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

1. Get Answers

Your online questions are customized to your unique tax situation.

2. Maximize your Refund

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

3. E-File for FREE

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

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

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

File A 2011 Tax Return Online

Free Tax ComFiling Taxes Previous YearsFile Taxes For 20101040 Ez InstructionsH And R Block 2012 Tax ReturnHow To Fill Out 1040ez 2012Turbo Tax For MilitarySc Tax Forms 1040ezH And R Block FreeIrs Ez Form 2011File My 2010 Taxes FreeFree Turbo Tax FilingH&r Block 1040ezHow To Fill Out 1040ezHow To File State Income TaxHow To Do An Amended Tax ReturnH & R BlockFile State Return Only2007 Tax Return FormsFree State Taxes And Federal2011 Tax Tables FederalCan I File 1040ez OnlineFile 2011 Federal Tax ReturnAmend My Federal Tax ReturnFile 2011 Tax ReturnTax Preparation SoftwareIrs 1040ez FormsTax Return 2011Free Tax Filing 2012Military Tax DeductionsCan I Fill 2010 Taxes This YearHow To File Your State Taxes For FreeQuicktax2013 Tax Form 1040ez1040nr InstructionsFree File 2011 Tax ReturnColorado Amended Tax Return 2011File 2011 Taxes For FreeCan You E File 1040xTax Form 1040nr

File A 2011 Tax Return Online

File a 2011 tax return online 6. File a 2011 tax return online   Basis of Assets Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: Cost BasisReal Property Allocating the Basis Uniform Capitalization Rules Adjusted BasisIncreases to Basis Decreases to Basis Basis Other Than CostTaxable Exchanges Involuntary Conversions Nontaxable Exchanges Property Received as a Gift Property Transferred From a Spouse Inherited Property Property Distributed From a Partnership or Corporation Introduction Your basis is the amount of your investment in property for tax purposes. File a 2011 tax return online Use basis to figure the gain or loss on the sale, exchange, or other disposition of property. File a 2011 tax return online Also use basis to figure depreciation, amortization, depletion, and casualty losses. File a 2011 tax return online If you use property for both business or investment purposes and for personal purposes, you must allocate the basis based on the use. File a 2011 tax return online Only the basis allocated to the business or investment use of the property can be depreciated. File a 2011 tax return online Your original basis in property is adjusted (increased or decreased) by certain events. File a 2011 tax return online For example, if you make improvements to the property, increase your basis. File a 2011 tax return online If you take deductions for depreciation, or casualty losses, or claim certain credits, reduce your basis. File a 2011 tax return online Keep accurate records of all items that affect the basis of your assets. File a 2011 tax return online For information on keeping records, see chapter 1. File a 2011 tax return online Topics - This chapter discusses: Cost basis Adjusted basis Basis other than cost Useful Items - You may want to see: Publication 535 Business Expenses 544 Sales and Other Dispositions of Assets 551 Basis of Assets 946 How To Depreciate Property See chapter 16 for information about getting publications and forms. File a 2011 tax return online Cost Basis The basis of property you buy is usually its cost. File a 2011 tax return online Cost is the amount you pay in cash, debt obligations, other property, or services. File a 2011 tax return online Your cost includes amounts you pay for sales tax, freight, installation, and testing. File a 2011 tax return online The basis of real estate and business assets will include other items, discussed later. File a 2011 tax return online Basis generally does not include interest payments. File a 2011 tax return online However, see Carrying charges and Capitalized interest in chapter 4 of Publication 535. File a 2011 tax return online You also may have to capitalize (add to basis) certain other costs related to buying or producing property. File a 2011 tax return online Under the uniform capitalization rules, discussed later, you may have to capitalize direct costs and certain indirect costs of producing property. File a 2011 tax return online Loans with low or no interest. File a 2011 tax return online   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 the amount considered to be unstated interest. File a 2011 tax return online You generally have unstated interest if your interest rate is less than the applicable federal rate. File a 2011 tax return online See the discussion of unstated interest in Publication 537, Installment Sales. File a 2011 tax return online Real Property Real property, also called real estate, is land and generally anything built on, growing on, or attached to land. File a 2011 tax return online If you buy real property, certain fees and other expenses you pay are part of your cost basis in the property. File a 2011 tax return online Some of these expenses are discussed next. File a 2011 tax return online Lump sum purchase. File a 2011 tax return online   If you buy improvements, such as buildings, and the land on which they stand for a lump sum, allocate your cost basis between the land and improvements. File a 2011 tax return online Allocate the cost basis according to the respective fair market values (FMVs) of the land and improvements at the time of purchase. File a 2011 tax return online Figure the basis of each asset by multiplying the lump sum by a fraction. File a 2011 tax return online The numerator is the FMV of that asset and the denominator is the FMV of the whole property at the time of purchase. File a 2011 tax return online Fair market value (FMV). File a 2011 tax return online   FMV is the price at which 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 necessary facts. File a 2011 tax return online Sales of similar property on or about the same date may help in figuring the FMV of the property. File a 2011 tax return online If you are not certain of the FMV of the land and improvements, you can allocate the basis according to their assessed values for real estate tax purposes. File a 2011 tax return online Real estate taxes. File a 2011 tax return online   If you pay the 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. File a 2011 tax return online   If you reimburse the seller for taxes the seller paid for you, you generally can deduct that amount as a tax expense. File a 2011 tax return online Whether or not you reimburse the seller, do not include that amount in the basis of your property. File a 2011 tax return online Settlement costs. File a 2011 tax return online   Your basis includes the settlement fees and closing costs for buying the property. File a 2011 tax return online See Publication 551 for a detailed list of items you can and cannot include in basis. File a 2011 tax return online   Do not include fees and costs for getting a loan on the property. File a 2011 tax return online Also, do not include amounts placed in escrow for the future payment of items such as taxes and insurance. File a 2011 tax return online Points. File a 2011 tax return online   If you pay points to get a loan (including a mortgage, second mortgage, or line-of-credit), do not add the points to the basis of the related property. File a 2011 tax return online You may be able to deduct the points currently or over the term of the loan. File a 2011 tax return online For more information about deducting points, see Points in chapter 4 of Publication 535. File a 2011 tax return online Assumption of a mortgage. File a 2011 tax return online   If you buy property and assume (or buy the property subject to) an existing mortgage, your basis includes the amount you pay for the property plus the amount you owe on the mortgage. File a 2011 tax return online Example. File a 2011 tax return online If you buy a farm for $100,000 cash and assume a mortgage of $400,000, your basis is $500,000. File a 2011 tax return online Constructing assets. File a 2011 tax return online   If you build property or have assets built for you, your expenses for this construction are part of your basis. File a 2011 tax return online Some of these expenses include the following costs: Land, Labor and materials, Architect's fees, Building permit charges, Payments to contractors, Payments for rental equipment, and Inspection fees. File a 2011 tax return online   In addition, if you use your own employees, farm materials, and equipment to build an asset, do not deduct the following expenses. File a 2011 tax return online You must capitalize them (include them in the asset's basis). File a 2011 tax return online Employee wages paid for the construction work, reduced by any employment credits allowed. File a 2011 tax return online Depreciation on equipment you own while it is used in the construction. File a 2011 tax return online Operating and maintenance costs for equipment used in the construction. File a 2011 tax return online The cost of business supplies and materials used in the construction. File a 2011 tax return online    Do not include the value of your own labor, or any other labor you did not pay for, in the basis of any property you construct. File a 2011 tax return online Allocating the Basis In some instances, the rules for determining basis apply to a group of assets acquired in the same transaction or to property that consists of separate items. File a 2011 tax return online To determine the basis of these assets or separate items, there must be an allocation of basis. File a 2011 tax return online Group of assets acquired. File a 2011 tax return online   If you buy multiple assets for a lump sum, allocate the amount you pay among the assets. File a 2011 tax return online Use this allocation to figure your basis for depreciation and gain or loss on a later disposition of any of these assets. File a 2011 tax return online You and the seller may agree in the sales contract to a specific allocation of the purchase price among the assets. File a 2011 tax return online If this allocation is based on the value of each asset and you and the seller have adverse tax interests, the allocation generally will be accepted. File a 2011 tax return online Farming business acquired. File a 2011 tax return online   If you buy a group of assets that makes up a farming business, there are special rules you must use to allocate the purchase price among the assets. File a 2011 tax return online Generally, reduce the purchase price by any cash received. File a 2011 tax return online Allocate the remaining purchase price to the other business assets received in proportion to (but not more than) their FMV and in a certain order. File a 2011 tax return online See Trade or Business Acquired under Allocating the Basis in Publication 551 for more information. File a 2011 tax return online Transplanted embryo. File a 2011 tax return online   If you buy a cow that is pregnant with a transplanted embryo, allocate to the basis of the cow the part of the purchase price equal to the FMV of the cow without the implant. File a 2011 tax return online Allocate the rest of the purchase price to the basis of the calf. File a 2011 tax return online Neither the cost allocated to the cow nor the cost allocated to the calf is deductible as a current business expense. File a 2011 tax return online Uniform Capitalization Rules Under the uniform capitalization rules, you must include certain direct and indirect costs in the basis of property you produce or in your inventory costs, rather than claim them as a current deduction. File a 2011 tax return online You recover these costs through depreciation, amortization, or cost of goods sold when you use, sell, or otherwise dispose of the property. File a 2011 tax return online Generally, you are subject to the uniform capitalization rules if you do any of the following: Produce real or tangible personal property, or Acquire property for resale. File a 2011 tax return online However, this rule does not apply to personal property if your average annual gross receipts for the 3-tax-year period ending with the year preceding the current tax year are $10 million or less. File a 2011 tax return online You produce property if you construct, build, install, manufacture, develop, improve, or create the property. File a 2011 tax return online You are not subject to the uniform capitalization rules if the property is produced for personal use. File a 2011 tax return online In a farming business, you produce property if you raise or grow any agricultural or horticultural commodity, including plants and animals. File a 2011 tax return online Plants. File a 2011 tax return online   A plant produced in a farming business includes the following items: A fruit, nut, or other crop-bearing tree; An ornamental tree; A vine; A bush; Sod; and The crop or yield of a plant that will have more than one crop or yield. File a 2011 tax return online Animals. File a 2011 tax return online   An animal produced in a farming business includes any stock, poultry or other bird, and fish or other sea life. File a 2011 tax return online The direct and indirect costs of producing plants or animals include preparatory costs and preproductive period costs. File a 2011 tax return online Preparatory costs include the acquisition costs of the seed, seedling, plant, or animal. File a 2011 tax return online For plants, preproductive period costs include the costs of items such as irrigation, pruning, frost protection, spraying, and harvesting. File a 2011 tax return online For animals, preproductive period costs include the costs of items such as feed, maintaining pasture or pen areas, breeding, veterinary services, and bedding. File a 2011 tax return online Exceptions. File a 2011 tax return online   In a farming business, the uniform capitalization rules do not apply to: Any animal, Any plant with a preproductive period of 2 years or less, or Any costs of replanting certain plants lost or damaged due to casualty. File a 2011 tax return online   Exceptions (1) and (2) do not apply to a corporation, partnership, or tax shelter required to use an accrual method of accounting. File a 2011 tax return online See Accrual Method Required under Accounting Methods in chapter 2. File a 2011 tax return online   In addition, you can elect not to use the uniform capitalization rules for plants with a preproductive period of more than 2 years. File a 2011 tax return online If you make this election, special rules apply. File a 2011 tax return online This election cannot be made by a corporation, partnership, or tax shelter required to use an accrual method of accounting. File a 2011 tax return online This election also does not apply to any costs incurred for the planting, cultivation, maintenance, or development of any citrus or almond grove (or any part thereof) within the first 4 years the trees were planted. File a 2011 tax return online    If you elect not to use the uniform capitalization rules, you must use the alternative depreciation system for all property used in any of your farming businesses and placed in service in any tax year during which the election is in effect. File a 2011 tax return online See chapter 7, for additional information on depreciation. File a 2011 tax return online Example. File a 2011 tax return online You grow trees that have a preproductive period of more than 2 years. File a 2011 tax return online The trees produce an annual crop. File a 2011 tax return online You are an individual and the uniform capitalization rules apply to your farming business. File a 2011 tax return online You must capitalize the direct costs and an allocable part of indirect costs incurred due to the production of the trees. File a 2011 tax return online You are not required to capitalize the costs of producing the annual crop because its preproductive period is 2 years or less. File a 2011 tax return online Preproductive period of more than 2 years. File a 2011 tax return online   The preproductive period of plants grown in commercial quantities in the United States is based on their nationwide weighted average preproductive period. File a 2011 tax return online Plants producing the crops or yields shown in Table 6-1 have a nationwide weighted average preproductive period of more than 2 years. File a 2011 tax return online Other plants (not shown in Table 6-1) may also have a nationwide weighted average preproductive period of more than 2 years. File a 2011 tax return online More information. File a 2011 tax return online   For more information on the uniform capitalization rules that apply to property produced in a farming business, see Regulations section 1. File a 2011 tax return online 263A-4. File a 2011 tax return online Table 6-1. File a 2011 tax return online Plants With a Preproductive Period of More Than 2 Years Plants producing the following crops or yields have a nationwide weighted average preproductive period of more than 2 years. File a 2011 tax return online Almonds Apples Apricots Avocados Blueberries Cherries Chestnuts Coffee beans Currants Dates Figs Grapefruit Grapes Guavas Kiwifruit Kumquats Lemons Limes Macadamia nuts Mangoes Nectarines Olives Oranges Peaches Pears Pecans Persimmons Pistachio nuts Plums Pomegranates Prunes Tangelos Tangerines Tangors Walnuts 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 to the cost basis or basis other than cost (discussed later) of the property. File a 2011 tax return online The adjustments to the original basis are increases or decreases to the cost basis or other basis which result in the adjusted basis of the property. File a 2011 tax return online Increases to Basis Increase the basis of any property by all items properly added to a capital account. File a 2011 tax return online These include the cost of any improvements having a useful life of more than 1 year. File a 2011 tax return online The following costs increase the basis of property. File a 2011 tax return online The cost of extending utility service lines to property. File a 2011 tax return online Legal fees, such as the cost of defending and perfecting title. File a 2011 tax return online Legal fees for seeking a decrease in an assessment levied against property to pay for local improvements. File a 2011 tax return online Assessments for items such as paving roads and building ditches that increase the value of the property assessed. File a 2011 tax return online Do not deduct these expenses as taxes. File a 2011 tax return online However, you can deduct as taxes amounts assessed for maintenance or repairs, or for meeting interest charges related to the improvements. File a 2011 tax return online If you make additions or improvements to business property, depreciate the basis of each addition or improvement as separate depreciable property using the rules that would apply to the original property if you had placed it in service at the same time you placed the addition or improvement in service. File a 2011 tax return online See chapter 7. File a 2011 tax return online Deducting vs. File a 2011 tax return online capitalizing costs. File a 2011 tax return online   Do not add to your basis costs you can deduct as current expenses. File a 2011 tax return online For example, amounts paid for incidental repairs or maintenance are deductible as business expenses and are not added to basis. File a 2011 tax return online However, you can elect either to deduct or to capitalize certain other costs. File a 2011 tax return online See chapter 7 in Publication 535. File a 2011 tax return online Decreases to Basis The following are some items that reduce the basis of property. File a 2011 tax return online Section 179 deduction. File a 2011 tax return online Deductions previously allowed or allowable for amortization, depreciation, and depletion. File a 2011 tax return online Alternative motor vehicle credit. File a 2011 tax return online See Form 8910. File a 2011 tax return online Alternative fuel vehicle refueling property credit. File a 2011 tax return online See Form 8911. File a 2011 tax return online Residential energy efficient property credits. File a 2011 tax return online See Form 5695. File a 2011 tax return online Investment credit (part or all) taken. File a 2011 tax return online Casualty and theft losses and insurance reimbursements. File a 2011 tax return online Payments you receive for granting an easement. File a 2011 tax return online Exclusion from income of subsidies for energy conservation measures. File a 2011 tax return online Certain canceled debt excluded from income. File a 2011 tax return online Rebates from a manufacturer or seller. File a 2011 tax return online Patronage dividends received from a cooperative association as a result of a purchase of property. File a 2011 tax return online See Patronage Dividends in chapter 3. File a 2011 tax return online Gas-guzzler tax. File a 2011 tax return online See Form 6197. File a 2011 tax return online Some of these items are discussed next. File a 2011 tax return online For a more detailed list of items that decrease basis, see section 1016 of the Internal Revenue Code and Publication 551. File a 2011 tax return online Depreciation and section 179 deduction. File a 2011 tax return online   The adjustments you must make to the basis of the property if you take the section 179 deduction or depreciate the property are explained next. File a 2011 tax return online For more information on these deductions, see chapter 7. File a 2011 tax return online Section 179 deduction. File a 2011 tax return online   If you take the section 179 expense deduction for all or part of the cost of qualifying business property, decrease the basis of the property by the deduction. File a 2011 tax return online Depreciation. File a 2011 tax return online   Decrease the basis of property by the depreciation you deducted or could have deducted on your tax returns under the method of depreciation you chose. File a 2011 tax return online If you took less depreciation than you could have under the method chosen, decrease the basis by the amount you could have taken under that method. File a 2011 tax return online If you did not take a depreciation deduction, reduce the basis by the full amount of the depreciation you could have taken. File a 2011 tax return online   If you deducted more depreciation than you should have, decrease your basis by the amount you should have deducted plus the part of the excess depreciation you deducted that actually reduced your tax liability for any year. File a 2011 tax return online   See chapter 7 for information on figuring the depreciation you should have claimed. File a 2011 tax return online   In decreasing your basis for depreciation, take into account the amount deducted on your tax returns as depreciation and any depreciation you must capitalize under the uniform capitalization rules. File a 2011 tax return online Casualty and theft losses. File a 2011 tax return online   If you have a casualty or theft loss, decrease the basis of the property by any insurance or other reimbursement. File a 2011 tax return online Also, decrease it by any deductible loss not covered by insurance. File a 2011 tax return online See chapter 11 for information about figuring your casualty or theft loss. File a 2011 tax return online   You must increase your basis in the property by the amount you spend on clean-up costs (such as debris removal) and repairs that restore the property to its pre-casualty condition. File a 2011 tax return online To make this determination, compare the repaired property to the property before the casualty. File a 2011 tax return online Easements. File a 2011 tax return online   The amount you receive for granting an easement is usually considered to be proceeds from the sale of an interest in the real property. File a 2011 tax return online It reduces the basis of the affected part of the property. File a 2011 tax return online 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. File a 2011 tax return online See Easements and rights-of-way in chapter 3. File a 2011 tax return online Exclusion from income of subsidies for energy conservation measures. File a 2011 tax return online   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. File a 2011 tax return online Reduce the basis of the property by the excluded amount. File a 2011 tax return online Canceled debt excluded from income. File a 2011 tax return online   If a debt you owe is canceled or forgiven, other than as a gift or bequest, you generally must include the canceled amount in your gross income for tax purposes. File a 2011 tax return online A debt includes any indebtedness for which you are liable or which attaches to property you hold. File a 2011 tax return online   You can exclude your canceled debt from income if the debt is any of the following. File a 2011 tax return online Debt canceled in a bankruptcy case or when you are insolvent. File a 2011 tax return online Qualified farm debt. File a 2011 tax return online Qualified real property business debt (provided you are not a C corporation). File a 2011 tax return online Qualified principal residence indebtedness. File a 2011 tax return online Discharge of certain indebtedness of a qualified individual because of Midwestern disasters. File a 2011 tax return online If you exclude canceled debt described in (1) or (2), you may have to reduce the basis of your depreciable and nondepreciable property. File a 2011 tax return online If you exclude canceled debt described in (3), you must only reduce the basis of your depreciable property by the excluded amount. File a 2011 tax return online   For more information about canceled debt in a bankruptcy case, see Publication 908, Bankruptcy Tax Guide. File a 2011 tax return online For more information about insolvency and canceled debt that is qualified farm debt or qualified principal residence indebtedness, see chapter 3. File a 2011 tax return online For more information about qualified real property business debt, see Publication 334, Tax Guide for Small Business. File a 2011 tax return online For more information about canceled debt in Midwestern disaster areas, see Publication 4492-B, Information for Affected Taxpayers in the Midwestern Disaster Areas. File a 2011 tax return online Basis Other Than Cost There are times when you cannot use cost as basis. File a 2011 tax return online In these situations, the fair market value or the adjusted basis of property may be used. File a 2011 tax return online Examples are discussed next. File a 2011 tax return online Property changed from personal to business or rental use. File a 2011 tax return online   When you hold property for personal use and then change it to business use or use it to produce rent, you must figure its basis for depreciation. File a 2011 tax return online An example of changing property from personal to business use would be changing the use of your pickup truck that you originally purchased for your personal use to use in your farming business. File a 2011 tax return online   The basis for depreciation is the lesser of: The FMV of the property on the date of the change, or Your adjusted basis on the date of the change. File a 2011 tax return online   If you later sell or dispose of this property, the basis you use will depend on whether you are figuring a gain or loss. File a 2011 tax return online The basis for figuring a gain is your adjusted basis in the property when you sell the property. File a 2011 tax return online 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. File a 2011 tax return online Then make adjustments (increases and decreases) for the period after the change in the property's use, as discussed earlier under Adjusted Basis . File a 2011 tax return online Property received for services. File a 2011 tax return online   If you receive property for services, include the property's FMV in income. File a 2011 tax return online The amount you include in income becomes your basis. File a 2011 tax return online 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. File a 2011 tax return online Example. File a 2011 tax return online George Smith is an accountant and also operates a farming business. File a 2011 tax return online George agreed to do some accounting work for his neighbor in exchange for a dairy cow. File a 2011 tax return online The accounting work and the cow are each worth $1,500. File a 2011 tax return online George must include $1,500 in income for his accounting services. File a 2011 tax return online George's basis in the cow is $1,500. File a 2011 tax return online Taxable Exchanges A taxable exchange is one in which the gain is taxable, or the loss is deductible. File a 2011 tax return online A taxable gain or deductible loss also is known as a recognized gain or loss. File a 2011 tax return online A taxable exchange occurs when you receive cash or get property that is not similar or related in use to the property exchanged. File a 2011 tax return online 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. File a 2011 tax return online Example. File a 2011 tax return online You trade a tract of farmland with an adjusted basis of $2,000 for a tractor that has an FMV of $6,000. File a 2011 tax return online You must report a taxable gain of $4,000 for the land. File a 2011 tax return online The tractor has a basis of $6,000. File a 2011 tax return online Involuntary Conversions If you receive property as a result of an involuntary conversion, such as a casualty, theft, or condemnation, figure the basis of the replacement property you receive using the basis of the converted property. File a 2011 tax return online Similar or related property. File a 2011 tax return online   If the replacement property is similar or related in service or use to the converted property, the replacement property's basis is the same as the old property's basis on the date of the conversion. File a 2011 tax return online However, make the following adjustments. File a 2011 tax return online Decrease the basis by the following amounts. File a 2011 tax return online Any loss you recognize on the involuntary conversion. File a 2011 tax return online Any money you receive that you do not spend on similar property. File a 2011 tax return online Increase the basis by the following amounts. File a 2011 tax return online Any gain you recognize on the involuntary conversion. File a 2011 tax return online Any cost of acquiring the replacement property. File a 2011 tax return online Money or property not similar or related. File a 2011 tax return online   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 involuntary conversion. File a 2011 tax return online Allocating the basis. File a 2011 tax return online   If you buy more than one piece of replacement property, allocate your basis among the properties based on their respective costs. File a 2011 tax return online Basis for depreciation. File a 2011 tax return online   Special rules apply in determining and depreciating the basis of MACRS property acquired in an involuntary conversion. File a 2011 tax return online For information, see Figuring the Deduction for Property Acquired in a Nontaxable Exchange under Figuring Depreciation Under MACRS in chapter 7. File a 2011 tax return online For more information about involuntary conversions, see chapter 11. File a 2011 tax return online Nontaxable Exchanges A nontaxable exchange is an exchange in which you are not taxed on any gain and you cannot deduct any loss. File a 2011 tax return online A nontaxable gain or loss also is known as an unrecognized gain or loss. File a 2011 tax return online If you receive property in a nontaxable exchange, its basis is usually the same as the basis of the property you transferred. File a 2011 tax return online Like-Kind Exchanges The exchange of property for the same kind of property is the most common type of nontaxable exchange. File a 2011 tax return online For an exchange to qualify as a like-kind exchange, you must hold for business or investment purposes both the property you transfer and the property you receive. File a 2011 tax return online There must also be an exchange of like-kind property. File a 2011 tax return online For more information, see Like-Kind Exchanges in  chapter 8. File a 2011 tax return online The basis of the property you receive generally is the same as the adjusted basis of the property you gave up. File a 2011 tax return online Example 1. File a 2011 tax return online You traded a truck you used in your farming business for a new smaller truck to use in farming. File a 2011 tax return online The adjusted basis of the old truck was $10,000. File a 2011 tax return online The FMV of the new truck is $30,000. File a 2011 tax return online Because this is a nontaxable exchange, you do not recognize any gain, and your basis in the new truck is $10,000, the same as the adjusted basis of the truck you traded. File a 2011 tax return online Example 2. File a 2011 tax return online You trade a field cultivator (adjusted basis of $8,000) for a planter (FMV of $9,000). File a 2011 tax return online You use both the field cultivator and the planter in your farming business. File a 2011 tax return online The basis of the planter you receive is $8,000, the same as the field cultivator traded Exchange expenses. File a 2011 tax return online   Exchange expenses generally are the closing costs that you pay. File a 2011 tax return online They include such items as brokerage commissions, attorney fees, and deed preparation fees. File a 2011 tax return online Add them to the basis of the like-kind property you receive. File a 2011 tax return online Property plus cash. File a 2011 tax return online   If you trade property in a like-kind exchange and also pay money, the basis of the property you receive is the adjusted basis of the property you gave up plus the money you paid. File a 2011 tax return online Example. File a 2011 tax return online You trade in a truck (adjusted basis of $3,000) for another truck (FMV of $7,500) and pay $4,000. File a 2011 tax return online Your basis in the new truck is $7,000 (the $3,000 adjusted basis of the old truck plus the $4,000 cash). File a 2011 tax return online Special rules for related persons. File a 2011 tax return online   If a like-kind exchange takes place directly or indirectly between related persons and either party disposes of the property within 2 years after the exchange, the exchange no longer qualifies for like-kind exchange treatment. File a 2011 tax return online Each person must report any gain or loss not recognized on the original exchange unless the loss is not deductible under the related party rules. File a 2011 tax return online Each person reports it on the tax return filed for the year in which the later disposition occurred. File a 2011 tax return online If this rule applies, the basis of the property received in the original exchange will be its FMV. File a 2011 tax return online For more information, see chapter 8. File a 2011 tax return online Exchange of business property. File a 2011 tax return online   Exchanging the property of one business for the property of another business generally is a multiple property exchange. File a 2011 tax return online For information on figuring basis, see Multiple Property Exchanges in chapter 1 of Publication 544. File a 2011 tax return online Basis for depreciation. File a 2011 tax return online   Special rules apply in determining and depreciating the basis of MACRS property acquired in a like-kind transaction. File a 2011 tax return online For information, see Figuring the Deduction for Property Acquired in a Nontaxable Exchange under Figuring Depreciation Under MACRS in chapter 7. File a 2011 tax return online Partially Nontaxable Exchanges A partially nontaxable exchange is an exchange in which you receive unlike property or money in addition to like-kind property. File a 2011 tax return online The basis of the property you receive is the same as the adjusted basis of the property you gave up with the following adjustments. File a 2011 tax return online Decrease the basis by the following amounts. File a 2011 tax return online Any money you receive. File a 2011 tax return online Any loss you recognize on the exchange. File a 2011 tax return online Increase the basis by the following amounts. File a 2011 tax return online Any additional costs you incur. File a 2011 tax return online Any gain you recognize on the exchange. File a 2011 tax return online If the other party to the exchange assumes your liabilities, treat the debt assumption as money you received in the exchange. File a 2011 tax return online Example 1. File a 2011 tax return online You trade farmland (basis of $100,000) for another tract of farmland (FMV of $110,000) and $30,000 cash. File a 2011 tax return online You realize a gain of $40,000. File a 2011 tax return online This is the FMV of the land received plus the cash minus the basis of the land you traded ($110,000 + $30,000 − $100,000). File a 2011 tax return online Include your gain in income (recognize gain) only to the extent of the cash received. File a 2011 tax return online Your basis in the land you received is figured as follows. File a 2011 tax return online Basis of land traded $100,000 Minus: Cash received (adjustment 1(a)) − 30,000   $70,000 Plus: Gain recognized (adjustment 2(b)) + 30,000 Basis of land received $100,000 Example 2. File a 2011 tax return online You trade a truck (adjusted basis of $22,750) for another truck (FMV of $20,000) and $10,000 cash. File a 2011 tax return online You realize a gain of $7,250. File a 2011 tax return online This is the FMV of the truck received plus the cash minus the adjusted basis of the truck you traded ($20,000 + $10,000 − $22,750). File a 2011 tax return online You include all the gain in your income (recognize gain) because the gain is less than the cash you received. File a 2011 tax return online Your basis in the truck you received is figured as follows. File a 2011 tax return online Adjusted basis of truck traded $22,750 Minus: Cash received (adjustment 1(a)) −10,000   $12,750 Plus: Gain recognized (adjustment 2(b)) + 7,250 Basis of truck received $20,000 Allocation of basis. File a 2011 tax return online   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. File a 2011 tax return online The rest is the basis of the like-kind property. File a 2011 tax return online Example. File a 2011 tax return online You traded a tractor with an adjusted basis of $15,000 for another tractor that had an FMV of $12,500. File a 2011 tax return online You also received $1,000 cash and a truck that had an FMV of $3,000. File a 2011 tax return online The truck is unlike property. File a 2011 tax return online You realized a gain of $1,500. File a 2011 tax return online This is the FMV of the tractor received plus the FMV of the truck received plus the cash minus the adjusted basis of the tractor you traded ($12,500 + $3,000 + $1,000 − $15,000). File a 2011 tax return online You include in income (recognize) all $1,500 of the gain because it is less than the FMV of the unlike property plus the cash received. File a 2011 tax return online Your basis in the properties you received is figured as follows. File a 2011 tax return online Adjusted basis of old tractor $15,000 Minus: Cash received (adjustment 1(a)) − 1,000   $14,000 Plus: Gain recognized (adjustment 2(b)) + 1,500 Total basis of properties received $15,500 Allocate the total basis of $15,500 first to the unlike property—the truck ($3,000). File a 2011 tax return online This is the truck's FMV. File a 2011 tax return online The rest ($12,500) is the basis of the tractor. File a 2011 tax return online Sale and Purchase If you sell property and buy similar property in two mutually dependent transactions, you may have to treat the sale and purchase as a single nontaxable exchange. File a 2011 tax return online Example. File a 2011 tax return online You used a tractor on your farm for 3 years. File a 2011 tax return online Its adjusted basis is $22,000 and its FMV is $40,000. File a 2011 tax return online You are interested in a new tractor, which sells for $60,000. File a 2011 tax return online Ordinarily, you would trade your old tractor for the new one and pay the dealer $20,000. File a 2011 tax return online Your basis for depreciating the new tractor would then be $42,000 ($20,000 + $22,000, the adjusted basis of your old tractor). File a 2011 tax return online However, you want a higher basis for depreciating the new tractor, so you agree to pay the dealer $60,000 for the new tractor if he will pay you $40,000 for your old tractor. File a 2011 tax return online Because the two transactions are dependent on each other, you are treated as having exchanged your old tractor for the new one and paid $20,000 ($60,000 − $40,000). File a 2011 tax return online Your basis for depreciating the new tractor is $42,000, the same as if you traded the old tractor. File a 2011 tax return online Property Received as a Gift To figure the basis of property you receive as a gift, you must know its adjusted basis (defined earlier) to the donor just before it was given to you. File a 2011 tax return online You also must know its FMV at the time it was given to you and any gift tax paid on it. File a 2011 tax return online FMV equal to or greater than donor's adjusted basis. File a 2011 tax return online   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 when you received the gift. File a 2011 tax return online Increase your basis by all or part of any gift tax paid, depending on the date of the gift. File a 2011 tax return online   Also, for figuring gain or loss from a sale or other disposition of the property, 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. File a 2011 tax return online See Adjusted Basis , earlier. File a 2011 tax return online   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. File a 2011 tax return online Figure the increase by multiplying the gift tax paid by the following fraction. File a 2011 tax return online Net increase in value of the gift Amount of the gift   The net increase in value of the gift is the FMV of the gift minus the donor's adjusted basis. File a 2011 tax return online 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. File a 2011 tax return online Example. File a 2011 tax return online In 2013, you received a gift of property from your mother that had an FMV of $50,000. File a 2011 tax return online Her adjusted basis was $20,000. File a 2011 tax return online The amount of the gift for gift tax purposes was $36,000 ($50,000 minus the $14,000 annual exclusion). File a 2011 tax return online She paid a gift tax of $7,320. File a 2011 tax return online Your basis, $26,076, is figured as follows. File a 2011 tax return online 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) × . File a 2011 tax return online 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. File a 2011 tax return online If you received a gift before 1977, your basis in the gift (the donor's adjusted basis) includes any gift tax paid on it. File a 2011 tax return online However, your basis cannot exceed the FMV of the gift when it was given to you. File a 2011 tax return online FMV less than donor's adjusted basis. File a 2011 tax return online   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. File a 2011 tax return online Your basis for figuring gain is the donor's adjusted basis plus or minus any required adjustments to basis while you held the property. File a 2011 tax return online 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. File a 2011 tax return online (See Adjusted Basis , earlier. File a 2011 tax return online )   If you use the donor's adjusted basis for figuring a gain and get a loss, and then use the FMV for figuring a loss and get a gain, you have neither gain nor loss on the sale or other disposition of the property. File a 2011 tax return online Example. File a 2011 tax return online You received farmland as a gift from your parents when they retired from farming. File a 2011 tax return online At the time of the gift, the land had an FMV of $80,000. File a 2011 tax return online Your parents' adjusted basis was $100,000. File a 2011 tax return online After you received the land, no events occurred that would increase or decrease your basis. File a 2011 tax return online If you sell the land for $120,000, you will have a $20,000 gain because you must use the donor's adjusted basis at the time of the gift ($100,000) as your basis to figure a gain. File a 2011 tax return online If you sell the land for $70,000, you will have a $10,000 loss because you must use the FMV at the time of the gift ($80,000) as your basis to figure a loss. File a 2011 tax return online If the sales price is between $80,000 and $100,000, you have neither gain nor loss. File a 2011 tax return online For instance, if the sales price was $90,000 and you tried to figure a gain using the donor's adjusted basis ($100,000), you would get a $10,000 loss. File a 2011 tax return online If you then tried to figure a loss using the FMV ($80,000), you would get a $10,000 gain. File a 2011 tax return online Business property. File a 2011 tax return online   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. File a 2011 tax return online 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. File a 2011 tax return online The same rule applies to a transfer by your former spouse if the transfer is incident to divorce. File a 2011 tax return online 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. File a 2011 tax return online 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. File a 2011 tax return online For more information, see Property Settlements in Publication 504, Divorced or Separated Individuals. File a 2011 tax return online 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. File a 2011 tax return online If a federal estate return is filed, you can use its appraised value. File a 2011 tax return online The FMV on the alternate valuation date, if the personal representative for the estate elects to use alternate valuation. File a 2011 tax return online For information on the alternate valuation, see the Instructions for Form 706. File a 2011 tax return online The decedent's adjusted basis in land to the extent of the value that is excluded from the decedent's taxable estate as a qualified conservation easement. File a 2011 tax return online 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. File a 2011 tax return online Special-use valuation method. File a 2011 tax return online   Under certain conditions, when a person dies, the executor or personal representative of that person's estate may elect to value qualified real property at other than its FMV. File a 2011 tax return online If so, the executor or personal representative values the qualified real property based on its use as a farm or other closely held business. File a 2011 tax return online If the executor or personal representative elects this method of valuation for estate tax purposes, this value is the basis of the property for the qualified heirs. File a 2011 tax return online The qualified heirs should be able to get the necessary value from the executor or personal representative of the estate. File a 2011 tax return online   If you are a qualified heir who received special-use valuation property, increase your basis by any gain recognized by the estate or trust because of post-death appreciation. File a 2011 tax return online Post-death appreciation is the property's FMV on the date of distribution minus the property's FMV either on the date of the individual's death or on the alternate valuation date. File a 2011 tax return online Figure all FMVs without regard to the special-use valuation. File a 2011 tax return online   You may be liable for an additional estate tax if, within 10 years after the death of the decedent, you transfer the property or the property stops being used as a farm. File a 2011 tax return online This tax does not apply if you dispose of the property in a like-kind exchange or in an involuntary conversion in which all of the proceeds are reinvested in qualified replacement property. File a 2011 tax return online The tax also does not apply if you transfer the property to a member of your family and certain requirements are met. File a 2011 tax return online   You can elect to increase your basis in special-use valuation property if it becomes subject to the additional estate tax. File a 2011 tax return online To increase your basis, you must make an irrevocable election and pay interest on the additional estate tax figured from the date 9 months after the decedent's death until the date of payment of the additional estate tax. File a 2011 tax return online If you meet these requirements, increase your basis in the property to its FMV on the date of the decedent's death or the alternate valuation date. File a 2011 tax return online The increase in your basis is considered to have occurred immediately before the event that resulted in the additional estate tax. File a 2011 tax return online   You make the election by filing, with Form 706-A, United States Additional Estate Tax Return, a statement that: Contains your (and the estate's) name, address, and taxpayer identification number; Identifies the election as an election under section 1016(c) of the Internal Revenue Code; Specifies the property for which you are making the election; and Provides any additional information required by the Form 706-A instructions. File a 2011 tax return online   For more information, see Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return, Form 706-A, and the related instructions. File a 2011 tax return online Property inherited from a decedent who died in 2010. File a 2011 tax return online   If you inherited property from a decedent who died in 2010, different rules may apply. File a 2011 tax return online See Publication 4895, Tax Treatment of Property Acquired From a Decendent Dying in 2010, for details. File a 2011 tax return online Property Distributed From a Partnership or Corporation The following rules apply to determine a partner's basis and a shareholder's basis in property distributed respectively from a partnership to the partner with respect to the partner's interest in the partnership and from a corporation to the shareholder with respect to the shareholder's ownership of stock in the corporation. File a 2011 tax return online Partner's basis. File a 2011 tax return online   Unless there is a complete liquidation of a partner's interest, the basis of property (other than money) distributed by a partnership to the partner is its adjusted basis to the partnership immediately before the distribution. File a 2011 tax return online However, the basis of the property to the partner cannot be more than the adjusted basis of his or her interest in the partnership reduced by any money received in the same transaction. File a 2011 tax return online For more information, see Partner's Basis for Distributed Property in Publication 541, Partnerships. File a 2011 tax return online Shareholder's basis. File a 2011 tax return online   The basis of property distributed by a corporation to a shareholder is its fair market value. File a 2011 tax return online For more information about corporate distributions, see Distributions to Shareholders in Publication 542, Corporations. File a 2011 tax return online Prev  Up  Next   Home   More Online Publications
Print - Click this link to Print this page

Seniors & Retirees

1040 Central
1040 Central has been updated for the last few weeks of Filing Season 2014.

Tax Scams/Consumer Alerts
The IRS urges taxpayers not to fall victim to tax scams. If it sounds too good to be true, it probably is.

Tax Counseling for the Elderly
The Tax Counseling for the Elderly Program provides free tax help to people aged 60 and older.

Tips for Seniors in Preparing their Taxes
Check here for tips on common pitfalls for seniors to watch for when preparing their individual tax returns.

Life Events That May Have Tax Consequences for Seniors and Retirees
Some events in the lives of seniors and retirees may affect their tax responsibilities. This page contains links to more information.

Are Your Social Security Benefits Taxable?
How much, if any, of your social security benefits are taxable depends on your total income and marital status.

Frequently Asked Questions for Seniors
This page highlights places to go for answers to questions frequently asked by seniors.

Products for Older Americans
This page contains links to several IRS products of interest to older Americans.

Page Last Reviewed or Updated: 28-Mar-2014

The File A 2011 Tax Return Online

File a 2011 tax return online 4. File a 2011 tax return online   Filing U. File a 2011 tax return online S. File a 2011 tax return online Tax Returns Table of Contents Who Must FileFiling Requirement if Possession Income Is Excluded When To FileExtension of Time To File Where To File Special Rules for Completing Your U. File a 2011 tax return online S. File a 2011 tax return online Tax ReturnU. File a 2011 tax return online S. File a 2011 tax return online Armed Forces. File a 2011 tax return online Deductions if Possession Income Is Excluded Foreign Tax Credit if Possession Income Is Excluded Self-Employment Tax Additional Medicare Tax Net Investment Income Tax Paying Your TaxesEstimated Tax Double TaxationCompetent Authority Assistance The information in chapter 3 will tell you if a U. File a 2011 tax return online S. File a 2011 tax return online income tax return is required for your situation. File a 2011 tax return online If a U. File a 2011 tax return online S. File a 2011 tax return online return is required, your next step is to see if you meet the filing requirements. File a 2011 tax return online If you do meet the filing requirements, the information presented in this chapter will help you understand the special procedures involved. File a 2011 tax return online This chapter discusses: Filing requirements, When to file your return, Where to send your return, How to adjust your deductions and credits if you are excluding income from American Samoa or Puerto Rico, How to make estimated tax payments and pay self-employment tax, and How to request assistance in resolving instances of double taxation. File a 2011 tax return online Who Must File If you are not required to file a possession tax return that includes your worldwide income, you must generally file a U. File a 2011 tax return online S. File a 2011 tax return online income tax return if your gross income is at least the amount shown in Table 4-1, later, for your filing status and age. File a 2011 tax return online If you were a bona fide resident of American Samoa or Puerto Rico and are able to exclude your possession income from your U. File a 2011 tax return online S. File a 2011 tax return online tax return, your filing requirement may be less than the amount in Table 4-1. File a 2011 tax return online For details, see the information under Filing Requirement if Possession Income Is Excluded , later. File a 2011 tax return online Some individuals (such as those who can be claimed as a dependent on another person's return or who owe certain taxes, such as self-employment tax) must file a tax return even though the gross income is less than the amount shown in Table 4-1 for their filing status and age. File a 2011 tax return online For more information, see the Form 1040 instructions. File a 2011 tax return online Filing Requirement if Possession Income Is Excluded If you were a bona fide resident of American Samoa or Puerto Rico and qualify to exclude possession income on your U. File a 2011 tax return online S. File a 2011 tax return online tax return, you must determine your adjusted filing requirement. File a 2011 tax return online Generally, your filing requirement is based on the total of your (and your spouse's if filing a joint return) personal exemption(s) plus your standard deduction. File a 2011 tax return online Personal exemption. File a 2011 tax return online   When figuring your filing requirement, your personal exemption is allowed in full. File a 2011 tax return online Do not reduce it for this purpose. File a 2011 tax return online Do not include exemptions for your dependents. File a 2011 tax return online Allowable standard deduction. File a 2011 tax return online   Unless your filing status is married filing separately, the minimum income level at which you must file a return is based, in part, on the standard deduction for your filing status and age. File a 2011 tax return online Because the standard deduction applies to all types of income, it must be divided between your excluded income and income from other sources. File a 2011 tax return online Multiply the regular standard deduction for your filing status and age (this is zero if you are married filing a separate return; all others, see Form 1040 instructions) by the following fraction:      Gross income subject to U. File a 2011 tax return online S. File a 2011 tax return online income tax     Gross income from all sources (including excluded possession income)   Example. File a 2011 tax return online Barbara Spruce, a U. File a 2011 tax return online S. File a 2011 tax return online citizen, is single, under 65, and a bona fide resident of American Samoa. File a 2011 tax return online During 2013, she received $20,000 of income from American Samoa sources (qualifies for exclusion) and $8,000 of income from sources outside the possession (subject to U. File a 2011 tax return online S. File a 2011 tax return online income tax). File a 2011 tax return online Her allowable standard deduction for 2013 is figured as follows:   $8,000 $28,000 × $6,100 (regular standard deduction) = $1,743   Adjusted filing requirement. File a 2011 tax return online   Figure your adjusted filing requirement by adding the amount of your allowable standard deduction to the amount of your personal exemption. File a 2011 tax return online You must file a U. File a 2011 tax return online S. File a 2011 tax return online income tax return if your gross income is at least the amount shown on line 3 of the following worksheet. File a 2011 tax return online    1. File a 2011 tax return online Enter the allowable standard deduction you figured earlier under Allowable standard deduction . File a 2011 tax return online If your filing status is married filing separately, enter -0-   2. File a 2011 tax return online Personal exemption. File a 2011 tax return online If your filing status is married filing jointly, enter $7,800; if someone can claim you as a dependent, enter -0-; otherwise, enter $3,900   3. File a 2011 tax return online Add lines 1 and 2. File a 2011 tax return online You must file a U. File a 2011 tax return online S. File a 2011 tax return online income tax return if your gross income from sources outside the relevant possession is at least this amount   Table 4-1. File a 2011 tax return online 2013 Filing Requirements Chart for Most Taxpayers IF your filing status is. File a 2011 tax return online . File a 2011 tax return online . File a 2011 tax return online AND at the end of 2013 you were*. File a 2011 tax return online . File a 2011 tax return online . File a 2011 tax return online THEN file a return if your gross income** was at least. File a 2011 tax return online . File a 2011 tax return online . File a 2011 tax return online single under 65 $10,000 65 or older $11,500 married filing jointly*** under 65 (both spouses) $20,000 65 or older (one spouse) $21,200 65 or older (both spouses) $22,400 married filing separately any age $3,900 head of household under 65 $12,850 65 or older $14,350 qualifying widow(er)  with dependent child under 65 $16,100 65 or older $17,300 * If you were born on January 1, 1949, you are considered to be age 65 at the end of 2013. File a 2011 tax return online ** Gross income means all income you received in the form of money, goods, property, and services that is not exempt from tax, including any income from sources outside the United States (even if you can exclude part or all of it). File a 2011 tax return online Do not include social security benefits unless (a) you are married filing a separate return and you lived with your spouse at any time during 2013, or (b) one-half of your social security benefits plus your other gross income is more than $25,000 ($32,000 if married filing jointly). File a 2011 tax return online If (a) or (b) applies, see the instructions for Form 1040 or Publication 915, Social Security and Equivalent Railroad Retirement Benefits, to figure the taxable part of social security benefits you must include in gross income. File a 2011 tax return online *** If you did not live with your spouse at the end of 2013 (or on the date your spouse died) and your gross income was at least $3,900 you must file a return regardless of your age. File a 2011 tax return online Example 1. File a 2011 tax return online James and Joan Thompson, one over 65, are U. File a 2011 tax return online S. File a 2011 tax return online citizens and bona fide residents of Puerto Rico during the entire tax year. File a 2011 tax return online They file a joint income tax return. File a 2011 tax return online During 2013, they received $35,000 of income from Puerto Rico sources (qualifies for exclusion) and $6,000 of income from sources outside Puerto Rico (subject to U. File a 2011 tax return online S. File a 2011 tax return online income tax). File a 2011 tax return online Their allowable standard deduction for 2013 is figured as follows:   $6,000 $41,000 × $13,400 ( standard deduction for 65 or older (one spouse) ) = $1,961   The Thompsons do not have to file a U. File a 2011 tax return online S. File a 2011 tax return online income tax return because their gross income subject to U. File a 2011 tax return online S. File a 2011 tax return online tax ($6,000) is less than their allowable standard deduction plus their personal exemptions ($1,961+ $7,800= $9,761). File a 2011 tax return online Example 2. File a 2011 tax return online Barbara Spruce (see Example under Allowable standard deduction, earlier), however, must file a U. File a 2011 tax return online S. File a 2011 tax return online income tax return because her gross income subject to U. File a 2011 tax return online S. File a 2011 tax return online tax ($8,000) is more than her allowable standard deduction plus her personal exemption ($1,743 + $3,900 = $5,643). File a 2011 tax return online If you must file a U. File a 2011 tax return online S. File a 2011 tax return online income tax return, you may be able to file a paperless return using IRS e-file. File a 2011 tax return online See your form instructions or visit our website at IRS. File a 2011 tax return online gov. File a 2011 tax return online When To File If you file on a calendar year basis, the due date for filing your U. File a 2011 tax return online S. File a 2011 tax return online income tax return is April 15 following the end of your tax year. File a 2011 tax return online If you use a fiscal year (a year ending on the last day of a month other than December), the due date is the 15th day of the 4th month after the end of your fiscal year. File a 2011 tax return online If any due date falls on a Saturday, Sunday, or legal holiday, your tax return is due on the next business day. File a 2011 tax return online For your 2013 tax return, the due date is April 15, 2014. File a 2011 tax return online If you mail your federal tax return, it is considered timely if it bears an official postmark dated on or before the due date, including any extensions. File a 2011 tax return online If you use a private delivery service designated by the IRS, generally the postmark date is the date the private delivery service records in its database or marks on the mailing label. File a 2011 tax return online See your form instructions for a list of designated private delivery services. File a 2011 tax return online Extension of Time To File You can get an extension of time to file your U. File a 2011 tax return online S. File a 2011 tax return online income tax return. File a 2011 tax return online Special rules apply for those living outside the United States. File a 2011 tax return online Automatic 6-Month Extension If you cannot file your 2013 return by the due date, you can get an automatic 6-month extension of time to file. File a 2011 tax return online Example. File a 2011 tax return online If your return must be filed by April 15, 2014, you will have until October 15, 2014, to file. File a 2011 tax return online Although you are not required to make a payment of the tax you estimate as due, Form 4868 does not extend the time to pay taxes. File a 2011 tax return online If you do not pay the amount due by the regular due date (generally April 15), you will owe interest on any unpaid tax from the original due date to the date you pay the tax. File a 2011 tax return online You may also be charged penalties (see the Instructions for Form 4868). File a 2011 tax return online How to get the automatic extension. File a 2011 tax return online   You can get the automatic 6-month extension if you do one of the following by the due date for filing your return. File a 2011 tax return online E-file Form 4868 using your personal computer or a tax professional. File a 2011 tax return online E-file and pay by credit or debit card. File a 2011 tax return online Your payment must be at least $1. File a 2011 tax return online You may pay by phone or over the Internet. File a 2011 tax return online Do not file Form 4868. File a 2011 tax return online File a paper Form 4868. File a 2011 tax return online If you are a fiscal year taxpayer, you must file a paper Form 4868. File a 2011 tax return online See Form 4868 for information on getting an extension using these options. File a 2011 tax return online When to file. File a 2011 tax return online   You must request the automatic extension by the due date for your return. File a 2011 tax return online You can file your return any time before the 6-month extension period ends. File a 2011 tax return online When you file your return. File a 2011 tax return online   Enter any payment you made related to the extension of time to file on Form 1040, line 68. File a 2011 tax return online If you file Form 1040A, U. File a 2011 tax return online S. File a 2011 tax return online Individual Income Tax Return, or Form 1040EZ, Income Tax Return for Single and Joint Filers With No Dependents, include that payment in your total payments on Form 1040A, line 41, or Form 1040EZ, line 9. File a 2011 tax return online Also enter “Form 4868” and the amount paid in the space to the left of the entry space for line 41 or line 9. File a 2011 tax return online You cannot ask the Internal Revenue Service to figure your tax if you use the extension of time to file. File a 2011 tax return online Individuals Outside the United States and Puerto Rico You are allowed an automatic 2-month extension (until June 16, 2014, if you use the calendar year) to file your 2013 return and pay any federal income tax due if: You are a U. File a 2011 tax return online S. File a 2011 tax return online citizen or resident, and On the due date of your return: You are living outside of the United States and Puerto Rico, and your main place of business or post of duty is outside the United States and Puerto Rico, or You are in military or naval service on duty outside the United States and Puerto Rico. File a 2011 tax return online However, if you pay the tax due after the regular due date (generally April 15), interest will be charged from April 15 until the date the tax is paid. File a 2011 tax return online If you serve in a combat zone or qualified hazardous duty area, you may be eligible for a longer extension of time to file. File a 2011 tax return online For more information, see Publication 3, Armed Forces' Tax Guide. File a 2011 tax return online Married taxpayers. File a 2011 tax return online   If you file a joint return, only one spouse has to qualify for this automatic extension. File a 2011 tax return online However, if you and your spouse file separate returns, this automatic extension applies only to the spouse who qualifies. File a 2011 tax return online How to get the extension. File a 2011 tax return online   To use this special automatic extension, you must attach a statement to your return explaining what situation qualified you for the extension. File a 2011 tax return online (See the situations listed under (2), earlier. File a 2011 tax return online ) Extension beyond 2 months. File a 2011 tax return online   If you cannot file your 2013 return within the automatic 2-month extension period, you can get an additional 4-month extension, for a total of 6 months. File a 2011 tax return online File Form 4868 by the end of the automatic extension period (June 16, 2014 for calendar year taxpayers). File a 2011 tax return online Be sure to check the box on Form 4868, line 8, if appropriate. File a 2011 tax return online   In addition to this 6-month extension, taxpayers who are out of the country (as defined under (2) earlier) can request a discretionary 2-month additional extension of time to file their returns (to December 15 for calendar year taxpayers). File a 2011 tax return online   To request this extension, you must send the IRS a letter explaining the reasons why you need the additional 2 months. File a 2011 tax return online Send the letter by the extended due date (October 15 for calendar year taxpayers) to:  Department of the Treasury Internal Revenue Service Austin, TX 73301-0215 USA   You will not receive any notification from the IRS unless your request is denied for being untimely. File a 2011 tax return online Where To File Use the addresses listed below if you have to file Form 1040 with the United States and you are excluding possession income from American Samoa or Puerto Rico. File a 2011 tax return online If you are not including a check or a money order, send your U. File a 2011 tax return online S. File a 2011 tax return online tax return and all attachments to:   Department of the Treasury Internal Revenue Service Austin, TX 73301-0215 USA If you are including a check or a money order, send your U. File a 2011 tax return online S. File a 2011 tax return online tax return and all attachments to:  Internal Revenue Service P. File a 2011 tax return online O. File a 2011 tax return online Box 1303 Charlotte, NC 28201-1303 USA Also send your U. File a 2011 tax return online S. File a 2011 tax return online return to these addresses if you are attaching Form 5074 or Form 8689. File a 2011 tax return online If you are not in either of the above categories, send your return to the address shown in the Form 1040 instructions for the possession or state in which you reside. File a 2011 tax return online Special Rules for Completing Your U. File a 2011 tax return online S. File a 2011 tax return online Tax Return If you are not excluding possession income from your U. File a 2011 tax return online S. File a 2011 tax return online tax return, follow the instructions for the specific forms you file. File a 2011 tax return online However, you may not qualify to claim the earned income credit (EIC). File a 2011 tax return online Earned income credit. File a 2011 tax return online   Even if you maintain a household in one of the possessions discussed in this publication that is your main home and the home of your qualifying child, you cannot claim the earned income credit on your U. File a 2011 tax return online S. File a 2011 tax return online tax return. File a 2011 tax return online This credit is available only if you maintain the household in the United States or you are serving on extended active duty in the U. File a 2011 tax return online S. File a 2011 tax return online Armed Forces. File a 2011 tax return online U. File a 2011 tax return online S. File a 2011 tax return online Armed Forces. File a 2011 tax return online   U. File a 2011 tax return online S. File a 2011 tax return online military personnel stationed outside the United States on extended active duty are considered to live in the United States during that duty period for purposes of the EIC. File a 2011 tax return online Extended active duty means you are called or ordered to duty for an indefinite period or for a period of more than 90 days. File a 2011 tax return online Once you begin serving your extended active duty, you are still considered to have been on extended active duty even if you do not serve more than 90 days. File a 2011 tax return online Income from American Samoa or Puerto Rico excluded. File a 2011 tax return online   You will not be allowed to take deductions and credits that apply to the excluded income. File a 2011 tax return online The additional information you need follows. File a 2011 tax return online Deductions if Possession Income Is Excluded Deductions that specifically apply to your excluded possession income, such as employee business expenses, are not allowable on your U. File a 2011 tax return online S. File a 2011 tax return online income tax return. File a 2011 tax return online Deductions that do not specifically apply to any particular type of income must be divided between your excluded income from sources in the relevant possession and income from all other sources to find the part that you can deduct on your U. File a 2011 tax return online S. File a 2011 tax return online tax return. File a 2011 tax return online Examples of such deductions are alimony payments, the standard deduction, and certain itemized deductions (such as medical expenses, charitable contributions, real estate taxes, and mortgage interest on your home). File a 2011 tax return online Figuring the deduction. File a 2011 tax return online   To find the part of a deduction that is allowable, multiply the deduction by the following fraction. File a 2011 tax return online   Gross income subject to U. File a 2011 tax return online S. File a 2011 tax return online income tax     Gross income from all sources (including excluded possession income)   Adjustments to Income Your adjusted gross income equals your gross income minus certain deductions (adjustments). File a 2011 tax return online Moving expense deduction. File a 2011 tax return online   Generally, expenses of a move to a possession are directly attributable to wages, salaries, and other earned income from that possession. File a 2011 tax return online Likewise, the expenses of a move back to the United States are generally attributable to U. File a 2011 tax return online S. File a 2011 tax return online earned income. File a 2011 tax return online   If you are claiming expenses for a move to a relevant possession, how and where you will deduct the expenses depends on your status as a bona fide resident and if any of your possession income is excluded on your U. File a 2011 tax return online S. File a 2011 tax return online tax return. File a 2011 tax return online For more information, see Moving expense deduction in chapter 3 under the name of the relevant possession. File a 2011 tax return online   If you are claiming expenses for a move from a U. File a 2011 tax return online S. File a 2011 tax return online possession to the United States, use Form 3903 to figure your deductible expenses and enter the amount on Form 1040, line 26. File a 2011 tax return online For purposes of deducting moving expenses, the possessions are considered part of the United States. File a 2011 tax return online See Publication 521, Moving Expenses, for information about what expenses are deductible. File a 2011 tax return online Self-employment tax deduction. File a 2011 tax return online   Generally, if you are reporting self-employment income on your U. File a 2011 tax return online S. File a 2011 tax return online return, you can include the deductible part of your self-employment tax on Form 1040, line 27. File a 2011 tax return online This is an income tax deduction only; it is not a deduction in figuring net earnings from self-employment (for self-employment tax). File a 2011 tax return online   However, if you are a bona fide resident of American Samoa or Puerto Rico and you exclude all of your self-employment income from gross income, you cannot take the deduction on Form 1040, line 27, because the deduction is related to excluded income. File a 2011 tax return online   If only part of your self-employment income is excluded, the part of the deduction that is based on the nonexcluded income is allowed. File a 2011 tax return online This would happen if, for instance, you have two businesses and only the income from one of them is excludable. File a 2011 tax return online   For purposes of the deduction only, figure the self-employment tax on the nonexcluded income by multiplying your total self-employment tax (from Schedule SE (Form 1040)), Self-Employment Tax) by the following fraction. File a 2011 tax return online   Self-employment income subject to U. File a 2011 tax return online S. File a 2011 tax return online income tax     Total self-employment income (including excluded possession income)   The result is your self-employment tax on nonexcluded income. File a 2011 tax return online Include the deductible part of this amount on Form 1040, line 27. File a 2011 tax return online Individual retirement arrangement (IRA) deduction. File a 2011 tax return online   Do not take excluded income into account when figuring your deductible IRA contribution. File a 2011 tax return online Standard Deduction The standard deduction is composed of the regular standard deduction amount and the additional standard deduction for taxpayers who are blind or age 65 or over. File a 2011 tax return online To find the amount you can claim on Form 1040, line 40, first figure your full standard deduction according to the Instructions for Form 1040. File a 2011 tax return online Then multiply your full standard deduction by the following fraction. File a 2011 tax return online   Gross income subject to U. File a 2011 tax return online S. File a 2011 tax return online income tax     Gross income from all sources (including excluded possession income)   In the space above line 40, enter “Standard deduction modified due to income excluded under section 931 (if American Samoa) or section 933 (if Puerto Rico). File a 2011 tax return online ” This calculation may not be the same as the one you used to determine if you need to file a U. File a 2011 tax return online S. File a 2011 tax return online tax return. File a 2011 tax return online Itemized Deductions Most itemized deductions do not apply to a particular type of income. File a 2011 tax return online However, itemized deductions can be divided into three categories. File a 2011 tax return online Those that apply specifically to excluded income, such as employee business expenses, are not deductible. File a 2011 tax return online Those that apply specifically to income subject to U. File a 2011 tax return online S. File a 2011 tax return online income tax, which might also be employee business expenses, are fully allowable under the Instructions for Schedule A (Form 1040), Itemized Deductions. File a 2011 tax return online Those that do not apply to specific income must be allocated between your gross income subject to U. File a 2011 tax return online S. File a 2011 tax return online income tax and your total gross income from all sources. File a 2011 tax return online The example given later shows how to figure the deductible part of each type of expense that is not related to specific income. File a 2011 tax return online Example. File a 2011 tax return online In 2013, you and your spouse are both under 65 and U. File a 2011 tax return online S. File a 2011 tax return online citizens who are bona fide residents of Puerto Rico during the entire tax year. File a 2011 tax return online You file a joint income tax return. File a 2011 tax return online During 2013, you earned $20,000 from Puerto Rican sources (excluded from U. File a 2011 tax return online S. File a 2011 tax return online gross income) and your spouse earned $60,000 from the U. File a 2011 tax return online S. File a 2011 tax return online Government. File a 2011 tax return online You have $16,000 of itemized deductions that do not apply to any specific type of income. File a 2011 tax return online These are medical expenses of $4,000, real estate taxes of $5,000, home mortgage interest of $6,000, and charitable contributions of $1,000 (cash contributions). File a 2011 tax return online You determine the amount of each deduction that you can claim on your Schedule A (Form 1040), Itemized Deductions, by multiplying the deduction by the fraction shown under Figuring the deduction , earlier under Deductions if Possession Income is Excluded. File a 2011 tax return online   Medical Expenses   $60,000$80,000 × $4,000 = $3,000  (enter on line 1  of Schedule A)     Real Estate Taxes   $60,000$80,000 × $5,000 = $3,750  (enter on line 6  of Schedule A)     Home Mortgage Interest   $60,000$80,000 × $6,000 = $4,500  (enter on line 10 or 11 of  Schedule A)     Charitable Contributions (cash contributions)   $60,000$80,000 × $1,000 = $750  (enter on line 16 of Schedule A)   Enter on Schedule A (Form 1040) only the allowable portion of each deduction. File a 2011 tax return online Overall limitation on itemized deductions. File a 2011 tax return online   If your adjusted gross income (discussed earlier) is over $300,000 if married filing jointly or qualifying widow(er); $275,000 if head of household; $250,000 if single; or $150,000 if married filing separately; see the Itemized Deductions Worksheet in the Instructions for Schedule A (Form 1040), to figure your itemized deductions. File a 2011 tax return online Personal Exemptions Personal exemptions are allowed in full even if excluding possession income. File a 2011 tax return online However, depending upon your adjusted gross income and filing status, the amount you can deduct may be reduced. File a 2011 tax return online See the Deduction for Exemptions Worksheet—Line 42 in the instructions for Form 1040. File a 2011 tax return online Foreign Tax Credit if Possession Income Is Excluded If you must report American Samoa or Puerto Rico source income on your U. File a 2011 tax return online S. File a 2011 tax return online tax return, you can claim a foreign tax credit for income taxes paid to the possession on that income. File a 2011 tax return online However, you cannot claim a foreign tax credit for taxes paid on possession income that is excluded on your U. File a 2011 tax return online S. File a 2011 tax return online tax return. File a 2011 tax return online The foreign tax credit is generally figured on Form 1116. File a 2011 tax return online If you have income, such as U. File a 2011 tax return online S. File a 2011 tax return online Government wages, that is not excludable, and you also have possession source income that is excludable, you must figure the credit by reducing your foreign taxes paid or accrued by the taxes based on the excluded income. File a 2011 tax return online You make this reduction for each separate income category. File a 2011 tax return online To find the amount of this reduction, use the following formula for each income category. File a 2011 tax return online Excluded income from possession sources less deductible expenses based on that income x Tax paid or accrued to the possession = Reduction in foreign taxes Total income subject to possession tax less deductible expenses based on that income Enter the amount of the reduction on Form 1116, line 12. File a 2011 tax return online For more information on the foreign tax credit, see Publication 514. File a 2011 tax return online Example. File a 2011 tax return online Jason and Lynn Reddy are U. File a 2011 tax return online S. File a 2011 tax return online citizens who were bona fide residents of Puerto Rico during all of 2013. File a 2011 tax return online They file a joint tax return. File a 2011 tax return online The following table shows their excludable and taxable income for U. File a 2011 tax return online S. File a 2011 tax return online federal income tax purposes. File a 2011 tax return online   Taxable   Excludable Jason's wages from  U. File a 2011 tax return online S. File a 2011 tax return online Government $25,000     Lynn's wages from Puerto Rico  corp. File a 2011 tax return online     $15,000 Dividend from Puerto Rico corp. File a 2011 tax return online doing business in Puerto Rico     200 Dividend from U. File a 2011 tax return online S. File a 2011 tax return online  corp. File a 2011 tax return online doing business  in U. File a 2011 tax return online S. File a 2011 tax return online * 1,000     Totals $26,000   $15,200 * Income from sources outside Puerto Rico is taxable. File a 2011 tax return online   Jason and Lynn must file 2013 income tax returns with both Puerto Rico and the United States. File a 2011 tax return online They have gross income of $26,000 for U. File a 2011 tax return online S. File a 2011 tax return online tax purposes. File a 2011 tax return online They paid taxes to Puerto Rico of $4,000 ($3,980 on their wages and $20 on the dividend from the Puerto Rico corporation). File a 2011 tax return online They figure their foreign tax credit on two Forms 1116, which they must attach to their U. File a 2011 tax return online S. File a 2011 tax return online return. File a 2011 tax return online They fill out one Form 1116 for wages and one Form 1116 for the dividend. File a 2011 tax return online Jason and Lynn figure the Puerto Rico taxes on excluded income as follows. File a 2011 tax return online   Wages: ($15,000 ÷ $40,000) × $3,980 = $1,493   Dividend: ($200 ÷ $200) × $20 = $20 They enter $1,493 on Form 1116, line 12, for wages and $20 on the second Form 1116, line 12, for the dividend. File a 2011 tax return online Self-Employment Tax Self-employment tax includes both social security and Medicare taxes for individuals who are self-employed. File a 2011 tax return online A U. File a 2011 tax return online S. File a 2011 tax return online citizen or resident alien who is self-employed must pay self-employment tax on net self-employment earnings of $400 or more. File a 2011 tax return online This rule applies whether or not the earnings are excludable from gross income (or whether or not a U. File a 2011 tax return online S. File a 2011 tax return online income tax return must otherwise be filed). File a 2011 tax return online Bona fide residents of the possessions discussed in this publication are considered U. File a 2011 tax return online S. File a 2011 tax return online residents for this purpose and are subject to the self-employment tax. File a 2011 tax return online Forms to file. File a 2011 tax return online   If you have net self-employment income and are subject to self-employment tax, file one of the following with the United States. File a 2011 tax return online If you are required to file Form 1040 with the United States, complete Schedule SE (Form 1040) and attach it to your Form 1040. File a 2011 tax return online If you are not required to file Form 1040 with the United States and you are a bona fide resident of American Samoa, the CNMI, Guam, Puerto Rico, or the USVI, file Form 1040-SS. File a 2011 tax return online If you are a resident of Puerto Rico, you can file the Spanish-language Form 1040-PR instead. File a 2011 tax return online Do not file forms 1040-SS or 1040-PR with Form 1040. File a 2011 tax return online If you are required to pay Additional Medicare Tax (discussed later) on your self-employment income, attach Form 8959, Additional Medicare Tax to Form 1040, Form 1040-SS, or Form 1040-PR, as applicable. File a 2011 tax return online Chapter 11 Bankruptcy cases. File a 2011 tax return online   While you are a debtor in a chapter 11 bankruptcy case, your net profit or loss from self-employment will be included on the income tax return (Form 1041, U. File a 2011 tax return online S. File a 2011 tax return online Income Tax Return for Estates and Trusts) of the bankruptcy estate. File a 2011 tax return online However, you—not the bankruptcy estate—are responsible for paying self-employment tax on your net earnings from self-employment. File a 2011 tax return online   Use Schedule SE (Form 1040), Form 1040-SS, or Form 1040-PR, as determined above, to figure your correct amount of self-employment tax. File a 2011 tax return online   For other reporting requirements, see Chapter 11 Bankruptcy Cases in the Instructions for Form 1040. File a 2011 tax return online Additional Medicare Tax Beginning in 2013, a 0. File a 2011 tax return online 9% Additional Medicare Tax applies to Medicare wages, railroad retirement (RRTA) compensation, and self-employment income that are more than: $125,000 if married filing separately, $250,000 if married filing jointly, or $200,000 if single, head of household, or qualifying widow(er). File a 2011 tax return online Medicare wages and self-employment income are combined to determine if income exceeds the threshold. File a 2011 tax return online A self-employment loss should not be considered for purposes of this tax. File a 2011 tax return online RRTA compensation should be separately compared to the threshold. File a 2011 tax return online Your employer is responsible for withholding the 0. File a 2011 tax return online 9% Additional Medicare Tax on Medicare wages or RRTA compensation it pays to you in excess of $200,000. File a 2011 tax return online You should consider this withholding, if applicable, in determining whether you need to make estimated tax payments. File a 2011 tax return online There are no special rules for U. File a 2011 tax return online S. File a 2011 tax return online citizens and nonresident aliens living abroad for purposes of this provision. File a 2011 tax return online Wages, RRTA compensation, and self-employment income that are subject to Medicare tax will also be subject to Additional Medicare Tax if in excess of the applicable threshold. File a 2011 tax return online For more information, see Form 8959, Additional Medicare Tax, and its instructions or visit www. File a 2011 tax return online irs. File a 2011 tax return online gov and enter the following words in the search box: Additional Medicare Tax. File a 2011 tax return online You cannot include the Additional Medicare Tax as a deductible part of your self-employment tax. File a 2011 tax return online Net Investment Income Tax Beginning in 2013, the Net Investment Income Tax (NIIT) imposes a 3. File a 2011 tax return online 8% tax on the lesser of an individual’s net investment income or the excess of the individual’s modified adjusted gross income over a specified threshold amount. File a 2011 tax return online Bona fide residents of Puerto Rico and American Samoa who may have a federal income tax return filing obligation may be liable for the NIIT if the taxpayer’s modified adjusted gross income from non-territory sources exceeds a specified threshold amount. File a 2011 tax return online The NIIT does not apply to any individual who is a nonresident alien with respect to the United States. File a 2011 tax return online Bona fide residents must take into account any additional tax liability associated with the NIIT when calculating your estimated tax payments. File a 2011 tax return online Forms to file. File a 2011 tax return online   If you are a bona fide resident of American Samoa and Puerto Rico and you are required to pay the NIIT, you must file Form 1040 with the United States and attach Form 8960, Net Investment Income Tax—Individuals, Estates, and Trusts. File a 2011 tax return online For more information, see Form 8960 and its instructions. File a 2011 tax return online Paying Your Taxes You may find that not all of your income tax has been paid through withholding by either the United States or the possession. File a 2011 tax return online This is often true if you have income that is not subject to withholding, such as self-employment, interest, or rental income. File a 2011 tax return online In this situation, you may need to make estimated tax payments. File a 2011 tax return online Estimated Tax If your estimated income tax obligation is to the United States, use the worksheet in the Form 1040-ES package to figure your estimated tax, including self-employment tax. File a 2011 tax return online Include the Additional Medicare Tax and Net Investment Income Tax if applicable. File a 2011 tax return online If you are paying by check or money order, use the payment vouchers in the Form 1040-ES package. File a 2011 tax return online Or, you can make your payments electronically and not have to file any paper forms. File a 2011 tax return online See the Form 1040-ES instructions for information on making payments. File a 2011 tax return online Double Taxation Mutual agreement procedures exist to settle issues where there is inconsistent tax treatment between the IRS and the taxing authorities of the following possessions. File a 2011 tax return online American Samoa. File a 2011 tax return online The Commonwealth of Puerto Rico. File a 2011 tax return online The Commonwealth of the Northern Mariana Islands. File a 2011 tax return online Guam. File a 2011 tax return online The U. File a 2011 tax return online S. File a 2011 tax return online Virgin Islands. File a 2011 tax return online These issues usually involve allocations of income, deductions, credits, or allowances between related persons; determinations of residency; and determinations of the source of income and related expenses. File a 2011 tax return online Competent Authority Assistance The tax coordination agreements between the United States and the possession tax departments contain provisions allowing the competent authorities of the United States and the relevant possession to resolve, by mutual agreement, inconsistent tax treatment by the two jurisdictions. File a 2011 tax return online How to make your request. File a 2011 tax return online   Your request for competent authority assistance must include all the information listed in Revenue Procedure 2006-23, 2006-20 I. File a 2011 tax return online R. File a 2011 tax return online B. File a 2011 tax return online 900 available at www. File a 2011 tax return online irs. File a 2011 tax return online gov/pub/irs-irbs/irb06-49. File a 2011 tax return online pdf. File a 2011 tax return online    Also, see Notice 2013-78, which provides proposed updates to the procedures for requesting U. File a 2011 tax return online S. File a 2011 tax return online competent authority assistance under tax treaties. File a 2011 tax return online As noted, an update to Revenue Procedure 2006-23 will be published in the future. File a 2011 tax return online   Your request must be in the form of a letter addressed to the Deputy Commissioner (International) LB&I. File a 2011 tax return online It must contain a statement that competent authority assistance is requested under the mutual agreement procedure with the possession. File a 2011 tax return online You (or a person having authority to sign your federal return) must sign and date the request. File a 2011 tax return online    Send your written request for U. File a 2011 tax return online S. File a 2011 tax return online assistance under this procedure to:   Deputy Commissioner (International) Large Business and International Division Internal Revenue Service 1111 Constitution Avenue, N. File a 2011 tax return online W. File a 2011 tax return online  Routing: M4-365 Washington, DC 20224 (Attention: TAIT) Nonresident aliens generally must present their initial request for assistance to the relevant possession tax agency. File a 2011 tax return online Credit or Refund In addition to the tax assistance request, if you seek a credit or refund of any overpayment of U. File a 2011 tax return online S. File a 2011 tax return online tax paid on the income in question, you should file a claim on Form 1040X, Amended U. File a 2011 tax return online S. File a 2011 tax return online Individual Income Tax Return. File a 2011 tax return online Indicate on the form that a request for assistance under the mutual agreement procedure with the possession has been filed. File a 2011 tax return online Attach a copy of the request to the form. File a 2011 tax return online Also, you should take whatever steps must be taken under the possession tax code to prevent the expiration of the statutory period for filing a claim for credit or refund of a possession tax. File a 2011 tax return online See Revenue Procedure 2006-54 (or its successor), section 9, for complete information. File a 2011 tax return online Prev  Up  Next   Home   More Online Publications