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

Free Tax Calculator 2012

Tax Form For 2011File Tax Extension OnlineDownload Irs Form 1040xFree Tax Software 2011Unemployed Tax FilingMyfreetaxes Com TucsonTaxForm 1040 XCan You File 1040ez Online1040ez On LineHr Block 2005 TaxesCan You File Your 2012 Taxes NowFree Fillable State Tax FormsHow To File 2010 Taxes OnlineFile 2010 Taxes Late1040ez Instruction ManualState Tax FileAmendment FormIrs 2012 Tax Forms 1040W2 Ez FormsTurbotax 2012 Free1040nrFilling Out 1040xIncome Tax Software 2012Form 1040ez 2013Irs Form 10402005 Tax FormsTax Planning Us 2005 TaxesH&r Block Free Online E FileHr Block EfileFile Irs ExtensionTax Act 2012 OnlineTax Form 1040nr1040ez Tax Form 2011FilelateTaxact Login Tax Return Taxact Login PageIrs 1040ez 2013 Form And InstructionsIrs 1040x 2010How To File An Amendment On My TaxesIrs Amended Tax Return

Free Tax Calculator 2012

Free tax calculator 2012 Publication 969 - Introductory Material Table of Contents What's New Reminders IntroductionOrdering forms and publications. Free tax calculator 2012 Tax questions. Free tax calculator 2012 What's New Federal tax benefits for same-sex married couples. Free tax calculator 2012   For federal tax purposes, individuals of the same sex are considered married if they were lawfully married in a state (or foreign country) whose laws authorize the marriage of two individuals of the same sex, even if the state (or foreign country) in which they now live does not recognize same-sex marriage. Free tax calculator 2012 For more information, see Publication 501. Free tax calculator 2012 Health flexible spending arrangements (FSAs). Free tax calculator 2012  The following rules apply to health FSAs for plan years beginning after December 31, 2012. Free tax calculator 2012 Salary reduction contributions to your health FSA cannot be more than $2,500 a year (indexed for inflation). Free tax calculator 2012 Your employer may choose to change your cafeteria plan to allow you to carry over up to $500 of unused amounts remaining at the end of the plan year in a health FSA to be paid or reimbursed for qualified medical expenses incurred during the following plan year. Free tax calculator 2012 For more information, see Balance in an FSA under Flexible Spending Arrangements (FSAs), later. Free tax calculator 2012 Reminders Future Developments. Free tax calculator 2012  For the latest information about developments related to Publication 969, such as legislation enacted after it was published, go to www. Free tax calculator 2012 IRS. Free tax calculator 2012 gov/pub969. Free tax calculator 2012 Photographs of missing children. Free tax calculator 2012  The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. Free tax calculator 2012 Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. Free tax calculator 2012 You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child. Free tax calculator 2012 Introduction Various programs are designed to give individuals tax advantages to offset health care costs. Free tax calculator 2012 This publication explains the following programs. Free tax calculator 2012 Health savings accounts (HSAs). Free tax calculator 2012 Medical savings accounts (Archer MSAs and Medicare Advantage MSAs). Free tax calculator 2012 Health flexible spending arrangements (FSAs). Free tax calculator 2012 Health reimbursement arrangements (HRAs). Free tax calculator 2012 An HSA may receive contributions from an eligible individual or any other person, including an employer or a family member, on behalf of an eligible individual. Free tax calculator 2012 Contributions, other than employer contributions, are deductible on the eligible individual's return whether or not the individual itemizes deductions. Free tax calculator 2012 Employer contributions are not included in income. Free tax calculator 2012 Distributions from an HSA that are used to pay qualified medical expenses are not taxed. Free tax calculator 2012 An Archer MSA may receive contributions from an eligible individual and his or her employer, but not both in the same year. Free tax calculator 2012 Contributions by the individual are deductible whether or not the individual itemizes deductions. Free tax calculator 2012 Employer contributions are not included in income. Free tax calculator 2012 Distributions from an Archer MSA that are used to pay qualified medical expenses are not taxed. Free tax calculator 2012 A Medicare Advantage MSA is an Archer MSA designated by Medicare to be used solely to pay the qualified medical expenses of the account holder who is enrolled in Medicare. Free tax calculator 2012 Contributions can only be made by Medicare. Free tax calculator 2012 The contributions are not included in your income. Free tax calculator 2012 Distributions from a Medicare Advantage MSA that are used to pay qualified medical expenses are not taxed. Free tax calculator 2012 A health FSA may receive contributions from an eligible individual. Free tax calculator 2012 Employers may also contribute. Free tax calculator 2012 Contributions are not includible in income. Free tax calculator 2012 Reimbursements from an FSA that are used to pay qualified medical expenses are not taxed. Free tax calculator 2012 An HRA must receive contributions from the employer only. Free tax calculator 2012 Employees may not contribute. Free tax calculator 2012 Contributions are not includible in income. Free tax calculator 2012 Reimbursements from an HRA that are used to pay qualified medical expenses are not taxed. Free tax calculator 2012 Comments and suggestions. Free tax calculator 2012   We welcome your comments about this publication and your suggestions for future editions. Free tax calculator 2012   You can write to us at the following address: Internal Revenue Service Tax Forms and Publications Division 1111 Constitution Ave. Free tax calculator 2012 NW, IR-6526 Washington, DC 20224   We respond to many letters by telephone. Free tax calculator 2012 Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence. Free tax calculator 2012   You can send your comments from www. Free tax calculator 2012 irs. Free tax calculator 2012 gov/formspubs. Free tax calculator 2012 Click on “More Information” and then on “Comment on Tax Forms and Publications. Free tax calculator 2012 ”   Although we cannot respond individually to each comment received, we do appreciate your feedback and will consider your comments as we revise our tax products. Free tax calculator 2012 Ordering forms and publications. Free tax calculator 2012   Visit www. Free tax calculator 2012 irs. Free tax calculator 2012 gov/formspubs to download forms and publications, call 1-800-TAX-FORM (1-800-829-3676), or write to the address below and receive a response within 10 days after your request is received. Free tax calculator 2012 Internal Revenue Service 1201 N. Free tax calculator 2012 Mitsubishi Motorway Bloomington, IL 61705-6613 Tax questions. Free tax calculator 2012   If you have a tax question, check the information available on IRS. Free tax calculator 2012 gov or call 1-800-829-1040. Free tax calculator 2012 We cannot answer tax questions sent to either of the above addresses. Free tax calculator 2012 Prev  Up  Next   Home   More Online Publications
Español

Your Rights When Disputing a Credit Card Charge

Under the Fair Credit Billing Act, you have the right to dispute charges on your credit card you didn't make, are incorrect, or for goods or services you didn't receive.

  • Send a letter to the creditor within 60 days of the postmark of the bill with the with disputed charge.
  • Include your name and account number, the date and amount of the disputed charge, and a complete explanation of why you are disputing the charge.
  • To ensure it's received, send your letter by certified mail, with a return receipt requested.
  • The creditor or card issuer must acknowledge your letter in writing within 30 days of receiving it and conduct an investigation within 90 days. You do not have to pay the amount in dispute during the investigation.
  • If there was an error, the creditor must credit your account and remove any fees.
  • If the bill is correct, you must be told in writing what you owe and why. You must pay it along with any related finance charges.

If you don't agree with the creditor's decision, file an appeal with the Consumer Financial Protection Bureau (CFPB).

Complaints

To complain about a problem with your credit card company, call the number on the back of your card and or try to resolve it with the Consumer Financial Protection Bureau. If you fail to resolve the issue, ask for the name, address and phone number of its regulatory agency. See the chart of regulators to the best federal or state regulatory agency to contact.

To complain about a credit bureau, contact the CFPB; for complaints about a department store that offers credit, or other Federal Deposit Insurance Corporation (FDIC)-insured financial institution, write to the agency's Consumer Response Center. You may also file a complaint with the FTC.

The Free Tax Calculator 2012

Free tax calculator 2012 13. Free tax calculator 2012   Basis of Property Table of Contents Introduction Useful Items - You may want to see: Cost BasisReal Property Adjusted BasisIncreases to Basis Decreases to Basis Basis Other Than CostProperty Received for Services Taxable Exchanges Involuntary Conversions Nontaxable Exchanges Property Transferred From a Spouse Property Received as a Gift Inherited Property Property Changed From Personal to Business or Rental Use Stocks and Bonds Introduction This chapter discusses how to figure your basis in property. Free tax calculator 2012 It is divided into the following sections. Free tax calculator 2012 Cost basis. Free tax calculator 2012 Adjusted basis. Free tax calculator 2012 Basis other than cost. Free tax calculator 2012 Your basis is the amount of your investment in property for tax purposes. Free tax calculator 2012 Use the basis to figure gain or loss on the sale, exchange, or other disposition of property. Free tax calculator 2012 Also use it to figure deductions for depreciation, amortization, depletion, and casualty losses. Free tax calculator 2012 If you use property for both business or investment purposes and for personal purposes, you must allocate the basis based on the use. Free tax calculator 2012 Only the basis allocated to the business or investment use of the property can be depreciated. Free tax calculator 2012 Your original basis in property is adjusted (increased or decreased) by certain events. Free tax calculator 2012 For example, if you make improvements to the property, increase your basis. Free tax calculator 2012 If you take deductions for depreciation or casualty losses, or claim certain credits, reduce your basis. Free tax calculator 2012 Keep accurate records of all items that affect the basis of your property. Free tax calculator 2012 For more information on keeping records, see chapter 1. Free tax calculator 2012 Useful Items - You may want to see: Publication 15-B Employer's Tax Guide to Fringe Benefits 525 Taxable and Nontaxable Income 535 Business Expenses 537 Installment Sales 544 Sales and Other Dispositions of Assets 550 Investment Income and Expenses 551 Basis of Assets 946 How To Depreciate Property Cost Basis The basis of property you buy is usually its cost. Free tax calculator 2012 The cost is the amount you pay in cash, debt obligations, other property, or services. Free tax calculator 2012 Your cost also includes amounts you pay for the following items: Sales tax, Freight, Installation and testing, Excise taxes, Legal and accounting fees (when they must be capitalized), Revenue stamps, Recording fees, and Real estate taxes (if you assume liability for the seller). Free tax calculator 2012 In addition, the basis of real estate and business assets may include other items. Free tax calculator 2012 Loans with low or no interest. Free tax calculator 2012    If you buy property on a time-payment plan that charges little or no interest, the basis of your property is your stated purchase price minus any amount considered to be unstated interest. Free tax calculator 2012 You generally have unstated interest if your interest rate is less than the applicable federal rate. Free tax calculator 2012   For more information, see Unstated Interest and Original Issue Discount (OID) in Publication 537. Free tax calculator 2012 Real Property Real property, also called real estate, is land and generally anything built on, growing on, or attached to land. Free tax calculator 2012 If you buy real property, certain fees and other expenses you pay are part of your cost basis in the property. Free tax calculator 2012 Lump sum purchase. Free tax calculator 2012   If you buy buildings and the land on which they stand for a lump sum, allocate the cost basis among the land and the buildings. Free tax calculator 2012 Allocate the cost basis according to the respective fair market values (FMVs) of the land and buildings at the time of purchase. Free tax calculator 2012 Figure the basis of each asset by multiplying the lump sum by a fraction. Free tax calculator 2012 The numerator is the FMV of that asset and the denominator is the FMV of the whole property at the time of purchase. Free tax calculator 2012    If you are not certain of the FMVs of the land and buildings, you can allocate the basis according to their assessed values for real estate tax purposes. Free tax calculator 2012 Fair market value (FMV). Free tax calculator 2012   FMV is the price at which the property would change hands between a willing buyer and a willing seller, neither having to buy or sell, and both having reasonable knowledge of all the necessary facts. Free tax calculator 2012 Sales of similar property on or about the same date may be helpful in figuring the FMV of the property. Free tax calculator 2012 Assumption of mortgage. Free tax calculator 2012   If you buy property and assume (or buy the property subject to) an existing mortgage on the property, your basis includes the amount you pay for the property plus the amount to be paid on the mortgage. Free tax calculator 2012 Settlement costs. Free tax calculator 2012   Your basis includes the settlement fees and closing costs you paid for buying the property. Free tax calculator 2012 (A fee for buying property is a cost that must be paid even if you buy the property for cash. Free tax calculator 2012 ) Do not include fees and costs for getting a loan on the property in your basis. Free tax calculator 2012   The following are some of the settlement fees or closing costs you can include in the basis of your property. Free tax calculator 2012 Abstract fees (abstract of title fees). Free tax calculator 2012 Charges for installing utility services. Free tax calculator 2012 Legal fees (including fees for the title search and preparation of the sales contract and deed). Free tax calculator 2012 Recording fees. Free tax calculator 2012 Survey fees. Free tax calculator 2012 Transfer taxes. Free tax calculator 2012 Owner's title insurance. Free tax calculator 2012 Any amounts the seller owes that you agree to pay, such as back taxes or interest, recording or mortgage fees, charges for improvements or repairs, and sales commissions. Free tax calculator 2012   Settlement costs do not include amounts placed in escrow for the future payment of items such as taxes and insurance. Free tax calculator 2012   The following are some of the settlement fees and closing costs you cannot include in the basis of property. Free tax calculator 2012 Casualty insurance premiums. Free tax calculator 2012 Rent for occupancy of the property before closing. Free tax calculator 2012 Charges for utilities or other services related to occupancy of the property before closing. Free tax calculator 2012 Charges connected with getting a loan, such as points (discount points, loan origination fees), mortgage insurance premiums, loan assumption fees, cost of a credit report, and fees for an appraisal required by a lender. Free tax calculator 2012 Fees for refinancing a mortgage. Free tax calculator 2012 Real estate taxes. Free tax calculator 2012   If you pay real estate taxes the seller owed on real property you bought, and the seller did not reimburse you, treat those taxes as part of your basis. Free tax calculator 2012 You cannot deduct them as an expense. Free tax calculator 2012    If you reimburse the seller for taxes the seller paid for you, you can usually deduct that amount as an expense in the year of purchase. Free tax calculator 2012 Do not include that amount in the basis of your property. Free tax calculator 2012 If you did not reimburse the seller, you must reduce your basis by the amount of those taxes. Free tax calculator 2012 Points. Free tax calculator 2012   If you pay points to get a loan (including a mortgage, second mortgage, line of credit, or a home equity loan), do not add the points to the basis of the related property. Free tax calculator 2012 Generally, you deduct the points over the term of the loan. Free tax calculator 2012 For more information on how to deduct points, see chapter 23. Free tax calculator 2012 Points on home mortgage. Free tax calculator 2012   Special rules may apply to points you and the seller pay when you get a mortgage to buy your main home. Free tax calculator 2012 If certain requirements are met, you can deduct the points in full for the year in which they are paid. Free tax calculator 2012 Reduce the basis of your home by any seller-paid points. Free tax calculator 2012 Adjusted Basis Before figuring gain or loss on a sale, exchange, or other disposition of property or figuring allowable depreciation, depletion, or amortization, you must usually make certain adjustments (increases and decreases) to the cost basis or basis other than cost (discussed later) of the property. Free tax calculator 2012 The result is the adjusted basis. Free tax calculator 2012 Increases to Basis Increase the basis of any property by all items properly added to a capital account. Free tax calculator 2012 Examples of items that increase basis are shown in Table 13-1. Free tax calculator 2012 These include the items discussed below. Free tax calculator 2012 Improvements. Free tax calculator 2012   Add to your basis in property the cost of improvements having a useful life of more than 1 year, that increase the value of the property, lengthen its life, or adapt it to a different use. Free tax calculator 2012 For example, improvements include putting a recreation room in your unfinished basement, adding another bathroom or bedroom, putting up a fence, putting in new plumbing or wiring, installing a new roof, or paving your driveway. Free tax calculator 2012 Assessments for local improvements. Free tax calculator 2012   Add to the basis of property assessments for improvements such as streets and sidewalks if they increase the value of the property assessed. Free tax calculator 2012 Do not deduct them as taxes. Free tax calculator 2012 However, you can deduct as taxes assessments for maintenance or repairs, or for meeting interest charges related to the improvements. Free tax calculator 2012 Example. Free tax calculator 2012 Your city changes the street in front of your store into an enclosed pedestrian mall and assesses you and other affected property owners for the cost of the conversion. Free tax calculator 2012 Add the assessment to your property's basis. Free tax calculator 2012 In this example, the assessment is a depreciable asset. Free tax calculator 2012 Decreases to Basis Decrease the basis of any property by all items that represent a return of capital for the period during which you held the property. Free tax calculator 2012 Examples of items that decrease basis are shown in Table 13-1. Free tax calculator 2012 These include the items discussed below. Free tax calculator 2012 Table 13-1. Free tax calculator 2012 Examples of Adjustments to Basis Increases to Basis Decreases to Basis • Capital improvements: • Exclusion from income of   Putting an addition on your home subsidies for energy conservation   Replacing an entire roof measures   Paving your driveway     Installing central air conditioning • Casualty or theft loss deductions   Rewiring your home and insurance reimbursements       • Assessments for local improvements:     Water connections     Extending utility service lines to the property • Postponed gain from the sale of a home   Sidewalks • Alternative motor vehicle credit  (Form 8910)   Roads       • Alternative fuel vehicle refueling     property credit (Form 8911)           • Residential energy credits (Form 5695)       • Casualty losses: • Depreciation and section 179 deduction   Restoring damaged property     • Nontaxable corporate distributions • Legal fees:     Cost of defending and perfecting a title • Certain canceled debt excluded from   Fees for getting a reduction of an assessment income     • Zoning costs • Easements           • Adoption tax benefits Casualty and theft losses. Free tax calculator 2012   If you have a casualty or theft loss, decrease the basis in your property by any insurance proceeds or other reimbursement and by any deductible loss not covered by insurance. Free tax calculator 2012    You must increase your basis in the property by the amount you spend on repairs that restore the property to its pre-casualty condition. Free tax calculator 2012   For more information on casualty and theft losses, see chapter 25. Free tax calculator 2012 Depreciation and section 179 deduction. Free tax calculator 2012   Decrease the basis of your qualifying business property by any section 179 deduction you take and the depreciation you deducted, or could have deducted (including any special depreciation allowance), on your tax returns under the method of depreciation you selected. Free tax calculator 2012   For more information about depreciation and the section 179 deduction, see Publication 946 and the Instructions for Form 4562. Free tax calculator 2012 Example. Free tax calculator 2012 You owned a duplex used as rental property that cost you $40,000, of which $35,000 was allocated to the building and $5,000 to the land. Free tax calculator 2012 You added an improvement to the duplex that cost $10,000. Free tax calculator 2012 In February last year, the duplex was damaged by fire. Free tax calculator 2012 Up to that time, you had been allowed depreciation of $23,000. Free tax calculator 2012 You sold some salvaged material for $1,300 and collected $19,700 from your insurance company. Free tax calculator 2012 You deducted a casualty loss of $1,000 on your income tax return for last year. Free tax calculator 2012 You spent $19,000 of the insurance proceeds for restoration of the duplex, which was completed this year. Free tax calculator 2012 You must use the duplex's adjusted basis after the restoration to determine depreciation for the rest of the property's recovery period. Free tax calculator 2012 Figure the adjusted basis of the duplex as follows: Original cost of duplex $35,000 Addition to duplex 10,000 Total cost of duplex $45,000 Minus: Depreciation 23,000 Adjusted basis before casualty $22,000 Minus: Insurance proceeds $19,700     Deducted casualty loss 1,000     Salvage proceeds 1,300 22,000 Adjusted basis after casualty $-0- Add: Cost of restoring duplex 19,000 Adjusted basis after restoration $19,000 Note. Free tax calculator 2012 Your basis in the land is its original cost of $5,000. Free tax calculator 2012 Easements. Free tax calculator 2012   The amount you receive for granting an easement is generally considered to be proceeds from the sale of an interest in real property. Free tax calculator 2012 It reduces the basis of the affected part of the property. Free tax calculator 2012 If the amount received is more than the basis of the part of the property affected by the easement, reduce your basis in that part to zero and treat the excess as a recognized gain. Free tax calculator 2012   If the gain is on a capital asset, see chapter 16 for information about how to report it. Free tax calculator 2012 If the gain is on property used in a trade or business, see Publication 544 for information about how to report it. Free tax calculator 2012 Exclusion of subsidies for energy conservation measures. Free tax calculator 2012   You can exclude from gross income any subsidy you received from a public utility company for the purchase or installation of an energy conservation measure for a dwelling unit. Free tax calculator 2012 Reduce the basis of the property for which you received the subsidy by the excluded amount. Free tax calculator 2012 For more information about this subsidy, see chapter 12. Free tax calculator 2012 Postponed gain from sale of home. Free tax calculator 2012    If you postponed gain from the sale of your main home under rules in effect before May 7, 1997, you must reduce the basis of the home you acquired as a replacement by the amount of the postponed gain. Free tax calculator 2012 For more information on the rules for the sale of a home, see chapter 15. Free tax calculator 2012 Basis Other Than Cost There are many times when you cannot use cost as basis. Free tax calculator 2012 In these cases, the fair market value or the adjusted basis of the property can be used. Free tax calculator 2012 Fair market value (FMV) and adjusted basis were discussed earlier. Free tax calculator 2012 Property Received for Services If you receive property for your services, include the FMV of the property in income. Free tax calculator 2012 The amount you include in income becomes your basis. Free tax calculator 2012 If the services were performed for a price agreed on beforehand, it will be accepted as the FMV of the property if there is no evidence to the contrary. Free tax calculator 2012 Restricted property. Free tax calculator 2012   If you receive property for your services and the property is subject to certain restrictions, your basis in the property is its FMV when it becomes substantially vested. Free tax calculator 2012 However, this rule does not apply if you make an election to include in income the FMV of the property at the time it is transferred to you, less any amount you paid for it. Free tax calculator 2012 Property is substantially vested when it is transferable or when it is not subject to a substantial risk of forfeiture (you do not have a good chance of losing it). Free tax calculator 2012 For more information, see Restricted Property in Publication 525. Free tax calculator 2012 Bargain purchases. Free tax calculator 2012   A bargain purchase is a purchase of an item for less than its FMV. Free tax calculator 2012 If, as compensation for services, you buy goods or other property at less than FMV, include the difference between the purchase price and the property's FMV in your income. Free tax calculator 2012 Your basis in the property is its FMV (your purchase price plus the amount you include in income). Free tax calculator 2012   If the difference between your purchase price and the FMV is a qualified employee discount, do not include the difference in income. Free tax calculator 2012 However, your basis in the property is still its FMV. Free tax calculator 2012 See Employee Discounts in Publication 15-B. Free tax calculator 2012 Taxable Exchanges A taxable exchange is one in which the gain is taxable or the loss is deductible. Free tax calculator 2012 A taxable gain or deductible loss also is known as a recognized gain or loss. Free tax calculator 2012 If you receive property in exchange for other property in a taxable exchange, the basis of the property you receive is usually its FMV at the time of the exchange. Free tax calculator 2012 Involuntary Conversions If you receive replacement property as a result of an involuntary conversion, such as a casualty, theft, or condemnation, figure the basis of the replacement property using the basis of the converted property. Free tax calculator 2012 Similar or related property. Free tax calculator 2012   If you receive replacement property similar or related in service or use to the converted property, the replacement property's basis is the same as the converted property's basis on the date of the conversion, with the following adjustments. Free tax calculator 2012 Decrease the basis by the following. Free tax calculator 2012 Any loss you recognize on the involuntary conversion. Free tax calculator 2012 Any money you receive that you do not spend on similar property. Free tax calculator 2012 Increase the basis by the following. Free tax calculator 2012 Any gain you recognize on the involuntary conversion. Free tax calculator 2012 Any cost of acquiring the replacement property. Free tax calculator 2012 Money or property not similar or related. Free tax calculator 2012    If you receive money or property not similar or related in service or use to the converted property, and you buy replacement property similar or related in service or use to the converted property, the basis of the replacement property is its cost decreased by the gain not recognized on the conversion. Free tax calculator 2012 Example. Free tax calculator 2012 The state condemned your property. Free tax calculator 2012 The adjusted basis of the property was $26,000 and the state paid you $31,000 for it. Free tax calculator 2012 You realized a gain of $5,000 ($31,000 − $26,000). Free tax calculator 2012 You bought replacement property similar in use to the converted property for $29,000. Free tax calculator 2012 You recognize a gain of $2,000 ($31,000 − $29,000), the unspent part of the payment from the state. Free tax calculator 2012 Your unrecognized gain is $3,000, the difference between the $5,000 realized gain and the $2,000 recognized gain. Free tax calculator 2012 The basis of the replacement property is figured as follows: Cost of replacement property $29,000 Minus: Gain not recognized 3,000 Basis of replacement property $26,000 Allocating the basis. Free tax calculator 2012   If you buy more than one piece of replacement property, allocate your basis among the properties based on their respective costs. Free tax calculator 2012 Basis for depreciation. Free tax calculator 2012   Special rules apply in determining and depreciating the basis of MACRS property acquired in an involuntary conversion. Free tax calculator 2012 For information, see What Is the Basis of Your Depreciable Property? in chapter 1 of Publication 946. Free tax calculator 2012 Nontaxable Exchanges A nontaxable exchange is an exchange in which you are not taxed on any gain and you cannot deduct any loss. Free tax calculator 2012 If you receive property in a nontaxable exchange, its basis is generally the same as the basis of the property you transferred. Free tax calculator 2012 See Nontaxable Trades in chapter 14. Free tax calculator 2012 Like-Kind Exchanges The exchange of property for the same kind of property is the most common type of nontaxable exchange. Free tax calculator 2012 To qualify as a like-kind exchange, the property traded and the property received must be both of the following. Free tax calculator 2012 Qualifying property. Free tax calculator 2012 Like-kind property. Free tax calculator 2012 The basis of the property you receive is generally the same as the adjusted basis of the property you gave up. Free tax calculator 2012 If you trade property in a like-kind exchange and also pay money, the basis of the property received is the adjusted basis of the property you gave up increased by the money you paid. Free tax calculator 2012 Qualifying property. Free tax calculator 2012   In a like-kind exchange, you must hold for investment or for productive use in your trade or business both the property you give up and the property you receive. Free tax calculator 2012 Like-kind property. Free tax calculator 2012   There must be an exchange of like-kind property. Free tax calculator 2012 Like-kind properties are properties of the same nature or character, even if they differ in grade or quality. Free tax calculator 2012 The exchange of real estate for real estate and personal property for similar personal property are exchanges of like-kind property. Free tax calculator 2012 Example. Free tax calculator 2012 You trade in an old truck used in your business with an adjusted basis of $1,700 for a new one costing $6,800. Free tax calculator 2012 The dealer allows you $2,000 on the old truck, and you pay $4,800. Free tax calculator 2012 This is a like-kind exchange. Free tax calculator 2012 The basis of the new truck is $6,500 (the adjusted basis of the old one, $1,700, plus the amount you paid, $4,800). Free tax calculator 2012 If you sell your old truck to a third party for $2,000 instead of trading it in and then buy a new one from the dealer, you have a taxable gain of $300 on the sale (the $2,000 sale price minus the $1,700 adjusted basis). Free tax calculator 2012 The basis of the new truck is the price you pay the dealer. Free tax calculator 2012 Partially nontaxable exchanges. Free tax calculator 2012   A partially nontaxable exchange is an exchange in which you receive unlike property or money in addition to like-kind property. Free tax calculator 2012 The basis of the property you receive is the same as the adjusted basis of the property you gave up, with the following adjustments. Free tax calculator 2012 Decrease the basis by the following amounts. Free tax calculator 2012 Any money you receive. Free tax calculator 2012 Any loss you recognize on the exchange. Free tax calculator 2012 Increase the basis by the following amounts. Free tax calculator 2012 Any additional costs you incur. Free tax calculator 2012 Any gain you recognize on the exchange. Free tax calculator 2012 If the other party to the exchange assumes your liabilities, treat the debt assumption as money you received in the exchange. Free tax calculator 2012 Allocation of basis. Free tax calculator 2012   If you receive like-kind and unlike properties in the exchange, allocate the basis first to the unlike property, other than money, up to its FMV on the date of the exchange. Free tax calculator 2012 The rest is the basis of the like-kind property. Free tax calculator 2012 More information. Free tax calculator 2012   See Like-Kind Exchanges in chapter 1 of Publication 544 for more information. Free tax calculator 2012 Basis for depreciation. Free tax calculator 2012   Special rules apply in determining and depreciating the basis of MACRS property acquired in a like-kind exchange. Free tax calculator 2012 For information, see What Is the Basis of Your Depreciable Property? in chapter 1 of Publication 946. Free tax calculator 2012 Property Transferred From a Spouse The basis of property transferred to you or transferred in trust for your benefit by your spouse is the same as your spouse's adjusted basis. Free tax calculator 2012 The same rule applies to a transfer by your former spouse that is incident to divorce. Free tax calculator 2012 However, for property transferred in trust, adjust your basis for any gain recognized by your spouse or former spouse if the liabilities assumed, plus the liabilities to which the property is subject, are more than the adjusted basis of the property transferred. Free tax calculator 2012 If the property transferred to you is a series E, series EE, or series I U. Free tax calculator 2012 S. Free tax calculator 2012 savings bond, the transferor must include in income the interest accrued to the date of transfer. Free tax calculator 2012 Your basis in the bond immediately after the transfer is equal to the transferor's basis increased by the interest income includible in the transferor's income. Free tax calculator 2012 For more information on these bonds, see chapter 7. Free tax calculator 2012 At the time of the transfer, the transferor must give you the records needed to determine the adjusted basis and holding period of the property as of the date of the transfer. Free tax calculator 2012 For more information about the transfer of property from a spouse, see chapter 14. Free tax calculator 2012 Property Received as a Gift To figure the basis of property you receive as a gift, you must know its adjusted basis to the donor just before it was given to you, its FMV at the time it was given to you, and any gift tax paid on it. Free tax calculator 2012 FMV less than donor's adjusted basis. Free tax calculator 2012   If the FMV of the property at the time of the gift is less than the donor's adjusted basis, your basis depends on whether you have a gain or a loss when you dispose of the property. Free tax calculator 2012 Your basis for figuring gain is the same as the donor's adjusted basis plus or minus any required adjustments to basis while you held the property. Free tax calculator 2012 Your basis for figuring loss is its FMV when you received the gift plus or minus any required adjustments to basis while you held the property. Free tax calculator 2012 See Adjusted Basis , earlier. Free tax calculator 2012 Example. Free tax calculator 2012 You received an acre of land as a gift. Free tax calculator 2012 At the time of the gift, the land had an FMV of $8,000. Free tax calculator 2012 The donor's adjusted basis was $10,000. Free tax calculator 2012 After you received the property, no events occurred to increase or decrease your basis. Free tax calculator 2012 If you later sell the property for $12,000, you will have a $2,000 gain because you must use the donor's adjusted basis at the time of the gift ($10,000) as your basis to figure gain. Free tax calculator 2012 If you sell the property for $7,000, you will have a $1,000 loss because you must use the FMV at the time of the gift ($8,000) as your basis to figure loss. Free tax calculator 2012 If the sales price is between $8,000 and $10,000, you have neither gain nor loss. Free tax calculator 2012 Business property. Free tax calculator 2012   If you hold the gift as business property, your basis for figuring any depreciation, depletion, or amortization deductions is the same as the donor's adjusted basis plus or minus any required adjustments to basis while you hold the property. Free tax calculator 2012 FMV equal to or greater than donor's adjusted basis. Free tax calculator 2012   If the FMV of the property is equal to or greater than the donor's adjusted basis, your basis is the donor's adjusted basis at the time you received the gift. Free tax calculator 2012 Increase your basis by all or part of any gift tax paid, depending on the date of the gift, explained later. Free tax calculator 2012   Also, for figuring gain or loss from a sale or other disposition or for figuring depreciation, depletion, or amortization deductions on business property, you must increase or decrease your basis (the donor's adjusted basis) by any required adjustments to basis while you held the property. Free tax calculator 2012 See Adjusted Basis , earlier. Free tax calculator 2012   If you received a gift during the tax year, increase your basis in the gift (the donor's adjusted basis) by the part of the gift tax paid on it due to the net increase in value of the gift. Free tax calculator 2012 Figure the increase by multiplying the gift tax paid by a fraction. Free tax calculator 2012 The numerator of the fraction is the net increase in value of the gift and the denominator is the amount of the gift. Free tax calculator 2012   The net increase in value of the gift is the FMV of the gift minus the donor's adjusted basis. Free tax calculator 2012 The amount of the gift is its value for gift tax purposes after reduction by any annual exclusion and marital or charitable deduction that applies to the gift. Free tax calculator 2012 Example. Free tax calculator 2012 In 2013, you received a gift of property from your mother that had an FMV of $50,000. Free tax calculator 2012 Her adjusted basis was $20,000. Free tax calculator 2012 The amount of the gift for gift tax purposes was $36,000 ($50,000 minus the $14,000 annual exclusion). Free tax calculator 2012 She paid a gift tax of $7,320 on the property. Free tax calculator 2012 Your basis is $26,076, figured as follows: Fair market value $50,000 Minus: Adjusted basis −20,000 Net increase in value $30,000     Gift tax paid $7,320 Multiplied by ($30,000 ÷ $36,000) × . Free tax calculator 2012 83 Gift tax due to net increase in value $6,076 Adjusted basis of property to your mother +20,000 Your basis in the property $26,076 Note. Free tax calculator 2012 If you received a gift before 1977, your basis in the gift (the donor's adjusted basis) includes any gift tax paid on it. Free tax calculator 2012 However, your basis cannot exceed the FMV of the gift at the time it was given to you. Free tax calculator 2012 Inherited Property Your basis in property you inherited from a decedent, who died before January 1, 2010, or after December 31, 2010, is generally one of the following: The FMV of the property at the date of the decedent's death. Free tax calculator 2012 The FMV on the alternate valuation date if the personal representative for the estate elects to use alternate valuation. Free tax calculator 2012 The value under the special-use valuation method for real property used in farming or a closely held business if elected for estate tax purposes. Free tax calculator 2012 The decedent's adjusted basis in land to the extent of the value excluded from the decedent's taxable estate as a qualified conservation easement. Free tax calculator 2012 If a federal estate tax return does not have to be filed, your basis in the inherited property is its appraised value at the date of death for state inheritance or transmission taxes. Free tax calculator 2012 For more information, see the instructions to Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return. Free tax calculator 2012 Property inherited from a decedent who died in 2010. Free tax calculator 2012   If you inherited property from a decedent who died in 2010, special rules may apply. Free tax calculator 2012 For more information, see Publication 4895, Tax Treatment of Property Acquired From a Decedent Dying in 2010. Free tax calculator 2012 Community property. Free tax calculator 2012   In community property states (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin), husband and wife are each usually considered to own half the community property. Free tax calculator 2012 When either spouse dies, the total value of the community property, even the part belonging to the surviving spouse, generally becomes the basis of the entire property. Free tax calculator 2012 For this rule to apply, at least half the value of the community property interest must be includible in the decedent's gross estate, whether or not the estate must file a return. Free tax calculator 2012 Example. Free tax calculator 2012 You and your spouse owned community property that had a basis of $80,000. Free tax calculator 2012 When your spouse died, half the FMV of the community interest was includible in your spouse's estate. Free tax calculator 2012 The FMV of the community interest was $100,000. Free tax calculator 2012 The basis of your half of the property after the death of your spouse is $50,000 (half of the $100,000 FMV). Free tax calculator 2012 The basis of the other half to your spouse's heirs is also $50,000. Free tax calculator 2012 For more information about community property, see Publication 555, Community Property. Free tax calculator 2012 Property Changed From Personal to Business or Rental Use If you hold property for personal use and then change it to business use or use it to produce rent, you can begin to depreciate the property at the time of the change. Free tax calculator 2012 To do so, you must figure its basis for depreciation at the time of the change. Free tax calculator 2012 An example of changing property held for personal use to business or rental use would be renting out your former personal residence. Free tax calculator 2012 Basis for depreciation. Free tax calculator 2012   The basis for depreciation is the lesser of the following amounts. Free tax calculator 2012 The FMV of the property on the date of the change. Free tax calculator 2012 Your adjusted basis on the date of the change. Free tax calculator 2012 Example. Free tax calculator 2012 Several years ago, you paid $160,000 to have your house built on a lot that cost $25,000. Free tax calculator 2012 You paid $20,000 for permanent improvements to the house and claimed a $2,000 casualty loss deduction for damage to the house before changing the property to rental use last year. Free tax calculator 2012 Because land is not depreciable, you include only the cost of the house when figuring the basis for depreciation. Free tax calculator 2012 Your adjusted basis in the house when you changed its use was $178,000 ($160,000 + $20,000 − $2,000). Free tax calculator 2012 On the same date, your property had an FMV of $180,000, of which $15,000 was for the land and $165,000 was for the house. Free tax calculator 2012 The basis for figuring depreciation on the house is its FMV on the date of the change ($165,000) because it is less than your adjusted basis ($178,000). Free tax calculator 2012 Sale of property. Free tax calculator 2012   If you later sell or dispose of property changed to business or rental use, the basis you use will depend on whether you are figuring gain or loss. Free tax calculator 2012 Gain. Free tax calculator 2012   The basis for figuring a gain is your adjusted basis in the property when you sell the property. Free tax calculator 2012 Example. Free tax calculator 2012 Assume the same facts as in the previous example except that you sell the property at a gain after being allowed depreciation deductions of $37,500. Free tax calculator 2012 Your adjusted basis for figuring gain is $165,500 ($178,000 + $25,000 (land) − $37,500). Free tax calculator 2012 Loss. Free tax calculator 2012   Figure the basis for a loss starting with the smaller of your adjusted basis or the FMV of the property at the time of the change to business or rental use. Free tax calculator 2012 Then make adjustments (increases and decreases) for the period after the change in the property's use, as discussed earlier under Adjusted Basis . Free tax calculator 2012 Example. Free tax calculator 2012 Assume the same facts as in the previous example, except that you sell the property at a loss after being allowed depreciation deductions of $37,500. Free tax calculator 2012 In this case, you would start with the FMV on the date of the change to rental use ($180,000), because it is less than the adjusted basis of $203,000 ($178,000 + $25,000 (land)) on that date. Free tax calculator 2012 Reduce that amount ($180,000) by the depreciation deductions ($37,500). Free tax calculator 2012 The basis for loss is $142,500 ($180,000 − $37,500). Free tax calculator 2012 Stocks and Bonds The basis of stocks or bonds you buy generally is the purchase price plus any costs of purchase, such as commissions and recording or transfer fees. Free tax calculator 2012 If you get stocks or bonds other than by purchase, your basis is usually determined by the FMV or the previous owner's adjusted basis, as discussed earlier. Free tax calculator 2012 You must adjust the basis of stocks for certain events that occur after purchase. Free tax calculator 2012 For example, if you receive additional stock from nontaxable stock dividends or stock splits, reduce your basis for each share of stock by dividing the adjusted basis of the old stock by the number of shares of old and new stock. Free tax calculator 2012 This rule applies only when the additional stock received is identical to the stock held. Free tax calculator 2012 Also reduce your basis when you receive nontaxable distributions. Free tax calculator 2012 They are a return of capital. Free tax calculator 2012 Example. Free tax calculator 2012 In 2011 you bought 100 shares of XYZ stock for $1,000 or $10 a share. Free tax calculator 2012 In 2012 you bought 100 shares of XYZ stock for $1,600 or $16 a share. Free tax calculator 2012 In 2013 XYZ declared a 2-for-1 stock split. Free tax calculator 2012 You now have 200 shares of stock with a basis of $5 a share and 200 shares with a basis of $8 a share. Free tax calculator 2012 Other basis. Free tax calculator 2012   There are other ways to figure the basis of stocks or bonds depending on how you acquired them. Free tax calculator 2012 For detailed information, see Stocks and Bonds under Basis of Investment Property in chapter 4 of Publication 550. Free tax calculator 2012 Identifying stocks or bonds sold. Free tax calculator 2012   If you can adequately identify the shares of stock or the bonds you sold, their basis is the cost or other basis of the particular shares of stocks or bonds. Free tax calculator 2012 If you buy and sell securities at various times in varying quantities and you cannot adequately identify the shares you sell, the basis of the securities you sell is the basis of the securities you acquired first. Free tax calculator 2012 For more information about identifying securities you sell, see Stocks and Bonds under Basis of Investment Property in chapter 4 of Publication 550. Free tax calculator 2012 Mutual fund shares. Free tax calculator 2012   If you sell mutual fund shares you acquired at various times and prices and left on deposit in an account kept by a custodian or agent, you can elect to use an average basis. Free tax calculator 2012 For more information, see Publication 550. Free tax calculator 2012 Bond premium. Free tax calculator 2012   If you buy a taxable bond at a premium and elect to amortize the premium, reduce the basis of the bond by the amortized premium you deduct each year. Free tax calculator 2012 See Bond Premium Amortization in chapter 3 of Publication 550 for more information. Free tax calculator 2012 Although you cannot deduct the premium on a tax-exempt bond, you must amortize the premium each year and reduce your basis in the bond by the amortized amount. Free tax calculator 2012 Original issue discount (OID) on debt instruments. Free tax calculator 2012   You must increase your basis in an OID debt instrument by the OID you include in income for that instrument. Free tax calculator 2012 See Original Issue Discount (OID) in chapter 7 and Publication 1212, Guide To Original Issue Discount (OID) Instruments. Free tax calculator 2012 Tax-exempt obligations. Free tax calculator 2012    OID on tax-exempt obligations is generally not taxable. Free tax calculator 2012 However, when you dispose of a tax-exempt obligation issued after September 3, 1982, and acquired after March 1, 1984, you must accrue OID on the obligation to determine its adjusted basis. Free tax calculator 2012 The accrued OID is added to the basis of the obligation to determine your gain or loss. Free tax calculator 2012 See chapter 4 of Publication 550. Free tax calculator 2012 Prev  Up  Next   Home   More Online Publications