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Military Tax Deductions 2011

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Military Tax Deductions 2011

Military tax deductions 2011 Index A Abusive tax shelters (see Tax shelters) Accounting fees, Attorney or accounting fees. Military tax deductions 2011 Accrual method, Accrual method taxpayers. Military tax deductions 2011 , Accrual method. Military tax deductions 2011 , Holders must use accrual method. Military tax deductions 2011 , When To Deduct Investment Interest Accuracy-related penalty, Accuracy-related penalty. Military tax deductions 2011 Acquisition discount, Government obligations. Military tax deductions 2011 , Acquisition discount on short-term obligations. Military tax deductions 2011 Adjusted basis, Basis adjustment. Military tax deductions 2011 , Fair market value equal to or more than donor's adjusted basis. Military tax deductions 2011 , Adjusted Basis, Short sales. Military tax deductions 2011 Alaska Permanent Fund dividends, Alaska Permanent Fund dividends. Military tax deductions 2011 , Child's Alaska Permanent Fund dividends. Military tax deductions 2011 Amortization of bond premium, Bond Premium Amortization, Bonds acquired after October 22, 1986, but before 1988. Military tax deductions 2011 Annuities Borrowing on, Borrowing on insurance. Military tax deductions 2011 Interest on, Interest on annuity contract. Military tax deductions 2011 Life insurance proceeds used to buy, Annuity. Military tax deductions 2011 Sale of, Sale of Annuity Single-premium, Single-premium life insurance, endowment, and annuity contracts. Military tax deductions 2011 Trade for, Trade of investment property for an annuity. Military tax deductions 2011 , Insurance Policies and Annuities Applicable federal rate, Applicable federal rate. Military tax deductions 2011 Appreciated financial positions, Constructive Sales of Appreciated Financial Positions Arbitrage bonds, Arbitrage bonds. Military tax deductions 2011 Assistance (see Tax help) At-risk rules, At-risk rules. Military tax deductions 2011 , At-risk rules. Military tax deductions 2011 Attorneys' fees, Attorney or accounting fees. Military tax deductions 2011 Automatic investment service, Automatic investment service and dividend reinvestment plans. Military tax deductions 2011 , Automatic investment service. Military tax deductions 2011 , Automatic investment service. Military tax deductions 2011 Average basis, Average Basis Double-category method, Transition rule from double-category method. Military tax deductions 2011 Illustrated, Average basis method illustrated. Military tax deductions 2011 B Backup withholding, Backup withholding. Military tax deductions 2011 Bad debts, Nonbusiness bad debt. Military tax deductions 2011 , Nonbusiness Bad Debts Bankrupt financial institutions Deposit in, Deposit in Insolvent or Bankrupt Financial Institution Bargain purchases, Bargain purchases. Military tax deductions 2011 Basis, Basis of Investment Property, U. Military tax deductions 2011 S. Military tax deductions 2011 Treasury Notes or Bonds Adjusted, Basis adjustment. Military tax deductions 2011 , Fair market value equal to or more than donor's adjusted basis. Military tax deductions 2011 , Adjusted Basis, Short sales. Military tax deductions 2011 Average, Average Basis Cost, Cost Basis, Cost Basis Inherited property, Property Received as Inheritance Investment property, Basis of Investment Property Like-kind exchanges, Basis of property received. Military tax deductions 2011 Other than cost, Basis Other Than Cost REITs, Shares in a mutual fund or REIT. Military tax deductions 2011 REMIC, residual interest, Basis in the residual interest. Military tax deductions 2011 Replacement stock, Basis of replacement stock. Military tax deductions 2011 Shares acquired by reinvestment, Reinvestment right. Military tax deductions 2011 Stocks and bonds, Basis adjustment. Military tax deductions 2011 , Basis. Military tax deductions 2011 , Basis. Military tax deductions 2011 , Stocks and Bonds Bearer obligations, Bearer CDs. Military tax deductions 2011 , Bearer Obligations Below-market loans, Below-Market Loans Bonds Accrued interest on, Accrued interest on bonds. Military tax deductions 2011 Amortization of premium, Bond Premium Amortization Arbitrage, Arbitrage bonds. Military tax deductions 2011 Basis, Basis. Military tax deductions 2011 , Stocks and Bonds Capital asset, Stocks, stock rights, and bonds. Military tax deductions 2011 Convertible, Convertible stocks and bonds. Military tax deductions 2011 Coupon, Coupon bonds. Military tax deductions 2011 Enterprise zone facility, Enterprise zone facility bonds. Military tax deductions 2011 Federally guaranteed, Federally guaranteed bonds. Military tax deductions 2011 Identification, Identifying stock or bonds sold. Military tax deductions 2011 Market discount, Market discount. Military tax deductions 2011 , Limit on interest deduction for market discount bonds. Military tax deductions 2011 , Market discount on bonds. Military tax deductions 2011 , Market discount bonds. Military tax deductions 2011 , Market discount bonds. Military tax deductions 2011 New York Liberty bonds, New York Liberty bonds. Military tax deductions 2011 Par value, Bonds purchased at par value. Military tax deductions 2011 Premiums on, Bond premium. Military tax deductions 2011 , Premiums on bonds. Military tax deductions 2011 Private activity, Private activity bonds. Military tax deductions 2011 Redemption or retirement of, Redemption or retirement of bonds. Military tax deductions 2011 Sold between interest dates, Bonds Sold Between Interest Dates State and local government, Tax-exempt state and local government bonds. Military tax deductions 2011 Stripped, Stripped bonds or coupons. Military tax deductions 2011 , Stripped Bonds and Coupons, Stripped tax-exempt obligation. Military tax deductions 2011 Tax credit bonds, Tax credit bonds. Military tax deductions 2011 Tax-exempt, Tax-exempt state and local government bonds. Military tax deductions 2011 Traded flat, Bonds traded flat. Military tax deductions 2011 U. Military tax deductions 2011 S. Military tax deductions 2011 savings (see U. Military tax deductions 2011 S. Military tax deductions 2011 savings bonds) U. Military tax deductions 2011 S. Military tax deductions 2011 Treasury (see U. Military tax deductions 2011 S. Military tax deductions 2011 Treasury bills, notes, and bonds) Brokerage fees, Fees to buy or sell. Military tax deductions 2011 , Sale expenses. Military tax deductions 2011 C Calls and puts, Puts and Calls Table 4-3, Table 4-3. Military tax deductions 2011 Puts and Calls Capital assets, Capital Assets and Noncapital Assets Capital gain distributions, Capital Gain Distributions, Basis adjustment. Military tax deductions 2011 , Capital gain distributions. Military tax deductions 2011 , Child's capital gain distributions. Military tax deductions 2011 , Capital gain distributions received. Military tax deductions 2011 Capital gains and losses, Capital Gains and Losses, Loss on stock that paid qualified dividends. Military tax deductions 2011 Constructive ownership transactions, Gains From Certain Constructive Ownership Transactions Definition, Capital or Ordinary Gain or Loss Empowerment zone assets, Exclusion of Gain From DC Zone Assets Investment property, Investment property. Military tax deductions 2011 Long-term, Short-Term or Long-Term Capital Gain or Loss, Long-term gains and losses. Military tax deductions 2011 Long-term debt instruments, Long-term debt instruments issued after 1954 and before May 28, 1969 (or before July 2, 1982, if a government instrument). Military tax deductions 2011 Losses, limit on, Limit on deduction. Military tax deductions 2011 Passive activities, Passive activity gains and losses. Military tax deductions 2011 Qualified covered call options, Capital loss on qualified covered call options. Military tax deductions 2011 Qualified small business stock, Gains on Qualified Small Business Stock Reporting requirements, How To Report Gains and Losses (Form 6781), How to report gain. Military tax deductions 2011 Rollover of gain from sale of securities, Rollover of Gain From Publicly Traded Securities Short-term, Short-Term or Long-Term Capital Gain or Loss, Short-term gains and losses. Military tax deductions 2011 Tax rates, Capital Gain Tax Rates, Table 4-4. Military tax deductions 2011 What Is Your Maximum Capital Gain Rate? Table 4-4, Table 4-4. Military tax deductions 2011 What Is Your Maximum Capital Gain Rate? Capital loss carryover, Capital loss carryover. Military tax deductions 2011 , Capital Losses Worksheet 4-1, Worksheet 4-1. Military tax deductions 2011 Capital Loss Carryover Worksheet Cash method, Cash method taxpayers. Military tax deductions 2011 , Cash method. Military tax deductions 2011 , When To Deduct Investment Interest Reporting options for savings bond interest, Reporting options for cash method taxpayers. Military tax deductions 2011 Cash-settled options, Cash-settled options. Military tax deductions 2011 Casualty losses, Ordinary loss or casualty loss. Military tax deductions 2011 CDOs (Collateralized debt obligations), Collateralized Debt Obligations (CDOs) Certificates of deposit (CDs), Certificates of Deposit (CDs) Children Alaska Permanent Fund dividends, Child's Alaska Permanent Fund dividends. Military tax deductions 2011 Capital gain distributions, Child's capital gain distributions. Military tax deductions 2011 Custodian account for, Custodian account for your child. Military tax deductions 2011 Gifts to, Income from property given to a child. Military tax deductions 2011 Investment income of, Tax on unearned income of certain children. Military tax deductions 2011 , Investment income of child reported on parent's return. Military tax deductions 2011 Qualified dividends, Child's qualified dividends. Military tax deductions 2011 Savings account with parent as trustee, Savings account with parent as trustee. Military tax deductions 2011 U. Military tax deductions 2011 S. Military tax deductions 2011 savings bond owner, Child as only owner. Military tax deductions 2011 Clerical help, Clerical help and office rent. Military tax deductions 2011 Co-owners of U. Military tax deductions 2011 S. Military tax deductions 2011 savings bonds, Co-owners. Military tax deductions 2011 Collateralized debt obligations (CDOs), Collateralized Debt Obligations (CDOs) Collectibles, Collectibles gain or loss. Military tax deductions 2011 Commissions, Commissions and load charges. Military tax deductions 2011 Commodity futures, Commodity Futures, Commodity futures. Military tax deductions 2011 Community property U. Military tax deductions 2011 S. Military tax deductions 2011 savings bonds, Community property. Military tax deductions 2011 Constructive ownership transactions, Constructive ownership of stock. Military tax deductions 2011 , Gains From Certain Constructive Ownership Transactions Constructive receipt, Constructive receipt. Military tax deductions 2011 Constructive sales, Constructive Sales of Appreciated Financial Positions Contractors, insolvency of, Insolvency of contractor. Military tax deductions 2011 Conversion transactions, Conversion Transactions Convertible stocks and bonds, Convertible stocks and bonds. Military tax deductions 2011 Cooperatives, sales of stock to, Sales of Stock to ESOPs or Certain Cooperatives Corporate distributions, Dividends and Other Distributions Capital gain, Capital gain distributions. Military tax deductions 2011 , Child's capital gain distributions. Military tax deductions 2011 , Capital gain distributions received. Military tax deductions 2011 Constructive, Constructive distributions. Military tax deductions 2011 Dividends (see Dividends) Fractional shares, Fractional shares. Military tax deductions 2011 Liquidating, Liquidating Distributions, Liquidating distributions. Military tax deductions 2011 Nondividend, Nondividend Distributions, Nondividend distributions. Military tax deductions 2011 Return of capital, Basis adjustment. Military tax deductions 2011 Stock rights, Distributions of Stock and Stock Rights Undistributed capital gains, Undistributed capital gains of mutual funds and REITs. Military tax deductions 2011 Corporate reorganizations, Corporate reorganizations. Military tax deductions 2011 Cost basis, Cost Basis, Cost Basis Coupon bonds, Coupon bonds. Military tax deductions 2011 D Day traders, Special Rules for Traders in Securities Dealer equity options, Dealer equity option. Military tax deductions 2011 Dealer securities futures contracts, Dealer securities futures contract. Military tax deductions 2011 Debt instruments, retirement of, Retirement of debt instrument. Military tax deductions 2011 Decedents, Appreciated property you gave the decedent. Military tax deductions 2011 , Decedent's capital loss. Military tax deductions 2011 U. Military tax deductions 2011 S. Military tax deductions 2011 savings bond interest, reporting of, Decedents. Military tax deductions 2011 Demutualization, Demutualization of Life Insurance Companies Deposits, loss on, Deposit in Insolvent or Bankrupt Financial Institution Discount on debt instruments, Discount on Debt Instruments Certificates of deposit, Certificates of Deposit (CDs) Election to report all interest as OID, Election To Report All Interest as OID Face-amount certificates, Face-Amount Certificates Gain or loss treatment, Discounted Debt Instruments Inflation-indexed, Inflation-Indexed Debt Instruments Market discount bonds (see Market discount bonds) Original issue discount (see Original issue discount (OID)) Short-term obligations, Discount on Short-Term Obligations, Short-term government obligations. Military tax deductions 2011 Stripped bonds and coupons, Stripped Bonds and Coupons Discounted debt instruments, Discount on Debt Instruments Discounted tax-exempt obligations, Discounted tax-exempt obligations. Military tax deductions 2011 Dividends, Dividends and Other Distributions, Form 1099-DIV. Military tax deductions 2011 (see also Form 1099-DIV) Alaska Permanent Fund, Alaska Permanent Fund dividends. Military tax deductions 2011 , Child's Alaska Permanent Fund dividends. Military tax deductions 2011 Exempt-interest, Exempt-interest dividends. Military tax deductions 2011 , Exempt-interest dividends. Military tax deductions 2011 , Exempt-interest dividends on mutual fund stock. Military tax deductions 2011 Extraordinary, Extraordinary dividends. Military tax deductions 2011 Holding period, Holding period. Military tax deductions 2011 Insurance policies, Dividends on insurance policies. Military tax deductions 2011 Money market funds, Money Market Funds Nominees, Nominees. Military tax deductions 2011 , Nominees. Military tax deductions 2011 Ordinary, Ordinary Dividends Patronage, Patronage dividends. Military tax deductions 2011 Payments in lieu of, Payments in lieu of dividends. Military tax deductions 2011 Qualified, Qualified Dividends, Qualified dividends. Military tax deductions 2011 , Child's qualified dividends. Military tax deductions 2011 Qualified foreign corporation, Qualified foreign corporation. Military tax deductions 2011 Received in January, Dividends received in January. Military tax deductions 2011 Reinvestment of, Reinvested distributions. Military tax deductions 2011 Reinvestment plans, Dividends Used To Buy More Stock, Automatic investment service and dividend reinvestment plans. Military tax deductions 2011 , Dividend reinvestment plans. Military tax deductions 2011 Reporting requirements, Form 1099-DIV. Military tax deductions 2011 , How To Report Dividend Income, Stripped Preferred Stock Restricted stock, Dividends received on restricted stock. Military tax deductions 2011 Sale or trade vs. Military tax deductions 2011 , Dividend versus sale or trade. Military tax deductions 2011 Scrip, Scrip dividends. Military tax deductions 2011 Sold stock, Dividends on stock sold. Military tax deductions 2011 Stock, Stock dividends. Military tax deductions 2011 , Stock dividends. Military tax deductions 2011 Underreported, Underreported interest and dividends. Military tax deductions 2011 Veterans' insurance, Interest on VA dividends. Military tax deductions 2011 , Dividends on veterans' insurance. Military tax deductions 2011 Divorce, Property Received From Your Spouse, Transfers Between Spouses E Education Savings Bond Program, Education Savings Bond Program Interest excluded under, Interest excluded under the Education Savings Bond Program. Military tax deductions 2011 Recordkeeping requirements, Education Savings Bond Program Employee stock options, Reminders Employee stock ownership plans (ESOPs), sales of stock to, Sales of Stock to ESOPs or Certain Cooperatives Employer identification numbers (EINs), Identifying number. Military tax deductions 2011 Empowerment zone, Exclusion of Gain From DC Zone Assets Endowment contracts, Single-premium life insurance, endowment, and annuity contracts. Military tax deductions 2011 Enterprise zone facility bonds, Enterprise zone facility bonds. Military tax deductions 2011 Equity option, Equity option. Military tax deductions 2011 Estate income received by beneficiary, Beneficiary of an estate or trust. Military tax deductions 2011 Exchanges of mutual fund shares, Exchange of Shares In One Mutual Fund For Shares In Another Mutual Fund Exclusion of gain DC zone assets, Exclusion of Gain From DC Zone Assets Exempt-interest dividends on mutual fund stock, Exempt-interest dividends on mutual fund stock. Military tax deductions 2011 Expenses of producing income, Expenses of Producing Income F Face-amount certificates, Face-Amount Certificates Fair market value, Fair market value. Military tax deductions 2011 , Fair market value less than donor's adjusted basis. Military tax deductions 2011 , Fair market value. Military tax deductions 2011 Federal guarantee on bonds, Federally guaranteed bonds. Military tax deductions 2011 Fees to buy or sell, Fees to buy or sell. Military tax deductions 2011 Financial asset securitization investment trusts (FASITs), FASITs First-in first-out (FIFO), First-in first-out (FIFO). Military tax deductions 2011 Foreign currency transactions, Foreign currency contract. Military tax deductions 2011 Foreign income, Reminders Form 1040, Form 1040. Military tax deductions 2011 , Form 1040A or Form 1040. Military tax deductions 2011 Form 1040, Schedule B, Schedule B (Form 1040A or 1040). Military tax deductions 2011 Form 1040, Schedule D, How to report gain. Military tax deductions 2011 Form 1040A, Form 1040A. Military tax deductions 2011 Form 1040X, Filing a claim for refund. Military tax deductions 2011 Form 1041, Filing requirement. Military tax deductions 2011 Form 1065, Filing requirement. Military tax deductions 2011 Schedule K-1, Schedule K-1 (Form 1065). Military tax deductions 2011 Form 1066, Schedule Q, Schedule Q (Form 1066). Military tax deductions 2011 , Investment expenses from pass-through entities. Military tax deductions 2011 Form 1096, File Form 1099-INT with the IRS. Military tax deductions 2011 , File Form 1099-DIV with the IRS. Military tax deductions 2011 , File Form 1099-B or Form 1099-S with the IRS. Military tax deductions 2011 Form 1099-B, Form 1099-B. Military tax deductions 2011 , Form 1099-B transactions. Military tax deductions 2011 , File Form 1099-B or Form 1099-S with the IRS. Military tax deductions 2011 Form 1099-CAP, Form 1099-CAP transactions. Military tax deductions 2011 Form 1099-DIV, General Information, Form 1099-DIV. Military tax deductions 2011 , Form 1099-DIV. Military tax deductions 2011 , File Form 1099-DIV with the IRS. Military tax deductions 2011 Form 1099-INT, General Information, Form 1099-INT. Military tax deductions 2011 , Form 1099-INT for U. Military tax deductions 2011 S. Military tax deductions 2011 savings bond interest. Military tax deductions 2011 , Form 1099-INT. Military tax deductions 2011 , File Form 1099-INT with the IRS. Military tax deductions 2011 , Forms 1099-INT and 1099-OID. Military tax deductions 2011 , Forms 1099-INT and 1099-OID. Military tax deductions 2011 Form 1099-MISC, Form 1099-MISC. Military tax deductions 2011 , Reporting Substitute Payments Form 1099-OID, Form 1099-OID. Military tax deductions 2011 , Form 1099-OID, Form 1099-OID. Military tax deductions 2011 , Forms 1099-INT and 1099-OID. Military tax deductions 2011 , Forms 1099-INT and 1099-OID. Military tax deductions 2011 Form 1099-S, Form 1099-S transactions. Military tax deductions 2011 , File Form 1099-B or Form 1099-S with the IRS. Military tax deductions 2011 Form 1120, Filing requirement. Military tax deductions 2011 Form 2439, Undistributed capital gains of mutual funds and REITs. Military tax deductions 2011 Form 3115, Change from method 2. Military tax deductions 2011 , Choosing To Amortize, How To Make the Mark-to-Market Election Form 4684, Ordinary loss or casualty loss. Military tax deductions 2011 Form 4797, How to report. Military tax deductions 2011 , Losses on Section 1244 (Small Business) Stock, How to report. Military tax deductions 2011 Form 4952, Form 4952 Form 6198, At-risk rules. Military tax deductions 2011 Form 6781, Form 6781. Military tax deductions 2011 , How to report. Military tax deductions 2011 , How To Report Gains and Losses (Form 6781), Section 1256 contracts and straddles. Military tax deductions 2011 Form 8275, Negligence or disregard of rules or regulations. Military tax deductions 2011 Form 8275-R, Negligence or disregard of rules or regulations. Military tax deductions 2011 Form 8582, Form 8582. Military tax deductions 2011 Form 8615, Tax on unearned income of certain children. Military tax deductions 2011 Form 8815, Form 8815. Military tax deductions 2011 , Figuring the interest part of the proceeds (Form 8815, line 6). Military tax deductions 2011 , Interest excluded under the Education Savings Bond Program. Military tax deductions 2011 Form 8824, How to report. Military tax deductions 2011 Form 8832, Clubs formed before 1997. Military tax deductions 2011 Form 8886, Reportable Transaction Disclosure Statement, Negligence or disregard of rules or regulations. Military tax deductions 2011 Form 8949 Bad debts, How to report bad debts. Military tax deductions 2011 Basis adjustment, Basis adjustment. Military tax deductions 2011 Capital Gains, Reporting Capital Gains and Losses Capital Losses, Reporting Capital Gains and Losses Cooperative, sale to certain, Sales of Stock to ESOPs or Certain Cooperatives Copyrights in musical works, Capital asset treatment for self-created musical works. Military tax deductions 2011 Employee stock ownership plan, sale to, Sales of Stock to ESOPs or Certain Cooperatives Empowerment Zone Assets, Exclusion of Gain From DC Zone Assets Exempt-interest dividends, Exempt-interest dividends on mutual fund stock. Military tax deductions 2011 Form 1099-B, Form 1099-B. Military tax deductions 2011 , Form 1099-B transactions. Military tax deductions 2011 Form 1099-CAP, Form 1099-CAP transactions. Military tax deductions 2011 Form 1099-S, Form 1099-S transactions. Military tax deductions 2011 Fractional shares, Fractional shares. Military tax deductions 2011 Gain, qualified small business stock, How to report gain. Military tax deductions 2011 How to fill in, generally, Reporting Capital Gains and Losses Long-term gains and losses, Long-term gains and losses. Military tax deductions 2011 Marked-to-market election, Mark-to-market election made. Military tax deductions 2011 Market discount bonds, Market discount bonds. Military tax deductions 2011 , Market discount bonds. Military tax deductions 2011 Musical compositions, Capital asset treatment for self-created musical works. Military tax deductions 2011 Nominees, Nominees. Military tax deductions 2011 Nonbusiness bad debt, Nonbusiness bad debt. Military tax deductions 2011 Nondividend distributions, Nondividend distributions. Military tax deductions 2011 Option, How to report. Military tax deductions 2011 Property bought at various times, Sale of property bought at various times. Military tax deductions 2011 Rollover, publicly traded securities, Rollover of Gain From Publicly Traded Securities Rollover, qualified small business stock, How to report gain. Military tax deductions 2011 Sale expenses, Sale expenses. Military tax deductions 2011 Short-term gains and losses, Short-term gains and losses. Military tax deductions 2011 Software, Stocks and Bonds Worthless securities, How to report loss. Military tax deductions 2011 Form SS-4, Identifying number. Military tax deductions 2011 Form W-8BEN, Nonresident aliens. Military tax deductions 2011 Form W-9, Certification. Military tax deductions 2011 Fractional shares, Fractional shares. Military tax deductions 2011 , Automatic investment service. Military tax deductions 2011 Free tax services, Free help with your tax return. Military tax deductions 2011 Frozen deposits, Interest income on frozen deposits. Military tax deductions 2011 , Frozen deposits. Military tax deductions 2011 Futures contracts Regulated, Regulated futures contract. Military tax deductions 2011 Securities, Securities futures contract. Military tax deductions 2011 , Securities futures contract to sell. Military tax deductions 2011 , Securities Futures Contracts Futures, commodity, Commodity Futures, Commodity futures. Military tax deductions 2011 Wash sales, Options and futures contracts. Military tax deductions 2011 G Gains on qualified small business stock, Gains on Qualified Small Business Stock Gains on sales or trades, How To Figure Gain or Loss, Gain on Sale or Trade of Depreciable Property, Property received from a related party. Military tax deductions 2011 (see also Capital gains and losses) Gifts, What's New, Income from property given to a child. Military tax deductions 2011 , Property Received as a Gift, Property received as a gift. Military tax deductions 2011 Gifts of shares, Shares received as gift. Military tax deductions 2011 Government obligations, Government obligations. Military tax deductions 2011 H Hedging transactions, Hedging exception. Military tax deductions 2011 , Hedging Transactions, Hedging transaction. Military tax deductions 2011 Help (see Tax help) Holding period Investment property, Holding Period Replacement stock, Holding period of replacement stock. Military tax deductions 2011 Shares acquired by reinvestment, Reinvested distributions. Military tax deductions 2011 Straddles, Holding Period and Loss Treatment Rules I Income from sources outside U. Military tax deductions 2011 S. Military tax deductions 2011 , Reminders Income tax treaties (Table 1-3), Qualified Dividends Indian tribal government, Indian tribal government. Military tax deductions 2011 Individual retirement arrangements (IRAs) Interest income, Individual retirement arrangements (IRAs). Military tax deductions 2011 Inflation-indexed debt instruments, Inflation-Indexed Debt Instruments, Stripped inflation-indexed debt instruments. Military tax deductions 2011 Inherited property Basis, Property Received as Inheritance Holding period, Inherited property. Military tax deductions 2011 Transfer by inheritance, Transfer by inheritance. Military tax deductions 2011 Insolvency of contractors, Insolvency of contractor. Military tax deductions 2011 Installment sales, Installment sales. Military tax deductions 2011 Insurance Borrowing on, Borrowing on insurance. Military tax deductions 2011 Dividends, interest on, Interest on insurance dividends. Military tax deductions 2011 , Dividends on insurance policies. Military tax deductions 2011 Interest option on, Interest option on insurance. Military tax deductions 2011 Life insurance companies, demutualization, Demutualization of Life Insurance Companies Life, paid to beneficiary, Insurance Prepaid premiums, Prepaid insurance premiums. Military tax deductions 2011 Single-premium life, Single-premium life insurance, endowment, and annuity contracts. Military tax deductions 2011 Trades, Insurance Policies and Annuities Veterans' dividends, interest on, Interest on VA dividends. Military tax deductions 2011 , Dividends on veterans' insurance. Military tax deductions 2011 Interest expenses Allocation of, Allocation of Interest Expense Investment interest, Investment Interest Limit on, Limit on interest deduction for market discount bonds. Military tax deductions 2011 , Limit on Deduction When to deduct, When To Deduct Investment Interest Margin accounts, Interest on margin accounts. Military tax deductions 2011 Paid in advance, Interest paid in advance. Military tax deductions 2011 Straddles, Interest expense and carrying charges on straddles. Military tax deductions 2011 Interest income, Interest Income Annuity contracts, Interest on annuity contract. Military tax deductions 2011 Bonds traded flat, Bonds traded flat. Military tax deductions 2011 Certificates of deposits, Certificates of deposit and other deferred interest accounts. Military tax deductions 2011 Condemnation awards, Interest on condemnation award. Military tax deductions 2011 Deferred interest accounts, Certificates of deposit and other deferred interest accounts. Military tax deductions 2011 Dividends on deposit or share accounts, Dividends that are actually interest. Military tax deductions 2011 Frozen deposits, Interest income on frozen deposits. Military tax deductions 2011 , Frozen deposits. Military tax deductions 2011 Gift for opening account, Gift for opening account. Military tax deductions 2011 Individual retirement arrangements (IRAs), Individual retirement arrangements (IRAs). Military tax deductions 2011 Installment sale payments, Installment sale payments. Military tax deductions 2011 Insurance dividends, Interest on insurance dividends. Military tax deductions 2011 Money market funds, Money market funds. Military tax deductions 2011 Nominee distributions, Nominees. Military tax deductions 2011 Prepaid insurance premiums, Prepaid insurance premiums. Military tax deductions 2011 Reporting, When To Report Interest Income, Penalty on early withdrawal of savings. Military tax deductions 2011 Seller-financed mortgage, Form 1040A. Military tax deductions 2011 , Interest on seller-financed mortgage. Military tax deductions 2011 Tax refunds, Interest on tax refunds. Military tax deductions 2011 Tax-exempt, Tax-Exempt Interest, Reporting tax-exempt interest. Military tax deductions 2011 Taxable, Taxable Interest — General, Bonds traded flat. Military tax deductions 2011 , Taxation of interest. Military tax deductions 2011 , Taxable Interest U. Military tax deductions 2011 S. Military tax deductions 2011 savings bonds, person responsible for tax (Table 1-2), Table 1-2. Military tax deductions 2011 Who Pays the Tax on U. Military tax deductions 2011 S. Military tax deductions 2011 Savings Bond Interest Underreported, Underreported interest and dividends. Military tax deductions 2011 Unstated, Unstated interest. Military tax deductions 2011 Usurious interest, Usurious interest. Military tax deductions 2011 VA insurance dividends, Interest on VA dividends. Military tax deductions 2011 Investment clubs, Investment Clubs, Filing requirement. Military tax deductions 2011 Investment counsel and advice, Investment counsel and advice. Military tax deductions 2011 Investment expenses, Investment Expenses Allocated, Allocated investment expenses. Military tax deductions 2011 At-risk rules, At-risk rules. Military tax deductions 2011 Deductible, Expenses of Producing Income Interest, Investment interest deducted. Military tax deductions 2011 Limits on deductions, Limits on Deductions Nondeductible, Nondeductible Expenses Pass-through entities, Investment expenses from pass-through entities. Military tax deductions 2011 Reporting requirements, How To Report Investment Expenses Investment income, Investment Income Children, Tax on unearned income of certain children. Military tax deductions 2011 , Investment income of child reported on parent's return. Military tax deductions 2011 General Information, General Information Net income, Net Investment Income Records to keep, General Information Reporting of (Table 1-1), Table 1-1. Military tax deductions 2011 Where To Report Common Types of Investment Income Investment property, Investment property. Military tax deductions 2011 Basis, Basis of Investment Property Definition, Investment property. Military tax deductions 2011 Gain or loss treatment, Investment property. Military tax deductions 2011 Gift, received as, Property Received as a Gift Holding period, Holding Period Liquidation, received in, Investment property received in liquidation. Military tax deductions 2011 Nontaxable trades, received in, Property Received in Nontaxable Trades Sales and trades, Sales and Trades of Investment Property Services, received for, Property Received for Services Spouse, received from, Property Received From Your Spouse Taxable trades, received in, Property Received in Taxable Trades J Joint accounts, Joint accounts. Military tax deductions 2011 Joint and separate returns, Joint return. Military tax deductions 2011 , Joint and separate returns. Military tax deductions 2011 L Life insurance companies demutualization, Demutualization of Life Insurance Companies Like-kind exchanges, Like-Kind Exchanges, Like-Kind Exchanges Basis of property received, Basis of property received. Military tax deductions 2011 Reporting requirements, How to report. Military tax deductions 2011 Liquidating distributions, Liquidating Distributions, Investment property received in liquidation. Military tax deductions 2011 Listed options, Listed option. Military tax deductions 2011 Load charges, Commissions and load charges. Military tax deductions 2011 Loans Below-market, Below-Market Loans, Effective dates. Military tax deductions 2011 Gift and demand, Gift and demand loans. Military tax deductions 2011 Guarantees, Loan guarantees. Military tax deductions 2011 Term, Term loans. Military tax deductions 2011 Local government obligations (see State or local government obligations) Long-term capital gains and losses, Short-Term or Long-Term Capital Gain or Loss, Long-term gains and losses. Military tax deductions 2011 Long-term debt instruments, Long-term debt instruments issued after 1954 and before May 28, 1969 (or before July 2, 1982, if a government instrument). Military tax deductions 2011 Losses on sales or trades, Property received from a related party. Military tax deductions 2011 (see also Capital gains and losses) Amount calculation, How To Figure Gain or Loss Carryback election, Loss carryback election. Military tax deductions 2011 , Loss carryback election. Military tax deductions 2011 Mutual fund or REIT stock held 6 months or less, Loss on mutual fund or REIT stock held 6 months or less. Military tax deductions 2011 Passive activities, Passive activity losses. Military tax deductions 2011 , Passive activity losses. Military tax deductions 2011 , Passive activity losses and credits. Military tax deductions 2011 , Losses from passive activities. Military tax deductions 2011 Related parties, Losses on Sales or Trades of Property Section 1244 (small business) stock, Losses on Section 1244 (Small Business) Stock Small business investment company stock, Losses on Small Business Investment Company Stock Wash sales, Coordination of Loss Deferral Rules and Wash Sale Rules M Mark-to-market election, Mark-to-market election made. Military tax deductions 2011 Marked-to-market rules, Marked-to-Market Rules, Mark-to-market election made. Military tax deductions 2011 Market discount bonds, Market discount. Military tax deductions 2011 , Market Discount Bonds, Partial principal payments. Military tax deductions 2011 , Limit on interest deduction for market discount bonds. Military tax deductions 2011 , Market discount on bonds. Military tax deductions 2011 , Market discount bonds. Military tax deductions 2011 , Market discount bonds. Military tax deductions 2011 Accrued market discount, Accrued market discount. Military tax deductions 2011 Maximum rate of capital gains (Table 4-4), Table 4-4. Military tax deductions 2011 What Is Your Maximum Capital Gain Rate? Mechanics' and suppliers' liens, Mechanics' and suppliers' liens. Military tax deductions 2011 Meetings, expenses of attending, Stockholders' meetings. Military tax deductions 2011 Missing children, photographs of, Reminders Mixed straddles, Mixed straddles. Military tax deductions 2011 , Mixed straddles. Military tax deductions 2011 Money market funds, Money Market Funds Interest income, Money market funds. Military tax deductions 2011 Mortgages Revenue bonds, Mortgage revenue bonds. Military tax deductions 2011 Secondary liability on home, Secondary liability on home mortgage. Military tax deductions 2011 Seller-financed, Interest on seller-financed mortgage. Military tax deductions 2011 Municipal bonds, State or Local Government Obligations, Reporting tax-exempt interest. Military tax deductions 2011 , Tax-exempt state and local government bonds. Military tax deductions 2011 (see also State or local government obligations) Mutual funds, Capital Gain Distributions, Other income (nonpassive income). Military tax deductions 2011 , Choosing to include net capital gain. Military tax deductions 2011 , Including mutual fund or REMIC expenses in income. Military tax deductions 2011 , Shares in a mutual fund or REIT. Military tax deductions 2011 , Special Rules for Mutual Funds, Loss on mutual fund or REIT stock held 6 months or less. Military tax deductions 2011 Individual retirement arrangements (IRAs), Qualified retirement plans and IRAs. Military tax deductions 2011 publicly offered, Publicly-offered mutual funds. Military tax deductions 2011 N Net Investment Income Tax, What's New, Net investment income tax (NIIT). Military tax deductions 2011 New York Liberty bonds, New York Liberty bonds. Military tax deductions 2011 NIIT, What's New, Net investment income tax (NIIT). Military tax deductions 2011 Nominee distributions Dividends, Nominees. Military tax deductions 2011 , Nominees. Military tax deductions 2011 Interest income, Nominees. Military tax deductions 2011 , Nominee distributions. Military tax deductions 2011 Original issue discount, Nominee. Military tax deductions 2011 Nonbusiness bad debts, Nonbusiness bad debt. Military tax deductions 2011 , Nonbusiness Bad Debts Noncapital assets, Capital Assets and Noncapital Assets Nondeductible investment expenses, Nondeductible Expenses Nondividend distributions, Nondividend Distributions Nonequity options, Nonequity option. Military tax deductions 2011 Nonqualified preferred stock, Nonqualified preferred stock. Military tax deductions 2011 Nonresident aliens Backup withholding, Nonresident aliens. Military tax deductions 2011 Nontaxable return of capital, Basis adjustment. Military tax deductions 2011 Nontaxable stock rights, Nontaxable stock rights. Military tax deductions 2011 Nontaxable trades, Nontaxable Trades, Nontaxable trades. Military tax deductions 2011 Notes Individuals, bought at discount, Notes of individuals. Military tax deductions 2011 U. Military tax deductions 2011 S. Military tax deductions 2011 Treasury (see U. Military tax deductions 2011 S. Military tax deductions 2011 Treasury bills, notes, and bonds) O Office expenses, Clerical help and office rent. Military tax deductions 2011 Options, Options Calls and puts, Puts and Calls Cash settlement, Cash-settled options. Military tax deductions 2011 , Cash settlement option. Military tax deductions 2011 Dealer equity, Dealer equity option. Military tax deductions 2011 Deep-in-the-money, Qualified covered call options and optioned stock. Military tax deductions 2011 Employee stock, Reminders Equity, Equity option. Military tax deductions 2011 Gain or loss, Options, Qualified covered call options and optioned stock. Military tax deductions 2011 Holding period, Option exercised. Military tax deductions 2011 Listed, Listed option. Military tax deductions 2011 Nonequity, Nonequity option. Military tax deductions 2011 Qualified covered call, Qualified covered call options and optioned stock. Military tax deductions 2011 Reporting requirements, How to report. Military tax deductions 2011 Section 1256 contracts, Section 1256 Contracts Marked to Market, Section 1256 contract options. Military tax deductions 2011 Wash sales, Options and futures contracts. Military tax deductions 2011 Ordinary gains and losses, Capital or Ordinary Gain or Loss, Ordinary loss or casualty loss. Military tax deductions 2011 Original issue discount (OID), Original issue discount. Military tax deductions 2011 , Original Issue Discount (OID), Stripped tax-exempt obligations. Military tax deductions 2011 , Original issue discount (OID) on debt instruments. Military tax deductions 2011 Adjustment to, Original issue discount (OID) adjustment. Military tax deductions 2011 Reporting requirements, Exceptions to reporting OID. Military tax deductions 2011 , Form 1099-OID Rules, Applying the OID Rules P Pass-through entities Rollover of gain, Pass-through entity. Military tax deductions 2011 Passive activities Gains and losses, Passive activity losses. Military tax deductions 2011 , Passive activity losses. Military tax deductions 2011 , Passive activity losses and credits. Military tax deductions 2011 , Losses from passive activities. Military tax deductions 2011 , Passive activity gains and losses. Military tax deductions 2011 Patronage dividends, Patronage dividends. Military tax deductions 2011 Penalties Accuracy-related, Accuracy-related penalty. Military tax deductions 2011 , Accuracy-related penalties. Military tax deductions 2011 Backup withholding, Penalties. Military tax deductions 2011 Civil fraud, Civil fraud penalty. Military tax deductions 2011 Early withdrawal, Interest subject to penalty for early withdrawal. Military tax deductions 2011 , Penalty on early withdrawal of savings. Military tax deductions 2011 Failure to pay tax, Failure to pay tax. Military tax deductions 2011 Failure to supply SSN, Penalty for failure to supply SSN. Military tax deductions 2011 Substantial understatement, Substantial understatement of tax. Military tax deductions 2011 Valuation misstatement, Substantial valuation misstatement. Military tax deductions 2011 Political parties Debts owed by, Debts owed by political parties. Military tax deductions 2011 Preferred stock Nonqualified, Nonqualified preferred stock. Military tax deductions 2011 Redeemable at a premium, Preferred stock redeemable at a premium. Military tax deductions 2011 Stripped, Stripped Preferred Stock Premiums on bonds, Bond premium. Military tax deductions 2011 , Premiums on bonds. Military tax deductions 2011 Private activity bonds, Private activity bonds. Military tax deductions 2011 Public utility stock reinvestment, Public utilities. Military tax deductions 2011 Publications (see Tax help) Puts and calls, Puts and Calls Table 4-3, Table 4-3. Military tax deductions 2011 Puts and Calls Q Qualified dividends, Qualified dividends. Military tax deductions 2011 Qualified small business stock, Qualified small business stock. Military tax deductions 2011 , Qualified small business stock. Military tax deductions 2011 , Gains on Qualified Small Business Stock Gains on, Gains on Qualified Small Business Stock R Real estate investment trusts (REITs), Undistributed capital gains of mutual funds and REITs. Military tax deductions 2011 , Shares in a mutual fund or REIT. Military tax deductions 2011 , Loss on mutual fund or REIT stock held 6 months or less. Military tax deductions 2011 Real estate mortgage investment conduits (REMICs), REMICs, Expenses. Military tax deductions 2011 , Including mutual fund or REMIC expenses in income. Military tax deductions 2011 Regular interest, Regular Interest Residual interest, Residual Interest, Residual interests in a REMIC. Military tax deductions 2011 Recordkeeping requirements Education Savings Bond Program, Education Savings Bond Program Investment income, General Information Small business stock, Losses on Section 1244 (Small Business) Stock Redemption of stock, Redemption of stock. Military tax deductions 2011 Redemption or retirement of bonds, Redemption or retirement of bonds. Military tax deductions 2011 Regulated futures contract, Regulated futures contract. Military tax deductions 2011 Reinvestment rights, Commissions and load charges. Military tax deductions 2011 REITs (see Real estate investment trusts (REITs)) Related party transactions, Unpaid expenses owed to related party. Military tax deductions 2011 , Related Party Transactions, Property received from a related party. Military tax deductions 2011 Related persons, Related persons. Military tax deductions 2011 REMICs (see Real estate mortgage investment conduits (REMICs)) Reorganizations, corporate, Corporate reorganizations. Military tax deductions 2011 Reporting requirements Bad debts, How to report bad debts. Military tax deductions 2011 Bond premium amortization, How To Report Amortization Capital gains and losses, How To Report Gains and Losses (Form 6781), How to report gain. Military tax deductions 2011 , Reporting Capital Gains and Losses Dividend income, How To Report Dividend Income Exempt-interest dividends, Information reporting requirement. Military tax deductions 2011 Interest on U. Military tax deductions 2011 S. Military tax deductions 2011 savings bonds, Reporting options for cash method taxpayers. Military tax deductions 2011 , Choice to report interest each year. Military tax deductions 2011 Investment expenses, How To Report Investment Expenses Like-kind exchanges, How to report. Military tax deductions 2011 Options, How to report. Military tax deductions 2011 Original issue discount, Form 1099-OID S corporation income, deductions, and credits, Reporting S corporation income, deductions, and credits. Military tax deductions 2011 Section 1256 contracts, How To Report State or local government obligations, Information reporting requirement. Military tax deductions 2011 Straddles, Section 1256 contracts and straddles. Military tax deductions 2011 Substitute payments, Reporting Substitute Payments Tax-exempt interest income, Reporting tax-exempt interest. Military tax deductions 2011 Trades, How To Report Repossession of real property, Real property repossessed. Military tax deductions 2011 Restricted property, Restricted property. Military tax deductions 2011 Restricted stock, Dividends received on restricted stock. Military tax deductions 2011 Retirement of debt instrument, Retirement of debt instrument. Military tax deductions 2011 Return of capital (see Nondividend distributions) Revocable trust, trustee's commissions for, Trustee's commissions for revocable trust. Military tax deductions 2011 Rollover of gain from sale Securities, Rollover of Gain From Publicly Traded Securities, Rollover of Gain S S corporations, S Corporations, S corporation stock. Military tax deductions 2011 Safe deposit box, Safe deposit box rent. Military tax deductions 2011 Sales and trades of investment property, Sales and Trades of Investment Property Definition, What Is a Sale or Trade? Savings bonds (see U. Military tax deductions 2011 S. Military tax deductions 2011 savings bonds) SBIC stock (see Small business investment company stock) Scrip dividends, Scrip dividends. Military tax deductions 2011 Section 1202 gain, Section 1202 Exclusion, Gain on qualified small business stock. Military tax deductions 2011 Section 1244 stock, Losses on Section 1244 (Small Business) Stock Section 1250 gain, Unrecaptured section 1250 gain. Military tax deductions 2011 Section 1256 contracts, Section 1256 Contracts Marked to Market, Section 1256 contracts. Military tax deductions 2011 , Section 1256 contract options. Military tax deductions 2011 , Section 1256 contracts and straddles. Military tax deductions 2011 Net gain on, Net section 1256 contracts gain. Military tax deductions 2011 Net loss on, Net section 1256 contracts loss. Military tax deductions 2011 Reporting requirements, How To Report Securities Holding period, Holding Period Installment sales, Installment sales. Military tax deductions 2011 Lost, stolen, etc. Military tax deductions 2011 , cost of replacing, Cost of replacing missing securities. Military tax deductions 2011 Rollover of gain from sale, Rollover of Gain From Publicly Traded Securities, Rollover of Gain Traders in, Special Rules for Traders in Securities Worthless, Worthless Securities, Worthless securities. Military tax deductions 2011 Securities futures contracts, Dealer securities futures contract. Military tax deductions 2011 , Securities futures contract. Military tax deductions 2011 , Securities Futures Contracts Self-employment income, Self-Employment Income Self-employment tax, Self-employment tax. Military tax deductions 2011 Seller-financed mortgages, Interest on seller-financed mortgage. Military tax deductions 2011 Short sales, Short Sales, Extraordinary dividends. Military tax deductions 2011 Adjusted basis, Short sales. Military tax deductions 2011 Expenses of, Short-sale expenses. Military tax deductions 2011 Extraordinary dividends, Extraordinary dividends. Military tax deductions 2011 Puts, Put option as short sale. Military tax deductions 2011 Small business investment company stock, Short sale. Military tax deductions 2011 Short-term capital gains and losses, Short-Term or Long-Term Capital Gain or Loss, Short-term gains and losses. Military tax deductions 2011 Short-term obligations, Discount on Short-Term Obligations, Choosing to include accrued discount and other interest in current income. Military tax deductions 2011 , Acquisition discount on short-term obligations. Military tax deductions 2011 , Short-term government obligations. Military tax deductions 2011 Interest deduction, limit on, Limit on interest deduction for short-term obligations. Military tax deductions 2011 Sixty/forty (60/40) rule, 60/40 rule. Military tax deductions 2011 Small business investment company stock, Losses on Small Business Investment Company Stock, SSBIC stock. Military tax deductions 2011 Reporting requirements, How to report. Military tax deductions 2011 Small business stock, Qualified small business stock. Military tax deductions 2011 , Losses on Section 1244 (Small Business) Stock, Qualified small business stock. Military tax deductions 2011 , Gains on Qualified Small Business Stock Social security number (SSN) Custodial accounts, Custodian account for your child. Military tax deductions 2011 Joint accounts, SSN for joint account. Military tax deductions 2011 Requirement to give, Social security number (SSN). Military tax deductions 2011 Specialized small business investment company stock, Specialized small business investment company stock or partnership interest. Military tax deductions 2011 , SSBIC stock. Military tax deductions 2011 Spouses Transfers between, Property Received From Your Spouse, Transfers Between Spouses (see also Related party transactions) State or local government obligations, State or Local Government Obligations, Taxable Interest Market discount bonds (see Market discount bonds) Private activity bonds, Private activity bonds. Military tax deductions 2011 Registration requirement, Registration requirement. Military tax deductions 2011 Tax-exempt interest, Tax-Exempt Interest Taxable interest, Taxable Interest Stock Basis, Basis adjustment. Military tax deductions 2011 , Basis adjustment. Military tax deductions 2011 , Basis. Military tax deductions 2011 , Stocks and Bonds, Basis of replacement stock. Military tax deductions 2011 Capital asset, Stocks, stock rights, and bonds. Military tax deductions 2011 Constructive ownership, Constructive ownership of stock. Military tax deductions 2011 Convertible, Convertible stocks and bonds. Military tax deductions 2011 Corporate, Corporate Stocks Dividends (see Dividends) Fractional shares, Fractional shares. Military tax deductions 2011 , Automatic investment service. Military tax deductions 2011 Identification, Identifying stock or bonds sold. Military tax deductions 2011 Installment sales, Installment sales. Military tax deductions 2011 Nonqualified preferred stock, Nonqualified preferred stock. Military tax deductions 2011 Options for employees, Reminders Public utility, reinvestment, Public utilities. Military tax deductions 2011 Redemption of, Redemption of stock. Military tax deductions 2011 Replacement stock, Basis of replacement stock. Military tax deductions 2011 Restricted stock, Dividends received on restricted stock. Military tax deductions 2011 Rights, Distributions of Stock and Stock Rights, Stock rights. Military tax deductions 2011 , Nontaxable stock rights. Military tax deductions 2011 S corporations, S corporation stock. Military tax deductions 2011 Sales to ESOPs or cooperatives, Sales of Stock to ESOPs or Certain Cooperatives Small business, Qualified small business stock. Military tax deductions 2011 , Qualified small business stock. Military tax deductions 2011 Specialized small business investment company, Specialized small business investment company stock or partnership interest. Military tax deductions 2011 Splits, Stock splits. Military tax deductions 2011 Straddles (see Straddles) Stripped preferred stock, Stripped Preferred Stock Surrender of, Surrender of stock. Military tax deductions 2011 Trades, Stock for stock of the same corporation. Military tax deductions 2011 Trust instruments treated as, Certain trust instruments treated as stock. Military tax deductions 2011 Straddles, Straddles, Interest expense and carrying charges relating to mixed straddle account positions. Military tax deductions 2011 Holding period, Holding Period and Loss Treatment Rules Interest expense and carrying charges, Interest expense and carrying charges on straddles. Military tax deductions 2011 Loss deferral rules, Loss Deferral Rules Mixed, Mixed straddles. Military tax deductions 2011 , Mixed straddles. Military tax deductions 2011 , Mixed Straddle Elections Reporting requirements, Section 1256 contracts and straddles. Military tax deductions 2011 Stripped bonds and coupons, Stripped bonds or coupons. Military tax deductions 2011 , Stripped Bonds and Coupons, Stripped tax-exempt obligation. Military tax deductions 2011 Stripped preferred stock, Stripped Preferred Stock Substitute payments, Reporting Substitute Payments T Tables Capital gains maximum rate (Table 4-4), Table 4-4. Military tax deductions 2011 What Is Your Maximum Capital Gain Rate? Income tax treaties (Table 1-3), Qualified Dividends Investment income, reporting of (Table 1-1), Table 1-1. Military tax deductions 2011 Where To Report Common Types of Investment Income Puts and calls (Table 4-3), Table 4-3. Military tax deductions 2011 Puts and Calls U. Military tax deductions 2011 S. Military tax deductions 2011 savings bonds, person responsible for tax (Table 1-2), Table 1-2. Military tax deductions 2011 Who Pays the Tax on U. Military tax deductions 2011 S. Military tax deductions 2011 Savings Bond Interest Tax credit bonds, Tax credit bonds. Military tax deductions 2011 Tax help, How To Get Tax Help Tax rates, What's New Capital gain and losses, Capital Gain Tax Rates Tax refunds Interest on, Interest on tax refunds. Military tax deductions 2011 Tax shelters, Tax Shelters and Other Reportable Transactions, Whether To Invest Penalties, Penalties Reporting requirements, Investor Reporting Rules to curb abuse, Rules To Curb Abusive Tax Shelters Tax-exempt bonds, Tax-exempt state and local government bonds. Military tax deductions 2011 Tax-exempt income Expenses of, Tax-exempt income. Military tax deductions 2011 Interest, Tax-Exempt Interest, Reporting tax-exempt interest. Military tax deductions 2011 Tax-exempt obligations, Tax-Exempt Interest, Stripped tax-exempt obligations. Military tax deductions 2011 , Discounted tax-exempt obligations. Military tax deductions 2011 Taxable income, expenses of, Expenses for both tax-exempt and taxable income. Military tax deductions 2011 Taxes State and local transfer, State and local transfer taxes. Military tax deductions 2011 State income, State income taxes. Military tax deductions 2011 Term loans, Term loans. Military tax deductions 2011 Trade or business, Passive activity. Military tax deductions 2011 Traders in securities, Special Rules for Traders in Securities Trades Insurance, Insurance Policies and Annuities Investment property, Sales and Trades of Investment Property Like-kind, Like-Kind Exchanges, Like-Kind Exchanges Nontaxable, Property Received in Nontaxable Trades, Nontaxable Trades, Nontaxable trades. Military tax deductions 2011 Reporting requirements, How To Report Stock, Stock for stock of the same corporation. Military tax deductions 2011 Taxable, Property Received in Taxable Trades U. Military tax deductions 2011 S. Military tax deductions 2011 Treasury notes or bonds, U. Military tax deductions 2011 S. Military tax deductions 2011 Treasury Notes or Bonds Treasury bills, notes, and bonds (see U. Military tax deductions 2011 S. Military tax deductions 2011 Treasury bills, notes, and bonds) Treasury inflation-indexed securities, Inflation-Indexed Debt Instruments Treasury inflation-protected securities (TIPS), Treasury inflation-protected securities (TIPS). Military tax deductions 2011 , Inflation-Indexed Debt Instruments Treaties, income tax (Table 1-3), Qualified Dividends Trust income received by beneficiary, Beneficiary of an estate or trust. Military tax deductions 2011 Trustee's commission for revocable trust, Trustee's commissions for revocable trust. Military tax deductions 2011 U U. Military tax deductions 2011 S. Military tax deductions 2011 savings bonds, U. Military tax deductions 2011 S. Military tax deductions 2011 obligations. Military tax deductions 2011 , U. Military tax deductions 2011 S. Military tax deductions 2011 Savings Bonds Reporting interest on, U. Military tax deductions 2011 S. Military tax deductions 2011 obligations. Military tax deductions 2011 , U. Military tax deductions 2011 S. Military tax deductions 2011 Savings Bonds Retirement or profit-sharing plan, distributed from, Savings bonds distributed from a retirement or profit-sharing plan. Military tax deductions 2011 Worksheet, Worksheet for savings bonds distributed from a retirement or profit-sharing plan. Military tax deductions 2011 Tax, responsible person (Table 1-2), Table 1-2. Military tax deductions 2011 Who Pays the Tax on U. Military tax deductions 2011 S. Military tax deductions 2011 Savings Bond Interest U. Military tax deductions 2011 S. Military tax deductions 2011 Treasury bills, notes, and bonds, U. Military tax deductions 2011 S. Military tax deductions 2011 obligations. Military tax deductions 2011 , U. Military tax deductions 2011 S. Military tax deductions 2011 Treasury Bills, Notes, and Bonds, U. Military tax deductions 2011 S. Military tax deductions 2011 Treasury Notes or Bonds, U. Military tax deductions 2011 S. Military tax deductions 2011 Treasury notes and bonds. Military tax deductions 2011 Undistributed capital gains, Undistributed capital gains. Military tax deductions 2011 Usurious interest, Usurious interest. Military tax deductions 2011 V Veterans' insurance Dividends on, Dividends on veterans' insurance. Military tax deductions 2011 W Warrants, Warrants. Military tax deductions 2011 Wash sales, Wash Sales, Securities Futures Contracts Holding period, Wash sales. Military tax deductions 2011 Loss deferral rules, straddles, Coordination of Loss Deferral Rules and Wash Sale Rules Withholding, backup, Backup withholding. Military tax deductions 2011 Worksheets Capital loss carryover, Worksheet 4-1. Military tax deductions 2011 Capital Loss Carryover Worksheet Worthless securities, Worthless Securities, Worthless securities. Military tax deductions 2011 Prev  Up     Home   More Online Publications
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Tax Information for Indian Tribal Governments

Per capita payments from trust funds held by the Department of the Interior
The Department of the Treasury and IRS issued interim guidance regarding per capita distributions made to members of Indian tribes from funds held in trust by the Secretary of the Interior.

Voluntary Withholding on Dividends and Other Distributions by Alaska Native Corporations
Shareholders who receive dividends or other distributions from an Alaska Native Corporation (ANC) can now request voluntary withholding.

Indian fishing rights-related activities income eligible for qualified retirement plan contributions
Amendments to the Treasury Regulations clarify that Indian tribal members who earn compensation for services performed in a fishing rights-related activity can contribute those amounts to a qualified retirement plan.

ITG Voluntary Closing Agreement Process
Information for Indian Tribes that are interested in an effective way of correcting a past error, mistake or misinterpretation of tax law or filing requirement.

Treasury and the IRS Release Tribal General Welfare Guidance
The Department of the Treasury announced key economic development initiatives that address the unique set of challenges faced by the Native American community.

Per Capita Payments from Certain Tribal Trust Settlement Proceeds Excluded from Income
Updated information regarding per capita payments from Tribal trust settlements

Reallocation Process Announced for Tribal Economic Development Bonds
The IRS has announced a process for reallocation of available amounts of volume cap for Tribal Economic Development Bonds.

Casino Issues
Information into the intent of Title 31 (anti-money laundering), non-Title 31 and other casino issues.

Indian Health Care Benefits and Section 139D
Frequently asked questions concerning Indian Health Care Benefits and Section 139D.

Recent Developments
Newsworthy items which may affect Indian tribal governments.

ITG News
News information of interest to Indian tribal governments.

IRS Requests Consultation on General Welfare and Issues Important New Guidance that will affect Indian Tribal Governments
The IRS has issued several important items of guidance that affect Indian Tribal Governments. Items include a Retirement Plan phone forum, reallocation of Tribal Economic Development Bonds, the Pension Protection Act and governmental plans, IGRA trust guidance, and a request for consultation on the general welfare doctrine.

ACT Public Meeting, Agenda, New Member
One new member joined ITG project team; report on recommendations to be released in June.

Voluntary Classification Settlement Program
Employers may reclassify workers as employees for future periods with partial employment tax relief.

Indian Tribal Governments Webinars and Phone Forums
Educational recordings covering topics for Indian Tribal governments

ITG Published Guidance
Links to guidance published by the Service regarding federal tax administration as it relates to tribal governments.

New Annual Electronic Filing Requirement for Small Tax-Exempt Organizations
Beginning in 2008, small tax-exempt organizations that previously were not required to file returns risk losing their tax-exempt status if they do not file an annual electronic notice (e-Postcard Form 990-N). This will include small tax-exempt organizations operated by, or on behalf of Indian tribal governments.

Tax Status of Tribes
Different ways tribal entities can be structured and the tax implications of each; what constitutes a federally recognized tribe and the benefits of such; and the taxability of certain types of income to tribal members.

Natural Resources
Information regarding tribal governments federal tax obligations and responsibilities regarding income from natural resources, IRC Section 7873, etc.

Excise Taxes
Information regarding excise taxes, who is liable, and definitions.

Tax Information for Charities and Other Non-Profits - ITG
Information for Tribal governments as well as other organizations on charitable organizations and deductions.

Tax Exempt Bonds
Insights into tribal governments' economic benefits of issuing tax exempt bonds; their ability to issue tax exempt bonds; what requirements must be met; and other applicable general rules.

FAQs for Indian Tribal Governments regarding Targeted Tax Benefits
Insights into the employment tax credits (Indian Employment, Work Opportunity, Welfare-to-Work, and Empowerment Zone Employment) available to those doing business with or employing Native Americans, and special depreciation rules for qualified property used on reservations.

Links to Helpful Resources
A repository of resources for specific research and/or general knowledge.

IRS’ Electronic Filing and E-Services
The IRS continues to expand its electronic filing and e-Services to allow tax professionals and payers to do business with the IRS electronically.

IRS Privacy Policy
The Internal Revenue Service's Office of Privacy ensures your personal information is protected whenever you visit the IRS website.

Helpful Tip
Want to visit us again? Just remember www.irs.gov/tribes. It's that easy!

ITG P.R.E.P.A.R.E
Instructions for ITG customers when they experience an interruption in tax preparation for whatever reason.

ITG 2011 Customer Satisfaction Survey
ITG 2011 Customer Satisfaction Survey

Treasury Department Tribal Consultation and Coordination
The Treasury Department now has a web page for Tribal Consultation.

ITG Employment Taxes
Information for Indian Tribal Governments with regard to the withholding, filing, and paying of employment taxes.

Frequently Asked Questions and Answers for Indian Tribal Governments
General information about subjects of interest to tribal governments.

Tip Income
Information regarding the taxability of tip income, employee and employer reporting responsibilities, and the Tip Rate Determination Agreement (TRDA) program.

Information Reporting
Information into what types of forms need to be filed based on the types of income being reported, and the rules on backup withholding - when it's applicable and how it's reported.

Fraud and Abusive Schemes Information for Indian Tribal Governments
Information on abusive schemes for Indian Tribal Governments.

Voluntary Classification Settlement Program (VCSP)
This page describes the new Voluntary Classification Settlement Program for employers.

Page Last Reviewed or Updated: 28-Mar-2014

The Military Tax Deductions 2011

Military tax deductions 2011 4. Military tax deductions 2011   Sales and Trades of Investment Property Table of Contents IntroductionNominees. Military tax deductions 2011 Topics - This chapter discusses: Useful Items - You may want to see: What Is a Sale or Trade?Dividend versus sale or trade. Military tax deductions 2011 Worthless Securities Constructive Sales of Appreciated Financial Positions Section 1256 Contracts Marked to Market Basis of Investment PropertyCost Basis Basis Other Than Cost Adjusted Basis Stocks and Bonds How To Figure Gain or LossFair market value. Military tax deductions 2011 Debt paid off. Military tax deductions 2011 Payment of cash. Military tax deductions 2011 Special Rules for Mutual Funds Nontaxable TradesLike-Kind Exchanges Corporate Stocks Exchange of Shares In One Mutual Fund For Shares In Another Mutual Fund Insurance Policies and Annuities U. Military tax deductions 2011 S. Military tax deductions 2011 Treasury Notes or Bonds Transfers Between Spouses Related Party TransactionsGain on Sale or Trade of Depreciable Property Capital Gains and LossesCapital or Ordinary Gain or Loss Holding Period Nonbusiness Bad Debts Short Sales Wash Sales Options Straddles Sales of Stock to ESOPs or Certain Cooperatives Rollover of Gain From Publicly Traded Securities Gains on Qualified Small Business Stock Exclusion of Gain From DC Zone Assets Reporting Capital Gains and LossesException 1. Military tax deductions 2011 Exception 2. Military tax deductions 2011 Section 1256 contracts and straddles. Military tax deductions 2011 Market discount bonds. Military tax deductions 2011 File Form 1099-B or Form 1099-S with the IRS. Military tax deductions 2011 Capital Losses Capital Gain Tax Rates Special Rules for Traders in SecuritiesHow To Report Introduction This chapter explains the tax treatment of sales and trades of investment property. Military tax deductions 2011 Investment property. Military tax deductions 2011   This is property that produces investment income. Military tax deductions 2011 Examples include stocks, bonds, and Treasury bills and notes. Military tax deductions 2011 Property used in a trade or business is not investment property. Military tax deductions 2011 Form 1099-B. Military tax deductions 2011   If you sold property such as stocks, bonds, mutual funds, 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. Military tax deductions 2011 You should receive the statement by February 15 of the next year. Military tax deductions 2011 It will show the gross proceeds from the sale. Military tax deductions 2011 The IRS will also get a copy of Form 1099-B from the broker. Military tax deductions 2011   Use Form 1099-B (or substitute statement received from your broker) to complete Form 8949. Military tax deductions 2011 If you sold a covered security in 2013, your broker will send you a Form 1099-B (or substitute statement) that shows your basis. Military tax deductions 2011 This will help you complete Form 8949. Military tax deductions 2011 Generally, a covered security is a security you acquired after 2010, with certain exceptions explained in the Instructions for Form 8949. Military tax deductions 2011    For more information on Form 8949 and Schedule D (Form 1040), see Reporting Capital Gains and Losses in this chapter. Military tax deductions 2011 Also see the Instructions for Form 8949 and the Instructions for Schedule D (Form 1040). Military tax deductions 2011 Nominees. Military tax deductions 2011   If someone receives gross proceeds as a nominee for you, that person will give you a Form 1099-B, which will show gross proceeds received on your behalf. Military tax deductions 2011   If you receive a Form 1099-B that includes gross proceeds belonging to another person, see Nominees , later under Reporting Capital Gains and Losses for more information. Military tax deductions 2011 Other property transactions. Military tax deductions 2011   Certain transfers of property are discussed in other IRS publications. Military tax deductions 2011 These include: Sale of your main home, discussed in Publication 523, Selling Your Home; Installment sales, covered in Publication 537; Various types of transactions involving business property, discussed in Publication 544, Sales and Other Dispositions of Assets; Transfers of property at death, covered in Publication 559; and Disposition of an interest in a passive activity, discussed in Publication 925. Military tax deductions 2011 Topics - This chapter discusses: What Is a Sale or Trade? , Basis of Investment Property , Adjusted Basis , How To Figure Gain or Loss , Nontaxable trades , Transfers Between Spouses , Related Party Transactions , Capital Gains and Losses , Reporting Capital Gains and Losses , and Special Rules for Traders in Securities . Military tax deductions 2011 Useful Items - You may want to see: Publication 551 Basis of Assets Form (and Instructions) Schedule D (Form 1040) Capital Gains and Losses 6781 Gains and Losses From Section 1256 Contracts and Straddles 8582 Passive Activity Loss Limitations 8824 Like-Kind Exchanges 8949 Sales and Other Dispositions of Capital Assets See chapter 5, How To Get Tax Help , for information about getting these publications and forms. Military tax deductions 2011 What Is a Sale or Trade? This section explains what is a sale or trade. Military tax deductions 2011 It also explains certain transactions and events that are treated as sales or trades. Military tax deductions 2011 A sale is generally a transfer of property for money or a mortgage, note, or other promise to pay money. Military tax deductions 2011 A trade is a transfer of property for other property or services, and may be taxed in the same way as a sale. Military tax deductions 2011 Sale and purchase. Military tax deductions 2011   Ordinarily, a transaction is not a trade when you voluntarily sell property for cash and immediately buy similar property to replace it. Military tax deductions 2011 The sale and purchase are two separate transactions. Military tax deductions 2011 But see Like-Kind Exchanges under Nontaxable Trades, later. Military tax deductions 2011 Redemption of stock. Military tax deductions 2011   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. Military tax deductions 2011 Dividend versus sale or trade. Military tax deductions 2011   Whether a redemption is treated as a sale, trade, dividend, or other distribution depends on the circumstances in each case. Military tax deductions 2011 Both direct and indirect ownership of stock will be considered. Military tax deductions 2011 The redemption is treated as a sale or trade of stock if: The redemption is not essentially equivalent to a dividend — see Dividends and Other Distributions in chapter 1, 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. Military tax deductions 2011 Redemption or retirement of bonds. Military tax deductions 2011   A redemption or retirement of bonds or notes at their maturity generally is treated as a sale or trade. Military tax deductions 2011 See Stocks, stock rights, and bonds and Discounted Debt Instruments under Capital or Ordinary Gain or Loss, later. Military tax deductions 2011   In addition, a significant modification of a bond is treated as a trade of the original bond for a new bond. Military tax deductions 2011 For details, see Regulations section 1. Military tax deductions 2011 1001-3. Military tax deductions 2011 Surrender of stock. Military tax deductions 2011   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. Military tax deductions 2011 The surrendering shareholder must reallocate his or her basis in the surrendered shares to the shares he or she retains. Military tax deductions 2011 Trade of investment property for an annuity. Military tax deductions 2011   The transfer of investment property to a corporation, trust, fund, foundation, or other organization, in exchange for a fixed annuity contract that will make guaranteed annual payments to you for life, is a taxable trade. Military tax deductions 2011 If the present value of the annuity is more than your basis in the property traded, you have a taxable gain in the year of the trade. Military tax deductions 2011 Figure the present value of the annuity according to factors used by commercial insurance companies issuing annuities. Military tax deductions 2011 Transfer by inheritance. Military tax deductions 2011   The transfer of property of a decedent to the executor or administrator of the estate, or to the heirs or beneficiaries, is not a sale or other disposition. Military tax deductions 2011 No taxable gain or deductible loss results from the transfer. Military tax deductions 2011 Termination of certain rights and obligations. Military tax deductions 2011   The cancellation, lapse, expiration, or other termination of a right or obligation (other than a securities futures contract) with respect to property that is a capital asset (or that would be a capital asset if you acquired it) is treated as a sale. Military tax deductions 2011 Any gain or loss is treated as a capital gain or loss. Military tax deductions 2011   This rule does not apply to the retirement of a debt instrument. Military tax deductions 2011 See Redemption or retirement of bonds , earlier. Military tax deductions 2011 Worthless Securities 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. Military tax deductions 2011 This affects whether your capital loss is long term or short term. Military tax deductions 2011 See Holding Period , later. Military tax deductions 2011 Worthless securities also include securities that you abandon after March 12, 2008. Military tax deductions 2011 To abandon a security, you must permanently surrender and relinquish all rights in the security and receive no consideration in exchange for it. Military tax deductions 2011 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. Military tax deductions 2011 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. Military tax deductions 2011 Do not deduct them in the year the stock became worthless. Military tax deductions 2011 How to report loss. Military tax deductions 2011   Report worthless securities in Form 8949, Part I or Part II, whichever applies. Military tax deductions 2011    Report your worthless securities transactions on Form 8949 with the correct box checked for these transactions. Military tax deductions 2011 See Form 8949 and the Instructions for Form 8949. Military tax deductions 2011 Filing a claim for refund. Military tax deductions 2011   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. Military tax deductions 2011 You must use Form 1040X, Amended U. Military tax deductions 2011 S. Military tax deductions 2011 Individual Income Tax Return, to amend your return for the year the security became worthless. Military tax deductions 2011 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. Military tax deductions 2011 (Claims not due to worthless securities or bad debts generally must be filed within 3 years from the date a return is filed, or 2 years from the date the tax is paid, whichever is later. Military tax deductions 2011 ) For more information about filing a claim, see Publication 556. Military tax deductions 2011 Constructive Sales of Appreciated Financial Positions You are treated as having made a constructive sale when you enter into certain transactions involving an appreciated financial position (defined later) in stock, a partnership interest, or certain debt instruments. Military tax deductions 2011 You must recognize gain as if the position were disposed of at its fair market value on the date of the constructive sale. Military tax deductions 2011 This gives you a new holding period for the position that begins on the date of the constructive sale. Military tax deductions 2011 Then, when you close the transaction, you reduce your gain (or increase your loss) by the gain recognized on the constructive sale. Military tax deductions 2011 Constructive sale. Military tax deductions 2011   You are treated as having made a constructive sale of an appreciated financial position if you: Enter into a short sale of the same or substantially identical property, Enter into an offsetting notional principal contract relating to the same or substantially identical property, Enter into a futures or forward contract to deliver the same or substantially identical property (including a forward contract that provides for cash settlement), or Acquire the same or substantially identical property (if the appreciated financial position is a short sale, an offsetting notional principal contract, or a futures or forward contract). Military tax deductions 2011   You are also treated as having made a constructive sale of an appreciated financial position if a person related to you enters into a transaction described above with a view toward avoiding the constructive sale treatment. Military tax deductions 2011 For this purpose, a related person is any related party described under Related Party Transactions , later in this chapter. Military tax deductions 2011 Exception for nonmarketable securities. Military tax deductions 2011   You are not treated as having made a constructive sale solely because you entered into a contract for sale of any stock, debt instrument, or partnership interest that is not a marketable security if it settles within 1 year of the date you enter into it. Military tax deductions 2011 Exception for certain closed transactions. Military tax deductions 2011   Do not treat a transaction as a constructive sale if all of the following are true. Military tax deductions 2011 You closed the transaction on or before the 30th day after the end of your tax year. Military tax deductions 2011 You held the appreciated financial position throughout the 60-day period beginning on the date you closed the transaction. Military tax deductions 2011 Your risk of loss was not reduced at any time during that 60-day period by holding certain other positions. Military tax deductions 2011   If a closed transaction is reestablished in a substantially similar position during the 60-day period beginning on the date the first transaction was closed, this exception still applies if the reestablished position is closed before the 30th day after the end of your tax year in which the first transaction was closed and, after that closing, (2) and (3) above are true. Military tax deductions 2011   This exception also applies to successive short sales of an entire appreciated financial position. Military tax deductions 2011 For more information, see Revenue Ruling 2003-1 in Internal Revenue Bulletin 2003-3. Military tax deductions 2011 This bulletin is available at www. Military tax deductions 2011 irs. Military tax deductions 2011 gov/pub/irs-irbs/irb03-03. Military tax deductions 2011 pdf. Military tax deductions 2011 Appreciated financial position. Military tax deductions 2011   This is any interest in stock, a partnership interest, or a debt instrument (including a futures or forward contract, a short sale, or an option) if disposing of the interest would result in a gain. Military tax deductions 2011 Exceptions. Military tax deductions 2011   An appreciated financial position does not include the following. Military tax deductions 2011 Any position from which all of the appreciation is accounted for under marked-to-market rules, including section 1256 contracts (described later under Section 1256 Contracts Marked to Market ). Military tax deductions 2011 Any position in a debt instrument if: The position unconditionally entitles the holder to receive a specified principal amount, The interest payments (or other similar amounts) with respect to the position are payable at a fixed rate or a variable rate described in Regulations section 1. Military tax deductions 2011 860G-1(a)(3), and The position is not convertible, either directly or indirectly, into stock of the issuer (or any related person). Military tax deductions 2011 Any hedge with respect to a position described in (2). Military tax deductions 2011 Certain trust instruments treated as stock. Military tax deductions 2011   For the constructive sale rules, an interest in an actively traded trust is treated as stock unless substantially all of the value of the property held by the trust is debt that qualifies for the exception to the definition of an appreciated financial position (explained in (2) above). Military tax deductions 2011 Sale of appreciated financial position. Military tax deductions 2011   A transaction treated as a constructive sale of an appreciated financial position is not treated as a constructive sale of any other appreciated financial position, as long as you continue to hold the original position. Military tax deductions 2011 However, if you hold another appreciated financial position and dispose of the original position before closing the transaction that resulted in the constructive sale, you are treated as if, at the same time, you constructively sold the other appreciated financial position. Military tax deductions 2011 Section 1256 Contracts Marked to Market If you hold a section 1256 contract at the end of the tax year, you generally must treat it as sold at its fair market value on the last business day of the tax year. Military tax deductions 2011 Section 1256 Contract A section 1256 contract is any: Regulated futures contract, Foreign currency contract, Nonequity option, Dealer equity option, or Dealer securities futures contract. Military tax deductions 2011 Exceptions. Military tax deductions 2011   A section 1256 contract does not include: Interest rate swaps, Currency swaps, Basis swaps, Interest rate caps, Interest rate floors, Commodity swaps, Equity swaps, Equity index swaps, Credit default swaps, or Similar agreements. Military tax deductions 2011 For more details, including definitions of these terms, see section 1256. Military tax deductions 2011 Regulated futures contract. Military tax deductions 2011   This is a contract that: Provides that amounts which must be deposited to, or can be withdrawn from, your margin account depend on daily market conditions (a system of marking to market), and Is traded on, or subject to the rules of, a qualified board of exchange. Military tax deductions 2011 A qualified board of exchange is a domestic board of trade designated as a contract market by the Commodity Futures Trading Commission, any board of trade or exchange approved by the Secretary of the Treasury, or a national securities exchange registered with the Securities and Exchange Commission. Military tax deductions 2011 Foreign currency contract. Military tax deductions 2011   This is a contract that: Requires delivery of a foreign currency that has positions traded through regulated futures contracts (or settlement of which depends on the value of that type of foreign currency), Is traded in the interbank market, and Is entered into at arm's length at a price determined by reference to the price in the interbank market. Military tax deductions 2011   Bank forward contracts with maturity dates longer than the maturities ordinarily available for regulated futures contracts are considered to meet the definition of a foreign currency contract if the above three conditions are satisfied. Military tax deductions 2011   Special rules apply to certain foreign currency transactions. Military tax deductions 2011 These transactions may result in ordinary gain or loss treatment. Military tax deductions 2011 For details, see Internal Revenue Code section 988 and Regulations sections 1. Military tax deductions 2011 988-1(a)(7) and 1. Military tax deductions 2011 988-3. Military tax deductions 2011 Nonequity option. Military tax deductions 2011   This is any listed option (defined later) that is not an equity option. Military tax deductions 2011 Nonequity options include debt options, commodity futures options, currency options, and broad-based stock index options. Military tax deductions 2011 A broad-based stock index is based on the value of a group of diversified stocks or securities (such as the Standard and Poor's 500 index). Military tax deductions 2011 Warrants based on a stock index that are economically, substantially identical in all material respects to options based on a stock index are treated as options based on a stock index. Military tax deductions 2011 Cash-settled options. Military tax deductions 2011   Cash-settled options based on a stock index and either traded on or subject to the rules of a qualified board of exchange are nonequity options if the Securities and Exchange Commission (SEC) determines that the stock index is broad based. Military tax deductions 2011   This rule does not apply to options established before the SEC determines that the stock index is broad based. Military tax deductions 2011 Listed option. Military tax deductions 2011   This is any option traded on, or subject to the rules of, a qualified board or exchange (as discussed earlier under Regulated futures contract). Military tax deductions 2011 A listed option, however, does not include an option that is a right to acquire stock from the issuer. Military tax deductions 2011 Dealer equity option. Military tax deductions 2011   This is any listed option that, for an options dealer: Is an equity option, Is bought or granted by that dealer in the normal course of the dealer's business activity of dealing in options, and Is listed on the qualified board of exchange where that dealer is registered. Military tax deductions 2011   An “options dealer” is any person registered with an appropriate national securities exchange as a market maker or specialist in listed options. Military tax deductions 2011 Equity option. Military tax deductions 2011   This is any option: To buy or sell stock, or That is valued directly or indirectly by reference to any stock or narrow-based security index. Military tax deductions 2011  Equity options include options on a group of stocks only if the group is a narrow-based stock index. Military tax deductions 2011 Dealer securities futures contract. Military tax deductions 2011   For any dealer in securities futures contracts or options on those contracts, this is a securities futures contract (or option on such a contract) that: Is entered into by the dealer (or, in the case of an option, is purchased or granted by the dealer) in the normal course of the dealer's activity of dealing in this type of contract (or option), and Is traded on a qualified board or exchange (as defined under Regulated futures contract , earlier). Military tax deductions 2011 A securities futures contract that is not a dealer securities futures contract is treated as described later under Securities Futures Contracts . Military tax deductions 2011 Marked-to-Market Rules A section 1256 contract that you hold at the end of the tax year will generally be treated as sold at its fair market value on the last business day of the tax year, and you must recognize any gain or loss that results. Military tax deductions 2011 That gain or loss is taken into account in figuring your gain or loss when you later dispose of the contract, as shown in the example under 60/40 rule, below. Military tax deductions 2011 Hedging exception. Military tax deductions 2011   The marked-to-market rules do not apply to hedging transactions. Military tax deductions 2011 See Hedging Transactions , later. Military tax deductions 2011 60/40 rule. Military tax deductions 2011   Under the marked-to-market system, 60% of your capital gain or loss will be treated as a long-term capital gain or loss, and 40% will be treated as a short-term capital gain or loss. Military tax deductions 2011 This is true regardless of how long you actually held the property. Military tax deductions 2011 Example. Military tax deductions 2011 On June 22, 2012, you bought a regulated futures contract for $50,000. Military tax deductions 2011 On December 31, 2012 (the last business day of your tax year), the fair market value of the contract was $57,000. Military tax deductions 2011 You recognized a $7,000 gain on your 2012 tax return, treated as 60% long-term and 40% short-term capital gain. Military tax deductions 2011 On February 1, 2013, you sold the contract for $56,000. Military tax deductions 2011 Because you recognized a $7,000 gain on your 2012 return, you recognize a $1,000 loss ($57,000 − $56,000) on your 2013 tax return, treated as 60% long-term and 40% short-term capital loss. Military tax deductions 2011 Limited partners or entrepreneurs. Military tax deductions 2011   The 60/40 rule does not apply to dealer equity options or dealer securities futures contracts that result in capital gain or loss allocable to limited partners or limited entrepreneurs (defined later under Hedging Transactions ). Military tax deductions 2011 Instead, these gains or losses are treated as short term. Military tax deductions 2011 Terminations and transfers. Military tax deductions 2011   The marked-to-market rules also apply if your obligation or rights under section 1256 contracts are terminated or transferred during the tax year. Military tax deductions 2011 In this case, use the fair market value of each section 1256 contract at the time of termination or transfer to determine the gain or loss. Military tax deductions 2011 Terminations or transfers may result from any offsetting, delivery, exercise, assignment, or lapse of your obligation or rights under section 1256 contracts. Military tax deductions 2011 Loss carryback election. Military tax deductions 2011   An individual having a net section 1256 contracts loss (defined later), generally can elect to carry this loss back 3 years instead of carrying it over to the next year. Military tax deductions 2011 See How To Report , later, for information about reporting this election on your return. Military tax deductions 2011   The loss carried back to any year under this election cannot be more than the net section 1256 contracts gain in that year. Military tax deductions 2011 In addition, the amount of loss carried back to an earlier tax year cannot increase or produce a net operating loss for that year. Military tax deductions 2011   The loss is carried to the earliest carryback year first, and any unabsorbed loss amount can then be carried to each of the next 2 tax years. Military tax deductions 2011 In each carryback year, treat 60% of the carryback amount as a long-term capital loss and 40% as a short-term capital loss from section 1256 contracts. Military tax deductions 2011   If only a portion of the net section 1256 contracts loss is absorbed by carrying the loss back, the unabsorbed portion can be carried forward, under the capital loss carryover rules, to the year following the loss. Military tax deductions 2011 (See Capital Losses under Reporting Capital Gains and Losses, later. Military tax deductions 2011 ) Figure your capital loss carryover as if, for the loss year, you had an additional short-term capital gain of 40% of the amount of net section 1256 contracts loss absorbed in the carryback years and an additional long-term capital gain of 60% of the absorbed loss. Military tax deductions 2011 In the carryover year, treat any capital loss carryover from losses on section 1256 contracts as if it were a loss from section 1256 contracts for that year. Military tax deductions 2011 Net section 1256 contracts loss. Military tax deductions 2011   This loss is the lesser of: The net capital loss for your tax year determined by taking into account only the gains and losses from section 1256 contracts, or The capital loss carryover to the next tax year determined without this election. Military tax deductions 2011 Net section 1256 contracts gain. Military tax deductions 2011   This gain is the lesser of: The capital gain net income for the carryback year determined by taking into account only gains and losses from section 1256 contracts, or The capital gain net income for that year. Military tax deductions 2011  Figure your net section 1256 contracts gain for any carryback year without regard to the net section 1256 contracts loss for the loss year or any later tax year. Military tax deductions 2011 Traders in section 1256 contracts. Military tax deductions 2011   Gain or loss from the trading of section 1256 contracts is capital gain or loss subject to the marked-to-market rules. Military tax deductions 2011 However, this does not apply to contracts held for purposes of hedging property if any loss from the property would be an ordinary loss. Military tax deductions 2011 Treatment of underlying property. Military tax deductions 2011   The determination of whether an individual's gain or loss from any property is ordinary or capital gain or loss is made without regard to the fact that the individual is actively engaged in dealing in or trading section 1256 contracts related to that property. Military tax deductions 2011 How To Report If you disposed of regulated futures or foreign currency contracts in 2013 (or had unrealized profit or loss on these contracts that were open at the end of 2012 or 2013), you should receive Form 1099-B, or substitute statement, from your broker. Military tax deductions 2011 Form 6781. Military tax deductions 2011   Use Part I of Form 6781 to report your gains and losses from all section 1256 contracts that are open at the end of the year or that were closed out during the year. Military tax deductions 2011 This includes the amount shown in box 10 of Form 1099-B. Military tax deductions 2011 Then enter the net amount of these gains and losses on Schedule D (Form 1040), line 4 or line 11, as appropriate. Military tax deductions 2011 Include a copy of Form 6781 with your income tax return. Military tax deductions 2011   If the Form 1099-B you receive includes a straddle or hedging transaction, defined later, it may be necessary to show certain adjustments on Form 6781. Military tax deductions 2011 Follow the Form 6781 instructions for completing Part I. Military tax deductions 2011 Loss carryback election. Military tax deductions 2011   To carry back your loss under the election procedures described earlier, file Form 1040X or Form 1045, Application for Tentative Refund, for the year to which you are carrying the loss with an amended Form 6781 and an amended Schedule D (Form 1040) attached. Military tax deductions 2011 Follow the instructions for completing Form 6781 for the loss year to make this election. Military tax deductions 2011 Hedging Transactions The marked-to-market rules, described earlier, do not apply to hedging transactions. Military tax deductions 2011 A transaction is a hedging transaction if both of the following conditions are met. Military tax deductions 2011 You entered into the transaction in the normal course of your trade or business primarily to manage the risk of: Price changes or currency fluctuations on ordinary property you hold (or will hold), or Interest rate or price changes, or currency fluctuations, on your current or future borrowings or ordinary obligations. Military tax deductions 2011 You clearly identified the transaction as being a hedging transaction before the close of the day on which you entered into it. Military tax deductions 2011 This hedging transaction exception does not apply to transactions entered into by or for any syndicate. Military tax deductions 2011 A syndicate is a partnership, S corporation, or other entity (other than a regular corporation) that allocates more than 35% of its losses to limited partners or limited entrepreneurs. Military tax deductions 2011 A limited entrepreneur is a person who has an interest in an enterprise (but not as a limited partner) and who does not actively participate in its management. Military tax deductions 2011 However, an interest is not considered held by a limited partner or entrepreneur if the interest holder actively participates (or did so for at least 5 full years) in the management of the entity, or is the spouse, child (including a legally adopted child), grandchild, or parent of an individual who actively participates in the management of the entity. Military tax deductions 2011 Hedging loss limit. Military tax deductions 2011   If you are a limited partner or entrepreneur in a syndicate, the amount of a hedging loss you can claim is limited. Military tax deductions 2011 A “hedging loss” is the amount by which the allowable deductions in a tax year that resulted from a hedging transaction (determined without regard to the limit) are more than the income received or accrued during the tax year from this transaction. Military tax deductions 2011   Any hedging loss allocated to you for the tax year is limited to your taxable income for that year from the trade or business in which the hedging transaction occurred. Military tax deductions 2011 Ignore any hedging transaction items in determining this taxable income. Military tax deductions 2011 If you have a hedging loss that is disallowed because of this limit, you can carry it over to the next tax year as a deduction resulting from a hedging transaction. Military tax deductions 2011   If the hedging transaction relates to property other than stock or securities, the limit on hedging losses applies if the limited partner or entrepreneur is an individual. Military tax deductions 2011   The limit on hedging losses does not apply to any hedging loss to the extent that it is more than all your unrecognized gains from hedging transactions at the end of the tax year that are from the trade or business in which the hedging transaction occurred. Military tax deductions 2011 The term “unrecognized gain” has the same meaning as defined under Loss Deferral Rules in Straddles, later. Military tax deductions 2011 Sale of property used in a hedge. Military tax deductions 2011   Once you identify personal property as being part of a hedging transaction, you must treat gain from its sale or exchange as ordinary income, not capital gain. Military tax deductions 2011 Self-Employment Income Gains and losses derived in the ordinary course of a commodity or option dealer's trading in section 1256 contracts and property related to these contracts are included in net earnings from self-employment. Military tax deductions 2011 See the Instructions for Schedule SE (Form 1040). Military tax deductions 2011 In addition, the rules relating to contributions to self-employment retirement plans apply. Military tax deductions 2011 For information on retirement plan contributions, see Publication 560 and Publication 590. Military tax deductions 2011 Basis of Investment Property Basis is a way of measuring your investment in property for tax purposes. Military tax deductions 2011 You must know the basis of your property to determine whether you have a gain or loss on its sale or other disposition. Military tax deductions 2011 Investment property you buy normally has an original basis equal to its cost. Military tax deductions 2011 If you get property in some way other than buying it, such as by gift or inheritance, its fair market value may be important in figuring the basis. Military tax deductions 2011 Cost Basis The basis of property you buy is usually its cost. Military tax deductions 2011 The cost is the amount you pay in cash, debt obligations, or other property or services. Military tax deductions 2011 Unstated interest. Military tax deductions 2011   If you buy property on a time-payment plan that charges little or no interest, the basis of your property is your stated purchase price, minus the amount considered to be unstated interest. Military tax deductions 2011 You generally have unstated interest if your interest rate is less than the applicable federal rate. Military tax deductions 2011 For more information, see Unstated Interest and Original Issue Discount (OID) in Publication 537. Military tax deductions 2011 Basis Other Than Cost There are times when you must use a basis other than cost. Military tax deductions 2011 In these cases, you may need to know the property's fair market value or the adjusted basis of the previous owner. Military tax deductions 2011 Fair market value. Military tax deductions 2011   This 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. Military tax deductions 2011 Sales of similar property, around the same date, may be helpful in figuring fair market value. Military tax deductions 2011 Property Received for Services If you receive investment property for services, you must include the property's fair market value in income. Military tax deductions 2011 The amount you include in income then becomes your basis in the property. Military tax deductions 2011 If the services were performed for a price that was agreed to beforehand, this price will be accepted as the fair market value of the property if there is no evidence to the contrary. Military tax deductions 2011 Restricted property. Military tax deductions 2011   If you receive, as payment for services, property that is subject to certain restrictions, your basis in the property generally is its fair market value when it becomes substantially vested. Military tax deductions 2011 Property becomes substantially vested when it is transferable or is no longer subject to substantial risk of forfeiture, whichever happens first. Military tax deductions 2011 See Restricted Property in Publication 525 for more information. Military tax deductions 2011 Bargain purchases. Military tax deductions 2011   If you buy investment property at less than fair market value, as payment for services, you must include the difference in income. Military tax deductions 2011 Your basis in the property is the price you pay plus the amount you include in income. Military tax deductions 2011 Property Received in Taxable Trades If you received investment property in trade for other property, the basis of the new property is its fair market value at the time of the trade unless you received the property in a nontaxable trade. Military tax deductions 2011 Example. Military tax deductions 2011 You trade A Company stock for B Company stock having a fair market value of $1,200. Military tax deductions 2011 If the adjusted basis of the A Company stock is less than $1,200, you have a taxable gain on the trade. Military tax deductions 2011 If the adjusted basis of the A Company stock is more than $1,200, you have a deductible loss on the trade. Military tax deductions 2011 The basis of your B Company stock is $1,200. Military tax deductions 2011 If you later sell the B Company stock for $1,300, you will have a gain of $100. Military tax deductions 2011 Property Received in Nontaxable Trades If you have a nontaxable trade, you do not recognize gain or loss until you dispose of the property you received in the trade. Military tax deductions 2011 See Nontaxable Trades , later. Military tax deductions 2011 The basis of property you received in a nontaxable or partly nontaxable trade is generally the same as the adjusted basis of the property you gave up. Military tax deductions 2011 Increase this amount by any cash you paid, additional costs you had, and any gain recognized. Military tax deductions 2011 Reduce this amount by any cash or unlike property you received, any loss recognized, and any liability of yours that was assumed or treated as assumed. Military tax deductions 2011 Property Received From Your Spouse If property is transferred to you from your spouse (or former spouse, if the transfer is incident to your divorce), your basis is the same as your spouse's or former spouse's adjusted basis just before the transfer. Military tax deductions 2011 See Transfers Between Spouses , later. Military tax deductions 2011 Recordkeeping. Military tax deductions 2011 The transferor must give you the records necessary to determine the adjusted basis and holding period of the property as of the date of the transfer. Military tax deductions 2011 Property Received as a Gift To figure your basis in property that you received as a gift, you must know its adjusted basis to the donor just before it was given to you, its fair market value at the time it was given to you, the amount of any gift tax paid on it, and the date it was given to you. Military tax deductions 2011 Fair market value less than donor's adjusted basis. Military tax deductions 2011   If the fair market value of the property at the time of the gift was less than the donor's adjusted basis just before the gift, your basis for gain on its sale or other disposition is the same as the donor's adjusted basis plus or minus any required adjustments to basis during the period you hold the property. Military tax deductions 2011 Your basis for loss is its fair market value at the time of the gift plus or minus any required adjustments to basis during the period you hold the property. Military tax deductions 2011 No gain or loss. Military tax deductions 2011   If you use the basis for figuring a gain and the result is a loss, and then use the basis for figuring a loss and the result is a gain, you will have neither a gain nor a loss. Military tax deductions 2011 Example. Military tax deductions 2011 You receive a gift of investment property having an adjusted basis of $10,000 at the time of the gift. Military tax deductions 2011 The fair market value at the time of the gift is $9,000. Military tax deductions 2011 You later sell the property for $9,500. Military tax deductions 2011 You have neither gain nor loss. Military tax deductions 2011 Your basis for figuring gain is $10,000, and $9,500 minus $10,000 results in a $500 loss. Military tax deductions 2011 Your basis for figuring loss is $9,000, and $9,500 minus $9,000 results in a $500 gain. Military tax deductions 2011 Fair market value equal to or more than donor's adjusted basis. Military tax deductions 2011   If the fair market value of the property at the time of the gift was equal to or more than the donor's adjusted basis just before the gift, your basis for gain or loss on its sale or other disposition is the donor's adjusted basis plus or minus any required adjustments to basis during the period you hold the property. Military tax deductions 2011 Also, you may be allowed to add to the donor's adjusted basis all or part of any gift tax paid, depending on the date of the gift. Military tax deductions 2011 Gift received before 1977. Military tax deductions 2011   If you received property as a gift before 1977, your basis in the property is the donor's adjusted basis increased by the total gift tax paid on the gift. Military tax deductions 2011 However, your basis cannot be more than the fair market value of the gift at the time it was given to you. Military tax deductions 2011 Example 1. Military tax deductions 2011 You were given XYZ Company stock in 1976. Military tax deductions 2011 At the time of the gift, the stock had a fair market value of $21,000. Military tax deductions 2011 The donor's adjusted basis was $20,000. Military tax deductions 2011 The donor paid a gift tax of $500 on the gift. Military tax deductions 2011 Your basis for gain or loss is $20,500, the donor's adjusted basis plus the amount of gift tax paid. Military tax deductions 2011 Example 2. Military tax deductions 2011 The facts are the same as in Example 1 except that the gift tax paid was $1,500. Military tax deductions 2011 Your basis is $21,000, the donor's adjusted basis plus the gift tax paid, but limited to the fair market value of the stock at the time of the gift. Military tax deductions 2011 Gift received after 1976. Military tax deductions 2011   If you received property as a gift after 1976, your basis is the donor's adjusted basis increased by the part of the gift tax paid that was for the net increase in value of the gift. Military tax deductions 2011 You figure this part by multiplying the gift tax paid on the gift by a fraction. Military tax deductions 2011 The numerator (top part) is the net increase in value of the gift and the denominator (bottom part) is the amount of the gift. Military tax deductions 2011   The net increase in value of the gift is the fair market value of the gift minus the donor's adjusted basis. Military tax deductions 2011 The amount of the gift is its value for gift tax purposes after reduction by any annual exclusion and marital or charitable deduction that applies to the gift. Military tax deductions 2011 Example. Military tax deductions 2011 In 2013, you received a gift of property from your mother. Military tax deductions 2011 At the time of the gift, the property had a fair market value of $101,000 and an adjusted basis to her of $40,000. Military tax deductions 2011 The amount of the gift for gift tax purposes was $87,000 ($101,000 minus the $14,000 annual exclusion), and your mother paid a gift tax of $21,000. Military tax deductions 2011 You figure your basis in the following way: Fair market value $101,000 Minus: Adjusted basis 40,000 Net increase in value of gift $61,000 Gift tax paid $21,000 Multiplied by . Military tax deductions 2011 701 ($61,000 ÷ $87,000) . Military tax deductions 2011 701 Gift tax due to net increase in value $14,721 Plus: Adjusted basis of property to  your mother 40,000 Your basis in the property $54,721 Part sale, part gift. Military tax deductions 2011   If you get property in a transfer that is partly a sale and partly a gift, your basis is the larger of the amount you paid for the property or the transferor's adjusted basis in the property at the time of the transfer. Military tax deductions 2011 Add to that amount the amount of any gift tax paid on the gift, as described in the preceding discussion. Military tax deductions 2011 For figuring loss, your basis is limited to the property's fair market value at the time of the transfer. Military tax deductions 2011 Gift tax information. Military tax deductions 2011   For information on gift tax, see Publication 950, Introduction to Estate and Gift Taxes. Military tax deductions 2011 For information on figuring the amount of gift tax to add to your basis, see Property Received as a Gift in Publication 551. Military tax deductions 2011 Property Received as Inheritance Before or after 2010. Military tax deductions 2011   If you inherited property from a decedent who died before or after 2010, or who died in 2010 and the executor of the decedent's estate elected not to file Form 8939, Allocation of Increase in Basis for Property Acquired From a Decedent, your basis in that property generally is its fair market value (its appraised value on Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return) on: The date of the decedent's death, or The later alternate valuation date if the estate qualifies for, and elects to use, alternate valuation. Military tax deductions 2011 If no Form 706 was filed, use the appraised value on the date of death for state inheritance or transmission taxes. Military tax deductions 2011 For stocks and bonds, if no Form 706 was filed and there are no state inheritance or transmission taxes, see the Form 706 instructions for figuring the fair market value of the stocks and bonds on the date of the decedent's death. Military tax deductions 2011 Appreciated property you gave the decedent. Military tax deductions 2011   Your basis in certain appreciated property that you inherited is the decedent's adjusted basis in the property immediately before death rather than its fair market value. Military tax deductions 2011 This applies to appreciated property that you or your spouse gave the decedent as a gift during the 1-year period ending on the date of death. Military tax deductions 2011 Appreciated property is any property whose fair market value on the day you gave it to the decedent was more than its adjusted basis. Military tax deductions 2011 More information. Military tax deductions 2011   See Publication 551 for more information on the basis of inherited property, including community property, property held by a surviving tenant in a joint tenancy or tenancy by the entirety, a qualified joint interest, and a farm or closely held business. Military tax deductions 2011 Inherited in 2010 and executor elected to file Form 8939. Military tax deductions 2011   If you inherited property from a decedent who died in 2010 and the executor made the election to file Form 8939, see Publication 4895, Tax Treatment of Property Acquired From a Decedent Dying in 2010, to figure your basis. Military tax deductions 2011 Adjusted Basis Before you can figure any gain or loss on a sale, exchange, or other disposition of property or figure allowable depreciation, depletion, or amortization, you usually must make certain adjustments (increases and decreases) to the basis of the property. Military tax deductions 2011 The result of these adjustments to the basis is the adjusted basis. Military tax deductions 2011 Adjustments to the basis of stocks and bonds are explained in the following discussion. Military tax deductions 2011 For information about other adjustments to basis, see Publication 551. Military tax deductions 2011 Stocks and Bonds The basis of stocks or bonds you own generally is the purchase price plus the costs of purchase, such as commissions and recording or transfer fees. Military tax deductions 2011 If you acquired stock or bonds other than by purchase, your basis is usually determined by fair market value or the previous owner's adjusted basis as discussed earlier under Basis Other Than Cost . Military tax deductions 2011 The basis of stock must be adjusted for certain events that occur after purchase. Military tax deductions 2011 For example, if you receive more stock from nontaxable stock dividends or stock splits, you must reduce the basis of your original stock. Military tax deductions 2011 You must also reduce your basis when you receive nondividend distributions (discussed in chapter 1). Military tax deductions 2011 These distributions, up to the amount of your basis, are a nontaxable return of capital. Military tax deductions 2011 The IRS partners with companies that offer Form 8949 and Schedule D (Form 1040) software that can import trades from many brokerage firms and accounting software to help you keep track of your adjusted basis in securities. Military tax deductions 2011 To find out more, go to www. Military tax deductions 2011 irs. Military tax deductions 2011 gov/Filing/Filing-Options. Military tax deductions 2011 Identifying stock or bonds sold. Military tax deductions 2011   If you can adequately identify the shares of stock or the bonds you sold, their basis is the cost or other basis of the particular shares of stock or bonds. Military tax deductions 2011 Adequate identification. Military tax deductions 2011   You will make an adequate identification if you show that certificates representing shares of stock from a lot that you bought on a certain date or for a certain price were delivered to your broker or other agent. Military tax deductions 2011 Broker holds stock. Military tax deductions 2011   If you have left the stock certificates with your broker or other agent, you will make an adequate identification if you: Tell your broker or other agent the particular stock to be sold or transferred at the time of the sale or transfer, and Receive a written confirmation of this from your broker or other agent within a reasonable time. Military tax deductions 2011  Stock identified this way is the stock sold or transferred even if stock certificates from a different lot are delivered to the broker or other agent. Military tax deductions 2011 Single stock certificate. Military tax deductions 2011   If you bought stock in different lots at different times and you hold a single stock certificate for this stock, you will make an adequate identification if you: Tell your broker or other agent the particular stock to be sold or transferred when you deliver the certificate to your broker or other agent, and Receive a written confirmation of this from your broker or other agent within a reasonable time. Military tax deductions 2011   If you sell part of the stock represented by a single certificate directly to the buyer instead of through a broker, you will make an adequate identification if you keep a written record of the particular stock that you intend to sell. Military tax deductions 2011 Bonds. Military tax deductions 2011   These methods of identification also apply to bonds sold or transferred. Military tax deductions 2011 Identification not possible. Military tax deductions 2011   If you buy and sell securities at various times in varying quantities and you cannot adequately identify the shares you sell, the basis of the securities you sell is the basis of the securities you acquired first. Military tax deductions 2011 Except for certain mutual fund shares, discussed later, you cannot use the average price per share to figure gain or loss on the sale of the shares. Military tax deductions 2011 Example. Military tax deductions 2011 You bought 100 shares of stock of XYZ Corporation in 1998 for $10 a share. Military tax deductions 2011 In January 1999 you bought another 200 shares for $11 a share. Military tax deductions 2011 In July 1999 you gave your son 50 shares. Military tax deductions 2011 In December 2001 you bought 100 shares for $9 a share. Military tax deductions 2011 In April 2013 you sold 130 shares. Military tax deductions 2011 You cannot identify the shares you disposed of, so you must use the stock you acquired first to figure the basis. Military tax deductions 2011 The shares of stock you gave your son had a basis of $500 (50 × $10). Military tax deductions 2011 You figure the basis of the 130 shares of stock you sold in 2013 as follows: 50 shares (50 × $10) balance of stock bought in 1998 $ 500 80 shares (80 × $11) stock bought in January 1999 880 Total basis of stock sold in 2013 $1,380 Shares in a mutual fund or REIT. Military tax deductions 2011    The basis of shares in a mutual fund (or other regulated investment company) or a real estate investment trust (REIT) is generally figured in the same way as the basis of other stock and usually includes any commissions or load charges paid for the purchase. Military tax deductions 2011 Example. Military tax deductions 2011 You bought 100 shares of Fund A for $10 a share. Military tax deductions 2011 You paid a $50 commission to the broker for the purchase. Military tax deductions 2011 Your cost basis for each share is $10. Military tax deductions 2011 50 ($1,050 ÷ 100). Military tax deductions 2011 Commissions and load charges. Military tax deductions 2011   The fees and charges you pay to acquire or redeem shares of a mutual fund are not deductible. Military tax deductions 2011 You can usually add acquisition fees and charges to your cost of the shares and thereby increase your basis. Military tax deductions 2011 A fee paid to redeem the shares is usually a reduction in the redemption price (sales price). Military tax deductions 2011   You cannot add your entire acquisition fee or load charge to the cost of the mutual fund shares acquired if all of the following conditions apply. Military tax deductions 2011 You get a reinvestment right because of the purchase of the shares or the payment of the fee or charge. Military tax deductions 2011 You dispose of the shares within 90 days of the purchase date. Military tax deductions 2011 You acquire new shares in the same mutual fund or another mutual fund, for which the fee or charge is reduced or waived because of the reinvestment right you got when you acquired the original shares. Military tax deductions 2011   The amount of the original fee or charge in excess of the reduction in (3) is added to the cost of the original shares. Military tax deductions 2011 The rest of the original fee or charge is added to the cost basis of the new shares (unless all three conditions above also apply to the purchase of the new shares). Military tax deductions 2011 Choosing average basis for mutual fund shares. Military tax deductions 2011   You can choose to use the average basis of mutual fund shares if you acquired the identical shares at various times and prices, or you acquired the shares after 2010 in connection with a dividend reinvestment plan, and left them on deposit in an account kept by a custodian or agent. Military tax deductions 2011 The methods you can use to figure average basis are explained later. Military tax deductions 2011 Undistributed capital gains. Military tax deductions 2011   If you had to include in your income any undistributed capital gains of the mutual fund or REIT, increase your basis in the stock by the difference between the amount you included and the amount of tax paid for you by the fund or REIT. Military tax deductions 2011 See Undistributed capital gains of mutual funds and REITs under Capital Gain Distributions in chapter 1. Military tax deductions 2011 Reinvestment right. Military tax deductions 2011   This is the right to acquire mutual fund shares in the same or another mutual fund without paying a fee or load charge, or by paying a reduced fee or load charge. Military tax deductions 2011      The original cost basis of mutual fund shares you acquire by reinvesting your distributions is the amount of the distributions used to purchase each full or fractional share. Military tax deductions 2011 This rule applies even if the distribution is an exempt-interest dividend that you do not report as income. Military tax deductions 2011 Table 4-1. Military tax deductions 2011 This is a worksheet you can use to keep track of the adjusted basis of your mutual fund shares. Military tax deductions 2011 Enter the cost per share when you acquire new shares and any adjustments to their basis when the adjustment occurs. Military tax deductions 2011 This worksheet will help you figure the adjusted basis when you sell or redeem shares. Military tax deductions 2011 Table 4-1. Military tax deductions 2011 Mutual Fund Record Mutual Fund Acquired1 Adjustment to Basis Per Share Adjusted2 Basis Per Share Sold or redeemed Date Number of Shares Cost Per Share Date Number of Shares                                                                                                                                                                                                                                                                         1 Include share received from reinvestment of distributions. Military tax deductions 2011 2 Cost plus or minus adjustments. Military tax deductions 2011 Automatic investment service. Military tax deductions 2011   If you participate in an automatic investment service, your basis for each share of stock, including fractional shares, bought by the bank or other agent is the purchase price plus a share of the broker's commission. Military tax deductions 2011 Dividend reinvestment plans. Military tax deductions 2011   If you participate in a dividend reinvestment plan and receive stock from the corporation at a discount, your basis is the full fair market value of the stock on the dividend payment date. Military tax deductions 2011 You must include the amount of the discount in your income. Military tax deductions 2011 Public utilities. Military tax deductions 2011   If, before 1986, you excluded from income the value of stock you had received under a qualified public utility reinvestment plan, your basis in that stock is zero. Military tax deductions 2011 Stock dividends. Military tax deductions 2011   Stock dividends are distributions made by a corporation of its own stock. Military tax deductions 2011 Generally, stock dividends are not taxable to you. Military tax deductions 2011 However, see Distributions of Stock and Stock Rights under Dividends and Other Distributions in chapter 1 for some exceptions. Military tax deductions 2011 If the stock dividends are not taxable, you must divide your basis for the old stock between the old and new stock. Military tax deductions 2011 New and old stock identical. Military tax deductions 2011   If the new stock you received as a nontaxable dividend is identical to the old stock on which the dividend was declared, divide the adjusted basis of the old stock by the number of shares of old and new stock. Military tax deductions 2011 The result is your basis for each share of stock. Military tax deductions 2011 Example 1. Military tax deductions 2011 You owned one share of common stock that you bought for $45. Military tax deductions 2011 The corporation distributed two new shares of common stock for each share held. Military tax deductions 2011 You then had three shares of common stock. Military tax deductions 2011 Your basis in each share is $15 ($45 ÷ 3). Military tax deductions 2011 Example 2. Military tax deductions 2011 You owned two shares of common stock. Military tax deductions 2011 You bought one for $30 and the other for $45. Military tax deductions 2011 The corporation distributed two new shares of common stock for each share held. Military tax deductions 2011 You had six shares after the distribution—three with a basis of $10 each ($30 ÷ 3) and three with a basis of $15 each ($45 ÷ 3). Military tax deductions 2011 New and old stock not identical. Military tax deductions 2011   If the new stock you received as a nontaxable dividend is not identical to the old stock on which it was declared, the basis of the new stock is calculated differently. Military tax deductions 2011 Divide the adjusted basis of the old stock between the old and the new stock in the ratio of the fair market value of each lot of stock to the total fair market value of both lots on the date of distribution of the new stock. Military tax deductions 2011 Example. Military tax deductions 2011 You bought a share of common stock for $100. Military tax deductions 2011 Later, the corporation distributed a share of preferred stock for each share of common stock held. Military tax deductions 2011 At the date of distribution, your common stock had a fair market value of $150 and the preferred stock had a fair market value of $50. Military tax deductions 2011 You figure the basis of the old and new stock by dividing your $100 basis between them. Military tax deductions 2011 The basis of your common stock is $75 (($150 ÷ $200) × $100), and the basis of the new preferred stock is $25 (($50 ÷ $200) × $100). Military tax deductions 2011 Stock bought at various times. Military tax deductions 2011   Figure the basis of stock dividends received on stock you bought at various times and at different prices by allocating to each lot of stock the share of the stock dividends due to it. Military tax deductions 2011 Taxable stock dividends. Military tax deductions 2011   If your stock dividend is taxable when you receive it, the basis of your new stock is its fair market value on the date of distribution. Military tax deductions 2011 The basis of your old stock does not change. Military tax deductions 2011 Stock splits. Military tax deductions 2011   Figure the basis of stock splits in the same way as stock dividends if identical stock is distributed on the stock held. Military tax deductions 2011 Stock rights. Military tax deductions 2011   A stock right is a right to acquire a corporation's stock. Military tax deductions 2011 It may be exercised, it may be sold if it has a market value, or it may expire. Military tax deductions 2011 Stock rights are rarely taxable when you receive them. Military tax deductions 2011 See Distributions of Stock and Stock Rights under Dividends and Other Distributions in chapter 1. Military tax deductions 2011 Taxable stock rights. Military tax deductions 2011   If you receive stock rights that are taxable, the basis of the rights is their fair market value at the time of distribution. Military tax deductions 2011 The basis of the old stock does not change. Military tax deductions 2011 Nontaxable stock rights. Military tax deductions 2011   If you receive nontaxable stock rights and allow them to expire, they have no basis. Military tax deductions 2011   If you exercise or sell the nontaxable stock rights and if, at the time of distribution, the stock rights had a fair market value of 15% or more of the fair market value of the old stock, you must divide the adjusted basis of the old stock between the old stock and the stock rights. Military tax deductions 2011 Use a ratio of the fair market value of each to the total fair market value of both at the time of distribution. Military tax deductions 2011   If the fair market value of the stock rights was less than 15%, their basis is zero. Military tax deductions 2011 However, you can choose to divide the basis of the old stock between the old stock and the stock rights. Military tax deductions 2011 To make the choice, attach a statement to your return for the year in which you received the rights, stating that you choose to divide the basis of the stock. Military tax deductions 2011 Basis of new stock. Military tax deductions 2011   If you exercise the stock rights, the basis of the new stock is its cost plus the basis of the stock rights exercised. Military tax deductions 2011 Example. Military tax deductions 2011 You own 100 shares of ABC Company stock, which cost you $22 per share. Military tax deductions 2011 The ABC Company gave you 10 nontaxable stock rights that would allow you to buy 10 more shares at $26 per share. Military tax deductions 2011 At the time the stock rights were distributed, the stock had a market value of $30, not including the stock rights. Military tax deductions 2011 Each stock right had a market value of $3. Military tax deductions 2011 The market value of the stock rights was less than 15% of the market value of the stock, but you chose to divide the basis of your stock between the stock and the rights. Military tax deductions 2011 You figure the basis of the rights and the basis of the old stock as follows: 100 shares × $22 = $2,200, basis of old stock   100 shares × $30 = $3,000, market value of old stock   10 rights × $3 = $30, market value of rights   ($3,000 ÷ $3,030) × $2,200 = $2,178. Military tax deductions 2011 22, new basis of old stock   ($30 ÷ $3,030) × $2,200 = $21. Military tax deductions 2011 78, basis of rights   If you sell the rights, the basis for figuring gain or loss is $2. Military tax deductions 2011 18 ($21. Military tax deductions 2011 78 ÷ 10) per right. Military tax deductions 2011 If you exercise the rights, the basis of the stock you acquire is the price you pay ($26) plus the basis of the right exercised ($2. Military tax deductions 2011 18), or $28. Military tax deductions 2011 18 per share. Military tax deductions 2011 The remaining basis of the old stock is $21. Military tax deductions 2011 78 per share. Military tax deductions 2011 Investment property received in liquidation. Military tax deductions 2011   In general, if you receive investment property as a distribution in partial or complete liquidation of a corporation and if you recognize gain or loss when you acquire the property, your basis in the property is its fair market value at the time of the distribution. Military tax deductions 2011 S corporation stock. Military tax deductions 2011   You must increase your basis in stock of an S corporation by your pro rata share of the following items. Military tax deductions 2011 All income items of the S corporation, including tax-exempt income, that are separately stated and passed through to you as a shareholder. Military tax deductions 2011 The nonseparately stated income of the S corporation. Military tax deductions 2011 The amount of the deduction for depletion (other than oil and gas depletion) that is more than the basis of the property being depleted. Military tax deductions 2011   You must decrease your basis in stock of an S corporation by your pro rata share of the following items. Military tax deductions 2011 Distributions by the S corporation that were not included in your income. Military tax deductions 2011 All loss and deduction items of the S corporation that are separately stated and passed through to you. Military tax deductions 2011 Any nonseparately stated loss of the S corporation. Military tax deductions 2011 Any expense of the S corporation that is not deductible in figuring its taxable income and not properly chargeable to a capital account. Military tax deductions 2011 The amount of your deduction for depletion of oil and gas wells to the extent the deduction is not more than your share of the adjusted basis of the wells. Military tax deductions 2011 However, your basis in the stock cannot be reduced below zero. Military tax deductions 2011 Specialized small business investment company stock or partnership interest. Military tax deductions 2011   If you bought this stock or interest as replacement property for publicly traded securities you sold at a gain, you must reduce the basis of the stock or interest by the amount of any postponed gain on that sale. Military tax deductions 2011 See Rollover of Gain From Publicly Traded Securities , later. Military tax deductions 2011 Qualified small business stock. Military tax deductions 2011   If you bought this stock as replacement property for other qualified small business stock you sold at a gain, you must reduce the basis of this replacement stock by the amount of any postponed gain on the earlier sale. Military tax deductions 2011 See Gains on Qualified Small Business Stock , later. Military tax deductions 2011 Short sales. Military tax deductions 2011   If you cannot deduct payments you make to a lender in lieu of dividends on stock used in a short sale, the amount you pay to the lender is a capital expense, and you must add it to the basis of the stock used to close the short sale. Military tax deductions 2011   See Payments in lieu of dividends , later, for information about deducting payments in lieu of dividends. Military tax deductions 2011 Premiums on bonds. Military tax deductions 2011   If you buy a bond at a premium, the premium is treated as part of your basis in the bond. Military tax deductions 2011 If you choose to amortize the premium paid on a taxable bond, you must reduce the basis of the bond by the amortized part of the premium each year over the life of the bond. Military tax deductions 2011   Although you cannot deduct the premium on a tax-exempt bond, you must amortize it to determine your adjusted basis in the bond. Military tax deductions 2011 You must reduce the basis of the bond by the premium you amortized for the period you held the bond. Military tax deductions 2011   See Bond Premium Amortization in chapter 3 for more information. Military tax deductions 2011 Market discount on bonds. Military tax deductions 2011   If you include market discount on a bond in income currently, increase the basis of your bond by the amount of market discount you include in your income. Military tax deductions 2011 See Market Discount Bonds in chapter 1 for more information. Military tax deductions 2011 Bonds purchased at par value. Military tax deductions 2011   A bond purchased at par value (face amount) has no premium or discount. Military tax deductions 2011 When you sell or otherwise dispose of the bond, you figure the gain or loss by comparing the bond proceeds to the purchase price of the bond. Military tax deductions 2011 Example. Military tax deductions 2011 You purchased a bond several years ago for its par value of $10,000. Military tax deductions 2011 You sold the bond this year for $10,100. Military tax deductions 2011 You have a gain of $100. Military tax deductions 2011 However, if you had sold the bond for $9,900, you would have a loss of $100. Military tax deductions 2011 Acquisition discount on short-term obligations. Military tax deductions 2011   If you include acquisition discount on a short-term obligation in your income currently, increase the basis of the obligation by the amount of acquisition discount you include in your income. Military tax deductions 2011 See Discount on Short-Term Obligations in chapter 1 for more information. Military tax deductions 2011 Original issue discount (OID) on debt instruments. Military tax deductions 2011   Increase the basis of a debt instrument by the OID you include in your income. Military tax deductions 2011 See Original Issue Discount (OID) in chapter 1. Military tax deductions 2011 Discounted tax-exempt obligations. Military tax deductions 2011   OID on tax-exempt obligations is generally not taxable. Military tax deductions 2011 However, when you dispose of a tax-exempt obligation issued after September 3, 1982, that you acquired after March 1, 1984, you must accrue OID on the obligation to determine its adjusted basis. Military tax deductions 2011 The accrued OID is added to the basis of the obligation to determine your gain or loss. Military tax deductions 2011   For information on determining OID on a long-term obligation, see Debt Instruments Issued After July 1, 1982, and Before 1985 or Debt Instruments Issued After 1984, whichever applies, in Publication 1212 under Figuring OID on Long-Term Debt Instruments. Military tax deductions 2011   If the tax-exempt obligation has a maturity of 1 year or less, accrue OID under the rules for acquisition discount on short-term obligations. Military tax deductions 2011 See Discount on Short-Term Obligations in chapter 1. Military tax deductions 2011 Stripped tax-exempt obligation. Military tax deductions 2011   If you acquired a stripped tax-exempt bond or coupon after October 22, 1986, you must accrue OID on it to determine its adjusted basis when you dispose of it. Military tax deductions 2011 For stripped tax-exempt bonds or coupons acquired after June 10, 1987, part of this OID may be taxable. Military tax deductions 2011 You accrue the OID on these obligations in the manner described in chapter 1 under Stripped Bonds and Coupons . Military tax deductions 2011   Increase your basis in the stripped tax-exempt bond or coupon by the taxable and nontaxable accrued OID. Military tax deductions 2011 Also increase your basis by the interest that accrued (but was not paid and was not previously reflected in your basis) before the date you sold the bond or coupon. Military tax deductions 2011 In addition, for bonds acquired after June 10, 1987, add to your basis any accrued market discount not previously reflected in basis. Military tax deductions 2011 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. Military tax deductions 2011 Gain. Military tax deductions 2011   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. Military tax deductions 2011 Loss. Military tax deductions 2011   If the adjusted basis of the property you transfer is more than the amount you realize, the difference is a loss. Military tax deductions 2011 Amount realized. Military tax deductions 2011   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). Military tax deductions 2011 Amount realized includes the money you receive plus the fair market value of any property or services you receive. Military tax deductions 2011   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. Military tax deductions 2011 For more information, see Publication 537. Military tax deductions 2011   If a buyer of property issues a debt instrument to the seller of the property, the amount realized is determined by reference to the issue price of the debt instrument, which may or may not be the fair market value of the debt instrument. Military tax deductions 2011 See Regulations section 1. Military tax deductions 2011 1001-1(g). Military tax deductions 2011 However, if the debt instrument was previously issued by a third party (one not part of the sale transaction), the fair market value of the debt instrument is used to determine the amount realized. Military tax deductions 2011 Fair market value. Military tax deductions 2011   Fair market value is the price at which 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. Military tax deductions 2011 Example. Military tax deductions 2011 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. Military tax deductions 2011 Your gain is $3,000 ($10,000 – $7,000). Military tax deductions 2011 If you also receive a note for $6,000 that has an issue price of $6,000, your gain is $9,000 ($10,000 + $6,000 – $7,000). Military tax deductions 2011 Debt paid off. Military tax deductions 2011   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. Military tax deductions 2011 This is true even if neither you nor the buyer is personally liable for the debt. Military tax deductions 2011 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. Military tax deductions 2011 Example. Military tax deductions 2011 You sell stock that you had pledged as security for a bank loan of $8,000. Military tax deductions 2011 Your basis in the stock is $6,000. Military tax deductions 2011 The buyer pays off your bank loan and pays you $20,000 in cash. Military tax deductions 2011 The amount realized is $28,000 ($20,000 + $8,000). Military tax deductions 2011 Your gain is $22,000 ($28,000 – $6,000). Military tax deductions 2011 Payment of cash. Military tax deductions 2011   If you trade property and cash for other property, the amount you realize is the fair market value of the property you receive. Military tax deductions 2011 Determine your gain or loss by subtracting the cash you pay and the adjusted basis of the property you trade in from the amount you realize. Military tax deductions 2011 If the result is a positive number, it is a gain. Military tax deductions 2011 If the result is a negative number, it is a loss. Military tax deductions 2011 No gain or loss. Military tax deductions 2011   You may have to use a basis for figuring gain that is different from the basis used for figuring loss. Military tax deductions 2011 In this case, you may have neither a gain nor a loss. Military tax deductions 2011 See No gain or loss in the discussion on the basis of property you received as a gift under Basis Other Than Cost, earlier. Military tax deductions 2011 Special Rules for Mutual Funds To figure your gain or loss when you dispose of mutual fund shares, you need to determine which shares were sold and the basis of those shares. Military tax deductions 2011 If your shares in a mutual fund were acquired all on the same day and for the same price, figuring their basis is not difficu