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Last Day File Taxes 2013

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Last Day File Taxes 2013

Last day file taxes 2013 11. Last day file taxes 2013   Your Rights as a Taxpayer Table of Contents Declaration of Taxpayer Rights Examinations, Appeals, Collections, and RefundsBy mail. Last day file taxes 2013 By interview. Last day file taxes 2013 Repeat examinations. Last day file taxes 2013 The first part of this chapter explains some of your most important rights as a taxpayer. Last day file taxes 2013 The second part explains the examination, appeal, collection, and refund processes. Last day file taxes 2013 Declaration of Taxpayer Rights Protection of your rights. Last day file taxes 2013   IRS employees will explain and protect your rights as a taxpayer throughout your contact with us. Last day file taxes 2013 Privacy and confidentiality. Last day file taxes 2013   The IRS will not disclose to anyone the information you give us, except as authorized by law. Last day file taxes 2013 You have the right to know why we are asking you for information, how we will use it, and what happens if you do not provide requested information. Last day file taxes 2013 Professional and courteous service. Last day file taxes 2013   If you believe that an IRS employee has not treated you in a professional, fair, and courteous manner, you should tell that employee's supervisor. Last day file taxes 2013 If the supervisor's response is not satisfactory, you should write to the IRS director for your area or the center where you file your return. Last day file taxes 2013 Representation. Last day file taxes 2013   You can either represent yourself or, with proper written authorization, have someone else represent you in your place. Last day file taxes 2013 Your representative must be a person allowed to practice before the IRS, such as an attorney, certified public accountant, or enrolled agent. Last day file taxes 2013 If you are in an interview and ask to consult such a person, then we must stop and reschedule the interview in most cases. Last day file taxes 2013   You can have someone accompany you at an interview. Last day file taxes 2013 You can make sound recordings of any meetings with our examination, appeal, or collection personnel, provided you tell us in writing 10 days before the meeting. Last day file taxes 2013 Payment of only the correct amount of tax. Last day file taxes 2013   You are responsible for paying only the correct amount of tax due under the law—no more, no less. Last day file taxes 2013 If you cannot pay all of your tax when it is due, you may be able to make monthly installment payments. Last day file taxes 2013 Help with unresolved tax problems. Last day file taxes 2013   The Taxpayer Advocate Service can help you if you have tried unsuccessfully to resolve a problem with the IRS. Last day file taxes 2013 Your local Taxpayer Advocate can offer you special help if you have a significant hardship as a result of a tax problem. Last day file taxes 2013 For more information, call toll free 1-877-777-4778 (1-800-829-4059 for TTY/TDD) or write to the Taxpayer Advocate at the IRS office that last contacted you. Last day file taxes 2013 Appeals and judicial review. Last day file taxes 2013   If you disagree with us about the amount of your tax liability or certain collection actions, you have the right to ask the Appeals Office to review your case. Last day file taxes 2013 You can also ask a court to review your case. Last day file taxes 2013 Relief from certain penalties and interest. Last day file taxes 2013   The IRS will waive penalties when allowed by law if you can show you acted reasonably and in good faith or relied on the incorrect advice of an IRS employee. Last day file taxes 2013 We will waive interest that is the result of certain errors or delays caused by an IRS employee. Last day file taxes 2013 Examinations, Appeals, Collections, and Refunds Examinations (audits). Last day file taxes 2013   We accept most taxpayers' returns as filed. Last day file taxes 2013 If we inquire about your return or select it for examination, it does not suggest that you are dishonest. Last day file taxes 2013 The inquiry or examination may or may not result in more tax. Last day file taxes 2013 We may close your case without change; or, you may receive a refund. Last day file taxes 2013   The process of selecting a return for examination usually begins in one of two ways. Last day file taxes 2013 First, we use computer programs to identify returns that may have incorrect amounts. Last day file taxes 2013 These programs may be based on information returns, such as Forms 1099 and W-2, on studies of past examinations, or on certain issues identified by compliance projects. Last day file taxes 2013 Second, we use information from outside sources that indicates that a return may have incorrect amounts. Last day file taxes 2013 These sources may include newspapers, public records, and individuals. Last day file taxes 2013 If we determine that the information is accurate and reliable, we may use it to select a return for examination. Last day file taxes 2013   Publication 556, Examination of Returns, Appeal Rights, and Claims for Refund, explains the rules and procedures that we follow in examinations. Last day file taxes 2013 The following sections give an overview of how we conduct examinations. Last day file taxes 2013 By mail. Last day file taxes 2013   We handle many examinations and inquiries by mail. Last day file taxes 2013 We will send you a letter with either a request for more information or a reason why we believe a change to your return may be needed. Last day file taxes 2013 You can respond by mail or you can request a personal interview with an examiner. Last day file taxes 2013 If you mail us the requested information or provide an explanation, we may or may not agree with you, and we will explain the reasons for any changes. Last day file taxes 2013 Please do not hesitate to write to us about anything you do not understand. Last day file taxes 2013 By interview. Last day file taxes 2013   If we notify you that we will conduct your examination through a personal interview, or you request such an interview, you have the right to ask that the examination take place at a reasonable time and place that is convenient for both you and the IRS. Last day file taxes 2013 If our examiner proposes any changes to your return, he or she will explain the reasons for the changes. Last day file taxes 2013 If you do not agree with these changes, you can meet with the examiner's supervisor. Last day file taxes 2013 Repeat examinations. Last day file taxes 2013   If we examined your return for the same items in either of the 2 previous years and proposed no change to your tax liability, please contact us as soon as possible so we can see if we should discontinue the examination. Last day file taxes 2013 Appeals. Last day file taxes 2013   If you do not agree with the examiner's proposed changes, you can appeal them to the Appeals Office of the IRS. Last day file taxes 2013 Most differences can be settled without expensive and time-consuming court trials. Last day file taxes 2013 Your appeal rights are explained in detail in both Publication 5, Your Appeal Rights and How To Prepare a Protest If You Don't Agree, and Publication 556, Examination of Returns, Appeal Rights, and Claims for Refund. Last day file taxes 2013   If you do not wish to use the Appeals Office or disagree with its findings, you may be able to take your case to the U. Last day file taxes 2013 S. Last day file taxes 2013 Tax Court, U. Last day file taxes 2013 S. Last day file taxes 2013 Court of Federal Claims, or the U. Last day file taxes 2013 S. Last day file taxes 2013 District Court where you live. Last day file taxes 2013 If you take your case to court, the IRS will have the burden of proving certain facts if you kept adequate records to show your tax liability, cooperated with the IRS, and meet certain other conditions. Last day file taxes 2013 If the court agrees with you on most issues in your case and finds that our position was largely unjustified, you may be able to recover some of your administrative and litigation costs. Last day file taxes 2013 You will not be eligible to recover these costs unless you tried to resolve your case administratively, including going through the appeals system, and you gave us the information necessary to resolve the case. Last day file taxes 2013 Collections. Last day file taxes 2013   Publication 594, The IRS Collection Process, explains your rights and responsibilities regarding payment of federal taxes. Last day file taxes 2013 It describes: What to do when you owe taxes. Last day file taxes 2013 It describes what to do if you get a tax bill and what to do if you think your bill is wrong. Last day file taxes 2013 It also covers making installment payments, delaying collection action, and submitting an offer in compromise. Last day file taxes 2013 IRS collection actions. Last day file taxes 2013 It covers liens, releasing a lien, levies, releasing a levy, seizures and sales, and release of property. Last day file taxes 2013   Your collection appeal rights are explained in detail in Publication 1660, Collection Appeal Rights. Last day file taxes 2013 Innocent spouse relief. Last day file taxes 2013   Generally, both you and your spouse are responsible, jointly and individually, for paying the full amount of any tax, interest, or penalties due on your joint return. Last day file taxes 2013 To seek relief from any liability related to your spouse (or former spouse), you must file a claim on Form 8857, Request for Innocent Spouse Relief. Last day file taxes 2013 In some cases, Form 8857 may need to be filed within 2 years of the date on which the IRS first attempted to collect the tax from you. Last day file taxes 2013 Do not file Form 8857 with your Form 1040. Last day file taxes 2013 For more information, see Publication 971, Innocent Spouse Relief, and Form 8857 or you can call the Innocent Spouse office toll-free at 1-855-851-2009. Last day file taxes 2013 Refunds. Last day file taxes 2013   You can file a claim for refund if you think you paid too much tax. Last day file taxes 2013 You must generally file the claim within 3 years from the date you filed your original return or 2 years from the date you paid the tax, whichever is later. Last day file taxes 2013 The law generally provides for interest on your refund if it is not paid within 45 days of the date you filed your return or claim for refund. Last day file taxes 2013 Publication 556, Examination of Returns, Appeal Rights, and Claims for Refund, has more information on refunds. Last day file taxes 2013   If you were due a refund but you did not file a return, you must file within 3 years from the date the return was due (including extensions) to get that refund. Last day file taxes 2013 Prev  Up  Next   Home   More Online Publications
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Contact My Local Office in Oregon

Face-to-face Tax Help

IRS Taxpayer Assistance Centers (TACs) are your source for personal tax help when you believe your tax issue can only be handled face-to-face. No appointment is necessary.

Keep in mind, many questions can be resolved online without waiting in line. Through IRS.gov you can:
• Set up a payment plan.
• Get a transcript of your tax return.
• Make a payment.
• Check on your refund.
• Find answers to many of your tax questions.

We are now referring all requests for tax return preparation services to other available resources. You can take advantage of free tax preparation through Free File, Free File Fillable Forms or through a volunteer site in your community. To find the nearest volunteer site location or to get more information about Free File, go to the top of the page and enter “Free Tax Help” in the Search box.

If you have a tax account issues and feel that it requires talking with someone face-to-face, visit your local TAC.

Caution:  Many of our offices are located in Federal Office Buildings. These buildings may not allow visitors to bring in cell phones with camera capabilities.

Multilingual assistance is available in every office. Hours of operation are subject to change.

Before visiting your local office click on "Services Provided" in the chart below to see what services are available. Services are limited and not all services are available at every TAC office and may vary from site to site. You can get these services on a walk-in basis.

City  Street Address  Days/Hours of Service  Telephone* 
Bend 

250 NW Franklin Ave.
Bend, OR  97701

Monday-Friday 8:30 a.m.- 4:30 p.m.
(Closed for lunch 12:30 p.m. - 1:30 p.m.)

 

Services Provided

(541) 706-5732
Eugene 211 E 7th           
Eugene, OR 97401

Monday-Friday 8:30 a.m.- 4:30 p.m.

 

Services Provided

(541) 342-8766
Medford 960 Ellendale Dr.
Medford, OR 97504

Monday-Friday 8:30 a.m.- 4:30 p.m.
(Closed for lunch 12:00 noon - 1:30 p.m.)

 

Services Provided

(541) 282-1350
Portland 1220 SW Third Ave.
Portland, OR  97204
 

Monday-Friday 8:30 a.m.- 4:30 p.m.

 

Services Provided

(503) 265-3501
Salem

1660 Oak St. S.E.
Salem, OR  97301

Monday-Friday 8:30 a.m.- 4:30 p.m.

 

Services Provided

(503) 587-3101

* Note: The phone numbers in the chart above are not toll-free for all locations. When you call, you will reach a recorded business message with information about office hours, locations and services provided in that office. If face-to-face assistance is not a priority for you, you may also get help with IRS letters or resolve tax account issues by phone, toll free at 1-800-829-1040 (individuals) or 1-800-829-4933 (businesses). 

For information on where to file your tax return please see Where to File Addresses

The Taxpayer Advocate Service: Call (503) 265-3591 in the Portland area or 1-877-777-4778 elsewhere, or see  Publication 1546, The Taxpayer Advocate Service of the IRS. For further information, see  Tax Topic 104.

Partnerships

IRS and organizations all over the country are partnering to assist taxpayers. Through these partnerships, organizations are also achieving their own goals. These mutually beneficial partnerships are strengthening outreach efforts and bringing education and assistance to millions.

For more information about these programs for individuals and families, contact the Stakeholder Partnerships, Education and Communication Office at:

Internal Revenue Service
100 SW Main Street, MS 0180
Portland, OR 97204

For more information about these programs for businesses, your local Stakeholder Liaison office establishes relationships with organizations representing small business and self-employed taxpayers. They provide information about the policies, practices and procedures the IRS uses to ensure compliance with the tax laws. To establish a relationship with us, use this list to find a contact in your state:

Stakeholder Liaison (SL) Phone Numbers for Organizations Representing Small Businesses and Self-employed Taxpayers.

Page Last Reviewed or Updated: 28-Mar-2014

The Last Day File Taxes 2013

Last day file taxes 2013 14. Last day file taxes 2013   Sale of Property Table of Contents Reminder Introduction Useful Items - You may want to see: Sales and TradesWhat Is a Sale or Trade? How To Figure Gain or Loss Nontaxable Trades Transfers Between Spouses Related Party Transactions Capital Gains and LossesCapital or Ordinary Gain or Loss Capital Assets and Noncapital Assets Holding Period Nonbusiness Bad Debts Wash Sales Rollover of Gain From Publicly Traded Securities Reminder Foreign income. Last day file taxes 2013  If you are a U. Last day file taxes 2013 S. Last day file taxes 2013 citizen who sells property located outside the United States, you must report all gains and losses from the sale of that property on your tax return unless it is exempt by U. Last day file taxes 2013 S. Last day file taxes 2013 law. Last day file taxes 2013 This is true whether you reside inside or outside the United States and whether or not you receive a Form 1099 from the payer. Last day file taxes 2013 Introduction This chapter discusses the tax consequences of selling or trading investment property. Last day file taxes 2013 It explains the following. Last day file taxes 2013 What a sale or trade is. Last day file taxes 2013 Figuring gain or loss. Last day file taxes 2013 Nontaxable trades. Last day file taxes 2013 Related party transactions. Last day file taxes 2013 Capital gains or losses. Last day file taxes 2013 Capital assets and noncapital assets. Last day file taxes 2013 Holding period. Last day file taxes 2013 Rollover of gain from publicly traded securities. Last day file taxes 2013 Other property transactions. Last day file taxes 2013   Certain transfers of property are not discussed here. Last day file taxes 2013 They are discussed in other IRS publications. Last day file taxes 2013 These include the following. Last day file taxes 2013 Sales of a main home, covered in chapter 15. Last day file taxes 2013 Installment sales, covered in Publication 537, Installment Sales. Last day file taxes 2013 Transactions involving business property, covered in Publication 544, Sales and Other Dispositions of Assets. Last day file taxes 2013 Dispositions of an interest in a passive activity, covered in Publication 925, Passive Activity and At-Risk Rules. Last day file taxes 2013    Publication 550, Investment Income and Expenses (Including Capital Gains and Losses), provides a more detailed discussion about sales and trades of investment property. Last day file taxes 2013 Publication 550 includes information about the rules covering nonbusiness bad debts, straddles, section 1256 contracts, puts and calls, commodity futures, short sales, and wash sales. Last day file taxes 2013 It also discusses investment-related expenses. Last day file taxes 2013 Useful Items - You may want to see: Publication 550 Investment Income and Expenses Form (and Instructions) Schedule D (Form 1040) Capital Gains and Losses 8949 Sales and Other Dispositions of Capital Assets 8824 Like-Kind Exchanges Sales and Trades If you sold property such as stocks, bonds, or certain commodities through a broker during the year, you should receive, for each sale, a Form 1099-B, Proceeds From Broker and Barter Exchange Transactions, or substitute statement, from the broker. Last day file taxes 2013 Generally, you should receive the statement by February 15 of the next year. Last day file taxes 2013 It will show the gross proceeds from the sale. Last day file taxes 2013 If you sold a covered security in 2013, your 1099-B (or substitute statement) will show your basis. Last day file taxes 2013 Generally, a covered security is a security you acquired after 2010, with certain exceptions. Last day file taxes 2013 See the Instructions for Form 8949. Last day file taxes 2013 The IRS will also get a copy of Form 1099-B from the broker. Last day file taxes 2013 Use Form 1099-B (or substitute statement received from your broker) to complete Form 8949. Last day file taxes 2013 What Is a Sale or Trade? This section explains what is a sale or trade. Last day file taxes 2013 It also explains certain transactions and events that are treated as sales or trades. Last day file taxes 2013 A sale is generally a transfer of property for money or a mortgage, note, or other promise to pay money. Last day file taxes 2013 A trade is a transfer of property for other property or services and may be taxed in the same way as a sale. Last day file taxes 2013 Sale and purchase. Last day file taxes 2013   Ordinarily, a transaction is not a trade when you voluntarily sell property for cash and immediately buy similar property to replace it. Last day file taxes 2013 The sale and purchase are two separate transactions. Last day file taxes 2013 But see Like-kind exchanges under Nontaxable Trades, later. Last day file taxes 2013 Redemption of stock. Last day file taxes 2013   A redemption of stock is treated as a sale or trade and is subject to the capital gain or loss provisions unless the redemption is a dividend or other distribution on stock. Last day file taxes 2013 Dividend versus sale or trade. Last day file taxes 2013   Whether a redemption is treated as a sale, trade, dividend, or other distribution depends on the circumstances in each case. Last day file taxes 2013 Both direct and indirect ownership of stock will be considered. Last day file taxes 2013 The redemption is treated as a sale or trade of stock if: The redemption is not essentially equivalent to a dividend (see chapter 8), There is a substantially disproportionate redemption of stock, There is a complete redemption of all the stock of the corporation owned by the shareholder, or The redemption is a distribution in partial liquidation of a corporation. Last day file taxes 2013 Redemption or retirement of bonds. Last day file taxes 2013   A redemption or retirement of bonds or notes at their maturity is generally treated as a sale or trade. Last day file taxes 2013   In addition, a significant modification of a bond is treated as a trade of the original bond for a new bond. Last day file taxes 2013 For details, see Regulations section 1. Last day file taxes 2013 1001-3. Last day file taxes 2013 Surrender of stock. Last day file taxes 2013   A surrender of stock by a dominant shareholder who retains ownership of more than half of the corporation's voting shares is treated as a contribution to capital rather than as an immediate loss deductible from taxable income. Last day file taxes 2013 The surrendering shareholder must reallocate his or her basis in the surrendered shares to the shares he or she retains. Last day file taxes 2013 Worthless securities. Last day file taxes 2013    Stocks, stock rights, and bonds (other than those held for sale by a securities dealer) that became completely worthless during the tax year are treated as though they were sold on the last day of the tax year. Last day file taxes 2013 This affects whether your capital loss is long term or short term. Last day file taxes 2013 See Holding Period , later. Last day file taxes 2013   Worthless securities also include securities that you abandon after March 12, 2008. Last day file taxes 2013 To abandon a security, you must permanently surrender and relinquish all rights in the security and receive no consideration in exchange for it. Last day file taxes 2013 All the facts and circumstances determine whether the transaction is properly characterized as an abandonment or other type of transaction, such as an actual sale or exchange, contribution to capital, dividend, or gift. Last day file taxes 2013    If you are a cash basis taxpayer and make payments on a negotiable promissory note that you issued for stock that became worthless, you can deduct these payments as losses in the years you actually make the payments. Last day file taxes 2013 Do not deduct them in the year the stock became worthless. Last day file taxes 2013 How to report loss. Last day file taxes 2013    Report worthless securities in Part I or Part II, whichever applies, of Form 8949. Last day file taxes 2013 In column (a), enter “Worthless. Last day file taxes 2013 ”    Report your worthless securities transactions on Form 8949 with the correct box checked for these transactions. Last day file taxes 2013 See Form 8949 and the Instructions for Form 8949. Last day file taxes 2013 For more information on Form 8949 and Schedule D (Form 1040), see Reporting Capital Gains and Losses in chapter 16. Last day file taxes 2013 See also Schedule D (Form 1040), Form 8949, and their separate instructions. Last day file taxes 2013 Filing a claim for refund. Last day file taxes 2013   If you do not claim a loss for a worthless security on your original return for the year it becomes worthless, you can file a claim for a credit or refund due to the loss. Last day file taxes 2013 You must use Form 1040X, Amended U. Last day file taxes 2013 S. Last day file taxes 2013 Individual Income Tax Return, to amend your return for the year the security became worthless. Last day file taxes 2013 You must file it within 7 years from the date your original return for that year had to be filed, or 2 years from the date you paid the tax, whichever is later. Last day file taxes 2013 For more information about filing a claim, see Amended Returns and Claims for Refund in chapter 1. Last day file taxes 2013 How To Figure Gain or Loss You figure gain or loss on a sale or trade of property by comparing the amount you realize with the adjusted basis of the property. Last day file taxes 2013 Gain. Last day file taxes 2013   If the amount you realize from a sale or trade is more than the adjusted basis of the property you transfer, the difference is a gain. Last day file taxes 2013 Loss. Last day file taxes 2013   If the adjusted basis of the property you transfer is more than the amount you realize, the difference is a loss. Last day file taxes 2013 Adjusted basis. Last day file taxes 2013   The adjusted basis of property is your original cost or other original basis properly adjusted (increased or decreased) for certain items. Last day file taxes 2013 See chapter 13 for more information about determining the adjusted basis of property. Last day file taxes 2013 Amount realized. Last day file taxes 2013   The amount you realize from a sale or trade of property is everything you receive for the property minus your expenses of sale (such as redemption fees, sales commissions, sales charges, or exit fees). Last day file taxes 2013 Amount realized includes the money you receive plus the fair market value of any property or services you receive. Last day file taxes 2013 If you received a note or other debt instrument for the property, see How To Figure Gain or Loss in chapter 4 of Publication 550 to figure the amount realized. Last day file taxes 2013 If you finance the buyer's purchase of your property and the debt instrument does not provide for adequate stated interest, the unstated interest that you must report as ordinary income will reduce the amount realized from the sale. Last day file taxes 2013 For more information, see Publication 537. Last day file taxes 2013 Fair market value. Last day file taxes 2013   Fair market value is the price at which the property would change hands between a buyer and a seller, neither being forced to buy or sell and both having reasonable knowledge of all the relevant facts. Last day file taxes 2013 Example. Last day file taxes 2013 You trade A Company stock with an adjusted basis of $7,000 for B Company stock with a fair market value of $10,000, which is your amount realized. Last day file taxes 2013 Your gain is $3,000 ($10,000 − $7,000). Last day file taxes 2013 Debt paid off. Last day file taxes 2013    A debt against the property, or against you, that is paid off as a part of the transaction, or that is assumed by the buyer, must be included in the amount realized. Last day file taxes 2013 This is true even if neither you nor the buyer is personally liable for the debt. Last day file taxes 2013 For example, if you sell or trade property that is subject to a nonrecourse loan, the amount you realize generally includes the full amount of the note assumed by the buyer even if the amount of the note is more than the fair market value of the property. Last day file taxes 2013 Example. Last day file taxes 2013 You sell stock that you had pledged as security for a bank loan of $8,000. Last day file taxes 2013 Your basis in the stock is $6,000. Last day file taxes 2013 The buyer pays off your bank loan and pays you $20,000 in cash. Last day file taxes 2013 The amount realized is $28,000 ($20,000 + $8,000). Last day file taxes 2013 Your gain is $22,000 ($28,000 − $6,000). Last day file taxes 2013 Payment of cash. Last day file taxes 2013   If you trade property and cash for other property, the amount you realize is the fair market value of the property you receive. Last day file taxes 2013 Determine your gain or loss by subtracting the cash you pay plus the adjusted basis of the property you trade in from the amount you realize. Last day file taxes 2013 If the result is a positive number, it is a gain. Last day file taxes 2013 If the result is a negative number, it is a loss. Last day file taxes 2013 No gain or loss. Last day file taxes 2013   You may have to use a basis for figuring gain that is different from the basis used for figuring loss. Last day file taxes 2013 In this case, you may have neither a gain nor a loss. Last day file taxes 2013 See Basis Other Than Cost in chapter 13. Last day file taxes 2013 Nontaxable Trades This section discusses trades that generally do not result in a taxable gain or deductible loss. Last day file taxes 2013 For more information on nontaxable trades, see chapter 1 of Publication 544. Last day file taxes 2013 Like-kind exchanges. Last day file taxes 2013   If you trade business or investment property for other business or investment property of a like kind, you do not pay tax on any gain or deduct any loss until you sell or dispose of the property you receive. Last day file taxes 2013 To be nontaxable, a trade must meet all six of the following conditions. Last day file taxes 2013 The property must be business or investment property. Last day file taxes 2013 You must hold both the property you trade and the property you receive for productive use in your trade or business or for investment. Last day file taxes 2013 Neither property may be property used for personal purposes, such as your home or family car. Last day file taxes 2013 The property must not be held primarily for sale. Last day file taxes 2013 The property you trade and the property you receive must not be property you sell to customers, such as merchandise. Last day file taxes 2013 The property must not be stocks, bonds, notes, choses in action, certificates of trust or beneficial interest, or other securities or evidences of indebtedness or interest, including partnership interests. Last day file taxes 2013 However, see Special rules for mutual ditch, reservoir, or irrigation company stock, in chapter 4 of Publication 550 for an exception. Last day file taxes 2013 Also, you can have a nontaxable trade of corporate stocks under a different rule, as discussed later. Last day file taxes 2013 There must be a trade of like property. Last day file taxes 2013 The trade of real estate for real estate, or personal property for similar personal property, is a trade of like property. Last day file taxes 2013 The trade of an apartment house for a store building, or a panel truck for a pickup truck, is a trade of like property. Last day file taxes 2013 The trade of a piece of machinery for a store building is not a trade of like property. Last day file taxes 2013 Real property located in the United States and real property located outside the United States are not like property. Last day file taxes 2013 Also, personal property used predominantly within the United States and personal property used predominantly outside the United States are not like property. Last day file taxes 2013 The property to be received must be identified in writing within 45 days after the date you transfer the property given up in the trade. Last day file taxes 2013 The property to be received must be received by the earlier of: The 180th day after the date on which you transfer the property given up in the trade, or The due date, including extensions, for your tax return for the year in which the transfer of the property given up occurs. Last day file taxes 2013    If you trade property with a related party in a like-kind exchange, a special rule may apply. Last day file taxes 2013 See Related Party Transactions , later in this chapter. Last day file taxes 2013 Also, see chapter 1 of Publication 544 for more information on exchanges of business property and special rules for exchanges using qualified intermediaries or involving multiple properties. Last day file taxes 2013 Partly nontaxable exchange. Last day file taxes 2013   If you receive money or unlike property in addition to like property, and the above six conditions are met, you have a partly nontaxable trade. Last day file taxes 2013 You are taxed on any gain you realize, but only up to the amount of the money and the fair market value of the unlike property you receive. Last day file taxes 2013 You cannot deduct a loss. Last day file taxes 2013 Like property and unlike property transferred. Last day file taxes 2013   If you give up unlike property in addition to the like property, you must recognize gain or loss on the unlike property you give up. Last day file taxes 2013 The gain or loss is the difference between the adjusted basis of the unlike property and its fair market value. Last day file taxes 2013 Like property and money transferred. Last day file taxes 2013   If all of the above conditions (1) – (6) are met, you have a nontaxable trade even if you pay money in addition to the like property. Last day file taxes 2013 Basis of property received. Last day file taxes 2013   To figure the basis of the property received, see Nontaxable Exchanges in chapter 13. Last day file taxes 2013 How to report. Last day file taxes 2013   You must report the trade of like property on Form 8824. Last day file taxes 2013 If you figure a recognized gain or loss on Form 8824, report it on Schedule D (Form 1040), or on Form 4797, Sales of Business Property, whichever applies. Last day file taxes 2013 See the instructions for Line 22 in the Instructions for Form 8824. Last day file taxes 2013   For information on using Form 4797, see chapter 4 of Publication 544. Last day file taxes 2013 Corporate stocks. Last day file taxes 2013   The following trades of corporate stocks generally do not result in a taxable gain or a deductible loss. Last day file taxes 2013 Corporate reorganizations. Last day file taxes 2013   In some instances, a company will give you common stock for preferred stock, preferred stock for common stock, or stock in one corporation for stock in another corporation. Last day file taxes 2013 If this is a result of a merger, recapitalization, transfer to a controlled corporation, bankruptcy, corporate division, corporate acquisition, or other corporate reorganization, you do not recognize gain or loss. Last day file taxes 2013 Stock for stock of the same corporation. Last day file taxes 2013   You can exchange common stock for common stock or preferred stock for preferred stock in the same corporation without having a recognized gain or loss. Last day file taxes 2013 This is true for a trade between two stockholders as well as a trade between a stockholder and the corporation. Last day file taxes 2013 Convertible stocks and bonds. Last day file taxes 2013   You generally will not have a recognized gain or loss if you convert bonds into stock or preferred stock into common stock of the same corporation according to a conversion privilege in the terms of the bond or the preferred stock certificate. Last day file taxes 2013 Property for stock of a controlled corporation. Last day file taxes 2013   If you transfer property to a corporation solely in exchange for stock in that corporation, and immediately after the trade you are in control of the corporation, you ordinarily will not recognize a gain or loss. Last day file taxes 2013 This rule applies both to individuals and to groups who transfer property to a corporation. Last day file taxes 2013 It does not apply if the corporation is an investment company. Last day file taxes 2013   For this purpose, to be in control of a corporation, you or your group of transferors must own, immediately after the exchange, at least 80% of the total combined voting power of all classes of stock entitled to vote and at least 80% of the outstanding shares of each class of nonvoting stock of the corporation. Last day file taxes 2013   If this provision applies to you, you may have to attach to your return a complete statement of all facts pertinent to the exchange. Last day file taxes 2013 For details, see Regulations section 1. Last day file taxes 2013 351-3. Last day file taxes 2013 Additional information. Last day file taxes 2013   For more information on trades of stock, see Nontaxable Trades in chapter 4 of Publication 550. Last day file taxes 2013 Insurance policies and annuities. Last day file taxes 2013   You will not have a recognized gain or loss if the insured or annuitant is the same under both contracts and you trade: A life insurance contract for another life insurance contract or for an endowment or annuity contract or for a qualified long-term care insurance contract, An endowment contract for another endowment contract that provides for regular payments beginning at a date no later than the beginning date under the old contract or for an annuity contract or for a qualified long-term insurance contract, An annuity contract for annuity contract or for a qualified long-term care insurance contract, or A qualified long-term care insurance contract for a qualified long-term care insurance contract. Last day file taxes 2013   You also may not have to recognize gain or loss on an exchange of a portion of an annuity contract for another annuity contract. Last day file taxes 2013 For transfers completed before October 24, 2011, see Revenue Ruling 2003-76 in Internal Revenue Bulletin 2003-33 and Revenue Procedure 2008-24 in Internal Revenue Bulletin 2008-13. Last day file taxes 2013 Revenue Ruling 2003-76 is available at www. Last day file taxes 2013 irs. Last day file taxes 2013 gov/irb/2003-33_IRB/ar11. Last day file taxes 2013 html. Last day file taxes 2013 Revenue Procedure 2008-24 is available at www. Last day file taxes 2013 irs. Last day file taxes 2013 gov/irb/2008-13_IRB/ar13. Last day file taxes 2013 html. Last day file taxes 2013 For transfers completed on or after October 24, 2011, see Revenue Ruling 2003-76, above, and Revenue Procedure 2011-38, in Internal Revenue Bulletin 2011-30. Last day file taxes 2013 Revenue Procedure 2011-38 is available at www. Last day file taxes 2013 irs. Last day file taxes 2013 gov/irb/2011-30_IRB/ar09. Last day file taxes 2013 html. Last day file taxes 2013   For tax years beginning after December 31, 2010, amounts received as an annuity for a period of 10 years or more, or for the lives of one or more individuals, under any portion of an annuity, endowment, or life insurance contract, are treated as a separate contract and are considered partial annuities. Last day file taxes 2013 A portion of an annuity, endowment, or life insurance contract may be annuitized, provided that the annuitization period is for 10 years or more or for the lives of one or more individuals. Last day file taxes 2013 The investment in the contract is allocated between the part of the contract from which amounts are received as an annuity and the part of the contract from which amounts are not received as an annuity. Last day file taxes 2013   Exchanges of contracts not included in this list, such as an annuity contract for an endowment contract, or an annuity or endowment contract for a life insurance contract, are taxable. Last day file taxes 2013 Demutualization of life insurance companies. Last day file taxes 2013   If you received stock in exchange for your equity interest as a policyholder or an annuitant, you generally will not have a recognized gain or loss. Last day file taxes 2013 See Demutualization of Life Insurance Companies in Publication 550. Last day file taxes 2013 U. Last day file taxes 2013 S. Last day file taxes 2013 Treasury notes or bonds. Last day file taxes 2013   You can trade certain issues of U. Last day file taxes 2013 S. Last day file taxes 2013 Treasury obligations for other issues designated by the Secretary of the Treasury, with no gain or loss recognized on the trade. Last day file taxes 2013 See Savings bonds traded in chapter 1 of Publication 550 for more information. Last day file taxes 2013 Transfers Between Spouses Generally, no gain or loss is recognized on a transfer of property from an individual to (or in trust for the benefit of) a spouse, or if incident to a divorce, a former spouse. Last day file taxes 2013 This nonrecognition rule does not apply in the following situations. Last day file taxes 2013 The recipient spouse or former spouse is a nonresident alien. Last day file taxes 2013 Property is transferred in trust and liability exceeds basis. Last day file taxes 2013 Gain must be recognized to the extent the amount of the liabilities assumed by the trust, plus any liabilities on the property, exceed the adjusted basis of the property. Last day file taxes 2013 For other situations, see Transfers Between Spouses in chapter 4 of Publication 550. Last day file taxes 2013 Any transfer of property to a spouse or former spouse on which gain or loss is not recognized is treated by the recipient as a gift and is not considered a sale or exchange. Last day file taxes 2013 The recipient's basis in the property will be the same as the adjusted basis of the giver immediately before the transfer. Last day file taxes 2013 This carryover basis rule applies whether the adjusted basis of the transferred property is less than, equal to, or greater than either its fair market value at the time of transfer or any consideration paid by the recipient. Last day file taxes 2013 This rule applies for purposes of determining loss as well as gain. Last day file taxes 2013 Any gain recognized on a transfer in trust increases the basis. Last day file taxes 2013 A transfer of property is incident to a divorce if the transfer occurs within 1 year after the date on which the marriage ends, or if the transfer is related to the ending of the marriage. Last day file taxes 2013 Related Party Transactions Special rules apply to the sale or trade of property between related parties. Last day file taxes 2013 Gain on sale or trade of depreciable property. Last day file taxes 2013   Your gain from the sale or trade of property to a related party may be ordinary income, rather than capital gain, if the property can be depreciated by the party receiving it. Last day file taxes 2013 See chapter 3 of Publication 544 for more information. Last day file taxes 2013 Like-kind exchanges. Last day file taxes 2013   Generally, if you trade business or investment property for other business or investment property of a like kind, no gain or loss is recognized. Last day file taxes 2013 See Like-kind exchanges , earlier, under Nontaxable Trades. Last day file taxes 2013   This rule also applies to trades of property between related parties, defined next under Losses on sales or trades of property. Last day file taxes 2013 However, if either you or the related party disposes of the like property within 2 years after the trade, you both must report any gain or loss not recognized on the original trade on your return filed for the year in which the later disposition occurs. Last day file taxes 2013 See Related Party Transactions in chapter 4 of Publication 550 for exceptions. Last day file taxes 2013 Losses on sales or trades of property. Last day file taxes 2013   You cannot deduct a loss on the sale or trade of property, other than a distribution in complete liquidation of a corporation, if the transaction is directly or indirectly between you and the following related parties. Last day file taxes 2013 Members of your family. Last day file taxes 2013 This includes only your brothers and sisters, half-brothers and half-sisters, spouse, ancestors (parents, grandparents, etc. Last day file taxes 2013 ), and lineal descendants (children, grandchildren, etc. Last day file taxes 2013 ). Last day file taxes 2013 A partnership in which you directly or indirectly own more than 50% of the capital interest or the profits interest. Last day file taxes 2013 A corporation in which you directly or indirectly own more than 50% in value of the outstanding stock. Last day file taxes 2013 (See Constructive ownership of stock , later. Last day file taxes 2013 ) A tax-exempt charitable or educational organization directly or indirectly controlled, in any manner or by any method, by you or by a member of your family, whether or not this control is legally enforceable. Last day file taxes 2013   In addition, a loss on the sale or trade of property is not deductible if the transaction is directly or indirectly between the following related parties. Last day file taxes 2013 A grantor and fiduciary, or the fiduciary and beneficiary, of any trust. Last day file taxes 2013 Fiduciaries of two different trusts, or the fiduciary and beneficiary of two different trusts, if the same person is the grantor of both trusts. Last day file taxes 2013 A trust fiduciary and a corporation of which more than 50% in value of the outstanding stock is directly or indirectly owned by or for the trust, or by or for the grantor of the trust. Last day file taxes 2013 A corporation and a partnership if the same persons own more than 50% in value of the outstanding stock of the corporation and more than 50% of the capital interest, or the profits interest, in the partnership. Last day file taxes 2013 Two S corporations if the same persons own more than 50% in value of the outstanding stock of each corporation. Last day file taxes 2013 Two corporations, one of which is an S corporation, if the same persons own more than 50% in value of the outstanding stock of each corporation. Last day file taxes 2013 An executor and a beneficiary of an estate (except in the case of a sale or trade to satisfy a pecuniary bequest). Last day file taxes 2013 Two corporations that are members of the same controlled group. Last day file taxes 2013 (Under certain conditions, however, these losses are not disallowed but must be deferred. Last day file taxes 2013 ) Two partnerships if the same persons own, directly or indirectly, more than 50% of the capital interests or the profit interests in both partnerships. Last day file taxes 2013 Multiple property sales or trades. Last day file taxes 2013   If you sell or trade to a related party a number of blocks of stock or pieces of property in a lump sum, you must figure the gain or loss separately for each block of stock or piece of property. Last day file taxes 2013 The gain on each item may be taxable. Last day file taxes 2013 However, you cannot deduct the loss on any item. Last day file taxes 2013 Also, you cannot reduce gains from the sales of any of these items by losses on the sales of any of the other items. Last day file taxes 2013 Indirect transactions. Last day file taxes 2013   You cannot deduct your loss on the sale of stock through your broker if, under a prearranged plan, a related party buys the same stock you had owned. Last day file taxes 2013 This does not apply to a trade between related parties through an exchange that is purely coincidental and is not prearranged. Last day file taxes 2013 Constructive ownership of stock. Last day file taxes 2013   In determining whether a person directly or indirectly owns any of the outstanding stock of a corporation, the following rules apply. Last day file taxes 2013 Rule 1. Last day file taxes 2013   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. Last day file taxes 2013 Rule 2. Last day file taxes 2013   An individual is considered to own the stock directly or indirectly owned by or for his or her family. Last day file taxes 2013 Family includes only brothers and sisters, half-brothers and half-sisters, spouse, ancestors, and lineal descendants. Last day file taxes 2013 Rule 3. Last day file taxes 2013   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. Last day file taxes 2013 Rule 4. Last day file taxes 2013   When applying rule 1, 2, or 3, stock constructively owned by a person under rule 1 is treated as actually owned by that person. Last day file taxes 2013 But stock constructively owned by an individual under rule 2 or rule 3 is not treated as owned by that individual for again applying either rule 2 or rule 3 to make another person the constructive owner of the stock. Last day file taxes 2013 Property received from a related party. Last day file taxes 2013    If you sell or trade at a gain property you acquired from a related party, you recognize the gain only to the extent it is more than the loss previously disallowed to the related party. Last day file taxes 2013 This rule applies only if you are the original transferee and you acquired the property by purchase or exchange. Last day file taxes 2013 This rule does not apply if the related party's loss was disallowed because of the wash sale rules described in chapter 4 of Publication 550 under Wash Sales. Last day file taxes 2013   If you sell or trade at a loss property you acquired from a related party, you cannot recognize the loss that was not allowed to the related party. Last day file taxes 2013 Example 1. Last day file taxes 2013 Your brother sells you stock for $7,600. Last day file taxes 2013 His cost basis is $10,000. Last day file taxes 2013 Your brother cannot deduct the loss of $2,400. Last day file taxes 2013 Later, you sell the same stock to an unrelated party for $10,500, realizing a gain of $2,900. Last day file taxes 2013 Your reportable gain is $500 (the $2,900 gain minus the $2,400 loss not allowed to your brother). Last day file taxes 2013 Example 2. Last day file taxes 2013 If, in Example 1, you sold the stock for $6,900 instead of $10,500, your recognized loss is only $700 (your $7,600 basis minus $6,900). Last day file taxes 2013 You cannot deduct the loss that was not allowed to your brother. Last day file taxes 2013 Capital Gains and Losses This section discusses the tax treatment of gains and losses from different types of investment transactions. Last day file taxes 2013 Character of gain or loss. Last day file taxes 2013   You need to classify your gains and losses as either ordinary or capital gains or losses. Last day file taxes 2013 You then need to classify your capital gains and losses as either short term or long term. Last day file taxes 2013 If you have long-term gains and losses, you must identify your 28% rate gains and losses. Last day file taxes 2013 If you have a net capital gain, you must also identify any unrecaptured section 1250 gain. Last day file taxes 2013   The correct classification and identification helps you figure the limit on capital losses and the correct tax on capital gains. Last day file taxes 2013 Reporting capital gains and losses is explained in chapter 16. Last day file taxes 2013 Capital or Ordinary Gain or Loss If you have a taxable gain or a deductible loss from a transaction, it may be either a capital gain or loss or an ordinary gain or loss, depending on the circumstances. Last day file taxes 2013 Generally, a sale or trade of a capital asset (defined next) results in a capital gain or loss. Last day file taxes 2013 A sale or trade of a noncapital asset generally results in ordinary gain or loss. Last day file taxes 2013 Depending on the circumstances, a gain or loss on a sale or trade of property used in a trade or business may be treated as either capital or ordinary, as explained in Publication 544. Last day file taxes 2013 In some situations, part of your gain or loss may be a capital gain or loss and part may be an ordinary gain or loss. Last day file taxes 2013 Capital Assets and Noncapital Assets For the most part, everything you own and use for personal purposes, pleasure, or investment is a capital asset. Last day file taxes 2013 Some examples are: Stocks or bonds held in your personal account, A house owned and used by you and your family, Household furnishings, A car used for pleasure or commuting, Coin or stamp collections, Gems and jewelry, and Gold, silver, or any other metal. Last day file taxes 2013 Any property you own is a capital asset, except the following noncapital assets. Last day file taxes 2013 Property held mainly for sale to customers or property that will physically become a part of the merchandise for sale to customers. Last day file taxes 2013 For an exception, see Capital Asset Treatment for Self-Created Musical Works , later. Last day file taxes 2013 Depreciable property used in your trade or business, even if fully depreciated. Last day file taxes 2013 Real property used in your trade or business. Last day file taxes 2013 A copyright, a literary, musical, or artistic composition, a letter or memorandum, or similar property that is: Created by your personal efforts, Prepared or produced for you (in the case of a letter, memorandum, or similar property), or Acquired under circumstances (for example, by gift) entitling you to the basis of the person who created the property or for whom it was prepared or produced. Last day file taxes 2013 For an exception to this rule, see Capital Asset Treatment for Self-Created Musical Works , later. Last day file taxes 2013 Accounts or notes receivable acquired in the ordinary course of a trade or business for services rendered or from the sale of property described in (1). Last day file taxes 2013 U. Last day file taxes 2013 S. Last day file taxes 2013 Government publications that you received from the government free or for less than the normal sales price, or that you acquired under circumstances entitling you to the basis of someone who received the publications free or for less than the normal sales price. Last day file taxes 2013 Certain commodities derivative financial instruments held by commodities derivatives dealers. Last day file taxes 2013 Hedging transactions, but only if the transaction is clearly identified as a hedging transaction before the close of the day on which it was acquired, originated, or entered into. Last day file taxes 2013 Supplies of a type you regularly use or consume in the ordinary course of your trade or business. Last day file taxes 2013 Investment Property Investment property is a capital asset. Last day file taxes 2013 Any gain or loss from its sale or trade is generally a capital gain or loss. Last day file taxes 2013 Gold, silver, stamps, coins, gems, etc. Last day file taxes 2013   These are capital assets except when they are held for sale by a dealer. Last day file taxes 2013 Any gain or loss you have from their sale or trade generally is a capital gain or loss. Last day file taxes 2013 Stocks, stock rights, and bonds. Last day file taxes 2013   All of these (including stock received as a dividend) are capital assets except when held for sale by a securities dealer. Last day file taxes 2013 However, if you own small business stock, see Losses on Section 1244 (Small Business) Stock , later, and Losses on Small Business Investment Company Stock, in chapter 4 of Publication 550. Last day file taxes 2013 Personal Use Property Property held for personal use only, rather than for investment, is a capital asset, and you must report a gain from its sale as a capital gain. Last day file taxes 2013 However, you cannot deduct a loss from selling personal use property. Last day file taxes 2013 Capital Asset Treatment for Self-Created Musical Works You can elect to treat musical compositions and copyrights in musical works as capital assets when you sell or exchange them if: Your personal efforts created the property, or You acquired the property under circumstances (for example, by gift) entitling you to the basis of the person who created the property or for whom it was prepared or produced. Last day file taxes 2013 You must make a separate election for each musical composition (or copyright in a musical work) sold or exchanged during the tax year. Last day file taxes 2013 You must make the election on or before the due date (including extensions) of the income tax return for the tax year of the sale or exchange. Last day file taxes 2013 You must make the election on Form 8949 by treating the sale or exchange as the sale or exchange of a capital asset, according to Form 8949, Schedule D (Form 1040), and their separate instructions. Last day file taxes 2013 For more information on Form 8949 and Schedule D (Form 1040), see Reporting Capital Gains and Losses in chapter 16. Last day file taxes 2013 See also Schedule D (Form 1040), Form 8949, and their separate instructions. Last day file taxes 2013 You can revoke the election if you have IRS approval. Last day file taxes 2013 To get IRS approval, you must submit a request for a letter ruling under the appropriate IRS revenue procedure. Last day file taxes 2013 See, for example, Rev. Last day file taxes 2013 Proc. Last day file taxes 2013 2013-1, corrected by Announcement 2013–9, and amplified and modified by Rev. Last day file taxes 2013 Proc. Last day file taxes 2013 2013–32, available at www. Last day file taxes 2013 irs. Last day file taxes 2013 gov/irb/2013-01_IRB/ar06. Last day file taxes 2013 html. Last day file taxes 2013 Alternatively, you are granted an automatic 6-month extension from the due date of your income tax return (excluding extensions) to revoke the election, provided you timely file your income tax return, and within this 6-month extension period, you file Form 1040X that treats the sale or exchange as the sale or exchange of property that is not a capital asset. Last day file taxes 2013 Discounted Debt Instruments Treat your gain or loss on the sale, redemption, or retirement of a bond or other debt instrument originally issued at a discount or bought at a discount as capital gain or loss, except as explained in the following discussions. Last day file taxes 2013 Short-term government obligations. Last day file taxes 2013   Treat gains on short-term federal, state, or local government obligations (other than tax-exempt obligations) as ordinary income up to your ratable share of the acquisition discount. Last day file taxes 2013 This treatment applies to obligations with a fixed maturity date not more than 1 year from the date of issue. Last day file taxes 2013 Acquisition discount is the stated redemption price at maturity minus your basis in the obligation. Last day file taxes 2013   However, do not treat these gains as income to the extent you previously included the discount in income. Last day file taxes 2013 See Discount on Short-Term Obligations in chapter 1 of Publication 550. Last day file taxes 2013 Short-term nongovernment obligations. Last day file taxes 2013   Treat gains on short-term nongovernment obligations as ordinary income up to your ratable share of original issue discount (OID). Last day file taxes 2013 This treatment applies to obligations with a fixed maturity date of not more than 1 year from the date of issue. Last day file taxes 2013   However, to the extent you previously included the discount in income, you do not have to include it in income again. Last day file taxes 2013 See Discount on Short-Term Obligations in chapter 1 of Publication 550. Last day file taxes 2013 Tax-exempt state and local government bonds. Last day file taxes 2013   If these bonds were originally issued at a discount before September 4, 1982, or you acquired them before March 2, 1984, treat your part of OID as tax-exempt interest. Last day file taxes 2013 To figure your gain or loss on the sale or trade of these bonds, reduce the amount realized by your part of OID. Last day file taxes 2013   If the bonds were issued after September 3, 1982, and acquired after March 1, 1984, increase the adjusted basis by your part of OID to figure gain or loss. Last day file taxes 2013 For more information on the basis of these bonds, see Discounted Debt Instruments in chapter 4 of Publication 550. Last day file taxes 2013   Any gain from market discount is usually taxable on disposition or redemption of tax-exempt bonds. Last day file taxes 2013 If you bought the bonds before May 1, 1993, the gain from market discount is capital gain. Last day file taxes 2013 If you bought the bonds after April 30, 1993, the gain is ordinary income. Last day file taxes 2013   You figure the market discount by subtracting the price you paid for the bond from the sum of the original issue price of the bond and the amount of accumulated OID from the date of issue that represented interest to any earlier holders. Last day file taxes 2013 For more information, see Market Discount Bonds in chapter 1 of Publication 550. Last day file taxes 2013    A loss on the sale or other disposition of a tax-exempt state or local government bond is deductible as a capital loss. Last day file taxes 2013 Redeemed before maturity. Last day file taxes 2013   If a state or local bond issued before June 9, 1980, is redeemed before it matures, the OID is not taxable to you. Last day file taxes 2013   If a state or local bond issued after June 8, 1980, is redeemed before it matures, the part of OID earned while you hold the bond is not taxable to you. Last day file taxes 2013 However, you must report the unearned part of OID as a capital gain. Last day file taxes 2013 Example. Last day file taxes 2013 On July 2, 2002, the date of issue, you bought a 20-year, 6% municipal bond for $800. Last day file taxes 2013 The face amount of the bond was $1,000. Last day file taxes 2013 The $200 discount was OID. Last day file taxes 2013 At the time the bond was issued, the issuer had no intention of redeeming it before it matured. Last day file taxes 2013 The bond was callable at its face amount beginning 10 years after the issue date. Last day file taxes 2013 The issuer redeemed the bond at the end of 11 years (July 2, 2013) for its face amount of $1,000 plus accrued annual interest of $60. Last day file taxes 2013 The OID earned during the time you held the bond, $73, is not taxable. Last day file taxes 2013 The $60 accrued annual interest also is not taxable. Last day file taxes 2013 However, you must report the unearned part of OID ($127) as a capital gain. Last day file taxes 2013 Long-term debt instruments issued after 1954 and before May 28, 1969 (or before July 2, 1982, if a government instrument). Last day file taxes 2013   If you sell, trade, or redeem for a gain one of these debt instruments, the part of your gain that is not more than your ratable share of the OID at the time of the sale or redemption is ordinary income. Last day file taxes 2013 The rest of the gain is capital gain. Last day file taxes 2013 If, however, there was an intention to call the debt instrument before maturity, all of your gain that is not more than the entire OID is treated as ordinary income at the time of the sale. Last day file taxes 2013 This treatment of taxable gain also applies to corporate instruments issued after May 27, 1969, under a written commitment that was binding on May 27, 1969, and at all times thereafter. Last day file taxes 2013 Long-term debt instruments issued after May 27, 1969 (or after July 1, 1982, if a government instrument). Last day file taxes 2013   If you hold one of these debt instruments, you must include a part of OID in your gross income each year you own the instrument. Last day file taxes 2013 Your basis in that debt instrument is increased by the amount of OID that you have included in your gross income. Last day file taxes 2013 See Original Issue Discount (OID) in chapter 7 for information about OID that you must report on your tax return. Last day file taxes 2013   If you sell or trade the debt instrument before maturity, your gain is a capital gain. Last day file taxes 2013 However, if at the time the instrument was originally issued there was an intention to call it before its maturity, your gain generally is ordinary income to the extent of the entire OID reduced by any amounts of OID previously includible in your income. Last day file taxes 2013 In this case, the rest of the gain is capital gain. Last day file taxes 2013 Market discount bonds. Last day file taxes 2013   If the debt instrument has market discount and you chose to include the discount in income as it accrued, increase your basis in the debt instrument by the accrued discount to figure capital gain or loss on its disposition. Last day file taxes 2013 If you did not choose to include the discount in income as it accrued, you must report gain as ordinary interest income up to the instrument's accrued market discount. Last day file taxes 2013 The rest of the gain is capital gain. Last day file taxes 2013 See Market Discount Bonds in chapter 1 of Publication 550. Last day file taxes 2013   A different rule applies to market discount bonds issued before July 19, 1984, and purchased by you before May 1, 1993. Last day file taxes 2013 See Market discount bonds under Discounted Debt Instruments in chapter 4 of Publication 550. Last day file taxes 2013 Retirement of debt instrument. Last day file taxes 2013   Any amount you receive on the retirement of a debt instrument is treated in the same way as if you had sold or traded that instrument. Last day file taxes 2013 Notes of individuals. Last day file taxes 2013   If you hold an obligation of an individual issued with OID after March 1, 1984, you generally must include the OID in your income currently, and your gain or loss on its sale or retirement is generally capital gain or loss. Last day file taxes 2013 An exception to this treatment applies if the obligation is a loan between individuals and all the following requirements are met. Last day file taxes 2013 The lender is not in the business of lending money. Last day file taxes 2013 The amount of the loan, plus the amount of any outstanding prior loans, is $10,000 or less. Last day file taxes 2013 Avoiding federal tax is not one of the principal purposes of the loan. Last day file taxes 2013   If the exception applies, or the obligation was issued before March 2, 1984, you do not include the OID in your income currently. Last day file taxes 2013 When you sell or redeem the obligation, the part of your gain that is not more than your accrued share of OID at that time is ordinary income. Last day file taxes 2013 The rest of the gain, if any, is capital gain. Last day file taxes 2013 Any loss on the sale or redemption is capital loss. Last day file taxes 2013 Deposit in Insolvent or Bankrupt Financial Institution If you lose money you have on deposit in a bank, credit union, or other financial institution that becomes insolvent or bankrupt, you may be able to deduct your loss in one of three ways. Last day file taxes 2013 Ordinary loss. Last day file taxes 2013 Casualty loss. Last day file taxes 2013 Nonbusiness bad debt (short-term capital loss). Last day file taxes 2013  For more information, see Deposit in Insolvent or Bankrupt Financial Institution, in chapter 4 of Publication 550. Last day file taxes 2013 Sale of Annuity The part of any gain on the sale of an annuity contract before its maturity date that is based on interest accumulated on the contract is ordinary income. Last day file taxes 2013 Losses on Section 1244 (Small Business) Stock You can deduct as an ordinary loss, rather than as a capital loss, your loss on the sale, trade, or worthlessness of section 1244 stock. Last day file taxes 2013 Report the loss on Form 4797, line 10. Last day file taxes 2013 Any gain on section 1244 stock is a capital gain if the stock is a capital asset in your hands. Last day file taxes 2013 Report the gain on Form 8949. Last day file taxes 2013 See Losses on Section 1244 (Small Business) Stock in chapter 4 of Publication 550. Last day file taxes 2013 For more information on Form 8949 and Schedule D (Form 1040), see Reporting Capital Gains and Losses in chapter 16. Last day file taxes 2013 See also Schedule D (Form 1040), Form 8949, and their separate instructions. Last day file taxes 2013 Holding Period If you sold or traded investment property, you must determine your holding period for the property. Last day file taxes 2013 Your holding period determines whether any capital gain or loss was a short-term or long-term capital gain or loss. Last day file taxes 2013 Long-term or short-term. Last day file taxes 2013   If you hold investment property more than 1 year, any capital gain or loss is a long-term capital gain or loss. Last day file taxes 2013 If you hold the property 1 year or less, any capital gain or loss is a short-term capital gain or loss. Last day file taxes 2013   To determine how long you held the investment property, begin counting on the date after the day you acquired the property. Last day file taxes 2013 The day you disposed of the property is part of your holding period. Last day file taxes 2013 Example. Last day file taxes 2013 If you bought investment property on February 6, 2012, and sold it on February 6, 2013, your holding period is not more than 1 year and you have a short-term capital gain or loss. Last day file taxes 2013 If you sold it on February 7, 2013, your holding period is more than 1 year and you will have a long-term capital gain or loss. Last day file taxes 2013 Securities traded on established market. Last day file taxes 2013   For securities traded on an established securities market, your holding period begins the day after the trade date you bought the securities, and ends on the trade date you sold them. Last day file taxes 2013    Do not confuse the trade date with the settlement date, which is the date by which the stock must be delivered and payment must be made. Last day file taxes 2013 Example. Last day file taxes 2013 You are a cash method, calendar year taxpayer. Last day file taxes 2013 You sold stock at a gain on December 30, 2013. Last day file taxes 2013 According to the rules of the stock exchange, the sale was closed by delivery of the stock 4 trading days after the sale, on January 6, 2014. Last day file taxes 2013 You received payment of the sales price on that same day. Last day file taxes 2013 Report your gain on your 2013 return, even though you received the payment in 2014. Last day file taxes 2013 The gain is long term or short term depending on whether you held the stock more than 1 year. Last day file taxes 2013 Your holding period ended on December 30. Last day file taxes 2013 If you had sold the stock at a loss, you would also report it on your 2013 return. Last day file taxes 2013 U. Last day file taxes 2013 S. Last day file taxes 2013 Treasury notes and bonds. Last day file taxes 2013   The holding period of U. Last day file taxes 2013 S. Last day file taxes 2013 Treasury notes and bonds sold at auction on the basis of yield starts the day after the Secretary of the Treasury, through news releases, gives notification of acceptance to successful bidders. Last day file taxes 2013 The holding period of U. Last day file taxes 2013 S. Last day file taxes 2013 Treasury notes and bonds sold through an offering on a subscription basis at a specified yield starts the day after the subscription is submitted. Last day file taxes 2013 Automatic investment service. Last day file taxes 2013   In determining your holding period for shares bought by the bank or other agent, full shares are considered bought first and any fractional shares are considered bought last. Last day file taxes 2013 Your holding period starts on the day after the bank's purchase date. Last day file taxes 2013 If a share was bought over more than one purchase date, your holding period for that share is a split holding period. Last day file taxes 2013 A part of the share is considered to have been bought on each date that stock was bought by the bank with the proceeds of available funds. Last day file taxes 2013 Nontaxable trades. Last day file taxes 2013   If you acquire investment property in a trade for other investment property and your basis for the new property is determined, in whole or in part, by your basis in the old property, your holding period for the new property begins on the day following the date you acquired the old property. Last day file taxes 2013 Property received as a gift. Last day file taxes 2013   If you receive a gift of property and your basis is determined by the donor's adjusted basis, your holding period is considered to have started on the same day the donor's holding period started. Last day file taxes 2013   If your basis is determined by the fair market value of the property, your holding period starts on the day after the date of the gift. Last day file taxes 2013 Inherited property. Last day file taxes 2013   Generally, if you inherited investment property, your capital gain or loss on any later disposition of that property is long-term capital gain or loss. Last day file taxes 2013 This is true regardless of how long you actually held the property. Last day file taxes 2013 However, if you inherited property from someone who died in 2010, see the information below. Last day file taxes 2013 Inherited property from someone who died in 2010. Last day file taxes 2013   If you inherit investment property from a decedent who died in 2010, and the executor of the decedent's estate made the election to file Form 8939, refer to the information provided by the executor or see Publication 4895, Tax Treatment of Property Acquired From a Decedent Dying in 2010, to determine your holding period. Last day file taxes 2013 Real property bought. Last day file taxes 2013   To figure how long you have held real property bought under an unconditional contract, begin counting on the day after you received title to it or on the day after you took possession of it and assumed the burdens and privileges of ownership, whichever happened first. Last day file taxes 2013 However, taking delivery or possession of real property under an option agreement is not enough to start the holding period. Last day file taxes 2013 The holding period cannot start until there is an actual contract of sale. Last day file taxes 2013 The holding period of the seller cannot end before that time. Last day file taxes 2013 Real property repossessed. Last day file taxes 2013   If you sell real property but keep a security interest in it, and then later repossess the property under the terms of the sales contract, your holding period for a later sale includes the period you held the property before the original sale and the period after the repossession. Last day file taxes 2013 Your holding period does not include the time between the original sale and the repossession. Last day file taxes 2013 That is, it does not include the period during which the first buyer held the property. Last day file taxes 2013 Stock dividends. Last day file taxes 2013   The holding period for stock you received as a taxable stock dividend begins on the date of distribution. Last day file taxes 2013   The holding period for new stock you received as a nontaxable stock dividend begins on the same day as the holding period of the old stock. Last day file taxes 2013 This rule also applies to stock acquired in a “spin-off,” which is a distribution of stock or securities in a controlled corporation. Last day file taxes 2013 Nontaxable stock rights. Last day file taxes 2013   Your holding period for nontaxable stock rights begins on the same day as the holding period of the underlying stock. Last day file taxes 2013 The holding period for stock acquired through the exercise of stock rights begins on the date the right was exercised. Last day file taxes 2013 Nonbusiness Bad Debts If someone owes you money that you cannot collect, you have a bad debt. Last day file taxes 2013 You may be able to deduct the amount owed to you when you figure your tax for the year the debt becomes worthless. Last day file taxes 2013 Generally, nonbusiness bad debts are bad debts that did not come from operating your trade or business, and are deductible as short-term capital losses. Last day file taxes 2013 To be deductible, nonbusiness bad debts must be totally worthless. Last day file taxes 2013 You cannot deduct a partly worthless nonbusiness debt. Last day file taxes 2013 Genuine debt required. Last day file taxes 2013   A debt must be genuine for you to deduct a loss. Last day file taxes 2013 A debt is genuine if it arises from a debtor-creditor relationship based on a valid and enforceable obligation to repay a fixed or determinable sum of money. Last day file taxes 2013 Basis in bad debt required. Last day file taxes 2013    To deduct a bad debt, you must have a basis in it—that is, you must have already included the amount in your income or loaned out your cash. Last day file taxes 2013 For example, you cannot claim a bad debt deduction for court-ordered child support not paid to you by your former spouse. Last day file taxes 2013 If you are a cash method taxpayer (as most individuals are), you generally cannot take a bad debt deduction for unpaid salaries, wages, rents, fees, interest, dividends, and similar items. Last day file taxes 2013 When deductible. Last day file taxes 2013   You can take a bad debt deduction only in the year the debt becomes worthless. Last day file taxes 2013 You do not have to wait until a debt is due to determine whether it is worthless. Last day file taxes 2013 A debt becomes worthless when there is no longer any chance that the amount owed will be paid. Last day file taxes 2013   It is not necessary to go to court if you can show that a judgment from the court would be uncollectible. Last day file taxes 2013 You must only show that you have taken reasonable steps to collect the debt. Last day file taxes 2013 Bankruptcy of your debtor is generally good evidence of the worthlessness of at least a part of an unsecured and unpreferred debt. Last day file taxes 2013 How to report bad debts. Last day file taxes 2013    Deduct nonbusiness bad debts as short-term capital losses on Form 8949. Last day file taxes 2013    Make sure you report your bad debt(s) (and any other short-term transactions for which you did not receive a Form 1099-B) on Form 8949, Part I, with box C checked. Last day file taxes 2013    For more information on Form 8949 and Schedule D (Form 1040), see Reporting Capital Gains and Losses in chapter 16. Last day file taxes 2013 See also Schedule D (Form 1040), Form 8949, and their separate instructions. Last day file taxes 2013   For each bad debt, attach a statement to your return that contains: A description of the debt, including the amount, and the date it became due, The name of the debtor, and any business or family relationship between you and the debtor, The efforts you made to collect the debt, and Why you decided the debt was worthless. Last day file taxes 2013 For example, you could show that the borrower has declared bankruptcy, or that legal action to collect would probably not result in payment of any part of the debt. Last day file taxes 2013 Filing a claim for refund. Last day file taxes 2013    If you do not deduct a bad debt on your original return for the year it becomes worthless, you can file a claim for a credit or refund due to the bad debt. Last day file taxes 2013 To do this, use Form 1040X to amend your return for the year the debt became worthless. Last day file taxes 2013 You must file it within 7 years from the date your original return for that year had to be filed, or 2 years from the date you paid the tax, whichever is later. Last day file taxes 2013 For more information about filing a claim, see Amended Returns and Claims for Refund in chapter 1. Last day file taxes 2013 Additional information. Last day file taxes 2013   For more information, see Nonbusiness Bad Debts in Publication 550. Last day file taxes 2013 For information on business bad debts, see chapter 10 of Publication 535, Business Expenses. Last day file taxes 2013 Wash Sales You cannot deduct losses from sales or trades of stock or securities in a wash sale. Last day file taxes 2013 A wash sale occurs when you sell or trade stock or securities at a loss and within 30 days before or after the sale you: Buy substantially identical stock or securities, Acquire substantially identical stock or securities in a fully taxable trade, Acquire a contract or option to buy substantially identical stock or securities, or Acquire substantially identical stock for your individual retirement account (IRA) or Roth IRA. Last day file taxes 2013 If your loss was disallowed because of the wash sale rules, add the disallowed loss to the cost of the new stock or securities (except in (4) above). Last day file taxes 2013 The result is your basis in the new stock or securities. Last day file taxes 2013 This adjustment postpones the loss deduction until the disposition of the new stock or securities. Last day file taxes 2013 Your holding period for the new stock or securities includes the holding period of the stock or securities sold. Last day file taxes 2013 For more information, see Wash Sales, in chapter 4 of Publication 550. Last day file taxes 2013 Rollover of Gain From Publicly Traded Securities You may qualify for a tax-free rollover of certain gains from the sale of publicly traded securities. Last day file taxes 2013 This means that if you buy certain replacement property and make the choice described in this section, you postpone part or all of your gain. Last day file taxes 2013 You postpone the gain by adjusting the basis of the replacement property as described in Basis of replacement property , later. Last day file taxes 2013 This postpones your gain until the year you dispose of the replacement property. Last day file taxes 2013 You qualify to make this choice if you meet all the following tests. Last day file taxes 2013 You sell publicly traded securities at a gain. Last day file taxes 2013 Publicly traded securities are securities traded on an established securities market. Last day file taxes 2013 Your gain from the sale is a capital gain. Last day file taxes 2013 During the 60-day period beginning on the date of the sale, you buy replacement property. Last day file taxes 2013 This replacement property must be either common stock of, or a partnership interest in a specialized small business investment company (SSBIC). Last day file taxes 2013 This is any partnership or corporation licensed by the Small Business Administration under section 301(d) of the Small Business Investment Act of 1958, as in effect on May 13, 1993. Last day file taxes 2013 Amount of gain recognized. Last day file taxes 2013   If you make the choice described in this section, you must recognize gain only up to the following amount. Last day file taxes 2013 The amount realized on the sale, minus The cost of any common stock or partnership interest in an SSBIC that you bought during the 60-day period beginning on the date of sale (and did not previously take into account on an earlier sale of publicly traded securities). Last day file taxes 2013  If this amount is less than the amount of your gain, you can postpone the rest of your gain, subject to the limit described next. Last day file taxes 2013 If this amount is equal to or more than the amount of your gain, you must recognize the full amount of your gain. Last day file taxes 2013 Limit on gain postponed. Last day file taxes 2013   The amount of gain you can postpone each year is limited to the smaller of: $50,000 ($25,000 if you are married and file a separate return), or $500,000 ($250,000 if you are married and file a separate return), minus the amount of gain you postponed for all earlier years. Last day file taxes 2013 Basis of replacement property. Last day file taxes 2013   You must subtract the amount of postponed gain from the basis of your replacement property. Last day file taxes 2013 How to report and postpone gain. Last day file taxes 2013    See How to report and postpone gain under Rollover of Gain From Publicly Traded Securities in chapter 4 of Publication 550 for details. Last day file taxes 2013 Prev  Up  Next   Home   More Online Publications