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2011 efile Publication 1544 - Main Content Table of Contents Why Report These Payments? Who Must File Form 8300?What Payments Must Be Reported? What Is Cash? Taxpayer Identification Number (TIN) What Is a Related Transaction? What About Suspicious Transactions? When, Where, and What To File Examples Penalties How To Get Tax HelpLow Income Taxpayer Clinics (LITCs). 2011 efile Why Report These Payments? Drug dealers and smugglers often use large cash payments to “launder” money from illegal activities. 2011 efile Laundering means converting “dirty” or illegally-gained money to “clean” money. 2011 efile The government can often trace this laundered money through the payments you report. 2011 efile Laws passed by Congress require you to report these payments. 2011 efile Your compliance with these laws provides valuable information that can stop those who evade taxes and those who profit from the drug trade and other criminal activities. 2011 efile The USA PATRIOT Act of 2001 increased the scope of these laws to help trace funds used for terrorism. 2011 efile Who Must File Form 8300? Generally, any person in a trade or business who receives more than $10,000 in cash in a single transaction or in related transactions must file Form 8300. 2011 efile For example, you may have to file Form 8300 if you are a dealer in jewelry, furniture, boats, aircraft, or automobiles; a pawnbroker; an attorney; a real estate broker; an insurance company; or a travel agency. 2011 efile Special rules for clerks of federal or state courts are discussed later under Bail received by court clerks. 2011 efile However, you do not have to file Form 8300 if the transaction is not related to your trade or business. 2011 efile For example, if you own a jewelry store and sell your personal automobile for more than $10,000 in cash, you would not submit a Form 8300 for that transaction. 2011 efile Transaction defined. 2011 efile A “transaction” occurs when: Goods, services, or property are sold; Property is rented; Cash is exchanged for other cash; A contribution is made to a trust or escrow account; A loan is made or repaid; or Cash is converted to a negotiable instrument, such as a check or a bond. 2011 efile Person defined. 2011 efile A “person” includes an individual, a company, a corporation, a partnership, an association, a trust, or an estate. 2011 efile Exempt organizations, including employee plans, are also “persons. 2011 efile ” However, exempt organizations do not have to file Form 8300 for a more-than-$10,000 charitable cash contribution they receive since it is not received in the course of a trade or business. 2011 efile Foreign transactions. 2011 efile You do not have to file Form 8300 if the entire transaction (including the receipt of cash) takes place outside of: The 50 states, The District of Columbia, Puerto Rico, or A possession or territory of the United States. 2011 efile However, you must file Form 8300 if any part of the transaction (including the receipt of cash) occurs in Puerto Rico or a possession or territory of the United States and you are subject to the Internal Revenue Code. 2011 efile Bail received by court clerks. 2011 efile Any clerk of a federal or state court who receives more than $10,000 in cash as bail for an individual charged with any of the following criminal offenses must file Form 8300: Any federal offense involving a controlled substance, Racketeering, Money laundering, and Any state offense substantially similar to (1), (2), or (3) above. 2011 efile For more information about the rules that apply to court clerks, see Section 1. 2011 efile 6050I-2 of the Income Tax Regulations. 2011 efile What Payments Must Be Reported? You must file Form 8300 to report cash paid to you if it is: Over $10,000, Received as: One lump sum of over $10,000, Installment payments that cause the total cash received within 1 year of the initial payment to total more than $10,000, or Other previously unreportable payments that cause the total cash received within a 12-month period to total more than $10,000, Received in the course of your trade or business, Received from the same buyer (or agent), and Received in a single transaction or in related transactions (defined later). 2011 efile What Is Cash? Cash is: The coins and currency of the United States (and any other country), and A cashier's check, bank draft, traveler's check, or money order you receive, if it has a face amount of $10,000 or less and you receive it in: A designated reporting transaction (defined later), or Any transaction in which you know the payer is trying to avoid the reporting of the transaction on Form 8300. 2011 efile Cash may include a cashier's check even if it is called a “treasurer's check” or “bank check. 2011 efile ” Cash does not include a check drawn on an individual's personal account. 2011 efile A cashier's check, bank draft, traveler's check, or money order with a face amount of more than $10,000 is not treated as cash. 2011 efile These items are not defined as cash and you do not have to file Form 8300 when you receive them because, if they were bought with currency, the bank or other financial institution that issued them must file a report on FinCEN Form 104. 2011 efile Example 1. 2011 efile You are a coin dealer. 2011 efile Bob Green buys gold coins from you for $13,200. 2011 efile He pays for them with $6,200 in U. 2011 efile S. 2011 efile currency and a cashier's check having a face amount of $7,000. 2011 efile The cashier's check is treated as cash. 2011 efile You have received more than $10,000 cash and must file Form 8300 for this transaction. 2011 efile Example 2. 2011 efile You are a retail jeweler. 2011 efile Mary North buys an item of jewelry from you for $12,000. 2011 efile She pays for it with a personal check payable to you in the amount of $9,600 and traveler's checks totaling $2,400. 2011 efile Because the personal check is not treated as cash, you have not received more than $10,000 cash in the transaction. 2011 efile You do not have to file Form 8300. 2011 efile Example 3. 2011 efile You are a boat dealer. 2011 efile Emily Jones buys a boat from you for $16,500. 2011 efile She pays for it with a cashier's check payable to you in the amount of $16,500. 2011 efile The cashier's check is not treated as cash because its face amount is more than $10,000. 2011 efile You do not have to file Form 8300 for this transaction. 2011 efile Designated Reporting Transaction A designated reporting transaction is the retail sale of any of the following: A consumer durable, such as an automobile or boat. 2011 efile A consumer durable is property, other than land or buildings, that: Is suitable for personal use, Can reasonably be expected to last at least 1 year under ordinary use, Has a sales price of more than $10,000, and Can be seen or touched (tangible property). 2011 efile For example, a $20,000 car is a consumer durable, but a $20,000 dump truck or factory machine is not. 2011 efile The car is a consumer durable even if you sell it to a buyer who will use it in a business. 2011 efile A collectible (for example, a work of art, rug, antique, metal, gem, stamp, or coin). 2011 efile Travel or entertainment, if the total sales price of all items sold for the same trip or entertainment event in one transaction (or related transactions) is more than $10,000. 2011 efile To figure the total sales price of all items sold for a trip or entertainment event, you include the sales price of items such as airfare, hotel rooms, and admission tickets. 2011 efile Example. 2011 efile You are a travel agent. 2011 efile Ed Johnson asks you to charter a passenger airplane to take a group to a sports event in another city. 2011 efile He also asks you to book hotel rooms and admission tickets for the group. 2011 efile In payment, he gives you two money orders, each for $6,000. 2011 efile You have received more than $10,000 cash in this designated reporting transaction. 2011 efile You must file Form 8300. 2011 efile Retail sale. 2011 efile The term “retail sale” means any sale made in the course of a trade or business that consists mainly of making sales to ultimate consumers. 2011 efile Thus, if your business consists mainly of making sales to ultimate consumers, all sales you make in the course of that business are retail sales. 2011 efile This includes any sales of items that will be resold. 2011 efile Broker or intermediary. 2011 efile A designated reporting transaction includes the retail sale of items (1), (2), or (3) of the preceding list, even if the funds are received by a broker or other intermediary, rather than directly by the seller. 2011 efile Exceptions to Definition of Cash A cashier's check, bank draft, traveler's check, or money order you received in a designated reporting transaction is not treated as cash if one of the following exceptions applies. 2011 efile Exception for certain bank loans. 2011 efile A cashier's check, bank draft, traveler's check, or money order is not treated as cash if it is the proceeds from a bank loan. 2011 efile As proof that it is from a bank loan, you may rely on a copy of the loan document, a written statement or lien instruction from the bank, or similar proof. 2011 efile Example. 2011 efile You are a car dealer. 2011 efile Mandy White buys a new car from you for $11,500. 2011 efile She pays you with $2,000 of U. 2011 efile S. 2011 efile currency and a cashier's check for $9,500 payable to you and her. 2011 efile You can tell that the cashier's check is the proceeds of a bank loan because it includes instructions to you to have a lien put on the car as security for the loan. 2011 efile For this reason, the cashier's check is not treated as cash. 2011 efile You do not have to file Form 8300 for the transaction. 2011 efile Exception for certain installment sales. 2011 efile A cashier's check, bank draft, traveler's check, or money order is not treated as cash if it is received in payment on a promissory note or an installment sales contract (including a lease that is considered a sale for federal tax purposes). 2011 efile However, this exception applies only if: You use similar notes or contracts in other sales to ultimate consumers in the ordinary course of your trade or business, and The total payments for the sale that you receive on or before the 60th day after the sale are 50% or less of the purchase price. 2011 efile Exception for certain down payment plans. 2011 efile A cashier's check, bank draft, traveler's check, or money order is not treated as cash if you received it in payment for a consumer durable or collectible, and all three of the following statements are true. 2011 efile You receive it under a payment plan requiring: One or more down payments, and Payment of the rest of the purchase price by the date of sale. 2011 efile You receive it more than 60 days before the date of sale. 2011 efile You use payment plans with the same or substantially similar terms when selling to ultimate consumers in the ordinary course of your trade or business. 2011 efile Exception for travel and entertainment. 2011 efile A cashier's check, bank draft, traveler's check, or money order received for travel or entertainment is not treated as cash if all three of the following statements are true. 2011 efile You receive it under a payment plan requiring: One or more down payments, and Payment of the rest of the purchase price by the earliest date that any travel or entertainment item (such as airfare) is furnished for the trip or entertainment event. 2011 efile You receive it more than 60 days before the date on which the final payment is due. 2011 efile You use payment plans with the same or substantially similar terms when selling to ultimate consumers in the ordinary course of your trade or business. 2011 efile Taxpayer Identification Number (TIN) You must furnish the correct TIN of the person or persons from whom you receive the cash. 2011 efile If the transaction is conducted on the behalf of another person or persons, you must furnish the TIN of that person or persons. 2011 efile If you do not know a person's TIN, you have to ask for it. 2011 efile You may be subject to penalties for an incorrect or missing TIN. 2011 efile There are three types of TINs. 2011 efile The TIN for an individual, including a sole proprietor, is the individual's social security number (SSN). 2011 efile The TIN for a nonresident alien individual who needs a TIN but is not eligible to get an SSN is an IRS individual taxpayer identification number (ITIN). 2011 efile An ITIN has nine digits, similar to an SSN. 2011 efile The TIN for other persons, including corporations, partnerships, and estates, is the employer identification number (EIN). 2011 efile Exception. 2011 efile You are not required to provide the TIN of a person who is a nonresident alien individual or a foreign organization if that person or foreign organization: Does not have income effectively connected with the conduct of a U. 2011 efile S. 2011 efile trade or business; Does not have an office or place of business, or a fiscal or paying agent in the United States; Does not file a federal tax return; Does not furnish a withholding certificate described in §1. 2011 efile 1441-1(e)(2) or (3) or 1. 2011 efile 1441-5(c)(2)(iv) or (3)(iii) to the extent required under 1. 2011 efile 1441-1(e)(4)(vii); Does not have to furnish a TIN on any return, statement, or other document as required by the income tax regulations under section 897 or 1445; or In the case of a nonresident alien individual, the individual has not chosen to file a joint federal income tax return with a spouse who is a U. 2011 efile S. 2011 efile citizen or resident. 2011 efile What Is a Related Transaction? Any transactions between a buyer (or an agent of the buyer) and a seller that occur within a 24-hour period are related transactions. 2011 efile If you receive over $10,000 in cash during two or more transactions with one buyer in a 24-hour period, you must treat the transactions as one transaction and report the payments on Form 8300. 2011 efile For example, if you sell two products for $6,000 each to the same customer in 1 day and the customer pays you in cash, these are related transactions. 2011 efile Because they total $12,000 (more than $10,000), you must file Form 8300. 2011 efile More than 24 hours between transactions. 2011 efile Transactions are related even if they are more than 24 hours apart if you know, or have reason to know, that each is one of a series of connected transactions. 2011 efile For example, you are a travel agent. 2011 efile A client pays you $8,000 in cash for a trip. 2011 efile Two days later, the same client pays you $3,000 more in cash to include another person on the trip. 2011 efile These are related transactions, and you must file Form 8300 to report them. 2011 efile What About Suspicious Transactions? If you receive $10,000 or less in cash, you may voluntarily file Form 8300 if the transaction appears to be suspicious. 2011 efile A transaction is suspicious if it appears that a person is trying to cause you not to file Form 8300 or is trying to cause you to file a false or incomplete Form 8300, or if there is a sign of possible illegal activity. 2011 efile If you are suspicious, you are encouraged to call the local IRS Criminal Investigation Division as soon as possible. 2011 efile Or, you can call the FinCEN Financial Institution Hotline toll free at 1-866-556-3974. 2011 efile When, Where, and What To File The amount you receive and when you receive it determine when you must file. 2011 efile Generally, you must file Form 8300 within 15 days after receiving a payment. 2011 efile If the Form 8300 due date (the 15th or last day you can timely file the form) falls on a Saturday, Sunday, or legal holiday, it is delayed until the next day that is not a Saturday, Sunday, or legal holiday. 2011 efile More than one payment. 2011 efile In some transactions, the buyer may arrange to pay you in cash installment payments. 2011 efile If the first payment is more than $10,000, you must file Form 8300 within 15 days. 2011 efile If the first payment is not more than $10,000, you must add the first payment and any later payments made within 1 year of the first payment. 2011 efile When the total cash payments are more than $10,000, you must file Form 8300 within 15 days. 2011 efile After you file Form 8300, you must start a new count of cash payments received from that buyer. 2011 efile If you receive more than $10,000 in additional cash payments from that buyer within a 12-month period, you must file another Form 8300. 2011 efile You must file the form within 15 days of the payment that causes the additional payments to total more than $10,000. 2011 efile If you are already required to file Form 8300 and you receive additional payments within the 15 days before you must file, you can report all the payments on one form. 2011 efile Example. 2011 efile On January 10, you receive a cash payment of $11,000. 2011 efile You receive additional cash payments on the same transaction of $4,000 on February 15, $5,000 on March 20, and $6,000 on May 12. 2011 efile By January 25, you must file a Form 8300 for the $11,000 payment. 2011 efile By May 27, you must file an additional Form 8300 for the additional payments that total $15,000. 2011 efile Amending a Report? If you are amending a report, check box 1a at the top of Form 8300. 2011 efile Complete the form in its entirety (Parts I-IV) and include the amended information. 2011 efile Do not attach a copy of the original report. 2011 efile Where to file. 2011 efile Mail the form to the address given in the Form 8300 instructions. 2011 efile Required statement to buyer. 2011 efile You must give a written or electronic statement to each person named on any Form 8300 you must file. 2011 efile You can give the statement electronically only if the recipient agrees to receive it in that format. 2011 efile The statement must show the name and address of your business, the name and phone number of a contact person, and the total amount of reportable cash you received from the person during the year. 2011 efile It must state that you are also reporting this information to the IRS. 2011 efile You must send this statement to the buyer by January 31 of the year after the year in which you received the cash that caused you to file the form. 2011 efile You must keep a copy of every Form 8300 you file for 5 years. 2011 efile Examples Example 1. 2011 efile Pat Brown is the sales manager for Small Town Cars. 2011 efile On January 6, 2009, Jane Smith buys a new car from Pat and pays $18,000 in cash. 2011 efile Pat asks for identification from Jane to get the necessary information to complete Form 8300. 2011 efile A filled-in form is shown in this publication. 2011 efile Pat must mail the form to the address shown in the form's instructions by January 21, 2009. 2011 efile He must also send a statement to Jane by January 31, 2010. 2011 efile Example 2. 2011 efile Using the same facts given in Example 1, suppose Jane had arranged to make cash payments of $6,000 each on January 6, February 6, and March 6. 2011 efile Pat would have to file a Form 8300 by February 26 (17 days after receiving total cash payments within 1 year over $10,000 because February 21, 2009, is a Saturday). 2011 efile Pat would not have to report the remaining $6,000 cash payment because it is not more than $10,000. 2011 efile However, he could report it if he felt it was a suspicious transaction. 2011 efile Penalties There are civil penalties for failure to: File a correct Form 8300 by the date it is due, and Provide the required statement to those named in the Form 8300. 2011 efile If you intentionally disregard the requirement to file a correct Form 8300 by the date it is due, the penalty is the greater of: $25,000, or The amount of cash you received and were required to report (up to $100,000). 2011 efile There are criminal penalties for: Willful failure to file Form 8300, Willfully filing a false or fraudulent Form 8300, Stopping or trying to stop Form 8300 from being filed, and Setting up, helping to set up, or trying to set up a transaction in a way that would make it seem unnecessary to file Form 8300. 2011 efile If you willfully fail to file Form 8300, you can be fined up to $250,000 for individuals ($500,000 for corporations) or sentenced to up to 5 years in prison, or both. 2011 efile These dollar amounts are based on Section 3571 of Title 18 of the U. 2011 efile S. 2011 efile Code. 2011 efile The penalties for failure to file may also apply to any person (including a payer) who attempts to interfere with or prevent the seller (or business) from filing a correct Form 8300. 2011 efile This includes any attempt to structure the transaction in a way that would make it seem unnecessary to file Form 8300. 2011 efile Structuring means breaking up a large cash transaction into small cash transactions. 2011 efile How To Get Tax Help You can get help with unresolved tax issues, order free publications and forms, ask tax questions, and get information from the IRS in several ways. 2011 efile By selecting the method that is best for you, you will have quick and easy access to tax help. 2011 efile Free help with your return. 2011 efile Free help in preparing your return is available nationwide from IRS-certified volunteers. 2011 efile The Volunteer Income Tax Assistance (VITA) program is designed to help low-moderate income taxpayers and the Tax Counseling for the Elderly (TCE) program is designed to assist taxpayers age 60 and older with their tax returns. 2011 efile Most VITA and TCE sites offer free electronic filing and all volunteers will let you know about credits and deductions you may be entitled to claim. 2011 efile To find the nearest VITA or TCE site, visit IRS. 2011 efile gov or call 1-800-906-9887 or 1-800-829-1040. 2011 efile As part of the TCE program, AARP offers the Tax-Aide counseling program. 2011 efile To find the nearest AARP Tax-Aide site, call 1-888-227-7669 or visit AARP's website at www. 2011 efile aarp. 2011 efile org/money/taxaide. 2011 efile For more information on these programs, go to IRS. 2011 efile gov and enter keyword “VITA” in the upper right-hand corner. 2011 efile Internet. 2011 efile You can access the IRS website at IRS. 2011 efile gov 24 hours a day, 7 days a week to: Check the status of your 2011 refund. 2011 efile Go to IRS. 2011 efile gov and click on Where's My Refund. 2011 efile Wait at least 72 hours after the IRS acknowledges receipt of your e-filed return, or 3 to 4 weeks after mailing a paper return. 2011 efile If you filed Form 8379 with your return, wait 14 weeks (11 weeks if you filed electronically). 2011 efile Have your 2011 tax return available so you can provide your social security number, your filing status, and the exact whole dollar amount of your refund. 2011 efile E-file your return. 2011 efile Find out about commercial tax preparation and e-file services available free to eligible taxpayers. 2011 efile Download forms, including talking tax forms, instructions, and publications. 2011 efile Order IRS products online. 2011 efile Research your tax questions online. 2011 efile Search publications online by topic or keyword. 2011 efile Use the online Internal Revenue Code, regulations, or other official guidance. 2011 efile View Internal Revenue Bulletins (IRBs) published in the last few years. 2011 efile Figure your withholding allowances using the withholding calculator online at www. 2011 efile irs. 2011 efile gov/individuals. 2011 efile Determine if Form 6251 must be filed by using our Alternative Minimum Tax (AMT) Assistant available online at www. 2011 efile irs. 2011 efile gov/individuals. 2011 efile Sign up to receive local and national tax news by email. 2011 efile Get information on starting and operating a small business. 2011 efile Phone. 2011 efile Many services are available by phone. 2011 efile Ordering forms, instructions, and publications. 2011 efile Call 1-800-TAX-FORM (1-800-829-3676) to order current-year forms, instructions, and publications, and prior-year forms and instructions. 2011 efile You should receive your order within 10 days. 2011 efile Asking tax questions. 2011 efile Call the IRS with your tax questions at 1-800-829-1040. 2011 efile Solving problems. 2011 efile You can get face-to-face help solving tax problems every business day in IRS Taxpayer Assistance Centers. 2011 efile An employee can explain IRS letters, request adjustments to your account, or help you set up a payment plan. 2011 efile Call your local Taxpayer Assistance Center for an appointment. 2011 efile To find the number, go to www. 2011 efile irs. 2011 efile gov/localcontacts or look in the phone book under United States Government, Internal Revenue Service. 2011 efile TTY/TDD equipment. 2011 efile If you have access to TTY/TDD equipment, call 1-800-829-4059 to ask tax questions or to order forms and publications. 2011 efile TeleTax topics. 2011 efile Call 1-800-829-4477 to listen to pre-recorded messages covering various tax topics. 2011 efile Refund information. 2011 efile You can check the status of your refund on the new IRS phone app. 2011 efile Download the free IRS2Go app by visiting the iTunes app store or the Android Marketplace. 2011 efile IRS2Go is a new way to provide you with information and tools. 2011 efile To check the status of your refund by phone, call 1-800-829-4477 (automated refund information 24 hours a day, 7 days a week). 2011 efile Wait at least 72 hours after the IRS acknowledges receipt of your e-filed return, or 3 to 4 weeks after mailing a paper return. 2011 efile If you filed Form 8379 with your return, wait 14 weeks (11 weeks if you filed electronically). 2011 efile Have your 2011 tax return available so you can provide your social security number, your filing status, and the exact whole dollar amount of your refund. 2011 efile If you check the status of your refund and are not given the date it will be issued, please wait until the next week before checking back. 2011 efile Other refund information. 2011 efile To check the status of a prior-year refund or amended return refund, call 1-800-829-1040. 2011 efile Evaluating the quality of our telephone services. 2011 efile To ensure IRS representatives give accurate, courteous, and professional answers, we use several methods to evaluate the quality of our telephone services. 2011 efile One method is for a second IRS representative to listen in on or record random telephone calls. 2011 efile Another is to ask some callers to complete a short survey at the end of the call. 2011 efile Walk-in. 2011 efile Many products and services are available on a walk-in basis. 2011 efile Products. 2011 efile You can walk in to many post offices, libraries, and IRS offices to pick up certain forms, instructions, and publications. 2011 efile Some IRS offices, libraries, grocery stores, copy centers, city and county government offices, credit unions, and office supply stores have a collection of products available to print from a CD or photocopy from reproducible proofs. 2011 efile Also, some IRS offices and libraries have the Internal Revenue Code, regulations, Internal Revenue Bulletins, and Cumulative Bulletins available for research purposes. 2011 efile Services. 2011 efile You can walk in to your local Taxpayer Assistance Center every business day for personal, face-to-face tax help. 2011 efile An employee can explain IRS letters, request adjustments to your tax account, or help you set up a payment plan. 2011 efile If you need to resolve a tax problem, have questions about how the tax law applies to your individual tax return, or you are more comfortable talking with someone in person, visit your local Taxpayer Assistance Center where you can spread out your records and talk with an IRS representative face-to-face. 2011 efile No appointment is necessary—just walk in. 2011 efile If you prefer, you can call your local Center and leave a message requesting an appointment to resolve a tax account issue. 2011 efile A representative will call you back within 2 business days to schedule an in-person appointment at your convenience. 2011 efile If you have an ongoing, complex tax account problem or a special need, such as a disability, an appointment can be requested. 2011 efile All other issues will be handled without an appointment. 2011 efile To find the number of your local office, go to www. 2011 efile irs. 2011 efile gov/localcontacts or look in the phone book under United States Government, Internal Revenue Service. 2011 efile Mail. 2011 efile You can send your order for forms, instructions, and publications to the address below. 2011 efile You should receive a response within 10 days after your request is received. 2011 efile Internal Revenue Service 1201 N. 2011 efile Mitsubishi Motorway Bloomington, IL 61705-6613 Taxpayer Advocate Service. 2011 efile The Taxpayer Advocate Service (TAS) is your voice at the IRS. 2011 efile Our job is to ensure that every taxpayer is treated fairly, and that you know and understand your rights. 2011 efile We offer free help to guide you through the often-confusing process of resolving tax problems that you haven’t been able to solve on your own. 2011 efile Remember, the worst thing you can do is nothing at all. 2011 efile TAS can help if you can’t resolve your problem with the IRS and: Your problem is causing financial difficulties for you, your family, or your business. 2011 efile You face (or your business is facing) an immediate threat of adverse action. 2011 efile You have tried repeatedly to contact the IRS but no one has responded, or the IRS has not responded to you by the date promised. 2011 efile If you qualify for our help, we’ll do everything we can to get your problem resolved. 2011 efile You will be assigned to one advocate who will be with you at every turn. 2011 efile We have offices in every state, the District of Columbia, and Puerto Rico. 2011 efile Although TAS is independent within the IRS, our advocates know how to work with the IRS to get your problems resolved. 2011 efile And our services are always free. 2011 efile As a taxpayer, you have rights that the IRS must abide by in its dealings with you. 2011 efile Our tax toolkit at www. 2011 efile TaxpayerAdvocate. 2011 efile irs. 2011 efile gov can help you understand these rights. 2011 efile If you think TAS might be able to help you, call your local advocate, whose number is in your phone book and on our website at www. 2011 efile irs. 2011 efile gov/advocate. 2011 efile You can also call our toll-free number at 1-877-777-4778. 2011 efile TAS also handles large-scale or systemic problems that affect many taxpayers. 2011 efile If you know of one of these broad issues, please report it to us through our Systemic Advocacy Management System at www. 2011 efile irs. 2011 efile gov/advocate. 2011 efile Low Income Taxpayer Clinics (LITCs). 2011 efile Low Income Taxpayer Clinics (LITCs) are independent from the IRS. 2011 efile Some clinics serve individuals whose income is below a certain level and who need to resolve a tax problem. 2011 efile These clinics provide professional representation before the IRS or in court on audits, appeals, tax collection disputes, and other issues for free or for a small fee. 2011 efile Some clinics can provide information about taxpayer rights and responsibilities in many different languages for individuals who speak English as a second language. 2011 efile For more information and to find a clinic near you, see the LITC page on www. 2011 efile irs. 2011 efile gov/advocate or IRS Publication 4134, Low Income Taxpayer Clinic List. 2011 efile This publication is also available by calling 1-800-829-3676 or at your local IRS office. 2011 efile Free tax services. 2011 efile Publication 910, IRS Guide to Free Tax Services, is your guide to IRS services and resources. 2011 efile Learn about free tax information from the IRS, including publications, services, and education and assistance programs. 2011 efile The publication also has an index of over 100 TeleTax topics (recorded tax information) you can listen to on the telephone. 2011 efile The majority of the information and services listed in this publication are available to you free of charge. 2011 efile If there is a fee associated with a resource or service, it is listed in the publication. 2011 efile Accessible versions of IRS published products are available on request in a variety of alternative formats for people with disabilities. 2011 efile DVD for tax products. 2011 efile You can order Publication 1796, IRS Tax Products DVD, and obtain: Current-year forms, instructions, and publications. 2011 efile Prior-year forms, instructions, and publications. 2011 efile Tax Map: an electronic research tool and finding aid. 2011 efile Tax law frequently asked questions. 2011 efile Tax Topics from the IRS telephone response system. 2011 efile Internal Revenue Code—Title 26 of the U. 2011 efile S. 2011 efile Code. 2011 efile Links to other Internet based Tax Research Materials. 2011 efile Fill-in, print, and save features for most tax forms. 2011 efile Internal Revenue Bulletins. 2011 efile Toll-free and email technical support. 2011 efile Two releases during the year. 2011 efile – The first release will ship the beginning of January. 2011 efile – The final release will ship the beginning of March. 2011 efile Purchase the DVD from National Technical Information Service (NTIS) at www. 2011 efile irs. 2011 efile gov/cdorders for $30 (no handling fee) or call 1-877-233-6767 toll free to buy the DVD for $30 (plus a $6 handling fee). 2011 efile This image is too large to be displayed in the current screen. 2011 efile Please click the link to view the image. 2011 efile Fill-in Form 8300 Prev Up Next Home More Online Publications
Understanding your CP04 Notice
Our records show that you or your spouse served in a combat zone, a qualified contingency operation, or a hazardous duty station during the tax year specified on your notice. As a result, you may be eligible for tax deferment.
What you need to do
- Read your notice carefully — it will explain why we are asking you to send us information about your service.
- Complete section 1 of the Response form included with your notice and mail or fax it to us by the date shown on the notice. Be sure to include the required supporting documentation.
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Answers to Common Questions
What deferments are available to those who serve in a combat zone?
The deadline for filing tax returns, paying taxes, filing claims for refund, and taking other actions with the IRS can be extended 180 days following your departure from a combat zone, contingency operation or hazardous duty station, if you served with the Armed Forces or were a civilian working in support of the Armed Forces.
If you are in the military or naval services on an assigned tour of duty outside the United States and Puerto Rico, serving in a combat zone, contingency operation or hazardous duty station for a period that includes the entire due date of the return, you can receive an automatic extension. Civilians working in these areas in support of the armed forces can qualify also if they provide a copy of their Letter of Authorization.
In addition to the 180 days, your deadline is extended by the number of days that were left for you to take the action with the IRS when you entered a combat zone (or began performing qualifying service outside the combat zone) or began serving in a contingency operation. For example, you had 3½ months (January 1 - April 15, 2010) to file your 2009 tax return. Any days of this 3½ month period that were left when you entered the combat zone (or the entire 3½ months if you entered the combat zone by January 1, 2010) are added to the 180 days when determining the last day allowed for filing your 2009 tax return.
If it's an automatic extension, why do I need to provide the requested information?
We need to update our records and verify that you are eligible to receive the automatic extension. We need the dates that you served or worked in a qualified area so that your account can be updated with the proper extension period.
What if I don't respond to the notice?
If we don't receive your completed Response form by the due date shown on your notice, you may be subject to collection action for any taxes, interest, or penalties that you owe.
Page Last Reviewed or Updated: 19-Feb-2014
The 2011 Efile
2011 efile 4. 2011 efile Reporting Gains and Losses Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: Information Returns Schedule D and Form 8949Long and Short Term Net Gain or Loss Treatment of Capital Losses Capital Gains Tax Rates Form 4797Mark-to-market election. 2011 efile Introduction This chapter explains how to report capital gains and losses and ordinary gains and losses from sales, exchanges, and other dispositions of property. 2011 efile Although this discussion refers to Schedule D (Form 1040) and Form 8949, many of the rules discussed here also apply to taxpayers other than individuals. 2011 efile However, the rules for property held for personal use usually will not apply to taxpayers other than individuals. 2011 efile Topics - This chapter discusses: Information returns Schedule D (Form 1040) Form 4797 Form 8949 Useful Items - You may want to see: Publication 550 Investment Income and Expenses 537 Installment Sales Form (and Instructions) Schedule D (Form 1040) Capital Gains and Losses 1099-B Proceeds From Broker and Barter Exchange Transactions 1099-S Proceeds From Real Estate Transactions 4684 Casualties and Thefts 4797 Sales of Business Property 6252 Installment Sale Income 6781 Gains and Losses from Section 1256 Contracts and Straddles 8824 Like-Kind Exchanges 8949 Sales and Other Dispositions of Capital Assets See chapter 5 for information about getting publications and forms. 2011 efile Information Returns If you sell or exchange certain assets, you should receive an information return showing the proceeds of the sale. 2011 efile This information is also provided to the IRS. 2011 efile Form 1099-B. 2011 efile If you sold property, such as stocks, bonds, or certain commodities, through a broker, you should receive Form 1099-B, Proceeds From Broker and Barter Exchange Transactions, or a substitute statement from the broker. 2011 efile Use the Form 1099-B or a substitute statement to complete Form 8949 and/or Schedule D. 2011 efile Whether or not you receive 1099-B, you must report all taxable sales of stock, bonds, commodities, etc. 2011 efile on Form 8949 and/or Schedule D, as applicable. 2011 efile For more information on figuring gains and losses from these transactions, see chapter 4 in Publication 550. 2011 efile For information on reporting the gains and losses, see the Instructions for Form 8949 and the Instructions for Schedule D (Form 1040). 2011 efile Form 1099-S. 2011 efile An information return must be provided on certain real estate transactions. 2011 efile Generally, the person responsible for closing the transaction (the “real estate reporting person”) must report on Form 1099-S sales or exchanges of the following types of property. 2011 efile Land (improved or unimproved), including air space. 2011 efile An inherently permanent structure, including any residential, commercial, or industrial building. 2011 efile A condominium unit and its related fixtures and common elements (including land). 2011 efile Stock in a cooperative housing corporation. 2011 efile If you sold or exchanged any of the above types of property, the “real estate reporting person” must give you a copy of Form 1099-S or a statement containing the same information as the Form 1099-S. 2011 efile The “real estate reporting person” could include the buyer's attorney, your attorney, the title or escrow company, a mortgage lender, your broker, the buyer's broker, or the person acquiring the biggest interest in the property. 2011 efile For more information see chapter 4 in Publication 550. 2011 efile Also, see the Instructions for Form 8949. 2011 efile Schedule D and Form 8949 Form 8949. 2011 efile Individuals, corporations, and partnerships, use Form 8949 to report the following. 2011 efile Sales or exchanges of capital assets, including stocks, bonds, etc. 2011 efile , and real estate (if not reported on another form or schedule such as Form 4684, 4797, 6252, 6781, or 8824). 2011 efile Include these transactions even if you did not receive a Form 1099-B or 1099-S. 2011 efile Gains from involuntary conversions (other than from casualty or theft) of capital assets not held for business or profit. 2011 efile Nonbusiness bad debts. 2011 efile Individuals, If you are filing a joint return, complete as many copies of Form 8949 as you need to report all of your and your spouse's transactions. 2011 efile You and your spouse may list your transactions on separate forms or you may combine them. 2011 efile However, you must include on your Schedule D the totals from all Forms 8949 for both you and your spouse. 2011 efile Corporations and electing large partnerships also use Form 8949 to report their share of gain or loss from a partnership, S Corporation, estate or trust. 2011 efile Business entities meeting certain criteria, may have an exception to some of the normal requirements for completing Form 8949. 2011 efile See the Instructions for Form 8949. 2011 efile Schedule D. 2011 efile Use Schedule D (Form 1040) to figure the overall gain or loss from transactions reported on Form 8949, and to report certain transactions you do not have to report on Form 8949. 2011 efile Before completing Schedule D, you may have to complete other forms as shown below. 2011 efile Complete all applicable lines of Form 8949 before completing lines 1b, 2, 3, 8b, 9, or 10 of your applicable Schedule D. 2011 efile Enter on Schedule D the combined totals from all your Forms 8949. 2011 efile For a sale, exchange, or involuntary conversion of business property, complete Form 4797 (discussed later). 2011 efile For a like-kind exchange, complete Form 8824. 2011 efile See Reporting the exchange under Like-Kind Exchanges in chapter 1. 2011 efile For an installment sale, complete Form 6252. 2011 efile See Publication 537. 2011 efile For an involuntary conversion due to casualty or theft, complete Form 4684. 2011 efile See Publication 547, Casualties, Disasters, and Thefts. 2011 efile For a disposition of an interest in, or property used in, an activity to which the at-risk rules apply, complete Form 6198, At-Risk Limitations. 2011 efile See Publication 925, Passive Activity and At-Risk Rules. 2011 efile For a disposition of an interest in, or property used in, a passive activity, complete Form 8582, Passive Activity Loss Limitations. 2011 efile See Publication 925. 2011 efile For gains and losses from section 1256 contracts and straddles, complete Form 6781. 2011 efile See Publication 550. 2011 efile Personal-use property. 2011 efile Report gain on the sale or exchange of property held for personal use (such as your home) on Form 8949 and Schedule D (Form 1040), as applicable. 2011 efile Loss from the sale or exchange of property held for personal use is not deductible. 2011 efile But if you had a loss from the sale or exchange of real estate held for personal use for which you received a Form 1099-S, report the transaction on Form 8949 and Schedule D, even though the loss is not deductible. 2011 efile See the Instructions for Schedule D (Form 1040) and the Instructions for Form 8949 for information on how to report the transaction. 2011 efile Long and Short Term Where you report a capital gain or loss depends on how long you own the asset before you sell or exchange it. 2011 efile The time you own an asset before disposing of it is the holding period. 2011 efile If you received a Form 1099-B, (or substitute statement) box 1c may help you determine whether the gain or loss is short-term or long-term. 2011 efile If you hold a capital asset 1 year or less, the gain or loss from its disposition is short term. 2011 efile Report it in Part I of Form 8949 and/or Schedule D, as applicable. 2011 efile If you hold a capital asset longer than 1 year, the gain or loss from its disposition is long term. 2011 efile Report it in Part II of Form 8949 and/or Schedule D, as applicable. 2011 efile Table 4-1. 2011 efile Do I Have a Short-Term or Long-Term Gain or Loss? IF you hold the property. 2011 efile . 2011 efile . 2011 efile THEN you have a. 2011 efile . 2011 efile . 2011 efile 1 year or less, Short-term capital gain or loss. 2011 efile More than 1 year, Long-term capital gain or loss. 2011 efile These distinctions are essential to correctly arrive at your net capital gain or loss. 2011 efile Capital losses are allowed in full against capital gains plus up to $3,000 of ordinary income. 2011 efile See Capital Gains Tax Rates, later. 2011 efile Holding period. 2011 efile To figure if you held property longer than 1 year, start counting on the day following the day you acquired the property. 2011 efile The day you disposed of the property is part of your holding period. 2011 efile Example. 2011 efile If you bought an asset on June 19, 2012, you should start counting on June 20, 2012. 2011 efile If you sold the asset on June 19, 2013, your holding period is not longer than 1 year, but if you sold it on June 20, 2013, your holding period is longer than 1 year. 2011 efile Patent property. 2011 efile If you dispose of patent property, you generally are considered to have held the property longer than 1 year, no matter how long you actually held it. 2011 efile For more information, see Patents in chapter 2. 2011 efile Inherited property. 2011 efile If you inherit property, you are considered to have held the property longer than 1 year, regardless of how long you actually held it. 2011 efile Installment sale. 2011 efile The gain from an installment sale of an asset qualifying for long-term capital gain treatment in the year of sale continues to be long term in later tax years. 2011 efile If it is short term in the year of sale, it continues to be short term when payments are received in later tax years. 2011 efile The date the installment payment is received determines the capital gains rate that should be applied not the date the asset was sold under an installment contract. 2011 efile Nontaxable exchange. 2011 efile If you acquire an asset in exchange for another asset and your basis for the new asset is figured, in whole or in part, by using your basis in the old property, the holding period of the new property includes the holding period of the old property. 2011 efile That is, it begins on the same day as your holding period for the old property. 2011 efile Example. 2011 efile You bought machinery on December 4, 2012. 2011 efile On June 4, 2013, you traded this machinery for other machinery in a nontaxable exchange. 2011 efile On December 5, 2013, you sold the machinery you got in the exchange. 2011 efile Your holding period for this machinery began on December 5, 2012. 2011 efile Therefore, you held it longer than 1 year. 2011 efile Corporate liquidation. 2011 efile The holding period for property you receive in a liquidation generally starts on the day after you receive it if gain or loss is recognized. 2011 efile Profit-sharing plan. 2011 efile The holding period of common stock withdrawn from a qualified contributory profit-sharing plan begins on the day following the day the plan trustee delivered the stock to the transfer agent with instructions to reissue the stock in your name. 2011 efile Gift. 2011 efile If you receive a gift of property and your basis in it is figured using the donor's basis, your holding period includes the donor's holding period. 2011 efile For more information on basis, see Publication 551, Basis of Assets. 2011 efile Real property. 2011 efile To figure how long you held real property, start counting on the day after you received title to it or, if earlier, the day after you took possession of it and assumed the burdens and privileges of ownership. 2011 efile However, taking possession of real property under an option agreement is not enough to start the holding period. 2011 efile The holding period cannot start until there is an actual contract of sale. 2011 efile The holding period of the seller cannot end before that time. 2011 efile Repossession. 2011 efile If you sell real property but keep a security interest in it and then later repossess it, your holding period for a later sale includes the period you held the property before the original sale, as well as the period after the repossession. 2011 efile Your holding period does not include the time between the original sale and the repossession. 2011 efile That is, it does not include the period during which the first buyer held the property. 2011 efile Nonbusiness bad debts. 2011 efile Nonbusiness bad debts are short-term capital losses. 2011 efile For information on nonbusiness bad debts, see chapter 4 of Publication 550. 2011 efile Net Gain or Loss The totals for short-term capital gains and losses and the totals for long-term capital gains and losses must be figured separately. 2011 efile Net short-term capital gain or loss. 2011 efile Combine your short-term capital gains and losses, including your share of short-term capital gains or losses from partnerships, S corporations, and fiduciaries and any short-term capital loss carryover. 2011 efile Do this by adding all your short-term capital gains. 2011 efile Then add all your short-term capital losses. 2011 efile Subtract the lesser total from the other. 2011 efile The result is your net short-term capital gain or loss. 2011 efile Net long-term capital gain or loss. 2011 efile Follow the same steps to combine your long-term capital gains and losses. 2011 efile Include the following items. 2011 efile Net section 1231 gain from Part I, Form 4797, after any adjustment for nonrecaptured section 1231 losses from prior tax years. 2011 efile Capital gain distributions from regulated investment companies (mutual funds) and real estate investment trusts. 2011 efile Your share of long-term capital gains or losses from partnerships, S corporations, and fiduciaries. 2011 efile Any long-term capital loss carryover. 2011 efile The result from combining these items with other long-term capital gains and losses is your net long-term capital gain or loss. 2011 efile Net gain. 2011 efile If the total of your capital gains is more than the total of your capital losses, the difference is taxable. 2011 efile Different tax rates may apply to the part that is a net capital gain. 2011 efile See Capital Gains Tax Rates, later. 2011 efile Net loss. 2011 efile If the total of your capital losses is more than the total of your capital gains, the difference is deductible. 2011 efile But there are limits on how much loss you can deduct and when you can deduct it. 2011 efile See Treatment of Capital Losses, next. 2011 efile Treatment of Capital Losses If your capital losses are more than your capital gains, you can deduct the difference as a capital loss deduction even if you do not have ordinary income to offset it. 2011 efile The yearly limit on the amount of the capital loss you can deduct is $3,000 ($1,500 if you are married and file a separate return). 2011 efile Table 4-2. 2011 efile Holding Period for Different Types of Acquisitions Type of acquisition: When your holding period starts: Stocks and bonds bought on a securities market Day after trading date you bought security. 2011 efile Ends on trading date you sold security. 2011 efile U. 2011 efile S. 2011 efile Treasury notes and bonds If bought at auction, day after notification of bid acceptance. 2011 efile If bought through subscription, day after subscription was submitted. 2011 efile Nontaxable exchanges Day after date you acquired old property. 2011 efile Gift If your basis is giver's adjusted basis, same day as giver's holding period began. 2011 efile If your basis is FMV, day after date of gift. 2011 efile Real property bought Generally, day after date you received title to the property. 2011 efile Real property repossessed Day after date you originally received title to the property, but does not include time between the original sale and date of repossession. 2011 efile Capital loss carryover. 2011 efile Generally, you have a capital loss carryover if either of the following situations applies to you. 2011 efile Your net loss is more than the yearly limit. 2011 efile Your taxable income without your deduction for exemptions is less than zero. 2011 efile If either of these situations applies to you for 2013, see Capital Losses under Reporting Capital Gains and Losses in chapter 4 of Publication 550 to figure the amount you can carryover to 2014. 2011 efile Example. 2011 efile Bob and Gloria Sampson sold property in 2013. 2011 efile The sale resulted in a capital loss of $7,000. 2011 efile The Sampsons had no other capital transactions. 2011 efile On their joint 2013 return, the Sampsons deduct $3,000, the yearly limit. 2011 efile They had taxable income of $2,000. 2011 efile The unused part of the loss, $4,000 ($7,000 − $3,000), is carried over to 2014. 2011 efile If the Sampsons' capital loss had been $2,000, it would not have been more than the yearly limit. 2011 efile Their capital loss deduction would have been $2,000. 2011 efile They would have no carryover to 2014. 2011 efile Short-term and long-term losses. 2011 efile When you carry over a loss, it retains its original character as either long term or short term. 2011 efile A short-term loss you carry over to the next tax year is added to short-term losses occurring in that year. 2011 efile A long-term loss you carry over to the next tax year is added to long-term losses occurring in that year. 2011 efile A long-term capital loss you carry over to the next year reduces that year's long-term gains before its short-term gains. 2011 efile If you have both short-term and long-term losses, your short-term losses are used first against your allowable capital loss deduction. 2011 efile If, after using your short-term losses, you have not reached the limit on the capital loss deduction, use your long-term losses until you reach the limit. 2011 efile To figure your capital loss carryover from 2013 to 2014 use the Capital Loss Carryover Worksheet in the 2013 Instructions for Schedule D (Form 1040). 2011 efile Joint and separate returns. 2011 efile On a joint return, the capital gains and losses of spouses are figured as the gains and losses of an individual. 2011 efile If you are married and filing a separate return, your yearly capital loss deduction is limited to $1,500. 2011 efile Neither you nor your spouse can deduct any part of the other's loss. 2011 efile If you and your spouse once filed separate returns and are now filing a joint return, combine your separate capital loss carryovers. 2011 efile However, if you and your spouse once filed jointly and are now filing separately, any capital loss carryover from the joint return can be deducted only on the return of the spouse who actually had the loss. 2011 efile Death of taxpayer. 2011 efile Capital losses cannot be carried over after a taxpayer's death. 2011 efile They are deductible only on the final income tax return filed on the decedent's behalf. 2011 efile The yearly limit discussed earlier still applies in this situation. 2011 efile Even if the loss is greater than the limit, the decedent's estate cannot deduct the difference or carry it over to following years. 2011 efile Corporations. 2011 efile A corporation can deduct capital losses only up to the amount of its capital gains. 2011 efile In other words, if a corporation has a net capital loss, it cannot be deducted in the current tax year. 2011 efile It must be carried to other tax years and deducted from capital gains occurring in those years. 2011 efile For more information, see Publication 542. 2011 efile Capital Gains Tax Rates The tax rates that apply to a net capital gain are generally lower than the tax rates that apply to other income. 2011 efile These lower rates are called the maximum capital gains rates. 2011 efile The term “net capital gain” means the amount by which your net long-term capital gain for the year is more than your net short-term capital loss. 2011 efile For 2013, the maximum tax rates for individuals are 0%, 15%, 20%, 25%, and 28%. 2011 efile Also, individuals, use the Qualified Dividends and Capital Gain Worksheet in the Instructions for Form 1040, or the Schedule D Tax Computation Worksheet in the Instructions for Schedule D (Form 1040) (whichever applies) to figure your tax if you have qualified dividends or net capital gain. 2011 efile For more information, see chapter 4 of Publication 550. 2011 efile Also see the Instructions for Schedule D (Form 1040). 2011 efile Unrecaptured section 1250 gain. 2011 efile Generally, this is the part of any long-term capital gain on section 1250 property (real property) that is due to depreciation. 2011 efile Unrecaptured section 1250 gain cannot be more than the net section 1231 gain or include any gain otherwise treated as ordinary income. 2011 efile Use the worksheet in the Schedule D instructions to figure your unrecaptured section 1250 gain. 2011 efile For more information about section 1250 property and net section 1231 gain, see chapter 3. 2011 efile Form 4797 Use Form 4797 to report: The sale or exchange of: Property used in your trade or business; Depreciable and amortizable property; Oil, gas, geothermal, or other mineral properties; and Section 126 property. 2011 efile The involuntary conversion (from other than casualty or theft) of property used in your trade or business and capital assets held in connection with a trade or business or a transaction entered into for profit. 2011 efile The disposition of noncapital assets (other than inventory or property held primarily for sale to customers in the ordinary course of your trade or business). 2011 efile The disposition of capital assets not reported on Schedule D. 2011 efile The gain or loss (including any related recapture) for partners and S corporation shareholders from certain section 179 property dispositions by partnerships (other than electing large partnerships) and S corporations. 2011 efile The computation of recapture amounts under sections 179 and 280F(b)(2) when the business use of section 179 or listed property decreases to 50% or less. 2011 efile Gains or losses treated as ordinary gains or losses, if you are a trader in securities or commodities and made a mark-to-market election under Internal Revenue Code section 475(f). 2011 efile You can use Form 4797 with Form 1040, 1065, 1120, or 1120S. 2011 efile Section 1231 gains and losses. 2011 efile Show any section 1231 gains and losses in Part I. 2011 efile Carry a net gain to Schedule D (Form 1040) as a long-term capital gain. 2011 efile Carry a net loss to Part II of Form 4797 as an ordinary loss. 2011 efile If you had any nonrecaptured net section 1231 losses from the preceding 5 tax years, reduce your net gain by those losses and report the amount of the reduction as an ordinary gain in Part II. 2011 efile Report any remaining gain on Schedule D (Form 1040). 2011 efile See Section 1231 Gains and Losses in chapter 3. 2011 efile Ordinary gains and losses. 2011 efile Show any ordinary gains and losses in Part II. 2011 efile This includes a net loss or a recapture of losses from prior years figured in Part I of Form 4797. 2011 efile It also includes ordinary gain figured in Part III. 2011 efile Mark-to-market election. 2011 efile If you made a mark-to-market election, you should report all gains and losses from trading as ordinary gains and losses in Part II of Form 4797, instead of as capital gains and losses on Form 8949 and Schedule D (Form 1040). 2011 efile See the Instructions for Form 4797. 2011 efile Also see Special Rules for Traders in Securities, in chapter 4 of Publication 550. 2011 efile Ordinary income from depreciation. 2011 efile Figure the ordinary income from depreciation on personal property and additional depreciation on real property (as discussed in chapter 3) in Part III. 2011 efile Carry the ordinary income to Part II of Form 4797 as an ordinary gain. 2011 efile Carry any remaining gain to Part I as section 1231 gain, unless it is from a casualty or theft. 2011 efile Carry any remaining gain from a casualty or theft to Form 4684. 2011 efile Prev Up Next Home More Online Publications