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

TurboTax Federal Free Edition - File Taxes Online

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

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


© 2012 - 2018 All rights reserved.

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

Filing Tax Extension 2012

2013 State Income Tax FormDoes Military Pay State Taxes1040x 2012 Tax Form2012 Pdf Tax Forms 1040Free State Tax FileH&r Block Free File ReviewLate TaxAmend A Tax ReturnFree H & R Block Tax Filing1040ez 2011 File OnlineStudent IncomeFile An Amended Tax ReturnIrs Gov 1040ez FormFree Online 2012 Tax ReturnTaxact2011File Your Taxes OnlineH R Block Home 2012Where Do I Mail My 1040xIrs Form 1040 20122011 1040ez Form Irs2011 Taxes OnlineFree 1040ez InstructionsWww Irs Gov 1040x FormIrs 1040x FormFree Tax Act1040 Ez 20111040ez 2012 Tax FormAmended Tax Return 2012Free FileTaxes Supplemental Security Income Ssi1040ez FormFree Tax File2012 H&r Block Tax SoftwareFederal Taxes 2011Online Tax Filing 1040nrH&r Block 2011How To File 2012 Taxes LateIrs Form 10401040 Ez OnlineDownload 1040ez Federal Tax Form

Filing Tax Extension 2012

Filing tax extension 2012 Publication 524 - Main Content Table of Contents Are You Eligible for the Credit?Qualified Individual Income Limits Credit Figured for You Figuring the Credit YourselfStep 1. Filing tax extension 2012 Determine Initial Amount Step 2. Filing tax extension 2012 Total Certain Nontaxable Pensions and Benefits Step 3. Filing tax extension 2012 Determine Excess Adjusted Gross Income Step 4. Filing tax extension 2012 Determine the Total of Steps 2 and 3 Step 5. Filing tax extension 2012 Determine Your Credit Examples How To Get Tax Help Are You Eligible for the Credit? You can take the credit for the elderly or the disabled if you meet both of the following requirements. Filing tax extension 2012 You are a qualified individual. Filing tax extension 2012 Your income is not more than certain limits. Filing tax extension 2012 You can use Figure A and Table 1 as guides to see if you are eligible for the credit. Filing tax extension 2012 Use Figure A first to see if you are a qualified individual. Filing tax extension 2012 If you are, go to Table 1 to make sure your income is not too high to take the credit. Filing tax extension 2012 You can take the credit only if you file Form 1040 or Form 1040A. Filing tax extension 2012 You cannot take the credit if you file Form 1040EZ or Form 1040NR. Filing tax extension 2012 Qualified Individual You are a qualified individual for this credit if you are a U. Filing tax extension 2012 S. Filing tax extension 2012 citizen or resident alien, and either of the following applies. Filing tax extension 2012 You were age 65 or older at the end of 2013. Filing tax extension 2012 You were under age 65 at the end of 2013 and all three of the following statements are true. Filing tax extension 2012 You retired on permanent and total disability (explained later). Filing tax extension 2012 You received taxable disability income for 2013. Filing tax extension 2012 On January 1, 2013, you had not reached mandatory retirement age (defined later under Disability income ). Filing tax extension 2012 Age 65. Filing tax extension 2012   You are considered to be age 65 on the day before your 65th birthday. Filing tax extension 2012 As a result, if you were born on January 1, 1949, you are considered to be age 65 at the end of 2013. Filing tax extension 2012 U. Filing tax extension 2012 S. Filing tax extension 2012 Citizen or Resident Alien You must be a U. Filing tax extension 2012 S. Filing tax extension 2012 citizen or resident alien (or be treated as a resident alien) to take the credit. Filing tax extension 2012 Generally, you cannot take the credit if you were a nonresident alien at any time during the tax year. Filing tax extension 2012 Exceptions. Filing tax extension 2012   You may be able to take the credit if you are a nonresident alien who is married to a U. Filing tax extension 2012 S. Filing tax extension 2012 citizen or resident alien at the end of the tax year and you and your spouse choose to treat you as a U. Filing tax extension 2012 S. Filing tax extension 2012 resident alien. Filing tax extension 2012 If you make that choice, both you and your spouse are taxed on your worldwide incomes. Filing tax extension 2012   If you were a nonresident alien at the beginning of the year and a resident alien at the end of the year, and you were married to a U. Filing tax extension 2012 S. Filing tax extension 2012 citizen or resident alien at the end of the year, you may be able to choose to be treated as a U. Filing tax extension 2012 S. Filing tax extension 2012 resident alien for the entire year. Filing tax extension 2012 In that case, you may be allowed to take the credit. Filing tax extension 2012   For information on these choices, see chapter 1 of Publication 519, U. Filing tax extension 2012 S. Filing tax extension 2012 Tax Guide for Aliens. Filing tax extension 2012 Married Persons Generally, if you are married at the end of the tax year, you and your spouse must file a joint return to take the credit. Filing tax extension 2012 However, if you and your spouse did not live in the same household at any time during the tax year, you can file either a joint return or separate returns and still take the credit. Filing tax extension 2012 Head of household. Filing tax extension 2012   You can file as head of household and qualify to take the credit, even if your spouse lived with you during the first 6 months of the year, if you meet all the following tests. Filing tax extension 2012 You file a separate return. Filing tax extension 2012 You paid more than half the cost of keeping up your home during the tax year. Filing tax extension 2012 Your spouse did not live in your home at any time during the last 6 months of the tax year and the absence was not temporary. Filing tax extension 2012 (See Temporary absences under Head of Household in Publication 501. Filing tax extension 2012 ) Your home was the main home of your child, stepchild, or an eligible foster child for more than half the year. Filing tax extension 2012 An eligible foster child is a child placed with you by an authorized placement agency or by judgment, decree, or other order of any court of competent jurisdiction. Filing tax extension 2012 You can claim an exemption for that child, or you cannot claim the exemption only because the noncustodial parent can claim the child using the rules for children of divorced or separated parents. Filing tax extension 2012 For more information, see Publication 501, Exemptions, Standard Deduction, and Filing Information. Filing tax extension 2012 Figure A. Filing tax extension 2012 Are You a Qualified Individual? Please click here for the text description of the image. Filing tax extension 2012 figure a Under Age 65 If you are under age 65 at the end of 2013, you can qualify for the credit only if you are retired on permanent and total disability (discussed next) and have taxable disability income (discussed later under Disability income ). Filing tax extension 2012 You are retired on permanent and total disability if: You were permanently and totally disabled when you retired, and You retired on disability before the close of the tax year. Filing tax extension 2012 Even if you do not retire formally, you may be considered retired on disability when you have stopped working because of your disability. Filing tax extension 2012 If you retired on disability before 1977, and were not permanently and totally disabled at the time, you can qualify for the credit if you were permanently and totally disabled on January 1, 1976, or January 1, 1977. Filing tax extension 2012 You are considered to be under age 65 at the end of 2013 if you were born after January 1, 1949. Filing tax extension 2012 Permanent and total disability. Filing tax extension 2012    You are permanently and totally disabled if you cannot engage in any substantial gainful activity because of your physical or mental condition. Filing tax extension 2012 A qualified physician must certify that the condition has lasted or can be expected to last continuously for 12 months or more, or that the condition can be expected to result in death. Filing tax extension 2012 See Physician's statement , later. Filing tax extension 2012 Substantial gainful activity. Filing tax extension 2012   Substantial gainful activity is the performance of significant duties over a reasonable period of time while working for pay or profit, or in work generally done for pay or profit. Filing tax extension 2012 Full-time work (or part-time work done at your employer's convenience) in a competitive work situation for at least the minimum wage conclusively shows that you are able to engage in substantial gainful activity. Filing tax extension 2012   Substantial gainful activity is not work you do to take care of yourself or your home. Filing tax extension 2012 It is not unpaid work on hobbies, institutional therapy or training, school attendance, clubs, social programs, and similar activities. Filing tax extension 2012 However, doing this kind of work may show that you are able to engage in substantial gainful activity. Filing tax extension 2012    The fact that you have not worked for some time is not, of itself, conclusive evidence that you cannot engage in substantial gainful activity. Filing tax extension 2012   The following examples illustrate the tests of substantial gainful activity. Filing tax extension 2012 Example 1. Filing tax extension 2012 Trisha, a sales clerk, retired on disability. Filing tax extension 2012 She is 53 years old and now works as a full-time babysitter for the minimum wage. Filing tax extension 2012 Even though Trisha is doing different work, she is able to do the duties of her new job in a full-time competitive work situation for the minimum wage. Filing tax extension 2012 She cannot take the credit because she is able to engage in substantial gainful activity. Filing tax extension 2012 Example 2. Filing tax extension 2012 Tom, a bookkeeper, retired on disability. Filing tax extension 2012 He is 59 years old and now drives a truck for a charitable organization. Filing tax extension 2012 He sets his own hours and is not paid. Filing tax extension 2012 Duties of this nature generally are performed for pay or profit. Filing tax extension 2012 Some weeks he works 10 hours, and some weeks he works 40 hours. Filing tax extension 2012 Over the year he averages 20 hours a week. Filing tax extension 2012 The kind of work and his average hours a week conclusively show that Tom is able to engage in substantial gainful activity. Filing tax extension 2012 This is true even though Tom is not paid and he sets his own hours. Filing tax extension 2012 He cannot take the credit. Filing tax extension 2012 Example 3. Filing tax extension 2012 John, who retired on disability, took a job with a former employer on a trial basis. Filing tax extension 2012 The purpose of the job was to see if John could do the work. Filing tax extension 2012 The trial period lasted for 6 months during which John was paid the minimum wage. Filing tax extension 2012 Because of John's disability, he was assigned only light duties of a nonproductive “make-work” nature. Filing tax extension 2012 The activity was gainful because John was paid at least the minimum wage. Filing tax extension 2012 But the activity was not substantial because his duties were nonproductive. Filing tax extension 2012 These facts do not, by themselves, show that John is able to engage in substantial gainful activity. Filing tax extension 2012 Example 4. Filing tax extension 2012 Joan, who retired on disability from a job as a bookkeeper, lives with her sister who manages several motel units. Filing tax extension 2012 Joan helps her sister for 1 or 2 hours a day by performing duties such as washing dishes, answering phones, registering guests, and bookkeeping. Filing tax extension 2012 Joan can select the time of day when she feels most fit to work. Filing tax extension 2012 Work of this nature, performed off and on during the day at Joan's convenience, is not activity of a “substantial and gainful” nature even if she is paid for the work. Filing tax extension 2012 The performance of these duties does not, of itself, show that Joan is able to engage in substantial gainful activity. Filing tax extension 2012 Sheltered employment. Filing tax extension 2012   Certain work offered at qualified locations to physically or mentally impaired persons is considered sheltered employment. Filing tax extension 2012 These qualified locations are in sheltered workshops, hospitals and similar institutions, homebound programs, and Department of Veterans Affairs (VA) sponsored homes. Filing tax extension 2012   Compared to commercial employment, pay is lower for sheltered employment. Filing tax extension 2012 Therefore, one usually does not look for sheltered employment if he or she can get other employment. Filing tax extension 2012 The fact that one has accepted sheltered employment is not proof of the person's ability to engage in substantial gainful activity. Filing tax extension 2012 Physician's statement. Filing tax extension 2012   If you are under age 65, you must have your physician complete a statement certifying that you were permanently and totally disabled on the date you retired. Filing tax extension 2012 You can use the statement in the Instructions for Schedule R. Filing tax extension 2012   You do not have to file this statement with your Form 1040 or Form 1040A, but you must keep it for your records. Filing tax extension 2012 Veterans. Filing tax extension 2012    If the Department of Veterans Affairs (VA) certifies that you are permanently and totally disabled, you can substitute VA Form 21-0172, Certification of Permanent and Total Disability, for the physician's statement you are required to keep. Filing tax extension 2012 VA Form 21-0172 must be signed by a person authorized by the VA to do so. Filing tax extension 2012 You can get this form from your local VA regional office. Filing tax extension 2012 Physician's statement obtained in earlier year. Filing tax extension 2012   If you got a physician's statement in an earlier year and, due to your continued disabled condition, you were unable to engage in any substantial gainful activity during 2013, you may not need to get another physician's statement for 2013. Filing tax extension 2012 For a detailed explanation of the conditions you must meet, see the instructions for Schedule R, Part II. Filing tax extension 2012 If you meet the required conditions, check the box on your Schedule R, Part II, line 2. Filing tax extension 2012   If you checked box 4, 5, or 6 in Part I of Schedule R, enter in the space above the box on line 2 in Part II the first name(s) of the spouse(s) for whom the box is checked. Filing tax extension 2012 Disability income. Filing tax extension 2012   If you are under age 65, you must also have taxable disability income to qualify for the credit. Filing tax extension 2012 Disability income must meet both of the following requirements. Filing tax extension 2012 It must be paid under your employer's accident or health plan or pension plan. Filing tax extension 2012 It must be included in your income as wages (or payments instead of wages) for the time you are absent from work because of permanent and total disability. Filing tax extension 2012 Payments that are not disability income. Filing tax extension 2012    Any payment you receive from a plan that does not provide for disability retirement is not disability income. Filing tax extension 2012 Any lump-sum payment for accrued annual leave that you receive when you retire on disability is a salary payment and is not disability income. Filing tax extension 2012    For purposes of the credit for the elderly or the disabled, disability income does not include amounts you receive after you reach mandatory retirement age. Filing tax extension 2012 Mandatory retirement age is the age set by your employer at which you would have had to retire, had you not become disabled. Filing tax extension 2012 Income Limits To determine if you can claim the credit, you must consider two income limits. Filing tax extension 2012 The first limit is the amount of your adjusted gross income (AGI). Filing tax extension 2012 The second limit is the amount of nontaxable social security and other nontaxable pensions, annuities, or disability income you received. Filing tax extension 2012 The limits are shown in Table 1. Filing tax extension 2012 If your AGI and your nontaxable pensions, annuities, or disability income are less than the income limits, you may be able to claim the credit. Filing tax extension 2012 See Figuring the Credit Yourself , later. Filing tax extension 2012 Table 1. Filing tax extension 2012 Income Limits IF your filing status is THEN, even if you qualify (see Figure A), you CANNOT take the credit if   Your adjusted gross income (AGI)* is equal to or more than. Filing tax extension 2012 . Filing tax extension 2012 . Filing tax extension 2012     OR the total of your nontaxable social security and other nontaxable pension(s), annuities, or disability income is equal to or more than. Filing tax extension 2012 . Filing tax extension 2012 . Filing tax extension 2012   single, head of household, or qualifying widow(er) with dependent child   $17,500     $5,000   married filing jointly and only one spouse qualifies in Figure A   $20,000     $5,000   married filing jointly and both spouses qualify in Figure A   $25,000     $7,500   married filing separately and you lived apart from your spouse for all of 2013   $12,500     $3,750   * AGI is the amount on Form 1040A, line 22, or Form 1040, line 38. Filing tax extension 2012 If your AGI or your nontaxable pensions, annuities, or disability income are equal to or more than the income limits, you cannot take the credit. Filing tax extension 2012 Credit Figured for You You can figure the credit yourself, or the Internal Revenue Service (IRS) will figure it for you. Filing tax extension 2012 See Figuring the Credit Yourself , next. Filing tax extension 2012 If you can take the credit and you want the IRS to figure the credit for you, attach Schedule R to your return. Filing tax extension 2012 Check the appropriate box in Part I of Schedule R and fill in Part II and lines 11, 13a, and 13b of Part III, if they apply to you. Filing tax extension 2012 If you file Form 1040A, enter “CFE” in the space to the left of Form 1040A, line 30. Filing tax extension 2012 If you file Form 1040, check box c on Form 1040, line 53, and enter “CFE” on the line next to that box. Filing tax extension 2012 Attach Schedule R to your return. Filing tax extension 2012 Table 2. Filing tax extension 2012 Initial Amounts IF your filing status is. Filing tax extension 2012 . Filing tax extension 2012 . Filing tax extension 2012   THEN enter on line 10 of Schedule R. Filing tax extension 2012 . Filing tax extension 2012 . Filing tax extension 2012 single,head of household, or qualifying widow(er) with dependent child and, by the end of 2013, you were       • 65 or older $5,000   • under 65 and retired on permanent and total disability1 $5,000 married filing a joint return and by the end of 2013       • both of you were 65 or older $7,500   • both of you were under 65 and one of you retired on permanent and total disability1 $5,000   • both of you were under 65 and both of you retired on permanent and total disability2 $7,500   • one of you was 65 or older, and the other was under 65 and retired on permanent  and total disability3 $7,500   • one of you was 65 or older, and the other was under 65 and not retired on permanent  and total disability $5,000 married filing a separate return and you did not live with your spouse at any time during the year and, by the end of 2013, you were       • 65 or older $3,750   • under 65 and retired on permanent and total disability1 $3,750   1 Amount cannot be more than the taxable disability income. Filing tax extension 2012     2 Amount cannot be more than your combined taxable disability income. Filing tax extension 2012     3 Amount is $5,000 plus the taxable disability income of the spouse under age 65, but not more than $7,500. Filing tax extension 2012   Figuring the Credit Yourself If you figure the credit yourself, fill out the front of Schedule R. Filing tax extension 2012 Next, fill out Schedule R, Part III. Filing tax extension 2012 If you file Form 1040A, enter the amount from Schedule R, line 22 on line 30. Filing tax extension 2012 If you file Form 1040, include the amount from Schedule R, line 22 on line 53, check box c, and enter “Sch R” on the line next to that box. Filing tax extension 2012 There are five steps in Part III to determine the amount of your credit. Filing tax extension 2012 Determine your initial amount (lines 10–12). Filing tax extension 2012 Determine the total of any nontaxable social security and certain other nontaxable pensions, annuities, and disability benefits you received (lines 13a, 13b, and 13c). Filing tax extension 2012 Determine your excess adjusted gross income (lines 14–17). Filing tax extension 2012 Determine the total of steps 2 and 3 (line 18). Filing tax extension 2012 Determine your credit (lines 19–22). Filing tax extension 2012 These steps are discussed in more detail next. Filing tax extension 2012 Step 1. Filing tax extension 2012 Determine Initial Amount To figure the credit, you must first determine your initial amount using lines 10 through 12. Filing tax extension 2012 See Table 2. Filing tax extension 2012 Your initial amount is on line 12. Filing tax extension 2012 Initial amounts for persons under age 65. Filing tax extension 2012   If you are a qualified individual under age 65, your initial amount cannot be more than your taxable disability income. Filing tax extension 2012 Special rules for joint returns. Filing tax extension 2012   If you are a qualified individual under age 65, and your spouse is also a qualified individual, your initial amount is your taxable disability income plus $5,000. Filing tax extension 2012   If you are a qualified individual, and both you and your spouse are under age 65, your initial amount cannot be more than your combined taxable disability income. Filing tax extension 2012 Step 2. Filing tax extension 2012 Total Certain Nontaxable Pensions and Benefits Step 2 is to figure the total amount of nontaxable social security and certain other nontaxable payments you received during the year. Filing tax extension 2012 You must reduce your initial amount by these payments. Filing tax extension 2012 Enter these nontaxable payments on lines 13a or 13b and total them on line 13c. Filing tax extension 2012 If you are married filing jointly, you must enter the combined amount of nontaxable payments both you and your spouse received. Filing tax extension 2012 Worksheets are provided in the instructions for Forms 1040 and 1040A to help you determine if any of your social security benefits (or equivalent railroad retirement benefits) are taxable. Filing tax extension 2012 Include the following nontaxable payments in the amounts you enter on lines 13a and 13b. Filing tax extension 2012 Nontaxable social security payments. Filing tax extension 2012 This is the nontaxable part of the benefits shown in box 5 of Form SSA-1099, Social Security Benefit Statement, before deducting any amounts withheld to pay premiums on supplementary Medicare insurance, and before any reduction because of benefits received under workers' compensation. Filing tax extension 2012 (Do not include a lump-sum death benefit payment you may receive as a surviving spouse, or a surviving child's insurance benefit payments you may receive as a guardian. Filing tax extension 2012 ) Nontaxable railroad retirement pension payments treated as social security. Filing tax extension 2012 This is the nontaxable part of the benefits shown in box 5 of Form RRB-1099, Payments by the Railroad Retirement Board. Filing tax extension 2012 Nontaxable pension or annuity payments or disability benefits that are paid under a law administered by the Department of Veterans Affairs (VA). Filing tax extension 2012 (Do not include amounts received as a pension, annuity, or similar allowance for personal injuries or sickness resulting from active service in the armed forces of any country or in the National Oceanic and Atmospheric Administration or the Public Health Service, or as a disability annuity under section 808 of the Foreign Service Act of 1980. Filing tax extension 2012 ) Pension or annuity payments or disability benefits that are excluded from income under any provision of federal law other than the Internal Revenue Code. Filing tax extension 2012 (Do not include amounts that are a return of your cost of a pension or annuity. Filing tax extension 2012 These amounts do not reduce your initial amount. Filing tax extension 2012 ) You should be sure to take into account all of the nontaxable amounts you receive. Filing tax extension 2012 These amounts are verified by the IRS through information supplied by other government agencies. Filing tax extension 2012 Step 3. Filing tax extension 2012 Determine Excess Adjusted Gross Income You also must reduce your initial amount by your excess adjusted gross income. Filing tax extension 2012 Figure your excess adjusted gross income on lines 14–17. Filing tax extension 2012 You figure your excess adjusted gross income as follows. Filing tax extension 2012 Subtract from your adjusted gross income (Form 1040A, line 22 or Form 1040, line 38) the amount shown for your filing status. Filing tax extension 2012 $7,500 if you are single, a head of household, or a qualifying widow(er) with dependent child, $10,000 if you are married filing jointly, or $5,000 if you are married filing separately and you and your spouse did not live in the same household at any time during the tax year. Filing tax extension 2012 Divide the result of (1) by 2. Filing tax extension 2012 Step 4. Filing tax extension 2012 Determine the Total of Steps 2 and 3 To determine if you can take the credit, you must add (on line 18) the amounts you figured in Step 2 (line 13c) and Step 3 (line 17). Filing tax extension 2012 Step 5. Filing tax extension 2012 Determine Your Credit Subtract the amount determined in Step 4 (line 18) from the amount determined in Step 1 (line 12), and multiply the result by 15% (. Filing tax extension 2012 15). Filing tax extension 2012 In certain cases, the amount of your credit may be limited. Filing tax extension 2012 See Limit on credit , later. Filing tax extension 2012 Example. Filing tax extension 2012 You are 66 years old and your spouse is 64. Filing tax extension 2012 Your spouse is not disabled. Filing tax extension 2012 You file a joint return on Form 1040. Filing tax extension 2012 Your adjusted gross income is $14,630. Filing tax extension 2012 Together you received $3,200 from social security, which was nontaxable. Filing tax extension 2012 You figure the credit as follows: Example applying the 5 step process Amount (Line references (shown in parentheses) are to the Schedule R)      1. Filing tax extension 2012 Initial amount (line 12) $5,000 2. Filing tax extension 2012 Total nontaxable social security  and other nontaxable  pensions (line 13c) $3,200   3. Filing tax extension 2012 Excess adjusted gross income  ($14,630–$10,000) ÷ 2 (line 17) 2,315   4. Filing tax extension 2012 Add (2) and (3) (line 18) 5,515 5. Filing tax extension 2012 Subtract (4) from (1) (line 12 – line 18 = line 19) (Do not enter less than -0-) $ -0- You cannot take the credit because your nontaxable social security plus your excess adjusted gross income is more than your initial amount. Filing tax extension 2012 Limit on credit. Filing tax extension 2012   The amount of credit you can claim is generally limited to the amount of your tax. Filing tax extension 2012 Use the Credit Limit Worksheet in the Instructions for Schedule R to determine if your credit is limited. Filing tax extension 2012 Examples The following examples illustrate the credit for the elderly or the disabled. Filing tax extension 2012 The initial amounts are taken from Table 2, earlier. Filing tax extension 2012 Example 1. Filing tax extension 2012 James Davis is 58 years old, single, and files Form 1040A. Filing tax extension 2012 In 2011 he retired on permanent and total disability, and he is still permanently and totally disabled. Filing tax extension 2012 He got the required physician's statement in 2011 and kept it with his tax records. Filing tax extension 2012 His physician signed on line B of the statement. Filing tax extension 2012 This year James checks the box in Schedule R, Part II. Filing tax extension 2012 He does not need to get another statement for 2013. Filing tax extension 2012 He received the following income for the year: Nontaxable social security $1,500 Interest (taxable) 100 Taxable disability pension 11,400       James' adjusted gross income is $11,500 ($11,400 + $100). Filing tax extension 2012 He figures the credit on Schedule R as follows: 1. Filing tax extension 2012 Initial amount   $5,000 2. Filing tax extension 2012 Taxable disability pension   11,400 3. Filing tax extension 2012 Smaller of line 1 or line 2   5,000 4. Filing tax extension 2012 Nontaxable social security  benefits $1,500     5. Filing tax extension 2012 Excess adjusted gross income  ($11,500 − $7,500) ÷ 2 2,000     6. Filing tax extension 2012 Add lines 4 and 5   3,500 7. Filing tax extension 2012 Subtract line 6 from line 3  (Do not enter less than (-0-))   1,500 8. Filing tax extension 2012 Multiply line 7 by 15% (. Filing tax extension 2012 15)   225 9. Filing tax extension 2012 Enter the amount from the  Credit Limit Worksheet in the  Instructions for Schedule R, line 21   151 10. Filing tax extension 2012 Credit (Enter the smaller of  line 8 or line 9)   $ 151 He enters $151 on line 30 of Form 1040A. Filing tax extension 2012 The Schedule R for James Davis is not shown. Filing tax extension 2012 Example 2. Filing tax extension 2012 William White is 53. Filing tax extension 2012 His wife Helen is 49. Filing tax extension 2012 William had a stroke 3 years ago and retired on permanent and total disability. Filing tax extension 2012 He is still permanently and totally disabled because of the stroke. Filing tax extension 2012 In November, Helen was injured in an accident at work and retired on permanent and total disability. Filing tax extension 2012 William received nontaxable social security disability benefits of $2,000 during the year and a taxable disability pension of $6,200. Filing tax extension 2012 Helen earned $12,500 from her job and received a taxable disability pension of $1,700. Filing tax extension 2012 Their joint return on Form 1040 shows adjusted gross income of $20,400 ($6,200 + $12,500 + $1,700). Filing tax extension 2012 They do not itemize deductions. Filing tax extension 2012 They do not have any amounts that would increase their standard deduction. Filing tax extension 2012 Helen's doctor completed the physician's statement in the Instructions for Schedule R. Filing tax extension 2012 Helen is not required to include the statement with their return, but she must keep it for her records. Filing tax extension 2012 William got a physician's statement for the year he had the stroke. Filing tax extension 2012 His doctor had signed on line B of that physician's statement to certify that William was permanently and totally disabled. Filing tax extension 2012 William has kept the physician's statement with his records. Filing tax extension 2012 He checks the box on Schedule R, Part II and writes his first name in the space above the box on line 2. Filing tax extension 2012 William and Helen use Schedule R to figure their $41 credit for the elderly or the disabled. Filing tax extension 2012 They attach Schedule R to their Form 1040 and enter $41 on line 53. Filing tax extension 2012 They check box c on line 53 and enter “Sch R” on the line next to that box. Filing tax extension 2012 See their filled-in Schedule R and Helen's filled-in physician's statement, later. Filing tax extension 2012 Instructions for Physician's Statement     Taxpayer Physician If you retired after 1976, enter the date you retired in the space provided on the statement below. Filing tax extension 2012 A person is permanently and totally disabled if both of the following apply:   1. Filing tax extension 2012 He or she cannot engage in any substantial gainful activity because of a physical or mental condition. Filing tax extension 2012   2. Filing tax extension 2012 A physician determines that the disability has lasted or can be expected to last continuously for at least a year or can lead to death. Filing tax extension 2012 Physician's Statement     I certify that Helen A. Filing tax extension 2012 White Name of disabled person was permanently and totally disabled on January 1, 1976, or January 1, 1977, or was permanently and totally disabled on the date he or she retired. Filing tax extension 2012 If retired after 1976, enter the date retired ▶ November 1, 2013   Physician: Sign your name on either A or B below. Filing tax extension 2012 AThe disability has lasted or can be expected to last continuously for at least a year     Physician's signatureDate BThere is no reasonable probability that the disabled condition will ever improve Ayden D. Filing tax extension 2012 Doctor 2/8/14   Physician's signatureDate Physician's name Physician's address Ayden D. Filing tax extension 2012 Doctor 1900 Green St. Filing tax extension 2012 , Hometown, MD 20000         This image is too large to be displayed in the current screen. Filing tax extension 2012 Please click the link to view the image. Filing tax extension 2012 Page 1 of Schedule R for the Whites This image is too large to be displayed in the current screen. Filing tax extension 2012 Please click the link to view the image. Filing tax extension 2012 Page 2 of Schedule R for the Whites How To Get Tax Help Go online, use a smart phone, call or walk in to an office near you. Filing tax extension 2012 Whether it's help with a tax issue, preparing your tax return or picking up a free publication or form, get the help you need the way you want it. Filing tax extension 2012 Free help with your tax return. Filing tax extension 2012   Free help in preparing your return is available nationwide from IRS-certified volunteers. Filing tax extension 2012 The Volunteer Income Tax Assistance (VITA) program is designed to help low-to-moderate income, elderly, persons with disabilities, and limited English proficient taxpayers. Filing tax extension 2012 The Tax Counseling for the Elderly (TCE) program is designed to assist taxpayers age 60 and older with their tax returns. Filing tax extension 2012 Most VITA and TCE sites offer free electronic filing and all volunteers will let you know about credits and deductions you may be entitled to claim. Filing tax extension 2012 Some VITA and TCE sites provide taxpayers the opportunity to prepare their return with the assistance of an IRS-certified volunteer. Filing tax extension 2012 To find the nearest VITA or TCE site, visit IRS. Filing tax extension 2012 gov or call 1-800-906-9887. Filing tax extension 2012   As part of the TCE program, AARP offers the Tax-Aide counseling program. Filing tax extension 2012 To find the nearest AARP Tax-Aide site, visit AARP's website at www. Filing tax extension 2012 aarp. Filing tax extension 2012 org/money/taxaide or call 1-888-227-7669. Filing tax extension 2012   For more information on these programs, go to IRS. Filing tax extension 2012 gov and enter “VITA” in the search box. Filing tax extension 2012 Internet. Filing tax extension 2012 IRS. Filing tax extension 2012 gov and IRS2Go are ready when you are — every day, every night, 24 hours a day, 7 days a week. Filing tax extension 2012 Apply for an Employer Identification Number (EIN). Filing tax extension 2012 Go to IRS. Filing tax extension 2012 gov and enter Apply for an EIN in the search box. Filing tax extension 2012 Request an Electronic Filing PIN by going to IRS. Filing tax extension 2012 gov and entering Electronic Filing PIN in the search box. Filing tax extension 2012 Check the status of your 2013 refund with Where's My Refund? Go to IRS. Filing tax extension 2012 gov or the IRS2Go app, and click on Where's My Refund? You'll get a personalized refund date as soon as the IRS processes your tax return and approves your refund. Filing tax extension 2012 If you e-file, your refund status is usually available within 24 hours after the IRS receives your tax return or 4 weeks after you've mailed a paper return. Filing tax extension 2012 Check the status of your amended return. Filing tax extension 2012 Go to IRS. Filing tax extension 2012 gov and enter Where's My Amended Return in the search box. Filing tax extension 2012 Download forms, instructions, and publications, including some accessible versions. Filing tax extension 2012 Order free transcripts of your tax returns or tax account using the Order a Transcript tool on IRS. Filing tax extension 2012 gov or IRS2Go. Filing tax extension 2012 Tax return and tax account transcripts are generally available for the current year and past three years. Filing tax extension 2012 Figure your income tax withholding with the IRS Withholding Calculator on IRS. Filing tax extension 2012 gov. Filing tax extension 2012 Use it if you've had too much or too little withheld, your personal situation has changed, you're starting a new job or you just want to see if you're having the right amount withheld. Filing tax extension 2012 Determine if you might be subject to the Alternative Minimum Tax by using the Alternative Minimum Tax Assistant on IRS. Filing tax extension 2012 gov. Filing tax extension 2012 Locate the nearest Taxpayer Assistance Center using the Office Locator tool on IRS. Filing tax extension 2012 gov or IRS2Go. Filing tax extension 2012 Stop by most business days for face-to-face tax help, no appointment necessary — just walk in. Filing tax extension 2012 An employee can explain IRS letters, request adjustments to your tax account or help you set up a payment plan. Filing tax extension 2012 Before you visit, check the Office Locator for the address, phone number, hours of operation and the services provided. Filing tax extension 2012 If you have an ongoing tax account problem or a special need, such as a disability, you can request an appointment. Filing tax extension 2012 Call the local number listed in the Office Locator, or look in the phone book under United States Government, Internal Revenue Service. Filing tax extension 2012 Locate the nearest volunteer help site with the VITA Locator Tool on IRS. Filing tax extension 2012 gov. Filing tax extension 2012 Low-to-moderate income, elderly, persons with disabilities, and limited English proficient taxpayers can get free help with their tax return from the nationwide Volunteer Income Tax Assistance (VITA) program. Filing tax extension 2012 The Tax Counseling for the Elderly (TCE) program helps taxpayers 60 and older with their tax returns. Filing tax extension 2012 Most VITA and TCE sites offer free electronic filing and some provide IRS-certified volunteers who can help prepare your tax return. Filing tax extension 2012 AARP offers the Tax-Aide counseling program as part of the TCE program. Filing tax extension 2012 Visit AARP's website to find the nearest Tax-Aide location. Filing tax extension 2012 Research your tax questions. Filing tax extension 2012 Search publications and instructions by topic or keyword. Filing tax extension 2012 Read the Internal Revenue Code, regulations, or other official guidance. Filing tax extension 2012 Read Internal Revenue Bulletins. Filing tax extension 2012 Sign up to receive local and national tax news by email. Filing tax extension 2012 Phone. Filing tax extension 2012 You can call the IRS, or you can carry it in your pocket with the IRS2Go app on your smart phone or tablet. Filing tax extension 2012 Download the free IRS2Go mobile app from the iTunes app store or from Google Play. Filing tax extension 2012 Use it to watch the IRS YouTube channel, get IRS news as soon as it's released to the public, order transcripts of your tax returns or tax account, check your refund status, subscribe to filing season updates or daily tax tips, and follow the IRS Twitter news feed, @IRSnews, to get the latest federal tax news, including information about tax law changes and important IRS programs. Filing tax extension 2012 Call to locate the nearest volunteer help site, 1-800-906-9887. Filing tax extension 2012 Low-to-moderate income, elderly, persons with disabilities, and limited English proficient taxpayers can get free help with their tax return from the nationwide Volunteer Income Tax Assistance (VITA) program. Filing tax extension 2012 The Tax Counseling for the Elderly (TCE) program helps taxpayers 60 and older with their tax returns. Filing tax extension 2012 Most VITA and TCE sites offer free electronic filing. Filing tax extension 2012 Some VITA and TCE sites provide IRS-certified volunteers who can help prepare your tax return. Filing tax extension 2012 Through the TCE program, AARP offers the Tax-Aide counseling program; call 1-888-227-7669 to find the nearest Tax-Aide location. Filing tax extension 2012 Call to check the status of your 2013 refund, 1-800-829-1954 or 1-800-829-4477. Filing tax extension 2012 The automated Where's My Refund? information is available 24 hours a day, 7 days a week. Filing tax extension 2012 If you e-file, your refund status is usually available within 24 hours after the IRS receives your tax return or 4 weeks after you've mailed a paper return. Filing tax extension 2012 Before you call, have your 2013 tax return handy so you can provide your social security number, your filing status, and the exact whole dollar amount of your refund. Filing tax extension 2012 Where's My Refund? can give you a personalized refund date as soon as the IRS processes your tax return and approves your refund. Filing tax extension 2012 Where's My Refund? includes information for the most recent return filed in the current year and does not include information about amended returns. Filing tax extension 2012 Call the Amended Return Hotline, 1-866-464-2050, to check the status of your amended return. Filing tax extension 2012 Call to order forms, instructions and publications, 1-800-TAX-FORM (1-800-829-3676) to order current-year forms, instructions and publications, and prior-year forms and instructions (limited to 5 years). Filing tax extension 2012 You should receive your order within 10 business days. Filing tax extension 2012 Call to order transcripts of your tax returns or tax account, 1-800-908-9946. Filing tax extension 2012 Follow the prompts to provide your Social Security Number or Individual Taxpayer Identification Number, date of birth, street address and ZIP code. Filing tax extension 2012 Call for TeleTax topics, 1-800-829-4477, to listen to pre-recorded messages covering various tax topics. Filing tax extension 2012 Call to ask tax questions, 1-800-829-1040. Filing tax extension 2012 Call using TTY/TDD equipment, 1-800-829-4059 to ask tax questions or order forms and publications. Filing tax extension 2012 The TTY/TDD telephone number is for people who are deaf, hard of hearing, or have a speech disability. Filing tax extension 2012 These individuals can also contact the IRS through relay services such as the Federal Relay Service available at www. Filing tax extension 2012 gsa. Filing tax extension 2012 gov/fedrelay. Filing tax extension 2012 Walk-in. Filing tax extension 2012 You can find a selection of forms, publications and services — in-person, face-to-face. Filing tax extension 2012 Products. Filing tax extension 2012 You can walk in to some post offices, libraries, and IRS offices to pick up certain forms, instructions, and publications. Filing tax extension 2012 Some IRS offices, libraries, and city and county government offices have a collection of products available to photocopy from reproducible proofs. Filing tax extension 2012 Services. Filing tax extension 2012 You can walk in to your local TAC most business days for personal, face-to-face tax help. Filing tax extension 2012 An employee can explain IRS letters, request adjustments to your tax account, or help you set up a payment plan. Filing tax extension 2012 If you need to resolve a tax problem, have questions about how the tax law applies to your individual tax return, or you are more comfortable talking with someone in person, visit your local TAC where you can talk with an IRS representative face-to-face. Filing tax extension 2012 No appointment is necessary—just walk in. Filing tax extension 2012 Before visiting, check www. Filing tax extension 2012 irs. Filing tax extension 2012 gov/localcontacts for hours of operation and services provided. Filing tax extension 2012 Mail. Filing tax extension 2012 You can send your order for forms, instructions, and publications to the address below. Filing tax extension 2012 You should receive a response within 10 business days after your request is received. Filing tax extension 2012  Internal Revenue Service 1201 N. Filing tax extension 2012 Mitsubishi Motorway Bloomington, IL 61705-6613 The Taxpayer Advocate Service Is Here to Help You. Filing tax extension 2012   The Taxpayer Advocate Service (TAS) is your voice at the IRS. Filing tax extension 2012 Our job is to ensure that every taxpayer is treated fairly and that you know and understand your rights. Filing tax extension 2012 What can TAS do for you?   We can offer you free help with IRS problems that you can't resolve on your own. Filing tax extension 2012 We know this process can be confusing, but the worst thing you can do is nothing at all! TAS can help if you can't resolve your tax problem and: Your problem is causing financial difficulties for you, your family, or your business. Filing tax extension 2012 You face (or your business is facing) an immediate threat of adverse action. Filing tax extension 2012 You've tried repeatedly to contact the IRS but no one has responded, or the IRS hasn't responded by the date promised. Filing tax extension 2012   If you qualify for our help, you'll be assigned to one advocate who'll be with you at every turn and will do everything possible to resolve your problem. Filing tax extension 2012 Here's why we can help: TAS is an independent organization within the IRS. Filing tax extension 2012 Our advocates know how to work with the IRS. Filing tax extension 2012 Our services are free and tailored to meet your needs. Filing tax extension 2012 We have offices in every state, the District of Columbia, and Puerto Rico. Filing tax extension 2012 How can you reach us?   If you think TAS can help you, call your local advocate, whose number is in your local directory and at www. Filing tax extension 2012 irs. Filing tax extension 2012 gov/advocate, or call us toll-free at 1-877-777-4778. Filing tax extension 2012 How else does TAS help taxpayers?   TAS also works to resolve large-scale, systemic problems that affect many taxpayers. Filing tax extension 2012 If you know of one of these broad issues, please report it to us through our Systemic Advocacy Management System at www. Filing tax extension 2012 irs. Filing tax extension 2012 gov/sams. Filing tax extension 2012 Low Income Taxpayer Clinics. Filing tax extension 2012   Low Income Taxpayer Clinics (LITCs) serve individuals whose income is below a certain level and need to resolve tax problems such as audits, appeals, and tax collection disputes. Filing tax extension 2012 Some clinics can provide information about taxpayer rights and responsibilities in different languages for individuals who speak English as a second language. Filing tax extension 2012 Visit www. Filing tax extension 2012 TaxpayerAdvocate. Filing tax extension 2012 irs. Filing tax extension 2012 gov or see IRS Publication 4134, Low Income Taxpayer Clinic List. Filing tax extension 2012 Prev  Up  Next   Home   More Online Publications
Español

Phones

Tips to help you pick the phone service plan that's right for you.

  • General Tips
    Questions to consider when choosing your telephone service provider(s) and other options available to you.
  • Cell Phones and Wireless Devices
    What to consider when chosing a service plan for your cell phone or wireless communications plans.
  • Phone Scams
    How to avoid telephone billing fraud, cramming and slamming.

The Filing Tax Extension 2012

Filing tax extension 2012 Internal Revenue Bulletin:  2013-7  February 11, 2013  Rev. Filing tax extension 2012 Proc. Filing tax extension 2012 2013-16 Table of Contents SECTION 1. Filing tax extension 2012 PURPOSE SECTION 2. Filing tax extension 2012 BACKGROUND—HAMP AND THE HAMP PRINCIPAL REDUCTION ALTERNATIVE SECTION 3. Filing tax extension 2012 BACKGROUND—APPLICABLE PROVISIONS OF LAW SECTION 4. Filing tax extension 2012 FEDERAL INCOME TAX TREATMENT SECTION 5. Filing tax extension 2012 INFORMATION-REPORTING OBLIGATIONS SECTION 6. Filing tax extension 2012 HAMP-PRA BORROWERS’ REPORTING OF DISCHARGES OF INDEBTEDNESS UNDER HAMP-PRA SECTION 7. Filing tax extension 2012 PENALTY RELIEF FOR 2012 SECTION 8. Filing tax extension 2012 SCOPE AND EFFECTIVE DATE SECTION 9. Filing tax extension 2012 DRAFTING INFORMATION SECTION 1. Filing tax extension 2012 PURPOSE This revenue procedure provides guidance to mortgage loan holders, loan servicers, and borrowers who are participating in the Department of the Treasury’s (Treasury) and Department of Housing and Urban Development’s (HUD) Home Affordable Modification Program® (HAMP®). Filing tax extension 2012 Under HAMP, a borrower may be eligible for principal reduction of the outstanding balance of a qualifying mortgage pursuant to the program’s Principal Reduction AlternativeSM (PRA). Filing tax extension 2012 In appropriate cases, HAMP has been offering the PRA as part of a HAMP loan modification since the last quarter of 2010. Filing tax extension 2012 Current plans call for HAMP to continue accepting new borrowers through the end of 2013. Filing tax extension 2012 The Internal Revenue Service (Service) is providing this guidance to address the tax consequences for borrowers (HAMP-PRA borrowers) who are participating in the PRA and the reporting obligations for participating mortgage loan holders and servicers. Filing tax extension 2012 SECTION 2. Filing tax extension 2012 BACKGROUND—HAMP AND THE HAMP PRINCIPAL REDUCTION ALTERNATIVE . Filing tax extension 2012 01 To help distressed borrowers lower their monthly mortgage payments, Treasury and HUD established HAMP for mortgage loans that are not owned or guaranteed by the Federal National Mortgage Association (Fannie Mae) or the Federal Home Loan Mortgage Corporation (Freddie Mac). Filing tax extension 2012 A description of the program can be found at www. Filing tax extension 2012 makinghomeaffordable. Filing tax extension 2012 gov. Filing tax extension 2012 . Filing tax extension 2012 02 Under HAMP, a participating loan servicer, acting on behalf of the mortgage loan holder, must consider a sequence of modification steps for each eligible borrower’s mortgage loan until the borrower’s monthly payment is reduced to a monthly payment amount determined under the HAMP guidelines. Filing tax extension 2012 These steps include a reduction in the mortgage loan’s interest rate, an extension of the mortgage loan’s term, and a reduction in the mortgage loan’s principal balance. Filing tax extension 2012 . Filing tax extension 2012 03 In some cases, the unpaid principal balance of the modified mortgage loan is divided into (1) an amount that bears stated interest and that is used to calculate the borrower’s new monthly mortgage payment (the “Non-forbearance Portion”), and (2) a forbearance amount, which does not bear stated interest and on which periodic payments of stated principal are not required. Filing tax extension 2012 The stated principal of the forbearance amount is due upon the earliest of the borrower’s transfer of the property, payoff of the balance on the Non-forbearance Portion of the mortgage loan, or maturity of the mortgage loan. Filing tax extension 2012 However, as noted in section 2. Filing tax extension 2012 06 of this revenue procedure, a HAMP-PRA borrower sometimes may not have to pay all or a portion of the forbearance amount. Filing tax extension 2012 (The forbearance amount associated with a HAMP-PRA principal reduction is called the “PRA Forbearance Amount. Filing tax extension 2012 ”) . Filing tax extension 2012 04 If a mortgage loan is being considered for a HAMP modification and the amount owed on the mortgage loan is greater than 115 percent of the value of the property, then the servicer must consider whether principal reduction under PRA should be used as part of the HAMP modification. Filing tax extension 2012 . Filing tax extension 2012 05 The first step toward a HAMP modification is a trial period plan, in which the borrower’s monthly mortgage payment is set at a monthly payment amount determined under the HAMP guidelines. Filing tax extension 2012 The trial period plan effective date is the due date for the first of the reduced payments that are to be made under the trial period plan. Filing tax extension 2012 (It is the first day of either the first or the second month after the servicer transmits the trial period notice to the borrower. Filing tax extension 2012 ) In general, the trial period is three months, and, during this period, the borrower must satisfy certain conditions before the changes to the terms of the mortgage loan become permanent (the “Trial Period Conditions”). Filing tax extension 2012 Specifically, depending on the borrower’s trial period payment history, the borrower’s compliance with HAMP and servicer guidelines, and his or her satisfaction of all other Trial Period Conditions, the borrower will be offered a permanent modification of the terms of the mortgage loan, including monthly mortgage payments that are lower than those under the old mortgage loan. Filing tax extension 2012 Until the effective date of a permanent modification, the terms of the existing mortgage loan continue to apply. Filing tax extension 2012 . Filing tax extension 2012 06 After the mortgage loan is permanently modified under HAMP, if the modified mortgage loan is in good standing on the first, second, or third annual anniversary of the trial period plan effective date (the “Three-year Period”), the servicer must reduce the unpaid principal balance of the mortgage loan on the respective anniversary date by one-third of the initial PRA Forbearance Amount. Filing tax extension 2012 (The servicer allocates the entire reduction to the remaining PRA Forbearance Amount. Filing tax extension 2012 ) In general, if a HAMP-PRA borrower’s mortgage loan is in good standing and if the HAMP-PRA borrower pays in full the Non-forbearance Portion of the mortgage loan prior to the reduction of the entire PRA Forbearance Amount, the servicer must reduce the remaining outstanding principal balance of the mortgage loan by the remaining PRA Forbearance Amount. Filing tax extension 2012 . Filing tax extension 2012 07 In connection with every HAMP loan modification, the HAMP program administrator (acting on behalf of the federal government) provides incentives to the borrower, the servicer, and the investor (that is, the holder of the mortgage loan). Filing tax extension 2012 If a HAMP loan modification includes a PRA principal reduction, the HAMP program administrator makes additional incentive payments to the investor. Filing tax extension 2012 These additional incentives are called “PRA Investor Incentive Payments” and are generally spread over three years. Filing tax extension 2012 The size of the PRA Investor Incentive Payments depends on the amount of principal reduced, the loan-to-value ratio at the time of the HAMP modification, and the loan’s payment history before the modification. Filing tax extension 2012 The PRA Investor Incentive Payments range from 18 to 63 percent of the principal amounts reduced. Filing tax extension 2012 For purposes of this revenue procedure, the excess of the initial PRA Forbearance Amount of a mortgage loan over the aggregate PRA Investor Incentive Payments scheduled to be paid with respect to that loan is called the “PRA Adjusted Forbearance Amount. Filing tax extension 2012 ” . Filing tax extension 2012 08 A PRA Investor Incentive Payment is earned by the investor on each date on which the servicer reduces the unpaid principal balance of the mortgage loan by a portion of the PRA Forbearance Amount (generally, on the first three annual anniversaries of the trial period plan effective date). Filing tax extension 2012 . Filing tax extension 2012 09 If a HAMP-PRA borrower’s early payment in full of the Non-forbearance Portion of the mortgage loan accelerates the reduction of the remaining PRA Forbearance Amount (described above in section 2. Filing tax extension 2012 06 of this revenue procedure), the remaining PRA Investor Incentive Payments from the HAMP program administrator are also accelerated. Filing tax extension 2012 . Filing tax extension 2012 10 If, prior to completion of the Three-year Period, a mortgage loan ceases to be in good standing because of the HAMP-PRA borrower’s payment history, then the remaining PRA Forbearance Amount is not further reduced and is due when the HAMP-PRA borrower transfers the property, the HAMP-PRA borrower refinances, or otherwise pays off the Non-forbearance Portion of the mortgage loan, or the mortgage loan matures. Filing tax extension 2012 SECTION 3. Filing tax extension 2012 BACKGROUND—APPLICABLE PROVISIONS OF LAW . Filing tax extension 2012 01 Under § 61 of the Internal Revenue Code, except as otherwise provided in subtitle A, gross income means all income from whatever source derived, including income from discharge of indebtedness. Filing tax extension 2012 See § 61(a)(12). Filing tax extension 2012 . Filing tax extension 2012 02 Under § 1. Filing tax extension 2012 1001-3 of the Income Tax Regulations, if a debt instrument undergoes a significant modification, then the modification results in an exchange of the original debt instrument for the modified debt instrument. Filing tax extension 2012 In general, an agreement to change a term of a debt instrument is a modification at the time the borrower and holder enter into the agreement, even if the change in term is not immediately effective. Filing tax extension 2012 However, if the change is conditioned on reasonable closing conditions, a modification occurs on the closing date of the agreement. Filing tax extension 2012 See § 1. Filing tax extension 2012 1001-3(c)(6). Filing tax extension 2012 . Filing tax extension 2012 03 Under § 108(e)(10), in the case of a debt-for-debt exchange (including a deemed exchange under § 1. Filing tax extension 2012 1001-3), the borrower is treated as having satisfied the original debt instrument with an amount of money equal to the issue price of the new debt instrument. Filing tax extension 2012 If the amount of debt satisfied in this manner exceeds that issue price, the borrower realizes discharge of indebtedness income on the exchange. Filing tax extension 2012 See also § 1. Filing tax extension 2012 61-12(c). Filing tax extension 2012 . Filing tax extension 2012 04 The issue price of a non-publicly traded debt instrument issued for non-publicly traded property generally reflects the amount of principal that the borrower is required to pay to the holder of the instrument. Filing tax extension 2012 If a borrower has the ability to avoid paying certain amounts (including principal) without violating the terms of the instrument, the payment schedule for the instrument is generally determined based on an assumption that the borrower will avoid any requirement to make those payments. Filing tax extension 2012 See, e. Filing tax extension 2012 g. Filing tax extension 2012 , §§ 1. Filing tax extension 2012 1272-1(c)(5) and 1. Filing tax extension 2012 1274-2(d). Filing tax extension 2012 . Filing tax extension 2012 05 Under § 108(a), gross income does not include any amount that but for § 108(a) would be includible in gross income by reason of the discharge (in whole or in part) of a taxpayer’s indebtedness if (1) the indebtedness discharged is qualified principal residence indebtedness that is discharged before January 1, 2014, or (2) the discharge occurs when the taxpayer is insolvent. Filing tax extension 2012 Section 108(a)(1)(E) and 108(a)(1)(B). Filing tax extension 2012 (Although § 108 contains other exclusions as well, this revenue procedure focuses on these two exclusions because they are the most likely to apply to the greatest number of HAMP-PRA borrowers. Filing tax extension 2012 ) . Filing tax extension 2012 06 Under §§ 108(h) and 163(h)(3)(B), qualified principal residence indebtedness is any indebtedness that is incurred by a borrower to buy, build, or substantially improve the borrower’s principal residence and is secured by that residence. Filing tax extension 2012 . Filing tax extension 2012 07 Qualified principal residence indebtedness also includes a loan secured by the borrower’s principal residence that refinances qualified principal residence indebtedness, but only to the extent of the amount of the refinanced indebtedness. Filing tax extension 2012 See §§ 108(h) and 163(h)(3)(B)(i). Filing tax extension 2012 . Filing tax extension 2012 08 The maximum amount of discharged indebtedness that a borrower may exclude from gross income under the qualified principal residence indebtedness exclusion is $2,000,000 ($1,000,000 for a married individual filing a separate return). Filing tax extension 2012 Under § 108(h)(4), if only part of the discharged indebtedness is qualified principal residence indebtedness, then the exclusion applies only to the amount of the discharged indebtedness that exceeds the amount of the loan (determined immediately before the discharge) that is not qualified principal residence indebtedness. Filing tax extension 2012 . Filing tax extension 2012 09 Under § 108(a)(3), the insolvency exclusion applies to the lesser of the amount of the debt discharged or the amount by which the taxpayer is insolvent immediately before the discharge. Filing tax extension 2012 . Filing tax extension 2012 10 Section 108(d)(3) provides that, for purposes of the insolvency exclusion, a taxpayer is insolvent to the extent that the taxpayer’s total liabilities exceed the fair market value of all of the taxpayer’s assets immediately before the discharge of indebtedness. Filing tax extension 2012 Under § 108(a)(2)(C), the qualified principal residence indebtedness exclusion takes precedence over the insolvency exclusion when both exclusions apply to discharged indebtedness, unless the taxpayer elects to apply the insolvency exclusion. Filing tax extension 2012 . Filing tax extension 2012 11 If an amount is excluded from gross income as a discharge of qualified principal residence indebtedness, the taxpayer must reduce the basis of the taxpayer’s principal residence. Filing tax extension 2012 See § 108(h)(1). Filing tax extension 2012 If a discharged amount is excluded from gross income because the taxpayer was insolvent when the discharge occurred, the taxpayer must reduce certain tax attributes (possibly including basis). Filing tax extension 2012 See § 108(b). Filing tax extension 2012 For further discussion of income from the discharge of indebtedness, the qualified principal residence indebtedness exclusion, the insolvency exclusion, and other exclusions from gross income that may apply, see Publication 4681, Canceled Debts, Foreclosures, Repossessions, and Abandonments (for Individuals). Filing tax extension 2012 . Filing tax extension 2012 12 Taxpayers who exclude any discharged amounts from gross income report both the exclusion and the resulting reduction in basis or other tax attributes on Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment). Filing tax extension 2012 See Form 982 instructions and Publication 4681. Filing tax extension 2012 This form is to be filed with the tax return for the taxable year in which the amount is discharged but is excluded from gross income. Filing tax extension 2012 . Filing tax extension 2012 13 Governmental payments made to or on behalf of individuals or other persons are included within the broad definition of gross income under § 61 unless an exception applies. Filing tax extension 2012 See Notice 2003-18, 2003-1 C. Filing tax extension 2012 B. Filing tax extension 2012 699, and Rev. Filing tax extension 2012 Rul. Filing tax extension 2012 79-356, 1979-2 C. Filing tax extension 2012 B. Filing tax extension 2012 28. Filing tax extension 2012 However, if disbursements are made by a governmental unit to individuals in the interest of the general welfare (that is, are generally based on individual or family need) and the disbursements do not represent compensation for services, then the amounts disbursed are excluded from the income of the recipient (general welfare exclusion). Filing tax extension 2012 See Rev. Filing tax extension 2012 Rul. Filing tax extension 2012 2005-46, 2005-2 C. Filing tax extension 2012 B. Filing tax extension 2012 120, and Rev. Filing tax extension 2012 Rul. Filing tax extension 2012 75-246, 1975-1 C. Filing tax extension 2012 B. Filing tax extension 2012 24. Filing tax extension 2012 . Filing tax extension 2012 14 Under § 451 and § 1. Filing tax extension 2012 451-1(a), a taxpayer that uses the cash receipts and disbursements method of accounting includes income in gross income when the taxpayer actually or constructively receives the income. Filing tax extension 2012 . Filing tax extension 2012 15 Section 6041 requires every person engaged in a trade or business (including the United States and its agencies) to (1) file an information return (Form 1099-MISC, Miscellaneous Income, is used for this purpose) for each calendar year in which the person makes, in the course of its trade or business, payments to another person of fixed or determinable income aggregating $600 or more, and (2) furnish a copy of the information return to that other person. Filing tax extension 2012 See § 6041(a) and (d) and § 1. Filing tax extension 2012 6041-1(a)(1) and (b). Filing tax extension 2012 . Filing tax extension 2012 16 Section 6050P requires applicable entities (including the United States and its agencies, financial entities, and any organization a significant trade or business of which is the lending of money) to (1) file an information return (Form 1099-C, Cancellation of Debt, is used for this purpose) for each calendar year in which it discharges indebtedness of another person of $600 or more, and (2) furnish a copy of the information return to that other person. Filing tax extension 2012 See § 6050P(a)-(c) and §§ 1. Filing tax extension 2012 6050P-1(a) and 1. Filing tax extension 2012 6050P-2(a) and (d). Filing tax extension 2012 . Filing tax extension 2012 17 Section 6721 imposes penalties with respect to information returns required to be filed with the Service. Filing tax extension 2012 These penalties apply in the case of a failure to timely file an information return, a failure to include all required information on the return, or the inclusion of incorrect information on the return. Filing tax extension 2012 Section 6724(d)(1) includes Forms 1099-MISC and 1099-C in the term “information return. Filing tax extension 2012 ” . Filing tax extension 2012 18 Section 6722 imposes penalties with respect to payee statements required to be furnished to payees. Filing tax extension 2012 These penalties apply in the case of a failure to timely furnish a payee statement, a failure to include all required information on the statement, or the inclusion of incorrect information on the payee statement. Filing tax extension 2012 Section 6724(d)(2) includes in the term “payee statement” copies of Forms 1099-MISC and 1099-C that are required to be furnished to taxpayers. Filing tax extension 2012 SECTION 4. Filing tax extension 2012 FEDERAL INCOME TAX TREATMENT . Filing tax extension 2012 01 Because a HAMP modification with a PRA principal reduction is a significant modification, it results in a deemed debt-for-debt exchange in which the HAMP-PRA borrower satisfies the old mortgage loan by issuing a new one. Filing tax extension 2012 See § 1. Filing tax extension 2012 1001-3. Filing tax extension 2012 At the time of the modification, therefore, under § 108 and this revenue procedure, the HAMP-PRA borrower realizes discharge of indebtedness income equal to any excess of the adjusted issue price of the old mortgage loan (which was satisfied in the deemed exchange) over the issue price of the new (post-modification) mortgage loan. Filing tax extension 2012 See also § 61(a)(12) and § 1. Filing tax extension 2012 61-12(c). Filing tax extension 2012 . Filing tax extension 2012 02 A HAMP-PRA borrower has the ability to avoid payment of the PRA Adjusted Forbearance Amount. Filing tax extension 2012 Because the HAMP-PRA borrower has this ability, that amount should not be taken into account in determining the issue price of the new mortgage loan. Filing tax extension 2012 Because the issue price of the new mortgage loan does not include the PRA Adjusted Forbearance Amount, the PRA Adjusted Forbearance Amount contributes to the excess of the adjusted issue price of the old mortgage loan (which was satisfied in the deemed exchange) over the issue price of the new mortgage loan. Filing tax extension 2012 . Filing tax extension 2012 03 On the other hand, the investor has not given up its right to receive the remainder of the PRA Forbearance Amount, because the HAMP program administrator is expected to make those payments on the HAMP-PRA borrower’s behalf by making the PRA Investor Incentive Payments. Filing tax extension 2012 Because the remainder of the PRA Forbearance Amount is payable in this manner, that remainder is included in the issue price of the new mortgage loan. Filing tax extension 2012 . Filing tax extension 2012 04 The Trial Period Conditions are reasonable closing conditions that must be satisfied before the changes to the terms of the mortgage loan become permanent. Filing tax extension 2012 Therefore, for purposes of § 1. Filing tax extension 2012 1001-3, the date of the modification is the date of the permanent modification. Filing tax extension 2012 . Filing tax extension 2012 05 Unless an exclusion applies, the HAMP-PRA borrower includes in gross income the discharge of indebtedness income described in section 4. Filing tax extension 2012 01 of this revenue procedure for the taxable year in which the permanent modification occurs. Filing tax extension 2012 Under certain conditions, however, section 6 of this revenue procedure permits a borrower to report the discharge of indebtedness under HAMP-PRA over the Three-year Period. Filing tax extension 2012 The qualified principal residence indebtedness exclusion under § 108(a)(1)(E) and the insolvency exclusion under § 108(a)(1)(B) are two exclusions that may apply to the discharge. Filing tax extension 2012 . Filing tax extension 2012 06 The PRA Investor Incentive Payment is treated as a payment on the mortgage loan by the HAMP program administrator on behalf of the HAMP-PRA borrower. Filing tax extension 2012 . Filing tax extension 2012 07 To the extent that the HAMP-PRA borrower uses the property as the HAMP-PRA borrower’s principal residence or the property is occupied by the HAMP-PRA borrower’s legal dependent, parent, or grandparent without rent being charged or collected, the HAMP-PRA borrower excludes from his or her gross income under the general welfare exclusion the PRA Investor Incentive Payments that the HAMP program administrator makes to the investor in the mortgage loan. Filing tax extension 2012 This is consistent with Rev. Filing tax extension 2012 Rul. Filing tax extension 2012 2009-19, 2009-28 I. Filing tax extension 2012 R. Filing tax extension 2012 B. Filing tax extension 2012 111, which addressed the treatment of Pay-for-Performance Success Payments. Filing tax extension 2012 . Filing tax extension 2012 08 To the extent that the HAMP-PRA borrower uses the property as a rental property or holds the property vacant and available for rent, the HAMP-PRA borrower includes PRA Investor Incentive Payments in gross income. Filing tax extension 2012 If the HAMP-PRA borrower uses the cash receipts and disbursements method of accounting, then the HAMP-PRA borrower includes a PRA Investor Incentive Payment in gross income in the taxable year in which it is applied as a payment on the HAMP-PRA borrower’s mortgage loan. Filing tax extension 2012 . Filing tax extension 2012 09 As described in section 2. Filing tax extension 2012 09 of this revenue procedure, if a HAMP-PRA borrower pays in full the Non-forbearance Portion of the mortgage loan while the loan is in good standing and prior to completion of the Three-year Period, that payment accelerates both the reduction in the remaining PRA Forbearance Amount and the PRA Investor Incentive Payments from the HAMP program administrator. Filing tax extension 2012 To the extent that the HAMP-PRA borrower is described in section 4. Filing tax extension 2012 07 of this revenue procedure, the HAMP-PRA borrower excludes from his or her gross income under the general welfare exclusion the accelerated PRA Investor Incentive Payments. Filing tax extension 2012 To the extent that the HAMP-PRA borrower is described in section 4. Filing tax extension 2012 08 of this revenue procedure, the HAMP-PRA borrower includes in income in the year of the acceleration the remaining amount of the PRA Investor Incentive Payment. Filing tax extension 2012 SECTION 5. Filing tax extension 2012 INFORMATION-REPORTING OBLIGATIONS . Filing tax extension 2012 01 Under § 6050P, the investor is required to file a Form 1099-C with respect to a borrower who realizes discharge of indebtedness of $600 or more. Filing tax extension 2012 A copy of this form is required to be furnished to the borrower. Filing tax extension 2012 . Filing tax extension 2012 02 As stated in sections 4. Filing tax extension 2012 01 and 4. Filing tax extension 2012 04 of this revenue procedure, the HAMP-PRA discharge of indebtedness is realized at the time of the permanent modification of the mortgage loan. Filing tax extension 2012 . Filing tax extension 2012 03 An investor is an applicable entity that is required under § 1. Filing tax extension 2012 6050P-1 and this revenue procedure to issue a Form 1099-C for discharge of indebtedness. Filing tax extension 2012 Under § 1. Filing tax extension 2012 6050P-1(b)(2)(F), the permanent modification of a mortgage loan is an identifiable event. Filing tax extension 2012 Identifiable events determine when Forms 1099-C have to be issued. Filing tax extension 2012 Thus, the Form 1099-C is issued for the calendar year in which the permanent mortgage loan modification occurs. Filing tax extension 2012 This rule under § 1. Filing tax extension 2012 6050P-1(b)(2)(F) applies even if, under section 6 of this revenue procedure, the HAMP-PRA borrower chooses to treat the HAMP-PRA discharge as being realized at the times when the unpaid principal balance of the new mortgage loan is reduced. Filing tax extension 2012 . Filing tax extension 2012 04 The investor (or the loan servicer acting on behalf of the investor) reports the full amount of the discharge on the Form 1099-C regardless of whether some or all of the amount is excludible from income under the qualified principal residence indebtedness exclusion, the insolvency exclusion, or any other exclusion that may apply. Filing tax extension 2012 That discharged amount will generally be the PRA Adjusted Forbearance Amount (which does not include the amounts expected to be satisfied by PRA Investor Incentive Payments). Filing tax extension 2012 . Filing tax extension 2012 05 To the extent that PRA Investor Incentive Payments are made on behalf of a HAMP-PRA borrower who is described in section 4. Filing tax extension 2012 07 of this revenue procedure, the PRA Investor Incentive Payments are excluded from the gross income of the HAMP-PRA borrower, and thus they are not fixed or determinable income to the HAMP-PRA borrower. Filing tax extension 2012 Under § 6041, these payments are not subject to information reporting. Filing tax extension 2012 See Notice 2011-14, 2011-11 I. Filing tax extension 2012 R. Filing tax extension 2012 B. Filing tax extension 2012 544, 546. Filing tax extension 2012 . Filing tax extension 2012 06 To the extent that PRA Investor Incentive Payments are made on behalf of a HAMP-PRA borrower who is described in section 4. Filing tax extension 2012 08 of this revenue procedure, the PRA Investor Incentive Payments are includible in gross income as fixed or determinable income in the taxable year required by the HAMP-PRA borrower’s method of accounting. Filing tax extension 2012 The payment is subject to the information reporting requirements of § 6041, as described in section 3. Filing tax extension 2012 15 of this revenue procedure. Filing tax extension 2012 Accordingly, the HAMP program administrator is required to issue a Form 1099-MISC reporting the PRA Investor Incentive Payment. Filing tax extension 2012 SECTION 6. Filing tax extension 2012 HAMP-PRA BORROWERS’ REPORTING OF DISCHARGES OF INDEBTEDNESS UNDER HAMP-PRA . Filing tax extension 2012 01 In general. Filing tax extension 2012 The HAMP-PRA program began in the last quarter of 2010, and since that time there has been uncertainty about whether the amount of the discharge of indebtedness should be reported in the year of the permanent modification or over the Three-year Period (when the unpaid principal balance on the new mortgage loan is reduced). Filing tax extension 2012 As a result, some HAMP-PRA borrowers have been reporting the discharge of indebtedness under HAMP-PRA over the Three-year Period. Filing tax extension 2012 Given the temporary nature of the program and the issuance of this guidance after participation in the program has begun, in the interests of equitable and sound tax administration, HAMP-PRA borrowers may report discharges of indebtedness under HAMP-PRA under the rules in this section 6. Filing tax extension 2012 A HAMP-PRA borrower may choose to report discharges of indebtedness under HAMP-PRA pursuant to the rules in this section 6 only if the borrower applies the same borrower option under section 6. Filing tax extension 2012 02 of this revenue procedure consistently to the taxable year of the permanent modification and to all subsequent taxable years. Filing tax extension 2012 Thus, a HAMP-PRA borrower may not choose a borrower option under section 6. Filing tax extension 2012 02 of this revenue procedure if a statute of limitations has expired for any of the taxable years that are necessary for consistent application of that option. Filing tax extension 2012 . Filing tax extension 2012 02 HAMP-PRA borrower options. Filing tax extension 2012 A HAMP-PRA borrower may treat the HAMP-PRA discharge as being realized in either of the following ways— (1) One hundred percent of the PRA Adjusted Forbearance Amount at the time of the permanent modification; or (2) One third of the PRA Adjusted Forbearance Amount on each of the first three annual anniversaries of the trial period plan effective date (described in section 2. Filing tax extension 2012 06 of this revenue procedure), when, as required by the terms of the new mortgage loan, the servicer reduces the unpaid principal balance of the new mortgage loan. Filing tax extension 2012 If some or all of the reduction in the unpaid principal balance is accelerated (as described in section 2. Filing tax extension 2012 06 of this revenue procedure) because the HAMP-PRA borrower prepays the Non-forbearance Portion of the mortgage loan, then the HAMP-PRA discharge represented by the amount of the reduction that was accelerated is treated as being realized at the time of the accelerated reduction. Filing tax extension 2012 . Filing tax extension 2012 03 HAMP-PRA borrowers who choose to realize the HAMP-PRA discharge at the time of the permanent modification. Filing tax extension 2012 (1) If a HAMP-PRA borrower chooses to treat the HAMP-PRA discharge as being realized at the time of the permanent modification, then for the taxable year in which the permanent modification occurs, the HAMP-PRA borrower reports on Form 982 the amount, if any, of the discharge that is excluded from gross income and includes in gross income any remaining discharge. Filing tax extension 2012 (2) If a HAMP-PRA borrower’s mortgage loan was permanently modified under HAMP in 2010 or 2011, and if the borrower was reporting the discharge of indebtedness using the method described in section 6. Filing tax extension 2012 02(2) of this revenue procedure, then the borrower may change to reporting the discharge of indebtedness using the method described in section 6. Filing tax extension 2012 02(1) of this revenue procedure by filing a 2012 Form 982 with the borrower’s timely filed (with extensions) 2012 income tax return. Filing tax extension 2012 This section 6. Filing tax extension 2012 03(2) applies only if the change to reporting the discharge using the method described in section 6. Filing tax extension 2012 02(1) of this revenue procedure does not change the borrower’s federal income tax liability (including any change in federal income tax liability due to a change in basis or tax attributes (under § 108(h)(1) or § 108(b))) for any taxable year prior to the borrower’s 2012 taxable year. Filing tax extension 2012 To make this change, the borrower must— (i) Compute the amount of discharge of indebtedness that would be included in income under § 61(a)(12) or excluded from gross income under § 108, basing the computation of the discharge on the facts as of the year of the permanent modification; and (ii) Report on a 2012 Form 982 the reduction in basis or tax attributes (under § 108(h)(1) or § 108(b)) due to the permanent modification that the borrower would have reported on the Form 982 for the taxable year of the permanent modification, minus any reductions due to the permanent modification that the borrower actually reported on Forms 982 for taxable years prior to 2012. Filing tax extension 2012 (3) Example. Filing tax extension 2012 The following example illustrates the application of section 6. Filing tax extension 2012 03(2) of this revenue procedure. Filing tax extension 2012 In 2010, B’s basis in B’s principal residence was $330,000. Filing tax extension 2012 In 2010, B’s mortgage loan on the principal residence is permanently modified under HAMP-PRA. Filing tax extension 2012 B realized $30,000 of cancellation of indebtedness from the permanent modification, all of which qualifies for the exclusion from income for qualified principal residence indebtedness under § 108(a)(1)(E). Filing tax extension 2012 The trial period plan effective date also fell in 2010. Filing tax extension 2012 B’s federal income tax return for 2010 was consistent with B’s reporting this discharge of indebtedness using the method described in section 6. Filing tax extension 2012 02(2) of this revenue procedure. Filing tax extension 2012 That is, B’s 2010 return did not include income from discharge of indebtedness under HAMP-PRA, nor did the return contain a Form 982 reporting exclusion of any such discharge of indebtedness. Filing tax extension 2012 The next year, B reported on line 10(b) of the 2011 Form 982 that B filed with B’s 2011 federal income tax return a $10,000 reduction in basis in the principal residence. Filing tax extension 2012 For 2012, B chooses to change to reporting the discharge of indebtedness using the method described in section 6. Filing tax extension 2012 02(1) of this revenue procedure. Filing tax extension 2012 Thus, B files a 2012 Form 982 with B’s timely filed (including extensions) 2012 federal income tax return, and on line 10(b) of that form, B reports a $20,000 basis reduction in the principal residence ($30,000 basis reduction that B would have excluded from income in 2010 using the method described in section 6. Filing tax extension 2012 02(1) of this revenue procedure, minus the $10,000 basis reduction that B reported on B’s 2011 Form 982). Filing tax extension 2012 (4) If a HAMP-PRA borrower reports the entire HAMP-PRA discharge using the method described in section 6. Filing tax extension 2012 02(1) of this revenue procedure, and if that HAMP-PRA borrower’s mortgage loan ceases to be in good standing during the Three-year Period as described in section 2. Filing tax extension 2012 10 of this revenue procedure, then some or all of the anticipated reductions in the PRA Adjusted Forbearance Amount will not take place. Filing tax extension 2012 Because the amount of these anticipated reductions was not included in determining the issue price of the new mortgage loan that, pursuant to § 1. Filing tax extension 2012 1001-3, the HAMP-PRA borrower is deemed to issue in satisfaction of the old mortgage loan, the issue price of the new mortgage loan was understated. Filing tax extension 2012 Under these circumstances, the discharge of indebtedness income determined as of the date of the permanent modification will have been overstated. Filing tax extension 2012 (5) The Service will not challenge a HAMP-PRA borrower who is described in section 6. Filing tax extension 2012 03(4) of this revenue procedure and who takes the following corrective measures: (i) If a HAMP-PRA borrower included any of the discharge of indebtedness in gross income, the HAMP-PRA borrower may file an amended return that does not include the amount of the discharge of indebtedness that was previously reported as gross income but that, because of the HAMP-PRA borrower’s failure to keep the new mortgage loan in good standing, was not ultimately discharged. Filing tax extension 2012 The amended return should be for the taxable year in which the income was included (that is, the year of the permanent modification), provided the applicable statute of limitations remains open for that taxable year. Filing tax extension 2012 (ii) If the HAMP-PRA borrower did not include any of the discharge of indebtedness in gross income (that is, if the HAMP-PRA borrower excluded all of it), the HAMP-PRA borrower may file a new Form 982 that the Service will treat as superseding the earlier Form 982. Filing tax extension 2012 The new Form 982 will reflect the revised reduction in basis or in tax attributes (under § 108(h)(1) or § 108(b)). Filing tax extension 2012 The new Form 982 should be the Form 982 for the year of the permanent modification and should be filed with the return for the taxable year in which the HAMP-PRA borrower’s mortgage loan ceased to be in good standing. Filing tax extension 2012 . Filing tax extension 2012 04 HAMP-PRA borrowers who choose to treat the HAMP-PRA discharge as being realized on the dates on which the unpaid principal balance of the mortgage loan is reduced. Filing tax extension 2012 (1) If a HAMP-PRA borrower chooses to realize the HAMP-PRA discharge at the times that the unpaid principal balance on the new mortgage loan is reduced, instead of at the time of the permanent modification, then the HAMP-PRA borrower’s federal income tax returns for the taxable year that contains the permanent modification and for the subsequent taxable years must not treat any of the discharge as being realized at the time of the permanent modification and must treat the entire HAMP-PRA discharge as being realized in the amounts—and at the times—of the reductions in the unpaid principal balance. Filing tax extension 2012 Except as described in the last sentence of this paragraph, therefore, the income tax return for the year of the permanent modification must include no gross income from—nor report on Form 982 an exclusion of—any amount of the HAMP-PRA discharge. Filing tax extension 2012 Instead, the HAMP-PRA discharge is included in gross income (or is reported on Form 982 as excluded from gross income) in the subsequent years in which the unpaid principal balance is reduced. Filing tax extension 2012 If the first such reduction occurs in the year of the permanent modification, however, then the amount of any such reduction is reflected as an inclusion or exclusion on the federal income tax return for that year. Filing tax extension 2012 (2) A HAMP-PRA borrower who has been using the method described in section 6. Filing tax extension 2012 02(1) of this revenue procedure may change to the method described in section 6. Filing tax extension 2012 02(2) but must comply with the consistency and open-year requirements described in section 6. Filing tax extension 2012 01 of this revenue procedure. Filing tax extension 2012 SECTION 7. Filing tax extension 2012 PENALTY RELIEF FOR 2012 . Filing tax extension 2012 01 The Service will not assert penalties under § 6721 or § 6722 against an investor for failing to timely file and furnish a 2012 Form 1099-C as required by section 5. Filing tax extension 2012 03 through 5. Filing tax extension 2012 04 and section 8. Filing tax extension 2012 02 of this revenue procedure with respect to discharge of indebtedness resulting from HAMP-PRA permanent modifications that take place during calendar year 2012 if the following requirements are satisfied: (1) Not later than February 28, 2013, a statement is sent to the HAMP-PRA borrower containing the following: (a) The HAMP-PRA borrower’s name, address, and taxpayer identification number; and (b) The date and amount of the discharge of indebtedness (as described in sections 4. Filing tax extension 2012 01 through 4. Filing tax extension 2012 04 of this revenue procedure) that is required to be reported for 2012. Filing tax extension 2012 (2) Not later than March 28, 2013, a statement is sent to the Service. Filing tax extension 2012 It must be in the form of a single statement that separately lists for each HAMP-PRA borrower the information specified in section 7. Filing tax extension 2012 01(1) of this revenue procedure. Filing tax extension 2012 The statement should be sent to the Service at the following address: Internal Revenue Service Center Stop 6728AUSC Austin, TX 73301 . Filing tax extension 2012 02 The Service will not assert penalties under § 6721 or § 6722 with respect to any Forms 1099-MISC for 2012 that sections 5. Filing tax extension 2012 06 and 8. Filing tax extension 2012 02 of this revenue procedure require to be filed with the Service and furnished to taxpayers. Filing tax extension 2012 . Filing tax extension 2012 03 Section 8. Filing tax extension 2012 03 and 8. Filing tax extension 2012 04 of this revenue procedure, below, describes penalty relief regarding Forms 1099-C and 1099-MISC for 2010 and 2011. Filing tax extension 2012 SECTION 8. Filing tax extension 2012 SCOPE AND EFFECTIVE DATE . Filing tax extension 2012 01 This revenue procedure applies to all borrowers, investors, and servicers who participate, or have participated, in the HAMP-PRA, regardless of when the permanent modification occurs. Filing tax extension 2012 . Filing tax extension 2012 02 Section 5 of this revenue procedure is effective for Forms 1099-C and 1099-MISC due or filed after January 24, 2013. Filing tax extension 2012 . Filing tax extension 2012 03 Because of the effective date in section 8. Filing tax extension 2012 02 of this revenue procedure, an investor is not subject to penalties under § 6721 or § 6722 on the grounds that the investor failed to timely file and furnish a 2010 or 2011 Form 1099-C as described in section 5. Filing tax extension 2012 03 through 5. Filing tax extension 2012 04 of this revenue procedure (or on the grounds that the investor filed or furnished a 2010 or 2011 Form 1099-C that is inconsistent with section 5. Filing tax extension 2012 03 through 5. Filing tax extension 2012 04 of this revenue procedure), provided that the investor demonstrates a good faith attempt to comply with the requirements of § 6050P and that the failure was not due to willful neglect. Filing tax extension 2012 . Filing tax extension 2012 04 Because of the effective date in section 8. Filing tax extension 2012 02 of this revenue procedure, the Service will not assert penalties under § 6721 or § 6722 on the grounds of a failure to timely file and furnish a 2010 or 2011 Form 1099-MISC, as described in section 5. Filing tax extension 2012 06 of this revenue procedure. Filing tax extension 2012 SECTION 9. Filing tax extension 2012 DRAFTING INFORMATION The principal authors of this revenue procedure are Ronald J. Filing tax extension 2012 Goldstein of the Office of Chief Counsel (Procedure and Administration); Shareen S. Filing tax extension 2012 Pflanz and Sheldon A. Filing tax extension 2012 Iskow of the Office of Chief Counsel (Income Tax and Accounting); and Andrea M. Filing tax extension 2012 Hoffenson of the Office of Chief Counsel (Financial Institutions and Products). Filing tax extension 2012 For further information regarding this revenue procedure, contact Procedure and Administration branch 1 at (202) 622-4910, Income Tax and Accounting branch 4 at (202) 622-4920, or Financial Institutions and Products branch 1 at (202) 622-3920 (not toll-free calls). Filing tax extension 2012 Prev  Up  Next   Home   More Internal Revenue Bulletins