File your Taxes for Free!
  • Get your maximum refund*
  • 100% accurate calculations guaranteed*

TurboTax Federal Free Edition - File Taxes Online

Don't let filing your taxes get you down! We'll help make it as easy as possible. With e-file and direct deposit, there's no faster way to get your refund!

Approved TurboTax Affiliate Site. TurboTax and TurboTax Online, among others, are registered trademarks and/or service marks of Intuit Inc. in the United States and other countries. Other parties' trademarks or service marks are the property of the respective owners.


© 2012 - 2018 All rights reserved.

This is an Approved TurboTax Affiliate site. TurboTax and TurboTax Online, among other are registered trademarks and/or service marks of Intuit, Inc. in the United States and other countries. Other parties' trademarks or service marks are the property of the respective owners.
When discussing "Free e-file", note that state e-file is an additional fee. E-file fees do not apply to New York state returns. Prices are subject to change without notice. E-file and get your refund faster
*If you pay an IRS or state penalty or interest because of a TurboTax calculations error, we'll pay you the penalty and interest.
*Maximum Refund Guarantee - or Your Money Back: If you get a larger refund or smaller tax due from another tax preparation method, we'll refund the applicable TurboTax federal and/or state purchase price paid. TurboTax Federal Free Edition customers are entitled to payment of $14.99 and a refund of your state purchase price paid. Claims must be submitted within sixty (60) days of your TurboTax filing date and no later than 6/15/14. E-file, Audit Defense, Professional Review, Refund Transfer and technical support fees are excluded. This guarantee cannot be combined with the TurboTax Satisfaction (Easy) Guarantee. *We're so confident your return will be done right, we guarantee it. Accurate calculations guaranteed. If you pay an IRS or state penalty or interest because of a TurboTax calculations error, we'll pay you the penalty and interest.
https://turbotax.intuit.com/corp/guarantees.jsp

File 2011 Taxes Online Turbotax

Refile TaxesFile 2012 Taxes ElectronicallyPrint 1040ezHow Do You File 2011 TaxesHow To Amend 1040Federal Form 1040ezTaxes 20082011 Taxact Online Tax Prepartion Including Free EfilingAmended Tax Return Form1040ez Form Printable2012 Tax Form 940How To File Your Own TaxesFree E File Tax ReturnState Tax Returns FreeTax For MilitaryForm 1040x TurbotaxFree Tax Filing For College StudentsWhere To Find 2011 Tax FormsFile State Income Tax For FreeHow Do I File My 2012 Taxes For FreeTaxact Online FreeAmended Taxes123easytaxfiling ComFile 1040ez FreeIncome Tax Preparation1040 Ez Tax Form 2011Irs 1040Filing 1040ez ElectronicallyCan You File An Amended Tax Return OnlineFree State Taxes FilingH&r Block Amended ReturnAmended TaxIrs 1040 FormsHow To File A 1040ez OnlineState Tax Return Free E FileHow To File An Amended Tax Return For 20122010 Federal Tax ReturnH&r Block Free FederalFile Ez 1040 FreeInternal Revenue Service Form 1040ez

File 2011 Taxes Online Turbotax

File 2011 taxes online turbotax Publication 583 - Introductory Material Table of Contents Introduction Introduction Table 1. File 2011 taxes online turbotax What New Business Owners Need To Know About Federal Taxes   (Note: This table is intended to help you, as a new business owner, learn what you need to know about your federal tax responsibilities. File 2011 taxes online turbotax To use it, ask yourself each question in the left column, then see the related discussion in the right column. File 2011 taxes online turbotax ) What Must I Know? Where To Find the Answer Which form of business will I use? See Forms of Business. File 2011 taxes online turbotax Will I need an employer identification number (EIN)? See Identification Numbers. File 2011 taxes online turbotax Do I have to start my tax year in January, or may I start it in any other month? See Tax Year. File 2011 taxes online turbotax What method can I use to account for my income and expenses? See Accounting Method. File 2011 taxes online turbotax What kinds of federal taxes will I have to pay? How should I pay my taxes? See Business Taxes. File 2011 taxes online turbotax What must I do if I have employees? See Employment Taxes. File 2011 taxes online turbotax Which forms must I file? See Table 2 and Information Returns. File 2011 taxes online turbotax Are there penalties if I do not pay my taxes or file my returns? See Penalties. File 2011 taxes online turbotax What business expenses can I deduct on my federal income tax return? See Business Expenses. File 2011 taxes online turbotax What records must I keep? How long must I keep them? See Recordkeeping. File 2011 taxes online turbotax This publication provides basic federal tax information for people who are starting a business. File 2011 taxes online turbotax It also provides information on keeping records and illustrates a recordkeeping system. File 2011 taxes online turbotax Throughout this publication we refer to other IRS publications and forms where you will find more information. File 2011 taxes online turbotax In addition, you may want to contact other government agencies, such as the Small Business Administration (SBA). File 2011 taxes online turbotax See How To Get More Information later. File 2011 taxes online turbotax Comments and suggestions. File 2011 taxes online turbotax   We welcome your comments about this publication and your suggestions for future editions. File 2011 taxes online turbotax   You can write to us at the following address: Internal Revenue Service Business Forms and Publications Branch SE:W:CAR:MP:T:B 1111 Constitution Ave. File 2011 taxes online turbotax NW, IR-6526 Washington, DC 20224   We respond to many letters by telephone. File 2011 taxes online turbotax Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence. File 2011 taxes online turbotax   You can email us at taxforms@irs. File 2011 taxes online turbotax gov. File 2011 taxes online turbotax Please put “Publications Comment” on the subject line. File 2011 taxes online turbotax You can also send us comments from www. File 2011 taxes online turbotax irs. File 2011 taxes online turbotax gov/formspubs, select “Comment on Tax Forms and Publications” under “Information about. File 2011 taxes online turbotax ”   Although we cannot respond individually to each comment received, we do appreciate your feedback and will consider your comments as we revise our tax products. File 2011 taxes online turbotax Ordering forms and publications. File 2011 taxes online turbotax Visit www. File 2011 taxes online turbotax irs. File 2011 taxes online turbotax gov/formspubs to download forms and publications, call 1-800-829-3676, or write to the address below and receive a response within 10 days after your request is received. File 2011 taxes online turbotax Internal Revenue Service 1201 N. File 2011 taxes online turbotax Mitsubishi Motorway Bloomington, IL 61705–6613 Tax questions. File 2011 taxes online turbotax   If you have a tax question, check the information available on IRS. File 2011 taxes online turbotax gov or call 1-800-829-1040. File 2011 taxes online turbotax We cannot answer tax questions sent to either of the above addresses. File 2011 taxes online turbotax Future Developments. File 2011 taxes online turbotax   The IRS has created a page on IRS. File 2011 taxes online turbotax gov for information about Publication 583 at www. File 2011 taxes online turbotax irs. File 2011 taxes online turbotax gov/pub583. File 2011 taxes online turbotax Information about any future developments affecting Publication 583 (such as legislation enacted after we release it) will be posted on that page. File 2011 taxes online turbotax Prev  Up  Next   Home   More Online Publications
Print - Click this link to Print this page

Domestic and International Programs

The Domestic and International Index (.pdf) lists all Appeals domestic and international related issues, including contact information, as follows:

  • ACI - Appeals Coordinated Issues
  • ACIcc - Appeals Coordinated Issues, Category of Case
  • CCI - Compliance Coordinated Issues
  • DCI - Decoordinated Issue (Decoordinated in Appeals information available)
  • EM - Appeals Emerging Issues
  • LT - Listed Transactions
  • SME - Subject Matter Expert
  • TOI - Transactions of Interest
  • UIL - Uniform Issue List

The Domestic and International Index is an alphabetical listing of all issues and should be referred to for all current contact information. It is searchable, using Acrobat Search.

ACI or ACIcc - An issue or category of case, is an issue of IRS-wide impact or importance requiring coordination with Appeals to ensure uniformity and consistency nationwide. This is achieved through the coordination of efforts between Appeals Officers (AO) and designated Technical Specialists (TS). The ACI program encompasses legal issues and factual issues and category of case.

An AO assigned a case with an ACI must consult with the TS prior to the scheduling of the initial conference to obtain current information. For ACIs, except those designated an ACIcc, the AO must get review and concurrence from the TS prior to discussing the settlement with the taxpayer.  Such review and concurrence extends to all aspects of the settlement including closing documents.

CCI - When Compliance coordinates an issue and issues a Coordinated Issue Paper (CIP) Appeals designates the issue as a Compliance Coordinated Issue (CCI).   Appeals generally develops Appeals Settlement Guidelines (ASG) for CCIs.   Effective with the date of the issuance of a CIP, the AO must get the review and concurrence of the Appeals’ TS before discussing the settlement with the taxpayer.  For a list of CCIs visit the Large Business and International (LB&I) Division Coordinated Issue Papers webpage.

EM – An Appeals Emerging Issue is an issue that surfaced in an industry or specialty area in a number of Appeals cases or it is understood cases will be coming to Appeals in the near future with the issue.  The AO assigned a case with an emerging issue is required to contact the designated TS (before holding the initial conference) to gain insight into both the industry or specialty area and the issue. He/she is required to maintain contact with the coordinator. Review and concurrence is not required until such time as an issue may be redesignated a CCI or ACI.

Appeals Settlement Guidelines (ASG)
NOTE: Since specialists may have changed since the finalized ASG was approved, it is recommended that you refer to the Domestic and International Index (.pdf) for contact information.

Page Last Reviewed or Updated: 16-Jan-2014

The File 2011 Taxes Online Turbotax

File 2011 taxes online turbotax 1. File 2011 taxes online turbotax   Gain or Loss Table of Contents Topics - This chapter discusses: Useful Items - You may want to see: Sales and ExchangesGain or Loss From Sales and Exchanges Abandonments Foreclosures and RepossessionsAmount realized on a nonrecourse debt. File 2011 taxes online turbotax Amount realized on a recourse debt. File 2011 taxes online turbotax Involuntary ConversionsCondemnations Nontaxable ExchangesLike-Kind Exchanges Other Nontaxable Exchanges Transfers to Spouse Rollover of Gain From Publicly Traded Securities Gains on Sales of Qualified Small Business Stock Exclusion of Gain From Sale of DC Zone Assets Topics - This chapter discusses: Sales and exchanges Abandonments Foreclosures and repossessions Involuntary conversions Nontaxable exchanges Transfers to spouse Rollovers and exclusions for certain capital gains Useful Items - You may want to see: Publication 523 Selling Your Home 537 Installment Sales 547 Casualties, Disasters, and Thefts 550 Investment Income and Expenses 551 Basis of Assets 908 Bankruptcy Tax Guide 4681 Canceled Debts, Foreclosures, Repossessions, and Abandonments Form (and Instructions) Schedule D (Form 1040) Capital Gains and Losses 1040 U. File 2011 taxes online turbotax S. File 2011 taxes online turbotax Individual Income Tax Return 1040X Amended U. File 2011 taxes online turbotax S. File 2011 taxes online turbotax Individual Income Tax Return 1099-A Acquisition or Abandonment of Secured Property 1099-C Cancellation of Debt 4797 Sales of Business Property 8824 Like-Kind Exchanges 8949 Sales and Other Dispositions of Capital Assets Although the discussions in this chapter may at times refer mainly to individuals, many of the rules discussed also apply to taxpayers other than individuals. File 2011 taxes online turbotax However, the rules for property held for personal use usually will not apply to taxpayers other than individuals. File 2011 taxes online turbotax See chapter 5 for information about getting publications and forms. File 2011 taxes online turbotax Sales and Exchanges A sale is a transfer of property for money or a mortgage, note, or other promise to pay money. File 2011 taxes online turbotax An exchange is a transfer of property for other property or services. File 2011 taxes online turbotax The following discussions describe the kinds of transactions that are treated as sales or exchanges and explain how to figure gain or loss. File 2011 taxes online turbotax Sale or lease. File 2011 taxes online turbotax    Some agreements that seem to be leases may really be conditional sales contracts. File 2011 taxes online turbotax The intention of the parties to the agreement can help you distinguish between a sale and a lease. File 2011 taxes online turbotax   There is no test or group of tests to prove what the parties intended when they made the agreement. File 2011 taxes online turbotax You should consider each agreement based on its own facts and circumstances. File 2011 taxes online turbotax For more information, see chapter 3 in Publication 535, Business Expenses. File 2011 taxes online turbotax Cancellation of a lease. File 2011 taxes online turbotax    Payments received by a tenant for the cancellation of a lease are treated as an amount realized from the sale of property. File 2011 taxes online turbotax Payments received by a landlord (lessor) for the cancellation of a lease are essentially a substitute for rental payments and are taxed as ordinary income in the year in which they are received. File 2011 taxes online turbotax Copyright. File 2011 taxes online turbotax    Payments you receive for granting the exclusive use of (or right to exploit) a copyright throughout its life in a particular medium are treated as received from the sale of property. File 2011 taxes online turbotax It does not matter if the payments are a fixed amount or a percentage of receipts from the sale, performance, exhibition, or publication of the copyrighted work, or an amount based on the number of copies sold, performances given, or exhibitions made. File 2011 taxes online turbotax Nor does it matter if the payments are made over the same period as that covering the grantee's use of the copyrighted work. File 2011 taxes online turbotax   If the copyright was used in your trade or business and you held it longer than a year, the gain or loss may be a section 1231 gain or loss. File 2011 taxes online turbotax For more information, see Section 1231 Gains and Losses in chapter 3. File 2011 taxes online turbotax Easement. File 2011 taxes online turbotax   The amount received for granting an easement is subtracted from the basis of the property. File 2011 taxes online turbotax If only a specific part of the entire tract of property is affected by the easement, only the basis of that part is reduced by the amount received. File 2011 taxes online turbotax If it is impossible or impractical to separate the basis of the part of the property on which the easement is granted, the basis of the whole property is reduced by the amount received. File 2011 taxes online turbotax   Any amount received that is more than the basis to be reduced is a taxable gain. File 2011 taxes online turbotax The transaction is reported as a sale of property. File 2011 taxes online turbotax   If you transfer a perpetual easement for consideration and do not keep any beneficial interest in the part of the property affected by the easement, the transaction will be treated as a sale of property. File 2011 taxes online turbotax However, if you make a qualified conservation contribution of a restriction or easement granted in perpetuity, it is treated as a charitable contribution and not a sale or exchange, even though you keep a beneficial interest in the property affected by the easement. File 2011 taxes online turbotax   If you grant an easement on your property (for example, a right-of-way over it) under condemnation or threat of condemnation, you are considered to have made a forced sale, even though you keep the legal title. File 2011 taxes online turbotax Although you figure gain or loss on the easement in the same way as a sale of property, the gain or loss is treated as a gain or loss from a condemnation. File 2011 taxes online turbotax See Gain or Loss From Condemnations, later. File 2011 taxes online turbotax Property transferred to satisfy debt. File 2011 taxes online turbotax   A transfer of property to satisfy a debt is an exchange. File 2011 taxes online turbotax Note's maturity date extended. File 2011 taxes online turbotax   The extension of a note's maturity date is not treated as an exchange of an outstanding note for a new and different note. File 2011 taxes online turbotax Also, it is not considered a closed and completed transaction that would result in a gain or loss. File 2011 taxes online turbotax However, an extension will be treated as a taxable exchange of the outstanding note for a new and materially different note if the changes in the terms of the note are significant. File 2011 taxes online turbotax Each case must be determined by its own facts. File 2011 taxes online turbotax For more information, see Regulations section 1. File 2011 taxes online turbotax 1001-3. File 2011 taxes online turbotax Transfer on death. File 2011 taxes online turbotax   The transfer of property of a decedent to an executor or administrator of the estate, or to the heirs or beneficiaries, is not a sale or exchange or other disposition. File 2011 taxes online turbotax No taxable gain or deductible loss results from the transfer. File 2011 taxes online turbotax Bankruptcy. File 2011 taxes online turbotax   Generally, a transfer (other than by sale or exchange) of property from a debtor to a bankruptcy estate is not treated as a disposition. File 2011 taxes online turbotax Consequently, the transfer generally does not result in gain or loss. File 2011 taxes online turbotax For more information, see Publication 908, Bankruptcy Tax Guide. File 2011 taxes online turbotax Gain or Loss From Sales and Exchanges You usually realize gain or loss when property is sold or exchanged. File 2011 taxes online turbotax A gain is the amount you realize from a sale or exchange of property that is more than its adjusted basis. File 2011 taxes online turbotax A loss is the adjusted basis of the property that is more than the amount you realize. File 2011 taxes online turbotax   Table 1-1. File 2011 taxes online turbotax How To Figure Whether You Have a Gain or Loss IF your. File 2011 taxes online turbotax . File 2011 taxes online turbotax . File 2011 taxes online turbotax THEN you have a. File 2011 taxes online turbotax . File 2011 taxes online turbotax . File 2011 taxes online turbotax Adjusted basis is more than the amount realized, Loss. File 2011 taxes online turbotax Amount realized is more than the adjusted basis, Gain. File 2011 taxes online turbotax Basis. File 2011 taxes online turbotax   You must know the basis of your property to determine whether you have a gain or loss from its sale or other disposition. File 2011 taxes online turbotax The basis of property you buy is usually its cost. File 2011 taxes online turbotax However, if you acquired the property by gift, inheritance, or in some way other than buying it, you must use a basis other than its cost. File 2011 taxes online turbotax See Basis Other Than Cost in Publication 551, Basis of Assets. File 2011 taxes online turbotax Special rules apply to property acquired from a decedent who died in 2010 and the executor made the election to file Form 8939, Allocation of Increase in Basis for Property Received From a Decedent. File 2011 taxes online turbotax See Publication 4895, Tax Treatment of Property Acquired From a Decedent Dying in 2010, for details. File 2011 taxes online turbotax Adjusted basis. File 2011 taxes online turbotax   The adjusted basis of property is your original cost or other basis plus (increased by) certain additions and minus (decreased by) certain deductions. File 2011 taxes online turbotax Increases include costs of any improvements having a useful life of more than 1 year. File 2011 taxes online turbotax Decreases include depreciation and casualty losses. File 2011 taxes online turbotax For more details and additional examples, see Adjusted Basis in Publication 551. File 2011 taxes online turbotax Amount realized. File 2011 taxes online turbotax   The amount you realize from a sale or exchange is the total of all money you receive plus the fair market value (defined below) of all property or services you receive. File 2011 taxes online turbotax The amount you realize also includes any of your liabilities that were assumed by the buyer and any liabilities to which the property you transferred is subject, such as real estate taxes or a mortgage. File 2011 taxes online turbotax Fair market value. File 2011 taxes online turbotax   Fair market value (FMV) is the price at which the property would change hands between a buyer and a seller when both have reasonable knowledge of all the necessary facts and neither is being forced to buy or sell. File 2011 taxes online turbotax If parties with adverse interests place a value on property in an arm's-length transaction, that is strong evidence of FMV. File 2011 taxes online turbotax If there is a stated price for services, this price is treated as the FMV unless there is evidence to the contrary. File 2011 taxes online turbotax Example. File 2011 taxes online turbotax You used a building in your business that cost you $70,000. File 2011 taxes online turbotax You made certain permanent improvements at a cost of $20,000 and deducted depreciation totaling $10,000. File 2011 taxes online turbotax You sold the building for $100,000 plus property having an FMV of $20,000. File 2011 taxes online turbotax The buyer assumed your real estate taxes of $3,000 and a mortgage of $17,000 on the building. File 2011 taxes online turbotax The selling expenses were $4,000. File 2011 taxes online turbotax Your gain on the sale is figured as follows. File 2011 taxes online turbotax Amount realized:     Cash $100,000   FMV of property received 20,000   Real estate taxes assumed by buyer 3,000   Mortgage assumed by  buyer 17,000   Total 140,000   Minus: Selling expenses 4,000 $136,000 Adjusted basis:     Cost of building $70,000   Improvements 20,000   Total $90,000   Minus: Depreciation 10,000   Adjusted basis   $80,000 Gain on sale $56,000 Amount recognized. File 2011 taxes online turbotax   Your gain or loss realized from a sale or exchange of property is usually a recognized gain or loss for tax purposes. File 2011 taxes online turbotax Recognized gains must be included in gross income. File 2011 taxes online turbotax Recognized losses are deductible from gross income. File 2011 taxes online turbotax However, your gain or loss realized from certain exchanges of property is not recognized for tax purposes. File 2011 taxes online turbotax See Nontaxable Exchanges, later. File 2011 taxes online turbotax Also, a loss from the sale or other disposition of property held for personal use is not deductible, except in the case of a casualty or theft. File 2011 taxes online turbotax Interest in property. File 2011 taxes online turbotax   The amount you realize from the disposition of a life interest in property, an interest in property for a set number of years, or an income interest in a trust is a recognized gain under certain circumstances. File 2011 taxes online turbotax If you received the interest as a gift, inheritance, or in a transfer from a spouse or former spouse incident to a divorce, the amount realized is a recognized gain. File 2011 taxes online turbotax Your basis in the property is disregarded. File 2011 taxes online turbotax This rule does not apply if all interests in the property are disposed of at the same time. File 2011 taxes online turbotax Example 1. File 2011 taxes online turbotax Your father dies and leaves his farm to you for life with a remainder interest to your younger brother. File 2011 taxes online turbotax You decide to sell your life interest in the farm. File 2011 taxes online turbotax The entire amount you receive is a recognized gain. File 2011 taxes online turbotax Your basis in the farm is disregarded. File 2011 taxes online turbotax Example 2. File 2011 taxes online turbotax The facts are the same as in Example 1, except that your brother joins you in selling the farm. File 2011 taxes online turbotax The entire interest in the property is sold, so your basis in the farm is not disregarded. File 2011 taxes online turbotax Your gain or loss is the difference between your share of the sales price and your adjusted basis in the farm. File 2011 taxes online turbotax Canceling a sale of real property. File 2011 taxes online turbotax   If you sell real property under a sales contract that allows the buyer to return the property for a full refund and the buyer does so, you may not have to recognize gain or loss on the sale. File 2011 taxes online turbotax If the buyer returns the property in the year of sale, no gain or loss is recognized. File 2011 taxes online turbotax This cancellation of the sale in the same year it occurred places both you and the buyer in the same positions you were in before the sale. File 2011 taxes online turbotax If the buyer returns the property in a later tax year, you must recognize gain (or loss, if allowed) in the year of the sale. File 2011 taxes online turbotax When the property is returned in a later year, you acquire a new basis in the property. File 2011 taxes online turbotax That basis is equal to the amount you pay to the buyer. File 2011 taxes online turbotax Bargain Sale If you sell or exchange property for less than fair market value with the intent of making a gift, the transaction is partly a sale or exchange and partly a gift. File 2011 taxes online turbotax You have a gain if the amount realized is more than your adjusted basis in the property. File 2011 taxes online turbotax However, you do not have a loss if the amount realized is less than the adjusted basis of the property. File 2011 taxes online turbotax Bargain sales to charity. File 2011 taxes online turbotax   A bargain sale of property to a charitable organization is partly a sale or exchange and partly a charitable contribution. File 2011 taxes online turbotax If a charitable deduction for the contribution is allowable, you must allocate your adjusted basis in the property between the part sold and the part contributed based on the fair market value of each. File 2011 taxes online turbotax The adjusted basis of the part sold is figured as follows. File 2011 taxes online turbotax Adjusted basis of entire property × Amount realized (fair market value of part sold)   Fair market value of entire property   Based on this allocation rule, you will have a gain even if the amount realized is not more than your adjusted basis in the property. File 2011 taxes online turbotax This allocation rule does not apply if a charitable contribution deduction is not allowable. File 2011 taxes online turbotax   See Publication 526, Charitable Contributions, for information on figuring your charitable contribution. File 2011 taxes online turbotax Example. File 2011 taxes online turbotax You sold property with a fair market value of $10,000 to a charitable organization for $2,000 and are allowed a deduction for your contribution. File 2011 taxes online turbotax Your adjusted basis in the property is $4,000. File 2011 taxes online turbotax Your gain on the sale is $1,200, figured as follows. File 2011 taxes online turbotax Sales price $2,000 Minus: Adjusted basis of part sold ($4,000 × ($2,000 ÷ $10,000)) 800 Gain on the sale $1,200 Property Used Partly for Business or Rental Generally, if you sell or exchange property you used partly for business or rental purposes and partly for personal purposes, you must figure the gain or loss on the sale or exchange as though you had sold two separate pieces of property. File 2011 taxes online turbotax You must subtract depreciation you took or could have taken from the basis of the business or rental part. File 2011 taxes online turbotax However, see the special rule below for a home used partly for business or rental. File 2011 taxes online turbotax You must allocate the selling price, selling expenses, and the basis of the property between the business or rental part and the personal part. File 2011 taxes online turbotax Gain or loss on the business or rental part of the property may be a capital gain or loss or an ordinary gain or loss, as discussed in chapter 3 under Section 1231 Gains and Losses. File 2011 taxes online turbotax Any gain on the personal part of the property is a capital gain. File 2011 taxes online turbotax You cannot deduct a loss on the personal part. File 2011 taxes online turbotax Home used partly for business or rental. File 2011 taxes online turbotax    If you use property partly as a home and partly for business or to produce rental income, the computation and treatment of any gain on the sale depends partly on whether the business or rental part of the property is part of your home or separate from it. File 2011 taxes online turbotax See Property Used Partly for Business or Rental, in Publication 523. File 2011 taxes online turbotax Property Changed to Business or Rental Use You cannot deduct a loss on the sale of property you purchased or constructed for use as your home and used as your home until the time of sale. File 2011 taxes online turbotax You can deduct a loss on the sale of property you acquired for use as your home but changed to business or rental property and used as business or rental property at the time of sale. File 2011 taxes online turbotax However, if the adjusted basis of the property at the time of the change was more than its fair market value, the loss you can deduct is limited. File 2011 taxes online turbotax Figure the loss you can deduct as follows. File 2011 taxes online turbotax Use the lesser of the property's adjusted basis or fair market value at the time of the change. File 2011 taxes online turbotax Add to (1) the cost of any improvements and other increases to basis since the change. File 2011 taxes online turbotax Subtract from (2) depreciation and any other decreases to basis since the change. File 2011 taxes online turbotax Subtract the amount you realized on the sale from the result in (3). File 2011 taxes online turbotax If the amount you realized is more than the result in (3), treat this result as zero. File 2011 taxes online turbotax The result in (4) is the loss you can deduct. File 2011 taxes online turbotax Example. File 2011 taxes online turbotax You changed your main home to rental property 5 years ago. File 2011 taxes online turbotax At the time of the change, the adjusted basis of your home was $75,000 and the fair market value was $70,000. File 2011 taxes online turbotax This year, you sold the property for $55,000. File 2011 taxes online turbotax You made no improvements to the property but you have depreciation expense of $12,620 over the 5 prior years. File 2011 taxes online turbotax Although your loss on the sale is $7,380 [($75,000 − $12,620) − $55,000], the amount you can deduct as a loss is limited to $2,380, figured as follows. File 2011 taxes online turbotax Lesser of adjusted basis or fair market value at time of the change $70,000 Plus: Cost of any improvements and any other additions to basis after the change -0-   70,000 Minus: Depreciation and any other decreases to basis after the change 12,620   57,380 Minus: Amount you realized from the sale 55,000 Deductible loss $2,380 Gain. File 2011 taxes online turbotax   If you have a gain on the sale, you generally must recognize the full amount of the gain. File 2011 taxes online turbotax You figure the gain by subtracting your adjusted basis from your amount realized, as described earlier. File 2011 taxes online turbotax   You may be able to exclude all or part of the gain if you owned and lived in the property as your main home for at least 2 years during the 5-year period ending on the date of sale. File 2011 taxes online turbotax However, you may not be able to exclude the part of the gain allocated to any period of nonqualified use. File 2011 taxes online turbotax   For more information, see Business Use or Rental of Home in Publication 523. File 2011 taxes online turbotax In addition, special rules apply if the home sold was acquired in a like-kind exchange. File 2011 taxes online turbotax See Special Situations in Publication 523. File 2011 taxes online turbotax Also see Like-Kind Exchanges, later. File 2011 taxes online turbotax Abandonments The abandonment of property is a disposition of property. File 2011 taxes online turbotax You abandon property when you voluntarily and permanently give up possession and use of the property with the intention of ending your ownership but without passing it on to anyone else. File 2011 taxes online turbotax Generally, abandonment is not treated as a sale or exchange of the property. File 2011 taxes online turbotax If the amount you realize (if any) is more than your adjusted basis, then you have a gain. File 2011 taxes online turbotax If your adjusted basis is more than the amount you realize (if any), then you have a loss. File 2011 taxes online turbotax Loss from abandonment of business or investment property is deductible as a loss. File 2011 taxes online turbotax A loss from an abandonment of business or investment property that is not treated as a sale or exchange generally is an ordinary loss. File 2011 taxes online turbotax This rule also applies to leasehold improvements the lessor made for the lessee that were abandoned. File 2011 taxes online turbotax If the property is foreclosed on or repossessed in lieu of abandonment, gain or loss is figured as discussed later under Foreclosure and Repossessions. File 2011 taxes online turbotax The abandonment loss is deducted in the tax year in which the loss is sustained. File 2011 taxes online turbotax If the abandoned property is secured by debt, special rules apply. File 2011 taxes online turbotax The tax consequences of abandonment of property that is secured by debt depend on whether you are personally liable for the debt (recourse debt) or you are not personally liable for the debt (nonrecourse debt). File 2011 taxes online turbotax For more information, including examples, see chapter 3 of Publication 4681. File 2011 taxes online turbotax You cannot deduct any loss from abandonment of your home or other property held for personal use only. File 2011 taxes online turbotax Cancellation of debt. File 2011 taxes online turbotax   If the abandoned property secures a debt for which you are personally liable and the debt is canceled, you may realize ordinary income equal to the canceled debt. File 2011 taxes online turbotax This income is separate from any loss realized from abandonment of the property. File 2011 taxes online turbotax   You must report this income on your tax return unless one of the following applies. File 2011 taxes online turbotax The cancellation is intended as a gift. File 2011 taxes online turbotax The debt is qualified farm debt. File 2011 taxes online turbotax The debt is qualified real property business debt. File 2011 taxes online turbotax You are insolvent or bankrupt. File 2011 taxes online turbotax The debt is qualified principal residence indebtedness. File 2011 taxes online turbotax File Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment), to report the income exclusion. File 2011 taxes online turbotax For more information, including other exceptions and exclusion, see Publication 4681. File 2011 taxes online turbotax Forms 1099-A and 1099-C. File 2011 taxes online turbotax   If you abandon property that secures a loan and the lender knows the property has been abandoned, the lender should send you Form 1099-A showing information you need to figure your loss from the abandonment. File 2011 taxes online turbotax However, if your debt is canceled and the lender must file Form 1099-C, the lender may include the information about the abandonment on that form instead of on Form 1099-A, and send you Form 1099-C only. File 2011 taxes online turbotax The lender must file Form 1099-C and send you a copy if the amount of debt canceled is $600 or more and the lender is a financial institution, credit union, federal government agency, or any organization that has a significant trade or business of lending money. File 2011 taxes online turbotax For abandonments of property and debt cancellations occurring in 2013, these forms should be sent to you by January 31, 2014. File 2011 taxes online turbotax Foreclosures and Repossessions If you do not make payments you owe on a loan secured by property, the lender may foreclose on the loan or repossess the property. File 2011 taxes online turbotax The foreclosure or repossession is treated as a sale or exchange from which you may realize gain or loss. File 2011 taxes online turbotax This is true even if you voluntarily return the property to the lender. File 2011 taxes online turbotax You also may realize ordinary income from cancellation of debt if the loan balance is more than the fair market value of the property. File 2011 taxes online turbotax Buyer's (borrower's) gain or loss. File 2011 taxes online turbotax   You figure and report gain or loss from a foreclosure or repossession in the same way as gain or loss from a sale or exchange. File 2011 taxes online turbotax The gain or loss is the difference between your adjusted basis in the transferred property and the amount realized. File 2011 taxes online turbotax See Gain or Loss From Sales and Exchanges, earlier. File 2011 taxes online turbotax You can use Table 1-2 to figure your gain or loss from a foreclosure or repossession. File 2011 taxes online turbotax Amount realized on a nonrecourse debt. File 2011 taxes online turbotax   If you are not personally liable for repaying the debt (nonrecourse debt) secured by the transferred property, the amount you realize includes the full debt canceled by the transfer. File 2011 taxes online turbotax The full canceled debt is included even if the fair market value of the property is less than the canceled debt. File 2011 taxes online turbotax Example 1. File 2011 taxes online turbotax Chris bought a new car for $15,000. File 2011 taxes online turbotax He paid $2,000 down and borrowed the remaining $13,000 from the dealer's credit company. File 2011 taxes online turbotax Chris is not personally liable for the loan (nonrecourse debt), but pledges the new car as security. File 2011 taxes online turbotax The credit company repossessed the car because he stopped making loan payments. File 2011 taxes online turbotax The balance due after taking into account the payments Chris made was $10,000. File 2011 taxes online turbotax The fair market value of the car when repossessed was $9,000. File 2011 taxes online turbotax The amount Chris realized on the repossession is $10,000. File 2011 taxes online turbotax That is the outstanding amount of the debt canceled by the repossession, even though the car's fair market value is less than $10,000. File 2011 taxes online turbotax Chris figures his gain or loss on the repossession by comparing the amount realized ($10,000) with his adjusted basis ($15,000). File 2011 taxes online turbotax He has a $5,000 nondeductible loss. File 2011 taxes online turbotax Example 2. File 2011 taxes online turbotax Abena paid $200,000 for her home. File 2011 taxes online turbotax She paid $15,000 down and borrowed the remaining $185,000 from a bank. File 2011 taxes online turbotax Abena is not personally liable for the loan (nonrecourse debt), but pledges the house as security. File 2011 taxes online turbotax The bank foreclosed on the loan because Abena stopped making payments. File 2011 taxes online turbotax When the bank foreclosed on the loan, the balance due was $180,000, the fair market value of the house was $170,000, and Abena's adjusted basis was $175,000 due to a casualty loss she had deducted. File 2011 taxes online turbotax The amount Abena realized on the foreclosure is $180,000, the balance due and debt canceled by the foreclosure. File 2011 taxes online turbotax She figures her gain or loss by comparing the amount realized ($180,000) with her adjusted basis ($175,000). File 2011 taxes online turbotax She has a $5,000 realized gain. File 2011 taxes online turbotax Amount realized on a recourse debt. File 2011 taxes online turbotax   If you are personally liable for the debt (recourse debt), the amount realized on the foreclosure or repossession includes the lesser of: The outstanding debt immediately before the transfer reduced by any amount for which you remain personally liable immediately after the transfer, or The fair market value of the transferred property. File 2011 taxes online turbotax You are treated as receiving ordinary income from the canceled debt for the part of the debt that is more than the fair market value. File 2011 taxes online turbotax The amount realized does not include the canceled debt that is your income from cancellation of debt. File 2011 taxes online turbotax See Cancellation of debt, below. File 2011 taxes online turbotax Seller's (lender's) gain or loss on repossession. File 2011 taxes online turbotax   If you finance a buyer's purchase of property and later acquire an interest in it through foreclosure or repossession, you may have a gain or loss on the acquisition. File 2011 taxes online turbotax For more information, see Repossession in Publication 537. File 2011 taxes online turbotax    Table 1-2. File 2011 taxes online turbotax Worksheet for Foreclosures and Repossessions Part 1. File 2011 taxes online turbotax Use Part 1 to figure your ordinary income from the cancellation of debt upon foreclosure or repossession. File 2011 taxes online turbotax Complete this part only  if you were personally liable for the debt. File 2011 taxes online turbotax Otherwise,  go to Part 2. File 2011 taxes online turbotax   1. File 2011 taxes online turbotax Enter the amount of outstanding debt immediately before the transfer of   property reduced by any amount for which you remain personally liable after   the transfer of property   2. File 2011 taxes online turbotax Enter the fair market value of the transferred property   3. File 2011 taxes online turbotax Ordinary income from cancellation of debt upon foreclosure or    repossession. File 2011 taxes online turbotax * Subtract line 2 from line 1. File 2011 taxes online turbotax   If less than zero, enter zero   Part 2. File 2011 taxes online turbotax Figure your gain or loss from foreclosure or repossession. File 2011 taxes online turbotax   4. File 2011 taxes online turbotax If you completed Part 1, enter the smaller of line 1 or line 2. File 2011 taxes online turbotax   If you did not complete Part 1, enter the outstanding debt immediately before   the transfer of property   5. File 2011 taxes online turbotax Enter any proceeds you received from the foreclosure sale   6. File 2011 taxes online turbotax Add lines 4 and 5   7. File 2011 taxes online turbotax Enter the adjusted basis of the transferred property   8. File 2011 taxes online turbotax Gain or loss from foreclosure or repossession. File 2011 taxes online turbotax Subtract line 7  from line 6   * The income may not be taxable. File 2011 taxes online turbotax See Cancellation of debt. File 2011 taxes online turbotax Cancellation of debt. File 2011 taxes online turbotax   If property that is repossessed or foreclosed on secures a debt for which you are personally liable (recourse debt), you generally must report as ordinary income the amount by which the canceled debt is more than the fair market value of the property. File 2011 taxes online turbotax This income is separate from any gain or loss realized from the foreclosure or repossession. File 2011 taxes online turbotax Report the income from cancellation of a debt related to a business or rental activity as business or rental income. File 2011 taxes online turbotax    You can use Table 1-2 to figure your income from cancellation of debt. File 2011 taxes online turbotax   You must report this income on your tax return unless one of the following applies. File 2011 taxes online turbotax The cancellation is intended as a gift. File 2011 taxes online turbotax The debt is qualified farm debt. File 2011 taxes online turbotax The debt is qualified real property business debt. File 2011 taxes online turbotax You are insolvent or bankrupt. File 2011 taxes online turbotax The debt is qualified principal residence indebtedness. File 2011 taxes online turbotax File Form 982 to report the income exclusion. File 2011 taxes online turbotax Example 1. File 2011 taxes online turbotax Assume the same facts as in Example 1 under Amount realized on a nonrecourse debt, earlier, except Chris is personally liable for the car loan (recourse debt). File 2011 taxes online turbotax In this case, the amount he realizes is $9,000. File 2011 taxes online turbotax This is the lesser of the canceled debt ($10,000) or the car's fair market value ($9,000). File 2011 taxes online turbotax Chris figures his gain or loss on the repossession by comparing the amount realized ($9,000) with his adjusted basis ($15,000). File 2011 taxes online turbotax He has a $6,000 nondeductible loss. File 2011 taxes online turbotax He also is treated as receiving ordinary income from cancellation of debt. File 2011 taxes online turbotax That income is $1,000 ($10,000 − $9,000). File 2011 taxes online turbotax This is the part of the canceled debt not included in the amount realized. File 2011 taxes online turbotax Example 2. File 2011 taxes online turbotax Assume the same facts as in Example 2 under Amount realized on a nonrecourse debt, earlier, except Abena is personally liable for the loan (recourse debt). File 2011 taxes online turbotax In this case, the amount she realizes is $170,000. File 2011 taxes online turbotax This is the lesser of the canceled debt ($180,000) or the fair market value of the house ($170,000). File 2011 taxes online turbotax Abena figures her gain or loss on the foreclosure by comparing the amount realized ($170,000) with her adjusted basis ($175,000). File 2011 taxes online turbotax She has a $5,000 nondeductible loss. File 2011 taxes online turbotax She also is treated as receiving ordinary income from cancellation of debt. File 2011 taxes online turbotax (The debt is not exempt from tax as discussed under Cancellation of debt, above. File 2011 taxes online turbotax ) That income is $10,000 ($180,000 − $170,000). File 2011 taxes online turbotax This is the part of the canceled debt not included in the amount realized. File 2011 taxes online turbotax Forms 1099-A and 1099-C. File 2011 taxes online turbotax   A lender who acquires an interest in your property in a foreclosure or repossession should send you Form 1099-A showing the information you need to figure your gain or loss. File 2011 taxes online turbotax However, if the lender also cancels part of your debt and must file Form 1099-C, the lender may include the information about the foreclosure or repossession on that form instead of on Form 1099-A and send you Form 1099-C only. File 2011 taxes online turbotax The lender must file Form 1099-C and send you a copy if the amount of debt canceled is $600 or more and the lender is a financial institution, credit union, federal government agency, or any organization that has a significant trade or business of lending money. File 2011 taxes online turbotax For foreclosures or repossessions occurring in 2013, these forms should be sent to you by January 31, 2014. File 2011 taxes online turbotax Involuntary Conversions An involuntary conversion occurs when your property is destroyed, stolen, condemned, or disposed of under the threat of condemnation and you receive other property or money in payment, such as insurance or a condemnation award. File 2011 taxes online turbotax Involuntary conversions are also called involuntary exchanges. File 2011 taxes online turbotax Gain or loss from an involuntary conversion of your property is usually recognized for tax purposes unless the property is your main home. File 2011 taxes online turbotax You report the gain or deduct the loss on your tax return for the year you realize it. File 2011 taxes online turbotax You cannot deduct a loss from an involuntary conversion of property you held for personal use unless the loss resulted from a casualty or theft. File 2011 taxes online turbotax However, depending on the type of property you receive, you may not have to report a gain on an involuntary conversion. File 2011 taxes online turbotax Generally, you do not report the gain if you receive property that is similar or related in service or use to the converted property. File 2011 taxes online turbotax Your basis for the new property is the same as your basis for the converted property. File 2011 taxes online turbotax This means that the gain is deferred until a taxable sale or exchange occurs. File 2011 taxes online turbotax If you receive money or property that is not similar or related in service or use to the involuntarily converted property and you buy qualifying replacement property within a certain period of time, you can elect to postpone reporting the gain on the property purchased. File 2011 taxes online turbotax This publication explains the treatment of a gain or loss from a condemnation or disposition under the threat of condemnation. File 2011 taxes online turbotax If you have a gain or loss from the destruction or theft of property, see Publication 547. File 2011 taxes online turbotax Condemnations A condemnation is the process by which private property is legally taken for public use without the owner's consent. File 2011 taxes online turbotax The property may be taken by the federal government, a state government, a political subdivision, or a private organization that has the power to legally take it. File 2011 taxes online turbotax The owner receives a condemnation award (money or property) in exchange for the property taken. File 2011 taxes online turbotax A condemnation is like a forced sale, the owner being the seller and the condemning authority being the buyer. File 2011 taxes online turbotax Example. File 2011 taxes online turbotax A local government authorized to acquire land for public parks informed you that it wished to acquire your property. File 2011 taxes online turbotax After the local government took action to condemn your property, you went to court to keep it. File 2011 taxes online turbotax But, the court decided in favor of the local government, which took your property and paid you an amount fixed by the court. File 2011 taxes online turbotax This is a condemnation of private property for public use. File 2011 taxes online turbotax Threat of condemnation. File 2011 taxes online turbotax   A threat of condemnation exists if a representative of a government body or a public official authorized to acquire property for public use informs you that the government body or official has decided to acquire your property. File 2011 taxes online turbotax You must have reasonable grounds to believe that, if you do not sell voluntarily, your property will be condemned. File 2011 taxes online turbotax   The sale of your property to someone other than the condemning authority will also qualify as an involuntary conversion, provided you have reasonable grounds to believe that your property will be condemned. File 2011 taxes online turbotax If the buyer of this property knows at the time of purchase that it will be condemned and sells it to the condemning authority, this sale also qualifies as an involuntary conversion. File 2011 taxes online turbotax Reports of condemnation. File 2011 taxes online turbotax   A threat of condemnation exists if you learn of a decision to acquire your property for public use through a report in a newspaper or other news medium, and this report is confirmed by a representative of the government body or public official involved. File 2011 taxes online turbotax You must have reasonable grounds to believe that they will take necessary steps to condemn your property if you do not sell voluntarily. File 2011 taxes online turbotax If you relied on oral statements made by a government representative or public official, the Internal Revenue Service (IRS) may ask you to get written confirmation of the statements. File 2011 taxes online turbotax Example. File 2011 taxes online turbotax Your property lies along public utility lines. File 2011 taxes online turbotax The utility company has the authority to condemn your property. File 2011 taxes online turbotax The company informs you that it intends to acquire your property by negotiation or condemnation. File 2011 taxes online turbotax A threat of condemnation exists when you receive the notice. File 2011 taxes online turbotax Related property voluntarily sold. File 2011 taxes online turbotax   A voluntary sale of your property may be treated as a forced sale that qualifies as an involuntary conversion if the property had a substantial economic relationship to property of yours that was condemned. File 2011 taxes online turbotax A substantial economic relationship exists if together the properties were one economic unit. File 2011 taxes online turbotax You also must show that the condemned property could not reasonably or adequately be replaced. File 2011 taxes online turbotax You can elect to postpone reporting the gain by buying replacement property. File 2011 taxes online turbotax See Postponement of Gain, later. File 2011 taxes online turbotax Gain or Loss From Condemnations If your property was condemned or disposed of under the threat of condemnation, figure your gain or loss by comparing the adjusted basis of your condemned property with your net condemnation award. File 2011 taxes online turbotax If your net condemnation award is more than the adjusted basis of the condemned property, you have a gain. File 2011 taxes online turbotax You can postpone reporting gain from a condemnation if you buy replacement property. File 2011 taxes online turbotax If only part of your property is condemned, you can treat the cost of restoring the remaining part to its former usefulness as the cost of replacement property. File 2011 taxes online turbotax See Postponement of Gain, later. File 2011 taxes online turbotax If your net condemnation award is less than your adjusted basis, you have a loss. File 2011 taxes online turbotax If your loss is from property you held for personal use, you cannot deduct it. File 2011 taxes online turbotax You must report any deductible loss in the tax year it happened. File 2011 taxes online turbotax You can use Part 2 of Table 1-3 to figure your gain or loss from a condemnation award. File 2011 taxes online turbotax Main home condemned. File 2011 taxes online turbotax   If you have a gain because your main home is condemned, you generally can exclude the gain from your income as if you had sold or exchanged your home. File 2011 taxes online turbotax You may be able to exclude up to $250,000 of the gain (up to $500,000 if married filing jointly). File 2011 taxes online turbotax For information on this exclusion, see Publication 523. File 2011 taxes online turbotax If your gain is more than you can exclude but you buy replacement property, you may be able to postpone reporting the rest of the gain. File 2011 taxes online turbotax See Postponement of Gain, later. File 2011 taxes online turbotax Table 1-3. File 2011 taxes online turbotax Worksheet for Condemnations Part 1. File 2011 taxes online turbotax Gain from severance damages. File 2011 taxes online turbotax  If you did not receive severance damages, skip Part 1 and go to Part 2. File 2011 taxes online turbotax   1. File 2011 taxes online turbotax Enter gross severance damages received   2. File 2011 taxes online turbotax Enter your expenses in getting severance damages   3. File 2011 taxes online turbotax Subtract line 2 from line 1. File 2011 taxes online turbotax If less than zero, enter -0-   4. File 2011 taxes online turbotax Enter any special assessment on remaining property taken out of your award   5. File 2011 taxes online turbotax Net severance damages. File 2011 taxes online turbotax Subtract line 4 from line 3. File 2011 taxes online turbotax If less than zero, enter -0-   6. File 2011 taxes online turbotax Enter the adjusted basis of the remaining property   7. File 2011 taxes online turbotax Gain from severance damages. File 2011 taxes online turbotax Subtract line 6 from line 5. File 2011 taxes online turbotax If less than zero, enter -0-   8. File 2011 taxes online turbotax Refigured adjusted basis of the remaining property. File 2011 taxes online turbotax Subtract line 5 from line 6. File 2011 taxes online turbotax If less than zero, enter -0-   Part 2. File 2011 taxes online turbotax Gain or loss from condemnation award. File 2011 taxes online turbotax   9. File 2011 taxes online turbotax Enter the gross condemnation award received   10. File 2011 taxes online turbotax Enter your expenses in getting the condemnation award   11. File 2011 taxes online turbotax If you completed Part 1, and line 4 is more than line 3, subtract line 3 from line 4. File 2011 taxes online turbotax If you did not complete Part 1, but a special assessment was taken out of your award, enter that amount. File 2011 taxes online turbotax Otherwise, enter -0-   12. File 2011 taxes online turbotax Add lines 10 and 11   13. File 2011 taxes online turbotax Net condemnation award. File 2011 taxes online turbotax Subtract line 12 from line 9   14. File 2011 taxes online turbotax Enter the adjusted basis of the condemned property   15. File 2011 taxes online turbotax Gain from condemnation award. File 2011 taxes online turbotax If line 14 is more than line 13, enter -0-. File 2011 taxes online turbotax Otherwise, subtract line 14 from  line 13 and skip line 16   16. File 2011 taxes online turbotax Loss from condemnation award. File 2011 taxes online turbotax Subtract line 13 from line 14     (Note: You cannot deduct the amount on line 16 if the condemned property was held for personal use. File 2011 taxes online turbotax )   Part 3. File 2011 taxes online turbotax Postponed gain from condemnation. File 2011 taxes online turbotax  (Complete only if line 7 or line 15 is more than zero and you bought qualifying replacement property or made expenditures to restore the usefulness of your remaining property. File 2011 taxes online turbotax )   17. File 2011 taxes online turbotax If you completed Part 1, and line 7 is more than zero, enter the amount from line 5. File 2011 taxes online turbotax Otherwise, enter -0-   18. File 2011 taxes online turbotax If line 15 is more than zero, enter the amount from line 13. File 2011 taxes online turbotax Otherwise, enter -0-   19. File 2011 taxes online turbotax Add lines 17 and 18. File 2011 taxes online turbotax If the condemned property was your main home, subtract from this total the gain you excluded from your income and enter the result   20. File 2011 taxes online turbotax Enter the total cost of replacement property and any expenses to restore the usefulness of your remaining property   21. File 2011 taxes online turbotax Subtract line 20 from line 19. File 2011 taxes online turbotax If less than zero, enter -0-   22. File 2011 taxes online turbotax If you completed Part 1, add lines 7 and 15. File 2011 taxes online turbotax Otherwise, enter the amount from line 15. File 2011 taxes online turbotax If the condemned property was your main home, subtract from this total the gain you excluded from your income and enter the result   23. File 2011 taxes online turbotax Recognized gain. File 2011 taxes online turbotax Enter the smaller of line 21 or line 22. File 2011 taxes online turbotax   24. File 2011 taxes online turbotax Postponed gain. File 2011 taxes online turbotax Subtract line 23 from line 22. File 2011 taxes online turbotax If less than zero, enter -0-   Condemnation award. File 2011 taxes online turbotax   A condemnation award is the money you are paid or the value of other property you receive for your condemned property. File 2011 taxes online turbotax The award is also the amount you are paid for the sale of your property under threat of condemnation. File 2011 taxes online turbotax Payment of your debts. File 2011 taxes online turbotax   Amounts taken out of the award to pay your debts are considered paid to you. File 2011 taxes online turbotax Amounts the government pays directly to the holder of a mortgage or lien against your property are part of your award, even if the debt attaches to the property and is not your personal liability. File 2011 taxes online turbotax Example. File 2011 taxes online turbotax The state condemned your property for public use. File 2011 taxes online turbotax The award was set at $200,000. File 2011 taxes online turbotax The state paid you only $148,000 because it paid $50,000 to your mortgage holder and $2,000 accrued real estate taxes. File 2011 taxes online turbotax You are considered to have received the entire $200,000 as a condemnation award. File 2011 taxes online turbotax Interest on award. File 2011 taxes online turbotax   If the condemning authority pays you interest for its delay in paying your award, it is not part of the condemnation award. File 2011 taxes online turbotax You must report the interest separately as ordinary income. File 2011 taxes online turbotax Payments to relocate. File 2011 taxes online turbotax   Payments you receive to relocate and replace housing because you have been displaced from your home, business, or farm as a result of federal or federally assisted programs are not part of the condemnation award. File 2011 taxes online turbotax Do not include them in your income. File 2011 taxes online turbotax Replacement housing payments used to buy new property are included in the property's basis as part of your cost. File 2011 taxes online turbotax Net condemnation award. File 2011 taxes online turbotax   A net condemnation award is the total award you received, or are considered to have received, for the condemned property minus your expenses of obtaining the award. File 2011 taxes online turbotax If only a part of your property was condemned, you also must reduce the award by any special assessment levied against the part of the property you retain. File 2011 taxes online turbotax This is discussed later under Special assessment taken out of award. File 2011 taxes online turbotax Severance damages. File 2011 taxes online turbotax    Severance damages are not part of the award paid for the property condemned. File 2011 taxes online turbotax They are paid to you if part of your property is condemned and the value of the part you keep is decreased because of the condemnation. File 2011 taxes online turbotax   For example, you may receive severance damages if your property is subject to flooding because you sell flowage easement rights (the condemned property) under threat of condemnation. File 2011 taxes online turbotax Severance damages also may be given to you if, because part of your property is condemned for a highway, you must replace fences, dig new wells or ditches, or plant trees to restore your remaining property to the same usefulness it had before the condemnation. File 2011 taxes online turbotax   The contracting parties should agree on the specific amount of severance damages in writing. File 2011 taxes online turbotax If this is not done, all proceeds from the condemning authority are considered awarded for your condemned property. File 2011 taxes online turbotax   You cannot make a completely new allocation of the total award after the transaction is completed. File 2011 taxes online turbotax However, you can show how much of the award both parties intended for severance damages. File 2011 taxes online turbotax The severance damages part of the award is determined from all the facts and circumstances. File 2011 taxes online turbotax Example. File 2011 taxes online turbotax You sold part of your property to the state under threat of condemnation. File 2011 taxes online turbotax The contract you and the condemning authority signed showed only the total purchase price. File 2011 taxes online turbotax It did not specify a fixed sum for severance damages. File 2011 taxes online turbotax However, at settlement, the condemning authority gave you closing papers showing clearly the part of the purchase price that was for severance damages. File 2011 taxes online turbotax You may treat this part as severance damages. File 2011 taxes online turbotax Treatment of severance damages. File 2011 taxes online turbotax   Your net severance damages are treated as the amount realized from an involuntary conversion of the remaining part of your property. File 2011 taxes online turbotax Use them to reduce the basis of the remaining property. File 2011 taxes online turbotax If the amount of severance damages is based on damage to a specific part of the property you kept, reduce the basis of only that part by the net severance damages. File 2011 taxes online turbotax   If your net severance damages are more than the basis of your retained property, you have a gain. File 2011 taxes online turbotax You may be able to postpone reporting the gain. File 2011 taxes online turbotax See Postponement of Gain, later. File 2011 taxes online turbotax    You can use Part 1 of Table 1-3 to figure any gain from severance damages and to refigure the adjusted basis of the remaining part of your property. File 2011 taxes online turbotax Net severance damages. File 2011 taxes online turbotax   To figure your net severance damages, you first must reduce your severance damages by your expenses in obtaining the damages. File 2011 taxes online turbotax You then reduce them by any special assessment (described later) levied against the remaining part of the property and retained out of the award by the condemning authority. File 2011 taxes online turbotax The balance is your net severance damages. File 2011 taxes online turbotax Expenses of obtaining a condemnation award and severance damages. File 2011 taxes online turbotax   Subtract the expenses of obtaining a condemnation award, such as legal, engineering, and appraisal fees, from the total award. File 2011 taxes online turbotax Also, subtract the expenses of obtaining severance damages, which may include similar expenses, from the severance damages paid to you. File 2011 taxes online turbotax If you cannot determine which part of your expenses is for each part of the condemnation proceeds, you must make a proportionate allocation. File 2011 taxes online turbotax Example. File 2011 taxes online turbotax You receive a condemnation award and severance damages. File 2011 taxes online turbotax One-fourth of the total was designated as severance damages in your agreement with the condemning authority. File 2011 taxes online turbotax You had legal expenses for the entire condemnation proceeding. File 2011 taxes online turbotax You cannot determine how much of your legal expenses is for each part of the condemnation proceeds. File 2011 taxes online turbotax You must allocate one-fourth of your legal expenses to the severance damages and the other three-fourths to the condemnation award. File 2011 taxes online turbotax Special assessment retained out of award. File 2011 taxes online turbotax   When only part of your property is condemned, a special assessment levied against the remaining property may be retained by the governing body out of your condemnation award. File 2011 taxes online turbotax An assessment may be levied if the remaining part of your property benefited by the improvement resulting from the condemnation. File 2011 taxes online turbotax Examples of improvements that may cause a special assessment are widening a street and installing a sewer. File 2011 taxes online turbotax   To figure your net condemnation award, you must reduce the amount of the award by the assessment retained out of the award. File 2011 taxes online turbotax Example. File 2011 taxes online turbotax To widen the street in front of your home, the city condemned a 25-foot deep strip of your land. File 2011 taxes online turbotax You were awarded $5,000 for this and spent $300 to get the award. File 2011 taxes online turbotax Before paying the award, the city levied a special assessment of $700 for the street improvement against your remaining property. File 2011 taxes online turbotax The city then paid you only $4,300. File 2011 taxes online turbotax Your net award is $4,000 ($5,000 total award minus $300 expenses in obtaining the award and $700 for the special assessment retained). File 2011 taxes online turbotax If the $700 special assessment was not retained out of the award and you were paid $5,000, your net award would be $4,700 ($5,000 − $300). File 2011 taxes online turbotax The net award would not change, even if you later paid the assessment from the amount you received. File 2011 taxes online turbotax Severance damages received. File 2011 taxes online turbotax   If severance damages are included in the condemnation proceeds, the special assessment retained out of the severance damages is first used to reduce the severance damages. File 2011 taxes online turbotax Any balance of the special assessment is used to reduce the condemnation award. File 2011 taxes online turbotax Example. File 2011 taxes online turbotax You were awarded $4,000 for the condemnation of your property and $1,000 for severance damages. File 2011 taxes online turbotax You spent $300 to obtain the severance damages. File 2011 taxes online turbotax A special assessment of $800 was retained out of the award. File 2011 taxes online turbotax The $1,000 severance damages are reduced to zero by first subtracting the $300 expenses and then $700 of the special assessment. File 2011 taxes online turbotax Your $4,000 condemnation award is reduced by the $100 balance of the special assessment, leaving a $3,900 net condemnation award. File 2011 taxes online turbotax Part business or rental. File 2011 taxes online turbotax   If you used part of your condemned property as your home and part as business or rental property, treat each part as a separate property. File 2011 taxes online turbotax Figure your gain or loss separately because gain or loss on each part may be treated differently. File 2011 taxes online turbotax   Some examples of this type of property are a building in which you live and operate a grocery, and a building in which you live on the first floor and rent out the second floor. File 2011 taxes online turbotax Example. File 2011 taxes online turbotax You sold your building for $24,000 under threat of condemnation to a public utility company that had the authority to condemn. File 2011 taxes online turbotax You rented half the building and lived in the other half. File 2011 taxes online turbotax You paid $25,000 for the building and spent an additional $1,000 for a new roof. File 2011 taxes online turbotax You claimed allowable depreciation of $4,600 on the rental half. File 2011 taxes online turbotax You spent $200 in legal expenses to obtain the condemnation award. File 2011 taxes online turbotax Figure your gain or loss as follows. File 2011 taxes online turbotax     Resi- dential Part Busi- ness Part 1) Condemnation award received $12,000 $12,000 2) Minus: Legal expenses, $200 100 100 3) Net condemnation award $11,900 $11,900 4) Adjusted basis:       ½ of original cost, $25,000 $12,500 $12,500   Plus: ½ of cost of roof, $1,000 500 500   Total $13,000 $13,000 5) Minus: Depreciation   4,600 6) Adjusted basis, business part   $8,400 7) (Loss) on residential property ($1,100)   8) Gain on business property $3,500 The loss on the residential part of the property is not deductible. File 2011 taxes online turbotax Postponement of Gain Do not report the gain on condemned property if you receive only property that is similar or related in service or use to the condemned property. File 2011 taxes online turbotax Your basis for the new property is the same as your basis for the old. File 2011 taxes online turbotax Money or unlike property received. File 2011 taxes online turbotax   You ordinarily must report the gain if you receive money or unlike property. File 2011 taxes online turbotax You can elect to postpone reporting the gain if you buy property that is similar or related in service or use to the condemned property within the replacement period, discussed later. File 2011 taxes online turbotax You also can elect to postpone reporting the gain if you buy a controlling interest (at least 80%) in a corporation owning property that is similar or related in service or use to the condemned property. File 2011 taxes online turbotax See Controlling interest in a corporation, later. File 2011 taxes online turbotax   To postpone reporting all the gain, you must buy replacement property costing at least as much as the amount realized for the condemned property. File 2011 taxes online turbotax If the cost of the replacement property is less than the amount realized, you must report the gain up to the unspent part of the amount realized. File 2011 taxes online turbotax   The basis of the replacement property is its cost, reduced by the postponed gain. File 2011 taxes online turbotax Also, if your replacement property is stock in a corporation that owns property similar or related in service or use, the corporation generally will reduce its basis in its assets by the amount by which you reduce your basis in the stock. File 2011 taxes online turbotax See Controlling interest in a corporation, later. File 2011 taxes online turbotax You can use Part 3 of Table 1-3 to figure the gain you must report and your postponed gain. File 2011 taxes online turbotax Postponing gain on severance damages. File 2011 taxes online turbotax   If you received severance damages for part of your property because another part was condemned and you buy replacement property, you can elect to postpone reporting gain. File 2011 taxes online turbotax See Treatment of severance damages, earlier. File 2011 taxes online turbotax You can postpone reporting all your gain if the replacement property costs at least as much as your net severance damages plus your net condemnation award (if resulting in gain). File 2011 taxes online turbotax   You also can make this election if you spend the severance damages, together with other money you received for the condemned property (if resulting in gain), to acquire nearby property that will allow you to continue your business. File 2011 taxes online turbotax If suitable nearby property is not available and you are forced to sell the remaining property and relocate in order to continue your business, see Postponing gain on the sale of related property, next. File 2011 taxes online turbotax   If you restore the remaining property to its former usefulness, you can treat the cost of restoring it as the cost of replacement property. File 2011 taxes online turbotax Postponing gain on the sale of related property. File 2011 taxes online turbotax   If you sell property that is related to the condemned property and then buy replacement property, you can elect to postpone reporting gain on the sale. File 2011 taxes online turbotax You must meet the requirements explained earlier under Related property voluntarily sold. File 2011 taxes online turbotax You can postpone reporting all your gain if the replacement property costs at least as much as the amount realized from the sale plus your net condemnation award (if resulting in gain) plus your net severance damages, if any (if resulting in gain). File 2011 taxes online turbotax Buying replacement property from a related person. File 2011 taxes online turbotax   Certain taxpayers cannot postpone reporting gain from a condemnation if they buy the replacement property from a related person. File 2011 taxes online turbotax For information on related persons, see Nondeductible Loss under Sales and Exchanges Between Related Persons in chapter 2. File 2011 taxes online turbotax   This rule applies to the following taxpayers. File 2011 taxes online turbotax C corporations. File 2011 taxes online turbotax Partnerships in which more than 50% of the capital or profits interest is owned by  C corporations. File 2011 taxes online turbotax All others (including individuals, partnerships (other than those in (2)), and S corporations) if the total realized gain for the tax year on all involuntarily converted properties on which there is realized gain of more than $100,000. File 2011 taxes online turbotax   For taxpayers described in (3) above, gains cannot be offset with any losses when determining whether the total gain is more than $100,000. File 2011 taxes online turbotax If the property is owned by a partnership, the $100,000 limit applies to the partnership and each partner. File 2011 taxes online turbotax If the property is owned by an S corporation, the $100,000 limit applies to the S corporation and each shareholder. File 2011 taxes online turbotax Exception. File 2011 taxes online turbotax   This rule does not apply if the related person acquired the property from an unrelated person within the replacement period. File 2011 taxes online turbotax Advance payment. File 2011 taxes online turbotax   If you pay a contractor in advance to build your replacement property, you have not bought replacement property unless it is finished before the end of the replacement period (discussed later). File 2011 taxes online turbotax Replacement property. File 2011 taxes online turbotax   To postpone reporting gain, you must buy replacement property for the specific purpose of replacing your condemned property. File 2011 taxes online turbotax You do not have to use the actual funds from the condemnation award to acquire the replacement property. File 2011 taxes online turbotax Property you acquire by gift or inheritance does not qualify as replacement property. File 2011 taxes online turbotax Similar or related in service or use. File 2011 taxes online turbotax   Your replacement property must be similar or related in service or use to the property it replaces. File 2011 taxes online turbotax   If the condemned property is real property you held for productive use in your trade or business or for investment (other than property held mainly for sale), like-kind property to be held either for productive use in trade or business or for investment will be treated as property similar or related in service or use. File 2011 taxes online turbotax For a discussion of like-kind property, see Like-Kind Property under Like-Kind Exchanges, later. File 2011 taxes online turbotax Owner-user. File 2011 taxes online turbotax   If you are an owner-user, similar or related in service or use means that replacement property must function in the same way as the property it replaces. File 2011 taxes online turbotax Example. File 2011 taxes online turbotax Your home was condemned and you invested the proceeds from the condemnation in a grocery store. File 2011 taxes online turbotax Your replacement property is not similar or related in service or use to the condemned property. File 2011 taxes online turbotax To be similar or related in service or use, your replacement property must also be used by you as your home. File 2011 taxes online turbotax Owner-investor. File 2011 taxes online turbotax   If you are an owner-investor, similar or related in service or use means that any replacement property must have the same relationship of services or uses to you as the property it replaces. File 2011 taxes online turbotax You decide this by determining all the following information. File 2011 taxes online turbotax Whether the properties are of similar service to you. File 2011 taxes online turbotax The nature of the business risks connected with the properties. File 2011 taxes online turbotax What the properties demand of you in the way of management, service, and relations to your tenants. File 2011 taxes online turbotax Example. File 2011 taxes online turbotax You owned land and a building you rented to a manufacturing company. File 2011 taxes online turbotax The building was condemned. File 2011 taxes online turbotax During the replacement period, you had a new building built on other land you already owned. File 2011 taxes online turbotax You rented out the new building for use as a wholesale grocery warehouse. File 2011 taxes online turbotax The replacement property is also rental property, so the two properties are considered similar or related in service or use if there is a similarity in all the following areas. File 2011 taxes online turbotax Your management activities. File 2011 taxes online turbotax The amount and kind of services you provide to your tenants. File 2011 taxes online turbotax The nature of your business risks connected with the properties. File 2011 taxes online turbotax Leasehold replaced with fee simple property. File 2011 taxes online turbotax   Fee simple property you will use in your trade or business or for investment can qualify as replacement property that is similar or related in service or use to a condemned leasehold if you use it in the same business and for the identical purpose as the condemned leasehold. File 2011 taxes online turbotax   A fee simple property interest generally is a property interest that entitles the owner to the entire property with unconditional power to dispose of it during his or her lifetime. File 2011 taxes online turbotax A leasehold is property held under a lease, usually for a term of years. File 2011 taxes online turbotax Outdoor advertising display replaced with real property. File 2011 taxes online turbotax   You can elect to treat an outdoor advertising display as real property. File 2011 taxes online turbotax If you make this election and you replace the display with real property in which you hold a different kind of interest, your replacement property can qualify as like-kind property. File 2011 taxes online turbotax For example, real property bought to replace a destroyed billboard and leased property on which the billboard was located qualify as property of a like-kind. File 2011 taxes online turbotax   You can make this election only if you did not claim a section 179 deduction for the display. File 2011 taxes online turbotax You cannot cancel this election unless you get the consent of the IRS. File 2011 taxes online turbotax   An outdoor advertising display is a sign or device rigidly assembled and permanently attached to the ground, a building, or any other permanent structure used to display a commercial or other advertisement to the public. File 2011 taxes online turbotax Substituting replacement property. File 2011 taxes online turbotax   Once you designate certain property as replacement property on your tax return, you cannot substitute other qualified property. File 2011 taxes online turbotax But, if your previously designated replacement property does not qualify, you can substitute qualified property if you acquire it within the replacement period. File 2011 taxes online turbotax Controlling interest in a corporation. File 2011 taxes online turbotax   You can replace property by acquiring a controlling interest in a corporation that owns property similar or related in service or use to your condemned property. File 2011 taxes online turbotax You have controlling interest if you own stock having at least 80% of the combined voting power of all classes of stock entitled to vote and at least 80% of the total number of shares of all other classes of stock of the corporation. File 2011 taxes online turbotax Basis adjustment to corporation's property. File 2011 taxes online turbotax   The basis of property held by the corporation at the time you acquired control must be reduced by your postponed gain, if any. File 2011 taxes online turbotax You are not required to reduce the adjusted basis of the corporation's properties below your adjusted basis in the corporation's stock (determined after reduction by your postponed gain). File 2011 taxes online turbotax   Allocate this reduction to the following classes of property in the order shown below. File 2011 taxes online turbotax Property that is similar or related in service or use to the condemned property. File 2011 taxes online turbotax Depreciable property not reduced in (1). File 2011 taxes online turbotax All other property. File 2011 taxes online turbotax If two or more properties fall in the same class, allocate the reduction to each property in proportion to the adjusted basis of all the properties in that class. File 2011 taxes online turbotax The reduced basis of any single property cannot be less than zero. File 2011 taxes online turbotax Main home replaced. File 2011 taxes online turbotax   If your gain from a condemnation of your main home is more than you can exclude from your income (see Main home condemned under Gain or Loss From Condemnations, earlier), you can postpone reporting the rest of the gain by buying replacement property that is similar or related in service or use. File 2011 taxes online turbotax The replacement property must cost at least as much as the amount realized from the condemnation minus the excluded gain. File 2011 taxes online turbotax   You must reduce the basis of your replacement property by the postponed gain. File 2011 taxes online turbotax Also, if you postpone reporting any part of your gain under these rules, you are treated as having owned and used the replacement property as your main home for the period you owned and used the condemned property as your main home. File 2011 taxes online turbotax Example. File 2011 taxes online turbotax City authorities condemned your home that you had used as a personal residence for 5 years prior to the condemnation. File 2011 taxes online turbotax The city paid you a condemnation award of $400,000. File 2011 taxes online turbotax Your adjusted basis in the property was $80,000. File 2011 taxes online turbotax You realize a gain of $320,000 ($400,000 − $80,000). File 2011 taxes online turbotax You purchased a new home for $100,000. File 2011 taxes online turbotax You can exclude $250,000 of the realized gain from your gross income. File 2011 taxes online turbotax The amount realized is then treated as being $150,000 ($400,000 − $250,000) and the gain realized is $70,000 ($150,000 amount realized − $80,000 adjusted basis). File 2011 taxes online turbotax You must recognize $50,000 of the gain ($150,000 amount realized − $100,000 cost of new home). File 2011 taxes online turbotax The remaining $20,000 of realized gain is postponed. File 2011 taxes online turbotax Your basis in the new home is $80,000 ($100,000 cost − $20,000 gain postponed). File 2011 taxes online turbotax Replacement period. File 2011 taxes online turbotax   To postpone reporting your gain from a condemnation, you must buy replacement property within a certain period of time. File 2011 taxes online turbotax This is the replacement period. File 2011 taxes online turbotax   The replacement period for a condemnation begins on the earlier of the following dates. File 2011 taxes online turbotax The date on which you disposed of the condemned property. File 2011 taxes online turbotax The date on which the threat of condemnation began. File 2011 taxes online turbotax   The replacement period generally ends 2 years after the end of the first tax year in which any part of the gain on the condemnation is realized. File 2011 taxes online turbotax However, see the exceptions below. File 2011 taxes online turbotax Three-year replacement period for certain property. File 2011 taxes online turbotax   If real property held for use in a trade or business or for investment (not including property held primarily for sale) is condemned, the replacement period ends 3 years after the end of the first tax year in which any part of the gain on the condemnation is realized. File 2011 taxes online turbotax However, this 3-year replacement period cannot be used if you replace the condemned property by acquiring control of a corporation owning property that is similar or related in service or use. File 2011 taxes online turbotax Five-year replacement period for certain property. File 2011 taxes online turbotax   The replacement period ends 5 years after the end of the first tax year in which any part of the gain is realized on the compulsory or involuntary conversion of the following qualified property. File 2011 taxes online turbotax Property in any Midwestern disaster area compulsorily or involuntarily converted on or after the applicable disaster date as a result of severe storms, tornadoes, or flooding, but only if substantially all of the use of the replacement property is in a Midwestern disaster area. File 2011 taxes online turbotax Property in the Kansas disaster area compulsorily or involuntarily converted after May 3, 2007, but only if substantially all of the use of the replacement property is in the Kansas disaster area. File 2011 taxes online turbotax Property in the Hurricane Katrina disaster area compulsorily or involuntarily converted after August 24, 2005, as a result of Hurricane Katrina, but only if substantially all of the use of the replacement property is in the Hurricane Katrina disaster area. File 2011 taxes online turbotax Extended replacement period for taxpayers affected by other federally declared disasters. File 2011 taxes online turbotax    If you are affected by a federally declared disaster, the IRS may grant disaster relief by extending the periods to perform certain tax-related acts for 2013, including the replacement period, by up to one year. File 2011 taxes online turbotax For more information visit www. File 2011 taxes online turbotax irs. File 2011 taxes online turbotax gov/uac/Tax-Relief-in-Disaster-Situations. File 2011 taxes online turbotax Weather-related sales of livestock in an area eligible for federal assistance. File 2011 taxes online turbotax   Generally, if the sale or exchange of livestock is due to drought, flood, or other weather-related conditions in an area eligible for federal assistance, the replacement period ends 4 years after the close of the first tax year in which you realize any part of your gain from the sale or exchange. File 2011 taxes online turbotax    If the weather-related conditions continue for longer than 3 years, the replacement period may be extended on a regional basis until the end of your first drought-free year for the applicable region. File 2011 taxes online turbotax See Notice 2006-82. File 2011 taxes online turbotax You can find Notice 2006-82 on page 529 of Internal Revenue Bulletin 2006-39 at www. File 2011 taxes online turbotax irs. File 2011 taxes online turbotax gov/irb/2006-39_IRB/ar13. File 2011 taxes online turbotax html. File 2011 taxes online turbotax    Each year, the IRS publishes a list of counties, districts, cities, or parishes for which exceptional, extreme, or severe drought was reported during the preceding 12 months. File 2011 taxes online turbotax If you qualified for a 4-year replacement period for livestock sold or exchanged on account of drought and your replacement period is scheduled to expire at the end of 2013 (or at the end of the tax year that includes August 31, 2013), see Notice 2013-62. File 2011 taxes online turbotax You can find Notice 2013-62 on page 466 of Internal Revenue Bulletin 2013-45 at www. File 2011 taxes online turbotax irs. File 2011 taxes online turbotax gov/irb/2013-45_IRB/ar04. File 2011 taxes online turbotax html. File 2011 taxes online turbotax The replacement period will be extended under Notice 2006-82 if the applicable region is on the list included in Notice 2013-62. File 2011 taxes online turbotax Determining when gain is realized. File 2011 taxes online turbotax   If you are a cash basis taxpayer, you realize gain when you receive payments that are more than your basis in the property. File 2011 taxes online turbotax If the condemning authority makes deposits with the court, you realize gain when you withdraw (or have the right to withdraw) amounts that are more than your basis. File 2011 taxes online turbotax   This applies even if the amounts received are only partial or advance payments and the full award has not yet been determined. File 2011 taxes online turbotax A replacement will be too late if you wait for a final determination that does not take place in the applicable replacement period after you first realize gain. File 2011 taxes online turbotax   For accrual basis taxpayers, gain (if any) accrues in the earlier year when either of the following occurs. File 2011 taxes online turbotax All events have occurred that fix the right to the condemnation award and the amount can be determined with reasonable accuracy. File 2011 taxes online turbotax All or part of the award is actually or constructively received. File 2011 taxes online turbotax For example, if you have an absolute right to a part of a condemnation award when it is deposited with the court, the amount deposited accrues in the year the deposit is made even though the full amount of the award is still contested. File 2011 taxes online turbotax Replacement property bought before the condemnation. File 2011 taxes online turbotax   If you buy your replacement property after there is a threat of condemnation but before the actual condemnation and you still hold the replacement property at the time of the condemnation, you have bought your replacement property within the replacement period. File 2011 taxes online turbotax Property you acquire before there is a threat of condemnation does not qualify as replacement property acquired within the replacement period. File 2011 taxes online turbotax Example. File 2011 taxes online turbotax On April 3, 2012, city authorities notified you that your property would be condemned. File 2011 taxes online turbotax On June 5, 2012, you acquired property to replace the property to be condemned. File 2011 taxes online turbotax You still had the new property when the city took possession of your old property on September 4, 2013. File 2011 taxes online turbotax You have made a replacement within the replacement period. File 2011 taxes online turbotax Extension. File 2011 taxes online turbotax   You can request an extension of the replacement period from the IRS director for your area. File 2011 taxes online turbotax You should apply before the end of the replacement period. File 2011 taxes online turbotax Your request should explain in detail why you need an extension. File 2011 taxes online turbotax The IRS will consider a request filed within a reasonable time after the replacement period if you can show reasonable cause for the delay. File 2011 taxes online turbotax An extension of the replacement period will be granted if you can show reasonable cause for not making the replacement within the regular period. File 2011 taxes online turbotax   Ordinarily, requests for extensions are granted near the end of the replacement period or the extended replacement period. File 2011 taxes online turbotax Extensions are usually limited to a period of 1 year or less. File 2011 taxes online turbotax The high market value or scarcity of replacement property is not a sufficient reason for granting an extension. File 2011 taxes online turbotax If your replacement property is being built and you clearly show that the replacement or restoration cannot be made within the replacement peri