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Form 1040nr Software

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Form 1040nr Software

Form 1040nr software 9. Form 1040nr software   Education Exception to Additional Tax on Early IRA Distributions Table of Contents Introduction Who Is Eligible Figuring the Amount Not Subject to the 10% Tax Reporting Early Distributions Introduction Generally, if you take a distribution from your IRA before you reach age 59½, you must pay a 10% additional tax on the early distribution. Form 1040nr software This applies to any IRA you own, whether it is a traditional IRA (including a SEP-IRA), a Roth IRA, or a SIMPLE IRA. Form 1040nr software The additional tax on an early distribution from a SIMPLE IRA may be as high as 25%. Form 1040nr software See Publication 560, Retirement Plans for Small Business, for information on SEP-IRAs, and Publication 590, for information about all other IRAs. Form 1040nr software However, you can take distributions from your IRAs for qualified higher education expenses without having to pay the 10% additional tax. Form 1040nr software You may owe income tax on at least part of the amount distributed, but you may not have to pay the 10% additional tax. Form 1040nr software Generally, if the taxable part of the distribution is less than or equal to the adjusted qualified education expenses (AQEE), none of the distribution is subject to the additional tax. Form 1040nr software If the taxable part of the distribution is more than the AQEE, only the excess is subject to the additional tax. Form 1040nr software Who Is Eligible You can take a distribution from your IRA before you reach age 59½ and not have to pay the 10% additional tax if, for the year of the distribution, you pay qualified education expenses for: yourself, your spouse, or your or your spouse's child, foster child, adopted child, or descendant of any of them. Form 1040nr software Qualified education expenses. Form 1040nr software   For purposes of the 10% additional tax, these expenses are tuition, fees, books, supplies, and equipment required for enrollment or attendance at an eligible educational institution. Form 1040nr software They also include expenses for special needs services incurred by or for special needs students in connection with their enrollment or attendance. Form 1040nr software   In addition, if the student is at least a half-time student, room and board are qualified education expenses. Form 1040nr software   The expense for room and board qualifies only to the extent that it is not more than the greater of the following two amounts. Form 1040nr software The allowance for room and board, as determined by the eligible educational institution, that was included in the cost of attendance (for federal financial aid purposes) for a particular academic period and living arrangement of the student. Form 1040nr software The actual amount charged if the student is residing in housing owned or operated by the eligible educational institution. Form 1040nr software You will need to contact the eligible educational institution for qualified room and board costs. Form 1040nr software Eligible educational institution. Form 1040nr software   An eligible educational institution is any college, university, vocational school, or other postsecondary educational institution eligible to participate in a student aid program administered by the U. Form 1040nr software S. Form 1040nr software Department of Education. Form 1040nr software It includes virtually all accredited public, nonprofit, and proprietary (privately owned profit-making) postsecondary institutions. Form 1040nr software The educational institution should be able to tell you if it is an eligible educational institution. Form 1040nr software   Certain educational institutions located outside the United States also participate in the U. Form 1040nr software S. Form 1040nr software Department of Education's Federal Student Aid (FSA) programs. Form 1040nr software Half-time student. Form 1040nr software   A student is enrolled “at least half-time” if he or she is enrolled for at least half the full-time academic work load for the course of study the student is pursuing as determined under the standards of the school where the student is enrolled. Form 1040nr software Figuring the Amount Not Subject to the 10% Tax To determine the amount of your distribution that is not subject to the 10% additional tax, first figure your adjusted qualified education expenses. Form 1040nr software You do this by reducing your total qualified education expenses by any tax-free educational assistance, which includes: Expenses used to figure the tax-free portion of distributions from a Coverdell education savings account (ESA) (see Distributions in chapter 7, Coverdell Education Savings Account), The tax-free part of scholarships and fellowships (see Tax-Free Scholarships and Fellowships in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions), Pell grants (see Pell Grants and Other Title IV Need-Based Education Grants in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions), Veterans' educational assistance (see Veterans' Benefits in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions), Employer-provided educational assistance (see chapter 11, Employer-Provided Educational Assistance ), and Any other nontaxable (tax-free) payments (other than gifts or inheritances) received as educational assistance. Form 1040nr software Do not reduce the qualified education expenses by amounts paid with funds the student receives as: Payment for services, such as wages, A loan, A gift, An inheritance given to either the student or the individual making the withdrawal, or A withdrawal from personal savings (including savings from a qualified tuition program (QTP)). Form 1040nr software If your IRA distribution is equal to or less than your adjusted qualified education expenses, you are not subject to the 10% additional tax. Form 1040nr software Example 1. Form 1040nr software In 2013, Erin (age 32) took a year off from teaching to attend graduate school full-time. Form 1040nr software She paid $5,800 of qualified education expenses from the following sources. Form 1040nr software   Employer-provided educational assistance  (tax free) $5,000     Early distribution from IRA (includes $500 taxable earnings) 3,200           Before Erin can determine if she must pay the 10% additional tax on her IRA distribution, she must reduce her total qualified education expenses. Form 1040nr software   Total qualified education expenses $5,800     Minus: Tax-free educational assistance −5,000     Equals: Adjusted qualified  education expenses (AQEE) $ 800   Because Erin's AQEE ($800) are more than the taxable portion of her IRA distribution ($500), she does not have to pay the 10% additional tax on any part of this distribution. Form 1040nr software However, she must include the $500 taxable earnings in her gross income subject to income tax. Form 1040nr software Example 2. Form 1040nr software Assume the same facts as in Example 1 , except that Erin deducted some of the contributions to her IRA, so the taxable part of her early distribution is higher by $1,000. Form 1040nr software This must be included in her income subject to income tax. Form 1040nr software The taxable part of Erin's IRA distribution ($1,000) is larger than her $800 AQEE. Form 1040nr software Therefore, she must pay the 10% additional tax on $200, the taxable part of her distribution ($1,000) that is more than her qualified education expenses ($800). Form 1040nr software She does not have to pay the 10% additional tax on the remaining $800 of her taxable distribution. Form 1040nr software Reporting Early Distributions By January 31, 2014, the payer of your IRA distribution should send you Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. Form 1040nr software The information on this form will help you determine how much of your distribution is taxable for income tax purposes and how much is subject to the 10% additional tax. Form 1040nr software If you received an early distribution from your IRA, you must report the taxable earnings on Form 1040, line 15b (Form 1040NR, line 16b). Form 1040nr software Then, if you qualify for an exception for qualified higher education expenses, you must file Form 5329 to show how much, if any, of your early distribution is subject to the 10% additional tax. Form 1040nr software See the Instructions for Form 5329, Part I, for help in completing the form and entering the results on Form 1040 or 1040NR. Form 1040nr software There are many other situations in which Form 5329 is required. Form 1040nr software If, during 2013, you had other distributions from IRAs or qualified retirement plans, or have made excess contributions to certain tax-favored accounts, see the instructions for line 58 (Form 1040) or line 56 (Form 1040NR) to determine if you must file Form 5329. Form 1040nr software Prev  Up  Next   Home   More Online Publications
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The Form 1040nr Software

Form 1040nr software 4. Form 1040nr software   Reporting Gains and Losses Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: Information Returns Schedule D and Form 8949Long and Short Term Net Gain or Loss Treatment of Capital Losses Capital Gains Tax Rates Form 4797Mark-to-market election. Form 1040nr software Introduction This chapter explains how to report capital gains and losses and ordinary gains and losses from sales, exchanges, and other dispositions of property. Form 1040nr software Although this discussion refers to Schedule D (Form 1040) and Form 8949, many of the rules discussed here also apply to taxpayers other than individuals. Form 1040nr software However, the rules for property held for personal use usually will not apply to taxpayers other than individuals. Form 1040nr software Topics - This chapter discusses: Information returns Schedule D (Form 1040) Form 4797 Form 8949 Useful Items - You may want to see: Publication 550 Investment Income and Expenses 537 Installment Sales Form (and Instructions) Schedule D (Form 1040) Capital Gains and Losses 1099-B Proceeds From Broker and Barter Exchange Transactions 1099-S Proceeds From Real Estate Transactions 4684 Casualties and Thefts 4797 Sales of Business Property 6252 Installment Sale Income 6781 Gains and Losses from Section 1256 Contracts and Straddles 8824 Like-Kind Exchanges 8949 Sales and Other Dispositions of Capital Assets See chapter 5 for information about getting publications and forms. Form 1040nr software Information Returns If you sell or exchange certain assets, you should receive an information return showing the proceeds of the sale. Form 1040nr software This information is also provided to the IRS. Form 1040nr software Form 1099-B. Form 1040nr software   If you sold property, such as stocks, bonds, or certain commodities, through a broker, you should receive Form 1099-B, Proceeds From Broker and Barter Exchange Transactions, or a substitute statement from the broker. Form 1040nr software Use the Form 1099-B or a substitute statement to complete Form 8949 and/or Schedule D. Form 1040nr software Whether or not you receive 1099-B, you must report all taxable sales of stock, bonds, commodities, etc. Form 1040nr software on Form 8949 and/or Schedule D, as applicable. Form 1040nr software For more information on figuring gains and losses from these transactions, see chapter 4 in Publication 550. Form 1040nr software For information on reporting the gains and losses, see the Instructions for Form 8949 and the Instructions for Schedule D (Form 1040). Form 1040nr software Form 1099-S. Form 1040nr software   An information return must be provided on certain real estate transactions. Form 1040nr software Generally, the person responsible for closing the transaction (the “real estate reporting person”) must report on Form 1099-S sales or exchanges of the following types of property. Form 1040nr software Land (improved or unimproved), including air space. Form 1040nr software An inherently permanent structure, including any residential, commercial, or industrial building. Form 1040nr software A condominium unit and its related fixtures and common elements (including land). Form 1040nr software Stock in a cooperative housing corporation. Form 1040nr software If you sold or exchanged any of the above types of property, the “real estate reporting person” must give you a copy of Form 1099-S or a statement containing the same information as the Form 1099-S. Form 1040nr software The “real estate reporting person” could include the buyer's attorney, your attorney, the title or escrow company, a mortgage lender, your broker, the buyer's broker, or the person acquiring the biggest interest in the property. Form 1040nr software   For more information see chapter 4 in Publication 550. Form 1040nr software Also, see the Instructions for Form 8949. Form 1040nr software Schedule D and Form 8949 Form 8949. Form 1040nr software   Individuals, corporations, and partnerships, use Form 8949 to report the following. Form 1040nr software    Sales or exchanges of capital assets, including stocks, bonds, etc. Form 1040nr software , and real estate (if not reported on another form or schedule such as Form 4684, 4797, 6252, 6781, or 8824). Form 1040nr software Include these transactions even if you did not receive a Form 1099-B or 1099-S. Form 1040nr software Gains from involuntary conversions (other than from casualty or theft) of capital assets not held for business or profit. Form 1040nr software Nonbusiness bad debts. Form 1040nr software   Individuals, If you are filing a joint return, complete as many copies of Form 8949 as you need to report all of your and your spouse's transactions. Form 1040nr software You and your spouse may list your transactions on separate forms or you may combine them. Form 1040nr software However, you must include on your Schedule D the totals from all Forms 8949 for both you and your spouse. Form 1040nr software    Corporations and electing large partnerships also use Form 8949 to report their share of gain or loss from a partnership, S Corporation, estate or trust. Form 1040nr software   Business entities meeting certain criteria, may have an exception to some of the normal requirements for completing Form 8949. Form 1040nr software See the Instructions for Form 8949. Form 1040nr software Schedule D. Form 1040nr software    Use Schedule D (Form 1040) to figure the overall gain or loss from transactions reported on Form 8949, and to report certain transactions you do not have to report on Form 8949. Form 1040nr software Before completing Schedule D, you may have to complete other forms as shown below. Form 1040nr software    Complete all applicable lines of Form 8949 before completing lines 1b, 2, 3, 8b, 9, or 10 of your applicable Schedule D. Form 1040nr software Enter on Schedule D the combined totals from all your Forms 8949. Form 1040nr software For a sale, exchange, or involuntary conversion of business property, complete Form 4797 (discussed later). Form 1040nr software For a like-kind exchange, complete Form 8824. Form 1040nr software See Reporting the exchange under Like-Kind Exchanges in chapter 1. Form 1040nr software For an installment sale, complete Form 6252. Form 1040nr software See Publication 537. Form 1040nr software For an involuntary conversion due to casualty or theft, complete Form 4684. Form 1040nr software See Publication 547, Casualties, Disasters, and Thefts. Form 1040nr software For a disposition of an interest in, or property used in, an activity to which the at-risk rules apply, complete Form 6198, At-Risk Limitations. Form 1040nr software See Publication 925, Passive Activity and At-Risk Rules. Form 1040nr software For a disposition of an interest in, or property used in, a passive activity, complete Form 8582, Passive Activity Loss Limitations. Form 1040nr software See Publication 925. Form 1040nr software For gains and losses from section 1256 contracts and straddles, complete Form 6781. Form 1040nr software See Publication 550. Form 1040nr software Personal-use property. Form 1040nr software   Report gain on the sale or exchange of property held for personal use (such as your home) on Form 8949 and Schedule D (Form 1040), as applicable. Form 1040nr software Loss from the sale or exchange of property held for personal use is not deductible. Form 1040nr software But if you had a loss from the sale or exchange of real estate held for personal use for which you received a Form 1099-S, report the transaction on Form 8949 and Schedule D, even though the loss is not deductible. Form 1040nr software See the Instructions for Schedule D (Form 1040) and the Instructions for Form 8949 for information on how to report the transaction. Form 1040nr software Long and Short Term Where you report a capital gain or loss depends on how long you own the asset before you sell or exchange it. Form 1040nr software The time you own an asset before disposing of it is the holding period. Form 1040nr software If you received a Form 1099-B, (or substitute statement) box 1c may help you determine whether the gain or loss is short-term or long-term. Form 1040nr software If you hold a capital asset 1 year or less, the gain or loss from its disposition is short term. Form 1040nr software Report it in Part I of Form 8949 and/or Schedule D, as applicable. Form 1040nr software If you hold a capital asset longer than 1 year, the gain or loss from its disposition is long term. Form 1040nr software Report it in Part II of Form 8949 and/or Schedule D, as applicable. Form 1040nr software   Table 4-1. Form 1040nr software Do I Have a Short-Term or Long-Term Gain or Loss? IF you hold the property. Form 1040nr software . Form 1040nr software . Form 1040nr software  THEN you have a. Form 1040nr software . Form 1040nr software . Form 1040nr software 1 year or less, Short-term capital gain or  loss. Form 1040nr software More than 1 year, Long-term capital gain or  loss. Form 1040nr software These distinctions are essential to correctly arrive at your net capital gain or loss. Form 1040nr software Capital losses are allowed in full against capital gains plus up to $3,000 of ordinary income. Form 1040nr software See Capital Gains Tax Rates, later. Form 1040nr software Holding period. Form 1040nr software   To figure if you held property longer than 1 year, start counting on the day following the day you acquired the property. Form 1040nr software The day you disposed of the property is part of your holding period. Form 1040nr software Example. Form 1040nr software If you bought an asset on June 19, 2012, you should start counting on June 20, 2012. Form 1040nr software If you sold the asset on June 19, 2013, your holding period is not longer than 1 year, but if you sold it on June 20, 2013, your holding period is longer than 1 year. Form 1040nr software Patent property. Form 1040nr software   If you dispose of patent property, you generally are considered to have held the property longer than 1 year, no matter how long you actually held it. Form 1040nr software For more information, see Patents in chapter 2. Form 1040nr software Inherited property. Form 1040nr software   If you inherit property, you are considered to have held the property longer than 1 year, regardless of how long you actually held it. Form 1040nr software Installment sale. Form 1040nr software   The gain from an installment sale of an asset qualifying for long-term capital gain treatment in the year of sale continues to be long term in later tax years. Form 1040nr software If it is short term in the year of sale, it continues to be short term when payments are received in later tax years. Form 1040nr software    The date the installment payment is received determines the capital gains rate that should be applied not the date the asset was sold under an installment contract. Form 1040nr software Nontaxable exchange. Form 1040nr software   If you acquire an asset in exchange for another asset and your basis for the new asset is figured, in whole or in part, by using your basis in the old property, the holding period of the new property includes the holding period of the old property. Form 1040nr software That is, it begins on the same day as your holding period for the old property. Form 1040nr software Example. Form 1040nr software You bought machinery on December 4, 2012. Form 1040nr software On June 4, 2013, you traded this machinery for other machinery in a nontaxable exchange. Form 1040nr software On December 5, 2013, you sold the machinery you got in the exchange. Form 1040nr software Your holding period for this machinery began on December 5, 2012. Form 1040nr software Therefore, you held it longer than 1 year. Form 1040nr software Corporate liquidation. Form 1040nr software   The holding period for property you receive in a liquidation generally starts on the day after you receive it if gain or loss is recognized. Form 1040nr software Profit-sharing plan. Form 1040nr software   The holding period of common stock withdrawn from a qualified contributory profit-sharing plan begins on the day following the day the plan trustee delivered the stock to the transfer agent with instructions to reissue the stock in your name. Form 1040nr software Gift. Form 1040nr software   If you receive a gift of property and your basis in it is figured using the donor's basis, your holding period includes the donor's holding period. Form 1040nr software For more information on basis, see Publication 551, Basis of Assets. Form 1040nr software Real property. Form 1040nr software   To figure how long you held real property, start counting on the day after you received title to it or, if earlier, the day after you took possession of it and assumed the burdens and privileges of ownership. Form 1040nr software   However, taking possession of real property under an option agreement is not enough to start the holding period. Form 1040nr software The holding period cannot start until there is an actual contract of sale. Form 1040nr software The holding period of the seller cannot end before that time. Form 1040nr software Repossession. Form 1040nr software   If you sell real property but keep a security interest in it and then later repossess it, your holding period for a later sale includes the period you held the property before the original sale, as well as the period after the repossession. Form 1040nr software Your holding period does not include the time between the original sale and the repossession. Form 1040nr software That is, it does not include the period during which the first buyer held the property. Form 1040nr software Nonbusiness bad debts. Form 1040nr software   Nonbusiness bad debts are short-term capital losses. Form 1040nr software For information on nonbusiness bad debts, see chapter 4 of Publication 550. Form 1040nr software    Net Gain or Loss The totals for short-term capital gains and losses and the totals for long-term capital gains and losses must be figured separately. Form 1040nr software Net short-term capital gain or loss. Form 1040nr software   Combine your short-term capital gains and losses, including your share of short-term capital gains or losses from partnerships, S corporations, and fiduciaries and any short-term capital loss carryover. Form 1040nr software Do this by adding all your short-term capital gains. Form 1040nr software Then add all your short-term capital losses. Form 1040nr software Subtract the lesser total from the other. Form 1040nr software The result is your net short-term capital gain or loss. Form 1040nr software Net long-term capital gain or loss. Form 1040nr software   Follow the same steps to combine your long-term capital gains and losses. Form 1040nr software Include the following items. Form 1040nr software Net section 1231 gain from Part I, Form 4797, after any adjustment for nonrecaptured section 1231 losses from prior tax years. Form 1040nr software Capital gain distributions from regulated investment companies (mutual funds) and real estate investment trusts. Form 1040nr software Your share of long-term capital gains or losses from partnerships, S corporations, and fiduciaries. Form 1040nr software Any long-term capital loss carryover. Form 1040nr software The result from combining these items with other long-term capital gains and losses is your net long-term capital gain or loss. Form 1040nr software Net gain. Form 1040nr software   If the total of your capital gains is more than the total of your capital losses, the difference is taxable. Form 1040nr software Different tax rates may apply to the part that is a net capital gain. Form 1040nr software See Capital Gains Tax Rates, later. Form 1040nr software Net loss. Form 1040nr software   If the total of your capital losses is more than the total of your capital gains, the difference is deductible. Form 1040nr software But there are limits on how much loss you can deduct and when you can deduct it. Form 1040nr software See Treatment of Capital Losses, next. Form 1040nr software    Treatment of Capital Losses If your capital losses are more than your capital gains, you can deduct the difference as a capital loss deduction even if you do not have ordinary income to offset it. Form 1040nr software The yearly limit on the amount of the capital loss you can deduct is $3,000 ($1,500 if you are married and file a separate return). Form 1040nr software Table 4-2. Form 1040nr software Holding Period for Different Types of Acquisitions Type of acquisition: When your holding period starts: Stocks and bonds bought on a securities market Day after trading date you bought security. Form 1040nr software Ends on trading date you sold security. Form 1040nr software U. Form 1040nr software S. Form 1040nr software Treasury notes and bonds If bought at auction, day after notification of bid acceptance. Form 1040nr software If bought through subscription, day after subscription was submitted. Form 1040nr software Nontaxable exchanges Day after date you acquired old property. Form 1040nr software Gift If your basis is giver's adjusted basis, same day as giver's holding period began. Form 1040nr software If your basis is FMV, day after date of gift. Form 1040nr software Real property bought Generally, day after date you received title to the property. Form 1040nr software Real property repossessed Day after date you originally received title to the property, but does not include time between the original sale and date of repossession. Form 1040nr software Capital loss carryover. Form 1040nr software   Generally, you have a capital loss carryover if either of the following situations applies to you. Form 1040nr software Your net loss is more than the yearly limit. Form 1040nr software Your taxable income without your deduction for exemptions is less than zero. Form 1040nr software If either of these situations applies to you for 2013, see Capital Losses under Reporting Capital Gains and Losses in chapter 4 of Publication 550 to figure the amount you can carryover to 2014. Form 1040nr software Example. Form 1040nr software Bob and Gloria Sampson sold property in 2013. Form 1040nr software The sale resulted in a capital loss of $7,000. Form 1040nr software The Sampsons had no other capital transactions. Form 1040nr software On their joint 2013 return, the Sampsons deduct $3,000, the yearly limit. Form 1040nr software They had taxable income of $2,000. Form 1040nr software The unused part of the loss, $4,000 ($7,000 − $3,000), is carried over to 2014. Form 1040nr software If the Sampsons' capital loss had been $2,000, it would not have been more than the yearly limit. Form 1040nr software Their capital loss deduction would have been $2,000. Form 1040nr software They would have no carryover to 2014. Form 1040nr software Short-term and long-term losses. Form 1040nr software   When you carry over a loss, it retains its original character as either long term or short term. Form 1040nr software A short-term loss you carry over to the next tax year is added to short-term losses occurring in that year. Form 1040nr software A long-term loss you carry over to the next tax year is added to long-term losses occurring in that year. Form 1040nr software A long-term capital loss you carry over to the next year reduces that year's long-term gains before its short-term gains. Form 1040nr software   If you have both short-term and long-term losses, your short-term losses are used first against your allowable capital loss deduction. Form 1040nr software If, after using your short-term losses, you have not reached the limit on the capital loss deduction, use your long-term losses until you reach the limit. Form 1040nr software To figure your capital loss carryover from 2013 to 2014 use the Capital Loss Carryover Worksheet in the 2013 Instructions for Schedule D (Form 1040). Form 1040nr software Joint and separate returns. Form 1040nr software   On a joint return, the capital gains and losses of spouses are figured as the gains and losses of an individual. Form 1040nr software If you are married and filing a separate return, your yearly capital loss deduction is limited to $1,500. Form 1040nr software Neither you nor your spouse can deduct any part of the other's loss. Form 1040nr software   If you and your spouse once filed separate returns and are now filing a joint return, combine your separate capital loss carryovers. Form 1040nr software However, if you and your spouse once filed jointly and are now filing separately, any capital loss carryover from the joint return can be deducted only on the return of the spouse who actually had the loss. Form 1040nr software Death of taxpayer. Form 1040nr software   Capital losses cannot be carried over after a taxpayer's death. Form 1040nr software They are deductible only on the final income tax return filed on the decedent's behalf. Form 1040nr software The yearly limit discussed earlier still applies in this situation. Form 1040nr software Even if the loss is greater than the limit, the decedent's estate cannot deduct the difference or carry it over to following years. Form 1040nr software Corporations. Form 1040nr software   A corporation can deduct capital losses only up to the amount of its capital gains. Form 1040nr software In other words, if a corporation has a net capital loss, it cannot be deducted in the current tax year. Form 1040nr software It must be carried to other tax years and deducted from capital gains occurring in those years. Form 1040nr software For more information, see Publication 542. Form 1040nr software Capital Gains Tax Rates The tax rates that apply to a net capital gain are generally lower than the tax rates that apply to other income. Form 1040nr software These lower rates are called the maximum capital gains rates. Form 1040nr software The term “net capital gain” means the amount by which your net long-term capital gain for the year is more than your net short-term capital loss. Form 1040nr software For 2013, the maximum tax rates for individuals are 0%, 15%, 20%, 25%, and 28%. Form 1040nr software Also, individuals, use the Qualified Dividends and Capital Gain Worksheet in the Instructions for Form 1040, or the Schedule D Tax Computation Worksheet in the Instructions for Schedule D (Form 1040) (whichever applies) to figure your tax if you have qualified dividends or net capital gain. Form 1040nr software For more information, see chapter 4 of Publication 550. Form 1040nr software Also see the Instructions for Schedule D (Form 1040). Form 1040nr software Unrecaptured section 1250 gain. Form 1040nr software   Generally, this is the part of any long-term capital gain on section 1250 property (real property) that is due to depreciation. Form 1040nr software Unrecaptured section 1250 gain cannot be more than the net section 1231 gain or include any gain otherwise treated as ordinary income. Form 1040nr software Use the worksheet in the Schedule D instructions to figure your unrecaptured section 1250 gain. Form 1040nr software For more information about section 1250 property and net section 1231 gain, see chapter 3. Form 1040nr software Form 4797 Use Form 4797 to report: The sale or exchange of: Property used in your trade or business; Depreciable and amortizable property; Oil, gas, geothermal, or other mineral properties; and Section 126 property. Form 1040nr software The involuntary conversion (from other than casualty or theft) of property used in your trade or business and capital assets held in connection with a trade or business or a transaction entered into for profit. Form 1040nr software The disposition of noncapital assets (other than inventory or property held primarily for sale to customers in the ordinary course of your trade or business). Form 1040nr software The disposition of capital assets not reported on Schedule D. Form 1040nr software The gain or loss (including any related recapture) for partners and S corporation shareholders from certain section 179 property dispositions by partnerships (other than electing large partnerships) and S corporations. Form 1040nr software The computation of recapture amounts under sections 179 and 280F(b)(2) when the business use of section 179 or listed property decreases to 50% or less. Form 1040nr software Gains or losses treated as ordinary gains or losses, if you are a trader in securities or commodities and made a mark-to-market election under Internal Revenue Code section 475(f). Form 1040nr software You can use Form 4797 with Form 1040, 1065, 1120, or 1120S. Form 1040nr software Section 1231 gains and losses. Form 1040nr software   Show any section 1231 gains and losses in Part I. Form 1040nr software Carry a net gain to Schedule D (Form 1040) as a long-term capital gain. Form 1040nr software Carry a net loss to Part II of Form 4797 as an ordinary loss. Form 1040nr software   If you had any nonrecaptured net section 1231 losses from the preceding 5 tax years, reduce your net gain by those losses and report the amount of the reduction as an ordinary gain in Part II. Form 1040nr software Report any remaining gain on Schedule D (Form 1040). Form 1040nr software See Section 1231 Gains and Losses in chapter 3. Form 1040nr software Ordinary gains and losses. Form 1040nr software   Show any ordinary gains and losses in Part II. Form 1040nr software This includes a net loss or a recapture of losses from prior years figured in Part I of Form 4797. Form 1040nr software It also includes ordinary gain figured in Part III. Form 1040nr software Mark-to-market election. Form 1040nr software   If you made a mark-to-market election, you should report all gains and losses from trading as ordinary gains and losses in Part II of Form 4797, instead of as capital gains and losses on Form 8949 and Schedule D (Form 1040). Form 1040nr software See the Instructions for Form 4797. Form 1040nr software Also see Special Rules for Traders in Securities, in chapter 4 of Publication 550. Form 1040nr software Ordinary income from depreciation. Form 1040nr software   Figure the ordinary income from depreciation on personal property and additional depreciation on real property (as discussed in chapter 3) in Part III. Form 1040nr software Carry the ordinary income to Part II of Form 4797 as an ordinary gain. Form 1040nr software Carry any remaining gain to Part I as section 1231 gain, unless it is from a casualty or theft. Form 1040nr software Carry any remaining gain from a casualty or theft to Form 4684. Form 1040nr software Prev  Up  Next   Home   More Online Publications