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2011 Federal Tax Forms 1040 Ez

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2011 Federal Tax Forms 1040 Ez

2011 federal tax forms 1040 ez 2. 2011 federal tax forms 1040 ez   Depreciation of Rental Property Table of Contents The BasicsWhat Rental Property Can Be Depreciated? When Does Depreciation Begin and End? Depreciation Methods Basis of Depreciable Property Claiming the Special Depreciation Allowance MACRS DepreciationDepreciation Systems Property Classes Under GDS Recovery Periods Under GDS Conventions Figuring Your Depreciation Deduction Figuring MACRS Depreciation Under ADS Claiming the Correct Amount of Depreciation You recover the cost of income producing property through yearly tax deductions. 2011 federal tax forms 1040 ez You do this by depreciating the property; that is, by deducting some of the cost each year on your tax return. 2011 federal tax forms 1040 ez Three factors determine how much depreciation you can deduct each year: (1) your basis in the property, (2) the recovery period for the property, and (3) the depreciation method used. 2011 federal tax forms 1040 ez You cannot simply deduct your mortgage or principal payments, or the cost of furniture, fixtures and equipment, as an expense. 2011 federal tax forms 1040 ez You can deduct depreciation only on the part of your property used for rental purposes. 2011 federal tax forms 1040 ez Depreciation reduces your basis for figuring gain or loss on a later sale or exchange. 2011 federal tax forms 1040 ez You may have to use Form 4562 to figure and report your depreciation. 2011 federal tax forms 1040 ez See Which Forms To Use in chapter 3. 2011 federal tax forms 1040 ez Also see Publication 946. 2011 federal tax forms 1040 ez Section 179 deduction. 2011 federal tax forms 1040 ez   The section 179 deduction is a means of recovering part or all of the cost of certain qualifying property in the year you place the property in service. 2011 federal tax forms 1040 ez This deduction is not allowed for property used in connection with residential rental property. 2011 federal tax forms 1040 ez See chapter 2 of Publication 946. 2011 federal tax forms 1040 ez Alternative minimum tax (AMT). 2011 federal tax forms 1040 ez   If you use accelerated depreciation, you may be subject to the AMT. 2011 federal tax forms 1040 ez Accelerated depreciation allows you to deduct more depreciation earlier in the recovery period than you could deduct using a straight line method (same deduction each year). 2011 federal tax forms 1040 ez   The prescribed depreciation methods for rental real estate are not accelerated, so the depreciation deduction is not adjusted for the AMT. 2011 federal tax forms 1040 ez However, accelerated methods are generally used for other property connected with rental activities (for example, appliances and wall-to-wall carpeting). 2011 federal tax forms 1040 ez   To find out if you are subject to the AMT, see the Instructions for Form 6251. 2011 federal tax forms 1040 ez The Basics The following section discusses the information you will need to have about the rental property and the decisions to be made before figuring your depreciation deduction. 2011 federal tax forms 1040 ez What Rental Property Can Be Depreciated? You can depreciate your property if it meets all the following requirements. 2011 federal tax forms 1040 ez You own the property. 2011 federal tax forms 1040 ez You use the property in your business or income-producing activity (such as rental property). 2011 federal tax forms 1040 ez The property has a determinable useful life. 2011 federal tax forms 1040 ez The property is expected to last more than one year. 2011 federal tax forms 1040 ez Property you own. 2011 federal tax forms 1040 ez   To claim depreciation, you usually must be the owner of the property. 2011 federal tax forms 1040 ez You are considered as owning property even if it is subject to a debt. 2011 federal tax forms 1040 ez Rented property. 2011 federal tax forms 1040 ez   Generally, if you pay rent for property, you cannot depreciate that property. 2011 federal tax forms 1040 ez Usually, only the owner can depreciate it. 2011 federal tax forms 1040 ez However, if you make permanent improvements to leased property, you may be able to depreciate the improvements. 2011 federal tax forms 1040 ez See Additions or improvements to property , later in this chapter, under Recovery Periods Under GDS. 2011 federal tax forms 1040 ez Cooperative apartments. 2011 federal tax forms 1040 ez   If you are a tenant-stockholder in a cooperative housing corporation and rent your cooperative apartment to others, you can deduct depreciation on your stock in the corporation. 2011 federal tax forms 1040 ez See chapter 4, Special Situations. 2011 federal tax forms 1040 ez Property having a determinable useful life. 2011 federal tax forms 1040 ez   To be depreciable, your property must have a determinable useful life. 2011 federal tax forms 1040 ez This means that it must be something that wears out, decays, gets used up, becomes obsolete, or loses its value from natural causes. 2011 federal tax forms 1040 ez What Rental Property Cannot Be Depreciated? Certain property cannot be depreciated. 2011 federal tax forms 1040 ez This includes land and certain excepted property. 2011 federal tax forms 1040 ez Land. 2011 federal tax forms 1040 ez   You cannot depreciate the cost of land because land generally does not wear out, become obsolete, or get used up. 2011 federal tax forms 1040 ez But if it does, the loss is accounted for upon disposition. 2011 federal tax forms 1040 ez The costs of clearing, grading, planting, and landscaping are usually all part of the cost of land and cannot be depreciated. 2011 federal tax forms 1040 ez   Although you cannot depreciate land, you can depreciate certain land preparation costs, such as landscaping costs, incurred in preparing land for business use. 2011 federal tax forms 1040 ez These costs must be so closely associated with other depreciable property that you can determine a life for them along with the life of the associated property. 2011 federal tax forms 1040 ez Example. 2011 federal tax forms 1040 ez You built a new house to use as a rental and paid for grading, clearing, seeding, and planting bushes and trees. 2011 federal tax forms 1040 ez Some of the bushes and trees were planted right next to the house, while others were planted around the outer border of the lot. 2011 federal tax forms 1040 ez If you replace the house, you would have to destroy the bushes and trees right next to it. 2011 federal tax forms 1040 ez These bushes and trees are closely associated with the house, so they have a determinable useful life. 2011 federal tax forms 1040 ez Therefore, you can depreciate them. 2011 federal tax forms 1040 ez Add your other land preparation costs to the basis of your land because they have no determinable life and you cannot depreciate them. 2011 federal tax forms 1040 ez Excepted property. 2011 federal tax forms 1040 ez   Even if the property meets all the requirements listed earlier under What Rental Property Can Be Depreciated , you cannot depreciate the following property. 2011 federal tax forms 1040 ez Property placed in service and disposed of (or taken out of business use) in the same year. 2011 federal tax forms 1040 ez Equipment used to build capital improvements. 2011 federal tax forms 1040 ez You must add otherwise allowable depreciation on the equipment during the period of construction to the basis of your improvements. 2011 federal tax forms 1040 ez For more information, see chapter 1 of Publication 946. 2011 federal tax forms 1040 ez When Does Depreciation Begin and End? You begin to depreciate your rental property when you place it in service for the production of income. 2011 federal tax forms 1040 ez You stop depreciating it either when you have fully recovered your cost or other basis, or when you retire it from service, whichever happens first. 2011 federal tax forms 1040 ez Placed in Service You place property in service in a rental activity when it is ready and available for a specific use in that activity. 2011 federal tax forms 1040 ez Even if you are not using the property, it is in service when it is ready and available for its specific use. 2011 federal tax forms 1040 ez Example 1. 2011 federal tax forms 1040 ez On November 22 of last year, you purchased a dishwasher for your rental property. 2011 federal tax forms 1040 ez The appliance was delivered on December 7, but was not installed and ready for use until January 3 of this year. 2011 federal tax forms 1040 ez Because the dishwasher was not ready for use last year, it is not considered placed in service until this year. 2011 federal tax forms 1040 ez If the appliance had been installed and ready for use when it was delivered in December of last year, it would have been considered placed in service in December, even if it was not actually used until this year. 2011 federal tax forms 1040 ez Example 2. 2011 federal tax forms 1040 ez On April 6, you purchased a house to use as residential rental property. 2011 federal tax forms 1040 ez You made extensive repairs to the house and had it ready for rent on July 5. 2011 federal tax forms 1040 ez You began to advertise the house for rent in July and actually rented it beginning September 1. 2011 federal tax forms 1040 ez The house is considered placed in service in July when it was ready and available for rent. 2011 federal tax forms 1040 ez You can begin to depreciate the house in July. 2011 federal tax forms 1040 ez Example 3. 2011 federal tax forms 1040 ez You moved from your home in July. 2011 federal tax forms 1040 ez During August and September you made several repairs to the house. 2011 federal tax forms 1040 ez On October 1, you listed the property for rent with a real estate company, which rented it on December 1. 2011 federal tax forms 1040 ez The property is considered placed in service on October 1, the date when it was available for rent. 2011 federal tax forms 1040 ez Conversion to business use. 2011 federal tax forms 1040 ez   If you place property in service in a personal activity, you cannot claim depreciation. 2011 federal tax forms 1040 ez However, if you change the property's use to business or the production of income, you can begin to depreciate it at the time of the change. 2011 federal tax forms 1040 ez You place the property in service for business or income-producing use on the date of the change. 2011 federal tax forms 1040 ez Example. 2011 federal tax forms 1040 ez You bought a house and used it as your personal home several years before you converted it to rental property. 2011 federal tax forms 1040 ez Although its specific use was personal and no depreciation was allowable, you placed the home in service when you began using it as your home. 2011 federal tax forms 1040 ez You can begin to claim depreciation in the year you converted it to rental property because at that time its use changed to the production of income. 2011 federal tax forms 1040 ez Idle Property Continue to claim a deduction for depreciation on property used in your rental activity even if it is temporarily idle (not in use). 2011 federal tax forms 1040 ez For example, if you must make repairs after a tenant moves out, you still depreciate the rental property during the time it is not available for rent. 2011 federal tax forms 1040 ez Cost or Other Basis Fully Recovered You must stop depreciating property when the total of your yearly depreciation deductions equals your cost or other basis of your property. 2011 federal tax forms 1040 ez For this purpose, your yearly depreciation deductions include any depreciation that you were allowed to claim, even if you did not claim it. 2011 federal tax forms 1040 ez See Basis of Depreciable Property , later. 2011 federal tax forms 1040 ez Retired From Service You stop depreciating property when you retire it from service, even if you have not fully recovered its cost or other basis. 2011 federal tax forms 1040 ez You retire property from service when you permanently withdraw it from use in a trade or business or from use in the production of income because of any of the following events. 2011 federal tax forms 1040 ez You sell or exchange the property. 2011 federal tax forms 1040 ez You convert the property to personal use. 2011 federal tax forms 1040 ez You abandon the property. 2011 federal tax forms 1040 ez The property is destroyed. 2011 federal tax forms 1040 ez Depreciation Methods Generally, you must use the Modified Accelerated Cost Recovery System (MACRS) to depreciate residential rental property placed in service after 1986. 2011 federal tax forms 1040 ez If you placed rental property in service before 1987, you are using one of the following methods. 2011 federal tax forms 1040 ez ACRS (Accelerated Cost Recovery System) for property placed in service after 1980 but before 1987. 2011 federal tax forms 1040 ez Straight line or declining balance method over the useful life of property placed in service before 1981. 2011 federal tax forms 1040 ez See MACRS Depreciation , later, for more information. 2011 federal tax forms 1040 ez Rental property placed in service before 2013. 2011 federal tax forms 1040 ez   Continue to use the same method of figuring depreciation that you used in the past. 2011 federal tax forms 1040 ez Use of real property changed. 2011 federal tax forms 1040 ez   Generally, you must use MACRS to depreciate real property that you acquired for personal use before 1987 and changed to business or income-producing use after 1986. 2011 federal tax forms 1040 ez This includes your residence that you changed to rental use. 2011 federal tax forms 1040 ez See Property Owned or Used in 1986 in Publication 946, chapter 1, for those situations in which MACRS is not allowed. 2011 federal tax forms 1040 ez Improvements made after 1986. 2011 federal tax forms 1040 ez   Treat an improvement made after 1986 to property you placed in service before 1987 as separate depreciable property. 2011 federal tax forms 1040 ez As a result, you can depreciate that improvement as separate property under MACRS if it is the type of property that otherwise qualifies for MACRS depreciation. 2011 federal tax forms 1040 ez For more information about improvements, see Additions or improvements to property , later in this chapter under Recovery Periods Under GDS. 2011 federal tax forms 1040 ez This publication discusses MACRS depreciation only. 2011 federal tax forms 1040 ez If you need information about depreciating property placed in service before 1987, see Publication 534. 2011 federal tax forms 1040 ez Basis of Depreciable Property The basis of property used in a rental activity is generally its adjusted basis when you place it in service in that activity. 2011 federal tax forms 1040 ez This is its cost or other basis when you acquired it, adjusted for certain items occurring before you place it in service in the rental activity. 2011 federal tax forms 1040 ez If you depreciate your property under MACRS, you may also have to reduce your basis by certain deductions and credits with respect to the property. 2011 federal tax forms 1040 ez Basis and adjusted basis are explained in the following discussions. 2011 federal tax forms 1040 ez If you used the property for personal purposes before changing it to rental use, its basis for depreciation is the lesser of its adjusted basis or its fair market value when you change it to rental use. 2011 federal tax forms 1040 ez See Basis of Property Changed to Rental Use in chapter 4. 2011 federal tax forms 1040 ez Cost Basis The basis of property you buy is usually its cost. 2011 federal tax forms 1040 ez The cost is the amount you pay for it in cash, in debt obligation, in other property, or in services. 2011 federal tax forms 1040 ez Your cost also includes amounts you pay for: Sales tax charged on the purchase (but see Exception next), Freight charges to obtain the property, and Installation and testing charges. 2011 federal tax forms 1040 ez Exception. 2011 federal tax forms 1040 ez   If you deducted state and local general sales taxes as an itemized deduction on Schedule A (Form 1040), do not include those sales taxes as part of your cost basis. 2011 federal tax forms 1040 ez Such taxes were deductible before 1987 and after 2003. 2011 federal tax forms 1040 ez Loans with low or no interest. 2011 federal tax forms 1040 ez   If you buy property on any time-payment plan that charges little or no interest, the basis of your property is your stated purchase price, less the amount considered to be unstated interest. 2011 federal tax forms 1040 ez See Unstated Interest and Original Issue Discount (OID) in Publication 537, Installment Sales. 2011 federal tax forms 1040 ez Real property. 2011 federal tax forms 1040 ez   If you buy real property, such as a building and land, certain fees and other expenses you pay are part of your cost basis in the property. 2011 federal tax forms 1040 ez Real estate taxes. 2011 federal tax forms 1040 ez   If you buy real property and agree to pay real estate taxes on it that were owed by the seller and the seller does not reimburse you, the taxes you pay are treated as part of your basis in the property. 2011 federal tax forms 1040 ez You cannot deduct them as taxes paid. 2011 federal tax forms 1040 ez   If you reimburse the seller for real estate taxes the seller paid for you, you can usually deduct that amount. 2011 federal tax forms 1040 ez Do not include that amount in your basis in the property. 2011 federal tax forms 1040 ez Settlement fees and other costs. 2011 federal tax forms 1040 ez   The following settlement fees and closing costs for buying the property are part of your basis in the property. 2011 federal tax forms 1040 ez Abstract fees. 2011 federal tax forms 1040 ez Charges for installing utility services. 2011 federal tax forms 1040 ez Legal fees. 2011 federal tax forms 1040 ez Recording fees. 2011 federal tax forms 1040 ez Surveys. 2011 federal tax forms 1040 ez Transfer taxes. 2011 federal tax forms 1040 ez Title insurance. 2011 federal tax forms 1040 ez Any amounts the seller owes that you agree to pay, such as back taxes or interest, recording or mortgage fees, charges for improvements or repairs, and sales commissions. 2011 federal tax forms 1040 ez   The following are settlement fees and closing costs you cannot include in your basis in the property. 2011 federal tax forms 1040 ez Fire insurance premiums. 2011 federal tax forms 1040 ez Rent or other charges relating to occupancy of the property before closing. 2011 federal tax forms 1040 ez Charges connected with getting or refinancing a loan, such as: Points (discount points, loan origination fees), Mortgage insurance premiums, Loan assumption fees, Cost of a credit report, and Fees for an appraisal required by a lender. 2011 federal tax forms 1040 ez   Also, do not include amounts placed in escrow for the future payment of items such as taxes and insurance. 2011 federal tax forms 1040 ez Assumption of a mortgage. 2011 federal tax forms 1040 ez   If you buy property and become liable for an existing mortgage on the property, your basis is the amount you pay for the property plus the amount remaining to be paid on the mortgage. 2011 federal tax forms 1040 ez Example. 2011 federal tax forms 1040 ez You buy a building for $60,000 cash and assume a mortgage of $240,000 on it. 2011 federal tax forms 1040 ez Your basis is $300,000. 2011 federal tax forms 1040 ez Separating cost of land and buildings. 2011 federal tax forms 1040 ez   If you buy buildings and your cost includes the cost of the land on which they stand, you must divide the cost between the land and the buildings to figure the basis for depreciation of the buildings. 2011 federal tax forms 1040 ez The part of the cost that you allocate to each asset is the ratio of the fair market value of that asset to the fair market value of the whole property at the time you buy it. 2011 federal tax forms 1040 ez   If you are not certain of the fair market values of the land and the buildings, you can divide the cost between them based on their assessed values for real estate tax purposes. 2011 federal tax forms 1040 ez Example. 2011 federal tax forms 1040 ez You buy a house and land for $200,000. 2011 federal tax forms 1040 ez The purchase contract does not specify how much of the purchase price is for the house and how much is for the land. 2011 federal tax forms 1040 ez The latest real estate tax assessment on the property was based on an assessed value of $160,000, of which $136,000 was for the house and $24,000 was for the land. 2011 federal tax forms 1040 ez You can allocate 85% ($136,000 ÷ $160,000) of the purchase price to the house and 15% ($24,000 ÷ $160,000) of the purchase price to the land. 2011 federal tax forms 1040 ez Your basis in the house is $170,000 (85% of $200,000) and your basis in the land is $30,000 (15% of $200,000). 2011 federal tax forms 1040 ez Basis Other Than Cost You cannot use cost as a basis for property that you received: In return for services you performed; In an exchange for other property; As a gift; From your spouse, or from your former spouse as the result of a divorce; or As an inheritance. 2011 federal tax forms 1040 ez If you received property in one of these ways, see Publication 551 for information on how to figure your basis. 2011 federal tax forms 1040 ez Adjusted Basis To figure your property's basis for depreciation, you may have to make certain adjustments (increases and decreases) to the basis of the property for events occurring between the time you acquired the property and the time you placed it in service for business or the production of income. 2011 federal tax forms 1040 ez The result of these adjustments to the basis is the adjusted basis. 2011 federal tax forms 1040 ez Increases to basis. 2011 federal tax forms 1040 ez   You must increase the basis of any property by the cost of all items properly added to a capital account. 2011 federal tax forms 1040 ez These include the following. 2011 federal tax forms 1040 ez The cost of any additions or improvements made before placing your property into service as a rental that have a useful life of more than 1 year. 2011 federal tax forms 1040 ez Amounts spent after a casualty to restore the damaged property. 2011 federal tax forms 1040 ez The cost of extending utility service lines to the property. 2011 federal tax forms 1040 ez Legal fees, such as the cost of defending and perfecting title, or settling zoning issues. 2011 federal tax forms 1040 ez Additions or improvements. 2011 federal tax forms 1040 ez   Add to the basis of your property the amount an addition or improvement actually cost you, including any amount you borrowed to make the addition or improvement. 2011 federal tax forms 1040 ez This includes all direct costs, such as material and labor, but does not include your own labor. 2011 federal tax forms 1040 ez It also includes all expenses related to the addition or improvement. 2011 federal tax forms 1040 ez   For example, if you had an architect draw up plans for remodeling your property, the architect's fee is a part of the cost of the remodeling. 2011 federal tax forms 1040 ez Or, if you had your lot surveyed to put up a fence, the cost of the survey is a part of the cost of the fence. 2011 federal tax forms 1040 ez   Keep separate accounts for depreciable additions or improvements made after you place the property in service in your rental activity. 2011 federal tax forms 1040 ez For information on depreciating additions or improvements, see Additions or improvements to property , later in this chapter, under Recovery Periods Under GDS. 2011 federal tax forms 1040 ez    The cost of landscaping improvements is usually treated as an addition to the basis of the land, which is not depreciable. 2011 federal tax forms 1040 ez However, see What Rental Property Cannot Be Depreciated, earlier. 2011 federal tax forms 1040 ez Assessments for local improvements. 2011 federal tax forms 1040 ez   Assessments for items which tend to increase the value of property, such as streets and sidewalks, must be added to the basis of the property. 2011 federal tax forms 1040 ez For example, if your city installs curbing on the street in front of your house, and assesses you and your neighbors for its cost, you must add the assessment to the basis of your property. 2011 federal tax forms 1040 ez Also add the cost of legal fees paid to obtain a decrease in an assessment levied against property to pay for local improvements. 2011 federal tax forms 1040 ez You cannot deduct these items as taxes or depreciate them. 2011 federal tax forms 1040 ez    However, you can deduct as taxes, charges or assessments for maintenance, repairs, or interest charges related to the improvements. 2011 federal tax forms 1040 ez Do not add them to your basis in the property. 2011 federal tax forms 1040 ez Deducting vs. 2011 federal tax forms 1040 ez capitalizing costs. 2011 federal tax forms 1040 ez   Do not add to your basis costs you can deduct as current expenses. 2011 federal tax forms 1040 ez However, there are certain costs you can choose either to deduct or to capitalize. 2011 federal tax forms 1040 ez If you capitalize these costs, include them in your basis. 2011 federal tax forms 1040 ez If you deduct them, do not include them in your basis. 2011 federal tax forms 1040 ez   The costs you may choose to deduct or capitalize include carrying charges, such as interest and taxes, that you must pay to own property. 2011 federal tax forms 1040 ez   For more information about deducting or capitalizing costs and how to make the election, see Carrying Charges in Publication 535, chapter 7. 2011 federal tax forms 1040 ez Decreases to basis. 2011 federal tax forms 1040 ez   You must decrease the basis of your property by any items that represent a return of your cost. 2011 federal tax forms 1040 ez These include the following. 2011 federal tax forms 1040 ez Insurance or other payment you receive as the result of a casualty or theft loss. 2011 federal tax forms 1040 ez Casualty loss not covered by insurance for which you took a deduction. 2011 federal tax forms 1040 ez Amount(s) you receive for granting an easement. 2011 federal tax forms 1040 ez Residential energy credits you were allowed before 1986, or after 2005, if you added the cost of the energy items to the basis of your home. 2011 federal tax forms 1040 ez Exclusion from income of subsidies for energy conservation measures. 2011 federal tax forms 1040 ez Special depreciation allowance claimed on qualified property. 2011 federal tax forms 1040 ez Depreciation you deducted, or could have deducted, on your tax returns under the method of depreciation you chose. 2011 federal tax forms 1040 ez If you did not deduct enough or deducted too much in any year, see Depreciation under Decreases to Basis in Publication 551. 2011 federal tax forms 1040 ez   If your rental property was previously used as your main home, you must also decrease the basis by the following. 2011 federal tax forms 1040 ez Gain you postponed from the sale of your main home before May 7, 1997, if the replacement home was converted to your rental property. 2011 federal tax forms 1040 ez District of Columbia first-time homebuyer credit allowed on the purchase of your main home after August 4, 1997 and before January 1, 2012. 2011 federal tax forms 1040 ez Amount of qualified principal residence indebtedness discharged on or after January 1, 2007. 2011 federal tax forms 1040 ez Claiming the Special Depreciation Allowance For 2013, your residential rental property may qualify for a special depreciation allowance. 2011 federal tax forms 1040 ez This allowance is figured before you figure your regular depreciation deduction. 2011 federal tax forms 1040 ez See Publication 946, chapter 3, for details. 2011 federal tax forms 1040 ez Also see the Instructions for Form 4562, Line 14. 2011 federal tax forms 1040 ez If you qualify for, but choose not to take, a special depreciation allowance, you must attach a statement to your return. 2011 federal tax forms 1040 ez The details of this election are in Publication 946, chapter 3, and the Instructions for Form 4562, Line 14. 2011 federal tax forms 1040 ez MACRS Depreciation Most business and investment property placed in service after 1986 is depreciated using MACRS. 2011 federal tax forms 1040 ez This section explains how to determine which MACRS depreciation system applies to your property. 2011 federal tax forms 1040 ez It also discusses other information you need to know before you can figure depreciation under MACRS. 2011 federal tax forms 1040 ez This information includes the property's: Recovery class, Applicable recovery period, Convention, Placed-in-service date, Basis for depreciation, and Depreciation method. 2011 federal tax forms 1040 ez Depreciation Systems MACRS consists of two systems that determine how you depreciate your property—the General Depreciation System (GDS) and the Alternative Depreciation System (ADS). 2011 federal tax forms 1040 ez You must use GDS unless you are specifically required by law to use ADS or you elect to use ADS. 2011 federal tax forms 1040 ez Excluded Property You cannot use MACRS for certain personal property (such as furniture or appliances) placed in service in your rental property in 2013 if it had been previously placed in service before 1987 when MACRS became effective. 2011 federal tax forms 1040 ez In most cases, personal property is excluded from MACRS if you (or a person related to you) owned or used it in 1986 or if your tenant is a person (or someone related to the person) who owned or used it in 1986. 2011 federal tax forms 1040 ez However, the property is not excluded if your 2013 deduction under MACRS (using a half-year convention) is less than the deduction you would have under ACRS. 2011 federal tax forms 1040 ez For more information, see What Method Can You Use To Depreciate Your Property? in Publication 946, chapter 1. 2011 federal tax forms 1040 ez Electing ADS If you choose, you can use the ADS method for most property. 2011 federal tax forms 1040 ez Under ADS, you use the straight line method of depreciation. 2011 federal tax forms 1040 ez The election of ADS for one item in a class of property generally applies to all property in that class that is placed in service during the tax year of the election. 2011 federal tax forms 1040 ez However, the election applies on a property-by-property basis for residential rental property and nonresidential real property. 2011 federal tax forms 1040 ez If you choose to use ADS for your residential rental property, the election must be made in the first year the property is placed in service. 2011 federal tax forms 1040 ez Once you make this election, you can never revoke it. 2011 federal tax forms 1040 ez For property placed in service during 2013, you make the election to use ADS by entering the depreciation on Form 4562, Part III, Section C, line 20c. 2011 federal tax forms 1040 ez Property Classes Under GDS Each item of property that can be depreciated under MACRS is assigned to a property class, determined by its class life. 2011 federal tax forms 1040 ez The property class generally determines the depreciation method, recovery period, and convention. 2011 federal tax forms 1040 ez The property classes under GDS are: 3-year property, 5-year property, 7-year property, 10-year property, 15-year property, 20-year property, Nonresidential real property, and Residential rental property. 2011 federal tax forms 1040 ez Under MACRS, property that you placed in service during 2013 in your rental activities generally falls into one of the following classes. 2011 federal tax forms 1040 ez 5-year property. 2011 federal tax forms 1040 ez This class includes computers and peripheral equipment, office machinery (typewriters, calculators, copiers, etc. 2011 federal tax forms 1040 ez ), automobiles, and light trucks. 2011 federal tax forms 1040 ez This class also includes appliances, carpeting, furniture, etc. 2011 federal tax forms 1040 ez , used in a residential rental real estate activity. 2011 federal tax forms 1040 ez Depreciation on automobiles, other property used for transportation, computers and related peripheral equipment, and property of a type generally used for entertainment, recreation, or amusement is limited. 2011 federal tax forms 1040 ez See chapter 5 of Publication 946. 2011 federal tax forms 1040 ez 7-year property. 2011 federal tax forms 1040 ez This class includes office furniture and equipment (desks, file cabinets, etc. 2011 federal tax forms 1040 ez ). 2011 federal tax forms 1040 ez This class also includes any property that does not have a class life and that has not been designated by law as being in any other class. 2011 federal tax forms 1040 ez 15-year property. 2011 federal tax forms 1040 ez This class includes roads, fences, and shrubbery (if depreciable). 2011 federal tax forms 1040 ez Residential rental property. 2011 federal tax forms 1040 ez This class includes any real property that is a rental building or structure (including a mobile home) for which 80% or more of the gross rental income for the tax year is from dwelling units. 2011 federal tax forms 1040 ez It does not include a unit in a hotel, motel, inn, or other establishment where more than half of the units are used on a transient basis. 2011 federal tax forms 1040 ez If you live in any part of the building or structure, the gross rental income includes the fair rental value of the part you live in. 2011 federal tax forms 1040 ez The other property classes do not generally apply to property used in rental activities. 2011 federal tax forms 1040 ez These classes are not discussed in this publication. 2011 federal tax forms 1040 ez See Publication 946 for more information. 2011 federal tax forms 1040 ez Recovery Periods Under GDS The recovery period of property is the number of years over which you recover its cost or other basis. 2011 federal tax forms 1040 ez The recovery periods are generally longer under ADS than GDS. 2011 federal tax forms 1040 ez The recovery period of property depends on its property class. 2011 federal tax forms 1040 ez Under GDS, the recovery period of an asset is generally the same as its property class. 2011 federal tax forms 1040 ez Class lives and recovery periods for most assets are listed in Appendix B of Publication 946. 2011 federal tax forms 1040 ez See Table 2-1 for recovery periods of property commonly used in residential rental activities. 2011 federal tax forms 1040 ez Qualified Indian reservation property. 2011 federal tax forms 1040 ez   Shorter recovery periods are provided under MACRS for qualified Indian reservation property placed in service on Indian reservations. 2011 federal tax forms 1040 ez For more information, see chapter 4 of Publication 946. 2011 federal tax forms 1040 ez Additions or improvements to property. 2011 federal tax forms 1040 ez   Treat additions or improvements you make to your depreciable rental property as separate property items for depreciation purposes. 2011 federal tax forms 1040 ez   The property class and recovery period of the addition or improvement is the one that would apply to the original property if you had placed it in service at the same time as the addition or improvement. 2011 federal tax forms 1040 ez   The recovery period for an addition or improvement to property begins on the later of: The date the addition or improvement is placed in service, or The date the property to which the addition or improvement was made is placed in service. 2011 federal tax forms 1040 ez Example. 2011 federal tax forms 1040 ez You own a residential rental house that you have been renting since 1986 and depreciating under ACRS. 2011 federal tax forms 1040 ez You built an addition onto the house and placed it in service in 2013. 2011 federal tax forms 1040 ez You must use MACRS for the addition. 2011 federal tax forms 1040 ez Under GDS, the addition is depreciated as residential rental property over 27. 2011 federal tax forms 1040 ez 5 years. 2011 federal tax forms 1040 ez Table 2-1. 2011 federal tax forms 1040 ez MACRS Recovery Periods for Property Used in Rental Activities   MACRS Recovery Period   Type of Property General Depreciation System Alternative Depreciation System   Computers and their peripheral equipment 5 years 5 years   Office machinery, such as: Typewriters Calculators Copiers 5 years 6 years   Automobiles 5 years 5 years   Light trucks 5 years 5 years   Appliances, such as: Stoves Refrigerators 5 years 9 years   Carpets 5 years 9 years   Furniture used in rental property 5 years 9 years   Office furniture and equipment, such as: Desks Files 7 years 10 years   Any property that does not have a class life and that has not been designated by law as being in any other class 7 years 12 years   Roads 15 years 20 years   Shrubbery 15 years 20 years   Fences 15 years 20 years   Residential rental property (buildings or structures) and structural components such as furnaces, waterpipes, venting, etc. 2011 federal tax forms 1040 ez 27. 2011 federal tax forms 1040 ez 5 years 40 years   Additions and improvements, such as a new roof The same recovery period as that of the property to which the addition or improvement is made, determined as if the property were placed in service at the same time as the addition or improvement. 2011 federal tax forms 1040 ez   Conventions A convention is a method established under MACRS to set the beginning and end of the recovery period. 2011 federal tax forms 1040 ez The convention you use determines the number of months for which you can claim depreciation in the year you place property in service and in the year you dispose of the property. 2011 federal tax forms 1040 ez Mid-month convention. 2011 federal tax forms 1040 ez    A mid-month convention is used for all residential rental property and nonresidential real property. 2011 federal tax forms 1040 ez Under this convention, you treat all property placed in service, or disposed of, during any month as placed in service, or disposed of, at the midpoint of that month. 2011 federal tax forms 1040 ez Mid-quarter convention. 2011 federal tax forms 1040 ez   A mid-quarter convention must be used if the mid-month convention does not apply and the total depreciable basis of MACRS property placed in service in the last 3 months of a tax year (excluding nonresidential real property, residential rental property, and property placed in service and disposed of in the same year) is more than 40% of the total basis of all such property you place in service during the year. 2011 federal tax forms 1040 ez   Under this convention, you treat all property placed in service, or disposed of, during any quarter of a tax year as placed in service, or disposed of, at the midpoint of the quarter. 2011 federal tax forms 1040 ez Example. 2011 federal tax forms 1040 ez During the tax year, Tom Martin purchased the following items to use in his rental property. 2011 federal tax forms 1040 ez He elects not to claim the special depreciation allowance discussed earlier. 2011 federal tax forms 1040 ez A dishwasher for $400 that he placed in service in January. 2011 federal tax forms 1040 ez Used furniture for $100 that he placed in service in September. 2011 federal tax forms 1040 ez A refrigerator for $800 that he placed in service in October. 2011 federal tax forms 1040 ez Tom uses the calendar year as his tax year. 2011 federal tax forms 1040 ez The total basis of all property placed in service that year is $1,300. 2011 federal tax forms 1040 ez The $800 basis of the refrigerator placed in service during the last 3 months of his tax year exceeds $520 (40% × $1,300). 2011 federal tax forms 1040 ez Tom must use the mid-quarter convention instead of the half-year convention for all three items. 2011 federal tax forms 1040 ez Half-year convention. 2011 federal tax forms 1040 ez    The half-year convention is used if neither the mid-quarter convention nor the mid-month convention applies. 2011 federal tax forms 1040 ez Under this convention, you treat all property placed in service, or disposed of, during a tax year as placed in service, or disposed of, at the midpoint of that tax year. 2011 federal tax forms 1040 ez   If this convention applies, you deduct a half year of depreciation for the first year and the last year that you depreciate the property. 2011 federal tax forms 1040 ez You deduct a full year of depreciation for any other year during the recovery period. 2011 federal tax forms 1040 ez Figuring Your Depreciation Deduction You can figure your MACRS depreciation deduction in one of two ways. 2011 federal tax forms 1040 ez The deduction is substantially the same both ways. 2011 federal tax forms 1040 ez You can either: Actually compute the deduction using the depreciation method and convention that apply over the recovery period of the property, or Use the percentage from the MACRS percentage tables. 2011 federal tax forms 1040 ez In this publication we will use the percentage tables. 2011 federal tax forms 1040 ez For instructions on how to compute the deduction, see chapter 4 of Publication 946. 2011 federal tax forms 1040 ez Residential rental property. 2011 federal tax forms 1040 ez   You must use the straight line method and a mid-month convention for residential rental property. 2011 federal tax forms 1040 ez In the first year that you claim depreciation for residential rental property, you can claim depreciation only for the number of months the property is in use, and you must use the mid-month convention (explained under Conventions , earlier). 2011 federal tax forms 1040 ez 5-, 7-, or 15-year property. 2011 federal tax forms 1040 ez   For property in the 5- or 7-year class, use the 200% declining balance method and a half-year convention. 2011 federal tax forms 1040 ez However, in limited cases you must use the mid-quarter convention, if it applies. 2011 federal tax forms 1040 ez For property in the 15-year class, use the 150% declining balance method and a half-year convention. 2011 federal tax forms 1040 ez   You can also choose to use the 150% declining balance method for property in the 5- or 7-year class. 2011 federal tax forms 1040 ez The choice to use the 150% method for one item in a class of property applies to all property in that class that is placed in service during the tax year of the election. 2011 federal tax forms 1040 ez You make this election on Form 4562. 2011 federal tax forms 1040 ez In Part III, column (f), enter “150 DB. 2011 federal tax forms 1040 ez ” Once you make this election, you cannot change to another method. 2011 federal tax forms 1040 ez   If you use either the 200% or 150% declining balance method, you figure your deduction using the straight line method in the first tax year that the straight line method gives you an equal or larger deduction. 2011 federal tax forms 1040 ez   You can also choose to use the straight line method with a half-year or mid-quarter convention for 5-, 7-, or 15-year property. 2011 federal tax forms 1040 ez The choice to use the straight line method for one item in a class of property applies to all property in that class that is placed in service during the tax year of the election. 2011 federal tax forms 1040 ez You elect the straight line method on Form 4562. 2011 federal tax forms 1040 ez In Part III, column (f), enter “S/L. 2011 federal tax forms 1040 ez ” Once you make this election, you cannot change to another method. 2011 federal tax forms 1040 ez MACRS Percentage Tables You can use the percentages in Table 2-2, earlier, to compute annual depreciation under MACRS. 2011 federal tax forms 1040 ez The tables show the percentages for the first few years or until the change to the straight line method is made. 2011 federal tax forms 1040 ez See Appendix A of Publication 946 for complete tables. 2011 federal tax forms 1040 ez The percentages in Tables 2-2a, 2-2b, and 2-2c make the change from declining balance to straight line in the year that straight line will give a larger deduction. 2011 federal tax forms 1040 ez If you elect to use the straight line method for 5-, 7-, or 15-year property, or the 150% declining balance method for 5- or 7-year property, use the tables in Appendix A of Publication 946. 2011 federal tax forms 1040 ez How to use the percentage tables. 2011 federal tax forms 1040 ez   You must apply the table rates to your property's unadjusted basis (defined below) each year of the recovery period. 2011 federal tax forms 1040 ez   Once you begin using a percentage table to figure depreciation, you must continue to use it for the entire recovery period unless there is an adjustment to the basis of your property for a reason other than: Depreciation allowed or allowable, or An addition or improvement that is depreciated as a separate item of property. 2011 federal tax forms 1040 ez   If there is an adjustment for any reason other than (1) or (2), for example, because of a deductible casualty loss, you can no longer use the table. 2011 federal tax forms 1040 ez For the year of the adjustment and for the remaining recovery period, figure depreciation using the property's adjusted basis at the end of the year and the appropriate depreciation method, as explained earlier under Figuring Your Depreciation Deduction . 2011 federal tax forms 1040 ez See Figuring the Deduction Without Using the Tables in Publication 946, chapter 4. 2011 federal tax forms 1040 ez Unadjusted basis. 2011 federal tax forms 1040 ez   This is the same basis you would use to figure gain on a sale (see Basis of Depreciable Property , earlier), but without reducing your original basis by any MACRS depreciation taken in earlier years. 2011 federal tax forms 1040 ez   However, you do reduce your original basis by other amounts claimed on the property, including: Any amortization, Any section 179 deduction, and Any special depreciation allowance. 2011 federal tax forms 1040 ez For more information, see chapter 4 of Publication 946. 2011 federal tax forms 1040 ez Please click here for the text description of the image. 2011 federal tax forms 1040 ez Table 2-2 Tables 2-2a, 2-2b, and 2-2c. 2011 federal tax forms 1040 ez   The percentages in these tables take into account the half-year and mid-quarter conventions. 2011 federal tax forms 1040 ez Use Table 2-2a for 5-year property, Table 2-2b for 7-year property, and Table 2-2c for 15-year property. 2011 federal tax forms 1040 ez Use the percentage in the second column (half-year convention) unless you are required to use the mid-quarter convention (explained earlier). 2011 federal tax forms 1040 ez If you must use the mid-quarter convention, use the column that corresponds to the calendar year quarter in which you placed the property in service. 2011 federal tax forms 1040 ez Example 1. 2011 federal tax forms 1040 ez You purchased a stove and refrigerator and placed them in service in June. 2011 federal tax forms 1040 ez Your basis in the stove is $600 and your basis in the refrigerator is $1,000. 2011 federal tax forms 1040 ez Both are 5-year property. 2011 federal tax forms 1040 ez Using the half-year convention column in Table 2-2a, the depreciation percentage for Year 1 is 20%. 2011 federal tax forms 1040 ez For that year your depreciation deduction is $120 ($600 × . 2011 federal tax forms 1040 ez 20) for the stove and $200 ($1,000 × . 2011 federal tax forms 1040 ez 20) for the refrigerator. 2011 federal tax forms 1040 ez For Year 2, the depreciation percentage is 32%. 2011 federal tax forms 1040 ez That year's depreciation deduction will be $192 ($600 × . 2011 federal tax forms 1040 ez 32) for the stove and $320 ($1,000 × . 2011 federal tax forms 1040 ez 32) for the refrigerator. 2011 federal tax forms 1040 ez Example 2. 2011 federal tax forms 1040 ez Assume the same facts as in Example 1, except you buy the refrigerator in October instead of June. 2011 federal tax forms 1040 ez Since the refrigerator was placed in service in the last 3 months of the tax year, and its basis ($1,000) is more than 40% of the total basis of all property placed in service during the year ($1,600 × . 2011 federal tax forms 1040 ez 40 = $640), you are required to use the mid-quarter convention to figure depreciation on both the stove and refrigerator. 2011 federal tax forms 1040 ez Because you placed the refrigerator in service in October, you use the fourth quarter column of Table 2-2a and find the depreciation percentage for Year 1 is 5%. 2011 federal tax forms 1040 ez Your depreciation deduction for the refrigerator is $50 ($1,000 x . 2011 federal tax forms 1040 ez 05). 2011 federal tax forms 1040 ez Because you placed the stove in service in June, you use the second quarter column of Table 2-2a and find the depreciation percentage for Year 1 is 25%. 2011 federal tax forms 1040 ez For that year, your depreciation deduction for the stove is $150 ($600 x . 2011 federal tax forms 1040 ez 25). 2011 federal tax forms 1040 ez Table 2-2d. 2011 federal tax forms 1040 ez    Use this table when you are using the GDS 27. 2011 federal tax forms 1040 ez 5 year option for residential rental property. 2011 federal tax forms 1040 ez Find the row for the month that you placed the property in service. 2011 federal tax forms 1040 ez Use the percentages listed for that month to figure your depreciation deduction. 2011 federal tax forms 1040 ez The mid-month convention is taken into account in the percentages shown in the table. 2011 federal tax forms 1040 ez Continue to use the same row (month) under the column for the appropriate year. 2011 federal tax forms 1040 ez Example. 2011 federal tax forms 1040 ez You purchased a single family rental house for $185,000 and placed it in service on February 8. 2011 federal tax forms 1040 ez The sales contract showed that the building cost $160,000 and the land cost $25,000. 2011 federal tax forms 1040 ez Your basis for depreciation is its original cost, $160,000. 2011 federal tax forms 1040 ez This is the first year of service for your residential rental property and you decide to use GDS which has a recovery period of 27. 2011 federal tax forms 1040 ez 5 years. 2011 federal tax forms 1040 ez Using Table 2-2d, you find that the percentage for property placed in service in February of Year 1 is 3. 2011 federal tax forms 1040 ez 182%. 2011 federal tax forms 1040 ez That year's depreciation deduction is $5,091 ($160,000 x . 2011 federal tax forms 1040 ez 03182). 2011 federal tax forms 1040 ez Figuring MACRS Depreciation Under ADS Table 2–1, earlier, shows the ADS recovery periods for property used in rental activities. 2011 federal tax forms 1040 ez See Appendix B in Publication 946 for other property. 2011 federal tax forms 1040 ez If your property is not listed in Appendix B, it is considered to have no class life. 2011 federal tax forms 1040 ez Under ADS, personal property with no class life is depreciated using a recovery period of 12 years. 2011 federal tax forms 1040 ez Use the mid-month convention for residential rental property and nonresidential real property. 2011 federal tax forms 1040 ez For all other property, use the half-year or mid-quarter convention, as appropriate. 2011 federal tax forms 1040 ez See Publication 946 for ADS depreciation tables. 2011 federal tax forms 1040 ez Claiming the Correct Amount of Depreciation You should claim the correct amount of depreciation each tax year. 2011 federal tax forms 1040 ez If you did not claim all the depreciation you were entitled to deduct, you must still reduce your basis in the property by the full amount of depreciation that you could have deducted. 2011 federal tax forms 1040 ez For more information, see Depreciation under Decreases to Basis in Publication 551. 2011 federal tax forms 1040 ez If you deducted an incorrect amount of depreciation for property in any year, you may be able to make a correction by filing Form 1040X, Amended U. 2011 federal tax forms 1040 ez S. 2011 federal tax forms 1040 ez Individual Income Tax Return. 2011 federal tax forms 1040 ez If you are not allowed to make the correction on an amended return, you can change your accounting method to claim the correct amount of depreciation. 2011 federal tax forms 1040 ez Filing an amended return. 2011 federal tax forms 1040 ez   You can file an amended return to correct the amount of depreciation claimed for any property in any of the following situations. 2011 federal tax forms 1040 ez You claimed the incorrect amount because of a mathematical error made in any year. 2011 federal tax forms 1040 ez You claimed the incorrect amount because of a posting error made in any year. 2011 federal tax forms 1040 ez You have not adopted a method of accounting for property placed in service by you in tax years ending after December 29, 2003. 2011 federal tax forms 1040 ez You claimed the incorrect amount on property placed in service by you in tax years ending before December 30, 2003. 2011 federal tax forms 1040 ez   Generally, you adopt a method of accounting for depreciation by using a permissible method of determining depreciation when you file your first tax return for the property used in your rental activity. 2011 federal tax forms 1040 ez This also occurs when you use the same impermissible method of determining depreciation (for example, using the wrong MACRS recovery period) in two or more consecutively filed tax returns. 2011 federal tax forms 1040 ez   If an amended return is allowed, you must file it by the later of the following dates. 2011 federal tax forms 1040 ez 3 years from the date you filed your original return for the year in which you did not deduct the correct amount. 2011 federal tax forms 1040 ez A return filed before an unextended due date is considered filed on that due date. 2011 federal tax forms 1040 ez 2 years from the time you paid your tax for that year. 2011 federal tax forms 1040 ez Changing your accounting method. 2011 federal tax forms 1040 ez   To change your accounting method, you generally must file Form 3115, Application for Change in Accounting Method, to get the consent of the IRS. 2011 federal tax forms 1040 ez In some instances, that consent is automatic. 2011 federal tax forms 1040 ez For more information, see Changing Your Accounting Method in Publication 946,  chapter 1. 2011 federal tax forms 1040 ez Prev  Up  Next   Home   More Online Publications
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The 2011 Federal Tax Forms 1040 Ez

2011 federal tax forms 1040 ez Publication 4492 - Main Contents Table of Contents DefinitionsHurricane Katrina Disaster Area Katrina Covered Disaster Area Gulf Opportunity (GO) Zone (Core Disaster Area) Hurricane Rita Disaster Area (Rita Covered Disaster Area) Rita GO Zone Hurricane Wilma Disaster Area Wilma Covered Disaster Area Wilma GO Zone Extended Tax Deadlines Charitable Giving IncentivesTemporary Suspension of Limits on Charitable Contributions Standard Mileage Rate for Charitable Use of Vehicles Mileage Reimbursements to Charitable Volunteers Charitable Deduction for Contributions of Food Inventory Charitable Deduction for Contributions of Book Inventories to Public Schools Casualty and Theft LossesTime limit for making election. 2011 federal tax forms 1040 ez Replacement Period for Nonrecognition of Gain Net Operating Losses IRAs and Other Retirement PlansDefinitions Taxation of Qualified Hurricane Distributions Repayment of Qualified Hurricane Distributions Repayment of Qualified Distributions for the Purchase or Construction of a Main Home Loans From Qualified Plans Additional Tax Relief for IndividualsEarned Income Credit and Child Tax Credit Additional Exemption for Housing Individuals Displaced by Hurricane Katrina Education Credits Recapture of Federal Mortgage Subsidy Exclusion of Certain Cancellations of Indebtedness by Reason of Hurricane Katrina Tax Relief for Temporary Relocation Additional Tax Relief for BusinessesSpecial Depreciation Allowance Increased Section 179 Deduction Work Opportunity Credit Employee Retention Credit Hurricane Katrina Housing Credit Reforestation Costs Demolition and Clean-up Costs Increase in Rehabilitation Tax Credit Request for Copy or Transcript of Tax Return How To Get Tax Help Definitions The following definitions are used throughout this publication. 2011 federal tax forms 1040 ez Hurricane Katrina Disaster Area The Hurricane Katrina disaster area covers the area for which the President declared a major disaster before September 14, 2005, because of Hurricane Katrina. 2011 federal tax forms 1040 ez The Hurricane Katrina disaster area covers the entire states of Alabama, Florida, Louisiana, and Mississippi. 2011 federal tax forms 1040 ez Katrina Covered Disaster Area A portion of the Hurricane Katrina disaster area has been designated by the IRS as a covered disaster area. 2011 federal tax forms 1040 ez The Katrina covered disaster area covers the following areas in four states. 2011 federal tax forms 1040 ez Alabama. 2011 federal tax forms 1040 ez   The counties of Baldwin, Bibb, Choctaw, Clarke, Colbert, Cullman, Greene, Hale, Jefferson, Lamar, Lauderdale, Marengo, Marion, Mobile, Monroe, Perry, Pickens, Sumter, Tuscaloosa, Washington, Wilcox, and Winston. 2011 federal tax forms 1040 ez Florida. 2011 federal tax forms 1040 ez   The counties of Bay, Broward, Collier, Escambia, Franklin, Gulf, Miami-Dade, Monroe, Okaloosa, Santa Rosa, and Walton. 2011 federal tax forms 1040 ez Louisiana. 2011 federal tax forms 1040 ez   All parishes. 2011 federal tax forms 1040 ez Mississippi. 2011 federal tax forms 1040 ez   All counties. 2011 federal tax forms 1040 ez Gulf Opportunity (GO) Zone (Core Disaster Area) The GO Zone (also called the core disaster area) covers the portion of the Hurricane Katrina disaster area determined by the Federal Emergency Management Agency (FEMA) to be eligible for either individual only or both individual and public assistance from the Federal Government. 2011 federal tax forms 1040 ez The GO Zone covers the following areas in three states. 2011 federal tax forms 1040 ez Alabama. 2011 federal tax forms 1040 ez   The counties of Baldwin, Choctaw, Clarke, Greene, Hale, Marengo, Mobile, Pickens, Sumter, Tuscaloosa, and Washington. 2011 federal tax forms 1040 ez Louisiana. 2011 federal tax forms 1040 ez   The parishes of Acadia, Ascension, Assumption, Calcasieu, Cameron, East Baton Rouge, East Feliciana, Iberia, Iberville, Jefferson, Jefferson Davis, Lafayette, Lafourche, Livingston, Orleans, Plaquemines, Pointe Coupee, St. 2011 federal tax forms 1040 ez Bernard, St. 2011 federal tax forms 1040 ez Charles, St. 2011 federal tax forms 1040 ez Helena, St. 2011 federal tax forms 1040 ez James, St. 2011 federal tax forms 1040 ez John the Baptist, St. 2011 federal tax forms 1040 ez Martin, St. 2011 federal tax forms 1040 ez Mary, St. 2011 federal tax forms 1040 ez Tammany, Tangipahoa, Terrebonne, Vermilion, Washington, West Baton Rouge, and West Feliciana. 2011 federal tax forms 1040 ez Mississippi. 2011 federal tax forms 1040 ez   The counties of Adams, Amite, Attala, Choctaw, Claiborne, Clarke, Copiah, Covington, Forrest, Franklin, George, Greene, Hancock, Harrison, Hinds, Holmes, Humphreys, Jackson, Jasper, Jefferson, Jefferson Davis, Jones, Kemper, Lamar, Lauderdale, Lawrence, Leake, Lincoln, Lowndes, Madison, Marion, Neshoba, Newton, Noxubee, Oktibbeha, Pearl River, Perry, Pike, Rankin, Scott, Simpson, Smith, Stone, Walthall, Warren, Wayne, Wilkinson, Winston, and Yazoo. 2011 federal tax forms 1040 ez Hurricane Rita Disaster Area (Rita Covered Disaster Area) The Hurricane Rita disaster area (also designated by the IRS as the Rita covered disaster area) covers the area for which the President declared a major disaster before October 6, 2005, because of Hurricane Rita. 2011 federal tax forms 1040 ez This area covers the entire states of Louisiana and Texas. 2011 federal tax forms 1040 ez Rita GO Zone The Rita GO Zone covers the portion of the Hurricane Rita disaster area determined by FEMA to be eligible for either individual only or both individual and public assistance from the Federal Government. 2011 federal tax forms 1040 ez The Rita GO Zone covers the following areas in two states. 2011 federal tax forms 1040 ez Louisiana. 2011 federal tax forms 1040 ez   The parishes of Acadia, Allen, Ascension, Beauregard, Calcasieu, Cameron, Evangeline, Iberia, Jefferson, Jefferson Davis, Lafayette, Lafourche, Livingston, Plaquemines, Sabine, St. 2011 federal tax forms 1040 ez Landry, St. 2011 federal tax forms 1040 ez Martin, St. 2011 federal tax forms 1040 ez Mary, St. 2011 federal tax forms 1040 ez Tammany, Terrebonne, Vermilion, Vernon, and West Baton Rouge. 2011 federal tax forms 1040 ez Texas. 2011 federal tax forms 1040 ez   The counties of Angelina, Brazoria, Chambers, Fort Bend, Galveston, Hardin, Harris, Jasper, Jefferson, Liberty, Montgomery, Nacogdoches, Newton, Orange, Polk, Sabine, San Augustine, San Jacinto, Shelby, Trinity, Tyler, and Walker. 2011 federal tax forms 1040 ez Hurricane Wilma Disaster Area The Hurricane Wilma disaster area covers the area for which the President declared a major disaster before November 14, 2005, because of Hurricane Wilma. 2011 federal tax forms 1040 ez The Hurricane Wilma disaster area covers the entire state of Florida. 2011 federal tax forms 1040 ez Wilma Covered Disaster Area A portion of the Hurricane Wilma disaster area has been designated by the IRS as a covered disaster area. 2011 federal tax forms 1040 ez The Wilma covered disaster area covers the following counties. 2011 federal tax forms 1040 ez Florida. 2011 federal tax forms 1040 ez   Brevard, Broward, Charlotte, Collier, DeSoto, Glades, Hardee, Hendry, Highlands, Indian River, Lee, Martin, Miami-Dade, Monroe, Okeechobee, Osceola, Palm Beach, Polk, St. 2011 federal tax forms 1040 ez Lucie, and Sarasota. 2011 federal tax forms 1040 ez Wilma GO Zone The Wilma GO Zone covers the portion of the Hurricane Wilma disaster area determined by FEMA to be eligible for either individual only or both individual and public assistance from the Federal Government. 2011 federal tax forms 1040 ez The Wilma GO Zone covers the following counties. 2011 federal tax forms 1040 ez Florida. 2011 federal tax forms 1040 ez   Brevard, Broward, Collier, Glades, Hendry, Indian River, Lee, Martin, Miami-Dade, Monroe, Okeechobee, Palm Beach, and St. 2011 federal tax forms 1040 ez Lucie. 2011 federal tax forms 1040 ez Extended Tax Deadlines The IRS has extended deadlines that apply to filing returns, paying taxes, and performing certain other time-sensitive acts for certain taxpayers affected by Hurricane Katrina, Rita, or Wilma, until February 28, 2006. 2011 federal tax forms 1040 ez The extension applies to deadlines (either an original or extended due date) that occur during the following periods. 2011 federal tax forms 1040 ez After August 28, 2005 (August 23, 2005, for Florida affected taxpayers), and before February 28, 2006, for taxpayers affected by Hurricane Katrina. 2011 federal tax forms 1040 ez After September 22, 2005, and before February 28, 2006, for taxpayers affected by Hurricane Rita. 2011 federal tax forms 1040 ez After October 22, 2005, and before February 28, 2006, for taxpayers affected by Hurricane Wilma. 2011 federal tax forms 1040 ez Affected taxpayer. 2011 federal tax forms 1040 ez   The following taxpayers are eligible for the extension. 2011 federal tax forms 1040 ez Any individual whose main home is located in a covered disaster area. 2011 federal tax forms 1040 ez Any business entity or sole proprietor whose principal place of business is located in a covered disaster area. 2011 federal tax forms 1040 ez Any individual, business entity, or sole proprietor whose records needed to meet a postponed deadline are maintained or whose tax professional's office is in a covered disaster area. 2011 federal tax forms 1040 ez The main home or principal place of business does not have to be located in the covered area. 2011 federal tax forms 1040 ez Any individual visiting a county or parish in the Hurricane Katrina or Hurricane Rita covered disaster area that was injured or killed (and the estate of an individual killed) as a result of the hurricane or its aftermath. 2011 federal tax forms 1040 ez Any estate or trust whose tax records needed to meet a filing or payment deadline are maintained in a covered disaster area. 2011 federal tax forms 1040 ez Generally, any individual who is a worker assisting in the relief activities in a covered disaster area. 2011 federal tax forms 1040 ez However, a relief worker assisting in the Wilma covered disaster area is not an affected taxpayer unless the worker is affiliated with a recognized government or philanthropic organization assisting in the relief activities. 2011 federal tax forms 1040 ez The spouse of an affected taxpayer, solely with regard to a joint income tax return with that taxpayer. 2011 federal tax forms 1040 ez   To ensure correct processing, affected taxpayers should write the assigned disaster designation (for example, “Hurricane Katrina”) in red ink at the top of any forms or documents filed with the IRS. 2011 federal tax forms 1040 ez Affected taxpayers can also identify themselves to the IRS or ask hurricane-related questions by calling the special IRS disaster hotline at 1-866-562-5227. 2011 federal tax forms 1040 ez Acts extended. 2011 federal tax forms 1040 ez   Deadlines for performing the following acts are extended. 2011 federal tax forms 1040 ez Filing any return of income, estate, gift, generation-skipping transfer, excise, or employment tax. 2011 federal tax forms 1040 ez Paying any income, estate, gift, generation-skipping transfer, excise, or employment tax. 2011 federal tax forms 1040 ez This includes making estimated tax payments. 2011 federal tax forms 1040 ez Making certain contributions, distributions, recharacterizing contributions, or making a rollover to or from a qualified retirement plan. 2011 federal tax forms 1040 ez Filing certain petitions with the Tax Court. 2011 federal tax forms 1040 ez Filing a claim for credit or refund of any tax. 2011 federal tax forms 1040 ez Bringing suit upon a claim for credit or refund. 2011 federal tax forms 1040 ez Certain other acts described in Revenue Procedure 2005-27. 2011 federal tax forms 1040 ez You can find Revenue Procedure 2005-27 on page 1050 of Internal Revenue Bulletin 2005-20 at www. 2011 federal tax forms 1040 ez irs. 2011 federal tax forms 1040 ez gov/pub/irs-irbs/irb05-20. 2011 federal tax forms 1040 ez pdf. 2011 federal tax forms 1040 ez Forgiveness of interest and penalties. 2011 federal tax forms 1040 ez   The IRS may forgive the interest and penalties on any underpaid income, estate, gift, employment, or excise tax for the length of any extension. 2011 federal tax forms 1040 ez Charitable Giving Incentives Temporary Suspension of Limits on Charitable Contributions Individuals. 2011 federal tax forms 1040 ez   Qualified contributions are not subject to the overall limit on itemized deductions or the 50% adjusted gross income (AGI) limit. 2011 federal tax forms 1040 ez A qualified contribution is a charitable contribution paid in cash or by check after August 27, 2005, and before January 1, 2006, to a 50% limit organization (other than certain private foundations described in section 509(a)(3)) if you make an election to have the 50% limit not apply to these contributions. 2011 federal tax forms 1040 ez   Your deduction for qualified contributions is limited to your AGI minus your deduction for all other charitable contributions. 2011 federal tax forms 1040 ez You can carry over any contributions you are not able to deduct for 2005 because of this limit. 2011 federal tax forms 1040 ez In 2006, treat the carryover of your unused qualified contributions as a carryover of contributions subject to the 50% limit. 2011 federal tax forms 1040 ez Exception. 2011 federal tax forms 1040 ez   Qualified contributions do not include a contribution to a segregated fund or account for which you (or any person you appoint or designate) have or expect to have advisory privileges with respect to distributions or investments based on your contribution. 2011 federal tax forms 1040 ez Corporations. 2011 federal tax forms 1040 ez   A corporation may elect to deduct qualified cash contributions without regard to the 10% taxable income limit if the contributions were made after August 27, 2005, and before January 1, 2006, to a qualified charitable organization (other than certain private foundations described in section 509(a)(3)), for Hurricane Katrina, Rita, or Wilma relief efforts. 2011 federal tax forms 1040 ez The corporation's deduction for these qualified contributions is limited to 100% of taxable income (as modified for the 10% limit) minus the corporation's deduction for all other charitable contributions. 2011 federal tax forms 1040 ez Any qualified contributions over this limit can be carried over to the next 5 years, subject to the 10% limit. 2011 federal tax forms 1040 ez Partners and shareholders. 2011 federal tax forms 1040 ez   Each partner in a partnership and each shareholder in an S corporation makes a separate election to have the appropriate limit not apply. 2011 federal tax forms 1040 ez More information. 2011 federal tax forms 1040 ez   For more information, see Publication 526 or Publication 542, Corporations. 2011 federal tax forms 1040 ez Publication 526 includes a worksheet you can use to figure your deduction if any limits apply to your charitable contributions. 2011 federal tax forms 1040 ez Standard Mileage Rate for Charitable Use of Vehicles The following are special standard mileage rates in effect in 2005 and 2006 for the cost of operating your automobile for providing charitable services solely related to Hurricane Katrina. 2011 federal tax forms 1040 ez 29 cents per mile for the period August 25 through August 31, 2005. 2011 federal tax forms 1040 ez 34 cents per mile for the period September 1 through December 31, 2005. 2011 federal tax forms 1040 ez 32 cents per mile for the period January 1 through December 31, 2006. 2011 federal tax forms 1040 ez Mileage Reimbursements to Charitable Volunteers You can exclude from income amounts you receive as mileage reimbursements for the use of a private passenger automobile for the benefit of a qualified charitable organization in providing relief related to Hurricane Katrina during the period beginning on August 25, 2005, and ending on December 31, 2006. 2011 federal tax forms 1040 ez You cannot claim a deduction or credit for amounts you receive as a mileage reimbursement. 2011 federal tax forms 1040 ez You must keep records of miles driven, time, place (or use), and purpose of the mileage. 2011 federal tax forms 1040 ez The amount you can exclude from income cannot exceed the standard business mileage rate (shown below) for expenses incurred during the following periods. 2011 federal tax forms 1040 ez 40. 2011 federal tax forms 1040 ez 5 cents per mile for the period August 25 through August 31, 2005. 2011 federal tax forms 1040 ez 48. 2011 federal tax forms 1040 ez 5 cents per mile for the period September 1 through December 31, 2005. 2011 federal tax forms 1040 ez 44. 2011 federal tax forms 1040 ez 5 cents per mile for the period January 1 through December 31, 2006. 2011 federal tax forms 1040 ez Charitable Deduction for Contributions of Food Inventory Any taxpayer engaged in a trade or business is eligible to claim a deduction for a contribution of “apparently wholesome food” inventory to a qualified charitable organization described in section 501(c)(3) (except for private nonoperating foundations) after August 27, 2005, and before January 1, 2006. 2011 federal tax forms 1040 ez “Apparently wholesome food” is food that meets all quality and labeling standards imposed by federal, state, and local laws and regulations even though the food may not be readily marketable due to appearance, age, freshness, grade, size, surplus, or other conditions. 2011 federal tax forms 1040 ez The deduction is equal to the lesser of: The basis of the donated food plus one-half of the gain that would have been realized if the donated food had been sold at fair market value on the date of the donation, or Two times the basis of the donated food. 2011 federal tax forms 1040 ez The taxpayer must receive written certification from the donee stating: The donated food is related to the purpose or function of the donee's basis for exemption under section 501(c)(3) and is to be used solely for the care of the ill, the needy, or infants; and The food was not given in exchange for money, other property, or services. 2011 federal tax forms 1040 ez For a taxpayer other than a C corporation, the deduction is limited to 10% of the taxpayer's total net income from all trades or businesses from which the food contributions were made (figured without regard to the deduction for charitable contributions). 2011 federal tax forms 1040 ez For example, if a taxpayer is a sole proprietor, a shareholder in an S corporation, and a partner in a partnership, and each made a contribution of apparently wholesome food inventory, the taxpayer's deduction is limited to 10% of the taxpayer's total net income from the sole proprietorship, S corporation, and partnership (figured without regard to the deduction for charitable contributions). 2011 federal tax forms 1040 ez Charitable Deduction for Contributions of Book Inventories to Public Schools A corporation (other than an S corporation) may be allowed a charitable deduction for a qualified book contribution made after August 27, 2005, and before January 1, 2006, to a public school that: Provides elementary or secondary education (kindergarten through grade 12), and Normally maintains a regular faculty and curriculum and has a regular enrolled body of pupils or students in attendance at the place where its educational activities are regularly carried on. 2011 federal tax forms 1040 ez . 2011 federal tax forms 1040 ez The deduction is equal to the lesser of: The basis of the donated books plus one-half of the gain that would have been realized if the donated books had been sold at fair market value on the date of the donation, or Two times the basis of the donated books. 2011 federal tax forms 1040 ez The corporation must receive written certification from the school stating that the donated books are suitable for the organization's educational programs and will be used for such programs. 2011 federal tax forms 1040 ez Casualty and Theft Losses The following paragraphs explain changes to casualty and theft losses that were caused by Hurricane Katrina, Rita, or Wilma. 2011 federal tax forms 1040 ez For more information, see Publication 547. 2011 federal tax forms 1040 ez Limits on personal casualty or theft losses caused by Hurricane Katrina, Rita, or Wilma. 2011 federal tax forms 1040 ez   The following losses to personal use property are not subject to the $100 or 10% of adjusted gross income limits. 2011 federal tax forms 1040 ez Losses that arose in the Hurricane Katrina disaster area after August 24, 2005, and that were caused by Hurricane Katrina. 2011 federal tax forms 1040 ez Losses that arose in the Hurricane Rita disaster area after September 22, 2005, and that were caused by Hurricane Rita. 2011 federal tax forms 1040 ez Losses that arose in the Hurricane Wilma disaster area after October 22, 2005, and that were caused by Hurricane Wilma. 2011 federal tax forms 1040 ez Qualifying losses include losses from flooding or other casualty, and from theft, that arose in the hurricane disaster area and that were caused by the hurricane. 2011 federal tax forms 1040 ez Special instructions for individuals who elect to claim a Hurricane Katrina, Rita, or Wilma casualty or theft loss for 2004. 2011 federal tax forms 1040 ez   Casualty and theft losses are generally deductible only in the year the casualty occurred or theft was discovered. 2011 federal tax forms 1040 ez However, Hurricane Katrina, Rita, and Wilma are Presidentially declared disasters. 2011 federal tax forms 1040 ez Therefore, you can elect to deduct losses from these hurricanes on your tax return for the previous year. 2011 federal tax forms 1040 ez If you make this election, use the following additional instructions to complete your forms. 2011 federal tax forms 1040 ez   Individuals filing or amending their 2004 tax return whose only casualty or theft losses to personal use property claimed on that return were caused by Hurricane Katrina, Rita, or Wilma should write “Hurricane Katrina,” “Hurricane Rita,” or “Hurricane Wilma” at the top of Form 1040 or 1040X. 2011 federal tax forms 1040 ez They must also complete and attach the 2004 Form 4684 and write “Hurricane Katrina,”“Hurricane Rita,” or “Hurricane Wilma” on the dotted line next to line 11 and enter -0- on lines 11 and 17. 2011 federal tax forms 1040 ez   Individuals filing or amending their 2004 tax return who also have casualty or theft losses to personal use property not related to Hurricane Katrina, Rita, or Wilma should disregard the caution directing taxpayers to use only one Form 4684, located above line 13, and complete lines 13 through 18 on two Forms 4684. 2011 federal tax forms 1040 ez The Form 1040 or 1040X and the first Form 4684 should be prepared as explained above for Hurricane Katrina, Rita, or Wilma losses only. 2011 federal tax forms 1040 ez The second Form 4684 should be prepared in the normal manner for all gains and non-Hurricane Katrina, Rita or Wilma losses. 2011 federal tax forms 1040 ez If both Forms 4684 have a loss on line 18, they should carry the combined losses from that line to Schedule A (Form 1040), line 19. 2011 federal tax forms 1040 ez If there is a gain on line 15 of the second Form 4684, disregard the instruction to enter it on Schedule D (Form 1040), and instead enter on Schedule A (Form 1040), line 19, the excess of the loss from the first Form 4684 over the gain on line 15 of the second Form 4684. 2011 federal tax forms 1040 ez , Time limit for making election. 2011 federal tax forms 1040 ez   You must make this election to claim your casualty or theft loss in 2004 by the later of the following dates. 2011 federal tax forms 1040 ez The due date (without extensions) for filing your 2005 income tax return. 2011 federal tax forms 1040 ez The due date (with extensions) for filing your 2004 income tax return. 2011 federal tax forms 1040 ez Example. 2011 federal tax forms 1040 ez If you are a calendar year individual taxpayer, you have until April 17, 2006, to amend your 2004 tax return to claim a casualty or theft loss that occurred during 2005. 2011 federal tax forms 1040 ez Replacement Period for Nonrecognition of Gain Generally, an involuntary conversion occurs when property is damaged, destroyed, stolen, seized, requisitioned, or condemned, and you receive other property or money in payment, such as insurance or a condemnation award. 2011 federal tax forms 1040 ez Generally, you do not have to report a gain (if any) if you replace the property within 2 years (4 years for a main home in a Presidentially declared disaster area). 2011 federal tax forms 1040 ez However, for property that was involuntarily converted after August 24, 2005, as a result of Hurricane Katrina, a 5-year replacement period applies if substantially all of the use of the replacement property is in the Hurricane Katrina disaster area. 2011 federal tax forms 1040 ez For more information, see the Instructions for Form 4684. 2011 federal tax forms 1040 ez Net Operating Losses Qualified GO Zone loss. 2011 federal tax forms 1040 ez   Generally, you can carry a net operating loss (NOL) back to the 2 tax years before the NOL year. 2011 federal tax forms 1040 ez However, the portion of an NOL that is a qualified GO Zone loss can be carried back to the 5 tax years before the NOL year. 2011 federal tax forms 1040 ez In addition, the 90% limit on the alternative tax NOL deduction (ATNOLD) does not apply to such portion of the ATNOLD. 2011 federal tax forms 1040 ez   A qualified GO Zone loss is the smaller of: The excess of the NOL for the year over the specified liability loss for the year to which a 10-year carryback applies, or The total of the following deductions (to the extent they are taken into account in computing the NOL for the tax year): Qualified GO Zone casualty loss (as defined below), Moving expenses paid or incurred after August 27, 2005, and before January 1, 2008, for the employment of an individual whose main home was in the GO Zone before August 28, 2005, who was unable to remain in that home because of Hurricane Katrina, and whose main job location (after the move) is in the GO Zone, Temporary housing expenses paid or incurred after August 27, 2005, and before January 1, 2008, to house employees of the taxpayer whose main job location is in the GO Zone, Depreciation or amortization allowable for any qualified GO Zone property (even if you elected not to claim the special GO Zone depreciation allowance for such property) for the year placed in service, and Repair expenses (including expenses for the removal of debris) paid or incurred after August 27, 2005, and before January 1, 2008, for any damage from Hurricane Katrina to property located in the GO Zone. 2011 federal tax forms 1040 ez Qualified GO Zone casualty loss. 2011 federal tax forms 1040 ez   A qualified GO Zone casualty loss is any deductible section 1231 loss of property located in the GO Zone if the loss was caused by Hurricane Katrina. 2011 federal tax forms 1040 ez For this purpose, the amount of the loss is reduced by any recognized gain from an involuntary conversion caused by Hurricane Katrina of property located in the GO Zone. 2011 federal tax forms 1040 ez Any such loss taken into account in figuring your qualified GO Zone loss is not eligible for the election to be treated as having occurred in the previous tax year. 2011 federal tax forms 1040 ez 5-year NOL carryback of certain timber losses. 2011 federal tax forms 1040 ez   Generally, you can carry the portion of an NOL due to income and deductions attributable to a farming business back to the 5 tax years before the NOL year. 2011 federal tax forms 1040 ez You can treat income and deductions attributable to qualified timber property as attributable to a farming business if any portion of the property is located in the GO Zone, Rita GO Zone, or Wilma GO Zone, and the income and deductions are allocable to the part of your tax year which is after the applicable date below. 2011 federal tax forms 1040 ez August 27, 2005, if any portion of the property is located in the GO Zone. 2011 federal tax forms 1040 ez September 22, 2005, if any portion of the property is located in the Rita GO Zone (but not in the GO Zone). 2011 federal tax forms 1040 ez October 22, 2005, if any portion of the property is located in the Wilma GO Zone (but not in the GO Zone or the RITA GO Zone). 2011 federal tax forms 1040 ez   These rules will not apply after 2006. 2011 federal tax forms 1040 ez   However, these rules apply only to a timber producer who: Held qualified timber property (defined in Publication 535, Business Expenses) on the applicable date below: August 28, 2005, if any portion of the property is located in the GO Zone, September 23, 2005, if any portion of the property is located in the Rita GO Zone (but not in the GO Zone), or October 23, 2005, if any portion of the property is located in the Wilma GO Zone (but not in the GO Zone or the Rita GO Zone); Is not a corporation with stock publicly traded on an established securities market; Is not a real estate investment trust; and Did not hold more than 500 acres of qualified timber property on the applicable date above. 2011 federal tax forms 1040 ez More information. 2011 federal tax forms 1040 ez   For more information on NOLs, see Publication 536 or Publication 542, Corporations. 2011 federal tax forms 1040 ez IRAs and Other Retirement Plans New rules provide for tax-favored withdrawals, repayments, and loans from certain retirement plans for taxpayers who suffered economic losses as a result of Hurricane Katrina, Rita, or Wilma. 2011 federal tax forms 1040 ez Definitions Qualified hurricane distribution. 2011 federal tax forms 1040 ez   A qualified hurricane distribution is any distribution you received from an eligible retirement plan if all of the following apply. 2011 federal tax forms 1040 ez The distribution was made: After August 24, 2005, and before January 1, 2007, for Hurricane Katrina; After September 22, 2005, and before January 1, 2007, for Hurricane Rita; or After October 22, 2005, and before January 1, 2007, for Hurricane Wilma. 2011 federal tax forms 1040 ez Your main home was located in a hurricane disaster area listed below on the date shown for that area. 2011 federal tax forms 1040 ez August 28, 2005, for the Hurricane Katrina disaster area. 2011 federal tax forms 1040 ez September 23, 2005, for the Hurricane Rita disaster area. 2011 federal tax forms 1040 ez October 23, 2005, for the Hurricane Wilma disaster area. 2011 federal tax forms 1040 ez You sustained an economic loss because of Hurricane Katrina, Rita, or Wilma and your main home was in that hurricane disaster area on the date shown in (2) above for that hurricane. 2011 federal tax forms 1040 ez Examples of an economic loss include, but are not limited to: Loss, damage to, or destruction of real or personal property from fire, flooding, looting, vandalism, theft, wind, or other cause; Loss related to displacement from your home; or Loss of livelihood due to temporary or permanent layoffs. 2011 federal tax forms 1040 ez   If (1) through (3) above apply, you can generally designate any distribution (including periodic payments and required minimum distributions) from an eligible retirement plan as a qualified hurricane distribution, regardless of whether the distribution was made on account of Hurricane Katrina, Rita, or Wilma. 2011 federal tax forms 1040 ez Qualified hurricane distributions are permitted without regard to your need or the actual amount of your economic loss. 2011 federal tax forms 1040 ez   The total of your qualified hurricane distributions from all plans is limited to $100,000. 2011 federal tax forms 1040 ez If you have distributions in excess of $100,000 from more than one type of plan, such as a 401(k) plan and an IRA, you may allocate the $100,000 limit among the plans any way you choose. 2011 federal tax forms 1040 ez   A reduction or offset (after August 24, 2005, for Katrina; after September 22, 2005, for Rita; or after October 22, 2005, for Wilma) of your account balance in an eligible retirement plan in order to repay a loan can also be designated as a qualified hurricane distribution. 2011 federal tax forms 1040 ez Eligible retirement plan. 2011 federal tax forms 1040 ez   An eligible retirement plan can be any of the following. 2011 federal tax forms 1040 ez A qualified pension, profit-sharing, or stock bonus plan (including a 401(k) plan). 2011 federal tax forms 1040 ez A qualified annuity plan. 2011 federal tax forms 1040 ez A tax-sheltered annuity contract. 2011 federal tax forms 1040 ez A governmental section 457 deferred compensation plan. 2011 federal tax forms 1040 ez A traditional, SEP, SIMPLE, or Roth IRA. 2011 federal tax forms 1040 ez Main home. 2011 federal tax forms 1040 ez   Generally, your main home is the home where you live most of the time. 2011 federal tax forms 1040 ez A temporary absence due to special circumstances, such as illness, education, business, military service, evacuation, or vacation, will not change your main home. 2011 federal tax forms 1040 ez Taxation of Qualified Hurricane Distributions Qualified hurricane distributions are included in income in equal amounts over three years. 2011 federal tax forms 1040 ez However, if you elect, you can include the entire distribution in your income in the year it was received. 2011 federal tax forms 1040 ez Qualified hurricane distributions are not subject to the additional 10% tax (or the additional 25% tax for certain distributions from SIMPLE IRAs) on early distributions from qualified retirement plans (including IRAs). 2011 federal tax forms 1040 ez However, any distributions you receive in excess of the $100,000 qualified hurricane distribution limit may be subject to the additional tax on early distributions. 2011 federal tax forms 1040 ez For more information, see Form 8915. 2011 federal tax forms 1040 ez Repayment of Qualified Hurricane Distributions If you choose, you generally can repay any portion of a qualified hurricane distribution that is eligible for tax-free rollover treatment to an eligible retirement plan. 2011 federal tax forms 1040 ez Also, you can repay a qualified hurricane distribution made on account of a hardship from a retirement plan. 2011 federal tax forms 1040 ez However, see Exceptions below for qualified hurricane distributions you cannot repay. 2011 federal tax forms 1040 ez You have three years from the day after the date you received the distribution to make a repayment. 2011 federal tax forms 1040 ez Amounts that are repaid are treated as a qualified rollover and are not included in income. 2011 federal tax forms 1040 ez Also, for purposes of the one-rollover-per-year limitation for IRAs, a repayment to an IRA is not considered a qualified rollover. 2011 federal tax forms 1040 ez See Form 8915 for more information on how to report repayments. 2011 federal tax forms 1040 ez Exceptions. 2011 federal tax forms 1040 ez   You cannot repay the following types of distributions. 2011 federal tax forms 1040 ez Qualified hurricane distributions received as a beneficiary (other than a surviving spouse). 2011 federal tax forms 1040 ez Required minimum distributions. 2011 federal tax forms 1040 ez Periodic payments (other than from an IRA) that are for: A period of 10 years or more, Your life or life expectancy, or The joint lives or joint life expectancies of you and your beneficiary. 2011 federal tax forms 1040 ez Repayment of Qualified Distributions for the Purchase or Construction of a Main Home If you received a qualified distribution to purchase or construct a main home in the Hurricane Katrina, Rita, or Wilma disaster area, you can repay that distribution before March 1, 2006, to an eligible retirement plan after August 24, 2005 (Katrina); after September 22, 2005 (Rita); or after October 22, 2005 (Wilma). 2011 federal tax forms 1040 ez For this purpose, an eligible retirement plan is any plan, annuity, or IRA to which a qualified rollover can be made. 2011 federal tax forms 1040 ez To be a qualified distribution, the distribution must meet all of the following requirements. 2011 federal tax forms 1040 ez The distribution is a hardship distribution from a 401(k) plan, a hardship distribution from a tax-sheltered annuity contract, or a qualified first-time homebuyer distribution from an IRA. 2011 federal tax forms 1040 ez The distribution was received in 2005 after February 28 and before: August 29 for Hurricane Katrina; September 24 for Hurricane Rita; or October 24 for Hurricane Wilma. 2011 federal tax forms 1040 ez The distribution was to be used to purchase or construct a main home in the Hurricane Katrina, Rita, or Wilma disaster area that was not purchased or constructed because of Hurricane Katrina, Rita, or Wilma. 2011 federal tax forms 1040 ez Amounts that are repaid before March 1, 2006, are treated as a qualified rollover and are not included in income. 2011 federal tax forms 1040 ez Also, for purposes of the one-rollover-per-year limitation for IRAs, a repayment to an IRA is not considered a qualified rollover. 2011 federal tax forms 1040 ez A qualified distribution not repaid before March 1, 2006, may be taxable for 2005 and subject to the additional 10% tax (or the additional 25% tax for certain SIMPLE IRAs) on early distributions. 2011 federal tax forms 1040 ez You must file Form 8915 if you received a qualified distribution that you repaid, in whole or in part, before March 1, 2006. 2011 federal tax forms 1040 ez Loans From Qualified Plans The following benefits are available to qualified individuals. 2011 federal tax forms 1040 ez Increases to the limits for distributions treated as loans from employer plans. 2011 federal tax forms 1040 ez A 1-year suspension for payments due on plan loans. 2011 federal tax forms 1040 ez Qualified individual. 2011 federal tax forms 1040 ez   You are a qualified individual if any of the following apply. 2011 federal tax forms 1040 ez Your main home on August 28, 2005, was located in the Hurricane Katrina disaster area and you had an economic loss because of Hurricane Katrina. 2011 federal tax forms 1040 ez Your main home on September 23, 2005, was located in the Hurricane Rita disaster area and you had an economic loss because of Hurricane Rita. 2011 federal tax forms 1040 ez Your main home on October 23, 2005, was located in the Hurricane Wilma disaster area and you had an economic loss because of Hurricane Wilma. 2011 federal tax forms 1040 ez Examples of an economic loss include, but are not limited to: Loss, damage to, or destruction of real or personal property from fire, flooding, looting, vandalism, theft, wind, or other cause; Loss related to displacement from your home; or Loss of livelihood due to temporary or permanent layoffs. 2011 federal tax forms 1040 ez Limits on plan loans. 2011 federal tax forms 1040 ez   The $50,000 limit for distributions treated as plan loans is increased to $100,000. 2011 federal tax forms 1040 ez In addition, the limit based on 50% of your vested accrued benefit is increased to 100% of that benefit. 2011 federal tax forms 1040 ez The higher limits apply only to loans received during the following period. 2011 federal tax forms 1040 ez If your main home was located in the Hurricane Katrina disaster area, the period began on September 24, 2005, and ends on December 31, 2006. 2011 federal tax forms 1040 ez If your main home was located in the Hurricane Rita or Wilma disaster area, the period began on December 21, 2005, and ends on December 31, 2006. 2011 federal tax forms 1040 ez If you are a qualified individual based on Hurricane Katrina and another hurricane, use the period based on Hurricane Katrina. 2011 federal tax forms 1040 ez One-year suspension of loan payments. 2011 federal tax forms 1040 ez   Payments on plan loans due before 2007 may be suspended for 1 year by the plan administrator. 2011 federal tax forms 1040 ez To qualify for the suspension, the due date for any loan payment must occur during the period beginning on: August 28, 2005, if your main home was located in the Hurricane Katrina disaster area. 2011 federal tax forms 1040 ez September 23, 2005, if your main home was located in the Hurricane Rita disaster area. 2011 federal tax forms 1040 ez October 23, 2005, if your main home was located in the Hurricane Wilma disaster area. 2011 federal tax forms 1040 ez If you are a qualified individual based on more than one hurricane, use the period with the earliest beginning date. 2011 federal tax forms 1040 ez Additional Tax Relief for Individuals Earned Income Credit and Child Tax Credit You can elect to use your 2004 earned income to figure your earned income credit (EIC) and additional child tax credit for 2005 if: Your 2005 earned income is less than your 2004 earned income, and At least one of the following statements is true. 2011 federal tax forms 1040 ez Your main home on August 25, 2005, was in the Gulf Opportunity (GO) Zone. 2011 federal tax forms 1040 ez Your main home on August 25, 2005, was in the Hurricane Katrina disaster area and you were displaced from that home because of Hurricane Katrina. 2011 federal tax forms 1040 ez Your main home on September 23, 2005, was in the Rita GO Zone. 2011 federal tax forms 1040 ez Your main home on September 23, 2005, was in the Hurricane Rita disaster area and you were displaced from that home because of Hurricane Rita. 2011 federal tax forms 1040 ez Your main home on October 23, 2005, was in the Wilma GO Zone. 2011 federal tax forms 1040 ez Your main home on October 23, 2005, was in the Hurricane Wilma disaster area and you were displaced from that home because of Hurricane Wilma. 2011 federal tax forms 1040 ez Earned income. 2011 federal tax forms 1040 ez    For the purpose of this election, your earned income for both the EIC and the additional child tax credit is the amount of earned income used to figure your EIC, even if you did not take the EIC and even if that amount is different than your earned income for the additional child tax credit. 2011 federal tax forms 1040 ez If you are claiming only the additional child tax credit, you must figure the amount of your earned income for EIC purposes to determine your eligibility to make the election and the amount of the credit. 2011 federal tax forms 1040 ez Joint returns. 2011 federal tax forms 1040 ez   If you file a joint return, you qualify to make this election even if only one spouse meets the requirements. 2011 federal tax forms 1040 ez If you make the election, your 2004 earned income is the sum of your 2004 earned income and your spouse's 2004 earned income. 2011 federal tax forms 1040 ez Making the election. 2011 federal tax forms 1040 ez   If you make the election to use your 2004 earned income, the election applies for figuring both the EIC and the additional child tax credit. 2011 federal tax forms 1040 ez However, you can make the election for the additional child tax credit even if you do not take the EIC. 2011 federal tax forms 1040 ez   Electing to use your 2004 earned income may increase or decrease your EIC. 2011 federal tax forms 1040 ez Take the following steps to decide whether to make the election. 2011 federal tax forms 1040 ez Figure your 2005 EIC using your 2004 earned income. 2011 federal tax forms 1040 ez Figure your 2005 additional child tax credit using your 2004 earned income for EIC purposes. 2011 federal tax forms 1040 ez Add the results of (1) and (2). 2011 federal tax forms 1040 ez Figure your 2005 EIC using your 2005 earned income. 2011 federal tax forms 1040 ez Figure your 2005 additional child tax credit using your 2005 earned income for additional child tax credit purposes. 2011 federal tax forms 1040 ez Add the results of (4) and (5). 2011 federal tax forms 1040 ez Compare the results of (3) and (6). 2011 federal tax forms 1040 ez If (3) is larger than (6), it is to your benefit to make the election. 2011 federal tax forms 1040 ez If (3) is equal to or smaller than (6), making the election will not help you. 2011 federal tax forms 1040 ez   If you elect to use your 2004 earned income and you are claiming the EIC, enter “PYEI” and the amount of your 2004 earned income on the dotted line next to line 66a of Form 1040, on the line next to line 41a of Form 1040A, or in the space to the left of line 8a of Form 1040EZ. 2011 federal tax forms 1040 ez   If you elect to use your 2004 earned income and you are claiming the additional child tax credit, enter your 2004 earned income for EIC purposes (even if you did not claim the EIC) on Form 8812, Additional Child Tax Credit, line 4a, and check the box on that line. 2011 federal tax forms 1040 ez   Because Form 8812 was released before the GO Zone legislation was enacted, the instructions refer only to individuals whose main home was in the Hurricane Katrina disaster area. 2011 federal tax forms 1040 ez When completing Form 8812, line 4a, use the above rules to determine your eligibility to make the election (instead of the Form 8812 instructions). 2011 federal tax forms 1040 ez Getting your 2004 tax return information. 2011 federal tax forms 1040 ez   If you do not have your 2004 tax records, you can get the amount of earned income used to figure your 2004 EIC by calling 1-866-562-5227. 2011 federal tax forms 1040 ez You can also get this information by visiting the IRS website at www. 2011 federal tax forms 1040 ez irs. 2011 federal tax forms 1040 ez gov. 2011 federal tax forms 1040 ez   If you prefer to figure your 2004 earned income yourself, copies or transcripts of your filed and processed tax returns can help you reconstruct your tax records. 2011 federal tax forms 1040 ez See Request for Copy or Transcript of Tax Return on page 16. 2011 federal tax forms 1040 ez Additional Exemption for Housing Individuals Displaced by Hurricane Katrina You may be able to claim an additional exemption amount of $500 for providing housing in your main home for each individual displaced by Hurricane Katrina. 2011 federal tax forms 1040 ez The additional exemption amount is claimed on new Form 8914. 2011 federal tax forms 1040 ez The additional exemption amount is allowable once per taxpayer for a specific individual in 2005 or 2006, but not in both years. 2011 federal tax forms 1040 ez The maximum additional exemption amount you can claim for all displaced individuals is $2,000 ($1,000 if married filing separately). 2011 federal tax forms 1040 ez The additional exemption amount you claim for displaced individuals in 2005 will reduce the $2,000 maximum for 2006. 2011 federal tax forms 1040 ez If two or more taxpayers share the same main home, only one taxpayer in that main home can claim the additional exemption amount for a specific displaced individual. 2011 federal tax forms 1040 ez If married filing separately, only one spouse may claim the additional exemption amount for a specific displaced individual. 2011 federal tax forms 1040 ez In order for you to be considered to have provided housing, you must have a legal interest in the main home (that is, own or rent the home). 2011 federal tax forms 1040 ez To qualify as a displaced individual, the individual: Must have had his or her main home in the Hurricane Katrina disaster area on August 28, 2005, and he or she must have been displaced from that home. 2011 federal tax forms 1040 ez If the individual's main home was located outside the core disaster area, that home must have been damaged by Hurricane Katrina or the individual must have been evacuated from that home because of Hurricane Katrina, Must have been provided housing in your main home for a period of at least 60 consecutive days ending in the tax year in which the exemption is claimed, and Cannot be your spouse or dependent. 2011 federal tax forms 1040 ez You cannot claim the additional exemption amount if you received rent (or any other amount) from any source for providing the housing. 2011 federal tax forms 1040 ez You are permitted to receive payments or reimbursements that do not relate to normal housing costs, including the following. 2011 federal tax forms 1040 ez Food, clothing, or personal items consumed or used by the displaced individual. 2011 federal tax forms 1040 ez Reimbursement for the cost of any long distance telephone calls made by the displaced individual. 2011 federal tax forms 1040 ez Reimbursement for the cost of gasoline for the displaced individual's use of your vehicle. 2011 federal tax forms 1040 ez However, you cannot claim the additional exemption amount if you received any reimbursement for the extra costs of heat, electricity, or water used by the displaced individual. 2011 federal tax forms 1040 ez Also, you must report on Form 8914 the displaced individual's social security number or individual taxpayer identification number to claim an additional exemption amount. 2011 federal tax forms 1040 ez For more information, see Form 8914. 2011 federal tax forms 1040 ez Education Credits The education credits have been expanded for students attending an eligible educational institution located in the Gulf Opportunity Zone (GOZ students) for any tax year beginning in 2005 or 2006. 2011 federal tax forms 1040 ez The Hope credit for a GOZ student is increased to 100% of the first $2,000 in qualified education expenses and 50% of the next $2,000 of qualified education expenses for a maximum credit of $3,000 per student. 2011 federal tax forms 1040 ez The lifetime learning credit rate for a GOZ student is increased from 20% to 40%. 2011 federal tax forms 1040 ez The definition of qualified education expenses for a GOZ student also has been expanded. 2011 federal tax forms 1040 ez In addition to tuition and fees required for the student's enrollment or attendance at an eligible educational institution, qualified education expenses for a GOZ student include the following. 2011 federal tax forms 1040 ez Books, supplies, and equipment required for enrollment or attendance at an eligible educational institution. 2011 federal tax forms 1040 ez For a special needs student, expenses that are necessary for that person's enrollment or attendance at an eligible educational institution. 2011 federal tax forms 1040 ez For a student who is at least a half-time student, the reasonable costs of room and board, but only to the extent that the costs are not more than the greater of the following two amounts. 2011 federal tax forms 1040 ez The allowance for room and board, as determined by the eligible educational institution, that was included in the cost of attendance (for federal financial aid purposes) for a particular academic period and living arrangement of the student. 2011 federal tax forms 1040 ez The actual amount charged if the student is residing in housing owned or operated by the eligible educational institution. 2011 federal tax forms 1040 ez You will need to contact the eligible educational institution for qualified room and board costs. 2011 federal tax forms 1040 ez For more information, see Form 8863. 2011 federal tax forms 1040 ez Recapture of Federal Mortgage Subsidy Generally, if you financed your home under a federally subsidized program (loans from tax-exempt qualified mortgage bonds or loans with mortgage credit certificates), you may have to recapture all or part of the benefit you received from that program when you sell or otherwise dispose of your home. 2011 federal tax forms 1040 ez However, you do not have to recapture any benefit if your mortgage loan was a qualified home improvement loan of not more than $15,000. 2011 federal tax forms 1040 ez This amount is increased to $150,000 if the loan was provided before 2011 and was used to: Repair damage caused by Hurricane Katrina to a residence in the Hurricane Katrina disaster area, or Alter, repair, or improve an existing owner-occupied residence in the GO Zone, Rita GO Zone, or Wilma GO Zone. 2011 federal tax forms 1040 ez Exclusion of Certain Cancellations of Indebtedness by Reason of Hurricane Katrina Generally, discharges of nonbusiness debts (such as mortgages) made after August 24, 2005, and before January 1, 2007, are excluded from income for individuals whose main home was in the Hurricane Katrina disaster area on August 25, 2005. 2011 federal tax forms 1040 ez If the individual's main home was located outside the core disaster area, the individual also must have had an economic loss because of Hurricane Katrina. 2011 federal tax forms 1040 ez Examples of an economic loss include, but are not limited to: Loss, damage to, or destruction of real or personal property from fire, flooding, looting, vandalism, theft, wind, or other cause; Loss related to displacement from your home; or Loss of livelihood due to temporary or permanent layoffs. 2011 federal tax forms 1040 ez This relief does not apply to any debt secured by real property located outside the Hurricane Katrina disaster area. 2011 federal tax forms 1040 ez You may also have to reduce certain tax attributes by the amount excluded. 2011 federal tax forms 1040 ez For more information, see Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment). 2011 federal tax forms 1040 ez Tax Relief for Temporary Relocation Under the Gulf Opportunity Zone Act of 2005, the IRS may adjust the internal revenue laws to ensure that taxpayers do not lose a deduction or credit or experience a change of filing status in 2005 or 2006 as a result of a temporary relocation caused by Hurricane Katrina, Rita, or Wilma. 2011 federal tax forms 1040 ez However, any such adjustment must ensure that an individual is not taken into account by more than one taxpayer for the same tax benefit. 2011 federal tax forms 1040 ez The IRS has exercised this authority as follows. 2011 federal tax forms 1040 ez In determining whether you furnished over one-half of the cost of maintaining a household, you can exclude from total household costs any assistance received from the government or charitable organizations because you were temporarily relocated as a result of Hurricane Katrina, Rita, or Wilma. 2011 federal tax forms 1040 ez In determining whether you provided more than one-half of an individual's support, you can disregard any assistance received from the government or charitable organizations because you were temporarily relocated as a result of Hurricane Katrina, Rita, or Wilma. 2011 federal tax forms 1040 ez You can treat as a student an individual who enrolled in school before August 25, 2005, and who is unable to attend classes because of Hurricane Katrina, for each month of the enrollment period that individual is prevented by Hurricane Katrina from attending school as planned. 2011 federal tax forms 1040 ez You can treat as a student an individual who enrolled in school before September 23, 2005, and who is unable to attend classes because of Hurricane Rita, for each month of the enrollment period that individual is prevented by Hurricane Rita from attending school as planned. 2011 federal tax forms 1040 ez You can treat as a student an individual who enrolled in school before October 23, 2005, and who is unable to attend classes because of Hurricane Wilma, for each month of the enrollment period that individual is prevented by Hurricane Wilma from attending school as planned. 2011 federal tax forms 1040 ez Additional Tax Relief for Businesses Special Depreciation Allowance You can take a special depreciation allowance for qualified Gulf Opportunity (GO) Zone property (as defined below) you place in service after August 27, 2005. 2011 federal tax forms 1040 ez The allowance is an additional deduction of 50% of the property's depreciable basis (after any section 179 deduction and before figuring your regular depreciation deduction). 2011 federal tax forms 1040 ez The special allowance applies only for the first year the property is placed in service. 2011 federal tax forms 1040 ez The allowance is deductible for both the regular tax and the alternative minimum tax (AMT). 2011 federal tax forms 1040 ez There is no AMT adjustment required for any depreciation figured on the remaining basis of the property. 2011 federal tax forms 1040 ez You can elect not to deduct the special GO Zone depreciation allowance for qualified property. 2011 federal tax forms 1040 ez If you make this election for any property, it applies to all property in the same class placed in service during the year. 2011 federal tax forms 1040 ez Qualified GO Zone property. 2011 federal tax forms 1040 ez   Property that qualifies for the special GO Zone depreciation allowance includes the following. 2011 federal tax forms 1040 ez Tangible property depreciated under the modified accelerated cost recovery system (MACRS) with a recovery period of 20 years or less. 2011 federal tax forms 1040 ez Water utility property. 2011 federal tax forms 1040 ez Computer software that is readily available for purchase by the general public, is subject to a nonexclusive license, and has not been substantially modified. 2011 federal tax forms 1040 ez (The cost of some computer software is treated as part of the cost of hardware and is depreciated under MACRS. 2011 federal tax forms 1040 ez ) Qualified leasehold improvement property. 2011 federal tax forms 1040 ez Nonresidential real property and residential rental property. 2011 federal tax forms 1040 ez   For more information on this property, see Publication 946. 2011 federal tax forms 1040 ez Other tests to be met. 2011 federal tax forms 1040 ez   To be qualified GO Zone property, the property must also meet all of the following tests. 2011 federal tax forms 1040 ez You must have acquired the property, by purchase, after August 27, 2005, but only if no binding written contract for the acquisition was in effect before August 28, 2005. 2011 federal tax forms 1040 ez The property must be placed in service before 2008 (2009 in the case of nonresidential real property and residential rental property). 2011 federal tax forms 1040 ez Substantially all of the use of the property must be in the GO Zone and in the active conduct of your trade or business in the GO Zone. 2011 federal tax forms 1040 ez The original use of the property in the GO Zone must begin with you after August 27, 2005. 2011 federal tax forms 1040 ez Used property can be qualified GO Zone property if it has not previously been used within the GO Zone. 2011 federal tax forms 1040 ez Also, additional capital expenditures you incurred after August 27, 2005, to recondition or rebuild your property meet the original use test if the original use of the property in the GO Zone began with you. 2011 federal tax forms 1040 ez Excepted property. 2011 federal tax forms 1040 ez   Qualified GO Zone property does not include any of the following. 2011 federal tax forms 1040 ez Property required to be depreciated using the Alternative Depreciation System (ADS). 2011 federal tax forms 1040 ez Property any portion of which is financed with the proceeds of a tax-exempt obligation under section 103. 2011 federal tax forms 1040 ez Property for which you are claiming a commercial revitalization deduction. 2011 federal tax forms 1040 ez Any property used in connection with any private or commercial golf course, country club, massage parlor, hot tub facility, suntan facility, or any store, the principal business of which is the sale of alcoholic beverages for consumption off premises. 2011 federal tax forms 1040 ez Any gambling or animal racing property (as defined below). 2011 federal tax forms 1040 ez Property in the same class as that for which you elected not to claim the special GO Zone depreciation allowance. 2011 federal tax forms 1040 ez   Gambling or animal racing property is: Any equipment, furniture, software, or other property used directly in connection with gambling, the racing of animals, or the on-site viewing of such racing, and The portion of any real property (determined by square footage) that is dedicated to gambling, the racing of animals, or the on-site viewing of such racing, unless this portion is less than 100 square feet. 2011 federal tax forms 1040 ez Recapture of special allowance. 2011 federal tax forms 1040 ez   If, in any year after the year you claim the special allowance, the property ceases to be qualified GO Zone property, you may have to recapture as ordinary income any excess benefit you received from claiming the special allowance. 2011 federal tax forms 1040 ez Increased Section 179 Deduction An increased section 179 deduction is allowable for qualified section 179 Gulf Opportunity (GO) Zone property (as defined later) placed in service in the GO Zone. 2011 federal tax forms 1040 ez Increased dollar limit. 2011 federal tax forms 1040 ez   The limit on the section 179 deduction ($105,000 for 2005, $108,000 for 2006) for qualified section 179 GO Zone property acquired after August 27, 2005, is increased by the smaller of: $100,000, or The cost of qualified section 179 GO Zone property placed in service during the year (including such property placed in service by your spouse, even if you are filing a separate return). 2011 federal tax forms 1040 ez   The amount for which you can make the election is reduced if the cost of all qualified section 179 GO Zone property you placed in service during the year exceeds $420,000 for 2005 ($430,000 for 2006) increased by the smaller of: $600,000, or The cost of qualified section 179 GO Zone property placed in service during the year. 2011 federal tax forms 1040 ez Qualified section 179 GO Zone property. 2011 federal tax forms 1040 ez   Qualified section 179 GO Zone property is section 179 property that is qualified GO Zone property (explained earlier under Special Depreciation Allowance). 2011 federal tax forms 1040 ez Section 179 property does not include nonresidential real property or residential rental property. 2011 federal tax forms 1040 ez For more information, including the requirements that must be met for property to qualify for the section 179 deduction, see chapter 2 of Publication 946. 2011 federal tax forms 1040 ez Work Opportunity Credit For the work opportunity credit, the definition of “targeted group employee” has been expanded to include a Hurricane Katrina employee. 2011 federal tax forms 1040 ez Hurricane Katrina employee. 2011 federal tax forms 1040 ez   A Hurricane Katrina employee is: A person who, on August 28, 2005, had a main home in the core disaster area and, within a two-year period beginning on that date, is hired to perform services principally in the core disaster area; or A person who, on August 28, 2005, had a main home in the core disaster area, was displaced from that main home as a result of Hurricane Katrina, and was hired during the period beginning on August 28, 2005, and ending on December 31, 2005. 2011 federal tax forms 1040 ez Qualified wages. 2011 federal tax forms 1040 ez   Generally, qualified wages do not include wages you paid to a targeted group employee who worked for you previously. 2011 federal tax forms 1040 ez However, wages will qualify if: You paid them to an employee who is a Hurricane Katrina employee, The employee was not in your employment on August 28, 2005, and This is your first hire of the employee as a Hurricane Katrina employee after August 28, 2005. 2011 federal tax forms 1040 ez   For more information, see Form 5884. 2011 federal tax forms 1040 ez Certification requirements. 2011 federal tax forms 1040 ez   An employee must provide to the employer reasonable evidence that he or she is a Hurricane Katrina employee. 2011 federal tax forms 1040 ez An employer may accept a completed Form 8850, Pre-Screening Notice and Certification Request for the Work Opportunity and Welfare-to-Work Credits, as such evidence. 2011 federal tax forms 1040 ez The certification requirements described in Form 8850 do not apply to a Hurricane Katrina employee. 2011 federal tax forms 1040 ez Do not send any Forms 8850 that have only box 1 checked to the state employment security agency. 2011 federal tax forms 1040 ez Instead, the employer should keep these Forms 8850 with the employer's other records. 2011 federal tax forms 1040 ez For more information, see Form 8850 and its instructions. 2011 federal tax forms 1040 ez Employee Retention Credit An eligible employer who conducted an active trade or business in the Gulf Opportunity (GO) Zone, the Rita GO Zone, or the Wilma GO Zone can claim the employee retention credit. 2011 federal tax forms 1040 ez The credit is 40% of qualified wages for each eligible employee (up to a maximum of $6,000 in qualified wages per employee). 2011 federal tax forms 1040 ez Generally, you must reduce your deduction for salaries and wages by the amount of this credit (before the tax liability limit). 2011 federal tax forms 1040 ez Use Form 5884-A to claim the credit. 2011 federal tax forms 1040 ez See the following rules and definitions for each hurricane. 2011 federal tax forms 1040 ez Employers affected by Hurricane Katrina. 2011 federal tax forms 1040 ez   The following definitions apply to employers affected by Hurricane Katrina. 2011 federal tax forms 1040 ez Eligible employer. 2011 federal tax forms 1040 ez   For this purpose, an eligible employer is any employer who conducted an active trade or business on August 28, 2005, in the GO Zone and whose trade or business was inoperable on any day after August 28, 2005, and before January 1, 2006, because of damage caused by Hurricane Katrina. 2011 federal tax forms 1040 ez Eligible employee. 2011 federal tax forms 1040 ez   For this purpose, an eligible employee is an employee whose principal place of employment on August 28, 2005, with such eligible employer was in the GO Zone. 2011 federal tax forms 1040 ez An employee is not an eligible employee for purposes of Hurricane Katrina if the employee is treated as an eligible employee for the work opportunity credit. 2011 federal tax forms 1040 ez Employers affected by Hurricane Rita. 2011 federal tax forms 1040 ez   The following definitions apply to employers affected by Hurricane Rita. 2011 federal tax forms 1040 ez Eligible employer. 2011 federal tax forms 1040 ez   For this purpose, an eligible employer is any employer who conducted an active trade or business on September 23, 2005, in the Rita GO Zone and whose trade or business was inoperable on any day after September 23, 2005, and before January 1, 2006, because of damage caused by Hurricane Rita. 2011 federal tax forms 1040 ez Eligible employee. 2011 federal tax forms 1040 ez   For this purpose, an eligible employee is an employee whose principal place of employment on September 23, 2005, with such eligible employer was in the Rita GO Zone. 2011 federal tax forms 1040 ez An employee is not an eligible employee for purposes of Hurricane Rita if the employee is treated as an eligible employee for the work opportunity credit or the Hurricane Katrina employee retention credit. 2011 federal tax forms 1040 ez Employers affected by Hurricane Wilma. 2011 federal tax forms 1040 ez   The following definitions apply to employers affected by Hurricane Wilma. 2011 federal tax forms 1040 ez Eligible employer. 2011 federal tax forms 1040 ez   For this purpose, an eligible employer is any employer who conducted an active trade or business on October 23, 2005, in the Wilma GO Zone and whose trade or business was inoperable on any day after October 23, 2005, and before January 1, 2006, because of damage caused by Hurricane Wilma. 2011 federal tax forms 1040 ez Eligible employee. 2011 federal tax forms 1040 ez   For this purpose, an eligible employee is an employee whose principal place of employment on October 23, 2005, with such eligible employer was in the Wilma GO Zone. 2011 federal tax forms 1040 ez An employee is not an eligible employee for purposes of Hurricane Wilma if the employee is treated as an eligible employee for the work opportunity credit or the Hurricane Katrina or Rita employee retention credit. 2011 federal tax forms 1040 ez Qualified wages. 2011 federal tax forms 1040 ez   Qualified wages are wages you paid or incurred before January 1, 2006, (up to $6,000 per employee) for an eligible employee beginning on the date your trade or business first became inoperable at the employee's principal place of employment immediately before the applicable hurricane, and ending on the date your trade or business resumed significant operations at that place. 2011 federal tax forms 1040 ez In addition, the wages must have been paid or incurred after the following date. 2011 federal tax forms 1040 ez August 28, 2005, for Hurricane Katrina. 2011 federal tax forms 1040 ez September 23, 2005, for Hurricane Rita. 2011 federal tax forms 1040 ez October 23, 2005, for Hurricane Wilma. 2011 federal tax forms 1040 ez    This includes wages paid even if the employee performed no services, performed services at a place of employment other than the principal place of employment, or performed services at the principal place of employment before significant operations resumed. 2011 federal tax forms 1040 ez    Wages qualifying for the credit generally have the same meaning as wages subject to the Federal Unemployment Tax Act (FUTA). 2011 federal tax forms 1040 ez Qualified wages also include amounts you paid for medical or hospitalization expenses in connection with sickness or accident disability. 2011 federal tax forms 1040 ez Qualified wages for any employee must be reduced by the amount of any work supplementation payment you received under the Social Security Act. 2011 federal tax forms 1040 ez   For agricultural employees, if the work performed by any employee during more than half of any pay period qualified under FUTA as agricultural labor, that employee's wages subject to social security and Medicare taxes are qualified wages. 2011 federal tax forms 1040 ez For a special rule that applies to railroad employees, see section 51(h)(1)(B). 2011 federal tax forms 1040 ez   Qualified wages do not include the following. 2011 federal tax forms 1040 ez Wages paid to your dependent or a related individual. 2011 federal tax forms 1040 ez See section 51(i)(1). 2011 federal tax forms 1040 ez Wages paid to any employee during the period for which you received payment for the employee from a federally funded on-the-job training program. 2011 federal tax forms 1040 ez Wages for services of replacement workers during a strike or lockout. 2011 federal tax forms 1040 ez   For more information, see Form 5884-A. 2011 federal tax forms 1040 ez Hurricane Katrina Housing Credit An employer who conducted an active trade or business in the Gulf Opportunity (GO) Zone can claim the Hurricane Katrina housing credit. 2011 federal tax forms 1040 ez The credit is equal to 30% of the value (up to $600 per month per employee) of in-kind lodging furnished to a qualified employee (and the employee's spouse or dependents) from January 1, 2006, through July 1, 2006. 2011 federal tax forms 1040 ez The value of the lodging is excluded from the income of the qualified employee but is treated as wages for purposes of taxes imposed under the Federal Insurance Contributions Act (FICA) and the Federal Unemployment Tax Act (FUTA). 2011 federal tax forms 1040 ez Generally, you must reduce your deduction for salaries and wages by the amount of this credit (before the tax liability limit). 2011 federal tax forms 1040 ez The employer must use Form 5884-A to claim the credit. 2011 federal tax forms 1040 ez A qualified employee is an individual who had a main home in the GO Zone on August 28, 2005, and who performs substantially all employment services in the GO Zone for the employer furnishing the lodging. 2011 federal tax forms 1040 ez The employee cannot be your dependent or a related individual. 2011 federal tax forms 1040 ez See section 51(i)(1). 2011 federal tax forms 1040 ez For more information, see Form 5884-A. 2011 federal tax forms 1040 ez Reforestation Costs You may be able to elect to deduct a limited amount of reforestation costs for each qualified timber property. 2011 federal tax forms 1040 ez The deduction for any tax year generally is limited to $10,000 ($5,000 if married filing separately, $0 for a trust). 2011 federal tax forms 1040 ez However, this limit is increased if you paid or incurred reforestation costs after the applicable date below and any portion of the qualified timber property is located in one of the following areas. 2011 federal tax forms 1040 ez August 27, 2005, if any portion of the property is located in the GO Zone. 2011 federal tax forms 1040 ez September 22, 2005, if any portion of the property is located in the Rita GO Zone (but not in the GO Zone). 2011 federal tax forms 1040 ez October 22, 2005, if any portion of the property is located in the Wilma GO Zone. 2011 federal tax forms 1040 ez The limit for each qualified timber property is increased by the smaller of: $10,000 ($5,000 if married filing separately, $0 for a trust), or The amount of reforestation costs you paid or incurred after the applicable date for the qualified timber property, any portion of which is located in the zone described above. 2011 federal tax forms 1040 ez The increase in the limit applies only to costs paid or incurred before 2008. 2011 federal tax forms 1040 ez However, these rules do not apply to any timber producer who: Held more than 500 acres of qualified timber property at any time during the tax year, Is a corporation with stock publicly traded on an established securities market, or Is a real estate investment trust. 2011 federal tax forms 1040 ez For more information about the election to deduct reforestation costs, see chapter 8 in Publication 535, Business Expenses. 2011 federal tax forms 1040 ez Demolition and Clean-up Costs You can elect to deduct 50% of any qualified GO Zone clean-up costs for the tax year in which the costs are paid or incurred, instead of capitalizing them. 2011 federal tax forms 1040 ez Qualified GO Zone clean-up costs are any amounts paid or incurred after August 27, 2005, and before January 1, 2008, for the removal of debris from, or the demolition of structures on, real property located in the GO Zone that is: Held by you for use in a trade or business or for the production of income, or Inventory or other property held primarily for sale to customers in the ordinary course of your trade or business. 2011 federal tax forms 1040 ez Increase in Rehabilitation Tax Credit The rehabilitation credit is increased for qualified rehabilitation expenditures paid or incurred after August 27, 2005, and before January 1, 2009, on buildings located in the GO Zone as follows. 2011 federal tax forms 1040 ez For pre-1936 buildings (other than certified historic structures), the credit percentage is increased from 10% to 13%. 2011 federal tax forms 1040 ez For certified historic structures, the credit percentage is increased from 20% to 26%. 2011 federal tax forms 1040 ez For more information, see Form 3468, Investment Credit. 2011 federal tax forms 1040 ez Request for Copy or Transcript of Tax Return Request for copy of tax return. 2011 federal tax forms 1040 ez   You can use Form 4506 to order a copy of your tax return. 2011 federal tax forms 1040 ez Generally, there is a $39. 2011 federal tax forms 1040 ez 00 fee for requesting each copy of a tax return. 2011 federal tax forms 1040 ez If your main home, principal place of business, or tax records are located in a Presidentially declared disaster area, the fee will be waived if the assigned disaster designation (for example, “Hurricane Katrina”) is written in red across the top of the form when filed. 2011 federal tax forms 1040 ez Request for transcript of tax return. 2011 federal tax forms 1040 ez   You can use Form 4506-T to order a free transcript of your tax return. 2011 federal tax forms 1040 ez A transcript provides most of the line entries from a tax return and usually contains the information that a third party requires. 2011 federal tax forms 1040 ez You can also call 1-800-829-1040 to order a transcript. 2011 federal tax forms 1040 ez How To Get Tax Help Special IRS assistance. 2011 federal tax forms 1040 ez   The IRS is providing special help for those affected by Hurricane Katrina, Rita, or Wilma, as well as survivors and personal representatives of the victims. 2011 federal tax forms 1040 ez We have set up a special toll-free number for people who may have trouble filing or paying their taxes because they were affected by Hurricane Katrina, Rita, or Wilma, or who have other tax issues related to the hurricanes. 2011 federal tax forms 1040 ez Call 1-866-562-5227 Monday through Friday In English-7 a. 2011 federal tax forms 1040 ez m. 2011 federal tax forms 1040 ez to 10 p. 2011 federal tax forms 1040 ez m. 2011 federal tax forms 1040 ez local time In Spanish-8 a. 2011 federal tax forms 1040 ez m. 2011 federal tax forms 1040 ez to 9:30 p. 2011 federal tax forms 1040 ez m. 2011 federal tax forms 1040 ez local time   The IRS website at www. 2011 federal tax forms 1040 ez irs. 2011 federal tax forms 1040 ez gov has notices and other tax relief information. 2011 federal tax forms 1040 ez Check it periodically for any new guidance. 2011 federal tax forms 1040 ez Other help from the IRS. 2011 federal tax forms 1040 ez   You can get help with unresolved tax issues, order free publications and forms, ask tax questions, and get more information from the IRS in several ways. 2011 federal tax forms 1040 ez By selecting the method that is best for you, you will have quick and easy access to tax help. 2011 federal tax forms 1040 ez Contacting your Taxpayer Advocate. 2011 federal tax forms 1040 ez   If you have attempted to deal with an IRS problem unsuccessfully, you should contact your Taxpayer Advocate. 2011 federal tax forms 1040 ez   The Taxpayer Advocate independently represents your interests and concerns within the IRS by protecting your rights and resolving problems that have not been fixed through normal channels. 2011 federal tax forms 1040 ez While Taxpayer Advocates cannot change the tax law or make a technical tax decision, they can clear up problems that resulted from previous contacts and ensure that your case is given a complete and impartial review. 2011 federal tax forms 1040 ez   To contact your Taxpayer Advocate: Call the Taxpayer Advocate toll free at 1-877-777-4778. 2011 federal tax forms 1040 ez Call, write, or fax the Taxpayer Advocate office in your area. 2011 federal tax forms 1040 ez Call 1-800-829-4059 if you are a TTY/TDD user. 2011 federal tax forms 1040 ez Visit www. 2011 federal tax forms 1040 ez irs. 2011 federal tax forms 1040 ez gov/advocate. 2011 federal tax forms 1040 ez   For more information, see Publication 1546, How To Get Help With Unresolved Tax Problems (now available in Chinese, Korean, Russian, and Vietnamese, in addition to English and Spanish). 2011 federal tax forms 1040 ez Free tax services. 2011 federal tax forms 1040 ez   To find out what services are available, get Publication 910, IRS Guide to Free Tax Services. 2011 federal tax forms 1040 ez It contains a list of free tax publications and an index of tax topics. 2011 federal tax forms 1040 ez It also describes other free tax information services, including tax education and assistance programs and a list of TeleTax topics. 2011 federal tax forms 1040 ez Internet. 2011 federal tax forms 1040 ez You can access the IRS website 24 hours a 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