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1040xform 2. 1040xform   Depreciation of Rental Property Table of Contents The BasicsWhat Rental Property Can Be Depreciated? When Does Depreciation Begin and End? Depreciation Methods Basis of Depreciable Property Claiming the Special Depreciation Allowance MACRS DepreciationDepreciation Systems Property Classes Under GDS Recovery Periods Under GDS Conventions Figuring Your Depreciation Deduction Figuring MACRS Depreciation Under ADS Claiming the Correct Amount of Depreciation You recover the cost of income producing property through yearly tax deductions. 1040xform You do this by depreciating the property; that is, by deducting some of the cost each year on your tax return. 1040xform Three factors determine how much depreciation you can deduct each year: (1) your basis in the property, (2) the recovery period for the property, and (3) the depreciation method used. 1040xform You cannot simply deduct your mortgage or principal payments, or the cost of furniture, fixtures and equipment, as an expense. 1040xform You can deduct depreciation only on the part of your property used for rental purposes. 1040xform Depreciation reduces your basis for figuring gain or loss on a later sale or exchange. 1040xform You may have to use Form 4562 to figure and report your depreciation. 1040xform See Which Forms To Use in chapter 3. 1040xform Also see Publication 946. 1040xform Section 179 deduction. 1040xform   The section 179 deduction is a means of recovering part or all of the cost of certain qualifying property in the year you place the property in service. 1040xform This deduction is not allowed for property used in connection with residential rental property. 1040xform See chapter 2 of Publication 946. 1040xform Alternative minimum tax (AMT). 1040xform   If you use accelerated depreciation, you may be subject to the AMT. 1040xform Accelerated depreciation allows you to deduct more depreciation earlier in the recovery period than you could deduct using a straight line method (same deduction each year). 1040xform   The prescribed depreciation methods for rental real estate are not accelerated, so the depreciation deduction is not adjusted for the AMT. 1040xform However, accelerated methods are generally used for other property connected with rental activities (for example, appliances and wall-to-wall carpeting). 1040xform   To find out if you are subject to the AMT, see the Instructions for Form 6251. 1040xform The Basics The following section discusses the information you will need to have about the rental property and the decisions to be made before figuring your depreciation deduction. 1040xform What Rental Property Can Be Depreciated? You can depreciate your property if it meets all the following requirements. 1040xform You own the property. 1040xform You use the property in your business or income-producing activity (such as rental property). 1040xform The property has a determinable useful life. 1040xform The property is expected to last more than one year. 1040xform Property you own. 1040xform   To claim depreciation, you usually must be the owner of the property. 1040xform You are considered as owning property even if it is subject to a debt. 1040xform Rented property. 1040xform   Generally, if you pay rent for property, you cannot depreciate that property. 1040xform Usually, only the owner can depreciate it. 1040xform However, if you make permanent improvements to leased property, you may be able to depreciate the improvements. 1040xform See Additions or improvements to property , later in this chapter, under Recovery Periods Under GDS. 1040xform Cooperative apartments. 1040xform   If you are a tenant-stockholder in a cooperative housing corporation and rent your cooperative apartment to others, you can deduct depreciation on your stock in the corporation. 1040xform See chapter 4, Special Situations. 1040xform Property having a determinable useful life. 1040xform   To be depreciable, your property must have a determinable useful life. 1040xform This means that it must be something that wears out, decays, gets used up, becomes obsolete, or loses its value from natural causes. 1040xform What Rental Property Cannot Be Depreciated? Certain property cannot be depreciated. 1040xform This includes land and certain excepted property. 1040xform Land. 1040xform   You cannot depreciate the cost of land because land generally does not wear out, become obsolete, or get used up. 1040xform But if it does, the loss is accounted for upon disposition. 1040xform The costs of clearing, grading, planting, and landscaping are usually all part of the cost of land and cannot be depreciated. 1040xform   Although you cannot depreciate land, you can depreciate certain land preparation costs, such as landscaping costs, incurred in preparing land for business use. 1040xform These costs must be so closely associated with other depreciable property that you can determine a life for them along with the life of the associated property. 1040xform Example. 1040xform You built a new house to use as a rental and paid for grading, clearing, seeding, and planting bushes and trees. 1040xform Some of the bushes and trees were planted right next to the house, while others were planted around the outer border of the lot. 1040xform If you replace the house, you would have to destroy the bushes and trees right next to it. 1040xform These bushes and trees are closely associated with the house, so they have a determinable useful life. 1040xform Therefore, you can depreciate them. 1040xform Add your other land preparation costs to the basis of your land because they have no determinable life and you cannot depreciate them. 1040xform Excepted property. 1040xform   Even if the property meets all the requirements listed earlier under What Rental Property Can Be Depreciated , you cannot depreciate the following property. 1040xform Property placed in service and disposed of (or taken out of business use) in the same year. 1040xform Equipment used to build capital improvements. 1040xform You must add otherwise allowable depreciation on the equipment during the period of construction to the basis of your improvements. 1040xform For more information, see chapter 1 of Publication 946. 1040xform When Does Depreciation Begin and End? You begin to depreciate your rental property when you place it in service for the production of income. 1040xform You stop depreciating it either when you have fully recovered your cost or other basis, or when you retire it from service, whichever happens first. 1040xform Placed in Service You place property in service in a rental activity when it is ready and available for a specific use in that activity. 1040xform Even if you are not using the property, it is in service when it is ready and available for its specific use. 1040xform Example 1. 1040xform On November 22 of last year, you purchased a dishwasher for your rental property. 1040xform The appliance was delivered on December 7, but was not installed and ready for use until January 3 of this year. 1040xform Because the dishwasher was not ready for use last year, it is not considered placed in service until this year. 1040xform If the appliance had been installed and ready for use when it was delivered in December of last year, it would have been considered placed in service in December, even if it was not actually used until this year. 1040xform Example 2. 1040xform On April 6, you purchased a house to use as residential rental property. 1040xform You made extensive repairs to the house and had it ready for rent on July 5. 1040xform You began to advertise the house for rent in July and actually rented it beginning September 1. 1040xform The house is considered placed in service in July when it was ready and available for rent. 1040xform You can begin to depreciate the house in July. 1040xform Example 3. 1040xform You moved from your home in July. 1040xform During August and September you made several repairs to the house. 1040xform On October 1, you listed the property for rent with a real estate company, which rented it on December 1. 1040xform The property is considered placed in service on October 1, the date when it was available for rent. 1040xform Conversion to business use. 1040xform   If you place property in service in a personal activity, you cannot claim depreciation. 1040xform However, if you change the property's use to business or the production of income, you can begin to depreciate it at the time of the change. 1040xform You place the property in service for business or income-producing use on the date of the change. 1040xform Example. 1040xform You bought a house and used it as your personal home several years before you converted it to rental property. 1040xform Although its specific use was personal and no depreciation was allowable, you placed the home in service when you began using it as your home. 1040xform You can begin to claim depreciation in the year you converted it to rental property because at that time its use changed to the production of income. 1040xform Idle Property Continue to claim a deduction for depreciation on property used in your rental activity even if it is temporarily idle (not in use). 1040xform For example, if you must make repairs after a tenant moves out, you still depreciate the rental property during the time it is not available for rent. 1040xform Cost or Other Basis Fully Recovered You must stop depreciating property when the total of your yearly depreciation deductions equals your cost or other basis of your property. 1040xform For this purpose, your yearly depreciation deductions include any depreciation that you were allowed to claim, even if you did not claim it. 1040xform See Basis of Depreciable Property , later. 1040xform Retired From Service You stop depreciating property when you retire it from service, even if you have not fully recovered its cost or other basis. 1040xform You retire property from service when you permanently withdraw it from use in a trade or business or from use in the production of income because of any of the following events. 1040xform You sell or exchange the property. 1040xform You convert the property to personal use. 1040xform You abandon the property. 1040xform The property is destroyed. 1040xform Depreciation Methods Generally, you must use the Modified Accelerated Cost Recovery System (MACRS) to depreciate residential rental property placed in service after 1986. 1040xform If you placed rental property in service before 1987, you are using one of the following methods. 1040xform ACRS (Accelerated Cost Recovery System) for property placed in service after 1980 but before 1987. 1040xform Straight line or declining balance method over the useful life of property placed in service before 1981. 1040xform See MACRS Depreciation , later, for more information. 1040xform Rental property placed in service before 2013. 1040xform   Continue to use the same method of figuring depreciation that you used in the past. 1040xform Use of real property changed. 1040xform   Generally, you must use MACRS to depreciate real property that you acquired for personal use before 1987 and changed to business or income-producing use after 1986. 1040xform This includes your residence that you changed to rental use. 1040xform See Property Owned or Used in 1986 in Publication 946, chapter 1, for those situations in which MACRS is not allowed. 1040xform Improvements made after 1986. 1040xform   Treat an improvement made after 1986 to property you placed in service before 1987 as separate depreciable property. 1040xform As a result, you can depreciate that improvement as separate property under MACRS if it is the type of property that otherwise qualifies for MACRS depreciation. 1040xform For more information about improvements, see Additions or improvements to property , later in this chapter under Recovery Periods Under GDS. 1040xform This publication discusses MACRS depreciation only. 1040xform If you need information about depreciating property placed in service before 1987, see Publication 534. 1040xform Basis of Depreciable Property The basis of property used in a rental activity is generally its adjusted basis when you place it in service in that activity. 1040xform This is its cost or other basis when you acquired it, adjusted for certain items occurring before you place it in service in the rental activity. 1040xform If you depreciate your property under MACRS, you may also have to reduce your basis by certain deductions and credits with respect to the property. 1040xform Basis and adjusted basis are explained in the following discussions. 1040xform If you used the property for personal purposes before changing it to rental use, its basis for depreciation is the lesser of its adjusted basis or its fair market value when you change it to rental use. 1040xform See Basis of Property Changed to Rental Use in chapter 4. 1040xform Cost Basis The basis of property you buy is usually its cost. 1040xform The cost is the amount you pay for it in cash, in debt obligation, in other property, or in services. 1040xform Your cost also includes amounts you pay for: Sales tax charged on the purchase (but see Exception next), Freight charges to obtain the property, and Installation and testing charges. 1040xform Exception. 1040xform   If you deducted state and local general sales taxes as an itemized deduction on Schedule A (Form 1040), do not include those sales taxes as part of your cost basis. 1040xform Such taxes were deductible before 1987 and after 2003. 1040xform Loans with low or no interest. 1040xform   If you buy property on any time-payment plan that charges little or no interest, the basis of your property is your stated purchase price, less the amount considered to be unstated interest. 1040xform See Unstated Interest and Original Issue Discount (OID) in Publication 537, Installment Sales. 1040xform Real property. 1040xform   If you buy real property, such as a building and land, certain fees and other expenses you pay are part of your cost basis in the property. 1040xform Real estate taxes. 1040xform   If you buy real property and agree to pay real estate taxes on it that were owed by the seller and the seller does not reimburse you, the taxes you pay are treated as part of your basis in the property. 1040xform You cannot deduct them as taxes paid. 1040xform   If you reimburse the seller for real estate taxes the seller paid for you, you can usually deduct that amount. 1040xform Do not include that amount in your basis in the property. 1040xform Settlement fees and other costs. 1040xform   The following settlement fees and closing costs for buying the property are part of your basis in the property. 1040xform Abstract fees. 1040xform Charges for installing utility services. 1040xform Legal fees. 1040xform Recording fees. 1040xform Surveys. 1040xform Transfer taxes. 1040xform Title insurance. 1040xform Any amounts the seller owes that you agree to pay, such as back taxes or interest, recording or mortgage fees, charges for improvements or repairs, and sales commissions. 1040xform   The following are settlement fees and closing costs you cannot include in your basis in the property. 1040xform Fire insurance premiums. 1040xform Rent or other charges relating to occupancy of the property before closing. 1040xform Charges connected with getting or refinancing a loan, such as: Points (discount points, loan origination fees), Mortgage insurance premiums, Loan assumption fees, Cost of a credit report, and Fees for an appraisal required by a lender. 1040xform   Also, do not include amounts placed in escrow for the future payment of items such as taxes and insurance. 1040xform Assumption of a mortgage. 1040xform   If you buy property and become liable for an existing mortgage on the property, your basis is the amount you pay for the property plus the amount remaining to be paid on the mortgage. 1040xform Example. 1040xform You buy a building for $60,000 cash and assume a mortgage of $240,000 on it. 1040xform Your basis is $300,000. 1040xform Separating cost of land and buildings. 1040xform   If you buy buildings and your cost includes the cost of the land on which they stand, you must divide the cost between the land and the buildings to figure the basis for depreciation of the buildings. 1040xform The part of the cost that you allocate to each asset is the ratio of the fair market value of that asset to the fair market value of the whole property at the time you buy it. 1040xform   If you are not certain of the fair market values of the land and the buildings, you can divide the cost between them based on their assessed values for real estate tax purposes. 1040xform Example. 1040xform You buy a house and land for $200,000. 1040xform The purchase contract does not specify how much of the purchase price is for the house and how much is for the land. 1040xform The latest real estate tax assessment on the property was based on an assessed value of $160,000, of which $136,000 was for the house and $24,000 was for the land. 1040xform You can allocate 85% ($136,000 ÷ $160,000) of the purchase price to the house and 15% ($24,000 ÷ $160,000) of the purchase price to the land. 1040xform Your basis in the house is $170,000 (85% of $200,000) and your basis in the land is $30,000 (15% of $200,000). 1040xform Basis Other Than Cost You cannot use cost as a basis for property that you received: In return for services you performed; In an exchange for other property; As a gift; From your spouse, or from your former spouse as the result of a divorce; or As an inheritance. 1040xform If you received property in one of these ways, see Publication 551 for information on how to figure your basis. 1040xform Adjusted Basis To figure your property's basis for depreciation, you may have to make certain adjustments (increases and decreases) to the basis of the property for events occurring between the time you acquired the property and the time you placed it in service for business or the production of income. 1040xform The result of these adjustments to the basis is the adjusted basis. 1040xform Increases to basis. 1040xform   You must increase the basis of any property by the cost of all items properly added to a capital account. 1040xform These include the following. 1040xform The cost of any additions or improvements made before placing your property into service as a rental that have a useful life of more than 1 year. 1040xform Amounts spent after a casualty to restore the damaged property. 1040xform The cost of extending utility service lines to the property. 1040xform Legal fees, such as the cost of defending and perfecting title, or settling zoning issues. 1040xform Additions or improvements. 1040xform   Add to the basis of your property the amount an addition or improvement actually cost you, including any amount you borrowed to make the addition or improvement. 1040xform This includes all direct costs, such as material and labor, but does not include your own labor. 1040xform It also includes all expenses related to the addition or improvement. 1040xform   For example, if you had an architect draw up plans for remodeling your property, the architect's fee is a part of the cost of the remodeling. 1040xform Or, if you had your lot surveyed to put up a fence, the cost of the survey is a part of the cost of the fence. 1040xform   Keep separate accounts for depreciable additions or improvements made after you place the property in service in your rental activity. 1040xform For information on depreciating additions or improvements, see Additions or improvements to property , later in this chapter, under Recovery Periods Under GDS. 1040xform    The cost of landscaping improvements is usually treated as an addition to the basis of the land, which is not depreciable. 1040xform However, see What Rental Property Cannot Be Depreciated, earlier. 1040xform Assessments for local improvements. 1040xform   Assessments for items which tend to increase the value of property, such as streets and sidewalks, must be added to the basis of the property. 1040xform For example, if your city installs curbing on the street in front of your house, and assesses you and your neighbors for its cost, you must add the assessment to the basis of your property. 1040xform Also add the cost of legal fees paid to obtain a decrease in an assessment levied against property to pay for local improvements. 1040xform You cannot deduct these items as taxes or depreciate them. 1040xform    However, you can deduct as taxes, charges or assessments for maintenance, repairs, or interest charges related to the improvements. 1040xform Do not add them to your basis in the property. 1040xform Deducting vs. 1040xform capitalizing costs. 1040xform   Do not add to your basis costs you can deduct as current expenses. 1040xform However, there are certain costs you can choose either to deduct or to capitalize. 1040xform If you capitalize these costs, include them in your basis. 1040xform If you deduct them, do not include them in your basis. 1040xform   The costs you may choose to deduct or capitalize include carrying charges, such as interest and taxes, that you must pay to own property. 1040xform   For more information about deducting or capitalizing costs and how to make the election, see Carrying Charges in Publication 535, chapter 7. 1040xform Decreases to basis. 1040xform   You must decrease the basis of your property by any items that represent a return of your cost. 1040xform These include the following. 1040xform Insurance or other payment you receive as the result of a casualty or theft loss. 1040xform Casualty loss not covered by insurance for which you took a deduction. 1040xform Amount(s) you receive for granting an easement. 1040xform Residential energy credits you were allowed before 1986, or after 2005, if you added the cost of the energy items to the basis of your home. 1040xform Exclusion from income of subsidies for energy conservation measures. 1040xform Special depreciation allowance claimed on qualified property. 1040xform Depreciation you deducted, or could have deducted, on your tax returns under the method of depreciation you chose. 1040xform If you did not deduct enough or deducted too much in any year, see Depreciation under Decreases to Basis in Publication 551. 1040xform   If your rental property was previously used as your main home, you must also decrease the basis by the following. 1040xform Gain you postponed from the sale of your main home before May 7, 1997, if the replacement home was converted to your rental property. 1040xform District of Columbia first-time homebuyer credit allowed on the purchase of your main home after August 4, 1997 and before January 1, 2012. 1040xform Amount of qualified principal residence indebtedness discharged on or after January 1, 2007. 1040xform Claiming the Special Depreciation Allowance For 2013, your residential rental property may qualify for a special depreciation allowance. 1040xform This allowance is figured before you figure your regular depreciation deduction. 1040xform See Publication 946, chapter 3, for details. 1040xform Also see the Instructions for Form 4562, Line 14. 1040xform If you qualify for, but choose not to take, a special depreciation allowance, you must attach a statement to your return. 1040xform The details of this election are in Publication 946, chapter 3, and the Instructions for Form 4562, Line 14. 1040xform MACRS Depreciation Most business and investment property placed in service after 1986 is depreciated using MACRS. 1040xform This section explains how to determine which MACRS depreciation system applies to your property. 1040xform It also discusses other information you need to know before you can figure depreciation under MACRS. 1040xform This information includes the property's: Recovery class, Applicable recovery period, Convention, Placed-in-service date, Basis for depreciation, and Depreciation method. 1040xform Depreciation Systems MACRS consists of two systems that determine how you depreciate your property—the General Depreciation System (GDS) and the Alternative Depreciation System (ADS). 1040xform You must use GDS unless you are specifically required by law to use ADS or you elect to use ADS. 1040xform Excluded Property You cannot use MACRS for certain personal property (such as furniture or appliances) placed in service in your rental property in 2013 if it had been previously placed in service before 1987 when MACRS became effective. 1040xform In most cases, personal property is excluded from MACRS if you (or a person related to you) owned or used it in 1986 or if your tenant is a person (or someone related to the person) who owned or used it in 1986. 1040xform However, the property is not excluded if your 2013 deduction under MACRS (using a half-year convention) is less than the deduction you would have under ACRS. 1040xform For more information, see What Method Can You Use To Depreciate Your Property? in Publication 946, chapter 1. 1040xform Electing ADS If you choose, you can use the ADS method for most property. 1040xform Under ADS, you use the straight line method of depreciation. 1040xform The election of ADS for one item in a class of property generally applies to all property in that class that is placed in service during the tax year of the election. 1040xform However, the election applies on a property-by-property basis for residential rental property and nonresidential real property. 1040xform If you choose to use ADS for your residential rental property, the election must be made in the first year the property is placed in service. 1040xform Once you make this election, you can never revoke it. 1040xform For property placed in service during 2013, you make the election to use ADS by entering the depreciation on Form 4562, Part III, Section C, line 20c. 1040xform Property Classes Under GDS Each item of property that can be depreciated under MACRS is assigned to a property class, determined by its class life. 1040xform The property class generally determines the depreciation method, recovery period, and convention. 1040xform The property classes under GDS are: 3-year property, 5-year property, 7-year property, 10-year property, 15-year property, 20-year property, Nonresidential real property, and Residential rental property. 1040xform Under MACRS, property that you placed in service during 2013 in your rental activities generally falls into one of the following classes. 1040xform 5-year property. 1040xform This class includes computers and peripheral equipment, office machinery (typewriters, calculators, copiers, etc. 1040xform ), automobiles, and light trucks. 1040xform This class also includes appliances, carpeting, furniture, etc. 1040xform , used in a residential rental real estate activity. 1040xform Depreciation on automobiles, other property used for transportation, computers and related peripheral equipment, and property of a type generally used for entertainment, recreation, or amusement is limited. 1040xform See chapter 5 of Publication 946. 1040xform 7-year property. 1040xform This class includes office furniture and equipment (desks, file cabinets, etc. 1040xform ). 1040xform This class also includes any property that does not have a class life and that has not been designated by law as being in any other class. 1040xform 15-year property. 1040xform This class includes roads, fences, and shrubbery (if depreciable). 1040xform Residential rental property. 1040xform This class includes any real property that is a rental building or structure (including a mobile home) for which 80% or more of the gross rental income for the tax year is from dwelling units. 1040xform It does not include a unit in a hotel, motel, inn, or other establishment where more than half of the units are used on a transient basis. 1040xform If you live in any part of the building or structure, the gross rental income includes the fair rental value of the part you live in. 1040xform The other property classes do not generally apply to property used in rental activities. 1040xform These classes are not discussed in this publication. 1040xform See Publication 946 for more information. 1040xform Recovery Periods Under GDS The recovery period of property is the number of years over which you recover its cost or other basis. 1040xform The recovery periods are generally longer under ADS than GDS. 1040xform The recovery period of property depends on its property class. 1040xform Under GDS, the recovery period of an asset is generally the same as its property class. 1040xform Class lives and recovery periods for most assets are listed in Appendix B of Publication 946. 1040xform See Table 2-1 for recovery periods of property commonly used in residential rental activities. 1040xform Qualified Indian reservation property. 1040xform   Shorter recovery periods are provided under MACRS for qualified Indian reservation property placed in service on Indian reservations. 1040xform For more information, see chapter 4 of Publication 946. 1040xform Additions or improvements to property. 1040xform   Treat additions or improvements you make to your depreciable rental property as separate property items for depreciation purposes. 1040xform   The property class and recovery period of the addition or improvement is the one that would apply to the original property if you had placed it in service at the same time as the addition or improvement. 1040xform   The recovery period for an addition or improvement to property begins on the later of: The date the addition or improvement is placed in service, or The date the property to which the addition or improvement was made is placed in service. 1040xform Example. 1040xform You own a residential rental house that you have been renting since 1986 and depreciating under ACRS. 1040xform You built an addition onto the house and placed it in service in 2013. 1040xform You must use MACRS for the addition. 1040xform Under GDS, the addition is depreciated as residential rental property over 27. 1040xform 5 years. 1040xform Table 2-1. 1040xform MACRS Recovery Periods for Property Used in Rental Activities   MACRS Recovery Period   Type of Property General Depreciation System Alternative Depreciation System   Computers and their peripheral equipment 5 years 5 years   Office machinery, such as: Typewriters Calculators Copiers 5 years 6 years   Automobiles 5 years 5 years   Light trucks 5 years 5 years   Appliances, such as: Stoves Refrigerators 5 years 9 years   Carpets 5 years 9 years   Furniture used in rental property 5 years 9 years   Office furniture and equipment, such as: Desks Files 7 years 10 years   Any property that does not have a class life and that has not been designated by law as being in any other class 7 years 12 years   Roads 15 years 20 years   Shrubbery 15 years 20 years   Fences 15 years 20 years   Residential rental property (buildings or structures) and structural components such as furnaces, waterpipes, venting, etc. 1040xform 27. 1040xform 5 years 40 years   Additions and improvements, such as a new roof The same recovery period as that of the property to which the addition or improvement is made, determined as if the property were placed in service at the same time as the addition or improvement. 1040xform   Conventions A convention is a method established under MACRS to set the beginning and end of the recovery period. 1040xform The convention you use determines the number of months for which you can claim depreciation in the year you place property in service and in the year you dispose of the property. 1040xform Mid-month convention. 1040xform    A mid-month convention is used for all residential rental property and nonresidential real property. 1040xform Under this convention, you treat all property placed in service, or disposed of, during any month as placed in service, or disposed of, at the midpoint of that month. 1040xform Mid-quarter convention. 1040xform   A mid-quarter convention must be used if the mid-month convention does not apply and the total depreciable basis of MACRS property placed in service in the last 3 months of a tax year (excluding nonresidential real property, residential rental property, and property placed in service and disposed of in the same year) is more than 40% of the total basis of all such property you place in service during the year. 1040xform   Under this convention, you treat all property placed in service, or disposed of, during any quarter of a tax year as placed in service, or disposed of, at the midpoint of the quarter. 1040xform Example. 1040xform During the tax year, Tom Martin purchased the following items to use in his rental property. 1040xform He elects not to claim the special depreciation allowance discussed earlier. 1040xform A dishwasher for $400 that he placed in service in January. 1040xform Used furniture for $100 that he placed in service in September. 1040xform A refrigerator for $800 that he placed in service in October. 1040xform Tom uses the calendar year as his tax year. 1040xform The total basis of all property placed in service that year is $1,300. 1040xform The $800 basis of the refrigerator placed in service during the last 3 months of his tax year exceeds $520 (40% × $1,300). 1040xform Tom must use the mid-quarter convention instead of the half-year convention for all three items. 1040xform Half-year convention. 1040xform    The half-year convention is used if neither the mid-quarter convention nor the mid-month convention applies. 1040xform Under this convention, you treat all property placed in service, or disposed of, during a tax year as placed in service, or disposed of, at the midpoint of that tax year. 1040xform   If this convention applies, you deduct a half year of depreciation for the first year and the last year that you depreciate the property. 1040xform You deduct a full year of depreciation for any other year during the recovery period. 1040xform Figuring Your Depreciation Deduction You can figure your MACRS depreciation deduction in one of two ways. 1040xform The deduction is substantially the same both ways. 1040xform You can either: Actually compute the deduction using the depreciation method and convention that apply over the recovery period of the property, or Use the percentage from the MACRS percentage tables. 1040xform In this publication we will use the percentage tables. 1040xform For instructions on how to compute the deduction, see chapter 4 of Publication 946. 1040xform Residential rental property. 1040xform   You must use the straight line method and a mid-month convention for residential rental property. 1040xform In the first year that you claim depreciation for residential rental property, you can claim depreciation only for the number of months the property is in use, and you must use the mid-month convention (explained under Conventions , earlier). 1040xform 5-, 7-, or 15-year property. 1040xform   For property in the 5- or 7-year class, use the 200% declining balance method and a half-year convention. 1040xform However, in limited cases you must use the mid-quarter convention, if it applies. 1040xform For property in the 15-year class, use the 150% declining balance method and a half-year convention. 1040xform   You can also choose to use the 150% declining balance method for property in the 5- or 7-year class. 1040xform The choice to use the 150% method for one item in a class of property applies to all property in that class that is placed in service during the tax year of the election. 1040xform You make this election on Form 4562. 1040xform In Part III, column (f), enter “150 DB. 1040xform ” Once you make this election, you cannot change to another method. 1040xform   If you use either the 200% or 150% declining balance method, you figure your deduction using the straight line method in the first tax year that the straight line method gives you an equal or larger deduction. 1040xform   You can also choose to use the straight line method with a half-year or mid-quarter convention for 5-, 7-, or 15-year property. 1040xform The choice to use the straight line method for one item in a class of property applies to all property in that class that is placed in service during the tax year of the election. 1040xform You elect the straight line method on Form 4562. 1040xform In Part III, column (f), enter “S/L. 1040xform ” Once you make this election, you cannot change to another method. 1040xform MACRS Percentage Tables You can use the percentages in Table 2-2, earlier, to compute annual depreciation under MACRS. 1040xform The tables show the percentages for the first few years or until the change to the straight line method is made. 1040xform See Appendix A of Publication 946 for complete tables. 1040xform The percentages in Tables 2-2a, 2-2b, and 2-2c make the change from declining balance to straight line in the year that straight line will give a larger deduction. 1040xform If you elect to use the straight line method for 5-, 7-, or 15-year property, or the 150% declining balance method for 5- or 7-year property, use the tables in Appendix A of Publication 946. 1040xform How to use the percentage tables. 1040xform   You must apply the table rates to your property's unadjusted basis (defined below) each year of the recovery period. 1040xform   Once you begin using a percentage table to figure depreciation, you must continue to use it for the entire recovery period unless there is an adjustment to the basis of your property for a reason other than: Depreciation allowed or allowable, or An addition or improvement that is depreciated as a separate item of property. 1040xform   If there is an adjustment for any reason other than (1) or (2), for example, because of a deductible casualty loss, you can no longer use the table. 1040xform For the year of the adjustment and for the remaining recovery period, figure depreciation using the property's adjusted basis at the end of the year and the appropriate depreciation method, as explained earlier under Figuring Your Depreciation Deduction . 1040xform See Figuring the Deduction Without Using the Tables in Publication 946, chapter 4. 1040xform Unadjusted basis. 1040xform   This is the same basis you would use to figure gain on a sale (see Basis of Depreciable Property , earlier), but without reducing your original basis by any MACRS depreciation taken in earlier years. 1040xform   However, you do reduce your original basis by other amounts claimed on the property, including: Any amortization, Any section 179 deduction, and Any special depreciation allowance. 1040xform For more information, see chapter 4 of Publication 946. 1040xform Please click here for the text description of the image. 1040xform Table 2-2 Tables 2-2a, 2-2b, and 2-2c. 1040xform   The percentages in these tables take into account the half-year and mid-quarter conventions. 1040xform Use Table 2-2a for 5-year property, Table 2-2b for 7-year property, and Table 2-2c for 15-year property. 1040xform Use the percentage in the second column (half-year convention) unless you are required to use the mid-quarter convention (explained earlier). 1040xform If you must use the mid-quarter convention, use the column that corresponds to the calendar year quarter in which you placed the property in service. 1040xform Example 1. 1040xform You purchased a stove and refrigerator and placed them in service in June. 1040xform Your basis in the stove is $600 and your basis in the refrigerator is $1,000. 1040xform Both are 5-year property. 1040xform Using the half-year convention column in Table 2-2a, the depreciation percentage for Year 1 is 20%. 1040xform For that year your depreciation deduction is $120 ($600 × . 1040xform 20) for the stove and $200 ($1,000 × . 1040xform 20) for the refrigerator. 1040xform For Year 2, the depreciation percentage is 32%. 1040xform That year's depreciation deduction will be $192 ($600 × . 1040xform 32) for the stove and $320 ($1,000 × . 1040xform 32) for the refrigerator. 1040xform Example 2. 1040xform Assume the same facts as in Example 1, except you buy the refrigerator in October instead of June. 1040xform Since the refrigerator was placed in service in the last 3 months of the tax year, and its basis ($1,000) is more than 40% of the total basis of all property placed in service during the year ($1,600 × . 1040xform 40 = $640), you are required to use the mid-quarter convention to figure depreciation on both the stove and refrigerator. 1040xform Because you placed the refrigerator in service in October, you use the fourth quarter column of Table 2-2a and find the depreciation percentage for Year 1 is 5%. 1040xform Your depreciation deduction for the refrigerator is $50 ($1,000 x . 1040xform 05). 1040xform Because you placed the stove in service in June, you use the second quarter column of Table 2-2a and find the depreciation percentage for Year 1 is 25%. 1040xform For that year, your depreciation deduction for the stove is $150 ($600 x . 1040xform 25). 1040xform Table 2-2d. 1040xform    Use this table when you are using the GDS 27. 1040xform 5 year option for residential rental property. 1040xform Find the row for the month that you placed the property in service. 1040xform Use the percentages listed for that month to figure your depreciation deduction. 1040xform The mid-month convention is taken into account in the percentages shown in the table. 1040xform Continue to use the same row (month) under the column for the appropriate year. 1040xform Example. 1040xform You purchased a single family rental house for $185,000 and placed it in service on February 8. 1040xform The sales contract showed that the building cost $160,000 and the land cost $25,000. 1040xform Your basis for depreciation is its original cost, $160,000. 1040xform This is the first year of service for your residential rental property and you decide to use GDS which has a recovery period of 27. 1040xform 5 years. 1040xform Using Table 2-2d, you find that the percentage for property placed in service in February of Year 1 is 3. 1040xform 182%. 1040xform That year's depreciation deduction is $5,091 ($160,000 x . 1040xform 03182). 1040xform Figuring MACRS Depreciation Under ADS Table 2–1, earlier, shows the ADS recovery periods for property used in rental activities. 1040xform See Appendix B in Publication 946 for other property. 1040xform If your property is not listed in Appendix B, it is considered to have no class life. 1040xform Under ADS, personal property with no class life is depreciated using a recovery period of 12 years. 1040xform Use the mid-month convention for residential rental property and nonresidential real property. 1040xform For all other property, use the half-year or mid-quarter convention, as appropriate. 1040xform See Publication 946 for ADS depreciation tables. 1040xform Claiming the Correct Amount of Depreciation You should claim the correct amount of depreciation each tax year. 1040xform If you did not claim all the depreciation you were entitled to deduct, you must still reduce your basis in the property by the full amount of depreciation that you could have deducted. 1040xform For more information, see Depreciation under Decreases to Basis in Publication 551. 1040xform If you deducted an incorrect amount of depreciation for property in any year, you may be able to make a correction by filing Form 1040X, Amended U. 1040xform S. 1040xform Individual Income Tax Return. 1040xform If you are not allowed to make the correction on an amended return, you can change your accounting method to claim the correct amount of depreciation. 1040xform Filing an amended return. 1040xform   You can file an amended return to correct the amount of depreciation claimed for any property in any of the following situations. 1040xform You claimed the incorrect amount because of a mathematical error made in any year. 1040xform You claimed the incorrect amount because of a posting error made in any year. 1040xform You have not adopted a method of accounting for property placed in service by you in tax years ending after December 29, 2003. 1040xform You claimed the incorrect amount on property placed in service by you in tax years ending before December 30, 2003. 1040xform   Generally, you adopt a method of accounting for depreciation by using a permissible method of determining depreciation when you file your first tax return for the property used in your rental activity. 1040xform This also occurs when you use the same impermissible method of determining depreciation (for example, using the wrong MACRS recovery period) in two or more consecutively filed tax returns. 1040xform   If an amended return is allowed, you must file it by the later of the following dates. 1040xform 3 years from the date you filed your original return for the year in which you did not deduct the correct amount. 1040xform A return filed before an unextended due date is considered filed on that due date. 1040xform 2 years from the time you paid your tax for that year. 1040xform Changing your accounting method. 1040xform   To change your accounting method, you generally must file Form 3115, Application for Change in Accounting Method, to get the consent of the IRS. 1040xform In some instances, that consent is automatic. 1040xform For more information, see Changing Your Accounting Method in Publication 946,  chapter 1. 1040xform Prev  Up  Next   Home   More Online Publications
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Understanding Your CP141C Notice

You are receiving this notice because you did not respond to a previous request for missing or incomplete information on your return and your return is late.


What you need to do

  • Send the incomplete/missing information described in the “About your return” section on the notice.
  • Include the contact voucher at the end of the notice.
  • Send the amount due to avoid interest charges.

You may want to

  • If the reason your return was incomplete was beyond your control, send us a signed explanation with any supporting documentation.

Answers to Common Questions

Q. What if I disagree with the penalty?

A. Send a written statement with any supporting documentation to the address on the notice.

 

Page Last Reviewed or Updated: 21-Jan-2014

Printable samples of this notice (PDF)

 

 

How to get help

  • Call the 1-800 number listed on the top right corner of your notice.
  • Authorize someone (e.g., accountant) to contact the IRS on your behalf using Form 2848.
  • See if you qualify for help from a Low Income Taxpayer Clinic.
     

The 1040xform

1040xform Index Symbols "Hours of service" limits, Individuals subject to hours of service limits. 1040xform Form 2106, Hours of service limits. 1040xform 50% limit on meals, 50% limit on meals. 1040xform A Accountable plans, Accountable Plans, Per diem allowance more than federal rate. 1040xform Accounting to employer, Accountable Plans Adequate accounting, Adequate Accounting Independent contractors, Adequate accounting. 1040xform Adequate records, What Are Adequate Records? Advertising Car display, Advertising display on car. 1040xform Expenses, 3 - Advertising expenses. 1040xform Signs, display racks, or other promotional material to be used on recipient's business premises, Exceptions. 1040xform Airline clubs, Club dues and membership fees. 1040xform Allocating costs, Separating costs. 1040xform , Separating costs. 1040xform , Allocating between business and nonbusiness. 1040xform , Allocating total cost. 1040xform Allowance (see Reimbursements) Armed forces Assigned overseas, Members of the Armed Forces. 1040xform Assistance (see Tax help) Associated entertainment, Associated Test Athletic clubs, Club dues and membership fees. 1040xform B Basis of car, Basis. 1040xform (see also Depreciation of car) Bona fide business purpose, Bona fide business purpose. 1040xform Box seats at entertainment events, Skyboxes and other private luxury boxes. 1040xform Business travel, Trip Primarily for Business Outside U. 1040xform S. 1040xform , Travel Entirely for Business or Considered Entirely for Business Business use of car, Business and personal use. 1040xform More-than-50%-use test. 1040xform , More-than-50%-use test. 1040xform Qualified business use, Qualified business use. 1040xform C Canceled checks As evidence of business expenses, Canceled check. 1040xform Car expenses, Car Expenses, Reporting inclusion amounts. 1040xform Actual expenses, Actual Car Expenses Allowances for, Per Diem and Car Allowances, Allowance more than the federal rate. 1040xform Business and personal use, Business and personal use. 1040xform Combining expenses, Car expenses. 1040xform Disposition of car, Disposition of a Car Fixed and variable rate (FAVR) allowance, Fixed and variable rate (FAVR). 1040xform Form 2106, Car expenses. 1040xform Leasing a car, truck, or van, Leasing a Car, Reporting inclusion amounts. 1040xform Mileage rate (see Standard mileage rate) Taxes paid on car, Taxes paid on your car. 1040xform Traffic tickets, Fines and collateral. 1040xform Car pools, Car pools. 1040xform Car rentals, Reporting inclusion amounts. 1040xform Form 2106, Car rentals. 1040xform Car, defined, Car defined. 1040xform Car, truck, or van rentals, Leasing a Car, Reporting inclusion amounts. 1040xform Casualty and theft losses Cars, Casualty and theft losses. 1040xform Depreciation, Casualty or theft. 1040xform Charitable organizations Benefit events for, Exception for events that benefit charitable organizations. 1040xform Sports events to benefit, 5 - Charitable sports event. 1040xform Club dues, Club dues and membership fees. 1040xform Commuting expenses, Commuting expenses. 1040xform Conventions, Conventions, Meetings at conventions. 1040xform Country clubs, Club dues and membership fees. 1040xform Cruise ships, Cruise Ships D Daily business mileage and expense log (Table 6-2), Table 5-2. 1040xform Daily Business Mileage and Expense Log Name: Depreciation of car, Depreciation and section 179 deductions. 1040xform (see also Section 179 deductions) Adjustment for using standard mileage rate, Depreciation adjustment when you used the standard mileage rate. 1040xform Basis, Basis. 1040xform Sales taxes, Sales taxes. 1040xform Unrecovered basis, How to treat unrecovered basis. 1040xform Casualty or theft, effect, Casualty or theft. 1040xform Deduction, Depreciation and section 179 deductions. 1040xform , Depreciation deduction for the year of disposition. 1040xform Excess depreciation, Excess depreciation. 1040xform Modified Accelerated Cost Recovery System (MACRS), Modified Accelerated Cost Recovery System (MACRS). 1040xform Trade-in, effect, Car trade-in. 1040xform , Trade-in. 1040xform Trucks and vans, Trucks and vans. 1040xform Depreciation of Car Section 179 deduction, Section 179 deduction. 1040xform Directly-related entertainment, Directly-Related Test Disabled employees Impairment-related work expenses, Impairment-Related Work Expenses of Disabled Employees Documentary evidence, Documentary evidence. 1040xform E Employer-provided vehicles, Employer-provided vehicle. 1040xform Reporting requirements, Vehicle Provided by Your Employer Entertainment expenses, Entertainment, Individuals subject to hours of service limits. 1040xform , Gift or entertainment. 1040xform 50% limit, Directly before or after business discussion. 1040xform Determination of applicability (Figure A), 50% Limit Associated test, Associated Test Deductible, What Entertainment Expenses Are Deductible?, Expenses for spouses. 1040xform Summary (Table 2-1), Exception for events that benefit charitable organizations. 1040xform Directly-related test, Directly-Related Test Entertainment, defined, Entertainment. 1040xform Form 2106, Meal and entertainment expenses. 1040xform Tickets (see Tickets) Entertainment facilities Expenses for use of, Entertainment facilities. 1040xform Estimates of expenses, How To Prove Expenses Exceptions to the 50% Limit, Exceptions to the 50% Limit Excess reimbursements (see Reimbursements) Extravagant expenses, Lavish or extravagant. 1040xform , Lavish or extravagant expenses. 1040xform F Fair market value of car, Fair market value. 1040xform Farmers Form 1040, Schedule F, Self-employed. 1040xform Federal crime investigations or prosecutions Federal employees engaged in, Exception for federal crime investigations or prosecutions. 1040xform Federal rate for per diem, Standard Meal Allowance, The federal rate. 1040xform Fee-basis officials, Officials Paid on a Fee Basis Fees you pay, Parking fees. 1040xform Fixed and variable rate (FAVR) allowance, Fixed and variable rate (FAVR). 1040xform Form 1040, Schedule C, Self-employed. 1040xform Form 1040, Schedule F, Self-employed. 1040xform Form 2106, How to choose. 1040xform , Employees. 1040xform , Full value included in your income. 1040xform , Reporting your expenses under a nonaccountable plan. 1040xform , Completing Forms 2106 and 2106-EZ Form 2106-EZ, Form 2106-EZ. 1040xform Form 4562, Self-employed. 1040xform Form 4797, Excess depreciation. 1040xform Form W-2 Employer-provided vehicles, Value reported on Form W-2. 1040xform Reimbursement of personal expenses, Reimbursement for personal expenses. 1040xform Statutory employees, Statutory employees. 1040xform Free tax services, Free help with your tax return. 1040xform G Gifts, Gift or entertainment. 1040xform , Gifts $25 limit, $25 limit. 1040xform Combining for recordkeeping purposes, Gift expenses. 1040xform Reporting requirements, Gifts. 1040xform Golf clubs, Club dues and membership fees. 1040xform H Hauling tools, Hauling tools or instruments. 1040xform Help (see Tax help) High-low method Introduction, High-low method. 1040xform Transition rules, High-low method. 1040xform High-low rate method, High-low rate. 1040xform Home office, Office in the home. 1040xform Hotel clubs, Club dues and membership fees. 1040xform I Impairment-related work expenses, Impairment-Related Work Expenses of Disabled Employees Incidental expenses Defined, Incidental expenses. 1040xform Gifts, Incidental costs. 1040xform No meals, incidentals only, Incidental-expenses-only method. 1040xform Income-producing property, Income-producing property. 1040xform Incomplete records, What If I Have Incomplete Records? Indefinite job assignment, Temporary assignment vs. 1040xform indefinite assignment. 1040xform Independent contractors, Rules for Independent Contractors and Clients Interest on car loans, Interest on car loans. 1040xform Itinerants, Tax Home L Lavish or extravagant expenses, Lavish or extravagant. 1040xform , Lavish or extravagant expenses. 1040xform Leasing a car, truck, or van, Leasing a Car, Reporting inclusion amounts. 1040xform Luxury private boxes at entertainment events, Skyboxes and other private luxury boxes. 1040xform Luxury water travel, Luxury Water Travel M MACRS (Modified Accelerated Cost Recovery System), Modified Accelerated Cost Recovery System (MACRS). 1040xform 2011 chart (Table 4-1), Table 4-1. 1040xform 2013 MACRS Depreciation Chart (Use to Figure Depreciation for 2013. 1040xform ) Main place of business or work, Main place of business or work. 1040xform Married taxpayers Performing artists, Special rules for married persons. 1040xform Meal expenses, Meals 50% limit, 50% Limit Determination of applicability (Figure A), 50% Limit Exceptions, Exceptions to the 50% Limit Actual cost method, Actual Cost Form 2106, Meal and entertainment expenses. 1040xform Major cities with higher allowances, Amount of standard meal allowance. 1040xform Standard meal allowance, Standard Meal Allowance, Who can use the standard meal allowance. 1040xform , The standard meal allowance. 1040xform Meals, entertainment-related, A meal as a form of entertainment. 1040xform Mileage rate (see Standard mileage rate) Military (see Armed forces) Missing children, photographs of, Reminder Modified Accelerated Cost Recovery System (MACRS), Modified Accelerated Cost Recovery System (MACRS). 1040xform 2011 chart (Table 4-1), Table 4-1. 1040xform 2013 MACRS Depreciation Chart (Use to Figure Depreciation for 2013. 1040xform ) N Nonaccountable plans, Nonaccountable Plans O Office in the home, Office in the home. 1040xform Officials paid on fee basis, Officials Paid on a Fee Basis Overseas travel Conventions, Conventions Held Outside the North American Area Meal allowance, Standard meal allowance for areas outside the continental United States. 1040xform Part of trip outside U. 1040xform S. 1040xform , Part of Trip Outside the United States P Parking fees, Parking fees. 1040xform , Parking fees and tolls. 1040xform Per diem allowances, Per Diem and Car Allowances, Allowance more than the federal rate. 1040xform Defined, Reimbursement, allowance, or advance. 1040xform Federal rate for, The federal rate. 1040xform Per diem rates High-cost localities, High-low method. 1040xform High-low method, High-low method. 1040xform Regular federal method, Regular federal per diem rate method. 1040xform Standard rate for unlisted localities, High-low method. 1040xform , Regular federal per diem rate method. 1040xform Transition rules, High-low method. 1040xform , Federal per diem rate method. 1040xform Performing artists, Expenses of Certain Performing Artists Personal property taxes, Personal property taxes. 1040xform , Taxes paid on your car. 1040xform Personal trips, Trip Primarily for Personal Reasons Outside U. 1040xform S. 1040xform , Travel Primarily for Personal Reasons Placed in service, cars, Placed in service. 1040xform Probationary work period, Probationary work period. 1040xform Proving business purpose, Proving business purpose. 1040xform Public transportation Outside of U. 1040xform S. 1040xform travel, Public transportation. 1040xform Publications (see Tax help) R Recordkeeping requirements, Recordkeeping, Examples of Records Adequate records, What Are Adequate Records? Daily business mileage and expense log (Table 6-2), Table 5-2. 1040xform Daily Business Mileage and Expense Log Name: Destroyed records, Destroyed records. 1040xform How to prove expenses (Table 5-1), Table 5-1. 1040xform How To Prove Certain Business Expenses Incomplete records, What If I Have Incomplete Records? Reimbursed expenses, Reimbursed for expenses. 1040xform Sampling to prove expenses, Sampling. 1040xform Separating and combining expenses, Separating and Combining Expenses, If your return is examined. 1040xform Three-year period of retention, How Long To Keep Records and Receipts Weekly travel expense and entertainment record (Table 6-3), THIS IS NOT AN OFFICIAL INTERNAL REVENUE FORM Regular federal method Introduction, Regular federal per diem rate method. 1040xform Transition rules, Federal per diem rate method. 1040xform Reimbursements, Less than full value included in your income. 1040xform , Contractor does not adequately account. 1040xform Accountable plans, Accountable Plans Excess, Returning Excess Reimbursements, Nonaccountable Plans Form 2106, Reimbursements. 1040xform Nonaccountable plans, Nonaccountable Plans Nondeductible expenses, Reimbursement of nondeductible expenses. 1040xform Personal expenses, Reimbursement for personal expenses. 1040xform Recordkeeping, Reimbursed for expenses. 1040xform Reporting (Table 6-1), Table 6-1. 1040xform Reporting Travel, Entertainment, Gift, and Car Expenses and Reimbursements Unclaimed, Where To Report Reporting requirements, How To Report Per diem or car allowance, Reporting your expenses with a per diem or car allowance. 1040xform Reimbursements, Reimbursements, Contractor does not adequately account. 1040xform Reservists Transportation expenses, Armed Forces reservists. 1040xform Traveling more than 100 miles from home, Armed Forces Reservists Traveling More Than 100 Miles From Home Returning excess reimbursements, Returning Excess Reimbursements Rural mail carriers, Rural mail carriers. 1040xform S Section 179 deduction Amended return, How to choose. 1040xform Deduction, Section 179 Deduction Limits, Limits. 1040xform Self-employed persons, 2 - Self-employed. 1040xform Reporting requirements, Self-employed. 1040xform Skyboxes, Skyboxes and other private luxury boxes. 1040xform Spouse, expenses for, Travel expenses for another individual. 1040xform , Expenses for spouses. 1040xform Standard meal allowance, Standard Meal Allowance, Who can use the standard meal allowance. 1040xform , The standard meal allowance. 1040xform Standard mileage rate, What's New, Standard Mileage Rate, The standard mileage rate. 1040xform Depreciation adjustment for using, Depreciation adjustment when you used the standard mileage rate. 1040xform Form 2106, Standard mileage rate. 1040xform Statutory employees, Statutory employees. 1040xform T Tables and figures 50% limit determination (Figure A), 50% Limit Daily business mileage and expense log (Table 6-2), Table 5-2. 1040xform Daily Business Mileage and Expense Log Name: Entertainment expenses, determination of deductibility (Table 2-1), Table 2-1. 1040xform When Are Entertainment Expenses Deductible? Maximum depreciation deduction for cars table, Maximum Depreciation Deduction for Cars Modified Accelerated Cost Recovery System (MACRS) 2011 chart (Table 4-1), Table 4-1. 1040xform 2013 MACRS Depreciation Chart (Use to Figure Depreciation for 2013. 1040xform ) Proving expenses (Table 5-1), Table 5-1. 1040xform How To Prove Certain Business Expenses Reporting reimbursements (Table 6-1), Table 6-1. 1040xform Reporting Travel, Entertainment, Gift, and Car Expenses and Reimbursements Transportation expenses, determination of deductibility (Figure B), Gift or entertainment. 1040xform , Illustration of transportation expenses. 1040xform Travel expenses, determination of deductibility (Table 1-1), Table 1-1. 1040xform Travel Expenses You Can Deduct Weekly travel expense and entertainment record (Table 6-3), THIS IS NOT AN OFFICIAL INTERNAL REVENUE FORM Tax help, How To Get Tax Help Tax home, determination of, Tax Home Temporary job assignments, Temporary Assignment or Job Temporary work location, Temporary work location. 1040xform Tickets, Entertainment tickets. 1040xform , Gift or entertainment. 1040xform Season or series tickets, Season or series tickets. 1040xform Traffic violations, Fines and collateral. 1040xform Tools Hauling tools, Hauling tools or instruments. 1040xform Trade association meetings, Trade association meetings. 1040xform Trade-in of car, Car trade-in. 1040xform , Trade-in. 1040xform Traffic tickets, Fines and collateral. 1040xform Transients, Tax Home Transition rules, Transition Rules Example High-low method, High-low method. 1040xform High-low method, High-low method. 1040xform Regular federal method, Federal per diem rate method. 1040xform Transportation expenses, Transportation, Depreciation deduction for the year of disposition. 1040xform Car expenses, Car Expenses, Reporting inclusion amounts. 1040xform Deductible (Figure B), Gift or entertainment. 1040xform , Illustration of transportation expenses. 1040xform five or more cars, Five or more cars. 1040xform Form 2106, Transportation expenses. 1040xform Transportation workers, Special rate for transportation workers. 1040xform , Individuals subject to hours of service limits. 1040xform Travel advance, Reimbursement, allowance, or advance. 1040xform , Travel advance. 1040xform (see also Reimbursements) Travel expenses, Travel, Cruise Ships Another individual accompanying taxpayer, Travel expenses for another individual. 1040xform Away from home, Traveling Away From Home, Tax Home Deductible, What Travel Expenses Are Deductible?, Cruise Ships Summary of (Table 1-1), Table 1-1. 1040xform Travel Expenses You Can Deduct Defined, Travel expenses defined. 1040xform Going home on days off, Going home on days off. 1040xform In U. 1040xform S. 1040xform , Travel in the United States Lodging, Standard Meal Allowance Luxury water travel, Luxury Water Travel Outside U. 1040xform S. 1040xform , Travel Outside the United States Travel to family home, Tax Home Different From Family Home Trucks and vans Depreciation, Trucks and vans. 1040xform Transportation workers, Individuals subject to hours of service limits. 1040xform Transportation workers' expenses, Special rate for transportation workers. 1040xform Two places of work, Two places of work. 1040xform U Unclaimed reimbursements, Where To Report Unions Trips from union hall to place of work, Union members' trips from a union hall. 1040xform Unrecovered basis of car, How to treat unrecovered basis. 1040xform V Volunteers, Volunteers. 1040xform W Weekly travel expense and entertainment record (Table 6-3), THIS IS NOT AN OFFICIAL INTERNAL REVENUE FORM Prev  Up     Home   More Online Publications