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Amended Tax Form 2012

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Amended Tax Form 2012

Amended tax form 2012 25. Amended tax form 2012   Nonbusiness Casualty and Theft Losses Table of Contents What's New Introduction Useful Items - You may want to see: CasualtyFamily pet. Amended tax form 2012 Progressive deterioration. Amended tax form 2012 Damage from corrosive drywall. Amended tax form 2012 Theft Loss on Deposits Proof of Loss Figuring a LossDecrease in Fair Market Value Adjusted Basis Insurance and Other Reimbursements Single Casualty on Multiple Properties Deduction Limits$100 Rule 10% Rule When To Report Gains and LossesDisaster Area Loss How To Report Gains and Losses What's New New Section C of Form 4684 for Ponzi-type investment schemes. Amended tax form 2012  Section C of Form 4684 is new for 2013. Amended tax form 2012 You must complete Section C if you are claiming a theft loss deduction due to a Ponzi-type investment scheme and are using Revenue Procedure 2009-20, as modified by Revenue Procedure 2011-58. Amended tax form 2012 Section C of Form 4684 replaces Appendix A in Revenue Procedure 2009-20. Amended tax form 2012 You do not need to complete Appendix A. Amended tax form 2012 For details, see Losses from Ponzi-type investment schemes , in this chapter. Amended tax form 2012 Introduction This chapter explains the tax treatment of personal (not business or investment related) casualty losses, theft losses, and losses on deposits. Amended tax form 2012 The chapter also explains the following  topics. Amended tax form 2012 How to figure the amount of your loss. Amended tax form 2012 How to treat insurance and other reimbursements you receive. Amended tax form 2012 The deduction limits. Amended tax form 2012 When and how to report a casualty or theft. Amended tax form 2012 Forms to file. Amended tax form 2012    When you have a casualty or theft, you have to file Form 4684. Amended tax form 2012 You will also have to file one or more of the following forms. Amended tax form 2012 Schedule A (Form 1040), Itemized Deductions Schedule D (Form 1040), Capital Gains and Losses Condemnations. Amended tax form 2012   For information on condemnations of property, see Involuntary Conversions in chapter 1 of Publication 544, Sales and Other Disposition of Assets. Amended tax form 2012 Workbook for casualties and thefts. Amended tax form 2012    Publication 584 is available to help you make a list of your stolen or damaged personal-use property and figure your loss. Amended tax form 2012 It includes schedules to help you figure the loss on your home, its contents, and your motor vehicles. Amended tax form 2012 Business or investment-related losses. Amended tax form 2012   For information on a casualty or theft loss of business or income-producing property, see Publication 547, Casualties, Disasters, and Thefts. Amended tax form 2012 Useful Items - You may want to see: Publication 544 Sales and Other Dispositions  of Assets 547 Casualties, Disasters, and   Thefts 584 Casualty, Disaster, and Theft   Loss Workbook (Personal-Use  Property) Form (and Instructions) Schedule A (Form 1040) Itemized Deductions Schedule D (Form 1040) Capital Gains and Losses 4684 Casualties and Thefts Casualty A casualty is the damage, destruction, or loss of property resulting from an identifiable event that is sudden, unexpected, or unusual. Amended tax form 2012 A sudden event is one that is swift, not gradual or progressive. Amended tax form 2012 An unexpected event is one that is ordinarily unanticipated and unintended. Amended tax form 2012 An unusual event is one that is not a day-to-day occurrence and that is not typical of the activity in which you were engaged. Amended tax form 2012 Deductible losses. Amended tax form 2012   Deductible casualty losses can result from a number of different causes, including the following. Amended tax form 2012 Car accidents (but see Nondeductible losses , next, for exceptions). Amended tax form 2012 Earthquakes. Amended tax form 2012 Fires (but see Nondeductible losses , next, for exceptions). Amended tax form 2012 Floods. Amended tax form 2012 Government-ordered demolition or relocation of a home that is unsafe to use because of a disaster as discussed under Disaster Area Losses in Publication 547. Amended tax form 2012 Mine cave-ins. Amended tax form 2012 Shipwrecks. Amended tax form 2012 Sonic booms. Amended tax form 2012 Storms, including hurricanes and tornadoes. Amended tax form 2012 Terrorist attacks. Amended tax form 2012 Vandalism. Amended tax form 2012 Volcanic eruptions. Amended tax form 2012 Nondeductible losses. Amended tax form 2012   A casualty loss is not deductible if the damage or destruction is caused by the following. Amended tax form 2012 Accidentally breaking articles such as glassware or china under normal conditions. Amended tax form 2012 A family pet (explained below). Amended tax form 2012 A fire if you willfully set it or pay someone else to set it. Amended tax form 2012 A car accident if your willful negligence or willful act caused it. Amended tax form 2012 The same is true if the willful act or willful negligence of someone acting for you caused the accident. Amended tax form 2012 Progressive deterioration (explained later). Amended tax form 2012 Family pet. Amended tax form 2012   Loss of property due to damage by a family pet is not deductible as a casualty loss unless the requirements discussed earlier under Casualty are met. Amended tax form 2012 Example. Amended tax form 2012 Your antique oriental rug was damaged by your new puppy before it was housebroken. Amended tax form 2012 Because the damage was not unexpected and unusual, the loss is not deductible as a casualty loss. Amended tax form 2012 Progressive deterioration. Amended tax form 2012    Loss of property due to progressive deterioration is not deductible as a casualty loss. Amended tax form 2012 This is because the damage results from a steadily operating cause or a normal process, rather than from a sudden event. Amended tax form 2012 The following are examples of damage due to progressive deterioration. Amended tax form 2012 The steady weakening of a building due to normal wind and weather conditions. Amended tax form 2012 The deterioration and damage to a water heater that bursts. Amended tax form 2012 However, the rust and water damage to rugs and drapes caused by the bursting of a water heater does qualify as a casualty. Amended tax form 2012 Most losses of property caused by droughts. Amended tax form 2012 To be deductible, a drought-related loss generally must be incurred in a trade or business or in a transaction entered into for profit. Amended tax form 2012 Termite or moth damage. Amended tax form 2012 The damage or destruction of trees, shrubs, or other plants by a fungus, disease, insects, worms, or similar pests. Amended tax form 2012 However, a sudden destruction due to an unexpected or unusual infestation of beetles or other insects may result in a casualty loss. Amended tax form 2012 Damage from corrosive drywall. Amended tax form 2012   Under a special procedure, you may be able to claim a casualty loss deduction for amounts you paid to repair damage to your home and household appliances that resulted from corrosive drywall. Amended tax form 2012 For details, see Publication 547. Amended tax form 2012 Theft A theft is the taking and removing of money or property with the intent to deprive the owner of it. Amended tax form 2012 The taking of property must be illegal under the laws of the state where it occurred and it must have been done with criminal intent. Amended tax form 2012 You do not need to show a conviction for theft. Amended tax form 2012 Theft includes the taking of money or property by the following means. Amended tax form 2012 Blackmail. Amended tax form 2012 Burglary. Amended tax form 2012 Embezzlement. Amended tax form 2012 Extortion. Amended tax form 2012 Kidnapping for ransom. Amended tax form 2012 Larceny. Amended tax form 2012 Robbery. Amended tax form 2012 The taking of money or property through fraud or misrepresentation is theft if it is illegal under state or local law. Amended tax form 2012 Decline in market value of stock. Amended tax form 2012   You cannot deduct as a theft loss the decline in market value of stock acquired on the open market for investment if the decline is caused by disclosure of accounting fraud or other illegal misconduct by the officers or directors of the corporation that issued the stock. Amended tax form 2012 However, you can deduct as a capital loss the loss you sustain when you sell or exchange the stock or the stock becomes completely worthless. Amended tax form 2012 You report a capital loss on Schedule D (Form 1040). Amended tax form 2012 For more information about stock sales, worthless stock, and capital losses, see chapter 4 of Publication 550. Amended tax form 2012 Mislaid or lost property. Amended tax form 2012   The simple disappearance of money or property is not a theft. Amended tax form 2012 However, an accidental loss or disappearance of property can qualify as a casualty if it results from an identifiable event that is sudden, unexpected, or unusual. Amended tax form 2012 Sudden, unexpected, and unusual events are defined earlier. Amended tax form 2012 Example. Amended tax form 2012 A car door is accidentally slammed on your hand, breaking the setting of your diamond ring. Amended tax form 2012 The diamond falls from the ring and is never found. Amended tax form 2012 The loss of the diamond is a casualty. Amended tax form 2012 Losses from Ponzi-type investment schemes. Amended tax form 2012   If you had a loss from a Ponzi-type investment scheme, see: Revenue Ruling 2009-9, 2009-14 I. Amended tax form 2012 R. Amended tax form 2012 B. Amended tax form 2012 735 (available at www. Amended tax form 2012 irs. Amended tax form 2012 gov/irb/2009-14_IRB/ar07. Amended tax form 2012 html). Amended tax form 2012 Revenue Procedure 2009-20, 2009-14 I. Amended tax form 2012 R. Amended tax form 2012 B. Amended tax form 2012 749 (available at www. Amended tax form 2012 irs. Amended tax form 2012 gov/irb/2009-14_IRB/ar11. Amended tax form 2012 html). Amended tax form 2012 Revenue Procedure 2011-58, 2011-50 I. Amended tax form 2012 R. Amended tax form 2012 B. Amended tax form 2012 849 (available at www. Amended tax form 2012 irs. Amended tax form 2012 gov/irb/2011-50_IRB/ar11. Amended tax form 2012 html). Amended tax form 2012 If you qualify to use Revenue Procedure 2009-20, as modified by Revenue Procedure 2011-58, and you choose to follow the procedures in the guidance, first fill out Section C of Form 4684 to determine the amount to enter on Section B, line 28. Amended tax form 2012 Skip lines 19 to 27. Amended tax form 2012 Section C of Form 4684 replaces Appendix A in Revenue Procedure 2009-20. Amended tax form 2012 You do not need to complete Appendix A. Amended tax form 2012 For more information, see the above revenue ruling and revenue procedures, and the Instructions for Form 4684. Amended tax form 2012   If you choose not to use the procedures in Revenue Procedure 2009-20, you may claim your theft loss by filling out Section B, lines 19 to 39, as appropriate. Amended tax form 2012 Loss on Deposits A loss on deposits can occur when a bank, credit union, or other financial institution becomes insolvent or bankrupt. Amended tax form 2012 If you incurred this type of loss, you can choose one of the following ways to deduct the loss. Amended tax form 2012 As a casualty loss. Amended tax form 2012 As an ordinary loss. Amended tax form 2012 As a nonbusiness bad debt. Amended tax form 2012 Casualty loss or ordinary loss. Amended tax form 2012   You can choose to deduct a loss on deposits as a casualty loss or as an ordinary loss for any year in which you can reasonably estimate how much of your deposits you have lost in an insolvent or bankrupt financial institution. Amended tax form 2012 The choice is generally made on the return you file for that year and applies to all your losses on deposits for the year in that particular financial institution. Amended tax form 2012 If you treat the loss as a casualty or ordinary loss, you cannot treat the same amount of the loss as a nonbusiness bad debt when it actually becomes worthless. Amended tax form 2012 However, you can take a nonbusiness bad debt deduction for any amount of loss that is more than the estimated amount you deducted as a casualty or ordinary loss. Amended tax form 2012 Once you make this choice, you cannot change it without permission from the Internal Revenue Service. Amended tax form 2012   If you claim an ordinary loss, report it as a miscellaneous itemized deduction on Schedule A (Form 1040), line 23. Amended tax form 2012 The maximum amount you can claim is $20,000 ($10,000 if you are married filing separately) reduced by any expected state insurance proceeds. Amended tax form 2012 Your loss is subject to the 2%-of-adjusted-gross-income limit. Amended tax form 2012 You cannot choose to claim an ordinary loss if any part of the deposit is federally insured. Amended tax form 2012 Nonbusiness bad debt. Amended tax form 2012   If you do not choose to deduct the loss as a casualty loss or as an ordinary loss, you must wait until the year the actual loss is determined and deduct the loss as a nonbusiness bad debt in that year. Amended tax form 2012 How to report. Amended tax form 2012   The kind of deduction you choose for your loss on deposits determines how you report your loss. Amended tax form 2012 If you choose: Casualty loss — report it on Form 4684 first and then on Schedule A (Form 1040). Amended tax form 2012 Ordinary loss — report it on Schedule A (Form 1040) as a miscellaneous itemized deduction. Amended tax form 2012 Nonbusiness bad debt — report it on Form 8949 first and then on Schedule D (Form 1040). Amended tax form 2012 More information. Amended tax form 2012   For more information, see Special Treatment for Losses on Deposits in Insolvent or Bankrupt Financial Institutions in the Instructions for Form 4684 or Deposit in Insolvent or Bankrupt Financial Institution in Publication 550. Amended tax form 2012 Proof of Loss To deduct a casualty or theft loss, you must be able to prove that you had a casualty or theft. Amended tax form 2012 You also must be able to support the amount you take as a deduction. Amended tax form 2012 Casualty loss proof. Amended tax form 2012   For a casualty loss, your records should show all the following. Amended tax form 2012 The type of casualty (car accident, fire, storm, etc. Amended tax form 2012 ) and when it occurred. Amended tax form 2012 That the loss was a direct result of the casualty. Amended tax form 2012 That you were the owner of the property or, if you leased the property from someone else, that you were contractually liable to the owner for the damage. Amended tax form 2012 Whether a claim for reimbursement exists for which there is a reasonable expectation of recovery. Amended tax form 2012 Theft loss proof. Amended tax form 2012   For a theft loss, your records should show all the following. Amended tax form 2012 When you discovered that your property was missing. Amended tax form 2012 That your property was stolen. Amended tax form 2012 That you were the owner of the property. Amended tax form 2012 Whether a claim for reimbursement exists for which there is a reasonable expectation of recovery. Amended tax form 2012 It is important that you have records that will prove your deduction. Amended tax form 2012 If you do not have the actual records to support your deduction, you can use other satisfactory evidence to support it. Amended tax form 2012 Figuring a Loss Figure the amount of your loss using the following steps. Amended tax form 2012 Determine your adjusted basis in the property before the casualty or theft. Amended tax form 2012 Determine the decrease in fair market value of the property as a result of the casualty or theft. Amended tax form 2012 From the smaller of the amounts you determined in (1) and (2), subtract any insurance or other reimbursement you received or expect to receive. Amended tax form 2012 For personal-use property and property used in performing services as an employee, apply the deduction limits, discussed later, to determine the amount of your deductible loss. Amended tax form 2012 Gain from reimbursement. Amended tax form 2012   If your reimbursement is more than your adjusted basis in the property, you have a gain. Amended tax form 2012 This is true even if the decrease in the FMV of the property is smaller than your adjusted basis. Amended tax form 2012 If you have a gain, you may have to pay tax on it, or you may be able to postpone reporting the gain. Amended tax form 2012 See Publication 547 for more information on how to treat a gain from a reimbursement for a casualty or theft. Amended tax form 2012 Leased property. Amended tax form 2012   If you are liable for casualty damage to property you lease, your loss is the amount you must pay to repair the property minus any insurance or other reimbursement you receive or expect to receive. Amended tax form 2012 Decrease in Fair Market Value Fair market value (FMV) is the price for which you could sell your property to a willing buyer when neither of you has to sell or buy and both of you know all the relevant facts. Amended tax form 2012 The decrease in FMV used to figure the amount of a casualty or theft loss is the difference between the property's fair market value immediately before and immediately after the casualty or theft. Amended tax form 2012 FMV of stolen property. Amended tax form 2012   The FMV of property immediately after a theft is considered to be zero, since you no longer have the property. Amended tax form 2012 Example. Amended tax form 2012 Several years ago, you purchased silver dollars at face value for $150. Amended tax form 2012 This is your adjusted basis in the property. Amended tax form 2012 Your silver dollars were stolen this year. Amended tax form 2012 The FMV of the coins was $1,000 just before they were stolen, and insurance did not cover them. Amended tax form 2012 Your theft loss is $150. Amended tax form 2012 Recovered stolen property. Amended tax form 2012   Recovered stolen property is your property that was stolen and later returned to you. Amended tax form 2012 If you recovered property after you had already taken a theft loss deduction, you must refigure your loss using the smaller of the property's adjusted basis (explained later) or the decrease in FMV from the time just before it was stolen until the time it was recovered. Amended tax form 2012 Use this amount to refigure your total loss for the year in which the loss was deducted. Amended tax form 2012   If your refigured loss is less than the loss you deducted, you generally have to report the difference as income in the recovery year. Amended tax form 2012 But report the difference only up to the amount of the loss that reduced your tax. Amended tax form 2012 For more information on the amount to report, see Recoveries in chapter 12. Amended tax form 2012 Figuring Decrease in FMV— Items To Consider To figure the decrease in FMV because of a casualty or theft, you generally need a competent appraisal. Amended tax form 2012 However, other measures can also be used to establish certain decreases. Amended tax form 2012 Appraisal. Amended tax form 2012   An appraisal to determine the difference between the FMV of the property immediately before a casualty or theft and immediately afterward should be made by a competent appraiser. Amended tax form 2012 The appraiser must recognize the effects of any general market decline that may occur along with the casualty. Amended tax form 2012 This information is needed to limit any deduction to the actual loss resulting from damage to the property. Amended tax form 2012   Several factors are important in evaluating the accuracy of an appraisal, including the following. Amended tax form 2012 The appraiser's familiarity with your property before and after the casualty or theft. Amended tax form 2012 The appraiser's knowledge of sales of comparable property in the area. Amended tax form 2012 The appraiser's knowledge of conditions in the area of the casualty. Amended tax form 2012 The appraiser's method of appraisal. Amended tax form 2012    You may be able to use an appraisal that you used to get a federal loan (or a federal loan guarantee) as the result of a federally declared disaster to establish the amount of your disaster loss. Amended tax form 2012 For more information on disasters, see Disaster Area Losses, in Pub. Amended tax form 2012 547. Amended tax form 2012 Cost of cleaning up or making repairs. Amended tax form 2012   The cost of repairing damaged property is not part of a casualty loss. Amended tax form 2012 Neither is the cost of cleaning up after a casualty. Amended tax form 2012 But you can use the cost of cleaning up or making repairs after a casualty as a measure of the decrease in FMV if you meet all the following conditions. Amended tax form 2012 The repairs are actually made. Amended tax form 2012 The repairs are necessary to bring the property back to its condition before the casualty. Amended tax form 2012 The amount spent for repairs is not excessive. Amended tax form 2012 The repairs take care of the damage only. Amended tax form 2012 The value of the property after the repairs is not, due to the repairs, more than the value of the property before the casualty. Amended tax form 2012 Landscaping. Amended tax form 2012   The cost of restoring landscaping to its original condition after a casualty may indicate the decrease in FMV. Amended tax form 2012 You may be able to measure your loss by what you spend on the following. Amended tax form 2012 Removing destroyed or damaged trees and shrubs minus any salvage you receive. Amended tax form 2012 Pruning and other measures taken to preserve damaged trees and shrubs. Amended tax form 2012 Replanting necessary to restore the property to its approximate value before the casualty. Amended tax form 2012 Car value. Amended tax form 2012    Books issued by various automobile organizations that list your car may be useful in figuring the value of your car. Amended tax form 2012 You can use the book's retail values and modify them by such factors as mileage and the condition of your car to figure its value. Amended tax form 2012 The prices are not official, but they may be useful in determining value and suggesting relative prices for comparison with current sales and offerings in your area. Amended tax form 2012 If your car is not listed in the books, determine its value from other sources. Amended tax form 2012 A dealer's offer for your car as a trade-in on a new car is not usually a measure of its true value. Amended tax form 2012 Figuring Decrease in FMV— Items Not To Consider You generally should not consider the following items when attempting to establish the decrease in FMV of your property. Amended tax form 2012 Cost of protection. Amended tax form 2012   The cost of protecting your property against a casualty or theft is not part of a casualty or theft loss. Amended tax form 2012 The amount you spend on insurance or to board up your house against a storm is not part of your loss. Amended tax form 2012   If you make permanent improvements to your property to protect it against a casualty or theft, add the cost of these improvements to your basis in the property. Amended tax form 2012 An example would be the cost of a dike to prevent flooding. Amended tax form 2012 Exception. Amended tax form 2012   You cannot increase your basis in the property by, or deduct as a business expense, any expenditures you made with respect to qualified disaster mitigation payments. Amended tax form 2012 See Disaster Area Losses in Publication 547. Amended tax form 2012 Incidental expenses. Amended tax form 2012   Any incidental expenses you have due to a casualty or theft, such as expenses for the treatment of personal injuries, for temporary housing, or for a rental car, are not part of your casualty or theft loss. Amended tax form 2012 Replacement cost. Amended tax form 2012   The cost of replacing stolen or destroyed property is not part of a casualty or theft loss. Amended tax form 2012 Sentimental value. Amended tax form 2012   Do not consider sentimental value when determining your loss. Amended tax form 2012 If a family portrait, heirloom, or keepsake is damaged, destroyed, or stolen, you must base your loss on its FMV, as limited by your adjusted basis in the property. Amended tax form 2012 Decline in market value of property in or near casualty area. Amended tax form 2012   A decrease in the value of your property because it is in or near an area that suffered a casualty, or that might again suffer a casualty, is not to be taken into consideration. Amended tax form 2012 You have a loss only for actual casualty damage to your property. Amended tax form 2012 However, if your home is in a federally declared disaster area, see Disaster Area Losses in Publication 547. Amended tax form 2012 Costs of photographs and appraisals. Amended tax form 2012    Photographs taken after a casualty will be helpful in establishing the condition and value of the property after it was damaged. Amended tax form 2012 Photographs showing the condition of the property after it was repaired, restored, or replaced may also be helpful. Amended tax form 2012    Appraisals are used to figure the decrease in FMV because of a casualty or theft. Amended tax form 2012 See Appraisal , earlier, under Figuring Decrease in FMV — Items To Consider, for information about appraisals. Amended tax form 2012   The costs of photographs and appraisals used as evidence of the value and condition of property damaged as a result of a casualty are not a part of the loss. Amended tax form 2012 You can claim these costs as a miscellaneous itemized deduction subject to the 2%-of-adjusted-gross-income limit on Schedule A (Form 1040). Amended tax form 2012 For information about miscellaneous deductions, see chapter 28. Amended tax form 2012 Adjusted Basis Adjusted basis is your basis in the property (usually cost) increased or decreased by various events, such as improvements and casualty losses. Amended tax form 2012 For more information, see chapter 13. Amended tax form 2012 Insurance and Other Reimbursements If you receive an insurance payment or other type of reimbursement, you must subtract the reimbursement when you figure your loss. Amended tax form 2012 You do not have a casualty or theft loss to the extent you are reimbursed. Amended tax form 2012 If you expect to be reimbursed for part or all of your loss, you must subtract the expected reimbursement when you figure your loss. Amended tax form 2012 You must reduce your loss even if you do not receive payment until a later tax year. Amended tax form 2012 See Reimbursement Received After Deducting Loss , later. Amended tax form 2012 Failure to file a claim for reimbursement. Amended tax form 2012   If your property is covered by insurance, you must file a timely insurance claim for reimbursement of your loss. Amended tax form 2012 Otherwise, you cannot deduct this loss as a casualty or theft loss. Amended tax form 2012 However, this rule does not apply to the portion of the loss not covered by insurance (for example, a deductible). Amended tax form 2012 Example. Amended tax form 2012 You have a car insurance policy with a $1,000 deductible. Amended tax form 2012 Because your insurance did not cover the first $1,000 of an auto collision, the $1,000 would be deductible (subject to the deduction limits discussed later). Amended tax form 2012 This is true even if you do not file an insurance claim, because your insurance policy would never have reimbursed you for the deductible. Amended tax form 2012 Types of Reimbursements The most common type of reimbursement is an insurance payment for your stolen or damaged property. Amended tax form 2012 Other types of reimbursements are discussed next. Amended tax form 2012 Also see the Instructions for Form 4684. Amended tax form 2012 Employer's emergency disaster fund. Amended tax form 2012   If you receive money from your employer's emergency disaster fund and you must use that money to rehabilitate or replace property on which you are claiming a casualty loss deduction, you must take that money into consideration in computing the casualty loss deduction. Amended tax form 2012 Take into consideration only the amount you used to replace your destroyed or damaged property. Amended tax form 2012 Example. Amended tax form 2012 Your home was extensively damaged by a tornado. Amended tax form 2012 Your loss after reimbursement from your insurance company was $10,000. Amended tax form 2012 Your employer set up a disaster relief fund for its employees. Amended tax form 2012 Employees receiving money from the fund had to use it to rehabilitate or replace their damaged or destroyed property. Amended tax form 2012 You received $4,000 from the fund and spent the entire amount on repairs to your home. Amended tax form 2012 In figuring your casualty loss, you must reduce your unreimbursed loss ($10,000) by the $4,000 you received from your employer's fund. Amended tax form 2012 Your casualty loss before applying the deduction limits discussed later is $6,000. Amended tax form 2012 Cash gifts. Amended tax form 2012   If you receive excludable cash gifts as a disaster victim and there are no limits on how you can use the money, you do not reduce your casualty loss by these excludable cash gifts. Amended tax form 2012 This applies even if you use the money to pay for repairs to property damaged in the disaster. Amended tax form 2012 Example. Amended tax form 2012 Your home was damaged by a hurricane. Amended tax form 2012 Relatives and neighbors made cash gifts to you that were excludable from your income. Amended tax form 2012 You used part of the cash gifts to pay for repairs to your home. Amended tax form 2012 There were no limits or restrictions on how you could use the cash gifts. Amended tax form 2012 Because it was an excludable gift, the money you received and used to pay for repairs to your home does not reduce your casualty loss on the damaged home. Amended tax form 2012 Insurance payments for living expenses. Amended tax form 2012   You do not reduce your casualty loss by insurance payments you receive to cover living expenses in either of the following situations. Amended tax form 2012 You lose the use of your main home because of a casualty. Amended tax form 2012 Government authorities do not allow you access to your main home because of a casualty or threat of one. Amended tax form 2012 Inclusion in income. Amended tax form 2012   If these insurance payments are more than the temporary increase in your living expenses, you must include the excess in your income. Amended tax form 2012 Report this amount on Form 1040, line 21. Amended tax form 2012 However, if the casualty occurs in a federally declared disaster area, none of the insurance payments are taxable. Amended tax form 2012 See Qualified disaster relief payments, under Disaster Area Losses in Publication 547. Amended tax form 2012   A temporary increase in your living expenses is the difference between the actual living expenses you and your family incurred during the period you could not use your home and your normal living expenses for that period. Amended tax form 2012 Actual living expenses are the reasonable and necessary expenses incurred because of the loss of your main home. Amended tax form 2012 Generally, these expenses include the amounts you pay for the following. Amended tax form 2012 Rent for suitable housing. Amended tax form 2012 Transportation. Amended tax form 2012 Food. Amended tax form 2012 Utilities. Amended tax form 2012 Miscellaneous services. Amended tax form 2012 Normal living expenses consist of these same expenses that you would have incurred but did not because of the casualty or the threat of one. Amended tax form 2012 Example. Amended tax form 2012 As a result of a fire, you vacated your apartment for a month and moved to a motel. Amended tax form 2012 You normally pay $525 a month for rent. Amended tax form 2012 None was charged for the month the apartment was vacated. Amended tax form 2012 Your motel rent for this month was $1,200. Amended tax form 2012 You normally pay $200 a month for food. Amended tax form 2012 Your food expenses for the month you lived in the motel were $400. Amended tax form 2012 You received $1,100 from your insurance company to cover your living expenses. Amended tax form 2012 You determine the payment you must include in income as follows. Amended tax form 2012 1) Insurance payment for living expenses $1,100 2) Actual expenses during the month you are unable to use your home because of fire 1,600   3) Normal living expenses 725   4) Temporary increase in living  expenses: Subtract line 3 from line 2 875 5) Amount of payment includible  in income: Subtract line 4  from line 1 $ 225 Tax year of inclusion. Amended tax form 2012   You include the taxable part of the insurance payment in income for the year you regain the use of your main home or, if later, for the year you receive the taxable part of the insurance payment. Amended tax form 2012 Example. Amended tax form 2012 Your main home was destroyed by a tornado in August 2011. Amended tax form 2012 You regained use of your home in November 2012. Amended tax form 2012 The insurance payments you received in 2011 and 2012 were $1,500 more than the temporary increase in your living expenses during those years. Amended tax form 2012 You include this amount in income on your 2012 Form 1040. Amended tax form 2012 If, in 2013, you receive further payments to cover the living expenses you had in 2011 and 2012, you must include those payments in income on your 2013 Form 1040. Amended tax form 2012 Disaster relief. Amended tax form 2012   Food, medical supplies, and other forms of assistance you receive do not reduce your casualty loss unless they are replacements for lost or destroyed property. Amended tax form 2012 Qualified disaster relief payments you receive for expenses you incurred as a result of a federally declared disaster are not taxable income to you. Amended tax form 2012 For more information, see Disaster Area Losses in Publication 547. Amended tax form 2012 Disaster unemployment assistance payments are unemployment benefits that are taxable. Amended tax form 2012 Generally, disaster relief grants and qualified disaster mitigation payments made under the Robert T. Amended tax form 2012 Stafford Disaster Relief and Emergency Assistance Act or the National Flood Insurance Act (as in effect on April 15, 2005) are not includible in your income. Amended tax form 2012 See Disaster Area Losses in Publication 547. Amended tax form 2012 Reimbursement Received After Deducting Loss If you figured your casualty or theft loss using your expected reimbursement, you may have to adjust your tax return for the tax year in which you receive your actual reimbursement. Amended tax form 2012 This section explains the adjustment you may have to make. Amended tax form 2012 Actual reimbursement less than expected. Amended tax form 2012   If you later receive less reimbursement than you expected, include that difference as a loss with your other losses (if any) on your return for the year in which you can reasonably expect no more reimbursement. Amended tax form 2012 Example. Amended tax form 2012 Your personal car had an FMV of $2,000 when it was destroyed in a collision with another car in 2012. Amended tax form 2012 The accident was due to the negligence of the other driver. Amended tax form 2012 At the end of 2012, there was a reasonable prospect that the owner of the other car would reimburse you in full. Amended tax form 2012 You did not have a deductible loss in 2012. Amended tax form 2012 In January 2013, the court awarded you a judgment of $2,000. Amended tax form 2012 However, in July it became apparent that you will be unable to collect any amount from the other driver. Amended tax form 2012 You can deduct the loss in 2013 subject to the limits discussed later. Amended tax form 2012 Actual reimbursement more than expected. Amended tax form 2012   If you later receive more reimbursement than you expected after you claimed a deduction for the loss, you may have to include the extra reimbursement in your income for the year you receive it. Amended tax form 2012 However, if any part of the original deduction did not reduce your tax for the earlier year, do not include that part of the reimbursement in your income. Amended tax form 2012 You do not refigure your tax for the year you claimed the deduction. Amended tax form 2012 For more information, see Recoveries in chapter 12. Amended tax form 2012 If the total of all the reimbursements you receive is more than your adjusted basis in the destroyed or stolen property, you will have a gain on the casualty or theft. Amended tax form 2012 If you have already taken a deduction for a loss and you receive the reimbursement in a later year, you may have to include the gain in your income for the later year. Amended tax form 2012 Include the gain as ordinary income up to the amount of your deduction that reduced your tax for the earlier year. Amended tax form 2012 See Figuring a Gain in Publication 547 for more information on how to treat a gain from the reimbursement of a casualty or theft. Amended tax form 2012 Actual reimbursement same as expected. Amended tax form 2012   If you receive exactly the reimbursement you expected to receive, you do not have to include any of the reimbursement in your income and you cannot deduct any additional loss. Amended tax form 2012 Example. Amended tax form 2012 In December 2013, you had a collision while driving your personal car. Amended tax form 2012 Repairs to the car cost $950. Amended tax form 2012 You had $100 deductible collision insurance. Amended tax form 2012 Your insurance company agreed to reimburse you for the rest of the damage. Amended tax form 2012 Because you expected a reimbursement from the insurance company, you did not have a casualty loss deduction in 2013. Amended tax form 2012 Due to the $100 rule (discussed later under Deduction Limits ), you cannot deduct the $100 you paid as the deductible. Amended tax form 2012 When you receive the $850 from the insurance company in 2014, do not report it as income. Amended tax form 2012 Single Casualty on Multiple Properties Personal property. Amended tax form 2012   Personal property is any property that is not real property. Amended tax form 2012 If your personal property is stolen or is damaged or destroyed by a casualty, you must figure your loss separately for each item of property. Amended tax form 2012 Then combine these separate losses to figure the total loss from that casualty or theft. Amended tax form 2012 Example. Amended tax form 2012 A fire in your home destroyed an upholstered chair, an oriental rug, and an antique table. Amended tax form 2012 You did not have fire insurance to cover your loss. Amended tax form 2012 (This was the only casualty or theft you had during the year. Amended tax form 2012 ) You paid $750 for the chair and you established that it had an FMV of $500 just before the fire. Amended tax form 2012 The rug cost $3,000 and had an FMV of $2,500 just before the fire. Amended tax form 2012 You bought the table at an auction for $100 before discovering it was an antique. Amended tax form 2012 It had been appraised at $900 before the fire. Amended tax form 2012 You figure your loss on each of these items as follows:     Chair Rug Table 1) Basis (cost) $750 $3,000 $100 2) FMV before fire $500 $2,500 $900 3) FMV after fire –0– –0– –0– 4) Decrease in FMV $500 $2,500 $900 5) Loss (smaller of (1) or  (4)) $500 $2,500 $100           6) Total loss     $3,100 Real property. Amended tax form 2012   In figuring a casualty loss on personal-use real property, treat the entire property (including any improvements, such as buildings, trees, and shrubs) as one item. Amended tax form 2012 Figure the loss using the smaller of the adjusted basis or the decrease in FMV of the entire property. Amended tax form 2012 Example. Amended tax form 2012 You bought your home a few years ago. Amended tax form 2012 You paid $160,000 ($20,000 for the land and $140,000 for the house). Amended tax form 2012 You also spent $2,000 for landscaping. Amended tax form 2012 This year a fire destroyed your home. Amended tax form 2012 The fire also damaged the shrubbery and trees in your yard. Amended tax form 2012 The fire was your only casualty or theft loss this year. Amended tax form 2012 Competent appraisers valued the property as a whole at $200,000 before the fire, but only $30,000 after the fire. Amended tax form 2012 (The loss to your household furnishings is not shown in this example. Amended tax form 2012 It would be figured separately on each item, as explained earlier under Personal property . Amended tax form 2012 ) Shortly after the fire, the insurance company paid you $155,000 for the loss. Amended tax form 2012 You figure your casualty loss as follows: 1) Adjusted basis of the entire property (land, building, and landscaping) $162,000 2) FMV of entire property before fire $200,000 3) FMV of entire property after fire 30,000 4) Decrease in FMV of entire  property $170,000 5) Loss (smaller of (1) or (4)) $162,000 6) Subtract insurance 155,000 7) Amount of loss after reimbursement $7,000 Deduction Limits After you have figured your casualty or theft loss, you must figure how much of the loss you can deduct. Amended tax form 2012 If the loss was to property for your personal use or your family's use, there are two limits on the amount you can deduct for your casualty or theft loss. Amended tax form 2012 You must reduce each casualty or theft loss by $100 ($100 rule). Amended tax form 2012 You must further reduce the total of all your casualty or theft losses by 10% of your adjusted gross income (10% rule). Amended tax form 2012 You make these reductions on Form 4684. Amended tax form 2012 These rules are explained next and Table 25-1 summarizes how to apply the $100 rule and the 10% rule in various situations. Amended tax form 2012 For more detailed explanations and examples, see Publication 547. Amended tax form 2012 Table 25-1. Amended tax form 2012 How To Apply the Deduction Limits for Personal-Use Property   $100 Rule 10% Rule General Application You must reduce each casualty or theft loss by $100 when figuring your deduction. Amended tax form 2012 Apply this rule after you have figured the amount of your loss. Amended tax form 2012 You must reduce your total casualty or theft loss by 10% of your adjusted gross income. Amended tax form 2012 Apply this rule after you reduce each loss by $100 (the $100 rule). Amended tax form 2012 Single Event Apply this rule only once, even if many pieces of property are affected. Amended tax form 2012 Apply this rule only once, even if many pieces of property are affected. Amended tax form 2012 More Than One Event Apply to the loss from each event. Amended tax form 2012 Apply to the total of all your losses from all events. Amended tax form 2012 More Than One Person— With Loss From the Same Event (other than a married couple filing jointly) Apply separately to each person. Amended tax form 2012 Apply separately to each person. Amended tax form 2012 Married Couple—With Loss From the Same Event Filing Jointly Apply as if you were one person. Amended tax form 2012 Apply as if you were one person. Amended tax form 2012 Filing Separately Apply separately to each spouse. Amended tax form 2012 Apply separately to each spouse. Amended tax form 2012 More Than One Owner (other than a married couple filing jointly) Apply separately to each owner of jointly owned property. Amended tax form 2012 Apply separately to each owner of jointly owned property. Amended tax form 2012 Property used partly for business and partly for personal purposes. Amended tax form 2012   When property is used partly for personal purposes and partly for business or income-producing purposes, the casualty or theft loss deduction must be figured separately for the personal-use part and for the business or income-producing part. Amended tax form 2012 You must figure each loss separately because the $100 rule and the 10% rule apply only to the loss on the personal-use part of the property. Amended tax form 2012 $100 Rule After you have figured your casualty or theft loss on personal-use property, you must reduce that loss by $100. Amended tax form 2012 This reduction applies to each total casualty or theft loss. Amended tax form 2012 It does not matter how many pieces of property are involved in an event. Amended tax form 2012 Only a single $100 reduction applies. Amended tax form 2012 Example. Amended tax form 2012 A hailstorm damages your home and your car. Amended tax form 2012 Determine the amount of loss, as discussed earlier, for each of these items. Amended tax form 2012 Since the losses are due to a single event, you combine the losses and reduce the combined amount by $100. Amended tax form 2012 Single event. Amended tax form 2012   Generally, events closely related in origin cause a single casualty. Amended tax form 2012 It is a single casualty when the damage is from two or more closely related causes, such as wind and flood damage caused by the same storm. Amended tax form 2012 10% Rule You must reduce the total of all your casualty or theft losses on personal-use property by 10% of your adjusted gross income. Amended tax form 2012 Apply this rule after you reduce each loss by $100. Amended tax form 2012 For more information, see the Form 4684 instructions. Amended tax form 2012 If you have both gains and losses from casualties or thefts, see Gains and losses , later in this discussion. Amended tax form 2012 Example 1. Amended tax form 2012 In June, you discovered that your house had been burglarized. Amended tax form 2012 Your loss after insurance reimbursement was $2,000. Amended tax form 2012 Your adjusted gross income for the year you discovered the theft is $29,500. Amended tax form 2012 You first apply the $100 rule and then the 10% rule. Amended tax form 2012 Figure your theft loss deduction as follows. Amended tax form 2012 1) Loss after insurance $2,000 2) Subtract $100 100 3) Loss after $100 rule $1,900 4) Subtract 10% × $29,500 AGI 2,950 5) Theft loss deduction –0– You do not have a theft loss deduction because your loss after you apply the $100 rule ($1,900) is less than 10% of your adjusted gross income ($2,950). Amended tax form 2012 Example 2. Amended tax form 2012 In March, you had a car accident that totally destroyed your car. Amended tax form 2012 You did not have collision insurance on your car, so you did not receive any insurance reimbursement. Amended tax form 2012 Your loss on the car was $1,800. Amended tax form 2012 In November, a fire damaged your basement and totally destroyed the furniture, washer, dryer, and other items stored there. Amended tax form 2012 Your loss on the basement items after reimbursement was $2,100. Amended tax form 2012 Your adjusted gross income for the year that the accident and fire occurred is $25,000. Amended tax form 2012 You figure your casualty loss deduction as follows. Amended tax form 2012       Base-     Car ment 1) Loss $1,800 $2,100 2) Subtract $100 per incident 100 100 3) Loss after $100 rule $1,700 $2,000 4) Total loss $3,700 5) Subtract 10% × $25,000 AGI 2,500 6) Casualty loss deduction $1,200 Gains and losses. Amended tax form 2012   If you had both gains and losses from casualties or thefts to personal-use property, you must compare your total gains to your total losses. Amended tax form 2012 Do this after you have reduced each loss by any reimbursements and by $100, but before you have reduced the losses by 10% of your adjusted gross income. Amended tax form 2012 Casualty or theft gains do not include gains you choose to postpone. Amended tax form 2012 See Publication 547 for information on the postponement of gain. Amended tax form 2012 Losses more than gains. Amended tax form 2012   If your losses are more than your recognized gains, subtract your gains from your losses and reduce the result by 10% of your adjusted gross income. Amended tax form 2012 The rest, if any, is your deductible loss from personal-use property. Amended tax form 2012 Gains more than losses. Amended tax form 2012   If your recognized gains are more than your losses, subtract your losses from your gains. Amended tax form 2012 The difference is treated as capital gain and must be reported on Schedule D (Form 1040). Amended tax form 2012 The 10% rule does not apply to your gains. Amended tax form 2012 When To Report Gains and Losses Gains. Amended tax form 2012   If you receive an insurance or other reimbursement that is more than your adjusted basis in the destroyed or stolen property, you have a gain from the casualty or theft. Amended tax form 2012 You must include this gain in your income in the year you receive the reimbursement, unless you choose to postpone reporting the gain as explained in Publication 547. Amended tax form 2012 If you have a loss, see Table 25-2 . Amended tax form 2012 Table 25-2. Amended tax form 2012 When To Deduct a Loss IF you have a loss. Amended tax form 2012 . Amended tax form 2012 . Amended tax form 2012 THEN deduct it in the year. Amended tax form 2012 . Amended tax form 2012 . Amended tax form 2012 from a casualty, the loss occurred. Amended tax form 2012 in a federally declared disaster area, the disaster occurred or the year immediately before the disaster. Amended tax form 2012 from a theft, the theft was discovered. Amended tax form 2012 on a deposit treated as a:   • casualty or any ordinary loss, a reasonable estimate can be made. Amended tax form 2012 • bad debt, deposits are totally worthless. Amended tax form 2012 Losses. Amended tax form 2012   Generally, you can deduct a casualty loss that is not reimbursable only in the tax year in which the casualty occurred. Amended tax form 2012 This is true even if you do not repair or replace the damaged property until a later year. Amended tax form 2012   You can deduct theft losses that are not reimbursable only in the year you discover your property was stolen. Amended tax form 2012   If you are not sure whether part of your casualty or theft loss will be reimbursed, do not deduct that part until the tax year when you become reasonably certain that it will not be reimbursed. Amended tax form 2012 Loss on deposits. Amended tax form 2012   If your loss is a loss on deposits in an insolvent or bankrupt financial institution, see Loss on Deposits , earlier. Amended tax form 2012 Disaster Area Loss You generally must deduct a casualty loss in the year it occurred. Amended tax form 2012 However, if you have a casualty loss from a federally declared disaster that occurred in an area warranting public or individual assistance (or both), you can choose to deduct the loss on your tax return or amended return for either of the following years. Amended tax form 2012 The year the disaster occurred. Amended tax form 2012 The year immediately preceding the year the disaster occurred. Amended tax form 2012 Gains. Amended tax form 2012    Special rules apply if you choose to postpone reporting gain on property damaged or destroyed in a federally declared disaster area. Amended tax form 2012 For those special rules, see Publication 547. Amended tax form 2012 Postponed tax deadlines. Amended tax form 2012   The IRS may postpone for up to 1 year certain tax deadlines of taxpayers who are affected by a federally declared disaster. Amended tax form 2012 The tax deadlines the IRS may postpone include those for filing income and employment tax returns, paying income and employment taxes, and making contributions to a traditional IRA or Roth IRA. Amended tax form 2012   If any tax deadline is postponed, the IRS will publicize the postponement in your area by publishing a news release, revenue ruling, revenue procedure, notice, announcement, or other guidance in the Internal Revenue Bulletin (IRB). Amended tax form 2012 Go to www. Amended tax form 2012 irs. Amended tax form 2012 gov/uac/Tax-Relief-in-Disaster-Situations to find out if a tax deadline has been postponed for your area. Amended tax form 2012 Who is eligible. Amended tax form 2012   If the IRS postpones a tax deadline, the following taxpayers are eligible for the postponement. Amended tax form 2012 Any individual whose main home is located in a covered disaster area (defined next). Amended tax form 2012 Any business entity or sole proprietor whose principal place of business is located in a covered disaster area. Amended tax form 2012 Any individual who is a relief worker affiliated with a recognized government or philanthropic organization who is assisting in a covered disaster area. Amended tax form 2012 Any individual, business entity, or sole proprietorship whose records are needed to meet a postponed tax deadline, provided those records are maintained in a covered disaster area. Amended tax form 2012 The main home or principal place of business does not have to be located in the covered disaster area. Amended tax form 2012 Any estate or trust that has tax records necessary to meet a postponed tax deadline, provided those records are maintained in a covered disaster area. Amended tax form 2012 The spouse on a joint return with a taxpayer who is eligible for postponements. Amended tax form 2012 Any individual, business entity, or sole proprietorship not located in a covered disaster area, but whose records necessary to meet a postponed tax deadline are located in the covered disaster area. Amended tax form 2012 Any individual visiting the covered disaster area who was killed or injured as a result of the disaster. Amended tax form 2012 Any other person determined by the IRS to be affected by a federally declared disaster. Amended tax form 2012 Covered disaster area. Amended tax form 2012   This is an area of a federally declared disaster in which the IRS has decided to postpone tax deadlines for up to 1 year. Amended tax form 2012 Abatement of interest and penalties. Amended tax form 2012   The IRS may abate the interest and penalties on underpaid income tax for the length of any postponement of tax deadlines. Amended tax form 2012 More information. Amended tax form 2012   For more information, see Disaster Area Losses in Publication 547. Amended tax form 2012 How To Report Gains and Losses Use Form 4684 to report a gain or a deductible loss from a casualty or theft. Amended tax form 2012 If you have more than one casualty or theft, use a separate Form 4684 to determine your gain or loss for each event. Amended tax form 2012 Combine the gains and losses on one Form 4684. Amended tax form 2012 Follow the form instructions as to which lines to fill out. Amended tax form 2012 In addition, you must use the appropriate schedule to report a gain or loss. Amended tax form 2012 The schedule you use depends on whether you have a gain or loss. Amended tax form 2012 If you have a: Report it on: Gain Schedule D (Form 1040) Loss Schedule A (Form 1040) Adjustments to basis. Amended tax form 2012   If you have a casualty or theft loss, you must decrease your basis in the property by any insurance or other reimbursement you receive, and by any deductible loss. Amended tax form 2012 Amounts you spend to restore your property after a casualty increase your adjusted basis. Amended tax form 2012 See Adjusted Basis in chapter 13 for more information. Amended tax form 2012 Net operating loss (NOL). Amended tax form 2012    If your casualty or theft loss deduction causes your deductions for the year to be more than your income for the year, you may have an NOL. Amended tax form 2012 You can use an NOL to lower your tax in an earlier year, allowing you to get a refund for tax you have already paid. Amended tax form 2012 Or, you can use it to lower your tax in a later year. Amended tax form 2012 You do not have to be in business to have an NOL from a casualty or theft loss. Amended tax form 2012 For more information, see Publication 536, Net Operating Losses (NOLs) for Individuals, Estates, and Trusts. Amended tax form 2012 Prev  Up  Next   Home   More Online Publications
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The Amended Tax Form 2012

Amended tax form 2012 14. Amended tax form 2012   Excise Taxes Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: Fuels Used in FarmingBuyer of fuel, including undyed diesel fuel or undyed kerosene. Amended tax form 2012 Undyed diesel fuel, undyed kerosene, and Other Fuels (including alternative fuel). Amended tax form 2012 Custom application of fertilizer and pesticide. Amended tax form 2012 Fuel not used for farming. Amended tax form 2012 Dyed Diesel Fuel and Dyed Kerosene Fuels Used in Off-Highway Business Use Fuels Used for Household Purposes or Other Than as a Fuel for Propulsion Engines How To Claim a Credit or RefundCredit only. Amended tax form 2012 Claiming a Credit Claiming a Refund Including the Credit or Refund in Income Introduction You may be eligible to claim a credit on your income tax return for the federal excise tax on certain fuels. Amended tax form 2012 You may also be eligible to claim a quarterly refund of the fuel taxes during the year, instead of waiting to claim a credit on your income tax return. Amended tax form 2012 Whether you can claim a credit or refund depends on whether the fuel was taxed and the purpose (nontaxable use) for which you used the fuel. Amended tax form 2012 The nontaxable uses of fuel for which a farmer may claim a credit or refund are generally the following. Amended tax form 2012 Use on a farm for farming purposes. Amended tax form 2012 Off-highway business use. Amended tax form 2012 Uses other than as a fuel in a propulsion engine, such as home use. Amended tax form 2012 Table 14-1 presents an overview of credits and refunds that may be claimed for fuels used for the nontaxable uses listed above. Amended tax form 2012 See Publication 510, Excise Taxes, for more information. Amended tax form 2012 Topics - This chapter discusses: Fuels used in farming Dyed diesel fuel and dyed kerosene Fuels used in off-highway business use Fuels used for household purposes How to claim a credit or refund Including the credit or refund in income Useful Items - You may want to see: Publication 510 Excise Taxes Form (and Instructions) 720 Quarterly Federal Excise Tax Return 4136 Credit for Federal Tax Paid on Fuels 8849 Claim for Refund of Excise Taxes See chapter 16 for information about getting publications and forms. Amended tax form 2012 Fuels Used in Farming Owners, operators, and tenants of farms and certain other persons may be eligible to claim a credit or refund of excise taxes on fuel used in the trade or business of farming, when used on a farm in the United States for farming purposes. Amended tax form 2012 See Table 14-1 for a list of available fuel tax credits and refunds. Amended tax form 2012 Fuel is used on a farm for farming purposes only if used in carrying on a trade or business of farming, on a farm in the United States, and for farming purposes. Amended tax form 2012 Farm. Amended tax form 2012   A farm includes livestock, dairy, fish, poultry, fruit, fur-bearing animals, and truck farms, orchards, plantations, ranches, nurseries, ranges, and feed yards for finishing cattle. Amended tax form 2012 It also includes structures such as greenhouses used primarily for raising agricultural or horticultural commodities. Amended tax form 2012 A fish farm is an area where fish are grown or raised and not merely caught or harvested. Amended tax form 2012 Table 14-1. Amended tax form 2012 Fuel Tax Credits and Refunds at a Glance Use this table to see if you can take a credit or refund for a nontaxable use of the fuel listed. Amended tax form 2012 Fuel Used On a Farm for Farming Purposes Off-Highway Business Use Household Use or Use Other Than as a Fuel1 Gasoline Credit only Credit or refund None Aviation gasoline Credit only None None Undyed diesel fuel and undyed kerosene Credit or refund Credit or refund2 Credit or refund2 Kerosene for use in aviation Credit or refund None None Dyed diesel fuel and dyed kerosene None None None Other Fuels (including alternative fuels)3 Credit or refund Credit or refund None 1For a use other than as fuel in a propulsion engine. Amended tax form 2012 2Applies to undyed kerosene not sold from a blocked pump or, under certain circumstances, for blending with undyed diesel fuel to be used for heating purposes. Amended tax form 2012 See Reg. Amended tax form 2012 48. Amended tax form 2012 6427-10 (b)(1) for the definition of a blocked pump. Amended tax form 2012 3Other Fuels means any liquid except gas oil, fuel oil, or any product taxable under Internal Revenue Code section 4081. Amended tax form 2012 It includes the alternative fuels: liquefied petroleum gas (LPG),“P” Series fuels, compressed natural gas (CNG), liquefied hydrogen, any liquid fuel derived from coal (including peat) through the Fischer-Tropsch process, liquid fuel derived from biomass, liquid natural gas (LNG), liquefied gas derived from biomass, and compressed gas derived from biomass. Amended tax form 2012 Farming purposes. Amended tax form 2012   As the owner, tenant, or operator and the ultimate purchaser of fuel that you purchased, you use the fuel on a farm for farming purposes if you use it in any of the following ways. Amended tax form 2012 To cultivate the soil or to raise or harvest any agricultural or horticultural commodity. Amended tax form 2012 To raise, shear, feed, care for, train, or manage livestock, bees, poultry, fur-bearing animals, or wildlife. Amended tax form 2012 To operate, manage, conserve, improve, or maintain your farm and its tools and equipment. Amended tax form 2012 To handle, dry, pack, grade, or store any raw agricultural or horticultural commodity. Amended tax form 2012 For this use to qualify, you must have produced more than half the commodity so treated during the tax year. Amended tax form 2012 The more-than-one-half test applies separately to each commodity. Amended tax form 2012 Commodity means a single raw product. Amended tax form 2012 For example, apples and peaches are two separate commodities. Amended tax form 2012 To plant, cultivate, care for, or cut trees or to prepare (other than sawing logs into lumber, chipping, or other milling) trees for market, but only if these activities are incidental to your farming operations. Amended tax form 2012 Your tree operations are incidental only if they are minor in nature when compared to the total farming operations. Amended tax form 2012   If any other person, such as a neighbor or custom operator (independent contractor), performs a service for you on your farm for any of the purposes included in list items (1) or (2), above, you are considered to be the ultimate purchaser who used the fuel on a farm for farming purposes. Amended tax form 2012 Therefore, you can still claim the credit or refund for the fuel so used. Amended tax form 2012 However, see Custom application of fertilizer and pesticide, later. Amended tax form 2012 If the other person performs any other services for you on your farm for purposes not included in list items (1) or (2) above, no one can claim the credit or refund for fuel used on your farm for those other services. Amended tax form 2012 Buyer of fuel, including undyed diesel fuel or undyed kerosene. Amended tax form 2012   If doubt exists whether the owner, tenant, or operator of the farm bought the fuel, determine who actually bore the cost of the fuel. Amended tax form 2012 For example, if the owner of a farm and his or her tenant equally share the cost of gasoline used on the farm, each can claim a credit for the tax on half the fuel used. Amended tax form 2012 Undyed diesel fuel, undyed kerosene, and Other Fuels (including alternative fuel). Amended tax form 2012   Usually, the farmer is the only person who can make a claim for credit or refund for the tax on undyed diesel fuel, undyed kerosene, or other fuels (including alternative fuel) used for farming purposes. Amended tax form 2012 However, see Custom application of fertilizer and pesticide, next. Amended tax form 2012 Also see Dyed Diesel Fuel and Dyed Kerosene, later. Amended tax form 2012 Example. Amended tax form 2012 Farm owner Haleigh Blue hired custom operator Tyler Steele to cultivate the soil on her farm. Amended tax form 2012 Tyler used 200 gallons of undyed diesel fuel that he purchased to perform the work on Haleigh's farm. Amended tax form 2012 In addition, Haleigh hired contractor Lee Brown to pack and store her apple crop. Amended tax form 2012 Lee bought 25 gallons of undyed diesel fuel to use in packing the apples. Amended tax form 2012 Haleigh can claim the credit for the 200 gallons of undyed diesel fuel used by Tyler on her farm because it qualifies as fuel used on the farm for farming purposes. Amended tax form 2012 No one can claim a credit for the 25 gallons used by Lee because that fuel was not used for a farming purpose included in list items (1) or (2), above. Amended tax form 2012 In the above example, both Tyler Steele and Lee Brown could have purchased dyed (untaxed) diesel fuel for their tasks. Amended tax form 2012 Custom application of fertilizer and pesticide. Amended tax form 2012   Fuel used on a farm for farming purposes includes fuel used in the application (including aerial application) of fertilizer, pesticides, or other substances. Amended tax form 2012 Generally, the applicator is treated as having used the fuel on a farm for farming purposes. Amended tax form 2012 For applicators using highway vehicles, only the fuel used on the farm is exempt. Amended tax form 2012 Fuel used traveling on the highway to and from the farm is taxable. Amended tax form 2012 Fuel used by an aerial applicator for the direct flight between the airfield and one or more farms is treated as used for a farming purpose. Amended tax form 2012 For aviation gasoline, the aerial applicator makes the claim as the ultimate purchaser. Amended tax form 2012 For kerosene used in aviation, the ultimate purchaser may make the claim or waive the right to make the claim to the registered ultimate vendor. Amended tax form 2012 A sample waiver is included as Model Waiver L in the appendix of Publication 510. Amended tax form 2012 A registered ultimate vendor is the person who sells undyed diesel fuel, undyed kerosene, or kerosene for use in aviation to the user (ultimate purchaser) of the fuel for use on a farm for farming purposes. Amended tax form 2012 To claim a credit or refund of tax, the ultimate vendor must be registered with the Internal Revenue Service at the time the claim is made. Amended tax form 2012 However, registered ultimate vendors cannot make claims for undyed diesel fuel and undyed kerosene sold for use on a farm for farming purposes. Amended tax form 2012 Fuel not used for farming. Amended tax form 2012   You do not use fuel on a farm for farming purposes when you use it in any of the following ways. Amended tax form 2012 Off the farm, such as on the highway or in noncommercial aviation, even if the fuel is used in transporting livestock, feed, crops, or equipment. Amended tax form 2012 For personal use, such as lawn mowing. Amended tax form 2012 In processing, packaging, freezing, or canning operations. Amended tax form 2012 In processing crude gum into gum spirits of turpentine or gum resin or in processing maple sap into maple syrup or maple sugar. Amended tax form 2012 All-terrain vehicles (ATVs). Amended tax form 2012   Fuel used in ATVs on a farm for farming purposes, discussed earlier, is eligible for a credit or refund of excise taxes on the fuel. Amended tax form 2012 Fuel used in ATVs for nonfarming purposes is not eligible for a credit or refund of the taxes. Amended tax form 2012 If ATVs are used both for farming and nonfarming purposes, only that portion of the fuel used for farming purposes is eligible for the credit or refund. Amended tax form 2012 Dyed Diesel Fuel and Dyed Kerosene If you purchase dyed diesel fuel or dyed kerosene for a nontaxable use, you must use it only on a farm for farming purposes or for other nontaxable purposes. Amended tax form 2012 For example, you should not use dyed diesel fuel in a truck that is used both on the farm for farming purposes and on the highway, even though the highway use is in connection with farm business. Amended tax form 2012 Excise tax applies to the fuel used by the truck on the highways. Amended tax form 2012 In this situation, undyed (taxed) fuel should be purchased for the truck. Amended tax form 2012 You should keep fuel records of the use of the truck on the farm for farming purposes, and for other uses. Amended tax form 2012 You may be eligible for a credit or refund for the excise tax on fuel used on the farm for farming purposes. Amended tax form 2012 Penalty. Amended tax form 2012   A penalty is imposed on any person who knowingly uses, sells, or alters dyed diesel fuel or dyed kerosene for any purpose other than a nontaxable use. Amended tax form 2012 The penalty is the greater of $1,000 or $10 per gallon of the dyed diesel fuel or dyed kerosene involved. Amended tax form 2012 After the first violation, the $1,000 portion of the penalty increases depending on the number of violations. Amended tax form 2012 For more information on this penalty, see Publication 510. Amended tax form 2012 Fuels Used in Off-Highway Business Use You may be eligible to claim a credit or refund for the excise tax on fuel used in an off-highway business use. Amended tax form 2012 Off-highway business use. Amended tax form 2012   This is any use of fuel in a trade or business or in an income-producing activity. Amended tax form 2012 The use must not be in a highway vehicle registered or required to be registered for use on public highways. Amended tax form 2012 Off-highway business use generally does not include any use in a recreational motorboat. Amended tax form 2012 Examples. Amended tax form 2012   Off-highway business use includes the use of fuels in a trade or business in any of the following ways. Amended tax form 2012 In stationary machines such as generators, compressors, power saws, and similar equipment; For cleaning ; and In forklift trucks, bulldozers, and earthmovers. Amended tax form 2012   Off-highway nonbusiness (taxable) use of fuel includes: use in minibikes, snowmobiles, power lawn mowers, chain saws, and other yard equipment. Amended tax form 2012 For more information, see Publication 510. Amended tax form 2012 Fuels Used for Household Purposes or Other Than as a Fuel for Propulsion Engines You may be eligible to claim a credit or refund for the excise tax on undyed diesel fuel or kerosene used for home heating, lighting, and cooking. Amended tax form 2012 This also applies to diesel fuel and kerosene used in a home generator to produce electricity for home use. Amended tax form 2012 Home use of a fuel does not include use in a propulsion engine and it is not considered an off-highway business use. Amended tax form 2012 How To Claim a Credit or Refund You may be able to claim a credit or refund of the excise tax on fuels you use for nontaxable uses. Amended tax form 2012 The basic rules for claiming credits and refunds are listed in Table 14-2 . Amended tax form 2012 Table 14-2. Amended tax form 2012 Claiming a Credit or Refund of Excise Taxes This table gives the basic rules for claiming a credit or refund of excise taxes on fuels used for a nontaxable use. Amended tax form 2012   Credit Refund Which form to use Form 4136, Credit for Federal Tax Paid on Fuels Form 8849, Claim for Refund of Excise Taxes, and Schedule 1 (Form 8849), Nontaxable Use of Fuels Type of form Annual Quarterly When to file With your income tax return By the last day of the quarter following the last quarter included in the claim Amount of tax Any amount $750 or more1 1You may carry over an amount less than $750 to the next quarter. Amended tax form 2012 Keep at your principal place of business all records needed to enable the IRS to verify that you are the person entitled to claim a credit or refund and the amount you claimed. Amended tax form 2012 You do not have to use any special form, but the records should establish the following information. Amended tax form 2012 The total number of gallons bought and used during the period covered by your claim. Amended tax form 2012 The dates of the purchases. Amended tax form 2012 The names and addresses of suppliers and amounts bought from each during the period covered by your claim. Amended tax form 2012 The nontaxable use for which you used the fuel. Amended tax form 2012 The number of gallons used for each nontaxable use. Amended tax form 2012 It is important that your records separately show the number of gallons used for each nontaxable use that qualifies as a claim. Amended tax form 2012 For more information about recordkeeping, see Publication 583, Starting a Business and Keeping Records. Amended tax form 2012 Credit or refund. Amended tax form 2012   A credit is an amount that reduces the tax on your income tax return when you file it at the end of the year. Amended tax form 2012 If you meet certain requirements, you may claim a refund during the year instead of waiting until you file your income tax return. Amended tax form 2012 Credit only. Amended tax form 2012   You can claim the following taxes only as a credit on your income tax return. Amended tax form 2012 Tax on gasoline and aviation gasoline you used on a farm for farming purposes. Amended tax form 2012 Tax on fuels (including undyed diesel fuel or undyed kerosene) you used for nontaxable uses if the total for the tax year is less than $750. Amended tax form 2012 Tax on fuel you did not include in any claim for refund previously filed for any quarter of the tax year. Amended tax form 2012 Claiming a Credit You make a claim for a fuel tax credit on Form 4136 and attach it to your income tax return. Amended tax form 2012 Do not claim a credit for any excise tax for which you have filed a refund claim. Amended tax form 2012 How to claim a credit. Amended tax form 2012   How you claim a credit depends on whether you are an individual, partnership, corporation, S corporation, trust, or farmers' cooperative association. Amended tax form 2012 Individuals. Amended tax form 2012   You claim the credit on the “Credit for federal tax on fuels” line of your Form 1040. Amended tax form 2012 If you would not otherwise have to file an income tax return, you must do so to get a fuel tax credit. Amended tax form 2012 Partnership. Amended tax form 2012   Partnerships (other than electing large partnerships) claim the credit by including a statement on Schedule K-1 (Form 1065), Partner's Share of Income, Deductions, Credits, etc. Amended tax form 2012 , showing each partner's share of the number of gallons of each fuel sold or used for a nontaxable use, the type of use, and the applicable credit per gallon. Amended tax form 2012 Each partner claims the credit on his or her income tax return for the partner's share of the fuel used by the partnership. Amended tax form 2012 An electing large partnership can claim the credit on the “Other payments” line of Form 1065-B, U. Amended tax form 2012 S. Amended tax form 2012 Return of Income for Electing Large Partnerships. Amended tax form 2012 Other entities. Amended tax form 2012   Corporations, S corporations, farmers' cooperative associations, and trusts make the claim on the appropriate line of their income tax return. Amended tax form 2012 When to claim a credit. Amended tax form 2012   You can claim a fuel tax credit on your income tax return for the year you used the fuel. Amended tax form 2012 You may be able to make a fuel tax claim on an amended income tax return for the year you used the fuel. Amended tax form 2012 A claim for credit or refund of an overpayment must generally be filed within the later of: Three years from the date the original return was filed, or Two years from the date the tax was paid. Amended tax form 2012 Claiming a Refund Generally, you may claim a refund of excise taxes on Form 8849. Amended tax form 2012 Complete and attach to Form 8849 the appropriate Form 8849 schedule(s). Amended tax form 2012 The instructions for Form 8849 and the separate instructions for each schedule explain the requirements for making a claim for refund. Amended tax form 2012 If you file Form 720, you can use its Schedule C for your refund claims for the quarter. Amended tax form 2012 See the Instructions for Form 720. Amended tax form 2012 Do not claim a refund on Form 8849 for any amount for which you have filed or will file a claim on Form 720 or Form 4136. Amended tax form 2012 You may file a claim for refund for any quarter of your tax year for which you can claim $750 or more. Amended tax form 2012 This amount is the excise tax on all fuels used for a nontaxable use during that quarter or any prior quarter (for which no other claim has been filed) during the tax year. Amended tax form 2012 If you cannot claim at least $750 at the end of a quarter, you carry the amount over to the next quarter of your tax year to determine if you can claim at least $750 for that quarter. Amended tax form 2012 If you cannot claim at least $750 at the end of the fourth quarter of your tax year, you must claim a credit on your income tax return using Form 4136. Amended tax form 2012 Only one claim can be filed for a quarter. Amended tax form 2012 You cannot claim a refund for excise tax on gasoline and aviation gasoline used on a farm for farming purposes. Amended tax form 2012 You must claim a credit on your income tax return for the tax. Amended tax form 2012 How to file a quarterly claim. Amended tax form 2012   File the claim for refund by filling out Schedule 1 (Form 8849) and attaching it to Form 8849. Amended tax form 2012 Send it to the address shown in the instructions. Amended tax form 2012 If you file Form 720, you can use its Schedule C for your refund claims. Amended tax form 2012 See the Instructions for Form 720. Amended tax form 2012 When to file a quarterly claim. Amended tax form 2012   You must file a quarterly claim by the last day of the first quarter following the last quarter included in the claim. Amended tax form 2012 If you do not file a timely refund claim for the fourth quarter of your tax year, you will have to claim a credit for that amount on your income tax return, as discussed earlier. Amended tax form 2012    In most situations, the amount claimed as a credit or refund will be less than the amount deducted as fuel tax expense because the Leaking Underground Storage Tank (LUST) tax of $0. Amended tax form 2012 001 per gallon is generally not subject to credit or refund. Amended tax form 2012 Including the Credit or Refund in Income Include any credit or refund of excise taxes on fuels in your gross income if you claimed the total cost of the fuel (including the excise taxes) as an expense deduction that reduced your income tax liability. Amended tax form 2012 Which year you include a credit or refund in gross income depends on whether you use the cash or an accrual method of accounting. Amended tax form 2012 Cash method. Amended tax form 2012   If you use the cash method and file a claim for refund, include the refund amount in gross income for the tax year in which you receive the refund. Amended tax form 2012 If you claim a credit on your income tax return, include the credit amount in gross income for the tax year in which you file Form 4136. Amended tax form 2012 If you file an amended return and claim a credit, include the credit amount in gross income for the tax year in which you receive the credit. Amended tax form 2012 Example. Amended tax form 2012 Sharon Brown, a farmer who uses the cash method, filed her 2012 Form 1040 on March 3, 2013. Amended tax form 2012 On her Schedule F, she deducted the total cost of gasoline (including $110 of excise taxes) used on the farm for farming purposes. Amended tax form 2012 Then, on Form 4136, she claimed the $110 as a credit. Amended tax form 2012 Sharon reports the $110 as other income on line 8b of her 2013 Schedule F. Amended tax form 2012 Accrual method. Amended tax form 2012   If you use an accrual method, include the amount of credit or refund in gross income for the tax year in which you used the fuels. Amended tax form 2012 It does not matter whether you filed for a quarterly refund or claimed the entire amount as a credit. Amended tax form 2012 Example. Amended tax form 2012 Patty Green, a farmer who uses the accrual method, files her 2012 Form 1040 on April 15, 2013. Amended tax form 2012 On Schedule F, she deducts the total cost of gasoline (including $155 of excise taxes) she used on the farm for farming purposes during 2012. Amended tax form 2012 On Form 4136, Patty claims the $155 as a credit. Amended tax form 2012 She reports the $155 as other income on line 8b of her 2012 Schedule F. 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