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2008 Federal Tax Forms

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2008 Federal Tax Forms

2008 federal tax forms Publication 544 - Additional Material Table of Contents Tax Publications for Business TaxpayersSee How To Get Tax Help for a variety of ways to get publications, including by computer, phone, and mail. 2008 federal tax forms General Guides 1 Your Rights as a Taxpayer 17 Your Federal Income Tax (For Individuals) 334 Tax Guide for Small Business (For Individuals Who Use Schedule C or C-EZ) 509 Tax Calendars 910 IRS Guide to Free Tax Services Employer's Guides 15 (Circular E), Employer's Tax Guide 15-A Employer's Supplemental Tax Guide 15-B Employer's Tax Guide to Fringe Benefits 51 (Circular A), Agricultural Employer's Tax Guide 80 (Circular SS), Federal Tax Guide For Employers in the U. 2008 federal tax forms S. 2008 federal tax forms Virgin Islands, Guam, American Samoa, and the Commonwealth of the Northern Mariana Islands 926 Household Employer's Tax Guide Specialized Publications 225 Farmer's Tax Guide 463 Travel, Entertainment, Gift, and Car Expenses 505 Tax Withholding and Estimated Tax 510 Excise Taxes (Including Fuel Tax Credits and Refunds) 515 Withholding of Tax on Nonresident Aliens and Foreign Entities 517 Social Security and Other Information for Members of the Clergy and Religious Workers 527 Residential Rental Property 534 Depreciating Property Placed in Service Before 1987 535 Business Expenses 536 Net Operating Losses (NOLs) for Individuals, Estates, and Trusts 537 Installment Sales 538 Accounting Periods and Methods 541 Partnerships 542 Corporations 544 Sales and Other Dispositions of Assets 551 Basis of Assets 556 Examination of Returns, Appeal Rights, and Claims for Refund 560 Retirement Plans for Small Business (SEP, SIMPLE, and Qualified Plans) 561 Determining the Value of Donated Property 583 Starting a Business and Keeping Records 587 Business Use of Your Home (Including Use by Daycare Providers) 594 What You Should Know About The IRS Collection Process 595 Capital Construction Fund for Commercial Fishermen 597 Information on the United States-Canada Income Tax Treaty 598 Tax on Unrelated Business Income of Exempt Organizations 686 Certification for Reduced Tax Rates in Tax Treaty Countries 901 U. 2008 federal tax forms S. 2008 federal tax forms Tax Treaties 908 Bankruptcy Tax Guide 925 Passive Activity and At-Risk Rules 946 How To Depreciate Property 947 Practice Before the IRS and Power of Attorney 1544 Reporting Cash Payments of Over $10,000 (Received in a Trade or Business) 1546 Taxpayer Advocate Service - Your Voice at the IRS Spanish Language Publications 1SP Derechos del Contribuyente 179 (Circular PR), Guía Contributiva Federal Para Patronos Puertorriqueños 579SP Cómo Preparar la Declaración de Impuesto Federal 594SP Qué es lo Debemos Saber Sobre El Proceso de Cobro del IRS 850 English-Spanish Glossary of Words and Phrases Used in Publications Issued by the Internal Revenue Service 1544SP Informe de Pagos en Efectivo en Exceso de $10,000 (Recibidos en una Ocupación o Negocio) Commonly Used Tax FormsSee How To Get Tax Help for a variety of ways to get forms, including by computer, phone, and mail. 2008 federal tax forms Form Number and Form Title W-2 Wage and Tax Statement W-4 Employee's Withholding Allowance Certificate 940 Employer's Annual Federal Unemployment (FUTA) Tax Return 941 Employer's QUARTERLY Federal Tax Return 944 Employer's ANNUAL Federal Tax Return 1040 U. 2008 federal tax forms S. 2008 federal tax forms Individual Income Tax Return Sch. 2008 federal tax forms A & B Itemized Deductions & Interest and Ordinary Dividends Sch. 2008 federal tax forms C Profit or Loss From Business Sch. 2008 federal tax forms C-EZ Net Profit From Business Sch. 2008 federal tax forms D Capital Gains and Losses Sch. 2008 federal tax forms E Supplemental Income and Loss Sch. 2008 federal tax forms F Profit or Loss From Farming Sch. 2008 federal tax forms H Household Employment Taxes Sch. 2008 federal tax forms J Income Averaging for Farmers and Fishermen Sch. 2008 federal tax forms R Credit for the Elderly or the Disabled Sch. 2008 federal tax forms SE Self-Employment Tax 1040-ES Estimated Tax for Individuals 1040X Amended U. 2008 federal tax forms S. 2008 federal tax forms Individual Income Tax Return 1065 U. 2008 federal tax forms S. 2008 federal tax forms Return of Partnership Income Sch. 2008 federal tax forms D Capital Gains and Losses Sch. 2008 federal tax forms K-1 Partner's Share of Income, Deductions, Credits, etc. 2008 federal tax forms 1120 U. 2008 federal tax forms S. 2008 federal tax forms Corporation Income Tax Return Sch. 2008 federal tax forms D Capital Gains and Losses 1120S U. 2008 federal tax forms S. 2008 federal tax forms Income Tax Return for an S Corporation Sch. 2008 federal tax forms D Capital Gains and Losses and Built-In Gains Sch. 2008 federal tax forms K-1 Shareholder's Share of Income, Deductions, Credits, etc. 2008 federal tax forms 2106 Employee Business Expenses 2106-EZ Unreimbursed Employee Business Expenses 2210 Underpayment of Estimated Tax by Individuals, Estates, and Trusts 2441 Child and Dependent Care Expenses 2848 Power of Attorney and Declaration of Representative 3800 General Business Credit 3903 Moving Expenses 4562 Depreciation and Amortization 4797 Sales of Business Property 4868 Application for Automatic Extension of Time To File U. 2008 federal tax forms S. 2008 federal tax forms Individual Income Tax Return 5329 Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts 6252 Installment Sale Income 7004 Application for Automatic Extension of Time To File Certain Business Income Tax, Information, and Other Returns 8283 Noncash Charitable Contributions 8300 Report of Cash Payments Over $10,000 Received in a Trade or Business 8582 Passive Activity Loss Limitations 8606 Nondeductible IRAs 8822 Change of Address 8829 Expenses for Business Use of Your Home 8949 Sales and Other Dispositions of Capital Assets Prev  Up  Next   Home   More Online Publications
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The 2008 Federal Tax Forms

2008 federal tax forms Depreciation Table of Contents Introduction Special Depreciation AllowanceQualified Property Election Not To Claim the Allowance Rules for Returns Filed Before June 1, 2002 Passenger Automobiles New York Liberty Zone BenefitsSpecial Liberty Zone Depreciation Allowance Increased Section 179 Deduction Liberty Zone Leasehold Improvement Property If you depreciate business property that you acquired and placed in service after September 10, 2001, new law contains provisions that may affect your depreciation deduction for that property. 2008 federal tax forms Publication 946, How To Depreciate Property, contains information on depreciation. 2008 federal tax forms However, Publication 946 does not contain the new provisions because it was printed before the law was enacted. 2008 federal tax forms The new provisions are in the Supplement to Publication 946, which is reprinted below. 2008 federal tax forms Supplement to Publication 946 How To Depreciate Property   Introduction After Publication 946 was printed, the Job Creation and Worker Assistance Act of 2002 was signed into law by the President. 2008 federal tax forms The new law made several changes in the tax rules explained in the publication. 2008 federal tax forms Some of the changes apply to property placed in service during 2001. 2008 federal tax forms This supplemental publication describes those changes and explains what you should do if you are affected by them. 2008 federal tax forms The situations and examples in Publication 946 do not reflect any of the changes made by the Job Creation and Worker Assistance Act of 2002. 2008 federal tax forms The new law contains the following provisions. 2008 federal tax forms 30% depreciation deductions (special depreciation allowance and special New York Liberty Zone (Liberty Zone) depreciation allowance) for the year qualified property is placed in service after September 10, 2001. 2008 federal tax forms An increased dollar limit on the section 179 deduction for qualified Liberty Zone property purchased after September 10, 2001. 2008 federal tax forms A shorter recovery period for qualified Liberty Zone leasehold improvement property placed in service after September 10, 2001. 2008 federal tax forms An increase in the maximum depreciation deduction for 2001 for a qualified passenger automobile placed in service after September 10, 2001. 2008 federal tax forms If you believe you qualify for an increased deduction under any of these new rules, you must file the revised 2001 Form 4562 (dated March 2002) for 2001 calendar or fiscal years and 2000 fiscal years ending after September 10, 2001. 2008 federal tax forms If you have already filed a tax return, this supplemental publication explains how to claim these benefits and how to elect not to claim the special depreciation allowance or special Liberty Zone depreciation allowance. 2008 federal tax forms See Table 2 at the end of the supplement for an overview of the rules that apply if you filed your return before June 1, 2002. 2008 federal tax forms Special Depreciation Allowance You can take a special depreciation allowance for qualified property you place in service after September 10, 2001. 2008 federal tax forms The allowance is an additional deduction of 30% of the property's depreciable basis. 2008 federal tax forms To figure the depreciable basis, you must first multiply the property's cost or other basis by the percentage of business/investment use and then reduce that amount by any section 179 deduction and certain other deductions and credits for the property. 2008 federal tax forms See What Is the Basis for Depreciation? on page 23 in Publication 946 for more information on figuring depreciable basis. 2008 federal tax forms The allowance is deductible for both regular tax and alternative minimum tax (AMT) purposes. 2008 federal tax forms There is no AMT adjustment required for any depreciation figured on the remaining basis of the property. 2008 federal tax forms In the year you claim the allowance (generally the year you place the property in service), you must reduce the depreciable basis of the property by the allowance before figuring your regular depreciation deduction. 2008 federal tax forms Example 1. 2008 federal tax forms On November 1, 2001, you bought and placed in service in your business qualified property that cost $100,000. 2008 federal tax forms You did not elect to claim a section 179 deduction. 2008 federal tax forms You can deduct 30% of the cost ($30,000) as a special depreciation allowance for 2001. 2008 federal tax forms You use the remaining $70,000 of cost to figure your regular depreciation deduction for 2001 and later years. 2008 federal tax forms Example 2. 2008 federal tax forms The facts are the same as in Example 1, except that you choose to deduct $24,000 of the property's cost as a section 179 deduction. 2008 federal tax forms You use the remaining $76,000 of cost to figure your special depreciation allowance of $22,800 ($76,000 × 30%). 2008 federal tax forms You use the remaining $53,200 of cost to figure your regular depreciation deduction for 2001 and later years. 2008 federal tax forms Qualified Property To qualify for the special depreciation allowance, your property must meet the following requirements. 2008 federal tax forms It is new property of one of the following types. 2008 federal tax forms Property depreciated under the modified accelerated cost recovery system (MACRS) with a recovery period of 20 years or less. 2008 federal tax forms See Can You Use MACRS To Depreciate Your Property and Which Recovery Period Applies? on pages 7 and 23, respectively, in Publication 946. 2008 federal tax forms Water utility property. 2008 federal tax forms See 25-year property on page 22 in Publication 946. 2008 federal tax forms Computer software that is not a section 197 intangible as described in Computer software on page 5 in Publication 946. 2008 federal tax forms (The cost of some computer software is treated as part of the cost of hardware and is depreciated under MACRS. 2008 federal tax forms ) Qualified leasehold improvement property (defined later). 2008 federal tax forms It meets the following tests (explained later under Tests To Be Met). 2008 federal tax forms Acquisition date test. 2008 federal tax forms Placed in service date test. 2008 federal tax forms Original use test. 2008 federal tax forms It is not excepted property (explained later under Excepted Property). 2008 federal tax forms Qualified leasehold improvement property. 2008 federal tax forms    Generally, this is any improvement to an interior part of a building that is nonresidential real property, provided all of the following requirements are met. 2008 federal tax forms The improvement is made under or pursuant to a lease by the lessee (or any sublessee) or the lessor of that part of the building. 2008 federal tax forms That part of the building is to be occupied exclusively by the lessee (or any sublessee) of that part. 2008 federal tax forms The improvement is placed in service more than 3 years after the date the building was first placed in service. 2008 federal tax forms   However, a qualified leasehold improvement does not include any improvement for which the expenditure is attributable to any of the following. 2008 federal tax forms The enlargement of the building. 2008 federal tax forms Any elevator or escalator. 2008 federal tax forms Any structural component benefiting a common area. 2008 federal tax forms The internal structural framework of the building. 2008 federal tax forms   Generally, a binding commitment to enter into a lease is treated as a lease and the parties to the commitment are treated as the lessor and lessee. 2008 federal tax forms However, a binding commitment between related persons is not treated as a lease. 2008 federal tax forms Related persons. 2008 federal tax forms   For this purpose, the following are related persons. 2008 federal tax forms Members of an affiliated group. 2008 federal tax forms The persons listed in items (1) through (9) under Related persons on page 8 of Publication 946 (except that “80% or more” should be substituted for “more than 10%” each place it appears). 2008 federal tax forms An executor and a beneficiary of the same estate. 2008 federal tax forms Tests To Be Met To qualify for the special depreciation allowance, the property must meet all of the following tests. 2008 federal tax forms Acquisition date test. 2008 federal tax forms    Generally, you must have acquired the property either: After September 10, 2001, and before September 11, 2004, but only if no written binding contract for the acquisition was in effect before September 11, 2001, or Pursuant to a written binding contract entered into after September 10, 2001, and before September 11, 2004. 2008 federal tax forms   Property you manufacture, construct, or produce for your own use meets this test if you began the manufacture, construction, or production of the property after September 10, 2001, and before September 11, 2004. 2008 federal tax forms Placed in service date test. 2008 federal tax forms   Generally, the property must be placed in service for use in your trade or business or for the production of income after September 10, 2001, and before January 1, 2005. 2008 federal tax forms   If you sold property you placed in service after September 10, 2001, and you leased it back within 3 months after the property was originally placed in service, the property is treated as placed in service no earlier than the date it is used under the leaseback. 2008 federal tax forms Original use test. 2008 federal tax forms   The original use of the property must have begun with you after September 10, 2001. 2008 federal tax forms “Original use” means the first use to which the property is put, whether or not by you. 2008 federal tax forms Additional capital expenditures you incurred after September 10, 2001, to recondition or rebuild your property meet the original use test. 2008 federal tax forms Excepted Property The following property does not qualify for the special depreciation allowance. 2008 federal tax forms Property used by any person before September 11, 2001. 2008 federal tax forms Property required to be depreciated using ADS. 2008 federal tax forms This includes listed property used 50% or less in a qualified business use. 2008 federal tax forms Qualified New York Liberty Zone leasehold improvement property (defined next). 2008 federal tax forms Qualified New York Liberty Zone leasehold improvement property. 2008 federal tax forms   This is any qualified leasehold improvement property (as defined earlier) if all of the following requirements are met. 2008 federal tax forms The improvement is to a building located in the New York Liberty Zone (defined later under New York Liberty Zone Benefits). 2008 federal tax forms The improvement is placed in service after September 10, 2001, and before January 1, 2007. 2008 federal tax forms No written binding contract for the improvement was in effect before September 11, 2001. 2008 federal tax forms Election Not To Claim the Allowance You can elect not to claim the special depreciation allowance for qualified property. 2008 federal tax forms If you make this election for any property, it applies to all property in the same property class placed in service during the year. 2008 federal tax forms To make this election, attach a statement to your return indicating you elect not to claim the allowance and the class of property for which you are making the election. 2008 federal tax forms When to make election. 2008 federal tax forms   Generally, you must make the election on a timely filed tax return (including extensions) for the year in which you place the property in service. 2008 federal tax forms   However, if you timely filed your return for the year without making the election, you can still make the election by filing an amended return within 6 months of the due date of the original return (not including extensions). 2008 federal tax forms Attach the election statement to the amended return. 2008 federal tax forms At the top of the election statement, write “Filed pursuant to section 301. 2008 federal tax forms 9100–2. 2008 federal tax forms ” Revoking an election. 2008 federal tax forms   Once you elect not to deduct the special depreciation allowance for a class of property, you cannot revoke the election without IRS consent. 2008 federal tax forms A request to revoke the election is subject to a user fee. 2008 federal tax forms Rules for Returns Filed Before June 1, 2002 The following rules apply if you placed qualified property in service after September 10, 2001, and filed your return before June 1, 2002. 2008 federal tax forms The rules apply to returns for the following years. 2008 federal tax forms 2000 fiscal years that end after September 10, 2001. 2008 federal tax forms 2001 calendar and fiscal years. 2008 federal tax forms Claiming the allowance. 2008 federal tax forms   If you did not claim the allowance on your return and did not make the election not to claim the allowance, you can do either of the following to claim the allowance. 2008 federal tax forms File an amended return by the due date (not including extensions) of your return for the year following the year the property was placed in service. 2008 federal tax forms Write “Filed Pursuant to Rev. 2008 federal tax forms Proc. 2008 federal tax forms 2002–33” at the top of the amended return. 2008 federal tax forms File Form 3115, Application for Change in Accounting Method, with your return for the year following the year the property was placed in service. 2008 federal tax forms Your return must be filed by the due date (including extensions). 2008 federal tax forms Write “Automatic Change Filed Under Rev. 2008 federal tax forms Proc. 2008 federal tax forms 2002–33” on the appropriate line of Form 3115. 2008 federal tax forms You must also file a copy (with signature) of the completed Form 3115 with the IRS National Office no later than when you file the original with your return. 2008 federal tax forms For more information about filing Form 3115, including the address to send it to, see Revenue Procedure 2002–9, Revenue Procedure 2002–19, and Revenue Procedure 2002–33. 2008 federal tax forms Example 1. 2008 federal tax forms You are an individual and you use the calendar year. 2008 federal tax forms You placed qualified property in service for your business in December 2001. 2008 federal tax forms You filed your 2001 income tax return before April 15, 2002. 2008 federal tax forms You did not claim the special depreciation allowance for the property and did not make the election not to claim the allowance. 2008 federal tax forms You can claim the special allowance by filing an amended 2001 return by April 15, 2003, with “Filed Pursuant to Rev. 2008 federal tax forms Proc. 2008 federal tax forms 2002–33” at the top of the amended return. 2008 federal tax forms You must file an amended return by April 15, 2003, even if you get an extension of time to file your 2002 tax return. 2008 federal tax forms Example 2. 2008 federal tax forms The facts concerning your 2001 return are the same as in Example 1. 2008 federal tax forms In addition, you got an automatic 4-month extension of time (to August 15, 2003) to file your 2002 return. 2008 federal tax forms You can claim the special allowance by filing a Form 3115 (with “Filed Pursuant to Rev. 2008 federal tax forms Proc. 2008 federal tax forms 2002–33” on the appropriate line) with your 2002 return by August 15, 2003. 2008 federal tax forms You must also file a copy of this Form 3115 with the IRS National Office no later than when you file your 2002 return. 2008 federal tax forms Electing not to claim the allowance. 2008 federal tax forms   Generally, you have elected not to claim the special depreciation allowance for a class of property if you: Filed your return timely (including extensions) for the year you placed qualified property in service and indicated on a statement with the return that you are not claiming the allowance, or Filed your return timely and filed an amended return within 6 months of the due date of the original return (not including extensions) and indicated on a statement with the amended return that you are not claiming the allowance. 2008 federal tax forms The statement must indicate that you are not deducting the special depreciation allowance and the class of property to which the election applies. 2008 federal tax forms The statement can be either attached to or written on the return. 2008 federal tax forms You can, for example, write “not deducting 30%” on Form 4562. 2008 federal tax forms Deemed election. 2008 federal tax forms   If you have not followed either of the procedures described above to elect not to claim the allowance, you may still be treated as making the election. 2008 federal tax forms You will be treated as making the election if you meet both of the following conditions. 2008 federal tax forms You filed your return for the year you placed the property in service and claimed depreciation, but not the special allowance, for any class of property. 2008 federal tax forms You do not file an amended return or a Form 3115 within the time prescribed for claiming the special allowance. 2008 federal tax forms See Claiming the allowance, earlier. 2008 federal tax forms Passenger Automobiles The limit on your depreciation deduction (including any section 179 deduction) for any passenger automobile that is qualified property (defined earlier) placed in service after September 10, 2001, and for which you claim the special depreciation allowance is increased. 2008 federal tax forms Generally, the limit is increased from $3,060 to $7,660. 2008 federal tax forms However, if the automobile is a qualified electric car, the limit is increased from $9,280 to $23,080 ($22,980 if placed in service in 2002). 2008 federal tax forms Table 1 shows the maximum deduction amounts for 2001. 2008 federal tax forms Table 1. 2008 federal tax forms Maximum Deduction for 2001 Qualified Vehicle Placed in Service Before Sept. 2008 federal tax forms 11 Placed in Service After Sept. 2008 federal tax forms 10 Passenger automobile $3,060 $7,660 Electric car 9,280 23,080 1 1$22,980 if you place an electric car in service in 2002. 2008 federal tax forms Election not to claim the allowance. 2008 federal tax forms   The increased maximum depreciation deduction does not apply if you elected not to claim the special depreciation allowance as explained earlier under Election Not To Claim the Allowance and Rules for Returns Filed Before June 1, 2002. 2008 federal tax forms New York Liberty Zone Benefits Several benefits are available for property you place in service in the New York Liberty Zone (Liberty Zone). 2008 federal tax forms They include a special depreciation allowance for the year you place the property in service, an increased section 179 deduction, and the classification of certain leasehold improvement property as 5-year property. 2008 federal tax forms Area defined. 2008 federal tax forms   The New York Liberty Zone is the area located on or south of Canal Street, East Broadway (east of its intersection with Canal Street), or Grand Street (east of its intersection with East Broadway) in the Borough of Manhattan in the City of New York, New York. 2008 federal tax forms Special Liberty Zone Depreciation Allowance You can take a special depreciation allowance for qualified Liberty Zone property you place in service after September 10, 2001. 2008 federal tax forms The allowance is an additional deduction of 30% of the property's depreciable basis. 2008 federal tax forms To figure the depreciable basis, you must first multiply the property's cost or other basis by the percentage of business/investment use and then reduce that amount by any section 179 deduction and certain other deductions and credits for the property. 2008 federal tax forms See What Is the Basis for Depreciation? on page 23 in Publication 946 for more information on figuring depreciable basis. 2008 federal tax forms The allowance is deductible for both regular tax and alternative minimum tax (AMT) purposes. 2008 federal tax forms There is no AMT adjustment required for any depreciation figured on the remaining basis of the property. 2008 federal tax forms In the year you claim the allowance (generally the year you place the property in service), you must reduce the depreciable basis of the property by the allowance before figuring your regular depreciation deduction. 2008 federal tax forms You cannot claim the special Liberty Zone depreciation allowance for property eligible for the special depreciation allowance explained earlier in Qualified Property under Special Depreciation Allowance. 2008 federal tax forms Qualified property is eligible for only one special depreciation allowance. 2008 federal tax forms Example 1. 2008 federal tax forms On November 1, 2001, you bought and placed in service in your business, which is in the Liberty Zone, qualified Liberty Zone property that cost $200,000. 2008 federal tax forms You did not elect to claim a section 179 deduction. 2008 federal tax forms You can deduct 30% of the cost ($60,000) as a special Liberty Zone depreciation allowance for 2001. 2008 federal tax forms You use the remaining $140,000 of cost to figure your regular depreciation deduction for 2001 and later years. 2008 federal tax forms Example 2. 2008 federal tax forms The facts are the same as in Example 1, except that you choose to deduct $59,000 of the property's cost as a section 179 deduction. 2008 federal tax forms (See Increased Section 179 Deduction, later, for information concerning how this section 179 deduction amount is figured). 2008 federal tax forms You use the remaining $141,000 of cost to figure your special Liberty Zone depreciation allowance of $42,300 ($141,000 × 30%). 2008 federal tax forms You use the remaining $98,700 of cost to figure your regular depreciation deduction for 2001 and later years. 2008 federal tax forms Qualified Liberty Zone Property For a 2001 calendar or fiscal year and a 2000 fiscal year that ends after September 10, 2001, property qualifies for the special Liberty Zone depreciation allowance if it meets the following requirements. 2008 federal tax forms It is one of the following types of property. 2008 federal tax forms Used property depreciated under MACRS with a recovery period of 20 years or less. 2008 federal tax forms See Can You Use MACRS To Depreciate Your Property and Which Recovery Period Applies? on pages 7 and 23, respectively, in Publication 946. 2008 federal tax forms Used water utility property. 2008 federal tax forms See 25-year property on page 22 in Publication 946. 2008 federal tax forms Used computer software that is not a section 197 intangible as described in Computer software on page 5 in Publication 946. 2008 federal tax forms (The cost of some computer software is treated as part of the cost of hardware and is depreciated under MACRS. 2008 federal tax forms ) Certain nonresidential real property and residential rental property (defined later). 2008 federal tax forms It meets the following tests (explained later under Tests to be met). 2008 federal tax forms Acquisition date test. 2008 federal tax forms Placed in service date test. 2008 federal tax forms Substantial use test. 2008 federal tax forms Original use test. 2008 federal tax forms It is not excepted property (explained later under Excepted property). 2008 federal tax forms Nonresidential real property and residential rental property. 2008 federal tax forms   This property is qualifying property only to the extent it rehabilitates real property damaged, or replaces real property destroyed or condemned, as a result of the terrorist attack of September 11, 2001. 2008 federal tax forms Property is treated as replacing destroyed or condemned property if, as part of an integrated plan, such property replaces real property included in a continuous area that includes real property destroyed or condemned. 2008 federal tax forms   For these purposes, real property is considered destroyed (or condemned) only if an entire building or structure was destroyed (or condemned) as a result of the terrorist attack. 2008 federal tax forms Otherwise, the property is considered damaged real property. 2008 federal tax forms For example, if certain structural components of a building (such as walls, floors, or plumbing fixtures) are damaged or destroyed as a result of the terrorist attack, but the building is not destroyed (or condemned), then only costs related to replacing the damaged or destroyed structural components qualify for the special Liberty Zone depreciation allowance. 2008 federal tax forms Tests to be met. 2008 federal tax forms   To qualify for the special Liberty Zone depreciation allowance, your property must meet all of the following tests. 2008 federal tax forms Acquisition date test. 2008 federal tax forms   You must have acquired the property by purchase after September 10, 2001, and there must not have been a binding written contract for the acquisition in effect before September 11, 2001. 2008 federal tax forms   For information on the acquisition of property by purchase, see Property Acquired by Purchase on page 15 of Publication 946. 2008 federal tax forms   Property you manufacture, construct, or produce for your own use meets this test if you began the manufacture, construction, or production of the property after September 10, 2001. 2008 federal tax forms Placed in service date test. 2008 federal tax forms   Generally, the property must be placed in service for use in your trade or business or for the production of income before January 1, 2007 (January 1, 2010, in the case of qualifying nonresidential real property and residential rental property). 2008 federal tax forms   If you sold property you placed in service after September 10, 2001, and you leased it back within 3 months after the property was originally placed in service, the property is treated as placed in service no earlier than the date it is used under the leaseback. 2008 federal tax forms Substantial use test. 2008 federal tax forms   Substantially all use of the property must be in the Liberty Zone and in the active conduct of your trade or business in the Liberty Zone. 2008 federal tax forms Original use test. 2008 federal tax forms   The original use of the property in the Liberty Zone must have begun with you after September 10, 2001. 2008 federal tax forms   Used property can be qualified Liberty Zone property if it has not previously been used within the Liberty Zone. 2008 federal tax forms Also, additional capital expenditures you incurred after September 10, 2001, to recondition or rebuild your property meet the original use test if the original use of the property in the Liberty Zone began with you. 2008 federal tax forms Excepted property. 2008 federal tax forms   The following property does not qualify for the special Liberty Zone depreciation allowance. 2008 federal tax forms Property eligible for the special depreciation allowance explained earlier in Qualified Property under Special Depreciation Allowance. 2008 federal tax forms Property required to be depreciated using ADS. 2008 federal tax forms This includes listed property used 50% or less in a qualified business use. 2008 federal tax forms Qualified New York Liberty Zone leasehold improvement property (defined earlier in Excepted Property under Special Depreciation Allowance). 2008 federal tax forms Example. 2008 federal tax forms In December 2001, you bought and placed in service in your business in the Liberty Zone the following property. 2008 federal tax forms New office furniture with a MACRS recovery period of 7 years. 2008 federal tax forms A used computer with a MACRS recovery period of 5 years. 2008 federal tax forms The computer had not previously been used within the Liberty Zone. 2008 federal tax forms Because the office furniture is new property, it qualifies for the special depreciation allowance, but not the special Liberty Zone depreciation allowance. 2008 federal tax forms Because the computer is used property that had not previously been used in the Liberty Zone, it qualifies for the special Liberty Zone depreciation allowance, but not the special depreciation allowance. 2008 federal tax forms Election Not To Claim the Liberty Zone Allowance You can elect not to claim the special Liberty Zone depreciation allowance for qualified property. 2008 federal tax forms If you make this election for any property, it applies to all property in the same property class placed in service during the year. 2008 federal tax forms To make this election, attach a statement to your return indicating you elect not to claim the allowance and the class of property for which you are making the election. 2008 federal tax forms When to make the election. 2008 federal tax forms   Generally, you must make the election on a timely filed tax return (including extensions) for the year in which you place the property in service. 2008 federal tax forms   However, if you timely filed your return for the year without making the election, you can still make the election by filing an amended return within 6 months of the due date of the original return (not including extensions). 2008 federal tax forms Attach the election statement to the amended return. 2008 federal tax forms At the top of the election statement, write “Filed pursuant to section 301. 2008 federal tax forms 9100–2. 2008 federal tax forms ” Revoking an election. 2008 federal tax forms   Once you elect not to deduct the special Liberty Zone depreciation allowance for a class of property, you cannot revoke the election without IRS consent. 2008 federal tax forms A request to revoke the election is subject to a user fee. 2008 federal tax forms Returns filed before June 1, 2002. 2008 federal tax forms   The rules that apply to the special depreciation allowance discussed earlier in Rules for Returns Filed Before June 1, 2002 under Special Depreciation Allowance also apply to the special Liberty Zone depreciation allowance. 2008 federal tax forms Increased Section 179 Deduction Under section 179 of the Internal Revenue Code, you can choose to recover all or part of the cost of certain qualifying property, up to a limit, by deducting it in the year you place the property in service. 2008 federal tax forms For tax years beginning in 2000, that limit was $20,000. 2008 federal tax forms For tax years beginning in 2001 and 2002, that limit is generally $24,000. 2008 federal tax forms If the cost of qualifying section 179 property placed in service in a year is over $200,000, you must reduce the dollar limit (but not below zero) by the amount of the cost over $200,000. 2008 federal tax forms Increased Dollar Limit The dollar limit on the section 179 deduction is increased for certain property placed in service in the Liberty Zone. 2008 federal tax forms The increase is the smaller of the following amounts. 2008 federal tax forms $35,000. 2008 federal tax forms The cost of section 179 property that is qualified Liberty Zone property placed in service during the year. 2008 federal tax forms If you use the revised 2001 Form 4562 (dated March 2002) for a tax year beginning in 2000, you must reduce the section 179 dollar limit to $20,000 before adding the additional amount for qualified property. 2008 federal tax forms Qualified property. 2008 federal tax forms   To qualify for the increased section 179 deduction, your property must be section 179 property that is either: Qualified Liberty Zone property, or Property that would be qualified Liberty Zone property except that it is eligible for the special depreciation allowance. 2008 federal tax forms Qualified Liberty Zone property is explained earlier in Qualified Liberty Zone Property under Special Liberty Zone Depreciation Allowance. 2008 federal tax forms Property eligible for the special depreciation allowance is explained earlier in Qualified Property under Special Depreciation Allowance. 2008 federal tax forms For information on the requirements that must be met for property to qualify for the section 179 deduction, see What Property Qualifies? on page 14 of Publication 946. 2008 federal tax forms Example 1. 2008 federal tax forms In 2002, you place in service in your business, which is in the Liberty Zone, qualified property (defined earlier) costing $25,000. 2008 federal tax forms Because this cost is less than $35,000, the dollar limit on the section 179 deduction is increased by $25,000 to $49,000 ($24,000 + $25,000). 2008 federal tax forms Example 2. 2008 federal tax forms In 2002, you place in service in your business, which is in the Liberty Zone, qualified property (defined earlier) costing $75,000. 2008 federal tax forms Because $35,000 is less than the cost of the property you place in service, the dollar limit on the section 179 deduction you can claim is increased by $35,000 to $59,000 ($24,000 + $35,000). 2008 federal tax forms Reduced Dollar Limit Generally, you must reduce the dollar limit for a year by the cost of qualifying section 179 property placed in service in the year that is more than $200,000. 2008 federal tax forms However, if the cost of your Liberty Zone property exceeds $200,000, you take into account only 50% (instead of 100%) of the cost of qualified property placed in service in a year. 2008 federal tax forms Example. 2008 federal tax forms In 2002, you place in service in your business, which is in the Liberty Zone, qualified property costing $460,000. 2008 federal tax forms Your increased dollar limit is $59,000 ($35,000 + $24,000). 2008 federal tax forms Because 50% of the cost of the property you place in service ($230,000) is $30,000 more than $200,000, you must reduce your $59,000 dollar limit to $29,000 ($59,000 - $30,000). 2008 federal tax forms Recapture Rules Rules similar to those explained on page 20 of Publication 946 under When Must You Recapture the Deduction? apply with respect to any qualified property you stop using in the Liberty Zone. 2008 federal tax forms Returns Filed Before June 1, 2002 If you filed a return before June 1, 2002, and did not deduct the increased section 179 amount for qualified property placed in service after September 10, 2001, you can deduct the increased amount by filing an amended return by the due date (not including extensions) of the return for the year after the year the property was placed in service. 2008 federal tax forms This rule applies to returns for the following years. 2008 federal tax forms 2000 fiscal years that end after September 10, 2001. 2008 federal tax forms 2001 calendar and fiscal years. 2008 federal tax forms On the amended return, write “Filed Pursuant to Rev. 2008 federal tax forms Proc. 2008 federal tax forms 2002–33. 2008 federal tax forms ” Liberty Zone Leasehold Improvement Property Qualified Liberty Zone leasehold improvement property (described earlier in Qualified Property under Special Depreciation Allowance) is 5-year property. 2008 federal tax forms This means that it is depreciated over a recovery period of 5 years. 2008 federal tax forms For information about recovery periods, see Which Recovery Period Applies? on page 23 of Publication 946. 2008 federal tax forms The straight-line method must be used with respect to qualified Liberty Zone leasehold improvement property. 2008 federal tax forms Under ADS, the recovery period for qualified Liberty Zone leasehold improvement property is 9 years. 2008 federal tax forms Returns Filed Before June 1, 2002 If you filed either of the following returns before June 1, 2002, and did not depreciate qualified Liberty Zone leasehold improvement property placed in service during the tax year as 5-year property using the straight line method, you should file an amended return before you file your return for the year after the year the property was placed in service. 2008 federal tax forms Your 2000 fiscal year return (for a 2000 fiscal year that ends after September 10, 2001). 2008 federal tax forms Your 2001 calendar or fiscal year return. 2008 federal tax forms On the amended return, write “Filed Pursuant to Rev. 2008 federal tax forms Proc. 2008 federal tax forms 2002–33. 2008 federal tax forms ” Table 2. 2008 federal tax forms Rules for Returns Filed Before June 1, 2002 Note:This chart highlights the rules for returns affected by the Job Creation and Worker Assistance Act of 2002 that were filed before June 1, 2002, without accounting for any of the new benefits under the law. 2008 federal tax forms See the text for definitions and examples. 2008 federal tax forms Do not rely on this chart alone. 2008 federal tax forms IF you want to. 2008 federal tax forms . 2008 federal tax forms . 2008 federal tax forms THEN you. 2008 federal tax forms . 2008 federal tax forms . 2008 federal tax forms BY. 2008 federal tax forms . 2008 federal tax forms . 2008 federal tax forms claim the special depreciation allowance or special Liberty Zone depreciation allowance • must file an amended return • the due date (not including extensions) of your return for the year after the year the property was placed in service, or • must file Form 3115, Application for Change in Accounting Method, with your return for the year after the year the property was placed in service • the due date (including extensions) of your return for the year after the year the property was placed in service, and • must file a copy of your completed Form 3115 with the IRS National Office • the date you file the original Form 3115 with your return for the year after the year the property was placed in service. 2008 federal tax forms elect not to claim the special depreciation allowance or the special Liberty Zone depreciation allowance 1 • must have filed your return timely for the year the property was placed in service, and   • must file an amended return stating you are not claiming the allowance • the date that is 6 months after the due date of the original return (not including extensions). 2008 federal tax forms deduct the increased section 179 amount • must file an amended return • the due date (not including extensions) of your return for the year after the year the property was placed in service. 2008 federal tax forms use a 5-year recovery period for depreciating qualified Liberty Zone leasehold improvement property • should file an amended return • the date you file your return for the year after the year the property was placed in service. 2008 federal tax forms 1See also Deemed election under Rules for Returns Filed Before June 1, 2002, earlier. 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