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Amendment Tax Return

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Amendment Tax Return

Amendment tax return 24. Amendment tax return   Contributions Table of Contents Introduction Useful Items - You may want to see: Organizations That Qualify To Receive Deductible ContributionsTypes of Qualified Organizations Contributions You Can DeductContributions From Which You Benefit Expenses Paid for Student Living With You Out-of-Pocket Expenses in Giving Services Contributions You Cannot DeductContributions to Individuals Contributions to Nonqualified Organizations Contributions From Which You Benefit Value of Time or Services Personal Expenses Appraisal Fees Contributions of PropertyException. Amendment tax return Household items. Amendment tax return Deduction more than $500. Amendment tax return Form 1098-C. Amendment tax return Filing deadline approaching and still no Form 1098-C. Amendment tax return Exception 1—vehicle used or improved by organization. Amendment tax return Exception 2—vehicle given or sold to needy individual. Amendment tax return Deduction $500 or less. Amendment tax return Right to use property. Amendment tax return Tangible personal property. Amendment tax return Future interest. Amendment tax return Determining Fair Market Value Giving Property That Has Decreased in Value Giving Property That Has Increased in Value When To DeductChecks. Amendment tax return Text message. Amendment tax return Credit card. Amendment tax return Pay-by-phone account. Amendment tax return Stock certificate. Amendment tax return Promissory note. Amendment tax return Option. Amendment tax return Borrowed funds. Amendment tax return Limits on DeductionsCarryovers Records To KeepCash Contributions Noncash Contributions Out-of-Pocket Expenses How To Report Introduction This chapter explains how to claim a deduction for your charitable contributions. Amendment tax return It discusses the following topics. Amendment tax return The types of organizations to which you can make deductible charitable contributions. Amendment tax return The types of contributions you can deduct. Amendment tax return How much you can deduct. Amendment tax return What records you must keep. Amendment tax return How to report your charitable contributions. Amendment tax return A charitable contribution is a donation or gift to, or for the use of, a qualified organization. Amendment tax return It is voluntary and is made without getting, or expecting to get, anything of equal value. Amendment tax return Form 1040 required. Amendment tax return    To deduct a charitable contribution, you must file Form 1040 and itemize deductions on Schedule A. Amendment tax return The amount of your deduction may be limited if certain rules and limits explained in this chapter apply to you. Amendment tax return The limits are explained in detail in Publication 526. Amendment tax return Useful Items - You may want to see: Publication 526 Charitable Contributions 561 Determining the Value of Donated Property Form (and Instructions) Schedule A (Form 1040) Itemized Deductions 8283 Noncash Charitable Contributions Organizations That Qualify To Receive Deductible Contributions You can deduct your contributions only if you make them to a qualified organization. Amendment tax return Most organizations other than churches and governments must apply to the IRS to become a qualified organization. Amendment tax return How to check whether an organization can receive deductible charitable contributions. Amendment tax return   You can ask any organization whether it is a qualified organization, and most will be able to tell you. Amendment tax return Or go to IRS. Amendment tax return gov. Amendment tax return Click on “Tools” and then on “Exempt Organizations Select Check” (www. Amendment tax return irs. Amendment tax return gov/Charities-&-Non-Profits/Exempt-Organizations-Select-Check). Amendment tax return This online tool will enable you to search for qualified organizations. Amendment tax return You can also call the IRS to find out if an organization is qualified. Amendment tax return Call 1-877-829-5500. Amendment tax return People who are deaf, hard of hearing, or have a speech disability and who have access to TTY/TDD equipment can call 1-800-829-4059. Amendment tax return Deaf or hard of hearing individuals can also contact the IRS through relay services such as the Federal Relay Service at www. Amendment tax return gsa. Amendment tax return gov/fedrelay. Amendment tax return Types of Qualified Organizations Generally, only the following types of organizations can be qualified organizations. Amendment tax return A community chest, corporation, trust, fund, or foundation organized or created in or under the laws of the United States, any state, the District of Columbia, or any possession of the United States (including Puerto Rico). Amendment tax return It must, however, be organized and operated only for charitable, religious, scientific, literary, or educational purposes, or for the prevention of cruelty to children or animals. Amendment tax return Certain organizations that foster national or international amateur sports competition also qualify. Amendment tax return War veterans' organizations, including posts, auxiliaries, trusts, or foundations, organized in the United States or any of its possessions (including Puerto Rico). Amendment tax return Domestic fraternal societies, orders, and associations operating under the lodge system. Amendment tax return (Your contribution to this type of organization is deductible only if it is to be used solely for charitable, religious, scientific, literary, or educational purposes, or for the prevention of cruelty to children or animals. Amendment tax return ) Certain nonprofit cemetery companies or corporations. Amendment tax return (Your contribution to this type of organization is not deductible if it can be used for the care of a specific lot or mausoleum crypt. Amendment tax return ) The United States or any state, the District of Columbia, a U. Amendment tax return S. Amendment tax return possession (including Puerto Rico), a political subdivision of a state or U. Amendment tax return S. Amendment tax return possession, or an Indian tribal government or any of its subdivisions that perform substantial government functions. Amendment tax return (Your contribution to this type of organization is only deductible if it is to be used solely for public purposes. Amendment tax return ) Examples. Amendment tax return    The following list gives some examples of qualified organizations. Amendment tax return Churches, a convention or association of churches, temples, synagogues, mosques, and other religious organizations. Amendment tax return Most nonprofit charitable organizations such as the American Red Cross and the United Way. Amendment tax return Most nonprofit educational organizations, including the Boy Scouts of America, Girl Scouts of America, colleges, and museums. Amendment tax return This also includes nonprofit daycare centers that provide childcare to the general public if substantially all the childcare is provided to enable parents and guardians to be gainfully employed. Amendment tax return However, if your contribution is a substitute for tuition or other enrollment fee, it is not deductible as a charitable contribution, as explained later under Contributions You Cannot Deduct . Amendment tax return Nonprofit hospitals and medical research organizations. Amendment tax return Utility company emergency energy programs, if the utility company is an agent for a charitable organization that assists individuals with emergency energy needs. Amendment tax return Nonprofit volunteer fire companies. Amendment tax return Nonprofit organizations that develop and maintain public parks and recreation facilities. Amendment tax return Civil defense organizations. Amendment tax return Certain foreign charitable organizations. Amendment tax return   Under income tax treaties with Canada, Israel, and Mexico, you may be able to deduct contributions to certain Canadian, Israeli, or Mexican charitable organizations. Amendment tax return Generally, you must have income from sources in that country. Amendment tax return For additional information on the deduction of contributions to Canadian charities, see Publication 597, Information on the United States–Canada Income Tax Treaty. Amendment tax return If you need more information on how to figure your contribution to Mexican and Israeli charities, see Publication 526. Amendment tax return Contributions You Can Deduct Generally, you can deduct contributions of money or property you make to, or for the use of, a qualified organization. Amendment tax return A contribution is “for the use of” a qualified organization when it is held in a legally enforceable trust for the qualified organization or in a similar legal arrangement. Amendment tax return The contributions must be made to a qualified organization and not set aside for use by a specific person. Amendment tax return If you give property to a qualified organization, you generally can deduct the fair market value of the property at the time of the contribution. Amendment tax return See Contributions of Property , later in this chapter. Amendment tax return Your deduction for charitable contributions generally cannot be more than 50% of your adjusted gross income (AGI), but in some cases 20% and 30% limits may apply. Amendment tax return See Limits on Deductions , later. Amendment tax return In addition, the total of your charitable contribution deduction and certain other itemized deductions may be limited. Amendment tax return See chapter 29. Amendment tax return Table 24-1 gives examples of contributions you can and cannot deduct. Amendment tax return Contributions From Which You Benefit If you receive a benefit as a result of making a contribution to a qualified organization, you can deduct only the amount of your contribution that is more than the value of the benefit you receive. Amendment tax return Also see Contributions From Which You Benefit under Contributions You Cannot Deduct, later. Amendment tax return If you pay more than fair market value to a qualified organization for goods or services, the excess may be a charitable contribution. Amendment tax return For the excess amount to qualify, you must pay it with the intent to make a charitable contribution. Amendment tax return Example 1. Amendment tax return You pay $65 for a ticket to a dinner-dance at a church. Amendment tax return Your entire $65 payment goes to the church. Amendment tax return The ticket to the dinner-dance has a fair market value of $25. Amendment tax return When you buy your ticket, you know that its value is less than your payment. Amendment tax return To figure the amount of your charitable contribution, subtract the value of the benefit you receive ($25) from your total payment ($65). Amendment tax return You can deduct $40 as a contribution to the church. Amendment tax return Example 2. Amendment tax return At a fundraising auction conducted by a charity, you pay $600 for a week's stay at a beach house. Amendment tax return The amount you pay is no more than the fair rental value. Amendment tax return You have not made a deductible charitable contribution. Amendment tax return Athletic events. Amendment tax return   If you make a payment to, or for the benefit of, a college or university and, as a result, you receive the right to buy tickets to an athletic event in the athletic stadium of the college or university, you can deduct 80% of the payment as a charitable contribution. Amendment tax return   If any part of your payment is for tickets (rather than the right to buy tickets), that part is not deductible. Amendment tax return Subtract the price of the tickets from your payment. Amendment tax return You can deduct 80% of the remaining amount as a charitable contribution. Amendment tax return Example 1. Amendment tax return You pay $300 a year for membership in a university's athletic scholarship program. Amendment tax return The only benefit of membership is that you have the right to buy one season ticket for a seat in a designated area of the stadium at the university's home football games. Amendment tax return You can deduct $240 (80% of $300) as a charitable contribution. Amendment tax return Table 24-1. Amendment tax return Examples of Charitable Contributions—A Quick Check Use the following lists for a quick check of whether you can deduct a contribution. Amendment tax return See the rest of this chapter for more information and additional rules and limits that may apply. Amendment tax return Deductible As  Charitable Contributions Not Deductible  As Charitable Contributions Money or property you give to:  Churches, synagogues, temples, mosques, and other religious organizations Federal, state, and local governments, if your contribution is solely for public purposes (for example, a gift to reduce the public debt or maintain a public park) Nonprofit schools and hospitals The Salvation Army, American Red Cross, CARE, Goodwill Industries, United Way, Boy Scouts of America, Girl Scouts of America, Boys and Girls Clubs of America, etc. Amendment tax return War veterans groups   Expenses paid for a student living with you, sponsored by a qualified organization  Out-of-pocket expenses when you serve a qualified organization as a volunteer Money or property you give to:  Civic leagues, social and sports clubs, labor unions, and chambers of commerce Foreign organizations (except certain Canadian, Israeli, and Mexican charities) Groups that are run for personal profit Groups whose purpose is to lobby for law changes Homeowners' associations Individuals Political groups or candidates for public office   Cost of raffle, bingo, or lottery tickets  Dues, fees, or bills paid to country clubs, lodges, fraternal orders, or similar groups  Tuition  Value of your time or services  Value of blood given to a blood bank    Example 2. Amendment tax return The facts are the same as in Example 1 except your $300 payment includes the purchase of one season ticket for the stated ticket price of $120. Amendment tax return You must subtract the usual price of a ticket ($120) from your $300 payment. Amendment tax return The result is $180. Amendment tax return Your deductible charitable contribution is $144 (80% of $180). Amendment tax return Charity benefit events. Amendment tax return   If you pay a qualified organization more than fair market value for the right to attend a charity ball, banquet, show, sporting event, or other benefit event, you can deduct only the amount that is more than the value of the privileges or other benefits you receive. Amendment tax return   If there is an established charge for the event, that charge is the value of your benefit. Amendment tax return If there is no established charge, the reasonable value of the right to attend the event is the value of your benefit. Amendment tax return Whether you use the tickets or other privileges has no effect on the amount you can deduct. Amendment tax return However, if you return the ticket to the qualified organization for resale, you can deduct the entire amount you paid for the ticket. Amendment tax return    Even if the ticket or other evidence of payment indicates that the payment is a “contribution,” this does not mean you can deduct the entire amount. Amendment tax return If the ticket shows the price of admission and the amount of the contribution, you can deduct the contribution amount. Amendment tax return Example. Amendment tax return You pay $40 to see a special showing of a movie for the benefit of a qualified organization. Amendment tax return Printed on the ticket is “Contribution—$40. Amendment tax return ” If the regular price for the movie is $8, your contribution is $32 ($40 payment − $8 regular price). Amendment tax return Membership fees or dues. Amendment tax return    You may be able to deduct membership fees or dues you pay to a qualified organization. Amendment tax return However, you can deduct only the amount that is more than the value of the benefits you receive. Amendment tax return    You cannot deduct dues, fees, or assessments paid to country clubs and other social organizations. Amendment tax return They are not qualified organizations. Amendment tax return Certain membership benefits can be disregarded. Amendment tax return   Both you and the organization can disregard the following membership benefits if you receive them in return for an annual payment of $75 or less. Amendment tax return Any rights or privileges, other than those discussed under Athletic events , earlier, that you can use frequently while you are a member, such as: Free or discounted admission to the organization's facilities or events, Free or discounted parking, Preferred access to goods or services, and Discounts on the purchase of goods and services. Amendment tax return Admission, while you are a member, to events open only to members of the organization, if the organization reasonably projects that the cost per person (excluding any allocated overhead) is not more than $10. Amendment tax return 20. Amendment tax return Token items. Amendment tax return   You do not have to reduce your contribution by the value of any benefit you receive if both of the following are true. Amendment tax return You receive only a small item or other benefit of token value. Amendment tax return The qualified organization correctly determines that the value of the item or benefit you received is not substantial and informs you that you can deduct your payment in full. Amendment tax return Written statement. Amendment tax return   A qualified organization must give you a written statement if you make a payment of more than $75 that is partly a contribution and partly for goods or services. Amendment tax return The statement must say that you can deduct only the amount of your payment that is more than the value of the goods or services you received. Amendment tax return It must also give you a good faith estimate of the value of those goods or services. Amendment tax return   The organization can give you the statement either when it solicits or when it receives the payment from you. Amendment tax return Exception. Amendment tax return   An organization will not have to give you this statement if one of the following is true. Amendment tax return The organization is: A governmental organization described in (5) under Types of Qualified Organizations , earlier, or An organization formed only for religious purposes, and the only benefit you receive is an intangible religious benefit (such as admission to a religious ceremony) that generally is not sold in commercial transactions outside the donative context. Amendment tax return You receive only items whose value is not substantial as described under Token items , earlier. Amendment tax return You receive only membership benefits that can be disregarded, as described earlier. Amendment tax return Expenses Paid for Student Living With You You may be able to deduct some expenses of having a student live with you. Amendment tax return You can deduct qualifying expenses for a foreign or American student who: Lives in your home under a written agreement between you and a qualified organization as part of a program of the organization to provide educational opportunities for the student, Is not your relative or dependent, and Is a full-time student in the twelfth or any lower grade at a school in the United States. Amendment tax return You can deduct up to $50 a month for each full calendar month the student lives with you. Amendment tax return Any month when conditions (1) through (3) are met for 15 days or more counts as a full month. Amendment tax return For additional information, see Expenses Paid for Student Living With You in Publication 526. Amendment tax return Mutual exchange program. Amendment tax return   You cannot deduct the costs of a foreign student living in your home under a mutual exchange program through which your child will live with a family in a foreign country. Amendment tax return Table 24-2. Amendment tax return Volunteers' Questions and Answers If you volunteer for a qualified organization, the following questions and answers may apply to you. Amendment tax return All of the rules explained in this chapter also apply. Amendment tax return See, in particular, Out-of-Pocket Expenses in Giving Services . Amendment tax return Question Answer I volunteer 6 hours a week in the office of a qualified organization. Amendment tax return The receptionist is paid $10 an hour for the same work. Amendment tax return Can I deduct $60 a week for my time?    No, you cannot deduct the value of your time or services. Amendment tax return The office is 30 miles from my home. Amendment tax return Can I deduct any of my car expenses for these trips? Yes, you can deduct the costs of gas and oil that are directly related to getting to and from the place where you volunteer. Amendment tax return If you don't want to figure your actual costs, you can deduct 14 cents for each mile. Amendment tax return I volunteer as a Red Cross nurse's aide at a hospital. Amendment tax return Can I deduct the cost of the uniforms I must wear? Yes, you can deduct the cost of buying and cleaning your uniforms if the hospital is a qualified organization, the uniforms are not suitable for everyday use, and you must wear them when volunteering. Amendment tax return I pay a babysitter to watch my children while I volunteer for a qualified organization. Amendment tax return Can I deduct these costs? No, you cannot deduct payments for childcare expenses as a charitable contribution, even if you would be unable to volunteer without childcare. Amendment tax return (If you have childcare expenses so you can work for pay, see chapter 32. Amendment tax return ) Out-of-Pocket Expenses in Giving Services Although you cannot deduct the value of your services given to a qualified organization, you may be able to deduct some amounts you pay in giving services to a qualified organization. Amendment tax return The amounts must be: Unreimbursed, Directly connected with the services, Expenses you had only because of the services you gave, and Not personal, living, or family expenses. Amendment tax return Table 24-2 contains questions and answers that apply to some individuals who volunteer their services. Amendment tax return Conventions. Amendment tax return   If a qualified organization selects you to attend a convention as its representative, you can deduct unreimbursed expenses for travel, including reasonable amounts for meals and lodging, while away from home overnight in connection with the convention. Amendment tax return However, see Travel , later. Amendment tax return   You cannot deduct personal expenses for sightseeing, fishing parties, theater tickets, or nightclubs. Amendment tax return You also cannot deduct transportation, meals and lodging, and other expenses for your spouse or children. Amendment tax return    You cannot deduct your travel expenses in attending a church convention if you go only as a member of your church rather than as a chosen representative. Amendment tax return You can, however, deduct unreimbursed expenses that are directly connected with giving services for your church during the convention. Amendment tax return Uniforms. Amendment tax return   You can deduct the cost and upkeep of uniforms that are not suitable for everyday use and that you must wear while performing donated services for a charitable organization. Amendment tax return Foster parents. Amendment tax return   You may be able to deduct as a charitable contribution some of the costs of being a foster parent (foster care provider) if you have no profit motive in providing the foster care and are not, in fact, making a profit. Amendment tax return A qualified organization must select the individuals you take into your home for foster care. Amendment tax return    You can deduct expenses that meet both of the following requirements. Amendment tax return They are unreimbursed out-of-pocket expenses to feed, clothe, and care for the foster child. Amendment tax return They are incurred primarily to benefit the qualified organization. Amendment tax return   Unreimbursed expenses that you cannot deduct as charitable contributions may be considered support provided by you in determining whether you can claim the foster child as a dependent. Amendment tax return For details, see chapter 3. Amendment tax return Example. Amendment tax return You cared for a foster child because you wanted to adopt her, not to benefit the agency that placed her in your home. Amendment tax return Your unreimbursed expenses are not deductible as charitable contributions. Amendment tax return Car expenses. Amendment tax return   You can deduct as a charitable contribution any unreimbursed out-of-pocket expenses, such as the cost of gas and oil, that are directly related to the use of your car in giving services to a charitable organization. Amendment tax return You cannot deduct general repair and maintenance expenses, depreciation, registration fees, or the costs of tires or insurance. Amendment tax return    If you do not want to deduct your actual expenses, you can use a standard mileage rate of 14 cents a mile to figure your contribution. Amendment tax return   You can deduct parking fees and tolls whether you use your actual expenses or the standard mileage rate. Amendment tax return   You must keep reliable written records of your car expenses. Amendment tax return For more information, see Car expenses under Records To Keep, later. Amendment tax return Travel. Amendment tax return   Generally, you can claim a charitable contribution deduction for travel expenses necessarily incurred while you are away from home performing services for a charitable organization only if there is no significant element of personal pleasure, recreation, or vacation in the travel. Amendment tax return This applies whether you pay the expenses directly or indirectly. Amendment tax return You are paying the expenses indirectly if you make a payment to the charitable organization and the organization pays for your travel expenses. Amendment tax return   The deduction for travel expenses will not be denied simply because you enjoy providing services to the charitable organization. Amendment tax return Even if you enjoy the trip, you can take a charitable contribution deduction for your travel expenses if you are on duty in a genuine and substantial sense throughout the trip. Amendment tax return However, if you have only nominal duties, or if for significant parts of the trip you do not have any duties, you cannot deduct your travel expenses. Amendment tax return Example 1. Amendment tax return You are a troop leader for a tax-exempt youth group and you take the group on a camping trip. Amendment tax return You are responsible for overseeing the setup of the camp and for providing adult supervision for other activities during the entire trip. Amendment tax return You participate in the activities of the group and enjoy your time with them. Amendment tax return You oversee the breaking of camp and you transport the group home. Amendment tax return You can deduct your travel expenses. Amendment tax return Example 2. Amendment tax return You sail from one island to another and spend 8 hours a day counting whales and other forms of marine life. Amendment tax return The project is sponsored by a charitable organization. Amendment tax return In most circumstances, you cannot deduct your expenses. Amendment tax return Example 3. Amendment tax return You work for several hours each morning on an archaeological dig sponsored by a charitable organization. Amendment tax return The rest of the day is free for recreation and sightseeing. Amendment tax return You cannot take a charitable contribution deduction even though you work very hard during those few hours. Amendment tax return Example 4. Amendment tax return You spend the entire day attending a charitable organization's regional meeting as a chosen representative. Amendment tax return In the evening you go to the theater. Amendment tax return You can claim your travel expenses as charitable contributions, but you cannot claim the cost of your evening at the theater. Amendment tax return Daily allowance (per diem). Amendment tax return   If you provide services for a charitable organization and receive a daily allowance to cover reasonable travel expenses, including meals and lodging while away from home overnight, you must include in income any part of the allowance that is more than your deductible travel expenses. Amendment tax return You may be able to deduct any necessary travel expenses that are more than the allowance. Amendment tax return Deductible travel expenses. Amendment tax return   These include: Air, rail, and bus transportation, Out-of-pocket expenses for your car, Taxi fares or other costs of transportation between the airport or station and your hotel, Lodging costs, and The cost of meals. Amendment tax return Because these travel expenses are not business-related, they are not subject to the same limits as business-related expenses. Amendment tax return For information on business travel expenses, see Travel Expenses in chapter 26. Amendment tax return Contributions You Cannot Deduct There are some contributions you cannot deduct, such as those made to specific individuals and those made to nonqualified organizations. Amendment tax return (See Contributions to Individuals and Contributions to Nonqualified Organizations , next. Amendment tax return ) There are others you can deduct only part of, as discussed later under Contributions From Which You Benefit . Amendment tax return Contributions to Individuals You cannot deduct contributions to specific individuals, including the following. Amendment tax return Contributions to fraternal societies made for the purpose of paying medical or burial expenses of deceased members. Amendment tax return Contributions to individuals who are needy or worthy. Amendment tax return You cannot deduct these contributions even if you make them to a qualified organization for the benefit of a specific person. Amendment tax return But you can deduct a contribution to a qualified organization that helps needy or worthy individuals if you do not indicate that your contribution is for a specific person. Amendment tax return Example. Amendment tax return You can deduct contributions to a qualified organization for flood relief, hurricane relief, or other disaster relief. Amendment tax return However, you cannot deduct contributions earmarked for relief of a particular individual or family. Amendment tax return Payments to a member of the clergy that can be spent as he or she wishes, such as for personal expenses. Amendment tax return Expenses you paid for another person who provided services to a qualified organization. Amendment tax return Example. Amendment tax return Your son does missionary work. Amendment tax return You pay his expenses. Amendment tax return You cannot claim a deduction for your son's unreimbursed expenses related to his contribution of services. Amendment tax return Payments to a hospital that are for a specific patient's care or for services for a specific patient. Amendment tax return You cannot deduct these payments even if the hospital is operated by a city, a state, or other qualified organization. Amendment tax return Contributions to Nonqualified Organizations You cannot deduct contributions to organizations that are not qualified to receive tax-deductible contributions, including the following. Amendment tax return Certain state bar associations if: The bar is not a political subdivision of a state, The bar has private, as well as public, purposes, such as promoting the professional interests of members, and Your contribution is unrestricted and can be used for private purposes. Amendment tax return Chambers of commerce and other business leagues or organizations (but see chapter 28). Amendment tax return Civic leagues and associations. Amendment tax return Communist organizations. Amendment tax return Country clubs and other social clubs. Amendment tax return Most foreign organizations (other than certain Canadian, Israeli, or Mexican charitable organizations). Amendment tax return For details, see Publication 526. Amendment tax return Homeowners' associations. Amendment tax return Labor unions (but see chapter 28). Amendment tax return Political organizations and candidates. Amendment tax return Contributions From Which You Benefit If you receive or expect to receive a financial or economic benefit as a result of making a contribution to a qualified organization, you cannot deduct the part of the contribution that represents the value of the benefit you receive. Amendment tax return See Contributions From Which You Benefit under Contributions You Can Deduct, earlier. Amendment tax return These contributions include the following. Amendment tax return Contributions for lobbying. Amendment tax return This includes amounts that you earmark for use in, or in connection with, influencing specific legislation. Amendment tax return Contributions to a retirement home for room, board, maintenance, or admittance. Amendment tax return Also, if the amount of your contribution depends on the type or size of apartment you will occupy, it is not a charitable contribution. Amendment tax return Costs of raffles, bingo, lottery, etc. Amendment tax return You cannot deduct as a charitable contribution amounts you pay to buy raffle or lottery tickets or to play bingo or other games of chance. Amendment tax return For information on how to report gambling winnings and losses, see Gambling winnings in chapter 12 and Gambling Losses Up to the Amount of Gambling Winnings in chapter 28. Amendment tax return Dues to fraternal orders and similar groups. Amendment tax return However, see Membership fees or dues , earlier, under Contributions You Can Deduct. Amendment tax return Tuition, or amounts you pay instead of tuition. Amendment tax return You cannot deduct as a charitable contribution amounts you pay as tuition even if you pay them for children to attend parochial schools or qualifying nonprofit daycare centers. Amendment tax return You also cannot deduct any fixed amount you must pay in addition to, or instead of, tuition to enroll in a private school, even if it is designated as a “donation. Amendment tax return ” Value of Time or Services You cannot deduct the value of your time or services, including: Blood donations to the American Red Cross or to blood banks, and The value of income lost while you work as an unpaid volunteer for a qualified organization. Amendment tax return Personal Expenses You cannot deduct personal, living, or family expenses, such as the following items. Amendment tax return The cost of meals you eat while you perform services for a qualified organization unless it is necessary for you to be away from home overnight while performing the services. Amendment tax return Adoption expenses, including fees paid to an adoption agency and the costs of keeping a child in your home before adoption is final (but see Adoption Credit in chapter 37, and the instructions for Form 8839, Qualified Adoption Expenses). Amendment tax return You also may be able to claim an exemption for the child. Amendment tax return See Adopted child in chapter 3. Amendment tax return Appraisal Fees You cannot deduct as a charitable contribution any fees you pay to find the fair market value of donated property (but see chapter 28). Amendment tax return Contributions of Property If you contribute property to a qualified organization, the amount of your charitable contribution is generally the fair market value of the property at the time of the contribution. Amendment tax return However, if the property has increased in value, you may have to make some adjustments to the amount of your deduction. Amendment tax return See Giving Property That Has Increased in Value , later. Amendment tax return For information about the records you must keep and the information you must furnish with your return if you donate property, see Records To Keep and How To Report , later. Amendment tax return Clothing and household items. Amendment tax return   You cannot take a deduction for clothing or household items you donate unless the clothing or household items are in good used condition or better. Amendment tax return Exception. Amendment tax return   You can take a deduction for a contribution of an item of clothing or household item that is not in good used condition or better if you deduct more than $500 for it and include a qualified appraisal of it with your return. Amendment tax return Household items. Amendment tax return   Household items include: Furniture and furnishings, Electronics, Appliances, Linens, and Other similar items. Amendment tax return   Household items do not include: Food, Paintings, antiques, and other objects of art, Jewelry and gems, and Collections. Amendment tax return Cars, boats, and airplanes. Amendment tax return    The following rules apply to any donation of a qualified vehicle. Amendment tax return A qualified vehicle is: A car or any motor vehicle manufactured mainly for use on public streets, roads, and highways, A boat, or An airplane. Amendment tax return Deduction more than $500. Amendment tax return   If you donate a qualified vehicle with a claimed fair market value of more than $500, you can deduct the smaller of: The gross proceeds from the sale of the vehicle by the organization, or The vehicle's fair market value on the date of the contribution. Amendment tax return If the vehicle's fair market value was more than your cost or other basis, you may have to reduce the fair market value to figure the deductible amount, as described under Giving Property That Has Increased in Value , later. Amendment tax return Form 1098-C. Amendment tax return   You must attach to your return Copy B of the Form 1098-C, Contributions of Motor Vehicles, Boats, and Airplanes, (or other statement containing the same information as Form 1098-C) you received from the organization. Amendment tax return The Form 1098-C (or other statement) will show the gross proceeds from the sale of the vehicle. Amendment tax return   If you e-file your return, you must: Attach Copy B of Form 1098-C to Form 8453 and mail the forms to the IRS, or Include Copy B of Form 1098-C as a pdf attachment if your software program allows it. Amendment tax return   If you do not attach Form 1098-C (or other statement), you cannot deduct your contribution. Amendment tax return    You must get Form 1098-C (or other statement) within 30 days of the sale of the vehicle. Amendment tax return But if exception 1 or 2 (described later) applies, you must get Form 1098-C (or other statement) within 30 days of your donation. Amendment tax return Filing deadline approaching and still no Form 1098-C. Amendment tax return   If the filing deadline is approaching and you still do not have a Form 1098-C, you have two choices. Amendment tax return Request an automatic 6-month extension of time to file your return. Amendment tax return You can get this extension by filing Form 4868, Application for Automatic Extension of Time to File U. Amendment tax return S. Amendment tax return Individual Income Tax Return. Amendment tax return  For more information, see Automatic Extension in chapter 1. Amendment tax return File the return on time without claiming the deduction for the qualified vehicle. Amendment tax return After receiving the Form 1098-C, file an amended return, Form 1040X, claiming the deduction. Amendment tax return Attach Copy B of Form 1098-C (or other statement) to the amended return. Amendment tax return For more information about amended returns, see Amended Returns and Claims for Refund in chapter 1. Amendment tax return Exceptions. Amendment tax return   There are two exceptions to the rules just described for deductions of more than $500. Amendment tax return Exception 1—vehicle used or improved by organization. Amendment tax return   If the qualified organization makes a significant intervening use of or material improvement to the vehicle before transferring it, you generally can deduct the vehicle's fair market value at the time of the contribution. Amendment tax return But if the vehicle's fair market value was more than your cost or other basis, you may have to reduce the fair market value to get the deductible amount, as described under Giving Property That Has Increased in Value , later. Amendment tax return The Form 1098-C (or other statement) will show whether this exception applies. Amendment tax return Exception 2—vehicle given or sold to needy individual. Amendment tax return   If the qualified organization will give the vehicle, or sell it for a price well below fair market value, to a needy individual to further the organization's charitable purpose, you generally can deduct the vehicle's fair market value at the time of the contribution. Amendment tax return But if the vehicle's fair market value was more than your cost or other basis, you may have to reduce the fair market value to get the deductible amount, as described under Giving Property That Has Increased in Value , later. Amendment tax return The Form 1098-C (or other statement) will show whether this exception applies. Amendment tax return   This exception does not apply if the organization sells the vehicle at auction. Amendment tax return In that case, you cannot deduct the vehicle's fair market value. Amendment tax return Example. Amendment tax return Anita donates a used car to a qualified organization. Amendment tax return She bought it 3 years ago for $9,000. Amendment tax return A used car guide shows the fair market value for this type of car is $6,000. Amendment tax return However, Anita gets a Form 1098-C from the organization showing the car was sold for $2,900. Amendment tax return Neither exception 1 nor exception 2 applies. Amendment tax return If Anita itemizes her deductions, she can deduct $2,900 for her donation. Amendment tax return She must attach Form 1098-C and Form 8283 to her return. Amendment tax return Deduction $500 or less. Amendment tax return   If the qualified organization sells the vehicle for $500 or less and exceptions 1 and 2 do not apply, you can deduct the smaller of: $500, or The vehicle's fair market value on the date of the contribution. Amendment tax return But if the vehicle's fair market value was more than your cost or other basis, you may have to reduce the fair market value to get the deductible amount, as described under Giving Property That Has Increased in Value , later. Amendment tax return   If the vehicle's fair market value is at least $250 but not more than $500, you must have a written statement from the qualified organization acknowledging your donation. Amendment tax return The statement must contain the information and meet the tests for an acknowledgment described under Deductions of At Least $250 But Not More Than $500 under Records To Keep, later. Amendment tax return Partial interest in property. Amendment tax return   Generally, you cannot deduct a charitable contribution of less than your entire interest in property. Amendment tax return Right to use property. Amendment tax return   A contribution of the right to use property is a contribution of less than your entire interest in that property and is not deductible. Amendment tax return For exceptions and more information, see Partial Interest in Property Not in Trust in Publication 561. Amendment tax return Future interests in tangible personal property. Amendment tax return   You cannot deduct the value of a charitable contribution of a future interest in tangible personal property until all intervening interests in and rights to the actual possession or enjoyment of the property have either expired or been turned over to someone other than yourself, a related person, or a related organization. Amendment tax return Tangible personal property. Amendment tax return   This is any property, other than land or buildings, that can be seen or touched. Amendment tax return It includes furniture, books, jewelry, paintings, and cars. Amendment tax return Future interest. Amendment tax return   This is any interest that is to begin at some future time, regardless of whether it is designated as a future interest under state law. Amendment tax return Determining Fair Market Value This section discusses general guidelines for determining the fair market value of various types of donated property. Amendment tax return Publication 561 contains a more complete discussion. Amendment tax return Fair market value is the price at which property would change hands between a willing buyer and a willing seller, neither having to buy or sell, and both having reasonable knowledge of all the relevant facts. Amendment tax return Used clothing and household items. Amendment tax return   The fair market value of used clothing and household goods is usually far less than what you paid for them when they were new. Amendment tax return   For used clothing, you should claim as the value the price that buyers of used items actually pay in used clothing stores, such as consignment or thrift shops. Amendment tax return See Household Goods in Publication 561 for information on the valuation of household goods, such as furniture, appliances, and linens. Amendment tax return Example. Amendment tax return Dawn Greene donated a coat to a thrift store operated by her church. Amendment tax return She paid $300 for the coat 3 years ago. Amendment tax return Similar coats in the thrift store sell for $50. Amendment tax return The fair market value of the coat is $50. Amendment tax return Dawn's donation is limited to $50. Amendment tax return Cars, boats, and airplanes. Amendment tax return   If you contribute a car, boat, or airplane to a charitable organization, you must determine its fair market value. Amendment tax return Certain commercial firms and trade organizations publish used car pricing guides, commonly called “blue books,” containing complete dealer sale prices or dealer average prices for recent model years. Amendment tax return The guides may be published monthly or seasonally and for different regions of the country. Amendment tax return These guides also provide estimates for adjusting for unusual equipment, unusual mileage, and physical condition. Amendment tax return The prices are not “official” and these publications are not considered an appraisal of any specific donated property. Amendment 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. Amendment tax return   You can also find used car pricing information on the Internet. Amendment tax return Example. Amendment tax return You donate a used car in poor condition to a local high school for use by students studying car repair. Amendment tax return A used car guide shows the dealer retail value for this type of car in poor condition is $1,600. Amendment tax return However, the guide shows the price for a private party sale of the car is only $750. Amendment tax return The fair market value of the car is considered to be $750. Amendment tax return Large quantities. Amendment tax return   If you contribute a large number of the same item, fair market value is the price at which comparable numbers of the item are being sold. Amendment tax return Giving Property That Has Decreased in Value If you contribute property with a fair market value that is less than your basis in it, your deduction is limited to its fair market value. Amendment tax return You cannot claim a deduction for the difference between the property's basis and its fair market value. Amendment tax return Giving Property That Has Increased in Value If you contribute property with a fair market value that is more than your basis in it, you may have to reduce the fair market value by the amount of appreciation (increase in value) when you figure your deduction. Amendment tax return Your basis in property is generally what you paid for it. Amendment tax return See chapter 13 if you need more information about basis. Amendment tax return Different rules apply to figuring your deduction, depending on whether the property is: Ordinary income property, or Capital gain property. Amendment tax return Ordinary income property. Amendment tax return   Property is ordinary income property if you would have recognized ordinary income or short-term capital gain had you sold it at fair market value on the date it was contributed. Amendment tax return Examples of ordinary income property are inventory, works of art created by the donor, manuscripts prepared by the donor, and capital assets (defined in chapter 14) held 1 year or less. Amendment tax return Amount of deduction. Amendment tax return   The amount you can deduct for a contribution of ordinary income property is its fair market value minus the amount that would be ordinary income or short-term capital gain if you sold the property for its fair market value. Amendment tax return Generally, this rule limits the deduction to your basis in the property. Amendment tax return Example. Amendment tax return You donate stock you held for 5 months to your church. Amendment tax return The fair market value of the stock on the day you donate it is $1,000, but you paid only $800 (your basis). Amendment tax return Because the $200 of appreciation would be short-term capital gain if you sold the stock, your deduction is limited to $800 (fair market value minus the appreciation). Amendment tax return Capital gain property. Amendment tax return   Property is capital gain property if you would have recognized long-term capital gain had you sold it at fair market value on the date of the contribution. Amendment tax return It includes capital assets held more than 1 year, as well as certain real property and depreciable property used in your trade or business and, generally, held more than 1 year. Amendment tax return Amount of deduction — general rule. Amendment tax return   When figuring your deduction for a contribution of capital gain property, you generally can use the fair market value of the property. Amendment tax return Exceptions. Amendment tax return   In certain situations, you must reduce the fair market value by any amount that would have been long-term capital gain if you had sold the property for its fair market value. Amendment tax return Generally, this means reducing the fair market value to the property's cost or other basis. Amendment tax return Bargain sales. Amendment tax return   A bargain sale of property is a sale or exchange for less than the property's fair market value. Amendment tax return A bargain sale to a qualified organization is partly a charitable contribution and partly a sale or exchange. Amendment tax return A bargain sale may result in a taxable gain. Amendment tax return More information. Amendment tax return   For more information on donating appreciated property, see Giving Property That Has Increased in Value in Publication 526. Amendment tax return When To Deduct You can deduct your contributions only in the year you actually make them in cash or other property (or in a later carryover year, as explained later under Carryovers ). Amendment tax return This applies whether you use the cash or an accrual method of accounting. Amendment tax return Time of making contribution. Amendment tax return   Usually, you make a contribution at the time of its unconditional delivery. Amendment tax return Checks. Amendment tax return   A check you mail to a charity is considered delivered on the date you mail it. Amendment tax return Text message. Amendment tax return   Contributions made by text message are deductible in the year you send the text message if the contribution is charged to your telephone or wireless account. Amendment tax return Credit card. Amendment tax return    Contributions charged on your credit card are deductible in the year you make the charge. Amendment tax return Pay-by-phone account. Amendment tax return    Contributions made through a pay-by-phone account are considered delivered on the date the financial institution pays the amount. Amendment tax return Stock certificate. Amendment tax return   A properly endorsed stock certificate is considered delivered on the date of mailing or other delivery to the charity or to the charity's agent. Amendment tax return However, if you give a stock certificate to your agent or to the issuing corporation for transfer to the name of the charity, your contribution is not delivered until the date the stock is transferred on the books of the corporation. Amendment tax return Promissory note. Amendment tax return   If you issue and deliver a promissory note to a charity as a contribution, it is not a contribution until you make the note payments. Amendment tax return Option. Amendment tax return    If you grant a charity an option to buy real property at a bargain price, it is not a contribution until the organization exercises the option. Amendment tax return Borrowed funds. Amendment tax return   If you contribute borrowed funds, you can deduct the contribution in the year you deliver the funds to the charity, regardless of when you repay the loan. Amendment tax return Limits on Deductions The amount you can deduct for charitable contributions cannot be more than 50% of your adjusted gross income (AGI). Amendment tax return Your deduction may be further limited to 30% or 20% of your AGI, depending on the type of property you give and the type of organization you give it to. Amendment tax return If your total contributions for the year are 20% or less of your AGI, these limits do not apply to you. Amendment tax return The limits are discussed in detail under Limits on Deductions in Publication 526. Amendment tax return A higher limit applies to certain qualified conservation contributions. Amendment tax return See Publication 526 for details. Amendment tax return Carryovers You can carry over any contributions you cannot deduct in the current year because they exceed your adjusted-gross-income limits. Amendment tax return You can deduct the excess in each of the next 5 years until it is used up, but not beyond that time. Amendment tax return For more information, see Carryovers in Publication 526. Amendment tax return Records To Keep You must keep records to prove the amount of the contributions you make during the year. Amendment tax return The kind of records you must keep depends on the amount of your contributions and whether they are: Cash contributions, Noncash contributions, or Out-of-pocket expenses when donating your services. Amendment tax return Note. Amendment tax return An organization generally must give you a written statement if it receives a payment from you that is more than $75 and is partly a contribution and partly for goods or services. Amendment tax return (See Contributions From Which You Benefit under Contributions You Can Deduct, earlier. Amendment tax return ) Keep the statement for your records. Amendment tax return It may satisfy all or part of the recordkeeping requirements explained in the following discussions. Amendment tax return Cash Contributions Cash contributions include those paid by cash, check, electronic funds transfer, debit card, credit card, or payroll deduction. Amendment tax return You cannot deduct a cash contribution, regardless of the amount, unless you keep one of the following. Amendment tax return A bank record that shows the name of the qualified organization, the date of the contribution, and the amount of the contribution. Amendment tax return Bank records may include: A canceled check, A bank or credit union statement, or A credit card statement. Amendment tax return A receipt (or a letter or other written communication) from the qualified organization showing the name of the organization, the date of the contribution, and the amount of the contribution. Amendment tax return The payroll deduction records described next. Amendment tax return Payroll deductions. Amendment tax return   If you make a contribution by payroll deduction, you must keep: A pay stub, Form W-2, or other document furnished by your employer that shows the date and amount of the contribution, and A pledge card or other document prepared by or for the qualified organization that shows the name of the organization. Amendment tax return If your employer withheld $250 or more from a single paycheck, see Contributions of $250 or More , next. Amendment tax return Contributions of $250 or More You can claim a deduction for a contribution of $250 or more only if you have an acknowledgment of your contribution from the qualified organization or certain payroll deduction records. Amendment tax return If you made more than one contribution of $250 or more, you must have either a separate acknowledgment for each or one acknowledgment that lists each contribution and the date of each contribution and shows your total contributions. Amendment tax return Amount of contribution. Amendment tax return   In figuring whether your contribution is $250 or more, do not combine separate contributions. Amendment tax return For example, if you gave your church $25 each week, your weekly payments do not have to be combined. Amendment tax return Each payment is a separate contribution. Amendment tax return   If contributions are made by payroll deduction, the deduction from each paycheck is treated as a separate contribution. Amendment tax return   If you made a payment that is partly for goods and services, as described earlier under Contributions From Which You Benefit , your contribution is the amount of the payment that is more than the value of the goods and services. Amendment tax return Acknowledgment. Amendment tax return   The acknowledgment must meet these tests. Amendment tax return It must be written. Amendment tax return It must include: The amount of cash you contributed, Whether the qualified organization gave you any goods or services as a result of your contribution (other than certain token items and membership benefits), A description and good faith estimate of the value of any goods or services described in (b) (other than intangible religious benefits), and A statement that the only benefit you received was an intangible religious benefit, if that was the case. Amendment tax return The acknowledgment does not need to describe or estimate the value of an intangible religious benefit. Amendment tax return An intangible religious benefit is a benefit that generally is not sold in commercial transactions outside a donative (gift) context. Amendment tax return An example is admission to a religious ceremony. Amendment tax return You must get it on or before the earlier of: The date you file your return for the year you make the contribution, or The due date, including extensions, for filing the return. Amendment tax return   If the acknowledgment does not show the date of the contribution, you must also have a bank record or receipt, as described earlier, that does show the date of the contribution. Amendment tax return If the acknowledgment shows the date of the contribution and meets the other tests just described, you do not need any other records. Amendment tax return Payroll deductions. Amendment tax return   If you make a contribution by payroll deduction and your employer withholds $250 or more from a single paycheck, you must keep: A pay stub, Form W-2, or other document furnished by your employer that shows the amount withheld as a contribution, and A pledge card or other document prepared by or for the qualified organization that shows the name of the organization and states the organization does not provide goods or services in return for any contribution made to it by payroll deduction. Amendment tax return A single pledge card may be kept for all contributions made by payroll deduction regardless of amount as long as it contains all the required information. Amendment tax return   If the pay stub, Form W-2, pledge card, or other document does not show the date of the contribution, you must have another document that does show the date of the contribution. Amendment tax return If the pay stub, Form W-2, pledge card, or other document shows the date of the contribution, you do not need any other records except those just described in (1) and (2). Amendment tax return Noncash Contributions For a contribution not made in cash, the records you must keep depend on whether your deduction for the contribution is: Less than $250, At least $250 but not more than $500, Over $500 but not more than $5,000, or Over $5,000. Amendment tax return Amount of deduction. Amendment tax return   In figuring whether your deduction is $500 or more, combine your claimed deductions for all similar items of property donated to any charitable organization during the year. Amendment tax return   If you received goods or services in return, as described earlier in Contributions From Which You Benefit , reduce your contribution by the value of those goods or services. Amendment tax return If you figure your deduction by reducing the fair market value of the donated property by its appreciation, as described earlier in Giving Property That Has Increased in Value , your contribution is the reduced amount. Amendment tax return Deductions of Less Than $250 If you make any noncash contribution, you must get and keep a receipt from the charitable organization showing: The name of the charitable organization, The date and location of the charitable contribution, and A reasonably detailed description of the property. Amendment tax return A letter or other written communication from the charitable organization acknowledging receipt of the contribution and containing the information in (1), (2), and (3) will serve as a receipt. Amendment tax return You are not required to have a receipt where it is impractical to get one (for example, if you leave property at a charity's unattended drop site). Amendment tax return Additional records. Amendment tax return   You must also keep reliable written records for each item of contributed property. Amendment tax return Your written records must include the following information. Amendment tax return The name and address of the organization to which you contributed. Amendment tax return The date and location of the contribution. Amendment tax return A description of the property in detail reasonable under the circumstances. Amendment tax return For a security, keep the name of the issuer, the type of security, and whether it is regularly traded on a stock exchange or in an over-the-counter market. Amendment tax return The fair market value of the property at the time of the contribution and how you figured the fair market value. Amendment tax return If it was determined by appraisal, keep a signed copy of the appraisal. Amendment tax return The cost or other basis of the property, if you must reduce its fair market value by appreciation. Amendment tax return Your records should also include the amount of the reduction and how you figured it. Amendment tax return The amount you claim as a deduction for the tax year as a result of the contribution, if you contribute less than your entire interest in the property during the tax year. Amendment tax return Your records must include the amount you claimed as a deduction in any earlier years for contributions of other interests in this property. Amendment tax return They must also include the name and address of each organization to which you contributed the other interests, the place where any such tangible property is located or kept, and the name of any person in possession of the property, other than the organization to which you contributed it. Amendment tax return The terms of any conditions attached to the contribution of property. Amendment tax return Deductions of At Least $250 But Not More Than $500 If you claim a deduction of at least $250 but not more than $500 for a noncash charitable contribution, you must get and keep an acknowledgment of your contribution from the qualified organization. Amendment tax return If you made more than one contribution of $250 or more, you must have either a separate acknowledgment for each or one acknowledgment that shows your total contributions. Amendment tax return The acknowledgment must contain the information in items (1) through (3) under Deductions of Less Than $250 , earlier, and your written records must include the information listed in that discussion under Additional records . Amendment tax return The acknowledgment must also meet these tests. Amendment tax return It must be written. Amendment tax return It must include: A description (but not necessarily the value) of any property you contributed, Whether the qualified organization gave you any goods or services as a result of your contribution (other than certain token items and membership benefits), and A description and good faith estimate of the value of any goods or services described in (b). Amendment tax return If the only benefit you received was an intangible religious benefit (such as admission to a religious ceremony) that generally is not sold in a commercial transaction outside the donative context, the acknowledgment must say so and does not need to describe or estimate the value of the benefit. Amendment tax return You must get it on or before the earlier of: The date you file your return for the year you make the contribution, or The due date, including extensions, for filing the return. Amendment tax return Deductions Over $500 You are required to give additional information if you claim a deduction over $500 for noncash charitable contributions. Amendment tax return See Records To Keep in Publication 526 for more information. Amendment tax return Out-of-Pocket Expenses If you give services to a qualified organization and have unreimbursed out-of-pocket expenses related to those services, the following two rules apply. Amendment tax return You must have adequate records to prove the amount of the expenses. Amendment tax return If any of your unreimbursed out-of-pocket expenses, considered separately, are $250 or more (for example, you pay $250 or more for an airline ticket to attend a convention of a qualified organization as a chosen representative), you must get an acknowledgment from the qualified organization that contains: A description of the services you provided, A statement of whether or not the organization provided you any goods or services to reimburse you for the expenses you incurred, A description and a good faith estimate of the value of any goods or services (other than intangible religious benefits) provided to reimburse you, and A statement that the only benefit you received was an intangible religious benefit, if that was the case. Amendment tax return The acknowledgment does not need to describe or estimate the value of an intangible religious benefit (defined earlier under Acknowledgment ). Amendment tax return You must get the acknowledgment on or before the earlier of: The date you file your return for the year you make the contribution, or The due date, including extensions, for filing the return. Amendment tax return Car expenses. Amendment tax return   If you claim expenses directly related to use of your car in giving services to a qualified organization, you must keep reliable written records of your expenses. Amendment tax return Whether your records are considered reliable depends on all the facts and circumstances. Amendment tax return Generally, they may be considered reliable if you made them regularly and at or near the time you had the expenses. Amendment tax return   For example, your records might show the name of the organization you were serving and the dates you used your car for a charitable purpose. Amendment tax return If you use the standard mileage rate of 14 cents a mile, your records must show the miles you drove your car for the charitable purpose. Amendment tax return If you deduct your actual expenses, your records must show the costs of operating the car that are directly related to a charitable purpose. Amendment tax return   See Car expenses under Out-of-Pocket Expenses in Giving Services, earlier, for the expenses you can deduct. Amendment tax return How To Report Report your charitable contributions on Schedule A (Form 1040). Amendment tax return If your total deduction for all noncash contributions for the year is over $500, you must also file Form 8283. Amendment tax return See How To Report in Publication 526 for more information. Amendment tax return Prev  Up  Next   Home   More Online Publications
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Alternative Minimum Tax (AMT) Assistant for Individuals

Individuals with a higher income may be subject to the Alternative Minimum Tax. Under the tax law, certain tax benefits can significantly reduce a taxpayer’s regular tax amount. The AMT sets a limit on those benefits. If the tax benefits would reduce total tax below the AMT limit, the taxpayer must pay the higher Alternative Minimum Tax amount.

If you prepare your own Form 1040 tax return without using software, you may need to complete Form 6251, Alternative Minimum Tax – Individuals to determine whether you owe the AMT.  You can use the AMT Assistant before you go through preparing Form 6251 to find out if you actually need to complete it.

Should you use the AMT Assistant?
Check here first. If you received or claimed any of the following items in the tax year, you must complete Form 6251 and there is no need to use the AMT Assistant:

  • Accelerated Depreciation
  • Stock by exercising an incentive stock option and you did not dispose of the stock in the same year
  • Tax exempt interest from private activity bonds
  • Intangible drilling, circulation, research, experimental or mining costs
  • Amortization of pollution-control facilities or depletion
  • Income (or loss) from tax-shelter farm activities or passive activities
  • Income from long-term contracts not figured using the percentage-of-completion method
  • Interest paid on a home mortgage NOT used to buy, build or substantially improve your home
  • Investment interest expense reported on Form 4952
  • Net operating loss deduction
  • Alternative minimum tax adjustments from an estate, trust, electing large partnership or cooperative
  • Section 1202 exclusion
  • Any general business credit in Part I on Form 3800
  • Empowerment zone and renewal community employment credit
  • Qualified electric vehicle credit
  • Alternative fuel vehicle refueling property credit
  • Credit for prior year minimum tax

Using the AMT Assistant
Even if you did not receive or claim any of the above, you may need to complete Form 6251. You can use the AMT Assistant and quickly find out. Based on your entries the AMT Assistant results will tell you either:

  • You do not owe the AMT, or
  • You must complete Form 6251

Before You Start
Have your draft 2013 Form 1040 available, completed through Line 44 (Tax), as well as your draft Schedule A (if used). If you are claiming the foreign tax credit, you should also complete Form 1040, line 47, because you may be asked for information from that line.

Note: the AMT Assistant will ask you again about the items in the list above. Just answer “no” to confirm and continue.

Remember the answer you get is only as accurate as the data you enter!

Start the Tax Year 2013 AMT Assistant
NOTE: The "print" button on the results page is not working. Please use your Web browser's standard printing method to print your results.

Prior years still available:

Tax Year 2012 AMT Assistant

Tax Year 2011 AMT Assistant

Your entries in the AMT Assistant application are anonymous and the information will be used only for the purpose of determining your eligibility. All entries are erased when you exit or start over. See the “IRS Privacy Policy” for more information.

Page Last Reviewed or Updated: 27-Mar-2014

The Amendment Tax Return

Amendment tax return 4. Amendment tax return   How Income of Aliens Is Taxed Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: Resident Aliens Nonresident AliensTrade or Business in the United States Effectively Connected Income The 30% Tax Income From Real Property Transportation Tax Interrupted Period of Residence Expatriation TaxExpatriation Before June 4, 2004 Expatriation After June 3, 2004, and Before June 17, 2008 Expatriation After June 16, 2008 Introduction Resident and nonresident aliens are taxed in different ways. Amendment tax return Resident aliens are generally taxed in the same way as U. Amendment tax return S. Amendment tax return citizens. Amendment tax return Nonresident aliens are taxed based on the source of their income and whether or not their income is effectively connected with a U. Amendment tax return S. Amendment tax return trade or business. Amendment tax return The following discussions will help you determine if income you receive during the tax year is effectively connected with a U. Amendment tax return S. Amendment tax return trade or business and how it is taxed. Amendment tax return Topics - This chapter discusses: Income that is effectively connected with a U. Amendment tax return S. Amendment tax return trade or business. Amendment tax return Income that is not effectively connected with a U. Amendment tax return S. Amendment tax return trade or business. Amendment tax return Interrupted period of residence. Amendment tax return Expatriation tax. Amendment tax return Useful Items - You may want to see: Publication 544 Sales and Other Dispositions of Assets 1212 List of Original Issue Discount Instruments Form (and Instructions) 6251 Alternative Minimum Tax—Individuals Schedule D (Form 1040) Capital Gains and Losses See chapter 12 for information about getting these publications and forms. Amendment tax return Resident Aliens Resident aliens are generally taxed in the same way as U. Amendment tax return S. Amendment tax return citizens. Amendment tax return This means that their worldwide income is subject to U. Amendment tax return S. Amendment tax return tax and must be reported on their U. Amendment tax return S. Amendment tax return tax return. Amendment tax return Income of resident aliens is subject to the graduated tax rates that apply to U. Amendment tax return S. Amendment tax return citizens. Amendment tax return Resident aliens use the Tax Table or Tax Computation Worksheets located in the Form 1040 instructions, which apply to U. Amendment tax return S. Amendment tax return citizens. Amendment tax return Nonresident Aliens A nonresident alien's income that is subject to U. Amendment tax return S. Amendment tax return income tax must be divided into two categories: Income that is effectively connected with a trade or business in the United States, and Income that is not effectively connected with a trade or business in the United States (discussed under The 30% Tax, later). Amendment tax return The difference between these two categories is that effectively connected income, after allowable deductions, is taxed at graduated rates. Amendment tax return These are the same rates that apply to U. Amendment tax return S. Amendment tax return citizens and residents. Amendment tax return Income that is not effectively connected is taxed at a flat 30% (or lower treaty) rate. Amendment tax return If you were formerly a U. Amendment tax return S. Amendment tax return citizen or resident alien, these rules may not apply. Amendment tax return See Expatriation Tax, later, in this chapter. Amendment tax return Trade or Business in the United States Generally, you must be engaged in a trade or business during the tax year to be able to treat income received in that year as effectively connected with that trade or business. Amendment tax return Whether you are engaged in a trade or business in the United States depends on the nature of your activities. Amendment tax return The discussions that follow will help you determine whether you are engaged in a trade or business in the United States. Amendment tax return Personal Services If you perform personal services in the United States at any time during the tax year, you usually are considered engaged in a trade or business in the United States. Amendment tax return Certain compensation paid to a nonresident alien by a foreign employer is not included in gross income. Amendment tax return For more information, see Services Performed for Foreign Employer in chapter 3. Amendment tax return Other Trade or Business Activities Other examples of being engaged in a trade or business in the United States follow. Amendment tax return Students and trainees. Amendment tax return   You are considered engaged in a trade or business in the United States if you are temporarily present in the United States as a nonimmigrant under an “F,” “J,” “M,” or “Q” visa. Amendment tax return A nonresident alien temporarily present in the United States under a “J” visa includes a nonresident alien individual admitted to the United States as an exchange visitor under the Mutual Educational and Cultural Exchange Act of 1961. Amendment tax return The taxable part of any scholarship or fellowship grant that is U. Amendment tax return S. Amendment tax return source income is treated as effectively connected with a trade or business in the United States. Amendment tax return Business operations. Amendment tax return   If you own and operate a business in the United States selling services, products, or merchandise, you are, with certain exceptions, engaged in a trade or business in the United States. Amendment tax return Partnerships. Amendment tax return   If you are a member of a partnership that at any time during the tax year is engaged in a trade or business in the United States, you are considered to be engaged in a trade or business in the United States. Amendment tax return Beneficiary of an estate or trust. Amendment tax return   If you are the beneficiary of an estate or trust that is engaged in a trade or business in the United States, you are treated as being engaged in the same trade or business. Amendment tax return Trading in stocks, securities, and commodities. Amendment tax return   If your only U. Amendment tax return S. Amendment tax return business activity is trading in stocks, securities, or commodities (including hedging transactions) through a U. Amendment tax return S. Amendment tax return resident broker or other agent, you are not engaged in a trade or business in the United States. Amendment tax return   For transactions in stocks or securities, this applies to any nonresident alien, including a dealer or broker in stocks and securities. Amendment tax return   For transactions in commodities, this applies to commodities that are usually traded on an organized commodity exchange and to transactions that are usually carried out at such an exchange. Amendment tax return   This discussion does not apply if you have a U. Amendment tax return S. Amendment tax return office or other fixed place of business at any time during the tax year through which, or by the direction of which, you carry out your transactions in stocks, securities, or commodities. Amendment tax return Trading for a nonresident alien's own account. Amendment tax return   You are not engaged in a trade or business in the United States if trading for your own account in stocks, securities, or commodities is your only U. Amendment tax return S. Amendment tax return business activity. Amendment tax return This applies even if the trading takes place while you are present in the United States or is done by your employee or your broker or other agent. Amendment tax return   This does not apply to trading for your own account if you are a dealer in stocks, securities, or commodities. Amendment tax return This does not necessarily mean, however, that as a dealer you are considered to be engaged in a trade or business in the United States. Amendment tax return Determine that based on the facts and circumstances in each case or under the rules given above in Trading in stocks, securities, and commodities . Amendment tax return Effectively Connected Income If you are engaged in a U. Amendment tax return S. Amendment tax return trade or business, all income, gain, or loss for the tax year that you get from sources within the United States (other than certain investment income) is treated as effectively connected income. Amendment tax return This applies whether or not there is any connection between the income and the trade or business being carried on in the United States during the tax year. Amendment tax return Two tests, described next under Investment Income, determine whether certain items of investment income (such as interest, dividends, and royalties) are treated as effectively connected with that business. Amendment tax return In limited circumstances, some kinds of foreign source income may be treated as effectively connected with a trade or business in the United States. Amendment tax return For a discussion of these rules, see Foreign Income , later. Amendment tax return Investment Income Investment income from U. Amendment tax return S. Amendment tax return sources that may or may not be treated as effectively connected with a U. Amendment tax return S. Amendment tax return trade or business generally falls into the following three categories. Amendment tax return Fixed or determinable income (interest, dividends, rents, royalties, premiums, annuities, etc. Amendment tax return ). Amendment tax return Gains (some of which are considered capital gains) from the sale or exchange of the following types of property. Amendment tax return Timber, coal, or domestic iron ore with a retained economic interest. Amendment tax return Patents, copyrights, and similar property on which you receive contingent payments after October 4, 1966. Amendment tax return Patents transferred before October 5, 1966. Amendment tax return Original issue discount obligations. Amendment tax return Capital gains (and losses). Amendment tax return Use the two tests, described next, to determine whether an item of U. Amendment tax return S. Amendment tax return source income falling in one of the three categories above and received during the tax year is effectively connected with your U. Amendment tax return S. Amendment tax return trade or business. Amendment tax return If the tests indicate that the item of income is effectively connected, you must include it with your other effectively connected income. Amendment tax return If the item of income is not effectively connected, include it with all other income discussed under The 30% Tax later, in this chapter. Amendment tax return Asset-use test. Amendment tax return   This test usually applies to income that is not directly produced by trade or business activities. Amendment tax return Under this test, if an item of income is from assets (property) used in, or held for use in, the trade or business in the United States, it is considered effectively connected. Amendment tax return   An asset is used in, or held for use in, the trade or business in the United States if the asset is: Held for the principal purpose of promoting the conduct of a trade or business in the United States, Acquired and held in the ordinary course of the trade or business conducted in the United States (for example, an account receivable or note receivable arising from that trade or business), or Otherwise held to meet the present needs of the trade or business in the United States and not its anticipated future needs. Amendment tax return Generally, stock of a corporation is not treated as an asset used in, or held for use in, a trade or business in the United States. Amendment tax return Business-activities test. Amendment tax return   This test usually applies when income, gain, or loss comes directly from the active conduct of the trade or business. Amendment tax return The business-activities test is most important when: Dividends or interest are received by a dealer in stocks or securities, Royalties are received in the trade or business of licensing patents or similar property, or Service fees are earned by a servicing business. Amendment tax return Under this test, if the conduct of the U. Amendment tax return S. Amendment tax return trade or business was a material factor in producing the income, the income is considered effectively connected. Amendment tax return Personal Service Income You usually are engaged in a U. Amendment tax return S. Amendment tax return trade or business when you perform personal services in the United States. Amendment tax return Personal service income you receive in a tax year in which you are engaged in a U. Amendment tax return S. Amendment tax return trade or business is effectively connected with a U. Amendment tax return S. Amendment tax return trade or business. Amendment tax return Income received in a year other than the year you performed the services is also effectively connected if it would have been effectively connected if received in the year you performed the services. Amendment tax return Personal service income includes wages, salaries, commissions, fees, per diem allowances, and employee allowances and bonuses. Amendment tax return The income may be paid to you in the form of cash, services, or property. Amendment tax return If you are engaged in a U. Amendment tax return S. Amendment tax return trade or business only because you perform personal services in the United States during the tax year, income and gains from assets, and gains and losses from the sale or exchange of capital assets are generally not effectively connected with your trade or business. Amendment tax return However, if there is a direct economic relationship between your holding of the asset and your trade or business of performing personal services, the income, gain, or loss is effectively connected. Amendment tax return Pensions. Amendment tax return   If you were a nonresident alien engaged in a U. Amendment tax return S. Amendment tax return trade or business after 1986 because you performed personal services in the United States, and you later receive a pension or retirement pay attributable to these services, such payments are effectively connected income in each year you receive them. Amendment tax return This is true whether or not you are engaged in a U. Amendment tax return S. Amendment tax return trade or business in the year you receive the retirement pay. Amendment tax return Transportation Income Transportation income (defined in chapter 2) is effectively connected if you meet both of the following conditions. Amendment tax return You had a fixed place of business in the United States involved in earning the income. Amendment tax return At least 90% of your U. Amendment tax return S. Amendment tax return source transportation income is attributable to regularly scheduled transportation. Amendment tax return “Fixed place of business” generally means a place, site, structure, or other similar facility through which you engage in a trade or business. Amendment tax return “Regularly scheduled transportation” means that a ship or aircraft follows a published schedule with repeated sailings or flights at regular intervals between the same points for voyages or flights that begin or end in the United States. Amendment tax return This definition applies to both scheduled and chartered air transportation. Amendment tax return If you do not meet the two conditions above, the income is not effectively connected and is taxed at a 4% rate. Amendment tax return See Transportation Tax, later, in this chapter. Amendment tax return Business Profits and Losses and Sales Transactions All profits or losses from U. Amendment tax return S. Amendment tax return sources that are from the operation of a business in the United States are effectively connected with a trade or business in the United States. Amendment tax return For example, profit from the sale in the United States of inventory property purchased either in this country or in a foreign country is effectively connected trade or business income. Amendment tax return A share of U. Amendment tax return S. Amendment tax return source profits or losses of a partnership that is engaged in a trade or business in the United States is also effectively connected with a trade or business in the United States. Amendment tax return Real Property Gain or Loss Gains and losses from the sale or exchange of U. Amendment tax return S. Amendment tax return real property interests (whether or not they are capital assets) are taxed as if you are engaged in a trade or business in the United States. Amendment tax return You must treat the gain or loss as effectively connected with that trade or business. Amendment tax return U. Amendment tax return S. Amendment tax return real property interest. Amendment tax return   This is any interest in real property located in the United States or the U. Amendment tax return S. Amendment tax return Virgin Islands or any interest (other than as a creditor) in a domestic corporation that is a U. Amendment tax return S. Amendment tax return real property holding corporation. Amendment tax return Real property includes the following. Amendment tax return Land and unsevered natural products of the land, such as growing crops and timber, and mines, wells, and other natural deposits. Amendment tax return Improvements on land, including buildings, other permanent structures, and their structural components. Amendment tax return Personal property associated with the use of real property, such as equipment used in farming, mining, forestry, or construction or property used in lodging facilities or rented office space, unless the personal property is: Disposed of more than one year before or after the disposition of the real property, or Separately sold to persons unrelated either to the seller or to the buyer of the real property. Amendment tax return U. Amendment tax return S. Amendment tax return real property holding corporation. Amendment tax return   A corporation is a U. Amendment tax return S. Amendment tax return real property holding corporation if the fair market value of the corporation's U. Amendment tax return S. Amendment tax return real property interests are at least 50% of the total fair market value of: The corporation's U. Amendment tax return S. Amendment tax return real property interests, plus The corporation's interests in real property located outside the United States, plus The corporation's other assets that are used in, or held for use in, a trade or business. Amendment tax return   Gain or loss on the sale of the stock in any domestic corporation is taxed as if you are engaged in a U. Amendment tax return S. Amendment tax return trade or business unless you establish that the corporation is not a U. Amendment tax return S. Amendment tax return real property holding corporation. Amendment tax return   A U. Amendment tax return S. Amendment tax return real property interest does not include a class of stock of a corporation that is regularly traded on an established securities market, unless you hold more than 5% of the fair market value of that class of stock. Amendment tax return An interest in a foreign corporation owning U. Amendment tax return S. Amendment tax return real property generally is not a U. Amendment tax return S. Amendment tax return real property interest unless the corporation chooses to be treated as a domestic corporation. Amendment tax return Qualified investment entities. Amendment tax return   Special rules apply to qualified investment entities (QIEs). Amendment tax return A QIE is any real estate investment trust (REIT) or any regulated investment company (RIC) that is a U. Amendment tax return S. Amendment tax return real property holding corporation. Amendment tax return    Generally, any distribution from a QIE to a shareholder that is attributable to gain from the sale or exchange of a U. Amendment tax return S. Amendment tax return real property interest is treated as a U. Amendment tax return S. Amendment tax return real property gain by the shareholder receiving the distribution. Amendment tax return A distribution by a QIE on stock regularly traded on an established securities market in the United States is not treated as gain from the sale or exchange of a U. Amendment tax return S. Amendment tax return real property interest if you did not own more than 5% of that stock at any time during the 1-year period ending on the date of the distribution. Amendment tax return A distribution that you do not treat as gain from the sale or exchange of a U. Amendment tax return S. Amendment tax return real property interest is included in your gross income as a regular dividend. Amendment tax return Note. Amendment tax return Beginning January 1, 2014 (unless extended by legislation), a RIC that is a U. Amendment tax return S. Amendment tax return real property holding corporation will only be treated as a QIE for certain distributions from the RIC that are directly or indirectly attributable to distributions received by the RIC from a REIT. Amendment tax return Domestically controlled QIE. Amendment tax return   The sale of an interest in a domestically controlled QIE is not the sale of a U. Amendment tax return S. Amendment tax return real property interest. Amendment tax return The entity is domestically controlled if at all times during the testing period less than 50% in value of its stock was held, directly or indirectly, by foreign persons. Amendment tax return The testing period is the shorter of (a) the 5-year period ending on the date of disposition, or (b) the period during which the entity was in existence. Amendment tax return Wash sale. Amendment tax return    If you dispose of an interest in a domestically controlled QIE in an applicable wash sale transaction, special rules apply. Amendment tax return An applicable wash sale transaction is one in which you: Dispose of an interest in the domestically controlled QIE during the 30-day period before the ex-dividend date of a distribution that you would (but for the disposition) have treated as gain from the sale or exchange of a U. Amendment tax return S. Amendment tax return real property interest, and Acquire, or enter into a contract or option to acquire, a substantially identical interest in that entity during the 61-day period that began on the first day of the 30-day period. Amendment tax return If this occurs, you are treated as having gain from the sale or exchange of a U. Amendment tax return S. Amendment tax return real property interest in an amount equal to the distribution made after June 15, 2006, that would have been treated as such gain. Amendment tax return This also applies to any substitute dividend payment. Amendment tax return   A transaction is not treated as an applicable wash sale transaction if: You actually receive the distribution from the domestically controlled QIE related to the interest disposed of, or acquired, in the transaction, or You dispose of any class of stock in a QIE that is regularly traded on an established securities market in the United States but only if you did not own more than 5% of that class of stock at any time during the 1-year period ending on the date of the distribution. Amendment tax return Alternative minimum tax. Amendment tax return   There may be a minimum tax on your net gain from the disposition of U. Amendment tax return S. Amendment tax return real property interests. Amendment tax return Figure the amount of this tax, if any, on Form 6251. Amendment tax return Withholding of tax. Amendment tax return   If you dispose of a U. Amendment tax return S. Amendment tax return real property interest, the buyer may have to withhold tax. Amendment tax return See the discussion of Tax Withheld on Real Property Sales in chapter 8. Amendment tax return Foreign Income You must treat three kinds of foreign source income as effectively connected with a trade or business in the United States if: You have an office or other fixed place of business in the United States to which the income can be attributed, That office or place of business is a material factor in producing the income, and The income is produced in the ordinary course of the trade or business carried on through that office or other fixed place of business. Amendment tax return An office or other fixed place of business is a material factor if it significantly contributes to, and is an essential economic element in, the earning of the income. Amendment tax return The three kinds of foreign source income are listed below. Amendment tax return Rents and royalties for the use of, or for the privilege of using, intangible personal property located outside the United States or from any interest in such property. Amendment tax return Included are rents or royalties for the use, or for the privilege of using, outside the United States, patents, copyrights, secret processes and formulas, goodwill, trademarks, trade brands, franchises, and similar properties if the rents or royalties are from the active conduct of a trade or business in the United States. Amendment tax return Dividends, interest, or amounts received for the provision of a guarantee of indebtedness issued after September 27, 2010, from the active conduct of a banking, financing, or similar business in the United States. Amendment tax return A substitute dividend or interest payment received under a securities lending transaction or a sale-repurchase transaction is treated the same as the amounts received on the transferred security. Amendment tax return Income, gain, or loss from the sale outside the United States, through the U. Amendment tax return S. Amendment tax return office or other fixed place of business, of: Stock in trade, Property that would be included in inventory if on hand at the end of the tax year, or Property held primarily for sale to customers in the ordinary course of business. Amendment tax return Item (3) will not apply if you sold the property for use, consumption, or disposition outside the United States and an office or other fixed place of business in a foreign country was a material factor in the sale. Amendment tax return Any foreign source income that is equivalent to any item of income described above is treated as effectively connected with a U. Amendment tax return S. Amendment tax return trade or business. Amendment tax return For example, foreign source interest and dividend equivalents are treated as U. Amendment tax return S. Amendment tax return effectively connected income if the income is derived by a foreign person in the active conduct of a banking, financing, or similar business within the United States. Amendment tax return Tax on Effectively Connected Income Income you receive during the tax year that is effectively connected with your trade or business in the United States is, after allowable deductions, taxed at the rates that apply to U. Amendment tax return S. Amendment tax return citizens and residents. Amendment tax return Generally, you can receive effectively connected income only if you are a nonresident alien engaged in trade or business in the United States during the tax year. Amendment tax return However, income you receive from the sale or exchange of property, the performance of services, or any other transaction in another tax year is treated as effectively connected in that year if it would have been effectively connected in the year the transaction took place or you performed the services. Amendment tax return Example. Amendment tax return Ted Richards, a nonresident alien, entered the United States in August 2012, to perform personal services in the U. Amendment tax return S. Amendment tax return office of his overseas employer. Amendment tax return He worked in the U. Amendment tax return S. Amendment tax return office until December 25, 2012, but did not leave this country until January 11, 2013. Amendment tax return On January 8, 2013, he received his final paycheck for services performed in the United States during 2012. Amendment tax return All of Ted's income during his stay here is U. Amendment tax return S. Amendment tax return source income. Amendment tax return During 2012, Ted was engaged in the trade or business of performing personal services in the United States. Amendment tax return Therefore, all amounts paid to him in 2012 for services performed in the United States during 2012 are effectively connected with that trade or business during 2012. Amendment tax return The salary payment Ted received in January 2013 is U. Amendment tax return S. Amendment tax return source income to him in 2013. Amendment tax return It is effectively connected with a trade or business in the United States because he was engaged in a trade or business in the United States during 2012 when he performed the services that earned the income. Amendment tax return Real property income. Amendment tax return   You may be able to choose to treat all income from real property as effectively connected. Amendment tax return See Income From Real Property , later, in this chapter. Amendment tax return The 30% Tax Tax at a 30% (or lower treaty) rate applies to certain items of income or gains from U. Amendment tax return S. Amendment tax return sources but only if the items are not effectively connected with your U. Amendment tax return S. Amendment tax return trade or business. Amendment tax return Fixed or Determinable Income The 30% (or lower treaty) rate applies to the gross amount of U. Amendment tax return S. Amendment tax return source fixed or determinable annual or periodic gains, profits, or income. Amendment tax return Income is fixed when it is paid in amounts known ahead of time. Amendment tax return Income is determinable whenever there is a basis for figuring the amount to be paid. Amendment tax return Income can be periodic if it is paid from time to time. Amendment tax return It does not have to be paid annually or at regular intervals. Amendment tax return Income can be determinable or periodic even if the length of time during which the payments are made is increased or decreased. Amendment tax return Items specifically included as fixed or determinable income are interest (other than original issue discount), dividends, dividend equivalent payments (defined in chapter 2), rents, premiums, annuities, salaries, wages, and other compensation. Amendment tax return A substitute dividend or interest payment received under a securities lending transaction or a sale-repurchase transaction is treated the same as the amounts received on the transferred security. Amendment tax return Other items of income, such as royalties, also may be subject to the 30% tax. Amendment tax return Some fixed or determinable income may be exempt from U. Amendment tax return S. Amendment tax return tax. Amendment tax return See chapter 3 if you are not sure whether the income is taxable. Amendment tax return Original issue discount (OID). Amendment tax return   If you sold, exchanged, or received a payment on a bond or other debt instrument that was issued at a discount after March 31, 1972, all or part of the original issue discount (OID) (other than portfolio interest) may be subject to the 30% tax. Amendment tax return The amount of OID is the difference between the stated redemption price at maturity and the issue price of the debt instrument. Amendment tax return The 30% tax applies in the following circumstances. Amendment tax return You received a payment on a debt instrument. Amendment tax return In this case, the amount of OID subject to tax is the OID that accrued while you held the debt instrument minus the OID previously taken into account. Amendment tax return But the tax on the OID cannot be more than the payment minus the tax on the interest payment on the debt instrument. Amendment tax return You sold or exchanged the debt instrument. Amendment tax return The amount of OID subject to tax is the OID that accrued while you held the debt instrument minus the amount already taxed in (1) above. Amendment tax return   Report on your return the amount of OID shown on Form 1042-S, Foreign Person's U. Amendment tax return S. Amendment tax return Source Income Subject to Withholding, if you bought the debt instrument at original issue. Amendment tax return However, you must recompute your proper share of OID shown on Form 1042-S if any of the following apply. Amendment tax return You bought the debt instrument at a premium or paid an acquisition premium. Amendment tax return The debt instrument is a stripped bond or a stripped coupon (including zero coupon instruments backed by U. Amendment tax return S. Amendment tax return Treasury securities). Amendment tax return The debt instrument is a contingent payment or inflation-indexed debt instrument. Amendment tax return For the definition of premium and acquisition premium and instructions on how to recompute OID, get Publication 1212. Amendment tax return   If you held a bond or other debt instrument that was issued at a discount before April 1, 1972, contact the IRS for further information. Amendment tax return See chapter 12. Amendment tax return Gambling Winnings In general, nonresident aliens are subject to the 30% tax on the gross proceeds from gambling won in the United States if that income is not effectively connected with a U. Amendment tax return S. Amendment tax return trade or business and is not exempted by treaty. Amendment tax return However, no tax is imposed on nonbusiness gambling income a nonresident alien wins playing blackjack, baccarat, craps, roulette, or big-6 wheel in the United States. Amendment tax return Nonresident aliens are taxed at graduated rates on net gambling income won in the United States that is effectively connected with a U. Amendment tax return S. Amendment tax return trade or business. Amendment tax return Social Security Benefits A nonresident alien must include 85% of any U. Amendment tax return S. Amendment tax return social security benefit (and the social security equivalent part of a tier 1 railroad retirement benefit) in U. Amendment tax return S. Amendment tax return source fixed or determinable annual or periodic income. Amendment tax return Social security benefits include monthly retirement, survivor, and disability benefits. Amendment tax return This income is exempt under some tax treaties. Amendment tax return See Table 1 in Publication 901, U. Amendment tax return S. Amendment tax return Tax Treaties, for a list of tax treaties that exempt U. Amendment tax return S. Amendment tax return social security benefits from U. Amendment tax return S. Amendment tax return tax. Amendment tax return Sales or Exchanges of Capital Assets These rules apply only to those capital gains and losses from sources in the United States that are not effectively connected with a trade or business in the United States. Amendment tax return They apply even if you are engaged in a trade or business in the United States. Amendment tax return These rules do not apply to the sale or exchange of a U. Amendment tax return S. Amendment tax return real property interest or to the sale of any property that is effectively connected with a trade or business in the United States. Amendment tax return See Real Property Gain or Loss , earlier, under Effectively Connected Income. Amendment tax return A capital asset is everything you own except: Inventory. Amendment tax return Business accounts or notes receivable. Amendment tax return Depreciable property used in a trade or business. Amendment tax return Real property used in a trade or business. Amendment tax return Supplies regularly used in a trade or business. Amendment tax return Certain copyrights, literary or musical or artistic compositions, letters or memoranda, or similar property. Amendment tax return Certain U. Amendment tax return S. Amendment tax return government publications. Amendment tax return Certain commodities derivative financial instruments held by a commodities derivatives dealer. Amendment tax return Hedging transactions. Amendment tax return A capital gain is a gain on the sale or exchange of a capital asset. Amendment tax return A capital loss is a loss on the sale or exchange of a capital asset. Amendment tax return If the sale is in foreign currency, for the purpose of determining gain, the cost and selling price of the property should be expressed in U. Amendment tax return S. Amendment tax return currency at the rate of exchange prevailing as of the date of the purchase and date of the sale, respectively. Amendment tax return You may want to read Publication 544. Amendment tax return However, use Publication 544 only to determine what is a sale or exchange of a capital asset, or what is treated as such. Amendment tax return Specific tax treatment that applies to U. Amendment tax return S. Amendment tax return citizens or residents generally does not apply to you. Amendment tax return The following gains are subject to the 30% (or lower treaty) rate without regard to the 183-day rule, discussed later. Amendment tax return Gains on the disposal of timber, coal, or domestic iron ore with a retained economic interest. Amendment tax return Gains on contingent payments received from the sale or exchange of patents, copyrights, and similar property after October 4, 1966. Amendment tax return Gains on certain transfers of all substantial rights to, or an undivided interest in, patents if the transfers were made before October 5, 1966. Amendment tax return Gains on the sale or exchange of original issue discount obligations. Amendment tax return Gains in (1) are not subject to the 30% (or lower treaty) rate if you choose to treat the gains as effectively connected with a U. Amendment tax return S. Amendment tax return trade or business. Amendment tax return See Income From Real Property , later. Amendment tax return 183-day rule. Amendment tax return   If you were in the United States for 183 days or more during the tax year, your net gain from sales or exchanges of capital assets is taxed at a 30% (or lower treaty) rate. Amendment tax return For purposes of the 30% (or lower treaty) rate, net gain is the excess of your capital gains from U. Amendment tax return S. Amendment tax return sources over your capital losses from U. Amendment tax return S. Amendment tax return sources. Amendment tax return This rule applies even if any of the transactions occurred while you were not in the United States. Amendment tax return   To determine your net gain, consider the amount of your gains and losses that would be recognized and taken into account only if, and to the extent that, they would be recognized and taken into account if you were in a U. Amendment tax return S. Amendment tax return trade or business during the year and the gains and losses were effectively connected with that trade or business during the tax year. Amendment tax return   In arriving at your net gain, do not take the following into consideration. Amendment tax return The four types of gains listed earlier. Amendment tax return The deduction for a capital loss carryover. Amendment tax return Capital losses in excess of capital gains. Amendment tax return Exclusion for gain from the sale or exchange of qualified small business stock (section 1202 exclusion). Amendment tax return Losses from the sale or exchange of property held for personal use. Amendment tax return However, losses resulting from casualties or thefts may be deductible on Schedule A (Form 1040NR). Amendment tax return See Itemized Deductions in chapter 5. Amendment tax return   If you are not engaged in a trade or business in the United States and have not established a tax year for a prior period, your tax year will be the calendar year for purposes of the 183-day rule. Amendment tax return Also, you must file your tax return on a calendar-year basis. Amendment tax return   If you were in the United States for less than 183 days during the tax year, capital gains (other than gains listed earlier) are tax exempt unless they are effectively connected with a trade or business in the United States during your tax year. Amendment tax return Reporting. Amendment tax return   Report your gains and losses from the sales or exchanges of capital assets that are not effectively connected with a trade or business in the United States on page 4 of Form 1040NR. Amendment tax return Report gains and losses from sales or exchanges of capital assets (including real property) that are effectively connected with a trade or business in the United States on a separate Schedule D (Form 1040), Form 4797, or both. Amendment tax return Attach them to Form 1040NR. Amendment tax return Income From Real Property If you have income from real property located in the United States that you own or have an interest in and hold for the production of income, you can choose to treat all income from that property as income effectively connected with a trade or business in the United States. Amendment tax return The choice applies to all income from real property located in the United States and held for the production of income and to all income from any interest in such property. Amendment tax return This includes income from rents, royalties from mines, oil or gas wells, or other natural resources. Amendment tax return It also includes gains from the sale or exchange of timber, coal, or domestic iron ore with a retained economic interest. Amendment tax return You can make this choice only for real property income that is not otherwise effectively connected with your U. Amendment tax return S. Amendment tax return trade or business. Amendment tax return If you make the choice, you can claim deductions attributable to the real property income and only your net income from real property is taxed. Amendment tax return This choice does not treat a nonresident alien, who is not otherwise engaged in a U. Amendment tax return S. Amendment tax return trade or business, as being engaged in a trade or business in the United States during the year. Amendment tax return Example. Amendment tax return You are a nonresident alien and are not engaged in a U. Amendment tax return S. Amendment tax return trade or business. Amendment tax return You own a single-family house in the United States that you rent out. Amendment tax return Your rental income for the year is $10,000. Amendment tax return This is your only U. Amendment tax return S. Amendment tax return source income. Amendment tax return As discussed earlier under The 30% Tax, the rental income is subject to a tax at a 30% (or lower treaty) rate. Amendment tax return You received a Form 1042-S showing that your tenants properly withheld this tax from the rental income. Amendment tax return You do not have to file a U. Amendment tax return S. Amendment tax return tax return (Form 1040NR) because your U. Amendment tax return S. Amendment tax return tax liability is satisfied by the withholding of tax. Amendment tax return If you make the choice discussed earlier, you can offset the $10,000 income by certain rental expenses. Amendment tax return (See Publication 527, Residential Rental Property, for information on rental expenses. Amendment tax return ) Any resulting net income is taxed at graduated rates. Amendment tax return If you make this choice, report the rental income and expenses on Schedule E (Form 1040) and attach the schedule to Form 1040NR. Amendment tax return For the first year you make the choice, also attach the statement discussed next. Amendment tax return Making the choice. Amendment tax return   Make the initial choice by attaching a statement to your return, or amended return, for the year of the choice. Amendment tax return Include the following in your statement. Amendment tax return That you are making the choice. Amendment tax return Whether the choice is under Internal Revenue Code section 871(d) (explained earlier) or a tax treaty. Amendment tax return A complete list of all your real property, or any interest in real property, located in the United States. Amendment tax return Give the legal identification of U. Amendment tax return S. Amendment tax return timber, coal, or iron ore in which you have an interest. Amendment tax return The extent of your ownership in the property. Amendment tax return The location of the property. Amendment tax return A description of any major improvements to the property. Amendment tax return The dates you owned the property. Amendment tax return Your income from the property. Amendment tax return Details of any previous choices and revocations of the real property income choice. Amendment tax return   This choice stays in effect for all later tax years unless you revoke it. Amendment tax return Revoking the choice. Amendment tax return   You can revoke the choice without IRS approval by filing Form 1040X, Amended U. Amendment tax return S. Amendment tax return Individual Income Tax Return, for the year you made the choice and for later tax years. Amendment tax return You must file Form 1040X within 3 years from the date your return was filed or 2 years from the time the tax was paid, whichever is later. Amendment tax return If this time period has expired for the year of choice, you cannot revoke the choice for that year. Amendment tax return However, you may revoke the choice for later tax years only if you have IRS approval. Amendment tax return For information on how to get IRS approval, see Regulation section 1. Amendment tax return 871-10(d)(2). Amendment tax return Transportation Tax A 4% tax rate applies to transportation income that is not effectively connected because it does not meet the two conditions listed earlier under Transportation Income . Amendment tax return If you receive transportation income subject to the 4% tax, you should figure the tax and show it on line 57 of Form 1040NR. Amendment tax return Attach a statement to your return that includes the following information (if applicable). Amendment tax return Your name, taxpayer identification number, and tax year. Amendment tax return A description of the types of services performed (whether on or off board). Amendment tax return Names of vessels or registration numbers of aircraft on which you performed the services. Amendment tax return Amount of U. Amendment tax return S. Amendment tax return source transportation income derived from each type of service for each vessel or aircraft for the calendar year. Amendment tax return Total amount of U. Amendment tax return S. Amendment tax return source transportation income derived from all types of services for the calendar year. Amendment tax return This 4% tax applies to your U. Amendment tax return S. Amendment tax return source gross transportation income. Amendment tax return This only includes transportation income that is treated as derived from sources in the United States if the transportation begins or ends in the United States. Amendment tax return For transportation income from personal services, the transportation must be between the United States and a U. Amendment tax return S. Amendment tax return possession. Amendment tax return For personal services of a nonresident alien, this only applies to income derived from, or in connection with, an aircraft. Amendment tax return Interrupted Period of Residence You are subject to tax under a special rule if you interrupt your period of U. Amendment tax return S. Amendment tax return residence with a period of nonresidence. Amendment tax return The special rule applies if you meet all of the following conditions. Amendment tax return You were a U. Amendment tax return S. Amendment tax return resident for a period that includes at least 3 consecutive calendar years. Amendment tax return You were a U. Amendment tax return S. Amendment tax return resident for at least 183 days in each of those years. Amendment tax return You ceased to be treated as a U. Amendment tax return S. Amendment tax return resident. Amendment tax return You then again became a U. Amendment tax return S. Amendment tax return resident before the end of the third calendar year after the end of the period described in (1) above. Amendment tax return Under this special rule, you are subject to tax on your U. Amendment tax return S. Amendment tax return source gross income and gains on a net basis at the graduated rates applicable to individuals (with allowable deductions) for the period you were a nonresident alien, unless you would be subject to a higher tax under the 30% tax (discussed earlier) on income not connected with a U. Amendment tax return S. Amendment tax return trade or business. Amendment tax return For information on how to figure the special tax, see How To Figure the Expatriation Tax (If You Expatriated Before June 17, 2008) under Expatriation Tax , below. Amendment tax return Example. Amendment tax return John Willow, a citizen of New Zealand, entered the United States on April 1, 2008, as a lawful permanent resident. Amendment tax return On August 1, 2010, John ceased to be a lawful permanent resident and returned to New Zealand. Amendment tax return During his period of residence, he was present in the United States for at least 183 days in each of three consecutive years (2008, 2009, and 2010). Amendment tax return He returned to the United States on October 5, 2013, as a lawful permanent resident. Amendment tax return He became a resident before the close of the third calendar year (2013) beginning after the end of his first period of residence (August 1, 2010). Amendment tax return Therefore, he is subject to tax under the special rule for the period of nonresidence (August 2, 2010, through October 4, 2013) if it is more than the tax that would normally apply to him as a nonresident alien. Amendment tax return Reporting requirements. Amendment tax return   If you are subject to this tax for any year in the period you were a nonresident alien, you must file Form 1040NR for that year. Amendment tax return The return is due by the due date (including extensions) for filing your U. Amendment tax return S. Amendment tax return income tax return for the year that you again become a U. Amendment tax return S. Amendment tax return resident. Amendment tax return If you already filed returns for that period, you must file amended returns. Amendment tax return You must attach a statement to your return that identifies the source of all of your U. Amendment tax return S. Amendment tax return and foreign gross income and the items of income subject to this special rule. Amendment tax return Expatriation Tax The expatriation tax provisions apply to U. Amendment tax return S. Amendment tax return citizens who have renounced their citizenship and long-term residents who have ended their residency. Amendment tax return The rules that apply are based on the dates of expatriation, which are described in the following sections. Amendment tax return Expatriation Before June 4, 2004. Amendment tax return Expatriation After June 3, 2004, and Before June 17, 2008. Amendment tax return Expatriation After June 16, 2008. Amendment tax return Long-term resident defined. Amendment tax return   You are a long-term resident if you were a lawful permanent resident of the United States in at least 8 of the last 15 tax years ending with the year your residency ends. Amendment tax return In determining if you meet the 8-year requirement, do not count any year that you are treated as a resident of a foreign country under a tax treaty and do not waive treaty benefits. Amendment tax return Expatriation Before June 4, 2004 If you expatriated before June 4, 2004, the expatriation rules apply if one of the principal purposes of the action is the avoidance of U. Amendment tax return S. Amendment tax return taxes. Amendment tax return Unless you received a ruling from the IRS that you did not expatriate to avoid U. Amendment tax return S. Amendment tax return taxes, you are presumed to have tax avoidance as a principal purpose if: Your average annual net income tax for the last 5 tax years ending before the date of your action to relinquish your citizenship or terminate your residency was more than $100,000, or Your net worth on the date of your action was $500,000 or more. Amendment tax return The amounts above are adjusted for inflation if your expatriation action is after 1997 (see Table 4-1). Amendment tax return Table 4-1. Amendment tax return Inflation-Adjusted Amounts for Expatriation Actions Before June 4, 2004 IF you expatriated during . Amendment tax return . Amendment tax return . Amendment tax return   THEN the rules outlined on this page apply if . Amendment tax return . Amendment tax return . Amendment tax return     Your 5-year average annual net income tax was more than . Amendment tax return . Amendment tax return . Amendment tax return OR Your net worth equaled or exceeded . Amendment tax return . Amendment tax return . Amendment tax return 1999   110,000   552,000 2000   112,000   562,000 2001   116,000   580,000 2002   120,000   599,000 2003   122,000   608,000 2004 (before June 4)*   124,000   622,000 *If you expatriated after June 3, 2004, see Expatriation After June 3, 2004, and Before June 17, 2008 or Expatriation After June 16, 2008. Amendment tax return Reporting requirements. Amendment tax return   If you lost your U. Amendment tax return S. Amendment tax return citizenship, you should have filed Form 8854 with a consular office or a federal court at the time of loss of citizenship. Amendment tax return If you ended your long-term residency, you should have filed Form 8854 with the Internal Revenue Service when you filed your dual-status tax return for the year your residency ended. Amendment tax return   Your U. Amendment tax return S. Amendment tax return residency is considered to have ended when you ceased to be a lawful permanent resident or you began to be treated as a resident of another country under a tax treaty and do not waive treaty benefits. Amendment tax return Penalties. Amendment tax return   If you failed to file Form 8854, you may have to pay a penalty equal to the greater of 5% of the expatriation tax or $1,000. Amendment tax return The penalty will be assessed for each year of the 10-year period beginning on the date of expatriation during which your failure to file continues. Amendment tax return The penalty will not be imposed if you can show that the failure is due to reasonable cause and not willful neglect. Amendment tax return Expatriation tax. Amendment tax return   The expatriation tax applies to the 10-year period following the date of expatriation or termination of residency. Amendment tax return It is figured in the same way as for those expatriating after June 3, 2004, and before June 17, 2008. Amendment tax return See How To Figure the Expatriation Tax (If You Expatriated Before June 17, 2008) in the next section. Amendment tax return Expatriation After June 3, 2004, and Before June 17, 2008 If you expatriated after June 3, 2004, and before June 17, 2008, the expatriation rules apply to you if any of the following statements apply. Amendment tax return Your average annual net income tax for the 5 tax years ending before the date of expatriation or termination of residency is more than: $124,000 if you expatriated or terminated residency in 2004. Amendment tax return $127,000 if you expatriated or terminated residency in 2005. Amendment tax return $131,000 if you expatriated or terminated residency in 2006. Amendment tax return $136,000 if you expatriated or terminated residency in 2007. Amendment tax return $139,000 if you expatriated or terminated residency in 2008. Amendment tax return Your net worth is $2 million or more on the date of your expatriation or termination of residency. Amendment tax return You fail to certify on Form 8854 that you have complied with all U. Amendment tax return S. Amendment tax return federal tax obligations for the 5 tax years preceding the date of your expatriation or termination of residency. Amendment tax return Exception for dual-citizens and certain minors. Amendment tax return   Certain dual-citizens and certain minors (defined next) are not subject to the expatriation tax even if they meet (1) or (2) earlier. Amendment tax return However, they still must provide the certification required in (3). Amendment tax return Certain dual-citizens. Amendment tax return   You may qualify for the exception described above if all of the following apply. Amendment tax return You became at birth a U. Amendment tax return S. Amendment tax return citizen and a citizen of another country and you continue to be a citizen of that other country. Amendment tax return You were never a resident alien of the United States (as defined in chapter 1). Amendment tax return You never held a U. Amendment tax return S. Amendment tax return passport. Amendment tax return You were present in the United States for no more than 30 days during any calendar year that is 1 of the 10 calendar years preceding your loss of U. Amendment tax return S. Amendment tax return citizenship. Amendment tax return Certain minors. Amendment tax return   You may qualify for the exception described above if you meet all of the following requirements. Amendment tax return You became a U. Amendment tax return S. Amendment tax return citizen at birth. Amendment tax return Neither of your parents was a U. Amendment tax return S. Amendment tax return citizen at the time of your birth. Amendment tax return You expatriated before you were 18½. Amendment tax return You were present in the United States for not more than 30 days during any calendar year that is 1 of the 10 calendar years preceding your expatriation. Amendment tax return Tax consequences of presence in the United States. Amendment tax return   The following rules apply if you do not meet the exception above for dual-citizens and certain minors and the expatriation rules would otherwise apply to you. Amendment tax return   The expatriation tax does not apply to any tax year during the 10-year period if you are physically present in the United States for more than 30 days during the calendar year ending in that year. Amendment tax return Instead, you are treated as a U. Amendment tax return S. Amendment tax return citizen or resident and taxed on your worldwide income for that tax year. Amendment tax return You must file Form 1040, 1040A, or 1040EZ and figure your tax as prescribed in the instructions for those forms. Amendment tax return   When counting the number of days of presence during a calendar year, count any day you were physically present in the United States at any time during the day. Amendment tax return However, do not count any days (up to a limit of 30 days) on which you performed personal services in the United States for an employer who is not related to you if either of the following apply. Amendment tax return You have ties with other countries. Amendment tax return You have ties with other countries if: You became (within a reasonable period after your expatriation or termination of residency) a citizen or resident of the country in which you, your spouse, or either of your parents were born, and You became fully liable for income tax in that country. Amendment tax return You were physically present in the United States for 30 days or less during each year in the 10-year period ending on the date of expatriation or termination of residency. Amendment tax return Do not count any day you were an exempt individual or were unable to leave the United States because of a medical condition that arose while you were in the United States. Amendment tax return See Exempt individual and Medical condition in chapter 1 under Substantial Presence Test, but disregard the information about Form 8843. Amendment tax return Related employer. Amendment tax return   If your employer in the United States is any of the following, then your employer is related to you. Amendment tax return You must count any days you performed services in the United States for that employer as days of presence in the United States. Amendment tax return Members of your family. Amendment tax return This includes only your brothers and sisters, half-brothers and half-sisters, spouse, ancestors (parents, grandparents, etc. Amendment tax return ), and lineal descendants (children, grandchildren, etc. Amendment tax return ). Amendment tax return A partnership in which you directly or indirectly own more than 50% of the capital interest or the profits interest. Amendment tax return A corporation in which you directly or indirectly own more than 50% in value of the outstanding stock. Amendment tax return (See Publication 550, chapter 4, Constructive ownership of stock, for how to determine whether you directly or indirectly own outstanding stock. Amendment tax return ) A tax-exempt charitable or educational organization that is directly or indirectly controlled, in any manner or by any method, by you or by a member of your family, whether or not this control is legally enforceable. Amendment tax return Date of tax expatriation. Amendment tax return   For purposes of U. Amendment tax return S. Amendment tax return tax rules, the date of your expatriation or termination of residency is the later of the dates on which you perform the following actions. Amendment tax return You notify either the Department of State or the Department of Homeland Security (whichever is appropriate) of your expatriating act or termination of residency. Amendment tax return You file Form 8854 in accordance with the form instructions. Amendment tax return Annual return. Amendment tax return   If the expatriation tax applies to you, you must file Form 8854 each year during the 10-year period following the date of expatriation. Amendment tax return You must file this form even if you owe no U. Amendment tax return S. Amendment tax return tax. Amendment tax return Penalty. Amendment tax return   If you fail to file Form 8854 for any tax year, fail to include all information required to be shown on the form, or include incorrect information, you may have to pay a penalty of $10,000. Amendment tax return You will not have to pay a penalty if you show that the failure is due to reasonable cause and not to willful neglect. Amendment tax return How To Figure the Expatriation Tax (If You Expatriated Before June 17, 2008) If the expatriation tax applies to you, you are generally subject to tax on your U. Amendment tax return S. Amendment tax return source gross income and gains on a net basis at the graduated rates applicable to individuals (with allowable deductions) unless you would be subject to a higher tax under the 30% tax (discussed earlier) on income not connected with a U. Amendment tax return S. Amendment tax return trade or business. Amendment tax return For this purpose, U. Amendment tax return S. Amendment tax return source gross income (defined in chapter 2) includes gains from the sale or exchange of: Property (other than stock or debt obligations) located in the United States, Stock issued by a U. Amendment tax return S. Amendment tax return domestic corporation, and Debt obligations of U. Amendment tax return S. Amendment tax return persons or of the United States, a state or political subdivision thereof, or the District of Columbia. Amendment tax return U. Amendment tax return S. Amendment tax return source income also includes any income or gain derived from stock in certain controlled foreign corporations if you owned, or were considered to own, at any time during the 2-year period ending on the date of expatriation, more than 50% of: The total combined voting power of all classes of that corporation's stock, or The total value of the stock. Amendment tax return The income or gain is considered U. Amendment tax return S. Amendment tax return source income only to the extent of your share of earnings and profits earned or accumulated before the date of expatriation and during the periods you met the ownership requirements discussed above. Amendment tax return Any exchange of property is treated as a sale of the property at its fair market value on the date of the exchange and any gain is treated as U. Amendment tax return S. Amendment tax return source gross income in the tax year of the exchange unless you enter into a gain recognition agreement under Notice 97-19. Amendment tax return Other information. Amendment tax return   For more information on the expatriation tax provisions, including exceptions to the tax and special U. Amendment tax return S. Amendment tax return source rules, see section 877 of the Internal Revenue Code. Amendment tax return Expatriation Tax Return If you expatriated or terminated your U. Amendment tax return S. Amendment tax return residency, or you are subject to the expatriation tax, you must file Form 8854, Initial and Annual Expatriation Statement. Amendment tax return Attach it to Form 1040NR if you are required to file that form. Amendment tax return If you are present in the United States following your expatriation and are subject to tax as a U. Amendment tax return S. Amendment tax return citizen or resident, file Form 8854 with Form 1040. Amendment tax return Expatriation After June 16, 2008 If you expatriated after June 16, 2008, the expatriation rules apply to you if you meet any of the following conditions. Amendment tax return Your average annual net income tax for the 5 years ending before the date of expatriation or termination of residency is more than: $139,000 if you expatriated or terminated residency in 2008. Amendment tax return $145,000 if you expatriated or terminated residency in 2009 or 2010. Amendment tax return $147,000 if you expatriated or terminated residency in 2011. Amendment tax return $151,000 if you expatriated or terminated residency in 2012. Amendment tax return $155,000 if you expatriated or terminated residency in 2013. Amendment tax return Your net worth is $2 million or more on the date of your expatriation or termination of residency. Amendment tax return You fail to certify on Form 8854 that you have complied with all U. Amendment tax return S. Amendment tax return federal tax obligations for the 5 years preceding the date of your expatriation or termination of residency. Amendment tax return Exception for dual-citizens and certain minors. Amendment tax return   Certain dual-citizens and certain minors (defined next) are not subject to the expatriation tax even if they meet (1) or (2) above. Amendment tax return However, they still must provide the certification required in (3) above. Amendment tax return Certain dual-citizens. Amendment tax return   You may qualify for the exception described above if both of the following apply. Amendment tax return You became at birth a U. Amendment tax return S. Amendment tax return citizen and a citizen of another country and you continue to be a citizen of, and are taxed as a resident of, that other country. Amendment tax return You have been a resident of the United States for not more than 10 years during the 15-year tax period ending with the tax year during which the expatriation occurs. Amendment tax return For the purpose of determining U. Amendment tax return S. Amendment tax return residency, use the substantial presence test described in chapter 1. Amendment tax return Certain minors. Amendment tax return   You may qualify for the exception described earlier if you meet both of the following requirements. Amendment tax return You expatriated before you were 18½. Amendment tax return You have been a resident of the United States for not more than 10 tax years before the expatriation occurs. Amendment tax return For the purpose of determining U. Amendment tax return S. Amendment tax return residency, use the substantial presence test described in chapter 1. Amendment tax return Expatriation date. Amendment tax return   Your expatriation date is the date you relinquish U. Amendment tax return S. Amendment tax return citizenship (in the case of a former citizen) or terminate your long-term residency (in the case of a former U. Amendment tax return S. Amendment tax return resident). Amendment tax return Former U. Amendment tax return S. Amendment tax return citizen. Amendment tax return   You are considered to have relinquished your U. Amendment tax return S. Amendment tax return citizenship on the earliest of the following dates. Amendment tax return The date you renounced U. Amendment tax return S. Amendment tax return citizenship before a diplomatic or consular officer of the United States (provided that the voluntary renouncement was later confirmed by the issuance of a certificate of loss of nationality). Amendment tax return The date you furnished to the State Department a signed statement of voluntary relinquishment of U. Amendment tax return S. Amendment tax return nationality confirming the performance of an expatriating act (provided that the voluntary relinquishment was later confirmed by the issuance of a certificate of loss of nationality). Amendment tax return The date the State Department issued a certificate of loss of nationality. Amendment tax return The date that a U. Amendment tax return S. Amendment tax return court canceled your certificate of naturalization. Amendment tax return Former long-term resident. Amendment tax return   You are considered to have terminated your long-term residency on the earliest of the following dates. Amendment tax return The date you voluntarily relinquished your lawful permanent resident status by filing Department of Homeland Security Form I-407 with a U. Amendment tax return S. Amendment tax return consular or immigration officer, and the Department of Homeland Security determined that you have, in fact, abandoned your lawful permanent resident status. Amendment tax return The date you became subject to a final administrative order for your removal from the United States under the Immigration and Nationality Act and you actually left the United States as a result of that order. Amendment tax return If you were a dual resident of the United States and a country with which the United States has an income tax treaty, the date you began to be treated as a resident of that country and you determined that, for purposes of the treaty, you are a resident of the treaty country and notify the IRS of that treatment on Forms 8833 and 8854. Amendment tax return See Effect of Tax Treaties in chapter 1 for more information about dual residents. Amendment tax return How To Figure the Expatriation Tax (If You Expatriate After June 16, 2008) In the year you expatriate, you are subject to income tax on the net unrealized gain (or loss) in your property as if the property had been sold for its fair market value on the day before your expatriation date (“mark-to-market tax”). Amendment tax return This applies to most types of property interests you held on the date of relinquishment of citizenship or termination of residency. Amendment tax return But see Exceptions , later. Amendment tax return Gains arising from deemed sales must be taken into account for the tax year of the deemed sale without regard to other U. Amendment tax return S. Amendment tax return internal revenue laws. Amendment tax return Losses from deemed sales must be taken into account to the extent otherwise provided under U. Amendment tax return S. Amendment tax return internal revenue laws. Amendment tax return However, Internal Revenue Code section 1091 (relating to the disallowance of losses on wash sales of stock and securities) does not apply. Amendment tax return The net gain that you otherwise must include in your income is reduced (but not below zero) by: $600,000 if you expatriated or terminated residency before January 1, 2009. Amendment tax return $626,000 if you expatriated or terminated residency in 2009. Amendment tax return $627,000 if you expatriated or terminated residency in 2010. Amendment tax return $636,000 if you expatriated or terminated residency in 2011. Amendment tax return $651,000 if you expatriated or terminated residency in 2012. Amendment tax return $668,000 if you expatriated or terminated residency in 2013. Amendment tax return Exceptions. Amendment tax return   The mark-to-market tax does not apply to the following. Amendment tax return Eligible deferred compensation items. Amendment tax return Ineligible deferred compensation items. Amendment tax return Interests in nongrantor trusts. Amendment tax return Specified tax deferred accounts. Amendment tax return Instead, items (1) and (3) may be subject to withholding at source. Amendment tax return In the case of item (2), you are treated as receiving the present value of your accrued benefit as of the day before the expatriation date. Amendment tax return In the case of item (4), you are treated as receiving a distribution of your entire interest in the account on the day before your expatriation date. Amendment tax return See paragraphs (d), (e), and (f) of section 877A for more information. Amendment tax return Expatriation Tax Return If you expatriated or terminated your U. Amendment tax return S. Amendment tax return residency, or you are subject to the expatriation rules (as discussed earlier in the first paragraph under Expatriation After June 16, 2008), you must file Form 8854. Amendment tax return Attach it to Form 1040 or Form 1040NR if you are required to file either of those forms. Amendment tax return Deferral of payment of mark-to-market tax. Amendment tax return   You can make an irrevocable election to defer payment of the mark-to-market tax imposed on the deemed sale of property. Amendment tax return If you make this election, the following rules apply. Amendment tax return You can make the election on a property-by-property basis. Amendment tax return The deferred tax attributable to a particular property is due on the return for the tax year in which you dispose of the property. Amendment tax return Interest is charged for the period the tax is deferred. Amendment tax return The due date for the payment of the deferred tax cannot be extended beyond the earlier of the following dates. Amendment tax return The due date of the return required for the year of death. Amendment tax return The time that the security provided for the property fails to be adequate. Amendment tax return See item (6) below. Amendment tax return You make the election on Form 8854. Amendment tax return You must provide adequate security (such as a bond). Amendment tax return You must make an irrevocable waiver of any right under any treaty of the United States which would preclude assessment or collection of the mark-to-market tax. Amendment tax return   For more information about the deferral of payment, see the Instructions for Form 8854. Amendment tax return Prev  Up  Next   Home   More Online Publications