Filing Your Taxes Online is Fast, Easy and Secure.
Start now and receive your tax refund in as little as 7 days.

1. Get Answers

Your online questions are customized to your unique tax situation.

2. Maximize your Refund

Find tax credits for everything from school tuition to buying a hybri

3. E-File for FREE

E-file free with direct deposit to get your refund in as few as 7 days.

Filing your taxes with paper mail can be difficult and it could take weeks for your refund to arrive. IRS e-file is easy, fast and secure. There is no paperwork going to the IRS so tax refunds can be processed in as little as 7 days with direct deposit. As you prepare your taxes online, you can see your tax refund in real time.

FREE audit support and representation from an enrolled agent – NEW and only from H&R Block

1040x Instructions 2010

File 2012 State Taxes Free2009 1040Free Turbotax 2010State Tax Mailing AddressClues Fill 1040x Form1040ez 2012Free Tax 20112011 Irs Form 1040aHrblock Free FileHow To File An Amended Tax Return 2013Nonresidents State Tax Forms1040 EsH&r Block Free EditionEfile 2012Tax Software ComparisonTax 2010State Taxes Only1040x Fillable FormFile 2008 Taxes Online Free H&r BlockFile A 1040ezAmend A 2012 ReturnFree Tax Filing 2010Taxes And Unemployment2011 1040ez InstructionsHow To File Self Employed Taxes Step By StepTax Planning Us 1040How To Amend 2012 Federal Tax ReturnFederal Tax FormsPrintable Irs Tax Forms 2011Irs E File Form 4868How To Fill Out An Amended Tax Return Form2008 Tax Forms1040 Amendment 2011Ez 40 Tax FormAmended TaxesPrintable 1040ez Form 2011H&r Block Military Free FileCan You Efile A 1040xForm 1040ez 2013Tax Act 2012

1040x Instructions 2010

1040x instructions 2010 Publication 1542 - Main Content Table of Contents How To Use Per Diem Rate TablesThe Two Substantiation Methods Transition Rules Per Diem Rate Tables How To Get Tax HelpLow Income Taxpayer Clinics (LITCs). 1040x instructions 2010 How To Use Per Diem Rate Tables This section contains information about the per diem rate substantiation methods available and the choice of rates you must make for the last 3 months of the year. 1040x instructions 2010 The Two Substantiation Methods The tables in this publication reflect the high-low substantiation method and the regular federal per diem rate method. 1040x instructions 2010 High-low method. 1040x instructions 2010   Tables 1 and 2 in this publication list the localities that are treated under the high-low substantiation method as high-cost localities for all or part of the year. 1040x instructions 2010 Table 1 lists the localities that are eligible for $233 ($65 meals and incidental expenses (M&IE)) per diem, effective October 1, 2010. 1040x instructions 2010 For travel on or after October 1, 2010, all other localities within CONUS are eligible for $160 ($52 M&IE) per diem under the high-low method. 1040x instructions 2010    Table 2 lists the localities that are eligible for $242 ($65 M&IE) per diem, effective October 1, 2011. 1040x instructions 2010 For travel on or after October 1, 2011, the per diem for all other localities decreases to $163 ($52 M&IE). 1040x instructions 2010 Regular federal per diem rate method. 1040x instructions 2010   Tables 3 and 4 give the regular federal per diem rates published by the General Services Administration (GSA). 1040x instructions 2010 Both tables include the separate rate for meals and incidental expenses (M&IE) for each locality. 1040x instructions 2010 The rates listed in Table 3 are effective October 1, 2010; those in Table 4 are effective October 1, 2011. 1040x instructions 2010 The standard rate for all locations within CONUS not specifically listed in Table 3 is $123 ($77 for lodging and $46 for M&IE). 1040x instructions 2010 For Table 4, this rate is $123 ($77 for lodging and $46 for M&IE). 1040x instructions 2010 Transition Rules The transition period covers the last 3 months of the calendar year, from the time that new rates are effective (generally October 1) through December 31. 1040x instructions 2010 During this period, you generally may change to the new rates or finish out the year with the rates you had been using. 1040x instructions 2010 High-low method. 1040x instructions 2010   If you use the high-low substantiation method for an employee, when new rates become effective (generally October 1) you can either continue with the rates you used for the first part of the year or change to the new rates. 1040x instructions 2010 However, you must continue using the high-low method for that employee for the rest of the calendar year (through December 31). 1040x instructions 2010 Also, you must use the same rates for all employees reimbursed under the high-low method during that calendar year. 1040x instructions 2010   For example, Employee A travels extensively during March and April of 2012, and you determine A's travel allowance (reimbursement) using the high-low method (Table 2). 1040x instructions 2010 Employee A does not travel again until November 2012. 1040x instructions 2010 For A's November trip and any others during the remainder of 2012, you may continue using the same set of rates (Table 2) or change to the new rates that generally will be effective in October. 1040x instructions 2010 Assume that two of your other employees, B and C, are also reimbursed under the high-low method—your choice of rates must also apply to them. 1040x instructions 2010   For Employee A's travel on or after January 1, 2013, you must use the rates in effect for 2013, but may either continue with the high-low method or choose the regular federal per diem rate method. 1040x instructions 2010 The choice of method stays in effect for the entire 2013 calendar year. 1040x instructions 2010   The new rates and localities for the high-low method are included each year in a revenue procedure that is generally published in mid- to late-September. 1040x instructions 2010 You can find the revenue procedure in the weekly Internal Revenue Bulletin (IRB) on the Internet at www. 1040x instructions 2010 irs. 1040x instructions 2010 gov/irb. 1040x instructions 2010 Federal per diem rate method. 1040x instructions 2010   New CONUS per diem rates become effective on October 1 of each year and remain in effect through September 30 of the following year. 1040x instructions 2010 Employees being reimbursed under the per diem rate method during the first 9 months of a year (January 1–September 30) must continue under the same method through the end of that calendar year (December 31). 1040x instructions 2010 However, for travel by these employees from October 1 through December 31, you can choose to continue using the same per diem rates or use the new rates. 1040x instructions 2010 Your choice applies to all employees reimbursed under the per diem rate method during that calendar year. 1040x instructions 2010 Just as for the high-low method, you must continue using the same method for an employee for the entire calendar year. 1040x instructions 2010   For example, Employees P and Q attend an industry conference in February 2012, and you reimburse their expenses using the per diem rate method (Table 4). 1040x instructions 2010 Employee P attends other conferences in July (reimbursed using Table 4) and December 2012, while Employee Q's only other travel occurs in October 2012. 1040x instructions 2010 When determining Q's travel allowance for the October travel, you must decide whether to continue with the old (Table 4) rates or adopt the new ones effective October 1, 2012. 1040x instructions 2010 Your choice of rates will also apply to Employee P's December travel. 1040x instructions 2010 Both employees must continue being reimbursed under the per diem rate method for travel through December 31, 2012. 1040x instructions 2010 You can choose a new method for either or both employees; this choice will become effective on January 1, 2013. 1040x instructions 2010   The new federal CONUS per diem rates are published each year, generally early in September, on the Internet. 1040x instructions 2010 Go to www. 1040x instructions 2010 gsa. 1040x instructions 2010 gov/perdiem. 1040x instructions 2010 Per diem rates for localities listed in Table 4 may change at any time during the rest of 2011 or 2012. 1040x instructions 2010 To be sure you have the most current rate, check IRS. 1040x instructions 2010 gov for an updated Publication 1542, the other Internet website listed earlier under Per diem rates on the Internet, or call the IRS at 1-800-829-1040. 1040x instructions 2010 Per Diem Rate Tables Table 1. 1040x instructions 2010 Localities Eligible for $233 ($65 M&IE) Per Diem Amount Under the High-Low Substantiation Method (Effective October 1, 2010 – September 30, 2011)1,2 Note: The standard (“low”) rate of $160 ($108 for lodging and $52 for M&IE) applies to all locations within the continental United States (CONUS) not specifically listed below or encompassed by the boundary definition of a listed point. 1040x instructions 2010 Per Diem Locality Effective Date of State Key City County and/or Other Defined Location $233 Rate AZ Phoenix, Scottsdale Maricopa 1/1 - 5/31   Sedona City limits of Sedona 3/1 - 4/30 CA Monterey Monterey All year   Napa Napa 4/1 - 9/30 10/1 - 11/30   San Diego San Diego All year   San Francisco San Francisco All year   Santa Barbara Santa Barbara All year   Santa Monica City limits of Santa Monica All year   South Lake Tahoe El Dorado All year   Yosemite National Park Mariposa All year CO Aspen Pitkin 1/1 - 3/31 6/1 - 8/31 12/1 - 12/31   Denver, Aurora Denver, Adams, Arapahoe, Jefferson All year   Silverthorne, Breckenridge Summit 1/1 - 3/31 12/1 - 12/31   Steamboat Springs Routt 1/1 - 3/31 12/1 - 12/31   Telluride San Miguel 1/1 - 3/31 12/1 - 12/31   Vail Eagle 1/1 - 8/31 12/1 - 12/31 DC Washington, DC (also the cities of Alexandria, Fairfax, and Falls Church, and the counties of Arlington and Fairfax, in Virginia; and the counties of Montgomery and Prince George's in Maryland)   All year FL Fort Lauderdale Broward 1/1 - 5/31   Fort Walton Beach, DeFuniak Springs Okaloosa, Walton 6/1 - 7/31   Key West Monroe All year   Miami Miami-Dade 1/1 - 3/31 12/1 - 12/31   Naples Collier 1/1 - 4/30 IL Chicago Cook, Lake All year LA New Orleans Orleans, St. 1040x instructions 2010 Bernard, Jefferson, Plaquemines Parishes 1/1 - 6/30 10/1 - 12/31 MA Boston, Cambridge Suffolk, City of Cambridge All year   Falmouth City limits of Falmouth 7/1 - 8/31   Martha's Vineyard Dukes 7/1 - 8/31   Nantucket Nantucket 6/1 - 9/30 MD Counties of Montgomery and Prince George's   All year Table 1. 1040x instructions 2010 (Effective October 1, 2010 – September 30, 2011) (Continued) Per Diem Locality Effective Date of State Key City County and/or Other Defined Location $233 Rate MD Baltimore Baltimore City 3/1 - 9/30 10/1 - 11/30   Cambridge, St. 1040x instructions 2010 Michaels Dorchester, Talbot 6/1 - 8/31   Ocean City Worcester 6/1 - 8/31 ME Bar Harbor Hancock 7/1 - 8/31 NC Kill Devil Dare 6/1 - 8/31 NH Conway Carroll 7/1 - 8/31 NY Floral Park, Garden City, Great Neck Nassau All year   Glens Falls Warren 7/1 - 8/31   Lake Placid Essex 7/1 - 8/31   Manhattan (includes the boroughs of Manhattan, Brooklyn, the Bronx, Queens, and Staten Island) Bronx, Kings, New York, Queens, Richmond All year   Riverhead, Ronkonkoma, Melville Suffolk 6/1 - 8/31   Saratoga Springs, Schenectady Saratoga, Schenectady 7/1 - 8/31   Tarrytown, White Plains, New Rochelle Westchester All year PA Philadelphia Philadelphia All year RI Jamestown, Middletown, Newport Newport 5/1 - 9/30 10/1 - 10/31 UT Park City Summit 1/1 - 3/31 VA Cities of Alexandria, Falls Church, and Fairfax; Counties of Arlington and Fairfax   All year   Virginia Beach City of Virginia Beach 6/1 - 8/31 VT Stowe Lamoille 1/1 - 3/31 6/1 - 12/31 WA Seattle King All year WY Jackson, Pinedale Teton, Sublette 7/1 - 8/31 1 Transition rule. 1040x instructions 2010 A payor who uses the high-low substantiation method  in Table 1 for an employee during the first 9 months of calendar year 2011 must continue to use the high-low substantiation method for the remainder  of calendar year 2011 for that employee. 1040x instructions 2010 For travel on or after October 1, 2011, and before January 1, 2012, the payor may continue to use the rates and high-cost localities published in Table 1 or the updated rates and high-cost localities published in the revenue procedure that supersedes Revenue Procedure 2010-39, as long as those rates and localities are used consistently during this period for all employees reimbursed under this method. 1040x instructions 2010 See Transition Rules under How To Use Per Diem Rate Tables for an example. 1040x instructions 2010    2 Revenue Procedure 2010-39 in Internal Revenue Bulletin 2010-42. 1040x instructions 2010 Table 2. 1040x instructions 2010 Localities Eligible for $242 ($65 M&IE) Per Diem Amount Under the High-Low Substantiation Method (Effective October 1, 2011)1,2 Note: The standard (“low”) rate of $163 ($111 for lodging and $52 for M&IE) applies to all locations within the continental United States (CONUS) not specifically listed below or encompassed by the boundary definition of a listed point. 1040x instructions 2010 Per Diem Locality Effective Date of State Key City County and/or Other Defined Location $242 Rate AZ Sedona City limits of Sedona 3/1 - 4/30 CA Monterey Monterey All year   Napa Napa 4/1 - 9/30 10/1 - 11/30   San Diego San Diego All year   San Francisco San Francisco All year   Santa Barbara Santa Barbara All year   Santa Monica City limits of Santa Monica All year   Yosemite National Park Mariposa 6/1 - 8/31 CO Aspen Pitkin 1/1 - 3/31 6/1 - 8/31 12/1 - 12/31   Denver, Aurora Denver, Adams, Arapahoe, Jefferson All year   Steamboat Springs Routt 1/1 - 3/31 12/1 - 12/31   Telluride San Miguel 1/1 - 3/31 12/1 - 12/31   Vail Eagle 1/1 - 8/31 12/1 - 12/31 DC Washington, DC (also the cities of Alexandria, Fairfax, and Falls Church, and the counties of Arlington and Fairfax, in Virginia; and the counties of Montgomery and Prince George's in Maryland)   All year FL Fort Lauderdale Broward 1/1 - 5/31   Fort Walton Beach, DeFuniak Springs Okaloosa, Walton 6/1 - 7/31   Key West Monroe All year   Miami Miami-Dade 1/1 - 3/31 12/1 - 12/31   Naples Collier 1/1 - 4/30 IL Chicago Cook, Lake 4/1 - 9/30 10/1 - 11/30 LA New Orleans Orleans, St. 1040x instructions 2010 Bernard, Jefferson, Plaquemines Parishes 1/1 - 6/30 10/1 - 12/31 MA Boston, Cambridge Suffolk, City of Cambridge All year   Falmouth City limits of Falmouth 7/1 - 8/31   Martha's Vineyard Dukes 7/1 - 8/31   Nantucket Nantucket 6/1 - 9/30 Table 2. 1040x instructions 2010 (Effective October 1, 2011) (Continued) Per Diem Locality Effective Date of State Key City County and/or Other Defined Location $242 Rate MD Counties of Montgomery and Prince George's   All year   Baltimore Baltimore City 3/1 - 9/30 10/1 - 11/30   Cambridge, St. 1040x instructions 2010 Michaels Dorchester, Talbot 6/1 - 8/31   Ocean City Worcester 6/1 - 8/31 ME Bar Harbor Hancock 7/1 - 8/31 NC Kill Devil Dare 6/1 - 8/31 NH Conway Carroll 7/1 - 8/31 NY Floral Park, Garden City, Great Neck Nassau All year   Glens Falls Warren 7/1 - 8/31   Lake Placid Essex 7/1 - 8/31   Manhattan (includes the boroughs of Manhattan, Brooklyn, the Bronx, Queens, and Staten Island) Bronx, Kings, New York, Queens, Richmond All year   Saratoga Springs, Schenectady Saratoga, Schenectady 7/1 - 8/31   Tarrytown, White Plains, New Rochelle Westchester All year PA Philadelphia Philadelphia All year RI Jamestown, Middletown, Newport Newport 5/1 - 9/30 10/1 - 10/31 UT Park City Summit 1/1 - 3/31 VA Cities of Alexandria, Falls Church, and Fairfax; Counties of Arlington and Fairfax   All year   Virginia Beach City of Virginia Beach 6/1 - 8/31 WA Seattle King All year WY Jackson, Pinedale Teton, Sublette 7/1 - 8/31 1 Transition rule. 1040x instructions 2010 A payor who uses the high-low substantiation method  in Table 2 for an employee during the first 9 months of calendar year 2012 must continue to use the high-low substantiation method for the remainder  of calendar year 2012 for that employee. 1040x instructions 2010 For travel on or after October 1, 2012, and before January 1, 2013, the payor may continue to use the rates and high-cost localities published in Table 2 or the updated rates and high-cost localities published in the revenue procedure that supersedes Revenue Procedure 2011-47 and Notice 2011-81, as long as those rates and localities are used consistently during this period for all employees reimbursed under this method. 1040x instructions 2010 See Transition Rules under How To Use Per Diem Rate Tables for an example. 1040x instructions 2010    2 Revenue Procedure 2011-47 and Notice 2011-81 in Internal Revenue Bulletin 2011-42. 1040x instructions 2010 Table 3. 1040x instructions 2010 Maximum Federal Per Diem Rates (Effective October 1, 2010 – September 30, 2011)1 Note: The standard rate of $123 ($77 for lodging and $46 for M&IE) applies to all locations within the continental United States (CONUS) not specifically listed below or encompassed by the boundary definition of a listed point. 1040x instructions 2010 However, the standard CONUS rate applies to all locations within CONUS, including those defined below, for certain relocation allowances. 1040x instructions 2010 (See parts 302-2, 302-4, and 302-5 of 41 CFR. 1040x instructions 2010 ) Table 4 lists all per diem rates alphabetically by state abbreviation. 1040x instructions 2010 Click on a link below to find rates for your state: Alabama, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, District of Columbia, Florida, Georgia, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas , Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, Wyoming Per Diem Locality Computing Maximum Rate State Key City2 County and/or Other Defined Location3,4 Effective Dates Maximum  Lodging  Rate M&IE  Rate Maximum  Per Diem  Rate AL Birmingham Jefferson, Shelby All year $88   $56   $144     Gulf Shores Baldwin 1/1 - 5/31 101   51   152         6/1 - 7/31 126   51   177         8/1 - 12/31 101   51   152     Huntsville Madison, Limestone All year 86   51   137     Mobile Mobile 1/1 - 2/28 98   51   149         3/1 - 12/31 90   51   141   AR Hot Springs Garland All year 101   46   147     Little Rock Pulaski All year 88   61   149   AZ Grand Canyon, Flagstaff Coconino (except city limits of Sedona), Yavapai 1/1 - 2/28 77   66   143         3/1 - 10/31 95   66   161         11/1 - 12/31 77   66   143     Kayenta Navajo 1/1 - 4/30 77   46   123         5/1 - 9/30 89   46   135         10/1 - 12/31 77   46   123     Phoenix, Scottsdale Maricopa 1/1 - 5/31 126   71   197         6/1 - 8/31 81   71   152         9/1 - 12/31 106   71   177     Sedona City limits of Sedona 1/1 - 2/28 129   66   195         3/1 - 4/30 145   66   211         5/1 - 12/31 129   66   195     Sierra Vista Cochise All year 81   46   127     Tucson Pima 1/1 - 1/31 93   56   149         2/1 - 5/31 111   56   167         6/1 - 8/31 77   56   133         9/1 - 12/31 93   56   149     Yuma Yuma All year 81   46   127   CA Antioch, Brentwood, Concord Contra Costa All year 101   66   167     Barstow, Ontario, Victorville San Bernardino Before 4/01/11 83   56   139         After 3/31/11 99   56   155     Benicia, Dixon, Fairfield Solano All year 84   56   140     Death Valley Inyo All year 92   46   138     Eureka, Arcata, Humboldt 1/1 - 5/31 82   61   143     McKinleyville   6/1 - 8/31 92   61   153         9/1 - 12/31 82   61   143     Fresno Fresno All year 91   61   152     Los Angeles Los Angeles (except the city of Santa Monica), Orange, Ventura; Edwards AFB All year 123   71   194     Mammoth Lakes Mono All year 116   61   177   Table 3. 1040x instructions 2010 (Effective October 1, 2010 – September 30, 2011) (Continued) Per Diem Locality Computing Maximum Rate State Key City2 County and/or Other Defined Location3,4 Effective Dates Maximum  Lodging  Rate M&IE  Rate Maximum  Per Diem  Rate CA Mill Valley, San Rafael, Novato Marin All year $106   $56   $162     Modesto Stanislaus All year 85   51   136     Monterey Monterey 1/1 - 6/30 126   71   197         7/1 - 8/31 152   71   223         9/1 - 12/31 126   71   197     Napa Napa 1/1 - 3/31 107   66   173         4/1 - 11/30 142   66   208         12/1 - 12/31 107   66   173     Oakhurst Madera 1/1 - 4/30 78   56   134         5/1 - 8/31 92   56   148         9/1 - 12/31 78   56   134     Oakland Alameda All year 94   61   155     Palm Springs Riverside 1/1 - 4/30 120   71   191         5/1 - 8/31 90   71   161         9/1 - 12/31 104   71   175     Point Arena, Gualala Mendocino All year 88   66   154     Redding Shasta All year 87   61   148     Sacramento Sacramento All year 101   61   162     San Diego San Diego All year 131   71   202     San Francisco San Francisco Before 1/1/11:                   10/1 - 10/31 174   71   245         11/1 - 12/31 142   71   213         After 12/31/10:                   1/1 - 3/31 142   71   213         4/1 - 8/31 150   71   221         9/1 - 12/31 180   71   251     San Luis Obispo San Luis Obispo 1/1 - 6/30 104   66   170         7/1 - 8/31 121   66   187         9/1 - 12/31 104   66   170     San Mateo, Foster City, Belmont San Mateo All year 108   61   169     Santa Barbara Santa Barbara 1/1 - 6/30 143   66   209         7/1 - 8/31 172   66   238         9/1 - 12/31 143   66   209     Santa Cruz Santa Cruz All year 93   66   159     Santa Monica City limits of Santa Monica All year 180   71   251     Santa Rosa Sonoma All year 109   61   170     South Lake Tahoe El Dorado All year 125   71   196     Stockton San Joaquin All year 80   56   136     Sunnyvale, Palo Alto, San Jose Santa Clara All year 116   56   172     Tahoe City Placer All year 87   61   148     Truckee Nevada 1/1 - 2/28 113   71   184         3/1 - 11/30 96   71   167         12/1 - 12/31 113   71   184     Visalia, Lemoore Tulare, Kings All year 83   61   144     West Sacramento Yolo All year 91   51   142     Yosemite National Mariposa 1/1 - 5/31 129   71   200     Park   6/1 - 8/31 162   71   233         9/1 - 12/31 129   71   200   Table 3. 1040x instructions 2010 (Effective October 1, 2010 – September 30, 2011) (Continued) Per Diem Locality Computing Maximum Rate State Key City2 County and/or Other Defined Location3,4 Effective Dates Maximum  Lodging  Rate M&IE  Rate Maximum  Per Diem  Rate CO Aspen Pitkin 1/1 - 3/31 $202   $71   $273         4/1 - 5/31 107   71   178         6/1 - 8/31 143   71   214         9/1 - 11/30 103   71   174         12/1 - 12/31 202   71   273     Boulder, Broomfield Boulder, Broomfield All year 104   61   165     Colorado Springs El Paso All year 84   66   150     Cortez Montezuma 1/1 - 5/31 87   51   138         6/1 - 8/31 105   51   156         9/1 - 12/31 87   51   138     Crested Butte, Gunnison Gunnison 1/1 - 3/31 82   51   133         4/1 - 5/31 77   51   128         6/1 - 8/31 95   51   146         9/1 - 12/31 82   51   133     Denver, Aurora Denver, Adams, Arapahoe, and Jefferson All year 141   66   207     Douglas County Douglas All year 101   61   162     Durango La Plata 1/1 - 5/31 93   61   154         6/1 - 9/30 128   61   189         10/1 - 12/31 93   61   154     Fort Collins, Loveland Larimer All year 84   56   140     Glenwood Springs, Grand Junction Garfield, Mesa All year 86   51   137     Montrose Montrose 1/1 - 5/31 79   56   135         6/1 - 9/30 94   56   150         10/1 - 12/31 79   56   135     Silverthorne, Summit 1/1 - 3/31 147   56   203     Breckenridge   4/1 - 11/30 93   56   149         12/1 - 12/31 147   56   203     Steamboat Springs Routt 1/1 - 3/31 179   56   235         4/1 - 11/30 103   56   159         12/1 - 12/31 179   56   235     Telluride San Miguel 1/1 - 3/31 141   71   212         4/1 - 5/31 93   71   164         6/1 - 9/30 124   71   195         10/1 - 11/30 94   71   165         12/1 - 12/31 141   71   212     Vail Eagle 1/1 - 3/31 261   71   332         4/1 - 8/31 130   71   201         9/1 - 11/30 105   71   176         12/1 - 12/31 261   71   332   CT Bridgeport, Danbury Fairfield All year 114   71   185     Cromwell, Old Saybrook Middlesex All year 83   61   144     Hartford Hartford All year 106   56   162     Lakeville, Salisbury Litchfield All year 93   66   159     New Haven New Haven All year 92   61   153     New London, Groton New London All year 98   61   159   Table 3. 1040x instructions 2010 (Effective October 1, 2010 – September 30, 2011) (Continued) Per Diem Locality Computing Maximum Rate State Key City2 County and/or Other Defined Location3,4 Effective Dates Maximum  Lodging  Rate M&IE  Rate Maximum  Per Diem  Rate DC District of Columbia Washington, DC (also the cities of Alexandria, 1/1 - 2/28 $181   $71   $252       Fairfax, and Falls Church, and the counties of 3/1 - 6/30 211   71   282       Arlington and Fairfax, in Virginia; and the counties 7/1 - 8/31 157   71   228       of Montgomery and Prince George's in Maryland) 9/1 - 10/31 211   71   282       (see also Maryland and Virginia) 11/1 - 12/31 181   71   252   DE Dover Kent 1/1 - 4/30 77   46   123         5/1 - 9/30 92   46   138         10/1 - 12/31 77   46   123     Lewes Sussex 1/1 - 6/30 82   46   128         7/1 - 8/31 123   46   169         9/1 - 12/31 82   46   128     Wilmington New Castle All year 109   56   165   FL Altamonte Springs Seminole All year 80   61   141     Boca Raton, Delray Palm Beach 1/1 - 4/30 111   71   182     Beach, Jupiter   5/1 - 12/31 82   71   153     Bradenton Manatee 1/1 - 4/30 100   56   156         5/1 - 12/31 84   56   140     Cocoa Beach Brevard All year 99   51   150     Daytona Beach Volusia 1/1 - 1/31 84   51   135         2/1 - 7/31 107   51   158         8/1 - 12/31 84   51   135     Fort Lauderdale Broward 1/1 - 2/28 173   71   244         3/1 - 5/31 149   71   220         6/1 - 9/30 103   71   174         10/1 - 12/31 124   71   195     Fort Myers Lee 1/1 - 4/30 115   56   171         5/1 - 12/31 87   56   143     Fort Walton Beach, Okaloosa, Walton 1/1 - 2/28 78   51   129     DeFuniak Springs   3/1 - 5/31 126   51   177         6/1 - 7/31 164   51   215         8/1 - 10/31 112   51   163         11/1 - 12/31 78   51   129     Gainesville Alachua All year 89   51   140     Gulf Breeze Santa Rosa 1/1 - 2/28 92   51   143         3/1 - 5/31 114   51   165         6/1 - 8/31 140   51   191         9/1 - 12/31 92   51   143     Jacksonville, Jacksonville Beach, Mayport Naval Station Duval, Nassau; City of Jacksonville All year 82   51   133     Key West Monroe 1/1 - 1/31 193   71   264         2/1 - 4/30 209   71   280         5/1 - 11/30 145   71   216         12/1 - 12/31 193   71   264     Kissimmee Osceola 1/1 - 5/31 84   46   130         6/1 - 8/31 77   46   123         9/1 - 12/31 84   46   130     Lakeland Polk All year 81   46   127   Table 3. 1040x instructions 2010 (Effective October 1, 2010 – September 30, 2011) (Continued) Per Diem Locality Computing Maximum Rate State Key City2 County and/or Other Defined Location3,4 Effective Dates Maximum  Lodging  Rate M&IE  Rate Maximum  Per Diem  Rate FL Miami Miami-Dade 1/1 - 3/31 $151   $66   $217         4/1 - 5/31 128   66   194         6/1 - 11/30 104   66   170         12/1 - 12/31 151   66   217     Naples Collier 1/1 - 4/30 155   61   216         5/1 - 9/30 101   61   162         10/1 - 12/31 111   61   172     Orlando Orange 1/1 - 5/31 104   56   160         6/1 - 12/31 90   56   146     Panama City Bay 1/1 - 2/28 77   51   128         3/1 - 7/31 110   51   161         8/1 - 12/31 77   51   128     Pensacola, Pensacola Beach Escambia All year 103   46   149     Punta Gorda Charlotte 1/1 - 1/31 77   51   128         2/1 - 4/30 88   51   139         5/1 - 12/31 77   51   128     Sarasota Sarasota 1/1 - 4/30 110   56   166         5/1 - 12/31 86   56   142     Sebring Highlands 1/1 - 3/31 123   46   169         4/1 - 12/31 82   46   128     St. 1040x instructions 2010 Augustine St. 1040x instructions 2010 Johns All year 97   56   153     Stuart Martin 1/1 - 4/30 102   51   153         5/1 - 12/31 82   51   133     Tallahassee Leon All year 87   46   133     Tampa, St. 1040x instructions 2010 Petersburg Pinellas, Hillsborough 1/1 - 4/30 108   51   159         5/1 - 12/31 92   51   143     Vero Beach Indian River 1/1 - 1/31 83   51   134         2/1 - 3/31 99   51   150         4/1 - 12/31 83   51   134   GA Athens Clarke All year 93   46   139     Atlanta Fulton, DeKalb, Cobb All year 132   56   188     Augusta Richmond All year 84   51   135     Columbus Muscogee All year 85   46   131     Jekyll Island, Brunswick Glynn 1/1 - 3/31 92   56   148         4/1 - 11/30 136   56   192         12/1 - 12/31 92   56   148     Savannah Chatham All year 97   56   153   IA Cedar Rapids Linn All year 81   51   132     Des Moines Polk All year 83   51   134     West Des Moines Dallas All year 95   51   146   ID Bonner's Ferry, Boundary, Bonner, Shoshone 1/1 - 6/30 77   61   138     Sandpoint   7/1 - 8/31 99   61   160         9/1 - 12/31 77   61   138     Coeur d'Alene Kootenai 1/1 - 5/31 77   61   138         6/1 - 8/31 105   61   166         9/1 - 12/31 77   61   138     Driggs, Idaho Falls Teton, Bonneville, Fremont All year 78   46   124   Table 3. 1040x instructions 2010 (Effective October 1, 2010 – September 30, 2011) (Continued) Per Diem Locality Computing Maximum Rate State Key City2 County and/or Other Defined Location3,4 Effective Dates Maximum  Lodging  Rate M&IE  Rate Maximum  Per Diem  Rate ID Sun Valley, Ketchum Blaine 1/1 - 5/31 $79   $71   $150         6/1 - 8/31 95   71   166         9/1 - 12/31 79   71   150   IL Bolingbrook, Romeoville, Lemont Will All year 82   51   133     Chicago Cook, Lake 1/1 - 3/31 128   71   199         4/1 - 6/30 166   71   237         7/1 - 8/31 146   71   217         9/1 - 11/30 173   71   244         12/1 - 12/31 128   71   199     Oakbrook Terrace DuPage All year 92   61   153     O'Fallon, Fairview Bond, Calhoun, Clinton, Jersey, Macoupin, All year 105   56   161     Heights, Collinsville Madison, Monroe, St. 1040x instructions 2010 Clair                 Springfield Sangamon All year 82   56   138   IN Bloomington Monroe All year 91   56   147     Fort Wayne Allen All year 81   56   137     Hammond, Munster, Merrillville Lake All year 85   46   131     Indianapolis, Carmel Marion, Hamilton; Fort Benjamin Harrison All year 91   61   152     Lafayette Tippecanoe All year 80   51   131     South Bend St. 1040x instructions 2010 Joseph All year 87   56   143     Valparaiso, Burlington Beach Porter All year 79   51   130   KS Kansas City, Overland Park Wyandotte, Johnson, Leavenworth All year 99   61   160     Wichita Sedgwick All year 89   56   145   KY Boone County Boone All year 88   51   139     Kenton County Kenton All year 115   56   171     Lexington Fayette All year 89   61   150     Louisville Jefferson 1/1 - 5/31 101   61   162         6/1 - 8/31 95   61   156         9/1 - 12/31 101   61   162   LA Baton Rouge East Baton Rouge Parish All year 96   56   152     Covington, Slidell St. 1040x instructions 2010 Tammany Parish All year 88   56   144     Lafayette Lafayette Consolidated Government All year 87   56   143     Lake Charles Calcasieu Parish All year 79   61   140     New Orleans Orleans, Jefferson, Plaquemines, and 1/1 - 6/30 131   71   202       St. 1040x instructions 2010 Bernard Parishes 7/1 - 9/30 98   71   169         10/1 - 12/31 131   71   202   MA Andover Essex All year 83   56   139     Boston, Cambridge Suffolk; City of Cambridge 1/1 - 3/31 154   71   225         4/1 - 6/30 190   71   261         7/1 - 8/31 171   71   242         9/1 - 10/31 206   71   277         11/1 - 12/31 154   71   225     Burlington, Woburn Middlesex less the city of Cambridge All year 108   71   179   Table 3. 1040x instructions 2010 (Effective October 1, 2010 – September 30, 2011) (Continued) Per Diem Locality Computing Maximum Rate State Key City2 County and/or Other Defined Location3,4 Effective Dates Maximum  Lodging  Rate M&IE  Rate Maximum  Per Diem  Rate MA Falmouth City limits of Falmouth 1/1 - 4/30 $95   $51   $146         5/1 - 6/30 107   51   158         7/1 - 8/31 161   51   212         9/1 - 12/31 95   51   146     Hyannis Barnstable less the city of Falmouth 1/1 - 6/30 85   56   141         7/1 - 8/31 123   56   179         9/1 - 12/31 85   56   141     Martha's Vineyard Dukes 1/1 - 6/30 114   71   185         7/1 - 8/31 201   71   272         9/1 - 12/31 114   71   185     Nantucket Nantucket 1/1 - 5/31 128   61   189         6/1 - 9/30 243   61   304         10/1 - 12/31 128   61   189     Northampton Hampshire All year 92   56   148     Pittsfield Berkshire 1/1 - 6/30 107   61   168         7/1 - 8/31 126   61   187         9/1 - 12/31 107   61   168     Plymouth, Taunton, New Bedford Plymouth, Bristol All year 88   56   144     Quincy Norfolk All year 114   51   165     Springfield Hampden All year 93   51   144     Worcester Worcester All year 90   61   151   MD Counties of Montgomery   1/1 - 2/28 181   71   252     and Prince George's   3/1 - 6/30 211   71   282         7/1 - 8/31 157   71   228         9/1 - 10/31 211   71   282         11/1 - 12/31 181   71   252     Aberdeen, Bel Air, Belcamp Harford All year 84   56   140     Annapolis Anne Arundel 1/1 - 4/30 100   61   161         5/1 - 10/31 114   61   175         11/1 - 12/31 100   61   161     Baltimore City Baltimore City 1/1 - 2/28 121   71   192         3/1 - 11/30 144   71   215         12/1 - 12/31 121   71   192     Baltimore County Baltimore All year 99   61   160     Cambridge, St. 1040x instructions 2010 Michaels Dorchester, Talbot 1/1 - 3/31 101   61   162         4/1 - 5/31 119   61   180         6/1 - 8/31 170   61   231         9/1 - 10/31 131   61   192         11/1 - 12/31 101   61   162     Centreville Queen Anne All year 103   51   154     Columbia Howard All year 105   61   166     Frederick Frederick All year 92   56   148     Hagerstown Washington All year 78   56   134     La Plata, Indian Head Charles All year 84   51   135     Lexington Park, Leonardtown, Lusby St. 1040x instructions 2010 Mary's, Calvert All year 102   61   163   Table 3. 1040x instructions 2010 (Effective October 1, 2010 – September 30, 2011) (Continued) Per Diem Locality Computing Maximum Rate State Key City2 County and/or Other Defined Location3,4 Effective Dates Maximum  Lodging  Rate M&IE  Rate Maximum  Per Diem  Rate MD Ocean City Worcester 1/1 - 3/31 $77   $71   $148         4/1 - 5/31 88   71   159         6/1 - 8/31 192   71   263         9/1 - 10/31 105   71   176         11/1 - 12/31 77   71   148   ME Bar Harbor Hancock 1/1 - 6/30 86   61   147         7/1 - 8/31 140   61   201         9/1 - 10/31 112   61   173         11/1 - 12/31 86   61   147     Kennebunk, Kittery, York 1/1 - 3/31 77   56   133     Sanford   4/1 - 6/30 86   56   142         7/1 - 8/31 122   56   178         9/1 - 10/31 96   56   152         11/1 - 12/31 77   56   133     Portland Cumberland, Sagadahoc 1/1 - 6/30 89   56   145         7/1 - 9/30 109   56   165         10/1 - 12/31 89   56   145     Rockport Knox 1/1 - 6/30 80   56   136         7/1 - 9/30 106   56   162         10/1 - 12/31 80   56   136   MI Ann Arbor Washtenaw All year 87   56   143     Detroit Wayne All year 95   56   151     East Lansing, Lansing Ingham, Eaton All year 82   51   133     Grand Rapids Kent All year 81   51   132     Holland Ottawa All year 81   56   137     Kalamazoo, Battle Creek Kalamazoo, Calhoun All year 87   51   138     Midland Midland All year 90   46   136     Muskegon Muskegon 1/1 - 5/31 77   46   123         6/1 - 8/31 101   46   147         9/1 - 12/31 77   46   123     Petoskey Emmet 1/1 - 6/30 77   51   128         7/1 - 8/31 99   51   150         9/1 - 12/31 77   51   128     Pontiac, Auburn Hills Oakland All year 87   56   143     South Haven Van Buren 1/1 - 5/31 77   56   133         6/1 - 8/31 89   56   145         9/1 - 12/31 77   56   133     Traverse City, Leland Grand Traverse, Leelanau 1/1 - 6/30 77   51   128         7/1 - 8/31 109   51   160         9/1 - 12/31 77   51   128   MN Duluth St. 1040x instructions 2010 Louis 1/1 - 5/31 80   56   136         6/1 - 10/31 99   56   155         11/1 - 12/31 80   56   136     Eagan, Burnsville, Mendota Heights Dakota All year 82   56   138     Minneapolis, St. 1040x instructions 2010 Paul Hennepin, Ramsey All year 120   71   191     Rochester Olmsted All year 95   51   146   MO Columbia Boone All Year 78   51   129   Table 3. 1040x instructions 2010 (Effective October 1, 2010 – September 30, 2011) (Continued) Per Diem Locality Computing Maximum Rate State Key City2 County and/or Other Defined Location3,4 Effective Dates Maximum  Lodging  Rate M&IE  Rate Maximum  Per Diem  Rate MO Kansas City Jackson, Clay, Cass, Platte All year $99   $61   $160     St. 1040x instructions 2010 Louis St. 1040x instructions 2010 Louis, St. 1040x instructions 2010 Charles, Crawford, Franklin, Jefferson, Lincoln, Warren, Washington; St. 1040x instructions 2010 Louis City All year 105   66   171     St. 1040x instructions 2010 Robert Pulaski All year 78   46   124   MS Gulfport, Biloxi Harrison All year 82   56   138     Hattiesburg Forrest, Lamar All year 85   51   136     Oxford Lafayette County Before 4/01/11 77   46   123         After 3/31/11 96   51   147     Robinsonville Tunica All year 82   51   133     Southaven Desoto All year 88   46   134     Starkville Oktibbeha All year 91   46   137   MT Big Sky, West Gallatin 1/1 - 5/31 80   61   141     Yellowstone   6/1 - 8/31 105   61   166         9/1 - 12/31 80   61   141     Butte Silver Bow All year 86   51   137     Helena Lewis and Clark All year 81   56   137     Missoula, Polson, Missoula, Lake, Flathead 1/1 - 6/30 87   51   138     Kalispell   7/1 - 8/31 104   51   155         9/1 - 12/31 87   51   138   NC Asheville Buncombe 1/1 - 6/30 81   51   132         7/1 - 10/31 90   51   141         11/1 - 12/31 81   51   132     Atlantic Beach, Carteret 1/1 - 5/31 81   56   137     Morehead City   6/1 - 8/31 110   56   166         9/1 - 12/31 81   56   137     Chapel Hill Orange All year 86   56   142     Charlotte Mecklenburg All year 95   51   146     Durham Durham All year 89   51   140     Fayetteville Cumberland All year 91   51   142     Greensboro Guilford All year 85   56   141     Greenville Pitt All year 79   51   130     Kill Devil Dare 1/1 - 5/31 90   61   151         6/1 - 8/31 143   61   204         9/1 - 12/31 90   61   151     New Bern, Havelock Craven All year 94   46   140     Raleigh Wake All year 90   66   156     Wilmington New Hanover All year 97   56   153     Winston-Salem Forsyth All year 83   56   139   ND The standard CONUS rate of $123 ($77 for lodging and $46 for M&IE) applies to all per diem localities in North Dakota. 1040x instructions 2010 NE Omaha Douglas 1/1 - 4/30 93   61   154         5/1 - 6/30 104   61   165         7/1 - 12/31 93   61   154   NH Concord Merrimack 1/1 - 5/31 82   51   133         6/1 - 9/30 92   51   143         10/1 - 12/31 82   51   133     Conway Carroll 1/1 - 2/28 116   61   177         3/1 - 6/30 102   61   163         7/1 - 8/31 141   61   202         9/1 - 12/31 116   61   177   Table 3. 1040x instructions 2010 (Effective October 1, 2010 – September 30, 2011) (Continued) Per Diem Locality Computing Maximum Rate State Key City2 County and/or Other Defined Location3,4 Effective Dates Maximum  Lodging  Rate M&IE  Rate Maximum  Per Diem  Rate NH Durham Strafford All year $94   $46   $140     Laconia Belknap 1/1 - 5/31 85   51   136         6/1 - 10/31 101   51   152         11/1 - 12/31 85   51   136     Lebanon, Lincoln, West Lebanon Grafton, Sullivan All year 101   56   157     Manchester Hillsborough All year 86   56   142     Portsmouth Rockingham 1/1 - 6/30 102   61   163         7/1 - 9/30 126   61   187         10/1 - 12/31 102   61   163   NJ Atlantic City, Cape Atlantic, Cape May 1/1 - 3/31 87   66   153     May, Ocean City   4/1 - 12/31 100   66   166     Belle Mead Somerset All year 116   56   172     Cherry Hill, Moorestown Camden, Burlington All year 92   61   153     Eatontown, Freehold Monmouth All year 110   56   166     Edison, Piscataway Middlesex All year 109   51   160     Flemington Hunterdon All year 107   61   168     Newark Bergen, Essex, Hudson, Passaic All year 116   61   177     Parsippany Morris All year 125   56   181     Princeton, Trenton Mercer All year 126   61   187     Springfield, Cranford, New Providence Union All year 94   56   150     Toms River Ocean 1/1 - 5/31 78   51   129         6/1 - 8/31 99   51   150         9/1 - 12/31 78   51   129   NM Albuquerque Bernalillo All year 81   56   137     Las Cruces Dona Ana All year 79   56   135     Los Alamos Los Alamos All year 86   51   137     Santa Fe Santa Fe 1/1 - 6/30 82   71   153         7/1 - 10/31 100   71   171         11/1 - 12/31 82   71   153     Taos Taos All year 87   66   153   NV Incline Village, Washoe 1/1 - 6/30 98   51   149     Reno, Sparks   7/1 - 8/31 123   51   174         9/1 - 12/31 98   51   149     Las Vegas Clark All year 93   71   164     Stateline, Carson City Douglas, Carson City All year 93   61   154   NY Albany Albany All year 104   61   165     Binghamton, Owego Broome, Tioga All year 90   46   136     Buffalo Erie All year 98   56   154     Floral Park, Garden City, Great Neck Nassau All year 143   66   209     Glens Falls Warren 1/1 - 6/30 92   66   158         7/1 - 8/31 133   66   199         9/1 - 12/31 92   66   158     Ithaca, Waterloo, Romulus Tompkins, Seneca All year 114   46   160   Table 3. 1040x instructions 2010 (Effective October 1, 2010 – September 30, 2011) (Continued) Per Diem Locality Computing Maximum Rate State Key City2 County and/or Other Defined Location3,4 Effective Dates Maximum  Lodging  Rate M&IE  Rate Maximum  Per Diem  Rate NY Kingston Ulster All year $101   $66   $167     Lake Placid Essex 1/1 - 2/28 124   61   185         3/1 - 6/30 99   61   160         7/1 - 8/31 145   61   206         9/1 - 11/30 103   61   164         12/1 - 12/31 124   61   185     Manhattan (includes Bronx, Kings, New York, Queens, Richmond Before 1/1/11:               the boroughs of   10/1 - 12/31 269   71   340     Manhattan, Brooklyn   After 12/31/10:               the Bronx, Queens, and Staten Island)   1/1 - 3/31 192   71   263         4/1 - 5/31 212   71   283         6/1 - 8/31 224   71   295         9/1 - 12/31 295   71   366     Niagara Falls Niagara 1/1 - 5/31 77   51   128         6/1 - 8/31 100   51   151         9/1 - 12/31 77   51   128     Nyack, Palisades Rockland All year 103   61   164     Poughkeepsie Dutchess All year 95   66   161     Riverhead, Suffolk 1/1 - 5/31 114   71   185     Ronkonkoma, Melville   6/1 - 8/31 137   71   208         9/1 - 12/31 114   71   185     Rochester Monroe All year 96   51   147     Saratoga Springs, Saratoga, Schenectady 1/1 - 6/30 104   56   160     Schenectady   7/1 - 8/31 151   56   207         9/1 - 12/31 104   56   160     Syracuse, Oswego Onondaga, Oswego All year 93   56   149     Tarrytown, White Plains, New Rochelle Westchester All year 142   71   213     Troy Rensselaer All year 94   51   145     West Point Orange All year 109   51   160   OH Akron Summit All year 85   51   136     Canton Stark All year 88   51   139     Cincinnati Hamilton, Clermont All year 115   56   171     Cleveland Cuyahoga All year 102   56   158     Columbus Franklin All year 94   56   150     Dayton, Fairborn Greene, Darke, Montgomery All year 81   56   137     Hamilton Butler, Warren All year 92   51   143     Mentor Lake All year 88   46   134     Rittman Wayne, Medina All year 87   51   138     Sandusky, Bellevue Erie, Huron 1/1 - 5/31 77   46   123         6/1 - 8/31 83   46   129         9/1 - 12/31 77   46   123     Youngstown Mahoning, Trumbull All year 82   51   133   OK Oklahoma City Oklahoma All year 82   66   148     Tulsa Tulsa, Creek, Osage, Rogers All year 80   61   141   OR Ashland, Crater Lake Jackson, Klamath All year 80   56   136     Beaverton Washington All year 90   51   141   Table 3. 1040x instructions 2010 (Effective October 1, 2010 – September 30, 2011) (Continued) Per Diem Locality Computing Maximum Rate State Key City2 County and/or Other Defined Location3,4 Effective Dates Maximum  Lodging  Rate M&IE  Rate Maximum  Per Diem  Rate OR Bend Deschutes 1/1 - 6/30 $88   $61   $149         7/1 - 8/31 110   61   171         9/1 - 12/31 88   61   149     Clackamas Clackamas All year 87   61   148     Eugene, Florence Lane All year 97   51   148     Lincoln City Lincoln 1/1 - 6/30 83   56   139         7/1 - 8/31 104   56   160         9/1 - 12/31 83   56   139     Portland Multnomah All year 113   66   179     Seaside Clatsop 1/1 - 6/30 93   51   144         7/1 - 8/31 130   51   181         9/1 - 12/31 93   51   144   PA Allentown, Easton, Bethlehem Lehigh, Northampton All year 84   51   135     Bucks County Bucks All year 95   71   166     Chester, Radnor, Essington Delaware All year 96   51   147     Erie Erie All year 82   46   128     Gettysburg Adams 1/1 - 3/31 79   51   130         4/1 - 10/31 98   51   149         11/1 - 12/31 79   51   130     Harrisburg, Hershey Dauphin Before 1/1/11:                   10/31 - 12/31 106   51   157         After 12/31/10:                   1/1 - 3/31 106   51   157         3/31 - 5/31 107   51   158         6/1 - 8/31 134   51   185         9/1 - 12/31 107   51   158     Lancaster Lancaster All year 96   56   152     Malvern, Frazer, Berwyn Chester All year 116   51   167     Mechanicsburg Cumberland All year 83   56   139     Montgomery County Montgomery All year 115   66   181     Philadelphia Philadelphia 1/1 - 8/31 136   66   202         9/1 - 11/30 149   66   215         12/1 - 12/31 136   66   202     Pittsburgh Allegheny All year 115   71   186     Reading Berks All year 89   56   145     Scranton Lackawanna All year 80   56   136     State College Centre All year 86   56   142   RI East Greenwich, Warwick, North Kingstown Kent, Washington All year 84   56   140     Jamestown, Middletown, Newport 1/1 - 4/30 96   71   167     Newport   5/1 - 10/31 145   71   216         11/1 - 12/31 96   71   167     Providence, Bristol Providence, Bristol All year 122   71   193   SC Aiken Aiken All year 81   46   127     Charleston Charleston, Berkeley, Dorchester All year 132   56   188     Columbia Richland, Lexington All year 85   51   136     Greenville Greenville All year 82   56   138   Table 3. 1040x instructions 2010 (Effective October 1, 2010 – September 30, 2011) (Continued) Per Diem Locality Computing Maximum Rate State Key City2 County and/or Other Defined Location3,4 Effective Dates Maximum  Lodging  Rate M&IE  Rate Maximum  Per Diem  Rate SC Hilton Head Beaufort 1/1 - 3/31 $87   $61   $148         4/1 - 8/31 127   61   188         9/1 - 10/31 104   61   165         11/1 - 12/31 87   61   148     Myrtle Beach Horry 1/1 - 3/31 77   51   128         4/1 - 5/31 89   51   140         6/1 - 8/31 116   51   167         9/1 - 10/31 80   51   131         11/1 - 12/31 77   51   128   SD Hot Springs Fall River, Custer 1/1 - 5/31 77   46   123         6/1 - 8/31 101   46   147         9/1 - 12/31 77   46   123     Rapid City Pennington 1/1 - 5/31 77   51   128         6/1 - 8/31 121   51   172         9/1 - 12/31 77   51   128     Sturgis, Spearfish Meade, Butte, Lawrence 1/1 - 5/31 77   51   128         6/1 - 8/31 108   51   159         9/1 - 12/31 77   51   128   TN Brentwood, Franklin Williamson All year 94   56   150     Chattanooga Hamilton All year 88   56   144     Knoxville Knox All year 84   56   140     Memphis Shelby All year 96   61   157     Nashville Davidson All year 110   66   176     Oak Ridge Anderson All year 90   46   136   TX Arlington, Fort Worth, Grapevine Tarrant; City limits of Grapevine All year 138   56   194     Austin Travis All year 104   71   175     Beaumont Jefferson All year 86   51   137     College Station Brazos All year 93   56   149     Corpus Christi Nueces All year 87   51   138     Dallas Dallas; City of Dallas All year 107   71   178     El Paso El Paso All year 88   51   139     Galveston Galveston 1/1 - 2/28 84   56   140         3/1 - 8/31 101   56   157         9/1 - 12/31 84   56   140     Greenville Hunt Before 4/01/2011 78   51   129         After 3/31/2011 86   51   137     Houston Montgomery, Fort Bend, Harris; L. 1040x instructions 2010 B. 1040x instructions 2010 Johnson Space Center All year 109   71   180     Laredo Webb All year 78   56   134     McAllen Hidalgo All year 85   56   141     Midland Midland All year 92   51   143     Plano Collin All year 100   61   161     Round Rock Williamson All year 90   51   141     San Antonio Bexar All year 106   66   172     South Padre Island Cameron 1/1 - 5/31 85   56   141         6/1 - 7/31 107   56   163         8/1 - 12/31 85   56   141     Waco McLennan All year 85   51   136   Table 3. 1040x instructions 2010 (Effective October 1, 2010 – September 30, 2011) (Continued) Per Diem Locality Computing Maximum Rate State Key City2 County and/or Other Defined Location3,4 Effective Dates Maximum  Lodging  Rate M&IE  Rate Maximum  Per Diem  Rate UT Moab Grand 1/1 - 2/28 $77   $56   $133         3/1 - 10/31 97   56   153         11/1 - 12/31 77   56   133     Park City Summit 1/1 - 3/31 153   71   224         4/1 - 12/31 89   71   160     Provo Utah All year 80   51   131     Salt Lake City Salt Lake, Tooele All year 95   61   156   VA Cities of Alexandria,   1/1 - 2/28 181   71   252     Fairfax, and Falls   3/1 - 6/30 211   71   282     Church; Counties of   7/1 - 8/31 157   71   228     Arlington and Fairfax   9/1 - 10/31 11/1 - 12/31 211 181   71 71   282 252     Abingdon Washington All year 86   46   132     Blacksburg Montgomery All year 95   46   141     Bowling Green Caroline County Before 4/01/2011 77   46   123         After 3/31/2011 89   56   145     Charlottesville Albemarle, Greene; City of Charlottesville All year 113   56   169     Chesapeake, Suffolk City of Chesapeake, City of Suffolk 1/1 - 5/31 78   56   134         6/1 - 8/31 88   56   144         9/1 - 12/31 78   56   134     Chesterfield, Henrico Counties Chesterfield, Henrico All year 87   51   138     Fredericksburg Stafford, Spotsylvania; City of Fredericksburg All year 89   56   145     James City, York, James City and York Counties; City of 1/1 - 3/31 77   51   128     Williamsburg Williamsburg 4/1 - 8/31 91   51   142         9/1 - 12/31 77   51   128     Loudoun County Loudoun All year 111   61   172     Lynchburg Campbell; City of Lynchburg All year 79   51   130     Manassas City of Manassas All year 82   46   128     Norfolk, Portsmouth City of Norfolk, City of Portsmouth All year 92   61   153     Prince William County Prince William All year 89   56   145     Richmond City City of Richmond All year 114   66   180     Roanoke City limits of Roanoke All year 99   51   150     Virginia Beach City of Virginia Beach 1/1 - 5/31 89   56   145         6/1 - 8/31 144   56   200         9/1 - 12/31 89   56   145     Wallops Island Accomack 1/1 - 6/30 84   56   140         7/1 - 8/31 125   56   181         9/1 - 12/31 84   56   140     Warrenton Fauquier All year 93   46   139   VT Burlington, St. 1040x instructions 2010 Albans Chittenden, Franklin 1/1 - 5/31 92   66   158         6/1 - 10/31 111   66   177         11/1 - 12/31 92   66   158     Manchester Bennington All year 87   71   158     Middlebury Addison All year 115   61   176     Montpelier Washington All year 100   61   161     Stowe Lamoille 1/1 - 3/31 133   71   204         4/1 - 5/31 101   71   172         6/1 - 12/31 133   71   204   Table 3. 1040x instructions 2010 (Effective October 1, 2010 – September 30, 2011) (Continued) Per Diem Locality Computing Maximum Rate State Key City2 County and/or Other Defined Location3,4 Effective Dates Maximum  Lodging  Rate M&IE  Rate Maximum  Per Diem  Rate VT White River Junction Windsor 1/1 - 2/28 $101   $56   $157         3/1 - 5/31 89   56   145         6/1 - 12/31 101   56   157   WA Anacortes, Coupeville, Oak Harbor San Juan, Skagit, Island All year 90   61   151     Bremerton Kitsap All year 78   66   144     Everett, Lynnwood Snohomish All year 94   61   155     Ocean Shores Grays Harbor 1/1 - 6/30 88   51   139         7/1 - 8/31 107   51   158         9/1 - 12/31 88   51   139     Olympia, Tumwater Thurston All year 86   61   147     Port Angeles, Port Clallam, Jefferson 1/1 - 6/30 94   61   155     Townsend   7/1 - 8/31 123   61   184         9/1 - 12/31 94   61   155     Richland Benton All year 88   46   134     Seattle King All year 139   71   210     Spokane Spokane All year 86   61   147     Tacoma Pierce All year 109   61   170     Vancouver Clark, Cowlitz, Skamania All year 113   56   169   WI Appleton Outagamie All year 81   46   127     Brookfield, Racine Waukesha, Racine All year 87   56   143     Lake Geneva Walworth 1/1 - 5/31 90   51   141         6/1 - 9/30 122   51   173         10/1 - 12/31 90   51   141     Madison Dane All year 88   56   144     Milwaukee Milwaukee All year 95   61   156     Sturgeon Bay Door 1/1 - 6/30 77   56   133         7/1 - 9/30 86   56   142         10/1 - 12/31 77   56   133     Wisconsin Dells Columbia 1/1 - 6/30 77   61   138         7/1 - 8/31 85   61   146         9/1 - 12/31 77   61   138   WV Charleston Kanawha All year 95   51   146     Morgantown Monongalia All year 83   46   129     Shepherdstown Jefferson, Berkeley All year 82   51   133     Wheeling Ohio All year 94   46   140   WY Cody Park 1/1 - 5/31 84   51   135         6/1 - 9/30 117   51   168         10/1 - 12/31 84   51   135     Evanston, Rock Springs Uinta, Sweetwater All year 80   51   131   Table 3. 1040x instructions 2010 (Effective October 1, 2010 – September 30, 2011) (Continued) Per Diem Locality Computing Maximum Rate State Key City2 County and/or Other Defined Location3,4 Effective Dates Maximum  Lodging  Rate M&IE  Rate Maximum  Per Diem  Rate WY Gillette Campbell 1/1 - 5/31 $91   $51   $142         6/1 - 8/31 109   51   160         9/1 - 12/31 91   51   142     Jackson, Pinedale Teton, Sublette 1/1 - 6/30 109   56   165         7/1 - 8/31 158   56   214         9/1 - 12/31 109   56   165     Sheridan Sheridan 1/1 - 5/31 77   56   133         6/1 - 8/31 89   56   145         9/1 - 12/31 77   56   133   1Transition rule. 1040x instructions 2010 In lieu of the updated GSA rates that will be effective October 1, 2011, taxpayers may continue to use the CONUS rates in effect for the first 9 months of 2011 (Table 3) for expenses of all CONUS travel away from home that are paid or incurred during calendar year 2011. 1040x instructions 2010 A taxpayer must consistently use either these rates or the updated rates for the period of October 1, 2011, through December 31, 2011. 1040x instructions 2010 See Transition Rules under How To Use Per Diem Rate Tables for an example. 1040x instructions 2010    2Unless otherwise specified, the per diem locality is defined as “all locations within, or entirely surrounded by, the corporate limits of the key city, including independent entities located within those boundaries. 1040x instructions 2010 ”   3Per diem localities with county definitions shall include “all locations within, or entirely surrounded by, the corporate limits of the key city as well as the boundaries of the listed counties, including independent entities located within the boundaries of the key city and the listed counties (unless otherwise listed separately). 1040x instructions 2010 ” 4When a military installation or Government-related facility (whether or not specifically named) is located partially within more than one city or county boundary, the applicable per diem rate for the entire installation or facility is the higher of the two rates which apply to the cities and/or counties, even though part(s) of such activities may be located outside the defined per diem locality. 1040x instructions 2010   Note: Recognizing that all locations are not incorporated cities, the term “city limits” has been used as a general phrase to denote the commonly recognized local boundaries of the location cited. 1040x instructions 2010         Table 4. 1040x instructions 2010 Maximum Federal Per Diem Rates (Effective October 1, 2011 – September 30, 2012)1 Note: The standard rate of $123 ($77 for lodging and $46 for M&IE) applies to all locations within the continental United States (CONUS) not specifically listed below or encompassed by the boundary definition of a listed point. 1040x instructions 2010 However, the standard CONUS rate applies to all locations within CONUS, including those defined below, for certain relocation allowances. 1040x instructions 2010 (See parts 302-2, 302-4, and 302-5 of 41 CFR. 1040x instructions 2010 ) Table 4 lists all per diem rates alphabetically by state abbreviation. 1040x instructions 2010 Click on a link below to find rates for your state: Alabama, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, District of Columbia, Florida, Georgia, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas , Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, Wyoming Per Diem Locality Computing Maximum Rate State Key City2 County and/or Other Defined Location3,4 Effective Dates Maximum  Lodging  Rate M&IE  Rate Maximum  Per Diem  Rate AL Birmingham Jefferson, Shelby All year $86   $56   $142     Gulf Shores Baldwin 1/1 - 5/31 100   51   151         6/1 - 7/31 117   51   168         8/1 - 12/31 100   51   151     Huntsville Madison, Limestone All year 87   51   138     Mobile Mobile All year 94   51   145     Montgomery/Prattville Montgomery/Autauga All year 80   51   131   AR Hot Springs Garland All year 101   46   147     Little Rock Pulaski All year 86   61   147   AZ Grand Canyon, Flagstaff Coconino (except city limits of Sedona), Yavapai 1/1 - 2/29 77   66   143         3/1 - 10/31 97   66   163         11/1 - 12/31 77   66   143     Kayenta Navajo 1/1 - 4/30 79   46   125         5/1 - 9/30 90   46   136         10/1 - 12/31 79   46   125     Phoenix, Scottsdale Maricopa 1/1 - 5/31 128   71   199         6/1 - 8/31 80   71   151         9/1 - 12/31 105   71   176     Sedona City limits of Sedona 1/1 - 2/29 127   66   193         3/1 - 4/30 145   66   211         5/1 - 12/31 127   66   193     Sierra Vista Cochise All year 83   46   129     Tucson Pima 1/1 - 1/31 90   56   146         2/1 - 5/31 103   56   159         6/1 - 8/31 77   56   133         9/1 - 12/31 90   56   146     Yuma Yuma All year 78   46
Print - Click this link to Print this page

New Voluntary Closing Agreement Program Request Form

The Internal Revenue Service released the new Form 14429, Tax Exempt Bonds Voluntary Closing Agreement Program Request. Completion, in full, of the new form is a requirement before the submission to the Tax Exempt Bonds Voluntary Closing Agreement Program (TEB VCAP) is accepted. The purpose of the new form is to assist issuers in organizing TEB VCAP submission requests and to ensure that their submissions are complete, in accordance with the requirements under Notice 2008-31, 2008-11 I.R.B. 592 and IRM 7.2.3. Use of the new form should avoid delays in processing a request because of missing information as well as facilitating the process for accepting and assigning requests.  

The Tax Exempt Bonds (TEB) function, within the Tax Exempt & Government Entities Division, administers TEB VCAP. Generally, TEB VCAP provides remedies for issuers of tax-advantaged bonds (tax-exempt bonds, tax credit bonds, and direct pay bonds) who voluntarily come forward to resolve a violation of the federal tax requirements applicable to a bond issue that the issuer cannot self-correct under programs described in the Income Tax Regulations (Regulations) or other published guidance. An issuer will generally receive a more favorable treatment in resolving its tax violation under TEB VCAP than it would for the same tax violation discovered during an IRS examination of their bonds. As such, TEB VCAP encourages issuers, and other parties involved in tax-advantaged bond transactions, to exercise due diligence in complying with the applicable federal tax laws. TEB VCAP also provides a vehicle to correct violations as expeditiously as possible before discovery of the violations during an IRS examination.

The improvement of the TEB VCAP program, through procedural enhancements, is a TEB commitment. The new Form 14429 is an example of the latest effort by TEB to improve the administration of the TEB VCAP program and further this commitment. Last year, TEB provided web content to provide more information about the TEB VCAP program as well as descriptions (provided in IRM 7.2.3.4) of the resolution standards for identified violations both for tax-exempt and certain direct pay bonds. TEB believes that these resolution standards encourage due diligence by providing certainty, to issuers and other parties, in understanding the methodologies available to resolve eligible violations.

IRM Section 7.2.3 provides additional procedural guidance on how to submit a TEB VCAP request. See TEB Voluntary Compliance under Information for the Tax Exempt Bond Community on TEB's website.

Page Last Reviewed or Updated: 04-Sep-2013

The 1040x Instructions 2010

1040x instructions 2010 Publication 523 - Main Content Table of Contents Main HomeVacant land. 1040x instructions 2010 Factors used to determine main home. 1040x instructions 2010 Figuring Gain or LossSelling Price Amount Realized Adjusted Basis Amount of Gain or Loss Dispositions Other Than Sales Determining BasisCost As Basis Basis Other Than Cost Adjusted Basis Excluding the GainMaximum Exclusion Ownership and Use Tests Reduced Maximum Exclusion Nonqualified Use Business Use or Rental of HomeUnrecaptured section 1250 gain. 1040x instructions 2010 Property Used Partly for Business or Rental Reporting the SaleSeller-financed mortgage. 1040x instructions 2010 Individual taxpayer identification number (ITIN). 1040x instructions 2010 More information. 1040x instructions 2010 Comprehensive Examples Special SituationsException for sales to related persons. 1040x instructions 2010 Deducting Taxes in the Year of SaleForm 1099-S. 1040x instructions 2010 More information. 1040x instructions 2010 Recapturing (Paying Back) a Federal Mortgage Subsidy Recapture of First-Time Homebuyer CreditExample. 1040x instructions 2010 Worksheets How To Get Tax HelpLow Income Taxpayer Clinics Main Home This section explains the term “main home. 1040x instructions 2010 ” Usually, the home you live in most of the time is your main home and can be a: House, Houseboat, Mobile home, Cooperative apartment, or Condominium. 1040x instructions 2010 To exclude gain under the rules in this publication, you in most cases must have owned and lived in the property as your main home for at least 2 years during the 5-year period ending on the date of sale. 1040x instructions 2010 Land. 1040x instructions 2010   If you sell the land on which your main home is located, but not the house itself, you cannot exclude any gain you have from the sale of the land. 1040x instructions 2010 Example. 1040x instructions 2010 You buy a piece of land and move your main home to it. 1040x instructions 2010 Then, you sell the land on which your main home was located. 1040x instructions 2010 This sale is not considered a sale of your main home, and you cannot exclude any gain on the sale of the land. 1040x instructions 2010 Vacant land. 1040x instructions 2010   The sale of vacant land is not a sale of your main home unless: The vacant land is adjacent to land containing your home, You owned and used the vacant land as part of your main home, The separate sale of your home satisfies the requirements for exclusion and occurs within 2 years before or 2 years after the date of the sale of the vacant land, and The other requirements for excluding gain from the sale of a main home have been satisfied with respect to the vacant land. 1040x instructions 2010 If these requirements are met, the sale of the home and the sale of the vacant land are treated as one sale and only one maximum exclusion can be applied to any gain. 1040x instructions 2010 See Excluding the Gain , later. 1040x instructions 2010 The destruction of your home is treated as a sale of your home. 1040x instructions 2010 As a result, you may be able to meet these requirements if you sell vacant land used as a part of your main home within 2 years from the date of the destruction of your main home. 1040x instructions 2010 For information, see Publication 547. 1040x instructions 2010 More than one home. 1040x instructions 2010   If you have more than one home, you can exclude gain only from the sale of your main home. 1040x instructions 2010 You must include in income the gain from the sale of any other home. 1040x instructions 2010 If you have two homes and live in each of them, your main home is ordinarily the one you live in most of the time during the year. 1040x instructions 2010 Example 1. 1040x instructions 2010 You own two homes, one in New York and one in Florida. 1040x instructions 2010 From 2009 through 2013, you live in the New York home for 7 months and in the Florida residence for 5 months of each year. 1040x instructions 2010 In the absence of facts and circumstances indicating otherwise, the New York home is your main home. 1040x instructions 2010 You would be eligible to exclude the gain from the sale of the New York home but not of the Florida home in 2013. 1040x instructions 2010 Example 2. 1040x instructions 2010 You own a house, but you live in another house that you rent. 1040x instructions 2010 The rented house is your main home. 1040x instructions 2010 Example 3. 1040x instructions 2010 You own two homes, one in Virginia and one in New Hampshire. 1040x instructions 2010 In 2009 and 2010, you lived in the Virginia home. 1040x instructions 2010 In 2011 and 2012, you lived in the New Hampshire home. 1040x instructions 2010 In 2013, you lived again in the Virginia home. 1040x instructions 2010 Your main home in 2009, 2010, and 2013 is the Virginia home. 1040x instructions 2010 Your main home in 2011 and 2012 is the New Hampshire home. 1040x instructions 2010 You would be eligible to exclude gain from the sale of either home (but not both) in 2013. 1040x instructions 2010 Factors used to determine main home. 1040x instructions 2010   In addition to the amount of time you live in each home, other factors are relevant in determining which home is your main home. 1040x instructions 2010 Those factors include the following. 1040x instructions 2010 Your place of employment. 1040x instructions 2010 The location of your family members' main home. 1040x instructions 2010 Your mailing address for bills and correspondence. 1040x instructions 2010 The address listed on your: Federal and state tax returns, Driver's license, Car registration, and Voter registration card. 1040x instructions 2010 The location of the banks you use. 1040x instructions 2010 The location of recreational clubs and religious organizations of which you are a member. 1040x instructions 2010 Property used partly as your main home. 1040x instructions 2010   If you use only part of the property as your main home, the rules discussed in this publication apply only to the gain or loss on the sale of that part of the property. 1040x instructions 2010 For details, see Business Use or Rental of Home , later. 1040x instructions 2010 Figuring Gain or Loss To figure the gain or loss on the sale of your main home, you must know the selling price, the amount realized, and the adjusted basis. 1040x instructions 2010 Subtract the adjusted basis from the amount realized to get your gain or loss. 1040x instructions 2010     Selling price     − Selling expenses       Amount realized     − Adjusted basis       Gain or loss   Gain. 1040x instructions 2010   Gain is the excess of the amount realized over the adjusted basis of the property. 1040x instructions 2010 Loss. 1040x instructions 2010   Loss is the excess of the adjusted basis over the amount realized for the property. 1040x instructions 2010 Selling Price The selling price is the total amount you receive for your home. 1040x instructions 2010 It includes money and the fair market value of any other property or any other services you receive and all notes, mortgages or other debts assumed by the buyer as part of the sale. 1040x instructions 2010 Personal property. 1040x instructions 2010   The selling price of your home does not include amounts you received for personal property sold with your home. 1040x instructions 2010 Personal property is property that is not a permanent part of the home. 1040x instructions 2010 Examples are furniture, draperies, rugs, a washer and dryer, and lawn equipment. 1040x instructions 2010 Separately stated amounts you received for these items should not be shown on Form 1099-S (discussed later). 1040x instructions 2010 Any gains from sales of personal property must be included in your income, but not as part of the sale of your home. 1040x instructions 2010 Payment by employer. 1040x instructions 2010   You may have to sell your home because of a job transfer. 1040x instructions 2010 If your employer pays you for a loss on the sale or for your selling expenses, do not include the payment as part of the selling price. 1040x instructions 2010 Your employer will include it as wages in box 1 of your Form W-2 and you will include it in your income on Form 1040, line 7, or on Form 1040NR, line 8. 1040x instructions 2010 Option to buy. 1040x instructions 2010   If you grant an option to buy your home and the option is exercised, add the amount you receive for the option to the selling price of your home. 1040x instructions 2010 If the option is not exercised, you must report the amount as ordinary income in the year the option expires. 1040x instructions 2010 Report this amount on Form 1040, line 21, or on Form 1040NR, line 21. 1040x instructions 2010 Form 1099-S. 1040x instructions 2010   If you received Form 1099-S, box 2 (gross proceeds) should show the total amount you received for your home. 1040x instructions 2010   However, box 2 will not include the fair market value of any services or property other than cash or notes you received or will receive. 1040x instructions 2010 Instead, box 4 will be checked to indicate your receipt or expected receipt of these items. 1040x instructions 2010 Amount Realized The amount realized is the selling price minus selling expenses. 1040x instructions 2010 Selling expenses. 1040x instructions 2010   Selling expenses include: Commissions, Advertising fees, Legal fees, and Loan charges paid by the seller, such as loan placement fees or “points. 1040x instructions 2010 ” Adjusted Basis While you owned your home, you may have made adjustments (increases or decreases) to the basis. 1040x instructions 2010 This adjusted basis must be determined before you can figure gain or loss on the sale of your home. 1040x instructions 2010 For information on how to figure your home's adjusted basis, see Determining Basis , later. 1040x instructions 2010 Amount of Gain or Loss To figure the amount of gain or loss, compare the amount realized to the adjusted basis. 1040x instructions 2010 Gain on sale. 1040x instructions 2010   If the amount realized is more than the adjusted basis, the difference is a gain and, except for any part you can exclude, generally is taxable. 1040x instructions 2010 Loss on sale. 1040x instructions 2010   If the amount realized is less than the adjusted basis, the difference is a loss. 1040x instructions 2010 Generally, a loss on the sale of your main home cannot be deducted. 1040x instructions 2010 Jointly owned home. 1040x instructions 2010   If you and your spouse sell your jointly owned home and file a joint return, you figure your gain or loss as one taxpayer. 1040x instructions 2010 Separate returns. 1040x instructions 2010   If you file separate returns, each of you must figure your own gain or loss according to your ownership interest in the home. 1040x instructions 2010 Your ownership interest is generally determined by state law. 1040x instructions 2010 Joint owners not married. 1040x instructions 2010   If you and a joint owner other than your spouse sell your jointly owned home, each of you must figure your own gain or loss according to your ownership interest in the home. 1040x instructions 2010 Each of you applies the rules discussed in this publication on an individual basis. 1040x instructions 2010 Dispositions Other Than Sales Some special rules apply to other dispositions of your main home. 1040x instructions 2010 Foreclosure or repossession. 1040x instructions 2010   If your home was foreclosed on or repossessed, you have a disposition. 1040x instructions 2010 See Publication 4681 to determine if you have ordinary income, gain, or loss. 1040x instructions 2010 More information. 1040x instructions 2010   If part of a home is used for business or rental purposes, see Foreclosures and Repossessions in chapter 1 of Publication 544 for more information. 1040x instructions 2010 Publication 544 has examples of how to figure gain or loss on a foreclosure or repossession. 1040x instructions 2010 Abandonment. 1040x instructions 2010   If you abandon your home, see Publication 4681 to determine if you have ordinary income, gain, or loss. 1040x instructions 2010 Trading (exchanging) homes. 1040x instructions 2010   If you trade your home for another home, treat the trade as a sale and a purchase. 1040x instructions 2010 Example. 1040x instructions 2010 You owned and lived in a home with an adjusted basis of $41,000. 1040x instructions 2010 A real estate dealer accepted your old home as a trade-in and allowed you $50,000 toward a new home priced at $80,000. 1040x instructions 2010 This is treated as a sale of your old home for $50,000 with a gain of $9,000 ($50,000 − $41,000). 1040x instructions 2010 If the dealer had allowed you $27,000 and assumed your unpaid mortgage of $23,000 on your old home, your sales price would still be $50,000 (the $27,000 trade-in allowed plus the $23,000 mortgage assumed). 1040x instructions 2010 Transfer to spouse. 1040x instructions 2010   If you transfer your home to your spouse or you transfer it to your former spouse incident to your divorce, you in most cases have no gain or loss (unless the Exception, discussed next, applies). 1040x instructions 2010 This is true even if you receive cash or other consideration for the home. 1040x instructions 2010 As a result, the rules explained in this publication do not apply. 1040x instructions 2010   If you owned your home jointly with your spouse and transfer your interest in the home to your spouse, or to your former spouse incident to your divorce, the same rule applies. 1040x instructions 2010 You have no gain or loss. 1040x instructions 2010 Exception. 1040x instructions 2010   These transfer rules do not apply if your spouse or former spouse is a nonresident alien. 1040x instructions 2010 In that case, you generally will have a gain or loss. 1040x instructions 2010 More information. 1040x instructions 2010    See Property Settlements in Publication 504, Divorced or Separated Individuals, for more information. 1040x instructions 2010 Involuntary conversion. 1040x instructions 2010   You have a disposition when your home is destroyed or condemned and you receive other property or money in payment, such as insurance or a condemnation award. 1040x instructions 2010 This is treated as a sale and you may be able to exclude all or part of any gain from the destruction or condemnation of your home, as explained later under Special Situations (see Home destroyed or condemned ). 1040x instructions 2010 Determining Basis You need to know your basis in your home to figure any gain or loss when you sell it. 1040x instructions 2010 Your basis in your home is determined by how you got the home. 1040x instructions 2010 Generally, your basis is its cost if you bought it or built it. 1040x instructions 2010 If you got it in some other way (inheritance, gift, etc. 1040x instructions 2010 ), your basis is generally either its fair market value when you received it or the adjusted basis of the previous owner. 1040x instructions 2010 While you owned your home, you may have made adjustments (increases or decreases) to your home's basis. 1040x instructions 2010 The result of these adjustments is your home's adjusted basis, which is used to figure gain or loss on the sale of your home. 1040x instructions 2010 To figure your adjusted basis, you can use Worksheet 1, near the end of this publication. 1040x instructions 2010 Filled-in examples of that worksheet are included in the Comprehensive Examples , later. 1040x instructions 2010 Cost As Basis The cost of property is the amount you paid for it in cash, debt obligations, other property, or services. 1040x instructions 2010 Purchase. 1040x instructions 2010   If you bought your home, your basis is its cost to you. 1040x instructions 2010 This includes the purchase price and certain settlement or closing costs. 1040x instructions 2010 In most cases, your purchase price includes your down payment and any debt, such as a first or second mortgage or notes you gave the seller in payment for the home. 1040x instructions 2010 If you build, or contract to build, a new home, your purchase price can include costs of construction, as discussed later. 1040x instructions 2010 Seller-paid points. 1040x instructions 2010   If the person who sold you your home paid points on your loan, you may have to reduce your home's basis by the amount of the points, as shown in the following chart. 1040x instructions 2010    IF you bought your home. 1040x instructions 2010 . 1040x instructions 2010 . 1040x instructions 2010 THEN reduce your home's basis by the seller-paid points. 1040x instructions 2010 . 1040x instructions 2010 . 1040x instructions 2010 after 1990 but before April 4, 1994 only if you deducted them as home mortgage interest in the year paid. 1040x instructions 2010 after April 3, 1994 even if you did not deduct them. 1040x instructions 2010 Settlement fees or closing costs. 1040x instructions 2010   When you bought your home, you may have paid settlement fees or closing costs in addition to the contract price of the property. 1040x instructions 2010 You can include in your basis some of the settlement fees and closing costs you paid for buying the home, but not the fees and costs for getting a mortgage loan. 1040x instructions 2010 A fee paid for buying the home is any fee you would have had to pay even if you paid cash for the home (that is, without the need for financing). 1040x instructions 2010   Settlement fees do not include amounts placed in escrow for the future payment of items such as taxes and insurance. 1040x instructions 2010   Some of the settlement fees or closing costs that you can include in your basis are: Abstract fees (abstract of title fees), Charges for installing utility services, Legal fees (including fees for the title search and preparing the sales contract and deed), Recording fees, Survey fees, Transfer or stamp taxes, Owner's title insurance, and Any amounts the seller owes that you agree to pay, such as: Certain real estate taxes (discussed later), Back interest, Recording or mortgage fees, Charges for improvements or repairs, and Sales commissions. 1040x instructions 2010   Some settlement fees and closing costs you cannot include in your basis are: Fire insurance premiums, Rent for occupancy of the house before closing, Charges for utilities or other services related to occupancy of the house before closing, Any fee or cost that you deducted as a moving expense (allowed for certain fees and costs before 1994), Charges connected with getting a mortgage loan, such as: Mortgage insurance premiums (including funding fees connected with loans guaranteed by the Department of Veterans Affairs), Loan assumption fees, Cost of a credit report, Fee for an appraisal required by a lender, and Fees for refinancing a mortgage. 1040x instructions 2010 Real estate taxes. 1040x instructions 2010   Real estate taxes for the year you bought your home may affect your basis, as shown in the following chart. 1040x instructions 2010    IF. 1040x instructions 2010 . 1040x instructions 2010 . 1040x instructions 2010 AND. 1040x instructions 2010 . 1040x instructions 2010 . 1040x instructions 2010 THEN the taxes. 1040x instructions 2010 . 1040x instructions 2010 . 1040x instructions 2010 you pay taxes that the seller owed on the home up to the date of sale the seller does not reimburse you are added to the basis of your home. 1040x instructions 2010 the seller reimburses you do not affect the basis of your home. 1040x instructions 2010 the seller pays taxes for you (taxes owed beginning on the date of sale) you do not reimburse the seller are subtracted from the basis of your home. 1040x instructions 2010 you reimburse the seller do not affect the basis of your home. 1040x instructions 2010 Construction. 1040x instructions 2010   If you contracted to have your house built on land you own, your basis is: The cost of the land, plus The amount it cost you to complete the house, including: The cost of labor and materials, Any amounts paid to a contractor, Any architect's fees, Building permit charges, Utility meter and connection charges, and Legal fees directly connected with building the house. 1040x instructions 2010   Your cost includes your down payment and any debt such as a first or second mortgage or notes you gave the seller or builder. 1040x instructions 2010 It also includes certain settlement or closing costs. 1040x instructions 2010 You may have to reduce your basis by points the seller paid for you. 1040x instructions 2010 For more information, see Seller-paid points and Settlement fees or closing costs , earlier. 1040x instructions 2010 Built by you. 1040x instructions 2010   If you built all or part of your house yourself, its basis is the total amount it cost you to complete it. 1040x instructions 2010 Do not include in the cost of the house: The value of your own labor, or The value of any other labor you did not pay for. 1040x instructions 2010 Temporary housing. 1040x instructions 2010   If a builder gave you temporary housing while your home was being finished, you must reduce your basis by the part of the contract price that was for the temporary housing. 1040x instructions 2010 To figure the amount of the reduction, multiply the contract price by a fraction. 1040x instructions 2010 The numerator is the value of the temporary housing, and the denominator is the sum of the value of the temporary housing plus the value of the new home. 1040x instructions 2010 Cooperative apartment. 1040x instructions 2010   If you are a tenant-stockholder in a cooperative housing corporation, your basis in the cooperative apartment used as your home is usually the cost of your stock in the corporation. 1040x instructions 2010 This may include your share of a mortgage on the apartment building. 1040x instructions 2010 Condominium. 1040x instructions 2010   To determine your basis in a condominium apartment used as your home, use the same rules as for any other home. 1040x instructions 2010 Basis Other Than Cost You must use a basis other than cost, such as adjusted basis or fair market value, if you received your home as a gift, inheritance, a trade, or from your spouse. 1040x instructions 2010 These situations are discussed in the following pages. 1040x instructions 2010 Also, the instructions for Worksheet 1 (near the end of the publication) address each of these issues. 1040x instructions 2010 Other special rules may apply in certain situations. 1040x instructions 2010 If you converted the property, or some part of it, to business or rental use, see Property Changed to Business or Rental Use, in Publication 551. 1040x instructions 2010 Home received as gift. 1040x instructions 2010   Use the following chart to find the basis of a home you received as a gift. 1040x instructions 2010 IF the donor's adjusted basis at the time of the gift was. 1040x instructions 2010 . 1040x instructions 2010 . 1040x instructions 2010 THEN your basis is. 1040x instructions 2010 . 1040x instructions 2010 . 1040x instructions 2010 more than the fair market value of the home at that time the same as the donor's adjusted basis at the time of the gift. 1040x instructions 2010   Exception: If using the donor's adjusted basis results in a loss when you sell the home, you must use the fair market value of the home at the time of the gift as your basis. 1040x instructions 2010 If using the fair market value results in a gain, you have neither gain nor loss. 1040x instructions 2010 equal to or less than the fair market value at that time, and you received the gift before 1977 the smaller of the: • donor's adjusted basis, plus  any federal gift tax paid on  the gift, or • the home's fair market value  at the time of the gift. 1040x instructions 2010 equal to or less than the fair market value at that time, and you received the gift after 1976 the same as the donor's adjusted basis, plus the part of any federal gift tax paid that is due to the net increase in value of the home (explained next). 1040x instructions 2010 Fair market value. 1040x instructions 2010   The fair market value of property at the time of the gift is the value of the property as appraised for purposes of the federal gift tax. 1040x instructions 2010 If the gift was not subject to the federal gift tax, the fair market value is the value as appraised for the purposes of a state gift tax. 1040x instructions 2010 Part of federal gift tax due to net increase in value. 1040x instructions 2010   Figure the part of the federal gift tax paid that is due to the net increase in value of the home by multiplying the total federal gift tax paid by a fraction. 1040x instructions 2010 The numerator of the fraction is the net increase in the value of the home, and the denominator is the value of the home for gift tax purposes after reduction by any annual exclusion and marital or charitable deduction that applies to the gift. 1040x instructions 2010 The net increase in the value of the home is its fair market value minus the donor's adjusted basis immediately before the gift. 1040x instructions 2010 Home acquired from a decedent who died before or after 2010. 1040x instructions 2010   If you inherited your home from a decedent who died before or after 2010, your basis is the fair market value of the property on the date of the decedent's death (or the later alternate valuation date chosen by the personal representative of the estate). 1040x instructions 2010 If an estate tax return was filed or required to be filed, the value of the property listed on the estate tax return is your basis. 1040x instructions 2010 If a federal estate tax return did not have to be filed, your basis in the home is the same as its appraised value at the date of death, for purposes of state inheritance or transmission taxes. 1040x instructions 2010 Surviving spouse. 1040x instructions 2010   If you are a surviving spouse and you owned your home jointly, your basis in the home will change. 1040x instructions 2010 The new basis for the interest your spouse owned will be its fair market value on the date of death (or alternate valuation date). 1040x instructions 2010 The basis in your interest will remain the same. 1040x instructions 2010 Your new basis in the home is the total of these two amounts. 1040x instructions 2010   If you and your spouse owned the home either as tenants by the entirety or as joint tenants with right of survivorship, you will each be considered to have owned one-half of the home. 1040x instructions 2010 Example. 1040x instructions 2010 Your jointly owned home (owned as joint tenants with right of survivorship) had an adjusted basis of $50,000 on the date of your spouse's death, and the fair market value on that date was $100,000. 1040x instructions 2010 Your new basis in the home is $75,000 ($25,000 for one-half of the adjusted basis plus $50,000 for one-half of the fair market value). 1040x instructions 2010 Community property. 1040x instructions 2010   In community property states (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin), each spouse is usually considered to own half of the community property. 1040x instructions 2010 When either spouse dies, the total fair market value of the community property becomes the basis of the entire property, including the part belonging to the surviving spouse. 1040x instructions 2010 For this to apply, at least half the value of the community property interest must be includible in the decedent's gross estate, whether or not the estate must file a return. 1040x instructions 2010   For more information about community property, see Publication 555, Community Property. 1040x instructions 2010    If you are selling a home in which you acquired an interest from a decedent who died in 2010, see Publication 4895, Tax Treatment of Property Acquired From a Decedent Dying in 2010, to determine your basis. 1040x instructions 2010 Home received as trade. 1040x instructions 2010   If you acquired your home as a trade for other property, in most cases, the basis of your home is the fair market value (at the time of the trade) of the property you gave up. 1040x instructions 2010 If you traded one home for another, you have made a sale and purchase. 1040x instructions 2010 In that case, you may have a gain. 1040x instructions 2010 See Trading (exchanging) homes under Dispositions Other Than Sales, earlier, for an example of figuring the gain. 1040x instructions 2010 Home received from spouse. 1040x instructions 2010   If you received your home from your spouse or from your former spouse incident to your divorce, your basis in the home depends on the date of the transfer. 1040x instructions 2010 Transfers after July 18, 1984. 1040x instructions 2010   If you received the home after July 18, 1984, there was no gain or loss on the transfer. 1040x instructions 2010 In most cases, your basis in this home is the same as your spouse's (or former spouse's) adjusted basis just before you received it. 1040x instructions 2010 This rule applies even if you received the home in exchange for cash, the release of marital rights, the assumption of liabilities, or other considerations. 1040x instructions 2010   If you owned a home jointly with your spouse and your spouse transferred his or her interest in the home to you, in most cases, your basis in the half interest received from your spouse is the same as your spouse's adjusted basis just before the transfer. 1040x instructions 2010 This also applies if your former spouse transferred his or her interest in the home to you incident to your divorce. 1040x instructions 2010 Your basis in the half interest you already owned does not change. 1040x instructions 2010 Your new basis in the home is the total of these two amounts. 1040x instructions 2010 Transfers before July 19, 1984. 1040x instructions 2010   If you received your home before July 19, 1984, in exchange for your release of marital rights, in most cases, your basis in the home is generally its fair market value at the time you received it. 1040x instructions 2010 More information. 1040x instructions 2010   For more information on property received from a spouse or former spouse, see Property Settlements in Publication 504. 1040x instructions 2010 Involuntary conversion. 1040x instructions 2010   If your home is destroyed or condemned, you may receive insurance proceeds or a condemnation award. 1040x instructions 2010 If you acquired a replacement home with these proceeds, the basis is its cost decreased by any gain not recognized on the conversion under the rules explained in: Publication 547, in the case of a home that was destroyed, or Chapter 1 of Publication 544, in the case of a home that was condemned. 1040x instructions 2010 Example. 1040x instructions 2010 A fire destroyed your home that you owned and used for only 6 months. 1040x instructions 2010 The home had an adjusted basis of $80,000 and the insurance company paid you $130,000 for the loss. 1040x instructions 2010 Your gain is $50,000 ($130,000 − $80,000). 1040x instructions 2010 You bought a replacement home for $100,000. 1040x instructions 2010 The part of your gain that is taxable is $30,000 ($130,000 − $100,000), the unspent part of the payment from the insurance company. 1040x instructions 2010 The rest of the gain ($20,000) is not taxable, so that amount reduces your basis in the new home. 1040x instructions 2010 The basis of the new home is figured as follows. 1040x instructions 2010 Cost of replacement home $100,000 Minus: Gain not recognized 20,000 Basis of the replacement home $80,000 More information. 1040x instructions 2010   For more information about basis, see Publication 551. 1040x instructions 2010 Adjusted Basis Adjusted basis is your cost or other basis increased or decreased by certain amounts. 1040x instructions 2010 To figure your adjusted basis, you can use Worksheet 1, found toward the end of this publication. 1040x instructions 2010 Filled-in examples of that worksheet are included in Comprehensive Examples , later. 1040x instructions 2010 Recordkeeping. 1040x instructions 2010 You should keep records to prove your home's adjusted basis. 1040x instructions 2010 Ordinarily, you must keep records for 3 years after the due date for filing your return for the tax year in which you sold your home. 1040x instructions 2010 But if you sold a home before May 7, 1997, and postponed tax on any gain, the basis of that home affects the basis of the new home you bought. 1040x instructions 2010 Keep records proving the basis of both homes as long as they are needed for tax purposes. 1040x instructions 2010 The records you should keep include: Proof of the home's purchase price and purchase expenses; Receipts and other records for all improvements, additions, and other items that affect the home's adjusted basis; Any worksheets or other computations you used to figure the adjusted basis of the home you sold, the gain or loss on the sale, the exclusion, and the taxable gain; Any Form 982 you filed to exclude any discharge of qualified principal residence indebtedness; Any Form 2119, Sale of Your Home, you filed to postpone gain from the sale of a previous home before May 7, 1997; and Any worksheets you used to prepare Form 2119, such as the Adjusted Basis of Home Sold Worksheet or the Capital Improvements Worksheet from the Form 2119 instructions, or other source of computations. 1040x instructions 2010 Increases to Basis These include the following. 1040x instructions 2010 Additions and other improvements that have a useful life of more than 1 year. 1040x instructions 2010 Special assessments for local improvements. 1040x instructions 2010 Amounts you spent after a casualty to restore damaged property. 1040x instructions 2010 Improvements. 1040x instructions 2010   These add to the value of your home, prolong its useful life, or adapt it to new uses. 1040x instructions 2010 You add the cost of additions and other improvements to the basis of your property. 1040x instructions 2010   The following chart lists some other examples of improvements. 1040x instructions 2010 Examples of Improvements That Increase Basis Additions Bedroom Bathroom Deck Garage Porch Patio Heating & Air Conditioning Heating system Central air conditioning Furnace Duct work Central humidifier Filtration system 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  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 Floors Pipes and duct work Improvements no longer part of home. 1040x instructions 2010   Your home's adjusted basis does not include the cost of any improvements that are replaced and are no longer part of the home. 1040x instructions 2010 Example. 1040x instructions 2010 You put wall-to-wall carpeting in your home 15 years ago. 1040x instructions 2010 Later, you replaced that carpeting with new wall-to-wall carpeting. 1040x instructions 2010 The cost of the old carpeting you replaced is no longer part of your home's adjusted basis. 1040x instructions 2010 Repairs. 1040x instructions 2010   These maintain your home in good condition but do not add to its value or prolong its life. 1040x instructions 2010 You do not add their cost to the basis of your property. 1040x instructions 2010 Examples. 1040x instructions 2010 Repainting your house inside or outside, fixing your gutters or floors, repairing leaks or plastering, and replacing broken window panes are examples of repairs. 1040x instructions 2010 Exception. 1040x instructions 2010   The entire job is considered an improvement if items that would otherwise be considered repairs are done as part of an extensive remodeling or restoration of your home. 1040x instructions 2010 For example, if you have a casualty and your home is damaged, increase your basis by the amount you spend on repairs that restore the property to its pre-casualty condition. 1040x instructions 2010 Decreases to Basis These include the following. 1040x instructions 2010 Discharge of qualified principal residence indebtedness that was excluded from income (but not below zero). 1040x instructions 2010 For details, see Publication 4681. 1040x instructions 2010 Some or all of the cancellation of debt income that was excluded due to your bankruptcy or insolvency. 1040x instructions 2010 For details, see Publication 4681. 1040x instructions 2010 Gain you postponed from the sale of a previous home before May 7, 1997. 1040x instructions 2010 Deductible casualty losses. 1040x instructions 2010 Insurance payments you received or expect to receive for casualty losses. 1040x instructions 2010 Payments you received for granting an easement or right-of-way. 1040x instructions 2010 Depreciation allowed or allowable if you used your home for business or rental purposes. 1040x instructions 2010 Energy-related credits allowed for expenditures made on the residence. 1040x instructions 2010 (Reduce the increase in basis otherwise allowable for expenditures on the residence by the amount of credit allowed for those expenditures. 1040x instructions 2010 ) Adoption credit you claimed for improvements added to the basis of your home. 1040x instructions 2010 Nontaxable payments from an adoption assistance program of your employer you used for improvements you added to the basis of your home. 1040x instructions 2010 Energy conservation subsidy excluded from your gross income because you received it (directly or indirectly) from a public utility after 1992 to buy or install any energy conservation measure. 1040x instructions 2010 An energy conservation measure is an installation or modification primarily designed either to reduce consumption of electricity or natural gas or to improve the management of energy demand for a home. 1040x instructions 2010 District of Columbia first-time homebuyer credit allowed on the purchase of a principal residence in the District of Columbia. 1040x instructions 2010 General sales taxes claimed as an itemized deduction on Schedule A (Form 1040) that were imposed on the purchase of personal property, such as a houseboat used as your home or a mobile home. 1040x instructions 2010 Discharges of qualified principal residence indebtedness. 1040x instructions 2010   You may be able to exclude from gross income a discharge of qualified principal residence indebtedness. 1040x instructions 2010 This exclusion applies to discharges made after 2006 and before 2014. 1040x instructions 2010 If you choose to exclude this income, you must reduce (but not below zero) the basis of your principal residence by the amount excluded from gross income. 1040x instructions 2010   File Form 982 with your tax return. 1040x instructions 2010 See the form's instructions for detailed information. 1040x instructions 2010    A decrease in basis due to a discharge of qualified principal residence indebtedness that is excluded from income occurs only if you retain ownership of the principal residence after a discharge. 1040x instructions 2010 In most cases, this would occur in a refinancing or a restructuring of the mortgage. 1040x instructions 2010 Excluding the Gain You may qualify to exclude from your income all or part of any gain from the sale of your main home. 1040x instructions 2010 This means that, if you qualify, you will not have to pay tax on the gain up to the limit described under Maximum Exclusion , next. 1040x instructions 2010 To qualify, you must meet the ownership and use tests described later. 1040x instructions 2010 You can choose not to take the exclusion by including the gain from the sale in your gross income on your tax return for the year of the sale. 1040x instructions 2010 This choice can be made (or revoked) at any time before the expiration of a 3-year period beginning on the due date of your return (not including extensions) for the year of the sale. 1040x instructions 2010 You can use Worksheet 2 (near the end of this publication) to figure the amount of your exclusion and your taxable gain, if any. 1040x instructions 2010 If you have any taxable gain from the sale of your home, you may have to increase your withholding or make estimated tax payments. 1040x instructions 2010 See Publication 505, Tax Withholding and Estimated Tax. 1040x instructions 2010 Maximum Exclusion You can exclude up to $250,000 of the gain (other than gain allocated to periods of nonqualified use) on the sale of your main home if all of the following are true. 1040x instructions 2010 You meet the ownership test. 1040x instructions 2010 You meet the use test. 1040x instructions 2010 During the 2-year period ending on the date of the sale, you did not exclude gain from the sale of another home. 1040x instructions 2010 For details on gain allocated to periods of nonqualified use, see Nonqualified Use , later. 1040x instructions 2010 If you and another person owned the home jointly but file separate returns, each of you can exclude up to $250,000 of gain from the sale of your interest in the home if each of you meets the three conditions just listed. 1040x instructions 2010 You may be able to exclude up to $500,000 of the gain (other than gain allocated to periods of nonqualified use) on the sale of your main home if you are married and file a joint return and meet the requirements listed in the discussion of the special rules for joint returns, later, under Married Persons . 1040x instructions 2010 Ownership and Use Tests To claim the exclusion, you must meet the ownership and use tests. 1040x instructions 2010 This means that during the 5-year period ending on the date of the sale, you must have: Owned the home for at least 2 years (the ownership test), and Lived in the home as your main home for at least 2 years (the use test). 1040x instructions 2010 Exception. 1040x instructions 2010   If you owned and lived in the property as your main home for less than 2 years, you can still claim an exclusion in some cases. 1040x instructions 2010 However, the maximum amount you may be able to exclude will be reduced. 1040x instructions 2010 See Reduced Maximum Exclusion , later. 1040x instructions 2010 Example 1—home owned and occupied for at least 2 years. 1040x instructions 2010 Mya bought and moved into her main home in September 2011. 1040x instructions 2010 She sold the home at a gain in October 2013. 1040x instructions 2010 During the 5-year period ending on the date of sale in October 2013, she owned and lived in the home for more than 2 years. 1040x instructions 2010 She meets the ownership and use tests. 1040x instructions 2010 Example 2—ownership test met but use test not met. 1040x instructions 2010 Ayden bought a home, lived in it for 6 months, moved out, and never occupied the home again. 1040x instructions 2010 He later sold the home for a gain in June 2013. 1040x instructions 2010 He owned the home during the entire 5-year period ending on the date of sale. 1040x instructions 2010 He meets the ownership test but not the use test. 1040x instructions 2010 He cannot exclude any part of his gain on the sale unless he qualified for a reduced maximum exclusion (explained later). 1040x instructions 2010 Period of Ownership and Use The required 2 years of ownership and use during the 5-year period ending on the date of the sale do not have to be continuous nor do they both have to occur at the same time. 1040x instructions 2010 You meet the tests if you can show that you owned and lived in the property as your main home for either 24 full months or 730 days (365 × 2) during the 5-year period ending on the date of sale. 1040x instructions 2010 Example. 1040x instructions 2010 Naomi bought and moved into a house in July 2009. 1040x instructions 2010 She lived there for 13 months and then moved in with a friend. 1040x instructions 2010 She later moved back into her house and lived there for 12 months until she sold it in August 2013. 1040x instructions 2010 Naomi meets the ownership and use tests because, during the 5-year period ending on the date of sale, she owned the house for more than 2 years and lived in it for a total of 25 (13 + 12) months. 1040x instructions 2010 Temporary absence. 1040x instructions 2010   Short temporary absences for vacations or other seasonal absences, even if you rent out the property during the absences, are counted as periods of use. 1040x instructions 2010 The following examples assume that the reduced maximum exclusion (discussed later) does not apply to the sales. 1040x instructions 2010 Example 1. 1040x instructions 2010 David Johnson, who is single, bought and moved into his home on February 1, 2011. 1040x instructions 2010 Each year during 2011 and 2012, David left his home for a 2-month summer vacation. 1040x instructions 2010 David sold the house on March 1, 2013. 1040x instructions 2010 Although the total time David lived in his home is less than 2 years (21 months), he meets the use requirement and may exclude gain. 1040x instructions 2010 The 2-month vacations are short temporary absences and are counted as periods of use in determining whether David used the home for the required 2 years. 1040x instructions 2010 Example 2. 1040x instructions 2010 Professor Paul Beard, who is single, bought and moved into a house in December 2010, went abroad for a 1-year sabbatical leave in January 2012, returned to the house in January 2013, and sold it at a gain in February 2013. 1040x instructions 2010 Because his leave was not a short temporary absence, he cannot include the period of leave to meet the 2-year use test. 1040x instructions 2010 He cannot exclude any part of his gain because he did not use the residence for the required 2 years. 1040x instructions 2010 Ownership and use tests met at different times. 1040x instructions 2010   You can meet the ownership and use tests during different 2-year periods. 1040x instructions 2010 However, you must meet both tests during the 5-year period ending on the date of the sale. 1040x instructions 2010 Example. 1040x instructions 2010 Beginning in 2002, Helen Jones lived in a rented apartment. 1040x instructions 2010 The apartment building was later converted to condominiums, and she bought her same apartment on December 3, 2010. 1040x instructions 2010 In 2011, Helen became ill and on April 14 of that year she moved to her daughter's home. 1040x instructions 2010 On July 12, 2013, while still living in her daughter's home, she sold her condominium. 1040x instructions 2010 Helen can exclude gain on the sale of her condominium because she met the ownership and use tests during the 5-year period from July 13, 2008, to July 12, 2013, the date she sold the condominium. 1040x instructions 2010 She owned her condominium from December 3, 2010, to July 12, 2013 (more than 2 years). 1040x instructions 2010 She lived in the property from July 13, 2008 (the beginning of the 5-year period), to April 14, 2011 (more than 2 years). 1040x instructions 2010 The time Helen lived in her daughter's home during the 5-year period can be counted toward her period of ownership, and the time she lived in her rented apartment during the 5-year period can be counted toward her period of use. 1040x instructions 2010 Cooperative apartment. 1040x instructions 2010   If you sold stock as a tenant-shareholder in a cooperative housing corporation, the ownership and use tests are met if, during the 5-year period ending on the date of sale, you: Owned the stock for at least 2 years, and Lived in the house or apartment that the stock entitled you to occupy as your main home for at least 2 years. 1040x instructions 2010 Exceptions to Ownership and Use Tests The following sections contain exceptions to the ownership and use tests for certain taxpayers. 1040x instructions 2010 Exception for individuals with a disability. 1040x instructions 2010   There is an exception to the use test if: You become physically or mentally unable to care for yourself, and You owned and lived in your home as your main home for a total of at least 1 year during the 5-year period before the sale of your home. 1040x instructions 2010 Under this exception, you are considered to live in your home during any time within the 5-year period that you own the home and live in a facility (including a nursing home) licensed by a state or political subdivision to care for persons in your condition. 1040x instructions 2010   If you meet this exception to the use test, you still have to meet the 2-out-of-5-year ownership test to claim the exclusion. 1040x instructions 2010 Previous home destroyed or condemned. 1040x instructions 2010   For the ownership and use tests, you add the time you owned and lived in a previous home that was destroyed or condemned to the time you owned and lived in the replacement home on whose sale you wish to exclude gain. 1040x instructions 2010 This rule applies if any part of the basis of the home you sold depended on the basis of the destroyed or condemned home (see Involuntary Conversions in Publication 551). 1040x instructions 2010 Otherwise, you must have owned and lived in the same home for 2 of the 5 years before the sale to qualify for the exclusion. 1040x instructions 2010 Members of the uniformed services or Foreign Service, employees of the intelligence community, or employees or volunteers of the Peace Corps. 1040x instructions 2010   You can choose to have the 5-year test period for ownership and use suspended during any period you or your spouse serve on qualified official extended duty (defined later) as a member of the uniformed services or Foreign Service of the United States, or as an employee of the intelligence community. 1040x instructions 2010 You can choose to have the 5-year test period for ownership and use suspended during any period you or your spouse serve outside the United States either as an employee of the Peace Corps on qualified official extended duty (defined later) or as an enrolled volunteer or volunteer leader of the Peace Corps. 1040x instructions 2010 This means that you may be able to meet the 2-year use test even if, because of your service, you did not actually live in your home for at least the required 2 years during the 5-year period ending on the date of sale. 1040x instructions 2010   If this helps you qualify to exclude gain, you can choose to have the 5-year test period suspended by filing a return for the year of sale that does not include the gain. 1040x instructions 2010 Example. 1040x instructions 2010 John bought and moved into a home in 2005. 1040x instructions 2010 He lived in it as his main home for 2½ years. 1040x instructions 2010 For the next 6 years, he did not live in it because he was on qualified official extended duty with the Army. 1040x instructions 2010 He then sold the home at a gain in 2013. 1040x instructions 2010 To meet the use test, John chooses to suspend the 5-year test period for the 6 years he was on qualified official extended duty. 1040x instructions 2010 This means he can disregard those 6 years. 1040x instructions 2010 Therefore, John's 5-year test period consists of the 5 years before he went on qualified official extended duty. 1040x instructions 2010 He meets the ownership and use tests because he owned and lived in the home for 2½ years during this test period. 1040x instructions 2010 Period of suspension. 1040x instructions 2010   The period of suspension cannot last more than 10 years. 1040x instructions 2010 Together, the 10-year suspension period and the 5-year test period can be as long as, but no more than, 15 years. 1040x instructions 2010 You cannot suspend the 5-year period for more than one property at a time. 1040x instructions 2010 You can revoke your choice to suspend the 5-year period at any time. 1040x instructions 2010 Example. 1040x instructions 2010 Mary bought a home on April 1, 1997. 1040x instructions 2010 She used it as her main home until August 31, 2000. 1040x instructions 2010 On September 1, 2000, she went on qualified official extended duty with the Navy. 1040x instructions 2010 She did not live in the house again before selling it on July 31, 2013. 1040x instructions 2010 Mary chooses to use the entire 10-year suspension period. 1040x instructions 2010 Therefore, the suspension period would extend back from July 31, 2013, to August 1, 2003, and the 5-year test period would extend back to August 1, 1998. 1040x instructions 2010 During that period, Mary owned the house all 5 years and lived in it as her main home from August 1, 1998, until August 31, 2000, a period of more than 24 months. 1040x instructions 2010 She meets the ownership and use tests because she owned and lived in the home for at least 2 years during this test period. 1040x instructions 2010 Uniformed services. 1040x instructions 2010   The uniformed services are: The Armed Forces (the Army, Navy, Air Force, Marine Corps, and Coast Guard), The commissioned corps of the National Oceanic and Atmospheric Administration, and The commissioned corps of the Public Health Service. 1040x instructions 2010 Foreign Service member. 1040x instructions 2010   For purposes of the choice to suspend the 5-year test period for ownership and use, you are a member of the Foreign Service if you are any of the following. 1040x instructions 2010 A Chief of mission. 1040x instructions 2010 An Ambassador at large. 1040x instructions 2010 A member of the Senior Foreign Service. 1040x instructions 2010 A Foreign Service officer. 1040x instructions 2010 Part of the Foreign Service personnel. 1040x instructions 2010 Employee of the intelligence community. 1040x instructions 2010   For purposes of the choice to suspend the 5-year test period for ownership and use, you are an employee of the intelligence community if you are an employee of any of the following. 1040x instructions 2010 The Office of the Director of National Intelligence. 1040x instructions 2010 The Central Intelligence Agency. 1040x instructions 2010 The National Security Agency. 1040x instructions 2010 The Defense Intelligence Agency. 1040x instructions 2010 The National Geospatial-Intelligence Agency. 1040x instructions 2010 The National Reconnaissance Office and any other office within the Department of Defense for the collection of specialized national intelligence through reconnaissance programs. 1040x instructions 2010 Any of the intelligence elements of the Army, the Navy, the Air Force, the Marine Corps, the Federal Bureau of Investigation, the Department of Treasury, the Department of Energy, and the Coast Guard. 1040x instructions 2010 The Bureau of Intelligence and Research of the Department of State. 1040x instructions 2010 Any of the elements of the Department of Homeland Security concerned with the analyses of foreign intelligence information. 1040x instructions 2010 Qualified official extended duty. 1040x instructions 2010   You are on qualified official extended duty if you are on extended duty while: Serving at a duty station at least 50 miles from your main home, or Living in Government quarters under Government orders. 1040x instructions 2010   You are on extended duty when you are called or ordered to active duty for a period of more than 90 days or for an indefinite period. 1040x instructions 2010 Married Persons If you and your spouse file a joint return for the year of sale and one spouse meets the ownership and use tests, you can exclude up to $250,000 of the gain. 1040x instructions 2010 (But see Special rules for joint returns, next. 1040x instructions 2010 ) Special rules for joint returns. 1040x instructions 2010   You can exclude up to $500,000 of the gain on the sale of your main home if all of the following are true. 1040x instructions 2010 You are married and file a joint return for the year. 1040x instructions 2010 Either you or your spouse meets the ownership test. 1040x instructions 2010 Both you and your spouse meet the use test. 1040x instructions 2010 During the 2-year period ending on the date of the sale, neither you nor your spouse excluded gain from the sale of another home. 1040x instructions 2010 If either spouse does not satisfy all these requirements, the maximum exclusion that can be claimed by the couple is the total of the maximum exclusions that each spouse would qualify for if not married and the amounts were figured separately. 1040x instructions 2010 For this purpose, each spouse is treated as owning the property during the period that either spouse owned the property. 1040x instructions 2010 Example 1—one spouse sells a home. 1040x instructions 2010 Emily sells her home in June 2013 for a gain of $300,000. 1040x instructions 2010 She marries Jamie later in the year. 1040x instructions 2010 She meets the ownership and use tests, but Jamie does not. 1040x instructions 2010 Emily can exclude up to $250,000 of gain on a separate or joint return for 2013. 1040x instructions 2010 The $500,000 maximum exclusion for certain joint returns does not apply because Jamie does not meet the use test. 1040x instructions 2010 Example 2—each spouse sells a home. 1040x instructions 2010 The facts are the same as in Example 1 except that Jamie also sells a home in 2013 for a gain of $200,000 before he marries Emily. 1040x instructions 2010 He meets the ownership and use tests on his home, but Emily does not. 1040x instructions 2010 Emily can exclude $250,000 of gain and Jamie can exclude $200,000 of gain on the respective sales of their individual homes. 1040x instructions 2010 However, Emily cannot use Jamie's unused exclusion to exclude more than $250,000 of gain. 1040x instructions 2010 Therefore, Emily and Jamie must recognize $50,000 of gain on the sale of Emily's home. 1040x instructions 2010 The $500,000 maximum exclusion for certain joint returns does not apply because Emily and Jamie do not both meet the use test for the same home. 1040x instructions 2010 Sale of main home by surviving spouse. 1040x instructions 2010   If your spouse died and you did not remarry before the date of sale, you are considered to have owned and lived in the property as your main home during any period of time when your spouse owned and lived in it as a main home. 1040x instructions 2010   If you meet all of the following requirements, you may qualify to exclude up to $500,000 of any gain from the sale or exchange of your main home. 1040x instructions 2010 The sale or exchange took place after 2008. 1040x instructions 2010 The sale or exchange took place no more than 2 years after the date of death of your spouse. 1040x instructions 2010 You have not remarried. 1040x instructions 2010 You and your spouse met the use test at the time of your spouse's death. 1040x instructions 2010 You or your spouse met the ownership test at the time of your spouse's death. 1040x instructions 2010 Neither you nor your spouse excluded gain from the sale of another home during the last 2 years before the date of death. 1040x instructions 2010 The ownership and use tests were described earlier. 1040x instructions 2010 Example. 1040x instructions 2010 Harry owned and used a house as his main home since 2009. 1040x instructions 2010 Harry and Wilma married on July 1, 2013, and from that date they used Harry's house as their main home. 1040x instructions 2010 Harry died on August 15, 2013, and Wilma inherited the property. 1040x instructions 2010 Wilma sold the property on September 1, 2013, at which time she had not remarried. 1040x instructions 2010 Although Wilma owned and used the house for less than 2 years, Wilma is considered to have satisfied the ownership and use tests because her period of ownership and use includes the period that Harry owned and used the property before death. 1040x instructions 2010 Home transferred from spouse. 1040x instructions 2010   If your home was transferred to you by your spouse (or former spouse if the transfer was incident to divorce), you are considered to have owned it during any period of time when your spouse owned it. 1040x instructions 2010 Use of home after divorce. 1040x instructions 2010   You are considered to have used property as your main home during any period when: You owned it, and Your spouse or former spouse is allowed to live in it under a divorce or separation instrument and uses it as his or her main home. 1040x instructions 2010 Reduced Maximum Exclusion If you fail to meet the requirements to qualify for the $250,000 or $500,000 exclusion, you may still qualify for a reduced exclusion. 1040x instructions 2010 This applies to those who: Fail to meet the ownership and use tests, or Have used the exclusion within 2 years of selling their current home. 1040x instructions 2010 In both cases, to qualify for a reduced exclusion, the sale of your main home must be due to one of the following reasons. 1040x instructions 2010 A change in place of employment. 1040x instructions 2010 Health. 1040x instructions 2010 Unforeseen circumstances. 1040x instructions 2010 Qualified individual. 1040x instructions 2010   For purposes of the reduced maximum exclusion, a qualified individual is any of the following. 1040x instructions 2010 You. 1040x instructions 2010 Your spouse. 1040x instructions 2010 A co-owner of the home. 1040x instructions 2010 A person whose main home is the same as yours. 1040x instructions 2010 Primary reason for sale. 1040x instructions 2010   One of the three reasons above will be considered to be the primary reason you sold your home if either (1) or (2) is true. 1040x instructions 2010 You qualify under a “safe harbor. 1040x instructions 2010 ” This is a specific set of facts and circumstances that, if applicable, qualifies you to claim a reduced maximum exclusion. 1040x instructions 2010 Safe harbors corresponding to the reasons listed above are described later. 1040x instructions 2010 A safe harbor does not apply, but you can establish, based on facts and circumstances, that the primary reason for the sale is a change in place of employment, health, or unforeseen circumstances. 1040x instructions 2010  Factors that may be relevant in determining your primary reason for sale include whether: Your sale and the circumstances causing it were close in time, The circumstances causing your sale occurred during the time you owned and used the property as your main home, The circumstances causing your sale were not reasonably foreseeable when you began using the property as your main home, Your financial ability to maintain the property became materially impaired, The suitability of the property as your main home materially changed, and During the time you owned the property, you used it as your home. 1040x instructions 2010 Change in Place of Employment You may qualify for a reduced exclusion if the primary reason for the sale of your main home is a change in the location of employment of a qualified individual. 1040x instructions 2010 Employment. 1040x instructions 2010   For this purpose, employment includes the start of work with a new employer or continuation of work with the same employer. 1040x instructions 2010 It also includes the start or continuation of self-employment. 1040x instructions 2010 Distance safe harbor. 1040x instructions 2010   A change in place of employment is considered to be the reason you sold your home if: The change occurred during the period you owned and used the property as your main home, and The new place of employment is at least 50 miles farther from the home you sold than was the former place of employment (or, if there was no former place of employment, the distance between your new place of employment and the home sold is at least 50 miles). 1040x instructions 2010 Example. 1040x instructions 2010 Justin was unemployed and living in a townhouse in Florida he had owned and used as his main home since 2012. 1040x instructions 2010 He got a job in North Carolina and sold his townhouse in 2013. 1040x instructions 2010 Because the distance between Justin's new place of employment and the home he sold is at least 50 miles, the sale satisfies the conditions of the distance safe harbor. 1040x instructions 2010 Justin's sale of his home is considered to be because of a change in place of employment, and he is entitled to claim a reduced maximum exclusion of gain from the sale. 1040x instructions 2010 Health The sale of your main home is because of health if your primary reason for the sale is: To obtain, provide, or facilitate the diagnosis, cure, mitigation, or treatment of disease, illness, or injury of a qualified individual, or To obtain or provide medical or personal care for a qualified individual suffering from a disease, illness, or injury. 1040x instructions 2010 The sale of your home is not because of health if the sale merely benefits a qualified individual's general health or well-being. 1040x instructions 2010 For purposes of this reason, a qualified individual includes, in addition to the individuals listed earlier under Qualified individual , any of the following family members of these individuals. 1040x instructions 2010 Parent, grandparent, stepmother, stepfather. 1040x instructions 2010 Child, grandchild, stepchild, adopted child, eligible foster child. 1040x instructions 2010 Brother, sister, stepbrother, stepsister, half-brother, half-sister. 1040x instructions 2010 Mother-in-law, father-in-law, brother-in-law, sister-in-law, son-in-law, or daughter-in-law. 1040x instructions 2010 Uncle, aunt, nephew, niece, or cousin. 1040x instructions 2010 Example. 1040x instructions 2010 In 2012, Chase and Lauren, spouses, bought a house that they used as their main home. 1040x instructions 2010 Lauren's father has a chronic disease and is unable to care for himself. 1040x instructions 2010 In 2013, Chase and Lauren sold their home in order to move into Lauren's father's house to provide care for him. 1040x instructions 2010 Because the primary reason for the sale of their home was to provide care for Lauren's father, Chase and Lauren are entitled to a reduced maximum exclusion. 1040x instructions 2010 Doctor's recommendation safe harbor. 1040x instructions 2010   Health is considered to be the reason you sold your home if, for one or more of the reasons listed at the beginning of this discussion, a doctor recommends a change of residence. 1040x instructions 2010 Unforeseen Circumstances The sale of your main home is because of an unforeseen circumstance if your primary reason for the sale is the occurrence of an event that you could not reasonably have anticipated before buying and occupying that home. 1040x instructions 2010 You are not considered to have an unforeseen circumstance if the primary reason you sold your home was that you preferred to get a different home or because your finances improved. 1040x instructions 2010 Specific event safe harbors. 1040x instructions 2010   Unforeseen circumstances are considered to be the reason for selling your home if any of the following events occurred while you owned and used the property as your main home. 1040x instructions 2010 An involuntary conversion of your home, such as when your home is destroyed or condemned. 1040x instructions 2010 Natural or man-made disasters or acts of war or terrorism resulting in a casualty to your home, whether or not your loss is deductible. 1040x instructions 2010 In the case of qualified individuals (listed earlier under Qualified individual ): Death, Unemployment (if the individual is eligible for unemployment compensation), A change in employment or self-employment status that results in the individual's inability to pay reasonable basic living expenses (listed under Reasonable basic living expenses , later) for his or her household, Divorce or legal separation under a decree of divorce or separate maintenance, or Multiple births resulting from the same pregnancy. 1040x instructions 2010 An event the IRS determined to be an unforeseen circumstance in published guidance of general applicability. 1040x instructions 2010 For example, the IRS determined the September 11, 2001, terrorist attacks to be an unforeseen circumstance. 1040x instructions 2010 Reasonable basic living expenses. 1040x instructions 2010   Reasonable basic living expenses for your household include the following. 1040x instructions 2010 Amounts spent for food. 1040x instructions 2010 Amounts spent for clothing. 1040x instructions 2010 Housing and related expenses. 1040x instructions 2010 Medical expenses. 1040x instructions 2010 Transportation expenses. 1040x instructions 2010 Tax payments. 1040x instructions 2010 Court-ordered payments. 1040x instructions 2010 Expenses reasonably necessary to produce income. 1040x instructions 2010   Any of these amounts spent to maintain an affluent or luxurious standard of living are not reasonable basic living expenses. 1040x instructions 2010 Nonqualified Use Gain from the sale or exchange of the main home is not excludable from income if it is allocable to periods of nonqualified use. 1040x instructions 2010 Nonqualified use means any period after 2008 where neither you nor your spouse (or your former spouse) used the property as a main home, with certain exceptions (see next). 1040x instructions 2010 Exceptions. 1040x instructions 2010   A period of nonqualified use does not include: Any portion of the 5-year period ending on the date of the sale or exchange after the last date you (or your spouse) use the property as a main home; Any period (not to exceed an aggregate period of 10 years) during which you (or your spouse) are serving on qualified official extended duty: As a member of the uniformed services; As a member of the Foreign Service of the United States; or As an employee of the intelligence community; and Any other period of temporary absence (not to exceed an aggregate period of 2 years) due to change of employment, health conditions, or such other unforeseen circumstances as may be specified by the IRS. 1040x instructions 2010 Calculation. 1040x instructions 2010   To figure the portion of the gain allocated to the period of nonqualified use, multiply the gain (net of any depreciation allowed or allowable on the property for periods after May 6, 1997) by the following fraction:   Total nonqualified use during the period of ownership after 2008     Total period of ownership     This calculation can be found in Worksheet 2, line 10, later in this publication. 1040x instructions 2010   For examples of this calculation, see Business Use or Rental of Home , next. 1040x instructions 2010 Business Use or Rental of Home You may be able to exclude gain from the sale of a home you have used for business or to produce rental income if you meet the ownership and use tests. 1040x instructions 2010 Example 1. 1040x instructions 2010 On May 23, 2007, Amy, who is unmarried for all years in this example, bought a house. 1040x instructions 2010 She moved in on that date and lived in it until May 31, 2009, when she moved out of the house and put it up for rent. 1040x instructions 2010 The house was rented from June 1, 2009, to March 31, 2011. 1040x instructions 2010 Amy claimed depreciation deductions in 2009 through 2011 totaling $10,000. 1040x instructions 2010 Amy moved back into the house on April 1, 2011, and lived there until she sold it on January 31, 2013, for a gain of $200,000. 1040x instructions 2010 During the 5-year period ending on the date of the sale (January 31, 2008–January 31, 2013), Amy owned and lived in the house for more than 2 years as shown in the following table. 1040x instructions 2010 Five-Year Period Used as Home Used as Rental 1/31/08 – 5/31/09 16 months   6/01/09 – 3/31/11   22 months 4/01/11 – 1/31/13 22 months     38 months 22 months       During the period Amy owned the house (2,080 days), her period of nonqualified use was 668 days. 1040x instructions 2010 Because the gain attributable to periods of nonqualified use is $60,990, Amy can exclude $129,010 of her gain, as shown on Worksheet 2. 1040x instructions 2010 Example 2. 1040x instructions 2010 William owned and used a house as his main home from 2007 through 2010. 1040x instructions 2010 On January 1, 2011, he moved to another state. 1040x instructions 2010 He rented his house from that date until April 30, 2013, when he sold it. 1040x instructions 2010 During the 5-year period ending on the date of sale (May 1, 2008-April 30, 2013), William owned and lived in the house for more than 2 years. 1040x instructions 2010 Because it was rental property at the time of the sale, he must report the sale on Form 4797. 1040x instructions 2010 Because the period of nonqualified use does not include any part of the 5-year period after the last date William lived in the house, he has no period of nonqualified use. 1040x instructions 2010 Because he met the ownership and use tests, he can exclude gain up to $250,000. 1040x instructions 2010 However, he cannot exclude the part of the gain equal to the depreciation he claimed or could have claimed for renting the house, as explained next. 1040x instructions 2010 Depreciation after May 6, 1997. 1040x instructions 2010   If you were entitled to take depreciation deductions because you used your home for business purposes or as rental property, you cannot exclude the part of your gain equal to any depreciation allowed or allowable as a deduction for periods after May 6, 1997. 1040x instructions 2010 If you can show by adequate records or other evidence that the depreciation allowed was less than the amount allowable, then you may limit the amount of gain recognized to the depreciation allowed. 1040x instructions 2010 Unrecaptured section 1250 gain. 1040x instructions 2010   This is the part of any long-term capital gain from the sale of your home that is due to depreciation and cannot be excluded. 1040x instructions 2010 To figure the amount of unrecaptured section 1250 gain to be reported on Schedule D (Form 1040), you must also take into account certain gains or losses from the sale of property other than your home. 1040x instructions 2010 Use the Unrecaptured Section 1250 Gain Worksheet in the Schedule D instructions for this purpose. 1040x instructions 2010 Worksheet 2. 1040x instructions 2010 Taxable Gain on Sale of Home—Completed Example 1 for Amy Part 1. 1040x instructions 2010 Gain or (Loss) on Sale       1. 1040x instructions 2010   Selling price of home 1. 1040x instructions 2010     2. 1040x instructions 2010   Selling expenses (including commissions, advertising and legal fees, and seller-paid loan charges) 2. 1040x instructions 2010     3. 1040x instructions 2010   Subtract line 2 from line 1. 1040x instructions 2010 This is the amount realized 3. 1040x instructions 2010     4. 1040x instructions 2010   Adjusted basis of home sold (from Worksheet 1, line 13) 4. 1040x instructions 2010     5. 1040x instructions 2010   Gain or (loss) on the sale. 1040x instructions 2010 Subtract line 4 from line 3. 1040x instructions 2010 If this is a loss, stop here 5. 1040x instructions 2010 200,000   Part 2. 1040x instructions 2010 Exclusion and Taxable Gain       6. 1040x instructions 2010   Enter any depreciation allowed or allowable on the property for periods after May 6, 1997. 1040x instructions 2010 If none, enter -0- 6. 1040x instructions 2010 10,000   7. 1040x instructions 2010   Subtract line 6 from line 5. 1040x instructions 2010 If the result is less than zero, enter -0- 7. 1040x instructions 2010 190,000   8. 1040x instructions 2010   Aggregate number of days of nonqualified use after 2008. 1040x instructions 2010 If none, enter -0-. 1040x instructions 2010  If line 8 is equal to zero, skip to line 12 and enter the amount from line 7 on line 12 8. 1040x instructions 2010 668   9. 1040x instructions 2010   Number of days taxpayer owned the property 9. 1040x instructions 2010 2,080   10. 1040x instructions 2010   Divide the amount on line 8 by the amount on line 9. 1040x instructions 2010 Enter the result as a decimal (rounded to at least 3 places). 1040x instructions 2010 But do not enter an amount greater than 1. 1040x instructions 2010 00 10. 1040x instructions 2010 0. 1040x instructions 2010 321   11. 1040x instructions 2010   Gain allocated to nonqualified use. 1040x instructions 2010 (Line 7 multiplied by line 10) 11. 1040x instructions 2010 60,990   12. 1040x instructions 2010   Gain eligible for exclusion. 1040x instructions 2010 Subtract line 11 from line 7 12. 1040x instructions 2010 129,010   13. 1040x instructions 2010   If you qualify to exclude gain on the sale, enter your maximum exclusion (see Maximum Exclusion ). 1040x instructions 2010  If you qualify for a reduced maximum exclusion, enter the amount from Worksheet 3, line 7. 1040x instructions 2010 If you do  not qualify to exclude gain, enter -0- 13. 1040x instructions 2010 250,000   14. 1040x instructions 2010   Exclusion. 1040x instructions 2010 Enter the smaller of line 12 or line 13 14. 1040x instructions 2010 129,010   15. 1040x instructions 2010   Taxable gain. 1040x instructions 2010 Subtract line 14 from line 5. 1040x instructions 2010 Report your taxable gain as described under Reporting the Sale . 1040x instructions 2010 If the amount on line 6 is more than zero, complete line 16 15. 1040x instructions 2010 70,990   16. 1040x instructions 2010   Enter the smaller of line 6 or line 15. 1040x instructions 2010 Enter this amount on line 12 of the Unrecaptured Section 1250 Gain  Worksheet in the instructions for Schedule D (Form 1040) 16. 1040x instructions 2010 10,000 Property Used Partly for Business or Rental If you use property partly as a home and partly for business or to produce rental income, the treatment of any gain on the sale depends partly on whether the business or rental part of the property is part of your home or separate from it. 1040x instructions 2010 Part of Home Used for Business or Rental If the part of your property used for business or to produce rental income is within your home, such as a room used as a home office for a business, you do not need to allocate gain on the sale of the property between the business part of the property and the part used as a home. 1040x instructions 2010 In addition, you do not need to report the sale of the business or rental part on Form 4797. 1040x instructions 2010 This is true whether or not you were entitled to claim any depreciation. 1040x instructions 2010 However, you cannot exclude the part of any gain equal to any depreciation allowed or allowable after May 6, 1997. 1040x instructions 2010 See Depreciation after May 6, 1997, earlier. 1040x instructions 2010 Example 1. 1040x instructions 2010 Ray sold his main home in 2013 at a $30,000 gain. 1040x instructions 2010 He has no gains or losses from the sale of property other than the gain from the sale of his home. 1040x instructions 2010 He meets the ownership and use tests to exclude the gain from his income. 1040x instructions 2010 However, he used part of the home as a business office in 2012 and claimed $500 depreciation. 1040x instructions 2010 Because the business office was part of his home (not separate from it), he does not have to allocate the gain on the sale between the business part of the property and the part used as a home. 1040x instructions 2010 In addition, he does not have to report any part of the gain on Form 4797. 1040x instructions 2010 Because Ray was entitled to take a depreciation deduction, he must recognize $500 of the gain as unrecaptured section 1250 gain. 1040x instructions 2010 He reports his gain, exclusion, and the taxable gain of $500 on Form 8949 and Schedule D (Form 1040). 1040x instructions 2010 Example 2. 1040x instructions 2010 The facts are the same as in Example 1 except that Ray was not entitled to claim depreciation for the business use of his home. 1040x instructions 2010 Since Ray did not claim any depreciation, he can exclude the entire $30,000 gain. 1040x instructions 2010 Separate Part of Property Used for Business or Rental You may have used part of your property as your home and a separate part of it for business or to produce rental income. 1040x instructions 2010 Examples are: A working farm on which your house was located, A duplex in w