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Efile State Taxes

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Efile State Taxes

Efile state taxes 8. Efile state taxes   Dividends and Other Distributions Table of Contents Reminder Introduction Useful Items - You may want to see: General InformationDividends not reported on Form 1099-DIV. Efile state taxes Reporting tax withheld. Efile state taxes Nominees. Efile state taxes Ordinary DividendsQualified Dividends Dividends Used to Buy More Stock Money Market Funds Capital Gain DistributionsBasis adjustment. Efile state taxes Nondividend DistributionsLiquidating Distributions Distributions of Stock and Stock Rights Other DistributionsInformation reporting requirement. Efile state taxes Alternative minimum tax treatment. Efile state taxes How To Report Dividend IncomeInvestment interest deducted. Efile state taxes Reminder Foreign-source income. Efile state taxes  If you are a U. Efile state taxes S. Efile state taxes citizen with dividend income from sources outside the United States (foreign-source income), you must report that income on your tax return unless it is exempt by U. Efile state taxes S. Efile state taxes law. Efile state taxes This is true whether you reside inside or outside the United States and whether or not you receive a Form 1099 from the foreign payer. Efile state taxes Introduction This chapter discusses the tax treatment of: Ordinary dividends, Capital gain distributions, Nondividend distributions, and Other distributions you may receive from a corporation or a mutual fund. Efile state taxes This chapter also explains how to report dividend income on your tax return. Efile state taxes Dividends are distributions of money, stock, or other property paid to you by a corporation or by a mutual fund. Efile state taxes You also may receive dividends through a partnership, an estate, a trust, or an association that is taxed as a corporation. Efile state taxes However, some amounts you receive that are called dividends are actually interest income. Efile state taxes (See Dividends that are actually interest under Taxable Interest in chapter 7. Efile state taxes ) Most distributions are paid in cash (or check). Efile state taxes However, distributions can consist of more stock, stock rights, other property, or services. Efile state taxes Useful Items - You may want to see: Publication 514 Foreign Tax Credit for Individuals 550 Investment Income and Expenses Form (and Instructions) Schedule B (Form 1040A or 1040) Interest and Ordinary Dividends General Information This section discusses general rules for dividend income. Efile state taxes Tax on unearned income of certain children. Efile state taxes   Part of a child's 2013 unearned income may be taxed at the parent's tax rate. Efile state taxes If it is, Form 8615, Tax for Certain Children Who Have Unearned Income, must be completed and attached to the child's tax return. Efile state taxes If not, Form 8615 is not required and the child's income is taxed at his or her own tax rate. Efile state taxes    Some parents can choose to include the child's interest and dividends on the parent's return if certain requirements are met. Efile state taxes Use Form 8814, Parents' Election To Report Child's Interest and Dividends, for this purpose. Efile state taxes   For more information about the tax on unearned income of children and the parents' election, see chapter 31. Efile state taxes Beneficiary of an estate or trust. Efile state taxes    Dividends and other distributions you receive as a beneficiary of an estate or trust are generally taxable income. Efile state taxes You should receive a Schedule K-1 (Form 1041), Beneficiary's Share of Income, Deductions, Credits, etc. Efile state taxes , from the fiduciary. Efile state taxes Your copy of Schedule K-1 (Form 1041) and its instructions will tell you where to report the income on your Form 1040. Efile state taxes Social security number (SSN) or individual taxpayer identification number (ITIN). Efile state taxes    You must give your SSN or ITIN to any person required by federal tax law to make a return, statement, or other document that relates to you. Efile state taxes This includes payers of dividends. Efile state taxes If you do not give your SSN or ITIN to the payer of dividends, you may have to pay a penalty. Efile state taxes For more information on SSNs and ITINs, see Social Security Number (SSN) in chapter 1. Efile state taxes Backup withholding. Efile state taxes   Your dividend income is generally not subject to regular withholding. Efile state taxes However, it may be subject to backup withholding to ensure that income tax is collected on the income. Efile state taxes Under backup withholding, the payer of dividends must withhold, as income tax, on the amount you are paid, applying the appropriate withholding rate. Efile state taxes   Backup withholding may also be required if the IRS has determined that you underreported your interest or dividend income. Efile state taxes For more information, see Backup Withholding in chapter 4. Efile state taxes Stock certificate in two or more names. Efile state taxes   If two or more persons hold stock as joint tenants, tenants by the entirety, or tenants in common, each person's share of any dividends from the stock is determined by local law. Efile state taxes Form 1099-DIV. Efile state taxes   Most corporations and mutual funds use Form 1099-DIV, Dividends and Distributions, to show you the distributions you received from them during the year. Efile state taxes Keep this form with your records. Efile state taxes You do not have to attach it to your tax return. Efile state taxes Dividends not reported on Form 1099-DIV. Efile state taxes   Even if you do not receive Form 1099-DIV, you must still report all your taxable dividend income. Efile state taxes For example, you may receive distributive shares of dividends from partnerships or S corporations. Efile state taxes These dividends are reported to you on Schedule K-1 (Form 1065), Partner's Share of Income, Deductions, Credits, etc. Efile state taxes , and Schedule K-1 (Form 1120S), Shareholder's Share of Income, Deductions, Credits, etc. Efile state taxes Reporting tax withheld. Efile state taxes   If tax is withheld from your dividend income, the payer must give you a Form 1099-DIV that indicates the amount withheld. Efile state taxes Nominees. Efile state taxes   If someone receives distributions as a nominee for you, that person should give you a Form 1099-DIV, which will show distributions received on your behalf. Efile state taxes Form 1099-MISC. Efile state taxes   Certain substitute payments in lieu of dividends or tax-exempt interest received by a broker on your behalf must be reported to you on Form 1099-MISC, Miscellaneous Income, or a similar statement. Efile state taxes See Reporting Substitute Payments under Short Sales in chapter 4 of Publication 550 for more information about reporting these payments. Efile state taxes Incorrect amount shown on a Form 1099. Efile state taxes   If you receive a Form 1099 that shows an incorrect amount (or other incorrect information), you should ask the issuer for a corrected form. Efile state taxes The new Form 1099 you receive will be marked “Corrected. Efile state taxes ” Dividends on stock sold. Efile state taxes   If stock is sold, exchanged, or otherwise disposed of after a dividend is declared but before it is paid, the owner of record (usually the payee shown on the dividend check) must include the dividend in income. Efile state taxes Dividends received in January. Efile state taxes   If a mutual fund (or other regulated investment company) or real estate investment trust (REIT) declares a dividend (including any exempt-interest dividend or capital gain distribution) in October, November, or December, payable to shareholders of record on a date in one of those months but actually pays the dividend during January of the next calendar year, you are considered to have received the dividend on December 31. Efile state taxes You report the dividend in the year it was declared. Efile state taxes Ordinary Dividends Ordinary (taxable) dividends are the most common type of distribution from a corporation or a mutual fund. Efile state taxes They are paid out of earnings and profits and are ordinary income to you. Efile state taxes This means they are not capital gains. Efile state taxes You can assume that any dividend you receive on common or preferred stock is an ordinary dividend unless the paying corporation or mutual fund tells you otherwise. Efile state taxes Ordinary dividends will be shown in box 1a of the Form 1099-DIV you receive. Efile state taxes Qualified Dividends Qualified dividends are the ordinary dividends subject to the same 0%, 15%, or 20% maximum tax rate that applies to net capital gain. Efile state taxes They should be shown in box 1b of the Form 1099-DIV you receive. Efile state taxes The maximum rate of tax on qualified dividends is: 0% on any amount that otherwise would be taxed at a 10% or 15% rate. Efile state taxes 15% on any amount that otherwise would be taxed at rates greater than 15% but less than 39. Efile state taxes 6%. Efile state taxes 20% on any amount that otherwise would be taxed at a 39. Efile state taxes 6% rate. Efile state taxes To qualify for the maximum rate, all of the following requirements must be met. Efile state taxes The dividends must have been paid by a U. Efile state taxes S. Efile state taxes corporation or a qualified foreign corporation. Efile state taxes (See Qualified foreign corporation , later. Efile state taxes ) The dividends are not of the type listed later under Dividends that are not qualified dividends . Efile state taxes You meet the holding period (discussed next). Efile state taxes Holding period. Efile state taxes   You must have held the stock for more than 60 days during the 121-day period that begins 60 days before the ex-dividend date. Efile state taxes The ex-dividend date is the first date following the declaration of a dividend on which the buyer of a stock is not entitled to receive the next dividend payment. Efile state taxes Instead, the seller will get the dividend. Efile state taxes   When counting the number of days you held the stock, include the day you disposed of the stock, but not the day you acquired it. Efile state taxes See the examples later. Efile state taxes Exception for preferred stock. Efile state taxes   In the case of preferred stock, you must have held the stock more than 90 days during the 181-day period that begins 90 days before the ex-dividend date if the dividends are due to periods totaling more than 366 days. Efile state taxes If the preferred dividends are due to periods totaling less than 367 days, the holding period in the previous paragraph applies. Efile state taxes Example 1. Efile state taxes You bought 5,000 shares of XYZ Corp. Efile state taxes common stock on July 9, 2013. Efile state taxes XYZ Corp. Efile state taxes paid a cash dividend of 10 cents per share. Efile state taxes The ex-dividend date was July 16, 2013. Efile state taxes Your Form 1099-DIV from XYZ Corp. Efile state taxes shows $500 in box 1a (ordinary dividends) and in box 1b (qualified dividends). Efile state taxes However, you sold the 5,000 shares on August 12, 2013. Efile state taxes You held your shares of XYZ Corp. Efile state taxes for only 34 days of the 121-day period (from July 10, 2013, through August 12, 2013). Efile state taxes The 121-day period began on May 17, 2013 (60 days before the ex-dividend date), and ended on September 14, 2013. Efile state taxes You have no qualified dividends from XYZ Corp. Efile state taxes because you held the XYZ stock for less than 61 days. Efile state taxes Example 2. Efile state taxes Assume the same facts as in Example 1 except that you bought the stock on July 15, 2013 (the day before the ex-dividend date), and you sold the stock on September 16, 2013. Efile state taxes You held the stock for 63 days (from July 16, 2013, through September 16, 2013). Efile state taxes The $500 of qualified dividends shown in box 1b of your Form 1099-DIV are all qualified dividends because you held the stock for 61 days of the 121-day period (from July 16, 2013, through September 14, 2013). Efile state taxes Example 3. Efile state taxes You bought 10,000 shares of ABC Mutual Fund common stock on July 9, 2013. Efile state taxes ABC Mutual Fund paid a cash dividend of 10 cents a share. Efile state taxes The ex-dividend date was July 16, 2013. Efile state taxes The ABC Mutual Fund advises you that the portion of the dividend eligible to be treated as qualified dividends equals 2 cents per share. Efile state taxes Your Form 1099-DIV from ABC Mutual Fund shows total ordinary dividends of $1,000 and qualified dividends of $200. Efile state taxes However, you sold the 10,000 shares on August 12, 2013. Efile state taxes You have no qualified dividends from ABC Mutual Fund because you held the ABC Mutual Fund stock for less than 61 days. Efile state taxes Holding period reduced where risk of loss is diminished. Efile state taxes   When determining whether you met the minimum holding period discussed earlier, you cannot count any day during which you meet any of the following conditions. Efile state taxes You had an option to sell, were under a contractual obligation to sell, or had made (and not closed) a short sale of substantially identical stock or securities. Efile state taxes You were grantor (writer) of an option to buy substantially identical stock or securities. Efile state taxes Your risk of loss is diminished by holding one or more other positions in substantially similar or related property. Efile state taxes   For information about how to apply condition (3), see Regulations section 1. Efile state taxes 246-5. Efile state taxes Qualified foreign corporation. Efile state taxes   A foreign corporation is a qualified foreign corporation if it meets any of the following conditions. Efile state taxes The corporation is incorporated in a U. Efile state taxes S. Efile state taxes possession. Efile state taxes The corporation is eligible for the benefits of a comprehensive income tax treaty with the United States that the Treasury Department determines is satisfactory for this purpose and that includes an exchange of information program. Efile state taxes For a list of those treaties, see Table 8-1. Efile state taxes The corporation does not meet (1) or (2) above, but the stock for which the dividend is paid is readily tradable on an established securities market in the United States. Efile state taxes See Readily tradable stock , later. Efile state taxes Exception. Efile state taxes   A corporation is not a qualified foreign corporation if it is a passive foreign investment company during its tax year in which the dividends are paid or during its previous tax year. Efile state taxes Readily tradable stock. Efile state taxes   Any stock (such as common, ordinary, or preferred) or an American depositary receipt in respect of that stock is considered to satisfy requirement (3) under Qualified foreign corporation , if it is listed on a national securities exchange that is registered under section 6 of the Securities Exchange Act of 1934 or on the Nasdaq Stock Market. Efile state taxes For a list of the exchanges that meet these requirements, see www. Efile state taxes sec. Efile state taxes gov/divisions/marketreg/mrexchanges. Efile state taxes shtml. Efile state taxes Dividends that are not qualified dividends. Efile state taxes   The following dividends are not qualified dividends. Efile state taxes They are not qualified dividends even if they are shown in box 1b of Form 1099-DIV. Efile state taxes Capital gain distributions. Efile state taxes Dividends paid on deposits with mutual savings banks, cooperative banks, credit unions, U. Efile state taxes S. Efile state taxes building and loan associations, U. Efile state taxes S. Efile state taxes savings and loan associations, federal savings and loan associations, and similar financial institutions. Efile state taxes (Report these amounts as interest income. Efile state taxes ) Dividends from a corporation that is a tax-exempt organization or farmer's cooperative during the corporation's tax year in which the dividends were paid or during the corporation's previous tax year. Efile state taxes Dividends paid by a corporation on employer securities held on the date of record by an employee stock ownership plan (ESOP) maintained by that corporation. Efile state taxes Dividends on any share of stock to the extent you are obligated (whether under a short sale or otherwise) to make related payments for positions in substantially similar or related property. Efile state taxes Payments in lieu of dividends, but only if you know or have reason to know the payments are not qualified dividends. Efile state taxes Payments shown in Form 1099-DIV, box 1b, from a foreign corporation to the extent you know or have reason to know the payments are not qualified dividends. Efile state taxes Table 8-1. Efile state taxes Income Tax Treaties Income tax treaties the United States has with the following countries satisfy requirement (2) under Qualified foreign corporation. Efile state taxes Australia Indonesia Romania Austria Ireland Russian Bangladesh Israel Federation Barbados Italy Slovak Belgium Jamaica Republic Bulgaria Japan Slovenia Canada Kazakhstan South Africa China Korea Spain Cyprus Latvia Sri Lanka Czech Lithuania Sweden Republic Luxembourg Switzerland Denmark Malta Thailand Egypt Mexico Trinidad and Estonia Morocco Tobago Finland Netherlands Tunisia France New Zealand Turkey Germany Norway Ukraine Greece Pakistan United Hungary Philippines Kingdom Iceland Poland Venezuela India Portugal     Dividends Used to Buy More Stock The corporation in which you own stock may have a dividend reinvestment plan. Efile state taxes This plan lets you choose to use your dividends to buy (through an agent) more shares of stock in the corporation instead of receiving the dividends in cash. Efile state taxes Most mutual funds also permit shareholders to automatically reinvest distributions in more shares in the fund, instead of receiving cash. Efile state taxes If you use your dividends to buy more stock at a price equal to its fair market value, you still must report the dividends as income. Efile state taxes If you are a member of a dividend reinvestment plan that lets you buy more stock at a price less than its fair market value, you must report as dividend income the fair market value of the additional stock on the dividend payment date. Efile state taxes You also must report as dividend income any service charge subtracted from your cash dividends before the dividends are used to buy the additional stock. Efile state taxes But you may be able to deduct the service charge. Efile state taxes See chapter 28 for more information about deducting expenses of producing income. Efile state taxes In some dividend reinvestment plans, you can invest more cash to buy shares of stock at a price less than fair market value. Efile state taxes If you choose to do this, you must report as dividend income the difference between the cash you invest and the fair market value of the stock you buy. Efile state taxes When figuring this amount, use the fair market value of the stock on the dividend payment date. Efile state taxes Money Market Funds Report amounts you receive from money market funds as dividend income. Efile state taxes Money market funds are a type of mutual fund and should not be confused with bank money market accounts that pay interest. Efile state taxes Capital Gain Distributions Capital gain distributions (also called capital gain dividends) are paid to you or credited to your account by mutual funds (or other regulated investment companies) and real estate investment trusts (REITs). Efile state taxes They will be shown in box 2a of the Form 1099-DIV you receive from the mutual fund or REIT. Efile state taxes Report capital gain distributions as long-term capital gains, regardless of how long you owned your shares in the mutual fund or REIT. Efile state taxes Undistributed capital gains of mutual funds and REITs. Efile state taxes    Some mutual funds and REITs keep their long-term capital gains and pay tax on them. Efile state taxes You must treat your share of these gains as distributions, even though you did not actually receive them. Efile state taxes However, they are not included on Form 1099-DIV. Efile state taxes Instead, they are reported to you in box 1a of Form 2439. Efile state taxes   Report undistributed capital gains (box 1a of Form 2439) as long-term capital gains on Schedule D (Form 1040), column (h), line 11. Efile state taxes   The tax paid on these gains by the mutual fund or REIT is shown in box 2 of Form 2439. Efile state taxes You take credit for this tax by including it on Form 1040, line 71, and checking box a on that line. Efile state taxes Attach Copy B of Form 2439 to your return, and keep Copy C for your records. Efile state taxes Basis adjustment. Efile state taxes   Increase your basis in your mutual fund, or your interest in a REIT, by the difference between the gain you report and the credit you claim for the tax paid. Efile state taxes Additional information. Efile state taxes   For more information on the treatment of distributions from mutual funds, see Publication 550. Efile state taxes Nondividend Distributions A nondividend distribution is a distribution that is not paid out of the earnings and profits of a corporation or a mutual fund. Efile state taxes You should receive a Form 1099-DIV or other statement showing the nondividend distribution. Efile state taxes On Form 1099-DIV, a nondividend distribution will be shown in box 3. Efile state taxes If you do not receive such a statement, you report the distribution as an ordinary dividend. Efile state taxes Basis adjustment. Efile state taxes   A nondividend distribution reduces the basis of your stock. Efile state taxes It is not taxed until your basis in the stock is fully recovered. Efile state taxes This nontaxable portion is also called a return of capital; it is a return of your investment in the stock of the company. Efile state taxes If you buy stock in a corporation in different lots at different times, and you cannot definitely identify the shares subject to the nondividend distribution, reduce the basis of your earliest purchases first. Efile state taxes   When the basis of your stock has been reduced to zero, report any additional nondividend distribution you receive as a capital gain. Efile state taxes Whether you report it as a long-term or short-term capital gain depends on how long you have held the stock. Efile state taxes See Holding Period in chapter 14. Efile state taxes Example. Efile state taxes You bought stock in 2000 for $100. Efile state taxes In 2003, you received a nondividend distribution of $80. Efile state taxes You did not include this amount in your income, but you reduced the basis of your stock to $20. Efile state taxes You received a nondividend distribution of $30 in 2013. Efile state taxes The first $20 of this amount reduced your basis to zero. Efile state taxes You report the other $10 as a long-term capital gain for 2013. Efile state taxes You must report as a long-term capital gain any nondividend distribution you receive on this stock in later years. Efile state taxes Liquidating Distributions Liquidating distributions, sometimes called liquidating dividends, are distributions you receive during a partial or complete liquidation of a corporation. Efile state taxes These distributions are, at least in part, one form of a return of capital. Efile state taxes They may be paid in one or more installments. Efile state taxes You will receive Form 1099-DIV from the corporation showing you the amount of the liquidating distribution in box 8 or 9. Efile state taxes For more information on liquidating distributions, see chapter 1 of Publication 550. Efile state taxes Distributions of Stock and Stock Rights Distributions by a corporation of its own stock are commonly known as stock dividends. Efile state taxes Stock rights (also known as “stock options”) are distributions by a corporation of rights to acquire the corporation's stock. Efile state taxes Generally, stock dividends and stock rights are not taxable to you, and you do not report them on your return. Efile state taxes Taxable stock dividends and stock rights. Efile state taxes   Distributions of stock dividends and stock rights are taxable to you if any of the following apply. Efile state taxes You or any other shareholder have the choice to receive cash or other property instead of stock or stock rights. Efile state taxes The distribution gives cash or other property to some shareholders and an increase in the percentage interest in the corporation's assets or earnings and profits to other shareholders. Efile state taxes The distribution is in convertible preferred stock and has the same result as in (2). Efile state taxes The distribution gives preferred stock to some common stock shareholders and common stock to other common stock shareholders. Efile state taxes The distribution is on preferred stock. Efile state taxes (The distribution, however, is not taxable if it is an increase in the conversion ratio of convertible preferred stock made solely to take into account a stock dividend, stock split, or similar event that would otherwise result in reducing the conversion right. Efile state taxes )   The term “stock” includes rights to acquire stock, and the term “shareholder” includes a holder of rights or of convertible securities. Efile state taxes If you receive taxable stock dividends or stock rights, include their fair market value at the time of distribution in your income. Efile state taxes Preferred stock redeemable at a premium. Efile state taxes   If you hold preferred stock having a redemption price higher than its issue price, the difference (the redemption premium) generally is taxable as a constructive distribution of additional stock on the preferred stock. Efile state taxes For more information, see chapter 1 of Publication 550. Efile state taxes Basis. Efile state taxes   Your basis in stock or stock rights received in a taxable distribution is their fair market value when distributed. Efile state taxes If you receive stock or stock rights that are not taxable to you, see Stocks and Bonds under Basis of Investment Property in chapter 4 of Publication 550 for information on how to figure their basis. Efile state taxes Fractional shares. Efile state taxes    You may not own enough stock in a corporation to receive a full share of stock if the corporation declares a stock dividend. Efile state taxes However, with the approval of the shareholders, the corporation may set up a plan in which fractional shares are not issued but instead are sold, and the cash proceeds are given to the shareholders. Efile state taxes Any cash you receive for fractional shares under such a plan is treated as an amount realized on the sale of the fractional shares. Efile state taxes Report this transaction on Form 8949, Sales and Other Dispositions of Capital Assets. Efile state taxes Enter your gain or loss, the difference between the cash you receive and the basis of the fractional shares sold, in column (h) of Schedule D (Form 1040) in Part I or Part II, whichever is appropriate. Efile state taxes    Report these transactions on Form 8949 with the correct box checked. Efile state taxes   For more information on Form 8949 and Schedule D (Form 1040), see chapter 4 of Publication 550. Efile state taxes Also see the Instructions for Form 8949 and the Instructions for Schedule D (Form 1040). Efile state taxes Example. Efile state taxes You own one share of common stock that you bought on January 3, 2004, for $100. Efile state taxes The corporation declared a common stock dividend of 5% on June 29, 2013. Efile state taxes The fair market value of the stock at the time the stock dividend was declared was $200. Efile state taxes You were paid $10 for the fractional-share stock dividend under a plan described in the discussion above. Efile state taxes You figure your gain or loss as follows: Fair market value of old stock $200. Efile state taxes 00 Fair market value of stock dividend (cash received) +10. Efile state taxes 00 Fair market value of old stock and stock dividend $210. Efile state taxes 00 Basis (cost) of old stock after the stock dividend (($200 ÷ $210) × $100) $95. Efile state taxes 24 Basis (cost) of stock dividend (($10 ÷ $210) × $100) + 4. Efile state taxes 76 Total $100. Efile state taxes 00 Cash received $10. Efile state taxes 00 Basis (cost) of stock dividend − 4. Efile state taxes 76 Gain $5. Efile state taxes 24 Because you had held the share of stock for more than 1 year at the time the stock dividend was declared, your gain on the stock dividend is a long-term capital gain. Efile state taxes Scrip dividends. Efile state taxes   A corporation that declares a stock dividend may issue you a scrip certificate that entitles you to a fractional share. Efile state taxes The certificate is generally nontaxable when you receive it. Efile state taxes If you choose to have the corporation sell the certificate for you and give you the proceeds, your gain or loss is the difference between the proceeds and the portion of your basis in the corporation's stock allocated to the certificate. Efile state taxes   However, if you receive a scrip certificate that you can choose to redeem for cash instead of stock, the certificate is taxable when you receive it. Efile state taxes You must include its fair market value in income on the date you receive it. Efile state taxes Other Distributions You may receive any of the following distributions during the year. Efile state taxes Exempt-interest dividends. Efile state taxes   Exempt-interest dividends you receive from a mutual fund or other regulated investment company, including those received from a qualified fund of funds in any tax year beginning after December 22, 2010, are not included in your taxable income. Efile state taxes Exempt-interest dividends should be shown in box 10 of Form 1099-DIV. Efile state taxes Information reporting requirement. Efile state taxes   Although exempt-interest dividends are not taxable, you must show them on your tax return if you have to file a return. Efile state taxes This is an information reporting requirement and does not change the exempt-interest dividends to taxable income. Efile state taxes Alternative minimum tax treatment. Efile state taxes   Exempt-interest dividends paid from specified private activity bonds may be subject to the alternative minimum tax. Efile state taxes See Alternative Minimum Tax (AMT) in chapter 30 for more information. Efile state taxes Dividends on insurance policies. Efile state taxes    Insurance policy dividends the insurer keeps and uses to pay your premiums are not taxable. Efile state taxes However, you must report as taxable interest income the interest that is paid or credited on dividends left with the insurance company. Efile state taxes    If dividends on an insurance contract (other than a modified endowment contract) are distributed to you, they are a partial return of the premiums you paid. Efile state taxes Do not include them in your gross income until they are more than the total of all net premiums you paid for the contract. Efile state taxes Report any taxable distributions on insurance policies on Form 1040, line 21. Efile state taxes Dividends on veterans' insurance. Efile state taxes   Dividends you receive on veterans' insurance policies are not taxable. Efile state taxes In addition, interest on dividends left with the Department of Veterans Affairs is not taxable. Efile state taxes Patronage dividends. Efile state taxes   Generally, patronage dividends you receive in money from a cooperative organization are included in your income. Efile state taxes   Do not include in your income patronage dividends you receive on: Property bought for your personal use, or Capital assets or depreciable property bought for use in your business. Efile state taxes But you must reduce the basis (cost) of the items bought. Efile state taxes If the dividend is more than the adjusted basis of the assets, you must report the excess as income. Efile state taxes   These rules are the same whether the cooperative paying the dividend is a taxable or tax-exempt cooperative. Efile state taxes Alaska Permanent Fund dividends. Efile state taxes    Do not report these amounts as dividends. Efile state taxes Instead, report these amounts on Form 1040, line 21; Form 1040A, line 13; or Form 1040EZ, line 3. Efile state taxes How To Report Dividend Income Generally, you can use either Form 1040 or Form 1040A to report your dividend income. Efile state taxes Report the total of your ordinary dividends on line 9a of Form 1040 or Form 1040A. Efile state taxes Report qualified dividends on line 9b of Form 1040 or Form 1040A. Efile state taxes If you receive capital gain distributions, you may be able to use Form 1040A or you may have to use Form 1040. Efile state taxes See Exceptions to filing Form 8949 and Schedule D (Form 1040) in chapter 16. Efile state taxes If you receive nondividend distributions required to be reported as capital gains, you must use Form 1040. Efile state taxes You cannot use Form 1040EZ if you receive any dividend income. Efile state taxes Form 1099-DIV. Efile state taxes   If you owned stock on which you received $10 or more in dividends and other distributions, you should receive a Form 1099-DIV. Efile state taxes Even if you do not receive Form 1099-DIV, you must report all your dividend income. Efile state taxes   See Form 1099-DIV for more information on how to report dividend income. Efile state taxes Form 1040A or 1040. Efile state taxes    You must complete Schedule B (Form 1040A or 1040), Part II, and attach it to your Form 1040A or 1040, if: Your ordinary dividends (Form 1099-DIV, box 1a) are more than $1,500, or You received, as a nominee, dividends that actually belong to someone else. Efile state taxes If your ordinary dividends are more than $1,500, you must also complete Schedule B (Form 1040A or 1040), Part III. Efile state taxes   List on Schedule B (Form 1040A or 1040), Part II, line 5, each payer's name and the ordinary dividends you received. Efile state taxes If your securities are held by a brokerage firm (in “street name”), list the name of the brokerage firm shown on Form 1099-DIV as the payer. Efile state taxes If your stock is held by a nominee who is the owner of record, and the nominee credited or paid you dividends on the stock, show the name of the nominee and the dividends you received or for which you were credited. Efile state taxes   Enter on line 6 the total of the amounts listed on line 5. Efile state taxes Also enter this total on line 9a of Form 1040A or 1040. Efile state taxes Qualified dividends. Efile state taxes   Report qualified dividends (Form 1099-DIV, box 1b) on line 9b of Form 1040 or Form 1040A. Efile state taxes The amount in box 1b is already included in box 1a. Efile state taxes Do not add the amount in box 1b to, or substract it from, the amount in box 1a. Efile state taxes   Do not include any of the following on line 9b. Efile state taxes Qualified dividends you received as a nominee. Efile state taxes See Nominees under How to Report Dividend Income in chapter 1 of Publication 550. Efile state taxes Dividends on stock for which you did not meet the holding period. Efile state taxes See Holding period , earlier under Qualified Dividends. Efile state taxes Dividends on any share of stock to the extent you are obligated (whether under a short sale or otherwise) to make related payments for positions in substantially similar or related property. Efile state taxes Payments in lieu of dividends, but only if you know or have reason to know the payments are not qualified dividends. Efile state taxes Payments shown in Form 1099-DIV, box 1b, from a foreign corporation to the extent you know or have reason to know the payments are not qualified dividends. Efile state taxes   If you have qualified dividends, you must figure your tax by completing the Qualified Dividends and Capital Gain Tax Worksheet in the Form 1040 or 1040A instructions or the Schedule D Tax Worksheet in the Schedule D (Form 1040) instructions, whichever applies. Efile state taxes Enter qualified dividends on line 2 of the worksheet. Efile state taxes Investment interest deducted. Efile state taxes   If you claim a deduction for investment interest, you may have to reduce the amount of your qualified dividends that are eligible for the 0%, 15%, or 20% tax rate. Efile state taxes Reduce it by the qualified dividends you choose to include in investment income when figuring the limit on your investment interest deduction. Efile state taxes This is done on the Qualified Dividends and Capital Gain Tax Worksheet or the Schedule D Tax Worksheet. Efile state taxes For more information about the limit on investment interest, see Investment expenses in chapter 23. Efile state taxes Expenses related to dividend income. Efile state taxes   You may be able to deduct expenses related to dividend income if you itemize your deductions on Schedule A (Form 1040). Efile state taxes See chapter 28 for general information about deducting expenses of producing income. Efile state taxes More information. Efile state taxes    For more information about how to report dividend income, see chapter 1 of Publication 550 or the instructions for the form you must file. Efile state taxes Prev  Up  Next   Home   More Online Publications
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2013 IRSAC Report Made Available at Public Meeting

The Internal Revenue Service Advisory Council (IRSAC) is holding its annual public meeting today in Washington, D.C., and will release its annual report that includes recommendations on a wide range of tax administration issues.

“Members of IRSAC devote significant amounts of their own time to provide us with valuable feedback regarding current issues of tax administration,” said Acting IRS Commissioner Danny Werfel. “We appreciate their important contribution.”

IRSAC is an advisory group to the entire agency. IRSAC’s primary purpose is to provide an organized public forum for senior IRS executives and representatives of the public to discuss relevant tax issues.

IRSAC draws its members from the tax professional community and members of academia. Based on its findings and discussions, IRSAC made several recommendations on a broad array of issues and concerns including:

  • The IRS needs sufficient funding to operate efficiently, provide timely and useful guidance to taxpayers and enforce current Law, so that respect for our voluntary tax system is maintained
  • The IRS should continue to expand voluntary correction programs to facilitate taxpayers self-reporting prior year non-compliance
  • Reducing Processing time for Form 2848, Power of Attorney and Declaration of Representative
  • Review the Transcript Request Policy for the Practitioner Priority Service (PPS) Toll-Free Line
  • Risk Assessing Large Taxpayers
  • Schedule M-3, Net Operating (Loss) Reconciliation for Corporations with Total assets with $10 million or more
  • Strategies to Increase use of On-line Payment Agreements
  • Modifications to Notice CP2030
  • Guidance to Practitioners regarding Professional Obligations
  • Treasury Circular 230 Enrollment of Former Internal Revenue Service Employees

IRSAC is administered by the National Public Liaison Office of the IRS. Today’s meeting is being held at the Melrose Hotel, 2430 Pennsylvania Ave, NW, Washington, DC.

View the 2013 Internal Revenue Service Advisory Council Public Report online.

 

Page Last Reviewed or Updated: 20-Nov-2013

The Efile State Taxes

Efile state taxes 3. Efile state taxes   Environmental Taxes Table of Contents Oil Spill Liability Tax ODCs Imported Taxable Products Floor Stocks Tax Environmental taxes are imposed on crude oil and petroleum products (oil spill liability), the sale or use of ozone-depleting chemicals (ODCs), and imported products containing or manufactured with ODCs. Efile state taxes In addition, a floor stocks tax is imposed on ODCs held on January 1 by any person (other than the manufacturer or importer of the ODCs) for sale or for use in further manufacture. Efile state taxes Figure the environmental tax on Form 6627. Efile state taxes Enter the tax on the appropriate lines of Form 720 and attach Form 6627 to Form 720. Efile state taxes For environmental tax purposes, United States includes the 50 states, the District of Columbia, the Commonwealth of Puerto Rico, any possession of the United States, the Commonwealth of the Northern Mariana Islands, the Trust Territory of the Pacific Islands, the continental shelf areas (applying the principles of section 638), and foreign trade zones. Efile state taxes No one is exempt from the environmental taxes, including the federal government, state and local governments, Indian tribal governments, and nonprofit educational organizations. Efile state taxes Oil Spill Liability Tax The oil spill liability tax is reported on Form 6627, Environmental Taxes, and Form 720, Quarterly Federal Excise Tax Return (IRS Nos. Efile state taxes 18 and 21). Efile state taxes The oil spill liability tax rate is $. Efile state taxes 08 per barrel and generally applies to crude oil received at a U. Efile state taxes S. Efile state taxes refinery and to petroleum products entered into the United States for consumption, use, or warehousing. Efile state taxes The tax also applies to certain uses and the exportation of domestic crude oil. Efile state taxes Crude oil includes crude oil condensates and natural gasoline. Efile state taxes Petroleum products include crude oil, refined and residual oil, and other liquid hydrocarbon refinery products. Efile state taxes Crude oil. Efile state taxes   Tax is imposed on crude oil when it is received at a United Sates refinery. Efile state taxes The operator of the refinery is liable for the tax. Efile state taxes   Tax is imposed on domestic crude oil used or exported before it is received at a United States refinery. Efile state taxes However, the use of crude oil for extracting oil or natural gas on the premises where such crude oil was produced is not taxable. Efile state taxes The user or exporter is liable for the tax. Efile state taxes Imported petroleum products. Efile state taxes   Tax is imposed on petroleum products when they enter the United States for consumption, use, or warehousing. Efile state taxes The person entering the petroleum product into the country is liable for the tax, including the tax on imported crude oil, even if it is subsequently received at a U. Efile state taxes S. Efile state taxes refinery. Efile state taxes   Tax is imposed only once on any imported petroleum product. Efile state taxes Thus, the operator of a U. Efile state taxes S. Efile state taxes refinery that receives imported crude oil must establish that the petroleum tax has already been imposed on such crude oil in order not to be liable for the tax. Efile state taxes ODCs For a list of the taxable ODCs and tax rates, see the Form 6627 instructions. Efile state taxes Taxable event. Efile state taxes   Tax is imposed on an ODC when it is first used or sold by its manufacturer or importer. Efile state taxes The manufacturer or importer is liable for the tax. Efile state taxes Use of ODCs. Efile state taxes   You use an ODC if you put it into service in a trade or business or for the production of income. Efile state taxes Also, an ODC is used if you use it in the making of an article, including incorporation into the article, chemical transformation, or release into the air. Efile state taxes The loss, destruction, packaging, repackaging, or warehousing of ODCs is not a use of the ODC. Efile state taxes   The creation of a mixture containing an ODC is treated as a taxable use of the ODC contained in the mixture. Efile state taxes An ODC is contained in a mixture only if the chemical identity of the ODC is not changed. Efile state taxes Generally, tax is imposed when the mixture is created and not on its sale or use. Efile state taxes However, you can choose to have the tax imposed on its sale or use by checking the appropriate box on Form 6627. Efile state taxes You can revoke this choice only with IRS consent. Efile state taxes   The creation of a mixture for export or for use as a feedstock is not a taxable use of the ODCs contained in the mixture. Efile state taxes Exceptions. Efile state taxes   The following may be exempt from the tax on ODCs. Efile state taxes Metered-dose inhalers. Efile state taxes Recycled ODCs. Efile state taxes Exported ODCs. Efile state taxes ODCs used as feedstock. Efile state taxes Metered-dose inhalers. Efile state taxes   There is no tax on ODCs used or sold for use as propellants in metered-dose inhalers. Efile state taxes For a sale to be nontaxable, you must obtain from the purchaser an exemption certificate that you rely on in good faith. Efile state taxes The certificate must be in substantially the form as the sample certificate set forth in Regulations section 52. Efile state taxes 4682-2(d)(5). Efile state taxes The certificate may be included as part of the sales documentation. Efile state taxes Keep the certificate with your records. Efile state taxes Recycled ODCs. Efile state taxes   There is no tax on any ODC diverted or recovered in the United States as part of a recycling process (and not as part of the original manufacturing or production process). Efile state taxes There is no tax on recycled Halon-1301 or recycled Halon-2402 imported from a country that has signed the Montreal Protocol on Substances that Deplete the Ozone Layer (Montreal Protocol). Efile state taxes   The Montreal Protocol is administered by the United Nations (U. Efile state taxes N. Efile state taxes ). Efile state taxes To determine if a country has signed the Montreal Protocol, contact the U. Efile state taxes N. Efile state taxes The website is untreaty. Efile state taxes un. Efile state taxes org. Efile state taxes Exported ODCs. Efile state taxes   Generally, there is no tax on ODCs sold for export if certain requirements are met. Efile state taxes For a sale to be nontaxable, you and the purchaser must be registered. Efile state taxes See Form 637, Application for Registration (for Certain Excise Tax Activities). Efile state taxes Also, you must obtain from the purchaser an exemption certificate that you rely on in good faith. Efile state taxes Keep the certificate with your records. Efile state taxes The certificate must be in substantially the form as the sample certificate set forth in Regulations section 52. Efile state taxes 4682-5(d)(3). Efile state taxes The tax benefit of this exemption is limited. Efile state taxes For more information, see Regulations section 52. Efile state taxes 4682-5. Efile state taxes ODCs used as feedstock. Efile state taxes   There is no tax on ODCs sold for use or used as a feedstock. Efile state taxes An ODC is used as a feedstock only if the ODC is entirely consumed in the manufacture of another chemical. Efile state taxes The transformation of an ODC into one or more new compounds qualifies as use as a feedstock, but use of an ODC in a mixture does not qualify. Efile state taxes   For a sale to be nontaxable, you must obtain from the purchaser an exemption certificate that you rely on in good faith. Efile state taxes The certificate must be in substantially the form as the sample certificate set forth in Regulations section 52. Efile state taxes 4682-2(d)(2). Efile state taxes Keep the certificate with your records. Efile state taxes Credits or refunds. Efile state taxes   A credit or refund (without interest) of tax paid on ODCs may be claimed if a taxed ODC is: Used as a propellant in a metered-dose inhaler (the person who used the ODC as a propellant may file a claim), Exported (the manufacturer may file a claim), or Used as a feedstock (the person who used the ODC may file a claim). Efile state taxes For information on how to file for credits or refunds, see the Instructions for Form 720 or Schedule 6 (Form 8849). Efile state taxes Conditions to allowance for ODCs exported. Efile state taxes   To claim a credit or refund for ODCs that are exported, you must have repaid or agreed to repay the tax to the exporter, or obtained the exporter's written consent to allowance of the credit or refund. Efile state taxes You must also have the evidence required by the EPA as proof that the ODCs were exported. Efile state taxes Imported Taxable Products An imported product containing or manufactured with ODCs is subject to tax if it is entered into the United States for consumption, use, or warehousing and is listed in the Imported Products Table. Efile state taxes The Imported Products Table is listed in Regulations section 52. Efile state taxes 4682-3(f)(6). Efile state taxes The tax is based on the weight of the ODCs used in the manufacture of the product. Efile state taxes Use the following methods to figure the ODC weight. Efile state taxes The actual (exact) weight of each ODC used as a material in manufacturing the product. Efile state taxes If the actual weight cannot be determined, the ODC weight listed for the product in the Imported Products Table. Efile state taxes However, if you cannot determine the actual weight and the table does not list an ODC weight for the product, the rate of tax is 1% of the entry value of the product. Efile state taxes Taxable event. Efile state taxes   Tax is imposed on an imported taxable product when the product is first sold or used by its importer. Efile state taxes The importer is liable for the tax. Efile state taxes Use of imported products. Efile state taxes   You use an imported product if you put it into service in a trade or business or for the production of income or use it in the making of an article, including incorporation into the article. Efile state taxes The loss, destruction, packaging, repackaging, warehousing, or repair of an imported product is not a use of that product. Efile state taxes Entry as use. Efile state taxes   The importer may choose to treat the entry of a product into the United States as the use of the product. Efile state taxes Tax is imposed on the date of entry instead of when the product is sold or used. Efile state taxes The choice applies to all imported taxable products that you own and have not used when you make the choice and all later entries. Efile state taxes Make the choice by checking the box in Part II of Form 6627. Efile state taxes The choice is effective as of the beginning of the calendar quarter to which the Form 6627 applies. Efile state taxes You can revoke this choice only with IRS consent. Efile state taxes Sale of article incorporating imported product. Efile state taxes   The importer may treat the sale of an article manufactured or assembled in the United States as the first sale or use of an imported taxable product incorporated in that article if both the following apply. Efile state taxes The importer has consistently treated the sale of similar items as the first sale or use of similar taxable imported products. Efile state taxes The importer has not chosen to treat entry into the United States as use of the product. Efile state taxes Imported products table. Efile state taxes   The table lists all the products that are subject to the tax on imported taxable products and specifies the ODC weight (discussed later) of each product. Efile state taxes   Each listing in the table identifies a product by name and includes only products that are described by that name. Efile state taxes Most listings identify a product by both name and Harmonized Tariff Schedule (HTS) heading. Efile state taxes In those cases, a product is included in that listing only if the product is described by that name and the rate of duty on the product is determined by reference to that HTS heading. Efile state taxes A product is included in the listing even if it is manufactured with or contains a different ODC than the one specified in the table. Efile state taxes   Part II of the table lists electronic items that are not included within any other list in the table. Efile state taxes An imported product is included in this list only if the product meets one of the following tests. Efile state taxes It is an electronic component whose operation involves the use of nonmechanical amplification or switching devices such as tubes, transistors, and integrated circuits. Efile state taxes It contains components described in (1), which account for more than 15% of the cost of the product. Efile state taxes   These components do not include passive electrical devices, such as resistors and capacitors. Efile state taxes Items such as screws, nuts, bolts, plastic parts, and similar specially fabricated parts that may be used to construct an electronic item are not themselves included in the listing for electronic items. Efile state taxes Rules for listing products. Efile state taxes   Products are listed in the table according to the following rules. Efile state taxes A product is listed in Part I of the table if it is a mixture containing ODCs. Efile state taxes A product is listed in Part II of the table if the Commissioner has determined that the ODCs used as materials in the manufacture of the product under the predominant method are used for purposes of refrigeration or air conditioning, creating an aerosol or foam, or manufacturing electronic components. Efile state taxes A product is listed in Part III of the table if the Commissioner has determined that the product meets both the following tests. Efile state taxes It is not an imported taxable product. Efile state taxes It would otherwise be included within a list in Part II of the table. Efile state taxes   For example, floppy disk drive units are listed in Part III because they are not imported taxable products and would have been included in the Part II list for electronic items not specifically identified, but for their listing in Part III. Efile state taxes ODC weight. Efile state taxes   The Table ODC weight of a product is the weight, determined by the Commissioner, of the ODCs used as materials in the manufacture of the product under the predominant method of manufacturing. Efile state taxes The ODC weight is listed in Part II in pounds per single unit of product unless otherwise specified. Efile state taxes Modifying the table. Efile state taxes   A manufacturer or importer of a product may request the IRS add a product and its ODC weight to the table. Efile state taxes They also may request the IRS remove a product from the table, or change or specify the ODC weight of a product. Efile state taxes To request a modification, see Regulations section 52. Efile state taxes 4682-3(g) for the mailing address and information that must be included in the request. Efile state taxes Floor Stocks Tax Tax is imposed on any ODC held (other than by the manufacturer or importer of the ODC) on January 1 for sale or use in further manufacturing. Efile state taxes The person holding title (as determined under local law) to the ODC is liable for the tax, whether or not delivery has been made. Efile state taxes These chemicals are taxable without regard to the type or size of storage container in which the ODCs are held. Efile state taxes The tax may apply to an ODC whether it is in a 14-ounce can or a 30-pound tank. Efile state taxes You are liable for the floor stocks tax if you hold any of the following on January 1. Efile state taxes At least 400 pounds of ODCs other than halons or methyl chloroform, At least 50 pounds of halons, or At least 1,000 pounds of methyl chloroform. Efile state taxes If you are liable for the tax, prepare an inventory on January 1 of the taxable ODCs held on that date for sale or for use in further manufacturing. Efile state taxes You must pay this floor stocks tax by June 30 of each year. Efile state taxes Report the tax on Form 6627 and Part II of Form 720 for the second calendar quarter. Efile state taxes For the tax rates, see the Form 6627 instructions. Efile state taxes ODCs not subject to floor stocks tax. Efile state taxes   The floor stocks tax is not imposed on any of the following ODCs. Efile state taxes ODCs mixed with other ingredients that contribute to achieving the purpose for which the mixture will be used, unless the mixture contains only ODCs and one or more stabilizers. Efile state taxes ODCs contained in a manufactured article in which the ODCs will be used for their intended purpose without being released from the article. Efile state taxes ODCs that have been reclaimed or recycled. Efile state taxes ODCs sold in a qualifying sale for: Use as a feedstock, Export, or Use as a propellant in a metered-dose inhaler. Efile state taxes Prev  Up  Next   Home   More Online Publications