hard of hearing individuals can also contact the IRS through relay services such as the Federal Relay Service at www. 2011 1040 income tax form gsa. 2011 1040 income tax form gov/fedrelay. 2011 1040 income tax form Types of Qualified Organizations Generally, only the following types of organizations can be qualified organizations. 2011 1040 income tax form A community chest, corporation, trust, fund, or foundation organized or created in or under the laws of the United States, any state, the District of Columbia, or any possession of the United States (including Puerto Rico). 2011 1040 income tax form It must, however, be organized and operated only for charitable, religious, scientific, literary, or educational purposes, or for the prevention of cruelty to children or animals. 2011 1040 income tax form Certain organizations that foster national or international amateur sports competition also qualify. 2011 1040 income tax form War veterans' organizations, including posts, auxiliaries, trusts, or foundations, organized in the United States or any of its possessions (including Puerto Rico). 2011 1040 income tax form Domestic fraternal societies, orders, and associations operating under the lodge system. 2011 1040 income tax form (Your contribution to this type of organization is deductible only if it is to be used solely for charitable, religious, scientific, literary, or educational purposes, or for the prevention of cruelty to children or animals. 2011 1040 income tax form ) Certain nonprofit cemetery companies or corporations. 2011 1040 income tax form (Your contribution to this type of organization is not deductible if it can be used for the care of a specific lot or mausoleum crypt. 2011 1040 income tax form ) The United States or any state, the District of Columbia, a U. 2011 1040 income tax form S. 2011 1040 income tax form possession (including Puerto Rico), a political subdivision of a state or U. 2011 1040 income tax form S. 2011 1040 income tax form possession, or an Indian tribal government or any of its subdivisions that perform substantial government functions. 2011 1040 income tax form (Your contribution to this type of organization is deductible only if it is to be used solely for public purposes. 2011 1040 income tax form ) Example 1. 2011 1040 income tax form You contribute cash to your city's police department to be used as a reward for information about a crime. 2011 1040 income tax form The city police department is a qualified organization, and your contribution is for a public purpose. 2011 1040 income tax form You can deduct your contribution. 2011 1040 income tax form Example 2. 2011 1040 income tax form You make a voluntary contribution to the social security trust fund, not earmarked for a specific account. 2011 1040 income tax form Because the trust fund is part of the U. 2011 1040 income tax form S. 2011 1040 income tax form Government, you contributed to a qualified organization. 2011 1040 income tax form You can deduct your contribution. 2011 1040 income tax form Examples. 2011 1040 income tax form   The following list gives some examples of qualified organizations. 2011 1040 income tax form Churches, a convention or association of churches, temples, synagogues, mosques, and other religious organizations. 2011 1040 income tax form Most nonprofit charitable organizations such as the American Red Cross and the United Way. 2011 1040 income tax form Most nonprofit educational organizations, including the Boy Scouts of America, Girl Scouts of America, colleges, and museums. 2011 1040 income tax form This also includes nonprofit daycare centers that provide childcare to the general public if substantially all the childcare is provided to enable parents and guardians to be gainfully employed. 2011 1040 income tax form However, if your contribution is a substitute for tuition or other enrollment fee, it is not deductible as a charitable contribution, as explained later under Contributions You Cannot Deduct . 2011 1040 income tax form Nonprofit hospitals and medical research organizations. 2011 1040 income tax form Utility company emergency energy programs, if the utility company is an agent for a charitable organization that assists individuals with emergency energy needs. 2011 1040 income tax form Nonprofit volunteer fire companies. 2011 1040 income tax form Nonprofit organizations that develop and maintain public parks and recreation facilities. 2011 1040 income tax form Civil defense organizations. 2011 1040 income tax form Canadian charities. 2011 1040 income tax form   You may be able to deduct contributions to certain Canadian charitable organizations covered under an income tax treaty with Canada. 2011 1040 income tax form To deduct your contribution to a Canadian charity, you generally must have income from sources in Canada. 2011 1040 income tax form See Publication 597, Information on the United States-Canada Income Tax Treaty, for information on how to figure your deduction. 2011 1040 income tax form Mexican charities. 2011 1040 income tax form   Under the U. 2011 1040 income tax form S. 2011 1040 income tax form -Mexico income tax treaty, a contribution to a Mexican charitable organization may be deductible, but only if and to the extent the contribution would have been treated as a charitable contribution to a public charity created or organized under U. 2011 1040 income tax form S. 2011 1040 income tax form law. 2011 1040 income tax form To deduct your contribution to a Mexican charity, you must have income from sources in Mexico. 2011 1040 income tax form The limits described in Limits on Deductions , later, apply and are figured using your income from Mexican sources. 2011 1040 income tax form Israeli charities. 2011 1040 income tax form   Under the U. 2011 1040 income tax form S. 2011 1040 income tax form -Israel income tax treaty, a contribution to an Israeli charitable organization is deductible if and to the extent the contribution would have been treated as a charitable contribution if the organization had been created or organized under U. 2011 1040 income tax form S. 2011 1040 income tax form law. 2011 1040 income tax form To deduct your contribution to an Israeli charity, you must have income from sources in Israel. 2011 1040 income tax form The limits described in Limits on Deductions , later, apply. 2011 1040 income tax form The deduction is also limited to 25% of your adjusted gross income from Israeli sources. 2011 1040 income tax form Contributions You Can Deduct Generally, you can deduct contributions of money or property you make to, or for the use of, a qualified organization. 2011 1040 income tax form A contribution is “for the use of” a qualified organization when it is held in a legally enforceable trust for the qualified organization or in a similar legal arrangement. 2011 1040 income tax form The contributions must be made to a qualified organization and not set aside for use by a specific person. 2011 1040 income tax form If you give property to a qualified organization, you generally can deduct the fair market value of the property at the time of the contribution. 2011 1040 income tax form See Contributions of Property , later. 2011 1040 income tax form Your deduction for charitable contributions generally cannot be more than 50% of your adjusted gross income (AGI), but in some cases 20% and 30% limits may apply. 2011 1040 income tax form In addition, the total of your charitable contributions deduction and certain other itemized deductions may be limited. 2011 1040 income tax form See Limits on Deductions , later. 2011 1040 income tax form Table 1 in this publication gives examples of contributions you can and cannot deduct. 2011 1040 income tax form Contributions From Which You Benefit If you receive a benefit as a result of making a contribution to a qualified organization, you can deduct only the amount of your contribution that is more than the value of the benefit you receive. 2011 1040 income tax form Also see Contributions From Which You Benefit under Contributions You Cannot Deduct, later. 2011 1040 income tax form If you pay more than fair market value to a qualified organization for goods or services, the excess may be a charitable contribution. 2011 1040 income tax form For the excess amount to qualify, you must pay it with the intent to make a charitable contribution. 2011 1040 income tax form Example 1. 2011 1040 income tax form You pay $65 for a ticket to a dinner-dance at a church. 2011 1040 income tax form Your entire $65 payment goes to the church. 2011 1040 income tax form The ticket to the dinner-dance has a fair market value of $25. 2011 1040 income tax form When you buy your ticket, you know its value is less than your payment. 2011 1040 income tax form To figure the amount of your charitable contribution, subtract the value of the benefit you receive ($25) from your total payment ($65). 2011 1040 income tax form You can deduct $40 as a charitable contribution to the church. 2011 1040 income tax form Example 2. 2011 1040 income tax form At a fundraising auction conducted by a charity, you pay $600 for a week's stay at a beach house. 2011 1040 income tax form The amount you pay is no more than the fair rental value. 2011 1040 income tax form You have not made a deductible charitable contribution. 2011 1040 income tax form Athletic events. 2011 1040 income tax form   If you make a payment to, or for the benefit of, a college or university and, as a result, you receive the right to buy tickets to an athletic event in the athletic stadium of the college or university, you can deduct 80% of the payment as a charitable contribution. 2011 1040 income tax form   If any part of your payment is for tickets (rather than the right to buy tickets), that part is not deductible. 2011 1040 income tax form Subtract the price of the tickets from your payment. 2011 1040 income tax form You can deduct 80% of the remaining amount as a charitable contribution. 2011 1040 income tax form Example 1. 2011 1040 income tax form You pay $300 a year for membership in a university's athletic scholarship program. 2011 1040 income tax form The only benefit of membership is that you have the right to buy one season ticket for a seat in a designated area of the stadium at the university's home football games. 2011 1040 income tax form You can deduct $240 (80% of $300) as a charitable contribution. 2011 1040 income tax form Example 2. 2011 1040 income tax form The facts are the same as in Example 1 except your $300 payment includes the purchase of one season ticket for the stated ticket price of $120. 2011 1040 income tax form You must subtract the usual price of a ticket ($120) from your $300 payment. 2011 1040 income tax form The result is $180. 2011 1040 income tax form Your deductible charitable contribution is $144 (80% of $180). 2011 1040 income tax form Charity benefit events. 2011 1040 income tax form   If you pay a qualified organization more than fair market value for the right to attend a charity ball, banquet, show, sporting event, or other benefit event, you can deduct only the amount that is more than the value of the privileges or other benefits you receive. 2011 1040 income tax form   If there is an established charge for the event, that charge is the value of your benefit. 2011 1040 income tax form If there is no established charge, the reasonable value of the right to attend the event is the value of your benefit. 2011 1040 income tax form Whether you use the tickets or other privileges has no effect on the amount you can deduct. 2011 1040 income tax form However, if you return the ticket to the qualified organization for resale, you can deduct the entire amount you paid for the ticket. 2011 1040 income tax form    Even if the ticket or other evidence of payment indicates that the payment is a “contribution,” this does not mean you can deduct the entire amount. 2011 1040 income tax form If the ticket shows the price of admission and the amount of the contribution, you can deduct the contribution amount. 2011 1040 income tax form Example. 2011 1040 income tax form You pay $40 to see a special showing of a movie for the benefit of a qualified organization. 2011 1040 income tax form Printed on the ticket is “Contribution–$40. 2011 1040 income tax form ” If the regular price for the movie is $8, your contribution is $32 ($40 payment − $8 regular price). 2011 1040 income tax form Membership fees or dues. 2011 1040 income tax form   You may be able to deduct membership fees or dues you pay to a qualified organization. 2011 1040 income tax form However, you can deduct only the amount that is more than the value of the benefits you receive. 2011 1040 income tax form   You cannot deduct dues, fees, or assessments paid to country clubs and other social organizations. 2011 1040 income tax form They are not qualified organizations. 2011 1040 income tax form Certain membership benefits can be disregarded. 2011 1040 income tax form   Both you and the organization can disregard the following membership benefits if you get them in return for an annual payment of $75 or less. 2011 1040 income tax form Any rights or privileges, other than those discussed under Athletic events , earlier, that you can use frequently while you are a member, such as: Free or discounted admission to the organization's facilities or events, Free or discounted parking, Preferred access to goods or services, and Discounts on the purchase of goods and services. 2011 1040 income tax form Admission, while you are a member, to events open only to members of the organization if the organization reasonably projects that the cost per person (excluding any allocated overhead) is not more than $10. 2011 1040 income tax form 20. 2011 1040 income tax form Token items. 2011 1040 income tax form   You do not have to reduce your contribution by the value of any benefit you receive if both of the following are true. 2011 1040 income tax form You receive only a small item or other benefit of token value. 2011 1040 income tax form The qualified organization correctly determines that the value of the item or benefit you received is not substantial and informs you that you can deduct your payment in full. 2011 1040 income tax form The organization determines whether the value of an item or benefit is substantial by using Revenue Procedures 90-12 and 92-49 and the inflation adjustment in Revenue Procedure 2012–41. 2011 1040 income tax form Written statement. 2011 1040 income tax form   A qualified organization must give you a written statement if you make a payment of more than $75 that is partly a contribution and partly for goods or services. 2011 1040 income tax form The statement must say you can deduct only the amount of your payment that is more than the value of the goods or services you received. 2011 1040 income tax form It must also give you a good faith estimate of the value of those goods or services. 2011 1040 income tax form   The organization can give you the statement either when it solicits or when it receives the payment from you. 2011 1040 income tax form Exception. 2011 1040 income tax form   An organization will not have to give you this statement if one of the following is true. 2011 1040 income tax form The organization is: A governmental organization described in (5) under Types of Qualified Organizations , earlier, or An organization formed only for religious purposes, and the only benefit you receive is an intangible religious benefit (such as admission to a religious ceremony) that generally is not sold in commercial transactions outside the donative context. 2011 1040 income tax form You receive only items whose value is not substantial as described under Token items , earlier. 2011 1040 income tax form You receive only membership benefits that can be disregarded, as described under Membership fees or dues , earlier. 2011 1040 income tax form Expenses Paid for Student Living With You You may be able to deduct some expenses of having a student live with you. 2011 1040 income tax form You can deduct qualifying expenses for a foreign or American student who: Lives in your home under a written agreement between you and a qualified organization (defined later) as part of a program of the organization to provide educational opportunities for the student, Is not your relative (defined later) or dependent (also defined later), and Is a full-time student in the twelfth or any lower grade at a school in the United States. 2011 1040 income tax form You can deduct up to $50 a month for each full calendar month the student lives with you. 2011 1040 income tax form Any month when conditions (1) through (3) above are met for 15 or more days counts as a full month. 2011 1040 income tax form Qualified organization. 2011 1040 income tax form   For these purposes, a qualified organization can be any of the organizations described earlier under Types of Qualified Organizations , except those in (4) and (5). 2011 1040 income tax form For example, if you are providing a home for a student as part of a state or local government program, you cannot deduct your expenses as charitable contributions. 2011 1040 income tax form But see Foster parents under Out-of-Pocket Expenses in Giving Services, later, if you provide the home as a foster parent. 2011 1040 income tax form Relative. 2011 1040 income tax form   The term “relative” means any of the following persons. 2011 1040 income tax form Your child, stepchild, foster child, or a descendant of any of them (for example, your grandchild). 2011 1040 income tax form A legally adopted child is considered your child. 2011 1040 income tax form Your brother, sister, half brother, half sister, stepbrother, or stepsister. 2011 1040 income tax form Your father, mother, grandparent, or other direct ancestor. 2011 1040 income tax form Your stepfather or stepmother. 2011 1040 income tax form A son or daughter of your brother or sister. 2011 1040 income tax form A brother or sister of your father or mother. 2011 1040 income tax form Your son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law, or sister-in-law. 2011 1040 income tax form Dependent. 2011 1040 income tax form   For this purpose, the term “dependent” means: A person you can claim as a dependent, or A person you could have claimed as a dependent except that: He or she received gross income of $3,900 or more, He or she filed a joint return, or You, or your spouse if filing jointly, could be claimed as a dependent on someone else's 2013 return. 2011 1040 income tax form    Foreign students brought to this country under a qualified international education exchange program and placed in American homes for a temporary period generally are not U. 2011 1040 income tax form S. 2011 1040 income tax form residents and cannot be claimed as dependents. 2011 1040 income tax form Qualifying expenses. 2011 1040 income tax form   You may be able to deduct the cost of books, tuition, food, clothing, transportation, medical and dental care, entertainment, and other amounts you actually spend for the well-being of the student. 2011 1040 income tax form Expenses that do not qualify. 2011 1040 income tax form   You cannot deduct depreciation on your home, the fair market value of lodging, and similar items not considered amounts actually spent by you. 2011 1040 income tax form Nor can you deduct general household expenses, such as taxes, insurance, and repairs. 2011 1040 income tax form Reimbursed expenses. 2011 1040 income tax form   In most cases, you cannot claim a charitable contribution deduction if you are compensated or reimbursed for any part of the costs of having a student live with you. 2011 1040 income tax form However, you may be able to claim a charitable contribution deduction for the unreimbursed portion of your expenses if you are reimbursed only for an extraordinary or one-time item, such as a hospital bill or vacation trip, you paid in advance at the request of the student's parents or the sponsoring organization. 2011 1040 income tax form Mutual exchange program. 2011 1040 income tax form   You cannot deduct the costs of a foreign student living in your home under a mutual exchange program through which your child will live with a family in a foreign country. 2011 1040 income tax form Reporting expenses. 2011 1040 income tax form   For a list of what you must file with your return if you deduct expenses for a student living with you, see Reporting expenses for student living with you under How To Report, later. 2011 1040 income tax form Out-of-Pocket Expenses in Giving Services Table 2. 2011 1040 income tax form Volunteers' Questions and Answers If you volunteer for a qualified organization, the following questions and answers may apply to you. 2011 1040 income tax form All of the rules explained in this publication also apply. 2011 1040 income tax form See, in particular, Out-of-Pocket Expenses in Giving Services . 2011 1040 income tax form Question Answer I volunteer 6 hours a week in the office of a qualified organization. 2011 1040 income tax form The receptionist is paid $10 an hour for the same work. 2011 1040 income tax form Can I deduct $60 a week for my time? No, you cannot deduct the value of your time or services. 2011 1040 income tax form  The office is 30 miles from my home. 2011 1040 income tax form Can I deduct any of my car expenses for these trips? Yes, you can deduct the costs of gas and oil that are directly related to getting to and from the place where you volunteer. 2011 1040 income tax form If you do not want to figure your actual costs, you can deduct 14 cents for each mile. 2011 1040 income tax form I volunteer as a Red Cross nurse's aide at a hospital. 2011 1040 income tax form Can I deduct the cost of the uniforms I must wear? Yes, you can deduct the cost of buying and cleaning your uniforms if the hospital is a qualified organization, the uniforms are not suitable for everyday use, and you must wear them when volunteering. 2011 1040 income tax form I pay a babysitter to watch my children while I volunteer for a qualified organization. 2011 1040 income tax form Can I deduct these costs? No, you cannot deduct payments for childcare expenses as a charitable contribution, even if you would be unable to volunteer without childcare. 2011 1040 income tax form (If you have childcare expenses so you can work for pay, see Publication 503, Child and Dependent Care Expenses. 2011 1040 income tax form ) Although you cannot deduct the value of your services given to a qualified organization, you may be able to deduct some amounts you pay in giving services to a qualified organization. 2011 1040 income tax form The amounts must be: Unreimbursed, Directly connected with the services, Expenses you had only because of the services you gave, and Not personal, living, or family expenses. 2011 1040 income tax form Table 2 contains questions and answers that apply to some individuals who volunteer their services. 2011 1040 income tax form Underprivileged youths selected by charity. 2011 1040 income tax form   You can deduct reasonable unreimbursed out-of-pocket expenses you pay to allow underprivileged youths to attend athletic events, movies, or dinners. 2011 1040 income tax form The youths must be selected by a charitable organization whose goal is to reduce juvenile delinquency. 2011 1040 income tax form Your own similar expenses in accompanying the youths are not deductible. 2011 1040 income tax form Conventions. 2011 1040 income tax form   If a qualified organization selects you to attend a convention as its representative, you can deduct your unreimbursed expenses for travel, including reasonable amounts for meals and lodging, while away from home overnight for the convention. 2011 1040 income tax form However, see Travel , later. 2011 1040 income tax form   You cannot deduct personal expenses for sightseeing, fishing parties, theater tickets, or nightclubs. 2011 1040 income tax form You also cannot deduct travel, meals and lodging, and other expenses for your spouse or children. 2011 1040 income tax form   You cannot deduct your travel expenses in attending a church convention if you go only as a member of your church rather than as a chosen representative. 2011 1040 income tax form You can, however, deduct unreimbursed expenses that are directly connected with giving services for your church during the convention. 2011 1040 income tax form Uniforms. 2011 1040 income tax form   You can deduct the cost and upkeep of uniforms that are not suitable for everyday use and that you must wear while performing donated services for a charitable organization. 2011 1040 income tax form Foster parents. 2011 1040 income tax form   You may be able to deduct as a charitable contribution some of the costs of being a foster parent (foster care provider) if you have no profit motive in providing the foster care and are not, in fact, making a profit. 2011 1040 income tax form A qualified organization must select the individuals you take into your home for foster care. 2011 1040 income tax form   You can deduct expenses that meet both of the following requirements. 2011 1040 income tax form They are unreimbursed out-of-pocket expenses to feed, clothe, and care for the foster child. 2011 1040 income tax form They are incurred primarily to benefit the qualified organization. 2011 1040 income tax form   Unreimbursed expenses that you cannot deduct as charitable contributions may be considered support provided by you in determining whether you can claim the foster child as a dependent. 2011 1040 income tax form For details, see Publication 501, Exemptions, Standard Deduction, and Filing Information. 2011 1040 income tax form Example. 2011 1040 income tax form You cared for a foster child because you wanted to adopt her, not to benefit the agency that placed her in your home. 2011 1040 income tax form Your unreimbursed expenses are not deductible as charitable contributions. 2011 1040 income tax form Church deacon. 2011 1040 income tax form   You can deduct as a charitable contribution any unreimbursed expenses you have while in a permanent diaconate program established by your church. 2011 1040 income tax form These expenses include the cost of vestments, books, and transportation required in order to serve in the program as either a deacon candidate or an ordained deacon. 2011 1040 income tax form Car expenses. 2011 1040 income tax form   You can deduct as a charitable contribution any unreimbursed out-of-pocket expenses, such as the cost of gas and oil, directly related to the use of your car in giving services to a charitable organization. 2011 1040 income tax form You cannot deduct general repair and maintenance expenses, depreciation, registration fees, or the costs of tires or insurance. 2011 1040 income tax form   If you do not want to deduct your actual expenses, you can use a standard mileage rate of 14 cents a mile to figure your contribution. 2011 1040 income tax form   You can deduct parking fees and tolls whether you use your actual expenses or the standard mileage rate. 2011 1040 income tax form   You must keep reliable written records of your car expenses. 2011 1040 income tax form For more information, see Car expenses under Records To Keep, later. 2011 1040 income tax form Travel. 2011 1040 income tax form   Generally, you can claim a charitable contribution deduction for travel expenses necessarily incurred while you are away from home performing services for a charitable organization only if there is no significant element of personal pleasure, recreation, or vacation in the travel. 2011 1040 income tax form This applies whether you pay the expenses directly or indirectly. 2011 1040 income tax form You are paying the expenses indirectly if you make a payment to the charitable organization and the organization pays for your travel expenses. 2011 1040 income tax form   The deduction for travel expenses will not be denied simply because you enjoy providing services to the charitable organization. 2011 1040 income tax form Even if you enjoy the trip, you can take a charitable contribution deduction for your travel expenses if you are on duty in a genuine and substantial sense throughout the trip. 2011 1040 income tax form However, if you have only nominal duties, or if for significant parts of the trip you do not have any duties, you cannot deduct your travel expenses. 2011 1040 income tax form Example 1. 2011 1040 income tax form You are a troop leader for a tax-exempt youth group and you take the group on a camping trip. 2011 1040 income tax form You are responsible for overseeing the setup of the camp and for providing adult supervision for other activities during the entire trip. 2011 1040 income tax form You participate in the activities of the group and enjoy your time with them. 2011 1040 income tax form You oversee the breaking of camp and you transport the group home. 2011 1040 income tax form You can deduct your travel expenses. 2011 1040 income tax form Example 2. 2011 1040 income tax form You sail from one island to another and spend 8 hours a day counting whales and other forms of marine life. 2011 1040 income tax form The project is sponsored by a charitable organization. 2011 1040 income tax form In most circumstances, you cannot deduct your expenses. 2011 1040 income tax form Example 3. 2011 1040 income tax form You work for several hours each morning on an archeological dig sponsored by a charitable organization. 2011 1040 income tax form The rest of the day is free for recreation and sightseeing. 2011 1040 income tax form You cannot take a charitable contribution deduction even though you work very hard during those few hours. 2011 1040 income tax form Example 4. 2011 1040 income tax form You spend the entire day attending a charitable organization's regional meeting as a chosen representative. 2011 1040 income tax form In the evening you go to the theater. 2011 1040 income tax form You can claim your travel expenses as charitable contributions, but you cannot claim the cost of your evening at the theater. 2011 1040 income tax form Daily allowance (per diem). 2011 1040 income tax form   If you provide services for a charitable organization and receive a daily allowance to cover reasonable travel expenses, including meals and lodging while away from home overnight, you must include in income any part of the allowance that is more than your deductible travel expenses. 2011 1040 income tax form You may be able to deduct any necessary travel expenses that are more than the allowance. 2011 1040 income tax form Deductible travel expenses. 2011 1040 income tax form   These include: Air, rail, and bus transportation, Out-of-pocket expenses for your car, Taxi fares or other costs of transportation between the airport or station and your hotel, Lodging costs, and The cost of meals. 2011 1040 income tax form Because these travel expenses are not business-related, they are not subject to the same limits as business related expenses. 2011 1040 income tax form For information on business travel expenses, see Travel in Publication 463, Travel, Entertainment, Gift, and Car Expenses. 2011 1040 income tax form Expenses of Whaling Captains You may be able to deduct as a charitable contribution any reasonable and necessary whaling expenses you pay during the year to carry out sanctioned whaling activities. 2011 1040 income tax form The deduction is limited to $10,000 a year. 2011 1040 income tax form To claim the deduction, you must be recognized by the Alaska Eskimo Whaling Commission as a whaling captain charged with the responsibility of maintaining and carrying out sanctioned whaling activities. 2011 1040 income tax form Sanctioned whaling activities are subsistence bowhead whale hunting activities conducted under the management plan of the Alaska Eskimo Whaling Commission. 2011 1040 income tax form Whaling expenses include expenses for: Acquiring and maintaining whaling boats, weapons, and gear used in sanctioned whaling activities, Supplying food for the crew and other provisions for carrying out these activities, and Storing and distributing the catch from these activities. 2011 1040 income tax form You must keep records showing the time, place, date, amount, and nature of the expenses. 2011 1040 income tax form For details, see Revenue Procedure 2006-50, which is on page 944 of Internal Revenue Bulletin 2006-47 at www. 2011 1040 income tax form irs. 2011 1040 income tax form gov/pub/irs-irbs/irb06-47. 2011 1040 income tax form pdf. 2011 1040 income tax form Contributions You Cannot Deduct There are some contributions you cannot deduct and others you can deduct only in part. 2011 1040 income tax form You cannot deduct as a charitable contribution: A contribution to a specific individual, A contribution to a nonqualified organization, The part of a contribution from which you receive or expect to receive a benefit, The value of your time or services, Your personal expenses, A qualified charitable distribution from an individual retirement arrangement (IRA), Appraisal fees, Certain contributions to donor-advised funds, or Certain contributions of partial interests in property. 2011 1040 income tax form Detailed discussions of these items follow. 2011 1040 income tax form Contributions to Individuals You cannot deduct contributions to specific individuals, including the following. 2011 1040 income tax form Contributions to fraternal societies made for the purpose of paying medical or burial expenses of members. 2011 1040 income tax form Contributions to individuals who are needy or worthy. 2011 1040 income tax form You cannot deduct these contributions even if you make them to a qualified organization for the benefit of a specific person. 2011 1040 income tax form But you can deduct a contribution to a qualified organization that helps needy or worthy individuals if you do not indicate that your contribution is for a specific person. 2011 1040 income tax form Example. 2011 1040 income tax form You can deduct contributions to a qualified organization for flood relief, hurricane relief, or other disaster relief. 2011 1040 income tax form However, you cannot deduct contributions earmarked for relief of a particular individual or family. 2011 1040 income tax form Payments to a member of the clergy that can be spent as he or she wishes, such as for personal expenses. 2011 1040 income tax form Expenses you paid for another person who provided services to a qualified organization. 2011 1040 income tax form Example. 2011 1040 income tax form Your son does missionary work. 2011 1040 income tax form You pay his expenses. 2011 1040 income tax form You cannot claim a deduction for your son's unreimbursed expenses related to his contribution of services. 2011 1040 income tax form Payments to a hospital that are for a specific patient's care or for services for a specific patient. 2011 1040 income tax form You cannot deduct these payments even if the hospital is operated by a city, state, or other qualified organization. 2011 1040 income tax form Contributions to Nonqualified Organizations You cannot deduct contributions to organizations that are not qualified to receive tax-deductible contributions, including the following. 2011 1040 income tax form Certain state bar associations if: The bar is not a political subdivision of a state, The bar has private, as well as public, purposes, such as promoting the professional interests of members, and Your contribution is unrestricted and can be used for private purposes. 2011 1040 income tax form Chambers of commerce and other business leagues or organizations. 2011 1040 income tax form Civic leagues and associations. 2011 1040 income tax form Communist organizations. 2011 1040 income tax form Country clubs and other social clubs. 2011 1040 income tax form Foreign organizations other than certain Canadian, Israeli, or Mexican charitable organizations. 2011 1040 income tax form (See Canadian charities , Mexican charities , and Israeli charities under Organizations That Qualify To Receive Deductible Contributions, earlier. 2011 1040 income tax form ) Also, you cannot deduct a contribution you made to any qualifying organization if the contribution is earmarked to go to a foreign organization. 2011 1040 income tax form However, certain contributions to a qualified organization for use in a program conducted by a foreign charity may be deductible as long as they are not earmarked to go to the foreign charity. 2011 1040 income tax form For the contribution to be deductible, the qualified organization must approve the program as furthering its own exempt purposes and must keep control over the use of the contributed funds. 2011 1040 income tax form The contribution is also deductible if the foreign charity is only an administrative arm of the qualified organization. 2011 1040 income tax form Homeowners' associations. 2011 1040 income tax form Labor unions. 2011 1040 income tax form But you may be able to deduct union dues as a miscellaneous itemized deduction, subject to the 2%-of-adjusted-gross-income limit, on Schedule A (Form 1040). 2011 1040 income tax form See Publication 529, Miscellaneous Deductions. 2011 1040 income tax form Political organizations and candidates. 2011 1040 income tax form Contributions From Which You Benefit If you receive or expect to receive a financial or economic benefit as a result of making a contribution to a qualified organization, you cannot deduct the part of the contribution that represents the value of the benefit you receive. 2011 1040 income tax form See Contributions From Which You Benefit under Contributions You Can Deduct, earlier. 2011 1040 income tax form These contributions include the following. 2011 1040 income tax form Contributions for lobbying. 2011 1040 income tax form This includes amounts you earmark for use in, or in connection with, influencing specific legislation. 2011 1040 income tax form Contributions to a retirement home for room, board, maintenance, or admittance. 2011 1040 income tax form Also, if the amount of your contribution depends on the type or size of apartment you will occupy, it is not a charitable contribution. 2011 1040 income tax form Costs of raffles, bingo, lottery, etc. 2011 1040 income tax form You cannot deduct as a charitable contribution amounts you pay to buy raffle or lottery tickets or to play bingo or other games of chance. 2011 1040 income tax form For information on how to report gambling winnings and losses, see Deductions Not Subject to the 2% Limit in Publication 529. 2011 1040 income tax form Dues to fraternal orders and similar groups. 2011 1040 income tax form However, see Membership fees or dues under Contributions From Which You Benefit, earlier. 2011 1040 income tax form Tuition, or amounts you pay instead of tuition. 2011 1040 income tax form You cannot deduct as a charitable contribution amounts you pay as tuition even if you pay them for children to attend parochial schools or qualifying nonprofit daycare centers. 2011 1040 income tax form You also cannot deduct any fixed amount you must pay in addition to, or instead of, tuition to enroll in a private school, even if it is designated as a “donation. 2011 1040 income tax form ” Contributions connected with split-dollar insurance arrangements. 2011 1040 income tax form You cannot deduct any part of a contribution to a charitable organization if, in connection with the contribution, the organization directly or indirectly pays, has paid, or is expected to pay any premium on any life insurance, annuity, or endowment contract for which you, any member of your family, or any other person chosen by you (other than a qualified charitable organization) is a beneficiary. 2011 1040 income tax form Example. 2011 1040 income tax form You donate money to a charitable organization. 2011 1040 income tax form The charity uses the money to purchase a cash value life insurance policy. 2011 1040 income tax form The beneficiaries under the insurance policy include members of your family. 2011 1040 income tax form Even though the charity may eventually get some benefit out of the insurance policy, you cannot deduct any part of the donation. 2011 1040 income tax form Qualified Charitable Distributions A qualified charitable distribution (QCD) is a distribution made directly by the trustee of your individual retirement arrangement (IRA), other than a SEP or SIMPLE IRA, to certain qualified organizations. 2011 1040 income tax form You must have been at least age 70½ when the distribution was made. 2011 1040 income tax form Your total QCDs for the year cannot be more than $100,000. 2011 1040 income tax form If all the requirements are met, a QCD is nontaxable, but you cannot claim a charitable contribution deduction for a QCD. 2011 1040 income tax form See Publication 590, Individual Retirement Arrangements (IRAs), for more information about QCDs. 2011 1040 income tax form Value of Time or Services You cannot deduct the value of your time or services, including: Blood donations to the American Red Cross or to blood banks, and The value of income lost while you work as an unpaid volunteer for a qualified organization. 2011 1040 income tax form Personal Expenses You cannot deduct personal, living, or family expenses, such as the following items. 2011 1040 income tax form The cost of meals you eat while you perform services for a qualified organization, unless it is necessary for you to be away from home overnight while performing the services. 2011 1040 income tax form Adoption expenses, including fees paid to an adoption agency and the costs of keeping a child in your home before adoption is final. 2011 1040 income tax form However, you may be able to claim a tax credit for these expenses. 2011 1040 income tax form Also, you may be able to exclude from your gross income amounts paid or reimbursed by your employer for your adoption expenses. 2011 1040 income tax form See Form 8839, Qualified Adoption Expenses, and its instructions, for more information. 2011 1040 income tax form You also may be able to claim an exemption for the child. 2011 1040 income tax form See Exemptions for Dependents in Publication 501 for more information. 2011 1040 income tax form Appraisal Fees You cannot deduct as a charitable contribution any fees you pay to find the fair market value of donated property. 2011 1040 income tax form But you can claim them, subject to the 2%-of-adjusted-gross-income limit, as a miscellaneous itemized deduction on Schedule A (Form 1040). 2011 1040 income tax form See Deductions Subject to the 2% Limit in Publication 529 for more information. 2011 1040 income tax form Contributions to Donor-Advised Funds You cannot deduct a contribution to a donor-advised fund if: The qualified organization that sponsors the fund is a war veterans' organization, a fraternal society, or a nonprofit cemetery company, or You do not have an acknowledgment from that sponsoring organization that it has exclusive legal control over the assets contributed. 2011 1040 income tax form There are also other circumstances in which you cannot deduct your contribution to a donor-advised fund. 2011 1040 income tax form Generally, a donor-advised fund is a fund or account in which a donor can, because of being a donor, advise the fund how to distribute or invest amounts held in the fund. 2011 1040 income tax form For details, see Internal Revenue Code section 170(f)(18). 2011 1040 income tax form Partial Interest in Property Generally, you cannot deduct a contribution of less than your entire interest in property. 2011 1040 income tax form For details, see Partial Interest in Property under Contributions of Property, later. 2011 1040 income tax form Contributions of Property If you contribute property to a qualified organization, the amount of your charitable contribution is generally the fair market value of the property at the time of the contribution. 2011 1040 income tax form However, if the property has increased in value, you may have to make some adjustments to the amount of your deduction. 2011 1040 income tax form See Giving Property That Has Increased in Value , later. 2011 1040 income tax form For information about the records you must keep and the information you must furnish with your return if you donate property, see Records To Keep and How To Report , later. 2011 1040 income tax form Contributions Subject to Special Rules Special rules apply if you contribute: Clothing or household items, A car, boat, or airplane, Taxidermy property, Property subject to a debt, A partial interest in property, A fractional interest in tangible personal property, A qualified conservation contribution, A future interest in tangible personal property, Inventory from your business, or A patent or other intellectual property. 2011 1040 income tax form These special rules are described next. 2011 1040 income tax form Clothing and Household Items You cannot take a deduction for clothing or household items you donate unless the clothing or household items are in good used condition or better. 2011 1040 income tax form Exception. 2011 1040 income tax form   You can take a deduction for a contribution of an item of clothing or a household item that is not in good used condition or better if you deduct more than $500 for it and include a qualified appraisal of it with your return. 2011 1040 income tax form Household items. 2011 1040 income tax form   Household items include: Furniture and furnishings, Electronics, Appliances, Linens, and Other similar items. 2011 1040 income tax form   Household items do not include: Food, Paintings, antiques, and other objects of art, Jewelry and gems, and Collections. 2011 1040 income tax form Fair market value. 2011 1040 income tax form   To determine the fair market value of these items, use the rules under Determining Fair Market Value , later. 2011 1040 income tax form Cars, Boats, and Airplanes The following rules apply to any donation of a qualified vehicle. 2011 1040 income tax form A qualified vehicle is: A car or any motor vehicle manufactured mainly for use on public streets, roads, and highways, A boat, or An airplane. 2011 1040 income tax form Deduction more than $500. 2011 1040 income tax form   If you donate a qualified vehicle with a claimed fair market value of more than $500, you can deduct the smaller of: The gross proceeds from the sale of the vehicle by the organization, or The vehicle's fair market value on the date of the contribution. 2011 1040 income tax form If the vehicle's fair market value was more than your cost or other basis, you may have to reduce the fair market value to figure the deductible amount, as described under Giving Property That Has Increased in Value , later. 2011 1040 income tax form Form 1098-C. 2011 1040 income tax form   You must attach to your return Copy B of the Form 1098-C, Contributions of Motor Vehicles, Boats, and Airplanes, (or other statement containing the same information as Form 1098-C) you received from the organization. 2011 1040 income tax form The Form 1098-C (or other statement) will show the gross proceeds from the sale of the vehicle. 2011 1040 income tax form   If you e-file your return, you must: Attach Copy B of Form 1098-C to Form 8453, U. 2011 1040 income tax form S. 2011 1040 income tax form Individual Income Tax Transmittal for an IRS e-file Return, and mail the forms to the IRS, or Include Copy B of Form 1098-C as a pdf attachment if your software program allows it. 2011 1040 income tax form   If you do not attach Form 1098-C (or other statement), you cannot deduct your contribution. 2011 1040 income tax form    You must get Form 1098-C (or other statement) within 30 days of the sale of the vehicle. 2011 1040 income tax form But if exception 1 or 2 (described later) applies, you must get Form 1098-C (or other statement) within 30 days of your donation. 2011 1040 income tax form Filing deadline approaching and still no Form 1098-C. 2011 1040 income tax form   If the filing deadline is approaching and you still do not have a Form 1098-C, you have two choices. 2011 1040 income tax form Request an automatic 6-month extension of time to file your return. 2011 1040 income tax form You can get this extension by filing Form 4868, Application for Automatic Extension of Time To File U. 2011 1040 income tax form S. 2011 1040 income tax form Individual Income Tax Return. 2011 1040 income tax form For more information, see the instructions for Form 4868. 2011 1040 income tax form File the return on time without claiming the deduction for the qualified vehicle. 2011 1040 income tax form After receiving the Form 1098-C, file an amended return, Form 1040X, Amended U. 2011 1040 income tax form S. 2011 1040 income tax form Individual Income Tax Return, claiming the deduction. 2011 1040 income tax form Attach Copy B of Form 1098-C (or other statement) to the amended return. 2011 1040 income tax form Exceptions. 2011 1040 income tax form   There are two exceptions to the rules just described for deductions of more than $500. 2011 1040 income tax form Exception 1—vehicle used or improved by organization. 2011 1040 income tax form   If the qualified organization makes a significant intervening use of or material improvement to the vehicle before transferring it, you generally can deduct the vehicle's fair market value at the time of the contribution. 2011 1040 income tax form But if the vehicle's fair market value was more than your cost or other basis, you may have to reduce the fair market value to get the deductible amount, as described under Giving Property That Has Increased in Value , later. 2011 1040 income tax form The Form 1098-C (or other statement) will show whether this exception applies. 2011 1040 income tax form    Exception 2—vehicle given or sold to needy individual. 2011 1040 income tax form   If the qualified organization will give the vehicle, or sell it for a price well below fair market value, to a needy individual to further the organization's charitable purpose, you generally can deduct the vehicle's fair market value at the time of the contribution. 2011 1040 income tax form But if the vehicle's fair market value was more than your cost or other basis, you may have to reduce the fair market value to get the deductible amount, as described under Giving Property That Has Increased in Value , later. 2011 1040 income tax form The Form 1098-C (or other statement) will show whether this exception applies. 2011 1040 income tax form   This exception does not apply if the organization sells the vehicle at auction. 2011 1040 income tax form In that case, you cannot deduct the vehicle's fair market value. 2011 1040 income tax form Example. 2011 1040 income tax form Anita donates a used car to a qualified organization. 2011 1040 income tax form She bought it 3 years ago for $9,000. 2011 1040 income tax form A used car guide shows the fair market value for this type of car is $6,000. 2011 1040 income tax form However, Anita gets a Form 1098-C from the organization showing the car was sold for $2,900. 2011 1040 income tax form Neither exception 1 nor exception 2 applies. 2011 1040 income tax form If Anita itemizes her deductions, she can deduct $2,900 for her donation. 2011 1040 income tax form She must attach Form 1098-C and Form 8283 to her return. 2011 1040 income tax form Deduction $500 or less. 2011 1040 income tax form   If the qualified organization sells the vehicle for $500 or less and exceptions 1 and 2 do not apply, you can deduct the smaller of: $500, or The vehicle's fair market value on the date of the contribution. 2011 1040 income tax form But if the vehicle's fair market value was more than your cost or other basis, you may have to reduce the fair market value to get the deductible amount, as described under Giving Property That Has Increased in Value , later. 2011 1040 income tax form   If the vehicle's fair market value is at least $250 but not more than $500, you must have a written statement from the qualified organization acknowledging your donation. 2011 1040 income tax form The statement must contain the information and meet the tests for an acknowledgment described under Contributions of $250 or More under Records To Keep, later. 2011 1040 income tax form Fair market value. 2011 1040 income tax form   To determine a vehicle's fair market value, use the rules described under Determining Fair Market Value , later. 2011 1040 income tax form Donations of inventory. 2011 1040 income tax form   The vehicle donation rules just described do not apply to donations of inventory. 2011 1040 income tax form For example, these rules do not apply if you are a car dealer who donates a car you had been holding for sale to customers. 2011 1040 income tax form See Inventory , later. 2011 1040 income tax form Taxidermy Property If you donate taxidermy property to a qualified organization, your deduction is limited to your basis in the property or its fair market value, whichever is less. 2011 1040 income tax form This applies if you prepared, stuffed, or mounted the property or paid or incurred the cost of preparing, stuffing, or mounting the property. 2011 1040 income tax form Your basis for this purpose includes only the cost of preparing, stuffing, and mounting the property. 2011 1040 income tax form Your basis does not include transportation or travel costs. 2011 1040 income tax form It also does not include the direct or indirect costs for hunting or killing an animal, such as equipment costs. 2011 1040 income tax form In addition, it does not include the value of your time. 2011 1040 income tax form Taxidermy property means any work of art that: Is the reproduction or preservation of an animal, in whole or in part, Is prepared, stuffed, or mounted to recreate one or more characteristics of the animal, and Contains a part of the body of the dead animal. 2011 1040 income tax form Property Subject to a Debt If you contribute property subject to a debt (such as a mortgage), you must reduce the fair market value of the property by: Any allowable deduction for interest you paid (or will pay) that is attributable to any period after the contribution, and If the property is a bond, the lesser of: Any allowable deduction for interest you paid (or will pay) to buy or carry the bond that is attributable to any period before the contribution, or The interest, including bond discount, receivable on the bond that is attributable to any period before the contribution, and that is not includible in your income due to your accounting method. 2011 1040 income tax form This prevents you from deducting the same amount as both investment interest and a charitable contribution. 2011 1040 income tax form If the recipient (or another person) assumes the debt, you must also reduce the fair market value of the property by the amount of the outstanding debt assumed. 2011 1040 income tax form The amount of the debt is also treated as an amount realized on the sale or exchange of property for purposes of figuring your taxable gain (if any). 2011 1040 income tax form For more information, see Bargain Sales under Giving Property That Has Increased in Value, later. 2011 1040 income tax form Partial Interest in Property Generally, you cannot deduct a charitable contribution of less than your entire interest in property. 2011 1040 income tax form Right to use property. 2011 1040 income tax form   A contribution of the right to use property is a contribution of less than your entire interest in that property and is not deductible. 2011 1040 income tax form Example 1. 2011 1040 income tax form You own a 10-story office building and donate rent-free use of the top floor to a charitable organization. 2011 1040 income tax form Because you still own the building, you have contributed a partial interest in the property and cannot take a deduction for the contribution. 2011 1040 income tax form Example 2. 2011 1040 income tax form Mandy White owns a vacation home at the beach that she sometimes rents to others. 2011 1040 income tax form For a fund-raising auction at her church, she donated the right to use the vacation home for 1 week. 2011 1040 income tax form At the auction, the church received and accepted a bid from Lauren Green equal to the fair rental value of the home for 1 week. 2011 1040 income tax form Mandy cannot claim a deduction because of the partial interest rule. 2011 1040 income tax form Lauren cannot claim a deduction either, because she received a benefit equal to the amount of her payment. 2011 1040 income tax form See Contributions From Which You Benefit , earlier. 2011 1040 income tax form Exceptions. 2011 1040 income tax form   You can deduct a charitable contribution of a partial interest in property only if that interest represents one of the following items. 2011 1040 income tax form A remainder interest in your personal home or farm. 2011 1040 income tax form A remainder interest is one that passes to a beneficiary after the end of an earlier interest in the property. 2011 1040 income tax form Example. 2011 1040 income tax form You keep the right to live in your home during your lifetime and give your church a remainder interest that begins upon your death. 2011 1040 income tax form You can deduct the value of the remainder interest. 2011 1040 income tax form An undivided part of your entire interest. 2011 1040 income tax form This must consist of a part of every substantial interest or right you own in the property and must last as long as your interest in the property lasts. 2011 1040 income tax form But see Fractional Interest in Tangible Personal Property , later. 2011 1040 income tax form Example. 2011 1040 income tax form You contribute voting stock to a qualified organization but keep the right to vote the stock. 2011 1040 income tax form The right to vote is a substantial right in the stock. 2011 1040 income tax form You have not contributed an undivided part of your entire interest and cannot deduct your contribution. 2011 1040 income tax form A partial interest that would be deductible if transferred to certain types of trusts. 2011 1040 income tax form A qualified conservation contribution (defined later). 2011 1040 income tax form For information about how to figure the value of a contribution of a partial interest in property, see Partial Interest in Property Not in Trust in Publication 561. 2011 1040 income tax form Fractional Interest in Tangible Personal Property You cannot deduct a charitable contribution of a fractional interest in tangible personal property unless all interests in the property are held immediately before the contribution by: You, or You and the qualifying organization receiving the contribution. 2011 1040 income tax form If you make an additional contribution later, the fair market value of that contribution will be determined by using the smaller of: The fair market value of the property at the time of the initial contribution, or The fair market value of the property at the time of the additional contribution. 2011 1040 income tax form Tangible personal property is defined later under Future Interest in Tangible Personal Property . 2011 1040 income tax form A fractional interest in property is an undivided portion of your entire interest in the property. 2011 1040 income tax form Example. 2011 1040 income tax form An undivided one-quarter interest in a painting that entitles an art museum to possession of the painting for 3 months of each year is a fractional interest in the property. 2011 1040 income tax form Recapture of deduction. 2011 1040 income tax form   You must recapture your charitable contribution deduction by including it in your income if both of the following statements are true. 2011 1040 income tax form You contributed a fractional interest in tangible personal property after August 17, 2006. 2011 1040 income tax form You do not contribute the rest of your interests in the property to the original recipient or, if it no longer exists, another qualified organization on or before the earlier of: The date that is 10 years after the date of the initial contribution, or The date of your death. 2011 1040 income tax form   Recapture is also required if the qualified organization has not taken substantial physical possession of the property and used it in a way related to the organization's purpose during the period beginning on the date of the initial contribution and ending on the earlier of: The date that is 10 years after the date of the initial contribution, or The date of your death. 2011 1040 income tax form Additional tax. 2011 1040 income tax form   If you must recapture your deduction, you must also pay interest and an additional tax equal to 10% of the amount recaptured. 2011 1040 income tax form Qualified Conservation Contribution A qualified conservation contribution is a contribution of a qualified real property interest to a qualified organization to be used only for conservation purposes. 2011 1040 income tax form Qualified organization. 2011 1040 income tax form   For purposes of a qualified conservation contribution, a qualified organization is: A governmental unit, A publicly supported charity, or An organization controlled by, and operated for the exclusive benefit of, a governmental unit or a publicly supported charity. 2011 1040 income tax form The organization also must have a commitment to protect the conservation purposes of the donation and must have the resources to enforce the restrictions. 2011 1040 income tax form   A publicly supported charity is an organization of the type described in (1) under Types of Qualified Organizations , earlier, that normally receives a substantial part of its support, other than income from its exempt activities, from direct or indirect contributions from the general public or from governmental units. 2011 1040 income tax form Qualified real property interest. 2011 1040 income tax form   This is any of the following interests in real property. 2011 1040 income tax form Your entire interest in real estate other than a mineral interest (subsurface oil, gas, or other minerals, and the right of access to these minerals). 2011 1040 income tax form A remainder interest. 2011 1040 income tax form A restriction (granted in perpetuity) on the use that may be made of the real property. 2011 1040 income tax form Conservation purposes. 2011 1040 income tax form   Your contribution must be made only for one of the following conservation purposes. 2011 1040 income tax form Preserving land areas for outdoor recreation by, or for the education of, the general public. 2011 1040 income tax form Protecting a relatively natural habitat of fish, wildlife, or plants, or a similar ecosystem. 2011 1040 income tax form Preserving open space, including farmland and forest land, if it yields a significant public benefit. 2011 1040 income tax form The open space must be preserved either for the scenic enjoyment of the general public or under a clearly defined federal, state, or local governmental conservation policy. 2011 1040 income tax form Preserving a historically important land area or a certified historic structure. 2011 1040 income tax form Building in registered historic district. 2011 1040 income tax form   If a building in a registered historic district is a certified historic structure, a contribution of a qualified real property interest that is an easement or other restriction on the exterior of the building is deductible only if it meets all of the following conditions. 2011 1040 income tax form The restriction must preserve the entire exterior of the building (including its front, sides, rear, and height) and must prohibit any change to the exterior of the building that is inconsistent with its historical character. 2011 1040 income tax form You and the organization receiving the contribution must enter into a written agreement certifying, under penalty of perjury, that the organization: Is a qualified organization with a purpose of environmental protection, land conservation, open space preservation, or historic preservation, and Has the resources to manage and enforce the restriction and a commitment to do so. 2011 1040 income tax form You must include with your return: A qualified appraisal, Photographs of the building's entire exterior, and A description of all restrictions on development of the building, such as zoning laws and restrictive covenants. 2011 1040 income tax form   If you claimed the rehabilitation credit for the building for any of the 5 years before the year of the contribution, your charitable deduction is reduced. 2011 1040 income tax form For more information, see Form 3468, Investment Credit, and Internal Revenue Code section 170(f)(14). 2011 1040 income tax form   If you claim a deduction of more than $10,000, your deduction will not be allowed unless you pay a $500 filing fee. 2011 1040 income tax form See Form 8283-V, Payment Voucher for Filing Fee Under Section 170(f)(13), and its instructions. 2011 1040 income tax form You may be able to deduct the filing fee as a miscellaneous itemized deduction, subject to the 2%-of-adjusted-gross-income limit, on Schedule A (Form 1040). 2011 1040 income tax form See Deductions Subject to the 2% Limit in Publication 529 for more information. 2011 1040 income tax form More information. 2011 1040 income tax form   For information about determining the fair market value of qualified conservation contributions, see Publication 561. 2011 1040 income tax form For information about the limits that apply to deductions for this type of contribution, see Limits on Deductions , later. 2011 1040 income tax form For more information about qualified conservation contributions, see Regulations section 1. 2011 1040 income tax form 170A-14. 2011 1040 income tax form Future Interest in Tangible Personal Property You cannot deduct the value of a charitable contribution of a future interest in tangible personal property until all intervening interests in and rights to the actual possession or enjoyment of the property have either expired or been turned over to someone other than yourself, a related person, or a related organization. 2011 1040 income tax form But see Fractional Interest in Tangible Personal Property , earlier, and Tangible personal property put to unrelated use , later. 2011 1040 income tax form Related persons include your spouse, children, grandchildren, brothers, sisters, and parents. 2011 1040 income tax form Related organizations may include a partnership or corporation in which you have an interest, or an estate or trust with which you have a connection. 2011 1040 income tax form Tangible personal property. 2011 1040 income tax form   This is any property, other than land or buildings, that can be seen or touched. 2011 1040 income tax form It includes furniture, books, jewelry, paintings, and cars. 2011 1040 income tax form Future interest. 2011 1040 income tax form   This is any interest that is to begin at some future time, regardless of whether it is designated as a future interest under state law. 2011 1040 income tax form Example. 2011 1040 income tax form You own an antique car that you contribute to a museum. 2011 1040 income tax form You give up ownership, but retain the right to keep the car in your garage with your personal collection. 2011 1040 income tax form Because you keep an interest in the property, you cannot deduct the contribution. 2011 1040 income tax form If you turn the car over to the museum in a later year, giving up all rights to its use, possession, and enjoyment, you can take a deduction for the contribution in that later year. 2011 1040 income tax form Inventory If you contribute inventory (property you sell in the course of your business), the amount you can deduct is the smaller of its fair market value on the day you contributed it or its basis. 2011 1040 income tax form The basis of contributed inventory is any cost incurred for the inventory in an earlier year that you would otherwise include in your opening inventory for the year of the contribution. 2011 1040 income tax form You must remove the amount of your charitable contribution deduction from your opening inventory. 2011 1040 income tax form It is not part of the cost of goods sold. 2011 1040 income tax form If the cost of donated inventory is not included in your opening inventory, the inventory's basis is zero and you cannot claim a charitable contribution deduction. 2011 1040 income tax form Treat the inventory's cost as you would ordinarily treat it under your method of accounting. 2011 1040 income tax form For example, include the purchase price of inventory bought and donated in the same year in the cost of goods sold for that year. 2011 1040 income tax form A special rule applies to certain donations of food inventory. 2011 1040 income tax form See Food Inventory, later. 2011 1040 income tax form Patents and Other Intellectual Property If you donate intellectual property to a qualified organization, your deduction is limited to the basis of the property or the fair market value of the property, whichever is smaller. 2011 1040 income tax form Intellectual property means any of the following: Patents. 2011 1040 income tax form Copyrights (other than a copyright described in Internal Revenue Code sections 1221(a)(3) or 1231(b)(1)(C)). 2011 1040 income tax form Trademarks. 2011 1040 income tax form Trade names. 2011 1040 income tax form Trade secrets. 2011 1040 income tax form Know-how. 2011 1040 income tax form Software (other than software described in Internal Revenue Code section 197(e)(3)(A)(i)). 2011 1040 income tax form Other similar property or applications or registrations of such property. 2011 1040 income tax form Additional deduction based on income. 2011 1040 income tax form   You may be able to claim additional charitable contribution deductions in the year of the contribution and years following, based on the income, if any, from the donated property. 2011 1040 income tax form   The following table shows the percentage of income from the property that you can deduct for each of your tax years ending on or after the date of the contribution. 2011 1040 income tax form In the table, “tax year 1,” for example, means your first tax year ending on or after the date of the contribution. 2011 1040 income tax form However, you can take the additional deduction only to the extent the total of the amounts figured using this table is more than the amount of the deduction claimed for the original donation of the property. 2011 1040 income tax form   After the legal life of the intellectual property ends, or after the 10th anniversary of the donation, whichever is earlier, no additional deduction is allowed. 2011 1040 income tax form The additional deductions cannot be taken for intellectual property donated to certain private foundations. 2011 1040 income tax form Tax year Deductible percentage 1 100% 2 100% 3 90% 4 80% 5 70% 6 60% 7 50% 8 40% 9 30% 10 20% 11 10% 12 10% Reporting requirements. 2011 1040 income tax form   You must inform the organization at the time of the donation that you intend to treat the donation as a contribution subject to the provisions just discussed. 2011 1040 income tax form   The organization is required to file an information return showing the income from the property, with a copy to you. 2011 1040 income tax form This is done on Form 8899, Notice of Income From Donated Intellectual Property. 2011 1040 income tax form Determining Fair Market Value This section discusses general guidelines for determining the fair market value of various types of donated property. 2011 1040 income tax form Publication 561 contains a more complete discussion. 2011 1040 income tax form Fair market value is the price at which property would change hands between a willing buyer and a willing seller, neither having to buy or sell, and both having reasonable knowledge of all the relevant facts. 2011 1040 income tax form Used clothing. 2011 1040 income tax form   The fair market value of used clothing and other personal items is usually far less than the price you paid for them. 2011 1040 income tax form There are no fixed formulas or methods for finding the value of items of clothing. 2011 1040 income tax form   You should claim as the value the price that buyers of used items actually pay in used clothing stores, such as consignment or thrift shops. 2011 1040 income tax form      Also see Clothing and Household Items , earlier. 2011 1040 income tax form Example. 2011 1040 income tax form    Kristin donated a coat to a thrift store operated by her church. 2011 1040 income tax form She paid $300 for the coat 3 years ago. 2011 1040 income tax form Similar coats in the thrift store sell for $50. 2011 1040 income tax form The fair market value of the coat is $50. 2011 1040 income tax form Kristin's donation is limited to $50. 2011 1040 income tax form Household items. 2011 1040 income tax form   The fair market value of used household items, such as furniture, appliances, and linens, is usually much lower than the price paid when new. 2011 1040 income tax form These items may have little or no market value because they are in a worn condition, out of style, or no longer useful. 2011 1040 income tax form For these reasons, formulas (such as using a percentage of the cost to buy a new replacement item) are not acceptable in determining value. 2011 1040 income tax form   You should support your valuation with photographs, canceled checks, receipts from your purchase of the items, or other evidence. 2011 1040 income tax form Magazine or newspaper articles and photographs that describe the items and statements by the recipients of the items are also useful. 2011 1040 income tax form Do not include any of this evidence with your tax return. 2011 1040 income tax form   If the property is valuable because it is old or unique, see the discussion under Paintings, Antiques, and Other Objects of Art in Publication 561. 2011 1040 income tax form   Also see Clothing and Household Items , earlier. 2011 1040 income tax form Cars, boats, and airplanes. 2011 1040 income tax form   If you contribute a car, boat, or airplane to a charitable organization, you must determine its fair market value. 2011 1040 income tax form Boats. 2011 1040 income tax form   Except for small, inexpensive boats, the valuation of boats should be based on an appraisal by a marine surveyor or appraiser because the physical condition is critical to the value. 2011 1040 income tax form Cars. 2011 1040 income tax form   Certain commercial firms and trade organizations publish used car pricing guides, commonly called “blue books,” containing complete dealer sale prices or dealer average prices for recent model years. 2011 1040 income tax form The guides may be published monthly or seasonally, and for different regions of the country. 2011 1040 income tax form These guides also provide estimates for adjusting for unusual equipment, unusual mileage, and physical condition. 2011 1040 income tax form The prices are not “official” and these publications are not considered an appraisal of any specific donated property. 2011 1040 income tax form But they do provide clues for making an appraisal and suggest relative prices for comparison with current sales and offerings in your area. 2011 1040 income tax form   These publications are sometimes available from public libraries, or from the loan officer at a bank, credit union, or finance company. 2011 1040 income tax form You can also find used car pricing information on the Internet. 2011 1040 income tax form   To find the fair market value of a donated car, use the price listed in a used car guide for a private party sale, not the dealer retail value. 2011 1040 income tax form However, the fair market value may be less if the car has engine trouble, body damage, high mileage, or any type of excessive wear. 2011 1040 income tax form The fair market value of a donated car is the same as the price listed in a used car guide for a private party sale only if the guide lists a sales price for a car that is the same make, model, and year, sold in the same area, in the same condition, with the same or similar options or accessories, and with the same or similar warranties as the donated car. 2011 1040 income tax form Example. 2011 1040 income tax form You donate a used car in poor condition to a local high school for use by students studying car repair. 2011 1040 income tax form A used car guide shows the dealer retail value for this type of car in poor condition is $1,600. 2011 1040 income tax form However, the guide shows the price for a private party sale of the car is only $750. 2011 1040 income tax form The fair market value of the car is considered to be $750. 2011 1040 income tax form Large quantities. 2011 1040 income tax form   If you contribute a large number of the same item, fair market value is the price at which comparable numbers of the item are being sold. 2011 1040 income tax form Example. 2011 1040 income tax form You purchase 500 bibles for $1,000. 2011 1040 income tax form The person who sells them to you says the retail value of these bibles is $3,000. 2011 1040 income tax form If you contribute the bibles to a qualified organization, you can claim a deduction only for the price at which similar numbers of the same bible are currently being sold. 2011 1040 income tax form Your charitable contribution is $1,000, unless you can show that similar numbers of that bible wer