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File state and federal taxes for free 10. File state and federal taxes for free   Installment Sales Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: Installment Sale of a Farm Installment MethodWhen to elect out. File state and federal taxes for free Revoking the election. File state and federal taxes for free More information. File state and federal taxes for free Figuring Installment Sale Income Payments Received or Considered Received ExampleSection 1231 gains. File state and federal taxes for free Summary. File state and federal taxes for free Introduction An installment sale is a sale of property where you receive at least one payment after the tax year of the sale. File state and federal taxes for free If you realize a gain on an installment sale, you may be able to report part of your gain when you receive each payment. File state and federal taxes for free This method of reporting gain is called the installment method. File state and federal taxes for free You cannot use the installment method to report a loss. File state and federal taxes for free You can choose to report all of your gain in the year of sale. File state and federal taxes for free Installment obligation. File state and federal taxes for free   The buyer's obligation to make future payments to you can be in the form of a deed of trust, note, land contract, mortgage, or other evidence of the buyer's debt to you. File state and federal taxes for free Topics - This chapter discusses: The general rules that apply to using the installment method Installment sale of a farm Useful Items - You may want to see: Publication 523 Selling Your Home 535 Business Expenses 537 Installment Sales 538 Accounting Periods and Methods 544 Sales and Other Dispositions of Assets Form (and Instructions) 4797 Sales of Business Property 6252 Installment Sale Income See chapter 16 for information about getting publications and forms. File state and federal taxes for free Installment Sale of a Farm The installment sale of a farm for one overall price under a single contract is not the sale of a single asset. File state and federal taxes for free It generally includes the sale of real property and personal property reportable on the installment method. File state and federal taxes for free It may also include the sale of property for which you must maintain an inventory, which cannot be reported on the installment method. File state and federal taxes for free See Inventory , later. File state and federal taxes for free The selling price must be allocated to determine the amount received for each class of asset. File state and federal taxes for free The tax treatment of the gain or loss on the sale of each class of assets is determined by its classification as a capital asset, as property used in the business, or as property held for sale and by the length of time the asset was held. File state and federal taxes for free (See chapter 8 for a discussion of capital assets and chapter 9 for a discussion of property used in the business. File state and federal taxes for free ) Separate computations must be made to figure the gain or loss for each class of asset sold. File state and federal taxes for free See Sale of a Farm in chapter 8. File state and federal taxes for free If you report the sale of property on the installment method, any depreciation recapture under section 1245 or 1250 of the Internal Revenue Code is generally taxable as ordinary income in the year of sale. File state and federal taxes for free See Depreciation recapture , later. File state and federal taxes for free This applies even if no payments are received in that year. File state and federal taxes for free Installment Method An installment sale is a sale of property where you receive at least one payment after the tax year of the sale. File state and federal taxes for free A farmer who is not required to maintain an inventory can use the installment method to report gain from the sale of property used or produced in farming. File state and federal taxes for free See Inventory , later, for information on the sale of farm property where inventory items are included in the assets sold. File state and federal taxes for free If a sale qualifies as an installment sale, the gain must be reported under the installment method unless you elect out of using the installment method. File state and federal taxes for free Electing out of the installment method. File state and federal taxes for free   If you elect not to use the installment method, you generally report the entire gain in the year of sale, even though you do not receive all the sale proceeds in that year. File state and federal taxes for free   To make this election, do not report your sale on Form 6252. File state and federal taxes for free Instead, report it on Schedule D (Form 1040), Form 4797, or both. File state and federal taxes for free When to elect out. File state and federal taxes for free   Make this election by the due date, including extensions, for filing your tax return for the year the sale takes place. File state and federal taxes for free   However, if you timely file your tax return for the year the sale takes place without making the election, you still can make the election by filing an amended return within 6 months of the due date of the return (excluding extensions). File state and federal taxes for free Write “Filed pursuant to section 301. File state and federal taxes for free 9100-2” at the top of the amended return and file it where the original return was filed. File state and federal taxes for free Revoking the election. File state and federal taxes for free   Once made, the election can be revoked only with IRS approval. File state and federal taxes for free A revocation is retroactive. File state and federal taxes for free More information. File state and federal taxes for free   See Electing Out of the Installment Method in Publication 537 for more information. File state and federal taxes for free Inventory. File state and federal taxes for free   The sale of farm inventory items cannot be reported on the installment method. File state and federal taxes for free All gain or loss on their sale must be reported in the year of sale, even if you receive payment in later years. File state and federal taxes for free   If inventory items are included in an installment sale, you may have an agreement stating which payments are for inventory and which are for the other assets being sold. File state and federal taxes for free If you do not, each payment must be allocated between the inventory and the other assets sold. File state and federal taxes for free Sale at a loss. File state and federal taxes for free   If your sale results in a loss, you cannot use the installment method. File state and federal taxes for free If the loss is on an installment sale of business assets, you can deduct it only in the tax year of sale. File state and federal taxes for free Figuring Installment Sale Income Each payment on an installment sale usually consists of the following three parts. File state and federal taxes for free Interest income. File state and federal taxes for free Return of your adjusted basis in the property. File state and federal taxes for free Gain on the sale. File state and federal taxes for free In each year you receive a payment, you must include in income both the interest part and the part that is your gain on the sale. File state and federal taxes for free You do not include in income the part that is the return of your basis in the property. File state and federal taxes for free Basis is the amount of your investment in the property for installment sale purposes. File state and federal taxes for free Interest income. File state and federal taxes for free   You must report interest as ordinary income. File state and federal taxes for free Interest is generally not included in a down payment. File state and federal taxes for free However, you may have to treat part of each later payment as interest, even if it is not called interest in your agreement with the buyer. File state and federal taxes for free Interest provided in the agreement is called stated interest. File state and federal taxes for free If the agreement does not provide for enough stated interest, there may be unstated interest or original issue discount. File state and federal taxes for free See Unstated interest , later. File state and federal taxes for free    You must continue to report the interest income on payments you receive in subsequent years as interest income. File state and federal taxes for free Adjusted basis and installment sale income (gain on sale). File state and federal taxes for free   After you have determined how much of each payment to treat as interest, you treat the rest of each payment as if it were made up of two parts. File state and federal taxes for free A tax-free return of your adjusted basis in the property, and Your gain (referred to as “installment sale income” on Form 6252). File state and federal taxes for free Figuring adjusted basis for installment sale purposes. File state and federal taxes for free   You can use Worksheet 10-1 to figure your adjusted basis in the property for installment sale purposes. File state and federal taxes for free When you have completed the worksheet, you will also have determined the gross profit percentage necessary to figure your installment sale income (gain) for this year. File state and federal taxes for free    Worksheet 10-1. File state and federal taxes for free Figuring Adjusted Basis and Gross Profit Percentage 1. File state and federal taxes for free Enter the selling price for the property   2. File state and federal taxes for free Enter your adjusted basis for the property     3. File state and federal taxes for free Enter your selling expenses     4. File state and federal taxes for free Enter any depreciation recapture     5. File state and federal taxes for free Add lines 2, 3, and 4. File state and federal taxes for free  This is your adjusted basis  for installment sale purposes   6. File state and federal taxes for free Subtract line 5 from line 1. File state and federal taxes for free If zero or less, enter -0-. File state and federal taxes for free  This is your gross profit     If the amount entered on line 6 is zero, Stop here. File state and federal taxes for free You cannot use the installment method. File state and federal taxes for free   7. File state and federal taxes for free Enter the contract price for the property   8. File state and federal taxes for free Divide line 6 by line 7. File state and federal taxes for free This is your gross profit percentage   Selling price. File state and federal taxes for free   The selling price is the total cost of the property to the buyer and includes the following. File state and federal taxes for free Any money you are to receive. File state and federal taxes for free The fair market value (FMV) of any property you are to receive (FMV is discussed at Property used as a payment under Payments Received or Considered Received ). File state and federal taxes for free Any existing mortgage or other debt the buyer pays, assumes, or takes (a note, mortgage, or any other liability, such as a lien, accrued interest, or taxes you owe on the property). File state and federal taxes for free Any of your selling expenses the buyer pays. File state and federal taxes for free Do not include stated interest, unstated interest, any amount recomputed or recharacterized as interest, or original issue discount. File state and federal taxes for free Adjusted basis for installment sale purposes. File state and federal taxes for free   Your adjusted basis is the total of the following three items. File state and federal taxes for free Adjusted basis. File state and federal taxes for free Selling expenses. File state and federal taxes for free Depreciation recapture. File state and federal taxes for free Adjusted basis. File state and federal taxes for free   Basis is your investment in the property for installment sale purposes. File state and federal taxes for free The way you figure basis depends on how you acquire the property. File state and federal taxes for free The basis of property you buy is generally its cost. File state and federal taxes for free The basis of property you inherit, receive as a gift, build yourself, or receive in a tax-free exchange is figured differently. File state and federal taxes for free   While you own property, various events may change your original basis. File state and federal taxes for free Some events, such as adding rooms or making permanent improvements, increase basis. File state and federal taxes for free Others, such as deductible casualty losses or depreciation previously allowed or allowable, decrease basis. File state and federal taxes for free The result is adjusted basis. File state and federal taxes for free See chapter 6 and Publication 551, Basis of Assets, for more information. File state and federal taxes for free Selling expenses. File state and federal taxes for free   Selling expenses relate to the sale of the property. File state and federal taxes for free They include commissions, attorney fees, and any other expenses paid on the sale. File state and federal taxes for free Selling expenses are added to the basis of the sold property. File state and federal taxes for free Depreciation recapture. File state and federal taxes for free   If the property you sold was depreciable property, you may need to recapture part of the gain on the sale as ordinary income. File state and federal taxes for free See Depreciation Recapture in chapter 9 and Depreciation Recapture Income in Publication 537. File state and federal taxes for free Gross profit. File state and federal taxes for free   Gross profit is the total gain you report on the installment method. File state and federal taxes for free   To figure your gross profit, subtract your adjusted basis for installment sale purposes from the selling price. File state and federal taxes for free If the property you sold was your home, subtract from the gross profit any gain you can exclude. File state and federal taxes for free Contract price. File state and federal taxes for free   Contract price equals: The selling price, minus The mortgages, debts, and other liabilities assumed or taken by the buyer, plus The amount by which the mortgages, debts, and other liabilities assumed or taken by the buyer exceed your adjusted basis for installment sale purposes. File state and federal taxes for free Gross profit percentage. File state and federal taxes for free   A certain percentage of each payment (after subtracting interest) is reported as installment sale income. File state and federal taxes for free This percentage is called the gross profit percentage and is figured by dividing your gross profit from the sale by the contract price. File state and federal taxes for free   The gross profit percentage generally remains the same for each payment you receive. File state and federal taxes for free However, see the example under Selling price reduced , later, for a situation where the gross profit percentage changes. File state and federal taxes for free Amount to report as installment sale income. File state and federal taxes for free   Multiply the payments you receive each year (less interest) by the gross profit percentage. File state and federal taxes for free The result is your installment sales income for the tax year. File state and federal taxes for free In certain circumstances, you may be treated as having received a payment, even though you received nothing directly. File state and federal taxes for free A receipt of property or the assumption of a mortgage on the property sold may be treated as a payment. File state and federal taxes for free For a detailed discussion, see Payments Received or Considered Received , later. File state and federal taxes for free Selling price reduced. File state and federal taxes for free   If the selling price is reduced at a later date, the gross profit on the sale also will change. File state and federal taxes for free You then must refigure the gross profit percentage for the remaining payments. File state and federal taxes for free Refigure your gross profit using Worksheet 10-2. File state and federal taxes for free New Gross Profit Percentage — Selling Price Reduced. File state and federal taxes for free You will spread any remaining gain over future installments. File state and federal taxes for free    Worksheet 10-2. File state and federal taxes for free New Gross Profit Percentage — Selling Price Reduced 1. File state and federal taxes for free Enter the reduced selling  price for the property   2. File state and federal taxes for free Enter your adjusted  basis for the  property     3. File state and federal taxes for free Enter your selling  expenses     4. File state and federal taxes for free Enter any depreciation  recapture     5. File state and federal taxes for free Add lines 2, 3, and 4. File state and federal taxes for free   6. File state and federal taxes for free Subtract line 5 from line 1. File state and federal taxes for free  This is your adjusted  gross profit   7. File state and federal taxes for free Enter any installment sale  income reported in  prior year(s)   8. File state and federal taxes for free Subtract line 7 from line 6   9. File state and federal taxes for free Future installments     10. File state and federal taxes for free Divide line 8 by line 9. File state and federal taxes for free  This is your new  gross profit percentage*. File state and federal taxes for free   * Apply this percentage to all future payments to determine how much of each of those payments is installment sale income. File state and federal taxes for free Example. File state and federal taxes for free In 2011, you sold land with a basis of $40,000 for $100,000. File state and federal taxes for free Your gross profit was $60,000. File state and federal taxes for free You received a $20,000 down payment and the buyer's note for $80,000. File state and federal taxes for free The note provides for monthly payments of $1,953 each, figured at 8% interest, amortized over four years, beginning in January 2012. File state and federal taxes for free Your gross profit percentage was 60%. File state and federal taxes for free You received the down payment of $20,000 in 2011 and total payments of $23,436 in 2012, of which $17,675 was principal and $5,761 was interest according to the amortization schedule. File state and federal taxes for free You reported a gain of $12,000 on the down payment received in 2011 and $10,605 ($17,675 X 60% (. File state and federal taxes for free 60)) in 2012. File state and federal taxes for free In January 2013, you and the buyer agreed to reduce the purchase price to $85,000 and payments during 2013, 2014, and 2015 are reduced to $1,483 a month amortized over the remaining three years. File state and federal taxes for free The new gross profit percentage, 47. File state and federal taxes for free 32%, is figured in Example — Worksheet 10-2. File state and federal taxes for free Example — Worksheet 10-2. File state and federal taxes for free New Gross Profit Percentage — Selling Price Reduced 1. File state and federal taxes for free Enter the reduced selling  price for the property 85,000 2. File state and federal taxes for free Enter your adjusted  basis for the  property 40,000   3. File state and federal taxes for free Enter your selling  expenses -0-   4. File state and federal taxes for free Enter any depreciation  recapture -0-   5. File state and federal taxes for free Add lines 2, 3, and 4. File state and federal taxes for free 40,000 6. File state and federal taxes for free Subtract line 5 from line 1. File state and federal taxes for free  This is your adjusted  gross profit 45,000 7. File state and federal taxes for free Enter any installment sale  income reported in  prior year(s) 22,605 8. File state and federal taxes for free Subtract line 7 from line 6 22,395 9. File state and federal taxes for free Future installments   47,325 10. File state and federal taxes for free Divide line 8 by line 9. File state and federal taxes for free  This is your new  gross profit percentage*. File state and federal taxes for free 47. File state and federal taxes for free 32% * Apply this percentage to all future payments to determine how much of each of those payments is installment sale income. File state and federal taxes for free You will report installment sale income of $6,878 (47. File state and federal taxes for free 32% of $14,535) in 2013, $7,449 (47. File state and federal taxes for free 32% of $15,742) in 2014, and $8,067 (47. File state and federal taxes for free 32% of $17,048) in 2015. File state and federal taxes for free Form 6252. File state and federal taxes for free   Use Form 6252 to report an installment sale in the year it takes place and to report payments received, or considered received because of related party resales, in later years. File state and federal taxes for free Attach it to your tax return for each year. File state and federal taxes for free Disposition of Installment Obligation If you are using the installment method and you dispose of the installment obligation, generally you will have a gain or loss to report. File state and federal taxes for free It is considered gain or loss on the sale of the property for which you received the installment obligation. File state and federal taxes for free Cancellation. File state and federal taxes for free   If an installment obligation is canceled or otherwise becomes unenforceable, it is treated as a disposition other than a sale or exchange. File state and federal taxes for free Your gain or loss is the difference between your basis in the obligation and its fair market value (FMV) at the time you cancel it. File state and federal taxes for free If the parties are related, the FMV of the obligation is considered to be no less than its full face value. File state and federal taxes for free Transfer due to death. File state and federal taxes for free   The transfer of an installment obligation (other than to a buyer) as a result of the death of the seller is not a disposition. File state and federal taxes for free Any unreported gain from the installment obligation is not treated as gross income to the decedent. File state and federal taxes for free No income is reported on the decedent's return due to the transfer. File state and federal taxes for free Whoever receives the installment obligation as a result of the seller's death is taxed on the installment payments the same as the seller would have been had the seller lived to receive the payments. File state and federal taxes for free   However, if the installment obligation is canceled, becomes unenforceable, or is transferred to the buyer because of the death of the holder of the obligation, it is a disposition. File state and federal taxes for free The estate must figure its gain or loss on the disposition. File state and federal taxes for free If the holder and the buyer were related, the FMV of the installment obligation is considered to be no less than its full face value. File state and federal taxes for free More information. File state and federal taxes for free   For more information on the disposition of an installment obligation, see Publication 537. File state and federal taxes for free Sale of depreciable property. File state and federal taxes for free   You generally cannot report gain from the sale of depreciable property to a related person on the installment method. File state and federal taxes for free See Sale to a Related Person in Publication 537. File state and federal taxes for free   You cannot use the installment method to report any depreciation recapture income up to the gain on the sale. File state and federal taxes for free However, report any gain greater than the recapture income on the installment method. File state and federal taxes for free   The recapture income reported in the year of sale is included in your installment sale basis to determine your gross profit on the installment sale. File state and federal taxes for free   Figure your depreciation recapture income (including the section 179 deduction and the section 179A deduction recapture) in Part III of Form 4797. File state and federal taxes for free Report the depreciation recapture income in Part II of Form 4797 as ordinary income in the year of sale. File state and federal taxes for free    If you sell depreciable business property, prepare Form 4797 first in order to figure the amount to enter on line 12 of Part I, Form 6252. File state and federal taxes for free See the Form 6252 instructions for details. File state and federal taxes for free   For more information on the section 179 deduction, see Section 179 Expense Deduction in chapter 7. File state and federal taxes for free For more information on depreciation recapture, see Depreciation Recapture in  chapter 9. File state and federal taxes for free Payments Received or Considered Received You must figure your gain each year on the payments you receive, or are treated as receiving, from an installment sale. File state and federal taxes for free In certain situations, you are considered to have received a payment, even though the buyer does not pay you directly. File state and federal taxes for free These situations occur when the buyer assumes or pays any of your debts, such as a loan, or pays any of your expenses, such as a sales commission. File state and federal taxes for free However, as discussed later, the buyer's assumption of your debt is treated as a recovery of basis, rather than as a payment, in many cases. File state and federal taxes for free Buyer pays seller's expenses. File state and federal taxes for free   If the buyer pays any of your expenses related to the sale of your property, it is considered a payment to you in the year of sale. File state and federal taxes for free Include these expenses in the selling and contract prices when figuring the gross profit percentage. File state and federal taxes for free Buyer assumes mortgage. File state and federal taxes for free   If the buyer assumes or pays off your mortgage, or otherwise takes the property subject to the mortgage, the following rules apply. File state and federal taxes for free Mortgage less than basis. File state and federal taxes for free   If the buyer assumes a mortgage that is not more than your installment sale basis in the property, it is not considered a payment to you. File state and federal taxes for free It is considered a recovery of your basis. File state and federal taxes for free The contract price is the selling price minus the mortgage. File state and federal taxes for free Example. File state and federal taxes for free You sell property with an adjusted basis of $19,000. File state and federal taxes for free You have selling expenses of $1,000. File state and federal taxes for free The buyer assumes your existing mortgage of $15,000 and agrees to pay you $10,000 (a cash down payment of $2,000 and $2,000 (plus 8% interest) in each of the next 4 years). File state and federal taxes for free The selling price is $25,000 ($15,000 + $10,000). File state and federal taxes for free Your gross profit is $5,000 ($25,000 − $20,000 installment sale basis). File state and federal taxes for free The contract price is $10,000 ($25,000 − $15,000 mortgage). File state and federal taxes for free Your gross profit percentage is 50% ($5,000 ÷ $10,000). File state and federal taxes for free You report half of each $2,000 payment received as gain from the sale. File state and federal taxes for free You also report all interest you receive as ordinary income. File state and federal taxes for free Mortgage more than basis. File state and federal taxes for free   If the buyer assumes a mortgage that is more than your installment sale basis in the property, you recover your entire basis. File state and federal taxes for free The part of the mortgage greater than your basis is treated as a payment received in the year of sale. File state and federal taxes for free   To figure the contract price, subtract the mortgage from the selling price. File state and federal taxes for free This is the total amount (other than interest) you will receive directly from the buyer. File state and federal taxes for free Add to this amount the payment you are considered to have received (the difference between the mortgage and your installment sale basis). File state and federal taxes for free The contract price is then the same as your gross profit from the sale. File state and federal taxes for free    If the mortgage the buyer assumes is equal to or more than your installment sale basis, the gross profit percentage always will be 100%. File state and federal taxes for free Example. File state and federal taxes for free The selling price for your property is $9,000. File state and federal taxes for free The buyer will pay you $1,000 annually (plus 8% interest) over the next 3 years and assume an existing mortgage of $6,000. File state and federal taxes for free Your adjusted basis in the property is $4,400. File state and federal taxes for free You have selling expenses of $600, for a total installment sale basis of $5,000. File state and federal taxes for free The part of the mortgage that is more than your installment sale basis is $1,000 ($6,000 − $5,000). File state and federal taxes for free This amount is included in the contract price and treated as a payment received in the year of sale. File state and federal taxes for free The contract price is $4,000: Selling price $9,000 Minus: Mortgage (6,000) Amount actually received $3,000 Add difference:   Mortgage $6,000   Minus: Installment sale basis 5,000 1,000 Contract price $4,000   Your gross profit on the sale is also $4,000: Selling price $9,000 Minus: Installment sale basis (5,000) Gross profit $4,000   Your gross profit percentage is 100%. File state and federal taxes for free Report 100% of each payment (less interest) as gain from the sale. File state and federal taxes for free Treat the $1,000 difference between the mortgage and your installment sale basis as a payment and report 100% of it as gain in the year of sale. File state and federal taxes for free Buyer assumes other debts. File state and federal taxes for free   If the buyer assumes any other debts, such as a loan or back taxes, it may be considered a payment to you in the year of sale. File state and federal taxes for free   If the buyer assumes the debt instead of paying it off, only part of it may have to be treated as a payment. File state and federal taxes for free Compare the debt to your installment sale basis in the property being sold. File state and federal taxes for free If the debt is less than your installment sale basis, none of it is treated as a payment. File state and federal taxes for free If it is more, only the difference is treated as a payment. File state and federal taxes for free If the buyer assumes more than one debt, any part of the total that is more than your installment sale basis is considered a payment. File state and federal taxes for free These rules are the same as the rules discussed earlier under Buyer assumes mortgage . File state and federal taxes for free However, they apply only to the following types of debt the buyer assumes. File state and federal taxes for free Those acquired from ownership of the property you are selling, such as a mortgage, lien, overdue interest, or back taxes. File state and federal taxes for free Those acquired in the ordinary course of your business, such as a balance due for inventory you purchased. File state and federal taxes for free   If the buyer assumes any other type of debt, such as a personal loan or your legal fees relating to the sale, it is treated as if the buyer had paid off the debt at the time of the sale. File state and federal taxes for free The value of the assumed debt is then considered a payment to you in the year of sale. File state and federal taxes for free Property used as a payment. File state and federal taxes for free   If you receive property rather than money from the buyer, it is still considered a payment in the year received. File state and federal taxes for free However, see Trading property for like-kind property , later. File state and federal taxes for free Generally, the amount of the payment is the property's FMV on the date you receive it. File state and federal taxes for free Exception. File state and federal taxes for free   If the property the buyer gives you is payable on demand or readily tradable (see examples later), the amount you should consider as payment in the year received is: The FMV of the property on the date you receive it if you use the cash method of accounting, The face amount of the obligation on the date you receive it if you use an accrual method of accounting, or The stated redemption price at maturity less any original issue discount (OID) or, if there is no OID, the stated redemption price at maturity appropriately discounted to reflect total unstated interest. File state and federal taxes for free See Unstated interest , later. File state and federal taxes for free Examples. File state and federal taxes for free If you receive a note from the buyer as payment, and the note stipulates that you can demand payment from the buyer at any time, the note is payable on demand. File state and federal taxes for free If you receive marketable securities from the buyer as payment, and you can sell the securities on an established securities market (such as the New York Stock Exchange) at any time, the securities are readily tradable. File state and federal taxes for free In these examples, use the above rules to determine the amount you should consider as payment in the year received. File state and federal taxes for free Debt not payable on demand. File state and federal taxes for free   Any evidence of debt you receive from the buyer that is not payable on demand is not considered a payment. File state and federal taxes for free This is true even if the debt is guaranteed by a third party, including a government agency. File state and federal taxes for free Fair market value (FMV). File state and federal taxes for free   This is the price at which property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or sell and both having a reasonable knowledge of all the necessary facts. File state and federal taxes for free Third-party note. File state and federal taxes for free   If the property the buyer gives you is a third-party note (or other obligation of a third party), you are considered to have received a payment equal to the note's FMV. File state and federal taxes for free Because the FMV of the note is itself a payment on your installment sale, any payments you later receive from the third party are not considered payments on the sale. File state and federal taxes for free The excess of the note's face value over its FMV is interest. File state and federal taxes for free Exclude this interest in determining the selling price of the property. File state and federal taxes for free However, see Exception under Property used as a payment , earlier. File state and federal taxes for free Example. File state and federal taxes for free You sold real estate in an installment sale. File state and federal taxes for free As part of the down payment, the buyer assigned to you a $50,000, 8% third-party note. File state and federal taxes for free The FMV of the third-party note at the time of the sale was $30,000. File state and federal taxes for free This amount, not $50,000, is a payment to you in the year of sale. File state and federal taxes for free The third-party note had an FMV equal to 60% of its face value ($30,000 ÷ $50,000), so 60% of each principal payment you receive on this note is a nontaxable return of capital. File state and federal taxes for free The remaining 40% is interest taxed as ordinary income. File state and federal taxes for free Bond. File state and federal taxes for free   A bond or other evidence of debt you receive from the buyer that is payable on demand or readily tradable in an established securities market is treated as a payment in the year you receive it. File state and federal taxes for free For more information on the amount you should treat as a payment, see Exception under Property used as a payment , earlier. File state and federal taxes for free   If you receive a government or corporate bond for a sale before October 22, 2004, and the bond has interest coupons attached or can be readily traded in an established securities market, you are considered to have received payment equal to the bond's FMV. File state and federal taxes for free However, see Exception under Property used as a payment , earlier. File state and federal taxes for free Buyer's note. File state and federal taxes for free   The buyer's note (unless payable on demand) is not considered payment on the sale. File state and federal taxes for free However, its full face value is included when figuring the selling price and the contract price. File state and federal taxes for free Payments you receive on the note are used to figure your gain in the year received. File state and federal taxes for free Sale to a related person. File state and federal taxes for free   If you sell depreciable property to a related person and the sale is an installment sale, you may not be able to report the sale using the installment method. File state and federal taxes for free For information on these rules, see the Instructions for Form 6252 and Sale to a Related Person in Publication 537. File state and federal taxes for free Trading property for like-kind property. File state and federal taxes for free   If you trade business or investment property solely for the same kind of property to be held as business or investment property, you can postpone reporting the gain. File state and federal taxes for free See Like-Kind Exchanges in chapter 8 for a discussion of like-kind property. File state and federal taxes for free   If, in addition to like-kind property, you receive an installment obligation in the exchange, the following rules apply to determine installment sale income each year. File state and federal taxes for free The contract price is reduced by the FMV of the like-kind property received in the trade. File state and federal taxes for free The gross profit is reduced by any gain on the trade that can be postponed. File state and federal taxes for free Like-kind property received in the trade is not considered payment on the installment obligation. File state and federal taxes for free Unstated interest. File state and federal taxes for free   An installment sale contract may provide that each deferred payment on the sale will include interest or that there will be an interest payment in addition to the principal payment. File state and federal taxes for free Interest provided in the contract is called stated interest. File state and federal taxes for free   If an installment sale contract does not provide for adequate stated interest, part of the stated principal amount of the contract may be recharacterized as interest. File state and federal taxes for free If Internal Revenue Code section 483 applies to the contract, this interest is called unstated interest. File state and federal taxes for free   If Internal Revenue Code section 1274 applies to the contract, this interest is called original issue discount (OID). File state and federal taxes for free   Generally, if a buyer gives a debt in consideration for personal use property, the unstated interest rules do not apply. File state and federal taxes for free Therefore, the buyer cannot deduct the unstated interest. File state and federal taxes for free The seller must report the unstated interest as income. File state and federal taxes for free Personal-use property is any property in which substantially all of its use by the buyer is not in connection with a trade or business or an investment activity. File state and federal taxes for free   If the debt is subject to the Internal Revenue Code section 483 rules and is also subject to the below-market loan rules, such as a gift loan, compensation-related loan or corporation-shareholder loan, then both parties are subject to the below-market loan rules rather than the unstated interest rules. File state and federal taxes for free   Unstated interest reduces the stated selling price of the property and the buyer's basis in the property. File state and federal taxes for free It increases the seller's interest income and the buyer's interest expense. File state and federal taxes for free   In general, an installment sale contract provides for adequate stated interest if the stated interest rate (based on an appropriate compounding period) is at least equal to the applicable federal rate (AFR). File state and federal taxes for free    The AFRs are published monthly in the Internal Revenue Bulletin (IRB). File state and federal taxes for free You can get this information by contacting an IRS office. File state and federal taxes for free IRBs are also available at IRS. File state and federal taxes for free gov. File state and federal taxes for free More information. File state and federal taxes for free   For more information, see Unstated Interest and Original Issue Discount (OID) in Publication 537. File state and federal taxes for free Example. File state and federal taxes for free You sell property at a contract price of $6,000 and your gross profit is $1,500. File state and federal taxes for free Your gross profit percentage is 25% ($1,500 ÷ $6,000). File state and federal taxes for free After subtracting interest, you report 25% of each payment, including the down payment, as installment sale income from the sale for the tax year you receive the payment. File state and federal taxes for free The remainder (balance) of each payment is the tax-free return of your adjusted basis. File state and federal taxes for free Example On January 3, 2013, you sold your farm, including the home, farm land and buildings. File state and federal taxes for free You received $50,000 down and the buyer's note for $200,000. File state and federal taxes for free In addition, the buyer assumed an outstanding $50,000 mortgage on the farm land. File state and federal taxes for free The total selling price was $300,000. File state and federal taxes for free The note payments of $25,000 each, plus adequate interest, are due every July 1 and January 1, beginning in July 2013. File state and federal taxes for free Your selling expenses were $15,000. File state and federal taxes for free Adjusted basis and depreciation. File state and federal taxes for free   The adjusted basis and depreciation claimed on each asset sold are as follows:   Depreciation Adjusted Asset Claimed Basis Home* -0- $33,743 Farm land -0- 73,610 Buildings $31,500 35,130 * Owned and used as main home for at least 2 of the 5 years prior to the sale Gain on each asset. File state and federal taxes for free   The following schedule shows the assets included in the sale, each asset's selling price based on its respective value, the selling expense allocated to each asset, the adjusted basis of each asset, and the gain on each asset. File state and federal taxes for free The selling expense for each asset is 5% of the selling price ($15,000 selling expense ÷ $300,000 selling price). File state and federal taxes for free   Selling Selling Adjusted     Price Expense Basis Gain Home* $60,000 $3,000 $33,743 $23,257 Farm land  165,000  8,250  73,610  83,140 Buildings 75,000 3,750 35,130 36,120   $300,000 $15,000 $142,483 $142,517 * Owned and used as main home for at least 2 of the 5 years prior to the sale Depreciation recapture. File state and federal taxes for free   The buildings are section 1250 property. File state and federal taxes for free There is no depreciation recapture income for them because they were depreciated using the straight line method. File state and federal taxes for free See chapter 9 for more information on depreciation recapture. File state and federal taxes for free   Special rules may apply when you sell section 1250 assets depreciated under the straight line method. File state and federal taxes for free See the Unrecaptured Section 1250 Gain Worksheet in the Instructions for Schedule D (Form 1040). File state and federal taxes for free See chapter 3 of Publication 544, Sales and Other Dispositions of Assets, for more information on section 1250 assets. File state and federal taxes for free Installment sale basis and gross profit. File state and federal taxes for free   The following table shows each asset reported on the installment method, its selling price, installment sale basis, and gross profit. File state and federal taxes for free     Installment     Selling Sale Gross   Price Basis Profit Farm land $165,000 $73,610 $83,140 Buildings 75,000 35,130 36,120   $240,000 $108,740 $119,260 Section 1231 gains. File state and federal taxes for free   The gain on the farm land and buildings is reported as section 1231 gains. File state and federal taxes for free See Section 1231 Gains and Losses in chapter 9. File state and federal taxes for free Contract price and gross profit percentage. File state and federal taxes for free   The contract price is $250,000 for the part of the sale reported on the installment method. File state and federal taxes for free This is the selling price ($300,000) minus the mortgage assumed ($50,000). File state and federal taxes for free   Gross profit percentage for the sale is 47. File state and federal taxes for free 70% ($119,260 gross profit ÷ $250,000 contract price). File state and federal taxes for free The gross profit percentage for each asset is figured as follows:   Percent Farm land ($83,140 ÷ $250,000) 33. File state and federal taxes for free 256 Buildings ($36,120 ÷ $250,000) 14. File state and federal taxes for free 448 Total 47. File state and federal taxes for free 70 Figuring the gain to report on the installment method. File state and federal taxes for free   One hundred percent (100%) of each payment is reported on the installment method. File state and federal taxes for free The total amount received on the sale in 2013 is $75,000 ($50,000 down payment + $25,000 payment on July 1). File state and federal taxes for free The installment sale part of the total payments received in 2013 is also $75,000. File state and federal taxes for free Figure the gain to report for each asset by multiplying its gross profit percentage times $75,000. File state and federal taxes for free   Income Farm land—33. File state and federal taxes for free 256% × $75,000 $24,942 Buildings—14. File state and federal taxes for free 448% × $75,000 10,836 Total installment income for 2013 $35,778 Reporting the sale. File state and federal taxes for free   Report the installment sale on Form 6252. File state and federal taxes for free Then report the amounts from Form 6252 on Form 4797 and Schedule D (Form 1040). File state and federal taxes for free Attach a separate page to Form 6252 that shows the computations in the example. File state and federal taxes for free If you sell depreciable business property, prepare Form 4797 first in order to figure the amount to enter on line 12 of Part I, Form 6252. File state and federal taxes for free Section 1231 gains. File state and federal taxes for free   The gains on the farm land and buildings are section 1231 gains. File state and federal taxes for free They may be reported as either capital or ordinary gain depending on the net balance when combined with other section 1231 losses. File state and federal taxes for free A net 1231 gain is capital gain and a net 1231 loss is an ordinary loss. File state and federal taxes for free Installment income for years after 2013. File state and federal taxes for free   You figure installment income for the years after 2013 by applying the same gross profit percentages to the payments you receive each year. File state and federal taxes for free If you receive $50,000 during the year, the entire $50,000 is considered received on the installment sale (100% × $50,000). File state and federal taxes for free You realize income as follows:   Income Farm land—33. File state and federal taxes for free 256% × $50,000 $16,628 Buildings—14. File state and federal taxes for free 448% × $50,000 7,224 Total installment income $23,852   In this example, no gain ever is recognized from the sale of your home. File state and federal taxes for free You will combine your section 1231 gains from this sale with section 1231 gains and losses from other sales in each of the later years to determine whether to report them as ordinary or capital gains. File state and federal taxes for free The interest received with each payment will be included in full as ordinary income. File state and federal taxes for free Summary. File state and federal taxes for free   The installment income (rounded to the nearest dollar) from the sale of the farm is reported as follows: Selling price $190,000 Minus: Installment basis (108,740) Gross profit $81,260     Gain reported in 2012 (year of sale) $35,778 Gain reported in 2013:   $50,000 × 47. File state and federal taxes for free 70% 23,850 Gain reported in 2014:   $50,000 × 47. File state and federal taxes for free 70% 23,850 Gain reported in 2015:   $50,000 × 47. File state and federal taxes for free 70% 23,850 Gain reported in 2016:   $25,000 × 47. File state and federal taxes for free 70% 11,925 Total gain reported $119,253 Prev  Up  Next   Home   More Online Publications
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CP 57 - Notice of Insufficient Funds

Details About This Notice:
Sample Content: Page 1
Purpose:   We send a CP 57 to inform the recipient that we're assessing a penalty for insufficient funds on their account.
Reason for Issuance:   When we attempted to withdraw the agreed upon installment amount from the recipient's bank account, we were notified that there were insuffient funds available. We send this notice to inform the recipient that we're charging them a penalty for insufficient funds and to explain what will happen if this recurs.
     
Frequently Asked Questions About This Notice
Page Last Reviewed or Updated: 31-Mar-2014

The File State And Federal Taxes For Free

File state and federal taxes for free Index A Abandonment, Abandonment Accounting method Accrual, Accrual Method Cash, Cash Method Change in, Changes in Methods of Accounting Crop, Crop method. File state and federal taxes for free Farm inventory, Farm Inventory Accounting periods, Introduction Accrual method of accounting, Accrual Method Additional Medicare Tax withholding, What's New for 2013, Additional Medicare Tax. File state and federal taxes for free Adjusted basis for installment sale, Adjusted basis for installment sale purposes. File state and federal taxes for free Adjusted basis of assets, Adjusted Basis Agricultural activity codes, Schedule F, Reminders Agricultural program payments, Agricultural Program Payments Agricultural structure, defined, Agricultural structure. File state and federal taxes for free Alternative Depreciation System (ADS), Required use of ADS. File state and federal taxes for free , ADS election. File state and federal taxes for free Amortization Going into business, Business Start-Up Costs Reforestation expenses, Reforestation Costs Section 197 intangibles, Section 197 Intangibles Assessments By conservation district, Assessment by Conservation District Depreciable property, Assessment for Depreciable Property Assistance (see Tax help) Automobiles, depreciation, Limits for passenger automobiles. File state and federal taxes for free B Bankruptcy, Bankruptcy. File state and federal taxes for free Barter income, Barter income. File state and federal taxes for free Basis Adjusted, Adjusted basis. File state and federal taxes for free Installment sale, Adjusted basis for installment sale purposes. File state and federal taxes for free Involuntary conversion, Basis for depreciation. File state and federal taxes for free Like-kind exchange, Basis for depreciation. File state and federal taxes for free Partner's basis, Property Distributed From a Partnership or Corporation Replacement property, Basis of replacement property. File state and federal taxes for free Shareholder's basis, Property Distributed From a Partnership or Corporation Basis of assets Adjusted basis, Adjusted Basis Allocating to several assets, Allocating the Basis Changed to business use, Property changed from personal to business or rental use. File state and federal taxes for free Constructing assets, Constructing assets. File state and federal taxes for free Cost, Cost Basis Decreases, Decreases to Basis Depreciation, What Is the Basis for Depreciation? Exchanges Like-kind, Like-Kind Exchanges Nontaxable, Nontaxable Exchanges Partially nontaxable, Partially Nontaxable Exchanges Taxable, Taxable Exchanges Gifts, Property Received as a Gift Increases, Increases to Basis Real property, Real Property Received for services, Property received for services. File state and federal taxes for free Uniform capitalization rules, Uniform Capitalization Rules Below-market loans, Below-market loans. File state and federal taxes for free Books and records, Importance of Records Breeding fees, Breeding Fees Business income limit, section 179 expense deduction, Business Income Limit Business use of home, Business Use of Your Home C Canceled debt, Cancellation of Debt Capital assets, Capital Assets Capital expenses, Capital Expenses Car expenses, Truck and Car Expenses Cash method of accounting, Cash Method Casualties and thefts Adjustments to basis, Adjustments to basis. File state and federal taxes for free Casualty, defined, Casualty. File state and federal taxes for free Disaster area losses, Disaster Area Losses Leased property, Leased property. File state and federal taxes for free Livestock, Livestock or produce bought for resale. File state and federal taxes for free , Raised draft, breeding, dairy, or sporting animals. File state and federal taxes for free Reimbursement, Insurance and other reimbursements. File state and federal taxes for free Reporting gains and losses, Reporting Gains and Losses Theft, defined, Theft. File state and federal taxes for free Change in accounting method, Changes in Methods of Accounting Chickens, purchased, Chickens, seeds, and young plants. File state and federal taxes for free Christmas trees, Christmas tree cultivation. File state and federal taxes for free , Christmas trees. File state and federal taxes for free Club dues, Club dues and membership fees. File state and federal taxes for free Comments on publication, Comments and suggestions. File state and federal taxes for free Commodity Futures, Hedging (Commodity Futures) Wages, Noncash wages. File state and federal taxes for free Commodity Credit Corporation (CCC) Loans, Commodity Credit Corporation (CCC) Loans Market gain, Market Gain Community property, Community property. File state and federal taxes for free , Community property. File state and federal taxes for free Computer, software, Computer software. File state and federal taxes for free Condemnation, Casualties, Thefts, and Condemnations, Condemnation Conservation Cost-sharing exclusion, Conservation Expenses District assessments, Assessment by Conservation District Expenses, Conservation Expenses Plans, Conservation plan. File state and federal taxes for free Conservation Reserve Program, Conservation Reserve Program (CRP) payments. File state and federal taxes for free Conservation Reserve Program (CRP), Conservation Reserve Program (CRP) Constructing assets, Constructing assets. File state and federal taxes for free Constructive receipt of income, Constructive receipt. File state and federal taxes for free Contamination, Soil or other environmental contamination. File state and federal taxes for free Contract price, Contract price. File state and federal taxes for free Converted wetland, Converted Wetland and Highly Erodible Cropland Cooperatives, income from, Income From Cooperatives Cost-sharing exclusion, Cost-Sharing Exclusion (Improvements) Counter-cyclical payments, Direct payments and counter-cyclical payments. File state and federal taxes for free , Payments Under the Farm Security and Rural Investment Act of 2002 and Under the Food, Conservation, and Energy Act of 2008 Credits Employment, Employment Credits Fuel tax, Fuel tax credit and refund. File state and federal taxes for free , How To Claim a Credit or Refund, Claiming a Credit Social security and Medicare, Earning credits in 2013. File state and federal taxes for free Social security coverage, How to become insured under social security. File state and federal taxes for free State unemployment tax, Tax rate and credit. File state and federal taxes for free Crew leaders, Crew Leaders Crop Destroyed, Standing crop destroyed by casualty. File state and federal taxes for free Insurance proceeds, Crop Insurance and Crop Disaster Payments Method of accounting, Crop method. File state and federal taxes for free Shares, Rents (Including Crop Shares) Unharvested, Cost of raising unharvested crops. File state and federal taxes for free , Section 1231 transactions. File state and federal taxes for free , Gain or loss. File state and federal taxes for free Cropland, highly erodible, Converted Wetland and Highly Erodible Cropland D Damage Casualties and thefts, Casualties and Thefts Crop insurance, Crop Insurance and Crop Disaster Payments Tree seedlings, Tree Seedlings Debt Bad, Nonbusiness bad debt. File state and federal taxes for free Canceled, Cancellation of Debt, Canceled debt excluded from income. File state and federal taxes for free , Cancellation of debt. File state and federal taxes for free , Canceled debt. File state and federal taxes for free Nonrecourse, Amount realized on a nonrecourse debt. File state and federal taxes for free Qualified farm, Qualified Farm Debt Qualified principal residence, Qualified Principal Residence Debt Recourse, Amount realized on a recourse debt. File state and federal taxes for free Depletion, Depletion Depreciation, Claiming the Special Depreciation Allowance ADS election, ADS election. File state and federal taxes for free Conservation assets, Depreciable conservation assets. File state and federal taxes for free Deduction, Overview of Depreciation Incorrect amount deducted, How Do You Correct Depreciation Deductions? Limit for automobiles, Limits for passenger automobiles. File state and federal taxes for free Listed property, Additional Rules for Listed Property Raised livestock, Livestock. File state and federal taxes for free Recapture, When Do You Recapture MACRS Depreciation?, Depreciation Recapture, Section 1250 Property When to file, Do You Have To File Form 4562? Depreciation allowable, Basis adjustment for depreciation allowed or allowable. File state and federal taxes for free Depreciation allowed, Basis adjustment for depreciation allowed or allowable. File state and federal taxes for free Direct payments, Direct payments and counter-cyclical payments. File state and federal taxes for free , Payments Under the Farm Security and Rural Investment Act of 2002 and Under the Food, Conservation, and Energy Act of 2008 Disaster area losses, Disaster Area Losses Disaster payments, Crop Insurance and Crop Disaster Payments Disaster relief grants, Federal disaster relief grants. File state and federal taxes for free Disaster relief payments, Qualified disaster relief payments. File state and federal taxes for free Dispositions, Sale or other disposal of land during 9-year period. File state and federal taxes for free , Gain on sale of farmland. File state and federal taxes for free , Introduction Domestic production activities deduction, Domestic Production Activities Deduction Dyed diesel fuel, Dyed Diesel Fuel and Dyed Kerosene Dyed kerosene, Dyed Diesel Fuel and Dyed Kerosene E e-file, Reminders Easement, Easements and rights-of-way. File state and federal taxes for free , Easements. File state and federal taxes for free Election ADS depreciation, Electing ADS. File state and federal taxes for free , ADS election. File state and federal taxes for free Amortization Business start-up costs, Business Start-Up Costs Reforestation costs, Reforestation Costs Crop method, Election to use crop method. File state and federal taxes for free Cutting of timber, Election to treat cutting as a sale or exchange. File state and federal taxes for free Deducting conservation expenses, When to Deduct or Capitalize Not excluding cost-sharing payments, Electing not to exclude payments. File state and federal taxes for free Out of installment method, Electing out of the installment method. File state and federal taxes for free Postponing casualty gain, Postponing Gain Postponing reporting crop insurance proceeds, Election to postpone reporting until the following year. File state and federal taxes for free Section 179 expense deduction, How Do You Elect the Deduction? Electronic filing, Reminders Embryo transplants, Transplanted embryo. File state and federal taxes for free Employer identification number, Reminders, Employer identification number (EIN). File state and federal taxes for free Endangered species recovery expenses, Endangered species recovery expenses. File state and federal taxes for free Environmental contamination, Soil or other environmental contamination. File state and federal taxes for free Estimated tax Farm gross income, Gross Income From Farming Gross income, Gross Income Penalties, Estimated Tax Penalty for 2013 Exchanges Basis Like-kind, Like-Kind Exchanges Nontaxable, Nontaxable Exchanges Partially nontaxable, Partially Nontaxable Exchanges Taxable, Taxable Exchanges Like-kind, Like-Kind Exchanges Nontaxable, Like-Kind Exchanges Excise taxes Credit, Claiming a Credit Diesel fuel, Dyed Diesel Fuel and Dyed Kerosene Farming purposes, Fuels Used in Farming Home use of fuels, Fuels Used for Household Purposes or Other Than as a Fuel for Propulsion Engines Off-highway uses, Fuels Used in Off-Highway Business Use Refund, Claiming a Refund F Fair market value defined, Fair market value (FMV). File state and federal taxes for free , Fair market value (FMV). File state and federal taxes for free Family member Business expenses, Special rule for related persons. File state and federal taxes for free Installment sale, Sale to a related person. File state and federal taxes for free Like-kind exchange, Like-kind exchanges between related persons. File state and federal taxes for free Loss on sale or exchange of property, Losses from sales or exchanges between related persons. File state and federal taxes for free Personal-use property, Personal-use property. File state and federal taxes for free Social security coverage, Family Employees Farm Business expenses, Farm Business Expenses Business, defined, Business of Farming Defined, Farm defined. File state and federal taxes for free , Farm. File state and federal taxes for free Income averaging, Income Averaging for Farmers Rental, Farm rental. File state and federal taxes for free Sale of, Sale of a Farm Farmer, Farmer. File state and federal taxes for free Federal unemployment tax (FUTA), Federal Unemployment (FUTA) Tax Fertilizer, Fertilizer and Lime, Fertilizer and Lime Foreclosure, Foreclosure or Repossession Forestation costs, Forestation and reforestation costs. File state and federal taxes for free Form 1099-A, Form 1099-A. File state and federal taxes for free , Forms 1099-A and 1099-C. File state and federal taxes for free 1099-C, Cancellation of Debt, Form 1099-C. File state and federal taxes for free , Forms 1099-A and 1099-C. File state and federal taxes for free 1099-G, Market Gain, Payment to More Than One Person 1099-MISC, Reminders, Nonemployee compensation. File state and federal taxes for free 1099-PATR, Form 1099-PATR. File state and federal taxes for free 1128, Introduction 2210-F, Estimated Tax Penalty for 2013 3115, Changes in Methods of Accounting 4136, Claiming a Credit 4562, Do You Have To File Form 4562? 4797, Form 4797. File state and federal taxes for free , Recapture. File state and federal taxes for free , Reporting the exchange. File state and federal taxes for free 4835, Rents (Including Crop Shares) 5213, Using the presumption later. File state and federal taxes for free 6252, Form 6252. File state and federal taxes for free 8822, Reminders 8824, Reporting the exchange. File state and federal taxes for free 8849, Claiming a Refund 8886, Reminders 940, Form 940. File state and federal taxes for free 943, Form 943. File state and federal taxes for free 982, Form 982 I-9, Form I-9. File state and federal taxes for free SS-4, Reminders, Employer identification number (EIN). File state and federal taxes for free SS-5, Obtaining a social security number. File state and federal taxes for free T (Timber), Form T (Timber). File state and federal taxes for free W-2, Form W-2. File state and federal taxes for free W-4, Reminders, New hire reporting. File state and federal taxes for free , Form W-4. File state and federal taxes for free W-4V, Commodity Credit Corporation (CCC) Loans, Crop Insurance and Crop Disaster Payments W-7, Obtaining an individual taxpayer identification number. File state and federal taxes for free Free tax services, How To Get Tax Help, Free help with your tax return. File state and federal taxes for free Fuel tax credit or refund, Fuel tax credit and refund. File state and federal taxes for free , How To Claim a Credit or Refund G Gains and losses Basis of assets, Cost Basis Capital assets, defined, Capital Assets Casualty, How To Figure a Loss, Figuring a Gain Installment sales, Installment Sales Livestock, Livestock Long- or short-term, Long and Short Term Ordinary or capital, Ordinary or Capital Gain or Loss Sale of farm, Sale of a Farm Section 1231, Section 1231 Gains and Losses Theft, How To Figure a Loss, Figuring a Gain Timber, Timber General asset accounts, How Do You Use General Asset Accounts? Gifts, Crop shares you give to others (gift). File state and federal taxes for free , Cost related to gifts. File state and federal taxes for free , Property Received as a Gift, Gift. File state and federal taxes for free Going into business, Business Start-Up Costs Grants, disaster relief, Federal disaster relief grants. File state and federal taxes for free Gross profit percentage, Gross profit percentage. File state and federal taxes for free Gross profit, defined, Gross profit. File state and federal taxes for free Guarantee, Debt not payable on demand. File state and federal taxes for free H Health insurance deduction, Self-employed health insurance deduction. File state and federal taxes for free Hedging, Hedging (Commodity Futures) Help (see Tax help) Highway use tax, Highway use tax. File state and federal taxes for free Holding period, Holding period. File state and federal taxes for free Horticultural structure, Horticultural structure. File state and federal taxes for free I Illegal irrigation subsidy, Illegal federal irrigation subsidy. File state and federal taxes for free Important dates, Important Dates for 2014 Improvements, Cost-Sharing Exclusion (Improvements) Income Accounting for, Accounting Methods Accrual method of accounting, Income Canceled debt excluded, Cancellation of Debt From farming, Farm Income, Gross income from farming. File state and federal taxes for free , Gross Income From Farming Gross, Gross Income Not-for-profit farming, Not-for-Profit Farming Pasture, Pasture income and rental. File state and federal taxes for free Schedule F, Farm Income Withholding of tax, Federal Income Tax Withholding Income averaging (see Farm: Income averaging) Incorrect amount of depreciation deducted, How Do You Correct Depreciation Deductions? Individual taxpayer identification number (ITIN), Obtaining an individual taxpayer identification number. File state and federal taxes for free Inherited property, Inherited Property Insolvency, Insolvency. File state and federal taxes for free Installment sales, Form 6252. File state and federal taxes for free Electing out, Electing out of the installment method. File state and federal taxes for free Farm, sale of, Installment Sale of a Farm Figuring income, Figuring Installment Sale Income Reporting income, Form 6252. File state and federal taxes for free Unstated interest, Unstated interest. File state and federal taxes for free Insurance, Insurance, Self-employed health insurance deduction. File state and federal taxes for free Intangible property, Section 197 Intangibles Interest Expense, Interest Income, Interest income. File state and federal taxes for free Unstated, Unstated interest. File state and federal taxes for free Inventory Items included, Farm Inventory Methods of valuation, Inventory valuation methods. 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File state and federal taxes for free Nontaxable transfer, Property acquired in a nontaxable transfer. File state and federal taxes for free Market gain, reporting, Market Gain Marketing quota penalties, Marketing Quota Penalties Material participation, Landlord Participation in Farming Meals, Meals. File state and federal taxes for free Membership fees, Club dues and membership fees. File state and federal taxes for free Methods of accounting, Accounting Methods Modified ACRS (MACRS) ADS election, ADS election. File state and federal taxes for free Conventions, Which Convention Applies? Depreciation methods, Which Depreciation Method Applies? Exchange, Property acquired in a like-kind exchange or involuntary conversion. File state and federal taxes for free Figuring the deduction, How Is the Depreciation Deduction Figured? Involuntary conversion, Property acquired in a like-kind exchange or involuntary conversion. File state and federal taxes for free Nontaxable transfer, Property acquired in a nontaxable transfer. File state and federal taxes for free Percentage tables, Rules for using the tables. File state and federal taxes for free Property classes, Which Property Class Applies Under GDS? Recovery periods, Which Recovery Period Applies? N New hire reporting, New hire reporting. File state and federal taxes for free Noncapital asset, Noncapital Assets Nontaxable exchanges, Like-Kind Exchanges Nontaxable transfer of MACRS property, Property acquired in a nontaxable transfer. File state and federal taxes for free Not-for-profit farming, Not-for-Profit Farming O Organizational costs, Business start-up and organizational costs. File state and federal taxes for free P Partners, limited, Limited partner. File state and federal taxes for free Partners, retired, Retired partner. File state and federal taxes for free Partners, Spouse, Business Owned and Operated by Spouses. 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File state and federal taxes for free Qualified farm debt, Qualified Farm Debt Qualified joint venture, Qualified joint venture. File state and federal taxes for free Qualified principal residence debt, Qualified Principal Residence Debt R Recapture Amortization, Depreciation and amortization. File state and federal taxes for free Basis reductions, Recapture of basis reductions. File state and federal taxes for free Certain depreciation, Recapture of certain depreciation. File state and federal taxes for free Cost-sharing payments, Recapture. File state and federal taxes for free Depreciation, When Do You Recapture MACRS Depreciation?, Depreciation Recapture, Depreciation recapture. File state and federal taxes for free Section 1245 property, Section 1245 Property Section 1250 property, Section 1250 Property Section 179 expense deduction, When Must You Recapture the Deduction? Section 179 GO Zone property, Recapture for qualified section 179 GO Zone property. 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File state and federal taxes for free Feed assistance, Feed Assistance and Payments Real estate taxes, Real estate taxes. File state and federal taxes for free Reforestation expenses, Qualifying costs. File state and federal taxes for free To employees, Reimbursements to employees. File state and federal taxes for free Related persons, Special rule for related persons. File state and federal taxes for free , Losses from sales or exchanges between related persons. File state and federal taxes for free , Special rules for related persons. File state and federal taxes for free , Like-kind exchanges between related persons. File state and federal taxes for free , Sale to a related person. File state and federal taxes for free , Buying replacement property from a related person. File state and federal taxes for free , Related persons. File state and federal taxes for free Rental income, Rents (Including Crop Shares) Rented property, improvements, Improvements to rented property. 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File state and federal taxes for free Self-employed health insurance deduction, Self-employed health insurance deduction. File state and federal taxes for free Self-employment tax Community property, Community property. File state and federal taxes for free Deduction, Deduction for employer-equivalent portion of self-employment tax. File state and federal taxes for free How to pay, How To Pay Self-Employment Tax Landlord participation, Landlord Participation in Farming Material participation, Material participation for landlords. File state and federal taxes for free Maximum net earnings, What's New for 2013 Methods for figuring net earnings, Methods for Figuring Net Earnings Optional method, Farm Optional Method Regular method, Regular Method Rental income, Landlord Participation in Farming Reporting, Reporting Self-Employment Tax Self-employment tax rate, Self-employment tax rate. File state and federal taxes for free Share farming, Share farmer. File state and federal taxes for free Tax rates, What's New for 2013 Who must pay, Who Must Pay Self-Employment Tax? Selling expenses, Selling expenses. File state and federal taxes for free Selling price Defined, Selling price. File state and federal taxes for free Reduced, Selling price reduced. File state and federal taxes for free Settlement costs (fees), Settlement costs. File state and federal taxes for free Social security and Medicare Credits of coverage, Earning credits in 2013. File state and federal taxes for free Withholding of tax, Social Security and Medicare Taxes Social security number, Obtaining a social security number. File state and federal taxes for free Software, computer, Computer software. File state and federal taxes for free Soil Conservation, Conservation Expenses Contamination, Soil or other environmental contamination. File state and federal taxes for free Special depreciation allowance How to elect not to claim, How Can You Elect Not To Claim the Allowance? Recapture, When Must You Recapture an Allowance Standard mileage rate, Standard mileage rate. File state and federal taxes for free Start-up costs for businesses, Business start-up and organizational costs. File state and federal taxes for free Suggestions for publication, Comments and suggestions. File state and federal taxes for free T Tangible personal property, Tangible personal property. File state and federal taxes for free Tax help, How To Get Tax Help Tax preparation fees, Tax preparation fees. File state and federal taxes for free Tax shelter At-risk limits, At-Risk Limits Defined, Tax shelter. File state and federal taxes for free Tax-free exchanges, Like-Kind Exchanges Taxes Excise, Excise Taxes Federal use, Highway use tax. File state and federal taxes for free General, Taxes Self-employment, Self-Employment Tax State and federal, State and federal income taxes. File state and federal taxes for free State and local general sales, State and local general sales taxes. File state and federal taxes for free Withholding, Federal income tax withholding. File state and federal taxes for free , Social Security and Medicare Taxes, Federal Income Tax Withholding Telephone expense, Telephone expense. File state and federal taxes for free Tenant house expenses, Tenant House Expenses Term interests, Certain term interests in property. File state and federal taxes for free Theft losses, Casualties, Thefts, and Condemnations Timber, Timber. File state and federal taxes for free , Timber Depletion, Timber Tobacco quota buyout payments, Tobacco Quota Buyout Program Payments Tobacco settlement payments, National Tobacco Growers' Settlement Trust Fund Payments Trade-in, Sale and Purchase Travel expenses, Travel Expenses Truck expenses, Truck and Car Expenses Trust fund recovery penalty, Trust fund recovery penalty. File state and federal taxes for free TTY/TDD information, How To Get Tax Help U Uniform capitalization rules Basis of assets, Uniform Capitalization Rules Inventory, Uniform capitalization rules. File state and federal taxes for free Unstated interest, Unstated interest. File state and federal taxes for free W Wages and salaries, Wages and salaries. File state and federal taxes for free Water conservation, Conservation Expenses Water well, Water well. File state and federal taxes for free , Water wells. File state and federal taxes for free Weather-related sales, livestock, Sales Caused by Weather-Related Conditions, Weather-related sales of livestock. File state and federal taxes for free Withholding Income tax, Federal Income Tax Withholding Social security and Medicare tax, Social Security and Medicare Taxes Prev  Up     Home   More Online Publications