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File free tax return Listed Property Table of Contents Topics - This chapter discusses: Useful Items - You may want to see: Listed Property DefinedPassenger Automobile Defined Dwelling Unit Other Property Used for Transportation Computers and Related Peripheral Equipment Predominant Use TestMeeting the Predominant Use Test Qualified Business Use Method of Allocating Use Applying the Predominant Use Test Deductions After Recovery Period Leased PropertyLessor Lessee What Records Must Be KeptAdequate Records Reporting Information on Form 4562 Deductions in Later Years Appendix Topics - This chapter discusses: Listed property defined The predominant use test What records must be kept Useful Items - You may want to see: Publication 463 Travel, Entertainment, and Gift Expenses 587 Business Use of Your Home (Including Use by Day-Care Providers) 917 Business Use of a Car 946 How To Depreciate Property Form (and Instructions) 2106–EZ Unreimbursed Employee Business Expenses 2106 Employee Business Expenses 4255 Recapture of Investment Credit 4562 Depreciation and Amortization This chapter discusses some special rules and recordkeeping requirements for listed property. File free tax return For complete coverage of the rules, including the rules concerning passenger automobiles, see Publication 946. File free tax return If listed property is not used predominantly (more than 50%) in a qualified business use as discussed inPredominant Use Test, later, the section 179 deduction is not allowable and the property must be depreciated using the straight line method. File free tax return Listed Property Defined Listed property is any of the following: Any passenger automobile (defined later), Any other property used for transportation, Any property of a type generally used for entertainment, recreation, or amusement (including photographic, phonographic, communication, and video recording equipment), Any computer and related peripheral equipment, defined later, unless it is used only at a regular business establishment and owned or leased by the person operating the establishment. File free tax return A regular business establishment includes a portion of a dwelling unit (defined later), if, and only if, that portion is used both regularly and exclusively for business as discussed in Publication 587. File free tax return Any cellular telephone (or similar telecommunication equipment) placed in service or leased in a tax year beginning after 1989. File free tax return Passenger Automobile Defined A passenger automobile is any four-wheeled vehicle made primarily for use on public streets, roads, and highways and rated at 6,000 pounds or less of unloaded gross vehicle weight (at 6,000 pounds or less of gross vehicle weight for trucks and vans). File free tax return It includes any part, component, or other item physically attached to the automobile or usually included in the purchase price of an automobile. File free tax return A passenger automobile does not include: An ambulance, hearse, or combination ambulance-hearse used directly in a trade or business, and A vehicle used directly in the trade or business of transporting persons or property for compensation or hire. File free tax return Dwelling Unit A dwelling unit is a house or apartment used to provide living accommodations in a building or structure. File free tax return It does not include a unit in a hotel, motel, inn, or other establishment where more than half the units are used on a transient basis. File free tax return Other Property Used for Transportation Other property used for transportation includes trucks, buses, boats, airplanes, motorcycles, and any other vehicles for transporting persons or goods. File free tax return Listed property does not include: Any vehicle which, by reason of its design, is not likely to be used more than a minimal amount for personal purposes, such as clearly marked police and fire vehicles, ambulances, or hearses used for those purposes, Any vehicle that is designed to carry cargo and that has a loaded gross vehicle weight over 14,000 pounds, bucket trucks (cherry pickers), cement mixers, combines, cranes and derricks, delivery trucks with seating only for the driver (or only for the driver plus a folding jump seat), dump trucks (including garbage trucks), flatbed trucks, forklifts, qualified moving vans, qualified specialized utility repair trucks, and refrigerated trucks, Any passenger bus used for that purpose with a capacity of at least 20 passengers and school buses, Any tractor or other special purpose farm vehicle, and unmarked vehicles used by law enforcement officers if the use is officially authorized, and Any vehicle, such as a taxicab, if substantially all its use is in the trade or business of providing services to transport persons or property for compensation or hire by unrelated persons. File free tax return Computers and Related Peripheral Equipment A computer is a programmable electronically activated device that: Is capable of accepting information, applying prescribed processes to the information, and supplying the results of those processes with or without human intervention, and Consists of a central processing unit with extensive storage, logic, arithmetic, and control capabilities. File free tax return Related peripheral equipment is any auxiliary machine which is designed to be controlled by the central processing unit of a computer. File free tax return Computer or peripheral equipment does not include: Any equipment which is an integral part of property which is not a computer, Typewriters, calculators, adding and accounting machines, copiers, duplicating equipment, and similar equipment, and Equipment of a kind, used primarily for the user's amusement or entertainment, such as video games. File free tax return Predominant Use Test If “listed property,” defined earlier, placed in service after June 18, 1984, is not used predominantly (more than 50%) in a qualified business use during any tax year: The section 179 deduction on the property is not allowable, and You must depreciate the property using the straight line method. File free tax return Listed property placed in service before 1987. File free tax return   For listed property placed in service before 1987, depreciate the property over the following period: Class of Property Listed Property Recovery Period 3-year property 5 years 5-year property 12 years 10-year property 25 years 18-year real property 40 years 19-year real property 40 years If you must use the above recovery periods for listed property not used predominantly in a trade or business, use the percentages from Table 16 titled Listed Property Not Used Predominantly (Other Than 18- or 19-year Real Property), and Table 17 for 18- or 19-year real property, near the end of this publication in the Appendix. File free tax return Listed property placed in service after 1986. File free tax return   For information on listed property placed in service after 1986, see Publication 946. File free tax return Meeting the Predominant Use Test Listed property meets the predominant use test for any tax year if its business use is more than 50% of its total use. File free tax return You must allocate the use of any item of listed property used for more than one purpose during the tax year among its various uses. File free tax return The percentage of investment use of listed property cannot be used as part of the percentage of qualified business use to meet the predominant use test. File free tax return However, the combined total of business and investment use is taken into account to figure your depreciation deduction for the property. File free tax return Note: Property does not stop being predominantly used in a qualified business use because of a transfer at death. File free tax return Example. File free tax return Sarah Bradley uses a home computer 50% of the time to manage her investments. File free tax return She also uses the computer 40% of the time in her part-time consumer research business. File free tax return Sarah's home computer is listed property because it is not used at a regular business establishment. File free tax return Because her business use of the computer does not exceed 50%, the computer is not predominantly used in a qualified business use for the tax year. File free tax return Because she does not meet the predominant use test, she cannot elect a section 179 deduction for this property. File free tax return Her combined rate of business/investment use for determining her depreciation deduction is 90%. File free tax return Qualified Business Use A qualified business use is any use in your trade or business. File free tax return However, it does not include: The use of property held merely to produce income (investment use), The leasing of property to any 5% owner or related person (to the point that the property is used by a 5% owner or person related to the owner or lessee of the property), The use of property as compensation for the performance of services by a 5% owner or related person, or The use of property as compensation for the performance of services by any person (other than a5% owner or related person) unless the value of the use is included in that person's gross income for the use of the property and income tax is withheld on that amount where required. File free tax return See Employees, later. File free tax return 5% owner. File free tax return   A 5% owner of a business, other than a corporation, is any person who owns more than 5% of the capital or profits interest in the business. File free tax return   A 5% owner of a corporation is any person who owns, or is considered to own: More than 5% of the outstanding stock of the corporation, or Stock possessing more than 5% of the total combined voting power of all stock in the corporation. File free tax return Related person. File free tax return   A related person is anyone related to a taxpayer as discussed under Related persons, in chapter 2 under Nonqualifying Property in Publication 946. File free tax return Entertainment Use The use of listed property for entertainment, recreation, or amusement purposes is treated as a qualified business use only to the extent that expenses (other than interest and property tax expenses) for its use are deductible as ordinary and necessary business expenses. File free tax return See Publication 463. File free tax return Leasing or Compensatory Use of Aircraft If at least 25% of the total use of any aircraft during the tax year is for a qualified business use, the leasing or compensatory use of the aircraft by a 5% owner or related person is treated as a qualified business use. File free tax return Commuting The use of a vehicle for commuting is not business use, regardless of whether work is performed during the trip. File free tax return Use of Your Passenger Automobile by Another Person If someone else uses your automobile, that use is not business use unless: That use is directly connected with your business, The value of the use is property reported by you as income to the other person and tax is withheld on the income where required, or The value of the use results in a payment of fair market rent. File free tax return Any payment to you for the use of the automobile is treated as a rent payment for 3). File free tax return Employees Any use by an employee of his or her own listed property (or listed property rented by an employee) in performing services as an employee is not business use unless: The use is for the employer's convenience, and The use is required as a condition of employment. File free tax return Use for the employer's convenience. File free tax return   Whether the use of listed property is for the employer's convenience must be determined from all the facts. File free tax return The use is for the employer's convenience if it is for a substantial business reason of the employer. File free tax return The use of listed property during the employee's regular working hours to carry on the employer's business is generally for the employer's convenience. File free tax return Use required as a condition of employment. File free tax return   Whether the use of listed property is a condition of employment depends on all the facts and circumstances. File free tax return The use of property must be required for the employee to perform duties properly. File free tax return The employer need not explicitly require the employee to use the property. File free tax return A mere statement by the employer that the use of the property is a condition of employment is not sufficient. File free tax return Example 1. File free tax return Virginia Sycamore is employed as a courier with We Deliver which provides local courier services. File free tax return She owns and uses a motorcycle to deliver packages to downtown offices. File free tax return We Deliver explicitly requires all delivery persons to own a small car or motorcycle for use in their employment. File free tax return The company reimburses delivery persons for their costs. File free tax return Virginia's use of the motorcycle is for the convenience of We Deliver and is required as a condition of employment. File free tax return Example 2. File free tax return Bill Nelson is an inspector for Uplift, a construction company with many sites in the local area. File free tax return He must travel to these sites on a regular basis. File free tax return Uplift does not furnish an automobile or explicitly require him to use his own automobile. File free tax return However, it reimburses him for any costs he incurs in traveling to the various sites. File free tax return The use of his own automobile or a rental automobile is for the convenience of Uplift and is required as a condition of employment. File free tax return Method of Allocating Use For passenger automobiles and other means of transportation, allocate the property's use on the basis of mileage. File free tax return You determine the percentage of qualified business use by dividing the number of miles the vehicle is driven for business purposes during the year by the total number of miles the vehicle is driven for all purposes (including business miles) during the year. File free tax return For other items of listed property, allocate the property's use on the basis of the most appropriate unit of time. File free tax return For example, you can determine the percentage of business use of a computer by dividing the number of hours the computer is used for business purposes during the year by the total number of hours the computer is used for all purposes (including business hours) during the year. File free tax return Applying the Predominant Use Test You must apply the predominant use test for an item of listed property each year of the recovery period. File free tax return First Recovery Year If any item of listed property is not used predominantly in a qualified business use in the year it is placed in service: The property is not eligible for a section 179 deduction, and The depreciation deduction must be figured using the straight line method. File free tax return Note: The required use of the straight line method for an item of listed property that does not meet the predominant use test is not the same as electing the straight line method. File free tax return It does not mean that you have to use the straight line method for other property in the same class as the item of listed property. File free tax return Years After the First Recovery Year If you use listed property predominantly (more than 50%) in a qualified business use in the tax year you place it in service, but not in a subsequent tax year during the recovery period, the following rules apply: Figure depreciation using the straight line method. File free tax return Do this for each year, beginning with the year you no longer use the property predominantly in a qualified business use, and Figure any excess depreciation on the property and add it to: Your gross income, and The adjusted basis of your property. File free tax return See Recapture of excess depreciation, next. File free tax return Recapture of excess depreciation. File free tax return   You must include any excess depreciation in your gross income for the first tax year the property is not predominantly used in a qualified business use. File free tax return Any excess depreciation must also be added to the adjusted basis of your property. File free tax return Excess depreciation is the excess (if any) of: The amount of depreciation allowable for the property (including any section 179 deduction claimed) for tax years before the first tax year the property was not predominantly used in a qualified business use, over The amount of depreciation that would have been allowable for those years if the property were not used predominantly in a qualified business use for the year it was placed in service. File free tax return This means you figure your depreciation using the percentages fromTable 16 or 17. File free tax return For information on investment credit recapture, see the instructions for Form 4255. File free tax return Deductions After Recovery Period When listed property (other than passenger automobiles) is used for business, investment, and personal purposes, no deduction is ever allowable for the personal use. File free tax return In tax years after the recovery period, you must determine if there is any unrecovered basis remaining before you compute the depreciation deduction for that tax year. File free tax return To make this determination, figure the depreciation for earlier tax years as if your property were used 100% for business or investment purposes, beginning with the first tax year in which some or all use is for business or investment. File free tax return See Car Used 50% or Less for Business in Publication 917. File free tax return Leased Property The limitations on cost recovery deductions apply to the rental of listed property. File free tax return The following discussion covers the rules that apply to the lessor (the owner of the property) and the lessee (the person who rents the property from the owner). File free tax return SeeLeasing a Car in Publication 917 for a discussion of leased passenger automobiles. File free tax return Lessor The limitations on cost recovery generally do not apply to any listed property leased or held for leasing by anyone regularly engaged in the business of leasing listed property. File free tax return A person is considered regularly engaged in the business of leasing listed property only if contracts for leasing of listed property are entered into with some frequency over a continuous period of time. File free tax return This determination is made on the basis of the facts and circumstances in each case and takes into account the nature of the person's business in its entirety. File free tax return Occasional or incidental leasing activity is insufficient. File free tax return For example, a person leasing only one passenger automobile during a tax year is not regularly engaged in the business of leasing automobiles. File free tax return An employer who allows an employee to use the employer's property for personal purposes and charges the employee for the use is not regularly engaged in the business of leasing the property used by the employee. File free tax return Lessee A lessee of listed property (other than passenger automobiles), must include an amount in gross income called the inclusion amount for the first tax year the property is not used predominantly in a qualified business use. File free tax return Inclusion amount for property leased before 1987. File free tax return   You determine the inclusion amount for property leased after June 18, 1984 and before 1987 by multiplying the fair market value of the property by both the average business/investment use percentage and the applicable percentage. File free tax return You can find the applicable percentages for listed property that is 5- or 10-year recovery property in Tables 19 or 20 in Appendix A of Publication 946. File free tax return   The lease term for listed property other than 18- or 19-year real property, and residential rental or nonresidential real property, includes options to renew. File free tax return For 18- or 19-year real property and residential rental or nonresidential real property that is listed property, the period of the lease does not include any option to renew at fair market value, determined at the time of renewal. File free tax return You treat two or more successive leases that are part of the same transaction (or a series of related transactions) for the same or substantially similar property as one lease. File free tax return Special rules. File free tax return   The lessee adds the inclusion amount to gross income in the next tax year if: The lease term begins within 9 months before the close of the lessee's tax year, The lessee does not use the property predominantly in a qualified business use during that portion of the tax year, and The lease term continues into the lessee's next tax year. File free tax return The lessee determines the inclusion amount by taking into account the average of the business/investment use for both tax years and the applicable percentage for the tax year the lease term begins. File free tax return   If the lease term is less than one year, the amount included in gross income is the amount that bears the same ratio to the additional inclusion amount as the number of days in the lease term bears to 365. File free tax return Maximum inclusion amount. File free tax return   The inclusion amount cannot be more than the sum of the deductible amounts of rent allocable to the lessee's tax year in which the amount must be included in gross income. File free tax return What Records Must Be Kept You cannot take any depreciation or section 179 deduction for the use of listed property (including passenger automobiles) unless you can prove business/investment use with adequate records or sufficient evidence to support your own statements. File free tax return How long to keep records. File free tax return   For listed property, records must be kept for as long as any excess depreciation can be recaptured (included in income). File free tax return Adequate Records To meet the adequate records requirement, you must maintain an account book, diary, log, statement of expense, trip sheet, or similar record or other documentary evidence that, together with the receipt, is sufficient to establish each element of an expenditure or use. File free tax return It is not necessary to record information in an account book, diary, or similar record if the information is already shown on the receipt. File free tax return However, your records should back up your receipts in an orderly manner. File free tax return Elements of Expenditure or Use The records or other documentary evidence must support: The amount of each separate expenditure, such as the cost of acquiring the item, maintenance and repair costs, capital improvement costs, lease payments, and any other expenses, The amount of each business and investment use (based on an appropriate measure, such as mileage for vehicles and time for other listed property), and the total use of the property for the tax year, The date of the expenditure or use, and The business or investment purpose for the expenditure or use. File free tax return Written documents of your expenditure or use are generally better evidence than oral statements alone. File free tax return A written record prepared at or near the time of the expenditure or use has greater value as proof of the expenditure or use. File free tax return A daily log is not required. File free tax return However, some type of record containing the elements of an expenditure or the business or investment use of listed property made at or near the time and backed up by other documents is preferable to a statement prepared later. File free tax return Timeliness The elements of an expenditure or use must be recorded at the time you have full knowledge of the elements. File free tax return An expense account statement made from an account book, diary, or similar record prepared or maintained at or near the time of the expenditure or use is generally considered a timely record if in the regular course of business: The statement is submitted by an employee to the employer, or The statement is submitted by an independent contractor to the client or customer. File free tax return For example, a log maintained on a weekly basis, which accounts for use during the week, will be considered a record made at or near the time of use. File free tax return Business Purpose Supported An adequate record of business purpose must generally be in the form of a written statement. File free tax return However, the amount of backup necessary to establish a business purpose depends on the facts and circumstances of each case. File free tax return A written explanation of the business purpose will not be required if the purpose can be determined from the surrounding facts and circumstances. File free tax return For example, a salesperson visiting customers on an established sales route will not normally need a written explanation of the business purpose of his or her travel. File free tax return Business Use Supported An adequate record contains enough information on each element of every business or investment use. File free tax return The amount of detail required to support the use depends on the facts and circumstances. File free tax return For example, a taxpayer whose only business use of a truck is to make customer deliveries on an established route can satisfy the requirement by recording the length of the route, including the total number of miles driven during the tax year and the date of each trip at or near the time of the trips. File free tax return Although an adequate record generally must be written, a record of the business use of listed property, such as a computer or automobile, can be prepared in a computer memory device using a logging program. File free tax return Separate or Combined Expenditures or Uses Each use by you is normally considered a separate use. File free tax return However, repeated uses can be combined as a single item. File free tax return Each expenditure is recorded as a separate item and not combined with other expenditures. File free tax return If you choose, however, amounts spent for the use of listed property during a tax year, such as for gasoline or automobile repairs, can be combined. File free tax return If these expenses are combined, you do not need to support the business purpose of each expense. File free tax return Instead, you can divide the expenses based on the total business use of the listed property. File free tax return Uses which can be considered part of a single use, such as a round trip or uninterrupted business use, can be accounted for by a single record. File free tax return For example, use of a truck to make deliveries at several locations which begin and end at the business premises and can include a stop at the business in between deliveries can be accounted for by a single record of miles driven. File free tax return Use of a passenger automobile by a salesperson for a business trip away from home over a period of time can be accounted for by a single record of miles traveled. File free tax return Minimal personal use (such as a stop for lunch between two business stops) is not an interruption of business use. File free tax return Confidential Information If any of the information on the elements of an expenditure or use is confidential, it does not need to be in the account book or similar record if it is recorded at or near the time of the expenditure or use. File free tax return It must be kept elsewhere and made available as support to the district director on request. File free tax return Substantial Compliance If you have not fully supported a particular element of an expenditure or use, but have complied with the adequate records requirement for the expenditure or use to the district director's satisfaction, you can establish this element by any evidence the district director deems adequate. File free tax return If you fail to establish that you have substantially complied with the adequate records requirement for an element of an expenditure or use to the district director's satisfaction, you must establish the element: By your own oral or written statement containing detailed information as to the element, and By other evidence sufficient to establish the element. File free tax return If the element is the cost or amount, time, place, or date of an expenditure or use, its supporting evidence must be direct, such as oral testimony by witnesses or a written statement setting forth detailed information about the element or the documentary evidence. File free tax return If the element is the business purpose of an expenditure, its supporting evidence can be circumstantial evidence. File free tax return Sampling You can maintain an adequate record for portions of a tax year and use that record to support your business and investment use for the entire tax year if it can be shown by other evidence that the periods for which an adequate record is maintained are representative of use throughout the year. File free tax return Loss of Records When you establish that failure to produce adequate records is due to loss of the records through circumstances beyond your control, such as through fire, flood, earthquake, or other casualty, you have the right to support a deduction by reasonable reconstruction of your expenditures and use. File free tax return Reporting Information on Form 4562 If you claim a deduction for any listed property, you must provide the requested information on page 2, Section B of Form 4562. File free tax return If you claim a deduction for any vehicle, you must answer certain questions onpage 2 of Form 4562 to provide information about the vehicle use. File free tax return Employees. File free tax return   Employees claiming the standard mileage rate or actual expenses (including depreciation) must use Form 2106 instead of Part V of Form 4562. File free tax return Employees claiming the standard mileage rate may be able to use Form 2106–EZ. File free tax return Employer who provides vehicles to employees. File free tax return   An employer who provides vehicles to employees must obtain enough information from those employees to provide the requested information onForm 4562. File free tax return   An employer who provides more than five vehicles to employees need not include any information on his or her tax return. File free tax return Instead, the employer must obtain the information from his or her employees and indicate on his or her return that the information was obtained and is being retained. File free tax return   You do not need to provide the information requested on page 2 of Form 4562 if, as an employer: You can satisfy the requirements of a written policy statement for vehicles either not used for personal purposes, or not used for personal purposes other than commuting, or You treat all vehicle use by employees as personal use. File free tax return See the instructions for Form 4562. File free tax return Deductions in Later Years When listed property is used for business, investment, and personal purposes, no deduction is allowable for its personal use either in the current year or any later tax year. File free tax return In later years, you must determine if there is any remaining unadjusted or unrecovered basis before you compute the depreciation deduction for that tax year. File free tax return In making this determination, figure the depreciation deductions for earlier tax years as if the listed property were used 100% for business or investment purposes in those years, beginning with the first tax year in which some or all of the property use is for business or investment. File free tax return For more information about deductions after the recovery period for automobiles, see Publication 917. File free tax return Appendix The following tables are for use in figuring depreciation deductions under the ACRS system. File free tax return Table 1. File free tax return 15-Year Real Property* (Other Than Low-Inclome Housing) Table 3. File free tax return Low-Income Housing* Table 6 - Table 9 Table 6 - Table 9 Table 10 - Table 13 Table 14 - Table 17 Prev  Up  Next   Home   More Online Publications
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File free tax return Publication 595 - Main Contents Table of Contents Capital Construction FundCCF Accounts Types of Accounts You Must Maintain Within a CCF Tax Treatment of CCF Deposits Tax Treatment of CCF Earnings Tax Treatment of CCF Withdrawals More Information How To Get Tax Help Capital Construction Fund The following sections discuss CCF accounts and the types of bookkeeping accounts you must maintain when you invest in a CCF account. File free tax return They also discuss the income tax treatment of CCF deposits, earnings, and withdrawals. File free tax return CCF Accounts This section explains who can open a CCF account and how to use the account to defer income tax. File free tax return Opening a CCF account. File free tax return   If you are a U. File free tax return S. File free tax return citizen and you own or lease one or more eligible vessels (defined later), you can open a CCF account. File free tax return However, before you open your CCF account, you must enter into an agreement with the Secretary of Commerce through the NMFS. File free tax return This agreement will establish the following. File free tax return Agreement vessels. File free tax return Eligible vessels named in the agreement that will be the basis for the deferral of income tax. File free tax return Planned use of withdrawals. File free tax return Use of CCF funds to acquire, build, or rebuild a vessel. File free tax return CCF depository. File free tax return Where your CCF funds will be held. File free tax return    You can request an application kit or get additional information from NMFS at the following address. File free tax return NOAA/NMFS, Financial Services Division, F/MB5 Capital Construction Fund Program 1315 East-West Highway Silver Spring, MD 20910-3282    You can obtain information on the Capital Construction Fund Program at the following website: www. File free tax return nmfs. File free tax return noaa. File free tax return gov/mb/financial_services/ccf. File free tax return htm. File free tax return    You can call NMFS to request an application kit or get additional information at (301) 713-2393 (ext. File free tax return 204). File free tax return Their fax number is (301) 713-1939. File free tax return Eligible vessels. File free tax return   There are two types of vessels that may be considered eligible, those weighing 5 tons or more and those weighing less than 5 tons. File free tax return For each type, certain requirements must be met. File free tax return Vessel weighing 5 tons or more. File free tax return   To be considered eligible, the vessel must meet all the following requirements. File free tax return Be built or rebuilt in the United States. File free tax return Be documented under the laws of the United States. File free tax return Be used commercially in the fisheries of the United States. File free tax return Be operated in the foreign or domestic commerce of the United States. File free tax return Vessel weighing less than 5 tons. File free tax return   A small vessel, weighing at least 2 net tons but less than 5 net tons, must meet all the following requirements to be considered eligible. File free tax return Be built or rebuilt in the United States. File free tax return Be owned by a U. File free tax return S. File free tax return citizen. File free tax return Have a home port in the United States. File free tax return Be used commercially in the fisheries of the United States. File free tax return Deferring tax on CCF deposits and earnings. File free tax return   You can use a CCF account to defer income tax by taking the following actions. File free tax return Making deposits to your CCF account from taxable income. File free tax return Excluding from income deposits assigned to certain accounts (discussed later). File free tax return Making withdrawals from your CCF account when you acquire, build, or rebuild fishing vessels. File free tax return Reducing the basis of fishing vessels you acquire, build, or rebuild to recapture amounts previously excluded from tax. File free tax return    Reporting requirements. File free tax return Beginning with the tax year in which you establish your agreement, you must report annual deposit and withdrawal activity to the NMFS on NOAA Form 34-82. File free tax return This form is due within 30 days after you file your federal income tax return even if no deposits or withdrawals are made. File free tax return For more information, contact the NMFS at the address or phone number given earlier. File free tax return Types of Accounts You Must Maintain Within a CCF This section discusses the three types of bookkeeping accounts you must maintain when you invest in a CCF account. File free tax return Your total CCF deposits and earnings for any given year are limited to the amount attributed to these three accounts for that year. File free tax return Capital account. File free tax return   The capital account consists primarily of amounts attributable to the following items. File free tax return Allowable depreciation deductions for agreement vessels. File free tax return Any nontaxable return of capital from either (a) or (b), below. File free tax return The sale or other disposition of agreement vessels. File free tax return Insurance or indemnity proceeds attributable to agreement vessels. File free tax return Any tax-exempt interest earned on state or local bonds in your CCF account. File free tax return Capital gain account. File free tax return   The capital gain account consists of amounts attributable to the following items reduced by any capital losses from assets held in your CCF account for more than 6 months. File free tax return Any capital gain from either of the following sources. File free tax return The sale or other disposition of agreement vessels held for more than 6 months. File free tax return Insurance or indemnity proceeds attributable to agreement vessels held for more than 6 months. File free tax return Any capital gain from assets held in your CCF account for more than 6 months. File free tax return Ordinary income account. File free tax return   The ordinary income account consists of amounts attributable to the following items. File free tax return Any earnings (without regard to the carryback of any net operating or net capital loss) from the operation of agreement vessels in the fisheries of the United States or in the foreign or domestic commerce of the United States. File free tax return Any capital gain from the following sources reduced by any capital losses from assets held in your CCF account for 6 months or less. File free tax return The sale or other disposition of agreement vessels held for 6 months or less. File free tax return Insurance or indemnity proceeds attributable to agreement vessels held for 6 months or less. File free tax return Any capital gain from assets held in your CCF account for 6 months or less. File free tax return Any ordinary income (such as depreciation recapture) from either of the following sources. File free tax return The sale or other disposition of agreement vessels. File free tax return Insurance or indemnity proceeds attributable to agreement vessels. File free tax return Any interest (not including tax-exempt interest from state and local bonds), most dividends, and other ordinary income earned on the assets in your CCF account. File free tax return Tax Treatment of CCF Deposits This section explains the tax treatment of income used as the basis for CCF deposits. File free tax return Capital gains. File free tax return   Do not report any transaction that produces a capital gain if you deposit the net proceeds into your CCF account. File free tax return This treatment applies to either of the following transactions. File free tax return The sale or other disposition of an agreement vessel. File free tax return The receipt of insurance or indemnity proceeds attributable to an agreement vessel. File free tax return Depreciation recapture. File free tax return   Do not report any transaction that produces depreciation recapture if you deposit the net proceeds into your CCF account. File free tax return This treatment applies to either of the following transactions. File free tax return The sale or other disposition of an agreement vessel. File free tax return The receipt of insurance or indemnity proceeds attributable to an agreement vessel. File free tax return Earnings from operations. File free tax return   Report earnings from the operation of agreement vessels on your Schedule C or C-EZ (Form 1040) even if you deposit part of these earnings into your CCF account. File free tax return You subtract any part of the earnings you deposited into your CCF account from the amount you would otherwise enter as taxable income on Form 1040, line 43 (for 2005). File free tax return Next to line 43, write “CCF” and the amount of the deposits. File free tax return Do not deduct these CCF deposits on Schedule C or C-EZ (Form 1040). File free tax return If you deposit earnings from operations into your CCF account and you must complete other forms such as Form 6251, Alternative Minimum Tax (Individuals), or a worksheet for Schedule D (Form 1040), you will need to make an extra computation. File free tax return When the other form instructs you to use the amount from Form 1040, line 41 (for 2005), do not use that amount. File free tax return Instead, add Form 1040, lines 42 and 43 (for 2005), and use that amount. File free tax return Self-employment tax. File free tax return   You must use your net profit or loss from your fishing business to figure your self-employment tax. File free tax return Do not reduce your net profit or loss by any earnings from operations you deposit into your CCF account. File free tax return    Partnerships and S corporations. File free tax return The deduction for partnership earnings from operations deposited into a CCF account is separately stated on Schedule K (Form 1065), line 13d, and allocated to the partners on Schedule K-1 (Form 1065), box 13 (for 2005). File free tax return   The deduction for S corporation earnings deposited into a CCF account is separately stated on Schedule K (Form 1120S), line 12d, and allocated to the shareholders on Schedule K-1 (Form 1120S), box 12 (for 2005). File free tax return Tax Treatment of CCF Earnings This section explains the tax treatment of the earnings from the assets in your CCF account when the earnings are redeposited or left in your account. File free tax return However, if you choose to withdraw the earnings in the year earned, you must generally pay income tax on them. File free tax return Capital gains. File free tax return   Do not report any capital gains from the sale of capital assets held in your CCF account. File free tax return This includes capital gain distributions reported to you on Form 1099-DIV or a substitute statement. File free tax return However, you should attach a statement to your tax return to list the payers and the amounts and to identify the capital gains as “CCF account earnings. File free tax return ” Interest and dividends. File free tax return   Do not report any ordinary income (such as interest and dividends) you earn on the assets in your CCF account. File free tax return However, you should attach a statement to your return to list the payers and the amounts and to identify them as “CCF account earnings. File free tax return ”   If you are required to file Schedule B (Form 1040), you can add these earnings to the list of payers and amounts on line 1 or line 5 and identify them as “CCF earnings. File free tax return ” Then, subtract the same amounts from the list and identify them as “CCF deposits. File free tax return ” Tax-exempt interest. File free tax return   Do not report tax-exempt interest from state or local bonds you held in your CCF account. File free tax return You are not required to report this interest on Form 1040, line 8b. File free tax return Tax Treatment of CCF Withdrawals This section discusses the tax treatment of amounts you withdraw from your CCF account during the year. File free tax return Qualified Withdrawals A qualified withdrawal from a CCF account is one that is approved by NMFS for either of the following uses. File free tax return Acquiring, building, or rebuilding qualified vessels (defined next). File free tax return Making principal payments on the mortgage of a qualified vessel. File free tax return NMFS will not approve amounts withdrawn to purchase nets not continuously attached to the vessel, such as seine nets, gill set-nets, and gill drift-nets. File free tax return NMFS will approve amounts withdrawn to purchase trawl nets. File free tax return Qualified vessel. File free tax return   This is any vessel that meets all of the following requirements. File free tax return The vessel was built or rebuilt in the United States. File free tax return The vessel is documented under the laws of the United States. File free tax return The person maintaining the CCF account agrees with the Secretary of Commerce that the vessel will be operated in United States foreign trade, Great Lakes trade, noncontiguous domestic trade, or the fisheries of the United States. File free tax return How to determine the source of qualified withdrawals. File free tax return   When you make a qualified withdrawal, the amount is treated as being withdrawn in the following order from the accounts listed below. File free tax return The capital account. File free tax return The capital gain account. File free tax return The ordinary income account. File free tax return Excluding qualified withdrawals from tax. File free tax return   Do not report on your income tax return any qualified withdrawals from your CCF account. File free tax return Reduce the depreciable basis of fishing vessels you acquire, build, or rebuild when you make a qualified withdrawal from either the capital gain or the ordinary income account. File free tax return Nonqualified Withdrawals A nonqualified withdrawal from a CCF account is generally any withdrawal that is not a qualified withdrawal. File free tax return Qualified withdrawals are defined under Qualified Withdrawals, earlier. File free tax return Examples. File free tax return   Examples of nonqualified withdrawals include the following amounts from either the ordinary income account or the capital gain account. File free tax return Amounts remaining in a CCF account upon termination of your agreement with NMFS. File free tax return Amounts you withdraw and use to make principal payments on the mortgage of a vessel if the basis of that vessel and the bases of other vessels you own have already been reduced to zero. File free tax return Amounts determined by the IRS to cause your CCF account balance to exceed the amount appropriate to meet your planned use of withdrawals. File free tax return You will generally be given 3 years to revise your plans to cover this excess balance. File free tax return Amounts you leave in your account for more than 25 years. File free tax return There is a graduated schedule under which the percentage applied to determine the amount of the nonqualified withdrawal increases from 20% in the 26th year to 100% in the 30th year. File free tax return How to determine the source of nonqualified withdrawals. File free tax return    When you make a nonqualified withdrawal from your CCF account, the amount is treated as being withdrawn in the following order from the accounts listed below. File free tax return The ordinary income account. File free tax return The capital gain account. File free tax return The capital account. File free tax return Paying tax on nonqualified withdrawals. File free tax return   In general, nonqualified withdrawals are taxed separately from your other gross income and at the highest marginal tax rate in effect for the year of withdrawal. File free tax return However, nonqualified withdrawals treated as made from the capital gain account are taxed at a rate that cannot exceed 15% for individuals and 34% for corporations. File free tax return    Partnerships and S corporations. File free tax return Taxable nonqualified partnership withdrawals are separately stated on Schedule K (Form 1065), line 20c, and allocated to the partners on Schedule K-1 (Form 1065), box 20 (for 2005). File free tax return Taxable nonqualified withdrawals by an S corporation are separately stated on Schedule K (Form 1120S), line 17d, and allocated to the shareholders on Schedule K-1 (Form 1120S), box 17. File free tax return Interest. File free tax return   You must pay interest on the additional tax due to nonqualified withdrawals that are treated as made from either the ordinary income or the capital gain account. File free tax return The interest period begins on the last date for paying tax for the year for which you deposited the amount you withdrew from your CCF account. File free tax return The period ends on the last date for paying tax for the year in which you make the nonqualified withdrawal. File free tax return The interest rate on the nonqualified withdrawal is simple interest. File free tax return The rate is subject to change annually and is published in the Federal Register. File free tax return    You also can call NMFS at (301) 713-2393 (ext. File free tax return 204) to get the current interest rate. File free tax return Interest deduction. File free tax return   You can deduct the interest you pay on a nonqualified withdrawal as a trade or business expense. File free tax return Reporting the additional tax and interest. File free tax return   Attach a statement to your income tax return showing your computation of the tax and the interest on a nonqualified withdrawal. File free tax return Include the tax and interest on Form 1040, line 63 (for 2005). File free tax return To the left of line 63, write in the amount of tax and interest and “CCF. File free tax return ” Tax benefit rule. File free tax return   If any portion of your nonqualified withdrawal is properly attributable to contributions (not earnings on the contributions) you made to the CCF account that did not reduce your tax liability for any tax year prior to the withdrawal year, the following tax treatment applies. File free tax return The part that did not reduce your tax liability for any year prior to the withdrawal year is not taxed. File free tax return That part is allowed as a net operating loss deduction. File free tax return More Information This section briefly discussed the CCF program. File free tax return For more detailed information, see the following legislative authorities. File free tax return Section 607 of the Merchant Marine Act of 1936, as amended (46 U. File free tax return S. File free tax return C. File free tax return 1177). File free tax return Chapter 2, Part 259 of title 50 of the Code of Federal Regulations (50 C. File free tax return F. File free tax return R. File free tax return , Part 259). File free tax return Subchapter A, Part 3 of title 26 of the Code of Federal Regulations (26 C. File free tax return F. File free tax return R. File free tax return , Part 3). File free tax return Section 7518 of the Internal Revenue Code (IRC 7518). File free tax return The application kit you can obtain from NMFS at the address or phone number given earlier may contain copies of some of these sources of additional information. File free tax return Also, see their web page at www. File free tax return nmfs. File free tax return noaa. File free tax return gov/mb/financial_services/ccf. File free tax return htm. File free tax return How To Get Tax Help You can get help with unresolved tax issues, order free publications and forms, ask tax questions, and get information from the IRS in several ways. File free tax return By selecting the method that is best for you, you will have quick and easy access to tax help. File free tax return Contacting your Taxpayer Advocate. File free tax return   If you have attempted to deal with an IRS problem unsuccessfully, you should contact your Taxpayer Advocate. File free tax return   The Taxpayer Advocate independently represents your interests and concerns within the IRS by protecting your rights and resolving problems that have not been fixed through normal channels. File free tax return While Taxpayer Advocates cannot change the tax law or make a technical tax decision, they can clear up problems that resulted from previous contacts and ensure that your case is given a complete and impartial review. File free tax return   To contact your Taxpayer Advocate: Call the Taxpayer Advocate toll free at 1-877-777-4778, Call, write, or fax the Taxpayer Advocate office in your area, Call 1-800-829-4059 if you are a TTY/TDD user, or Visit www. File free tax return irs. File free tax return gov/advocate. File free tax return   For more information, see Publication 1546, How To Get Help With Unresolved Tax Problems (now available in Chinese, Korean, Russian, and Vietnamese, in addition to English and Spanish). File free tax return Free tax services. File free tax return   To find out what services are available, get Publication 910, IRS Guide to Free Tax Services. File free tax return It contains a list of free tax publications and an index of tax topics. File free tax return It also describes other free tax information services, including tax education and assistance programs and a list of TeleTax topics. File free tax return Internet. File free tax return You can access the IRS website 24 hours a day, 7 days a week, at www. File free tax return irs. File free tax return gov to: E-file your return. File free tax return Find out about commercial tax preparation and e-file services available free to eligible taxpayers. File free tax return Check the status of your refund. File free tax return Click on Where's My Refund. File free tax return Be sure to wait at least 6 weeks from the date you filed your return (3 weeks if you filed electronically). File free tax return Have your tax return available because you will need to know your social security number, your filing status, and the exact whole dollar amount of your refund. File free tax return Download forms, instructions, and publications. File free tax return Order IRS products online. File free tax return Research your tax questions online. File free tax return Search publications online by topic or keyword. File free tax return View Internal Revenue Bulletins (IRBs) published in the last few years. File free tax return Figure your withholding allowances using our Form W-4 calculator. File free tax return Sign up to receive local and national tax news by email. File free tax return Get information on starting and operating a small business. File free tax return Phone. File free tax return Many services are available by phone. File free tax return Ordering forms, instructions, and publications. File free tax return Call 1-800-829-3676 to order current-year forms, instructions, and publications and prior-year forms and instructions. File free tax return You should receive your order within 10 days. File free tax return Asking tax questions. File free tax return Call the IRS with your tax questions at 1-800-829-1040. File free tax return Solving problems. File free tax return You can get face-to-face help solving tax problems every business day in IRS Taxpayer Assistance Centers. File free tax return An employee can explain IRS letters, request adjustments to your account, or help you set up a payment plan. File free tax return Call your local Taxpayer Assistance Center for an appointment. File free tax return To find the number, go to www. File free tax return irs. File free tax return gov/localcontacts or look in the phone book under United States Government, Internal Revenue Service. File free tax return TTY/TDD equipment. File free tax return If you have access to TTY/TDD equipment, call 1-800-829-4059 to ask tax questions or to order forms and publications. File free tax return TeleTax topics. File free tax return Call 1-800-829-4477 and press 2 to listen to pre-recorded messages covering various tax topics. File free tax return Refund information. File free tax return If you would like to check the status of your refund, call 1-800-829-4477 and press 1 for automated refund information and follow the recorded instructions or call 1-800-829-1954. File free tax return Be sure to wait at least 6 weeks from the date you filed your return (3 weeks if you filed electronically). File free tax return Have your tax return available because you will need to know your social security number, your filing status, and the exact whole dollar amount of your refund. File free tax return Evaluating the quality of our telephone services. File free tax return To ensure that IRS representatives give accurate, courteous, and professional answers, we use several methods to evaluate the quality of our telephone services. File free tax return One method is for a second IRS representative to sometimes listen in on or record telephone calls. File free tax return Another is to ask some callers to complete a short survey at the end of the call. File free tax return Walk-in. File free tax return Many products and services are available on a walk-in basis. File free tax return Products. File free tax return You can walk in to many post offices, libraries, and IRS offices to pick up certain forms, instructions, and publications. File free tax return Some IRS offices, libraries, grocery stores, copy centers, city and county government offices, credit unions, and office supply stores have a collection of products available to print from a CD-ROM or photocopy from reproducible proofs. File free tax return Also, some IRS offices and libraries have the Internal Revenue Code, regulations, Internal Revenue Bulletins, and Cumulative Bulletins available for research purposes. File free tax return Services. File free tax return You can walk in to your local Taxpayer Assistance Center every business day for personal, face-to-face tax help. File free tax return An employee can explain IRS letters, request adjustments to your account, or help you set up a payment plan. File free tax return If you need to resolve a tax problem, have questions about how the tax law applies to your individual tax return, or you're more comfortable talking with someone in person, visit your local Taxpayer Assistance Center where you can spread out your records and talk with an IRS representative face-to-face. File free tax return No appointment is necessary, but if you prefer, you can call your local Center and leave a message requesting an appointment to resolve a tax account issue. File free tax return A representative will call you back within 2 business days to schedule an in-person appointment at your convenience. File free tax return To find the number, go to www. File free tax return irs. File free tax return gov/localcontacts or look in the phone book under United States Government, Internal Revenue Service. File free tax return Mail. File free tax return You can send your order for forms, instructions, and publications to the address below and receive a response within 10 business days after your request is received. File free tax return National Distribution Center P. File free tax return O. File free tax return Box 8903 Bloomington, IL 61702-8903 CD-ROM for tax products. File free tax return You can order Publication 1796, IRS Tax Products on CD-ROM, and obtain: A CD that is released twice so you have the latest products. File free tax return The first release ships in late December and the final release ships in late February. File free tax return Current-year forms, instructions, and publications. File free tax return Prior-year forms, instructions, and publications. File free tax return Tax Map: an electronic research tool and finding aid. File free tax return Tax law frequently asked questions (FAQs). File free tax return Tax Topics from the IRS telephone response system. File free tax return Fill-in, print, and save features for most tax forms. File free tax return Internal Revenue Bulletins. File free tax return Toll-free and email technical support. File free tax return Buy the CD-ROM from National Technical Information Service (NTIS) at www. File free tax return irs. File free tax return gov/cdorders for $25 (no handling fee) or call 1-877-233-6767 toll free to buy the CD-ROM for $25 (plus a $5 handling fee). File free tax return CD-ROM for small businesses. File free tax return Publication 3207, Small Business Resource Guide CD-ROM, has a new look and enhanced navigation features. File free tax return This CD includes: Helpful information, such as how to prepare a business plan, find financing for your business, and much more. File free tax return All the business tax forms, instructions, and publications needed to successfully manage a business. File free tax return Tax law changes. File free tax return IRS Tax Map to help you find forms, instructions, and publications by searching on a keyword or topic. File free tax return Web links to various government agencies, business associations, and IRS organizations. File free tax return “Rate the Product” survey—your opportunity to suggest changes for future editions. File free tax return An updated version of this CD is available each year in early April. File free tax return You can get a free copy by calling 1-800-829-3676 or by visiting www. File free tax return irs. File free tax return gov/smallbiz. File free tax return Prev  Up  Next   Home   More Online Publications