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Amend Federal Tax Return 2012

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Amend Federal Tax Return 2012

Amend federal tax return 2012 Index Symbols 10% additional tax, Early Distributions Tax, Age 59½ Rule, Additional 10% tax 2-year rule SIMPLE IRAs, Two-year rule. Amend federal tax return 2012 20% withholding, Other withholding rules. Amend federal tax return 2012 5-year rule, 5-year rule. Amend federal tax return 2012 , Death before required beginning date. Amend federal tax return 2012 6% excise tax on excess contributions to Roth IRAs, What if You Contribute Too Much? 60-day period for rollovers, Time Limit for Making a Rollover Contribution A Account balance, IRA account balance. Amend federal tax return 2012 Additional taxes, What Acts Result in Penalties or Additional Taxes?, Additional 10% tax (see also Penalties) Reporting, Reporting Additional Taxes Adjusted gross income (AGI), Modified adjusted gross income (AGI). Amend federal tax return 2012 , Modified AGI. Amend federal tax return 2012 (see also Modified adjusted gross income (AGI)) Retirement savings contributions credit, Adjusted gross income. Amend federal tax return 2012 Age 50 Contributions, General Limit Age 59 1/2 rule, Age 59½ Rule Age 70 1/2 rule, Age 70½ rule. Amend federal tax return 2012 Required minimum distributions, Distributions after the required beginning date. Amend federal tax return 2012 Age limit Traditional IRA, When Can Contributions Be Made? Airline payments, Rollover of Airline Payments Alimony, Alimony and separate maintenance. Amend federal tax return 2012 Annuity contracts, Annuity or endowment contracts. Amend federal tax return 2012 Borrowing on, Borrowing on an annuity contract. Amend federal tax return 2012 Distribution from insurance company, Annuity distributions from an insurance company. Amend federal tax return 2012 Distribution from IRA account, Distribution of an annuity contract from your IRA account. Amend federal tax return 2012 Early distributions, Annuity. Amend federal tax return 2012 Assistance (see Tax help) B Basis Inherited IRAs, IRA with basis. Amend federal tax return 2012 Roth IRAs, Basis of distributed property. Amend federal tax return 2012 Traditional IRAs, Cost basis. Amend federal tax return 2012 Beginning date, required, Distributions after the required beginning date. Amend federal tax return 2012 Beneficiaries, IRA Beneficiaries, Death before required beginning date. Amend federal tax return 2012 Change of, Change of beneficiary. Amend federal tax return 2012 Death of beneficiary, Death of a beneficiary. Amend federal tax return 2012 Early distributions to, Beneficiary. Amend federal tax return 2012 Individual as, Beneficiary an individual. Amend federal tax return 2012 More than one, More than one beneficiary. Amend federal tax return 2012 , Multiple individual beneficiaries. Amend federal tax return 2012 Not an individual, Beneficiary not an individual. Amend federal tax return 2012 Roth IRAs, Distributions to beneficiaries. Amend federal tax return 2012 Sole beneficiary spouse more than 10 years younger, Sole beneficiary spouse who is more than 10 years younger. Amend federal tax return 2012 Bond purchase plans Rollovers from, Rollover from bond purchase plan. Amend federal tax return 2012 Bonds, retirement (see Individual retirement bonds) Broker's commissions, Brokers' commissions. Amend federal tax return 2012 , Brokers' commissions. Amend federal tax return 2012 C Change in marital status, Change in marital status. Amend federal tax return 2012 Change of beneficiary, Change of beneficiary. Amend federal tax return 2012 Charitable distributions, qualified, Qualified charitable distributions. Amend federal tax return 2012 Collectibles, Investment in Collectibles, Collectibles. Amend federal tax return 2012 Community property, Community property laws. Amend federal tax return 2012 Compensation Alimony, Alimony and separate maintenance. Amend federal tax return 2012 Defined, What Is Compensation? Nontaxable combat pay, Nontaxable combat pay. Amend federal tax return 2012 Self-employment, Self-employment loss. Amend federal tax return 2012 Wages, salaries, etc. Amend federal tax return 2012 , Wages, salaries, etc. Amend federal tax return 2012 Conduit IRAs, IRA as a holding account (conduit IRA) for rollovers to other eligible plans. Amend federal tax return 2012 Contribution limits More than one IRA, More than one IRA. Amend federal tax return 2012 Contributions Designating the year, Designating year for which contribution is made. Amend federal tax return 2012 Distributions in same year as, Both contributions for 2013 and distributions in 2013. Amend federal tax return 2012 Excess (see Excess contributions) Less than maximum, Less Than Maximum Contributions Matching (SIMPLE), Matching contributions. Amend federal tax return 2012 Nondeductible (see Nondeductible contributions) Not required, Contributions not required. Amend federal tax return 2012 Qualified reservist repayments, Qualified reservist repayments. Amend federal tax return 2012 Recharacterizing (see Recharacterization) Retirement savings contributions credit, Eligible contributions. Amend federal tax return 2012 Roth IRAs, Can You Contribute to a Roth IRA?, Applying excess contributions. Amend federal tax return 2012 SIMPLE plans, How Are Contributions Made?, How Much Can Be Contributed on Your Behalf? Traditional IRAs, How Much Can Be Contributed?, More Than Maximum Contributions When to contribute, When Can Contributions Be Made? Withdrawing before due date of return, Contributions Returned Before Due Date of Return Conversions From SIMPLE IRAs, Converting from a SIMPLE IRA. Amend federal tax return 2012 To Roth IRAs, Conversions Credits Retirement savings contributions credit, Retirement Savings Contributions Credit (Saver's Credit), How to figure and report the credit. Amend federal tax return 2012 D Death of beneficiary, Death of a beneficiary. Amend federal tax return 2012 Deductions Figuring reduced IRA deduction, How To Figure Your Reduced IRA Deduction Phaseout, Deduction Phaseout Traditional IRAs, How Much Can You Deduct?, Examples — Worksheet for Reduced IRA Deduction for 2013 Deemed IRAs, Reminders, Reminders Defined benefit plans, Defined benefit plan. Amend federal tax return 2012 Defined contribution plans, Defined contribution plan. Amend federal tax return 2012 Disabilities, persons with Early distributions to, Disabled. Amend federal tax return 2012 Distributions After required beginning date, Distributions after the required beginning date. Amend federal tax return 2012 Age 59 1/2 rule, Age 59½ Rule Beneficiaries (see Beneficiaries) Contributions in same year as, Both contributions for 2013 and distributions in 2013. Amend federal tax return 2012 Delivered outside U. Amend federal tax return 2012 S. Amend federal tax return 2012 , IRA distributions delivered outside the United States. Amend federal tax return 2012 Figuring nontaxable and taxable amounts, Figuring the Nontaxable and Taxable Amounts From individual retirement accounts, Distributions from individual retirement account. Amend federal tax return 2012 From individual retirement annuities, Distributions from individual retirement annuities. Amend federal tax return 2012 Fully or partly taxable, Distributions Fully or Partly Taxable Income from, Income from IRA distributions. Amend federal tax return 2012 Inherited IRAs (see Inherited IRAs) Insufficient, Excess Accumulations (Insufficient Distributions) Qualified charitable, Qualified charitable distributions. Amend federal tax return 2012 Qualified HSA funding, One-time qualified HSA funding distribution. Amend federal tax return 2012 Qualified reservist, Qualified reservist distributions. Amend federal tax return 2012 Roth IRAs, Are Distributions Taxable?, How Do You Figure the Taxable Part? Ordering rules for, Ordering Rules for Distributions Recapture amount, Figuring your recapture amount. Amend federal tax return 2012 SIMPLE IRAs, Are Distributions Taxable? Taxable status of, Are Distributions Taxable? Divorce Rollovers by former spouse, Distributions under divorce or similar proceedings (alternate payees). Amend federal tax return 2012 Transfers incident to, Transfers Incident To Divorce E Early distributions, What Acts Result in Penalties or Additional Taxes?, Early Distributions, Nondeductible contributions. Amend federal tax return 2012 (see also Penalties) Age 59 1/2 rule, Age 59½ Rule Defined, Early distributions defined. Amend federal tax return 2012 Disability exception, Disabled. Amend federal tax return 2012 First-time homebuyers, exception, First home. Amend federal tax return 2012 Higher education expenses, exception, Higher education expenses. Amend federal tax return 2012 Medical insurance, exception, Medical insurance. Amend federal tax return 2012 Roth IRAs, Additional Tax on Early Distributions SIMPLE IRAs, Additional Tax on Early Distributions Tax, Early Distributions Tax Unreimbursed medical expenses, exception, Unreimbursed medical expenses. Amend federal tax return 2012 Education expenses, Higher education expenses. Amend federal tax return 2012 Employer and employee association trust accounts, Employer and Employee Association Trust Accounts Employer plans Covered by, Covered by an employer retirement plan. Amend federal tax return 2012 Year(s) covered, For Which Year(s) Are You Covered? Employer retirement plans, Are You Covered by an Employer Plan? Defined benefit plans, Defined benefit plan. Amend federal tax return 2012 Defined contribution plans, Defined contribution plan. Amend federal tax return 2012 Effect of modified AGI on deduction (Table 1-2), Table 1-2. Amend federal tax return 2012 Effect of Modified AGI1 on Deduction if You Are Covered by a Retirement Plan at Work Limit if covered by, Limit if Covered by Employer Plan Prohibited transactions, Trust account set up by an employer or an employee association. Amend federal tax return 2012 Endowment contracts (see Annuity contracts) Estate tax, Estate tax. Amend federal tax return 2012 Deduction for inherited IRAs, Federal estate tax deduction. Amend federal tax return 2012 Excess accumulations, Excess Accumulations (Insufficient Distributions), Make up of shortfall in distribution. Amend federal tax return 2012 Roth IRAs, Distributions After Owner's Death Excess contributions, Excess Contributions Closed tax year, Closed tax year. Amend federal tax return 2012 Deducted in earlier year, Excess contribution deducted in an earlier year. Amend federal tax return 2012 Deducting in a later year, Deducting an Excess Contribution in a Later Year Due to incorrect rollover information, Excess due to incorrect rollover information. Amend federal tax return 2012 Recharacterizing, Recharacterizing excess contributions. Amend federal tax return 2012 Roth IRAs, What if You Contribute Too Much? Tax, Excess Contributions Tax Withdrawn after due date of return, Excess Contributions Withdrawn After Due Date of Return Withdrawn by due date of return, Excess Contributions Withdrawn by Due Date of Return Exempt transactions, Exempt Transactions Exxon Valdez settlement income, Rollover of Exxon Valdez Settlement Income , Rollover of Exxon Valdez Settlement Income F Failed financial institutions, Failed financial institutions. Amend federal tax return 2012 Federal judges, Federal judges. Amend federal tax return 2012 Fiduciaries Prohibited transactions, Fiduciary. Amend federal tax return 2012 Filing before IRA contribution is made, Filing before a contribution is made. Amend federal tax return 2012 Filing status, Filing Status Deduction phaseout and, Filing status. Amend federal tax return 2012 Firefighters, volunteer, Volunteer firefighters. Amend federal tax return 2012 First-time homebuyers, First home. Amend federal tax return 2012 Five-year rule (see 5-year rule) Form 1040 Modified AGI calculation from, Form 1040. Amend federal tax return 2012 , Form 1040NR. Amend federal tax return 2012 Form 1040A Modified AGI calculation from, Form 1040A. Amend federal tax return 2012 Form 1099-R, Reporting and Withholding Requirements for Taxable Amounts Distribution code 1 used on, Form 5329 not required. Amend federal tax return 2012 Letter codes used on, Letter codes. Amend federal tax return 2012 Number codes used on, Number codes. Amend federal tax return 2012 Withdrawal of excess contribution, Form 1099-R. Amend federal tax return 2012 Form 5329, Additional 10% tax, Reporting the tax. Amend federal tax return 2012 , Reporting Additional Taxes Recapture tax, Recapture tax for changes in distribution method under equal payment exception. Amend federal tax return 2012 Form 8606, Form 8606. Amend federal tax return 2012 , Form 8606. Amend federal tax return 2012 , Reporting your nontaxable distribution on Form 8606. Amend federal tax return 2012 , Figuring the Nontaxable and Taxable Amounts Failure to file, penalty, Penalty for failure to file Form 8606. Amend federal tax return 2012 Form 8880, How to figure and report the credit. Amend federal tax return 2012 Form W-2 Employer retirement plans, Are You Covered by an Employer Plan? Free tax services, Free help with your tax return. Amend federal tax return 2012 Frozen deposits, Frozen deposit. Amend federal tax return 2012 Full-time student Retirement savings contributions credit, Full-time student. Amend federal tax return 2012 H Help (see Tax help) Higher education expenses, Higher education expenses. Amend federal tax return 2012 How to Set up an IRA, How Can a Traditional IRA Be Opened? Treat withdrawn contributions, How to treat withdrawn contributions. Amend federal tax return 2012 HSA funding distributions, qualified, One-time qualified HSA funding distribution. Amend federal tax return 2012 I Individual retirement accounts, Individual Retirement Account Distributions from, Distributions from individual retirement account. Amend federal tax return 2012 Individual retirement annuities, Individual Retirement Annuity Distributions from, Distributions from individual retirement annuities. Amend federal tax return 2012 Individual retirement arrangements (IRAs) How to set up, How Can a Traditional IRA Be Opened? When to set up, When Can a Traditional IRA Be Opened? Individual retirement bonds, Individual Retirement Bonds Cashing in, Cashing in retirement bonds. Amend federal tax return 2012 Inherited IRAs, What if You Inherit an IRA?, More information. Amend federal tax return 2012 Rollovers, Inherited IRAs. Amend federal tax return 2012 Insufficient distributions, Excess Accumulations (Insufficient Distributions) Interest on IRA, Reminders Investment in collectibles Collectibles defined, Collectibles. Amend federal tax return 2012 Exception, Exception. Amend federal tax return 2012 K Kay Bailey Hutchison Spousal IRAs Contribution limits, Kay Bailey Hutchison Spousal IRA Limit Deductions, Kay Bailey Hutchison Spousal IRA. Amend federal tax return 2012 Roth IRA contribution limits, Can you contribute to a Roth IRA for your spouse? Keogh plans Rollovers from, Keogh plans and rollovers. Amend federal tax return 2012 L Last-in first-out rule, Last-in first-out rule. Amend federal tax return 2012 Life expectancy, Life expectancy. Amend federal tax return 2012 Life insurance, Life insurance contract. Amend federal tax return 2012 Losses Roth IRAs, Recognizing Losses on Investments Traditional IRAs, Recognizing Losses on Traditional IRA Investments M Marital status, change in, Change in marital status. Amend federal tax return 2012 Matching contributions (SIMPLE), Matching contributions. Amend federal tax return 2012 Medical expenses, unreimbursed, Unreimbursed medical expenses. Amend federal tax return 2012 Medical insurance, Medical insurance. Amend federal tax return 2012 Military death gratuities, Military Death Gratuities and Servicemembers' Group Life Insurance (SGLI) Payments Minimum distribution (see Required minimum distribution) Missing children, photographs of, Reminders Modified adjusted gross income (AGI) Employer retirement plan coverage and deduction (Table 1-2), Table 1-2. Amend federal tax return 2012 Effect of Modified AGI1 on Deduction if You Are Covered by a Retirement Plan at Work Figuring (Worksheet 1-1), Worksheet 1-1. Amend federal tax return 2012 Figuring Your Modified AGI No employer retirement plan coverage and deduction (Table 1-3), Table 1-3. Amend federal tax return 2012 Effect of Modified AGI1 on Deduction if You Are NOT Covered by a Retirement Plan at Work Roth IRAs, Modified AGI. Amend federal tax return 2012 Effect on contribution amount (Table 2-1), Table 2-1. Amend federal tax return 2012 Effect of Modified AGI on Roth IRA Contribution More than one beneficiary, More than one beneficiary. Amend federal tax return 2012 More than one IRA, More than one IRA. Amend federal tax return 2012 Recharacterization, More than one IRA. Amend federal tax return 2012 Required minimum distribution, More than one IRA. Amend federal tax return 2012 N Nondeductible contributions, Nondeductible Contributions, Nondeductible contributions. Amend federal tax return 2012 Failure to report, Failure to report nondeductible contributions. Amend federal tax return 2012 Overstatement penalty, Penalty for overstatement. Amend federal tax return 2012 Notice Qualified employer plan to provide prior to rollover distribution, Written explanation to recipients. Amend federal tax return 2012 Rollovers, Rollover notice. Amend federal tax return 2012 P Partial rollovers, Partial rollovers. Amend federal tax return 2012 , Partial rollover. Amend federal tax return 2012 Penalties, What Acts Result in Penalties or Additional Taxes?, Form 5329 not required. Amend federal tax return 2012 Early distributions, Early Distributions, Nondeductible contributions. Amend federal tax return 2012 Excess accumulations, Excess Accumulations (Insufficient Distributions), Make up of shortfall in distribution. Amend federal tax return 2012 Excess contributions, Excess Contributions Roth IRAs, What if You Contribute Too Much? Exempt transactions, Exempt Transactions, Services received at reduced or no cost. Amend federal tax return 2012 Failure to file Form 8606, Penalty for failure to file Form 8606. Amend federal tax return 2012 Overstatement of nondeductible contributions, Penalty for overstatement. Amend federal tax return 2012 Prohibited transactions, Prohibited Transactions, Services received at reduced or no cost. Amend federal tax return 2012 Reporting, Reporting Additional Taxes SIMPLE IRAs, Additional Tax on Early Distributions Phaseout of deduction, Deduction Phaseout Pledging account as security, Pledging an account as security. Amend federal tax return 2012 Prohibited transactions, Prohibited Transactions, Services received at reduced or no cost. Amend federal tax return 2012 Taxes on, Taxes on prohibited transactions. Amend federal tax return 2012 Publications (see Tax help) Q Qualified charitable distributions, Qualified charitable distributions. Amend federal tax return 2012 Qualified domestic relations orders (QDROs), Qualified domestic relations order. Amend federal tax return 2012 Qualified settlement income, Rollover of Exxon Valdez Settlement Income , Rollover of Exxon Valdez Settlement Income R Recapture tax Changes in distribution method, Recapture tax for changes in distribution method under equal payment exception. Amend federal tax return 2012 Receivership distributions, Receivership distributions. Amend federal tax return 2012 Recharacterization, Recharacterizations, More than one IRA. Amend federal tax return 2012 Determining amount of net income due to contribution and total amount to be recharacterized (Worksheet 1-3), Worksheet 1-3. Amend federal tax return 2012 Determining the Amount of Net Income Due To an IRA Contribution and Total Amount To Be Recharacterized Reporting, Reporting a Recharacterization SIMPLE employer contributions, Recharacterizing employer contributions. Amend federal tax return 2012 Timing of, Timing. Amend federal tax return 2012 Reconversion, Reconversions Recordkeeping requirements Traditional IRAs, Nondeductible Contributions Reporting Additional taxes, Reporting Additional Taxes Deductible contributions, Reporting Deductible Contributions Nontaxable distribution on Form 8606, Reporting your nontaxable distribution on Form 8606. Amend federal tax return 2012 Recharacterization, Reporting a Recharacterization Rollovers From employer plans, Reporting rollovers from employer plans. Amend federal tax return 2012 From IRAs, Reporting rollovers from IRAs. Amend federal tax return 2012 Taxable amounts, Reporting and Withholding Requirements for Taxable Amounts Taxable distributions, Reporting taxable distributions on your return. Amend federal tax return 2012 Required beginning date, Distributions after the required beginning date. Amend federal tax return 2012 Required minimum distribution, Reminders, When Must You Withdraw Assets? (Required Minimum Distributions), Annuity distributions from an insurance company. Amend federal tax return 2012 Distribution period, Distribution period. Amend federal tax return 2012 During lifetime, Distributions during your lifetime. Amend federal tax return 2012 Figuring, Figuring the Owner's Required Minimum Distribution For beneficiary, Figuring the Beneficiary's Required Minimum Distribution Table to use, Which Table Do You Use To Determine Your Required Minimum Distribution? In year of owner's death, Distributions in the year of the owner's death. Amend federal tax return 2012 Installments allowed, Installments allowed. Amend federal tax return 2012 More than one IRA, More than one IRA. Amend federal tax return 2012 Sole beneficiary spouse who is more than 10 years younger, Sole beneficiary spouse who is more than 10 years younger. Amend federal tax return 2012 Reservists, Reservists. Amend federal tax return 2012 Qualified reservist distribution, Qualified reservist distributions. Amend federal tax return 2012 Qualified reservist repayments, Qualified reservist repayments. Amend federal tax return 2012 Retirement bonds (see Individual retirement bonds) Retirement savings contributions credit, Retirement Savings Contributions Credit (Saver's Credit), How to figure and report the credit. Amend federal tax return 2012 Rollovers, Rollovers, Reporting rollovers from employer plans. Amend federal tax return 2012 Airline payments, Rollover of Airline Payments Amount, Amount. Amend federal tax return 2012 Choosing an option (Table 1-5), Table 1-5. Amend federal tax return 2012 Comparison of Payment to You Versus Direct Rollover Completed after 60-day period, Rollovers completed after the 60-day period. Amend federal tax return 2012 Conduit IRAs, IRA as a holding account (conduit IRA) for rollovers to other eligible plans. Amend federal tax return 2012 Direct rollover option, Direct rollover option. Amend federal tax return 2012 Extension of period, Extension of rollover period. Amend federal tax return 2012 From bond purchase plan, Rollover from bond purchase plan. Amend federal tax return 2012 From employer's plan into a Roth IRA, Rollover From Employer's Plan Into a Roth IRA From employer's plan into an IRA, Rollover From Employer's Plan Into an IRA From Keogh plans, Keogh plans and rollovers. Amend federal tax return 2012 From one IRA into another, Rollover From One IRA Into Another From Roth IRAs, Rollover From a Roth IRA From traditional IRA, Kinds of rollovers from a traditional IRA. Amend federal tax return 2012 Inherited IRAs, Inherited IRAs. Amend federal tax return 2012 Nonspouse beneficiary, Rollover by nonspouse beneficiary. Amend federal tax return 2012 Notice, Rollover notice. Amend federal tax return 2012 Partial, Partial rollovers. Amend federal tax return 2012 , Partial rollover. Amend federal tax return 2012 SIMPLE IRAs, Rollovers and Transfers Exception Tax treatment of rollover from traditional IRA to eligible retirement plan other than an IRA, Tax treatment of a rollover from a traditional IRA to an eligible retirement plan other than an IRA. Amend federal tax return 2012 Time limit, Time Limit for Making a Rollover Contribution To Roth IRAs, Conversion methods. Amend federal tax return 2012 To traditional IRA, Kinds of rollovers to a traditional IRA. Amend federal tax return 2012 Waiting period between, Waiting period between rollovers. Amend federal tax return 2012 , No waiting period between rollovers. Amend federal tax return 2012 Withholding (see Withholding) Roth IRAs, Roth IRAs, Distributions After Owner's Death Age limit, Is there an age limit for contributions? Contribution limit reduced, Contribution limit reduced. Amend federal tax return 2012 Contributions, Can You Contribute to a Roth IRA?, Applying excess contributions. Amend federal tax return 2012 Timing of, When Can You Make Contributions? To traditional IRAs and to Roth IRAs, Roth IRAs and traditional IRAs. Amend federal tax return 2012 Conversion, Converting From Any Traditional IRA Into a Roth IRA, Conversion by rollover from traditional to Roth IRA. Amend federal tax return 2012 , Recharacterizing to a SEP IRA or SIMPLE IRA. Amend federal tax return 2012 , Conversions Defined, What Is a Roth IRA? Distributions, Are Distributions Taxable?, How Do You Figure the Taxable Part? After death of owner, Distributions After Owner's Death Insufficient, Distributions After Owner's Death Ordering rules for, Ordering Rules for Distributions Early distributions, Additional Tax on Early Distributions Excess accumulations, Distributions After Owner's Death Excess contributions, What if You Contribute Too Much? Figuring taxable part, How Do You Figure the Taxable Part? Losses, Recognizing Losses on Investments Modified AGI Effect on contribution amount (Table 2-1), Table 2-1. Amend federal tax return 2012 Effect of Modified AGI on Roth IRA Contribution Figuring (Worksheet 2-1), Worksheet 2-1. Amend federal tax return 2012 Modified Adjusted Gross Income for Roth IRA Purposes Rollovers from, Rollover From a Roth IRA Setting up, When Can a Roth IRA Be Opened? Spouse, Can you contribute to a Roth IRA for your spouse? Traditional IRAs converted into, Converting From Any Traditional IRA Into a Roth IRA Withdrawing or using assets, Must You Withdraw or Use Assets? S Salary reduction arrangement, What Is a SIMPLE Plan? Savings Incentive Match Plans for Employees (see SIMPLE IRAs) Section 501(c)(18) plan, General Limit, Kay Bailey Hutchison Spousal IRA Limit Self-employed persons Deductible contributions, Self-employed. Amend federal tax return 2012 Income of, Self-employment income. Amend federal tax return 2012 SIMPLE plans, Self-employed individual. Amend federal tax return 2012 SEP IRAs Recharacterizing to, Recharacterizing to a SEP IRA or SIMPLE IRA. Amend federal tax return 2012 Separated taxpayers Filing status of, Lived apart from spouse. Amend federal tax return 2012 Servicemembers group life insurance, Military Death Gratuities and Servicemembers' Group Life Insurance (SGLI) Payments Services received at reduced or no cost, Services received at reduced or no cost. Amend federal tax return 2012 SIMPLE IRAs, Savings Incentive Match Plans for Employees (SIMPLE), Two-year rule. Amend federal tax return 2012 Contributions, How Are Contributions Made?, How Much Can Be Contributed on Your Behalf? Conversion from, Converting from a SIMPLE IRA. Amend federal tax return 2012 Distributions, Are Distributions Taxable? Early distributions, , Additional Tax on Early Distributions Eligible employees, Eligible Employees Penalties, Additional Tax on Early Distributions Recharacterizing to, Recharacterizing to a SEP IRA or SIMPLE IRA. Amend federal tax return 2012 Rollovers, Rollovers and Transfers Exception Salary reduction contribution limits, Salary reduction contributions limit. Amend federal tax return 2012 Self-employed persons, Self-employed individual. Amend federal tax return 2012 SIMPLE plan, defined, What Is a SIMPLE Plan? Traditional IRA, mistakenly moved to, Traditional IRA mistakenly moved to SIMPLE IRA. Amend federal tax return 2012 , Traditional IRA mistakenly moved to SIMPLE IRA. Amend federal tax return 2012 Two-year rule, Two-year rule. Amend federal tax return 2012 Withdrawing or using assets, When Can You Withdraw or Use Assets? Simplified employee pensions (SEPs), Simplified Employee Pension (SEP) Social Security recipients, Social Security Recipients Spousal IRAs (see Kay Bailey Hutchison Spousal IRAs or Inherited IRAs) Students Education expenses, Higher education expenses. Amend federal tax return 2012 Retirement savings contributions credit, Full-time student. Amend federal tax return 2012 Surviving spouse, Surviving spouse. Amend federal tax return 2012 , Surviving spouse. Amend federal tax return 2012 Rollovers by, Distributions received by a surviving spouse. Amend federal tax return 2012 T Tables Modified AGI Employer retirement plan coverage and deduction (Table 1-2), Table 1-2. Amend federal tax return 2012 Effect of Modified AGI1 on Deduction if You Are Covered by a Retirement Plan at Work No employer retirement plan coverage and deduction (Table 1-3), Table 1-3. Amend federal tax return 2012 Effect of Modified AGI1 on Deduction if You Are NOT Covered by a Retirement Plan at Work Roth IRAs, effect on contribution (Table 2-1), Table 2-1. Amend federal tax return 2012 Effect of Modified AGI on Roth IRA Contribution Rollover vs. Amend federal tax return 2012 direct payment to taxpayer (Table 1-5), Table 1-5. Amend federal tax return 2012 Comparison of Payment to You Versus Direct Rollover Using this publication (Table I-1), Table I-1. Amend federal tax return 2012 Using This Publication Tax advantages of IRAs, What are some tax advantages of an IRA? Tax credits Retirement savings contributions credit, Retirement Savings Contributions Credit (Saver's Credit), How to figure and report the credit. Amend federal tax return 2012 Tax help, How To Get Tax Help Tax year, Tax year. Amend federal tax return 2012 Tax-sheltered annuities Rollovers from, Distribution from a tax-sheltered annuity. Amend federal tax return 2012 Traditional IRAs, Traditional IRAs, Form 5329 not required. Amend federal tax return 2012 Age 59 1/2 rule, Age 59½ Rule Contribution limits, How Much Can Be Contributed?, More Than Maximum Contributions Contributions, How Much Can Be Contributed?, More Than Maximum Contributions Due date, Contributions must be made by due date. Amend federal tax return 2012 To Roth IRAs and to traditional IRAs, Roth IRAs and traditional IRAs. Amend federal tax return 2012 Converting into Roth IRA, Converting From Any Traditional IRA Into a Roth IRA Cost basis, Cost basis. Amend federal tax return 2012 Deductions, How Much Can You Deduct?, Examples — Worksheet for Reduced IRA Deduction for 2013 Defined, Introduction Disclosures, Required Disclosures Excess contributions, Excess Contributions Inherited IRAs, What if You Inherit an IRA?, More information. Amend federal tax return 2012 Loss of IRA status, Loss of IRA status. Amend federal tax return 2012 Losses, Recognizing Losses on Traditional IRA Investments Mistakenly moved to SIMPLE IRA, Traditional IRA mistakenly moved to SIMPLE IRA. Amend federal tax return 2012 , Traditional IRA mistakenly moved to SIMPLE IRA. Amend federal tax return 2012 Recordkeeping, Nondeductible Contributions Reduced IRA deduction for 2013, Examples — Worksheet for Reduced IRA Deduction for 2013 Rollovers (see Rollovers) Setting up, Who Can Open a Traditional IRA?, Required Disclosures Social Security recipients, Social Security Recipients Transfers, Can You Move Retirement Plan Assets? Types of, Kinds of traditional IRAs. Amend federal tax return 2012 Withdrawing or using assets, When Can You Withdraw or Use Assets?, Excess Contributions Tax Transfers, Can You Move Retirement Plan Assets? Divorce, Transfers Incident To Divorce To Roth IRAs, Transfers to Roth IRAs. Amend federal tax return 2012 , Can You Move Amounts Into a Roth IRA? Trustee to trustee, Trustee-to-Trustee Transfer, Conversion methods. Amend federal tax return 2012 Trustee-to-trustee transfers, Trustee-to-Trustee Transfer To Roth IRAs, Conversion methods. Amend federal tax return 2012 Trustees' fees, Trustees' fees. Amend federal tax return 2012 , Trustees' fees. Amend federal tax return 2012 Trusts As beneficiary, Trust as beneficiary. Amend federal tax return 2012 TTY/TDD information, How To Get Tax Help Two-year rule SIMPLE IRAs, Two-year rule. Amend federal tax return 2012 U Unreimbursed medical expenses, Unreimbursed medical expenses. Amend federal tax return 2012 V Volunteer firefighters, Volunteer firefighters. Amend federal tax return 2012 W Withdrawing or using assets Contribution withdrawal, before due date of return, Contributions Returned Before Due Date of Return Roth IRAs, Must You Withdraw or Use Assets? SIMPLE IRAs, When Can You Withdraw or Use Assets? Traditional IRAs, When Can You Withdraw or Use Assets?, Excess Contributions Tax Withholding, Reporting and Withholding Requirements for Taxable Amounts, Withholding. Amend federal tax return 2012 Direct rollover option, Withholding. Amend federal tax return 2012 Eligible rollover distribution paid to taxpayer, Withholding requirement. Amend federal tax return 2012 Worksheets Figuring amount of net income due to IRA contribution and total amount to be recharacterized (Worksheet 1-3), Worksheet 1-3. Amend federal tax return 2012 Determining the Amount of Net Income Due To an IRA Contribution and Total Amount To Be Recharacterized Figuring modified AGI (Worksheet 1-1), Worksheet 1-1. Amend federal tax return 2012 Figuring Your Modified AGI Roth IRAs Figuring modified AGI (Worksheet 2-1), Worksheet 2-1. Amend federal tax return 2012 Modified Adjusted Gross Income for Roth IRA Purposes Prev  Up     Home   More Online Publications
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The Amend Federal Tax Return 2012

Amend federal tax return 2012 4. Amend federal tax return 2012   Sales and Trades of Investment Property Table of Contents IntroductionNominees. Amend federal tax return 2012 Topics - This chapter discusses: Useful Items - You may want to see: What Is a Sale or Trade?Dividend versus sale or trade. Amend federal tax return 2012 Worthless Securities Constructive Sales of Appreciated Financial Positions Section 1256 Contracts Marked to Market Basis of Investment PropertyCost Basis Basis Other Than Cost Adjusted Basis Stocks and Bonds How To Figure Gain or LossFair market value. Amend federal tax return 2012 Debt paid off. Amend federal tax return 2012 Payment of cash. Amend federal tax return 2012 Special Rules for Mutual Funds Nontaxable TradesLike-Kind Exchanges Corporate Stocks Exchange of Shares In One Mutual Fund For Shares In Another Mutual Fund Insurance Policies and Annuities U. Amend federal tax return 2012 S. Amend federal tax return 2012 Treasury Notes or Bonds Transfers Between Spouses Related Party TransactionsGain on Sale or Trade of Depreciable Property Capital Gains and LossesCapital or Ordinary Gain or Loss Holding Period Nonbusiness Bad Debts Short Sales Wash Sales Options Straddles Sales of Stock to ESOPs or Certain Cooperatives Rollover of Gain From Publicly Traded Securities Gains on Qualified Small Business Stock Exclusion of Gain From DC Zone Assets Reporting Capital Gains and LossesException 1. Amend federal tax return 2012 Exception 2. Amend federal tax return 2012 Section 1256 contracts and straddles. Amend federal tax return 2012 Market discount bonds. Amend federal tax return 2012 File Form 1099-B or Form 1099-S with the IRS. Amend federal tax return 2012 Capital Losses Capital Gain Tax Rates Special Rules for Traders in SecuritiesHow To Report Introduction This chapter explains the tax treatment of sales and trades of investment property. Amend federal tax return 2012 Investment property. Amend federal tax return 2012   This is property that produces investment income. Amend federal tax return 2012 Examples include stocks, bonds, and Treasury bills and notes. Amend federal tax return 2012 Property used in a trade or business is not investment property. Amend federal tax return 2012 Form 1099-B. Amend federal tax return 2012   If you sold property such as stocks, bonds, mutual funds, or certain commodities through a broker during the year, you should receive, for each sale, a Form 1099-B, Proceeds From Broker and Barter Exchange Transactions, or substitute statement, from the broker. Amend federal tax return 2012 You should receive the statement by February 15 of the next year. Amend federal tax return 2012 It will show the gross proceeds from the sale. Amend federal tax return 2012 The IRS will also get a copy of Form 1099-B from the broker. Amend federal tax return 2012   Use Form 1099-B (or substitute statement received from your broker) to complete Form 8949. Amend federal tax return 2012 If you sold a covered security in 2013, your broker will send you a Form 1099-B (or substitute statement) that shows your basis. Amend federal tax return 2012 This will help you complete Form 8949. Amend federal tax return 2012 Generally, a covered security is a security you acquired after 2010, with certain exceptions explained in the Instructions for Form 8949. Amend federal tax return 2012    For more information on Form 8949 and Schedule D (Form 1040), see Reporting Capital Gains and Losses in this chapter. Amend federal tax return 2012 Also see the Instructions for Form 8949 and the Instructions for Schedule D (Form 1040). Amend federal tax return 2012 Nominees. Amend federal tax return 2012   If someone receives gross proceeds as a nominee for you, that person will give you a Form 1099-B, which will show gross proceeds received on your behalf. Amend federal tax return 2012   If you receive a Form 1099-B that includes gross proceeds belonging to another person, see Nominees , later under Reporting Capital Gains and Losses for more information. Amend federal tax return 2012 Other property transactions. Amend federal tax return 2012   Certain transfers of property are discussed in other IRS publications. Amend federal tax return 2012 These include: Sale of your main home, discussed in Publication 523, Selling Your Home; Installment sales, covered in Publication 537; Various types of transactions involving business property, discussed in Publication 544, Sales and Other Dispositions of Assets; Transfers of property at death, covered in Publication 559; and Disposition of an interest in a passive activity, discussed in Publication 925. Amend federal tax return 2012 Topics - This chapter discusses: What Is a Sale or Trade? , Basis of Investment Property , Adjusted Basis , How To Figure Gain or Loss , Nontaxable trades , Transfers Between Spouses , Related Party Transactions , Capital Gains and Losses , Reporting Capital Gains and Losses , and Special Rules for Traders in Securities . Amend federal tax return 2012 Useful Items - You may want to see: Publication 551 Basis of Assets Form (and Instructions) Schedule D (Form 1040) Capital Gains and Losses 6781 Gains and Losses From Section 1256 Contracts and Straddles 8582 Passive Activity Loss Limitations 8824 Like-Kind Exchanges 8949 Sales and Other Dispositions of Capital Assets See chapter 5, How To Get Tax Help , for information about getting these publications and forms. Amend federal tax return 2012 What Is a Sale or Trade? This section explains what is a sale or trade. Amend federal tax return 2012 It also explains certain transactions and events that are treated as sales or trades. Amend federal tax return 2012 A sale is generally a transfer of property for money or a mortgage, note, or other promise to pay money. Amend federal tax return 2012 A trade is a transfer of property for other property or services, and may be taxed in the same way as a sale. Amend federal tax return 2012 Sale and purchase. Amend federal tax return 2012   Ordinarily, a transaction is not a trade when you voluntarily sell property for cash and immediately buy similar property to replace it. Amend federal tax return 2012 The sale and purchase are two separate transactions. Amend federal tax return 2012 But see Like-Kind Exchanges under Nontaxable Trades, later. Amend federal tax return 2012 Redemption of stock. Amend federal tax return 2012   A redemption of stock is treated as a sale or trade and is subject to the capital gain or loss provisions unless the redemption is a dividend or other distribution on stock. Amend federal tax return 2012 Dividend versus sale or trade. Amend federal tax return 2012   Whether a redemption is treated as a sale, trade, dividend, or other distribution depends on the circumstances in each case. Amend federal tax return 2012 Both direct and indirect ownership of stock will be considered. Amend federal tax return 2012 The redemption is treated as a sale or trade of stock if: The redemption is not essentially equivalent to a dividend — see Dividends and Other Distributions in chapter 1, There is a substantially disproportionate redemption of stock, There is a complete redemption of all the stock of the corporation owned by the shareholder, or The redemption is a distribution in partial liquidation of a corporation. Amend federal tax return 2012 Redemption or retirement of bonds. Amend federal tax return 2012   A redemption or retirement of bonds or notes at their maturity generally is treated as a sale or trade. Amend federal tax return 2012 See Stocks, stock rights, and bonds and Discounted Debt Instruments under Capital or Ordinary Gain or Loss, later. Amend federal tax return 2012   In addition, a significant modification of a bond is treated as a trade of the original bond for a new bond. Amend federal tax return 2012 For details, see Regulations section 1. Amend federal tax return 2012 1001-3. Amend federal tax return 2012 Surrender of stock. Amend federal tax return 2012   A surrender of stock by a dominant shareholder who retains ownership of more than half of the corporation's voting shares is treated as a contribution to capital rather than as an immediate loss deductible from taxable income. Amend federal tax return 2012 The surrendering shareholder must reallocate his or her basis in the surrendered shares to the shares he or she retains. Amend federal tax return 2012 Trade of investment property for an annuity. Amend federal tax return 2012   The transfer of investment property to a corporation, trust, fund, foundation, or other organization, in exchange for a fixed annuity contract that will make guaranteed annual payments to you for life, is a taxable trade. Amend federal tax return 2012 If the present value of the annuity is more than your basis in the property traded, you have a taxable gain in the year of the trade. Amend federal tax return 2012 Figure the present value of the annuity according to factors used by commercial insurance companies issuing annuities. Amend federal tax return 2012 Transfer by inheritance. Amend federal tax return 2012   The transfer of property of a decedent to the executor or administrator of the estate, or to the heirs or beneficiaries, is not a sale or other disposition. Amend federal tax return 2012 No taxable gain or deductible loss results from the transfer. Amend federal tax return 2012 Termination of certain rights and obligations. Amend federal tax return 2012   The cancellation, lapse, expiration, or other termination of a right or obligation (other than a securities futures contract) with respect to property that is a capital asset (or that would be a capital asset if you acquired it) is treated as a sale. Amend federal tax return 2012 Any gain or loss is treated as a capital gain or loss. Amend federal tax return 2012   This rule does not apply to the retirement of a debt instrument. Amend federal tax return 2012 See Redemption or retirement of bonds , earlier. Amend federal tax return 2012 Worthless Securities Stocks, stock rights, and bonds (other than those held for sale by a securities dealer) that became completely worthless during the tax year are treated as though they were sold on the last day of the tax year. Amend federal tax return 2012 This affects whether your capital loss is long term or short term. Amend federal tax return 2012 See Holding Period , later. Amend federal tax return 2012 Worthless securities also include securities that you abandon after March 12, 2008. Amend federal tax return 2012 To abandon a security, you must permanently surrender and relinquish all rights in the security and receive no consideration in exchange for it. Amend federal tax return 2012 All the facts and circumstances determine whether the transaction is properly characterized as an abandonment or other type of transaction, such as an actual sale or exchange, contribution to capital, dividend, or gift. Amend federal tax return 2012 If you are a cash basis taxpayer and make payments on a negotiable promissory note that you issued for stock that became worthless, you can deduct these payments as losses in the years you actually make the payments. Amend federal tax return 2012 Do not deduct them in the year the stock became worthless. Amend federal tax return 2012 How to report loss. Amend federal tax return 2012   Report worthless securities in Form 8949, Part I or Part II, whichever applies. Amend federal tax return 2012    Report your worthless securities transactions on Form 8949 with the correct box checked for these transactions. Amend federal tax return 2012 See Form 8949 and the Instructions for Form 8949. Amend federal tax return 2012 Filing a claim for refund. Amend federal tax return 2012   If you do not claim a loss for a worthless security on your original return for the year it becomes worthless, you can file a claim for a credit or refund due to the loss. Amend federal tax return 2012 You must use Form 1040X, Amended U. Amend federal tax return 2012 S. Amend federal tax return 2012 Individual Income Tax Return, to amend your return for the year the security became worthless. Amend federal tax return 2012 You must file it within 7 years from the date your original return for that year had to be filed, or 2 years from the date you paid the tax, whichever is later. Amend federal tax return 2012 (Claims not due to worthless securities or bad debts generally must be filed within 3 years from the date a return is filed, or 2 years from the date the tax is paid, whichever is later. Amend federal tax return 2012 ) For more information about filing a claim, see Publication 556. Amend federal tax return 2012 Constructive Sales of Appreciated Financial Positions You are treated as having made a constructive sale when you enter into certain transactions involving an appreciated financial position (defined later) in stock, a partnership interest, or certain debt instruments. Amend federal tax return 2012 You must recognize gain as if the position were disposed of at its fair market value on the date of the constructive sale. Amend federal tax return 2012 This gives you a new holding period for the position that begins on the date of the constructive sale. Amend federal tax return 2012 Then, when you close the transaction, you reduce your gain (or increase your loss) by the gain recognized on the constructive sale. Amend federal tax return 2012 Constructive sale. Amend federal tax return 2012   You are treated as having made a constructive sale of an appreciated financial position if you: Enter into a short sale of the same or substantially identical property, Enter into an offsetting notional principal contract relating to the same or substantially identical property, Enter into a futures or forward contract to deliver the same or substantially identical property (including a forward contract that provides for cash settlement), or Acquire the same or substantially identical property (if the appreciated financial position is a short sale, an offsetting notional principal contract, or a futures or forward contract). Amend federal tax return 2012   You are also treated as having made a constructive sale of an appreciated financial position if a person related to you enters into a transaction described above with a view toward avoiding the constructive sale treatment. Amend federal tax return 2012 For this purpose, a related person is any related party described under Related Party Transactions , later in this chapter. Amend federal tax return 2012 Exception for nonmarketable securities. Amend federal tax return 2012   You are not treated as having made a constructive sale solely because you entered into a contract for sale of any stock, debt instrument, or partnership interest that is not a marketable security if it settles within 1 year of the date you enter into it. Amend federal tax return 2012 Exception for certain closed transactions. Amend federal tax return 2012   Do not treat a transaction as a constructive sale if all of the following are true. Amend federal tax return 2012 You closed the transaction on or before the 30th day after the end of your tax year. Amend federal tax return 2012 You held the appreciated financial position throughout the 60-day period beginning on the date you closed the transaction. Amend federal tax return 2012 Your risk of loss was not reduced at any time during that 60-day period by holding certain other positions. Amend federal tax return 2012   If a closed transaction is reestablished in a substantially similar position during the 60-day period beginning on the date the first transaction was closed, this exception still applies if the reestablished position is closed before the 30th day after the end of your tax year in which the first transaction was closed and, after that closing, (2) and (3) above are true. Amend federal tax return 2012   This exception also applies to successive short sales of an entire appreciated financial position. Amend federal tax return 2012 For more information, see Revenue Ruling 2003-1 in Internal Revenue Bulletin 2003-3. Amend federal tax return 2012 This bulletin is available at www. Amend federal tax return 2012 irs. Amend federal tax return 2012 gov/pub/irs-irbs/irb03-03. Amend federal tax return 2012 pdf. Amend federal tax return 2012 Appreciated financial position. Amend federal tax return 2012   This is any interest in stock, a partnership interest, or a debt instrument (including a futures or forward contract, a short sale, or an option) if disposing of the interest would result in a gain. Amend federal tax return 2012 Exceptions. Amend federal tax return 2012   An appreciated financial position does not include the following. Amend federal tax return 2012 Any position from which all of the appreciation is accounted for under marked-to-market rules, including section 1256 contracts (described later under Section 1256 Contracts Marked to Market ). Amend federal tax return 2012 Any position in a debt instrument if: The position unconditionally entitles the holder to receive a specified principal amount, The interest payments (or other similar amounts) with respect to the position are payable at a fixed rate or a variable rate described in Regulations section 1. Amend federal tax return 2012 860G-1(a)(3), and The position is not convertible, either directly or indirectly, into stock of the issuer (or any related person). Amend federal tax return 2012 Any hedge with respect to a position described in (2). Amend federal tax return 2012 Certain trust instruments treated as stock. Amend federal tax return 2012   For the constructive sale rules, an interest in an actively traded trust is treated as stock unless substantially all of the value of the property held by the trust is debt that qualifies for the exception to the definition of an appreciated financial position (explained in (2) above). Amend federal tax return 2012 Sale of appreciated financial position. Amend federal tax return 2012   A transaction treated as a constructive sale of an appreciated financial position is not treated as a constructive sale of any other appreciated financial position, as long as you continue to hold the original position. Amend federal tax return 2012 However, if you hold another appreciated financial position and dispose of the original position before closing the transaction that resulted in the constructive sale, you are treated as if, at the same time, you constructively sold the other appreciated financial position. Amend federal tax return 2012 Section 1256 Contracts Marked to Market If you hold a section 1256 contract at the end of the tax year, you generally must treat it as sold at its fair market value on the last business day of the tax year. Amend federal tax return 2012 Section 1256 Contract A section 1256 contract is any: Regulated futures contract, Foreign currency contract, Nonequity option, Dealer equity option, or Dealer securities futures contract. Amend federal tax return 2012 Exceptions. Amend federal tax return 2012   A section 1256 contract does not include: Interest rate swaps, Currency swaps, Basis swaps, Interest rate caps, Interest rate floors, Commodity swaps, Equity swaps, Equity index swaps, Credit default swaps, or Similar agreements. Amend federal tax return 2012 For more details, including definitions of these terms, see section 1256. Amend federal tax return 2012 Regulated futures contract. Amend federal tax return 2012   This is a contract that: Provides that amounts which must be deposited to, or can be withdrawn from, your margin account depend on daily market conditions (a system of marking to market), and Is traded on, or subject to the rules of, a qualified board of exchange. Amend federal tax return 2012 A qualified board of exchange is a domestic board of trade designated as a contract market by the Commodity Futures Trading Commission, any board of trade or exchange approved by the Secretary of the Treasury, or a national securities exchange registered with the Securities and Exchange Commission. Amend federal tax return 2012 Foreign currency contract. Amend federal tax return 2012   This is a contract that: Requires delivery of a foreign currency that has positions traded through regulated futures contracts (or settlement of which depends on the value of that type of foreign currency), Is traded in the interbank market, and Is entered into at arm's length at a price determined by reference to the price in the interbank market. Amend federal tax return 2012   Bank forward contracts with maturity dates longer than the maturities ordinarily available for regulated futures contracts are considered to meet the definition of a foreign currency contract if the above three conditions are satisfied. Amend federal tax return 2012   Special rules apply to certain foreign currency transactions. Amend federal tax return 2012 These transactions may result in ordinary gain or loss treatment. Amend federal tax return 2012 For details, see Internal Revenue Code section 988 and Regulations sections 1. Amend federal tax return 2012 988-1(a)(7) and 1. Amend federal tax return 2012 988-3. Amend federal tax return 2012 Nonequity option. Amend federal tax return 2012   This is any listed option (defined later) that is not an equity option. Amend federal tax return 2012 Nonequity options include debt options, commodity futures options, currency options, and broad-based stock index options. Amend federal tax return 2012 A broad-based stock index is based on the value of a group of diversified stocks or securities (such as the Standard and Poor's 500 index). Amend federal tax return 2012 Warrants based on a stock index that are economically, substantially identical in all material respects to options based on a stock index are treated as options based on a stock index. Amend federal tax return 2012 Cash-settled options. Amend federal tax return 2012   Cash-settled options based on a stock index and either traded on or subject to the rules of a qualified board of exchange are nonequity options if the Securities and Exchange Commission (SEC) determines that the stock index is broad based. Amend federal tax return 2012   This rule does not apply to options established before the SEC determines that the stock index is broad based. Amend federal tax return 2012 Listed option. Amend federal tax return 2012   This is any option traded on, or subject to the rules of, a qualified board or exchange (as discussed earlier under Regulated futures contract). Amend federal tax return 2012 A listed option, however, does not include an option that is a right to acquire stock from the issuer. Amend federal tax return 2012 Dealer equity option. Amend federal tax return 2012   This is any listed option that, for an options dealer: Is an equity option, Is bought or granted by that dealer in the normal course of the dealer's business activity of dealing in options, and Is listed on the qualified board of exchange where that dealer is registered. Amend federal tax return 2012   An “options dealer” is any person registered with an appropriate national securities exchange as a market maker or specialist in listed options. Amend federal tax return 2012 Equity option. Amend federal tax return 2012   This is any option: To buy or sell stock, or That is valued directly or indirectly by reference to any stock or narrow-based security index. Amend federal tax return 2012  Equity options include options on a group of stocks only if the group is a narrow-based stock index. Amend federal tax return 2012 Dealer securities futures contract. Amend federal tax return 2012   For any dealer in securities futures contracts or options on those contracts, this is a securities futures contract (or option on such a contract) that: Is entered into by the dealer (or, in the case of an option, is purchased or granted by the dealer) in the normal course of the dealer's activity of dealing in this type of contract (or option), and Is traded on a qualified board or exchange (as defined under Regulated futures contract , earlier). Amend federal tax return 2012 A securities futures contract that is not a dealer securities futures contract is treated as described later under Securities Futures Contracts . Amend federal tax return 2012 Marked-to-Market Rules A section 1256 contract that you hold at the end of the tax year will generally be treated as sold at its fair market value on the last business day of the tax year, and you must recognize any gain or loss that results. Amend federal tax return 2012 That gain or loss is taken into account in figuring your gain or loss when you later dispose of the contract, as shown in the example under 60/40 rule, below. Amend federal tax return 2012 Hedging exception. Amend federal tax return 2012   The marked-to-market rules do not apply to hedging transactions. Amend federal tax return 2012 See Hedging Transactions , later. Amend federal tax return 2012 60/40 rule. Amend federal tax return 2012   Under the marked-to-market system, 60% of your capital gain or loss will be treated as a long-term capital gain or loss, and 40% will be treated as a short-term capital gain or loss. Amend federal tax return 2012 This is true regardless of how long you actually held the property. Amend federal tax return 2012 Example. Amend federal tax return 2012 On June 22, 2012, you bought a regulated futures contract for $50,000. Amend federal tax return 2012 On December 31, 2012 (the last business day of your tax year), the fair market value of the contract was $57,000. Amend federal tax return 2012 You recognized a $7,000 gain on your 2012 tax return, treated as 60% long-term and 40% short-term capital gain. Amend federal tax return 2012 On February 1, 2013, you sold the contract for $56,000. Amend federal tax return 2012 Because you recognized a $7,000 gain on your 2012 return, you recognize a $1,000 loss ($57,000 − $56,000) on your 2013 tax return, treated as 60% long-term and 40% short-term capital loss. Amend federal tax return 2012 Limited partners or entrepreneurs. Amend federal tax return 2012   The 60/40 rule does not apply to dealer equity options or dealer securities futures contracts that result in capital gain or loss allocable to limited partners or limited entrepreneurs (defined later under Hedging Transactions ). Amend federal tax return 2012 Instead, these gains or losses are treated as short term. Amend federal tax return 2012 Terminations and transfers. Amend federal tax return 2012   The marked-to-market rules also apply if your obligation or rights under section 1256 contracts are terminated or transferred during the tax year. Amend federal tax return 2012 In this case, use the fair market value of each section 1256 contract at the time of termination or transfer to determine the gain or loss. Amend federal tax return 2012 Terminations or transfers may result from any offsetting, delivery, exercise, assignment, or lapse of your obligation or rights under section 1256 contracts. Amend federal tax return 2012 Loss carryback election. Amend federal tax return 2012   An individual having a net section 1256 contracts loss (defined later), generally can elect to carry this loss back 3 years instead of carrying it over to the next year. Amend federal tax return 2012 See How To Report , later, for information about reporting this election on your return. Amend federal tax return 2012   The loss carried back to any year under this election cannot be more than the net section 1256 contracts gain in that year. Amend federal tax return 2012 In addition, the amount of loss carried back to an earlier tax year cannot increase or produce a net operating loss for that year. Amend federal tax return 2012   The loss is carried to the earliest carryback year first, and any unabsorbed loss amount can then be carried to each of the next 2 tax years. Amend federal tax return 2012 In each carryback year, treat 60% of the carryback amount as a long-term capital loss and 40% as a short-term capital loss from section 1256 contracts. Amend federal tax return 2012   If only a portion of the net section 1256 contracts loss is absorbed by carrying the loss back, the unabsorbed portion can be carried forward, under the capital loss carryover rules, to the year following the loss. Amend federal tax return 2012 (See Capital Losses under Reporting Capital Gains and Losses, later. Amend federal tax return 2012 ) Figure your capital loss carryover as if, for the loss year, you had an additional short-term capital gain of 40% of the amount of net section 1256 contracts loss absorbed in the carryback years and an additional long-term capital gain of 60% of the absorbed loss. Amend federal tax return 2012 In the carryover year, treat any capital loss carryover from losses on section 1256 contracts as if it were a loss from section 1256 contracts for that year. Amend federal tax return 2012 Net section 1256 contracts loss. Amend federal tax return 2012   This loss is the lesser of: The net capital loss for your tax year determined by taking into account only the gains and losses from section 1256 contracts, or The capital loss carryover to the next tax year determined without this election. Amend federal tax return 2012 Net section 1256 contracts gain. Amend federal tax return 2012   This gain is the lesser of: The capital gain net income for the carryback year determined by taking into account only gains and losses from section 1256 contracts, or The capital gain net income for that year. Amend federal tax return 2012  Figure your net section 1256 contracts gain for any carryback year without regard to the net section 1256 contracts loss for the loss year or any later tax year. Amend federal tax return 2012 Traders in section 1256 contracts. Amend federal tax return 2012   Gain or loss from the trading of section 1256 contracts is capital gain or loss subject to the marked-to-market rules. Amend federal tax return 2012 However, this does not apply to contracts held for purposes of hedging property if any loss from the property would be an ordinary loss. Amend federal tax return 2012 Treatment of underlying property. Amend federal tax return 2012   The determination of whether an individual's gain or loss from any property is ordinary or capital gain or loss is made without regard to the fact that the individual is actively engaged in dealing in or trading section 1256 contracts related to that property. Amend federal tax return 2012 How To Report If you disposed of regulated futures or foreign currency contracts in 2013 (or had unrealized profit or loss on these contracts that were open at the end of 2012 or 2013), you should receive Form 1099-B, or substitute statement, from your broker. Amend federal tax return 2012 Form 6781. Amend federal tax return 2012   Use Part I of Form 6781 to report your gains and losses from all section 1256 contracts that are open at the end of the year or that were closed out during the year. Amend federal tax return 2012 This includes the amount shown in box 10 of Form 1099-B. Amend federal tax return 2012 Then enter the net amount of these gains and losses on Schedule D (Form 1040), line 4 or line 11, as appropriate. Amend federal tax return 2012 Include a copy of Form 6781 with your income tax return. Amend federal tax return 2012   If the Form 1099-B you receive includes a straddle or hedging transaction, defined later, it may be necessary to show certain adjustments on Form 6781. Amend federal tax return 2012 Follow the Form 6781 instructions for completing Part I. Amend federal tax return 2012 Loss carryback election. Amend federal tax return 2012   To carry back your loss under the election procedures described earlier, file Form 1040X or Form 1045, Application for Tentative Refund, for the year to which you are carrying the loss with an amended Form 6781 and an amended Schedule D (Form 1040) attached. Amend federal tax return 2012 Follow the instructions for completing Form 6781 for the loss year to make this election. Amend federal tax return 2012 Hedging Transactions The marked-to-market rules, described earlier, do not apply to hedging transactions. Amend federal tax return 2012 A transaction is a hedging transaction if both of the following conditions are met. Amend federal tax return 2012 You entered into the transaction in the normal course of your trade or business primarily to manage the risk of: Price changes or currency fluctuations on ordinary property you hold (or will hold), or Interest rate or price changes, or currency fluctuations, on your current or future borrowings or ordinary obligations. Amend federal tax return 2012 You clearly identified the transaction as being a hedging transaction before the close of the day on which you entered into it. Amend federal tax return 2012 This hedging transaction exception does not apply to transactions entered into by or for any syndicate. Amend federal tax return 2012 A syndicate is a partnership, S corporation, or other entity (other than a regular corporation) that allocates more than 35% of its losses to limited partners or limited entrepreneurs. Amend federal tax return 2012 A limited entrepreneur is a person who has an interest in an enterprise (but not as a limited partner) and who does not actively participate in its management. Amend federal tax return 2012 However, an interest is not considered held by a limited partner or entrepreneur if the interest holder actively participates (or did so for at least 5 full years) in the management of the entity, or is the spouse, child (including a legally adopted child), grandchild, or parent of an individual who actively participates in the management of the entity. Amend federal tax return 2012 Hedging loss limit. Amend federal tax return 2012   If you are a limited partner or entrepreneur in a syndicate, the amount of a hedging loss you can claim is limited. Amend federal tax return 2012 A “hedging loss” is the amount by which the allowable deductions in a tax year that resulted from a hedging transaction (determined without regard to the limit) are more than the income received or accrued during the tax year from this transaction. Amend federal tax return 2012   Any hedging loss allocated to you for the tax year is limited to your taxable income for that year from the trade or business in which the hedging transaction occurred. Amend federal tax return 2012 Ignore any hedging transaction items in determining this taxable income. Amend federal tax return 2012 If you have a hedging loss that is disallowed because of this limit, you can carry it over to the next tax year as a deduction resulting from a hedging transaction. Amend federal tax return 2012   If the hedging transaction relates to property other than stock or securities, the limit on hedging losses applies if the limited partner or entrepreneur is an individual. Amend federal tax return 2012   The limit on hedging losses does not apply to any hedging loss to the extent that it is more than all your unrecognized gains from hedging transactions at the end of the tax year that are from the trade or business in which the hedging transaction occurred. Amend federal tax return 2012 The term “unrecognized gain” has the same meaning as defined under Loss Deferral Rules in Straddles, later. Amend federal tax return 2012 Sale of property used in a hedge. Amend federal tax return 2012   Once you identify personal property as being part of a hedging transaction, you must treat gain from its sale or exchange as ordinary income, not capital gain. Amend federal tax return 2012 Self-Employment Income Gains and losses derived in the ordinary course of a commodity or option dealer's trading in section 1256 contracts and property related to these contracts are included in net earnings from self-employment. Amend federal tax return 2012 See the Instructions for Schedule SE (Form 1040). Amend federal tax return 2012 In addition, the rules relating to contributions to self-employment retirement plans apply. Amend federal tax return 2012 For information on retirement plan contributions, see Publication 560 and Publication 590. Amend federal tax return 2012 Basis of Investment Property Basis is a way of measuring your investment in property for tax purposes. Amend federal tax return 2012 You must know the basis of your property to determine whether you have a gain or loss on its sale or other disposition. Amend federal tax return 2012 Investment property you buy normally has an original basis equal to its cost. Amend federal tax return 2012 If you get property in some way other than buying it, such as by gift or inheritance, its fair market value may be important in figuring the basis. Amend federal tax return 2012 Cost Basis The basis of property you buy is usually its cost. Amend federal tax return 2012 The cost is the amount you pay in cash, debt obligations, or other property or services. Amend federal tax return 2012 Unstated interest. Amend federal tax return 2012   If you buy property on a time-payment plan that charges little or no interest, the basis of your property is your stated purchase price, minus the amount considered to be unstated interest. Amend federal tax return 2012 You generally have unstated interest if your interest rate is less than the applicable federal rate. Amend federal tax return 2012 For more information, see Unstated Interest and Original Issue Discount (OID) in Publication 537. Amend federal tax return 2012 Basis Other Than Cost There are times when you must use a basis other than cost. Amend federal tax return 2012 In these cases, you may need to know the property's fair market value or the adjusted basis of the previous owner. Amend federal tax return 2012 Fair market value. Amend federal tax return 2012   This is the price at which the property would change hands between a buyer and a seller, neither being forced to buy or sell and both having reasonable knowledge of all the relevant facts. Amend federal tax return 2012 Sales of similar property, around the same date, may be helpful in figuring fair market value. Amend federal tax return 2012 Property Received for Services If you receive investment property for services, you must include the property's fair market value in income. Amend federal tax return 2012 The amount you include in income then becomes your basis in the property. Amend federal tax return 2012 If the services were performed for a price that was agreed to beforehand, this price will be accepted as the fair market value of the property if there is no evidence to the contrary. Amend federal tax return 2012 Restricted property. Amend federal tax return 2012   If you receive, as payment for services, property that is subject to certain restrictions, your basis in the property generally is its fair market value when it becomes substantially vested. Amend federal tax return 2012 Property becomes substantially vested when it is transferable or is no longer subject to substantial risk of forfeiture, whichever happens first. Amend federal tax return 2012 See Restricted Property in Publication 525 for more information. Amend federal tax return 2012 Bargain purchases. Amend federal tax return 2012   If you buy investment property at less than fair market value, as payment for services, you must include the difference in income. Amend federal tax return 2012 Your basis in the property is the price you pay plus the amount you include in income. Amend federal tax return 2012 Property Received in Taxable Trades If you received investment property in trade for other property, the basis of the new property is its fair market value at the time of the trade unless you received the property in a nontaxable trade. Amend federal tax return 2012 Example. Amend federal tax return 2012 You trade A Company stock for B Company stock having a fair market value of $1,200. Amend federal tax return 2012 If the adjusted basis of the A Company stock is less than $1,200, you have a taxable gain on the trade. Amend federal tax return 2012 If the adjusted basis of the A Company stock is more than $1,200, you have a deductible loss on the trade. Amend federal tax return 2012 The basis of your B Company stock is $1,200. Amend federal tax return 2012 If you later sell the B Company stock for $1,300, you will have a gain of $100. Amend federal tax return 2012 Property Received in Nontaxable Trades If you have a nontaxable trade, you do not recognize gain or loss until you dispose of the property you received in the trade. Amend federal tax return 2012 See Nontaxable Trades , later. Amend federal tax return 2012 The basis of property you received in a nontaxable or partly nontaxable trade is generally the same as the adjusted basis of the property you gave up. Amend federal tax return 2012 Increase this amount by any cash you paid, additional costs you had, and any gain recognized. Amend federal tax return 2012 Reduce this amount by any cash or unlike property you received, any loss recognized, and any liability of yours that was assumed or treated as assumed. Amend federal tax return 2012 Property Received From Your Spouse If property is transferred to you from your spouse (or former spouse, if the transfer is incident to your divorce), your basis is the same as your spouse's or former spouse's adjusted basis just before the transfer. Amend federal tax return 2012 See Transfers Between Spouses , later. Amend federal tax return 2012 Recordkeeping. Amend federal tax return 2012 The transferor must give you the records necessary to determine the adjusted basis and holding period of the property as of the date of the transfer. Amend federal tax return 2012 Property Received as a Gift To figure your basis in property that you received as a gift, you must know its adjusted basis to the donor just before it was given to you, its fair market value at the time it was given to you, the amount of any gift tax paid on it, and the date it was given to you. Amend federal tax return 2012 Fair market value less than donor's adjusted basis. Amend federal tax return 2012   If the fair market value of the property at the time of the gift was less than the donor's adjusted basis just before the gift, your basis for gain on its sale or other disposition is the same as the donor's adjusted basis plus or minus any required adjustments to basis during the period you hold the property. Amend federal tax return 2012 Your basis for loss is its fair market value at the time of the gift plus or minus any required adjustments to basis during the period you hold the property. Amend federal tax return 2012 No gain or loss. Amend federal tax return 2012   If you use the basis for figuring a gain and the result is a loss, and then use the basis for figuring a loss and the result is a gain, you will have neither a gain nor a loss. Amend federal tax return 2012 Example. Amend federal tax return 2012 You receive a gift of investment property having an adjusted basis of $10,000 at the time of the gift. Amend federal tax return 2012 The fair market value at the time of the gift is $9,000. Amend federal tax return 2012 You later sell the property for $9,500. Amend federal tax return 2012 You have neither gain nor loss. Amend federal tax return 2012 Your basis for figuring gain is $10,000, and $9,500 minus $10,000 results in a $500 loss. Amend federal tax return 2012 Your basis for figuring loss is $9,000, and $9,500 minus $9,000 results in a $500 gain. Amend federal tax return 2012 Fair market value equal to or more than donor's adjusted basis. Amend federal tax return 2012   If the fair market value of the property at the time of the gift was equal to or more than the donor's adjusted basis just before the gift, your basis for gain or loss on its sale or other disposition is the donor's adjusted basis plus or minus any required adjustments to basis during the period you hold the property. Amend federal tax return 2012 Also, you may be allowed to add to the donor's adjusted basis all or part of any gift tax paid, depending on the date of the gift. Amend federal tax return 2012 Gift received before 1977. Amend federal tax return 2012   If you received property as a gift before 1977, your basis in the property is the donor's adjusted basis increased by the total gift tax paid on the gift. Amend federal tax return 2012 However, your basis cannot be more than the fair market value of the gift at the time it was given to you. Amend federal tax return 2012 Example 1. Amend federal tax return 2012 You were given XYZ Company stock in 1976. Amend federal tax return 2012 At the time of the gift, the stock had a fair market value of $21,000. Amend federal tax return 2012 The donor's adjusted basis was $20,000. Amend federal tax return 2012 The donor paid a gift tax of $500 on the gift. Amend federal tax return 2012 Your basis for gain or loss is $20,500, the donor's adjusted basis plus the amount of gift tax paid. Amend federal tax return 2012 Example 2. Amend federal tax return 2012 The facts are the same as in Example 1 except that the gift tax paid was $1,500. Amend federal tax return 2012 Your basis is $21,000, the donor's adjusted basis plus the gift tax paid, but limited to the fair market value of the stock at the time of the gift. Amend federal tax return 2012 Gift received after 1976. Amend federal tax return 2012   If you received property as a gift after 1976, your basis is the donor's adjusted basis increased by the part of the gift tax paid that was for the net increase in value of the gift. Amend federal tax return 2012 You figure this part by multiplying the gift tax paid on the gift by a fraction. Amend federal tax return 2012 The numerator (top part) is the net increase in value of the gift and the denominator (bottom part) is the amount of the gift. Amend federal tax return 2012   The net increase in value of the gift is the fair market value of the gift minus the donor's adjusted basis. Amend federal tax return 2012 The amount of the gift is its value for gift tax purposes after reduction by any annual exclusion and marital or charitable deduction that applies to the gift. Amend federal tax return 2012 Example. Amend federal tax return 2012 In 2013, you received a gift of property from your mother. Amend federal tax return 2012 At the time of the gift, the property had a fair market value of $101,000 and an adjusted basis to her of $40,000. Amend federal tax return 2012 The amount of the gift for gift tax purposes was $87,000 ($101,000 minus the $14,000 annual exclusion), and your mother paid a gift tax of $21,000. Amend federal tax return 2012 You figure your basis in the following way: Fair market value $101,000 Minus: Adjusted basis 40,000 Net increase in value of gift $61,000 Gift tax paid $21,000 Multiplied by . Amend federal tax return 2012 701 ($61,000 ÷ $87,000) . Amend federal tax return 2012 701 Gift tax due to net increase in value $14,721 Plus: Adjusted basis of property to  your mother 40,000 Your basis in the property $54,721 Part sale, part gift. Amend federal tax return 2012   If you get property in a transfer that is partly a sale and partly a gift, your basis is the larger of the amount you paid for the property or the transferor's adjusted basis in the property at the time of the transfer. Amend federal tax return 2012 Add to that amount the amount of any gift tax paid on the gift, as described in the preceding discussion. Amend federal tax return 2012 For figuring loss, your basis is limited to the property's fair market value at the time of the transfer. Amend federal tax return 2012 Gift tax information. Amend federal tax return 2012   For information on gift tax, see Publication 950, Introduction to Estate and Gift Taxes. Amend federal tax return 2012 For information on figuring the amount of gift tax to add to your basis, see Property Received as a Gift in Publication 551. Amend federal tax return 2012 Property Received as Inheritance Before or after 2010. Amend federal tax return 2012   If you inherited property from a decedent who died before or after 2010, or who died in 2010 and the executor of the decedent's estate elected not to file Form 8939, Allocation of Increase in Basis for Property Acquired From a Decedent, your basis in that property generally is its fair market value (its appraised value on Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return) on: The date of the decedent's death, or The later alternate valuation date if the estate qualifies for, and elects to use, alternate valuation. Amend federal tax return 2012 If no Form 706 was filed, use the appraised value on the date of death for state inheritance or transmission taxes. Amend federal tax return 2012 For stocks and bonds, if no Form 706 was filed and there are no state inheritance or transmission taxes, see the Form 706 instructions for figuring the fair market value of the stocks and bonds on the date of the decedent's death. Amend federal tax return 2012 Appreciated property you gave the decedent. Amend federal tax return 2012   Your basis in certain appreciated property that you inherited is the decedent's adjusted basis in the property immediately before death rather than its fair market value. Amend federal tax return 2012 This applies to appreciated property that you or your spouse gave the decedent as a gift during the 1-year period ending on the date of death. Amend federal tax return 2012 Appreciated property is any property whose fair market value on the day you gave it to the decedent was more than its adjusted basis. Amend federal tax return 2012 More information. Amend federal tax return 2012   See Publication 551 for more information on the basis of inherited property, including community property, property held by a surviving tenant in a joint tenancy or tenancy by the entirety, a qualified joint interest, and a farm or closely held business. Amend federal tax return 2012 Inherited in 2010 and executor elected to file Form 8939. Amend federal tax return 2012   If you inherited property from a decedent who died in 2010 and the executor made the election to file Form 8939, see Publication 4895, Tax Treatment of Property Acquired From a Decedent Dying in 2010, to figure your basis. Amend federal tax return 2012 Adjusted Basis Before you can figure any gain or loss on a sale, exchange, or other disposition of property or figure allowable depreciation, depletion, or amortization, you usually must make certain adjustments (increases and decreases) to the basis of the property. Amend federal tax return 2012 The result of these adjustments to the basis is the adjusted basis. Amend federal tax return 2012 Adjustments to the basis of stocks and bonds are explained in the following discussion. Amend federal tax return 2012 For information about other adjustments to basis, see Publication 551. Amend federal tax return 2012 Stocks and Bonds The basis of stocks or bonds you own generally is the purchase price plus the costs of purchase, such as commissions and recording or transfer fees. Amend federal tax return 2012 If you acquired stock or bonds other than by purchase, your basis is usually determined by fair market value or the previous owner's adjusted basis as discussed earlier under Basis Other Than Cost . Amend federal tax return 2012 The basis of stock must be adjusted for certain events that occur after purchase. Amend federal tax return 2012 For example, if you receive more stock from nontaxable stock dividends or stock splits, you must reduce the basis of your original stock. Amend federal tax return 2012 You must also reduce your basis when you receive nondividend distributions (discussed in chapter 1). Amend federal tax return 2012 These distributions, up to the amount of your basis, are a nontaxable return of capital. Amend federal tax return 2012 The IRS partners with companies that offer Form 8949 and Schedule D (Form 1040) software that can import trades from many brokerage firms and accounting software to help you keep track of your adjusted basis in securities. Amend federal tax return 2012 To find out more, go to www. Amend federal tax return 2012 irs. Amend federal tax return 2012 gov/Filing/Filing-Options. Amend federal tax return 2012 Identifying stock or bonds sold. Amend federal tax return 2012   If you can adequately identify the shares of stock or the bonds you sold, their basis is the cost or other basis of the particular shares of stock or bonds. Amend federal tax return 2012 Adequate identification. Amend federal tax return 2012   You will make an adequate identification if you show that certificates representing shares of stock from a lot that you bought on a certain date or for a certain price were delivered to your broker or other agent. Amend federal tax return 2012 Broker holds stock. Amend federal tax return 2012   If you have left the stock certificates with your broker or other agent, you will make an adequate identification if you: Tell your broker or other agent the particular stock to be sold or transferred at the time of the sale or transfer, and Receive a written confirmation of this from your broker or other agent within a reasonable time. Amend federal tax return 2012  Stock identified this way is the stock sold or transferred even if stock certificates from a different lot are delivered to the broker or other agent. Amend federal tax return 2012 Single stock certificate. Amend federal tax return 2012   If you bought stock in different lots at different times and you hold a single stock certificate for this stock, you will make an adequate identification if you: Tell your broker or other agent the particular stock to be sold or transferred when you deliver the certificate to your broker or other agent, and Receive a written confirmation of this from your broker or other agent within a reasonable time. Amend federal tax return 2012   If you sell part of the stock represented by a single certificate directly to the buyer instead of through a broker, you will make an adequate identification if you keep a written record of the particular stock that you intend to sell. Amend federal tax return 2012 Bonds. Amend federal tax return 2012   These methods of identification also apply to bonds sold or transferred. Amend federal tax return 2012 Identification not possible. Amend federal tax return 2012   If you buy and sell securities at various times in varying quantities and you cannot adequately identify the shares you sell, the basis of the securities you sell is the basis of the securities you acquired first. Amend federal tax return 2012 Except for certain mutual fund shares, discussed later, you cannot use the average price per share to figure gain or loss on the sale of the shares. Amend federal tax return 2012 Example. Amend federal tax return 2012 You bought 100 shares of stock of XYZ Corporation in 1998 for $10 a share. Amend federal tax return 2012 In January 1999 you bought another 200 shares for $11 a share. Amend federal tax return 2012 In July 1999 you gave your son 50 shares. Amend federal tax return 2012 In December 2001 you bought 100 shares for $9 a share. Amend federal tax return 2012 In April 2013 you sold 130 shares. Amend federal tax return 2012 You cannot identify the shares you disposed of, so you must use the stock you acquired first to figure the basis. Amend federal tax return 2012 The shares of stock you gave your son had a basis of $500 (50 × $10). Amend federal tax return 2012 You figure the basis of the 130 shares of stock you sold in 2013 as follows: 50 shares (50 × $10) balance of stock bought in 1998 $ 500 80 shares (80 × $11) stock bought in January 1999 880 Total basis of stock sold in 2013 $1,380 Shares in a mutual fund or REIT. Amend federal tax return 2012    The basis of shares in a mutual fund (or other regulated investment company) or a real estate investment trust (REIT) is generally figured in the same way as the basis of other stock and usually includes any commissions or load charges paid for the purchase. Amend federal tax return 2012 Example. Amend federal tax return 2012 You bought 100 shares of Fund A for $10 a share. Amend federal tax return 2012 You paid a $50 commission to the broker for the purchase. Amend federal tax return 2012 Your cost basis for each share is $10. Amend federal tax return 2012 50 ($1,050 ÷ 100). Amend federal tax return 2012 Commissions and load charges. Amend federal tax return 2012   The fees and charges you pay to acquire or redeem shares of a mutual fund are not deductible. Amend federal tax return 2012 You can usually add acquisition fees and charges to your cost of the shares and thereby increase your basis. Amend federal tax return 2012 A fee paid to redeem the shares is usually a reduction in the redemption price (sales price). Amend federal tax return 2012   You cannot add your entire acquisition fee or load charge to the cost of the mutual fund shares acquired if all of the following conditions apply. Amend federal tax return 2012 You get a reinvestment right because of the purchase of the shares or the payment of the fee or charge. Amend federal tax return 2012 You dispose of the shares within 90 days of the purchase date. Amend federal tax return 2012 You acquire new shares in the same mutual fund or another mutual fund, for which the fee or charge is reduced or waived because of the reinvestment right you got when you acquired the original shares. Amend federal tax return 2012   The amount of the original fee or charge in excess of the reduction in (3) is added to the cost of the original shares. Amend federal tax return 2012 The rest of the original fee or charge is added to the cost basis of the new shares (unless all three conditions above also apply to the purchase of the new shares). Amend federal tax return 2012 Choosing average basis for mutual fund shares. Amend federal tax return 2012   You can choose to use the average basis of mutual fund shares if you acquired the identical shares at various times and prices, or you acquired the shares after 2010 in connection with a dividend reinvestment plan, and left them on deposit in an account kept by a custodian or agent. Amend federal tax return 2012 The methods you can use to figure average basis are explained later. Amend federal tax return 2012 Undistributed capital gains. Amend federal tax return 2012   If you had to include in your income any undistributed capital gains of the mutual fund or REIT, increase your basis in the stock by the difference between the amount you included and the amount of tax paid for you by the fund or REIT. Amend federal tax return 2012 See Undistributed capital gains of mutual funds and REITs under Capital Gain Distributions in chapter 1. Amend federal tax return 2012 Reinvestment right. Amend federal tax return 2012   This is the right to acquire mutual fund shares in the same or another mutual fund without paying a fee or load charge, or by paying a reduced fee or load charge. Amend federal tax return 2012      The original cost basis of mutual fund shares you acquire by reinvesting your distributions is the amount of the distributions used to purchase each full or fractional share. Amend federal tax return 2012 This rule applies even if the distribution is an exempt-interest dividend that you do not report as income. Amend federal tax return 2012 Table 4-1. Amend federal tax return 2012 This is a worksheet you can use to keep track of the adjusted basis of your mutual fund shares. Amend federal tax return 2012 Enter the cost per share when you acquire new shares and any adjustments to their basis when the adjustment occurs. Amend federal tax return 2012 This worksheet will help you figure the adjusted basis when you sell or redeem shares. Amend federal tax return 2012 Table 4-1. Amend federal tax return 2012 Mutual Fund Record Mutual Fund Acquired1 Adjustment to Basis Per Share Adjusted2 Basis Per Share Sold or redeemed Date Number of Shares Cost Per Share Date Number of Shares                                                                                                                                                                                                                                                                         1 Include share received from reinvestment of distributions. Amend federal tax return 2012 2 Cost plus or minus adjustments. Amend federal tax return 2012 Automatic investment service. Amend federal tax return 2012   If you participate in an automatic investment service, your basis for each share of stock, including fractional shares, bought by the bank or other agent is the purchase price plus a share of the broker's commission. Amend federal tax return 2012 Dividend reinvestment plans. Amend federal tax return 2012   If you participate in a dividend reinvestment plan and receive stock from the corporation at a discount, your basis is the full fair market value of the stock on the dividend payment date. Amend federal tax return 2012 You must include the amount of the discount in your income. Amend federal tax return 2012 Public utilities. Amend federal tax return 2012   If, before 1986, you excluded from income the value of stock you had received under a qualified public utility reinvestment plan, your basis in that stock is zero. Amend federal tax return 2012 Stock dividends. Amend federal tax return 2012   Stock dividends are distributions made by a corporation of its own stock. Amend federal tax return 2012 Generally, stock dividends are not taxable to you. Amend federal tax return 2012 However, see Distributions of Stock and Stock Rights under Dividends and Other Distributions in chapter 1 for some exceptions. Amend federal tax return 2012 If the stock dividends are not taxable, you must divide your basis for the old stock between the old and new stock. Amend federal tax return 2012 New and old stock identical. Amend federal tax return 2012   If the new stock you received as a nontaxable dividend is identical to the old stock on which the dividend was declared, divide the adjusted basis of the old stock by the number of shares of old and new stock. Amend federal tax return 2012 The result is your basis for each share of stock. Amend federal tax return 2012 Example 1. Amend federal tax return 2012 You owned one share of common stock that you bought for $45. Amend federal tax return 2012 The corporation distributed two new shares of common stock for each share held. Amend federal tax return 2012 You then had three shares of common stock. Amend federal tax return 2012 Your basis in each share is $15 ($45 ÷ 3). Amend federal tax return 2012 Example 2. Amend federal tax return 2012 You owned two shares of common stock. Amend federal tax return 2012 You bought one for $30 and the other for $45. Amend federal tax return 2012 The corporation distributed two new shares of common stock for each share held. Amend federal tax return 2012 You had six shares after the distribution—three with a basis of $10 each ($30 ÷ 3) and three with a basis of $15 each ($45 ÷ 3). Amend federal tax return 2012 New and old stock not identical. Amend federal tax return 2012   If the new stock you received as a nontaxable dividend is not identical to the old stock on which it was declared, the basis of the new stock is calculated differently. Amend federal tax return 2012 Divide the adjusted basis of the old stock between the old and the new stock in the ratio of the fair market value of each lot of stock to the total fair market value of both lots on the date of distribution of the new stock. Amend federal tax return 2012 Example. Amend federal tax return 2012 You bought a share of common stock for $100. Amend federal tax return 2012 Later, the corporation distributed a share of preferred stock for each share of common stock held. Amend federal tax return 2012 At the date of distribution, your common stock had a fair market value of $150 and the preferred stock had a fair market value of $50. Amend federal tax return 2012 You figure the basis of the old and new stock by dividing your $100 basis between them. Amend federal tax return 2012 The basis of your common stock is $75 (($150 ÷ $200) × $100), and the basis of the new preferred stock is $25 (($50 ÷ $200) × $100). Amend federal tax return 2012 Stock bought at various times. Amend federal tax return 2012   Figure the basis of stock dividends received on stock you bought at various times and at different prices by allocating to each lot of stock the share of the stock dividends due to it. Amend federal tax return 2012 Taxable stock dividends. Amend federal tax return 2012   If your stock dividend is taxable when you receive it, the basis of your new stock is its fair market value on the date of distribution. Amend federal tax return 2012 The basis of your old stock does not change. Amend federal tax return 2012 Stock splits. Amend federal tax return 2012   Figure the basis of stock splits in the same way as stock dividends if identical stock is distributed on the stock held. Amend federal tax return 2012 Stock rights. Amend federal tax return 2012   A stock right is a right to acquire a corporation's stock. Amend federal tax return 2012 It may be exercised, it may be sold if it has a market value, or it may expire. Amend federal tax return 2012 Stock rights are rarely taxable when you receive them. Amend federal tax return 2012 See Distributions of Stock and Stock Rights under Dividends and Other Distributions in chapter 1. Amend federal tax return 2012 Taxable stock rights. Amend federal tax return 2012   If you receive stock rights that are taxable, the basis of the rights is their fair market value at the time of distribution. Amend federal tax return 2012 The basis of the old stock does not change. Amend federal tax return 2012 Nontaxable stock rights. Amend federal tax return 2012   If you receive nontaxable stock rights and allow them to expire, they have no basis. Amend federal tax return 2012   If you exercise or sell the nontaxable stock rights and if, at the time of distribution, the stock rights had a fair market value of 15% or more of the fair market value of the old stock, you must divide the adjusted basis of the old stock between the old stock and the stock rights. Amend federal tax return 2012 Use a ratio of the fair market value of each to the total fair market value of both at the time of distribution. Amend federal tax return 2012   If the fair market value of the stock rights was less than 15%, their basis is zero. Amend federal tax return 2012 However, you can choose to divide the basis of the old stock between the old stock and the stock rights. Amend federal tax return 2012 To make the choice, attach a statement to your return for the year in which you received the rights, stating that you choose to divide the basis of the stock. Amend federal tax return 2012 Basis of new stock. Amend federal tax return 2012   If you exercise the stock rights, the basis of the new stock is its cost plus the basis of the stock rights exercised. Amend federal tax return 2012 Example. Amend federal tax return 2012 You own 100 shares of ABC Company stock, which cost you $22 per share. Amend federal tax return 2012 The ABC Company gave you 10 nontaxable stock rights that would allow you to buy 10 more shares at $26 per share. Amend federal tax return 2012 At the time the stock rights were distributed, the stock had a market value of $30, not including the stock rights. Amend federal tax return 2012 Each stock right had a market value of $3. Amend federal tax return 2012 The market value of the stock rights was less than 15% of the market value of the stock, but you chose to divide the basis of your stock between the stock and the rights. Amend federal tax return 2012 You figure the basis of the rights and the basis of the old stock as follows: 100 shares × $22 = $2,200, basis of old stock   100 shares × $30 = $3,000, market value of old stock   10 rights × $3 = $30, market value of rights   ($3,000 ÷ $3,030) × $2,200 = $2,178. Amend federal tax return 2012 22, new basis of old stock   ($30 ÷ $3,030) × $2,200 = $21. Amend federal tax return 2012 78, basis of rights   If you sell the rights, the basis for figuring gain or loss is $2. Amend federal tax return 2012 18 ($21. Amend federal tax return 2012 78 ÷ 10) per right. Amend federal tax return 2012 If you exercise the rights, the basis of the stock you acquire is the price you pay ($26) plus the basis of the right exercised ($2. Amend federal tax return 2012 18), or $28. Amend federal tax return 2012 18 per share. Amend federal tax return 2012 The remaining basis of the old stock is $21. Amend federal tax return 2012 78 per share. Amend federal tax return 2012 Investment property received in liquidation. Amend federal tax return 2012   In general, if you receive investment property as a distribution in partial or complete liquidation of a corporation and if you recognize gain or loss when you acquire the property, your basis in the property is its fair market value at the time of the distribution. Amend federal tax return 2012 S corporation stock. Amend federal tax return 2012   You must increase your basis in stock of an S corporation by your pro rata share of the following items. Amend federal tax return 2012 All income items of the S corporation, including tax-exempt income, that are separately stated and passed through to you as a shareholder. Amend federal tax return 2012 The nonseparately stated income of the S corporation. Amend federal tax return 2012 The amount of the deduction for depletion (other than oil and gas depletion) that is more than the basis of the property being depleted. Amend federal tax return 2012   You must decrease your basis in stock of an S corporation by your pro rata share of the following items. Amend federal tax return 2012 Distributions by the S corporation that were not included in your income. Amend federal tax return 2012 All loss and deduction items of the S corporation that are separately stated and passed through to you. Amend federal tax return 2012 Any nonseparately stated loss of the S corporation. Amend federal tax return 2012 Any expense of the S corporation that is not deductible in figuring its taxable income and not properly chargeable to a capital account. Amend federal tax return 2012 The amount of your deduction for depletion of oil and gas wells to the extent the deduction is not more than your share of the adjusted basis of the wells. Amend federal tax return 2012 However, your basis in the stock cannot be reduced below zero. Amend federal tax return 2012 Specialized small business investment company stock or partnership interest. Amend federal tax return 2012   If you bought this stock or interest as replacement property for publicly traded securities you sold at a gain, you must reduce the basis of the stock or interest by the amount of any postponed gain on that sale. Amend federal tax return 2012 See Rollover of Gain From Publicly Traded Securities , later. Amend federal tax return 2012 Qualified small business stock. Amend federal tax return 2012   If you bought this stock as replacement property for other qualified small business stock you sold at a gain, you must reduce the basis of this replacement stock by the amount of any postponed gain on the earlier sale. Amend federal tax return 2012 See Gains on Qualified Small Business Stock , later. Amend federal tax return 2012 Short sales. Amend federal tax return 2012   If you cannot deduct payments you make to a lender in lieu of dividends on stock used in a short sale, the amount you pay to the lender is a capital expense, and you must add it to the basis of the stock used to close the short sale. Amend federal tax return 2012   See Payments in lieu of dividends , later, for information about deducting payments in lieu of dividends. Amend federal tax return 2012 Premiums on bonds. Amend federal tax return 2012   If you buy a bond at a premium, the premium is treated as part of your basis in the bond. Amend federal tax return 2012 If you choose to amortize the premium paid on a taxable bond, you must reduce the basis of the bond by the amortized part of the premium each year over the life of the bond. Amend federal tax return 2012   Although you cannot deduct the premium on a tax-exempt bond, you must amortize it to determine your adjusted basis in the bond. Amend federal tax return 2012 You must reduce the basis of the bond by the premium you amortized for the period you held the bond. Amend federal tax return 2012   See Bond Premium Amortization in chapter 3 for more information. Amend federal tax return 2012 Market discount on bonds. Amend federal tax return 2012   If you include market discount on a bond in income currently, increase the basis of your bond by the amount of market discount you include in your income. Amend federal tax return 2012 See Market Discount Bonds in chapter 1 for more information. Amend federal tax return 2012 Bonds purchased at par value. Amend federal tax return 2012   A bond purchased at par value (face amount) has no premium or discount. Amend federal tax return 2012 When you sell or otherwise dispose of the bond, you figure the gain or loss by comparing the bond proceeds to the purchase price of the bond. Amend federal tax return 2012 Example. Amend federal tax return 2012 You purchased a bond several years ago for its par value of $10,000. Amend federal tax return 2012 You sold the bond this year for $10,100. Amend federal tax return 2012 You have a gain of $100. Amend federal tax return 2012 However, if you had sold the bond for $9,900, you would have a loss of $100. Amend federal tax return 2012 Acquisition discount on short-term obligations. Amend federal tax return 2012   If you include acquisition discount on a short-term obligation in your income currently, increase the basis of the obligation by the amount of acquisition discount you include in your income. Amend federal tax return 2012 See Discount on Short-Term Obligations in chapter 1 for more information. Amend federal tax return 2012 Original issue discount (OID) on debt instruments. Amend federal tax return 2012   Increase the basis of a debt instrument by the OID you include in your income. Amend federal tax return 2012 See Original Issue Discount (OID) in chapter 1. Amend federal tax return 2012 Discounted tax-exempt obligations. Amend federal tax return 2012   OID on tax-exempt obligations is generally not taxable. Amend federal tax return 2012 However, when you dispose of a tax-exempt obligation issued after September 3, 1982, that you acquired after March 1, 1984, you must accrue OID on the obligation to determine its adjusted basis. Amend federal tax return 2012 The accrued OID is added to the basis of the obligation to determine your gain or loss. Amend federal tax return 2012   For information on determining OID on a long-term obligation, see Debt Instruments Issued After July 1, 1982, and Before 1985 or Debt Instruments Issued After 1984, whichever applies, in Publication 1212 under Figuring OID on Long-Term Debt Instruments. Amend federal tax return 2012   If the tax-exempt obligation has a maturity of 1 year or less, accrue OID under the rules for acquisition discount on short-term obligations. Amend federal tax return 2012 See Discount on Short-Term Obligations in chapter 1. Amend federal tax return 2012 Stripped tax-exempt obligation. Amend federal tax return 2012   If you acquired a stripped tax-exempt bond or coupon after October 22, 1986, you must accrue OID on it to determine its adjusted basis when you dispose of it. Amend federal tax return 2012 For stripped tax-exempt bonds or coupons acquired after June 10, 1987, part of this OID may be taxable. Amend federal tax return 2012 You accrue the OID on these obligations in the manner described in chapter 1 under Stripped Bonds and Coupons . Amend federal tax return 2012   Increase your basis in the stripped tax-exempt bond or coupon by the taxable and nontaxable accrued OID. Amend federal tax return 2012 Also increase your basis by the interest that accrued (but was not paid and was not previously reflected in your basis) before the date you sold the bond or coupon. Amend federal tax return 2012 In addition, for bonds acquired after June 10, 1987, add to your basis any accrued market discount not previously reflected in basis. Amend federal tax return 2012 How To Figure Gain or Loss You figure gain or loss on a sale or trade of property by comparing the amount you realize with the adjusted basis of the property. Amend federal tax return 2012 Gain. Amend federal tax return 2012   If the amount you realize from a sale or trade is more than the adjusted basis of the property you transfer, the difference is a gain. Amend federal tax return 2012 Loss. Amend federal tax return 2012   If the adjusted basis of the property you transfer is more than the amount you realize, the difference is a loss. Amend federal tax return 2012 Amount realized. Amend federal tax return 2012   The amount you realize from a sale or trade of property is everything you receive for the property minus your expenses of sale (such as redemption fees, sales commissions, sales charges, or exit fees). Amend federal tax return 2012 Amount realized includes the money you receive plus the fair market value of any property or services you receive. Amend federal tax return 2012   If you finance the buyer's purchase of your property and the debt instrument does not provide for adequate stated interest, the unstated interest that you must report as ordinary income will reduce the amount realized from the sale. Amend federal tax return 2012 For more information, see Publication 537. Amend federal tax return 2012   If a buyer of property issues a debt instrument to the seller of the property, the amount realized is determined by reference to the issue price of the debt instrument, which may or may not be the fair market value of the debt instrument. Amend federal tax return 2012 See Regulations section 1. Amend federal tax return 2012 1001-1(g). Amend federal tax return 2012 However, if the debt instrument was previously issued by a third party (one not part of the sale transaction), the fair market value of the debt instrument is used to determine the amount realized. Amend federal tax return 2012 Fair market value. Amend federal tax return 2012   Fair market value is the price at which property would change hands between a buyer and a seller, neither being forced to buy or sell and both having reasonable knowledge of all the relevant facts. Amend federal tax return 2012 Example. Amend federal tax return 2012 You trade A Company stock with an adjusted basis of $7,000 for B Company stock with a fair market value of $10,000, which is your amount realized. Amend federal tax return 2012 Your gain is $3,000 ($10,000 – $7,000). Amend federal tax return 2012 If you also receive a note for $6,000 that has an issue price of $6,000, your gain is $9,000 ($10,000 + $6,000 – $7,000). Amend federal tax return 2012 Debt paid off. Amend federal tax return 2012   A debt against the property, or against you, that is paid off as a part of the transaction or that is assumed by the buyer must be included in the amount realized. Amend federal tax return 2012 This is true even if neither you nor the buyer is personally liable for the debt. Amend federal tax return 2012 For example, if you sell or trade property that is subject to a nonrecourse loan, the amount you realize generally includes the full amount of the note assumed by the buyer even if the amount of the note is more than the fair market value of the property. Amend federal tax return 2012 Example. Amend federal tax return 2012 You sell stock that you had pledged as security for a bank loan of $8,000. Amend federal tax return 2012 Your basis in the stock is $6,000. Amend federal tax return 2012 The buyer pays off your bank loan and pays you $20,000 in cash. Amend federal tax return 2012 The amount realized is $28,000 ($20,000 + $8,000). Amend federal tax return 2012 Your gain is $22,000 ($28,000 – $6,000). Amend federal tax return 2012 Payment of cash. Amend federal tax return 2012   If you trade property and cash for other property, the amount you realize is the fair market value of the property you receive. Amend federal tax return 2012 Determine your gain or loss by subtracting the cash you pay and the adjusted basis of the property you trade in from the amount you realize. Amend federal tax return 2012 If the result is a positive number, it is a gain. Amend federal tax return 2012 If the result is a negative number, it is a loss. Amend federal tax return 2012 No gain or loss. Amend federal tax return 2012   You may have to use a basis for figuring gain that is different from the basis used for figuring loss. Amend federal tax return 2012 In this case, you may have neither a gain nor a loss. Amend federal tax return 2012 See No gain or loss in the discussion on the basis of property you received as a gift under Basis Other Than Cost, earlier. Amend federal tax return 2012 Special Rules for Mutual Funds To figure your gain or loss when you dispose of mutual fund shares, you need to determine which shares were sold and the basis of those shares. Amend federal tax return 2012 If your shares in a mutual fund were acquired all on the same day and for the same price, figuring their basis is not difficu