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

How To Amend 2012 Tax Return

2012 940 Tax FormFree Tax Filing 2011 State And FederalHow To File An Amended ReturnFile An Amended ReturnWww.my Freetax.com1040x Instructions Dummies1040x Instructions 20102011 Turbo Tax Software1040x FileIrs Forms 1040x InstructionsTaxact 2013 FreeTurbotax 1040xFiles Taxes OnlineForm 1040ez 2011How To Amend A Tax ReturnArmy TaxesFree Online Tax FilingFree Federal And State Tax ReturnsTurbotax Amended Return1041 Ez FormHow To Amend Your Tax Return Online1040ez Tax Form 20102010 1040x Form1040 Tax FormWww Irs Gov EfileCan I E File 1040xFile State Tax OnlyTaxes 2006Tax Amendment FormForm 1040ez InstructionsLast Day To File Taxes 2014File Taxes OnlineWhere To Get Tax Form 1040xHand R Block OnlineState Tax Return Free E-fileForm 1040ez 20131040nr Tax ReturnTax Software 2012Free State Tax ServiceFiling Amended Tax Return 2013

How To Amend 2012 Tax Return

How to amend 2012 tax return Publication 1212 - Main Content Table of Contents Definitions Debt Instruments on the OID List Debt Instruments Not on the OID List Information for Brokers and Other MiddlemenShort-Term Obligations Redeemed at Maturity Long-Term Debt Instruments Certificates of Deposit Bearer Bonds and Coupons Backup Withholding Information for Owners of OID Debt InstrumentsExceptions. How to amend 2012 tax return Adjustment for premium. How to amend 2012 tax return Adjustment for acquisition premium. How to amend 2012 tax return Adjustment for market discount. How to amend 2012 tax return Form 1099-OID How To Report OID Figuring OID on Long-Term Debt Instruments Figuring OID on Stripped Bonds and Coupons How To Get Tax HelpLow Income Taxpayer Clinics Definitions The following terms are used throughout this publication. How to amend 2012 tax return “Original issue discount” is defined first. How to amend 2012 tax return The other terms are listed alphabetically. How to amend 2012 tax return Original issue discount (OID). How to amend 2012 tax return   OID is a form of interest. How to amend 2012 tax return It is the excess of a debt instrument's stated redemption price at maturity over its issue price (acquisition price for a stripped bond or coupon). How to amend 2012 tax return Zero coupon bonds and debt instruments that pay no stated interest until maturity are examples of debt instruments that have OID. How to amend 2012 tax return Accrual period. How to amend 2012 tax return   An accrual period is an interval of time used to measure OID. How to amend 2012 tax return The length of an accrual period can be 6 months, a year, or some other period, depending on when the debt instrument was issued. How to amend 2012 tax return Acquisition premium. How to amend 2012 tax return   Acquisition premium is the excess of a debt instrument's adjusted basis immediately after purchase, including purchase at original issue, over the debt instrument's adjusted issue price at that time. How to amend 2012 tax return A debt instrument does not have acquisition premium, however, if the debt instrument was purchased at a premium. How to amend 2012 tax return See Premium, later. How to amend 2012 tax return Adjusted issue price. How to amend 2012 tax return   The adjusted issue price of a debt instrument at the beginning of an accrual period is used to figure the OID allocable to that period. How to amend 2012 tax return In general, the adjusted issue price at the beginning of the debt instrument's first accrual period is its issue price. How to amend 2012 tax return The adjusted issue price at the beginning of any subsequent accrual period is the sum of the issue price and all the OID includible in income before that accrual period minus any payment previously made on the debt instrument, other than a payment of qualified stated interest. How to amend 2012 tax return Debt instrument. How to amend 2012 tax return   The term “debt instrument” means any instrument or contractual arrangement that constitutes indebtedness under general principles of federal income tax law (including, for example, a bond, debenture, note, certificate, or other evidence of indebtedness). How to amend 2012 tax return It generally does not include an annuity contract. How to amend 2012 tax return Issue price. How to amend 2012 tax return   For debt instruments listed in Section I-A and Section I-B, the issue price generally is the initial offering price to the public (excluding bond houses and brokers) at which a substantial amount of these instruments was sold. How to amend 2012 tax return Market discount. How to amend 2012 tax return   Market discount arises when a debt instrument purchased in the secondary market has decreased in value since its issue date, generally because of an increase in interest rates. How to amend 2012 tax return An OID debt instrument has market discount if your adjusted basis in the debt instrument immediately after you acquired it (usually its purchase price) was less than the debt instrument's issue price plus the total OID that accrued before you acquired it. How to amend 2012 tax return The market discount is the difference between the issue price plus accrued OID and your adjusted basis. How to amend 2012 tax return Premium. How to amend 2012 tax return   A debt instrument is purchased at a premium if its adjusted basis immediately after purchase is greater than the total of all amounts payable on the debt instrument after the purchase date, other than qualified stated interest. How to amend 2012 tax return The premium is the excess of the adjusted basis over the payable amounts. How to amend 2012 tax return See Publication 550 for information on the tax treatment of bond premium. How to amend 2012 tax return Qualified stated interest. How to amend 2012 tax return   In general, qualified stated interest is stated interest that is unconditionally payable in cash or property (other than debt instruments of the issuer) at least annually over the term of the debt instrument at a single fixed rate. How to amend 2012 tax return Stated redemption price at maturity. How to amend 2012 tax return   A debt instrument's stated redemption price at maturity is the sum of all amounts (principal and interest) payable on the debt instrument other than qualified stated interest. How to amend 2012 tax return Yield to maturity (YTM). How to amend 2012 tax return   In general, the YTM is the discount rate that, when used in figuring the present value of all principal and interest payments, produces an amount equal to the issue price of the debt instrument. How to amend 2012 tax return The YTM is generally shown on the face of the debt instrument or in the literature you receive from your broker. How to amend 2012 tax return If you do not have this information, consult your broker, tax advisor, or the issuer. How to amend 2012 tax return Debt Instruments on the OID List The OID list on the IRS website can be used by brokers and other middlemen to prepare information returns. How to amend 2012 tax return If you own a listed debt instrument, you generally should not rely on the information in the OID list to determine (or compare) the OID to be reported on your tax return. How to amend 2012 tax return The OID amounts listed are figured without reference to the price or date at which you acquired the debt instrument. How to amend 2012 tax return For information about determining the OID to be reported on your tax return, see the instructions for figuring OID under Information for Owners of OID Debt Instruments, later. How to amend 2012 tax return The following discussions explain what information is contained in each section of the list. How to amend 2012 tax return Section I. How to amend 2012 tax return   This section contains publicly offered, long-term debt instruments. How to amend 2012 tax return Section I-A: Corporate Debt Instruments Issued Before 1985. How to amend 2012 tax return Section I-B: Corporate Debt Instruments Issued After 1984. How to amend 2012 tax return Section I-C: Inflation-Indexed Debt Instruments. How to amend 2012 tax return For each publicly offered debt instrument in Section I, the list contains the following information. How to amend 2012 tax return The name of the issuer. How to amend 2012 tax return The Committee on Uniform Security Identification Procedures (CUSIP) number. How to amend 2012 tax return The issue date. How to amend 2012 tax return The maturity date. How to amend 2012 tax return The issue price expressed as a percent of principal or of stated redemption price at maturity. How to amend 2012 tax return The annual stated or coupon interest rate. How to amend 2012 tax return (This rate is shown as 0. How to amend 2012 tax return 00 if no annual interest payments are provided. How to amend 2012 tax return ) The yield to maturity will be added to Section I-B for bonds issued after December 31, 2006. How to amend 2012 tax return The total OID accrued up to January 1 of a calendar year. How to amend 2012 tax return (This information is not available for every instrument. How to amend 2012 tax return ) For long-term debt instruments issued after July 1, 1982, the daily OID for the accrual periods falling in a calendar year and a subsequent year. How to amend 2012 tax return The total OID per $1,000 of principal or maturity value for a calendar year and a subsequent year. How to amend 2012 tax return Section II. How to amend 2012 tax return   This section contains stripped coupons and principal components of U. How to amend 2012 tax return S. How to amend 2012 tax return Treasury and Government-Sponsored Enterprise debt instruments. How to amend 2012 tax return These stripped components are available through the Department of the Treasury's Separate Trading of Registered Interest and Principal of Securities (STRIPS) program and government-sponsored enterprises such as the Resolution Funding Corporation. How to amend 2012 tax return This section also includes debt instruments backed by U. How to amend 2012 tax return S. How to amend 2012 tax return Treasury securities that represent ownership interests in those securities. How to amend 2012 tax return   The obligations listed in Section II are arranged by maturity date. How to amend 2012 tax return The amounts listed are the total OID for a calendar year per $1,000 of redemption price. How to amend 2012 tax return Section III. How to amend 2012 tax return   This section contains short-term discount obligations. How to amend 2012 tax return Section III-A: Short-Term U. How to amend 2012 tax return S. How to amend 2012 tax return Treasury Bills. How to amend 2012 tax return Section III-B: Federal Home Loan Banks. How to amend 2012 tax return Section III-C: Federal National Mortgage Association. How to amend 2012 tax return Section III-D: Federal Farm Credit Banks. How to amend 2012 tax return Section III-E: Federal Home Loan Mortgage Corporation. How to amend 2012 tax return Section III-F: Federal Agricultural Mortgage Corporation. How to amend 2012 tax return    Information that supplements Section III-A is available on the Internet at http://www. How to amend 2012 tax return treasurydirect. How to amend 2012 tax return gov/tdhome. How to amend 2012 tax return htm. How to amend 2012 tax return   The short-term obligations listed in this section are arranged by maturity date. How to amend 2012 tax return For each obligation, the list contains the CUSIP number, maturity date, issue date, issue price (expressed as a percent of principal), and discount to be reported as interest for a calendar year per $1,000 of redemption price. How to amend 2012 tax return Brokers and other middlemen should rely on the issue price information in Section III only if they are unable to determine the price actually paid by the owner. How to amend 2012 tax return Debt Instruments Not on the OID List The list of debt instruments discussed earlier does not contain the following items. How to amend 2012 tax return U. How to amend 2012 tax return S. How to amend 2012 tax return savings bonds. How to amend 2012 tax return Certificates of deposit and other face-amount certificates issued at a discount, including syndicated certificates of deposit. How to amend 2012 tax return Obligations issued by tax-exempt organizations. How to amend 2012 tax return OID debt instruments that matured or were entirely called by the issuer before the tables were posted on the IRS website. How to amend 2012 tax return Mortgage-backed securities and mortgage participation certificates. How to amend 2012 tax return Long-term OID debt instruments issued before May 28, 1969. How to amend 2012 tax return Short-term obligations, other than the obligations listed in Section III. How to amend 2012 tax return Debt instruments issued at a discount by states or their political subdivisions. How to amend 2012 tax return REMIC regular interests and CDOs. How to amend 2012 tax return Commercial paper and banker's acceptances issued at a discount. How to amend 2012 tax return Obligations issued at a discount by individuals. How to amend 2012 tax return Foreign obligations not traded in the United States and obligations not issued in the United States. How to amend 2012 tax return Information for Brokers and Other Middlemen The following discussions contain specific instructions for brokers and middlemen who hold or redeem a debt instrument for the owner. How to amend 2012 tax return In general, you must file a Form 1099 for the debt instrument if the interest or OID to be included in the owner's income for a calendar year totals $10 or more. How to amend 2012 tax return You also must file a Form 1099 if you were required to deduct and withhold tax, even if the interest or OID is less than $10. How to amend 2012 tax return See Backup Withholding, later. How to amend 2012 tax return If you must file a Form 1099, furnish a copy to the owner of the debt instrument by January 31 in the year it is due. How to amend 2012 tax return File all your Forms 1099 with the IRS, accompanied by Form 1096, by February 28 in the year it is due (March 31 if you file electronically). How to amend 2012 tax return Electronic payee statements. How to amend 2012 tax return   You can issue Form 1099-OID electronically with the consent of the recipient. How to amend 2012 tax return More information. How to amend 2012 tax return   For more information, including penalties for failure to file (or furnish) required information returns or statements, see the General Instructions for Certain Information Returns (Forms 1098, 1099, 3921, 3922, 5498, and W-2G) for the appropriate calendar year. How to amend 2012 tax return Short-Term Obligations Redeemed at Maturity If you redeem a short-term discount obligation for the owner at maturity, you must report the discount as interest on Form 1099-INT. How to amend 2012 tax return To figure the discount, use the purchase price shown on the owner's copy of the purchase confirmation receipt or similar record, or the price shown in your transaction records. How to amend 2012 tax return If you sell the obligation for the owner before maturity, you must file Form 1099-B to reflect the gross proceeds to the seller. How to amend 2012 tax return Do not report the accrued discount to the date of sale on either Form 1099-INT or Form 1099-OID. How to amend 2012 tax return If the owner's purchase price cannot be determined, figure the discount as if the owner had purchased the obligation at its original issue price. How to amend 2012 tax return A special rule is used to determine the original issue price for information reporting on U. How to amend 2012 tax return S. How to amend 2012 tax return Treasury bills (T-bills) listed in Section III-A. How to amend 2012 tax return Under this rule, you treat as the original issue price of the T-bill the noncompetitive (weighted average of accepted auction bids) discount price for the longest-maturity T-bill maturing on the same date as the T-bill being redeemed. How to amend 2012 tax return This noncompetitive discount price is the issue price (expressed as a percent of principal) shown in Section III-A. How to amend 2012 tax return A similar rule is used to figure the discount on short-term discount obligations issued by the organizations listed in Section III-B through Section III-F. How to amend 2012 tax return Example 1. How to amend 2012 tax return There are 13-week and 26-week T-bills maturing on the same date as the T-bill being redeemed. How to amend 2012 tax return The price actually paid by the owner cannot be established by owner or middleman records. How to amend 2012 tax return You treat as the issue price of the T-bill the noncompetitive discount price (expressed as a percent of principal) shown in Section III-A for a 26-week bill maturing on the same date as the T-bill redeemed. How to amend 2012 tax return The interest you report on Form 1099-INT is the OID (per $1,000 of principal) shown in Section III-A for that obligation. How to amend 2012 tax return Long-Term Debt Instruments If you hold a long-term OID debt instrument as a nominee for the true owner, you generally must file Form 1099-OID. How to amend 2012 tax return For this purpose, you can rely on Section I of the OID list to determine the following information. How to amend 2012 tax return Whether a debt instrument has OID. How to amend 2012 tax return The OID to be reported on the Form 1099-OID. How to amend 2012 tax return In general, you must report OID on publicly offered, long-term debt instruments listed in Section I. How to amend 2012 tax return You also can report OID on other long-term debt instruments. How to amend 2012 tax return Form 1099-OID. How to amend 2012 tax return   On Form 1099-OID for a calendar year show the following information. How to amend 2012 tax return Box 1. How to amend 2012 tax return The OID for the actual dates the owner held the debt instruments during a calendar year. How to amend 2012 tax return To determine this amount, see Figuring OID, next. How to amend 2012 tax return Box 2. How to amend 2012 tax return The qualified stated interest paid or credited during the calendar year. How to amend 2012 tax return Interest reported here is not reported on Form 1099-INT. How to amend 2012 tax return The qualified stated interest on Treasury inflation-protected securities may be reported on Form 1099-INT in box 3 instead. How to amend 2012 tax return Box 3. How to amend 2012 tax return Any interest or principal forfeited because of an early withdrawal that the owner can deduct from gross income. How to amend 2012 tax return Do not reduce the amounts in boxes 1 and 2 by the forfeiture. How to amend 2012 tax return Box 4. How to amend 2012 tax return Any backup withholding for this debt instrument. How to amend 2012 tax return Box 7. How to amend 2012 tax return The CUSIP number, if any. How to amend 2012 tax return If there is no CUSIP number, give a description of the debt instrument, including the abbreviation for the stock exchange, the abbreviation used by the stock exchange for the issuer, the coupon rate, and the year of maturity (for example, NYSE XYZ 12. How to amend 2012 tax return 50 2006). How to amend 2012 tax return If the issuer of the debt instrument is other than the payer, show the name of the issuer in this box. How to amend 2012 tax return Box 8. How to amend 2012 tax return The OID on a U. How to amend 2012 tax return S. How to amend 2012 tax return Treasury obligation for the part of the year the owner held the debt instrument. How to amend 2012 tax return Box 9. How to amend 2012 tax return Investment expenses passed on to holders of a single-class REMIC. How to amend 2012 tax return Boxes 10-12. How to amend 2012 tax return Use to report any state income tax withheld for this debt instrument. How to amend 2012 tax return Figuring OID. How to amend 2012 tax return   You can determine the OID on a long-term debt instrument by using either of the following. How to amend 2012 tax return Section I of the OID list. How to amend 2012 tax return The income tax regulations. How to amend 2012 tax return Using Section I. How to amend 2012 tax return   If the owner held the debt instrument for the entire calendar year, report the OID shown in Section I for the calendar year. How to amend 2012 tax return Because OID is listed for each $1,000 of stated redemption price at maturity, you must adjust the listed amount to reflect the debt instrument's actual stated redemption price at maturity. How to amend 2012 tax return For example, if the debt instrument's stated redemption price at maturity is $500, report one-half the listed OID. How to amend 2012 tax return   If the owner held the debt instrument for less than the entire calendar year, figure the OID to report as follows. How to amend 2012 tax return Look up the daily OID for the first accrual period in the calendar year during which the owner held the debt instrument. How to amend 2012 tax return Multiply the daily OID by the number of days the owner held the debt instrument during that accrual period. How to amend 2012 tax return Repeat steps (1) and (2) for any remaining accrual periods for the year during which the owner held the debt instrument. How to amend 2012 tax return Add the results in steps (2) and (3) to determine the owner's OID per $1,000 of stated redemption price at maturity. How to amend 2012 tax return If necessary, adjust the OID in (4) to reflect the debt instrument's stated redemption price at maturity. How to amend 2012 tax return Report the result on Form 1099-OID in box 1. How to amend 2012 tax return Using the income tax regulations. How to amend 2012 tax return   Instead of using Section I to figure OID, you can use the regulations under sections 1272 through 1275 of the Internal Revenue Code. How to amend 2012 tax return For example, under the regulations, you can use monthly accrual periods in figuring OID for a debt instrument issued after April 3, 1994, that provides for monthly payments. How to amend 2012 tax return (If you use Section I-B, the OID is figured using 6-month accrual periods. How to amend 2012 tax return )   For a general explanation of the rules for figuring OID under the regulations, see Figuring OID on Long-Term Debt Instruments under Information for Owners of OID Debt Instruments, later. How to amend 2012 tax return Certificates of Deposit If you hold a bank certificate of deposit (CD) as a nominee, you must determine whether the CD has OID and any OID includible in the income of the owner. How to amend 2012 tax return You must file an information return showing the reportable interest and OID, if any, on the CD. How to amend 2012 tax return These rules apply whether or not you sold the CD to the owner. How to amend 2012 tax return Report OID on a CD in the same way as OID on other debt instruments. How to amend 2012 tax return See Short-Term Obligations Redeemed at Maturity and Long-Term Debt Instruments, earlier. How to amend 2012 tax return Bearer Bonds and Coupons If a coupon from a bearer bond is presented to you for collection before the bond matures, you generally must report the interest on Form 1099-INT. How to amend 2012 tax return However, do not report the interest if either of the following apply. How to amend 2012 tax return You hold the bond as a nominee for the true owner. How to amend 2012 tax return The payee is a foreign person. How to amend 2012 tax return See Payments to foreign person under Backup Withholding, later. How to amend 2012 tax return Because you cannot assume the presenter of the coupon also owns the bond, you should not report OID on the bond on Form 1099-OID. How to amend 2012 tax return The coupon may have been “stripped” (separated) from the bond and separately purchased. How to amend 2012 tax return However, if a long-term bearer bond on the OID list is presented to you for redemption upon call or maturity, you should prepare a Form 1099-OID showing the OID for that calendar year, as well as any coupon interest payments collected at the time of redemption. How to amend 2012 tax return Backup Withholding If you report OID on Form 1099-OID or interest on Form 1099-INT for a calendar year, you may be required to apply backup withholding to the reportable payment at a rate of 28%. How to amend 2012 tax return The backup withholding is deducted at the time a cash payment is made. How to amend 2012 tax return See Pub. How to amend 2012 tax return 1281, Backup Withholding for Missing and Incorrect Name/TIN(s), for more information. How to amend 2012 tax return Backup withholding generally applies in the following situations. How to amend 2012 tax return The payee does not give you a taxpayer identification number (TIN). How to amend 2012 tax return The IRS notifies you that the payee gave an incorrect TIN. How to amend 2012 tax return The IRS notifies you that the payee is subject to backup withholding due to payee underreporting. How to amend 2012 tax return For debt instruments acquired after 1983: The payee does not certify, under penalties of perjury, that he or she is not subject to backup withholding under (3), or The payee does not certify, under penalties of perjury, that the TIN given is correct. How to amend 2012 tax return However, for short-term discount obligations (other than government obligations), bearer bonds and coupons, and U. How to amend 2012 tax return S. How to amend 2012 tax return savings bonds, backup withholding applies only if the payee does not give you a TIN or gives you an obviously incorrect number for a TIN. How to amend 2012 tax return Short-term obligations. How to amend 2012 tax return   Backup withholding applies to OID on a short-term obligation only when the OID is paid at maturity. How to amend 2012 tax return However, backup withholding applies to any interest payable before maturity when the interest is paid or credited. How to amend 2012 tax return   If the owner of a short-term obligation at maturity is not the original owner and can establish the purchase price of the obligation, the amount subject to backup withholding must be determined by treating the purchase price as the issue price. How to amend 2012 tax return However, you can choose to disregard that price if it would require significant manual intervention in the computer or recordkeeping system used for the obligation. How to amend 2012 tax return If the purchase price of a listed obligation is not established or is disregarded, you must use the issue price shown in Section III. How to amend 2012 tax return Long-term obligations. How to amend 2012 tax return   If no cash payments are made on a long-term obligation before maturity, backup withholding applies only at maturity. How to amend 2012 tax return The amount subject to backup withholding is the OID includible in the owner's gross income for the calendar year when the obligation matures. How to amend 2012 tax return The amount to be withheld is limited to the cash paid. How to amend 2012 tax return Registered long-term obligations with cash payments. How to amend 2012 tax return   If a registered long-term obligation has cash payments before maturity, backup withholding applies when a cash payment is made. How to amend 2012 tax return The amount subject to backup withholding is the total of the qualified stated interest (defined earlier under Definitions) and OID includible in the owner's gross income for the calendar year when the payment is made. How to amend 2012 tax return If more than one cash payment is made during the year, the OID subject to withholding for the year must be allocated among the expected cash payments in the ratio that each bears to the total of the expected cash payments. How to amend 2012 tax return For any payment, the required withholding is limited to the cash paid. How to amend 2012 tax return Payee not the original owner. How to amend 2012 tax return   If the payee is not the original owner of the obligation, the OID subject to backup withholding is the OID includible in the gross income of all owners during the calendar year (without regard to any amount paid by the new owner at the time of transfer). How to amend 2012 tax return The amount subject to backup withholding at maturity of a listed obligation must be determined using the issue price shown in Section I. How to amend 2012 tax return Bearer long-term obligations with cash payments. How to amend 2012 tax return   If a bearer long-term obligation has cash payments before maturity, backup withholding applies when the cash payments are made. How to amend 2012 tax return For payments before maturity, the amount subject to withholding is the qualified stated interest (defined earlier under Definitions) includible in the owner's gross income for the calendar year. How to amend 2012 tax return For a payment at maturity, the amount subject to withholding is only the total of any qualified stated interest paid at maturity and the OID includible in the owner's gross income for the calendar year when the obligation matures. How to amend 2012 tax return The required withholding at maturity is limited to the cash paid. How to amend 2012 tax return Sales and redemptions. How to amend 2012 tax return   If you report the gross proceeds from a sale, exchange, or redemption of a debt instrument on Form 1099-B for a calendar year, you may be required to withhold 28% of the amount reported. How to amend 2012 tax return Backup withholding applies in the following situations. How to amend 2012 tax return The payee does not give you a TIN. How to amend 2012 tax return The IRS notifies you that the payee gave an incorrect TIN. How to amend 2012 tax return For debt instruments held in an account opened after 1983, the payee does not certify, under penalties of perjury, that the TIN given is correct. How to amend 2012 tax return Payments outside the United States to U. How to amend 2012 tax return S. How to amend 2012 tax return person. How to amend 2012 tax return   The requirements for backup withholding and information reporting apply to payments of OID and interest made outside the United States to a U. How to amend 2012 tax return S. How to amend 2012 tax return person, a controlled foreign corporation, or a foreign person at least 50% of whose income for the preceding 3-year period is effectively connected with the conduct of a U. How to amend 2012 tax return S. How to amend 2012 tax return trade or business. How to amend 2012 tax return Payments to foreign person. How to amend 2012 tax return   The following discussions explain the rules for backup withholding and information reporting on payments to foreign persons. How to amend 2012 tax return U. How to amend 2012 tax return S. How to amend 2012 tax return -source amount. How to amend 2012 tax return   Backup withholding and information reporting are not required for payments of U. How to amend 2012 tax return S. How to amend 2012 tax return -source OID, interest, or proceeds from a sale or redemption of an OID instrument if the payee has given you proof (generally the appropriate Form W-8 or an acceptable substitute) that the payee is a foreign person. How to amend 2012 tax return A U. How to amend 2012 tax return S. How to amend 2012 tax return resident is not a foreign person. How to amend 2012 tax return For proof of the payee's foreign status, you can rely on the appropriate Form W-8 or on documentary evidence for payments made outside the United States to an offshore account or, in case of broker proceeds, a sale effected outside the United States. How to amend 2012 tax return Receipt of the appropriate Form W-8 does not relieve you from information reporting and backup withholding if you actually know the payee is a U. How to amend 2012 tax return S. How to amend 2012 tax return person. How to amend 2012 tax return   For information about the 28% withholding tax that may apply to payments of U. How to amend 2012 tax return S. How to amend 2012 tax return -source OID or interest to foreign persons, see Publication 515. How to amend 2012 tax return Foreign-source amount. How to amend 2012 tax return   Backup withholding and information reporting are not required for payments of foreign-source OID and interest made outside the United States. How to amend 2012 tax return However, if the payments are made inside the United States, the requirements for backup withholding and information reporting will apply unless the payee has given you the appropriate Form W-8 or acceptable substitute as proof that the payee is a foreign person. How to amend 2012 tax return More information. How to amend 2012 tax return   For more information about backup withholding and information reporting on foreign-source amounts or payments to foreign persons, see Regulations section 1. How to amend 2012 tax return 6049-5. How to amend 2012 tax return Information for Owners of OID Debt Instruments This section is for persons who prepare their own tax returns. How to amend 2012 tax return It discusses the income tax rules for figuring and reporting OID on long-term debt instruments. How to amend 2012 tax return It also includes a similar discussion for stripped bonds and coupons, such as zero coupon bonds available through the Department of the Treasury's STRIPS program and government-sponsored enterprises such as the Resolution Funding Corporation. How to amend 2012 tax return However, the information provided does not cover every situation. How to amend 2012 tax return More information can be found in the regulations under sections 1271 through 1275 of the Internal Revenue Code. How to amend 2012 tax return Including OID in income. How to amend 2012 tax return   Generally, you include OID in income as it accrues each year, whether or not you receive any payments from the debt instrument issuer. How to amend 2012 tax return Exceptions. How to amend 2012 tax return   The rules for including OID in income as it accrues generally do not apply to the following debt instruments. How to amend 2012 tax return U. How to amend 2012 tax return S. How to amend 2012 tax return savings bonds. How to amend 2012 tax return Tax-exempt obligations. How to amend 2012 tax return (However, see Tax-Exempt Bonds and Coupons, later. How to amend 2012 tax return ) Obligations issued by individuals before March 2, 1984. How to amend 2012 tax return Loans of $10,000 or less between individuals who are not in the business of lending money. How to amend 2012 tax return (The dollar limit includes outstanding prior loans by the lender to the borrower. How to amend 2012 tax return ) This exception does not apply if a principal purpose of the loan is to avoid any federal tax. How to amend 2012 tax return   See chapter 1 of Publication 550 for information about the rules for these and other types of discounted debt instruments, such as short-term and market discount obligations. How to amend 2012 tax return Publication 550 also discusses rules for holders of REMIC interests and CDOs. How to amend 2012 tax return De minimis rule. How to amend 2012 tax return   You can treat OID as zero if the total OID on a debt instrument is less than one-fourth of 1% (. How to amend 2012 tax return 0025) of the stated redemption price at maturity multiplied by the number of full years from the date of original issue to maturity. How to amend 2012 tax return Debt instruments with de minimis OID are not listed in this publication. How to amend 2012 tax return There are special rules to determine the de minimis amount in the case of debt instruments that provide for more than one payment of principal. How to amend 2012 tax return Also, the de minimis rules generally do not apply to tax-exempt obligations. How to amend 2012 tax return Example 2. How to amend 2012 tax return You bought at issuance a 10-year debt instrument with a stated redemption price at maturity of $1,000, issued at $980 with OID of $20. How to amend 2012 tax return One-fourth of 1% of $1,000 (the stated redemption price) times 10 (the number of full years from the date of original issue to maturity) equals $25. How to amend 2012 tax return Under the de minimis rule, you can treat the OID as zero because the $20 discount is less than $25. How to amend 2012 tax return Example 3. How to amend 2012 tax return Assume the same facts as Example 2, except the debt instrument was issued at $950. How to amend 2012 tax return You must report part of the $50 OID each year because it is more than $25. How to amend 2012 tax return Choice to report all interest as OID. How to amend 2012 tax return   Generally, you can choose to treat all interest on a debt instrument acquired after April 3, 1994, as OID and include it in gross income by using the constant yield method. How to amend 2012 tax return See Constant yield method under Debt Instruments Issued After 1984, later, for more information. How to amend 2012 tax return   For this choice, interest includes stated interest, acquisition discount, OID, de minimis OID, market discount, de minimis market discount, and unstated interest, as adjusted by any amortizable bond premium or acquisition premium. How to amend 2012 tax return For more information, see Regulations section 1. How to amend 2012 tax return 1272-3. How to amend 2012 tax return Purchase after date of original issue. How to amend 2012 tax return   A debt instrument you purchased after the date of original issue may have premium, acquisition premium, or market discount. How to amend 2012 tax return If so, the OID reported to you on Form 1099-OID may have to be adjusted. How to amend 2012 tax return For more information, see Showing an OID adjustment under How To Report OID, later. How to amend 2012 tax return The following rules generally do not apply to contingent payment debt instruments. How to amend 2012 tax return Adjustment for premium. How to amend 2012 tax return   If your debt instrument (other than an inflation-indexed debt instrument) has premium, do not report any OID as ordinary income. How to amend 2012 tax return Your adjustment is the total OID shown on your Form 1099-OID. How to amend 2012 tax return Adjustment for acquisition premium. How to amend 2012 tax return   If your debt instrument has acquisition premium, reduce the OID you report. How to amend 2012 tax return Your adjustment is the difference between the OID shown on your Form 1099-OID and the reduced OID amount figured using the rules explained later under Figuring OID on Long-Term Debt Instruments. How to amend 2012 tax return Adjustment for market discount. How to amend 2012 tax return   If your debt instrument has market discount that you choose to include in income currently, increase the OID you report. How to amend 2012 tax return Your adjustment is the accrued market discount for the year. How to amend 2012 tax return See Market Discount Bonds in chapter 1 of Publication 550 for information on how to figure accrued market discount and include it in your income currently and for other information about market discount bonds. How to amend 2012 tax return If you choose to use the constant yield method to figure accrued market discount, also see Figuring OID on Long-Term Debt Instruments, later. How to amend 2012 tax return The constant yield method of figuring accrued OID, explained in those discussions under Constant yield method, is also used to figure accrued market discount. How to amend 2012 tax return For more information concerning premium or market discount on an inflation-indexed debt instrument, see Regulations section 1. How to amend 2012 tax return 1275-7. How to amend 2012 tax return Sale, exchange, or redemption. How to amend 2012 tax return   Generally, you treat your gain or loss from the sale, exchange, or redemption of a discounted debt instrument as a capital gain or loss if you held the debt instrument as a capital asset. How to amend 2012 tax return If you sold the debt instrument through a broker, you should receive Form 1099-B or an equivalent statement from the broker. How to amend 2012 tax return Use the Form 1099-B or other statement and your brokerage statements to complete Form 8949, and Schedule D (Form 1040). How to amend 2012 tax return   Your gain or loss is the difference between the amount you realized on the sale, exchange, or redemption and your basis in the debt instrument. How to amend 2012 tax return Your basis, generally, is your cost increased by the OID you have included in income each year you held it. How to amend 2012 tax return In general, to determine your gain or loss on a tax-exempt bond, figure your basis in the bond by adding to your cost the OID you would have included in income if the bond had been taxable. How to amend 2012 tax return   See chapter 4 of Publication 550 for more information about the tax treatment of the sale or redemption of discounted debt instruments. How to amend 2012 tax return Example 4. How to amend 2012 tax return Larry, a calendar year taxpayer, bought a corporate debt instrument at original issue for $86,235. How to amend 2012 tax return 00 on November 1 of Year 1. How to amend 2012 tax return The 15-year debt instrument matures on October 31 of Year 16 at a stated redemption price of $100,000. How to amend 2012 tax return The debt instrument provides for semiannual payments of interest at 10%. How to amend 2012 tax return Assume the debt instrument is a capital asset in Larry's hands. How to amend 2012 tax return The debt instrument has $13,765. How to amend 2012 tax return 00 of OID ($100,000 stated redemption price at maturity minus $86,235. How to amend 2012 tax return 00 issue price). How to amend 2012 tax return Larry sold the debt instrument for $90,000 on November 1 of Year 4. How to amend 2012 tax return Including the OID he will report for the period he held the debt instrument in Year 4, Larry has included $4,556. How to amend 2012 tax return 00 of OID in income and has increased his basis by that amount to $90,791. How to amend 2012 tax return 00. How to amend 2012 tax return Larry has realized a loss of $791. How to amend 2012 tax return 00. How to amend 2012 tax return All of Larry's loss is capital loss. How to amend 2012 tax return Form 1099-OID The issuer of the debt instrument (or your broker, if you purchased or held the debt instrument through a broker) should give you a copy of Form 1099-OID or a similar statement if the accrued OID for the calendar year is $10 or more and the term of the debt instrument is more than 1 year. How to amend 2012 tax return Form 1099-OID shows all OID income in box 1 except OID on a U. How to amend 2012 tax return S. How to amend 2012 tax return Treasury obligation, which is shown in box 8. How to amend 2012 tax return It also shows, in box 2, any qualified stated interest you must include in income. How to amend 2012 tax return (However, any qualified stated interest on Treasury inflation-protected securities can be reported on Form 1099-INT in box 3. How to amend 2012 tax return ) A copy of Form 1099-OID will be sent to the IRS. How to amend 2012 tax return Do not attach your copy to your tax return. How to amend 2012 tax return Keep it for your records. How to amend 2012 tax return If you are required to file a tax return and you receive Form 1099-OID showing taxable amounts, you must report these amounts on your return. How to amend 2012 tax return A 20% accuracy-related penalty may be charged for underpayment of tax due to either negligence or disregard of rules and regulations or substantial understatement of tax. How to amend 2012 tax return Form 1099-OID not received. How to amend 2012 tax return   If you held an OID debt instrument for a calendar year but did not receive a Form 1099-OID, refer to the discussions under Figuring OID on Long-Term Debt Instruments, later, for information on the OID you must report. How to amend 2012 tax return Refiguring OID. How to amend 2012 tax return   You must refigure the OID shown on Form 1099-OID, in box 1 or box 8, to determine the proper amount to include in income if one of the following applies. How to amend 2012 tax return You bought the debt instrument at a premium or at an acquisition premium. How to amend 2012 tax return The debt instrument is a stripped bond or coupon (including zero coupon bonds backed by U. How to amend 2012 tax return S. How to amend 2012 tax return Treasury securities). How to amend 2012 tax return The debt instrument is a contingent payment or inflation-indexed debt instrument. How to amend 2012 tax return See the discussions under Figuring OID on Long-Term Debt Instruments or Figuring OID on Stripped Bonds and Coupons, later, for the specific computations. How to amend 2012 tax return Refiguring interest. How to amend 2012 tax return   If you disposed of a debt instrument or acquired it from another holder between interest dates, see the discussion under Bonds Sold Between Interest Dates in chapter 1 of Publication 550 for information about refiguring the interest shown on Form 1099-OID in box 2. How to amend 2012 tax return Nominee. How to amend 2012 tax return   If you are the holder of an OID debt instrument and you receive a Form 1099-OID that shows your taxpayer identification number and includes amounts belonging to another person, you are considered a “nominee. How to amend 2012 tax return ” You must file another Form 1099-OID for each actual owner, showing the OID for the owner. How to amend 2012 tax return Show the owner of the debt instrument as the “recipient” and you as the “payer. How to amend 2012 tax return ”   Complete Form 1099-OID and Form 1096 and file the forms with the Internal Revenue Service Center for your area. How to amend 2012 tax return You must also give a copy of the Form 1099-OID to the actual owner. How to amend 2012 tax return However, you are not required to file a nominee return to show amounts belonging to your spouse. How to amend 2012 tax return See the Form 1099 instructions for more information. How to amend 2012 tax return   When preparing your tax return, follow the instructions under Showing an OID adjustment in the next discussion. How to amend 2012 tax return How To Report OID Generally, you report your taxable interest and OID income on the interest line of Form 1040EZ, Form 1040A, or Form 1040. How to amend 2012 tax return Form 1040 or Form 1040A required. How to amend 2012 tax return   You must use Form 1040 or Form 1040A (you cannot use Form 1040EZ) under either of the following conditions. How to amend 2012 tax return You received a Form 1099-OID as a nominee for the actual owner. How to amend 2012 tax return Your total interest and OID income for the year was more than $1,500. How to amend 2012 tax return Form 1040 required. How to amend 2012 tax return   You must use Form 1040 (you cannot use Form 1040A or Form 1040EZ) if you are reporting more or less OID than the amount shown on Form 1099-OID, other than because you are a nominee. How to amend 2012 tax return For example, if you paid a premium or an acquisition premium when you purchased the debt instrument, you must use Form 1040 because you will report less OID than shown on Form 1099-OID. How to amend 2012 tax return Also, you must use Form 1040 if you were charged an early withdrawal penalty. How to amend 2012 tax return Where to report. How to amend 2012 tax return   List each payer's name (if a brokerage firm gave you a Form 1099, list the brokerage firm as the payer) and the amount received from each payer on Form 1040A, Schedule B, Part I, line 1, or Form 1040, Schedule B, line 1. How to amend 2012 tax return Include all OID and periodic interest shown on any Form 1099-OID, boxes 1, 2, and 8, you received for the tax year. How to amend 2012 tax return Also include any other OID and interest income for which you did not receive a Form 1099. How to amend 2012 tax return Showing an OID adjustment. How to amend 2012 tax return   If you use Form 1040 to report more or less OID than shown on Form 1099-OID, list the full OID on Schedule B, Part I, line 1, and follow the instructions under 1 or 2, next. How to amend 2012 tax return   If you use Form 1040A to report the OID shown on a Form 1099-OID you received as a nominee for the actual owner, list the full OID on Schedule B, Part I, line 1 and follow the instructions under 1. How to amend 2012 tax return If the OID, as adjusted, is less than the amount shown on Form 1099-OID, show the adjustment as follows. How to amend 2012 tax return Under your last entry on line 1, subtotal all interest and OID income listed on line 1. How to amend 2012 tax return Below the subtotal, write “Nominee Distribution” or “OID Adjustment” and show the OID you are not required to report. How to amend 2012 tax return Subtract that OID from the subtotal and enter the result on line 2. How to amend 2012 tax return If the OID, as adjusted, is more than the amount shown on Form 1099-OID, show the adjustment as follows. How to amend 2012 tax return Under your last entry on line 1, subtotal all interest and OID income listed on line 1. How to amend 2012 tax return Below the subtotal, write “OID Adjustment” and show the additional OID. How to amend 2012 tax return Add that OID to the subtotal and enter the result on line 2. How to amend 2012 tax return Figuring OID on Long-Term Debt Instruments How you figure the OID on a long-term debt instrument depends on the date it was issued. How to amend 2012 tax return It also may depend on the type of the debt instrument. How to amend 2012 tax return There are different rules for each of the following debt instruments. How to amend 2012 tax return Corporate debt instruments issued after 1954 and before May 28, 1969, and government debt instruments issued after 1954 and before July 2, 1982. How to amend 2012 tax return Corporate debt instruments issued after May 27, 1969, and before July 2, 1982. How to amend 2012 tax return Debt instruments issued after July 1, 1982, and before 1985. How to amend 2012 tax return Debt instruments issued after 1984 (other than debt instruments described in (5) and (6)). How to amend 2012 tax return Contingent payment debt instruments issued after August 12, 1996. How to amend 2012 tax return Inflation-indexed debt instruments (including Treasury inflation-protected securities) issued after January 5, 1997. How to amend 2012 tax return Zero coupon bonds. How to amend 2012 tax return   The rules for figuring OID on zero coupon bonds backed by U. How to amend 2012 tax return S. How to amend 2012 tax return Treasury securities are discussed under Figuring OID on Stripped Bonds and Coupons, later. How to amend 2012 tax return Corporate Debt Instruments Issued After 1954 and Before May 28, 1969, and Government Debt Instruments Issued After 1954 and Before July 2, 1982 If you hold these debt instruments as capital assets, you include OID in income only in the year the debt instrument is sold, exchanged, or redeemed, and only if you have a gain. How to amend 2012 tax return The OID, which is taxed as ordinary income, generally equals the following amount. How to amend 2012 tax return   number of full months you held the debt instrument  number of full months from date of original issue to date of maturity X original issue discount The balance of the gain is capital gain. How to amend 2012 tax return If there is a loss on the sale of the debt instrument, the entire loss is a capital loss and no OID is reported. How to amend 2012 tax return Corporate Debt Instruments Issued After May 27, 1969, and Before July 2, 1982 If you hold these debt instruments as capital assets, you must include part of the OID in income each year you own the debt instruments. How to amend 2012 tax return For information about showing the correct OID on your tax return, see the discussion under How To Report OID, earlier. How to amend 2012 tax return Your basis in the debt instrument is increased by the OID you include in income. How to amend 2012 tax return Form 1099-OID. How to amend 2012 tax return   You should receive a Form 1099-OID showing OID for the part of the year you held the debt instrument. How to amend 2012 tax return However, if you paid an acquisition premium, you may need to refigure the OID to report on your tax return. How to amend 2012 tax return See Reduction for acquisition premium, later. How to amend 2012 tax return If you held an OID debt instrument in a calendar year but did not receive a Form 1099-OID, see Form 1099-OID not received, immediately below, and refer to Section I-A available at www. How to amend 2012 tax return irs. How to amend 2012 tax return gov/pub1212 by clicking the link under Recent Developments. How to amend 2012 tax return Form 1099-OID not received. How to amend 2012 tax return    The OID listed is for each $1,000 of redemption price. How to amend 2012 tax return You must adjust the listed amount if your debt instrument has a different principal amount. How to amend 2012 tax return For example, if you have a debt instrument with a $500 principal amount, use one-half the listed amount to figure your OID. How to amend 2012 tax return   If you held the debt instrument the entire year, use the OID shown in Section I-A for a calendar year. How to amend 2012 tax return (If your debt instrument is not listed in Section I-A, consult the issuer for information about the issue price and the OID that accrued for that year. How to amend 2012 tax return ) If you did not hold the debt instrument the entire year, figure your OID using the following method. How to amend 2012 tax return Divide the OID shown by 12. How to amend 2012 tax return Multiply the result in (1) by the number of complete and partial months (for example, 6½ months) you held the debt instrument during a calendar year. How to amend 2012 tax return This is the OID to include in income unless you paid an acquisition premium. How to amend 2012 tax return The reduction for acquisition premium is discussed next. How to amend 2012 tax return Reduction for acquisition premium. How to amend 2012 tax return   If you bought the debt instrument at an acquisition premium, figure the OID to include in income as follows. How to amend 2012 tax return Divide the total OID on the debt instrument by the number of complete months, and any part of a month, from the date of original issue to the maturity date. How to amend 2012 tax return This is the monthly OID. How to amend 2012 tax return Subtract from your cost the issue price and the accumulated OID from the date of issue to the date of purchase. How to amend 2012 tax return (If the result is zero or less, stop here. How to amend 2012 tax return You did not pay an acquisition premium. How to amend 2012 tax return ) Divide the amount figured in (2) by the number of complete months, and any part of a month, from the date of your purchase to the maturity date. How to amend 2012 tax return Subtract the amount figured in (3) from the amount figured in (1). How to amend 2012 tax return This is the OID to include in income for each month you hold the debt instrument during the year. How to amend 2012 tax return Transfers during the month. How to amend 2012 tax return   If you buy or sell a debt instrument on any day other than the same day of the month as the date of original issue, the ratable monthly portion of OID for the month of sale is divided between the seller and the buyer according to the number of days each held the debt instrument. How to amend 2012 tax return Your holding period for this purpose begins the day you acquire the debt instrument and ends the day before you dispose of it. How to amend 2012 tax return Debt Instruments Issued After July 1, 1982, and Before 1985 If you hold these debt instruments as capital assets, you must include part of the OID in income each year you own the debt instruments and increase your basis by the amount included. How to amend 2012 tax return For information about showing the correct OID on your tax return, see How To Report OID, earlier. How to amend 2012 tax return Form 1099-OID. How to amend 2012 tax return   You should receive a Form 1099-OID showing OID for the part of the year you held the debt instrument. How to amend 2012 tax return However, if you paid an acquisition premium, you may need to refigure the OID to report on your tax return. How to amend 2012 tax return See Constant yield method and the discussions on acquisition premium that follow, later. How to amend 2012 tax return If you held an OID debt instrument in a calendar year but did not receive a Form 1099-OID, see Form 1099-OID not received, immediately below, and refer to Section I-A available at www. How to amend 2012 tax return irs. How to amend 2012 tax return gov/pub1212 by clicking the link under Recent Developments. How to amend 2012 tax return Form 1099-OID not received. How to amend 2012 tax return    The OID listed is for each $1,000 of redemption price. How to amend 2012 tax return You must adjust the listed amount if your debt instrument has a different principal amount. How to amend 2012 tax return For example, if you have a debt instrument with a $500 principal amount, use one-half the listed amount to figure your OID. How to amend 2012 tax return   If you held the debt instrument the entire year, use the OID shown in Section I-A. How to amend 2012 tax return (If your instrument is not listed in Section I-A, consult the issuer for information about the issue price, the yield to maturity, and the OID that accrued for that year. How to amend 2012 tax return ) If you did not hold the debt instrument the entire year, figure your OID using either of the following methods. How to amend 2012 tax return Method 1. How to amend 2012 tax return    Divide the total OID for a calendar year by 365 (366 for leap years). How to amend 2012 tax return Multiply the result in (1) by the number of days you held the debt instrument during that particular year. How to amend 2012 tax return  This computation is an approximation and may result in a slightly higher OID than Method 2. How to amend 2012 tax return Method 2. How to amend 2012 tax return    Look up the daily OID for the first accrual period you held the debt instrument during a calendar year. How to amend 2012 tax return (See Accrual period under Constant yield method, next. How to amend 2012 tax return ) Multiply the daily OID by the number of days you held the debt instrument during that accrual period. How to amend 2012 tax return If you held the debt instrument for part of both accrual periods, repeat (1) and (2) for the second accrual period. How to amend 2012 tax return Add the results of (2) and (3). How to amend 2012 tax return This is the OID to include in income, unless you paid an acquisition premium. How to amend 2012 tax return (The reduction for acquisition premium is discussed later. How to amend 2012 tax return ) Constant yield method. How to amend 2012 tax return   This discussion shows how to figure OID on debt instruments issued after July 1, 1982, and before 1985, using a constant yield method. How to amend 2012 tax return OID is allocated over the life of the debt instrument through adjustments to the issue price for each accrual period. How to amend 2012 tax return   Figure the OID allocable to any accrual period as follows. How to amend 2012 tax return Multiply the adjusted issue price at the beginning of the accrual period by the debt instrument's yield to maturity. How to amend 2012 tax return Subtract from the result in (1) any qualified stated interest allocable to the accrual period. How to amend 2012 tax return Accrual period. How to amend 2012 tax return   An accrual period for any OID debt instrument issued after July 1, 1982, and before 1985 is each 1-year period beginning on the date of the issue of the obligation and each anniversary thereafter, or the shorter period to maturity for the last accrual period. How to amend 2012 tax return Your tax year will usually include parts of two accrual periods. How to amend 2012 tax return Daily OID. How to amend 2012 tax return   The OID for any accrual period is allocated equally to each day in the accrual period. How to amend 2012 tax return You must include in income the sum of the OID amounts for each day you hold the debt instrument during the year. How to amend 2012 tax return If your tax year includes parts of two or more accrual periods, you must include the proper daily OID amounts for each accrual period. How to amend 2012 tax return Figuring daily OID. How to amend 2012 tax return   The daily OID for the initial accrual period is figured using the following formula. How to amend 2012 tax return   (ip × ytm) − qsi     p   ip = issue price ytm = yield to maturity qsi = qualified stated interest p = number of days in accrual period         The daily OID for subsequent accrual periods is figured the same way except the adjusted issue price at the beginning of each period is used in the formula instead of the issue price. How to amend 2012 tax return Reduction for acquisition premium on debt instruments purchased before July 19, 1984. How to amend 2012 tax return   If you bought the debt instrument at an acquisition premium before July 19, 1984, figure the OID includible in income by reducing the daily OID by the daily acquisition premium. How to amend 2012 tax return Figure the daily acquisition premium by dividing the total acquisition premium by the number of days in the period beginning on your purchase date and ending on the day before the date of maturity. How to amend 2012 tax return Reduction for acquisition premium on debt instruments purchased after July 18, 1984. How to amend 2012 tax return   If you bought the debt instrument at an acquisition premium after July 18, 1984, figure the OID includible in income by reducing the daily OID by the daily acquisition premium. How to amend 2012 tax return However, the method of figuring the daily acquisition premium is different from the method described in the preceding discussion. How to amend 2012 tax return To figure the daily acquisition premium under this method, multiply the daily OID by the following fraction. How to amend 2012 tax return The numerator is the acquisition premium. How to amend 2012 tax return The denominator is the total OID remaining for the debt instrument after your purchase date. How to amend 2012 tax return Section I-A is available at www. How to amend 2012 tax return irs. How to amend 2012 tax return gov/pub1212 and clicking the link under Recent Developments. How to amend 2012 tax return Using Section I-A to figure accumulated OID. How to amend 2012 tax return   If you bought your corporate debt instrument in a calendar year or the subsequent year, you can figure the accumulated OID to the date of purchase by adding the following amounts. How to amend 2012 tax return The amount from the “Total OID to January 1, YYYY” column for your debt instrument. How to amend 2012 tax return The OID from January 1 of a calendar year to the date of purchase, figured as follows. How to amend 2012 tax return Multiply the daily OID for the first accrual period in the calendar year by the number of days from January 1 to the date of purchase, or the end of the accrual period if the debt instrument was purchased in the second or third accrual period. How to amend 2012 tax return Multiply the daily OID for each subsequent accrual period by the number of days in the period to the date of purchase or the end of the accrual period, whichever applies. How to amend 2012 tax return Add the amounts figured in (2a) and (2b). How to amend 2012 tax return Debt Instruments Issued After 1984 If you hold debt instruments issued after 1984, you must report part of the OID in gross income each year that you own the debt instruments. How to amend 2012 tax return You must include the OID in gross income whether or not you hold the debt instrument as a capital asset. How to amend 2012 tax return Your basis in the debt instrument is increased by the OID you include in income. How to amend 2012 tax return For information about showing the correct OID on your tax return, see How To Report OID, earlier. How to amend 2012 tax return Form 1099-OID. How to amend 2012 tax return   You should receive a Form 1099-OID showing OID for the part of a calendar year you held the debt instrument. How to amend 2012 tax return However, if you paid an acquisition premium, you may need to refigure the OID to report on your tax return. How to amend 2012 tax return See Constant yield method and Reduction for acquisition premium, later. How to amend 2012 tax return   You may also need to refigure the OID for a contingent payment or inflation-indexed debt instrument on which the amount reported on Form 1099-OID is inaccurate. How to amend 2012 tax return See Contingent Payment Debt Instruments or Inflation-Indexed Debt Instruments, later. How to amend 2012 tax return If you held an OID debt instrument in a calendar year but did not receive a Form 1099-OID, see Form 1099-OID not received, immediately below, and refer to Section I-B available at www. How to amend 2012 tax return irs. How to amend 2012 tax return gov/pub1212 by clicking the link under Recent Developments. How to amend 2012 tax return Form 1099-OID not received. How to amend 2012 tax return   The OID listed is for each $1,000 of redemption price. How to amend 2012 tax return You must adjust the listed amount if your debt instrument has a different principal amount. How to amend 2012 tax return For example, if you have a debt instrument with a $500 principal amount, use one-half the listed amount to figure your OID. How to amend 2012 tax return   Use the OID shown in Section I-B for a calendar year if you held the debt instrument the entire year. How to amend 2012 tax return (If your debt instrument is not listed in Section I-B, consult the issuer for information about the issue price, the yield to maturity, and the OID that accrued for that year. How to amend 2012 tax return ) If you did not hold the debt instrument the entire year, figure your OID as follows. How to amend 2012 tax return Look up the daily OID for the first accrual period in which you held the debt instrument during a calendar year. How to amend 2012 tax return (See Accrual period under Constant yield method, later. How to amend 2012 tax return ) Multiply the daily OID by the number of days you held the debt instrument during that accrual period. How to amend 2012 tax return Repeat (1) and (2) for any remaining accrual periods in which you held the debt instrument. How to amend 2012 tax return Add the results of (2) and (3). How to amend 2012 tax return This is the OID to include in income for that year, unless you paid an acquisition premium. How to amend 2012 tax return (The reduction for acquisition premium is discussed later. How to amend 2012 tax return ) Tax-exempt bond. How to amend 2012 tax return   If you own a tax-exempt bond, figure your basis in the bond by adding to your cost the OID you would have included in income if the bond had been taxable. How to amend 2012 tax return You need to make this adjustment to determine if you have a gain or loss on a later disposition of the bond. How to amend 2012 tax return In general, use the rules that follow to determine your OID. How to amend 2012 tax return Constant yield method. How to amend 2012 tax return   This discussion shows how to figure OID on debt instruments issued after 1984 using a constant yield method. How to amend 2012 tax return (The special rules that apply to contingent payment debt instruments and inflation-indexed debt instruments are explained later. How to amend 2012 tax return ) OID is allocated over the life of the debt instrument through adjustments to the issue price for each accrual period. How to amend 2012 tax return   Figure the OID allocable to any accrual period as follows. How to amend 2012 tax return Multiply the adjusted issue price at the beginning of the accrual period by a fraction. How to amend 2012 tax return The numerator of the fraction is the debt instrument's yield to maturity and the denominator is the number of accrual periods per year. How to amend 2012 tax return The yield must be stated appropriately taking into account the length of the particular accrual period. How to amend 2012 tax return Subtract from the result in (1) any qualified stated interest allocable to the accrual period. How to amend 2012 tax return Accrual period. How to amend 2012 tax return   For debt instruments issued after 1984 and before April 4, 1994, an accrual period is each 6-month period that ends on the day that corresponds to the stated maturity date of the debt instrument or the date 6 months before that date. How to amend 2012 tax return For example, a debt instrument maturing on March 31 has accrual periods that end on September 30 and March 31 of each calendar year. How to amend 2012 tax return Any short period is included as the first accrual period. How to amend 2012 tax return   For debt instruments issued after April 3, 1994, accrual periods may be of any length and may vary in length over the term of the debt instrument, as long as each accrual period is no longer than 1 year and all payments are made on the first or last day of an accrual period. How to amend 2012 tax return However, the OID listed for these debt instruments in Section I-B has been figured using 6-month accrual periods. How to amend 2012 tax return Daily OID. How to amend 2012 tax return   The OID for any accrual period is allocated equally to each day in the accrual period. How to amend 2012 tax return Figure the amount to include in income by adding the OID for each day you hold the debt instrument during the year. How to amend 2012 tax return Since your tax year will usually include parts of two or more accrual periods, you must include the proper daily OID for each accrual period. How to amend 2012 tax return If your debt instrument has 6-month accrual periods, your tax year will usually include one full 6-month accrual period and parts of two other 6-month periods. How to amend 2012 tax return Figuring daily OID. How to amend 2012 tax return   The daily OID for the initial accrual period is figured using the following formula. How to amend 2012 tax return   (ip × ytm/n) − qsi     p   ip = issue price ytm = yield to maturity n = number of accrual periods in 1 year qsi = qualified stated interest p = number of days in accrual period       The daily OID for subsequent accrual periods is figured the same way except the adjusted issue price at the beginning of each period is used in the formula instead of the issue price. How to amend 2012 tax return Example 5. How to amend 2012 tax return On January 1 of Year 1, you bought a 15-year, 10% debt instrument of A Corporation at original issue for $86,235. How to amend 2012 tax return 17. How to amend 2012 tax return According to the prospectus, the debt instrument matures on December 31 of Year 15 at a stated redemption price of $100,000. How to amend 2012 tax return The yield to maturity is 12%, compounded semiannually. How to amend 2012 tax return The debt instrument provides for qualified stated interest payments of $5,000 on June 30 and December 31 of each calendar year. How to amend 2012 tax return The accrual periods are the 6-month periods ending on each of these dates. How to amend 2012 tax return The number of days for the first accrual period (January 1 through June 30) is 181 days (182 for leap years). How to amend 2012 tax return The daily OID for the first accrual period is figured as follows. How to amend 2012 tax return   ($86,235. How to amend 2012 tax return 17 x . How to amend 2012 tax return 12/2) – $5,000     181 days     = $174. How to amend 2012 tax return 11020 = $. How to amend 2012 tax return 96193   181           The adjusted issue price at the beginning of the second accrual period is the issue price plus the OID previously includible in income ($86,235. How to amend 2012 tax return 17 + $174. How to amend 2012 tax return 11), or $86,409. How to amend 2012 tax return 28. How to amend 2012 tax return The number of days for the second accrual period (July 1 through December 31) is 184 days. How to amend 2012 tax return The daily OID for the second accrual period is figured as follows. How to amend 2012 tax return   ($86,409. How to amend 2012 tax return 28 x . How to amend 2012 tax return 12/2) – $5,000     184 days     = $184. How to amend 2012 tax return 55681 = $1. How to amend 2012 tax return 00303   184 Since the first and second accrual periods coincide exactly with your tax year, you include in income for Year 1 the OID allocable to the first two accrual periods, $174. How to amend 2012 tax return 11 ($. How to amend 2012 tax return 95665 × 182 days) plus $184. How to amend 2012 tax return 56 ($1. How to amend 2012 tax return 00303 × 184 days), or $358. How to amend 2012 tax return 67. How to amend 2012 tax return Add the OID to the $10,000 interest you report on your income tax return for Year 1. How to amend 2012 tax return Example 6. How to amend 2012 tax return Assume the same facts as in Example 5, except that you bought the debt instrument at original issue on May 1 of Year 1, with a maturity date of April 30, Year 16. How to amend 2012 tax return Also, the interest payment dates are October 31 and April 30 of each calendar year. How to amend 2012 tax return The accrual periods are the 6-month periods ending on each of these dates. How to amend 2012 tax return The number of days for the first accrual period (May 1 through October 31) is 184 days. How to amend 2012 tax return The daily OID for the first accrual period is figured as follows. How to amend 2012 tax return   ($86,235. How to amend 2012 tax return 17 x . How to amend 2012 tax return 12/2) – $5,000     184 days     = $174. How to amend 2012 tax return 11020 = $. How to amend 2012 tax return 94625   184           The number of days for the second accrual period (November 1 through April 30) is 181 days (182 for leap years). How to amend 2012 tax return The daily OID for the second accrual period is figured as follows. How to amend 2012 tax return   ($86,409. How to amend 2012 tax return 28 x . How to amend 2012 tax return 12/2) – $5,000     181 days     = $184. How to amend 2012 tax return 55681 = $1. How to amend 2012 tax return 01965   181 If you hold the debt instrument through the end of Year 1, you must include $236. How to amend 2012 tax return 31 of OID in income. How to amend 2012 tax return This is $174. How to amend 2012 tax return 11 ($. How to amend 2012 tax return 94625 × 184 days) for the period May 1 through October 31 plus $62. How to amend 2012 tax return 20 ($1. How to amend 2012 tax return 01965 × 61 days) for the period November 1 through December 31. How to amend 2012 tax return The OID is added to the $5,000 interest income paid on October 31 of Year 1. How to amend 2012 tax return Your basis in the debt instrument is increased by the OID you include in income. How to amend 2012 tax return On January 1 of Year 2, your basis in the A Corporation debt instrument is $86,471. How to amend 2012 tax return 48 ($86,235. How to amend 2012 tax return 17 + $236. How to amend 2012 tax return 31). How to amend 2012 tax return Short first accrual period. How to amend 2012 tax return   You may have to make adjustments if a debt instrument has a short first accrual period. How to amend 2012 tax return For example, a debt instrument with 6-month accrual periods that is issued on February 15 and matures on October 31 has a short first accrual period that ends April 30. How to amend 2012 tax return (The remaining accrual periods begin on May 1 and November 1. How to amend 2012 tax return ) For this short period, figure the daily OID as described earlier, but adjust the yield for the length of the short accrual period. How to amend 2012 tax return You may use any reasonable compounding method in determining OID for a short period. How to amend 2012 tax return Examples of reasonable compounding methods include continuous compounding and monthly compounding (that is, simple interest within a month). How to amend 2012 tax return Consult your tax advisor for more information about making this computation. How to amend 2012 tax return   The OID for the final accrual period is the difference between the amount payable at maturity (other than a payment of qualified stated interest) and the adjusted issue price at the beginning of the final accrual period. How to amend 2012 tax return Reduction for acquisition premium. How to amend 2012 tax return   If you bought the debt instrument at an acquisition premium, figure the OID includible in income by reducing the daily OID by the daily acquisition premium. How to amend 2012 tax return To figure the daily acquisition premium, multiply the daily OID by the following fraction. How to amend 2012 tax return The numerator is the acquisition premium. How to amend 2012 tax return The denominator is the total OID remaining for the debt instrument after your purchase date. How to amend 2012 tax return Example 7. How to amend 2012 tax return Assume the same facts as in Example 6, except that you bought the debt instrument on November 1 of Year 1 for $87,000, after its original issue on May 1 of Year 1. How to amend 2012 tax return The adjusted issue price on November 1 of Year 1 is $86,409. How to amend 2012 tax return 28 ($86,235. How to amend 2012 tax return 17 + $174. How to amend 2012 tax return 11). How to amend 2012 tax return In this case, you paid an acquisition premium of $590. How to amend 2012 tax return 72 ($87,000 − $86,409. How to amend 2012 tax return 28). How to amend 2012 tax return The daily OID for the accrual period November 1 through April 30, reduced for the acquisition premium, is figured as follows. How to amend 2012 tax return 1) Daily OID on date of purchase (2nd accrual period) $1. How to amend 2012 tax return 01965*  2)  Acquisition premium $590. How to amend 2012 tax return 72    3)  Total OID remaining after purchase date ($13,764. How to amend 2012 tax return 83 − $174. How to amend 2012 tax return 11) 13,590. How to amend 2012 tax return 72   4) Line 2 ÷ line 3 . How to amend 2012 tax return 04346  5)  Line 1 × line 4 . How to amend 2012 tax return 04432  6)  Daily OID reduced for the acquisition premium. How to amend 2012 tax return Line 1 − line 5 $0. How to amend 2012 tax return 97533  * As shown in Example 6. How to amend 2012 tax return The total OID to include in income for Year 1 is $59. How to amend 2012 tax return 50 ($. How to amend 2012 tax return 97533 × 61 days). How to amend 2012 tax return Contingent Payment Debt Instruments This discussion shows how to figure OID on a contingent payment debt instrument issued after August 12, 1996, that was issued for cash or publicly traded property. How to amend 2012 tax return In general, a contingent payment debt instrument provides for one or more payments that are contingent as to timing or amount. How to amend 2012 tax return If you hold a contingent payment bond, you must report OID as it accrues each year. How to amend 2012 tax return Because the actual payments on a contingent payment debt instrument cannot be known in advance, issuers and holders cannot use the constant yield method (discussed earlier under Debt Instruments Issued After 1984) without making certain assumptions about the payments on the debt instrument. How to amend 2012 tax return To figure OID accruals on contingent payment debt instruments, holders and issuers must use the noncontingent bond method. How to amend 2012 tax return Noncontingent bond method. How to amend 2012 tax return    Under this method, the issuer must compute a comparable yield for the debt instrument and, based on this yield, construct a projected payment schedule for the instrument, which includes a projected fixed amount for each contingent payment. How to amend 2012 tax return In general, holders and issuers accrue OID on this projected payment schedule using the constant yield method that applies to fixed payment debt instruments. How to amend 2012 tax return When a contingent payment differs from the projected fixed amount, the holders and issuers make adjustments to their OID accruals. How to amend 2012 tax return If the actual contingent payment is larger than expected, both the issuer and the holder increase their OID accruals. How to amend 2012 tax return If the actual contingent payment is smaller than expected, holders and issuers generally decrease their OID accruals. How to amend 2012 tax return Form 1099-OID. How to amend 2012 tax return   The amount shown on Form 1099-OID in box 1 you receive for a contingent payment debt instrument may not be the correct amount to include in income. How to amend 2012 tax return For example, the amount may not be correct if the contingent payment was different from the projected amount. How to amend 2012 tax return If the amount in box 1 is not correct, you must figure the OID to report on your return under the following rules. How to amend 2012 tax return For information on showing an OID adjustment on your tax return, see How To Report OID, earlier. How to amend 2012 tax return Figuring OID. How to amend 2012 tax return   To figure OID on a contingent payment debt instrument, you need to know the “comparable yield” and “projected payment schedule” of the debt instrument. How to amend 2012 tax return The issuer must make these available to you. How to amend 2012 tax return Comparable yield. How to amend 2012 tax return   The comparable yield generally is the yield at which the issuer would issue a fixed rate debt instrument with terms and conditions similar to those of the contingent payment debt instrument. How to amend 2012 tax return The comparable yield is determined as of the debt instrument's issue date. How to amend 2012 tax return Projected payment schedule. How to amend 2012 tax return   The projected payment schedule for a contingent payment debt instrument includes all fixed payments due under the instrument and a projected fixed amount for each contingent payment. How to amend 2012 tax return The projected payment schedule is created by the issuer as of the debt instrument's issue date. How to amend 2012 tax return It is used to determine the issuer's and holder's interest accruals and adjustments. How to amend 2012 tax return Steps for figuring OID. How to amend 2012 tax return   Figure the OID on a contingent payment debt instrument in two steps. How to amend 2012 tax return Figure the OID using the constant yield method (discussed earlier under Debt Instruments Issued After 1984 ) that applies to fixed payment debt instruments. How to amend 2012 tax return Use the comparable yield as the yield to maturity. How to amend 2012 tax return In general, use the projected payment schedule to determine the instrument's adjusted issue price at the beginning of each accrual period (other than the initial period). How to amend 2012 tax return Do not treat any amount payable as qualified stated interest. How to amend 2012 tax return Adjust the OID in (1) to account for actual contingent payments. How to amend 2012 tax return If the contingent payment is greater than the projected fixed amount, you have a positive adjustment. How to amend 2012 tax return If the contingent payment is less than the projected fixed amount, you have a negative adjustment. How to amend 2012 tax return Net positive adjustment. How to amend 2012 tax return   A net positive adjustment exists for a tax year when the total of any positive adjustments described in (2) above for the tax year is more than the total of any negative adjustments for the tax year. How to amend 2012 tax return Treat a net positive adjustment as additional OID for the tax year. How to amend 2012 tax return Net negative adjustment. How to amend 2012 tax return   A net negative adjustment exists for a tax year when the total of any negative adjustments described in (2) above for the tax year is more than the total of any positive adjustments for the tax year. How to amend 2012 tax return Use a net negative adjustment to offset OID on the debt instrument for the tax year. How to amend 2012 tax return If the net negative adjustment is more than the OID on the debt instrument for the tax year, you can claim the difference as an ordinary loss. How to amend 2012 tax return However, the amount you can claim as an ordinary loss is limited to the OID on the debt instrument you included in income in prior tax years. How to amend 2012 tax return You must carry forward any net negative adjustment that is more than the total OID for the tax year and prior tax years and treat it as a negative adjustment in the next tax year. How to amend 2012 tax return Basis adjustments. How to amend 2012 tax return   In general, increase your basis in a contingent payment debt instrument by the OID included in income. How to amend 2012 tax return Your basis, however, is not affected by any negative or positive adjustments. How to amend 2012 tax return Decrease your basis by any noncontingent payment received and the projected contingent payment scheduled to be received. How to amend 2012 tax return Treatment of gain or loss on sale or exchange. How to amend 2012 tax return   If you sell a contingent payment debt instrument at a gain, your gain is ordinary income (interest income), even if you hold the debt instrument as a capital asset. How to amend 2012 tax return If you sell a contingent payment debt instrument at a loss, your loss is an ordinary loss to the extent of your prior OID accruals on the debt instrument. How to amend 2012 tax return If the debt instrument is a capital asset, treat any loss that is more than your prior OID accruals as a capital loss. How to amend 2012 tax return See Regulations section 1. How to amend 2012 tax return 1275-4 for exceptions to these rules. How to amend 2012 tax return Premium, acquisition premium, and market discount. How to amend 2012 tax return   The rules for accruing premium, acquisition premium, and market discount do not apply to a contingent payment debt instrument. How to amend 2012 tax return See Regulations section 1. How to amend 2012 tax return 1275-4 to determine how to account for these items. How to amend 2012 tax return Inflation-Indexed Debt Instruments This discussion shows how you figure OID on certain inflation-indexed debt instruments issued after January 5, 1997. How to amend 2012 tax return An inflation-indexed debt instrument is generally a debt instrument on which the payments are adjusted for inflation and d
Español

Tribal Governments

Official information and services from the U.S. government

The How To Amend 2012 Tax Return

How to amend 2012 tax return 17. How to amend 2012 tax return   Individual Retirement Arrangements (IRAs) Table of Contents What's New Reminders Introduction Useful Items - You may want to see: Traditional IRAsWho Can Open a Traditional IRA? When and How Can a Traditional IRA Be Opened? How Much Can Be Contributed? When Can Contributions Be Made? How Much Can You Deduct? Nondeductible Contributions Inherited IRAs Can You Move Retirement Plan Assets? When Can You Withdraw or Use IRA Assets? When Must You Withdraw IRA Assets? (Required Minimum Distributions) Are Distributions Taxable? What Acts Result in Penalties or Additional Taxes? Roth IRAsWhat Is a Roth IRA? When Can a Roth IRA Be Opened? Can You Contribute to a Roth IRA? Can You Move Amounts Into a Roth IRA? Are Distributions Taxable? What's New Traditional IRA contribution and deduction limit. How to amend 2012 tax return  The contribution limit to your traditional IRA for 2013 will be increased to the smaller of the following amounts: $5,500, or Your taxable compensation for the year. How to amend 2012 tax return If you were age 50 or older before 2014, the most that can be contributed to your traditional IRA for 2013 will be the smaller of the following amounts: $6,500, or Your taxable compensation for the year. How to amend 2012 tax return For more information, see How Much Can Be Contributed? later. How to amend 2012 tax return Roth IRA contribution limit. How to amend 2012 tax return  If contributions on your behalf are made only to Roth IRAs, your contribution limit for 2013 will generally be the lesser of: $5,500, or Your taxable compensation for the year. How to amend 2012 tax return If you were age 50 or older before 2014 and contributions on your behalf were made only to Roth IRAs, your contribution limit for 2013 will generally be the lesser of: $6,500, or Your taxable compensation for the year. How to amend 2012 tax return However, if your modified adjusted gross income (AGI) is above a certain amount, your contribution limit may be reduced. How to amend 2012 tax return For more information, see How Much Can Be Contributed? under Can You Contribute to a Roth IRA? later. How to amend 2012 tax return Modified AGI limit for traditional IRA contributions increased. How to amend 2012 tax return  For 2013, if you were covered by a retirement plan at work, your deduction for contributions to a traditional IRA is reduced (phased out) if your modified AGI is: More than $95,000 but less than $115,000 for a married couple filing a joint return or a qualifying widow(er), More than $59,000 but less than $69,000 for a single individual or head of household, or Less than $10,000 for a married individual filing a separate return. How to amend 2012 tax return If you either lived with your spouse or file a joint return, and your spouse was covered by a retirement plan at work, but you were not, your deduction is phased out if your modified AGI is more than $178,000 but less than $188,000. How to amend 2012 tax return If your modified AGI is $188,000 or more, you cannot take a deduction for contributions to a traditional IRA. How to amend 2012 tax return See How Much Can You Deduct , later. How to amend 2012 tax return Modified AGI limit for Roth IRA contributions increased. How to amend 2012 tax return  For 2013, your Roth IRA contribution limit is reduced (phased out) in the following situations. How to amend 2012 tax return Your filing status is married filing jointly or qualifying widow(er) and your modified AGI is at least $178,000. How to amend 2012 tax return You cannot make a Roth IRA contribution if your modified AGI is $188,000 or more. How to amend 2012 tax return Your filing status is single, head of household, or married filing separately and you did not live with your spouse at any time in 2013 and your modified AGI is at least $112,000. How to amend 2012 tax return You cannot make a Roth IRA contribution if your modified AGI is $127,000 or more. How to amend 2012 tax return Your filing status is married filing separately, you lived with your spouse at any time during the year, and your modified AGI is more than -0-. How to amend 2012 tax return You cannot make a Roth IRA contribution if your modified AGI is $10,000 or more. How to amend 2012 tax return See Can You Contribute to a Roth IRA , later. How to amend 2012 tax return Net Investment Income Tax. How to amend 2012 tax return   For purposes of the Net Investment Income Tax (NIIT), net investment income does not include distributions from a qualified retirement plan including IRAs (for example; 401(a), 403(a), 403(b), 408, 408A, or 457(b) plans). How to amend 2012 tax return However, these distributions are taken into account when determining the modified adjusted gross income threshold. How to amend 2012 tax return Distributions from a nonqualified retirement plan are included in net investment income. How to amend 2012 tax return See Form 8960, Net Investment Income Tax - Individuals, Estates, and Trusts, and its instructions for more information. How to amend 2012 tax return Name change. How to amend 2012 tax return  All spousal IRAs have been renamed Kay Bailey Hutchison Spousal IRAs. How to amend 2012 tax return There are no changes to the rules regarding these IRAs. How to amend 2012 tax return See Kay Bailey Hutchison Spousal IRA Limit , later, for more information. How to amend 2012 tax return Reminders 2014 limits. How to amend 2012 tax return   You can find information about the 2014 contribution and AGI limits in Publication 590. How to amend 2012 tax return Contributions to both traditional and Roth IRAs. How to amend 2012 tax return   For information on your combined contribution limit if you contribute to both traditional and Roth IRAs, see Roth IRAs and traditional IRAs under How Much Can Be Contributed? in Roth IRAs, later. How to amend 2012 tax return Statement of required minimum distribution. How to amend 2012 tax return  If a minimum distribution from your IRA is required, the trustee, custodian, or issuer that held the IRA at the end of the preceding year must either report the amount of the required minimum distribution to you, or offer to calculate it for you. How to amend 2012 tax return The report or offer must include the date by which the amount must be distributed. How to amend 2012 tax return The report is due January 31 of the year in which the minimum distribution is required. How to amend 2012 tax return It can be provided with the year-end fair market value statement that you normally get each year. How to amend 2012 tax return No report is required for IRAs of owners who have died. How to amend 2012 tax return IRA interest. How to amend 2012 tax return  Although interest earned from your IRA is generally not taxed in the year earned, it is not tax-exempt interest. How to amend 2012 tax return Tax on your traditional IRA is generally deferred until you take a distribution. How to amend 2012 tax return Do not report this interest on your tax return as tax-exempt interest. How to amend 2012 tax return Form 8606. How to amend 2012 tax return   To designate contributions as nondeductible, you must file Form 8606, Nondeductible IRAs. How to amend 2012 tax return The term “50 or older” is used several times in this chapter. How to amend 2012 tax return It refers to an IRA owner who is age 50 or older by the end of the tax year. How to amend 2012 tax return Introduction An individual retirement arrangement (IRA) is a personal savings plan that gives you tax advantages for setting aside money for your retirement. How to amend 2012 tax return This chapter discusses the following topics. How to amend 2012 tax return The rules for a traditional IRA (any IRA that is not a Roth or SIMPLE IRA). How to amend 2012 tax return The Roth IRA, which features nondeductible contributions and tax-free distributions. How to amend 2012 tax return Simplified Employee Pensions (SEPs) and Savings Incentive Match Plans for Employees (SIMPLEs) are not discussed in this chapter. How to amend 2012 tax return For more information on these plans and employees' SEP IRAs and SIMPLE IRAs that are part of these plans, see Publications 560 and 590. How to amend 2012 tax return For information about contributions, deductions, withdrawals, transfers, rollovers, and other transactions, see Publication 590. How to amend 2012 tax return Useful Items - You may want to see: Publication 560 Retirement Plans for Small Business 590 Individual Retirement Arrangements (IRAs) Form (and Instructions) 5329 Additional Taxes on Qualified Plans (including IRAs) and Other Tax-Favored Accounts 8606 Nondeductible IRAs Traditional IRAs In this chapter, the original IRA (sometimes called an ordinary or regular IRA) is referred to as a “traditional IRA. How to amend 2012 tax return ” A traditional IRA is any IRA that is not a Roth IRA or a SIMPLE IRA. How to amend 2012 tax return Two advantages of a traditional IRA are: You may be able to deduct some or all of your contributions to it, depending on your circumstances, and Generally, amounts in your IRA, including earnings and gains, are not taxed until they are distributed. How to amend 2012 tax return Who Can Open a Traditional IRA? You can open and make contributions to a traditional IRA if: You (or, if you file a joint return, your spouse) received taxable compensation during the year, and You were not age 70½ by the end of the year. How to amend 2012 tax return What is compensation?   Generally, compensation is what you earn from working. How to amend 2012 tax return Compensation includes wages, salaries, tips, professional fees, bonuses, and other amounts you receive for providing personal services. How to amend 2012 tax return The IRS treats as compensation any amount properly shown in box 1 (Wages, tips, other compensation) of Form W-2, Wage and Tax Statement, provided that amount is reduced by any amount properly shown in box 11 (Nonqualified plans). How to amend 2012 tax return   Scholarship and fellowship payments are compensation for this purpose only if shown in box 1 of Form W-2. How to amend 2012 tax return   Compensation also includes commissions and taxable alimony and separate maintenance payments. How to amend 2012 tax return Self-employment income. How to amend 2012 tax return   If you are self-employed (a sole proprietor or a partner), compensation is the net earnings from your trade or business (provided your personal services are a material income-producing factor) reduced by the total of: The deduction for contributions made on your behalf to retirement plans, and The deductible part of your self-employment tax. How to amend 2012 tax return   Compensation includes earnings from self-employment even if they are not subject to self-employment tax because of your religious beliefs. How to amend 2012 tax return Nontaxable combat pay. How to amend 2012 tax return   For IRA purposes, if you were a member of the U. How to amend 2012 tax return S. How to amend 2012 tax return Armed Forces, your compensation includes any nontaxable combat pay you receive. How to amend 2012 tax return What is not compensation?   Compensation does not include any of the following items. How to amend 2012 tax return Earnings and profits from property, such as rental income, interest income, and dividend income. How to amend 2012 tax return Pension or annuity income. How to amend 2012 tax return Deferred compensation received (compensation payments postponed from a past year). How to amend 2012 tax return Income from a partnership for which you do not provide services that are a material income-producing factor. How to amend 2012 tax return Conservation Reserve Program (CRP) payments reported on Schedule SE (Form 1040), line 1b. How to amend 2012 tax return Any amounts (other than combat pay) you exclude from income, such as foreign earned income and housing costs. How to amend 2012 tax return When and How Can a Traditional IRA Be Opened? You can open a traditional IRA at any time. How to amend 2012 tax return However, the time for making contributions for any year is limited. How to amend 2012 tax return See When Can Contributions Be Made , later. How to amend 2012 tax return You can open different kinds of IRAs with a variety of organizations. How to amend 2012 tax return You can open an IRA at a bank or other financial institution or with a mutual fund or life insurance company. How to amend 2012 tax return You can also open an IRA through your stockbroker. How to amend 2012 tax return Any IRA must meet Internal Revenue Code requirements. How to amend 2012 tax return Kinds of traditional IRAs. How to amend 2012 tax return   Your traditional IRA can be an individual retirement account or annuity. How to amend 2012 tax return It can be part of either a simplified employee pension (SEP) or an employer or employee association trust account. How to amend 2012 tax return How Much Can Be Contributed? There are limits and other rules that affect the amount that can be contributed to a traditional IRA. How to amend 2012 tax return These limits and other rules are explained below. How to amend 2012 tax return Community property laws. How to amend 2012 tax return   Except as discussed later under Kay Bailey Hutchison Spousal IRA limit , each spouse figures his or her limit separately, using his or her own compensation. How to amend 2012 tax return This is the rule even in states with community property laws. How to amend 2012 tax return Brokers' commissions. How to amend 2012 tax return   Brokers' commissions paid in connection with your traditional IRA are subject to the contribution limit. How to amend 2012 tax return Trustees' fees. How to amend 2012 tax return   Trustees' administrative fees are not subject to the contribution limit. How to amend 2012 tax return Qualified reservist repayments. How to amend 2012 tax return   If you are (or were) a member of a reserve component and you were ordered or called to active duty after September 11, 2001, you may be able to contribute (repay) to an IRA amounts equal to any qualified reservist distributions you received. How to amend 2012 tax return You can make these repayment contributions even if they would cause your total contributions to the IRA to be more than the general limit on contributions. How to amend 2012 tax return To be eligible to make these repayment contributions, you must have received a qualified reservist distribution from an IRA or from a section 401(k) or 403(b) plan or similar arrangement. How to amend 2012 tax return   For more information, see Qualified reservist repayments under How Much Can Be Contributed? in chapter 1 of Publication 590. How to amend 2012 tax return Contributions on your behalf to a traditional IRA reduce your limit for contributions to a Roth IRA. How to amend 2012 tax return (See Roth IRAs, later. How to amend 2012 tax return ) General limit. How to amend 2012 tax return   For 2013, the most that can be contributed to your traditional IRA generally is the smaller of the following amounts. How to amend 2012 tax return $5,500 ($6,500 if you are 50 or older). How to amend 2012 tax return Your taxable compensation (defined earlier) for the year. How to amend 2012 tax return This is the most that can be contributed regardless of whether the contributions are to one or more traditional IRAs or whether all or part of the contributions are nondeductible. How to amend 2012 tax return (See Nondeductible Contributions , later. How to amend 2012 tax return ) Qualified reservist repayments do not affect this limit. How to amend 2012 tax return Example 1. How to amend 2012 tax return Betty, who is 34 years old and single, earned $24,000 in 2013. How to amend 2012 tax return Her IRA contributions for 2013 are limited to $5,500. How to amend 2012 tax return Example 2. How to amend 2012 tax return John, an unmarried college student working part time, earned $3,500 in 2013. How to amend 2012 tax return His IRA contributions for 2013 are limited to $3,500, the amount of his compensation. How to amend 2012 tax return Kay Bailey Hutchison Spousal IRA limit. How to amend 2012 tax return   For 2013, if you file a joint return and your taxable compensation is less than that of your spouse, the most that can be contributed for the year to your IRA is the smaller of the following amounts. How to amend 2012 tax return $5,500 ($6,500 if you are 50 or older). How to amend 2012 tax return The total compensation includible in the gross income of both you and your spouse for the year, reduced by the following two amounts. How to amend 2012 tax return Your spouse's IRA contribution for the year to a traditional IRA. How to amend 2012 tax return Any contribution for the year to a Roth IRA on behalf of your spouse. How to amend 2012 tax return This means that the total combined contributions that can be made for the year to your IRA and your spouse's IRA can be as much as $11,000 ($12,000 if only one of you is 50 or older, or $13,000 if both of you are 50 or older). How to amend 2012 tax return When Can Contributions Be Made? As soon as you open your traditional IRA, contributions can be made to it through your chosen sponsor (trustee or other administrator). How to amend 2012 tax return Contributions must be in the form of money (cash, check, or money order). How to amend 2012 tax return Property cannot be contributed. How to amend 2012 tax return Contributions must be made by due date. How to amend 2012 tax return   Contributions can be made to your traditional IRA for a year at any time during the year or by the due date for filing your return for that year, not including extensions. How to amend 2012 tax return Age 70½ rule. How to amend 2012 tax return   Contributions cannot be made to your traditional IRA for the year in which you reach age 70½ or for any later year. How to amend 2012 tax return   You attain age 70½ on the date that is 6 calendar months after the 70th anniversary of your birth. How to amend 2012 tax return If you were born on or before June 30, 1943, you cannot contribute for 2013 or any later year. How to amend 2012 tax return Designating year for which contribution is made. How to amend 2012 tax return   If an amount is contributed to your traditional IRA between January 1 and April 15, you should tell the sponsor which year (the current year or the previous year) the contribution is for. How to amend 2012 tax return If you do not tell the sponsor which year it is for, the sponsor can assume, and report to the IRS, that the contribution is for the current year (the year the sponsor received it). How to amend 2012 tax return Filing before a contribution is made. How to amend 2012 tax return   You can file your return claiming a traditional IRA contribution before the contribution is actually made. How to amend 2012 tax return Generally, the contribution must be made by the due date of your return, not including extensions. How to amend 2012 tax return Contributions not required. How to amend 2012 tax return   You do not have to contribute to your traditional IRA for every tax year, even if you can. How to amend 2012 tax return How Much Can You Deduct? Generally, you can deduct the lesser of: The contributions to your traditional IRA for the year, or The general limit (or the Kay Bailey Hutchison Spousal IRA limit, if it applies). How to amend 2012 tax return However, if you or your spouse was covered by an employer retirement plan, you may not be able to deduct this amount. How to amend 2012 tax return See Limit If Covered by Employer Plan , later. How to amend 2012 tax return You may be able to claim a credit for contributions to your traditional IRA. How to amend 2012 tax return For more information, see chapter 37. How to amend 2012 tax return Trustees' fees. How to amend 2012 tax return   Trustees' administrative fees that are billed separately and paid in connection with your traditional IRA are not deductible as IRA contributions. How to amend 2012 tax return However, they may be deductible as a miscellaneous itemized deduction on Schedule A (Form 1040). How to amend 2012 tax return See chapter 28. How to amend 2012 tax return Brokers' commissions. How to amend 2012 tax return   Brokers' commissions are part of your IRA contribution and, as such, are deductible subject to the limits. How to amend 2012 tax return Full deduction. How to amend 2012 tax return   If neither you nor your spouse was covered for any part of the year by an employer retirement plan, you can take a deduction for total contributions to one or more traditional IRAs of up to the lesser of: $5,500 ($6,500 if you are age 50 or older in 2013). How to amend 2012 tax return 100% of your compensation. How to amend 2012 tax return This limit is reduced by any contributions made to a 501(c)(18) plan on your behalf. How to amend 2012 tax return Kay Bailey Hutchison Spousal IRA. How to amend 2012 tax return   In the case of a married couple with unequal compensation who file a joint return, the deduction for contributions to the traditional IRA of the spouse with less compensation is limited to the lesser of the following amounts. How to amend 2012 tax return $5,500 ($6,500 if the spouse with the lower compensation is age 50 or older in 2013). How to amend 2012 tax return The total compensation includible in the gross income of both spouses for the year reduced by the following three amounts. How to amend 2012 tax return The IRA deduction for the year of the spouse with the greater compensation. How to amend 2012 tax return Any designated nondeductible contribution for the year made on behalf of the spouse with the greater compensation. How to amend 2012 tax return Any contributions for the year to a Roth IRA on behalf of the spouse with the greater compensation. How to amend 2012 tax return This limit is reduced by any contributions to a 501(c)(18) plan on behalf of the spouse with the lesser compensation. How to amend 2012 tax return Note. How to amend 2012 tax return If you were divorced or legally separated (and did not remarry) before the end of the year, you cannot deduct any contributions to your spouse's IRA. How to amend 2012 tax return After a divorce or legal separation, you can deduct only contributions to your own IRA. How to amend 2012 tax return Your deductions are subject to the rules for single individuals. How to amend 2012 tax return Covered by an employer retirement plan. How to amend 2012 tax return   If you or your spouse was covered by an employer retirement plan at any time during the year for which contributions were made, your deduction may be further limited. How to amend 2012 tax return This is discussed later under Limit If Covered by Employer Plan . How to amend 2012 tax return Limits on the amount you can deduct do not affect the amount that can be contributed. How to amend 2012 tax return See Nondeductible Contributions , later. How to amend 2012 tax return Are You Covered by an Employer Plan? The Form W-2 you receive from your employer has a box used to indicate whether you were covered for the year. How to amend 2012 tax return The “Retirement plan” box should be checked if you were covered. How to amend 2012 tax return Reservists and volunteer firefighters should also see Situations in Which You Are Not Covered by an Employer Plan , later. How to amend 2012 tax return If you are not certain whether you were covered by your employer's retirement plan, you should ask your employer. How to amend 2012 tax return Federal judges. How to amend 2012 tax return   For purposes of the IRA deduction, federal judges are covered by an employer retirement plan. How to amend 2012 tax return For Which Year(s) Are You Covered by an Employer Plan? Special rules apply to determine the tax years for which you are covered by an employer plan. How to amend 2012 tax return These rules differ depending on whether the plan is a defined contribution plan or a defined benefit plan. How to amend 2012 tax return Tax year. How to amend 2012 tax return   Your tax year is the annual accounting period you use to keep records and report income and expenses on your income tax return. How to amend 2012 tax return For almost all people, the tax year is the calendar year. How to amend 2012 tax return Defined contribution plan. How to amend 2012 tax return   Generally, you are covered by a defined contribution plan for a tax year if amounts are contributed or allocated to your account for the plan year that ends with or within that tax year. How to amend 2012 tax return   A defined contribution plan is a plan that provides for a separate account for each person covered by the plan. How to amend 2012 tax return Types of defined contribution plans include profit-sharing plans, stock bonus plans, and money purchase pension plans. How to amend 2012 tax return Defined benefit plan. How to amend 2012 tax return   If you are eligible to participate in your employer's defined benefit plan for the plan year that ends within your tax year, you are covered by the plan. How to amend 2012 tax return This rule applies even if you: Declined to participate in the plan, Did not make a required contribution, or Did not perform the minimum service required to accrue a benefit for the year. How to amend 2012 tax return   A defined benefit plan is any plan that is not a defined contribution plan. How to amend 2012 tax return Defined benefit plans include pension plans and annuity plans. How to amend 2012 tax return No vested interest. How to amend 2012 tax return   If you accrue a benefit for a plan year, you are covered by that plan even if you have no vested interest in (legal right to) the accrual. How to amend 2012 tax return Situations in Which You Are Not Covered by an Employer Plan Unless you are covered under another employer plan, you are not covered by an employer plan if you are in one of the situations described below. How to amend 2012 tax return Social security or railroad retirement. How to amend 2012 tax return   Coverage under social security or railroad retirement is not coverage under an employer retirement plan. How to amend 2012 tax return Benefits from a previous employer's plan. How to amend 2012 tax return   If you receive retirement benefits from a previous employer's plan, you are not covered by that plan. How to amend 2012 tax return Reservists. How to amend 2012 tax return   If the only reason you participate in a plan is because you are a member of a reserve unit of the armed forces, you may not be covered by the plan. How to amend 2012 tax return You are not covered by the plan if both of the following conditions are met. How to amend 2012 tax return The plan you participate in is established for its employees by: The United States, A state or political subdivision of a state, or An instrumentality of either (a) or (b) above. How to amend 2012 tax return You did not serve more than 90 days on active duty during the year (not counting duty for training). How to amend 2012 tax return Volunteer firefighters. How to amend 2012 tax return   If the only reason you participate in a plan is because you are a volunteer firefighter, you may not be covered by the plan. How to amend 2012 tax return You are not covered by the plan if both of the following conditions are met. How to amend 2012 tax return The plan you participate in is established for its employees by: The United States, A state or political subdivision of a state, or An instrumentality of either (a) or (b) above. How to amend 2012 tax return Your accrued retirement benefits at the beginning of the year will not provide more than $1,800 per year at retirement. How to amend 2012 tax return Limit If Covered by Employer Plan If either you or your spouse was covered by an employer retirement plan, you may be entitled to only a partial (reduced) deduction or no deduction at all, depending on your income and your filing status. How to amend 2012 tax return Your deduction begins to decrease (phase out) when your income rises above a certain amount and is eliminated altogether when it reaches a higher amount. How to amend 2012 tax return These amounts vary depending on your filing status. How to amend 2012 tax return To determine if your deduction is subject to phaseout, you must determine your modified adjusted gross income (AGI) and your filing status. How to amend 2012 tax return See Filing status and Modified adjusted gross income (AGI) , later. How to amend 2012 tax return Then use Table 17-1 or 17-2 to determine if the phaseout applies. How to amend 2012 tax return Social security recipients. How to amend 2012 tax return   Instead of using Table 17-1 or Table 17-2, use the worksheets in Appendix B of Publication 590 if, for the year, all of the following apply. How to amend 2012 tax return You received social security benefits. How to amend 2012 tax return You received taxable compensation. How to amend 2012 tax return Contributions were made to your traditional IRA. How to amend 2012 tax return You or your spouse was covered by an employer retirement plan. How to amend 2012 tax return Use those worksheets to figure your IRA deduction, your nondeductible contribution, and the taxable portion, if any, of your social security benefits. How to amend 2012 tax return Deduction phaseout. How to amend 2012 tax return   If you were covered by an employer retirement plan and you did not receive any social security retirement benefits, your IRA deduction may be reduced or eliminated depending on your filing status and modified AGI as shown in Table 17-1. How to amend 2012 tax return Table 17-1. How to amend 2012 tax return Effect of Modified AGI1 on Deduction if You Are Covered by Retirement Plan at Work If you are covered by a retirement plan at work, use this table to determine if your modified AGI affects the amount of your deduction. How to amend 2012 tax return IF your filing status is. How to amend 2012 tax return . How to amend 2012 tax return . How to amend 2012 tax return   AND your modified AGI is. How to amend 2012 tax return . How to amend 2012 tax return . How to amend 2012 tax return   THEN you can take. How to amend 2012 tax return . How to amend 2012 tax return . How to amend 2012 tax return single   or  head of household   $59,000 or less   a full deduction. How to amend 2012 tax return   more than $59,000 but less than $69,000   a partial deduction. How to amend 2012 tax return   $69,000 or more   no deduction. How to amend 2012 tax return married filing jointly   or  qualifying widow(er)   $95,000 or less   a full deduction. How to amend 2012 tax return   more than $95,000 but less than $115,000   a partial deduction. How to amend 2012 tax return   $115,000 or more   no deduction. How to amend 2012 tax return married filing separately2   less than $10,000   a partial deduction. How to amend 2012 tax return   $10,000 or more   no deduction. How to amend 2012 tax return 1Modified AGI (adjusted gross income). How to amend 2012 tax return See Modified adjusted gross income (AGI) . How to amend 2012 tax return 2If you did not live with your spouse at any time during the year, your filing status is considered Single for this purpose (therefore, your IRA deduction is determined under the “Single” column). How to amend 2012 tax return If your spouse is covered. How to amend 2012 tax return   If you are not covered by an employer retirement plan, but your spouse is, and you did not receive any social security benefits, your IRA deduction may be reduced or eliminated entirely depending on your filing status and modified AGI as shown in Table 17-2. How to amend 2012 tax return Filing status. How to amend 2012 tax return   Your filing status depends primarily on your marital status. How to amend 2012 tax return For this purpose, you need to know if your filing status is single or head of household, married filing jointly or qualifying widow(er), or married filing separately. How to amend 2012 tax return If you need more information on filing status, see chapter 2. How to amend 2012 tax return Lived apart from spouse. How to amend 2012 tax return   If you did not live with your spouse at any time during the year and you file a separate return, your filing status, for this purpose, is single. How to amend 2012 tax return Table 17-2. How to amend 2012 tax return Effect of Modified AGI1 on Deduction if You Are NOT Covered by Retirement Plan at Work If you are not covered by a retirement plan at work, use this table to determine if your modified AGI affects the amount of your deduction. How to amend 2012 tax return IF your filing status is. How to amend 2012 tax return . How to amend 2012 tax return . How to amend 2012 tax return   AND your modified AGI is. How to amend 2012 tax return . How to amend 2012 tax return . How to amend 2012 tax return   THEN you can take. How to amend 2012 tax return . How to amend 2012 tax return . How to amend 2012 tax return single, head of household, or qualifying widow(er)   any amount   a full deduction. How to amend 2012 tax return married filing jointly or separately with a spouse who is not covered by a plan at work   any amount   a full deduction. How to amend 2012 tax return married filing jointly with a spouse who is covered by a plan at work   $178,000 or less   a full deduction. How to amend 2012 tax return   more than $178,000 but less than $188,000   a partial deduction. How to amend 2012 tax return   $188,000 or more   no deduction. How to amend 2012 tax return married filing separately with a spouse who is covered by a plan at work2   less than $10,000   a partial deduction. How to amend 2012 tax return   $10,000 or more   no deduction. How to amend 2012 tax return 1Modified AGI (adjusted gross income). How to amend 2012 tax return See Modified adjusted gross income (AGI) . How to amend 2012 tax return 2You are entitled to the full deduction if you did not live with your spouse at any time during the year. How to amend 2012 tax return Modified adjusted gross income (AGI). How to amend 2012 tax return   How you figure your modified AGI depends on whether you are filing Form 1040 or Form 1040A. How to amend 2012 tax return If you made contributions to your IRA for 2013 and received a distribution from your IRA in 2013, see Publication 590. How to amend 2012 tax return You may be able to use Worksheet 17-1 to figure your modified AGI. How to amend 2012 tax return    Do not assume that your modified AGI is the same as your compensation. How to amend 2012 tax return Your modified AGI may include income in addition to your compensation (discussed earlier), such as interest, dividends, and income from IRA distributions. How to amend 2012 tax return Form 1040. How to amend 2012 tax return   If you file Form 1040, refigure the amount on the page 1 “adjusted gross income” line without taking into account any of the following eight amounts. How to amend 2012 tax return IRA deduction. How to amend 2012 tax return Student loan interest deduction. How to amend 2012 tax return Tuition and fees deduction. How to amend 2012 tax return Domestic production activities deduction. How to amend 2012 tax return Foreign earned income exclusion. How to amend 2012 tax return Foreign housing exclusion or deduction. How to amend 2012 tax return Exclusion of qualified savings bond interest shown on Form 8815, Exclusion of Interest From Series EE and I U. How to amend 2012 tax return S. How to amend 2012 tax return Savings Bonds Issued After 1989. How to amend 2012 tax return Exclusion of employer-provided adoption benefits shown on Form 8839, Qualified Adoption Expenses. How to amend 2012 tax return This is your modified AGI. How to amend 2012 tax return Form 1040A. How to amend 2012 tax return   If you file Form 1040A, refigure the amount on the page 1 “adjusted gross income” line without taking into account any of the following amounts. How to amend 2012 tax return IRA deduction. How to amend 2012 tax return Student loan interest deduction. How to amend 2012 tax return Tuition and fees deduction. How to amend 2012 tax return Exclusion of qualified savings bond interest shown on Form 8815. How to amend 2012 tax return This is your modified AGI. How to amend 2012 tax return Both contributions for 2013 and distributions in 2013. How to amend 2012 tax return   If all three of the following apply, any IRA distributions you received in 2013 may be partly tax free and partly taxable. How to amend 2012 tax return You received distributions in 2013 from one or more traditional IRAs. How to amend 2012 tax return You made contributions to a traditional IRA for 2013. How to amend 2012 tax return Some of those contributions may be nondeductible contributions. How to amend 2012 tax return If this is your situation, you must figure the taxable part of the traditional IRA distribution before you can figure your modified AGI. How to amend 2012 tax return To do this, you can use Worksheet 1-5, Figuring the Taxable Part of Your IRA Distribution, in Publication 590. How to amend 2012 tax return   If at least one of the above does not apply, figure your modified AGI using Worksheet 17-1, later. How to amend 2012 tax return    How to figure your reduced IRA deduction. How to amend 2012 tax return   You can figure your reduced IRA deduction for either Form 1040 or Form 1040A by using the worksheets in chapter 1 of Publication 590. How to amend 2012 tax return Also, the instructions for Form 1040 and Form 1040A include similar worksheets that you may be able to use instead. How to amend 2012 tax return Worksheet 17-1. How to amend 2012 tax return Figuring Your Modified AGI Use this worksheet to figure your modified adjusted gross income for traditional IRA purposes. How to amend 2012 tax return 1. How to amend 2012 tax return Enter your adjusted gross income (AGI) from Form 1040, line 38, or Form 1040A, line 22, figured without taking into account the amount from Form 1040, line 32, or Form 1040A, line 17 1. How to amend 2012 tax return   2. How to amend 2012 tax return Enter any student loan interest deduction from Form 1040, line 33, or Form 1040A, line 18 2. How to amend 2012 tax return   3. How to amend 2012 tax return Enter any tuition and fees deduction from Form 1040, line 34, or Form 1040A, line 19 3. How to amend 2012 tax return   4. How to amend 2012 tax return Enter any domestic production activities deduction from Form 1040, line 35 4. How to amend 2012 tax return   5. How to amend 2012 tax return Enter any foreign earned income and/or housing exclusion from Form 2555, line 45, or Form 2555-EZ, line 18 5. How to amend 2012 tax return   6. How to amend 2012 tax return Enter any foreign housing deduction from Form 2555, line 50 6. How to amend 2012 tax return   7. How to amend 2012 tax return Enter any excludable savings bond interest from Form 8815, line 14 7. How to amend 2012 tax return   8. How to amend 2012 tax return Enter any excluded employer-provided adoption benefits from Form 8839, line 28 8. How to amend 2012 tax return   9. How to amend 2012 tax return Add lines 1 through 8. How to amend 2012 tax return This is your Modified AGI for traditional IRA purposes 9. How to amend 2012 tax return   Reporting Deductible Contributions If you file Form 1040, enter your IRA deduction on line 32 of that form. How to amend 2012 tax return If you file Form 1040A, enter your IRA deduction on line 17. How to amend 2012 tax return You cannot deduct IRA contributions on Form 1040EZ. How to amend 2012 tax return Nondeductible Contributions Although your deduction for IRA contributions may be reduced or eliminated, contributions can be made to your IRA up to the general limit or, if it applies, the Kay Bailey Hutchison Spousal IRA limit. How to amend 2012 tax return The difference between your total permitted contributions and your IRA deduction, if any, is your nondeductible contribution. How to amend 2012 tax return Example. How to amend 2012 tax return Mike is 28 years old and single. How to amend 2012 tax return In 2013, he was covered by a retirement plan at work. How to amend 2012 tax return His salary was $57,312. How to amend 2012 tax return His modified AGI was $70,000. How to amend 2012 tax return Mike made a $5,500 IRA contribution for 2013. How to amend 2012 tax return Because he was covered by a retirement plan and his modified AGI was over $69,000, he cannot deduct his $5,500 IRA contribution. How to amend 2012 tax return He must designate this contribution as a nondeductible contribution by reporting it on Form 8606, as explained next. How to amend 2012 tax return Form 8606. How to amend 2012 tax return   To designate contributions as nondeductible, you must file Form 8606. How to amend 2012 tax return   You do not have to designate a contribution as nondeductible until you file your tax return. How to amend 2012 tax return When you file, you can even designate otherwise deductible contributions as nondeductible. How to amend 2012 tax return   You must file Form 8606 to report nondeductible contributions even if you do not have to file a tax return for the year. How to amend 2012 tax return A Form 8606 is not used for the year that you make a rollover from a qualified retirement plan to a traditional IRA and the rollover includes nontaxable amounts. How to amend 2012 tax return In those situations, a Form 8606 is completed for the year you take a distribution from that IRA. How to amend 2012 tax return See Form 8606 under Distributions Fully or Partly Taxable, later. How to amend 2012 tax return Failure to report nondeductible contributions. How to amend 2012 tax return   If you do not report nondeductible contributions, all of the contributions to your traditional IRA will be treated as deductible contributions when withdrawn. How to amend 2012 tax return All distributions from your IRA will be taxed unless you can show, with satisfactory evidence, that nondeductible contributions were made. How to amend 2012 tax return Penalty for overstatement. How to amend 2012 tax return   If you overstate the amount of nondeductible contributions on your Form 8606 for any tax year, you must pay a penalty of $100 for each overstatement, unless it was due to reasonable cause. How to amend 2012 tax return Penalty for failure to file Form 8606. How to amend 2012 tax return   You will have to pay a $50 penalty if you do not file a required Form 8606, unless you can prove that the failure was due to reasonable cause. How to amend 2012 tax return    Tax on earnings on nondeductible contributions. How to amend 2012 tax return   As long as contributions are within the contribution limits, none of the earnings or gains on contributions (deductible or nondeductible) will be taxed until they are distributed. How to amend 2012 tax return See When Can You Withdraw or Use IRA Assets , later. How to amend 2012 tax return Cost basis. How to amend 2012 tax return   You will have a cost basis in your traditional IRA if you made any nondeductible contributions. How to amend 2012 tax return Your cost basis is the sum of the nondeductible contributions to your IRA minus any withdrawals or distributions of nondeductible contributions. How to amend 2012 tax return Inherited IRAs If you inherit a traditional IRA, you are called a beneficiary. How to amend 2012 tax return A beneficiary can be any person or entity the owner chooses to receive the benefits of the IRA after he or she dies. How to amend 2012 tax return Beneficiaries of a traditional IRA must include in their gross income any taxable distributions they receive. How to amend 2012 tax return Inherited from spouse. How to amend 2012 tax return   If you inherit a traditional IRA from your spouse, you generally have the following three choices. How to amend 2012 tax return You can: Treat it as your own IRA by designating yourself as the account owner. How to amend 2012 tax return Treat it as your own by rolling it over into your IRA, or to the extent it is taxable, into a: Qualified employer plan, Qualified employee annuity plan (section 403(a) plan), Tax-sheltered annuity plan (section 403(b) plan), or Deferred compensation plan of a state or local government (section 457 plan). How to amend 2012 tax return Treat yourself as the beneficiary rather than treating the IRA as your own. How to amend 2012 tax return Treating it as your own. How to amend 2012 tax return   You will be considered to have chosen to treat the IRA as your own if: Contributions (including rollover contributions) are made to the inherited IRA, or You do not take the required minimum distribution for a year as a beneficiary of the IRA. How to amend 2012 tax return You will only be considered to have chosen to treat the IRA as your own if: You are the sole beneficiary of the IRA, and You have an unlimited right to withdraw amounts from it. How to amend 2012 tax return   However, if you receive a distribution from your deceased spouse's IRA, you can roll that distribution over into your own IRA within the 60-day time limit, as long as the distribution is not a required distribution, even if you are not the sole beneficiary of your deceased spouse's IRA. How to amend 2012 tax return Inherited from someone other than spouse. How to amend 2012 tax return   If you inherit a traditional IRA from anyone other than your deceased spouse, you cannot treat the inherited IRA as your own. How to amend 2012 tax return This means that you cannot make any contributions to the IRA. How to amend 2012 tax return It also means you cannot roll over any amounts into or out of the inherited IRA. How to amend 2012 tax return However, you can make a trustee-to-trustee transfer as long as the IRA into which amounts are being moved is set up and maintained in the name of the deceased IRA owner for the benefit of you as beneficiary. How to amend 2012 tax return For more information, see the discussion of inherited IRAs under Rollover From One IRA Into Another, later. How to amend 2012 tax return Can You Move Retirement Plan Assets? You can transfer, tax free, assets (money or property) from other retirement plans (including traditional IRAs) to a traditional IRA. How to amend 2012 tax return You can make the following kinds of transfers. How to amend 2012 tax return Transfers from one trustee to another. How to amend 2012 tax return Rollovers. How to amend 2012 tax return Transfers incident to a divorce. How to amend 2012 tax return Transfers to Roth IRAs. How to amend 2012 tax return   Under certain conditions, you can move assets from a traditional IRA or from a designated Roth account to a Roth IRA. How to amend 2012 tax return You can also move assets from a qualified retirement plan to a Roth IRA. How to amend 2012 tax return See Can You Move Amounts Into a Roth IRA? under Roth IRAs, later. How to amend 2012 tax return Trustee-to-Trustee Transfer A transfer of funds in your traditional IRA from one trustee directly to another, either at your request or at the trustee's request, is not a rollover. How to amend 2012 tax return Because there is no distribution to you, the transfer is tax free. How to amend 2012 tax return Because it is not a rollover, it is not affected by the 1-year waiting period required between rollovers, discussed later under Rollover From One IRA Into Another . How to amend 2012 tax return For information about direct transfers to IRAs from retirement plans other than IRAs, see Can You Move Retirement Plan Assets? in chapter 1 and Can You Move Amounts Into a Roth IRA? in chapter 2 of Publication 590. How to amend 2012 tax return Rollovers Generally, a rollover is a tax-free distribution to you of cash or other assets from one retirement plan that you contribute (roll over) to another retirement plan. How to amend 2012 tax return The contribution to the second retirement plan is called a “rollover contribution. How to amend 2012 tax return ” Note. How to amend 2012 tax return An amount rolled over tax free from one retirement plan to another is generally includible in income when it is distributed from the second plan. How to amend 2012 tax return Kinds of rollovers to a traditional IRA. How to amend 2012 tax return   You can roll over amounts from the following plans into a traditional IRA: A traditional IRA, An employer's qualified retirement plan for its employees, A deferred compensation plan of a state or local government (section 457 plan), or A tax-sheltered annuity plan (section 403(b) plan). How to amend 2012 tax return Treatment of rollovers. How to amend 2012 tax return   You cannot deduct a rollover contribution, but you must report the rollover distribution on your tax return as discussed later under Reporting rollovers from IRAs and under Reporting rollovers from employer plans . How to amend 2012 tax return Kinds of rollovers from a traditional IRA. How to amend 2012 tax return   You may be able to roll over, tax free, a distribution from your traditional IRA into a qualified plan. How to amend 2012 tax return These plans include the federal Thrift Savings Fund (for federal employees), deferred compensation plans of state or local governments (section 457 plans), and tax-sheltered annuity plans (section 403(b) plans). How to amend 2012 tax return The part of the distribution that you can roll over is the part that would otherwise be taxable (includible in your income). How to amend 2012 tax return Qualified plans may, but are not required to, accept such rollovers. How to amend 2012 tax return Time limit for making a rollover contribution. How to amend 2012 tax return   You generally must make the rollover contribution by the 60th day after the day you receive the distribution from your traditional IRA or your employer's plan. How to amend 2012 tax return The IRS may waive the 60-day requirement where the failure to do so would be against equity or good conscience, such as in the event of a casualty, disaster, or other event beyond your reasonable control. How to amend 2012 tax return For more information, see Can You Move Retirement Plan Assets? in chapter 1 of Publication 590. How to amend 2012 tax return Extension of rollover period. How to amend 2012 tax return   If an amount distributed to you from a traditional IRA or a qualified employer retirement plan is a frozen deposit at any time during the 60-day period allowed for a rollover, special rules extend the rollover period. How to amend 2012 tax return For more information, see Can You Move Retirement Plan Assets? in chapter 1 of Publication 590. How to amend 2012 tax return More information. How to amend 2012 tax return   For more information on rollovers, see Can You Move Retirement Plan Assets? in chapter 1 of Publication 590. How to amend 2012 tax return Rollover From One IRA Into Another You can withdraw, tax free, all or part of the assets from one traditional IRA if you reinvest them within 60 days in the same or another traditional IRA. How to amend 2012 tax return Because this is a rollover, you cannot deduct the amount that you reinvest in an IRA. How to amend 2012 tax return Waiting period between rollovers. How to amend 2012 tax return   Generally, if you make a tax-free rollover of any part of a distribution from a traditional IRA, you cannot, within a 1-year period, make a tax-free rollover of any later distribution from that same IRA. How to amend 2012 tax return You also cannot make a tax-free rollover of any amount distributed, within the same 1-year period, from the IRA into which you made the tax-free rollover. How to amend 2012 tax return   The 1-year period begins on the date you receive the IRA distribution, not on the date you roll it over into an IRA. How to amend 2012 tax return Example. How to amend 2012 tax return You have two traditional IRAs, IRA-1 and IRA-2. How to amend 2012 tax return You make a tax-free rollover of a distribution from IRA-1 into a new traditional IRA (IRA-3). How to amend 2012 tax return You cannot, within 1 year of the distribution from IRA-1, make a tax-free rollover of any distribution from either IRA-1 or IRA-3 into another traditional IRA. How to amend 2012 tax return However, the rollover from IRA-1 into IRA-3 does not prevent you from making a tax-free rollover from IRA-2 into any other traditional IRA. How to amend 2012 tax return This is because you have not, within the last year, rolled over, tax free, any distribution from IRA-2 or made a tax-free rollover into IRA-2. How to amend 2012 tax return Exception. How to amend 2012 tax return   For an exception for distributions from failed financial institutions, see Rollover From One IRA Into Another under Can You Move Retirement Plan Assets? in chapter 1 of Publication 590. How to amend 2012 tax return Partial rollovers. How to amend 2012 tax return   If you withdraw assets from a traditional IRA, you can roll over part of the withdrawal tax free and keep the rest of it. How to amend 2012 tax return The amount you keep will generally be taxable (except for the part that is a return of nondeductible contributions). How to amend 2012 tax return The amount you keep may be subject to the 10% additional tax on early distributions, discussed later under What Acts Result in Penalties or Additional Taxes? . How to amend 2012 tax return Required distributions. How to amend 2012 tax return   Amounts that must be distributed during a particular year under the required distribution rules (discussed later) are not eligible for rollover treatment. How to amend 2012 tax return Inherited IRAs. How to amend 2012 tax return   If you inherit a traditional IRA from your spouse, you generally can roll it over, or you can choose to make the inherited IRA your own. How to amend 2012 tax return See Treating it as your own , earlier. How to amend 2012 tax return Not inherited from spouse. How to amend 2012 tax return   If you inherit a traditional IRA from someone other than your spouse, you cannot roll it over or allow it to receive a rollover contribution. How to amend 2012 tax return You must withdraw the IRA assets within a certain period. How to amend 2012 tax return For more information, see When Must You Withdraw Assets? in chapter 1 of Publication 590. How to amend 2012 tax return Reporting rollovers from IRAs. How to amend 2012 tax return   Report any rollover from one traditional IRA to the same or another traditional IRA on lines 15a and 15b, Form 1040, or lines 11a and 11b, Form 1040A, as follows. How to amend 2012 tax return   Enter the total amount of the distribution on Form 1040, line 15a, or Form 1040A, line 11a. How to amend 2012 tax return If the total amount on Form 1040, line 15a, or Form 1040A, line 11a, was rolled over, enter zero on Form 1040, line 15b, or Form 1040A, line 11b. How to amend 2012 tax return If the total distribution was not rolled over, enter the taxable portion of the part that was not rolled over on Form 1040, line 15b, or Form 1040A, line 11b. How to amend 2012 tax return Put “Rollover” next to Form 1040, line 15b, or Form 1040A, line 11b. How to amend 2012 tax return See your tax return instructions. How to amend 2012 tax return   If you rolled over the distribution into a qualified plan (other than an IRA) or you make the rollover in 2014, attach a statement explaining what you did. How to amend 2012 tax return Rollover From Employer's Plan Into an IRA You can roll over into a traditional IRA all or part of an eligible rollover distribution you receive from your (or your deceased spouse's): Employer's qualified pension, profit-sharing, or stock bonus plan; Annuity plan; Tax-sheltered annuity plan (section 403(b) plan); or Governmental deferred compensation plan (section 457 plan). How to amend 2012 tax return A qualified plan is one that meets the requirements of the Internal Revenue Code. How to amend 2012 tax return Eligible rollover distribution. How to amend 2012 tax return   Generally, an eligible rollover distribution is any distribution of all or part of the balance to your credit in a qualified retirement plan except the following. How to amend 2012 tax return A required minimum distribution (explained later under When Must You Withdraw IRA Assets? (Required Minimum Distributions) ). How to amend 2012 tax return A hardship distribution. How to amend 2012 tax return Any of a series of substantially equal periodic distributions paid at least once a year over: Your lifetime or life expectancy, The lifetimes or life expectancies of you and your beneficiary, or A period of 10 years or more. How to amend 2012 tax return Corrective distributions of excess contributions or excess deferrals, and any income allocable to the excess, or of excess annual additions and any allocable gains. How to amend 2012 tax return A loan treated as a distribution because it does not satisfy certain requirements either when made or later (such as upon default), unless the participant's accrued benefits are reduced (offset) to repay the loan. How to amend 2012 tax return Dividends on employer securities. How to amend 2012 tax return The cost of life insurance coverage. How to amend 2012 tax return Any nontaxable amounts that you roll over into your traditional IRA become part of your basis (cost) in your IRAs. How to amend 2012 tax return To recover your basis when you take distributions from your IRA, you must complete Form 8606 for the year of the distribution. How to amend 2012 tax return See Form 8606 under Distributions Fully or Partly Taxable, later. How to amend 2012 tax return Rollover by nonspouse beneficiary. How to amend 2012 tax return   A direct transfer from a deceased employee's qualified pension, profit-sharing, or stock bonus plan; annuity plan; tax-sheltered annuity (section 403(b)) plan; or governmental deferred compensation (section 457) plan to an IRA set up to receive the distribution on your behalf can be treated as an eligible rollover distribution if you are the designated beneficiary of the plan and not the employee's spouse. How to amend 2012 tax return The IRA is treated as an inherited IRA. How to amend 2012 tax return For more information about inherited IRAs, see Inherited IRAs , earlier. How to amend 2012 tax return Reporting rollovers from employer plans. How to amend 2012 tax return    Enter the total distribution (before income tax or other deductions were withheld) on Form 1040, line 16a, or Form 1040A, line 12a. How to amend 2012 tax return This amount should be shown in box 1 of Form 1099-R. How to amend 2012 tax return From this amount, subtract any contributions (usually shown in box 5 of Form 1099-R) that were taxable to you when made. How to amend 2012 tax return From that result, subtract the amount that was rolled over either directly or within 60 days of receiving the distribution. How to amend 2012 tax return Enter the remaining amount, even if zero, on Form 1040, line 16b, or Form 1040A, line 12b. How to amend 2012 tax return Also, enter "Rollover" next to Form 1040, line 16b, or Form 1040A, line 12b. How to amend 2012 tax return Transfers Incident to Divorce If an interest in a traditional IRA is transferred from your spouse or former spouse to you by a divorce or separate maintenance decree or a written document related to such a decree, the interest in the IRA, starting from the date of the transfer, is treated as your IRA. How to amend 2012 tax return The transfer is tax free. How to amend 2012 tax return For detailed information, see Can You Move Retirement Plan Assets? in chapter 1 of Publication 590. How to amend 2012 tax return Converting From Any Traditional IRA to a Roth IRA Allowable conversions. How to amend 2012 tax return   You can withdraw all or part of the assets from a traditional IRA and reinvest them (within 60 days) in a Roth IRA. How to amend 2012 tax return The amount that you withdraw and timely contribute (convert) to the Roth IRA is called a conversion contribution. How to amend 2012 tax return If properly (and timely) rolled over, the 10% additional tax on early distributions will not apply. How to amend 2012 tax return However, a part or all of the conversion contribution from your traditional IRA is included in your gross income. How to amend 2012 tax return Required distributions. How to amend 2012 tax return   You cannot convert amounts that must be distributed from your traditional IRA for a particular year (including the calendar year in which you reach age 70½) under the required distribution rules (discussed later). How to amend 2012 tax return Income. How to amend 2012 tax return   You must include in your gross income distributions from a traditional IRA that you would have had to include in income if you had not converted them into a Roth IRA. How to amend 2012 tax return These amounts are normally included in income on your return for the year that you converted them from a traditional IRA to a Roth IRA. How to amend 2012 tax return   You do not include in gross income any part of a distribution from a traditional IRA that is a return of your basis, as discussed later. How to amend 2012 tax return   You must file Form 8606 to report 2013 conversions from traditional, SEP, or SIMPLE IRAs to a Roth IRA in 2013 (unless you recharacterized the entire amount) and to figure the amount to include in income. How to amend 2012 tax return   If you must include any amount in your gross income, you may have to increase your withholding or make estimated tax payments. How to amend 2012 tax return See chapter 4. How to amend 2012 tax return Recharacterizations You may be able to treat a contribution made to one type of IRA as having been made to a different type of IRA. How to amend 2012 tax return This is called recharacterizing the contribution. How to amend 2012 tax return See Can You Move Retirement Plan Assets? in chapter 1 of Publication 590 for more detailed information. How to amend 2012 tax return How to recharacterize a contribution. How to amend 2012 tax return   To recharacterize a contribution, you generally must have the contribution transferred from the first IRA (the one to which it was made) to the second IRA in a trustee-to-trustee transfer. How to amend 2012 tax return If the transfer is made by the due date (including extensions) for your tax return for the year during which the contribution was made, you can elect to treat the contribution as having been originally made to the second IRA instead of to the first IRA. How to amend 2012 tax return If you recharacterize your contribution, you must do all three of the following. How to amend 2012 tax return Include in the transfer any net income allocable to the contribution. How to amend 2012 tax return If there was a loss, the net income you must transfer may be a negative amount. How to amend 2012 tax return Report the recharacterization on your tax return for the year during which the contribution was made. How to amend 2012 tax return Treat the contribution as having been made to the second IRA on the date that it was actually made to the first IRA. How to amend 2012 tax return No deduction allowed. How to amend 2012 tax return   You cannot deduct the contribution to the first IRA. How to amend 2012 tax return Any net income you transfer with the recharacterized contribution is treated as earned in the second IRA. How to amend 2012 tax return Required notifications. How to amend 2012 tax return   To recharacterize a contribution, you must notify both the trustee of the first IRA (the one to which the contribution was actually made) and the trustee of the second IRA (the one to which the contribution is being moved) that you have elected to treat the contribution as having been made to the second IRA rather than the first. How to amend 2012 tax return You must make the notifications by the date of the transfer. How to amend 2012 tax return Only one notification is required if both IRAs are maintained by the same trustee. How to amend 2012 tax return The notification(s) must include all of the following information. How to amend 2012 tax return The type and amount of the contribution to the first IRA that is to be recharacterized. How to amend 2012 tax return The date on which the contribution was made to the first IRA and the year for which it was made. How to amend 2012 tax return A direction to the trustee of the first IRA to transfer in a trustee-to-trustee transfer the amount of the contribution and any net income (or loss) allocable to the contribution to the trustee of the second IRA. How to amend 2012 tax return The name of the trustee of the first IRA and the name of the trustee of the second IRA. How to amend 2012 tax return Any additional information needed to make the transfer. How to amend 2012 tax return Reporting a recharacterization. How to amend 2012 tax return   If you elect to recharacterize a contribution to one IRA as a contribution to another IRA, you must report the recharacterization on your tax return as directed by Form 8606 and its instructions. How to amend 2012 tax return You must treat the contribution as having been made to the second IRA. How to amend 2012 tax return When Can You Withdraw or Use IRA Assets? There are rules limiting use of your IRA assets and distributions from it. How to amend 2012 tax return Violation of the rules generally results in additional taxes in the year of violation. How to amend 2012 tax return See What Acts Result in Penalties or Additional Taxes , later. How to amend 2012 tax return Contributions returned before the due date of return. How to amend 2012 tax return   If you made IRA contributions in 2013, you can withdraw them tax free by the due date of your return. How to amend 2012 tax return If you have an extension of time to file your return, you can withdraw them tax free by the extended due date. How to amend 2012 tax return You can do this if, for each contribution you withdraw, both of the following conditions apply. How to amend 2012 tax return You did not take a deduction for the contribution. How to amend 2012 tax return You withdraw any interest or other income earned on the contribution. How to amend 2012 tax return You can take into account any loss on the contribution while it was in the IRA when calculating the amount that must be withdrawn. How to amend 2012 tax return If there was a loss, the net income earned on the contribution may be a negative amount. How to amend 2012 tax return Note. How to amend 2012 tax return To calculate the amount you must withdraw, see Worksheet 1-4 under When Can You Withdraw or Use Assets? in chapter 1 of Publication 590. How to amend 2012 tax return Earnings includible in income. How to amend 2012 tax return   You must include in income any earnings on the contributions you withdraw. How to amend 2012 tax return Include the earnings in income for the year in which you made the contributions, not in the year in which you withdraw them. How to amend 2012 tax return Generally, except for any part of a withdrawal that is a return of nondeductible contributions (basis), any withdrawal of your contributions after the due date (or extended due date) of your return will be treated as a taxable distribution. How to amend 2012 tax return Excess contributions can also be recovered tax free as discussed under What Acts Result in Penalties or Additional Taxes?, later. How to amend 2012 tax return    Early distributions tax. How to amend 2012 tax return   The 10% additional tax on distributions made before you reach age 59½ does not apply to these tax-free withdrawals of your contributions. How to amend 2012 tax return However, the distribution of interest or other income must be reported on Form 5329 and, unless the distribution qualifies as an exception to the age 59½ rule, it will be subject to this tax. How to amend 2012 tax return When Must You Withdraw IRA Assets? (Required Minimum Distributions) You cannot keep funds in a traditional IRA indefinitely. How to amend 2012 tax return Eventually they must be distributed. How to amend 2012 tax return If there are no distributions, or if the distributions are not large enough, you may have to pay a 50% excise tax on the amount not distributed as required. How to amend 2012 tax return See Excess Accumulations (Insufficient Distributions) , later. How to amend 2012 tax return The requirements for distributing IRA funds differ depending on whether you are the IRA owner or the beneficiary of a decedent's IRA. How to amend 2012 tax return Required minimum distribution. How to amend 2012 tax return   The amount that must be distributed each year is referred to as the required minimum distribution. How to amend 2012 tax return Required distributions not eligible for rollover. How to amend 2012 tax return   Amounts that must be distributed (required minimum distributions) during a particular year are not eligible for rollover treatment. How to amend 2012 tax return IRA owners. How to amend 2012 tax return   If you are the owner of a traditional IRA, you must generally start receiving distributions from your IRA by April 1 of the year following the year in which you reach age 70½. How to amend 2012 tax return April 1 of the year following the year in which you reach age 70½ is referred to as the required beginning date. How to amend 2012 tax return Distributions by the required beginning date. How to amend 2012 tax return   You must receive at least a minimum amount for each year starting with the year you reach age 70½ (your 70½ year). How to amend 2012 tax return If you do not (or did not) receive that minimum amount in your 70½ year, then you must receive distributions for your 70½ year by April 1 of the next year. How to amend 2012 tax return   If an IRA owner dies after reaching age 70½, but before April 1 of the next year, no minimum distribution is required because death occurred before the required beginning date. How to amend 2012 tax return Even if you begin receiving distributions before you attain age 70½, you must begin calculating and receiving required minimum distributions by your required beginning date. How to amend 2012 tax return Distributions after the required beginning date. How to amend 2012 tax return   The required minimum distribution for any year after the year you turn 70½ must be made by December 31 of that later year. How to amend 2012 tax return    Beneficiaries. How to amend 2012 tax return   If you are the beneficiary of a decedent's traditional IRA, the requirements for distributions from that IRA generally depend on whether the IRA owner died before or after the required beginning date for distributions. How to amend 2012 tax return More information. How to amend 2012 tax return   For more information, including how to figure your minimum required distribution each year and how to figure your required distribution if you are a beneficiary of a decedent's IRA, see When Must You Withdraw Assets? in chapter 1 of Publication 590. How to amend 2012 tax return Are Distributions Taxable? In general, distributions from a traditional IRA are taxable in the year you receive them. How to amend 2012 tax return Exceptions. How to amend 2012 tax return   Exceptions to distributions from traditional IRAs being taxable in the year you receive them are: Rollovers, Qualified charitable distributions (QCD), discussed later, Tax-free withdrawals of contributions, discussed earlier, and The return of nondeductible contributions, discussed later under Distributions Fully or Partly Taxable . How to amend 2012 tax return    Although a conversion of a traditional IRA is considered a rollover for Roth IRA purposes, it is not an exception to the rule that distributions from a traditional IRA are taxable in the year you receive them. How to amend 2012 tax return Conversion distributions are includible in your gross income subject to this rule and the special rules for conversions explained in Converting From Any Traditional IRA Into a Roth IRA under Can You Move Retirement Plan Assets? in chapter 1 of Publication 590. How to amend 2012 tax return Qualified charitable distributions (QCD). How to amend 2012 tax return   A QCD is generally a nontaxable distribution made directly by the trustee of your IRA to an organization eligible to receive tax-deductible contributions. How to amend 2012 tax return Special rules apply if you made a qualified charitable distribution in January 2013 that you elected to treat as made in 2012. How to amend 2012 tax return See Qualified Charitable Distributions in Publication 590 for more information. How to amend 2012 tax return Ordinary income. How to amend 2012 tax return   Distributions from traditional IRAs that you include in income are taxed as ordinary income. How to amend 2012 tax return No special treatment. How to amend 2012 tax return   In figuring your tax, you cannot use the 10-year tax option or capital gain treatment that applies to lump-sum distributions from qualified retirement plans. How to amend 2012 tax return Distributions Fully or Partly Taxable Distributions from your traditional IRA may be fully or partly taxable, depending on whether your IRA includes any nondeductible contributions. How to amend 2012 tax return Fully taxable. How to amend 2012 tax return   If only deductible contributions were made to your traditional IRA (or IRAs, if you have more than one), you have no basis in your IRA. How to amend 2012 tax return Because you have no basis in your IRA, any distributions are fully taxable when received. How to amend 2012 tax return See Reporting taxable distributions on your return , later. How to amend 2012 tax return Partly taxable. How to amend 2012 tax return    If you made nondeductible contributions or rolled over any after-tax amounts to any of your traditional IRAs, you have a cost basis (investment in the contract) equal to the amount of those contributions. How to amend 2012 tax return These nondeductible contributions are not taxed when they are distributed to you. How to amend 2012 tax return They are a return of your investment in your IRA. How to amend 2012 tax return   Only the part of the distribution that represents nondeductible contributions and rolled over after-tax amounts (your cost basis) is tax free. How to amend 2012 tax return If nondeductible contributions have been made or after-tax amounts have been rolled over to your IRA, distributions consist partly of nondeductible contributions (basis) and partly of deductible contributions, earnings, and gains (if there are any). How to amend 2012 tax return Until all of your basis has been distributed, each distribution is partly nontaxable and partly taxable. How to amend 2012 tax return Form 8606. How to amend 2012 tax return   You must complete Form 8606 and attach it to your return if you receive a distribution from a traditional IRA and have ever made nondeductible contributions or rolled over after-tax amounts to any of your traditional IRAs. How to amend 2012 tax return Using the form, you will figure the nontaxable distributions for 2013 and your total IRA basis for 2013 and earlier years. How to amend 2012 tax return Note. How to amend 2012 tax return If you are required to file Form 8606, but you are not required to file an income tax return, you still must file Form 8606. How to amend 2012 tax return Send it to the IRS at the time and place you would otherwise file an income tax return. How to amend 2012 tax return Distributions reported on Form 1099-R. How to amend 2012 tax return   If you receive a distribution from your traditional IRA, you will receive Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. How to amend 2012 tax return , or a similar statement. How to amend 2012 tax return IRA distributions are shown in boxes 1 and 2a of Form 1099-R. How to amend 2012 tax return A number or letter code in box 7 tells you what type of distribution you received from your IRA. How to amend 2012 tax return Withholding. How to amend 2012 tax return   Federal income tax is withheld from distributions from traditional IRAs unless you choose not to have tax withheld. How to amend 2012 tax return See chapter 4. How to amend 2012 tax return IRA distributions delivered outside the United States. How to amend 2012 tax return   In general, if you are a U. How to amend 2012 tax return S. How to amend 2012 tax return citizen or resident alien and your home address is outside the United States or its possessions, you cannot choose exemption from withholding on distributions from your traditional IRA. How to amend 2012 tax return Reporting taxable distributions on your return. How to amend 2012 tax return    Report fully taxable distributions, including early distributions on Form 1040, line 15b, or Form 1040A, line 11b (no entry is required on Form 1040, line 15a, or Form 1040A, line 11a). How to amend 2012 tax return If only part of the distribution is taxable, enter the total amount on Form 1040, line 15a, or Form 1040A, line 11a, and the taxable part on Form 1040, line 15b, or Form 1040A, line 11b. How to amend 2012 tax return You cannot report distributions on Form 1040EZ. How to amend 2012 tax return What Acts Result in Penalties or Additional Taxes? The tax advantages of using traditional IRAs for retirement savings can be offset by additional taxes and penalties if you do not follow the rules. How to amend 2012 tax return There are additions to the regular tax for using your IRA funds in prohibited transactions. How to amend 2012 tax return There are also additional taxes for the following activities. How to amend 2012 tax return Investing in collectibles. How to amend 2012 tax return Making excess contributions. How to amend 2012 tax return Taking early distributions. How to amend 2012 tax return Allowing excess amounts to accumulate (failing to take required distributions). How to amend 2012 tax return There are penalties for overstating the amount of nondeductible contributions and for failure to file a Form 8606, if required. How to amend 2012 tax return Prohibited Transactions Generally, a prohibited transaction is any improper use of your traditional IRA by you, your beneficiary, or any disqualified person. How to amend 2012 tax return Disqualified persons include your fiduciary and members of your family (spouse, ancestor, lineal descendent, and any spouse of a lineal descendent). How to amend 2012 tax return The following are examples of prohibited transactions with a traditional IRA. How to amend 2012 tax return Borrowing money from it. How to amend 2012 tax return Selling property to it. How to amend 2012 tax return Receiving unreasonable compensation for managing it. How to amend 2012 tax return Using it as security for a loan. How to amend 2012 tax return Buying property for personal use (present or future) with IRA funds. How to amend 2012 tax return Effect on an IRA account. How to amend 2012 tax return   Generally, if you or your beneficiary engages in a prohibited transaction in connection with your traditional IRA account at any time during the year, the account stops being an IRA as of the first day of that year. How to amend 2012 tax return Effect on you or your beneficiary. How to amend 2012 tax return   If your account stops being an IRA because you or your beneficiary engaged in a prohibited transaction, the account is treated as distributing all its assets to you at their fair market values on the first day of the year. How to amend 2012 tax return If the total of those values is more than your basis in the IRA, you will have a taxable gain that is includible in your income. How to amend 2012 tax return For information on figuring your gain and reporting it in income, see Are Distributions Taxable , earlier. How to amend 2012 tax return The distribution may be subject to additional taxes or penalties. How to amend 2012 tax return Taxes on prohibited transactions. How to amend 2012 tax return   If someone other than the owner or beneficiary of a traditional IRA engages in a prohibited transaction, that person may be liable for certain taxes. How to amend 2012 tax return In general, there is a 15% tax on the amount of the prohibited transaction and a 100% additional tax if the transaction is not corrected. How to amend 2012 tax return More information. How to amend 2012 tax return   For more information on prohibited transactions, see What Acts Result in Penalties or Additional Taxes? in chapter 1 of Publication 590. How to amend 2012 tax return Investment in Collectibles If your traditional IRA invests in collectibles, the amount invested is considered distributed to you in the year invested. How to amend 2012 tax return You may have to pay the 10% additional tax on early distributions, discussed later. How to amend 2012 tax return Collectibles. How to amend 2012 tax return   These include: Artworks, Rugs, Antiques, Metals, Gems, Stamps, Coins, Alcoholic beverages, and Certain other tangible personal property. How to amend 2012 tax return Exception. How to amend 2012 tax return    Your IRA can invest in one, one-half, one-quarter, or one-tenth ounce U. How to amend 2012 tax return S. How to amend 2012 tax return gold coins, or one-ounce silver coins minted by the Treasury Department. How to amend 2012 tax return It can also invest in certain platinum coins and certain gold, silver, palladium, and platinum bullion. How to amend 2012 tax return Excess Contributions Generally, an excess contribution is the amount contributed to your traditional IRA(s) for the year that is more than the smaller of: The maximum deductible amount for the year. How to amend 2012 tax return For 2013, this is $5,500 ($6,500 if you are 50 or older), or Your taxable compensation for the year. How to amend 2012 tax return Tax on excess contributions. How to amend 2012 tax return   In general, if the excess contributions for a year are not withdrawn by the date your return for the year is due (including extensions), you are subject to a 6% tax. How to amend 2012 tax return You must pay the 6% tax each year on excess amounts that remain in your traditional IRA at the end of your tax year. How to amend 2012 tax return The tax cannot be more than 6% of the combined value of all your IRAs as of the end of your tax year. How to amend 2012 tax return Excess contributions withdrawn by due date of return. How to amend 2012 tax return   You will not have to pay the 6% tax if you withdraw an excess contribution made during a tax year and you also withdraw interest or other income earned on the excess contribution. How to amend 2012 tax return You must complete your withdrawal by the date your tax return for that year is due, including extensions. How to amend 2012 tax return How to treat withdrawn contributions. How to amend 2012 tax return   Do not include in your gross income an excess contribution that you withdraw from your traditional IRA before your tax return is due if both the following conditions are met. How to amend 2012 tax return No deduction was allowed for the excess contribution. How to amend 2012 tax return You withdraw the interest or other income earned on the excess contribution. How to amend 2012 tax return You can take into account any loss on the contribution while it was in the IRA when calculating the amount that must be withdrawn. How to amend 2012 tax return If there was a loss, the net income you must withdraw may be a negative amount. How to amend 2012 tax return How to treat withdrawn interest or other income. How to amend 2012 tax return   You must include in your gross income the interest or other income that was earned on the excess contribution. How to amend 2012 tax return Report it on your return for the year in which the excess contribution was made. How to amend 2012 tax return Your withdrawal of interest or other income may be subject to an additional 10% tax on early distributions, discus