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

1. Get Answers

Your online questions are customized to your unique tax situation.

2. Maximize your Refund

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

3. E-File for FREE

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

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

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

Free Turbo Tax 2012

Ez Tax Form 2011Www Myfreetaxes Com Springfieldmo2012 Amended Tax FormVita Free Tax HelpH&r Block Online Tax Return1040x Form 2013How Do I File A 2010 Tax ReturnHow To Fill Out A 1040xFree Website For Filing State TaxesIrs Gov Form 1040ezPrintable 1040ez PdfIrs Gov Freefile1040 Ez FileFiling An Amended Tax Return 2013Free 2011 Tax FormsFreetaxusa ComE-file Prior Year Tax ReturnIrs Tax Forms For 2010H&r Block Tax OnlineAmended Tax ReturnFiling State Taxes FreeFederal Tax Form 1040ezPrintable 1040ez Tax FormAmended Tax Return Form1040 Ez Tax Form 2011File 2009 Tax Return Online FreeFiling An Amended Tax Return 2012Free H&r Block MilitaryAmend Tax Return 2013State Tax Forms To Print OutIrs E File2012 Tax Form 1040ezIrs Gov Form 1040File 2010 Tax ReturnTurbotax Login 2010Irs Gov Forms Form 1040x1040ez 2010 Tax FormCan I Efile My 2011 TaxesHow Do I File 2011 Taxes NowTaxact 2010 Return

Free Turbo Tax 2012

Free turbo tax 2012 Publication 972 - Main Content Table of Contents Child Tax CreditQualifying Child Limits on the Credit Claiming the Credit Earned Income Additional Child Tax Credit How To Get Tax HelpLow Income Taxpayer Clinics Child Tax Credit This credit is for people who have a qualifying child as defined later. Free turbo tax 2012 It is in addition to the credit for child and dependent care expenses (on Form 1040, line 48; Form 1040A, line 29; or Form 1040NR, line 46) and the earned income credit (on Form 1040, line 64a; or Form 1040A, line 38a). Free turbo tax 2012 The maximum amount you can claim for the credit is $1,000 for each qualifying child. Free turbo tax 2012 Qualifying Child A qualifying child for purposes of the child tax credit is a child who: Is your son, daughter, stepchild, foster child, brother, sister, stepbrother, stepsister, or a descendant of any of them (for example, your grandchild, niece, or nephew), Was under age 17 at the end of 2013, Did not provide over half of his or her own support for 2013, Lived with you for more than half of 2013 (see Exceptions to time lived with you , later), Is claimed as a dependent on your return, Does not file a joint return for the year (or files it only as a claim for refund), and Was a U. Free turbo tax 2012 S. Free turbo tax 2012 citizen, a U. Free turbo tax 2012 S. Free turbo tax 2012 national, or a U. Free turbo tax 2012 S. Free turbo tax 2012 resident alien. Free turbo tax 2012 For more information, see Publication 519, U. Free turbo tax 2012 S. Free turbo tax 2012 Tax Guide for Aliens. Free turbo tax 2012 If the child was adopted, see Adopted child , later. Free turbo tax 2012 For each qualifying child, you must either check the box on Form 1040 or Form 1040A, line 6c, column (4); or Form 1040NR, line 7c, column (4). Free turbo tax 2012 Example. Free turbo tax 2012 Your 10-year-old nephew lives in Mexico and qualifies as your dependent. Free turbo tax 2012 Because he is not a U. Free turbo tax 2012 S. Free turbo tax 2012 citizen, U. Free turbo tax 2012 S. Free turbo tax 2012 national, or U. Free turbo tax 2012 S. Free turbo tax 2012 resident alien, he is not a qualifying child for the child tax credit. Free turbo tax 2012 Filers who have certain child dependents with an IRS Individual Taxpayer Identification Number (ITIN). Free turbo tax 2012   If you are claiming a child tax credit or additional child tax credit for a child identified on your tax return with an ITIN, you must complete Part I of Schedule 8812 (Form 1040A or 1040). Free turbo tax 2012   Although a child may be your dependent, you may only claim a child tax credit or additional child tax credit for a dependent who is a citizen, national, or resident of the United States. Free turbo tax 2012 To be treated as a resident of the United States, a child generally will need to meet the requirements of the substantial presence test. Free turbo tax 2012 For more information about the substantial presence test, see Publication 519, U. Free turbo tax 2012 S. Free turbo tax 2012 Tax Guide for Aliens. Free turbo tax 2012 Adopted child. Free turbo tax 2012   An adopted child is always treated as your own child. Free turbo tax 2012 An adopted child includes a child lawfully placed with you for legal adoption. Free turbo tax 2012   If you are a U. Free turbo tax 2012 S. Free turbo tax 2012 citizen or U. Free turbo tax 2012 S. Free turbo tax 2012 national and your adopted child lived with you all year as a member of your household in 2013, that child meets condition (7) above to be a qualifying child for the child tax credit. Free turbo tax 2012 Exceptions to time lived with you. Free turbo tax 2012    A child is considered to have lived with you for more than half of 2013 if the child was born or died in 2013 and your home was this child's home for more than half the time he or she was alive. Free turbo tax 2012 Temporary absences by you or the child for special circumstances, such as school, vacation, business, medical care, military service, or detention in a juvenile facility, count as time the child lived with you. Free turbo tax 2012   There are also exceptions for kidnapped children and children of divorced or separated parents. Free turbo tax 2012 For details, see the instructions for line 6c in either the Form 1040 or Form 1040A instructions. Free turbo tax 2012 Qualifying child of more than one person. Free turbo tax 2012   A special rule applies if your qualifying child is the qualifying child of more than one person. Free turbo tax 2012 For details, see the instructions for line 6c in either the Form 1040 or Form 1040A instructions. Free turbo tax 2012 Limits on the Credit You must reduce your child tax credit if either (1) or (2) applies. Free turbo tax 2012 The amount on Form 1040, line 46; Form 1040A, line 28; or Form 1040NR, line 44, is less than the credit. Free turbo tax 2012 If this amount is zero, you cannot take this credit because there is no tax to reduce. Free turbo tax 2012 But you may be able to take the additional child tax credit. Free turbo tax 2012 See Additional Child Tax Credit, later. Free turbo tax 2012 Your modified adjusted gross income (AGI) is more than the amount shown below for your filing status. Free turbo tax 2012 Married filing jointly – $110,000. Free turbo tax 2012 Single, head of household, or qualifying widow(er) – $75,000. Free turbo tax 2012 Married filing separately – $55,000. Free turbo tax 2012 Modified AGI. Free turbo tax 2012   For purposes of the child tax credit, your modified AGI is your AGI plus the following amounts that may apply to you. Free turbo tax 2012 Any amount excluded from income because of the exclusion of income from Puerto Rico. Free turbo tax 2012 On the dotted line next to Form 1040, line 38, enter the amount excluded and identify it as “EPRI. Free turbo tax 2012 ” Also attach a copy of any Form(s) 499R-2/W-2PR to your return. Free turbo tax 2012 Any amount on line 45 or line 50 of Form 2555, Foreign Earned Income. Free turbo tax 2012 Any amount on line 18 of Form 2555-EZ, Foreign Earned Income Exclusion. Free turbo tax 2012 Any amount on line 15 of Form 4563, Exclusion of Income for Bona Fide Residents of American Samoa. Free turbo tax 2012   If you do not have any of the above, your modified AGI is the same as your AGI. Free turbo tax 2012 AGI. Free turbo tax 2012   Your AGI is the amount on Form 1040, line 38; Form 1040A, line 22; or Form 1040NR, line 37. Free turbo tax 2012 Claiming the Credit To claim the child tax credit, you must file Form 1040, Form 1040A, or Form 1040NR. Free turbo tax 2012 You cannot claim the child tax credit on Form 1040EZ or Form 1040NR-EZ. Free turbo tax 2012 You must provide the name and identification number (usually a social security number) on your tax return for each qualifying child. Free turbo tax 2012 Earned Income You will need to figure your earned income using one of the worksheets that appear later in this publication if you are completing the Line 11 Worksheet , later, or Schedule 8812. Free turbo tax 2012 Form 1040 or Form 1040NR filers, use the 1040 and 1040NR Filers — Earned Income Worksheet , later, to figure your earned income. Free turbo tax 2012 Form 1040A filers, use the 1040A Filers —- Earned Income Worksheet , later. Free turbo tax 2012 For this purpose, earned income includes only: Taxable earned income, and Nontaxable combat pay. Free turbo tax 2012 Additional Child Tax Credit This credit is for certain individuals who get less than the full amount of the child tax credit. Free turbo tax 2012 The additional child tax credit may give you a refund even if you do not owe any tax. Free turbo tax 2012 How to claim the additional child tax credit. Free turbo tax 2012   To claim the additional child tax credit, follow the steps below. Free turbo tax 2012 Make sure you figured the amount, if any, of your child tax credit. Free turbo tax 2012 If you answered “Yes” on line 9 or line 10 of the Child Tax Credit Worksheet in the Form 1040, Form 1040A, or Form 1040NR instructions (or on line 13 of the Child Tax Credit Worksheet in this publication), use Parts II through IV of Schedule 8812 to see if you can take the additional child tax credit. Free turbo tax 2012 If you have an additional child tax credit on line 13 of Schedule 8812, carry it to Form 1040, line 65; Form 1040A, line 39; or Form 1040NR, line 63. Free turbo tax 2012 Child Tax Credit Worksheet This image is too large to be displayed in the current screen. Free turbo tax 2012 Please click the link to view the image. Free turbo tax 2012 Child tax worksheet - page 1. Free turbo tax 2012 Child Tax Credit Worksheet—Continued This image is too large to be displayed in the current screen. Free turbo tax 2012 Please click the link to view the image. Free turbo tax 2012 Child tax worksheet - page 2. Free turbo tax 2012 Line 11 Worksheet This image is too large to be displayed in the current screen. Free turbo tax 2012 Please click the link to view the image. Free turbo tax 2012 Line 11 worksheet - page 1. Free turbo tax 2012 Line 11 Worksheet—Continued This image is too large to be displayed in the current screen. Free turbo tax 2012 Please click the link to view the image. Free turbo tax 2012 Line 11 worksheet - page 2. Free turbo tax 2012 1040 and 1040NR Filers — Earned Income Worksheet (for line 2 of the Line 11 Worksheet or line 4a of Schedule 8812, Child Tax Credit) Before you begin:    ✓Use this worksheet only if you were sent here from the Line 11 Worksheet earlier in this publication or line  4a of Schedule 8812, Child Tax Credit. Free turbo tax 2012  ✓Disregard community property laws when figuring the amounts to enter on this worksheet. Free turbo tax 2012  ✓If married filing jointly, include your spouse's amounts with yours when completing this worksheet. Free turbo tax 2012     1. Free turbo tax 2012 a. Free turbo tax 2012 Enter the amount from Form 1040, line 7, or Form 1040NR, line 8 1a. Free turbo tax 2012     b. Free turbo tax 2012 Enter the amount of any nontaxable combat pay received. Free turbo tax 2012 Also enter this amount on Schedule 8812, line 4b. Free turbo tax 2012 This amount should be shown in Form(s) W-2, box 12, with code Q. Free turbo tax 2012 1b. Free turbo tax 2012       Next, if you are filing Schedule C, C-EZ, F, or SE, or you received a Schedule K-1 (Form 1065 or Form 1065-B), go to line 2a. Free turbo tax 2012 Otherwise, skip lines 2a through 2e and go to line 3. Free turbo tax 2012     2. Free turbo tax 2012 a. Free turbo tax 2012 Enter any statutory employee income reported on line 1 of Schedule C or C-EZ 2a. Free turbo tax 2012     b. Free turbo tax 2012 Enter any net profit or (loss) from Schedule C, line 31; Schedule C-EZ, line 3; Schedule K-1 (Form 1065), box 14, code A (other than farming); and Schedule K-1 (Form 1065-B), box 9, code J1. Free turbo tax 2012 * Reduce any Schedule K-1 amounts as described in the instructions for completing Schedule SE in the Partner's Instructions for Schedule K-1. Free turbo tax 2012 Do not include on this line any statutory employee income or any other amounts exempt from self-employment tax. Free turbo tax 2012 Options and commodities dealers must add any gain or subtract any loss (in the normal course of dealing in or trading section 1256 contracts) from section 1256 contracts or related property 2b. Free turbo tax 2012     c. Free turbo tax 2012 Enter any net farm profit or (loss) from Schedule F, line 34, and from farm partnerships, Schedule K-1 (Form 1065), box 14, code A. Free turbo tax 2012 * Reduce any Schedule K-1 amounts as described in the instructions for completing Schedule SE in the Partner's Instructions for Schedule K-1. Free turbo tax 2012 Do not include on this line any amounts exempt from self-employment tax 2c. Free turbo tax 2012         d. Free turbo tax 2012 If you used the farm optional method to figure net earnings from self-employment, enter the amount from Schedule SE, Section B, line 15. Free turbo tax 2012 Otherwise, skip this line and enter on line 2e the amount from line 2c 2d. Free turbo tax 2012         e. Free turbo tax 2012 If line 2c is a profit, enter the smaller of line 2c or line 2d. Free turbo tax 2012 If line 2c is a (loss), enter the (loss) from line 2c. Free turbo tax 2012 2e. Free turbo tax 2012   3. Free turbo tax 2012 Combine lines 1a, 1b, 2a, 2b, and 2e. Free turbo tax 2012 If zero or less, stop. Free turbo tax 2012 Do not complete the rest of this worksheet. Free turbo tax 2012 Instead, enter -0- on line 2 of the Line 11 Worksheet or line 4a of Schedule 8812, whichever applies 3. Free turbo tax 2012   4. Free turbo tax 2012 Enter any amount included on line 1a that is:               a. Free turbo tax 2012 A scholarship or fellowship grant not reported on Form W-2 4a. Free turbo tax 2012         b. Free turbo tax 2012 For work done while an inmate in a penal institution (enter “PRI” and this amount on the dotted line next to line 7 of Form 1040 or line 8 of Form 1040NR) 4b. Free turbo tax 2012         c. Free turbo tax 2012 A pension or annuity from a nonqualified deferred compensation plan or a nongovernmental section 457 plan (enter “DFC” and this amount on the dotted line next to line 7 of Form 1040 or line 8 of Form 1040NR). Free turbo tax 2012 This amount may be shown in box 11 of your Form W-2. Free turbo tax 2012 If you received such an amount but box 11 is blank, contact your employer for the amount received as a pension or annuity. Free turbo tax 2012 4c. Free turbo tax 2012       5. Free turbo tax 2012 a. Free turbo tax 2012 Enter any amount included on line 3 that is also included on Form 2555, line 43, or Form 2555-EZ, line 18. Free turbo tax 2012 Do not include any amount that is also included on line 4a, 4b, or 4c above 5a. Free turbo tax 2012             b. Free turbo tax 2012 Enter the portion, if any, of the amount from Form 2555, line 44 that you also included on Schedule E in partnership net income or (loss) or deducted on Form 1040, line 27, or Form 1040NR, line 27; Schedule C; Schedule C-EZ; or Schedule F. Free turbo tax 2012 5b. Free turbo tax 2012             c. Free turbo tax 2012 Subtract line 5b from line 5a 5c. Free turbo tax 2012       6. Free turbo tax 2012 Enter the amount from Form 1040, line 27, or Form 1040NR, line 27 6. Free turbo tax 2012       7. Free turbo tax 2012 Add lines 4a through 4c, 5c, and 6 7. Free turbo tax 2012   8. Free turbo tax 2012 Subtract line 7 from line 3 8. Free turbo tax 2012       If you were sent here from the Line 11 Worksheet, enter this amount on line 2 of that worksheet. Free turbo tax 2012 If you were sent here from Schedule 8812, enter this amount on line 4a of that form. Free turbo tax 2012     *If you have any Schedule K-1 amounts and you are not required to file Schedule SE, complete the appropriate line(s) of Schedule SE, Section A. Free turbo tax 2012 Put your name and social security number on Schedule SE and attach it to your return. Free turbo tax 2012                     1040A Filers — Earned Income Worksheet (for line 2 of the Line 11 Worksheet) Before you begin:   ✓Use this worksheet only if you were sent here from the Line 11 Worksheet earlier in this publication. Free turbo tax 2012  ✓Disregard community property laws when figuring the amounts to enter on this worksheet. Free turbo tax 2012               1. Free turbo tax 2012 a. Free turbo tax 2012 Enter the amount from Form 1040A, line 7 1a. Free turbo tax 2012         b. Free turbo tax 2012 Enter the amount of any nontaxable combat pay received. Free turbo tax 2012 Also enter this amount on Schedule 8812, line 4b. Free turbo tax 2012 This amount should be shown in Form(s) W-2, box 12, with code Q. Free turbo tax 2012 1b. Free turbo tax 2012         c. Free turbo tax 2012 Add lines 1a and 1b. Free turbo tax 2012     1c. Free turbo tax 2012   2. Free turbo tax 2012 Enter any amount included on line 1a that is:           a. Free turbo tax 2012 A scholarship or fellowship grant not reported on Form W-2 2a. Free turbo tax 2012         b. Free turbo tax 2012 For work done while an inmate in a penal institution (enter “PRI” and this amount next to line 7 of Form 1040A) 2b. Free turbo tax 2012         c. Free turbo tax 2012 A pension or annuity from a nonqualified deferred compensation plan or a nongovernmental section 457 plan (enter “DFC” and this amount next to line 7 of Form 1040A). Free turbo tax 2012 This amount may be shown in box 11 of your Form W-2. Free turbo tax 2012 If you received such an amount but box 11 is blank, contact your employer for the amount received as a pension or annuity 2c. Free turbo tax 2012       3. Free turbo tax 2012 Add lines 2a through 2c 3. Free turbo tax 2012   4. Free turbo tax 2012 Subtract line 3 from line 1c. Free turbo tax 2012 Enter the result here and on line 2 of the Line 11 Worksheet 4. Free turbo tax 2012                 Additional Medicare Tax and RRTA Tax Worksheet (for line 6 of the Line 11 Worksheet) If your employer withheld or you paid Additional Medicare Tax or Tier 1 RRTA taxes, use this worksheet to figure the amount to enter on line 6 of the Line 11 Worksheet. Free turbo tax 2012 Social security tax, Medicare tax, and Additional Medicare Tax on wages. Free turbo tax 2012 1. Free turbo tax 2012 Enter the social security tax withheld (Form(s) W-2, box 4) 1. Free turbo tax 2012   2. Free turbo tax 2012 Enter the Medicare tax withheld (Form(s) W-2, box 6). Free turbo tax 2012 Box 6 includes any Additional Medicare Tax 2. Free turbo tax 2012   3. Free turbo tax 2012 Enter the Additional Medicare Tax, if any, on wages (Form 8959, line 7) 3. Free turbo tax 2012   4. Free turbo tax 2012 Add lines 1, 2, and 3 4. Free turbo tax 2012   5. Free turbo tax 2012 Enter the Additional Medicare Tax withheld (Form 8959, line 22) 5. Free turbo tax 2012   6. Free turbo tax 2012 Subtract line 5 from line 4 6. Free turbo tax 2012   Additional Medicare Tax on Self-Employment Income. Free turbo tax 2012 7. Free turbo tax 2012 Enter one-half of the Additional Medicare Tax, if any, on self-employment income (one-half of Form 8959, line 13) 7. Free turbo tax 2012   Tier 1 RRTA taxes as an employee of a railroad (enter amounts on lines 8, 9, 10, and 11) or employee representative (enter amounts on lines 12, 13, 14, and 15). Free turbo tax 2012 Do not include amounts in Form W-2, box 14, that are identified as Additional Medicare Tax or Tier 2 tax. Free turbo tax 2012 Do not include amounts shown on Form CT-2 on line 3 for Additional Medicare Tax or line 4 for Tier 2 tax. Free turbo tax 2012 8. Free turbo tax 2012 Enter the Tier 1 tax (Form(s) W-2, box 14) 8. Free turbo tax 2012   9. Free turbo tax 2012 Enter the Medicare tax (Form(s) W-2, box 14) 9. Free turbo tax 2012   10. Free turbo tax 2012 Enter the Additional Medicare Tax, if any, on RRTA compensation as an employee (Form 8959, line 17). Free turbo tax 2012 Do not use the same amount from Form 8959, line 17, for both this line and line 14 10. Free turbo tax 2012   11. Free turbo tax 2012 Add lines 8, 9, and 10 11. Free turbo tax 2012   12. Free turbo tax 2012 Enter one-half of Tier 1 tax (one-half of Form(s) CT-2, line 1, for all 4 quarters of 2013) 12. Free turbo tax 2012   13. Free turbo tax 2012 Enter one-half of Tier 1 Medicare tax (one-half of Form(s) CT-2, line 2, for all 4 quarters of 2013) 13. Free turbo tax 2012   14. Free turbo tax 2012 Enter one-half of the Additional Medicare Tax, if any, on RRTA compensation as an employee representative (one-half of Form 8959, line 17). Free turbo tax 2012 Do not use the same amount from Form 8959, line 17, for both this line and line 10 14. Free turbo tax 2012   15. Free turbo tax 2012 Add lines 12, 13, and 14 15. Free turbo tax 2012   Line 6 amount 16. Free turbo tax 2012 Add lines 6, 7, 11, and 15. Free turbo tax 2012 Enter here and on line 6 of the Line 11 Worksheet. Free turbo tax 2012 16. Free turbo tax 2012   Paperwork Reduction Act Notice. Free turbo tax 2012   We ask for the information on the worksheets in this publication to carry out the Internal Revenue laws of the United States. Free turbo tax 2012 You are required to give us the information if requested. Free turbo tax 2012 We need it to ensure that you are complying with these laws and to allow us to figure and collect the right amount of tax. Free turbo tax 2012   You are not required to provide the information requested on a form (or worksheet in this publication) that is subject to the Paperwork Reduction Act unless the form (or publication) displays a valid OMB control number. Free turbo tax 2012 Books or records relating to a form, its instructions, or this publication must be retained as long as their contents may become material in the administration of any Internal Revenue law. Free turbo tax 2012 Generally, tax returns and return information are confidential, as required by section 6103. Free turbo tax 2012   The average time and expenses required to complete these worksheets will vary depending on individual circumstances. Free turbo tax 2012 For the estimated averages, see the instructions for your income tax return. Free turbo tax 2012   If you have suggestions for making these worksheets simpler, we would be happy to hear from you. Free turbo tax 2012 See Comments and suggestions , earlier. Free turbo tax 2012 How To Get Tax Help Whether it's help with a tax issue, preparing your tax return or a need for a free publication or form, get the help you need the way you want it: online, use a smart phone, call or walk in to an IRS office or volunteer site near you. Free turbo tax 2012 Free help with your tax return. Free turbo tax 2012   You can get free help preparing your return nationwide from IRS-certified volunteers. Free turbo tax 2012 The Volunteer Income Tax Assistance (VITA) program helps low-to-moderate income, elderly, people with disabilities, and limited English proficient taxpayers. Free turbo tax 2012 The Tax Counseling for the Elderly (TCE) program helps taxpayers age 60 and older with their tax returns. Free turbo tax 2012 Most VITA and TCE sites offer free electronic filing and all volunteers will let you know about credits and deductions you may be entitled to claim. Free turbo tax 2012 In addition, some VITA and TCE sites provide taxpayers the opportunity to prepare their own return with help from an IRS-certified volunteer. Free turbo tax 2012 To find the nearest VITA or TCE site, you can use the VITA Locator Tool on IRS. Free turbo tax 2012 gov, download the IRS2Go app, or call 1-800-906-9887. Free turbo tax 2012   As part of the TCE program, AARP offers the Tax-Aide counseling program. Free turbo tax 2012 To find the nearest AARP Tax-Aide site, visit AARP's website at www. Free turbo tax 2012 aarp. Free turbo tax 2012 org/money/taxaide or call 1-888-227-7669. Free turbo tax 2012 For more information on these programs, go to IRS. Free turbo tax 2012 gov and enter “VITA” in the search box. Free turbo tax 2012 Internet. Free turbo tax 2012    IRS. Free turbo tax 2012 gov and IRS2Go are ready when you are —24 hours a day, 7 days a week. Free turbo tax 2012 Download the free IRS2Go app from the iTunes app store or from Google Play. Free turbo tax 2012 Use it to check your refund status, order transcripts of your tax returns or tax account, watch the IRS YouTube channel, get IRS news as soon as it's released to the public, subscribe to filing season updates or daily tax tips, and follow the IRS Twitter news feed, @IRSnews, to get the latest federal tax news, including information about tax law changes and important IRS programs. Free turbo tax 2012 Check the status of your 2013 refund with the Where's My Refund? application on IRS. Free turbo tax 2012 gov or download the IRS2Go app and select the Refund Status option. Free turbo tax 2012 The IRS issues more than 9 out of 10 refunds in less than 21 days. Free turbo tax 2012 Using these applications, you can start checking on the status of your return within 24 hours after we receive your e-filed return or 4 weeks after you mail a paper return. Free turbo tax 2012 You will also be given a personalized refund date as soon as the IRS processes your tax return and approves your refund. Free turbo tax 2012 The IRS updates Where's My Refund? every 24 hours, usually overnight, so you only need to check once a day. Free turbo tax 2012 Use the Interactive Tax Assistant (ITA) to research your tax questions. Free turbo tax 2012 No need to wait on the phone or stand in line. Free turbo tax 2012 The ITA is available 24 hours a day, 7 days a week, and provides you with a variety of tax information related to general filing topics, deductions, credits, and income. Free turbo tax 2012 When you reach the response screen, you can print the entire interview and the final response for your records. Free turbo tax 2012 New subject areas are added on a regular basis. Free turbo tax 2012  Answers not provided through ITA may be found in Tax Trails, one of the Tax Topics on IRS. Free turbo tax 2012 gov which contain general individual and business tax information or by searching the IRS Tax Map, which includes an international subject index. Free turbo tax 2012 You can use the IRS Tax Map, to search publications and instructions by topic or keyword. Free turbo tax 2012 The IRS Tax Map integrates forms and publications into one research tool and provides single-point access to tax law information by subject. Free turbo tax 2012 When the user searches the IRS Tax Map, they will be provided with links to related content in existing IRS publications, forms and instructions, questions and answers, and Tax Topics. Free turbo tax 2012 Coming this filing season, you can immediately view and print for free all 5 types of individual federal tax transcripts (tax returns, tax account, record of account, wage and income statement, and certification of non-filing) using Get Transcript. Free turbo tax 2012 You can also ask the IRS to mail a return or an account transcript to you. Free turbo tax 2012 Only the mail option is available by choosing the Tax Records option on the IRS2Go app by selecting Mail Transcript on IRS. Free turbo tax 2012 gov or by calling 1-800-908-9946. Free turbo tax 2012 Tax return and tax account transcripts are generally available for the current year and the past three years. Free turbo tax 2012 Determine if you are eligible for the EITC and estimate the amount of the credit with the Earned Income Tax Credit (EITC) Assistant. Free turbo tax 2012 Visit Understanding Your IRS Notice or Letter to get answers to questions about a notice or letter you received from the IRS. Free turbo tax 2012 If you received the First Time Homebuyer Credit, you can use the First Time Homebuyer Credit Account Look-up tool for information on your repayments and account balance. Free turbo tax 2012 Check the status of your amended return using Where's My Amended Return? Go to IRS. Free turbo tax 2012 gov and enter Where's My Amended Return? in the search box. Free turbo tax 2012 You can generally expect your amended return to be processed up to 12 weeks from the date we receive it. Free turbo tax 2012 It can take up to 3 weeks from the date you mailed it to show up in our system. Free turbo tax 2012 Make a payment using one of several safe and convenient electronic payment options available on IRS. Free turbo tax 2012 gov. Free turbo tax 2012 Select the Payment tab on the front page of IRS. Free turbo tax 2012 gov for more information. Free turbo tax 2012 Determine if you are eligible and apply for an online payment agreement, if you owe more tax than you can pay today. Free turbo tax 2012 Figure your income tax withholding with the IRS Withholding Calculator on IRS. Free turbo tax 2012 gov. Free turbo tax 2012 Use it if you've had too much or too little withheld, your personal situation has changed, you're starting a new job or you just want to see if you're having the right amount withheld. Free turbo tax 2012 Determine if you might be subject to the Alternative Minimum Tax by using the Alternative Minimum Tax Assistant on IRS. Free turbo tax 2012 gov. Free turbo tax 2012 Request an Electronic Filing PIN by going to IRS. Free turbo tax 2012 gov and entering Electronic Filing PIN in the search box. Free turbo tax 2012 Download forms, instructions and publications, including accessible versions for people with disabilities. Free turbo tax 2012 Locate the nearest Taxpayer Assistance Center (TAC) using the Office Locator tool on IRS. Free turbo tax 2012 gov, or choose the Contact Us option on the IRS2Go app and search Local Offices. Free turbo tax 2012 An employee can answer questions about your tax account or help you set up a payment plan. Free turbo tax 2012 Before you visit, check the Office Locator on IRS. Free turbo tax 2012 gov, or Local Offices under Contact Us on IRS2Go to confirm the address, phone number, days and hours of operation, and the services provided. Free turbo tax 2012 If you have a special need, such as a disability, you can request an appointment. Free turbo tax 2012 Call the local number listed in the Office Locator, or look in the phone book under United States Government, Internal Revenue Service. Free turbo tax 2012 Apply for an Employer Identification Number (EIN). Free turbo tax 2012 Go to IRS. Free turbo tax 2012 gov and enter Apply for an EIN in the search box. Free turbo tax 2012 Read the Internal Revenue Code, regulations, or other official guidance. Free turbo tax 2012 Read Internal Revenue Bulletins. Free turbo tax 2012 Sign up to receive local and national tax news and more by email. Free turbo tax 2012 Just click on “subscriptions” above the search box on IRS. Free turbo tax 2012 gov and choose from a variety of options. Free turbo tax 2012    Phone. Free turbo tax 2012 You can call the IRS, or you can carry it in your pocket with the IRS2Go app on your smart phone or tablet. Free turbo tax 2012 Download the free IRS2Go app from the iTunes app store or from Google Play. Free turbo tax 2012 Call to locate the nearest volunteer help site, 1-800-906-9887 or you can use the VITA Locator Tool on IRS. Free turbo tax 2012 gov, or download the IRS2Go app. Free turbo tax 2012 Low-to-moderate income, elderly, people with disabilities, and limited English proficient taxpayers can get free help with their tax return from the nationwide Volunteer Income Tax Assistance (VITA) program. Free turbo tax 2012 The Tax Counseling for the Elderly (TCE) program helps taxpayers age 60 and older with their tax returns. Free turbo tax 2012 Most VITA and TCE sites offer free electronic filing. Free turbo tax 2012 Some VITA and TCE sites provide IRS-certified volunteers who can help prepare your tax return. Free turbo tax 2012 Through the TCE program, AARP offers the Tax-Aide counseling program; call 1-888-227-7669 to find the nearest Tax-Aide location. Free turbo tax 2012 Call the automated Where's My Refund? information hotline to check the status of your 2013 refund 24 hours a day, 7 days a week at 1-800-829-1954. Free turbo tax 2012 If you e-file, you can start checking on the status of your return within 24 hours after the IRS receives your tax return or 4 weeks after you've mailed a paper return. Free turbo tax 2012 The IRS issues more than 9 out of 10 refunds in less than 21 days. Free turbo tax 2012 Where's My Refund? will give you a personalized refund date as soon as the IRS processes your tax return and approves your refund. Free turbo tax 2012 Before you call this automated hotline, have your 2013 tax return handy so you can enter your social security number, your filing status, and the exact whole dollar amount of your refund. Free turbo tax 2012 The IRS updates Where's My Refund? every 24 hours, usually overnight, so you only need to check once a day. Free turbo tax 2012 Note, the above information is for our automated hotline. Free turbo tax 2012 Our live phone and walk-in assistors can research the status of your refund only if it's been 21 days or more since you filed electronically or more than 6 weeks since you mailed your paper return. Free turbo tax 2012 Call the Amended Return Hotline, 1-866-464-2050, to check the status of your amended return. Free turbo tax 2012 You can generally expect your amended return to be processed up to 12 weeks from the date we receive it. Free turbo tax 2012 It can take up to 3 weeks from the date you mailed it to show up in our system. Free turbo tax 2012 Call 1-800-TAX-FORM (1-800-829-3676) to order current-year forms, instructions, publications, and prior-year forms and instructions (limited to 5 years). Free turbo tax 2012 You should receive your order within 10 business days. Free turbo tax 2012 Call TeleTax, 1-800-829-4477, to listen to pre-recorded messages covering general and business tax information. Free turbo tax 2012 If, between January and April 15, you still have questions about the Form 1040, 1040A, or 1040EZ (like filing requirements, dependents, credits, Schedule D, pensions and IRAs or self-employment taxes), call 1-800-829-1040. Free turbo tax 2012 Call using TTY/TDD equipment, 1-800-829-4059 to ask tax questions or order forms and publications. Free turbo tax 2012 The TTY/TDD telephone number is for people who are deaf, hard of hearing, or have a speech disability. Free turbo tax 2012 These individuals can also contact the IRS through relay services such as the Federal Relay Service. Free turbo tax 2012    Walk-in. Free turbo tax 2012 You can find a selection of forms, publications and services — in-person. Free turbo tax 2012 Products. Free turbo tax 2012 You can walk in to some post offices, libraries, and IRS offices to pick up certain forms, instructions, and publications. Free turbo tax 2012 Some IRS offices, libraries, and city and county government offices have a collection of products available to photocopy from reproducible proofs. Free turbo tax 2012 Services. Free turbo tax 2012 You can walk in to your local TAC for face-to-face tax help. Free turbo tax 2012 An employee can answer questions about your tax account or help you set up a payment plan. Free turbo tax 2012 Before visiting, use the Office Locator tool on IRS. Free turbo tax 2012 gov, or choose the Contact Us option on the IRS2Go app and search Local Offices for days and hours of operation, and services provided. Free turbo tax 2012    Mail. Free turbo tax 2012 You can send your order for forms, instructions, and publications to the address below. Free turbo tax 2012 You should receive a response within 10 business days after your request is received. Free turbo tax 2012 Internal Revenue Service 1201 N. Free turbo tax 2012 Mitsubishi Motorway Bloomington, IL 61705-6613    The Taxpayer Advocate Service Is Here to Help You. Free turbo tax 2012 The Taxpayer Advocate Service (TAS) is your voice at the IRS. Free turbo tax 2012 Our job is to ensure that every taxpayer is treated fairly and that you know and understand your rights. Free turbo tax 2012   What can TAS do for you? We can offer you free help with IRS problems that you can't resolve on your own. Free turbo tax 2012 We know this process can be confusing, but the worst thing you can do is nothing at all! TAS can help if you can't resolve your tax problem and: Your problem is causing financial difficulties for you, your family, or your business. Free turbo tax 2012 You face (or your business is facing) an immediate threat of adverse action. Free turbo tax 2012 You've tried repeatedly to contact the IRS but no one has responded, or the IRS hasn't responded by the date promised. Free turbo tax 2012   If you qualify for our help, you'll be assigned to one advocate who'll be with you at every turn and will do everything possible to resolve your problem. Free turbo tax 2012 Here's why we can help: TAS is an independent organization within the IRS. Free turbo tax 2012 Our advocates know how to work with the IRS. Free turbo tax 2012 Our services are free and tailored to meet your needs. Free turbo tax 2012 We have offices in every state, the District of Columbia, and Puerto Rico. Free turbo tax 2012   How can you reach us? If you think TAS can help you, call your local advocate, whose number is in your local directory and at Taxpayer Advocate, or call us toll-free at 1-877-777-4778. Free turbo tax 2012   How else does TAS help taxpayers?  TAS also works to resolve large-scale, systemic problems that affect many taxpayers. Free turbo tax 2012 If you know of one of these broad issues, please report it to us through our Systemic Advocacy Management System. Free turbo tax 2012 Low Income Taxpayer Clinics Low Income Taxpayer Clinics (LITCs) serve individuals whose income is below a certain level and need to resolve tax problems such as audits, appeals and tax collection disputes. Free turbo tax 2012 Some clinics can provide information about taxpayer rights and responsibilities in different languages for individuals who speak English as a second language. Free turbo tax 2012 Visit Taxpayer Advocate or see IRS Publication 4134, Low Income Taxpayer Clinic List. Free turbo tax 2012 Prev  Up  Next   Home   More Online Publications
Español

A-Z Index of Consumer Organizations

  • A
  • B
  • C
  • D
  • E
  • F
  • G
  • H
  • I
  • J
  • K
  • L
  • M
  • N
  • O
  • P
  • Q
  • R
  • S
  • T
  • U
  • V
  • W
  • X-Z

K

The Free Turbo Tax 2012

Free turbo tax 2012 4. Free turbo tax 2012   Interest Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: Allocation of InterestOrder of funds spent. Free turbo tax 2012 Payments from checking accounts. Free turbo tax 2012 Amounts paid within 30 days. Free turbo tax 2012 Optional method for determining date of reallocation. Free turbo tax 2012 Interest on a segregated account. Free turbo tax 2012 How to report. Free turbo tax 2012 Interest You Can DeductStatement. Free turbo tax 2012 Expenses paid to obtain a mortgage. Free turbo tax 2012 Prepayment penalty. Free turbo tax 2012 De minimis OID. Free turbo tax 2012 Constant-yield method. Free turbo tax 2012 Loan or mortgage ends. Free turbo tax 2012 Interest You Cannot DeductPenalties. Free turbo tax 2012 Who is a key person? Exceptions for pre-June 1997 contracts. Free turbo tax 2012 Interest allocated to unborrowed policy cash value. Free turbo tax 2012 Capitalization of Interest When To Deduct InterestPrepaid interest. Free turbo tax 2012 Discounted loan. Free turbo tax 2012 Refunds of interest. Free turbo tax 2012 Prepaid interest. Free turbo tax 2012 Discounted loan. Free turbo tax 2012 Tax deficiency. Free turbo tax 2012 Related person. Free turbo tax 2012 Below-Market LoansLimit on forgone interest for gift loans of $100,000 or less. Free turbo tax 2012 Introduction This chapter discusses the tax treatment of business interest expense. Free turbo tax 2012 Business interest expense is an amount charged for the use of money you borrowed for business activities. Free turbo tax 2012 Topics - This chapter discusses: Allocation of interest Interest you can deduct Interest you cannot deduct Capitalization of interest When to deduct interest Below-market loans Useful Items - You may want to see: Publication 537 Installment Sales 550 Investment Income and Expenses 936 Home Mortgage Interest Deduction Form (and Instructions) Sch A (Form 1040) Itemized Deductions Sch E (Form 1040) Supplemental Income and Loss Sch K-1 (Form 1065) Partner's Share of Income, Deductions, Credits, etc. Free turbo tax 2012 Sch K-1 (Form 1120S) Shareholder's Share of Income, Deductions, Credits, etc. Free turbo tax 2012 1098 Mortgage Interest Statement 3115 Application for Change in Accounting Method 4952 Investment Interest Expense Deduction 8582 Passive Activity Loss Limitations See chapter 12 for information about getting publications and forms. Free turbo tax 2012 Allocation of Interest The rules for deducting interest vary, depending on whether the loan proceeds are used for business, personal, or investment activities. Free turbo tax 2012 If you use the proceeds of a loan for more than one type of expense, you must allocate the interest based on the use of the loan's proceeds. Free turbo tax 2012 Allocate your interest expense to the following categories. Free turbo tax 2012 Nonpassive trade or business activity interest Passive trade or business activity interest Investment interest Portfolio interest Personal interest In general, you allocate interest on a loan the same way you allocate the loan proceeds. Free turbo tax 2012 You allocate loan proceeds by tracing disbursements to specific uses. Free turbo tax 2012 The easiest way to trace disbursements to specific uses is to keep the proceeds of a particular loan separate from any other funds. Free turbo tax 2012 Secured loan. Free turbo tax 2012   The allocation of loan proceeds and the related interest is not generally affected by the use of property that secures the loan. Free turbo tax 2012 Example. Free turbo tax 2012 You secure a loan with property used in your business. Free turbo tax 2012 You use the loan proceeds to buy an automobile for personal use. Free turbo tax 2012 You must allocate interest expense on the loan to personal use (purchase of the automobile) even though the loan is secured by business property. Free turbo tax 2012    If the property that secures the loan is your home, you generally do not allocate the loan proceeds or the related interest. Free turbo tax 2012 The interest is usually deductible as qualified home mortgage interest, regardless of how the loan proceeds are used. Free turbo tax 2012 For more information, see Publication 936. Free turbo tax 2012 Allocation period. Free turbo tax 2012   The period for which a loan is allocated to a particular use begins on the date the proceeds are used and ends on the earlier of the following dates. Free turbo tax 2012 The date the loan is repaid. Free turbo tax 2012 The date the loan is reallocated to another use. Free turbo tax 2012 Proceeds not disbursed to borrower. Free turbo tax 2012   Even if the lender disburses the loan proceeds to a third party, the allocation of the loan is still based on your use of the funds. Free turbo tax 2012 This applies whether you pay for property, services, or anything else by incurring a loan, or you take property subject to a debt. Free turbo tax 2012 Proceeds deposited in borrower's account. Free turbo tax 2012   Treat loan proceeds deposited in an account as property held for investment. Free turbo tax 2012 It does not matter whether the account pays interest. Free turbo tax 2012 Any interest you pay on the loan is investment interest expense. Free turbo tax 2012 If you withdraw the proceeds of the loan, you must reallocate the loan based on the use of the funds. Free turbo tax 2012 Example. Free turbo tax 2012 Celina, a calendar-year taxpayer, borrows $100,000 on January 4 and immediately uses the proceeds to open a checking account. Free turbo tax 2012 No other amounts are deposited in the account during the year and no part of the loan principal is repaid during the year. Free turbo tax 2012 On April 2, Celina uses $20,000 from the checking account for a passive activity expenditure. Free turbo tax 2012 On September 4, Celina uses an additional $40,000 from the account for personal purposes. Free turbo tax 2012 Under the interest allocation rules, the entire $100,000 loan is treated as property held for investment for the period from January 4 through April 1. Free turbo tax 2012 From April 2 through September 3, Celina must treat $20,000 of the loan as used in the passive activity and $80,000 of the loan as property held for investment. Free turbo tax 2012 From September 4 through December 31, she must treat $40,000 of the loan as used for personal purposes, $20,000 as used in the passive activity, and $40,000 as property held for investment. Free turbo tax 2012 Order of funds spent. Free turbo tax 2012   Generally, you treat loan proceeds deposited in an account as used (spent) before either of the following amounts. Free turbo tax 2012 Any unborrowed amounts held in the same account. Free turbo tax 2012 Any amounts deposited after these loan proceeds. Free turbo tax 2012 Example. Free turbo tax 2012 On January 9, Olena opened a checking account, depositing $500 of the proceeds of Loan A and $1,000 of unborrowed funds. Free turbo tax 2012 The following table shows the transactions in her account during the tax year. Free turbo tax 2012 Date Transaction January 9 $500 proceeds of Loan A and $1,000 unborrowed funds deposited January 14 $500 proceeds of Loan B  deposited February 19 $800 used for personal purposes February 27 $700 used for passive activity June 19 $1,000 proceeds of Loan C  deposited November 20 $800 used for an investment December 18 $600 used for personal purposes Olena treats the $800 used for personal purposes as made from the $500 proceeds of Loan A and $300 of the proceeds of Loan B. Free turbo tax 2012 She treats the $700 used for a passive activity as made from the remaining $200 proceeds of Loan B and $500 of unborrowed funds. Free turbo tax 2012 She treats the $800 used for an investment as made entirely from the proceeds of Loan C. Free turbo tax 2012 She treats the $600 used for personal purposes as made from the remaining $200 proceeds of Loan C and $400 of unborrowed funds. Free turbo tax 2012 For the periods during which loan proceeds are held in the account, Olena treats them as property held for investment. Free turbo tax 2012 Payments from checking accounts. Free turbo tax 2012   Generally, you treat a payment from a checking or similar account as made at the time the check is written if you mail or deliver it to the payee within a reasonable period after you write it. Free turbo tax 2012 You can treat checks written on the same day as written in any order. Free turbo tax 2012 Amounts paid within 30 days. Free turbo tax 2012   If you receive loan proceeds in cash or if the loan proceeds are deposited in an account, you can treat any payment (up to the amount of the proceeds) made from any account you own, or from cash, as made from those proceeds. Free turbo tax 2012 This applies to any payment made within 30 days before or after the proceeds are received in cash or deposited in your account. Free turbo tax 2012   If the loan proceeds are deposited in an account, you can apply this rule even if the rules stated earlier under Order of funds spent would otherwise require you to treat the proceeds as used for other purposes. Free turbo tax 2012 If you apply this rule to any payments, disregard those payments (and the proceeds from which they are made) when applying the rules stated under Order of funds spent. Free turbo tax 2012   If you received the loan proceeds in cash, you can treat the payment as made on the date you received the cash instead of the date you actually made the payment. Free turbo tax 2012 Example. Free turbo tax 2012 Giovanni gets a loan of $1,000 on August 4 and receives the proceeds in cash. Free turbo tax 2012 Giovanni deposits $1,500 in an account on August 18 and on August 28 writes a check on the account for a passive activity expense. Free turbo tax 2012 Also, Giovanni deposits his paycheck, deposits other loan proceeds, and pays his bills during the same period. Free turbo tax 2012 Regardless of these other transactions, Giovanni can treat $1,000 of the deposit he made on August 18 as being paid on August 4 from the loan proceeds. Free turbo tax 2012 In addition, Giovanni can treat the passive activity expense he paid on August 28 as made from the $1,000 loan proceeds treated as deposited in the account. Free turbo tax 2012 Optional method for determining date of reallocation. Free turbo tax 2012   You can use the following method to determine the date loan proceeds are reallocated to another use. Free turbo tax 2012 You can treat all payments from loan proceeds in the account during any month as taking place on the later of the following dates. Free turbo tax 2012 The first day of that month. Free turbo tax 2012 The date the loan proceeds are deposited in the account. Free turbo tax 2012 However, you can use this optional method only if you treat all payments from the account during the same calendar month in the same way. Free turbo tax 2012 Interest on a segregated account. Free turbo tax 2012   If you have an account that contains only loan proceeds and interest earned on the account, you can treat any payment from that account as being made first from the interest. Free turbo tax 2012 When the interest earned is used up, any remaining payments are from loan proceeds. Free turbo tax 2012 Example. Free turbo tax 2012 You borrowed $20,000 and used the proceeds of this loan to open a new savings account. Free turbo tax 2012 When the account had earned interest of $867, you withdrew $20,000 for personal purposes. Free turbo tax 2012 You can treat the withdrawal as coming first from the interest earned on the account, $867, and then from the loan proceeds, $19,133 ($20,000 − $867). Free turbo tax 2012 All the interest charged on the loan from the time it was deposited in the account until the time of the withdrawal is investment interest expense. Free turbo tax 2012 The interest charged on the part of the proceeds used for personal purposes ($19,133) from the time you withdrew it until you either repay it or reallocate it to another use is personal interest expense. Free turbo tax 2012 The interest charged on the loan proceeds you left in the account ($867) continues to be investment interest expense until you either repay it or reallocate it to another use. Free turbo tax 2012 Loan repayment. Free turbo tax 2012   When you repay any part of a loan allocated to more than one use, treat it as being repaid in the following order. Free turbo tax 2012 Personal use. Free turbo tax 2012 Investments and passive activities (other than those included in (3)). Free turbo tax 2012 Passive activities in connection with a rental real estate activity in which you actively participate. Free turbo tax 2012 Former passive activities. Free turbo tax 2012 Trade or business use and expenses for certain low-income housing projects. Free turbo tax 2012 Line of credit (continuous borrowings). Free turbo tax 2012   The following rules apply if you have a line of credit or similar arrangement. Free turbo tax 2012 Treat all borrowed funds on which interest accrues at the same fixed or variable rate as a single loan. Free turbo tax 2012 Treat borrowed funds or parts of borrowed funds on which interest accrues at different fixed or variable rates as different loans. Free turbo tax 2012 Treat these loans as repaid in the order shown on the loan agreement. Free turbo tax 2012 Loan refinancing. Free turbo tax 2012   Allocate the replacement loan to the same uses to which the repaid loan was allocated. Free turbo tax 2012 Make the allocation only to the extent you use the proceeds of the new loan to repay any part of the original loan. Free turbo tax 2012 Debt-financed distribution. Free turbo tax 2012   A debt-financed distribution occurs when a partnership or S corporation borrows funds and allocates those funds to distributions made to partners or shareholders. Free turbo tax 2012 The manner in which you report the interest expense associated with the distributed debt proceeds depends on your use of those proceeds. Free turbo tax 2012 How to report. Free turbo tax 2012   If the proceeds were used in a nonpassive trade or business activity, report the interest on Schedule E (Form 1040), line 28; enter “interest expense” and the name of the partnership or S corporation in column (a) and the amount in column (h). Free turbo tax 2012 If the proceeds were used in a passive activity, follow the Instructions for Form 8582, Passive Activity Loss Limitations, to determine the amount of interest expense that can be reported on Schedule E (Form 1040), line 28; enter “interest expense” and the name of the partnership in column (a) and the amount in column (f). Free turbo tax 2012 If the proceeds were used in an investment activity, enter the interest on Form 4952. Free turbo tax 2012 If the proceeds are used for personal purposes, the interest is generally not deductible. Free turbo tax 2012 Interest You Can Deduct You can generally deduct as a business expense all interest you pay or accrue during the tax year on debts related to your trade or business. Free turbo tax 2012 Interest relates to your trade or business if you use the proceeds of the loan for a trade or business expense. Free turbo tax 2012 It does not matter what type of property secures the loan. Free turbo tax 2012 You can deduct interest on a debt only if you meet all the following requirements. Free turbo tax 2012 You are legally liable for that debt. Free turbo tax 2012 Both you and the lender intend that the debt be repaid. Free turbo tax 2012 You and the lender have a true debtor-creditor relationship. Free turbo tax 2012 Partial liability. Free turbo tax 2012   If you are liable for part of a business debt, you can deduct only your share of the total interest paid or accrued. Free turbo tax 2012 Example. Free turbo tax 2012 You and your brother borrow money. Free turbo tax 2012 You are liable for 50% of the note. Free turbo tax 2012 You use your half of the loan in your business, and you make one-half of the loan payments. Free turbo tax 2012 You can deduct your half of the total interest payments as a business deduction. Free turbo tax 2012 Mortgage. Free turbo tax 2012   Generally, mortgage interest paid or accrued on real estate you own legally or equitably is deductible. Free turbo tax 2012 However, rather than deducting the interest currently, you may have to add it to the cost basis of the property as explained later under Capitalization of Interest. Free turbo tax 2012 Statement. Free turbo tax 2012   If you paid $600 or more of mortgage interest (including certain points) during the year on any one mortgage, you generally will receive a Form 1098 or a similar statement. Free turbo tax 2012 You will receive the statement if you pay interest to a person (including a financial institution or a cooperative housing corporation) in the course of that person's trade or business. Free turbo tax 2012 A governmental unit is a person for purposes of furnishing the statement. Free turbo tax 2012   If you receive a refund of interest you overpaid in an earlier year, this amount will be reported in box 3 of Form 1098. Free turbo tax 2012 You cannot deduct this amount. Free turbo tax 2012 For information on how to report this refund, see Refunds of interest, later in this chapter. Free turbo tax 2012 Expenses paid to obtain a mortgage. Free turbo tax 2012   Certain expenses you pay to obtain a mortgage cannot be deducted as interest. Free turbo tax 2012 These expenses, which include mortgage commissions, abstract fees, and recording fees, are capital expenses. Free turbo tax 2012 If the property mortgaged is business or income-producing property, you can amortize the costs over the life of the mortgage. Free turbo tax 2012 Prepayment penalty. Free turbo tax 2012   If you pay off your mortgage early and pay the lender a penalty for doing this, you can deduct the penalty as interest. Free turbo tax 2012 Interest on employment tax deficiency. Free turbo tax 2012   Interest charged on employment taxes assessed on your business is deductible. Free turbo tax 2012 Original issue discount (OID). Free turbo tax 2012   OID is a form of interest. Free turbo tax 2012 A loan (mortgage or other debt) generally has OID when its proceeds are less than its principal amount. Free turbo tax 2012 The OID is the difference between the stated redemption price at maturity and the issue price of the loan. Free turbo tax 2012   A loan's stated redemption price at maturity is the sum of all amounts (principal and interest) payable on it other than qualified stated interest. Free turbo tax 2012 Qualified stated interest is stated interest that is unconditionally payable in cash or property (other than another loan of the issuer) at least annually over the term of the loan at a single fixed rate. Free turbo tax 2012 You generally deduct OID over the term of the loan. Free turbo tax 2012 Figure the amount to deduct each year using the constant-yield method, unless the OID on the loan is de minimis. Free turbo tax 2012 De minimis OID. Free turbo tax 2012   The OID is de minimis if it is less than one-fourth of 1% (. Free turbo tax 2012 0025) of the stated redemption price of the loan at maturity multiplied by the number of full years from the date of original issue to maturity (the term of the loan). Free turbo tax 2012   If the OID is de minimis, you can choose one of the following ways to figure the amount you can deduct each year. Free turbo tax 2012 On a constant-yield basis over the term of the loan. Free turbo tax 2012 On a straight-line basis over the term of the loan. Free turbo tax 2012 In proportion to stated interest payments. Free turbo tax 2012 In its entirety at maturity of the loan. Free turbo tax 2012 You make this choice by deducting the OID in a manner consistent with the method chosen on your timely filed tax return for the tax year in which the loan is issued. Free turbo tax 2012 Example. Free turbo tax 2012 On January 1, 2013, you took out a $100,000 discounted loan and received $98,500 in proceeds. Free turbo tax 2012 The loan will mature on January 1, 2023 (a 10-year term), and the $100,000 principal is payable on that date. Free turbo tax 2012 Interest of $10,000 is payable on January 1 of each year, beginning January 1, 2014. Free turbo tax 2012 The $1,500 OID on the loan is de minimis because it is less than $2,500 ($100,000 × . Free turbo tax 2012 0025 × 10). Free turbo tax 2012 You choose to deduct the OID on a straight-line basis over the term of the loan. Free turbo tax 2012 Beginning in 2013, you can deduct $150 each year for 10 years. Free turbo tax 2012 Constant-yield method. Free turbo tax 2012   If the OID is not de minimis, you must use the constant-yield method to figure how much you can deduct each year. Free turbo tax 2012 You figure your deduction for the first year using the following steps. Free turbo tax 2012 Determine the issue price of the loan. Free turbo tax 2012 Generally, this equals the proceeds of the loan. Free turbo tax 2012 If you paid points on the loan (as discussed later), the issue price generally is the difference between the proceeds and the points. Free turbo tax 2012 Multiply the result in (1) by the yield to maturity. Free turbo tax 2012 Subtract any qualified stated interest payments from the result in (2). Free turbo tax 2012 This is the OID you can deduct in the first year. Free turbo tax 2012   To figure your deduction in any subsequent year, follow the above steps, except determine the adjusted issue price in step (1). Free turbo tax 2012 To get the adjusted issue price, add to the issue price any OID previously deducted. Free turbo tax 2012 Then follow steps (2) and (3) above. Free turbo tax 2012   The yield to maturity is generally shown in the literature you receive from your lender. Free turbo tax 2012 If you do not have this information, consult your lender or tax advisor. Free turbo tax 2012 In general, the yield to maturity is the discount rate that, when used in computing the present value of all principal and interest payments, produces an amount equal to the principal amount of the loan. Free turbo tax 2012 Example. Free turbo tax 2012 The facts are the same as in the previous example, except that you deduct the OID on a constant yield basis over the term of the loan. Free turbo tax 2012 The yield to maturity on your loan is 10. Free turbo tax 2012 2467%, compounded annually. Free turbo tax 2012 For 2013, you can deduct $93 [($98,500 × . Free turbo tax 2012 102467) − $10,000]. Free turbo tax 2012 For 2014, you can deduct $103 [($98,593 × . Free turbo tax 2012 102467) − $10,000]. Free turbo tax 2012 Loan or mortgage ends. Free turbo tax 2012   If your loan or mortgage ends, you may be able to deduct any remaining OID in the tax year in which the loan or mortgage ends. Free turbo tax 2012 A loan or mortgage may end due to a refinancing, prepayment, foreclosure, or similar event. Free turbo tax 2012 If you refinance with the original lender, you generally cannot deduct the remaining OID in the year in which the refinancing occurs, but you may be able to deduct it over the term of the new mortgage or loan. Free turbo tax 2012 See Interest paid with funds borrowed from original lender under Interest You Cannot Deduct, later. Free turbo tax 2012 Points. Free turbo tax 2012   The term “points” is used to describe certain charges paid, or treated as paid, by a borrower to obtain a loan or a mortgage. Free turbo tax 2012 These charges are also called loan origination fees, maximum loan charges, discount points, or premium charges. Free turbo tax 2012 If any of these charges (points) are solely for the use of money, they are interest. Free turbo tax 2012   Because points are prepaid interest, you generally cannot deduct the full amount in the year paid. Free turbo tax 2012 However, you can choose to fully deduct points in the year paid if you meet certain tests. Free turbo tax 2012 For exceptions to the general rule, see Publication 936. Free turbo tax 2012 The points reduce the issue price of the loan and result in original issue discount (OID), deductible as explained in the preceding discussion. Free turbo tax 2012 Partial payments on a nontax debt. Free turbo tax 2012   If you make partial payments on a debt (other than a debt owed the IRS), the payments are applied, in general, first to interest and any remainder to principal. Free turbo tax 2012 You can deduct only the interest. Free turbo tax 2012 This rule does not apply when it can be inferred that the borrower and lender understood that a different allocation of the payments would be made. Free turbo tax 2012 Installment purchase. Free turbo tax 2012   If you make an installment purchase of business property, the contract between you and the seller generally provides for the payment of interest. Free turbo tax 2012 If no interest or a low rate of interest is charged under the contract, a portion of the stated principal amount payable under the contract may be recharacterized as interest (unstated interest). Free turbo tax 2012 The amount recharacterized as interest reduces your basis in the property and increases your interest expense. Free turbo tax 2012 For more information on installment sales and unstated interest, see Publication 537. Free turbo tax 2012 Interest You Cannot Deduct Certain interest payments cannot be deducted. Free turbo tax 2012 In addition, certain other expenses that may seem to be interest but are not, cannot be deducted as interest. Free turbo tax 2012 You cannot currently deduct interest that must be capitalized, and you generally cannot deduct personal interest. Free turbo tax 2012 Interest paid with funds borrowed from original lender. Free turbo tax 2012   If you use the cash method of accounting, you cannot deduct interest you pay with funds borrowed from the original lender through a second loan, an advance, or any other arrangement similar to a loan. Free turbo tax 2012 You can deduct the interest expense once you start making payments on the new loan. Free turbo tax 2012   When you make a payment on the new loan, you first apply the payment to interest and then to the principal. Free turbo tax 2012 All amounts you apply to the interest on the first loan are deductible, along with any interest you pay on the second loan, subject to any limits that apply. Free turbo tax 2012 Capitalized interest. Free turbo tax 2012   You cannot currently deduct interest you are required to capitalize under the uniform capitalization rules. Free turbo tax 2012 See Capitalization of Interest, later. Free turbo tax 2012 In addition, if you buy property and pay interest owed by the seller (for example, by assuming the debt and any interest accrued on the property), you cannot deduct the interest. Free turbo tax 2012 Add this interest to the basis of the property. Free turbo tax 2012 Commitment fees or standby charges. Free turbo tax 2012   Fees you incur to have business funds available on a standby basis, but not for the actual use of the funds, are not deductible as interest payments. Free turbo tax 2012 You may be able to deduct them as business expenses. Free turbo tax 2012   If the funds are for inventory or certain property used in your business, the fees are indirect costs and you generally must capitalize them under the uniform capitalization rules. Free turbo tax 2012 See Capitalization of Interest, later. Free turbo tax 2012 Interest on income tax. Free turbo tax 2012   Interest charged on income tax assessed on your individual income tax return is not a business deduction even though the tax due is related to income from your trade or business. Free turbo tax 2012 Treat this interest as a business deduction only in figuring a net operating loss deduction. Free turbo tax 2012 Penalties. Free turbo tax 2012   Penalties on underpaid deficiencies and underpaid estimated tax are not interest. Free turbo tax 2012 You cannot deduct them. Free turbo tax 2012 Generally, you cannot deduct any fines or penalties. Free turbo tax 2012 Interest on loans with respect to life insurance policies. Free turbo tax 2012   You generally cannot deduct interest on a debt incurred with respect to any life insurance, annuity, or endowment contract that covers any individual unless that individual is a key person. Free turbo tax 2012   If the policy or contract covers a key person, you can deduct the interest on up to $50,000 of debt for that person. Free turbo tax 2012 However, the deduction for any month cannot be more than the interest figured using Moody's Composite Yield on Seasoned Corporate Bonds (formerly known as Moody's Corporate Bond Yield Average-Monthly Average Corporates) (Moody's rate) for that month. Free turbo tax 2012 Who is a key person?   A key person is an officer or 20% owner. Free turbo tax 2012 However, the number of individuals you can treat as key persons is limited to the greater of the following. Free turbo tax 2012 Five individuals. Free turbo tax 2012 The lesser of 5% of the total officers and employees of the company or 20 individuals. Free turbo tax 2012 Exceptions for pre-June 1997 contracts. Free turbo tax 2012   You can generally deduct the interest if the contract was issued before June 9, 1997, and the covered individual is someone other than an employee, officer, or someone financially interested in your business. Free turbo tax 2012 If the contract was purchased before June 21, 1986, you can generally deduct the interest no matter who is covered by the contract. Free turbo tax 2012 Interest allocated to unborrowed policy cash value. Free turbo tax 2012   Corporations and partnerships generally cannot deduct any interest expense allocable to unborrowed cash values of life insurance, annuity, or endowment contracts. Free turbo tax 2012 This rule applies to contracts issued after June 8, 1997, that cover someone other than an officer, director, employee, or 20% owner. Free turbo tax 2012 For more information, see section 264(f) of the Internal Revenue Code. Free turbo tax 2012 Capitalization of Interest Under the uniform capitalization rules, you generally must capitalize interest on debt equal to your expenditures to produce real property or certain tangible personal property. Free turbo tax 2012 The property must be produced by you for use in your trade or business or for sale to customers. Free turbo tax 2012 You cannot capitalize interest related to property that you acquire in any other manner. Free turbo tax 2012 Interest you paid or incurred during the production period must be capitalized if the property produced is designated property. Free turbo tax 2012 Designated property is any of the following. Free turbo tax 2012 Real property. Free turbo tax 2012 Tangible personal property with a class life of 20 years or more. Free turbo tax 2012 Tangible personal property with an estimated production period of more than 2 years. Free turbo tax 2012 Tangible personal property with an estimated production period of more than 1 year if the estimated cost of production is more than $1 million. Free turbo tax 2012 Property you produce. Free turbo tax 2012   You produce property if you construct, build, install, manufacture, develop, improve, create, raise, or grow it. Free turbo tax 2012 Treat property produced for you under a contract as produced by you up to the amount you pay or incur for the property. Free turbo tax 2012 Carrying charges. Free turbo tax 2012   Carrying charges include taxes you pay to carry or develop real estate or to carry, transport, or install personal property. Free turbo tax 2012 You can choose to capitalize carrying charges not subject to the uniform capitalization rules if they are otherwise deductible. Free turbo tax 2012 For more information, see chapter 7. Free turbo tax 2012 Capitalized interest. Free turbo tax 2012   Treat capitalized interest as a cost of the property produced. Free turbo tax 2012 You recover your interest when you sell or use the property. Free turbo tax 2012 If the property is inventory, recover capitalized interest through cost of goods sold. Free turbo tax 2012 If the property is used in your trade or business, recover capitalized interest through an adjustment to basis, depreciation, amortization, or other method. Free turbo tax 2012 Partnerships and S corporations. Free turbo tax 2012   The interest capitalization rules are applied first at the partnership or S corporation level. Free turbo tax 2012 The rules are then applied at the partners' or shareholders' level to the extent the partnership or S corporation has insufficient debt to support the production or construction costs. Free turbo tax 2012   If you are a partner or a shareholder, you may have to capitalize interest you incur during the tax year for the production costs of the partnership or S corporation. Free turbo tax 2012 You may also have to capitalize interest incurred by the partnership or S corporation for your own production costs. Free turbo tax 2012 To properly capitalize interest under these rules, you must be given the required information in an attachment to the Schedule K-1 you receive from the partnership or S corporation. Free turbo tax 2012 Additional information. Free turbo tax 2012   The procedures for applying the uniform capitalization rules are beyond the scope of this publication. Free turbo tax 2012 For more information, see sections 1. Free turbo tax 2012 263A-8 through 1. Free turbo tax 2012 263A-15 of the regulations and Notice 88-99. Free turbo tax 2012 Notice 88-99 is in Cumulative Bulletin 1988-2. Free turbo tax 2012 When To Deduct Interest If the uniform capitalization rules, discussed under Capitalization of Interest, earlier, do not apply to you, deduct interest as follows. Free turbo tax 2012 Cash method. Free turbo tax 2012   Under the cash method, you can generally deduct only the interest you actually paid during the tax year. Free turbo tax 2012 You cannot deduct a promissory note you gave as payment because it is a promise to pay and not an actual payment. Free turbo tax 2012 Prepaid interest. Free turbo tax 2012   You generally cannot deduct any interest paid before the year it is due. Free turbo tax 2012 Interest paid in advance can be deducted only in the tax year in which it is due. Free turbo tax 2012 Discounted loan. Free turbo tax 2012   If interest or a discount is subtracted from your loan proceeds, it is not a payment of interest and you cannot deduct it when you get the loan. Free turbo tax 2012 For more information, see Original issue discount (OID) under Interest You Can Deduct, earlier. Free turbo tax 2012 Refunds of interest. Free turbo tax 2012   If you pay interest and then receive a refund in the same tax year of any part of the interest, reduce your interest deduction by the refund. Free turbo tax 2012 If you receive the refund in a later tax year, include the refund in your income to the extent the deduction for the interest reduced your tax. Free turbo tax 2012 Accrual method. Free turbo tax 2012   Under an accrual method, you can deduct only interest that has accrued during the tax year. Free turbo tax 2012 Prepaid interest. Free turbo tax 2012   See Prepaid interest, earlier. Free turbo tax 2012 Discounted loan. Free turbo tax 2012   See Discounted loan, earlier. Free turbo tax 2012 Tax deficiency. Free turbo tax 2012   If you contest a federal income tax deficiency, interest does not accrue until the tax year the final determination of liability is made. Free turbo tax 2012 If you do not contest the deficiency, then the interest accrues in the year the tax was asserted and agreed to by you. Free turbo tax 2012   However, if you contest but pay the proposed tax deficiency and interest, and you do not designate the payment as a cash bond, then the interest is deductible in the year paid. Free turbo tax 2012 Related person. Free turbo tax 2012   If you use an accrual method, you cannot deduct interest owed to a related person who uses the cash method until payment is made and the interest is includible in the gross income of that person. Free turbo tax 2012 The relationship is determined as of the end of the tax year for which the interest would otherwise be deductible. Free turbo tax 2012 See section 267 of the Internal Revenue Code for more information. Free turbo tax 2012 Below-Market Loans If you receive a below-market gift or demand loan and use the proceeds in your trade or business, you may be able to deduct the forgone interest. Free turbo tax 2012 See Treatment of gift and demand loans, later, in this discussion. Free turbo tax 2012 A below-market loan is a loan on which no interest is charged or on which interest is charged at a rate below the applicable federal rate. Free turbo tax 2012 A gift or demand loan that is a below-market loan generally is considered an arm's-length transaction in which you, the borrower, are considered as having received both the following. Free turbo tax 2012 A loan in exchange for a note that requires the payment of interest at the applicable federal rate. Free turbo tax 2012 An additional payment in an amount equal to the forgone interest. Free turbo tax 2012 The additional payment is treated as a gift, dividend, contribution to capital, payment of compensation, or other payment, depending on the substance of the transaction. Free turbo tax 2012 Forgone interest. Free turbo tax 2012   For any period, forgone interest is The interest that would be payable for that period if interest accrued on the loan at the applicable federal rate and was payable annually on December 31, minus Any interest actually payable on the loan for the period. Free turbo tax 2012 Applicable federal rates are published by the IRS each month in the Internal Revenue Bulletin. Free turbo tax 2012 Internal Revenue Bulletins are available on the IRS web site at www. Free turbo tax 2012 irs. Free turbo tax 2012 gov/irb. Free turbo tax 2012 You can also contact an IRS office to get these rates. Free turbo tax 2012 Loans subject to the rules. Free turbo tax 2012   The rules for below-market loans apply to the following. Free turbo tax 2012 Gift loans (below-market loans where the forgone interest is in the nature of a gift). Free turbo tax 2012 Compensation-related loans (below-market loans between an employer and an employee or between an independent contractor and a person for whom the contractor provides services). Free turbo tax 2012 Corporation-shareholder loans. Free turbo tax 2012 Tax avoidance loans (below-market loans where the avoidance of federal tax is one of the main purposes of the interest arrangement). Free turbo tax 2012 Loans to qualified continuing care facilities under a continuing care contract (made after October 11, 1985). Free turbo tax 2012   Except as noted in (5) above, these rules apply to demand loans (loans payable in full at any time upon the lender's demand) outstanding after June 6, 1984, and to term loans (loans that are not demand loans) made after that date. Free turbo tax 2012 Treatment of gift and demand loans. Free turbo tax 2012   If you receive a below-market gift loan or demand loan, you are treated as receiving an additional payment (as a gift, dividend, etc. Free turbo tax 2012 ) equal to the forgone interest on the loan. Free turbo tax 2012 You are then treated as transferring this amount back to the lender as interest. Free turbo tax 2012 These transfers are considered to occur annually, generally on December 31. Free turbo tax 2012 If you use the loan proceeds in your trade or business, you can deduct the forgone interest each year as a business interest expense. Free turbo tax 2012 The lender must report it as interest income. Free turbo tax 2012 Limit on forgone interest for gift loans of $100,000 or less. Free turbo tax 2012   For gift loans between individuals, forgone interest treated as transferred back to the lender is limited to the borrower's net investment income for the year. Free turbo tax 2012 This limit applies if the outstanding loans between the lender and borrower total $100,000 or less. Free turbo tax 2012 If the borrower's net investment income is $1,000 or less, it is treated as zero. Free turbo tax 2012 This limit does not apply to a loan if the avoidance of any federal tax is one of the main purposes of the interest arrangement. Free turbo tax 2012 Treatment of term loans. Free turbo tax 2012   If you receive a below-market term loan other than a gift or demand loan, you are treated as receiving an additional cash payment (as a dividend, etc. Free turbo tax 2012 ) on the date the loan is made. Free turbo tax 2012 This payment is equal to the loan amount minus the present value, at the applicable federal rate, of all payments due under the loan. Free turbo tax 2012 The same amount is treated as original issue discount on the loan. Free turbo tax 2012 See Original issue discount (OID) under Interest You Can Deduct, earlier. Free turbo tax 2012 Exceptions for loans of $10,000 or less. Free turbo tax 2012   The rules for below-market loans do not apply to any day on which the total outstanding loans between the borrower and lender is $10,000 or less. Free turbo tax 2012 This exception applies only to the following. Free turbo tax 2012 Gift loans between individuals if the loan is not directly used to buy or carry income-producing assets. Free turbo tax 2012 Compensation-related loans or corporation-shareholder loans if the avoidance of any federal tax is not a principal purpose of the interest arrangement. Free turbo tax 2012 This exception does not apply to a term loan described in (2) above that was previously subject to the below-market loan rules. Free turbo tax 2012 Those rules will continue to apply even if the outstanding balance is reduced to $10,000 or less. Free turbo tax 2012 Exceptions for loans without significant tax effect. Free turbo tax 2012   The following loans are specifically exempted from the rules for below-market loans because their interest arrangements do not have a significant effect on the federal tax liability of the borrower or the lender. Free turbo tax 2012 Loans made available by lenders to the general public on the same terms and conditions that are consistent with the lender's customary business practices. Free turbo tax 2012 Loans subsidized by a federal, state, or municipal government that are made available under a program of general application to the public. Free turbo tax 2012 Certain employee-relocation loans. Free turbo tax 2012 Certain loans to or from a foreign person, unless the interest income would be effectively connected with the conduct of a U. Free turbo tax 2012 S. Free turbo tax 2012 trade or business and not exempt from U. Free turbo tax 2012 S. Free turbo tax 2012 tax under an income tax treaty. Free turbo tax 2012 Any other loan if the taxpayer can show that the interest arrangement has no significant effect on the federal tax liability of the lender or the borrower. Free turbo tax 2012 Whether an interest arrangement has a significant effect on the federal tax liability of the lender or the borrower will be determined by all the facts and circumstances. Free turbo tax 2012 Consider all the following factors. Free turbo tax 2012 Whether items of income and deduction generated by the loan offset each other. Free turbo tax 2012 The amount of the items. Free turbo tax 2012 The cost of complying with the below-market loan provisions if they were to apply. Free turbo tax 2012 Any reasons, other than taxes, for structuring the transaction as a below-market loan. Free turbo tax 2012 Exception for loans to qualified continuing care facilities. Free turbo tax 2012   The below-market interest rules do not apply to a loan owed by a qualified continuing care facility under a continuing care contract if the lender or lender's spouse is age 62 or older by the end of the calendar year. Free turbo tax 2012 A qualified continuing care facility is one or more facilities (excluding nursing homes) meeting the requirements listed below. Free turbo tax 2012 Designed to provide services under continuing care contracts (defined below). Free turbo tax 2012 Includes an independent living unit, and either an assisted living or nursing facility, or both. Free turbo tax 2012 Substantially all of the independent living unit residents are covered by continuing care contracts. Free turbo tax 2012 A continuing care contract is a written contract between an individual and a qualified continuing care facility that includes all of the following conditions. Free turbo tax 2012 The individual or individual's spouse must be entitled to use the facility for the rest of their life or lives. Free turbo tax 2012 The individual or individual's spouse will be provided with housing, as appropriate for the health of the individual or individual's spouse in an: independent living unit (which has additional available facilities outside the unit for the provision of meals and other personal care), and assisted living or nursing facility available in the continuing care facility. Free turbo tax 2012 The individual or individual's spouse will be provided with assisted living or nursing care available in the continuing care facility, as required for the health of the individual or the individual's spouse. Free turbo tax 2012 For more information, see section 7872(h) of the Internal Revenue Code. Free turbo tax 2012 Sale or exchange of property. Free turbo tax 2012   Different rules generally apply to a loan connected with the sale or exchange of property. Free turbo tax 2012 If the loan does not provide adequate stated interest, part of the principal payment may be considered interest. Free turbo tax 2012 However, there are exceptions that may require you to apply the below-market interest rate rules to these loans. Free turbo tax 2012 See Unstated Interest and Original Issue Discount (OID) in Publication 537. Free turbo tax 2012 More information. Free turbo tax 2012   For more information on below-market loans, see section 7872 of the Internal Revenue Code and section 1. Free turbo tax 2012 7872-5 of the regulations. Free turbo tax 2012 Prev  Up  Next   Home   More Online Publications