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Ez 1040 Form

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Ez 1040 Form

Ez 1040 form 23. Ez 1040 form   Interest Expense Table of Contents Introduction Useful Items - You may want to see: Home Mortgage InterestAmount Deductible Points Mortgage Insurance Premiums Form 1098, Mortgage Interest Statement Investment InterestInvestment Property Allocation of Interest Expense Limit on Deduction Items You Cannot DeductPersonal Interest Allocation of Interest How To ReportMore than one borrower. Ez 1040 form Mortgage proceeds used for business or investment. Ez 1040 form Introduction This chapter discusses what interest expenses you can deduct. Ez 1040 form Interest is the amount you pay for the use of borrowed money. Ez 1040 form The following are types of interest you can deduct as itemized deductions on Schedule A (Form 1040). Ez 1040 form Home mortgage interest, including certain points and mortgage insurance premiums. Ez 1040 form Investment interest. Ez 1040 form This chapter explains these deductions. Ez 1040 form It also explains where to deduct other types of interest and lists some types of interest you cannot deduct. Ez 1040 form Use Table 23-1 to find out where to get more information on various types of interest, including investment interest. Ez 1040 form Useful Items - You may want to see: Publication 936 Home Mortgage Interest Deduction 550 Investment Income and Expenses Home Mortgage Interest Generally, home mortgage interest is any interest you pay on a loan secured by your home (main home or a second home). Ez 1040 form The loan may be a mortgage to buy your home, a second mortgage, a line of credit, or a home equity loan. Ez 1040 form You can deduct home mortgage interest if all the following conditions are met. Ez 1040 form You file Form 1040 and itemize deductions on Schedule A (Form 1040). Ez 1040 form The mortgage is a secured debt on a qualified home in which you have an ownership interest. Ez 1040 form (Generally, your mortgage is a secured debt if you put your home up as collateral to protect the interest of the lender. Ez 1040 form The term “qualified home” means your main home or second home. Ez 1040 form For details, see Publication 936. Ez 1040 form )  Both you and the lender must intend that the loan be repaid. Ez 1040 form Amount Deductible In most cases, you can deduct all of your home mortgage interest. Ez 1040 form How much you can deduct depends on the date of the mortgage, the amount of the mortgage, and how you use the mortgage proceeds. Ez 1040 form Fully deductible interest. Ez 1040 form   If all of your mortgages fit into one or more of the following three categories at all times during the year, you can deduct all of the interest on those mortgages. Ez 1040 form (If any one mortgage fits into more than one category, add the debt that fits in each category to your other debt in the same category. Ez 1040 form )   The three categories are as follows: Mortgages you took out on or before October 13, 1987 (called grandfathered debt). Ez 1040 form Mortgages you took out after October 13, 1987, to buy, build, or improve your home (called home acquisition debt), but only if throughout 2013 these mortgages plus any grandfathered debt totaled $1 million or less ($500,000 or less if married filing separately). Ez 1040 form Mortgages you took out after October 13, 1987, other than to buy, build, or improve your home (called home equity debt), but only if throughout 2013 these mortgages totaled $100,000 or less ($50,000 or less if married filing separately) and totaled no more than the fair market value of your home reduced by (1) and (2). Ez 1040 form The dollar limits for the second and third categories apply to the combined mortgages on your main home and second home. Ez 1040 form   See Part II of Publication 936 for more detailed definitions of grandfathered, home acquisition, and home equity debt. Ez 1040 form    You can use Figure 23-A to check whether your home mortgage interest is fully deductible. Ez 1040 form Figure 23-A. Ez 1040 form Is My Home Mortgage Interest Fully Deductible? Please click here for the text description of the image. Ez 1040 form Figure 23-A. Ez 1040 form Is My Interest Fully Deductible? Limits on deduction. Ez 1040 form   You cannot fully deduct interest on a mortgage that does not fit into any of the three categories listed earlier. Ez 1040 form If this applies to you, see Part II of Publication 936 to figure the amount of interest you can deduct. Ez 1040 form Special Situations This section describes certain items that can be included as home mortgage interest and others that cannot. Ez 1040 form It also describes certain special situations that may affect your deduction. Ez 1040 form Late payment charge on mortgage payment. Ez 1040 form   You can deduct as home mortgage interest a late payment charge if it was not for a specific service performed in connection with your mortgage loan. Ez 1040 form Mortgage prepayment penalty. Ez 1040 form   If you pay off your home mortgage early, you may have to pay a penalty. Ez 1040 form You can deduct that penalty as home mortgage interest provided the penalty is not for a specific service performed or cost incurred in connection with your mortgage loan. Ez 1040 form Sale of home. Ez 1040 form   If you sell your home, you can deduct your home mortgage interest (subject to any limits that apply) paid up to, but not including, the date of sale. Ez 1040 form Example. Ez 1040 form John and Peggy Harris sold their home on May 7. Ez 1040 form Through April 30, they made home mortgage interest payments of $1,220. Ez 1040 form The settlement sheet for the sale of the home showed $50 interest for the 6-day period in May up to, but not including, the date of sale. Ez 1040 form Their mortgage interest deduction is $1,270 ($1,220 + $50). Ez 1040 form Prepaid interest. Ez 1040 form   If you pay interest in advance for a period that goes beyond the end of the tax year, you must spread this interest over the tax years to which it applies. Ez 1040 form You can deduct in each year only the interest that qualifies as home mortgage interest for that year. Ez 1040 form However, there is an exception that applies to points, discussed later. Ez 1040 form Mortgage interest credit. Ez 1040 form   You may be able to claim a mortgage interest credit if you were issued a mortgage credit certificate (MCC) by a state or local government. Ez 1040 form Figure the credit on Form 8396, Mortgage Interest Credit. Ez 1040 form If you take this credit, you must reduce your mortgage interest deduction by the amount of the credit. Ez 1040 form   For more information on the credit, see chapter 37. Ez 1040 form Ministers' and military housing allowance. Ez 1040 form   If you are a minister or a member of the uniformed services and receive a housing allowance that is not taxable, you can still deduct your home mortgage interest. Ez 1040 form Hardest Hit Fund and Emergency Homeowners' Loan Programs. Ez 1040 form   You can use a special method to compute your deduction for mortgage interest and real estate taxes on your main home if you meet the following two conditions. Ez 1040 form You received assistance under: A State Housing Finance Agency (State HFA) Hardest Hit Fund program in which program payments could be used to pay mortgage interest, or An Emergency Homeowners' Loan Program administered by the Department of Housing and Urban Development (HUD) or a state. Ez 1040 form You meet the rules to deduct all of the mortgage interest on your loan and all of the real estate taxes on your main home. Ez 1040 form If you meet these tests, then you can deduct all of the payments you actually made during the year to your mortgage servicer, the State HFA, or HUD on the home mortgage (including the amount shown on box 3 of Form 1098-MA, Mortgage Assistance Payments), but not more than the sum of the amounts shown on Form 1098, Mortgage Interest Statement, in box 1 (mortgage interest received from payer(s) / borrower(s)), box 4 (mortgage insurance premiums) and box 5 (real property taxes). Ez 1040 form However, you are not required to use this special method to compute your deduction for mortgage interest and real estate taxes on your main home. Ez 1040 form Mortgage assistance payments under section 235 of the National Housing Act. Ez 1040 form   If you qualify for mortgage assistance payments for lower-income families under section 235 of the National Housing Act, part or all of the interest on your mortgage may be paid for you. Ez 1040 form You cannot deduct the interest that is paid for you. Ez 1040 form No other effect on taxes. Ez 1040 form   Do not include these mortgage assistance payments in your income. Ez 1040 form Also, do not use these payments to reduce other deductions, such as real estate taxes. Ez 1040 form Divorced or separated individuals. Ez 1040 form   If a divorce or separation agreement requires you or your spouse or former spouse to pay home mortgage interest on a home owned by both of you, the payment of interest may be alimony. Ez 1040 form See the discussion of Payments for jointly-owned home in chapter 18. Ez 1040 form Redeemable ground rents. Ez 1040 form   If you make annual or periodic rental payments on a redeemable ground rent, you can deduct them as mortgage interest. Ez 1040 form   Payments made to end the lease and to buy the lessor's entire interest in the land are not deductible as mortgage interest. Ez 1040 form For more information, see Publication 936. Ez 1040 form Nonredeemable ground rents. Ez 1040 form   Payments on a nonredeemable ground rent are not mortgage interest. Ez 1040 form You can deduct them as rent if they are a business expense or if they are for rental property. Ez 1040 form Reverse mortgages. Ez 1040 form   A reverse mortgage is a loan where the lender pays you (in a lump sum, a monthly advance, a line of credit, or a combination of all three) while you continue to live in your home. Ez 1040 form With a reverse mortgage, you retain title to your home. Ez 1040 form Depending on the plan, your reverse mortgage becomes due with interest when you move, sell your home, reach the end of a pre-selected loan period, or die. Ez 1040 form Because reverse mortgages are considered loan advances and not income, the amount you receive is not taxable. Ez 1040 form Any interest (including original issue discount) accrued on a reverse mortgage is not deductible until the loan is paid in full. Ez 1040 form Your deduction may be limited because a reverse mortgage loan generally is subject to the limit on Home Equity Debt discussed in Publication 936. Ez 1040 form Rental payments. Ez 1040 form   If you live in a house before final settlement on the purchase, any payments you make for that period are rent and not interest. Ez 1040 form This is true even if the settlement papers call them interest. Ez 1040 form You cannot deduct these payments as home mortgage interest. Ez 1040 form Mortgage proceeds invested in tax-exempt securities. Ez 1040 form   You cannot deduct the home mortgage interest on grandfathered debt or home equity debt if you used the proceeds of the mortgage to buy securities or certificates that produce tax-free income. Ez 1040 form “Grandfathered debt” and “home equity debt” are defined earlier under Amount Deductible. Ez 1040 form Refunds of interest. Ez 1040 form   If you receive a refund of interest in the same tax year you paid it, you must reduce your interest expense by the amount refunded to you. Ez 1040 form If you receive a refund of interest you deducted in an earlier year, you generally must include the refund in income in the year you receive it. Ez 1040 form However, you need to include it only up to the amount of the deduction that reduced your tax in the earlier year. Ez 1040 form This is true whether the interest overcharge was refunded to you or was used to reduce the outstanding principal on your mortgage. Ez 1040 form    If you received a refund of interest you overpaid in an earlier year, you generally will receive a Form 1098, Mortgage Interest Statement, showing the refund in box 3. Ez 1040 form For information about Form 1098, see Form 1098, Mortgage Interest Statement , later. Ez 1040 form   For more information on how to treat refunds of interest deducted in earlier years, see Recoveries in chapter 12. Ez 1040 form Points The term “points” is used to describe certain charges paid, or treated as paid, by a borrower to obtain a home mortgage. Ez 1040 form Points may also be called loan origination fees, maximum loan charges, loan discount, or discount points. Ez 1040 form A borrower is treated as paying any points that a home seller pays for the borrower's mortgage. Ez 1040 form See Points paid by the seller , later. Ez 1040 form General Rule You generally cannot deduct the full amount of points in the year paid. Ez 1040 form Because they are prepaid interest, you generally deduct them ratably over the life (term) of the mortgage. Ez 1040 form See Deduction Allowed Ratably , next. Ez 1040 form For exceptions to the general rule, see Deduction Allowed in Year Paid , later. Ez 1040 form Deduction Allowed Ratably If you do not meet the tests listed under Deduction Allowed in Year Paid , later, the loan is not a home improvement loan, or you choose not to deduct your points in full in the year paid, you can deduct the points ratably (equally) over the life of the loan if you meet all the following tests. Ez 1040 form You use the cash method of accounting. Ez 1040 form This means you report income in the year you receive it and deduct expenses in the year you pay them. Ez 1040 form Most individuals use this method. Ez 1040 form Your loan is secured by a home. Ez 1040 form (The home does not need to be your main home. Ez 1040 form ) Your loan period is not more than 30 years. Ez 1040 form If your loan period is more than 10 years, the terms of your loan are the same as other loans offered in your area for the same or longer period. Ez 1040 form Either your loan amount is $250,000 or less, or the number of points is not more than: 4, if your loan period is 15 years or less, or 6, if your loan period is more than 15 years. Ez 1040 form Deduction Allowed in Year Paid You can fully deduct points in the year paid if you meet all the following tests. Ez 1040 form (You can use Figure 23-B as a quick guide to see whether your points are fully deductible in the year paid. Ez 1040 form ) Your loan is secured by your main home. Ez 1040 form (Your main home is the one you ordinarily live in most of the time. Ez 1040 form ) Paying points is an established business practice in the area where the loan was made. Ez 1040 form The points paid were not more than the points generally charged in that area. Ez 1040 form You use the cash method of accounting. Ez 1040 form This means you report income in the year you receive it and deduct expenses in the year you pay them. Ez 1040 form (If you want more information about this method, see Accounting Methods in chapter 1. Ez 1040 form ) The points were not paid in place of amounts that ordinarily are stated separately on the settlement statement, such as appraisal fees, inspection fees, title fees, attorney fees, and property taxes. Ez 1040 form The funds you provided at or before closing, plus any points the seller paid, were at least as much as the points charged. Ez 1040 form The funds you provided are not required to have been applied to the points. Ez 1040 form They can include a down payment, an escrow deposit, earnest money, and other funds you paid at or before closing for any purpose. Ez 1040 form You cannot have borrowed these funds from your lender or mortgage broker. Ez 1040 form You use your loan to buy or build your main home. Ez 1040 form The points were computed as a percentage of the principal amount of the mortgage. Ez 1040 form The amount is clearly shown on the settlement statement (such as the Settlement Statement, Form HUD-1) as points charged for the mortgage. Ez 1040 form The points may be shown as paid from either your funds or the seller's. Ez 1040 form Figure 23-B. Ez 1040 form Are My Points Fully Deductible This Year? Please click here for the text description of the image. Ez 1040 form Figure 23-B. Ez 1040 form Are My Points Fully Deductible This Year? Note. Ez 1040 form If you meet all of these tests, you can choose to either fully deduct the points in the year paid, or deduct them over the life of the loan. Ez 1040 form Home improvement loan. Ez 1040 form   You can also fully deduct in the year paid points paid on a loan to improve your main home, if tests (1) through (6) are met. Ez 1040 form Second home. Ez 1040 form You cannot fully deduct in the year paid points you pay on loans secured by your second home. Ez 1040 form You can deduct these points only over the life of the loan. Ez 1040 form Refinancing. Ez 1040 form   Generally, points you pay to refinance a mortgage are not deductible in full in the year you pay them. Ez 1040 form This is true even if the new mortgage is secured by your main home. Ez 1040 form   However, if you use part of the refinanced mortgage proceeds to improve your main home and you meet the first 6 tests listed under Deduction Allowed in Year Paid , earlier, you can fully deduct the part of the points related to the improvement in the year you paid them with your own funds. Ez 1040 form You can deduct the rest of the points over the life of the loan. Ez 1040 form Example 1. Ez 1040 form In 1998, Bill Fields got a mortgage to buy a home. Ez 1040 form In 2013, Bill refinanced that mortgage with a 15-year $100,000 mortgage loan. Ez 1040 form The mortgage is secured by his home. Ez 1040 form To get the new loan, he had to pay three points ($3,000). Ez 1040 form Two points ($2,000) were for prepaid interest, and one point ($1,000) was charged for services, in place of amounts that ordinarily are stated separately on the settlement statement. Ez 1040 form Bill paid the points out of his private funds, rather than out of the proceeds of the new loan. Ez 1040 form The payment of points is an established practice in the area, and the points charged are not more than the amount generally charged there. Ez 1040 form Bill's first payment on the new loan was due July 1. Ez 1040 form He made six payments on the loan in 2013 and is a cash basis taxpayer. Ez 1040 form Bill used the funds from the new mortgage to repay his existing mortgage. Ez 1040 form Although the new mortgage loan was for Bill's continued ownership of his main home, it was not for the purchase or improvement of that home. Ez 1040 form He cannot deduct all of the points in 2013. Ez 1040 form He can deduct two points ($2,000) ratably over the life of the loan. Ez 1040 form He deducts $67 [($2,000 ÷ 180 months) × 6 payments] of the points in 2013. Ez 1040 form The other point ($1,000) was a fee for services and is not deductible. Ez 1040 form Example 2. Ez 1040 form The facts are the same as in Example 1, except that Bill used $25,000 of the loan proceeds to improve his home and $75,000 to repay his existing mortgage. Ez 1040 form Bill deducts 25% ($25,000 ÷ $100,000) of the points ($2,000) in 2013. Ez 1040 form His deduction is $500 ($2,000 × 25%). Ez 1040 form Bill also deducts the ratable part of the remaining $1,500 ($2,000 − $500) that must be spread over the life of the loan. Ez 1040 form This is $50 [($1,500 ÷ 180 months) × 6 payments] in 2013. Ez 1040 form The total amount Bill deducts in 2013 is $550 ($500 + $50). Ez 1040 form Special Situations This section describes certain special situations that may affect your deduction of points. Ez 1040 form Original issue discount. Ez 1040 form   If you do not qualify to either deduct the points in the year paid or deduct them ratably over the life of the loan, or if you choose not to use either of these methods, the points reduce the issue price of the loan. Ez 1040 form This reduction results in original issue discount, which is discussed in chapter 4 of Publication 535. Ez 1040 form Amounts charged for services. Ez 1040 form   Amounts charged by the lender for specific services connected to the loan are not interest. Ez 1040 form Examples of these charges are: Appraisal fees, Notary fees, and Preparation costs for the mortgage note or deed of trust. Ez 1040 form You cannot deduct these amounts as points either in the year paid or over the life of the mortgage. Ez 1040 form Points paid by the seller. Ez 1040 form   The term “points” includes loan placement fees that the seller pays to the lender to arrange financing for the buyer. Ez 1040 form Treatment by seller. Ez 1040 form   The seller cannot deduct these fees as interest. Ez 1040 form But they are a selling expense that reduces the amount realized by the seller. Ez 1040 form See chapter 15 for information on selling your home. Ez 1040 form Treatment by buyer. Ez 1040 form    The buyer reduces the basis of the home by the amount of the seller-paid points and treats the points as if he or she had paid them. Ez 1040 form If all the tests under Deduction Allowed in Year Paid , earlier, are met, the buyer can deduct the points in the year paid. Ez 1040 form If any of those tests are not met, the buyer deducts the points over the life of the loan. Ez 1040 form   For information about basis, see chapter 13. Ez 1040 form Funds provided are less than points. Ez 1040 form   If you meet all the tests in Deduction Allowed in Year Paid , earlier, except that the funds you provided were less than the points charged to you (test (6)), you can deduct the points in the year paid, up to the amount of funds you provided. Ez 1040 form In addition, you can deduct any points paid by the seller. Ez 1040 form Example 1. Ez 1040 form When you took out a $100,000 mortgage loan to buy your home in December, you were charged one point ($1,000). Ez 1040 form You meet all the tests for deducting points in the year paid, except the only funds you provided were a $750 down payment. Ez 1040 form Of the $1,000 charged for points, you can deduct $750 in the year paid. Ez 1040 form You spread the remaining $250 over the life of the mortgage. Ez 1040 form Example 2. Ez 1040 form The facts are the same as in Example 1, except that the person who sold you your home also paid one point ($1,000) to help you get your mortgage. Ez 1040 form In the year paid, you can deduct $1,750 ($750 of the amount you were charged plus the $1,000 paid by the seller). Ez 1040 form You spread the remaining $250 over the life of the mortgage. Ez 1040 form You must reduce the basis of your home by the $1,000 paid by the seller. Ez 1040 form Excess points. Ez 1040 form   If you meet all the tests in Deduction Allowed in Year Paid , earlier, except that the points paid were more than generally paid in your area (test (3)), you deduct in the year paid only the points that are generally charged. Ez 1040 form You must spread any additional points over the life of the mortgage. Ez 1040 form Mortgage ending early. Ez 1040 form   If you spread your deduction for points over the life of the mortgage, you can deduct any remaining balance in the year the mortgage ends. Ez 1040 form However, if you refinance the mortgage with the same lender, you cannot deduct any remaining balance of spread points. Ez 1040 form Instead, deduct the remaining balance over the term of the new loan. Ez 1040 form    A mortgage may end early due to a prepayment, refinancing, foreclosure, or similar event. Ez 1040 form Example. Ez 1040 form Dan paid $3,000 in points in 2002 that he had to spread out over the 15-year life of the mortgage. Ez 1040 form He deducts $200 points per year. Ez 1040 form Through 2012, Dan has deducted $2,200 of the points. Ez 1040 form Dan prepaid his mortgage in full in 2013. Ez 1040 form He can deduct the remaining $800 of points in 2013. Ez 1040 form Limits on deduction. Ez 1040 form   You cannot fully deduct points paid on a mortgage unless the mortgage fits into one of the categories listed earlier under Fully deductible interest . Ez 1040 form See Publication 936 for details. Ez 1040 form Mortgage Insurance Premiums You can treat amounts you paid during 2013 for qualified mortgage insurance as home mortgage interest. Ez 1040 form The insurance must be in connection with home acquisition debt and the insurance contract must have been issued after 2006. Ez 1040 form Qualified mortgage insurance. Ez 1040 form   Qualified mortgage insurance is mortgage insurance provided by the Department of Veterans Affairs, the Federal Housing Administration, or the Rural Housing Service, and private mortgage insurance (as defined in section 2 of the Homeowners Protection Act of 1998 as in effect on December 20, 2006). Ez 1040 form   Mortgage insurance provided by the Department of Veterans Affairs is commonly known as a funding fee. Ez 1040 form If provided by the Rural Housing Service, it is commonly known as a guarantee fee. Ez 1040 form These fees can be deducted fully in 2013 if the mortgage insurance contract was issued in 2013. Ez 1040 form Contact the mortgage insurance issuer to determine the deductible amount if it is not reported in box 4 of Form 1098. Ez 1040 form Special rules for prepaid mortgage insurance. Ez 1040 form   Generally, if you paid premiums for qualified mortgage insurance that are allocable to periods after the close of the tax year, such premiums are treated as paid in the period to which they are allocated. Ez 1040 form You must allocate the premiums over the shorter of the stated term of the mortgage or 84 months, beginning with the month the insurance was obtained. Ez 1040 form No deduction is allowed for the unamortized balance if the mortgage is satisfied before its term. Ez 1040 form This paragraph does not apply to qualified mortgage insurance provided by the Department of Veterans Affairs or the Rural Housing Service. Ez 1040 form See the Example below. Ez 1040 form Example. Ez 1040 form Ryan purchased a home in May of 2012 and financed the home with a 15-year mortgage. Ez 1040 form Ryan also prepaid all of the $9,240 in private mortgage insurance required at the time of closing in May. Ez 1040 form Since the $9,240 in private mortgage insurance is allocable to periods after 2012, Ryan must allocate the $9,240 over the shorter of the life of the mortgage or 84 months. Ez 1040 form Ryan's adjusted gross income (AGI) for 2012 is $76,000. Ez 1040 form Ryan can deduct $880 ($9,240 ÷ 84 × 8 months) for qualified mortgage insurance premiums in 2012. Ez 1040 form For 2013, Ryan can deduct $1,320 ($9,240 ÷ 84 × 12 months) if his AGI is $100,000 or less. Ez 1040 form In this example, the mortgage insurance premiums are allocated over 84 months, which is shorter than the life of the mortgage of 15 years (180 months). Ez 1040 form Limit on deduction. Ez 1040 form   If your adjusted gross income on Form 1040, line 38, is more than $100,000 ($50,000 if your filing status is married filing separately), the amount of your mortgage insurance premiums that are otherwise deductible is reduced and may be eliminated. Ez 1040 form See Line 13 in the instructions for Schedule A (Form 1040) and complete the Mortgage Insurance Premiums Deduction Worksheet to figure the amount you can deduct. Ez 1040 form If your adjusted gross income is more than $109,000 ($54,500 if married filing separately), you cannot deduct your mortgage insurance premiums. Ez 1040 form Form 1098, Mortgage Interest Statement If you paid $600 or more of mortgage interest (including certain points and mortgage insurance premiums) during the year on any one mortgage, you generally will receive a Form 1098 or a similar statement from the mortgage holder. Ez 1040 form You will receive the statement if you pay interest to a person (including a financial institution or a cooperative housing corporation) in the course of that person's trade or business. Ez 1040 form A governmental unit is a person for purposes of furnishing the statement. Ez 1040 form The statement for each year should be sent to you by January 31 of the following year. Ez 1040 form A copy of this form will also be sent to the IRS. Ez 1040 form The statement will show the total interest you paid during the year, any mortgage insurance premiums you paid, and if you purchased a main home during the year, it also will show the deductible points paid during the year, including seller-paid points. Ez 1040 form However, it should not show any interest that was paid for you by a government agency. Ez 1040 form As a general rule, Form 1098 will include only points that you can fully deduct in the year paid. Ez 1040 form However, certain points not included on Form 1098 also may be deductible, either in the year paid or over the life of the loan. Ez 1040 form See Points , earlier, to determine whether you can deduct points not shown on Form 1098. Ez 1040 form Prepaid interest on Form 1098. Ez 1040 form   If you prepaid interest in 2013 that accrued in full by January 15, 2014, this prepaid interest may be included in box 1 of Form 1098. Ez 1040 form However, you cannot deduct the prepaid amount for January 2014 in 2013. Ez 1040 form (See Prepaid interest , earlier. Ez 1040 form ) You will have to figure the interest that accrued for 2014 and subtract it from the amount in box 1. Ez 1040 form You will include the interest for January 2014 with the other interest you pay for 2014. Ez 1040 form See How To Report , later. Ez 1040 form Refunded interest. Ez 1040 form   If you received a refund of mortgage interest you overpaid in an earlier year, you generally will receive a Form 1098 showing the refund in box 3. Ez 1040 form See Refunds of interest , earlier. Ez 1040 form Mortgage insurance premiums. Ez 1040 form   The amount of mortgage insurance premiums you paid during 2013 may be shown in box 4 of Form 1098. Ez 1040 form See Mortgage Insurance Premiums, earlier. Ez 1040 form Investment Interest This section discusses interest expenses you may be able to deduct as an investor. Ez 1040 form If you borrow money to buy property you hold for investment, the interest you pay is investment interest. Ez 1040 form You can deduct investment interest subject to the limit discussed later. Ez 1040 form However, you cannot deduct interest you incurred to produce tax-exempt income. Ez 1040 form Nor can you deduct interest expenses on straddles. Ez 1040 form Investment interest does not include any qualified home mortgage interest or any interest taken into account in computing income or loss from a passive activity. Ez 1040 form Investment Property Property held for investment includes property that produces interest, dividends, annuities, or royalties not derived in the ordinary course of a trade or business. Ez 1040 form It also includes property that produces gain or loss (not derived in the ordinary course of a trade or business) from the sale or trade of property producing these types of income or held for investment (other than an interest in a passive activity). Ez 1040 form Investment property also includes an interest in a trade or business activity in which you did not materially participate (other than a passive activity). Ez 1040 form Partners, shareholders, and beneficiaries. Ez 1040 form   To determine your investment interest, combine your share of investment interest from a partnership, S corporation, estate, or trust with your other investment interest. Ez 1040 form Allocation of Interest Expense If you borrow money for business or personal purposes as well as for investment, you must allocate the debt among those purposes. Ez 1040 form Only the interest expense on the part of the debt used for investment purposes is treated as investment interest. Ez 1040 form The allocation is not affected by the use of property that secures the debt. Ez 1040 form Limit on Deduction Generally, your deduction for investment interest expense is limited to the amount of your net investment income. Ez 1040 form You can carry over the amount of investment interest that you could not deduct because of this limit to the next tax year. Ez 1040 form The interest carried over is treated as investment interest paid or accrued in that next year. Ez 1040 form You can carry over disallowed investment interest to the next tax year even if it is more than your taxable income in the year the interest was paid or accrued. Ez 1040 form Net Investment Income Determine the amount of your net investment income by subtracting your investment expenses (other than interest expense) from your investment income. Ez 1040 form Investment income. Ez 1040 form    This generally includes your gross income from property held for investment (such as interest, dividends, annuities, and royalties). Ez 1040 form Investment income does not include Alaska Permanent Fund dividends. Ez 1040 form It also does not include qualified dividends or net capital gain unless you choose to include them. Ez 1040 form Choosing to include qualified dividends. Ez 1040 form   Investment income generally does not include qualified dividends, discussed in chapter 8. Ez 1040 form However, you can choose to include all or part of your qualified dividends in investment income. Ez 1040 form   You make this choice by completing Form 4952, line 4g, according to its instructions. Ez 1040 form   If you choose to include any amount of your qualified dividends in investment income, you must reduce your qualified dividends that are eligible for the lower capital gains tax rates by the same amount. Ez 1040 form Choosing to include net capital gain. Ez 1040 form   Investment income generally does not include net capital gain from disposing of investment property (including capital gain distributions from mutual funds). Ez 1040 form However, you can choose to include all or part of your net capital gain in investment income. Ez 1040 form    You make this choice by completing Form 4952, line 4g, according to its instructions. Ez 1040 form   If you choose to include any amount of your net capital gain in investment income, you must reduce your net capital gain that is eligible for the lower capital gains tax rates by the same amount. Ez 1040 form    Before making either choice, consider the overall effect on your tax liability. Ez 1040 form Compare your tax if you make one or both of these choices with your tax if you do not. Ez 1040 form Investment income of child reported on parent's return. Ez 1040 form    Investment income includes the part of your child's interest and dividend income that you choose to report on your return. Ez 1040 form If the child does not have qualified dividends, Alaska Permanent Fund dividends, or capital gain distributions, this is the amount on line 6 of Form 8814, Parents' Election To Report Child's Interest and Dividends. Ez 1040 form Child's qualified dividends. Ez 1040 form   If part of the amount you report is your child's qualified dividends, that part (which is reported on Form 1040, line 9b) generally does not count as investment income. Ez 1040 form However, you can choose to include all or part of it in investment income, as explained under Choosing to include qualified dividends , earlier. Ez 1040 form   Your investment income also includes the amount on Form 8814, line 12 (or, if applicable, the reduced amount figured next under Child's Alaska Permanent Fund dividends). Ez 1040 form Child's Alaska Permanent Fund dividends. Ez 1040 form   If part of the amount you report is your child's Alaska Permanent Fund dividends, that part does not count as investment income. Ez 1040 form To figure the amount of your child's income that you can consider your investment income, start with the amount on Form 8814, line 6. Ez 1040 form Multiply that amount by a percentage that is equal to the Alaska Permanent Fund dividends divided by the total amount on Form 8814, line 4. Ez 1040 form Subtract the result from the amount on Form 8814, line 12. Ez 1040 form Child's capital gain distributions. Ez 1040 form    If part of the amount you report is your child's capital gain distributions, that part (which is reported on Schedule D, line 13, or Form 1040, line 13) generally does not count as investment income. Ez 1040 form However, you can choose to include all or part of it in investment income, as explained in Choosing to include net capital gain , earlier. Ez 1040 form   Your investment income also includes the amount on Form 8814, line 12 (or, if applicable, the reduced amount figured under Child's Alaska Permanent Fund dividends , earlier). Ez 1040 form Investment expenses. Ez 1040 form   Investment expenses are your allowed deductions (other than interest expense) directly connected with the production of investment income. Ez 1040 form Investment expenses that are included as a miscellaneous itemized deduction on Schedule A (Form 1040) are allowable deductions after applying the 2% limit that applies to miscellaneous itemized deductions. Ez 1040 form Use the smaller of: The investment expenses included on Schedule A (Form 1040), line 23, or The amount on Schedule A, line 27. Ez 1040 form Losses from passive activities. Ez 1040 form   Income or expenses that you used in computing income or loss from a passive activity are not included in determining your investment income or investment expenses (including investment interest expense). Ez 1040 form See Publication 925, Passive Activity and At-Risk Rules, for information about passive activities. Ez 1040 form Form 4952 Use Form 4952, Investment Interest Expense Deduction, to figure your deduction for investment interest. Ez 1040 form Exception to use of Form 4952. Ez 1040 form   You do not have to complete Form 4952 or attach it to your return if you meet all of the following tests. Ez 1040 form Your investment interest expense is not more than your investment income from interest and ordinary dividends minus any qualified dividends. Ez 1040 form You do not have any other deductible investment expenses. Ez 1040 form You have no carryover of investment interest expense from 2012. Ez 1040 form If you meet all of these tests, you can deduct all of your investment interest. Ez 1040 form More Information For more information on investment interest, see Interest Expenses in chapter 3 of Publication 550. Ez 1040 form Items You Cannot Deduct Some interest payments are not deductible. Ez 1040 form Certain expenses similar to interest also are not deductible. Ez 1040 form Nondeductible expenses include the following items. Ez 1040 form Personal interest (discussed later). Ez 1040 form Service charges (however, see Other Expenses (Line 23) in chapter 28). Ez 1040 form Annual fees for credit cards. Ez 1040 form Loan fees. Ez 1040 form Credit investigation fees. Ez 1040 form Interest to purchase or carry tax-exempt securities. Ez 1040 form Penalties. Ez 1040 form   You cannot deduct fines and penalties paid to a government for violations of law, regardless of their nature. Ez 1040 form Personal Interest Personal interest is not deductible. Ez 1040 form Personal interest is any interest that is not home mortgage interest, investment interest, business interest, or other deductible interest. Ez 1040 form It includes the following items. Ez 1040 form Interest on car loans (unless you use the car for business). Ez 1040 form Interest on federal, state, or local income tax. Ez 1040 form Finance charges on credit cards, retail installment contracts, and revolving charge accounts incurred for personal expenses. Ez 1040 form Late payment charges by a public utility. Ez 1040 form You may be able to deduct interest you pay on a qualified student loan. Ez 1040 form For details, see Publication 970, Tax Benefits for Education. Ez 1040 form Allocation of Interest If you use the proceeds of a loan for more than one purpose (for example, personal and business), you must allocate the interest on the loan to each use. Ez 1040 form However, you do not have to allocate home mortgage interest if it is fully deductible, regardless of how the funds are used. Ez 1040 form You allocate interest (other than fully deductible home mortgage interest) on a loan in the same way as the loan itself is allocated. Ez 1040 form You do this by tracing disbursements of the debt proceeds to specific uses. Ez 1040 form For details on how to do this, see chapter 4 of Publication 535. Ez 1040 form How To Report You must file Form 1040 to deduct any home mortgage interest expense on your tax return. Ez 1040 form Where you deduct your interest expense generally depends on how you use the loan proceeds. Ez 1040 form See Table 23-1 for a summary of where to deduct your interest expense. Ez 1040 form Home mortgage interest and points. Ez 1040 form   Deduct the home mortgage interest and points reported to you on Form 1098 on Schedule A (Form 1040), line 10. Ez 1040 form If you paid more deductible interest to the financial institution than the amount shown on Form 1098, show the larger deductible amount on line 10. Ez 1040 form Attach a statement explaining the difference and print “See attached” next to line 10. Ez 1040 form    Deduct home mortgage interest that was not reported to you on Form 1098 on Schedule A (Form 1040), line 11. Ez 1040 form If you paid home mortgage interest to the person from whom you bought your home, show that person's name, address, and taxpayer identification number (TIN) on the dotted lines next to line 11. Ez 1040 form The seller must give you this number and you must give the seller your TIN. Ez 1040 form A Form W-9, Request for Taxpayer Identification Number and Certification, can be used for this purpose. Ez 1040 form Failure to meet any of these requirements may result in a $50 penalty for each failure. Ez 1040 form The TIN can be either a social security number, an individual taxpayer identification number (issued by the Internal Revenue Service), or an employer identification number. Ez 1040 form See Social Security Number (SSN) in chapter 1 for more information about TINs. Ez 1040 form    If you can take a deduction for points that were not reported to you on Form 1098, deduct those points on Schedule A (Form 1040), line 12. Ez 1040 form   Deduct mortgage insurance premiums on Schedule A (Form 1040), line 13. Ez 1040 form More than one borrower. Ez 1040 form   If you and at least one other person (other than your spouse if you file a joint return) were liable for and paid interest on a mortgage that was for your home, and the other person received a Form 1098 showing the interest that was paid during the year, attach a statement to your return explaining this. Ez 1040 form Show how much of the interest each of you paid, and give the name and address of the person who received the form. Ez 1040 form Deduct your share of the interest on Schedule A (Form 1040), line 11, and print “See attached” next to the line. Ez 1040 form Also, deduct your share of any qualified mortgage insurance premiums on Schedule A (Form 1040), line 13. Ez 1040 form   Similarly, if you are the payer of record on a mortgage on which there are other borrowers entitled to a deduction for the interest shown on the Form 1098 you received, deduct only your share of the interest on Schedule A (Form 1040), line 10. Ez 1040 form You should let each of the other borrowers know what his or her share is. Ez 1040 form Mortgage proceeds used for business or investment. Ez 1040 form    If your home mortgage interest deduction is limited, but all or part of the mortgage proceeds were used for business, investment, or other deductible activities, see Table 23-1. Ez 1040 form It shows where to deduct the part of your excess interest that is for those activities. Ez 1040 form Investment interest. Ez 1040 form    Deduct investment interest, subject to certain limits discussed in Publication 550, on Schedule A (Form 1040), line 14. Ez 1040 form Amortization of bond premium. Ez 1040 form   There are various ways to treat the premium you pay to buy taxable bonds. Ez 1040 form See Bond Premium Amortization in Publication 550. Ez 1040 form Income-producing rental or royalty interest. Ez 1040 form   Deduct interest on a loan for income-producing rental or royalty property that is not used in your business in Part I of Schedule E (Form 1040). Ez 1040 form Example. Ez 1040 form You rent out part of your home and borrow money to make repairs. Ez 1040 form You can deduct only the interest payment for the rented part in Part I of Schedule E (Form 1040). Ez 1040 form Deduct the rest of the interest payment on Schedule A (Form 1040) if it is deductible home mortgage interest. Ez 1040 form Table 23-1. Ez 1040 form Where To Deduct Your Interest Expense IF you have . Ez 1040 form . Ez 1040 form . Ez 1040 form THEN deduct it on . Ez 1040 form . Ez 1040 form . Ez 1040 form AND for more information go to . Ez 1040 form . Ez 1040 form . Ez 1040 form deductible student loan interest Form 1040, line 33, or Form 1040A, line 18 Publication 970. Ez 1040 form deductible home mortgage interest and points reported on Form 1098 Schedule A (Form 1040), line 10 Publication 936. Ez 1040 form deductible home mortgage interest not reported on Form 1098 Schedule A (Form 1040), line 11 Publication 936. Ez 1040 form deductible points not reported on Form 1098 Schedule A (Form 1040), line 12 Publication 936. Ez 1040 form deductible mortgage insurance premiums Schedule A (Form 1040), line 13 Publication 936. Ez 1040 form deductible investment interest (other than incurred to produce rents or royalties) Schedule A (Form 1040), line 14 Publication 550. Ez 1040 form deductible business interest (non-farm) Schedule C or C-EZ (Form 1040) Publication 535. Ez 1040 form deductible farm business interest Schedule F (Form 1040) Publications 225 and 535. Ez 1040 form deductible interest incurred to produce rents or royalties Schedule E (Form 1040) Publications 527 and 535. Ez 1040 form personal interest not deductible. Ez 1040 form Prev  Up  Next   Home   More Online Publications
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Consumer Protection Offices

City, county, regional, and state consumer offices offer a variety of important services. They might mediate complaints, conduct investigations, prosecute offenders of consumer laws, license and regulate professional service providers, provide educational materials and advocate for consumer rights. To save time, call before sending a written complaint. Ask if the office handles the type of complaint you have and if complaint forms are provided.

State Consumer Protection Offices

North Carolina Department of Agriculture and Consumer Services

Website: North Carolina Department of Agriculture and Consumer Services

Address: North Carolina Department of Agriculture and Consumer Services
1001 Mail Service Center
Raleigh, NC 27699-1001

Phone Number: 919-707-3000

North Carolina Office of the Attorney General

Website: North Carolina Office of the Attorney General

Address: North Carolina Office of the Attorney General
Consumer Protection Division
Mail Service Center 9001
Raleigh, NC 27699-9001

Phone Number: 919-716-6000 919-716-0058 (in Spanish)

Toll-free: 1-877-566-7226 (NC)

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Banking Authorities

The officials listed in this section regulate and supervise state-chartered banks. Many of them handle or refer problems and complaints about other types of financial institutions as well. Some also answer general questions about banking and consumer credit. If you are dealing with a federally chartered bank, check Federal Agencies.

Commissioner of Banks

Website: Commissioner of Banks

Address: Commissioner of Banks
4309 Mail Service Center
Raleigh, NC 27699-4309

Toll-free: 1-888-384-3811

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Insurance Regulators

Each state has its own laws and regulations for each type of insurance. The officials listed in this section enforce these laws. Many of these offices can also provide you with information to help you make informed insurance buying decisions.

Department of Insurance

Website: Department of Insurance

Address: Department of Insurance
Consumer Services Division
1201 Mail Service Center
Raleigh, NC 27699-1201

Phone Number: 919-807-6750

Toll-free: 1-800-546-5664 (NC)

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Securities Administrators

Each state has its own laws and regulations for securities brokers and securities - including stocks, mutual funds, commodities, real estate, etc. The officials and agencies listed in this section enforce these laws and regulations. Many of these offices can also provide information to help you make informed investment decisions.

Secretary of State

Website: Secretary of State

Address: Secretary of State
Securities Division
PO Box 29622
Raleigh, NC 27626-0622

Phone Number: 919-733-3924

Toll-free: 1-800-688-4507 (Investor Hotline)

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Utility Commissions

State Utility Commissions regulate services and rates for gas, electricity and telephones within your state. In some states, the utility commissions regulate other services such as water, transportation, and the moving of household goods. Many utility commissions handle consumer complaints. Sometimes, if a number of complaints are received about the same utility matter, they will conduct investigations.

Utilities Commission

Website: Utilities Commission

Address: Utilities Commission
Consumer Services
4325 Mail Service Center
Raleigh, NC 27699-4325

Phone Number: 919-733-9277

Toll-free: 1-866-380-9816

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The Ez 1040 Form

Ez 1040 form Internal Revenue Bulletin:  2012-14  April 2, 2012  Rev. Ez 1040 form Proc. Ez 1040 form 2012-23 Table of Contents SECTION 1. Ez 1040 form PURPOSE SECTION 2. Ez 1040 form BACKGROUND SECTION 3. Ez 1040 form SCOPE SECTION 4. Ez 1040 form APPLICATION. Ez 1040 form 01 Limitations on Depreciation Deductions for Certain Automobiles. Ez 1040 form . Ez 1040 form 02 Inclusions in Income of Lessees of Passenger Automobiles. Ez 1040 form SECTION 5. Ez 1040 form EFFECTIVE DATE SECTION 6. Ez 1040 form DRAFTING INFORMATION SECTION 1. Ez 1040 form PURPOSE This revenue procedure provides: (1) limitations on depreciation deductions for owners of passenger automobiles first placed in service by the taxpayer during calendar year 2012, including separate tables of limitations on depreciation deductions for trucks and vans; and (2) the amounts that must be included in income by lessees of passenger automobiles first leased by the taxpayer during calendar year 2012, including a separate table of inclusion amounts for lessees of trucks and vans. Ez 1040 form The tables detailing these depreciation limitations and lessee inclusion amounts reflect the automobile price inflation adjustments required by § 280F(d)(7) of the Internal Revenue Code. Ez 1040 form SECTION 2. Ez 1040 form BACKGROUND . Ez 1040 form 01 For owners of passenger automobiles, § 280F(a) imposes dollar limitations on the depreciation deduction for the year the taxpayer places the passenger automobile in service and for each succeeding year. Ez 1040 form For passenger automobiles placed in service after 1988, § 280F(d)(7) requires the Internal Revenue Service to increase the amounts allowable as depreciation deductions by a price inflation adjustment amount. Ez 1040 form The method of calculating this price inflation amount for trucks and vans placed in service in or after calendar year 2003 uses a different CPI “automobile component” (the “new trucks” component) than that used in the price inflation amount calculation for other passenger automobiles (the “new cars” component), resulting in somewhat higher depreciation deductions for trucks and vans. Ez 1040 form This change reflects the higher rate of price inflation for trucks and vans since 1988. Ez 1040 form . Ez 1040 form 02 Section 401(a) of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, Pub. Ez 1040 form L. Ez 1040 form No. Ez 1040 form 111-312, 124 Stat. Ez 1040 form 3296 (Dec. Ez 1040 form 17, 2010) (the “Act”) extended the 50 percent additional first year depreciation deduction under § 168(k) to qualified property acquired by the taxpayer after December 31, 2007, and before January 1, 2013, if no written binding contract for the acquisition of the property existed before January 1, 2008, and if the taxpayer places the property in service generally before January 1, 2013. Ez 1040 form Section 168(k)(2)(F)(i) increases the first year depreciation allowed under § 280F(a)(1)(A)(i) by $8,000 for passenger automobiles to which the additional first year depreciation deduction under § 168(k) (hereinafter, referred to as “§ 168(k) additional first year depreciation deduction”) applies. Ez 1040 form . Ez 1040 form 03 Section 168(k)(2)(D)(i) provides that the § 168(k) additional first year depreciation deduction does not apply to any property required to be depreciated under the alternative depreciation system of § 168(g), including property described in § 280F(b)(1). Ez 1040 form Section 168(k)(2)(D)(iii) permits a taxpayer to elect out of the § 168(k) additional first year depreciation deduction for any class of property. Ez 1040 form Section 168(k)(4), as amended by the Act, permits a corporation to elect to increase the alternative minimum tax (“AMT”) credit limitation under § 53(c), instead of claiming the § 168(k) additional first year depreciation deduction for all eligible qualified property placed in service after December 31, 2010, that is round 2 extension property (as defined in § 168(k)(4)(I)(iv)). Ez 1040 form Accordingly, this revenue procedure provides tables for passenger automobiles for which the § 168(k) additional first year depreciation deduction applies. Ez 1040 form This revenue procedure also provides tables for passenger automobiles for which the § 168(k) additional first year depreciation deduction does not apply, either because taxpayer (1) purchased the passenger automobile used; (2) did not use the passenger automobile during 2012 more than 50 percent for business purposes; (3) elected out of the § 168(k) additional first year depreciation deduction pursuant to § 168(k)(2)(D)(iii); or (4) elected to increase the § 53 AMT credit limitation in lieu of claiming § 168(k) additional first year depreciation. Ez 1040 form . Ez 1040 form 04 Section 280F(c) requires a reduction in the deduction allowed to the lessee of a leased passenger automobile. Ez 1040 form The reduction must be substantially equivalent to the limitations on the depreciation deductions imposed on owners of passenger automobiles. Ez 1040 form Under § 1. Ez 1040 form 280F-7(a) of the Income Tax Regulations, this reduction requires a lessee to include in gross income an amount determined by applying a formula to the amount obtained from a table. Ez 1040 form One table applies to lessees of trucks and vans and another table applies to all other passenger automobiles. Ez 1040 form Each table shows inclusion amounts for a range of fair market values for each taxable year after the passenger automobile is first leased. Ez 1040 form SECTION 3. Ez 1040 form SCOPE . Ez 1040 form 01 The limitations on depreciation deductions in section 4. Ez 1040 form 01(2) of this revenue procedure apply to passenger automobiles (other than leased passenger automobiles) that are placed in service by the taxpayer in calendar year 2012, and continue to apply for each taxable year that the passenger automobile remains in service. Ez 1040 form . Ez 1040 form 02 The tables in section 4. Ez 1040 form 02 of this revenue procedure apply to leased passenger automobiles for which the lease term begins during calendar year 2012. Ez 1040 form Lessees of these passenger automobiles must use these tables to determine the inclusion amount for each taxable year during which the passenger automobile is leased. Ez 1040 form See Rev. Ez 1040 form Proc. Ez 1040 form 2007-30, 2007-1 C. Ez 1040 form B. Ez 1040 form 1104, for passenger automobiles first leased during calendar year 2007; Rev. Ez 1040 form Proc. Ez 1040 form 2008-22, 2008-1 C. Ez 1040 form B. Ez 1040 form 658, for passenger automobiles first leased during calendar year 2008; Rev. Ez 1040 form Proc. Ez 1040 form 2009-24, 2009-17 I. Ez 1040 form R. Ez 1040 form B. Ez 1040 form 885, for passenger automobiles first leased during calendar year 2009; Rev. Ez 1040 form Proc. Ez 1040 form 2010-18, 2010-9 I. Ez 1040 form R. Ez 1040 form B. Ez 1040 form 427, as amplified and modified by section 4. Ez 1040 form 03 of Rev. Ez 1040 form Proc. Ez 1040 form 2011-21, 2011-12 I. Ez 1040 form R. Ez 1040 form B. Ez 1040 form 560, for passenger automobiles first leased during calendar year 2010; and Rev. Ez 1040 form Proc. Ez 1040 form 2011-21, for passenger automobiles first leased during calendar year 2011. Ez 1040 form SECTION 4. Ez 1040 form APPLICATION . Ez 1040 form 01 Limitations on Depreciation Deductions for Certain Automobiles. Ez 1040 form (1) Amount of the inflation adjustment. Ez 1040 form (a) Passenger automobiles (other than trucks or vans). Ez 1040 form Under § 280F(d)(7)(B)(i), the automobile price inflation adjustment for any calendar year is the percentage (if any) by which the CPI automobile component for October of the preceding calendar year exceeds the CPI automobile component for October 1987. Ez 1040 form Section 280F(d)(7)(B)(ii) defines the term “CPI automobile component” as the automobile component of the Consumer Price Index for all Urban Consumers published by the Department of Labor. Ez 1040 form The new car component of the CPI was 115. Ez 1040 form 2 for October 1987 and 143. Ez 1040 form 419 for October 2011. Ez 1040 form The October 2011 index exceeded the October 1987 index by 28. Ez 1040 form 219. Ez 1040 form Therefore, the automobile price inflation adjustment for 2012 for passenger automobiles (other than trucks and vans) is 24. Ez 1040 form 5 percent (28. Ez 1040 form 219/115. Ez 1040 form 2 x 100%). Ez 1040 form The dollar limitations in § 280F(a) are multiplied by a factor of 0. Ez 1040 form 245, and the resulting increases, after rounding to the nearest $100, are added to the 1988 limitations to give the depreciation limitations applicable to passenger automobiles (other than trucks and vans) for calendar year 2012. Ez 1040 form This adjustment applies to all passenger automobiles (other than trucks and vans) that are first placed in service in calendar year 2012. Ez 1040 form (b) Trucks and vans. Ez 1040 form To determine the dollar limitations for trucks and vans first placed in service during calendar year 2012, the Service uses the new truck component of the CPI instead of the new car component. Ez 1040 form The new truck component of the CPI was 112. Ez 1040 form 4 for October 1987 and 146. Ez 1040 form 607 for October 2011. Ez 1040 form The October 2011 index exceeded the October 1987 index by 34. Ez 1040 form 207. Ez 1040 form Therefore, the automobile price inflation adjustment for 2012 for trucks and vans is 30. Ez 1040 form 43 percent (34. Ez 1040 form 207/112. Ez 1040 form 4 x 100%). Ez 1040 form The dollar limitations in § 280F(a) are multiplied by a factor of 0. Ez 1040 form 3043, and the resulting increases, after rounding to the nearest $100, are added to the 1988 limitations to give the depreciation limitations for trucks and vans. Ez 1040 form This adjustment applies to all trucks and vans that are first placed in service in calendar year 2012. Ez 1040 form (2) Amount of the limitation. Ez 1040 form Tables 1 through 4 contain the dollar amount of the depreciation limitation for each taxable year for passenger automobiles a taxpayer places in service in calendar year 2012. Ez 1040 form Use Table 1 for a passenger automobile (other than a truck or van), and Table 2 for a truck or van, placed in service in calendar year 2012 for which the § 168(k) additional first year depreciation deduction applies. Ez 1040 form Use Table 3 for a passenger automobile (other than a truck or van), and Table 4 for a truck or van, placed in service in calendar year 2012 for which the § 168(k) additional first year depreciation deduction does not apply. Ez 1040 form REV. Ez 1040 form PROC. Ez 1040 form 2012-23 TABLE 1 DEPRECIATION LIMITATIONS FOR PASSENGER AUTOMOBILES (THAT ARE NOT TRUCKS OR VANS) PLACED IN SERVICE IN CALENDAR YEAR 2012 FOR WHICH THE § 168(k) ADDITIONAL FIRST YEAR DEPRECIATION DEDUCTION APPLIES Tax Year Amount 1st Tax Year $11,160 2nd Tax Year $5,100 3rd Tax Year $3,050 Each Succeeding Year $1,875 REV. Ez 1040 form PROC. Ez 1040 form 2012-23 TABLE 2 DEPRECIATION LIMITATIONS FOR TRUCKS AND VANS PLACED IN SERVICE IN CALENDAR YEAR 2012 FOR WHICH THE § 168(k) ADDITIONAL FIRST YEAR DEPRECIATION DEDUCTION APPLIES Tax Year Amount 1st Tax Year $11,360 2nd Tax Year $5,300 3rd Tax Year $3,150 Each Succeeding Year $1,875 REV. Ez 1040 form PROC. Ez 1040 form 2012-23 TABLE 3 DEPRECIATION LIMITATIONS FOR PASSENGER AUTOMOBILES (THAT ARE NOT TRUCKS OR VANS) PLACED IN SERVICE IN CALENDAR YEAR 2012 FOR WHICH THE § 168(k) ADDITIONAL FIRST YEAR DEPRECIATION DEDUCTION DOES NOT APPLY Tax Year Amount 1st Tax Year $3,160 2nd Tax Year $5,100 3rd Tax Year $3,050 Each Succeeding Year $1,875 REV. Ez 1040 form PROC. Ez 1040 form 2012-23 TABLE 4 DEPRECIATION LIMITATIONS FOR TRUCKS AND VANS PLACED IN SERVICE IN CALENDAR YEAR 2012 FOR WHICH THE § 168(k) ADDITIONAL FIRST YEAR DEPRECIATION DEDUCTION DOES NOT APPLY Tax Year Amount 1st Tax Year $3,360 2nd Tax Year $5,300 3rd Tax Year $3,150 Each Succeeding Year $1,875 . Ez 1040 form 02 Inclusions in Income of Lessees of Passenger Automobiles. Ez 1040 form A taxpayer must follow the procedures in § 1. Ez 1040 form 280F-7(a) for determining the inclusion amounts for passenger automobiles first leased in calendar year 2012. Ez 1040 form In applying these procedures, lessees of passenger automobiles other than trucks and vans should use Table 5 of this revenue procedure, while lessees of trucks and vans should use Table 6 of this revenue procedure. Ez 1040 form REV. Ez 1040 form PROC. Ez 1040 form 2012-23 TABLE 5 DOLLAR AMOUNTS FOR PASSENGER AUTOMOBILES (THAT ARE NOT TRUCKS OR VANS) WITH A LEASE TERM BEGINNING IN CALENDAR YEAR 2012 Fair Market Value of Passenger Automobile Tax Year During Lease Over Not Over 1st 2nd 3rd 4th 5th & Later $18,500 $19,000 2 4 5 6 8 19,000 19,500 2 4 7 7 9 19,500 20,000 2 5 8 8 10 20,000 20,500 3 5 9 10 11 20,500 21,000 3 6 9 12 12 21,000 21,500 3 7 10 12 14 21,500 22,000 3 8 11 13 16 22,000 23,000 4 8 13 15 17 23,000 24,000 4 10 15 17 20 24,000 25,000 5 11 17 19 23 25,000 26,000 6 12 19 21 26 26,000 27,000 6 14 20 24 28 27,000 28,000 7 15 22 26 31 28,000 29,000 7 16 25 28 33 29,000 30,000 8 18 25 32 35 30,000 31,000 9 19 27 34 38 31,000 32,000 9 20 30 36 41 32,000 33,000 10 21 32 38 43 33,000 34,000 10 23 33 41 46 34,000 35,000 11 24 35 43 49 35,000 36,000 12 25 37 45 52 36,000 37,000 12 27 39 47 54 37,000 38,000 13 28 41 49 57 38,000 39,000 13 29 43 52 59 39,000 40,000 14 30 45 54 62 40,000 41,000 14 32 47 56 65 41,000 42,000 15 33 49 58 68 42,000 43,000 16 34 51 61 70 43,000 44,000 16 36 52 63 73 44,000 45,000 17 37 54 66 75 45,000 46,000 17 38 57 67 78 46,000 47,000 18 39 59 70 80 47,000 48,000 19 40 61 72 83 48,000 49,000 19 42 62 75 86 49,000 50,000 20 43 64 77 89 50,000 51,000 20 45 66 79 91 51,000 52,000 21 46 68 81 94 52,000 53,000 21 47 70 84 96 53,000 54,000 22 48 72 86 99 54,000 55,000 23 49 74 88 102 55,000 56,000 23 51 76 90 104 56,000 57,000 24 52 78 92 107 57,000 58,000 24 54 79 95 110 58,000 59,000 25 55 81 97 113 59,000 60,000 26 56 83 100 115 60,000 62,000 26 58 86 103 119 62,000 64,000 28 60 90 108 124 64,000 66,000 29 63 94 112 129 66,000 68,000 30 66 97 117 135 68,000 70,000 31 68 102 121 140 70,000 72,000 32 71 105 126 145 72,000 74,000 33 74 109 130 151 74,000 76,000 35 76 113 135 156 76,000 78,000 36 78 117 140 161 78,000 80,000 37 81 120 145 166 80,000 85,000 39 86 127 152 176 85,000 90,000 42 92 137 163 189 90,000 95,000 45 98 147 175 202 95,000 100,000 48 105 155 187 215 100,000 110,000 52 115 170 203 235 110,000 120,000 58 127 189 227 262 120,000 130,000 64 140 208 250 288 130,000 140,000 70 153 227 272 315 140,000 150,000 75 166 246 296 340 150,000 160,000 81 179 265 318 368 160,000 170,000 87 192 284 341 394 170,000 180,000 93 204 304 364 420 180,000 190,000 99 217 323 387 446 190,000 200,000 105 230 342 409 473 200,000 210,000 111 243 361 432 499 210,000 220,000 116 256 380 455 526 220,000 230,000 122 269 399 478 552 230,000 240,000 128 282 418 501 578 240,000 and up 134 294 437 524 605 REV. Ez 1040 form PROC. Ez 1040 form 2012-23 TABLE 6 DOLLAR AMOUNTS FOR TRUCKS AND VANS WITH A LEASE TERM BEGINNING IN CALENDAR YEAR 2012 Fair Market Value of Truck or Van Tax Year During Lease Over Not Over 1st 2nd 3rd 4th 5th & Later $19,000 $19,500 1 4 5 6 7 19,500 20,000 2 4 6 7 9 20,000 20,500 2 5 7 8 10 20,500 21,000 2 5 8 10 11 21,000 21,500 3 6 9 10 13 21,500 22,000 3 6 10 12 14 22,000 23,000 3 8 11 14 15 23,000 24,000 4 9 13 16 18 24,000 25,000 4 10 15 19 21 25,000 26,000 5 11 17 21 24 26,000 27,000 6 12 19 23 26 27,000 28,000 6 14 21 25 29 28,000 29,000 7 15 23 27 32 29,000 30,000 7 17 24 30 34 30,000 31,000 8 18 26 32 37 31,000 32,000 9 19 28 34 40 32,000 33,000 9 20 31 36 42 33,000 34,000 10 21 33 39 44 34,000 35,000 10 23 34 41 48 35,000 36,000 11 24 36 44 50 36,000 37,000 12 25 38 46 53 37,000 38,000 12 27 40 48 55 38,000 39,000 13 28 42 50 58 39,000 40,000 13 29 44 53 60 40,000 41,000 14 31 45 55 63 41,000 42,000 14 32 48 57 66 42,000 43,000 15 33 50 59 69 43,000 44,000 16 34 52 61 72 44,000 45,000 16 36 53 64 74 45,000 46,000 17 37 55 66 77 46,000 47,000 17 38 58 68 79 47,000 48,000 18 40 59 70 82 48,000 49,000 19 41 61 73 84 49,000 50,000 19 42 63 75 87 50,000 51,000 20 43 65 78 89 51,000 52,000 20 45 66 80 93 52,000 53,000 21 46 68 83 95 53,000 54,000 21 48 70 84 98 54,000 55,000 22 49 72 87 100 55,000 56,000 23 50 74 89 103 56,000 57,000 23 51 76 92 105 57,000 58,000 24 52 78 94 108 58,000 59,000 24 54 80 96 111 59,000 60,000 25 55 82 98 114 60,000 62,000 26 57 85 101 118 62,000 64,000 27 60 88 106 123 64,000 66,000 28 62 93 110 128 66,000 68,000 29 65 96 115 134 68,000 70,000 30 67 100 120 139 70,000 72,000 32 70 103 125 144 72,000 74,000 33 72 108 129 149 74,000 76,000 34 75 111 134 155 76,000 78,000 35 78 115 138 160 78,000 80,000 36 80 119 143 165 80,000 85,000 38 85 125 151 175 85,000 90,000 41 91 135 163 187 90,000 95,000 44 98 144 174 201 95,000 100,000 47 104 154 185 214 100,000 110,000 52 113 169 202 234 110,000 120,000 57 127 187 225 261 120,000 130,000 63 139 207 248 287 130,000 140,000 69 152 226 271 313 140,000 150,000 75 165 245 294 339 150,000 160,000 81 178 264 316 366 160,000 170,000 87 190 283 340 392 170,000 180,000 92 204 302 362 419 180,000 190,000 98 216 322 385 445 190,000 200,000 104 229 340 409 471 200,000 210,000 110 242 359 431 498 210,000 220,000 116 255 378 454 524 220,000 230,000 122 267 398 477 551 230,000 240,000 127 281 416 500 577 240,000 and up 133 294 435 523 603 SECTION 5. Ez 1040 form EFFECTIVE DATE This revenue procedure applies to passenger automobiles that a taxpayer first places in service or first leases during calendar year 2012. Ez 1040 form SECTION 6. Ez 1040 form DRAFTING INFORMATION The principal author of this revenue procedure is Bernard P. Ez 1040 form Harvey of the Office of Associate Chief Counsel (Income Tax & Accounting). Ez 1040 form For further information regarding this revenue procedure, contact Mr. Ez 1040 form Harvey at (202) 622-4930 (not a toll-free call). Ez 1040 form Prev  Up  Next   Home   More Internal Revenue Bulletins