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2011 Tax Returns

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2011 Tax Returns

2011 tax returns Index A Acquisition indebtedness, Average acquisition indebtedness. 2011 tax returns Annuity obligations, Annuity obligation. 2011 tax returns By gift or bequest of mortgaged property, Exception for property acquired by gift, bequest, or devise. 2011 tax returns Change in property use, Change in use of property. 2011 tax returns Continued debt, Continued debt. 2011 tax returns Debt modifying existing, Modifying existing debt. 2011 tax returns Federal financing, Certain federal financing. 2011 tax returns For performing exempt purpose, Debt incurred in performing exempt purpose. 2011 tax returns Obligation to return collateral, Securities loans. 2011 tax returns Property subject to mortgage or lien, Property acquired subject to mortgage or lien. 2011 tax returns Real property, Real property debts of qualified organizations. 2011 tax returns Advertising income, Exploitation of Exempt Activity—Advertising Sales Agricultural organization dues, Dues of Agricultural Organizations and Business Leagues Assistance (see Tax help) B Business league dues, Dues of Agricultural Organizations and Business Leagues C Churches, Churches. 2011 tax returns Contributions deduction, Charitable contributions deduction. 2011 tax returns Convention or trade show activity, Convention or trade show activity. 2011 tax returns D Debt-financed property, Income From Debt-Financed Property Acquired in liquidation, Basis for debt-financed property acquired in corporate liquidation. 2011 tax returns Dues, agricultural organizations and business leagues, Dues of Agricultural Organizations and Business Leagues E Exchange or rental of member lists, Exchange or rental of member lists. 2011 tax returns Excluded trade or business activities, Excluded Trade or Business Activities Exclusions, Volunteer workforce. 2011 tax returns Sponsorship, Qualified sponsorship activities. 2011 tax returns Exempt function income, Exempt function income. 2011 tax returns Exploitation of exempt activity Advertising income, Exploitation of Exempt Activity—Advertising Sales Exploitation of exempt functions, Exploitation of exempt functions. 2011 tax returns F Form 990-T, Returns and Filing Requirements Free tax services, How to Get Tax Help H Help (see Tax help) I Income from research, Income from research. 2011 tax returns L Limits, Limits. 2011 tax returns M More information (see Tax help) N Net operating loss deduction, Modifications Nonrecognition of gain, Nonrecognition of gain. 2011 tax returns P Publications (see Tax help) R Rents, Rents. 2011 tax returns Return, Returns and Filing Requirements Royalties, Royalties. 2011 tax returns S Specific deduction, Specific deduction. 2011 tax returns T Tax, Organizations Subject to the Tax Alternative minimum, Alternative minimum tax. 2011 tax returns Colleges and universities, Colleges and universities. 2011 tax returns Deposits, Federal Tax Deposits Must be Made by Electronic Funds Transfer Estimated, Payment of Tax Organizations affected, Organizations Subject to the Tax Payment, Public Inspection Requirements of Section 501(c)(3) Organizations. 2011 tax returns Rates, The Tax and Filing Requirements Return, Returns and Filing Requirements Title-holding corporations, Title-holding corporations. 2011 tax returns U. 2011 tax returns S. 2011 tax returns instrumentalities, U. 2011 tax returns S. 2011 tax returns instrumentalities. 2011 tax returns Tax help, How to Get Tax Help Taxpayer Advocate, Contacting your Taxpayer Advocate. 2011 tax returns Title-holding corporations, Title-holding corporations. 2011 tax returns TTY/TDD information, How to Get Tax Help U Unrelated business Hospital laboratory, Nonpatient laboratory testing. 2011 tax returns Unrelated business income, Unrelated Business Taxable Income, Income Advertising income, Exploitation of Exempt Activity—Advertising Sales Certain trusts, Special Rules for Social Clubs, VEBAs, SUBs, and GLSOs Controlled organizations, Income From Controlled Organizations Debt-financed property, Income From Debt-Financed Property Deductions, Deductions Employees beneficiary associations, Special Rules for Social Clubs, VEBAs, SUBs, and GLSOs Exclusions, Exclusions Foreign organizations, Special Rules for Foreign Organizations Income from gambling activities, Legal definition. 2011 tax returns Income from lending securities, Income from lending securities. 2011 tax returns Modifications, Modifications Partnership income or loss, Partnership Income or Loss Products of exempt functions, Selling of products of exempt functions. 2011 tax returns S corporation income, S Corporation Income or Loss S corporation income or loss, S Corporation Income or Loss Social clubs, Special Rules for Social Clubs, VEBAs, SUBs, and GLSOs Veterans organizations, Special Rules for Veterans' Organizations Unrelated debt-financed income, Certain federal financing. 2011 tax returns Average acquisition indebtedness, Average acquisition indebtedness. 2011 tax returns Average adjusted basis, Average adjusted basis. 2011 tax returns Computation, Computation of Debt-Financed Income Debt/basis percentage, Computation of debt/basis percentage. 2011 tax returns Deductions, Deductions for Debt-Financed Property Gains from dispositions, Gain or loss from sale or other disposition of property. 2011 tax returns Indeterminate property price, Indeterminate price. 2011 tax returns Unrelated trade or business, Unrelated Trade or Business Artists facilities, Artists' facilities. 2011 tax returns Book publishing, Book publishing. 2011 tax returns Broadcasting rights, Broadcasting rights. 2011 tax returns Business league's parking and bus services, Business league's parking and bus services. 2011 tax returns Convenience of members, Convenience of members. 2011 tax returns Convention or trade show, Convention or trade show activity. 2011 tax returns Directory of members, Directory of members. 2011 tax returns Distribution of low cost articles, Distribution of low cost articles. 2011 tax returns Dual use facilities, etc. 2011 tax returns , Dual use of assets or facilities. 2011 tax returns Employees association sales, Employee association sales. 2011 tax returns Exclusions, Excluded Trade or Business Activities Exploitation of exempt functions, Exploitation of exempt functions. 2011 tax returns Gambling activities other than bingo, Gambling activities other than bingo. 2011 tax returns Halfway house, Halfway house workshop. 2011 tax returns Health club program, Health club program. 2011 tax returns Hearing aid sales, Sales of hearing aids. 2011 tax returns Hospital facilities, Hospital facilities. 2011 tax returns Hospital services, Hospital services. 2011 tax returns Insurance programs, Insurance programs. 2011 tax returns Magazine publishing, Magazine publishing. 2011 tax returns Member lists rentals, etc. 2011 tax returns , Exchange or rental of member lists. 2011 tax returns Membership list sales, Membership list sales. 2011 tax returns Miniature golf course, Miniature golf course. 2011 tax returns Museum eating facilities, Museum eating facilities. 2011 tax returns Museum greeting card sales, Museum greeting card sales. 2011 tax returns Pet boarding and grooming services, Pet boarding and grooming services. 2011 tax returns Pole rentals, Pole rentals. 2011 tax returns Public entertainment activity, Public entertainment activity. 2011 tax returns Publishing legal notices, Publishing legal notices. 2011 tax returns Regularly conducted, Regularly conducted. 2011 tax returns Sales commissions, Sales commissions. 2011 tax returns Sales of advertising space, Sales of advertising space. 2011 tax returns School facilities, School facilities. 2011 tax returns School handicraft shop, School handicraft shop. 2011 tax returns Selling donated merchandise, Selling donated merchandise. 2011 tax returns Selling endorsements, Selling endorsements. 2011 tax returns Sponsoring entertainment events, Sponsoring entertainment events. 2011 tax returns Substantially related, Not substantially related. 2011 tax returns Trade or business defined, Trade or business. 2011 tax returns Travel tour programs, Travel tour programs. 2011 tax returns Volunteer workforce, Volunteer workforce. 2011 tax returns Yearbook advertising, Yearbook advertising. 2011 tax returns Youth residence, Youth residence. 2011 tax returns Unstated trade or business Bingo games, Bingo games. 2011 tax returns V Volunteer fire company, Excluded Trade or Business Activities W When to file, When to file. 2011 tax returns Prev  Up     Home   More Online Publications
 
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General FAQs on Payment Card and Third Party Network Transactions

I received Form 1099-K. How do I report it on my tax return?

Separate reporting of these transactions is not required. However, you should follow the return instructions on the form you are completing to report your gross receipts or sales. You should report items that qualify as a trade or business expense on the appropriate line item of Schedules C, E and F.

What is a participating payee?

A participating payee is:

  • Any person who accepts a payment card as payment, or
  • Any person who accepts payment made by a third party settlement organization on behalf of the purchaser or customer.

Why is this reporting necessary?

This reporting is required by law. Third party information reporting has been shown to increase voluntary tax compliance and improve collections and assessments within IRS.

How are reportable transactions to be reported to IRS?

Gross payment card and third party network transaction amounts are reported on the Form 1099-K, Payment Card and Third Party Network Transactions.

What information must be reported on the Form 1099-K?

The gross amount of reportable payment transactions for the calendar year and its corresponding months are required to be reported for each payee. The reporting of both annual and monthly amounts is necessary to resolve differences between information returns and tax returns of fiscal year filers. The name, address and taxpayer identification number of each participating payee must also be included on the form.

When are Forms 1099-K due?

Information reporting for payment card and third party network transactions is due to the IRS on the last day of February of the year following the transactions. If filing electronically, it is due the first day of April of the year following the transactions.

May Forms 1099-K be filed electronically?

Yes. Those required to file may do so through the FIRE (Filing Information Returns Electronically) system. If a payment settlement entity has more than 250 individual information returns to file in any calendar year, they all must be submitted electronically. Existing users may log into FIRE. New users may create an account and test their file before submitting.

For more information, review Publication 1220, Specifications for Filing Forms 1097, 1098, 1099, 3921, 3922, 5498, 8935, and W-2G Electronically. If you are considering filing on paper, review General Instructions for Certain Information Returns.

What are payee statements and when are they due?

Every payment settlement entity required to file a Form 1099-K must also furnish to each participating payee a written statement with the same information reported to the IRS. The statements must be furnished to the payee by January 31 of the year following the transactions.

May payee statements be furnished to participating payees electronically?

Yes. With the participating payee’s prior consent, payee statements may be provided electronically. This consent may be granted electronically. (See Treasury regulations section 1.6050W-2 for instructions for receiving consent from payees.) If a payee statement is furnished electronically, an email address for the reporting entity may be provided in lieu of a phone number.

Is there a de minimis exception for Forms 1099-K by third party settlement organizations?  

There is a “de minimis” exception from reporting for a third party settlement organization with respect to third party network transactions. If payments to a participating payee exceed $20,000 and exceed 200 transactions within the calendar year they must file for that participating payee.

Does the de minimis exception described above apply to payment card transactions?

No. The “de minimis” exception does not apply to payment card transactions settled by merchant acquiring entities.

What constitutes the "gross amount" of reportable transactions?

The "gross amount" of reportable transactions means the total unadjusted dollar amount of aggregate payment transactions for each participating payee.  

Are foreign payment settlement entities subject to the reporting requirements?

Yes. The statute and regulations establish that a "payment settlement entity" may be a domestic or foreign entity.

Are payment settlement entities required to report the transactions of governmental units, whether state or federal?

Yes. The term "participating payees" includes any governmental unit.

What is payment card and third party network reporting?

Under section 6050W of the Internal Revenue Code, payment settlement entities (merchant acquiring entities and third party settlement organizations) must report payment card and third party network transactions. This reporting requirement began in early 2012 for payment card and third party network transactions that occurred in 2011.

Are purchases made with stored-value cards or gift cards reportable transactions?

It depends.

  • Purchases are not reportable when the card is accepted as payment by the issuer or someone who is related to the issuer of the card (such as a subsidiary company or the company itself). Under these circumstances, the stored-value cards do not fit the definition of a "payment card" and purchases made with such cards are therefore not reportable. 
  • Purchases are reportable when the stored-value card is accepted by a network of persons unrelated to the issuer and each other.

For the definition of unrelated person see section 267(b) of the Internal Revenue Code, including the application of section 267(b) and (e)(3), or section 707(b)(1).

If transactions are already reportable on other information returns, must they be reported again by payment settlement entities?

No. If a transaction is reportable by a PSE both under section 6041 or section 6041 A(a) and under section 6050W, the transaction must be reported on a Form 1099-K and not a Form 1099-MISC.

If a worker at a trade or business is an independent contractor, and the independent contractor swipes payment cards on behalf of the trade or business in the normal course of business (in other words, the trade or business, not the independent contractor, receives the proceeds), should the trade or business report payments to the worker on Form 1099-K or Form 1099-MISC?

In this situation, the trade or business should continue to report payments made to independent contractors on Form 1099-MISC as they have done in the past. However, the business will receive a Form 1099-K for these payment card transactions from the payment settlement entity.

How can payee TINs be verified?

Verification of payee TINs is done through the Taxpayer Identification Number (TIN) Matching Program.   

For further information please visit General Instructions for Certain Information Returns - Introductory Material or call 1-866-255-0654.

Can the entity responsible for filing Form 1099-K contract with a third party to prepare and file these returns?

Yes. However, the entity responsible for filing (i.e., the entity that submits the instructions to transfer funds) is liable for any applicable penalties under sections 6721 and 6722 if the reporting requirements are not met. In addition, the name, address and Taxpayer Identification Number of the entity responsible for filing must be reported on the Form 1099-K in the box for the filer's information.

What is Form 1099-K?

The Form 1099-K, Payment Card and Third Party Network Transactions, is an information return that reports the gross amount of reportable transactions for the calendar year to the IRS.

If you receive a Form 1099-K, you should retain it for your records and may use it to assist you in completing your tax returns.

I filed Form 1099-K last year. What changes will I see on my 2013 Form 1099-K?

IRS modified calendar year 2013 Form 1099-K to improve compliance effectiveness. These changes include:

  • Box 3 (Number of payment transactions) is no longer optional for calendar year 2013 and should reflect the number of purchase transactions (not including refund transactions) processed through the payment card or the third party network.
  • Box 4 (Federal income tax withheld) was added to reflect amounts that may have been withheld by the payer, such as backup withholding. The recipient of the Form 1099-K should include this amount on their income tax return as tax withheld.
  • Boxes 6, 7 & 8 were added to be consistent with other information returns and reflect the State, State ID Number and State Income Tax Withheld, respectively.

What are payment settlement entities?

A payment settlement entity is an entity that makes payment in settlement of a payment card transaction or third party network transaction. Payment Settlement Entities are often referred to as “PSEs” and can take one of two forms:

  • Merchant Acquiring Entity: A bank or other organization that has the contractual obligation to make payment to participating payees in settlement of payment card transactions
  • Third Party Settlement Organization: The central organization that has the contractual obligation to make payment to participating payees of third party network transactions

If I use a payment card (or a third party settlement organization) to pay for a purchase, do these payment card reporting rules affect me and will I receive a Form 1099-K?

No. Individuals will not receive a Form 1099-K for making a purchase. These provisions affect only businesses or entities that accept payment cards or use third party network settlement organizations for payment of goods or services.

Do payment settlement entities adjust the "gross amount" to account for fees, refunds, charge-backs or other costs and refunded amounts?

No. The "gross amount" is the total unadjusted dollar amount of the payment transactions for a participating payee. This amount is not to be adjusted to account for any fees, refunds, or any other amounts.

What do I do with the information on Form 1099-K?

The Form 1099-K is an information return. Use this information return in conjunction with your other tax records to determine your correct tax. To get further information on record keeping, check out Publication 552, for individuals or Publication 583, Starting a Business and Keeping Record.  

How will IRS use the data?

The IRS will use the data from the Form 1099-K to develop:

  • Taxpayer education and outreach products and services.
  • New examination and collection approaches.    

What do I do if I think my Form 1099-K is incorrect?

If you believe the information on a Form 1099-K is incorrect, the form has been issued in error, or you have a question relating to the form, contact the filer, whose name appears in the upper left corner on the front of the form.

Or you may contact the payer, or PSE, whose name and phone number are shown in the lower left corner of the form. If you cannot get this form corrected, you may attach an explanation to your tax return and report your income correctly.

To get the further information on Information Returns, check out the General Instructions for Certain Information Returns.

Where can I call if I have a question on the Form 1099-K?

Payors who have questions about the Form 1099-K itself, may call the IRS at 1-866-455-7438. Payees who have questions about the information on a Form 1099-K they have received should contact the filer, whose name appears in the upper left corner on the form.  

I own a small business and also have a not-for-profit hobby. I do not accept payment cards for payment for either, but I do use a credit card and third party settlement organization to make purchases for both. Do the payment card reporting rules affect me?

No. The provisions for payment settlement entity reporting affect only those businesses or entities that accept these forms of payment for goods or services.

Since you do not accept these forms of payments, you will not receive a Form 1099-K for your sales.

Additionally, you will not receive a Form 1099-K for your purchases. Individuals and businesses only receive Form 1099-K for receiving payment for goods and services in reportable transactions.

I occasionally sell items on an Internet auction site and accept payment cards. How do the payment settlement entity reporting rules affect me?

If you accept payment cards as a form of payment, you will receive a Form 1099-K for the gross amount of proceeds for the goods or services purchased from you through the use of a payment card in a calendar year. Further, if you accept payments from a third party settlement organization, you should receive a Form 1099-K from that organization only if:

  • The total number of your transactions exceeds 200 

AND 

  • The aggregate value exceeds $20,000 in a calendar year.

If I have a holiday craft business and accept payment cards for payments, how do the payment settlement entity reporting rules affect me?

If you are set up to accept payment cards as a form of payment, you will receive a Form 1099-K for the gross amount of the proceeds for the goods or services purchased from you through the use of a payment card in a calendar year. Further, if you accept payments from a third party settlement organization, you should receive a Form 1099-K only if:

  • the total number of your transactions exceeds 200 

AND

  • the aggregate value exceeds $20,000 in a calendar year.

 

Page Last Reviewed or Updated: 20-Mar-2014

The 2011 Tax Returns

2011 tax returns Publication 551 - Introductory Material Table of Contents What's New Reminder IntroductionOrdering forms and publications. 2011 tax returns Tax questions. 2011 tax returns Useful Items - You may want to see: What's New Property acquired from a decedent who died in 2010. 2011 tax returns  Property acquired from a decedent dying in 2010 will no longer have an automatic increase in basis. 2011 tax returns See Publication 4895, Tax Treatment of Property Acquired From a Decedent Dying in 2010, for details. 2011 tax returns Reminder Photographs of missing children. 2011 tax returns  The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. 2011 tax returns Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. 2011 tax returns You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child. 2011 tax returns Introduction Basis is the amount of your investment in property for tax purposes. 2011 tax returns Use the basis of property to figure depreciation, amortization, depletion, and casualty losses. 2011 tax returns Also use it to figure gain or loss on the sale or other disposition of property. 2011 tax returns You must keep accurate records of all items that affect the basis of property so you can make these computations. 2011 tax returns This publication is divided into the following sections. 2011 tax returns Cost Basis Adjusted Basis Basis Other Than Cost The basis of property you buy is usually its cost. 2011 tax returns You may also have to capitalize (add to basis) certain other costs related to buying or producing the property. 2011 tax returns Your original basis in property is adjusted (increased or decreased) by certain events. 2011 tax returns If you make improvements to the property, increase your basis. 2011 tax returns If you take deductions for depreciation or casualty losses, reduce your basis. 2011 tax returns You cannot determine your basis in some assets by cost. 2011 tax returns This includes property you receive as a gift or inheritance. 2011 tax returns It also applies to property received in an involuntary conversion and certain other circumstances. 2011 tax returns Comments and suggestions. 2011 tax returns   We welcome your comments about this publication and your suggestions for future editions. 2011 tax returns   You can write to us at the following address: Internal Revenue Service Business Forms and Publications Branch SE:W:CAR:MP:T:B 1111 Constitution Ave. 2011 tax returns NW, IR-6526 Washington, DC 20224   We respond to many letters by telephone. 2011 tax returns Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence. 2011 tax returns   You can email us at taxforms@irs. 2011 tax returns gov. 2011 tax returns Please put “Publications Comment” on the subject line. 2011 tax returns You can also send us comments from www. 2011 tax returns irs. 2011 tax returns gov/formspubs/, select “Comment on Tax Forms and Publications” under “Information about. 2011 tax returns ”   Although we cannot respond individually to each comment received, we do appreciate your feedback and will consider your comments as we revise our tax products. 2011 tax returns Ordering forms and publications. 2011 tax returns   Visit www. 2011 tax returns irs. 2011 tax returns gov/formspubs to download forms and publications, call 1-800-829-3676, or write to the address below and receive a response within 10 business days after your request is received. 2011 tax returns  Internal Revenue Service  1201 N. 2011 tax returns Mitsubishi Motorway Bloomington, IL 61705-6613 Tax questions. 2011 tax returns   If you have a tax question, visit IRS. 2011 tax returns gov or call 1-800-829-1040. 2011 tax returns We cannot answer tax questions sent to either of the above addresses. 2011 tax returns Useful Items - You may want to see: Publication 463 Travel, Entertainment, Gift, and Car Expenses 523 Selling Your Home 525 Taxable and Nontaxable Income 527 Residential Rental Property 530 Tax Information for First-Time Homeowners 535 Business Expenses 537 Installment Sales 544 Sales and Other Dispositions of Assets 550 Investment Income and Expenses 559 Survivors, Executors, and Administrators 587 Business Use of Your Home 946 How To Depreciate Property Form (and Instructions) 706 United States Estate (and Generation-Skipping Transfer) Tax Return 706-A United States Additional Estate Tax Return 8594 Asset Acquisition Statement See How To Get Tax Help near the end of this publication for information about getting publications and forms. 2011 tax returns Prev  Up  Next   Home   More Online Publications