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Students Exempt From Income Tax

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Students Exempt From Income Tax

Students exempt from income tax 5. Students exempt from income tax   Table and Worksheets for the Self-Employed Table of Contents Community property laws. Students exempt from income tax As discussed in chapters 2 and 4, if you are self-employed, you must use the rate table or rate worksheet and deduction worksheet to figure your deduction for contributions you made for yourself to a SEP-IRA or qualified plan. Students exempt from income tax First, use either the rate table or rate worksheet to find your reduced contribution rate. Students exempt from income tax Then complete the deduction worksheet to figure your deduction for contributions. Students exempt from income tax The table and the worksheets in chapter 5 apply only to self-employed individuals who have only one defined contribution plan, such as a profit-sharing plan. Students exempt from income tax A SEP plan is treated as a profit-sharing plan. Students exempt from income tax However, do not use this worksheet for SARSEPs. Students exempt from income tax Rate table for self-employed. Students exempt from income tax   If your plan's contribution rate is a whole percentage (for example, 12% rather than 12½%), you can use the table on the next page to find your reduced contribution rate. Students exempt from income tax Otherwise, use the rate worksheet provided below. Students exempt from income tax   First, find your plan contribution rate (the contribution rate stated in your plan) in Column A of the table. Students exempt from income tax Then read across to the rate under Column B. Students exempt from income tax Enter the rate from Column B in step 4 of the Deduction Worksheet for Self-Employed on this page. Students exempt from income tax    Example. Students exempt from income tax You are a sole proprietor with no employees. Students exempt from income tax If your plan's contribution rate is 10% of a participant's compensation, your rate is 0. Students exempt from income tax 090909. Students exempt from income tax Enter this rate in step 4 of the Deduction Worksheet for Self-Employed on this page. Students exempt from income tax Deduction Worksheet for Self-Employed   Step 1           Enter your net profit from line 31, Schedule C (Form 1040); line 3, Schedule C-EZ (Form 1040); line 34, Schedule F (Form 1040)*; or box 14, code A**, Schedule K-1 (Form 1065)*. Students exempt from income tax For information on other income included in net profit from self-employment, see the Instructions for Schedule SE, Form 1040. Students exempt from income tax       *Reduce this amount by any amount reported on Schedule SE (Form 1040), line 1b. Students exempt from income tax       **General partners should reduce this amount by the same additional expenses subtracted from box 14, code A to determine the amount on line 1 or 2 of Schedule SE. Students exempt from income tax     Step 2           Enter your deduction for self-employment tax from Form 1040, line 27             Step 3           Net earnings from self-employment. Students exempt from income tax Subtract step 2 from step 1     Step 4           Enter your rate from the Rate Table for Self-Employed or Rate Worksheet for Self-Employed     Step 5           Multiply step 3 by step 4     Step 6           Multiply $255,000 by your plan contribution rate (not the reduced rate)     Step 7           Enter the smaller of step 5 or step 6     Step 8           Contribution dollar limit $51,000     • If you made any elective deferrals to your self-employed plan, go to step 9. Students exempt from income tax         • Otherwise, skip steps 9 through 20 and enter the smaller of step 7 or step 8 on step 21. Students exempt from income tax       Step 9           Enter your allowable elective deferrals (including designated Roth contributions) made to your self-employed plan during 2013. Students exempt from income tax Do not enter more than $17,500     Step 10           Subtract step 9 from step 8     Step 11           Subtract step 9 from step 3       Step 12           Enter one-half of step 11     Step 13           Enter the smallest of step 7, 10, or 12     Step 14           Subtract step 13 from step 3     Step 15           Enter the smaller of step 9 or step 14       • If you made catch-up contributions, go to step 16. Students exempt from income tax         • Otherwise, skip steps 16 through 18 and go to step 19. Students exempt from income tax       Step 16           Subtract step 15 from step 14     Step 17           Enter your catch-up contributions (including designated Roth contributions), if any. Students exempt from income tax Do not enter more than $5,500     Step 18           Enter the smaller of step 16 or step 17     Step 19           Add steps 13, 15, and 18. Students exempt from income tax     Step 20           Enter the amount of designated Roth contributions included on lines 9 and 17. Students exempt from income tax     Step 21           Subtract step 20 from step 19. Students exempt from income tax This is your maximum deductible contribution. Students exempt from income tax                 Next: Enter your actual contribution, not to exceed your maximum deductible contribution, on Form 1040, line 28. Students exempt from income tax   Rate worksheet for self-employed. Students exempt from income tax   If your plan's contribution rate is not a whole percentage (for example, 10½%), you cannot use the Rate Table for Self-Employed. Students exempt from income tax Use the following worksheet instead. Students exempt from income tax Rate Worksheet for Self-Employed 1) Plan contribution rate as a decimal (for example, 10½% = 0. Students exempt from income tax 105)   2) Rate in line 1 plus 1 (for example, 0. Students exempt from income tax 105 + 1 = 1. Students exempt from income tax 105)   3) Self-employed rate as a decimal rounded to at least 3 decimal places (line 1 ÷ line 2) (for example, 0. Students exempt from income tax 105 ÷ 1. Students exempt from income tax 105 = 0. Students exempt from income tax 095)   Figuring your deduction. Students exempt from income tax   Now that you have your self-employed rate from either the rate table or rate worksheet, you can figure your maximum deduction for contributions for yourself by completing the Deduction Worksheet for Self-Employed. Students exempt from income tax Community property laws. Students exempt from income tax   If you reside in a community property state and you are married and filing a separate return, disregard community property laws for step 1 of the Deduction Worksheet for Self-Employed. Students exempt from income tax Enter on step 1 the total net profit you actually earned. Students exempt from income tax Rate Table for Self-Employed Column A  If the plan contri- bution rate is: (shown as %) Column B  Your rate is: (shown as decimal) 1 . Students exempt from income tax 009901 2 . Students exempt from income tax 019608 3 . Students exempt from income tax 029126 4 . Students exempt from income tax 038462 5 . Students exempt from income tax 047619 6 . Students exempt from income tax 056604 7 . Students exempt from income tax 065421 8 . Students exempt from income tax 074074 9 . Students exempt from income tax 082569 10 . Students exempt from income tax 090909 11 . Students exempt from income tax 099099 12 . Students exempt from income tax 107143 13 . Students exempt from income tax 115044 14 . Students exempt from income tax 122807 15 . Students exempt from income tax 130435 16 . Students exempt from income tax 137931 17 . Students exempt from income tax 145299 18 . Students exempt from income tax 152542 19 . Students exempt from income tax 159664 20 . Students exempt from income tax 166667 21 . Students exempt from income tax 173554 22 . Students exempt from income tax 180328 23 . Students exempt from income tax 186992 24 . Students exempt from income tax 193548 25* . Students exempt from income tax 200000* *The deduction for annual employer contributions (other than elective deferrals) to a SEP plan, a profit-sharing plan, or a money purchase plan cannot be more than 20% of your net earnings (figured without deducting contributions for yourself) from the business that has the plan. Students exempt from income tax Example. Students exempt from income tax You are a sole proprietor with no employees. Students exempt from income tax The terms of your plan provide that you contribute 8½% (. Students exempt from income tax 085) of your compensation to your plan. Students exempt from income tax Your net profit from line 31, Schedule C (Form 1040) is $200,000. Students exempt from income tax You have no elective deferrals or catch-up contributions. Students exempt from income tax Your self-employment tax deduction on line 27 of Form 1040 is $9,728. Students exempt from income tax See the filled-in portions of both Schedule SE (Form 1040), Self-Employment Income, and Form 1040, later. Students exempt from income tax You figure your self-employed rate and maximum deduction for employer contributions you made for yourself as follows. Students exempt from income tax Deduction Worksheet for Self-Employed   Step 1           Enter your net profit from line 31, Schedule C (Form 1040); line 3, Schedule C-EZ (Form 1040); line 34, Schedule F (Form 1040)*; or box 14, code A**, Schedule K-1 (Form 1065)*. Students exempt from income tax For information on other income included in net profit from self-employment, see the Instructions for Schedule SE, Form 1040. Students exempt from income tax $200,000     *Reduce this amount by any amount reported on Schedule SE (Form 1040), line 1b. Students exempt from income tax       **General partners should reduce this amount by the same additional expenses subtracted from box 14, code A to determine the amount on line 1 or 2 of Schedule SE. Students exempt from income tax     Step 2           Enter your deduction for self-employment tax from Form 1040, line 27 9,728           Step 3           Net earnings from self-employment. Students exempt from income tax Subtract step 2 from step 1 190,272   Step 4           Enter your rate from the Rate Table for Self-Employed or Rate Worksheet for Self-Employed 0. Students exempt from income tax 078   Step 5           Multiply step 3 by step 4 14,841   Step 6           Multiply $255,000 by your plan contribution rate (not the reduced rate) 21,675   Step 7           Enter the smaller of step 5 or step 6 14,841   Step 8           Contribution dollar limit $51,000     • If you made any elective deferrals to your self-employed plan, go to step 9. Students exempt from income tax         • Otherwise, skip steps 9 through 20 and enter the smaller of step 7 or step 8 on step 21. Students exempt from income tax       Step 9           Enter your allowable elective deferrals (including designated Roth contributions) made to your self-employed plan during 2013. Students exempt from income tax Do not enter more than $17,500 N/A   Step 10           Subtract step 9 from step 8     Step 11           Subtract step 9 from step 3       Step 12           Enter one-half of step 11     Step 13           Enter the smallest of step 7, 10, or 12     Step 14           Subtract step 13 from step 3     Step 15           Enter the smaller of step 9 or step 14       • If you made catch-up contributions, go to step 16. Students exempt from income tax         • Otherwise, skip steps 16 through 18 and go to step 19. Students exempt from income tax       Step 16           Subtract step 15 from step 14     Step 17           Enter your catch-up contributions (including designated Roth contributions), if any. Students exempt from income tax Do not enter more than $5,500     Step 18           Enter the smaller of step 16 or step 17     Step 19           Add steps 13, 15, and 18. Students exempt from income tax     Step 20           Enter the amount of designated Roth contributions included on lines 9 and 17     Step 21           Subtract step 20 from step 19. Students exempt from income tax This is your maximum deductible contribution $14,841                 Next: Enter your actual contribution, not to exceed your maximum deductible contribution, on Form 1040, line 28. Students exempt from income tax   See the filled-in Deduction Worksheet for Self-Employed on this page. Students exempt from income tax Rate Worksheet for Self-Employed 1) Plan contribution rate as a decimal (for example, 10½% = 0. Students exempt from income tax 105) 0. Students exempt from income tax 085 2) Rate in line 1 plus 1 (for example, 0. Students exempt from income tax 105 + 1 = 1. Students exempt from income tax 105) 1. Students exempt from income tax 085 3) Self-employed rate as a decimal rounded to at least 3 decimal places (line 1 ÷ line 2) (for example, 0. Students exempt from income tax 105 ÷ 1. Students exempt from income tax 105 = 0. Students exempt from income tax 095) 0. Students exempt from income tax 078 This image is too large to be displayed in the current screen. Students exempt from income tax Please click the link to view the image. Students exempt from income tax Portion of Form 1040 and Portion of Schedule SE Prev  Up  Next   Home   More Online Publications
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Taxpayer Identification Numbers (TIN)

A Taxpayer Identification Number (TIN) is an identification number used by the Internal Revenue Service (IRS) in the administration of tax laws. It is issued either by the Social Security Administration (SSA) or by the IRS. A Social Security number (SSN) is issued by the SSA whereas all other TINs are issued by the IRS.
 

Taxpayer Identification Numbers

  • Social Security Number "SSN"
  • Employer Identification Number "EIN"
  • Individual Taxpayer Identification Number "ITIN"
  • Taxpayer Identification Number for Pending U.S. Adoptions "ATIN"
  • Preparer Taxpayer Identification Number "PTIN"
Note: The temporary IRS Numbers previously assigned are no longer valid.

Do I Need One?

A TIN must be furnished on returns, statements, and other tax related documents. For example a number must be furnished:

  • When filing your tax returns.
  • When claiming treaty benefits.

A TIN must be on a withholding certificate if the beneficial owner is claiming any of the following:

  • Tax treaty benefits (other than for income from marketable securities)
  • Exemption for effectively connected income
  • Exemption for certain annuities

When Claiming Exemptions for Dependent or Spouse:

You generally must list on your individual income tax return the social security number (SSN) of any person for whom you claim an exemption. If your dependent or spouse does not have and is not eligible to get an SSN, you must list the ITIN instead of an SSN. You do not need an SSN or ITIN for a child who was born and died in the same tax year. Instead of an SSN or ITIN, attach a copy of the child's birth certificate and write Died on the appropriate exemption line of your tax return.

How Do I Get A TIN?

SSN

You will need to complete Form SS-5, Application for a Social Security Card (PDF). You also must submit evidence of your identity, age, and U.S. citizenship or lawful alien status. For more information please see the Social Security web site.

Form SS-5 is also available by calling 1-800-772-1213 or visiting your local Social Security office. These services are free.

EIN

An Employer Identification Number (EIN) is also known as a federal tax identification number, and is used to identify a business entity. It is also used by estates and trusts which have income which is required to be reported on Form 1041, U.S. Income Tax Return for Estates and Trusts (PDF). Refer to Employer ID Numbers for more information.

The following form is available only to employers located in Puerto Rico, Solicitud de Número de Identificación Patronal (EIN) SS-4PR (PDF).

ITIN

An ITIN, or Individual Taxpayer Identification Number, is a tax processing number only available for certain nonresident and resident aliens, their spouses, and dependents who cannot get a Social Security Number (SSN). It is a 9-digit number, beginning with the number "9", formatted like an SSN (NNN-NN-NNNN).

To obtain an ITIN, you must complete IRS Form W-7, IRS Application for Individual Taxpayer Identification Number (PDF) . The Form W-7 requires documentation substantiating foreign/alien status and true identity for each individual. You may either mail the documentation, along with the Form W-7, to the address shown in the Form W-7 Instructions, present it at IRS walk-in offices, or process your application through an Acceptance Agent authorized by the IRS. Form W-7(SP), Solicitud de Número de Identificación Personal del Contribuyente del Servicio de Impuestos Internos (PDF) is available for use by Spanish speakers.

Acceptance Agents are entities (colleges, financial institutions, accounting firms, etc.) who are authorized by the IRS to assist applicants in obtaining ITINs. They review the applicant's documentation and forward the completed Form W-7 to IRS for processing.

NOTE: You cannot claim the earned income credit using an ITIN.

Foreign persons who are individuals should apply for a social security number (SSN, if permitted) on Form SS-5 with the Social Security Administration, or should apply for an Individual Taxpayer Identification Number (ITIN) on Form W-7. Effective immediately, each ITIN applicant must now:

  • Apply using the revised Form W-7, Application for IRS Individual Taxpayer Identification Number; and
  • Attach a federal income tax return to the Form W-7.

Applicants who meet one of the exceptions to the requirement to file a tax return (see the Instructions for Form W-7) must provide documentation to support the exception.

New W-7/ITIN rules were issued on December 17, 2003. For a summary of those rules, please see the new Form W-7 and its instructions.

For more detailed information on ITINs, refer to:

ATIN

An Adoption Taxpayer Identification Number (ATIN) is a temporary nine-digit number issued by the IRS to individuals who are in the process of legally adopting a U.S. citizen or resident child but who cannot get an SSN for that child in time to file their tax return.

Form W-7A, Application for Taxpayer Identification Number for Pending U.S. Adoptions (PDF) is used to apply for an ATIN. (NOTE: Do not use Form W-7A if the child is not a U.S. citizen or resident.)

PTIN

Beginning January 1, 2011, if you are a paid tax preparer you must use a valid Preparer Tax Identification Number (PTIN) on returns you prepare. Use of the PTIN no longer is optional. If you do not have a PTIN, you must get one by using the new IRS sign-up system. Even if you have a PTIN but you received it prior to September 28, 2010, you must apply for a new or renewed PTIN by using the new system. If all your authentication information matches, you may be issued the same number. You must have a PTIN if you, for compensation, prepare all or substantially all of any federal tax return or claim for refund.

If you do not want to apply for a PTIN online, use Form W-12, IRS Paid Preparer Tax Identification Number Application (PDF). The paper application will take 4-6 weeks to process.

If you are a foreign preparer who is unable to get a U.S. Social Security Number, please see the instructions on New Requirements for Tax Return Preparers: Frequently Asked Questions.

Foreign Persons and IRS Employer Identification Numbers

Foreign entities that are not individuals (i.e., foreign corporations, etc.) and that are required to have a federal Employer Identification Number (EIN) in order to claim an exemption from withholding because of a tax treaty (claimed on Form W-8BEN), need to submit Form SS-4 Application for Employer Identification Number to the Internal Revenue Service in order to apply for such an EIN. Those foreign entities filing Form SS-4 for the purpose of obtaining an EIN in order to claim a tax treaty exemption and which otherwise have no requirements to file a U.S. income tax return, employment tax return, or excise tax return, should comply with the following special instructions when filling out Form SS-4. When completing line 7b of Form SS-4, the applicant should write "N/A" in the block asking for an SSN or ITIN, unless the applicant already has an SSN or ITIN. When answering question 10 on Form SS-4, the applicant should check the "other" block and write or type in immediately after it one of the following phrases as most appropriate:

"For W-8BEN Purposes Only"
"For Tax Treaty Purposes Only"
"Required under Reg. 1.1441-1(e)(4)(viii)"
"897(i) Election"

If questions 11 through 17 on Form SS-4 do not apply to the applicant because he has no U.S. tax return filing requirement, such questions should be annotated "N/A". A foreign entity that completes Form SS-4 in the manner described above should be entered into IRS records as not having a filing requirement for any U.S. tax returns. However, if the foreign entity receives a letter from the IRS soliciting the filing of a U.S. tax return, the foreign entity should respond to the letter immediately by stating that it has no requirement to file any U.S. tax returns. Failure to respond to the IRS letter may result in a procedural assessment of tax by the IRS against the foreign entity. If the foreign entity later becomes liable to file a U.S. tax return, the foreign entity should not apply for a new EIN, but should instead use the EIN it was first issued on all U.S. tax returns filed thereafter.

To expedite the issuance of an EIN for a foreign entity, please call (267) 941-1099. This is not a toll-free call.

References/Related Topics

Page Last Reviewed or Updated: 17-Jan-2014

The Students Exempt From Income Tax

Students exempt from income tax 16. Students exempt from income tax   Reporting Gains and Losses Table of Contents What's New Introduction Useful Items - You may want to see: Reporting Capital Gains and Losses Exception 1. Students exempt from income tax Exception 2. Students exempt from income tax File Form 1099-B or Form 1099-S with the IRS. Students exempt from income tax Capital Losses Capital Gain Tax Rates What's New Maximum capital gain rates. Students exempt from income tax . Students exempt from income tax  For 2013, the maximum capital gain rates are 0%, 15%, 20%, 25%, and 28%. Students exempt from income tax Introduction This chapter discusses how to report capital gains and losses from sales, exchanges, and other dispositions of investment property on Form 8949 and Schedule D (Form 1040). Students exempt from income tax The discussion includes the following topics. Students exempt from income tax How to report short-term gains and losses. Students exempt from income tax How to report long-term gains and losses. Students exempt from income tax How to figure capital loss carryovers. Students exempt from income tax How to figure your tax on a net capital gain. Students exempt from income tax If you sell or otherwise dispose of property used in a trade or business or for the production of income, see Publication 544, Sales and Other Dispositions of Assets, before completing Schedule D (Form 1040). Students exempt from income tax Useful Items - You may want to see: Publication 537 Installment Sales 544 Sales and Other Dispositions of Assets 550 Investment Income and Expenses Form (and Instructions) 4797 Sales of Business Property 6252 Installment Sale Income 8582 Passive Activity Loss Limitations 8949 Sales and Other Dispositions of Capital Assets Schedule D (Form 1040) Capital Gains and Losses Reporting Capital Gains and Losses Generally, report capital gains and losses on Form 8949. Students exempt from income tax Complete Form 8949 before you complete line 1b, 2, 3, 8b, 9, or 10 of Schedule D (Form 1040). Students exempt from income tax Use Form 8949 to report: The sale or exchange of a capital asset not reported on another form or schedule; Gains from involuntary conversions (other than from casualty or theft) of capital assets not held for business or profit; and Nonbusiness bad debts. Students exempt from income tax Use Schedule D (Form 1040): To figure the overall gain or loss from transactions reported on Form 8949; To report a gain from Form 6252 or Part I of Form 4797; To report a gain or loss from Form 4684, 6781, or 8824; To report capital gain distributions not reported directly on Form 1040 or Form 1040A; To report a capital loss carryover from the previous tax year to the current tax year; To report your share of a gain or (loss) from a partnership, S corporation, estate, or trust; To report transactions reported to you on a Form 1099-B (or substitute statement) showing basis was reported to the IRS and to which none of the Form 8949 adjustments or codes apply; and To report undistributed long-term capital gains from Form 2439. Students exempt from income tax On Form 8949, enter all sales and exchanges of capital assets, including stocks, bonds, etc. Students exempt from income tax , and real estate (if not reported on Form 4684, 4797, 6252, 6781, 8824, or line 1a or 8a of Schedule D). Students exempt from income tax Include these transactions even if you did not receive a Form 1099-B or 1099-S (or substitute statement) for the transaction. Students exempt from income tax Report short-term gains or losses in Part I. Students exempt from income tax Report long-term gains or losses in Part II. Students exempt from income tax Use as many Forms 8949 as you need. Students exempt from income tax Exceptions to filing Form 8949 and Schedule D (Form 1040). Students exempt from income tax   There are certain situations where you may not have to file Form 8949 and/or Schedule D (Form 1040). Students exempt from income tax Exception 1. Students exempt from income tax   You do not have to file Form 8949 or Schedule D (Form 1040) if you have no capital losses and your only capital gains are capital gain distributions from Form(s) 1099-DIV, box 2a (or substitute statements). Students exempt from income tax (If any Form(s) 1099-DIV (or substitute statements) you receive have an amount in box 2b (unrecaptured section 1250 gain), box 2c (section 1202 gain), or box 2d (collectibles (28%) gain), you do not qualify for this exception. Students exempt from income tax ) If you qualify for this exception, report your capital gain distributions directly on line 13 of Form 1040 (and check the box on line 13). Students exempt from income tax Also use the Qualified Dividends and Capital Gain Tax Worksheet in the Form 1040 instructions to figure your tax. Students exempt from income tax You can report your capital gain distributions on line 10 of Form 1040A, instead of on Form 1040, if none of the Forms 1099-DIV (or substitute statements) you received have an amount in box 2b, 2c, or 2d, and you do not have to file Form 1040. Students exempt from income tax Exception 2. Students exempt from income tax   You must file Schedule D (Form 1040), but generally do not have to file Form 8949, if Exception 1 does not apply and your only capital gains and losses are: Capital gain distributions; A capital loss carryover; A gain from Form 2439 or 6252 or Part I of Form 4797; A gain or loss from Form 4684, 6781, or 8824; A gain or loss from a partnership, S corporation, estate, or trust; or Gains and losses from transactions for which you received a Form 1099-B (or substitute statement) that shows the basis was reported to the IRS and for which you do not need to make any adjustments in column (g) of Form 8949 or enter any codes in column (f) of Form 8949. Students exempt from income tax Installment sales. Students exempt from income tax   You cannot use the installment method to report a gain from the sale of stock or securities traded on an established securities market. Students exempt from income tax You must report the entire gain in the year of sale (the year in which the trade date occurs). Students exempt from income tax Passive activity gains and losses. Students exempt from income tax    If you have gains or losses from a passive activity, you may also have to report them on Form 8582. Students exempt from income tax In some cases, the loss may be limited under the passive activity rules. Students exempt from income tax Refer to Form 8582 and its instructions for more information about reporting capital gains and losses from a passive activity. Students exempt from income tax Form 1099-B transactions. Students exempt from income tax   If you sold property, such as stocks, bonds, or certain commodities, through a broker, you should receive Form 1099-B or substitute statement from the broker. Students exempt from income tax Use the Form 1099-B or the substitute statement to complete Form 8949. Students exempt from income tax If you sold a covered security in 2013, your broker should send you a Form 1099-B (or substitute statement) that shows your basis. Students exempt from income tax This will help you complete Form 8949. Students exempt from income tax Generally, a covered security is a security you acquired after 2010. Students exempt from income tax   Report the gross proceeds shown in box 2a of Form 1099-B as the sales price in column (d) of either Part I or Part II of Form 8949, whichever applies. Students exempt from income tax However, if the broker advises you, in box 2a of Form 1099-B, that gross proceeds (sales price) less commissions and option premiums were reported to the IRS, enter that net sales price in column (d) of either Part I or Part II of Form 8949, whichever applies. Students exempt from income tax    Include in column (g) any expense of sale, such as broker's fees, commissions, state and local transfer taxes, and option premiums, unless you reported the net sales price in column (d). Students exempt from income tax If you include an expense of sale in column (g), enter “E” in column (f). Students exempt from income tax Form 1099-CAP transactions. Students exempt from income tax   If a corporation in which you own stock has had a change in control or a substantial change in capital structure, you should receive Form 1099-CAP or a substitute statement from the corporation. Students exempt from income tax Use the Form 1099-CAP or substitute statement to fill in Form 8949. Students exempt from income tax If your computations show that you would have a loss because of the change, do not enter any amounts on Form 8949 or Schedule D (Form 1040). Students exempt from income tax You cannot claim a loss on Schedule D (Form 1040) as a result of this transaction. Students exempt from income tax   Report the aggregate amount received shown in box 2 of Form 1099-CAP as the sales price in column (d) of either Part I or Part II of Form 8949, whichever applies. Students exempt from income tax Form 1099-S transactions. Students exempt from income tax   If you sold or traded reportable real estate, you generally should receive from the real estate reporting person a Form 1099-S showing the gross proceeds. Students exempt from income tax    “Reportable real estate” is defined as any present or future ownership interest in any of the following: Improved or unimproved land, including air space; Inherently permanent structures, including any residential, commercial, or industrial building; A condominium unit and its accessory fixtures and common elements, including land; and Stock in a cooperative housing corporation (as defined in section 216 of the Internal Revenue Code). Students exempt from income tax   A “real estate reporting person” could include the buyer's attorney, your attorney, the title or escrow company, a mortgage lender, your broker, the buyer's broker, or the person acquiring the biggest interest in the property. Students exempt from income tax   Your Form 1099-S will show the gross proceeds from the sale or exchange in box 2. Students exempt from income tax See the Instructions for Form 8949 and the Instructions for Schedule D (Form 1040) for how to report these transactions and include them in Part I or Part II of Form 8949 as appropriate. Students exempt from income tax However, report like-kind exchanges on Form 8824 instead. Students exempt from income tax   It is unlawful for any real estate reporting person to separately charge you for complying with the requirement to file Form 1099-S. Students exempt from income tax Nominees. Students exempt from income tax   If you receive gross proceeds as a nominee (that is, the gross proceeds are in your name but actually belong to someone else), see the Instructions for Form 8949 for how to report these amounts on Form 8949. Students exempt from income tax File Form 1099-B or Form 1099-S with the IRS. Students exempt from income tax   If you received gross proceeds as a nominee in 2013, you must file a Form 1099-B or Form 1099-S for those proceeds with the IRS. Students exempt from income tax Send the Form 1099-B or Form 1099-S with a Form 1096, Annual Summary and Transmittal of U. Students exempt from income tax S. Students exempt from income tax Information Returns, to your Internal Revenue Service Center by February 28, 2014 (March 31, 2014, if you file Form 1099-B or Form 1099-S electronically). Students exempt from income tax Give the actual owner of the proceeds Copy B of the Form 1099-B or Form 1099-S by February 18, 2014. Students exempt from income tax On Form 1099-B, you should be listed as the “Payer. Students exempt from income tax ” The other owner should be listed as the “Recipient. Students exempt from income tax ” On Form 1099-S, you should be listed as the “Filer. Students exempt from income tax ” The other owner should be listed as the “Transferor. Students exempt from income tax ” You do not have to file a Form 1099-B or Form 1099-S to show proceeds for your spouse. Students exempt from income tax For more information about the reporting requirements and the penalties for failure to file (or furnish) certain information returns, see the General Instructions for Certain Information Returns. Students exempt from income tax If you are filing electronically see Publication 1220. Students exempt from income tax Sale of property bought at various times. Students exempt from income tax   If you sell a block of stock or other property that you bought at various times, report the short-term gain or loss from the sale on one row in Part I of Form 8949, and the long-term gain or loss on one row in Part II of Form 8949. Students exempt from income tax Write “Various” in column (b) for the “Date acquired. Students exempt from income tax ” Sale expenses. Students exempt from income tax    On Form 8949, include in column (g) any expense of sale, such as broker's fees, commissions, state and local transfer taxes, and option premiums, unless you reported the net sales price in column (d). Students exempt from income tax If you include an expense of sale in column (g), enter “E” in column (f). Students exempt from income tax   For more information about adjustments to basis, see chapter 13. Students exempt from income tax Short-term gains and losses. Students exempt from income tax   Capital gain or loss on the sale or trade of investment property held 1 year or less is a short-term capital gain or loss. Students exempt from income tax You report it in Part I of Form 8949. Students exempt from income tax   You combine your share of short-term capital gain or loss from partnerships, S corporations, estates, and trusts, and any short-term capital loss carryover, with your other short-term capital gains and losses to figure your net short-term capital gain or loss on line 7 of Schedule D (Form 1040). Students exempt from income tax Long-term gains and losses. Students exempt from income tax    A capital gain or loss on the sale or trade of investment property held more than 1 year is a long-term capital gain or loss. Students exempt from income tax You report it in Part II of Form 8949. Students exempt from income tax   You report the following in Part II of Schedule D (Form 1040): Undistributed long-term capital gains from a mutual fund (or other regulated investment company) or real estate investment trust (REIT); Your share of long-term capital gains or losses from partnerships, S corporations, estates, and trusts; All capital gain distributions from mutual funds and REITs not reported directly on line 10 of Form 1040A or line 13 of Form 1040; and Long-term capital loss carryovers. Students exempt from income tax    The result after combining these items with your other long-term capital gains and losses is your net long-term capital gain or loss (Schedule D (Form 1040), line 15). Students exempt from income tax Total net gain or loss. Students exempt from income tax   To figure your total net gain or loss, combine your net short-term capital gain or loss (Schedule D (Form 1040), line 7) with your net long-term capital gain or loss (Schedule D (Form 1040), line 15). Students exempt from income tax Enter the result on Schedule D (Form 1040), Part III, line 16. Students exempt from income tax If your losses are more than your gains, see Capital Losses , next. Students exempt from income tax If both lines 15 and 16 of your Schedule D (Form 1040) are gains and your taxable income on your Form 1040 is more than zero, see Capital Gain Tax Rates , later. Students exempt from income tax Capital Losses If your capital losses are more than your capital gains, you can claim a capital loss deduction. Students exempt from income tax Report the amount of the deduction on line 13 of Form 1040, in parentheses. Students exempt from income tax Limit on deduction. Students exempt from income tax   Your allowable capital loss deduction, figured on Schedule D (Form 1040), is the lesser of: $3,000 ($1,500 if you are married and file a separate return); or Your total net loss as shown on line 16 of Schedule D (Form 1040). Students exempt from income tax   You can use your total net loss to reduce your income dollar for dollar, up to the $3,000 limit. Students exempt from income tax Capital loss carryover. Students exempt from income tax   If you have a total net loss on line 16 of Schedule D (Form 1040) that is more than the yearly limit on capital loss deductions, you can carry over the unused part to the next year and treat it as if you had incurred it in that next year. Students exempt from income tax If part of the loss is still unused, you can carry it over to later years until it is completely used up. Students exempt from income tax   When you figure the amount of any capital loss carryover to the next year, you must take the current year's allowable deduction into account, whether or not you claimed it and whether or not you filed a return for the current year. Students exempt from income tax   When you carry over a loss, it remains long term or short term. Students exempt from income tax A long-term capital loss you carry over to the next tax year will reduce that year's long-term capital gains before it reduces that year's short-term capital gains. Students exempt from income tax Figuring your carryover. Students exempt from income tax   The amount of your capital loss carryover is the amount of your total net loss that is more than the lesser of: Your allowable capital loss deduction for the year; or Your taxable income increased by your allowable capital loss deduction for the year and your deduction for personal exemptions. Students exempt from income tax   If your deductions are more than your gross income for the tax year, use your negative taxable income in computing the amount in item (2). Students exempt from income tax    Complete the Capital Loss Carryover Worksheet in the Instructions for Schedule D or Publication 550 to determine the part of your capital loss that you can carry over. Students exempt from income tax Example. Students exempt from income tax Bob and Gloria sold securities in 2013. Students exempt from income tax The sales resulted in a capital loss of $7,000. Students exempt from income tax They had no other capital transactions. Students exempt from income tax Their taxable income was $26,000. Students exempt from income tax On their joint 2013 return, they can deduct $3,000. Students exempt from income tax The unused part of the loss, $4,000 ($7,000 − $3,000), can be carried over to 2014. Students exempt from income tax If their capital loss had been $2,000, their capital loss deduction would have been $2,000. Students exempt from income tax They would have no carryover. Students exempt from income tax Use short-term losses first. Students exempt from income tax   When you figure your capital loss carryover, use your short-term capital losses first, even if you incurred them after a long-term capital loss. Students exempt from income tax If you have not reached the limit on the capital loss deduction after using the short-term capital losses, use the long-term capital losses until you reach the limit. Students exempt from income tax Decedent's capital loss. Students exempt from income tax    A capital loss sustained by a decedent during his or her last tax year (or carried over to that year from an earlier year) can be deducted only on the final income tax return filed for the decedent. Students exempt from income tax The capital loss limits discussed earlier still apply in this situation. Students exempt from income tax The decedent's estate cannot deduct any of the loss or carry it over to following years. Students exempt from income tax Joint and separate returns. Students exempt from income tax   If you and your spouse once filed separate returns and are now filing a joint return, combine your separate capital loss carryovers. Students exempt from income tax However, if you and your spouse once filed a joint return and are now filing separate returns, any capital loss carryover from the joint return can be deducted only on the return of the spouse who actually had the loss. Students exempt from income tax Capital Gain Tax Rates The tax rates that apply to a net capital gain are generally lower than the tax rates that apply to other income. Students exempt from income tax These lower rates are called the maximum capital gain rates. Students exempt from income tax The term “net capital gain” means the amount by which your net long-term capital gain for the year is more than your net short-term capital loss. Students exempt from income tax For 2013, the maximum capital gain rates are 0%, 15%, 20%, 25%, and 28%. Students exempt from income tax See Table 16-1 for details. Students exempt from income tax If you figure your tax using the maximum capital gain rate and the regular tax computation results in a lower tax, the regular tax computation applies. Students exempt from income tax Example. Students exempt from income tax All of your net capital gain is from selling collectibles, so the capital gain rate would be 28%. Students exempt from income tax If you are otherwise subject to a rate lower than 28%, the 28% rate does not apply. Students exempt from income tax Investment interest deducted. Students exempt from income tax   If you claim a deduction for investment interest, you may have to reduce the amount of your net capital gain that is eligible for the capital gain tax rates. Students exempt from income tax Reduce it by the amount of the net capital gain you choose to include in investment income when figuring the limit on your investment interest deduction. Students exempt from income tax This is done on the Schedule D Tax Worksheet or the Qualified Dividends and Capital Gain Tax Worksheet. Students exempt from income tax For more information about the limit on investment interest, see Interest Expenses in chapter 3 of Publication 550. Students exempt from income tax Table 16-1. Students exempt from income tax What Is Your Maximum Capital Gain Rate? IF your net capital gain is from . Students exempt from income tax . Students exempt from income tax . Students exempt from income tax THEN your  maximum capital gain rate is . Students exempt from income tax . Students exempt from income tax . Students exempt from income tax a collectibles gain 28% an eligible gain on qualified small business stock minus the section 1202 exclusion 28% an unrecaptured section 1250 gain 25% other gain1 and the regular tax rate that would apply is 39. Students exempt from income tax 6% 20% other gain1 and the regular tax rate that would apply is 25%, 28%, 33%, or 35% 15% other gain1 and the regular tax rate that would apply is 10% or 15% 0% 1 Other gain means any gain that is not collectibles gain, gain on qualified small business stock, or unrecaptured section 1250 gain. Students exempt from income tax     Collectibles gain or loss. Students exempt from income tax   This is gain or loss from the sale or trade of a work of art, rug, antique, metal (such as gold, silver, and platinum bullion), gem, stamp, coin, or alcoholic beverage held more than 1 year. Students exempt from income tax   Collectibles gain includes gain from sale of an interest in a partnership, S corporation, or trust due to unrealized appreciation of collectibles. Students exempt from income tax Gain on qualified small business stock. Students exempt from income tax    If you realized a gain from qualified small business stock that you held more than 5 years, you generally can exclude some or all of your gain under section 1202. Students exempt from income tax The eligible gain minus your section 1202 exclusion is a 28% rate gain. Students exempt from income tax See Gains on Qualified Small Business Stock in chapter 4 of Publication 550. Students exempt from income tax Unrecaptured section 1250 gain. Students exempt from income tax    Generally, this is any part of your capital gain from selling section 1250 property (real property) that is due to depreciation (but not more than your net section 1231 gain), reduced by any net loss in the 28% group. Students exempt from income tax Use the Unrecaptured Section 1250 Gain Worksheet in the Schedule D (Form 1040) instructions to figure your unrecaptured section 1250 gain. Students exempt from income tax For more information about section 1250 property and section 1231 gain, see chapter 3 of Publication 544. Students exempt from income tax Tax computation using maximum capital gain rates. Students exempt from income tax   Use the Qualified Dividends and Capital Gain Tax Worksheet or the Schedule D Tax Worksheet (whichever applies) to figure your tax if you have qualified dividends or net capital gain. Students exempt from income tax You have net capital gain if Schedule D (Form 1040), lines 15 and 16, are both gains. Students exempt from income tax Schedule D Tax Worksheet. Students exempt from income tax   Use the Schedule D Tax Worksheet in the Schedule D (Form 1040) instructions to figure your tax if: You have to file Schedule D (Form 1040); and Schedule D (Form 1040), line 18 (28% rate gain) or line 19 (unrecaptured section 1250 gain), is more than zero. Students exempt from income tax Qualified Dividends and Capital Gain Tax Worksheet. Students exempt from income tax   If you do not have to use the Schedule D Tax Worksheet (as explained above) and any of the following apply, use the Qualified Dividends and Capital Gain Tax Worksheet in the instructions for Form 1040 or Form 1040A (whichever you file) to figure your tax. Students exempt from income tax You received qualified dividends. Students exempt from income tax (See Qualified Dividends in chapter 8. Students exempt from income tax ) You do not have to file Schedule D (Form 1040) and you received capital gain distributions. Students exempt from income tax (See Exceptions to filing Form 8949 and Schedule D (Form 1040) , earlier. Students exempt from income tax ) Schedule D (Form 1040), lines 15 and 16, are both more than zero. Students exempt from income tax Alternative minimum tax. Students exempt from income tax   These capital gain rates are also used in figuring alternative minimum tax. Students exempt from income tax Prev  Up  Next   Home   More Online Publications