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File taxes free online 1. File taxes free online   Overview of Depreciation Table of Contents Introduction Useful Items - You may want to see: What Property Can Be Depreciated?Property You Own Property Used in Your Business or Income-Producing Activity Property Having a Determinable Useful Life Property Lasting More Than One Year What Property Cannot Be Depreciated?Land Excepted Property When Does Depreciation Begin and End?Placed in Service Idle Property Cost or Other Basis Fully Recovered Retired From Service What Method Can You Use To Depreciate Your Property?Property You Placed in Service Before 1987 Property Owned or Used in 1986 Intangible Property Corporate or Partnership Property Acquired in a Nontaxable Transfer Election To Exclude Property From MACRS What Is the Basis of Your Depreciable Property?Cost as Basis Other Basis Adjusted Basis How Do You Treat Repairs and Improvements? Do You Have To File Form 4562? How Do You Correct Depreciation Deductions?Filing an Amended Return Changing Your Accounting Method Introduction Depreciation is an annual income tax deduction that allows you to recover the cost or other basis of certain property over the time you use the property. File taxes free online It is an allowance for the wear and tear, deterioration, or obsolescence of the property. File taxes free online This chapter discusses the general rules for depreciating property and answers the following questions. File taxes free online What property can be depreciated? What property cannot be depreciated? When does depreciation begin and end? What method can you use to depreciate your property? What is the basis of your depreciable property? How do you treat repairs and improvements? Do you have to file Form 4562? How do you correct depreciation deductions? Useful Items - You may want to see: Publication 534 Depreciating Property Placed in Service Before 1987 535 Business Expenses 538 Accounting Periods and Methods 551 Basis of Assets Form (and Instructions) Sch C (Form 1040) Profit or Loss From Business Sch C-EZ (Form 1040) Net Profit From Business 2106 Employee Business Expenses 2106-EZ Unreimbursed Employee Business Expenses 3115 Application for Change in Accounting Method 4562 Depreciation and Amortization See chapter 6 for information about getting publications and forms. File taxes free online What Property Can Be Depreciated? You can depreciate most types of tangible property (except land), such as buildings, machinery, vehicles, furniture, and equipment. File taxes free online You also can depreciate certain intangible property, such as patents, copyrights, and computer software. File taxes free online To be depreciable, the property must meet all the following requirements. File taxes free online It must be property you own. File taxes free online It must be used in your business or income-producing activity. File taxes free online It must have a determinable useful life. File taxes free online It must be expected to last more than one year. File taxes free online The following discussions provide information about these requirements. File taxes free online Property You Own To claim depreciation, you usually must be the owner of the property. File taxes free online You are considered as owning property even if it is subject to a debt. File taxes free online Example 1. File taxes free online You made a down payment to purchase rental property and assumed the previous owner's mortgage. File taxes free online You own the property and you can depreciate it. File taxes free online Example 2. File taxes free online You bought a new van that you will use only for your courier business. File taxes free online You will be making payments on the van over the next 5 years. File taxes free online You own the van and you can depreciate it. File taxes free online Leased property. File taxes free online   You can depreciate leased property only if you retain the incidents of ownership in the property (explained below). File taxes free online This means you bear the burden of exhaustion of the capital investment in the property. File taxes free online Therefore, if you lease property from someone to use in your trade or business or for the production of income, you generally cannot depreciate its cost because you do not retain the incidents of ownership. File taxes free online You can, however, depreciate any capital improvements you make to the property. File taxes free online See How Do You Treat Repairs and Improvements later in this chapter and Additions and Improvements under Which Recovery Period Applies in chapter 4. File taxes free online   If you lease property to someone, you generally can depreciate its cost even if the lessee (the person leasing from you) has agreed to preserve, replace, renew, and maintain the property. File taxes free online However, if the lease provides that the lessee is to maintain the property and return to you the same property or its equivalent in value at the expiration of the lease in as good condition and value as when leased, you cannot depreciate the cost of the property. File taxes free online Incidents of ownership. File taxes free online   Incidents of ownership in property include the following. File taxes free online The legal title to the property. File taxes free online The legal obligation to pay for the property. File taxes free online The responsibility to pay maintenance and operating expenses. File taxes free online The duty to pay any taxes on the property. File taxes free online The risk of loss if the property is destroyed, condemned, or diminished in value through obsolescence or exhaustion. File taxes free online Life tenant. File taxes free online   Generally, if you hold business or investment property as a life tenant, you can depreciate it as if you were the absolute owner of the property. File taxes free online However, see Certain term interests in property under Excepted Property, later. File taxes free online Cooperative apartments. File taxes free online   If you are a tenant-stockholder in a cooperative housing corporation and use your cooperative apartment in your business or for the production of income, you can depreciate your stock in the corporation, even though the corporation owns the apartment. File taxes free online   Figure your depreciation deduction as follows. File taxes free online Figure the depreciation for all the depreciable real property owned by the corporation in which you have a proprietary lease or right of tenancy. File taxes free online If you bought your cooperative stock after its first offering, figure the depreciable basis of this property as follows. File taxes free online Multiply your cost per share by the total number of outstanding shares, including any shares held by the corporation. File taxes free online Add to the amount figured in (a) any mortgage debt on the property on the date you bought the stock. File taxes free online Subtract from the amount figured in (b) any mortgage debt that is not for the depreciable real property, such as the part for the land. File taxes free online Subtract from the amount figured in (1) any depreciation for space owned by the corporation that can be rented but cannot be lived in by tenant-stockholders. File taxes free online Divide the number of your shares of stock by the total number of outstanding shares, including any shares held by the corporation. File taxes free online Multiply the result of (2) by the percentage you figured in (3). File taxes free online This is your depreciation on the stock. File taxes free online   Your depreciation deduction for the year cannot be more than the part of your adjusted basis in the stock of the corporation that is allocable to your business or income-producing property. File taxes free online You must also reduce your depreciation deduction if only a portion of the property is used in a business or for the production of income. File taxes free online Example. File taxes free online You figure your share of the cooperative housing corporation's depreciation to be $30,000. File taxes free online Your adjusted basis in the stock of the corporation is $50,000. File taxes free online You use one half of your apartment solely for business purposes. File taxes free online Your depreciation deduction for the stock for the year cannot be more than $25,000 (½ of $50,000). File taxes free online Change to business use. File taxes free online   If you change your cooperative apartment to business use, figure your allowable depreciation as explained earlier. File taxes free online The basis of all the depreciable real property owned by the cooperative housing corporation is the smaller of the following amounts. File taxes free online The fair market value of the property on the date you change your apartment to business use. File taxes free online This is considered to be the same as the corporation's adjusted basis minus straight line depreciation, unless this value is unrealistic. File taxes free online The corporation's adjusted basis in the property on that date. File taxes free online Do not subtract depreciation when figuring the corporation's adjusted basis. File taxes free online   If you bought the stock after its first offering, the corporation's adjusted basis in the property is the amount figured in (1), above. File taxes free online The fair market value of the property is considered to be the same as the corporation's adjusted basis figured in this way minus straight line depreciation, unless the value is unrealistic. File taxes free online   For a discussion of fair market value and adjusted basis, see Publication 551. File taxes free online Property Used in Your Business or Income-Producing Activity To claim depreciation on property, you must use it in your business or income-producing activity. File taxes free online If you use property to produce income (investment use), the income must be taxable. File taxes free online You cannot depreciate property that you use solely for personal activities. File taxes free online Partial business or investment use. File taxes free online   If you use property for business or investment purposes and for personal purposes, you can deduct depreciation based only on the business or investment use. File taxes free online For example, you cannot deduct depreciation on a car used only for commuting, personal shopping trips, family vacations, driving children to and from school, or similar activities. File taxes free online    You must keep records showing the business, investment, and personal use of your property. File taxes free online For more information on the records you must keep for listed property, such as a car, see What Records Must Be Kept in chapter 5. File taxes free online    Although you can combine business and investment use of property when figuring depreciation deductions, do not treat investment use as qualified business use when determining whether the business-use requirement for listed property is met. File taxes free online For information about qualified business use of listed property, see What Is the Business-Use Requirement in chapter 5. File taxes free online Office in the home. File taxes free online   If you use part of your home as an office, you may be able to deduct depreciation on that part based on its business use. File taxes free online For information about depreciating your home office, see Publication 587. File taxes free online Inventory. File taxes free online   You cannot depreciate inventory because it is not held for use in your business. File taxes free online Inventory is any property you hold primarily for sale to customers in the ordinary course of your business. File taxes free online   If you are a rent-to-own dealer, you may be able to treat certain property held in your business as depreciable property rather than as inventory. File taxes free online See Rent-to-own dealer under Which Property Class Applies Under GDS in chapter 4. File taxes free online   In some cases, it is not clear whether property is held for sale (inventory) or for use in your business. File taxes free online If it is unclear, examine carefully all the facts in the operation of the particular business. File taxes free online The following example shows how a careful examination of the facts in two similar situations results in different conclusions. File taxes free online Example. File taxes free online Maple Corporation is in the business of leasing cars. File taxes free online At the end of their useful lives, when the cars are no longer profitable to lease, Maple sells them. File taxes free online Maple does not have a showroom, used car lot, or individuals to sell the cars. File taxes free online Instead, it sells them through wholesalers or by similar arrangements in which a dealer's profit is not intended or considered. File taxes free online Maple can depreciate the leased cars because the cars are not held primarily for sale to customers in the ordinary course of business, but are leased. File taxes free online If Maple buys cars at wholesale prices, leases them for a short time, and then sells them at retail prices or in sales in which a dealer's profit is intended, the cars are treated as inventory and are not depreciable property. File taxes free online In this situation, the cars are held primarily for sale to customers in the ordinary course of business. File taxes free online Containers. File taxes free online   Generally, containers for the products you sell are part of inventory and you cannot depreciate them. File taxes free online However, you can depreciate containers used to ship your products if they have a life longer than one year and meet the following requirements. File taxes free online They qualify as property used in your business. File taxes free online Title to the containers does not pass to the buyer. File taxes free online   To determine if these requirements are met, consider the following questions. File taxes free online Does your sales contract, sales invoice, or other type of order acknowledgment indicate whether you have retained title? Does your invoice treat the containers as separate items? Do any of your records state your basis in the containers? Property Having a Determinable Useful Life To be depreciable, your property must have a determinable useful life. File taxes free online This means that it must be something that wears out, decays, gets used up, becomes obsolete, or loses its value from natural causes. File taxes free online Property Lasting More Than One Year To be depreciable, property must have a useful life that extends substantially beyond the year you place it in service. File taxes free online Example. File taxes free online You maintain a library for use in your profession. File taxes free online You can depreciate it. File taxes free online However, if you buy technical books, journals, or information services for use in your business that have a useful life of one year or less, you cannot depreciate them. File taxes free online Instead, you deduct their cost as a business expense. File taxes free online What Property Cannot Be Depreciated? Certain property cannot be depreciated. File taxes free online This includes land and certain excepted property. File taxes free online Land You cannot depreciate the cost of land because land does not wear out, become obsolete, or get used up. File taxes free online The cost of land generally includes the cost of clearing, grading, planting, and landscaping. File taxes free online Although you cannot depreciate land, you can depreciate certain land preparation costs, such as landscaping costs, incurred in preparing land for business use. File taxes free online These costs must be so closely associated with other depreciable property that you can determine a life for them along with the life of the associated property. File taxes free online Example. File taxes free online You constructed a new building for use in your business and paid for grading, clearing, seeding, and planting bushes and trees. File taxes free online Some of the bushes and trees were planted right next to the building, while others were planted around the outer border of the lot. File taxes free online If you replace the building, you would have to destroy the bushes and trees right next to it. File taxes free online These bushes and trees are closely associated with the building, so they have a determinable useful life. File taxes free online Therefore, you can depreciate them. File taxes free online Add your other land preparation costs to the basis of your land because they have no determinable life and you cannot depreciate them. File taxes free online Excepted Property Even if the requirements explained in the preceding discussions are met, you cannot depreciate the following property. File taxes free online Property placed in service and disposed of in the same year. File taxes free online Determining when property is placed in service is explained later. File taxes free online Equipment used to build capital improvements. File taxes free online You must add otherwise allowable depreciation on the equipment during the period of construction to the basis of your improvements. File taxes free online See Uniform Capitalization Rules in Publication 551. File taxes free online Section 197 intangibles. File taxes free online You must amortize these costs. File taxes free online Section 197 intangibles are discussed in detail in Chapter 8 of Publication 535. File taxes free online Intangible property, such as certain computer software, that is not section 197 intangible property, can be depreciated if it meets certain requirements. File taxes free online See Intangible Property , later. File taxes free online Certain term interests. File taxes free online Certain term interests in property. File taxes free online   You cannot depreciate a term interest in property created or acquired after July 27, 1989, for any period during which the remainder interest is held, directly or indirectly, by a person related to you. File taxes free online A term interest in property means a life interest in property, an interest in property for a term of years, or an income interest in a trust. File taxes free online Related persons. File taxes free online   For a description of related persons, see Related Persons, later. File taxes free online For this purpose, however, treat as related persons only the relationships listed in items (1) through (10) of that discussion and substitute “50%” for “10%” each place it appears. File taxes free online Basis adjustments. File taxes free online   If you would be allowed a depreciation deduction for a term interest in property except that the holder of the remainder interest is related to you, you generally must reduce your basis in the term interest by any depreciation or amortization not allowed. File taxes free online   If you hold the remainder interest, you generally must increase your basis in that interest by the depreciation not allowed to the term interest holder. File taxes free online However, do not increase your basis for depreciation not allowed for periods during which either of the following situations applies. File taxes free online The term interest is held by an organization exempt from tax. File taxes free online The term interest is held by a nonresident alien individual or foreign corporation, and the income from the term interest is not effectively connected with the conduct of a trade or business in the United States. File taxes free online Exceptions. File taxes free online   The above rules do not apply to the holder of a term interest in property acquired by gift, bequest, or inheritance. File taxes free online They also do not apply to the holder of dividend rights that were separated from any stripped preferred stock if the rights were purchased after April 30, 1993, or to a person whose basis in the stock is determined by reference to the basis in the hands of the purchaser. File taxes free online When Does Depreciation Begin and End? You begin to depreciate your property when you place it in service for use in your trade or business or for the production of income. File taxes free online You stop depreciating property either when you have fully recovered your cost or other basis or when you retire it from service, whichever happens first. File taxes free online Placed in Service You place property in service when it is ready and available for a specific use, whether in a business activity, an income-producing activity, a tax-exempt activity, or a personal activity. File taxes free online Even if you are not using the property, it is in service when it is ready and available for its specific use. File taxes free online Example 1. File taxes free online Donald Steep bought a machine for his business. File taxes free online The machine was delivered last year. File taxes free online However, it was not installed and operational until this year. File taxes free online It is considered placed in service this year. File taxes free online If the machine had been ready and available for use when it was delivered, it would be considered placed in service last year even if it was not actually used until this year. File taxes free online Example 2. File taxes free online On April 6, Sue Thorn bought a house to use as residential rental property. File taxes free online She made several repairs and had it ready for rent on July 5. File taxes free online At that time, she began to advertise it for rent in the local newspaper. File taxes free online The house is considered placed in service in July when it was ready and available for rent. File taxes free online She can begin to depreciate it in July. File taxes free online Example 3. File taxes free online James Elm is a building contractor who specializes in constructing office buildings. File taxes free online He bought a truck last year that had to be modified to lift materials to second-story levels. File taxes free online The installation of the lifting equipment was completed and James accepted delivery of the modified truck on January 10 of this year. File taxes free online The truck was placed in service on January 10, the date it was ready and available to perform the function for which it was bought. File taxes free online Conversion to business use. File taxes free online   If you place property in service in a personal activity, you cannot claim depreciation. File taxes free online However, if you change the property's use to use in a business or income-producing activity, then you can begin to depreciate it at the time of the change. File taxes free online You place the property in service in the business or income-producing activity on the date of the change. File taxes free online Example. File taxes free online You bought a home and used it as your personal home several years before you converted it to rental property. File taxes free online Although its specific use was personal and no depreciation was allowable, you placed the home in service when you began using it as your home. File taxes free online You can begin to claim depreciation in the year you converted it to rental property because its use changed to an income-producing use at that time. File taxes free online Idle Property Continue to claim a deduction for depreciation on property used in your business or for the production of income even if it is temporarily idle (not in use). File taxes free online For example, if you stop using a machine because there is a temporary lack of a market for a product made with that machine, continue to deduct depreciation on the machine. File taxes free online Cost or Other Basis Fully Recovered You stop depreciating property when you have fully recovered your cost or other basis. File taxes free online You recover your basis when your section 179 and allowed or allowable depreciation deductions equal your cost or investment in the property. File taxes free online See What Is the Basis of Your Depreciable Property , later. File taxes free online Retired From Service You stop depreciating property when you retire it from service, even if you have not fully recovered its cost or other basis. File taxes free online You retire property from service when you permanently withdraw it from use in a trade or business or from use in the production of income because of any of the following events. File taxes free online You sell or exchange the property. File taxes free online You convert the property to personal use. File taxes free online You abandon the property. File taxes free online You transfer the property to a supplies or scrap account. File taxes free online The property is destroyed. File taxes free online If you included the property in a general asset account, see How Do You Use General Asset Accounts in chapter 4 for the rules that apply when you dispose of that property. File taxes free online What Method Can You Use To Depreciate Your Property? You must use the Modified Accelerated Cost Recovery System (MACRS) to depreciate most property. File taxes free online MACRS is discussed in chapter 4. File taxes free online You cannot use MACRS to depreciate the following property. File taxes free online Property you placed in service before 1987. File taxes free online Certain property owned or used in 1986. File taxes free online Intangible property. File taxes free online Films, video tapes, and recordings. File taxes free online Certain corporate or partnership property acquired in a nontaxable transfer. File taxes free online Property you elected to exclude from MACRS. File taxes free online The following discussions describe the property listed above and explain what depreciation method should be used. File taxes free online Property You Placed in Service Before 1987 You cannot use MACRS for property you placed in service before 1987 (except property you placed in service after July 31, 1986, if MACRS was elected). File taxes free online Property placed in service before 1987 must be depreciated under the methods discussed in Publication 534. File taxes free online For a discussion of when property is placed in service, see When Does Depreciation Begin and End , earlier. File taxes free online Use of real property changed. File taxes free online   You generally must use MACRS to depreciate real property that you acquired for personal use before 1987 and changed to business or income-producing use after 1986. File taxes free online Improvements made after 1986. File taxes free online   You must treat an improvement made after 1986 to property you placed in service before 1987 as separate depreciable property. File taxes free online Therefore, you can depreciate that improvement as separate property under MACRS if it is the type of property that otherwise qualifies for MACRS depreciation. File taxes free online For more information about improvements, see How Do You Treat Repairs and Improvements , later and Additions and Improvements under Which Recovery Period Applies in chapter 4. File taxes free online Property Owned or Used in 1986 You may not be able to use MACRS for property you acquired and placed in service after 1986 if any of the situations described below apply. File taxes free online If you cannot use MACRS, the property must be depreciated under the methods discussed in Publication 534. File taxes free online For the following discussions, do not treat property as owned before you placed it in service. File taxes free online If you owned property in 1986 but did not place it in service until 1987, you do not treat it as owned in 1986. File taxes free online Personal property. File taxes free online   You cannot use MACRS for personal property (section 1245 property) in any of the following situations. File taxes free online You or someone related to you owned or used the property in 1986. File taxes free online You acquired the property from a person who owned it in 1986 and as part of the transaction the user of the property did not change. File taxes free online You lease the property to a person (or someone related to this person) who owned or used the property in 1986. File taxes free online You acquired the property in a transaction in which: The user of the property did not change, and The property was not MACRS property in the hands of the person from whom you acquired it because of (2) or (3) above. File taxes free online Real property. File taxes free online   You generally cannot use MACRS for real property (section 1250 property) in any of the following situations. File taxes free online You or someone related to you owned the property in 1986. File taxes free online You lease the property to a person who owned the property in 1986 (or someone related to that person). File taxes free online You acquired the property in a like-kind exchange, involuntary conversion, or repossession of property you or someone related to you owned in 1986. File taxes free online MACRS applies only to that part of your basis in the acquired property that represents cash paid or unlike property given up. File taxes free online It does not apply to the carried-over part of the basis. File taxes free online Exceptions. File taxes free online   The rules above do not apply to the following. File taxes free online Residential rental property or nonresidential real property. File taxes free online Any property if, in the first tax year it is placed in service, the deduction under the Accelerated Cost Recovery System (ACRS) is more than the deduction under MACRS using the half-year convention. File taxes free online For information on how to figure depreciation under ACRS, see Publication 534. File taxes free online Property that was MACRS property in the hands of the person from whom you acquired it because of (2) above. File taxes free online Related persons. File taxes free online   For this purpose, the following are related persons. File taxes free online An individual and a member of his or her family, including only a spouse, child, parent, brother, sister, half-brother, half-sister, ancestor, and lineal descendant. File taxes free online A corporation and an individual who directly or indirectly owns more than 10% of the value of the outstanding stock of that corporation. File taxes free online Two corporations that are members of the same controlled group. File taxes free online A trust fiduciary and a corporation if more than 10% of the value of the outstanding stock is directly or indirectly owned by or for the trust or grantor of the trust. File taxes free online The grantor and fiduciary, and the fiduciary and beneficiary, of any trust. File taxes free online The fiduciaries of two different trusts, and the fiduciaries and beneficiaries of two different trusts, if the same person is the grantor of both trusts. File taxes free online A tax-exempt educational or charitable organization and any person (or, if that person is an individual, a member of that person's family) who directly or indirectly controls the organization. File taxes free online Two S corporations, and an S corporation and a regular corporation, if the same persons own more than 10% of the value of the outstanding stock of each corporation. File taxes free online A corporation and a partnership if the same persons own both of the following. File taxes free online More than 10% of the value of the outstanding stock of the corporation. File taxes free online More than 10% of the capital or profits interest in the partnership. File taxes free online The executor and beneficiary of any estate. File taxes free online A partnership and a person who directly or indirectly owns more than 10% of the capital or profits interest in the partnership. File taxes free online Two partnerships, if the same persons directly or indirectly own more than 10% of the capital or profits interest in each. File taxes free online The related person and a person who is engaged in trades or businesses under common control. File taxes free online See section 52(a) and 52(b) of the Internal Revenue Code. File taxes free online When to determine relationship. File taxes free online   You must determine whether you are related to another person at the time you acquire the property. File taxes free online   A partnership acquiring property from a terminating partnership must determine whether it is related to the terminating partnership immediately before the event causing the termination. File taxes free online For this rule, a terminating partnership is one that sells or exchanges, within 12 months, 50% or more of its total interest in partnership capital or profits. File taxes free online Constructive ownership of stock or partnership interest. File taxes free online   To determine whether a person directly or indirectly owns any of the outstanding stock of a corporation or an interest in a partnership, apply the following rules. File taxes free online Stock or a partnership interest directly or indirectly owned by or for a corporation, partnership, estate, or trust is considered owned proportionately by or for its shareholders, partners, or beneficiaries. File taxes free online However, for a partnership interest owned by or for a C corporation, this applies only to shareholders who directly or indirectly own 5% or more of the value of the stock of the corporation. File taxes free online An individual is considered to own the stock or partnership interest directly or indirectly owned by or for the individual's family. File taxes free online An individual who owns, except by applying rule (2), any stock in a corporation is considered to own the stock directly or indirectly owned by or for the individual's partner. File taxes free online For purposes of rules (1), (2), or (3), stock or a partnership interest considered to be owned by a person under rule (1) is treated as actually owned by that person. File taxes free online However, stock or a partnership interest considered to be owned by an individual under rule (2) or (3) is not treated as owned by that individual for reapplying either rule (2) or (3) to make another person considered to be the owner of the same stock or partnership interest. File taxes free online Intangible Property Generally, if you can depreciate intangible property, you usually use the straight line method of depreciation. File taxes free online However, you can choose to depreciate certain intangible property under the income forecast method (discussed later). File taxes free online You cannot depreciate intangible property that is a section 197 intangible or that otherwise does not meet all the requirements discussed earlier under What Property Can Be Depreciated. File taxes free online Straight Line Method This method lets you deduct the same amount of depreciation each year over the useful life of the property. File taxes free online To figure your deduction, first determine the adjusted basis, salvage value, and estimated useful life of your property. File taxes free online Subtract the salvage value, if any, from the adjusted basis. File taxes free online The balance is the total depreciation you can take over the useful life of the property. File taxes free online Divide the balance by the number of years in the useful life. File taxes free online This gives you your yearly depreciation deduction. File taxes free online Unless there is a big change in adjusted basis or useful life, this amount will stay the same throughout the time you depreciate the property. File taxes free online If, in the first year, you use the property for less than a full year, you must prorate your depreciation deduction for the number of months in use. File taxes free online Example. File taxes free online In April, Frank bought a patent for $5,100 that is not a section 197 intangible. File taxes free online He depreciates the patent under the straight line method, using a 17-year useful life and no salvage value. File taxes free online He divides the $5,100 basis by 17 years to get his $300 yearly depreciation deduction. File taxes free online He only used the patent for 9 months during the first year, so he multiplies $300 by 9/12 to get his deduction of $225 for the first year. File taxes free online Next year, Frank can deduct $300 for the full year. File taxes free online Patents and copyrights. File taxes free online   If you can depreciate the cost of a patent or copyright, use the straight line method over the useful life. File taxes free online The useful life of a patent or copyright is the lesser of the life granted to it by the government or the remaining life when you acquire it. File taxes free online However, if the patent or copyright becomes valueless before the end of its useful life, you can deduct in that year any of its remaining cost or other basis. File taxes free online Computer software. File taxes free online   Computer software is generally a section 197 intangible and cannot be depreciated if you acquired it in connection with the acquisition of assets constituting a business or a substantial part of a business. File taxes free online   However, computer software is not a section 197 intangible and can be depreciated, even if acquired in connection with the acquisition of a business, if it meets all of the following tests. File taxes free online It is readily available for purchase by the general public. File taxes free online It is subject to a nonexclusive license. File taxes free online It has not been substantially modified. File taxes free online   If the software meets the tests above, it may also qualify for the section 179 deduction and the special depreciation allowance, discussed later. File taxes free online If you can depreciate the cost of computer software, use the straight line method over a useful life of 36 months. File taxes free online    Tax-exempt use property subject to a lease. File taxes free online   The useful life of computer software leased under a lease agreement entered into after March 12, 2004, to a tax-exempt organization, governmental unit, or foreign person or entity (other than a partnership), cannot be less than 125% of the lease term. File taxes free online Certain created intangibles. File taxes free online   You can amortize certain intangibles created on or after December 31, 2003, over a 15-year period using the straight line method and no salvage value, even though they have a useful life that cannot be estimated with reasonable accuracy. File taxes free online For example, amounts paid to acquire memberships or privileges of indefinite duration, such as a trade association membership, are eligible costs. File taxes free online   The following are not eligible. File taxes free online Any intangible asset acquired from another person. File taxes free online Created financial interests. File taxes free online Any intangible asset that has a useful life that can be estimated with reasonable accuracy. File taxes free online Any intangible asset that has an amortization period or limited useful life that is specifically prescribed or prohibited by the Code, regulations, or other published IRS guidance. File taxes free online Any amount paid to facilitate an acquisition of a trade or business, a change in the capital structure of a business entity, and certain other transactions. File taxes free online   You must also increase the 15-year safe harbor amortization period to a 25-year period for certain intangibles related to benefits arising from the provision, production, or improvement of real property. File taxes free online For this purpose, real property includes property that will remain attached to the real property for an indefinite period of time, such as roads, bridges, tunnels, pavements, and pollution control facilities. File taxes free online Income Forecast Method You can choose to use the income forecast method instead of the straight line method to depreciate the following depreciable intangibles. File taxes free online Motion picture films or video tapes. File taxes free online Sound recordings. File taxes free online Copyrights. File taxes free online Books. File taxes free online Patents. File taxes free online Under the income forecast method, each year's depreciation deduction is equal to the cost of the property, multiplied by a fraction. File taxes free online The numerator of the fraction is the current year's net income from the property, and the denominator is the total income anticipated from the property through the end of the 10th taxable year following the taxable year the property is placed in service. File taxes free online For more information, see section 167(g) of the Internal Revenue Code. File taxes free online Films, video tapes, and recordings. File taxes free online   You cannot use MACRS for motion picture films, video tapes, and sound recordings. File taxes free online For this purpose, sound recordings are discs, tapes, or other phonorecordings resulting from the fixation of a series of sounds. File taxes free online You can depreciate this property using either the straight line method or the income forecast method. File taxes free online Participations and residuals. File taxes free online   You can include participations and residuals in the adjusted basis of the property for purposes of computing your depreciation deduction under the income forecast method. File taxes free online The participations and residuals must relate to income to be derived from the property before the end of the 10th taxable year after the property is placed in service. File taxes free online For this purpose, participations and residuals are defined as costs which by contract vary with the amount of income earned in connection with the property. File taxes free online   Instead of including these amounts in the adjusted basis of the property, you can deduct the costs in the taxable year that they are paid. File taxes free online Videocassettes. File taxes free online   If you are in the business of renting videocassettes, you can depreciate only those videocassettes bought for rental. File taxes free online If the videocassette has a useful life of one year or less, you can currently deduct the cost as a business expense. File taxes free online Corporate or Partnership Property Acquired in a Nontaxable Transfer MACRS does not apply to property used before 1987 and transferred after 1986 to a corporation or partnership (except property the transferor placed in service after July 31, 1986, if MACRS was elected) to the extent its basis is carried over from the property's adjusted basis in the transferor's hands. File taxes free online You must continue to use the same depreciation method as the transferor and figure depreciation as if the transfer had not occurred. File taxes free online However, if MACRS would otherwise apply, you can use it to depreciate the part of the property's basis that exceeds the carried-over basis. File taxes free online The nontaxable transfers covered by this rule include the following. File taxes free online A distribution in complete liquidation of a subsidiary. File taxes free online A transfer to a corporation controlled by the transferor. File taxes free online An exchange of property solely for corporate stock or securities in a reorganization. File taxes free online A contribution of property to a partnership in exchange for a partnership interest. File taxes free online A partnership distribution of property to a partner. File taxes free online Election To Exclude Property From MACRS If you can properly depreciate any property under a method not based on a term of years, such as the unit-of-production method, you can elect to exclude that property from MACRS. File taxes free online You make the election by reporting your depreciation for the property on line 15 in Part II of Form 4562 and attaching a statement as described in the instructions for Form 4562. File taxes free online You must make this election by the return due date (including extensions) for the tax year you place your property in service. File taxes free online However, if you timely filed your return for the year without making the election, you can still make the election by filing an amended return within six months of the due date of the return (excluding extensions). File taxes free online Attach the election to the amended return and write “Filed pursuant to section 301. File taxes free online 9100-2” on the election statement. File taxes free online File the amended return at the same address you filed the original return. File taxes free online Use of standard mileage rate. File taxes free online   If you use the standard mileage rate to figure your tax deduction for your business automobile, you are treated as having made an election to exclude the automobile from MACRS. File taxes free online See Publication 463 for a discussion of the standard mileage rate. File taxes free online What Is the Basis of Your Depreciable Property? To figure your depreciation deduction, you must determine the basis of your property. File taxes free online To determine basis, you need to know the cost or other basis of your property. File taxes free online Cost as Basis The basis of property you buy is its cost plus amounts you paid for items such as sales tax (see Exception , below), freight charges, and installation and testing fees. File taxes free online The cost includes the amount you pay in cash, debt obligations, other property, or services. File taxes free online Exception. File taxes free online   You can elect to deduct state and local general sales taxes instead of state and local income taxes as an itemized deduction on Schedule A (Form 1040). File taxes free online If you make that choice, you cannot include those sales taxes as part of your cost basis. File taxes free online Assumed debt. File taxes free online   If you buy property and assume (or buy subject to) an existing mortgage or other debt on the property, your basis includes the amount you pay for the property plus the amount of the assumed debt. File taxes free online Example. File taxes free online You make a $20,000 down payment on property and assume the seller's mortgage of $120,000. File taxes free online Your total cost is $140,000, the cash you paid plus the mortgage you assumed. File taxes free online Settlement costs. File taxes free online   The basis of real property also includes certain fees and charges you pay in addition to the purchase price. File taxes free online These generally are shown on your settlement statement and include the following. File taxes free online Legal and recording fees. File taxes free online Abstract fees. File taxes free online Survey charges. File taxes free online Owner's title insurance. File taxes free online Amounts the seller owes that you agree to pay, such as back taxes or interest, recording or mortgage fees, charges for improvements or repairs, and sales commissions. File taxes free online   For fees and charges you cannot include in the basis of property, see Real Property in Publication 551. File taxes free online Property you construct or build. File taxes free online   If you construct, build, or otherwise produce property for use in your business, you may have to use the uniform capitalization rules to determine the basis of your property. File taxes free online For information about the uniform capitalization rules, see Publication 551 and the regulations under section 263A of the Internal Revenue Code. File taxes free online Other Basis Other basis usually refers to basis that is determined by the way you received the property. File taxes free online For example, your basis is other than cost if you acquired the property in exchange for other property, as payment for services you performed, as a gift, or as an inheritance. File taxes free online If you acquired property in this or some other way, see Publication 551 to determine your basis. File taxes free online Property changed from personal use. File taxes free online   If you held property for personal use and later use it in your business or income-producing activity, your depreciable basis is the lesser of the following. File taxes free online The fair market value (FMV) of the property on the date of the change in use. File taxes free online Your original cost or other basis adjusted as follows. File taxes free online Increased by the cost of any permanent improvements or additions and other costs that must be added to basis. File taxes free online Decreased by any deductions you claimed for casualty and theft losses and other items that reduced your basis. File taxes free online Example. File taxes free online Several years ago, Nia paid $160,000 to have her home built on a lot that cost her $25,000. File taxes free online Before changing the property to rental use last year, she paid $20,000 for permanent improvements to the house and claimed a $2,000 casualty loss deduction for damage to the house. File taxes free online Land is not depreciable, so she includes only the cost of the house when figuring the basis for depreciation. File taxes free online Nia's adjusted basis in the house when she changed its use was $178,000 ($160,000 + $20,000 − $2,000). File taxes free online On the same date, her property had an FMV of $180,000, of which $15,000 was for the land and $165,000 was for the house. File taxes free online The basis for depreciation on the house is the FMV on the date of change ($165,000), because it is less than her adjusted basis ($178,000). File taxes free online Property acquired in a nontaxable transaction. File taxes free online   Generally, if you receive property in a nontaxable exchange, the basis of the property you receive is the same as the adjusted basis of the property you gave up. File taxes free online Special rules apply in determining the basis and figuring the MACRS depreciation deduction and special depreciation allowance for property acquired in a like-kind exchange or involuntary conversion. File taxes free online See Like-kind exchanges and involuntary conversions. File taxes free online under How Much Can You Deduct? in chapter 3 and Figuring the Deduction for Property Acquired in a Nontaxable Exchange in chapter 4. File taxes free online   There are also special rules for determining the basis of MACRS property involved in a like-kind exchange or involuntary conversion when the property is contained in a general asset account. File taxes free online See How Do You Use General Asset Accounts in chapter 4. File taxes free online Adjusted Basis To find your property's basis for depreciation, you may have to make certain adjustments (increases and decreases) to the basis of the property for events occurring between the time you acquired the property and the time you placed it in service. File taxes free online These events could include the following. File taxes free online Installing utility lines. File taxes free online Paying legal fees for perfecting the title. File taxes free online Settling zoning issues. File taxes free online Receiving rebates. File taxes free online Incurring a casualty or theft loss. File taxes free online For a discussion of adjustments to the basis of your property, see Adjusted Basis in Publication 551. File taxes free online If you depreciate your property under MACRS, you also may have to reduce your basis by certain deductions and credits with respect to the property. File taxes free online For more information, see What Is the Basis for Depreciation in chapter 4. File taxes free online . File taxes free online Basis adjustment for depreciation allowed or allowable. File taxes free online   You must reduce the basis of property by the depreciation allowed or allowable, whichever is greater. File taxes free online Depreciation allowed is depreciation you actually deducted (from which you received a tax benefit). File taxes free online Depreciation allowable is depreciation you are entitled to deduct. File taxes free online   If you do not claim depreciation you are entitled to deduct, you must still reduce the basis of the property by the full amount of depreciation allowable. File taxes free online   If you deduct more depreciation than you should, you must reduce your basis by any amount deducted from which you received a tax benefit (the depreciation allowed). File taxes free online How Do You Treat Repairs and Improvements? If you improve depreciable property, you must treat the improvement as separate depreciable property. File taxes free online Improvement means an addition to or partial replacement of property that adds to its value, appreciably lengthens the time you can use it, or adapts it to a different use. File taxes free online You generally deduct the cost of repairing business property in the same way as any other business expense. File taxes free online However, if a repair or replacement increases the value of your property, makes it more useful, or lengthens its life, you must treat it as an improvement and depreciate it. File taxes free online Example. File taxes free online You repair a small section on one corner of the roof of a rental house. File taxes free online You deduct the cost of the repair as a rental expense. File taxes free online However, if you completely replace the roof, the new roof is an improvement because it increases the value and lengthens the life of the property. File taxes free online You depreciate the cost of the new roof. File taxes free online Improvements to rented property. File taxes free online   You can depreciate permanent improvements you make to business property you rent from someone else. File taxes free online Do You Have To File Form 4562? Use Form 4562 to figure your deduction for depreciation and amortization. File taxes free online Attach Form 4562 to your tax return for the current tax year if you are claiming any of the following items. File taxes free online A section 179 deduction for the current year or a section 179 carryover from a prior year. File taxes free online See chapter 2 for information on the section 179 deduction. File taxes free online Depreciation for property placed in service during the current year. File taxes free online Depreciation on any vehicle or other listed property, regardless of when it was placed in service. File taxes free online See chapter 5 for information on listed property. File taxes free online A deduction for any vehicle if the deduction is reported on a form other than Schedule C (Form 1040) or Schedule C-EZ (Form 1040). File taxes free online Amortization of costs if the current year is the first year of the amortization period. File taxes free online Depreciation or amortization on any asset on a corporate income tax return (other than Form 1120S, U. File taxes free online S. File taxes free online Income Tax Return for an S Corporation) regardless of when it was placed in service. File taxes free online You must submit a separate Form 4562 for each business or activity on your return for which a Form 4562 is required. File taxes free online Table 1-1 presents an overview of the purpose of the various parts of Form 4562. File taxes free online Employee. File taxes free online   Do not use Form 4562 if you are an employee and you deduct job-related vehicle expenses using either actual expenses (including depreciation) or the standard mileage rate. File taxes free online Instead, use either Form 2106 or Form 2106-EZ. File taxes free online Use Form 2106-EZ if you are claiming the standard mileage rate and you are not reimbursed by your employer for any expenses. File taxes free online How Do You Correct Depreciation Deductions? If you deducted an incorrect amount of depreciation in any year, you may be able to make a correction by filing an amended return for that year. File taxes free online See Filing an Amended Return , next. File taxes free online If you are not allowed to make the correction on an amended return, you may be able to change your accounting method to claim the correct amount of depreciation. File taxes free online See Changing Your Accounting Method , later. File taxes free online Filing an Amended Return You can file an amended return to correct the amount of depreciation claimed for any property in any of the following situations. File taxes free online You claimed the incorrect amount because of a mathematical error made in any year. File taxes free online You claimed the incorrect amount because of a posting error made in any year. File taxes free online You have not adopted a method of accounting for property placed in service by you in tax years ending after December 29, 2003. File taxes free online You claimed the incorrect amount on property placed in service by you in tax years ending before December 30, 2003. File taxes free online Adoption of accounting method defined. File taxes free online   Generally, you adopt a method of accounting for depreciation by using a permissible method of determining depreciation when you file your first tax return, or by using the same impermissible method of determining depreciation in two or more consecutively filed tax returns. File taxes free online   For an exception to this 2-year rule, see Revenue Procedure 2011-14 on page 330 of the Internal Revenue Bulletin 2011-4, available at www. File taxes free online irs. File taxes free online gov/pub/irs-irbs/irb11-04. File taxes free online pdf. File taxes free online (Note. File taxes free online Revenue Procedure 2011-14 is clarified and modified by Revenue Procedure 2012-20. File taxes free online For more information, see Revenue Procedure 2012-20 on page 700 of the Internal Revenue Bulletin 2012-14, available at www. File taxes free online irs. File taxes free online gov/pub/irs-irbs/irb12-14. File taxes free online pdf. File taxes free online )   For a safe harbor method of accounting to treat rotable spare parts as depreciable assets and procedures to obtain automatic consent to change to the safe harbor method of accounting, see Revenue Procedure 2007-48 on page 110 of Internal Revenue Bulletin 2007-29, available at www. File taxes free online irs. File taxes free online gov/pub/irs-irbs/irb07-29. File taxes free online pdf. File taxes free online When to file. File taxes free online   If an amended return is allowed, you must file it by the later of the following. File taxes free online 3 years from the date you filed your original return for the year in which you did not deduct the correct amount. File taxes free online A return filed before an unextended due date is considered filed on that due date. File taxes free online 2 years from the time you paid your tax for that year. File taxes free online Changing Your Accounting Method Generally, you must get IRS approval to change your method of accounting. File taxes free online You generally must file Form 3115, Application for Change in Accounting Method, to request a change in your method of accounting for depreciation. File taxes free online The following are examples of a change in method of accounting for depreciation. File taxes free online A change from an impermissible method of determining depreciation for depreciable property, if the impermissible method was used in two or more consecutively filed tax returns. File taxes free online A change in the treatment of an asset from nondepreciable to depreciable or vice versa. File taxes free online A change in the depreciation method, period of recovery, or convention of a depreciable asset. File taxes free online A change from not claiming to claiming the special depreciation allowance if you did not make the election to not claim any special allowance. File taxes free online A change from claiming a 50% special depreciation allowance to claiming a 30% special depreciation allowance for qualified property (including property that is included in a class of property for which you elected a 30% special allowance instead of a 50% special allowance). File taxes free online Changes in depreciation that are not a change in method of accounting (and may only be made on an amended return) include the following. File taxes free online An adjustment in the useful life of a depreciable asset for which depreciation is determined under section 167. File taxes free online A change in use of an asset in the hands of the same taxpayer. File taxes free online Making a late depreciation election or revoking a timely valid depreciation election (including the election not to deduct the special depreciation allowance). File taxes free online If you elected not to claim any special allowance, a change from not claiming to claiming the special allowance is a revocation of the election and is not an accounting method change. File taxes free online Generally, you must get IRS approval to make a late depreciation election or revoke a depreciation election. File taxes free online You must submit a request for a letter ruling to make a late election or revoke an election. File taxes free online Any change in the placed in service date of a depreciable asset. File taxes free online See section 1. File taxes free online 446-1(e)(2)(ii)(d) of the regulations for more information and examples. File taxes free online IRS approval. File taxes free online   In some instances, you may be able to get approval from the IRS to change your method of accounting for depreciation under the automatic change request procedures generally covered in Revenue Procedure 2011-14. File taxes free online If you do not qualify to use the automatic procedures to get approval, you must use the advance consent request procedures generally covered in Revenue Procedure 97-27, 1997-1 C. File taxes free online B. File taxes free online 680. File taxes free online Also see the Instructions for Form 3115 for more information on getting approval, including lists of scope limitations and automatic accounting method changes. File taxes free online Additional guidance. File taxes free online    For additional guidance and special procedures for changing your accounting method, automatic change procedures, amending your return, and filing Form 3115, see Revenue Procedure 2011-14 on page 330 of the Internal Revenue Bulletin 2011-4, available at www. File taxes free online irs. File taxes free online gov/pub/irs-irbs/irb11-04. File taxes free online pdf. File taxes free online (Note. File taxes free online Revenue Procedure 2011-14 is clarified and modified by Revenue Procedure 2012-20. File taxes free online For more information, see Revenue Procedure 2012-20 on page 700 of the Internal Revenue Bulletin 2012-14, available at www. File taxes free online irs. File taxes free online gov/pub/irs-irbs/irb12-14. File taxes free online pdf. File taxes free online )   For a safe harbor method of accounting to treat rotable spare parts as depreciable assets, see Revenue Procedure 2007-48 on page 110 of Internal Revenue Bulletin 2007-29, available at www. File taxes free online irs. File taxes free online gov/pub/irs-irbs/irb07-29. File taxes free online pdf. File taxes free online Table 1-1. File taxes free online Purpose of Form 4562 This table describes the purpose of the various parts of Form 4562. File taxes free online For more information, see Form 4562 and its instructions. File taxes free online Part Purpose I • Electing the section 179 deduction • Figuring the maximum section 179 deduction for the current year • Figuring any section 179 deduction carryover to the next year II • Reporting the special depreciation allowance for property (other than listed property) placed in service during the tax year • Reporting depreciation deductions on property being depreciated under any method other than Modified Accelerated Cost Recovery System (MACRS) III • Reporting MACRS depreciation deductions for property placed in service before this year • Reporting MACRS depreciation deductions for property (other than listed property) placed in service during the current year IV • Summarizing other parts V • Reporting the special depreciation allowance for automobiles and other listed property • Reporting MACRS depreciation on automobiles and other listed property • Reporting the section 179 cost elected for automobiles and other listed property • Reporting information on the use of automobiles and other transportation vehicles VI • Reporting amortization deductions Section 481(a) adjustment. File taxes free online   If you file Form 3115 and change from an impermissible method to a permissible method of accounting for depreciation, you can make a section 481(a) adjustment for any unclaimed or excess amount of allowable depreciation. File taxes free online The adjustment is the difference between the total depreciation actually deducted for the property and the total amount allowable prior to the year of change. File taxes free online If no depreciation was deducted, the adjustment is the total depreciation allowable prior to the year of change. File taxes free online A negative section 481(a) adjustment results in a decrease in taxable income. File taxes free online It is taken into account in the year of change and is reported on your business tax returns as “other expenses. File taxes free online ” A positive section 481(a) adjustment results in an increase in taxable income. File taxes free online It is generally taken into account over 4 tax years and is reported on your business tax returns as “other income. File taxes free online ” However, you can elect to use a one-year adjustment period and report the adjustment in the year of change if the total adjustment is less than $25,000. File taxes free online Make the election by completing the appropriate line on Form 3115. File taxes free online   If you file a Form 3115 and change from one permissible method to another permissible method, the section 481(a) adjustment is zero. File taxes free online Prev  Up  Next   Home   More Online Publications
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CREB 2007 Disclosure of Allocations
CREB 2007 Disclosure of Allocations

The Service Announces the Release of New Forms for Build America Bonds
The Tax Exempt Bonds function (TEB) of the IRS Tax Exempt and Government Entities division has released new Form 8038-CP, Return for Credit Payments to Issuers of Qualified Bonds, and its instructions.

New York Liberty Zone Bonds
Guidance concerning the New York Liberty Zone business employee credit, Qualified New York Liberty Bonds, and Liberty Advance Refunding Bonds.

TIGTA Finds That Direct Pay Bond Questionnaires Were Appropriate
TIGTA Report: Build America Bond Compliance Check Program.

IRS Names Seven New Members to ACT Panel; ACT to Submit Recommendations at June Meeting
IR-2012-57, May 24, 2012 — The Advisory Committee on Tax Exempt and Government Entities (ACT) will hold a public meeting on June 6, when the panel will submit its latest round of recommendations.

New TEB Publication for Conduit Issuers of Tax-Exempt Bonds
Pub. 5005, inspired by TE/GE Advisory Committee, provides overview of conduit issuer responsibilities.

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File taxes free online Index A Adjusted basis: Adoption tax benefits, Adoption Tax Benefits Assessment for local improvements, Assessments for Local Improvements Canceled debt, Canceled Debt Excluded From Income Casualty and theft losses, Casualties and Thefts Credit for qualified electric vehicles, Vehicle Credits Decreases to, Decreases to Basis Depreciation, Depreciation Easements, Easements Employer-provided child care, Employer-Provided Child Care Example, Adjustments to Basis Example Gain from sale of home, Postponed Gain From Sale of Home Gas-guzzler tax, Gas-Guzzler Tax Increases to, Increases to Basis Section 179 deduction, Section 179 Deduction Subsidies for energy conservation, Exclusion of Subsidies for Energy Conservation Measures Adoption tax benefits, Adoption Tax Benefits Allocating basis, Allocating the Basis Assistance (see Tax help) Assumption of mortgage, Assumption of mortgage. File taxes free online B Business acquired, Trade or Business Acquired Business assets, Business Assets Businesses exchanged, Exchange of business property. File taxes free online C Canceled debt, Canceled Debt Excluded From Income Casualty and theft losses, Casualties and Thefts Change to business use, Property Changed to Business or Rental Use Community property, Community Property Constructing assets, Constructing assets. File taxes free online Copyrights, Copyrights. File taxes free online Cost basis: Allocating basis, Allocating the Basis Assumption of mortgage, Assumption of mortgage. File taxes free online Capitalized costs, Activities subject to the rules. File taxes free online , Deducting vs. File taxes free online Capitalizing Costs Loans, low or no interest, Loans with low or no interest. File taxes free online Real estate taxes, Real estate taxes. File taxes free online Real property, Real Property Settlement costs (fees), Settlement costs. File taxes free online D Decreases to basis, Decreases to Basis Demolition of building, Demolition of building. File taxes free online Depreciation, Depreciation E Easements, Easements Employer-provided child care, Employer-Provided Child Care Exchanges: Involuntary, Involuntary Conversions Like-kind, Like-Kind Exchanges Nontaxable, Nontaxable Exchanges Partial business use of property, Partial Business Use of Property Taxable, Taxable Exchanges F Fair market value, Fair market value (FMV). File taxes free online Franchises, Franchises, trademarks, and trade names. File taxes free online Free tax services, How To Get Tax Help G Gain from sale of home, Postponed Gain From Sale of Home Gifts, property received, Property Received as a Gift Group of assets acquired, Group of Assets Acquired H Help (see Tax help) I Inherited property, Inherited Property Intangible assets, Intangible Assets Involuntary exchanges, Involuntary Conversions L Land and buildings, Land and Buildings Loans, low or no interest, Loans with low or no interest. File taxes free online M More information (see Tax help) N Nontaxable exchanges: Like-kind, Like-Kind Exchanges Partial, Partially Nontaxable Exchange P Partially nontaxable exchanges, Partially Nontaxable Exchange Patents, Patents. File taxes free online Points, Points. File taxes free online Property changed to business use, Property Changed to Business or Rental Use Property received as a gift, Property Received as a Gift Property received for services: Bargain purchases, Bargain Purchases Fair market value, Property Received for Services Restricted property, Restricted Property Property transferred from a spouse, Property Transferred From a Spouse Publications (see Tax help) R Real estate taxes, Real estate taxes. File taxes free online Real property, Real Property S Settlement costs (fees), Settlement costs. File taxes free online Special-use valuation, Special-use valuation. File taxes free online Spouse, property transferred from, Property Transferred From a Spouse Stocks and bonds, Stocks and Bonds Subdivided lots, Subdivided lots. File taxes free online T Tax help, How To Get Tax Help Taxable exchanges, Taxable Exchanges Taxpayer Advocate, Contacting your Taxpayer Advocate. File taxes free online Trade or business acquired, Trade or Business Acquired Trademarks and trade  names, Franchises, trademarks, and trade names. File taxes free online Trading property (see Exchanges), Taxable Exchanges TTY/TDD information, How To Get Tax Help U Uniform capitalization rules: Activities subject to the rules, Activities subject to the rules. File taxes free online Exceptions, Exceptions. File taxes free online Prev  Up     Home   More Online Publications