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2012 Irs Tax Forms 1040a

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2012 Irs Tax Forms 1040a

2012 irs tax forms 1040a 6. 2012 irs tax forms 1040a   Tax Treaty Benefits Table of Contents Topics - This chapter discusses: Useful Items - You may want to see: Purpose of Tax Treaties Common Benefits Competent Authority AssistanceAdditional filing. 2012 irs tax forms 1040a Obtaining Copies of Tax Treaties Topics - This chapter discusses: Some common tax treaty benefits, How to get help in certain situations, and How to get copies of tax treaties. 2012 irs tax forms 1040a Useful Items - You may want to see: Publication 597 Information on the United States—Canada Income Tax Treaty 901 U. 2012 irs tax forms 1040a S. 2012 irs tax forms 1040a Tax Treaties See chapter 7 for information about getting these publications. 2012 irs tax forms 1040a Purpose of Tax Treaties The United States has tax treaties or conventions with many countries. 2012 irs tax forms 1040a See Table 6-1 at the end of this chapter for a list of these countries. 2012 irs tax forms 1040a Under these treaties and conventions, citizens and residents of the United States who are subject to taxes imposed by the foreign countries are entitled to certain credits, deductions, exemptions, and reductions in the rate of taxes of those foreign countries. 2012 irs tax forms 1040a If a foreign country with which the United States has a treaty imposes a tax on you, you may be entitled to benefits under the treaty. 2012 irs tax forms 1040a Treaty benefits generally are available to residents of the United States. 2012 irs tax forms 1040a They generally are not available to U. 2012 irs tax forms 1040a S. 2012 irs tax forms 1040a citizens who do not reside in the United States. 2012 irs tax forms 1040a However, certain treaty benefits and safeguards, such as the nondiscrimination provisions, are available to U. 2012 irs tax forms 1040a S. 2012 irs tax forms 1040a citizens residing in the treaty countries. 2012 irs tax forms 1040a U. 2012 irs tax forms 1040a S. 2012 irs tax forms 1040a citizens residing in a foreign country also may be entitled to benefits under that country's tax treaties with third countries. 2012 irs tax forms 1040a Certification of U. 2012 irs tax forms 1040a S. 2012 irs tax forms 1040a residency. 2012 irs tax forms 1040a   Use Form 8802, Application for United States Residency Certification, to request certification of U. 2012 irs tax forms 1040a S. 2012 irs tax forms 1040a residency for purposes of claiming benefits under a tax treaty. 2012 irs tax forms 1040a Certification can be requested for the current and any prior calendar years. 2012 irs tax forms 1040a You should examine the specific treaty articles to find if you are entitled to a tax credit, tax exemption, reduced rate of tax, or other treaty benefit or safeguard. 2012 irs tax forms 1040a Common Benefits Some common tax treaty benefits are explained below. 2012 irs tax forms 1040a The credits, deductions, exemptions, reductions in rate, and other benefits provided by tax treaties are subject to conditions and various restrictions. 2012 irs tax forms 1040a Benefits provided by certain treaties are not provided by others. 2012 irs tax forms 1040a Personal service income. 2012 irs tax forms 1040a If you are a U. 2012 irs tax forms 1040a S. 2012 irs tax forms 1040a resident who is in a treaty country for a limited number of days in the tax year and you meet certain other requirements, the payment you receive for personal services performed in that country may be exempt from that country's income tax. 2012 irs tax forms 1040a Professors and teachers. 2012 irs tax forms 1040a If you are a U. 2012 irs tax forms 1040a S. 2012 irs tax forms 1040a resident, the payment you receive for the first 2 or 3 years that you are teaching or doing research in a treaty country may be exempt from that country's income tax. 2012 irs tax forms 1040a Students, trainees, and apprentices. 2012 irs tax forms 1040a If you are a U. 2012 irs tax forms 1040a S. 2012 irs tax forms 1040a resident, amounts you receive from the United States for study, research, or business, professional and technical training may be exempt from a treaty country's income tax. 2012 irs tax forms 1040a Some treaties exempt grants, allowances, and awards received from governmental and certain nonprofit organizations. 2012 irs tax forms 1040a Also, under certain circumstances, a limited amount of pay received by students, trainees, and apprentices may be exempt from the income tax of many treaty countries. 2012 irs tax forms 1040a Pensions and annuities. 2012 irs tax forms 1040a If you are a U. 2012 irs tax forms 1040a S. 2012 irs tax forms 1040a resident, nongovernment pensions and annuities you receive may be exempt from the income tax of treaty countries. 2012 irs tax forms 1040a Most treaties contain separate provisions for exempting government pensions and annuities from treaty country income tax, and some treaties provide exemption from the treaty country's income tax for social security payments. 2012 irs tax forms 1040a Investment income. 2012 irs tax forms 1040a If you are a U. 2012 irs tax forms 1040a S. 2012 irs tax forms 1040a resident, investment income, such as interest and dividends, that you receive from sources in a treaty country may be exempt from that country's income tax or taxed at a reduced rate. 2012 irs tax forms 1040a Several treaties provide exemption for capital gains (other than from sales of real property in most cases) if specified requirements are met. 2012 irs tax forms 1040a Tax credit provisions. 2012 irs tax forms 1040a If you are a U. 2012 irs tax forms 1040a S. 2012 irs tax forms 1040a resident who receives income from or owns capital in a foreign country, you may be taxed on that income or capital by both the United States and the treaty country. 2012 irs tax forms 1040a Most treaties allow you to take a credit against or deduction from the treaty country's taxes based on the U. 2012 irs tax forms 1040a S. 2012 irs tax forms 1040a tax on the income. 2012 irs tax forms 1040a Nondiscrimination provisions. 2012 irs tax forms 1040a Most U. 2012 irs tax forms 1040a S. 2012 irs tax forms 1040a tax treaties provide that the treaty country cannot discriminate by imposing more burdensome taxes on U. 2012 irs tax forms 1040a S. 2012 irs tax forms 1040a citizens who are residents of the treaty country than it imposes on its own citizens in the same circumstances. 2012 irs tax forms 1040a Saving clauses. 2012 irs tax forms 1040a U. 2012 irs tax forms 1040a S. 2012 irs tax forms 1040a treaties contain saving clauses that provide that the treaties do not affect the U. 2012 irs tax forms 1040a S. 2012 irs tax forms 1040a taxation of its own citizens and residents. 2012 irs tax forms 1040a As a result, U. 2012 irs tax forms 1040a S. 2012 irs tax forms 1040a citizens and residents generally cannot use the treaty to reduce their U. 2012 irs tax forms 1040a S. 2012 irs tax forms 1040a tax liability. 2012 irs tax forms 1040a However, most treaties provide exceptions to saving clauses that allow certain provisions of the treaty to be claimed by U. 2012 irs tax forms 1040a S. 2012 irs tax forms 1040a citizens or residents. 2012 irs tax forms 1040a It is important that you examine the applicable saving clause to determine if an exception applies. 2012 irs tax forms 1040a More information on treaties. 2012 irs tax forms 1040a   Publication 901 contains an explanation of treaty provisions that apply to amounts received by teachers, students, workers, and government employees and pensioners who are alien nonresidents or residents of the United States. 2012 irs tax forms 1040a Since treaty provisions generally are reciprocal, you usually can substitute “United States” for the name of the treaty country whenever it appears, and vice versa when “U. 2012 irs tax forms 1040a S. 2012 irs tax forms 1040a ” appears in the treaty exemption discussions in Publication 901. 2012 irs tax forms 1040a   Publication 597 contains an explanation of a number of frequently-used provisions of the United States–Canada income tax treaty. 2012 irs tax forms 1040a Competent Authority Assistance If you are a U. 2012 irs tax forms 1040a S. 2012 irs tax forms 1040a citizen or resident alien, you can request assistance from the U. 2012 irs tax forms 1040a S. 2012 irs tax forms 1040a competent authority if you think that the actions of the United States, a treaty country, or both, cause or will cause a tax situation not intended by the treaty between the two countries. 2012 irs tax forms 1040a You should read any treaty articles, including the mutual agreement procedure article, that apply in your situation. 2012 irs tax forms 1040a The U. 2012 irs tax forms 1040a S. 2012 irs tax forms 1040a competent authority cannot consider requests involving countries with which the United States does not have a tax treaty. 2012 irs tax forms 1040a Effect of request for assistance. 2012 irs tax forms 1040a   If your request provides a basis for competent authority assistance, the U. 2012 irs tax forms 1040a S. 2012 irs tax forms 1040a competent authority generally will consult with the treaty country competent authority on how to resolve the situation. 2012 irs tax forms 1040a How to make your request. 2012 irs tax forms 1040a   It is important that you make your request for competent authority consideration as soon as either of the following occurs. 2012 irs tax forms 1040a You are denied treaty benefits. 2012 irs tax forms 1040a Actions taken by both the United States and the foreign country result in double taxation or will result in taxation not intended by the treaty. 2012 irs tax forms 1040a   In addition to making a request for assistance, you should take steps so that any agreement reached by the competent authorities is not barred by administrative, legal, or procedural barriers. 2012 irs tax forms 1040a Some of the steps you should consider taking include the following. 2012 irs tax forms 1040a Filing a protective claim for credit or refund of U. 2012 irs tax forms 1040a S. 2012 irs tax forms 1040a taxes. 2012 irs tax forms 1040a Delaying the expiration of any period of limitations on the making of a refund or other tax adjustment. 2012 irs tax forms 1040a Avoiding the lapse or termination of your right to appeal any tax determination. 2012 irs tax forms 1040a Complying with all applicable procedures for invoking competent authority consideration. 2012 irs tax forms 1040a Contesting an adjustment or seeking an appropriate correlative adjustment with respect to the U. 2012 irs tax forms 1040a S. 2012 irs tax forms 1040a or treaty country tax. 2012 irs tax forms 1040a Taxpayers can consult with the U. 2012 irs tax forms 1040a S. 2012 irs tax forms 1040a competent authority to determine whether they need to take protective steps and when any required steps need to be taken. 2012 irs tax forms 1040a   The request should contain all essential items of information, including the following items. 2012 irs tax forms 1040a A reference to the treaty and the treaty provisions on which the request is based. 2012 irs tax forms 1040a The years and amounts involved in both U. 2012 irs tax forms 1040a S. 2012 irs tax forms 1040a dollars and foreign currency. 2012 irs tax forms 1040a A brief description of the issues for which competent authority assistance is requested. 2012 irs tax forms 1040a   A complete listing of the information that must be included with the request can be found in Revenue Procedure 2006-54, or its successor. 2012 irs tax forms 1040a Revenue Procedure 2006-54 is available at www. 2012 irs tax forms 1040a irs. 2012 irs tax forms 1040a gov/irb/2006-49_IRB/ar13. 2012 irs tax forms 1040a html. 2012 irs tax forms 1040a   Also, see Notice 2013-78, which provides proposed updates to the procedures for requesting U. 2012 irs tax forms 1040a S. 2012 irs tax forms 1040a competent authority assistance under tax treaties. 2012 irs tax forms 1040a As noted, Revenue Procedure 2006-54 will be superseded by a revenue procedure to be published in the future. 2012 irs tax forms 1040a    Your request for competent authority consideration should be addressed to:   Deputy Commissioner (International) Large Business and International Division Internal Revenue Service 1111 Constitution Avenue, NW Routing M4-365 Washington, DC 20224 Attn: TAIT Additional filing. 2012 irs tax forms 1040a   In the case of U. 2012 irs tax forms 1040a S. 2012 irs tax forms 1040a - initiated adjustments, you also must file a copy of the request with the IRS office where your case is pending. 2012 irs tax forms 1040a If the request is filed after the matter has been designated for litigation or while a suit contesting your relevant tax liability is pending in a United States court, a copy of the request, with a separate statement attached identifying the court where the suit is pending and the docket number of the action, also must be filed with the: Office of Associate Chief Counsel (International) Internal Revenue Service 1111 Constitution Avenue, NW Washington, DC 20224 Additional details on the procedures for requesting competent authority assistance are included in Revenue Procedure 2006-54, or its successor. 2012 irs tax forms 1040a Obtaining Copies of Tax Treaties Table 6-1 lists those countries with which the United States has income tax treaties. 2012 irs tax forms 1040a This table is updated through October 31, 2013. 2012 irs tax forms 1040a You can get complete information about treaty provisions from the taxing authority in the country from which you receive income or from the treaty itself. 2012 irs tax forms 1040a You can obtain the text of most U. 2012 irs tax forms 1040a S. 2012 irs tax forms 1040a treaties at IRS. 2012 irs tax forms 1040a gov. 2012 irs tax forms 1040a You also can request the text of treaties from the Department of Treasury at the following address. 2012 irs tax forms 1040a Department of Treasury Office of Business and Public Liaison Rm. 2012 irs tax forms 1040a 3411 1500 Pennsylvania Avenue, NW  Washington, DC 20220 If you have questions about a treaty and you are in the United States, Puerto Rico, or the U. 2012 irs tax forms 1040a S. 2012 irs tax forms 1040a Virgin Islands, you can call the IRS at 1-800-829-1040. 2012 irs tax forms 1040a Table 6–1. 2012 irs tax forms 1040a List of Tax Treaties (Updated through October 31, 2013) Country Official Text  Symbol1 General  Effective Date Citation Applicable Treasury Explanations  or Treasury Decision (T. 2012 irs tax forms 1040a D. 2012 irs tax forms 1040a ) Australia TIAS 10773 Dec. 2012 irs tax forms 1040a 1, 1983 1986-2 C. 2012 irs tax forms 1040a B. 2012 irs tax forms 1040a 220 1986-2 C. 2012 irs tax forms 1040a B. 2012 irs tax forms 1040a 246 Protocol TIAS Jan. 2012 irs tax forms 1040a 1, 2004     Austria TIAS Jan. 2012 irs tax forms 1040a 1, 1999     Bangladesh TIAS Jan. 2012 irs tax forms 1040a 1, 2007     Barbados TIAS 11090 Jan. 2012 irs tax forms 1040a 1, 1984 1991-2 C. 2012 irs tax forms 1040a B. 2012 irs tax forms 1040a 436 1991-2 C. 2012 irs tax forms 1040a B. 2012 irs tax forms 1040a 466 Protocol TIAS Jan. 2012 irs tax forms 1040a 1, 2005     Belgium TIAS Jan. 2012 irs tax forms 1040a 1, 2008     Bulgaria TIAS Jan. 2012 irs tax forms 1040a 1, 2009     Canada2 TIAS 11087 Jan. 2012 irs tax forms 1040a 1, 1985 1986-2 C. 2012 irs tax forms 1040a B. 2012 irs tax forms 1040a 258 1987-2 C. 2012 irs tax forms 1040a B. 2012 irs tax forms 1040a 298 Protocol TIAS Jan. 2012 irs tax forms 1040a 1, 2009     China, People's Republic of TIAS 12065 Jan. 2012 irs tax forms 1040a 1, 1987 1988-1 C. 2012 irs tax forms 1040a B. 2012 irs tax forms 1040a 414 1988-1 C. 2012 irs tax forms 1040a B. 2012 irs tax forms 1040a 447 Commonwealth of Independent States3 TIAS 8225 Jan. 2012 irs tax forms 1040a 1, 1976 1976-2 C. 2012 irs tax forms 1040a B. 2012 irs tax forms 1040a 463 1976-2 C. 2012 irs tax forms 1040a B. 2012 irs tax forms 1040a 475 Cyprus TIAS 10965 Jan. 2012 irs tax forms 1040a 1, 1986 1989-2 C. 2012 irs tax forms 1040a B. 2012 irs tax forms 1040a 280 1989-2 C. 2012 irs tax forms 1040a B. 2012 irs tax forms 1040a 314 Czech Republic TIAS Jan. 2012 irs tax forms 1040a 1, 1993     Denmark TIAS Jan. 2012 irs tax forms 1040a 1, 2001     Protocol TIAS Jan. 2012 irs tax forms 1040a 1, 2008     Egypt TIAS 10149 Jan. 2012 irs tax forms 1040a 1, 1982 1982-1 C. 2012 irs tax forms 1040a B. 2012 irs tax forms 1040a 219 1982-1 C. 2012 irs tax forms 1040a B. 2012 irs tax forms 1040a 243 Estonia TIAS Jan. 2012 irs tax forms 1040a 1, 2000     Finland TIAS 12101 Jan. 2012 irs tax forms 1040a 1, 1991     Protocol TIAS Jan. 2012 irs tax forms 1040a 1, 2008     France TIAS Jan. 2012 irs tax forms 1040a 1, 1996     Protocol TIAS Jan. 2012 irs tax forms 1040a 1, 2009     Germany TIAS Jan. 2012 irs tax forms 1040a 1, 1990     Protocol TIAS Jan. 2012 irs tax forms 1040a 1, 2008     Greece TIAS 2902 Jan. 2012 irs tax forms 1040a 1, 1953 1958-2 C. 2012 irs tax forms 1040a B. 2012 irs tax forms 1040a 1054 T. 2012 irs tax forms 1040a D. 2012 irs tax forms 1040a 6109, 1954-2 C. 2012 irs tax forms 1040a B. 2012 irs tax forms 1040a 638 Hungary TIAS 9560 Jan. 2012 irs tax forms 1040a 1, 1980 1980-1 C. 2012 irs tax forms 1040a B. 2012 irs tax forms 1040a 333 1980-1 C. 2012 irs tax forms 1040a B. 2012 irs tax forms 1040a 354 Iceland TIAS 8151 Jan. 2012 irs tax forms 1040a 1, 2009     India TIAS Jan. 2012 irs tax forms 1040a 1, 1991     Indonesia TIAS 11593 Jan. 2012 irs tax forms 1040a 1, 1990     Ireland TIAS Jan. 2012 irs tax forms 1040a 1, 1998     Israel TIAS Jan. 2012 irs tax forms 1040a 1, 1995     Italy TIAS Jan. 2012 irs tax forms 1040a 1, 2010     Jamaica TIAS 10207 Jan. 2012 irs tax forms 1040a 1, 1982 1982-1 C. 2012 irs tax forms 1040a B. 2012 irs tax forms 1040a 257 1982-1 C. 2012 irs tax forms 1040a B. 2012 irs tax forms 1040a 291 Japan TIAS Jan. 2012 irs tax forms 1040a 1, 2005     Kazakhstan TIAS Jan. 2012 irs tax forms 1040a 1, 1996     Korea, South TIAS 9506 Jan. 2012 irs tax forms 1040a 1, 1980 1979-2 C. 2012 irs tax forms 1040a B. 2012 irs tax forms 1040a 435 1979-2 C. 2012 irs tax forms 1040a B. 2012 irs tax forms 1040a 458 Latvia TIAS Jan. 2012 irs tax forms 1040a 1, 2000     Lithuania TIAS Jan. 2012 irs tax forms 1040a 1, 2000     Luxembourg TIAS Jan. 2012 irs tax forms 1040a 1, 2001     Malta TIAS Jan. 2012 irs tax forms 1040a 1, 2011     Mexico TIAS Jan. 2012 irs tax forms 1040a 1,1994     Protocol TIAS Jan. 2012 irs tax forms 1040a 1, 2004               Table 6–1 (continued). 2012 irs tax forms 1040a Country Official Text  Symbol1 General  Effective Date Citation Applicable Treasury Explanations  or Treasury Decision (T. 2012 irs tax forms 1040a D. 2012 irs tax forms 1040a ) Morocco TIAS 10195 Jan. 2012 irs tax forms 1040a 1, 1981 1982-2 C. 2012 irs tax forms 1040a B. 2012 irs tax forms 1040a 405 1982-2 C. 2012 irs tax forms 1040a B. 2012 irs tax forms 1040a 427 Netherlands TIAS Jan. 2012 irs tax forms 1040a 1, 1994     Protocol TIAS Jan. 2012 irs tax forms 1040a 1, 2005     New Zealand TIAS 10772 Nov. 2012 irs tax forms 1040a 2, 1983 1990-2 C. 2012 irs tax forms 1040a B. 2012 irs tax forms 1040a 274 1990-2 C. 2012 irs tax forms 1040a B. 2012 irs tax forms 1040a 303 Protocol TIAS Jan. 2012 irs tax forms 1040a 1, 2011     Norway TIAS 7474 Jan. 2012 irs tax forms 1040a 1, 1971 1973-1 C. 2012 irs tax forms 1040a B. 2012 irs tax forms 1040a 669 1973-1 C. 2012 irs tax forms 1040a B. 2012 irs tax forms 1040a 693 Protocol TIAS 10205 Jan. 2012 irs tax forms 1040a 1, 1982 1982-2 C. 2012 irs tax forms 1040a B. 2012 irs tax forms 1040a 440 1982-2 C. 2012 irs tax forms 1040a B. 2012 irs tax forms 1040a 454 Pakistan TIAS 4232 Jan. 2012 irs tax forms 1040a 1, 1959 1960-2 C. 2012 irs tax forms 1040a B. 2012 irs tax forms 1040a 646 T. 2012 irs tax forms 1040a D. 2012 irs tax forms 1040a 6431, 1960-1 C. 2012 irs tax forms 1040a B. 2012 irs tax forms 1040a 755 Philippines TIAS 10417 Jan. 2012 irs tax forms 1040a 1, 1983 1984-2 C. 2012 irs tax forms 1040a B. 2012 irs tax forms 1040a 384 1984-2 C. 2012 irs tax forms 1040a B. 2012 irs tax forms 1040a 412 Poland TIAS 8486 Jan. 2012 irs tax forms 1040a 1, 1974 1977-1 C. 2012 irs tax forms 1040a B. 2012 irs tax forms 1040a 416 1977-1 C. 2012 irs tax forms 1040a B. 2012 irs tax forms 1040a 427 Portugal TIAS Jan. 2012 irs tax forms 1040a 1, 1996     Romania TIAS 8228 Jan. 2012 irs tax forms 1040a 1, 1974 1976-2 C. 2012 irs tax forms 1040a B. 2012 irs tax forms 1040a 492 1976-2 C. 2012 irs tax forms 1040a B. 2012 irs tax forms 1040a 504 Russia TIAS Jan. 2012 irs tax forms 1040a 1, 1994     Slovak Republic TIAS Jan. 2012 irs tax forms 1040a 1, 1993     Slovenia TIAS Jan. 2012 irs tax forms 1040a 1, 2002     South Africa TIAS Jan. 2012 irs tax forms 1040a 1, 1998     Spain TIAS Jan. 2012 irs tax forms 1040a 1, 1991     Sri Lanka TIAS Jan. 2012 irs tax forms 1040a 1, 2004     Sweden TIAS Jan. 2012 irs tax forms 1040a 1, 1996     Protocol TIAS Jan. 2012 irs tax forms 1040a 1, 2007     Switzerland TIAS Jan. 2012 irs tax forms 1040a 1, 1998     Thailand TIAS Jan. 2012 irs tax forms 1040a 1, 1998     Trinidad and Tobago TIAS 7047 Jan. 2012 irs tax forms 1040a 1, 1970 1971-2 C. 2012 irs tax forms 1040a B. 2012 irs tax forms 1040a 479   Tunisia TIAS Jan. 2012 irs tax forms 1040a 1, 1990     Turkey TIAS Jan. 2012 irs tax forms 1040a 1, 1998     Ukraine TIAS Jan. 2012 irs tax forms 1040a 1, 2001     United Kingdom TIAS Jan. 2012 irs tax forms 1040a 1, 2004     Venezuela TIAS Jan. 2012 irs tax forms 1040a 1, 2000      1(TIAS) — Treaties and Other International Act Series. 2012 irs tax forms 1040a  2Information on the treaty can be found in Publication 597, Information on the United States—Canada Income Tax Treaty. 2012 irs tax forms 1040a 3The U. 2012 irs tax forms 1040a S. 2012 irs tax forms 1040a -U. 2012 irs tax forms 1040a S. 2012 irs tax forms 1040a S. 2012 irs tax forms 1040a R. 2012 irs tax forms 1040a income tax treaty applies to the countries of Armenia, Azerbaijan, Belarus, Georgia, Kyrgyzstan, Moldova, Tajikistan, Turkmenistan, and Uzbekistan. 2012 irs tax forms 1040a Prev  Up  Next   Home   More Online Publications
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The 2012 Irs Tax Forms 1040a

2012 irs tax forms 1040a 3. 2012 irs tax forms 1040a   Claiming the Special Depreciation Allowance Table of Contents Introduction What Is Qualified Property?Qualified Reuse and Recycling Property Qualified Cellulosic Biofuel Plant Property Qualified Disaster Assistance Property Certain Qualified Property Acquired After December 31, 2007 Election to Accelerate Certain Credits in Lieu of the Special Depreciation Allowance How Much Can You Deduct? How Can You Elect Not To Claim an Allowance? When Must You Recapture an Allowance? Introduction You can take a special depreciation allowance to recover part of the cost of qualified property (defined next), placed in service during the tax year. 2012 irs tax forms 1040a The allowance applies only for the first year you place the property in service. 2012 irs tax forms 1040a For qualified property placed in service in 2013, you can take an additional 50% special allowance. 2012 irs tax forms 1040a The allowance is an additional deduction you can take after any section 179 deduction and before you figure regular depreciation under MACRS for the year you place the property in service. 2012 irs tax forms 1040a This chapter explains what is qualified property. 2012 irs tax forms 1040a It also includes rules regarding how to figure an allowance, how to elect not to claim an allowance, and when you must recapture an allowance. 2012 irs tax forms 1040a Corporations can elect to accelerate certain minimum tax credits in lieu of claiming the special depreciation allowance for eligible qualified property. 2012 irs tax forms 1040a See Election to Accelerate Certain Credits in Lieu of the Special Depreciation Allowance , later. 2012 irs tax forms 1040a See chapter 6 for information about getting publications and forms. 2012 irs tax forms 1040a What Is Qualified Property? Your property is qualified property if it is one of the following. 2012 irs tax forms 1040a Qualified reuse and recycling property. 2012 irs tax forms 1040a Qualified cellulosic biofuel plant property. 2012 irs tax forms 1040a Qualified disaster assistance property. 2012 irs tax forms 1040a Certain qualified property acquired after December 31, 2007. 2012 irs tax forms 1040a The following discussions provide information about the types of qualified property listed above for which you can take the special depreciation allowance. 2012 irs tax forms 1040a Qualified Reuse and Recycling Property You can take a 50% special depreciation allowance for qualified reuse and recycling property. 2012 irs tax forms 1040a Qualified reuse and recycling property is any machinery or equipment (not including buildings or real estate), along with any appurtenance, that is used exclusively to collect, distribute, or recycle qualified reuse and recyclable materials (as defined in section 168(m)(3)(B) of the Internal Revenue Code). 2012 irs tax forms 1040a Qualified reuse and recycling property also includes software necessary to operate such equipment. 2012 irs tax forms 1040a The property must meet the following requirements. 2012 irs tax forms 1040a The property must be depreciated under MACRS. 2012 irs tax forms 1040a The property must have a useful life of at least 5 years. 2012 irs tax forms 1040a The original use of the property must begin with you after August 31, 2008. 2012 irs tax forms 1040a You must have acquired the property by purchase (as discussed under Property Acquired by Purchase in chapter 2 ) after August 31, 2008, with no binding written contract for the acquisition in effect before September 1, 2008. 2012 irs tax forms 1040a The property must be placed in service for use in your trade or business after August 31, 2008. 2012 irs tax forms 1040a Excepted Property Qualified reuse and recycling property does not include any of the following. 2012 irs tax forms 1040a Any rolling stock or other equipment used to transport reuse or recyclable materials. 2012 irs tax forms 1040a Property required to be depreciated using the Alternative Depreciation System (ADS). 2012 irs tax forms 1040a For other property required to be depreciated using ADS, see Required use of ADS under Which Depreciation System (GDS or ADS) Applies , in chapter 4 . 2012 irs tax forms 1040a Other bonus depreciation property to which section 168(k) of the Internal Revenue Code applies. 2012 irs tax forms 1040a Property for which you elected not to claim any special depreciation allowance (discussed later). 2012 irs tax forms 1040a Property placed in service and disposed of in the same tax year. 2012 irs tax forms 1040a Property converted from business use to personal use in the same tax year acquired. 2012 irs tax forms 1040a Property converted from personal use to business use in the same or later tax year may be qualified reuse and recycling property. 2012 irs tax forms 1040a Qualified Cellulosic Biofuel Plant Property You can take a 50% special depreciation allowance for qualified cellulosic biofuel plant property. 2012 irs tax forms 1040a Cellulosic biofuel is any liquid fuel which is produced from any lignocellulosic or hemicellulosic matter that is available on a renewable or recurring basis. 2012 irs tax forms 1040a Examples include bagasse (from sugar cane), corn stalks, and switchgrass. 2012 irs tax forms 1040a The property must meet the following requirements. 2012 irs tax forms 1040a The property is used in the United States solely to produce cellulosic biofuel. 2012 irs tax forms 1040a The original use of the property must begin with you after December 20, 2006. 2012 irs tax forms 1040a You must have acquired the property by purchase (as discussed under Property Acquired by Purchase in chapter 2 ) after December 20, 2006, with no binding written contract for acquisition in effect before December 21, 2006. 2012 irs tax forms 1040a The property must be placed in service for use in your trade or business or for the production of income after October 3, 2008, and before January 3, 2013. 2012 irs tax forms 1040a Note. 2012 irs tax forms 1040a For property placed in service after January 2, 2013, and before January 1, 2014, you can take a 50% special depreciation allowance for qualified second generation biofuel plant property that is used solely in the United States to produce second generation biofuel (as defined in section 40(b)(6)(E)). 2012 irs tax forms 1040a The other requirements for qualified second generation biofuel plant property to be eligible for the special depreciation allowance are identical to the requirements discussed for Qualified Cellulosic Biofuel Plant Property above. 2012 irs tax forms 1040a Special Rules Sale-leaseback. 2012 irs tax forms 1040a   If you sold qualified cellulosic biofuel plant property you placed in service after October 3, 2008, and leased it back within 3 months after you originally placed it in service, the property is treated as originally placed in service no earlier than the date it is used by you under the leaseback. 2012 irs tax forms 1040a   The property will not qualify for the special allowance if the lessee or a related person to the lessee or lessor had a written binding contract in effect for the acquisition of the property before December 21, 2006. 2012 irs tax forms 1040a Syndicated leasing transactions. 2012 irs tax forms 1040a   If qualified cellulosic biofuel plant property is originally placed in service by a lessor after October 3, 2008, the property is sold within 3 months of the date it was placed in service, and the user of the property does not change, then the property is treated as originally placed in service by the taxpayer no earlier than the date of the last sale. 2012 irs tax forms 1040a   Multiple units of property subject to the same lease will be treated as originally placed in service no earlier than the date of sale if the property is sold within 3 months after the final unit is placed in service and the period between the times the first and last units are placed in service does not exceed 12 months. 2012 irs tax forms 1040a Excepted Property Qualified cellulosic biofuel plant property does not include any of the following. 2012 irs tax forms 1040a Property placed in service and disposed of in the same tax year. 2012 irs tax forms 1040a Property converted from business use to personal use in the same tax year it is acquired. 2012 irs tax forms 1040a Property converted from personal use to business use in the same or later tax year may be qualified cellulosic biomass ethanol plant property. 2012 irs tax forms 1040a Property required to be depreciated using the Alternative Depreciation System (ADS). 2012 irs tax forms 1040a For other property required to be depreciated using ADS, see Required use of ADS under Which Depreciation System (GDS or ADS) Applies , in chapter 4 . 2012 irs tax forms 1040a Property any portion of which is financed with the proceeds of any obligation the interest on which is exempt from tax under section 103 of the Internal Revenue Code. 2012 irs tax forms 1040a Property for which you elected not to claim any special depreciation allowance (discussed later). 2012 irs tax forms 1040a Property for which a deduction was taken under section 179C for certain qualified refinery property. 2012 irs tax forms 1040a Other bonus depreciation property to which section 168(k) of the Internal Revenue Code applies. 2012 irs tax forms 1040a Qualified Disaster Assistance Property You can take a 50% special depreciation allowance for qualified disaster assistance property placed in service in federally declared disaster areas in which the disaster occurred in 2009. 2012 irs tax forms 1040a A list of the federally declared disaster areas is available at the FEMA website at www. 2012 irs tax forms 1040a fema. 2012 irs tax forms 1040a gov. 2012 irs tax forms 1040a Your property is qualified disaster assistance property if it meets the following requirements. 2012 irs tax forms 1040a The property is nonresidential real property or residential real property placed in service before January 1, 2014, in a federally declared disaster area in which the disaster occurred in 2009. 2012 irs tax forms 1040a You must have acquired the property by purchase (as discussed under Property Acquired by Purchase in chapter 2 ) on or after the applicable disaster date, with no binding written contract for the acquisition in effect before the applicable disaster date. 2012 irs tax forms 1040a The property must rehabilitate property damaged, or replace property destroyed or condemned, as a result of the applicable federally declared disaster. 2012 irs tax forms 1040a The property must be similar in nature to, and located in the same county as, the rehabilitated or replaced property. 2012 irs tax forms 1040a The original use of the property within the applicable disaster area must have begun with you on or after the applicable disaster date. 2012 irs tax forms 1040a The property is placed in service by you on or before the date which is the last day of the fourth calendar year. 2012 irs tax forms 1040a Substantially all (80% or more) of the use of the property must be in the active conduct of your trade or business in a federally declared disaster area, occurring in 2009. 2012 irs tax forms 1040a It is not excepted property (explained later in Excepted Property ). 2012 irs tax forms 1040a Special Rules Sale-leaseback. 2012 irs tax forms 1040a   If you sold qualified disaster assistance property you placed in service after the applicable disaster date and leased it back within 3 months after you originally placed it in service, the property is treated as originally placed in service no earlier than the date it is used by you under the leaseback. 2012 irs tax forms 1040a   The property will not qualify for the special allowance if the lessee or a related person to the lessee or lessor had a written binding contract in effect for the acquisition of the property before the applicable disaster date. 2012 irs tax forms 1040a Syndicated leasing transactions. 2012 irs tax forms 1040a   If qualified disaster assistance property is originally placed in service by a lessor after the applicable disaster date, the property is sold within 3 months of the date it was placed in service, and the user of the property does not change, then the property is treated as originally placed in service by the taxpayer no earlier than the date of the last sale. 2012 irs tax forms 1040a   Multiple units of property subject to the same lease will be treated as originally placed in service no earlier than the date of sale if the property is sold within 3 months after the final unit is placed in service and the period between the times the first and last units are placed in service does not exceed 12 months. 2012 irs tax forms 1040a Excepted Property Qualified disaster assistance property does not include any of the following. 2012 irs tax forms 1040a Property required to be depreciated using the Alternative Depreciation System (ADS). 2012 irs tax forms 1040a For other property required to be depreciated using ADS, see Required use of ADS under Which Depreciation System (GDS or ADS) Applies , in chapter 4 . 2012 irs tax forms 1040a Property any portion of which is financed with the proceeds of a tax-exempt obligation under section 103 of the Internal Revenue Code. 2012 irs tax forms 1040a Any qualified revitalization building (defined later) placed in service before January 1, 2010, for which you have elected to claim a commercial revitalization deduction for qualified revitalization expenditures. 2012 irs tax forms 1040a Any property used in connection with any private or commercial golf course, country club, massage parlor, hot tub facility, suntan facility, or any store, the principal business of which is the sale of alcoholic beverages for consumption off premises. 2012 irs tax forms 1040a Any property for which the special allowance under section 168(k) or section 1400N(d) of the Internal Revenue Code applies. 2012 irs tax forms 1040a Property for which you elected not to claim any special depreciation allowance (discussed later). 2012 irs tax forms 1040a Property placed in service and disposed of in the same tax year. 2012 irs tax forms 1040a Property converted from business use to personal use in the same tax year acquired. 2012 irs tax forms 1040a Property converted from personal use to business use in the same or later tax year may be qualified disaster assistance property. 2012 irs tax forms 1040a Any gambling or animal racing property (defined later). 2012 irs tax forms 1040a Qualified revitalization building. 2012 irs tax forms 1040a   This is a commercial building and its structural components that you placed in service in a renewal community before January 1, 2010. 2012 irs tax forms 1040a If the building is new, the original use of the building must begin with you. 2012 irs tax forms 1040a If the building is not new, you must substantially rehabilitate the building and then place it in service. 2012 irs tax forms 1040a For more information, including definitions of substantially rehabilitated building and qualified revitalization expenditure, see section 1400I(b) of the Internal Revenue Code. 2012 irs tax forms 1040a Gambling or animal racing property. 2012 irs tax forms 1040a   Gambling or animal racing property includes the following personal and real property. 2012 irs tax forms 1040a Any equipment, furniture, software, or other property used directly in connection with gambling, the racing of animals, or the on-site viewing of such racing. 2012 irs tax forms 1040a Any real property determined by square footage (other than any portion that is less than 100 square feet) that is dedicated to gambling, the racing of animals, or the on-site viewing of such racing. 2012 irs tax forms 1040a Certain Qualified Property Acquired After December 31, 2007 You can take a 50% special depreciation deduction allowance for certain qualified property acquired after December 31, 2007. 2012 irs tax forms 1040a Your property is qualified property if it meets the following requirements. 2012 irs tax forms 1040a It is one of the following types of property. 2012 irs tax forms 1040a Tangible property depreciated under MACRS with a recovery period of 20 years or less. 2012 irs tax forms 1040a Water utility property. 2012 irs tax forms 1040a Computer software that is readily available for purchase by the general public, is subject to a nonexclusive license, and has not been substantially modified. 2012 irs tax forms 1040a (The cost of some computer software is treated as part of the cost of hardware and is depreciated under MACRS. 2012 irs tax forms 1040a ) Qualified leasehold improvement property (defined under Qualified leasehold improvement property later). 2012 irs tax forms 1040a You must have acquired the property after December 31, 2007, with no binding written contract for the acquisition in effect before January 1, 2008. 2012 irs tax forms 1040a The property must be placed in service for use in your trade or business or for the production of income before January 1, 2014 (before January 1, 2015, for certain property with a long production period and certain aircraft (defined next)). 2012 irs tax forms 1040a The original use of the property must begin with you after December 31, 2007. 2012 irs tax forms 1040a It is not excepted property (explained later in Excepted property). 2012 irs tax forms 1040a Qualified leasehold improvement property. 2012 irs tax forms 1040a    Generally, this is any improvement to an interior part of a building that is nonresidential real property, if all the following requirements are met. 2012 irs tax forms 1040a The improvement is made under or according to a lease by the lessee (or any sublessee) or the lessor of that part of the building. 2012 irs tax forms 1040a That part of the building is to be occupied exclusively by the lessee (or any sublessee) of that part. 2012 irs tax forms 1040a The improvement is placed in service more than 3 years after the date the building was first placed in service by any person. 2012 irs tax forms 1040a The improvement is section 1250 property. 2012 irs tax forms 1040a See chapter 3 in Publication 544, Sales and Other Dispositions of Assets, for the definition of section 1250 property. 2012 irs tax forms 1040a   However, a qualified leasehold improvement does not include any improvement for which the expenditure is attributable to any of the following. 2012 irs tax forms 1040a The enlargement of the building. 2012 irs tax forms 1040a Any elevator or escalator. 2012 irs tax forms 1040a Any structural component benefiting a common area. 2012 irs tax forms 1040a The internal structural framework of the building. 2012 irs tax forms 1040a   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. 2012 irs tax forms 1040a However, a lease between related persons is not treated as a lease. 2012 irs tax forms 1040a Related persons. 2012 irs tax forms 1040a   For this purpose, the following are related persons. 2012 irs tax forms 1040a Members of an affiliated group. 2012 irs tax forms 1040a An individual and a member of his or her family, including only a spouse, child, parent, brother, sister, half-brother, half-sister, ancestor, and lineal descendant. 2012 irs tax forms 1040a A corporation and an individual who directly or indirectly owns 80% or more of the value of the outstanding stock of that corporation. 2012 irs tax forms 1040a Two corporations that are members of the same controlled group. 2012 irs tax forms 1040a A trust fiduciary and a corporation if 80% or more of the value of the outstanding stock is directly or indirectly owned by or for the trust or grantor of the trust. 2012 irs tax forms 1040a The grantor and fiduciary, and the fiduciary and beneficiary, of any trust. 2012 irs tax forms 1040a The fiduciaries of two different trusts, and the fiduciaries and beneficiaries of two different trusts, if the same person is the grantor of both trusts. 2012 irs tax forms 1040a A tax-exempt educational or charitable organization and any person (or, if that person is an individual, a member of that person's family) who directly or indirectly controls the organization. 2012 irs tax forms 1040a Two S corporations, and an S corporation and a regular corporation, if the same persons own 80% or more of the value of the outstanding stock of each corporation. 2012 irs tax forms 1040a A corporation and a partnership if the same persons own both of the following. 2012 irs tax forms 1040a 80% or more of the value of the outstanding stock of the corporation. 2012 irs tax forms 1040a 80% or more of the capital or profits interest in the partnership. 2012 irs tax forms 1040a The executor and beneficiary of any estate. 2012 irs tax forms 1040a Long Production Period Property To be qualified property, long production period property must meet the following requirements. 2012 irs tax forms 1040a It must meet the requirements in (2)-(5), above. 2012 irs tax forms 1040a The property has a recovery period of at least 10 years or is transportation property. 2012 irs tax forms 1040a Transportation property is tangible personal property used in the trade or business of transporting persons or property. 2012 irs tax forms 1040a The property is subject to section 263A of the Internal Revenue Code. 2012 irs tax forms 1040a The property has an estimated production period exceeding 1 year and an estimated production cost exceeding $1,000,000. 2012 irs tax forms 1040a Noncommercial Aircraft To be qualified property, noncommercial aircraft must meet the following requirements. 2012 irs tax forms 1040a It must meet the requirements in (2)-(5), above. 2012 irs tax forms 1040a The aircraft must not be tangible personal property used in the trade or business of transporting persons or property (except for agricultural or firefighting purposes). 2012 irs tax forms 1040a The aircraft must be purchased (as discussed under Property Acquired by Purchase in chapter 2 ) by a purchaser who at the time of the contract for purchase, makes a nonrefundable deposit of the lesser of 10% of the cost or $100,000. 2012 irs tax forms 1040a The aircraft must have an estimated production period exceeding four months and a cost exceeding $200,000. 2012 irs tax forms 1040a Special Rules Sale-leaseback. 2012 irs tax forms 1040a   If you sold qualified property you placed in service after December 31, 2007, and leased it back within 3 months after you originally placed in service, the property is treated as originally placed in service no earlier than the date it is used by you under the leaseback. 2012 irs tax forms 1040a   The property will not qualify for the special depreciation allowance if the lessee or a related person to the lessee or lessor had a written binding contract in effect for the acquisition of the property before January 1, 2008. 2012 irs tax forms 1040a Syndicated leasing transactions. 2012 irs tax forms 1040a   If qualified property is originally placed in service by a lessor after December 31, 2007, the property is sold within 3 months of the date it was placed in service, and the user of the property does not change, then the property is treated as originally placed in service by the taxpayer no earlier than the date of the last sale. 2012 irs tax forms 1040a   Multiple units of property subject to the same lease will be treated as originally placed in service no earlier than the date of the last sale if the property is sold within 3 months after the final unit is placed in service and the period between the time the first and last units are placed in service does not exceed 12 months. 2012 irs tax forms 1040a Excepted Property Qualified property does not include any of the following. 2012 irs tax forms 1040a Property placed in service and disposed of in the same tax year. 2012 irs tax forms 1040a Property converted from business use to personal use in the same tax year acquired. 2012 irs tax forms 1040a Property converted from personal use to business use in the same or later tax year may be qualified property. 2012 irs tax forms 1040a Property required to be depreciated under the Alternative Depreciation System (ADS). 2012 irs tax forms 1040a This includes listed property used 50% or less in a qualified business use. 2012 irs tax forms 1040a For other property required to be depreciated using ADS, see Required use of ADS under Which Depreciation System (GDS or ADS) Applies , in chapter 4 . 2012 irs tax forms 1040a Qualified restaurant property (as defined in section 168(e)(7) of the Internal Revenue Code). 2012 irs tax forms 1040a Qualified retail improvement property (as defined in section 168(e)(8) of the Internal Revenue Code). 2012 irs tax forms 1040a Property for which you elected not to claim any special depreciation allowance (discussed later). 2012 irs tax forms 1040a Property for which you elected to accelerate certain credits in lieu of the special depreciation allowance (discussed next). 2012 irs tax forms 1040a Election to Accelerate Certain Credits in Lieu of the Special Depreciation Allowance An election made by a corporation to claim pre-2006 unused minimum tax credits in lieu of claiming the special depreciation allowance for either its first tax year ending after March 31, 2008, its first tax year ending after December 31, 2008, or its first tax year ending after December 31, 2010, continues to apply to round 2 extension property (as defined in section 168(k)(4)(I)(iv)), unless the corporation made an election not to apply the section 168(k)(4) election to round 2 extension property for its first tax year ending after December 31, 2010. 2012 irs tax forms 1040a For 2013, round 2 extension property generally is long production period and noncommercial aircraft if acquired after March 31, 2008, and placed in service after December 31, 2012, but before January 1, 2014. 2012 irs tax forms 1040a An election made by a corporation to claim pre-2006 unused minimum tax credits in lieu of claiming the special depreciation allowance for either its first tax year ending after March 31, 2008, its first tax year ending after December 31, 2008, or its first tax year ending after December 31, 2010, continues to apply to round 3 extension property (as defined in section 168(k)(4)(J)(iv)), unless the corporation makes an election not to apply the section 168(k)(4) election to round 3 extension property. 2012 irs tax forms 1040a If a corporation did not make a section 168(k)(4) election for either its first tax year ending after March 31, 2008, its first tax year ending after December 31, 2008, or its first tax year ending after December 31, 2010, the corporation may elect for its first tax year ending after December 31, 2012, to claim pre-2006 unused minimum tax credits in lieu of claiming the special depreciation allowance for only round 3 extension property. 2012 irs tax forms 1040a If you make an election to accelerate these credits in lieu of claiming the special depreciation allowance for eligible property, you must not take the 50% special depreciation allowance for the property and must depreciate the basis in the property under MACRS using the straight line method. 2012 irs tax forms 1040a See Which Depreciation Method Applies in chapter 4 . 2012 irs tax forms 1040a Once made, the election cannot be revoked without IRS consent. 2012 irs tax forms 1040a Additional guidance. 2012 irs tax forms 1040a   For additional guidance on the election to accelerate the research or minimum tax credit in lieu of claiming the special depreciation allowance, see Rev. 2012 irs tax forms 1040a Proc. 2012 irs tax forms 1040a 2008-65 on page 1082 of Internal Revenue Bulletin 2008-44, available at www. 2012 irs tax forms 1040a irs. 2012 irs tax forms 1040a gov/pub/irs-irbs/irb08-44. 2012 irs tax forms 1040a pdf, Rev. 2012 irs tax forms 1040a Proc. 2012 irs tax forms 1040a 2009-16 on page 449 of Internal Revenue Bulletin 2009-06, available at www. 2012 irs tax forms 1040a irs. 2012 irs tax forms 1040a gov/pub/irs-irbs/irb09-06. 2012 irs tax forms 1040a pdf, and Rev. 2012 irs tax forms 1040a Proc. 2012 irs tax forms 1040a 2009-33 on page 150 of Internal Revenue Bulletin 2009-29, available at www. 2012 irs tax forms 1040a irs. 2012 irs tax forms 1040a gov/pub/irs-irbs/irb09-29. 2012 irs tax forms 1040a pdf. 2012 irs tax forms 1040a Also, see Form 3800, General Business Credit; Form 8827, Credit for Prior Year Minimum Tax — Corporations; and related instructions. 2012 irs tax forms 1040a   Additional guidance regarding the election to accelerate the minimum tax credit in lieu of claiming the special depreciation allowance for round 2 extension property and round 3 extension property may also be available in later Internal Revenue Bulletins available at www. 2012 irs tax forms 1040a irs. 2012 irs tax forms 1040a gov/irb. 2012 irs tax forms 1040a How Much Can You Deduct? Figure the special depreciation allowance by multiplying the depreciable basis of qualified reuse and recycling property, qualified cellulosic biofuel plant property, qualified disaster assistance property, and certain qualified property acquired after December 31, 2007, by 50%. 2012 irs tax forms 1040a For qualified property other than listed property, enter the special allowance on line 14 in Part II of Form 4562. 2012 irs tax forms 1040a For qualified property that is listed property, enter the special allowance on line 25 in Part V of Form 4562. 2012 irs tax forms 1040a If you place qualified property in service in a short tax year, you can take the full amount of a special depreciation allowance. 2012 irs tax forms 1040a Depreciable basis. 2012 irs tax forms 1040a   This is the property's cost or other basis multiplied by the percentage of business/investment use, reduced by the total amount of any credits and deductions allocable to the property. 2012 irs tax forms 1040a   The following are examples of some credits and deductions that reduce depreciable basis. 2012 irs tax forms 1040a Any section 179 deduction. 2012 irs tax forms 1040a Any deduction for removal of barriers to the disabled and the elderly. 2012 irs tax forms 1040a Any disabled access credit, enhanced oil recovery credit, and credit for employer-provided childcare facilities and services. 2012 irs tax forms 1040a Basis adjustment to investment credit property under section 50(c) of the Internal Revenue Code. 2012 irs tax forms 1040a   For additional credits and deductions that affect basis, see section 1016 of the Internal Revenue Code. 2012 irs tax forms 1040a   For information about how to determine the cost or other basis of property, see What Is the Basis of Your Depreciable Property in chapter 1 . 2012 irs tax forms 1040a For a discussion of business/investment use, see Partial business or investment use under Property Used in Your Business or Income-Producing Activity in chapter 1 . 2012 irs tax forms 1040a Depreciating the remaining cost. 2012 irs tax forms 1040a   After you figure your special depreciation allowance for your qualified property, you can use the remaining cost to figure your regular MACRS depreciation deduction (discussed in chapter 4 . 2012 irs tax forms 1040a Therefore, you must reduce the depreciable basis of the property by the special depreciation allowance before figuring your regular MACRS depreciation deduction. 2012 irs tax forms 1040a Example. 2012 irs tax forms 1040a On November 1, 2013, Tom Brown bought and placed in service in his business qualified property that cost $450,000. 2012 irs tax forms 1040a He did not elect to claim a section 179 deduction. 2012 irs tax forms 1040a He deducts 50% of the cost ($225,000) as a special depreciation allowance for 2013. 2012 irs tax forms 1040a He uses the remaining $225,000 of cost to figure his regular MACRS depreciation deduction for 2013 and later years. 2012 irs tax forms 1040a Like-kind exchanges and involuntary conversions. 2012 irs tax forms 1040a   If you acquire qualified property in a like-kind exchange or involuntary conversion, the carryover basis of the acquired property is eligible for a special depreciation allowance. 2012 irs tax forms 1040a After you figure your special allowance, you can use the remaining carryover basis to figure your regular MACRS depreciation deduction. 2012 irs tax forms 1040a In the year you claim the allowance (the year you place in service the property received in the exchange or dispose of involuntarily converted property), you must reduce the carryover basis of the property by the allowance before figuring your regular MACRS depreciation deduction. 2012 irs tax forms 1040a See Figuring the Deduction for Property Acquired in a Nontaxable Exchange , in chapter 4 under How Is the Depreciation Deduction Figured . 2012 irs tax forms 1040a The excess basis (the part of the acquired property's basis that exceeds its carryover basis) is also eligible for a special depreciation allowance. 2012 irs tax forms 1040a How Can You Elect Not To Claim an Allowance? You can elect, for any class of property, not to deduct any special allowances for all property in such class placed in service during the tax year. 2012 irs tax forms 1040a To make an election, attach a statement to your return indicating what election you are making and the class of property for which you are making the election. 2012 irs tax forms 1040a When to make election. 2012 irs tax forms 1040a   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. 2012 irs tax forms 1040a   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). 2012 irs tax forms 1040a Attach the election statement to the amended return. 2012 irs tax forms 1040a On the amended return, write “Filed pursuant to section 301. 2012 irs tax forms 1040a 9100-2. 2012 irs tax forms 1040a ” Revoking an election. 2012 irs tax forms 1040a   Once you elect not to deduct a special depreciation allowance for a class of property, you cannot revoke the election without IRS consent. 2012 irs tax forms 1040a A request to revoke the election is a request for a letter ruling. 2012 irs tax forms 1040a If you elect not to have any special allowance apply, the property may be subject to an alternative minimum tax adjustment for depreciation. 2012 irs tax forms 1040a When Must You Recapture an Allowance? When you dispose of property for which you claimed a special depreciation allowance, any gain on the disposition is generally recaptured (included in income) as ordinary income up to the amount of the special depreciation allowance previously allowed or allowable. 2012 irs tax forms 1040a See When Do You Recapture MACRS Depreciation in chapter 4 or more information. 2012 irs tax forms 1040a Recapture of allowance deducted for qualified GO Zone property. 2012 irs tax forms 1040a   If, in any year after the year you claim the special depreciation allowance for qualified GO Zone property (including specified GO Zone extension property), the property ceases to be used in the GO Zone, you may have to recapture as ordinary income the excess benefit you received from claiming the special depreciation allowance. 2012 irs tax forms 1040a For additional guidance, see Notice 2008-25 on page 484 of Internal Revenue Bulletin 2008-9. 2012 irs tax forms 1040a Qualified cellulosic biomass ethanol plant property and qualified cellulosic biofuel plant property. 2012 irs tax forms 1040a   If, in any year after the year you claim the special depreciation allowance for any qualified cellulosic biomass ethanol plant property or qualified biofuel plant property, the property ceases to be qualified cellulosic biomass ethanol plant property or qualified biofuel plant property, you may have to recapture as ordinary income the excess benefit you received from claiming the special depreciation allowance. 2012 irs tax forms 1040a Recapture of allowance for qualified Recovery Assistance property. 2012 irs tax forms 1040a   If, in any year after the year you claim the special depreciation allowance for qualified Recovery Assistance property, the property ceases to be used in the Kansas disaster area, you may have to recapture as ordinary income the excess benefit you received from claiming the special depreciation allowance. 2012 irs tax forms 1040a For additional guidance, see Notice 2008-67 on page 307 of Internal Revenue Bulletin 2008-32. 2012 irs tax forms 1040a Recapture of allowance for qualified disaster assistance property. 2012 irs tax forms 1040a   If, in any year after the year you claim the special depreciation allowance for qualified disaster assistance property, the property ceases to be used in the applicable disaster area, you may have to recapture as ordinary income the excess benefit you received from claiming the special depreciation allowance. 2012 irs tax forms 1040a   For additional guidance, see Notice 2008-67 on page 307 of Internal Revenue Bulletin 2008-32. 2012 irs tax forms 1040a Prev  Up  Next   Home   More Online Publications