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How To File 1040x Amended Return

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How To File 1040x Amended Return

How to file 1040x amended return 8. How to file 1040x amended return   Dividends and Other Distributions Table of Contents Reminder Introduction Useful Items - You may want to see: General InformationDividends not reported on Form 1099-DIV. How to file 1040x amended return Reporting tax withheld. How to file 1040x amended return Nominees. How to file 1040x amended return Ordinary DividendsQualified Dividends Dividends Used to Buy More Stock Money Market Funds Capital Gain DistributionsBasis adjustment. How to file 1040x amended return Nondividend DistributionsLiquidating Distributions Distributions of Stock and Stock Rights Other DistributionsInformation reporting requirement. How to file 1040x amended return Alternative minimum tax treatment. How to file 1040x amended return How To Report Dividend IncomeInvestment interest deducted. How to file 1040x amended return Reminder Foreign-source income. How to file 1040x amended return  If you are a U. How to file 1040x amended return S. How to file 1040x amended return citizen with dividend income from sources outside the United States (foreign-source income), you must report that income on your tax return unless it is exempt by U. How to file 1040x amended return S. How to file 1040x amended return law. How to file 1040x amended return This is true whether you reside inside or outside the United States and whether or not you receive a Form 1099 from the foreign payer. How to file 1040x amended return Introduction This chapter discusses the tax treatment of: Ordinary dividends, Capital gain distributions, Nondividend distributions, and Other distributions you may receive from a corporation or a mutual fund. How to file 1040x amended return This chapter also explains how to report dividend income on your tax return. How to file 1040x amended return Dividends are distributions of money, stock, or other property paid to you by a corporation or by a mutual fund. How to file 1040x amended return You also may receive dividends through a partnership, an estate, a trust, or an association that is taxed as a corporation. How to file 1040x amended return However, some amounts you receive that are called dividends are actually interest income. How to file 1040x amended return (See Dividends that are actually interest under Taxable Interest in chapter 7. How to file 1040x amended return ) Most distributions are paid in cash (or check). How to file 1040x amended return However, distributions can consist of more stock, stock rights, other property, or services. How to file 1040x amended return Useful Items - You may want to see: Publication 514 Foreign Tax Credit for Individuals 550 Investment Income and Expenses Form (and Instructions) Schedule B (Form 1040A or 1040) Interest and Ordinary Dividends General Information This section discusses general rules for dividend income. How to file 1040x amended return Tax on unearned income of certain children. How to file 1040x amended return   Part of a child's 2013 unearned income may be taxed at the parent's tax rate. How to file 1040x amended return If it is, Form 8615, Tax for Certain Children Who Have Unearned Income, must be completed and attached to the child's tax return. How to file 1040x amended return If not, Form 8615 is not required and the child's income is taxed at his or her own tax rate. How to file 1040x amended return    Some parents can choose to include the child's interest and dividends on the parent's return if certain requirements are met. How to file 1040x amended return Use Form 8814, Parents' Election To Report Child's Interest and Dividends, for this purpose. How to file 1040x amended return   For more information about the tax on unearned income of children and the parents' election, see chapter 31. How to file 1040x amended return Beneficiary of an estate or trust. How to file 1040x amended return    Dividends and other distributions you receive as a beneficiary of an estate or trust are generally taxable income. How to file 1040x amended return You should receive a Schedule K-1 (Form 1041), Beneficiary's Share of Income, Deductions, Credits, etc. How to file 1040x amended return , from the fiduciary. How to file 1040x amended return Your copy of Schedule K-1 (Form 1041) and its instructions will tell you where to report the income on your Form 1040. How to file 1040x amended return Social security number (SSN) or individual taxpayer identification number (ITIN). How to file 1040x amended return    You must give your SSN or ITIN to any person required by federal tax law to make a return, statement, or other document that relates to you. How to file 1040x amended return This includes payers of dividends. How to file 1040x amended return If you do not give your SSN or ITIN to the payer of dividends, you may have to pay a penalty. How to file 1040x amended return For more information on SSNs and ITINs, see Social Security Number (SSN) in chapter 1. How to file 1040x amended return Backup withholding. How to file 1040x amended return   Your dividend income is generally not subject to regular withholding. How to file 1040x amended return However, it may be subject to backup withholding to ensure that income tax is collected on the income. How to file 1040x amended return Under backup withholding, the payer of dividends must withhold, as income tax, on the amount you are paid, applying the appropriate withholding rate. How to file 1040x amended return   Backup withholding may also be required if the IRS has determined that you underreported your interest or dividend income. How to file 1040x amended return For more information, see Backup Withholding in chapter 4. How to file 1040x amended return Stock certificate in two or more names. How to file 1040x amended return   If two or more persons hold stock as joint tenants, tenants by the entirety, or tenants in common, each person's share of any dividends from the stock is determined by local law. How to file 1040x amended return Form 1099-DIV. How to file 1040x amended return   Most corporations and mutual funds use Form 1099-DIV, Dividends and Distributions, to show you the distributions you received from them during the year. How to file 1040x amended return Keep this form with your records. How to file 1040x amended return You do not have to attach it to your tax return. How to file 1040x amended return Dividends not reported on Form 1099-DIV. How to file 1040x amended return   Even if you do not receive Form 1099-DIV, you must still report all your taxable dividend income. How to file 1040x amended return For example, you may receive distributive shares of dividends from partnerships or S corporations. How to file 1040x amended return These dividends are reported to you on Schedule K-1 (Form 1065), Partner's Share of Income, Deductions, Credits, etc. How to file 1040x amended return , and Schedule K-1 (Form 1120S), Shareholder's Share of Income, Deductions, Credits, etc. How to file 1040x amended return Reporting tax withheld. How to file 1040x amended return   If tax is withheld from your dividend income, the payer must give you a Form 1099-DIV that indicates the amount withheld. How to file 1040x amended return Nominees. How to file 1040x amended return   If someone receives distributions as a nominee for you, that person should give you a Form 1099-DIV, which will show distributions received on your behalf. How to file 1040x amended return Form 1099-MISC. How to file 1040x amended return   Certain substitute payments in lieu of dividends or tax-exempt interest received by a broker on your behalf must be reported to you on Form 1099-MISC, Miscellaneous Income, or a similar statement. How to file 1040x amended return See Reporting Substitute Payments under Short Sales in chapter 4 of Publication 550 for more information about reporting these payments. How to file 1040x amended return Incorrect amount shown on a Form 1099. How to file 1040x amended return   If you receive a Form 1099 that shows an incorrect amount (or other incorrect information), you should ask the issuer for a corrected form. How to file 1040x amended return The new Form 1099 you receive will be marked “Corrected. How to file 1040x amended return ” Dividends on stock sold. How to file 1040x amended return   If stock is sold, exchanged, or otherwise disposed of after a dividend is declared but before it is paid, the owner of record (usually the payee shown on the dividend check) must include the dividend in income. How to file 1040x amended return Dividends received in January. How to file 1040x amended return   If a mutual fund (or other regulated investment company) or real estate investment trust (REIT) declares a dividend (including any exempt-interest dividend or capital gain distribution) in October, November, or December, payable to shareholders of record on a date in one of those months but actually pays the dividend during January of the next calendar year, you are considered to have received the dividend on December 31. How to file 1040x amended return You report the dividend in the year it was declared. How to file 1040x amended return Ordinary Dividends Ordinary (taxable) dividends are the most common type of distribution from a corporation or a mutual fund. How to file 1040x amended return They are paid out of earnings and profits and are ordinary income to you. How to file 1040x amended return This means they are not capital gains. How to file 1040x amended return You can assume that any dividend you receive on common or preferred stock is an ordinary dividend unless the paying corporation or mutual fund tells you otherwise. How to file 1040x amended return Ordinary dividends will be shown in box 1a of the Form 1099-DIV you receive. How to file 1040x amended return Qualified Dividends Qualified dividends are the ordinary dividends subject to the same 0%, 15%, or 20% maximum tax rate that applies to net capital gain. How to file 1040x amended return They should be shown in box 1b of the Form 1099-DIV you receive. How to file 1040x amended return The maximum rate of tax on qualified dividends is: 0% on any amount that otherwise would be taxed at a 10% or 15% rate. How to file 1040x amended return 15% on any amount that otherwise would be taxed at rates greater than 15% but less than 39. How to file 1040x amended return 6%. How to file 1040x amended return 20% on any amount that otherwise would be taxed at a 39. How to file 1040x amended return 6% rate. How to file 1040x amended return To qualify for the maximum rate, all of the following requirements must be met. How to file 1040x amended return The dividends must have been paid by a U. How to file 1040x amended return S. How to file 1040x amended return corporation or a qualified foreign corporation. How to file 1040x amended return (See Qualified foreign corporation , later. How to file 1040x amended return ) The dividends are not of the type listed later under Dividends that are not qualified dividends . How to file 1040x amended return You meet the holding period (discussed next). How to file 1040x amended return Holding period. How to file 1040x amended return   You must have held the stock for more than 60 days during the 121-day period that begins 60 days before the ex-dividend date. How to file 1040x amended return The ex-dividend date is the first date following the declaration of a dividend on which the buyer of a stock is not entitled to receive the next dividend payment. How to file 1040x amended return Instead, the seller will get the dividend. How to file 1040x amended return   When counting the number of days you held the stock, include the day you disposed of the stock, but not the day you acquired it. How to file 1040x amended return See the examples later. How to file 1040x amended return Exception for preferred stock. How to file 1040x amended return   In the case of preferred stock, you must have held the stock more than 90 days during the 181-day period that begins 90 days before the ex-dividend date if the dividends are due to periods totaling more than 366 days. How to file 1040x amended return If the preferred dividends are due to periods totaling less than 367 days, the holding period in the previous paragraph applies. How to file 1040x amended return Example 1. How to file 1040x amended return You bought 5,000 shares of XYZ Corp. How to file 1040x amended return common stock on July 9, 2013. How to file 1040x amended return XYZ Corp. How to file 1040x amended return paid a cash dividend of 10 cents per share. How to file 1040x amended return The ex-dividend date was July 16, 2013. How to file 1040x amended return Your Form 1099-DIV from XYZ Corp. How to file 1040x amended return shows $500 in box 1a (ordinary dividends) and in box 1b (qualified dividends). How to file 1040x amended return However, you sold the 5,000 shares on August 12, 2013. How to file 1040x amended return You held your shares of XYZ Corp. How to file 1040x amended return for only 34 days of the 121-day period (from July 10, 2013, through August 12, 2013). How to file 1040x amended return The 121-day period began on May 17, 2013 (60 days before the ex-dividend date), and ended on September 14, 2013. How to file 1040x amended return You have no qualified dividends from XYZ Corp. How to file 1040x amended return because you held the XYZ stock for less than 61 days. How to file 1040x amended return Example 2. How to file 1040x amended return Assume the same facts as in Example 1 except that you bought the stock on July 15, 2013 (the day before the ex-dividend date), and you sold the stock on September 16, 2013. How to file 1040x amended return You held the stock for 63 days (from July 16, 2013, through September 16, 2013). How to file 1040x amended return The $500 of qualified dividends shown in box 1b of your Form 1099-DIV are all qualified dividends because you held the stock for 61 days of the 121-day period (from July 16, 2013, through September 14, 2013). How to file 1040x amended return Example 3. How to file 1040x amended return You bought 10,000 shares of ABC Mutual Fund common stock on July 9, 2013. How to file 1040x amended return ABC Mutual Fund paid a cash dividend of 10 cents a share. How to file 1040x amended return The ex-dividend date was July 16, 2013. How to file 1040x amended return The ABC Mutual Fund advises you that the portion of the dividend eligible to be treated as qualified dividends equals 2 cents per share. How to file 1040x amended return Your Form 1099-DIV from ABC Mutual Fund shows total ordinary dividends of $1,000 and qualified dividends of $200. How to file 1040x amended return However, you sold the 10,000 shares on August 12, 2013. How to file 1040x amended return You have no qualified dividends from ABC Mutual Fund because you held the ABC Mutual Fund stock for less than 61 days. How to file 1040x amended return Holding period reduced where risk of loss is diminished. How to file 1040x amended return   When determining whether you met the minimum holding period discussed earlier, you cannot count any day during which you meet any of the following conditions. How to file 1040x amended return You had an option to sell, were under a contractual obligation to sell, or had made (and not closed) a short sale of substantially identical stock or securities. How to file 1040x amended return You were grantor (writer) of an option to buy substantially identical stock or securities. How to file 1040x amended return Your risk of loss is diminished by holding one or more other positions in substantially similar or related property. How to file 1040x amended return   For information about how to apply condition (3), see Regulations section 1. How to file 1040x amended return 246-5. How to file 1040x amended return Qualified foreign corporation. How to file 1040x amended return   A foreign corporation is a qualified foreign corporation if it meets any of the following conditions. How to file 1040x amended return The corporation is incorporated in a U. How to file 1040x amended return S. How to file 1040x amended return possession. How to file 1040x amended return The corporation is eligible for the benefits of a comprehensive income tax treaty with the United States that the Treasury Department determines is satisfactory for this purpose and that includes an exchange of information program. How to file 1040x amended return For a list of those treaties, see Table 8-1. How to file 1040x amended return The corporation does not meet (1) or (2) above, but the stock for which the dividend is paid is readily tradable on an established securities market in the United States. How to file 1040x amended return See Readily tradable stock , later. How to file 1040x amended return Exception. How to file 1040x amended return   A corporation is not a qualified foreign corporation if it is a passive foreign investment company during its tax year in which the dividends are paid or during its previous tax year. How to file 1040x amended return Readily tradable stock. How to file 1040x amended return   Any stock (such as common, ordinary, or preferred) or an American depositary receipt in respect of that stock is considered to satisfy requirement (3) under Qualified foreign corporation , if it is listed on a national securities exchange that is registered under section 6 of the Securities Exchange Act of 1934 or on the Nasdaq Stock Market. How to file 1040x amended return For a list of the exchanges that meet these requirements, see www. How to file 1040x amended return sec. How to file 1040x amended return gov/divisions/marketreg/mrexchanges. How to file 1040x amended return shtml. How to file 1040x amended return Dividends that are not qualified dividends. How to file 1040x amended return   The following dividends are not qualified dividends. How to file 1040x amended return They are not qualified dividends even if they are shown in box 1b of Form 1099-DIV. How to file 1040x amended return Capital gain distributions. How to file 1040x amended return Dividends paid on deposits with mutual savings banks, cooperative banks, credit unions, U. How to file 1040x amended return S. How to file 1040x amended return building and loan associations, U. How to file 1040x amended return S. How to file 1040x amended return savings and loan associations, federal savings and loan associations, and similar financial institutions. How to file 1040x amended return (Report these amounts as interest income. How to file 1040x amended return ) Dividends from a corporation that is a tax-exempt organization or farmer's cooperative during the corporation's tax year in which the dividends were paid or during the corporation's previous tax year. How to file 1040x amended return Dividends paid by a corporation on employer securities held on the date of record by an employee stock ownership plan (ESOP) maintained by that corporation. How to file 1040x amended return Dividends on any share of stock to the extent you are obligated (whether under a short sale or otherwise) to make related payments for positions in substantially similar or related property. How to file 1040x amended return Payments in lieu of dividends, but only if you know or have reason to know the payments are not qualified dividends. How to file 1040x amended return Payments shown in Form 1099-DIV, box 1b, from a foreign corporation to the extent you know or have reason to know the payments are not qualified dividends. How to file 1040x amended return Table 8-1. How to file 1040x amended return Income Tax Treaties Income tax treaties the United States has with the following countries satisfy requirement (2) under Qualified foreign corporation. How to file 1040x amended return Australia Indonesia Romania Austria Ireland Russian Bangladesh Israel Federation Barbados Italy Slovak Belgium Jamaica Republic Bulgaria Japan Slovenia Canada Kazakhstan South Africa China Korea Spain Cyprus Latvia Sri Lanka Czech Lithuania Sweden Republic Luxembourg Switzerland Denmark Malta Thailand Egypt Mexico Trinidad and Estonia Morocco Tobago Finland Netherlands Tunisia France New Zealand Turkey Germany Norway Ukraine Greece Pakistan United Hungary Philippines Kingdom Iceland Poland Venezuela India Portugal     Dividends Used to Buy More Stock The corporation in which you own stock may have a dividend reinvestment plan. How to file 1040x amended return This plan lets you choose to use your dividends to buy (through an agent) more shares of stock in the corporation instead of receiving the dividends in cash. How to file 1040x amended return Most mutual funds also permit shareholders to automatically reinvest distributions in more shares in the fund, instead of receiving cash. How to file 1040x amended return If you use your dividends to buy more stock at a price equal to its fair market value, you still must report the dividends as income. How to file 1040x amended return If you are a member of a dividend reinvestment plan that lets you buy more stock at a price less than its fair market value, you must report as dividend income the fair market value of the additional stock on the dividend payment date. How to file 1040x amended return You also must report as dividend income any service charge subtracted from your cash dividends before the dividends are used to buy the additional stock. How to file 1040x amended return But you may be able to deduct the service charge. How to file 1040x amended return See chapter 28 for more information about deducting expenses of producing income. How to file 1040x amended return In some dividend reinvestment plans, you can invest more cash to buy shares of stock at a price less than fair market value. How to file 1040x amended return If you choose to do this, you must report as dividend income the difference between the cash you invest and the fair market value of the stock you buy. How to file 1040x amended return When figuring this amount, use the fair market value of the stock on the dividend payment date. How to file 1040x amended return Money Market Funds Report amounts you receive from money market funds as dividend income. How to file 1040x amended return Money market funds are a type of mutual fund and should not be confused with bank money market accounts that pay interest. How to file 1040x amended return Capital Gain Distributions Capital gain distributions (also called capital gain dividends) are paid to you or credited to your account by mutual funds (or other regulated investment companies) and real estate investment trusts (REITs). How to file 1040x amended return They will be shown in box 2a of the Form 1099-DIV you receive from the mutual fund or REIT. How to file 1040x amended return Report capital gain distributions as long-term capital gains, regardless of how long you owned your shares in the mutual fund or REIT. How to file 1040x amended return Undistributed capital gains of mutual funds and REITs. How to file 1040x amended return    Some mutual funds and REITs keep their long-term capital gains and pay tax on them. How to file 1040x amended return You must treat your share of these gains as distributions, even though you did not actually receive them. How to file 1040x amended return However, they are not included on Form 1099-DIV. How to file 1040x amended return Instead, they are reported to you in box 1a of Form 2439. How to file 1040x amended return   Report undistributed capital gains (box 1a of Form 2439) as long-term capital gains on Schedule D (Form 1040), column (h), line 11. How to file 1040x amended return   The tax paid on these gains by the mutual fund or REIT is shown in box 2 of Form 2439. How to file 1040x amended return You take credit for this tax by including it on Form 1040, line 71, and checking box a on that line. How to file 1040x amended return Attach Copy B of Form 2439 to your return, and keep Copy C for your records. How to file 1040x amended return Basis adjustment. How to file 1040x amended return   Increase your basis in your mutual fund, or your interest in a REIT, by the difference between the gain you report and the credit you claim for the tax paid. How to file 1040x amended return Additional information. How to file 1040x amended return   For more information on the treatment of distributions from mutual funds, see Publication 550. How to file 1040x amended return Nondividend Distributions A nondividend distribution is a distribution that is not paid out of the earnings and profits of a corporation or a mutual fund. How to file 1040x amended return You should receive a Form 1099-DIV or other statement showing the nondividend distribution. How to file 1040x amended return On Form 1099-DIV, a nondividend distribution will be shown in box 3. How to file 1040x amended return If you do not receive such a statement, you report the distribution as an ordinary dividend. How to file 1040x amended return Basis adjustment. How to file 1040x amended return   A nondividend distribution reduces the basis of your stock. How to file 1040x amended return It is not taxed until your basis in the stock is fully recovered. How to file 1040x amended return This nontaxable portion is also called a return of capital; it is a return of your investment in the stock of the company. How to file 1040x amended return If you buy stock in a corporation in different lots at different times, and you cannot definitely identify the shares subject to the nondividend distribution, reduce the basis of your earliest purchases first. How to file 1040x amended return   When the basis of your stock has been reduced to zero, report any additional nondividend distribution you receive as a capital gain. How to file 1040x amended return Whether you report it as a long-term or short-term capital gain depends on how long you have held the stock. How to file 1040x amended return See Holding Period in chapter 14. How to file 1040x amended return Example. How to file 1040x amended return You bought stock in 2000 for $100. How to file 1040x amended return In 2003, you received a nondividend distribution of $80. How to file 1040x amended return You did not include this amount in your income, but you reduced the basis of your stock to $20. How to file 1040x amended return You received a nondividend distribution of $30 in 2013. How to file 1040x amended return The first $20 of this amount reduced your basis to zero. How to file 1040x amended return You report the other $10 as a long-term capital gain for 2013. How to file 1040x amended return You must report as a long-term capital gain any nondividend distribution you receive on this stock in later years. How to file 1040x amended return Liquidating Distributions Liquidating distributions, sometimes called liquidating dividends, are distributions you receive during a partial or complete liquidation of a corporation. How to file 1040x amended return These distributions are, at least in part, one form of a return of capital. How to file 1040x amended return They may be paid in one or more installments. How to file 1040x amended return You will receive Form 1099-DIV from the corporation showing you the amount of the liquidating distribution in box 8 or 9. How to file 1040x amended return For more information on liquidating distributions, see chapter 1 of Publication 550. How to file 1040x amended return Distributions of Stock and Stock Rights Distributions by a corporation of its own stock are commonly known as stock dividends. How to file 1040x amended return Stock rights (also known as “stock options”) are distributions by a corporation of rights to acquire the corporation's stock. How to file 1040x amended return Generally, stock dividends and stock rights are not taxable to you, and you do not report them on your return. How to file 1040x amended return Taxable stock dividends and stock rights. How to file 1040x amended return   Distributions of stock dividends and stock rights are taxable to you if any of the following apply. How to file 1040x amended return You or any other shareholder have the choice to receive cash or other property instead of stock or stock rights. How to file 1040x amended return The distribution gives cash or other property to some shareholders and an increase in the percentage interest in the corporation's assets or earnings and profits to other shareholders. How to file 1040x amended return The distribution is in convertible preferred stock and has the same result as in (2). How to file 1040x amended return The distribution gives preferred stock to some common stock shareholders and common stock to other common stock shareholders. How to file 1040x amended return The distribution is on preferred stock. How to file 1040x amended return (The distribution, however, is not taxable if it is an increase in the conversion ratio of convertible preferred stock made solely to take into account a stock dividend, stock split, or similar event that would otherwise result in reducing the conversion right. How to file 1040x amended return )   The term “stock” includes rights to acquire stock, and the term “shareholder” includes a holder of rights or of convertible securities. How to file 1040x amended return If you receive taxable stock dividends or stock rights, include their fair market value at the time of distribution in your income. How to file 1040x amended return Preferred stock redeemable at a premium. How to file 1040x amended return   If you hold preferred stock having a redemption price higher than its issue price, the difference (the redemption premium) generally is taxable as a constructive distribution of additional stock on the preferred stock. How to file 1040x amended return For more information, see chapter 1 of Publication 550. How to file 1040x amended return Basis. How to file 1040x amended return   Your basis in stock or stock rights received in a taxable distribution is their fair market value when distributed. How to file 1040x amended return If you receive stock or stock rights that are not taxable to you, see Stocks and Bonds under Basis of Investment Property in chapter 4 of Publication 550 for information on how to figure their basis. How to file 1040x amended return Fractional shares. How to file 1040x amended return    You may not own enough stock in a corporation to receive a full share of stock if the corporation declares a stock dividend. How to file 1040x amended return However, with the approval of the shareholders, the corporation may set up a plan in which fractional shares are not issued but instead are sold, and the cash proceeds are given to the shareholders. How to file 1040x amended return Any cash you receive for fractional shares under such a plan is treated as an amount realized on the sale of the fractional shares. How to file 1040x amended return Report this transaction on Form 8949, Sales and Other Dispositions of Capital Assets. How to file 1040x amended return Enter your gain or loss, the difference between the cash you receive and the basis of the fractional shares sold, in column (h) of Schedule D (Form 1040) in Part I or Part II, whichever is appropriate. How to file 1040x amended return    Report these transactions on Form 8949 with the correct box checked. How to file 1040x amended return   For more information on Form 8949 and Schedule D (Form 1040), see chapter 4 of Publication 550. How to file 1040x amended return Also see the Instructions for Form 8949 and the Instructions for Schedule D (Form 1040). How to file 1040x amended return Example. How to file 1040x amended return You own one share of common stock that you bought on January 3, 2004, for $100. How to file 1040x amended return The corporation declared a common stock dividend of 5% on June 29, 2013. How to file 1040x amended return The fair market value of the stock at the time the stock dividend was declared was $200. How to file 1040x amended return You were paid $10 for the fractional-share stock dividend under a plan described in the discussion above. How to file 1040x amended return You figure your gain or loss as follows: Fair market value of old stock $200. How to file 1040x amended return 00 Fair market value of stock dividend (cash received) +10. How to file 1040x amended return 00 Fair market value of old stock and stock dividend $210. How to file 1040x amended return 00 Basis (cost) of old stock after the stock dividend (($200 ÷ $210) × $100) $95. How to file 1040x amended return 24 Basis (cost) of stock dividend (($10 ÷ $210) × $100) + 4. How to file 1040x amended return 76 Total $100. How to file 1040x amended return 00 Cash received $10. How to file 1040x amended return 00 Basis (cost) of stock dividend − 4. How to file 1040x amended return 76 Gain $5. How to file 1040x amended return 24 Because you had held the share of stock for more than 1 year at the time the stock dividend was declared, your gain on the stock dividend is a long-term capital gain. How to file 1040x amended return Scrip dividends. How to file 1040x amended return   A corporation that declares a stock dividend may issue you a scrip certificate that entitles you to a fractional share. How to file 1040x amended return The certificate is generally nontaxable when you receive it. How to file 1040x amended return If you choose to have the corporation sell the certificate for you and give you the proceeds, your gain or loss is the difference between the proceeds and the portion of your basis in the corporation's stock allocated to the certificate. How to file 1040x amended return   However, if you receive a scrip certificate that you can choose to redeem for cash instead of stock, the certificate is taxable when you receive it. How to file 1040x amended return You must include its fair market value in income on the date you receive it. How to file 1040x amended return Other Distributions You may receive any of the following distributions during the year. How to file 1040x amended return Exempt-interest dividends. How to file 1040x amended return   Exempt-interest dividends you receive from a mutual fund or other regulated investment company, including those received from a qualified fund of funds in any tax year beginning after December 22, 2010, are not included in your taxable income. How to file 1040x amended return Exempt-interest dividends should be shown in box 10 of Form 1099-DIV. How to file 1040x amended return Information reporting requirement. How to file 1040x amended return   Although exempt-interest dividends are not taxable, you must show them on your tax return if you have to file a return. How to file 1040x amended return This is an information reporting requirement and does not change the exempt-interest dividends to taxable income. How to file 1040x amended return Alternative minimum tax treatment. How to file 1040x amended return   Exempt-interest dividends paid from specified private activity bonds may be subject to the alternative minimum tax. How to file 1040x amended return See Alternative Minimum Tax (AMT) in chapter 30 for more information. How to file 1040x amended return Dividends on insurance policies. How to file 1040x amended return    Insurance policy dividends the insurer keeps and uses to pay your premiums are not taxable. How to file 1040x amended return However, you must report as taxable interest income the interest that is paid or credited on dividends left with the insurance company. How to file 1040x amended return    If dividends on an insurance contract (other than a modified endowment contract) are distributed to you, they are a partial return of the premiums you paid. How to file 1040x amended return Do not include them in your gross income until they are more than the total of all net premiums you paid for the contract. How to file 1040x amended return Report any taxable distributions on insurance policies on Form 1040, line 21. How to file 1040x amended return Dividends on veterans' insurance. How to file 1040x amended return   Dividends you receive on veterans' insurance policies are not taxable. How to file 1040x amended return In addition, interest on dividends left with the Department of Veterans Affairs is not taxable. How to file 1040x amended return Patronage dividends. How to file 1040x amended return   Generally, patronage dividends you receive in money from a cooperative organization are included in your income. How to file 1040x amended return   Do not include in your income patronage dividends you receive on: Property bought for your personal use, or Capital assets or depreciable property bought for use in your business. How to file 1040x amended return But you must reduce the basis (cost) of the items bought. How to file 1040x amended return If the dividend is more than the adjusted basis of the assets, you must report the excess as income. How to file 1040x amended return   These rules are the same whether the cooperative paying the dividend is a taxable or tax-exempt cooperative. How to file 1040x amended return Alaska Permanent Fund dividends. How to file 1040x amended return    Do not report these amounts as dividends. How to file 1040x amended return Instead, report these amounts on Form 1040, line 21; Form 1040A, line 13; or Form 1040EZ, line 3. How to file 1040x amended return How To Report Dividend Income Generally, you can use either Form 1040 or Form 1040A to report your dividend income. How to file 1040x amended return Report the total of your ordinary dividends on line 9a of Form 1040 or Form 1040A. How to file 1040x amended return Report qualified dividends on line 9b of Form 1040 or Form 1040A. How to file 1040x amended return If you receive capital gain distributions, you may be able to use Form 1040A or you may have to use Form 1040. How to file 1040x amended return See Exceptions to filing Form 8949 and Schedule D (Form 1040) in chapter 16. How to file 1040x amended return If you receive nondividend distributions required to be reported as capital gains, you must use Form 1040. How to file 1040x amended return You cannot use Form 1040EZ if you receive any dividend income. How to file 1040x amended return Form 1099-DIV. How to file 1040x amended return   If you owned stock on which you received $10 or more in dividends and other distributions, you should receive a Form 1099-DIV. How to file 1040x amended return Even if you do not receive Form 1099-DIV, you must report all your dividend income. How to file 1040x amended return   See Form 1099-DIV for more information on how to report dividend income. How to file 1040x amended return Form 1040A or 1040. How to file 1040x amended return    You must complete Schedule B (Form 1040A or 1040), Part II, and attach it to your Form 1040A or 1040, if: Your ordinary dividends (Form 1099-DIV, box 1a) are more than $1,500, or You received, as a nominee, dividends that actually belong to someone else. How to file 1040x amended return If your ordinary dividends are more than $1,500, you must also complete Schedule B (Form 1040A or 1040), Part III. How to file 1040x amended return   List on Schedule B (Form 1040A or 1040), Part II, line 5, each payer's name and the ordinary dividends you received. How to file 1040x amended return If your securities are held by a brokerage firm (in “street name”), list the name of the brokerage firm shown on Form 1099-DIV as the payer. How to file 1040x amended return If your stock is held by a nominee who is the owner of record, and the nominee credited or paid you dividends on the stock, show the name of the nominee and the dividends you received or for which you were credited. How to file 1040x amended return   Enter on line 6 the total of the amounts listed on line 5. How to file 1040x amended return Also enter this total on line 9a of Form 1040A or 1040. How to file 1040x amended return Qualified dividends. How to file 1040x amended return   Report qualified dividends (Form 1099-DIV, box 1b) on line 9b of Form 1040 or Form 1040A. How to file 1040x amended return The amount in box 1b is already included in box 1a. How to file 1040x amended return Do not add the amount in box 1b to, or substract it from, the amount in box 1a. How to file 1040x amended return   Do not include any of the following on line 9b. How to file 1040x amended return Qualified dividends you received as a nominee. How to file 1040x amended return See Nominees under How to Report Dividend Income in chapter 1 of Publication 550. How to file 1040x amended return Dividends on stock for which you did not meet the holding period. How to file 1040x amended return See Holding period , earlier under Qualified Dividends. How to file 1040x amended return Dividends on any share of stock to the extent you are obligated (whether under a short sale or otherwise) to make related payments for positions in substantially similar or related property. How to file 1040x amended return Payments in lieu of dividends, but only if you know or have reason to know the payments are not qualified dividends. How to file 1040x amended return Payments shown in Form 1099-DIV, box 1b, from a foreign corporation to the extent you know or have reason to know the payments are not qualified dividends. How to file 1040x amended return   If you have qualified dividends, you must figure your tax by completing the Qualified Dividends and Capital Gain Tax Worksheet in the Form 1040 or 1040A instructions or the Schedule D Tax Worksheet in the Schedule D (Form 1040) instructions, whichever applies. How to file 1040x amended return Enter qualified dividends on line 2 of the worksheet. How to file 1040x amended return Investment interest deducted. How to file 1040x amended return   If you claim a deduction for investment interest, you may have to reduce the amount of your qualified dividends that are eligible for the 0%, 15%, or 20% tax rate. How to file 1040x amended return Reduce it by the qualified dividends you choose to include in investment income when figuring the limit on your investment interest deduction. How to file 1040x amended return This is done on the Qualified Dividends and Capital Gain Tax Worksheet or the Schedule D Tax Worksheet. How to file 1040x amended return For more information about the limit on investment interest, see Investment expenses in chapter 23. How to file 1040x amended return Expenses related to dividend income. How to file 1040x amended return   You may be able to deduct expenses related to dividend income if you itemize your deductions on Schedule A (Form 1040). How to file 1040x amended return See chapter 28 for general information about deducting expenses of producing income. How to file 1040x amended return More information. How to file 1040x amended return    For more information about how to report dividend income, see chapter 1 of Publication 550 or the instructions for the form you must file. How to file 1040x amended return Prev  Up  Next   Home   More Online Publications
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The How To File 1040x Amended Return

How to file 1040x amended return 35. How to file 1040x amended return   Education Credits Table of Contents Introduction Useful Items - You may want to see: Who Can Claim an Education Credit Qualified Education ExpensesNo Double Benefit Allowed Adjustments to Qualified Education Expenses Introduction For 2013, there are two tax credits available to persons who pay expenses for higher (postsecondary) education. How to file 1040x amended return They are: The American opportunity credit, and The lifetime learning credit. How to file 1040x amended return The chapter will present an overview of these education credits. How to file 1040x amended return To get the detailed information you will need to claim either of the credits, and for examples illustrating that information, see chapters 2 and 3 of Publication 970. How to file 1040x amended return Can you claim more than one education credit this year?   For each student, you can choose for any year only one of the credits. How to file 1040x amended return For example, if you choose to take the American opportunity credit for a child on your 2013 tax return, you cannot, for that same child, also claim the lifetime learning credit for 2013. How to file 1040x amended return   If you are eligible to claim the American opportunity credit and you are also eligible to claim the lifetime learning credit for the same student in the same year, you can choose to claim either credit, but not both. How to file 1040x amended return   If you pay qualified education expenses for more than one student in the same year, you can choose to take the American opportunity and the lifetime learning credits on a per-student, per-year basis. How to file 1040x amended return This means that, for example, you can claim the American opportunity credit for one student and the lifetime learning credit for another student in the same year. How to file 1040x amended return Table 35-1. How to file 1040x amended return Comparison of Education Credits Caution. How to file 1040x amended return You can claim both the American opportunity credit and the lifetime learning credit on the same return—but not for the same student. How to file 1040x amended return   American Opportunity Credit Lifetime Learning Credit Maximum credit Up to $2,500 credit per eligible student Up to $2,000 credit per return Limit on modified adjusted gross income (MAGI) $180,000 if married filing jointly;  $90,000 if single, head of household, or qualifying widow(er) $127,000 if married filing jointly;  $63,000 if single, head of household, or qualifying widow(er) Refundable or nonrefundable 40% of credit may be refundable Credit limited to the amount of tax you must pay on your taxable income Number of years of postsecondary education Available ONLY if the student had not completed the first 4 years of postsecondary education before 2013 Available for all years of postsecondary education and for courses to acquire or improve job skills Number of tax years credit available Available ONLY for 4 tax years per eligible student (including any year(s) the Hope credit was claimed) Available for an unlimited number of years Type of program required Student must be pursuing a program leading to a degree or other recognized education credential Student does not need to be pursuing a program leading to a degree or other recognized education credential Number of courses Student must be enrolled at least half time for at least one academic period beginning during the tax year Available for one or more courses Felony drug conviction At the end of 2013, the student had not been convicted of a felony for possessing or distributing a controlled substance Felony drug convictions do not make the student ineligible Qualified expenses Tuition, required enrollment fees, and course materials that the student needs for a course of study whether or not the materials are bought at the educational institution as a condition of enrollment or attendance Tuition and fees required for enrollment or attendance (including amounts required to be paid to the institution for course-related books, supplies, and equipment) Payments for academic periods Payments made in 2013 for academic periods beginning in 2013 or beginning in the first 3 months of 2014 Differences between the American opportunity and lifetime learning credits. How to file 1040x amended return   There are several differences between these two credits. How to file 1040x amended return These differences are summarized in Table 35-1, later. How to file 1040x amended return Useful Items - You may want to see: Publication 970 Tax Benefits for Education Form (and Instructions) 8863 Education Credits (American Opportunity and Lifetime Learning Credits) Who Can Claim an Education Credit You may be able to claim an education credit if you, your spouse, or a dependent you claim on your tax return was a student enrolled at or attending an eligible educational institution. How to file 1040x amended return The credits are based on the amount of qualified education expenses paid for the student in 2013 for academic periods beginning in 2013 and in the first 3 months of 2014. How to file 1040x amended return For example, if you paid $1,500 in December 2013 for qualified tuition for the spring 2014 semester beginning in January 2014, you may be able to use that $1,500 in figuring your 2013 education credit(s). How to file 1040x amended return Academic period. How to file 1040x amended return   An academic period includes a semester, trimester, quarter, or other period of study (such as a summer school session) as reasonably determined by an educational institution. How to file 1040x amended return In the case of an educational institution that uses credit hours or clock hours and does not have academic terms, each payment period can be treated as an academic period. How to file 1040x amended return Eligible educational institution. How to file 1040x amended return   An eligible educational institution is any college, university, vocational school, or other postsecondary educational institution eligible to participate in a student aid program administered by the U. How to file 1040x amended return S. How to file 1040x amended return Department of Education. How to file 1040x amended return It includes virtually all accredited public, nonprofit, and proprietary (privately owned profit-making) postsecondary institutions. How to file 1040x amended return The educational institution should be able to tell you if it is an eligible educational institution. How to file 1040x amended return   Certain educational institutions located outside the United States also participate in the U. How to file 1040x amended return S. How to file 1040x amended return Department of Education's Federal Student Aid (FSA) programs. How to file 1040x amended return Who can claim a dependent's expenses. How to file 1040x amended return   If an exemption is allowed as a deduction for any person who claims the student as a dependent, all qualified education expenses of the student are treated as having been paid by that person. How to file 1040x amended return Therefore, only that person can claim an education credit for the student. How to file 1040x amended return If a student is not claimed as a dependent on another person's tax return, only the student can claim a credit. How to file 1040x amended return Expenses paid by a third party. How to file 1040x amended return   Qualified education expenses paid on behalf of the student by someone other than the student (such as a relative) are treated as paid by the student. How to file 1040x amended return However, qualified education expenses paid (or treated as paid) by a student who is claimed as a dependent on your tax return are treated as paid by you. How to file 1040x amended return Therefore, you are treated as having paid expenses that were paid by the third party. How to file 1040x amended return For more information and an example see Who Can Claim a Dependent's Expenses in Pub. How to file 1040x amended return 970, chapter 2 or 3. How to file 1040x amended return Who cannot claim a credit. How to file 1040x amended return   You cannot take an education credit if any of the following apply. How to file 1040x amended return You are claimed as a dependent on another person's tax return, such as your parent's return. How to file 1040x amended return Your filing status is married filing separately. How to file 1040x amended return You (or your spouse) were a nonresident alien for any part of 2013 and did not elect to be treated as a resident alien for tax purposes. How to file 1040x amended return Your MAGI is one of the following. How to file 1040x amended return American opportunity credit: $180,000 or more if married filing jointly, or $90,000 or more if single, head of household, or qualifying widow(er). How to file 1040x amended return Lifetime learning credit: $127,000 or more if married filing jointly, or $63,000 or more if single, head of household, or qualifying widow(er) . How to file 1040x amended return   Generally, your MAGI is the amount on your Form 1040, line 38, or Form 1040A, line 22. How to file 1040x amended return However, if you are filing Form 2555, Form 2555–EZ, or Form 4563, or are excluding income from Puerto RIco, add to the amount on your Form 1040, line 38, or Form 1040A, line 22, the amount of income you excluded. How to file 1040x amended return For details, see Pub. How to file 1040x amended return 970. How to file 1040x amended return    Figure 35-A may be helpful in determining if you can claim an education credit on your tax return. How to file 1040x amended return The American opportunity credit will always be greater than or equal to the lifetime learning credit for any student who is eligible for both credits. How to file 1040x amended return However, if any of the conditions for the American opportunity credit, listed in Table 35-1 earlier, are not met for any student, you cannot take the American opportunity credit for that student. How to file 1040x amended return You may be able to take the lifetime learning credit for part or all of that student's qualified education expenses instead. How to file 1040x amended return See Pub. How to file 1040x amended return 970 for information on other education benefits. How to file 1040x amended return Qualified Education Expenses Generally, qualified education expenses are amounts paid in 2013 for tuition and fees required for the student's enrollment or attendance at an eligible educational institution. How to file 1040x amended return It does not matter whether the expenses were paid in cash, by check, by credit or debit card, or with borrowed funds. How to file 1040x amended return For course-related books, supplies, and equipment, only certain expenses qualify. How to file 1040x amended return American opportunity credit: Qualified education expenses include amounts spent on books, supplies, and equipment needed for a course of study, whether or not the materials are purchased from the educational institution as a condition of enrollment or attendance. How to file 1040x amended return Lifetime learning credit: Qualified education expenses include amounts for books, supplies, and equipment only if required to be paid to the institution as a condition of enrollment or attendance. How to file 1040x amended return Qualified education expenses include nonacademic fees, such as student activity fees, athletic fees, or other expenses unrelated to the academic course of instruction, only if the fee must be paid to the institution as a condition of enrollment or attendance. How to file 1040x amended return However, fees for personal expenses (described below) are never qualified education expenses. How to file 1040x amended return Qualified education expenses for either credit do not include amounts paid for: Personal expenses. How to file 1040x amended return This means room and board, insurance, medical expenses (including student health fees), transportation, and other similar personal, living, or family expenses. How to file 1040x amended return Any course or other education involving sports, games, or hobbies, or any noncredit course, unless such course or other education is part of the student's degree program or (for the lifetime learning credit only) helps the student acquire or improve job skills. How to file 1040x amended return You should receive Form 1098–T, Tuition Statement, from the institution reporting either payments received in 2013 (box 1) or amounts billed in 2013 (box 2). How to file 1040x amended return However, the amount in box 1 or 2 of Form 1098–T may be different from the amount you paid (or are treated as having paid). How to file 1040x amended return In completing Form 8863, use only the amounts you actually paid (plus any amounts you are treated as having paid) in 2013, reduced as necessary, as described in Adjustments to Qualified Education Expenses , later. How to file 1040x amended return Qualified education expenses paid on behalf of the student by someone other than the student (such as a relative) are treated as paid by the student. How to file 1040x amended return Qualified education expenses paid (or treated as paid) by a student who is claimed as a dependent on your tax return are treated as paid by you. How to file 1040x amended return If you or the student takes a deduction for higher education expenses, such as on Schedule A or C (Form 1040), you cannot use those expenses in your qualified education expenses when figuring your education credits. How to file 1040x amended return Qualified education expenses for any academic period must be reduced by any tax-free educational assistance allocable to that academic period. How to file 1040x amended return See Adjustments to Qualified Education Expenses, later. How to file 1040x amended return Prepaid Expenses. How to file 1040x amended return   Qualified education expenses paid in 2013 for an academic period that begins in the first 3 months of 2014 can be used in figuring an education credit for 2013 only. How to file 1040x amended return See Academic period , earlier. How to file 1040x amended return For example, if you pay $2,000 in December 2013 for qualified tuition for the 2014 winter quarter that begins in January 2014, you can use that $2,000 in figuring an education credit for 2013 only (if you meet all the other requirements). How to file 1040x amended return    You cannot use any amount you paid in 2012 or 2014 to figure the qualified education expenses you use to figure your 2013 education credit(s). How to file 1040x amended return Paid with borrowed funds. How to file 1040x amended return   You can claim an education credit for qualified education expenses paid with the proceeds of a loan. How to file 1040x amended return Use the expenses to figure the credit for the year in which the expenses are paid, not the year in which the loan is repaid. How to file 1040x amended return Treat loan payments sent directly to the educational institution as paid on the date the institution credits the student's account. How to file 1040x amended return Student withdraws from class(es). How to file 1040x amended return   You can claim an education credit for qualified education expenses not refunded when a student withdraws. How to file 1040x amended return No Double Benefit Allowed You cannot do any of the following. How to file 1040x amended return Deduct higher education expenses on your income tax return (as, for example, a business expense) and also claim an education credit based on those same expenses. How to file 1040x amended return Claim more than one education credit based on the same qualified education expenses. How to file 1040x amended return Claim an education credit based on the same expenses used to figure the tax-free portion of a distribution from a Coverdell education savings account (ESA) or qualified tuition program (QTP). How to file 1040x amended return Claim an education credit based on qualified education expenses paid with educational assistance, such as a tax-free scholarship, grant, or employer-provided educational assistance. How to file 1040x amended return See Adjustments to Qualified Education Expenses, next. How to file 1040x amended return Adjustments to Qualified Education Expenses For each student, reduce the qualified education expenses paid in 2013 by or on behalf of that student under the following rules. How to file 1040x amended return The result is the amount of adjusted qualified education expenses for each student. How to file 1040x amended return Tax-free educational assistance. How to file 1040x amended return   For tax-free educational assistance received in 2013, reduce the qualified educational expenses for each academic period by the amount of tax-free educational assistance allocable to that academic period. How to file 1040x amended return See Academic period , earlier. How to file 1040x amended return      Tax-free educational assistance includes:    Tax-free parts of scholarships and fellowships (see chapter 12 of this publication and chapter 1 of Pub. How to file 1040x amended return 970), The tax-free part of Pell grants (see chapter 1 of Pub. How to file 1040x amended return 970), The tax-free part of employer-provided educational assistance (see Pub. How to file 1040x amended return 970), Veterans' educational assistance (see chapter 1 of Pub. How to file 1040x amended return 970), and Any other nontaxable (tax-free) payments (other than gifts or inheritances) received as educational assistance. How to file 1040x amended return Generally, any scholarship or fellowship is treated as tax-free educational assistance. How to file 1040x amended return However, a scholarship or fellowship is not treated as tax-free educational assistance to the extent the student includes it in gross income (if the student is required to file a tax return) for the year the scholarship or fellowship is received and either: The scholarship or fellowship (or any part of it) must be applied (by its terms) to expenses (such as room and board) other than qualified education expenses as defined in Qualified education expenses in Pub. How to file 1040x amended return 970, chapter 1; or The scholarship or fellowship (or any part of it) may be applied (by its terms) to expenses (such as room and board) other than qualified education expenses as defined in Qualified education expenses in Pub. How to file 1040x amended return 970, chapter 1. How to file 1040x amended return You may be able to increase the combined value of an education credit and certain educational assistance if the student includes some or all of the educational assistance in income in the year received. How to file 1040x amended return For details, see Adjustments of Qualified Education Expenses, in chapters 2 and 3 of Pub. How to file 1040x amended return 970. How to file 1040x amended return Some tax-free educational assistance received after 2013 may be treated as a refund of qualified education expenses paid in 2013. How to file 1040x amended return This tax-free educational assistance is any tax-free educational assistance received by you or anyone else after 2013 for qualified education expenses paid on behalf of a student in 2013 (or attributable to enrollment at an eligible educational institution during 2013). How to file 1040x amended return If this tax-free educational assistance is received after 2013 but before you file your 2013 income tax return, see Refunds received after 2013 but before your income tax return is filed, later. How to file 1040x amended return If this tax-free educational assistance is received after 2013 and after you file your 2013 income tax return, see Refunds received after 2013 and after your income tax return is filed, later. How to file 1040x amended return Refunds. How to file 1040x amended return   A refund of qualified education expenses may reduce qualified education expenses for the tax year or may require you to repay (recapture) the credit that you claimed in an earlier year. How to file 1040x amended return Some tax-free educational assistance received after 2013 may be treated as a refund. How to file 1040x amended return See Tax-free educational assistance, earlier. How to file 1040x amended return Refunds received in 2013. How to file 1040x amended return   For each student, figure the adjusted qualified education expenses for 2013 by adding all the qualified education expenses paid in 2013 and subtracting any refunds of those expenses received from the eligible educational institution during 2013. How to file 1040x amended return Refunds received after 2013 but before your income tax return is filed. How to file 1040x amended return   If anyone receives a refund after 2013 of qualified education expenses paid on behalf of a student in 2013 and the refund is received before you file your 2013 income tax return, reduce the amount of qualified education expenses for 2013 by the amount of the refund. How to file 1040x amended return Refunds received after 2013 and after your income tax return is filed. How to file 1040x amended return   If anyone receives a refund after 2013 of qualified education expenses paid on behalf of a student in 2013 and the refund is received after you file your 2013 income tax return, you may need to repay some or all of the credit that you claimed. How to file 1040x amended return See Credit recapture, next. How to file 1040x amended return Credit recapture. How to file 1040x amended return    If any tax-free educational assistance for the qualified education expenses paid in 2013, or any refund of your qualified education expenses paid in 2013, is received after you file your 2013 income tax return, you must recapture (repay) any excess credit. How to file 1040x amended return You do this by refiguring the amount of your adjusted qualified education expenses for 2013 by reducing the expenses by the amount of the refund or tax-free educational assistance. How to file 1040x amended return You then refigure your education credit(s) for 2013 and figure the amount by which your 2013 tax liability would have increased if you had claimed the refigured credit(s). How to file 1040x amended return Include that amount as an additional tax for the year the refund or tax-free assistance was received. How to file 1040x amended return Example. How to file 1040x amended return    You paid $8,000 tuition and fees in December 2013 for your child's Spring semester beginning in January 2014. How to file 1040x amended return You filed your 2013 tax return on February 3, 2014, and claimed a lifetime learning credit of $1,600 ($8,000 qualified education expense paid x . How to file 1040x amended return 20). How to file 1040x amended return You claimed no other tax credits. How to file 1040x amended return After you filed your return, your child withdrew from two courses and you received a refund of $1,400. How to file 1040x amended return You must refigure your 2013 lifetime learning credit using $6,600 ($8,000 qualified education expenses − $1,400 refund). How to file 1040x amended return The refigured credit is $1,320 and your tax liability increased by $280. How to file 1040x amended return You must include the difference of $280 ($1,600 credit originally claimed − $1,320 refigured credit) as additional tax on your 2014 income tax return. How to file 1040x amended return See the instructions for your 2014 income tax return to determine where to include this tax. How to file 1040x amended return If you also pay qualified education expenses in 2014 for an academic period that begins in the first 3 months of 2014 and you receive tax-free educational assistance, or a refund, as described above, you may choose to reduce your qualified education expenses for 2014 instead of reducing your expenses for 2013. How to file 1040x amended return Amounts that do not reduce qualified education expenses. How to file 1040x amended return   Do not reduce qualified education expenses by amounts paid with funds the student receives as: Payment for services, such as wages, A loan, A gift, An inheritance, or A withdrawal from the student's personal savings. How to file 1040x amended return   Do not reduce the qualified education expenses by any scholarship or fellowship reported as income on the student's tax return in the following situations. How to file 1040x amended return The use of the money is restricted, by the terms of the scholarship or fellowship, to costs of attendance (such as room and board) other than qualified education expenses, as defined in Chapter 1 of Pub. How to file 1040x amended return 970. How to file 1040x amended return The use of the money is not restricted. How to file 1040x amended return   For examples, see chapter 2 in Pub. How to file 1040x amended return 970. How to file 1040x amended return Figure 35-A. How to file 1040x amended return Can You Claim an Education Credit for 2013? This image is too large to be displayed in the current screen. How to file 1040x amended return Please click the link to view the image. How to file 1040x amended return Figure 35-A. How to file 1040x amended return Can You Claim an Education Credit for 2013? Prev  Up  Next   Home   More Online Publications