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Irs Filing Extension

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Irs Filing Extension

Irs filing extension 8. Irs filing extension   Gains and Losses Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: Sales and ExchangesDetermining Gain or Loss Like-Kind Exchanges Transfer to Spouse Ordinary or Capital Gain or LossCapital Assets Noncapital Assets Hedging (Commodity Futures) Livestock Converted Wetland and Highly Erodible Cropland Timber Sale of a Farm Foreclosure or Repossession Abandonment Introduction This chapter explains how to figure, and report on your tax return, your gain or loss on the disposition of your property or debt and whether such gain or loss is ordinary or capital. Irs filing extension Ordinary gain is taxed at the same rates as wages and interest income while capital gain is generally taxed at lower rates. Irs filing extension Dispositions discussed in this chapter include sales, exchanges, foreclosures, repossessions, canceled debts, hedging transactions, and elections to treat cutting of timber as a sale or exchange. Irs filing extension Topics - This chapter discusses: Sales and exchanges Ordinary or capital gain or loss Useful Items - You may want to see: Publication 334 Tax Guide for Small Business 523 Selling Your Home 544 Sales and Other Dispositions of Assets 550 Investment Income and Expenses 908 Bankruptcy Tax Guide Form (and Instructions) 982 Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment) Sch D (Form 1040) Capital Gains and Losses Sch F (Form 1040) Profit or Loss From Farming 1099-A Acquisition or Abandonment of Secured Property 1099-C Cancellation of Debt 4797 Sales of Business Property 8949 Sales and Other Dispositions of Capital Assets See chapter 16 for information about getting publications and forms. Irs filing extension Sales and Exchanges If you sell, exchange, or otherwise dispose of your property, you usually have a gain or a loss. Irs filing extension This section explains certain rules for determining whether any gain you have is taxable, and whether any loss you have is deductible. Irs filing extension A sale is a transfer of property for money or a mortgage, note, or other promise to pay money. Irs filing extension An exchange is a transfer of property for other property or services. Irs filing extension Determining Gain or Loss You usually realize a gain or loss when you sell or exchange property. Irs filing extension If the amount you realize from a sale or exchange of property is more than its adjusted basis, you will have a gain. Irs filing extension If the adjusted basis of the property is more than the amount you realize, you will have a loss. Irs filing extension Basis and adjusted basis. Irs filing extension   The basis of property you buy is usually its cost. Irs filing extension The adjusted basis of property is basis plus certain additions and minus certain deductions. Irs filing extension See chapter 6 for more information about basis and adjusted basis. Irs filing extension Amount realized. Irs filing extension   The amount you realize from a sale or exchange is the total of all money you receive plus the fair market value (FMV) (defined in chapter 6) of all property or services you receive. Irs filing extension The amount you realize also includes any of your liabilities assumed by the buyer and any liabilities to which the property you transferred is subject, such as real estate taxes or a mortgage. Irs filing extension   If the liabilities relate to an exchange of multiple properties, see Multiple Property Exchanges in chapter 1 of Publication 544. Irs filing extension Amount recognized. Irs filing extension   Your gain or loss realized from a sale or exchange of certain property is usually a recognized gain or loss for tax purposes. Irs filing extension A recognized gain is a gain you must include in gross income and report on your income tax return. Irs filing extension A recognized loss is a loss you deduct from gross income. Irs filing extension However, your gain or loss realized from the exchange of certain property may not be recognized for tax purposes. Irs filing extension See Like-Kind Exchanges next. Irs filing extension Also, a loss from the disposition of property held for personal use is not deductible. Irs filing extension Like-Kind Exchanges Certain exchanges of property are not taxable. Irs filing extension This means any gain from the exchange is not recognized, and any loss cannot be deducted. Irs filing extension Your gain or loss will not be recognized until you sell or otherwise dispose of the property you receive. Irs filing extension The exchange of property for the same kind of property is the most common type of nontaxable exchange. Irs filing extension To qualify for treatment as a like-kind exchange, the property traded and the property received must be both of the following. Irs filing extension Qualifying property. Irs filing extension Like-kind property. Irs filing extension These two requirements are discussed later. Irs filing extension Multiple-party transactions. Irs filing extension   The like-kind exchange rules also apply to property exchanges that involve three and four-party transactions. Irs filing extension Any part of these multiple-party transactions can qualify as a like-kind exchange if it meets all the requirements described in this section. Irs filing extension Receipt of title from third party. Irs filing extension   If you receive property in a like-kind exchange and the other party who transfers the property to you does not give you the title, but a third party does, you can still treat this transaction as a like-kind exchange if it meets all the requirements. Irs filing extension Basis of property received. Irs filing extension   If you receive property in a like-kind exchange, the basis of the property will be the same as the basis of the property you gave up. Irs filing extension See chapter 6 for more information. Irs filing extension Money paid. Irs filing extension   If, in addition to giving up like-kind property, you pay money in a like-kind exchange, you still have no recognized gain or loss. Irs filing extension The basis of the property received is the basis of the property given up, increased by the money paid. Irs filing extension Example. Irs filing extension You traded an old tractor with an adjusted basis of $15,000 for a new one. Irs filing extension The new tractor costs $300,000. Irs filing extension You were allowed $80,000 for the old tractor and paid $220,000 cash. Irs filing extension You have no recognized gain or loss on the transaction regardless of the adjusted basis of your old tractor and the basis of the new tractor is $235,000, the adjusted basis of the old tractor plus the cash paid ($15,000 + $220,000). Irs filing extension If you had sold the old tractor to a third party for $80,000 and bought a new one, you would have a recognized gain or loss on the sale of your old tractor equal to the difference between the amount realized and the adjusted basis of the old tractor. Irs filing extension In this case, the taxable gain would be $65,000 ($80,000 − $15,000) and the basis of the new tractor would be $300,000. Irs filing extension Reporting the exchange. Irs filing extension   Report the exchange of like-kind property, even though no gain or loss is recognized, on Form 8824, Like-Kind Exchanges. Irs filing extension The Instructions for Form 8824 explain how to report the details of the exchange. Irs filing extension   If you have any recognized gain because you received money or unlike property, report it on Schedule D (Form 1040) or Form 4797, whichever applies. Irs filing extension You may also have to report the recognized gain as ordinary income because of depreciation recapture on Form 4797. Irs filing extension See chapter 9 for more information. Irs filing extension Qualifying property. Irs filing extension   In a like-kind exchange, both the property you give up and the property you receive must be held by you for investment or for productive use in your trade or business. Irs filing extension Machinery, buildings, land, trucks, breeding livestock, rental houses, and certain mutual ditch, reservoir, or irrigation company stock are examples of property that may qualify. Irs filing extension Nonqualifying property. Irs filing extension   The rules for like-kind exchanges do not apply to exchanges of the following property. Irs filing extension Property you use for personal purposes, such as your home and family car. Irs filing extension Stock in trade or other property held primarily for sale, such as crops and produce. Irs filing extension Stocks, bonds, or notes. Irs filing extension However, see Qualifying property above. Irs filing extension Other securities or evidences of indebtedness, such as accounts receivable. Irs filing extension Partnership interests. Irs filing extension However, you may have a nontaxable exchange under other rules. Irs filing extension See Other Nontaxable Exchanges in chapter 1 of Publication 544. Irs filing extension Like-kind property. Irs filing extension   To qualify as a nontaxable exchange, the properties exchanged must be of like kind. Irs filing extension Like-kind properties are properties of the same nature or character, even if they differ in grade or quality. Irs filing extension Generally, real property exchanged for real property qualifies as an exchange of like-kind property. Irs filing extension For example, an exchange of city property for farm property or improved property for unimproved property is a like-kind exchange. Irs filing extension   An exchange of a tractor for a new tractor is an exchange of like-kind property, and so is an exchange of timber land for crop acreage. Irs filing extension An exchange of a tractor for acreage, however, is not an exchange of like-kind property. Irs filing extension The exchange of livestock of one sex for livestock of the other sex is not a like-kind exchange. Irs filing extension For example, the exchange of a bull for a cow is not a like-kind exchange. Irs filing extension An exchange of the assets of a business for the assets of a similar business cannot be treated as an exchange of one property for another property. Irs filing extension    Note. Irs filing extension Whether you engaged in a like-kind exchange depends on an analysis of each asset involved in the exchange. Irs filing extension Personal property. Irs filing extension   Depreciable tangible personal property can be either like kind or like class to qualify for nontaxable exchange treatment. Irs filing extension Like-class properties are depreciable tangible personal properties within the same General Asset Class or Product Class. Irs filing extension Property classified in any General Asset Class may not be classified within a Product Class. Irs filing extension Assets that are not in the same class will qualify as like-kind property if they are of the same nature or character. Irs filing extension General Asset Classes. Irs filing extension   General Asset Classes describe the types of property frequently used in many businesses. Irs filing extension They include, but are not limited to, the following property. Irs filing extension Office furniture, fixtures, and equipment (asset class 00. Irs filing extension 11). Irs filing extension Information systems, such as computers and peripheral equipment (asset class 00. Irs filing extension 12). Irs filing extension Data handling equipment except computers (asset class 00. Irs filing extension 13). Irs filing extension Automobiles and taxis (asset class 00. Irs filing extension 22). Irs filing extension Light general purpose trucks (asset class 00. Irs filing extension 241). Irs filing extension Heavy general purpose trucks (asset class 00. Irs filing extension 242). Irs filing extension Tractor units for use over-the-road (asset class 00. Irs filing extension 26). Irs filing extension Trailers and trailer-mounted containers (asset class 00. Irs filing extension 27). Irs filing extension Industrial steam and electric generation and/or distribution systems (asset class 00. Irs filing extension 4). Irs filing extension Product Classes. Irs filing extension   Product Classes include property listed in a 6-digit product class in sectors 31 through 33 of the North American Industry Classification System (NAICS) of the Executive Office of the President, Office of Management and Budget, United States, (NAICS Manual). Irs filing extension The latest version of the manual can be accessed at www. Irs filing extension census. Irs filing extension gov/eos/www/naics/. Irs filing extension Copies of the printed manual may be purchased from the National Technical Information Service (NTIS) at  www. Irs filing extension ntis. Irs filing extension gov/products/naics. Irs filing extension aspx or by calling 1-800-553-NTIS (1-800-553-6847) or (703) 605-6000. Irs filing extension A CD-ROM version with search and retrieval software is also available from NTIS. Irs filing extension    NAICS class 333111, Farm Machinery and Equipment Manufacturing, includes most machinery and equipment used in a farming business. Irs filing extension Partially nontaxable exchange. Irs filing extension   If, in addition to like-kind property, you receive money or unlike property in an exchange on which you realize gain, you have a partially nontaxable exchange. Irs filing extension You are taxed on the gain you realize, but only to the extent of the money and the FMV of the unlike property you receive. Irs filing extension A loss is not deductible. Irs filing extension Example 1. Irs filing extension You trade farmland that cost $30,000 for $10,000 cash and other land to be used in farming with a FMV of $50,000. Irs filing extension You have a realized gain of $30,000 ($50,000 FMV of new land + $10,000 cash − $30,000 basis of old farmland = $30,000 realized gain). Irs filing extension However, only $10,000, the cash received, is recognized (included in income). Irs filing extension Example 2. Irs filing extension Assume the same facts as in Example 1, except that, instead of money, you received a tractor with a FMV of $10,000. Irs filing extension Your recognized gain is still limited to $10,000, the value of the tractor (the unlike property). Irs filing extension Example 3. Irs filing extension Assume in Example 1 that the FMV of the land you received was only $15,000. Irs filing extension Your $5,000 loss is not recognized. Irs filing extension Unlike property given up. Irs filing extension   If, in addition to like-kind property, you give up unlike property, you must recognize gain or loss on the unlike property you give up. Irs filing extension The gain or loss is the difference between the FMV of the unlike property and the adjusted basis of the unlike property. Irs filing extension Like-kind exchanges between related persons. Irs filing extension   Special rules apply to like-kind exchanges between related persons. Irs filing extension These rules affect both direct and indirect exchanges. Irs filing extension Under these rules, if either person disposes of the property within 2 years after the exchange, the exchange is disqualified from nonrecognition treatment. Irs filing extension The gain or loss on the original exchange must be recognized as of the date of the later disposition. Irs filing extension The 2-year holding period begins on the date of the last transfer of property that was part of the like-kind exchange. Irs filing extension Related persons. Irs filing extension   Under these rules, related persons include, for example, you and a member of your family (spouse, brother, sister, parent, child, etc. Irs filing extension ), you and a corporation in which you have more than 50% ownership, you and a partnership in which you directly or indirectly own more than a 50% interest of the capital or profits, and two partnerships in which you directly or indirectly own more than 50% of the capital interests or profits. Irs filing extension   For the complete list of related persons, see Related persons in chapter 2 of Publication 544. Irs filing extension Example. Irs filing extension You used a grey pickup truck in your farming business. Irs filing extension Your sister used a red pickup truck in her landscaping business. Irs filing extension In December 2012, you exchanged your grey pickup truck, plus $200, for your sister's red pickup truck. Irs filing extension At that time, the FMV of the grey pickup truck was $7,000 and its adjusted basis was $6,000. Irs filing extension The FMV of the red pickup truck was $7,200 and its adjusted basis was $1,000. Irs filing extension You realized a gain of $1,000 (the $7,200 FMV of the red pickup truck, minus the grey pickup truck's $6,000 adjusted basis, minus the $200 you paid). Irs filing extension Your sister realized a gain of $6,200 (the $7,000 FMV of the grey pickup truck plus the $200 you paid, minus the $1,000 adjusted basis of the red pickup truck). Irs filing extension However, because this was a like-kind exchange, you recognized no gain. Irs filing extension Your basis in the red pickup truck was $6,200 (the $6,000 adjusted basis of the grey pickup truck plus the $200 you paid). Irs filing extension She recognized gain only to the extent of the money she received, $200. Irs filing extension Her basis in the grey pickup truck was $1,000 (the $1,000 adjusted basis of the red pickup truck minus the $200 received, plus the $200 gain recognized). Irs filing extension In 2013, you sold the red pickup truck to a third party for $7,000. Irs filing extension Because you sold it within 2 years after the exchange, the exchange is disqualified from nonrecognition treatment. Irs filing extension On your tax return for 2013, you must report your $1,000 gain on the 2012 exchange. Irs filing extension You also report a loss on the sale as $200 (the adjusted basis of the red pickup truck, $7,200 (its $6,200 basis plus the $1,000 gain recognized), minus the $7,000 realized from the sale). Irs filing extension In addition, your sister must report on her tax return for 2013 the $6,000 balance of her gain on the 2012 exchange. Irs filing extension Her adjusted basis in the grey pickup truck is increased to $7,000 (its $1,000 basis plus the $6,000 gain recognized). Irs filing extension Exceptions to the rules for related persons. Irs filing extension   The following property dispositions are excluded from these rules. Irs filing extension Dispositions due to the death of either related person. Irs filing extension Involuntary conversions. Irs filing extension Dispositions where it is established to the satisfaction of the IRS that neither the exchange nor the disposition has, as a main purpose, the avoidance of federal income tax. Irs filing extension Multiple property exchanges. Irs filing extension   Under the like-kind exchange rules, you must generally make a property-by-property comparison to figure your recognized gain and the basis of the property you receive in the exchange. Irs filing extension However, for exchanges of multiple properties, you do not make a property-by-property comparison if you do either of the following. Irs filing extension Transfer and receive properties in two or more exchange groups. Irs filing extension Transfer or receive more than one property within a single exchange group. Irs filing extension   For more information, see Multiple Property Exchanges in chapter 1 of Publication 544. Irs filing extension Deferred exchange. Irs filing extension   A deferred exchange for like-kind property may qualify for nonrecognition of gain or loss. Irs filing extension A deferred exchange is an exchange in which you transfer property you use in business or hold for investment and later receive like-kind property you will use in business or hold for investment. Irs filing extension The property you receive is replacement property. Irs filing extension The transaction must be an exchange of property for property rather than a transfer of property for money used to buy replacement property. Irs filing extension In addition, the replacement property will not be treated as like-kind property unless certain identification and receipt requirements are met. Irs filing extension   For more information see Deferred Exchanges in chapter 1 of Publication 544. Irs filing extension Transfer to Spouse No gain or loss is recognized on a transfer of property from an individual to (or in trust for the benefit of) a spouse, or a former spouse if incident to divorce. Irs filing extension This rule does not apply if the recipient is a nonresident alien. Irs filing extension Nor does this rule apply to a transfer in trust to the extent the liabilities assumed and the liabilities on the property are more than the property's adjusted basis. Irs filing extension Any transfer of property to a spouse or former spouse on which gain or loss is not recognized is not considered a sale or exchange. Irs filing extension The recipient's basis in the property will be the same as the adjusted basis of the giver immediately before the transfer. Irs filing extension This carryover basis rule applies whether the adjusted basis of the transferred property is less than, equal to, or greater than either its FMV at the time of transfer or any consideration paid by the recipient. Irs filing extension This rule applies for determining loss as well as gain. Irs filing extension Any gain recognized on a transfer in trust increases the basis. Irs filing extension For more information on transfers of property incident to divorce, see Property Settlements in Publication 504, Divorced or Separated Individuals. Irs filing extension Ordinary or Capital Gain or Loss Generally, you will have a capital gain or loss if you sell or exchange a capital asset (defined below). Irs filing extension You may also have a capital gain if your section 1231 transactions result in a net gain. Irs filing extension See Section 1231 Gains and Losses in  chapter 9. Irs filing extension To figure your net capital gain or loss, you must classify your gains and losses as either ordinary or capital (and your capital gains or losses as either short-term or long-term). Irs filing extension Your net capital gains may be taxed at a lower tax rate than ordinary income. Irs filing extension See Capital Gains Tax Rates , later. Irs filing extension Your deduction for a net capital loss may be limited. Irs filing extension See Treatment of Capital Losses , later. Irs filing extension Capital Assets Almost everything you own and use for personal purposes or investment is a capital asset. Irs filing extension The following items are examples of capital assets. Irs filing extension A home owned and occupied by you and your family. Irs filing extension Household furnishings. Irs filing extension A car used for pleasure. Irs filing extension If your car is used both for pleasure and for farm business, it is partly a capital asset and partly a noncapital asset, defined later. Irs filing extension Stocks and bonds. Irs filing extension However, there are special rules for gains on qualified small business stock. Irs filing extension For more information on this subject, see Gains on Qualified Small Business Stock and Losses on Section 1244 (Small Business) Stock in chapter 4 of Publication 550. Irs filing extension Personal-use property. Irs filing extension   Gain from a sale or exchange of personal-use property is a capital gain and is taxable. Irs filing extension Loss from the sale or exchange of personal-use property is not deductible. Irs filing extension You can deduct a loss relating to personal-use property only if it results from a casualty or theft. Irs filing extension For information on casualties and thefts, see chapter 11. Irs filing extension Long and Short Term Where you report a capital gain or loss depends on how long you own the asset before you sell or exchange it. Irs filing extension The time you own an asset before disposing of it is the holding period. Irs filing extension If you hold a capital asset 1 year or less, the gain or loss resulting from its disposition is short term. Irs filing extension Report it in Part I of Schedule D (Form 1040). Irs filing extension If you hold a capital asset longer than 1 year, the gain or loss resulting from its disposition is long term. Irs filing extension Report it in Part II of Schedule D (Form 1040). Irs filing extension Holding period. Irs filing extension   To figure if you held property longer than 1 year, start counting on the day after the day you acquired the property. Irs filing extension The day you disposed of the property is part of your holding period. Irs filing extension Example. Irs filing extension If you bought an asset on June 19, 2012, you should start counting on June 20, 2012. Irs filing extension If you sold the asset on June 19, 2013, your holding period is not longer than 1 year, but if you sold it on June 20, 2013, your holding period is longer than 1 year. Irs filing extension Inherited property. Irs filing extension   If you inherit property, you are considered to have held the property longer than 1 year, regardless of how long you actually held it. Irs filing extension This rule does not apply to livestock used in a farm business. Irs filing extension See Holding period under Livestock , later. Irs filing extension Nonbusiness bad debt. Irs filing extension   A nonbusiness bad debt is a short-term capital loss, deductible in the year the debt becomes worthless. Irs filing extension See chapter 4 of Publication 550. Irs filing extension Nontaxable exchange. Irs filing extension   If you acquire an asset in exchange for another asset and your basis for the new asset is figured, in whole or in part, by using your basis in the old property, the holding period of the new property includes the holding period of the old property. Irs filing extension That is, it begins on the same day as your holding period for the old property. Irs filing extension Gift. Irs filing extension   If you receive a gift of property and your basis in it is figured using the donor's basis, your holding period includes the donor's holding period. Irs filing extension Real property. Irs filing extension   To figure how long you held real property, start counting on the day after you received title to it or, if earlier, on the day after you took possession of it and assumed the burdens and privileges of ownership. Irs filing extension   However, taking possession of real property under an option agreement is not enough to start the holding period. Irs filing extension The holding period cannot start until there is an actual contract of sale. Irs filing extension The holding period of the seller cannot end before that time. Irs filing extension Figuring Net Gain or Loss The totals for short-term capital gains and losses and the totals for long-term capital gains and losses must be figured separately. Irs filing extension Net short-term capital gain or loss. Irs filing extension   Combine your short-term capital gains and losses. Irs filing extension Do this by adding all of your short-term capital gains. Irs filing extension Then add all of your short-term capital losses. Irs filing extension Subtract the lesser total from the greater. Irs filing extension The difference is your net short-term capital gain or loss. Irs filing extension Net long-term capital gain or loss. Irs filing extension   Follow the same steps to combine your long-term capital gains and losses. Irs filing extension The result is your net long-term capital gain or loss. Irs filing extension Net gain. Irs filing extension   If the total of your capital gains is more than the total of your capital losses, the difference is taxable. Irs filing extension However, part of your gain (but not more than your net capital gain) may be taxed at a lower rate than the rate of tax on your ordinary income. Irs filing extension See Capital Gains Tax Rates , later. Irs filing extension Net loss. Irs filing extension   If the total of your capital losses is more than the total of your capital gains, the difference is deductible. Irs filing extension But there are limits on how much loss you can deduct and when you can deduct it. Irs filing extension See Treatment of Capital Losses next. Irs filing extension Treatment of Capital Losses If your capital losses are more than your capital gains, you must claim the difference even if you do not have ordinary income to offset it. Irs filing extension For taxpayers other than corporations, the yearly limit on the capital loss you can deduct is $3,000 ($1,500 if you are married and file a separate return). Irs filing extension If your other income is low, you may not be able to use the full $3,000. Irs filing extension The part of the $3,000 you cannot use becomes part of your capital loss carryover (discussed next). Irs filing extension Capital loss carryover. Irs filing extension   Generally, you have a capital loss carryover if either of the following situations applies to you. Irs filing extension Your net loss on Schedule D (Form 1040), is more than the yearly limit. Irs filing extension Your taxable income without your deduction for exemptions is less than zero. Irs filing extension If either of these situations applies to you for 2013, see Capital Losses under Reporting Capital Gains and Losses in chapter 4 of Publication 550 to figure the amount you can carry over to 2014. Irs filing extension    To figure your capital loss carryover from 2013 to 2014, you will need a copy of your 2013 Form 1040 and Schedule D (Form 1040). Irs filing extension Capital Gains Tax Rates The tax rates that apply to a net capital gain are generally lower than the tax rates that apply to other income. Irs filing extension These lower rates are called the maximum capital gains rates. Irs filing extension The term “net capital gain” means the amount by which your net long-term capital gain for the year is more than your net short-term capital loss. Irs filing extension See Schedule D (Form 1040) and the Instructions for Schedule D (Form 1040). Irs filing extension Also see Publication 550. Irs filing extension Noncapital Assets Noncapital assets include property such as inventory and depreciable property used in a trade or business. Irs filing extension A list of properties that are not capital assets is provided in the Instructions for Schedule D (Form 1040). Irs filing extension Property held for sale in the ordinary course of your farm business. Irs filing extension   Property you hold mainly for sale to customers, such as livestock, poultry, livestock products, and crops, is a noncapital asset. Irs filing extension Gain or loss from sales or other dispositions of this property is reported on Schedule F (Form 1040) (not on Schedule D (Form 1040) or Form 4797). Irs filing extension The treatment of this property is discussed in chapter 3. Irs filing extension Land and depreciable properties. Irs filing extension   Land and depreciable property you use in farming are not capital assets. Irs filing extension Noncapital assets also include livestock held for draft, breeding, dairy, or sporting purposes. Irs filing extension However, your gains and losses from sales and exchanges of your farmland and depreciable properties must be considered together with certain other transactions to determine whether the gains and losses are treated as capital or ordinary gains and losses. Irs filing extension The sales of these business assets are reported on Form 4797. Irs filing extension See chapter 9 for more information. Irs filing extension Hedging (Commodity Futures) Hedging transactions are transactions that you enter into in the normal course of business primarily to manage the risk of interest rate or price changes, or currency fluctuations, with respect to borrowings, ordinary property, or ordinary obligations. Irs filing extension Ordinary property or obligations are those that cannot produce capital gain or loss if sold or exchanged. Irs filing extension A commodity futures contract is a standardized, exchange-traded contract for the sale or purchase of a fixed amount of a commodity at a future date for a fixed price. Irs filing extension The holder of an option on a futures contract has the right (but not the obligation) for a specified period of time to enter into a futures contract to buy or sell at a particular price. Irs filing extension A forward contract is generally similar to a futures contract except that the terms are not standardized and the contract is not exchange traded. Irs filing extension Businesses may enter into commodity futures contracts or forward contracts and may acquire options on commodity futures contracts as either of the following. Irs filing extension Hedging transactions. Irs filing extension Transactions that are not hedging transactions. Irs filing extension Futures transactions with exchange-traded commodity futures contracts that are not hedging transactions, generally, result in capital gain or loss and are subject to the mark-to-market rules discussed in Publication 550. Irs filing extension There is a limit on the amount of capital losses you can deduct each year. Irs filing extension Hedging transactions are not subject to the mark-to-market rules. Irs filing extension If, as a farmer-producer, to protect yourself from the risk of unfavorable price fluctuations, you enter into commodity forward contracts, futures contracts, or options on futures contracts and the contracts cover an amount of the commodity within your range of production, the transactions are generally considered hedging transactions. Irs filing extension They can take place at any time you have the commodity under production, have it on hand for sale, or reasonably expect to have it on hand. Irs filing extension The gain or loss on the termination of these hedges is generally ordinary gain or loss. Irs filing extension Farmers who file their income tax returns on the cash method report any profit or loss on the hedging transaction on Schedule F, line 8. Irs filing extension Gains or losses from hedging transactions that hedge supplies of a type regularly used or consumed in the ordinary course of your trade or business may be ordinary gains or losses. Irs filing extension Examples include fuel and feed. Irs filing extension If you have numerous transactions in the commodity futures market during the year, you must be able to show which transactions are hedging transactions. Irs filing extension Clearly identify a hedging transaction on your books and records before the end of the day you entered into the transaction. Irs filing extension It may be helpful to have separate brokerage accounts for your hedging and speculation transactions. Irs filing extension Retain the identification of each hedging transaction with your books and records. Irs filing extension Also, identify the item(s) or aggregate risk that is being hedged in your records. Irs filing extension Although the identification of the hedging transaction must be made before the end of the day it was entered into, you have 35 days after entering into the transaction to identify the hedged item(s) or risk. Irs filing extension For more information on the tax treatment of futures and options contracts, see Commodity Futures and Section 1256 Contracts Marked to Market in Publication 550. Irs filing extension Accounting methods for hedging transactions. Irs filing extension   The accounting method you use for a hedging transaction must clearly reflect income. Irs filing extension This means that your accounting method must reasonably match the timing of income, deduction, gain, or loss from a hedging transaction with the timing of income, deduction, gain, or loss from the item or items being hedged. Irs filing extension There are requirements and limits on the method you can use for certain hedging transactions. Irs filing extension See Regulations section 1. Irs filing extension 446-4(e) for those requirements and limits. Irs filing extension   Hedging transactions must be accounted for under the rules stated above unless the transaction is subject to mark-to-market accounting under section 475 or you use an accounting method other than the following methods. Irs filing extension Cash method. Irs filing extension Farm-price method. Irs filing extension Unit-livestock-price method. Irs filing extension   Once you adopt a method, you must apply it consistently and must have IRS approval before changing it. Irs filing extension   Your books and records must describe the accounting method used for each type of hedging transaction. Irs filing extension They must also contain any additional identification necessary to verify the application of the accounting method you used for the transaction. Irs filing extension You must make the additional identification no more than 35 days after entering into the hedging transaction. Irs filing extension Example of a hedging transaction. Irs filing extension   You file your income tax returns on the cash method. Irs filing extension On July 2 you anticipate a yield of 50,000 bushels of corn this year. Irs filing extension The December futures price is $5. Irs filing extension 75 a bushel, but there are indications that by harvest time the price will drop. Irs filing extension To protect yourself against a drop in the price, you enter into the following hedging transaction. Irs filing extension You sell ten December futures contracts of 5,000 bushels each for a total of 50,000 bushels of corn at $5. Irs filing extension 75 a bushel. Irs filing extension   The price did not drop as anticipated but rose to $6 a bushel. Irs filing extension In November, you sell your crop at a local elevator for $6 a bushel. Irs filing extension You also close out your futures position by buying ten December contracts for $6 a bushel. Irs filing extension You paid a broker's commission of $1,400 ($70 per contract) for the complete in and out position in the futures market. Irs filing extension   The result is that the price of corn rose 25 cents a bushel and the actual selling price is $6 a bushel. Irs filing extension Your loss on the hedge is 25 cents a bushel. Irs filing extension In effect, the net selling price of your corn is $5. Irs filing extension 75 a bushel. Irs filing extension   Report the results of your futures transactions and your sale of corn separately on Schedule F. Irs filing extension See the instructions for the 2013 Schedule F (Form 1040). Irs filing extension   The loss on your futures transactions is $13,900, figured as follows. Irs filing extension July 2 - Sold December corn futures (50,000 bu. Irs filing extension @$5. Irs filing extension 75) $287,500 November 6 - Bought December corn futures (50,000 bu. Irs filing extension @$6 plus $1,400 broker's commission) 301,400 Futures loss ($13,900) This loss is reported as a negative figure on Schedule F, Part I, line 8, as other income. Irs filing extension   The proceeds from your corn sale at the local elevator are $300,000 (50,000 bu. Irs filing extension × $6). Irs filing extension Report it on Schedule F, Part I, line 2, as income from sales of products you raised. Irs filing extension   Assume you were right and the price went down 25 cents a bushel. Irs filing extension In effect, you would still net $5. Irs filing extension 75 a bushel, figured as follows. Irs filing extension Sold cash corn, per bushel $5. Irs filing extension 50 Gain on hedge, per bushel . Irs filing extension 25 Net price, per bushel $5. Irs filing extension 75       The gain on your futures transactions would have been $11,100, figured as follows. Irs filing extension July 2 - Sold December corn futures (50,000 bu. Irs filing extension @$5. Irs filing extension 75) $287,500 November 6 - Bought December corn futures (50,000 bu. Irs filing extension @$5. Irs filing extension 50 plus $1,400 broker's commission) 276,400 Futures gain $11,100 The $11,100 is reported on Schedule F, Part I, line 8, as other income. Irs filing extension   The proceeds from the sale of your corn at the local elevator, $275,000, are reported on Schedule F, Part I, line 2, as income from sales of products you raised. Irs filing extension Livestock This part discusses the sale or exchange of livestock used in your farm business. Irs filing extension Gain or loss from the sale or exchange of this livestock may qualify as a section 1231 gain or loss. Irs filing extension However, any part of the gain that is ordinary income from the recapture of depreciation is not included as section 1231 gain. Irs filing extension See chapter 9 for more information on section 1231 gains and losses and the recapture of depreciation under section 1245. Irs filing extension The rules discussed here do not apply to the sale of livestock held primarily for sale to customers. Irs filing extension The sale of this livestock is reported on Schedule F. Irs filing extension See chapter 3. Irs filing extension Also, special rules apply to sales or exchanges caused by weather-related conditions. Irs filing extension See chapter 3. Irs filing extension Holding period. Irs filing extension   The sale or exchange of livestock used in your farm business (defined below) qualifies as a section 1231 transaction if you held the livestock for 12 months or more (24 months or more for horses and cattle). Irs filing extension Livestock. Irs filing extension   For section 1231 transactions, livestock includes cattle, hogs, horses, mules, donkeys, sheep, goats, fur-bearing animals, and other mammals. Irs filing extension Also, for section 1231 transactions, livestock does not include chickens, turkeys, pigeons, geese, emus, ostriches, rheas, or other birds, fish, frogs, reptiles, etc. Irs filing extension Livestock used in farm business. Irs filing extension   If livestock is held primarily for draft, breeding, dairy, or sporting purposes, it is used in your farm business. Irs filing extension The purpose for which an animal is held ordinarily is determined by a farmer's actual use of the animal. Irs filing extension An animal is not held for draft, breeding, dairy, or sporting purposes merely because it is suitable for that purpose, or because it is held for sale to other persons for use by them for that purpose. Irs filing extension However, a draft, breeding, or sporting purpose may be present if an animal is disposed of within a reasonable time after it is prevented from its intended use or made undesirable as a result of an accident, disease, drought, or unfitness of the animal. Irs filing extension Example 1. Irs filing extension You discover an animal that you intend to use for breeding purposes is sterile. Irs filing extension You dispose of it within a reasonable time. Irs filing extension This animal was held for breeding purposes. Irs filing extension Example 2. Irs filing extension You retire and sell your entire herd, including young animals that you would have used for breeding or dairy purposes had you remained in business. Irs filing extension These young animals were held for breeding or dairy purposes. Irs filing extension Also, if you sell young animals to reduce your breeding or dairy herd because of drought, these animals are treated as having been held for breeding or dairy purposes. Irs filing extension See Sales Caused by Weather-Related Conditions in chapter 3. Irs filing extension Example 3. Irs filing extension You are in the business of raising hogs for slaughter. Irs filing extension Customarily, before selling your sows, you obtain a single litter of pigs that you will raise for sale. Irs filing extension You sell the brood sows after obtaining the litter. Irs filing extension Even though you hold these brood sows for ultimate sale to customers in the ordinary course of your business, they are considered to be held for breeding purposes. Irs filing extension Example 4. Irs filing extension You are in the business of raising registered cattle for sale to others for use as breeding cattle. Irs filing extension The business practice is to breed the cattle before sale to establish their fitness as registered breeding cattle. Irs filing extension Your use of the young cattle for breeding purposes is ordinary and necessary for selling them as registered breeding cattle. Irs filing extension Such use does not demonstrate that you are holding the cattle for breeding purposes. Irs filing extension However, those cattle you held as additions or replacements to your own breeding herd to produce calves are considered to be held for breeding purposes, even though they may not actually have produced calves. Irs filing extension The same applies to hog and sheep breeders. Irs filing extension Example 5. Irs filing extension You breed, raise, and train horses for racing purposes. Irs filing extension Every year you cull horses from your racing stable. Irs filing extension In 2013, you decided that to prevent your racing stable from getting too large to be effectively operated, you must cull six horses that had been raced at public tracks in 2012. Irs filing extension These horses are all considered held for sporting purposes. Irs filing extension Figuring gain or loss on the cash method. Irs filing extension   Farmers or ranchers who use the cash method of accounting figure their gain or loss on the sale of livestock used in their farming business as follows. Irs filing extension Raised livestock. Irs filing extension   Gain on the sale of raised livestock is generally the gross sales price reduced by any expenses of the sale. Irs filing extension Expenses of sale include sales commissions, freight or hauling from farm to commission company, and other similar expenses. Irs filing extension The basis of the animal sold is zero if the costs of raising it were deducted during the years the animal was being raised. Irs filing extension However, see Uniform Capitalization Rules in chapter 6. Irs filing extension Purchased livestock. Irs filing extension   The gross sales price minus your adjusted basis and any expenses of sale is the gain or loss. Irs filing extension Example. Irs filing extension A farmer sold a breeding cow on January 8, 2013, for $1,250. Irs filing extension Expenses of the sale were $125. Irs filing extension The cow was bought July 2, 2009, for $1,300. Irs filing extension Depreciation (not less than the amount allowable) was $867. Irs filing extension Gross sales price $1,250 Cost (basis) $1,300   Minus: Depreciation deduction 867   Unrecovered cost (adjusted basis) $ 433   Expense of sale 125 558 Gain realized $ 692 Converted Wetland and Highly Erodible Cropland Special rules apply to dispositions of land converted to farming use after March 1, 1986. Irs filing extension Any gain realized on the disposition of converted wetland or highly erodible cropland is treated as ordinary income. Irs filing extension Any loss on the disposition of such property is treated as a long-term capital loss. Irs filing extension Converted wetland. Irs filing extension   This is generally land that was drained or filled to make the production of agricultural commodities possible. Irs filing extension It includes converted wetland held by the person who originally converted it or held by any other person who used the converted wetland at any time after conversion for farming. Irs filing extension   A wetland (before conversion) is land that meets all the following conditions. Irs filing extension It is mostly soil that, in its undrained condition, is saturated, flooded, or ponded long enough during a growing season to develop an oxygen-deficient state that supports the growth and regeneration of plants growing in water. Irs filing extension It is saturated by surface or groundwater at a frequency and duration sufficient to support mostly plants that are adapted for life in saturated soil. Irs filing extension It supports, under normal circumstances, mostly plants that grow in saturated soil. Irs filing extension Highly erodible cropland. Irs filing extension   This is cropland subject to erosion that you used at any time for farming purposes other than grazing animals. Irs filing extension Generally, highly erodible cropland is land currently classified by the Department of Agriculture as Class IV, VI, VII, or VIII under its classification system. Irs filing extension Highly erodible cropland also includes land that would have an excessive average annual erosion rate in relation to the soil loss tolerance level, as determined by the Department of Agriculture. Irs filing extension Successor. Irs filing extension   Converted wetland or highly erodible cropland is also land held by any person whose basis in the land is figured by reference to the adjusted basis of a person in whose hands the property was converted wetland or highly erodible cropland. Irs filing extension Timber Standing timber you held as investment property is a capital asset. Irs filing extension Gain or loss from its sale is capital gain or loss reported on Form 8949 and Schedule D (Form 1040), as applicable. Irs filing extension If you held the timber primarily for sale to customers, it is not a capital asset. Irs filing extension Gain or loss on its sale is ordinary business income or loss. Irs filing extension It is reported on Schedule F, line 1 (purchased timber) or line 2 (raised timber). Irs filing extension See the Instructions for Schedule F (Form 1040). Irs filing extension Farmers who cut timber on their land and sell it as logs, firewood, or pulpwood usually have no cost or other basis for that timber. Irs filing extension Amounts realized from these sales, and the expenses incurred in cutting, hauling, etc. Irs filing extension , are ordinary farm income and expenses reported on Schedule F. Irs filing extension Different rules apply if you owned the timber longer than 1 year and elect to treat timber cutting as a sale or exchange or you enter into a cutting contract, discussed below. Irs filing extension Timber considered cut. Irs filing extension   Timber is considered cut on the date when, in the ordinary course of business, the quantity of felled timber is first definitely determined. Irs filing extension This is true whether the timber is cut under contract or whether you cut it yourself. Irs filing extension Christmas trees. Irs filing extension   Evergreen trees, such as Christmas trees, that are more than 6 years old when severed from their roots and sold for ornamental purposes are included in the term timber. Irs filing extension They qualify for both rules discussed below. Irs filing extension Election to treat cutting as a sale or exchange. Irs filing extension   Under the general rule, the cutting of timber results in no gain or loss. Irs filing extension It is not until a sale or exchange occurs that gain or loss is realized. Irs filing extension But if you owned or had a contractual right to cut timber, you can elect to treat the cutting of timber as a section 1231 transaction in the year it is cut. Irs filing extension Even though the cut timber is not actually sold or exchanged, you report your gain or loss on the cutting for the year the timber is cut. Irs filing extension Any later sale results in ordinary business income or loss. Irs filing extension See the example below. Irs filing extension   To elect this treatment, you must: Own or hold a contractual right to cut the timber for a period of more than 1 year before it is cut, and Cut the timber for sale or use in your trade or business. Irs filing extension Making the election. Irs filing extension   You make the election on your return for the year the cutting takes place by including in income the gain or loss on the cutting and including a computation of your gain or loss. Irs filing extension You do not have to make the election in the first year you cut the timber. Irs filing extension You can make it in any year to which the election would apply. Irs filing extension If the timber is partnership property, the election is made on the partnership return. Irs filing extension This election cannot be made on an amended return. Irs filing extension   Once you have made the election, it remains in effect for all later years unless you revoke it. Irs filing extension Election under section 631(a) may be revoked. Irs filing extension   If you previously elected for any tax year ending before October 23, 2004, to treat the cutting of timber as a sale or exchange under section 631(a), you may revoke this election without the consent of the IRS for any tax year ending after October 22, 2004. Irs filing extension The prior election (and revocation) is disregarded for purposes of making a subsequent election. Irs filing extension See Form T (Timber), Forest Activities Schedule, for more information. Irs filing extension Gain or loss. Irs filing extension   Your gain or loss on the cutting of standing timber is the difference between its adjusted basis for depletion and its FMV on the first day of your tax year in which it is cut. Irs filing extension   Your adjusted basis for depletion of cut timber is based on the number of units (board feet, log scale, or other units) of timber cut during the tax year and considered to be sold or exchanged. Irs filing extension Your adjusted basis for depletion is also based on the depletion unit of timber in the account used for the cut timber, and should be figured in the same manner as shown in section 611 and Regulations section 1. Irs filing extension 611-3. Irs filing extension   Depletion of timber is discussed in chapter 7. Irs filing extension Example. Irs filing extension   In April 2013, you owned 4,000 MBF (1,000 board feet) of standing timber longer than 1 year. Irs filing extension It had an adjusted basis for depletion of $40 per MBF. Irs filing extension You are a calendar year taxpayer. Irs filing extension On January 1, 2013, the timber had a FMV of $350 per MBF. Irs filing extension It was cut in April for sale. Irs filing extension On your 2013 tax return, you elect to treat the cutting of the timber as a sale or exchange. Irs filing extension You report the difference between the FMV and your adjusted basis for depletion as a gain. Irs filing extension This amount is reported on Form 4797 along with your other section 1231 gains and losses to figure whether it is treated as a capital gain or as ordinary gain. Irs filing extension You figure your gain as follows. Irs filing extension FMV of timber January 1, 2013 $1,400,000 Minus: Adjusted basis for depletion 160,000 Section 1231 gain $1,240,000   The FMV becomes your basis in the cut timber, and a later sale of the cut timber, including any by-product or tree tops, will result in ordinary business income or loss. Irs filing extension Outright sales of timber. Irs filing extension   Outright sales of timber by landowners qualify for capital gains treatment using rules similar to the rules for certain disposal of timber under a contract with retained economic interest (defined later). Irs filing extension However, for outright sales, the date of disposal is not deemed to be the date the timber is cut because the landowner can elect to treat the payment date as the date of disposal (see Date of disposal below). Irs filing extension Cutting contract. Irs filing extension   You must treat the disposal of standing timber under a cutting contract as a section 1231 transaction if all the following apply to you. Irs filing extension You are the owner of the timber. Irs filing extension You held the timber longer than 1 year before its disposal. Irs filing extension You kept an economic interest in the timber. Irs filing extension   You have kept an economic interest in standing timber if, under the cutting contract, the expected return on your investment is conditioned on the cutting of the timber. Irs filing extension   The difference between the amount realized from the disposal of the timber and its adjusted basis for depletion is treated as gain or loss on its sale. Irs filing extension Include this amount on Form 4797 along with your other section 1231 gains or losses. Irs filing extension Date of disposal. Irs filing extension   The date of disposal is the date the timber is cut. Irs filing extension However, for outright sales by landowners or if you receive payment under the contract before the timber is cut, you can elect to treat the date of payment as the date of disposal. Irs filing extension   This election applies only to figure the holding period of the timber. Irs filing extension It has no effect on the time for reporting gain or loss (generally when the timber is sold or exchanged). Irs filing extension   To make this election, attach a statement to the tax return filed by the due date (including extensions) for the year payment is received. Irs filing extension The statement must identify the advance payments subject to the election and the contract under which they were made. Irs filing extension   If you timely filed your return for the year you received payment without making the election, you can still make the election by filing an amended return within 6 months after the due date for that year's return (excluding extensions). Irs filing extension Attach the statement to the amended return and write “Filed pursuant to section 301. Irs filing extension 9100-2” at the top of the statement. Irs filing extension File the amended return at the same address the original return was filed. Irs filing extension Owner. Irs filing extension   An owner is any person who owns an interest in the timber, including a sublessor and the holder of a contract to cut the timber. Irs filing extension You own an interest in timber if you have the right to cut it for sale on your own account or for use in your business. Irs filing extension Tree stumps. Irs filing extension   Tree stumps are a capital asset if they are on land held by an investor who is not in the timber or stump business as a buyer, seller, or processor. Irs filing extension Gain from the sale of stumps sold in one lot by such a holder is taxed as a capital gain. Irs filing extension However, tree stumps held by timber operators after the saleable standing timber was cut and removed from the land are considered by-products. Irs filing extension Gain from the sale of stumps in lots or tonnage by such operators is taxed as ordinary income. Irs filing extension   See Form T (Timber) and its separate instructions for more information about dispositions of timber. Irs filing extension Sale of a Farm The sale of your farm will usually involve the sale of both nonbusiness property (your home) and business property (the land and buildings used in the farm operation and perhaps machinery and livestock). Irs filing extension If you have a gain from the sale, you may be allowed to exclude the gain on your home. Irs filing extension For more information, see Publication 523, Selling Your Home. Irs filing extension The gain on the sale of your business property is taxable. Irs filing extension A loss on the sale of your business property to an unrelated person is deducted as an ordinary loss. Irs filing extension Your taxable gain or loss on the sale of property used in your farm business is taxed under the rules for section 1231 transactions. Irs filing extension See chapter 9. Irs filing extension Losses from personal-use property, other than casualty or theft losses, are not deductible. Irs filing extension If you receive payments for your farm in installments, your gain is taxed over the period of years the payments are received, unless you elect not to use the installment method of reporting the gain. Irs filing extension See chapter 10 for information about installment sales. Irs filing extension When you sell your farm, the gain or loss on each asset is figured separately. Irs filing extension The tax treatment of gain or loss on the sale of each asset is determined by the classification of the asset. Irs filing extension Each of the assets sold must be classified as one of the following. Irs filing extension Capital asset held 1 year or less. Irs filing extension Capital asset held longer than 1 year. Irs filing extension Property (including real estate) used in your business and held 1 year or less (including draft, breeding, dairy, and sporting animals held less than the holding periods discussed earlier under Livestock ). Irs filing extension Property (including real estate) used in your business and held longer than 1 year (including only draft, breeding, dairy, and sporting animals held for the holding periods discussed earlier). Irs filing extension Property held primarily for sale or which is of the kind that would be included in inventory if on hand at the end of your tax year. Irs filing extension Allocation of consideration paid for a farm. Irs filing extension   The sale of a farm for a lump sum is considered a sale of each individual asset rather than a single asset. Irs filing extension The residual method is required only if the group of assets sold constitutes a trade or business. Irs filing extension This method determines gain or loss from the transfer of each asset. Irs filing extension It also determines the buyer's basis in the business assets. Irs filing extension For more information, see Sale of a Business in chapter 2 of Publication 544. Irs filing extension Property used in farm operation. Irs filing extension   The rules for excluding the gain on the sale of your home, described later under Sale of your home , do not apply to the property used for your farming business. Irs filing extension Recognized gains and losses on business property must be reported on your return for the year of the sale. Irs filing extension If the property was held longer than 1 year, it may qualify for section 1231 treatment (see chapter 9). Irs filing extension Example. Irs filing extension You sell your farm, including your main home, which you have owned since December 2001. Irs filing extension You realize gain on the sale as follows. Irs filing extension   Farm   Farm   With Home Without   Home Only Home Selling price $382,000 $158,000 $224,000 Cost (or other basis) 240,000 110,000 130,000 Gain $142,000 $48,000 $94,000 You must report the $94,000 gain from the sale of the property used in your farm business. Irs filing extension All or a part of that gain may have to be reported as ordinary income from the recapture of depreciation or soil and water conservation expenses. Irs filing extension Treat the balance as section 1231 gain. Irs filing extension The $48,000 gain from the sale of your home is not taxable as long as you meet the requirements explained later under Sale of your home . Irs filing extension Partial sale. Irs filing extension   If you sell only part of your farm, you must report any recognized gain or loss on the sale of that part on your tax return for the year of the sale. Irs filing extension You cannot wait until you have sold enough of the farm to recover its entire cost before reporting gain or loss. Irs filing extension For a detailed discussion on installment sales, see Publication 544. Irs filing extension Adjusted basis of the part sold. Irs filing extension   This is the properly allocated part of your original cost or other basis of the entire farm plus or minus necessary adjustments for improvements, depreciation, etc. Irs filing extension , on the part sold. Irs filing extension If your home is on the farm, you must properly adjust the basis to exclude those costs from your farm asset costs, as discussed below under Sale of your home . Irs filing extension Example. Irs filing extension You bought a 600-acre farm for $700,000. Irs filing extension The farm included land and buildings. Irs filing extension The purchase contract designated $600,000 of the purchase price to the land. Irs filing extension You later sold 60 acres of land on which you had installed a fence. Irs filing extension Your adjusted basis for the part of your farm sold is $60,000 (1/10 of $600,000), plus any unrecovered cost (cost not depreciated) of the fence on the 60 acres at the time of sale. Irs filing extension Use this amount to determine your gain or loss on the sale of the 60 acres. Irs filing extension Assessed values for local property taxes. Irs filing extension   If you paid a flat sum for the entire farm and no other facts are available for properly allocating your original cost or other basis between the land and the buildings, you can use the assessed values for local property taxes for the year of purchase to allocate the costs. Irs filing extension Example. Irs filing extension Assume that in the preceding example there was no breakdown of the $700,000 purchase price between land and buildings. Irs filing extension However, in the year of purchase, local taxes on the entire property were based on assessed valuations of $420,000 for land and $140,000 for improvements, or a total of $560,000. Irs filing extension The assessed valuation of the land is 3/4 (75%) of the total assessed valuation. Irs filing extension Multiply the $700,000 total purchase price by 75% to figure basis of $525,000 for the 600 acres of land. Irs filing extension The unadjusted basis of the 60 acres you sold would then be $52,500 (1/10 of $525,000). Irs filing extension Sale of your home. Irs filing extension   Your home is a capital asset and not property used in the trade or business of farming. Irs filing extension If you sell a farm that includes a house you and your family occupy, you must determine the part of the selling price and the part of the cost or other basis allocable to your home. Irs filing extension Your home includes the immediate surroundings and outbuildings relating to it that are not used for business purposes. Irs filing extension   If you use part of your home for business, you must make an appropriate adjustment to the basis for depreciation allowed or allowable. Irs filing extension For more information on basis, see chapter 6. Irs filing extension More information. Irs filing extension   For more information on selling your home, see Publication 523. Irs filing extension Gain from condemnation. Irs filing extension   If you have a gain from a condemnation or sale under threat of condemnation, you may use the preceding rules for excluding the gain, rather than the rules discussed under Postponing Gain in chapter 11. Irs filing extension However, any gain that cannot be excluded (because it is more than the limit) may be postponed under the rules discussed under Postponing Gain in chapter 11. Irs filing extension Foreclosure or Repossession If you do not make payments you owe on a loan secured by property, the lender may foreclose on the loan or repossess the property. Irs filing extension The foreclosure or repossession is treated as a sale or exchange from which you may realize gain or loss. Irs filing extension This is true even if you voluntarily return the property to the lender. Irs filing extension You may also realize ordinary income from cancellation of debt if the loan balance is more than the FMV of the property. Irs filing extension Buyer's (borrower's) gain or loss. Irs filing extension   You figure and report gain or loss from a foreclosure or repossession in the same way as gain or loss from a sale or exchange. Irs filing extension The gain or loss is the difference between your adjusted basis in the transferred property and the amount realized. Irs filing extension See Determining Gain or Loss , earlier. Irs filing extension Worksheet 8-1. Irs filing extension Worksheet for Foreclosures andRepossessions Part 1. Irs filing extension Use Part 1 to figure your ordinary income from the cancellation of debt upon foreclosure or repossession. Irs filing extension Complete this part only if you were personally liable for the debt. Irs filing extension Otherwise, go to Part 2. Irs filing extension   1. Irs filing extension Enter the amount of outstanding debt immediately before the transfer of property reduced by any amount for which you remain personally liable after the transfer of property   2. Irs filing extension Enter the Fair Market Value of the transferred property   3. Irs filing extension Ordinary income from cancellation of debt upon foreclosure or repossession. Irs filing extension * Subtract line 2 from line 1. Irs filing extension If zero or less, enter -0-   Part 2. Irs filing extension Figure your gain or loss from foreclosure or repossession. Irs filing extension   4. Irs filing extension If you completed Part 1, enter the smaller of line 1 or line 2. Irs filing extension If you did not complete Part 1, enter the outstanding debt immediately before the transfer of property   5. Irs filing extension Enter any proceeds you received from the foreclosure sale   6. Irs filing extension Add lines 4 and 5   7. Irs filing extension Enter the adjusted basis of the transferred property   8. Irs filing extension Gain or loss from foreclosure or repossession. Irs filing extension Subtract line 7  from line 6   * The income may not be taxable. Irs filing extension See Cancellation of debt . Irs filing extension    You can use Worksheet 8-1 to figure your gain or loss from a foreclosure or repossession. Irs filing extension Amount realized on a nonrecourse debt. Irs filing extension   If you are not personally liable for repaying the debt (nonrecourse debt) secured by the transferred property, the amount you realize includes the full amount of the debt canceled by the transfer. Irs filing extension The full canceled debt is included in the amount realized even if the fair market value of the property is less than the canceled debt. Irs filing extension Example 1. Irs filing extension Ann paid $200,000 for land used in her farming business. Irs filing extension She paid $15,000 down and borrowed the remaining $185,000 from a bank. Irs filing extension Ann is not personally liable for the loan (nonrecourse debt), but pledges the land as security. Irs filing extension The bank foreclosed on the loan 2 years after Ann stopped making payments. Irs filing extension When the bank foreclosed, the balance due on the loan was $180,000 and the FMV of the land was $170,000. Irs filing extension The amount Ann realized on the foreclosure was $180,000, the debt canceled by the foreclosure. Irs filing extension She figures her gain or loss on Form 4797, Part I, by comparing the amount realized ($180,000) with her adjusted basis ($200,000). Irs filing extension She has a $20,000 deductible loss. Irs filing extension Example 2. Irs filing extension Assume the same facts as in Example 1 except the FMV of the land was $210,000. Irs filing extension The result is the same. Irs filing extension The amount Ann realized on the foreclosure is $180,000, the debt canceled by the foreclosure. Irs filing extension Because her adjusted basis is $200,000, she has a deductible loss of $20,000, which she reports on Form 4797, Part I. Irs filing extension Amount realized on a recourse debt. Irs filing extension   If you are personally liable for the debt (recourse debt), the amount realized on the foreclosure or repossession includes the lesser of: The outstanding debt immediately before the transfer reduced by any amount for which you remain personally liable immediately after the transfer, or The fair market value of the transferred property. Irs filing extension   You are treated as receiving ordinary income from the canceled debt for the part of the debt that is more than the fair market value. Irs filing extension The amount realized does not include the canceled debt that is your income from cancellation of debt. Irs filing extension See Cancellation of debt , later. Irs filing extension Example 3. Irs filing extension Assume the same facts as in Example 1 above except Ann is personally liable for the loan (recourse debt). Irs filing extension In this case, the amount she realizes is $170,000. Irs filing extension This is the canceled debt ($180,000) up to the FMV of the land ($170,000). Irs filing extension Ann figures her gain or loss on the foreclosure by comparing the amount realized ($170,000) with her adjusted basis ($200,000). Irs filing extension She has a $30,000 deductible loss, which she figures on Form 4797, Part I. Irs filing extension She is also treated as receiving ordinary income from cancellation of debt. Irs filing extension That income is $10,000 ($180,000 − $170,000). Irs filing extension This is the part of the canceled debt not included in the amount realized. Irs filing extension She reports this as other income on Schedule F, line 8. Irs filing extension Seller's (lender's) gain or loss on repossession. Irs filing extension   If you finance a buyer's purchase of property and later acquire an interest in it through foreclosure or repossession, you may have a gain or loss on the acquisition. Irs filing extension For more information, see Repossession in Publication 537, Installment Sales. Irs filing extension Cancellation of debt. Irs filing extension   If property that is repossessed or foreclosed upon secures a debt for which you are personally liable (recourse debt), you generally must report as ordinary income the amount by which the canceled debt is more than the FMV of the property. Irs filing extension This income is separate from any gain or loss realized from the foreclosure or repossession. Irs filing extension Report the income from cancellation of a business debt on Schedule F, line 8. Irs filing extension Report the income from cancellation of a nonbusiness debt as miscellaneous income on Form 1040. Irs filing extension    You can use Worksheet 8-1 to figure your income from cancellation of debt. Irs filing extension   However, income from cancellation of debt is not taxed if any of the following apply. Irs filing extension The cancellation is intended as a gift. Irs filing extension The debt is qualified farm debt (see chapter 3). Irs filing extension The debt is qualified real property business debt (see chapter 5 of Publication 334). Irs filing extension You are insolvent or bankrupt (see  chapter 3). Irs filing extension The debt is qualified principal residence indebtedness (see chapter 3). Irs filing extension   Use Form 982 to report the income exclusion. Irs filing extension Abandonment The abandonment of property is a disposition of property. Irs filing extension You abandon property when you voluntarily and permanently give up possession and use of the property with the intention of ending your ownership, but without passing it on to anyone else. Irs filing extension Business or investment property. Irs filing extension   Loss from abandonment of business or investment property is deductible as a loss. Irs filing extension Loss from abandonment of business or investment property that is not treated as a sale or exchange generally is an ordinary loss. Irs filing extension If your adjusted basis is more than the amount you realize (if any), then you have a loss. Irs filing extension If the amount you realize (if any) is more than your adjusted basis, then you have a gain. Irs filing extension This rule also applies to leasehold improvements the lessor made for the lessee. Irs filing extension However, if the property is foreclosed on or repossessed in lieu of abandonment, gain or loss is figured as discussed earlier under Foreclosure or Repossession . Irs filing extension   If the abandoned property is secured by debt, special rules apply. Irs filing extension The tax consequences of abandonment of property that secures a debt depend on whether you are personally liable for the debt (recourse debt) or were not personally liable for the debt (nonrecourse debt). Irs filing extension For more information, see chapter 3 of Publication 4681, Canceled Debts, Foreclosures, Repossessions, and Abandonments (for Individuals). Irs filing extension The abandonment loss is deducted in the tax year in which the loss is sustained. Irs filing extension Report the loss on Form 4797, Part II, line 10. Irs filing extension Personal-use property. Irs filing extension   You cannot deduct any loss from abandonment of your home or other property held for personal use. Irs filing extension Canceled debt. Irs filing extension   If the abandoned property secures a debt for which you are personally liable and the debt is canceled, you will realize ordinary income equal to the canceled debt. Irs filing extension This income is separate from any loss realized from abandonment of the property. Irs filing extension Report income from cancellation of a debt related to a business or rental activity as business or rental income. Irs filing extension Report income from cancellation of a nonbusiness debt as miscellaneous income on Form 1040. Irs filing extension   However, income from cancellation of debt is not taxed in certain circumstances. Irs filing extension See Cancellation of debt earlier under Foreclosure or Repossession . Irs filing extension Forms 1099-A and 1099-C. Irs filing extension   A lender who acquires an interest in your property in a foreclosure, repossession, or abandonment should send you Form 1099-A showing the information you need to figure your loss from the foreclosure, repossession, or abandonment. Irs filing extension However, if the lender cancels part of your debt and the lender must file Form 1099-C, the lender may include the information about the foreclosure, repossession, or abandonment on that form instead of Form 1099-A. Irs filing extension The lender must file Form 1099-C and send you a copy if the canceled debt is $600 or more and the lender is a financial institution, credit union, federal government agency, or any organization that has a significant trade or business of lending money. Irs filing extension For foreclosures, repossessions, abandonments of property, and debt cancellations occurring in 2013, these forms should be sent to you by January 31, 2014. Irs filing extension Prev  Up  Next   Home   More Online Publications
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Irs filing extension 33. Irs filing extension   Crédito para Ancianos o Personas Incapacitadas Table of Contents Introduction 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 Introduction Si reúne los requisitos, tal vez pueda reducir los impuestos que adeuda tomando el crédito para ancianos o personas incapacitadas, el cual se calcula en el Anexo R (Formulario 1040A o Formulario 1040). Irs filing extension Este capítulo trata lo siguiente: Quién reúne los requisitos para reclamar el crédito para ancianos o personas incapacitadas. Irs filing extension Cómo reclamar el crédito. Irs filing extension Tal vez pueda tomar el crédito para ancianos o personas incapacitadas si: Tiene 65 años de edad o más al final del año 2013 o Se jubiló por incapacidad total y permanente y recibe ingresos por incapacidad sujetos a impuestos. Irs filing extension Useful Items - You may want to see: Publicación 524 Credit for the Elderly or the Disabled (Crédito para ancianos o personas incapacitadas), en inglés 554 Tax Guide for Seniors (Guía tributaria para personas de la tercera edad), en inglés Formulario (e Instrucciones) Anexo R (Formulario 1040A o 1040) Credit for the Elderly or the Disabled (Crédito para ancianos o personas incapacitadas), en inglés ¿Reúne los Requisitos del Crédito? Puede reclamar el crédito para ancianos o personas incapacitadas si le corresponden ambas situaciones: Usted es una persona que reúne los requisitos. Irs filing extension Sus ingresos no sobrepasan determinados límites. Irs filing extension Puede utilizar la Figura 33-A y la Tabla 33-1 como guía para ver si tiene derecho al crédito. Irs filing extension Primero, utilice la Figura 33-A para saber si reúne los requisitos. Irs filing extension En tal caso, pase a la Tabla 33-1 para asegurarse que sus ingresos no superen los límites correspondientes al crédito. Irs filing extension Puede reclamar el crédito sólo si presenta el Formulario 1040 o el Formulario 1040A. Irs filing extension No puede reclamar el crédito si presenta el Formulario 1040EZ. Irs filing extension Persona que Reúne los Requisitos Usted reúne los requisitos de este crédito si es ciudadano estadounidense o extranjero residente y cualquiera de las siguientes situaciones le corresponden: Tenía 65 años de edad o más al final del año 2013. Irs filing extension Tenía menos de 65 años de edad al final del año 2013 y se cumplen las tres condiciones siguientes: Se jubiló por incapacidad total y permanente (se explica más adelante). Irs filing extension Recibió ingresos sujetos a impuestos por incapacidad durante 2013. Irs filing extension En el día 1 de enero de 2013, no había alcanzado la edad de jubilación obligatoria (se define más adelante bajo Ingresos por incapacidad ). Irs filing extension 65 años de edad. Irs filing extension   Se considera que tiene 65 años el día antes de cumplir los 65 años. Irs filing extension Por lo tanto, si nació el 1 de enero de 1949, se considera que tiene 65 años de edad al final de 2013. Irs filing extension Ciudadano o Extranjero Residente de los Estados Unidos Para reclamar el crédito, tiene que ser ciudadano o extranjero residente de los Estados Unidos (o ser tratado como extranjero residente). Irs filing extension Normalmente, no puede reclamar el crédito si fue extranjero no residente en algún momento durante el año tributario. Irs filing extension Excepciones. Irs filing extension   Tal vez pueda tomar el crédito si es extranjero no residente casado con un ciudadano o extranjero residente de los EE. Irs filing extension UU. Irs filing extension al final del año tributario, y usted y su cónyuge optan por tratarlo a usted como extranjero residente de los Estados Unidos. Irs filing extension En tal caso, se gravan impuestos sobre los ingresos que usted y su cónyuge reciban de cualquier parte del mundo. Irs filing extension Si era extranjero no residente al comenzar el año y residente extranjero al final del año, y estaba casado con un ciudadano o extranjero residente de los EE. Irs filing extension UU. Irs filing extension al final del año, tal vez pueda optar por ser considerado extranjero residente de los EE. Irs filing extension UU. Irs filing extension durante todo el año. Irs filing extension En ese caso, quizás se le permita reclamar el crédito. Irs filing extension Para más información sobre estas opciones, vea el capítulo 1 de la Publicación 519, U. Irs filing extension S. Irs filing extension Tax Guide for Aliens (Guía tributaria sobre los impuestos estadounidenses para extranjeros), en inglés. Irs filing extension Personas Casadas Normalmente, si está casado al final del año tributario, usted y su cónyuge tienen que presentar una declaración conjunta para reclamar el crédito. Irs filing extension No obstante, si usted y su cónyuge no vivieron en la misma vivienda en ningún momento durante el año tributario, pueden presentar una declaración conjunta o declaraciones separadas y aún reclamar el crédito. Irs filing extension Cabeza de familia. Irs filing extension   Puede presentar la declaración como cabeza de familia y satisfacer las condiciones del crédito, aun si su cónyuge vivió con usted durante los primeros 6 meses del año, si cumple ciertos requisitos. Irs filing extension Vea Cabeza de Familia en el capítulo 2, para averiguar qué requisitos tiene que cumplir. Irs filing extension Personas Menores de 65 Años de Edad Si tiene menos de 65 años de edad al final del año 2013, puede reunir los requisitos del crédito sólo si está jubilado por incapacidad total y permanente (se explica a continuación) y ha recibido ingresos por incapacidad sujetos a impuestos (se explica más adelante, bajo el tema Ingresos por incapacidad ). Irs filing extension Se le considera jubilado por incapacidad total y permanente si: Estaba total y permanentemente incapacitado cuando se jubiló y Se jubiló por incapacidad antes del cierre del año tributario. Irs filing extension Aunque no se jubile oficialmente, puede que se le considere jubilado por incapacidad cuando haya dejado de trabajar debido a su incapacidad. Irs filing extension Si se jubiló por incapacidad antes de 1977 y no estaba total y permanentemente incapacitado en ese momento, puede cumplir los requisitos del crédito si estaba total y permanentemente incapacitado el 1 de enero de 1976 o el 1 de enero de 1977. Irs filing extension Total y permanentemente incapacitado. Irs filing extension    Está total y permanentemente incapacitado si no puede dedicarse a ninguna actividad sustancial remunerada a causa de una condición física o mental. Irs filing extension Un médico calificado tiene que confirmar por escrito que dicha condición ha durado o puede durar 12 meses o más, o que dicha condición puede culminar en la muerte. Irs filing extension Vea Declaración del médico , más adelante. Irs filing extension Actividad sustancial remunerada. Irs filing extension   Se define “actividad sustancial remunerada” como el desempeño de deberes importantes a lo largo de un período de tiempo razonable, mientras uno trabaje para recibir remuneración u obtener ganancias; o un trabajo generalmente realizado a cambio de remuneración o ganancias. Irs filing extension El mantener un empleo a tiempo completo (o un empleo a tiempo parcial a conveniencia de su empleador) en un ambiente laboral competitivo donde se paga por lo menos el salario mínimo se considera una prueba contundente de que puede dedicarse a una actividad sustancial remunerada. Irs filing extension   Los trabajos realizados para cuidarse a sí mismo o cuidar su vivienda no se consideran actividades sustanciales remuneradas. Irs filing extension Tampoco se considera actividad sustancial remunerada: el trabajo no remunerado desempeñado en relación con los pasatiempos, la capacitación o terapia institucional, asistencia a una escuela, los clubes, programas sociales y otras actividades semejantes. Irs filing extension No obstante, realizar este tipo de trabajo puede demostrar que usted es capaz de dedicarse a una actividad sustancial remunerada. Irs filing extension    El hecho de que no haya trabajado por algún tiempo no se considera una prueba concluyente de que no pueda dedicarse a una actividad sustancial remunerada. Irs filing extension Empleo en establecimientos protegidos. Irs filing extension   Ciertos trabajos ofrecidos a personas con incapacidad física o mental en establecimientos que reúnen ciertos requisitos se consideran empleo protegido. Irs filing extension Dichos sitios se ubican en establecimientos protegidos, tales como talleres, hospitales e instituciones parecidas, programas laborales o educativos en el hogar y asilos patrocinados por el Departamento de Asuntos de Veteranos (VA, por sus siglas en inglés). Irs filing extension   En comparación con el empleo comercial, la remuneración del empleo en establecimientos protegidos es más baja. Irs filing extension Por lo tanto, una persona no suele buscar empleo en establecimientos protegidos si puede encontrar otro empleo. Irs filing extension El hecho de que una persona haya aceptado un empleo en establecimientos protegidos no comprueba que la persona pueda dedicarse a una actividad sustancial remunerada. Irs filing extension Declaración del médico. Irs filing extension   Si tiene menos de 65 años de edad, su médico tiene que certificar por escrito que usted estaba total y permanentemente incapacitado en la fecha en que se jubiló. Irs filing extension Puede utilizar la declaración en las Instrucciones del Anexo R (Fomulario 1040A o 1040). Irs filing extension    Please click here for the text description of the image. Irs filing extension Figura 33−A. Irs filing extension ¿Es Usted una Persona que Reúne los Requisitos? Tabla 33-1. Irs filing extension Límites sobre los Ingresos SI su estado civil para efectos de la declaración es . Irs filing extension . Irs filing extension . Irs filing extension . Irs filing extension ENTONCES aun si reúne los requisitos (vea la Figura 33-A ), NO PUEDE reclamar el crédito si . Irs filing extension . Irs filing extension . Irs filing extension . Irs filing extension Tiene ingresos brutos ajustados (AGI, por sus siglas en inglés)* iguales o superiores a . Irs filing extension . Irs filing extension . Irs filing extension . Irs filing extension O el total de su Seguro Social no sujeto a impuestos además de otras pensiones, anualidades o ingreso por incapacidad no sujetos a impuestos es igual o superior a . Irs filing extension . Irs filing extension . Irs filing extension . Irs filing extension soltero, cabeza de familia o viudo que reúne los requisitos con hijo dependiente $17,500 $5,000 casado que presenta una declaración conjunta y sólo uno de los cónyuges reúne los requisitos de la Figura 33-A $20,000 $5,000 casado que presenta una declaración conjunta y ambos cónyuges reúnen los requisitos de la Figura 33-A $25,000 $7,500 casado que presenta una declaración por separado y usted y su cónyuge no vivieron en la misma vivienda en ningún momento del año 2013 $12,500 $3,750 *El AGI es la cantidad indicada en la línea 22 del Formulario 1040A o la línea 38 del Formulario 1040. Irs filing extension   No tiene que presentar esta declaración escrita junto con el Formulario 1040 o Formulario 1040A, pero tiene que guardarla con su documentación. Irs filing extension Veteranos. Irs filing extension   Si el Departamento de Asuntos de Veteranos (VA, por sus siglas en inglés) certifica que está total y permanentemente incapacitado, puede utilizar el Formulario 21-0172 del VA, Certification of Permanent and Total Disability (Certificación de incapacidad total y permanente), en inglés, en lugar de la declaración escrita de un médico que usted está obligado a conservar. Irs filing extension El Formulario 21-0172 del VA tiene que ser firmado por una persona autorizada por el VA. Irs filing extension Puede obtener este formulario de la oficina regional del VA de su área. Irs filing extension Declaración escrita de un médico obtenida en un año anterior. Irs filing extension   Si obtuvo una declaración escrita de su médico en un año anterior y, por su condición continua de incapacidad, no pudo dedicarse a ninguna actividad sustancial remunerada durante 2013, quizás no necesite obtener otra declaración escrita de su médico para 2013. Irs filing extension Para leer una explicación detallada de las condiciones que tiene que cumplir, consulte la Parte II de las Instrucciones del Anexo R (Formulario 1040A o 1040). Irs filing extension Si satisface las condiciones obligatorias, marque el recuadro 2 de la Parte II del Anexo R (Formulario 1040A o 1040). Irs filing extension   Si marcó el recuadro 4, 5 ó 6 de la Parte I del Anexo R (Formulario 1040A o 1040), anote en el espacio por encima del recuadro de la línea 2 de la Parte II el (los) primer(os) nombre(s) del (de los) cónyuge(s) para el (los) cual(es) está marcado dicho recuadro. Irs filing extension Ingresos por incapacidad. Irs filing extension   Si tiene menos de 65 años de edad, tiene que tener también ingresos tributables de compensación por incapacidad para reunir los requisitos del crédito. Irs filing extension Los ingresos de compensación por incapacidad tienen que cumplir los siguientes requisitos: Se tienen que pagar conforme al seguro de accidente o médico, o el plan de pensiones de su empleador. Irs filing extension Se tienen que incluir en los ingresos como salario (o pagos en lugar de salario) durante el tiempo por el cual se ausentó del trabajo a raíz de una incapacidad total y permanente. Irs filing extension Pagos que no se consideran ingresos por incapacidad. Irs filing extension   Todo pago que reciba de un plan que no ofrece una opción para la jubilación por incapacidad no se considera ingreso por incapacidad. Irs filing extension Todo pago global que reciba por vacaciones acumuladas al jubilarse por incapacidad se considera pago de salario en vez de ingreso por incapacidad. Irs filing extension   Para propósitos del crédito para ancianos o personas incapacitadas, los ingresos por incapacidad no incluyen cantidades que usted reciba después de cumplir la edad obligatoria de jubilación. Irs filing extension La edad obligatoria de jubilación es la edad establecida por su empleador en la que usted habría estado obligado a jubilarse si no se hubiera quedado incapacitado. Irs filing extension Límites sobre los Ingresos Para determinar si puede reclamar el crédito, tiene que tener en cuenta dos límites sobre los ingresos. Irs filing extension El primer límite es la cantidad de ingresos brutos ajustados (AGI, por sus siglas en inglés). Irs filing extension El segundo límite es la cantidad de Seguro Social no sujeta a impuestos y otras pensiones, anualidades o compensación por incapacidad no sujetas a impuestos que haya recibido. Irs filing extension Se indican los límites en la Tabla 33-1. Irs filing extension Si tiene ingresos brutos ajustados y pensiones, anualidades o compensación por incapacidad no sujetos a impuestos inferiores a los límites de ingresos, quizás pueda reclamar el crédito. Irs filing extension Vea Cómo Reclamar el Crédito , más adelante. Irs filing extension Si tiene ingresos brutos ajustados o pensiones, anualidades o compensación por incapacidad no sujetos a impuestos iguales o superiores a los límites de ingresos, no puede reclamar el crédito. Irs filing extension Cómo Reclamar el Crédito Puede calcular el crédito usted mismo o el Servicio de Impuestos Internos (IRS, por sus siglas en inglés) se lo calculará. Irs filing extension El Crédito Calculado por el IRS Si opta por que el IRS le calcule el crédito, lea el tema presentado a continuación relacionado con el formulario que usted va a presentar (el Formulario 1040 o el Formulario 1040A). Irs filing extension Si desea que el IRS le calcule su impuesto, vea el capítulo 30 . Irs filing extension Formulario 1040. Irs filing extension   Si desea que el IRS le calcule el crédito, vea Datos a Incluir en el Formulario 1040 bajo Impuestos Calculados por el IRS en el capítulo 30. Irs filing extension Formulario 1040A. Irs filing extension   Si desea que el IRS le calcule el crédito, vea Datos a Incluir en el Formulario 1040A bajo Impuestos Calculados por el IRS en el capítulo 30. Irs filing extension El Crédito Calculado por Usted Mismo Si opta por calcular el crédito usted mismo, llene la primera página del Anexo R (Formulario 1040A o 1040). Irs filing extension Luego, llene la Parte III del Anexo R (Formulario 1040A o 1040). Irs filing extension Si presenta el Formulario 1040A, anote en la línea 30 de este formulario la cantidad proveniente de la línea 22 del Anexo R (Formulario 1040A o 1040). Irs filing extension Si presenta el Formulario 1040, anote en la línea 53 de este formulario la cantidad proveniente de la línea 22 del Anexo R (Formulario 1040A o 1040), marque el recuadro c y escriba “Sch R” en la línea al lado de dicho recuadro. Irs filing extension Para leer una explicación detallada sobre cómo llenar la Parte III del Anexo R, vea Figuring the Credit Yourself (Cómo calcular el crédito usted mismo), en la Publicación 524, en inglés. Irs filing extension Límite del crédito. Irs filing extension   La cantidad del crédito que puede reclamar, por lo general, suele limitarse a la cantidad de impuestos que tiene que pagar. Irs filing extension Utilice la Credit Limit Worksheet (Hoja de trabajo para calcular el límite del crédito), en las Instrucciones del Anexo R (Formulario 1040A o Formulario 1040) para determinar si su crédito es limitado. Irs filing extension Prev  Up  Next   Home   More Online Publications