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Can I Amend My Tax Return

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Can I Amend My Tax Return

Can i amend my tax return 13. Can i amend my tax return   Basis of Property Table of Contents Introduction Useful Items - You may want to see: Cost BasisReal Property Adjusted BasisIncreases to Basis Decreases to Basis Basis Other Than CostProperty Received for Services Taxable Exchanges Involuntary Conversions Nontaxable Exchanges Property Transferred From a Spouse Property Received as a Gift Inherited Property Property Changed From Personal to Business or Rental Use Stocks and Bonds Introduction This chapter discusses how to figure your basis in property. Can i amend my tax return It is divided into the following sections. Can i amend my tax return Cost basis. Can i amend my tax return Adjusted basis. Can i amend my tax return Basis other than cost. Can i amend my tax return Your basis is the amount of your investment in property for tax purposes. Can i amend my tax return Use the basis to figure gain or loss on the sale, exchange, or other disposition of property. Can i amend my tax return Also use it to figure deductions for depreciation, amortization, depletion, and casualty losses. Can i amend my tax return If you use property for both business or investment purposes and for personal purposes, you must allocate the basis based on the use. Can i amend my tax return Only the basis allocated to the business or investment use of the property can be depreciated. Can i amend my tax return Your original basis in property is adjusted (increased or decreased) by certain events. Can i amend my tax return For example, if you make improvements to the property, increase your basis. Can i amend my tax return If you take deductions for depreciation or casualty losses, or claim certain credits, reduce your basis. Can i amend my tax return Keep accurate records of all items that affect the basis of your property. Can i amend my tax return For more information on keeping records, see chapter 1. Can i amend my tax return Useful Items - You may want to see: Publication 15-B Employer's Tax Guide to Fringe Benefits 525 Taxable and Nontaxable Income 535 Business Expenses 537 Installment Sales 544 Sales and Other Dispositions of Assets 550 Investment Income and Expenses 551 Basis of Assets 946 How To Depreciate Property Cost Basis The basis of property you buy is usually its cost. Can i amend my tax return The cost is the amount you pay in cash, debt obligations, other property, or services. Can i amend my tax return Your cost also includes amounts you pay for the following items: Sales tax, Freight, Installation and testing, Excise taxes, Legal and accounting fees (when they must be capitalized), Revenue stamps, Recording fees, and Real estate taxes (if you assume liability for the seller). Can i amend my tax return In addition, the basis of real estate and business assets may include other items. Can i amend my tax return Loans with low or no interest. Can i amend my tax return    If you buy property on a time-payment plan that charges little or no interest, the basis of your property is your stated purchase price minus any amount considered to be unstated interest. Can i amend my tax return You generally have unstated interest if your interest rate is less than the applicable federal rate. Can i amend my tax return   For more information, see Unstated Interest and Original Issue Discount (OID) in Publication 537. Can i amend my tax return Real Property Real property, also called real estate, is land and generally anything built on, growing on, or attached to land. Can i amend my tax return If you buy real property, certain fees and other expenses you pay are part of your cost basis in the property. Can i amend my tax return Lump sum purchase. Can i amend my tax return   If you buy buildings and the land on which they stand for a lump sum, allocate the cost basis among the land and the buildings. Can i amend my tax return Allocate the cost basis according to the respective fair market values (FMVs) of the land and buildings at the time of purchase. Can i amend my tax return Figure the basis of each asset by multiplying the lump sum by a fraction. Can i amend my tax return The numerator is the FMV of that asset and the denominator is the FMV of the whole property at the time of purchase. Can i amend my tax return    If you are not certain of the FMVs of the land and buildings, you can allocate the basis according to their assessed values for real estate tax purposes. Can i amend my tax return Fair market value (FMV). Can i amend my tax return   FMV is the price at which the property would change hands between a willing buyer and a willing seller, neither having to buy or sell, and both having reasonable knowledge of all the necessary facts. Can i amend my tax return Sales of similar property on or about the same date may be helpful in figuring the FMV of the property. Can i amend my tax return Assumption of mortgage. Can i amend my tax return   If you buy property and assume (or buy the property subject to) an existing mortgage on the property, your basis includes the amount you pay for the property plus the amount to be paid on the mortgage. Can i amend my tax return Settlement costs. Can i amend my tax return   Your basis includes the settlement fees and closing costs you paid for buying the property. Can i amend my tax return (A fee for buying property is a cost that must be paid even if you buy the property for cash. Can i amend my tax return ) Do not include fees and costs for getting a loan on the property in your basis. Can i amend my tax return   The following are some of the settlement fees or closing costs you can include in the basis of your property. Can i amend my tax return Abstract fees (abstract of title fees). Can i amend my tax return Charges for installing utility services. Can i amend my tax return Legal fees (including fees for the title search and preparation of the sales contract and deed). Can i amend my tax return Recording fees. Can i amend my tax return Survey fees. Can i amend my tax return Transfer taxes. Can i amend my tax return Owner's title insurance. Can i amend my tax return Any amounts the seller owes that you agree to pay, such as back taxes or interest, recording or mortgage fees, charges for improvements or repairs, and sales commissions. Can i amend my tax return   Settlement costs do not include amounts placed in escrow for the future payment of items such as taxes and insurance. Can i amend my tax return   The following are some of the settlement fees and closing costs you cannot include in the basis of property. Can i amend my tax return Casualty insurance premiums. Can i amend my tax return Rent for occupancy of the property before closing. Can i amend my tax return Charges for utilities or other services related to occupancy of the property before closing. Can i amend my tax return Charges connected with getting a loan, such as points (discount points, loan origination fees), mortgage insurance premiums, loan assumption fees, cost of a credit report, and fees for an appraisal required by a lender. Can i amend my tax return Fees for refinancing a mortgage. Can i amend my tax return Real estate taxes. Can i amend my tax return   If you pay real estate taxes the seller owed on real property you bought, and the seller did not reimburse you, treat those taxes as part of your basis. Can i amend my tax return You cannot deduct them as an expense. Can i amend my tax return    If you reimburse the seller for taxes the seller paid for you, you can usually deduct that amount as an expense in the year of purchase. Can i amend my tax return Do not include that amount in the basis of your property. Can i amend my tax return If you did not reimburse the seller, you must reduce your basis by the amount of those taxes. Can i amend my tax return Points. Can i amend my tax return   If you pay points to get a loan (including a mortgage, second mortgage, line of credit, or a home equity loan), do not add the points to the basis of the related property. Can i amend my tax return Generally, you deduct the points over the term of the loan. Can i amend my tax return For more information on how to deduct points, see chapter 23. Can i amend my tax return Points on home mortgage. Can i amend my tax return   Special rules may apply to points you and the seller pay when you get a mortgage to buy your main home. Can i amend my tax return If certain requirements are met, you can deduct the points in full for the year in which they are paid. Can i amend my tax return Reduce the basis of your home by any seller-paid points. Can i amend my tax return Adjusted Basis Before figuring gain or loss on a sale, exchange, or other disposition of property or figuring allowable depreciation, depletion, or amortization, you must usually make certain adjustments (increases and decreases) to the cost basis or basis other than cost (discussed later) of the property. Can i amend my tax return The result is the adjusted basis. Can i amend my tax return Increases to Basis Increase the basis of any property by all items properly added to a capital account. Can i amend my tax return Examples of items that increase basis are shown in Table 13-1. Can i amend my tax return These include the items discussed below. Can i amend my tax return Improvements. Can i amend my tax return   Add to your basis in property the cost of improvements having a useful life of more than 1 year, that increase the value of the property, lengthen its life, or adapt it to a different use. Can i amend my tax return For example, improvements include putting a recreation room in your unfinished basement, adding another bathroom or bedroom, putting up a fence, putting in new plumbing or wiring, installing a new roof, or paving your driveway. Can i amend my tax return Assessments for local improvements. Can i amend my tax return   Add to the basis of property assessments for improvements such as streets and sidewalks if they increase the value of the property assessed. Can i amend my tax return Do not deduct them as taxes. Can i amend my tax return However, you can deduct as taxes assessments for maintenance or repairs, or for meeting interest charges related to the improvements. Can i amend my tax return Example. Can i amend my tax return Your city changes the street in front of your store into an enclosed pedestrian mall and assesses you and other affected property owners for the cost of the conversion. Can i amend my tax return Add the assessment to your property's basis. Can i amend my tax return In this example, the assessment is a depreciable asset. Can i amend my tax return Decreases to Basis Decrease the basis of any property by all items that represent a return of capital for the period during which you held the property. Can i amend my tax return Examples of items that decrease basis are shown in Table 13-1. Can i amend my tax return These include the items discussed below. Can i amend my tax return Table 13-1. Can i amend my tax return Examples of Adjustments to Basis Increases to Basis Decreases to Basis • Capital improvements: • Exclusion from income of   Putting an addition on your home subsidies for energy conservation   Replacing an entire roof measures   Paving your driveway     Installing central air conditioning • Casualty or theft loss deductions   Rewiring your home and insurance reimbursements       • Assessments for local improvements:     Water connections     Extending utility service lines to the property • Postponed gain from the sale of a home   Sidewalks • Alternative motor vehicle credit  (Form 8910)   Roads       • Alternative fuel vehicle refueling     property credit (Form 8911)           • Residential energy credits (Form 5695)       • Casualty losses: • Depreciation and section 179 deduction   Restoring damaged property     • Nontaxable corporate distributions • Legal fees:     Cost of defending and perfecting a title • Certain canceled debt excluded from   Fees for getting a reduction of an assessment income     • Zoning costs • Easements           • Adoption tax benefits Casualty and theft losses. Can i amend my tax return   If you have a casualty or theft loss, decrease the basis in your property by any insurance proceeds or other reimbursement and by any deductible loss not covered by insurance. Can i amend my tax return    You must increase your basis in the property by the amount you spend on repairs that restore the property to its pre-casualty condition. Can i amend my tax return   For more information on casualty and theft losses, see chapter 25. Can i amend my tax return Depreciation and section 179 deduction. Can i amend my tax return   Decrease the basis of your qualifying business property by any section 179 deduction you take and the depreciation you deducted, or could have deducted (including any special depreciation allowance), on your tax returns under the method of depreciation you selected. Can i amend my tax return   For more information about depreciation and the section 179 deduction, see Publication 946 and the Instructions for Form 4562. Can i amend my tax return Example. Can i amend my tax return You owned a duplex used as rental property that cost you $40,000, of which $35,000 was allocated to the building and $5,000 to the land. Can i amend my tax return You added an improvement to the duplex that cost $10,000. Can i amend my tax return In February last year, the duplex was damaged by fire. Can i amend my tax return Up to that time, you had been allowed depreciation of $23,000. Can i amend my tax return You sold some salvaged material for $1,300 and collected $19,700 from your insurance company. Can i amend my tax return You deducted a casualty loss of $1,000 on your income tax return for last year. Can i amend my tax return You spent $19,000 of the insurance proceeds for restoration of the duplex, which was completed this year. Can i amend my tax return You must use the duplex's adjusted basis after the restoration to determine depreciation for the rest of the property's recovery period. Can i amend my tax return Figure the adjusted basis of the duplex as follows: Original cost of duplex $35,000 Addition to duplex 10,000 Total cost of duplex $45,000 Minus: Depreciation 23,000 Adjusted basis before casualty $22,000 Minus: Insurance proceeds $19,700     Deducted casualty loss 1,000     Salvage proceeds 1,300 22,000 Adjusted basis after casualty $-0- Add: Cost of restoring duplex 19,000 Adjusted basis after restoration $19,000 Note. Can i amend my tax return Your basis in the land is its original cost of $5,000. Can i amend my tax return Easements. Can i amend my tax return   The amount you receive for granting an easement is generally considered to be proceeds from the sale of an interest in real property. Can i amend my tax return It reduces the basis of the affected part of the property. Can i amend my tax return If the amount received is more than the basis of the part of the property affected by the easement, reduce your basis in that part to zero and treat the excess as a recognized gain. Can i amend my tax return   If the gain is on a capital asset, see chapter 16 for information about how to report it. Can i amend my tax return If the gain is on property used in a trade or business, see Publication 544 for information about how to report it. Can i amend my tax return Exclusion of subsidies for energy conservation measures. Can i amend my tax return   You can exclude from gross income any subsidy you received from a public utility company for the purchase or installation of an energy conservation measure for a dwelling unit. Can i amend my tax return Reduce the basis of the property for which you received the subsidy by the excluded amount. Can i amend my tax return For more information about this subsidy, see chapter 12. Can i amend my tax return Postponed gain from sale of home. Can i amend my tax return    If you postponed gain from the sale of your main home under rules in effect before May 7, 1997, you must reduce the basis of the home you acquired as a replacement by the amount of the postponed gain. Can i amend my tax return For more information on the rules for the sale of a home, see chapter 15. Can i amend my tax return Basis Other Than Cost There are many times when you cannot use cost as basis. Can i amend my tax return In these cases, the fair market value or the adjusted basis of the property can be used. Can i amend my tax return Fair market value (FMV) and adjusted basis were discussed earlier. Can i amend my tax return Property Received for Services If you receive property for your services, include the FMV of the property in income. Can i amend my tax return The amount you include in income becomes your basis. Can i amend my tax return If the services were performed for a price agreed on beforehand, it will be accepted as the FMV of the property if there is no evidence to the contrary. Can i amend my tax return Restricted property. Can i amend my tax return   If you receive property for your services and the property is subject to certain restrictions, your basis in the property is its FMV when it becomes substantially vested. Can i amend my tax return However, this rule does not apply if you make an election to include in income the FMV of the property at the time it is transferred to you, less any amount you paid for it. Can i amend my tax return Property is substantially vested when it is transferable or when it is not subject to a substantial risk of forfeiture (you do not have a good chance of losing it). Can i amend my tax return For more information, see Restricted Property in Publication 525. Can i amend my tax return Bargain purchases. Can i amend my tax return   A bargain purchase is a purchase of an item for less than its FMV. Can i amend my tax return If, as compensation for services, you buy goods or other property at less than FMV, include the difference between the purchase price and the property's FMV in your income. Can i amend my tax return Your basis in the property is its FMV (your purchase price plus the amount you include in income). Can i amend my tax return   If the difference between your purchase price and the FMV is a qualified employee discount, do not include the difference in income. Can i amend my tax return However, your basis in the property is still its FMV. Can i amend my tax return See Employee Discounts in Publication 15-B. Can i amend my tax return Taxable Exchanges A taxable exchange is one in which the gain is taxable or the loss is deductible. Can i amend my tax return A taxable gain or deductible loss also is known as a recognized gain or loss. Can i amend my tax return If you receive property in exchange for other property in a taxable exchange, the basis of the property you receive is usually its FMV at the time of the exchange. Can i amend my tax return Involuntary Conversions If you receive replacement property as a result of an involuntary conversion, such as a casualty, theft, or condemnation, figure the basis of the replacement property using the basis of the converted property. Can i amend my tax return Similar or related property. Can i amend my tax return   If you receive replacement property similar or related in service or use to the converted property, the replacement property's basis is the same as the converted property's basis on the date of the conversion, with the following adjustments. Can i amend my tax return Decrease the basis by the following. Can i amend my tax return Any loss you recognize on the involuntary conversion. Can i amend my tax return Any money you receive that you do not spend on similar property. Can i amend my tax return Increase the basis by the following. Can i amend my tax return Any gain you recognize on the involuntary conversion. Can i amend my tax return Any cost of acquiring the replacement property. Can i amend my tax return Money or property not similar or related. Can i amend my tax return    If you receive money or property not similar or related in service or use to the converted property, and you buy replacement property similar or related in service or use to the converted property, the basis of the replacement property is its cost decreased by the gain not recognized on the conversion. Can i amend my tax return Example. Can i amend my tax return The state condemned your property. Can i amend my tax return The adjusted basis of the property was $26,000 and the state paid you $31,000 for it. Can i amend my tax return You realized a gain of $5,000 ($31,000 − $26,000). Can i amend my tax return You bought replacement property similar in use to the converted property for $29,000. Can i amend my tax return You recognize a gain of $2,000 ($31,000 − $29,000), the unspent part of the payment from the state. Can i amend my tax return Your unrecognized gain is $3,000, the difference between the $5,000 realized gain and the $2,000 recognized gain. Can i amend my tax return The basis of the replacement property is figured as follows: Cost of replacement property $29,000 Minus: Gain not recognized 3,000 Basis of replacement property $26,000 Allocating the basis. Can i amend my tax return   If you buy more than one piece of replacement property, allocate your basis among the properties based on their respective costs. Can i amend my tax return Basis for depreciation. Can i amend my tax return   Special rules apply in determining and depreciating the basis of MACRS property acquired in an involuntary conversion. Can i amend my tax return For information, see What Is the Basis of Your Depreciable Property? in chapter 1 of Publication 946. Can i amend my tax return Nontaxable Exchanges A nontaxable exchange is an exchange in which you are not taxed on any gain and you cannot deduct any loss. Can i amend my tax return If you receive property in a nontaxable exchange, its basis is generally the same as the basis of the property you transferred. Can i amend my tax return See Nontaxable Trades in chapter 14. Can i amend my tax return Like-Kind Exchanges The exchange of property for the same kind of property is the most common type of nontaxable exchange. Can i amend my tax return To qualify as a like-kind exchange, the property traded and the property received must be both of the following. Can i amend my tax return Qualifying property. Can i amend my tax return Like-kind property. Can i amend my tax return The basis of the property you receive is generally the same as the adjusted basis of the property you gave up. Can i amend my tax return If you trade property in a like-kind exchange and also pay money, the basis of the property received is the adjusted basis of the property you gave up increased by the money you paid. Can i amend my tax return Qualifying property. Can i amend my tax return   In a like-kind exchange, you must hold for investment or for productive use in your trade or business both the property you give up and the property you receive. Can i amend my tax return Like-kind property. Can i amend my tax return   There must be an exchange of like-kind property. Can i amend my tax return Like-kind properties are properties of the same nature or character, even if they differ in grade or quality. Can i amend my tax return The exchange of real estate for real estate and personal property for similar personal property are exchanges of like-kind property. Can i amend my tax return Example. Can i amend my tax return You trade in an old truck used in your business with an adjusted basis of $1,700 for a new one costing $6,800. Can i amend my tax return The dealer allows you $2,000 on the old truck, and you pay $4,800. Can i amend my tax return This is a like-kind exchange. Can i amend my tax return The basis of the new truck is $6,500 (the adjusted basis of the old one, $1,700, plus the amount you paid, $4,800). Can i amend my tax return If you sell your old truck to a third party for $2,000 instead of trading it in and then buy a new one from the dealer, you have a taxable gain of $300 on the sale (the $2,000 sale price minus the $1,700 adjusted basis). Can i amend my tax return The basis of the new truck is the price you pay the dealer. Can i amend my tax return Partially nontaxable exchanges. Can i amend my tax return   A partially nontaxable exchange is an exchange in which you receive unlike property or money in addition to like-kind property. Can i amend my tax return The basis of the property you receive is the same as the adjusted basis of the property you gave up, with the following adjustments. Can i amend my tax return Decrease the basis by the following amounts. Can i amend my tax return Any money you receive. Can i amend my tax return Any loss you recognize on the exchange. Can i amend my tax return Increase the basis by the following amounts. Can i amend my tax return Any additional costs you incur. Can i amend my tax return Any gain you recognize on the exchange. Can i amend my tax return If the other party to the exchange assumes your liabilities, treat the debt assumption as money you received in the exchange. Can i amend my tax return Allocation of basis. Can i amend my tax return   If you receive like-kind and unlike properties in the exchange, allocate the basis first to the unlike property, other than money, up to its FMV on the date of the exchange. Can i amend my tax return The rest is the basis of the like-kind property. Can i amend my tax return More information. Can i amend my tax return   See Like-Kind Exchanges in chapter 1 of Publication 544 for more information. Can i amend my tax return Basis for depreciation. Can i amend my tax return   Special rules apply in determining and depreciating the basis of MACRS property acquired in a like-kind exchange. Can i amend my tax return For information, see What Is the Basis of Your Depreciable Property? in chapter 1 of Publication 946. Can i amend my tax return Property Transferred From a Spouse The basis of property transferred to you or transferred in trust for your benefit by your spouse is the same as your spouse's adjusted basis. Can i amend my tax return The same rule applies to a transfer by your former spouse that is incident to divorce. Can i amend my tax return However, for property transferred in trust, adjust your basis for any gain recognized by your spouse or former spouse if the liabilities assumed, plus the liabilities to which the property is subject, are more than the adjusted basis of the property transferred. Can i amend my tax return If the property transferred to you is a series E, series EE, or series I U. Can i amend my tax return S. Can i amend my tax return savings bond, the transferor must include in income the interest accrued to the date of transfer. Can i amend my tax return Your basis in the bond immediately after the transfer is equal to the transferor's basis increased by the interest income includible in the transferor's income. Can i amend my tax return For more information on these bonds, see chapter 7. Can i amend my tax return At the time of the transfer, the transferor must give you the records needed to determine the adjusted basis and holding period of the property as of the date of the transfer. Can i amend my tax return For more information about the transfer of property from a spouse, see chapter 14. Can i amend my tax return Property Received as a Gift To figure the basis of property you receive as a gift, you must know its adjusted basis to the donor just before it was given to you, its FMV at the time it was given to you, and any gift tax paid on it. Can i amend my tax return FMV less than donor's adjusted basis. Can i amend my tax return   If the FMV of the property at the time of the gift is less than the donor's adjusted basis, your basis depends on whether you have a gain or a loss when you dispose of the property. Can i amend my tax return Your basis for figuring gain is the same as the donor's adjusted basis plus or minus any required adjustments to basis while you held the property. Can i amend my tax return Your basis for figuring loss is its FMV when you received the gift plus or minus any required adjustments to basis while you held the property. Can i amend my tax return See Adjusted Basis , earlier. Can i amend my tax return Example. Can i amend my tax return You received an acre of land as a gift. Can i amend my tax return At the time of the gift, the land had an FMV of $8,000. Can i amend my tax return The donor's adjusted basis was $10,000. Can i amend my tax return After you received the property, no events occurred to increase or decrease your basis. Can i amend my tax return If you later sell the property for $12,000, you will have a $2,000 gain because you must use the donor's adjusted basis at the time of the gift ($10,000) as your basis to figure gain. Can i amend my tax return If you sell the property for $7,000, you will have a $1,000 loss because you must use the FMV at the time of the gift ($8,000) as your basis to figure loss. Can i amend my tax return If the sales price is between $8,000 and $10,000, you have neither gain nor loss. Can i amend my tax return Business property. Can i amend my tax return   If you hold the gift as business property, your basis for figuring any depreciation, depletion, or amortization deductions is the same as the donor's adjusted basis plus or minus any required adjustments to basis while you hold the property. Can i amend my tax return FMV equal to or greater than donor's adjusted basis. Can i amend my tax return   If the FMV of the property is equal to or greater than the donor's adjusted basis, your basis is the donor's adjusted basis at the time you received the gift. Can i amend my tax return Increase your basis by all or part of any gift tax paid, depending on the date of the gift, explained later. Can i amend my tax return   Also, for figuring gain or loss from a sale or other disposition or for figuring depreciation, depletion, or amortization deductions on business property, you must increase or decrease your basis (the donor's adjusted basis) by any required adjustments to basis while you held the property. Can i amend my tax return See Adjusted Basis , earlier. Can i amend my tax return   If you received a gift during the tax year, increase your basis in the gift (the donor's adjusted basis) by the part of the gift tax paid on it due to the net increase in value of the gift. Can i amend my tax return Figure the increase by multiplying the gift tax paid by a fraction. Can i amend my tax return The numerator of the fraction is the net increase in value of the gift and the denominator is the amount of the gift. Can i amend my tax return   The net increase in value of the gift is the FMV of the gift minus the donor's adjusted basis. Can i amend my tax return The amount of the gift is its value for gift tax purposes after reduction by any annual exclusion and marital or charitable deduction that applies to the gift. Can i amend my tax return Example. Can i amend my tax return In 2013, you received a gift of property from your mother that had an FMV of $50,000. Can i amend my tax return Her adjusted basis was $20,000. Can i amend my tax return The amount of the gift for gift tax purposes was $36,000 ($50,000 minus the $14,000 annual exclusion). Can i amend my tax return She paid a gift tax of $7,320 on the property. Can i amend my tax return Your basis is $26,076, figured as follows: Fair market value $50,000 Minus: Adjusted basis −20,000 Net increase in value $30,000     Gift tax paid $7,320 Multiplied by ($30,000 ÷ $36,000) × . Can i amend my tax return 83 Gift tax due to net increase in value $6,076 Adjusted basis of property to your mother +20,000 Your basis in the property $26,076 Note. Can i amend my tax return If you received a gift before 1977, your basis in the gift (the donor's adjusted basis) includes any gift tax paid on it. Can i amend my tax return However, your basis cannot exceed the FMV of the gift at the time it was given to you. Can i amend my tax return Inherited Property Your basis in property you inherited from a decedent, who died before January 1, 2010, or after December 31, 2010, is generally one of the following: The FMV of the property at the date of the decedent's death. Can i amend my tax return The FMV on the alternate valuation date if the personal representative for the estate elects to use alternate valuation. Can i amend my tax return The value under the special-use valuation method for real property used in farming or a closely held business if elected for estate tax purposes. Can i amend my tax return The decedent's adjusted basis in land to the extent of the value excluded from the decedent's taxable estate as a qualified conservation easement. Can i amend my tax return If a federal estate tax return does not have to be filed, your basis in the inherited property is its appraised value at the date of death for state inheritance or transmission taxes. Can i amend my tax return For more information, see the instructions to Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return. Can i amend my tax return Property inherited from a decedent who died in 2010. Can i amend my tax return   If you inherited property from a decedent who died in 2010, special rules may apply. Can i amend my tax return For more information, see Publication 4895, Tax Treatment of Property Acquired From a Decedent Dying in 2010. Can i amend my tax return Community property. Can i amend my tax return   In community property states (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin), husband and wife are each usually considered to own half the community property. Can i amend my tax return When either spouse dies, the total value of the community property, even the part belonging to the surviving spouse, generally becomes the basis of the entire property. Can i amend my tax return For this rule to apply, at least half the value of the community property interest must be includible in the decedent's gross estate, whether or not the estate must file a return. Can i amend my tax return Example. Can i amend my tax return You and your spouse owned community property that had a basis of $80,000. Can i amend my tax return When your spouse died, half the FMV of the community interest was includible in your spouse's estate. Can i amend my tax return The FMV of the community interest was $100,000. Can i amend my tax return The basis of your half of the property after the death of your spouse is $50,000 (half of the $100,000 FMV). Can i amend my tax return The basis of the other half to your spouse's heirs is also $50,000. Can i amend my tax return For more information about community property, see Publication 555, Community Property. Can i amend my tax return Property Changed From Personal to Business or Rental Use If you hold property for personal use and then change it to business use or use it to produce rent, you can begin to depreciate the property at the time of the change. Can i amend my tax return To do so, you must figure its basis for depreciation at the time of the change. Can i amend my tax return An example of changing property held for personal use to business or rental use would be renting out your former personal residence. Can i amend my tax return Basis for depreciation. Can i amend my tax return   The basis for depreciation is the lesser of the following amounts. Can i amend my tax return The FMV of the property on the date of the change. Can i amend my tax return Your adjusted basis on the date of the change. Can i amend my tax return Example. Can i amend my tax return Several years ago, you paid $160,000 to have your house built on a lot that cost $25,000. Can i amend my tax return You paid $20,000 for permanent improvements to the house and claimed a $2,000 casualty loss deduction for damage to the house before changing the property to rental use last year. Can i amend my tax return Because land is not depreciable, you include only the cost of the house when figuring the basis for depreciation. Can i amend my tax return Your adjusted basis in the house when you changed its use was $178,000 ($160,000 + $20,000 − $2,000). Can i amend my tax return On the same date, your property had an FMV of $180,000, of which $15,000 was for the land and $165,000 was for the house. Can i amend my tax return The basis for figuring depreciation on the house is its FMV on the date of the change ($165,000) because it is less than your adjusted basis ($178,000). Can i amend my tax return Sale of property. Can i amend my tax return   If you later sell or dispose of property changed to business or rental use, the basis you use will depend on whether you are figuring gain or loss. Can i amend my tax return Gain. Can i amend my tax return   The basis for figuring a gain is your adjusted basis in the property when you sell the property. Can i amend my tax return Example. Can i amend my tax return Assume the same facts as in the previous example except that you sell the property at a gain after being allowed depreciation deductions of $37,500. Can i amend my tax return Your adjusted basis for figuring gain is $165,500 ($178,000 + $25,000 (land) − $37,500). Can i amend my tax return Loss. Can i amend my tax return   Figure the basis for a loss starting with the smaller of your adjusted basis or the FMV of the property at the time of the change to business or rental use. Can i amend my tax return Then make adjustments (increases and decreases) for the period after the change in the property's use, as discussed earlier under Adjusted Basis . Can i amend my tax return Example. Can i amend my tax return Assume the same facts as in the previous example, except that you sell the property at a loss after being allowed depreciation deductions of $37,500. Can i amend my tax return In this case, you would start with the FMV on the date of the change to rental use ($180,000), because it is less than the adjusted basis of $203,000 ($178,000 + $25,000 (land)) on that date. Can i amend my tax return Reduce that amount ($180,000) by the depreciation deductions ($37,500). Can i amend my tax return The basis for loss is $142,500 ($180,000 − $37,500). Can i amend my tax return Stocks and Bonds The basis of stocks or bonds you buy generally is the purchase price plus any costs of purchase, such as commissions and recording or transfer fees. Can i amend my tax return If you get stocks or bonds other than by purchase, your basis is usually determined by the FMV or the previous owner's adjusted basis, as discussed earlier. Can i amend my tax return You must adjust the basis of stocks for certain events that occur after purchase. Can i amend my tax return For example, if you receive additional stock from nontaxable stock dividends or stock splits, reduce your basis for each share of stock by dividing the adjusted basis of the old stock by the number of shares of old and new stock. Can i amend my tax return This rule applies only when the additional stock received is identical to the stock held. Can i amend my tax return Also reduce your basis when you receive nontaxable distributions. Can i amend my tax return They are a return of capital. Can i amend my tax return Example. Can i amend my tax return In 2011 you bought 100 shares of XYZ stock for $1,000 or $10 a share. Can i amend my tax return In 2012 you bought 100 shares of XYZ stock for $1,600 or $16 a share. Can i amend my tax return In 2013 XYZ declared a 2-for-1 stock split. Can i amend my tax return You now have 200 shares of stock with a basis of $5 a share and 200 shares with a basis of $8 a share. Can i amend my tax return Other basis. Can i amend my tax return   There are other ways to figure the basis of stocks or bonds depending on how you acquired them. Can i amend my tax return For detailed information, see Stocks and Bonds under Basis of Investment Property in chapter 4 of Publication 550. Can i amend my tax return Identifying stocks or bonds sold. Can i amend my tax return   If you can adequately identify the shares of stock or the bonds you sold, their basis is the cost or other basis of the particular shares of stocks or bonds. Can i amend my tax return If you buy and sell securities at various times in varying quantities and you cannot adequately identify the shares you sell, the basis of the securities you sell is the basis of the securities you acquired first. Can i amend my tax return For more information about identifying securities you sell, see Stocks and Bonds under Basis of Investment Property in chapter 4 of Publication 550. Can i amend my tax return Mutual fund shares. Can i amend my tax return   If you sell mutual fund shares you acquired at various times and prices and left on deposit in an account kept by a custodian or agent, you can elect to use an average basis. Can i amend my tax return For more information, see Publication 550. Can i amend my tax return Bond premium. Can i amend my tax return   If you buy a taxable bond at a premium and elect to amortize the premium, reduce the basis of the bond by the amortized premium you deduct each year. Can i amend my tax return See Bond Premium Amortization in chapter 3 of Publication 550 for more information. Can i amend my tax return Although you cannot deduct the premium on a tax-exempt bond, you must amortize the premium each year and reduce your basis in the bond by the amortized amount. Can i amend my tax return Original issue discount (OID) on debt instruments. Can i amend my tax return   You must increase your basis in an OID debt instrument by the OID you include in income for that instrument. Can i amend my tax return See Original Issue Discount (OID) in chapter 7 and Publication 1212, Guide To Original Issue Discount (OID) Instruments. Can i amend my tax return Tax-exempt obligations. Can i amend my tax return    OID on tax-exempt obligations is generally not taxable. Can i amend my tax return However, when you dispose of a tax-exempt obligation issued after September 3, 1982, and acquired after March 1, 1984, you must accrue OID on the obligation to determine its adjusted basis. Can i amend my tax return The accrued OID is added to the basis of the obligation to determine your gain or loss. Can i amend my tax return See chapter 4 of Publication 550. Can i amend my tax return Prev  Up  Next   Home   More Online Publications
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Forms and Publications About Your Appeal Rights

Forms

Offer in Compromise, Form 656-B
A Form 656-B is used to make an offer to compromise your liability for payment of less than the full amount owed.

Claim for Refund and Request for Abatement, Form 843
A Form 843 is submitted to claim a refund (or abatement) of certain overpaid (or over-assessed) taxes, interest, penalties, and additions to tax.

Proposed Assessment of Trust Fund Recovery Penalty, Form 2751
A Form 2751 is used to show the corporate liability data for a proposed trust fund recovery penalty assessment.

Qualifying Children Residency Statement, Form 8836
A Form 8836 is filed with the IRS to show that you and your qualifying child meet the residency test for the earned income credit (EIC).

Collection Appeal Request, Form 9423
A Form 9423 is used to appeal a collection action. Using this form, you may request an appeal of the following actions: notice of federal tax lien, levy, seizure, or termination of an installment agreement.

Request for Appeals Review, Form 12203
This form can be used to request an Appeals review of a proposed IRS adjustment of $25,000 or less per tax year or period.

Request for a Collection Due Process Hearing, Form 12153
A Form 12153 is used to request a collection due process hearing under IRC 6320 and IRC 6330.

Statement of Disagreement, Form 12509
You can use this form to explain why you disagree with the Internal Revenue Service (IRS) Determination concerning relief from joint and several liability for a joint return under Internal Revenue Code sections 6013(e), 6015(b), 6015(c), or 6015(f) in the letter you received with this form.

Publications

Your Rights As a Taxpayer, Publication 1
Explains your rights as a taxpayer and includes information on the examination and collection processes.

Overview of the Appeals Process Brochure, Publication 4227
Explains the mission, overview, and expectations of the appeal process to the taxpayers.

Appeals - Introduction to Alternative Dispute Resolution, Publication 4167
Describes the Fast Track Mediation, Fast Track Settlement and Post-Appeals Mediation programs.

Your Appeal Rights and How to Prepare a Protest If You Don't Agree, Publication 5
Explains your appeal rights and offers information on how to protest an Internal Revenue Agent's examination report.

Collection Appeal Rights, Publication 1660
Explains your appeal rights related to the Collection Due Process & Collection Appeal Program. It also explains collection issues that can be appealed and how to appeal them.

What You Should Know About The IRS Collection Process, Publication 594
Explains what steps the IRS may take to collect overdue taxes. It includes a summary of your rights and responsibilities for paying federal taxes.

The Examination Process, Publication 3498 and 3498A
These publications explain the audit process from the initiation of the examination through the overview of the collection process, including appeals options.

Page Last Reviewed or Updated: 07-Jan-2014

The Can I Amend My Tax Return

Can i amend my tax return Publication 515 - Main Content Table of Contents Withholding of TaxWithholding Agent Withholding and Reporting Obligations Persons Subject to NRA WithholdingIdentifying the Payee Foreign Persons DocumentationBeneficial Owners Foreign Intermediaries and Foreign Flow-Through Entities Standards of Knowledge Presumption Rules Income Subject to NRA WithholdingSource of Income Fixed or Determinable Annual or Periodical Income (FDAP) Withholding on Specific IncomeEffectively Connected Income Income Not Effectively Connected Pay for Personal Services Performed Artists and Athletes (Income Codes 42 and 43) Other Income Foreign Governments and Certain Other Foreign Organizations U. Can i amend my tax return S. Can i amend my tax return Taxpayer Identification NumbersUnexpected payment. Can i amend my tax return Depositing Withheld TaxesWhen Deposits Are Required Adjustment for Overwithholding Returns RequiredJoint owners. Can i amend my tax return Electronic reporting. Can i amend my tax return Partnership Withholding on Effectively Connected IncomeWho Must Withhold Foreign Partner Publicly Traded Partnerships U. Can i amend my tax return S. Can i amend my tax return Real Property InterestForeign corporations. Can i amend my tax return Domestic corporations. Can i amend my tax return U. Can i amend my tax return S. Can i amend my tax return real property holding corporations. Can i amend my tax return Partnerships. Can i amend my tax return Trusts and estates. Can i amend my tax return Domestically controlled QIE. Can i amend my tax return Late filing of certifications or notices. Can i amend my tax return Certifications. Can i amend my tax return Liability of agent or qualified substitute. Can i amend my tax return Reporting and Paying the Tax Withholding Certificates Tax Treaty TablesTable 1 Table 2 Table 3 How To Get Tax HelpLow Income Taxpayer Clinics (LITCs). Can i amend my tax return Withholding of Tax In most cases, a foreign person is subject to U. Can i amend my tax return S. Can i amend my tax return tax on its U. Can i amend my tax return S. Can i amend my tax return source income. Can i amend my tax return Most types of U. Can i amend my tax return S. Can i amend my tax return source income received by a foreign person are subject to U. Can i amend my tax return S. Can i amend my tax return tax of 30%. Can i amend my tax return A reduced rate, including exemption, may apply if there is a tax treaty between the foreign person's country of residence and the United States. Can i amend my tax return The tax is generally withheld (NRA withholding) from the payment made to the foreign person. Can i amend my tax return The term “NRA withholding” is used in this publication descriptively to refer to withholding required under sections 1441, 1442, and 1443 of the Internal Revenue Code. Can i amend my tax return In most cases, NRA withholding describes the withholding regime that requires withholding on a payment of U. Can i amend my tax return S. Can i amend my tax return source income. Can i amend my tax return Payments to foreign persons, including nonresident alien individuals, foreign entities, and governments, may be subject to NRA withholding. Can i amend my tax return NRA withholding does not include withholding under section 1445 of the Code (see U. Can i amend my tax return S. Can i amend my tax return Real Property Interest, later) or under section 1446 of the Code (see Partnership Withholding on Effectively Connected Income , later). Can i amend my tax return A withholding agent (defined next) is the person responsible for withholding on payments made to a foreign person. Can i amend my tax return However, a withholding agent that can reliably associate the payment with documentation (discussed later) from a U. Can i amend my tax return S. Can i amend my tax return person is not required to withhold. Can i amend my tax return In addition, a withholding agent may apply a reduced rate of withholding (including an exemption from withholding) if it can reliably associate the payment with documentation from a beneficial owner that is a foreign person entitled to a reduced rate of withholding. Can i amend my tax return Withholding Agent You are a withholding agent if you are a U. Can i amend my tax return S. Can i amend my tax return or foreign person that has control, receipt, custody, disposal, or payment of any item of income of a foreign person that is subject to withholding. Can i amend my tax return A withholding agent may be an individual, corporation, partnership, trust, association, nominee (under section 1446 of the Code), or any other entity, including any foreign intermediary, foreign partnership, or U. Can i amend my tax return S. Can i amend my tax return branch of certain foreign banks and insurance companies. Can i amend my tax return You may be a withholding agent even if there is no requirement to withhold from a payment or even if another person has withheld the required amount from the payment. Can i amend my tax return Although several persons may be withholding agents for a single payment, the full tax is required to be withheld only once. Can i amend my tax return In most cases, the U. Can i amend my tax return S. Can i amend my tax return person who pays an amount subject to NRA withholding is the person responsible for withholding. Can i amend my tax return However, other persons may be required to withhold. Can i amend my tax return For example, a payment made by a flow-through entity or nonqualified intermediary that knows, or has reason to know, that the full amount of NRA withholding was not done by the person from which it receives a payment is required to do the appropriate withholding since it also falls within the definition of a withholding agent. Can i amend my tax return In addition, withholding must be done by any qualified intermediary, withholding foreign partnership, or withholding foreign trust in accordance with the terms of its withholding agreement, discussed later. Can i amend my tax return Liability for tax. Can i amend my tax return   As a withholding agent, you are personally liable for any tax required to be withheld. Can i amend my tax return This liability is independent of the tax liability of the foreign person to whom the payment is made. Can i amend my tax return If you fail to withhold and the foreign payee fails to satisfy its U. Can i amend my tax return S. Can i amend my tax return tax liability, then both you and the foreign person are liable for tax, as well as interest and any applicable penalties. Can i amend my tax return   The applicable tax will be collected only once. Can i amend my tax return If the foreign person satisfies its U. Can i amend my tax return S. Can i amend my tax return tax liability, you are not liable for the tax but remain liable for any interest and penalties for failure to withhold. Can i amend my tax return Determination of amount to withhold. Can i amend my tax return   You must withhold on the gross amount subject to NRA withholding. Can i amend my tax return You cannot reduce the gross amount by any deductions. Can i amend my tax return However, see Scholarships and Fellowship Grants and Pay for Personal Services Performed , later, for when a deduction for a personal exemption may be allowed. Can i amend my tax return   If the determination of the source of the income or the amount subject to tax depends on facts that are not known at the time of payment, you must withhold an amount sufficient to ensure that at least 30% of the amount subsequently determined to be subject to withholding is withheld. Can i amend my tax return In no case, however, should you withhold more than 30% of the total amount paid. Can i amend my tax return Or, you may make a reasonable estimate of the amount from U. Can i amend my tax return S. Can i amend my tax return sources and put a corresponding part of the amount due in escrow until the amount from U. Can i amend my tax return S. Can i amend my tax return sources can be determined, at which time withholding becomes due. Can i amend my tax return When to withhold. Can i amend my tax return   Withholding is required at the time you make a payment of an amount subject to withholding. Can i amend my tax return A payment is made to a person if that person realizes income, whether or not there is an actual transfer of cash or other property. Can i amend my tax return A payment is considered made to a person if it is paid for that person's benefit. Can i amend my tax return For example, a payment made to a creditor of a person in satisfaction of that person's debt to the creditor is considered made to the person. Can i amend my tax return A payment also is considered made to a person if it is made to that person's agent. Can i amend my tax return   A U. Can i amend my tax return S. Can i amend my tax return partnership should withhold when any distributions that include amounts subject to withholding are made. Can i amend my tax return However, if a foreign partner's distributive share of income subject to withholding is not actually distributed, the U. Can i amend my tax return S. Can i amend my tax return partnership must withhold on the foreign partner's distributive share of the income on the earlier of the date that a Schedule K-1 (Form 1065) is provided or mailed to the partner or the due date for furnishing that schedule. Can i amend my tax return If the distributable amount consists of effectively connected income, see Partnership Withholding on Effectively Connected Income , later. Can i amend my tax return A U. Can i amend my tax return S. Can i amend my tax return trust is required to withhold on the amount includible in the gross income of a foreign beneficiary to the extent the trust's distributable net income consists of an amount subject to withholding. Can i amend my tax return To the extent a U. Can i amend my tax return S. Can i amend my tax return trust is required to distribute an amount subject to withholding but does not actually distribute the amount, it must withhold on the foreign beneficiary's allocable share at the time the income is required to be reported on Form 1042-S. Can i amend my tax return Withholding and Reporting Obligations You are required to report payments subject to NRA withholding on Form 1042-S and to file a tax return on Form 1042. Can i amend my tax return (See Returns Required , later. Can i amend my tax return ) An exception from reporting may apply to individuals who are not required to withhold from a payment and who do not make the payment in the course of their trade or business. Can i amend my tax return Form 1099 reporting and backup withholding. Can i amend my tax return    You also may be responsible as a payer for reporting on Form 1099 payments made to a U. Can i amend my tax return S. Can i amend my tax return person. Can i amend my tax return You must withhold 28% (backup withholding rate) from a reportable payment made to a U. Can i amend my tax return S. Can i amend my tax return person that is subject to Form 1099 reporting if any of the following apply. Can i amend my tax return The U. Can i amend my tax return S. Can i amend my tax return person has not provided its taxpayer identification number (TIN) in the manner required. Can i amend my tax return The IRS notifies you that the TIN furnished by the payee is incorrect. Can i amend my tax return There has been a notified payee underreporting. Can i amend my tax return There has been a payee certification failure. Can i amend my tax return In most cases, a TIN must be provided by a U. Can i amend my tax return S. Can i amend my tax return non-exempt recipient on Form W-9, Request for Taxpayer Identification Number and Certification. Can i amend my tax return A payer files a tax return on Form 945, Annual Return of Withheld Federal Income Tax, for backup withholding. Can i amend my tax return You may be required to file Form 1099 and, if appropriate, backup withhold, even if you do not make the payments directly to that U. Can i amend my tax return S. Can i amend my tax return person. Can i amend my tax return For example, you are required to report income paid to a foreign intermediary or flow-through entity that collects for a U. Can i amend my tax return S. Can i amend my tax return person subject to Form 1099 reporting. Can i amend my tax return See Identifying the Payee , later, for more information. Can i amend my tax return Also see Section S. Can i amend my tax return Special Rules for Reporting Payments Made Through Foreign Intermediaries and Foreign Flow-Through Entities on Form 1099 in the General Instructions for Certain Information Returns. Can i amend my tax return Foreign persons who provide Form W-8BEN, Form W-8ECI, or Form W-8EXP (or applicable documentary evidence) are exempt from backup withholding and Form 1099 reporting. Can i amend my tax return Wages paid to employees. Can i amend my tax return   If you are the employer of a nonresident alien, you generally must withhold taxes at graduated rates. Can i amend my tax return See Pay for Personal Services Performed , later. Can i amend my tax return Effectively connected income by partnerships. Can i amend my tax return   A withholding agent that is a partnership (whether U. Can i amend my tax return S. Can i amend my tax return or foreign) is also responsible for withholding on its income effectively connected with a U. Can i amend my tax return S. Can i amend my tax return trade or business that is allocable to foreign partners. Can i amend my tax return See Partnership Withholding on Effectively Connected Income , later, for more information. Can i amend my tax return U. Can i amend my tax return S. Can i amend my tax return real property interest. Can i amend my tax return   A withholding agent also may be responsible for withholding if a foreign person transfers a U. Can i amend my tax return S. Can i amend my tax return real property interest to the agent, or if it is a corporation, partnership, trust, or estate that distributes a U. Can i amend my tax return S. Can i amend my tax return real property interest to a shareholder, partner, or beneficiary that is a foreign person. Can i amend my tax return See U. Can i amend my tax return S. Can i amend my tax return Real Property Interest , later. Can i amend my tax return Persons Subject to NRA Withholding NRA withholding applies only to payments made to a payee that is a foreign person. Can i amend my tax return It does not apply to payments made to U. Can i amend my tax return S. Can i amend my tax return persons. Can i amend my tax return Usually, you determine the payee's status as a U. Can i amend my tax return S. Can i amend my tax return or foreign person based on the documentation that person provides. Can i amend my tax return See Documentation , later. Can i amend my tax return However, if you have received no documentation or you cannot reliably associate all or a part of a payment with documentation, then you must apply certain presumption rules, discussed later. Can i amend my tax return Identifying the Payee In most cases, the payee is the person to whom you make the payment, regardless of whether that person is the beneficial owner of the income. Can i amend my tax return However, there are situations in which the payee is a person other than the one to whom you actually make a payment. Can i amend my tax return U. Can i amend my tax return S. Can i amend my tax return agent of foreign person. Can i amend my tax return   If you make a payment to a U. Can i amend my tax return S. Can i amend my tax return person and you have actual knowledge that the U. Can i amend my tax return S. Can i amend my tax return person is receiving the payment as an agent of a foreign person, you must treat the payment as made to the foreign person. Can i amend my tax return However, if the U. Can i amend my tax return S. Can i amend my tax return person is a financial institution, you may treat the institution as the payee provided you have no reason to believe that the institution will not comply with its own obligation to withhold. Can i amend my tax return   If the payment is not subject to NRA withholding (for example, gross proceeds from the sales of securities), you must treat the payment as made to a U. Can i amend my tax return S. Can i amend my tax return person and not as a payment to a foreign person. Can i amend my tax return You may be required to report the payment on Form 1099 and, if applicable, backup withhold. Can i amend my tax return Disregarded entities. Can i amend my tax return   A business entity that is not a corporation and that has a single owner may be disregarded as an entity separate from its owner (a disregarded entity) for federal tax purposes. Can i amend my tax return The payee of a payment made to a disregarded entity is the owner of the entity. Can i amend my tax return   If the owner of the entity is a foreign person, you must apply NRA withholding unless you can treat the foreign owner as a beneficial owner entitled to a reduced rate of withholding. Can i amend my tax return   If the owner is a U. Can i amend my tax return S. Can i amend my tax return person, you do not apply NRA withholding. Can i amend my tax return However, you may be required to report the payment on Form 1099 and, if applicable, backup withhold. Can i amend my tax return You may assume that a foreign entity is not a disregarded entity unless you can reliably associate the payment with documentation provided by the owner or you have actual knowledge or reason to know that the foreign entity is a disregarded entity. Can i amend my tax return Flow-Through Entities The payees of payments (other than income effectively connected with a U. Can i amend my tax return S. Can i amend my tax return trade or business) made to a foreign flow-through entity are the owners or beneficiaries of the flow-through entity. Can i amend my tax return This rule applies for purposes of NRA withholding and for Form 1099 reporting and backup withholding. Can i amend my tax return Income that is, or is deemed to be, effectively connected with the conduct of a U. Can i amend my tax return S. Can i amend my tax return trade or business of a flow-through entity is treated as paid to the entity. Can i amend my tax return All of the following are flow-through entities. Can i amend my tax return A foreign partnership (other than a withholding foreign partnership). Can i amend my tax return A foreign simple or foreign grantor trust (other than a withholding foreign trust). Can i amend my tax return A fiscally transparent entity receiving income for which treaty benefits are claimed. Can i amend my tax return See Fiscally transparent entity , later. Can i amend my tax return In most cases, you treat a payee as a flow-through entity if it provides you with a Form W-8IMY (see Documentation , later) on which it claims such status. Can i amend my tax return You also may be required to treat the entity as a flow-through entity under the presumption rules, discussed later. Can i amend my tax return You must determine whether the owners or beneficiaries of a flow-through entity are U. Can i amend my tax return S. Can i amend my tax return or foreign persons, how much of the payment relates to each owner or beneficiary, and, if the owner or beneficiary is foreign, whether a reduced rate of NRA withholding applies. Can i amend my tax return You make these determinations based on the documentation and other information (contained in a withholding statement) that is associated with the flow-through entity's Form W-8IMY. Can i amend my tax return If you do not have all of the information that is required to reliably associate a payment with a specific payee, you must apply the presumption rules. Can i amend my tax return See Documentation and Presumption Rules , later. Can i amend my tax return Withholding foreign partnerships and withholding foreign trusts are not flow-through entities. Can i amend my tax return Foreign partnerships. Can i amend my tax return    A foreign partnership is any partnership that is not organized under the laws of any state of the United States or the District of Columbia or any partnership that is treated as foreign under the income tax regulations. Can i amend my tax return If a foreign partnership is not a withholding foreign partnership, the payees of income are the partners of the partnership, provided the partners are not themselves a flow-through entity or a foreign intermediary. Can i amend my tax return However, the payee is the partnership itself if the partnership is claiming treaty benefits on the basis that it is not fiscally transparent and that it meets all the other requirements for claiming treaty benefits. Can i amend my tax return If a partner is a foreign flow-through entity or a foreign intermediary, you apply the payee determination rules to that partner to determine the payees. Can i amend my tax return Example 1. Can i amend my tax return A nonwithholding foreign partnership has three partners: a nonresident alien individual; a foreign corporation; and a U. Can i amend my tax return S. Can i amend my tax return citizen. Can i amend my tax return You make a payment of U. Can i amend my tax return S. Can i amend my tax return source interest to the partnership. Can i amend my tax return It gives you a Form W-8IMY with which it associates Form W-8BEN from the nonresident alien; Form W-8BEN from the foreign corporation; and Form W-9 from the U. Can i amend my tax return S. Can i amend my tax return citizen. Can i amend my tax return The partnership also gives you a complete withholding statement that enables you to associate a part of the interest payment to each partner. Can i amend my tax return You must treat all three partners as the payees of the interest payment as if the payment were made directly to them. Can i amend my tax return Report the payment to the nonresident alien and the foreign corporation on Forms 1042-S. Can i amend my tax return Report the payment to the U. Can i amend my tax return S. Can i amend my tax return citizen on Form 1099-INT. Can i amend my tax return Example 2. Can i amend my tax return A nonwithholding foreign partnership has two partners: a foreign corporation and a nonwithholding foreign partnership. Can i amend my tax return The second partnership has two partners, both nonresident alien individuals. Can i amend my tax return You make a payment of U. Can i amend my tax return S. Can i amend my tax return source interest to the first partnership. Can i amend my tax return It gives you a valid Form W-8IMY with which it associates a Form W-8BEN from the foreign corporation and a Form W-8IMY from the second partnership. Can i amend my tax return In addition, Forms W-8BEN from the partners are associated with the Form W-8IMY from the second partnership. Can i amend my tax return The Forms W-8IMY from the partnerships have complete withholding statements associated with them. Can i amend my tax return Because you can reliably associate a part of the interest payment with the Form W-8BEN provided by the foreign corporation and the Forms W-8BEN provided by the nonresident alien individual partners as a result of the withholding statements, you must treat them as the payees of the interest. Can i amend my tax return Example 3. Can i amend my tax return You make a payment of U. Can i amend my tax return S. Can i amend my tax return source dividends to a withholding foreign partnership. Can i amend my tax return The partnership has two partners, both foreign corporations. Can i amend my tax return You can reliably associate the payment with a valid Form W-8IMY from the partnership on which it represents that it is a withholding foreign partnership. Can i amend my tax return You must treat the partnership as the payee of the dividends. Can i amend my tax return Foreign simple and grantor trust. Can i amend my tax return   A trust is foreign unless it meets both of the following tests. Can i amend my tax return A court within the United States is able to exercise primary supervision over the administration of the trust. Can i amend my tax return One or more U. Can i amend my tax return S. Can i amend my tax return persons have the authority to control all substantial decisions of the trust. Can i amend my tax return   In most cases, a foreign simple trust is a foreign trust that is required to distribute all of its income annually. Can i amend my tax return A foreign grantor trust is a foreign trust that is treated as a grantor trust under sections 671 through 679 of the Code. Can i amend my tax return   The payees of a payment made to a foreign simple trust are the beneficiaries of the trust. Can i amend my tax return The payees of a payment made to a foreign grantor trust are the owners of the trust. Can i amend my tax return However, the payee is the foreign simple or grantor trust itself if the trust is claiming treaty benefits on the basis that it is not fiscally transparent and that it meets all the other requirements for claiming treaty benefits. Can i amend my tax return If the beneficiaries or owners are themselves flow-through entities or foreign intermediaries, you apply the payee determination rules to that beneficiary or owner to determine the payees. Can i amend my tax return Example. Can i amend my tax return A foreign simple trust has three beneficiaries: two nonresident alien individuals and a U. Can i amend my tax return S. Can i amend my tax return citizen. Can i amend my tax return You make a payment of interest to the foreign trust. Can i amend my tax return It gives you a Form W-8IMY with which it associates Forms W-8BEN from the nonresident aliens and a Form W-9 from the U. Can i amend my tax return S. Can i amend my tax return citizen. Can i amend my tax return The trust also gives you a complete withholding statement that enables you to associate a part of the interest payment with the forms provided by each beneficiary. Can i amend my tax return You must treat all three beneficiaries as the payees of the interest payment as if the payment were made directly to them. Can i amend my tax return Report the payment to the nonresident aliens on Forms 1042-S. Can i amend my tax return Report the payment to the U. Can i amend my tax return S. Can i amend my tax return citizen on Form 1099-INT. Can i amend my tax return Fiscally transparent entity. Can i amend my tax return   If a reduced rate of withholding under an income tax treaty is claimed, a flow-through entity includes any entity in which the interest holder must treat the entity as fiscally transparent. Can i amend my tax return The determination of whether an entity is fiscally transparent is made on an item of income basis (that is, the determination is made separately for interest, dividends, royalties, etc. Can i amend my tax return ). Can i amend my tax return The interest holder in an entity makes the determination by applying the laws of the jurisdiction where the interest holder is organized, incorporated, or otherwise considered a resident. Can i amend my tax return An entity is considered to be fiscally transparent for the income to the extent the laws of that jurisdiction require the interest holder to separately take into account on a current basis the interest holder's share of the income, whether or not distributed to the interest holder, and the character and source of the income to the interest holder are determined as if the income was realized directly from the source that paid it to the entity. Can i amend my tax return Subject to the standards of knowledge rules discussed later, you generally make the determination that an entity is fiscally transparent based on a Form W-8IMY provided by the entity. Can i amend my tax return   The payees of a payment made to a fiscally transparent entity are the interest holders of the entity. Can i amend my tax return Example. Can i amend my tax return Entity A is a business organization organized under the laws of country X that has an income tax treaty in force with the United States. Can i amend my tax return A has two interest holders, B and C. Can i amend my tax return B is a corporation organized under the laws of country Y. Can i amend my tax return C is a corporation organized under the laws of country Z. Can i amend my tax return Both countries Y and Z have an income tax treaty in force with the United States. Can i amend my tax return A receives royalty income from U. Can i amend my tax return S. Can i amend my tax return sources that is not effectively connected with the conduct of a trade or business in the United States. Can i amend my tax return For U. Can i amend my tax return S. Can i amend my tax return income tax purposes, A is treated as a partnership. Can i amend my tax return Country X treats A as a partnership and requires the interest holders in A to separately take into account on a current basis their respective shares of the income paid to A even if the income is not distributed. Can i amend my tax return The laws of country X provide that the character and source of the income to A's interest holders are determined as if the income was realized directly from the source that paid it to A. Can i amend my tax return Accordingly, A is fiscally transparent in its jurisdiction, country X. Can i amend my tax return B and C are not fiscally transparent under the laws of their respective countries of incorporation. Can i amend my tax return Country Y requires B to separately take into account on a current basis B's share of the income paid to A, and the character and source of the income to B is determined as if the income was realized directly from the source that paid it to A. Can i amend my tax return Accordingly, A is fiscally transparent for that income under the laws of country Y, and B is treated as deriving its share of the U. Can i amend my tax return S. Can i amend my tax return source royalty income for purposes of the U. Can i amend my tax return S. Can i amend my tax return -Y income tax treaty. Can i amend my tax return Country Z, on the other hand, treats A as a corporation and does not require C to take into account its share of A's income on a current basis whether or not distributed. Can i amend my tax return Therefore, A is not treated as fiscally transparent under the laws of country Z. Can i amend my tax return Accordingly, C is not treated as deriving its share of the U. Can i amend my tax return S. Can i amend my tax return source royalty income for purposes of the U. Can i amend my tax return S. Can i amend my tax return -Z income tax treaty. Can i amend my tax return Foreign Intermediaries In most cases, if you make payments to a foreign intermediary, the payees are the persons for whom the foreign intermediary collects the payment, such as account holders or customers, not the intermediary itself. Can i amend my tax return This rule applies for purposes of NRA withholding and for Form 1099 reporting and backup withholding. Can i amend my tax return You may, however, treat a qualified intermediary that has assumed primary withholding responsibility for a payment as the payee, and you are not required to withhold. Can i amend my tax return An intermediary is a custodian, broker, nominee, or any other person that acts as an agent for another person. Can i amend my tax return A foreign intermediary is either a qualified intermediary or a nonqualified intermediary. Can i amend my tax return In most cases, you determine whether an entity is a qualified intermediary or a nonqualified intermediary based on the representations the intermediary makes on Form W-8IMY. Can i amend my tax return You must determine whether the customers or account holders of a foreign intermediary are U. Can i amend my tax return S. Can i amend my tax return or foreign persons and, if the account holder or customer is foreign, whether a reduced rate of NRA withholding applies. Can i amend my tax return You make these determinations based on the foreign intermediary's Form W-8IMY and associated information and documentation. Can i amend my tax return If you do not have all of the information or documentation that is required to reliably associate a payment with a payee, you must apply the presumption rules. Can i amend my tax return See Documentation and Presumption Rules , later. Can i amend my tax return Nonqualified intermediary. Can i amend my tax return   A nonqualified intermediary (NQI) is any intermediary that is a foreign person and that is not a qualified intermediary. Can i amend my tax return The payees of a payment made to an NQI are the customers or account holders on whose behalf the NQI is acting. Can i amend my tax return Example. Can i amend my tax return You make a payment of interest to a foreign bank that is a nonqualified intermediary. Can i amend my tax return The bank gives you a Form W-8IMY and the Forms W-8BEN of two foreign persons, and a Form W-9 from a U. Can i amend my tax return S. Can i amend my tax return person for whom the bank is collecting the payments. Can i amend my tax return The bank also associates with its Form W-8IMY a withholding statement on which it allocates the interest payment to each account holder and provides all other information required to be on the withholding statement. Can i amend my tax return The account holders are the payees of the interest payment. Can i amend my tax return You should report the part of the interest paid to the two foreign persons on Forms 1042-S and the part paid to the U. Can i amend my tax return S. Can i amend my tax return person on Form 1099-INT. Can i amend my tax return Qualified intermediary. Can i amend my tax return   A qualified intermediary (QI) is any foreign intermediary (or foreign branch of a U. Can i amend my tax return S. Can i amend my tax return intermediary) that has entered into a qualified intermediary withholding agreement (discussed later) with the IRS. Can i amend my tax return You may treat a QI as a payee to the extent the QI assumes primary withholding responsibility or primary Form 1099 reporting and backup withholding responsibility for a payment. Can i amend my tax return In this situation, the QI is required to withhold the tax. Can i amend my tax return You can determine whether a QI has assumed responsibility from the Form W-8IMY provided by the QI. Can i amend my tax return   A payment to a QI to the extent it does not assume primary NRA withholding responsibility is considered made to the person on whose behalf the QI acts. Can i amend my tax return If a QI does not assume Form 1099 reporting and backup withholding responsibility, you must report on Form 1099 and, if applicable, backup withhold as if you were making the payment directly to the U. Can i amend my tax return S. Can i amend my tax return person. Can i amend my tax return Branches of financial institutions. Can i amend my tax return   Branches of financial institutions are not permitted to operate as QIs if they are located outside of countries having approved “know-your-customer” (KYC) rules. Can i amend my tax return The countries with approved KYC rules are listed on IRS. Can i amend my tax return gov. Can i amend my tax return QI withholding agreement. Can i amend my tax return   Foreign financial institutions and foreign branches of U. Can i amend my tax return S. Can i amend my tax return financial institutions can enter into an agreement with the IRS to be a qualified intermediary. Can i amend my tax return   A QI is entitled to certain simplified withholding and reporting rules. Can i amend my tax return In general, there are three major areas whereby intermediaries with QI status are afforded such simplified treatment. Can i amend my tax return   To apply for QI status, complete Form 14345, Qualified Intermediary Application, and Form SS-4, Application for Employer Identification Number. Can i amend my tax return These forms, and the procedures required to obtain a QI withholding agreement are available at www. Can i amend my tax return irs. Can i amend my tax return gov/Businesses/Corporations/Qualified-Intermediaries-(QI). Can i amend my tax return Documentation. Can i amend my tax return   A QI is not required to forward documentation obtained from foreign account holders to the U. Can i amend my tax return S. Can i amend my tax return withholding agent from whom the QI receives a payment of U. Can i amend my tax return S. Can i amend my tax return source income. Can i amend my tax return The QI maintains such documentation at its location and provides the U. Can i amend my tax return S. Can i amend my tax return withholding agent with withholding rate pools. Can i amend my tax return A withholding rate pool is a payment of a single type of income that is subject to a single rate of withholding. Can i amend my tax return   A QI is required to provide the U. Can i amend my tax return S. Can i amend my tax return withholding agent with information regarding U. Can i amend my tax return S. Can i amend my tax return persons subject to Form 1099 information reporting unless the QI assumes the primary obligation to do Form 1099 reporting and backup withholding. Can i amend my tax return   If a QI obtains documentary evidence under the “know-your-customer” rules that apply to the QI under local law, and the documentary evidence is of a type specified in an attachment to the QI agreement, the documentary evidence remains valid until there is a change in circumstances or the QI knows the information is incorrect. Can i amend my tax return This indefinite validity period rule does not apply to Forms W-8 or to documentary evidence that is not of the type specified in the attachment to the agreement. Can i amend my tax return Form 1042-S reporting. Can i amend my tax return   A QI is permitted to report payments made to its direct foreign account holders on a pooled basis rather than reporting payments to each direct account holder specifically. Can i amend my tax return Pooled basis reporting is not available for payments to certain account holders, such as a nonqualified intermediary or a flow-through entity (discussed earlier). Can i amend my tax return Collective refund procedures. Can i amend my tax return   A QI may seek a refund on behalf of its direct account holders. Can i amend my tax return The direct account holders, therefore, are not required to file returns with the IRS to obtain refunds, but rather may obtain them from the QI. Can i amend my tax return U. Can i amend my tax return S. Can i amend my tax return branches of foreign banks and foreign insurance companies. Can i amend my tax return   Special rules apply to a U. Can i amend my tax return S. Can i amend my tax return branch of a foreign bank subject to Federal Reserve Board supervision or a foreign insurance company subject to state regulatory supervision. Can i amend my tax return If you agree to treat the branch as a U. Can i amend my tax return S. Can i amend my tax return person, you may treat the branch as a U. Can i amend my tax return S. Can i amend my tax return payee for a payment subject to NRA withholding provided you receive a Form W-8IMY from the U. Can i amend my tax return S. Can i amend my tax return branch on which the agreement is evidenced. Can i amend my tax return If you treat the branch as a U. Can i amend my tax return S. Can i amend my tax return payee, you are not required to withhold. Can i amend my tax return Even though you agree to treat the branch as a U. Can i amend my tax return S. Can i amend my tax return person, you must report the payment on Form 1042-S. Can i amend my tax return   A financial institution organized in a U. Can i amend my tax return S. Can i amend my tax return possession is treated as a U. Can i amend my tax return S. Can i amend my tax return branch. Can i amend my tax return The special rules discussed in this section apply to a possessions financial institution. Can i amend my tax return   If you are paying a U. Can i amend my tax return S. Can i amend my tax return branch an amount that is not subject to NRA withholding, treat the payment as made to a foreign person, irrespective of any agreement to treat the branch as a U. Can i amend my tax return S. Can i amend my tax return person for amounts subject to NRA withholding. Can i amend my tax return Consequently, amounts not subject to NRA withholding that are paid to a U. Can i amend my tax return S. Can i amend my tax return branch are not subject to Form 1099 reporting or backup withholding. Can i amend my tax return   Alternatively, a U. Can i amend my tax return S. Can i amend my tax return branch may provide you with a Form W-8IMY with which it associates the documentation of the persons on whose behalf it acts. Can i amend my tax return In this situation, the payees are the persons on whose behalf the branch acts provided you can reliably associate the payment with valid documentation from those persons. Can i amend my tax return See Nonqualified Intermediaries under  Documentation, later. Can i amend my tax return   If the U. Can i amend my tax return S. Can i amend my tax return branch does not provide you with a Form W-8IMY, then you should treat a payment subject to NRA withholding as made to the foreign person of which the branch is a part and the income as effectively connected with the conduct of a trade or business in the United States. Can i amend my tax return Withholding foreign partnership and foreign trust. Can i amend my tax return   A withholding foreign partnership (WP) is any foreign partnership that has entered into a WP withholding agreement with the IRS and is acting in that capacity. Can i amend my tax return A withholding foreign trust (WT) is a foreign simple or grantor trust that has entered into a WT withholding agreement with the IRS and is acting in that capacity. Can i amend my tax return   A WP or WT may act in that capacity only for payments of amounts subject to NRA withholding that are distributed to, or included in the distributive share of, its direct partners, beneficiaries, or owners. Can i amend my tax return A WP or WT acting in that capacity must assume NRA withholding responsibility for these amounts. Can i amend my tax return You may treat a WP or WT as a payee if it has provided you with documentation (discussed later) that represents that it is acting as a WP or WT for such amounts. Can i amend my tax return WP and WT withholding agreements. Can i amend my tax return   The WP and WT withholding agreements and the application procedures for the agreements are in Revenue Procedure 2003-64. Can i amend my tax return Also see the following items. Can i amend my tax return Revenue Procedure 2004-21. Can i amend my tax return Revenue Procedure 2005-77. Can i amend my tax return Employer identification number (EIN). Can i amend my tax return   A completed Form SS-4 must be submitted with the application for being a WP or WT. Can i amend my tax return The WP or WT will be assigned a WP-EIN or WT-EIN to be used only when acting in that capacity. Can i amend my tax return Documentation. Can i amend my tax return   A WP or WT must provide you with a Form W-8IMY that certifies that the WP or WT is acting in that capacity and a written statement identifying the amounts for which it is so acting. Can i amend my tax return The statement is not required to contain withholding rate pool information or any information relating to the identity of a direct partner, beneficiary, or owner. Can i amend my tax return The Form W-8IMY must contain the WP-EIN or WT-EIN. Can i amend my tax return Foreign Persons A payee is subject to NRA withholding only if it is a foreign person. Can i amend my tax return A foreign person includes a nonresident alien individual, foreign corporation, foreign partnership, foreign trust, foreign estate, and any other person that is not a U. Can i amend my tax return S. Can i amend my tax return person. Can i amend my tax return It also includes a foreign branch of a U. Can i amend my tax return S. Can i amend my tax return financial institution if the foreign branch is a qualified intermediary. Can i amend my tax return In most cases, the U. Can i amend my tax return S. Can i amend my tax return branch of a foreign corporation or partnership is treated as a foreign person. Can i amend my tax return Nonresident alien. Can i amend my tax return   A nonresident alien is an individual who is not a U. Can i amend my tax return S. Can i amend my tax return citizen or a resident alien. Can i amend my tax return A resident of a foreign country under the residence article of an income tax treaty is a nonresident alien individual for purposes of withholding. Can i amend my tax return Married to U. Can i amend my tax return S. Can i amend my tax return citizen or resident alien. Can i amend my tax return   Nonresident alien individuals married to U. Can i amend my tax return S. Can i amend my tax return citizens or resident aliens may choose to be treated as resident aliens for certain income tax purposes. Can i amend my tax return However, these individuals are still subject to the NRA withholding rules that apply to nonresident aliens for all income except wages. Can i amend my tax return Wages paid to these individuals are subject to graduated withholding. Can i amend my tax return See Wages Paid to Employees—Graduated Withholding . Can i amend my tax return Resident alien. Can i amend my tax return   A resident alien is an individual who is not a citizen or national of the United States and who meets either the green card test or the substantial presence test for the calendar year. Can i amend my tax return Green card test. Can i amend my tax return An alien is a resident alien if the individual was a lawful permanent resident of the United States at any time during the calendar year. Can i amend my tax return This is known as the green card test because these aliens hold immigrant visas (also known as green cards). Can i amend my tax return Substantial presence test. Can i amend my tax return An alien is considered a resident alien if the individual meets the substantial presence test for the calendar year. Can i amend my tax return Under this test, the individual must be physically present in the United States on at least: 31 days during the current calendar year, and 183 days during the current year and the 2 preceding years, counting all the days of physical presence in the current year, but only 1/3 the number of days of presence in the first preceding year, and only 1/6 the number of days in the second preceding year. Can i amend my tax return   In most cases, the days the alien is in the United States as a teacher, student, or trainee on an “F,” “J,” “M,” or “Q” visa are not counted. Can i amend my tax return This exception is for a limited period of time. Can i amend my tax return   For more information on resident and nonresident status, the tests for residence, and the exceptions to them, see Publication 519. Can i amend my tax return Note. Can i amend my tax return   If your employee is late in notifying you that his or her status changed from nonresident alien to resident alien, you may have to make an adjustment to Form 941 if that employee was exempt from withholding of social security and Medicare taxes as a nonresident alien. Can i amend my tax return For more information on making adjustments, see chapter 13 of Publication 15 (Circular E). Can i amend my tax return Resident of a U. Can i amend my tax return S. Can i amend my tax return possession. Can i amend my tax return   A bona fide resident of Puerto Rico, the U. Can i amend my tax return S. Can i amend my tax return Virgin Islands, Guam, the Commonwealth of the Northern Mariana Islands (CNMI), or American Samoa who is not a U. Can i amend my tax return S. Can i amend my tax return citizen or a U. Can i amend my tax return S. Can i amend my tax return national is treated as a nonresident alien for the withholding rules explained here. Can i amend my tax return A bona fide resident of a possession is someone who: Meets the presence test, Does not have a tax home outside the possession, and Does not have a closer connection to the United States or to a foreign country than to the possession. Can i amend my tax return   For more information, see Publication 570, Tax Guide for Individuals With Income From U. Can i amend my tax return S. Can i amend my tax return Possessions. Can i amend my tax return Foreign corporations. Can i amend my tax return   A foreign corporation is one that does not fit the definition of a domestic corporation. Can i amend my tax return A domestic corporation is one that was created or organized in the United States or under the laws of the United States, any of its states, or the District of Columbia. Can i amend my tax return Guam or Northern Mariana Islands corporations. Can i amend my tax return   A corporation created or organized in, or under the laws of, Guam or the CNMI is not considered a foreign corporation for the purpose of withholding tax for the tax year if: At all times during the tax year less than 25% in value of the corporation's stock is owned, directly or indirectly, by foreign persons; and At least 20% of the corporation's gross income is derived from sources within Guam or the CNMI for the 3-year period ending with the close of the preceding tax year of the corporation (or the period the corporation has been in existence, if less). Can i amend my tax return Note. Can i amend my tax return   The provisions discussed below under U. Can i amend my tax return S. Can i amend my tax return Virgin Islands and American Samoa corporations will apply to Guam or CNMI corporations when an implementing agreement is in effect between the United States and that possession. Can i amend my tax return U. Can i amend my tax return S. Can i amend my tax return Virgin Islands and American Samoa corporations. Can i amend my tax return   A corporation created or organized in, or under the laws of, the U. Can i amend my tax return S. Can i amend my tax return Virgin Islands or American Samoa is not considered a foreign corporation for the purposes of withholding tax for the tax year if: At all times during the tax year less than 25% in value of the corporation's stock is owned, directly or indirectly, by foreign persons, At least 65% of the corporation's gross income is effectively connected with the conduct of a trade or business in the U. Can i amend my tax return S. Can i amend my tax return Virgin Islands, American Samoa, Guam, the CNMI, or the United States for the 3-year period ending with the close of the tax year of the corporation (or the period the corporation or any predecessor has been in existence, if less), and No substantial part of the income of the corporation is used, directly or indirectly, to satisfy obligations to a person who is not a bona fide resident of the U. Can i amend my tax return S. Can i amend my tax return Virgin Islands, American Samoa, Guam, the CNMI, or the United States. Can i amend my tax return Foreign private foundations. Can i amend my tax return   A private foundation that was created or organized under the laws of a foreign country is a foreign private foundation. Can i amend my tax return Gross investment income from sources within the United States paid to a qualified foreign private foundation is subject to NRA withholding at a 4% rate (unless exempted by a treaty) rather than the ordinary statutory 30% rate. Can i amend my tax return Other foreign organizations, associations, and charitable institutions. Can i amend my tax return   An organization may be exempt from income tax under section 501(a) of the Internal Revenue Code even if it was formed under foreign law. Can i amend my tax return In most cases, you do not have to withhold tax on payments of income to these foreign tax-exempt organizations unless the IRS has determined that they are foreign private foundations. Can i amend my tax return   Payments to these organizations, however, must be reported on Form 1042-S, even though no tax is withheld. Can i amend my tax return   You must withhold tax on the unrelated business income (as described in Publication 598, Tax on Unrelated Business Income of Exempt Organizations) of foreign tax-exempt organizations in the same way that you would withhold tax on similar income of nonexempt organizations. Can i amend my tax return U. Can i amend my tax return S. Can i amend my tax return branches of foreign persons. Can i amend my tax return   In most cases, a payment to a U. Can i amend my tax return S. Can i amend my tax return branch of a foreign person is a payment made to the foreign person. Can i amend my tax return However, you may treat payments to U. Can i amend my tax return S. Can i amend my tax return branches of foreign banks and foreign insurance companies (discussed earlier) that are subject to U. Can i amend my tax return S. Can i amend my tax return regulatory supervision as payments made to a U. Can i amend my tax return S. Can i amend my tax return person, if you and the U. Can i amend my tax return S. Can i amend my tax return branch have agreed to do so, and if their agreement is evidenced by a withholding certificate, Form W-8IMY. Can i amend my tax return For this purpose, a financial institution organized under the laws of a U. Can i amend my tax return S. Can i amend my tax return possession is treated as a U. Can i amend my tax return S. Can i amend my tax return branch. Can i amend my tax return Documentation In most cases, you must withhold 30% from the gross amount paid to a foreign payee unless you can reliably associate the payment with valid documentation that establishes either of the following. Can i amend my tax return The payee is a U. Can i amend my tax return S. Can i amend my tax return person. Can i amend my tax return The payee is a foreign person that is the beneficial owner of the income and is entitled to a reduced rate of withholding. Can i amend my tax return In most cases, you must get the documentation before you make the payment. Can i amend my tax return The documentation is not valid if you know, or have reason to know, that it is unreliable or incorrect. Can i amend my tax return See Standards of Knowledge , later. Can i amend my tax return If you cannot reliably associate a payment with valid documentation, you must use the presumption rules discussed later. Can i amend my tax return For example, if you do not have documentation or you cannot determine the part of a payment that is allocable to specific documentation, you must use the presumption rules. Can i amend my tax return The specific types of documentation are discussed in this section. Can i amend my tax return However, see Withholding on Specific Income , later, as well as the instructions to the particular forms. Can i amend my tax return As the withholding agent, you also may want to see the Instructions for the Requester of Forms W-8BEN, W-8ECI, W-8EXP, and W-8IMY. Can i amend my tax return Section 1446 withholding. Can i amend my tax return   Under section 1446 of the Code, a partnership must withhold tax on its effectively connected income allocable to a foreign partner. Can i amend my tax return In most cases, a partnership determines if a partner is a foreign partner and the partner's tax classification based on the withholding certificate provided by the partner. Can i amend my tax return This is the same documentation that is filed for NRA withholding, but may require additional information as discussed under each of the forms in this section. Can i amend my tax return Joint owners. Can i amend my tax return    If you make a payment to joint owners, you need to get documentation from each owner. Can i amend my tax return Form W-9. Can i amend my tax return   In most cases, you can treat the payee as a U. Can i amend my tax return S. Can i amend my tax return person if the payee gives you a Form W-9. Can i amend my tax return The Form W-9 can be used only by a U. Can i amend my tax return S. Can i amend my tax return person and must contain the payee's taxpayer identification number (TIN). Can i amend my tax return If there is more than one owner, you may treat the total amount as paid to a U. Can i amend my tax return S. Can i amend my tax return person if any one of the owners gives you a Form W-9. Can i amend my tax return See U. Can i amend my tax return S. Can i amend my tax return Taxpayer Identification Numbers , later. Can i amend my tax return U. Can i amend my tax return S. Can i amend my tax return persons are not subject to NRA withholding, but may be subject to Form 1099 reporting and backup withholding. Can i amend my tax return Form W-8. Can i amend my tax return   In most cases, a foreign payee of the income should give you a form in the Form W-8 series. Can i amend my tax return Until further notice, you can rely upon Forms W-8 that contain a P. Can i amend my tax return O. Can i amend my tax return box as a permanent residence address provided you do not know, or have reason to know, that the person providing the form is a U. Can i amend my tax return S. Can i amend my tax return person and that a street address is available. Can i amend my tax return You may rely on Forms W-8 for which there is a U. Can i amend my tax return S. Can i amend my tax return mailing address provided you received the form prior to December 31, 2001. Can i amend my tax return   If certain requirements are met, the foreign person can give you documentary evidence, rather than a Form W-8. Can i amend my tax return You can rely on documentary evidence in lieu of a Form W-8 for a payment made in a U. Can i amend my tax return S. Can i amend my tax return possession. Can i amend my tax return Other documentation. Can i amend my tax return   Other documentation may be required to claim an exemption from, or a reduced rate of, withholding on pay for personal services. Can i amend my tax return The nonresident alien individual may have to give you a Form W-4 or a Form 8233, Exemption From Withholding on Compensation for Independent (and Certain Dependent) Personal Services of a Nonresident Alien Individual. Can i amend my tax return These forms are discussed in Pay for Personal Services Performed under Withholding on Specific Income. Can i amend my tax return Beneficial Owners If all the appropriate requirements have been established on a Form W-8BEN, W-8ECI, W-8EXP or, if applicable, on documentary evidence, you may treat the payee as a foreign beneficial owner. Can i amend my tax return Form W-8BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding. Can i amend my tax return   This form is used by a foreign person to: Establish foreign status; Claim that such person is the beneficial owner of the income for which the form is being furnished or a partner in a partnership subject to section 1446 withholding; and If applicable, claim a reduced rate of, or exemption from, withholding under an income tax treaty. Can i amend my tax return   Form W-8BEN also may be used to claim that the foreign person is exempt from Form 1099 reporting and backup withholding for income that is not subject to NRA withholding. Can i amend my tax return For example, a foreign person may provide a Form W-8BEN to a broker to establish that the gross proceeds from the sale of securities are not subject to Form 1099 reporting or backup withholding. Can i amend my tax return Claiming treaty benefits. Can i amend my tax return   You may apply a reduced rate of withholding to a foreign person that provides a Form W-8BEN claiming a reduced rate of withholding under an income tax treaty only if the person provides a U. Can i amend my tax return S. Can i amend my tax return TIN and certifies that: It is a resident of a treaty country; It is the beneficial owner of the income; If it is an entity, it derives the income within the meaning of section 894 of the Internal Revenue Code (it is not fiscally transparent); and It meets any limitation on benefits provision contained in the treaty, if applicable. Can i amend my tax return   If the foreign beneficial owner claiming a treaty benefit is related to you, the foreign beneficial owner also must certify on Form W-8BEN that it will file Form 8833, Treaty-Based Return Position Disclosure Under Section 6114 or 7701(b), if the amount subject to NRA withholding received during a calendar year exceeds, in the aggregate, $500,000. Can i amend my tax return   An entity derives income for which it is claiming treaty benefits only if the entity is not treated as fiscally transparent for that income. Can i amend my tax return See Fiscally transparent entity discussed earlier under Flow-Through Entities. Can i amend my tax return   Limitations on benefits provisions generally prohibit third country residents from obtaining treaty benefits. Can i amend my tax return For example, a foreign corporation may not be entitled to a reduced rate of withholding unless a minimum percentage of its owners are citizens or residents of the United States or the treaty country. Can i amend my tax return   The exemptions from, or reduced rates of, U. Can i amend my tax return S. Can i amend my tax return tax vary under each treaty. Can i amend my tax return You must check the provisions of the tax treaty that apply. Can i amend my tax return Tables at the end of this publication show the countries with which the United States has income tax treaties and the rates of withholding that apply in cases where all conditions of the particular treaty articles are satisfied. Can i amend my tax return   If you know, or have reason to know, that an owner of income is not eligible for treaty benefits claimed, you must not apply the treaty rate. Can i amend my tax return You are not, however, responsible for misstatements on a Form W-8, documentary evidence, or statements accompanying documentary evidence for which you did not have actual knowledge, or reason to know, that the statements were incorrect. Can i amend my tax return Exceptions to TIN requirement. Can i amend my tax return   A foreign person does not have to provide a TIN to claim a reduced rate of withholding under a treaty if the requirements for the following exceptions are met. Can i amend my tax return Income from marketable securities (discussed next). Can i amend my tax return Unexpected payments to an individual (discussed under U. Can i amend my tax return S. Can i amend my tax return Taxpayer Identification Numbers ). Can i amend my tax return Marketable securities. Can i amend my tax return   A Form W-8BEN provided to claim treaty benefits does not need a U. Can i amend my tax return S. Can i amend my tax return TIN if the foreign beneficial owner is claiming the benefits on income from marketable securities. Can i amend my tax return For this purpose, income from a marketable security consists of the following items. Can i amend my tax return Dividends and interest from stocks and debt obligations that are actively traded. Can i amend my tax return Dividends from any redeemable security issued by an investment company registered under the Investment Company Act of 1940 (mutual fund). Can i amend my tax return Dividends, interest, or royalties from units of beneficial interest in a unit investment trust that are (or were upon issuance) publicly offered and are registered with the SEC under the Securities Act of 1933. Can i amend my tax return Income related to loans of any of the above securities. Can i amend my tax return Offshore accounts. Can i amend my tax return   If a payment is made outside the United States to an offshore account, a payee may give you documentary evidence, rather than Form W-8BEN. Can i amend my tax return   In most cases, a payment is made outside the United States if you complete the acts necessary to effect the payment outside the United States. Can i amend my tax return However, an amount paid by a bank or other financial institution on a deposit or account usually will be treated as paid at the branch or office where the amount is credited. Can i amend my tax return An offshore account is an account maintained at an office or branch of a U. Can i amend my tax return S. Can i amend my tax return or foreign bank or other financial institution at any location outside the United States. Can i amend my tax return   You may rely on documentary evidence given to you by a nonqualified intermediary or a flow-through entity with its Form W-8IMY. Can i amend my tax return This rule applies even though you make the payment to a nonqualified intermediary or flow-through entity in the United States. Can i amend my tax return In most cases, the nonqualified intermediary or flow-through entity that gives you documentary evidence also will have to give you a withholding statement, discussed later. Can i amend my tax return Documentary evidence. Can i amend my tax return   You may apply a reduced rate of withholding to income from marketable securities (discussed earlier) paid outside the United States to an offshore account if the beneficial owner gives you documentary evidence in place of a Form W-8BEN. Can i amend my tax return To claim treaty benefits, the documentary evidence must be one of the following: A certificate of residence that: Is issued by a tax official of the treaty country of which the foreign beneficial owner claims to be a resident, States that the person has filed its most recent income tax return as a resident of that country, and Is issued within 3 years prior to being presented to you. Can i amend my tax return Documentation for an individual that: Includes the individual's name, address, and photograph, Is an official document issued by an authorized governmental body, and Is issued no more than 3 years prior to being presented to you. Can i amend my tax return Documentation for an entity that: Includes the name of the entity, Includes the address of its principal office in the treaty country, and Is an official document issued by an authorized governmental body. Can i amend my tax return In addition to the documentary evidence, a foreign beneficial owner that is an entity must provide a statement that it derives the income for which it claims treaty benefits and that it meets one or more of the conditions set forth in a limitation on benefits article, if any, (or similar provision) contained in the applicable treaty. Can i amend my tax return Form W-8ECI, Certificate of Foreign Person's Claim That Income Is Effectively Connected With the Conduct of a Trade or Business in the United States. Can i amend my tax return   This form is used by a foreign person to: Establish foreign status, Claim that such person is the beneficial owner of the income for which the form is being furnished, and Claim that the income is effectively connected with the conduct of a trade or business in the United States. Can i amend my tax return (See Effectively Connected Income , later. Can i amend my tax return )   Effectively connected income for which a valid Form W-8ECI has been provided is generally not subject to NRA withholding. Can i amend my tax return   If a partner submits this form to a partnership, the income claimed to be effectively connected with the conduct of a U. Can i amend my tax return S. Can i amend my tax return trade or business is subject to withholding under section 1446. Can i amend my tax return If the partner has made, or will make, an election under section 871(d) or 882(d), the partner must submit Form W-8ECI, and attach a copy of the election, or a statement of intent to elect, to the form. Can i amend my tax return    If the partner's only effectively connected income is the income allocated from the partnership and the partner is not making the election under section 871(d) or 882(d), the partner should provide Form W-8BEN to the partnership. Can i amend my tax return Form W-8EXP, Certificate of Foreign Government or Other Foreign Organization for United States Tax Withholding. Can i amend my tax return   This form is used by a foreign government, international organization, foreign central bank of issue, foreign tax-exempt organization, foreign private foundation, or government of a U. Can i amend my tax return S. Can i amend my tax return possession to: Establish foreign status, Claim that such person is the beneficial owner of the income for which the form is being furnished, and Claim a reduced rate of, or an exemption from, withholding as such an entity. Can i amend my tax return   If the government or organization is a partner in a partnership carrying on a trade or business in the United States, the effectively connected income allocable to the partner is subject to withholding under section 1446. Can i amend my tax return   See Foreign Governments and Certain Other Foreign Organizations , later. Can i amend my tax return Foreign Intermediaries and Foreign Flow-Through Entities Payments made to a foreign intermediary or foreign flow-through entity are treated as made to the payees on whose behalf the intermediary or entity acts. Can i amend my tax return The Form W-8IMY provided by a foreign intermediary or flow-through entity must be accompanied by additional information for you to be able to reliably associate the payment with a payee. Can i amend my tax return The additional information required depends on the type of intermediary or flow-through entity and the extent of the withholding responsibilities it assumes. Can i amend my tax return Form W-8IMY, Certificate of Foreign Intermediary, Foreign Flow-Through Entity, or Certain U. Can i amend my tax return S. Can i amend my tax return Branches for United States Tax Withholding. Can i amend my tax return   This form is used by foreign intermediaries and foreign flow-through entities, as well as certain U. Can i amend my tax return S. Can i amend my tax return branches, to: Represent that a foreign person is a qualified intermediary or nonqualified intermediary, Represent, if applicable, that the qualified intermediary is assuming primary NRA withholding responsibility and/or primary Form 1099 reporting and backup withholding responsibility, Represent that a foreign partnership or a foreign simple or grantor trust is a withholding foreign partnership or a withholding foreign trust, Represent that a foreign flow-through entity is a nonwithholding foreign partnership, or a nonwithholding foreign trust and that the income is not effectively connected with the conduct of a trade or business in the United States, Represent that the provider is a U. Can i amend my tax return S. Can i amend my tax return branch of a foreign bank or insurance company and either is agreeing to be treated as a U. Can i amend my tax return S. Can i amend my tax return person or is transmitting documentation of the persons on whose behalf it is acting, or Represent that, for purposes of section 1446, it is an upper-tier foreign partnership or a foreign grantor trust and that the form is being used to transmit the required documentation. Can i amend my tax return For information on qualifying as an upper-tier foreign partnership, see Regulations section 1. Can i amend my tax return 1446-5. Can i amend my tax return Qualified Intermediaries In most cases, a QI is any foreign intermediary that has entered into a QI withholding agreement (discussed earlier) with the IRS. Can i amend my tax return A foreign intermediary that has received a QI employer identification number (QI-EIN) may represent on Form W-8IMY that it is a QI before it receives a fully executed agreement. Can i amend my tax return The intermediary can claim that it is a QI until the IRS revokes its QI-EIN. Can i amend my tax return The IRS will revoke a QI-EIN if the QI agreement is not executed and returned to the IRS within a reasonable period of time after the agreement was sent to the intermediary for signature. Can i amend my tax return Responsibilities. Can i amend my tax return   Payments made to a QI that does not assume NRA withholding responsibility are treated as paid to its account holders and customers. Can i amend my tax return However, a QI is not required to provide you with documentation it obtains from its foreign account holders and customers. Can i amend my tax return Instead, it provides you with a withholding statement that contains withholding rate pool information. Can i amend my tax return A withholding rate pool is a payment of a single type of income, determined in accordance with the categories of income reported on Form 1042-S that is subject to a single rate of withholding. Can i amend my tax return A qualified intermediary is required to provide you with information regarding U. Can i amend my tax return S. Can i amend my tax return persons subject to Form 1099 reporting and to provide you withholding rate pool information separately for each such U. Can i amend my tax return S. Can i amend my tax return person unless it has assumed Form 1099 reporting and backup withholding responsibility. Can i amend my tax return For the alternative procedure for providing rate pool information for U. Can i amend my tax return S. Can i amend my tax return non-exempt persons, see the Form W-8IMY instructions. Can i amend my tax return   The withholding statement must: Designate those accounts for which it acts as a qualified intermediary, Designate those accounts for which it assumes primary NRA withholding responsibility and/or primary Form 1099 and backup withholding responsibility, and Provide sufficient information for you to allocate the payment to a withholding rate pool. Can i amend my tax return   The extent to which you must have withholding rate pool information depends on the withholding and reporting obligations assumed by the QI. Can i amend my tax return Primary responsibility not assumed. Can i amend my tax return   If a QI does not assume primary NRA withholding responsibility or primary Form 1099 reporting and backup withholding responsibility for the payment, you can reliably associate the payment with valid documentation only to the extent you can reliably determine the part of the payment that relates to each withholding rate pool for foreign payees. Can i amend my tax return Unless the alternative procedure applies, the qualified intermediary must provide you with a separate withholding rate pool for each U. Can i amend my tax return S. Can i amend my tax return person subject to Form 1099 reporting and/or backup withholding. Can i amend my tax return The QI must provide a Form W-9 or, in the absence of the form, the name, address, and TIN, if available, for such person. Can i amend my tax return Primary NRA withholding responsibility assumed. Can i amend my tax return   If you make a payment to a QI that assumes primary NRA withholding responsibility (but not primary Form 1099 reporting and backup withholding responsibility), you can reliably associate the payment with valid documentation only to the extent you can reliably determine the part of the payment that relates to the withholding rate pool for which the QI assumes primary NRA withholding responsibility and the part of the payment attributable to withholding rate pools for each U. Can i amend my tax return S. Can i amend my tax return person, unless the alternative procedure applies, subject to Form 1099 reporting and/or backup withholding. Can i amend my tax return The QI must provide a Form W-9 or, in the absence of the form, the name, address, and TIN, if available, for such person. Can i amend my tax return Primary NRA and Form 1099 responsibility assumed. Can i amend my tax return   If you make a payment to a QI that assumes both primary NRA withholding responsibility and primary Form 1099 reporting and backup withholding responsibility, you can reliably associate a payment with valid documentation provided that you receive a valid Form W-8IMY. Can i amend my tax return It is not necessary to associate the payment with withholding rate pools. Can i amend my tax return Example. Can i amend my tax return You make a payment of dividends to a QI. Can i amend my tax return It has five customers: two are foreign persons who have provided documentation entitling them to a 15% rate of withholding on dividends; two are foreign persons subject to a 30% rate of withholding on dividends; and one is a U. Can i amend my tax return S. Can i amend my tax return individual who provides it with a Form W-9. Can i amend my tax return Each customer is entitled to 20% of the dividend payment. Can i amend my tax return The QI does not assume any primary withholding responsibility. Can i amend my tax return The QI gives you a Form W-8IMY with which it associates the Form W-9 and a withholding statement that allocates 40% of the dividend to a 15% withholding rate pool, 40% to a 30% withholding rate pool, and 20% to the U. Can i amend my tax return S. Can i amend my tax return individual. Can i amend my tax return You should report on Forms 1042-S 40% of the payment as made to a 15% rate dividend pool and 40% of the payment as made to a 30% rate dividend pool. Can i amend my tax return The part of the payment allocable to the U. Can i amend my tax return S. Can i amend my tax return individual (20%) is reportable on Form 1099-DIV. Can i amend my tax return Smaller partnerships and trusts. Can i amend my tax return   A QI may apply special rules to a smaller partnership or trust (Joint Account Provision) only if the partnership or trust meets the following conditions. Can i amend my tax return It is a foreign partnership or foreign simple or grantor trust. Can i amend my tax return It is a direct account holder of the QI. Can i amend my tax return It does not have any partner, beneficiary, or owner that is a U. Can i amend my tax return S. Can i amend my tax return person or a pass- through partner, beneficiary, or owner. Can i amend my tax return   For information on these rules, see section 4A. Can i amend my tax return 01 of the QI agreement. Can i amend my tax return This is found in Appendix 3 of Revenue Procedure 2003-64. Can i amend my tax return Also see Revenue Procedure 2004-21. Can i amend my tax return Related partnerships and trusts. Can i amend my tax return    A QI may apply special rules to a related partnership or trust only if the partnership or trust meets the following conditions. Can i amend my tax return It is a foreign partnership or foreign simple or grantor trust. Can i amend my tax return It is either: A direct account holder of the QI, or An indirect account holder of the QI that is a direct partner, beneficiary, or owner of a partnership or trust to which the QI has applied this rule. Can i amend my tax return For information on these rules, see section 4A. Can i amend my tax return 02 of the QI agreement. Can i amend my tax return This is found in Appendix 3 of Revenue Procedure 2003-64. Can i amend my tax return Also see Revenue Procedure 2005-77. Can i amend my tax return Nonqualified Intermediaries If you are making a payment to an NQI, foreign flow-through entity, or U. Can i amend my tax return S. Can i amend my tax return branch that is using Form W-8IMY to transmit information about the branch's account holders or customers, you can treat the payment (or a part of the payment) as reliably associated with valid documentation from a specific payee only if, prior to making the payment: You can allocate the payment to a valid Form W-8IMY, You can reliably determine how much of the payment relates to valid documentation provided by a payee (a person that is not itself a foreign intermediary, flow- through entity, or U. Can i amend my tax return S. Can i amend my tax return branch), and You have sufficient information to report the payment on Form 1042-S or Form 1099, if reporting is required. Can i amend my tax return The NQI, flow-through entity, or U. Can i amend my tax return S. Can i amend my tax return branch must give you certain information on a withholding statement that is associated with the Form W-8IMY. Can i amend my tax return A withholding statement must be updated to keep the information accurate prior to each payment. Can i amend my tax return Withholding statement. Can i amend my tax return   In most cases, a withholding statement must contain the following information. Can i amend my tax return The name, address, and TIN (if any, or if required) of each person for whom documentation is provided. Can i amend my tax return The type of documentation (documentary evidence, Form W-8, or Form W-9) for every person for whom documentation has been provided. Can i amend my tax return The status of the person for whom the documentation has been provided, such as whether the person is a U. Can i amend my tax return S. Can i amend my tax return exempt recipient (U. Can i amend my tax return S. Can i amend my tax return person exempt from Form 1099 reporting), U. Can i amend my tax return S. Can i amend my tax return non-exempt recipient (U. Can i amend my tax return S. Can i amend my tax return person subject to Form 1099 reporting), or a foreign person. Can i amend my tax return For a foreign person, the statement must indicate whether the person is a beneficial owner or a foreign intermediary, flow-through entity, or a U. Can i amend my tax return S. Can i amend my tax return branch. Can i amend my tax return The type of recipient the person is, based on the recipient codes used on Form 1042-S. Can i amend my tax return Information allocating each payment, by income type, to each payee (including U. Can i amend my tax return S. Can i amend my tax return exempt and U. Can i amend my tax return S. Can i amend my tax return non-exempt recipients) for whom documentation has been provided. Can i amend my tax return The rate of withholding that applies to each foreign person to whom a payment is allocated. Can i amend my tax return A foreign payee's country of residence. Can i amend my tax return If a reduced rate of withholding is claimed, the basis for a reduced rate of withholding (for example, portfolio interest, treaty benefit, etc. Can i amend my tax return ). Can i amend my tax return In the case of treaty benefits claimed by entities, whether the applicable limitation on benefits statement and the statement that the foreign person derives the income for which treaty benefits are claimed, have been made. Can i amend my tax return The name, address, and TIN (if any) of any other NQI, flow-through entity, or U. Can i amend my tax return S. Can i amend my tax return branch from which the payee will directly receive a payment. Can i amend my tax return Any other information a withholding agent requests to fulfill its reporting and withholding obligations. Can i amend my tax return Alternative procedure. Can i amend my tax return   Under this alternative procedure the NQI can give you the information that allocates each payment to each foreign and U. Can i amend my tax return S. Can i amend my tax return exempt recipient by January 31 following the calendar year of payment, rather than prior to the payment being made as otherwise required. Can i amend my tax return To take advantage of this procedure, the NQI must: (a) inform you, on its withholding statement, that it is using the alternative procedure; and (b) obtain your consent. Can i amend my tax return You must receive the withholding statement with all the required information (other than item 5) prior to making the payment. Can i amend my tax return    This alternative procedure cannot be used for payments to U. Can i amend my tax return S. Can i amend my tax return non-exempt recipients. Can i amend my tax return Therefore, an NQI must always provide you with allocation information for all U. Can i amend my tax return S. Can i amend my tax return non-exempt recipients prior to a payment being made. Can i amend my tax return Pooled withholding information. Can i amend my tax return   If an NQI uses the alternative procedure, it must provide you with withholding rate pool information, as opposed to individual allocation information, prior to the payment of a reportable amount. Can i amend my tax return A withholding rate pool is a payment of a single type of income (as determined by the income categories on Form 1042-S) that is subject to a single rate of withholding. Can i amend my tax return For example, an NQI that has foreign account holders receiving royalties and dividends, both subject to the 15% rate, will provide you with information for two withholding rate pools (one for royalties and one for dividends). Can i amend my tax return The NQI must provide you with the payee specific allocation information (information allocating each payment to each payee) by January 31 following the calendar year of payment. Can i amend my tax return Failure to provide allocation information. Can i amend my tax return   If an NQI fails to provide you with the payee specific allocation information for a withholding rate pool by January 31, you must not apply the alternative procedure to any of the NQI's withholding rate pools from that date forward. Can i amend my tax return You must treat the payees as undocumented and apply the presumption rules, discussed later in Presumption Rules . Can i amend my tax return An NQI is deemed to have f