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Form4868

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Form4868

Form4868 Publication 504 - Main Content Table of Contents Filing StatusUnmarried persons. Form4868 Married persons. Form4868 Same-sex marriage. Form4868 Exception. Form4868 Married Filing Jointly Married Filing Separately Head of Household ExemptionsPersonal Exemptions Exemptions for Dependents Phaseout of Exemptions AlimonyInvalid decree. Form4868 Amended instrument. Form4868 General Rules Instruments Executed After 1984 Instruments Executed Before 1985 Qualified Domestic Relations OrderRollovers. Form4868 Individual Retirement Arrangements Property SettlementsTransfer Between Spouses Gift Tax on Property Settlements Sale of Jointly-Owned Property Costs of Getting a Divorce Tax Withholding and Estimated Tax Community PropertyCommunity Income Alimony (Community Income) How To Get Tax Help Filing Status Your filing status is used in determining whether you must file a return, your standard deduction, and the correct tax. Form4868 It may also be used in determining whether you can claim certain other deductions and credits. Form4868 The filing status you can choose depends partly on your marital status on the last day of your tax year. Form4868 Marital status. Form4868   If you are unmarried, your filing status is single or, if you meet certain requirements, head of household or qualifying widow(er). Form4868 If you are married, your filing status is either married filing a joint return or married filing a separate return. Form4868 For information about the single and qualifying widow(er) filing statuses, see Publication 501. Form4868 Unmarried persons. Form4868   You are unmarried for the whole year if either of the following applies. Form4868 You have obtained a final decree of divorce or separate maintenance by the last day of your tax year. Form4868 You must follow your state law to determine if you are divorced or legally separated. Form4868 Exception. Form4868 If you and your spouse obtain a divorce in one year for the sole purpose of filing tax returns as unmarried individuals, and at the time of divorce you intend to remarry each other and do so in the next tax year, you and your spouse must file as married individuals. Form4868 You have obtained a decree of annulment, which holds that no valid marriage ever existed. Form4868 You must file amended returns (Form 1040X, Amended U. Form4868 S. Form4868 Individual Income Tax Return) for all tax years affected by the annulment that are not closed by the statute of limitations. Form4868 The statute of limitations generally does not end until 3 years (including extensions) after the date you file your original return or within 2 years after the date you pay the tax. Form4868 On the amended return you will change your filing status to single or, if you meet certain requirements, head of household. Form4868 Married persons. Form4868   You are married for the whole year if you are separated but you have not obtained a final decree of divorce or separate maintenance by the last day of your tax year. Form4868 An interlocutory decree is not a final decree. Form4868 Same-sex marriage. Form4868   For federal tax purposes, individuals of the same sex are considered married if they were lawfully married in a state (or foreign country) whose laws authorize the marriage of two individuals of the same sex, even if the state (or foreign country) in which they now live does not recognize same-sex marriage. Form4868 The term "spouse" includes an individual married to a person of the same sex if the couple is lawfully married under state (or foreign) law. Form4868 However, individuals who have entered into a registered domestic partnership, civil union, or other similar relationship that is not considered a marriage under state (or foreign) law are not considered married for federal tax purposes. Form4868 For more details, see Publication 501. Form4868 Exception. Form4868   If you live apart from your spouse, under certain circumstances, you may be considered unmarried and can file as head of household. Form4868 See Head of Household , later. Form4868 Married Filing Jointly If you are married, you and your spouse can choose to file a joint return. Form4868 If you file jointly, you both must include all your income, exemptions, deductions, and credits on that return. Form4868 You can file a joint return even if one of you had no income or deductions. Form4868 If both you and your spouse have income, you should usually figure your tax on both a joint return and separate returns (using the filing status of married filing separately) to see which gives the two of you the lower combined tax. Form4868 Nonresident alien. Form4868   To file a joint return, at least one of you must be a U. Form4868 S. Form4868 citizen or resident alien at the end of the tax year. Form4868 If either of you was a nonresident alien at any time during the tax year, you can file a joint return only if you agree to treat the nonresident spouse as a resident of the United States. Form4868 This means that your combined worldwide incomes are subject to U. Form4868 S. Form4868 income tax. Form4868 These rules are explained in Publication 519, U. Form4868 S. Form4868 Tax Guide for Aliens. Form4868 Signing a joint return. Form4868   Both you and your spouse generally must sign the return, or it will not be considered a joint return. Form4868 Joint and individual liability. Form4868   Both you and your spouse may be held responsible, jointly and individually, for the tax and any interest or penalty due on your joint return. Form4868 This means that one spouse may be held liable for all the tax due even if all the income was earned by the other spouse. Form4868 Divorced taxpayers. Form4868   If you are divorced, you are jointly and individually responsible for any tax, interest, and penalties due on a joint return for a tax year ending before your divorce. Form4868 This responsibility applies even if your divorce decree states that your former spouse will be responsible for any amounts due on previously filed joint returns. Form4868 Relief from joint liability. Form4868   In some cases, a spouse may be relieved of the tax, interest, and penalties on a joint return. Form4868 You can ask for relief no matter how small the liability. Form4868   There are three types of relief available. Form4868 Innocent spouse relief. Form4868 Separation of liability, which applies to joint filers who are divorced, widowed, legally separated, or who have not lived together for the 12 months ending on the date election of this relief is filed. Form4868 Equitable relief. Form4868   Married persons who live in community property states, but who did not file joint returns, may also qualify for relief from liability arising from community property law or for equitable relief. Form4868 See Relief from liability arising from community property law , later, under Community Property. Form4868    Each kind of relief has different requirements. Form4868 You must file Form 8857 to request relief under any of these categories. Form4868 Publication 971 explains these kinds of relief and who may qualify for them. Form4868 You can also find information on our website at IRS. Form4868 gov. Form4868 Tax refund applied to spouse's debts. Form4868   The overpayment shown on your joint return may be used to pay the past-due amount of your spouse's debts. Form4868 This includes your spouse's federal tax, state income tax, child or spousal support payments, or a federal nontax debt, such as a student loan. Form4868 You can get a refund of your share of the overpayment if you qualify as an injured spouse. Form4868 Injured spouse. Form4868   You are an injured spouse if you file a joint return and all or part of your share of the overpayment was, or is expected to be, applied against your spouse's past-due debts. Form4868 An injured spouse can get a refund for his or her share of the overpayment that would otherwise be used to pay the past-due amount. Form4868   To be considered an injured spouse, you must: Have made and reported tax payments (such as federal income tax withheld from wages or estimated tax payments), or claimed a refundable tax credit, such as the earned income credit or additional child tax credit on the joint return, and Not be legally obligated to pay the past-due amount. Form4868 Note. Form4868 If the injured spouse's permanent home is in a community property state, then the injured spouse must only meet (2). Form4868 For more information, see Publication 555. Form4868    Refunds that involve community property states must be divided according to local law. Form4868 If you live in a community property state in which all community property is subject to the debts of either spouse, your entire refund is generally used to pay those debts. Form4868   If you are an injured spouse, you must file Form 8379 to have your portion of the overpayment refunded to you. Form4868 Follow the instructions for the form. Form4868   If you have not filed your joint return and you know that your joint refund will be offset, file Form 8379 with your return. Form4868 You should receive your refund within 14 weeks from the date the paper return is filed or within 11 weeks from the date the return is filed electronically. Form4868   If you filed your joint return and your joint refund was offset, file Form 8379 by itself. Form4868 When filed after offset, it can take up to 8 weeks to receive your refund. Form4868 Do not attach the previously filed tax return, but do include copies of all Forms W-2, Wage and Tax Statement, and W-2G, Certain Gambling Winnings, for both spouses and any Forms 1099 that show income tax withheld. Form4868    An injured spouse claim is different from an innocent spouse relief request. Form4868 An injured spouse uses Form 8379 to request an allocation of the tax overpayment attributed to each spouse. Form4868 An innocent spouse uses Form 8857 to request relief from joint liability for tax, interest, and penalties on a joint return for items of the other spouse (or former spouse) that were incorrectly reported on or omitted from the joint return. Form4868 For information on innocent spouses, see Relief from joint liability, earlier. Form4868 Married Filing Separately If you and your spouse file separate returns, you should each report only your own income, exemptions, deductions, and credits on your individual return. Form4868 You can file a separate return even if only one of you had income. Form4868 For information on exemptions you can claim on your separate return, see Exemptions , later. Form4868 Community or separate income. Form4868   If you live in a community property state and file a separate return, your income may be separate income or community income for income tax purposes. Form4868 For more information, see Community Income under Community Property, later. Form4868 Separate liability. Form4868   If you and your spouse file separately, you each are responsible only for the tax due on your own return. Form4868 Itemized deductions. Form4868   If you and your spouse file separate returns and one of you itemizes deductions, the other spouse cannot use the standard deduction and should also itemize deductions. Form4868 Table 1. Form4868 Itemized Deductions on Separate Returns This table shows itemized deductions you can claim on your married filing separate return whether you paid the expenses separately with your own funds or jointly with your spouse. Form4868  Caution: If you live in a community property state, these rules do not apply. Form4868 See Community Property. Form4868 IF you paid . Form4868 . Form4868 . Form4868 AND you . Form4868 . Form4868 . Form4868 THEN you can deduct on your separate federal return. Form4868 . Form4868 . Form4868   medical expenses   paid with funds deposited in a joint checking account in which you and your spouse have an equal interest     half of the total medical expenses, subject to certain limits, unless you can show that you alone paid the expenses. Form4868     state income tax   file a separate state income tax return     the state income tax you alone paid during the year. Form4868         file a joint state income tax return and you and your spouse are jointly and individually liable for the full amount of the state income tax     the state income tax you alone paid during the year. Form4868         file a joint state income tax return and you  are liable for only your own share of state  income tax     the smaller of: the state income tax you alone paid during the year, or the total state income tax you and your spouse paid during the year multiplied by the following fraction. Form4868 The numerator is your gross income and the denominator  is your combined gross income. Form4868     property tax   paid the tax on property held as tenants by the entirety     the property tax you alone paid. Form4868     mortgage interest   paid the interest on a qualified home1 held  as tenants by the entirety     the mortgage interest you alone paid. Form4868     casualty loss   have a casualty loss on a home you own  as tenants by the entirety     half of the loss, subject to the deduction limits. Form4868 Neither spouse may report the total casualty loss. Form4868 1 For more information on a qualified home and deductible mortgage interest, see Publication 936, Home Mortgage Interest Deduction. Form4868 Dividing itemized deductions. Form4868   You may be able to claim itemized deductions on a separate return for certain expenses that you paid separately or jointly with your spouse. Form4868 See Table 1, later. Form4868 Separate returns may give you a higher tax. Form4868   Some married couples file separate returns because each wants to be responsible only for his or her own tax. Form4868 There is no joint liability. Form4868 But in almost all instances, if you file separate returns, you will pay more combined federal tax than you would with a joint return. Form4868 This is because the following special rules apply if you file a separate return. Form4868 Your tax rate generally will be higher than it would be on a joint return. Form4868 Your exemption amount for figuring the alternative minimum tax will be half of that allowed a joint return filer. Form4868 You cannot take the credit for child and dependent care expenses in most cases. Form4868 You cannot take the earned income credit. Form4868 You cannot take the exclusion or credit for adoption expenses in most cases. Form4868 You cannot take the credit for higher education expenses (American opportunity and lifetime learning credits), the deduction for student loan interest, or the tuition and fees deduction. Form4868 You cannot exclude the interest from qualified savings bonds that you used for higher education expenses. Form4868 If you lived with your spouse at any time during the tax year: You cannot claim the credit for the elderly or the disabled, and You will have to include in income more (up to 85%) of any social security or equivalent railroad retirement benefits you received. Form4868 Your income limits that reduce the child tax credit, the retirement savings contributions credit, itemized deductions, and the deduction for personal exemptions are half of the limits for a joint return filer. Form4868 Your capital loss deduction limit is $1,500 (instead of $3,000 on a joint return). Form4868 Your basic standard deduction, if allowable, is half of that allowed a joint return filer. Form4868 See Itemized deductions , earlier. Form4868 Joint return after separate returns. Form4868   If either you or your spouse (or both of you) file a separate return, you generally can change to a joint return within 3 years from the due date (not including extensions) of the separate return or returns. Form4868 This applies to a return either of you filed claiming married filing separately, single, or head of household filing status. Form4868 Use Form 1040X to change your filing status. Form4868 Separate returns after joint return. Form4868   After the due date of your return, you and your spouse cannot file separate returns if you previously filed a joint return. Form4868 Exception. Form4868   A personal representative for a decedent can change from a joint return elected by the surviving spouse to a separate return for the decedent. Form4868 The personal representative has 1 year from the due date (including extensions) of the joint return to make the change. Form4868 Head of Household Filing as head of household has the following advantages. Form4868 You can claim the standard deduction even if your spouse files a separate return and itemizes deductions. Form4868 Your standard deduction is higher than is allowed if you claim a filing status of single or married filing separately. Form4868 Your tax rate usually will be lower than it is if you claim a filing status of single or married filing separately. Form4868 You may be able to claim certain credits (such as the dependent care credit and the earned income credit) you cannot claim if your filing status is married filing separately. Form4868 Income limits that reduce your child tax credit, retirement savings contributions credit, itemized deductions, and the deduction for personal exemptions are higher than the income limits if you claim a filing status of married filing separately. Form4868 Requirements. Form4868   You may be able to file as head of household if you meet all the following requirements. Form4868 You are unmarried or “considered unmarried” on the last day of the year. Form4868 You paid more than half the cost of keeping up a home for the year. Form4868 A “qualifying person” lived with you in the home for more than half the year (except for temporary absences, such as school). Form4868 However, if the “qualifying person” is your dependent parent, he or she does not have to live with you. Form4868 See Special rule for parent , later, under Qualifying person. Form4868 Considered unmarried. Form4868   You are considered unmarried on the last day of the tax year if you meet all the following tests. Form4868 You file a separate return. Form4868 A separate return includes a return claiming married filing separately, single, or head of household filing status. Form4868 You paid more than half the cost of keeping up your home for the tax year. Form4868 Your spouse did not live in your home during the last 6 months of the tax year. Form4868 Your spouse is considered to live in your home even if he or she is temporarily absent due to special circumstances. Form4868 See Temporary absences , later. Form4868 Your home was the main home of your child, stepchild, or foster child for more than half the year. Form4868 (See Qualifying person , later, for rules applying to a child's birth, death, or temporary absence during the year. Form4868 ) You must be able to claim an exemption for the child. Form4868 However, you meet this test if you cannot claim the exemption only because the noncustodial parent can claim the child using the rule described later in Special rule for divorced or separated parents (or parents who live apart) under Exemptions for Dependents. Form4868 The general rules for claiming an exemption for a dependent are shown later in Table 3. Form4868    If you were considered married for part of the year and lived in a community property state (one of the states listed later under Community Property), special rules may apply in determining your income and expenses. Form4868 See Publication 555 for more information. Form4868 Nonresident alien spouse. Form4868   If your spouse was a nonresident alien at any time during the tax year, and you have not chosen to treat your spouse as a resident alien, you are considered unmarried for head of household purposes. Form4868 However, your spouse is not a qualifying person for head of household purposes. Form4868 You must have another qualifying person and meet the other requirements to file as head of household. Form4868 Keeping up a home. Form4868   You are keeping up a home only if you pay more than half the cost of its upkeep for the year. Form4868 This includes rent, mortgage interest, real estate taxes, insurance on the home, repairs, utilities, and food eaten in the home. Form4868 This does not include the cost of clothing, education, medical treatment, vacations, life insurance, or transportation for any member of the household. Form4868 Qualifying person. Form4868    Table 2, later, shows who can be a qualifying person. Form4868 Any person not described in Table 2 is not a qualifying person. Form4868   Generally, the qualifying person must live with you for more than half of the year. Form4868 Table 2. Form4868 Who Is a Qualifying Person Qualifying You To File as Head of Household?1 Caution. Form4868 See the text of this publication for the other requirements you must meet to claim head of household filing status. Form4868 IF the person is your . Form4868 . Form4868 . Form4868 AND . Form4868 . Form4868 . Form4868 THEN that person is . Form4868 . Form4868 . Form4868   qualifying child (such as a son, daughter, or grandchild who lived with you more than half the year and meets certain other tests)2 he or she is single a qualifying person, whether or not you can claim an exemption for the person. Form4868     he or she is married and you can claim an exemption for him or her a qualifying person. Form4868     he or she is married and you cannot claim an exemption for him or her not a qualifying person. Form4868 3     qualifying relative4 who is your father or mother you can claim an exemption for him or her5 a qualifying person. Form4868 6     you cannot claim an exemption for him or her not a qualifying person. Form4868     qualifying relative4 other than your father or mother (such as a grandparent, brother, or sister who meets certain tests) he or she lived with you more than half the year, and he or she is related to you in one of the ways listed under Relatives who do not have to live with you in Publication 501 and you can claim an exemption for him or her5 a qualifying person. Form4868     he or she did not live with you more than half the year not a qualifying person. Form4868     he or she is not related to you in one of the ways listed under Relatives who do not have to live with you in Publication 501 and is your qualifying relative only because he or she lived with you all year as a member of your household not a qualifying person. Form4868     you cannot claim an exemption for him or her not a qualifying person. Form4868   1 A person cannot qualify more than one taxpayer to use the head of household filing status for the year. Form4868 2 See Table 3, later, for the tests that must be met to be a qualifying child. Form4868 Note. Form4868 If you are a noncustodial parent, the term “qualifying child” for head of household filing status does not include a child who is your qualifying child for exemption purposes only because of the rules described under Children of Divorced or Separated Parents (or Parents Who Live Apart) under Exemptions for Dependents, later. Form4868 If you are the custodial parent and those rules apply, the child is generally your qualifying child for head of household filing status even though the child is not a qualifying child for whom you can claim an exemption. Form4868 3 This person is a qualifying person if the only reason you cannot claim the exemption is that you can be claimed as a dependent on someone else's return. Form4868 4 See Table 3, later, for the tests that must be met to be a qualifying relative. Form4868 5 If you can claim an exemption for a person only because of a multiple support agreement, that person is not a qualifying person. Form4868 See Multiple Support Agreement in Publication 501. Form4868 6 See Special rule for parent . Form4868 Special rule for parent. Form4868   If your qualifying person is your father or mother, you may be eligible to file as head of household even if your father or mother does not live with you. Form4868 However, you must be able to claim an exemption for your father or mother. Form4868 Also, you must pay more than half the cost of keeping up a home that was the main home for the entire year for your father or mother. Form4868 You are keeping up a main home for your father or mother if you pay more than half the cost of keeping your parent in a rest home or home for the elderly. Form4868 Death or birth. Form4868   If the person for whom you kept up a home was born or died in 2013, you still may be able to file as head of household. Form4868 If the person is your qualifying child, the child must have lived with you for more than half the part of the year he or she was alive. Form4868 If the person is anyone else, see Publication 501. Form4868 Temporary absences. Form4868   You and your qualifying person are considered to live together even if one or both of you are temporarily absent from your home due to special circumstances such as illness, education, business, vacation, or military service. Form4868 It must be reasonable to assume that the absent person will return to the home after the temporary absence. Form4868 You must continue to keep up the home during the absence. Form4868 Kidnapped child. Form4868   You may be eligible to file as head of household even if the child who is your qualifying person has been kidnapped. Form4868 You can claim head of household filing status if all the following statements are true. Form4868 The child must be presumed by law enforcement authorities to have been kidnapped by someone who is not a member of your family or the child's family. Form4868 In the year of the kidnapping, the child lived with you for more than half the part of the year before the kidnapping. Form4868 You would have qualified for head of household filing status if the child had not been kidnapped. Form4868   This treatment applies for all years until the earlier of: The year the child is returned, The year there is a determination that the child is dead, or The year the child would have reached age 18. Form4868 More information. Form4868   For more information on filing as head of household, see Publication 501. Form4868 Exemptions You can deduct $3,900 for each exemption you claim in 2013. Form4868 However, if your adjusted gross income is more than $150,000, see Phaseout of Exemptions , later. Form4868 There are two types of exemptions: personal exemptions and exemptions for dependents. Form4868 If you are entitled to claim an exemption for a dependent (such as your child), that dependent cannot claim his or her personal exemption on his or her own tax return. Form4868 Personal Exemptions You can claim your own exemption unless someone else can claim it. Form4868 If you are married, you may be able to take an exemption for your spouse. Form4868 These are called personal exemptions. Form4868 Exemption for Your Spouse Your spouse is never considered your dependent. Form4868 Joint return. Form4868   On a joint return, you can claim one exemption for yourself and one for your spouse. Form4868   If your spouse had any gross income, you can claim his or her exemption only if you file a joint return. Form4868 Separate return. Form4868   If you file a separate return, you can take an exemption for your spouse only if your spouse had no gross income, is not filing a return, and was not the dependent of another taxpayer. Form4868 If your spouse is the dependent of another taxpayer, you cannot claim an exemption for your spouse even if the other taxpayer does not actually claim your spouse's exemption. Form4868 Alimony paid. Form4868   If you paid alimony to your spouse, you cannot take an exemption for your spouse. Form4868 This is because alimony is gross income to the spouse who received it. Form4868 Divorced or separated spouse. Form4868   If you obtained a final decree of divorce or separate maintenance during the year, you cannot take your former spouse's exemption. Form4868 This rule applies even if you provided all of your former spouse's support. Form4868 Exemptions for Dependents You are allowed one exemption for each person you can claim as a dependent. Form4868 You can claim an exemption for a dependent even if your dependent files a return. Form4868 The term “dependent” means: A qualifying child, or A qualifying relative. Form4868 Table 3 shows the tests that must be met to be either a qualifying child or qualifying relative, plus the additional requirements for claiming an exemption for a dependent. Form4868 For detailed information, see Publication 501. Form4868   Dependent not allowed a personal exemption. Form4868 If you can claim an exemption for your dependent, the dependent cannot claim his or her own exemption on his or her own tax return. Form4868 This is true even if you do not claim the dependent's exemption on your return. Form4868 It is also true if the decedent's exemption on your return is reduced or eliminated under the phaseout rule described under Phaseout of Exemptions, later. Form4868 Table 3. Form4868 Overview of the Rules for Claiming an Exemption for a Dependent Caution. Form4868 This table is only an overview of the rules. Form4868 For details, see Publication 501. Form4868 • You cannot claim any dependents if you, or your spouse if filing jointly, could be claimed as a dependent by another taxpayer. Form4868 • You cannot claim a married person who files a joint return as a dependent unless that joint return is only a claim for refund and there would be no tax liability for either spouse on separate returns. Form4868 • You cannot claim a person as a dependent unless that person is a U. Form4868 S. Form4868 citizen, U. Form4868 S. Form4868 resident alien, U. Form4868 S. Form4868 national, or a resident of Canada or Mexico. Form4868 1 • You cannot claim a person as a dependent unless that person is your qualifying child or qualifying relative. Form4868   Tests To Be a Qualifying Child   Tests To Be a Qualifying Relative 1. Form4868     2. Form4868       3. Form4868    4. Form4868    5. Form4868    The child must be your son, daughter, stepchild, foster child, brother, sister, half brother, half sister, stepbrother, stepsister, or a descendant of any of them. Form4868   The child must be (a) under age 19 at the end of the year and younger than you (or your spouse if filing jointly), (b) under age 24 at the end of the year, a student, and younger than you (or your spouse if filing jointly), or (c) any age if permanently and totally disabled. Form4868   The child must have lived with you for more than half of the year. Form4868 2   The child must not have provided more than half of his or her own support for the year. Form4868   The child is not filing a joint return for the year (unless that joint return is filed only as a claim for refund of withheld income tax or estimated tax paid). Form4868   1. Form4868    2. Form4868       3. Form4868    4. Form4868 The person cannot be your qualifying child or the qualifying child of anyone else. Form4868   The person either (a) must be related to you in one of the ways listed under Relatives who do not have to live with you in Publication 501 or (b) must live with you all year as a member of your household 2 (and your relationship must not violate local law). Form4868   The person's gross income for the year must be less than $3,900. Form4868 3   You must provide more than half of the person's total support for the year. Form4868 4 If the child meets the rules to be a qualifying child of more than one person, only one person can actually treat the child as a qualifying child. Form4868 See Special Rule for Qualifying Child of More Than One Person , later, to find out which person is the person entitled to claim the child as a qualifying child. Form4868     1 Exception exists for certain adopted children. Form4868 2 Exceptions exist for temporary absences, children who were born or died during the year, children of divorced or separated parents (or parents who live apart), and kidnapped children. Form4868 3 Exception exists for persons who are disabled and have income from a sheltered workshop. Form4868 4 Exceptions exist for multiple support agreements, children of divorced or separated parents (or parents who live apart), and kidnapped children. Form4868 See Publication 501. Form4868 You may be entitled to a child tax credit for each qualifying child who was under age 17 at the end of the year if you claimed an exemption for that child. Form4868 For more information, see the instructions for your tax return if you file Form 1040A or 1040. Form4868 Children of Divorced or Separated Parents (or Parents Who Live Apart) In most cases, because of the residency test (see item 3 under Tests To Be a Qualifying Child in Table 3), a child of divorced or separated parents is the qualifying child of the custodial parent. Form4868 However, the child will be treated as the qualifying child of the noncustodial parent if the special rule (discussed next) applies. Form4868 Special rule for divorced or separated parents (or parents who live apart). Form4868   A child will be treated as the qualifying child of his or her noncustodial parent if all four of the following statements are true. Form4868 The parents: Are divorced or legally separated under a decree of divorce or separate maintenance, Are separated under a written separation agreement, or Lived apart at all times during the last 6 months of the year, whether or not they are or were married. Form4868 The child received over half of his or her support for the year from the parents. Form4868 The child is in the custody of one or both parents for more than half of the year. Form4868 Either of the following applies. Form4868 The custodial parent signs a written declaration, discussed later, that he or she will not claim the child as a dependent for the year, and the noncustodial parent attaches this written declaration to his or her return. Form4868 (If the decree or agreement went into effect after 1984, see Divorce decree or separation agreement that went into effect after 1984 and before 2009 , later. Form4868 A pre-1985 decree of divorce or separate maintenance or written separation agreement that applies to 2013 states that the noncustodial parent can claim the child as a dependent, the decree or agreement was not changed after 1984 to say the noncustodial parent cannot claim the child as a dependent, and the noncustodial parent provides at least $600 for the child's support during 2013. Form4868 See Child support under pre-1985 agreement , later. Form4868 Custodial parent and noncustodial parent. Form4868   The custodial parent is the parent with whom the child lived for the greater number of nights during the year. Form4868 The other parent is the noncustodial parent. Form4868   If the parents divorced or separated during the year and the child lived with both parents before the separation, the custodial parent is the one with whom the child lived for the greater number of nights during the rest of the year. Form4868   A child is treated as living with a parent for a night if the child sleeps: At that parent's home, whether or not the parent is present, or In the company of the parent, when the child does not sleep at a parent's home (for example, the parent and child are on vacation together). Form4868 Equal number of nights. Form4868   If the child lived with each parent for an equal number of nights during the year, the custodial parent is the parent with the higher adjusted gross income. Form4868 December 31. Form4868   The night of December 31 is treated as part of the year in which it begins. Form4868 For example, December 31, 2013, is treated as part of 2013. Form4868 Emancipated child. Form4868   If a child is emancipated under state law, the child is treated as not living with either parent. Form4868 See Examples 5 and 6 . Form4868 Absences. Form4868    If a child was not with either parent on a particular night (because, for example, the child was staying at a friend's house), the child is treated as living with the parent with whom the child normally would have lived for that night, except for the absence. Form4868 But if it cannot be determined with which parent the child normally would have lived or if the child would not have lived with either parent that night, the child is treated as not living with either parent that night. Form4868 Parent works at night. Form4868   If, due to a parent's nighttime work schedule, a child lives for a greater number of days but not nights with the parent who works at night, that parent is treated as the custodial parent. Form4868 On a school day, the child is treated as living at the primary residence registered with the school. Form4868 Example 1 – child lived with one parent greater number of nights. Form4868 You and your child’s other parent are divorced. Form4868 In 2013, your child lived with you 210 nights and with the other parent 156 nights. Form4868 You are the custodial parent. Form4868 Example 2 – child is away at camp. Form4868 In 2013, your daughter lives with each parent for alternate weeks. Form4868 In the summer, she spends 6 weeks at summer camp. Form4868 During the time she is at camp, she is treated as living with you for 3 weeks and with her other parent, your ex-spouse, for 3 weeks because this is how long she would have lived with each parent if she had not attended summer camp. Form4868 Example 3 – child lived same number of days with each parent. Form4868 Your son lived with you 180 nights during the year and lived the same number of nights with his other parent, your ex-spouse. Form4868 Your adjusted gross income is $40,000. Form4868 Your ex-spouse's adjusted gross income is $25,000. Form4868 You are treated as your son's custodial parent because you have the higher adjusted gross income. Form4868 Example 4 – child is at parent’s home but with other parent. Form4868 Your son normally lives with you during the week and with his other parent, your ex-spouse, every other weekend. Form4868 You become ill and are hospitalized. Form4868 The other parent lives in your home with your son for 10 consecutive days while you are in the hospital. Form4868 Your son is treated as living with you during this 10-day period because he was living in your home. Form4868 Example 5 – child emancipated in May. Form4868 When your son turned age 18 in May 2013, he became emancipated under the law of the state where he lives. Form4868 As a result, he is not considered in the custody of his parents for more than half of the year. Form4868 The special rule for children of divorced or separated parents (or parents who live apart) does not apply. Form4868 Example 6 – child emancipated in August. Form4868 Your daughter lives with you from January 1, 2013, until May 31, 2013, and lives with her other parent, your ex-spouse, from June 1, 2013, through the end of the year. Form4868 She turns 18 and is emancipated under state law on August 1, 2013. Form4868 Because she is treated as not living with either parent beginning on August 1, she is treated as living with you the greater number of nights in 2013. Form4868 You are the custodial parent. Form4868 Written declaration. Form4868    The custodial parent must use either Form 8332 or a similar statement (containing the same information required by the form) to make the written declaration to release the exemption to the noncustodial parent. Form4868 The noncustodial parent must attach a copy of the form or statement to his or her tax return. Form4868   The exemption can be released for 1 year, for a number of specified years (for example, alternate years), or for all future years, as specified in the declaration. Form4868 Divorce decree or separation agreement that went into effect after 1984 and before 2009. Form4868   If the divorce decree or separation agreement went into effect after 1984 and before 2009, the noncustodial parent may be able to attach certain pages from the decree or agreement instead of Form 8332. Form4868 To be able to do this, the decree or agreement must state all three of the following. Form4868 The noncustodial parent can claim the child as a dependent without regard to any condition, such as payment of support. Form4868 The custodial parent will not claim the child as a dependent for the year. Form4868 The years for which the noncustodial parent, rather than the custodial parent, can claim the child as a dependent. Form4868   The noncustodial parent must attach all of the following pages of the decree or agreement to his or her return. Form4868 The cover page (write the other parent's social security number on this page). Form4868 The pages that include all of the information identified in items (1) through (3) above. Form4868 The signature page with the other parent's signature and the date of the agreement. Form4868 Post-2008 divorce decree or separation agreement. Form4868   If the decree or agreement went into effect after 2008, a noncustodial parent claiming an exemption for a child cannot attach pages from a divorce decree or separation agreement instead of Form 8332. Form4868 The custodial parent must sign either a Form 8332 or a similar statement. Form4868 The only purpose of this statement must be to release the custodial parent's claim to the child's exemption. Form4868 The noncustodial parent must attach a copy to his or her return. Form4868 The form or statement must release the custodial parent's claim to the child without any conditions. Form4868 For example, the release must not depend on the noncustodial parent paying support. Form4868    The noncustodial parent must attach the required information even if it was filed with a return in an earlier year. Form4868 Revocation of release of claim to an exemption. Form4868   The custodial parent can revoke a release of claim to exemption that he or she previously released to the noncustodial parent on Form 8332 or a similar statement. Form4868 In order for the revocation to be effective for 2013, the custodial parent must have given (or made reasonable efforts to give) written notice of the revocation to the noncustodial parent in 2012 or earlier. Form4868 The custodial parent can use Part III of Form 8332 for this purpose and must attach a copy of the revocation to his or her return for each tax year he or she claims the child as a dependent as a result of the revocation. Form4868 Remarried parent. Form4868   If you remarry, the support provided by your new spouse is treated as provided by you. Form4868 Child support under pre-1985 agreement. Form4868   All child support payments actually received from the noncustodial parent under a pre-1985 agreement are considered used for the support of the child, even if such amounts are not actually spent for child support. Form4868 Example. Form4868 Under a pre-1985 agreement, the noncustodial parent provides $1,200 for the child's support. Form4868 This amount is considered support provided by the noncustodial parent even if the $1,200 was actually spent on things other than support. Form4868 Parents who never married. Form4868   The special rule for divorced or separated parents also applies to parents who never married and lived apart at all times during the last 6 months of the year. Form4868 Alimony. Form4868   Payments to your spouse that are includible in his or her gross income as either alimony, separate maintenance payments, or similar payments from an estate or trust, are not treated as a payment for the support of a dependent. Form4868 Special Rule for Qualifying Child of More Than One Person If your qualifying child is not a qualifying child of anyone else, this special rule does not apply to you and you do not need to read about it. Form4868 This is also true if your qualifying child is not a qualifying child of anyone else except your spouse with whom you file a joint return. Form4868 If a child is treated as the qualifying child of the noncustodial parent under the Special rule for divorced or separated parents (or parents who live apart), earlier, see Applying this special rule to divorced or separated parents (or parents who live apart), later. Form4868 Sometimes, a child meets the relationship, age, residency, support, and joint return tests to be a qualifying child of more than one person. Form4868 (For a description of these tests, see list items 1 through 5 under Tests To Be a Qualifying Child in Table 3). Form4868 Although the child meets the conditions to be a qualifying child of each of these persons, only one person can actually use the child as a qualifying child to take all of the following tax benefits (provided the person is eligible for each benefit). Form4868 The exemption for the child. Form4868 The child tax credit. Form4868 Head of household filing status. Form4868 The credit for child and dependent care expenses. Form4868 The exclusion from income for dependent care benefits. Form4868 The earned income credit. Form4868 The other person cannot take any of these benefits based on this qualifying child. Form4868 In other words, you and the other person cannot agree to divide these tax benefits between you. Form4868 The other person cannot take any of these tax benefits unless he or she has a different qualifying child. Form4868 Tiebreaker rules. Form4868   To determine which person can treat the child as a qualifying child to claim these six tax benefits, the following tiebreaker rules apply. Form4868 If only one of the persons is the child's parent, the child is treated as the qualifying child of the parent. Form4868 If the parents do not file a joint return together but both parents claim the child as a qualifying child, the IRS will treat the child as the qualifying child of the parent with whom the child lived for the longer period of time during the year. Form4868 If the child lived with each parent for the same amount of time, the IRS will treat the child as the qualifying child of the parent who had the higher adjusted gross income (AGI) for the year. Form4868 If no parent can claim the child as a qualifying child, the child is treated as the qualifying child of the person who had the highest AGI for the year. Form4868 If a parent can claim the child as a qualifying child but no parent does so claim the child, the child is treated as the qualifying child of the person who had the highest AGI for the year, but only if that person's AGI is higher than the highest AGI of any of the child's parents who can claim the child. Form4868 If the child's parents file a joint return with each other, this rule can be applied by dividing the parents' total AGI evenly between them; see Publication 501 for details. Form4868   Subject to these tiebreaker rules, you and the other person may be able to choose which of you claims the child as a qualifying child. Form4868 Example 1—separated parents. Form4868 You, your husband, and your 10-year-old son lived together until August 1, 2013, when your husband moved out of the household. Form4868 In August and September, your son lived with you. Form4868 For the rest of the year, your son lived with your husband, the boy's father. Form4868 Your son is a qualifying child of both you and your husband because your son lived with each of you for more than half the year and because he met the relationship, age, support, and joint return tests for both of you. Form4868 At the end of the year, you and your husband still were not divorced, legally separated, or separated under a written separation agreement, so the special rule for divorced or separated parents (or parents who live apart) does not apply. Form4868 You and your husband will file separate returns. Form4868 Your husband agrees to let you treat your son as a qualifying child. Form4868 This means, if your husband does not claim your son as a qualifying child, you can claim your son as a dependent and treat him as a qualifying child for the child tax credit and exclusion for dependent care benefits, if you qualify for each of those tax benefits. Form4868 However, you cannot claim head of household filing status because you and your husband did not live apart the last 6 months of the year. Form4868 And, as a result of your filing status being married filing separately, you cannot claim the earned income credit or the credit for child and dependent care expenses. Form4868 Example 2—separated parents claim same child. Form4868 The facts are the same as in Example 1 except that you and your husband both claim your son as a qualifying child. Form4868 In this case, only your husband will be allowed to treat your son as a qualifying child. Form4868 This is because, during 2013, the boy lived with him longer than with you. Form4868 If you claimed an exemption, the child tax credit, or the exclusion for dependent care benefits for your son, the IRS will disallow your claim to all these tax benefits, unless you have another qualifying child. Form4868 In addition, because you and your husband did not live apart the last 6 months of the year, your husband cannot claim head of household filing status. Form4868 And, as a result of his filing status being married filing separately, he cannot claim the earned income credit or the credit for child and dependent care expenses. Form4868 Applying this special rule to divorced or separated parents (or parents who live apart). Form4868   If a child is treated as the qualifying child of the noncustodial parent under the special rule for divorced or separated parents (or parents who live apart) described earlier, only the noncustodial parent can claim an exemption and the child tax credit for the child. Form4868 However, the noncustodial parent cannot claim the child as a qualifying child for head of household filing status, the credit for child and dependent care expenses, the exclusion for dependent care benefits, and the earned income credit. Form4868 Only the custodial parent, if eligible, or another eligible taxpayer can claim the child as a qualifying child for those four tax benefits. Form4868 If the child is the qualifying child of more than one person for those tax benefits, the tiebreaker rules determine which person can treat the child as a qualifying child. Form4868 Example 1. Form4868 You and your 5-year-old son lived all year with your mother, who paid the entire cost of keeping up the home. Form4868 Your AGI is $10,000. Form4868 Your mother's AGI is $25,000. Form4868 Your son's father does not live with you or your son. Form4868 Under the rules for children of divorced or separated parents (or parents who live apart), your son is treated as the qualifying child of his father, who can claim an exemption and the child tax credit for the child if he meets all the requirements to do so. Form4868 Because of this, you cannot claim an exemption or the child tax credit for your son. Form4868 However, your son's father cannot claim your son as a qualifying child for head of household filing status, the credit for child and dependent care expenses, the exclusion for dependent care benefits, or the earned income credit. Form4868 You and your mother did not have any child care expenses or dependent care benefits, but the boy is a qualifying child of both you and your mother for head of household filing status and the earned income credit because he meets the relationship, age, residency, support, and joint return tests for both you and your mother. Form4868 (Note: The support test does not apply for the earned income credit. Form4868 ) However, you agree to let your mother claim your son. Form4868 This means she can claim him for head of household filing status and the earned income credit if she qualifies for each and if you do not claim him as a qualifying child for the earned income credit. Form4868 (You cannot claim head of household filing status because your mother paid the entire cost of keeping up the home. Form4868 ) Example 2. Form4868 The facts are the same as in Example 1 except that your AGI is $25,000 and your mother's AGI is $21,000. Form4868 Your mother cannot claim your son as a qualifying child for any purpose because her AGI is not higher than yours. Form4868 Example 3. Form4868 The facts are the same as in Example 1 except that you and your mother both claim your son as a qualifying child for the earned income credit. Form4868 Your mother also claims him as a qualifying child for head of household filing status. Form4868 You, as the child's parent, will be the only one allowed to claim your son as a qualifying child for the earned income credit. Form4868 The IRS will disallow your mother's claim to the earned income credit and head of household filing status unless she has another qualifying child. Form4868 Phaseout of Exemptions The amount you can claim as a deduction for exemptions is reduced once your adjusted gross income (AGI) goes above a certain level for your filing status. Form4868 These levels are as follows:    Filing Status AGI Level That Reduces Exemption Amount Married filing separately $150,000 Single 250,000 Head of household 275,000 Married filing jointly 300,000 Qualifying widow(er) 300,000 You must reduce the dollar amount of your exemptions by 2% for each $2,500, or part of $2,500 ($1,250 if you are married filing separately), that your AGI exceeds the amount shown above for your filing status. Form4868 If your AGI exceeds the amount shown above by more than $122,500 ($61,250 if married filing separately), the amount of your deduction for exemptions is reduced to zero. Form4868 If your AGI exceeds the level for your filing status, use the Deduction for Exemptions Worksheet found in the instructions for Form 1040 or Form 1040NR to figure the amount of your deduction for exemptions. Form4868 Alimony Alimony is a payment to or for a spouse or former spouse under a divorce or separation instrument. Form4868 It does not include voluntary payments that are not made under a divorce or separation instrument. Form4868 Alimony is deductible by the payer and must be included in the spouse's or former spouse's income. Form4868 Although this discussion is generally written for the payer of the alimony, the recipient can use the information to determine whether an amount received is alimony. Form4868 To be alimony, a payment must meet certain requirements. Form4868 There are some differences between the requirements that apply to payments under instruments executed after 1984 and to payments under instruments executed before 1985. Form4868 The general requirements that apply to payments regardless of when the divorce or separation instrument was executed and the specific requirements that apply to post-1984 instruments (and, in certain cases, some pre-1985 instruments) are discussed in this publication. Form4868 See, Instruments Executed Before 1985 , later, if you are looking for information on where to find the specific requirements that apply to pre-1985 instruments. Form4868 Spouse or former spouse. Form4868   Unless otherwise stated, the term “spouse” includes former spouse. Form4868 Divorce or separation instrument. Form4868   The term “divorce or separation instrument” means: A decree of divorce or separate maintenance or a written instrument incident to that decree, A written separation agreement, or A decree or any type of court order requiring a spouse to make payments for the support or maintenance of the other spouse. Form4868 This includes a temporary decree, an interlocutory (not final) decree, and a decree of alimony pendente lite (while awaiting action on the final decree or agreement). Form4868 Invalid decree. Form4868   Payments under a divorce decree can be alimony even if the decree's validity is in question. Form4868 A divorce decree is valid for tax purposes until a court having proper jurisdiction holds it invalid. Form4868 Amended instrument. Form4868   An amendment to a divorce decree may change the nature of your payments. Form4868 Amendments are not ordinarily retroactive for federal tax purposes. Form4868 However, a retroactive amendment to a divorce decree correcting a clerical error to reflect the original intent of the court will generally be effective retroactively for federal tax purposes. Form4868 Example 1. Form4868 A court order retroactively corrected a mathematical error under your divorce decree to express the original intent to spread the payments over more than 10 years. Form4868 This change also is effective retroactively for federal tax purposes. Form4868 Example 2. Form4868 Your original divorce decree did not fix any part of the payment as child support. Form4868 To reflect the true intention of the court, a court order retroactively corrected the error by designating a part of the payment as child support. Form4868 The amended order is effective retroactively for federal tax purposes. Form4868 Deducting alimony paid. Form4868   You can deduct alimony you paid, whether or not you itemize deductions on your return. Form4868 You must file Form 1040. Form4868 You cannot use Form 1040A, 1040EZ, or 1040NR. Form4868 Enter the amount of alimony you paid on Form 1040, line 31a. Form4868 In the space provided on line 31b, enter your spouse's social security number (SSN) or IRS individual taxpayer identification number (ITIN). Form4868 If you paid alimony to more than one person, enter the SSN or ITIN of one of the recipients. Form4868 Show the SSN or ITIN and amount paid to each other recipient on an attached statement. Form4868 Enter your total payments on line 31a. Form4868 If you do not provide your spouse's SSN or ITIN, you may have to pay a $50 penalty and your deduction may be disallowed. Form4868 Reporting alimony received. Form4868   Report alimony you received as income on Form 1040, line 11, or on Schedule NEC (Form 1040NR), line 12. Form4868 You cannot use Form 1040A, 1040EZ, or 1040NR-EZ. Form4868    You must give the person who paid the alimony your SSN or ITIN. Form4868 If you do not, you may have to pay a $50 penalty. Form4868 Withholding on nonresident aliens. Form4868   If you are a U. Form4868 S. Form4868 citizen or resident alien and you pay alimony to a nonresident alien spouse, you may have to withhold income tax at a rate of 30% on each payment. Form4868 However, many tax treaties provide for an exemption from withholding for alimony payments. Form4868 For more information, see Publication 515, Withholding of Tax on Nonresident Aliens and Foreign Entities. Form4868 General Rules The following rules apply to alimony regardless of when the divorce or separation instrument was executed. Form4868 Payments not alimony. Form4868   Not all payments under a divorce or separation instrument are alimony. Form4868 Alimony does not include: Child support, Noncash property settlements, Payments that are your spouse's part of community income, as explained later under Community Property , Payments to keep up the payer's property, or Use of the payer's property. Form4868 Example. Form4868 Under your written separation agreement, your spouse lives rent-free in a home you own and you must pay the mortgage, real estate taxes, insurance, repairs, and utilities for the home. Form4868 Because you own the home and the debts are yours, your payments for the mortgage, real estate taxes, insurance, and repairs are not alimony. Form4868 Neither is the value of your spouse's use of the home. Form4868 If they otherwise qualify, you can deduct the payments for utilities as alimony. Form4868 Your spouse must report them as income. Form4868 If you itemize deductions, you can deduct the real estate taxes and, if the home is a qualified home, you can also include the interest on the mortgage in figuring your deductible interest. Form4868 However, if your spouse owned the home, see Example 2 under Payments to a third party, later. Form4868 If you owned the home jointly with your spouse, see Table 4. Form4868 For more information on a qualified home and deductible mortgage interest, see Publication 936, Home Mortgage Interest Deduction. Form4868 Child support. Form4868   To determine whether a payment is child support, see the discussion under Instruments Executed After 1984 , later. Form4868 If your divorce or separation agreement was executed before 1985, see the 2004 revision of Publication 504 available at www. Form4868 irs. Form4868 gov/formspubs. Form4868 Underpayment. Form4868   If both alimony and child support payments are called for by your divorce or separation instrument, and you pay less than the total required, the payments apply first to child support and then to alimony. Form4868 Example. Form4868 Your divorce decree calls for you to pay your former spouse $200 a month ($2,400 ($200 x 12) a year) as child support and $150 a month ($1,800 ($150 x 12) a year) as alimony. Form4868 If you pay the full amount of $4,200 ($2,400 + $1,800) during the year, you can deduct $1,800 as alimony and your former spouse must report $1,800 as alimony received. Form4868 If you pay only $3,600 during the year, $2,400 is child support. Form4868 You can deduct only $1,200 ($3,600 – $2,400) as alimony and your former spouse must report $1,200 as alimony received. Form4868 Payments to a third party. Form4868   Cash payments, checks, or money orders to a third party on behalf of your spouse under the terms of your divorce or separation instrument can be alimony, if they otherwise qualify. Form4868 These include payments for your spouse's medical expenses, housing costs (rent, utilities, etc. Form4868 ), taxes, tuition, etc. Form4868 The payments are treated as received by your spouse and then paid to the third party. Form4868 Example 1. Form4868 Under your divorce decree, you must pay your former spouse's medical and dental expenses. Form4868 If the payments otherwise qualify, you can deduct them as alimony on your return. Form4868 Your former spouse must report them as alimony received and can include them in figuring deductible medical expenses. Form4868 Example 2. Form4868 Under your separation agreement, you must pay the real estate taxes, mortgage payments, and insurance premiums on a home owned by your spouse. Form4868 If they otherwise qualify, you can deduct the payments as alimony on your return, and your spouse must report them as alimony received. Form4868 If itemizing deductions, your spouse can deduct the real estate taxes and, if the home is a qualified home, also include the interest on the mortgage in figuring deductible interest. Form4868 However, if you owned the home, see the example under Payments not alimony , earlier. Form4868 If you owned the home jointly with your spouse, see Table 4. Form4868 Life insurance premiums. Form4868   Alimony includes premiums you must pay under your divorce or separation instrument for insurance on your life to the extent your spouse owns the policy. Form4868 Payments for jointly-owned home. Form4868   If your divorce or separation instrument states that you must pay expenses for a home owned by you and your spouse or former spouse, some of your payments may be alimony. Form4868 See Table 4. Form4868   However, if your spouse owned the home, see Example 2 under Payments to a third party, earlier. Form4868 If you owned the home, see the example under Payments not alimony , earlier. Form4868 Table 4. Form4868 Expenses for a Jointly-Owned Home Use the table below to find how much of your payment is alimony and how much you can claim as an itemized deduction. Form4868 IF you must pay all of the . Form4868 . Form4868 . Form4868 AND your home is . Form4868 . Form4868 . Form4868 THEN you can deduct and your spouse (or former spouse) must include as alimony . Form4868 . Form4868 . Form4868 AND you can claim as an itemized deduction . Form4868 . Form4868 . Form4868   mortgage payments (principal and interest) jointly owned half of the total payments half of the interest as interest expense (if the home is a qualified home). Form4868 1   real estate taxes and home insurance held as tenants in common half of the total payments half of the real estate taxes2 and none of the home insurance. Form4868     held as tenants by the entirety or in joint tenancy none of the payments all of the real estate taxes and none of the home insurance. Form4868 1 Your spouse (or former spouse) can deduct the other half of the interest if the home is a qualified home. Form4868  2 Your spouse (or former spouse) can deduct the other half of the real estate taxes. Form4868 Instruments Executed After 1984 The following rules for alimony apply to payments under divorce or separation instruments executed after 1984. Form4868 Exception for instruments executed before 1985. Form4868   There are two situations where the rules for instruments executed after 1984 apply to instruments executed before 1985. Form4868 A divorce or separation instrument executed before 1985 and then modified after 1984 to specify that the after-1984 rules will apply. Form4868 A temporary divorce or separation instrument executed before 1985 and incorporated into, or adopted by, a final decree executed after 1984 that: Changes the amount or period of payment, or Adds or deletes any contingency or condition. Form4868   For the rules for alimony payments under pre-1985 instruments not meeting these exceptions, see the 2004 revision of Publication 504 available at www. Form4868 irs. Form4868 gov/formspubs. Form4868 Example 1. Form4868 In November 1984, you and your former spouse executed a written separation agreement. Form4868 In February 1985, a decree of divorce was substituted for the written separation agreement. Form4868 The decree of divorce did not change the terms for the alimony you pay your former spouse. Form4868 The decree of divorce is treated as executed before 1985. Form4868 Alimony payments under this decree are not subject to the rules for payments under instruments executed after 1984. Form4868 Example 2. Form4868 The facts are the same as in Example 1 except that the decree of divorce changed the amount of the alimony. Form4868 In this example, the decree of divorce is not treated as executed before 1985. Form4868 The alimony payments are subject to the rules for payments under instruments executed after 1984. Form4868 Alimony Requirements A payment to or for a spouse under a divorce or separation instrument is alimony if the spouses do not file a joint return with each other and all the following requirements are met. Form4868 The payment is in cash. Form4868 The instrument does not designate the payment as not alimony. Form4868 The spouses are not members of the same household at the time the payments are made. Form4868 This requirement applies only if the spouses are legally separated under a decree of divorce or separate maintenance. Form4868 There is no liability to make any payment (in cash or property) after the death of the recipient spouse. Form4868 The payment is not treated as child support. Form4868 Each of these requirements is discussed next. Form4868 Cash payment requirement. Form4868   Only cash payments, including checks and money orders, qualify as alimony. Form4868 The following do not qualify as alimony. Form4868 Transfers of services or property (including a debt instrument of a third party or an annuity contract). Form4868 Execution of a debt instrument by the payer. Form4868 The use of the payer's property. Form4868 Payments to a third party. Form4868   Cash payments to a third party under the terms of your divorce or separation instrument can qualify as cash payments to your spouse. Form4868 See Payments to a third party under General Rules, earlier. Form4868   Also, cash payments made to a third party at the written request of your spouse may qualify as alimony if all the following requirements are met. Form4868 The payments are in lieu of payments of alimony directly to your spouse. Form4868 The written request states that both spouses intend the payments to be treated as alimony. Form4868 You receive the written request from your spouse before you file your return for the year you made the payments. Form4868 Payments designated as not alimony. Form4868   You and your spouse can designate that otherwise qualifying payments are not alimony. Form4868 You do this by including a provision in your divorce or separation instrument that states the payments are not deductible as alimony by you and are excludable from your spouse's income. Form4868 For this purpose, any instrument (written statement) signed by both of you that makes this designation and that refers to a previous written separation agreement is treated as a written separation agreement (and therefore a divorce or separation instrument). Form4868 If you are subject to temporary support orders, the designation must be made in the original or a later temporary support order. Form4868   Your spouse can exclude the payments from income only if he or she attaches a copy of the instrument designating them as not alimony to his or her return. Form4868 The copy must be attached each year the designation applies. Form4868 Spouses cannot be members of the same household. Form4868   Payments to your spouse while you are members of the same household are not alimony if you are legally separated under a decree of divorce or separate maintenance. Form4868 A home you formerly shared is considered one household, even if you physically separate yourselves in the home. Form4868   You are not treated as members of the same household if one of you is preparing to leave the household and does leave no later than 1 month after the date of the payment. Form4868 Exception. Form4868   If you are not legally separated under a decree of divorce or separate maintenance, a payment under a written separation agreement, support decree, or other court order may qualify as alimony even if you are members of the same household when the payment is made. Form4868 Liability for payments after death of recipient spouse. Form4868   If any part of payments you make must continue to be made for any period after your spouse's death, that part of your payments is not alimony whether made before or after the death. Form4868 If all of the payments would continue, then none of the payments made before or after the death are alimony. Form4868   The divorce or separation instrument does not have to expressly state that the payments cease upon the
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The Form4868

Form4868 6. Form4868   Retail Tax on Heavy Trucks, Trailers, and Tractors Table of Contents Highway vehicle. Form4868 Vehicles not considered highway vehicles. Form4868 Idling reduction device. Form4868 Separate purchase. Form4868 Leases. Form4868 Exported vehicle. Form4868 Tax on resale of tax-paid trailers and semitrailers. Form4868 Use treated as sale. Form4868 Sale. Form4868 Long-term lease. Form4868 Short-term lease. Form4868 Related person. Form4868 Exclusions from tax base. Form4868 Sales not at arm's length. Form4868 Installment sales. Form4868 Repairs and modifications. Form4868 Further manufacture. Form4868 Rail trailers and rail vans. Form4868 Parts and accessories. Form4868 Trash containers. Form4868 House trailers. Form4868 Camper coaches or bodies for self-propelled mobile homes. Form4868 Farm feed, seed, and fertilizer equipment. Form4868 Ambulances and hearses. Form4868 Truck-tractors. Form4868 Concrete mixers. Form4868 Registration requirement. Form4868 Further manufacture. Form4868 A tax of 12% of the sales price is imposed on the first retail sale of the following articles, including related parts and accessories sold on or in connection with, or with the sale of, the articles. Form4868 Truck chassis and bodies. Form4868 Truck trailer and semitrailer chassis and bodies. Form4868 Tractors of the kind chiefly used for highway transportation in combination with a trailer or semitrailer. Form4868 A truck is a highway vehicle primarily designed to transport its load on the same chassis as the engine, even if it is equipped to tow a vehicle, such as a trailer or semitrailer. Form4868 A tractor is a highway vehicle designed to tow a vehicle, such as a trailer or semitrailer. Form4868 A tractor may carry incidental items of cargo when towing or limited amounts of cargo when not towing. Form4868 A sale of a truck, truck trailer, or semitrailer is considered a sale of a chassis and a body. Form4868 The seller is liable for the tax. Form4868 Chassis or body. Form4868   A chassis or body is taxable only if you sell it for use as a component part of a highway vehicle that is a truck, truck trailer or semitrailer, or a tractor of the kind chiefly used for highway transportation in combination with a trailer or semitrailer. Form4868 Highway vehicle. Form4868   A highway vehicle is any self-propelled vehicle designed to carry a load over public highways, whether or not it is also designed to perform other functions. Form4868 Examples of vehicles designed to carry a load over public highways are passenger automobiles, motorcycles, buses, and highway-type trucks and truck tractors. Form4868 A vehicle is a highway vehicle even though the vehicle's design allows it to perform a highway transportation function for only one of the following. Form4868 A particular type of load, such as passengers, furnishings, and personal effects (as in a house, office, or utility trailer). Form4868 A special kind of cargo, goods, supplies, or materials. Form4868 Some off-highway task unrelated to highway transportation, except as discussed next. Form4868 Vehicles not considered highway vehicles. Form4868   Generally, the following kinds of vehicles are not considered highway vehicles for purposes of the retail tax. Form4868 Specially designed mobile machinery for nontransportation functions. Form4868 A self-propelled vehicle is not a highway vehicle if all the following apply. Form4868 The chassis has permanently mounted to it machinery or equipment used to perform certain operations (construction, manufacturing, drilling, mining, timbering, processing, farming, or similar operations) if the operation of the machinery or equipment is unrelated to transportation on or off the public highways. Form4868 The chassis has been specially designed to serve only as a mobile carriage and mount (and power source, if applicable) for the machinery or equipment, whether or not the machinery or equipment is in operation. Form4868 The chassis could not, because of its special design and without substantial structural modification, be used as part of a vehicle designed to carry any other load. Form4868 Vehicles specially designed for off-highway transportation. Form4868 A vehicle is not treated as a highway vehicle if the vehicle is specially designed for the primary function of transporting a particular type of load other than over the public highway and because of this special design, the vehicles's capability to transport a load over a public highway is substantially limited or impaired. Form4868 To make this determination, you can take into account the vehicle's size, whether the vehicle is subject to licensing, safety, or other requirements, and whether the vehicle can transport a load at a sustained speed of at least 25 miles per hour. Form4868 It does not matter that the vehicle can carry heavier loads off highway than it is allowed to carry over the highway. Form4868 Nontransportation trailers and semitrailers. Form4868 A trailer or semitrailer is not treated as a highway vehicle if it is specially designed to function only as an enclosed stationary shelter for carrying on a nontransportation function at an off-highway site. Form4868 For example, a trailer that is capable only of functioning as an office for an off-highway construction operation is not a highway vehicle. Form4868 Gross vehicle weight. Form4868   The tax does not apply to truck chassis and bodies suitable for use with a vehicle that has a gross vehicle weight (defined below) of 33,000 pounds or less. Form4868 It also does not apply to truck trailer and semitrailer chassis and bodies suitable for use with a trailer or semitrailer that has a gross vehicle weight of 26,000 pounds or less. Form4868 Tractors that have a gross vehicle weight of 19,500 pounds or less and a gross combined weight of 33,000 pounds or less are excluded from the 12% retail tax. Form4868   The following four classifications of truck body types meet the suitable for use standard and will be excluded from the retail excise tax. Form4868 Platform truck bodies 21 feet or less in length. Form4868 Dry freight and refrigerated truck van bodies 24 feet or less in length. Form4868 Dump truck bodies with load capacities of 8 cubic yards or less. Form4868 Refuse packer truck bodies with load capacities of 20 cubic yards or less. Form4868 For more information on these classifications, see Revenue Procedure 2005-19, which is on page 832 of I. Form4868 R. Form4868 B. Form4868 2005-14 at www. Form4868 irs. Form4868 gov/pub/irs-irbs/irb05-14. Form4868 pdf. Form4868   The gross vehicle weight means the maximum total weight of a loaded vehicle. Form4868 Generally, this maximum total weight is the gross vehicle weight rating provided by the manufacturer or determined by the seller of the completed article. Form4868 The seller's gross vehicle weight rating is determined solely on the basis of the strength of the chassis frame and the axle capacity and placement. Form4868 The seller may not take into account any readily attachable components (such as tires or rim assemblies) in determining the gross vehicle weight. Form4868 See Regulations section 145. Form4868 4051-1(e)(3) for more information. Form4868 Parts or accessories. Form4868   The tax applies to parts or accessories sold on or in connection with, or with the sale of, a taxable article. Form4868 For example, if at the time of the sale by the retailer, the part or accessory has been ordered from the retailer, the part or accessory will be considered as sold in connection with the sale of the vehicle. Form4868 The tax applies in this case whether or not the retailer bills the parts or accessories separately. Form4868   If the retailer sells a taxable chassis, body, or tractor without parts or accessories considered essential for the operation or appearance of the taxable article, the sale of the parts or accessories by the retailer to the purchaser is considered made in connection with the sale of the taxable article even though they are shipped separately, at the same time, or on a different date. Form4868 The tax applies unless there is evidence to the contrary. Form4868 For example, if a retailer sells to any person a chassis and the bumpers for the chassis, or sells a taxable tractor and the fifth wheel and attachments, the tax applies to the parts or accessories regardless of the method of billing or the time at which the shipments were made. Form4868 The tax does not apply to parts and accessories that are spares or replacements. Form4868   The tax imposed on parts and accessories sold on or in connection with the taxable articles listed earlier and the tax imposed on the separate purchase of parts and accessories (discussed next) for the taxable articles listed earlier do not apply to an idling reduction device or insulation that has an R value of at least R35 per inch. Form4868 Idling reduction device. Form4868   An idling reduction device is any device or system of devices that provide the tractor with services, such as heat, air conditioning, and electricity, without the use of the main drive engine while the tractor is temporarily parked or stationary. Form4868 The device must be affixed to the tractor and determined by the Administrator of the EPA, in consultation with the Secretary of Energy and Secretary of Transportation, to reduce idling while parked or stationary. Form4868 The EPA discusses idling reduction technologies on its website at www. Form4868 epa. Form4868 gov/smartway/technology/idling. Form4868 htm. Form4868 Separate purchase. Form4868   The tax generally applies to the price of a part or accessory and its installation if the following conditions are met. Form4868 The owner, lessee, or operator of any vehicle that contains a taxable article installs any part or accessory on the vehicle. Form4868 The installation occurs within 6 months after the vehicle is first placed in service. Form4868   The owners of the trade or business installing the parts or accessories are secondarily liable for the tax. Form4868   A vehicle is placed in service on the date the owner takes actual possession of the vehicle. Form4868 This date is established by a signed delivery ticket or other comparable document indicating delivery to and acceptance by the owner. Form4868   The tax does not apply if the installed part or accessory is a replacement part or accessory. Form4868 The tax also does not apply if the total price of the parts and accessories, including installation charges, during the 6-month period is $1,000 or less. Form4868 However, if the total price is more than $1,000, the tax applies to the cost of all parts and accessories (and installation charges) during that period. Form4868 Example. Form4868 You bought a taxable vehicle and placed it in service on April 8. Form4868 On May 3, you bought and installed parts and accessories at a cost of $850. Form4868 On July 15, you bought and installed parts and accessories for $300. Form4868 Tax of $138 (12% of $1,150) applies on July 15. Form4868 Also, tax will apply to any costs of additional parts and accessories installed on the vehicle before October 8. Form4868 First retail sale defined. Form4868   The sale of an article is treated as the first retail sale, and the seller will be liable for the tax imposed on the sale unless one of the following exceptions applies. Form4868 There has been a prior taxable sale, lease, or use of the article (however, see Tax on resale of tax-paid trailers and semitrailers, later). Form4868 The sale qualifies as a tax-free sale under section 4221 (see Sales exempt from tax, later). Form4868 The seller in good faith accepts from the purchaser a statement signed under penalties of perjury and executed in good faith that the purchaser intends to resell the article or lease it on a long-term basis. Form4868 There is no registration requirement. Form4868 Leases. Form4868   A long-term lease (a lease with a term of 1 year or more, taking into account options to renew) before a first retail sale is treated as a taxable sale. Form4868 The tax is imposed on the lessor at the time of the lease. Form4868   A short-term lease (a lease with a term of less than 1 year, taking into account options to renew) before a first retail sale is treated as a taxable use. Form4868 The tax is imposed on the lessor at the time of the lease. Form4868 Exported vehicle. Form4868   A vehicle exported before its first retail sale, used in a foreign country, and then returned to the United States is subject to the retail tax on its first domestic use or retail sale after importation. Form4868 Tax on resale of tax-paid trailers and semitrailers. Form4868   The tax applies to a trailer or semitrailer resold within 6 months after having been sold in a taxable sale. Form4868 The seller liable for the tax on the resale can claim a credit equal to the tax paid on the prior taxable sale. Form4868 The credit cannot exceed the tax on the resale. Form4868 See Regulations section 145. Form4868 4052-1(a)(4) for information on the conditions to allowance for the credit. Form4868 Use treated as sale. Form4868   If any person uses a taxable article before the first retail sale of the article, that person is liable for the tax as if the article had been sold at retail by that person. Form4868 Figure the tax on the price at which similar articles are sold in the ordinary course of trade by retailers. Form4868 The tax attaches when the use begins. Form4868   If the seller of an article regularly sells the articles at retail in arm's-length transactions, figure the tax on its use on the lowest established retail price for the articles in effect at the time of the taxable use. Form4868   If the seller of an article does not regularly sell the articles at retail in arm's-length transactions, a constructive price on which the tax is figured will be determined by the IRS after considering the selling practices and price structures of sellers of similar articles. Form4868   If a seller of an article incurs liability for tax on the use of the article and later sells or leases the article in a transaction that otherwise would be taxable, liability for tax is not incurred on the later sale or lease. Form4868 Presumptive retail sales price. Form4868   There are rules to ensure that the tax base of transactions considered to be taxable sales includes either an actual or presumed markup percentage. Form4868 If the person liable for tax is the vehicle's manufacturer, producer, or importer, the following discussions show how you figure the presumptive retail sales price depending on the type of transaction and the persons involved in the transaction. Form4868 Table 6-1 outlines the appropriate tax base calculation for various transactions. Form4868   The presumed markup percentage to be used for trucks and truck-tractors is 4%. Form4868 But for truck trailers and semitrailers and remanufactured trucks and tractors, the presumed markup percentage is zero. Form4868 Sale. Form4868   For a taxable sale by a manufacturer, producer, importer, or related person, you generally figure the tax on a tax base of the sales price plus an amount equal to the presumed markup percentage times that sales price. Form4868 Long-term lease. Form4868   In the case of a long-term lease by a manufacturer, producer, importer, or related person, figure the tax on a tax base of the constructive sales price plus an amount equal to the presumed markup percentage times the constructive sales price. Form4868 Short-term lease. Form4868   When a manufacturer, producer, importer, or related person leases an article in a short-term lease considered a taxable use, figure the tax on a constructive sales price at which those or similar articles generally are sold in the ordinary course of trade by retailers. Form4868   But if the lessor in this situation regularly sells articles at retail in arm's-length transactions, figure the tax on the lowest established retail price in effect at the time of the taxable use. Form4868   If a person other than the manufacturer, producer, importer, or related person leases an article in a short-term lease considered a taxable use, figure the tax on a tax base of the price for which the article was sold to the lessor plus the cost of parts and accessories installed by the lessor and a presumed markup percentage. Form4868 Related person. Form4868   A related person is any member of the same controlled group as the manufacturer, producer, or importer. Form4868 Do not treat as a related person a person that sells the articles through a permanent retail establishment in the normal course of being a retailer if that person has records to prove the article was sold for a price that included a markup equal to or greater than the presumed markup percentage. Form4868 Table 6-1. Form4868 Tax Base IF the transaction is a. Form4868 . Form4868 . Form4868 THEN figuring the base by using the. Form4868 . Form4868 . Form4868 Sale by the manufacturer, producer, importer, or related person Sales price plus (presumed markup percentage × sales price) Sale by the dealer Total consideration paid for the item including any charges incident to placing it in a condition ready for use Long-term lease by the manufacturer, producer, importer, or related person Constructive sales price plus (presumed markup percentage × constructive sales price) Short-term lease by the manufacturer, producer, importer, or related person Constructive sales price at which such or similar articles are sold Short-term lease by a lessor other than the manufacturer, producer, importer, or related person Price for which the article was sold to the lessor plus the cost of parts and accessories installed by the lessor plus a presumed markup percentage Short-term lease where the articles are regularly sold at arm's length Lowest established retail price in effect at the time of the taxable use General rule for sales by dealers to the consumer. Form4868   For a taxable sale, other than a long-term lease, by a person other than a manufacturer, producer, importer, or related person, your tax base is the retail sales price as discussed next under Determination of tax base. Form4868   When you sell an article to the consumer, generally you do not add a presumed markup to the tax base. Form4868 However, you do add a markup if all the following apply. Form4868 You do not perform any significant activities relating to the processing of the sale of a taxable article. Form4868 The main reason for processing the sale through you is to avoid or evade the presumed markup. Form4868 You do not have records proving that the article was sold for a price that included a markup equal to or greater than the presumed markup percentage. Form4868 In these situations, your tax base is the sales price plus an amount equal to the presumed markup percentage times that selling price. Form4868 Determination of tax base. Form4868   These rules apply to both normal retail sales price and presumptive retail sales price computations. Form4868 To arrive at the tax base, the price is the total consideration paid (including trade-in allowance) for the item and includes any charge incident to placing the article in a condition ready for use. Form4868 However, see Presumptive retail sales price, earlier. Form4868 Exclusions from tax base. Form4868   Exclude from the tax base the retail excise tax imposed on the sale. Form4868 Exclude any state or local retail sales tax if stated as a separate charge from the price whether the sales tax is imposed on the seller or purchaser. Form4868 Also exclude the value of any used component of the article furnished by the first user of the article. Form4868   Exclude charges for transportation, delivery, insurance, and installation (other than installation charges for parts and accessories, discussed earlier) and other expenses incurred in connection with the delivery of an article to a purchaser. Form4868 These expenses are those incurred in delivery from the retail dealer to the customer. Form4868 In the case of delivery directly from the manufacturer to the dealer's customer, include the transportation and delivery charges to the extent the charges do not exceed what it would have cost to ship the article to the dealer. Form4868   Exclude amounts charged for machinery or equipment that does not contribute to the highway transportation function of the vehicle, provided those charges are supported by adequate records. Form4868 For example, for an industrial vacuum loader vehicle, exclude amounts charged for the vacuum pump and hose, filter system, material separator, silencer or muffler, control cabinet, and ladder. Form4868 Similarly, for a sewer cleaning vehicle, exclude amounts charged for the high pressure water pump, hose components, and the vacuum pipe. Form4868 Sales not at arm's length. Form4868   For any taxable article sold (not at arm's length) at less than the fair market price, figure the excise tax on the price for which similar articles are sold at retail in the ordinary course of trade. Form4868   A sale is not at arm's length if either of the following apply. Form4868 One of the parties is controlled (in law or in fact) by the other or there is common control, whether or not the control is actually exercised to influence the sales price. Form4868 The sale is made under special arrangements between a seller and a purchaser. Form4868 Installment sales. Form4868   If the first retail sale is an installment sale, or other form of sale in which the sales price is paid in installments, tax liability arises at the time of the sale. Form4868 The tax is figured on the entire sales price. Form4868 No part of the tax is deferred because the sales price is paid in installments. Form4868 Repairs and modifications. Form4868   The tax does not apply to the sale or use of an article that has been repaired or modified unless the cost of the repairs and modifications is more than 75% of the retail price of a comparable new article. Form4868 This includes modifications that change the transportation function of an article or restore a wrecked article to a functional condition. Form4868 However, this exception generally does not apply to an article that was not subject to the tax when it was new. Form4868 Further manufacture. Form4868   The tax does not apply to the use by a person of a taxable article as material in the manufacture or production of, or as a component part of, another article to be manufactured or produced by that person. Form4868 Do not treat a person as engaged in the manufacture of any article merely because that person combines the article with a: Coupling device (including any fifth wheel); Wrecker crane; Loading and unloading equipment (including any crane, hoist, winch, or power liftgate); Aerial ladder or tower; Ice and snow control equipment; Earth moving, excavation, and construction equipment; Spreader; Sleeper cab; Cab shield; or Wood or metal floor. Form4868 Combining an article with an item in this list does not give rise to taxability. Form4868 However, see Parts or accessories discussed earlier. Form4868 Articles exempt from tax. Form4868   The tax on heavy trucks, trailers, and tractors does not apply to sales of the articles described in the following discussions. Form4868 Rail trailers and rail vans. Form4868   This is any chassis or body of a trailer or semitrailer designed for use both as a highway vehicle and a railroad car (including any parts and accessories designed primarily for use on and in connection with it). Form4868 Do not treat a piggyback trailer or semitrailer as designed for use as a railroad car. Form4868 Parts and accessories. Form4868   This is any part or accessory sold separately from the truck or trailer, except as described earlier under Parts or accessories and Separate purchase. Form4868 Trash containers. Form4868   This is any box, container, receptacle, bin, or similar article that meets all the following conditions. Form4868 It is designed to be used as a trash container. Form4868 It is not designed to carry freight other than trash. Form4868 It is not designed to be permanently mounted on or affixed to a truck chassis or body. Form4868 House trailers. Form4868   This is any house trailer (regardless of size) suitable for use in connection with either passenger automobiles or trucks. Form4868 Camper coaches or bodies for self-propelled mobile homes. Form4868   This is any article designed to be mounted or placed on trucks, truck chassis, or automobile chassis and to be used primarily as living quarters or camping accommodations. Form4868 Further, the tax does not apply to chassis specifically designed and constructed to accommodate and transport self-propelled mobile home bodies. Form4868 Farm feed, seed, and fertilizer equipment. Form4868   This is any body primarily designed to process or prepare, haul, spread, load, or unload feed, seed, or fertilizer to or on farms. Form4868 This exemption applies only to the farm equipment body (and parts and accessories) and not to the chassis upon which the farm equipment is mounted. Form4868 Ambulances and hearses. Form4868   This is any ambulance, hearse, or combination ambulance-hearse. Form4868 Truck-tractors. Form4868   This is any truck-tractor specifically designed for use in shifting semitrailers in and around freight yards and freight terminals. Form4868 Concrete mixers. Form4868   This is any article designed to be placed or mounted on a truck, truck trailer, or semitrailer chassis to be used to process or prepare concrete. Form4868 This exemption does not apply to the chassis on which the article is mounted. Form4868 Sales exempt from tax. Form4868   The following sales are ordinarily exempt from tax. Form4868 Sales to a state or local government for its exclusive use. Form4868 Sales to Indian tribal governments, but only if the transaction involves the exercise of an essential tribal government function. Form4868 Sales to a nonprofit educational organization for its exclusive use. Form4868 Sales to a qualified blood collector organization (as defined under Communications Tax in chapter 4) for its exclusive use in the collection, storage, or transportation of blood. Form4868 Sales for use by the purchaser for further manufacture of other taxable articles (see below). Form4868 Sales for export or for resale by the purchaser to a second purchaser for export. Form4868 Sales to the United Nations for official use. Form4868 Registration requirement. Form4868   In general, the seller and buyer must be registered for a sale to be tax free. Form4868 See the Form 637 instructions for more information. Form4868 Certain registration exceptions apply in the case of sales to state and local governments, sales to foreign purchasers for export, and sales for resale or long term leasing. Form4868 Further manufacture. Form4868   If you buy articles tax free and resell or use them other than in the manufacture of another article, you are liable for the tax on their resale or use just as if you had manufactured and made the first retail sale of them. Form4868 Credits or refunds. Form4868   A credit or refund (without interest) of the retail tax on the taxable articles described earlier may be allowable if the tax has been paid with respect to an article and, before any other use, such article is used by any person as a component part of another taxable article manufactured or produced. Form4868 The person using the article as a component part is eligible for the credit or refund. Form4868   A credit or refund is allowable if, before any other use, an article is, by any person: Exported, Used or sold for use as supplies for vessels, Sold to a state or local government for its exclusive use, Sold to a nonprofit educational organization for its exclusive use, or Sold to a qualified blood collector organization (as defined under Communications Tax in chapter 4) for its exclusive use in the collection, storage, or transportation of blood. Form4868 A credit or refund is also allowable if there is a price readjustment by reason of the return or repossession of an article or by reason of a bona fide discount, rebate, or allowance. Form4868   See also Conditions to allowance in chapter 5. Form4868 Tire credit. Form4868   A credit is allowed against the retail tax on the taxable articles described earlier if taxable tires are sold on or in connection with the sale of the article. Form4868 The credit is equal to the manufacturers excise tax imposed on the taxable tires (discussed earlier). Form4868 This is the section 4051(d) taxable tire credit and is claimed on Schedule C (Form 720) for the same quarter for which the tax on the heavy vehicle is reported. Form4868 Prev  Up  Next   Home   More Online Publications