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

Can I Amend My 2009 Tax Return

Can I File 2010 Taxes OnlineHow Can I File My 2010 Taxes For FreeDownload A 1040ez Federal Tax FormWww Irs GovIncome Tax Deductions 2012H And R Block Free StateFree E File State Taxes OnlyFiling 2012 Tax Return OnlineHow To File 2010 Taxes Late TurbotaxFree Tax Filing For State And FederalTax Aid2012 Amended Tax FormFiling A 2012 Tax ReturnForm 1040ez 2013MilitaryPrintable Irs Tax Forms 20112013 Tax Amendment FormFree State FilingTax Forms For StudentsFile 1040ez FormHr Block ComHow To Fill Out A Tax AmendmentFree Tax Filing 20111040nr Ez FormHow To File Taxes If You Are Self EmployedIrs Tax Amendment Form InstructionsIrs Gov Form 1040xIrs Forms 1040ez2012 Income Tax FilingIrs Form 1040x Amended Tax ReturnIncome State Tax FormsIrs Easy FormIrs1040ez FormFile State Taxes OnlineI Need To File My 2010 Taxes FreeVita Tax PreparationFree Tax Calculator 2011Form 1040ezOnline Tax Software1040ez Instruction Manual

Can I Amend My 2009 Tax Return

Can i amend my 2009 tax return Publication 501 - Introductory Material Table of Contents What's New Reminders IntroductionOrdering forms and publications. Can i amend my 2009 tax return Tax questions. Can i amend my 2009 tax return Useful Items - You may want to see: What's New Who must file. Can i amend my 2009 tax return   In some cases, the amount of income you can receive before you must file a tax return has increased. Can i amend my 2009 tax return Table 1 shows the filing requirements for most taxpayers. Can i amend my 2009 tax return Exemption amount. Can i amend my 2009 tax return  The amount you can deduct for each exemption has increased. Can i amend my 2009 tax return It was $3,800 for 2012. Can i amend my 2009 tax return It is $3,900 for 2013. Can i amend my 2009 tax return Exemption phaseout. Can i amend my 2009 tax return  You lose at least part of the benefit of your exemptions if your adjusted gross income is above a certain amount. Can i amend my 2009 tax return For 2013, the phaseout begins at $150,000 for married individuals filing separate returns; $250,000 for single individuals; $275,000 for heads of household; and $300,000 for married individuals filing joint returns or qualifying widow(er)s. Can i amend my 2009 tax return See Phaseout of Exemptions , later. Can i amend my 2009 tax return Standard deduction increased. Can i amend my 2009 tax return   The standard deduction for some taxpayers who do not itemize their deductions on Schedule A of Form 1040 is higher for 2013 than it was for 2012. Can i amend my 2009 tax return The amount depends on your filing status. Can i amend my 2009 tax return You can use the 2013 Standard Deduction Tables near the end of this publication to figure your standard deduction. Can i amend my 2009 tax return Same-sex marriages. Can i amend my 2009 tax return . Can i amend my 2009 tax return  If you have a same-sex spouse whom you legally married in a state (or foreign country) that recognizes same-sex marriage, you and your spouse generally must use the married filing jointly or married filing separately filing status on your 2013 return, even if you and your spouse now live in a state (or foreign country) that does not recognize same-sex marriage. Can i amend my 2009 tax return See Same-sex marriage under Marital Status, later. Can i amend my 2009 tax return If you meet certain requirements, you may be able to file amended returns to change your filing status for some earlier years. Can i amend my 2009 tax return For details on filing amended returns, see Joint Return After Separate Returns . Can i amend my 2009 tax return Reminders Future developments. Can i amend my 2009 tax return  Information about any future developments affecting Publication 501 (such as legislation enacted after we release it) will be posted at www. Can i amend my 2009 tax return irs. Can i amend my 2009 tax return gov/pub501. Can i amend my 2009 tax return Taxpayer identification number for aliens. Can i amend my 2009 tax return   If you are a nonresident or resident alien and you do not have and are not eligible to get a social security number (SSN), you must apply for an individual taxpayer identification number (ITIN). Can i amend my 2009 tax return Your spouse also may need an ITIN if he or she does not have and is not eligible to get an SSN. Can i amend my 2009 tax return See Form W-7, Application for IRS Individual Taxpayer Identification Number. Can i amend my 2009 tax return Also, see Social Security Numbers for Dependents , later. Can i amend my 2009 tax return Photographs of missing children. Can i amend my 2009 tax return   The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. Can i amend my 2009 tax return Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. Can i amend my 2009 tax return You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child. Can i amend my 2009 tax return Introduction This publication discusses some tax rules that affect every person who may have to file a federal income tax return. Can i amend my 2009 tax return It answers some basic questions: who must file; who should file; what filing status to use; how many exemptions to claim; and the amount of the standard deduction. Can i amend my 2009 tax return Who Must File explains who must file an income tax return. Can i amend my 2009 tax return If you have little or no gross income, reading this section will help you decide if you have to file a return. Can i amend my 2009 tax return Who Should File helps you decide if you should file a return, even if you are not required to do so. Can i amend my 2009 tax return Filing Status helps you determine which filing status to use. Can i amend my 2009 tax return Filing status is important in determining whether you must file a return and whether you may claim certain deductions and credits. Can i amend my 2009 tax return It also helps determine your standard deduction and tax rate. Can i amend my 2009 tax return Exemptions, which reduce your taxable income, are discussed in Exemptions . Can i amend my 2009 tax return Exemptions for Dependents explains the difference between a qualifying child and a qualifying relative. Can i amend my 2009 tax return Other topics include the social security number requirement for dependents, the rules for multiple support agreements, and the rules for divorced or separated parents. Can i amend my 2009 tax return Phaseout of Exemptions explains how to determine whether you must reduce the dollar amount of exemptions you claim and, if so, the amount of the reduction. Can i amend my 2009 tax return Standard Deduction gives the rules and dollar amounts for the standard deduction — a benefit for taxpayers who do not itemize their deductions. Can i amend my 2009 tax return This section also discusses the standard deduction for taxpayers who are blind or age 65 or older, as well as special rules that limit the standard deduction available to dependents. Can i amend my 2009 tax return In addition, this section helps you decide whether you would be better off taking the standard deduction or itemizing your deductions. Can i amend my 2009 tax return How To Get Tax Help explains how to get tax help from the IRS. Can i amend my 2009 tax return This publication is for U. Can i amend my 2009 tax return S. Can i amend my 2009 tax return citizens and resident aliens only. Can i amend my 2009 tax return If you are a resident alien for the entire year, you must follow the same tax rules that apply to U. Can i amend my 2009 tax return S. Can i amend my 2009 tax return citizens. Can i amend my 2009 tax return The rules to determine if you are a resident or nonresident alien are discussed in chapter 1 of Publication 519, U. Can i amend my 2009 tax return S. Can i amend my 2009 tax return Tax Guide for Aliens. Can i amend my 2009 tax return Nonresident aliens. Can i amend my 2009 tax return    If you were a nonresident alien at any time during the year, the rules and tax forms that apply to you may be different from those that apply to U. Can i amend my 2009 tax return S. Can i amend my 2009 tax return citizens. Can i amend my 2009 tax return See Publication 519. Can i amend my 2009 tax return Comments and suggestions. Can i amend my 2009 tax return    We welcome your comments about this publication and your suggestions for future editions. Can i amend my 2009 tax return   You can write to us at the following address: Internal Revenue Service Tax Forms and Publications Division 1111 Constitution Ave. Can i amend my 2009 tax return NW, IR-6526 Washington, DC 20224   We respond to many letters by telephone. Can i amend my 2009 tax return Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence. Can i amend my 2009 tax return   You can send your comments from www. Can i amend my 2009 tax return irs. Can i amend my 2009 tax return gov/formspubs. Can i amend my 2009 tax return Click on “More Information” and then on “Comment on Tax Forms and Publications. Can i amend my 2009 tax return ”   Although we cannot respond individually to each comment received, we do appreciate your feedback and will consider your comments as we revise our tax products. Can i amend my 2009 tax return Ordering forms and publications. Can i amend my 2009 tax return    Visit www. Can i amend my 2009 tax return irs. Can i amend my 2009 tax return gov/formspubs to download forms and publications, call 1-800-TAX-FORM (1-800-829-3676), or write to the address below and receive a response within 10 days after your request is received. Can i amend my 2009 tax return Internal Revenue Service 1201 N. Can i amend my 2009 tax return Mitsubishi Motorway Bloomington, IL 61705-6613 Tax questions. Can i amend my 2009 tax return    If you have a tax question, check the information available on IRS. Can i amend my 2009 tax return gov or call 1-800-829-1040. Can i amend my 2009 tax return We cannot answer tax questions sent to either of the above addresses. Can i amend my 2009 tax return Useful Items - You may want to see: Publication 559 Survivors, Executors, and Administrators 929 Tax Rules for Children and Dependents Form (and Instructions) 1040X Amended U. Can i amend my 2009 tax return S. Can i amend my 2009 tax return Individual Income Tax Return 2848 Power of Attorney and Declaration of Representative 8332 Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent 8814 Parents' Election To Report Child's Interest and Dividends Prev  Up  Next   Home   More Online Publications
Español

Pre-recorded sales calls or robocalls are prohibited. Companies cannot transmit these messages to consumers who have not agreed, in writing, to accept such messages. Pre-recorded calls may only be made to residential telephone numbers in the following cases:

  • Emergency calls needed to ensure your health and safety.
  • Non-commercial calls.
  • Calls which don't include any unsolicited advertisements.
  • Calls by, or on behalf of, tax-exempt nonprofit organizations.
  • Calls for which you have given prior consent.
  • Calls from entities with which you have an established business relationship.

If you receive pre-recorded telemarketing calls but have not agreed to get them, file a complaint with the FTC at donotcall.gov or by calling 1-888-382-1222.

The Can I Amend My 2009 Tax Return

Can i amend my 2009 tax return Publication 541 - Main Content Table of Contents Forming a PartnershipOrganizations Classified as Partnerships Family Partnership Partnership Agreement Terminating a PartnershipIRS e-file (Electronic Filing) Exclusion From Partnership Rules Partnership Return (Form 1065) Partnership DistributionsSubstantially appreciated inventory items. Can i amend my 2009 tax return Partner's Gain or Loss Partner's Basis for Distributed Property Transactions Between Partnership and PartnersGuaranteed Payments Sale or Exchange of Property Contribution of Property Contribution of Services Basis of Partner's InterestAdjusted Basis Effect of Partnership Liabilities Disposition of Partner's InterestSale, Exchange, or Other Transfer Payments for Unrealized Receivables and Inventory Items Liquidation at Partner's Retirement or Death Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA)Partnership Item. Can i amend my 2009 tax return Small Partnerships and the Small Partnership Exception Small Partnership TEFRA Election Role of Tax Matters Partner (TMP) in TEFRA Proceedings Statute of Limitations and TEFRA Amended Returns and Administrative Adjustment Requests (AARs) How To Get Tax Help Forming a Partnership The following sections contain general information about partnerships. Can i amend my 2009 tax return Organizations Classified as Partnerships An unincorporated organization with two or more members is generally classified as a partnership for federal tax purposes if its members carry on a trade, business, financial operation, or venture and divide its profits. Can i amend my 2009 tax return However, a joint undertaking merely to share expenses is not a partnership. Can i amend my 2009 tax return For example, co-ownership of property maintained and rented or leased is not a partnership unless the co-owners provide services to the tenants. Can i amend my 2009 tax return The rules you must use to determine whether an organization is classified as a partnership changed for organizations formed after 1996. Can i amend my 2009 tax return Organizations formed after 1996. Can i amend my 2009 tax return   An organization formed after 1996 is classified as a partnership for federal tax purposes if it has two or more members and it is none of the following. Can i amend my 2009 tax return An organization formed under a federal or state law that refers to it as incorporated or as a corporation, body corporate, or body politic. Can i amend my 2009 tax return An organization formed under a state law that refers to it as a joint-stock company or joint-stock association. Can i amend my 2009 tax return An insurance company. Can i amend my 2009 tax return Certain banks. Can i amend my 2009 tax return An organization wholly owned by a state, local, or foreign government. Can i amend my 2009 tax return An organization specifically required to be taxed as a corporation by the Internal Revenue Code (for example, certain publicly traded partnerships). Can i amend my 2009 tax return Certain foreign organizations identified in section 301. Can i amend my 2009 tax return 7701-2(b)(8) of the regulations. Can i amend my 2009 tax return A tax-exempt organization. Can i amend my 2009 tax return A real estate investment trust. Can i amend my 2009 tax return An organization classified as a trust under section 301. Can i amend my 2009 tax return 7701-4 of the regulations or otherwise subject to special treatment under the Internal Revenue Code. Can i amend my 2009 tax return Any other organization that elects to be classified as a corporation by filing Form 8832. Can i amend my 2009 tax return For more information, see the instructions for Form 8832. Can i amend my 2009 tax return Limited liability company. Can i amend my 2009 tax return   A limited liability company (LLC) is an entity formed under state law by filing articles of organization as an LLC. Can i amend my 2009 tax return Unlike a partnership, none of the members of an LLC are personally liable for its debts. Can i amend my 2009 tax return An LLC may be classified for federal income tax purposes as either a partnership, a corporation, or an entity disregarded as an entity separate from its owner by applying the rules in Regulations section 301. Can i amend my 2009 tax return 7701-3. Can i amend my 2009 tax return See Form 8832 and section 301. Can i amend my 2009 tax return 7701-3 of the regulations for more details. Can i amend my 2009 tax return A domestic LLC with at least two members that does not file Form 8832 is classified as a partnership for federal income tax purposes. Can i amend my 2009 tax return Organizations formed before 1997. Can i amend my 2009 tax return   An organization formed before 1997 and classified as a partnership under the old rules will generally continue to be classified as a partnership as long as the organization has at least two members and does not elect to be classified as a corporation by filing Form 8832. Can i amend my 2009 tax return Community property. Can i amend my 2009 tax return    Spouses who own a qualified entity (defined later) can choose to classify the entity as a partnership for federal tax purposes by filing the appropriate partnership tax returns. Can i amend my 2009 tax return They can choose to classify the entity as a sole proprietorship by filing a Schedule C (Form 1040) listing one spouse as the sole proprietor. Can i amend my 2009 tax return A change in reporting position will be treated for federal tax purposes as a conversion of the entity. Can i amend my 2009 tax return   A qualified entity is a business entity that meets all the following requirements. Can i amend my 2009 tax return The business entity is wholly owned by spouses as community property under the laws of a state, a foreign country, or a possession of the United States. Can i amend my 2009 tax return No person other than one or both spouses would be considered an owner for federal tax purposes. Can i amend my 2009 tax return The business entity is not treated as a corporation. Can i amend my 2009 tax return   For more information about community property, see Publication 555, Community Property. Can i amend my 2009 tax return Publication 555 discusses the community property laws of Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. Can i amend my 2009 tax return Family Partnership Members of a family can be partners. Can i amend my 2009 tax return However, family members (or any other person) will be recognized as partners only if one of the following requirements is met. Can i amend my 2009 tax return If capital is a material income-producing factor, they acquired their capital interest in a bona fide transaction (even if by gift or purchase from another family member), actually own the partnership interest, and actually control the interest. Can i amend my 2009 tax return If capital is not a material income-producing factor, they joined together in good faith to conduct a business. Can i amend my 2009 tax return They agreed that contributions of each entitle them to a share in the profits, and some capital or service has been (or is) provided by each partner. Can i amend my 2009 tax return Capital is material. Can i amend my 2009 tax return   Capital is a material income-producing factor if a substantial part of the gross income of the business comes from the use of capital. Can i amend my 2009 tax return Capital is ordinarily an income-producing factor if the operation of the business requires substantial inventories or investments in plants, machinery, or equipment. Can i amend my 2009 tax return Capital is not material. Can i amend my 2009 tax return   In general, capital is not a material income-producing factor if the income of the business consists principally of fees, commissions, or other compensation for personal services performed by members or employees of the partnership. Can i amend my 2009 tax return Capital interest. Can i amend my 2009 tax return   A capital interest in a partnership is an interest in its assets that is distributable to the owner of the interest in either of the following situations. Can i amend my 2009 tax return The owner withdraws from the partnership. Can i amend my 2009 tax return The partnership liquidates. Can i amend my 2009 tax return   The mere right to share in earnings and profits is not a capital interest in the partnership. Can i amend my 2009 tax return Gift of capital interest. Can i amend my 2009 tax return   If a family member (or any other person) receives a gift of a capital interest in a partnership in which capital is a material income-producing factor, the donee's distributive share of partnership income is subject to both of the following restrictions. Can i amend my 2009 tax return It must be figured by reducing the partnership income by reasonable compensation for services the donor renders to the partnership. Can i amend my 2009 tax return The donee's distributive share of partnership income attributable to donated capital must not be proportionately greater than the donor's distributive share attributable to the donor's capital. Can i amend my 2009 tax return Purchase. Can i amend my 2009 tax return   For purposes of determining a partner's distributive share, an interest purchased by one family member from another family member is considered a gift from the seller. Can i amend my 2009 tax return The fair market value of the purchased interest is considered donated capital. Can i amend my 2009 tax return For this purpose, members of a family include only spouses, ancestors, and lineal descendants (or a trust for the primary benefit of those persons). Can i amend my 2009 tax return Example. Can i amend my 2009 tax return A father sold 50% of his business to his son. Can i amend my 2009 tax return The resulting partnership had a profit of $60,000. Can i amend my 2009 tax return Capital is a material income-producing factor. Can i amend my 2009 tax return The father performed services worth $24,000, which is reasonable compensation, and the son performed no services. Can i amend my 2009 tax return The $24,000 must be allocated to the father as compensation. Can i amend my 2009 tax return Of the remaining $36,000 of profit due to capital, at least 50%, or $18,000, must be allocated to the father since he owns a 50% capital interest. Can i amend my 2009 tax return The son's share of partnership profit cannot be more than $18,000. Can i amend my 2009 tax return Business owned and operated by spouses. Can i amend my 2009 tax return   If spouses carry on a business together and share in the profits and losses, they may be partners whether or not they have a formal partnership agreement. Can i amend my 2009 tax return If so, they should report income or loss from the business on Form 1065. Can i amend my 2009 tax return They should not report the income on a Schedule C (Form 1040) in the name of one spouse as a sole proprietor. Can i amend my 2009 tax return However, the spouses can elect not to treat the joint venture as a partnership by making a Qualified Joint Venture Election. Can i amend my 2009 tax return Qualified Joint Venture Election. Can i amend my 2009 tax return   A "qualified joint venture," whose only members are spouses filing a joint return, can elect not to be treated as a partnership for federal tax purposes. Can i amend my 2009 tax return A qualified joint venture conducts a trade or business where: the only members of the joint venture are spouses filing jointly; both spouses elect not to be treated as a partnership; both spouses materially participate in the trade or business (see Passive Activity Limitations in the Instructions for Form 1065 for a definition of material participation); and the business is co-owned by both spouses and is not held in the name of a state law entity such as a partnership or LLC. Can i amend my 2009 tax return   Under this election, a qualified joint venture conducted by spouses who file a joint return is not treated as a partnership for federal tax purposes and therefore does not have a Form 1065 filing requirement. Can i amend my 2009 tax return All items of income, gain, deduction, loss, and credit are divided between the spouses based on their respective interests in the venture. Can i amend my 2009 tax return Each spouse takes into account his or her respective share of these items as a sole proprietor. Can i amend my 2009 tax return Each spouse would account for his or her respective share on the appropriate form, such as Schedule C (Form 1040). Can i amend my 2009 tax return For purposes of determining net earnings from self-employment, each spouse's share of income or loss from a qualified joint venture is taken into account just as it is for federal income tax purposes (i. Can i amend my 2009 tax return e. Can i amend my 2009 tax return , based on their respective interests in the venture). Can i amend my 2009 tax return   If the spouses do not make the election to treat their respective interests in the joint venture as sole proprietorships, each spouse should carry his or her share of the partnership income or loss from Schedule K-1 (Form 1065) to their joint or separate Form(s) 1040. Can i amend my 2009 tax return Each spouse should include his or her respective share of self-employment income on a separate Schedule SE (Form 1040), Self-Employment Tax. Can i amend my 2009 tax return   This generally does not increase the total tax on the return, but it does give each spouse credit for social security earnings on which retirement benefits are based. Can i amend my 2009 tax return However, this may not be true if either spouse exceeds the social security tax limitation. Can i amend my 2009 tax return   For more information on qualified joint ventures, go to IRS. Can i amend my 2009 tax return gov, enter “Election for Qualified Joint Ventures” in the search box and select the link reading “Election for Husband and Wife Unincorporated Businesses. Can i amend my 2009 tax return ” Partnership Agreement The partnership agreement includes the original agreement and any modifications. Can i amend my 2009 tax return The modifications must be agreed to by all partners or adopted in any other manner provided by the partnership agreement. Can i amend my 2009 tax return The agreement or modifications can be oral or written. Can i amend my 2009 tax return Partners can modify the partnership agreement for a particular tax year after the close of the year but not later than the date for filing the partnership return for that year. Can i amend my 2009 tax return This filing date does not include any extension of time. Can i amend my 2009 tax return If the partnership agreement or any modification is silent on any matter, the provisions of local law are treated as part of the agreement. Can i amend my 2009 tax return Terminating a Partnership A partnership terminates when one of the following events takes place. Can i amend my 2009 tax return All its operations are discontinued and no part of any business, financial operation, or venture is continued by any of its partners in a partnership. Can i amend my 2009 tax return At least 50% of the total interest in partnership capital and profits is sold or exchanged within a 12-month period, including a sale or exchange to another partner. Can i amend my 2009 tax return Unlike other partnerships, an electing large partnership does not terminate on the sale or exchange of 50% or more of the partnership interests within a 12-month period. Can i amend my 2009 tax return See section 1. Can i amend my 2009 tax return 708-1(b) of the regulations for more information on the termination of a partnership. Can i amend my 2009 tax return For special rules that apply to a merger, consolidation, or division of a partnership, see sections 1. Can i amend my 2009 tax return 708-1(c) and 1. Can i amend my 2009 tax return 708-1(d) of the regulations. Can i amend my 2009 tax return Date of termination. Can i amend my 2009 tax return   The partnership's tax year ends on the date of termination. Can i amend my 2009 tax return For the event described in (1), above, the date of termination is the date the partnership completes the winding up of its affairs. Can i amend my 2009 tax return For the event described in (2), above, the date of termination is the date of the sale or exchange of a partnership interest that, by itself or together with other sales or exchanges in the preceding 12 months, transfers an interest of 50% or more in both capital and profits. Can i amend my 2009 tax return Short period return. Can i amend my 2009 tax return   If a partnership is terminated before the end of what would otherwise be its tax year, Form 1065 must be filed for the short period, which is the period from the beginning of the tax year through the date of termination. Can i amend my 2009 tax return The return is due the 15th day of the fourth month following the date of termination. Can i amend my 2009 tax return See Partnership Return (Form 1065), later, for information about filing Form 1065. Can i amend my 2009 tax return Conversion of partnership into limited liability company (LLC). Can i amend my 2009 tax return   The conversion of a partnership into an LLC classified as a partnership for federal tax purposes does not terminate the partnership. Can i amend my 2009 tax return The conversion is not a sale, exchange, or liquidation of any partnership interest; the partnership's tax year does not close; and the LLC can continue to use the partnership's taxpayer identification number. Can i amend my 2009 tax return   However, the conversion may change some of the partners' bases in their partnership interests if the partnership has recourse liabilities that become nonrecourse liabilities. Can i amend my 2009 tax return Because the partners share recourse and nonrecourse liabilities differently, their bases must be adjusted to reflect the new sharing ratios. Can i amend my 2009 tax return If a decrease in a partner's share of liabilities exceeds the partner's basis, he or she must recognize gain on the excess. Can i amend my 2009 tax return For more information, see Effect of Partnership Liabilities under Basis of Partner's Interest, later. Can i amend my 2009 tax return   The same rules apply if an LLC classified as a partnership is converted into a partnership. Can i amend my 2009 tax return IRS e-file (Electronic Filing) Please click here for the text description of the image. Can i amend my 2009 tax return e-file Certain partnerships with more than 100 partners are required to file Form 1065, Schedules K-1, and related forms and schedules electronically (e-file). Can i amend my 2009 tax return Other partnerships generally have the option to file electronically. Can i amend my 2009 tax return For details about IRS e-file, see the Form 1065 instructions. Can i amend my 2009 tax return Exclusion From Partnership Rules Certain partnerships that do not actively conduct a business can choose to be completely or partially excluded from being treated as partnerships for federal income tax purposes. Can i amend my 2009 tax return All the partners must agree to make the choice, and the partners must be able to compute their own taxable income without computing the partnership's income. Can i amend my 2009 tax return However, the partners are not exempt from the rule that limits a partner's distributive share of partnership loss to the adjusted basis of the partner's partnership interest. Can i amend my 2009 tax return Nor are they exempt from the requirement of a business purpose for adopting a tax year for the partnership that differs from its required tax year. Can i amend my 2009 tax return Investing partnership. Can i amend my 2009 tax return   An investing partnership can be excluded if the participants in the joint purchase, retention, sale, or exchange of investment property meet all the following requirements. Can i amend my 2009 tax return They own the property as co-owners. Can i amend my 2009 tax return They reserve the right separately to take or dispose of their shares of any property acquired or retained. Can i amend my 2009 tax return They do not actively conduct business or irrevocably authorize some person acting in a representative capacity to purchase, sell, or exchange the investment property. Can i amend my 2009 tax return Each separate participant can delegate authority to purchase, sell, or exchange his or her share of the investment property for the time being for his or her account, but not for a period of more than a year. Can i amend my 2009 tax return Operating agreement partnership. Can i amend my 2009 tax return   An operating agreement partnership group can be excluded if the participants in the joint production, extraction, or use of property meet all the following requirements. Can i amend my 2009 tax return They own the property as co-owners, either in fee or under lease or other form of contract granting exclusive operating rights. Can i amend my 2009 tax return They reserve the right separately to take in kind or dispose of their shares of any property produced, extracted, or used. Can i amend my 2009 tax return They do not jointly sell services or the property produced or extracted. Can i amend my 2009 tax return Each separate participant can delegate authority to sell his or her share of the property produced or extracted for the time being for his or her account, but not for a period of time in excess of the minimum needs of the industry, and in no event for more than one year. Can i amend my 2009 tax return However, this exclusion does not apply to an unincorporated organization one of whose principal purposes is cycling, manufacturing, or processing for persons who are not members of the organization. Can i amend my 2009 tax return Electing the exclusion. Can i amend my 2009 tax return   An eligible organization that wishes to be excluded from the partnership rules must make the election not later than the time for filing the partnership return for the first tax year for which exclusion is desired. Can i amend my 2009 tax return This filing date includes any extension of time. Can i amend my 2009 tax return See Regulations section 1. Can i amend my 2009 tax return 761-2(b) for the procedures to follow. Can i amend my 2009 tax return Partnership Return (Form 1065) Every partnership that engages in a trade or business or has gross income must file an information return on Form 1065 showing its income, deductions, and other required information. Can i amend my 2009 tax return The partnership return must show the names and addresses of each partner and each partner's distributive share of taxable income. Can i amend my 2009 tax return The return must be signed by a general partner. Can i amend my 2009 tax return If a limited liability company is treated as a partnership, it must file Form 1065 and one of its members must sign the return. Can i amend my 2009 tax return A partnership is not considered to engage in a trade or business, and is not required to file a Form 1065, for any tax year in which it neither receives income nor pays or incurs any expenses treated as deductions or credits for federal income tax purposes. Can i amend my 2009 tax return See the Instructions for Form 1065 for more information about who must file Form 1065. Can i amend my 2009 tax return Partnership Distributions Partnership distributions include the following. Can i amend my 2009 tax return A withdrawal by a partner in anticipation of the current year's earnings. Can i amend my 2009 tax return A distribution of the current year's or prior years' earnings not needed for working capital. Can i amend my 2009 tax return A complete or partial liquidation of a partner's interest. Can i amend my 2009 tax return A distribution to all partners in a complete liquidation of the partnership. Can i amend my 2009 tax return A partnership distribution is not taken into account in determining the partner's distributive share of partnership income or loss. Can i amend my 2009 tax return If any gain or loss from the distribution is recognized by the partner, it must be reported on his or her return for the tax year in which the distribution is received. Can i amend my 2009 tax return Money or property withdrawn by a partner in anticipation of the current year's earnings is treated as a distribution received on the last day of the partnership's tax year. Can i amend my 2009 tax return Effect on partner's basis. Can i amend my 2009 tax return   A partner's adjusted basis in his or her partnership interest is decreased (but not below zero) by the money and adjusted basis of property distributed to the partner. Can i amend my 2009 tax return See Adjusted Basis under Basis of Partner's Interest, later. Can i amend my 2009 tax return Effect on partnership. Can i amend my 2009 tax return   A partnership generally does not recognize any gain or loss because of distributions it makes to partners. Can i amend my 2009 tax return The partnership may be able to elect to adjust the basis of its undistributed property. Can i amend my 2009 tax return Certain distributions treated as a sale or exchange. Can i amend my 2009 tax return   When a partnership distributes the following items, the distribution may be treated as a sale or exchange of property rather than a distribution. Can i amend my 2009 tax return Unrealized receivables or substantially appreciated inventory items distributed in exchange for any part of the partner's interest in other partnership property, including money. Can i amend my 2009 tax return Other property (including money) distributed in exchange for any part of a partner's interest in unrealized receivables or substantially appreciated inventory items. Can i amend my 2009 tax return   See Payments for Unrealized Receivables and Inventory Items under Disposition of Partner's Interest, later. Can i amend my 2009 tax return   This treatment does not apply to the following distributions. Can i amend my 2009 tax return A distribution of property to the partner who contributed the property to the partnership. Can i amend my 2009 tax return Payments made to a retiring partner or successor in interest of a deceased partner that are the partner's distributive share of partnership income or guaranteed payments. Can i amend my 2009 tax return Substantially appreciated inventory items. Can i amend my 2009 tax return   Inventory items of the partnership are considered to have appreciated substantially in value if, at the time of the distribution, their total fair market value is more than 120% of the partnership's adjusted basis for the property. Can i amend my 2009 tax return However, if a principal purpose for acquiring inventory property is to avoid ordinary income treatment by reducing the appreciation to less than 120%, that property is excluded. Can i amend my 2009 tax return Partner's Gain or Loss A partner generally recognizes gain on a partnership distribution only to the extent any money (and marketable securities treated as money) included in the distribution exceeds the adjusted basis of the partner's interest in the partnership. Can i amend my 2009 tax return Any gain recognized is generally treated as capital gain from the sale of the partnership interest on the date of the distribution. Can i amend my 2009 tax return If partnership property (other than marketable securities treated as money) is distributed to a partner, he or she generally does not recognize any gain until the sale or other disposition of the property. Can i amend my 2009 tax return For exceptions to these rules, see Distribution of partner's debt and Net precontribution gain, later. Can i amend my 2009 tax return Also, see Payments for Unrealized Receivables and Inventory Items under Disposition of Partner's Interest, later. Can i amend my 2009 tax return Example. Can i amend my 2009 tax return The adjusted basis of Jo's partnership interest is $14,000. Can i amend my 2009 tax return She receives a distribution of $8,000 cash and land that has an adjusted basis of $2,000 and a fair market value of $3,000. Can i amend my 2009 tax return Because the cash received does not exceed the basis of her partnership interest, Jo does not recognize any gain on the distribution. Can i amend my 2009 tax return Any gain on the land will be recognized when she sells or otherwise disposes of it. Can i amend my 2009 tax return The distribution decreases the adjusted basis of Jo's partnership interest to $4,000 [$14,000 − ($8,000 + $2,000)]. Can i amend my 2009 tax return Marketable securities treated as money. Can i amend my 2009 tax return   Generally, a marketable security distributed to a partner is treated as money in determining whether gain is recognized on the distribution. Can i amend my 2009 tax return This treatment, however, does not generally apply if that partner contributed the security to the partnership or an investment partnership made the distribution to an eligible partner. Can i amend my 2009 tax return   The amount treated as money is the security's fair market value when distributed, reduced (but not below zero) by the excess (if any) of: The partner's distributive share of the gain that would be recognized had the partnership sold all its marketable securities at their fair market value immediately before the transaction resulting in the distribution, over The partner's distributive share of the gain that would be recognized had the partnership sold all such securities it still held after the distribution at the fair market value in (1). Can i amend my 2009 tax return   For more information, including the definition of marketable securities, see section 731(c) of the Internal Revenue Code. Can i amend my 2009 tax return Loss on distribution. Can i amend my 2009 tax return   A partner does not recognize loss on a partnership distribution unless all the following requirements are met. Can i amend my 2009 tax return The adjusted basis of the partner's interest in the partnership exceeds the distribution. Can i amend my 2009 tax return The partner's entire interest in the partnership is liquidated. Can i amend my 2009 tax return The distribution is in money, unrealized receivables, or inventory items. Can i amend my 2009 tax return   There are exceptions to these general rules. Can i amend my 2009 tax return See the following discussions. Can i amend my 2009 tax return Also, see Liquidation at Partner's Retirement or Death under Disposition of Partner's Interest, later. Can i amend my 2009 tax return Distribution of partner's debt. Can i amend my 2009 tax return   If a partnership acquires a partner's debt and extinguishes the debt by distributing it to the partner, the partner will recognize capital gain or loss to the extent the fair market value of the debt differs from the basis of the debt (determined under the rules discussed in Partner's Basis for Distributed Property, later). Can i amend my 2009 tax return   The partner is treated as having satisfied the debt for its fair market value. Can i amend my 2009 tax return If the issue price (adjusted for any premium or discount) of the debt exceeds its fair market value when distributed, the partner may have to include the excess amount in income as canceled debt. Can i amend my 2009 tax return   Similarly, a deduction may be available to a corporate partner if the fair market value of the debt at the time of distribution exceeds its adjusted issue price. Can i amend my 2009 tax return Net precontribution gain. Can i amend my 2009 tax return   A partner generally must recognize gain on the distribution of property (other than money) if the partner contributed appreciated property to the partnership during the 7-year period before the distribution. Can i amend my 2009 tax return   The gain recognized is the lesser of the following amounts. Can i amend my 2009 tax return The excess of: The fair market value of the property received in the distribution, over The adjusted basis of the partner's interest in the partnership immediately before the distribution, reduced (but not below zero) by any money received in the distribution. Can i amend my 2009 tax return The “net precontribution gain” of the partner. Can i amend my 2009 tax return This is the net gain the partner would recognize if all the property contributed by the partner within 7 years of the distribution, and held by the partnership immediately before the distribution, were distributed to another partner, other than a partner who owns more than 50% of the partnership. Can i amend my 2009 tax return For information about the distribution of contributed property to another partner, see Contribution of Property , under Transactions Between Partnership and Partners, later. Can i amend my 2009 tax return   The character of the gain is determined by reference to the character of the net precontribution gain. Can i amend my 2009 tax return This gain is in addition to any gain the partner must recognize if the money distributed is more than his or her basis in the partnership. Can i amend my 2009 tax return For these rules, the term “money” includes marketable securities treated as money, as discussed earlier. Can i amend my 2009 tax return Effect on basis. Can i amend my 2009 tax return   The adjusted basis of the partner's interest in the partnership is increased by any net precontribution gain recognized by the partner. Can i amend my 2009 tax return Other than for purposes of determining the gain, the increase is treated as occurring immediately before the distribution. Can i amend my 2009 tax return See Basis of Partner's Interest , later. Can i amend my 2009 tax return   The partnership must adjust its basis in any property the partner contributed within 7 years of the distribution to reflect any gain that partner recognizes under this rule. Can i amend my 2009 tax return Exceptions. Can i amend my 2009 tax return   Any part of a distribution that is property the partner previously contributed to the partnership is not taken into account in determining the amount of the excess distribution or the partner's net precontribution gain. Can i amend my 2009 tax return For this purpose, the partner's previously contributed property does not include a contributed interest in an entity to the extent its value is due to property contributed to the entity after the interest was contributed to the partnership. Can i amend my 2009 tax return   Recognition of gain under this rule also does not apply to a distribution of unrealized receivables or substantially appreciated inventory items if the distribution is treated as a sale or exchange, as discussed earlier. Can i amend my 2009 tax return Partner's Basis for Distributed Property Unless there is a complete liquidation of a partner's interest, the basis of property (other than money) distributed to the partner by a partnership is its adjusted basis to the partnership immediately before the distribution. Can i amend my 2009 tax return However, the basis of the property to the partner cannot be more than the adjusted basis of his or her interest in the partnership reduced by any money received in the same transaction. Can i amend my 2009 tax return Example 1. Can i amend my 2009 tax return The adjusted basis of Emily's partnership interest is $30,000. Can i amend my 2009 tax return She receives a distribution of property that has an adjusted basis of $20,000 to the partnership and $4,000 in cash. Can i amend my 2009 tax return Her basis for the property is $20,000. Can i amend my 2009 tax return Example 2. Can i amend my 2009 tax return The adjusted basis of Steve's partnership interest is $10,000. Can i amend my 2009 tax return He receives a distribution of $4,000 cash and property that has an adjusted basis to the partnership of $8,000. Can i amend my 2009 tax return His basis for the distributed property is limited to $6,000 ($10,000 − $4,000, the cash he receives). Can i amend my 2009 tax return Complete liquidation of partner's interest. Can i amend my 2009 tax return   The basis of property received in complete liquidation of a partner's interest is the adjusted basis of the partner's interest in the partnership reduced by any money distributed to the partner in the same transaction. Can i amend my 2009 tax return Partner's holding period. Can i amend my 2009 tax return   A partner's holding period for property distributed to the partner includes the period the property was held by the partnership. Can i amend my 2009 tax return If the property was contributed to the partnership by a partner, then the period it was held by that partner is also included. Can i amend my 2009 tax return Basis divided among properties. Can i amend my 2009 tax return   If the basis of property received is the adjusted basis of the partner's interest in the partnership (reduced by money received in the same transaction), it must be divided among the properties distributed to the partner. Can i amend my 2009 tax return For property distributed after August 5, 1997, allocate the basis using the following rules. Can i amend my 2009 tax return Allocate the basis first to unrealized receivables and inventory items included in the distribution by assigning a basis to each item equal to the partnership's adjusted basis in the item immediately before the distribution. Can i amend my 2009 tax return If the total of these assigned bases exceeds the allocable basis, decrease the assigned bases by the amount of the excess. Can i amend my 2009 tax return Allocate any remaining basis to properties other than unrealized receivables and inventory items by assigning a basis to each property equal to the partnership's adjusted basis in the property immediately before the distribution. Can i amend my 2009 tax return If the allocable basis exceeds the total of these assigned bases, increase the assigned bases by the amount of the excess. Can i amend my 2009 tax return If the total of these assigned bases exceeds the allocable basis, decrease the assigned bases by the amount of the excess. Can i amend my 2009 tax return Allocating a basis increase. Can i amend my 2009 tax return   Allocate any basis increase required in rule (2), above, first to properties with unrealized appreciation to the extent of the unrealized appreciation. Can i amend my 2009 tax return If the basis increase is less than the total unrealized appreciation, allocate it among those properties in proportion to their respective amounts of unrealized appreciation. Can i amend my 2009 tax return Allocate any remaining basis increase among all the properties in proportion to their respective fair market values. Can i amend my 2009 tax return Example. Can i amend my 2009 tax return Eun's basis in her partnership interest is $55,000. Can i amend my 2009 tax return In a distribution in liquidation of her entire interest, she receives properties A and B, neither of which is inventory or unrealized receivables. Can i amend my 2009 tax return Property A has an adjusted basis to the partnership of $5,000 and a fair market value of $40,000. Can i amend my 2009 tax return Property B has an adjusted basis to the partnership of $10,000 and a fair market value of $10,000. Can i amend my 2009 tax return To figure her basis in each property, Eun first assigns bases of $5,000 to property A and $10,000 to property B (their adjusted bases to the partnership). Can i amend my 2009 tax return This leaves a $40,000 basis increase (the $55,000 allocable basis minus the $15,000 total of the assigned bases). Can i amend my 2009 tax return She first allocates $35,000 to property A (its unrealized appreciation). Can i amend my 2009 tax return The remaining $5,000 is allocated between the properties based on their fair market values. Can i amend my 2009 tax return $4,000 ($40,000/$50,000) is allocated to property A and $1,000 ($10,000/$50,000) is allocated to property B. Can i amend my 2009 tax return Eun's basis in property A is $44,000 ($5,000 + $35,000 + $4,000) and her basis in property B is $11,000 ($10,000 + $1,000). Can i amend my 2009 tax return Allocating a basis decrease. Can i amend my 2009 tax return   Use the following rules to allocate any basis decrease required in rule (1) or rule (2), earlier. Can i amend my 2009 tax return Allocate the basis decrease first to items with unrealized depreciation to the extent of the unrealized depreciation. Can i amend my 2009 tax return If the basis decrease is less than the total unrealized depreciation, allocate it among those items in proportion to their respective amounts of unrealized depreciation. Can i amend my 2009 tax return Allocate any remaining basis decrease among all the items in proportion to their respective assigned basis amounts (as decreased in (1)). Can i amend my 2009 tax return Example. Can i amend my 2009 tax return Armando's basis in his partnership interest is $20,000. Can i amend my 2009 tax return In a distribution in liquidation of his entire interest, he receives properties C and D, neither of which is inventory or unrealized receivables. Can i amend my 2009 tax return Property C has an adjusted basis to the partnership of $15,000 and a fair market value of $15,000. Can i amend my 2009 tax return Property D has an adjusted basis to the partnership of $15,000 and a fair market value of $5,000. Can i amend my 2009 tax return To figure his basis in each property, Armando first assigns bases of $15,000 to property C and $15,000 to property D (their adjusted bases to the partnership). Can i amend my 2009 tax return This leaves a $10,000 basis decrease (the $30,000 total of the assigned bases minus the $20,000 allocable basis). Can i amend my 2009 tax return He allocates the entire $10,000 to property D (its unrealized depreciation). Can i amend my 2009 tax return Armando's basis in property C is $15,000 and his basis in property D is $5,000 ($15,000 − $10,000). Can i amend my 2009 tax return Distributions before August 6, 1997. Can i amend my 2009 tax return   For property distributed before August 6, 1997, allocate the basis using the following rules. Can i amend my 2009 tax return Allocate the basis first to unrealized receivables and inventory items included in the distribution to the extent of the partnership's adjusted basis in those items. Can i amend my 2009 tax return If the partnership's adjusted basis in those items exceeded the allocable basis, allocate the basis among the items in proportion to their adjusted bases to the partnership. Can i amend my 2009 tax return Allocate any remaining basis to other distributed properties in proportion to their adjusted bases to the partnership. Can i amend my 2009 tax return Partner's interest more than partnership basis. Can i amend my 2009 tax return   If the basis of a partner's interest to be divided in a complete liquidation of the partner's interest is more than the partnership's adjusted basis for the unrealized receivables and inventory items distributed, and if no other property is distributed to which the partner can apply the remaining basis, the partner has a capital loss to the extent of the remaining basis of the partnership interest. Can i amend my 2009 tax return Special adjustment to basis. Can i amend my 2009 tax return   A partner who acquired any part of his or her partnership interest in a sale or exchange or upon the death of another partner may be able to choose a special basis adjustment for property distributed by the partnership. Can i amend my 2009 tax return To choose the special adjustment, the partner must have received the distribution within 2 years after acquiring the partnership interest. Can i amend my 2009 tax return Also, the partnership must not have chosen the optional adjustment to basis when the partner acquired the partnership interest. Can i amend my 2009 tax return   If a partner chooses this special basis adjustment, the partner's basis for the property distributed is the same as it would have been if the partnership had chosen the optional adjustment to basis. Can i amend my 2009 tax return However, this assigned basis is not reduced by any depletion or depreciation that would have been allowed or allowable if the partnership had previously chosen the optional adjustment. Can i amend my 2009 tax return   The choice must be made with the partner's tax return for the year of the distribution if the distribution includes any property subject to depreciation, depletion, or amortization. Can i amend my 2009 tax return If the choice does not have to be made for the distribution year, it must be made with the return for the first year in which the basis of the distributed property is pertinent in determining the partner's income tax. Can i amend my 2009 tax return   A partner choosing this special basis adjustment must attach a statement to his or her tax return that the partner chooses under section 732(d) of the Internal Revenue Code to adjust the basis of property received in a distribution. Can i amend my 2009 tax return The statement must show the computation of the special basis adjustment for the property distributed and list the properties to which the adjustment has been allocated. Can i amend my 2009 tax return Example. Can i amend my 2009 tax return Chin Ho purchased a 25% interest in X partnership for $17,000 cash. Can i amend my 2009 tax return At the time of the purchase, the partnership owned inventory having a basis to the partnership of $14,000 and a fair market value of $16,000. Can i amend my 2009 tax return Thus, $4,000 of the $17,000 he paid was attributable to his share of inventory with a basis to the partnership of $3,500. Can i amend my 2009 tax return Within 2 years after acquiring his interest, Chin Ho withdrew from the partnership and for his entire interest received cash of $1,500, inventory with a basis to the partnership of $3,500, and other property with a basis of $6,000. Can i amend my 2009 tax return The value of the inventory received was 25% of the value of all partnership inventory. Can i amend my 2009 tax return (It is immaterial whether the inventory he received was on hand when he acquired his interest. Can i amend my 2009 tax return ) Since the partnership from which Chin Ho withdrew did not make the optional adjustment to basis, he chose to adjust the basis of the inventory received. Can i amend my 2009 tax return His share of the partnership's basis for the inventory is increased by $500 (25% of the $2,000 difference between the $16,000 fair market value of the inventory and its $14,000 basis to the partnership at the time he acquired his interest). Can i amend my 2009 tax return The adjustment applies only for purposes of determining his new basis in the inventory, and not for purposes of partnership gain or loss on disposition. Can i amend my 2009 tax return The total to be allocated among the properties Chin Ho received in the distribution is $15,500 ($17,000 basis of his interest − $1,500 cash received). Can i amend my 2009 tax return His basis in the inventory items is $4,000 ($3,500 partnership basis + $500 special adjustment). Can i amend my 2009 tax return The remaining $11,500 is allocated to his new basis for the other property he received. Can i amend my 2009 tax return Mandatory adjustment. Can i amend my 2009 tax return   A partner does not always have a choice of making this special adjustment to basis. Can i amend my 2009 tax return The special adjustment to basis must be made for a distribution of property (whether or not within 2 years after the partnership interest was acquired) if all the following conditions existed when the partner received the partnership interest. Can i amend my 2009 tax return The fair market value of all partnership property (other than money) was more than 110% of its adjusted basis to the partnership. Can i amend my 2009 tax return If there had been a liquidation of the partner's interest immediately after it was acquired, an allocation of the basis of that interest under the general rules (discussed earlier under Basis divided among properties) would have decreased the basis of property that could not be depreciated, depleted, or amortized and increased the basis of property that could be. Can i amend my 2009 tax return The optional basis adjustment, if it had been chosen by the partnership, would have changed the partner's basis for the property actually distributed. Can i amend my 2009 tax return Required statement. Can i amend my 2009 tax return   Generally, if a partner chooses a special basis adjustment and notifies the partnership, or if the partnership makes a distribution for which the special basis adjustment is mandatory, the partnership must provide a statement to the partner. Can i amend my 2009 tax return The statement must provide information necessary for the partner to compute the special basis adjustment. Can i amend my 2009 tax return Marketable securities. Can i amend my 2009 tax return   A partner's basis in marketable securities received in a partnership distribution, as determined in the preceding discussions, is increased by any gain recognized by treating the securities as money. Can i amend my 2009 tax return See Marketable securities treated as money under Partner's Gain or Loss, earlier. Can i amend my 2009 tax return The basis increase is allocated among the securities in proportion to their respective amounts of unrealized appreciation before the basis increase. Can i amend my 2009 tax return Transactions Between Partnership and Partners For certain transactions between a partner and his or her partnership, the partner is treated as not being a member of the partnership. Can i amend my 2009 tax return These transactions include the following. Can i amend my 2009 tax return Performing services for, or transferring property to, a partnership if: There is a related allocation and distribution to a partner, and The entire transaction, when viewed together, is properly characterized as occurring between the partnership and a partner not acting in the capacity of a partner. Can i amend my 2009 tax return Transferring money or other property to a partnership if: There is a related transfer of money or other property by the partnership to the contributing partner or another partner, and The transfers together are properly characterized as a sale or exchange of property. Can i amend my 2009 tax return Payments by accrual basis partnership to cash basis partner. Can i amend my 2009 tax return   A partnership that uses an accrual method of accounting cannot deduct any business expense owed to a cash basis partner until the amount is paid. Can i amend my 2009 tax return However, this rule does not apply to guaranteed payments made to a partner, which are generally deductible when accrued. Can i amend my 2009 tax return Guaranteed Payments Guaranteed payments are those made by a partnership to a partner that are determined without regard to the partnership's income. Can i amend my 2009 tax return A partnership treats guaranteed payments for services, or for the use of capital, as if they were made to a person who is not a partner. Can i amend my 2009 tax return This treatment is for purposes of determining gross income and deductible business expenses only. Can i amend my 2009 tax return For other tax purposes, guaranteed payments are treated as a partner's distributive share of ordinary income. Can i amend my 2009 tax return Guaranteed payments are not subject to income tax withholding. Can i amend my 2009 tax return The partnership generally deducts guaranteed payments on line 10 of Form 1065 as a business expense. Can i amend my 2009 tax return They are also listed on Schedules K and K-1 of the partnership return. Can i amend my 2009 tax return The individual partner reports guaranteed payments on Schedule E (Form 1040) as ordinary income, along with his or her distributive share of the partnership's other ordinary income. Can i amend my 2009 tax return Guaranteed payments made to partners for organizing the partnership or syndicating interests in the partnership are capital expenses. Can i amend my 2009 tax return Generally, organizational and syndication expenses are not deductible by the partnership. Can i amend my 2009 tax return However, a partnership can elect to deduct a portion of its organizational expenses and amortize the remaining expenses (see Business start-up and organizational costs in the Instructions for Form 1065). Can i amend my 2009 tax return Organizational expenses (if the election is not made) and syndication expenses paid to partners must be reported on the partners' Schedule K-1 as guaranteed payments. Can i amend my 2009 tax return Minimum payment. Can i amend my 2009 tax return   If a partner is to receive a minimum payment from the partnership, the guaranteed payment is the amount by which the minimum payment is more than the partner's distributive share of the partnership income before taking into account the guaranteed payment. Can i amend my 2009 tax return Example. Can i amend my 2009 tax return Under a partnership agreement, Divya is to receive 30% of the partnership income, but not less than $8,000. Can i amend my 2009 tax return The partnership has net income of $20,000. Can i amend my 2009 tax return Divya's share, without regard to the minimum guarantee, is $6,000 (30% × $20,000). Can i amend my 2009 tax return The guaranteed payment that can be deducted by the partnership is $2,000 ($8,000 − $6,000). Can i amend my 2009 tax return Divya's income from the partnership is $8,000, and the remaining $12,000 of partnership income will be reported by the other partners in proportion to their shares under the partnership agreement. Can i amend my 2009 tax return If the partnership net income had been $30,000, there would have been no guaranteed payment since her share, without regard to the guarantee, would have been greater than the guarantee. Can i amend my 2009 tax return Self-employed health insurance premiums. Can i amend my 2009 tax return   Premiums for health insurance paid by a partnership on behalf of a partner, for services as a partner, are treated as guaranteed payments. Can i amend my 2009 tax return The partnership can deduct the payments as a business expense, and the partner must include them in gross income. Can i amend my 2009 tax return However, if the partnership accounts for insurance paid for a partner as a reduction in distributions to the partner, the partnership cannot deduct the premiums. Can i amend my 2009 tax return   A partner who qualifies can deduct 100% of the health insurance premiums paid by the partnership on his or her behalf as an adjustment to income. Can i amend my 2009 tax return The partner cannot deduct the premiums for any calendar month, or part of a month, in which the partner is eligible to participate in any subsidized health plan maintained by any employer of the partner, the partner's spouse, the partner's dependents, or any children under age 27 who are not dependents. Can i amend my 2009 tax return For more information on the self-employed health insurance deduction, see chapter 6 in Publication 535. Can i amend my 2009 tax return Including payments in partner's income. Can i amend my 2009 tax return   Guaranteed payments are included in income in the partner's tax year in which the partnership's tax year ends. Can i amend my 2009 tax return Example 1. Can i amend my 2009 tax return Under the terms of a partnership agreement, Erica is entitled to a fixed annual payment of $10,000 without regard to the income of the partnership. Can i amend my 2009 tax return Her distributive share of the partnership income is 10%. Can i amend my 2009 tax return The partnership has $50,000 of ordinary income after deducting the guaranteed payment. Can i amend my 2009 tax return She must include ordinary income of $15,000 ($10,000 guaranteed payment + $5,000 ($50,000 × 10%) distributive share) on her individual income tax return for her tax year in which the partnership's tax year ends. Can i amend my 2009 tax return Example 2. Can i amend my 2009 tax return Lamont is a calendar year taxpayer who is a partner in a partnership. Can i amend my 2009 tax return The partnership uses a fiscal year that ended January 31, 2013. Can i amend my 2009 tax return Lamont received guaranteed payments from the partnership from February 1, 2012, until December 31, 2012. Can i amend my 2009 tax return He must include these guaranteed payments in income for 2013 and report them on his 2013 income tax return. Can i amend my 2009 tax return Payments resulting in loss. Can i amend my 2009 tax return   If guaranteed payments to a partner result in a partnership loss in which the partner shares, the partner must report the full amount of the guaranteed payments as ordinary income. Can i amend my 2009 tax return The partner separately takes into account his or her distributive share of the partnership loss, to the extent of the adjusted basis of the partner's partnership interest. Can i amend my 2009 tax return Sale or Exchange of Property Special rules apply to a sale or exchange of property between a partnership and certain persons. Can i amend my 2009 tax return Losses. Can i amend my 2009 tax return   Losses will not be allowed from a sale or exchange of property (other than an interest in the partnership) directly or indirectly between a partnership and a person whose direct or indirect interest in the capital or profits of the partnership is more than 50%. Can i amend my 2009 tax return   If the sale or exchange is between two partnerships in which the same persons directly or indirectly own more than 50% of the capital or profits interests in each partnership, no deduction of a loss is allowed. Can i amend my 2009 tax return   The basis of each partner's interest in the partnership is decreased (but not below zero) by the partner's share of the disallowed loss. Can i amend my 2009 tax return   If the purchaser later sells the property, only the gain realized that is greater than the loss not allowed will be taxable. Can i amend my 2009 tax return If any gain from the sale of the property is not recognized because of this rule, the basis of each partner's interest in the partnership is increased by the partner's share of that gain. Can i amend my 2009 tax return Gains. Can i amend my 2009 tax return   Gains are treated as ordinary income in a sale or exchange of property directly or indirectly between a person and a partnership, or between two partnerships, if both of the following tests are met. Can i amend my 2009 tax return More than 50% of the capital or profits interest in the partnership(s) is directly or indirectly owned by the same person(s). Can i amend my 2009 tax return The property in the hands of the transferee immediately after the transfer is not a capital asset. Can i amend my 2009 tax return Property that is not a capital asset includes accounts receivable, inventory, stock-in-trade, and depreciable or real property used in a trade or business. Can i amend my 2009 tax return More than 50% ownership. Can i amend my 2009 tax return   To determine if there is more than 50% ownership in partnership capital or profits, the following rules apply. Can i amend my 2009 tax return An interest directly or indirectly owned by, or for, a corporation, partnership, estate, or trust is considered to be owned proportionately by, or for, its shareholders, partners, or beneficiaries. Can i amend my 2009 tax return An individual is considered to own the interest directly or indirectly owned by, or for, the individual's family. Can i amend my 2009 tax return For this rule, “family” includes only brothers, sisters, half-brothers, half-sisters, spouses, ancestors, and lineal descendants. Can i amend my 2009 tax return If a person is considered to own an interest using rule (1), that person (the “constructive owner”) is treated as if actually owning that interest when rules (1) and (2) are applied. Can i amend my 2009 tax return However, if a person is considered to own an interest using rule (2), that person is not treated as actually owning that interest in reapplying rule (2) to make another person the constructive owner. Can i amend my 2009 tax return Example. Can i amend my 2009 tax return Individuals A and B and Trust T are equal partners in Partnership ABT. Can i amend my 2009 tax return A's husband, AH, is the sole beneficiary of Trust T. Can i amend my 2009 tax return Trust T's partnership interest will be attributed to AH only for the purpose of further attributing the interest to A. Can i amend my 2009 tax return As a result, A is a more-than-50% partner. Can i amend my 2009 tax return This means that any deduction for losses on transactions between her and ABT will not be allowed, and gain from property that in the hands of the transferee is not a capital asset is treated as ordinary, rather than capital, gain. Can i amend my 2009 tax return More information. Can i amend my 2009 tax return   For more information on these special rules, see Sales and Exchanges Between Related Persons in chapter 2 of Publication 544. Can i amend my 2009 tax return Contribution of Property Usually, neither the partner nor the partnership recognizes a gain or loss when property is contributed to the partnership in exchange for a partnership interest. Can i amend my 2009 tax return This applies whether a partnership is being formed or is already operating. Can i amend my 2009 tax return The partnership's holding period for the property includes the partner's holding period. Can i amend my 2009 tax return The contribution of limited partnership interests in one partnership for limited partnership interests in another partnership qualifies as a tax-free contribution of property to the second partnership if the transaction is made for business purposes. Can i amend my 2009 tax return The exchange is not subject to the rules explained later under Disposition of Partner's Interest. Can i amend my 2009 tax return Disguised sales. Can i amend my 2009 tax return   A contribution of money or other property to the partnership followed by a distribution of different property from the partnership to the partner is treated not as a contribution and distribution, but as a sale of property, if both of the following tests are met. Can i amend my 2009 tax return The distribution would not have been made but for the contribution. Can i amend my 2009 tax return The partner's right to the distribution does not depend on the success of partnership operations. Can i amend my 2009 tax return   All facts and circumstances are considered in determining if the contribution and distribution are more properly characterized as a sale. Can i amend my 2009 tax return However, if the contribution and distribution occur within 2 years of each other, the transfers are presumed to be a sale unless the facts clearly indicate that the transfers are not a sale. Can i amend my 2009 tax return If the contribution and distribution occur more than 2 years apart, the transfers are presumed not to be a sale unless the facts clearly indicate that the transfers are a sale. Can i amend my 2009 tax return Form 8275 required. Can i amend my 2009 tax return   A partner must attach Form 8275, Disclosure Statement, (or other statement) to his or her return if the partner contributes property to a partnership and, within 2 years (before or after the contribution), the partnership transfers money or other consideration to the partner. Can i amend my 2009 tax return For exceptions to this requirement, see section 1. Can i amend my 2009 tax return 707-3(c)(2) of the regulations. Can i amend my 2009 tax return   A partnership must attach Form 8275 (or other statement) to its return if it distributes property to a partner, and, within 2 years (before or after the distribution), the partner transfers money or other consideration to the partnership. Can i amend my 2009 tax return   Form 8275 must include the following information. Can i amend my 2009 tax return A caption identifying the statement as a disclosure under section 707 of the Internal Revenue Code. Can i amend my 2009 tax return A description of the transferred property or money, including its value. Can i amend my 2009 tax return A description of any relevant facts in determining if the transfers are properly viewed as a disguised sale. Can i amend my 2009 tax return See section 1. Can i amend my 2009 tax return 707-3(b)(2) of the regulations for a description of the facts and circumstances considered in determining if the transfers are a disguised sale. Can i amend my 2009 tax return Contribution to partnership treated as investment company. Can i amend my 2009 tax return   Gain is recognized when property is contributed (in exchange for an interest in the partnership) to a partnership that would be treated as an investment company if it were incorporated. Can i amend my 2009 tax return   A partnership is generally treated as an investment company if over 80% of the value of its assets is held for investment and consists of certain readily marketable items. Can i amend my 2009 tax return These items include money, stocks and other equity interests in a corporation, and interests in regulated investment companies and real estate investment trusts. Can i amend my 2009 tax return For more information, see section 351(e)(1) of the Internal Revenue Code and the related regulations. Can i amend my 2009 tax return Whether a partnership is treated as an investment company under this test is ordinarily determined immediately after the transfer of property. Can i amend my 2009 tax return   This rule applies to limited partnerships and general partnerships, regardless of whether they are privately formed or publicly syndicated. Can i amend my 2009 tax return Contribution to foreign partnership. Can i amend my 2009 tax return   A domestic partnership that contributed property after August 5, 1997, to a foreign partnership in exchange for a partnership interest may have to file Form 8865 if either of the following apply. Can i amend my 2009 tax return Immediately after the contribution, the partnership owned, directly or indirectly, at least a 10% interest in the foreign partnership. Can i amend my 2009 tax return The fair market value of the property contributed to the foreign partnership, when added to other contributions of property made to the partnership during the preceding 12-month period, is greater than $100,000. Can i amend my 2009 tax return   The partnership may also have to file Form 8865, even if no contributions are made during the tax year, if it owns a 10% or more interest in a foreign partnership at any time during the year. Can i amend my 2009 tax return See the form instructions for more information. Can i amend my 2009 tax return Basis of contributed property. Can i amend my 2009 tax return   If a partner contributes property to a partnership, the partnership's basis for determining depreciation, depletion, gain, or loss for the property is the same as the partner's adjusted basis for the property when it was contributed, increased by any gain recognized by the partner at the time of contribution. Can i amend my 2009 tax return Allocations to account for built-in gain or loss. Can i amend my 2009 tax return   The fair market value of property at the time it is contributed may be different from the partner's adjusted basis. Can i amend my 2009 tax return The partnership must allocate among the partners any income, deduction, gain, or loss on the property in a manner that will account for the difference. Can i amend my 2009 tax return This rule also applies to contributions of accounts payable and other accrued but unpaid items of a cash basis partner. Can i amend my 2009 tax return   The partnership can use different allocation methods for different items of contributed property. Can i amend my 2009 tax return A single reasonable method must be consistently applied to each item, and the overall method or combination of methods must be reasonable. Can i amend my 2009 tax return See section 1. Can i amend my 2009 tax return 704-3 of the regulations for allocation methods generally considered reasonable. Can i amend my 2009 tax return   If the partnership sells contributed property and recognizes gain or loss, built-in gain or loss is allocated to the contributing partner. Can i amend my 2009 tax return If contributed property is subject to depreciation or other cost recovery, the allocation of deductions for these items takes into account built-in gain or loss on the property. Can i amend my 2009 tax return However, the total depreciation, depletion, gain, or loss allocated to partners cannot be more than the depreciation or depletion allowable to the partnership or the gain or loss realized by the partnership. Can i amend my 2009 tax return Example. Can i amend my 2009 tax return Areta and Sofia formed an equal partnership. Can i amend my 2009 tax return Areta contributed $10,000 in cash to the partnership and Sofia contributed depreciable property with a fair market value of $10,000 and an adjusted basis of $4,000. Can i amend my 2009 tax return The partnership's basis for depreciation is limited to the adjusted basis of the property in Sofia's hands, $4,000. Can i amend my 2009 tax return In effect, Areta purchased an undivided one-half interest in the depreciable property with her contribution of $10,000. Can i amend my 2009 tax return Assuming that the depreciation rate is 10% a year under the General Depreciation System (GDS), she would have been entitled to a depreciation deduction of $500 per year, based on her interest in the partnership, if the adjusted basis of the property equaled its fair market value when contributed. Can i amend my 2009 tax return To simplify this example, the depreciation deductions are determined without regard to any first-year depreciation conventions. Can i amend my 2009 tax return However, since the partnership is allowed only $400 per year of depreciation (10% of $4,000), no more than $400 can be allocated between the partners. Can i amend my 2009 tax return The entire $400 must be allocated to Areta. Can i amend my 2009 tax return Distribution of contributed property to another partner. Can i amend my 2009 tax return   If a partner contributes property to a partnership and the partnership distributes the property to another partner within 7 years of the contribution, the contributing partner must recognize gain or loss on the distribution. Can i amend my 2009 tax return   The recognized gain or loss is the amount the contributing partner would have recognized if the property had been sold for its fair market value when it was distributed. Can i amend my 2009 tax return This amount is the difference between the property's basis and its fair market value at the time of contribution. Can i amend my 2009 tax return The character of the gain or loss will be the same as the character of the gain or loss that would have resulted if the partnership had sold the property to the distributee partner. Can i amend my 2009 tax return Appropriate adjustments must be made to the adjusted basis of the contributing partner's partnership interest and to the adjusted basis of the property distributed to reflect the recognized gain or loss. Can i amend my 2009 tax return Disposition of certain contributed property. Can i amend my 2009 tax return   The following rules determine the character of the partnership's gain or loss on a disposition of certain types of contributed property. Can i amend my 2009 tax return Unrealized receivables. Can i amend my 2009 tax return If the property was an unrealized receivable in the hands of the contributing partner, any gain or loss on its disposition by the partnership is ordinary income or loss. Can i amend my 2009 tax return Unrealized receivables are defined later under Payments for Unrealized Receivables and Inventory Items. Can i amend my 2009 tax return When reading the definition, substitute “partner” for “partnership. Can i amend my 2009 tax return ” Inventory items. Can i amend my 2009 tax return If the property was an inventory item in the hands of the contributing partner, any gain or loss on its disposition by the partnership within 5 years after the contribution is ordinary income or loss. Can i amend my 2009 tax return Inventory items are defined later in Payments for Unrealized Receivables and Inventory Items. Can i amend my 2009 tax return Capital loss property. Can i amend my 2009 tax return If the property was a capital asset in the contributing partner's hands, any loss on its disposition by the partnership within 5 years after the contribution is a capital loss. Can i amend my 2009 tax return The capital loss is limited to the amount by which the partner's adjusted basis for the property exceeded the property's fair market value immediately before the contribution. Can i amend my 2009 tax return Substituted basis property. Can i amend my 2009 tax return If the disposition of any of the property listed in (1), (2), or (3) is a nonrecognition transaction, these rules apply when the recipient of the property disposes of any substituted basis property (other than certain corporate stock) resulting from the transaction. Can i amend my 2009 tax return Contribution of Services A partner can acquire an interest in partnership capital or profits as compensation for services performed or to be performed. Can i amend my 2009 tax return Capital interest. Can i amend my 2009 tax return   A capital interest is an interest that would give the holder a share of the proceeds if the partnership's assets were sold at fair market value and the proceeds were distributed in a complete liquidation of the partnership. Can i amend my 2009 tax return This determination generally is made at the time of receipt of the partnership interest. Can i amend my 2009 tax return The fair market value of such an interest received by a partner as compensation for services must generally be included in the partner's gross income in the first tax year in which the partner can transfer the interest or the interest is not subject to a substantial risk of forfeiture. Can i amend my 2009 tax return The capital interest transferred as compensation for services is subject to the rules for restricted property discussed in Publication 525 under Employee Compensation. Can i amend my 2009 tax return   The fair market value of an interest in partnership capital transferred to a partner as payment for services to the partnership is a guaranteed payment, discussed earlier. Can i amend my 2009 tax return Profits interest. Can i amend my 2009 tax return   A profits interest is a partnership interest other than a capital interest. Can i amend my 2009 tax return If a person receives a profits interest for providing services to, or for the benefit of, a partnership in a partner capacity or in anticipation of being a partner, the receipt of such an interest is not a taxable event for the partner or the partnership. Can i amend my 2009 tax return However, this does not apply in the following situations. Can i amend my 2009 tax return The profits interest relates to a substantially certain and predictable stream of income from partnership assets, such as income from high-quality debt securities or a high-quality net lease. Can i amend my 2009 tax return Within 2 years of receipt, the partner disposes of the profits interest. Can i amend my 2009 tax return The profits interest is a limited partnership interest in a publicly traded partnership. Can i amend my 2009 tax return   A profits interest transferred as compensation for services is not subject to the rules for restricted property that apply to capital interests. Can i amend my 2009 tax return Basis of Partner's Interest The basis of a partnership interest is the money plus the adjusted basis of any property the partner contributed. Can i amend my 2009 tax return If the partner must recognize gain as a result of the contribution, this gain is included in the basis of his or her interest. Can i amend my 2009 tax return Any increase in a partner's individual liabilities because of an assumption of partnership liabilities is considered a contribution of money to the partnership by the partner. Can i amend my 2009 tax return Interest acquired by gift, etc. Can i amend my 2009 tax return   If a partner acquires an interest in a partnership by gift, inheritance, or under any circumstance other than by a contribution of money or property to the partnership, the partner's basis must be determined using the basis rules described in Publication 551. Can i amend my 2009 tax return Adjusted Basis There is a worksheet for adjusting the basis of a partner's interest in the partnership in the Partner's Instructions for Schedule K-1 (Form 1065). Can i amend my 2009 tax return The basis of an interest in a partnership is increased or decreased by certain items. Can i amend my 2009 tax return Increases. Can i amend my 2009 tax return   A partner's basis is increased by the following items. Can i amend my 2009 tax return The partner's additional contributions to the partnership, including an increased share of, or assumption of, partnership liabilities. Can i amend my 2009 tax return The partner's distributive share of taxable and nontaxable partnership income. Can i amend my 2009 tax return The partner's distributive share of the excess of the deductions for depletion over the basis of the depletable property, unless the property is oil or gas wells whose basis has been allocated to partners. Can i amend my 2009 tax return Decreases. Can i amend my 2009 tax return   The partner's basis is decreased (but never below zero) by the following items. Can i amend my 2009 tax return The money (including a decreased share of partnership liabilities or an assumption of the partner's individual liabilities by the partnership) and adjusted basis of property distributed to the partner by the partnership. Can i amend my 2009 tax return The partner's distributive share of the partnership losses (including capital losses). Can i amend my 2009 tax return The partner's distributive share of nondeductible partnership expenses that are not capital expenditures. Can i amend my 2009 tax return This includes the partner's share of any section 179 expenses, even if the partner cannot deduct the entire amount on his or her individual income tax return. Can i amend my 2009 tax return The partner's deduction for depletion for any partnership oil and gas wells, up to the proportionate share of the adjusted basis of the wells allocated to the partner. Can i amend my 2009 tax return Partner's liabilities assumed by partnership. Can i amend my 2009 tax return   If contributed property is subject to a debt or if a partner's liabilities are assumed by the partnership, the basis of that partner's interest is reduced (but not below zero) by the liability assumed by the other partners. Can i amend my 2009 tax return This partner must reduce his or her basis because the assumption of the liability is treated as a distribution of money to that partner. Can i amend my 2009 tax return The other partners' assumption of the liability is treated as a contribution by them of money to the partnership. Can i amend my 2009 tax return See Effect of Partnership Liabilities , later. Can i amend my 2009 tax return Example 1. Can i amend my 2009 tax return Ivan acquired a 20% interest in a partnership by contributing property that had an adjusted basis to him of $8,000 and a $4,000 mortgage. Can i amend my 2009 tax return The partnership assumed payment of the mortgage. Can i amend my 2009 tax return The basis of Ivan's interest is: Adjusted basis of contributed property $8,000 Minus: Part of mortgage assumed by other partners (80% × $4,000) 3,200 Basis of Ivan's partnership interest $4,800 Example 2. Can i amend my 2009 tax return If, in Example 1, the contributed property had a $12,000 mortgage, the basis of Ivan's partnership interest would be zero. Can i amend my 2009 tax return The $1,600 difference between the mortgage assumed by the other partners, $9,600 (80% × $12,000), and his basis of $8,000 would be treated as capital gain from the sale or exchange of a partnership interest. Can i amend my 2009 tax return However, this gain would not increase the basis of his partnership interest. Can i amend my 2009 tax return Book value of partner's interest. Can i amend my 2009 tax return   The adjusted basis of a partner's interest is determined without considering any amount shown in the partnership books as a capital, equity, or similar account. Can i amend my 2009 tax return Example. Can i amend my 2009 tax return Enzo contributes to his partnership property that has an adjusted basis of $400 and a fair market value of $1,000. Can i amend my 2009 tax return His partner contributes $1,000 cash. Can i amend my 2009 tax return While each partner has increased his capital account by $1,000, which will be re