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Tax Forms Federal And State

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Tax Forms Federal And State

Tax forms federal and state 1. Tax forms federal and state   Rental Income and Expenses (If No Personal Use of Dwelling) Table of Contents Rental IncomeWhen To Report Types of Income Rental ExpensesWhen To Deduct Types of Expenses This chapter discusses the various types of rental income and expenses for a residential rental activity with no personal use of the dwelling. Tax forms federal and state Generally, each year you will report all income and deduct all out-of-pocket expenses in full. Tax forms federal and state The deduction to recover the cost of your rental property—depreciation—is taken over a prescribed number of years, and is discussed in chapter 2, Depreciation of Rental Property. Tax forms federal and state If your rental income is from property you also use personally or rent to someone at less than a fair rental price, first read the information in chapter 5 , Personal Use of Dwelling Unit (Including Vacation Home). Tax forms federal and state Rental Income In most cases, you must include in your gross income all amounts you receive as rent. Tax forms federal and state Rental income is any payment you receive for the use or occupation of property. Tax forms federal and state In addition to amounts you receive as normal rental payments, there are other amounts that may be rental income. Tax forms federal and state When To Report When you report rental income on your tax return generally depends on whether you are a cash basis taxpayer or use an accrual method. Tax forms federal and state Most individual taxpayers use the cash method. Tax forms federal and state Cash method. Tax forms federal and state   You are a cash basis taxpayer if you report income on your return in the year you actually or constructively receive it, regardless of when it was earned. Tax forms federal and state You constructively receive income when it is made available to you, for example, by being credited to your bank account. Tax forms federal and state Accrual method. Tax forms federal and state    If you are an accrual basis taxpayer, you generally report income when you earn it, rather than when you receive it. Tax forms federal and state You generally deduct your expenses when you incur them, rather than when you pay them. Tax forms federal and state More information. Tax forms federal and state   See Publication 538, Accounting Periods and Methods, for more information about when you constructively receive income and accrual methods of accounting. Tax forms federal and state Types of Income The following are common types of rental income. Tax forms federal and state Advance rent. Tax forms federal and state   Advance rent is any amount you receive before the period that it covers. Tax forms federal and state Include advance rent in your rental income in the year you receive it regardless of the period covered or the method of accounting you use. Tax forms federal and state Example. Tax forms federal and state On March 18, 2013, you signed a 10-year lease to rent your property. Tax forms federal and state During 2013, you received $9,600 for the first year's rent and $9,600 as rent for the last year of the lease. Tax forms federal and state You must include $19,200 in your rental income in the first year. Tax forms federal and state Canceling a lease. Tax forms federal and state   If your tenant pays you to cancel a lease, the amount you receive is rent. Tax forms federal and state Include the payment in your income in the year you receive it regardless of your method of accounting. Tax forms federal and state Expenses paid by tenant. Tax forms federal and state   If your tenant pays any of your expenses, those payments are rental income. Tax forms federal and state Because you must include this amount in income, you can also deduct the expenses if they are deductible rental expenses. Tax forms federal and state For more information, see Rental Expenses , later. Tax forms federal and state Example 1. Tax forms federal and state Your tenant pays the water and sewage bill for your rental property and deducts the amount from the normal rent payment. Tax forms federal and state Under the terms of the lease, your tenant does not have to pay this bill. Tax forms federal and state Include the utility bill paid by the tenant and any amount received as a rent payment in your rental income. Tax forms federal and state You can deduct the utility payment made by your tenant as a rental expense. Tax forms federal and state Example 2. Tax forms federal and state While you are out of town, the furnace in your rental property stops working. Tax forms federal and state Your tenant pays for the necessary repairs and deducts the repair bill from the rent payment. Tax forms federal and state Include the repair bill paid by the tenant and any amount received as a rent payment in your rental income. Tax forms federal and state You can deduct the repair payment made by your tenant as a rental expense. Tax forms federal and state Property or services. Tax forms federal and state   If you receive property or services as rent, instead of money, include the fair market value of the property or services in your rental income. Tax forms federal and state   If the services are provided at an agreed upon or specified price, that price is the fair market value unless there is evidence to the contrary. Tax forms federal and state Example. Tax forms federal and state Your tenant is a house painter. Tax forms federal and state He offers to paint your rental property instead of paying 2 months rent. Tax forms federal and state You accept his offer. Tax forms federal and state Include in your rental income the amount the tenant would have paid for 2 months rent. Tax forms federal and state You can deduct that same amount as a rental expense for painting your property. Tax forms federal and state Security deposits. Tax forms federal and state   Do not include a security deposit in your income when you receive it if you plan to return it to your tenant at the end of the lease. Tax forms federal and state But if you keep part or all of the security deposit during any year because your tenant does not live up to the terms of the lease, include the amount you keep in your income in that year. Tax forms federal and state    If an amount called a security deposit is to be used as a final payment of rent, it is advance rent. Tax forms federal and state Include it in your income when you receive it. Tax forms federal and state Other Sources of Rental Income Lease with option to buy. Tax forms federal and state   If the rental agreement gives your tenant the right to buy your rental property, the payments you receive under the agreement are generally rental income. Tax forms federal and state If your tenant exercises the right to buy the property, the payments you receive for the period after the date of sale are considered part of the selling price. Tax forms federal and state Part interest. Tax forms federal and state   If you own a part interest in rental property, you must report your part of the rental income from the property. Tax forms federal and state Rental of property also used as your home. Tax forms federal and state   If you rent property that you also use as your home and you rent it less than 15 days during the tax year, do not include the rent you receive in your income and do not deduct rental expenses. Tax forms federal and state However, you can deduct on Schedule A (Form 1040), Itemized Deductions, the interest, taxes, and casualty and theft losses that are allowed for nonrental property. Tax forms federal and state See chapter 5, Personal Use of Dwelling Unit (Including Vacation Home). Tax forms federal and state Rental Expenses In most cases, the expenses of renting your property, such as maintenance, insurance, taxes, and interest, can be deducted from your rental income. Tax forms federal and state Personal use of rental property. Tax forms federal and state   If you sometimes use your rental property for personal purposes, you must divide your expenses between rental and personal use. Tax forms federal and state Also, your rental expense deductions may be limited. Tax forms federal and state See chapter 5, Personal Use of Dwelling Unit (Including Vacation Home). Tax forms federal and state Part interest. Tax forms federal and state   If you own a part interest in rental property, you can deduct expenses you paid according to your percentage of ownership. Tax forms federal and state Example. Tax forms federal and state Roger owns a one-half undivided interest in a rental house. Tax forms federal and state Last year he paid $968 for necessary repairs on the property. Tax forms federal and state Roger can deduct $484 (50% × $968) as a rental expense. Tax forms federal and state He is entitled to reimbursement for the remaining half from the co-owner. Tax forms federal and state When To Deduct You generally deduct your rental expenses in the year you pay them. Tax forms federal and state If you use the accrual method, see Publication 538 for more information. Tax forms federal and state Types of Expenses Listed below are the most common rental expenses. Tax forms federal and state Advertising. Tax forms federal and state Auto and travel expenses. Tax forms federal and state Cleaning and maintenance. Tax forms federal and state Commissions. Tax forms federal and state Depreciation. Tax forms federal and state Insurance. Tax forms federal and state Interest (other). Tax forms federal and state Legal and other professional fees. Tax forms federal and state Local transportation expenses. Tax forms federal and state Management fees. Tax forms federal and state Mortgage interest paid to banks, etc. Tax forms federal and state Points. Tax forms federal and state Rental payments. Tax forms federal and state Repairs. Tax forms federal and state Taxes. Tax forms federal and state Utilities. Tax forms federal and state Some of these expenses, as well as other less common ones, are discussed below. Tax forms federal and state Depreciation. Tax forms federal and state   Depreciation is a capital expense. Tax forms federal and state It is the mechanism for recovering your cost in an income producing property and must be taken over the expected life of the property. Tax forms federal and state   You can begin to depreciate rental property when it is ready and available for rent. Tax forms federal and state See Placed in Service under When Does Depreciation Begin and End in chapter 2. Tax forms federal and state Insurance premiums paid in advance. Tax forms federal and state   If you pay an insurance premium for more than one year in advance, for each year of coverage you can deduct the part of the premium payment that will apply to that year. Tax forms federal and state You cannot deduct the total premium in the year you pay it. Tax forms federal and state See chapter 6 of Publication 535 for information on deductible premiums. Tax forms federal and state Interest expense. Tax forms federal and state   You can deduct mortgage interest you pay on your rental property. Tax forms federal and state When you refinance a rental property for more than the previous outstanding balance, the portion of the interest allocable to loan proceeds not related to rental use generally cannot be deducted as a rental expense. Tax forms federal and state Chapter 4 of Publication 535 explains mortgage interest in detail. Tax forms federal and state Expenses paid to obtain a mortgage. Tax forms federal and state   Certain expenses you pay to obtain a mortgage on your rental property cannot be deducted as interest. Tax forms federal and state These expenses, which include mortgage commissions, abstract fees, and recording fees, are capital expenses that are part of your basis in the property. Tax forms federal and state Form 1098, Mortgage Interest Statement. Tax forms federal and state   If you paid $600 or more of mortgage interest on your rental property to any one person, you should receive a Form 1098 or similar statement showing the interest you paid for the year. Tax forms federal and state If you and at least one other person (other than your spouse if you file a joint return) were liable for, and paid interest on, the mortgage, and the other person received the Form 1098, report your share of the interest on Schedule E (Form 1040), line 13. Tax forms federal and state Attach a statement to your return showing the name and address of the other person. Tax forms federal and state On the dotted line next to line 13, enter “See attached. Tax forms federal and state ” Legal and other professional fees. Tax forms federal and state   You can deduct, as a rental expense, legal and other professional expenses such as tax return preparation fees you paid to prepare Schedule E, Part I. Tax forms federal and state For example, on your 2013 Schedule E you can deduct fees paid in 2013 to prepare Part I of your 2012 Schedule E. Tax forms federal and state You can also deduct, as a rental expense, any expense (other than federal taxes and penalties) you paid to resolve a tax underpayment related to your rental activities. Tax forms federal and state Local benefit taxes. Tax forms federal and state   In most cases, you cannot deduct charges for local benefits that increase the value of your property, such as charges for putting in streets, sidewalks, or water and sewer systems. Tax forms federal and state These charges are nondepreciable capital expenditures and must be added to the basis of your property. Tax forms federal and state However, you can deduct local benefit taxes that are for maintaining, repairing, or paying interest charges for the benefits. Tax forms federal and state Local transportation expenses. Tax forms federal and state   You may be able to deduct your ordinary and necessary local transportation expenses if you incur them to collect rental income or to manage, conserve, or maintain your rental property. Tax forms federal and state However, transportation expenses incurred to travel between your home and a rental property generally constitute nondeductible commuting costs unless you use your home as your principal place of business. Tax forms federal and state See Publication 587, Business Use of Your Home, for information on determining if your home office qualifies as a principal place of business. Tax forms federal and state   Generally, if you use your personal car, pickup truck, or light van for rental activities, you can deduct the expenses using one of two methods: actual expenses or the standard mileage rate. Tax forms federal and state For 2013, the standard mileage rate for business use is 56. Tax forms federal and state 5 cents per mile. Tax forms federal and state For more information, see chapter 4 of Publication 463. Tax forms federal and state    To deduct car expenses under either method, you must keep records that follow the rules in chapter 5 of Publication 463. Tax forms federal and state In addition, you must complete Form 4562, Part V, and attach it to your tax return. Tax forms federal and state Pre-rental expenses. Tax forms federal and state   You can deduct your ordinary and necessary expenses for managing, conserving, or maintaining rental property from the time you make it available for rent. Tax forms federal and state Rental of equipment. Tax forms federal and state   You can deduct the rent you pay for equipment that you use for rental purposes. Tax forms federal and state However, in some cases, lease contracts are actually purchase contracts. Tax forms federal and state If so, you cannot deduct these payments. Tax forms federal and state You can recover the cost of purchased equipment through depreciation. Tax forms federal and state Rental of property. Tax forms federal and state   You can deduct the rent you pay for property that you use for rental purposes. Tax forms federal and state If you buy a leasehold for rental purposes, you can deduct an equal part of the cost each year over the term of the lease. Tax forms federal and state Travel expenses. Tax forms federal and state   You can deduct the ordinary and necessary expenses of traveling away from home if the primary purpose of the trip is to collect rental income or to manage, conserve, or maintain your rental property. Tax forms federal and state You must properly allocate your expenses between rental and nonrental activities. Tax forms federal and state You cannot deduct the cost of traveling away from home if the primary purpose of the trip is to improve the property. Tax forms federal and state The cost of improvements is recovered by taking depreciation. Tax forms federal and state For information on travel expenses, see chapter 1 of Publication 463. Tax forms federal and state    To deduct travel expenses, you must keep records that follow the rules in chapter 5 of Publication 463. Tax forms federal and state Uncollected rent. Tax forms federal and state   If you are a cash basis taxpayer, do not deduct uncollected rent. Tax forms federal and state Because you have not included it in your income, it is not deductible. Tax forms federal and state   If you use an accrual method, report income when you earn it. Tax forms federal and state If you are unable to collect the rent, you may be able to deduct it as a business bad debt. Tax forms federal and state See chapter 10 of Publication 535 for more information about business bad debts. Tax forms federal and state Vacant rental property. Tax forms federal and state   If you hold property for rental purposes, you may be able to deduct your ordinary and necessary expenses (including depreciation) for managing, conserving, or maintaining the property while the property is vacant. Tax forms federal and state However, you cannot deduct any loss of rental income for the period the property is vacant. Tax forms federal and state Vacant while listed for sale. Tax forms federal and state   If you sell property you held for rental purposes, you can deduct the ordinary and necessary expenses for managing, conserving, or maintaining the property until it is sold. Tax forms federal and state If the property is not held out and available for rent while listed for sale, the expenses are not deductible rental expenses. Tax forms federal and state Points The term “points” is often used to describe some of the charges paid, or treated as paid, by a borrower to take out a loan or a mortgage. Tax forms federal and state These charges are also called loan origination fees, maximum loan charges, or premium charges. Tax forms federal and state Any of these charges (points) that are solely for the use of money are interest. Tax forms federal and state Because points are prepaid interest, you generally cannot deduct the full amount in the year paid, but must deduct the interest over the term of the loan. Tax forms federal and state The method used to figure the amount of points you can deduct each year follows the original issue discount (OID) rules. Tax forms federal and state In this case, points are equivalent to OID, which is the difference between: The amount borrowed (redemption price at maturity, or principal) and The proceeds (issue price). Tax forms federal and state The first step is to determine whether your total OID (which you may have on bonds or other investments in addition to the mortgage loan), including the OID resulting from the points, is insignificant or de minimis. Tax forms federal and state If the OID is not de minimis, you must use the constant-yield method to figure how much you can deduct. Tax forms federal and state De minimis OID. Tax forms federal and state   The OID is de minimis if it is less than one-fourth of 1% (. Tax forms federal and state 0025) of the stated redemption price at maturity (principal amount of the loan) multiplied by the number of full years from the date of original issue to maturity (term of the loan). Tax forms federal and state   If the OID is de minimis, you can choose one of the following ways to figure the amount of points you can deduct each year. Tax forms federal and state On a constant-yield basis over the term of the loan. Tax forms federal and state On a straight line basis over the term of the loan. Tax forms federal and state In proportion to stated interest payments. Tax forms federal and state In its entirety at maturity of the loan. Tax forms federal and state You make this choice by deducting the OID (points) in a manner consistent with the method chosen on your timely filed tax return for the tax year in which the loan is issued. Tax forms federal and state Example. Tax forms federal and state Carol Madison took out a $100,000 mortgage loan on January 1, 2013, to buy a house she will use as a rental during 2013. Tax forms federal and state The loan is to be repaid over 30 years. Tax forms federal and state During 2013, Carol paid $10,000 of mortgage interest (stated interest) to the lender. Tax forms federal and state When the loan was made, she paid $1,500 in points to the lender. Tax forms federal and state The points reduced the principal amount of the loan from $100,000 to $98,500, resulting in $1,500 of OID. Tax forms federal and state Carol determines that the points (OID) she paid are de minimis based on the following computation. Tax forms federal and state Redemption price at maturity (principal amount of the loan) $100,000 Multiplied by: The term of the  loan in complete years ×30 Multiplied by ×. Tax forms federal and state 0025 De minimis amount $7,500 The points (OID) she paid ($1,500) are less than the de minimis amount ($7,500). Tax forms federal and state Therefore, Carol has de minimis OID and she can choose one of the four ways discussed earlier to figure the amount she can deduct each year. Tax forms federal and state Under the straight line method, she can deduct $50 each year for 30 years. Tax forms federal and state Constant-yield method. Tax forms federal and state   If the OID is not de minimis, you must use the constant-yield method to figure how much you can deduct each year. Tax forms federal and state   You figure your deduction for the first year in the following manner. Tax forms federal and state Determine the issue price of the loan. Tax forms federal and state If you paid points on the loan, the issue price generally is the difference between the principal and the points. Tax forms federal and state Multiply the result in (1) by the yield to maturity (defined later). Tax forms federal and state Subtract any qualified stated interest payments (defined later) from the result in (2). Tax forms federal and state This is the OID you can deduct in the first year. Tax forms federal and state Yield to maturity (YTM). Tax forms federal and state   This rate is generally shown in the literature you receive from your lender. Tax forms federal and state If you do not have this information, consult your lender or tax advisor. Tax forms federal and state In general, the YTM is the discount rate that, when used in computing the present value of all principal and interest payments, produces an amount equal to the principal amount of the loan. Tax forms federal and state Qualified stated interest (QSI). Tax forms federal and state   In general, this is the stated interest that is unconditionally payable in cash or property (other than another loan of the issuer) at least annually over the term of the loan at a fixed rate. Tax forms federal and state Example—Year 1. Tax forms federal and state The facts are the same as in the previous example. Tax forms federal and state The yield to maturity on Carol's loan is 10. Tax forms federal and state 2467%, compounded annually. Tax forms federal and state She figured the amount of points (OID) she could deduct in 2013 as follows. Tax forms federal and state Principal amount of the loan $100,000 Minus: Points (OID) –1,500 Issue price of the loan $98,500 Multiplied by: YTM × . Tax forms federal and state 102467 Total 10,093 Minus: QSI –10,000 Points (OID) deductible in 2013 $93 To figure your deduction in any subsequent year, you start with the adjusted issue price. Tax forms federal and state To get the adjusted issue price, add to the issue price figured in Year 1 any OID previously deducted. Tax forms federal and state Then follow steps (2) and (3), earlier. Tax forms federal and state Example—Year 2. Tax forms federal and state Carol figured the deduction for 2014 as follows. Tax forms federal and state Issue price $98,500 Plus: Points (OID) deducted  in 2013 +93 Adjusted issue price $98,593 Multiplied by: YTM × . Tax forms federal and state 102467 Total 10,103 Minus: QSI –10,000 Points (OID) deductible in 2014 $103 Loan or mortgage ends. Tax forms federal and state    If your loan or mortgage ends, you may be able to deduct any remaining points (OID) in the tax year in which the loan or mortgage ends. Tax forms federal and state A loan or mortgage may end due to a refinancing, prepayment, foreclosure, or similar event. Tax forms federal and state However, if the refinancing is with the same lender, the remaining points (OID) generally are not deductible in the year in which the refinancing occurs, but may be deductible over the term of the new mortgage or loan. Tax forms federal and state Points when loan refinance is more than the previous outstanding balance. Tax forms federal and state   When you refinance a rental property for more than the previous outstanding balance, the portion of the points allocable to loan proceeds not related to rental use generally cannot be deducted as a rental expense. Tax forms federal and state For example, if an individual refinanced a loan with a balance of $100,000, the amount of the new loan was $120,000, and the taxpayer used $20,000 to purchase a car, points allocable to the $20,000 would be treated as nondeductible personal interest. Tax forms federal and state Repairs and Improvements Generally, an expense for repairing or maintaining your rental property may be deducted if you are not required to capitalize the expense. Tax forms federal and state Improvements. Tax forms federal and state   You must capitalize any expense you pay to improve your rental property. Tax forms federal and state An expense is for an improvement if it results in a betterment to your property, restores your property, or adapts your property to a new or different use. Tax forms federal and state Betterments. Tax forms federal and state   Expenses that may result in a betterment to your property include expenses for fixing a pre-existing defect or condition, enlarging or expanding your property, or increasing the capacity, strength, or quality of your property. Tax forms federal and state Restoration. Tax forms federal and state   Expenses that may be for restoration include expenses for replacing a substantial structural part of your property, repairing damage to your property after you properly adjusted the basis of your property as a result of a casualty loss, or rebuilding your property to a like-new condition. Tax forms federal and state Adaptation. Tax forms federal and state   Expenses that may be for adaptation include expenses for altering your property to a use that is not consistent with the intended ordinary use of your property when you began renting the property. Tax forms federal and state Separate the costs of repairs and improvements, and keep accurate records. Tax forms federal and state You will need to know the cost of improvements when you sell or depreciate your property. Tax forms federal and state The expenses you capitalize for improving your property can generally be depreciated as if the improvement were separate property. Tax forms federal and state Table 1-1. Tax forms federal and state Examples of Improvements Additions Bedroom Bathroom Deck Garage Porch Patio  Lawn & Grounds Landscaping Driveway Walkway Fence Retaining wall Sprinkler system Swimming pool Miscellaneous Storm windows, doors New roof Central vacuum Wiring upgrades Satellite dish Security system   Heating & Air Conditioning Heating system Central air conditioning Furnace Duct work Central humidifier Filtration system Plumbing Septic system Water heater Soft water system Filtration system  Interior Improvements Built-in appliances Kitchen modernization Flooring Wall-to-wall carpeting  Insulation Attic Walls, floor Pipes, duct work Prev  Up  Next   Home   More Online Publications
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Employee Tool & Equipment Plans

This resource page provides information and guidance related to Employee Tool and Equipment Plans, sometimes called Service Technician’s Tool Reimbursement Plans (Tool Plans). Tool Plans are programs that are marketed in various industries including auto dealership and repair facilities and other trades that require employees to provide their own tools. The plans typically purport to receive tax-favored treatment as “accountable plans” under Internal Revenue Code § 62(c) and the accompanying regulations.

Available Guidance and other Information

View recent Department of Justice activity

Revenue Rule 2012-25
Revenue Rule 2012-25 clarifies that an arrangement that recharacterizes taxable wages as nontaxable reimbursements or allowances does not satisfy the business connection requirement of the accountable plan rules under § 62(c) and the applicable regulations.  The ruling includes three examples of programs that do not satisfy the business connection requirement of the accountable plan rules because they impermissibly recharacterize wages.  It also includes an example in which the reimbursement arrangement satisfies the business connection requirement of the accountable plan rules because the employer’s plan only reimburses employees when a deductible business expense has been incurred in connection with performing services for the employer and the reimbursement is not in lieu of wages that the employees would otherwise receive.

ILM 201120021
A reimbursement or other expense allowance arrangement that pays an amount regardless of whether an expense is paid or incurred or reasonably expected to be paid or incurred by the employee in performing services for the employer violates the business connection requirement of an accountable plan. Specifically, such an arrangement violates the business connection’s reimbursement requirement under Treas. Reg. § 1.62-2(d)(3)(i). Accordingly, payments made under the arrangement are treated as made under a nonaccountable plan. Amounts treated as paid under a nonaccountable plan must be included in the employee’s gross income for the taxable year, are subject to withholding and payment of employment taxes, and must be reported as wages or other compensation on the employee’s Form W-2.

Employee Tool & Equipment Plans Alert
The Internal Revenue Service has established a compliance team to address significant concerns with certain Employee Tool and Equipment Plans that purport to receive tax-favored treatment as accountable plans.

IRS Letter Ruling 200930029
An employer's expense reimbursement plan satisfies the business connection, substantiation, and return of excess requirements of an accountable plan.  Payments made under the Plan in accordance with the terms of the plan will be excluded from the Technician’s income and will not be wages subject to the withholding and payment of employment taxes.

Chief Counsel Advice -   ILM 200745018
A legal memorandum that concludes that an employer's tool reimbursement plan does not satisfy the requirements of an accountable plan. 

Revenue Ruling 2005-52
This ruling holds that tool allowances paid to employees are not paid under an accountable plan because the substantiation and return of excess requirements are not met. 

 

Page Last Reviewed or Updated: 13-Feb-2014

The Tax Forms Federal And State

Tax forms federal and state Index A Addition to property, Additions and Improvements Adjusted basis, Adjusted Basis Alternative Depreciation System (ADS) Recovery periods, Recovery Periods Under ADS Required use, Required use of ADS. Tax forms federal and state Amended return, Filing an Amended Return Apartment Cooperative, Cooperative apartments. Tax forms federal and state Rental, Which Property Class Applies Under GDS? Automobile (see Passenger automobile) B Basis Adjustments, Basis adjustment for depreciation allowed or allowable. Tax forms federal and state , Adjustment of partner's basis in partnership. Tax forms federal and state , Basis adjustment due to recapture of clean-fuel vehicle deduction or credit. Tax forms federal and state , Basis adjustment due to casualty loss. Tax forms federal and state Basis for depreciation, What Is the Basis for Depreciation? Casualty loss, Basis adjustment due to casualty loss. Tax forms federal and state Change in use, Property changed from personal use. Tax forms federal and state Cost, Cost as Basis Depreciable basis, Depreciable basis. Tax forms federal and state Other than cost, Other Basis Recapture of clean-fuel vehicle deduction or credit, Basis adjustment due to recapture of clean-fuel vehicle deduction or credit. Tax forms federal and state Term interest, Basis adjustments. Tax forms federal and state Unadjusted, Figuring the Unadjusted Basis of Your Property Business use of property, partial, Partial business or investment use. Tax forms federal and state Business-use limit, recapture of Section 179 deduction, When Must You Recapture the Deduction? Business-use requirement, listed property, What Is the Business-Use Requirement? C Car (see Passenger automobile) Carryover of section 179 deduction, Carryover of disallowed deduction. Tax forms federal and state Casualty loss, effect of, Basis adjustment due to casualty loss. Tax forms federal and state Changing accounting method, Changing Your Accounting Method Communication equipment (see Listed property) Commuting, Commuting use. Tax forms federal and state Computer (see Listed property) Computer software, Computer software. Tax forms federal and state , Off-the-shelf computer software. Tax forms federal and state Containers, Containers. Tax forms federal and state Conventions, Which Convention Applies? Cooperative apartment, Cooperative apartments. Tax forms federal and state Copyright, Patents and copyrights. Tax forms federal and state (see also Section 197 intangibles) Correcting depreciation deductions, How Do You Correct Depreciation Deductions? Cost basis, Cost as Basis D Declining balance Method, Declining Balance Method Rates, Declining balance rate. Tax forms federal and state Deduction limit Automobile, Do the Passenger Automobile Limits Apply? Section 179, How Much Can You Deduct? Depreciation Deduction Employee, Can Employees Claim a Deduction? Listed property, Can Employees Claim a Deduction? Determinable useful life, Property Having a Determinable Useful Life Excepted property, Excepted Property Incorrect amount deducted, How Do You Correct Depreciation Deductions? Methods, Which Depreciation Method Applies? Property lasting more than one year, Property Lasting More Than One Year Property owned, Property You Own Property used in business, Property Used in Your Business or Income-Producing Activity Recapture, Revoking an election. Tax forms federal and state , Recapture of Excess Depreciation Depreciation allowable, Basis adjustment for depreciation allowed or allowable. Tax forms federal and state Depreciation allowed, Basis adjustment for depreciation allowed or allowable. Tax forms federal and state Depreciation deduction Listed property, What Is the Business-Use Requirement? Determinable useful life, Property Having a Determinable Useful Life Disposition Before recovery period ends, Sale or Other Disposition Before the Recovery Period Ends General asset account property, Disposing of GAA Property Section 179 deduction, When Must You Recapture the Deduction? E Election ADS, Electing ADS. Tax forms federal and state , Election of ADS. Tax forms federal and state Declining balance (150% DB) method, 150% election. Tax forms federal and state Exclusion from MACRS, Election To Exclude Property From MACRS General asset account, Electing To Use a GAA Not to claim special depreciation allowance, How Can You Elect Not To Claim an Allowance? Section 179 deduction, How Do You Elect the Deduction? Straight line method, Straight line election. Tax forms federal and state Electric vehicle, Electric Vehicles Employee Depreciation deduction, Can Employees Claim a Deduction? How to claim depreciation, Employee. Tax forms federal and state Employee deduction, listed property, Can Employees Claim a Deduction? Energy property, Energy property. Tax forms federal and state Exchange of MACRS property, Property Acquired in a Like-kind Exchange or Involuntary Conversion F Farm Property, Depreciation Methods for Farm Property Figuring MACRS Using percentage tables, How Is the Depreciation Deduction Figured? Without using percentage tables, Figuring the Deduction Without Using the Tables Films, Films, video tapes, and recordings. Tax forms federal and state Free tax services, Free help with your tax return. Tax forms federal and state G General asset account Abusive transaction, Abusive transactions. Tax forms federal and state Disposing of property, Disposing of GAA Property Grouping property in, Grouping Property Nonrecognition transaction, Nonrecognition transactions. Tax forms federal and state General Depreciation System (GDS), recovery periods, Recovery Periods Under GDS Gift (see Basis, other than cost) H Help (see Tax help) I Idle property, Idle Property Improvements, How Do You Treat Repairs and Improvements?, Additions and Improvements Income forecast method, Income Forecast Method Incorrect depreciation deductions, How Do You Correct Depreciation Deductions? Indian reservation Defined, Indian reservation. Tax forms federal and state Qualified infrastructure property, Qualified infrastructure property. Tax forms federal and state Qualified property, Qualified property. Tax forms federal and state Recovery periods for qualified property, Indian Reservation Property Related person, Related person. Tax forms federal and state Inheritance (see Basis, other than cost) Intangible property Depreciation method, Intangible Property, Income Forecast Method Income forecast method, Income Forecast Method Straight line method, Intangible Property Inventory, Inventory. Tax forms federal and state Investment use of property, partial, Partial business or investment use. Tax forms federal and state Involuntary conversion of MACRS property, Property Acquired in a Like-kind Exchange or Involuntary Conversion L Land Not depreciable, Land Preparation costs, Land Leased property, Leased property. Tax forms federal and state Leasehold improvement property, defined, Qualified leasehold improvement property. Tax forms federal and state , Qualified leasehold improvement property. Tax forms federal and state Life tenant, Life tenant. Tax forms federal and state (see also Term interests) Limit on deduction Automobile, Do the Passenger Automobile Limits Apply? Section 179, How Much Can You Deduct? Listed property 5% owner, 5% owner. Tax forms federal and state Computer, Computers and Related Peripheral Equipment Condition of employment, Condition of employment. Tax forms federal and state Defined, What Is Listed Property? Employee deduction, Can Employees Claim a Deduction? Employer convenience, Employer's convenience. Tax forms federal and state Improvements to, Improvements to listed property. Tax forms federal and state Leased, Lessee's Inclusion Amount Passenger automobile, Passenger Automobiles Qualified business use, Qualified Business Use Recordkeeping, Adequate Records Related person, Related persons. Tax forms federal and state Reporting on Form 4562, How Is Listed Property Information Reported? Lodging, Property used for lodging. Tax forms federal and state M Maximum deduction Electric vehicles, Electric Vehicles Passenger automobiles, Maximum Depreciation Deduction Trucks, Trucks and Vans Vans, Trucks and Vans Mobile home (see Residential rental property) Modified ACRS (MACRS) Addition or improvement, Additions and Improvements Alternative Depreciation System (ADS), Which Depreciation System (GDS or ADS) Applies? Conventions, Which Convention Applies? Declining balance method, Declining Balance Method Depreciation methods, Which Depreciation Method Applies? Farm property, Depreciation Methods for Farm Property Figuring, short tax year, Property Placed in Service in a Short Tax Year General Depreciation System (GDS), Which Depreciation System (GDS or ADS) Applies? Percentage tables, Using the MACRS Percentage Tables Property classes, Which Property Class Applies Under GDS? Recovery periods, Which Recovery Period Applies? Short tax year, Figuring the Deduction for a Short Tax Year Straight line method, Straight Line Method N Nonresidential real property, Which Property Class Applies Under GDS? Nontaxable transfer of MACRS property, Property Acquired in a Nontaxable Transfer O Office in the home, Office in the home. Tax forms federal and state , Office in the home. Tax forms federal and state Ownership, incidents of, Incidents of ownership. Tax forms federal and state P Partial business use, Partial business use. Tax forms federal and state Passenger automobile Defined, Passenger Automobiles Electric vehicles, Electric Vehicles Limit on, Do the Passenger Automobile Limits Apply? Maximum depreciation deduction, Maximum Depreciation Deduction Trucks, Trucks and Vans Vans, Trucks and Vans Patent, Patents and copyrights. Tax forms federal and state (see also Section 197 intangibles) Personal property, Personal property. Tax forms federal and state Phonographic equipment (see Listed property) Photographic equipment (see Listed property) Placed in service Before 1987, Property You Placed in Service Before 1987 Date, What Is the Placed in Service Date? Rule, Placed in Service Property Classes, Which Property Class Applies Under GDS? Depreciable, What Property Can Be Depreciated? Idle, Idle Property Improvements, How Do You Treat Repairs and Improvements? Leased, Leased property. Tax forms federal and state , Leased property. Tax forms federal and state Listed, What Is Listed Property? Personal, Personal property. Tax forms federal and state Real, Real property. Tax forms federal and state Retired from service, Retired From Service Tangible personal, Tangible personal property. Tax forms federal and state Term interest, Certain term interests in property. Tax forms federal and state Q Qualified leasehold improvement property, defined, Qualified leasehold improvement property. Tax forms federal and state , Qualified leasehold improvement property. Tax forms federal and state Qualified property, special depreciation allowance, What Is Qualified Property? R Real property, Real property. Tax forms federal and state Recapture Clean-fuel vehicle deduction or credit, Basis adjustment due to recapture of clean-fuel vehicle deduction or credit. Tax forms federal and state General asset account, abusive transaction, Abusive transactions. Tax forms federal and state Listed property, Recapture of Excess Depreciation MACRS depreciation, Revoking an election. Tax forms federal and state Section 179 deduction, When Must You Recapture the Deduction? Special depreciation allowance, When Must You Recapture an Allowance? Recordkeeping Listed property, Adequate Records Section 179, How Do You Elect the Deduction? Recovery periods ADS, Recovery Periods Under ADS GDS, Recovery Periods Under GDS Related persons, Related persons. Tax forms federal and state , Related persons. Tax forms federal and state , Related persons. Tax forms federal and state , Related persons. Tax forms federal and state , Related person. Tax forms federal and state , Related persons. Tax forms federal and state Rent-to-own property, defined, Qualified rent-to-own property. Tax forms federal and state Rental home (see Residential rental property) Rented property, improvements, Improvements to rented property. Tax forms federal and state Repairs, How Do You Treat Repairs and Improvements? Residential rental property, Which Property Class Applies Under GDS? Retail motor fuels outlet, Retail motor fuels outlet. Tax forms federal and state Revoking ADS election, Electing ADS. Tax forms federal and state General asset account election, Revoking an election. Tax forms federal and state Section 179 election, Revoking an election. Tax forms federal and state S Sale of property, Sale or Other Disposition Before the Recovery Period Ends Section 179 deduction Business use required, Partial business use. Tax forms federal and state Carryover, Carryover of disallowed deduction. Tax forms federal and state Dispositions, When Must You Recapture the Deduction? Electing, How Do You Elect the Deduction? Limits Business (taxable) income, Business Income Limit Business-use, recapture, When Must You Recapture the Deduction? Dollar, Dollar Limits Enterprise zone business, Enterprise Zone Businesses Partial business use, Partial business use. Tax forms federal and state Married filing separate returns, Married Individuals Partnership rules, Partnerships and Partners Property Eligible, Eligible Property Excepted, Excepted Property Purchase required, Property Acquired by Purchase Recapture, When Must You Recapture the Deduction? Recordkeeping, How Do You Elect the Deduction? S corporation rules, S Corporations Settlement fees, Settlement costs. Tax forms federal and state Short tax year Figuring depreciation, Property Placed in Service in a Short Tax Year Figuring placed-in-service date, Using the Applicable Convention in a Short Tax Year Software, computer, Computer software. Tax forms federal and state , Off-the-shelf computer software. Tax forms federal and state Sound recording, Films, video tapes, and recordings. Tax forms federal and state Special depreciation allowance Election not to claim, How Can You Elect Not To Claim an Allowance? Qualified property, What Is Qualified Property? Recapture, When Must You Recapture an Allowance? Stock, constructive ownership of, Constructive ownership of stock or partnership interest. Tax forms federal and state Straight line method, Intangible Property, Straight Line Method Created intangibles, Certain created intangibles. Tax forms federal and state T Tangible personal property, Tangible personal property. Tax forms federal and state Term interest, Certain term interests in property. Tax forms federal and state Trade-in of property, Trade-in of other property. Tax forms federal and state Trucks, Trucks and Vans U Unadjusted basis, Figuring the Unadjusted Basis of Your Property Useful life, Property Having a Determinable Useful Life V Vans, Trucks and Vans Video tape, Films, video tapes, and recordings. Tax forms federal and state Video-recording equipment (see Listed property) W When to use ADS, Which Depreciation System (GDS or ADS) Applies? Worksheet Leased listed property, Inclusion amount worksheet. Tax forms federal and state MACRS, MACRS Worksheet Prev  Up     Home   More Online Publications