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How Can I File My 2012 Taxes Online

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How Can I File My 2012 Taxes Online

How can i file my 2012 taxes online Index A Assessment of tax, Assessment of tax. How can i file my 2012 taxes online Assistance (see Tax help) B Bankruptcy Code tax compliance, Bankruptcy Code Tax Compliance Requirements Returns due after filing, Tax Returns Due After the Bankruptcy Filing Returns due before chapter 13 filing, Tax Returns Due for Periods Ending Before the Bankruptcy Filing in Chapter 13 Cases Bankruptcy estate, Taxes and the Bankruptcy Estate Attribute carryovers, Carrybacks from the debtor's activities. How can i file my 2012 taxes online Carrybacks, Carrybacks from the debtor's activities. How can i file my 2012 taxes online Disclosure of return information, Disclosure of bankruptcy estate's return information to debtor. How can i file my 2012 taxes online Employer identification number, Employer identification number. How can i file my 2012 taxes online , Employer identification number. How can i file my 2012 taxes online Estimated tax, Estimated tax – Form 1041-ES. How can i file my 2012 taxes online Return filing requirements, Bankruptcy Estate Tax Return Filing Requirements and Payment of Tax Due Separate taxable entity, Separate taxable entity. How can i file my 2012 taxes online Transfer of assets, Transfer of assets between debtor and bankruptcy estate. How can i file my 2012 taxes online C Conversion or dismissal chapter 11 case, Conversion or dismissal of chapter 11 cases. How can i file my 2012 taxes online Corporations, Corporations Filing requirements, Corporations Tax-free reorganizations, Tax-Free Reorganizations D Debt cancellation, Debt Cancellation Bankruptcy exclusion, Bankruptcy case exclusion. How can i file my 2012 taxes online Corporations, Corporations Insolvency exclusion, Insolvency exclusion. How can i file my 2012 taxes online Partnerships, Partnerships S corporations, S Corporations Deductions and credits, Bankruptcy Estate Deductions and Credits Administrative expenses, Administrative expenses. How can i file my 2012 taxes online Discharge of tax, Discharge of Unpaid Tax Disclosure of return information, Disclosure of debtor's return information to trustee. How can i file my 2012 taxes online , Disclosure of return information to trustee. How can i file my 2012 taxes online Dismissal of case Amended return, Dismissal of bankruptcy case. How can i file my 2012 taxes online E Election to end tax year: Form 1040, Debtor's Election To End Tax Year – Form 1040 Annualizing taxable income, Annualizing taxable income. How can i file my 2012 taxes online Election by spouse, Election by debtor's spouse. How can i file my 2012 taxes online Filing requirements, Making the Election - Filing Requirements Short tax years, Short tax years. How can i file my 2012 taxes online Employment taxes, Employment taxes. How can i file my 2012 taxes online , Employment Taxes Examination of return, Examination of return. How can i file my 2012 taxes online F Free tax services, How To Get Tax Help H Help (see Tax help) I Individuals in Chapter 12 or 13, Individuals in Chapter 12 or 13 Individuals in Chapter 7 or 11, Individuals in Chapter 7 or 11 Gross income chapter 11 case, Income of the estate in individual chapter 11 cases. How can i file my 2012 taxes online Gross income chapter 7 case, Income of the estate in individual chapter 7 cases. How can i file my 2012 taxes online J Jurisdiction over tax matters, Court Jurisdiction Over Tax Matters Bankruptcy Court, Bankruptcy Court Tax Court, Tax Court M More information (see Tax help) O Ordering tax return transcripts, Ordering tax transcripts and copies of returns. How can i file my 2012 taxes online P Partnerships, filing requirements, Partnerships Payment of tax claim, Federal Tax Claims Eighth priority taxes, Unsecured Tax Claims Second, third, fourth priority taxes, Higher priority taxes. How can i file my 2012 taxes online Secured tax claims, Secured tax claims. How can i file my 2012 taxes online Penalties, Penalties. How can i file my 2012 taxes online Relief from penalties, Relief from certain penalties. How can i file my 2012 taxes online Publications (see Tax help) R Request for prompt tax determination, Prompt Determination Requests Request for refund, Requests for refund or credit S Statute of limitations collections, Statute of limitations for collection. How can i file my 2012 taxes online T Tax attributes, Reduction of Tax Attributes Basis reduction, Basis. How can i file my 2012 taxes online , Basis Reduction Carryovers, Attribute carryovers. How can i file my 2012 taxes online Order of reduction, Order of reduction. How can i file my 2012 taxes online Reduction of, Reduction of Tax Attributes Tax help, How To Get Tax Help Tax reporting chapter 11 cases, Tax Reporting – Chapter 11 Cases Employment tax returns, Tax Reporting – Chapter 11 Cases Information returns, Employment taxes and employer's obligation to file Form W-2 in individual chapter 11 cases. How can i file my 2012 taxes online Self-employment taxes, Self-employment taxes in individual chapter 11 cases. How can i file my 2012 taxes online Wage reporting, tax withholding, Employment taxes and employer's obligation to file Form W-2 in individual chapter 11 cases. How can i file my 2012 taxes online Tax return: Form 1041, Figuring tax due. How can i file my 2012 taxes online Figuring tax due, Filing Requirements Payment of tax due, Payment of Tax Due When to file, When to file. How can i file my 2012 taxes online Taxpayer Advocate, Taxpayer Advocate Service. 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Every day, millions of computer users share files online. Whether it is music, games, video, or software, peer-to-peer (P2P) file sharing allows users to share all kinds of content. To share files, you download special software that connects your computer to an informal network of other computers running the same software. Millions of users could be connected to each other through this software at one time. The software is often free and easy to access.

However, file sharing can have a number of risks. For example, when you are connected to file-sharing programs, you could unknowingly allow others to copy private files you never intended to share. You could download material that is protected by copyright laws and find yourself mired in legal issues. You could download a virus or facilitate a security breach. Or you could unwittingly download pornography labeled as something else.

To secure the personal information stored on your computer, the FTC suggests that you:

  • Set up the file-sharing software very carefully.
  • Be aware of spyware. Use a good anti-spyware program.
  • Close your connection when you're not using it.
  • Use an effective anti-virus program and update it regularly.
  • Talk with your family about file sharing.

For more complete information on P2P, visit the FTC's website, OnguardOnline.

Online Copyright Issues

Quite simply, to make or download unauthorized copies of software is to break the law, no matter how many copies are involved. Whether you are casually making a few copies for friends, loaning disks, distributing and/or downloading pirated software via the Internet, or buying a single software program and then installing it on 100 computers, you are committing a copyright infringement. It doesn't matter if you make money or not. If you or your company is caught copying software, you may be held liable under both civil and criminal law.

If the copyright owner brings a civil action against you, the owner can stop you from using its software immediately and can also request monetary damages. The copyright owner can sue for as much as $150,000 for each program copied. In addition, the government can criminally prosecute you for copyright infringement. If convicted, you can be fined up to $250,000, be sentenced to jail for up to five years, or both.

For more information contact the U.S. Department of Justice or the Business Software alliance, with content on online piracy issues.

The How Can I File My 2012 Taxes Online

How can i file my 2012 taxes online 13. How can i file my 2012 taxes online   Basis of Property Table of Contents Introduction Useful Items - You may want to see: Cost BasisReal Property Adjusted BasisIncreases to Basis Decreases to Basis Basis Other Than CostProperty Received for Services Taxable Exchanges Involuntary Conversions Nontaxable Exchanges Property Transferred From a Spouse Property Received as a Gift Inherited Property Property Changed From Personal to Business or Rental Use Stocks and Bonds Introduction This chapter discusses how to figure your basis in property. How can i file my 2012 taxes online It is divided into the following sections. How can i file my 2012 taxes online Cost basis. How can i file my 2012 taxes online Adjusted basis. How can i file my 2012 taxes online Basis other than cost. How can i file my 2012 taxes online Your basis is the amount of your investment in property for tax purposes. How can i file my 2012 taxes online Use the basis to figure gain or loss on the sale, exchange, or other disposition of property. How can i file my 2012 taxes online Also use it to figure deductions for depreciation, amortization, depletion, and casualty losses. How can i file my 2012 taxes online If you use property for both business or investment purposes and for personal purposes, you must allocate the basis based on the use. How can i file my 2012 taxes online Only the basis allocated to the business or investment use of the property can be depreciated. How can i file my 2012 taxes online Your original basis in property is adjusted (increased or decreased) by certain events. How can i file my 2012 taxes online For example, if you make improvements to the property, increase your basis. How can i file my 2012 taxes online If you take deductions for depreciation or casualty losses, or claim certain credits, reduce your basis. How can i file my 2012 taxes online Keep accurate records of all items that affect the basis of your property. How can i file my 2012 taxes online For more information on keeping records, see chapter 1. How can i file my 2012 taxes online Useful Items - You may want to see: Publication 15-B Employer's Tax Guide to Fringe Benefits 525 Taxable and Nontaxable Income 535 Business Expenses 537 Installment Sales 544 Sales and Other Dispositions of Assets 550 Investment Income and Expenses 551 Basis of Assets 946 How To Depreciate Property Cost Basis The basis of property you buy is usually its cost. How can i file my 2012 taxes online The cost is the amount you pay in cash, debt obligations, other property, or services. How can i file my 2012 taxes online Your cost also includes amounts you pay for the following items: Sales tax, Freight, Installation and testing, Excise taxes, Legal and accounting fees (when they must be capitalized), Revenue stamps, Recording fees, and Real estate taxes (if you assume liability for the seller). How can i file my 2012 taxes online In addition, the basis of real estate and business assets may include other items. How can i file my 2012 taxes online Loans with low or no interest. How can i file my 2012 taxes online    If you buy property on a time-payment plan that charges little or no interest, the basis of your property is your stated purchase price minus any amount considered to be unstated interest. How can i file my 2012 taxes online You generally have unstated interest if your interest rate is less than the applicable federal rate. How can i file my 2012 taxes online   For more information, see Unstated Interest and Original Issue Discount (OID) in Publication 537. How can i file my 2012 taxes online Real Property Real property, also called real estate, is land and generally anything built on, growing on, or attached to land. How can i file my 2012 taxes online If you buy real property, certain fees and other expenses you pay are part of your cost basis in the property. How can i file my 2012 taxes online Lump sum purchase. How can i file my 2012 taxes online   If you buy buildings and the land on which they stand for a lump sum, allocate the cost basis among the land and the buildings. How can i file my 2012 taxes online Allocate the cost basis according to the respective fair market values (FMVs) of the land and buildings at the time of purchase. How can i file my 2012 taxes online Figure the basis of each asset by multiplying the lump sum by a fraction. How can i file my 2012 taxes online The numerator is the FMV of that asset and the denominator is the FMV of the whole property at the time of purchase. How can i file my 2012 taxes online    If you are not certain of the FMVs of the land and buildings, you can allocate the basis according to their assessed values for real estate tax purposes. How can i file my 2012 taxes online Fair market value (FMV). How can i file my 2012 taxes online   FMV is the price at which the property would change hands between a willing buyer and a willing seller, neither having to buy or sell, and both having reasonable knowledge of all the necessary facts. How can i file my 2012 taxes online Sales of similar property on or about the same date may be helpful in figuring the FMV of the property. How can i file my 2012 taxes online Assumption of mortgage. How can i file my 2012 taxes online   If you buy property and assume (or buy the property subject to) an existing mortgage on the property, your basis includes the amount you pay for the property plus the amount to be paid on the mortgage. How can i file my 2012 taxes online Settlement costs. How can i file my 2012 taxes online   Your basis includes the settlement fees and closing costs you paid for buying the property. How can i file my 2012 taxes online (A fee for buying property is a cost that must be paid even if you buy the property for cash. How can i file my 2012 taxes online ) Do not include fees and costs for getting a loan on the property in your basis. How can i file my 2012 taxes online   The following are some of the settlement fees or closing costs you can include in the basis of your property. How can i file my 2012 taxes online Abstract fees (abstract of title fees). How can i file my 2012 taxes online Charges for installing utility services. How can i file my 2012 taxes online Legal fees (including fees for the title search and preparation of the sales contract and deed). How can i file my 2012 taxes online Recording fees. How can i file my 2012 taxes online Survey fees. How can i file my 2012 taxes online Transfer taxes. How can i file my 2012 taxes online Owner's title insurance. How can i file my 2012 taxes online Any amounts the seller owes that you agree to pay, such as back taxes or interest, recording or mortgage fees, charges for improvements or repairs, and sales commissions. How can i file my 2012 taxes online   Settlement costs do not include amounts placed in escrow for the future payment of items such as taxes and insurance. How can i file my 2012 taxes online   The following are some of the settlement fees and closing costs you cannot include in the basis of property. How can i file my 2012 taxes online Casualty insurance premiums. How can i file my 2012 taxes online Rent for occupancy of the property before closing. How can i file my 2012 taxes online Charges for utilities or other services related to occupancy of the property before closing. How can i file my 2012 taxes online Charges connected with getting a loan, such as points (discount points, loan origination fees), mortgage insurance premiums, loan assumption fees, cost of a credit report, and fees for an appraisal required by a lender. How can i file my 2012 taxes online Fees for refinancing a mortgage. How can i file my 2012 taxes online Real estate taxes. How can i file my 2012 taxes online   If you pay real estate taxes the seller owed on real property you bought, and the seller did not reimburse you, treat those taxes as part of your basis. How can i file my 2012 taxes online You cannot deduct them as an expense. How can i file my 2012 taxes online    If you reimburse the seller for taxes the seller paid for you, you can usually deduct that amount as an expense in the year of purchase. How can i file my 2012 taxes online Do not include that amount in the basis of your property. How can i file my 2012 taxes online If you did not reimburse the seller, you must reduce your basis by the amount of those taxes. How can i file my 2012 taxes online Points. How can i file my 2012 taxes online   If you pay points to get a loan (including a mortgage, second mortgage, line of credit, or a home equity loan), do not add the points to the basis of the related property. How can i file my 2012 taxes online Generally, you deduct the points over the term of the loan. How can i file my 2012 taxes online For more information on how to deduct points, see chapter 23. How can i file my 2012 taxes online Points on home mortgage. How can i file my 2012 taxes online   Special rules may apply to points you and the seller pay when you get a mortgage to buy your main home. How can i file my 2012 taxes online If certain requirements are met, you can deduct the points in full for the year in which they are paid. How can i file my 2012 taxes online Reduce the basis of your home by any seller-paid points. How can i file my 2012 taxes online Adjusted Basis Before figuring gain or loss on a sale, exchange, or other disposition of property or figuring allowable depreciation, depletion, or amortization, you must usually make certain adjustments (increases and decreases) to the cost basis or basis other than cost (discussed later) of the property. How can i file my 2012 taxes online The result is the adjusted basis. How can i file my 2012 taxes online Increases to Basis Increase the basis of any property by all items properly added to a capital account. How can i file my 2012 taxes online Examples of items that increase basis are shown in Table 13-1. How can i file my 2012 taxes online These include the items discussed below. How can i file my 2012 taxes online Improvements. How can i file my 2012 taxes online   Add to your basis in property the cost of improvements having a useful life of more than 1 year, that increase the value of the property, lengthen its life, or adapt it to a different use. How can i file my 2012 taxes online For example, improvements include putting a recreation room in your unfinished basement, adding another bathroom or bedroom, putting up a fence, putting in new plumbing or wiring, installing a new roof, or paving your driveway. How can i file my 2012 taxes online Assessments for local improvements. How can i file my 2012 taxes online   Add to the basis of property assessments for improvements such as streets and sidewalks if they increase the value of the property assessed. How can i file my 2012 taxes online Do not deduct them as taxes. How can i file my 2012 taxes online However, you can deduct as taxes assessments for maintenance or repairs, or for meeting interest charges related to the improvements. How can i file my 2012 taxes online Example. How can i file my 2012 taxes online Your city changes the street in front of your store into an enclosed pedestrian mall and assesses you and other affected property owners for the cost of the conversion. How can i file my 2012 taxes online Add the assessment to your property's basis. How can i file my 2012 taxes online In this example, the assessment is a depreciable asset. How can i file my 2012 taxes online Decreases to Basis Decrease the basis of any property by all items that represent a return of capital for the period during which you held the property. How can i file my 2012 taxes online Examples of items that decrease basis are shown in Table 13-1. How can i file my 2012 taxes online These include the items discussed below. How can i file my 2012 taxes online Table 13-1. How can i file my 2012 taxes online Examples of Adjustments to Basis Increases to Basis Decreases to Basis • Capital improvements: • Exclusion from income of   Putting an addition on your home subsidies for energy conservation   Replacing an entire roof measures   Paving your driveway     Installing central air conditioning • Casualty or theft loss deductions   Rewiring your home and insurance reimbursements       • Assessments for local improvements:     Water connections     Extending utility service lines to the property • Postponed gain from the sale of a home   Sidewalks • Alternative motor vehicle credit  (Form 8910)   Roads       • Alternative fuel vehicle refueling     property credit (Form 8911)           • Residential energy credits (Form 5695)       • Casualty losses: • Depreciation and section 179 deduction   Restoring damaged property     • Nontaxable corporate distributions • Legal fees:     Cost of defending and perfecting a title • Certain canceled debt excluded from   Fees for getting a reduction of an assessment income     • Zoning costs • Easements           • Adoption tax benefits Casualty and theft losses. How can i file my 2012 taxes online   If you have a casualty or theft loss, decrease the basis in your property by any insurance proceeds or other reimbursement and by any deductible loss not covered by insurance. How can i file my 2012 taxes online    You must increase your basis in the property by the amount you spend on repairs that restore the property to its pre-casualty condition. How can i file my 2012 taxes online   For more information on casualty and theft losses, see chapter 25. How can i file my 2012 taxes online Depreciation and section 179 deduction. How can i file my 2012 taxes online   Decrease the basis of your qualifying business property by any section 179 deduction you take and the depreciation you deducted, or could have deducted (including any special depreciation allowance), on your tax returns under the method of depreciation you selected. How can i file my 2012 taxes online   For more information about depreciation and the section 179 deduction, see Publication 946 and the Instructions for Form 4562. How can i file my 2012 taxes online Example. How can i file my 2012 taxes online You owned a duplex used as rental property that cost you $40,000, of which $35,000 was allocated to the building and $5,000 to the land. How can i file my 2012 taxes online You added an improvement to the duplex that cost $10,000. How can i file my 2012 taxes online In February last year, the duplex was damaged by fire. How can i file my 2012 taxes online Up to that time, you had been allowed depreciation of $23,000. How can i file my 2012 taxes online You sold some salvaged material for $1,300 and collected $19,700 from your insurance company. How can i file my 2012 taxes online You deducted a casualty loss of $1,000 on your income tax return for last year. How can i file my 2012 taxes online You spent $19,000 of the insurance proceeds for restoration of the duplex, which was completed this year. How can i file my 2012 taxes online You must use the duplex's adjusted basis after the restoration to determine depreciation for the rest of the property's recovery period. How can i file my 2012 taxes online Figure the adjusted basis of the duplex as follows: Original cost of duplex $35,000 Addition to duplex 10,000 Total cost of duplex $45,000 Minus: Depreciation 23,000 Adjusted basis before casualty $22,000 Minus: Insurance proceeds $19,700     Deducted casualty loss 1,000     Salvage proceeds 1,300 22,000 Adjusted basis after casualty $-0- Add: Cost of restoring duplex 19,000 Adjusted basis after restoration $19,000 Note. How can i file my 2012 taxes online Your basis in the land is its original cost of $5,000. How can i file my 2012 taxes online Easements. How can i file my 2012 taxes online   The amount you receive for granting an easement is generally considered to be proceeds from the sale of an interest in real property. How can i file my 2012 taxes online It reduces the basis of the affected part of the property. How can i file my 2012 taxes online If the amount received is more than the basis of the part of the property affected by the easement, reduce your basis in that part to zero and treat the excess as a recognized gain. How can i file my 2012 taxes online   If the gain is on a capital asset, see chapter 16 for information about how to report it. How can i file my 2012 taxes online If the gain is on property used in a trade or business, see Publication 544 for information about how to report it. How can i file my 2012 taxes online Exclusion of subsidies for energy conservation measures. How can i file my 2012 taxes online   You can exclude from gross income any subsidy you received from a public utility company for the purchase or installation of an energy conservation measure for a dwelling unit. How can i file my 2012 taxes online Reduce the basis of the property for which you received the subsidy by the excluded amount. How can i file my 2012 taxes online For more information about this subsidy, see chapter 12. How can i file my 2012 taxes online Postponed gain from sale of home. How can i file my 2012 taxes online    If you postponed gain from the sale of your main home under rules in effect before May 7, 1997, you must reduce the basis of the home you acquired as a replacement by the amount of the postponed gain. How can i file my 2012 taxes online For more information on the rules for the sale of a home, see chapter 15. How can i file my 2012 taxes online Basis Other Than Cost There are many times when you cannot use cost as basis. How can i file my 2012 taxes online In these cases, the fair market value or the adjusted basis of the property can be used. How can i file my 2012 taxes online Fair market value (FMV) and adjusted basis were discussed earlier. How can i file my 2012 taxes online Property Received for Services If you receive property for your services, include the FMV of the property in income. How can i file my 2012 taxes online The amount you include in income becomes your basis. How can i file my 2012 taxes online If the services were performed for a price agreed on beforehand, it will be accepted as the FMV of the property if there is no evidence to the contrary. How can i file my 2012 taxes online Restricted property. How can i file my 2012 taxes online   If you receive property for your services and the property is subject to certain restrictions, your basis in the property is its FMV when it becomes substantially vested. How can i file my 2012 taxes online However, this rule does not apply if you make an election to include in income the FMV of the property at the time it is transferred to you, less any amount you paid for it. How can i file my 2012 taxes online Property is substantially vested when it is transferable or when it is not subject to a substantial risk of forfeiture (you do not have a good chance of losing it). How can i file my 2012 taxes online For more information, see Restricted Property in Publication 525. How can i file my 2012 taxes online Bargain purchases. How can i file my 2012 taxes online   A bargain purchase is a purchase of an item for less than its FMV. How can i file my 2012 taxes online If, as compensation for services, you buy goods or other property at less than FMV, include the difference between the purchase price and the property's FMV in your income. How can i file my 2012 taxes online Your basis in the property is its FMV (your purchase price plus the amount you include in income). How can i file my 2012 taxes online   If the difference between your purchase price and the FMV is a qualified employee discount, do not include the difference in income. How can i file my 2012 taxes online However, your basis in the property is still its FMV. How can i file my 2012 taxes online See Employee Discounts in Publication 15-B. How can i file my 2012 taxes online Taxable Exchanges A taxable exchange is one in which the gain is taxable or the loss is deductible. How can i file my 2012 taxes online A taxable gain or deductible loss also is known as a recognized gain or loss. How can i file my 2012 taxes online If you receive property in exchange for other property in a taxable exchange, the basis of the property you receive is usually its FMV at the time of the exchange. How can i file my 2012 taxes online Involuntary Conversions If you receive replacement property as a result of an involuntary conversion, such as a casualty, theft, or condemnation, figure the basis of the replacement property using the basis of the converted property. How can i file my 2012 taxes online Similar or related property. How can i file my 2012 taxes online   If you receive replacement property similar or related in service or use to the converted property, the replacement property's basis is the same as the converted property's basis on the date of the conversion, with the following adjustments. How can i file my 2012 taxes online Decrease the basis by the following. How can i file my 2012 taxes online Any loss you recognize on the involuntary conversion. How can i file my 2012 taxes online Any money you receive that you do not spend on similar property. How can i file my 2012 taxes online Increase the basis by the following. How can i file my 2012 taxes online Any gain you recognize on the involuntary conversion. How can i file my 2012 taxes online Any cost of acquiring the replacement property. How can i file my 2012 taxes online Money or property not similar or related. How can i file my 2012 taxes online    If you receive money or property not similar or related in service or use to the converted property, and you buy replacement property similar or related in service or use to the converted property, the basis of the replacement property is its cost decreased by the gain not recognized on the conversion. How can i file my 2012 taxes online Example. How can i file my 2012 taxes online The state condemned your property. How can i file my 2012 taxes online The adjusted basis of the property was $26,000 and the state paid you $31,000 for it. How can i file my 2012 taxes online You realized a gain of $5,000 ($31,000 − $26,000). How can i file my 2012 taxes online You bought replacement property similar in use to the converted property for $29,000. How can i file my 2012 taxes online You recognize a gain of $2,000 ($31,000 − $29,000), the unspent part of the payment from the state. How can i file my 2012 taxes online Your unrecognized gain is $3,000, the difference between the $5,000 realized gain and the $2,000 recognized gain. How can i file my 2012 taxes online The basis of the replacement property is figured as follows: Cost of replacement property $29,000 Minus: Gain not recognized 3,000 Basis of replacement property $26,000 Allocating the basis. How can i file my 2012 taxes online   If you buy more than one piece of replacement property, allocate your basis among the properties based on their respective costs. How can i file my 2012 taxes online Basis for depreciation. How can i file my 2012 taxes online   Special rules apply in determining and depreciating the basis of MACRS property acquired in an involuntary conversion. How can i file my 2012 taxes online For information, see What Is the Basis of Your Depreciable Property? in chapter 1 of Publication 946. How can i file my 2012 taxes online Nontaxable Exchanges A nontaxable exchange is an exchange in which you are not taxed on any gain and you cannot deduct any loss. How can i file my 2012 taxes online If you receive property in a nontaxable exchange, its basis is generally the same as the basis of the property you transferred. How can i file my 2012 taxes online See Nontaxable Trades in chapter 14. How can i file my 2012 taxes online Like-Kind Exchanges The exchange of property for the same kind of property is the most common type of nontaxable exchange. How can i file my 2012 taxes online To qualify as a like-kind exchange, the property traded and the property received must be both of the following. How can i file my 2012 taxes online Qualifying property. How can i file my 2012 taxes online Like-kind property. How can i file my 2012 taxes online The basis of the property you receive is generally the same as the adjusted basis of the property you gave up. How can i file my 2012 taxes online If you trade property in a like-kind exchange and also pay money, the basis of the property received is the adjusted basis of the property you gave up increased by the money you paid. How can i file my 2012 taxes online Qualifying property. How can i file my 2012 taxes online   In a like-kind exchange, you must hold for investment or for productive use in your trade or business both the property you give up and the property you receive. How can i file my 2012 taxes online Like-kind property. How can i file my 2012 taxes online   There must be an exchange of like-kind property. How can i file my 2012 taxes online Like-kind properties are properties of the same nature or character, even if they differ in grade or quality. How can i file my 2012 taxes online The exchange of real estate for real estate and personal property for similar personal property are exchanges of like-kind property. How can i file my 2012 taxes online Example. How can i file my 2012 taxes online You trade in an old truck used in your business with an adjusted basis of $1,700 for a new one costing $6,800. How can i file my 2012 taxes online The dealer allows you $2,000 on the old truck, and you pay $4,800. How can i file my 2012 taxes online This is a like-kind exchange. How can i file my 2012 taxes online The basis of the new truck is $6,500 (the adjusted basis of the old one, $1,700, plus the amount you paid, $4,800). How can i file my 2012 taxes online If you sell your old truck to a third party for $2,000 instead of trading it in and then buy a new one from the dealer, you have a taxable gain of $300 on the sale (the $2,000 sale price minus the $1,700 adjusted basis). How can i file my 2012 taxes online The basis of the new truck is the price you pay the dealer. How can i file my 2012 taxes online Partially nontaxable exchanges. How can i file my 2012 taxes online   A partially nontaxable exchange is an exchange in which you receive unlike property or money in addition to like-kind property. How can i file my 2012 taxes online The basis of the property you receive is the same as the adjusted basis of the property you gave up, with the following adjustments. How can i file my 2012 taxes online Decrease the basis by the following amounts. How can i file my 2012 taxes online Any money you receive. How can i file my 2012 taxes online Any loss you recognize on the exchange. How can i file my 2012 taxes online Increase the basis by the following amounts. How can i file my 2012 taxes online Any additional costs you incur. How can i file my 2012 taxes online Any gain you recognize on the exchange. How can i file my 2012 taxes online If the other party to the exchange assumes your liabilities, treat the debt assumption as money you received in the exchange. How can i file my 2012 taxes online Allocation of basis. How can i file my 2012 taxes online   If you receive like-kind and unlike properties in the exchange, allocate the basis first to the unlike property, other than money, up to its FMV on the date of the exchange. How can i file my 2012 taxes online The rest is the basis of the like-kind property. How can i file my 2012 taxes online More information. How can i file my 2012 taxes online   See Like-Kind Exchanges in chapter 1 of Publication 544 for more information. How can i file my 2012 taxes online Basis for depreciation. How can i file my 2012 taxes online   Special rules apply in determining and depreciating the basis of MACRS property acquired in a like-kind exchange. How can i file my 2012 taxes online For information, see What Is the Basis of Your Depreciable Property? in chapter 1 of Publication 946. How can i file my 2012 taxes online Property Transferred From a Spouse The basis of property transferred to you or transferred in trust for your benefit by your spouse is the same as your spouse's adjusted basis. How can i file my 2012 taxes online The same rule applies to a transfer by your former spouse that is incident to divorce. How can i file my 2012 taxes online However, for property transferred in trust, adjust your basis for any gain recognized by your spouse or former spouse if the liabilities assumed, plus the liabilities to which the property is subject, are more than the adjusted basis of the property transferred. How can i file my 2012 taxes online If the property transferred to you is a series E, series EE, or series I U. How can i file my 2012 taxes online S. How can i file my 2012 taxes online savings bond, the transferor must include in income the interest accrued to the date of transfer. How can i file my 2012 taxes online Your basis in the bond immediately after the transfer is equal to the transferor's basis increased by the interest income includible in the transferor's income. How can i file my 2012 taxes online For more information on these bonds, see chapter 7. How can i file my 2012 taxes online At the time of the transfer, the transferor must give you the records needed to determine the adjusted basis and holding period of the property as of the date of the transfer. How can i file my 2012 taxes online For more information about the transfer of property from a spouse, see chapter 14. How can i file my 2012 taxes online Property Received as a Gift To figure the basis of property you receive as a gift, you must know its adjusted basis to the donor just before it was given to you, its FMV at the time it was given to you, and any gift tax paid on it. How can i file my 2012 taxes online FMV less than donor's adjusted basis. How can i file my 2012 taxes online   If the FMV of the property at the time of the gift is less than the donor's adjusted basis, your basis depends on whether you have a gain or a loss when you dispose of the property. How can i file my 2012 taxes online Your basis for figuring gain is the same as the donor's adjusted basis plus or minus any required adjustments to basis while you held the property. How can i file my 2012 taxes online Your basis for figuring loss is its FMV when you received the gift plus or minus any required adjustments to basis while you held the property. How can i file my 2012 taxes online See Adjusted Basis , earlier. How can i file my 2012 taxes online Example. How can i file my 2012 taxes online You received an acre of land as a gift. How can i file my 2012 taxes online At the time of the gift, the land had an FMV of $8,000. How can i file my 2012 taxes online The donor's adjusted basis was $10,000. How can i file my 2012 taxes online After you received the property, no events occurred to increase or decrease your basis. How can i file my 2012 taxes online If you later sell the property for $12,000, you will have a $2,000 gain because you must use the donor's adjusted basis at the time of the gift ($10,000) as your basis to figure gain. How can i file my 2012 taxes online If you sell the property for $7,000, you will have a $1,000 loss because you must use the FMV at the time of the gift ($8,000) as your basis to figure loss. How can i file my 2012 taxes online If the sales price is between $8,000 and $10,000, you have neither gain nor loss. How can i file my 2012 taxes online Business property. How can i file my 2012 taxes online   If you hold the gift as business property, your basis for figuring any depreciation, depletion, or amortization deductions is the same as the donor's adjusted basis plus or minus any required adjustments to basis while you hold the property. How can i file my 2012 taxes online FMV equal to or greater than donor's adjusted basis. How can i file my 2012 taxes online   If the FMV of the property is equal to or greater than the donor's adjusted basis, your basis is the donor's adjusted basis at the time you received the gift. How can i file my 2012 taxes online Increase your basis by all or part of any gift tax paid, depending on the date of the gift, explained later. How can i file my 2012 taxes online   Also, for figuring gain or loss from a sale or other disposition or for figuring depreciation, depletion, or amortization deductions on business property, you must increase or decrease your basis (the donor's adjusted basis) by any required adjustments to basis while you held the property. How can i file my 2012 taxes online See Adjusted Basis , earlier. How can i file my 2012 taxes online   If you received a gift during the tax year, increase your basis in the gift (the donor's adjusted basis) by the part of the gift tax paid on it due to the net increase in value of the gift. How can i file my 2012 taxes online Figure the increase by multiplying the gift tax paid by a fraction. How can i file my 2012 taxes online The numerator of the fraction is the net increase in value of the gift and the denominator is the amount of the gift. How can i file my 2012 taxes online   The net increase in value of the gift is the FMV of the gift minus the donor's adjusted basis. How can i file my 2012 taxes online The amount of the gift is its value for gift tax purposes after reduction by any annual exclusion and marital or charitable deduction that applies to the gift. How can i file my 2012 taxes online Example. How can i file my 2012 taxes online In 2013, you received a gift of property from your mother that had an FMV of $50,000. How can i file my 2012 taxes online Her adjusted basis was $20,000. How can i file my 2012 taxes online The amount of the gift for gift tax purposes was $36,000 ($50,000 minus the $14,000 annual exclusion). How can i file my 2012 taxes online She paid a gift tax of $7,320 on the property. How can i file my 2012 taxes online Your basis is $26,076, figured as follows: Fair market value $50,000 Minus: Adjusted basis −20,000 Net increase in value $30,000     Gift tax paid $7,320 Multiplied by ($30,000 ÷ $36,000) × . How can i file my 2012 taxes online 83 Gift tax due to net increase in value $6,076 Adjusted basis of property to your mother +20,000 Your basis in the property $26,076 Note. How can i file my 2012 taxes online If you received a gift before 1977, your basis in the gift (the donor's adjusted basis) includes any gift tax paid on it. How can i file my 2012 taxes online However, your basis cannot exceed the FMV of the gift at the time it was given to you. How can i file my 2012 taxes online Inherited Property Your basis in property you inherited from a decedent, who died before January 1, 2010, or after December 31, 2010, is generally one of the following: The FMV of the property at the date of the decedent's death. How can i file my 2012 taxes online The FMV on the alternate valuation date if the personal representative for the estate elects to use alternate valuation. How can i file my 2012 taxes online The value under the special-use valuation method for real property used in farming or a closely held business if elected for estate tax purposes. How can i file my 2012 taxes online The decedent's adjusted basis in land to the extent of the value excluded from the decedent's taxable estate as a qualified conservation easement. How can i file my 2012 taxes online If a federal estate tax return does not have to be filed, your basis in the inherited property is its appraised value at the date of death for state inheritance or transmission taxes. How can i file my 2012 taxes online For more information, see the instructions to Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return. How can i file my 2012 taxes online Property inherited from a decedent who died in 2010. How can i file my 2012 taxes online   If you inherited property from a decedent who died in 2010, special rules may apply. How can i file my 2012 taxes online For more information, see Publication 4895, Tax Treatment of Property Acquired From a Decedent Dying in 2010. How can i file my 2012 taxes online Community property. How can i file my 2012 taxes online   In community property states (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin), husband and wife are each usually considered to own half the community property. How can i file my 2012 taxes online When either spouse dies, the total value of the community property, even the part belonging to the surviving spouse, generally becomes the basis of the entire property. How can i file my 2012 taxes online For this rule to apply, at least half the value of the community property interest must be includible in the decedent's gross estate, whether or not the estate must file a return. How can i file my 2012 taxes online Example. How can i file my 2012 taxes online You and your spouse owned community property that had a basis of $80,000. How can i file my 2012 taxes online When your spouse died, half the FMV of the community interest was includible in your spouse's estate. How can i file my 2012 taxes online The FMV of the community interest was $100,000. How can i file my 2012 taxes online The basis of your half of the property after the death of your spouse is $50,000 (half of the $100,000 FMV). How can i file my 2012 taxes online The basis of the other half to your spouse's heirs is also $50,000. How can i file my 2012 taxes online For more information about community property, see Publication 555, Community Property. How can i file my 2012 taxes online Property Changed From Personal to Business or Rental Use If you hold property for personal use and then change it to business use or use it to produce rent, you can begin to depreciate the property at the time of the change. How can i file my 2012 taxes online To do so, you must figure its basis for depreciation at the time of the change. How can i file my 2012 taxes online An example of changing property held for personal use to business or rental use would be renting out your former personal residence. How can i file my 2012 taxes online Basis for depreciation. How can i file my 2012 taxes online   The basis for depreciation is the lesser of the following amounts. How can i file my 2012 taxes online The FMV of the property on the date of the change. How can i file my 2012 taxes online Your adjusted basis on the date of the change. How can i file my 2012 taxes online Example. How can i file my 2012 taxes online Several years ago, you paid $160,000 to have your house built on a lot that cost $25,000. How can i file my 2012 taxes online You paid $20,000 for permanent improvements to the house and claimed a $2,000 casualty loss deduction for damage to the house before changing the property to rental use last year. How can i file my 2012 taxes online Because land is not depreciable, you include only the cost of the house when figuring the basis for depreciation. How can i file my 2012 taxes online Your adjusted basis in the house when you changed its use was $178,000 ($160,000 + $20,000 − $2,000). How can i file my 2012 taxes online On the same date, your property had an FMV of $180,000, of which $15,000 was for the land and $165,000 was for the house. How can i file my 2012 taxes online The basis for figuring depreciation on the house is its FMV on the date of the change ($165,000) because it is less than your adjusted basis ($178,000). How can i file my 2012 taxes online Sale of property. How can i file my 2012 taxes online   If you later sell or dispose of property changed to business or rental use, the basis you use will depend on whether you are figuring gain or loss. How can i file my 2012 taxes online Gain. How can i file my 2012 taxes online   The basis for figuring a gain is your adjusted basis in the property when you sell the property. How can i file my 2012 taxes online Example. How can i file my 2012 taxes online Assume the same facts as in the previous example except that you sell the property at a gain after being allowed depreciation deductions of $37,500. How can i file my 2012 taxes online Your adjusted basis for figuring gain is $165,500 ($178,000 + $25,000 (land) − $37,500). How can i file my 2012 taxes online Loss. How can i file my 2012 taxes online   Figure the basis for a loss starting with the smaller of your adjusted basis or the FMV of the property at the time of the change to business or rental use. How can i file my 2012 taxes online Then make adjustments (increases and decreases) for the period after the change in the property's use, as discussed earlier under Adjusted Basis . How can i file my 2012 taxes online Example. How can i file my 2012 taxes online Assume the same facts as in the previous example, except that you sell the property at a loss after being allowed depreciation deductions of $37,500. How can i file my 2012 taxes online In this case, you would start with the FMV on the date of the change to rental use ($180,000), because it is less than the adjusted basis of $203,000 ($178,000 + $25,000 (land)) on that date. How can i file my 2012 taxes online Reduce that amount ($180,000) by the depreciation deductions ($37,500). How can i file my 2012 taxes online The basis for loss is $142,500 ($180,000 − $37,500). How can i file my 2012 taxes online Stocks and Bonds The basis of stocks or bonds you buy generally is the purchase price plus any costs of purchase, such as commissions and recording or transfer fees. How can i file my 2012 taxes online If you get stocks or bonds other than by purchase, your basis is usually determined by the FMV or the previous owner's adjusted basis, as discussed earlier. How can i file my 2012 taxes online You must adjust the basis of stocks for certain events that occur after purchase. How can i file my 2012 taxes online For example, if you receive additional stock from nontaxable stock dividends or stock splits, reduce your basis for each share of stock by dividing the adjusted basis of the old stock by the number of shares of old and new stock. How can i file my 2012 taxes online This rule applies only when the additional stock received is identical to the stock held. How can i file my 2012 taxes online Also reduce your basis when you receive nontaxable distributions. How can i file my 2012 taxes online They are a return of capital. How can i file my 2012 taxes online Example. How can i file my 2012 taxes online In 2011 you bought 100 shares of XYZ stock for $1,000 or $10 a share. How can i file my 2012 taxes online In 2012 you bought 100 shares of XYZ stock for $1,600 or $16 a share. How can i file my 2012 taxes online In 2013 XYZ declared a 2-for-1 stock split. How can i file my 2012 taxes online You now have 200 shares of stock with a basis of $5 a share and 200 shares with a basis of $8 a share. How can i file my 2012 taxes online Other basis. How can i file my 2012 taxes online   There are other ways to figure the basis of stocks or bonds depending on how you acquired them. How can i file my 2012 taxes online For detailed information, see Stocks and Bonds under Basis of Investment Property in chapter 4 of Publication 550. How can i file my 2012 taxes online Identifying stocks or bonds sold. How can i file my 2012 taxes online   If you can adequately identify the shares of stock or the bonds you sold, their basis is the cost or other basis of the particular shares of stocks or bonds. How can i file my 2012 taxes online If you buy and sell securities at various times in varying quantities and you cannot adequately identify the shares you sell, the basis of the securities you sell is the basis of the securities you acquired first. How can i file my 2012 taxes online For more information about identifying securities you sell, see Stocks and Bonds under Basis of Investment Property in chapter 4 of Publication 550. How can i file my 2012 taxes online Mutual fund shares. How can i file my 2012 taxes online   If you sell mutual fund shares you acquired at various times and prices and left on deposit in an account kept by a custodian or agent, you can elect to use an average basis. How can i file my 2012 taxes online For more information, see Publication 550. How can i file my 2012 taxes online Bond premium. How can i file my 2012 taxes online   If you buy a taxable bond at a premium and elect to amortize the premium, reduce the basis of the bond by the amortized premium you deduct each year. How can i file my 2012 taxes online See Bond Premium Amortization in chapter 3 of Publication 550 for more information. How can i file my 2012 taxes online Although you cannot deduct the premium on a tax-exempt bond, you must amortize the premium each year and reduce your basis in the bond by the amortized amount. How can i file my 2012 taxes online Original issue discount (OID) on debt instruments. How can i file my 2012 taxes online   You must increase your basis in an OID debt instrument by the OID you include in income for that instrument. How can i file my 2012 taxes online See Original Issue Discount (OID) in chapter 7 and Publication 1212, Guide To Original Issue Discount (OID) Instruments. How can i file my 2012 taxes online Tax-exempt obligations. How can i file my 2012 taxes online    OID on tax-exempt obligations is generally not taxable. How can i file my 2012 taxes online However, when you dispose of a tax-exempt obligation issued after September 3, 1982, and acquired after March 1, 1984, you must accrue OID on the obligation to determine its adjusted basis. How can i file my 2012 taxes online The accrued OID is added to the basis of the obligation to determine your gain or loss. How can i file my 2012 taxes online See chapter 4 of Publication 550. How can i file my 2012 taxes online Prev  Up  Next   Home   More Online Publications