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 Online 1040ez

File 1040ez OnlinePrior Year Tax ReturnFederal Tax Form 1040ez1090ezCheapest State Tax FilingFree 1040x SoftwareHow To Revise Tax ReturnVita Income Tax Bakersfield CaFederal Income Tax Ez FormWhere To Send 2011 Tax ReturnFree Filing State TaxesI Need To File My 2009 Taxes For FreeFiling 2012 Taxes OnlineAmended Tax Return More:label_amended_20tax_20return More:bizfinancePrior Year TaxesAmended Tax ReturnsHow To File A Tax AmendmentFile State For FreePa State Tax Form 2012Free Tax Software2012 1040 Tax ReturnFile Amended Return2012 Amended Tax FormsHow To File Taxes1040 Ez Tax Form 2012How To File An Extension For 2012 TaxesHow To File 2012 Tax Return In 20142011 1040 EzOnline 1040xHow To File Amended Tax Return For 2010Irs Form 1040 EzFederal Tax 1040ezIrs Website For For 1040ezIrs Forms For 2011 Tax YearFree E File State Tax Return1040ez GovComplete 2005 Taxes OnlineSearch IrsFree 2012 Federal Tax FilingFederal Income Tax Return

File Online 1040ez

File online 1040ez 5. File online 1040ez   Manufacturers Taxes Table of Contents Importer. File online 1040ez Use considered sale. File online 1040ez Lease considered sale. File online 1040ez Bonus goods. File online 1040ez Taxable Event ExemptionsRequirements for Exempt Sales Credits or Refunds Sport Fishing EquipmentRelated person. File online 1040ez Bows, Quivers, Broadheads, and Points Arrow ShaftsExemption for certain wooden arrows. File online 1040ez CoalExported. File online 1040ez Taxable TiresQualifying intercity or local bus. File online 1040ez Qualifying school bus. File online 1040ez Gas Guzzler TaxVehicles not subject to tax. File online 1040ez Imported automobiles. File online 1040ez VaccinesConditions to allowance. File online 1040ez Taxable Medical Devices The following discussion of manufacturers taxes applies to the tax on: Sport fishing equipment; Fishing rods and fishing poles; Electric outboard motors; Fishing tackle boxes; Bows, quivers, broadheads, and points; Arrow shafts; Coal; Taxable tires; Gas guzzler automobiles; and Vaccines. File online 1040ez Manufacturer. File online 1040ez   The term “manufacturer” includes a producer or importer. File online 1040ez A manufacturer is any person who produces a taxable article from new or raw material, or from scrap, salvage, or junk material, by processing or changing the form of an article or by combining or assembling two or more articles. File online 1040ez If you furnish the materials and keep title to those materials and to the finished article, you are considered the manufacturer even though another person actually manufactures the taxable article. File online 1040ez   A manufacturer who sells a taxable article in knockdown (unassembled) condition is liable for the tax. File online 1040ez The person who buys these component parts and assembles a taxable article may also be liable for tax as a further manufacturer depending on the labor, material, and overhead required to assemble the completed article if the article is assembled for business use. File online 1040ez Importer. File online 1040ez   An importer is a person who brings a taxable article into the United States, or withdraws a taxable article from a customs bonded warehouse for sale or use in the United States. File online 1040ez Sale. File online 1040ez   A sale is the transfer of the title to, or the substantial incidents of ownership in, an article to a buyer for consideration that may consist of money, services, or other things. File online 1040ez Use considered sale. File online 1040ez   A manufacturer who uses a taxable article is liable for the tax in the same manner as if it were sold. File online 1040ez Lease considered sale. File online 1040ez   The lease of an article (including any renewal or extension of the lease) by the manufacturer is generally considered a taxable sale. File online 1040ez However, for the gas guzzler tax, only the first lease (excluding any renewal or extension) of the automobile by the manufacturer is considered a sale. File online 1040ez Manufacturers taxes based on sale price. File online 1040ez   The manufacturers taxes imposed on the sale of sport fishing equipment, electric outboard motors, and bows are based on the sale price of the article. File online 1040ez The taxes imposed on coal are based either on the sale price or the weight. File online 1040ez   The price for which an article is sold includes the total consideration paid for the article, whether that consideration is in the form of money, services, or other things. File online 1040ez However, you include certain charges made when a taxable article is sold and you exclude others. File online 1040ez To figure the price on which you base the tax, use the following rules. File online 1040ez Include both the following charges in the price. File online 1040ez Any charge for coverings or containers (regardless of their nature). File online 1040ez Any charge incident to placing the article in a condition packed ready for shipment. File online 1040ez Exclude all the following amounts from the price. File online 1040ez The manufacturers excise tax, whether or not it is stated as a separate charge. File online 1040ez The transportation charges pursuant to the sale. File online 1040ez The cost of transportation of goods to a warehouse before their bona fide sale is not excludable. File online 1040ez Delivery, insurance, installation, retail dealer preparation charges, and other charges you incur in placing the article in the hands of the purchaser under a bona fide sale. File online 1040ez Discounts, rebates, and similar allowances actually granted to the purchaser. File online 1040ez Local advertising charges. File online 1040ez A charge made separately when the article is sold and that qualifies as a charge for “local advertising” may, within certain limits, be excluded from the sale price. File online 1040ez Charges for warranty paid at the purchaser's option. File online 1040ez However, a charge for a warranty of an article that the manufacturer requires the purchaser to pay to obtain the article is included in the sale price on which the tax is figured. File online 1040ez Bonus goods. File online 1040ez   Allocate the sale price if you give free nontaxable goods with the purchase of taxable merchandise. File online 1040ez Figure the tax only on the sale price attributable to the taxable articles. File online 1040ez Example. File online 1040ez A manufacturer sells a quantity of taxable articles and gives the purchaser certain nontaxable articles as a bonus. File online 1040ez The sale price of the shipment is $1,500. File online 1040ez The normal sale price is $2,000: $1,500 for the taxable articles and $500 for the nontaxable articles. File online 1040ez Since the taxable items represent 75% of the normal sale price, the tax is based on 75% of the actual sale price, or $1,125 (75% of $1,500). File online 1040ez The remaining $375 is allocated to the nontaxable articles. File online 1040ez Taxable Event Tax attaches when the title to the article sold passes from the manufacturer to the buyer. File online 1040ez When the title passes depends on the intention of the parties as gathered from the contract of sale. File online 1040ez In the absence of expressed intention, the legal rules of presumption followed in the jurisdiction where the sale occurs determine when title passes. File online 1040ez If the taxable article is used by the manufacturer, the tax attaches at the time use begins. File online 1040ez The manufacturer is liable for the tax. File online 1040ez Partial payments. File online 1040ez   The tax applies to each partial payment received when taxable articles are: Leased, Sold conditionally, Sold on installment with chattel mortgage, or Sold on installment with title to pass in the future. File online 1040ez To figure the tax, multiply the partial payment by the tax rate in effect at the time of the payment. File online 1040ez Exemptions The following sales by the manufacturer are exempt from the manufacturers tax. File online 1040ez Sale of an article to a state or local government for the exclusive use of the state or local government. File online 1040ez This exemption does not apply to the taxes on coal, gas guzzlers, and vaccines. File online 1040ez State is defined in Definitions in chapter 1. File online 1040ez Sale of an article to a nonprofit educational organization for its exclusive use. File online 1040ez This exemption does not apply to the taxes on coal, gas guzzlers, and vaccines. File online 1040ez Nonprofit educational organization is defined under Communications Tax in chapter 4. File online 1040ez Sale of an article to a qualified blood collector organization. File online 1040ez This exemption does not apply to gas guzzlers, recreational equipment, and vaccines. File online 1040ez Qualified blood collector organizations are defined under Communications Tax in chapter 4. File online 1040ez Sale of an article for use by the purchaser as supplies for vessels. File online 1040ez This exemption does not apply to the taxes on coal and vaccines. File online 1040ez Supplies for vessels means ships' stores, sea stores, or legitimate equipment on vessels of war of the United States or any foreign nation, vessels employed in the fisheries or whaling business, or vessels actually engaged in foreign trade. File online 1040ez Sale of an article for use by the purchaser for further manufacture, or for resale by the purchaser to a second purchaser for use by the second purchaser for further manufacture. File online 1040ez This exemption does not apply to the tax on coal and tires. File online 1040ez Use for further manufacture means use in the manufacture or production of an article subject to the manufacturers excise taxes. File online 1040ez If you buy articles tax free and resell or use them other than in the manufacture of another article, you are liable for the tax on their resale or use just as if you had manufactured and sold them. File online 1040ez Sale of an article for export or for resale by the purchaser to a second purchaser for export. File online 1040ez The article may be exported to a foreign country or to a possession of the United States. File online 1040ez A vaccine shipped to a possession of the United States is not considered to be exported. File online 1040ez If an article is sold tax free for export and the manufacturer does not receive proof of export, described later, the manufacturer is liable for the tax. File online 1040ez Sales of articles of native Indian handicraft, such as bows and arrow shafts, manufactured by Indians on reservations, in Indian schools, or under U. File online 1040ez S. File online 1040ez jurisdiction in Alaska. File online 1040ez For tire exemptions, see section 4221(e)(2). File online 1040ez Requirements for Exempt Sales The following requirements must be met for a sale to be exempt from the manufacturers tax. File online 1040ez Registration requirements. File online 1040ez   The manufacturer, first purchaser, and second purchaser in the case of resales must be registered. File online 1040ez See the Form 637 instructions for more information. File online 1040ez Exceptions to registration requirements. File online 1040ez   Registration is not required for: State or local governments, Foreign purchasers of articles sold or resold for export, The United States, or Parties to a sale of supplies for vessels and aircraft. File online 1040ez Certification requirement. File online 1040ez   If the purchaser is required to be registered, the purchaser must give the manufacturer its registration number and certify the exempt purpose for which the article will be used. File online 1040ez The information must be in writing and may be noted on the purchase order or other document furnished by the purchaser to the seller in connection with the sale. File online 1040ez   For a sale to a state or local government, an exemption certificate must be signed by an officer or employee authorized by the state or local government. File online 1040ez See Regulations section 48. File online 1040ez 4221-5(c) for the certificate requirements. File online 1040ez   For sales for use as supplies for vessels and aircraft, if the manufacturer and purchaser are not registered, the owner or agent of the vessel must provide an exemption certificate to the manufacturer before or at the time of sale. File online 1040ez See Regulations section 48. File online 1040ez 4221-4(d) for the certificate requirements. File online 1040ez Proof of export requirement. File online 1040ez   Within 6 months of the date of sale or shipment by the manufacturer, whichever is earlier, the manufacturer must receive proof of exportation. File online 1040ez See Regulations section 48. File online 1040ez 4221-3(d) for evidence that qualifies as proof of exportation. File online 1040ez Proof of resale for further manufacture requirement. File online 1040ez   Within 6 months of the date of sale or shipment by the manufacturer, whichever is earlier, the manufacturer must receive proof that the article has been resold for use in further manufacture. File online 1040ez See Regulations section 48. File online 1040ez 4221-2(c) for evidence that qualifies as proof of resale. File online 1040ez Information to be furnished to purchaser. File online 1040ez   The manufacturer must indicate to the purchaser that the articles normally would be subject to tax and are being sold tax free for an exempt purpose because the purchaser has provided the required certificate. File online 1040ez Credits or Refunds The manufacturer may be eligible to obtain a credit or refund of the manufacturers tax for certain uses, sales, exports, and price readjustments. File online 1040ez The claim must set forth in detail the facts upon which the claim is based. File online 1040ez Uses, sales, and exports. File online 1040ez   A credit or refund (without interest) of the manufacturers taxes may be allowable if a tax-paid article is, by any person: Exported, Used or sold for use as supplies for vessels (except for coal and vaccines), Sold to a state or local government for its exclusive use (except for coal, gas guzzlers, and vaccines), Sold to a nonprofit educational organization for its exclusive use (except for coal, gas guzzlers, and vaccines), Sold to a qualified blood collector organization for its exclusive use (except for gas guzzlers, recreational equipment, and vaccines), or Used for further manufacture of another article subject to the manufacturers taxes (except for coal). File online 1040ez Export. File online 1040ez   If a tax-paid article is exported, the exporter or shipper may claim a credit or refund if the manufacturer waives its right to claim the credit or refund. File online 1040ez In the case of a tax-paid article used to make another taxable article, the subsequent manufacturer may claim the credit or refund. File online 1040ez Price readjustments. File online 1040ez   In addition, a credit or refund (without interest) may be allowable for a tax-paid article for which the price is readjusted by reason of return or repossession of the article or a bona fide discount, rebate, or allowance for taxes based on price. File online 1040ez Conditions to allowance. File online 1040ez   To claim a credit or refund in the case of export; supplies for vessels; or sales to a state or local government, nonprofit educational organization, or qualified blood collector organization; the person who paid the tax must certify on the claim that one of the following applies and that the claimant has the required supporting information. File online 1040ez The claimant sold the article at a tax-excluded price. File online 1040ez The person has repaid, or agreed to repay, the tax to the ultimate vendor of the article. File online 1040ez The person has obtained the written consent of the ultimate vendor to make the claim. File online 1040ez The ultimate vendor generally is the seller making the sale that gives rise to the overpayment of tax. File online 1040ez Claim for further manufacture. File online 1040ez   To claim a credit or refund for further manufacture, the claimant must include a statement that contains the following. File online 1040ez The name and address of the manufacturer and the date of payment. File online 1040ez An identification of the article for which the credit or refund is claimed. File online 1040ez The amount of tax paid on the article and the date on which it was paid. File online 1040ez Information indicating that the article was used as material in the manufacture or production of, or as a component part of, a second article manufactured or produced by the manufacturer, or was sold on or in connection with, or with the sale of a second article manufactured or produced by the manufacturer. File online 1040ez An identification of the second article. File online 1040ez   For claims by the exporter or shipper, the claim must contain the proof of export and a statement signed by the person that paid the tax waiving the right to claim a credit or refund. File online 1040ez The statement must include the amount of tax paid, the date of payment, and the office to which it was paid. File online 1040ez Claim for price readjustment. File online 1040ez   To claim a credit or refund for a price readjustment, the person who paid the tax must include with the claim, a statement that contains the following. File online 1040ez A description of the circumstances that gave rise to the price readjustment. File online 1040ez An identification of the article whose price was readjusted. File online 1040ez The price at which the article was sold. File online 1040ez The amount of tax paid on the article and the date on which it was paid. File online 1040ez The name and address of the purchaser. File online 1040ez The amount repaid to the purchaser or credited to the purchaser's account. File online 1040ez Sport Fishing Equipment A tax of 10% of the sale price is imposed on many articles of sport fishing equipment sold by the manufacturer. File online 1040ez This includes any parts or accessories sold on or in connection with the sale of those articles. File online 1040ez Pay this tax with Form 720. File online 1040ez No tax deposits are required. File online 1040ez Sport fishing equipment includes all the following items. File online 1040ez Fishing rods and poles (and component parts), fishing reels, fly fishing lines, and other fishing lines not over 130 pounds test, fishing spears, spear guns, and spear tips. File online 1040ez Items of terminal tackle, including leaders, artificial lures, artificial baits, artificial flies, fishing hooks, bobbers, sinkers, snaps, drayles, and swivels (but not including natural bait or any item of terminal tackle designed for use and ordinarily used on fishing lines not described in (1)). File online 1040ez The following items of fishing supplies and accessories: fish stringers, creels, bags, baskets, and other containers designed to hold fish, portable bait containers, fishing vests, landing nets, gaff hooks, fishing hook disgorgers, and dressing for fishing lines and artificial flies. File online 1040ez Fishing tip-ups and tilts. File online 1040ez Fishing rod belts, fishing rodholders, fishing harnesses, fish fighting chairs, fishing outriggers, and fishing downriggers. File online 1040ez See Revenue Ruling 88-52 in Cumulative Bulletin 1988-1 for a more complete description of the items of taxable equipment. File online 1040ez Fishing rods and fishing poles. File online 1040ez   The tax on fishing rods and fishing poles (and component parts) is 10% of the sales price not to exceed $10 per article. File online 1040ez The tax is paid by the manufacturer, producer, or importer. File online 1040ez Fishing tackle boxes. File online 1040ez   The tax on fishing tackle boxes is 3% of the sales price. File online 1040ez The tax is paid by the manufacturer, producer, or importer. File online 1040ez Electric outboard boat motors. File online 1040ez   A tax of 3% of the sale price is imposed on the sale by the manufacturer of electric outboard motors. File online 1040ez This includes any parts or accessories sold on or in connection with the sale of those articles. File online 1040ez Certain equipment resale. File online 1040ez   The tax on the sale of sport fishing equipment is imposed a second time under the following circumstances. File online 1040ez If the manufacturer sells a taxable article to any person, the manufacturer is liable for the tax. File online 1040ez If the purchaser or any other person then sells it to a person who is related (discussed next) to the manufacturer, that related person is liable for a second tax on any subsequent sale of the article. File online 1040ez The second tax, however, is not imposed if the constructive sale price rules under section 4216(b) apply to the sale by the manufacturer. File online 1040ez   If the second tax is imposed, a credit for tax previously paid by the manufacturer is available provided the related person can document the tax paid. File online 1040ez The documentation requirement is generally satisfied only through submission of copies of actual records of the person that previously paid the tax. File online 1040ez Related person. File online 1040ez   For the tax on sport fishing equipment, a person is a related person of the manufacturer if that person and the manufacturer have a relationship described in section 465(b)(3)(C). File online 1040ez Bows, Quivers, Broadheads, and Points The tax on bows is 11% (. File online 1040ez 11) of the sales price. File online 1040ez The tax is paid by the manufacturer, producer, or importer. File online 1040ez It applies to bows having a peak draw weight of 30 pounds or more. File online 1040ez The tax is also imposed on the sale of any part or accessory suitable for inclusion in or attachment to a taxable bow and any quiver, broadhead, or point suitable for use with arrows described below. File online 1040ez Pay this tax with Form 720. File online 1040ez No tax deposits are required. File online 1040ez Arrow Shafts The tax on arrow shafts is listed on Form 720. File online 1040ez The tax is paid by the manufacturer, producer, or importer of any arrow shaft (whether sold separately or incorporated as part of a finished or unfinished product) of a type used in the manufacture of any arrow that after its assembly meets either of the following conditions. File online 1040ez It measures 18 inches or more in overall length. File online 1040ez It measures less than 18 inches in overall length but is suitable for use with a taxable bow, described earlier. File online 1040ez Exemption for certain wooden arrows. File online 1040ez   After October 3, 2008, the tax does not apply to any shaft made of all natural wood with no laminations or artificial means of enhancing the spine of such shaft (whether sold separately or incorporated as part of a finished or unfinished product) and used in the manufacture of any arrow that after its assembly meets both of the following conditions. File online 1040ez It measures 5/16 of an inch or less in diameter. File online 1040ez It is not suitable for use with a taxable bow, described earlier. File online 1040ez Pay this tax with Form 720. File online 1040ez No tax deposits are required. File online 1040ez Coal A tax is imposed on the first sale of coal mined in the United States. File online 1040ez The producer of the coal is liable for the tax. File online 1040ez The producer is the person who has vested ownership of the coal under state law immediately after the coal is severed from the ground. File online 1040ez Determine vested ownership without regard to any contractual arrangement for the sale or other disposition of the coal or the payment of any royalties between the producer and third parties. File online 1040ez A producer includes any person who extracts coal from coal waste refuse piles (or from the silt waste product that results from the wet washing of coal). File online 1040ez The tax is not imposed on coal extracted from a riverbed by dredging if it can be shown that the coal has been taxed previously. File online 1040ez Tax rates. File online 1040ez   The tax on underground-mined coal is the lower of: $1. File online 1040ez 10 a ton, or 4. File online 1040ez 4% of the sale price. File online 1040ez   The tax on surface-mined coal is the lower of: 55 cents a ton, or 4. File online 1040ez 4% of the sale price. File online 1040ez   Coal will be taxed at the 4. File online 1040ez 4% rate if the selling price is less than $25 a ton for underground-mined coal and less than $12. File online 1040ez 50 a ton for surface-mined coal. File online 1040ez Apply the tax proportionately if a sale or use includes a portion of a ton. File online 1040ez Example. File online 1040ez If you sell 21,000 pounds (10. File online 1040ez 5 tons) of coal from an underground mine for $525, the price per ton is $50. File online 1040ez The tax is $1. File online 1040ez 10 × 10. File online 1040ez 5 tons ($11. File online 1040ez 55). File online 1040ez Coal production. File online 1040ez   Coal is produced from surface mines if all geological matter (trees, earth, rock) above the coal is removed before the coal is mined. File online 1040ez Treat coal removed by auger and coal reclaimed from coal waste refuse piles as produced from a surface mine. File online 1040ez   Treat coal as produced from an underground mine when the coal is not produced from a surface mine. File online 1040ez In some cases, a single mine may yield coal from both surface mining and underground mining. File online 1040ez Determine if the coal is from a surface mine or an underground mine for each ton of coal produced and not on a mine-by-mine basis. File online 1040ez Determining tonnage or selling price. File online 1040ez   The producer pays the tax on coal at the time of sale or use. File online 1040ez In figuring the selling price for applying the tax, the point of sale is f. File online 1040ez o. File online 1040ez b. File online 1040ez (free on board) mine or f. File online 1040ez o. File online 1040ez b. File online 1040ez cleaning plant if you clean the coal before selling it. File online 1040ez This applies even if you sell the coal for a delivered price. File online 1040ez The f. File online 1040ez o. File online 1040ez b. File online 1040ez mine or f. File online 1040ez o. File online 1040ez b. File online 1040ez cleaning plant is the point at which you figure the number of tons sold for applying the applicable tonnage rate, and the point at which you figure the sale price for applying the 4. File online 1040ez 4% rate. File online 1040ez   The tax applies to the full amount of coal sold. File online 1040ez However, the IRS allows a calculated reduction of the taxable weight of the coal for the weight of the moisture in excess of the coal's inherent moisture content. File online 1040ez Include in the sale price any additional charge for a freeze-conditioning additive in figuring the tax. File online 1040ez   Do not include in the sales price the excise tax imposed on coal. File online 1040ez Coal used by the producer. File online 1040ez   The tax on coal applies if the coal is used by the producer in other than a mining process. File online 1040ez A mining process means the same for this purpose as for percentage depletion. File online 1040ez For example, the tax does not apply if, before selling the coal, you break it, clean it, size it, or apply any other process considered mining under the rules for depletion. File online 1040ez In this case, the tax applies only when you sell the coal. File online 1040ez The tax does not apply to coal used as fuel in the coal drying process since it is considered to be used in a mining process. File online 1040ez However, the tax does apply when you use the coal as fuel or as an ingredient in making coke since the coal is not used in a mining process. File online 1040ez   You must use a constructive sale price to figure the tax under the 4. File online 1040ez 4% rate if you use the coal in other than a mining process. File online 1040ez Base your constructive sale price on sales of a like kind and grade of coal by you or other producers made f. File online 1040ez o. File online 1040ez b. File online 1040ez mine or cleaning plant. File online 1040ez Normally, you use the same constructive price used to figure your percentage depletion deduction. File online 1040ez Blending. File online 1040ez   If you blend surface-mined coal with underground-mined coal during the cleaning process, you must figure the excise tax on the sale of the blended, cleaned coal. File online 1040ez Figure the tax separately for each type of coal in the blend. File online 1040ez Base the tax on the amount of each type in the blend if you can determine the proportion of each type of coal contained in the final blend. File online 1040ez Base the tax on the ratio of each type originally put into the cleaning process if you cannot determine the proportion of each type of coal in the blend. File online 1040ez However, the tax is limited to 4. File online 1040ez 4% of the sale price per ton of the blended coal. File online 1040ez Exemption from tax. File online 1040ez   The tax does not apply to sales of lignite and imported coal. File online 1040ez The only other exemption from the tax on the sale of coal is for coal exported as discussed next. File online 1040ez Exported. File online 1040ez   The tax does not apply to the sale of coal if the coal is in the stream of export when sold by the producer and the coal is actually exported. File online 1040ez   Coal is in the stream of export when sold by the producer if the sale is a step in the exportation of the coal to its ultimate destination in a foreign country. File online 1040ez For example, coal is in the stream of export when: The coal is loaded on an export vessel and title is transferred from the producer to a foreign purchaser, or The producer sells the coal to an export broker in the United States under terms of a contract showing that the coal is to be shipped to a foreign country. File online 1040ez   Proof of export includes any of the following items. File online 1040ez A copy of the export bill of lading issued by the delivering carrier. File online 1040ez A certificate signed by the export carrier's agent or representative showing actual exportation of the coal. File online 1040ez A certificate of landing signed by a customs officer of the foreign country to which the coal is exported. File online 1040ez If the foreign country does not have a customs administrator, a statement of the foreign consignee showing receipt of the coal. File online 1040ez Taxable Tires Taxable tires are divided into three categories for reporting and figuring the tax as described below. File online 1040ez A tax is imposed on taxable tires sold by the manufacturer, producer, or importer at the rate of $. File online 1040ez 0945 ($. File online 1040ez 04725 in the case of a biasply tire or super single tire) for each 10 pounds of the maximum rated load capacity over 3,500 pounds. File online 1040ez The three categories for reporting the tax and the tax rate are listed below. File online 1040ez Taxable tires other than biasply or super single tires at $. File online 1040ez 0945. File online 1040ez Taxable tires, biasply or super single tires (other than super single tires designed for steering) at $. File online 1040ez 04725. File online 1040ez Taxable tires, super single tires designed for steering at $. File online 1040ez 0945. File online 1040ez A taxable tire is any tire of the type used on highway vehicles if wholly or partially made of rubber and if marked according to federal regulations for highway use. File online 1040ez A biasply tire is a pneumatic tire on which the ply cords that extend to the beads are laid at alternate angles substantially less than 90 degrees to the centerline of the tread. File online 1040ez A super single tire is a tire greater than 13 inches in cross section width designed to replace 2 tires in a dual fitment. File online 1040ez Special rule, manufacturer's retail stores. File online 1040ez   The excise tax on taxable tires is imposed at the time the taxable tires are delivered to the manufacturer-owned retail stores, not at the time of sale. File online 1040ez Tires on imported articles. File online 1040ez   The importer of an article equipped with taxable tires is treated as the manufacturer of the tires and is liable for the taxable tire excise tax when the article is sold (except in the case of an automobile bus chassis or body with tires). File online 1040ez Tires exempt from tax. File online 1040ez   The tax on taxable tires does not apply to the following items. File online 1040ez Domestically recapped or retreaded tires if the tires have been sold previously in the United States and were taxable tires at the time of sale. File online 1040ez Tire carcasses not suitable for commercial use. File online 1040ez Tires for use on qualifying intercity, local, and school buses. File online 1040ez For tax-free treatment, the registration requirements discussed earlier under Requirements for Exempt Sales apply. File online 1040ez Tires sold for the exclusive use of the Department of Defense or the Coast Guard. File online 1040ez Tires of a type used exclusively on mobile machinery. File online 1040ez A taxable tire used on mobile machinery is not exempt from tax. File online 1040ez Qualifying intercity or local bus. File online 1040ez   This is any bus used mainly (more than 50%) to transport the general public for a fee and that either operates on a schedule along regular routes or seats at least 20 adults (excluding the driver). File online 1040ez Qualifying school bus. File online 1040ez   This is any bus substantially all the use (85% or more) of which is to transport students and employees of schools. File online 1040ez Credit or refund. File online 1040ez   A credit or refund (without interest) is allowable on tax-paid tires if the tires have been: Exported; Sold to a state or local government for its exclusive use; Sold to a nonprofit educational organization for its exclusive use (as defined under Communications Tax in chapter 4); Sold to a qualified blood collector organization (as defined under Communications Tax in chapter 4) for its exclusive use in connection with a vehicle the organization certifies will be primarily used in the collection, storage, or transportation of blood; Used or sold for use as supplies for vessels; or Sold in connection with qualified intercity, local, or school buses. File online 1040ez   Also, a credit or refund (without interest) is allowable on tax-paid tires sold by any person on, or in connection with, any other article that is sold or used in an activity listed above. File online 1040ez   The person who paid the tax is eligible to make the claim. File online 1040ez Gas Guzzler Tax Tax is imposed on the sale by the manufacturer of automobiles of a model type that has a fuel economy standard as measured by the Environmental Protection Agency (EPA) of less than 22. File online 1040ez 5 miles per gallon. File online 1040ez If you import an automobile for personal use, you may be liable for this tax. File online 1040ez Figure the tax on Form 6197, as discussed later. File online 1040ez The tax rate is based on fuel economy rating. File online 1040ez The tax rates for the gas guzzler tax are shown on Form 6197. File online 1040ez A person that lengthens an existing automobile is the manufacturer of an automobile. File online 1040ez Automobiles. File online 1040ez   An automobile (including limousines) means any four-wheeled vehicle that is: Rated at an unloaded gross vehicle weight of 6,000 pounds or less, Propelled by an engine powered by gasoline or diesel fuel, and Intended for use mainly on public streets, roads, and highways. File online 1040ez Vehicles not subject to tax. File online 1040ez   For the gas guzzler tax, the following vehicles are not considered automobiles. File online 1040ez Limousines with a gross unloaded vehicle weight of more than 6,000 pounds. File online 1040ez Vehicles operated exclusively on a rail or rails. File online 1040ez Vehicles sold for use and used primarily: As ambulances or combination ambulance-hearses, For police or other law enforcement purposes by federal, state, or local governments, or For firefighting purposes. File online 1040ez Vehicles treated under 49 U. File online 1040ez S. File online 1040ez C. File online 1040ez 32901 (1978) as non-passenger automobiles. File online 1040ez This includes limousines manufactured primarily to transport more than 10 persons. File online 1040ez   The manufacturer can sell a vehicle described in item (3) tax free only when the sale is made directly to a purchaser for the described emergency use and the manufacturer and purchaser (other than a state or local government) are registered. File online 1040ez   Treat an Indian tribal government as a state only if the police or other law enforcement purposes are an essential tribal government function. File online 1040ez Model type. File online 1040ez   Model type is a particular class of automobile as determined by EPA regulations. File online 1040ez Fuel economy. File online 1040ez   Fuel economy is the average number of miles an automobile travels on a gallon of gasoline (or diesel fuel) rounded to the nearest 0. File online 1040ez 1 mile as figured by the EPA. File online 1040ez Imported automobiles. File online 1040ez   The tax also applies to automobiles that do not have a prototype-based fuel economy rating assigned by the EPA. File online 1040ez An automobile imported into the United States without a certificate of conformity to United States emission standards and that has no assigned fuel economy rating must be either: Converted by installation of emission controls to conform in all material respects to an automobile already certified for sale in the United States, or Modified by installation of emission control components and individually tested to demonstrate emission compliance. File online 1040ez   An imported automobile that has been converted to conform to an automobile already certified for sale in the United States may use the fuel economy rating assigned to that certified automobile. File online 1040ez   A fuel economy rating is not generally available for modified imported automobiles because the EPA does not require a highway fuel economy test on them. File online 1040ez A separate highway fuel economy test would be required to devise a fuel economy rating (otherwise the automobile is presumed to fall within the lowest fuel economy rating category). File online 1040ez   For more information about fuel economy ratings for imported automobiles, see Revenue Ruling 86-20 and Revenue Procedure 86-9 in Cumulative Bulletin 1986-1, and Revenue Procedure 87-10 in Cumulative Bulletin 1987-1. File online 1040ez Exemptions. File online 1040ez   No one is exempt from the gas guzzler tax, including the federal government, state and local governments, qualified blood collector organizations, and nonprofit educational organizations. File online 1040ez However, see Vehicles not subject to tax, earlier. File online 1040ez Form 6197. File online 1040ez   Use Form 6197 to figure your tax liability for each quarter. File online 1040ez Attach Form 6197 to your Form 720 for the quarter. File online 1040ez See the Form 6197 instructions for more information and the one-time filing rules. File online 1040ez Credit or refund. File online 1040ez   If the manufacturer paid the tax on a vehicle that is used or resold for an emergency use (see item (3) under Vehicles not subject to tax), the manufacturer can claim a credit or refund. File online 1040ez For information about how to file for credits or refunds, see the Instructions for Form 720 or Form 8849. File online 1040ez Vaccines Tax is imposed on certain vaccines sold by the manufacturer in the United States. File online 1040ez A taxable vaccine means any of the following vaccines. File online 1040ez Any vaccine containing diphtheria toxoid. File online 1040ez Any vaccine containing tetanus toxoid. File online 1040ez Any vaccine containing pertussis bacteria, extracted or partial cell bacteria, or specific pertussis antigens. File online 1040ez Any vaccine containing polio virus. File online 1040ez Any vaccine against measles. File online 1040ez Any vaccine against mumps. File online 1040ez Any vaccine against rubella. File online 1040ez Any vaccine against hepatitis A. File online 1040ez Any vaccine against hepatitis B. File online 1040ez Any vaccine against chicken pox. File online 1040ez Any vaccine against rotavirus gastroenteritis. File online 1040ez Any HIB vaccine. File online 1040ez Any conjugate vaccine against streptococcus pneumoniae. File online 1040ez Any trivalent vaccine against influenza or any other vaccine against influenza. File online 1040ez Any meningococcal vaccine. File online 1040ez Any vaccine against the human papillomavirus. File online 1040ez The effective date for the tax on any vaccine against influenza, other than trivalent influenza vaccines, is the later of August 1, 2013, or the date the Secretary of Health and Human Services lists a vaccine against seasonal influenza for purposes of compensation for any vaccine-related injury or death through the Vaccine Injury Compensation Trust Fund. File online 1040ez The tax is $. File online 1040ez 75 per dose of each taxable vaccine. File online 1040ez The tax per dose on a vaccine that contains more than one taxable vaccine is $. File online 1040ez 75 times the number of taxable vaccines. File online 1040ez Taxable use. File online 1040ez   Any manufacturer (including a governmental entity) that uses a taxable vaccine before it is sold will be liable for the tax in the same manner as if the vaccine was sold by the manufacturer. File online 1040ez Credit or refund. File online 1040ez   A credit or refund (without interest) is available if the vaccine is: Returned to the person who paid the tax (other than for resale), or Destroyed. File online 1040ez The claim for a credit or refund must be filed within 6 months after the vaccine is returned or destroyed. File online 1040ez Conditions to allowance. File online 1040ez   To claim a credit or refund, the person who paid the tax must have repaid or agreed to repay the tax to the ultimate purchaser of the vaccine or obtained the written consent of such purchaser to allowance of the credit or refund. File online 1040ez Taxable Medical Devices Taxable medical devices. File online 1040ez   The tax on the sale of certain medical devices by the manufacturer, producer, or importer of the device is 2. File online 1040ez 3% (. File online 1040ez 023) of the sales price. File online 1040ez A taxable medical device is a device that is listed as a device with the Food and Drug Administration (FDA) under section 510(j) of the Federal Food, Drug, and Cosmetic Act and 21 CFR part 807, pursuant to FDA requirements. File online 1040ez There are specific exemptions for eyeglasses, contact lenses, and hearing aids. File online 1040ez There is also an exemption for devices that are determined by the Secretary to be of a type that are generally purchased by the general public at retail for individual use (this exemption is known as the retail exemption). File online 1040ez See T. File online 1040ez D. File online 1040ez 9604 for information on how to determine whether a device falls within the retail exemption, and examples of how a taxpayer might evaluate a given device. File online 1040ez More information. File online 1040ez   For more information on the medical device tax, see section 4191, T. File online 1040ez D. File online 1040ez 9604, and Notice 2012-77. File online 1040ez You can find T. File online 1040ez D. File online 1040ez 9604 and Notice 2012-77 on pages 730 and 781, respectively, of I. File online 1040ez R. File online 1040ez B. File online 1040ez 2012-52 at www. File online 1040ez irs. File online 1040ez gov/pub/irs-irbs/irb12-52. File online 1040ez pdf. File online 1040ez Prev  Up  Next   Home   More Online Publications
Print - Click this link to Print this page

Understanding your CP09 Notice

We've sent you this notice because our records indicate you may be eligible for the Earned Income Credit (EIC), but didn't claim it on your tax return.


What you need to do

  • Read your notice carefully — it will explain the steps needed to determine your qualifications.
  • Complete the Earned Income Credit Eligibility Worksheet.

    If you are eligible for the credit,
    • Sign and date the worksheet.
    • Mail the signed worksheet in the envelope provided.
    If you are not eligible for the credit,
    • Do not return the worksheet to us.

What we will do

We will review your worksheet and make a determination.

  • If you're eligible for the credit, we'll send you a refund check in 6 ― 8 weeks, as long as you don't owe tax or any other debts we’re required to collect.
  • If we deny the credit, we will send you a letter of explanation.
  • If you don't hear from us after 8 weeks, call our toll free line at 1-800-829-0922 to check the status.

You may want to...


Answers to Common Questions

Why did the IRS send me this notice?
You may be eligible for the Earned Income Credit (EIC). The EIC is a credit for certain people who work and have earned income. The credit may give you a refund even if you do not owe any tax.


Tips for next year

Claim the credit if you are still eligible.

Ask the IRS to figure the earned income credit for you by writing "EIC" on the EIC line, complete Schedule EIC, and attach it to your return. If you qualify for the credit, the IRS will calculate it for you.

Write "NO" on the EIC line if you do not want or you do not qualify for the credit.

Page Last Reviewed or Updated: 19-Feb-2014

How to get help

  • Call the 1-800 number listed on the top right corner of your notice.
  • Authorize someone (e.g., accountant) to contact the IRS on your behalf using Form 2848.
  • See if you qualify for help from a Low Income Taxpayer Clinic.
     

The File Online 1040ez

File online 1040ez 2. File online 1040ez   Electing the Section 179 Deduction Table of Contents Introduction Useful Items - You may want to see: What Property Qualifies?Eligible Property Property Acquired for Business Use Property Acquired by Purchase What Property Does Not Qualify?Land and Improvements Excepted Property How Much Can You Deduct?Dollar Limits Business Income Limit Partnerships and Partners S Corporations Other Corporations How Do You Elect the Deduction? When Must You Recapture the Deduction? Introduction You can elect to recover all or part of the cost of certain qualifying property, up to a limit, by deducting it in the year you place the property in service. File online 1040ez This is the section 179 deduction. File online 1040ez You can elect the section 179 deduction instead of recovering the cost by taking depreciation deductions. File online 1040ez Estates and trusts cannot elect the section 179 deduction. File online 1040ez This chapter explains what property does and does not qualify for the section 179 deduction, what limits apply to the deduction (including special rules for partnerships and corporations), and how to elect it. File online 1040ez It also explains when and how to recapture the deduction. File online 1040ez Useful Items - You may want to see: Publication 537 Installment Sales 544 Sales and Other Dispositions of Assets 954 Tax Incentives for Distressed Communities Form (and Instructions) 4562 Depreciation and Amortization 4797 Sales of Business Property See chapter 6 for information about getting publications and forms. File online 1040ez What Property Qualifies? To qualify for the section 179 deduction, your property must meet all the following requirements. File online 1040ez It must be eligible property. File online 1040ez It must be acquired for business use. File online 1040ez It must have been acquired by purchase. File online 1040ez It must not be property described later under What Property Does Not Qualify . File online 1040ez The following discussions provide information about these requirements and exceptions. File online 1040ez Eligible Property To qualify for the section 179 deduction, your property must be one of the following types of depreciable property. File online 1040ez Tangible personal property. File online 1040ez Other tangible property (except buildings and their structural components) used as: An integral part of manufacturing, production, or extraction or of furnishing transportation, communications, electricity, gas, water, or sewage disposal services, A research facility used in connection with any of the activities in (a) above, or A facility used in connection with any of the activities in (a) for the bulk storage of fungible commodities. File online 1040ez Single purpose agricultural (livestock) or horticultural structures. File online 1040ez See chapter 7 of Publication 225 for definitions and information regarding the use requirements that apply to these structures. File online 1040ez Storage facilities (except buildings and their structural components) used in connection with distributing petroleum or any primary product of petroleum. File online 1040ez Off-the-shelf computer software. File online 1040ez Qualified real property (described below). File online 1040ez Tangible personal property. File online 1040ez   Tangible personal property is any tangible property that is not real property. File online 1040ez It includes the following property. File online 1040ez Machinery and equipment. File online 1040ez Property contained in or attached to a building (other than structural components), such as refrigerators, grocery store counters, office equipment, printing presses, testing equipment, and signs. File online 1040ez Gasoline storage tanks and pumps at retail service stations. File online 1040ez Livestock, including horses, cattle, hogs, sheep, goats, and mink and other furbearing animals. File online 1040ez   The treatment of property as tangible personal property for the section 179 deduction is not controlled by its treatment under local law. File online 1040ez For example, property may not be tangible personal property for the deduction even if treated so under local law, and some property (such as fixtures) may be tangible personal property for the deduction even if treated as real property under local law. File online 1040ez Off-the-shelf computer software. File online 1040ez   Off-the-shelf computer software placed in service during the tax year is qualifying property for purposes of the section 179 deduction. File online 1040ez This is computer software that is readily available for purchase by the general public, is subject to a nonexclusive license, and has not been substantially modified. File online 1040ez It includes any program designed to cause a computer to perform a desired function. File online 1040ez However, a database or similar item is not considered computer software unless it is in the public domain and is incidental to the operation of otherwise qualifying software. File online 1040ez Qualified real property. File online 1040ez   You can elect to treat certain qualified real property you placed in service as section 179 property for tax years beginning in 2013. File online 1040ez If this election is made, the term “section 179 property” will include any qualified real property that is: Qualified leasehold improvement property, Qualified restaurant property, or Qualified retail improvement property. File online 1040ez The maximum section 179 expense deduction that can be elected for qualified section 179 real property is $250,000 of the maximum section 179 deduction of $500,000 in 2013. File online 1040ez For more information, see Special rules for qualified section 179 real property, later. File online 1040ez Also, see Election for certain qualified section 179 real property, later, for information on how to make this election. File online 1040ez Qualified leasehold improvement property. File online 1040ez   Generally, this is any improvement to an interior part of a building (placed in service before January 1, 2014) that is nonresidential real property, provided all of the requirements discussed in chapter 3 under Qualified leasehold improvement property are met. File online 1040ez   In addition, an improvement made by the lessor does not qualify as qualified leasehold improvement property to any subsequent owner unless it is acquired from the original lessor by reason of the lessor’s death or in any of the following types of transactions. File online 1040ez A transaction to which section 381(a) applies, A mere change in the form of conducting the trade or business so long as the property is retained in the trade or business as qualified leasehold improvement property and the taxpayer retains a substantial interest in the trade or business, A like-kind exchange, involuntary conversion, or re-acquisition of real property to the extent that the basis in the property represents the carryover basis, or Certain nonrecognition transactions to the extent that your basis in the property is determined by reference to the transferor’s or distributor’s basis in the property. File online 1040ez Examples include the following. File online 1040ez A complete liquidation of a subsidiary. File online 1040ez A transfer to a corporation controlled by the transferor. File online 1040ez An exchange of property by a corporation solely for stock or securities in another corporation in a reorganization. File online 1040ez Qualified restaurant property. File online 1040ez   Qualified restaurant property is any section 1250 property that is a building or an improvement to a building placed in service after December 31, 2008, and before January 1, 2014. File online 1040ez Also, more than 50% of the building’s square footage must be devoted to preparation of meals and seating for on-premise consumption of prepared meals. File online 1040ez Qualified retail improvement property. File online 1040ez   Generally, this is any improvement (placed in service after December 31, 2008, and before January 1, 2014) to an interior portion of nonresidential real property if it meets the following requirements. File online 1040ez The portion is open to the general public and is used in the retail trade or business of selling tangible property to the general public. File online 1040ez The improvement is placed in service more than 3 years after the date the building was first placed in service. File online 1040ez The expenses are not for the enlargement of the building, any elevator or escalator, any structural components benefiting a common area, or the internal structural framework of the building. File online 1040ez In addition, an improvement made by the lessor does not qualify as qualified retail improvement property to any subsequent owner unless it is acquired from the original lessor by reason of the lessor’s death or in any of the following types of transactions. File online 1040ez A transaction to which section 381(a) applies, A mere change in the form of conducting the trade or business so long as the property is retained in the trade or business as qualified leasehold improvement property and the taxpayer retains a substantial interest in the trade or business, A like-kind exchange, involuntary conversion, or re-acquisition of real property to the extent that the basis in the property represents the carryover basis, or Certain nonrecognition transactions to the extent that your basis in the property is determined by reference to the transferor’s or distributor’s basis in the property. File online 1040ez Examples include the following. File online 1040ez A complete liquidation of a subsidiary. File online 1040ez A transfer to a corporation controlled by the transferor. File online 1040ez An exchange of property by a corporation solely for stock or securities in another corporation in a reorganization. File online 1040ez Property Acquired for Business Use To qualify for the section 179 deduction, your property must have been acquired for use in your trade or business. File online 1040ez Property you acquire only for the production of income, such as investment property, rental property (if renting property is not your trade or business), and property that produces royalties, does not qualify. File online 1040ez Partial business use. File online 1040ez   When you use property for both business and nonbusiness purposes, you can elect the section 179 deduction only if you use the property more than 50% for business in the year you place it in service. File online 1040ez If you use the property more than 50% for business, multiply the cost of the property by the percentage of business use. File online 1040ez Use the resulting business cost to figure your section 179 deduction. File online 1040ez Example. File online 1040ez May Oak bought and placed in service an item of section 179 property costing $11,000. File online 1040ez She used the property 80% for her business and 20% for personal purposes. File online 1040ez The business part of the cost of the property is $8,800 (80% × $11,000). File online 1040ez Property Acquired by Purchase To qualify for the section 179 deduction, your property must have been acquired by purchase. File online 1040ez For example, property acquired by gift or inheritance does not qualify. File online 1040ez Property is not considered acquired by purchase in the following situations. File online 1040ez It is acquired by one component member of a controlled group from another component member of the same group. File online 1040ez Its basis is determined either— In whole or in part by its adjusted basis in the hands of the person from whom it was acquired, or Under the stepped-up basis rules for property acquired from a decedent. File online 1040ez It is acquired from a related person. File online 1040ez Related persons. File online 1040ez   Related persons are described under Related persons earlier. File online 1040ez However, to determine whether property qualifies for the section 179 deduction, treat as an individual's family only his or her spouse, ancestors, and lineal descendants and substitute "50%" for "10%" each place it appears. File online 1040ez Example. File online 1040ez Ken Larch is a tailor. File online 1040ez He bought two industrial sewing machines from his father. File online 1040ez He placed both machines in service in the same year he bought them. File online 1040ez They do not qualify as section 179 property because Ken and his father are related persons. File online 1040ez He cannot claim a section 179 deduction for the cost of these machines. File online 1040ez What Property Does Not Qualify? Certain property does not qualify for the section 179 deduction. File online 1040ez This includes the following. File online 1040ez Land and Improvements Land and land improvements do not qualify as section 179 property. File online 1040ez Land improvements include swimming pools, paved parking areas, wharves, docks, bridges, and fences. File online 1040ez Excepted Property Even if the requirements explained earlier under What Property Qualifies are met, you cannot elect the section 179 deduction for the following property. File online 1040ez Certain property you lease to others (if you are a noncorporate lessor). File online 1040ez Certain property used predominantly to furnish lodging or in connection with the furnishing of lodging. File online 1040ez Air conditioning or heating units. File online 1040ez Property used predominantly outside the United States, except property described in section 168(g)(4) of the Internal Revenue Code. File online 1040ez Property used by certain tax-exempt organizations, except property used in connection with the production of income subject to the tax on unrelated trade or business income. File online 1040ez Property used by governmental units or foreign persons or entities, except property used under a lease with a term of less than 6 months. File online 1040ez Leased property. File online 1040ez   Generally, you cannot claim a section 179 deduction based on the cost of property you lease to someone else. File online 1040ez This rule does not apply to corporations. File online 1040ez However, you can claim a section 179 deduction for the cost of the following property. File online 1040ez Property you manufacture or produce and lease to others. File online 1040ez Property you purchase and lease to others if both the following tests are met. File online 1040ez The term of the lease (including options to renew) is less than 50% of the property's class life. File online 1040ez For the first 12 months after the property is transferred to the lessee, the total business deductions you are allowed on the property (other than rents and reimbursed amounts) are more than 15% of the rental income from the property. File online 1040ez Property used for lodging. File online 1040ez   Generally, you cannot claim a section 179 deduction for property used predominantly to furnish lodging or in connection with the furnishing of lodging. File online 1040ez However, this does not apply to the following types of property. File online 1040ez Nonlodging commercial facilities that are available to those not using the lodging facilities on the same basis as they are available to those using the lodging facilities. File online 1040ez Property used by a hotel or motel in connection with the trade or business of furnishing lodging where the predominant portion of the accommodations is used by transients. File online 1040ez Any certified historic structure to the extent its basis is due to qualified rehabilitation expenditures. File online 1040ez Any energy property. File online 1040ez Energy property. File online 1040ez   Energy property is property that meets the following requirements. File online 1040ez It is one of the following types of property. File online 1040ez Equipment that uses solar energy to generate electricity, to heat or cool a structure, to provide hot water for use in a structure, or to provide solar process heat, except for equipment used to generate energy to heat a swimming pool. File online 1040ez Equipment placed in service after December 31, 2005, and before January 1, 2017, that uses solar energy to illuminate the inside of a structure using fiber-optic distributed sunlight. File online 1040ez Equipment used to produce, distribute, or use energy derived from a geothermal deposit. File online 1040ez For electricity generated by geothermal power, this includes equipment up to (but not including) the electrical transmission stage. File online 1040ez Qualified fuel cell property or qualified microturbine property placed in service after December 31, 2005, and before January 1, 2017. File online 1040ez The construction, reconstruction, or erection of the property must be completed by you. File online 1040ez For property you acquire, the original use of the property must begin with you. File online 1040ez The property must meet the performance and quality standards, if any, prescribed by Income Tax Regulations in effect at the time you get the property. File online 1040ez   For periods before February 14, 2008, energy property does not include any property that is public utility property as defined by section 46(f)(5) of the Internal Revenue Code (as in effect on November 4, 1990). File online 1040ez How Much Can You Deduct? Your section 179 deduction is generally the cost of the qualifying property. File online 1040ez However, the total amount you can elect to deduct under section 179 is subject to a dollar limit and a business income limit. File online 1040ez These limits apply to each taxpayer, not to each business. File online 1040ez However, see Married Individuals under Dollar Limits , later. File online 1040ez For a passenger automobile, the total section 179 deduction and depreciation deduction are limited. File online 1040ez See Do the Passenger Automobile Limits Apply in chapter 5 . File online 1040ez If you deduct only part of the cost of qualifying property as a section 179 deduction, you can generally depreciate the cost you do not deduct. File online 1040ez Trade-in of other property. File online 1040ez   If you buy qualifying property with cash and a trade-in, its cost for purposes of the section 179 deduction includes only the cash you paid. File online 1040ez Example. File online 1040ez Silver Leaf, a retail bakery, traded two ovens having a total adjusted basis of $680 for a new oven costing $1,320. File online 1040ez They received an $800 trade-in allowance for the old ovens and paid $520 in cash for the new oven. File online 1040ez The bakery also traded a used van with an adjusted basis of $4,500 for a new van costing $9,000. File online 1040ez They received a $4,800 trade-in allowance on the used van and paid $4,200 in cash for the new van. File online 1040ez Only the portion of the new property's basis paid by cash qualifies for the section 179 deduction. File online 1040ez Therefore, Silver Leaf's qualifying costs for the section 179 deduction are $4,720 ($520 + $4,200). File online 1040ez Dollar Limits The total amount you can elect to deduct under section 179 for most property placed in service in 2013 generally cannot be more than $500,000. File online 1040ez If you acquire and place in service more than one item of qualifying property during the year, you can allocate the section 179 deduction among the items in any way, as long as the total deduction is not more than $500,000. File online 1040ez You do not have to claim the full $500,000. File online 1040ez Qualified real property (described earlier) that you elected to treat as section 179 real property is limited to $250,000 of the maximum deduction of $500,000 for 2013. File online 1040ez The amount you can elect to deduct is not affected if you place qualifying property in service in a short tax year or if you place qualifying property in service for only a part of a 12-month tax year. File online 1040ez After you apply the dollar limit to determine a tentative deduction, you must apply the business income limit (described later) to determine your actual section 179 deduction. File online 1040ez Example. File online 1040ez In 2013, you bought and placed in service $500,000 in machinery and a $25,000 circular saw for your business. File online 1040ez You elect to deduct $475,000 for the machinery and the entire $25,000 for the saw, a total of $500,000. File online 1040ez This is the maximum amount you can deduct. File online 1040ez Your $25,000 deduction for the saw completely recovered its cost. File online 1040ez Your basis for depreciation is zero. File online 1040ez The basis for depreciation of your machinery is $25,000. File online 1040ez You figure this by subtracting your $475,000 section 179 deduction for the machinery from the $500,000 cost of the machinery. File online 1040ez Situations affecting dollar limit. File online 1040ez   Under certain circumstances, the general dollar limits on the section 179 deduction may be reduced or increased or there may be additional dollar limits. File online 1040ez The general dollar limit is affected by any of the following situations. File online 1040ez The cost of your section 179 property placed in service exceeds $2,000,000. File online 1040ez Your business is an enterprise zone business. File online 1040ez You placed in service a sport utility or certain other vehicles. File online 1040ez You are married filing a joint or separate return. File online 1040ez Costs exceeding $2,000,000 If the cost of your qualifying section 179 property placed in service in a year is more than $2,000,000, you generally must reduce the dollar limit (but not below zero) by the amount of cost over $2,000,000. File online 1040ez If the cost of your section 179 property placed in service during 2013 is $2,500,000 or more, you cannot take a section 179 deduction. File online 1040ez Example. File online 1040ez In 2013, Jane Ash placed in service machinery costing $2,100,000. File online 1040ez This cost is $100,000 more than $2,000,000, so she must reduce her dollar limit to $400,000 ($500,000 − $100,000). File online 1040ez Enterprise Zone Businesses An increased section 179 deduction is available to enterprise zone businesses for qualified zone property placed in service during the tax year, in an empowerment zone. File online 1040ez For more information including the definitions of “enterprise zone business” and “qualified zone property,” see sections 1397A, 1397C, and 1397D of the Internal Revenue Code. File online 1040ez The dollar limit on the section 179 deduction is increased by the smaller of: $35,000, or The cost of section 179 property that is also qualified zone property placed in service before January 1, 2014 (including such property placed in service by your spouse, even if you are filing a separate return). File online 1040ez Note. File online 1040ez   You take into account only 50% (instead of 100%) of the cost of qualified zone property placed in service in a year when figuring the reduced dollar limit for costs exceeding $2,000,000 (explained earlier). File online 1040ez Sport Utility and Certain Other Vehicles You cannot elect to expense more than $25,000 of the cost of any heavy sport utility vehicle (SUV) and certain other vehicles placed in service during the tax year. File online 1040ez This rule applies to any 4-wheeled vehicle primarily designed or used to carry passengers over public streets, roads, or highways, that is rated at more than 6,000 pounds gross vehicle weight and not more than 14,000 pounds gross vehicle weight. File online 1040ez However, the $25,000 limit does not apply to any vehicle: Designed to seat more than nine passengers behind the driver's seat, Equipped with a cargo area (either open or enclosed by a cap) of at least six feet in interior length that is not readily accessible from the passenger compartment, or That has an integral enclosure fully enclosing the driver compartment and load carrying device, does not have seating rearward of the driver's seat, and has no body section protruding more than 30 inches ahead of the leading edge of the windshield. File online 1040ez Married Individuals If you are married, how you figure your section 179 deduction depends on whether you file jointly or separately. File online 1040ez If you file a joint return, you and your spouse are treated as one taxpayer in determining any reduction to the dollar limit, regardless of which of you purchased the property or placed it in service. File online 1040ez If you and your spouse file separate returns, you are treated as one taxpayer for the dollar limit, including the reduction for costs over $2,000,000. File online 1040ez You must allocate the dollar limit (after any reduction) between you equally, unless you both elect a different allocation. File online 1040ez If the percentages elected by each of you do not total 100%, 50% will be allocated to each of you. File online 1040ez Example. File online 1040ez Jack Elm is married. File online 1040ez He and his wife file separate returns. File online 1040ez Jack bought and placed in service $2,000,000 of qualified farm machinery in 2013. File online 1040ez His wife has her own business, and she bought and placed in service $30,000 of qualified business equipment. File online 1040ez Their combined dollar limit is $470,000. File online 1040ez This is because they must figure the limit as if they were one taxpayer. File online 1040ez They reduce the $500,000 dollar limit by the $30,000 excess of their costs over $2,000,000. File online 1040ez They elect to allocate the $470,000 dollar limit as follows. File online 1040ez $446,500 ($470,000 x 95%) to Mr. File online 1040ez Elm's machinery. File online 1040ez $23,500 ($470,000 x 5%) to Mrs. File online 1040ez Elm's equipment. File online 1040ez If they did not make an election to allocate their costs in this way, they would have to allocate $235,000 ($470,000 × 50%) to each of them. File online 1040ez Joint return after filing separate returns. File online 1040ez   If you and your spouse elect to amend your separate returns by filing a joint return after the due date for filing your return, the dollar limit on the joint return is the lesser of the following amounts. File online 1040ez The dollar limit (after reduction for any cost of section 179 property over $2,000,000). File online 1040ez The total cost of section 179 property you and your spouse elected to expense on your separate returns. File online 1040ez Example. File online 1040ez The facts are the same as in the previous example except that Jack elected to deduct $30,000 of the cost of section 179 property on his separate return and his wife elected to deduct $2,000. File online 1040ez After the due date of their returns, they file a joint return. File online 1040ez Their dollar limit for the section 179 deduction is $32,000. File online 1040ez This is the lesser of the following amounts. File online 1040ez $470,000—The dollar limit less the cost of section 179 property over $2,000,000. File online 1040ez $32,000—The total they elected to expense on their separate returns. File online 1040ez Business Income Limit The total cost you can deduct each year after you apply the dollar limit is limited to the taxable income from the active conduct of any trade or business during the year. File online 1040ez Generally, you are considered to actively conduct a trade or business if you meaningfully participate in the management or operations of the trade or business. File online 1040ez Any cost not deductible in one year under section 179 because of this limit can be carried to the next year. File online 1040ez Special rules apply to a 2013 deduction of qualified section 179 real property that is disallowed because of the business income limit. File online 1040ez See Special rules for qualified section 179 property under Carryover of disallowed deduction, later. File online 1040ez Taxable income. File online 1040ez   In general, figure taxable income for this purpose by totaling the net income and losses from all trades and businesses you actively conducted during the year. File online 1040ez Net income or loss from a trade or business includes the following items. File online 1040ez Section 1231 gains (or losses). File online 1040ez Interest from working capital of your trade or business. File online 1040ez Wages, salaries, tips, or other pay earned as an employee. File online 1040ez For information about section 1231 gains and losses, see chapter 3 in Publication 544. File online 1040ez   In addition, figure taxable income without regard to any of the following. File online 1040ez The section 179 deduction. File online 1040ez The self-employment tax deduction. File online 1040ez Any net operating loss carryback or carryforward. File online 1040ez Any unreimbursed employee business expenses. File online 1040ez Two different taxable income limits. File online 1040ez   In addition to the business income limit for your section 179 deduction, you may have a taxable income limit for some other deduction. File online 1040ez You may have to figure the limit for this other deduction taking into account the section 179 deduction. File online 1040ez If so, complete the following steps. File online 1040ez Step Action 1 Figure taxable income without the section 179 deduction or the other deduction. File online 1040ez 2 Figure a hypothetical section 179 deduction using the taxable income figured in Step 1. File online 1040ez 3 Subtract the hypothetical section 179 deduction figured in Step 2 from the taxable income figured in Step 1. File online 1040ez 4 Figure a hypothetical amount for the other deduction using the amount figured in Step 3 as taxable income. File online 1040ez 5 Subtract the hypothetical other deduction figured in Step 4 from the taxable income figured in Step 1. File online 1040ez 6 Figure your actual section 179 deduction using the taxable income figured in Step 5. File online 1040ez 7 Subtract your actual section 179 deduction figured in Step 6 from the taxable income figured in Step 1. File online 1040ez 8 Figure your actual other deduction using the taxable income figured in Step 7. File online 1040ez Example. File online 1040ez On February 1, 2013, the XYZ corporation purchased and placed in service qualifying section 179 property that cost $500,000. File online 1040ez It elects to expense the entire $500,000 cost under section 179. File online 1040ez In June, the corporation gave a charitable contribution of $10,000. File online 1040ez A corporation's limit on charitable contributions is figured after subtracting any section 179 deduction. File online 1040ez The business income limit for the section 179 deduction is figured after subtracting any allowable charitable contributions. File online 1040ez XYZ's taxable income figured without the section 179 deduction or the deduction for charitable contributions is $520,000. File online 1040ez XYZ figures its section 179 deduction and its deduction for charitable contributions as follows. File online 1040ez Step 1– Taxable income figured without either deduction is $520,000. File online 1040ez Step 2– Using $520,000 as taxable income, XYZ's hypothetical section 179 deduction is $500,000. File online 1040ez Step 3– $20,000 ($520,000 − $500,000). File online 1040ez Step 4– Using $20,000 (from Step 3) as taxable income, XYZ's hypothetical charitable contribution (limited to 10% of taxable income) is $2,000. File online 1040ez Step 5– $518,000 ($520,000 − $2,000). File online 1040ez Step 6– Using $518,000 (from Step 5) as taxable income, XYZ figures the actual section 179 deduction. File online 1040ez Because the taxable income is at least $500,000, XYZ can take a $500,000 section 179 deduction. File online 1040ez Step 7– $20,000 ($520,000 − $500,000). File online 1040ez Step 8– Using $20,000 (from Step 7) as taxable income, XYZ's actual charitable contribution (limited to 10% of taxable income) is $2,000. File online 1040ez Carryover of disallowed deduction. File online 1040ez   You can carry over for an unlimited number of years the cost of any section 179 property you elected to expense but were unable to because of the business income limit. File online 1040ez This disallowed deduction amount is shown on line 13 of Form 4562. File online 1040ez You use the amount you carry over to determine your section 179 deduction in the next year. File online 1040ez Enter that amount on line 10 of your Form 4562 for the next year. File online 1040ez   If you place more than one property in service in a year, you can select the properties for which all or a part of the costs will be carried forward. File online 1040ez Your selections must be shown in your books and records. File online 1040ez For this purpose, treat section 179 costs allocated from a partnership or an S corporation as one item of section 179 property. File online 1040ez If you do not make a selection, the total carryover will be allocated equally among the properties you elected to expense for the year. File online 1040ez   If costs from more than one year are carried forward to a subsequent year in which only part of the total carryover can be deducted, you must deduct the costs being carried forward from the earliest year first. File online 1040ez Special rules for qualified section 179 real property. File online 1040ez   You can carry over to 2013 a 2012 deduction attributable to qualified section 179 real property that you elected to expense but were unable to take because of the business income limitation. File online 1040ez Any such 2012 carryover amounts that are not deducted in 2013, plus any 2013 disallowed section 179 expense deductions attributable to qualified real property, are not carried over to 2014. File online 1040ez Instead these amounts are treated as property placed in service on the first day of 2013 for purposes of computing depreciation (including the special depreciation allowance, if applicable). File online 1040ez See section 179(f) of the Internal Revenue Code and Notice 2013-59 for more information. File online 1040ez If there is a sale or other disposition of your property (including a transfer at death) before you can use the full amount of any outstanding carryover of your disallowed section 179 deduction, neither you nor the new owner can deduct any of the unused amount. File online 1040ez Instead, you must add it back to the property's basis. File online 1040ez Partnerships and Partners The section 179 deduction limits apply both to the partnership and to each partner. File online 1040ez The partnership determines its section 179 deduction subject to the limits. File online 1040ez It then allocates the deduction among its partners. File online 1040ez Each partner adds the amount allocated from partnerships (shown on Schedule K-1 (Form 1065), Partner's Share of Income, Deductions, Credits, etc. File online 1040ez ) to his or her nonpartnership section 179 costs and then applies the dollar limit to this total. File online 1040ez To determine any reduction in the dollar limit for costs over $2,000,000, the partner does not include any of the cost of section 179 property placed in service by the partnership. File online 1040ez After the dollar limit (reduced for any nonpartnership section 179 costs over $2,000,000) is applied, any remaining cost of the partnership and nonpartnership section 179 property is subject to the business income limit. File online 1040ez Partnership's taxable income. File online 1040ez   For purposes of the business income limit, figure the partnership's taxable income by adding together the net income and losses from all trades or businesses actively conducted by the partnership during the year. File online 1040ez See the Instructions for Form 1065 for information on how to figure partnership net income (or loss). File online 1040ez However, figure taxable income without regard to credits, tax-exempt income, the section 179 deduction, and guaranteed payments under section 707(c) of the Internal Revenue Code. File online 1040ez Partner's share of partnership's taxable income. File online 1040ez   For purposes of the business income limit, the taxable income of a partner engaged in the active conduct of one or more of a partnership's trades or businesses includes his or her allocable share of taxable income derived from the partnership's active conduct of any trade or business. File online 1040ez Example. File online 1040ez In 2013, Beech Partnership placed in service section 179 property with a total cost of $2,025,000. File online 1040ez The partnership must reduce its dollar limit by $25,000 ($2,025,000 − $2,000,000). File online 1040ez Its maximum section 179 deduction is $475,000 ($500,000 − $25,000), and it elects to expense that amount. File online 1040ez The partnership's taxable income from the active conduct of all its trades or businesses for the year was $600,000, so it can deduct the full $475,000. File online 1040ez It allocates $40,000 of its section 179 deduction and $50,000 of its taxable income to Dean, one of its partners. File online 1040ez In addition to being a partner in Beech Partnership, Dean is also a partner in the Cedar Partnership, which allocated to him a $30,000 section 179 deduction and $35,000 of its taxable income from the active conduct of its business. File online 1040ez He also conducts a business as a sole proprietor and, in 2013, placed in service in that business qualifying section 179 property costing $55,000. File online 1040ez He had a net loss of $5,000 from that business for the year. File online 1040ez Dean does not have to include section 179 partnership costs to figure any reduction in his dollar limit, so his total section 179 costs for the year are not more than $2,000,000 and his dollar limit is not reduced. File online 1040ez His maximum section 179 deduction is $500,000. File online 1040ez He elects to expense all of the $70,000 in section 179 deductions allocated from the partnerships ($40,000 from Beech Partnership plus $30,000 from Cedar Partnership), plus $55,000 of his sole proprietorship's section 179 costs, and notes that information in his books and records. File online 1040ez However, his deduction is limited to his business taxable income of $80,000 ($50,000 from Beech Partnership, plus $35,000 from Cedar Partnership minus $5,000 loss from his sole proprietorship). File online 1040ez He carries over $45,000 ($125,000 − $80,000) of the elected section 179 costs to 2014. File online 1040ez He allocates the carryover amount to the cost of section 179 property placed in service in his sole proprietorship, and notes that allocation in his books and records. File online 1040ez Different tax years. File online 1040ez   For purposes of the business income limit, if the partner's tax year and that of the partnership differ, the partner's share of the partnership's taxable income for a tax year is generally the partner's distributive share for the partnership tax year that ends with or within the partner's tax year. File online 1040ez Example. File online 1040ez John and James Oak are equal partners in Oak Partnership. File online 1040ez Oak Partnership uses a tax year ending January 31. File online 1040ez John and James both use a tax year ending December 31. File online 1040ez For its tax year ending January 31, 2013, Oak Partnership's taxable income from the active conduct of its business is $80,000, of which $70,000 was earned during 2012. File online 1040ez John and James each include $40,000 (each partner's entire share) of partnership taxable income in computing their business income limit for the 2013 tax year. File online 1040ez Adjustment of partner's basis in partnership. File online 1040ez   A partner must reduce the basis of his or her partnership interest by the total amount of section 179 expenses allocated from the partnership even if the partner cannot currently deduct the total amount. File online 1040ez If the partner disposes of his or her partnership interest, the partner's basis for determining gain or loss is increased by any outstanding carryover of disallowed section 179 expenses allocated from the partnership. File online 1040ez Adjustment of partnership's basis in section 179 property. File online 1040ez   The basis of a partnership's section 179 property must be reduced by the section 179 deduction elected by the partnership. File online 1040ez This reduction of basis must be made even if a partner cannot deduct all or part of the section 179 deduction allocated to that partner by the partnership because of the limits. File online 1040ez S Corporations Generally, the rules that apply to a partnership and its partners also apply to an S corporation and its shareholders. File online 1040ez The deduction limits apply to an S corporation and to each shareholder. File online 1040ez The S corporation allocates its deduction to the shareholders who then take their section 179 deduction subject to the limits. File online 1040ez Figuring taxable income for an S corporation. File online 1040ez   To figure taxable income (or loss) from the active conduct by an S corporation of any trade or business, you total the net income and losses from all trades or businesses actively conducted by the S corporation during the year. File online 1040ez   To figure the net income (or loss) from a trade or business actively conducted by an S corporation, you take into account the items from that trade or business that are passed through to the shareholders and used in determining each shareholder's tax liability. File online 1040ez However, you do not take into account any credits, tax-exempt income, the section 179 deduction, and deductions for compensation paid to shareholder-employees. File online 1040ez For purposes of determining the total amount of S corporation items, treat deductions and losses as negative income. File online 1040ez In figuring the taxable income of an S corporation, disregard any limits on the amount of an S corporation item that must be taken into account when figuring a shareholder's taxable income. File online 1040ez Other Corporations A corporation's taxable income from its active conduct of any trade or business is its taxable income figured with the following changes. File online 1040ez It is figured before deducting the section 179 deduction, any net operating loss deduction, and special deductions (as reported on the corporation's income tax return). File online 1040ez It is adjusted for items of income or deduction included in the amount figured in 1, above, not derived from a trade or business actively conducted by the corporation during the tax year. File online 1040ez How Do You Elect the Deduction? You elect to take the section 179 deduction by completing Part I of Form 4562. File online 1040ez If you elect the deduction for listed property (described in chapter 5), complete Part V of Form 4562 before completing Part I. File online 1040ez For property placed in service in 2013, file Form 4562 with either of the following. File online 1040ez Your original 2013 tax return, whether or not you file it timely. File online 1040ez An amended return for 2013 filed within the time prescribed by law. File online 1040ez An election made on an amended return must specify the item of section 179 property to which the election applies and the part of the cost of each such item to be taken into account. File online 1040ez The amended return must also include any resulting adjustments to taxable income. File online 1040ez You must keep records that show the specific identification of each piece of qualifying section 179 property. File online 1040ez These records must show how you acquired the property, the person you acquired it from, and when you placed it in service. File online 1040ez Election for certain qualified section 179 real property. File online 1040ez   You can elect to expense certain qualified real property that you placed in service as section 179 property for tax years beginning in 2013. File online 1040ez If you elect to treat this property as section 179 property, you must elect the application of the special rules for qualified real property described in section 179(f) of the Internal Revenue Code. File online 1040ez   To make the election, attach a statement indicating you are “electing the application of section 179(f) of the Internal Revenue Code” with either of the following. File online 1040ez Your original 2013 tax return, whether or not you file it timely. File online 1040ez An amended return for 2013 filed within the time prescribed by law. File online 1040ez The amended return must also include any adjustments to taxable income. File online 1040ez   The statement should indicate your election to expense certain qualified real property under section 179(f) on your return. File online 1040ez It must specify one or more of the three types of qualified property (described under Qualified real property ) to which the election applies, the cost of each such type, and the portion of the cost of each such property to be taken into account. File online 1040ez Also, report this on line 6 of Form 4562. File online 1040ez    The maximum section 179 expense deduction that can be taken for qualified section 179 real property is limited to $250,000. File online 1040ez Revoking an election. File online 1040ez   An election (or any specification made in the election) to take a section 179 deduction for 2013 can be revoked without IRS approval by filing an amended return. File online 1040ez The amended return must be filed within the time prescribed by law. File online 1040ez The amended return must also include any resulting adjustments to taxable income. File online 1040ez Once made, the revocation is irrevocable. File online 1040ez When Must You Recapture the Deduction? You may have to recapture the section 179 deduction if, in any year during the property's recovery period, the percentage of business use drops to 50% or less. File online 1040ez In the year the business use drops to 50% or less, you include the recapture amount as ordinary income in Part IV of Form 4797. File online 1040ez You also increase the basis of the property by the recapture amount. File online 1040ez Recovery periods for property are discussed under Which Recovery Period Applies in chapter 4 . File online 1040ez If you sell, exchange, or otherwise dispose of the property, do not figure the recapture amount under the rules explained in this discussion. File online 1040ez Instead, use the rules for recapturing depreciation explained in chapter 3 of Publication 544 under Section 1245 Property. File online 1040ez For qualified real property (described earlier), see Notice 2013-59 for determining the portion of the gain that is attributable to section 1245 property upon the sale or other disposition of qualified real property. File online 1040ez If the property is listed property (described in chapter 5 ), do not figure the recapture amount under the rules explained in this discussion when the percentage of business use drops to 50% or less. File online 1040ez Instead, use the rules for recapturing excess depreciation in chapter 5 under What Is the Business-Use Requirement. File online 1040ez Figuring the recapture amount. File online 1040ez   To figure the amount to recapture, take the following steps. File online 1040ez Figure the depreciation that would have been allowable on the section 179 deduction you claimed. File online 1040ez Begin with the year you placed the property in service and include the year of recapture. File online 1040ez Subtract the depreciation figured in (1) from the section 179 deduction you claimed. File online 1040ez The result is the amount you must recapture. File online 1040ez Example. File online 1040ez In January 2011, Paul Lamb, a calendar year taxpayer, bought and placed in service section 179 property costing $10,000. File online 1040ez The property is not listed property. File online 1040ez The property is 3-year property. File online 1040ez He elected a $5,000 section 179 deduction for the property and also elected not to claim a special depreciation allowance. File online 1040ez He used the property only for business in 2011 and 2012. File online 1040ez In 2013, he used the property 40% for business and 60% for personal use. File online 1040ez He figures his recapture amount as follows. File online 1040ez Section 179 deduction claimed (2011) $5,000. File online 1040ez 00 Minus: Allowable depreciation using Table A-1 (instead of section 179 deduction):   2011 $1,666. File online 1040ez 50   2012 2,222. File online 1040ez 50   2013 ($740. File online 1040ez 50 × 40% (business)) 296. File online 1040ez 20 4,185. File online 1040ez 20 2013 — Recapture amount $ 814. File online 1040ez 80 Paul must include $814. File online 1040ez 80 in income for 2013. File online 1040ez If any qualified zone property placed in service during the year ceases to be used in an empowerment zone by an enterprise zone business in a later year, the benefit of the increased section 179 deduction must be reported as other income on your return. File online 1040ez Prev  Up  Next   Home   More Online Publications