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Irs Extension Form 2012

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Irs Extension Form 2012

Irs extension form 2012 Publication 907 - Main Content Table of Contents IncomeDependent Care Benefits Social Security and Railroad Retirement Benefits Disability Pensions Military and Government Disability Pensions Other Payments Itemized DeductionsMedical Expenses Impairment-Related Work Expenses Tax CreditsChild and Dependent Care Credit Credit for the Elderly or the Disabled Earned Income Credit Household Employers Business Tax Incentives How To Get Tax Help Income All income is taxable unless it is specifically excluded by law. Irs extension form 2012 The following discussions highlight some income items (both taxable and nontaxable) that are of particular interest to people with disabilities and those who care for people with disabilities. Irs extension form 2012 Dependent Care Benefits Dependent care benefits include: Amounts your employer paid directly to either you or your care provider for the care of your qualifying person(s) while you worked, The fair market value of care in a daycare facility provided or sponsored by your employer, and Pre-tax contributions you made under a dependent care flexible spending arrangement. Irs extension form 2012 Exclusion or deduction. Irs extension form 2012   If your employer provides dependent care benefits under a qualified plan, you may be able to exclude these benefits from your income. Irs extension form 2012 Your employer can tell you whether your benefit plan qualifies. Irs extension form 2012 To claim the exclusion, you must complete Part III of Form 2441, Child and Dependent Care Expenses. Irs extension form 2012 You cannot use Form 1040EZ. Irs extension form 2012   If you are self-employed and receive benefits from a qualified dependent care benefit plan, you are treated as both employer and employee. Irs extension form 2012 Therefore, you would not get an exclusion from wages. Irs extension form 2012 Instead, you would get a deduction on Form 1040, Schedule C, line 14; Schedule E, line 19 or 28; or Schedule F, line 15. Irs extension form 2012 To claim the deduction, you must use Form 2441. Irs extension form 2012   The amount you can exclude or deduct is limited to the smallest of: The total amount of dependent care benefits you received during the year, The total amount of qualified expenses you incurred during the year, Your earned income, Your spouse's earned income, or $5,000 ($2,500 if married filing separately). Irs extension form 2012 Statement for employee. Irs extension form 2012   Your employer must give you a Form W-2 (or similar statement), showing in box 10 the total amount of dependent care benefits provided to you during the year under a qualified plan. Irs extension form 2012 Your employer will also include any dependent care benefits over $5,000 in your wages shown on your Form W-2 in box 1. Irs extension form 2012 Qualifying person(s). Irs extension form 2012   A qualifying person is: A qualifying child who is under age 13 whom you can claim as a dependent. Irs extension form 2012 If the child turned 13 during the year, the child is a qualifying person for the part of the year he or she was under age 13. Irs extension form 2012 Your disabled spouse who is not physically or mentally able to care for himself or herself. Irs extension form 2012 Any disabled person who was not physically or mentally able to care for himself or herself whom you can claim as a dependent (or could claim as a dependent except that the person had gross income of $3,900 or more or filed a joint return). Irs extension form 2012 Any disabled person who was not physically or mentally able to care for himself or herself whom you could claim as a dependent except that you (or your spouse if filing jointly) could be claimed as a dependent on another taxpayer's 2013 return. Irs extension form 2012 For information about excluding benefits on Form 1040, Form 1040NR, or Form 1040A, see Form 2441 and its instructions. Irs extension form 2012 Social Security and Railroad Retirement Benefits If you received social security or equivalent Tier 1 railroad retirement (RRTA) benefits during the year, part of the amount you received may be taxable. Irs extension form 2012 Are any of your benefits taxable?   If the only income you received during the year was your social security or equivalent Tier 1 railroad retirement (RRTA) benefits, your benefits generally are not taxable. Irs extension form 2012   If you received income during the year in addition to social security or equivalent Tier 1 railroad retirement (RRTA) benefits, part of your benefits may be taxable if all of your other income, including tax-exempt interest, plus half of your benefits are more than: $25,000 if you are single, head of household, or qualifying widow(er), $25,000 if you are married filing separately and lived apart from your spouse for all of 2013, $32,000 if you are married filing jointly, or $-0- if you are married filing separately and lived with your spouse at any time during 2013. Irs extension form 2012   For more information, see the instructions for Form 1040, lines 20a and 20b, or Form 1040A, lines 14a and 14b. Irs extension form 2012 Publication 915, Social Security and Equivalent Railroad Retirement Benefits, contains more detailed information. Irs extension form 2012 Supplemental security income (SSI) payments. Irs extension form 2012   Social security benefits do not include SSI payments, which are not taxable. Irs extension form 2012 Do not include these payments in your income. Irs extension form 2012 Disability Pensions If you retired on disability, you must include in income any disability pension you receive under a plan that is paid for by your employer. Irs extension form 2012 You must report your taxable disability payments as wages on line 7 of Form 1040 or Form 1040A until you reach minimum retirement age. Irs extension form 2012 Minimum retirement age generally is the age at which you can first receive a pension or annuity if you are not disabled. Irs extension form 2012 You may be entitled to a tax credit if you were permanently and totally disabled when you retired. Irs extension form 2012 For information on this credit, see Publication 524, Credit for the Elderly or the Disabled. Irs extension form 2012 Beginning on the day after you reach minimum retirement age, payments you receive are taxable as a pension or annuity. Irs extension form 2012 Report the payments on lines 16a and 16b of Form 1040 or on lines 12a and 12b of Form 1040A. Irs extension form 2012 For more information on pensions and annuities, see Publication 575, Pension and Annuity Income. Irs extension form 2012 Retirement and profit-sharing plans. Irs extension form 2012   If you receive payments from a retirement or profit-sharing plan that does not provide for disability retirement, do not treat the payments as a disability pension. Irs extension form 2012 The payments must be reported as a pension or annuity. Irs extension form 2012 Accrued leave payment. Irs extension form 2012   If you retire on disability, any lump-sum payment you receive for accrued annual leave is a salary payment. Irs extension form 2012 The payment is not a disability payment. Irs extension form 2012 Include it in your income in the tax year you receive it. Irs extension form 2012 See Publication 525, Taxable and Nontaxable Income, for more information. Irs extension form 2012 Military and Government Disability Pensions Generally, you must report disability pensions as income, but do not include certain military and government disability pensions. Irs extension form 2012 For information about military and government disability pensions, see Publication 525. Irs extension form 2012 VA disability benefits. Irs extension form 2012   Do not include disability benefits you receive from the Department of Veterans Affairs (VA) in your gross income. Irs extension form 2012 If you are a military retiree and do not receive your disability benefits from the VA, see Publication 525 for more information. Irs extension form 2012   Do not include in your income any veterans' benefits paid under any law, regulation, or administrative practice administered by the VA. Irs extension form 2012 These include: Education, training, and subsistence allowances, Disability compensation and pension payments for disabilities paid either to veterans or their families, Grants for homes designed for wheelchair living, Grants for motor vehicles for veterans who lost their sight or the use of their limbs, Veterans' insurance proceeds and dividends paid either to veterans or their beneficiaries, including the proceeds of a veteran's endowment policy paid before death, Interest on insurance dividends left on deposit with the VA, Benefits under a dependent-care assistance program, The death gratuity paid to a survivor of a member of the Armed Forces who died after September 10, 2001, or Payments made under the VA's compensated work therapy program. Irs extension form 2012 Other Payments You may receive other payments that are related to your disability. Irs extension form 2012 The following payments are not taxable. Irs extension form 2012 Benefit payments from a public welfare fund, such as payments due to blindness. Irs extension form 2012 Workers' compensation for an occupational sickness or injury if paid under a workers' compensation act or similar law. Irs extension form 2012 Compensatory (but not punitive) damages for physical injury or physical sickness. Irs extension form 2012 Disability benefits under a “no-fault” car insurance policy for loss of income or earning capacity as a result of injuries. Irs extension form 2012 Compensation for permanent loss or loss of use of a part or function of your body, or for your permanent disfigurement. Irs extension form 2012 Long-Term Care Insurance Long-term care insurance contracts generally are treated as accident and health insurance contracts. Irs extension form 2012 Amounts you receive from them (other than policyholder dividends or premium refunds) generally are excludable from income as amounts received for personal injury or sickness. Irs extension form 2012 More detailed information can be found in Publication 525. Irs extension form 2012 Accelerated Death Benefits You can exclude from income accelerated death benefits you receive on the life of an insured individual if certain requirements are met. Irs extension form 2012 Accelerated death benefits are amounts received under a life insurance contract before the death of the insured. Irs extension form 2012 These benefits also include amounts received on the sale or assignment of the contract to a viatical settlement provider. Irs extension form 2012 This exclusion applies only if the insured was a terminally ill individual or a chronically ill individual. Irs extension form 2012 For more information, see Publication 525. Irs extension form 2012 Itemized Deductions If you file Form 1040, you generally can either claim the standard deduction or itemize your deductions. Irs extension form 2012 You must use Schedule A (Form 1040) to itemize your deductions. Irs extension form 2012 See your form instructions for information on the standard deduction and the deductions you can itemize. Irs extension form 2012 The following discussions highlight some itemized deductions that are of particular interest to persons with disabilities. Irs extension form 2012 Medical Expenses When figuring your deduction for medical expenses, you can generally include medical and dental expenses you pay for yourself, your spouse, and your dependents. Irs extension form 2012 Medical expenses are the cost of diagnosis, cure, mitigation, treatment, or prevention of disease and the costs for treatments affecting any part or function of the body. Irs extension form 2012 They include the costs of equipment, supplies, diagnostic devices, and transportation for needed medical care and payments for medical insurance. Irs extension form 2012 You can deduct only the amount of your medical and dental expenses that is more than 10% (7. Irs extension form 2012 5% if either you or your spouse was born before January 2, 1949) of your adjusted gross income shown on Form 1040, line 38. Irs extension form 2012 The following list highlights some of the medical expenses you can include in figuring your medical expense deduction. Irs extension form 2012 For more detailed information, see Publication 502, Medical and Dental Expenses (Including the Health Coverage Tax Credit). Irs extension form 2012 Artificial limbs, contact lenses, eyeglasses, and hearing aids. Irs extension form 2012 The part of the cost of Braille books and magazines that is more than the price of regular printed editions. Irs extension form 2012 Cost and repair of special telephone equipment for hearing-impaired persons. Irs extension form 2012 Cost and maintenance of a wheelchair or a three-wheel motor vehicle commercially known as an “autoette. Irs extension form 2012 ” Cost and care of a guide dog or other animal aiding a person with a physical disability. Irs extension form 2012 Costs for a school that furnishes special education if a principal reason for using the school is its resources for relieving a mental or physical disability. Irs extension form 2012 This includes the cost of teaching Braille and lip reading and the cost of remedial language training to correct a condition caused by a birth defect. Irs extension form 2012 Premiums for qualified long-term care insurance, up to certain amounts. Irs extension form 2012 Improvements to a home that do not increase its value if the main purpose is medical care. Irs extension form 2012 An example is constructing entrance or exit ramps. Irs extension form 2012 Improvements that increase a home's value, if the main purpose is medical care, may be partly included as a medical expense. Irs extension form 2012 See Publication 502 for more information. Irs extension form 2012 Impairment-Related Work Expenses If you are disabled, you can take a business deduction for expenses that are necessary for you to be able to work. Irs extension form 2012 If you take a business deduction for these impairment-related work expenses, they are not subject to the 10% (7. Irs extension form 2012 5% if you or your spouse is age 65 or older) limit that applies to medical expenses. Irs extension form 2012 You are disabled if you have: A physical or mental disability (for example, blindness or deafness) that functionally limits your being employed, or A physical or mental impairment (including, but not limited to, a sight or hearing impairment) that substantially limits one or more of your major life activities, such as performing manual tasks, walking, speaking, breathing, learning, or working. Irs extension form 2012 Impairment-related expenses defined. Irs extension form 2012   Impairment-related expenses are those ordinary and necessary business expenses that are: Necessary for you to do your work satisfactorily, For goods and services not required or used, other than incidentally, in your personal activities, and Not specifically covered under other income tax laws. Irs extension form 2012 Publication 502 contains more detailed information. Irs extension form 2012 Tax Credits This discussion highlights three tax credits that may be of interest to people with disabilities and those who care for people with disabilities. Irs extension form 2012 Child and Dependent Care Credit If you pay someone to care for either your dependent under age 13 or your spouse or dependent who is not able to care for himself or herself, you may be able to get a credit of up to 35% of your expenses. Irs extension form 2012 To qualify, you must pay these expenses so you can work or look for work. Irs extension form 2012 The care must be provided for: Your qualifying child who is your dependent and who was under age 13 when the care was provided, Your spouse who was not physically or mentally able to care for himself or herself and lived with you for more than half the year, or A person who was not physically or mentally able to care for himself or herself, lived with you for more than half the year, and either: Was your dependent, or Would have been your dependent except that: He or she received gross income of $3,900 or more, He or she filed a joint return, or You, or your spouse if filing jointly, could be claimed as a dependent on someone else's 2013 return. Irs extension form 2012 You can claim the credit on Form 1040 or 1040A. Irs extension form 2012 You cannot claim the credit on Form 1040EZ or Form 1040NR-EZ. Irs extension form 2012 You figure the credit on Form 2441. Irs extension form 2012 For more information, see the instructions for Form 1040, line 48, or Form 1040A, line 29. Irs extension form 2012 Publication 503, Child and Dependent Care Expenses, contains more detailed information. Irs extension form 2012 Credit for the Elderly or the Disabled You may be able to claim this credit if you are a U. Irs extension form 2012 S. Irs extension form 2012 citizen or a resident alien and either of the following apply. Irs extension form 2012 You were 65 or older at the end of 2013, You were under 65 at the end of 2013, and retired on permanent or total disability. Irs extension form 2012 You can claim the credit on Form 1040 or 1040A. Irs extension form 2012 You figure the credit on Schedule R. Irs extension form 2012 For more information, see the instructions for Form 1040, line 53, or Form 1040A, line 30. Irs extension form 2012 Publication 524, Credit for the Elderly or the Disabled, contains more detailed information. Irs extension form 2012 Earned Income Credit This credit is based on the amount of your earned income. Irs extension form 2012 You can get the credit if your adjusted gross income for 2013 is less than: $14,340 ($19,680 for married filing jointly) if you do not have a qualifying child, $37,870 ($43,210 for married filing jointly) if you have one qualifying child, $43,038 ($48,378 for married filing jointly) if you have two qualifying children, or $46,227 ($51,567 for married filing jointly) if you have three or more qualifying children. Irs extension form 2012 To figure the credit, use the worksheet in the instructions for Form 1040, 1040A, or 1040EZ. Irs extension form 2012 If you have a qualifying child, also complete Schedule EIC, Earned Income Credit, and attach it to your Form 1040 or 1040A. Irs extension form 2012 You cannot use Form 1040EZ if you have a qualifying child. Irs extension form 2012 Qualifying child. Irs extension form 2012   To be a qualifying child, your child must be younger than you (or your spouse if married filing jointly) and under age 19 or a full-time student under age 24 at the end of 2013, or permanently and totally disabled at any time during 2013, regardless of age. Irs extension form 2012 Earned income. Irs extension form 2012   If you are retired on disability, benefits you receive under your employer's disability retirement plan are considered earned income until you reach minimum retirement age. Irs extension form 2012 However, payments you received from a disability insurance policy that you paid the premiums for are not earned income. Irs extension form 2012 More information. Irs extension form 2012   For more information, including all the requirements to claim the earned income credit, see the instructions for Form 1040, line 64a; Form 1040A, line 38a; or Form 1040EZ, line 8a. Irs extension form 2012 Publication 596, Earned Income Credit (EIC), contains more detailed information. Irs extension form 2012 Household Employers If you pay someone to work in your home, such as a babysitter or housekeeper, you may be a household employer who has to pay employment taxes. Irs extension form 2012 A person you hire through an agency is not your employee if the agency controls what work is done and how it is done. Irs extension form 2012 This control could include setting the fee, requiring regular reports, and providing rules of conduct and appearance. Irs extension form 2012 In this case you do not have to pay employment taxes on the amount you pay. Irs extension form 2012 But if you control what work is done and how it is done, the worker is your employee. Irs extension form 2012 If you possess the right to discharge a worker, that worker is generally considered to be your employee. Irs extension form 2012 If a worker is your employee, it does not matter that you hired the worker through an agency or from a list provided by an agency. Irs extension form 2012 To find out if you have to pay employment taxes, see Publication 926, Household Employer's Tax Guide For Wages Paid in 2013. Irs extension form 2012 Business Tax Incentives If you own or operate a business, or you are looking for work, you should be aware of the following tax incentives for businesses to help persons with disabilities. Irs extension form 2012 Deduction for costs of removing barriers to the disabled and the elderly—This is a deduction a business can take for making a facility or public transportation vehicle more accessible to and usable by persons who are disabled or elderly. Irs extension form 2012 For more information, see chapter 7 of Publication 535, Business Expenses. Irs extension form 2012 Disabled access credit—This is a nonrefundable tax credit for an eligible small business that pays or incurs expenses to provide access to persons with disabilities. Irs extension form 2012 The expenses must be to enable the eligible small business to comply with the Americans With Disabilities Act of 1990. Irs extension form 2012 See Form 8826, Disabled Access Credit, for more information. Irs extension form 2012 Work opportunity credit—This credit provides businesses with an incentive to hire individuals from targeted groups that have a particularly high unemployment rate or other special employment needs. Irs extension form 2012 One targeted group consists of vocational rehabilitation referrals. Irs extension form 2012 These are individuals who have a physical or mental disability that results in a substantial handicap to employment. Irs extension form 2012 See Form 5884, Work Opportunity Credit. Irs extension form 2012 How To Get Tax Help Go online, use a smart phone, call or walk in to an office near you. Irs extension form 2012 Whether it's help with a tax issue, preparing your tax return or picking up a free publication or form, get the help you need the way you want it. Irs extension form 2012 Free help with your tax return. Irs extension form 2012   Free help in preparing your return is available nationwide from IRS-certified volunteers. Irs extension form 2012 The Volunteer Income Tax Assistance (VITA) program is designed to help low-to-moderate income, elderly, persons with disabilities, and limited English proficient taxpayers. Irs extension form 2012 The Tax Counseling for the Elderly (TCE) program is designed to assist taxpayers age 60 and older with their tax returns. Irs extension form 2012 Most VITA and TCE sites offer free electronic filing and all volunteers will let you know about credits and deductions you may be entitled to claim. Irs extension form 2012 Some VITA and TCE sites provide taxpayers the opportunity to prepare their return with the assistance of an IRS-certified volunteer. Irs extension form 2012 To find the nearest VITA or TCE site, visit IRS. Irs extension form 2012 gov or call 1-800-906-9887. Irs extension form 2012   As part of the TCE program, AARP offers the Tax-Aide counseling program. Irs extension form 2012 To find the nearest AARP Tax-Aide site, visit AARP's website at www. Irs extension form 2012 aarp. Irs extension form 2012 org/money/taxaide or call 1-888-227-7669. Irs extension form 2012   For more information on these programs, go to IRS. Irs extension form 2012 gov and enter “VITA” in the search box. Irs extension form 2012 Internet. Irs extension form 2012 IRS. Irs extension form 2012 gov and IRS2Go are ready when you are — every day, every night, 24 hours a day, 7 days a week. Irs extension form 2012 Apply for an Employer Identification Number (EIN). Irs extension form 2012 Go to IRS. Irs extension form 2012 gov and enter Apply for an EIN in the search box. Irs extension form 2012 Request an Electronic Filing PIN by going to IRS. Irs extension form 2012 gov and entering Electronic Filing PIN in the search box. Irs extension form 2012 Check the status of your 2013 refund with Where's My Refund? Go to IRS. Irs extension form 2012 gov or the IRS2Go app, and click on Where's My Refund? You'll get a personalized refund date as soon as the IRS processes your tax return and approves your refund. Irs extension form 2012 If you e-file, your refund status is usually available within 24 hours after the IRS receives your tax return or 4 weeks after you've mailed a paper return. Irs extension form 2012 Check the status of your amended return. Irs extension form 2012 Go to IRS. Irs extension form 2012 gov and enter Where's My Amended Return in the search box. Irs extension form 2012 Download forms, instructions, and publications, including some accessible versions. Irs extension form 2012 Order free transcripts of your tax returns or tax account using the Order a Transcript tool on IRS. Irs extension form 2012 gov or IRS2Go. Irs extension form 2012 Tax return and tax account transcripts are generally available for the current year and past three years. Irs extension form 2012 Figure your income tax withholding with the IRS Withholding Calculator on IRS. Irs extension form 2012 gov. Irs extension form 2012 Use it if you've had too much or too little withheld, your personal situation has changed, you're starting a new job or you just want to see if you're having the right amount withheld. Irs extension form 2012 Determine if you might be subject to the Alternative Minimum Tax by using the Alternative Minimum Tax Assistant on IRS. Irs extension form 2012 gov. Irs extension form 2012 Locate the nearest Taxpayer Assistance Center using the Office Locator tool on IRS. Irs extension form 2012 gov or IRS2Go. Irs extension form 2012 Stop by most business days for face-to-face tax help, no appointment necessary — just walk in. Irs extension form 2012 An employee can explain IRS letters, request adjustments to your tax account or help you set up a payment plan. Irs extension form 2012 Before you visit, check the Office Locator for the address, phone number, hours of operation and the services provided. Irs extension form 2012 If you have an ongoing tax account problem or a special need, such as a disability, you can request an appointment. Irs extension form 2012 Call the local number listed in the Office Locator, or look in the phone book under United States Government, Internal Revenue Service. Irs extension form 2012 Locate the nearest volunteer help site with the VITA Locator Tool on IRS. Irs extension form 2012 gov. Irs extension form 2012 Low-to-moderate income, elderly, persons with disabilities, and limited English proficient taxpayers can get free help with their tax return from the nationwide Volunteer Income Tax Assistance (VITA) program. Irs extension form 2012 The Tax Counseling for the Elderly (TCE) program helps taxpayers 60 and older with their tax returns. Irs extension form 2012 Most VITA and TCE sites offer free electronic filing and some provide IRS-certified volunteers who can help prepare your tax return. Irs extension form 2012 AARP offers the Tax-Aide counseling program as part of the TCE program. Irs extension form 2012 Visit AARP's website to find the nearest Tax-Aide location. Irs extension form 2012 Research your tax questions. Irs extension form 2012 Search publications and instructions by topic or keyword. Irs extension form 2012 Read the Internal Revenue Code, regulations, or other official guidance. Irs extension form 2012 Read Internal Revenue Bulletins. Irs extension form 2012 Sign up to receive local and national tax news by email. Irs extension form 2012 Phone. Irs extension form 2012 You can call the IRS, or you can carry it in your pocket with the IRS2Go app on your smart phone or tablet. Irs extension form 2012 Download the free IRS2Go mobile app from the iTunes app store or from Google Play. Irs extension form 2012 Use it to watch the IRS YouTube channel, get IRS news as soon as it's released to the public, order transcripts of your tax returns or tax account, check your refund status, subscribe to filing season updates or daily tax tips, and follow the IRS Twitter news feed, @IRSnews, to get the latest federal tax news, including information about tax law changes and important IRS programs. Irs extension form 2012 Call to locate the nearest volunteer help site, 1-800-906-9887. Irs extension form 2012 Low-to-moderate income, elderly, persons with disabilities, and limited English proficient taxpayers can get free help with their tax return from the nationwide Volunteer Income Tax Assistance (VITA) program. Irs extension form 2012 The Tax Counseling for the Elderly (TCE) program helps taxpayers 60 and older with their tax returns. Irs extension form 2012 Most VITA and TCE sites offer free electronic filing. Irs extension form 2012 Some VITA and TCE sites provide IRS-certified volunteers who can help prepare your tax return. Irs extension form 2012 Through the TCE program, AARP offers the Tax-Aide counseling program; call 1-888-227-7669 to find the nearest Tax-Aide location. Irs extension form 2012 Call to check the status of your 2013 refund, 1-800-829-1954 or 1-800-829-4477. Irs extension form 2012 The automated Where's My Refund? information is available 24 hours a day, 7 days a week. Irs extension form 2012 If you e-file, your refund status is usually available within 24 hours after the IRS receives your tax return or 4 weeks after you've mailed a paper return. Irs extension form 2012 Before you call, have your 2013 tax return handy so you can provide your social security number, your filing status, and the exact whole dollar amount of your refund. Irs extension form 2012 Where's My Refund? can give you a personalized refund date as soon as the IRS processes your tax return and approves your refund. Irs extension form 2012 Where's My Refund? includes information for the most recent return filed in the current year and does not include information about amended returns. Irs extension form 2012 Call the Amended Return Hotline, 1-866-464-2050, to check the status of your amended return. Irs extension form 2012 Call to order forms, instructions and publications, 1-800-TAX-FORM (1-800-829-3676) to order current-year forms, instructions and publications, and prior-year forms and instructions (limited to 5 years). Irs extension form 2012 You should receive your order within 10 business days. Irs extension form 2012 Call to order transcripts of your tax returns or tax account, 1-800-908-9946. Irs extension form 2012 Follow the prompts to provide your Social Security Number or Individual Taxpayer Identification Number, date of birth, street address and ZIP code. Irs extension form 2012 Call for TeleTax topics, 1-800-829-4477, to listen to pre-recorded messages covering various tax topics. Irs extension form 2012 Call to ask tax questions, 1-800-829-1040. Irs extension form 2012 Call using TTY/TDD equipment, 1-800-829-4059 to ask tax questions or order forms and publications. Irs extension form 2012 The TTY/TDD telephone number is for people who are deaf, hard of hearing, or have a speech disability. Irs extension form 2012 These individuals can also contact the IRS through relay services such as the Federal Relay Service available at www. Irs extension form 2012 gsa. Irs extension form 2012 gov/fedrelay. Irs extension form 2012 Walk-in. Irs extension form 2012 You can find a selection of forms, publications and services — in-person, face-to-face. Irs extension form 2012 Products. Irs extension form 2012 You can walk in to some post offices, libraries, and IRS offices to pick up certain forms, instructions, and publications. Irs extension form 2012 Some IRS offices, libraries, and city and county government offices have a collection of products available to photocopy from reproducible proofs. Irs extension form 2012 Services. Irs extension form 2012 You can walk in to your local TAC most business days for personal, face-to-face tax help. Irs extension form 2012 An employee can explain IRS letters, request adjustments to your tax account, or help you set up a payment plan. Irs extension form 2012 If you need to resolve a tax problem, have questions about how the tax law applies to your individual tax return, or you are more comfortable talking with someone in person, visit your local TAC where you can talk with an IRS representative face-to-face. Irs extension form 2012 No appointment is necessary—just walk in. Irs extension form 2012 Before visiting, check www. Irs extension form 2012 irs. Irs extension form 2012 gov/localcontacts for hours of operation and services provided. Irs extension form 2012 Mail. Irs extension form 2012 You can send your order for forms, instructions, and publications to the address below. Irs extension form 2012 You should receive a response within 10 business days after your request is received. Irs extension form 2012  Internal Revenue Service 1201 N. Irs extension form 2012 Mitsubishi Motorway Bloomington, IL 61705-6613 The Taxpayer Advocate Service Is Here to Help You. Irs extension form 2012   The Taxpayer Advocate Service (TAS) is your voice at the IRS. Irs extension form 2012 Our job is to ensure that every taxpayer is treated fairly and that you know and understand your rights. Irs extension form 2012 What can TAS do for you?   We can offer you free help with IRS problems that you can't resolve on your own. Irs extension form 2012 We know this process can be confusing, but the worst thing you can do is nothing at all! TAS can help if you can't resolve your tax problem and: Your problem is causing financial difficulties for you, your family, or your business. Irs extension form 2012 You face (or your business is facing) an immediate threat of adverse action. Irs extension form 2012 You've tried repeatedly to contact the IRS but no one has responded, or the IRS hasn't responded by the date promised. Irs extension form 2012   If you qualify for our help, you'll be assigned to one advocate who'll be with you at every turn and will do everything possible to resolve your problem. Irs extension form 2012 Here's why we can help: TAS is an independent organization within the IRS. Irs extension form 2012 Our advocates know how to work with the IRS. Irs extension form 2012 Our services are free and tailored to meet your needs. Irs extension form 2012 We have offices in every state, the District of Columbia, and Puerto Rico. Irs extension form 2012 How can you reach us?   If you think TAS can help you, call your local advocate, whose number is in your local directory and at www. Irs extension form 2012 irs. Irs extension form 2012 gov/advocate, or call us toll-free at 1-877-777-4778. Irs extension form 2012 How else does TAS help taxpayers?   TAS also works to resolve large-scale, systemic problems that affect many taxpayers. Irs extension form 2012 If you know of one of these broad issues, please report it to us through our Systemic Advocacy Management System at www. Irs extension form 2012 irs. Irs extension form 2012 gov/sams. Irs extension form 2012 Low Income Taxpayer Clinics. Irs extension form 2012   Low Income Taxpayer Clinics (LITCs) serve individuals whose income is below a certain level and need to resolve tax problems such as audits, appeals, and tax collection disputes. Irs extension form 2012 Some clinics can provide information about taxpayer rights and responsibilities in different languages for individuals who speak English as a second language. Irs extension form 2012 Visit www. Irs extension form 2012 TaxpayerAdvocate. Irs extension form 2012 irs. Irs extension form 2012 gov or see IRS Publication 4134, Low Income Taxpayer Clinic List. Irs extension form 2012 Prev  Up  Next   Home   More Online Publications
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Understanding Your CP295 Notice

We charged you a penalty on your Form 5500.


What you need to do

  • Pay the amount due to avoid additional penalty and interest charges.

Answers to Common Questions

What steps can I take if I can't pay the full amount?
Visit our website under the payment tab for more information about payment options.

What if I don't pay the amount by the due date?
Additional penalties and interest will accrue.

Can I request the penalty be removed or reduced?
If you believe a penalty should be reconsidered, mail a signed statement to the address on your notice. Identify which penalty you want reconsidered and why. We'll review the information and let you know if we accept your explanation.


  • Understanding your notice

    Your notice may look different from the sample because the information contained in your notice is tailored to your situation.

    Notice CP295, Page 1

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    Notice CP295, Page 4

Page Last Reviewed or Updated: 19-Dec-2013

How to get help

  • Call the 1-800 number listed on the top right corner of your notice.
  • Authorize someone (e.g., accountant) to contact the IRS on your behalf using Form 2848.
  • See if you qualify for help from a Low Income Taxpayer Clinic.
     

The Irs Extension Form 2012

Irs extension form 2012 8. Irs extension form 2012   Amortization Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: How To Deduct Amortization Starting a BusinessBusiness Start-Up Costs Costs of Organizing a Corporation Costs of Organizing a Partnership How To Amortize Getting a Lease Section 197 IntangiblesSection 197 Intangibles Defined Assets That Are Not Section 197 Intangibles Safe Harbor for Creative Property Costs Anti-Churning Rules Incorrect Amount of Amortization Deducted Disposition of Section 197 Intangibles Reforestation Costs Geological and Geophysical Costs Pollution Control FacilitiesNew identifiable treatment facility. Irs extension form 2012 Research and Experimental Costs Optional Write-off of Certain Tax Preferences Introduction Amortization is a method of recovering (deducting) certain capital costs over a fixed period of time. Irs extension form 2012 It is similar to the straight line method of depreciation. Irs extension form 2012 The various amortizable costs covered in this chapter are included in the list below. Irs extension form 2012 However, this chapter does not discuss amortization of bond premium. Irs extension form 2012 For information on that topic, see chapter 3 of Publication 550, Investment Income and Expenses. Irs extension form 2012 Topics - This chapter discusses: Deducting amortization Amortizing costs of starting a business Amortizing costs of getting a lease Amortizing costs of section 197 intangibles Amortizing reforestation costs Amortizing costs of geological and geophysical costs Amortizing costs of pollution control facilities Amortizing costs of research and experimentation Amortizing costs of certain tax preferences Useful Items - You may want to see: Publication 544 Sales and Other Dispositions of Assets 550 Investment Income and Expenses 946 How To Depreciate Property Form (and Instructions) 4562 Depreciation and Amortization 4626 Alternative Minimum Tax—Corporations 6251 Alternative Minimum Tax—Individuals See chapter 12 for information about getting publications and forms. Irs extension form 2012 How To Deduct Amortization To deduct amortization that begins during the current tax year, complete Part VI of Form 4562 and attach it to your income tax return. Irs extension form 2012 To report amortization from previous years, in addition to amortization that begins in the current year, list on Form 4562 each item separately. Irs extension form 2012 For example, in 2012, you began to amortize a lease. Irs extension form 2012 In 2013, you began to amortize a second lease. Irs extension form 2012 Report amortization from the new lease on line 42 of your 2013 Form 4562. Irs extension form 2012 Report amortization from the 2012 lease on line 43 of your 2013 Form 4562. Irs extension form 2012 If you do not have any new amortizable expenses for the current year, you are not required to complete Form 4562 (unless you are claiming depreciation). Irs extension form 2012 Report the current year's deduction for amortization that began in a prior year directly on the “Other deduction” or “Other expense line” of your return. Irs extension form 2012 Starting a Business When you start a business, treat all eligible costs you incur before you begin operating the business as capital expenditures which are part of your basis in the business. Irs extension form 2012 Generally, you recover costs for particular assets through depreciation deductions. Irs extension form 2012 However, you generally cannot recover other costs until you sell the business or otherwise go out of business. Irs extension form 2012 For a discussion on how to treat these costs, see If your attempt to go into business is unsuccessful under Capital Expenses in chapter 1. Irs extension form 2012 For costs paid or incurred after September 8, 2008, you can deduct a limited amount of start-up and organizational costs. Irs extension form 2012 The costs that are not deducted currently can be amortized ratably over a 180-month period. Irs extension form 2012 The amortization period starts with the month you begin operating your active trade or business. Irs extension form 2012 You are not required to attach a statement to make this election. Irs extension form 2012 You can choose to forgo this election by affirmatively electing to capitalize your start-up costs on your income tax return filed by the due date (including extensions) for the tax year in which the active trade or business begins. Irs extension form 2012 Once made, the election to either amortize or capitalize start-up costs is irrevocable and applies to all start-up costs that are related to your trade or business. Irs extension form 2012 See Regulations sections 1. Irs extension form 2012 195-1, 1. Irs extension form 2012 248-1, and 1. Irs extension form 2012 709-1. Irs extension form 2012 For costs paid or incurred after October 22, 2004, and before September 9, 2008, you can elect to deduct a limited amount of business start-up and organizational costs in the year your active trade or business begins. Irs extension form 2012 Any costs not deducted can be amortized ratably over a 180-month period, beginning with the month you begin business. Irs extension form 2012 If the election is made, you must attach any statement required by Regulations sections 1. Irs extension form 2012 195-1(b), 1. Irs extension form 2012 248-1(c), and 1. Irs extension form 2012 709-1(c), as in effect before September 9, 2008. Irs extension form 2012 Note. Irs extension form 2012 You can apply the provisions of Regulations sections 1. Irs extension form 2012 195-1, 1. Irs extension form 2012 248-1, and 1. Irs extension form 2012 709-1 to all business start-up and organizational costs paid or incurred after October 22, 2004, provided the period of limitations on assessment has not expired for the year of the election. Irs extension form 2012 Otherwise, the provisions under Regulations sections 1. Irs extension form 2012 195-1(b), 1. Irs extension form 2012 248-1(c), and 1. Irs extension form 2012 709-1(c), as in effect before September 9, 2008, will apply. Irs extension form 2012 For costs paid or incurred before October 23, 2004, you can elect to amortize business start-up and organization costs over an amortization period of 60 months or more. Irs extension form 2012 See How To Make the Election , later. Irs extension form 2012 The cost must qualify as one of the following. Irs extension form 2012 A business start-up cost. Irs extension form 2012 An organizational cost for a corporation. Irs extension form 2012 An organizational cost for a partnership. Irs extension form 2012 Business Start-Up Costs Start-up costs are amounts paid or incurred for: (a) creating an active trade or business; or (b) investigating the creation or acquisition of an active trade or business. Irs extension form 2012 Start-up costs include amounts paid or incurred in connection with an existing activity engaged in for profit; and for the production of income in anticipation of the activity becoming an active trade or business. Irs extension form 2012 Qualifying costs. Irs extension form 2012   A start-up cost is amortizable if it meets both of the following tests. Irs extension form 2012 It is a cost you could deduct if you paid or incurred it to operate an existing active trade or business (in the same field as the one you entered into). Irs extension form 2012 It is a cost you pay or incur before the day your active trade or business begins. Irs extension form 2012   Start-up costs include amounts paid for the following: An analysis or survey of potential markets, products, labor supply, transportation facilities, etc. Irs extension form 2012 Advertisements for the opening of the business. Irs extension form 2012 Salaries and wages for employees who are being trained and their instructors. Irs extension form 2012 Travel and other necessary costs for securing prospective distributors, suppliers, or customers. Irs extension form 2012 Salaries and fees for executives and consultants, or for similar professional services. Irs extension form 2012 Nonqualifying costs. Irs extension form 2012   Start-up costs do not include deductible interest, taxes, or research and experimental costs. Irs extension form 2012 See Research and Experimental Costs , later. Irs extension form 2012 Purchasing an active trade or business. Irs extension form 2012   Amortizable start-up costs for purchasing an active trade or business include only investigative costs incurred in the course of a general search for or preliminary investigation of the business. Irs extension form 2012 These are costs that help you decide whether to purchase a business. Irs extension form 2012 Costs you incur in an attempt to purchase a specific business are capital expenses that you cannot amortize. Irs extension form 2012 Example. Irs extension form 2012 On June 1st, you hired an accounting firm and a law firm to assist you in the potential purchase of XYZ, Inc. Irs extension form 2012 They researched XYZ's industry and analyzed the financial projections of XYZ, Inc. Irs extension form 2012 In September, the law firm prepared and submitted a letter of intent to XYZ, Inc. Irs extension form 2012 The letter stated that a binding commitment would result only after a purchase agreement was signed. Irs extension form 2012 The law firm and accounting firm continued to provide services including a review of XYZ's books and records and the preparation of a purchase agreement. Irs extension form 2012 On October 22nd, you signed a purchase agreement with XYZ, Inc. Irs extension form 2012 All amounts paid or incurred to investigate the business before October 22nd are amortizable investigative costs. Irs extension form 2012 Amounts paid on or after that date relate to the attempt to purchase the business and therefore must be capitalized. Irs extension form 2012 Disposition of business. Irs extension form 2012   If you completely dispose of your business before the end of the amortization period, you can deduct any remaining deferred start-up costs. Irs extension form 2012 However, you can deduct these deferred start-up costs only to the extent they qualify as a loss from a business. Irs extension form 2012 Costs of Organizing a Corporation Amounts paid to organize a corporation are the direct costs of creating the corporation. Irs extension form 2012 Qualifying costs. Irs extension form 2012   To qualify as an organizational cost, it must be: For the creation of the corporation, Chargeable to a capital account (see chapter 1), Amortized over the life of the corporation if the corporation had a fixed life, and Incurred before the end of the first tax year in which the corporation is in business. Irs extension form 2012   A corporation using the cash method of accounting can amortize organizational costs incurred within the first tax year, even if it does not pay them in that year. Irs extension form 2012   Examples of organizational costs include: The cost of temporary directors. Irs extension form 2012 The cost of organizational meetings. Irs extension form 2012 State incorporation fees. Irs extension form 2012 The cost of legal services. Irs extension form 2012 Nonqualifying costs. Irs extension form 2012   The following items are capital expenses that cannot be amortized: Costs for issuing and selling stock or securities, such as commissions, professional fees, and printing costs. Irs extension form 2012 Costs associated with the transfer of assets to the corporation. Irs extension form 2012 Costs of Organizing a Partnership The costs to organize a partnership are the direct costs of creating the partnership. Irs extension form 2012 Qualifying costs. Irs extension form 2012   A partnership can amortize an organizational cost only if it meets all the following tests. Irs extension form 2012 It is for the creation of the partnership and not for starting or operating the partnership trade or business. Irs extension form 2012 It is chargeable to a capital account (see chapter 1). Irs extension form 2012 It could be amortized over the life of the partnership if the partnership had a fixed life. Irs extension form 2012 It is incurred by the due date of the partnership return (excluding extensions) for the first tax year in which the partnership is in business. Irs extension form 2012 However, if the partnership uses the cash method of accounting and pays the cost after the end of its first tax year, see Cash method partnership under How To Amortize, later. Irs extension form 2012 It is for a type of item normally expected to benefit the partnership throughout its entire life. Irs extension form 2012   Organizational costs include the following fees. Irs extension form 2012 Legal fees for services incident to the organization of the partnership, such as negotiation and preparation of the partnership agreement. Irs extension form 2012 Accounting fees for services incident to the organization of the partnership. Irs extension form 2012 Filing fees. Irs extension form 2012 Nonqualifying costs. Irs extension form 2012   The following costs cannot be amortized. Irs extension form 2012 The cost of acquiring assets for the partnership or transferring assets to the partnership. Irs extension form 2012 The cost of admitting or removing partners, other than at the time the partnership is first organized. Irs extension form 2012 The cost of making a contract concerning the operation of the partnership trade or business including a contract between a partner and the partnership. Irs extension form 2012 The costs for issuing and marketing interests in the partnership such as brokerage, registration, and legal fees and printing costs. Irs extension form 2012 These “syndication fees” are capital expenses that cannot be depreciated or amortized. Irs extension form 2012 Liquidation of partnership. Irs extension form 2012   If a partnership is liquidated before the end of the amortization period, the unamortized amount of qualifying organizational costs can be deducted in the partnership's final tax year. Irs extension form 2012 However, these costs can be deducted only to the extent they qualify as a loss from a business. Irs extension form 2012 How To Amortize Deduct start-up and organizational costs in equal amounts over the applicable amortization period (discussed earlier). Irs extension form 2012 You can choose an amortization period for start-up costs that is different from the period you choose for organizational costs, as long as both are not less than the applicable amortization period. Irs extension form 2012 Once you choose an amortization period, you cannot change it. Irs extension form 2012 To figure your deduction, divide your total start-up or organizational costs by the months in the amortization period. Irs extension form 2012 The result is the amount you can deduct for each month. Irs extension form 2012 Cash method partnership. Irs extension form 2012   A partnership using the cash method of accounting can deduct an organizational cost only if it has been paid by the end of the tax year. Irs extension form 2012 However, any cost the partnership could have deducted as an organizational cost in an earlier tax year (if it had been paid that year) can be deducted in the tax year of payment. Irs extension form 2012 How To Make the Election To elect to amortize start-up or organizational costs, you must complete and attach Form 4562 to your return for the first tax year you are in business. Irs extension form 2012 You may also be required to attach an accompanying statement (described later) to your return. Irs extension form 2012 For start-up or organizational costs paid or incurred after September 8, 2008, an accompanying statement is not required. Irs extension form 2012 Generally, for start-up or organizational costs paid or incurred before September 9, 2008, and after October 22, 2004, unless you choose to apply Regulations sections 1. Irs extension form 2012 195-1, 1. Irs extension form 2012 248-1, and 1. Irs extension form 2012 709-1, you must also attach an accompanying statement to elect to amortize the costs. Irs extension form 2012 If you have both start-up and organizational costs, attach a separate statement (if required) to your return for each type of cost. Irs extension form 2012 See Starting a Business , earlier, for more information. Irs extension form 2012 Generally, you must file the return by the due date (including any extensions). Irs extension form 2012 However, if you timely filed your return for the year without making the election, you can still make the election by filing an amended return within 6 months of the due date of the return (excluding extensions). Irs extension form 2012 For more information, see the instructions for Part VI of Form 4562. Irs extension form 2012 You can choose to forgo the election to amortize by affirmatively electing to capitalize your start-up or organizational costs on your income tax return filed by the due date (including extensions) for the tax year in which the active trade or business begins. Irs extension form 2012 Note. Irs extension form 2012 The election to either amortize or capitalize start-up or organizational costs is irrevocable and applies to all start-up and organizational costs that are related to the trade or business. Irs extension form 2012 If your business is organized as a corporation or partnership, only the corporation or partnership can elect to amortize its start-up or organizational costs. Irs extension form 2012 A shareholder or partner cannot make this election. Irs extension form 2012 You, as a shareholder or partner, cannot amortize any costs you incur in setting up your corporation or partnership. Irs extension form 2012 Only the corporation or partnership can amortize these costs. Irs extension form 2012 However, you, as an individual, can elect to amortize costs you incur to investigate an interest in an existing partnership. Irs extension form 2012 These costs qualify as business start-up costs if you acquire the partnership interest. Irs extension form 2012 Start-up costs election statement. Irs extension form 2012   If you elect to amortize your start-up costs, attach a separate statement (if required) that contains the following information. Irs extension form 2012 A description of the business to which the start-up costs relate. Irs extension form 2012 A description of each start-up cost incurred. Irs extension form 2012 The month your active business began (or was acquired). Irs extension form 2012 The number of months in your amortization period (which is generally 180 months). Irs extension form 2012 Filing the statement early. Irs extension form 2012   You can elect to amortize your start-up costs by filing the statement with a return for any tax year before the year your active business begins. Irs extension form 2012 If you file the statement early, the election becomes effective in the month of the tax year your active business begins. Irs extension form 2012 Revised statement. Irs extension form 2012   You can file a revised statement to include any start-up costs not included in your original statement. Irs extension form 2012 However, you cannot include on the revised statement any cost you previously treated on your return as a cost other than a start-up cost. Irs extension form 2012 You can file the revised statement with a return filed after the return on which you elected to amortize your start-up costs. Irs extension form 2012 Organizational costs election statement. Irs extension form 2012   If you elect to amortize your corporation's or partnership's organizational costs, attach a separate statement (if required) that contains the following information. Irs extension form 2012 A description of each cost. Irs extension form 2012 The amount of each cost. Irs extension form 2012 The date each cost was incurred. Irs extension form 2012 The month your corporation or partnership began active business (or acquired the business). Irs extension form 2012 The number of months in your amortization period (which is generally 180 months). Irs extension form 2012 Partnerships. Irs extension form 2012   The statement prepared for a cash basis partnership must also indicate the amount paid before the end of the year for each cost. Irs extension form 2012   You do not need to separately list any partnership organizational cost that is less than $10. Irs extension form 2012 Instead, you can list the total amount of these costs with the dates the first and last costs were incurred. Irs extension form 2012   After a partnership makes the election to amortize organizational costs, it can later file an amended return to include additional organizational costs not included in the partnership's original return and statement. Irs extension form 2012 Getting a Lease If you get a lease for business property, you may recover the cost of acquiring the lease by amortizing it over the term of the lease. Irs extension form 2012 The term of the lease for amortization purposes generally includes all renewal options (and any other period for which you and the lessor reasonably expect the lease to be renewed). Irs extension form 2012 However, renewal periods are not included if 75% or more of the cost of acquiring the lease is for the term of the lease remaining on the acquisition date (not including any period for which you may choose to renew, extend, or continue the lease). Irs extension form 2012 For more information on the costs of getting a lease, see Cost of Getting a Lease in  chapter 3. Irs extension form 2012 How to amortize. Irs extension form 2012   Enter your deduction in Part VI of Form 4562 if you are deducting amortization that begins during the current year, or on the appropriate line of your tax return if you are not otherwise required to file Form 4562. Irs extension form 2012 Section 197 Intangibles Generally, you may amortize the capitalized costs of “section 197 intangibles” (defined later) ratably over a 15-year period. Irs extension form 2012 You must amortize these costs if you hold the section 197 intangibles in connection with your trade or business or in an activity engaged in for the production of income. Irs extension form 2012 You may not be able to amortize section 197 intangibles acquired in a transaction that did not result in a significant change in ownership or use. Irs extension form 2012 See Anti-Churning Rules, later. Irs extension form 2012 Your amortization deduction each year is the applicable part of the intangible's adjusted basis (for purposes of determining gain), figured by amortizing it ratably over 15 years (180 months). Irs extension form 2012 The 15-year period begins with the later of: The month the intangible is acquired, or The month the trade or business or activity engaged in for the production of income begins. Irs extension form 2012 You cannot deduct amortization for the month you dispose of the intangible. Irs extension form 2012 If you pay or incur an amount that increases the basis of an amortizable section 197 intangible after the 15-year period begins, amortize it over the remainder of the 15-year period beginning with the month the basis increase occurs. Irs extension form 2012 You are not allowed any other depreciation or amortization deduction for an amortizable section 197 intangible. Irs extension form 2012 Tax-exempt use property subject to a lease. Irs extension form 2012   The amortization period for any section 197 intangible leased under a lease agreement entered into after March 12, 2004, to a tax-exempt organization, governmental unit, or foreign person or entity (other than a partnership), shall not be less than 125 percent of the lease term. Irs extension form 2012 Cost attributable to other property. Irs extension form 2012   The rules for section 197 intangibles do not apply to any amount that is included in determining the cost of property that is not a section 197 intangible. Irs extension form 2012 For example, if the cost of computer software is not separately stated from the cost of hardware or other tangible property and you consistently treat it as part of the cost of the hardware or other tangible property, these rules do not apply. Irs extension form 2012 Similarly, none of the cost of acquiring real property held for the production of rental income is considered the cost of goodwill, going concern value, or any other section 197 intangible. Irs extension form 2012 Section 197 Intangibles Defined The following assets are section 197 intangibles and must be amortized over 180 months: Goodwill; Going concern value; Workforce in place; Business books and records, operating systems, or any other information base, including lists or other information concerning current or prospective customers; A patent, copyright, formula, process, design, pattern, know-how, format, or similar item; A customer-based intangible; A supplier-based intangible; Any item similar to items (3) through (7); A license, permit, or other right granted by a governmental unit or agency (including issuances and renewals); A covenant not to compete entered into in connection with the acquisition of an interest in a trade or business; Any franchise, trademark, or trade name; and A contract for the use of, or a term interest in, any item in this list. Irs extension form 2012 You cannot amortize any of the intangibles listed in items (1) through (8) that you created rather than acquired unless you created them in acquiring assets that make up a trade or business or a substantial part of a trade or business. Irs extension form 2012 Goodwill. Irs extension form 2012   This is the value of a trade or business based on expected continued customer patronage due to its name, reputation, or any other factor. Irs extension form 2012 Going concern value. Irs extension form 2012   This is the additional value of a trade or business that attaches to property because the property is an integral part of an ongoing business activity. Irs extension form 2012 It includes value based on the ability of a business to continue to function and generate income even though there is a change in ownership (but does not include any other section 197 intangible). Irs extension form 2012 It also includes value based on the immediate use or availability of an acquired trade or business, such as the use of earnings during any period in which the business would not otherwise be available or operational. Irs extension form 2012 Workforce in place, etc. Irs extension form 2012   This includes the composition of a workforce (for example, its experience, education, or training). Irs extension form 2012 It also includes the terms and conditions of employment, whether contractual or otherwise, and any other value placed on employees or any of their attributes. Irs extension form 2012   For example, you must amortize the part of the purchase price of a business that is for the existence of a highly skilled workforce. Irs extension form 2012 Also, you must amortize the cost of acquiring an existing employment contract or relationship with employees or consultants. Irs extension form 2012 Business books and records, etc. Irs extension form 2012   This includes the intangible value of technical manuals, training manuals or programs, data files, and accounting or inventory control systems. Irs extension form 2012 It also includes the cost of customer lists, subscription lists, insurance expirations, patient or client files, and lists of newspaper, magazine, radio, and television advertisers. Irs extension form 2012 Patents, copyrights, etc. Irs extension form 2012   This includes package design, computer software, and any interest in a film, sound recording, videotape, book, or other similar property, except as discussed later under Assets That Are Not Section 197 Intangibles . Irs extension form 2012 Customer-based intangible. Irs extension form 2012   This is the composition of market, market share, and any other value resulting from the future provision of goods or services because of relationships with customers in the ordinary course of business. Irs extension form 2012 For example, you must amortize the part of the purchase price of a business that is for the existence of the following intangibles. Irs extension form 2012 A customer base. Irs extension form 2012 A circulation base. Irs extension form 2012 An undeveloped market or market growth. Irs extension form 2012 Insurance in force. Irs extension form 2012 A mortgage servicing contract. Irs extension form 2012 An investment management contract. Irs extension form 2012 Any other relationship with customers involving the future provision of goods or services. Irs extension form 2012   Accounts receivable or other similar rights to income for goods or services provided to customers before the acquisition of a trade or business are not section 197 intangibles. Irs extension form 2012 Supplier-based intangible. Irs extension form 2012   A supplier-based intangible is the value resulting from the future acquisitions, (through contract or other relationships with suppliers in the ordinary course of business) of goods or services that you will sell or use. Irs extension form 2012 The amount you pay or incur for supplier-based intangibles includes, for example, any portion of the purchase price of an acquired trade or business that is attributable to the existence of a favorable relationship with persons providing distribution services (such as a favorable shelf or display space or a retail outlet), or the existence of favorable supply contracts. Irs extension form 2012 Do not include any amount required to be paid for the goods or services to honor the terms of the agreement or other relationship. Irs extension form 2012 Also, see Assets That Are Not Section 197 Intangibles below. Irs extension form 2012 Government-granted license, permit, etc. Irs extension form 2012   This is any right granted by a governmental unit or an agency or instrumentality of a governmental unit. Irs extension form 2012 For example, you must amortize the capitalized costs of acquiring (including issuing or renewing) a liquor license, a taxicab medallion or license, or a television or radio broadcasting license. Irs extension form 2012 Covenant not to compete. Irs extension form 2012   Section 197 intangibles include a covenant not to compete (or similar arrangement) entered into in connection with the acquisition of an interest in a trade or business, or a substantial portion of a trade or business. Irs extension form 2012 An interest in a trade or business includes an interest in a partnership or a corporation engaged in a trade or business. Irs extension form 2012   An arrangement that requires the former owner to perform services (or to provide property or the use of property) is not similar to a covenant not to compete to the extent the amount paid under the arrangement represents reasonable compensation for those services or for that property or its use. Irs extension form 2012 Franchise, trademark, or trade name. Irs extension form 2012   A franchise, trademark, or trade name is a section 197 intangible. Irs extension form 2012 You must amortize its purchase or renewal costs, other than certain contingent payments that you can deduct currently. Irs extension form 2012 For information on currently deductible contingent payments, see chapter 11. Irs extension form 2012 Professional sports franchise. Irs extension form 2012   A franchise engaged in professional sports and any intangible assets acquired in connection with acquiring the franchise (including player contracts) is a section 197 intangible amortizable over a 15-year period. Irs extension form 2012 Contract for the use of, or a term interest in, a section 197 intangible. Irs extension form 2012   Section 197 intangibles include any right under a license, contract, or other arrangement providing for the use of any section 197 intangible. Irs extension form 2012 It also includes any term interest in any section 197 intangible, whether the interest is outright or in trust. Irs extension form 2012 Assets That Are Not Section 197 Intangibles The following assets are not section 197 intangibles. Irs extension form 2012 Any interest in a corporation, partnership, trust, or estate. Irs extension form 2012 Any interest under an existing futures contract, foreign currency contract, notional principal contract, interest rate swap, or similar financial contract. Irs extension form 2012 Any interest in land. Irs extension form 2012 Most computer software. Irs extension form 2012 (See Computer software , later. Irs extension form 2012 ) Any of the following assets not acquired in connection with the acquisition of a trade or business or a substantial part of a trade or business. Irs extension form 2012 An interest in a film, sound recording, video tape, book, or similar property. Irs extension form 2012 A right to receive tangible property or services under a contract or from a governmental agency. Irs extension form 2012 An interest in a patent or copyright. Irs extension form 2012 Certain rights that have a fixed duration or amount. Irs extension form 2012 (See Rights of fixed duration or amount , later. Irs extension form 2012 ) An interest under either of the following. Irs extension form 2012 An existing lease or sublease of tangible property. Irs extension form 2012 A debt that was in existence when the interest was acquired. Irs extension form 2012 A right to service residential mortgages unless the right is acquired in connection with the acquisition of a trade or business or a substantial part of a trade or business. Irs extension form 2012 Certain transaction costs incurred by parties to a corporate organization or reorganization in which any part of a gain or loss is not recognized. Irs extension form 2012 Intangible property that is not amortizable under the rules for section 197 intangibles can be depreciated if it meets certain requirements. Irs extension form 2012 You generally must use the straight line method over its useful life. Irs extension form 2012 For certain intangibles, the depreciation period is specified in the law and regulations. Irs extension form 2012 For example, the depreciation period for computer software that is not a section 197 intangible is generally 36 months. Irs extension form 2012 For more information on depreciating intangible property, see Intangible Property under What Method Can You Use To Depreciate Your Property? in chapter 1 of Publication 946. Irs extension form 2012 Computer software. Irs extension form 2012   Section 197 intangibles do not include the following types of computer software. Irs extension form 2012 Software that meets all the following requirements. Irs extension form 2012 It is, or has been, readily available for purchase by the general public. Irs extension form 2012 It is subject to a nonexclusive license. Irs extension form 2012 It has not been substantially modified. Irs extension form 2012 This requirement is considered met if the cost of all modifications is not more than the greater of 25% of the price of the publicly available unmodified software or $2,000. Irs extension form 2012 Software that is not acquired in connection with the acquisition of a trade or business or a substantial part of a trade or business. Irs extension form 2012 Computer software defined. Irs extension form 2012   Computer software includes all programs designed to cause a computer to perform a desired function. Irs extension form 2012 It also includes any database or similar item that is in the public domain and is incidental to the operation of qualifying software. Irs extension form 2012 Rights of fixed duration or amount. Irs extension form 2012   Section 197 intangibles do not include any right under a contract or from a governmental agency if the right is acquired in the ordinary course of a trade or business (or in an activity engaged in for the production of income) but not as part of a purchase of a trade or business and either: Has a fixed life of less than 15 years, or Is of a fixed amount that, except for the rules for section 197 intangibles, would be recovered under a method similar to the unit-of-production method of cost recovery. Irs extension form 2012 However, this does not apply to the following intangibles. Irs extension form 2012 Goodwill. Irs extension form 2012 Going concern value. Irs extension form 2012 A covenant not to compete. Irs extension form 2012 A franchise, trademark, or trade name. Irs extension form 2012 A customer-related information base, customer-based intangible, or similar item. Irs extension form 2012 Safe Harbor for Creative Property Costs If you are engaged in the trade or business of film production, you may be able to amortize the creative property costs for properties not set for production within 3 years of the first capitalized transaction. Irs extension form 2012 You may amortize these costs ratably over a 15-year period beginning on the first day of the second half of the tax year in which you properly write off the costs for financial accounting purposes. Irs extension form 2012 If, during the 15-year period, you dispose of the creative property rights, you must continue to amortize the costs over the remainder of the 15-year period. Irs extension form 2012 Creative property costs include costs paid or incurred to acquire and develop screenplays, scripts, story outlines, motion picture production rights to books and plays, and other similar properties for purposes of potential future film development, production, and exploitation. Irs extension form 2012 Amortize these costs using the rules of Revenue Procedure 2004-36. Irs extension form 2012 For more information, see Revenue Procedure 2004-36, 2004-24 I. Irs extension form 2012 R. Irs extension form 2012 B. Irs extension form 2012 1063, available at  www. Irs extension form 2012 irs. Irs extension form 2012 gov/irb/2004-24_IRB/ar16. Irs extension form 2012 html. Irs extension form 2012 A change in the treatment of creative property costs is a change in method of accounting. Irs extension form 2012 Anti-Churning Rules Anti-churning rules prevent you from amortizing most section 197 intangibles if the transaction in which you acquired them did not result in a significant change in ownership or use. Irs extension form 2012 These rules apply to goodwill and going concern value, and to any other section 197 intangible that is not otherwise depreciable or amortizable. Irs extension form 2012 Under the anti-churning rules, you cannot use 15-year amortization for the intangible if any of the following conditions apply. Irs extension form 2012 You or a related person (defined later) held or used the intangible at any time from July 25, 1991, through August 10, 1993. Irs extension form 2012 You acquired the intangible from a person who held it at any time during the period in (1) and, as part of the transaction, the user did not change. Irs extension form 2012 You granted the right to use the intangible to a person (or a person related to that person) who held or used it at any time during the period in (1). Irs extension form 2012 This applies only if the transaction in which you granted the right and the transaction in which you acquired the intangible are part of a series of related transactions. Irs extension form 2012 See Related person , later, for more information. Irs extension form 2012 Exceptions. Irs extension form 2012   The anti-churning rules do not apply in the following situations. Irs extension form 2012 You acquired the intangible from a decedent and its basis was stepped up to its fair market value. Irs extension form 2012 The intangible was amortizable as a section 197 intangible by the seller or transferor you acquired it from. Irs extension form 2012 This exception does not apply if the transaction in which you acquired the intangible and the transaction in which the seller or transferor acquired it are part of a series of related transactions. Irs extension form 2012 The gain-recognition exception, discussed later, applies. Irs extension form 2012 Related person. Irs extension form 2012   For purposes of the anti-churning rules, the following are related persons. Irs extension form 2012 An individual and his or her brothers, sisters, half-brothers, half-sisters, spouse, ancestors (parents, grandparents, etc. Irs extension form 2012 ), and lineal descendants (children, grandchildren, etc. Irs extension form 2012 ). Irs extension form 2012 A corporation and an individual who owns, directly or indirectly, more than 20% of the value of the corporation's outstanding stock. Irs extension form 2012 Two corporations that are members of the same controlled group as defined in section 1563(a) of the Internal Revenue Code, except that “more than 20%” is substituted for “at least 80%” in that definition and the determination is made without regard to subsections (a)(4) and (e)(3)(C) of section 1563. Irs extension form 2012 (For an exception, see section 1. Irs extension form 2012 197-2(h)(6)(iv) of the regulations. Irs extension form 2012 ) A trust fiduciary and a corporation if more than 20% of the value of the corporation's outstanding stock is owned, directly or indirectly, by or for the trust or grantor of the trust. Irs extension form 2012 The grantor and fiduciary, and the fiduciary and beneficiary, of any trust. Irs extension form 2012 The fiduciaries of two different trusts, and the fiduciaries and beneficiaries of two different trusts, if the same person is the grantor of both trusts. Irs extension form 2012 The executor and beneficiary of an estate. Irs extension form 2012 A tax-exempt educational or charitable organization and a person who directly or indirectly controls the organization (or whose family members control it). Irs extension form 2012 A corporation and a partnership if the same persons own more than 20% of the value of the outstanding stock of the corporation and more than 20% of the capital or profits interest in the partnership. Irs extension form 2012 Two S corporations, and an S corporation and a regular corporation, if the same persons own more than 20% of the value of the outstanding stock of each corporation. Irs extension form 2012 Two partnerships if the same persons own, directly or indirectly, more than 20% of the capital or profits interests in both partnerships. Irs extension form 2012 A partnership and a person who owns, directly or indirectly, more than 20% of the capital or profits interests in the partnership. Irs extension form 2012 Two persons who are engaged in trades or businesses under common control (as described in section 41(f)(1) of the Internal Revenue Code). Irs extension form 2012 When to determine relationship. Irs extension form 2012   Persons are treated as related if the relationship existed at the following time. Irs extension form 2012 In the case of a single transaction, immediately before or immediately after the transaction in which the intangible was acquired. Irs extension form 2012 In the case of a series of related transactions (or a series of transactions that comprise a qualified stock purchase under section 338(d)(3) of the Internal Revenue Code), immediately before the earliest transaction or immediately after the last transaction. Irs extension form 2012 Ownership of stock. Irs extension form 2012   In determining whether an individual directly or indirectly owns any of the outstanding stock of a corporation, the following rules apply. Irs extension form 2012 Rule 1. Irs extension form 2012   Stock directly or indirectly owned by or for a corporation, partnership, estate, or trust is considered owned proportionately by or for its shareholders, partners, or beneficiaries. Irs extension form 2012 Rule 2. Irs extension form 2012   An individual is considered to own the stock directly or indirectly owned by or for his or her family. Irs extension form 2012 Family includes only brothers and sisters, half-brothers and half-sisters, spouse, ancestors, and lineal descendants. Irs extension form 2012 Rule 3. Irs extension form 2012   An individual owning (other than by applying Rule 2) any stock in a corporation is considered to own the stock directly or indirectly owned by or for his or her partner. Irs extension form 2012 Rule 4. Irs extension form 2012   For purposes of applying Rule 1, 2, or 3, treat stock constructively owned by a person under Rule 1 as actually owned by that person. Irs extension form 2012 Do not treat stock constructively owned by an individual under Rule 2 or 3 as owned by the individual for reapplying Rule 2 or 3 to make another person the constructive owner of the stock. Irs extension form 2012 Gain-recognition exception. Irs extension form 2012   This exception to the anti-churning rules applies if the person you acquired the intangible from (the transferor) meets both of the following requirements. Irs extension form 2012 That person would not be related to you (as described under Related person , earlier) if the 20% test for ownership of stock and partnership interests were replaced by a 50% test. Irs extension form 2012 That person chose to recognize gain on the disposition of the intangible and pay income tax on the gain at the highest tax rate. Irs extension form 2012 See chapter 2 in Publication 544 for information on making this choice. Irs extension form 2012   If this exception applies, the anti-churning rules apply only to the amount of your adjusted basis in the intangible that is more than the gain recognized by the transferor. Irs extension form 2012 Notification. Irs extension form 2012   If the person you acquired the intangible from chooses to recognize gain under the rules for this exception, that person must notify you in writing by the due date of the return on which the choice is made. Irs extension form 2012 Anti-abuse rule. Irs extension form 2012   You cannot amortize any section 197 intangible acquired in a transaction for which the principal purpose was either of the following. Irs extension form 2012 To avoid the requirement that the intangible be acquired after August 10, 1993. Irs extension form 2012 To avoid any of the anti-churning rules. Irs extension form 2012 More information. Irs extension form 2012   For more information about the anti-churning rules, including additional rules for partnerships, see Regulations section 1. Irs extension form 2012 197-2(h). Irs extension form 2012 Incorrect Amount of Amortization Deducted If you later discover that you deducted an incorrect amount for amortization for a section 197 intangible in any year, you may be able to make a correction for that year by filing an amended return. Irs extension form 2012 See Amended Return , next. Irs extension form 2012 If you are not allowed to make the correction on an amended return, you can change your accounting method to claim the correct amortization. Irs extension form 2012 See Changing Your Accounting Method , later. Irs extension form 2012 Amended Return If you deducted an incorrect amount for amortization, you can file an amended return to correct the following. Irs extension form 2012 A mathematical error made in any year. Irs extension form 2012 A posting error made in any year. Irs extension form 2012 An amortization deduction for a section 197 intangible for which you have not adopted a method of accounting. Irs extension form 2012 When to file. Irs extension form 2012   If an amended return is allowed, you must file it by the later of the following dates. Irs extension form 2012 3 years from the date you filed your original return for the year in which you did not deduct the correct amount. Irs extension form 2012 (A return filed early is considered filed on the due date. Irs extension form 2012 ) 2 years from the time you paid your tax for that year. Irs extension form 2012 Changing Your Accounting Method Generally, you must get IRS approval to change your method of accounting. Irs extension form 2012 File Form 3115, Application for Change in Accounting Method, to request a change to a permissible method of accounting for amortization. Irs extension form 2012 The following are examples of a change in method of accounting for amortization. Irs extension form 2012 A change in the amortization method, period of recovery, or convention of an amortizable asset. Irs extension form 2012 A change in the accounting for amortizable assets from a single asset account to a multiple asset account (pooling), or vice versa. Irs extension form 2012 A change in the accounting for amortizable assets from one type of multiple asset account to a different type of multiple asset account. Irs extension form 2012 Changes in amortization that are not a change in method of accounting include the following: A change in computing amortization in the tax year in which your use of the asset changes. Irs extension form 2012 An adjustment in the useful life of an amortizable asset. Irs extension form 2012 Generally, the making of a late amortization election or the revocation of a timely valid amortization election. Irs extension form 2012 Any change in the placed-in-service date of an amortizable asset. Irs extension form 2012 See Regulations section 1. Irs extension form 2012 446-1(e)(2)(ii)(a) for more information and examples. Irs extension form 2012 Automatic approval. Irs extension form 2012   In some instances, you may be able to get automatic approval from the IRS to change your method of accounting for amortization. Irs extension form 2012 For a list of automatic accounting method changes, see the Instructions for Form 3115. Irs extension form 2012 Also see the Instructions for Form 3115 for more information on getting approval, automatic approval procedures, and a list of exceptions to the automatic approval process. Irs extension form 2012 For more information, see Revenue Procedure 2006-12, as modified by Revenue Procedure 2006-37, and Revenue Procedure 2008-52, as amplified, clarified, and modified by Revenue Procedure 2009-39, as clarified and modified by Revenue Procedure 2011-14, as modified and amplified by Revenue Procedure 2011-22, as modified by Revenue Procedure 2012-39, or any successor. Irs extension form 2012 See Revenue Procedure 2006-12, 2006-3 I. Irs extension form 2012 R. Irs extension form 2012 B. Irs extension form 2012 310, available at  www. Irs extension form 2012 irs. Irs extension form 2012 gov/irb/2006-03_IRB/ar14. Irs extension form 2012 html. Irs extension form 2012  See Revenue Procedure 2006-37, 2006-38 I. Irs extension form 2012 R. Irs extension form 2012 B. Irs extension form 2012 499, available at  www. Irs extension form 2012 irs. Irs extension form 2012 gov/irb/2006-38_IRB/ar10. Irs extension form 2012 html. Irs extension form 2012  See Revenue Procedure 2008-52, 2008-36 I. Irs extension form 2012 R. Irs extension form 2012 B. Irs extension form 2012 587, available at www. Irs extension form 2012 irs. Irs extension form 2012 gov/irb/2008-36_IRB/ar09. Irs extension form 2012 html. Irs extension form 2012  See Revenue Procedure 2009-39, 2009-38 I. Irs extension form 2012 R. Irs extension form 2012 B. Irs extension form 2012 371, available at  www. Irs extension form 2012 irs. Irs extension form 2012 gov/irb/2009-38_IRB/ar08. Irs extension form 2012 html. Irs extension form 2012  See Revenue Procedure 2011-14, 2011-4 I. Irs extension form 2012 R. Irs extension form 2012 B. Irs extension form 2012 330, available at  www. Irs extension form 2012 irs. Irs extension form 2012 gov/irb/2011-04_IRB/ar08. Irs extension form 2012 html. Irs extension form 2012  See Revenue Procedure 2011-22, 2011-18 I. Irs extension form 2012 R. Irs extension form 2012 B. Irs extension form 2012 737, available at  www. Irs extension form 2012 irs. Irs extension form 2012 gov/irb/2011-18_IRB/ar08. Irs extension form 2012 html. Irs extension form 2012 Also, see Revenue Procedure 2012-39, 2012-41 I. Irs extension form 2012 R. Irs extension form 2012 B. Irs extension form 2012 470 available at www. Irs extension form 2012 irs. Irs extension form 2012 gov/irb/2012-41_IRB/index. Irs extension form 2012 html. Irs extension form 2012 Disposition of Section 197 Intangibles A section 197 intangible is treated as depreciable property used in your trade or business. Irs extension form 2012 If you held the intangible for more than 1 year, any gain on its disposition, up to the amount of allowable amortization, is ordinary income (section 1245 gain). Irs extension form 2012 If multiple section 197 intangibles are disposed of in a single transaction or a series of related transactions, treat all of the section 197 intangibles as if they were a single asset for purposes of determining the amount of gain that is ordinary income. Irs extension form 2012 Any remaining gain, or any loss, is a section 1231 gain or loss. Irs extension form 2012 If you held the intangible 1 year or less, any gain or loss on its disposition is an ordinary gain or loss. Irs extension form 2012 For more information on ordinary or capital gain or loss on business property, see chapter 3 in Publication 544. Irs extension form 2012 Nondeductible loss. Irs extension form 2012   You cannot deduct any loss on the disposition or worthlessness of a section 197 intangible that you acquired in the same transaction (or series of related transactions) as other section 197 intangibles you still have. Irs extension form 2012 Instead, increase the adjusted basis of each remaining amortizable section 197 intangible by a proportionate part of the nondeductible loss. Irs extension form 2012 Figure the increase by multiplying the nondeductible loss on the disposition of the intangible by the following fraction. Irs extension form 2012 The numerator is the adjusted basis of each remaining intangible on the date of the disposition. Irs extension form 2012 The denominator is the total adjusted bases of all remaining amortizable section 197 intangibles on the date of the disposition. Irs extension form 2012 Covenant not to compete. Irs extension form 2012   A covenant not to compete, or similar arrangement, is not considered disposed of or worthless before you dispose of your entire interest in the trade or business for which you entered into the covenant. Irs extension form 2012 Nonrecognition transfers. Irs extension form 2012   If you acquire a section 197 intangible in a nonrecognition transfer, you are treated as the transferor with respect to the part of your adjusted basis in the intangible that is not more than the transferor's adjusted basis. Irs extension form 2012 You amortize this part of the adjusted basis over the intangible's remaining amortization period in the hands of the transferor. Irs extension form 2012 Nonrecognition transfers include transfers to a corporation, partnership contributions and distributions, like-kind exchanges, and involuntary conversions. Irs extension form 2012   In a like-kind exchange or involuntary conversion of a section 197 intangible, you must continue to amortize the part of your adjusted basis in the acquired intangible that is not more than your adjusted basis in the exchanged or converted intangible over the remaining amortization period of the exchanged or converted intangible. Irs extension form 2012 Amortize over a new 15-year period the part of your adjusted basis in the acquired intangible that is more than your adjusted basis in the exchanged or converted intangible. Irs extension form 2012 Example. Irs extension form 2012 You own a section 197 intangible you have amortized for 4 full years. Irs extension form 2012 It has a remaining unamortized basis of $30,000. Irs extension form 2012 You exchange the asset plus $10,000 for a like-kind section 197 intangible. Irs extension form 2012 The nonrecognition provisions of like-kind exchanges apply. Irs extension form 2012 You amortize $30,000 of the $40,000 adjusted basis of the acquired intangible over the 11 years remaining in the original 15-year amortization period for the transferred asset. Irs extension form 2012 You amortize the other $10,000 of adjusted basis over a new 15-year period. Irs extension form 2012 For more information, see Regulations section 1. Irs extension form 2012 197-2(g). Irs extension form 2012 Reforestation Costs You can elect to deduct a limited amount of reforestation costs paid or incurred during the tax year. Irs extension form 2012 See Reforestation Costs in chapter 7. Irs extension form 2012 You can elect to amortize the qualifying costs that are not deducted currently over an 84-month period. Irs extension form 2012 There is no limit on the amount of your amortization deduction for reforestation costs paid or incurred during the tax year. Irs extension form 2012 The election to amortize reforestation costs incurred by a partnership, S corporation, or estate must be made by the partnership, corporation, or estate. Irs extension form 2012 A partner, shareholder, or beneficiary cannot make that election. Irs extension form 2012 A partner's or shareholder's share of amortizable costs is figured under the general rules for allocating items of income, loss, deduction, etc. Irs extension form 2012 , of a partnership or S corporation. Irs extension form 2012 The amortizable costs of an estate are divided between the estate and the income beneficiary based on the income of the estate allocable to each. Irs extension form 2012 Qualifying costs. Irs extension form 2012   Reforestation costs are the direct costs of planting or seeding for forestation or reforestation. Irs extension form 2012 Qualifying costs include only those costs you must capitalize and include in the adjusted basis of the property. Irs extension form 2012 They include costs for the following items. Irs extension form 2012 Site preparation. Irs extension form 2012 Seeds or seedlings. Irs extension form 2012 Labor. Irs extension form 2012 Tools. Irs extension form 2012 Depreciation on equipment used in planting and seeding. Irs extension form 2012 Qualifying costs do not include costs for which the government reimburses you under a cost-sharing program, unless you include the reimbursement in your income. Irs extension form 2012 Qualified timber property. Irs extension form 2012   Qualified timber property is property that contains trees in significant commercial quantities. Irs extension form 2012 It can be a woodlot or other site that you own or lease. Irs extension form 2012 The property qualifies only if it meets all of the following requirements. Irs extension form 2012 It is located in the United States. Irs extension form 2012 It is held for the growing and cutting of timber you will either use in, or sell for use in, the commercial production of timber products. Irs extension form 2012 It consists of at least one acre planted with tree seedlings in the manner normally used in forestation or reforestation. Irs extension form 2012 Qualified timber property does not include property on which you have planted shelter belts or ornamental trees, such as Christmas trees. Irs extension form 2012 Amortization period. Irs extension form 2012   The 84-month amortization period starts on the first day of the first month of the second half of the tax year you incur the costs (July 1 for a calendar year taxpayer), regardless of the month you actually incur the costs. Irs extension form 2012 You can claim amortization deductions for no more than 6 months of the first and last (eighth) tax years of the period. Irs extension form 2012 Life tenant and remainderman. Irs extension form 2012   If one person holds the property for life with the remainder going to another person, the life tenant is entitled to the full amortization for qualifying reforestation costs incurred by the life tenant. Irs extension form 2012 Any remainder interest in the property is ignored for amortization purposes. Irs extension form 2012 Recapture. Irs extension form 2012   If you dispose of qualified timber property within 10 years after the tax year you incur qualifying reforestation expenses, report any gain as ordinary income up to the amortization you took. Irs extension form 2012 See chapter 3 of Publication 544 for more information. Irs extension form 2012 How to make the election. Irs extension form 2012   To elect to amortize qualifying reforestation costs, complete Part VI of Form 4562 and attach a statement that contains the following information. Irs extension form 2012 A description of the costs and the dates you incurred them. Irs extension form 2012 A description of the type of timber being grown and the purpose for which it is grown. Irs extension form 2012 Attach a separate statement for each property for which you amortize reforestation costs. Irs extension form 2012   Generally, you must make the election on a timely filed return (including extensions) for the tax year in which you incurred the costs. Irs extension form 2012 However, if you timely filed your return for the year without making the election, you can still make the election by filing an amended return within 6 months of the due date of the return (excluding extensions). Irs extension form 2012 Attach Form 4562 and the statement to the amended return and write “Filed pursuant to section 301. Irs extension form 2012 9100-2” on Form 4562. Irs extension form 2012 File the amended return at the same address you filed the original return. Irs extension form 2012 Revoking the election. Irs extension form 2012   You must get IRS approval to revoke your election to amortize qualifying reforestation costs. Irs extension form 2012 Your application to revoke the election must include your name, address, the years for which your election was in effect, and your reason for revoking it. Irs extension form 2012 Please provide your daytime telephone number (optional), in case we need to contact you. Irs extension form 2012 You, or your duly authorized representative, must sign the application and file it at least 90 days before the due date (without extensions) for filing your income tax return for the first tax year for which your election is to end. Irs extension form 2012    Send the application to: Internal Revenue Service Associate Chief Counsel Passthroughs and Special Industries CC:PSI:6 1111 Constitution Ave. Irs extension form 2012 NW, IR-5300 Washington, DC 20224 Geological and Geophysical Costs You can amortize the cost of geological and geophysical expenses paid or incurred in connection with oil and gas exploration or development within the United States. Irs extension form 2012 These costs can be amortized ratably over a 24-month period beginning on the mid-point of the tax year in which the expenses were paid or incurred. Irs extension form 2012 For major integrated oil companies (as defined in section 167(h)(5)), these costs must be amortized ratably over a 5-year period for costs paid or incurred after May 17, 2006 (a 7-year period for costs paid or incurred after December 19, 2007). Irs extension form 2012 If you retire or abandon the property during the amortization period, no amortization deduction is allowed in the year of retirement or abandonment. Irs extension form 2012 Pollution Control Facilities You can elect to amortize the cost of a certified pollution control facility over 60 months. Irs extension form 2012 However, see Atmospheric pollution control facilities for an exception. Irs extension form 2012 The cost of a pollution control facility that is not eligible for amortization can be depreciated under the regular rules for depreciation. Irs extension form 2012 Also, you can claim a special depreciation allowance on a certified pollution control facility that is qualified property even if you elect to amortize its cost. Irs extension form 2012 You must reduce its cost (amortizable basis) by the amount of any special allowance you claim. Irs extension form 2012 See chapter 3 of Publication 946. Irs extension form 2012 A certified pollution control facility is a new identifiable treatment facility used in connection with a plant or other property in operation before 1976, to reduce or control water or atmospheric pollution or contamination. Irs extension form 2012 The facility must do so by removing, changing, disposing, storing, or preventing the creation or emission of pollutants, contaminants, wastes, or heat. Irs extension form 2012 The facility must be certified by state and federal certifying authorities. Irs extension form 2012 The facility must not significantly increase the output or capacity, extend the useful life, or reduce the total operating costs of the plant or other property. Irs extension form 2012 Also, it must not significantly change the nature of the manufacturing or production process or facility. Irs extension form 2012 The federal certifying authority will not certify your property to the extent it appears you will recover (over the property's useful life) all or part of its cost from the profit based on its operation (such as through sales of recovered wastes). Irs extension form 2012 The federal certifying authority will describe the nature of the potential cost recovery. Irs extension form 2012 You must then reduce the amortizable basis of the facility by this potential recovery. Irs extension form 2012 New identifiable treatment facility. Irs extension form 2012   A new identifiable treatment facility is tangible depreciable property that is identifiable as a treatment facility. Irs extension form 2012 It does not include a building and its structural components unless the building is exclusively a treatment facility. Irs extension form 2012 Atmospheric pollution control facilities. Irs extension form 2012   Certain atmospheric pollution control facilities can be amortized over 84 months. Irs extension form 2012 To qualify, the following must apply. Irs extension form 2012 The facility must be acquired and placed in service after April 11, 2005. Irs extension form 2012 If acquired, the original use must begin with you after April 11, 2005. Irs extension form 2012 The facility must be used in connection with an electric generation plant or other property placed in operation after December 31, 1975, that is primarily coal fired. Irs extension form 2012 If you construct, reconstruct, or erect the facility, only the basis attributable to the construction, reconstruction, or erection completed after April 11, 2005, qualifies. Irs extension form 2012 Basis reduction for corporations. Irs extension form 2012   A corporation must reduce the amortizable basis of a pollution control facility by 20% before figuring the amortization deduction. Irs extension form 2012 More information. Irs extension form 2012   For more information on the amortization of pollution control facilities, see Code sections 169 and 291(c) and the related regulations. Irs extension form 2012 Research and Experimental Costs You can elect to amortize your research and experimental costs, deduct them as current business expenses, or write them off over a 10-year period (see Optional write-off method below). Irs extension form 2012 If you elect to amortize these costs, deduct them in equal amounts over 60 months or more. Irs extension form 2012 The amortization period begins the month you first receive an economic benefit from the costs. Irs extension form 2012 For a definition of “research and experimental costs” and information on deducting them as current business expenses, see chapter 7. Irs extension form 2012 Optional write-off method. Irs extension form 2012   Rather than amortize these costs or deduct them as a current expense, you have the option of deducting (writing off) research and experimental costs ratably over a 10-year period beginning with the tax year in which you incurred the costs. Irs extension form 2012 For more information, see Optional Write-off of Certain Tax Preferences , later, and section 59(e) of the Internal Revenue Code. Irs extension form 2012 Costs you can amortize. Irs extension form 2012   You can amortize costs chargeable to a capital account (see chapter 1) if you meet both of the following requirements. Irs extension form 2012 You paid or incurred the costs in your trade or business. Irs extension form 2012 You are not deducting the costs currently. Irs extension form 2012 How to make the election. Irs extension form 2012   To elect to amortize research and experimental costs, complete Part VI of Form 4562 and attach it to your income tax return. Irs extension form 2012 Generally, you must file the return by the due date (including extensions). Irs extension form 2012 However, if you timely filed your return for the year without making the election, you can still make the election by filing an amended return within 6 months of the due date of the return (excluding extensions). Irs extension form 2012 Attach Form 4562 to the amended return and write “Filed pursuant to section 301. Irs extension form 2012 9100-2” on Form 4562. Irs extension form 2012 File the amended return at the same address you filed the original return. Irs extension form 2012   Your election is binding for the year it is made and for all later years unless you obtain approval from the IRS to change to a different method. Irs extension form 2012 Optional Write-off of Certain Tax Preferences You can elect to amortize certain tax preference items over an optional period beginning in the tax year in which you incurred the costs. Irs extension form 2012 If you make this election, there is no AMT adjustment. Irs extension form 2012 The applicable costs and the optional recovery periods are as follows: Circulation costs — 3 years, Intangible drilling and development costs — 60 months, Mining exploration and development costs — 10 years, and Research and experimental costs — 10 years. Irs extension form 2012 How to make the election. Irs extension form 2012   To elect to amortize qualifying costs over the optional recovery period, complete Part VI of Form 4562 and attach a statement containing the following information to your return for the tax year in which the election begins: Your name, address, and taxpayer identification number; and The type of cost and the specific amount of the cost for which you are making the election. Irs extension form 2012   Generally, the election must be made on a timely filed return (including extensions) for the tax year in which you incurred the costs. Irs extension form 2012 However, if you timely filed your return for the year without making the election, you can still make the election by filing an amended return within 6 months of the due date of the return (excluding extensions). Irs extension form 2012 Attach Form 4562 to the amended return and write “Filed pursuant to section 301. Irs extension form 2012 9100-2” on Form 4562. Irs extension form 2012 File the amended return at the same address you filed the original return. Irs extension form 2012 Revoking the election. Irs extension form 2012   You must obtain consent from the IRS to revoke your election. Irs extension form 2012 Your request to revoke the election must be submitted to the IRS in the form of a letter ruling before the end of the tax year in which the optional recovery period ends. Irs extension form 2012 The request must contain all of the information necessary to demonstrate the rare and unusual circumstances that would justify granting revocation. Irs extension form 2012 If the request for revocation is approved, any unamortized costs are deductible in the year the revocation is effective. Irs extension form 2012 Prev  Up  Next   Home   More Online Publications