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Irs E File 1040 Ez

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Irs E File 1040 Ez

Irs e file 1040 ez 13. Irs e file 1040 ez   Base de Bienes Table of Contents Introduction Useful Items - You may want to see: Base de CostoBienes Raíces Base AjustadaAumentos a la Base Disminuciones a la Base Base Distinta al CostoBienes Recibidos por Servicios Intercambios Sujetos a Impuestos Conversiones Involuntarias Intercambios no Sujetos a Impuestos Bienes Traspasados de un Cónyuge Bienes Recibidos como Donación Bienes Heredados Bienes de Uso Personal Cambiados a Uso Comercial o de Alquiler Acciones y Bonos Introduction Este capítulo explica cómo calcular la base de bienes. Irs e file 1040 ez Se divide en las siguientes secciones: Base de costo. Irs e file 1040 ez Base ajustada. Irs e file 1040 ez Base distinta al costo. Irs e file 1040 ez Su base es la cantidad de inversión en bienes para propósitos no sujetos a impuestos. Irs e file 1040 ez Use la base para calcular las pérdidas o ganancias provenientes de la venta, intercambio u otra enajenación de bienes. Irs e file 1040 ez Además, use la base para calcular las deducciones por depreciación, amortización, agotamiento y pérdidas fortuitas. Irs e file 1040 ez Si usa bienes para propósitos tanto comerciales como de inversión y personales, tiene que distribuir la base de acuerdo con el uso. Irs e file 1040 ez Sólo se puede depreciar la base asignada al uso comercial o de inversión de los bienes. Irs e file 1040 ez Su base original de los bienes se ajusta (aumenta o disminuye) según ciertos hechos. Irs e file 1040 ez Por ejemplo, si realiza mejoras a los bienes, aumente la base. Irs e file 1040 ez Si hace deducciones por depreciación o pérdidas fortuitas, o reclama ciertos créditos, reduzca la base. Irs e file 1040 ez Mantenga documentación precisa de todos los artículos que afecten la base de sus bienes. Irs e file 1040 ez Para más información sobre cómo mantener dicha documentación, consulte el capítulo 1 . Irs e file 1040 ez Useful Items - You may want to see: Publicación 15-B Employer's Tax Guide to Fringe Benefits (Guía tributaria sobre beneficios marginales para empleadores), en inglés 525 Taxable and Nontaxable Income (Ingresos sujetos a impuestos y no sujetos a impuestos), en inglés 535 Business Expenses (Gastos de negocio), en inglés 537 Installment Sales (Ventas a plazos), en inglés 544 Sales and Other Dispositions of Assets (Ventas y otras enajenaciones de activos), en inglés 550 Investment Income and Expenses (Ingresos y gastos de inversión), en inglés 551 Basis of Assets (Base de activos), en inglés 946 How To Depreciate Property (Cómo depreciar los bienes), en inglés Base de Costo La base de los bienes comprados normalmente es el costo de dichos bienes. Irs e file 1040 ez El costo es la cantidad que usted paga en efectivo, obligaciones de deuda, otros bienes o servicios. Irs e file 1040 ez Éste también puede incluir cantidades que paga por los siguientes artículos: Impuesto sobre ventas, Flete, Instalación y pruebas, Impuestos sobre artículos de uso y consumo, Honorarios legales y contables (cuando se tienen que capitalizar), Timbres de recaudación de impuestos, Costos de registro e Impuestos sobre bienes raíces (si usted los asume por el vendedor). Irs e file 1040 ez Además, la base de activos de bienes raíces y de negocios puede incluir otros artículos. Irs e file 1040 ez Préstamos con intereses bajos o sin intereses. Irs e file 1040 ez    Si compra bienes con un plan de pago a plazos con bajos intereses o sin intereses, la base de los bienes es el precio de compra establecido menos las cantidades consideradas intereses no establecidos. Irs e file 1040 ez Por lo general, se tienen intereses no establecidos si la tasa de interés es menor que la tasa federal correspondiente. Irs e file 1040 ez   Para obtener más información, consulte Unstated Interest and Original Issue Discount (OID) (Intereses no establecidos y descuento de la emisión original (OID, por sus siglas en inglés)) en la Publicación 537, en inglés. Irs e file 1040 ez Bienes Raíces Los bienes raíces, conocidos también como bienes inmuebles, consisten en tierra y, normalmente, todo lo que esté construido sobre esta tierra, lo que crezca en ella y todo lo instalado en ésta. Irs e file 1040 ez Si compra bienes raíces, algunos honorarios y otros gastos que usted pague son parte de la base de costo de los bienes. Irs e file 1040 ez Compra por suma global. Irs e file 1040 ez   Si compra edificios junto con la tierra por una suma global, asigne la base del costo entre la tierra y los edificios. Irs e file 1040 ez Asigne el costo según los valores justos de mercado (FMV, por sus siglas en inglés) respectivos de la tierra y los edificios al momento de la compra. Irs e file 1040 ez Calcule la base de cada uno de los activos multiplicando la suma global por una fracción. Irs e file 1040 ez El numerador es el valor justo de mercado de dicho activo y el denominador es el valor justo de mercado de los bienes en su totalidad al momento de la compra. Irs e file 1040 ez    Si no está seguro del valor justo de mercado de la tierra y los edificios, puede asignar la base de dichos bienes conforme a sus valores tasados para propósitos del impuesto sobre bienes raíces. Irs e file 1040 ez Valor justo de mercado (FMV). Irs e file 1040 ez   El valor justo de mercado (FMV, por sus siglas en inglés) es el precio por el cual los bienes cambian de propietario entre un comprador y un vendedor, cuando ninguno tiene la obligación de comprar o vender y cuando ambos tienen conocimiento razonable de todo hecho necesario. Irs e file 1040 ez Las ventas de bienes similares alrededor de la misma fecha pueden ser útiles para calcular el valor justo de mercado de los bienes. Irs e file 1040 ez Asunción de hipoteca. Irs e file 1040 ez   Si compra bienes y asume una hipoteca existente sobre los bienes (o si compra bienes sujetos a hipoteca), su base incluye la cantidad que paga por los bienes más la cantidad que se tiene que pagar sobre la hipoteca. Irs e file 1040 ez Cargos de liquidación. Irs e file 1040 ez   Su base incluye los cargos de liquidación y los costos de cierre que pagó por comprar los bienes. Irs e file 1040 ez Un cargo por comprar bienes es un costo que se tiene que pagar aun si compra los bienes en efectivo. Irs e file 1040 ez No incluya en su base cargos ni costos por obtener un préstamo sobre los bienes. Irs e file 1040 ez   Los siguientes son algunos de los cargos por liquidación o costos de cierre que puede incluir en la base de los bienes: Cargos por investigación del título de propiedad. Irs e file 1040 ez Cargos por conexión de servicios públicos. Irs e file 1040 ez Cargos por trámites legales (incluyendo cargos por la búsqueda del título y la preparación del contrato de compraventa y la escritura). Irs e file 1040 ez Costos de registro. Irs e file 1040 ez Cargos por estudios topográficos. Irs e file 1040 ez Impuestos de traspaso. Irs e file 1040 ez Seguro de título de la propiedad. Irs e file 1040 ez Cantidades que adeuda el vendedor y que usted acuerda pagar, como impuestos o intereses atrasados, costos de registro y cargos hipotecarios, cargos por mejoras o reparaciones y comisiones por ventas. Irs e file 1040 ez   Los costos de liquidación no incluyen cantidades puestas en depósito para el pago futuro de gastos como impuestos y seguro. Irs e file 1040 ez   Los siguientes son algunos de los cargos por liquidación y costos de cierre que no puede incluir en la base de los bienes: Primas de un seguro contra hechos fortuitos. Irs e file 1040 ez Alquiler por ocupación de la propiedad antes del cierre. Irs e file 1040 ez Cargos por servicios públicos u otros servicios relacionados con la ocupación de la propiedad antes del cierre. Irs e file 1040 ez Cargos relacionados con la obtención de un préstamo, tales como puntos (puntos de descuento, costos originarios del préstamo), primas de seguro hipotecario, cargos por asunción del préstamo, costo de un informe de crédito y cargos por una tasación que sea requisito del prestamista. Irs e file 1040 ez Cargos por refinanciamiento de una hipoteca. Irs e file 1040 ez Impuestos sobre bienes raíces. Irs e file 1040 ez   Si paga los impuestos sobre bienes raíces que el vendedor adeudaba sobre los bienes raíces que usted compró y el vendedor no se los reembolsa, considere estos impuestos como parte de su base. Irs e file 1040 ez No puede deducirlos como gasto. Irs e file 1040 ez    Si le reembolsa al vendedor los impuestos que éste pagó por usted, normalmente puede deducir la cantidad como gasto en el año de la compra. Irs e file 1040 ez No incluya esta cantidad en la base de bienes. Irs e file 1040 ez Si no se los reembolsa al vendedor, tiene que restar esos impuestos de su base. Irs e file 1040 ez Puntos. Irs e file 1040 ez   Si paga puntos para obtener un préstamo (incluyendo una hipoteca, una segunda hipoteca, una línea de crédito o un préstamo sobre el valor neto de la vivienda), no sume los puntos a la base de los bienes correspondientes. Irs e file 1040 ez Normalmente, los puntos se deducen a lo largo del plazo del préstamo. Irs e file 1040 ez Para más información sobre cómo deducir puntos, consulte el capítulo 23 . Irs e file 1040 ez Puntos de hipoteca de vivienda. Irs e file 1040 ez   Le pueden corresponder reglas especiales sobre los puntos que usted y el vendedor paguen cuando usted obtenga una hipoteca para comprar su vivienda principal. Irs e file 1040 ez Si se cumplen ciertos requisitos, puede deducir los puntos en su totalidad para el año en que se pagaron. Irs e file 1040 ez Reduzca la base de su vivienda por los puntos que pagó el vendedor. Irs e file 1040 ez Base Ajustada Antes de calcular las pérdidas o ganancias de una venta, intercambio u otra enajenación de bienes o de calcular la depreciación, agotamiento o amortización permisibles, por regla general, tiene que realizar ciertos ajustes (aumentos o disminuciones) a la base del costo o base distinta al costo (explicadas más adelante) de los bienes. Irs e file 1040 ez El resultado de estos ajustes a la base es la base ajustada. Irs e file 1040 ez Aumentos a la Base Aumente la base de los bienes por todos los artículos correctamente sumados a una cuenta de capital. Irs e file 1040 ez Ejemplos de artículos que aumentan la base se encuentran en la Tabla 13-1. Irs e file 1040 ez Algunos de estos artículos se explican a continuación. Irs e file 1040 ez Mejoras. Irs e file 1040 ez   Sume a su base de los bienes el costo de las mejoras que tengan vida útil de más de 1 año, si éstas aumentan el valor de los bienes, prolongan su vida útil o los adaptan para un uso diferente. Irs e file 1040 ez Por ejemplo, las mejoras incluyen la instalación de una sala de recreación en un sótano no terminado, la construcción de un baño o dormitorio adicional, la colocación de una cerca, la instalación de nueva plomería o cableado, la instalación de un nuevo tejado o la pavimentación de la entrada de autos. Irs e file 1040 ez Gravámenes por mejoras locales. Irs e file 1040 ez   Sume a la base de los bienes los cargos por mejoras como calles y aceras o banquetas, si éstas aumentan el valor de los bienes. Irs e file 1040 ez No deduzca dichos cargos como impuestos. Irs e file 1040 ez Sin embargo, puede deducir como impuestos los cargos por mantenimiento, reparaciones o cargos de intereses relacionados con las mejoras. Irs e file 1040 ez Ejemplo. Irs e file 1040 ez El ayuntamiento transforma la calle ubicada frente a su tienda en un paseo peatonal y le tasa un gravamen a la propiedad de usted y a las de otros propietarios afectados por el costo del cambio de la calle. Irs e file 1040 ez Sume dicho cargo a la base de sus bienes. Irs e file 1040 ez En este ejemplo, el cargo es un activo depreciable. Irs e file 1040 ez Disminuciones a la Base Reduzca la base de bienes por todo lo que represente un rendimiento de capital en el período durante el cual tuvo los bienes. Irs e file 1040 ez Los ejemplos de artículos que reducen la base se encuentran en la Tabla 13-1. Irs e file 1040 ez Algunos de estos artículos se explican a continuación. Irs e file 1040 ez Tabla 13-1. Irs e file 1040 ez Ejemplos de Ajustes a la Base Aumentos a la Base Disminuciones a la Base • Mejoras de capital: • Exclusión en los ingresos de subsidios  por sistemas de ahorro de energía   Ampliación de la vivienda     Instalación de un tejado completo     Pavimentación de la entrada de autos • Deducciones por pérdidas fortuitas o  por robo y reembolsos de seguros   Instalación de aire acondicionado central     Cambio del cableado en la vivienda         • Gravámenes por mejoras locales: • Ganancia aplazada de la venta de una  vivienda   Conexiones de agua     Extensión de cables de servicios públicos   hasta la propiedad • Crédito por vehículos con motor  alternativo (Formulario 8910)   Banquetas o aceras     Calles       • Crédito por bienes para recargar  vehículos de combustible alternativo   (Formulario 8911)             • Pérdidas por hechos fortuitos:  Restauración de bienes dañados   • Créditos por energía eficaz  residencial (Formulario 5695)         • Depreciación y deducción conforme a  la sección 179       • Honorarios legales: • Distribuciones de sociedades  anónimas no sujetos a impuestos   Costo de defender y perfeccionar un título   de propiedad     Honorarios por obtener la reducción de un   gravamen del ayuntamiento • Determinadas deudas canceladas  excluidas de los ingresos       • Costos de zonificación • Servidumbres (derechos de acceso  a la propiedad)         • Beneficios tributarios por adopción Pérdidas por hecho fortuito y robo. Irs e file 1040 ez   Si tiene pérdidas por hecho fortuito o por robo, reste de la base de los bienes el dinero del seguro u otros reembolsos y las pérdidas deducibles no cubiertas por el seguro. Irs e file 1040 ez    Tiene que aumentar la base de los bienes por la cantidad que gaste en reparaciones que restauren los bienes a su condición previa al hecho fortuito. Irs e file 1040 ez   Para obtener más información acerca de las pérdidas fortuitas y por robo, consulte el capítulo 25 . Irs e file 1040 ez Depreciación y deducción conforme a la sección 179. Irs e file 1040 ez   Reste de la base de la propiedad comercial calificada las deducciones que haya declarado conforme a la sección 179 y la depreciación que haya deducido, o pudo haber deducido (incluyendo todo descuento especial por depreciación), en la declaración de impuestos según el método de depreciación que seleccionó. Irs e file 1040 ez   Para obtener más información acerca de la depreciación y la deducción conforme a la sección 179, consulte la Publicación 946 y las Instrucciones del Formulario 4562, ambas en inglés. Irs e file 1040 ez Ejemplo. Irs e file 1040 ez Usted fue propietario de un dúplex usado como vivienda de alquiler que le costó $40,000, de los cuales $35,000 fueron asignados al edificio y $5,000 al terreno. Irs e file 1040 ez Hizo una ampliación al dúplex que costó $10,000. Irs e file 1040 ez En febrero del año pasado, el dúplex sufrió daños por un incendio. Irs e file 1040 ez Hasta ese momento, usted había descontado una depreciación de $23,000. Irs e file 1040 ez Vendió algunos materiales rescatados del siniestro por $1,300 y cobró $19,700 de la compañía de seguros. Irs e file 1040 ez Dedujo una pérdida fortuita de $1,000 en su declaración de impuestos sobre el ingreso del año pasado. Irs e file 1040 ez Gastó $19,000 del dinero del seguro para la restauración del dúplex, que se completó este año. Irs e file 1040 ez Tiene que usar la base ajustada del dúplex después de la restauración para determinar la depreciación para el resto del período de recuperación de la propiedad. Irs e file 1040 ez Calcule la base ajustada del dúplex de la siguiente manera: Costo original del dúplex $35,000 Ampliación hecha al dúplex 10,000 Costo total del dúplex $45,000 Menos: Depreciación 23,000 Base ajustada antes del hecho fortuito $22,000 Menos: Dinero del seguro $19,700     Pérdida fortuita deducida 1,000     Materiales rescatados 1,300 22,000 Base ajustada después del hecho fortuito $-0- Sume: Costo de restauración del dúplex 19,000 Base ajustada después de la restauración $19,000 Nota: La base del terreno es el costo original de $5,000. Irs e file 1040 ez Servidumbres (derechos de acceso a la propiedad). Irs e file 1040 ez   La cantidad recibida por otorgar una servidumbre normalmente se considera ganancia de la venta de una participación en bienes raíces. Irs e file 1040 ez Esto reduce la base de la parte afectada de los bienes. Irs e file 1040 ez Si la cantidad recibida es mayor que la base de la parte de la propiedad afectada por la servidumbre, reduzca su base de esa parte a cero y considere el remanente como una ganancia reconocida. Irs e file 1040 ez   Si la ganancia es sobre bienes de capital, consulte el capítulo 16 para obtener más información acerca de cómo declararla. Irs e file 1040 ez Si la ganancia es sobre bienes usados en una ocupación o negocio, consulte la Publicación 544, en inglés, para obtener información acerca de cómo declararla. Irs e file 1040 ez Exclusión de subsidios por sistemas de ahorro de energía. Irs e file 1040 ez   Puede excluir del ingreso bruto todo subsidio recibido de una compañía de servicios públicos por la compra o instalación de un sistema de ahorro de energía para una vivienda. Irs e file 1040 ez De la base de los bienes para los cuales recibió el subsidio, reste la cantidad excluida. Irs e file 1040 ez Para obtener más información acerca de este subsidio, consulte el capítulo 12 . Irs e file 1040 ez Ganancia aplazada de la venta de una vivienda. Irs e file 1040 ez    Si aplazó la ganancia de la venta de su vivienda principal según las reglas en vigencia antes del 7 de mayo de 1997, tiene que restar la ganancia aplazada de la base de la vivienda que adquirió como reposición. Irs e file 1040 ez Para obtener más información acerca de las reglas sobre la venta de una vivienda, vea el capítulo 15 . Irs e file 1040 ez Base Distinta al Costo En muchas ocasiones, no puede usar el costo como base. Irs e file 1040 ez En estos casos, se puede usar el valor justo de mercado o la base ajustada de los bienes. Irs e file 1040 ez El valor justo de mercado y la base ajustada se explican en secciones anteriores. Irs e file 1040 ez Bienes Recibidos por Servicios Si recibe bienes por sus servicios, incluya el valor justo de mercado de dichos bienes en los ingresos. Irs e file 1040 ez La cantidad que incluye en los ingresos es la base. Irs e file 1040 ez Si los servicios se prestaron por un precio acordado con anticipación, éste se aceptará como el valor justo de mercado de los bienes si no existen pruebas de lo contrario. Irs e file 1040 ez Bienes restringidos. Irs e file 1040 ez   Si recibe bienes por sus servicios y los bienes están sujetos a ciertas restricciones, la base de los bienes es el valor justo de mercado en el momento en que estén sustancialmente establecidos sus derechos a dichos bienes. Irs e file 1040 ez Sin embargo, esta regla no corresponde si elige incluir en los ingresos el valor justo de mercado de los bienes en el momento en que se le traspasen dichos bienes, menos la cantidad que pagó por éstos. Irs e file 1040 ez Su derecho sobre esos bienes están sustancialmente establecidos cuando dichos bienes se pueden traspasar o cuando no están sujetos a un riesgo importante de pérdida (es decir, usted tiene pocas probabilidades de perderlos). Irs e file 1040 ez Para obtener más información, consulte Restricted Property (Bienes restringidos) en la Publicación 525, en inglés. Irs e file 1040 ez Compra por valor inferior. Irs e file 1040 ez   Una compra por valor inferior es una compra de un artículo por un valor menor que su valor justo de mercado. Irs e file 1040 ez Si, como compensación por servicios, compra productos u otros bienes por un valor menor al valor justo de mercado, incluya en su ingreso la diferencia entre el precio de compra y el valor justo de mercado de los bienes. Irs e file 1040 ez La base de los bienes es el valor justo de mercado (precio de compra más la cantidad que se incluye en los ingresos). Irs e file 1040 ez   Si la diferencia entre el precio de compra y el valor justo de mercado es un descuento al empleado, no incluya la diferencia en los ingresos. Irs e file 1040 ez Sin embargo, la base de los bienes sigue siendo el valor justo de mercado. Irs e file 1040 ez Consulte Employee Discounts (Descuentos del empleado) en la Publicación 15-B, en inglés. Irs e file 1040 ez Intercambios Sujetos a Impuestos Un intercambio sujeto a impuestos es aquel intercambio en el que la ganancia está sujeta a impuestos o la pérdida es deducible. Irs e file 1040 ez Una ganancia sujeta a impuestos o pérdida deducible también se conoce como ganancia o pérdida reconocida. Irs e file 1040 ez Si recibe bienes como intercambio por otros bienes a través de un intercambio sujeto a impuestos, normalmente la base de los bienes que recibe es el valor justo de mercado al momento del intercambio. Irs e file 1040 ez Conversiones Involuntarias Si recibe bienes de reposición como resultado de una conversión involuntaria, tal como un hecho fortuito, robo o expropiación forzosa, calcule la base de los bienes de reposición usando la base de los bienes convertidos. Irs e file 1040 ez Bienes similares o afines. Irs e file 1040 ez   Si recibe bienes de reposición similares o afines en servicio o uso a los bienes convertidos, la base de los bienes de reposición es la misma que la base de los bienes convertidos en la fecha de la conversión, con los siguientes ajustes: Reduzca la base por lo siguiente: Toda pérdida que reconozca en la conversión involuntaria. Irs e file 1040 ez Todo dinero que reciba y que no gaste en bienes afines. Irs e file 1040 ez Aumente la base por lo siguiente: Toda ganancia que reconozca en la conversión involuntaria. Irs e file 1040 ez Todo costo de adquisición de los bienes de reposición. Irs e file 1040 ez Dinero o bienes no similares ni afines. Irs e file 1040 ez    Si recibe dinero o bienes no similares o no afines en servicio o uso a los bienes convertidos y compra bienes de reposición similares o afines en servicio o uso a los bienes convertidos, la base de los bienes de reposición es el costo menos la ganancia no reconocida en la conversión. Irs e file 1040 ez Ejemplo. Irs e file 1040 ez El estado expropió sus bienes. Irs e file 1040 ez La base ajustada de los bienes era $26,000 y el estado le pagó $31,000 por éstos. Irs e file 1040 ez Usted obtuvo una ganancia de $5,000 ($31,000 − $26,000). Irs e file 1040 ez Por $29,000 compró bienes de reposición similares en uso a los bienes convertidos. Irs e file 1040 ez Obtiene una ganancia de $2,000 ($31,000 − $29,000), la parte no gastada del pago que recibió del estado. Irs e file 1040 ez Su ganancia no reconocida es $3,000, la diferencia entre los $5,000 de ganancia obtenida y los $2,000 de ganancia reconocida. Irs e file 1040 ez La base de los bienes de reposición se calcula de la siguiente manera: Costo de los bienes de reposición $29,000 Menos: Ganancia no reconocida 3,000 Base de los bienes de reposición $26,000 Cómo distribuir la base. Irs e file 1040 ez   Si compra más de una propiedad de reposición, distribuya la base entre los bienes de acuerdo con los costos respectivos. Irs e file 1040 ez Base de depreciación. Irs e file 1040 ez   Hay reglas especiales para determinar y depreciar la base de los bienes MACRS (Sistema modificado de recuperación acelerada de costos) adquiridos en una conversión involuntaria. Irs e file 1040 ez Para información, vea What Is the Basis of Your Depreciable Property? (¿Cuál es la base de los bienes depreciables?), en el capítulo 1 de la Publicación 946, en inglés. Irs e file 1040 ez Intercambios no Sujetos a Impuestos Un intercambio no sujeto a impuestos es aquel intercambio en el que no se gravan las ganancias y no se pueden deducir las pérdidas. Irs e file 1040 ez Si recibe bienes por intercambio no sujetos a impuestos, normalmente la base es la misma que la base de los bienes que traspasó. Irs e file 1040 ez Consulte Canjes no Sujetos a Impuestos en el capítulo 14. Irs e file 1040 ez Intercambios de Bienes del Mismo Tipo El intercambio de bienes del mismo tipo es la clase más común de intercambio no sujeto a impuestos. Irs e file 1040 ez Para considerarse intercambio de bienes del mismo tipo, tanto los bienes canjeados como los bienes recibidos tienen que ser los siguientes: Bienes calificados. Irs e file 1040 ez Bienes del mismo tipo. Irs e file 1040 ez La base de los bienes que recibe normalmente es la misma que la base ajustada de los bienes que traspase. Irs e file 1040 ez Si canjea los bienes en un intercambio de bienes del mismo tipo y también paga dinero, la base de los bienes recibidos es la base ajustada de los bienes que entregó más el dinero que pagó. Irs e file 1040 ez Bienes calificados. Irs e file 1040 ez   En un intercambio de bienes del mismo tipo, tiene que mantener para inversión o uso productivo en su ocupación o negocio tanto los bienes que traspase como los bienes que reciba. Irs e file 1040 ez Bienes del mismo tipo. Irs e file 1040 ez   Tiene que haber un intercambio de bienes del mismo tipo. Irs e file 1040 ez Los bienes del mismo tipo son bienes de la misma naturaleza o carácter, aun si son de grado o calidad diferente. Irs e file 1040 ez El intercambio de bienes raíces por bienes raíces, o de bienes muebles por bienes muebles similares, es un intercambio de bienes del mismo tipo. Irs e file 1040 ez Ejemplo. Irs e file 1040 ez Usted canjea un camión viejo que usó en su negocio con una base ajustada de $1,700 por un camión nuevo que tiene un costo de $6,800. Irs e file 1040 ez El concesionario le hace un descuento de $2,000 por el camión viejo y usted paga $4,800. Irs e file 1040 ez Esto es un ejemplo de un intercambio de bienes del mismo tipo. Irs e file 1040 ez La base del camión nuevo es $6,500 (la base ajustada del camión viejo, $1,700, más la cantidad que pagó, $4,800). Irs e file 1040 ez Si vende el camión viejo a un tercero por $2,000, en lugar de hacer un canje y luego comprar un camión nuevo a un concesionario, usted tiene una ganancia sujeta a impuestos de $300 sobre la venta (el precio de venta de $2,000 menos la base ajustada de $1,700). Irs e file 1040 ez La base del camión nuevo es el precio que paga al concesionario. Irs e file 1040 ez Intercambios parcialmente no sujetos a impuestos. Irs e file 1040 ez   Un intercambio parcialmente no sujeto a impuestos es un intercambio en el que usted recibe bienes que no son del mismo tipo o dinero, además de bienes del mismo tipo. Irs e file 1040 ez La base de los bienes que recibe es igual a la base ajustada total de los bienes que traspasó, con los siguientes ajustes: Reduzca la base por lo siguiente: Todo el dinero que reciba. Irs e file 1040 ez Todas las pérdidas que reconozca en el intercambio. Irs e file 1040 ez Aumente la base por lo siguiente: Todos los costos adicionales en los que incurra. Irs e file 1040 ez Todas las ganancias que reconozca en el intercambio. Irs e file 1040 ez Si la otra parte implicada en el intercambio asume las deudas que le pertenecen a usted, trate la asunción de deuda como dinero que usted recibió en el intercambio. Irs e file 1040 ez Asignación de la base. Irs e file 1040 ez   Si recibe tanto bienes del mismo tipo como bienes que no son del mismo tipo en el intercambio, asigne la base primero a los bienes que no sean del mismo tipo, excepto dinero, hasta su valor justo de mercado en la fecha del intercambio. Irs e file 1040 ez El resto es la base de los bienes del mismo tipo. Irs e file 1040 ez Información adicional. Irs e file 1040 ez   Para obtener más información, consulte Like-Kind Exchanges (Intercambios de bienes del mismo tipo) en el capítulo 1 de la Publicación 544, en inglés. Irs e file 1040 ez Base de depreciación. Irs e file 1040 ez   Hay reglas especiales para determinar y depreciar la base de los bienes MACRS adquiridos en un intercambio de bienes del mismo tipo. Irs e file 1040 ez Para información, vea What Is the Basis of Your Depreciable Property? (¿Cuál es la base de los bienes depreciables?), en el capítulo 1 de la Publicación 946, en inglés. Irs e file 1040 ez Bienes Traspasados de un Cónyuge La base de los bienes traspasados a usted o traspasados en fideicomiso para su beneficio por su cónyuge es la misma base que la base ajustada de su cónyuge. Irs e file 1040 ez Se aplica la misma regla a un traspaso efectuado por su ex cónyuge en relación con su divorcio. Irs e file 1040 ez Sin embargo, para bienes traspasados en fideicomiso, ajuste la base según las ganancias reconocidas por su cónyuge o ex cónyuge si las obligaciones asumidas, más las obligaciones a las que están sujetos los bienes, son mayores que la base ajustada de los bienes traspasados. Irs e file 1040 ez Si los bienes que le son traspasados son bonos de ahorros estadounidenses de la serie E, serie EE o serie I, el cesionario tiene que incluir en el ingreso los intereses devengados a la fecha del traspaso. Irs e file 1040 ez Su base en los bonos, inmediatamente después del traspaso, es igual a la base del cesionario más el ingreso de intereses que se pueda incluir en el ingreso del cesionario. Irs e file 1040 ez Para obtener más información acerca de estos bonos, consulte el capítulo 7 . Irs e file 1040 ez Al momento del traspaso, el cesionario tiene que entregarle la documentación necesaria para determinar la base ajustada y el período de tenencia de los bienes a partir de la fecha de traspaso. Irs e file 1040 ez Para obtener más información acerca del traspaso de bienes de un cónyuge, consulte el capítulo 14 . Irs e file 1040 ez Bienes Recibidos como Donación Para calcular la base de una propiedad recibida como donación, tiene que conocer la base ajustada del donante justo antes de la donación, el valor justo de mercado de esta propiedad al momento en que se dona y los impuestos sobre donaciones pagados por dicha propiedad. Irs e file 1040 ez Valor justo de mercado menor que la base ajustada del donante. Irs e file 1040 ez   Si el valor justo de mercado de los bienes al momento de la donación es menor que la base ajustada del donante, la base depende de si usted tiene ganancias o pérdidas cuando enajene los bienes. Irs e file 1040 ez Su base para calcular ganancias es la misma que la base ajustada del donante más o menos los ajustes requeridos a la base mientras usted tenía los bienes. Irs e file 1040 ez Su base para calcular pérdidas es el valor justo de mercado cuando recibió la donación más o menos los ajustes requeridos a la base mientras usted tenía los bienes. Irs e file 1040 ez Vea Base Ajustada , anteriormente. Irs e file 1040 ez Ejemplo. Irs e file 1040 ez Usted recibió un acre de terreno como donación. Irs e file 1040 ez Al momento de la donación, el terreno tenía un valor justo de mercado de $8,000. Irs e file 1040 ez La base ajustada del donante era $10,000. Irs e file 1040 ez Después de recibir los bienes, no sucedió nada que aumentara ni disminuyera la base de los mismos. Irs e file 1040 ez Si posteriormente usted vende los bienes por $12,000, tendrá una ganancia de $2,000 porque tiene que usar la base ajustada del donante al momento de la donación ($10,000) como base para calcular la ganancia. Irs e file 1040 ez Si vende los bienes por $7,000, tendrá una pérdida de $1,000 porque tiene que usar el valor justo de mercado al momento de la donación ($8,000) como base para calcular la pérdida. Irs e file 1040 ez Si el precio de venta está entre $8,000 y $10,000, no tiene ganancias ni pérdidas. Irs e file 1040 ez Bienes comerciales. Irs e file 1040 ez   Si mantiene la donación como bienes comerciales, su base para calcular deducciones por depreciación, agotamiento o amortización es la misma que la base del donante más o menos los ajustes requeridos a la base mientras usted tiene los bienes. Irs e file 1040 ez Valor justo de mercado igual o mayor que la base ajustada del donante. Irs e file 1040 ez   Si el valor justo de mercado de los bienes es igual o mayor que la base ajustada del donante, la base es la base ajustada del donante al momento en que usted recibió la donación. Irs e file 1040 ez Aumente la base por la totalidad o parte de los impuestos sobre donaciones pagados, según la fecha de donación, como se explica más adelante. Irs e file 1040 ez   Además, para calcular las pérdidas o ganancias de una venta u otra enajenación o para calcular deducciones por depreciación, agotamiento o amortización sobre bienes comerciales, tiene que aumentar o reducir la base (la base ajustada del donante) por los ajustes requeridos a la base mientras usted tuvo los bienes. Irs e file 1040 ez Vea Base Ajustada , anteriormente. Irs e file 1040 ez   Si recibió una donación durante el año tributario, aumente la base de la donación (la base ajustada del donante) por la parte del impuesto sobre donaciones pagado sobre esta donación debido al aumento neto en valor de la donación. Irs e file 1040 ez Calcule el aumento multiplicando el impuesto pagado sobre la donación por la siguiente fracción. Irs e file 1040 ez El numerador de la fracción es el aumento neto del valor de la donación y el denominador es la cantidad de la donación. Irs e file 1040 ez   El aumento neto del valor de la donación es el valor justo de mercado de la donación menos la base ajustada del donante. Irs e file 1040 ez La cantidad de la donación es el valor para fines del impuesto sobre la donación después de haber sido reducida por toda exclusión anual y deducción conyugal o caritativa que corresponda a la donación. Irs e file 1040 ez Ejemplo. Irs e file 1040 ez En el año 2013, usted recibió una donación de bienes de su madre que tenía un valor justo de mercado de $50,000. Irs e file 1040 ez La base ajustada de su madre era $20,000. Irs e file 1040 ez La cantidad de la donación para propósitos del impuesto sobre donaciones era $36,000 ($50,000 menos la exclusión anual de $14,000). Irs e file 1040 ez Su madre pagó un impuesto sobre donaciones de $7,320 sobre los bienes. Irs e file 1040 ez La base de usted es $26,076, calculada de la siguiente manera: Valor justo de mercado. Irs e file 1040 ez $50,000 Menos: Base ajustada −20,000 Aumento neto en valor $30,000     Impuesto sobre la donación pagado $7,320 Multiplicado por ($30,000 ÷ $36,000) × 0. Irs e file 1040 ez 83 Impuesto sobre la donación debido al aumento neto en valor $6,076 Base ajustada de los bienes para su madre +20,000 La base de los bienes para usted $26,076 Nota: Si recibió una donación antes de 1977, la base de la donación para usted (la base ajustada del donante) incluye todos los impuestos sobre donaciones pagados sobre ésta. Irs e file 1040 ez Sin embargo, la base no puede ser mayor que el valor justo de mercado de la donación al momento en que se le dio a usted. Irs e file 1040 ez Bienes Heredados Su base en bienes heredados de un difunto que falleció antes del 1 de enero de 2010 o después del 31 de diciembre de 2010, es normalmente uno de los siguientes: El valor justo de mercado de los bienes en la fecha de muerte del difunto. Irs e file 1040 ez El valor justo de mercado en la fecha de valuación alternativa si el representante personal del caudal hereditario elige usar una valuación alternativa. Irs e file 1040 ez El valor según el método de valuación de uso especial para bienes raíces usados en actividades agrícolas o en el ejercicio de un negocio estrechamente controlado por pocos accionistas si se elige para propósitos del impuesto sobre la herencia. Irs e file 1040 ez La base ajustada del terreno del difunto hasta el valor excluido de la herencia sujeto a impuestos del difunto como una servidumbre de conservación calificada. Irs e file 1040 ez Si no hay que presentar una declaración del impuesto federal sobre la herencia, la base de los bienes heredados es el valor tasado en la fecha de fallecimiento para los impuestos estatales sobre la herencia o la transmisión. Irs e file 1040 ez Para obtener más información, consulte las Instrucciones del Formulario 706, United States Estate (and Generation-Skipping Transfer) Tax Return (Declaración del impuesto sobre el patrimonio (y transferencia con salto de generación) de los Estados Unidos), en inglés. Irs e file 1040 ez Bienes heredados de un difunto que falleció en 2010. Irs e file 1040 ez   Si heredó bienes de un difunto que falleció en 2010, pueden aplicarse requisitos especiales. Irs e file 1040 ez Para más información, vea la Publicación 4895, Tax Treatment of Property Acquired From a Decedent Dying in 2010 (Trato tributario de bienes adquiridos de un difunto que falleció en 2010), en inglés. Irs e file 1040 ez Bienes gananciales. Irs e file 1040 ez   En las jurisdicciones donde rigen las leyes de la comunidad de bienes gananciales (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington y Wisconsin), se considera generalmente que cada cónyuge posee la mitad de los bienes gananciales. Irs e file 1040 ez Al fallecer cualquiera de los cónyuges, el total del valor de los bienes gananciales, aún la parte que le pertenece al cónyuge sobreviviente, normalmente se convierte en la base de la totalidad de los bienes. Irs e file 1040 ez Para que esta regla corresponda, por lo menos la mitad del valor de los bienes gananciales tiene que poderse incluir en el patrimonio bruto del difunto, independientemente de si se tiene que presentar o no una declaración sobre la herencia. Irs e file 1040 ez Ejemplo. Irs e file 1040 ez   Usted y su cónyuge tenían bienes gananciales cuya base era $80,000. Irs e file 1040 ez Cuando su cónyuge falleció, la mitad del valor justo de mercado de los bienes gananciales era incluible en el patrimonio de su cónyuge. Irs e file 1040 ez El valor justo de mercado de los intereses de los bienes gananciales era $100,000. Irs e file 1040 ez La base de su mitad de los bienes después de la muerte de su cónyuge es $50,000 (la mitad del valor justo de mercado de $100,000). Irs e file 1040 ez La base de la otra mitad que se pasa a los herederos de su cónyuge también es $50,000. Irs e file 1040 ez   Para más información, vea la Publicación 555, Community Property (Comunidad de bienes gananciales), en inglés. Irs e file 1040 ez Bienes de Uso Personal Cambiados a Uso Comercial o de Alquiler Si tiene bienes para uso personal y luego los cambia a uso comercial o los usa para producir ingresos de alquiler, puede empezar a depreciar dichos bienes al momento del cambio. Irs e file 1040 ez Para hacerlo, tiene que calcular la base para propósitos de depreciación al momento del cambio. Irs e file 1040 ez Un ejemplo de un cambio de bienes de uso personal a uso comercial o de alquiler sería alquilar su antigua vivienda personal. Irs e file 1040 ez Base para propósitos de depreciación. Irs e file 1040 ez   La base para depreciación es la menor de las siguientes cantidades: El valor justo de mercado de los bienes en la fecha del cambio. Irs e file 1040 ez La base ajustada en la fecha del cambio. Irs e file 1040 ez Ejemplo. Irs e file 1040 ez Hace varios años, usted pagó $160,000 por construir su casa en un terreno que costó $25,000. Irs e file 1040 ez Pagó $20,000 por mejoras permanentes a la vivienda y declaró una deducción por pérdidas fortuitas de $2,000 por daños a la vivienda antes de cambiar los bienes a uso de alquiler el año pasado. Irs e file 1040 ez Como el terreno no es depreciable, usted incluye sólo el costo de la vivienda al calcular la base para propósitos de determinar depreciación. Irs e file 1040 ez Su base ajustada en la vivienda, cuando cambió su uso, era $178,000 ($160,000 + $20,000 − $2,000). Irs e file 1040 ez En la misma fecha, su propiedad tenía un valor justo de mercado de $180,000, del cual $15,000 correspondían al terreno y $165,000 a la vivienda. Irs e file 1040 ez La base para calcular la depreciación de la vivienda es el valor justo de mercado en la fecha del cambio ($165,000) ya que es menor que la base ajustada ($178,000). Irs e file 1040 ez Venta de bienes. Irs e file 1040 ez   Si en el futuro usted vende o enajena los bienes cambiados a uso comercial o de alquiler, la base que use dependerá de si calcula pérdidas o ganancias. Irs e file 1040 ez Ganancia. Irs e file 1040 ez   La base para calcular una ganancia es la base ajustada de los bienes en el momento de la venta. Irs e file 1040 ez Ejemplo. Irs e file 1040 ez Suponga los mismos hechos que en el ejemplo anterior, excepto que usted vende los bienes obteniendo una ganancia después de descontar $37,500 por concepto de deducciones por depreciación. Irs e file 1040 ez Su base ajustada para calcular la ganancia es $165,500 ($178,000 + $25,000 (terreno) − $37,500). Irs e file 1040 ez Pérdida. Irs e file 1040 ez   Calcule la base para una pérdida empezando con la base ajustada o el valor justo de mercado de los bienes al momento del cambio a uso comercial o de alquiler, el que sea menor. Irs e file 1040 ez Luego haga ajustes (aumentos y reducciones) para el período después del cambio de uso de los bienes, como se explicó anteriormente bajo Base Ajustada . Irs e file 1040 ez Ejemplo. Irs e file 1040 ez Suponga los mismos hechos que en el ejemplo anterior, excepto que usted vende los bienes con pérdida después de descontar $37,500 por concepto de deducciones por depreciación. Irs e file 1040 ez En este caso, empezaría con el valor justo de mercado en la fecha del cambio a uso de alquiler ($180,000), ya que es menor que la base ajustada de $203,000 ($178,000 + $25,000 (terreno)) en esa fecha. Irs e file 1040 ez Reste de esa cantidad ($180,000) las deducciones por depreciación ($37,500). Irs e file 1040 ez La base para pérdidas es $142,500 ($180,000 − $37,500). Irs e file 1040 ez Acciones y Bonos La base de acciones o bonos que usted compre, por lo general, es el precio de compra más los costos de la compra, como comisiones y costos de registro o de traspaso. Irs e file 1040 ez Si obtiene acciones o bonos por un medio que no sea la compra, la base suele determinarse por el valor justo de mercado o la base ajustada del propietario anterior, como se explica anteriormente. Irs e file 1040 ez Tiene que ajustar la base de las acciones según ciertos hechos que sucedan después de la compra. Irs e file 1040 ez Por ejemplo, si recibe acciones adicionales de dividendos de acciones no sujetas a impuestos o divisiones de acciones, reduzca la base para cada acción, dividiendo la base ajustada de las acciones antiguas entre el número de acciones antiguas y nuevas. Irs e file 1040 ez Esta regla se aplica sólo cuando el número de acciones adicionales recibidas es idéntico al número de acciones tenidas. Irs e file 1040 ez Además, reduzca la base cuando reciba distribuciones no sujetas a impuestos. Irs e file 1040 ez Son un rendimiento de capital. Irs e file 1040 ez Ejemplo. Irs e file 1040 ez En el año 2011, compró 100 acciones de XYZ por $1,000, o sea, a $10 por acción. Irs e file 1040 ez En el año 2012, compró 100 acciones de XYZ por $1,600, o sea, a $16 por acción. Irs e file 1040 ez En el año 2013, XYZ declaró una división de acciones de 2 por 1. Irs e file 1040 ez Ahora tiene 200 acciones con una base de $5 por acción y 200 acciones con una base de $8 por acción. Irs e file 1040 ez Otras bases. Irs e file 1040 ez   Existen otras maneras de calcular la base de acciones o bonos, según cómo los adquirió. Irs e file 1040 ez Para obtener información más detallada, consulte Stocks and Bonds (Acciones y bonos) bajo Basis of Investment Property (Base de bienes de inversión) en el capítulo 4 de la Publicación 550, en inglés. Irs e file 1040 ez Cómo identificar acciones o bonos vendidos. Irs e file 1040 ez   Si puede identificar correctamente las acciones o los bonos que vendió, entonces la base de éstos es el costo u otra base de las acciones o bonos específicos. Irs e file 1040 ez Si compra y vende valores en fechas distintas y en cantidades distintas y no puede identificar correctamente las acciones vendidas, entonces la base de los valores que venda es la base de los valores que adquirió primero. Irs e file 1040 ez Para obtener más información sobre cómo identificar los valores que venda, consulte Stocks and Bonds (Acciones y bonos) bajo Basis of Investment Property (Base de bienes de inversión) en el capítulo 4 de la Publicación 550, en inglés. Irs e file 1040 ez Acciones de fondos mutuos. Irs e file 1040 ez   Si vende acciones de fondos mutuos que adquirió en fechas distintas y a precios distintos, y que dejó en depósito en una cuenta mantenida por un custodio o agente, puede optar por usar una base promedio. Irs e file 1040 ez Para obtener más información, consulte la Publicación 550, en inglés. Irs e file 1040 ez Prima de bonos. Irs e file 1040 ez   Si compra un bono sujeto a impuestos con prima (o sea, a un precio que excede su valor nominal) y elige amortizarla, reste de la base del bono la prima amortizada que deduzca cada año. Irs e file 1040 ez Para obtener más información, consulte Bond Premium Amortization (Amortización de primas de bonos) en el capítulo 3 de la Publicación 550, en inglés. Irs e file 1040 ez Aunque no puede deducir la prima sobre un bono exento de impuestos, tiene que amortizar la prima cada año y restar la cantidad amortizada de la base del bono. Irs e file 1040 ez Descuento de la emisión original (OID) sobre instrumentos de deuda. Irs e file 1040 ez   Tiene que aumentar la base de un instrumento de deuda de un descuento de la emisión original (OID, por sus siglas en inglés) por el OID que incluya en sus ingresos por ese instrumento. Irs e file 1040 ez Consulte Descuento de la emisión original (OID) en el capítulo 7 y la Publicación 1212, Guide to Original Issue Discount (OID) Instruments (Guía de instrumentos del descuento de la emisión original (OID)), en inglés. Irs e file 1040 ez Obligaciones exentas de impuestos. Irs e file 1040 ez    Por lo general, el OID sobre las obligaciones exentas de impuestos no está sujeto a impuestos. Irs e file 1040 ez Sin embargo, cuando enajene una obligación exenta de impuestos emitida después del 3 de septiembre de 1982 y comprada después del 1 de marzo de 1984, tiene que acumular el OID sobre la obligación para determinar su base ajustada. Irs e file 1040 ez El OID acumulado se suma a la base de la obligación para determinar su pérdida o ganancia. Irs e file 1040 ez Consulte el cápitulo 4 de la Publicación 550, en inglés. Irs e file 1040 ez Prev  Up  Next   Home   More Online Publications
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Questions and Answers on 501(c) Organizations

May 15, 2013

The IRS has received a variety of questions related to the exempt organization issues recently raised. Here are some basics on the issue.

1. What are the issues raised in the recent Treasury Inspector General for Tax Administration (“TIGTA”) report?

The issues relate to the application process for organizations seeking tax-exempt status. Part of the IRS’s responsibility is to review applications of organizations seeking tax-exempt status. Section 501(c)(3) organizations are required to get IRS approval. Others, including section 501(c)(4) organizations, are not required to get IRS approval, but often seek it.

2. Do the issues raised in the recent report relate to audits/ examinations?

No, the issues relate to the approval process of organizations that applied to the IRS for recognition of tax-exempt status. 

3. What does the IRS look for in the approval process? 

The IRS’s role is to determine whether organization meets the legal requirements for tax-exempt status. One requirement relates to the amount of political campaign intervention (“political activity”) that tax-exempt organizations may engage in. Section 501(c)(3) organizations are prohibited from engaging in any political activity. Other organizations, including section 501(c)(4) organizations, may only engage in a limited amount of political activity. 

4. Where does an organization send its application for tax-exemption?

All applications are sent to the IRS Determinations Office in Cincinnati. This office receives approximately 70,000 applications for tax-exempt status of all kinds each year. This includes applications from section 501(c)(3) and section 501(c)(4) organizations. This office, which includes fewer than 200 people working directly on applications, is primarily responsible for working determination applications. Determinations staff may consult with tax law specialists in Washington on how the law applies to their case. 

5. Has the IRS seen an increase in the number of applications in which the organization is potentially engaged in political activity?

Yes, the IRS has seen an increase in the number of section 501(c)(4) applications in general. The number of applications has more than doubled in recent years. In addition, the IRS has seen an increase in the number of tax-exempt organization applications in which the organization is potentially engaged in political activity. This includes both section 501(c)(3) and section 501(c)(4) organizations.

6. How did the IRS handle the increase in the number of applications from organizations that appeared to be engaged in political activity?

As done in the past in other situations, such as credit counseling and down payment assistance), the IRS selected cases using identified criteria so that cases needing further review would be worked consistently. This means that cases meeting the selection criteria were centralized and assigned to designated employees developing expertise in the area so that they could be worked in a fair and consistent manner. 

7. How are decisions made regarding what cases should be centralized in this area?

Cases are selected for centralization if there are indications in the application that the organization may engage in political campaign intervention, lobbying, or advocacy. This was done to ensure that the legal requirements related to these activities are applied in a fair and consistent manner. The set of criteria was revised at a later point in order to avoid centralizing pure lobbying organizations that did not require follow-on development. During certain periods (August 2010 to July 2011 and January 2012 to June 2012), specific names, terms and policies (such as Tea Party and Patriot) were inappropriately used as criteria in determining which cases should be centralized. However, case selection during these periods was not limited to these criteria. 

8. What cases were centralized?

The TIGTA report reflects that 300 cases were centralized. Approximately 70 of those cases included the name Tea Party. The remaining cases included organizations of all political views. The current number of centralized cases is approximately 470.

9. Why did IRS employees look at Tea Party organizations?

IRS employees had seen cases of organizations with the name Tea Party in which political activity was an issue that needed to be reviewed for compliance with legal requirements. Because of the increased inventory of applications, this inappropriate criterion was used as a shortcut to centralize similar cases.

10. Would organizations with Tea Party in the name have been centralized if only appropriate selection criteria had been used?

Yes, in most cases the organization would have been centralized based on the information included in the application. The IRS should have focused on this information instead of using a shortcut.

11. Were centralized cases worked differently depending on which selection criteria was used?

No, centralized cases were not worked differently depending on which selection criteria was used.

12. Did mistakes occur in working the centralized cases?

Yes. Applicants whose cases were centralized unfortunately experienced inappropriate delays and over-expansive information requests in some cases. This was caused by ineffective processes and not related to the selection criteria used for the centralization of a case.

13. Is there any evidence of political bias in selecting cases for centralization or in working those cases?

The TIGTA report included no findings of political bias. In addition, the IRS has found no indication of political bias. 

14. How many centralized applications have been approved?

Since centralization, more than 175 applications have been approved to date. As with all applications for tax-exempt status that are approved, the names of organizations whose applications have been approved are publicly available. 

Page Last Reviewed or Updated: 04-Sep-2013

The Irs E File 1040 Ez

Irs e file 1040 ez 8. Irs e file 1040 ez   Gains and Losses Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: Sales and ExchangesDetermining Gain or Loss Like-Kind Exchanges Transfer to Spouse Ordinary or Capital Gain or LossCapital Assets Noncapital Assets Hedging (Commodity Futures) Livestock Converted Wetland and Highly Erodible Cropland Timber Sale of a Farm Foreclosure or Repossession Abandonment Introduction This chapter explains how to figure, and report on your tax return, your gain or loss on the disposition of your property or debt and whether such gain or loss is ordinary or capital. Irs e file 1040 ez Ordinary gain is taxed at the same rates as wages and interest income while capital gain is generally taxed at lower rates. Irs e file 1040 ez Dispositions discussed in this chapter include sales, exchanges, foreclosures, repossessions, canceled debts, hedging transactions, and elections to treat cutting of timber as a sale or exchange. Irs e file 1040 ez Topics - This chapter discusses: Sales and exchanges Ordinary or capital gain or loss Useful Items - You may want to see: Publication 334 Tax Guide for Small Business 523 Selling Your Home 544 Sales and Other Dispositions of Assets 550 Investment Income and Expenses 908 Bankruptcy Tax Guide Form (and Instructions) 982 Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment) Sch D (Form 1040) Capital Gains and Losses Sch F (Form 1040) Profit or Loss From Farming 1099-A Acquisition or Abandonment of Secured Property 1099-C Cancellation of Debt 4797 Sales of Business Property 8949 Sales and Other Dispositions of Capital Assets See chapter 16 for information about getting publications and forms. Irs e file 1040 ez Sales and Exchanges If you sell, exchange, or otherwise dispose of your property, you usually have a gain or a loss. Irs e file 1040 ez This section explains certain rules for determining whether any gain you have is taxable, and whether any loss you have is deductible. Irs e file 1040 ez A sale is a transfer of property for money or a mortgage, note, or other promise to pay money. Irs e file 1040 ez An exchange is a transfer of property for other property or services. Irs e file 1040 ez Determining Gain or Loss You usually realize a gain or loss when you sell or exchange property. Irs e file 1040 ez If the amount you realize from a sale or exchange of property is more than its adjusted basis, you will have a gain. Irs e file 1040 ez If the adjusted basis of the property is more than the amount you realize, you will have a loss. Irs e file 1040 ez Basis and adjusted basis. Irs e file 1040 ez   The basis of property you buy is usually its cost. Irs e file 1040 ez The adjusted basis of property is basis plus certain additions and minus certain deductions. Irs e file 1040 ez See chapter 6 for more information about basis and adjusted basis. Irs e file 1040 ez Amount realized. Irs e file 1040 ez   The amount you realize from a sale or exchange is the total of all money you receive plus the fair market value (FMV) (defined in chapter 6) of all property or services you receive. Irs e file 1040 ez The amount you realize also includes any of your liabilities assumed by the buyer and any liabilities to which the property you transferred is subject, such as real estate taxes or a mortgage. Irs e file 1040 ez   If the liabilities relate to an exchange of multiple properties, see Multiple Property Exchanges in chapter 1 of Publication 544. Irs e file 1040 ez Amount recognized. Irs e file 1040 ez   Your gain or loss realized from a sale or exchange of certain property is usually a recognized gain or loss for tax purposes. Irs e file 1040 ez A recognized gain is a gain you must include in gross income and report on your income tax return. Irs e file 1040 ez A recognized loss is a loss you deduct from gross income. Irs e file 1040 ez However, your gain or loss realized from the exchange of certain property may not be recognized for tax purposes. Irs e file 1040 ez See Like-Kind Exchanges next. Irs e file 1040 ez Also, a loss from the disposition of property held for personal use is not deductible. Irs e file 1040 ez Like-Kind Exchanges Certain exchanges of property are not taxable. Irs e file 1040 ez This means any gain from the exchange is not recognized, and any loss cannot be deducted. Irs e file 1040 ez Your gain or loss will not be recognized until you sell or otherwise dispose of the property you receive. Irs e file 1040 ez The exchange of property for the same kind of property is the most common type of nontaxable exchange. Irs e file 1040 ez To qualify for treatment as a like-kind exchange, the property traded and the property received must be both of the following. Irs e file 1040 ez Qualifying property. Irs e file 1040 ez Like-kind property. Irs e file 1040 ez These two requirements are discussed later. Irs e file 1040 ez Multiple-party transactions. Irs e file 1040 ez   The like-kind exchange rules also apply to property exchanges that involve three and four-party transactions. Irs e file 1040 ez Any part of these multiple-party transactions can qualify as a like-kind exchange if it meets all the requirements described in this section. Irs e file 1040 ez Receipt of title from third party. Irs e file 1040 ez   If you receive property in a like-kind exchange and the other party who transfers the property to you does not give you the title, but a third party does, you can still treat this transaction as a like-kind exchange if it meets all the requirements. Irs e file 1040 ez Basis of property received. Irs e file 1040 ez   If you receive property in a like-kind exchange, the basis of the property will be the same as the basis of the property you gave up. Irs e file 1040 ez See chapter 6 for more information. Irs e file 1040 ez Money paid. Irs e file 1040 ez   If, in addition to giving up like-kind property, you pay money in a like-kind exchange, you still have no recognized gain or loss. Irs e file 1040 ez The basis of the property received is the basis of the property given up, increased by the money paid. Irs e file 1040 ez Example. Irs e file 1040 ez You traded an old tractor with an adjusted basis of $15,000 for a new one. Irs e file 1040 ez The new tractor costs $300,000. Irs e file 1040 ez You were allowed $80,000 for the old tractor and paid $220,000 cash. Irs e file 1040 ez You have no recognized gain or loss on the transaction regardless of the adjusted basis of your old tractor and the basis of the new tractor is $235,000, the adjusted basis of the old tractor plus the cash paid ($15,000 + $220,000). Irs e file 1040 ez If you had sold the old tractor to a third party for $80,000 and bought a new one, you would have a recognized gain or loss on the sale of your old tractor equal to the difference between the amount realized and the adjusted basis of the old tractor. Irs e file 1040 ez In this case, the taxable gain would be $65,000 ($80,000 − $15,000) and the basis of the new tractor would be $300,000. Irs e file 1040 ez Reporting the exchange. Irs e file 1040 ez   Report the exchange of like-kind property, even though no gain or loss is recognized, on Form 8824, Like-Kind Exchanges. Irs e file 1040 ez The Instructions for Form 8824 explain how to report the details of the exchange. Irs e file 1040 ez   If you have any recognized gain because you received money or unlike property, report it on Schedule D (Form 1040) or Form 4797, whichever applies. Irs e file 1040 ez You may also have to report the recognized gain as ordinary income because of depreciation recapture on Form 4797. Irs e file 1040 ez See chapter 9 for more information. Irs e file 1040 ez Qualifying property. Irs e file 1040 ez   In a like-kind exchange, both the property you give up and the property you receive must be held by you for investment or for productive use in your trade or business. Irs e file 1040 ez Machinery, buildings, land, trucks, breeding livestock, rental houses, and certain mutual ditch, reservoir, or irrigation company stock are examples of property that may qualify. Irs e file 1040 ez Nonqualifying property. Irs e file 1040 ez   The rules for like-kind exchanges do not apply to exchanges of the following property. Irs e file 1040 ez Property you use for personal purposes, such as your home and family car. Irs e file 1040 ez Stock in trade or other property held primarily for sale, such as crops and produce. Irs e file 1040 ez Stocks, bonds, or notes. Irs e file 1040 ez However, see Qualifying property above. Irs e file 1040 ez Other securities or evidences of indebtedness, such as accounts receivable. Irs e file 1040 ez Partnership interests. Irs e file 1040 ez However, you may have a nontaxable exchange under other rules. Irs e file 1040 ez See Other Nontaxable Exchanges in chapter 1 of Publication 544. Irs e file 1040 ez Like-kind property. Irs e file 1040 ez   To qualify as a nontaxable exchange, the properties exchanged must be of like kind. Irs e file 1040 ez Like-kind properties are properties of the same nature or character, even if they differ in grade or quality. Irs e file 1040 ez Generally, real property exchanged for real property qualifies as an exchange of like-kind property. Irs e file 1040 ez For example, an exchange of city property for farm property or improved property for unimproved property is a like-kind exchange. Irs e file 1040 ez   An exchange of a tractor for a new tractor is an exchange of like-kind property, and so is an exchange of timber land for crop acreage. Irs e file 1040 ez An exchange of a tractor for acreage, however, is not an exchange of like-kind property. Irs e file 1040 ez The exchange of livestock of one sex for livestock of the other sex is not a like-kind exchange. Irs e file 1040 ez For example, the exchange of a bull for a cow is not a like-kind exchange. Irs e file 1040 ez An exchange of the assets of a business for the assets of a similar business cannot be treated as an exchange of one property for another property. Irs e file 1040 ez    Note. Irs e file 1040 ez Whether you engaged in a like-kind exchange depends on an analysis of each asset involved in the exchange. Irs e file 1040 ez Personal property. Irs e file 1040 ez   Depreciable tangible personal property can be either like kind or like class to qualify for nontaxable exchange treatment. Irs e file 1040 ez Like-class properties are depreciable tangible personal properties within the same General Asset Class or Product Class. Irs e file 1040 ez Property classified in any General Asset Class may not be classified within a Product Class. Irs e file 1040 ez Assets that are not in the same class will qualify as like-kind property if they are of the same nature or character. Irs e file 1040 ez General Asset Classes. Irs e file 1040 ez   General Asset Classes describe the types of property frequently used in many businesses. Irs e file 1040 ez They include, but are not limited to, the following property. Irs e file 1040 ez Office furniture, fixtures, and equipment (asset class 00. Irs e file 1040 ez 11). Irs e file 1040 ez Information systems, such as computers and peripheral equipment (asset class 00. Irs e file 1040 ez 12). Irs e file 1040 ez Data handling equipment except computers (asset class 00. Irs e file 1040 ez 13). Irs e file 1040 ez Automobiles and taxis (asset class 00. Irs e file 1040 ez 22). Irs e file 1040 ez Light general purpose trucks (asset class 00. Irs e file 1040 ez 241). Irs e file 1040 ez Heavy general purpose trucks (asset class 00. Irs e file 1040 ez 242). Irs e file 1040 ez Tractor units for use over-the-road (asset class 00. Irs e file 1040 ez 26). Irs e file 1040 ez Trailers and trailer-mounted containers (asset class 00. Irs e file 1040 ez 27). Irs e file 1040 ez Industrial steam and electric generation and/or distribution systems (asset class 00. Irs e file 1040 ez 4). Irs e file 1040 ez Product Classes. Irs e file 1040 ez   Product Classes include property listed in a 6-digit product class in sectors 31 through 33 of the North American Industry Classification System (NAICS) of the Executive Office of the President, Office of Management and Budget, United States, (NAICS Manual). Irs e file 1040 ez The latest version of the manual can be accessed at www. Irs e file 1040 ez census. Irs e file 1040 ez gov/eos/www/naics/. Irs e file 1040 ez Copies of the printed manual may be purchased from the National Technical Information Service (NTIS) at  www. Irs e file 1040 ez ntis. Irs e file 1040 ez gov/products/naics. Irs e file 1040 ez aspx or by calling 1-800-553-NTIS (1-800-553-6847) or (703) 605-6000. Irs e file 1040 ez A CD-ROM version with search and retrieval software is also available from NTIS. Irs e file 1040 ez    NAICS class 333111, Farm Machinery and Equipment Manufacturing, includes most machinery and equipment used in a farming business. Irs e file 1040 ez Partially nontaxable exchange. Irs e file 1040 ez   If, in addition to like-kind property, you receive money or unlike property in an exchange on which you realize gain, you have a partially nontaxable exchange. Irs e file 1040 ez You are taxed on the gain you realize, but only to the extent of the money and the FMV of the unlike property you receive. Irs e file 1040 ez A loss is not deductible. Irs e file 1040 ez Example 1. Irs e file 1040 ez You trade farmland that cost $30,000 for $10,000 cash and other land to be used in farming with a FMV of $50,000. Irs e file 1040 ez You have a realized gain of $30,000 ($50,000 FMV of new land + $10,000 cash − $30,000 basis of old farmland = $30,000 realized gain). Irs e file 1040 ez However, only $10,000, the cash received, is recognized (included in income). Irs e file 1040 ez Example 2. Irs e file 1040 ez Assume the same facts as in Example 1, except that, instead of money, you received a tractor with a FMV of $10,000. Irs e file 1040 ez Your recognized gain is still limited to $10,000, the value of the tractor (the unlike property). Irs e file 1040 ez Example 3. Irs e file 1040 ez Assume in Example 1 that the FMV of the land you received was only $15,000. Irs e file 1040 ez Your $5,000 loss is not recognized. Irs e file 1040 ez Unlike property given up. Irs e file 1040 ez   If, in addition to like-kind property, you give up unlike property, you must recognize gain or loss on the unlike property you give up. Irs e file 1040 ez The gain or loss is the difference between the FMV of the unlike property and the adjusted basis of the unlike property. Irs e file 1040 ez Like-kind exchanges between related persons. Irs e file 1040 ez   Special rules apply to like-kind exchanges between related persons. Irs e file 1040 ez These rules affect both direct and indirect exchanges. Irs e file 1040 ez Under these rules, if either person disposes of the property within 2 years after the exchange, the exchange is disqualified from nonrecognition treatment. Irs e file 1040 ez The gain or loss on the original exchange must be recognized as of the date of the later disposition. Irs e file 1040 ez The 2-year holding period begins on the date of the last transfer of property that was part of the like-kind exchange. Irs e file 1040 ez Related persons. Irs e file 1040 ez   Under these rules, related persons include, for example, you and a member of your family (spouse, brother, sister, parent, child, etc. Irs e file 1040 ez ), you and a corporation in which you have more than 50% ownership, you and a partnership in which you directly or indirectly own more than a 50% interest of the capital or profits, and two partnerships in which you directly or indirectly own more than 50% of the capital interests or profits. Irs e file 1040 ez   For the complete list of related persons, see Related persons in chapter 2 of Publication 544. Irs e file 1040 ez Example. Irs e file 1040 ez You used a grey pickup truck in your farming business. Irs e file 1040 ez Your sister used a red pickup truck in her landscaping business. Irs e file 1040 ez In December 2012, you exchanged your grey pickup truck, plus $200, for your sister's red pickup truck. Irs e file 1040 ez At that time, the FMV of the grey pickup truck was $7,000 and its adjusted basis was $6,000. Irs e file 1040 ez The FMV of the red pickup truck was $7,200 and its adjusted basis was $1,000. Irs e file 1040 ez You realized a gain of $1,000 (the $7,200 FMV of the red pickup truck, minus the grey pickup truck's $6,000 adjusted basis, minus the $200 you paid). Irs e file 1040 ez Your sister realized a gain of $6,200 (the $7,000 FMV of the grey pickup truck plus the $200 you paid, minus the $1,000 adjusted basis of the red pickup truck). Irs e file 1040 ez However, because this was a like-kind exchange, you recognized no gain. Irs e file 1040 ez Your basis in the red pickup truck was $6,200 (the $6,000 adjusted basis of the grey pickup truck plus the $200 you paid). Irs e file 1040 ez She recognized gain only to the extent of the money she received, $200. Irs e file 1040 ez Her basis in the grey pickup truck was $1,000 (the $1,000 adjusted basis of the red pickup truck minus the $200 received, plus the $200 gain recognized). Irs e file 1040 ez In 2013, you sold the red pickup truck to a third party for $7,000. Irs e file 1040 ez Because you sold it within 2 years after the exchange, the exchange is disqualified from nonrecognition treatment. Irs e file 1040 ez On your tax return for 2013, you must report your $1,000 gain on the 2012 exchange. Irs e file 1040 ez You also report a loss on the sale as $200 (the adjusted basis of the red pickup truck, $7,200 (its $6,200 basis plus the $1,000 gain recognized), minus the $7,000 realized from the sale). Irs e file 1040 ez In addition, your sister must report on her tax return for 2013 the $6,000 balance of her gain on the 2012 exchange. Irs e file 1040 ez Her adjusted basis in the grey pickup truck is increased to $7,000 (its $1,000 basis plus the $6,000 gain recognized). Irs e file 1040 ez Exceptions to the rules for related persons. Irs e file 1040 ez   The following property dispositions are excluded from these rules. Irs e file 1040 ez Dispositions due to the death of either related person. Irs e file 1040 ez Involuntary conversions. Irs e file 1040 ez Dispositions where it is established to the satisfaction of the IRS that neither the exchange nor the disposition has, as a main purpose, the avoidance of federal income tax. Irs e file 1040 ez Multiple property exchanges. Irs e file 1040 ez   Under the like-kind exchange rules, you must generally make a property-by-property comparison to figure your recognized gain and the basis of the property you receive in the exchange. Irs e file 1040 ez However, for exchanges of multiple properties, you do not make a property-by-property comparison if you do either of the following. Irs e file 1040 ez Transfer and receive properties in two or more exchange groups. Irs e file 1040 ez Transfer or receive more than one property within a single exchange group. Irs e file 1040 ez   For more information, see Multiple Property Exchanges in chapter 1 of Publication 544. Irs e file 1040 ez Deferred exchange. Irs e file 1040 ez   A deferred exchange for like-kind property may qualify for nonrecognition of gain or loss. Irs e file 1040 ez A deferred exchange is an exchange in which you transfer property you use in business or hold for investment and later receive like-kind property you will use in business or hold for investment. Irs e file 1040 ez The property you receive is replacement property. Irs e file 1040 ez The transaction must be an exchange of property for property rather than a transfer of property for money used to buy replacement property. Irs e file 1040 ez In addition, the replacement property will not be treated as like-kind property unless certain identification and receipt requirements are met. Irs e file 1040 ez   For more information see Deferred Exchanges in chapter 1 of Publication 544. Irs e file 1040 ez Transfer to Spouse No gain or loss is recognized on a transfer of property from an individual to (or in trust for the benefit of) a spouse, or a former spouse if incident to divorce. Irs e file 1040 ez This rule does not apply if the recipient is a nonresident alien. Irs e file 1040 ez Nor does this rule apply to a transfer in trust to the extent the liabilities assumed and the liabilities on the property are more than the property's adjusted basis. Irs e file 1040 ez Any transfer of property to a spouse or former spouse on which gain or loss is not recognized is not considered a sale or exchange. Irs e file 1040 ez The recipient's basis in the property will be the same as the adjusted basis of the giver immediately before the transfer. Irs e file 1040 ez This carryover basis rule applies whether the adjusted basis of the transferred property is less than, equal to, or greater than either its FMV at the time of transfer or any consideration paid by the recipient. Irs e file 1040 ez This rule applies for determining loss as well as gain. Irs e file 1040 ez Any gain recognized on a transfer in trust increases the basis. Irs e file 1040 ez For more information on transfers of property incident to divorce, see Property Settlements in Publication 504, Divorced or Separated Individuals. Irs e file 1040 ez Ordinary or Capital Gain or Loss Generally, you will have a capital gain or loss if you sell or exchange a capital asset (defined below). Irs e file 1040 ez You may also have a capital gain if your section 1231 transactions result in a net gain. Irs e file 1040 ez See Section 1231 Gains and Losses in  chapter 9. Irs e file 1040 ez To figure your net capital gain or loss, you must classify your gains and losses as either ordinary or capital (and your capital gains or losses as either short-term or long-term). Irs e file 1040 ez Your net capital gains may be taxed at a lower tax rate than ordinary income. Irs e file 1040 ez See Capital Gains Tax Rates , later. Irs e file 1040 ez Your deduction for a net capital loss may be limited. Irs e file 1040 ez See Treatment of Capital Losses , later. Irs e file 1040 ez Capital Assets Almost everything you own and use for personal purposes or investment is a capital asset. Irs e file 1040 ez The following items are examples of capital assets. Irs e file 1040 ez A home owned and occupied by you and your family. Irs e file 1040 ez Household furnishings. Irs e file 1040 ez A car used for pleasure. Irs e file 1040 ez If your car is used both for pleasure and for farm business, it is partly a capital asset and partly a noncapital asset, defined later. Irs e file 1040 ez Stocks and bonds. Irs e file 1040 ez However, there are special rules for gains on qualified small business stock. Irs e file 1040 ez For more information on this subject, see Gains on Qualified Small Business Stock and Losses on Section 1244 (Small Business) Stock in chapter 4 of Publication 550. Irs e file 1040 ez Personal-use property. Irs e file 1040 ez   Gain from a sale or exchange of personal-use property is a capital gain and is taxable. Irs e file 1040 ez Loss from the sale or exchange of personal-use property is not deductible. Irs e file 1040 ez You can deduct a loss relating to personal-use property only if it results from a casualty or theft. Irs e file 1040 ez For information on casualties and thefts, see chapter 11. Irs e file 1040 ez Long and Short Term Where you report a capital gain or loss depends on how long you own the asset before you sell or exchange it. Irs e file 1040 ez The time you own an asset before disposing of it is the holding period. Irs e file 1040 ez If you hold a capital asset 1 year or less, the gain or loss resulting from its disposition is short term. Irs e file 1040 ez Report it in Part I of Schedule D (Form 1040). Irs e file 1040 ez If you hold a capital asset longer than 1 year, the gain or loss resulting from its disposition is long term. Irs e file 1040 ez Report it in Part II of Schedule D (Form 1040). Irs e file 1040 ez Holding period. Irs e file 1040 ez   To figure if you held property longer than 1 year, start counting on the day after the day you acquired the property. Irs e file 1040 ez The day you disposed of the property is part of your holding period. Irs e file 1040 ez Example. Irs e file 1040 ez If you bought an asset on June 19, 2012, you should start counting on June 20, 2012. Irs e file 1040 ez If you sold the asset on June 19, 2013, your holding period is not longer than 1 year, but if you sold it on June 20, 2013, your holding period is longer than 1 year. Irs e file 1040 ez Inherited property. Irs e file 1040 ez   If you inherit property, you are considered to have held the property longer than 1 year, regardless of how long you actually held it. Irs e file 1040 ez This rule does not apply to livestock used in a farm business. Irs e file 1040 ez See Holding period under Livestock , later. Irs e file 1040 ez Nonbusiness bad debt. Irs e file 1040 ez   A nonbusiness bad debt is a short-term capital loss, deductible in the year the debt becomes worthless. Irs e file 1040 ez See chapter 4 of Publication 550. Irs e file 1040 ez Nontaxable exchange. Irs e file 1040 ez   If you acquire an asset in exchange for another asset and your basis for the new asset is figured, in whole or in part, by using your basis in the old property, the holding period of the new property includes the holding period of the old property. Irs e file 1040 ez That is, it begins on the same day as your holding period for the old property. Irs e file 1040 ez Gift. Irs e file 1040 ez   If you receive a gift of property and your basis in it is figured using the donor's basis, your holding period includes the donor's holding period. Irs e file 1040 ez Real property. Irs e file 1040 ez   To figure how long you held real property, start counting on the day after you received title to it or, if earlier, on the day after you took possession of it and assumed the burdens and privileges of ownership. Irs e file 1040 ez   However, taking possession of real property under an option agreement is not enough to start the holding period. Irs e file 1040 ez The holding period cannot start until there is an actual contract of sale. Irs e file 1040 ez The holding period of the seller cannot end before that time. Irs e file 1040 ez Figuring Net Gain or Loss The totals for short-term capital gains and losses and the totals for long-term capital gains and losses must be figured separately. Irs e file 1040 ez Net short-term capital gain or loss. Irs e file 1040 ez   Combine your short-term capital gains and losses. Irs e file 1040 ez Do this by adding all of your short-term capital gains. Irs e file 1040 ez Then add all of your short-term capital losses. Irs e file 1040 ez Subtract the lesser total from the greater. Irs e file 1040 ez The difference is your net short-term capital gain or loss. Irs e file 1040 ez Net long-term capital gain or loss. Irs e file 1040 ez   Follow the same steps to combine your long-term capital gains and losses. Irs e file 1040 ez The result is your net long-term capital gain or loss. Irs e file 1040 ez Net gain. Irs e file 1040 ez   If the total of your capital gains is more than the total of your capital losses, the difference is taxable. Irs e file 1040 ez However, part of your gain (but not more than your net capital gain) may be taxed at a lower rate than the rate of tax on your ordinary income. Irs e file 1040 ez See Capital Gains Tax Rates , later. Irs e file 1040 ez Net loss. Irs e file 1040 ez   If the total of your capital losses is more than the total of your capital gains, the difference is deductible. Irs e file 1040 ez But there are limits on how much loss you can deduct and when you can deduct it. Irs e file 1040 ez See Treatment of Capital Losses next. Irs e file 1040 ez Treatment of Capital Losses If your capital losses are more than your capital gains, you must claim the difference even if you do not have ordinary income to offset it. Irs e file 1040 ez For taxpayers other than corporations, the yearly limit on the capital loss you can deduct is $3,000 ($1,500 if you are married and file a separate return). Irs e file 1040 ez If your other income is low, you may not be able to use the full $3,000. Irs e file 1040 ez The part of the $3,000 you cannot use becomes part of your capital loss carryover (discussed next). Irs e file 1040 ez Capital loss carryover. Irs e file 1040 ez   Generally, you have a capital loss carryover if either of the following situations applies to you. Irs e file 1040 ez Your net loss on Schedule D (Form 1040), is more than the yearly limit. Irs e file 1040 ez Your taxable income without your deduction for exemptions is less than zero. Irs e file 1040 ez If either of these situations applies to you for 2013, see Capital Losses under Reporting Capital Gains and Losses in chapter 4 of Publication 550 to figure the amount you can carry over to 2014. Irs e file 1040 ez    To figure your capital loss carryover from 2013 to 2014, you will need a copy of your 2013 Form 1040 and Schedule D (Form 1040). Irs e file 1040 ez Capital Gains Tax Rates The tax rates that apply to a net capital gain are generally lower than the tax rates that apply to other income. Irs e file 1040 ez These lower rates are called the maximum capital gains rates. Irs e file 1040 ez The term “net capital gain” means the amount by which your net long-term capital gain for the year is more than your net short-term capital loss. Irs e file 1040 ez See Schedule D (Form 1040) and the Instructions for Schedule D (Form 1040). Irs e file 1040 ez Also see Publication 550. Irs e file 1040 ez Noncapital Assets Noncapital assets include property such as inventory and depreciable property used in a trade or business. Irs e file 1040 ez A list of properties that are not capital assets is provided in the Instructions for Schedule D (Form 1040). Irs e file 1040 ez Property held for sale in the ordinary course of your farm business. Irs e file 1040 ez   Property you hold mainly for sale to customers, such as livestock, poultry, livestock products, and crops, is a noncapital asset. Irs e file 1040 ez Gain or loss from sales or other dispositions of this property is reported on Schedule F (Form 1040) (not on Schedule D (Form 1040) or Form 4797). Irs e file 1040 ez The treatment of this property is discussed in chapter 3. Irs e file 1040 ez Land and depreciable properties. Irs e file 1040 ez   Land and depreciable property you use in farming are not capital assets. Irs e file 1040 ez Noncapital assets also include livestock held for draft, breeding, dairy, or sporting purposes. Irs e file 1040 ez However, your gains and losses from sales and exchanges of your farmland and depreciable properties must be considered together with certain other transactions to determine whether the gains and losses are treated as capital or ordinary gains and losses. Irs e file 1040 ez The sales of these business assets are reported on Form 4797. Irs e file 1040 ez See chapter 9 for more information. Irs e file 1040 ez Hedging (Commodity Futures) Hedging transactions are transactions that you enter into in the normal course of business primarily to manage the risk of interest rate or price changes, or currency fluctuations, with respect to borrowings, ordinary property, or ordinary obligations. Irs e file 1040 ez Ordinary property or obligations are those that cannot produce capital gain or loss if sold or exchanged. Irs e file 1040 ez A commodity futures contract is a standardized, exchange-traded contract for the sale or purchase of a fixed amount of a commodity at a future date for a fixed price. Irs e file 1040 ez The holder of an option on a futures contract has the right (but not the obligation) for a specified period of time to enter into a futures contract to buy or sell at a particular price. Irs e file 1040 ez A forward contract is generally similar to a futures contract except that the terms are not standardized and the contract is not exchange traded. Irs e file 1040 ez Businesses may enter into commodity futures contracts or forward contracts and may acquire options on commodity futures contracts as either of the following. Irs e file 1040 ez Hedging transactions. Irs e file 1040 ez Transactions that are not hedging transactions. Irs e file 1040 ez Futures transactions with exchange-traded commodity futures contracts that are not hedging transactions, generally, result in capital gain or loss and are subject to the mark-to-market rules discussed in Publication 550. Irs e file 1040 ez There is a limit on the amount of capital losses you can deduct each year. Irs e file 1040 ez Hedging transactions are not subject to the mark-to-market rules. Irs e file 1040 ez If, as a farmer-producer, to protect yourself from the risk of unfavorable price fluctuations, you enter into commodity forward contracts, futures contracts, or options on futures contracts and the contracts cover an amount of the commodity within your range of production, the transactions are generally considered hedging transactions. Irs e file 1040 ez They can take place at any time you have the commodity under production, have it on hand for sale, or reasonably expect to have it on hand. Irs e file 1040 ez The gain or loss on the termination of these hedges is generally ordinary gain or loss. Irs e file 1040 ez Farmers who file their income tax returns on the cash method report any profit or loss on the hedging transaction on Schedule F, line 8. Irs e file 1040 ez Gains or losses from hedging transactions that hedge supplies of a type regularly used or consumed in the ordinary course of your trade or business may be ordinary gains or losses. Irs e file 1040 ez Examples include fuel and feed. Irs e file 1040 ez If you have numerous transactions in the commodity futures market during the year, you must be able to show which transactions are hedging transactions. Irs e file 1040 ez Clearly identify a hedging transaction on your books and records before the end of the day you entered into the transaction. Irs e file 1040 ez It may be helpful to have separate brokerage accounts for your hedging and speculation transactions. Irs e file 1040 ez Retain the identification of each hedging transaction with your books and records. Irs e file 1040 ez Also, identify the item(s) or aggregate risk that is being hedged in your records. Irs e file 1040 ez Although the identification of the hedging transaction must be made before the end of the day it was entered into, you have 35 days after entering into the transaction to identify the hedged item(s) or risk. Irs e file 1040 ez For more information on the tax treatment of futures and options contracts, see Commodity Futures and Section 1256 Contracts Marked to Market in Publication 550. Irs e file 1040 ez Accounting methods for hedging transactions. Irs e file 1040 ez   The accounting method you use for a hedging transaction must clearly reflect income. Irs e file 1040 ez This means that your accounting method must reasonably match the timing of income, deduction, gain, or loss from a hedging transaction with the timing of income, deduction, gain, or loss from the item or items being hedged. Irs e file 1040 ez There are requirements and limits on the method you can use for certain hedging transactions. Irs e file 1040 ez See Regulations section 1. Irs e file 1040 ez 446-4(e) for those requirements and limits. Irs e file 1040 ez   Hedging transactions must be accounted for under the rules stated above unless the transaction is subject to mark-to-market accounting under section 475 or you use an accounting method other than the following methods. Irs e file 1040 ez Cash method. Irs e file 1040 ez Farm-price method. Irs e file 1040 ez Unit-livestock-price method. Irs e file 1040 ez   Once you adopt a method, you must apply it consistently and must have IRS approval before changing it. Irs e file 1040 ez   Your books and records must describe the accounting method used for each type of hedging transaction. Irs e file 1040 ez They must also contain any additional identification necessary to verify the application of the accounting method you used for the transaction. Irs e file 1040 ez You must make the additional identification no more than 35 days after entering into the hedging transaction. Irs e file 1040 ez Example of a hedging transaction. Irs e file 1040 ez   You file your income tax returns on the cash method. Irs e file 1040 ez On July 2 you anticipate a yield of 50,000 bushels of corn this year. Irs e file 1040 ez The December futures price is $5. Irs e file 1040 ez 75 a bushel, but there are indications that by harvest time the price will drop. Irs e file 1040 ez To protect yourself against a drop in the price, you enter into the following hedging transaction. Irs e file 1040 ez You sell ten December futures contracts of 5,000 bushels each for a total of 50,000 bushels of corn at $5. Irs e file 1040 ez 75 a bushel. Irs e file 1040 ez   The price did not drop as anticipated but rose to $6 a bushel. Irs e file 1040 ez In November, you sell your crop at a local elevator for $6 a bushel. Irs e file 1040 ez You also close out your futures position by buying ten December contracts for $6 a bushel. Irs e file 1040 ez You paid a broker's commission of $1,400 ($70 per contract) for the complete in and out position in the futures market. Irs e file 1040 ez   The result is that the price of corn rose 25 cents a bushel and the actual selling price is $6 a bushel. Irs e file 1040 ez Your loss on the hedge is 25 cents a bushel. Irs e file 1040 ez In effect, the net selling price of your corn is $5. Irs e file 1040 ez 75 a bushel. Irs e file 1040 ez   Report the results of your futures transactions and your sale of corn separately on Schedule F. Irs e file 1040 ez See the instructions for the 2013 Schedule F (Form 1040). Irs e file 1040 ez   The loss on your futures transactions is $13,900, figured as follows. Irs e file 1040 ez July 2 - Sold December corn futures (50,000 bu. Irs e file 1040 ez @$5. Irs e file 1040 ez 75) $287,500 November 6 - Bought December corn futures (50,000 bu. Irs e file 1040 ez @$6 plus $1,400 broker's commission) 301,400 Futures loss ($13,900) This loss is reported as a negative figure on Schedule F, Part I, line 8, as other income. Irs e file 1040 ez   The proceeds from your corn sale at the local elevator are $300,000 (50,000 bu. Irs e file 1040 ez × $6). Irs e file 1040 ez Report it on Schedule F, Part I, line 2, as income from sales of products you raised. Irs e file 1040 ez   Assume you were right and the price went down 25 cents a bushel. Irs e file 1040 ez In effect, you would still net $5. Irs e file 1040 ez 75 a bushel, figured as follows. Irs e file 1040 ez Sold cash corn, per bushel $5. Irs e file 1040 ez 50 Gain on hedge, per bushel . Irs e file 1040 ez 25 Net price, per bushel $5. Irs e file 1040 ez 75       The gain on your futures transactions would have been $11,100, figured as follows. Irs e file 1040 ez July 2 - Sold December corn futures (50,000 bu. Irs e file 1040 ez @$5. Irs e file 1040 ez 75) $287,500 November 6 - Bought December corn futures (50,000 bu. Irs e file 1040 ez @$5. Irs e file 1040 ez 50 plus $1,400 broker's commission) 276,400 Futures gain $11,100 The $11,100 is reported on Schedule F, Part I, line 8, as other income. Irs e file 1040 ez   The proceeds from the sale of your corn at the local elevator, $275,000, are reported on Schedule F, Part I, line 2, as income from sales of products you raised. Irs e file 1040 ez Livestock This part discusses the sale or exchange of livestock used in your farm business. Irs e file 1040 ez Gain or loss from the sale or exchange of this livestock may qualify as a section 1231 gain or loss. Irs e file 1040 ez However, any part of the gain that is ordinary income from the recapture of depreciation is not included as section 1231 gain. Irs e file 1040 ez See chapter 9 for more information on section 1231 gains and losses and the recapture of depreciation under section 1245. Irs e file 1040 ez The rules discussed here do not apply to the sale of livestock held primarily for sale to customers. Irs e file 1040 ez The sale of this livestock is reported on Schedule F. Irs e file 1040 ez See chapter 3. Irs e file 1040 ez Also, special rules apply to sales or exchanges caused by weather-related conditions. Irs e file 1040 ez See chapter 3. Irs e file 1040 ez Holding period. Irs e file 1040 ez   The sale or exchange of livestock used in your farm business (defined below) qualifies as a section 1231 transaction if you held the livestock for 12 months or more (24 months or more for horses and cattle). Irs e file 1040 ez Livestock. Irs e file 1040 ez   For section 1231 transactions, livestock includes cattle, hogs, horses, mules, donkeys, sheep, goats, fur-bearing animals, and other mammals. Irs e file 1040 ez Also, for section 1231 transactions, livestock does not include chickens, turkeys, pigeons, geese, emus, ostriches, rheas, or other birds, fish, frogs, reptiles, etc. Irs e file 1040 ez Livestock used in farm business. Irs e file 1040 ez   If livestock is held primarily for draft, breeding, dairy, or sporting purposes, it is used in your farm business. Irs e file 1040 ez The purpose for which an animal is held ordinarily is determined by a farmer's actual use of the animal. Irs e file 1040 ez An animal is not held for draft, breeding, dairy, or sporting purposes merely because it is suitable for that purpose, or because it is held for sale to other persons for use by them for that purpose. Irs e file 1040 ez However, a draft, breeding, or sporting purpose may be present if an animal is disposed of within a reasonable time after it is prevented from its intended use or made undesirable as a result of an accident, disease, drought, or unfitness of the animal. Irs e file 1040 ez Example 1. Irs e file 1040 ez You discover an animal that you intend to use for breeding purposes is sterile. Irs e file 1040 ez You dispose of it within a reasonable time. Irs e file 1040 ez This animal was held for breeding purposes. Irs e file 1040 ez Example 2. Irs e file 1040 ez You retire and sell your entire herd, including young animals that you would have used for breeding or dairy purposes had you remained in business. Irs e file 1040 ez These young animals were held for breeding or dairy purposes. Irs e file 1040 ez Also, if you sell young animals to reduce your breeding or dairy herd because of drought, these animals are treated as having been held for breeding or dairy purposes. Irs e file 1040 ez See Sales Caused by Weather-Related Conditions in chapter 3. Irs e file 1040 ez Example 3. Irs e file 1040 ez You are in the business of raising hogs for slaughter. Irs e file 1040 ez Customarily, before selling your sows, you obtain a single litter of pigs that you will raise for sale. Irs e file 1040 ez You sell the brood sows after obtaining the litter. Irs e file 1040 ez Even though you hold these brood sows for ultimate sale to customers in the ordinary course of your business, they are considered to be held for breeding purposes. Irs e file 1040 ez Example 4. Irs e file 1040 ez You are in the business of raising registered cattle for sale to others for use as breeding cattle. Irs e file 1040 ez The business practice is to breed the cattle before sale to establish their fitness as registered breeding cattle. Irs e file 1040 ez Your use of the young cattle for breeding purposes is ordinary and necessary for selling them as registered breeding cattle. Irs e file 1040 ez Such use does not demonstrate that you are holding the cattle for breeding purposes. Irs e file 1040 ez However, those cattle you held as additions or replacements to your own breeding herd to produce calves are considered to be held for breeding purposes, even though they may not actually have produced calves. Irs e file 1040 ez The same applies to hog and sheep breeders. Irs e file 1040 ez Example 5. Irs e file 1040 ez You breed, raise, and train horses for racing purposes. Irs e file 1040 ez Every year you cull horses from your racing stable. Irs e file 1040 ez In 2013, you decided that to prevent your racing stable from getting too large to be effectively operated, you must cull six horses that had been raced at public tracks in 2012. Irs e file 1040 ez These horses are all considered held for sporting purposes. Irs e file 1040 ez Figuring gain or loss on the cash method. Irs e file 1040 ez   Farmers or ranchers who use the cash method of accounting figure their gain or loss on the sale of livestock used in their farming business as follows. Irs e file 1040 ez Raised livestock. Irs e file 1040 ez   Gain on the sale of raised livestock is generally the gross sales price reduced by any expenses of the sale. Irs e file 1040 ez Expenses of sale include sales commissions, freight or hauling from farm to commission company, and other similar expenses. Irs e file 1040 ez The basis of the animal sold is zero if the costs of raising it were deducted during the years the animal was being raised. Irs e file 1040 ez However, see Uniform Capitalization Rules in chapter 6. Irs e file 1040 ez Purchased livestock. Irs e file 1040 ez   The gross sales price minus your adjusted basis and any expenses of sale is the gain or loss. Irs e file 1040 ez Example. Irs e file 1040 ez A farmer sold a breeding cow on January 8, 2013, for $1,250. Irs e file 1040 ez Expenses of the sale were $125. Irs e file 1040 ez The cow was bought July 2, 2009, for $1,300. Irs e file 1040 ez Depreciation (not less than the amount allowable) was $867. Irs e file 1040 ez Gross sales price $1,250 Cost (basis) $1,300   Minus: Depreciation deduction 867   Unrecovered cost (adjusted basis) $ 433   Expense of sale 125 558 Gain realized $ 692 Converted Wetland and Highly Erodible Cropland Special rules apply to dispositions of land converted to farming use after March 1, 1986. Irs e file 1040 ez Any gain realized on the disposition of converted wetland or highly erodible cropland is treated as ordinary income. Irs e file 1040 ez Any loss on the disposition of such property is treated as a long-term capital loss. Irs e file 1040 ez Converted wetland. Irs e file 1040 ez   This is generally land that was drained or filled to make the production of agricultural commodities possible. Irs e file 1040 ez It includes converted wetland held by the person who originally converted it or held by any other person who used the converted wetland at any time after conversion for farming. Irs e file 1040 ez   A wetland (before conversion) is land that meets all the following conditions. Irs e file 1040 ez It is mostly soil that, in its undrained condition, is saturated, flooded, or ponded long enough during a growing season to develop an oxygen-deficient state that supports the growth and regeneration of plants growing in water. Irs e file 1040 ez It is saturated by surface or groundwater at a frequency and duration sufficient to support mostly plants that are adapted for life in saturated soil. Irs e file 1040 ez It supports, under normal circumstances, mostly plants that grow in saturated soil. Irs e file 1040 ez Highly erodible cropland. Irs e file 1040 ez   This is cropland subject to erosion that you used at any time for farming purposes other than grazing animals. Irs e file 1040 ez Generally, highly erodible cropland is land currently classified by the Department of Agriculture as Class IV, VI, VII, or VIII under its classification system. Irs e file 1040 ez Highly erodible cropland also includes land that would have an excessive average annual erosion rate in relation to the soil loss tolerance level, as determined by the Department of Agriculture. Irs e file 1040 ez Successor. Irs e file 1040 ez   Converted wetland or highly erodible cropland is also land held by any person whose basis in the land is figured by reference to the adjusted basis of a person in whose hands the property was converted wetland or highly erodible cropland. Irs e file 1040 ez Timber Standing timber you held as investment property is a capital asset. Irs e file 1040 ez Gain or loss from its sale is capital gain or loss reported on Form 8949 and Schedule D (Form 1040), as applicable. Irs e file 1040 ez If you held the timber primarily for sale to customers, it is not a capital asset. Irs e file 1040 ez Gain or loss on its sale is ordinary business income or loss. Irs e file 1040 ez It is reported on Schedule F, line 1 (purchased timber) or line 2 (raised timber). Irs e file 1040 ez See the Instructions for Schedule F (Form 1040). Irs e file 1040 ez Farmers who cut timber on their land and sell it as logs, firewood, or pulpwood usually have no cost or other basis for that timber. Irs e file 1040 ez Amounts realized from these sales, and the expenses incurred in cutting, hauling, etc. Irs e file 1040 ez , are ordinary farm income and expenses reported on Schedule F. Irs e file 1040 ez Different rules apply if you owned the timber longer than 1 year and elect to treat timber cutting as a sale or exchange or you enter into a cutting contract, discussed below. Irs e file 1040 ez Timber considered cut. Irs e file 1040 ez   Timber is considered cut on the date when, in the ordinary course of business, the quantity of felled timber is first definitely determined. Irs e file 1040 ez This is true whether the timber is cut under contract or whether you cut it yourself. Irs e file 1040 ez Christmas trees. Irs e file 1040 ez   Evergreen trees, such as Christmas trees, that are more than 6 years old when severed from their roots and sold for ornamental purposes are included in the term timber. Irs e file 1040 ez They qualify for both rules discussed below. Irs e file 1040 ez Election to treat cutting as a sale or exchange. Irs e file 1040 ez   Under the general rule, the cutting of timber results in no gain or loss. Irs e file 1040 ez It is not until a sale or exchange occurs that gain or loss is realized. Irs e file 1040 ez But if you owned or had a contractual right to cut timber, you can elect to treat the cutting of timber as a section 1231 transaction in the year it is cut. Irs e file 1040 ez Even though the cut timber is not actually sold or exchanged, you report your gain or loss on the cutting for the year the timber is cut. Irs e file 1040 ez Any later sale results in ordinary business income or loss. Irs e file 1040 ez See the example below. Irs e file 1040 ez   To elect this treatment, you must: Own or hold a contractual right to cut the timber for a period of more than 1 year before it is cut, and Cut the timber for sale or use in your trade or business. Irs e file 1040 ez Making the election. Irs e file 1040 ez   You make the election on your return for the year the cutting takes place by including in income the gain or loss on the cutting and including a computation of your gain or loss. Irs e file 1040 ez You do not have to make the election in the first year you cut the timber. Irs e file 1040 ez You can make it in any year to which the election would apply. Irs e file 1040 ez If the timber is partnership property, the election is made on the partnership return. Irs e file 1040 ez This election cannot be made on an amended return. Irs e file 1040 ez   Once you have made the election, it remains in effect for all later years unless you revoke it. Irs e file 1040 ez Election under section 631(a) may be revoked. Irs e file 1040 ez   If you previously elected for any tax year ending before October 23, 2004, to treat the cutting of timber as a sale or exchange under section 631(a), you may revoke this election without the consent of the IRS for any tax year ending after October 22, 2004. Irs e file 1040 ez The prior election (and revocation) is disregarded for purposes of making a subsequent election. Irs e file 1040 ez See Form T (Timber), Forest Activities Schedule, for more information. Irs e file 1040 ez Gain or loss. Irs e file 1040 ez   Your gain or loss on the cutting of standing timber is the difference between its adjusted basis for depletion and its FMV on the first day of your tax year in which it is cut. Irs e file 1040 ez   Your adjusted basis for depletion of cut timber is based on the number of units (board feet, log scale, or other units) of timber cut during the tax year and considered to be sold or exchanged. Irs e file 1040 ez Your adjusted basis for depletion is also based on the depletion unit of timber in the account used for the cut timber, and should be figured in the same manner as shown in section 611 and Regulations section 1. Irs e file 1040 ez 611-3. Irs e file 1040 ez   Depletion of timber is discussed in chapter 7. Irs e file 1040 ez Example. Irs e file 1040 ez   In April 2013, you owned 4,000 MBF (1,000 board feet) of standing timber longer than 1 year. Irs e file 1040 ez It had an adjusted basis for depletion of $40 per MBF. Irs e file 1040 ez You are a calendar year taxpayer. Irs e file 1040 ez On January 1, 2013, the timber had a FMV of $350 per MBF. Irs e file 1040 ez It was cut in April for sale. Irs e file 1040 ez On your 2013 tax return, you elect to treat the cutting of the timber as a sale or exchange. Irs e file 1040 ez You report the difference between the FMV and your adjusted basis for depletion as a gain. Irs e file 1040 ez This amount is reported on Form 4797 along with your other section 1231 gains and losses to figure whether it is treated as a capital gain or as ordinary gain. Irs e file 1040 ez You figure your gain as follows. Irs e file 1040 ez FMV of timber January 1, 2013 $1,400,000 Minus: Adjusted basis for depletion 160,000 Section 1231 gain $1,240,000   The FMV becomes your basis in the cut timber, and a later sale of the cut timber, including any by-product or tree tops, will result in ordinary business income or loss. Irs e file 1040 ez Outright sales of timber. Irs e file 1040 ez   Outright sales of timber by landowners qualify for capital gains treatment using rules similar to the rules for certain disposal of timber under a contract with retained economic interest (defined later). Irs e file 1040 ez However, for outright sales, the date of disposal is not deemed to be the date the timber is cut because the landowner can elect to treat the payment date as the date of disposal (see Date of disposal below). Irs e file 1040 ez Cutting contract. Irs e file 1040 ez   You must treat the disposal of standing timber under a cutting contract as a section 1231 transaction if all the following apply to you. Irs e file 1040 ez You are the owner of the timber. Irs e file 1040 ez You held the timber longer than 1 year before its disposal. Irs e file 1040 ez You kept an economic interest in the timber. Irs e file 1040 ez   You have kept an economic interest in standing timber if, under the cutting contract, the expected return on your investment is conditioned on the cutting of the timber. Irs e file 1040 ez   The difference between the amount realized from the disposal of the timber and its adjusted basis for depletion is treated as gain or loss on its sale. Irs e file 1040 ez Include this amount on Form 4797 along with your other section 1231 gains or losses. Irs e file 1040 ez Date of disposal. Irs e file 1040 ez   The date of disposal is the date the timber is cut. Irs e file 1040 ez However, for outright sales by landowners or if you receive payment under the contract before the timber is cut, you can elect to treat the date of payment as the date of disposal. Irs e file 1040 ez   This election applies only to figure the holding period of the timber. Irs e file 1040 ez It has no effect on the time for reporting gain or loss (generally when the timber is sold or exchanged). Irs e file 1040 ez   To make this election, attach a statement to the tax return filed by the due date (including extensions) for the year payment is received. Irs e file 1040 ez The statement must identify the advance payments subject to the election and the contract under which they were made. Irs e file 1040 ez   If you timely filed your return for the year you received payment without making the election, you can still make the election by filing an amended return within 6 months after the due date for that year's return (excluding extensions). Irs e file 1040 ez Attach the statement to the amended return and write “Filed pursuant to section 301. Irs e file 1040 ez 9100-2” at the top of the statement. Irs e file 1040 ez File the amended return at the same address the original return was filed. Irs e file 1040 ez Owner. Irs e file 1040 ez   An owner is any person who owns an interest in the timber, including a sublessor and the holder of a contract to cut the timber. Irs e file 1040 ez You own an interest in timber if you have the right to cut it for sale on your own account or for use in your business. Irs e file 1040 ez Tree stumps. Irs e file 1040 ez   Tree stumps are a capital asset if they are on land held by an investor who is not in the timber or stump business as a buyer, seller, or processor. Irs e file 1040 ez Gain from the sale of stumps sold in one lot by such a holder is taxed as a capital gain. Irs e file 1040 ez However, tree stumps held by timber operators after the saleable standing timber was cut and removed from the land are considered by-products. Irs e file 1040 ez Gain from the sale of stumps in lots or tonnage by such operators is taxed as ordinary income. Irs e file 1040 ez   See Form T (Timber) and its separate instructions for more information about dispositions of timber. Irs e file 1040 ez Sale of a Farm The sale of your farm will usually involve the sale of both nonbusiness property (your home) and business property (the land and buildings used in the farm operation and perhaps machinery and livestock). Irs e file 1040 ez If you have a gain from the sale, you may be allowed to exclude the gain on your home. Irs e file 1040 ez For more information, see Publication 523, Selling Your Home. Irs e file 1040 ez The gain on the sale of your business property is taxable. Irs e file 1040 ez A loss on the sale of your business property to an unrelated person is deducted as an ordinary loss. Irs e file 1040 ez Your taxable gain or loss on the sale of property used in your farm business is taxed under the rules for section 1231 transactions. Irs e file 1040 ez See chapter 9. Irs e file 1040 ez Losses from personal-use property, other than casualty or theft losses, are not deductible. Irs e file 1040 ez If you receive payments for your farm in installments, your gain is taxed over the period of years the payments are received, unless you elect not to use the installment method of reporting the gain. Irs e file 1040 ez See chapter 10 for information about installment sales. Irs e file 1040 ez When you sell your farm, the gain or loss on each asset is figured separately. Irs e file 1040 ez The tax treatment of gain or loss on the sale of each asset is determined by the classification of the asset. Irs e file 1040 ez Each of the assets sold must be classified as one of the following. Irs e file 1040 ez Capital asset held 1 year or less. Irs e file 1040 ez Capital asset held longer than 1 year. Irs e file 1040 ez Property (including real estate) used in your business and held 1 year or less (including draft, breeding, dairy, and sporting animals held less than the holding periods discussed earlier under Livestock ). Irs e file 1040 ez Property (including real estate) used in your business and held longer than 1 year (including only draft, breeding, dairy, and sporting animals held for the holding periods discussed earlier). Irs e file 1040 ez Property held primarily for sale or which is of the kind that would be included in inventory if on hand at the end of your tax year. Irs e file 1040 ez Allocation of consideration paid for a farm. Irs e file 1040 ez   The sale of a farm for a lump sum is considered a sale of each individual asset rather than a single asset. Irs e file 1040 ez The residual method is required only if the group of assets sold constitutes a trade or business. Irs e file 1040 ez This method determines gain or loss from the transfer of each asset. Irs e file 1040 ez It also determines the buyer's basis in the business assets. Irs e file 1040 ez For more information, see Sale of a Business in chapter 2 of Publication 544. Irs e file 1040 ez Property used in farm operation. Irs e file 1040 ez   The rules for excluding the gain on the sale of your home, described later under Sale of your home , do not apply to the property used for your farming business. Irs e file 1040 ez Recognized gains and losses on business property must be reported on your return for the year of the sale. Irs e file 1040 ez If the property was held longer than 1 year, it may qualify for section 1231 treatment (see chapter 9). Irs e file 1040 ez Example. Irs e file 1040 ez You sell your farm, including your main home, which you have owned since December 2001. Irs e file 1040 ez You realize gain on the sale as follows. Irs e file 1040 ez   Farm   Farm   With Home Without   Home Only Home Selling price $382,000 $158,000 $224,000 Cost (or other basis) 240,000 110,000 130,000 Gain $142,000 $48,000 $94,000 You must report the $94,000 gain from the sale of the property used in your farm business. Irs e file 1040 ez All or a part of that gain may have to be reported as ordinary income from the recapture of depreciation or soil and water conservation expenses. Irs e file 1040 ez Treat the balance as section 1231 gain. Irs e file 1040 ez The $48,000 gain from the sale of your home is not taxable as long as you meet the requirements explained later under Sale of your home . Irs e file 1040 ez Partial sale. Irs e file 1040 ez   If you sell only part of your farm, you must report any recognized gain or loss on the sale of that part on your tax return for the year of the sale. Irs e file 1040 ez You cannot wait until you have sold enough of the farm to recover its entire cost before reporting gain or loss. Irs e file 1040 ez For a detailed discussion on installment sales, see Publication 544. Irs e file 1040 ez Adjusted basis of the part sold. Irs e file 1040 ez   This is the properly allocated part of your original cost or other basis of the entire farm plus or minus necessary adjustments for improvements, depreciation, etc. Irs e file 1040 ez , on the part sold. Irs e file 1040 ez If your home is on the farm, you must properly adjust the basis to exclude those costs from your farm asset costs, as discussed below under Sale of your home . Irs e file 1040 ez Example. Irs e file 1040 ez You bought a 600-acre farm for $700,000. Irs e file 1040 ez The farm included land and buildings. Irs e file 1040 ez The purchase contract designated $600,000 of the purchase price to the land. Irs e file 1040 ez You later sold 60 acres of land on which you had installed a fence. Irs e file 1040 ez Your adjusted basis for the part of your farm sold is $60,000 (1/10 of $600,000), plus any unrecovered cost (cost not depreciated) of the fence on the 60 acres at the time of sale. Irs e file 1040 ez Use this amount to determine your gain or loss on the sale of the 60 acres. Irs e file 1040 ez Assessed values for local property taxes. Irs e file 1040 ez   If you paid a flat sum for the entire farm and no other facts are available for properly allocating your original cost or other basis between the land and the buildings, you can use the assessed values for local property taxes for the year of purchase to allocate the costs. Irs e file 1040 ez Example. Irs e file 1040 ez Assume that in the preceding example there was no breakdown of the $700,000 purchase price between land and buildings. Irs e file 1040 ez However, in the year of purchase, local taxes on the entire property were based on assessed valuations of $420,000 for land and $140,000 for improvements, or a total of $560,000. Irs e file 1040 ez The assessed valuation of the land is 3/4 (75%) of the total assessed valuation. Irs e file 1040 ez Multiply the $700,000 total purchase price by 75% to figure basis of $525,000 for the 600 acres of land. Irs e file 1040 ez The unadjusted basis of the 60 acres you sold would then be $52,500 (1/10 of $525,000). Irs e file 1040 ez Sale of your home. Irs e file 1040 ez   Your home is a capital asset and not property used in the trade or business of farming. Irs e file 1040 ez If you sell a farm that includes a house you and your family occupy, you must determine the part of the selling price and the part of the cost or other basis allocable to your home. Irs e file 1040 ez Your home includes the immediate surroundings and outbuildings relating to it that are not used for business purposes. Irs e file 1040 ez   If you use part of your home for business, you must make an appropriate adjustment to the basis for depreciation allowed or allowable. Irs e file 1040 ez For more information on basis, see chapter 6. Irs e file 1040 ez More information. Irs e file 1040 ez   For more information on selling your home, see Publication 523. Irs e file 1040 ez Gain from condemnation. Irs e file 1040 ez   If you have a gain from a condemnation or sale under threat of condemnation, you may use the preceding rules for excluding the gain, rather than the rules discussed under Postponing Gain in chapter 11. Irs e file 1040 ez However, any gain that cannot be excluded (because it is more than the limit) may be postponed under the rules discussed under Postponing Gain in chapter 11. Irs e file 1040 ez Foreclosure or Repossession If you do not make payments you owe on a loan secured by property, the lender may foreclose on the loan or repossess the property. Irs e file 1040 ez The foreclosure or repossession is treated as a sale or exchange from which you may realize gain or loss. Irs e file 1040 ez This is true even if you voluntarily return the property to the lender. Irs e file 1040 ez You may also realize ordinary income from cancellation of debt if the loan balance is more than the FMV of the property. Irs e file 1040 ez Buyer's (borrower's) gain or loss. Irs e file 1040 ez   You figure and report gain or loss from a foreclosure or repossession in the same way as gain or loss from a sale or exchange. Irs e file 1040 ez The gain or loss is the difference between your adjusted basis in the transferred property and the amount realized. Irs e file 1040 ez See Determining Gain or Loss , earlier. Irs e file 1040 ez Worksheet 8-1. Irs e file 1040 ez Worksheet for Foreclosures andRepossessions Part 1. Irs e file 1040 ez Use Part 1 to figure your ordinary income from the cancellation of debt upon foreclosure or repossession. Irs e file 1040 ez Complete this part only if you were personally liable for the debt. Irs e file 1040 ez Otherwise, go to Part 2. Irs e file 1040 ez   1. Irs e file 1040 ez Enter the amount of outstanding debt immediately before the transfer of property reduced by any amount for which you remain personally liable after the transfer of property   2. Irs e file 1040 ez Enter the Fair Market Value of the transferred property   3. Irs e file 1040 ez Ordinary income from cancellation of debt upon foreclosure or repossession. Irs e file 1040 ez * Subtract line 2 from line 1. Irs e file 1040 ez If zero or less, enter -0-   Part 2. Irs e file 1040 ez Figure your gain or loss from foreclosure or repossession. Irs e file 1040 ez   4. Irs e file 1040 ez If you completed Part 1, enter the smaller of line 1 or line 2. Irs e file 1040 ez If you did not complete Part 1, enter the outstanding debt immediately before the transfer of property   5. Irs e file 1040 ez Enter any proceeds you received from the foreclosure sale   6. Irs e file 1040 ez Add lines 4 and 5   7. Irs e file 1040 ez Enter the adjusted basis of the transferred property   8. Irs e file 1040 ez Gain or loss from foreclosure or repossession. Irs e file 1040 ez Subtract line 7  from line 6   * The income may not be taxable. Irs e file 1040 ez See Cancellation of debt . Irs e file 1040 ez    You can use Worksheet 8-1 to figure your gain or loss from a foreclosure or repossession. Irs e file 1040 ez Amount realized on a nonrecourse debt. Irs e file 1040 ez   If you are not personally liable for repaying the debt (nonrecourse debt) secured by the transferred property, the amount you realize includes the full amount of the debt canceled by the transfer. Irs e file 1040 ez The full canceled debt is included in the amount realized even if the fair market value of the property is less than the canceled debt. Irs e file 1040 ez Example 1. Irs e file 1040 ez Ann paid $200,000 for land used in her farming business. Irs e file 1040 ez She paid $15,000 down and borrowed the remaining $185,000 from a bank. Irs e file 1040 ez Ann is not personally liable for the loan (nonrecourse debt), but pledges the land as security. Irs e file 1040 ez The bank foreclosed on the loan 2 years after Ann stopped making payments. Irs e file 1040 ez When the bank foreclosed, the balance due on the loan was $180,000 and the FMV of the land was $170,000. Irs e file 1040 ez The amount Ann realized on the foreclosure was $180,000, the debt canceled by the foreclosure. Irs e file 1040 ez She figures her gain or loss on Form 4797, Part I, by comparing the amount realized ($180,000) with her adjusted basis ($200,000). Irs e file 1040 ez She has a $20,000 deductible loss. Irs e file 1040 ez Example 2. Irs e file 1040 ez Assume the same facts as in Example 1 except the FMV of the land was $210,000. Irs e file 1040 ez The result is the same. Irs e file 1040 ez The amount Ann realized on the foreclosure is $180,000, the debt canceled by the foreclosure. Irs e file 1040 ez Because her adjusted basis is $200,000, she has a deductible loss of $20,000, which she reports on Form 4797, Part I. Irs e file 1040 ez Amount realized on a recourse debt. Irs e file 1040 ez   If you are personally liable for the debt (recourse debt), the amount realized on the foreclosure or repossession includes the lesser of: The outstanding debt immediately before the transfer reduced by any amount for which you remain personally liable immediately after the transfer, or The fair market value of the transferred property. Irs e file 1040 ez   You are treated as receiving ordinary income from the canceled debt for the part of the debt that is more than the fair market value. Irs e file 1040 ez The amount realized does not include the canceled debt that is your income from cancellation of debt. Irs e file 1040 ez See Cancellation of debt , later. Irs e file 1040 ez Example 3. Irs e file 1040 ez Assume the same facts as in Example 1 above except Ann is personally liable for the loan (recourse debt). Irs e file 1040 ez In this case, the amount she realizes is $170,000. Irs e file 1040 ez This is the canceled debt ($180,000) up to the FMV of the land ($170,000). Irs e file 1040 ez Ann figures her gain or loss on the foreclosure by comparing the amount realized ($170,000) with her adjusted basis ($200,000). Irs e file 1040 ez She has a $30,000 deductible loss, which she figures on Form 4797, Part I. Irs e file 1040 ez She is also treated as receiving ordinary income from cancellation of debt. Irs e file 1040 ez That income is $10,000 ($180,000 − $170,000). Irs e file 1040 ez This is the part of the canceled debt not included in the amount realized. Irs e file 1040 ez She reports this as other income on Schedule F, line 8. Irs e file 1040 ez Seller's (lender's) gain or loss on repossession. Irs e file 1040 ez   If you finance a buyer's purchase of property and later acquire an interest in it through foreclosure or repossession, you may have a gain or loss on the acquisition. Irs e file 1040 ez For more information, see Repossession in Publication 537, Installment Sales. Irs e file 1040 ez Cancellation of debt. Irs e file 1040 ez   If property that is repossessed or foreclosed upon secures a debt for which you are personally liable (recourse debt), you generally must report as ordinary income the amount by which the canceled debt is more than the FMV of the property. Irs e file 1040 ez This income is separate from any gain or loss realized from the foreclosure or repossession. Irs e file 1040 ez Report the income from cancellation of a business debt on Schedule F, line 8. Irs e file 1040 ez Report the income from cancellation of a nonbusiness debt as miscellaneous income on Form 1040. Irs e file 1040 ez    You can use Worksheet 8-1 to figure your income from cancellation of debt. Irs e file 1040 ez   However, income from cancellation of debt is not taxed if any of the following apply. Irs e file 1040 ez The cancellation is intended as a gift. Irs e file 1040 ez The debt is qualified farm debt (see chapter 3). Irs e file 1040 ez The debt is qualified real property business debt (see chapter 5 of Publication 334). Irs e file 1040 ez You are insolvent or bankrupt (see  chapter 3). Irs e file 1040 ez The debt is qualified principal residence indebtedness (see chapter 3). Irs e file 1040 ez   Use Form 982 to report the income exclusion. Irs e file 1040 ez Abandonment The abandonment of property is a disposition of property. Irs e file 1040 ez You abandon property when you voluntarily and permanently give up possession and use of the property with the intention of ending your ownership, but without passing it on to anyone else. Irs e file 1040 ez Business or investment property. Irs e file 1040 ez   Loss from abandonment of business or investment property is deductible as a loss. Irs e file 1040 ez Loss from abandonment of business or investment property that is not treated as a sale or exchange generally is an ordinary loss. Irs e file 1040 ez If your adjusted basis is more than the amount you realize (if any), then you have a loss. Irs e file 1040 ez If the amount you realize (if any) is more than your adjusted basis, then you have a gain. Irs e file 1040 ez This rule also applies to leasehold improvements the lessor made for the lessee. Irs e file 1040 ez However, if the property is foreclosed on or repossessed in lieu of abandonment, gain or loss is figured as discussed earlier under Foreclosure or Repossession . Irs e file 1040 ez   If the abandoned property is secured by debt, special rules apply. Irs e file 1040 ez The tax consequences of abandonment of property that secures a debt depend on whether you are personally liable for the debt (recourse debt) or were not personally liable for the debt (nonrecourse debt). Irs e file 1040 ez For more information, see chapter 3 of Publication 4681, Canceled Debts, Foreclosures, Repossessions, and Abandonments (for Individuals). Irs e file 1040 ez The abandonment loss is deducted in the tax year in which the loss is sustained. Irs e file 1040 ez Report the loss on Form 4797, Part II, line 10. Irs e file 1040 ez Personal-use property. Irs e file 1040 ez   You cannot deduct any loss from abandonment of your home or other property held for personal use. Irs e file 1040 ez Canceled debt. Irs e file 1040 ez   If the abandoned property secures a debt for which you are personally liable and the debt is canceled, you will realize ordinary income equal to the canceled debt. Irs e file 1040 ez This income is separate from any loss realized from abandonment of the property. Irs e file 1040 ez Report income from cancellation of a debt related to a business or rental activity as business or rental income. Irs e file 1040 ez Report income from cancellation of a nonbusiness debt as miscellaneous income on Form 1040. Irs e file 1040 ez   However, income from cancellation of debt is not taxed in certain circumstances. Irs e file 1040 ez See Cancellation of debt earlier under Foreclosure or Repossession . Irs e file 1040 ez Forms 1099-A and 1099-C. Irs e file 1040 ez   A lender who acquires an interest in your property in a foreclosure, repossession, or abandonment should send you Form 1099-A showing the information you need to figure your loss from the foreclosure, repossession, or abandonment. Irs e file 1040 ez However, if the lender cancels part of your debt and the lender must file Form 1099-C, the lender may include the information about the foreclosure, repossession, or abandonment on that form instead of Form 1099-A. Irs e file 1040 ez The lender must file Form 1099-C and send you a copy if the canceled debt is $600 or more and the lender is a financial institution, credit union, federal government agency, or any organization that has a significant trade or business of lending money. Irs e file 1040 ez For foreclosures, repossessions, abandonments of property, and debt cancellations occurring in 2013, these forms should be sent to you by January 31, 2014. Irs e file 1040 ez Prev  Up  Next   Home   More Online Publications