Filing Your Taxes Online is Fast, Easy and Secure.
Start now and receive your tax refund in as little as 7 days.

1. Get Answers

Your online questions are customized to your unique tax situation.

2. Maximize your Refund

Find tax credits for everything from school tuition to buying a hybri

3. E-File for FREE

E-file free with direct deposit to get your refund in as few as 7 days.

Filing your taxes with paper mail can be difficult and it could take weeks for your refund to arrive. IRS e-file is easy, fast and secure. There is no paperwork going to the IRS so tax refunds can be processed in as little as 7 days with direct deposit. As you prepare your taxes online, you can see your tax refund in real time.

FREE audit support and representation from an enrolled agent – NEW and only from H&R Block

Amendment Form

Irs File 2012 TaxesFree 2013 Federal & State Tax Preparation On LinePrintable Tax Forms 1040ezForm 1040x 2010Didn't File Taxes Last YearIncome Tax Form 1040ezVita Tax ProgramForm1040xFree 2011 Tax Forms1040ez Forms PrintableFree Federal State Tax FilingFree State Tax FillingEfile State Tax FreeFiling An Amended ReturnStudent Tax ReturnState Tax Return For FreeTax Forms Download Ez 10401040x 2012File 2011 Tax ReturnI Need Tax Instruction Booklet For 1040ezHow To File A Amended Tax Return2012 State Tax Form2011 Irs 1040ez FormH&r BlockIrs Form 1040ez 2012How To File 1040x ElectronicallyAmended Return Form1040 Ez Tax TableAmendDoyourtaxes NetI Need To File A 2011 Tax ReturnHow Do I File 2012 Tax ReturnInstructions For Form 1040xBuy Turbotax 2011File 2011 Taxes In 2013 FreeTax Amendment Form 2012My PayTax Extension Online FreeWhere Can I Find State Tax FormsEfile State Tax

Amendment Form

Amendment form 2. Amendment form   Possession Source Income Table of Contents Types of IncomeCompensation for Labor or Personal Services Investment Income Sales or Other Dispositions of Property Scholarships, Fellowships, Grants, Prizes, and Awards Effectively Connected Income In order to determine where to file your return and which form(s) you need to complete, you must determine the source of each item of income you received during the tax year. Amendment form Income you received from sources within, or that was effectively connected with the conduct of a trade or business within, the relevant possession must be identified separately from U. Amendment form S. Amendment form or foreign source income. Amendment form This chapter discusses the rules for determining if the source of your income is from: American Samoa, The Commonwealth of the Northern Mariana Islands (CNMI), The Commonwealth of Puerto Rico (Puerto Rico), Guam, or The U. Amendment form S. Amendment form Virgin Islands (USVI). Amendment form Generally, the same rules that apply for determining U. Amendment form S. Amendment form source income also apply for determining possession source income. Amendment form However, there are some important exceptions to these rules. Amendment form Both the general rules and the exceptions are discussed in this chapter. Amendment form U. Amendment form S. Amendment form income rule. Amendment form   This rule states that income is not possession source income if, under the rules of Internal Revenue Code sections 861–865, it is treated as income: From sources within the United States, or Effectively connected with the conduct of a trade or business within the United States. Amendment form Table 2-1 shows the general rules for determining whether income is from sources within the United States. Amendment form Table 2-1. Amendment form General Rules for Determining U. Amendment form S. Amendment form Source of Income Item of Income Factor Determining Source Salaries, wages, and other compensation for labor or personal services Where labor or services performed Pensions Contributions: Where services were performed that earned the pension Investment earnings: Where pension trust is located Interest Residence of payer Dividends Where corporation created or organized Rents Location of property Royalties:   Natural resources Location of property Patents, copyrights, etc. Amendment form Where property is used Sale of business inventory—purchased Where sold Sale of business inventory—produced Allocation if produced and sold in different locations Sale of real property Location of property Sale of personal property Seller's tax home (but see Special Rules for Gains From Dispositions of Certain Property , later, for exceptions) Sale of natural resources Allocation based on fair market value of product at export terminal. Amendment form For more information, see Regulations section 1. Amendment form 863-1(b). Amendment form Types of Income This section looks at the most common types of income received by individuals, and the rules for determining the source of the income. Amendment form Generally, the same rules shown in Table 2-1 are used to determine if you have possession source income. Amendment form Compensation for Labor or Personal Services Income from labor or personal services includes wages, salaries, commissions, fees, per diem allowances, employee allowances and bonuses, and fringe benefits. Amendment form It also includes income earned by sole proprietors and general partners from providing personal services in the course of their trade or business. Amendment form Services performed wholly within a relevant possession. Amendment form   Generally, all pay you receive for services performed in a relevant possession is considered to be from sources within that possession. Amendment form However, there is an exception for income earned as a member of the U. Amendment form S. Amendment form Armed Forces or a civilian spouse. Amendment form U. Amendment form S. Amendment form Armed Forces. Amendment form   If you are a bona fide resident of a relevant possession, your military service pay will be sourced in that possession even if you perform the services in the United States or another possession. Amendment form However, if you are not a bona fide resident of a possession, your military service pay will be income from the  United States even if you perform services in a possession. Amendment form Civilian spouse of active duty member of the U. Amendment form S. Amendment form Armed Forces. Amendment form   If you are a bona fide resident of a U. Amendment form S. Amendment form possession and choose to keep that possession as your tax residence under MSRRA when relocating with your servicemember spouse under military orders, the source of income for your labor or personal services is considered to be that possession. Amendment form Likewise, if your tax residence is in one of the 50 states or the District of Columbia before relocating and you choose to keep it as your tax residence, the source of income for services performed in any of the U. Amendment form S. Amendment form possessions is considered to be the United States and, specifically, your state of residence or the District of Columbia. Amendment form Services performed partly inside and partly outside a relevant possession. Amendment form   If you are an employee and receive compensation for labor or personal services performed both inside and outside the relevant possession, special rules apply in determining the source of the compensation. Amendment form Compensation (other than certain fringe benefits) is sourced on a time basis. Amendment form Certain fringe benefits (such as housing and education) are sourced on a geographical basis. Amendment form   Or, you may be permitted to use an alternative basis to determine the source of compensation. Amendment form See Alternative basis , later. Amendment form   If you are self-employed, determine the source of your income for labor or personal services from self-employment on the basis that most correctly reflects the proper source of that income under the facts and circumstances of your particular case. Amendment form In many cases, the facts and circumstances will call for an apportionment on a time basis as explained next. Amendment form Time basis. Amendment form   Use a time basis to figure your compensation for labor or personal services from the relevant possession (other than the fringe benefits discussed later). Amendment form Do this by multiplying your total compensation (other than the fringe benefits discussed later) by the following fraction:   Number of days you performed  services in the relevant  possession during the year     Total number of days you  performed services during the year           You can use a unit of time less than a day in the above fraction, if appropriate. Amendment form The time period for which the income is made does not have to be a year. Amendment form Instead, you can use another distinct, separate, and continuous time period if you can establish to the satisfaction of the IRS that this other period is more appropriate. Amendment form Example. Amendment form In 2013, you worked in your employer's office in the United States for 60 days and in the Puerto Rico office for 180 days, earning a total of $80,000 for the year. Amendment form Your Puerto Rico source income is $60,000, figured as follows. Amendment form       180 days 240 days × $80,000 = $60,000                 Multi-year compensation. Amendment form   The source of multi-year compensation is generally determined on a time basis over the period to which the compensation is attributable. Amendment form Multi-year compensation is compensation that is included in your income in 1 tax year but is attributable to a period that includes 2 or more tax years. Amendment form You determine the period to which the income is attributable based on the facts and circumstances of your case. Amendment form For more information on multi-year compensation, see Treasury Decision (T. Amendment form D. Amendment form ) 9212 and Regulations section 1. Amendment form 861-4, 2005-35 I. Amendment form R. Amendment form B. Amendment form 429, available at www. Amendment form irs. Amendment form gov/irb/2005-35_IRB/ar14. Amendment form html. Amendment form Certain fringe benefits sourced on a geographical basis. Amendment form   If you received any of the following fringe benefits as compensation for labor or services performed as an employee partly inside and partly outside a relevant possession, you must source that income on a geographical basis. Amendment form Housing. Amendment form Education. Amendment form Local transportation. Amendment form Tax reimbursement. Amendment form Hazardous or hardship duty pay. Amendment form Moving expense reimbursement. Amendment form For information on determining the source of the fringe benefits listed above, see Regulations section 1. Amendment form 861-4. Amendment form Alternative basis. Amendment form   You can determine the source of your compensation under an alternative basis if you establish to the satisfaction of the IRS that, under the facts and circumstances of your case, the alternative basis more properly determines the source of your income than the time or geographical basis. Amendment form If you use an alternative basis, you must keep (and have available for inspection) records to document why the alternative basis more properly determines the source of your income. Amendment form De minimis exception. Amendment form   There is an exception to the rule for determining the source of income earned in a possession. Amendment form Generally, you will not have income from a possession if during a tax year you: Are a U. Amendment form S. Amendment form citizen or resident, Are not a bona fide resident of that possession, Are not employed by or under contract with an individual, partnership, or corporation that is engaged in a trade or business in that possession, Temporarily perform services in that possession for 90 days or less, and Earned $3,000 or less from such services. Amendment form This exception began with income earned during your 2008 tax year. Amendment form Pensions. Amendment form   Generally, pension income has two components: contributions to the pension plan and the earnings accrued from investing those contributions. Amendment form The contribution portion is sourced according to where services were performed that earned the pension. Amendment form The investment earnings portion is sourced according to the location of the pension trust. Amendment form Example. Amendment form You are a U. Amendment form S. Amendment form citizen who worked in Puerto Rico for a U. Amendment form S. Amendment form company. Amendment form All services were performed in Puerto Rico. Amendment form Upon retirement you remained in Puerto Rico and began receiving your pension from the U. Amendment form S. Amendment form pension trust of your employer. Amendment form Distributions from the U. Amendment form S. Amendment form pension trust must be allocated between (1) contributions, which are Puerto Rico source income, and (2) investment earnings, which are U. Amendment form S. Amendment form source income. Amendment form Investment Income This category includes such income as interest, dividends, rents, and royalties. Amendment form Interest income. Amendment form   The source of interest income is generally determined by the residence of the payer. Amendment form Interest paid by corporations created or organized in a relevant possession (possession corporation) or by individuals who are bona fide residents of a relevant possession is considered income from sources within that possession. Amendment form   However, there is an exception to this rule if you are a bona fide resident of a relevant possession, receive interest from a corporation created or organized in that possession, and are a shareholder of that corporation who owns, directly or indirectly, at least 10% of the total voting stock of the corporation. Amendment form See Regulations section 1. Amendment form 937-2(i) for more information. Amendment form Dividends. Amendment form   Generally, dividends paid by a corporation created or organized in a relevant possession will be considered income from sources within that possession. Amendment form There are additional rules for bona fide residents of a relevant possession who receive dividend income from possession corporations, and who own, directly or indirectly, at least 10% of the voting stock of the corporation. Amendment form For more information, see Regulations section 1. Amendment form 937-2(g). Amendment form Rental income. Amendment form   Rents from property located in a relevant possession are treated as income from sources within that possession. Amendment form Royalties. Amendment form   Royalties from natural resources located in a relevant possession are considered income from sources within that possession. Amendment form   Also considered possession source income are royalties received for the use of, or for the privilege of using, in a relevant possession, patents, copyrights, secret processes and formulas, goodwill, trademarks, trade brands, franchises, and other like property. Amendment form Sales or Other Dispositions of Property The source rules for sales or other dispositions of property are varied. Amendment form The most common situations are discussed below. Amendment form Real property. Amendment form   Real property includes land and buildings, and generally anything built on, growing on, or attached to land. Amendment form The location of the property generally determines the source of income from the sale. Amendment form For example, if you are a bona fide resident of Guam and sell your home that is located in Guam, the gain on the sale is sourced in Guam. Amendment form If, however, the home you sold was located in the United States, the gain is U. Amendment form S. Amendment form source income. Amendment form Personal property. Amendment form   The term “personal property” refers to property (such as machinery, equipment, or furniture) that is not real property. Amendment form Generally, gain (or loss) from the sale or other disposition is sourced according to the seller's tax home. Amendment form If personal property is sold by a bona fide resident of a relevant possession, the gain (or loss) from the sale is treated as sourced within that possession. Amendment form   This rule does not apply to the sale of inventory, intangible property, depreciable personal property, or property sold through a foreign office or fixed place of business. Amendment form The rules applying to sales of inventory are discussed below. Amendment form For information on sales of the other types of property mentioned, see Internal Revenue Code section 865. Amendment form Inventory. Amendment form   Your inventory is personal property that is stock in trade or that is held primarily for sale to customers in the ordinary course of your trade or business. Amendment form The source of income from the sale of inventory depends on whether the inventory was purchased or produced. Amendment form Purchased. Amendment form   Income from the sale of inventory that you purchased is sourced where you sell the property. Amendment form Generally, this is where title to the property passes to the buyer. Amendment form Produced. Amendment form   Income from the sale of inventory that you produced in a relevant possession and sold outside that possession (or vice versa) is sourced based on an allocation. Amendment form For information on making the allocation, see Regulations section 1. Amendment form 863-3(f). Amendment form Special Rules for Gains From Dispositions of Certain Property There are special rules for gains from dispositions of certain investment property (for example, stocks, bonds, debt instruments, diamonds, and gold) owned by a U. Amendment form S. Amendment form citizen or resident alien prior to becoming a bona fide resident of a possession. Amendment form You are subject to these special rules if you meet both of the following conditions. Amendment form For the tax year for which the source of the gain must be determined, you are a bona fide resident of the relevant possession. Amendment form For any of the 10 years preceding that year, you were a citizen or resident alien of the United States (other than a bona fide resident of the relevant possession). Amendment form If you meet these conditions, gains from the disposition of this property will not be treated as income from sources within the relevant possession for purposes of the Internal Revenue Code. Amendment form Accordingly, bona fide residents of American Samoa and Puerto Rico, for example, may not exclude the gain on their U. Amendment form S. Amendment form tax return. Amendment form (See chapter 3 for additional filing information. Amendment form ) With respect to the CNMI, Guam, and the USVI, the gain from the disposition of this property will not meet the requirements for certain tax rules that may allow bona fide residents of those possessions to reduce or obtain a rebate of taxes on income from sources within the relevant possessions. Amendment form These rules apply to dispositions after April 11, 2005. Amendment form For details, see Regulations section 1. Amendment form 937-2(f)(1) and Examples 1 and 2 of section 1. Amendment form 937-2(k). Amendment form Example 1. Amendment form In 2007, Cheryl Jones, a U. Amendment form S. Amendment form citizen, lived in the United States and paid $1,000 for 100 shares of stock in the Rose Corporation, a U. Amendment form S. Amendment form corporation listed on the New York Stock Exchange. Amendment form On March 1, 2010, she moved to Puerto Rico and changed her tax home to Puerto Rico on the same date. Amendment form Cheryl satisfied the presence test in 2010 and, under the year-of-move exception, she was considered a bona fide resident of Puerto Rico for the rest of 2010. Amendment form On March 1, 2010, the closing value of Cheryl's stock in the Rose Corporation was $2,000. Amendment form On January 5, 2013, while still a bona fide resident of Puerto Rico, Cheryl sold all her Rose Corporation stock for $7,000. Amendment form Under the earlier rules, none of Cheryl's $6,000 gain will be treated as income from sources within Puerto Rico. Amendment form The source rules discussed in the preceding paragraphs supplement, and may apply in conjunction with, an existing special rule. Amendment form This existing special rule applies if you are a U. Amendment form S. Amendment form citizen or resident alien who becomes a bona fide resident of American Samoa, the CNMI, or Guam, and who has gain from the disposition of certain U. Amendment form S. Amendment form assets during the 10-year period beginning when you became a bona fide resident. Amendment form The gain is U. Amendment form S. Amendment form source income that generally is subject to U. Amendment form S. Amendment form tax if the property is either (1) located in the United States; (2) stock issued by a U. Amendment form S. Amendment form corporation or a debt obligation of a U. Amendment form S. Amendment form person or of the United States, a state (or political subdivision), or the District of Columbia; or (3) property that has a basis in whole or in part by reference to property described in (1) or (2). Amendment form See chapter 3 for filing information. Amendment form Special election. Amendment form   For dispositions after April 11, 2005, you can choose to treat the part of gain (or loss) attributable to the time you held the property while a bona fide resident of the relevant possession (the possession holding period) as gain (or loss) from sources within that possession. Amendment form Make the election by reporting the gain attributable to the possession holding period on your income tax return for the year of disposition. Amendment form This election overrides both of the special rules discussed earlier. Amendment form   There are two methods for figuring the gain for the possession holding period, one for marketable securities and another for other types of investment property. Amendment form Marketable securities. Amendment form   Marketable securities are those actively traded on an established financial market, such as stock in a publicly held corporation. Amendment form Under the special election, allocate the gain (or loss) by figuring the appreciation separately for your possession and U. Amendment form S. Amendment form holding periods. Amendment form   Your possession holding period begins on the first day you do not have a tax home outside the relevant possession. Amendment form The gain (or loss) attributable to the possession holding period is the difference in fair market value of the security at the close of the market on the first and last days of this holding period. Amendment form This is your gain (or loss) that is treated as being from sources within the relevant possession. Amendment form If you were a bona fide resident of the relevant possession for more than one continuous period, combine the gains (or losses) from each possession holding period. Amendment form Example 2. Amendment form Assume the same facts as in Example 1, except that Cheryl makes the special election to allocate the gain between her U. Amendment form S. Amendment form and possession holding periods. Amendment form Cheryl's possession holding period began March 1, 2010, the date her tax home changed to Puerto Rico. Amendment form Therefore, the portion of gain attributable to her possession holding period is $5,000 ($7,000 sale price – $2,000 closing value on first day of the possession holding period). Amendment form By reporting $5,000 of her $6,000 gain as Puerto Rico source income on her 2013 Puerto Rico tax return (and the remainder as non-Puerto Rico source income), Cheryl elects to treat that amount as Puerto Rico source income. Amendment form Other personal property. Amendment form   For personal property other than marketable securities, use a time-based allocation. Amendment form Figure the gain (or loss) attributable to the possession holding period by multiplying your total gain (or loss) by the following fraction. Amendment form      Number of days in the  possession holding period     Total number of days  in your holding period         The result is your gain (or loss) that is treated as being from sources within the relevant possession. Amendment form Example 3. Amendment form In addition to the stock in Rose Corporation, Cheryl acquired a 5% interest in the Alder Partnership on January 1, 2009. Amendment form On March 1, 2010, when she established bona fide residency in Puerto Rico, her partnership interest was not considered a marketable security. Amendment form On September 16, 2013, while still a bona fide resident of Puerto Rico, Cheryl sold her interest in Alder Partnership for a $100,000 gain. Amendment form She had owned the interest for a total of 1,720 days. Amendment form Cheryl's possession holding period (from March 1, 2010, through September 16, 2013) is 1,296 days. Amendment form The portion of her gain attributable to Puerto Rico is $75,349 ($100,000 x (1,296 Puerto Rico days ÷ 1,720 total days)). Amendment form By reporting $75,349 of her $100,000 gain as Puerto Rico source income on her 2013 Puerto Rico tax return (and the remainder as non-Puerto Rico source income), Cheryl elects to treat that amount as Puerto Rico source income. Amendment form Scholarships, Fellowships, Grants, Prizes, and Awards The source of these types of income is generally the residence of the payer, regardless of who actually disburses the funds. Amendment form Therefore, in order to be possession source income, the payer must be a resident of the relevant possession, such as an individual who is a bona fide resident or a corporation created or organized in that possession. Amendment form These rules do not apply to amounts paid as salary or other compensation for services. Amendment form See Compensation for Labor or Personal Services, earlier in this chapter, for the source rules that apply. Amendment form Effectively Connected Income In limited circumstances, some kinds of income from sources outside the relevant possession must be treated as effectively connected with a trade or business in that possession. Amendment form These circumstances are listed below. Amendment form You have an office or other fixed place of business in the relevant possession to which the income can be attributed. Amendment form That office or place of business is a material factor in producing the income. Amendment form The income is produced in the ordinary course of the trade or business carried on through that office or other fixed place of business. Amendment form An office or other fixed place of business is a material factor if it significantly contributes to, and is an essential economic element in, the earning of the income. Amendment form The three kinds of income from sources outside the relevant possession to which these rules apply are the following. Amendment form Rents and royalties for the use of, or for the privilege of using, intangible personal property located outside the relevant possession or from any interest in such property. Amendment form Included are rents or royalties for the use of, or for the privilege of using, outside the relevant possession, patents, copyrights, secret processes and formulas, goodwill, trademarks, trade brands, franchises, and similar properties if the rents or royalties are from the active conduct of a trade or business in the relevant possession. Amendment form Dividends or interest from the active conduct of a banking, financing, or similar business in the relevant possession. Amendment form Income, gain, or loss from the sale or exchange outside the relevant possession, through the office or other fixed place of business in the relevant possession, of: Stock in trade, Property that would be included in inventory if on hand at the end of the tax year, or Property held primarily for sale to customers in the ordinary course of business. Amendment form Item (3) will not apply if you sold the property for use, consumption, or disposition outside the relevant possession and an office or other fixed place of business in a foreign country was a material factor in the sale. Amendment form Example. Amendment form Marcy Jackson is a bona fide resident of American Samoa. Amendment form Her business, which she conducts from an office in American Samoa, is developing and selling specialized computer software. Amendment form A software purchaser will frequently pay Marcy an additional amount to install the software on the purchaser's operating system and to ensure that the software is functioning properly. Amendment form Marcy installs the software at the purchaser's place of business, which may be in American Samoa, in the United States, or in another country. Amendment form The income from selling the software is effectively connected with the conduct of Marcy's business in American Samoa, even though the product's destination may be outside the possession. Amendment form However, the compensation she receives for installing the software (personal services) outside of American Samoa is not effectively connected with the conduct of her business in the possession—the income is sourced where she performs the services. Amendment form Prev  Up  Next   Home   More Online Publications
Print - Click this link to Print this page

Understanding Your CP261 Notice

CP261 is the approval notice for Form 2553, Election by a Small Business Corporation.


What you need to do

  • Keep this S corporation approval letter (CP261 Notice), in your permanent records.
  • Timely file Form 1120S reporting income/loss for the S corporation including Schedules K-1 for all shareholders.
  • Timely file all employment tax returns.

You may want to

  • If your address changes, submit Form 8822-B, Change of Address – Business, to ensure our records remain correct.

Answers to Common Questions

Page Last Reviewed or Updated: 14-Feb-2014

Printable samples of this notice (PDF)

 

 

How to get help

  • Call the 1-800 number listed on the top right corner of your notice.
  • Authorize someone (e.g., accountant) to contact the IRS on your behalf using Form 2848.
  • See if you qualify for help from a Low Income Taxpayer Clinic.
     

The Amendment Form

Amendment form Depreciation Table of Contents Introduction Special Depreciation AllowanceQualified Property Election Not To Claim the Allowance Rules for Returns Filed Before June 1, 2002 Passenger Automobiles New York Liberty Zone BenefitsSpecial Liberty Zone Depreciation Allowance Increased Section 179 Deduction Liberty Zone Leasehold Improvement Property If you depreciate business property that you acquired and placed in service after September 10, 2001, new law contains provisions that may affect your depreciation deduction for that property. Amendment form Publication 946, How To Depreciate Property, contains information on depreciation. Amendment form However, Publication 946 does not contain the new provisions because it was printed before the law was enacted. Amendment form The new provisions are in the Supplement to Publication 946, which is reprinted below. Amendment form Supplement to Publication 946 How To Depreciate Property   Introduction After Publication 946 was printed, the Job Creation and Worker Assistance Act of 2002 was signed into law by the President. Amendment form The new law made several changes in the tax rules explained in the publication. Amendment form Some of the changes apply to property placed in service during 2001. Amendment form This supplemental publication describes those changes and explains what you should do if you are affected by them. Amendment form The situations and examples in Publication 946 do not reflect any of the changes made by the Job Creation and Worker Assistance Act of 2002. Amendment form The new law contains the following provisions. Amendment form 30% depreciation deductions (special depreciation allowance and special New York Liberty Zone (Liberty Zone) depreciation allowance) for the year qualified property is placed in service after September 10, 2001. Amendment form An increased dollar limit on the section 179 deduction for qualified Liberty Zone property purchased after September 10, 2001. Amendment form A shorter recovery period for qualified Liberty Zone leasehold improvement property placed in service after September 10, 2001. Amendment form An increase in the maximum depreciation deduction for 2001 for a qualified passenger automobile placed in service after September 10, 2001. Amendment form If you believe you qualify for an increased deduction under any of these new rules, you must file the revised 2001 Form 4562 (dated March 2002) for 2001 calendar or fiscal years and 2000 fiscal years ending after September 10, 2001. Amendment form If you have already filed a tax return, this supplemental publication explains how to claim these benefits and how to elect not to claim the special depreciation allowance or special Liberty Zone depreciation allowance. Amendment form See Table 2 at the end of the supplement for an overview of the rules that apply if you filed your return before June 1, 2002. Amendment form Special Depreciation Allowance You can take a special depreciation allowance for qualified property you place in service after September 10, 2001. Amendment form The allowance is an additional deduction of 30% of the property's depreciable basis. Amendment form To figure the depreciable basis, you must first multiply the property's cost or other basis by the percentage of business/investment use and then reduce that amount by any section 179 deduction and certain other deductions and credits for the property. Amendment form See What Is the Basis for Depreciation? on page 23 in Publication 946 for more information on figuring depreciable basis. Amendment form The allowance is deductible for both regular tax and alternative minimum tax (AMT) purposes. Amendment form There is no AMT adjustment required for any depreciation figured on the remaining basis of the property. Amendment form In the year you claim the allowance (generally the year you place the property in service), you must reduce the depreciable basis of the property by the allowance before figuring your regular depreciation deduction. Amendment form Example 1. Amendment form On November 1, 2001, you bought and placed in service in your business qualified property that cost $100,000. Amendment form You did not elect to claim a section 179 deduction. Amendment form You can deduct 30% of the cost ($30,000) as a special depreciation allowance for 2001. Amendment form You use the remaining $70,000 of cost to figure your regular depreciation deduction for 2001 and later years. Amendment form Example 2. Amendment form The facts are the same as in Example 1, except that you choose to deduct $24,000 of the property's cost as a section 179 deduction. Amendment form You use the remaining $76,000 of cost to figure your special depreciation allowance of $22,800 ($76,000 × 30%). Amendment form You use the remaining $53,200 of cost to figure your regular depreciation deduction for 2001 and later years. Amendment form Qualified Property To qualify for the special depreciation allowance, your property must meet the following requirements. Amendment form It is new property of one of the following types. Amendment form Property depreciated under the modified accelerated cost recovery system (MACRS) with a recovery period of 20 years or less. Amendment form See Can You Use MACRS To Depreciate Your Property and Which Recovery Period Applies? on pages 7 and 23, respectively, in Publication 946. Amendment form Water utility property. Amendment form See 25-year property on page 22 in Publication 946. Amendment form Computer software that is not a section 197 intangible as described in Computer software on page 5 in Publication 946. Amendment form (The cost of some computer software is treated as part of the cost of hardware and is depreciated under MACRS. Amendment form ) Qualified leasehold improvement property (defined later). Amendment form It meets the following tests (explained later under Tests To Be Met). Amendment form Acquisition date test. Amendment form Placed in service date test. Amendment form Original use test. Amendment form It is not excepted property (explained later under Excepted Property). Amendment form Qualified leasehold improvement property. Amendment form    Generally, this is any improvement to an interior part of a building that is nonresidential real property, provided all of the following requirements are met. Amendment form The improvement is made under or pursuant to a lease by the lessee (or any sublessee) or the lessor of that part of the building. Amendment form That part of the building is to be occupied exclusively by the lessee (or any sublessee) of that part. Amendment form The improvement is placed in service more than 3 years after the date the building was first placed in service. Amendment form   However, a qualified leasehold improvement does not include any improvement for which the expenditure is attributable to any of the following. Amendment form The enlargement of the building. Amendment form Any elevator or escalator. Amendment form Any structural component benefiting a common area. Amendment form The internal structural framework of the building. Amendment form   Generally, a binding commitment to enter into a lease is treated as a lease and the parties to the commitment are treated as the lessor and lessee. Amendment form However, a binding commitment between related persons is not treated as a lease. Amendment form Related persons. Amendment form   For this purpose, the following are related persons. Amendment form Members of an affiliated group. Amendment form The persons listed in items (1) through (9) under Related persons on page 8 of Publication 946 (except that “80% or more” should be substituted for “more than 10%” each place it appears). Amendment form An executor and a beneficiary of the same estate. Amendment form Tests To Be Met To qualify for the special depreciation allowance, the property must meet all of the following tests. Amendment form Acquisition date test. Amendment form    Generally, you must have acquired the property either: After September 10, 2001, and before September 11, 2004, but only if no written binding contract for the acquisition was in effect before September 11, 2001, or Pursuant to a written binding contract entered into after September 10, 2001, and before September 11, 2004. Amendment form   Property you manufacture, construct, or produce for your own use meets this test if you began the manufacture, construction, or production of the property after September 10, 2001, and before September 11, 2004. Amendment form Placed in service date test. Amendment form   Generally, the property must be placed in service for use in your trade or business or for the production of income after September 10, 2001, and before January 1, 2005. Amendment form   If you sold property you placed in service after September 10, 2001, and you leased it back within 3 months after the property was originally placed in service, the property is treated as placed in service no earlier than the date it is used under the leaseback. Amendment form Original use test. Amendment form   The original use of the property must have begun with you after September 10, 2001. Amendment form “Original use” means the first use to which the property is put, whether or not by you. Amendment form Additional capital expenditures you incurred after September 10, 2001, to recondition or rebuild your property meet the original use test. Amendment form Excepted Property The following property does not qualify for the special depreciation allowance. Amendment form Property used by any person before September 11, 2001. Amendment form Property required to be depreciated using ADS. Amendment form This includes listed property used 50% or less in a qualified business use. Amendment form Qualified New York Liberty Zone leasehold improvement property (defined next). Amendment form Qualified New York Liberty Zone leasehold improvement property. Amendment form   This is any qualified leasehold improvement property (as defined earlier) if all of the following requirements are met. Amendment form The improvement is to a building located in the New York Liberty Zone (defined later under New York Liberty Zone Benefits). Amendment form The improvement is placed in service after September 10, 2001, and before January 1, 2007. Amendment form No written binding contract for the improvement was in effect before September 11, 2001. Amendment form Election Not To Claim the Allowance You can elect not to claim the special depreciation allowance for qualified property. Amendment form If you make this election for any property, it applies to all property in the same property class placed in service during the year. Amendment form To make this election, attach a statement to your return indicating you elect not to claim the allowance and the class of property for which you are making the election. Amendment form When to make election. Amendment form   Generally, you must make the election on a timely filed tax return (including extensions) for the year in which you place the property in service. Amendment form   However, if you timely filed your return for the year without making the election, you can still make the election by filing an amended return within 6 months of the due date of the original return (not including extensions). Amendment form Attach the election statement to the amended return. Amendment form At the top of the election statement, write “Filed pursuant to section 301. Amendment form 9100–2. Amendment form ” Revoking an election. Amendment form   Once you elect not to deduct the special depreciation allowance for a class of property, you cannot revoke the election without IRS consent. Amendment form A request to revoke the election is subject to a user fee. Amendment form Rules for Returns Filed Before June 1, 2002 The following rules apply if you placed qualified property in service after September 10, 2001, and filed your return before June 1, 2002. Amendment form The rules apply to returns for the following years. Amendment form 2000 fiscal years that end after September 10, 2001. Amendment form 2001 calendar and fiscal years. Amendment form Claiming the allowance. Amendment form   If you did not claim the allowance on your return and did not make the election not to claim the allowance, you can do either of the following to claim the allowance. Amendment form File an amended return by the due date (not including extensions) of your return for the year following the year the property was placed in service. Amendment form Write “Filed Pursuant to Rev. Amendment form Proc. Amendment form 2002–33” at the top of the amended return. Amendment form File Form 3115, Application for Change in Accounting Method, with your return for the year following the year the property was placed in service. Amendment form Your return must be filed by the due date (including extensions). Amendment form Write “Automatic Change Filed Under Rev. Amendment form Proc. Amendment form 2002–33” on the appropriate line of Form 3115. Amendment form You must also file a copy (with signature) of the completed Form 3115 with the IRS National Office no later than when you file the original with your return. Amendment form For more information about filing Form 3115, including the address to send it to, see Revenue Procedure 2002–9, Revenue Procedure 2002–19, and Revenue Procedure 2002–33. Amendment form Example 1. Amendment form You are an individual and you use the calendar year. Amendment form You placed qualified property in service for your business in December 2001. Amendment form You filed your 2001 income tax return before April 15, 2002. Amendment form You did not claim the special depreciation allowance for the property and did not make the election not to claim the allowance. Amendment form You can claim the special allowance by filing an amended 2001 return by April 15, 2003, with “Filed Pursuant to Rev. Amendment form Proc. Amendment form 2002–33” at the top of the amended return. Amendment form You must file an amended return by April 15, 2003, even if you get an extension of time to file your 2002 tax return. Amendment form Example 2. Amendment form The facts concerning your 2001 return are the same as in Example 1. Amendment form In addition, you got an automatic 4-month extension of time (to August 15, 2003) to file your 2002 return. Amendment form You can claim the special allowance by filing a Form 3115 (with “Filed Pursuant to Rev. Amendment form Proc. Amendment form 2002–33” on the appropriate line) with your 2002 return by August 15, 2003. Amendment form You must also file a copy of this Form 3115 with the IRS National Office no later than when you file your 2002 return. Amendment form Electing not to claim the allowance. Amendment form   Generally, you have elected not to claim the special depreciation allowance for a class of property if you: Filed your return timely (including extensions) for the year you placed qualified property in service and indicated on a statement with the return that you are not claiming the allowance, or Filed your return timely and filed an amended return within 6 months of the due date of the original return (not including extensions) and indicated on a statement with the amended return that you are not claiming the allowance. Amendment form The statement must indicate that you are not deducting the special depreciation allowance and the class of property to which the election applies. Amendment form The statement can be either attached to or written on the return. Amendment form You can, for example, write “not deducting 30%” on Form 4562. Amendment form Deemed election. Amendment form   If you have not followed either of the procedures described above to elect not to claim the allowance, you may still be treated as making the election. Amendment form You will be treated as making the election if you meet both of the following conditions. Amendment form You filed your return for the year you placed the property in service and claimed depreciation, but not the special allowance, for any class of property. Amendment form You do not file an amended return or a Form 3115 within the time prescribed for claiming the special allowance. Amendment form See Claiming the allowance, earlier. Amendment form Passenger Automobiles The limit on your depreciation deduction (including any section 179 deduction) for any passenger automobile that is qualified property (defined earlier) placed in service after September 10, 2001, and for which you claim the special depreciation allowance is increased. Amendment form Generally, the limit is increased from $3,060 to $7,660. Amendment form However, if the automobile is a qualified electric car, the limit is increased from $9,280 to $23,080 ($22,980 if placed in service in 2002). Amendment form Table 1 shows the maximum deduction amounts for 2001. Amendment form Table 1. Amendment form Maximum Deduction for 2001 Qualified Vehicle Placed in Service Before Sept. Amendment form 11 Placed in Service After Sept. Amendment form 10 Passenger automobile $3,060 $7,660 Electric car 9,280 23,080 1 1$22,980 if you place an electric car in service in 2002. Amendment form Election not to claim the allowance. Amendment form   The increased maximum depreciation deduction does not apply if you elected not to claim the special depreciation allowance as explained earlier under Election Not To Claim the Allowance and Rules for Returns Filed Before June 1, 2002. Amendment form New York Liberty Zone Benefits Several benefits are available for property you place in service in the New York Liberty Zone (Liberty Zone). Amendment form They include a special depreciation allowance for the year you place the property in service, an increased section 179 deduction, and the classification of certain leasehold improvement property as 5-year property. Amendment form Area defined. Amendment form   The New York Liberty Zone is the area located on or south of Canal Street, East Broadway (east of its intersection with Canal Street), or Grand Street (east of its intersection with East Broadway) in the Borough of Manhattan in the City of New York, New York. Amendment form Special Liberty Zone Depreciation Allowance You can take a special depreciation allowance for qualified Liberty Zone property you place in service after September 10, 2001. Amendment form The allowance is an additional deduction of 30% of the property's depreciable basis. Amendment form To figure the depreciable basis, you must first multiply the property's cost or other basis by the percentage of business/investment use and then reduce that amount by any section 179 deduction and certain other deductions and credits for the property. Amendment form See What Is the Basis for Depreciation? on page 23 in Publication 946 for more information on figuring depreciable basis. Amendment form The allowance is deductible for both regular tax and alternative minimum tax (AMT) purposes. Amendment form There is no AMT adjustment required for any depreciation figured on the remaining basis of the property. Amendment form In the year you claim the allowance (generally the year you place the property in service), you must reduce the depreciable basis of the property by the allowance before figuring your regular depreciation deduction. Amendment form You cannot claim the special Liberty Zone depreciation allowance for property eligible for the special depreciation allowance explained earlier in Qualified Property under Special Depreciation Allowance. Amendment form Qualified property is eligible for only one special depreciation allowance. Amendment form Example 1. Amendment form On November 1, 2001, you bought and placed in service in your business, which is in the Liberty Zone, qualified Liberty Zone property that cost $200,000. Amendment form You did not elect to claim a section 179 deduction. Amendment form You can deduct 30% of the cost ($60,000) as a special Liberty Zone depreciation allowance for 2001. Amendment form You use the remaining $140,000 of cost to figure your regular depreciation deduction for 2001 and later years. Amendment form Example 2. Amendment form The facts are the same as in Example 1, except that you choose to deduct $59,000 of the property's cost as a section 179 deduction. Amendment form (See Increased Section 179 Deduction, later, for information concerning how this section 179 deduction amount is figured). Amendment form You use the remaining $141,000 of cost to figure your special Liberty Zone depreciation allowance of $42,300 ($141,000 × 30%). Amendment form You use the remaining $98,700 of cost to figure your regular depreciation deduction for 2001 and later years. Amendment form Qualified Liberty Zone Property For a 2001 calendar or fiscal year and a 2000 fiscal year that ends after September 10, 2001, property qualifies for the special Liberty Zone depreciation allowance if it meets the following requirements. Amendment form It is one of the following types of property. Amendment form Used property depreciated under MACRS with a recovery period of 20 years or less. Amendment form See Can You Use MACRS To Depreciate Your Property and Which Recovery Period Applies? on pages 7 and 23, respectively, in Publication 946. Amendment form Used water utility property. Amendment form See 25-year property on page 22 in Publication 946. Amendment form Used computer software that is not a section 197 intangible as described in Computer software on page 5 in Publication 946. Amendment form (The cost of some computer software is treated as part of the cost of hardware and is depreciated under MACRS. Amendment form ) Certain nonresidential real property and residential rental property (defined later). Amendment form It meets the following tests (explained later under Tests to be met). Amendment form Acquisition date test. Amendment form Placed in service date test. Amendment form Substantial use test. Amendment form Original use test. Amendment form It is not excepted property (explained later under Excepted property). Amendment form Nonresidential real property and residential rental property. Amendment form   This property is qualifying property only to the extent it rehabilitates real property damaged, or replaces real property destroyed or condemned, as a result of the terrorist attack of September 11, 2001. Amendment form Property is treated as replacing destroyed or condemned property if, as part of an integrated plan, such property replaces real property included in a continuous area that includes real property destroyed or condemned. Amendment form   For these purposes, real property is considered destroyed (or condemned) only if an entire building or structure was destroyed (or condemned) as a result of the terrorist attack. Amendment form Otherwise, the property is considered damaged real property. Amendment form For example, if certain structural components of a building (such as walls, floors, or plumbing fixtures) are damaged or destroyed as a result of the terrorist attack, but the building is not destroyed (or condemned), then only costs related to replacing the damaged or destroyed structural components qualify for the special Liberty Zone depreciation allowance. Amendment form Tests to be met. Amendment form   To qualify for the special Liberty Zone depreciation allowance, your property must meet all of the following tests. Amendment form Acquisition date test. Amendment form   You must have acquired the property by purchase after September 10, 2001, and there must not have been a binding written contract for the acquisition in effect before September 11, 2001. Amendment form   For information on the acquisition of property by purchase, see Property Acquired by Purchase on page 15 of Publication 946. Amendment form   Property you manufacture, construct, or produce for your own use meets this test if you began the manufacture, construction, or production of the property after September 10, 2001. Amendment form Placed in service date test. Amendment form   Generally, the property must be placed in service for use in your trade or business or for the production of income before January 1, 2007 (January 1, 2010, in the case of qualifying nonresidential real property and residential rental property). Amendment form   If you sold property you placed in service after September 10, 2001, and you leased it back within 3 months after the property was originally placed in service, the property is treated as placed in service no earlier than the date it is used under the leaseback. Amendment form Substantial use test. Amendment form   Substantially all use of the property must be in the Liberty Zone and in the active conduct of your trade or business in the Liberty Zone. Amendment form Original use test. Amendment form   The original use of the property in the Liberty Zone must have begun with you after September 10, 2001. Amendment form   Used property can be qualified Liberty Zone property if it has not previously been used within the Liberty Zone. Amendment form Also, additional capital expenditures you incurred after September 10, 2001, to recondition or rebuild your property meet the original use test if the original use of the property in the Liberty Zone began with you. Amendment form Excepted property. Amendment form   The following property does not qualify for the special Liberty Zone depreciation allowance. Amendment form Property eligible for the special depreciation allowance explained earlier in Qualified Property under Special Depreciation Allowance. Amendment form Property required to be depreciated using ADS. Amendment form This includes listed property used 50% or less in a qualified business use. Amendment form Qualified New York Liberty Zone leasehold improvement property (defined earlier in Excepted Property under Special Depreciation Allowance). Amendment form Example. Amendment form In December 2001, you bought and placed in service in your business in the Liberty Zone the following property. Amendment form New office furniture with a MACRS recovery period of 7 years. Amendment form A used computer with a MACRS recovery period of 5 years. Amendment form The computer had not previously been used within the Liberty Zone. Amendment form Because the office furniture is new property, it qualifies for the special depreciation allowance, but not the special Liberty Zone depreciation allowance. Amendment form Because the computer is used property that had not previously been used in the Liberty Zone, it qualifies for the special Liberty Zone depreciation allowance, but not the special depreciation allowance. Amendment form Election Not To Claim the Liberty Zone Allowance You can elect not to claim the special Liberty Zone depreciation allowance for qualified property. Amendment form If you make this election for any property, it applies to all property in the same property class placed in service during the year. Amendment form To make this election, attach a statement to your return indicating you elect not to claim the allowance and the class of property for which you are making the election. Amendment form When to make the election. Amendment form   Generally, you must make the election on a timely filed tax return (including extensions) for the year in which you place the property in service. Amendment form   However, if you timely filed your return for the year without making the election, you can still make the election by filing an amended return within 6 months of the due date of the original return (not including extensions). Amendment form Attach the election statement to the amended return. Amendment form At the top of the election statement, write “Filed pursuant to section 301. Amendment form 9100–2. Amendment form ” Revoking an election. Amendment form   Once you elect not to deduct the special Liberty Zone depreciation allowance for a class of property, you cannot revoke the election without IRS consent. Amendment form A request to revoke the election is subject to a user fee. Amendment form Returns filed before June 1, 2002. Amendment form   The rules that apply to the special depreciation allowance discussed earlier in Rules for Returns Filed Before June 1, 2002 under Special Depreciation Allowance also apply to the special Liberty Zone depreciation allowance. Amendment form Increased Section 179 Deduction Under section 179 of the Internal Revenue Code, you can choose to recover all or part of the cost of certain qualifying property, up to a limit, by deducting it in the year you place the property in service. Amendment form For tax years beginning in 2000, that limit was $20,000. Amendment form For tax years beginning in 2001 and 2002, that limit is generally $24,000. Amendment form If the cost of qualifying section 179 property placed in service in a year is over $200,000, you must reduce the dollar limit (but not below zero) by the amount of the cost over $200,000. Amendment form Increased Dollar Limit The dollar limit on the section 179 deduction is increased for certain property placed in service in the Liberty Zone. Amendment form The increase is the smaller of the following amounts. Amendment form $35,000. Amendment form The cost of section 179 property that is qualified Liberty Zone property placed in service during the year. Amendment form If you use the revised 2001 Form 4562 (dated March 2002) for a tax year beginning in 2000, you must reduce the section 179 dollar limit to $20,000 before adding the additional amount for qualified property. Amendment form Qualified property. Amendment form   To qualify for the increased section 179 deduction, your property must be section 179 property that is either: Qualified Liberty Zone property, or Property that would be qualified Liberty Zone property except that it is eligible for the special depreciation allowance. Amendment form Qualified Liberty Zone property is explained earlier in Qualified Liberty Zone Property under Special Liberty Zone Depreciation Allowance. Amendment form Property eligible for the special depreciation allowance is explained earlier in Qualified Property under Special Depreciation Allowance. Amendment form For information on the requirements that must be met for property to qualify for the section 179 deduction, see What Property Qualifies? on page 14 of Publication 946. Amendment form Example 1. Amendment form In 2002, you place in service in your business, which is in the Liberty Zone, qualified property (defined earlier) costing $25,000. Amendment form Because this cost is less than $35,000, the dollar limit on the section 179 deduction is increased by $25,000 to $49,000 ($24,000 + $25,000). Amendment form Example 2. Amendment form In 2002, you place in service in your business, which is in the Liberty Zone, qualified property (defined earlier) costing $75,000. Amendment form Because $35,000 is less than the cost of the property you place in service, the dollar limit on the section 179 deduction you can claim is increased by $35,000 to $59,000 ($24,000 + $35,000). Amendment form Reduced Dollar Limit Generally, you must reduce the dollar limit for a year by the cost of qualifying section 179 property placed in service in the year that is more than $200,000. Amendment form However, if the cost of your Liberty Zone property exceeds $200,000, you take into account only 50% (instead of 100%) of the cost of qualified property placed in service in a year. Amendment form Example. Amendment form In 2002, you place in service in your business, which is in the Liberty Zone, qualified property costing $460,000. Amendment form Your increased dollar limit is $59,000 ($35,000 + $24,000). Amendment form Because 50% of the cost of the property you place in service ($230,000) is $30,000 more than $200,000, you must reduce your $59,000 dollar limit to $29,000 ($59,000 - $30,000). Amendment form Recapture Rules Rules similar to those explained on page 20 of Publication 946 under When Must You Recapture the Deduction? apply with respect to any qualified property you stop using in the Liberty Zone. Amendment form Returns Filed Before June 1, 2002 If you filed a return before June 1, 2002, and did not deduct the increased section 179 amount for qualified property placed in service after September 10, 2001, you can deduct the increased amount by filing an amended return by the due date (not including extensions) of the return for the year after the year the property was placed in service. Amendment form This rule applies to returns for the following years. Amendment form 2000 fiscal years that end after September 10, 2001. Amendment form 2001 calendar and fiscal years. Amendment form On the amended return, write “Filed Pursuant to Rev. Amendment form Proc. Amendment form 2002–33. Amendment form ” Liberty Zone Leasehold Improvement Property Qualified Liberty Zone leasehold improvement property (described earlier in Qualified Property under Special Depreciation Allowance) is 5-year property. Amendment form This means that it is depreciated over a recovery period of 5 years. Amendment form For information about recovery periods, see Which Recovery Period Applies? on page 23 of Publication 946. Amendment form The straight-line method must be used with respect to qualified Liberty Zone leasehold improvement property. Amendment form Under ADS, the recovery period for qualified Liberty Zone leasehold improvement property is 9 years. Amendment form Returns Filed Before June 1, 2002 If you filed either of the following returns before June 1, 2002, and did not depreciate qualified Liberty Zone leasehold improvement property placed in service during the tax year as 5-year property using the straight line method, you should file an amended return before you file your return for the year after the year the property was placed in service. Amendment form Your 2000 fiscal year return (for a 2000 fiscal year that ends after September 10, 2001). Amendment form Your 2001 calendar or fiscal year return. Amendment form On the amended return, write “Filed Pursuant to Rev. Amendment form Proc. Amendment form 2002–33. Amendment form ” Table 2. Amendment form Rules for Returns Filed Before June 1, 2002 Note:This chart highlights the rules for returns affected by the Job Creation and Worker Assistance Act of 2002 that were filed before June 1, 2002, without accounting for any of the new benefits under the law. Amendment form See the text for definitions and examples. Amendment form Do not rely on this chart alone. Amendment form IF you want to. Amendment form . Amendment form . Amendment form THEN you. Amendment form . Amendment form . Amendment form BY. Amendment form . Amendment form . Amendment form claim the special depreciation allowance or special Liberty Zone depreciation allowance • must file an amended return • the due date (not including extensions) of your return for the year after the year the property was placed in service, or • must file Form 3115, Application for Change in Accounting Method, with your return for the year after the year the property was placed in service • the due date (including extensions) of your return for the year after the year the property was placed in service, and • must file a copy of your completed Form 3115 with the IRS National Office • the date you file the original Form 3115 with your return for the year after the year the property was placed in service. Amendment form elect not to claim the special depreciation allowance or the special Liberty Zone depreciation allowance 1 • must have filed your return timely for the year the property was placed in service, and   • must file an amended return stating you are not claiming the allowance • the date that is 6 months after the due date of the original return (not including extensions). Amendment form deduct the increased section 179 amount • must file an amended return • the due date (not including extensions) of your return for the year after the year the property was placed in service. Amendment form use a 5-year recovery period for depreciating qualified Liberty Zone leasehold improvement property • should file an amended return • the date you file your return for the year after the year the property was placed in service. Amendment form 1See also Deemed election under Rules for Returns Filed Before June 1, 2002, earlier. Amendment form Prev  Up  Next   Home   More Online Publications