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Efile

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Efile

Efile Index Symbols 1231 property sale, Sale of property interest. Efile 401(k) plans, Elective Deferrals Excess contributions, Excess Contributions 403(b) plans, Elective Deferrals Limit for, Limit for tax-sheltered annuities. Efile 457 plans, Elective Deferrals Limit for deferrals under, Limit for deferrals under section 457 plans. Efile 501(c)(18)(D) plans, Elective Deferrals Contributions, Section 501(c)(18)(D) contributions. Efile 501(c)(3) organizations, Student loans. Efile 529 program, Qualified tuition program (QTP). Efile 83(b) election, How to make the choice. Efile A Academic health centers Meals and lodging when teaching and research organization, Academic health center. Efile Accelerated death benefits, Accelerated Death Benefits Accident insurance, Accident or Health Plan Accidental death benefits, Accidental death benefits. Efile Accrual method taxpayers, Prepaid income. Efile Accrued leave payment At time of retirement or resignation, Accrued leave payment. Efile Disability retirement, Accrued leave payment. Efile Activity not for profit, Activity not for profit. Efile Adoption Employer assistance, Adoption Assistance Advance commissions, Miscellaneous Compensation Aircraft, Flights on employer-provided aircraft. Efile Airlines No-additional-cost services, No-Additional-Cost Services Valuation of flights on employer-provided aircraft, Flights on employer-provided aircraft. Efile Alaska Permanent Fund dividend, Alaska Permanent Fund dividend. Efile Alien status, waiver of, Waiver of alien status. Efile Aliens Nonresident, Nonresident aliens. Efile Alimony, Alimony. Efile Alternative minimum tax (AMT) Recoveries, refiguring of, Subject to alternative minimum tax. Efile Stock options, Alternative minimum tax (AMT). Efile Annuities Charitable gift, Charitable gift annuities. Efile Railroad retirement, Railroad retirement annuities. Efile Tax-sheltered, Limit for tax-sheltered annuities. Efile Archer MSAs, Archer MSA contributions. Efile , Medical savings accounts (Archer MSAs and Medicare Advantage MSAs). Efile Armed forces, Military Combat zone bonus, Veterans' benefits. Efile Disability, Disability. Efile Disability pensions, Military and Government Disability Pensions Health professions scholarship, Tuition Reduction Military action as cause of disability injuries, Terrorist attack or military action. Efile Qualified reservist distribution, Qualified reservist distribution (QRD). Efile Rehabilitative program payments, Veterans' benefits. Efile Retirement pay, Military retirement pay. Efile Veterans benefits, Veterans' benefits. Efile Assistance (see Tax help) Athletic facilities, employer-provided, Athletic Facilities Automobile (see Vehicle, employer-provided) Awards (see Damages from lawsuits) B Babysitting, Babysitting. Efile Back pay, award for, Back pay awards. Efile Backup withholding Barter exchange transactions, Backup withholding. Efile Bankruptcy Canceled debt not deemed to be income, Excluded debt. Efile Barter income, Bartering Below-market loans, Below-market loans. Efile Bequest for services, Bequest for services. Efile Bicycle, Transportation Fringe benefit, Qualified bicycle commuting. Efile Black lung benefit payments, Black lung benefit payments. Efile Bonuses, Bonuses and awards. Efile , Employee awards or bonuses. Efile Breach of contract Damages as income, Court awards and damages. Efile Bribes, Bribes. Efile Business expenses Reimbursements, Allowances and reimbursements. Efile Business income, Business and Investment Income, More information. Efile C Cafeteria plans, Cafeteria plans. Efile Campaign contributions, Campaign contributions. Efile Campus lodging, Qualified campus lodging. Efile , Moving Expense Reimbursements Cancellation of debt, Canceled Debts Cancellation of sales contracts, Canceled sales contract. Efile Capital gains Recoveries, Capital gains. Efile , Capital gains. Efile Capital gains or losses Employee stock option plans (ESOPs), Option granted at a discount. Efile Incentive stock options (ISOs), Incentive stock options (ISOs). Efile Sale of personal property, Sale of personal items. Efile Car (see Vehicle, employer-provided) Car pools, Car pools. Efile Cash or deferred arrangements (CODAs), Elective Deferrals Cash rebates, Cash rebates. Efile Casualty insurance Reimbursements from, Casualty insurance and other reimbursements. Efile Catch-up contributions, Catch-up contributions. Efile , Catch-up contributions. Efile Charitable gift annuities, Charitable gift annuities. Efile Child and Adult Care Food Program Payments to daycare providers, Food program payments to daycare providers. Efile Child support payments, Child support payments. Efile Childcare providers, Childcare providers. Efile , Food program payments to daycare providers. Efile Chronic illness, Chronically ill individual. Efile Accelerated death benefits paid to, Exclusion for chronic illness. Efile Citizens outside U. Efile S. Efile Exclusion of foreign income, Reminders Civil Rights Act of 1964, Title VII Back pay and damages for emotional distress under, Court awards and damages. Efile Clergy, Clergy Coal, Coal and iron ore. Efile Colleges and universities Faculty lodging, Faculty lodging. Efile Scholarships and fellowships, Scholarships and fellowships. Efile Commissions Advance, Miscellaneous Compensation Commuter highway vehicles, Transportation Compensation Employee, Employee Compensation Miscellaneous, Miscellaneous Compensation Unemployment, Unemployment compensation. Efile Workers', Workers' Compensation Compensatory damages, Other compensation. Efile , Court awards and damages. Efile Constructive receipt of income, Constructively received income. Efile Copyrights Infringement damages, Court awards and damages. Efile Royalties, Copyrights and patents. Efile Corporate directors, Corporate director. Efile Cost-of-living allowances, Government cost-of-living allowances. Efile Court awards, Court awards and damages. Efile (see also Damages from lawsuits) Credit card Insurance, Credit card insurance. Efile Credits Recoveries, refiguring of unused credits, Unused tax credits. Efile , Unused tax credits. Efile Currency transactions, foreign, Foreign currency transactions. Efile D Damages from lawsuits, Court awards and damages. Efile Back pay awards, Back pay awards. Efile Breach of contract, Court awards and damages. Efile Compensatory damages, Other compensation. Efile , Court awards and damages. Efile Emotional distress under Title VII, Civil Rights Act of 1964, Court awards and damages. Efile Punitive damages, Court awards and damages. Efile Daycare providers, Childcare providers. Efile (see also Childcare providers) Food program payments to, Food program payments to daycare providers. Efile De minimis benefits, De Minimis (Minimal) Benefits, Meals and Lodging Death benefits, Proceeds not received in installments. Efile (see also Life insurance) Accelerated, Accelerated Death Benefits Debts Canceled, Canceled Debts Excluded debt, Excluded debt. Efile Nonrecourse debts, Mortgage relief upon sale or other disposition. Efile Recourse, Mortgage relief upon sale or other disposition. Efile Stockholder's, Stockholder debt. Efile Deduction Costs of discrimination suits, Deduction for costs involved in unlawful discrimination suits. Efile Deferred compensation Nonqualified plans, Nonqualified deferred compensation plans. Efile , Nonqualified deferred compensation plans of nonqualified entities. Efile Dependent care benefits, Dependent Care Benefits Depletion allowance, Depletion. Efile Differential wage payments, Differential wage payments. Efile Armed forces, Differential wage payments. Efile Directors' fees, Corporate director. Efile Disability Military, Disability. Efile Pensions, Disability Pensions Workers' compensation, Disability pension. Efile Person with, Persons with disabilities. Efile Unemployment compensation, paid as substitute for, Types of unemployment compensation. Efile Disaster relief Disaster mitigation payments, Disaster mitigation payments. Efile Disaster Relief and Emergency Assistance Act Grants, Disaster relief grants. Efile Unemployment benefits, Unemployment Benefits Mitigation payments, Reminders Payments, Disaster relief payments. Efile Discounts Employee discounts, Employee Discounts Employee stock purchase plans, Option granted at a discount. Efile Mortgage loan for early payment, Discounted mortgage loan. Efile Dividends Restricted stock, Dividends received on restricted stock. Efile Divorced taxpayers Stock options exercised incident to divorce, Tax form. Efile Down payment assistance, Down payment assistance. Efile E Educational assistance Employer-provided, Educational Assistance Scholarships and fellowships, Scholarships and fellowships. Efile Educational institutions Faculty lodging, Faculty lodging. Efile Elderly persons Nutrition Program for the Elderly, Nutrition Program for the Elderly. Efile Tax Counseling for the Elderly, Volunteer tax counseling. Efile Election precinct officials, Election precinct official. Efile Elective deferrals, Elective Deferrals Catch-up contributions, Catch-up contributions. Efile , Catch-up contributions. Efile Excess annual additions, Excess Annual Additions Excess contributions, Excess Contributions Excess deferrals, Excess deferrals. Efile Increased limit for last 3 years prior to retirement age, Increased limit. Efile Limit on, Elective Deferrals Reporting by employer, Reporting by employer. Efile Emergency Homeowners' Loan Program, Hardest Hit Fund and Emergency Homeowners' Loan Program. Efile Emotional distress damages, Emotional distress. Efile Employee achievement awards, Employee achievement award. Efile Employee awards or bonuses, Employee awards or bonuses. Efile Employee compensation, Employee Compensation, Inherited property not substantially vested. Efile Fringe benefits, Fringe Benefits, Special valuation rules. Efile Restricted property, Restricted Property, Inherited property not substantially vested. Efile Retirement plan contributions, Retirement Plan Contributions Stock options, Stock Options, Statutory Stock Options Employee discounts, Employee Discounts Employee stock purchase plans, Statutory Stock Options, Employee stock purchase plan. Efile Employer, foreign, Foreign Employer Employer-owned life insurance, Employer-owned life insurance contract. Efile Employer-provided Educational assistance, Educational Assistance Vehicles, Employer-provided vehicles. Efile Employment Abroad, Employment abroad. Efile Agency fees, Employment agency fees. Efile Contracts Severance pay for cancellation of, Severance pay. Efile Endowment proceeds, Endowment Contract Proceeds Energy Assistance, Payments to reduce cost of winter energy. Efile Conservation Subsidies, Energy conservation subsidies. Efile Utility rebates, Utility rebates. Efile Estate income, Estate and trust income. Efile Estimated tax Unemployment compensation, Tax withholding. Efile Excess Annual additions, Excess Annual Additions Contributions, Excess Contributions Deferrals, Excess deferrals. Efile Expected inheritance, Expected inheritance. Efile Expenses paid by another, Expenses paid by another. Efile Exxon Valdez settlement, Exxon Valdez settlement income. Efile Eligible retirement plan, Contributions to eligible retirement plan. Efile Income averaging, Income averaging. Efile Legal expenses, Legal expenses. Efile Reporting requirement-statement, Statement. Efile F Faculty lodging, Faculty lodging. Efile Fair market value (FMV), Fair market value. Efile Stock options, Grant of option. Efile Farming Qualified farm debt, cancellation of, Excluded debt. Efile Federal employees Accrued leave payment, Accrued leave payment. Efile Cost-of-living allowances, Government cost-of-living allowances. Efile Disability pensions, Military and Government Disability Pensions Thrift Savings Plan for, Elective Deferrals Federal Employees Compensation Act (FECA) payments, Federal Employees' Compensation Act (FECA). Efile Federal income tax Refunds, Federal income tax refund. Efile Fees for services, Fees for services. Efile Financial counseling fees, Financial Counseling Fees Fellowships, Scholarships and fellowships. Efile FICA withholding Foreign employers, U. Efile S. Efile citizens working for in U. Efile S. Efile , Social security and Medicare taxes. Efile Paid by employer, Social security and Medicare taxes paid by employer. Efile Fiduciaries Fees for services, Fees for services. Efile , Personal representatives. Efile Financial counseling fees, Financial Counseling Fees (see also Retirement planning services) Fitness programs Employer-provided, Athletic Facilities Flights Employer-provided aircraft, Flights on employer-provided aircraft. Efile No-additional-cost services, No-Additional-Cost Services Food benefits Daycare providers, food program payments to, Food program payments to daycare providers. Efile Nutrition Program for the Elderly, Nutrition Program for the Elderly. Efile Foreign Currency transactions, Foreign currency transactions. Efile Employment, Foreign Employer Governments, employees of, Employees of international organizations or foreign governments. Efile Income, Reminders Service, Service-connected disability. Efile Form 1040 Excess contributions to elective deferrals, Excess Contributions Recoveries, Where to report. Efile Unemployment compensation, Unemployment Benefits Wages from Form W-2, Employee Compensation Form 1040 or 1040A, Schedule B Restricted stock dividends, Stock you chose to include in your income. Efile Form 1040, Schedule A Outplacement services, deduction for, Outplacement services. Efile Repayment of commissions paid in advance, Advance commissions and other earnings. Efile Form 1040, Schedule C Bartering, Bartering Childcare providers to use, Childcare providers. Efile Personal property rental, reporting income from, Reporting business income and expenses. Efile Royalties, Royalties Form 1040, Schedule C-EZ Bartering, Bartering Childcare Providers to use, Childcare providers. Efile Personal property rental, reporting income from, Reporting business income and expenses. Efile Royalties, Royalties Form 1040, Schedule D Stock options, Sale of the stock. Efile Stock options reported on, Statutory Stock Options Form 1040, Schedule E Partner's return, Partner's return. Efile Royalties, Royalties Form 1040A Recoveries, Where to report. Efile Unemployment compensation, Unemployment Benefits Wages from Form W-2, Employee Compensation Form 1040EZ Recoveries, Where to report. Efile Unemployment compensation, Unemployment Benefits Wages from Form W-2, Employee Compensation Form 1041 Estates and trusts, Estate and trust income. Efile Form 1041, Schedule K-1 Beneficiary's share of income, deductions, credits, etc. Efile , Estate and trust income. Efile Form 1065 Partnership return, Partnership return. Efile Form 1065, Schedule K-1 Partner's share of income, Schedule K-1 (Form 1065). Efile , Partnership Income Form 1098 Mortgage interest statement, Mortgage interest refund. Efile Form 1099-B Barter exchange transactions, Form 1099-B from barter exchange. Efile , Backup withholding. Efile Form 1099-C Cancellation of debt, Form 1099-C. Efile Form 1099-DIV Restricted stock dividends, Stock you chose to include in your income. Efile Form 1099-G State tax refunds, State tax refund. Efile Unemployment compensation, Unemployment Benefits Form 1099-MISC Services totaling $600 or more, Fees for services. Efile Stock options exercised incident to divorce, Tax form. Efile Form 1099-R Charitable gift annuities, Charitable gift annuities. Efile Excess annual additions, Excess Annual Additions Excess deferral amounts, Excess distributed to you. Efile Surrender of life insurance policy for cash, Surrender of policy for cash. Efile Form 1120-POL Political organizations, Campaign contributions. Efile Form 1120S S corporation return, S corporation return. Efile Form 1120S, Schedule K-1 Shareholder's share of income, credits, deductions, etc. Efile , Schedule K-1 (Form 1120S). Efile Form 2441 Child and dependent care expenses, Dependent Care Benefits Form 4255 Recapture of investment credit, Amounts Recovered for Credits Form 6251 Alternative minimum tax, Alternative minimum tax (AMT). Efile Form 8839 Adoption assistance, Adoption Assistance Form 8853 Accelerated death benefits, Form 8853. Efile Archer MSAs and long-term care insurance contracts, Archer MSA contributions. Efile Form 8919 Uncollected social security and Medicare tax on wages, Employee Compensation Form RRB-1099 Railroad retirement board payments, Form RRB-1099. Efile Form SSA-1099 Social security benefit statement, Form SSA-1099. Efile Form W-2 501(c)(18)(D) contributions, Section 501(c)(18)(D) contributions. Efile Accrued leave payment at time of retirement or resignation, Accrued leave payment. Efile Back pay awards, Back pay awards. Efile Bonuses or awards, Bonuses and awards. Efile Elective deferrals, reporting by employer, Reporting by employer. Efile Failure to receive from employer, Employee Compensation Fringe benefits reported on, Form W-2. Efile Stock options from employers, Tax form. Efile Wage and tax statement, Employee Compensation Form W-2G Gambling winnings, Form W-2G. Efile Form W-4V Unemployment compensation, voluntary withholding request, Tax withholding. Efile Form W-9 Request for taxpayer identification number, Backup withholding. Efile Foster care, Foster care providers. Efile Foster Grandparent Program, National Senior Service Corps programs. Efile Found property, Found property. Efile Free tax services, Free help with your tax return. Efile Fringe benefits, Fringe Benefits, Special valuation rules. Efile Accident and health insurance, Accident or Health Plan Adoption, employer assistance, Adoption Assistance Athletic facilities, Athletic Facilities Commuter highway vehicles, Transportation De minimis benefits, De Minimis (Minimal) Benefits, Meals and Lodging Dependent care benefits, Dependent Care Benefits Educational assistance, Educational Assistance Employee discounts, Employee Discounts Faculty lodging, Faculty lodging. Efile Financial counseling fees, Financial Counseling Fees Holiday gifts, Holiday gifts. Efile Meals and lodging, Meals and Lodging Moving expenses (see Moving expenses) No-additional-cost services, No-Additional-Cost Services Parking, Transportation Retirement planning (see Retirement planning services) Transit pass, Transportation, Transit pass. Efile Tuition reduction, Tuition Reduction Valuation of, Valuation of Fringe Benefits, Special valuation rules. Efile Vehicle, Employer-provided vehicles. Efile Working condition benefits, Working Condition Benefits Frozen deposits Interest on, Interest on frozen deposits. Efile G Gambling winnings and losses, Gambling winnings. Efile Gas Royalties from, Oil, gas, and minerals. Efile Gifts, Gifts and inheritances. Efile Holiday gifts from employer, Holiday gifts. Efile Government employees (see Federal employees; State employees) Grantor trusts, Grantor trust. Efile Group-term life insurance Worksheets, Figuring the taxable cost. Efile , Worksheet 1. Efile Figuring the Cost of Group-Term Life Insurance To Include in Income—Illustrated Gulf oil spill, Reminders, Gulf oil spill. Efile H HAMP Home affordable modification program Pay-for-performance success payments, Home Affordable Modification Program (HAMP). Efile Hardest Hit Fund Program, Hardest Hit Fund and Emergency Homeowners' Loan Program. Efile Health Flexible spending arrangement, Health flexible spending arrangement (health FSA). Efile Insurance, Accident or Health Plan Reimbursement arrangement, Health reimbursement arrangement (HRA). Efile Savings account, Health savings accounts (HSA). Efile Help (see Tax help) Highly compensated employees Excess contributions to elective deferrals, Excess Contributions Historic preservation grants, Historic preservation grants. Efile Hobby losses, Hobby losses. Efile Holding period requirement, Holding period requirement. Efile Holiday gifts, Holiday gifts. Efile Holocaust victims restitution, Holocaust victims restitution. Efile Home, sale of, Sale of home. Efile Host or hostess, Host or Hostess Hotels No-additional-cost services, No-Additional-Cost Services Housing (see Lodging) I Illegal activities, Illegal activities. Efile Incentive stock options (ISOs), Statutory Stock Options, Incentive stock options (ISOs). Efile Income Assigned, Assignment of income. Efile Business and investment, Business and Investment Income, More information. Efile Constructive receipt of, Constructively received income. Efile Estate and trust, Estate and trust income. Efile Foreign employers, Foreign Employer Illegal, Illegal activities. Efile Miscellaneous, Miscellaneous Income Other, Other Income Partnership, Partnership Income Prepaid, Prepaid income. Efile S corporation, S Corporation Income Indian fishing rights, Indian fishing rights. Efile Indian money account, Indian money account litigation settlement. Efile Individual retirement arrangements (IRAs) Deduction, Benefits may affect your IRA deduction. Efile Inherited IRA, Inherited pension or IRA. Efile Inheritance, Gifts and inheritances. Efile IRA, Inherited pension or IRA. Efile Property not substantially vested, Inherited property not substantially vested. Efile Injury benefits, Sickness and Injury Benefits, Reimbursement for medical care. Efile Insurance Credit card, Credit card insurance. Efile Health, Accident or Health Plan Life (see Life insurance) Long-term care (see Long-term care insurance) Interest Canceled debt including, Interest included in canceled debt. Efile Frozen deposits, Interest on frozen deposits. Efile Mortgage refunds, Mortgage interest refund. Efile Option on insurance, Interest option on insurance. Efile Recovery amounts, Interest on recovery. Efile Savings bond, Interest on qualified savings bonds. Efile State and local government obligations, Interest on state and local government obligations. Efile Interference with business operations Damages as income, Court awards and damages. Efile International organizations, employees of, Foreign Employer Interview expenses, Job interview expenses. Efile Investment counseling fees, Financial Counseling Fees (see also Retirement planning services) Investment income, Business and Investment Income, More information. Efile IRAs (see Individual retirement arrangements (IRAs)) Iron ore, Coal and iron ore. Efile Itemized deductions Limited, Itemized deductions limited. Efile Recoveries, Recoveries, Itemized Deduction Recoveries J Job interview expenses, Job interview expenses. Efile Joint returns Social security benefits or railroad retirement payments, Joint return. Efile Joint state/local tax return Recoveries, Joint state or local income tax return. Efile Jury duty pay, Jury duty. Efile K Kickbacks, Kickbacks. Efile L Labor unions Convention expenses, reimbursed, Reimbursed union convention expenses. Efile Dues, Union benefits and dues. Efile Strike and lockout benefits, Strike and lockout benefits. Efile Unemployment benefits paid from, Payments by a union. Efile Last day of tax year, income received on, Constructively received income. Efile Leave (see Accrued leave payment) Length-of-service awards, Employee achievement award. Efile Life insurance Employer-owned, Employer-owned life insurance contract. Efile Proceeds, Life Insurance Proceeds Surrender of policy for cash, Surrender of policy for cash. Efile Loans, Discounted mortgage loan. Efile (see also Mortgage) Below-market, Below-market loans. Efile Student, Student loans. Efile Lockout benefits, Strike and lockout benefits. Efile Lodging Campus lodging, Qualified campus lodging. Efile , Moving Expense Reimbursements Clergy, Housing Employer-paid or reimbursed, Meals and Lodging Faculty lodging, Faculty lodging. Efile Replacement housing payments, Replacement housing payments. Efile Long-term care insurance, Long-term care coverage. Efile , Long-Term Care Insurance Contracts Lotteries and raffles, Lotteries and raffles. Efile Lump-sum distributions Survivor benefits, Lump-sum payments. Efile M Manufacturer incentive payments, Manufacturer incentive payments. Efile Meals Employer-paid or reimbursed, Meals and Lodging Nutrition Program for the Elderly, Nutrition Program for the Elderly. Efile Medical Care reimbursements, Reimbursement for medical care. Efile Savings accounts, Medical savings accounts (Archer MSAs and Medicare Advantage MSAs). Efile Medicare Advantage MSAs, Medical savings accounts (Archer MSAs and Medicare Advantage MSAs). Efile Benefits, Medicare. Efile Tax paid by employer, Social security and Medicare taxes paid by employer. Efile Medicare tax (see Social security and Medicare taxes) Military (see Armed forces) Minerals Royalties from, Oil, gas, and minerals. Efile Miscellaneous Compensation, Miscellaneous Compensation Income, Miscellaneous Income Missing children, photographs of, Reminders Mortgage Assistance payment (under sec. Efile 235 of National Housing Act), Mortgage assistance payments under section 235 of the National Housing Act. Efile Discounted loan, Discounted mortgage loan. Efile Interest refund, Mortgage interest refund. Efile Qualified principal residence indebtedness, Qualified principal residence indebtedness (QPRI). Efile Relief, Mortgage relief upon sale or other disposition. Efile Motor vehicle, employer-provided, Employer-provided vehicles. Efile Moving expenses Reimbursements, Allowances and reimbursements. Efile , Moving expense reimbursements. Efile MSAs (Medical savings accounts), Medical savings accounts (Archer MSAs and Medicare Advantage MSAs). Efile N National Health Service Corps Scholarship Program, Tuition Reduction National Oceanic and Atmospheric Administration, Service-connected disability. Efile National Senior Service Corps, National Senior Service Corps programs. Efile No-additional-cost services, No-Additional-Cost Services No-fault car insurance Disability benefits under, Other compensation. Efile Nobel prize, Pulitzer, Nobel, and similar prizes. Efile Nonrecourse debt, Mortgage relief upon sale or other disposition. Efile Nonstatutory stock options, Nonstatutory Stock Options Nontaxable income, Introduction Not-for-profit activities, Activity not for profit. Efile Notary fees, Notary public. Efile Notes received for services, Note received for services. Efile Nutrition Program for the Elderly, Nutrition Program for the Elderly. Efile O Oil Royalties from, Oil, gas, and minerals. Efile Old-age, survivors, and disability insurance benefits (OASDI), Old-age, survivors, and disability insurance benefits (OASDI). Efile Options, stock, Stock Options, Statutory Stock Options Outplacement services, Outplacement services. Efile Overseas work, Reminders P Parking fees Employer-paid or reimbursed, Transportation, Qualified parking. Efile Partner and partnership income, Partnership Income Patents Infringement damages, Court awards and damages. Efile Royalties, Copyrights and patents. Efile Peace Corps, Peace Corps. Efile Pensions Clergy, Pension. Efile Disability pensions, Disability Pensions Inherited pensions, Inherited pension or IRA. Efile Military, Military retirement pay. Efile Personal property Rental income and expense, Rents From Personal Property Sale of, Sale of personal items. Efile Personal representatives (see Fiduciaries) Prepaid income, Prepaid income. Efile Price reduced after purchase, Price reduced after purchase. Efile Prizes and awards, Bonuses and awards. Efile , Prizes and awards. Efile Achievement awards, Employee achievement award. Efile Employee awards or bonuses, Employee awards or bonuses. Efile Length-of-service awards, Employee achievement award. Efile Pulitzer, Nobel, and similar prizes, Pulitzer, Nobel, and similar prizes. Efile Safety achievement, Employee achievement award. Efile Scholarship prizes, Prizes. Efile Profit-sharing plan, Retirement and profit-sharing plans. Efile Public assistance benefits, Welfare and Other Public Assistance Benefits Public Health Service, Service-connected disability. Efile Public safety officers killed in line of duty, Public safety officer killed in the line of duty. Efile Public transportation passes, employer-provided, Transportation, Transit pass. Efile Publications (see Tax help) Pulitzer prize, Pulitzer, Nobel, and similar prizes. Efile Punitive damages, Court awards and damages. Efile Q Qualified joint venture, Reminders Qualified tuition program (QTP), Qualified tuition program (QTP). Efile R Raffles, Lotteries and raffles. Efile Railroad Retirement annuities, Railroad retirement annuities. Efile Retirement benefits, Social security and equivalent railroad retirement benefits. Efile Sick pay, Railroad sick pay. Efile Unemployment compensation benefits, Types of unemployment compensation. Efile Real estate Qualified real property business debt, cancellation of, Excluded debt. Efile Rebates Cash, Cash rebates. Efile Utility, Utility rebates. Efile Recovery of amounts previously deducted, Recoveries, Standard deduction for earlier years. Efile Itemized deductions, Recoveries, Itemized Deduction Recoveries Non-itemized deductions, Non-Itemized Deduction Recoveries Unused tax credits, refiguring of, Unused tax credits. Efile , Unused tax credits. Efile Refunds Federal income tax, Federal income tax refund. Efile Mortgage interest, Mortgage interest refund. Efile State tax, State tax refund. Efile Rehabilitative program payments, Veterans' benefits. Efile Reimbursements Business expenses, Allowances and reimbursements. Efile Casualty losses, Casualty insurance and other reimbursements. Efile Meals and lodging, Meals and Lodging Medical expenses, Reimbursement for medical care. Efile Moving expenses, Allowances and reimbursements. Efile , Moving expense reimbursements. Efile Related party transactions Stock option transfer, Transfer in non-arm's-length transaction. Efile Religious order members, Members of Religious Orders Rental income and expenses Personal property rental, Rents From Personal Property Reporting of, Reporting business income and expenses. Efile Repayments, Repayments, Year of deduction (or credit). Efile Repossession, Canceled sales contract. Efile Restricted property, Restricted Property, Inherited property not substantially vested. Efile Retired Senior Volunteer Program (RSVP), National Senior Service Corps programs. Efile Retirement Settlement, Reminders Retirement planning services, Financial Counseling Fees, Retirement Planning Services Retirement plans, Military retirement pay. Efile (see also Pensions) Automatic contribution arrangements, Qualified automatic contribution arrangements. Efile Contributions, Retirement Plan Contributions, Excess Annual Additions, Statutory Stock Options Elective deferrals (see Elective deferrals) Rewards, Rewards. Efile Roth contributions, Designated Roth contributions. Efile Royalties, Royalties S S corporations, S Corporation Income Safety achievement awards, Employee achievement award. Efile Salary reduction simplified employee pension plans (see SARSEPs) Sale of home, Sale of home. Efile Sales contracts Cancellation of, Canceled sales contract. Efile SARSEPs, Elective Deferrals Excess contributions, Excess Contributions Savings bonds, Interest on qualified savings bonds. Efile Savings incentive match plans for employees (see SIMPLE plans) Scholarships and fellowships, Scholarships and fellowships. Efile Self-employed persons U. Efile S. Efile citizens working for foreign employers in U. Efile S. Efile treated as, Social security and Medicare taxes. Efile Senior Companion Program, National Senior Service Corps programs. Efile Service Corps of Retired Executives (SCORE), Service Corps of Retired Executives (SCORE). Efile Severance pay, Severance pay. Efile Outplacement services, Outplacement services. Efile Sick pay, Sick pay. Efile Sickness and injury benefits, Sickness and Injury Benefits, Reimbursement for medical care. Efile SIMPLE plans, Elective Deferrals Limit for deferrals under, Limit for deferrals under SIMPLE plans. Efile Smallpox vaccine injuries, Smallpox vaccine injuries. Efile Social security and Medicare taxes Foreign employers, U. Efile S. Efile citizens working for in U. Efile S. Efile , Social security and Medicare taxes. Efile Paid by employer, Social security and Medicare taxes paid by employer. Efile Social security benefits, Social security and equivalent railroad retirement benefits. Efile Standard deduction Recoveries, Standard deduction limit. Efile , Standard deduction for earlier years. Efile State employees Unemployment benefits paid to, State employees. Efile State or local governments Interest on obligations of, Interest on state and local government obligations. Efile State or local taxes Refunds, State tax refund. Efile Statutory stock option holding period, Sale of the stock. Efile Stock appreciation rights, Stock appreciation rights. Efile Stock options, Stock Options, Statutory Stock Options Stock options, nonstatutory Exercise or transfer, Exercise or transfer of option. Efile Grant, Grant of option. Efile Sale, Sale of the stock. Efile Stock options, statutory Exercise, Exercise of option. Efile Grant, Grant of option. Efile Sale, Sale of the stock. Efile Stockholder debts, Stockholder debt. Efile Stolen property, Stolen property. Efile Strike benefits, Strike and lockout benefits. Efile Student loans Cancellation of debt, Student loans. Efile Substantial risk of forfeiture, Substantial risk of forfeiture. Efile Substantially vested property, Substantially vested. 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Efile Internal Revenue Bulletin:  2013-7  February 11, 2013  Rev. Efile Proc. Efile 2013-16 Table of Contents SECTION 1. Efile PURPOSE SECTION 2. Efile BACKGROUND—HAMP AND THE HAMP PRINCIPAL REDUCTION ALTERNATIVE SECTION 3. Efile BACKGROUND—APPLICABLE PROVISIONS OF LAW SECTION 4. Efile FEDERAL INCOME TAX TREATMENT SECTION 5. Efile INFORMATION-REPORTING OBLIGATIONS SECTION 6. Efile HAMP-PRA BORROWERS’ REPORTING OF DISCHARGES OF INDEBTEDNESS UNDER HAMP-PRA SECTION 7. Efile PENALTY RELIEF FOR 2012 SECTION 8. Efile SCOPE AND EFFECTIVE DATE SECTION 9. Efile DRAFTING INFORMATION SECTION 1. Efile PURPOSE This revenue procedure provides guidance to mortgage loan holders, loan servicers, and borrowers who are participating in the Department of the Treasury’s (Treasury) and Department of Housing and Urban Development’s (HUD) Home Affordable Modification Program® (HAMP®). Efile Under HAMP, a borrower may be eligible for principal reduction of the outstanding balance of a qualifying mortgage pursuant to the program’s Principal Reduction AlternativeSM (PRA). Efile In appropriate cases, HAMP has been offering the PRA as part of a HAMP loan modification since the last quarter of 2010. Efile Current plans call for HAMP to continue accepting new borrowers through the end of 2013. Efile The Internal Revenue Service (Service) is providing this guidance to address the tax consequences for borrowers (HAMP-PRA borrowers) who are participating in the PRA and the reporting obligations for participating mortgage loan holders and servicers. Efile SECTION 2. Efile BACKGROUND—HAMP AND THE HAMP PRINCIPAL REDUCTION ALTERNATIVE . Efile 01 To help distressed borrowers lower their monthly mortgage payments, Treasury and HUD established HAMP for mortgage loans that are not owned or guaranteed by the Federal National Mortgage Association (Fannie Mae) or the Federal Home Loan Mortgage Corporation (Freddie Mac). Efile A description of the program can be found at www. Efile makinghomeaffordable. Efile gov. Efile . Efile 02 Under HAMP, a participating loan servicer, acting on behalf of the mortgage loan holder, must consider a sequence of modification steps for each eligible borrower’s mortgage loan until the borrower’s monthly payment is reduced to a monthly payment amount determined under the HAMP guidelines. Efile These steps include a reduction in the mortgage loan’s interest rate, an extension of the mortgage loan’s term, and a reduction in the mortgage loan’s principal balance. Efile . Efile 03 In some cases, the unpaid principal balance of the modified mortgage loan is divided into (1) an amount that bears stated interest and that is used to calculate the borrower’s new monthly mortgage payment (the “Non-forbearance Portion”), and (2) a forbearance amount, which does not bear stated interest and on which periodic payments of stated principal are not required. Efile The stated principal of the forbearance amount is due upon the earliest of the borrower’s transfer of the property, payoff of the balance on the Non-forbearance Portion of the mortgage loan, or maturity of the mortgage loan. Efile However, as noted in section 2. Efile 06 of this revenue procedure, a HAMP-PRA borrower sometimes may not have to pay all or a portion of the forbearance amount. Efile (The forbearance amount associated with a HAMP-PRA principal reduction is called the “PRA Forbearance Amount. Efile ”) . Efile 04 If a mortgage loan is being considered for a HAMP modification and the amount owed on the mortgage loan is greater than 115 percent of the value of the property, then the servicer must consider whether principal reduction under PRA should be used as part of the HAMP modification. Efile . Efile 05 The first step toward a HAMP modification is a trial period plan, in which the borrower’s monthly mortgage payment is set at a monthly payment amount determined under the HAMP guidelines. Efile The trial period plan effective date is the due date for the first of the reduced payments that are to be made under the trial period plan. Efile (It is the first day of either the first or the second month after the servicer transmits the trial period notice to the borrower. Efile ) In general, the trial period is three months, and, during this period, the borrower must satisfy certain conditions before the changes to the terms of the mortgage loan become permanent (the “Trial Period Conditions”). Efile Specifically, depending on the borrower’s trial period payment history, the borrower’s compliance with HAMP and servicer guidelines, and his or her satisfaction of all other Trial Period Conditions, the borrower will be offered a permanent modification of the terms of the mortgage loan, including monthly mortgage payments that are lower than those under the old mortgage loan. Efile Until the effective date of a permanent modification, the terms of the existing mortgage loan continue to apply. Efile . Efile 06 After the mortgage loan is permanently modified under HAMP, if the modified mortgage loan is in good standing on the first, second, or third annual anniversary of the trial period plan effective date (the “Three-year Period”), the servicer must reduce the unpaid principal balance of the mortgage loan on the respective anniversary date by one-third of the initial PRA Forbearance Amount. Efile (The servicer allocates the entire reduction to the remaining PRA Forbearance Amount. Efile ) In general, if a HAMP-PRA borrower’s mortgage loan is in good standing and if the HAMP-PRA borrower pays in full the Non-forbearance Portion of the mortgage loan prior to the reduction of the entire PRA Forbearance Amount, the servicer must reduce the remaining outstanding principal balance of the mortgage loan by the remaining PRA Forbearance Amount. Efile . Efile 07 In connection with every HAMP loan modification, the HAMP program administrator (acting on behalf of the federal government) provides incentives to the borrower, the servicer, and the investor (that is, the holder of the mortgage loan). Efile If a HAMP loan modification includes a PRA principal reduction, the HAMP program administrator makes additional incentive payments to the investor. Efile These additional incentives are called “PRA Investor Incentive Payments” and are generally spread over three years. Efile The size of the PRA Investor Incentive Payments depends on the amount of principal reduced, the loan-to-value ratio at the time of the HAMP modification, and the loan’s payment history before the modification. Efile The PRA Investor Incentive Payments range from 18 to 63 percent of the principal amounts reduced. Efile For purposes of this revenue procedure, the excess of the initial PRA Forbearance Amount of a mortgage loan over the aggregate PRA Investor Incentive Payments scheduled to be paid with respect to that loan is called the “PRA Adjusted Forbearance Amount. Efile ” . Efile 08 A PRA Investor Incentive Payment is earned by the investor on each date on which the servicer reduces the unpaid principal balance of the mortgage loan by a portion of the PRA Forbearance Amount (generally, on the first three annual anniversaries of the trial period plan effective date). Efile . Efile 09 If a HAMP-PRA borrower’s early payment in full of the Non-forbearance Portion of the mortgage loan accelerates the reduction of the remaining PRA Forbearance Amount (described above in section 2. Efile 06 of this revenue procedure), the remaining PRA Investor Incentive Payments from the HAMP program administrator are also accelerated. Efile . Efile 10 If, prior to completion of the Three-year Period, a mortgage loan ceases to be in good standing because of the HAMP-PRA borrower’s payment history, then the remaining PRA Forbearance Amount is not further reduced and is due when the HAMP-PRA borrower transfers the property, the HAMP-PRA borrower refinances, or otherwise pays off the Non-forbearance Portion of the mortgage loan, or the mortgage loan matures. Efile SECTION 3. Efile BACKGROUND—APPLICABLE PROVISIONS OF LAW . Efile 01 Under § 61 of the Internal Revenue Code, except as otherwise provided in subtitle A, gross income means all income from whatever source derived, including income from discharge of indebtedness. Efile See § 61(a)(12). Efile . Efile 02 Under § 1. Efile 1001-3 of the Income Tax Regulations, if a debt instrument undergoes a significant modification, then the modification results in an exchange of the original debt instrument for the modified debt instrument. Efile In general, an agreement to change a term of a debt instrument is a modification at the time the borrower and holder enter into the agreement, even if the change in term is not immediately effective. Efile However, if the change is conditioned on reasonable closing conditions, a modification occurs on the closing date of the agreement. Efile See § 1. Efile 1001-3(c)(6). Efile . Efile 03 Under § 108(e)(10), in the case of a debt-for-debt exchange (including a deemed exchange under § 1. Efile 1001-3), the borrower is treated as having satisfied the original debt instrument with an amount of money equal to the issue price of the new debt instrument. Efile If the amount of debt satisfied in this manner exceeds that issue price, the borrower realizes discharge of indebtedness income on the exchange. Efile See also § 1. Efile 61-12(c). Efile . Efile 04 The issue price of a non-publicly traded debt instrument issued for non-publicly traded property generally reflects the amount of principal that the borrower is required to pay to the holder of the instrument. Efile If a borrower has the ability to avoid paying certain amounts (including principal) without violating the terms of the instrument, the payment schedule for the instrument is generally determined based on an assumption that the borrower will avoid any requirement to make those payments. Efile See, e. Efile g. Efile , §§ 1. Efile 1272-1(c)(5) and 1. Efile 1274-2(d). Efile . Efile 05 Under § 108(a), gross income does not include any amount that but for § 108(a) would be includible in gross income by reason of the discharge (in whole or in part) of a taxpayer’s indebtedness if (1) the indebtedness discharged is qualified principal residence indebtedness that is discharged before January 1, 2014, or (2) the discharge occurs when the taxpayer is insolvent. Efile Section 108(a)(1)(E) and 108(a)(1)(B). Efile (Although § 108 contains other exclusions as well, this revenue procedure focuses on these two exclusions because they are the most likely to apply to the greatest number of HAMP-PRA borrowers. Efile ) . Efile 06 Under §§ 108(h) and 163(h)(3)(B), qualified principal residence indebtedness is any indebtedness that is incurred by a borrower to buy, build, or substantially improve the borrower’s principal residence and is secured by that residence. Efile . Efile 07 Qualified principal residence indebtedness also includes a loan secured by the borrower’s principal residence that refinances qualified principal residence indebtedness, but only to the extent of the amount of the refinanced indebtedness. Efile See §§ 108(h) and 163(h)(3)(B)(i). Efile . Efile 08 The maximum amount of discharged indebtedness that a borrower may exclude from gross income under the qualified principal residence indebtedness exclusion is $2,000,000 ($1,000,000 for a married individual filing a separate return). Efile Under § 108(h)(4), if only part of the discharged indebtedness is qualified principal residence indebtedness, then the exclusion applies only to the amount of the discharged indebtedness that exceeds the amount of the loan (determined immediately before the discharge) that is not qualified principal residence indebtedness. Efile . Efile 09 Under § 108(a)(3), the insolvency exclusion applies to the lesser of the amount of the debt discharged or the amount by which the taxpayer is insolvent immediately before the discharge. Efile . Efile 10 Section 108(d)(3) provides that, for purposes of the insolvency exclusion, a taxpayer is insolvent to the extent that the taxpayer’s total liabilities exceed the fair market value of all of the taxpayer’s assets immediately before the discharge of indebtedness. Efile Under § 108(a)(2)(C), the qualified principal residence indebtedness exclusion takes precedence over the insolvency exclusion when both exclusions apply to discharged indebtedness, unless the taxpayer elects to apply the insolvency exclusion. Efile . Efile 11 If an amount is excluded from gross income as a discharge of qualified principal residence indebtedness, the taxpayer must reduce the basis of the taxpayer’s principal residence. Efile See § 108(h)(1). Efile If a discharged amount is excluded from gross income because the taxpayer was insolvent when the discharge occurred, the taxpayer must reduce certain tax attributes (possibly including basis). Efile See § 108(b). Efile For further discussion of income from the discharge of indebtedness, the qualified principal residence indebtedness exclusion, the insolvency exclusion, and other exclusions from gross income that may apply, see Publication 4681, Canceled Debts, Foreclosures, Repossessions, and Abandonments (for Individuals). Efile . Efile 12 Taxpayers who exclude any discharged amounts from gross income report both the exclusion and the resulting reduction in basis or other tax attributes on Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment). Efile See Form 982 instructions and Publication 4681. Efile This form is to be filed with the tax return for the taxable year in which the amount is discharged but is excluded from gross income. Efile . Efile 13 Governmental payments made to or on behalf of individuals or other persons are included within the broad definition of gross income under § 61 unless an exception applies. Efile See Notice 2003-18, 2003-1 C. Efile B. Efile 699, and Rev. Efile Rul. Efile 79-356, 1979-2 C. Efile B. Efile 28. Efile However, if disbursements are made by a governmental unit to individuals in the interest of the general welfare (that is, are generally based on individual or family need) and the disbursements do not represent compensation for services, then the amounts disbursed are excluded from the income of the recipient (general welfare exclusion). Efile See Rev. Efile Rul. Efile 2005-46, 2005-2 C. Efile B. Efile 120, and Rev. Efile Rul. Efile 75-246, 1975-1 C. Efile B. Efile 24. Efile . Efile 14 Under § 451 and § 1. Efile 451-1(a), a taxpayer that uses the cash receipts and disbursements method of accounting includes income in gross income when the taxpayer actually or constructively receives the income. Efile . Efile 15 Section 6041 requires every person engaged in a trade or business (including the United States and its agencies) to (1) file an information return (Form 1099-MISC, Miscellaneous Income, is used for this purpose) for each calendar year in which the person makes, in the course of its trade or business, payments to another person of fixed or determinable income aggregating $600 or more, and (2) furnish a copy of the information return to that other person. Efile See § 6041(a) and (d) and § 1. Efile 6041-1(a)(1) and (b). Efile . Efile 16 Section 6050P requires applicable entities (including the United States and its agencies, financial entities, and any organization a significant trade or business of which is the lending of money) to (1) file an information return (Form 1099-C, Cancellation of Debt, is used for this purpose) for each calendar year in which it discharges indebtedness of another person of $600 or more, and (2) furnish a copy of the information return to that other person. Efile See § 6050P(a)-(c) and §§ 1. Efile 6050P-1(a) and 1. Efile 6050P-2(a) and (d). Efile . Efile 17 Section 6721 imposes penalties with respect to information returns required to be filed with the Service. Efile These penalties apply in the case of a failure to timely file an information return, a failure to include all required information on the return, or the inclusion of incorrect information on the return. Efile Section 6724(d)(1) includes Forms 1099-MISC and 1099-C in the term “information return. Efile ” . Efile 18 Section 6722 imposes penalties with respect to payee statements required to be furnished to payees. Efile These penalties apply in the case of a failure to timely furnish a payee statement, a failure to include all required information on the statement, or the inclusion of incorrect information on the payee statement. Efile Section 6724(d)(2) includes in the term “payee statement” copies of Forms 1099-MISC and 1099-C that are required to be furnished to taxpayers. Efile SECTION 4. Efile FEDERAL INCOME TAX TREATMENT . Efile 01 Because a HAMP modification with a PRA principal reduction is a significant modification, it results in a deemed debt-for-debt exchange in which the HAMP-PRA borrower satisfies the old mortgage loan by issuing a new one. Efile See § 1. Efile 1001-3. Efile At the time of the modification, therefore, under § 108 and this revenue procedure, the HAMP-PRA borrower realizes discharge of indebtedness income equal to any excess of the adjusted issue price of the old mortgage loan (which was satisfied in the deemed exchange) over the issue price of the new (post-modification) mortgage loan. Efile See also § 61(a)(12) and § 1. Efile 61-12(c). Efile . Efile 02 A HAMP-PRA borrower has the ability to avoid payment of the PRA Adjusted Forbearance Amount. Efile Because the HAMP-PRA borrower has this ability, that amount should not be taken into account in determining the issue price of the new mortgage loan. Efile Because the issue price of the new mortgage loan does not include the PRA Adjusted Forbearance Amount, the PRA Adjusted Forbearance Amount contributes to the excess of the adjusted issue price of the old mortgage loan (which was satisfied in the deemed exchange) over the issue price of the new mortgage loan. Efile . Efile 03 On the other hand, the investor has not given up its right to receive the remainder of the PRA Forbearance Amount, because the HAMP program administrator is expected to make those payments on the HAMP-PRA borrower’s behalf by making the PRA Investor Incentive Payments. Efile Because the remainder of the PRA Forbearance Amount is payable in this manner, that remainder is included in the issue price of the new mortgage loan. Efile . Efile 04 The Trial Period Conditions are reasonable closing conditions that must be satisfied before the changes to the terms of the mortgage loan become permanent. Efile Therefore, for purposes of § 1. Efile 1001-3, the date of the modification is the date of the permanent modification. Efile . Efile 05 Unless an exclusion applies, the HAMP-PRA borrower includes in gross income the discharge of indebtedness income described in section 4. Efile 01 of this revenue procedure for the taxable year in which the permanent modification occurs. Efile Under certain conditions, however, section 6 of this revenue procedure permits a borrower to report the discharge of indebtedness under HAMP-PRA over the Three-year Period. Efile The qualified principal residence indebtedness exclusion under § 108(a)(1)(E) and the insolvency exclusion under § 108(a)(1)(B) are two exclusions that may apply to the discharge. Efile . Efile 06 The PRA Investor Incentive Payment is treated as a payment on the mortgage loan by the HAMP program administrator on behalf of the HAMP-PRA borrower. Efile . Efile 07 To the extent that the HAMP-PRA borrower uses the property as the HAMP-PRA borrower’s principal residence or the property is occupied by the HAMP-PRA borrower’s legal dependent, parent, or grandparent without rent being charged or collected, the HAMP-PRA borrower excludes from his or her gross income under the general welfare exclusion the PRA Investor Incentive Payments that the HAMP program administrator makes to the investor in the mortgage loan. Efile This is consistent with Rev. Efile Rul. Efile 2009-19, 2009-28 I. Efile R. Efile B. Efile 111, which addressed the treatment of Pay-for-Performance Success Payments. Efile . Efile 08 To the extent that the HAMP-PRA borrower uses the property as a rental property or holds the property vacant and available for rent, the HAMP-PRA borrower includes PRA Investor Incentive Payments in gross income. Efile If the HAMP-PRA borrower uses the cash receipts and disbursements method of accounting, then the HAMP-PRA borrower includes a PRA Investor Incentive Payment in gross income in the taxable year in which it is applied as a payment on the HAMP-PRA borrower’s mortgage loan. Efile . Efile 09 As described in section 2. Efile 09 of this revenue procedure, if a HAMP-PRA borrower pays in full the Non-forbearance Portion of the mortgage loan while the loan is in good standing and prior to completion of the Three-year Period, that payment accelerates both the reduction in the remaining PRA Forbearance Amount and the PRA Investor Incentive Payments from the HAMP program administrator. Efile To the extent that the HAMP-PRA borrower is described in section 4. Efile 07 of this revenue procedure, the HAMP-PRA borrower excludes from his or her gross income under the general welfare exclusion the accelerated PRA Investor Incentive Payments. Efile To the extent that the HAMP-PRA borrower is described in section 4. Efile 08 of this revenue procedure, the HAMP-PRA borrower includes in income in the year of the acceleration the remaining amount of the PRA Investor Incentive Payment. Efile SECTION 5. Efile INFORMATION-REPORTING OBLIGATIONS . Efile 01 Under § 6050P, the investor is required to file a Form 1099-C with respect to a borrower who realizes discharge of indebtedness of $600 or more. Efile A copy of this form is required to be furnished to the borrower. Efile . Efile 02 As stated in sections 4. Efile 01 and 4. Efile 04 of this revenue procedure, the HAMP-PRA discharge of indebtedness is realized at the time of the permanent modification of the mortgage loan. Efile . Efile 03 An investor is an applicable entity that is required under § 1. Efile 6050P-1 and this revenue procedure to issue a Form 1099-C for discharge of indebtedness. Efile Under § 1. Efile 6050P-1(b)(2)(F), the permanent modification of a mortgage loan is an identifiable event. Efile Identifiable events determine when Forms 1099-C have to be issued. Efile Thus, the Form 1099-C is issued for the calendar year in which the permanent mortgage loan modification occurs. Efile This rule under § 1. Efile 6050P-1(b)(2)(F) applies even if, under section 6 of this revenue procedure, the HAMP-PRA borrower chooses to treat the HAMP-PRA discharge as being realized at the times when the unpaid principal balance of the new mortgage loan is reduced. Efile . Efile 04 The investor (or the loan servicer acting on behalf of the investor) reports the full amount of the discharge on the Form 1099-C regardless of whether some or all of the amount is excludible from income under the qualified principal residence indebtedness exclusion, the insolvency exclusion, or any other exclusion that may apply. Efile That discharged amount will generally be the PRA Adjusted Forbearance Amount (which does not include the amounts expected to be satisfied by PRA Investor Incentive Payments). Efile . Efile 05 To the extent that PRA Investor Incentive Payments are made on behalf of a HAMP-PRA borrower who is described in section 4. Efile 07 of this revenue procedure, the PRA Investor Incentive Payments are excluded from the gross income of the HAMP-PRA borrower, and thus they are not fixed or determinable income to the HAMP-PRA borrower. Efile Under § 6041, these payments are not subject to information reporting. Efile See Notice 2011-14, 2011-11 I. Efile R. Efile B. Efile 544, 546. Efile . Efile 06 To the extent that PRA Investor Incentive Payments are made on behalf of a HAMP-PRA borrower who is described in section 4. Efile 08 of this revenue procedure, the PRA Investor Incentive Payments are includible in gross income as fixed or determinable income in the taxable year required by the HAMP-PRA borrower’s method of accounting. Efile The payment is subject to the information reporting requirements of § 6041, as described in section 3. Efile 15 of this revenue procedure. Efile Accordingly, the HAMP program administrator is required to issue a Form 1099-MISC reporting the PRA Investor Incentive Payment. Efile SECTION 6. Efile HAMP-PRA BORROWERS’ REPORTING OF DISCHARGES OF INDEBTEDNESS UNDER HAMP-PRA . Efile 01 In general. Efile The HAMP-PRA program began in the last quarter of 2010, and since that time there has been uncertainty about whether the amount of the discharge of indebtedness should be reported in the year of the permanent modification or over the Three-year Period (when the unpaid principal balance on the new mortgage loan is reduced). Efile As a result, some HAMP-PRA borrowers have been reporting the discharge of indebtedness under HAMP-PRA over the Three-year Period. Efile Given the temporary nature of the program and the issuance of this guidance after participation in the program has begun, in the interests of equitable and sound tax administration, HAMP-PRA borrowers may report discharges of indebtedness under HAMP-PRA under the rules in this section 6. Efile A HAMP-PRA borrower may choose to report discharges of indebtedness under HAMP-PRA pursuant to the rules in this section 6 only if the borrower applies the same borrower option under section 6. Efile 02 of this revenue procedure consistently to the taxable year of the permanent modification and to all subsequent taxable years. Efile Thus, a HAMP-PRA borrower may not choose a borrower option under section 6. Efile 02 of this revenue procedure if a statute of limitations has expired for any of the taxable years that are necessary for consistent application of that option. Efile . Efile 02 HAMP-PRA borrower options. Efile A HAMP-PRA borrower may treat the HAMP-PRA discharge as being realized in either of the following ways— (1) One hundred percent of the PRA Adjusted Forbearance Amount at the time of the permanent modification; or (2) One third of the PRA Adjusted Forbearance Amount on each of the first three annual anniversaries of the trial period plan effective date (described in section 2. Efile 06 of this revenue procedure), when, as required by the terms of the new mortgage loan, the servicer reduces the unpaid principal balance of the new mortgage loan. Efile If some or all of the reduction in the unpaid principal balance is accelerated (as described in section 2. Efile 06 of this revenue procedure) because the HAMP-PRA borrower prepays the Non-forbearance Portion of the mortgage loan, then the HAMP-PRA discharge represented by the amount of the reduction that was accelerated is treated as being realized at the time of the accelerated reduction. Efile . Efile 03 HAMP-PRA borrowers who choose to realize the HAMP-PRA discharge at the time of the permanent modification. Efile (1) If a HAMP-PRA borrower chooses to treat the HAMP-PRA discharge as being realized at the time of the permanent modification, then for the taxable year in which the permanent modification occurs, the HAMP-PRA borrower reports on Form 982 the amount, if any, of the discharge that is excluded from gross income and includes in gross income any remaining discharge. Efile (2) If a HAMP-PRA borrower’s mortgage loan was permanently modified under HAMP in 2010 or 2011, and if the borrower was reporting the discharge of indebtedness using the method described in section 6. Efile 02(2) of this revenue procedure, then the borrower may change to reporting the discharge of indebtedness using the method described in section 6. Efile 02(1) of this revenue procedure by filing a 2012 Form 982 with the borrower’s timely filed (with extensions) 2012 income tax return. Efile This section 6. Efile 03(2) applies only if the change to reporting the discharge using the method described in section 6. Efile 02(1) of this revenue procedure does not change the borrower’s federal income tax liability (including any change in federal income tax liability due to a change in basis or tax attributes (under § 108(h)(1) or § 108(b))) for any taxable year prior to the borrower’s 2012 taxable year. Efile To make this change, the borrower must— (i) Compute the amount of discharge of indebtedness that would be included in income under § 61(a)(12) or excluded from gross income under § 108, basing the computation of the discharge on the facts as of the year of the permanent modification; and (ii) Report on a 2012 Form 982 the reduction in basis or tax attributes (under § 108(h)(1) or § 108(b)) due to the permanent modification that the borrower would have reported on the Form 982 for the taxable year of the permanent modification, minus any reductions due to the permanent modification that the borrower actually reported on Forms 982 for taxable years prior to 2012. Efile (3) Example. Efile The following example illustrates the application of section 6. Efile 03(2) of this revenue procedure. Efile In 2010, B’s basis in B’s principal residence was $330,000. Efile In 2010, B’s mortgage loan on the principal residence is permanently modified under HAMP-PRA. Efile B realized $30,000 of cancellation of indebtedness from the permanent modification, all of which qualifies for the exclusion from income for qualified principal residence indebtedness under § 108(a)(1)(E). Efile The trial period plan effective date also fell in 2010. Efile B’s federal income tax return for 2010 was consistent with B’s reporting this discharge of indebtedness using the method described in section 6. Efile 02(2) of this revenue procedure. Efile That is, B’s 2010 return did not include income from discharge of indebtedness under HAMP-PRA, nor did the return contain a Form 982 reporting exclusion of any such discharge of indebtedness. Efile The next year, B reported on line 10(b) of the 2011 Form 982 that B filed with B’s 2011 federal income tax return a $10,000 reduction in basis in the principal residence. Efile For 2012, B chooses to change to reporting the discharge of indebtedness using the method described in section 6. Efile 02(1) of this revenue procedure. Efile Thus, B files a 2012 Form 982 with B’s timely filed (including extensions) 2012 federal income tax return, and on line 10(b) of that form, B reports a $20,000 basis reduction in the principal residence ($30,000 basis reduction that B would have excluded from income in 2010 using the method described in section 6. Efile 02(1) of this revenue procedure, minus the $10,000 basis reduction that B reported on B’s 2011 Form 982). Efile (4) If a HAMP-PRA borrower reports the entire HAMP-PRA discharge using the method described in section 6. Efile 02(1) of this revenue procedure, and if that HAMP-PRA borrower’s mortgage loan ceases to be in good standing during the Three-year Period as described in section 2. Efile 10 of this revenue procedure, then some or all of the anticipated reductions in the PRA Adjusted Forbearance Amount will not take place. Efile Because the amount of these anticipated reductions was not included in determining the issue price of the new mortgage loan that, pursuant to § 1. Efile 1001-3, the HAMP-PRA borrower is deemed to issue in satisfaction of the old mortgage loan, the issue price of the new mortgage loan was understated. Efile Under these circumstances, the discharge of indebtedness income determined as of the date of the permanent modification will have been overstated. Efile (5) The Service will not challenge a HAMP-PRA borrower who is described in section 6. Efile 03(4) of this revenue procedure and who takes the following corrective measures: (i) If a HAMP-PRA borrower included any of the discharge of indebtedness in gross income, the HAMP-PRA borrower may file an amended return that does not include the amount of the discharge of indebtedness that was previously reported as gross income but that, because of the HAMP-PRA borrower’s failure to keep the new mortgage loan in good standing, was not ultimately discharged. Efile The amended return should be for the taxable year in which the income was included (that is, the year of the permanent modification), provided the applicable statute of limitations remains open for that taxable year. Efile (ii) If the HAMP-PRA borrower did not include any of the discharge of indebtedness in gross income (that is, if the HAMP-PRA borrower excluded all of it), the HAMP-PRA borrower may file a new Form 982 that the Service will treat as superseding the earlier Form 982. Efile The new Form 982 will reflect the revised reduction in basis or in tax attributes (under § 108(h)(1) or § 108(b)). Efile The new Form 982 should be the Form 982 for the year of the permanent modification and should be filed with the return for the taxable year in which the HAMP-PRA borrower’s mortgage loan ceased to be in good standing. Efile . Efile 04 HAMP-PRA borrowers who choose to treat the HAMP-PRA discharge as being realized on the dates on which the unpaid principal balance of the mortgage loan is reduced. Efile (1) If a HAMP-PRA borrower chooses to realize the HAMP-PRA discharge at the times that the unpaid principal balance on the new mortgage loan is reduced, instead of at the time of the permanent modification, then the HAMP-PRA borrower’s federal income tax returns for the taxable year that contains the permanent modification and for the subsequent taxable years must not treat any of the discharge as being realized at the time of the permanent modification and must treat the entire HAMP-PRA discharge as being realized in the amounts—and at the times—of the reductions in the unpaid principal balance. Efile Except as described in the last sentence of this paragraph, therefore, the income tax return for the year of the permanent modification must include no gross income from—nor report on Form 982 an exclusion of—any amount of the HAMP-PRA discharge. Efile Instead, the HAMP-PRA discharge is included in gross income (or is reported on Form 982 as excluded from gross income) in the subsequent years in which the unpaid principal balance is reduced. Efile If the first such reduction occurs in the year of the permanent modification, however, then the amount of any such reduction is reflected as an inclusion or exclusion on the federal income tax return for that year. Efile (2) A HAMP-PRA borrower who has been using the method described in section 6. Efile 02(1) of this revenue procedure may change to the method described in section 6. Efile 02(2) but must comply with the consistency and open-year requirements described in section 6. Efile 01 of this revenue procedure. Efile SECTION 7. Efile PENALTY RELIEF FOR 2012 . Efile 01 The Service will not assert penalties under § 6721 or § 6722 against an investor for failing to timely file and furnish a 2012 Form 1099-C as required by section 5. Efile 03 through 5. Efile 04 and section 8. Efile 02 of this revenue procedure with respect to discharge of indebtedness resulting from HAMP-PRA permanent modifications that take place during calendar year 2012 if the following requirements are satisfied: (1) Not later than February 28, 2013, a statement is sent to the HAMP-PRA borrower containing the following: (a) The HAMP-PRA borrower’s name, address, and taxpayer identification number; and (b) The date and amount of the discharge of indebtedness (as described in sections 4. Efile 01 through 4. Efile 04 of this revenue procedure) that is required to be reported for 2012. Efile (2) Not later than March 28, 2013, a statement is sent to the Service. Efile It must be in the form of a single statement that separately lists for each HAMP-PRA borrower the information specified in section 7. Efile 01(1) of this revenue procedure. Efile The statement should be sent to the Service at the following address: Internal Revenue Service Center Stop 6728AUSC Austin, TX 73301 . Efile 02 The Service will not assert penalties under § 6721 or § 6722 with respect to any Forms 1099-MISC for 2012 that sections 5. Efile 06 and 8. Efile 02 of this revenue procedure require to be filed with the Service and furnished to taxpayers. Efile . Efile 03 Section 8. Efile 03 and 8. Efile 04 of this revenue procedure, below, describes penalty relief regarding Forms 1099-C and 1099-MISC for 2010 and 2011. Efile SECTION 8. Efile SCOPE AND EFFECTIVE DATE . Efile 01 This revenue procedure applies to all borrowers, investors, and servicers who participate, or have participated, in the HAMP-PRA, regardless of when the permanent modification occurs. Efile . Efile 02 Section 5 of this revenue procedure is effective for Forms 1099-C and 1099-MISC due or filed after January 24, 2013. Efile . Efile 03 Because of the effective date in section 8. Efile 02 of this revenue procedure, an investor is not subject to penalties under § 6721 or § 6722 on the grounds that the investor failed to timely file and furnish a 2010 or 2011 Form 1099-C as described in section 5. Efile 03 through 5. Efile 04 of this revenue procedure (or on the grounds that the investor filed or furnished a 2010 or 2011 Form 1099-C that is inconsistent with section 5. Efile 03 through 5. Efile 04 of this revenue procedure), provided that the investor demonstrates a good faith attempt to comply with the requirements of § 6050P and that the failure was not due to willful neglect. Efile . Efile 04 Because of the effective date in section 8. Efile 02 of this revenue procedure, the Service will not assert penalties under § 6721 or § 6722 on the grounds of a failure to timely file and furnish a 2010 or 2011 Form 1099-MISC, as described in section 5. Efile 06 of this revenue procedure. Efile SECTION 9. Efile DRAFTING INFORMATION The principal authors of this revenue procedure are Ronald J. Efile Goldstein of the Office of Chief Counsel (Procedure and Administration); Shareen S. Efile Pflanz and Sheldon A. Efile Iskow of the Office of Chief Counsel (Income Tax and Accounting); and Andrea M. Efile Hoffenson of the Office of Chief Counsel (Financial Institutions and Products). Efile For further information regarding this revenue procedure, contact Procedure and Administration branch 1 at (202) 622-4910, Income Tax and Accounting branch 4 at (202) 622-4920, or Financial Institutions and Products branch 1 at (202) 622-3920 (not toll-free calls). Efile Prev  Up  Next   Home   More Internal Revenue Bulletins