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Irs Tax Tables 1040ez

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Irs Tax Tables 1040ez

Irs tax tables 1040ez Publication 502 - Introductory Material Table of Contents What's New Reminders IntroductionOrdering forms and publications. Irs tax tables 1040ez Tax questions. Irs tax tables 1040ez Useful Items - You may want to see: What's New Medical and dental expenses. Irs tax tables 1040ez  Beginning January 1, 2013, you can deduct only the part of your medical and dental expenses that exceed 10% of your adjusted gross income (AGI) (7. Irs tax tables 1040ez 5% if either you or your spouse was born before January 2, 1949). Irs tax tables 1040ez Standard mileage rate. Irs tax tables 1040ez  The standard mileage rate allowed for operating expenses for a car when you use it for medical reasons is 24 cents per mile. Irs tax tables 1040ez See Transportation under What Medical Expenses Are Includible. Irs tax tables 1040ez Federal tax benefits for same-sex married couples. Irs tax tables 1040ez  For federal tax purposes, individuals of the same sex are considered married if they were lawfully married in a state (or foreign country) whose laws authorize the marriage of two individuals of the same sex, even if the state (or foreign country) in which they now live does not recognize same-sex marriage. Irs tax tables 1040ez For more information, see Publication 501, Exemptions, Standard Deduction, and Filing Information. Irs tax tables 1040ez Reminders Future developments. Irs tax tables 1040ez   For the latest information about developments related to Publication 502, such as legislation enacted after it was published, go to www. Irs tax tables 1040ez irs. Irs tax tables 1040ez gov/pub502. Irs tax tables 1040ez Photographs of missing children. Irs tax tables 1040ez  The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. Irs tax tables 1040ez Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. Irs tax tables 1040ez You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child. Irs tax tables 1040ez Introduction This publication explains the itemized deduction for medical and dental expenses that you claim on Schedule A (Form 1040). Irs tax tables 1040ez It discusses what expenses, and whose expenses, you can and cannot include in figuring the deduction. Irs tax tables 1040ez It explains how to treat reimbursements and how to figure the deduction. Irs tax tables 1040ez It also tells you how to report the deduction on your tax return and what to do if you sell medical property or receive damages for a personal injury. Irs tax tables 1040ez Medical expenses include dental expenses, and in this publication the term “medical expenses” is often used to refer to medical and dental expenses. Irs tax tables 1040ez You can deduct on Schedule A (Form 1040) only the part of your medical and dental expenses that is more than 10% of your adjusted gross income (AGI). Irs tax tables 1040ez But if either you or your spouse was born before January 2, 1949, you can deduct the amount of your medical and dental expenses that is more than 7. Irs tax tables 1040ez 5% of your AGI. Irs tax tables 1040ez If your medical and dental expenses are not more than 10% of your AGI (7. Irs tax tables 1040ez 5% if either you or your spouse was born before January 2, 1949), you cannot claim a deduction. Irs tax tables 1040ez This publication also explains how to treat impairment-related work expenses, health insurance premiums if you are self-employed, and the health coverage tax credit that is available to certain individuals. Irs tax tables 1040ez Pub. Irs tax tables 1040ez 502 covers many common medical expenses but not every possible medical expense. Irs tax tables 1040ez If you cannot find the expense you are looking for, refer to the definition of medical expenses under What Are Medical Expenses . Irs tax tables 1040ez See How To Get Tax Help near the end of this publication for information about getting publications and forms. Irs tax tables 1040ez Comments and suggestions. Irs tax tables 1040ez   We welcome your comments about this publication and your suggestions for future editions. Irs tax tables 1040ez   You can write to us at the following address: Internal Revenue Service Tax Forms and Publications Division 1111 Constitution Ave. Irs tax tables 1040ez NW, IR-6526 Washington, DC 20224   We respond to many letters by telephone. Irs tax tables 1040ez Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence. Irs tax tables 1040ez   You can send your comments from www. Irs tax tables 1040ez irs. Irs tax tables 1040ez gov/formspubs. Irs tax tables 1040ez Click on “More Information” and then on “Comment on Tax Forms and Publications. Irs tax tables 1040ez ”   Although we cannot respond individually to each comment received, we do appreciate your feedback and will consider your comments as we revise our tax products. Irs tax tables 1040ez Ordering forms and publications. Irs tax tables 1040ez   Visit www. Irs tax tables 1040ez irs. Irs tax tables 1040ez gov/formspubs to download forms and publications, call 1-800-TAX-FORM (1-800-829-3676), or write to the address below and receive a response within 10 days after your request is received. Irs tax tables 1040ez Internal Revenue Service 1201 N. Irs tax tables 1040ez Mitsubishi Motorway Bloomington, IL 61705-6613 Tax questions. Irs tax tables 1040ez   If you have a tax question, check the information available on IRS. Irs tax tables 1040ez gov or call 1-800-829-1040. Irs tax tables 1040ez We cannot answer tax questions sent to either of the above addresses. Irs tax tables 1040ez Useful Items - You may want to see: Publication 969 Health Savings Accounts and Other Tax-Favored Health Plans Forms (and Instructions) 1040 U. Irs tax tables 1040ez S. Irs tax tables 1040ez Individual Income Tax Return Schedule A (Form 1040) Itemized Deductions 8885 Health Coverage Tax Credit Prev  Up  Next   Home   More Online Publications
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Tax Relief for Victims of Tropical Storm Maria in Puerto Rico

SP-FL-2011-15, Oct. 19, 2011

MIAMI — Victims of Tropical Storm Maria that began on Sept. 8, 2011 in parts of Puerto Rico may qualify for tax relief from the Internal Revenue Service.

The President has declared the following municipalities a federal disaster area: Juana Díaz, Naguabo and Yabucoa. Individuals who reside or have a business in these municipalities may qualify for tax relief.

The declaration permits the IRS to postpone certain deadlines for taxpayers who reside or have a business in the disaster area. For instance, certain deadlines falling on or after Sept. 8, and on or before Nov. 7, have been postponed to Nov. 7, 2011. This includes previously obtained extensions to file 2010 returns and the estimated tax payment for the third quarter, normally due Sept. 15.  

In addition, the IRS is waiving the failure-to-deposit penalties for employment and excise tax deposits due on or after Sept. 8, and on or before Sept. 23, as long as the deposits are made by Sept. 23, 2011.

If an affected taxpayer receives a penalty notice from the IRS, the taxpayer should call the telephone number on the notice to have the IRS abate any interest and any late filing or late payment penalties that would otherwise apply. Penalties or interest will be abated only for taxpayers who have an original or extended filing, payment or deposit due date, including an extended filing or payment due date, that falls within the postponement period.

The IRS automatically identifies taxpayers located in the covered disaster area and applies automatic filing and payment relief. But affected taxpayers who reside or have a business located outside the covered disaster area must call the IRS disaster hotline at 1-866-562-5227 to request this tax relief.

Covered Disaster Area

The municipalities listed above constitute a covered disaster area for purposes of Treas. Reg. § 301.7508A-1(d)(2) and are entitled to the relief detailed below.

Affected Taxpayers

Taxpayers considered to be affected taxpayers eligible for the postponement of time to file returns, pay taxes and perform other time-sensitive acts are those taxpayers listed in Treas. Reg. § 301.7508A-1(d)(1), and include individuals who live, and businesses whose principal place of business is located, in the covered disaster area. Taxpayers not in the covered disaster area, but whose records necessary to meet a deadline listed in Treas. Reg. § 301.7508A-1(c) are in the covered disaster area, are also entitled to relief. In addition, all relief workers affiliated with a recognized government or philanthropic organization assisting in the relief activities in the covered disaster area and any individual visiting the covered disaster area who was killed or injured as a result of the disaster are entitled to relief.

Grant of Relief

Under section 7508A, the IRS gives affected taxpayers until Nov. 7 to file most tax returns (including individual, corporate, and estate and trust income tax returns; partnership returns, S corporation returns, and trust returns; estate, gift, and generation-skipping transfer tax returns; and employment and certain excise tax returns), or to make tax payments, including estimated tax payments, that have either an original or extended due date occurring on or after Sept. 8 and on or before Nov. 7.

The IRS also gives affected taxpayers until Nov. 7 to perform other time-sensitive actions described in Treas. Reg. § 301.7508A-1(c)(1) and Rev. Proc. 2007-56, 2007-34 I.R.B. 388 (Aug. 20, 2007), that are due to be performed on or after Sept. 8 and on or before Nov. 7.

This relief also includes the filing of Form 5500 series returns, in the manner described in section 8 of Rev. Proc. 2007-56. The relief described in section 17 of Rev. Proc. 2007-56, pertaining to like-kind exchanges of property, also applies to certain taxpayers who are not otherwise affected taxpayers and may include acts required to be performed before or after the period above.

The postponement of time to file and pay does not apply to information returns in the W-2, 1098, 1099 series, or to Forms 1042-S or 8027. Penalties for failure to timely file information returns can be waived under existing procedures for reasonable cause. Likewise, the postponement does not apply to employment and excise tax deposits. The IRS, however, will abate penalties for failure to make timely employment and excise tax deposits due on or after Sept. 8 and on or before Sept. 23 provided the taxpayer makes these deposits by Sept. 23.

Casualty Losses

Affected taxpayers in a federally declared disaster area have the option of claiming disaster-related casualty losses on their federal income tax return for either this year or last year. Claiming the loss on an original or amended return for last year will get the taxpayer an earlier refund, but waiting to claim the loss on this year’s return could result in a greater tax saving, depending on other income factors.

Individuals may deduct personal property losses that are not covered by insurance or other reimbursements. For details, see Form 4684 and its instructions.

Affected taxpayers claiming the disaster loss on last year’s return should put the Disaster Designation “Puerto Rico/Tropical Storm Maria” at the top of the form so that the IRS can expedite the processing of the refund.

Other Relief

The IRS will waive the usual fees and expedite requests for copies of previously filed tax returns for affected taxpayers. Taxpayers should put the assigned Disaster Designation in red ink at the top of Form 4506, Request for Copy of Tax Return, or Form 4506-T, Request for Transcript of Tax Return, as appropriate, and submit it to the IRS.

Affected taxpayers who are contacted by the IRS on a collection or examination matter should explain how the disaster impacts them so that the IRS can provide appropriate consideration to their case.

Taxpayers may download forms and publications from the official IRS website, irs.gov, or order them by calling 1-800-TAX-FORM (1-800-829-3676). The IRS toll-free number for general tax questions is 1-800-829-1040.

Related Information

Page Last Reviewed or Updated: 18-Mar-2014

The Irs Tax Tables 1040ez

Irs tax tables 1040ez 6. Irs tax tables 1040ez   Basis of Assets Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: Cost BasisReal Property Allocating the Basis Uniform Capitalization Rules Adjusted BasisIncreases to Basis Decreases to Basis Basis Other Than CostTaxable Exchanges Involuntary Conversions Nontaxable Exchanges Property Received as a Gift Property Transferred From a Spouse Inherited Property Property Distributed From a Partnership or Corporation Introduction Your basis is the amount of your investment in property for tax purposes. Irs tax tables 1040ez Use basis to figure the gain or loss on the sale, exchange, or other disposition of property. Irs tax tables 1040ez Also use basis to figure depreciation, amortization, depletion, and casualty losses. Irs tax tables 1040ez If you use property for both business or investment purposes and for personal purposes, you must allocate the basis based on the use. Irs tax tables 1040ez Only the basis allocated to the business or investment use of the property can be depreciated. Irs tax tables 1040ez Your original basis in property is adjusted (increased or decreased) by certain events. Irs tax tables 1040ez For example, if you make improvements to the property, increase your basis. Irs tax tables 1040ez If you take deductions for depreciation, or casualty losses, or claim certain credits, reduce your basis. Irs tax tables 1040ez Keep accurate records of all items that affect the basis of your assets. Irs tax tables 1040ez For information on keeping records, see chapter 1. Irs tax tables 1040ez Topics - This chapter discusses: Cost basis Adjusted basis Basis other than cost Useful Items - You may want to see: Publication 535 Business Expenses 544 Sales and Other Dispositions of Assets 551 Basis of Assets 946 How To Depreciate Property See chapter 16 for information about getting publications and forms. Irs tax tables 1040ez Cost Basis The basis of property you buy is usually its cost. Irs tax tables 1040ez Cost is the amount you pay in cash, debt obligations, other property, or services. Irs tax tables 1040ez Your cost includes amounts you pay for sales tax, freight, installation, and testing. Irs tax tables 1040ez The basis of real estate and business assets will include other items, discussed later. Irs tax tables 1040ez Basis generally does not include interest payments. Irs tax tables 1040ez However, see Carrying charges and Capitalized interest in chapter 4 of Publication 535. Irs tax tables 1040ez You also may have to capitalize (add to basis) certain other costs related to buying or producing property. Irs tax tables 1040ez Under the uniform capitalization rules, discussed later, you may have to capitalize direct costs and certain indirect costs of producing property. Irs tax tables 1040ez Loans with low or no interest. Irs tax tables 1040ez   If you buy property on a time-payment plan that charges little or no interest, the basis of your property is your stated purchase price minus the amount considered to be unstated interest. Irs tax tables 1040ez You generally have unstated interest if your interest rate is less than the applicable federal rate. Irs tax tables 1040ez See the discussion of unstated interest in Publication 537, Installment Sales. Irs tax tables 1040ez Real Property Real property, also called real estate, is land and generally anything built on, growing on, or attached to land. Irs tax tables 1040ez If you buy real property, certain fees and other expenses you pay are part of your cost basis in the property. Irs tax tables 1040ez Some of these expenses are discussed next. Irs tax tables 1040ez Lump sum purchase. Irs tax tables 1040ez   If you buy improvements, such as buildings, and the land on which they stand for a lump sum, allocate your cost basis between the land and improvements. Irs tax tables 1040ez Allocate the cost basis according to the respective fair market values (FMVs) of the land and improvements at the time of purchase. Irs tax tables 1040ez Figure the basis of each asset by multiplying the lump sum by a fraction. Irs tax tables 1040ez The numerator is the FMV of that asset and the denominator is the FMV of the whole property at the time of purchase. Irs tax tables 1040ez Fair market value (FMV). Irs tax tables 1040ez   FMV is the price at which property would change hands between a willing buyer and a willing seller, neither having to buy or sell, and both having reasonable knowledge of all necessary facts. Irs tax tables 1040ez Sales of similar property on or about the same date may help in figuring the FMV of the property. Irs tax tables 1040ez If you are not certain of the FMV of the land and improvements, you can allocate the basis according to their assessed values for real estate tax purposes. Irs tax tables 1040ez Real estate taxes. Irs tax tables 1040ez   If you pay the real estate taxes the seller owed on real property you bought, and the seller did not reimburse you, treat those taxes as part of your basis. Irs tax tables 1040ez   If you reimburse the seller for taxes the seller paid for you, you generally can deduct that amount as a tax expense. Irs tax tables 1040ez Whether or not you reimburse the seller, do not include that amount in the basis of your property. Irs tax tables 1040ez Settlement costs. Irs tax tables 1040ez   Your basis includes the settlement fees and closing costs for buying the property. Irs tax tables 1040ez See Publication 551 for a detailed list of items you can and cannot include in basis. Irs tax tables 1040ez   Do not include fees and costs for getting a loan on the property. Irs tax tables 1040ez Also, do not include amounts placed in escrow for the future payment of items such as taxes and insurance. Irs tax tables 1040ez Points. Irs tax tables 1040ez   If you pay points to get a loan (including a mortgage, second mortgage, or line-of-credit), do not add the points to the basis of the related property. Irs tax tables 1040ez You may be able to deduct the points currently or over the term of the loan. Irs tax tables 1040ez For more information about deducting points, see Points in chapter 4 of Publication 535. Irs tax tables 1040ez Assumption of a mortgage. Irs tax tables 1040ez   If you buy property and assume (or buy the property subject to) an existing mortgage, your basis includes the amount you pay for the property plus the amount you owe on the mortgage. Irs tax tables 1040ez Example. Irs tax tables 1040ez If you buy a farm for $100,000 cash and assume a mortgage of $400,000, your basis is $500,000. Irs tax tables 1040ez Constructing assets. Irs tax tables 1040ez   If you build property or have assets built for you, your expenses for this construction are part of your basis. Irs tax tables 1040ez Some of these expenses include the following costs: Land, Labor and materials, Architect's fees, Building permit charges, Payments to contractors, Payments for rental equipment, and Inspection fees. Irs tax tables 1040ez   In addition, if you use your own employees, farm materials, and equipment to build an asset, do not deduct the following expenses. Irs tax tables 1040ez You must capitalize them (include them in the asset's basis). Irs tax tables 1040ez Employee wages paid for the construction work, reduced by any employment credits allowed. Irs tax tables 1040ez Depreciation on equipment you own while it is used in the construction. Irs tax tables 1040ez Operating and maintenance costs for equipment used in the construction. Irs tax tables 1040ez The cost of business supplies and materials used in the construction. Irs tax tables 1040ez    Do not include the value of your own labor, or any other labor you did not pay for, in the basis of any property you construct. Irs tax tables 1040ez Allocating the Basis In some instances, the rules for determining basis apply to a group of assets acquired in the same transaction or to property that consists of separate items. Irs tax tables 1040ez To determine the basis of these assets or separate items, there must be an allocation of basis. Irs tax tables 1040ez Group of assets acquired. Irs tax tables 1040ez   If you buy multiple assets for a lump sum, allocate the amount you pay among the assets. Irs tax tables 1040ez Use this allocation to figure your basis for depreciation and gain or loss on a later disposition of any of these assets. Irs tax tables 1040ez You and the seller may agree in the sales contract to a specific allocation of the purchase price among the assets. Irs tax tables 1040ez If this allocation is based on the value of each asset and you and the seller have adverse tax interests, the allocation generally will be accepted. Irs tax tables 1040ez Farming business acquired. Irs tax tables 1040ez   If you buy a group of assets that makes up a farming business, there are special rules you must use to allocate the purchase price among the assets. Irs tax tables 1040ez Generally, reduce the purchase price by any cash received. Irs tax tables 1040ez Allocate the remaining purchase price to the other business assets received in proportion to (but not more than) their FMV and in a certain order. Irs tax tables 1040ez See Trade or Business Acquired under Allocating the Basis in Publication 551 for more information. Irs tax tables 1040ez Transplanted embryo. Irs tax tables 1040ez   If you buy a cow that is pregnant with a transplanted embryo, allocate to the basis of the cow the part of the purchase price equal to the FMV of the cow without the implant. Irs tax tables 1040ez Allocate the rest of the purchase price to the basis of the calf. Irs tax tables 1040ez Neither the cost allocated to the cow nor the cost allocated to the calf is deductible as a current business expense. Irs tax tables 1040ez Uniform Capitalization Rules Under the uniform capitalization rules, you must include certain direct and indirect costs in the basis of property you produce or in your inventory costs, rather than claim them as a current deduction. Irs tax tables 1040ez You recover these costs through depreciation, amortization, or cost of goods sold when you use, sell, or otherwise dispose of the property. Irs tax tables 1040ez Generally, you are subject to the uniform capitalization rules if you do any of the following: Produce real or tangible personal property, or Acquire property for resale. Irs tax tables 1040ez However, this rule does not apply to personal property if your average annual gross receipts for the 3-tax-year period ending with the year preceding the current tax year are $10 million or less. Irs tax tables 1040ez You produce property if you construct, build, install, manufacture, develop, improve, or create the property. Irs tax tables 1040ez You are not subject to the uniform capitalization rules if the property is produced for personal use. Irs tax tables 1040ez In a farming business, you produce property if you raise or grow any agricultural or horticultural commodity, including plants and animals. Irs tax tables 1040ez Plants. Irs tax tables 1040ez   A plant produced in a farming business includes the following items: A fruit, nut, or other crop-bearing tree; An ornamental tree; A vine; A bush; Sod; and The crop or yield of a plant that will have more than one crop or yield. Irs tax tables 1040ez Animals. Irs tax tables 1040ez   An animal produced in a farming business includes any stock, poultry or other bird, and fish or other sea life. Irs tax tables 1040ez The direct and indirect costs of producing plants or animals include preparatory costs and preproductive period costs. Irs tax tables 1040ez Preparatory costs include the acquisition costs of the seed, seedling, plant, or animal. Irs tax tables 1040ez For plants, preproductive period costs include the costs of items such as irrigation, pruning, frost protection, spraying, and harvesting. Irs tax tables 1040ez For animals, preproductive period costs include the costs of items such as feed, maintaining pasture or pen areas, breeding, veterinary services, and bedding. Irs tax tables 1040ez Exceptions. Irs tax tables 1040ez   In a farming business, the uniform capitalization rules do not apply to: Any animal, Any plant with a preproductive period of 2 years or less, or Any costs of replanting certain plants lost or damaged due to casualty. Irs tax tables 1040ez   Exceptions (1) and (2) do not apply to a corporation, partnership, or tax shelter required to use an accrual method of accounting. Irs tax tables 1040ez See Accrual Method Required under Accounting Methods in chapter 2. Irs tax tables 1040ez   In addition, you can elect not to use the uniform capitalization rules for plants with a preproductive period of more than 2 years. Irs tax tables 1040ez If you make this election, special rules apply. Irs tax tables 1040ez This election cannot be made by a corporation, partnership, or tax shelter required to use an accrual method of accounting. Irs tax tables 1040ez This election also does not apply to any costs incurred for the planting, cultivation, maintenance, or development of any citrus or almond grove (or any part thereof) within the first 4 years the trees were planted. Irs tax tables 1040ez    If you elect not to use the uniform capitalization rules, you must use the alternative depreciation system for all property used in any of your farming businesses and placed in service in any tax year during which the election is in effect. Irs tax tables 1040ez See chapter 7, for additional information on depreciation. Irs tax tables 1040ez Example. Irs tax tables 1040ez You grow trees that have a preproductive period of more than 2 years. Irs tax tables 1040ez The trees produce an annual crop. Irs tax tables 1040ez You are an individual and the uniform capitalization rules apply to your farming business. Irs tax tables 1040ez You must capitalize the direct costs and an allocable part of indirect costs incurred due to the production of the trees. Irs tax tables 1040ez You are not required to capitalize the costs of producing the annual crop because its preproductive period is 2 years or less. Irs tax tables 1040ez Preproductive period of more than 2 years. Irs tax tables 1040ez   The preproductive period of plants grown in commercial quantities in the United States is based on their nationwide weighted average preproductive period. Irs tax tables 1040ez Plants producing the crops or yields shown in Table 6-1 have a nationwide weighted average preproductive period of more than 2 years. Irs tax tables 1040ez Other plants (not shown in Table 6-1) may also have a nationwide weighted average preproductive period of more than 2 years. Irs tax tables 1040ez More information. Irs tax tables 1040ez   For more information on the uniform capitalization rules that apply to property produced in a farming business, see Regulations section 1. Irs tax tables 1040ez 263A-4. Irs tax tables 1040ez Table 6-1. Irs tax tables 1040ez Plants With a Preproductive Period of More Than 2 Years Plants producing the following crops or yields have a nationwide weighted average preproductive period of more than 2 years. Irs tax tables 1040ez Almonds Apples Apricots Avocados Blueberries Cherries Chestnuts Coffee beans Currants Dates Figs Grapefruit Grapes Guavas Kiwifruit Kumquats Lemons Limes Macadamia nuts Mangoes Nectarines Olives Oranges Peaches Pears Pecans Persimmons Pistachio nuts Plums Pomegranates Prunes Tangelos Tangerines Tangors Walnuts Adjusted Basis Before figuring gain or loss on a sale, exchange, or other disposition of property or figuring allowable depreciation, depletion, or amortization, you must usually make certain adjustments to the cost basis or basis other than cost (discussed later) of the property. Irs tax tables 1040ez The adjustments to the original basis are increases or decreases to the cost basis or other basis which result in the adjusted basis of the property. Irs tax tables 1040ez Increases to Basis Increase the basis of any property by all items properly added to a capital account. Irs tax tables 1040ez These include the cost of any improvements having a useful life of more than 1 year. Irs tax tables 1040ez The following costs increase the basis of property. Irs tax tables 1040ez The cost of extending utility service lines to property. Irs tax tables 1040ez Legal fees, such as the cost of defending and perfecting title. Irs tax tables 1040ez Legal fees for seeking a decrease in an assessment levied against property to pay for local improvements. Irs tax tables 1040ez Assessments for items such as paving roads and building ditches that increase the value of the property assessed. Irs tax tables 1040ez Do not deduct these expenses as taxes. Irs tax tables 1040ez However, you can deduct as taxes amounts assessed for maintenance or repairs, or for meeting interest charges related to the improvements. Irs tax tables 1040ez If you make additions or improvements to business property, depreciate the basis of each addition or improvement as separate depreciable property using the rules that would apply to the original property if you had placed it in service at the same time you placed the addition or improvement in service. Irs tax tables 1040ez See chapter 7. Irs tax tables 1040ez Deducting vs. Irs tax tables 1040ez capitalizing costs. Irs tax tables 1040ez   Do not add to your basis costs you can deduct as current expenses. Irs tax tables 1040ez For example, amounts paid for incidental repairs or maintenance are deductible as business expenses and are not added to basis. Irs tax tables 1040ez However, you can elect either to deduct or to capitalize certain other costs. Irs tax tables 1040ez See chapter 7 in Publication 535. Irs tax tables 1040ez Decreases to Basis The following are some items that reduce the basis of property. Irs tax tables 1040ez Section 179 deduction. Irs tax tables 1040ez Deductions previously allowed or allowable for amortization, depreciation, and depletion. Irs tax tables 1040ez Alternative motor vehicle credit. Irs tax tables 1040ez See Form 8910. Irs tax tables 1040ez Alternative fuel vehicle refueling property credit. Irs tax tables 1040ez See Form 8911. Irs tax tables 1040ez Residential energy efficient property credits. Irs tax tables 1040ez See Form 5695. Irs tax tables 1040ez Investment credit (part or all) taken. Irs tax tables 1040ez Casualty and theft losses and insurance reimbursements. Irs tax tables 1040ez Payments you receive for granting an easement. Irs tax tables 1040ez Exclusion from income of subsidies for energy conservation measures. Irs tax tables 1040ez Certain canceled debt excluded from income. Irs tax tables 1040ez Rebates from a manufacturer or seller. Irs tax tables 1040ez Patronage dividends received from a cooperative association as a result of a purchase of property. Irs tax tables 1040ez See Patronage Dividends in chapter 3. Irs tax tables 1040ez Gas-guzzler tax. Irs tax tables 1040ez See Form 6197. Irs tax tables 1040ez Some of these items are discussed next. Irs tax tables 1040ez For a more detailed list of items that decrease basis, see section 1016 of the Internal Revenue Code and Publication 551. Irs tax tables 1040ez Depreciation and section 179 deduction. Irs tax tables 1040ez   The adjustments you must make to the basis of the property if you take the section 179 deduction or depreciate the property are explained next. Irs tax tables 1040ez For more information on these deductions, see chapter 7. Irs tax tables 1040ez Section 179 deduction. Irs tax tables 1040ez   If you take the section 179 expense deduction for all or part of the cost of qualifying business property, decrease the basis of the property by the deduction. Irs tax tables 1040ez Depreciation. Irs tax tables 1040ez   Decrease the basis of property by the depreciation you deducted or could have deducted on your tax returns under the method of depreciation you chose. Irs tax tables 1040ez If you took less depreciation than you could have under the method chosen, decrease the basis by the amount you could have taken under that method. Irs tax tables 1040ez If you did not take a depreciation deduction, reduce the basis by the full amount of the depreciation you could have taken. Irs tax tables 1040ez   If you deducted more depreciation than you should have, decrease your basis by the amount you should have deducted plus the part of the excess depreciation you deducted that actually reduced your tax liability for any year. Irs tax tables 1040ez   See chapter 7 for information on figuring the depreciation you should have claimed. Irs tax tables 1040ez   In decreasing your basis for depreciation, take into account the amount deducted on your tax returns as depreciation and any depreciation you must capitalize under the uniform capitalization rules. Irs tax tables 1040ez Casualty and theft losses. Irs tax tables 1040ez   If you have a casualty or theft loss, decrease the basis of the property by any insurance or other reimbursement. Irs tax tables 1040ez Also, decrease it by any deductible loss not covered by insurance. Irs tax tables 1040ez See chapter 11 for information about figuring your casualty or theft loss. Irs tax tables 1040ez   You must increase your basis in the property by the amount you spend on clean-up costs (such as debris removal) and repairs that restore the property to its pre-casualty condition. Irs tax tables 1040ez To make this determination, compare the repaired property to the property before the casualty. Irs tax tables 1040ez Easements. Irs tax tables 1040ez   The amount you receive for granting an easement is usually considered to be proceeds from the sale of an interest in the real property. Irs tax tables 1040ez It reduces the basis of the affected part of the property. Irs tax tables 1040ez If the amount received is more than the basis of the part of the property affected by the easement, reduce your basis in that part to zero and treat the excess as a recognized gain. Irs tax tables 1040ez See Easements and rights-of-way in chapter 3. Irs tax tables 1040ez Exclusion from income of subsidies for energy conservation measures. Irs tax tables 1040ez   You can exclude from gross income any subsidy you received from a public utility company for the purchase or installation of an energy conservation measure for a dwelling unit. Irs tax tables 1040ez Reduce the basis of the property by the excluded amount. Irs tax tables 1040ez Canceled debt excluded from income. Irs tax tables 1040ez   If a debt you owe is canceled or forgiven, other than as a gift or bequest, you generally must include the canceled amount in your gross income for tax purposes. Irs tax tables 1040ez A debt includes any indebtedness for which you are liable or which attaches to property you hold. Irs tax tables 1040ez   You can exclude your canceled debt from income if the debt is any of the following. Irs tax tables 1040ez Debt canceled in a bankruptcy case or when you are insolvent. Irs tax tables 1040ez Qualified farm debt. Irs tax tables 1040ez Qualified real property business debt (provided you are not a C corporation). Irs tax tables 1040ez Qualified principal residence indebtedness. Irs tax tables 1040ez Discharge of certain indebtedness of a qualified individual because of Midwestern disasters. Irs tax tables 1040ez If you exclude canceled debt described in (1) or (2), you may have to reduce the basis of your depreciable and nondepreciable property. Irs tax tables 1040ez If you exclude canceled debt described in (3), you must only reduce the basis of your depreciable property by the excluded amount. Irs tax tables 1040ez   For more information about canceled debt in a bankruptcy case, see Publication 908, Bankruptcy Tax Guide. Irs tax tables 1040ez For more information about insolvency and canceled debt that is qualified farm debt or qualified principal residence indebtedness, see chapter 3. Irs tax tables 1040ez For more information about qualified real property business debt, see Publication 334, Tax Guide for Small Business. Irs tax tables 1040ez For more information about canceled debt in Midwestern disaster areas, see Publication 4492-B, Information for Affected Taxpayers in the Midwestern Disaster Areas. Irs tax tables 1040ez Basis Other Than Cost There are times when you cannot use cost as basis. Irs tax tables 1040ez In these situations, the fair market value or the adjusted basis of property may be used. Irs tax tables 1040ez Examples are discussed next. Irs tax tables 1040ez Property changed from personal to business or rental use. Irs tax tables 1040ez   When you hold property for personal use and then change it to business use or use it to produce rent, you must figure its basis for depreciation. Irs tax tables 1040ez An example of changing property from personal to business use would be changing the use of your pickup truck that you originally purchased for your personal use to use in your farming business. Irs tax tables 1040ez   The basis for depreciation is the lesser of: The FMV of the property on the date of the change, or Your adjusted basis on the date of the change. Irs tax tables 1040ez   If you later sell or dispose of this property, the basis you use will depend on whether you are figuring a gain or loss. Irs tax tables 1040ez The basis for figuring a gain is your adjusted basis in the property when you sell the property. Irs tax tables 1040ez Figure the basis for a loss starting with the smaller of your adjusted basis or the FMV of the property at the time of the change to business or rental use. Irs tax tables 1040ez Then make adjustments (increases and decreases) for the period after the change in the property's use, as discussed earlier under Adjusted Basis . Irs tax tables 1040ez Property received for services. Irs tax tables 1040ez   If you receive property for services, include the property's FMV in income. Irs tax tables 1040ez The amount you include in income becomes your basis. Irs tax tables 1040ez If the services were performed for a price agreed on beforehand, it will be accepted as the FMV of the property if there is no evidence to the contrary. Irs tax tables 1040ez Example. Irs tax tables 1040ez George Smith is an accountant and also operates a farming business. Irs tax tables 1040ez George agreed to do some accounting work for his neighbor in exchange for a dairy cow. Irs tax tables 1040ez The accounting work and the cow are each worth $1,500. Irs tax tables 1040ez George must include $1,500 in income for his accounting services. Irs tax tables 1040ez George's basis in the cow is $1,500. Irs tax tables 1040ez Taxable Exchanges A taxable exchange is one in which the gain is taxable, or the loss is deductible. Irs tax tables 1040ez A taxable gain or deductible loss also is known as a recognized gain or loss. Irs tax tables 1040ez A taxable exchange occurs when you receive cash or get property that is not similar or related in use to the property exchanged. Irs tax tables 1040ez If you receive property in exchange for other property in a taxable exchange, the basis of the property you receive is usually its FMV at the time of the exchange. Irs tax tables 1040ez Example. Irs tax tables 1040ez You trade a tract of farmland with an adjusted basis of $2,000 for a tractor that has an FMV of $6,000. Irs tax tables 1040ez You must report a taxable gain of $4,000 for the land. Irs tax tables 1040ez The tractor has a basis of $6,000. Irs tax tables 1040ez Involuntary Conversions If you receive property as a result of an involuntary conversion, such as a casualty, theft, or condemnation, figure the basis of the replacement property you receive using the basis of the converted property. Irs tax tables 1040ez Similar or related property. Irs tax tables 1040ez   If the replacement property is similar or related in service or use to the converted property, the replacement property's basis is the same as the old property's basis on the date of the conversion. Irs tax tables 1040ez However, make the following adjustments. Irs tax tables 1040ez Decrease the basis by the following amounts. Irs tax tables 1040ez Any loss you recognize on the involuntary conversion. Irs tax tables 1040ez Any money you receive that you do not spend on similar property. Irs tax tables 1040ez Increase the basis by the following amounts. Irs tax tables 1040ez Any gain you recognize on the involuntary conversion. Irs tax tables 1040ez Any cost of acquiring the replacement property. Irs tax tables 1040ez Money or property not similar or related. Irs tax tables 1040ez   If you receive money or property not similar or related in service or use to the converted property and you buy replacement property similar or related in service or use to the converted property, the basis of the replacement property is its cost decreased by the gain not recognized on the involuntary conversion. Irs tax tables 1040ez Allocating the basis. Irs tax tables 1040ez   If you buy more than one piece of replacement property, allocate your basis among the properties based on their respective costs. Irs tax tables 1040ez Basis for depreciation. Irs tax tables 1040ez   Special rules apply in determining and depreciating the basis of MACRS property acquired in an involuntary conversion. Irs tax tables 1040ez For information, see Figuring the Deduction for Property Acquired in a Nontaxable Exchange under Figuring Depreciation Under MACRS in chapter 7. Irs tax tables 1040ez For more information about involuntary conversions, see chapter 11. Irs tax tables 1040ez Nontaxable Exchanges A nontaxable exchange is an exchange in which you are not taxed on any gain and you cannot deduct any loss. Irs tax tables 1040ez A nontaxable gain or loss also is known as an unrecognized gain or loss. Irs tax tables 1040ez If you receive property in a nontaxable exchange, its basis is usually the same as the basis of the property you transferred. Irs tax tables 1040ez Like-Kind Exchanges The exchange of property for the same kind of property is the most common type of nontaxable exchange. Irs tax tables 1040ez For an exchange to qualify as a like-kind exchange, you must hold for business or investment purposes both the property you transfer and the property you receive. Irs tax tables 1040ez There must also be an exchange of like-kind property. Irs tax tables 1040ez For more information, see Like-Kind Exchanges in  chapter 8. Irs tax tables 1040ez The basis of the property you receive generally is the same as the adjusted basis of the property you gave up. Irs tax tables 1040ez Example 1. Irs tax tables 1040ez You traded a truck you used in your farming business for a new smaller truck to use in farming. Irs tax tables 1040ez The adjusted basis of the old truck was $10,000. Irs tax tables 1040ez The FMV of the new truck is $30,000. Irs tax tables 1040ez Because this is a nontaxable exchange, you do not recognize any gain, and your basis in the new truck is $10,000, the same as the adjusted basis of the truck you traded. Irs tax tables 1040ez Example 2. Irs tax tables 1040ez You trade a field cultivator (adjusted basis of $8,000) for a planter (FMV of $9,000). Irs tax tables 1040ez You use both the field cultivator and the planter in your farming business. Irs tax tables 1040ez The basis of the planter you receive is $8,000, the same as the field cultivator traded Exchange expenses. Irs tax tables 1040ez   Exchange expenses generally are the closing costs that you pay. Irs tax tables 1040ez They include such items as brokerage commissions, attorney fees, and deed preparation fees. Irs tax tables 1040ez Add them to the basis of the like-kind property you receive. Irs tax tables 1040ez Property plus cash. Irs tax tables 1040ez   If you trade property in a like-kind exchange and also pay money, the basis of the property you receive is the adjusted basis of the property you gave up plus the money you paid. Irs tax tables 1040ez Example. Irs tax tables 1040ez You trade in a truck (adjusted basis of $3,000) for another truck (FMV of $7,500) and pay $4,000. Irs tax tables 1040ez Your basis in the new truck is $7,000 (the $3,000 adjusted basis of the old truck plus the $4,000 cash). Irs tax tables 1040ez Special rules for related persons. Irs tax tables 1040ez   If a like-kind exchange takes place directly or indirectly between related persons and either party disposes of the property within 2 years after the exchange, the exchange no longer qualifies for like-kind exchange treatment. Irs tax tables 1040ez Each person must report any gain or loss not recognized on the original exchange unless the loss is not deductible under the related party rules. Irs tax tables 1040ez Each person reports it on the tax return filed for the year in which the later disposition occurred. Irs tax tables 1040ez If this rule applies, the basis of the property received in the original exchange will be its FMV. Irs tax tables 1040ez For more information, see chapter 8. Irs tax tables 1040ez Exchange of business property. Irs tax tables 1040ez   Exchanging the property of one business for the property of another business generally is a multiple property exchange. Irs tax tables 1040ez For information on figuring basis, see Multiple Property Exchanges in chapter 1 of Publication 544. Irs tax tables 1040ez Basis for depreciation. Irs tax tables 1040ez   Special rules apply in determining and depreciating the basis of MACRS property acquired in a like-kind transaction. Irs tax tables 1040ez For information, see Figuring the Deduction for Property Acquired in a Nontaxable Exchange under Figuring Depreciation Under MACRS in chapter 7. Irs tax tables 1040ez Partially Nontaxable Exchanges A partially nontaxable exchange is an exchange in which you receive unlike property or money in addition to like-kind property. Irs tax tables 1040ez The basis of the property you receive is the same as the adjusted basis of the property you gave up with the following adjustments. Irs tax tables 1040ez Decrease the basis by the following amounts. Irs tax tables 1040ez Any money you receive. Irs tax tables 1040ez Any loss you recognize on the exchange. Irs tax tables 1040ez Increase the basis by the following amounts. Irs tax tables 1040ez Any additional costs you incur. Irs tax tables 1040ez Any gain you recognize on the exchange. Irs tax tables 1040ez If the other party to the exchange assumes your liabilities, treat the debt assumption as money you received in the exchange. Irs tax tables 1040ez Example 1. Irs tax tables 1040ez You trade farmland (basis of $100,000) for another tract of farmland (FMV of $110,000) and $30,000 cash. Irs tax tables 1040ez You realize a gain of $40,000. Irs tax tables 1040ez This is the FMV of the land received plus the cash minus the basis of the land you traded ($110,000 + $30,000 − $100,000). Irs tax tables 1040ez Include your gain in income (recognize gain) only to the extent of the cash received. Irs tax tables 1040ez Your basis in the land you received is figured as follows. Irs tax tables 1040ez Basis of land traded $100,000 Minus: Cash received (adjustment 1(a)) − 30,000   $70,000 Plus: Gain recognized (adjustment 2(b)) + 30,000 Basis of land received $100,000 Example 2. Irs tax tables 1040ez You trade a truck (adjusted basis of $22,750) for another truck (FMV of $20,000) and $10,000 cash. Irs tax tables 1040ez You realize a gain of $7,250. Irs tax tables 1040ez This is the FMV of the truck received plus the cash minus the adjusted basis of the truck you traded ($20,000 + $10,000 − $22,750). Irs tax tables 1040ez You include all the gain in your income (recognize gain) because the gain is less than the cash you received. Irs tax tables 1040ez Your basis in the truck you received is figured as follows. Irs tax tables 1040ez Adjusted basis of truck traded $22,750 Minus: Cash received (adjustment 1(a)) −10,000   $12,750 Plus: Gain recognized (adjustment 2(b)) + 7,250 Basis of truck received $20,000 Allocation of basis. Irs tax tables 1040ez   If you receive like-kind and unlike properties in the exchange, allocate the basis first to the unlike property, other than money, up to its FMV on the date of the exchange. Irs tax tables 1040ez The rest is the basis of the like-kind property. Irs tax tables 1040ez Example. Irs tax tables 1040ez You traded a tractor with an adjusted basis of $15,000 for another tractor that had an FMV of $12,500. Irs tax tables 1040ez You also received $1,000 cash and a truck that had an FMV of $3,000. Irs tax tables 1040ez The truck is unlike property. Irs tax tables 1040ez You realized a gain of $1,500. Irs tax tables 1040ez This is the FMV of the tractor received plus the FMV of the truck received plus the cash minus the adjusted basis of the tractor you traded ($12,500 + $3,000 + $1,000 − $15,000). Irs tax tables 1040ez You include in income (recognize) all $1,500 of the gain because it is less than the FMV of the unlike property plus the cash received. Irs tax tables 1040ez Your basis in the properties you received is figured as follows. Irs tax tables 1040ez Adjusted basis of old tractor $15,000 Minus: Cash received (adjustment 1(a)) − 1,000   $14,000 Plus: Gain recognized (adjustment 2(b)) + 1,500 Total basis of properties received $15,500 Allocate the total basis of $15,500 first to the unlike property—the truck ($3,000). Irs tax tables 1040ez This is the truck's FMV. Irs tax tables 1040ez The rest ($12,500) is the basis of the tractor. Irs tax tables 1040ez Sale and Purchase If you sell property and buy similar property in two mutually dependent transactions, you may have to treat the sale and purchase as a single nontaxable exchange. Irs tax tables 1040ez Example. Irs tax tables 1040ez You used a tractor on your farm for 3 years. Irs tax tables 1040ez Its adjusted basis is $22,000 and its FMV is $40,000. Irs tax tables 1040ez You are interested in a new tractor, which sells for $60,000. Irs tax tables 1040ez Ordinarily, you would trade your old tractor for the new one and pay the dealer $20,000. Irs tax tables 1040ez Your basis for depreciating the new tractor would then be $42,000 ($20,000 + $22,000, the adjusted basis of your old tractor). Irs tax tables 1040ez However, you want a higher basis for depreciating the new tractor, so you agree to pay the dealer $60,000 for the new tractor if he will pay you $40,000 for your old tractor. Irs tax tables 1040ez Because the two transactions are dependent on each other, you are treated as having exchanged your old tractor for the new one and paid $20,000 ($60,000 − $40,000). Irs tax tables 1040ez Your basis for depreciating the new tractor is $42,000, the same as if you traded the old tractor. Irs tax tables 1040ez Property Received as a Gift To figure the basis of property you receive as a gift, you must know its adjusted basis (defined earlier) to the donor just before it was given to you. Irs tax tables 1040ez You also must know its FMV at the time it was given to you and any gift tax paid on it. Irs tax tables 1040ez FMV equal to or greater than donor's adjusted basis. Irs tax tables 1040ez   If the FMV of the property is equal to or greater than the donor's adjusted basis, your basis is the donor's adjusted basis when you received the gift. Irs tax tables 1040ez Increase your basis by all or part of any gift tax paid, depending on the date of the gift. Irs tax tables 1040ez   Also, for figuring gain or loss from a sale or other disposition of the property, or for figuring depreciation, depletion, or amortization deductions on business property, you must increase or decrease your basis (the donor's adjusted basis) by any required adjustments to basis while you held the property. Irs tax tables 1040ez See Adjusted Basis , earlier. Irs tax tables 1040ez   If you received a gift during the tax year, increase your basis in the gift (the donor's adjusted basis) by the part of the gift tax paid on it due to the net increase in value of the gift. Irs tax tables 1040ez Figure the increase by multiplying the gift tax paid by the following fraction. Irs tax tables 1040ez Net increase in value of the gift Amount of the gift   The net increase in value of the gift is the FMV of the gift minus the donor's adjusted basis. Irs tax tables 1040ez The amount of the gift is its value for gift tax purposes after reduction by any annual exclusion and marital or charitable deduction that applies to the gift. Irs tax tables 1040ez Example. Irs tax tables 1040ez In 2013, you received a gift of property from your mother that had an FMV of $50,000. Irs tax tables 1040ez Her adjusted basis was $20,000. Irs tax tables 1040ez The amount of the gift for gift tax purposes was $36,000 ($50,000 minus the $14,000 annual exclusion). Irs tax tables 1040ez She paid a gift tax of $7,320. Irs tax tables 1040ez Your basis, $26,076, is figured as follows. Irs tax tables 1040ez Fair market value $50,000 Minus: Adjusted basis −20,000 Net increase in value $30,000 Gift tax paid $7,320 Multiplied by ($30,000 ÷ $36,000) × . Irs tax tables 1040ez 83 Gift tax due to net increase in value $6,076 Adjusted basis of property to your mother +20,000 Your basis in the property $26,076 Note. Irs tax tables 1040ez If you received a gift before 1977, your basis in the gift (the donor's adjusted basis) includes any gift tax paid on it. Irs tax tables 1040ez However, your basis cannot exceed the FMV of the gift when it was given to you. Irs tax tables 1040ez FMV less than donor's adjusted basis. Irs tax tables 1040ez   If the FMV of the property at the time of the gift is less than the donor's adjusted basis, your basis depends on whether you have a gain or a loss when you dispose of the property. Irs tax tables 1040ez Your basis for figuring gain is the donor's adjusted basis plus or minus any required adjustments to basis while you held the property. Irs tax tables 1040ez Your basis for figuring loss is its FMV when you received the gift plus or minus any required adjustments to basis while you held the property. Irs tax tables 1040ez (See Adjusted Basis , earlier. Irs tax tables 1040ez )   If you use the donor's adjusted basis for figuring a gain and get a loss, and then use the FMV for figuring a loss and get a gain, you have neither gain nor loss on the sale or other disposition of the property. Irs tax tables 1040ez Example. Irs tax tables 1040ez You received farmland as a gift from your parents when they retired from farming. Irs tax tables 1040ez At the time of the gift, the land had an FMV of $80,000. Irs tax tables 1040ez Your parents' adjusted basis was $100,000. Irs tax tables 1040ez After you received the land, no events occurred that would increase or decrease your basis. Irs tax tables 1040ez If you sell the land for $120,000, you will have a $20,000 gain because you must use the donor's adjusted basis at the time of the gift ($100,000) as your basis to figure a gain. Irs tax tables 1040ez If you sell the land for $70,000, you will have a $10,000 loss because you must use the FMV at the time of the gift ($80,000) as your basis to figure a loss. Irs tax tables 1040ez If the sales price is between $80,000 and $100,000, you have neither gain nor loss. Irs tax tables 1040ez For instance, if the sales price was $90,000 and you tried to figure a gain using the donor's adjusted basis ($100,000), you would get a $10,000 loss. Irs tax tables 1040ez If you then tried to figure a loss using the FMV ($80,000), you would get a $10,000 gain. Irs tax tables 1040ez Business property. Irs tax tables 1040ez   If you hold the gift as business property, your basis for figuring any depreciation, depletion, or amortization deductions is the same as the donor's adjusted basis plus or minus any required adjustments to basis while you hold the property. Irs tax tables 1040ez Property Transferred From a Spouse The basis of property transferred to you or transferred in trust for your benefit by your spouse is the same as your spouse's adjusted basis. Irs tax tables 1040ez The same rule applies to a transfer by your former spouse if the transfer is incident to divorce. Irs tax tables 1040ez However, for property transferred in trust, adjust your basis for any gain recognized by your spouse or former spouse if the liabilities assumed plus the liabilities to which the property is subject are more than the adjusted basis of the property transferred. Irs tax tables 1040ez The transferor must give you the records needed to determine the adjusted basis and holding period of the property as of the date of the transfer. Irs tax tables 1040ez For more information, see Property Settlements in Publication 504, Divorced or Separated Individuals. Irs tax tables 1040ez Inherited Property Your basis in property you inherited from a decedent, who died before January 1, 2010, or after December 31, 2010, is generally one of the following: The FMV of the property at the date of the decedent's death. Irs tax tables 1040ez If a federal estate return is filed, you can use its appraised value. Irs tax tables 1040ez The FMV on the alternate valuation date, if the personal representative for the estate elects to use alternate valuation. Irs tax tables 1040ez For information on the alternate valuation, see the Instructions for Form 706. Irs tax tables 1040ez The decedent's adjusted basis in land to the extent of the value that is excluded from the decedent's taxable estate as a qualified conservation easement. Irs tax tables 1040ez If a federal estate tax return does not have to be filed, your basis in the inherited property is its appraised value at the date of death for state inheritance or transmission taxes. Irs tax tables 1040ez Special-use valuation method. Irs tax tables 1040ez   Under certain conditions, when a person dies, the executor or personal representative of that person's estate may elect to value qualified real property at other than its FMV. Irs tax tables 1040ez If so, the executor or personal representative values the qualified real property based on its use as a farm or other closely held business. Irs tax tables 1040ez If the executor or personal representative elects this method of valuation for estate tax purposes, this value is the basis of the property for the qualified heirs. Irs tax tables 1040ez The qualified heirs should be able to get the necessary value from the executor or personal representative of the estate. Irs tax tables 1040ez   If you are a qualified heir who received special-use valuation property, increase your basis by any gain recognized by the estate or trust because of post-death appreciation. Irs tax tables 1040ez Post-death appreciation is the property's FMV on the date of distribution minus the property's FMV either on the date of the individual's death or on the alternate valuation date. Irs tax tables 1040ez Figure all FMVs without regard to the special-use valuation. Irs tax tables 1040ez   You may be liable for an additional estate tax if, within 10 years after the death of the decedent, you transfer the property or the property stops being used as a farm. Irs tax tables 1040ez This tax does not apply if you dispose of the property in a like-kind exchange or in an involuntary conversion in which all of the proceeds are reinvested in qualified replacement property. Irs tax tables 1040ez The tax also does not apply if you transfer the property to a member of your family and certain requirements are met. Irs tax tables 1040ez   You can elect to increase your basis in special-use valuation property if it becomes subject to the additional estate tax. Irs tax tables 1040ez To increase your basis, you must make an irrevocable election and pay interest on the additional estate tax figured from the date 9 months after the decedent's death until the date of payment of the additional estate tax. Irs tax tables 1040ez If you meet these requirements, increase your basis in the property to its FMV on the date of the decedent's death or the alternate valuation date. Irs tax tables 1040ez The increase in your basis is considered to have occurred immediately before the event that resulted in the additional estate tax. Irs tax tables 1040ez   You make the election by filing, with Form 706-A, United States Additional Estate Tax Return, a statement that: Contains your (and the estate's) name, address, and taxpayer identification number; Identifies the election as an election under section 1016(c) of the Internal Revenue Code; Specifies the property for which you are making the election; and Provides any additional information required by the Form 706-A instructions. Irs tax tables 1040ez   For more information, see Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return, Form 706-A, and the related instructions. Irs tax tables 1040ez Property inherited from a decedent who died in 2010. Irs tax tables 1040ez   If you inherited property from a decedent who died in 2010, different rules may apply. Irs tax tables 1040ez See Publication 4895, Tax Treatment of Property Acquired From a Decendent Dying in 2010, for details. Irs tax tables 1040ez Property Distributed From a Partnership or Corporation The following rules apply to determine a partner's basis and a shareholder's basis in property distributed respectively from a partnership to the partner with respect to the partner's interest in the partnership and from a corporation to the shareholder with respect to the shareholder's ownership of stock in the corporation. Irs tax tables 1040ez Partner's basis. Irs tax tables 1040ez   Unless there is a complete liquidation of a partner's interest, the basis of property (other than money) distributed by a partnership to the partner is its adjusted basis to the partnership immediately before the distribution. Irs tax tables 1040ez However, the basis of the property to the partner cannot be more than the adjusted basis of his or her interest in the partnership reduced by any money received in the same transaction. Irs tax tables 1040ez For more information, see Partner's Basis for Distributed Property in Publication 541, Partnerships. Irs tax tables 1040ez Shareholder's basis. Irs tax tables 1040ez   The basis of property distributed by a corporation to a shareholder is its fair market value. Irs tax tables 1040ez For more information about corporate distributions, see Distributions to Shareholders in Publication 542, Corporations. Irs tax tables 1040ez Prev  Up  Next   Home   More Online Publications