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Amend 2011 Tax Return

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Amend 2011 Tax Return

Amend 2011 tax return Publication 561 - Main Contents Table of Contents What Is Fair Market Value (FMV)?Factors. Amend 2011 tax return Stock. Amend 2011 tax return Options. Amend 2011 tax return Determining Fair Market Value Problems in Determining Fair Market Value Valuation of Various Kinds of PropertyHousehold Goods Used Clothing Jewelry and Gems Paintings, Antiques, and Other Objects of Art Collections Cars, Boats, and Aircraft Inventory Patents Stocks and Bonds Real Estate Interest in a Business Annuities, Interests for Life or Terms of Years, Remainders, and Reversions Certain Life Insurance and Annuity Contracts Partial Interest in Property Not in Trust AppraisalsDeductions of More Than $5,000 Deductions of More Than $500,000 Qualified Appraisal Form 8283 Internal Revenue Service Review of Appraisals Penalty How To Get Tax HelpLow income tax clinics (LITCs). Amend 2011 tax return What Is Fair Market Value (FMV)? To figure how much you may deduct for property that you contribute, you must first determine its fair market value on the date of the contribution. Amend 2011 tax return Fair market value. Amend 2011 tax return   Fair market value (FMV) is the price that property would sell for on the open market. Amend 2011 tax return It is the price that would be agreed on between a willing buyer and a willing seller, with neither being required to act, and both having reasonable knowledge of the relevant facts. Amend 2011 tax return If you put a restriction on the use of property you donate, the FMV must reflect that restriction. Amend 2011 tax return Example 1. Amend 2011 tax return If you give used clothing to the Salvation Army, the FMV would be the price that typical buyers actually pay for clothing of this age, condition, style, and use. Amend 2011 tax return Usually, such items are worth far less than what you paid for them. Amend 2011 tax return Example 2. Amend 2011 tax return If you donate land and restrict its use to agricultural purposes, you must value the land at its value for agricultural purposes, even though it would have a higher FMV if it were not restricted. Amend 2011 tax return Factors. Amend 2011 tax return   In making and supporting the valuation of property, all factors affecting value are relevant and must be considered. Amend 2011 tax return These include: The cost or selling price of the item, Sales of comparable properties, Replacement cost, and Opinions of experts. Amend 2011 tax return   These factors are discussed later. Amend 2011 tax return Also, see Table 1 for a summary of questions to ask as you consider each factor. Amend 2011 tax return Date of contribution. Amend 2011 tax return   Ordinarily, the date of a contribution is the date that the transfer of the property takes place. Amend 2011 tax return Stock. Amend 2011 tax return   If you deliver, without any conditions, a properly endorsed stock certificate to a qualified organization or to an agent of the organization, the date of the contribution is the date of delivery. Amend 2011 tax return If the certificate is mailed and received through the regular mail, it is the date of mailing. Amend 2011 tax return If you deliver the certificate to a bank or broker acting as your agent or to the issuing corporation or its agent, for transfer into the name of the organization, the date of the contribution is the date the stock is transferred on the books of the corporation. Amend 2011 tax return Options. Amend 2011 tax return   If you grant an option to a qualified organization to buy real property, you have not made a charitable contribution until the organization exercises the option. Amend 2011 tax return The amount of the contribution is the FMV of the property on the date the option is exercised minus the exercise price. Amend 2011 tax return Example. Amend 2011 tax return You grant an option to a local university, which is a qualified organization, to buy real property. Amend 2011 tax return Under the option, the university could buy the property at any time during a 2-year period for $40,000. Amend 2011 tax return The FMV of the property on the date the option is granted is $50,000. Amend 2011 tax return In the following tax year, the university exercises the option. Amend 2011 tax return The FMV of the property on the date the option is exercised is $55,000. Amend 2011 tax return Therefore, you have made a charitable contribution of $15,000 ($55,000, the FMV, minus $40,000, the exercise price) in the tax year the option is exercised. Amend 2011 tax return Determining Fair Market Value Determining the value of donated property would be a simple matter if you could rely only on fixed formulas, rules, or methods. Amend 2011 tax return Usually it is not that simple. Amend 2011 tax return Using such formulas, etc. Amend 2011 tax return , seldom results in an acceptable determination of FMV. Amend 2011 tax return There is no single formula that always applies when determining the value of property. Amend 2011 tax return This is not to say that a valuation is only guesswork. Amend 2011 tax return You must consider all the facts and circumstances connected with the property, such as its desirability, use, and scarcity. Amend 2011 tax return For example, donated furniture should not be evaluated at some fixed rate such as 15% of the cost of new replacement furniture. Amend 2011 tax return When the furniture is contributed, it may be out of style or in poor condition, therefore having little or no market value. Amend 2011 tax return On the other hand, it may be an antique, the value of which could not be determined by using any formula. Amend 2011 tax return Cost or Selling Price of the Donated Property The cost of the property to you or the actual selling price received by the qualified organization may be the best indication of its FMV. Amend 2011 tax return However, because conditions in the market change, the cost or selling price of property may have less weight if the property was not bought or sold reasonably close to the date of contribution. Amend 2011 tax return The cost or selling price is a good indication of the property's value if: The purchase or sale took place close to the valuation date in an open market, The purchase or sale was at “arm's-length,” The buyer and seller knew all relevant facts, The buyer and seller did not have to act, and The market did not change between the date of purchase or sale and the valuation date. Amend 2011 tax return Example. Amend 2011 tax return Tom Morgan, who is not a dealer in gems, bought an assortment of gems for $5,000 from a promoter. Amend 2011 tax return The promoter claimed that the price was “wholesale” even though he and other dealers made similar sales at similar prices to other persons who were not dealers. Amend 2011 tax return The promoter said that if Tom kept the gems for more than 1 year and then gave them to charity, Tom could claim a charitable deduction of $15,000, which, according to the promoter, would be the value of the gems at the time of contribution. Amend 2011 tax return Tom gave the gems to a qualified charity 13 months after buying them. Amend 2011 tax return The selling price for these gems had not changed from the date of purchase to the date he donated them to charity. Amend 2011 tax return The best evidence of FMV depends on actual transactions and not on some artificial estimate. Amend 2011 tax return The $5,000 charged Tom and others is, therefore, the best evidence of the maximum FMV of the gems. Amend 2011 tax return Terms of the purchase or sale. Amend 2011 tax return   The terms of the purchase or sale should be considered in determining FMV if they influenced the price. Amend 2011 tax return These terms include any restrictions, understandings, or covenants limiting the use or disposition of the property. Amend 2011 tax return Rate of increase or decrease in value. Amend 2011 tax return   Unless you can show that there were unusual circumstances, it is assumed that the increase or decrease in the value of your donated property from your cost has been at a reasonable rate. Amend 2011 tax return For time adjustments, an appraiser may consider published price indexes for information on general price trends, building costs, commodity costs, securities, and works of art sold at auction in arm's-length sales. Amend 2011 tax return Example. Amend 2011 tax return Bill Brown bought a painting for $10,000. Amend 2011 tax return Thirteen months later he gave it to an art museum, claiming a charitable deduction of $15,000 on his tax return. Amend 2011 tax return The appraisal of the painting should include information showing that there were unusual circumstances that justify a 50% increase in value for the 13 months Bill held the property. Amend 2011 tax return Arm's-length offer. Amend 2011 tax return   An arm's-length offer to buy the property close to the valuation date may help to prove its value if the person making the offer was willing and able to complete the transaction. Amend 2011 tax return To rely on an offer, you should be able to show proof of the offer and the specific amount to be paid. Amend 2011 tax return Offers to buy property other than the donated item will help to determine value if the other property is reasonably similar to the donated property. Amend 2011 tax return Sales of Comparable Properties The sales prices of properties similar to the donated property are often important in determining the FMV. Amend 2011 tax return The weight to be given to each sale depends on the following. Amend 2011 tax return The degree of similarity between the property sold and the donated property. Amend 2011 tax return The time of the sale—whether it was close to the valuation date. Amend 2011 tax return The circumstances of the sale—whether it was at arm's-length with a knowledgeable buyer and seller, with neither having to act. Amend 2011 tax return The conditions of the market in which the sale was made—whether unusually inflated or deflated. Amend 2011 tax return The comparable sales method of valuing real estate is explained later under Valuation of Various Kinds of Property. Amend 2011 tax return Example 1. Amend 2011 tax return Mary Black, who is not a book dealer, paid a promoter $10,000 for 500 copies of a single edition of a modern translation of the Bible. Amend 2011 tax return The promoter had claimed that the price was considerably less than the “retail” price, and gave her a statement that the books had a total retail value of $30,000. Amend 2011 tax return The promoter advised her that if she kept the Bibles for more than 1 year and then gave them to a qualified organization, she could claim a charitable deduction for the “retail” price of $30,000. Amend 2011 tax return Thirteen months later she gave all the Bibles to a church that she selected from a list provided by the promoter. Amend 2011 tax return At the time of her donation, wholesale dealers were selling similar quantities of Bibles to the general public for $10,000. Amend 2011 tax return The FMV of the Bibles is $10,000, the price at which similar quantities of Bibles were being sold to others at the time of the contribution. Amend 2011 tax return Example 2. Amend 2011 tax return The facts are the same as in Example 1, except that the promoter gave Mary Black a second option. Amend 2011 tax return The promoter said that if Mary wanted a charitable deduction within 1 year of the purchase, she could buy the 500 Bibles at the “retail” price of $30,000, paying only $10,000 in cash and giving a promissory note for the remaining $20,000. Amend 2011 tax return The principal and interest on the note would not be due for 12 years. Amend 2011 tax return According to the promoter, Mary could then, within 1 year of the purchase, give the Bibles to a qualified organization and claim the full $30,000 retail price as a charitable contribution. Amend 2011 tax return She purchased the Bibles under the second option and, 3 months later, gave them to a church, which will use the books for church purposes. Amend 2011 tax return At the time of the gift, the promoter was selling similar lots of Bibles for either $10,000 or $30,000. Amend 2011 tax return The difference between the two prices was solely at the discretion of the buyer. Amend 2011 tax return The promoter was a willing seller for $10,000. Amend 2011 tax return Therefore, the value of Mary's contribution of the Bibles is $10,000, the amount at which similar lots of Bibles could be purchased from the promoter by members of the general public. Amend 2011 tax return Replacement Cost The cost of buying, building, or manufacturing property similar to the donated item should be considered in determining FMV. Amend 2011 tax return However, there must be a reasonable relationship between the replacement cost and the FMV. Amend 2011 tax return The replacement cost is the amount it would cost to replace the donated item on the valuation date. Amend 2011 tax return Often there is no relationship between the replacement cost and the FMV. Amend 2011 tax return If the supply of the donated property is more or less than the demand for it, the replacement cost becomes less important. Amend 2011 tax return To determine the replacement cost of the donated property, find the “estimated replacement cost new. Amend 2011 tax return ” Then subtract from this figure an amount for depreciation due to the physical condition and obsolescence of the donated property. Amend 2011 tax return You should be able to show the relationship between the depreciated replacement cost and the FMV, as well as how you arrived at the “estimated replacement cost new. Amend 2011 tax return ” Opinions of Experts Generally, the weight given to an expert's opinion on matters such as the authenticity of a coin or a work of art, or the most profitable and best use of a piece of real estate, depends on the knowledge and competence of the expert and the thoroughness with which the opinion is supported by experience and facts. Amend 2011 tax return For an expert's opinion to deserve much weight, the facts must support the opinion. Amend 2011 tax return For additional information, see Appraisals, later. Amend 2011 tax return Table 1. Amend 2011 tax return Factors That Affect FMV IF the factor you are considering is. Amend 2011 tax return . Amend 2011 tax return . Amend 2011 tax return THEN you should ask these questions. Amend 2011 tax return . Amend 2011 tax return . Amend 2011 tax return     cost or selling price Was the purchase or sale of the property reasonably close to the date of contribution? Was any increase or decrease in value, as compared to your cost, at a reasonable rate? Do the terms of purchase or sale limit what can be done with the property? Was there an arm's-length offer to buy the property close to the valuation date?     sales of comparable properties How similar is the property sold to the property donated? How close is the date of sale to the valuation date? Was the sale at arm's-length? What was the condition of the market at the time of sale?     replacement cost What would it cost to replace the donated property? Is there a reasonable relationship between replacement cost and FMV? Is the supply of the donated property more or less than the demand for it?     opinions of experts Is the expert knowledgeable and competent? Is the opinion thorough and supported by facts and experience? Problems in Determining Fair Market Value There are a number of problems in determining the FMV of donated property. Amend 2011 tax return Unusual Market Conditions The sale price of the property itself in an arm's-length transaction in an open market is often the best evidence of its value. Amend 2011 tax return When you rely on sales of comparable property, the sales must have been made in an open market. Amend 2011 tax return If those sales were made in a market that was artificially supported or stimulated so as not to be truly representative, the prices at which the sales were made will not indicate the FMV. Amend 2011 tax return For example, liquidation sale prices usually do not indicate the FMV. Amend 2011 tax return Also, sales of stock under unusual circumstances, such as sales of small lots, forced sales, and sales in a restricted market, may not represent the FMV. Amend 2011 tax return Selection of Comparable Sales Using sales of comparable property is an important method for determining the FMV of donated property. Amend 2011 tax return However, the amount of weight given to a sale depends on the degree of similarity between the comparable and the donated properties. Amend 2011 tax return The degree of similarity must be close enough so that this selling price would have been given consideration by reasonably well-informed buyers or sellers of the property. Amend 2011 tax return Example. Amend 2011 tax return You give a rare, old book to your former college. Amend 2011 tax return The book is a third edition and is in poor condition because of a missing back cover. Amend 2011 tax return You discover that there was a sale for $300, near the valuation date, of a first edition of the book that was in good condition. Amend 2011 tax return Although the contents are the same, the books are not at all similar because of the different editions and their physical condition. Amend 2011 tax return Little consideration would be given to the selling price of the $300 property by knowledgeable buyers or sellers. Amend 2011 tax return Future Events You may not consider unexpected events happening after your donation of property in making the valuation. Amend 2011 tax return You may consider only the facts known at the time of the gift, and those that could be reasonably expected at the time of the gift. Amend 2011 tax return Example. Amend 2011 tax return You give farmland to a qualified charity. Amend 2011 tax return The transfer provides that your mother will have the right to all income and full use of the property for her life. Amend 2011 tax return Even though your mother dies 1 week after the transfer, the value of the property on the date it is given is its present value, subject to the life interest as estimated from actuarial tables. Amend 2011 tax return You may not take a higher deduction because the charity received full use and possession of the land only 1 week after the transfer. Amend 2011 tax return Using Past Events to Predict the Future A common error is to rely too much on past events that do not fairly reflect the probable future earnings and FMV. Amend 2011 tax return Example. Amend 2011 tax return You give all your rights in a successful patent to your favorite charity. Amend 2011 tax return Your records show that before the valuation date there were three stages in the patent's history of earnings. Amend 2011 tax return First, there was rapid growth in earnings when the invention was introduced. Amend 2011 tax return Then, there was a period of high earnings when the invention was being exploited. Amend 2011 tax return Finally, there was a decline in earnings when competing inventions were introduced. Amend 2011 tax return The entire history of earnings may be relevant in estimating the future earnings. Amend 2011 tax return However, the appraiser must not rely too much on the stage of rapid growth in earnings, or of high earnings. Amend 2011 tax return The market conditions at those times do not represent the condition of the market at the valuation date. Amend 2011 tax return What is most significant is the trend of decline in earnings up to the valuation date. Amend 2011 tax return For more information about donations of patents, see Patents, later. Amend 2011 tax return Valuation of Various Kinds of Property This section contains information on determining the FMV of ordinary kinds of donated property. Amend 2011 tax return For information on appraisals, see Appraisals, later. Amend 2011 tax return Household Goods The FMV of used household goods, such as furniture, appliances, and linens, is usually much lower than the price paid when new. Amend 2011 tax return Such used property may have little or no market value because of its worn condition. Amend 2011 tax return It may be out of style or no longer useful. Amend 2011 tax return You cannot take a deduction for household goods donated after August 17, 2006, unless they are in good used condition or better. Amend 2011 tax return A household good that is not in good used condition or better for which you take a deduction of more than $500 requires a qualified appraisal. Amend 2011 tax return See Deduction over $500 for certain clothing or household items, later. Amend 2011 tax return If the property is valuable because it is old or unique, see the discussion under Paintings, Antiques, and Other Objects of Art. Amend 2011 tax return Used Clothing Used clothing and other personal items are usually worth far less than the price you paid for them. Amend 2011 tax return Valuation of items of clothing does not lend itself to fixed formulas or methods. Amend 2011 tax return The price that buyers of used items actually pay in used clothing stores, such as consignment or thrift shops, is an indication of the value. Amend 2011 tax return You cannot take a deduction for clothing donated after August 17, 2006, unless it is in good used condition or better. Amend 2011 tax return An item of clothing that is not in good used condition or better for which you take a deduction of more than $500 requires a qualified appraisal. Amend 2011 tax return See Deduction over $500 for certain clothing or household items, later. Amend 2011 tax return For valuable furs or very expensive gowns, a Form 8283 may have to be sent with your tax return. Amend 2011 tax return Jewelry and Gems Jewelry and gems are of such a specialized nature that it is almost always necessary to get an appraisal by a specialized jewelry appraiser. Amend 2011 tax return The appraisal should describe, among other things, the style of the jewelry, the cut and setting of the gem, and whether it is now in fashion. Amend 2011 tax return If not in fashion, the possibility of having the property redesigned, recut, or reset should be reported in the appraisal. Amend 2011 tax return The stone's coloring, weight, cut, brilliance, and flaws should be reported and analyzed. Amend 2011 tax return Sentimental personal value has no effect on FMV. Amend 2011 tax return But if the jewelry was owned by a famous person, its value might increase. Amend 2011 tax return Paintings, Antiques, and Other Objects of Art Your deduction for contributions of paintings, antiques, and other objects of art, should be supported by a written appraisal from a qualified and reputable source, unless the deduction is $5,000 or less. Amend 2011 tax return Examples of information that should be included in appraisals of art objects—paintings in particular—are found later under Qualified Appraisal. Amend 2011 tax return Art valued at $20,000 or more. Amend 2011 tax return   If you claim a deduction of $20,000 or more for donations of art, you must attach a complete copy of the signed appraisal to your return. Amend 2011 tax return For individual objects valued at $20,000 or more, a photograph of a size and quality fully showing the object, preferably an 8 x 10 inch color photograph or a color transparency no smaller than 4 x 5 inches, must be provided upon request. Amend 2011 tax return Art valued at $50,000 or more. Amend 2011 tax return   If you donate an item of art that has been appraised at $50,000 or more, you can request a Statement of Value for that item from the IRS. Amend 2011 tax return You must request the statement before filing the tax return that reports the donation. Amend 2011 tax return Your request must include the following. Amend 2011 tax return A copy of a qualified appraisal of the item. Amend 2011 tax return See Qualified Appraisal, later. Amend 2011 tax return A $2,500 check or money order payable to the Internal Revenue Service for the user fee that applies to your request regarding one, two, or three items of art. Amend 2011 tax return Add $250 for each item in excess of three. Amend 2011 tax return A completed Form 8283, Section B. Amend 2011 tax return The location of the IRS territory that has examination responsibility for your return. Amend 2011 tax return If your request lacks essential information, you will be notified and given 30 days to provide the missing information. Amend 2011 tax return   Send your request to: Internal Revenue Service Attention: Art Appraisal (C:AP:ART) P. Amend 2011 tax return O. Amend 2011 tax return Box 27720 McPherson Station Washington, DC 20038 Refunds. Amend 2011 tax return   You can withdraw your request for a Statement of Value at any time before it is issued. Amend 2011 tax return However, the IRS will not refund the user fee if you do. Amend 2011 tax return   If the IRS declines to issue a Statement of Value in the interest of efficient tax administration, the IRS will refund the user fee. Amend 2011 tax return Authenticity. Amend 2011 tax return   The authenticity of the donated art must be determined by the appraiser. Amend 2011 tax return Physical condition. Amend 2011 tax return   Important items in the valuation of antiques and art are physical condition and extent of restoration. Amend 2011 tax return These have a significant effect on the value and must be fully reported in an appraisal. Amend 2011 tax return An antique in damaged condition, or lacking the “original brasses,” may be worth much less than a similar piece in excellent condition. Amend 2011 tax return Art appraisers. Amend 2011 tax return   More weight will usually be given to an appraisal prepared by an individual specializing in the kind and price range of the art being appraised. Amend 2011 tax return Certain art dealers or appraisers specialize, for example, in old masters, modern art, bronze sculpture, etc. Amend 2011 tax return Their opinions on the authenticity and desirability of such art would usually be given more weight than the opinions of more generalized art dealers or appraisers. Amend 2011 tax return They can report more recent comparable sales to support their opinion. Amend 2011 tax return   To identify and locate experts on unique, specialized items or collections, you may wish to use the current Official Museum Directory of the American Association of Museums. Amend 2011 tax return It lists museums both by state and by category. Amend 2011 tax return   To help you locate a qualified appraiser for your donation, you may wish to ask an art historian at a nearby college or the director or curator of a local museum. Amend 2011 tax return The Yellow Pages often list specialized art and antique dealers, auctioneers, and art appraisers. Amend 2011 tax return You may be able to find a qualified appraiser on the Internet. Amend 2011 tax return You may also contact associations of dealers for guidance. Amend 2011 tax return Collections Since many kinds of hobby collections may be the subject of a charitable donation, it is not possible to discuss all of the possible collectibles in this publication. Amend 2011 tax return Most common are rare books, autographs, sports memorabilia, dolls, manuscripts, stamps, coins, guns, phonograph records, and natural history items. Amend 2011 tax return Many of the elements of valuation that apply to paintings and other objects of art, discussed earlier, also apply to miscellaneous collections. Amend 2011 tax return Reference material. Amend 2011 tax return   Publications available to help you determine the value of many kinds of collections include catalogs, dealers' price lists, and specialized hobby periodicals. Amend 2011 tax return When using one of these price guides, you must use the current edition at the date of contribution. Amend 2011 tax return However, these sources are not always reliable indicators of FMV and should be supported by other evidence. Amend 2011 tax return   For example, a dealer may sell an item for much less than is shown on a price list, particularly after the item has remained unsold for a long time. Amend 2011 tax return The price an item sold for in an auction may have been the result of a rigged sale or a mere bidding duel. Amend 2011 tax return The appraiser must analyze the reference material, and recognize and make adjustments for misleading entries. Amend 2011 tax return If you are donating a valuable collection, you should get an appraisal. Amend 2011 tax return If your donation appears to be of little value, you may be able to make a satisfactory valuation using reference materials available at a state, city, college, or museum library. Amend 2011 tax return Stamp collections. Amend 2011 tax return   Most libraries have catalogs or other books that report the publisher's estimate of values. Amend 2011 tax return Generally, two price levels are shown for each stamp: the price postmarked and the price not postmarked. Amend 2011 tax return Stamp dealers generally know the value of their merchandise and are able to prepare satisfactory appraisals of valuable collections. Amend 2011 tax return Coin collections. Amend 2011 tax return   Many catalogs and other reference materials show the writer's or publisher's opinion of the value of coins on or near the date of the publication. Amend 2011 tax return Like many other collectors' items, the value of a coin depends on the demand for it, its age, and its rarity. Amend 2011 tax return Another important factor is the coin's condition. Amend 2011 tax return For example, there is a great difference in the value of a coin that is in mint condition and a similar coin that is only in good condition. Amend 2011 tax return   Catalogs usually establish a category for coins, based on their physical condition—mint or uncirculated, extremely fine, very fine, fine, very good, good, fair, or poor—with a different valuation for each category. Amend 2011 tax return Books. Amend 2011 tax return   The value of books is usually determined by selecting comparable sales and adjusting the prices according to the differences between the comparable sales and the item being evaluated. Amend 2011 tax return This is difficult to do and, except for a collection of little value, should be done by a specialized appraiser. Amend 2011 tax return Within the general category of literary property, there are dealers who specialize in certain areas, such as Americana, foreign imports, Bibles, and scientific books. Amend 2011 tax return Modest value of collection. Amend 2011 tax return   If the collection you are donating is of modest value, not requiring a written appraisal, the following information may help you in determining the FMV. Amend 2011 tax return   A book that is very old, or very rare, is not necessarily valuable. Amend 2011 tax return There are many books that are very old or rare, but that have little or no market value. Amend 2011 tax return Condition of book. Amend 2011 tax return   The condition of a book may have a great influence on its value. Amend 2011 tax return Collectors are interested in items that are in fine, or at least good, condition. Amend 2011 tax return When a book has a missing page, a loose binding, tears, stains, or is otherwise in poor condition, its value is greatly lowered. Amend 2011 tax return Other factors. Amend 2011 tax return   Some other factors in the valuation of a book are the kind of binding (leather, cloth, paper), page edges, and illustrations (drawings and photographs). Amend 2011 tax return Collectors usually want first editions of books. Amend 2011 tax return However, because of changes or additions, other editions are sometimes worth as much as, or more than, the first edition. Amend 2011 tax return Manuscripts, autographs, diaries, and similar items. Amend 2011 tax return   When these items are handwritten, or at least signed by famous people, they are often in demand and are valuable. Amend 2011 tax return The writings of unknowns also may be of value if they are of unusual historical or literary importance. Amend 2011 tax return Determining the value of such material is difficult. Amend 2011 tax return For example, there may be a great difference in value between two diaries that were kept by a famous person—one kept during childhood and the other during a later period in his or her life. Amend 2011 tax return The appraiser determines a value in these cases by applying knowledge and judgment to such factors as comparable sales and conditions. Amend 2011 tax return Signatures. Amend 2011 tax return   Signatures, or sets of signatures, that were cut from letters or other papers usually have little or no value. Amend 2011 tax return But complete sets of the signatures of U. Amend 2011 tax return S. Amend 2011 tax return presidents are in demand. Amend 2011 tax return Cars, Boats, and Aircraft If you donate a car, a boat, or an aircraft to a charitable organization, its FMV must be determined. Amend 2011 tax return Certain commercial firms and trade organizations publish monthly or seasonal guides for different regions of the country, containing complete dealer sale prices or dealer average prices for recent model years. Amend 2011 tax return Prices are reported for each make, model, and year. Amend 2011 tax return These guides also provide estimates for adjusting for unusual equipment, unusual mileage, and physical condition. Amend 2011 tax return The prices are not “official,” and these publications are not considered an appraisal of any specific donated property. Amend 2011 tax return But they do provide clues for making an appraisal and suggest relative prices for comparison with current sales and offerings in your area. Amend 2011 tax return These publications are sometimes available from public libraries or at a bank, credit union, or finance company. Amend 2011 tax return You can also find pricing information about used cars on the Internet. Amend 2011 tax return An acceptable measure of the FMV of a donated car, boat, or airplane is an amount not in excess of the price listed in a used vehicle pricing guide for a private party sale, not the dealer retail value, of a similar vehicle. Amend 2011 tax return However, the FMV may be less than that amount if the vehicle has engine trouble, body damage, high mileage, or any type of excessive wear. Amend 2011 tax return The FMV of a donated vehicle is the same as the price listed in a used vehicle pricing guide for a private party sale only if the guide lists a sales price for a vehicle that is the same make, model, and year, sold in the same area, in the same condition, with the same or similar options or accessories, and with the same or similar warranties as the donated vehicle. Amend 2011 tax return Example. Amend 2011 tax return You donate a used car in poor condition to a local high school for use by students studying car repair. Amend 2011 tax return A used car guide shows the dealer retail value for this type of car in poor condition is $1,600. Amend 2011 tax return However, the guide shows the price for a private party sale of the car is only $750. Amend 2011 tax return The FMV of the car is considered to be no more than $750. Amend 2011 tax return Boats. Amend 2011 tax return   Except for inexpensive small boats, the valuation of boats should be based on an appraisal by a marine surveyor because the physical condition is so critical to the value. Amend 2011 tax return More information. Amend 2011 tax return   Your deduction for a donated car, boat, or airplane generally is limited to the gross proceeds from its sale by the qualified organization. Amend 2011 tax return This rule applies if the claimed value of the donated vehicle is more than $500. Amend 2011 tax return In certain cases, you can deduct the vehicle's FMV. Amend 2011 tax return For details, see Publication 526. Amend 2011 tax return Inventory If you donate any inventory item to a charitable organization, the amount of your deductible contribution generally is the FMV of the item, minus any gain you would have realized if you had sold the item at its FMV on the date of the gift. Amend 2011 tax return For more information, see Publication 526. Amend 2011 tax return Patents To determine the FMV of a patent, you must take into account, among other factors: Whether the patented technology has been made obsolete by other technology; Any restrictions on the donee's use of, or ability to transfer, the patented technology; and The length of time remaining before the patent expires. Amend 2011 tax return However, your deduction for a donation of a patent or other intellectual property is its FMV, minus any gain you would have realized if you had sold the property at its FMV on the date of the gift. Amend 2011 tax return Generally, this means your deduction is the lesser of the property's FMV or its basis. Amend 2011 tax return For details, see Publication 526. Amend 2011 tax return Stocks and Bonds The value of stocks and bonds is the FMV of a share or bond on the valuation date. Amend 2011 tax return See Date of contribution, earlier, under What Is Fair Market Value (FMV). Amend 2011 tax return Selling prices on valuation date. Amend 2011 tax return   If there is an active market for the contributed stocks or bonds on a stock exchange, in an over-the-counter market, or elsewhere, the FMV of each share or bond is the average price between the highest and lowest quoted selling prices on the valuation date. Amend 2011 tax return For example, if the highest selling price for a share was $11, and the lowest $9, the average price is $10. Amend 2011 tax return You get the average price by adding $11 and $9 and dividing the sum by 2. Amend 2011 tax return No sales on valuation date. Amend 2011 tax return   If there were no sales on the valuation date, but there were sales within a reasonable period before and after the valuation date, you determine FMV by taking the average price between the highest and lowest sales prices on the nearest date before and on the nearest date after the valuation date. Amend 2011 tax return Then you weight these averages in inverse order by the respective number of trading days between the selling dates and the valuation date. Amend 2011 tax return Example. Amend 2011 tax return   On the day you gave stock to a qualified organization, there were no sales of the stock. Amend 2011 tax return Sales of the stock nearest the valuation date took place two trading days before the valuation date at an average selling price of $10 and three trading days after the valuation date at an average selling price of $15. Amend 2011 tax return The FMV on the valuation date was $12, figured as follows: [(3 x $10) + (2 x $15)] ÷ 5 = $12 Listings on more than one stock exchange. Amend 2011 tax return   Stocks or bonds listed on more than one stock exchange are valued based on the prices of the exchange on which they are principally dealt. Amend 2011 tax return This applies if these prices are published in a generally available listing or publication of general circulation. Amend 2011 tax return If this is not applicable, and the stocks or bonds are reported on a composite listing of combined exchanges in a publication of general circulation, use the composite list. Amend 2011 tax return See also Unavailable prices or closely held corporation, later. Amend 2011 tax return Bid and asked prices on valuation date. Amend 2011 tax return   If there were no sales within a reasonable period before and after the valuation date, the FMV is the average price between the bona fide bid and asked prices on the valuation date. Amend 2011 tax return Example. Amend 2011 tax return Although there were no sales of Blue Corporation stock on the valuation date, bona fide bid and asked prices were available on that date of $14 and $16, respectively. Amend 2011 tax return The FMV is $15, the average price between the bid and asked prices. Amend 2011 tax return No prices on valuation date. Amend 2011 tax return   If there were no prices available on the valuation date, you determine FMV by taking the average prices between the bona fide bid and asked prices on the closest trading date before and after the valuation date. Amend 2011 tax return Both dates must be within a reasonable period. Amend 2011 tax return Then you weight these averages in inverse order by the respective number of trading days between the bid and asked dates and the valuation date. Amend 2011 tax return Example. Amend 2011 tax return On the day you gave stock to a qualified organization, no prices were available. Amend 2011 tax return Bona fide bid and asked prices 3 days before the valuation date were $10 and 2 days after the valuation date were $15. Amend 2011 tax return The FMV on the valuation date is $13, figured as follows: [(2 x $10) + (3 x $15)] ÷ 5 = $13 Prices only before or after valuation date, but not both. Amend 2011 tax return   If no selling prices or bona fide bid and asked prices are available on a date within a reasonable period before the valuation date, but are available on a date within a reasonable period after the valuation date, or vice versa, then the average price between the highest and lowest of such available prices may be treated as the value. Amend 2011 tax return Large blocks of stock. Amend 2011 tax return   When a large block of stock is put on the market, it may lower the selling price of the stock if the supply is greater than the demand. Amend 2011 tax return On the other hand, market forces may exist that will afford higher prices for large blocks of stock. Amend 2011 tax return Because of the many factors to be considered, determining the value of large blocks of stock usually requires the help of experts specializing in underwriting large quantities of securities, or in trading in the securities of the industry of which the particular company is a part. Amend 2011 tax return Unavailable prices or closely held corporation. Amend 2011 tax return   If selling prices or bid and asked prices are not available, or if securities of a closely held corporation are involved, determine the FMV by considering the following factors. Amend 2011 tax return For bonds, the soundness of the security, the interest yield, the date of maturity, and other relevant factors. Amend 2011 tax return For shares of stock, the company's net worth, prospective earning power and dividend-paying capacity, and other relevant factors. Amend 2011 tax return Other factors. Amend 2011 tax return   Other relevant factors include: The nature and history of the business, especially its recent history, The goodwill of the business, The economic outlook in the particular industry, The company's position in the industry, its competitors, and its management, and The value of securities of corporations engaged in the same or similar business. Amend 2011 tax return For preferred stock, the most important factors are its yield, dividend coverage, and protection of its liquidation preference. Amend 2011 tax return   You should keep complete financial and other information on which the valuation is based. Amend 2011 tax return This includes copies of reports of examinations of the company made by accountants, engineers, or any technical experts on or close to the valuation date. Amend 2011 tax return Restricted securities. Amend 2011 tax return   Some classes of stock cannot be traded publicly because of restrictions imposed by the Securities and Exchange Commission, or by the corporate charter or a trust agreement. Amend 2011 tax return These restricted securities usually trade at a discount in relation to freely traded securities. Amend 2011 tax return   To arrive at the FMV of restricted securities, factors that you must consider include the resale provisions found in the restriction agreements, the relative negotiating strengths of the buyer and seller, and the market experience of freely traded securities of the same class as the restricted securities. Amend 2011 tax return Real Estate Because each piece of real estate is unique and its valuation is complicated, a detailed appraisal by a professional appraiser is necessary. Amend 2011 tax return The appraiser must be thoroughly trained in the application of appraisal principles and theory. Amend 2011 tax return In some instances the opinions of equally qualified appraisers may carry unequal weight, such as when one appraiser has a better knowledge of local conditions. Amend 2011 tax return The appraisal report must contain a complete description of the property, such as street address, legal description, and lot and block number, as well as physical features, condition, and dimensions. Amend 2011 tax return The use to which the property is put, zoning and permitted uses, and its potential use for other higher and better uses are also relevant. Amend 2011 tax return In general, there are three main approaches to the valuation of real estate. Amend 2011 tax return An appraisal may require the combined use of two or three methods rather than one method only. Amend 2011 tax return 1. Amend 2011 tax return Comparable Sales The comparable sales method compares the donated property with several similar properties that have been sold. Amend 2011 tax return The selling prices, after adjustments for differences in date of sale, size, condition, and location, would then indicate the estimated FMV of the donated property. Amend 2011 tax return If the comparable sales method is used to determine the value of unimproved real property (land without significant buildings, structures, or any other improvements that add to its value), the appraiser should consider the following factors when comparing the potential comparable property and the donated property: Location, size, and zoning or use restrictions, Accessibility and road frontage, and available utilities and water rights, Riparian rights (right of access to and use of the water by owners of land on the bank of a river) and existing easements, rights-of-way, leases, etc. Amend 2011 tax return , Soil characteristics, vegetative cover, and status of mineral rights, and Other factors affecting value. Amend 2011 tax return For each comparable sale, the appraisal must include the names of the buyer and seller, the deed book and page number, the date of sale and selling price, a property description, the amount and terms of mortgages, property surveys, the assessed value, the tax rate, and the assessor's appraised FMV. Amend 2011 tax return The comparable selling prices must be adjusted to account for differences between the sale property and the donated property. Amend 2011 tax return Because differences of opinion may arise between appraisers as to the degree of comparability and the amount of the adjustment considered necessary for comparison purposes, an appraiser should document each item of adjustment. Amend 2011 tax return Only comparable sales having the least adjustments in terms of items and/or total dollar adjustments should be considered as comparable to the donated property. Amend 2011 tax return 2. Amend 2011 tax return Capitalization of Income This method capitalizes the net income from the property at a rate that represents a fair return on the particular investment at the particular time, considering the risks involved. Amend 2011 tax return The key elements are the determination of the income to be capitalized and the rate of capitalization. Amend 2011 tax return 3. Amend 2011 tax return Replacement Cost New or Reproduction Cost Minus Observed Depreciation This method, used alone, usually does not result in a determination of FMV. Amend 2011 tax return Instead, it generally tends to set the upper limit of value, particularly in periods of rising costs, because it is reasonable to assume that an informed buyer will not pay more for the real estate than it would cost to reproduce a similar property. Amend 2011 tax return Of course, this reasoning does not apply if a similar property cannot be created because of location, unusual construction, or some other reason. Amend 2011 tax return Generally, this method serves to support the value determined from other methods. Amend 2011 tax return When the replacement cost method is applied to improved realty, the land and improvements are valued separately. Amend 2011 tax return The replacement cost of a building is figured by considering the materials, the quality of workmanship, and the number of square feet or cubic feet in the building. Amend 2011 tax return This cost represents the total cost of labor and material, overhead, and profit. Amend 2011 tax return After the replacement cost has been figured, consideration must be given to the following factors: Physical deterioration—the wear and tear on the building itself, Functional obsolescence—usually in older buildings with, for example, inadequate lighting, plumbing, or heating, small rooms, or a poor floor plan, and Economic obsolescence—outside forces causing the whole area to become less desirable. Amend 2011 tax return Interest in a Business The FMV of any interest in a business, whether a sole proprietorship or a partnership, is the amount that a willing buyer would pay for the interest to a willing seller after consideration of all relevant factors. Amend 2011 tax return The relevant factors to be considered in valuing the business are: The FMV of the assets of the business, The demonstrated earnings capacity of the business, based on a review of past and current earnings, and The other factors used in evaluating corporate stock, if they apply. Amend 2011 tax return The value of the goodwill of the business should also be taken into consideration. Amend 2011 tax return You should keep complete financial and other information on which you base the valuation. Amend 2011 tax return This includes copies of reports of examinations of the business made by accountants, engineers, or any technical experts on or close to the valuation date. Amend 2011 tax return Annuities, Interests for Life or Terms of Years, Remainders, and Reversions The value of these kinds of property is their present value, except in the case of annuities under contracts issued by companies regularly engaged in their sale. Amend 2011 tax return The valuation of these commercial annuity contracts and of insurance policies is discussed later under Certain Life Insurance and Annuity Contracts. Amend 2011 tax return To determine present value, you must know the applicable interest rate and use actuarial tables. Amend 2011 tax return Interest rate. Amend 2011 tax return   The applicable interest rate varies. Amend 2011 tax return It is announced monthly in a news release and published in the Internal Revenue Bulletin as a Revenue Ruling. Amend 2011 tax return The interest rate to use is under the heading “Rate Under Section 7520” for a given month and year. Amend 2011 tax return You can call the IRS office at 1-800-829-1040 to obtain this rate. Amend 2011 tax return Actuarial tables. Amend 2011 tax return   You need to refer to actuarial tables to determine a qualified interest in the form of an annuity, any interest for life or a term of years, or any remainder interest to a charitable organization. Amend 2011 tax return   Use the valuation tables set forth in IRS Publications 1457, Actuarial Values (Book Aleph), and 1458, Actuarial Values (Book Beth). Amend 2011 tax return Both of these publications provide tables containing actuarial factors to be used in determining the present value of an annuity, an interest for life or for a term of years, or a remainder or reversionary interest. Amend 2011 tax return For qualified charitable transfers, you can use the factor for the month in which you made the contribution or for either of the 2 months preceding that month. Amend 2011 tax return   Publication 1457 also contains actuarial factors for computing the value of a remainder interest in a charitable remainder annuity trust and a pooled income fund. Amend 2011 tax return Publication 1458 contains the factors for valuing the remainder interest in a charitable remainder unitrust. Amend 2011 tax return You can download Publications 1457 and 1458 from www. Amend 2011 tax return irs. Amend 2011 tax return gov. Amend 2011 tax return In addition, they are available for purchase via the website of the U. Amend 2011 tax return S. Amend 2011 tax return Government Printing Office, by phone at (202) 512-1800, or by mail from the: Superintendent of Documents P. Amend 2011 tax return O. Amend 2011 tax return Box 371954 Pittsburgh, PA 15250-7954 Tables containing actuarial factors for transfers to pooled income funds may also be found in Income Tax Regulation 1. Amend 2011 tax return 642(c)-6(e)(6), transfers to charitable remainder unitrusts in Regulation 1. Amend 2011 tax return 664-4(e), and other transfers in Regulation 20. Amend 2011 tax return 2031-7(d)(6). Amend 2011 tax return Special factors. Amend 2011 tax return   If you need a special factor for an actual transaction, you can request a letter ruling. Amend 2011 tax return Be sure to include the date of birth of each person the duration of whose life may affect the value of the interest. Amend 2011 tax return Also include copies of the relevant instruments. Amend 2011 tax return IRS charges a user fee for providing special factors. Amend 2011 tax return   For more information about requesting a ruling, see Revenue Procedure 2006-1 (or annual update), 2006-1 I. Amend 2011 tax return R. Amend 2011 tax return B. Amend 2011 tax return 1. Amend 2011 tax return Revenue Procedure 2006-1 is available at www. Amend 2011 tax return irs. Amend 2011 tax return gov/irb/2006-01_IRB/ar06. Amend 2011 tax return html. Amend 2011 tax return   For information on the circumstances under which a charitable deduction may be allowed for the donation of a partial interest in property not in trust, see Partial Interest in Property Not in Trust, later. Amend 2011 tax return Certain Life Insurance and Annuity Contracts The value of an annuity contract or a life insurance policy issued by a company regularly engaged in the sale of such contracts or policies is the amount that company would charge for a comparable contract. Amend 2011 tax return But if the donee of a life insurance policy may reasonably be expected to cash the policy rather than hold it as an investment, then the FMV is the cash surrender value rather than the replacement cost. Amend 2011 tax return If an annuity is payable under a combination annuity contract and life insurance policy (for example, a retirement income policy with a death benefit) and there was no insurance element when it was transferred to the charity, the policy is treated as an annuity contract. Amend 2011 tax return Partial Interest in Property Not in Trust Generally, no deduction is allowed for a charitable contribution, not made in trust, of less than your entire interest in property. Amend 2011 tax return However, this does not apply to a transfer of less than your entire interest if it is a transfer of: A remainder interest in your personal residence or farm, An undivided part of your entire interest in property, or A qualified conservation contribution. Amend 2011 tax return Remainder Interest in Real Property The amount of the deduction for a donation of a remainder interest in real property is the FMV of the remainder interest at the time of the contribution. Amend 2011 tax return To determine this value, you must know the FMV of the property on the date of the contribution. Amend 2011 tax return Multiply this value by the appropriate factor. Amend 2011 tax return Publications 1457 and 1458 contain these factors. Amend 2011 tax return You must make an adjustment for depreciation or depletion using the factors shown in Publication 1459, Actuarial Values (Book Gimel). Amend 2011 tax return You can use the factors for the month in which you made the contribution or for either of the two months preceding that month. Amend 2011 tax return See the earlier discussion on Annuities, Interests for Life or Terms of Years, Remainders, and Reversions. Amend 2011 tax return You can download Publication 1459 from www. Amend 2011 tax return irs. Amend 2011 tax return gov. Amend 2011 tax return For this purpose, the term “depreciable property” means any property subject to wear and tear or obsolescence, even if not used in a trade or business or for the production of income. Amend 2011 tax return If the remainder interest includes both depreciable and nondepreciable property, for example a house and land, the FMV must be allocated between each kind of property at the time of the contribution. Amend 2011 tax return This rule also applies to a gift of a remainder interest that includes property that is part depletable and part not depletable. Amend 2011 tax return Take into account depreciation or depletion only for the property that is subject to depreciation or depletion. Amend 2011 tax return For more information, see section 1. Amend 2011 tax return 170A-12 of the Income Tax Regulations. Amend 2011 tax return Undivided Part of Your Entire Interest A contribution of an undivided part of your entire interest in property must consist of a part of each and every substantial interest or right you own in the property. Amend 2011 tax return It must extend over the entire term of your interest in the property. Amend 2011 tax return For example, you are entitled to the income from certain property for your life (life estate) and you contribute 20% of that life estate to a qualified organization. Amend 2011 tax return You can claim a deduction for the contribution if you do not have any other interest in the property. Amend 2011 tax return To figure the value of a contribution involving a partial interest, see Publication 1457. Amend 2011 tax return If the only interest you own in real property is a remainder interest and you transfer part of that interest to a qualified organization, see the previous discussion on valuation of a remainder interest in real property. Amend 2011 tax return Qualified Conservation Contribution A qualified conservation contribution is a contribution of a qualified real property interest to a qualified organization to be used only for conservation purposes. Amend 2011 tax return Qualified organization. Amend 2011 tax return   For purposes of a qualified conservation contribution, a qualified organization is: A governmental unit, A publicly supported charitable, religious, scientific, literary, educational, etc. Amend 2011 tax return , organization, or An organization that is controlled by, and operated for the exclusive benefit of, a governmental unit or a publicly supported charity. Amend 2011 tax return The organization also must have a commitment to protect the conservation purposes of the donation and must have the resources to enforce the restrictions. Amend 2011 tax return Conservation purposes. Amend 2011 tax return   Your contribution must be made only for one of the following conservation purposes. Amend 2011 tax return Preserving land areas for outdoor recreation by, or for the education of, the general public. Amend 2011 tax return Protecting a relatively natural habitat of fish, wildlife, or plants, or a similar ecosystem. Amend 2011 tax return Preserving open space, including farmland and forest land, if it yields a significant public benefit. Amend 2011 tax return It must be either for the scenic enjoyment of the general public or under a clearly defined federal, state, or local governmental conservation policy. Amend 2011 tax return Preserving a historically important land area or a certified historic structure. Amend 2011 tax return There must be some visual public access to the property. Amend 2011 tax return Factors used in determining the type and amount of public access required include the historical significance of the property, the remoteness or accessibility of the site, and the extent to which intrusions on the privacy of individuals living on the property would be unreasonable. Amend 2011 tax return Building in registered historic district. Amend 2011 tax return   A contribution after July 25, 2006, of a qualified real property interest that is an easement or other restriction on the exterior of a building in a registered historic district is deductible only if it meets all of the following three conditions. Amend 2011 tax return The restriction must preserve the entire exterior of the building and must prohibit any change to the exterior of the building that is inconsistent with its historical character. Amend 2011 tax return You and the organization receiving the contribution must enter into a written agreement certifying, that the organization is a qualified organization and that it has the resources and commitment to maintain the property as donated. Amend 2011 tax return If you make the contribution in a tax year beginning after August 17, 2006, you must include with your return: A qualified appraisal, Photographs of the building's entire exterior, and A description of all restrictions on development of the building, such as zoning laws and restrictive covenants. Amend 2011 tax return   If you make this type of contribution after February 12, 2007, and claim a deduction of more than $10,000, your deduction will not be allowed unless you pay a $500 filing fee. Amend 2011 tax return See Form 8283-V, Payment Voucher for Filing Fee Under Section 170(f)(13), and its instructions. Amend 2011 tax return Qualified real property interest. Amend 2011 tax return   This is any of the following interests in real property. Amend 2011 tax return Your entire interest in real estate other than a mineral interest (subsurface oil, gas, or other minerals, and the right of access to these minerals). Amend 2011 tax return A remainder interest. Amend 2011 tax return A restriction (granted in perpetuity) on the use that may be made of the real property. Amend 2011 tax return Valuation. Amend 2011 tax return   A qualified real property interest described in (1) should be valued in a manner that is consistent with the type of interest transferred. Amend 2011 tax return If you transferred all the interest in the property, the FMV of the property is the amount of the contribution. Amend 2011 tax return If you do not transfer the mineral interest, the FMV of the surface rights in the property is the amount of the contribution. Amend 2011 tax return   If you owned only a remainder interest or an income interest (life estate), see Undivided Part of Your Entire Interest, earlier. Amend 2011 tax return If you owned the entire property but transferred only a remainder interest (item (2)), see Remainder Interest in Real Property, earlier. Amend 2011 tax return   In determining the value of restrictions, you should take into account the selling price in arm's-length transactions of other properties that have comparable restrictions. Amend 2011 tax return If there are no comparable sales, the restrictions are valued indirectly as the difference between the FMVs of the property involved before and after the grant of the restriction. Amend 2011 tax return   The FMV of the property before contribution of the restriction should take into account not only current use but the likelihood that the property, without the restriction, would be developed. Amend 2011 tax return You should also consider any zoning, conservation, or historical preservation laws that would restrict development. Amend 2011 tax return Granting an easement may increase, rather than reduce, the value of property, and in such a situation no deduction would be allowed. Amend 2011 tax return Example. Amend 2011 tax return   You own 10 acres of farmland. Amend 2011 tax return Similar land in the area has an FMV of $2,000 an acre. Amend 2011 tax return However, land in the general area that is restricted solely to farm use has an FMV of $1,500 an acre. Amend 2011 tax return Your county wants to preserve open space and prevent further development in your area. Amend 2011 tax return   You grant to the county an enforceable open space easement in perpetuity on 8 of the 10 acres, restricting its use to farmland. Amend 2011 tax return The value of this easement is $4,000, determined as follows: FMV of the property before granting easement:   $2,000 × 10 acres $20,000 FMV of the property after granting easement:   $1,500 × 8 acres $12,000   $2,000 × 2 acres 4,000 16,000 Value of easement   $4,000   If you later transfer in fee your remaining interest in the 8 acres to another qualified organization, the FMV of your remaining interest is the FMV of the 8 acres reduced by the FMV of the easement granted to the first organization. Amend 2011 tax return More information. Amend 2011 tax return   For more information about qualified conservation contributions, see Publication 526. Amend 2011 tax return Appraisals Appraisals are not necessary for items of property for which you claim a deduction of $5,000 or less. Amend 2011 tax return (There is one exception, described next, for certain clothing and household items. Amend 2011 tax return ) However, you generally will need an appraisal for donated property for which you claim a deduction of more than $5,000. Amend 2011 tax return There are exceptions. Amend 2011 tax return See Deductions of More Than $5,000, later. Amend 2011 tax return The weight given an appraisal depends on the completeness of the report, the qualifications of the appraiser, and the appraiser's demonstrated knowledge of the donated property. Amend 2011 tax return An appraisal must give all the facts on which to base an intelligent judgment of the value of the property. Amend 2011 tax return The appraisal will not be given much weight if: All the factors that apply are not considered, The opinion is not supported with facts, such as purchase price and comparable sales, or The opinion is not consistent with known facts. Amend 2011 tax return The appraiser's opinion is never more valid than the facts on which it is based; without these facts it is simply a guess. Amend 2011 tax return The opinion of a person claiming to be an expert is not binding on the Internal Revenue Service. Amend 2011 tax return All facts associated with the donation must be considered. Amend 2011 tax return Deduction over $500 for certain clothing or household items. Amend 2011 tax return   You must include with your return a qualified appraisal of any single item of clothing or any household item that is not in good used condition or better, that you donated after August 17, 2006, and for which you deduct more than $500. Amend 2011 tax return See Household Goods and Used Clothing, earlier. Amend 2011 tax return Cost of appraisals. Amend 2011 tax return   You may not take a charitable contribution deduction for fees you pay for appraisals of your donated property. Amend 2011 tax return However, these fees may qualify as a miscellaneous deduction, subject to the 2% limit, on Schedule A (Form 1040) if paid to determine the amount allowable as a charitable contribution. Amend 2011 tax return Deductions of More Than $5,000 Generally, if the claimed deduction for an item or group of similar items of donated property is more than $5,000, you must get a qualified appraisal made by a qualified appraiser, and you must attach Section B of Form 8283 to your tax return. Amend 2011 tax return There are exceptions, discussed later. Amend 2011 tax return You should keep the appraiser's report with your written records. Amend 2011 tax return Records are discussed in Publication 526. Amend 2011 tax return The phrase “similar items” means property of the same generic category or type (whether or not donated to the same donee), such as stamp collections, coin collections, lithographs, paintings, photographs, books, nonpublicly traded stock, nonpublicly traded securities other than nonpublicly traded stock, land, buildings, clothing, jewelry, furniture, electronic equipment, household appliances, toys, everyday kitchenware, china, crystal, or silver. Amend 2011 tax return For example, if you give books to three schools and you deduct $2,000, $2,500, and $900, respectively, your claimed deduction is more than $5,000 for these books. Amend 2011 tax return You must get a qualified appraisal of the books and for each school you must attach a fully completed Form 8283, Section B, to your tax return. Amend 2011 tax return Exceptions. Amend 2011 tax return   You do not need an appraisal if the property is: Nonpublicly traded stock of $10,000 or less, A vehicle (including a car, boat, or airplane) for which your deduction is limited to the gross proceeds from its sale, Qualified intellectual property, such as a patent, Certain publicly traded securities described next, Inventory and other property donated by a corporation that are “qualified contributions” for the care of the ill, the needy, or infants, within the meaning of section 170(e)(3)(A) of the Internal Revenue Code, or Stock in trade, inventory, or property held primarily for sale to customers in the ordinary course of your trade or business. Amend 2011 tax return   Although an appraisal is not required for the types of property just listed, you must provide certain information about a donation of any of these types of property on Form 8283. Amend 2011 tax return Publicly traded securities. Amend 2011 tax return   Even if your claimed deduction is more than $5,000, neither a qualified appraisal nor Section B of Form 8283 is required for publicly traded securities that are: Listed on a stock exchange in which quotations are published on a daily basis, Regularly traded in a national or regional over-the-counter market for which published quotations are available, or Shares of an open-end investment company (mutual fund) for which quotations are published on a daily basis in a newspaper of general circulation throughout the United States. Amend 2011 tax return Publicly traded securities that meet these requirements must be reported on Form 8283, Section A. Amend 2011 tax return   A qualified appraisal is not required, but Form 8283, Section B, Parts I and IV, must be completed, for an issue of a security that does not meet the requirements just listed but does meet these requirements: The issue is regularly traded during the computation period (defined later) in a market for which there is an “interdealer quotation system” (defined later), The issuer or agent computes the “average trading price” (defined later) for the same issue for the computation period, The average trading price and total volume of the issue during the computation period are published in a newspaper of general circulation throughout the United States, not later than the last day of the month following the end of the calendar quarter in which the computation period ends, The issuer or agent keeps books and records that list for each transaction during the computation period the date of settlement of the transaction, the name and address of the broker or dealer making the market in which the transaction occurred, and the trading price and volume, and The issuer or agent permits the Internal Revenue Service to review the books and records described in item (4) with respect to transactions during the computation period upon receiving reasonable notice. Amend 2011 tax return   An interdealer quotation system is any system of general circulation to brokers and dealers that regularly disseminates quotations of obligations by two or more identified brokers or dealers who are not related to either the issuer or agent who computes the average trading price of the security. Amend 2011 tax return A quotation sheet prepared and distributed by a broker or dealer in the regular course of business and containing only quotations of that broker or dealer is not an interdealer quotation system. Amend 2011 tax return   The average trading price is the average price of all transactions (weighted by volume), other than original issue or redemption transactions, conducted through a United States office of a broker or dealer who maintains a market in the issue of the security during the computation period. Amend 2011 tax return Bid and asked quotations are not taken into account. Amend 2011 tax return   The computation period is weekly during October through December and monthly during January through September. Amend 2011 tax return The weekly computation periods during October through December begin with the first Monday in October and end with the first Sunday following the last Monday in December. Amend 2011 tax return Nonpublicly traded stock. Amend 2011 tax return   If you contribute nonpublicly traded stock, for which you claim a deduction of $10,000 or less, a qualified appraisal is not required. Amend 2011 tax return However, you must attach Form 8283 to your tax return, with Section B, Parts I and IV, completed. Amend 2011 tax return Deductions of More Than $500,000 If you claim a deduction of more than $500,000 for a donation of property, you must attach a qualified appraisal of the property to your return. Amend 2011 tax return This does not apply to contributions of cash, inventory, publicly traded stock, or intellectual property. Amend 2011 tax return If you do not attach the appraisal, you cannot deduct your contribution, unless your failure to attach the appraisal is due to reasonable cause and not to willful neglect. Amend 2011 tax return Qualified Appraisal Generally, if the claimed deduction for an item or group of similar items of donated property is more than $5,000, you must get a qualified appraisal made by a qualified appraiser. Amend 2011 tax return You must also complete Form 8283, Section B, and attach it to your tax return. Amend 2011 tax return See Deductions of More Than $5,000, earlier. Amend 2011 tax return A qualified appraisal is an appraisal document that: Is made, signed, and dated by a qualified appraiser (defined later) in accordance with generally accepted appraisal standards, Meets the relevant requirements of Regulations section 1. Amend 2011 tax return 170A-13(c)(3) and Notice 2006-96, 2006-46 I. Amend 2011 tax return R. Amend 2011 tax return B. Amend 2011 tax return 902 (available at www. Amend 2011 tax return irs. Amend 2011 tax return gov/irb/2006-46_IRB/ar13. Amend 2011 tax return html), Relates to an appraisal made not earlier than 60 days before the date of contribution of the appraised property, Does not involve a prohibited appraisal fee, and Includes certain information (covered later). Amend 2011 tax return You must receive the qualified appraisal before the due date, including extensions, of the return on which a charitable contribution deduction is first claimed for the donated property. Amend 2011 tax return If the deduction is first claimed on an amended return, the qualified appraisal must be received before the date on which the amended return is filed. Amend 2011 tax return Form 8283, Section B, must be attached to your tax return. Amend 2011 tax return Generally, you do not need to attach the qualified appraisal itself, but you should keep a copy as long as it may be relevant under the tax law. Amend 2011 tax return There are four exceptions. Amend 2011 tax return If you claim a deduction of $20,000 or more for donations of art, you must attach a complete copy of the appraisal. Amend 2011 tax return See Paintings, Antiques, and Other Objects of Art, earlier. Amend 2011 tax return If you claim a deduction of more than $500,000 for a donation of property, you must attach the appraisal. Amend 2011 tax return See Deductions of More Than $500,000, earlier. Amend 2011 tax return If you claim a deduction of more than $500 for an article of clothing, or a household item, that is not in good used condition or better, that you donated after August 17, 2006, you must attach the appraisal. Amend 2011 tax return See Deduction over $500 for certain clothing or household items, earlier. Amend 2011 tax return If you claim a deduction in a tax year beginning after August 17, 2006, for an easement or other restriction on the exterior of a building in a historic district, you must attach the appraisal. Amend 2011 tax return See Building in registered historic district, earlier. Amend 2011 tax return Prohibited appraisal fee. Amend 2011 tax return   Generally, no part of the fee arrangement for a qualified appraisal can be based on a percentage of the appraised value of the property. Amend 2011 tax return If a fee arrangement is based on what is allowed as a deduction, after Internal Revenue Service examination or otherwise, it is treated as a fee based on a percentage of appraised value. Amend 2011 tax return However, appraisals are not disqualified when an otherwise prohi
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Letter 3217C Frequently Asked Questions (FAQs)

What is the letter telling me?

This letter is telling you we have accepted your oral or written request to pay what you owe IRS in installments. It provides you with a specific dollar amount to pay each month and when your payment is due. It also provides the address that your payments should be mailed to. Included is the dollar amount for the fee we charge to establish an agreement. The amount varies depending on the type of agreement that is established. The letter also provides instructions on how to apply for the Low Income Fee Reduction (if you qualify).

What do I have to do?

The letter contains your payment due date. You should mail your payment to us 5 days prior to the due date. It tells you what items you need to put on your check so it can be correctly identified and applied to your account.

How much time do I have?

The letter is usually mailed 4 to 6 weeks before your first payment is due.

What happens if I don't take any action?

If you fail to make your payments the IRS can begin enforcement action by placing a levy on your bank account or wages or file a lien on personal property.

Who should I contact?

If you are unable to make your monthly payment, you should contact IRS as soon as possible. Expeditious contact prior to your payment due date may temporarily stop enforcement actions. The person who answers the phone will assist you.

Page Last Reviewed or Updated: 03-Feb-2014

The Amend 2011 Tax Return

Amend 2011 tax return 5. Amend 2011 tax return   Recordkeeping Table of Contents How To Prove ExpensesWhat Are Adequate Records? What If I Have Incomplete Records? Separating and Combining Expenses How Long To Keep Records and Receipts Examples of Records If you deduct travel, entertainment, gift, or transportation expenses, you must be able to prove (substantiate) certain elements of expense. Amend 2011 tax return This chapter discusses the records you need to keep to prove these expenses. Amend 2011 tax return If you keep timely and accurate records, you will have support to show the IRS if your tax return is ever examined. Amend 2011 tax return You will also have proof of expenses that your employer may require if you are reimbursed under an accountable plan. Amend 2011 tax return These plans are discussed in chapter 6 under Reimbursements . Amend 2011 tax return How To Prove Expenses Table 5-1 is a summary of records you need to prove each expense discussed in this publication. Amend 2011 tax return You must be able to prove the elements listed across the top portion of the chart. Amend 2011 tax return You prove them by having the information and receipts (where needed) for the expenses listed in the first column. Amend 2011 tax return You cannot deduct amounts that you approximate or estimate. Amend 2011 tax return You should keep adequate records to prove your expenses or have sufficient evidence that will support your own statement. Amend 2011 tax return You must generally prepare a written record for it to be considered adequate. Amend 2011 tax return This is because written evidence is more reliable than oral evidence alone. Amend 2011 tax return However, if you prepare a record on a computer, it is considered an adequate record. Amend 2011 tax return What Are Adequate Records? You should keep the proof you need in an account book, diary, log, statement of expense, trip sheets, or similar record. Amend 2011 tax return You should also keep documentary evidence that, together with your record, will support each element of an expense. Amend 2011 tax return Documentary evidence. Amend 2011 tax return   You generally must have documentary evidence, such as receipts, canceled checks, or bills, to support your expenses. Amend 2011 tax return Exception. Amend 2011 tax return   Documentary evidence is not needed if any of the following conditions apply. Amend 2011 tax return You have meals or lodging expenses while traveling away from home for which you account to your employer under an accountable plan, and you use a per diem allowance method that includes meals and/or lodging. Amend 2011 tax return ( Accountable plans and per diem allowances are discussed in chapter 6. Amend 2011 tax return ) Your expense, other than lodging, is less than $75. Amend 2011 tax return You have a transportation expense for which a receipt is not readily available. Amend 2011 tax return Adequate evidence. Amend 2011 tax return   Documentary evidence ordinarily will be considered adequate if it shows the amount, date, place, and essential character of the expense. Amend 2011 tax return   For example, a hotel receipt is enough to support expenses for business travel if it has all of the following information. Amend 2011 tax return The name and location of the hotel. Amend 2011 tax return The dates you stayed there. Amend 2011 tax return Separate amounts for charges such as lodging, meals, and telephone calls. Amend 2011 tax return   A restaurant receipt is enough to prove an expense for a business meal if it has all of the following information. Amend 2011 tax return The name and location of the restaurant. Amend 2011 tax return The number of people served. Amend 2011 tax return The date and amount of the expense. Amend 2011 tax return If a charge is made for items other than food and beverages, the receipt must show that this is the case. Amend 2011 tax return Canceled check. Amend 2011 tax return   A canceled check, together with a bill from the payee, ordinarily establishes the cost. Amend 2011 tax return However, a canceled check by itself does not prove a business expense without other evidence to show that it was for a business purpose. Amend 2011 tax return Duplicate information. Amend 2011 tax return   You do not have to record information in your account book or other record that duplicates information shown on a receipt as long as your records and receipts complement each other in an orderly manner. Amend 2011 tax return   You do not have to record amounts your employer pays directly for any ticket or other travel item. Amend 2011 tax return However, if you charge these items to your employer, through a credit card or otherwise, you must keep a record of the amounts you spend. Amend 2011 tax return Timely-kept records. Amend 2011 tax return   You should record the elements of an expense or of a business use at or near the time of the expense or use and support it with sufficient documentary evidence. Amend 2011 tax return A timely-kept record has more value than a statement prepared later when generally there is a lack of accurate recall. Amend 2011 tax return   You do not need to write down the elements of every expense on the day of the expense. Amend 2011 tax return If you maintain a log on a weekly basis that accounts for use during the week, the log is considered a timely-kept record. Amend 2011 tax return   If you give your employer, client, or customer an expense account statement, it can also be considered a timely-kept record. Amend 2011 tax return This is true if you copy it from your account book, diary, log, statement of expense, trip sheets, or similar record. Amend 2011 tax return Proving business purpose. Amend 2011 tax return   You must generally provide a written statement of the business purpose of an expense. Amend 2011 tax return However, the degree of proof varies according to the circumstances in each case. Amend 2011 tax return If the business purpose of an expense is clear from the surrounding circumstances, then you do not need to give a written explanation. Amend 2011 tax return Example. Amend 2011 tax return If you are a sales representative who calls on customers on an established sales route, you do not have to give a written explanation of the business purpose for traveling that route. Amend 2011 tax return You can satisfy the requirements by recording the length of the delivery route once, the date of each trip at or near the time of the trips, and the total miles you drove the car during the tax year. Amend 2011 tax return You could also establish the date of each trip with a receipt, record of delivery, or other documentary evidence. Amend 2011 tax return Confidential information. Amend 2011 tax return   You do not need to put confidential information relating to an element of a deductible expense (such as the place, business purpose, or business relationship) in your account book, diary, or other record. Amend 2011 tax return However, you do have to record the information elsewhere at or near the time of the expense and have it available to fully prove that element of the expense. Amend 2011 tax return What If I Have Incomplete Records? If you do not have complete records to prove an element of an expense, then you must prove the element with: Your own written or oral statement containing specific information about the element, and Other supporting evidence that is sufficient to establish the element. Amend 2011 tax return If the element is the description of a gift, or the cost, time, place, or date of an expense, the supporting evidence must be either direct evidence or documentary evidence. Amend 2011 tax return Direct evidence can be written statements or the oral testimony of your guests or other witnesses setting forth detailed information about the element. Amend 2011 tax return Documentary evidence can be receipts, paid bills, or similar evidence. Amend 2011 tax return If the element is either the business relationship of your guests or the business purpose of the amount spent, the supporting evidence can be circumstantial rather than direct. Amend 2011 tax return For example, the nature of your work, such as making deliveries, provides circumstantial evidence of the use of your car for business purposes. Amend 2011 tax return Invoices of deliveries establish when you used the car for business. Amend 2011 tax return Table 5-1. Amend 2011 tax return How To Prove Certain Business Expenses IF you have expenses for . Amend 2011 tax return . Amend 2011 tax return THEN you must keep records that show details of the following elements . Amend 2011 tax return . Amend 2011 tax return . Amend 2011 tax return   Amount Time Place or  Description Business Purpose Business Relationship Travel Cost of each separate expense for travel, lodging, and meals. Amend 2011 tax return Incidental expenses may be totaled in reasonable categories such as taxis, fees and tips, etc. Amend 2011 tax return Dates you left and returned for each trip and number of days spent on business. Amend 2011 tax return Destination or area of your travel (name of city, town, or other designation). Amend 2011 tax return Purpose: Business purpose for the expense or the business benefit gained or expected to be gained. Amend 2011 tax return    Relationship: N/A Entertainment Cost of each separate expense. Amend 2011 tax return Incidental expenses such as taxis, telephones, etc. Amend 2011 tax return , may be totaled on a daily basis. Amend 2011 tax return Date of entertainment. Amend 2011 tax return (Also see Business Purpose. Amend 2011 tax return ) Name and address or location of place of entertainment. Amend 2011 tax return Type of entertainment if not otherwise apparent. Amend 2011 tax return (Also see Business Purpose. Amend 2011 tax return ) Purpose: Business purpose for the expense or the business benefit gained or expected to be gained. Amend 2011 tax return  For entertainment, the nature of the business discussion or activity. Amend 2011 tax return If the entertainment was directly before or after a business discussion: the date, place, nature, and duration of the business discussion, and the identities of the persons who took part in both the business discussion and the entertainment activity. Amend 2011 tax return    Relationship: Occupations or other information (such as names, titles, or other designations) about the recipients that shows their business relationship to you. Amend 2011 tax return  For entertainment, you must also prove that you or your employee was present if the entertainment was a business meal. Amend 2011 tax return Gifts Cost of the gift. Amend 2011 tax return Date of the gift. Amend 2011 tax return Description of the gift. Amend 2011 tax return   Transportation Cost of each separate expense. Amend 2011 tax return For car expenses, the cost of the car and any improvements, the date you started using it for business, the mileage for each business use, and the total miles for the year. Amend 2011 tax return Date of the expense. Amend 2011 tax return For car expenses, the date of the use of the car. Amend 2011 tax return Your business destination. Amend 2011 tax return Purpose: Business purpose for the expense. Amend 2011 tax return    Relationship: N/A Sampling. Amend 2011 tax return   You can keep an adequate record for parts of a tax year and use that record to prove the amount of business or investment use for the entire year. Amend 2011 tax return You must demonstrate by other evidence that the periods for which an adequate record is kept are representative of the use throughout the tax year. Amend 2011 tax return Example. Amend 2011 tax return You use your car to visit the offices of clients, meet with suppliers and other subcontractors, and pick up and deliver items to clients. Amend 2011 tax return There is no other business use of the car, but you and your family use the car for personal purposes. Amend 2011 tax return You keep adequate records during the first week of each month that show that 75% of the use of the car is for business. Amend 2011 tax return Invoices and bills show that your business use continues at the same rate during the later weeks of each month. Amend 2011 tax return Your weekly records are representative of the use of the car each month and are sufficient evidence to support the percentage of business use for the year. Amend 2011 tax return Exceptional circumstances. Amend 2011 tax return   You can satisfy the substantiation requirements with other evidence if, because of the nature of the situation in which an expense is made, you cannot get a receipt. Amend 2011 tax return This applies if all the following are true. Amend 2011 tax return You were unable to obtain evidence for an element of the expense or use that completely satisfies the requirements explained earlier under What Are Adequate Records . Amend 2011 tax return You are unable to obtain evidence for an element that completely satisfies the two rules listed earlier under What If I Have Incomplete Records . Amend 2011 tax return You have presented other evidence for the element that is the best proof possible under the circumstances. Amend 2011 tax return Destroyed records. Amend 2011 tax return   If you cannot produce a receipt because of reasons beyond your control, you can prove a deduction by reconstructing your records or expenses. Amend 2011 tax return Reasons beyond your control include fire, flood, and other casualties. Amend 2011 tax return    Table 5-2. Amend 2011 tax return Daily Business Mileage and Expense Log Name:       Odometer Readings Expenses Date Destination  (City, Town, or Area) Business Purpose Start Stop Miles  this trip Type  (Gas, oil, tolls, etc. Amend 2011 tax return ) Amount                                                                                                                   Weekly  Total             Total Year-to-Date             Separating and Combining Expenses This section explains when expenses must be kept separate and when expenses can be combined. Amend 2011 tax return Separating expenses. Amend 2011 tax return   Each separate payment is generally considered a separate expense. Amend 2011 tax return For example, if you entertain a customer or client at dinner and then go to the theater, the dinner expense and the cost of the theater tickets are two separate expenses. Amend 2011 tax return You must record them separately in your records. Amend 2011 tax return Season or series tickets. Amend 2011 tax return   If you buy season or series tickets for business use, you must treat each ticket in the series as a separate item. Amend 2011 tax return To determine the cost of individual tickets, divide the total cost (but not more than face value) by the number of games or performances in the series. Amend 2011 tax return You must keep records to show whether you use each ticket as a gift or entertainment. Amend 2011 tax return Also, you must be able to prove the cost of nonluxury box seat tickets if you rent a skybox or other private luxury box for more than one event. Amend 2011 tax return See Entertainment tickets in chapter 2. Amend 2011 tax return Combining items. Amend 2011 tax return   You can make one daily entry in your record for reasonable categories of expenses. Amend 2011 tax return Examples are taxi fares, telephone calls, or other incidental travel costs. Amend 2011 tax return Meals should be in a separate category. Amend 2011 tax return You can include tips for meal-related services with the costs of the meals. Amend 2011 tax return   Expenses of a similar nature occurring during the course of a single event are considered a single expense. Amend 2011 tax return For example, if during entertainment at a cocktail lounge, you pay separately for each serving of refreshments, the total expense for the refreshments is treated as a single expense. Amend 2011 tax return Car expenses. Amend 2011 tax return   You can account for several uses of your car that can be considered part of a single use, such as a round trip or uninterrupted business use, with a single record. Amend 2011 tax return Minimal personal use, such as a stop for lunch on the way between two business stops, is not an interruption of business use. Amend 2011 tax return Example. Amend 2011 tax return You make deliveries at several different locations on a route that begins and ends at your employer's business premises and that includes a stop at the business premises between two deliveries. Amend 2011 tax return You can account for these using a single record of miles driven. Amend 2011 tax return Gift expenses. Amend 2011 tax return   You do not always have to record the name of each recipient of a gift. Amend 2011 tax return A general listing will be enough if it is evident that you are not trying to avoid the $25 annual limit on the amount you can deduct for gifts to any one person. Amend 2011 tax return For example, if you buy a large number of tickets to local high school basketball games and give one or two tickets to each of many customers, it is usually enough to record a general description of the recipients. Amend 2011 tax return Allocating total cost. Amend 2011 tax return   If you can prove the total cost of travel or entertainment but you cannot prove how much it cost for each person who participated in the event, you may have to allocate the total cost among you and your guests on a pro rata basis. Amend 2011 tax return To do so, you must establish the number of persons who participated in the event. Amend 2011 tax return   An allocation would be needed, for example, if you did not have a business relationship with all of your guests. Amend 2011 tax return See Allocating between business and nonbusiness in chapter 2. Amend 2011 tax return If your return is examined. Amend 2011 tax return    If your return is examined, you may have to provide additional information to the IRS. Amend 2011 tax return This information could be needed to clarify or to establish the accuracy or reliability of information contained in your records, statements, testimony, or documentary evidence before a deduction is allowed. Amend 2011 tax return    THIS IS NOT AN OFFICIAL INTERNAL REVENUE FORM Table 5-3. Amend 2011 tax return Weekly Traveling Expense and Entertainment Record From: To: Name: Expenses Sunday Monday Tuesday Wednesday Thursday Friday Saturday Total 1. Amend 2011 tax return Travel Expenses: Airlines                                 Excess Baggage                                 Bus – Train                                 Cab and Limousine                                 Tips                                 Porter                                 2. Amend 2011 tax return Meals and Lodging:  Breakfast                                 Lunch                                 Dinner                                 Hotel and Motel  (Detail in Schedule B)                                 3. Amend 2011 tax return Entertainment  (Detail in Schedule C)                                 4. Amend 2011 tax return Other Expenses:  Postage                                 Telephone & Telegraph                                 Stationery & Printing                                 Stenographer                                 Sample Room                                 Advertising                                 Assistant(s)                                 Trade Shows                                 5. Amend 2011 tax return Car Expenses: (List all car expenses - the division between business and personal expenses may be made at the end of the year. Amend 2011 tax return ) (Detail mileage in Schedule A. Amend 2011 tax return ) Gas, oil, lube, wash                                 Repairs, parts                                 Tires, supplies                                 Parking fees, tolls                                 6. Amend 2011 tax return Other (Identify)                                 Total                                 Note: Attach receipted bills for (1) ALL lodging and (2) any other expenses of $75. Amend 2011 tax return 00 or more. Amend 2011 tax return Schedule A – Car Mileage: End                 Start                 Total                 Business Mileage                 Schedule B – Lodging Hotel or Motel Name                 City                 Schedule C – Entertainment Date Item Place Amount Business Purpose Business Relationship                                             WEEKLY REIMBURSEMENTS:     Travel and transportation expenses     Other reimbursements     TOTAL   How Long To Keep Records and Receipts You must keep records as long as they may be needed for the administration of any provision of the Internal Revenue Code. Amend 2011 tax return Generally, this means you must keep records that support your deduction (or an item of income) for 3 years from the date you file the income tax return on which the deduction is claimed. Amend 2011 tax return A return filed early is considered filed on the due date. Amend 2011 tax return For a more complete explanation of how long to keep records, see Publication 583, Starting a Business and Keeping Records. Amend 2011 tax return You must keep records of the business use of your car for each year of the recovery period. Amend 2011 tax return See More-than-50%-use test in chapter 4 under Depreciation Deduction. Amend 2011 tax return Reimbursed for expenses. Amend 2011 tax return   Employees who give their records and documentation to their employers and are reimbursed for their expenses generally do not have to keep copies of this information. Amend 2011 tax return However, you may have to prove your expenses if any of the following conditions apply. Amend 2011 tax return You claim deductions for expenses that are more than reimbursements. Amend 2011 tax return Your expenses are reimbursed under a nonaccountable plan. Amend 2011 tax return Your employer does not use adequate accounting procedures to verify expense accounts. Amend 2011 tax return You are related to your employer as defined under Per Diem and Car Allowances , in chapter 6. Amend 2011 tax return Reimbursements , adequate accounting , and nonaccountable plans are discussed in chapter 6. Amend 2011 tax return Examples of Records Table 5-2 and Table 5-3 are examples of worksheets which can be used for tracking business expenses. Amend 2011 tax return Prev  Up  Next   Home   More Online Publications