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Free federal tax preparation Publication 1544(SP) - Main Content Table of Contents ¿Por qué hay que declarar estos pagos? ¿Quién tiene que presentar el Formulario 8300-SP?¿Qué pagos tienen que declararse? ¿Qué es efectivo? Número de identificación del contribuyente (TIN) ¿Qué son transacciones relacionadas? ¿Qué se hace en el caso de transacciones sospechosas? Cuándo, dónde y qué se tiene que presentar Ejemplos Multas y sanciones Cómo Obtener Ayuda con los ImpuestosTalleres de Asistencia Tributaria para Contribuyentes de Bajos Recursos (LITC, por sus siglas en inglés). Free federal tax preparation ¿Por qué hay que declarar estos pagos? A menudo, los contrabandistas y narcotraficantes hacen transacciones de grandes cantidades de efectivo con el propósito de “blanquear” (lavar) dinero proveniente de actividades ilícitas. Free federal tax preparation El término “blanquear” (lavar) significa convertir el dinero “sucio”, u obtenido ilegalmente, en dinero “limpio” (como si fuera obtenido legalmente). Free federal tax preparation El gobierno a menudo puede rastrear el origen de este dinero blanqueado (lavado) mediante los pagos que se declaran. Free federal tax preparation Determinadas leyes aprobadas por el Congreso requieren que se declaren estos pagos. Free federal tax preparation Al cumplir con estas leyes, se proporciona información valiosa para ayudar a poner fin a las operaciones de los evasores de impuestos y los que se benefician del narcotráfico y otras actividades delictivas. Free federal tax preparation La USA Patriot Act (Ley patriota de los Estados Unidos) del año 2001 amplió el alcance de dichas leyes con el propósito de rastrear los fondos usados para llevar a cabo acciones terroristas. Free federal tax preparation ¿Quién tiene que presentar el Formulario 8300-SP? Por regla general, toda persona que se dedique a una ocupación o negocio en los que reciba más de $10,000 en efectivo en una sola transacción, o en varias transacciones relacionadas, tiene que presentar el Formulario 8300-SP. Free federal tax preparation Por ejemplo, es posible que tenga que presentar el Formulario 8300-SP si la ocupación o negocio al cual se dedica es la compraventa de joyas, muebles, barcos, aeronaves o automóviles, si es prestamista, abogado o corredor de bienes raíces, o si se trata de una compañía de seguros o de una agencia de viajes. Free federal tax preparation Las reglas especiales que deben cumplir los secretarios de los tribunales federales o estatales aparecen más adelante bajo Fianza recibida por secretarios de los tribunales. Free federal tax preparation Sin embargo, usted no tiene que presentar el Formulario 8300-SP si la transacción no está relacionada con su ocupación o negocio. Free federal tax preparation Por ejemplo, si es dueño de una joyería y vende su automóvil personal por una cantidad superior a $10,000 en efectivo, no tendrá que presentar el Formulario 8300-SP por esta transacción. Free federal tax preparation Definición de transacción. Free federal tax preparation   Se lleva a cabo una “transacción” cuando: Se venden bienes o propiedades, o se prestan servicios; Se alquila una propiedad; Se intercambia efectivo por otro efectivo; Se contribuye a una cuenta de fideicomiso o a una cuenta en plica (depósito en custodia de un tercero); Se saca o se paga un préstamo; o Se convierte el efectivo en un instrumento negociable, como un cheque o un bono. Free federal tax preparation Definición de persona. Free federal tax preparation   Una “persona” incluye una persona física, una empresa o compañía, una sociedad anónima, una sociedad colectiva, una asociación, un fideicomiso o un caudal hereditario. Free federal tax preparation   A las organizaciones exentas, incluidas las que tienen planes para sus empleados, se las considera también “personas”. Free federal tax preparation Sin embargo, las organizaciones exentas no tienen que presentar el Formulario 8300-SP cuando reciben una donación caritativa superior a $10,000 en efectivo, debido a que dicha donación no la reciben en el transcurso de una ocupación o negocio. Free federal tax preparation Transacciones en el extranjero. Free federal tax preparation   No tiene que presentar el Formulario 8300-SP si toda la transacción (incluyendo la recepción del efectivo) se lleva a cabo fuera de: Los 50 estados de los Estados Unidos, El Distrito de Columbia, Puerto Rico o Una posesión o territorio de los Estados Unidos. Free federal tax preparation Sin embargo, tiene que presentar el Formulario 8300-SP si alguna parte de la transacción (incluyendo la recepción del efectivo) se lleva a cabo en Puerto Rico o en una posesión o territorio de los Estados Unidos y usted está sujeto a las disposiciones del Código Federal de Impuestos Internos. Free federal tax preparation Fianza recibida por los secretarios de los tribunales. Free federal tax preparation   Todo secretario de un tribunal federal o estatal que reciba más de $10,000 en efectivo en concepto de fianza a favor de una persona que ha sido acusada de cualquiera de los delitos penales enumerados a continuación tiene que presentar el Formulario 8300-SP: Todo delito federal relacionado con la ley de control de narcóticos (sustancias controladas), Extorsión (racketeering), Blanqueo (lavado) de dinero y Todo delito estatal que sea considerablemente similar a los mencionados anteriormente en los puntos 1, 2 ó 3. Free federal tax preparation Para obtener más información acerca del reglamento con el que deben cumplir los secretarios de los tribunales, vea la sección 1. Free federal tax preparation 6050I-2 de los Reglamentos Federales del Impuesto Sobre los Ingresos Federales. Free federal tax preparation ¿Qué pagos tienen que declararse? Tiene que presentar el Formulario 8300-SP para declarar el efectivo que le paguen si el mismo: Supera los $10,000, Lo recibió en: Un solo pago en efectivo superior a $10,000, Varios pagos en efectivo recibidos en un período de un año, contado a partir de la fecha en que se hizo el pago inicial, que sumen un total de $10,000 u Otros pagos en efectivo no declarados anteriormente, cuya suma total recibida durante un período de 12 meses sea superior a $10,000. Free federal tax preparation Lo recibió en el curso de su ocupación o negocio, Lo recibió del mismo comprador (o agente) y Lo recibió en una sola transacción o en varias transacciones relacionadas (las cuales se definen más adelante). Free federal tax preparation ¿Qué es efectivo? Efectivo es: El dinero en monedas y billetes de los Estados Unidos (y de cualquier otro país) y Un cheque de cajero, giro bancario, cheque de viajero o giro que se reciba, si tiene un valor nominal de $10,000 o menos y se recibe en: Una transacción que tiene que ser declarada, como se define más adelante o Toda transacción en que a usted le conste que el pagador evita declarar en el Formulario 8300-SP. Free federal tax preparation El efectivo puede incluir un cheque de cajero aunque a éste se le llame “cheque de tesorero” o “cheque bancario”. Free federal tax preparation El efectivo no incluye un cheque girado contra la cuenta bancaria particular de una persona. Free federal tax preparation Un cheque de cajero, giro bancario, cheque de viajero o giro con un valor nominal de más de $10,000 no se considera efectivo. Free federal tax preparation Éstos no se consideran efectivo y usted no tiene que presentar el Formulario 8300-SP cuando los recibe porque, si fueron comprados con dinero en efectivo, el banco u otra institución financiera que los emitió debe presentar el Formulario 104 de la FinCEN para declararlos. Free federal tax preparation Ejemplo 1. Free federal tax preparation Usted es comerciante y se dedica a la compraventa y colección de monedas (numismático). Free federal tax preparation Roberto Coruña le compró monedas de oro por un precio de $13,200. Free federal tax preparation El Sr. Free federal tax preparation Coruña le pagó con $6,200 en moneda estadounidense y un cheque de cajero con un valor nominal de $7,000. Free federal tax preparation El cheque de cajero se considera efectivo. Free federal tax preparation En este caso, ha recibido más de $10,000 en efectivo y tiene que presentar el Formulario 8300-SP para declarar esta transacción. Free federal tax preparation Ejemplo 2. Free federal tax preparation Usted se dedica a la venta de joyas al por menor. Free federal tax preparation María Núñez le compra una joya por $12,000 y le paga con un cheque personal pagadero a usted por la cantidad de $9,600 y con cheques de viajero que ascienden a $2,400. Free federal tax preparation Debido a que el cheque personal no se considera efectivo, usted no ha recibido más de $10,000 en efectivo en la transacción. Free federal tax preparation No tiene que presentar el Formulario 8300-SP. Free federal tax preparation Ejemplo 3. Free federal tax preparation Usted es un comerciante que se dedica a la venta de barcos. Free federal tax preparation Emilia Espinosa le compra un barco por $16,500 y le paga con un cheque de cajero pagadero a usted por dicha cantidad. Free federal tax preparation El cheque de cajero no se considera efectivo, ya que el valor nominal del mismo es más de $10,000. Free federal tax preparation Usted no tiene que presentar el Formulario 8300-SP para declarar esta transacción. Free federal tax preparation Transacciones que se tienen que declarar Una transacción que tiene que declararse es aquélla que consiste en la venta al por menor de alguno de los siguientes: Un artículo de consumo duradero, como un automóvil o un barco. Free federal tax preparation Un artículo de consumo duradero es una propiedad que no es un terreno o un edificio y que: Es apropiado para uso personal, Se espera que dure por lo menos un año bajo uso normal, Tiene un precio de venta mayor de $10,000 y Se puede ver o tocar (propiedad tangible). Free federal tax preparation Por ejemplo, un automóvil cuyo valor es $20,000 es un artículo de consumo duradero, pero un camión de descarga (volquete) o maquinaria utilizada en una fábrica con un valor de $20,000 no lo es. Free federal tax preparation El automóvil es un artículo de consumo duradero aún cuando lo venda a un comprador para uso en una ocupación o negocio. Free federal tax preparation Un artículo coleccionable (por ejemplo, una obra de arte, alfombra, antigüedad, metal, piedra preciosa, sello o moneda). Free federal tax preparation Un viaje o entretenimiento, si el precio total de venta de todos los artículos vendidos para el mismo viaje o evento de entretenimiento en una sola transacción (o varias transacciones relacionadas) es más de $10,000. Free federal tax preparation Al calcular el precio total de venta de todos los artículos vendidos para un viaje o evento de entretenimiento, incluya el precio de venta de los artículos vendidos, como pasajes de avión, habitaciones de hotel y boletos de entrada. Free federal tax preparation Ejemplo. Free federal tax preparation Usted es agente de viajes. Free federal tax preparation Su cliente, Eduardo Juanes, le solicita que flete un avión de pasajeros con el propósito de llevar a un grupo de personas a un evento deportivo en otra ciudad. Free federal tax preparation Además, le solicita que reserve habitaciones en un hotel y boletos de entrada al evento deportivo para los miembros del grupo. Free federal tax preparation El Sr. Free federal tax preparation Juanes le paga a usted con dos giros por un valor de $6,000 cada uno. Free federal tax preparation En esta transacción usted ha recibido más de $10,000 en efectivo y, por lo tanto, tiene que presentar el Formulario 8300-SP. Free federal tax preparation Ventas al por menor. Free federal tax preparation   El término “ventas al por menor” significa toda venta hecha en el transcurso de un negocio u ocupación, principalmente las ventas al consumidor final. Free federal tax preparation   Por lo tanto, si su negocio u ocupación es principalmente de ventas al consumidor final, todas las ventas que haga en el transcurso de su ocupación o negocio son ventas al por menor. Free federal tax preparation Esto incluye toda venta de artículos para reventa. Free federal tax preparation Agente o intermediario. Free federal tax preparation   Una transacción que debe declararse incluye la venta al por menor de los artículos que aparecen en los puntos 1, 2 ó 3 de la lista anterior, aunque el pago haya sido recibido por un agente u otro intermediario en vez de directamente por el vendedor. Free federal tax preparation Excepción a la definición del término “efectivo” No se clasifican como efectivo un cheque de cajero, giro bancario, cheque de viajero o giro que usted reciba en una transacción que tenga que declararse, si una de las siguientes excepciones le corresponde: Excepción en el caso de ciertos préstamos bancarios. Free federal tax preparation   No se clasifican como efectivo un cheque de cajero, giro bancario, cheque de viajero o giro si provienen de un préstamo bancario. Free federal tax preparation Como prueba de que se obtuvieron de un préstamo bancario, puede usar una copia del contrato del préstamo, un documento escrito, instrucciones del banco acerca del gravamen u otra prueba similar. Free federal tax preparation Ejemplo. Free federal tax preparation Usted es concesionario de automóviles. Free federal tax preparation Le vende un automóvil a Carlota Blanco por $11,500. Free federal tax preparation La Srta. Free federal tax preparation Blanco le pagó a usted $2,000 en moneda estadounidense y le entregó un cheque de cajero por $9,500, pagadero a usted y a ella. Free federal tax preparation Se sabe que el cheque de cajero proviene de un préstamo bancario porque contiene instrucciones para que se le registre un gravamen al automóvil como garantía de pago del préstamo y, por lo tanto, el cheque de cajero no se considera efectivo. Free federal tax preparation No tiene que presentar el Formulario 8300-SP en este caso. Free federal tax preparation Excepción en el caso de ciertas ventas a plazos. Free federal tax preparation   No se considera efectivo un cheque de cajero, giro bancario, cheque de viajero o giro, si el mismo se recibe como el pago de un pagaré o de un contrato de ventas a plazos (incluido un contrato de arrendamiento que se considera una venta para propósitos del impuesto federal). Free federal tax preparation Sin embargo, esta excepción le corresponde solamente si: Usa pagarés o contratos similares en otras ventas a consumidores en el transcurso normal de su negocio u ocupación y El total de pagos que reciba como producto de la venta el sexagésimo (60) día después de la fecha en que se efectúe la venta o antes, asciende a un 50% o menos del precio de compra. Free federal tax preparation Excepción en el caso de ciertos planes de pagos iniciales. Free federal tax preparation   No se considera efectivo un cheque de cajero, giro bancario, cheque de viajero o giro si lo recibió como pago por un artículo de consumo duradero o coleccionable y, además, se dan todas las condiciones siguientes: Lo recibe conforme a un plan de pagos que requiere: Uno o más pagos iniciales y El pago del saldo del precio de la compra en la fecha de la venta. Free federal tax preparation Lo recibe más de 60 días antes de la fecha de la venta. Free federal tax preparation Durante el transcurso normal de su ocupación o negocio, usa planes de pagos con las mismas condiciones (o similares) cuando hace ventas a consumidores. Free federal tax preparation Excepción en el caso de viajes y entretenimiento. Free federal tax preparation   No se considera efectivo un cheque de cajero, giro bancario, cheque de viajero o giro recibido para un viaje o entretenimiento, si se dan todas las condiciones siguientes: Lo recibe conforme a un plan de pagos que requiere: Uno o más pagos iniciales y Que el saldo del precio de compra se pague antes de que se proporcione el artículo de viaje o entretenimiento (como el precio de un pasaje aéreo). Free federal tax preparation Lo recibe más de 60 días antes de la fecha en la cual vence el pago final. Free federal tax preparation Durante el transcurso normal de su ocupación o negocio, usa planes de pagos con las mismas condiciones (o similares) cuando hace ventas a consumidores. Free federal tax preparation Número de identificación del contribuyente (TIN) Tiene que proveer el número correcto de identificación del contribuyente (TIN, por sus siglas en inglés) de la(s) persona(s) de la(s) cual(es) recibe el efectivo. Free federal tax preparation Si la transacción se hace en representación de otra(s) persona(s), usted tiene que proveer el número de identificación del contribuyente de esa(s) persona(s). Free federal tax preparation Si no sabe cuál es el número de identificación del contribuyente de la(s) persona(s), tiene que pedírselo. Free federal tax preparation Usted podría estar sujeto a multas o sanciones por no incluir el número de identificación del contribuyente o por incluir un número incorrecto. Free federal tax preparation Hay tres tipos de número de identificación del contribuyente: El número de identificación de una persona física, incluida una persona que es dueña única de un negocio, es su número de Seguro Social (SSN, por sus siglas en inglés). Free federal tax preparation El número de identificación del contribuyente de una persona que es extranjera y no residente, pero necesita dicho número y no tiene derecho a obtener un número de Seguro Social, es el número de identificación del contribuyente individual (ITIN, por sus siglas en inglés) expedido por el IRS. Free federal tax preparation Un número de identificación del contribuyente individual consta de nueve dígitos, similar a un número de Seguro Social. Free federal tax preparation El número de identificación del contribuyente individual de otras personas, incluidas las sociedades anónimas, sociedades colectivas y caudales hereditarios, es el número de identificación del empleador (EIN, por sus siglas en inglés). Free federal tax preparation Excepción. Free federal tax preparation    Usted no está obligado a proporcionar el TIN de un extranjero no residente o una organización extranjera si dicha persona u organización extranjera: No recibe ingresos que estén realmente relacionados con la operación de una ocupación o negocio en los Estados Unidos; No tiene oficina o lugar de negocios, ni agente financiero o agente pagador en los Estados Unidos; No presenta una declaración de impuestos federales; No proporciona un certificado de retención de impuestos, el cual se describe en la sección 1. Free federal tax preparation 1441-1(e)(2) ó (3) ó 1. Free federal tax preparation 1441-5(c)(2)(iv) ó (3)(iii), según se exija en la sección 1. Free federal tax preparation 1441-1(e)(4)(vii); No tiene que proporcionar el TIN en una declaración escrita ni en ningún otro documento obligatorio conforme a la sección 897 o la sección 1445 de los reglamentos de los impuestos sobre el ingreso o En el caso de un extranjero no residente, el mismo no ha optado por presentar una declaración conjunta de impuesto federal sobre los ingresos con su cónyuge, que es ciudadano estadounidense o residente de los Estados Unidos. Free federal tax preparation ¿Qué son transacciones relacionadas? Las transacciones que se lleven a cabo entre un comprador (o un agente del comprador) y un vendedor en un período de 24 horas son transacciones relacionadas. Free federal tax preparation Si usted recibe de un mismo comprador más de $10,000 en efectivo en dos o más transacciones en un período de 24 horas, tiene que tratar las transacciones como una sola transacción y declarar los pagos en el Formulario 8300-SP. Free federal tax preparation Por ejemplo, si en un mismo día le vende a un cliente dos productos por un valor de $6,000 cada uno y el cliente le paga en efectivo, estas transacciones están relacionadas. Free federal tax preparation Debido a que el total de ambas transacciones asciende a $12,000 (más de $10,000), tiene que presentar el Formulario 8300-SP. Free federal tax preparation Más de 24 horas entre transacciones. Free federal tax preparation   Las transacciones son relacionadas aunque se lleven a cabo en un período de más de 24 horas entre ellas y se tiene conocimiento, o tiene razón para saber, que cada transacción es una de una serie de transacciones relacionadas entre ellas. Free federal tax preparation   Por ejemplo, usted es agente de viajes y un cliente le paga $8,000 en efectivo para un viaje. Free federal tax preparation Dos días más tarde, el mismo cliente le paga $3,000 adicionales en efectivo para incluir a otra persona en el viaje. Free federal tax preparation Estas transacciones están relacionadas y, por lo tanto, tiene que presentar el Formulario 8300-SP para declararlas. Free federal tax preparation ¿Qué se hace en el caso de transacciones sospechosas? Si recibe $10,000 o menos en efectivo, puede presentar voluntariamente el Formulario 8300-SP si la transacción parece ser sospechosa. Free federal tax preparation Una transacción es sospechosa si parece que una persona trata de persuadirlo para no presentar el Formulario 8300-SP o trata de que usted presente un Formulario 8300-SP con información falsa o incompleta, o si hay indicios de una posible actividad ilegal. Free federal tax preparation Si usted tiene alguna sospecha, le instamos a que se comunique lo antes posible con Investigación Penal del IRS (Criminal Investigation) de su localidad. Free federal tax preparation O puede llamar gratis a la línea directa de la FinCEN para instituciones financieras, al 1-866-556-3974. Free federal tax preparation El servicio en esta línea telefónica está disponible en inglés. Free federal tax preparation Cuándo, dónde y qué se tiene que presentar La cantidad que usted reciba, así como cuándo la reciba, determinará cuándo tiene que presentar la declaración. Free federal tax preparation Por lo general, tiene que presentar el Formulario 8300-SP dentro de un plazo de 15 días después de recibir un pago. Free federal tax preparation Si el día en que se vence el plazo para presentar el Formulario 8300-SP (el decimoquinto (15) día o el último día en el que puede presentar el formulario a tiempo) es un sábado, domingo o día feriado oficial, dicho día de vencimiento se pospone hasta el próximo día que no sea sábado, domingo o día feriado oficial. Free federal tax preparation Más de un pago. Free federal tax preparation   En algunas transacciones, el comprador puede acordar con usted pagarle en efectivo a plazos. Free federal tax preparation Si el primer pago es más de $10,000, tiene que presentar el Formulario 8300-SP dentro de un plazo de 15 días. Free federal tax preparation Si el primer pago no excede de $10,000, tiene que sumar el primer pago y todo pago posterior que haya recibido en un período de un año, a partir de la fecha en que recibió el primer pago. Free federal tax preparation Cuando el total de los pagos en efectivo ascienda a más de $10,000, tiene que presentar el Formulario 8300-SP dentro de un plazo de 15 días. Free federal tax preparation   Después de presentar el Formulario 8300-SP, tiene que comenzar a contar de nuevo los pagos en efectivo que reciba de ese comprador. Free federal tax preparation Si recibe de dicho comprador más de $10,000 en pagos adicionales en efectivo dentro de un período de 12 meses, tiene que presentar otro Formulario 8300-SP. Free federal tax preparation Tiene que presentar el formulario dentro de un plazo de 15 días a partir de la fecha en la cual recibió el pago que causó que los pagos adicionales sumaran más de $10,000. Free federal tax preparation   Si ya está obligado a presentar el Formulario 8300-SP y recibe pagos adicionales en un período de 15 días antes de la fecha en que debe presentarlo, puede declarar en un solo formulario todos los pagos recibidos. Free federal tax preparation Ejemplo. Free federal tax preparation El 10 de enero usted recibió un pago de $11,000 en efectivo. Free federal tax preparation Recibió también $4,000 el 15 de febrero, $5,000 el 20 de marzo y $6,000 el 12 de mayo en pagos adicionales en efectivo correspondientes a la misma transacción. Free federal tax preparation Tiene que presentar el Formulario 8300-SP a más tardar el 25 de enero por el pago de $11,000. Free federal tax preparation A más tardar el 27 de mayo, debe presentar un Formulario 8300-SP adicional por los pagos adicionales que suman $15,000. Free federal tax preparation ¿Cómo enmendar un informe?    Si va a enmendar un informe, marque el encasillado 1a, en la parte superior del Formulario 8300-SP. Free federal tax preparation Complete el formulario en su totalidad (de la Parte I a la Parte IV) e incluya la información que está enmendando. Free federal tax preparation No adjunte una copia del informe original. Free federal tax preparation Dónde se presenta el Formulario 8300-SP. Free federal tax preparation   Envíe el formulario por correo a la dirección que aparece en las instrucciones del Formulario 8300-SP. Free federal tax preparation Requisito de entregar una notificación al comprador. Free federal tax preparation   Tiene que entregar una notificación por escrito o por vía electrónica a cada persona cuyo nombre aparezca en algún Formulario 8300-SP que usted tenga que presentar. Free federal tax preparation Puede dar la notificación por vía electrónica únicamente si el receptor acepta recibirla en tal formato. Free federal tax preparation La notificación tiene que incluir el nombre y la dirección de su establecimiento, el nombre y el número de teléfono de la persona de contacto y el total de efectivo recibido de esa persona durante el año que usted tiene que declarar. Free federal tax preparation En dicha notificación, tiene que indicar también que está suministrando esta información al IRS . Free federal tax preparation   Tiene que enviar esta notificación al comprador a más tardar el 31 de enero del año siguiente al año en el cual recibió el efectivo que causó que tuviera que presentar el formulario. Free federal tax preparation Debe guardar durante 5 años una copia de cada Formulario 8300-SP que haya presentado. Free federal tax preparation Ejemplos Ejemplo 1. Free federal tax preparation Patricio Moreno es el gerente de ventas de “Automóviles de Exhibición, Inc. Free federal tax preparation ”. Free federal tax preparation El 6 de enero de 2013, Juana Leal le compra un automóvil nuevo y se lo paga con $18,000 en efectivo. Free federal tax preparation Patricio le pide a Juana que le muestre una identificación con el propósito de obtener los datos necesarios para completar el Formulario 8300-SP. Free federal tax preparation Un Formulario 8300-SP debidamente completado correspondiente a esta transacción aparece al final de esta publicación. Free federal tax preparation Patricio tiene que enviar por correo el Formulario 8300-SP a más tardar el día 21 de enero de 2013 a la dirección que aparece en las instrucciones del mismo. Free federal tax preparation Además, tiene que enviarle a Juana una notificación a más tardar el 31 de enero de 2014. Free federal tax preparation Ejemplo 2. Free federal tax preparation Usemos los mismos datos del Ejemplo 1, pero supongamos que en este caso Juana acordó hacer varios pagos en efectivo de $6,000 cada uno el día 6 de enero, el día 6 de febrero y el día 6 de marzo. Free federal tax preparation Patricio tendrá que presentar un Formulario 8300-SP a más tardar el 21 de febrero (15 días después de recibir la totalidad de los pagos en efectivo que asciendan a más de $10,000 dentro de un período de un año. Free federal tax preparation Patricio no está obligado a declarar los $6,000 restantes recibidos en efectivo, ya que esa cantidad no es más de $10,000. Free federal tax preparation No obstante, puede declararlos si cree que se trata de una transacción sospechosa. Free federal tax preparation Multas y sanciones La ley establece que se impongan multas civiles por no: Presentar un Formulario 8300-SP correcto para la fecha de vencimiento del mismo y Cumplir con el requisito de entregar una notificación a cada persona cuyo nombre aparece en el Formulario 8300-SP. Free federal tax preparation Si usted, a sabiendas, hace caso omiso del requisito de presentar un Formulario 8300-SP correcto para la fecha de vencimiento del mismo, la multa que se le impondrá será la mayor de las dos cantidades siguientes: $25,000 o La cantidad de efectivo que recibió y que estaba obligado a declarar (hasta un máximo de $100,000). Free federal tax preparation La ley establece que se impongan multas y sanciones por: No presentar intencionalmente el Formulario 8300-SP, Presentar intencionalmente un Formulario 8300-SP falso o fraudulento, Impedir o tratar de impedir que se presente el Formulario 8300-SP y Hacer arreglos, ayudar a que se hagan arreglos, o tratar de que se hagan arreglos para que se lleve a cabo una transacción de tal manera que parezca que no es necesario presentar el Formulario 8300-SP. Free federal tax preparation Si intencionalmente no cumple el requisito de presentar el Formulario 8300-SP, podría imponérsele una multa de hasta $250,000 a las personas físicas ($500,000 en el caso de una sociedad anónima) o una condena de hasta 5 años de cárcel, o ambas. Free federal tax preparation Estas cantidades en dólares se imponen de acuerdo a lo estipulado en la sección 3571 del Título 18 del Código de los Estados Unidos. Free federal tax preparation Las sanciones por no presentar el Formulario 8300-SP se pueden imponer también a toda persona (incluso a un pagador) que trate de dificultar o impedir que el vendedor (o el establecimiento comercial) presente un Formulario 8300-SP correcto. Free federal tax preparation Esto incluye todo intento de estructurar la transacción de manera que parezca innecesario presentar el Formulario 8300-SP. Free federal tax preparation “Estructurar” significa dividir una transacción cuantiosa de efectivo en pequeñas transacciones de efectivo. Free federal tax preparation Cómo Obtener Ayuda con los Impuestos Puede obtener ayuda con asuntos relacionados con sus impuestos que no hayan sido aún resueltos, pedir gratuitamente publicaciones y formularios, hacer preguntas acerca de los impuestos, así como obtener más información del IRS de varias maneras. Free federal tax preparation Al seleccionar el método que le resulte mejor, usted tendrá acceso rápido y fácil a ayuda relacionada con los impuestos. Free federal tax preparation Ayuda gratuita con la preparación de la declaración de impuestos. Free federal tax preparation   Existe ayuda gratuita para la preparación de la declaración de impuestos en todo el país con voluntarios capacitados por el IRS. Free federal tax preparation El programa Volunteer Income Tax Assistance (Programa de Ayuda Voluntaria a los Contribuyentes o VITA, por sus siglas en inglés) está diseñado para ayudar a los contribuyentes de bajos recursos y el programa Tax Counseling for the Elderly (Programa de Asesoramiento para las Personas Mayores o TCE, por sus siglas en inglés) está diseñado para ayudar a los contribuyentes de 60 años de edad o más con su declaración de impuestos. Free federal tax preparation En muchas de estas oficinas usted puede presentar la declaración electrónicamente gratis y los voluntarios le informarán sobre los créditos y deducciones a los que quizás tenga derecho. Free federal tax preparation Para ubicar un sitio de ayuda VITA o TCE cerca de usted, visite IRS. Free federal tax preparation gov o llame al 1-800-906-9887 o al 1-800-829-1040. Free federal tax preparation   Como parte del programa TCE, la Asociación Estadounidense de Personas Jubiladas (AARP, por sus siglas en inglés) ofrece el programa de asesoramiento AARP Tax-Aide (Programa de Ayuda Tributaria de la Asociación Estadounidense de Personas Jubiladas). Free federal tax preparation Para ubicar el sitio del programa AARP Tax-Aide más cercano a usted, llame al 1-888-227-7669 o visite el sitio web de la AARP, www. Free federal tax preparation aarp. Free federal tax preparation org/money/taxaide. Free federal tax preparation   Para más información sobre estos programas, visite www. Free federal tax preparation irs. Free federal tax preparation gov/espanol e ingrese la palabra clave “ VITA ” en la esquina superior derecha. Free federal tax preparation La información está disponible en inglés. Free federal tax preparation Internet. Free federal tax preparation Puede tener acceso al sitio web del IRS, en IRS. Free federal tax preparation gov las 24 horas del día, los 7 días a la semana para: Revisar el estado de su reembolso. Free federal tax preparation Visite www. Free federal tax preparation irs. Free federal tax preparation gov/espanol y pulse sobre el enlace “¿Dónde Está mi Reembolso?”. Free federal tax preparation Asegúrese de esperar por lo menos 72 horas después de que el IRS acuse recibo de su declaración presentada por vía electrónica o 3 a 4 semanas después de enviar una declaración en papel. Free federal tax preparation Si presentó el Formulario 8379 junto con su declaración, espere 14 semanas (11 semanas si la presentó electrónicamente). Free federal tax preparation Tenga a mano su declaración de impuestos para poder facilitar su número de Seguro Social, su estado civil para efectos de la declaración y la cantidad exacta en dólares enteros de su reembolso. Free federal tax preparation Presentar la declaración por medio del sistema electrónico e-file. Free federal tax preparation Aprenda sobre programas comerciales para la preparación de la declaración y los servicios e-file gratuitos para los contribuyentes que cumplan los requisitos. Free federal tax preparation Descargar formularios, instrucciones y publicaciones (incluyendo los formularios, instrucciones y publicaciones en audio). Free federal tax preparation Pedir productos del IRS a través de Internet. Free federal tax preparation Buscar información sobre sus preguntas acerca de impuestos en Internet. Free federal tax preparation Buscar publicaciones en Internet por tema o palabra clave. Free federal tax preparation Utilizar el Código de Impuestos Internos, los reglamentos u otras guías oficiales a través de Internet. Free federal tax preparation Ver los Internal Revenue Bulletins (Boletines del IRS, o IRB por sus siglas en inglés) publicados en los últimos años. Free federal tax preparation Calcular los descuentos de la retención usando nuestra calculadora diseñada para este propósito en el sitio web www. Free federal tax preparation irs. Free federal tax preparation gov/individuals. Free federal tax preparation Esta herramienta está disponible en inglés. Free federal tax preparation Saber si tiene que presentar el Formulario 6251, utilizando el Alternative Minimum Tax (AMT) Assistant (Hoja de Cómputo Electrónica para Calcular el Impuesto Mínimo Alternativo). Free federal tax preparation Esta herramienta está disponible en inglés en el sitio www. Free federal tax preparation irs. Free federal tax preparation gov/individuals. Free federal tax preparation Suscribirse para recibir noticias sobre impuestos locales y nacionales por medio de correo electrónico. Free federal tax preparation Obtener información acerca de cómo comenzar y administrar un pequeño negocio. Free federal tax preparation Teléfono. Free federal tax preparation Muchos servicios están disponibles por teléfono:  Cómo pedir formularios, instrucciones y publicaciones. Free federal tax preparation Llame al 1-800-829-3676 (servicio disponible en español) para pedir formularios, instrucciones y publicaciones de este año, así como de años anteriores. Free federal tax preparation Deberá recibir lo que ha pedido dentro de 10 días. Free federal tax preparation Cómo hacer preguntas relacionadas con los impuestos. Free federal tax preparation Llame al IRS para hacer preguntas al 1-800-829-1040. Free federal tax preparation Cómo resolver problemas. Free federal tax preparation Puede recibir ayuda en persona para resolver problemas tributarios en días laborables en los IRS Taxpayer Assistance Centers (Centros de Ayuda del IRS para Contribuyentes). Free federal tax preparation Un funcionario le puede explicar las cartas del IRS, ayudar a hacer solicitudes para ajustes a su cuenta tributaria o ayudarle a establecer un plan de pagos. Free federal tax preparation Llame al Centro de Ayuda del IRS para Contribuyentes local para pedir una cita. Free federal tax preparation Para obtener el número telefónico, visite el sitio web www. Free federal tax preparation irs. Free federal tax preparation gov/localcontacts o consulte la guía telefónica bajo United States Government, Internal Revenue Service (Gobierno de los Estados Unidos, Servicio de Impuestos Internos). Free federal tax preparation Equipo TTY/TDD. Free federal tax preparation Las personas que son sordas, tienen problemas auditivos o quienes tienen incapacidades del habla y tienen acceso a equipo TTY/TDD, llame al 1-800-829-4059 para hacer preguntas relacionadas con los impuestos o para pedir formularios y publicaciones. Free federal tax preparation Temas TeleTax. Free federal tax preparation Llame al 1-800-829-4477 y presione el 2 para escuchar mensajes grabados en español sobre varios temas relacionados con los impuestos. Free federal tax preparation Información sobre los reembolsos. Free federal tax preparation Puede verificar el estado de su reembolso en la nueva aplicación del IRS para teléfonos móviles. Free federal tax preparation Descargue gratuitamente la aplicación IRS2Go visitando la tienda de aplicaciones de iTunes o la tienda para las aplicaciones para los teléfonos Android. Free federal tax preparation IRS2Go es una nueva manera en donde puede obtener información y recursos. Free federal tax preparation Para revisar el estado de su reembolso, llame al 1-800-829-4477 (información automatizada sobre reembolsos en español, 24 horas al día, 7 días a la semana). Free federal tax preparation Asegúrese de esperar por lo menos 72 horas después de que el IRS acuse recibo de su declaración presentada por vía electrónica o 3 a 4 semanas después de enviar una declaración en papel. Free federal tax preparation Si presentó el Formulario 8379 junto con su declaración, espere 14 semanas (11 semanas si la presentó electrónicamente). Free federal tax preparation Tenga a mano su declaración de impuestos para poder facilitar su número de Seguro Social, su estado civil para efectos de la declaración y la cantidad exacta en dólares enteros de su reembolso. Free federal tax preparation Los reembolsos se envían el viernes de cada semana. Free federal tax preparation Si comprueba el estado de su reembolso y no se le da una fecha de envío, espere a la siguiente semana para volver a comprobarlo. Free federal tax preparation Otra información sobre reembolsos. Free federal tax preparation Para revisar el estado de un reembolso de un año anterior o un reembolso de una declaración enmendada, llame al 1-800-829-1040. Free federal tax preparation Evaluación de la calidad de nuestros servicios telefónicos. Free federal tax preparation Para asegurar que las respuestas que reciba de los funcionarios del IRS sean correctas, corteses y profesionales, evaluamos la calidad de nuestros servicios telefónicos de diversas maneras. Free federal tax preparation Una manera es que un segundo funcionario del IRS escuche o grabe las llamadas telefónicas en el momento en que éstas se lleven a cabo. Free federal tax preparation Otra manera es pedirles a algunas de las personas que llaman que contesten una breve encuesta al final de la llamada. Free federal tax preparation Visitas en persona. Free federal tax preparation Muchos productos y servicios están disponibles en varios lugares sin la necesidad de tener cita previa. Free federal tax preparation   Productos. Free federal tax preparation Puede visitar diversas oficinas de correos, bibliotecas y oficinas del IRS para obtener ciertos formularios, instrucciones y publicaciones. Free federal tax preparation Algunas oficinas del IRS, bibliotecas, supermercados, centros para hacer copias, oficinas de gobiernos municipales y de condados, cooperativas de crédito y tiendas de artículos de oficina tienen una colección de productos que se pueden imprimir de un CD o fotocopiar del documento original impreso. Free federal tax preparation Además, algunas oficinas del IRS así como algunas bibliotecas tienen el Código de Impuestos Internos, reglamentos, Boletines del IRS y Boletines Cumulativos disponibles para la búsqueda de información. Free federal tax preparation Servicios. Free federal tax preparation Usted puede visitar su Taxpayer Assistance Center (Centro de Ayuda para el Contribuyente) local del IRS cada día laborable para recibir ayuda en persona con respecto a todo problema relacionado con los impuestos. Free federal tax preparation Un funcionario puede explicarle las cartas que le envía el IRS, le puede ayudar a hacer solicitudes para ajustar su cuenta tributaria o ayudarle a establecer un plan de pagos. Free federal tax preparation Si necesita resolver un problema relacionado con los impuestos, tiene preguntas sobre cómo las leyes tributarias son aplicables a su declaración de impuestos personal o se siente más a gusto hablando con alguien en persona, visite su Centro de Ayuda para el Contribuyente a nivel local donde podrá mostrar sus archivos y documentación y hablar con un funcionario del IRS en persona. Free federal tax preparation No se necesita cita, simplemente visite y haga su consulta. Free federal tax preparation Pero si prefiere, puede llamar a su centro local y dejar un mensaje solicitando una cita para resolver un asunto relacionado con su cuenta tributaria. Free federal tax preparation Un funcionario le llamará dentro de 2 días laborables para hacer una cita en persona con usted. Free federal tax preparation Si le queda por resolver algún problema complicado relacionado con los impuestos o si tiene alguna necesidad especial, como una discapacidad, puede solicitar una cita. Free federal tax preparation Los demás asuntos se tramitan sin necesidad de hacer una cita. Free federal tax preparation Para obtener el número telefónico de la oficina local, visite el sitio web www. Free federal tax preparation irs. Free federal tax preparation gov/localcontacts o consulte la guía telefónica bajo United States Government, Internal Revenue Service (Gobierno de los Estados Unidos, Servicio de Impuestos Internos). Free federal tax preparation Correspondencia. Free federal tax preparation Puede solicitar formularios, instrucciones y publicaciones enviando una solicitud a la dirección que se proporciona a continuación y le contestaremos dentro de un período de 10 días después de haber recibido su solicitud. Free federal tax preparation  Internal Revenue Service 1201 N. Free federal tax preparation Mitsubishi Motorway Bloomington, IL 61705-6613 Servicio del Defensor del Contribuyente. Free federal tax preparation    El Servicio del Defensor del Contribuyente (TAS, por sus siglas en inglés) es su voz ante el IRS. Free federal tax preparation Nuestro trabajo es asegurarnos que cada contribuyente sea tratado de manera justa y que usted conozca y entienda sus derechos. Free federal tax preparation Nosotros ofrecemos ayuda gratuita para guiarle a través del proceso confuso de resolver problemas tributarios que usted no ha podido resolver por su cuenta. Free federal tax preparation Recuerde, lo peor que puede hacer es no hacer nada al respecto. Free federal tax preparation    TAS le puede ayudar si usted no puede resolver su problema con el IRS y: Su problema le está causando dificultades económicas a usted, a su familia o a su negocio. Free federal tax preparation Usted (o su negocio) está enfrentando una amenaza inmediata de alguna acción que se podría tomar en contra de usted. Free federal tax preparation Usted se ha tratado de comunicar con el IRS, pero nadie le ha respondido o el IRS no le ha respondido para la fecha prometida. Free federal tax preparation   Si usted reúne los requisitos para recibir nuestra ayuda, nosotros haremos todo lo que esté en nuestro poder para resolver su problema. Free federal tax preparation A usted se le asignará un defensor, quien estará con usted durante todo el proceso. Free federal tax preparation Tenemos oficinas en cada estado, el Distrito de Columbia y Puerto Rico. Free federal tax preparation Aunque TAS es una organización independiente dentro del IRS, nuestros defensores conocen cómo trabajar con el IRS para poder resolver sus problemas. Free federal tax preparation Y nuestros servicios siempre son gratuitos. Free federal tax preparation   Como contribuyente, usted tiene derechos. Free federal tax preparation El IRS tiene que cumplir con esos derechos al tratar con usted. Free federal tax preparation Nuestro conjunto de recursos en www. Free federal tax preparation TaxpayerAdvocate. Free federal tax preparation irs. Free federal tax preparation gov le puede ayudar a entender estos derechos. Free federal tax preparation   Si cree que TAS podría ayudarle, comuníquese con su defensor local, cuyo número telefónico se encuentra en su guía telefónica y en nuestro sitio web en www. Free federal tax preparation irs. Free federal tax preparation gov/advocate. Free federal tax preparation Además, puede llamar a nuestro número telefónico libre de cargos, al 1-877-777-4778. Free federal tax preparation   Además, TAS también maneja problemas de gran escala y problemas sistémicos que afectan a muchos contribuyentes. Free federal tax preparation Si usted conoce acerca de alguno de estos asuntos, por favor, infórmelo a nuestra oficina a través del Systemic Advocacy Management System (Sistema de administración de la defensa sistémica), en inglés, en www. Free federal tax preparation irs. Free federal tax preparation gov/advocate. Free federal tax preparation Talleres de Asistencia Tributaria para Contribuyentes de Bajos Recursos (LITC, por sus siglas en inglés). Free federal tax preparation   Los LITC son organizaciones independientes del IRS. Free federal tax preparation Algunos talleres le prestan servicios a personas cuyos ingresos están por debajo de ciertos niveles y necesitan resolver un asunto tributario. Free federal tax preparation Estos talleres proveen representación profesional ante el IRS o en los tribunales con asuntos como auditorías, apelaciones, litigios sobre el cobro de impuestos y otros asuntos de manera gratuita o por un cargo mínimo. Free federal tax preparation Además, algunos talleres pueden proveer información sobre los derechos y responsabilidades de los contribuyentes en muchos idiomas para las personas que hablan inglés como segunda lengua. Free federal tax preparation Si desea más información y para encontrar un taller que le quede cerca, vea la página dedicada a los LITC en www. Free federal tax preparation irs. Free federal tax preparation gov/espanol, la cual se encuentra bajo el enlace “Defensor del Contribuyente” o vea la Publicación 4134(SP), Lista de Talleres para Contribuyentes de Bajos Ingresos (o la Publicación 4134, en inglés). Free federal tax preparation Puede obtener esta publicación llamando al 1-800-829-3676 o en su oficina local del IRS. Free federal tax preparation Servicios gratuitos para los impuestos. Free federal tax preparation   Para saber qué servicios están disponibles, obtenga la Publicación 910, IRS Guide to Free Tax Services (Guía de servicios gratuitos relacionados con los impuestos), en inglés. Free federal tax preparation Contiene una lista de recursos gratuitos relacionados con los impuestos, incluidas las publicaciones, y explica sobre servicios de educación tributaria y programas de ayuda. Free federal tax preparation Además, cuenta con un índice de más de 100 temas tributarios (TeleTax), o sea, información tributaria grabada que puede escuchar por teléfono. Free federal tax preparation La mayor parte de la información y los servicios identificados en esta publicación están disponibles a usted libre de cargos. Free federal tax preparation Si acaso tendría que incurrir en un cargo para obtener algún recurso o servicio, la publicación así lo indicaría. Free federal tax preparation   Para personas discapacitadas, se pueden solicitar versiones de productos publicados por el IRS en formatos alternativos. Free federal tax preparation Discos DVD para productos tributarios. Free federal tax preparation Usted puede solicitar la Publicación 1796, IRS Tax Products DVD (DVD de productos del IRS), en inglés, y obtener: Formularios, instrucciones y publicaciones de impuestos del año en curso. Free federal tax preparation Formularios, instrucciones y publicaciones de impuestos de años anteriores. Free federal tax preparation Tax Map (Mapa Tributario): una herramienta de búsqueda electrónica y de ayuda. Free federal tax preparation Preguntas sobre leyes tributarias hechas con frecuencia. Free federal tax preparation Tax Topics (Temas Tributarios) del sistema telefónico de respuesta del IRS. Free federal tax preparation Código de Impuestos Internos — Título 26 del Código de los Estados Unidos. Free federal tax preparation Enlaces a otros materiales tributarios para búsqueda en la Internet. Free federal tax preparation Opciones para completar, imprimir y guardar la mayoría de los formularios de impuestos. Free federal tax preparation Internal Revenue Bulletins (Boletines del IRS). Free federal tax preparation Apoyo técnico telefónico gratuito y por correo electrónico. Free federal tax preparation El CD que se expide dos veces al año. Free federal tax preparation  — La primera entrega se envía a principios de enero. Free federal tax preparation  — La última entrega se envía a principios de marzo. Free federal tax preparation Compre el DVD del National Technical Information Service (NTIS, por sus siglas en inglés) en la página web www. Free federal tax preparation irs. Free federal tax preparation gov/cdorders por $30 (sin costo de tramitación) o llame gratuitamente al 1-877-233-6767 para comprar el DVD por $30 (más un cargo de tramitación de $6). Free federal tax preparation This image is too large to be displayed in the current screen. Free federal tax preparation Please click the link to view the image. Free federal tax preparation Filled-In Form 8300-SP Prev  Up  Next   Home   More Online Publications
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Contact My Local Office in New Jersey

Face-to-face Tax Help

IRS Taxpayer Assistance Centers (TACs) are your source for personal tax help when you believe your tax issue can only be handled face-to-face. No appointment is necessary.

Keep in mind, many questions can be resolved online without waiting in line. Through IRS.gov you can:
• Set up a payment plan.
• Get a transcript of your tax return.
• Make a payment.
• Check on your refund.
• Find answers to many of your tax questions.

We are now referring all requests for tax return preparation services to other available resources. You can take advantage of free tax preparation through Free File, Free File Fillable Forms or through a volunteer site in your community. To find the nearest volunteer site location or to get more information about Free File, go to the top of the page and enter “Free Tax Help” in the Search box.

If you have a tax account issues and feel that it requires talking with someone face-to-face, visit your local TAC.

Caution:  Many of our offices are located in Federal Office Buildings. These buildings may not allow visitors to bring in cell phones with camera capabilities.

Multilingual assistance is available in every office. Hours of operation are subject to change.

Before visiting your local office click on "Services Provided" in the chart below to see what services are available. Services are limited and not all services are available at every TAC office and may vary from site to site. You can get these services on a walk-in basis.

City Street Address Days/Hours of Service Telephone*
Cherry Hill 57 Haddonfield Rd.
Cherry Hill, NJ 08002

Monday-Friday - 8:30 a.m. - 4:30 p.m.


Services Provided

(856) 321-1328
Edison 100 Dey Place
Edison, NJ 08817

Monday-Friday - 8:30 a.m. - 4:30 p.m.


Services Provided

(732) 572-9752
Freehold 4 Paragon Way
Freehold, NJ 07728

Monday-Friday - 8:30 a.m. - 4:30 p.m.
 

Services Provided

(732) 660-0063
Mays Landing 5218 Atlantic Ave.
Mays Landing, NJ 08330

Monday-Friday - 8:30 a.m. - 4:30 p.m.
(Closed for lunch 12:30 p.m. - 1:30 p.m.)


Services Provided

(609) 625-0678 
Mountainside  200 Sheffield St.
Mountainside, NJ 07092 

Monday-Friday - 8:30 a.m. - 4:30 p.m.


Services Provided

(908) 301-2112 
Newark  20 Washington Place
Newark, NJ 07102 

Monday-Friday - 8:30 a.m. - 4:30 p.m.
 

Services Provided

(973) 645-6690 
Paramus  1 Kalisa Way
Paramus, NJ 07652 

Monday-Friday - 8:30 a.m. - 4:30 p.m.

 

**This office will be open until 6:00 p.m. on 4/14 & 4/15**


Services Provided

(201) 634-7052 
Parsippany  1719-C Rte. 10
Parsippany, NJ 07054 

Monday-Friday - 8:30 a.m. - 4:30 p.m.


Services Provided

(973) 808-0821 
Paterson  200 Federal Plaza
Paterson, NJ 07505 

Monday-Friday - 8:30 a.m. - 4:30 p.m.


Services Provided

(973) 357-4114 
Trenton  One State St. Square
50 West State St. 
Trenton, NJ 08608 

Monday-Friday - 8:30 a.m. - 4:30 p.m.


Services Provided

(609) 989-0533 

* Note: The phone numbers in the chart above are not toll-free for all locations. When you call, you will reach a recorded business message with information about office hours, locations and services provided in that office. If face-to-face assistance is not a priority for you, you may also get help with IRS letters or resolve tax account issues by phone, toll free at 1-800-829-1040 (individuals) or 1-800-829-4933 (businesses).


For information on where to file your tax return please see Where to File Addresses.

The Taxpayer Advocate Service: Call (973) 921-4043 in Springfield or 1-877-777-4778 elsewhere, or see Publication 1546, The Taxpayer Advocate Service of the IRS.

For further information, see Tax Topic 104.

Partnerships

IRS and organizations all over the country are partnering to assist taxpayers. Through these partnerships, organizations are also achieving their own goals. These mutually beneficial partnerships are strengthening outreach efforts and bringing education and assistance to millions.

For more information about these programs for individuals and families, contact the Stakeholder Partnerships, Education and Communication Office at:

Internal Revenue Service
20 Washington Place
First Floor
Newark, NJ 07102

For more information about these programs for businesses, your local Stakeholder Liaison office establishes relationships with organizations representing small business and self-employed taxpayers. They provide information about the policies, practices and procedures the IRS uses to ensure compliance with the tax laws. To establish a relationship with us, use this list to find a contact in your state:

Stakeholder Liaison (SL) Phone Numbers for Organizations Representing Small Businesses and Self-employed Taxpayers.

Page Last Reviewed or Updated: 28-Mar-2014

The Free Federal Tax Preparation

Free federal tax preparation Publication 541 - Main Content Table of Contents Forming a PartnershipOrganizations Classified as Partnerships Family Partnership Partnership Agreement Terminating a PartnershipIRS e-file (Electronic Filing) Exclusion From Partnership Rules Partnership Return (Form 1065) Partnership DistributionsSubstantially appreciated inventory items. Free federal tax preparation Partner's Gain or Loss Partner's Basis for Distributed Property Transactions Between Partnership and PartnersGuaranteed Payments Sale or Exchange of Property Contribution of Property Contribution of Services Basis of Partner's InterestAdjusted Basis Effect of Partnership Liabilities Disposition of Partner's InterestSale, Exchange, or Other Transfer Payments for Unrealized Receivables and Inventory Items Liquidation at Partner's Retirement or Death Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA)Partnership Item. Free federal tax preparation Small Partnerships and the Small Partnership Exception Small Partnership TEFRA Election Role of Tax Matters Partner (TMP) in TEFRA Proceedings Statute of Limitations and TEFRA Amended Returns and Administrative Adjustment Requests (AARs) How To Get Tax Help Forming a Partnership The following sections contain general information about partnerships. Free federal tax preparation Organizations Classified as Partnerships An unincorporated organization with two or more members is generally classified as a partnership for federal tax purposes if its members carry on a trade, business, financial operation, or venture and divide its profits. Free federal tax preparation However, a joint undertaking merely to share expenses is not a partnership. Free federal tax preparation For example, co-ownership of property maintained and rented or leased is not a partnership unless the co-owners provide services to the tenants. Free federal tax preparation The rules you must use to determine whether an organization is classified as a partnership changed for organizations formed after 1996. Free federal tax preparation Organizations formed after 1996. Free federal tax preparation   An organization formed after 1996 is classified as a partnership for federal tax purposes if it has two or more members and it is none of the following. Free federal tax preparation An organization formed under a federal or state law that refers to it as incorporated or as a corporation, body corporate, or body politic. Free federal tax preparation An organization formed under a state law that refers to it as a joint-stock company or joint-stock association. Free federal tax preparation An insurance company. Free federal tax preparation Certain banks. Free federal tax preparation An organization wholly owned by a state, local, or foreign government. Free federal tax preparation An organization specifically required to be taxed as a corporation by the Internal Revenue Code (for example, certain publicly traded partnerships). Free federal tax preparation Certain foreign organizations identified in section 301. Free federal tax preparation 7701-2(b)(8) of the regulations. Free federal tax preparation A tax-exempt organization. Free federal tax preparation A real estate investment trust. Free federal tax preparation An organization classified as a trust under section 301. Free federal tax preparation 7701-4 of the regulations or otherwise subject to special treatment under the Internal Revenue Code. Free federal tax preparation Any other organization that elects to be classified as a corporation by filing Form 8832. Free federal tax preparation For more information, see the instructions for Form 8832. Free federal tax preparation Limited liability company. Free federal tax preparation   A limited liability company (LLC) is an entity formed under state law by filing articles of organization as an LLC. Free federal tax preparation Unlike a partnership, none of the members of an LLC are personally liable for its debts. Free federal tax preparation An LLC may be classified for federal income tax purposes as either a partnership, a corporation, or an entity disregarded as an entity separate from its owner by applying the rules in Regulations section 301. Free federal tax preparation 7701-3. Free federal tax preparation See Form 8832 and section 301. Free federal tax preparation 7701-3 of the regulations for more details. Free federal tax preparation A domestic LLC with at least two members that does not file Form 8832 is classified as a partnership for federal income tax purposes. Free federal tax preparation Organizations formed before 1997. Free federal tax preparation   An organization formed before 1997 and classified as a partnership under the old rules will generally continue to be classified as a partnership as long as the organization has at least two members and does not elect to be classified as a corporation by filing Form 8832. Free federal tax preparation Community property. Free federal tax preparation    Spouses who own a qualified entity (defined later) can choose to classify the entity as a partnership for federal tax purposes by filing the appropriate partnership tax returns. Free federal tax preparation They can choose to classify the entity as a sole proprietorship by filing a Schedule C (Form 1040) listing one spouse as the sole proprietor. Free federal tax preparation A change in reporting position will be treated for federal tax purposes as a conversion of the entity. Free federal tax preparation   A qualified entity is a business entity that meets all the following requirements. Free federal tax preparation The business entity is wholly owned by spouses as community property under the laws of a state, a foreign country, or a possession of the United States. Free federal tax preparation No person other than one or both spouses would be considered an owner for federal tax purposes. Free federal tax preparation The business entity is not treated as a corporation. Free federal tax preparation   For more information about community property, see Publication 555, Community Property. Free federal tax preparation Publication 555 discusses the community property laws of Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. Free federal tax preparation Family Partnership Members of a family can be partners. Free federal tax preparation However, family members (or any other person) will be recognized as partners only if one of the following requirements is met. Free federal tax preparation If capital is a material income-producing factor, they acquired their capital interest in a bona fide transaction (even if by gift or purchase from another family member), actually own the partnership interest, and actually control the interest. Free federal tax preparation If capital is not a material income-producing factor, they joined together in good faith to conduct a business. Free federal tax preparation They agreed that contributions of each entitle them to a share in the profits, and some capital or service has been (or is) provided by each partner. Free federal tax preparation Capital is material. Free federal tax preparation   Capital is a material income-producing factor if a substantial part of the gross income of the business comes from the use of capital. Free federal tax preparation Capital is ordinarily an income-producing factor if the operation of the business requires substantial inventories or investments in plants, machinery, or equipment. Free federal tax preparation Capital is not material. Free federal tax preparation   In general, capital is not a material income-producing factor if the income of the business consists principally of fees, commissions, or other compensation for personal services performed by members or employees of the partnership. Free federal tax preparation Capital interest. Free federal tax preparation   A capital interest in a partnership is an interest in its assets that is distributable to the owner of the interest in either of the following situations. Free federal tax preparation The owner withdraws from the partnership. Free federal tax preparation The partnership liquidates. Free federal tax preparation   The mere right to share in earnings and profits is not a capital interest in the partnership. Free federal tax preparation Gift of capital interest. Free federal tax preparation   If a family member (or any other person) receives a gift of a capital interest in a partnership in which capital is a material income-producing factor, the donee's distributive share of partnership income is subject to both of the following restrictions. Free federal tax preparation It must be figured by reducing the partnership income by reasonable compensation for services the donor renders to the partnership. Free federal tax preparation The donee's distributive share of partnership income attributable to donated capital must not be proportionately greater than the donor's distributive share attributable to the donor's capital. Free federal tax preparation Purchase. Free federal tax preparation   For purposes of determining a partner's distributive share, an interest purchased by one family member from another family member is considered a gift from the seller. Free federal tax preparation The fair market value of the purchased interest is considered donated capital. Free federal tax preparation For this purpose, members of a family include only spouses, ancestors, and lineal descendants (or a trust for the primary benefit of those persons). Free federal tax preparation Example. Free federal tax preparation A father sold 50% of his business to his son. Free federal tax preparation The resulting partnership had a profit of $60,000. Free federal tax preparation Capital is a material income-producing factor. Free federal tax preparation The father performed services worth $24,000, which is reasonable compensation, and the son performed no services. Free federal tax preparation The $24,000 must be allocated to the father as compensation. Free federal tax preparation Of the remaining $36,000 of profit due to capital, at least 50%, or $18,000, must be allocated to the father since he owns a 50% capital interest. Free federal tax preparation The son's share of partnership profit cannot be more than $18,000. Free federal tax preparation Business owned and operated by spouses. Free federal tax preparation   If spouses carry on a business together and share in the profits and losses, they may be partners whether or not they have a formal partnership agreement. Free federal tax preparation If so, they should report income or loss from the business on Form 1065. Free federal tax preparation They should not report the income on a Schedule C (Form 1040) in the name of one spouse as a sole proprietor. Free federal tax preparation However, the spouses can elect not to treat the joint venture as a partnership by making a Qualified Joint Venture Election. Free federal tax preparation Qualified Joint Venture Election. Free federal tax preparation   A "qualified joint venture," whose only members are spouses filing a joint return, can elect not to be treated as a partnership for federal tax purposes. Free federal tax preparation A qualified joint venture conducts a trade or business where: the only members of the joint venture are spouses filing jointly; both spouses elect not to be treated as a partnership; both spouses materially participate in the trade or business (see Passive Activity Limitations in the Instructions for Form 1065 for a definition of material participation); and the business is co-owned by both spouses and is not held in the name of a state law entity such as a partnership or LLC. Free federal tax preparation   Under this election, a qualified joint venture conducted by spouses who file a joint return is not treated as a partnership for federal tax purposes and therefore does not have a Form 1065 filing requirement. Free federal tax preparation All items of income, gain, deduction, loss, and credit are divided between the spouses based on their respective interests in the venture. Free federal tax preparation Each spouse takes into account his or her respective share of these items as a sole proprietor. Free federal tax preparation Each spouse would account for his or her respective share on the appropriate form, such as Schedule C (Form 1040). Free federal tax preparation For purposes of determining net earnings from self-employment, each spouse's share of income or loss from a qualified joint venture is taken into account just as it is for federal income tax purposes (i. Free federal tax preparation e. Free federal tax preparation , based on their respective interests in the venture). Free federal tax preparation   If the spouses do not make the election to treat their respective interests in the joint venture as sole proprietorships, each spouse should carry his or her share of the partnership income or loss from Schedule K-1 (Form 1065) to their joint or separate Form(s) 1040. Free federal tax preparation Each spouse should include his or her respective share of self-employment income on a separate Schedule SE (Form 1040), Self-Employment Tax. Free federal tax preparation   This generally does not increase the total tax on the return, but it does give each spouse credit for social security earnings on which retirement benefits are based. Free federal tax preparation However, this may not be true if either spouse exceeds the social security tax limitation. Free federal tax preparation   For more information on qualified joint ventures, go to IRS. Free federal tax preparation gov, enter “Election for Qualified Joint Ventures” in the search box and select the link reading “Election for Husband and Wife Unincorporated Businesses. Free federal tax preparation ” Partnership Agreement The partnership agreement includes the original agreement and any modifications. Free federal tax preparation The modifications must be agreed to by all partners or adopted in any other manner provided by the partnership agreement. Free federal tax preparation The agreement or modifications can be oral or written. Free federal tax preparation Partners can modify the partnership agreement for a particular tax year after the close of the year but not later than the date for filing the partnership return for that year. Free federal tax preparation This filing date does not include any extension of time. Free federal tax preparation If the partnership agreement or any modification is silent on any matter, the provisions of local law are treated as part of the agreement. Free federal tax preparation Terminating a Partnership A partnership terminates when one of the following events takes place. Free federal tax preparation All its operations are discontinued and no part of any business, financial operation, or venture is continued by any of its partners in a partnership. Free federal tax preparation At least 50% of the total interest in partnership capital and profits is sold or exchanged within a 12-month period, including a sale or exchange to another partner. Free federal tax preparation Unlike other partnerships, an electing large partnership does not terminate on the sale or exchange of 50% or more of the partnership interests within a 12-month period. Free federal tax preparation See section 1. Free federal tax preparation 708-1(b) of the regulations for more information on the termination of a partnership. Free federal tax preparation For special rules that apply to a merger, consolidation, or division of a partnership, see sections 1. Free federal tax preparation 708-1(c) and 1. Free federal tax preparation 708-1(d) of the regulations. Free federal tax preparation Date of termination. Free federal tax preparation   The partnership's tax year ends on the date of termination. Free federal tax preparation For the event described in (1), above, the date of termination is the date the partnership completes the winding up of its affairs. Free federal tax preparation For the event described in (2), above, the date of termination is the date of the sale or exchange of a partnership interest that, by itself or together with other sales or exchanges in the preceding 12 months, transfers an interest of 50% or more in both capital and profits. Free federal tax preparation Short period return. Free federal tax preparation   If a partnership is terminated before the end of what would otherwise be its tax year, Form 1065 must be filed for the short period, which is the period from the beginning of the tax year through the date of termination. Free federal tax preparation The return is due the 15th day of the fourth month following the date of termination. Free federal tax preparation See Partnership Return (Form 1065), later, for information about filing Form 1065. Free federal tax preparation Conversion of partnership into limited liability company (LLC). Free federal tax preparation   The conversion of a partnership into an LLC classified as a partnership for federal tax purposes does not terminate the partnership. Free federal tax preparation The conversion is not a sale, exchange, or liquidation of any partnership interest; the partnership's tax year does not close; and the LLC can continue to use the partnership's taxpayer identification number. Free federal tax preparation   However, the conversion may change some of the partners' bases in their partnership interests if the partnership has recourse liabilities that become nonrecourse liabilities. Free federal tax preparation Because the partners share recourse and nonrecourse liabilities differently, their bases must be adjusted to reflect the new sharing ratios. Free federal tax preparation If a decrease in a partner's share of liabilities exceeds the partner's basis, he or she must recognize gain on the excess. Free federal tax preparation For more information, see Effect of Partnership Liabilities under Basis of Partner's Interest, later. Free federal tax preparation   The same rules apply if an LLC classified as a partnership is converted into a partnership. Free federal tax preparation IRS e-file (Electronic Filing) Please click here for the text description of the image. Free federal tax preparation e-file Certain partnerships with more than 100 partners are required to file Form 1065, Schedules K-1, and related forms and schedules electronically (e-file). Free federal tax preparation Other partnerships generally have the option to file electronically. Free federal tax preparation For details about IRS e-file, see the Form 1065 instructions. Free federal tax preparation Exclusion From Partnership Rules Certain partnerships that do not actively conduct a business can choose to be completely or partially excluded from being treated as partnerships for federal income tax purposes. Free federal tax preparation All the partners must agree to make the choice, and the partners must be able to compute their own taxable income without computing the partnership's income. Free federal tax preparation However, the partners are not exempt from the rule that limits a partner's distributive share of partnership loss to the adjusted basis of the partner's partnership interest. Free federal tax preparation Nor are they exempt from the requirement of a business purpose for adopting a tax year for the partnership that differs from its required tax year. Free federal tax preparation Investing partnership. Free federal tax preparation   An investing partnership can be excluded if the participants in the joint purchase, retention, sale, or exchange of investment property meet all the following requirements. Free federal tax preparation They own the property as co-owners. Free federal tax preparation They reserve the right separately to take or dispose of their shares of any property acquired or retained. Free federal tax preparation They do not actively conduct business or irrevocably authorize some person acting in a representative capacity to purchase, sell, or exchange the investment property. Free federal tax preparation Each separate participant can delegate authority to purchase, sell, or exchange his or her share of the investment property for the time being for his or her account, but not for a period of more than a year. Free federal tax preparation Operating agreement partnership. Free federal tax preparation   An operating agreement partnership group can be excluded if the participants in the joint production, extraction, or use of property meet all the following requirements. Free federal tax preparation They own the property as co-owners, either in fee or under lease or other form of contract granting exclusive operating rights. Free federal tax preparation They reserve the right separately to take in kind or dispose of their shares of any property produced, extracted, or used. Free federal tax preparation They do not jointly sell services or the property produced or extracted. Free federal tax preparation Each separate participant can delegate authority to sell his or her share of the property produced or extracted for the time being for his or her account, but not for a period of time in excess of the minimum needs of the industry, and in no event for more than one year. Free federal tax preparation However, this exclusion does not apply to an unincorporated organization one of whose principal purposes is cycling, manufacturing, or processing for persons who are not members of the organization. Free federal tax preparation Electing the exclusion. Free federal tax preparation   An eligible organization that wishes to be excluded from the partnership rules must make the election not later than the time for filing the partnership return for the first tax year for which exclusion is desired. Free federal tax preparation This filing date includes any extension of time. Free federal tax preparation See Regulations section 1. Free federal tax preparation 761-2(b) for the procedures to follow. Free federal tax preparation Partnership Return (Form 1065) Every partnership that engages in a trade or business or has gross income must file an information return on Form 1065 showing its income, deductions, and other required information. Free federal tax preparation The partnership return must show the names and addresses of each partner and each partner's distributive share of taxable income. Free federal tax preparation The return must be signed by a general partner. Free federal tax preparation If a limited liability company is treated as a partnership, it must file Form 1065 and one of its members must sign the return. Free federal tax preparation A partnership is not considered to engage in a trade or business, and is not required to file a Form 1065, for any tax year in which it neither receives income nor pays or incurs any expenses treated as deductions or credits for federal income tax purposes. Free federal tax preparation See the Instructions for Form 1065 for more information about who must file Form 1065. Free federal tax preparation Partnership Distributions Partnership distributions include the following. Free federal tax preparation A withdrawal by a partner in anticipation of the current year's earnings. Free federal tax preparation A distribution of the current year's or prior years' earnings not needed for working capital. Free federal tax preparation A complete or partial liquidation of a partner's interest. Free federal tax preparation A distribution to all partners in a complete liquidation of the partnership. Free federal tax preparation A partnership distribution is not taken into account in determining the partner's distributive share of partnership income or loss. Free federal tax preparation If any gain or loss from the distribution is recognized by the partner, it must be reported on his or her return for the tax year in which the distribution is received. Free federal tax preparation Money or property withdrawn by a partner in anticipation of the current year's earnings is treated as a distribution received on the last day of the partnership's tax year. Free federal tax preparation Effect on partner's basis. Free federal tax preparation   A partner's adjusted basis in his or her partnership interest is decreased (but not below zero) by the money and adjusted basis of property distributed to the partner. Free federal tax preparation See Adjusted Basis under Basis of Partner's Interest, later. Free federal tax preparation Effect on partnership. Free federal tax preparation   A partnership generally does not recognize any gain or loss because of distributions it makes to partners. Free federal tax preparation The partnership may be able to elect to adjust the basis of its undistributed property. Free federal tax preparation Certain distributions treated as a sale or exchange. Free federal tax preparation   When a partnership distributes the following items, the distribution may be treated as a sale or exchange of property rather than a distribution. Free federal tax preparation Unrealized receivables or substantially appreciated inventory items distributed in exchange for any part of the partner's interest in other partnership property, including money. Free federal tax preparation Other property (including money) distributed in exchange for any part of a partner's interest in unrealized receivables or substantially appreciated inventory items. Free federal tax preparation   See Payments for Unrealized Receivables and Inventory Items under Disposition of Partner's Interest, later. Free federal tax preparation   This treatment does not apply to the following distributions. Free federal tax preparation A distribution of property to the partner who contributed the property to the partnership. Free federal tax preparation Payments made to a retiring partner or successor in interest of a deceased partner that are the partner's distributive share of partnership income or guaranteed payments. Free federal tax preparation Substantially appreciated inventory items. Free federal tax preparation   Inventory items of the partnership are considered to have appreciated substantially in value if, at the time of the distribution, their total fair market value is more than 120% of the partnership's adjusted basis for the property. Free federal tax preparation However, if a principal purpose for acquiring inventory property is to avoid ordinary income treatment by reducing the appreciation to less than 120%, that property is excluded. Free federal tax preparation Partner's Gain or Loss A partner generally recognizes gain on a partnership distribution only to the extent any money (and marketable securities treated as money) included in the distribution exceeds the adjusted basis of the partner's interest in the partnership. Free federal tax preparation Any gain recognized is generally treated as capital gain from the sale of the partnership interest on the date of the distribution. Free federal tax preparation If partnership property (other than marketable securities treated as money) is distributed to a partner, he or she generally does not recognize any gain until the sale or other disposition of the property. Free federal tax preparation For exceptions to these rules, see Distribution of partner's debt and Net precontribution gain, later. Free federal tax preparation Also, see Payments for Unrealized Receivables and Inventory Items under Disposition of Partner's Interest, later. Free federal tax preparation Example. Free federal tax preparation The adjusted basis of Jo's partnership interest is $14,000. Free federal tax preparation She receives a distribution of $8,000 cash and land that has an adjusted basis of $2,000 and a fair market value of $3,000. Free federal tax preparation Because the cash received does not exceed the basis of her partnership interest, Jo does not recognize any gain on the distribution. Free federal tax preparation Any gain on the land will be recognized when she sells or otherwise disposes of it. Free federal tax preparation The distribution decreases the adjusted basis of Jo's partnership interest to $4,000 [$14,000 − ($8,000 + $2,000)]. Free federal tax preparation Marketable securities treated as money. Free federal tax preparation   Generally, a marketable security distributed to a partner is treated as money in determining whether gain is recognized on the distribution. Free federal tax preparation This treatment, however, does not generally apply if that partner contributed the security to the partnership or an investment partnership made the distribution to an eligible partner. Free federal tax preparation   The amount treated as money is the security's fair market value when distributed, reduced (but not below zero) by the excess (if any) of: The partner's distributive share of the gain that would be recognized had the partnership sold all its marketable securities at their fair market value immediately before the transaction resulting in the distribution, over The partner's distributive share of the gain that would be recognized had the partnership sold all such securities it still held after the distribution at the fair market value in (1). Free federal tax preparation   For more information, including the definition of marketable securities, see section 731(c) of the Internal Revenue Code. Free federal tax preparation Loss on distribution. Free federal tax preparation   A partner does not recognize loss on a partnership distribution unless all the following requirements are met. Free federal tax preparation The adjusted basis of the partner's interest in the partnership exceeds the distribution. Free federal tax preparation The partner's entire interest in the partnership is liquidated. Free federal tax preparation The distribution is in money, unrealized receivables, or inventory items. Free federal tax preparation   There are exceptions to these general rules. Free federal tax preparation See the following discussions. Free federal tax preparation Also, see Liquidation at Partner's Retirement or Death under Disposition of Partner's Interest, later. Free federal tax preparation Distribution of partner's debt. Free federal tax preparation   If a partnership acquires a partner's debt and extinguishes the debt by distributing it to the partner, the partner will recognize capital gain or loss to the extent the fair market value of the debt differs from the basis of the debt (determined under the rules discussed in Partner's Basis for Distributed Property, later). Free federal tax preparation   The partner is treated as having satisfied the debt for its fair market value. Free federal tax preparation If the issue price (adjusted for any premium or discount) of the debt exceeds its fair market value when distributed, the partner may have to include the excess amount in income as canceled debt. Free federal tax preparation   Similarly, a deduction may be available to a corporate partner if the fair market value of the debt at the time of distribution exceeds its adjusted issue price. Free federal tax preparation Net precontribution gain. Free federal tax preparation   A partner generally must recognize gain on the distribution of property (other than money) if the partner contributed appreciated property to the partnership during the 7-year period before the distribution. Free federal tax preparation   The gain recognized is the lesser of the following amounts. Free federal tax preparation The excess of: The fair market value of the property received in the distribution, over The adjusted basis of the partner's interest in the partnership immediately before the distribution, reduced (but not below zero) by any money received in the distribution. Free federal tax preparation The “net precontribution gain” of the partner. Free federal tax preparation This is the net gain the partner would recognize if all the property contributed by the partner within 7 years of the distribution, and held by the partnership immediately before the distribution, were distributed to another partner, other than a partner who owns more than 50% of the partnership. Free federal tax preparation For information about the distribution of contributed property to another partner, see Contribution of Property , under Transactions Between Partnership and Partners, later. Free federal tax preparation   The character of the gain is determined by reference to the character of the net precontribution gain. Free federal tax preparation This gain is in addition to any gain the partner must recognize if the money distributed is more than his or her basis in the partnership. Free federal tax preparation For these rules, the term “money” includes marketable securities treated as money, as discussed earlier. Free federal tax preparation Effect on basis. Free federal tax preparation   The adjusted basis of the partner's interest in the partnership is increased by any net precontribution gain recognized by the partner. Free federal tax preparation Other than for purposes of determining the gain, the increase is treated as occurring immediately before the distribution. Free federal tax preparation See Basis of Partner's Interest , later. Free federal tax preparation   The partnership must adjust its basis in any property the partner contributed within 7 years of the distribution to reflect any gain that partner recognizes under this rule. Free federal tax preparation Exceptions. Free federal tax preparation   Any part of a distribution that is property the partner previously contributed to the partnership is not taken into account in determining the amount of the excess distribution or the partner's net precontribution gain. Free federal tax preparation For this purpose, the partner's previously contributed property does not include a contributed interest in an entity to the extent its value is due to property contributed to the entity after the interest was contributed to the partnership. Free federal tax preparation   Recognition of gain under this rule also does not apply to a distribution of unrealized receivables or substantially appreciated inventory items if the distribution is treated as a sale or exchange, as discussed earlier. Free federal tax preparation Partner's Basis for Distributed Property Unless there is a complete liquidation of a partner's interest, the basis of property (other than money) distributed to the partner by a partnership is its adjusted basis to the partnership immediately before the distribution. Free federal tax preparation However, the basis of the property to the partner cannot be more than the adjusted basis of his or her interest in the partnership reduced by any money received in the same transaction. Free federal tax preparation Example 1. Free federal tax preparation The adjusted basis of Emily's partnership interest is $30,000. Free federal tax preparation She receives a distribution of property that has an adjusted basis of $20,000 to the partnership and $4,000 in cash. Free federal tax preparation Her basis for the property is $20,000. Free federal tax preparation Example 2. Free federal tax preparation The adjusted basis of Steve's partnership interest is $10,000. Free federal tax preparation He receives a distribution of $4,000 cash and property that has an adjusted basis to the partnership of $8,000. Free federal tax preparation His basis for the distributed property is limited to $6,000 ($10,000 − $4,000, the cash he receives). Free federal tax preparation Complete liquidation of partner's interest. Free federal tax preparation   The basis of property received in complete liquidation of a partner's interest is the adjusted basis of the partner's interest in the partnership reduced by any money distributed to the partner in the same transaction. Free federal tax preparation Partner's holding period. Free federal tax preparation   A partner's holding period for property distributed to the partner includes the period the property was held by the partnership. Free federal tax preparation If the property was contributed to the partnership by a partner, then the period it was held by that partner is also included. Free federal tax preparation Basis divided among properties. Free federal tax preparation   If the basis of property received is the adjusted basis of the partner's interest in the partnership (reduced by money received in the same transaction), it must be divided among the properties distributed to the partner. Free federal tax preparation For property distributed after August 5, 1997, allocate the basis using the following rules. Free federal tax preparation Allocate the basis first to unrealized receivables and inventory items included in the distribution by assigning a basis to each item equal to the partnership's adjusted basis in the item immediately before the distribution. Free federal tax preparation If the total of these assigned bases exceeds the allocable basis, decrease the assigned bases by the amount of the excess. Free federal tax preparation Allocate any remaining basis to properties other than unrealized receivables and inventory items by assigning a basis to each property equal to the partnership's adjusted basis in the property immediately before the distribution. Free federal tax preparation If the allocable basis exceeds the total of these assigned bases, increase the assigned bases by the amount of the excess. Free federal tax preparation If the total of these assigned bases exceeds the allocable basis, decrease the assigned bases by the amount of the excess. Free federal tax preparation Allocating a basis increase. Free federal tax preparation   Allocate any basis increase required in rule (2), above, first to properties with unrealized appreciation to the extent of the unrealized appreciation. Free federal tax preparation If the basis increase is less than the total unrealized appreciation, allocate it among those properties in proportion to their respective amounts of unrealized appreciation. Free federal tax preparation Allocate any remaining basis increase among all the properties in proportion to their respective fair market values. Free federal tax preparation Example. Free federal tax preparation Eun's basis in her partnership interest is $55,000. Free federal tax preparation In a distribution in liquidation of her entire interest, she receives properties A and B, neither of which is inventory or unrealized receivables. Free federal tax preparation Property A has an adjusted basis to the partnership of $5,000 and a fair market value of $40,000. Free federal tax preparation Property B has an adjusted basis to the partnership of $10,000 and a fair market value of $10,000. Free federal tax preparation To figure her basis in each property, Eun first assigns bases of $5,000 to property A and $10,000 to property B (their adjusted bases to the partnership). Free federal tax preparation This leaves a $40,000 basis increase (the $55,000 allocable basis minus the $15,000 total of the assigned bases). Free federal tax preparation She first allocates $35,000 to property A (its unrealized appreciation). Free federal tax preparation The remaining $5,000 is allocated between the properties based on their fair market values. Free federal tax preparation $4,000 ($40,000/$50,000) is allocated to property A and $1,000 ($10,000/$50,000) is allocated to property B. Free federal tax preparation Eun's basis in property A is $44,000 ($5,000 + $35,000 + $4,000) and her basis in property B is $11,000 ($10,000 + $1,000). Free federal tax preparation Allocating a basis decrease. Free federal tax preparation   Use the following rules to allocate any basis decrease required in rule (1) or rule (2), earlier. Free federal tax preparation Allocate the basis decrease first to items with unrealized depreciation to the extent of the unrealized depreciation. Free federal tax preparation If the basis decrease is less than the total unrealized depreciation, allocate it among those items in proportion to their respective amounts of unrealized depreciation. Free federal tax preparation Allocate any remaining basis decrease among all the items in proportion to their respective assigned basis amounts (as decreased in (1)). Free federal tax preparation Example. Free federal tax preparation Armando's basis in his partnership interest is $20,000. Free federal tax preparation In a distribution in liquidation of his entire interest, he receives properties C and D, neither of which is inventory or unrealized receivables. Free federal tax preparation Property C has an adjusted basis to the partnership of $15,000 and a fair market value of $15,000. Free federal tax preparation Property D has an adjusted basis to the partnership of $15,000 and a fair market value of $5,000. Free federal tax preparation To figure his basis in each property, Armando first assigns bases of $15,000 to property C and $15,000 to property D (their adjusted bases to the partnership). Free federal tax preparation This leaves a $10,000 basis decrease (the $30,000 total of the assigned bases minus the $20,000 allocable basis). Free federal tax preparation He allocates the entire $10,000 to property D (its unrealized depreciation). Free federal tax preparation Armando's basis in property C is $15,000 and his basis in property D is $5,000 ($15,000 − $10,000). Free federal tax preparation Distributions before August 6, 1997. Free federal tax preparation   For property distributed before August 6, 1997, allocate the basis using the following rules. Free federal tax preparation Allocate the basis first to unrealized receivables and inventory items included in the distribution to the extent of the partnership's adjusted basis in those items. Free federal tax preparation If the partnership's adjusted basis in those items exceeded the allocable basis, allocate the basis among the items in proportion to their adjusted bases to the partnership. Free federal tax preparation Allocate any remaining basis to other distributed properties in proportion to their adjusted bases to the partnership. Free federal tax preparation Partner's interest more than partnership basis. Free federal tax preparation   If the basis of a partner's interest to be divided in a complete liquidation of the partner's interest is more than the partnership's adjusted basis for the unrealized receivables and inventory items distributed, and if no other property is distributed to which the partner can apply the remaining basis, the partner has a capital loss to the extent of the remaining basis of the partnership interest. Free federal tax preparation Special adjustment to basis. Free federal tax preparation   A partner who acquired any part of his or her partnership interest in a sale or exchange or upon the death of another partner may be able to choose a special basis adjustment for property distributed by the partnership. Free federal tax preparation To choose the special adjustment, the partner must have received the distribution within 2 years after acquiring the partnership interest. Free federal tax preparation Also, the partnership must not have chosen the optional adjustment to basis when the partner acquired the partnership interest. Free federal tax preparation   If a partner chooses this special basis adjustment, the partner's basis for the property distributed is the same as it would have been if the partnership had chosen the optional adjustment to basis. Free federal tax preparation However, this assigned basis is not reduced by any depletion or depreciation that would have been allowed or allowable if the partnership had previously chosen the optional adjustment. Free federal tax preparation   The choice must be made with the partner's tax return for the year of the distribution if the distribution includes any property subject to depreciation, depletion, or amortization. Free federal tax preparation If the choice does not have to be made for the distribution year, it must be made with the return for the first year in which the basis of the distributed property is pertinent in determining the partner's income tax. Free federal tax preparation   A partner choosing this special basis adjustment must attach a statement to his or her tax return that the partner chooses under section 732(d) of the Internal Revenue Code to adjust the basis of property received in a distribution. Free federal tax preparation The statement must show the computation of the special basis adjustment for the property distributed and list the properties to which the adjustment has been allocated. Free federal tax preparation Example. Free federal tax preparation Chin Ho purchased a 25% interest in X partnership for $17,000 cash. Free federal tax preparation At the time of the purchase, the partnership owned inventory having a basis to the partnership of $14,000 and a fair market value of $16,000. Free federal tax preparation Thus, $4,000 of the $17,000 he paid was attributable to his share of inventory with a basis to the partnership of $3,500. Free federal tax preparation Within 2 years after acquiring his interest, Chin Ho withdrew from the partnership and for his entire interest received cash of $1,500, inventory with a basis to the partnership of $3,500, and other property with a basis of $6,000. Free federal tax preparation The value of the inventory received was 25% of the value of all partnership inventory. Free federal tax preparation (It is immaterial whether the inventory he received was on hand when he acquired his interest. Free federal tax preparation ) Since the partnership from which Chin Ho withdrew did not make the optional adjustment to basis, he chose to adjust the basis of the inventory received. Free federal tax preparation His share of the partnership's basis for the inventory is increased by $500 (25% of the $2,000 difference between the $16,000 fair market value of the inventory and its $14,000 basis to the partnership at the time he acquired his interest). Free federal tax preparation The adjustment applies only for purposes of determining his new basis in the inventory, and not for purposes of partnership gain or loss on disposition. Free federal tax preparation The total to be allocated among the properties Chin Ho received in the distribution is $15,500 ($17,000 basis of his interest − $1,500 cash received). Free federal tax preparation His basis in the inventory items is $4,000 ($3,500 partnership basis + $500 special adjustment). Free federal tax preparation The remaining $11,500 is allocated to his new basis for the other property he received. Free federal tax preparation Mandatory adjustment. Free federal tax preparation   A partner does not always have a choice of making this special adjustment to basis. Free federal tax preparation The special adjustment to basis must be made for a distribution of property (whether or not within 2 years after the partnership interest was acquired) if all the following conditions existed when the partner received the partnership interest. Free federal tax preparation The fair market value of all partnership property (other than money) was more than 110% of its adjusted basis to the partnership. Free federal tax preparation If there had been a liquidation of the partner's interest immediately after it was acquired, an allocation of the basis of that interest under the general rules (discussed earlier under Basis divided among properties) would have decreased the basis of property that could not be depreciated, depleted, or amortized and increased the basis of property that could be. Free federal tax preparation The optional basis adjustment, if it had been chosen by the partnership, would have changed the partner's basis for the property actually distributed. Free federal tax preparation Required statement. Free federal tax preparation   Generally, if a partner chooses a special basis adjustment and notifies the partnership, or if the partnership makes a distribution for which the special basis adjustment is mandatory, the partnership must provide a statement to the partner. Free federal tax preparation The statement must provide information necessary for the partner to compute the special basis adjustment. Free federal tax preparation Marketable securities. Free federal tax preparation   A partner's basis in marketable securities received in a partnership distribution, as determined in the preceding discussions, is increased by any gain recognized by treating the securities as money. Free federal tax preparation See Marketable securities treated as money under Partner's Gain or Loss, earlier. Free federal tax preparation The basis increase is allocated among the securities in proportion to their respective amounts of unrealized appreciation before the basis increase. Free federal tax preparation Transactions Between Partnership and Partners For certain transactions between a partner and his or her partnership, the partner is treated as not being a member of the partnership. Free federal tax preparation These transactions include the following. Free federal tax preparation Performing services for, or transferring property to, a partnership if: There is a related allocation and distribution to a partner, and The entire transaction, when viewed together, is properly characterized as occurring between the partnership and a partner not acting in the capacity of a partner. Free federal tax preparation Transferring money or other property to a partnership if: There is a related transfer of money or other property by the partnership to the contributing partner or another partner, and The transfers together are properly characterized as a sale or exchange of property. Free federal tax preparation Payments by accrual basis partnership to cash basis partner. Free federal tax preparation   A partnership that uses an accrual method of accounting cannot deduct any business expense owed to a cash basis partner until the amount is paid. Free federal tax preparation However, this rule does not apply to guaranteed payments made to a partner, which are generally deductible when accrued. Free federal tax preparation Guaranteed Payments Guaranteed payments are those made by a partnership to a partner that are determined without regard to the partnership's income. Free federal tax preparation A partnership treats guaranteed payments for services, or for the use of capital, as if they were made to a person who is not a partner. Free federal tax preparation This treatment is for purposes of determining gross income and deductible business expenses only. Free federal tax preparation For other tax purposes, guaranteed payments are treated as a partner's distributive share of ordinary income. Free federal tax preparation Guaranteed payments are not subject to income tax withholding. Free federal tax preparation The partnership generally deducts guaranteed payments on line 10 of Form 1065 as a business expense. Free federal tax preparation They are also listed on Schedules K and K-1 of the partnership return. Free federal tax preparation The individual partner reports guaranteed payments on Schedule E (Form 1040) as ordinary income, along with his or her distributive share of the partnership's other ordinary income. Free federal tax preparation Guaranteed payments made to partners for organizing the partnership or syndicating interests in the partnership are capital expenses. Free federal tax preparation Generally, organizational and syndication expenses are not deductible by the partnership. Free federal tax preparation However, a partnership can elect to deduct a portion of its organizational expenses and amortize the remaining expenses (see Business start-up and organizational costs in the Instructions for Form 1065). Free federal tax preparation Organizational expenses (if the election is not made) and syndication expenses paid to partners must be reported on the partners' Schedule K-1 as guaranteed payments. Free federal tax preparation Minimum payment. Free federal tax preparation   If a partner is to receive a minimum payment from the partnership, the guaranteed payment is the amount by which the minimum payment is more than the partner's distributive share of the partnership income before taking into account the guaranteed payment. Free federal tax preparation Example. Free federal tax preparation Under a partnership agreement, Divya is to receive 30% of the partnership income, but not less than $8,000. Free federal tax preparation The partnership has net income of $20,000. Free federal tax preparation Divya's share, without regard to the minimum guarantee, is $6,000 (30% × $20,000). Free federal tax preparation The guaranteed payment that can be deducted by the partnership is $2,000 ($8,000 − $6,000). Free federal tax preparation Divya's income from the partnership is $8,000, and the remaining $12,000 of partnership income will be reported by the other partners in proportion to their shares under the partnership agreement. Free federal tax preparation If the partnership net income had been $30,000, there would have been no guaranteed payment since her share, without regard to the guarantee, would have been greater than the guarantee. Free federal tax preparation Self-employed health insurance premiums. Free federal tax preparation   Premiums for health insurance paid by a partnership on behalf of a partner, for services as a partner, are treated as guaranteed payments. Free federal tax preparation The partnership can deduct the payments as a business expense, and the partner must include them in gross income. Free federal tax preparation However, if the partnership accounts for insurance paid for a partner as a reduction in distributions to the partner, the partnership cannot deduct the premiums. Free federal tax preparation   A partner who qualifies can deduct 100% of the health insurance premiums paid by the partnership on his or her behalf as an adjustment to income. Free federal tax preparation The partner cannot deduct the premiums for any calendar month, or part of a month, in which the partner is eligible to participate in any subsidized health plan maintained by any employer of the partner, the partner's spouse, the partner's dependents, or any children under age 27 who are not dependents. Free federal tax preparation For more information on the self-employed health insurance deduction, see chapter 6 in Publication 535. Free federal tax preparation Including payments in partner's income. Free federal tax preparation   Guaranteed payments are included in income in the partner's tax year in which the partnership's tax year ends. Free federal tax preparation Example 1. Free federal tax preparation Under the terms of a partnership agreement, Erica is entitled to a fixed annual payment of $10,000 without regard to the income of the partnership. Free federal tax preparation Her distributive share of the partnership income is 10%. Free federal tax preparation The partnership has $50,000 of ordinary income after deducting the guaranteed payment. Free federal tax preparation She must include ordinary income of $15,000 ($10,000 guaranteed payment + $5,000 ($50,000 × 10%) distributive share) on her individual income tax return for her tax year in which the partnership's tax year ends. Free federal tax preparation Example 2. Free federal tax preparation Lamont is a calendar year taxpayer who is a partner in a partnership. Free federal tax preparation The partnership uses a fiscal year that ended January 31, 2013. Free federal tax preparation Lamont received guaranteed payments from the partnership from February 1, 2012, until December 31, 2012. Free federal tax preparation He must include these guaranteed payments in income for 2013 and report them on his 2013 income tax return. Free federal tax preparation Payments resulting in loss. Free federal tax preparation   If guaranteed payments to a partner result in a partnership loss in which the partner shares, the partner must report the full amount of the guaranteed payments as ordinary income. Free federal tax preparation The partner separately takes into account his or her distributive share of the partnership loss, to the extent of the adjusted basis of the partner's partnership interest. Free federal tax preparation Sale or Exchange of Property Special rules apply to a sale or exchange of property between a partnership and certain persons. Free federal tax preparation Losses. Free federal tax preparation   Losses will not be allowed from a sale or exchange of property (other than an interest in the partnership) directly or indirectly between a partnership and a person whose direct or indirect interest in the capital or profits of the partnership is more than 50%. Free federal tax preparation   If the sale or exchange is between two partnerships in which the same persons directly or indirectly own more than 50% of the capital or profits interests in each partnership, no deduction of a loss is allowed. Free federal tax preparation   The basis of each partner's interest in the partnership is decreased (but not below zero) by the partner's share of the disallowed loss. Free federal tax preparation   If the purchaser later sells the property, only the gain realized that is greater than the loss not allowed will be taxable. Free federal tax preparation If any gain from the sale of the property is not recognized because of this rule, the basis of each partner's interest in the partnership is increased by the partner's share of that gain. Free federal tax preparation Gains. Free federal tax preparation   Gains are treated as ordinary income in a sale or exchange of property directly or indirectly between a person and a partnership, or between two partnerships, if both of the following tests are met. Free federal tax preparation More than 50% of the capital or profits interest in the partnership(s) is directly or indirectly owned by the same person(s). Free federal tax preparation The property in the hands of the transferee immediately after the transfer is not a capital asset. Free federal tax preparation Property that is not a capital asset includes accounts receivable, inventory, stock-in-trade, and depreciable or real property used in a trade or business. Free federal tax preparation More than 50% ownership. Free federal tax preparation   To determine if there is more than 50% ownership in partnership capital or profits, the following rules apply. Free federal tax preparation An interest directly or indirectly owned by, or for, a corporation, partnership, estate, or trust is considered to be owned proportionately by, or for, its shareholders, partners, or beneficiaries. Free federal tax preparation An individual is considered to own the interest directly or indirectly owned by, or for, the individual's family. Free federal tax preparation For this rule, “family” includes only brothers, sisters, half-brothers, half-sisters, spouses, ancestors, and lineal descendants. Free federal tax preparation If a person is considered to own an interest using rule (1), that person (the “constructive owner”) is treated as if actually owning that interest when rules (1) and (2) are applied. Free federal tax preparation However, if a person is considered to own an interest using rule (2), that person is not treated as actually owning that interest in reapplying rule (2) to make another person the constructive owner. Free federal tax preparation Example. Free federal tax preparation Individuals A and B and Trust T are equal partners in Partnership ABT. Free federal tax preparation A's husband, AH, is the sole beneficiary of Trust T. Free federal tax preparation Trust T's partnership interest will be attributed to AH only for the purpose of further attributing the interest to A. Free federal tax preparation As a result, A is a more-than-50% partner. Free federal tax preparation This means that any deduction for losses on transactions between her and ABT will not be allowed, and gain from property that in the hands of the transferee is not a capital asset is treated as ordinary, rather than capital, gain. Free federal tax preparation More information. Free federal tax preparation   For more information on these special rules, see Sales and Exchanges Between Related Persons in chapter 2 of Publication 544. Free federal tax preparation Contribution of Property Usually, neither the partner nor the partnership recognizes a gain or loss when property is contributed to the partnership in exchange for a partnership interest. Free federal tax preparation This applies whether a partnership is being formed or is already operating. Free federal tax preparation The partnership's holding period for the property includes the partner's holding period. Free federal tax preparation The contribution of limited partnership interests in one partnership for limited partnership interests in another partnership qualifies as a tax-free contribution of property to the second partnership if the transaction is made for business purposes. Free federal tax preparation The exchange is not subject to the rules explained later under Disposition of Partner's Interest. Free federal tax preparation Disguised sales. Free federal tax preparation   A contribution of money or other property to the partnership followed by a distribution of different property from the partnership to the partner is treated not as a contribution and distribution, but as a sale of property, if both of the following tests are met. Free federal tax preparation The distribution would not have been made but for the contribution. Free federal tax preparation The partner's right to the distribution does not depend on the success of partnership operations. Free federal tax preparation   All facts and circumstances are considered in determining if the contribution and distribution are more properly characterized as a sale. Free federal tax preparation However, if the contribution and distribution occur within 2 years of each other, the transfers are presumed to be a sale unless the facts clearly indicate that the transfers are not a sale. Free federal tax preparation If the contribution and distribution occur more than 2 years apart, the transfers are presumed not to be a sale unless the facts clearly indicate that the transfers are a sale. Free federal tax preparation Form 8275 required. Free federal tax preparation   A partner must attach Form 8275, Disclosure Statement, (or other statement) to his or her return if the partner contributes property to a partnership and, within 2 years (before or after the contribution), the partnership transfers money or other consideration to the partner. Free federal tax preparation For exceptions to this requirement, see section 1. Free federal tax preparation 707-3(c)(2) of the regulations. Free federal tax preparation   A partnership must attach Form 8275 (or other statement) to its return if it distributes property to a partner, and, within 2 years (before or after the distribution), the partner transfers money or other consideration to the partnership. Free federal tax preparation   Form 8275 must include the following information. Free federal tax preparation A caption identifying the statement as a disclosure under section 707 of the Internal Revenue Code. Free federal tax preparation A description of the transferred property or money, including its value. Free federal tax preparation A description of any relevant facts in determining if the transfers are properly viewed as a disguised sale. Free federal tax preparation See section 1. Free federal tax preparation 707-3(b)(2) of the regulations for a description of the facts and circumstances considered in determining if the transfers are a disguised sale. Free federal tax preparation Contribution to partnership treated as investment company. Free federal tax preparation   Gain is recognized when property is contributed (in exchange for an interest in the partnership) to a partnership that would be treated as an investment company if it were incorporated. Free federal tax preparation   A partnership is generally treated as an investment company if over 80% of the value of its assets is held for investment and consists of certain readily marketable items. Free federal tax preparation These items include money, stocks and other equity interests in a corporation, and interests in regulated investment companies and real estate investment trusts. Free federal tax preparation For more information, see section 351(e)(1) of the Internal Revenue Code and the related regulations. Free federal tax preparation Whether a partnership is treated as an investment company under this test is ordinarily determined immediately after the transfer of property. Free federal tax preparation   This rule applies to limited partnerships and general partnerships, regardless of whether they are privately formed or publicly syndicated. Free federal tax preparation Contribution to foreign partnership. Free federal tax preparation   A domestic partnership that contributed property after August 5, 1997, to a foreign partnership in exchange for a partnership interest may have to file Form 8865 if either of the following apply. Free federal tax preparation Immediately after the contribution, the partnership owned, directly or indirectly, at least a 10% interest in the foreign partnership. Free federal tax preparation The fair market value of the property contributed to the foreign partnership, when added to other contributions of property made to the partnership during the preceding 12-month period, is greater than $100,000. Free federal tax preparation   The partnership may also have to file Form 8865, even if no contributions are made during the tax year, if it owns a 10% or more interest in a foreign partnership at any time during the year. Free federal tax preparation See the form instructions for more information. Free federal tax preparation Basis of contributed property. Free federal tax preparation   If a partner contributes property to a partnership, the partnership's basis for determining depreciation, depletion, gain, or loss for the property is the same as the partner's adjusted basis for the property when it was contributed, increased by any gain recognized by the partner at the time of contribution. Free federal tax preparation Allocations to account for built-in gain or loss. Free federal tax preparation   The fair market value of property at the time it is contributed may be different from the partner's adjusted basis. Free federal tax preparation The partnership must allocate among the partners any income, deduction, gain, or loss on the property in a manner that will account for the difference. Free federal tax preparation This rule also applies to contributions of accounts payable and other accrued but unpaid items of a cash basis partner. Free federal tax preparation   The partnership can use different allocation methods for different items of contributed property. Free federal tax preparation A single reasonable method must be consistently applied to each item, and the overall method or combination of methods must be reasonable. Free federal tax preparation See section 1. Free federal tax preparation 704-3 of the regulations for allocation methods generally considered reasonable. Free federal tax preparation   If the partnership sells contributed property and recognizes gain or loss, built-in gain or loss is allocated to the contributing partner. Free federal tax preparation If contributed property is subject to depreciation or other cost recovery, the allocation of deductions for these items takes into account built-in gain or loss on the property. Free federal tax preparation However, the total depreciation, depletion, gain, or loss allocated to partners cannot be more than the depreciation or depletion allowable to the partnership or the gain or loss realized by the partnership. Free federal tax preparation Example. Free federal tax preparation Areta and Sofia formed an equal partnership. Free federal tax preparation Areta contributed $10,000 in cash to the partnership and Sofia contributed depreciable property with a fair market value of $10,000 and an adjusted basis of $4,000. Free federal tax preparation The partnership's basis for depreciation is limited to the adjusted basis of the property in Sofia's hands, $4,000. Free federal tax preparation In effect, Areta purchased an undivided one-half interest in the depreciable property with her contribution of $10,000. Free federal tax preparation Assuming that the depreciation rate is 10% a year under the General Depreciation System (GDS), she would have been entitled to a depreciation deduction of $500 per year, based on her interest in the partnership, if the adjusted basis of the property equaled its fair market value when contributed. Free federal tax preparation To simplify this example, the depreciation deductions are determined without regard to any first-year depreciation conventions. Free federal tax preparation However, since the partnership is allowed only $400 per year of depreciation (10% of $4,000), no more than $400 can be allocated between the partners. Free federal tax preparation The entire $400 must be allocated to Areta. Free federal tax preparation Distribution of contributed property to another partner. Free federal tax preparation   If a partner contributes property to a partnership and the partnership distributes the property to another partner within 7 years of the contribution, the contributing partner must recognize gain or loss on the distribution. Free federal tax preparation   The recognized gain or loss is the amount the contributing partner would have recognized if the property had been sold for its fair market value when it was distributed. Free federal tax preparation This amount is the difference between the property's basis and its fair market value at the time of contribution. Free federal tax preparation The character of the gain or loss will be the same as the character of the gain or loss that would have resulted if the partnership had sold the property to the distributee partner. Free federal tax preparation Appropriate adjustments must be made to the adjusted basis of the contributing partner's partnership interest and to the adjusted basis of the property distributed to reflect the recognized gain or loss. Free federal tax preparation Disposition of certain contributed property. Free federal tax preparation   The following rules determine the character of the partnership's gain or loss on a disposition of certain types of contributed property. Free federal tax preparation Unrealized receivables. Free federal tax preparation If the property was an unrealized receivable in the hands of the contributing partner, any gain or loss on its disposition by the partnership is ordinary income or loss. Free federal tax preparation Unrealized receivables are defined later under Payments for Unrealized Receivables and Inventory Items. Free federal tax preparation When reading the definition, substitute “partner” for “partnership. Free federal tax preparation ” Inventory items. Free federal tax preparation If the property was an inventory item in the hands of the contributing partner, any gain or loss on its disposition by the partnership within 5 years after the contribution is ordinary income or loss. Free federal tax preparation Inventory items are defined later in Payments for Unrealized Receivables and Inventory Items. Free federal tax preparation Capital loss property. Free federal tax preparation If the property was a capital asset in the contributing partner's hands, any loss on its disposition by the partnership within 5 years after the contribution is a capital loss. Free federal tax preparation The capital loss is limited to the amount by which the partner's adjusted basis for the property exceeded the property's fair market value immediately before the contribution. Free federal tax preparation Substituted basis property. Free federal tax preparation If the disposition of any of the property listed in (1), (2), or (3) is a nonrecognition transaction, these rules apply when the recipient of the property disposes of any substituted basis property (other than certain corporate stock) resulting from the transaction. Free federal tax preparation Contribution of Services A partner can acquire an interest in partnership capital or profits as compensation for services performed or to be performed. Free federal tax preparation Capital interest. Free federal tax preparation   A capital interest is an interest that would give the holder a share of the proceeds if the partnership's assets were sold at fair market value and the proceeds were distributed in a complete liquidation of the partnership. Free federal tax preparation This determination generally is made at the time of receipt of the partnership interest. Free federal tax preparation The fair market value of such an interest received by a partner as compensation for services must generally be included in the partner's gross income in the first tax year in which the partner can transfer the interest or the interest is not subject to a substantial risk of forfeiture. Free federal tax preparation The capital interest transferred as compensation for services is subject to the rules for restricted property discussed in Publication 525 under Employee Compensation. Free federal tax preparation   The fair market value of an interest in partnership capital transferred to a partner as payment for services to the partnership is a guaranteed payment, discussed earlier. Free federal tax preparation Profits interest. Free federal tax preparation   A profits interest is a partnership interest other than a capital interest. Free federal tax preparation If a person receives a profits interest for providing services to, or for the benefit of, a partnership in a partner capacity or in anticipation of being a partner, the receipt of such an interest is not a taxable event for the partner or the partnership. Free federal tax preparation However, this does not apply in the following situations. Free federal tax preparation The profits interest relates to a substantially certain and predictable stream of income from partnership assets, such as income from high-quality debt securities or a high-quality net lease. Free federal tax preparation Within 2 years of receipt, the partner disposes of the profits interest. Free federal tax preparation The profits interest is a limited partnership interest in a publicly traded partnership. Free federal tax preparation   A profits interest transferred as compensation for services is not subject to the rules for restricted property that apply to capital interests. Free federal tax preparation Basis of Partner's Interest The basis of a partnership interest is the money plus the adjusted basis of any property the partner contributed. Free federal tax preparation If the partner must recognize gain as a result of the contribution, this gain is included in the basis of his or her interest. Free federal tax preparation Any increase in a partner's individual liabilities because of an assumption of partnership liabilities is considered a contribution of money to the partnership by the partner. Free federal tax preparation Interest acquired by gift, etc. Free federal tax preparation   If a partner acquires an interest in a partnership by gift, inheritance, or under any circumstance other than by a contribution of money or property to the partnership, the partner's basis must be determined using the basis rules described in Publication 551. Free federal tax preparation Adjusted Basis There is a worksheet for adjusting the basis of a partner's interest in the partnership in the Partner's Instructions for Schedule K-1 (Form 1065). Free federal tax preparation The basis of an interest in a partnership is increased or decreased by certain items. Free federal tax preparation Increases. Free federal tax preparation   A partner's basis is increased by the following items. Free federal tax preparation The partner's additional contributions to the partnership, including an increased share of, or assumption of, partnership liabilities. Free federal tax preparation The partner's distributive share of taxable and nontaxable partnership income. Free federal tax preparation The partner's distributive share of the excess of the deductions for depletion over the basis of the depletable property, unless the property is oil or gas wells whose basis has been allocated to partners. Free federal tax preparation Decreases. Free federal tax preparation   The partner's basis is decreased (but never below zero) by the following items. Free federal tax preparation The money (including a decreased share of partnership liabilities or an assumption of the partner's individual liabilities by the partnership) and adjusted basis of property distributed to the partner by the partnership. Free federal tax preparation The partner's distributive share of the partnership losses (including capital losses). Free federal tax preparation The partner's distributive share of nondeductible partnership expenses that are not capital expenditures. Free federal tax preparation This includes the partner's share of any section 179 expenses, even if the partner cannot deduct the entire amount on his or her individual income tax return. Free federal tax preparation The partner's deduction for depletion for any partnership oil and gas wells, up to the proportionate share of the adjusted basis of the wells allocated to the partner. Free federal tax preparation Partner's liabilities assumed by partnership. Free federal tax preparation   If contributed property is subject to a debt or if a partner's liabilities are assumed by the partnership, the basis of that partner's interest is reduced (but not below zero) by the liability assumed by the other partners. Free federal tax preparation This partner must reduce his or her basis because the assumption of the liability is treated as a distribution of money to that partner. Free federal tax preparation The other partners' assumption of the liability is treated as a contribution by them of money to the partnership. Free federal tax preparation See Effect of Partnership Liabilities , later. Free federal tax preparation Example 1. Free federal tax preparation Ivan acquired a 20% interest in a partnership by contributing property that had an adjusted basis to him of $8,000 and a $4,000 mortgage. Free federal tax preparation The partnership assumed payment of the mortgage. Free federal tax preparation The basis of Ivan's interest is: Adjusted basis of contributed property $8,000 Minus: Part of mortgage assumed by other partners (80% × $4,000) 3,200 Basis of Ivan's partnership interest $4,800 Example 2. Free federal tax preparation If, in Example 1, the contributed property had a $12,000 mortgage, the basis of Ivan's partnership interest would be zero. Free federal tax preparation The $1,600 difference between the mortgage assumed by the other partners, $9,600 (80% × $12,000), and his basis of $8,000 would be treated as capital gain from the sale or exchange of a partnership interest. Free federal tax preparation However, this gain would not increase the basis of his partnership interest. Free federal tax preparation Book value of partner's interest. Free federal tax preparation   The adjusted basis of a partner's interest is determined without considering any amount shown in the partnership books as a capital, equity, or similar account. Free federal tax preparation Example. Free federal tax preparation Enzo contributes to his partnership property that has an adjusted basis of $400 and a fair market value of $1,000. Free federal tax preparation His partner contributes $1,000 cash. Free federal tax preparation While each partner has increased his capital account by $1,000, which will be re