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

How Can I File My 2011 Tax Return

How To Amend A Tax Return 2013I Need Tax Instruction Booklet For 1040ezAmend 2011 Tax Return Online1040 Ez FilingFree 1040ez Filing OnlinePrintable 1040 FormTax Software 2012Turbotax 1040ez OnlineTax For Military1040ez Tax Form And BookletArmy One Source TaxesCan I Efile A 1040xEztaxformMyfreetax.comFiling An Amended Return For 2013Free State TaxsTurbotax Military Edition1040 Ez Tax TableHow Do I Amend My Tax ReturnAmended ReturnCan I Still File My 2010 Taxes1040ez 2010printable Tax Forms2012 Income Tax ReturnsForms To File 2012 TaxesHow To Amend A Tax Return2011 Income Tax ReturnsWww H&rblock ComIrs Form 1040 Ez1040 Ez OnlineFree State Income Tax FormForm 1040ez Instructions1040ez 2012 Fillable Form2012 Tax Preparation Software FreeFreetaxusa 2009State Income Tax Return FormsTaxes 2012 FormsWww Hrblock Com Myreturnstatus1040 Tax Forms 2011How To File Back TaxDownload 1040ez Form

How Can I File My 2011 Tax Return

How can i file my 2011 tax return 14. How can i file my 2011 tax return   Penalties and Interest Table of Contents Penalties and interest may result from any of the following acts. How can i file my 2011 tax return Failing to collect and pay over tax as the collecting agent (see Trust fund recovery penalty, later). How can i file my 2011 tax return Failing to keep adequate records. How can i file my 2011 tax return Failing to file returns. How can i file my 2011 tax return Failing to pay taxes. How can i file my 2011 tax return Filing returns late. How can i file my 2011 tax return Filing false or fraudulent returns. How can i file my 2011 tax return Paying taxes late. How can i file my 2011 tax return Failing to make deposits. How can i file my 2011 tax return Depositing taxes late. How can i file my 2011 tax return Making false statements relating to tax. How can i file my 2011 tax return Failing to register. How can i file my 2011 tax return Misrepresenting that tax is excluded from the price of an article. How can i file my 2011 tax return Failure to register. How can i file my 2011 tax return   The penalty for failure to register if you are required to register, unless due to reasonable cause, is $10,000 for the initial failure, and then $1,000 each day thereafter you fail to register. How can i file my 2011 tax return Claims. How can i file my 2011 tax return   There are criminal penalties for false or fraudulent claims. How can i file my 2011 tax return In addition, any person who files a refund claim, discussed earlier, for an excessive amount (without reasonable cause) may have to pay a penalty. How can i file my 2011 tax return An excessive amount is the amount claimed that is more than the allowable amount. How can i file my 2011 tax return The penalty is the greater of two times the excessive amount or $10. How can i file my 2011 tax return Trust fund recovery penalty. How can i file my 2011 tax return   If you provide taxable communications, air transportation services, or indoor tanning services, you have to collect excise taxes (as discussed earlier) from those persons who pay you for those services. How can i file my 2011 tax return You must pay over these taxes to the U. How can i file my 2011 tax return S. How can i file my 2011 tax return Government. How can i file my 2011 tax return   If you willfully fail to collect or pay over these taxes, or if you evade or defeat them in any way, the trust fund recovery penalty may apply. How can i file my 2011 tax return Willfully means voluntarily, consciously, and intentionally. How can i file my 2011 tax return The trust fund recovery penalty equals 100% of the taxes not collected or not paid over to the U. How can i file my 2011 tax return S. How can i file my 2011 tax return Government. How can i file my 2011 tax return   The trust fund recovery penalty may be imposed on any person responsible for collecting, accounting for, and paying over these taxes. How can i file my 2011 tax return If this person knows that these required actions are not taking place for whatever reason, the person is acting willfully. How can i file my 2011 tax return Paying other expenses of the business instead of paying the taxes is willful behavior. How can i file my 2011 tax return   A responsible person can be an officer or employee of a corporation, a partner or employee of a partnership, or any other person who had responsibility for certain aspects of the business and financial affairs of the employer (or business). How can i file my 2011 tax return This may include accountants, trustees in bankruptcy, members of a board, banks, insurance companies, or sureties. How can i file my 2011 tax return The responsible person could even be another corporation—in other words, anyone who has the duty and the ability to direct, account for, or pay over the money. How can i file my 2011 tax return Having signature power on the business checking account could be a significant factor in determining responsibility. How can i file my 2011 tax return Prev  Up  Next   Home   More Online Publications
Print - Click this link to Print this page

Collection Procedures for Taxpayers Filing and/or Paying Late

The Collection Process and Taxpayer Rights

What do I do if I Cannot File or Pay by the Due Date?

What if the IRS Asks for Financial Information to Determine How Much I Can Pay?

What Options Do I Have if I Cannot Full Pay?

What Can the IRS do if I Will Not File or Pay?

How Can I Prevent Future Tax Liabilities?

Page Last Reviewed or Updated: 27-Jan-2014

The How Can I File My 2011 Tax Return

How can i file my 2011 tax return 2. How can i file my 2011 tax return   Possession Source Income Table of Contents Types of IncomeCompensation for Labor or Personal Services Investment Income Sales or Other Dispositions of Property Scholarships, Fellowships, Grants, Prizes, and Awards Effectively Connected Income In order to determine where to file your return and which form(s) you need to complete, you must determine the source of each item of income you received during the tax year. How can i file my 2011 tax return Income you received from sources within, or that was effectively connected with the conduct of a trade or business within, the relevant possession must be identified separately from U. How can i file my 2011 tax return S. How can i file my 2011 tax return or foreign source income. How can i file my 2011 tax return This chapter discusses the rules for determining if the source of your income is from: American Samoa, The Commonwealth of the Northern Mariana Islands (CNMI), The Commonwealth of Puerto Rico (Puerto Rico), Guam, or The U. How can i file my 2011 tax return S. How can i file my 2011 tax return Virgin Islands (USVI). How can i file my 2011 tax return Generally, the same rules that apply for determining U. How can i file my 2011 tax return S. How can i file my 2011 tax return source income also apply for determining possession source income. How can i file my 2011 tax return However, there are some important exceptions to these rules. How can i file my 2011 tax return Both the general rules and the exceptions are discussed in this chapter. How can i file my 2011 tax return U. How can i file my 2011 tax return S. How can i file my 2011 tax return income rule. How can i file my 2011 tax return   This rule states that income is not possession source income if, under the rules of Internal Revenue Code sections 861–865, it is treated as income: From sources within the United States, or Effectively connected with the conduct of a trade or business within the United States. How can i file my 2011 tax return Table 2-1 shows the general rules for determining whether income is from sources within the United States. How can i file my 2011 tax return Table 2-1. How can i file my 2011 tax return General Rules for Determining U. How can i file my 2011 tax return S. How can i file my 2011 tax return Source of Income Item of Income Factor Determining Source Salaries, wages, and other compensation for labor or personal services Where labor or services performed Pensions Contributions: Where services were performed that earned the pension Investment earnings: Where pension trust is located Interest Residence of payer Dividends Where corporation created or organized Rents Location of property Royalties:   Natural resources Location of property Patents, copyrights, etc. How can i file my 2011 tax return Where property is used Sale of business inventory—purchased Where sold Sale of business inventory—produced Allocation if produced and sold in different locations Sale of real property Location of property Sale of personal property Seller's tax home (but see Special Rules for Gains From Dispositions of Certain Property , later, for exceptions) Sale of natural resources Allocation based on fair market value of product at export terminal. How can i file my 2011 tax return For more information, see Regulations section 1. How can i file my 2011 tax return 863-1(b). How can i file my 2011 tax return Types of Income This section looks at the most common types of income received by individuals, and the rules for determining the source of the income. How can i file my 2011 tax return Generally, the same rules shown in Table 2-1 are used to determine if you have possession source income. How can i file my 2011 tax return Compensation for Labor or Personal Services Income from labor or personal services includes wages, salaries, commissions, fees, per diem allowances, employee allowances and bonuses, and fringe benefits. How can i file my 2011 tax return It also includes income earned by sole proprietors and general partners from providing personal services in the course of their trade or business. How can i file my 2011 tax return Services performed wholly within a relevant possession. How can i file my 2011 tax return   Generally, all pay you receive for services performed in a relevant possession is considered to be from sources within that possession. How can i file my 2011 tax return However, there is an exception for income earned as a member of the U. How can i file my 2011 tax return S. How can i file my 2011 tax return Armed Forces or a civilian spouse. How can i file my 2011 tax return U. How can i file my 2011 tax return S. How can i file my 2011 tax return Armed Forces. How can i file my 2011 tax return   If you are a bona fide resident of a relevant possession, your military service pay will be sourced in that possession even if you perform the services in the United States or another possession. How can i file my 2011 tax return However, if you are not a bona fide resident of a possession, your military service pay will be income from the  United States even if you perform services in a possession. How can i file my 2011 tax return Civilian spouse of active duty member of the U. How can i file my 2011 tax return S. How can i file my 2011 tax return Armed Forces. How can i file my 2011 tax return   If you are a bona fide resident of a U. How can i file my 2011 tax return S. How can i file my 2011 tax return possession and choose to keep that possession as your tax residence under MSRRA when relocating with your servicemember spouse under military orders, the source of income for your labor or personal services is considered to be that possession. How can i file my 2011 tax return Likewise, if your tax residence is in one of the 50 states or the District of Columbia before relocating and you choose to keep it as your tax residence, the source of income for services performed in any of the U. How can i file my 2011 tax return S. How can i file my 2011 tax return possessions is considered to be the United States and, specifically, your state of residence or the District of Columbia. How can i file my 2011 tax return Services performed partly inside and partly outside a relevant possession. How can i file my 2011 tax return   If you are an employee and receive compensation for labor or personal services performed both inside and outside the relevant possession, special rules apply in determining the source of the compensation. How can i file my 2011 tax return Compensation (other than certain fringe benefits) is sourced on a time basis. How can i file my 2011 tax return Certain fringe benefits (such as housing and education) are sourced on a geographical basis. How can i file my 2011 tax return   Or, you may be permitted to use an alternative basis to determine the source of compensation. How can i file my 2011 tax return See Alternative basis , later. How can i file my 2011 tax return   If you are self-employed, determine the source of your income for labor or personal services from self-employment on the basis that most correctly reflects the proper source of that income under the facts and circumstances of your particular case. How can i file my 2011 tax return In many cases, the facts and circumstances will call for an apportionment on a time basis as explained next. How can i file my 2011 tax return Time basis. How can i file my 2011 tax return   Use a time basis to figure your compensation for labor or personal services from the relevant possession (other than the fringe benefits discussed later). How can i file my 2011 tax return Do this by multiplying your total compensation (other than the fringe benefits discussed later) by the following fraction:   Number of days you performed  services in the relevant  possession during the year     Total number of days you  performed services during the year           You can use a unit of time less than a day in the above fraction, if appropriate. How can i file my 2011 tax return The time period for which the income is made does not have to be a year. How can i file my 2011 tax return Instead, you can use another distinct, separate, and continuous time period if you can establish to the satisfaction of the IRS that this other period is more appropriate. How can i file my 2011 tax return Example. How can i file my 2011 tax return In 2013, you worked in your employer's office in the United States for 60 days and in the Puerto Rico office for 180 days, earning a total of $80,000 for the year. How can i file my 2011 tax return Your Puerto Rico source income is $60,000, figured as follows. How can i file my 2011 tax return       180 days 240 days × $80,000 = $60,000                 Multi-year compensation. How can i file my 2011 tax return   The source of multi-year compensation is generally determined on a time basis over the period to which the compensation is attributable. How can i file my 2011 tax return Multi-year compensation is compensation that is included in your income in 1 tax year but is attributable to a period that includes 2 or more tax years. How can i file my 2011 tax return You determine the period to which the income is attributable based on the facts and circumstances of your case. How can i file my 2011 tax return For more information on multi-year compensation, see Treasury Decision (T. How can i file my 2011 tax return D. How can i file my 2011 tax return ) 9212 and Regulations section 1. How can i file my 2011 tax return 861-4, 2005-35 I. How can i file my 2011 tax return R. How can i file my 2011 tax return B. How can i file my 2011 tax return 429, available at www. How can i file my 2011 tax return irs. How can i file my 2011 tax return gov/irb/2005-35_IRB/ar14. How can i file my 2011 tax return html. How can i file my 2011 tax return Certain fringe benefits sourced on a geographical basis. How can i file my 2011 tax return   If you received any of the following fringe benefits as compensation for labor or services performed as an employee partly inside and partly outside a relevant possession, you must source that income on a geographical basis. How can i file my 2011 tax return Housing. How can i file my 2011 tax return Education. How can i file my 2011 tax return Local transportation. How can i file my 2011 tax return Tax reimbursement. How can i file my 2011 tax return Hazardous or hardship duty pay. How can i file my 2011 tax return Moving expense reimbursement. How can i file my 2011 tax return For information on determining the source of the fringe benefits listed above, see Regulations section 1. How can i file my 2011 tax return 861-4. How can i file my 2011 tax return Alternative basis. How can i file my 2011 tax return   You can determine the source of your compensation under an alternative basis if you establish to the satisfaction of the IRS that, under the facts and circumstances of your case, the alternative basis more properly determines the source of your income than the time or geographical basis. How can i file my 2011 tax return If you use an alternative basis, you must keep (and have available for inspection) records to document why the alternative basis more properly determines the source of your income. How can i file my 2011 tax return De minimis exception. How can i file my 2011 tax return   There is an exception to the rule for determining the source of income earned in a possession. How can i file my 2011 tax return Generally, you will not have income from a possession if during a tax year you: Are a U. How can i file my 2011 tax return S. How can i file my 2011 tax return citizen or resident, Are not a bona fide resident of that possession, Are not employed by or under contract with an individual, partnership, or corporation that is engaged in a trade or business in that possession, Temporarily perform services in that possession for 90 days or less, and Earned $3,000 or less from such services. How can i file my 2011 tax return This exception began with income earned during your 2008 tax year. How can i file my 2011 tax return Pensions. How can i file my 2011 tax return   Generally, pension income has two components: contributions to the pension plan and the earnings accrued from investing those contributions. How can i file my 2011 tax return The contribution portion is sourced according to where services were performed that earned the pension. How can i file my 2011 tax return The investment earnings portion is sourced according to the location of the pension trust. How can i file my 2011 tax return Example. How can i file my 2011 tax return You are a U. How can i file my 2011 tax return S. How can i file my 2011 tax return citizen who worked in Puerto Rico for a U. How can i file my 2011 tax return S. How can i file my 2011 tax return company. How can i file my 2011 tax return All services were performed in Puerto Rico. How can i file my 2011 tax return Upon retirement you remained in Puerto Rico and began receiving your pension from the U. How can i file my 2011 tax return S. How can i file my 2011 tax return pension trust of your employer. How can i file my 2011 tax return Distributions from the U. How can i file my 2011 tax return S. How can i file my 2011 tax return pension trust must be allocated between (1) contributions, which are Puerto Rico source income, and (2) investment earnings, which are U. How can i file my 2011 tax return S. How can i file my 2011 tax return source income. How can i file my 2011 tax return Investment Income This category includes such income as interest, dividends, rents, and royalties. How can i file my 2011 tax return Interest income. How can i file my 2011 tax return   The source of interest income is generally determined by the residence of the payer. How can i file my 2011 tax return Interest paid by corporations created or organized in a relevant possession (possession corporation) or by individuals who are bona fide residents of a relevant possession is considered income from sources within that possession. How can i file my 2011 tax return   However, there is an exception to this rule if you are a bona fide resident of a relevant possession, receive interest from a corporation created or organized in that possession, and are a shareholder of that corporation who owns, directly or indirectly, at least 10% of the total voting stock of the corporation. How can i file my 2011 tax return See Regulations section 1. How can i file my 2011 tax return 937-2(i) for more information. How can i file my 2011 tax return Dividends. How can i file my 2011 tax return   Generally, dividends paid by a corporation created or organized in a relevant possession will be considered income from sources within that possession. How can i file my 2011 tax return There are additional rules for bona fide residents of a relevant possession who receive dividend income from possession corporations, and who own, directly or indirectly, at least 10% of the voting stock of the corporation. How can i file my 2011 tax return For more information, see Regulations section 1. How can i file my 2011 tax return 937-2(g). How can i file my 2011 tax return Rental income. How can i file my 2011 tax return   Rents from property located in a relevant possession are treated as income from sources within that possession. How can i file my 2011 tax return Royalties. How can i file my 2011 tax return   Royalties from natural resources located in a relevant possession are considered income from sources within that possession. How can i file my 2011 tax return   Also considered possession source income are royalties received for the use of, or for the privilege of using, in a relevant possession, patents, copyrights, secret processes and formulas, goodwill, trademarks, trade brands, franchises, and other like property. How can i file my 2011 tax return Sales or Other Dispositions of Property The source rules for sales or other dispositions of property are varied. How can i file my 2011 tax return The most common situations are discussed below. How can i file my 2011 tax return Real property. How can i file my 2011 tax return   Real property includes land and buildings, and generally anything built on, growing on, or attached to land. How can i file my 2011 tax return The location of the property generally determines the source of income from the sale. How can i file my 2011 tax return For example, if you are a bona fide resident of Guam and sell your home that is located in Guam, the gain on the sale is sourced in Guam. How can i file my 2011 tax return If, however, the home you sold was located in the United States, the gain is U. How can i file my 2011 tax return S. How can i file my 2011 tax return source income. How can i file my 2011 tax return Personal property. How can i file my 2011 tax return   The term “personal property” refers to property (such as machinery, equipment, or furniture) that is not real property. How can i file my 2011 tax return Generally, gain (or loss) from the sale or other disposition is sourced according to the seller's tax home. How can i file my 2011 tax return If personal property is sold by a bona fide resident of a relevant possession, the gain (or loss) from the sale is treated as sourced within that possession. How can i file my 2011 tax return   This rule does not apply to the sale of inventory, intangible property, depreciable personal property, or property sold through a foreign office or fixed place of business. How can i file my 2011 tax return The rules applying to sales of inventory are discussed below. How can i file my 2011 tax return For information on sales of the other types of property mentioned, see Internal Revenue Code section 865. How can i file my 2011 tax return Inventory. How can i file my 2011 tax return   Your inventory is personal property that is stock in trade or that is held primarily for sale to customers in the ordinary course of your trade or business. How can i file my 2011 tax return The source of income from the sale of inventory depends on whether the inventory was purchased or produced. How can i file my 2011 tax return Purchased. How can i file my 2011 tax return   Income from the sale of inventory that you purchased is sourced where you sell the property. How can i file my 2011 tax return Generally, this is where title to the property passes to the buyer. How can i file my 2011 tax return Produced. How can i file my 2011 tax return   Income from the sale of inventory that you produced in a relevant possession and sold outside that possession (or vice versa) is sourced based on an allocation. How can i file my 2011 tax return For information on making the allocation, see Regulations section 1. How can i file my 2011 tax return 863-3(f). How can i file my 2011 tax return Special Rules for Gains From Dispositions of Certain Property There are special rules for gains from dispositions of certain investment property (for example, stocks, bonds, debt instruments, diamonds, and gold) owned by a U. How can i file my 2011 tax return S. How can i file my 2011 tax return citizen or resident alien prior to becoming a bona fide resident of a possession. How can i file my 2011 tax return You are subject to these special rules if you meet both of the following conditions. How can i file my 2011 tax return For the tax year for which the source of the gain must be determined, you are a bona fide resident of the relevant possession. How can i file my 2011 tax return For any of the 10 years preceding that year, you were a citizen or resident alien of the United States (other than a bona fide resident of the relevant possession). How can i file my 2011 tax return If you meet these conditions, gains from the disposition of this property will not be treated as income from sources within the relevant possession for purposes of the Internal Revenue Code. How can i file my 2011 tax return Accordingly, bona fide residents of American Samoa and Puerto Rico, for example, may not exclude the gain on their U. How can i file my 2011 tax return S. How can i file my 2011 tax return tax return. How can i file my 2011 tax return (See chapter 3 for additional filing information. How can i file my 2011 tax return ) With respect to the CNMI, Guam, and the USVI, the gain from the disposition of this property will not meet the requirements for certain tax rules that may allow bona fide residents of those possessions to reduce or obtain a rebate of taxes on income from sources within the relevant possessions. How can i file my 2011 tax return These rules apply to dispositions after April 11, 2005. How can i file my 2011 tax return For details, see Regulations section 1. How can i file my 2011 tax return 937-2(f)(1) and Examples 1 and 2 of section 1. How can i file my 2011 tax return 937-2(k). How can i file my 2011 tax return Example 1. How can i file my 2011 tax return In 2007, Cheryl Jones, a U. How can i file my 2011 tax return S. How can i file my 2011 tax return citizen, lived in the United States and paid $1,000 for 100 shares of stock in the Rose Corporation, a U. How can i file my 2011 tax return S. How can i file my 2011 tax return corporation listed on the New York Stock Exchange. How can i file my 2011 tax return On March 1, 2010, she moved to Puerto Rico and changed her tax home to Puerto Rico on the same date. How can i file my 2011 tax return Cheryl satisfied the presence test in 2010 and, under the year-of-move exception, she was considered a bona fide resident of Puerto Rico for the rest of 2010. How can i file my 2011 tax return On March 1, 2010, the closing value of Cheryl's stock in the Rose Corporation was $2,000. How can i file my 2011 tax return On January 5, 2013, while still a bona fide resident of Puerto Rico, Cheryl sold all her Rose Corporation stock for $7,000. How can i file my 2011 tax return Under the earlier rules, none of Cheryl's $6,000 gain will be treated as income from sources within Puerto Rico. How can i file my 2011 tax return The source rules discussed in the preceding paragraphs supplement, and may apply in conjunction with, an existing special rule. How can i file my 2011 tax return This existing special rule applies if you are a U. How can i file my 2011 tax return S. How can i file my 2011 tax return citizen or resident alien who becomes a bona fide resident of American Samoa, the CNMI, or Guam, and who has gain from the disposition of certain U. How can i file my 2011 tax return S. How can i file my 2011 tax return assets during the 10-year period beginning when you became a bona fide resident. How can i file my 2011 tax return The gain is U. How can i file my 2011 tax return S. How can i file my 2011 tax return source income that generally is subject to U. How can i file my 2011 tax return S. How can i file my 2011 tax return tax if the property is either (1) located in the United States; (2) stock issued by a U. How can i file my 2011 tax return S. How can i file my 2011 tax return corporation or a debt obligation of a U. How can i file my 2011 tax return S. How can i file my 2011 tax return person or of the United States, a state (or political subdivision), or the District of Columbia; or (3) property that has a basis in whole or in part by reference to property described in (1) or (2). How can i file my 2011 tax return See chapter 3 for filing information. How can i file my 2011 tax return Special election. How can i file my 2011 tax return   For dispositions after April 11, 2005, you can choose to treat the part of gain (or loss) attributable to the time you held the property while a bona fide resident of the relevant possession (the possession holding period) as gain (or loss) from sources within that possession. How can i file my 2011 tax return Make the election by reporting the gain attributable to the possession holding period on your income tax return for the year of disposition. How can i file my 2011 tax return This election overrides both of the special rules discussed earlier. How can i file my 2011 tax return   There are two methods for figuring the gain for the possession holding period, one for marketable securities and another for other types of investment property. How can i file my 2011 tax return Marketable securities. How can i file my 2011 tax return   Marketable securities are those actively traded on an established financial market, such as stock in a publicly held corporation. How can i file my 2011 tax return Under the special election, allocate the gain (or loss) by figuring the appreciation separately for your possession and U. How can i file my 2011 tax return S. How can i file my 2011 tax return holding periods. How can i file my 2011 tax return   Your possession holding period begins on the first day you do not have a tax home outside the relevant possession. How can i file my 2011 tax return The gain (or loss) attributable to the possession holding period is the difference in fair market value of the security at the close of the market on the first and last days of this holding period. How can i file my 2011 tax return This is your gain (or loss) that is treated as being from sources within the relevant possession. How can i file my 2011 tax return If you were a bona fide resident of the relevant possession for more than one continuous period, combine the gains (or losses) from each possession holding period. How can i file my 2011 tax return Example 2. How can i file my 2011 tax return Assume the same facts as in Example 1, except that Cheryl makes the special election to allocate the gain between her U. How can i file my 2011 tax return S. How can i file my 2011 tax return and possession holding periods. How can i file my 2011 tax return Cheryl's possession holding period began March 1, 2010, the date her tax home changed to Puerto Rico. How can i file my 2011 tax return Therefore, the portion of gain attributable to her possession holding period is $5,000 ($7,000 sale price – $2,000 closing value on first day of the possession holding period). How can i file my 2011 tax return By reporting $5,000 of her $6,000 gain as Puerto Rico source income on her 2013 Puerto Rico tax return (and the remainder as non-Puerto Rico source income), Cheryl elects to treat that amount as Puerto Rico source income. How can i file my 2011 tax return Other personal property. How can i file my 2011 tax return   For personal property other than marketable securities, use a time-based allocation. How can i file my 2011 tax return Figure the gain (or loss) attributable to the possession holding period by multiplying your total gain (or loss) by the following fraction. How can i file my 2011 tax return      Number of days in the  possession holding period     Total number of days  in your holding period         The result is your gain (or loss) that is treated as being from sources within the relevant possession. How can i file my 2011 tax return Example 3. How can i file my 2011 tax return In addition to the stock in Rose Corporation, Cheryl acquired a 5% interest in the Alder Partnership on January 1, 2009. How can i file my 2011 tax return On March 1, 2010, when she established bona fide residency in Puerto Rico, her partnership interest was not considered a marketable security. How can i file my 2011 tax return On September 16, 2013, while still a bona fide resident of Puerto Rico, Cheryl sold her interest in Alder Partnership for a $100,000 gain. How can i file my 2011 tax return She had owned the interest for a total of 1,720 days. How can i file my 2011 tax return Cheryl's possession holding period (from March 1, 2010, through September 16, 2013) is 1,296 days. How can i file my 2011 tax return The portion of her gain attributable to Puerto Rico is $75,349 ($100,000 x (1,296 Puerto Rico days ÷ 1,720 total days)). How can i file my 2011 tax return By reporting $75,349 of her $100,000 gain as Puerto Rico source income on her 2013 Puerto Rico tax return (and the remainder as non-Puerto Rico source income), Cheryl elects to treat that amount as Puerto Rico source income. How can i file my 2011 tax return Scholarships, Fellowships, Grants, Prizes, and Awards The source of these types of income is generally the residence of the payer, regardless of who actually disburses the funds. How can i file my 2011 tax return Therefore, in order to be possession source income, the payer must be a resident of the relevant possession, such as an individual who is a bona fide resident or a corporation created or organized in that possession. How can i file my 2011 tax return These rules do not apply to amounts paid as salary or other compensation for services. How can i file my 2011 tax return See Compensation for Labor or Personal Services, earlier in this chapter, for the source rules that apply. How can i file my 2011 tax return Effectively Connected Income In limited circumstances, some kinds of income from sources outside the relevant possession must be treated as effectively connected with a trade or business in that possession. How can i file my 2011 tax return These circumstances are listed below. How can i file my 2011 tax return You have an office or other fixed place of business in the relevant possession to which the income can be attributed. How can i file my 2011 tax return That office or place of business is a material factor in producing the income. How can i file my 2011 tax return The income is produced in the ordinary course of the trade or business carried on through that office or other fixed place of business. How can i file my 2011 tax return An office or other fixed place of business is a material factor if it significantly contributes to, and is an essential economic element in, the earning of the income. How can i file my 2011 tax return The three kinds of income from sources outside the relevant possession to which these rules apply are the following. How can i file my 2011 tax return Rents and royalties for the use of, or for the privilege of using, intangible personal property located outside the relevant possession or from any interest in such property. How can i file my 2011 tax return Included are rents or royalties for the use of, or for the privilege of using, outside the relevant possession, patents, copyrights, secret processes and formulas, goodwill, trademarks, trade brands, franchises, and similar properties if the rents or royalties are from the active conduct of a trade or business in the relevant possession. How can i file my 2011 tax return Dividends or interest from the active conduct of a banking, financing, or similar business in the relevant possession. How can i file my 2011 tax return Income, gain, or loss from the sale or exchange outside the relevant possession, through the office or other fixed place of business in the relevant possession, of: Stock in trade, Property that would be included in inventory if on hand at the end of the tax year, or Property held primarily for sale to customers in the ordinary course of business. How can i file my 2011 tax return Item (3) will not apply if you sold the property for use, consumption, or disposition outside the relevant possession and an office or other fixed place of business in a foreign country was a material factor in the sale. How can i file my 2011 tax return Example. How can i file my 2011 tax return Marcy Jackson is a bona fide resident of American Samoa. How can i file my 2011 tax return Her business, which she conducts from an office in American Samoa, is developing and selling specialized computer software. How can i file my 2011 tax return A software purchaser will frequently pay Marcy an additional amount to install the software on the purchaser's operating system and to ensure that the software is functioning properly. How can i file my 2011 tax return Marcy installs the software at the purchaser's place of business, which may be in American Samoa, in the United States, or in another country. How can i file my 2011 tax return The income from selling the software is effectively connected with the conduct of Marcy's business in American Samoa, even though the product's destination may be outside the possession. How can i file my 2011 tax return However, the compensation she receives for installing the software (personal services) outside of American Samoa is not effectively connected with the conduct of her business in the possession—the income is sourced where she performs the services. How can i file my 2011 tax return Prev  Up  Next   Home   More Online Publications