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Il 1040x

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Il 1040x

Il 1040x 4. Il 1040x   Detailed Examples Table of Contents These examples use actual forms to help you prepare your income tax return. Il 1040x However, the information shown on the filled-in forms is not from any actual person or scenario. Il 1040x Example 1—Mortgage loan modification. Il 1040x    In 2007, Nancy Oak bought a main home for $435,000. Il 1040x Nancy took out a $420,000 mortgage loan to buy the home and made a down payment of $15,000. Il 1040x The loan was secured by the home. Il 1040x The mortgage loan was a recourse debt, meaning that Nancy was personally liable for the debt. Il 1040x In 2008, Nancy took out a second mortgage loan (also a recourse debt) in the amount of $30,000 that was used to substantially improve her kitchen. Il 1040x    In 2011, when the outstanding principal of the first and second mortgage loans was $440,000, Nancy refinanced the two recourse loans into one recourse loan in the amount of $475,000. Il 1040x The FMV of Nancy's home at the time of the refinancing was $500,000. Il 1040x Nancy used the additional $35,000 debt ($475,000 new mortgage loan minus $440,000 outstanding principal of Nancy's first and second mortgage loans immediately before the refinancing) to pay off personal credit cards and to pay college tuition for her son. Il 1040x After the refinancing, Nancy has qualified principal residence indebtedness in the amount of $440,000 because the refinanced debt is qualified principal residence indebtedness only to the extent the amount of debt is not more than the old mortgage principal just before the refinancing. Il 1040x   In 2013, Nancy was unable to make her mortgage loan payments. Il 1040x On August 31, 2013, when the outstanding balance of her refinanced mortgage loan was still $475,000 and the FMV of the property was $425,000, Nancy's bank agreed to a loan modification (a “workout”) that resulted in a $40,000 reduction in the principal balance of her loan. Il 1040x Nancy was neither insolvent nor in bankruptcy at the time of the loan modification. Il 1040x   Nancy received a 2013 Form 1099-C from her bank in January 2014 showing canceled debt of $40,000 in box 2. Il 1040x Identifiable event code "F" appears in box 6. Il 1040x This box shows the reason the creditor has filed Form 1099-C. Il 1040x To determine if she must include the canceled debt in her income, Nancy must determine whether she meets any of the exceptions or exclusions that apply to canceled debts. Il 1040x Nancy determines that the only exception or exclusion that applies to her is the qualified principal residence indebtedness exclusion. Il 1040x   Next, Nancy determines the amount, if any, of the $40,000 of canceled debt that was qualified principal residence indebtedness. Il 1040x Although Nancy has $440,000 of qualified principal residence indebtedness, part of her loan ($35,000) was not qualified principal residence indebtedness because it was used to pay off personal credit cards and college tuition for her son. Il 1040x Applying the ordering rule, the qualified principal residence indebtedness exclusion applies only to the extent the amount canceled is more than the amount of the debt (immediately before the cancellation) that is not qualified principal residence indebtedness. Il 1040x Thus, Nancy can exclude only $5,000 of the canceled debt as qualified principal residence indebtedness ($40,000 amount canceled minus $35,000 nonqualified debt). Il 1040x   Because Nancy does not meet any other exception or exclusion, she checks only the box on line 1e of Form 982 and enters $5,000 on line 2. Il 1040x Nancy must also enter $5,000 on line 10b and reduce the basis of her main home by the $5,000 she excluded from income, bringing the adjusted basis in her home to $460,000 ($435,000 purchase price plus $30,000 substantial improvement minus $5,000). Il 1040x Nancy must also include the $35,000 nonqualified debt portion in income on Form 1040, line 21. Il 1040x You can see Nancy's Form 1099-C and a portion of her Form 1040 below. Il 1040x Nancy's 2013 Form 1099-C, Cancellation of Debt This image is too large to be displayed in the current screen. Il 1040x Please click the link to view the image. Il 1040x Form 1099-C, Cancellation of Debt Nancy's 2013 Form 1040 This image is too large to be displayed in the current screen. Il 1040x Please click the link to view the image. Il 1040x Form 1040, U. Il 1040x S. Il 1040x Individual Income Tax Nancy's Form 982 This image is too large to be displayed in the current screen. Il 1040x Please click the link to view the image. Il 1040x Form 982 Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment)              Example 2—Mortgage loan foreclosure. Il 1040x    In 2005, John and Mary Elm bought a main home for $335,000. Il 1040x John and Mary took out a $320,000 mortgage loan to buy the home and made a down payment of $15,000. Il 1040x The loan was secured by the home and is a recourse debt, meaning John and Mary are personally liable for the debt. Il 1040x   John and Mary became unable to make their mortgage loan payments and on March 1, 2013, when the outstanding balance of the mortgage loan was $315,000 and the FMV of the property was $290,000, the bank foreclosed on the property and simultaneously canceled the remaining mortgage debt. Il 1040x Immediately before the foreclosure, John and Mary's only other assets and liabilities were a checking account with a balance of $6,000, retirement savings of $13,000, and credit card debt of $5,500. Il 1040x   John and Mary received a 2013 Form 1099-C showing canceled debt of $25,000 in box 2 ($315,000 outstanding balance minus $290,000 FMV) and an FMV of $290,000 in box 7. Il 1040x Identifiable event code "D" appears in box 6. Il 1040x This box shows the reason the creditor has filed Form 1099-C. Il 1040x In order to determine if John and Mary must include the canceled debt in income, they must first determine whether they meet any of the exceptions or exclusions that apply to canceled debts. Il 1040x In this example, John and Mary meet both the insolvency and qualified principal residence indebtedness exclusions. Il 1040x Their sample Form 1099-C is shown on this page. Il 1040x   John and Mary complete the insolvency worksheet and determine that they were insolvent immediately before the cancellation because at that time their liabilities exceeded the FMV of their assets by $11,500 ($320,500 total liabilities minus $309,000 FMV of total assets). Il 1040x However, because the entire debt canceled is qualified principal residence indebtedness, the insolvency exclusion only applies if John and Mary elect to apply the insolvency exclusion instead of the qualified principal residence exclusion. Il 1040x   John and Mary do not elect to apply the insolvency exclusion instead of the qualified principal residence exclusion because under the insolvency exclusion their exclusion would be limited to the amount by which they were insolvent ($11,500). Il 1040x Instead, John and Mary check box 1e of Form 982 to exclude the canceled debt under the qualified principal residence exclusion. Il 1040x Under the qualified principal residence exclusion, the amount that John and Mary can exclude is not limited because their qualified principal residence indebtedness is not more than $2 million and no portion of the loan was nonqualified debt. Il 1040x As a result, John and Mary enter the full $25,000 of canceled debt on line 2 of Form 982. Il 1040x Because John and Mary no longer own the home due to the foreclosure, John and Mary have no remaining basis in the home at the time of the debt cancellation. Il 1040x Thus, John and Mary leave line 10b of Form 982 blank. Il 1040x   John and Mary must also determine whether they have a gain or loss from the foreclosure. Il 1040x John and Mary complete Table 1-1 (shown below) and find that they have a $45,000 loss from the foreclosure. Il 1040x Because this loss relates to their home, it is a nondeductible loss. Il 1040x   John and Mary's Form 1099-C, Insolvency Worksheet, and Form 982 follow. Il 1040x John and Mary's 2013 Form 1099-C, Cancellation of Debt This image is too large to be displayed in the current screen. Il 1040x Please click the link to view the image. Il 1040x Form 1099-C, Cancellation of Debt Table 1-1. Il 1040x Worksheet for Foreclosures and Repossessions (for John and Mary Elm) Part 1. Il 1040x Complete Part 1 only if you were personally liable for the debt (even if none of the debt was canceled). Il 1040x Otherwise, go to Part 2. Il 1040x 1. Il 1040x Enter the amount of outstanding debt immediately before the transfer of property reduced by any amount for which you remain personally liable immediately after the transfer of property $315,000. Il 1040x 00 2. Il 1040x Enter the fair market value of the transferred property $290,000. Il 1040x 00 3. Il 1040x Ordinary income from the cancellation of debt upon foreclosure or repossession. Il 1040x * Subtract line 2 from line 1. Il 1040x If less than zero, enter zero. Il 1040x Next, go to Part 2 $ 25,000. Il 1040x 00 Part 2. Il 1040x Gain or loss from foreclosure or repossession. Il 1040x   4. Il 1040x Enter the smaller of line 1 or line 2. Il 1040x If you did not complete Part 1 (because you were not personally liable for the debt), enter the amount of outstanding debt immediately before the transfer of property $290,000. Il 1040x 00 5. Il 1040x Enter any proceeds you received from the foreclosure sale   6. Il 1040x Add line 4 and line 5 $290,000. Il 1040x 00 7. Il 1040x Enter the adjusted basis of the transferred property $335,000. Il 1040x 00 8. Il 1040x Gain or loss from foreclosure or repossession. Il 1040x Subtract line 7 from line 6 ($ 45,000. Il 1040x 00) * The income may not be taxable. Il 1040x See chapter 1 for more details. Il 1040x Insolvency Worksheet—John and Mary Elm Date debt was canceled (mm/dd/yy) 03/01/13 Part I. Il 1040x Total liabilities immediately before the cancellation (do not include the same liability in more than one category) Liabilities (debts) Amount Owed Immediately Before the Cancellation 1. Il 1040x Credit card debt $ 5,500 2. Il 1040x Mortgage(s) on real property (including first and second mortgages and home equity loans) (mortgage(s) can be on personal residence, any additional residence, or property held for investment or used in a trade or business) $ 315,000 3. Il 1040x Car and other vehicle loans $ 4. Il 1040x Medical bills owed $ 5. Il 1040x Student loans $ 6. Il 1040x Accrued or past-due mortgage interest $ 7. Il 1040x Accrued or past-due real estate taxes $ 8. Il 1040x Accrued or past-due utilities (water, gas, electric) $ 9. Il 1040x Accrued or past-due child care costs $ 10. Il 1040x Federal or state income taxes remaining due (for prior tax years) $ 11. Il 1040x Judgments $ 12. Il 1040x Business debts (including those owed as a sole proprietor or partner) $ 13. Il 1040x Margin debt on stocks and other debt to purchase or secured by investment assets other than real property $ 14. Il 1040x Other liabilities (debts) not included above $ 15. Il 1040x Total liabilities immediately before the cancellation. Il 1040x Add lines 1 through 14. Il 1040x $ 320,500 Part II. Il 1040x Fair market value (FMV) of assets owned immediately before the cancellation (do not include the FMV of the same asset in more than one category) Assets FMV Immediately Before  the Cancellation 16. Il 1040x Cash and bank account balances $ 6,000 17. Il 1040x Real property, including the value of land (can be main home, any additional home, or property held for investment or used in a trade or business) $ 290,000 18. Il 1040x Cars and other vehicles $ 19. Il 1040x Computers $ 20. Il 1040x Household goods and furnishings (for example, appliances, electronics, furniture, etc. Il 1040x ) $ 21. Il 1040x Tools $ 22. Il 1040x Jewelry $ 23. Il 1040x Clothing $ 24. Il 1040x Books $ 25. Il 1040x Stocks and bonds $ 26. Il 1040x Investments in coins, stamps, paintings, or other collectibles $ 27. Il 1040x Firearms, sports, photographic, and other hobby equipment $ 28. Il 1040x Interest in retirement accounts (IRA accounts, 401(k) accounts, and other retirement accounts) $ 13,000 29. Il 1040x Interest in a pension plan $ 30. Il 1040x Interest in education accounts $ 31. Il 1040x Cash value of life insurance $ 32. Il 1040x Security deposits with landlords, utilities, and others $ 33. Il 1040x Interests in partnerships $ 34. Il 1040x Value of investment in a business $ 35. Il 1040x Other investments (for example, annuity contracts, guaranteed investment contracts, mutual funds, commodity accounts, interests in hedge funds, and options) $ 36. Il 1040x Other assets not included above $ 37. Il 1040x FMV of total assets immediately before the cancellation. Il 1040x Add lines 16 through 36. Il 1040x $ 309,000 Part III. Il 1040x Insolvency 38. Il 1040x Amount of Insolvency. Il 1040x Subtract line 37 from line 15. Il 1040x If zero or less, you are not insolvent. Il 1040x $ 11,500 John and Mary's Form 982 This image is too large to be displayed in the current screen. Il 1040x Please click the link to view the image. Il 1040x Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment)          Example 3—Mortgage loan foreclosure with debt exceeding $2 million limit. Il 1040x    In 2011, Kathy and Frank Willow got married and entered into a contract with Hive Construction Corporation to build a house for $3,000,000 to be used as their main home. Il 1040x Kathy and Frank made a $400,000 down payment and took out a $2,600,000 mortgage to finance the remaining cost of the house. Il 1040x Kathy and Frank are personally liable for the mortgage loan, which is secured by the home. Il 1040x   In November 2013, when the outstanding principal balance on the mortgage loan was $2,500,000, the FMV of the property fell to $1,750,000 and Kathy and Frank abandoned the property by permanently moving out. Il 1040x The lender foreclosed on the property and, on December 5, 2013, sold the property to another buyer for $1,750,000. Il 1040x On December 26, 2013, the lender canceled the remaining debt. Il 1040x Kathy and Frank have no tax attributes other than basis of personal-use property. Il 1040x   The lender issued a 2013 Form 1099-C to Kathy and Frank showing canceled debt of $750,000 in box 2 (the remaining balance on the $2,500,000 mortgage debt after application of the foreclosure sale proceeds) and $1,750,000 in box 7 (FMV of the property). Il 1040x Identifiable event code "D" appears in box 6. Il 1040x This box shows the reason the creditor has filed Form 1099-C. Il 1040x Although Kathy and Frank abandoned the property, the lender did not need to also file a Form 1099-A because the lender canceled the debt in connection with the foreclosure in the same calendar year. Il 1040x Kathy and Frank are filing a joint return for 2013. Il 1040x   Because the foreclosure occurred prior to the debt cancellation, Kathy and Frank first calculate their gain or loss from the foreclosure using Table 1-1. Il 1040x Because Kathy and Frank remained personally liable for the $750,000 debt remaining after the foreclosure ($2,500,000 outstanding debt immediately before the foreclosure minus $1,750,000 satisfied through the sale of the home), Kathy and Frank enter $1,750,000 on line 1 of Table 1-1 ($2,500,000 outstanding debt immediately before the foreclosure minus the $750,000 for which they remained liable). Il 1040x Completing Table 1-1, Kathy and Frank find that they have no ordinary income from the cancellation of debt upon foreclosure and that they have a $1,250,000 loss. Il 1040x Because this loss relates to their home, it is a nondeductible loss. Il 1040x   Because the lender later canceled the remaining amount of the debt, Kathy and Frank must also determine whether that canceled debt is taxable. Il 1040x Immediately before the cancellation, Kathy and Frank had $15,000 in a savings account, household furnishings with an FMV of $17,000, a car with an FMV of $10,000, and $18,000 in credit card debt. Il 1040x Kathy and Frank also had the $750,000 remaining balance on the mortgage loan at that time. Il 1040x The household furnishings originally cost $30,000. Il 1040x The car had been fully paid off (so there was no related outstanding debt) and was originally purchased for $16,000. Il 1040x Kathy and Frank had no adjustments to the cost basis of the car. Il 1040x Kathy and Frank had no other assets or liabilities at the time of the cancellation. Il 1040x Kathy and Frank complete the insolvency worksheet to calculate that they were insolvent to the extent of $726,000 immediately before the cancellation ($768,000 of total liabilities minus $42,000 FMV of total assets). Il 1040x   At the beginning of 2014, Kathy and Frank had $9,000 in their savings account and $15,000 in credit card debt. Il 1040x Kathy and Frank also owned the same car at that time (still with an FMV of $10,000 and basis of $16,000) and the same household furnishings (still with an FMV of $17,000 and a basis of $30,000). Il 1040x Kathy and Frank had no other assets or liabilities at that time. Il 1040x Kathy and Frank no longer own the home because the lender foreclosed on it in 2013. Il 1040x   Because the canceled debt is qualified principal residence indebtedness, the insolvency exclusion does not apply unless Kathy and Frank elect to apply the insolvency exclusion instead of the qualified principal residence indebtedness exclusion. Il 1040x The maximum amount that Kathy and Frank can treat as qualified principal residence indebtedness is $2,000,000. Il 1040x The remaining $500,000 ($2,500,000 outstanding mortgage loan minus $2,000,000 limit on qualified principal residence indebtedness) is not qualified principal residence indebtedness. Il 1040x Because only a part of the loan is qualified principal residence indebtedness, Kathy and Frank must apply the ordering rule to the canceled debt. Il 1040x Under the ordering rule, the qualified principal residence indebtedness exclusion applies only to the extent that the amount canceled ($750,000) exceeds the amount of the loan (immediately before the cancellation) that is not qualified principal residence indebtedness ($500,000). Il 1040x This means that Kathy and Frank can only exclude $250,000 ($750,000 amount canceled minus $500,000 nonqualified debt) under the qualified principal residence indebtedness exclusion. Il 1040x   Kathy and Frank do not elect to have the insolvency exclusion apply instead of the qualified principal residence exclusion. Il 1040x Nonetheless, they can still apply the insolvency exclusion to the $500,000 nonqualified debt because it is not qualified principal residence indebtedness. Il 1040x Kathy and Frank can exclude the remaining $500,000 canceled debt under the insolvency exclusion because they were insolvent immediately before the cancellation to the extent of $726,000. Il 1040x Thus, Kathy and Frank check the boxes on lines 1b and 1e of Form 982 and enter $750,000 on line 2 ($250,000 excluded under the qualified principal residence indebtedness exclusion plus $500,000 excluded under the insolvency exclusion). Il 1040x   Next, Kathy and Frank reduce their tax attributes using Part II of Form 982. Il 1040x Because Kathy and Frank no longer own the home due to the foreclosure, Kathy and Frank have no remaining basis in the home at the time of the debt cancellation. Il 1040x Thus, Kathy and Frank leave line 10b of Form 982 blank. Il 1040x However, Kathy and Frank are also excluding nonqualified debt under the insolvency exclusion. Il 1040x As a result, Kathy and Frank must reduce the basis of property they own based on the amount of canceled debt they are excluding from income under the insolvency rules. Il 1040x Because Kathy and Frank have no tax attributes other than basis of personal-use property to reduce, Kathy and Frank figure the amount they must include on line 10a of Form 982 by taking the smallest of: The $46,000 bases of their personal-use property held at the beginning of 2014 ($16,000 basis in the car plus $30,000 basis in household furnishings), The $500,000 of the nonbusiness debt (other than qualified principal residence indebtedness) that they are excluding from income on line 2 of Form 982, or The $43,000 excess of the total bases of the property and the amount of money they held immediately after the cancellation over their total liabilities immediately after the cancellation ($15,000 in savings account plus $30,000 basis in household furnishings plus $16,000 adjusted basis in car minus $18,000 credit card debt). Il 1040x Kathy and Frank enter $43,000 on Form 982, line 10a and reduce their bases in the car and the household furnishings in proportion to the total adjusted bases in all their property. Il 1040x Kathy and Frank reduce the basis in the car by $14,956. Il 1040x 52 ($43,000 x $16,000/$46,000). Il 1040x And they reduce the basis in the household furnishings by $28,043. Il 1040x 48 ($43,000 x $30,000/$46,000). Il 1040x   Following are Kathy and Frank's sample forms and worksheets. Il 1040x Frank and Kathy's 2013 Form 1099-C, Cancellation of Debt This image is too large to be displayed in the current screen. Il 1040x Please click the link to view the image. Il 1040x Form 1099-C, Cancellation of Debt Table 1-1. Il 1040x Worksheet for Foreclosures and Repossessions (for Frank and Kathy Willow) Part 1. Il 1040x Complete Part 1 only if you were personally liable for the debt (even if none of the debt was canceled). Il 1040x Otherwise, go to Part 2. Il 1040x 1. Il 1040x Enter the amount of outstanding debt immediately before the transfer of property reduced by any amount for which you remain personally liable immediately after the transfer of property $1,750,000. Il 1040x 00 2. Il 1040x Enter the fair market value of the transferred property $1,750,000. Il 1040x 00 3. Il 1040x Ordinary income from the cancellation of debt upon foreclosure or repossession. Il 1040x * Subtract line 2 from line 1. Il 1040x If less than zero, enter zero. Il 1040x Next, go to Part 2 $0. Il 1040x 00 Part 2. Il 1040x Gain or loss from foreclosure or repossession. Il 1040x   4. Il 1040x Enter the smaller of line 1 or line 2. Il 1040x If you did not complete Part 1 (because you were not personally liable for the debt), enter the amount of outstanding debt immediately before the transfer of property. Il 1040x $1,750,000. Il 1040x 00 5. Il 1040x Enter any proceeds you received from the foreclosure sale   6. Il 1040x Add line 4 and line 5 $1,750,000. Il 1040x 00 7. Il 1040x Enter the adjusted basis of the transferred property $3,000,000. Il 1040x 00 8. Il 1040x Gain or loss from foreclosure or repossession. Il 1040x Subtract line 7 from line 6 ($1,250,000. Il 1040x 00) * The income may not be taxable. Il 1040x See chapter 1 for more details. Il 1040x    Insolvency Worksheet—Frank and Kathy Willow Date debt was canceled (mm/dd/yy) 12/26/13 Part I. Il 1040x Total liabilities immediately before the cancellation (do not include the same liability in more than one category) Liabilities (debts) Amount Owed Immediately Before the Cancellation 1. Il 1040x Credit card debt $ 18,000 2. Il 1040x Mortgage(s) on real property (including first and second mortgages and home equity loans) (mortgage(s) can be on personal residence, any additional residence, or property held for investment or used in a trade or business) $ 750,000 3. Il 1040x Car and other vehicle loans $ 4. Il 1040x Medical bills owed $ 5. Il 1040x Student loans $ 6. Il 1040x Accrued or past-due mortgage interest $ 7. Il 1040x Accrued or past-due real estate taxes $ 8. Il 1040x Accrued or past-due utilities (water, gas, electric) $ 9. Il 1040x Accrued or past-due child care costs $ 10. Il 1040x Federal or state income taxes remaining due (for prior tax years) $ 11. Il 1040x Judgments $ 12. Il 1040x Business debts (including those owed as a sole proprietor or partner) $ 13. Il 1040x Margin debt on stocks and other debt to purchase or secured by investment assets other than real property $ 14. Il 1040x Other liabilities (debts) not included above $ 15. Il 1040x Total liabilities immediately before the cancellation. Il 1040x Add lines 1 through 14. Il 1040x $ 768,000 Part II. Il 1040x Fair market value (FMV) of assets owned immediately before the cancellation (do not include the FMV of the same asset in more than one category) Assets FMV Immediately Before  the Cancellation 16. Il 1040x Cash and bank account balances $ 15,000 17. Il 1040x Real property, including the value of land (can be main home, any additional home, or property held for investment or used in a trade or business) $ 18. Il 1040x Cars and other vehicles $ 10,000 19. Il 1040x Computers $ 20. Il 1040x Household goods and furnishings (for example, appliances, electronics, furniture, etc. Il 1040x ) $ 17,000 21. Il 1040x Tools $ 22. Il 1040x Jewelry $ 23. Il 1040x Clothing $ 24. Il 1040x Books $ 25. Il 1040x Stocks and bonds $ 26. Il 1040x Investments in coins, stamps, paintings, or other collectibles $ 27. Il 1040x Firearms, sports, photographic, and other hobby equipment $ 28. Il 1040x Interest in retirement accounts (IRA accounts, 401(k) accounts, and other retirement accounts) $ 29. Il 1040x Interest in a pension plan $ 30. Il 1040x Interest in education accounts $ 31. Il 1040x Cash value of life insurance $ 32. Il 1040x Security deposits with landlords, utilities, and others $ 33. Il 1040x Interests in partnerships $ 34. Il 1040x Value of investment in a business $ 35. Il 1040x Other investments (for example, annuity contracts, guaranteed investment contracts, mutual funds, commodity accounts, interests in hedge funds, and options) $ 36. Il 1040x Other assets not included above $ 37. Il 1040x FMV of total assets immediately before the cancellation. Il 1040x Add lines 16 through 36. Il 1040x $ 42,000 Part III. Il 1040x Insolvency 38. Il 1040x Amount of Insolvency. Il 1040x Subtract line 37 from line 15. Il 1040x If zero or less, you are not insolvent. Il 1040x $ 726,000    Frank and Kathy's Form 982 This image is too large to be displayed in the current screen. Il 1040x Please click the link to view the image. Il 1040x Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment) Prev  Up  Next   Home   More Online Publications
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Understanding your CP259D Notice

We sent you this notice because our records indicate you did not file a required Form 990-T, Exempt Organization Business Income Tax Return.

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  • Disregard this notice if you have filed the return within the last four weeks using the same name and EIN listed on the notice.
  • Otherwise, file your required Form 990-T immediately according to the instructions on the notice.
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Answers to Common Questions

Who must file a Form 990-T?
Form 990-T must be filed by any organization that is tax-exempt under section 501(a) or section 529(a), if it has gross unrelated business income of $1,000 or more for a given tax year. A list of other entities who must file Form 990-T is shown in the Who Must File section of the General Instructions of Form 990-T.

When is the Form 990-T due?
For an employees' trust defined in section 401(a), an IRA (including SEPs and SIMPLEs), a Roth IRA, a Coverdell ESA, or an Archer MSA, the Form 990-T is due by the 15th day of the 4th month after the end of its tax year. All other organizations must file Form 990-T by the 15th day of the 5th month after the end of their tax year. If any due date falls on a Saturday, Sunday, or legal holiday, the organization can file the return on the next business day.

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If you have questions and/or need help completing this form, please call 1-877-829-5500. Personal assistance is available Monday through Friday, 7:00 a.m. to 7:00 p.m. CT.

Where can I go for more information about tax-exempt organizations?
For more information on tax-exempt organizations see Tax Information for Charities & Other Non-Profits.


Tips for next year

Review the tax-exempt organization resources at Form 990 Resources and Tools for Exempt Organizations.


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The Il 1040x

Il 1040x Part Six -   Cómo Calcular los Impuestos y Créditos Los ocho capítulos de esta sección explican cómo calcular sus impuestos y cómo calcular los impuestos de determinados hijos con ingresos no derivados del trabajo de $2,000 o más. Il 1040x Explican también créditos tributarios que, a diferencia de las deducciones, se restan directamente de los impuestos y los disminuyen, dólar por dólar. Il 1040x El capítulo 36 trata sobre el crédito por ingreso del trabajo y el capítulo 37 abarca una amplia gama de otros créditos, como por ejemplo, el crédito por adopción. Il 1040x Table of Contents 30. Il 1040x   Cómo Calcular los ImpuestosIntroduction Cómo Calcular los Impuestos Impuesto Mínimo Alternativo (AMT) Impuestos Calculados por el IRS Cómo Presentar la Declaración 31. Il 1040x   Impuesto sobre Ingresos No Derivados del Trabajo de Determinados Hijos¿Que Hay de Nuevo? Introduction Useful Items - You may want to see: Cómo Saber si se Tiene que Utilizar la Declaración del Padre o de la MadrePadres que no Presentan la Declaración Conjunta Elección de los Padres de Declarar los Intereses y Dividendos del HijoConsecuencias de Incluir los Ingresos del Hijo Cómo Calcular los Ingresos del Hijo Cómo Calcular el Impuesto Adicional Impuesto para Determinados Hijos con Ingresos No Derivados del TrabajoCómo Facilitar Información sobre los Padres (líneas A-C del Formulario 8615) Paso 1. Il 1040x Cómo Calcular los Ingresos Netos No Derivados del Trabajo del Hijo (Parte I del Formulario 8615) Paso 2. Il 1040x Cómo Calcular el Impuesto Provisional a la Tasa Impositiva de los Padres (Parte II del Formulario 8615) Paso 3. Il 1040x Cómo Calcular el Impuesto del Hijo (Parte III del Formulario 8615) 32. Il 1040x   Crédito por Gastos del Cuidado de Menores y DependientesRecordatorios Introduction Useful Items - You may want to see: Requisitos Para Reclamar el CréditoRequisitos de la Persona Calificada Requisito del Ingreso del Trabajo Requisito de Gastos Relacionados con el Trabajo Requisito de la Declaración Conjunta Requisito de Identificación del Proveedor de Cuidados Cómo Calcular el CréditoCómo Calcular el Total de los Gastos Relacionados con el Trabajo Límite del Ingreso del Trabajo Límite de Dinero Cantidad de Crédito Cómo Reclamar el CréditoCrédito tributario no reembolsable. Il 1040x Impuestos sobre la Nómina para Empleadores de Empleados Domésticos 33. Il 1040x   Crédito para Ancianos o Personas IncapacitadasIntroduction Useful Items - You may want to see: ¿Reúne los Requisitos del Crédito?Persona que Reúne los Requisitos Límites sobre los Ingresos Cómo Reclamar el CréditoEl Crédito Calculado por el IRS El Crédito Calculado por Usted Mismo 34. Il 1040x   Crédito Tributario por HijosIntroduction Useful Items - You may want to see: Hijo Calificado Cantidad de CréditoLímites del Crédito Cómo Reclamar el Crédito Crédito Tributario Adicional por Hijos Cómo Completar el Anexo 8812 (Formulario 1040A o Formulario 1040)Parte I Partes II a IV 35. Il 1040x   Créditos Tributarios por EstudiosIntroduction Useful Items - You may want to see: ¿Quién Puede Reclamar un Crédito Tributario por Estudios? Gastos de Estudios CalificadosNo se Permite Beneficio Doble Ajustes a los Gastos de Estudios Calificados 36. Il 1040x   Crédito por Ingreso del Trabajo (EIC) Qué Hay de Nuevo Recordatorios Introduction Useful Items - You may want to see: ¿Reúne los Requisitos para el Crédito?Si se Hizo una Solicitud Indebida del Crédito en un Año Anterior Parte A. Il 1040x Requisitos para TodosRequisito 1. Il 1040x Tiene que Tener Ingresos Brutos Ajustados Inferiores a: Requisito 2. Il 1040x Tiene que tener un número de Seguro Social válido Requisito 3. Il 1040x Su Estado Civil para Efectos de la Declaración no Puede Ser Casado que Presenta la Declaración por Separado Requisito 4. Il 1040x Tiene que Ser Ciudadano o Extranjero Residente de los Estados Unidos Durante Todo el Año Requisito 5. Il 1040x No Puede Presentar el Formulario 2555 ni el Formulario 2555-EZ Requisito 6. Il 1040x Tiene que Tener Ingresos de Inversiones de $3,300 o Menos Requisito 7. Il 1040x Tiene que Haber Recibido Ingresos del Trabajo Parte B. Il 1040x Requisitos si Tiene un Hijo CalificadoRequisito 8. Il 1040x Su Hijo Tiene que Cumplir los Requisitos de Parentesco, Edad, Residencia y de la Declaración Conjunta Requisito 9. Il 1040x Para Reclamar el Crédito por Ingreso del Trabajo, Sólo una Persona Puede Basarse en el Hijo Calificado de Usted Requisito 10. Il 1040x Otro Contribuyente no Puede Reclamarlo a Usted como Hijo Calificado Parte C. Il 1040x Requisitos si no Tiene un Hijo CalificadoRequisito 11. Il 1040x Tiene que Tener por lo Menos 25 Años pero Menos de 65 Años Requisito 12. Il 1040x No Puede Ser el Dependiente de Otra Persona Requisito 13. Il 1040x Otro Contribuyente no Puede Reclamarlo a Usted como Hijo Calificado Requisito 14. Il 1040x Tiene que Haber Vivido en los Estados Unidos durante más de la Mitad del Año Parte D. Il 1040x Cómo Calcular y Reclamar el Crédito por Ingreso del TrabajoRequisito 15. Il 1040x Su Ingreso del Trabajo Tiene que Ser Menos de: El IRS Puede Calcularle el Crédito por Ingreso del Trabajo Cómo Calcular Usted Mismo el Crédito por Ingreso del Trabajo EjemplosEjemplo 1. Il 1040x Juan y Julia Martínez (Formulario 1040A) Ejemplo 2. Il 1040x Carla Robles (Formulario 1040EZ) 37. Il 1040x   Otros CréditosQué Hay de Nuevo Introduction Useful Items - You may want to see: Créditos no ReembolsablesCrédito por Adopción Crédito por Vehículo Motorizado Alternativo Crédito por Bienes de Reabastecimiento de Vehículos con Combustible Alternativo Crédito para Titulares de Bonos de Crédito Tributario Crédito por Impuestos Extranjeros Crédito por Intereses Hipotecarios Crédito no Reembolsable del Impuesto Mínimo de Años Anteriores Crédito por Vehículos Enchufables con Motor de Dirección Eléctrica Créditos por Energía de la Propiedad Residencial Crédito por Aportaciones a Cuentas de Ahorro para la Jubilación (Crédito del Ahorrador) Créditos ReembolsablesCrédito por el Impuesto sobre Ganancias de Capital no Distribuidas Crédito Tributario por Cobertura del Seguro Médico Crédito por Retención en Exceso del Impuesto del Seguro Social o del Impuesto de la Jubilación Ferroviaria Prev  Up  Next   Home   More Online Publications