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Amendment To Tax Return

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Amendment To Tax Return

Amendment to tax return 3. Amendment to tax return   Filing Information for Individuals in Certain U. Amendment to tax return S. Amendment to tax return Possessions Table of Contents American SamoaWhere To Get Forms and Information Which Returns To File Special Rules for American Samoa Double Taxation The Commonwealth of Puerto RicoWhere To Get Forms and Information Which Returns To File Special Rules for Puerto Rico Double Taxation The Commonwealth of the Northern Mariana IslandsWhere To Get Forms and Information Which Return To File Special Rules for the CNMI Double Taxation GuamWhere To Get Forms and Information Which Return To File Special Rules for Guam Double Taxation The U. Amendment to tax return S. Amendment to tax return Virgin IslandsWhere To Get Forms and Information Which Return To File Special Rules for the USVI Double Taxation If you have income from American Samoa, the CNMI, Guam, Puerto Rico, or the USVI, you may have to file a tax return with the tax department of that possession. Amendment to tax return Or, you may have to file two annual tax returns, one with the possession's tax department and the other with the U. Amendment to tax return S. Amendment to tax return Internal Revenue Service. Amendment to tax return This chapter covers the general rules for filing returns in the five possessions. Amendment to tax return You must first determine if you are a bona fide resident of the relevant possession. Amendment to tax return See chapter 1 for a discussion of the requirements you must meet. Amendment to tax return You should ask for forms and advice about the filing of possession tax returns from that possession's tax department, not the Internal Revenue Service. Amendment to tax return Contact information is listed in this chapter under the heading for each possession. Amendment to tax return American Samoa American Samoa has its own separate and independent tax system. Amendment to tax return Although its tax laws are modeled on the U. Amendment to tax return S. Amendment to tax return Internal Revenue Code, there are certain differences. Amendment to tax return Where To Get Forms and Information Requests for advice about matters connected with Samoan taxation should be sent to: American Samoa Government Tax Office  Executive Office Building First Floor Pago Pago, AS 96799 The phone number is (684) 633-4181. Amendment to tax return The fax number is (684) 633-1513. Amendment to tax return You can get forms and publications at www. Amendment to tax return americansamoa. Amendment to tax return gov. Amendment to tax return The addresses and phone numbers listed above are subject to change. Amendment to tax return Which Returns To File Your residency status and your source of income with regard to American Samoa determine whether you file your return and pay your tax to American Samoa, to the United States, or to both. Amendment to tax return In addition to the information below that is categorized by residency status, the Special Rules for American Samoa section (later) contains important information for determining the correct forms to file. Amendment to tax return Bona Fide Resident of American Samoa Bona fide residents of American Samoa are generally exempt from U. Amendment to tax return S. Amendment to tax return tax on their American Samoa source income. Amendment to tax return U. Amendment to tax return S. Amendment to tax return citizen or resident alien. Amendment to tax return   If you are a U. Amendment to tax return S. Amendment to tax return citizen or resident alien and a bona fide resident of American Samoa during the entire tax year, you generally must file the following returns. Amendment to tax return An American Samoa tax return reporting your gross income from worldwide sources. Amendment to tax return If you report non-American Samoa source income on your American Samoa tax return, you can claim a credit against your American Samoa tax liability for income taxes paid on that income to the United States, a foreign country, or another possession. Amendment to tax return A U. Amendment to tax return S. Amendment to tax return tax return reporting income from worldwide sources, but excluding income from sources within American Samoa. Amendment to tax return However, amounts received for services performed as an employee of the United States or any of its agencies cannot be excluded (see U. Amendment to tax return S. Amendment to tax return Government employees under Special Rules for American Samoa, later). Amendment to tax return To exclude American Samoa source income, attach a completed Form 4563 to your U. Amendment to tax return S. Amendment to tax return tax return (see Form 4563 for more information). Amendment to tax return If you are excluding American Samoa source income on your U. Amendment to tax return S. Amendment to tax return tax return, you will not be allowed any deductions from gross income or credits against tax that are directly or indirectly allocable to the exempt income. Amendment to tax return For more information, see Special Rules for Completing Your U. Amendment to tax return S. Amendment to tax return Tax Return in chapter 4. Amendment to tax return Nonresident alien. Amendment to tax return   If you are a bona fide resident of American Samoa during the entire tax year, but a nonresident alien of the United States, you generally must file the following returns. Amendment to tax return An American Samoa tax return reporting worldwide income. Amendment to tax return A U. Amendment to tax return S. Amendment to tax return tax return (Form 1040, U. Amendment to tax return S. Amendment to tax return Individual Income Tax Return) reporting income from worldwide sources, but excluding American Samoa source income other than amounts for services performed as an employee of the United States or any of its agencies. Amendment to tax return For more information, see U. Amendment to tax return S. Amendment to tax return Government employees under Special Rules for American Samoa, later. Amendment to tax return To exclude income from sources within American Samoa, attach a completed Form 4563 to your U. Amendment to tax return S. Amendment to tax return tax return (see Form 4563 , below, for more information). Amendment to tax return For all other tax purposes, however, you will be treated as a nonresident alien individual. Amendment to tax return For example, you are not allowed the standard deduction, you cannot file a joint return, and you are not allowed a deduction for a dependent unless that person is a citizen or national of the United States. Amendment to tax return There are also limitations on what deductions and credits are allowed. Amendment to tax return See Publication 519 for more information. Amendment to tax return Form 4563. Amendment to tax return   If you must file a U. Amendment to tax return S. Amendment to tax return income tax return and you qualify to exclude any of your income from American Samoa, claim the exclusion by completing Form 4563 and attaching it to your Form 1040. Amendment to tax return Form 4563 cannot be filed by itself. Amendment to tax return There is an example of a filled-in Form 4563 in chapter 5. Amendment to tax return   If you are a bona fide resident of American Samoa during the entire tax year and you are not including a check or a money order, send your U. Amendment to tax return S. Amendment to tax return tax return and all attachments (including Form 4563) to: Department of the Treasury Internal Revenue Service Austin, TX 73301-0215 USA   If you are including a check or a money order, send your U. Amendment to tax return S. Amendment to tax return tax return and all attachments (including Form 4563) to: Internal Revenue Service P. Amendment to tax return O. Amendment to tax return Box 1303 Charlotte, NC 28201-1303 USA   Send your American Samoa tax return and all attachments to the address given under Where To Get Forms and Information , earlier. Amendment to tax return Self-employment tax. Amendment to tax return   If you are not required to file a U. Amendment to tax return S. Amendment to tax return tax return but have income that is effectively connected with a trade or business in American Samoa, you must file Form 1040-SS with the United States. Amendment to tax return On this form you will report your self-employment income to the United States and, if necessary, pay self-employment tax on that income. Amendment to tax return Additional Medicare Tax. Amendment to tax return   Beginning in 2013, you may be required to pay Additional Medicare Tax. Amendment to tax return Also, you may need to report Additional Medicare Tax withheld by your employer. Amendment to tax return For more information see Additional Medicare Tax under Special Rules for Completing Your U. Amendment to tax return S. Amendment to tax return Tax Return in chapter 4. Amendment to tax return Net Investment Income Tax. Amendment to tax return   Beginning in 2013, the Net Investment Income Tax (NIIT) is 3. Amendment to tax return 8 percent of the lesser of an individual’s net investment income or the excess of the individual’s modified adjusted gross income over a specified threshold amount. Amendment to tax return The NIIT will apply to a bona fide resident of American Samoa if a taxpayer has modified adjusted gross income from sources outside of American Samoa that exceeds a specified threshold amount, e. Amendment to tax return g. Amendment to tax return , $200,000 for single filers. Amendment to tax return The NIIT does not apply to any individual who is a nonresident alien with respect to the United States. Amendment to tax return See Form 8960, Net Investment Income Tax—Individuals, Estates, and Trusts, and its instructions for more information on the NIIT. Amendment to tax return Estimated tax payments. Amendment to tax return   To see if you are required to make payments of estimated income tax, self-employment tax, Additional Medicare Tax, and/or Net Investment Income Tax to the IRS, get Form 1040-ES, Estimated Tax for Individuals. Amendment to tax return   To pay by check or money order, send your payment with the Form 1040-ES payment voucher to: Internal Revenue Service P. Amendment to tax return O. Amendment to tax return Box 1300 Charlotte, NC 28201-1300 USA   To get information on paying electronically (by credit or debit card, or through the Electronic Federal Tax Payment System (EFTPS)), go to www. Amendment to tax return irs. Amendment to tax return gov/e-pay. Amendment to tax return   For information on making estimated income tax payments to American Samoa, see Where To Get Forms and Information , earlier. Amendment to tax return Not a Bona Fide Resident of American Samoa An individual who is not a bona fide resident of American Samoa for the tax year generally files both U. Amendment to tax return S. Amendment to tax return and American Samoa tax returns, and claims a foreign tax credit on the U. Amendment to tax return S. Amendment to tax return return for taxes paid to American Samoa. Amendment to tax return U. Amendment to tax return S. Amendment to tax return citizen or resident alien. Amendment to tax return   If you are a U. Amendment to tax return S. Amendment to tax return citizen or resident alien but not a bona fide resident of American Samoa during the entire tax year, you generally must file the following returns. Amendment to tax return An American Samoa tax return reporting only your income from sources within American Samoa. Amendment to tax return Wages for services performed in American Samoa, whether for a private employer, the U. Amendment to tax return S. Amendment to tax return Government, or otherwise, is income from sources within American Samoa. Amendment to tax return A U. Amendment to tax return S. Amendment to tax return tax return reporting your income from worldwide sources. Amendment to tax return You can take a credit against your U. Amendment to tax return S. Amendment to tax return tax liability if you paid income taxes to American Samoa (or other possession or foreign country) and reported income from those sources on your U. Amendment to tax return S. Amendment to tax return tax return. Amendment to tax return De minimis exception to determining source of income. Amendment to tax return   In certain situations you will not have income from a possession. Amendment to tax return See De minimis exception under Compensation for Labor or Personal Services in chapter 2. Amendment to tax return Nonresident alien. Amendment to tax return   If you are a nonresident alien of the United States who does not qualify as a bona fide resident of American Samoa for the entire tax year, you generally must file the following returns. Amendment to tax return An American Samoa tax return reporting only your income from sources within American Samoa. Amendment to tax return In this situation, wages for services performed in American Samoa, whether for a private employer, the U. Amendment to tax return S. Amendment to tax return Government, or otherwise, is income from sources within American Samoa. Amendment to tax return A U. Amendment to tax return S. Amendment to tax return tax return (Form 1040NR, U. Amendment to tax return S. Amendment to tax return Nonresident Alien Income Tax Return) reporting U. Amendment to tax return S. Amendment to tax return source income according to the rules for a nonresident alien. Amendment to tax return See the Instructions for Form 1040NR. Amendment to tax return   If you are not a bona fide resident of American Samoa during the entire tax year, and you are not including a check or a money order, send your U. Amendment to tax return S. Amendment to tax return tax return and all attachments to: Department of the Treasury Internal Revenue Service Austin, TX 73301-0215 USA   If you are including a check or a money order, send your U. Amendment to tax return S. Amendment to tax return tax return and all attachments to: Internal Revenue Service P. Amendment to tax return O. Amendment to tax return Box 1303 Charlotte, NC 28201-1303 USA   Send your American Samoa tax return and all attachments to the address given under Where To Get Forms and Information , earlier. Amendment to tax return Special Rules for American Samoa Some special rules apply to certain types of income and employment connected with American Samoa. Amendment to tax return U. Amendment to tax return S. Amendment to tax return Armed Forces. Amendment to tax return   Bona fide residents of American Samoa include military personnel whose official home of record is American Samoa. Amendment to tax return Civilian spouse of active duty member of the U. Amendment to tax return S. Amendment to tax return Armed Forces. Amendment to tax return   If, under the rule discussed at the beginning of chapter 1 (see Special rule for civilian spouse of active duty member of the U. Amendment to tax return S. Amendment to tax return Armed Forces ), your tax residence is American Samoa, follow the guidance in the section for bona fide residents under Which Returns To File, earlier. Amendment to tax return However, if your tax residence is one of the 50 states or the District of Columbia and your only income from American Samoa is from wages, salaries, tips, or self-employment, you will be taxed on your worldwide income and file only a U. Amendment to tax return S. Amendment to tax return tax return (Form 1040) and a state and/or local tax return, if required. Amendment to tax return If you have income from American Samoa other than wages, salaries, tips, or self-employment that is considered to be sourced in that possession (see Table 2-1), contact the local tax administration for guidance. Amendment to tax return U. Amendment to tax return S. Amendment to tax return Government employees. Amendment to tax return   If you are employed in American Samoa by the U. Amendment to tax return S. Amendment to tax return Government or any of its agencies, you are subject to tax by American Samoa on your pay from the government. Amendment to tax return Whether you are subject to tax by American Samoa on your non-American Samoa source income depends on your status in American Samoa as a bona fide resident. Amendment to tax return   Wages and salaries paid to employees of the U. Amendment to tax return S. Amendment to tax return Government and its agencies are also subject to U. Amendment to tax return S. Amendment to tax return federal income tax. Amendment to tax return These payments do not qualify for the exclusion of income from sources within American Samoa, discussed earlier. Amendment to tax return   For tax years ending after April 9, 2008, wages and salaries paid to bona fide residents by the Government of American Samoa can be excluded on the U. Amendment to tax return S. Amendment to tax return tax return. Amendment to tax return   If you report government wages on both your U. Amendment to tax return S. Amendment to tax return and American Samoa tax returns, you can take a credit on your U. Amendment to tax return S. Amendment to tax return tax return for income taxes paid or accrued to American Samoa. Amendment to tax return Figure the credit on Form 1116, and attach that form to your U. Amendment to tax return S. Amendment to tax return tax return, Form 1040. Amendment to tax return Show your wages paid for services performed in American Samoa on Form 1116, line 1a, enter “American Samoa” on line g, and check box b above Part I. Amendment to tax return Moving expense deduction. Amendment to tax return   Generally, expenses of a move to American Samoa are directly attributable to American Samoa wages, salaries, and other earned income. Amendment to tax return Likewise, the expenses of a move back to the United States are generally attributable to U. Amendment to tax return S. Amendment to tax return earned income. Amendment to tax return   If your move was to American Samoa, report your deduction for moving expenses as follows. Amendment to tax return If you are a bona fide resident in the tax year of your move, enter your deductible expenses on your American Samoa tax return. Amendment to tax return If you are not a bona fide resident, enter your deductible expenses on both your American Samoa and U. Amendment to tax return S. Amendment to tax return tax returns. Amendment to tax return Also, for purposes of a tax credit against your U. Amendment to tax return S. Amendment to tax return tax liability, reduce your American Samoa “general category income” on Form 1116, line 1a, by entering the deductible moving expenses on line 2. Amendment to tax return   If your move was to the United States, complete Form 3903, Moving Expenses, and enter the deductible amount on Form 1040, line 26. Amendment to tax return Double Taxation A mutual agreement procedure exists to settle cases of double taxation between the United States and American Samoa. Amendment to tax return See Double Taxation in chapter 4. Amendment to tax return The Commonwealth of Puerto Rico The Commonwealth of Puerto Rico has its own separate and independent tax system. Amendment to tax return Although it is modeled after the U. Amendment to tax return S. Amendment to tax return system, there are differences in law and tax rates. Amendment to tax return Where To Get Forms and Information Requests for information about the filing of Puerto Rico tax returns should be addressed to: Departamento de Hacienda Negociado de Asistencia Contributiva  P. Amendment to tax return O. Amendment to tax return Box 9024140 San Juan, Puerto Rico 00902-4140 The phone numbers are (787) 721-8051 and (787) 721-7198. Amendment to tax return    To obtain Puerto Rico tax forms, contact the Forms and Publications Division Office at the above address or call (787) 722-0216, option #7. Amendment to tax return You can access the Hacienda website at www. Amendment to tax return hacienda. Amendment to tax return gobierno. Amendment to tax return pr or email your questions about Puerto Rico taxes to InfoServ@hacienda. Amendment to tax return gobierno. Amendment to tax return pr. Amendment to tax return The addresses and phone numbers listed above are subject to change. Amendment to tax return Which Returns To File Generally, you will file returns with both Puerto Rico and the United States. Amendment to tax return The income reported on each return depends on your residency status in Puerto Rico. Amendment to tax return To determine if you are a bona fide resident of Puerto Rico, see the information in chapter 1. Amendment to tax return Bona Fide Resident of Puerto Rico Bona fide residents of Puerto Rico will generally pay tax to Puerto Rico on their worldwide income. Amendment to tax return U. Amendment to tax return S. Amendment to tax return citizen or resident alien. Amendment to tax return   If you are a U. Amendment to tax return S. Amendment to tax return citizen or resident alien and also a bona fide resident of Puerto Rico during the entire tax year, you generally must file the following returns. Amendment to tax return A Puerto Rico tax return reporting income from worldwide sources. Amendment to tax return If you report U. Amendment to tax return S. Amendment to tax return source income on your Puerto Rico tax return, you can claim a credit against your Puerto Rico tax, up to the amount allowable, for income taxes paid to the United States. Amendment to tax return A U. Amendment to tax return S. Amendment to tax return tax return reporting income from worldwide sources, but excluding Puerto Rico source income. Amendment to tax return However, see U. Amendment to tax return S. Amendment to tax return Government employees under Special Rules for Puerto Rico, later, for an exception. Amendment to tax return If you are excluding Puerto Rico income on your U. Amendment to tax return S. Amendment to tax return tax return, you will not be allowed any deductions or credits that are directly or indirectly allocable to exempt income. Amendment to tax return For more information, see Special Rules for Completing Your U. Amendment to tax return S. Amendment to tax return Tax Return in chapter 4. Amendment to tax return If all of your income is from Puerto Rico sources, you are not required to file a U. Amendment to tax return S. Amendment to tax return tax return. Amendment to tax return However, if you have self-employment income, see Self-employment tax , later. Amendment to tax return U. Amendment to tax return S. Amendment to tax return citizen only. Amendment to tax return   If you are a U. Amendment to tax return S. Amendment to tax return citizen, you may also qualify under these rules if you have been a bona fide resident of Puerto Rico for at least 2 years before moving from Puerto Rico. Amendment to tax return In this case, you can exclude your income derived from sources within Puerto Rico (but not wages and salaries received as an employee of the U. Amendment to tax return S. Amendment to tax return Government or its agencies) that you earned before the date you changed your residence. Amendment to tax return For more information, see Puerto Rico under Year of Moving From a Possession in chapter 1. Amendment to tax return Nonresident alien. Amendment to tax return   If you are a bona fide resident of Puerto Rico during the entire tax year, but a nonresident alien of the United States, you generally must file the following returns. Amendment to tax return A Puerto Rico tax return reporting income from worldwide sources. Amendment to tax return If you report U. Amendment to tax return S. Amendment to tax return source income on your Puerto Rico tax return, you can claim a credit against your Puerto Rico tax, up to the amount allowable, for income taxes paid to the United States. Amendment to tax return A U. Amendment to tax return S. Amendment to tax return tax return (Form 1040) reporting income from worldwide sources, but excluding Puerto Rico source income (other than amounts for services performed as an employee of the United States or any of its agencies). Amendment to tax return For tax purposes other than reporting income, however, you will be treated as a nonresident alien individual. Amendment to tax return For example, you are not allowed the standard deduction, you cannot file a joint return, and you are not allowed a deduction for a dependent unless that person is a citizen or national of the United States. Amendment to tax return There are also limitations on what deductions and credits are allowed. Amendment to tax return See Publication 519 for more information. Amendment to tax return Self-employment tax. Amendment to tax return   If you have no U. Amendment to tax return S. Amendment to tax return filing requirement but have income that is effectively connected with a trade or business in Puerto Rico, you must file Form 1040-SS or Form 1040-PR with the United States to report your self-employment income and, if necessary, pay self-employment tax. Amendment to tax return Additional Medicare Tax. Amendment to tax return   Beginning in 2013, you may be required to pay Additional Medicare Tax. Amendment to tax return Also, you may need to report Additional Medicare Tax withheld by your employer. Amendment to tax return For more information see Additional Medicare Tax under Special Rules for Completing Your U. Amendment to tax return S. Amendment to tax return Tax Return in chapter 4. Amendment to tax return Net Investment Income Tax. Amendment to tax return   Beginning in 2013, the Net Investment Income Tax (NIIT) is 3. Amendment to tax return 8 percent of the lesser of an individual’s net investment income or the excess of the individual’s modified adjusted gross income over a specified threshold amount. Amendment to tax return The NIIT will apply to a bona fide resident of Puerto Rico if a taxpayer has modified adjusted gross income from sources outside of Puerto Rico that exceeds a specified threshold amount, e. Amendment to tax return g. Amendment to tax return , $200,000 for single filers. Amendment to tax return The NIIT does not apply to any individual who is a nonresident alien with respect to the United States. Amendment to tax return See Form 8960, Net Investment Income Tax—Individuals, Estates, and Trusts, and its instructions for more information on the NIIT. Amendment to tax return Estimated tax payments. Amendment to tax return   To see if you are required to make payments of estimated income tax, self-employment tax, Additional Medicare Tax, and/or Net Investment Income Tax to the IRS, get Form 1040-ES (or Form 1040-ES(PR)). Amendment to tax return   To pay by check or money order, send your payment with the Form 1040-ES (or Form 1040-ES(PR)) payment voucher to: Internal Revenue Service P. Amendment to tax return O. Amendment to tax return Box 1300 Charlotte, NC 28201-1300 USA   To get information on paying electronically (by credit or debit card, or through the Electronic Federal Tax Payment System (EFTPS)), go to www. Amendment to tax return irs. Amendment to tax return gov/e-pay. Amendment to tax return   For information on making estimated income tax payments to Hacienda, see Where To Get Forms and Information , earlier. Amendment to tax return Not a Bona Fide Resident of Puerto Rico An individual who is not a bona fide resident of Puerto Rico for the tax year generally files tax returns with both Puerto Rico and the United States. Amendment to tax return U. Amendment to tax return S. Amendment to tax return citizen or resident alien. Amendment to tax return   If you are a U. Amendment to tax return S. Amendment to tax return citizen or resident alien but not a bona fide resident of Puerto Rico during the entire tax year, you generally must file the following returns. Amendment to tax return A Puerto Rico tax return reporting only your income from Puerto Rico sources. Amendment to tax return Wages for services performed in Puerto Rico, whether for a private employer, the U. Amendment to tax return S. Amendment to tax return Government, or otherwise, is income from Puerto Rico sources. Amendment to tax return A U. Amendment to tax return S. Amendment to tax return tax return reporting income from worldwide sources. Amendment to tax return Generally, you can claim a foreign tax credit for income taxes paid to Puerto Rico on the Puerto Rico income that is not exempt from U. Amendment to tax return S. Amendment to tax return taxes (see chapter 4 for more information). Amendment to tax return Nonresident alien. Amendment to tax return   If you are a nonresident alien of the United States who does not qualify as a bona fide resident of Puerto Rico for the entire tax year, you generally must file the following returns. Amendment to tax return A Puerto Rico tax return reporting only your income from Puerto Rico sources. Amendment to tax return Wages for services performed in Puerto Rico, whether for a private employer, the U. Amendment to tax return S. Amendment to tax return Government, or otherwise, is income from Puerto Rico sources. Amendment to tax return A U. Amendment to tax return S. Amendment to tax return tax return (Form 1040NR) according to the rules for a nonresident alien. Amendment to tax return See the Instructions for Form 1040NR. Amendment to tax return De minimis exception to determining source of income. Amendment to tax return   In certain situations you will not have income from a possession. Amendment to tax return See De minimis exception under Compensation for Labor or Personal Services in chapter 2. Amendment to tax return Use the addresses listed below to file your U. Amendment to tax return S. Amendment to tax return and Puerto Rico income tax returns. Amendment to tax return If you are not including a check or a money order, send your U. Amendment to tax return S. Amendment to tax return tax return and all attachments to: Department of the Treasury Internal Revenue Service Austin, TX 73301-0215 USA If you are including a check or a money order, send your U. Amendment to tax return S. Amendment to tax return tax return and all attachments to: Internal Revenue Service P. Amendment to tax return O. Amendment to tax return Box 1303 Charlotte, NC 28201-1303 USA If you request a refund on your Puerto Rico return, send your Puerto Rico tax return and all attachments to: Departamento de Hacienda P. Amendment to tax return O. Amendment to tax return Box 50072 San Juan, PR 00902-6272 Send all other Puerto Rico tax returns, with all attachments, to: Departamento de Hacienda P. Amendment to tax return O. Amendment to tax return Box 9022501 San Juan, PR 00902-2501 Special Rules for Puerto Rico In addition to the general rules given earlier for filing U. Amendment to tax return S. Amendment to tax return and Puerto Rico tax returns, there are some special rules that apply to certain individuals and types of income. Amendment to tax return U. Amendment to tax return S. Amendment to tax return Government employees. Amendment to tax return   Wages and cost-of-living allowances paid by the U. Amendment to tax return S. Amendment to tax return Government (or one of its agencies) for working in Puerto Rico are subject to Puerto Rico tax. Amendment to tax return However, the cost-of-living allowances are excluded from Puerto Rico gross income up to the amount exempt from U. Amendment to tax return S. Amendment to tax return tax. Amendment to tax return In order to claim this exclusion, you must: Include with your Puerto Rico tax return evidence to show the amount received during the year, and Be in full compliance with your Puerto Rico tax responsibilities. Amendment to tax return   These wages are also subject to U. Amendment to tax return S. Amendment to tax return tax, but the cost-of-living allowances are excludable. Amendment to tax return A foreign tax credit is available in order to avoid double taxation. Amendment to tax return U. Amendment to tax return S. Amendment to tax return Armed Forces. Amendment to tax return   Bona fide residents of Puerto Rico include military personnel whose official home of record is Puerto Rico. Amendment to tax return Civilian spouse of active duty member of the U. Amendment to tax return S. Amendment to tax return Armed Forces. Amendment to tax return   If, under the rule discussed at the beginning of chapter 1 (see Special rule for civilian spouse of active duty member of the U. Amendment to tax return S. Amendment to tax return Armed Forces ), your tax residence is Puerto Rico, follow the guidance in the section for bona fide residents under Which Returns To File, earlier. Amendment to tax return However, if your tax residence is one of the 50 states or the District of Columbia and your only income from Puerto Rico is from wages, salaries, tips, or self-employment, you will be taxed on your worldwide income and file only a U. Amendment to tax return S. Amendment to tax return tax return (Form 1040) and a state and/or local tax return, if required. Amendment to tax return If you have income from Puerto Rico other than wages, salaries, tips, or self-employment that is considered to be sourced in that possession (see Table 2-1 ), contact the Hacienda for guidance. Amendment to tax return Income from sources outside Puerto Rico and the United States. Amendment to tax return   If you are a U. Amendment to tax return S. Amendment to tax return citizen and bona fide resident of Puerto Rico and you have income from sources outside both Puerto Rico and the United States, that income is treated as foreign source income under both tax systems. Amendment to tax return In addition to your Puerto Rico and U. Amendment to tax return S. Amendment to tax return tax returns, you may also have to file a return with the country or possession from which your outside income was derived. Amendment to tax return To avoid double taxation, a foreign tax credit is generally available for either the U. Amendment to tax return S. Amendment to tax return or Puerto Rico return. Amendment to tax return Example. Amendment to tax return Thomas Red is a bona fide resident of Puerto Rico and a U. Amendment to tax return S. Amendment to tax return citizen. Amendment to tax return He traveled to the Dominican Republic and worked in the construction industry for 1 month. Amendment to tax return His wages were $20,000. Amendment to tax return Because the wages were earned outside Puerto Rico and outside the United States, Thomas must file a tax return with Puerto Rico and the United States. Amendment to tax return He may also have to file a tax return with the Dominican Republic. Amendment to tax return Moving expense deduction. Amendment to tax return   Generally, expenses of a move to Puerto Rico are directly attributable to wages, salaries, and other earned income from Puerto Rico. Amendment to tax return Likewise, the expenses of a move back to the United States are generally attributable to U. Amendment to tax return S. Amendment to tax return earned income. Amendment to tax return   If your move was to Puerto Rico, report your deduction for moving expenses as follows. Amendment to tax return If you are a bona fide resident in the tax year of your move, enter your deductible expenses on your Puerto Rico tax return. Amendment to tax return If you are not a bona fide resident, enter your deductible expenses on both your Puerto Rico and U. Amendment to tax return S. Amendment to tax return tax returns. Amendment to tax return Also, for purposes of a tax credit against your U. Amendment to tax return S. Amendment to tax return tax liability, reduce your Puerto Rico “general category income” on Form 1116, line 1a, by entering the deductible moving expenses on line 2. Amendment to tax return   If your move was to the United States, complete Form 3903 and enter the deductible amount on Form 1040, line 26. Amendment to tax return Additional child tax credit. Amendment to tax return   If you are not required to file a U. Amendment to tax return S. Amendment to tax return income tax return, this credit is available only if you meet all three of the following conditions. Amendment to tax return You were a bona fide resident of Puerto Rico during the entire tax year. Amendment to tax return Social security and Medicare taxes were withheld from your wages or you paid self-employment tax. Amendment to tax return You had three or more qualifying children. Amendment to tax return (For the definition of a qualifying child, see the instructions for Form 1040-PR or Form 1040-SS. Amendment to tax return ) If your income exceeds certain levels, you may be disqualified from receiving this credit. Amendment to tax return Use Form 1040-PR or Form 1040-SS to claim the additional child tax credit. Amendment to tax return Advice about possible tax benefits under the Puerto Rico investment incentive programs is available from the Puerto Rico tax authorities. Amendment to tax return Double Taxation A mutual agreement procedure exists to settle cases of double taxation between the United States and the Commonwealth of Puerto Rico. Amendment to tax return See Double Taxation in chapter 4. Amendment to tax return The Commonwealth of the Northern Mariana Islands The Commonwealth of the Northern Mariana Islands (CNMI) has its own tax system based partly on the same tax laws and tax rates that apply to the United States and partly on local taxes imposed by the CNMI government. Amendment to tax return Where To Get Forms and Information Requests for advice about CNMI residency and tax matters should be addressed to: Commonwealth of the Northern Mariana Islands  Division of Revenue and Taxation P. Amendment to tax return O. Amendment to tax return Box 5234 CHRB Dandan Commercial Center First Floor Rm #8  Saipan, MP 96950 You can order forms and publications by calling (670) 664-1000. Amendment to tax return You can order forms and publications through the fax at (670) 664-1015. Amendment to tax return You can get forms and publications at www. Amendment to tax return cnmidof. Amendment to tax return net. Amendment to tax return The addresses and phone numbers listed above are subject to change. Amendment to tax return Which Return To File In general, all individuals with income from the CNMI will file only one return, either to the CNMI or to the United States. Amendment to tax return Your residency status with regard to the CNMI determines which return you will file. Amendment to tax return Be sure to check the Special Rules for the CNMI , later, for additional information about filing your tax return. Amendment to tax return Bona Fide Resident of the CNMI If you are a U. Amendment to tax return S. Amendment to tax return citizen, resident alien, or nonresident alien and a bona fide resident of the CNMI during the entire tax year, file your income tax return with the CNMI. Amendment to tax return Include income from worldwide sources on your CNMI return. Amendment to tax return In determining your total tax payments, include all income tax withheld by either the CNMI or the United States, any credit for an overpayment of income tax to either the CNMI or the United States, and any payments of estimated tax to either the CNMI or the United States. Amendment to tax return Pay any balance of tax due with your tax return. Amendment to tax return Generally, if you properly file your return with, and fully pay your income tax to, the CNMI, then you are not liable for filing an income tax return with, or for paying tax to, the United States for the tax year. Amendment to tax return However, if you were self-employed in 2013, see Self-employment tax , later. Amendment to tax return Example. Amendment to tax return David Gold was a bona fide resident of the CNMI for 2013. Amendment to tax return He received wages of $30,000 paid by a private employer in the CNMI and dividends of $4,000 from U. Amendment to tax return S. Amendment to tax return corporations that carry on business mainly in the United States. Amendment to tax return He must file a 2013 income tax return with the CNMI Division of Revenue and Taxation. Amendment to tax return He reports his total income of $34,000 on the CNMI return. Amendment to tax return   If you are a bona fide resident of the CNMI for the entire tax year, send your return and all attachments to the Division of Revenue and Taxation at the address given earlier. Amendment to tax return U. Amendment to tax return S. Amendment to tax return Citizen or Resident Alien (Other Than a Bona Fide Resident of the CNMI) If you have income from sources within the CNMI and are a U. Amendment to tax return S. Amendment to tax return citizen or resident alien, but you are not a bona fide resident of the CNMI during the entire tax year, file your income tax return with the United States. Amendment to tax return Include income from worldwide sources on your U. Amendment to tax return S. Amendment to tax return return. Amendment to tax return In determining your total tax payments, include all income tax withheld by either the United States or the CNMI, any credit for an overpayment of income tax to either the United States or the CNMI, and any payments of estimated tax to either the United States or the CNMI. Amendment to tax return Pay any balance of tax due with your tax return. Amendment to tax return Note. Amendment to tax return You may also need to complete Form 5074. Amendment to tax return You are not liable for filing an income tax return with, or for paying tax to, the CNMI for the tax year. Amendment to tax return Form 5074. Amendment to tax return   If you file a U. Amendment to tax return S. Amendment to tax return income tax return, attach a completed Form 5074 if you (and your spouse if filing a joint return) have: Adjusted gross income of $50,000 or more for the tax year, and Gross income of $5,000 or more from sources within the CNMI. Amendment to tax return   The United States and the CNMI use this form to divide your income taxes. Amendment to tax return   There is an example of a filled-in Form 5074 in chapter 5. Amendment to tax return De minimis exception to determining source of income. Amendment to tax return   In certain situations you will not have income from a possession. Amendment to tax return See De minimis exception under Compensation for Labor or Personal Services in chapter 2. Amendment to tax return Citizen or resident alien of the United States but not a bona fide resident of the CNMI. Amendment to tax return   If you are a citizen or resident alien of the United States but not a bona fide resident of the CNMI during the entire tax year and you are not including a check or a money order, send your return and all attachments to: Department of the Treasury Internal Revenue Service Austin, TX 73301-0215 USA   If you are including a check or a money order, send your U. Amendment to tax return S. Amendment to tax return tax return and all attachments to: Internal Revenue Service P. Amendment to tax return O. Amendment to tax return Box 1303 Charlotte, NC 28201-1303 USA Nonresident Alien (Other Than a Bona Fide Resident of the CNMI) If you are a nonresident alien of the United States who does not qualify as a bona fide resident of the CNMI for the entire tax year, you generally must file the following returns. Amendment to tax return A CNMI tax return reporting only your income from sources within the CNMI. Amendment to tax return In this situation, wages for services performed in the CNMI, whether for a private employer, the U. Amendment to tax return S. Amendment to tax return Government, or otherwise, is income from sources within the CNMI. Amendment to tax return A U. Amendment to tax return S. Amendment to tax return tax return (Form 1040NR) reporting U. Amendment to tax return S. Amendment to tax return source income according to the rules for a nonresident alien. Amendment to tax return See the instructions for Form 1040NR. Amendment to tax return If you are not a bona fide resident of the CNMI during the entire tax year and you are not including a check or a money order, send your U. Amendment to tax return S. Amendment to tax return tax return and all attachments to: Department of the Treasury Internal Revenue Service Austin, TX 73301-0215 USA If you are including a check or a money order, send your U. Amendment to tax return S. Amendment to tax return tax return and all attachments to:  Internal Revenue Service P. Amendment to tax return O. Amendment to tax return Box 1303 Charlotte, NC 28201-1303 USA Send your CNMI tax return and all attachments to:  Department of Finance Division of Revenue and Taxation Commonwealth of the Northern Mariana Islands P. Amendment to tax return O. Amendment to tax return Box 5234 CHRB Saipan, MP 96950 Citizen of the CNMI If you are a citizen of the CNMI (meaning that you were born or naturalized in the CNMI) but not otherwise a U. Amendment to tax return S. Amendment to tax return citizen or a U. Amendment to tax return S. Amendment to tax return resident alien during the tax year, file your income tax return with the CNMI. Amendment to tax return Include income from worldwide sources on your CNMI return. Amendment to tax return Take into account tax withheld by both jurisdictions in determining if there is tax overdue or an overpayment. Amendment to tax return Pay any balance of tax due with your tax return. Amendment to tax return Send your return and all attachments to:   Department of Finance Division of Revenue and Taxation Commonwealth of the Northern Mariana Islands P. Amendment to tax return O. Amendment to tax return Box 5234 CHRB Saipan, MP 96950 Special Rules for the CNMI Special rules apply to certain types of income, employment, and filing status. Amendment to tax return Joint return. Amendment to tax return   If you file a joint return, file your return (and pay the tax) with the jurisdiction where the spouse who has the greater adjusted gross income (AGI) would have to file if you were filing separately. Amendment to tax return If the spouse with the greater AGI is a bona fide resident of the CNMI during the entire tax year, file the joint return with the CNMI. Amendment to tax return If the spouse with the greater AGI is a U. Amendment to tax return S. Amendment to tax return citizen or resident alien but not a bona fide resident of the CNMI during the entire tax year, file your joint return with the United States. Amendment to tax return For this purpose, income is determined without regard to community property laws. Amendment to tax return Example. Amendment to tax return Marsha Blue, a U. Amendment to tax return S. Amendment to tax return citizen, was a resident of the United States, and her spouse, a citizen of the CNMI, was a bona fide resident of the CNMI during the entire tax year. Amendment to tax return Marsha earned $65,000 as a computer programmer in the United States. Amendment to tax return Her spouse earned $20,000 as an artist in the CNMI. Amendment to tax return Marsha and her spouse will file a joint return. Amendment to tax return Because Marsha has the greater AGI, she and her spouse must file their return with the United States and report the entire $85,000 on that return. Amendment to tax return U. Amendment to tax return S. Amendment to tax return Armed Forces. Amendment to tax return   If you are a member of the U. Amendment to tax return S. Amendment to tax return Armed Forces who qualified as a bona fide resident of the CNMI in a prior tax year, your absence from the CNMI solely in compliance with military orders will not change your bona fide residency. Amendment to tax return If you did not qualify as a bona fide resident of the CNMI in a prior tax year, your presence in the CNMI solely in compliance with military orders will not qualify you as a bona fide resident of the CNMI. Amendment to tax return Civilian spouse of active duty member of the U. Amendment to tax return S. Amendment to tax return Armed Forces. Amendment to tax return   If, under the rule discussed at the beginning of chapter 1 (see Special rule for civilian spouse of active duty member of the U. Amendment to tax return S. Amendment to tax return Armed Forces ), your tax residence is the CNMI, follow the guidance in the section for bona fide residents under Which Return To File, earlier. Amendment to tax return However, if your tax residence is one of the 50 states or the District of Columbia and your only income from the CNMI is from wages, salaries, tips, or self-employment, you will be taxed on your worldwide income and file only a U. Amendment to tax return S. Amendment to tax return tax return (Form 1040) and a state and/or local tax return, if required. Amendment to tax return If you have income from the CNMI other than wages, salaries, tips, or self-employment that is considered to be sourced in that possession (see Table 2-1), you may need to file Form 5074 with your U. Amendment to tax return S. Amendment to tax return tax return. Amendment to tax return Moving expense deduction. Amendment to tax return   Generally, expenses of a move to the CNMI are directly attributable to wages, salaries, and other earned income from the CNMI. Amendment to tax return Likewise, the expenses of a move back to the United States are generally attributable to U. Amendment to tax return S. Amendment to tax return earned income. Amendment to tax return   If your move was to the CNMI, report your deduction for moving expenses as follows. Amendment to tax return If you are a bona fide resident in the tax year of your move, enter your deductible expenses on your CNMI tax return. Amendment to tax return If you are not a bona fide resident, enter your deductible expenses on Form 3903 and enter the deductible amount on Form 1040, line 26, and on Form 5074, line 20. Amendment to tax return   If your move was to the United States, complete Form 3903 and enter the deductible amount on Form 1040, line 26. Amendment to tax return Foreign tax credit. Amendment to tax return   Under the filing rules explained earlier, individuals with CNMI source income normally will not claim a foreign tax credit on a U. Amendment to tax return S. Amendment to tax return income tax return for tax paid to the CNMI. Amendment to tax return Self-employment tax. Amendment to tax return   If you have no U. Amendment to tax return S. Amendment to tax return filing requirement, but have income that is effectively connected with a trade or business in the CNMI, you must file Form 1040-SS with the United States to report your self-employment income and, if necessary, pay self-employment tax. Amendment to tax return Additional Medicare Tax. Amendment to tax return   Beginning in 2013, you may be required to pay Additional Medicare Tax. Amendment to tax return Also, you may need to report Additional Medicare Tax withheld by your employer. Amendment to tax return For more information see Additional Medicare Tax under Special Rules for Completing Your U. Amendment to tax return S. Amendment to tax return Tax Return in chapter 4. Amendment to tax return Estimated tax payments. Amendment to tax return   To see if you are required to make payments of estimated income tax, self-employment tax, and/or Additional Medicare Tax to the IRS, get Form 1040-ES. Amendment to tax return Payment of estimated tax. Amendment to tax return   If you must pay estimated tax, make your payment to the jurisdiction where you would file your income tax return if your tax year were to end on the date your first estimated tax payment is due. Amendment to tax return Generally, you should make the rest of your quarterly payments of estimated tax to the jurisdiction where you made your first payment of estimated tax. Amendment to tax return However, estimated tax payments to either jurisdiction will be treated as payments to the jurisdiction with which you file the tax return. Amendment to tax return   If you make a joint payment of estimated tax, make your payment to the jurisdiction where the spouse who has the greater estimated AGI would have to pay (if a separate payment were made). Amendment to tax return For this purpose, income is determined without regard to community property laws. Amendment to tax return Early payment. Amendment to tax return   If you make your first payment of estimated tax early, follow the rules given earlier to determine where to send it. Amendment to tax return If you send it to the wrong jurisdiction, make all later payments to the jurisdiction to which the first payment should have been sent. Amendment to tax return   To pay by check or money order, send your payment with the Form 1040-ES payment voucher to:  Internal Revenue Service P. Amendment to tax return O. Amendment to tax return Box 1300 Charlotte, NC 28201-1300 USA   To get information on paying electronically (by credit or debit card, or through the Electronic Federal Tax Payment System (EFTPS)), go to www. Amendment to tax return irs. Amendment to tax return gov/e-pay. Amendment to tax return   For information on making estimated income tax payments to the CNMI, see Where To Get Forms and Information , earlier. Amendment to tax return Double Taxation A mutual agreement procedure exists to settle cases of double taxation between the United States and the CNMI. Amendment to tax return See Double Taxation in chapter 4. Amendment to tax return Guam Guam has its own tax system based on the same tax laws and tax rates that apply in the United States. Amendment to tax return Where To Get Forms and Information Requests for advice about Guam residency and tax matters should be addressed to: Department of Revenue and Taxation Government of Guam P. Amendment to tax return O. Amendment to tax return Box 23607 GMF, GU 96921 You can order forms and publications by calling (671) 635-1840 or (671) 635-1841. Amendment to tax return You can order forms and publications through the fax at (671) 633-2643. Amendment to tax return You can get forms and publications at www. Amendment to tax return guamtax. Amendment to tax return com. Amendment to tax return The addresses and phone numbers listed above are subject to change. Amendment to tax return Which Return To File Bona fide residents of Guam are subject to special U. Amendment to tax return S. Amendment to tax return tax rules. Amendment to tax return In general, all individuals with income from Guam will file only one return—either to Guam or the United States. Amendment to tax return Bona Fide Resident of Guam If you are a bona fide resident of Guam during the entire tax year, file your return with Guam. Amendment to tax return This applies to all bona fide residents who are citizens, resident aliens, or nonresident aliens of the United States. Amendment to tax return Include income from worldwide sources on your Guam return. Amendment to tax return In determining your total tax payments, include all income tax withheld by either Guam or the United States, any credit for an overpayment of income tax to either Guam or the United States, and any payments of estimated tax to either Guam or the United States. Amendment to tax return Pay any balance of tax due with your tax return. Amendment to tax return Generally, if you properly file your return with, and fully pay your income tax to, Guam, then you are not liable for filing an income tax return with, or for paying tax to, the United States. Amendment to tax return However, if you were self-employed in 2013, see Self-employment tax , later. Amendment to tax return Example. Amendment to tax return Gary Barker was a bona fide resident of Guam for 2013. Amendment to tax return He received wages of $25,000 paid by a private employer in Guam and dividends of $2,000 from U. Amendment to tax return S. Amendment to tax return corporations that carry on business mainly in the United States. Amendment to tax return He must file a 2013 income tax return with the Government of Guam. Amendment to tax return He reports his total income of $27,000 on the Guam return. Amendment to tax return If you are a bona fide resident of Guam for the entire tax year, send your return and all attachments to:  Department of Revenue and Taxation Government of Guam P. Amendment to tax return O. Amendment to tax return Box 23607 GMF, GU 96921 U. Amendment to tax return S. Amendment to tax return Citizen or Resident Alien (Other Than a Bona Fide Resident of Guam) If you have income from sources within Guam and are a U. Amendment to tax return S. Amendment to tax return citizen or resident alien, but you are not a bona fide resident of Guam during the entire tax year, file your income tax return with the United States. Amendment to tax return Include income from worldwide sources on your U. Amendment to tax return S. Amendment to tax return return. Amendment to tax return In determining your total tax payments, include all income tax withheld by either the United States or Guam, any credit for an overpayment of income tax to either the United States or Guam, and any payments of estimated tax to either the United States or Guam. Amendment to tax return Pay any balance of tax due with your tax return. Amendment to tax return You may also need to complete Form 5074. Amendment to tax return You are not liable for filing an income tax return with, or for paying tax to, Guam for the tax year. Amendment to tax return Form 5074. Amendment to tax return   If you file a U. Amendment to tax return S. Amendment to tax return income tax return, attach a completed Form 5074 if you (and your spouse if filing a joint return) have: Adjusted gross income of $50,000 or more for the tax year, and Gross income of $5,000 or more from sources within Guam. Amendment to tax return   The United States and Guam use this form to divide your income taxes. Amendment to tax return   See the Illustrated Example of Form 5074 in chapter 5. Amendment to tax return De minimis exception to determining source of income. Amendment to tax return   In certain situations you will not have income from a possession. Amendment to tax return See De minimis exception under Compensation for Labor or Personal Services in chapter 2. Amendment to tax return   If you are a citizen or resident alien of the United States but not a bona fide resident of Guam during the entire tax year and you are not including a check or money order, send your U. Amendment to tax return S. Amendment to tax return tax return and all attachments (including Form 5074) to:  Department of the Treasury Internal Revenue Service Austin, TX 73301-0215 USA   If you are including a check or a money order, send your U. Amendment to tax return S. Amendment to tax return tax return and all attachments (including Form 5074) to:  Internal Revenue Service P. Amendment to tax return O. Amendment to tax return Box 1303 Charlotte, NC 28201-1303 USA Nonresident Alien (Other Than a Bona Fide Resident of Guam) If you are a nonresident alien of the United States who does not qualify as a bona fide resident of Guam for the entire tax year, you generally must file the following returns. Amendment to tax return A Guam tax return reporting only your income from sources within Guam. Amendment to tax return In this situation, wages for services performed in Guam, whether for a private employer, the U. Amendment to tax return S. Amendment to tax return Government, or otherwise, is income from sources within Guam. Amendment to tax return A U. Amendment to tax return S. Amendment to tax return tax return (Form 1040NR) reporting U. Amendment to tax return S. Amendment to tax return source income according to the rules for a nonresident alien. Amendment to tax return See the instructions for Form 1040NR. Amendment to tax return If you are not a bona fide resident of Guam during the entire tax year and you are not including a check or money order, send your U. Amendment to tax return S. Amendment to tax return tax return and all attachments to:  Department of the Treasury Internal Revenue Service Austin, TX 73301-0215 USA If you are including a check or a money order, send your U. Amendment to tax return S. Amendment to tax return tax return and all attachments to:  Internal Revenue Service P. Amendment to tax return O. Amendment to tax return Box 1303 Charlotte, NC 28201-1303 USA Send your Guam tax return and all attachments to:   Department of Revenue and Taxation P. Amendment to tax return O. Amendment to tax return Box 23607 GMF, GU 96921 Citizen of Guam If you are a citizen of Guam (meaning that you were born or naturalized in Guam) but not otherwise a U. Amendment to tax return S. Amendment to tax return citizen or a U. Amendment to tax return S. Amendment to tax return resident alien during the tax year, file your income tax return with Guam. Amendment to tax return Include income from worldwide sources on your Guam return. Amendment to tax return Take into account tax withheld by both jurisdictions in determining if there is tax overdue or an overpayment. Amendment to tax return Pay any balance of tax due with your tax return. Amendment to tax return If you are a citizen of Guam, send your return and all attachments to:  Department of Revenue and Taxation Government of Guam P. Amendment to tax return O. Amendment to tax return Box 23607 GMF, GU 96921 Special Rules for Guam Special rules apply to certain types of income, employment, and filing status. Amendment to tax return Joint return. Amendment to tax return   If you file a joint return, you should file your return (and pay the tax) with the jurisdiction where the spouse who has the greater adjusted gross income (AGI) would have to file if you were filing separately. Amendment to tax return If the spouse with the greater AGI is a bona fide resident of Guam during the entire tax year, file the joint return with Guam. Amendment to tax return If the spouse with the greater AGI is a U. Amendment to tax return S. Amendment to tax return citizen or resident alien but not a bona fide resident of Guam during the entire tax year, file the joint return with the United States. Amendment to tax return For this purpose, income is determined without regard to community property laws. Amendment to tax return Example. Amendment to tax return Bill Whiting, a U. Amendment to tax return S. Amendment to tax return citizen, was a resident of the United States, and his spouse, a citizen of Guam, was a bona fide resident of Guam during the entire tax year. Amendment to tax return Bill earned $45,000 as an engineer in the United States. Amendment to tax return His spouse earned $15,000 as a teacher in Guam. Amendment to tax return Bill and his spouse will file a joint return. Amendment to tax return Because Bill has the greater AGI, he and his spouse must file their return with the United States and report the entire $60,000 on that return. Amendment to tax return U. Amendment to tax return S. Amendment to tax return Armed Forces. Amendment to tax return   If you are a member of the U. Amendment to tax return S. Amendment to tax return Armed Forces who qualified as a bona fide resident of Guam in a prior tax year, your absence from Guam solely in compliance with military orders will not change your bona fide residency. Amendment to tax return If you did not qualify as a bona fide resident of Guam in a prior tax year, your presence in Guam solely in compliance with military orders will not qualify you as a bona fide resident of Guam. Amendment to tax return Civilian spouse of active duty member of the U. Amendment to tax return S. Amendment to tax return Armed Forces. Amendment to tax return   If, under the rule discussed at the beginning of chapter 1 (see Special rule for civilian spouse of active duty member of the U. Amendment to tax return S. Amendment to tax return Armed Forces ), your tax residence is Guam, follow the guidance in the section for bona fide residents under Which Return To File, earlier. Amendment to tax return However, if your tax residence is one of the 50 states or the District of Columbia and your only income from Guam is from wages, salaries, tips, or self-employment, you will be taxed on your worldwide income and file only a U. Amendment to tax return S. Amendment to tax return tax return (Form 1040) and a state and/or local tax return, if required. Amendment to tax return If you have income from Guam other than wages, salaries, tips, or self-employment that is considered to be sourced in that possession (see Table 2-1), you may need to file Form 5074 with your U. Amendment to tax return S. Amendment to tax return tax return. Amendment to tax return Moving expense deduction. Amendment to tax return   Generally, expenses of a move to Guam are directly attributable to wages, salaries, and other earned income from Guam. Amendment to tax return Likewise, the expenses of a move back to the United States are generally attributable to U. Amendment to tax return S. Amendment to tax return earned income. Amendment to tax return   If your move was to Guam, report your deduction for moving expenses as follows. Amendment to tax return If you are a bona fide resident in the tax year of your move, enter your deductible expenses on your Guam tax return. Amendment to tax return If you are not a bona fide resident, enter your deductible expenses on Form 3903 and enter the deductible amount on Form 1040, line 26, and on Form 5074, line 20. Amendment to tax return   If your move was to the United States, complete Form 3903 and enter the deductible amount on Form 1040, line 26. Amendment to tax return Foreign tax credit. Amendment to tax return   Under the filing rules explained earlier, individuals with Guam source income normally will not claim a foreign tax credit on a U. Amendment to tax return S. Amendment to tax return income tax return for tax paid to Guam. Amendment to tax return Self-employment tax. Amendment to tax return   If you have no U. Amendment to tax return S. Amendment to tax return filing requirement, but have income that is effectively connected with a trade or business in Guam, you must file Form 1040-SS with the United States to report your self-employment income and, if necessary, pay self-employment tax. Amendment to tax return Additional Medicare Tax. Amendment to tax return   Beginning in 2013, you may be required to pay Additional Medicare Tax. Amendment to tax return Also, you may need to report Additional Medicare Tax withheld by your employer. Amendment to tax return For more information see Additional Medicare Tax under Special Rules for Completing Your U. Amendment to tax return S. Amendment to tax return Tax Return in chapter 4. Amendment to tax return Estimated tax payments. Amendment to tax return   To see if you are required to make payments of estimated income tax, self-employment tax, and/or Additional Medicare Tax, to the IRS, get Form 1040-ES. Amendment to tax return Payment of estimated tax. Amendment to tax return   If you must pay estimated tax, make your payment to the jurisdiction where you would file your income tax return if your tax year were to end on the date your first estimated tax payment is due. Amendment to tax return Generally, you should make the rest of your quarterly payments of estimated tax to the jurisdiction where you made your first payment of estimated tax. Amendment to tax return However, estimated tax payments to either jurisdiction will be treated as payments to the jurisdiction with which you file the tax return. Amendment to tax return   If you make a joint payment of estimated tax, make your payment to the jurisdiction where the spouse who has the greater estimated AGI would have to pay (if a separate payment were made). Amendment to tax return For this purpose, income is determined without regard to community property laws. Amendment to tax return Early payment. Amendment to tax return   If you make your first payment of estimated tax early, follow the rules given earlier to determine where to send it. Amendment to tax return If you send it to the wrong jurisdiction, make all later payments to the jurisdiction to which the first payment should have been sent. Amendment to tax return   To pay by check or money order, send your payment with the Form 1040-ES payment voucher to:  Department of Revenue and Taxation Government of Guam P. Amendment to tax return O. Amendment to tax return Box 23607 GMF, GU 96921   To get information on paying electronically (by credit or debit card, or through the Electronic Federal Tax Payment System (EFTPS)), go to www. Amendment to tax return irs. Amendment to tax return gov/e-pay. Amendment to tax return   For information on making estimated income tax payments to the Department of Revenue and Taxation, see Where To Get Forms and Information , earlier. Amendment to tax return Double Taxation A mutual agreement procedure exists to settle cases of double taxation between the United States and Guam. Amendment to tax return See Double Taxation in chapter 4. Amendment to tax return The U. Amendment to tax return S. Amendment to tax return Virgin Islands The U. Amendment to tax return S. Amendment to tax return Virgin Islands has its own tax system based on the same tax laws and tax rates that apply in the United States. Amendment to tax return An important factor in USVI taxation is whether, during the entire tax year, you are a bona fide resident of the USVI. Amendment to tax return Where To Get Forms and Information For information about filing your U. Amendment to tax return S. Amendment to tax return Virgin Islands tax return or about Form 1040INFO, in St. Amendment to tax return Thomas contact : Bureau of Internal Revenue  6115 Estate Smith Bay  St. Amendment to tax return Thomas, VI 00802 You can order forms and publications by calling (340) 715-1040. Amendment to tax return You can order forms and publications through the fax at (340) 774-2672. Amendment to tax return For information about filing your U. Amendment to tax return S. Amendment to tax return Virgin Islands tax return or about Form 1040INFO, in St. Amendment to tax return Croix contact : Bureau of Internal Revenue  4008 Estate Diamond- Plot 7B Christiansted, V. Amendment to tax return I. Amendment to tax return 00820–4421 You can order forms and publications by calling (340) 773-1040. Amendment to tax return You can order forms and publications through the fax at (340) 773-1006. Amendment to tax return You can access the USVI website at www. Amendment to tax return viirb. Amendment to tax return com. Amendment to tax return The addresses and phone numbers listed above are subject to change. Amendment to tax return Which Return To File In general, bona fide residents of the USVI pay taxes only to the USVI. Amendment to tax return U. Amendment to tax return S. Amendment to tax return citizens or resident aliens (but not bona fide residents of the USVI) with USVI source income pay a portion of the tax to each jurisdiction. Amendment to tax return Bona Fide Resident of the USVI File your tax return with the USVI if you are a U. Amendment to tax return S. Amendment to tax return citizen, resident alien, or nonresident alien and a bona fide resident of the USVI during the entire tax year. Amendment to tax return Include your worldwide income on your USVI return. Amendment to tax return In determining your total tax payments, take into account all income tax withheld by either the USVI or the United States, any credit for an overpayment of income tax to either the USVI or the United States, and any payments of estimated tax to either the USVI or the United States. Amendment to tax return Pay any balance of tax due with your tax return. Amendment to tax return Filing this return with the USVI generally also starts the statute of limitations on assessment of your U. Amendment to tax return S. Amendment to tax return income tax. Amendment to tax return You generally do not have to file with the United States for any tax year in which you are a bona fide resident of the USVI during the entire tax year, provided you report and pay tax on your income from all sources to the USVI and identify the source(s) of the income on the return. Amendment to tax return However, if you have self-employment income, you may be required to file Form 1040-SS with the United States. Amendment to tax return For more information, see Self-employment tax under Special Rules for the USVI, later. Amendment to tax return Form 1040INFO. Amendment to tax return   If you are a bona fide resident of the USVI and have non-USVI source income, you must also file Virgin Islands Form 1040INFO, Non-Virgin Islands Source Income of Virgin Islands Residents, with the Virgin Islands Bureau of Internal Revenue. Amendment to tax return Attach Form 1040INFO to your USVI tax return before filing. Amendment to tax return You can get Form 1040INFO by contacting the address or website given earlier. Amendment to tax return   If you are a bona fide resident of the USVI for the entire tax year, file your return and all attachments with the Virgin Islands Bureau of Internal Revenue at:  USVI Bureau of Internal Revenue 6115 Estate Smith Bay St. Amendment to tax return Thomas, VI 00802 U. Amendment to tax return S. Amendment to tax return Citizen or Resident Alien (Other Than a Bona Fide Resident of the USVI) If you are a U. Amendment to tax return S. Amendment to tax return citizen or resident alien but not a bona fide resident of the USVI during the entire tax year, you must file your original Form 1040 with the United States and an identical copy of that return with the USVI if you have: Income from sources in the USVI, or Income effectively connected with the conduct of a trade or business in the USVI. Amendment to tax return File your original Form 1040 with the United States and file a signed copy of the U. Amendment to tax return S. Amendment to tax return return (including all attachments, forms, and schedules) with the Virgin Islands Bureau of Internal Revenue by the due date for filing Form 1040. Amendment to tax return Use Form 8689 to figure the amount of tax you must pay to the USVI. Amendment to tax return Form 8689. Amendment to tax return   Complete this form and attach it to both the return you file with the United States and the copy you file with the USVI. Amendment to tax return Figure the amount of tax you must pay to the USVI as follows:      Total tax on  U. Amendment to tax return S. Amendment to tax return return (after certain adjustments) × USVI AGI Worldwide AGI     Pay any tax due to the USVI when you file your return with the Virgin Islands Bureau of Internal Revenue. Amendment to tax return To receive credit on your U. Amendment to tax return S. Amendment to tax return return for taxes paid to the USVI, include the amounts from Form 8689, lines 40 and 45, in the total on Form 1040, line 72. Amendment to tax return On the dotted line next to line 72, enter “Form 8689” and show the amounts. Amendment to tax return   See the illustrated example in chapter 5. Amendment to tax return De minimis exception to determining source of income. Amendment to tax return   In certain situations you will not have income from a possession. Amendment to tax return See De minimis exception under Compensation for Labor or Personal Services in chapter 2. Amendment to tax return   If you are not a bona fide resident of the USVI during the entire tax year, but you have USVI source income, and you are not including a check or a money order, file Form 1040 and all attachments (including Form 8689) with the:  Department of the Treasury Internal Revenue Service Austin, TX 73301-0215 USA   If you are including a check or a money order, send your U. Amendment to tax return S. Amendment to tax return tax return and all attachments (including Form 8689) to:  Internal Revenue Service P. Amendment to tax return O. Amendment to tax return Box 1303 Charlotte, NC 28201-1303 USA   File a copy of your U. Amendment to tax return S. Amendment to tax return Form 1040 with the Virgin Islands Bureau of Internal Revenue at:  USVI Bureau of Internal Revenue 6115 Estate Smith Bay St. Amendment to tax return Thomas, VI 00802 Nonresident Alien (Other Than a Bona Fide Resident of the USVI) If you are a nonresident alien of the United States who does not qualify as a bona fide resident of the USVI for the entire tax year, you generally must file the following returns. Amendment to tax return A USVI tax return reporting only your income from sources within the USVI. Amendment to tax return In this situation, wages for services performed in the USVI, whether for a private employer, the U. Amendment to tax return S. Amendment to tax return Government, or otherwise, is income from sources within the USVI. Amendment to tax return A U. Amendment to tax return S. Amendment to tax return tax return (Form 1040NR) reporting U. Amendment to tax return S. Amendment to tax return source income according to the rules for a nonresident alien. Amendment to tax return See the instructions for Form 1040NR. Amendment to tax return   If you are not a bona fide resident of the USVI during the entire tax year, and you are not including a check or a money order, send your U. Amendment to tax return S. Amendment to tax return tax return and all attachments (including Form 8689) to:  Department of the Treasury Internal Revenue Service Austin, TX 73301-0215 USA   If you are including a check or a money order, send your U. Amendment to tax return S. Amendment to tax return tax return and all attachments (including Form 8689) to:  Internal Revenue Service P. Amendment to tax return O. Amendment to tax return Box 1303 Charlotte, NC 28201-1303  USA   Send your USVI tax return and all attachments to:  Bureau of Internal Revenue 6115 Estate Smith Bay St. Amendment to tax return Thomas, VI 00802 Special Rules for the USVI There are some special rules for certain types of income, employment, and filing status. Amendment to tax return Joint return. Amendment to tax return   If you file a joint return, you should file your return (and pay the tax) with the jurisdiction where the spouse who has the greater adjusted gross income (AGI) would have to file if you were filing separately. Amendment to tax return If the spouse with the greater AGI is a bona fide resident of the USVI during the entire tax year, file the joint return with the USVI. Amendment to tax return If the spouse with the greater AGI is a U. Amendment to tax return S. Amendment to tax return citizen or resident alien of the United States but not a bona fide resident of the USVI during the entire tax year, file the joint return with the United States. Amendment to tax return For this purpose, income is determined without regard to community property laws. Amendment to tax return Example. Amendment to tax return Marge Birch, a U. Amendment to tax return S. Amendment to tax return citizen, was a resident of the United States, and her spouse, a citizen of the USVI, was a bona fide resident of the USVI during the entire tax year. Amendment to tax return Marge earned $55,000 as an architect in the United States. Amendment to tax return Her spouse earned $30,000 as a librarian in the USVI. Amendment to tax return Marge and her spouse will file a joint return. Amendment to tax return Because Marge has the greater AGI, she and her spouse must file their return with the United States and report the entire $85,000 on that return. Amendment to tax return U. Amendment to tax return S. Amendment to tax return Armed Forces. Amendment to tax return   If you are a member of the U. Amendment to tax return S. Amendment to tax return Armed Forces who qualified as a bona fide resident of the U. Amendment to tax return S. Amendment to tax return Virgin Islands in a prior tax year, your absence from the U. Amendment to tax return S. Amendment to tax return Virgin Islands solely in compliance with military orders will not change your bona fide residency. Amendment to tax return If you did not qualify as a bona fide resident of the U. Amendment to tax return S. Amendment to tax return Virgin Islands in a prior tax year, your presence in the U. Amendment to tax return S. Amendment to tax return Virgin Islands solely in compliance with military orders will not qualify you as a bona fide resident of the U. Amendment to tax return S. Amendment to tax return Virgin Islands. Amendment to tax return Civilian spouse of active duty member of the U. Amendment to tax return S. Amendment to tax return Armed Forces. Amendment to tax return   If, under the rule discussed at the beginning of chapter 1 (see Special rule for civilian spouse of active duty member of the U. Amendment to tax return S. Amendment to tax return Armed Forces ), your tax residence is the USVI, follow the guidance in the section for bona fide residents under Which Return To File, earlier. Amendment to tax return However, if your tax residence is one of the 50 states or the District of Columbia and your only income from the USVI is from wages, salaries, tips, or self-employment, you will be taxed on your worldwide income and file only a U. Amendment to tax return S. Amendment to tax return tax return (Form 1040) and a state and/or local tax return, if required. Amendment to tax return If you have income from the USVI other than wages, salaries, tips, or self-employment that is considered to be sourced in that possession (see Table 2-1), you may need to file Form 8689 with your U. Amendment to tax return S. Amendment to tax return tax return. Amendment to tax return In this case, follow the guidance under U. Amendment to tax return S. Amendment to tax return Citizen or Resident Alien (Other Than a Bona Fide Resident of the USVI ), earlier. Amendment to tax return Moving expense deduction. Amendment to tax return   Generally, expenses of a move to the USVI are directly attributable to wages, salaries, and other earned income from the USVI. Amendment to tax return Likewise, the expenses of a move back to the United States are generally attributable to U. Amendment to tax return S. Amendment to tax return earned income. Amendment to tax return   If your move was to the USVI, report your deduction for moving expenses as follows. Amendment to tax return If you are a bona fide resident in the tax year of your move, enter your deductible expenses on your USVI tax return. Amendment to tax return If you are not a bona fide resident, enter your deductible expenses on Form 3903 and enter the deductible amount on Form 1040, line 26, and on Form 8689, line 20. Amendment to tax return   If your move was to the United States, complete Form 3903 and enter the deductible amount on Form 1040, line 26. Amendment to tax return Foreign tax credit. Amendment to tax return   Under the filing rules explained earlier, individuals with USVI source income normally will not claim a foreign tax credit on a U. Amendment to tax return S. Amendment to tax return income tax return for tax paid to the USVI. Amendment to tax return However, individuals other than bona fide residents of the USVI may claim a direct credit for such tax (see Form 8689 earlier in this section). Amendment to tax return Self-employment tax. Amendment to tax return   If you have no U. Amendment to tax return S. Amendment to tax return filing requirement, but have income that is effectively connected with a trade or business in the USVI, you must file Form 1040-SS with the United States to report your self-employment income and, if necessary, pay self-employment tax. Amendment to tax return Additional Medicare Tax. Amendment to tax return   Beginning in 2013, you may be required to pay Additional Medicare Tax. Amendment to tax return Also, you may need to report Additional Medicare Tax withheld by your employer. Amendment to tax return For more information see Additional Medicare Tax under Special Rules for Completing Your U. Amendment to tax return S. Amendment to tax return Tax Return in chapter 4. Amendment to tax return Estimated tax payments. Amendment to tax return   To see if you are required to make payments of estimated income tax, self-employment tax, and/or Additional Medicare Tax, to the IRS, get Form 1040-ES. Amendment to tax return   To pay by check or money order, send your payment with the Form 1040-ES payment voucher to:  Virgin Islands Bureau of Internal Revenue 6115 Estate Smith Bay St. Amendment to tax return Thomas, VI 00802   To get information on paying electronically (by credit or debit card, or through the Electronic Federal Tax Payment System (EFTPS)), go to www. Amendment to tax return irs. Amendment to tax return gov/e-pay. Amendment to tax return   For information on making estimated income tax payments to the Bureau of Internal Revenue, see Where To Get Forms and Information , earlier. Amendment to tax return Extension of time to file. Amendment to tax return   You can get an automatic 6-month extension of time to file your tax return. Amendment to tax return See Extension of Time To File in chapter 4. Amendment to tax return Bona fide residents of the USVI during the entire tax year must file a paper Form 4868 with the Virgin Islands Bureau of Internal Revenue. Amendment to tax return Nonresidents of the USVI should file separate extension requests with the IRS and the Virgin Islands Bureau of Internal Revenue and make any payments due to the respective jurisdictions. Amendment to tax return However, the Virgin Islands Bureau of Internal Revenue will honor an extension request that is timely filed with the IRS. Amendment to tax return Double Taxation A mutual agreement procedure exists to settle cases of double taxation between the United States and the U. Amendment to tax return S. Amendment to tax return Virgin Islands. Amendment to tax return See Double Taxation in chapter 4. Amendment to tax return Prev  Up  Next   Home   More Online Publications
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Abusive Return Preparer - Criminal Investigation (CI)

Overview - Abusive Return Preparer
Criminal Investigation Return Preparer Program (RPP) establishes procedures to foster compliance by identifying, investigating and prosecuting abusive return preparers

Definition - Abusive Return Preparer
A Return Preparer is defined as any person (including a partnership or corporation) who prepares for compensation all or a substantial portion of a tax return or claim for refund under the income tax provisions of the Internal Revenue Code

Return Preparation and Electronic Filing - Abusive Return Preparer
The advent of electronic filing of income tax returns by electronic return transmitters has provided a new mechanism for unscrupulous preparers to commit fraud

Tactics Used by Dishonest Abusive Return Preparers
Dishonest tax preparers use a variety of methods to formulate fraudulent and illegal deductions reducing taxable income

Helpful Hints when choosing a Return Preparer to ensure you don't hire an Abusive Return Preparer
When preparing your tax return remember ...

Statistical Data - Abusive Return Preparers
Enforcement statistics on investigations initiated, prosecutions recommended, indictments, sentencings and months to serve in prison.

Examples of Abusive Return Preparer Investigations
Examples have been written from public record documents filed in the district courts where the case was prosecuted.

Reporting Fraud and Abuse Within the IRS E-File Program
You should report fraudulent or abusive returns, including those with questionable Forms W2

 


Criminal Enforcement Home Page

How to Report Suspected Tax Fraud Activities

Page Last Reviewed or Updated: 30-Oct-2013

The Amendment To Tax Return

Amendment to tax return 14. Amendment to tax return   Sale of Property Table of Contents Reminder Introduction Useful Items - You may want to see: Sales and TradesWhat Is a Sale or Trade? How To Figure Gain or Loss Nontaxable Trades Transfers Between Spouses Related Party Transactions Capital Gains and LossesCapital or Ordinary Gain or Loss Capital Assets and Noncapital Assets Holding Period Nonbusiness Bad Debts Wash Sales Rollover of Gain From Publicly Traded Securities Reminder Foreign income. Amendment to tax return  If you are a U. Amendment to tax return S. Amendment to tax return citizen who sells property located outside the United States, you must report all gains and losses from the sale of that property on your tax return unless it is exempt by U. Amendment to tax return S. Amendment to tax return law. Amendment to tax return This is true whether you reside inside or outside the United States and whether or not you receive a Form 1099 from the payer. Amendment to tax return Introduction This chapter discusses the tax consequences of selling or trading investment property. Amendment to tax return It explains the following. Amendment to tax return What a sale or trade is. Amendment to tax return Figuring gain or loss. Amendment to tax return Nontaxable trades. Amendment to tax return Related party transactions. Amendment to tax return Capital gains or losses. Amendment to tax return Capital assets and noncapital assets. Amendment to tax return Holding period. Amendment to tax return Rollover of gain from publicly traded securities. Amendment to tax return Other property transactions. Amendment to tax return   Certain transfers of property are not discussed here. Amendment to tax return They are discussed in other IRS publications. Amendment to tax return These include the following. Amendment to tax return Sales of a main home, covered in chapter 15. Amendment to tax return Installment sales, covered in Publication 537, Installment Sales. Amendment to tax return Transactions involving business property, covered in Publication 544, Sales and Other Dispositions of Assets. Amendment to tax return Dispositions of an interest in a passive activity, covered in Publication 925, Passive Activity and At-Risk Rules. Amendment to tax return    Publication 550, Investment Income and Expenses (Including Capital Gains and Losses), provides a more detailed discussion about sales and trades of investment property. Amendment to tax return Publication 550 includes information about the rules covering nonbusiness bad debts, straddles, section 1256 contracts, puts and calls, commodity futures, short sales, and wash sales. Amendment to tax return It also discusses investment-related expenses. Amendment to tax return Useful Items - You may want to see: Publication 550 Investment Income and Expenses Form (and Instructions) Schedule D (Form 1040) Capital Gains and Losses 8949 Sales and Other Dispositions of Capital Assets 8824 Like-Kind Exchanges Sales and Trades If you sold property such as stocks, bonds, or certain commodities through a broker during the year, you should receive, for each sale, a Form 1099-B, Proceeds From Broker and Barter Exchange Transactions, or substitute statement, from the broker. Amendment to tax return Generally, you should receive the statement by February 15 of the next year. Amendment to tax return It will show the gross proceeds from the sale. Amendment to tax return If you sold a covered security in 2013, your 1099-B (or substitute statement) will show your basis. Amendment to tax return Generally, a covered security is a security you acquired after 2010, with certain exceptions. Amendment to tax return See the Instructions for Form 8949. Amendment to tax return The IRS will also get a copy of Form 1099-B from the broker. Amendment to tax return Use Form 1099-B (or substitute statement received from your broker) to complete Form 8949. Amendment to tax return What Is a Sale or Trade? This section explains what is a sale or trade. Amendment to tax return It also explains certain transactions and events that are treated as sales or trades. Amendment to tax return A sale is generally a transfer of property for money or a mortgage, note, or other promise to pay money. Amendment to tax return A trade is a transfer of property for other property or services and may be taxed in the same way as a sale. Amendment to tax return Sale and purchase. Amendment to tax return   Ordinarily, a transaction is not a trade when you voluntarily sell property for cash and immediately buy similar property to replace it. Amendment to tax return The sale and purchase are two separate transactions. Amendment to tax return But see Like-kind exchanges under Nontaxable Trades, later. Amendment to tax return Redemption of stock. Amendment to tax return   A redemption of stock is treated as a sale or trade and is subject to the capital gain or loss provisions unless the redemption is a dividend or other distribution on stock. Amendment to tax return Dividend versus sale or trade. Amendment to tax return   Whether a redemption is treated as a sale, trade, dividend, or other distribution depends on the circumstances in each case. Amendment to tax return Both direct and indirect ownership of stock will be considered. Amendment to tax return The redemption is treated as a sale or trade of stock if: The redemption is not essentially equivalent to a dividend (see chapter 8), There is a substantially disproportionate redemption of stock, There is a complete redemption of all the stock of the corporation owned by the shareholder, or The redemption is a distribution in partial liquidation of a corporation. Amendment to tax return Redemption or retirement of bonds. Amendment to tax return   A redemption or retirement of bonds or notes at their maturity is generally treated as a sale or trade. Amendment to tax return   In addition, a significant modification of a bond is treated as a trade of the original bond for a new bond. Amendment to tax return For details, see Regulations section 1. Amendment to tax return 1001-3. Amendment to tax return Surrender of stock. Amendment to tax return   A surrender of stock by a dominant shareholder who retains ownership of more than half of the corporation's voting shares is treated as a contribution to capital rather than as an immediate loss deductible from taxable income. Amendment to tax return The surrendering shareholder must reallocate his or her basis in the surrendered shares to the shares he or she retains. Amendment to tax return Worthless securities. Amendment to tax return    Stocks, stock rights, and bonds (other than those held for sale by a securities dealer) that became completely worthless during the tax year are treated as though they were sold on the last day of the tax year. Amendment to tax return This affects whether your capital loss is long term or short term. Amendment to tax return See Holding Period , later. Amendment to tax return   Worthless securities also include securities that you abandon after March 12, 2008. Amendment to tax return To abandon a security, you must permanently surrender and relinquish all rights in the security and receive no consideration in exchange for it. Amendment to tax return All the facts and circumstances determine whether the transaction is properly characterized as an abandonment or other type of transaction, such as an actual sale or exchange, contribution to capital, dividend, or gift. Amendment to tax return    If you are a cash basis taxpayer and make payments on a negotiable promissory note that you issued for stock that became worthless, you can deduct these payments as losses in the years you actually make the payments. Amendment to tax return Do not deduct them in the year the stock became worthless. Amendment to tax return How to report loss. Amendment to tax return    Report worthless securities in Part I or Part II, whichever applies, of Form 8949. Amendment to tax return In column (a), enter “Worthless. Amendment to tax return ”    Report your worthless securities transactions on Form 8949 with the correct box checked for these transactions. Amendment to tax return See Form 8949 and the Instructions for Form 8949. Amendment to tax return For more information on Form 8949 and Schedule D (Form 1040), see Reporting Capital Gains and Losses in chapter 16. Amendment to tax return See also Schedule D (Form 1040), Form 8949, and their separate instructions. Amendment to tax return Filing a claim for refund. Amendment to tax return   If you do not claim a loss for a worthless security on your original return for the year it becomes worthless, you can file a claim for a credit or refund due to the loss. Amendment to tax return You must use Form 1040X, Amended U. Amendment to tax return S. Amendment to tax return Individual Income Tax Return, to amend your return for the year the security became worthless. Amendment to tax return You must file it within 7 years from the date your original return for that year had to be filed, or 2 years from the date you paid the tax, whichever is later. Amendment to tax return For more information about filing a claim, see Amended Returns and Claims for Refund in chapter 1. Amendment to tax return How To Figure Gain or Loss You figure gain or loss on a sale or trade of property by comparing the amount you realize with the adjusted basis of the property. Amendment to tax return Gain. Amendment to tax return   If the amount you realize from a sale or trade is more than the adjusted basis of the property you transfer, the difference is a gain. Amendment to tax return Loss. Amendment to tax return   If the adjusted basis of the property you transfer is more than the amount you realize, the difference is a loss. Amendment to tax return Adjusted basis. Amendment to tax return   The adjusted basis of property is your original cost or other original basis properly adjusted (increased or decreased) for certain items. Amendment to tax return See chapter 13 for more information about determining the adjusted basis of property. Amendment to tax return Amount realized. Amendment to tax return   The amount you realize from a sale or trade of property is everything you receive for the property minus your expenses of sale (such as redemption fees, sales commissions, sales charges, or exit fees). Amendment to tax return Amount realized includes the money you receive plus the fair market value of any property or services you receive. Amendment to tax return If you received a note or other debt instrument for the property, see How To Figure Gain or Loss in chapter 4 of Publication 550 to figure the amount realized. Amendment to tax return If you finance the buyer's purchase of your property and the debt instrument does not provide for adequate stated interest, the unstated interest that you must report as ordinary income will reduce the amount realized from the sale. Amendment to tax return For more information, see Publication 537. Amendment to tax return Fair market value. Amendment to tax return   Fair market value is the price at which the property would change hands between a buyer and a seller, neither being forced to buy or sell and both having reasonable knowledge of all the relevant facts. Amendment to tax return Example. Amendment to tax return You trade A Company stock with an adjusted basis of $7,000 for B Company stock with a fair market value of $10,000, which is your amount realized. Amendment to tax return Your gain is $3,000 ($10,000 − $7,000). Amendment to tax return Debt paid off. Amendment to tax return    A debt against the property, or against you, that is paid off as a part of the transaction, or that is assumed by the buyer, must be included in the amount realized. Amendment to tax return This is true even if neither you nor the buyer is personally liable for the debt. Amendment to tax return For example, if you sell or trade property that is subject to a nonrecourse loan, the amount you realize generally includes the full amount of the note assumed by the buyer even if the amount of the note is more than the fair market value of the property. Amendment to tax return Example. Amendment to tax return You sell stock that you had pledged as security for a bank loan of $8,000. Amendment to tax return Your basis in the stock is $6,000. Amendment to tax return The buyer pays off your bank loan and pays you $20,000 in cash. Amendment to tax return The amount realized is $28,000 ($20,000 + $8,000). Amendment to tax return Your gain is $22,000 ($28,000 − $6,000). Amendment to tax return Payment of cash. Amendment to tax return   If you trade property and cash for other property, the amount you realize is the fair market value of the property you receive. Amendment to tax return Determine your gain or loss by subtracting the cash you pay plus the adjusted basis of the property you trade in from the amount you realize. Amendment to tax return If the result is a positive number, it is a gain. Amendment to tax return If the result is a negative number, it is a loss. Amendment to tax return No gain or loss. Amendment to tax return   You may have to use a basis for figuring gain that is different from the basis used for figuring loss. Amendment to tax return In this case, you may have neither a gain nor a loss. Amendment to tax return See Basis Other Than Cost in chapter 13. Amendment to tax return Nontaxable Trades This section discusses trades that generally do not result in a taxable gain or deductible loss. Amendment to tax return For more information on nontaxable trades, see chapter 1 of Publication 544. Amendment to tax return Like-kind exchanges. Amendment to tax return   If you trade business or investment property for other business or investment property of a like kind, you do not pay tax on any gain or deduct any loss until you sell or dispose of the property you receive. Amendment to tax return To be nontaxable, a trade must meet all six of the following conditions. Amendment to tax return The property must be business or investment property. Amendment to tax return You must hold both the property you trade and the property you receive for productive use in your trade or business or for investment. Amendment to tax return Neither property may be property used for personal purposes, such as your home or family car. Amendment to tax return The property must not be held primarily for sale. Amendment to tax return The property you trade and the property you receive must not be property you sell to customers, such as merchandise. Amendment to tax return The property must not be stocks, bonds, notes, choses in action, certificates of trust or beneficial interest, or other securities or evidences of indebtedness or interest, including partnership interests. Amendment to tax return However, see Special rules for mutual ditch, reservoir, or irrigation company stock, in chapter 4 of Publication 550 for an exception. Amendment to tax return Also, you can have a nontaxable trade of corporate stocks under a different rule, as discussed later. Amendment to tax return There must be a trade of like property. Amendment to tax return The trade of real estate for real estate, or personal property for similar personal property, is a trade of like property. Amendment to tax return The trade of an apartment house for a store building, or a panel truck for a pickup truck, is a trade of like property. Amendment to tax return The trade of a piece of machinery for a store building is not a trade of like property. Amendment to tax return Real property located in the United States and real property located outside the United States are not like property. Amendment to tax return Also, personal property used predominantly within the United States and personal property used predominantly outside the United States are not like property. Amendment to tax return The property to be received must be identified in writing within 45 days after the date you transfer the property given up in the trade. Amendment to tax return The property to be received must be received by the earlier of: The 180th day after the date on which you transfer the property given up in the trade, or The due date, including extensions, for your tax return for the year in which the transfer of the property given up occurs. Amendment to tax return    If you trade property with a related party in a like-kind exchange, a special rule may apply. Amendment to tax return See Related Party Transactions , later in this chapter. Amendment to tax return Also, see chapter 1 of Publication 544 for more information on exchanges of business property and special rules for exchanges using qualified intermediaries or involving multiple properties. Amendment to tax return Partly nontaxable exchange. Amendment to tax return   If you receive money or unlike property in addition to like property, and the above six conditions are met, you have a partly nontaxable trade. Amendment to tax return You are taxed on any gain you realize, but only up to the amount of the money and the fair market value of the unlike property you receive. Amendment to tax return You cannot deduct a loss. Amendment to tax return Like property and unlike property transferred. Amendment to tax return   If you give up unlike property in addition to the like property, you must recognize gain or loss on the unlike property you give up. Amendment to tax return The gain or loss is the difference between the adjusted basis of the unlike property and its fair market value. Amendment to tax return Like property and money transferred. Amendment to tax return   If all of the above conditions (1) – (6) are met, you have a nontaxable trade even if you pay money in addition to the like property. Amendment to tax return Basis of property received. Amendment to tax return   To figure the basis of the property received, see Nontaxable Exchanges in chapter 13. Amendment to tax return How to report. Amendment to tax return   You must report the trade of like property on Form 8824. Amendment to tax return If you figure a recognized gain or loss on Form 8824, report it on Schedule D (Form 1040), or on Form 4797, Sales of Business Property, whichever applies. Amendment to tax return See the instructions for Line 22 in the Instructions for Form 8824. Amendment to tax return   For information on using Form 4797, see chapter 4 of Publication 544. Amendment to tax return Corporate stocks. Amendment to tax return   The following trades of corporate stocks generally do not result in a taxable gain or a deductible loss. Amendment to tax return Corporate reorganizations. Amendment to tax return   In some instances, a company will give you common stock for preferred stock, preferred stock for common stock, or stock in one corporation for stock in another corporation. Amendment to tax return If this is a result of a merger, recapitalization, transfer to a controlled corporation, bankruptcy, corporate division, corporate acquisition, or other corporate reorganization, you do not recognize gain or loss. Amendment to tax return Stock for stock of the same corporation. Amendment to tax return   You can exchange common stock for common stock or preferred stock for preferred stock in the same corporation without having a recognized gain or loss. Amendment to tax return This is true for a trade between two stockholders as well as a trade between a stockholder and the corporation. Amendment to tax return Convertible stocks and bonds. Amendment to tax return   You generally will not have a recognized gain or loss if you convert bonds into stock or preferred stock into common stock of the same corporation according to a conversion privilege in the terms of the bond or the preferred stock certificate. Amendment to tax return Property for stock of a controlled corporation. Amendment to tax return   If you transfer property to a corporation solely in exchange for stock in that corporation, and immediately after the trade you are in control of the corporation, you ordinarily will not recognize a gain or loss. Amendment to tax return This rule applies both to individuals and to groups who transfer property to a corporation. Amendment to tax return It does not apply if the corporation is an investment company. Amendment to tax return   For this purpose, to be in control of a corporation, you or your group of transferors must own, immediately after the exchange, at least 80% of the total combined voting power of all classes of stock entitled to vote and at least 80% of the outstanding shares of each class of nonvoting stock of the corporation. Amendment to tax return   If this provision applies to you, you may have to attach to your return a complete statement of all facts pertinent to the exchange. Amendment to tax return For details, see Regulations section 1. Amendment to tax return 351-3. Amendment to tax return Additional information. Amendment to tax return   For more information on trades of stock, see Nontaxable Trades in chapter 4 of Publication 550. Amendment to tax return Insurance policies and annuities. Amendment to tax return   You will not have a recognized gain or loss if the insured or annuitant is the same under both contracts and you trade: A life insurance contract for another life insurance contract or for an endowment or annuity contract or for a qualified long-term care insurance contract, An endowment contract for another endowment contract that provides for regular payments beginning at a date no later than the beginning date under the old contract or for an annuity contract or for a qualified long-term insurance contract, An annuity contract for annuity contract or for a qualified long-term care insurance contract, or A qualified long-term care insurance contract for a qualified long-term care insurance contract. Amendment to tax return   You also may not have to recognize gain or loss on an exchange of a portion of an annuity contract for another annuity contract. Amendment to tax return For transfers completed before October 24, 2011, see Revenue Ruling 2003-76 in Internal Revenue Bulletin 2003-33 and Revenue Procedure 2008-24 in Internal Revenue Bulletin 2008-13. Amendment to tax return Revenue Ruling 2003-76 is available at www. Amendment to tax return irs. Amendment to tax return gov/irb/2003-33_IRB/ar11. Amendment to tax return html. Amendment to tax return Revenue Procedure 2008-24 is available at www. Amendment to tax return irs. Amendment to tax return gov/irb/2008-13_IRB/ar13. Amendment to tax return html. Amendment to tax return For transfers completed on or after October 24, 2011, see Revenue Ruling 2003-76, above, and Revenue Procedure 2011-38, in Internal Revenue Bulletin 2011-30. Amendment to tax return Revenue Procedure 2011-38 is available at www. Amendment to tax return irs. Amendment to tax return gov/irb/2011-30_IRB/ar09. Amendment to tax return html. Amendment to tax return   For tax years beginning after December 31, 2010, amounts received as an annuity for a period of 10 years or more, or for the lives of one or more individuals, under any portion of an annuity, endowment, or life insurance contract, are treated as a separate contract and are considered partial annuities. Amendment to tax return A portion of an annuity, endowment, or life insurance contract may be annuitized, provided that the annuitization period is for 10 years or more or for the lives of one or more individuals. Amendment to tax return The investment in the contract is allocated between the part of the contract from which amounts are received as an annuity and the part of the contract from which amounts are not received as an annuity. Amendment to tax return   Exchanges of contracts not included in this list, such as an annuity contract for an endowment contract, or an annuity or endowment contract for a life insurance contract, are taxable. Amendment to tax return Demutualization of life insurance companies. Amendment to tax return   If you received stock in exchange for your equity interest as a policyholder or an annuitant, you generally will not have a recognized gain or loss. Amendment to tax return See Demutualization of Life Insurance Companies in Publication 550. Amendment to tax return U. Amendment to tax return S. Amendment to tax return Treasury notes or bonds. Amendment to tax return   You can trade certain issues of U. Amendment to tax return S. Amendment to tax return Treasury obligations for other issues designated by the Secretary of the Treasury, with no gain or loss recognized on the trade. Amendment to tax return See Savings bonds traded in chapter 1 of Publication 550 for more information. Amendment to tax return Transfers Between Spouses Generally, no gain or loss is recognized on a transfer of property from an individual to (or in trust for the benefit of) a spouse, or if incident to a divorce, a former spouse. Amendment to tax return This nonrecognition rule does not apply in the following situations. Amendment to tax return The recipient spouse or former spouse is a nonresident alien. Amendment to tax return Property is transferred in trust and liability exceeds basis. Amendment to tax return Gain must be recognized to the extent the amount of the liabilities assumed by the trust, plus any liabilities on the property, exceed the adjusted basis of the property. Amendment to tax return For other situations, see Transfers Between Spouses in chapter 4 of Publication 550. Amendment to tax return Any transfer of property to a spouse or former spouse on which gain or loss is not recognized is treated by the recipient as a gift and is not considered a sale or exchange. Amendment to tax return The recipient's basis in the property will be the same as the adjusted basis of the giver immediately before the transfer. Amendment to tax return This carryover basis rule applies whether the adjusted basis of the transferred property is less than, equal to, or greater than either its fair market value at the time of transfer or any consideration paid by the recipient. Amendment to tax return This rule applies for purposes of determining loss as well as gain. Amendment to tax return Any gain recognized on a transfer in trust increases the basis. Amendment to tax return A transfer of property is incident to a divorce if the transfer occurs within 1 year after the date on which the marriage ends, or if the transfer is related to the ending of the marriage. Amendment to tax return Related Party Transactions Special rules apply to the sale or trade of property between related parties. Amendment to tax return Gain on sale or trade of depreciable property. Amendment to tax return   Your gain from the sale or trade of property to a related party may be ordinary income, rather than capital gain, if the property can be depreciated by the party receiving it. Amendment to tax return See chapter 3 of Publication 544 for more information. Amendment to tax return Like-kind exchanges. Amendment to tax return   Generally, if you trade business or investment property for other business or investment property of a like kind, no gain or loss is recognized. Amendment to tax return See Like-kind exchanges , earlier, under Nontaxable Trades. Amendment to tax return   This rule also applies to trades of property between related parties, defined next under Losses on sales or trades of property. Amendment to tax return However, if either you or the related party disposes of the like property within 2 years after the trade, you both must report any gain or loss not recognized on the original trade on your return filed for the year in which the later disposition occurs. Amendment to tax return See Related Party Transactions in chapter 4 of Publication 550 for exceptions. Amendment to tax return Losses on sales or trades of property. Amendment to tax return   You cannot deduct a loss on the sale or trade of property, other than a distribution in complete liquidation of a corporation, if the transaction is directly or indirectly between you and the following related parties. Amendment to tax return Members of your family. Amendment to tax return This includes only your brothers and sisters, half-brothers and half-sisters, spouse, ancestors (parents, grandparents, etc. Amendment to tax return ), and lineal descendants (children, grandchildren, etc. Amendment to tax return ). Amendment to tax return A partnership in which you directly or indirectly own more than 50% of the capital interest or the profits interest. Amendment to tax return A corporation in which you directly or indirectly own more than 50% in value of the outstanding stock. Amendment to tax return (See Constructive ownership of stock , later. Amendment to tax return ) A tax-exempt charitable or educational organization 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 to tax return   In addition, a loss on the sale or trade of property is not deductible if the transaction is directly or indirectly between the following related parties. Amendment to tax return A grantor and fiduciary, or the fiduciary and beneficiary, of any trust. Amendment to tax return Fiduciaries of two different trusts, or the fiduciary and beneficiary of two different trusts, if the same person is the grantor of both trusts. Amendment to tax return A trust fiduciary and a corporation of which more than 50% in value of the outstanding stock is directly or indirectly owned by or for the trust, or by or for the grantor of the trust. Amendment to tax return A corporation and a partnership if the same persons own more than 50% in value of the outstanding stock of the corporation and more than 50% of the capital interest, or the profits interest, in the partnership. Amendment to tax return Two S corporations if the same persons own more than 50% in value of the outstanding stock of each corporation. Amendment to tax return Two corporations, one of which is an S corporation, if the same persons own more than 50% in value of the outstanding stock of each corporation. Amendment to tax return An executor and a beneficiary of an estate (except in the case of a sale or trade to satisfy a pecuniary bequest). Amendment to tax return Two corporations that are members of the same controlled group. Amendment to tax return (Under certain conditions, however, these losses are not disallowed but must be deferred. Amendment to tax return ) Two partnerships if the same persons own, directly or indirectly, more than 50% of the capital interests or the profit interests in both partnerships. Amendment to tax return Multiple property sales or trades. Amendment to tax return   If you sell or trade to a related party a number of blocks of stock or pieces of property in a lump sum, you must figure the gain or loss separately for each block of stock or piece of property. Amendment to tax return The gain on each item may be taxable. Amendment to tax return However, you cannot deduct the loss on any item. Amendment to tax return Also, you cannot reduce gains from the sales of any of these items by losses on the sales of any of the other items. Amendment to tax return Indirect transactions. Amendment to tax return   You cannot deduct your loss on the sale of stock through your broker if, under a prearranged plan, a related party buys the same stock you had owned. Amendment to tax return This does not apply to a trade between related parties through an exchange that is purely coincidental and is not prearranged. Amendment to tax return Constructive ownership of stock. Amendment to tax return   In determining whether a person directly or indirectly owns any of the outstanding stock of a corporation, the following rules apply. Amendment to tax return Rule 1. Amendment to tax return   Stock directly or indirectly owned by or for a corporation, partnership, estate, or trust is considered owned proportionately by or for its shareholders, partners, or beneficiaries. Amendment to tax return Rule 2. Amendment to tax return   An individual is considered to own the stock directly or indirectly owned by or for his or her family. Amendment to tax return Family includes only brothers and sisters, half-brothers and half-sisters, spouse, ancestors, and lineal descendants. Amendment to tax return Rule 3. Amendment to tax return   An individual owning, other than by applying rule 2, any stock in a corporation is considered to own the stock directly or indirectly owned by or for his or her partner. Amendment to tax return Rule 4. Amendment to tax return   When applying rule 1, 2, or 3, stock constructively owned by a person under rule 1 is treated as actually owned by that person. Amendment to tax return But stock constructively owned by an individual under rule 2 or rule 3 is not treated as owned by that individual for again applying either rule 2 or rule 3 to make another person the constructive owner of the stock. Amendment to tax return Property received from a related party. Amendment to tax return    If you sell or trade at a gain property you acquired from a related party, you recognize the gain only to the extent it is more than the loss previously disallowed to the related party. Amendment to tax return This rule applies only if you are the original transferee and you acquired the property by purchase or exchange. Amendment to tax return This rule does not apply if the related party's loss was disallowed because of the wash sale rules described in chapter 4 of Publication 550 under Wash Sales. Amendment to tax return   If you sell or trade at a loss property you acquired from a related party, you cannot recognize the loss that was not allowed to the related party. Amendment to tax return Example 1. Amendment to tax return Your brother sells you stock for $7,600. Amendment to tax return His cost basis is $10,000. Amendment to tax return Your brother cannot deduct the loss of $2,400. Amendment to tax return Later, you sell the same stock to an unrelated party for $10,500, realizing a gain of $2,900. Amendment to tax return Your reportable gain is $500 (the $2,900 gain minus the $2,400 loss not allowed to your brother). Amendment to tax return Example 2. Amendment to tax return If, in Example 1, you sold the stock for $6,900 instead of $10,500, your recognized loss is only $700 (your $7,600 basis minus $6,900). Amendment to tax return You cannot deduct the loss that was not allowed to your brother. Amendment to tax return Capital Gains and Losses This section discusses the tax treatment of gains and losses from different types of investment transactions. Amendment to tax return Character of gain or loss. Amendment to tax return   You need to classify your gains and losses as either ordinary or capital gains or losses. Amendment to tax return You then need to classify your capital gains and losses as either short term or long term. Amendment to tax return If you have long-term gains and losses, you must identify your 28% rate gains and losses. Amendment to tax return If you have a net capital gain, you must also identify any unrecaptured section 1250 gain. Amendment to tax return   The correct classification and identification helps you figure the limit on capital losses and the correct tax on capital gains. Amendment to tax return Reporting capital gains and losses is explained in chapter 16. Amendment to tax return Capital or Ordinary Gain or Loss If you have a taxable gain or a deductible loss from a transaction, it may be either a capital gain or loss or an ordinary gain or loss, depending on the circumstances. Amendment to tax return Generally, a sale or trade of a capital asset (defined next) results in a capital gain or loss. Amendment to tax return A sale or trade of a noncapital asset generally results in ordinary gain or loss. Amendment to tax return Depending on the circumstances, a gain or loss on a sale or trade of property used in a trade or business may be treated as either capital or ordinary, as explained in Publication 544. Amendment to tax return In some situations, part of your gain or loss may be a capital gain or loss and part may be an ordinary gain or loss. Amendment to tax return Capital Assets and Noncapital Assets For the most part, everything you own and use for personal purposes, pleasure, or investment is a capital asset. Amendment to tax return Some examples are: Stocks or bonds held in your personal account, A house owned and used by you and your family, Household furnishings, A car used for pleasure or commuting, Coin or stamp collections, Gems and jewelry, and Gold, silver, or any other metal. Amendment to tax return Any property you own is a capital asset, except the following noncapital assets. Amendment to tax return Property held mainly for sale to customers or property that will physically become a part of the merchandise for sale to customers. Amendment to tax return For an exception, see Capital Asset Treatment for Self-Created Musical Works , later. Amendment to tax return Depreciable property used in your trade or business, even if fully depreciated. Amendment to tax return Real property used in your trade or business. Amendment to tax return A copyright, a literary, musical, or artistic composition, a letter or memorandum, or similar property that is: Created by your personal efforts, Prepared or produced for you (in the case of a letter, memorandum, or similar property), or Acquired under circumstances (for example, by gift) entitling you to the basis of the person who created the property or for whom it was prepared or produced. Amendment to tax return For an exception to this rule, see Capital Asset Treatment for Self-Created Musical Works , later. Amendment to tax return Accounts or notes receivable acquired in the ordinary course of a trade or business for services rendered or from the sale of property described in (1). Amendment to tax return U. Amendment to tax return S. Amendment to tax return Government publications that you received from the government free or for less than the normal sales price, or that you acquired under circumstances entitling you to the basis of someone who received the publications free or for less than the normal sales price. Amendment to tax return Certain commodities derivative financial instruments held by commodities derivatives dealers. Amendment to tax return Hedging transactions, but only if the transaction is clearly identified as a hedging transaction before the close of the day on which it was acquired, originated, or entered into. Amendment to tax return Supplies of a type you regularly use or consume in the ordinary course of your trade or business. Amendment to tax return Investment Property Investment property is a capital asset. Amendment to tax return Any gain or loss from its sale or trade is generally a capital gain or loss. Amendment to tax return Gold, silver, stamps, coins, gems, etc. Amendment to tax return   These are capital assets except when they are held for sale by a dealer. Amendment to tax return Any gain or loss you have from their sale or trade generally is a capital gain or loss. Amendment to tax return Stocks, stock rights, and bonds. Amendment to tax return   All of these (including stock received as a dividend) are capital assets except when held for sale by a securities dealer. Amendment to tax return However, if you own small business stock, see Losses on Section 1244 (Small Business) Stock , later, and Losses on Small Business Investment Company Stock, in chapter 4 of Publication 550. Amendment to tax return Personal Use Property Property held for personal use only, rather than for investment, is a capital asset, and you must report a gain from its sale as a capital gain. Amendment to tax return However, you cannot deduct a loss from selling personal use property. Amendment to tax return Capital Asset Treatment for Self-Created Musical Works You can elect to treat musical compositions and copyrights in musical works as capital assets when you sell or exchange them if: Your personal efforts created the property, or You acquired the property under circumstances (for example, by gift) entitling you to the basis of the person who created the property or for whom it was prepared or produced. Amendment to tax return You must make a separate election for each musical composition (or copyright in a musical work) sold or exchanged during the tax year. Amendment to tax return You must make the election on or before the due date (including extensions) of the income tax return for the tax year of the sale or exchange. Amendment to tax return You must make the election on Form 8949 by treating the sale or exchange as the sale or exchange of a capital asset, according to Form 8949, Schedule D (Form 1040), and their separate instructions. Amendment to tax return For more information on Form 8949 and Schedule D (Form 1040), see Reporting Capital Gains and Losses in chapter 16. Amendment to tax return See also Schedule D (Form 1040), Form 8949, and their separate instructions. Amendment to tax return You can revoke the election if you have IRS approval. Amendment to tax return To get IRS approval, you must submit a request for a letter ruling under the appropriate IRS revenue procedure. Amendment to tax return See, for example, Rev. Amendment to tax return Proc. Amendment to tax return 2013-1, corrected by Announcement 2013–9, and amplified and modified by Rev. Amendment to tax return Proc. Amendment to tax return 2013–32, available at www. Amendment to tax return irs. Amendment to tax return gov/irb/2013-01_IRB/ar06. Amendment to tax return html. Amendment to tax return Alternatively, you are granted an automatic 6-month extension from the due date of your income tax return (excluding extensions) to revoke the election, provided you timely file your income tax return, and within this 6-month extension period, you file Form 1040X that treats the sale or exchange as the sale or exchange of property that is not a capital asset. Amendment to tax return Discounted Debt Instruments Treat your gain or loss on the sale, redemption, or retirement of a bond or other debt instrument originally issued at a discount or bought at a discount as capital gain or loss, except as explained in the following discussions. Amendment to tax return Short-term government obligations. Amendment to tax return   Treat gains on short-term federal, state, or local government obligations (other than tax-exempt obligations) as ordinary income up to your ratable share of the acquisition discount. Amendment to tax return This treatment applies to obligations with a fixed maturity date not more than 1 year from the date of issue. Amendment to tax return Acquisition discount is the stated redemption price at maturity minus your basis in the obligation. Amendment to tax return   However, do not treat these gains as income to the extent you previously included the discount in income. Amendment to tax return See Discount on Short-Term Obligations in chapter 1 of Publication 550. Amendment to tax return Short-term nongovernment obligations. Amendment to tax return   Treat gains on short-term nongovernment obligations as ordinary income up to your ratable share of original issue discount (OID). Amendment to tax return This treatment applies to obligations with a fixed maturity date of not more than 1 year from the date of issue. Amendment to tax return   However, to the extent you previously included the discount in income, you do not have to include it in income again. Amendment to tax return See Discount on Short-Term Obligations in chapter 1 of Publication 550. Amendment to tax return Tax-exempt state and local government bonds. Amendment to tax return   If these bonds were originally issued at a discount before September 4, 1982, or you acquired them before March 2, 1984, treat your part of OID as tax-exempt interest. Amendment to tax return To figure your gain or loss on the sale or trade of these bonds, reduce the amount realized by your part of OID. Amendment to tax return   If the bonds were issued after September 3, 1982, and acquired after March 1, 1984, increase the adjusted basis by your part of OID to figure gain or loss. Amendment to tax return For more information on the basis of these bonds, see Discounted Debt Instruments in chapter 4 of Publication 550. Amendment to tax return   Any gain from market discount is usually taxable on disposition or redemption of tax-exempt bonds. Amendment to tax return If you bought the bonds before May 1, 1993, the gain from market discount is capital gain. Amendment to tax return If you bought the bonds after April 30, 1993, the gain is ordinary income. Amendment to tax return   You figure the market discount by subtracting the price you paid for the bond from the sum of the original issue price of the bond and the amount of accumulated OID from the date of issue that represented interest to any earlier holders. Amendment to tax return For more information, see Market Discount Bonds in chapter 1 of Publication 550. Amendment to tax return    A loss on the sale or other disposition of a tax-exempt state or local government bond is deductible as a capital loss. Amendment to tax return Redeemed before maturity. Amendment to tax return   If a state or local bond issued before June 9, 1980, is redeemed before it matures, the OID is not taxable to you. Amendment to tax return   If a state or local bond issued after June 8, 1980, is redeemed before it matures, the part of OID earned while you hold the bond is not taxable to you. Amendment to tax return However, you must report the unearned part of OID as a capital gain. Amendment to tax return Example. Amendment to tax return On July 2, 2002, the date of issue, you bought a 20-year, 6% municipal bond for $800. Amendment to tax return The face amount of the bond was $1,000. Amendment to tax return The $200 discount was OID. Amendment to tax return At the time the bond was issued, the issuer had no intention of redeeming it before it matured. Amendment to tax return The bond was callable at its face amount beginning 10 years after the issue date. Amendment to tax return The issuer redeemed the bond at the end of 11 years (July 2, 2013) for its face amount of $1,000 plus accrued annual interest of $60. Amendment to tax return The OID earned during the time you held the bond, $73, is not taxable. Amendment to tax return The $60 accrued annual interest also is not taxable. Amendment to tax return However, you must report the unearned part of OID ($127) as a capital gain. Amendment to tax return Long-term debt instruments issued after 1954 and before May 28, 1969 (or before July 2, 1982, if a government instrument). Amendment to tax return   If you sell, trade, or redeem for a gain one of these debt instruments, the part of your gain that is not more than your ratable share of the OID at the time of the sale or redemption is ordinary income. Amendment to tax return The rest of the gain is capital gain. Amendment to tax return If, however, there was an intention to call the debt instrument before maturity, all of your gain that is not more than the entire OID is treated as ordinary income at the time of the sale. Amendment to tax return This treatment of taxable gain also applies to corporate instruments issued after May 27, 1969, under a written commitment that was binding on May 27, 1969, and at all times thereafter. Amendment to tax return Long-term debt instruments issued after May 27, 1969 (or after July 1, 1982, if a government instrument). Amendment to tax return   If you hold one of these debt instruments, you must include a part of OID in your gross income each year you own the instrument. Amendment to tax return Your basis in that debt instrument is increased by the amount of OID that you have included in your gross income. Amendment to tax return See Original Issue Discount (OID) in chapter 7 for information about OID that you must report on your tax return. Amendment to tax return   If you sell or trade the debt instrument before maturity, your gain is a capital gain. Amendment to tax return However, if at the time the instrument was originally issued there was an intention to call it before its maturity, your gain generally is ordinary income to the extent of the entire OID reduced by any amounts of OID previously includible in your income. Amendment to tax return In this case, the rest of the gain is capital gain. Amendment to tax return Market discount bonds. Amendment to tax return   If the debt instrument has market discount and you chose to include the discount in income as it accrued, increase your basis in the debt instrument by the accrued discount to figure capital gain or loss on its disposition. Amendment to tax return If you did not choose to include the discount in income as it accrued, you must report gain as ordinary interest income up to the instrument's accrued market discount. Amendment to tax return The rest of the gain is capital gain. Amendment to tax return See Market Discount Bonds in chapter 1 of Publication 550. Amendment to tax return   A different rule applies to market discount bonds issued before July 19, 1984, and purchased by you before May 1, 1993. Amendment to tax return See Market discount bonds under Discounted Debt Instruments in chapter 4 of Publication 550. Amendment to tax return Retirement of debt instrument. Amendment to tax return   Any amount you receive on the retirement of a debt instrument is treated in the same way as if you had sold or traded that instrument. Amendment to tax return Notes of individuals. Amendment to tax return   If you hold an obligation of an individual issued with OID after March 1, 1984, you generally must include the OID in your income currently, and your gain or loss on its sale or retirement is generally capital gain or loss. Amendment to tax return An exception to this treatment applies if the obligation is a loan between individuals and all the following requirements are met. Amendment to tax return The lender is not in the business of lending money. Amendment to tax return The amount of the loan, plus the amount of any outstanding prior loans, is $10,000 or less. Amendment to tax return Avoiding federal tax is not one of the principal purposes of the loan. Amendment to tax return   If the exception applies, or the obligation was issued before March 2, 1984, you do not include the OID in your income currently. Amendment to tax return When you sell or redeem the obligation, the part of your gain that is not more than your accrued share of OID at that time is ordinary income. Amendment to tax return The rest of the gain, if any, is capital gain. Amendment to tax return Any loss on the sale or redemption is capital loss. Amendment to tax return Deposit in Insolvent or Bankrupt Financial Institution If you lose money you have on deposit in a bank, credit union, or other financial institution that becomes insolvent or bankrupt, you may be able to deduct your loss in one of three ways. Amendment to tax return Ordinary loss. Amendment to tax return Casualty loss. Amendment to tax return Nonbusiness bad debt (short-term capital loss). Amendment to tax return  For more information, see Deposit in Insolvent or Bankrupt Financial Institution, in chapter 4 of Publication 550. Amendment to tax return Sale of Annuity The part of any gain on the sale of an annuity contract before its maturity date that is based on interest accumulated on the contract is ordinary income. Amendment to tax return Losses on Section 1244 (Small Business) Stock You can deduct as an ordinary loss, rather than as a capital loss, your loss on the sale, trade, or worthlessness of section 1244 stock. Amendment to tax return Report the loss on Form 4797, line 10. Amendment to tax return Any gain on section 1244 stock is a capital gain if the stock is a capital asset in your hands. Amendment to tax return Report the gain on Form 8949. Amendment to tax return See Losses on Section 1244 (Small Business) Stock in chapter 4 of Publication 550. Amendment to tax return For more information on Form 8949 and Schedule D (Form 1040), see Reporting Capital Gains and Losses in chapter 16. Amendment to tax return See also Schedule D (Form 1040), Form 8949, and their separate instructions. Amendment to tax return Holding Period If you sold or traded investment property, you must determine your holding period for the property. Amendment to tax return Your holding period determines whether any capital gain or loss was a short-term or long-term capital gain or loss. Amendment to tax return Long-term or short-term. Amendment to tax return   If you hold investment property more than 1 year, any capital gain or loss is a long-term capital gain or loss. Amendment to tax return If you hold the property 1 year or less, any capital gain or loss is a short-term capital gain or loss. Amendment to tax return   To determine how long you held the investment property, begin counting on the date after the day you acquired the property. Amendment to tax return The day you disposed of the property is part of your holding period. Amendment to tax return Example. Amendment to tax return If you bought investment property on February 6, 2012, and sold it on February 6, 2013, your holding period is not more than 1 year and you have a short-term capital gain or loss. Amendment to tax return If you sold it on February 7, 2013, your holding period is more than 1 year and you will have a long-term capital gain or loss. Amendment to tax return Securities traded on established market. Amendment to tax return   For securities traded on an established securities market, your holding period begins the day after the trade date you bought the securities, and ends on the trade date you sold them. Amendment to tax return    Do not confuse the trade date with the settlement date, which is the date by which the stock must be delivered and payment must be made. Amendment to tax return Example. Amendment to tax return You are a cash method, calendar year taxpayer. Amendment to tax return You sold stock at a gain on December 30, 2013. Amendment to tax return According to the rules of the stock exchange, the sale was closed by delivery of the stock 4 trading days after the sale, on January 6, 2014. Amendment to tax return You received payment of the sales price on that same day. Amendment to tax return Report your gain on your 2013 return, even though you received the payment in 2014. Amendment to tax return The gain is long term or short term depending on whether you held the stock more than 1 year. Amendment to tax return Your holding period ended on December 30. Amendment to tax return If you had sold the stock at a loss, you would also report it on your 2013 return. Amendment to tax return U. Amendment to tax return S. Amendment to tax return Treasury notes and bonds. Amendment to tax return   The holding period of U. Amendment to tax return S. Amendment to tax return Treasury notes and bonds sold at auction on the basis of yield starts the day after the Secretary of the Treasury, through news releases, gives notification of acceptance to successful bidders. Amendment to tax return The holding period of U. Amendment to tax return S. Amendment to tax return Treasury notes and bonds sold through an offering on a subscription basis at a specified yield starts the day after the subscription is submitted. Amendment to tax return Automatic investment service. Amendment to tax return   In determining your holding period for shares bought by the bank or other agent, full shares are considered bought first and any fractional shares are considered bought last. Amendment to tax return Your holding period starts on the day after the bank's purchase date. Amendment to tax return If a share was bought over more than one purchase date, your holding period for that share is a split holding period. Amendment to tax return A part of the share is considered to have been bought on each date that stock was bought by the bank with the proceeds of available funds. Amendment to tax return Nontaxable trades. Amendment to tax return   If you acquire investment property in a trade for other investment property and your basis for the new property is determined, in whole or in part, by your basis in the old property, your holding period for the new property begins on the day following the date you acquired the old property. Amendment to tax return Property received as a gift. Amendment to tax return   If you receive a gift of property and your basis is determined by the donor's adjusted basis, your holding period is considered to have started on the same day the donor's holding period started. Amendment to tax return   If your basis is determined by the fair market value of the property, your holding period starts on the day after the date of the gift. Amendment to tax return Inherited property. Amendment to tax return   Generally, if you inherited investment property, your capital gain or loss on any later disposition of that property is long-term capital gain or loss. Amendment to tax return This is true regardless of how long you actually held the property. Amendment to tax return However, if you inherited property from someone who died in 2010, see the information below. Amendment to tax return Inherited property from someone who died in 2010. Amendment to tax return   If you inherit investment property from a decedent who died in 2010, and the executor of the decedent's estate made the election to file Form 8939, refer to the information provided by the executor or see Publication 4895, Tax Treatment of Property Acquired From a Decedent Dying in 2010, to determine your holding period. Amendment to tax return Real property bought. Amendment to tax return   To figure how long you have held real property bought under an unconditional contract, begin counting on the day after you received title to it or on the day after you took possession of it and assumed the burdens and privileges of ownership, whichever happened first. Amendment to tax return However, taking delivery or possession of real property under an option agreement is not enough to start the holding period. Amendment to tax return The holding period cannot start until there is an actual contract of sale. Amendment to tax return The holding period of the seller cannot end before that time. Amendment to tax return Real property repossessed. Amendment to tax return   If you sell real property but keep a security interest in it, and then later repossess the property under the terms of the sales contract, your holding period for a later sale includes the period you held the property before the original sale and the period after the repossession. Amendment to tax return Your holding period does not include the time between the original sale and the repossession. Amendment to tax return That is, it does not include the period during which the first buyer held the property. Amendment to tax return Stock dividends. Amendment to tax return   The holding period for stock you received as a taxable stock dividend begins on the date of distribution. Amendment to tax return   The holding period for new stock you received as a nontaxable stock dividend begins on the same day as the holding period of the old stock. Amendment to tax return This rule also applies to stock acquired in a “spin-off,” which is a distribution of stock or securities in a controlled corporation. Amendment to tax return Nontaxable stock rights. Amendment to tax return   Your holding period for nontaxable stock rights begins on the same day as the holding period of the underlying stock. Amendment to tax return The holding period for stock acquired through the exercise of stock rights begins on the date the right was exercised. Amendment to tax return Nonbusiness Bad Debts If someone owes you money that you cannot collect, you have a bad debt. Amendment to tax return You may be able to deduct the amount owed to you when you figure your tax for the year the debt becomes worthless. Amendment to tax return Generally, nonbusiness bad debts are bad debts that did not come from operating your trade or business, and are deductible as short-term capital losses. Amendment to tax return To be deductible, nonbusiness bad debts must be totally worthless. Amendment to tax return You cannot deduct a partly worthless nonbusiness debt. Amendment to tax return Genuine debt required. Amendment to tax return   A debt must be genuine for you to deduct a loss. Amendment to tax return A debt is genuine if it arises from a debtor-creditor relationship based on a valid and enforceable obligation to repay a fixed or determinable sum of money. Amendment to tax return Basis in bad debt required. Amendment to tax return    To deduct a bad debt, you must have a basis in it—that is, you must have already included the amount in your income or loaned out your cash. Amendment to tax return For example, you cannot claim a bad debt deduction for court-ordered child support not paid to you by your former spouse. Amendment to tax return If you are a cash method taxpayer (as most individuals are), you generally cannot take a bad debt deduction for unpaid salaries, wages, rents, fees, interest, dividends, and similar items. Amendment to tax return When deductible. Amendment to tax return   You can take a bad debt deduction only in the year the debt becomes worthless. Amendment to tax return You do not have to wait until a debt is due to determine whether it is worthless. Amendment to tax return A debt becomes worthless when there is no longer any chance that the amount owed will be paid. Amendment to tax return   It is not necessary to go to court if you can show that a judgment from the court would be uncollectible. Amendment to tax return You must only show that you have taken reasonable steps to collect the debt. Amendment to tax return Bankruptcy of your debtor is generally good evidence of the worthlessness of at least a part of an unsecured and unpreferred debt. Amendment to tax return How to report bad debts. Amendment to tax return    Deduct nonbusiness bad debts as short-term capital losses on Form 8949. Amendment to tax return    Make sure you report your bad debt(s) (and any other short-term transactions for which you did not receive a Form 1099-B) on Form 8949, Part I, with box C checked. Amendment to tax return    For more information on Form 8949 and Schedule D (Form 1040), see Reporting Capital Gains and Losses in chapter 16. Amendment to tax return See also Schedule D (Form 1040), Form 8949, and their separate instructions. Amendment to tax return   For each bad debt, attach a statement to your return that contains: A description of the debt, including the amount, and the date it became due, The name of the debtor, and any business or family relationship between you and the debtor, The efforts you made to collect the debt, and Why you decided the debt was worthless. Amendment to tax return For example, you could show that the borrower has declared bankruptcy, or that legal action to collect would probably not result in payment of any part of the debt. Amendment to tax return Filing a claim for refund. Amendment to tax return    If you do not deduct a bad debt on your original return for the year it becomes worthless, you can file a claim for a credit or refund due to the bad debt. Amendment to tax return To do this, use Form 1040X to amend your return for the year the debt became worthless. Amendment to tax return You must file it within 7 years from the date your original return for that year had to be filed, or 2 years from the date you paid the tax, whichever is later. Amendment to tax return For more information about filing a claim, see Amended Returns and Claims for Refund in chapter 1. Amendment to tax return Additional information. Amendment to tax return   For more information, see Nonbusiness Bad Debts in Publication 550. Amendment to tax return For information on business bad debts, see chapter 10 of Publication 535, Business Expenses. Amendment to tax return Wash Sales You cannot deduct losses from sales or trades of stock or securities in a wash sale. Amendment to tax return A wash sale occurs when you sell or trade stock or securities at a loss and within 30 days before or after the sale you: Buy substantially identical stock or securities, Acquire substantially identical stock or securities in a fully taxable trade, Acquire a contract or option to buy substantially identical stock or securities, or Acquire substantially identical stock for your individual retirement account (IRA) or Roth IRA. Amendment to tax return If your loss was disallowed because of the wash sale rules, add the disallowed loss to the cost of the new stock or securities (except in (4) above). Amendment to tax return The result is your basis in the new stock or securities. Amendment to tax return This adjustment postpones the loss deduction until the disposition of the new stock or securities. Amendment to tax return Your holding period for the new stock or securities includes the holding period of the stock or securities sold. Amendment to tax return For more information, see Wash Sales, in chapter 4 of Publication 550. Amendment to tax return Rollover of Gain From Publicly Traded Securities You may qualify for a tax-free rollover of certain gains from the sale of publicly traded securities. Amendment to tax return This means that if you buy certain replacement property and make the choice described in this section, you postpone part or all of your gain. Amendment to tax return You postpone the gain by adjusting the basis of the replacement property as described in Basis of replacement property , later. Amendment to tax return This postpones your gain until the year you dispose of the replacement property. Amendment to tax return You qualify to make this choice if you meet all the following tests. Amendment to tax return You sell publicly traded securities at a gain. Amendment to tax return Publicly traded securities are securities traded on an established securities market. Amendment to tax return Your gain from the sale is a capital gain. Amendment to tax return During the 60-day period beginning on the date of the sale, you buy replacement property. Amendment to tax return This replacement property must be either common stock of, or a partnership interest in a specialized small business investment company (SSBIC). Amendment to tax return This is any partnership or corporation licensed by the Small Business Administration under section 301(d) of the Small Business Investment Act of 1958, as in effect on May 13, 1993. Amendment to tax return Amount of gain recognized. Amendment to tax return   If you make the choice described in this section, you must recognize gain only up to the following amount. Amendment to tax return The amount realized on the sale, minus The cost of any common stock or partnership interest in an SSBIC that you bought during the 60-day period beginning on the date of sale (and did not previously take into account on an earlier sale of publicly traded securities). Amendment to tax return  If this amount is less than the amount of your gain, you can postpone the rest of your gain, subject to the limit described next. Amendment to tax return If this amount is equal to or more than the amount of your gain, you must recognize the full amount of your gain. Amendment to tax return Limit on gain postponed. Amendment to tax return   The amount of gain you can postpone each year is limited to the smaller of: $50,000 ($25,000 if you are married and file a separate return), or $500,000 ($250,000 if you are married and file a separate return), minus the amount of gain you postponed for all earlier years. Amendment to tax return Basis of replacement property. Amendment to tax return   You must subtract the amount of postponed gain from the basis of your replacement property. Amendment to tax return How to report and postpone gain. Amendment to tax return    See How to report and postpone gain under Rollover of Gain From Publicly Traded Securities in chapter 4 of Publication 550 for details. Amendment to tax return Prev  Up  Next   Home   More Online Publications