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Military Turbotax

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Military Turbotax

Military turbotax 11. Military turbotax   Casualties, Thefts, and Condemnations Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: Casualties and TheftsDeductible losses. Military turbotax Nondeductible losses. Military turbotax Family pet. Military turbotax Progressive deterioration. Military turbotax Decline in market value of stock. Military turbotax Mislaid or lost property. Military turbotax Farming Losses How To Figure a Loss Deduction Limits on Losses of Personal-Use Property When Loss Is Deductible Proof of Loss Figuring a Gain Other Involuntary ConversionsCondemnation Irrigation Project Livestock Losses Tree Seedlings Postponing GainException. Military turbotax Related persons. Military turbotax Replacement Property Replacement Period How To Postpone Gain Disaster Area LossesWho is eligible. Military turbotax Covered disaster area. Military turbotax Reporting Gains and Losses Introduction This chapter explains the tax treatment of casualties, thefts, and condemnations. Military turbotax A casualty occurs when property is damaged, destroyed, or lost due to a sudden, unexpected, or unusual event. Military turbotax A theft occurs when property is stolen. Military turbotax A condemnation occurs when private property is legally taken for public use without the owner's consent. Military turbotax A casualty, theft, or condemnation may result in a deductible loss or taxable gain on your federal income tax return. Military turbotax You may have a deductible loss or a taxable gain even if only a portion of your property was affected by a casualty, theft, or condemnation. Military turbotax An involuntary conversion occurs when you receive money or other property as reimbursement for a casualty, theft, condemnation, disposition of property under threat of condemnation, or certain other events discussed in this chapter. Military turbotax If an involuntary conversion results in a gain and you buy qualified replacement property within the specified replacement period, you can postpone reporting the gain on your income tax return. Military turbotax For more information, see Postponing Gain , later. Military turbotax Topics - This chapter discusses: Casualties and thefts How to figure a loss or gain Other involuntary conversions Postponing gain Disaster area losses Reporting gains and losses Drought involving property connected with a trade or business or a transaction entered into for profit Useful Items - You may want to see: Publication 523 Selling Your Home 525 Taxable and Nontaxable Income 536 Net Operating Losses (NOLs) for Individuals, Estates, and Trusts 544 Sales and Other Dispositions of Assets 547 Casualties, Disasters, and Thefts 584 Casualty, Disaster, and Theft Loss Workbook (Personal-Use Property) 584-B Business Casualty, Disaster, and Theft Loss Workbook Form (and Instructions) Sch A (Form 1040) Itemized Deductions Sch D (Form 1040) Capital Gains and Losses Sch F (Form 1040) Profit or Loss From Farming 4684 Casualties and Thefts 4797 Sales of Business Property See chapter 16 for information about getting publications and forms. Military turbotax Casualties and Thefts If your property is destroyed, damaged, or stolen, you may have a deductible loss. Military turbotax If the insurance or other reimbursement is more than the adjusted basis of the destroyed, damaged, or stolen property, you may have a taxable gain. Military turbotax Casualty. Military turbotax   A casualty is the damage, destruction, or loss of property resulting from an identifiable event that is sudden, unexpected, or unusual. Military turbotax A sudden event is one that is swift, not gradual or progressive. Military turbotax An unexpected event is one that is ordinarily unanticipated and unintended. Military turbotax An unusual event is one that is not a day-to-day occurrence and that is not typical of the activity in which you were engaged. Military turbotax Deductible losses. Military turbotax   Deductible casualty losses can result from a number of different causes, including the following. Military turbotax Airplane crashes. Military turbotax Car, truck, or farm equipment accidents not resulting from your willful act or willful negligence. Military turbotax Earthquakes. Military turbotax Fires (but see Nondeductible losses next for exceptions). Military turbotax Floods. Military turbotax Freezing. Military turbotax Government-ordered demolition or relocation of a home that is unsafe to use because of a disaster as discussed under Disaster Area Losses, in Publication 547. Military turbotax Lightning. Military turbotax Storms, including hurricanes and tornadoes. Military turbotax Terrorist attacks. Military turbotax Vandalism. Military turbotax Volcanic eruptions. Military turbotax Nondeductible losses. Military turbotax   A casualty loss is not deductible if the damage or destruction is caused by the following. Military turbotax Accidentally breaking articles such as glassware or china under normal conditions. Military turbotax A family pet (explained below). Military turbotax A fire if you willfully set it, or pay someone else to set it. Military turbotax A car, truck, or farm equipment accident if your willful negligence or willful act caused it. Military turbotax The same is true if the willful act or willful negligence of someone acting for you caused the accident. Military turbotax Progressive deterioration (explained below). Military turbotax Family pet. Military turbotax   Loss of property due to damage by a family pet is not deductible as a casualty loss unless the requirements discussed above under Casualty are met. Military turbotax Example. Military turbotax You keep your horse in your yard. Military turbotax The ornamental fruit trees in your yard were damaged when your horse stripped the bark from them. Military turbotax Some of the trees were completely girdled and died. Military turbotax Because the damage was not unexpected or unusual, the loss is not deductible. Military turbotax Progressive deterioration. Military turbotax   Loss of property due to progressive deterioration is not deductible as a casualty loss. Military turbotax This is because the damage results from a steadily operating cause or a normal process, rather than from a sudden event. Military turbotax Examples of damage due to progressive deterioration include damage from rust, corrosion, or termites. Military turbotax However, weather-related conditions or disease may cause another type of involuntary conversion. Military turbotax See Other Involuntary Conversions , later. Military turbotax Theft. Military turbotax   A theft is the taking and removing of money or property with the intent to deprive the owner of it. Military turbotax The taking of property must be illegal under the law of the state where it occurred and it must have been done with criminal intent. Military turbotax You do not need to show a conviction for theft. Military turbotax   Theft includes the taking of money or property by the following means: Blackmail, Burglary, Embezzlement, Extortion, Kidnapping for ransom, Larceny, Robbery, or Threats. Military turbotax The taking of money or property through fraud or misrepresentation is theft if it is illegal under state or local law. Military turbotax Decline in market value of stock. Military turbotax   You cannot deduct as a theft loss the decline in market value of stock acquired on the open market for investment if the decline is caused by disclosure of accounting fraud or other illegal misconduct by the officers or directors of the corporation that issued the stock. Military turbotax However, you can deduct as a capital loss the loss you sustain when you sell or exchange the stock or the stock becomes completely worthless. Military turbotax You report a capital loss on Schedule D (Form 1040). Military turbotax For more information about stock sales, worthless stock, and capital losses, see chapter 4 of Publication 550. Military turbotax Mislaid or lost property. Military turbotax   The simple disappearance of money or property is not a theft. Military turbotax However, an accidental loss or disappearance of property can qualify as a casualty if it results from an identifiable event that is sudden, unexpected, or unusual. Military turbotax Example. Military turbotax A car door is accidentally slammed on your hand, breaking the setting of your diamond ring. Military turbotax The diamond falls from the ring and is never found. Military turbotax The loss of the diamond is a casualty. Military turbotax Farming Losses You can deduct certain casualty or theft losses that occur in the business of farming. Military turbotax The following is a discussion of some losses you can deduct and some you cannot deduct. Military turbotax Livestock or produce bought for resale. Military turbotax   Casualty or theft losses of livestock or produce bought for resale are deductible if you report your income on the cash method. Military turbotax If you report your income on an accrual method, take casualty and theft losses on property bought for resale by omitting the item from the closing inventory for the year of the loss. Military turbotax You cannot take a separate deduction. Military turbotax Livestock, plants, produce, and crops raised for sale. Military turbotax   Losses of livestock, plants, produce, and crops raised for sale are generally not deductible if you report your income on the cash method. Military turbotax You have already deducted the cost of raising these items as farm expenses, so their basis is equal to zero. Military turbotax   For plants with a preproductive period of more than 2 years, you may have a deductible loss if you have a tax basis in the plants. Military turbotax You usually have a tax basis if you capitalized the expenses associated with these plants under the uniform capitalization rules. Military turbotax The uniform capitalization rules are discussed in chapter 6. Military turbotax   If you report your income on an accrual method, casualty or theft losses are deductible only if you included the items in your inventory at the beginning of your tax year. Military turbotax You get the deduction by omitting the item from your inventory at the close of your tax year. Military turbotax You cannot take a separate casualty or theft deduction. Military turbotax Income loss. Military turbotax   A loss of future income is not deductible. Military turbotax Example. Military turbotax A severe flood destroyed your crops. Military turbotax Because you are a cash method taxpayer and already deducted the cost of raising the crops as farm expenses, this loss is not deductible, as explained above under Livestock, plants, produce, and crops raised for sale . Military turbotax You estimate that the crop loss will reduce your farm income by $25,000. Military turbotax This loss of future income is also not deductible. Military turbotax Loss of timber. Military turbotax   If you sell timber downed as a result of a casualty, treat the proceeds from the sale as a reimbursement. Military turbotax If you use the proceeds to buy qualified replacement property, you can postpone reporting the gain. Military turbotax See Postponing Gain , later. Military turbotax Property used in farming. Military turbotax   Casualty and theft losses of property used in your farm business usually result in deductible losses. Military turbotax If a fire or storm destroyed your barn, or you lose by casualty or theft an animal you bought for draft, breeding, dairy, or sport, you may have a deductible loss. Military turbotax See How To Figure a Loss , later. Military turbotax Raised draft, breeding, dairy, or sporting animals. Military turbotax   Generally, losses of raised draft, breeding, dairy, or sporting animals do not result in deductible casualty or theft losses because you have no basis in the animals. Military turbotax However, you may have a basis in the animal and therefore may be able to claim a deduction if either of the following situations applies to you. Military turbotax You use inventories to determine your income and you included the animals in your inventory. Military turbotax You capitalized the expenses associated with the animals under the uniform capitalization rules and therefore have a tax basis in the animals subject to a casualty or theft. Military turbotax When you include livestock in inventory, its last inventory value is its basis. Military turbotax When you lose an inventoried animal held for draft, breeding, dairy, or sport by casualty or theft during the year, decrease ending inventory by the amount you included in inventory for the animal. Military turbotax You cannot take a separate deduction. Military turbotax How To Figure a Loss How you figure a deductible casualty or theft loss depends on whether the loss was to farm or personal-use property and whether the property was stolen or partly or completely destroyed. Military turbotax Farm property. Military turbotax   Farm property is the property you use in your farming business. Military turbotax If your farm property was completely destroyed or stolen, your loss is figured as follows:      Your adjusted basis in the property     MINUS     Any salvage value     MINUS     Any insurance or other reimbursement you  receive or expect to receive      You can use the schedules in Publication 584-B to list your stolen, damaged, or destroyed business property and to figure your loss. Military turbotax   If your farm property was partially damaged, use the steps shown under Personal-use property next to figure your casualty loss. Military turbotax However, the deduction limits, discussed later, do not apply to farm property. Military turbotax Personal-use property. Military turbotax   Personal-use property is property used by you or your family members for personal purposes and not used in your farm business or for income-producing purposes. Military turbotax The following items are examples of personal-use property: Your main home. Military turbotax Furniture and electronics used in your main home and not used in a home office or for business purposes. Military turbotax Clothing and jewelry. Military turbotax An automobile used for nonbusiness purposes. Military turbotax You figure the casualty or theft loss on this property by taking the following steps. Military turbotax Determine your adjusted basis in the property before the casualty or theft. Military turbotax Determine the decrease in fair market value of the property as a result of the casualty or theft. Military turbotax From the smaller of the amounts you determined in (1) and (2), subtract any insurance or other reimbursement you receive or expect to receive. Military turbotax You must apply the deduction limits, discussed later, to determine your deductible loss. Military turbotax    You can use Publication 584 to list your stolen or damaged personal-use property and figure your loss. Military turbotax It includes schedules to help you figure the loss on your home, its contents, and your motor vehicles. Military turbotax Adjusted basis. Military turbotax   Adjusted basis is your basis (usually cost) increased or decreased by various events, such as improvements and casualty losses. Military turbotax For more information about adjusted basis, see chapter 6. Military turbotax Decrease in fair market value (FMV). Military turbotax   The decrease in FMV is the difference between the property's value immediately before the casualty or theft and its value immediately afterward. Military turbotax FMV is defined in chapter 10 under Payments Received or Considered Received . Military turbotax Appraisal. Military turbotax   To figure the decrease in FMV because of a casualty or theft, you generally need a competent appraisal. Military turbotax But other measures, such as the cost of cleaning up or making repairs (discussed next) can be used to establish decreases in FMV. Military turbotax   An appraisal to determine the difference between the FMV of the property immediately before a casualty or theft and immediately afterward should be made by a competent appraiser. Military turbotax The appraiser must recognize the effects of any general market decline that may occur along with the casualty. Military turbotax This information is needed to limit any deduction to the actual loss resulting from damage to the property. Military turbotax Cost of cleaning up or making repairs. Military turbotax   The cost of cleaning up after a casualty is not part of a casualty loss. Military turbotax Neither is the cost of repairing damaged property after a casualty. Military turbotax But you can use the cost of cleaning up or making repairs after a casualty as a measure of the decrease in FMV if you meet all the following conditions. Military turbotax The repairs are actually made. Military turbotax The repairs are necessary to bring the property back to its condition before the casualty. Military turbotax The amount spent for repairs is not excessive. Military turbotax The repairs fix the damage only. Military turbotax The value of the property after the repairs is not, due to the repairs, more than the value of the property before the casualty. Military turbotax Related expenses. Military turbotax   The incidental expenses due to a casualty or theft, such as expenses for the treatment of personal injuries, temporary housing, or a rental car, are not part of your casualty or theft loss. Military turbotax However, they may be deductible as farm business expenses if the damaged or stolen property is farm property. Military turbotax Separate computations for more than one item of property. Military turbotax   Generally, if a single casualty or theft involves more than one item of property, you must figure your loss separately for each item of property. Military turbotax Then combine the losses to determine your total loss. Military turbotax    There is an exception to this rule for personal-use real property. Military turbotax See Exception for personal-use real property, later. Military turbotax Example. Military turbotax A fire on your farm damaged a tractor and the barn in which it was stored. Military turbotax The tractor had an adjusted basis of $3,300. Military turbotax Its FMV was $28,000 just before the fire and $10,000 immediately afterward. Military turbotax The barn had an adjusted basis of $28,000. Military turbotax Its FMV was $55,000 just before the fire and $25,000 immediately afterward. Military turbotax You received insurance reimbursements of $2,100 on the tractor and $26,000 on the barn. Military turbotax Figure your deductible casualty loss separately for the two items of property. Military turbotax     Tractor Barn 1) Adjusted basis $3,300 $28,000 2) FMV before fire $28,000 $55,000 3) FMV after fire 10,000 25,000 4) Decrease in FMV  (line 2 − line 3) $18,000 $30,000 5) Loss (lesser of line 1 or line 4) $3,300 $28,000 6) Minus: Insurance 2,100 26,000 7) Deductible casualty loss $1,200 $2,000 8) Total deductible casualty loss $3,200 Exception for personal-use real property. Military turbotax   In figuring a casualty loss on personal-use real property, the entire property (including any improvements, such as buildings, trees, and shrubs) is treated as one item. Military turbotax Figure the loss using the smaller of the following. Military turbotax The decrease in FMV of the entire property. Military turbotax The adjusted basis of the entire property. Military turbotax Example. Military turbotax You bought a farm in 1990 for $160,000. Military turbotax The adjusted basis of the residential part is now $128,000. Military turbotax In 2013, a windstorm blew down shade trees and three ornamental trees planted at a cost of $7,500 on the residential part. Military turbotax The adjusted basis of the residential part includes the $7,500. Military turbotax The fair market value (FMV) of the residential part immediately before the storm was $400,000, and $385,000 immediately after the storm. Military turbotax The trees were not covered by insurance. Military turbotax 1) Adjusted basis $128,000 2) FMV before the storm $400,000 3) FMV after the storm 385,000 4) Decrease in FMV (line 2 − line 3) $15,000 5) Loss before insurance (lesser of line 1 or line 4) $15,000 6) Minus: Insurance -0- 7) Amount of loss $15,000 Insurance and other reimbursements. Military turbotax   If you receive an insurance or other type of reimbursement, you must subtract the reimbursement when you figure your loss. Military turbotax You do not have a casualty or theft loss to the extent you are reimbursed. Military turbotax   If you expect to be reimbursed for part or all of your loss, you must subtract the expected reimbursement when you figure your loss. Military turbotax You must reduce your loss even if you do not receive payment until a later tax year. Military turbotax    Do not subtract from your loss any insurance payments you receive for living expenses if you lose the use of your main home or are denied access to it because of a casualty. Military turbotax You may have to include a portion of these payments in your income. Military turbotax See Insurance payments for living expenses in Publication 547 for details. Military turbotax Disaster relief. Military turbotax   Food, medical supplies, and other forms of assistance you receive do not reduce your casualty loss, unless they are replacements for lost or destroyed property. Military turbotax Excludable cash gifts you receive also do not reduce your casualty loss if there are no limits on how you can use the money. Military turbotax   Generally, disaster relief grants received under the Robert T. Military turbotax Stafford Disaster Relief and Emergency Assistance Act are not included in your income. Military turbotax See Federal disaster relief grants , later, under Disaster Area Losses . Military turbotax   Qualified disaster relief payments for expenses you incurred as a result of a federally declared disaster are not taxable income to you. Military turbotax See Qualified disaster relief payments , later, under Disaster Area Losses . Military turbotax Reimbursement received after deducting loss. Military turbotax   If you figure your casualty or theft loss using your expected reimbursement, you may have to adjust your tax return for the tax year in which you get your actual reimbursement. Military turbotax Actual reimbursement less than expected. Military turbotax   If you later receive less reimbursement than you expected, include that difference as a loss with your other losses (if any) on your return for the year in which you can reasonably expect no more reimbursement. Military turbotax Actual reimbursement more than expected. Military turbotax   If you later receive more reimbursement than you expected after you have claimed a deduction for the loss, you may have to include the extra reimbursement in your income for the year you receive it. Military turbotax However, if any part of your original deduction did not reduce your tax for the earlier year, do not include that part of the reimbursement in your income. Military turbotax Do not refigure your tax for the year you claimed the deduction. Military turbotax See Recoveries in Publication 525 to find out how much extra reimbursement to include in income. Military turbotax If the total of all the reimbursements you receive is more than your adjusted basis in the destroyed or stolen property, you will have a gain on the casualty or theft. Military turbotax See Figuring a Gain in Publication 547 for information on how to treat a gain from the reimbursement you receive because of a casualty or theft. Military turbotax Actual reimbursement same as expected. Military turbotax   If you receive exactly the reimbursement you expected to receive, you do not have to include any of the reimbursement in your income and you cannot deduct any additional loss. Military turbotax Lump-sum reimbursement. Military turbotax   If you have a casualty or theft loss of several assets at the same time without an allocation of reimbursement to specific assets, divide the lump-sum reimbursement among the assets according to the fair market value of each asset at the time of the loss. Military turbotax Figure the gain or loss separately for each asset that has a separate basis. Military turbotax Adjustments to basis. Military turbotax   If you have a casualty or theft loss, you must decrease your basis in the property by any insurance or other reimbursement you receive and by any deductible loss. Military turbotax The result is your adjusted basis in the property. Military turbotax Amounts you spend on repairs to restore your property to its pre-casualty condition increase your adjusted basis. Military turbotax See Adjusted Basis in chapter 6 for more information. Military turbotax Example. Military turbotax You built a new silo for $25,000. Military turbotax This is the basis in your silo because that is the total cost you incurred to build it. Military turbotax During the year, a tornado damaged your silo and your allowable casualty loss deduction was $1,000. Military turbotax In addition, your insurance company reimbursed you $4,000 for the damage and you spent $6,000 to restore the silo to its pre-casualty condition. Military turbotax Your adjusted basis in the silo after the casualty is $26,000 ($25,000 - $1,000 - $4,000 + $6,000). Military turbotax Deduction Limits on Losses of Personal-Use Property Casualty and theft losses of property held for personal use may be deductible if you itemize deductions on Schedule A (Form 1040). Military turbotax There are two limits on the deduction for casualty or theft loss of personal-use property. Military turbotax You figure these limits on Form 4684. Military turbotax $100 rule. Military turbotax   You must reduce each casualty or theft loss on personal-use property by $100. Military turbotax This rule applies after you have subtracted any reimbursement. Military turbotax 10% rule. Military turbotax   You must further reduce the total of all your casualty or theft losses on personal-use property by 10% of your adjusted gross income. Military turbotax Apply this rule after you reduce each loss by $100. Military turbotax Adjusted gross income is on line 38 of Form 1040. Military turbotax Example. Military turbotax In June, you discovered that your house had been burglarized. Military turbotax Your loss after insurance reimbursement was $2,000. Military turbotax Your adjusted gross income for the year you discovered the burglary is $57,000. Military turbotax Figure your theft loss deduction as follows: 1. Military turbotax Loss after insurance $2,000 2. Military turbotax Subtract $100 100 3. Military turbotax Loss after $100 rule $1,900 4. Military turbotax Subtract 10% (. Military turbotax 10) × $57,000 AGI $5,700 5. Military turbotax Theft loss deduction -0- You do not have a theft loss deduction because your loss ($1,900) is less than 10% of your adjusted gross income ($5,700). Military turbotax    If you have a casualty or theft gain in addition to a loss, you will have to make a special computation before you figure your 10% limit. Military turbotax See 10% Rule in Publication 547. Military turbotax When Loss Is Deductible Generally, you can deduct casualty losses that are not reimbursable only in the tax year in which they occur. Military turbotax You generally can deduct theft losses that are not reimbursable only in the year you discover your property was stolen. Military turbotax However, losses in federally declared disaster areas are subject to different rules. Military turbotax See Disaster Area Losses , later, for an exception. Military turbotax If you are not sure whether part of your casualty or theft loss will be reimbursed, do not deduct that part until the tax year when you become reasonably certain that it will not be reimbursed. Military turbotax Leased property. Military turbotax   If you lease property from someone else, you can deduct a loss on the property in the year your liability for the loss is fixed. Military turbotax This is true even if the loss occurred or the liability was paid in a different year. Military turbotax You are not entitled to a deduction until your liability under the lease can be determined with reasonable accuracy. Military turbotax Your liability can be determined when a claim for recovery is settled, adjudicated, or abandoned. Military turbotax Example. Military turbotax Robert leased a tractor from First Implement, Inc. Military turbotax , for use in his farm business. Military turbotax The tractor was destroyed by a tornado in June 2012. Military turbotax The loss was not insured. Military turbotax First Implement billed Robert for the fair market value of the tractor on the date of the loss. Military turbotax Robert disagreed with the bill and refused to pay it. Military turbotax First Implement later filed suit in court against Robert. Military turbotax In 2013, Robert and First Implement agreed to settle the suit for $20,000, and the court entered a judgment in favor of First Implement. Military turbotax Robert paid $20,000 in June 2013. Military turbotax He can claim the $20,000 as a loss on his 2013 tax return. Military turbotax Net operating loss (NOL). Military turbotax   If your deductions, including casualty or theft loss deductions, are more than your income for the year, you may have an NOL. Military turbotax An NOL can be carried back or carried forward and deducted from income in other years. Military turbotax See Publication 536 for more information on NOLs. Military turbotax Proof of Loss To deduct a casualty or theft loss, you must be able to prove that there was a casualty or theft. Military turbotax You must have records to support the amount you claim for the loss. Military turbotax Casualty loss proof. Military turbotax   For a casualty loss, your records should show all the following information. Military turbotax The type of casualty (car accident, fire, storm, etc. Military turbotax ) and when it occurred. Military turbotax That the loss was a direct result of the casualty. Military turbotax That you were the owner of the property or, if you leased the property from someone else, that you were contractually liable to the owner for the damage. Military turbotax Whether a claim for reimbursement exists for which there is a reasonable expectation of recovery. Military turbotax Theft loss proof. Military turbotax   For a theft loss, your records should show all the following information. Military turbotax When you discovered your property was missing. Military turbotax That your property was stolen. Military turbotax That you were the owner of the property. Military turbotax Whether a claim for reimbursement exists for which there is a reasonable expectation of recovery. Military turbotax Figuring a Gain A casualty or theft may result in a taxable gain. Military turbotax If you receive an insurance payment or other reimbursement that is more than your adjusted basis in the destroyed, damaged, or stolen property, you have a gain from the casualty or theft. Military turbotax You generally report your gain as income in the year you receive the reimbursement. Military turbotax However, depending on the type of property you receive, you may not have to report your gain. Military turbotax See Postponing Gain , later. Military turbotax Your gain is figured as follows: The amount you receive, minus Your adjusted basis in the property at the time of the casualty or theft. Military turbotax Even if the decrease in FMV of your property is smaller than the adjusted basis of your property, use your adjusted basis to figure the gain. Military turbotax Amount you receive. Military turbotax   The amount you receive includes any money plus the value of any property you receive, minus any expenses you have in obtaining reimbursement. Military turbotax It also includes any reimbursement used to pay off a mortgage or other lien on the damaged, destroyed, or stolen property. Military turbotax Example. Military turbotax A tornado severely damaged your barn. Military turbotax The adjusted basis of the barn was $25,000. Military turbotax Your insurance company reimbursed you $40,000 for the damaged barn. Military turbotax However, you had legal expenses of $2,000 to collect that insurance. Military turbotax Your insurance minus your expenses to collect the insurance is more than your adjusted basis in the barn, so you have a gain. Military turbotax 1) Insurance reimbursement $40,000 2) Legal expenses 2,000 3) Amount received  (line 1 − line 2) $38,000 4) Adjusted basis 25,000 5) Gain on casualty (line 3 − line 4) $13,000 Other Involuntary Conversions In addition to casualties and thefts, other events cause involuntary conversions of property. Military turbotax Some of these are discussed in the following paragraphs. Military turbotax Gain or loss from an involuntary conversion of your property is usually recognized for tax purposes. Military turbotax You report the gain or deduct the loss on your tax return for the year you realize it. Military turbotax However, depending on the type of property you receive, you may not have to report your gain on the involuntary conversion. Military turbotax See Postponing Gain , later. Military turbotax Condemnation Condemnation is the process by which private property is legally taken for public use without the owner's consent. Military turbotax The property may be taken by the federal government, a state government, a political subdivision, or a private organization that has the power to legally take property. Military turbotax The owner receives a condemnation award (money or property) in exchange for the property taken. Military turbotax A condemnation is a forced sale, the owner being the seller and the condemning authority being the buyer. Military turbotax Threat of condemnation. Military turbotax   Treat the sale of your property under threat of condemnation as a condemnation, provided you have reasonable grounds to believe that your property will be condemned. Military turbotax Main home condemned. Military turbotax   If you have a gain because your main home is condemned, you generally can exclude the gain from your income as if you had sold or exchanged your home. Military turbotax For information on this exclusion, see Publication 523. Military turbotax If your gain is more than the amount you can exclude, but you buy replacement property, you may be able to postpone reporting the excess gain. Military turbotax See Postponing Gain , later. Military turbotax (You cannot deduct a loss from the condemnation of your main home. Military turbotax ) More information. Military turbotax   For information on how to figure the gain or loss on condemned property, see chapter 1 in Publication 544. Military turbotax Also see Postponing Gain , later, to find out if you can postpone reporting the gain. Military turbotax Irrigation Project The sale or other disposition of property located within an irrigation project to conform to the acreage limits of federal reclamation laws is an involuntary conversion. Military turbotax Livestock Losses Diseased livestock. Military turbotax   If your livestock die from disease, or are destroyed, sold, or exchanged because of disease, even though the disease is not of epidemic proportions, treat these occurrences as involuntary conversions. Military turbotax If the livestock were raised or purchased for resale, follow the rules for livestock discussed earlier under Farming Losses . Military turbotax Otherwise, figure the gain or loss from these conversions using the rules discussed under Determining Gain or Loss in chapter 8. Military turbotax If you replace the livestock, you may be able to postpone reporting the gain. Military turbotax See Postponing Gain below. Military turbotax Reporting dispositions of diseased livestock. Military turbotax   If you choose to postpone reporting gain on the disposition of diseased livestock, you must attach a statement to your return explaining that the livestock were disposed of because of disease. Military turbotax You must also include other information on this statement. Military turbotax See How To Postpone Gain , later, under Postponing Gain . Military turbotax Weather-related sales of livestock. Military turbotax   If you sell or exchange livestock (other than poultry) held for draft, breeding, or dairy purposes solely because of drought, flood, or other weather-related conditions, treat the sale or exchange as an involuntary conversion. Military turbotax Only livestock sold in excess of the number you normally would sell under usual business practice, in the absence of weather-related conditions, are considered involuntary conversions. Military turbotax Figure the gain or loss using the rules discussed under Determining Gain or Loss in chapter 8. Military turbotax If you replace the livestock, you may be able to postpone reporting the gain. Military turbotax See Postponing Gain below. Military turbotax Example. Military turbotax It is your usual business practice to sell five of your dairy animals during the year. Military turbotax This year you sold 20 dairy animals because of drought. Military turbotax The sale of 15 animals is treated as an involuntary conversion. Military turbotax    If you do not replace the livestock, you may be able to report the gain in the following year's income. Military turbotax This rule also applies to other livestock (including poultry). Military turbotax See Sales Caused by Weather-Related Conditions in chapter 3. Military turbotax Tree Seedlings If, because of an abnormal drought, the failure of planted tree seedlings is greater than normally anticipated, you may have a deductible loss. Military turbotax Treat the loss as a loss from an involuntary conversion. Military turbotax The loss equals the previously capitalized reforestation costs you had to duplicate on replanting. Military turbotax You deduct the loss on the return for the year the seedlings died. Military turbotax Postponing Gain Do not report a gain if you receive reimbursement in the form of property similar or related in service or use to the destroyed, stolen, or other involuntarily converted property. Military turbotax Your basis in the new property is generally the same as your adjusted basis in the property it replaces. Military turbotax You must ordinarily report the gain on your stolen, destroyed, or other involuntarily converted property if you receive money or unlike property as reimbursement. Military turbotax However, you can choose to postpone reporting the gain if you purchase replacement property similar or related in service or use to your destroyed, stolen, or other involuntarily converted property within a specific replacement period. Military turbotax If you have a gain on damaged property, you can postpone reporting the gain if you spend the reimbursement to restore the property. Military turbotax To postpone reporting all the gain, the cost of your replacement property must be at least as much as the reimbursement you receive. Military turbotax If the cost of the replacement property is less than the reimbursement, you must include the gain in your income up to the amount of the unspent reimbursement. Military turbotax Example 1. Military turbotax In 1985, you constructed a barn to store farm equipment at a cost of $20,000. Military turbotax In 1987, you added a silo to the barn at a cost of $15,000 to store grain. Military turbotax In May of this year, the property was worth $100,000. Military turbotax In June the barn and silo were destroyed by a tornado. Military turbotax At the time of the tornado, you had an adjusted basis of $0 in the property. Military turbotax You received $85,000 from the insurance company. Military turbotax You had a gain of $85,000 ($85,000 – $0). Military turbotax You spent $80,000 to rebuild the barn and silo. Military turbotax Since this is less than the insurance proceeds received, you must include $5,000 ($85,000 – $80,000) in your income. Military turbotax Example 2. Military turbotax In 1970, you bought a cabin in the mountains for your personal use at a cost of $18,000. Military turbotax You made no further improvements or additions to it. Military turbotax When a storm destroyed the cabin this January, the cabin was worth $250,000. Military turbotax You received $146,000 from the insurance company in March. Military turbotax You had a gain of $128,000 ($146,000 − $18,000). Military turbotax You spent $144,000 to rebuild the cabin. Military turbotax Since this is less than the insurance proceeds received, you must include $2,000 ($146,000 − $144,000) in your income. Military turbotax Buying replacement property from a related person. Military turbotax   You cannot postpone reporting a gain from a casualty, theft, or other involuntary conversion if you buy the replacement property from a related person (discussed later). Military turbotax This rule applies to the following taxpayers. Military turbotax C corporations. Military turbotax Partnerships in which more than 50% of the capital or profits interest is owned by C corporations. Military turbotax Individuals, partnerships (other than those in (2) above), and S corporations if the total realized gain for the tax year on all involuntarily converted properties on which there are realized gains is more than $100,000. Military turbotax For involuntary conversions described in (3) above, gains cannot be offset by any losses when determining whether the total gain is more than $100,000. Military turbotax If the property is owned by a partnership, the $100,000 limit applies to the partnership and each partner. Military turbotax If the property is owned by an S corporation, the $100,000 limit applies to the S corporation and each shareholder. Military turbotax Exception. Military turbotax   This rule does not apply if the related person acquired the property from an unrelated person within the period of time allowed for replacing the involuntarily converted property. Military turbotax Related persons. Military turbotax   Under this rule, related persons include, for example, a parent and child, a brother and sister, a corporation and an individual who owns more than 50% of its outstanding stock, and two partnerships in which the same C corporations own more than 50% of the capital or profits interests. Military turbotax For more information on related persons, see Nondeductible Loss under Sales and Exchanges Between Related Persons in chapter 2 of Publication 544. Military turbotax Death of a taxpayer. Military turbotax   If a taxpayer dies after having a gain, but before buying replacement property, the gain must be reported for the year in which the decedent realized the gain. Military turbotax The executor of the estate or the person succeeding to the funds from the involuntary conversion cannot postpone reporting the gain by buying replacement property. Military turbotax Replacement Property You must buy replacement property for the specific purpose of replacing your property. Military turbotax Your replacement property must be similar or related in service or use to the property it replaces. Military turbotax You do not have to use the same funds you receive as reimbursement for your old property to acquire the replacement property. Military turbotax If you spend the money you receive for other purposes, and borrow money to buy replacement property, you can still choose to postpone reporting the gain if you meet the other requirements. Military turbotax Property you acquire by gift or inheritance does not qualify as replacement property. Military turbotax Owner-user. Military turbotax   If you are an owner-user, similar or related in service or use means that replacement property must function in the same way as the property it replaces. Military turbotax Examples of property that functions in the same way as the property it replaces are a home that replaces another home, a dairy cow that replaces another dairy cow, and farm land that replaces other farm land. Military turbotax A grinding mill that replaces a tractor does not qualify. Military turbotax Neither does a breeding or draft animal that replaces a dairy cow. Military turbotax Soil or other environmental contamination. Military turbotax   If, because of soil or other environmental contamination, it is not feasible for you to reinvest your insurance money or other proceeds from destroyed or damaged livestock in property similar or related in service or use to the livestock, you can treat other property (including real property) used for farming purposes, as property similar or related in service or use to the destroyed or damaged livestock. Military turbotax Weather-related conditions. Military turbotax   If, because of drought, flood, or other weather-related conditions, it is not feasible for you to reinvest the insurance money or other proceeds in property similar or related in service or use to the livestock, you can treat other property (excluding real property) used for farming purposes, as property similar or related in service or use to the livestock you disposed of. Military turbotax Example. Military turbotax Each year you normally sell 25 cows from your beef herd. Military turbotax However, this year you had to sell 50 cows. Military turbotax This is because a severe drought significantly reduced the amount of hay and pasture yield needed to feed your herd for the rest of the year. Military turbotax Because, as a result of the severe drought, it is not feasible for you to use the proceeds from selling the extra cows to buy new cows, you can treat other property (excluding real property) used for farming purposes, as property similar or related in service or use to the cows you sold. Military turbotax Standing crop destroyed by casualty. Military turbotax   If a storm or other casualty destroyed your standing crop and you use the insurance money to acquire either another standing crop or a harvested crop, this purchase qualifies as replacement property. Military turbotax The costs of planting and raising a new crop qualify as replacement costs for the destroyed crop only if you use the crop method of accounting (discussed in chapter 2). Military turbotax In that case, the costs of bringing the new crop to the same level of maturity as the destroyed crop qualify as replacement costs to the extent they are incurred during the replacement period. Military turbotax Timber loss. Military turbotax   Standing timber you bought with the proceeds from the sale of timber downed as a result of a casualty, such as high winds, earthquakes, or volcanic eruptions, qualifies as replacement property. Military turbotax If you bought the standing timber within the replacement period, you can postpone reporting the gain. Military turbotax Business or income-producing property located in a federally declared disaster area. Military turbotax   If your destroyed business or income-producing property was located in a federally declared disaster area, any tangible replacement property you acquire for use in any business is treated as similar or related in service or use to the destroyed property. Military turbotax For more information, see Disaster Area Losses in Publication 547. Military turbotax Substituting replacement property. Military turbotax   Once you have acquired qualified replacement property that you designate as replacement property in a statement attached to your tax return, you cannot substitute other qualified replacement property. Military turbotax This is true even if you acquire the other property within the replacement period. Military turbotax However, if you discover that the original replacement property was not qualified replacement property, you can, within the replacement period, substitute the new qualified replacement property. Military turbotax Basis of replacement property. Military turbotax   You must reduce the basis of your replacement property (its cost) by the amount of postponed gain. Military turbotax In this way, tax on the gain is postponed until you dispose of the replacement property. Military turbotax Replacement Period To postpone reporting your gain, you must buy replacement property within a specified period of time. Military turbotax This is the replacement period. Military turbotax The replacement period begins on the date your property was damaged, destroyed, stolen, sold, or exchanged. Military turbotax The replacement period generally ends 2 years after the close of the first tax year in which you realize any part of your gain from the involuntary conversion. Military turbotax Example. Military turbotax You are a calendar year taxpayer. Military turbotax While you were on vacation, farm equipment that cost $2,200 was stolen from your farm. Military turbotax You discovered the theft when you returned to your farm on November 11, 2012. Military turbotax Your insurance company investigated the theft and did not settle your claim until January 5, 2013, when they paid you $3,000. Military turbotax You first realized a gain from the reimbursement for the theft during 2013, so you have until December 31, 2015, to replace the property. Military turbotax Main home in disaster area. Military turbotax   For your main home (or its contents) located in a federally declared disaster area, the replacement period ends 4 years after the close of the first tax year in which you realize any part of your gain from the involuntary conversion. Military turbotax See Disaster Area Losses , later. Military turbotax Property in the Midwestern disaster areas. Military turbotax   For property located in the Midwestern disaster areas (defined in Table 4 in the 2008 Publication 547) that was destroyed, damaged, stolen, or condemned, the replacement period ends 5 years after the close of the first tax year in which any part of your gain is realized. Military turbotax This 5-year replacement period applies only if substantially all of the use of the replacement property is in the Midwestern disaster areas. Military turbotax Property in the Kansas disaster area. Military turbotax   For property located in the Kansas disaster area that was destroyed, damaged, stolen, or condemned after May 3, 2007, as a result of the Kansas storms and tornadoes, the replacement period ends 5 years after the close of the first tax year in which any part of your gain is realized. Military turbotax This 5-year replacement period applies only if substantially all of the use of the replacement property is in the Kansas disaster area. Military turbotax Property in the Hurricane Katrina disaster area. Military turbotax   For property located in the Hurricane Katrina disaster area that was destroyed, damaged, stolen, or condemned after August 24, 2005, as a result of Hurricane Katrina, the replacement period ends 5 years after the close of the first tax year in which any part of your gain is realized. Military turbotax This 5-year replacement period applies only if substantially all of the use of the replacement property is in the Hurricane Katrina disaster area. Military turbotax Weather-related sales of livestock in an area eligible for federal assistance. Military turbotax   For the sale or exchange of livestock due to drought, flood, or other weather-related conditions in an area eligible for federal assistance, the replacement period ends 4 years after the close of the first tax year in which you realize any part of your gain from the sale or exchange. Military turbotax The IRS may extend the replacement period on a regional basis if the weather-related conditions continue for longer than 3 years. Military turbotax   For information on extensions of the replacement period because of persistent drought, see Notice 2006-82, 2006-39 I. Military turbotax R. Military turbotax B. Military turbotax 529, available at  www. Military turbotax irs. Military turbotax gov/irb/2006-39_IRB/ar11. Military turbotax html. Military turbotax For a list of counties for which exceptional, extreme, or severe drought was reported during the 12 months ending August 31, 2013, see Notice 2013-62, available at IRS. Military turbotax gov. Military turbotax Condemnation. Military turbotax   The replacement period for a condemnation begins on the earlier of the following dates. Military turbotax The date on which you disposed of the condemned property. Military turbotax The date on which the threat of condemnation began. Military turbotax The replacement period generally ends 2 years after the close of the first tax year in which any part of the gain on the condemnation is realized. Military turbotax But see Main home in disaster area , Property in the Midwestern disaster areas , Property in the Kansas disaster area , and Property in the Hurricane Katrina disaster area , earlier, for exceptions. Military turbotax Business or investment real property. Military turbotax   If real property held for use in a trade or business or for investment (not including property held primarily for sale) is condemned, the replacement period ends 3 years after the close of the first tax year in which any part of the gain on the condemnation is realized. Military turbotax Extension. Military turbotax   You can apply for an extension of the replacement period. Military turbotax Send your written application to the Internal Revenue Service Center where you file your tax return. Military turbotax See your tax return instructions for the address. Military turbotax Include all the details about your need for an extension. Military turbotax Make your application before the end of the replacement period. Military turbotax However, you can file an application within a reasonable time after the replacement period ends if you can show a good reason for the delay. Military turbotax You will get an extension of the replacement period if you can show reasonable cause for not making the replacement within the regular period. Military turbotax How To Postpone Gain You postpone reporting your gain by reporting your choice on your tax return for the year you have the gain. Military turbotax You have the gain in the year you receive insurance proceeds or other reimbursements that result in a gain. Military turbotax Required statement. Military turbotax   You should attach a statement to your return for the year you have the gain. Military turbotax This statement should include all the following information. Military turbotax The date and details of the casualty, theft, or other involuntary conversion. Military turbotax The insurance or other reimbursement you received. Military turbotax How you figured the gain. Military turbotax Replacement property acquired before return filed. Military turbotax   If you acquire replacement property before you file your return for the year you have the gain, your statement should also include detailed information about all the following items. Military turbotax The replacement property. Military turbotax The postponed gain. Military turbotax The basis adjustment that reflects the postponed gain. Military turbotax Any gain you are reporting as income. Military turbotax Replacement property acquired after return filed. Military turbotax   If you intend to buy replacement property after you file your return for the year you realize gain, your statement should also say that you are choosing to replace the property within the required replacement period. Military turbotax   You should then attach another statement to your return for the year in which you buy the replacement property. Military turbotax This statement should contain detailed information on the replacement property. Military turbotax If you acquire part of your replacement property in one year and part in another year, you must attach a statement to each year's return. Military turbotax Include in the statement detailed information on the replacement property bought in that year. Military turbotax Reporting weather-related sales of livestock. Military turbotax   If you choose to postpone reporting the gain on weather-related sales or exchanges of livestock, show all the following information on a statement attached to your return for the tax year in which you first realize any of the gain. Military turbotax Evidence of the weather-related conditions that forced the sale or exchange of the livestock. Military turbotax The gain realized on the sale or exchange. Military turbotax The number and kind of livestock sold or exchanged. Military turbotax The number of livestock of each kind you would have sold or exchanged under your usual business practice. Military turbotax   Show all the following information and the preceding information on the return for the year in which you replace the livestock. Military turbotax The dates you bought the replacement property. Military turbotax The cost of the replacement property. Military turbotax Description of the replacement property (for example, the number and kind of the replacement livestock). Military turbotax Amended return. Military turbotax   You must file an amended return (Form 1040X) for the tax year of the gain in either of the following situations. Military turbotax You do not acquire replacement property within the replacement period, plus extensions. Military turbotax On this amended return, you must report the gain and pay any additional tax due. Military turbotax You acquire replacement property within the required replacement period, plus extensions, but at a cost less than the amount you receive from the casualty, theft, or other involuntary conversion. Military turbotax On this amended return, you must report the part of the gain that cannot be postponed and pay any additional tax due. Military turbotax Disaster Area Losses Special rules apply to federally declared disaster area losses. Military turbotax A federally declared disaster is a disaster that occurred in an area declared by the President to be eligible for federal assistance under the Robert T. Military turbotax Stafford Disaster Relief and Emergency Assistance Act. Military turbotax It includes a major disaster or emergency declaration under the act. Military turbotax A list of the areas warranting public or individual assistance (or both) under the Act is available at the Federal Emergency Management Agency (FEMA) web site at www. Military turbotax fema. Military turbotax gov. Military turbotax This part discusses the special rules for when to deduct a disaster area loss and what tax deadlines may be postponed. Military turbotax For other special rules, see Disaster Area Losses in Publication 547. Military turbotax When to deduct the loss. Military turbotax   You generally must deduct a casualty loss in the year it occurred. Military turbotax However, if you have a deductible loss from a disaster that occurred in an area warranting public or individual assistance (or both), you can choose to deduct that loss on your return or amended return for the tax year immediately preceding the tax year in which the disaster happened. Military turbotax If you make this choice, the loss is treated as having occurred in the preceding year. Military turbotax    Claiming a qualifying disaster loss on the previous year's return may result in a lower tax for that year, often producing or increasing a cash refund. Military turbotax   You must make the choice to take your casualty loss for the disaster in the preceding year by the later of the following dates. Military turbotax The due date (without extensions) for filing your tax return for the tax year in which the disaster actually occurred. Military turbotax The due date (with extensions) for the return for the preceding tax year. Military turbotax Federal disaster relief grants. Military turbotax   Do not include post-disaster relief grants received under the Robert T. Military turbotax Stafford Disaster Relief and Emergency Assistance Act in your income if the grant payments are made to help you meet necessary expenses or serious needs for medical, dental, housing, personal property, transportation, or funeral expenses. Military turbotax Do not deduct casualty losses or medical expenses to the extent they are specifically reimbursed by these disaster relief grants. Military turbotax If the casualty loss was specifically reimbursed by the grant and you received the grant after the year in which you deducted the casualty loss, see Reimbursement received after deducting loss , earlier. Military turbotax Unemployment assistance payments under the Act are taxable unemployment compensation. Military turbotax Qualified disaster relief payments. Military turbotax   Qualified disaster relief payments are not included in the income of individuals to the extent any expenses compensated by these payments are not otherwise compensated for by insurance or other reimbursement. Military turbotax These payments are not subject to income tax, self-employment tax, or employment taxes (social security, Medicare, and federal unemployment taxes). Military turbotax No withholding applies to these payments. Military turbotax   Qualified disaster relief payments include payments you receive (regardless of the source) for the following expenses. Military turbotax Reasonable and necessary personal, family, living, or funeral expenses incurred as a result of a federally declared disaster. Military turbotax Reasonable and necessary expenses incurred for the repair or rehabilitation of a personal residence due to a federally declared disaster. Military turbotax (A personal residence can be a rented residence or one you own. Military turbotax ) Reasonable and necessary expenses incurred for the repair or replacement of the contents of a personal residence due to a federally declared disaster. Military turbotax   Qualified disaster relief payments include amounts paid by a federal, state, or local government in connection with a federally declared disaster to individuals affected by the disaster. Military turbotax    Qualified disaster relief payments do not include: Payments for expenses otherwise paid for by insurance or other reimbursements, or Income replacement payments, such as payments of lost wages, lost business income, or unemployment compensation. Military turbotax Qualified disaster mitigation payments. Military turbotax   Qualified disaster mitigation payments made under the Robert T. Military turbotax Stafford Disaster Relief and Emergency Assistance Act or the National Flood Insurance Act (as in effect on April 15, 2005) are not included in income. Military turbotax These are payments you, as a property owner, receive to reduce the risk of future damage to your property. Military turbotax You cannot increase your basis in property, or take a deduction or credit, for expenditures made with respect to those payments. Military turbotax Sale of property under hazard mitigation program. Military turbotax   Generally, if you sell or otherwise transfer property, you must recognize any gain or loss for tax purposes unless the property is your main home. Military turbotax You report the gain or deduct the loss on your tax return for the year you realize it. Military turbotax (You cannot deduct a loss on personal-use property unless the loss resulted from a casualty, as discussed earlier. Military turbotax ) However, if you sell or otherwise transfer property to the Federal Government, a state or local government, or an Indian tribal government under a hazard mitigation program, you can choose to postpone reporting the gain if you buy qualifying replacement property within a certain period of time. Military turbotax See Postponing Gain , earlier, for the rules that apply. Military turbotax Other federal assistance programs. Military turbotax    For more information about other federal assistance programs, see Crop Insurance and Crop Disaster Payments and Feed Assistance and Payments in chapter 3 earlier. Military turbotax Postponed tax deadlines. Military turbotax   The IRS may postpone for up to 1 year certain tax deadlines of taxpayers who are affected by a federally declared disaster. Military turbotax The tax deadlines the IRS may postpone include those for filing income, excise, and employment tax returns, paying income, excise, and employment taxes, and making contributions to a traditional IRA or Roth IRA. Military turbotax   If any tax deadline is postponed, the IRS will publicize the postponement in your area and publish a news release, revenue ruling, revenue procedure, notice, announcement, or other guidance in the Internal Revenue Bulletin (IRB). Military turbotax Go to http://www. Military turbotax irs. Military turbotax gov/uac/Tax-Relief-in-Disaster-Situations to find out if a tax deadline has been postponed for your area. Military turbotax Who is eligible. Military turbotax   If the IRS postpones a tax deadline, the following taxpayers are eligible for the postponement. Military turbotax Any individual whose main home is located in a covered disaster area (defined next). Military turbotax Any business entity or sole proprietor whose principal place of business is located in a covered disaster area. Military turbotax Any individual who is a relief worker affiliated with a recognized government or philanthropic organization and who is assisting in a covered disaster area. Military turbotax Any individual, business entity, or sole proprietorship whose records are needed to meet a postponed tax deadline, provided those records are maintained in a covered disaster area. Military turbotax The main home or principal place of business does not have to be located in the covered disaster area. Military turbotax Any estate or trust that has tax records necessary to meet a postponed tax deadline, provided those records are maintained in a covered disaster area. Military turbotax The spouse on a joint return with a taxpayer who is eligible for postponements. Military turbotax Any individual, business entity, or sole proprietorship not located in a covered disaster area, but whose necessary records to meet a postponed tax deadline are located in the covered disaster area. Military turbotax Any individual visiting the covered disaster area who was killed or injured as a result of the disaster. Military turbotax Any other person determined by the IRS to be affected by a federally declared disaster. Military turbotax Covered disaster area. Military turbotax   This is an area of a federally declared disaster area in which the IRS has decided to postpone tax deadlines for up to 1 year. Military turbotax Abatement of interest and penalties. Military turbotax   The IRS may abate the interest and penalties on the underpaid income tax for the length of any postponement of tax deadlines. Military turbotax Reporting Gains and Losses You will have to file one or more of the following forms to report your gains or losses from involuntary conversions. Military turbotax Form 4684. Military turbotax   Use this form to report your gains and losses from casualties and thefts. Military turbotax Form 4797. Military turbotax   Use this form to report involuntary conversions (other than from casualty or theft) of property used in your trade or business and capital assets held in connection with a trade or business or a transaction entered into for profit. Military turbotax Also use this form if you have a gain from a casualty or theft on trade, business or income-producing property held for more than 1 year and you have to recapture some or all of your gain as ordinary income. Military turbotax Form 8949. Military turbotax   Use this form to report gain from an involuntary conversion (other than from casualty or theft) of personal-use property. Military turbotax Schedule A (Form 1040). Military turbotax   Use this form to deduct your losses from casualties and thefts of personal-use property and income-producing property, that you reported on Form 4684. Military turbotax Schedule D (Form 1040). Military turbotax   Use this form to carry over the following gains. Military turbotax Net gain shown on Form 4797 from an involuntary conversion of business property held for more than 1 year. Military turbotax Net gain shown on Form 4684 from the casualty or theft of personal-use property. Military turbotax    Also use this form to figure the overall gain or loss from transactions reported on Form 8949. Military turbotax Schedule F (Form 1040). Military turbotax   Use this form to deduct your losses from casualty or theft of livestock or produce bought for sale under Other expenses in Part II, line 32, if you use the cash method of accounting and have not otherwise deducted these losses. Military turbotax Prev  Up  Next   Home   More Online Publications
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Military turbotax Publication 519 - Additional Material Table of Contents Appendix A—Tax Treaty Exemption Procedure for StudentsBelgium Bulgaria China, People's Republic of Cyprus Czech Republic, Estonia, Latvia, Lithuania, and Slovak Republic Egypt France Germany Iceland Indonesia Israel, Philippines and Thailand Korea, Norway, Poland, and Romania Morocco Netherlands Pakistan Portugal and Spain Slovenia and Venezuela Trinidad and Tobago Tunisia Appendix B—Tax Treaty Exemption Procedure for Teachers and ResearchersBelgium Bulgaria China, People's Republic of Commonwealth of Independent States Czech Republic and Slovak Republic Egypt, Hungary, Korea, Philippines, Poland, and Romania France Germany Greece India Indonesia Israel Italy Jamaica Luxembourg Netherlands Norway Pakistan Portugal Slovenia and Venezuela Thailand Trinidad and Tobago United Kingdom Frequently Asked Questions This section answers tax-related questions commonly asked by aliens. Military turbotax . Military turbotax What is the difference between a resident alien and a nonresident alien for tax purposes? . Military turbotax What is the difference between the taxation of income that is effectively connected with a trade or business in the United States and income that is not effectively connected with a trade or business in the United States? . Military turbotax I am a student with an F-1 Visa. Military turbotax I was told that I was an exempt individual. Military turbotax Does this mean I am exempt from paying U. Military turbotax S. Military turbotax tax? . Military turbotax I am a resident alien. Military turbotax Can I claim any treaty benefits? . Military turbotax I am a nonresident alien with no dependents. Military turbotax I am working temporarily for a U. Military turbotax S. Military turbotax company. Military turbotax What return do I file? . Military turbotax I came to the United States on June 30th of last year. Military turbotax I have an H-1B Visa. Military turbotax What is my tax status, resident alien or nonresident alien? What tax return do I file? . Military turbotax When is my Form 1040NR due? . Military turbotax My spouse is a nonresident alien. Military turbotax Does he need a social security number? . Military turbotax I am a nonresident alien. Military turbotax Can I file a joint return with my spouse? . Military turbotax I have an H-1B Visa and my husband has an F-1 Visa. Military turbotax We both lived in the United States all of last year and had income. Military turbotax What kind of form should we file? Do we file separate returns or a joint return? . Military turbotax Is a dual-resident taxpayer the same as a dual-status taxpayer? . Military turbotax I am a nonresident alien and invested money in the U. Military turbotax S. Military turbotax stock market through a U. Military turbotax S. Military turbotax brokerage company. Military turbotax Are the dividends and the capital gains taxable? If yes, how are they taxed? . Military turbotax I am a nonresident alien. Military turbotax I receive U. Military turbotax S. Military turbotax social security benefits. Military turbotax Are my benefits taxable? . Military turbotax Do I have to pay taxes on my scholarship? . Military turbotax I am a nonresident alien. Military turbotax Can I claim the standard deduction? . Military turbotax I am a dual-status taxpayer. Military turbotax Can I claim the standard deduction? . Military turbotax I am filing Form 1040NR. Military turbotax Can I claim itemized deductions? . Military turbotax I am not a U. Military turbotax S. Military turbotax citizen. Military turbotax What exemptions can I claim? . Military turbotax What exemptions can I claim as a dual-status taxpayer? . Military turbotax I am single with a dependent child. Military turbotax I was a dual-status alien in 2013. Military turbotax Can I claim the earned income credit on my 2013 tax return? . Military turbotax I am a nonresident alien student. Military turbotax Can I claim an education credit on my Form 1040NR? . Military turbotax I am a nonresident alien, temporarily working in the U. Military turbotax S. Military turbotax under a J visa. Military turbotax Am I subject to social security and Medicare taxes? . Military turbotax I am a nonresident alien student. Military turbotax Social security taxes were withheld from my pay in error. Military turbotax How do I get a refund of these taxes? . Military turbotax I am an alien who will be leaving the United States. Military turbotax What forms do I have to file before I leave? . Military turbotax I filed a Form 1040-C when I left the United States. Military turbotax Do I still have to file an annual U. Military turbotax S. Military turbotax tax return? . Military turbotax What is the difference between a resident alien and a nonresident alien for tax purposes? For tax purposes, an alien is an individual who is not a U. Military turbotax S. Military turbotax citizen. Military turbotax Aliens are classified as resident aliens and nonresident aliens. Military turbotax Resident aliens are taxed on their worldwide income, the same as U. Military turbotax S. Military turbotax citizens. Military turbotax Nonresident aliens are taxed only on their U. Military turbotax S. Military turbotax source income and certain foreign source income that is effectively connected with a U. Military turbotax S. Military turbotax trade or business. Military turbotax The difference between these two categories is that effectively connected income, after allowable deductions, is taxed at graduated rates. Military turbotax These are the same rates that apply to U. Military turbotax S. Military turbotax citizens and residents. Military turbotax Income that is not effectively connected is taxed at a flat 30% (or lower treaty) rate. Military turbotax The term “exempt individual” does not refer to someone exempt from U. Military turbotax S. Military turbotax tax. Military turbotax You were referred to as an exempt individual because as a student temporarily in the United States on an F Visa, you do not have to count the days you were present in the United States as a student during the first 5 years in determining if you are a resident alien under the substantial presence test. Military turbotax See chapter 1 . Military turbotax Generally, you cannot claim tax treaty benefits as a resident alien. Military turbotax However, there are exceptions. Military turbotax See Effect of Tax Treaties in chapter 1. Military turbotax See also Resident Aliens under Some Typical Tax Treaty Benefits in chapter 9. Military turbotax You must file Form 1040NR if you are engaged in a trade or business in the United States, or have any other U. Military turbotax S. Military turbotax source income on which tax was not fully paid by the amount withheld. Military turbotax You can use Form 1040NR-EZ instead of Form 1040NR if you meet all 11 conditions listed under Form 1040NR-EZ in chapter 7. Military turbotax You were a dual-status alien last year. Military turbotax As a general rule, because you were in the United States for 183 days or more, you have met the substantial presence test and you are taxed as a resident. Military turbotax However, for the part of the year that you were not present in the United States, you are a nonresident. Military turbotax File Form 1040. Military turbotax Print “Dual-Status Return” across the top. Military turbotax Attach a statement showing your U. Military turbotax S. Military turbotax source income for the part of the year you were a nonresident. Military turbotax You may use Form 1040NR as the statement. Military turbotax Print “Dual-Status Statement” across the top. Military turbotax See First Year of Residency in chapter 1 for rules on determining your residency starting date. Military turbotax If you are an employee and you receive wages subject to U. Military turbotax S. Military turbotax income tax withholding, you must generally file by the 15th day of the 4th month after your tax year ends. Military turbotax If you file for the 2013 calendar year, your return is due April 15, 2014. Military turbotax If you are not an employee who receives wages subject to U. Military turbotax S. Military turbotax income tax withholding, you must file by the 15th day of the 6th month after your tax year ends. Military turbotax For the 2013 calendar year, file your return by June 16, 2014. Military turbotax For more information on when and where to file, see chapter 7 . Military turbotax A social security number (SSN) must be furnished on returns, statements, and other tax-related documents. Military turbotax If your spouse does not have and is not eligible to get an SSN, he must apply for an individual taxpayer identification number (ITIN). Military turbotax If you are a U. Military turbotax S. Military turbotax citizen or resident and you choose to treat your nonresident spouse as a resident and file a joint tax return, your nonresident spouse needs an SSN or an ITIN. Military turbotax Alien spouses who are claimed as exemptions or dependents are also required to furnish an SSN or an ITIN. Military turbotax See Identification Number in chapter 5 for more information. Military turbotax Generally, you cannot file as married filing jointly if either spouse was a nonresident alien at any time during the tax year. Military turbotax However, nonresident aliens married to U. Military turbotax S. Military turbotax citizens or residents can choose to be treated as U. Military turbotax S. Military turbotax residents and file joint returns. Military turbotax For more information on this choice, see Nonresident Spouse Treated as a Resident in chapter 1. Military turbotax Assuming both of you had these visas for all of last year, you are a resident alien. Military turbotax Your husband is a nonresident alien if he has not been in the United States as a student for more than 5 years. Military turbotax You and your husband can file a joint tax return on Form 1040, 1040A, or 1040EZ if he makes the choice to be treated as a resident for the entire year. Military turbotax See Nonresident Spouse Treated as a Resident in chapter 1. Military turbotax If your husband does not make this choice, you must file a separate return on Form 1040 or Form 1040A. Military turbotax Your husband must file Form 1040NR or 1040NR-EZ. Military turbotax No. Military turbotax A dual-resident taxpayer is one who is a resident of both the United States and another country under each country's tax laws. Military turbotax See Effect of Tax Treaties in chapter 1. Military turbotax You are a dual-status taxpayer when you are both a resident alien and a nonresident alien in the same year. Military turbotax See chapter 6 . Military turbotax The following rules apply if the dividends and capital gains are not effectively connected with a U. Military turbotax S. Military turbotax trade or business. Military turbotax Capital gains are generally not taxable if you were in the United States for less than 183 days during the year. Military turbotax See Sales or Exchanges of Capital Assets in chapter 4 for more information and exceptions. Military turbotax Dividends are generally taxed at a 30% (or lower treaty) rate. Military turbotax The brokerage company or payor of the dividends should withhold this tax at source. Military turbotax If tax is not withheld at the correct rate, you must file Form 1040NR to receive a refund or pay any additional tax due. Military turbotax If the capital gains and dividends are effectively connected with a U. Military turbotax S. Military turbotax trade or business, they are taxed according to the same rules and at the same rates that apply to U. Military turbotax S. Military turbotax citizens and residents. Military turbotax If you are a nonresident alien, 85% of any U. Military turbotax S. Military turbotax social security benefits (and the equivalent portion of tier 1 railroad retirement benefits) you receive is subject to the flat 30% tax, unless exempt, or subject to a lower treaty rate. Military turbotax See The 30% Tax in chapter 4. Military turbotax If you are a nonresident alien and the scholarship is not from U. Military turbotax S. Military turbotax sources, it is not subject to U. Military turbotax S. Military turbotax tax. Military turbotax See Scholarships, Grants, Prizes, and Awards in chapter 2 to determine whether your scholarship is from U. Military turbotax S. Military turbotax sources. Military turbotax If your scholarship is from U. Military turbotax S. Military turbotax sources or you are a resident alien, your scholarship is subject to U. Military turbotax S. Military turbotax tax according to the following rules. Military turbotax If you are a candidate for a degree, you may be able to exclude from your income the part of the scholarship you use to pay for tuition, fees, books, supplies, and equipment required by the educational institution. Military turbotax However, the part of the scholarship you use to pay for other expenses, such as room and board, is taxable. Military turbotax See Scholarships and Fellowship Grants in chapter 3 for more information. Military turbotax If you are not a candidate for a degree, your scholarship is taxable. Military turbotax Nonresident aliens cannot claim the standard deduction. Military turbotax However, see Students and business apprentices from India , under Itemized Deductions in chapter 5 for an exception. Military turbotax You cannot claim the standard deduction allowed on Form 1040. Military turbotax However, you can itemize any allowable deductions. Military turbotax Nonresident aliens can claim some of the same itemized deductions that resident aliens can claim. Military turbotax However, nonresident aliens can claim itemized deductions only if they have income effectively connected with their U. Military turbotax S. Military turbotax trade or business. Military turbotax See Itemized Deductions in chapter 5. Military turbotax Resident aliens can claim personal exemptions and exemptions for dependents in the same way as U. Military turbotax S. Military turbotax citizens. Military turbotax However, nonresident aliens generally can claim only a personal exemption for themselves on their U. Military turbotax S. Military turbotax tax return. Military turbotax There are special rules for residents of Mexico, Canada, and South Korea; for U. Military turbotax S. Military turbotax nationals; and for students and business apprentices from India. Military turbotax See Exemptions in chapter 5. Military turbotax As a dual-status taxpayer, you usually will be able to claim your own personal exemption. Military turbotax Subject to the general rules for qualification, you can claim exemptions for your spouse and dependents when you figure taxable income for the part of the year you are a resident alien. Military turbotax The amount you can claim for these exemptions is limited to your taxable income (figured before subtracting exemptions) for the part of the year you are a resident alien. Military turbotax You cannot use exemptions (other than your own) to reduce taxable income to less than zero for that period. Military turbotax If you are a nonresident alien for any part of the year, you cannot claim the earned income credit. Military turbotax See chapter 6 for more information on dual-status aliens. Military turbotax If you are a nonresident alien for any part of the year, you generally cannot claim the education credits. Military turbotax However, if you are married and choose to file a joint return with a U. Military turbotax S. Military turbotax citizen or resident spouse, you may be eligible for these credits. Military turbotax See Nonresident Spouse Treated as a Resident in chapter 1. Military turbotax Generally, services you perform as a nonresident alien temporarily in the United States as a nonimmigrant under subparagraph (F), (J), (M), or (Q) of section 101(a)(15) of the Immigration and Nationality Act are not covered under the social security program if you perform the services to carry out the purpose for which you were admitted to the United States. Military turbotax See Social Security and Medicare Taxes in chapter 8. Military turbotax If social security or Medicare taxes were withheld in error from pay that is not subject to these taxes, contact the employer who withheld the taxes for a refund. Military turbotax If you are unable to get a full refund of the amount from your employer, file a claim for refund with the Internal Revenue Service on Form 843, Claim for Refund and Request for Abatement. Military turbotax Do not use Form 843 to request a refund of Additional Medicare Tax. Military turbotax See Refund of Taxes Withheld in Error in chapter 8. Military turbotax Before leaving the United States, aliens generally must obtain a certificate of compliance. Military turbotax This document, also popularly known as the sailing permit or departure permit, is part of the income tax form you must file before leaving. Military turbotax You will receive a sailing or departure permit after filing a Form 1040-C or Form 2063. Military turbotax These forms are discussed in chapter 11. Military turbotax Form 1040-C is not an annual U. Military turbotax S. Military turbotax income tax return. Military turbotax If an income tax return is required by law, you must file that return even though you already filed a Form 1040-C. Military turbotax Chapters 5 and 7 discuss filing an annual U. Military turbotax S. Military turbotax income tax return. Military turbotax . Military turbotax What is the difference between the taxation of income that is effectively connected with a trade or business in the United States and income that is not effectively connected with a trade or business in the United States? The difference between these two categories is that effectively connected income, after allowable deductions, is taxed at graduated rates. Military turbotax These are the same rates that apply to U. Military turbotax S. Military turbotax citizens and residents. Military turbotax Income that is not effectively connected is taxed at a flat 30% (or lower treaty) rate. Military turbotax The term “exempt individual” does not refer to someone exempt from U. Military turbotax S. Military turbotax tax. Military turbotax You were referred to as an exempt individual because as a student temporarily in the United States on an F Visa, you do not have to count the days you were present in the United States as a student during the first 5 years in determining if you are a resident alien under the substantial presence test. Military turbotax See chapter 1 . Military turbotax Generally, you cannot claim tax treaty benefits as a resident alien. Military turbotax However, there are exceptions. Military turbotax See Effect of Tax Treaties in chapter 1. Military turbotax See also Resident Aliens under Some Typical Tax Treaty Benefits in chapter 9. Military turbotax You must file Form 1040NR if you are engaged in a trade or business in the United States, or have any other U. Military turbotax S. Military turbotax source income on which tax was not fully paid by the amount withheld. Military turbotax You can use Form 1040NR-EZ instead of Form 1040NR if you meet all 11 conditions listed under Form 1040NR-EZ in chapter 7. Military turbotax You were a dual-status alien last year. Military turbotax As a general rule, because you were in the United States for 183 days or more, you have met the substantial presence test and you are taxed as a resident. Military turbotax However, for the part of the year that you were not present in the United States, you are a nonresident. Military turbotax File Form 1040. Military turbotax Print “Dual-Status Return” across the top. Military turbotax Attach a statement showing your U. Military turbotax S. Military turbotax source income for the part of the year you were a nonresident. Military turbotax You may use Form 1040NR as the statement. Military turbotax Print “Dual-Status Statement” across the top. Military turbotax See First Year of Residency in chapter 1 for rules on determining your residency starting date. Military turbotax If you are an employee and you receive wages subject to U. Military turbotax S. Military turbotax income tax withholding, you must generally file by the 15th day of the 4th month after your tax year ends. Military turbotax If you file for the 2013 calendar year, your return is due April 15, 2014. Military turbotax If you are not an employee who receives wages subject to U. Military turbotax S. Military turbotax income tax withholding, you must file by the 15th day of the 6th month after your tax year ends. Military turbotax For the 2013 calendar year, file your return by June 16, 2014. Military turbotax For more information on when and where to file, see chapter 7 . Military turbotax A social security number (SSN) must be furnished on returns, statements, and other tax-related documents. Military turbotax If your spouse does not have and is not eligible to get an SSN, he must apply for an individual taxpayer identification number (ITIN). Military turbotax If you are a U. Military turbotax S. Military turbotax citizen or resident and you choose to treat your nonresident spouse as a resident and file a joint tax return, your nonresident spouse needs an SSN or an ITIN. Military turbotax Alien spouses who are claimed as exemptions or dependents are also required to furnish an SSN or an ITIN. Military turbotax See Identification Number in chapter 5 for more information. Military turbotax Generally, you cannot file as married filing jointly if either spouse was a nonresident alien at any time during the tax year. Military turbotax However, nonresident aliens married to U. Military turbotax S. Military turbotax citizens or residents can choose to be treated as U. Military turbotax S. Military turbotax residents and file joint returns. Military turbotax For more information on this choice, see Nonresident Spouse Treated as a Resident in chapter 1. Military turbotax Assuming both of you had these visas for all of last year, you are a resident alien. Military turbotax Your husband is a nonresident alien if he has not been in the United States as a student for more than 5 years. Military turbotax You and your husband can file a joint tax return on Form 1040, 1040A, or 1040EZ if he makes the choice to be treated as a resident for the entire year. Military turbotax See Nonresident Spouse Treated as a Resident in chapter 1. Military turbotax If your husband does not make this choice, you must file a separate return on Form 1040 or Form 1040A. Military turbotax Your husband must file Form 1040NR or 1040NR-EZ. Military turbotax No. Military turbotax A dual-resident taxpayer is one who is a resident of both the United States and another country under each country's tax laws. Military turbotax See Effect of Tax Treaties in chapter 1. Military turbotax You are a dual-status taxpayer when you are both a resident alien and a nonresident alien in the same year. Military turbotax See chapter 6 . Military turbotax The following rules apply if the dividends and capital gains are not effectively connected with a U. Military turbotax S. Military turbotax trade or business. Military turbotax Capital gains are generally not taxable if you were in the United States for less than 183 days during the year. Military turbotax See Sales or Exchanges of Capital Assets in chapter 4 for more information and exceptions. Military turbotax Dividends are generally taxed at a 30% (or lower treaty) rate. Military turbotax The brokerage company or payor of the dividends should withhold this tax at source. Military turbotax If tax is not withheld at the correct rate, you must file Form 1040NR to receive a refund or pay any additional tax due. Military turbotax If the capital gains and dividends are effectively connected with a U. Military turbotax S. Military turbotax trade or business, they are taxed according to the same rules and at the same rates that apply to U. Military turbotax S. Military turbotax citizens and residents. Military turbotax If you are a nonresident alien, 85% of any U. Military turbotax S. Military turbotax social security benefits (and the equivalent portion of tier 1 railroad retirement benefits) you receive is subject to the flat 30% tax, unless exempt, or subject to a lower treaty rate. Military turbotax See The 30% Tax in chapter 4. Military turbotax If you are a nonresident alien and the scholarship is not from U. Military turbotax S. Military turbotax sources, it is not subject to U. Military turbotax S. Military turbotax tax. Military turbotax See Scholarships, Grants, Prizes, and Awards in chapter 2 to determine whether your scholarship is from U. Military turbotax S. Military turbotax sources. Military turbotax If your scholarship is from U. Military turbotax S. Military turbotax sources or you are a resident alien, your scholarship is subject to U. Military turbotax S. Military turbotax tax according to the following rules. Military turbotax If you are a candidate for a degree, you may be able to exclude from your income the part of the scholarship you use to pay for tuition, fees, books, supplies, and equipment required by the educational institution. Military turbotax However, the part of the scholarship you use to pay for other expenses, such as room and board, is taxable. Military turbotax See Scholarships and Fellowship Grants in chapter 3 for more information. Military turbotax If you are not a candidate for a degree, your scholarship is taxable. Military turbotax Nonresident aliens cannot claim the standard deduction. Military turbotax However, see Students and business apprentices from India , under Itemized Deductions in chapter 5 for an exception. Military turbotax You cannot claim the standard deduction allowed on Form 1040. Military turbotax However, you can itemize any allowable deductions. Military turbotax Nonresident aliens can claim some of the same itemized deductions that resident aliens can claim. Military turbotax However, nonresident aliens can claim itemized deductions only if they have income effectively connected with their U. Military turbotax S. Military turbotax trade or business. Military turbotax See Itemized Deductions in chapter 5. Military turbotax Resident aliens can claim personal exemptions and exemptions for dependents in the same way as U. Military turbotax S. Military turbotax citizens. Military turbotax However, nonresident aliens generally can claim only a personal exemption for themselves on their U. Military turbotax S. Military turbotax tax return. Military turbotax There are special rules for residents of Mexico, Canada, and South Korea; for U. Military turbotax S. Military turbotax nationals; and for students and business apprentices from India. Military turbotax See Exemptions in chapter 5. Military turbotax As a dual-status taxpayer, you usually will be able to claim your own personal exemption. Military turbotax Subject to the general rules for qualification, you can claim exemptions for your spouse and dependents when you figure taxable income for the part of the year you are a resident alien. Military turbotax The amount you can claim for these exemptions is limited to your taxable income (figured before subtracting exemptions) for the part of the year you are a resident alien. Military turbotax You cannot use exemptions (other than your own) to reduce taxable income to less than zero for that period. Military turbotax If you are a nonresident alien for any part of the year, you cannot claim the earned income credit. Military turbotax See chapter 6 for more information on dual-status aliens. Military turbotax If you are a nonresident alien for any part of the year, you generally cannot claim the education credits. Military turbotax However, if you are married and choose to file a joint return with a U. Military turbotax S. Military turbotax citizen or resident spouse, you may be eligible for these credits. Military turbotax See Nonresident Spouse Treated as a Resident in chapter 1. Military turbotax Generally, services you perform as a nonresident alien temporarily in the United States as a nonimmigrant under subparagraph (F), (J), (M), or (Q) of section 101(a)(15) of the Immigration and Nationality Act are not covered under the social security program if you perform the services to carry out the purpose for which you were admitted to the United States. Military turbotax See Social Security and Medicare Taxes in chapter 8. Military turbotax If social security or Medicare taxes were withheld in error from pay that is not subject to these taxes, contact the employer who withheld the taxes for a refund. Military turbotax If you are unable to get a full refund of the amount from your employer, file a claim for refund with the Internal Revenue Service on Form 843, Claim for Refund and Request for Abatement. Military turbotax Do not use Form 843 to request a refund of Additional Medicare Tax. Military turbotax See Refund of Taxes Withheld in Error in chapter 8. Military turbotax Before leaving the United States, aliens generally must obtain a certificate of compliance. Military turbotax This document, also popularly known as the sailing permit or departure permit, is part of the income tax form you must file before leaving. Military turbotax You will receive a sailing or departure permit after filing a Form 1040-C or Form 2063. Military turbotax These forms are discussed in chapter 11. Military turbotax Form 1040-C is not an annual U. Military turbotax S. Military turbotax income tax return. Military turbotax If an income tax return is required by law, you must file that return even though you already filed a Form 1040-C. Military turbotax Chapters 5 and 7 discuss filing an annual U. Military turbotax S. Military turbotax income tax return. Military turbotax . Military turbotax I am a student with an F-1 Visa. Military turbotax I was told that I was an exempt individual. Military turbotax Does this mean I am exempt from paying U. Military turbotax S. Military turbotax tax? The term “exempt individual” does not refer to someone exempt from U. Military turbotax S. Military turbotax tax. Military turbotax You were referred to as an exempt individual because as a student temporarily in the United States on an F Visa, you do not have to count the days you were present in the United States as a student during the first 5 years in determining if you are a resident alien under the substantial presence test. Military turbotax See chapter 1 . Military turbotax Generally, you cannot claim tax treaty benefits as a resident alien. Military turbotax However, there are exceptions. Military turbotax See Effect of Tax Treaties in chapter 1. Military turbotax See also Resident Aliens under Some Typical Tax Treaty Benefits in chapter 9. Military turbotax You must file Form 1040NR if you are engaged in a trade or business in the United States, or have any other U. Military turbotax S. Military turbotax source income on which tax was not fully paid by the amount withheld. Military turbotax You can use Form 1040NR-EZ instead of Form 1040NR if you meet all 11 conditions listed under Form 1040NR-EZ in chapter 7. Military turbotax You were a dual-status alien last year. Military turbotax As a general rule, because you were in the United States for 183 days or more, you have met the substantial presence test and you are taxed as a resident. Military turbotax However, for the part of the year that you were not present in the United States, you are a nonresident. Military turbotax File Form 1040. Military turbotax Print “Dual-Status Return” across the top. Military turbotax Attach a statement showing your U. Military turbotax S. Military turbotax source income for the part of the year you were a nonresident. Military turbotax You may use Form 1040NR as the statement. Military turbotax Print “Dual-Status Statement” across the top. Military turbotax See First Year of Residency in chapter 1 for rules on determining your residency starting date. Military turbotax If you are an employee and you receive wages subject to U. Military turbotax S. Military turbotax income tax withholding, you must generally file by the 15th day of the 4th month after your tax year ends. Military turbotax If you file for the 2013 calendar year, your return is due April 15, 2014. Military turbotax If you are not an employee who receives wages subject to U. Military turbotax S. Military turbotax income tax withholding, you must file by the 15th day of the 6th month after your tax year ends. Military turbotax For the 2013 calendar year, file your return by June 16, 2014. Military turbotax For more information on when and where to file, see chapter 7 . Military turbotax A social security number (SSN) must be furnished on returns, statements, and other tax-related documents. Military turbotax If your spouse does not have and is not eligible to get an SSN, he must apply for an individual taxpayer identification number (ITIN). Military turbotax If you are a U. Military turbotax S. Military turbotax citizen or resident and you choose to treat your nonresident spouse as a resident and file a joint tax return, your nonresident spouse needs an SSN or an ITIN. Military turbotax Alien spouses who are claimed as exemptions or dependents are also required to furnish an SSN or an ITIN. Military turbotax See Identification Number in chapter 5 for more information. Military turbotax Generally, you cannot file as married filing jointly if either spouse was a nonresident alien at any time during the tax year. Military turbotax However, nonresident aliens married to U. Military turbotax S. Military turbotax citizens or residents can choose to be treated as U. Military turbotax S. Military turbotax residents and file joint returns. Military turbotax For more information on this choice, see Nonresident Spouse Treated as a Resident in chapter 1. Military turbotax Assuming both of you had these visas for all of last year, you are a resident alien. Military turbotax Your husband is a nonresident alien if he has not been in the United States as a student for more than 5 years. Military turbotax You and your husband can file a joint tax return on Form 1040, 1040A, or 1040EZ if he makes the choice to be treated as a resident for the entire year. Military turbotax See Nonresident Spouse Treated as a Resident in chapter 1. Military turbotax If your husband does not make this choice, you must file a separate return on Form 1040 or Form 1040A. Military turbotax Your husband must file Form 1040NR or 1040NR-EZ. Military turbotax No. Military turbotax A dual-resident taxpayer is one who is a resident of both the United States and another country under each country's tax laws. Military turbotax See Effect of Tax Treaties in chapter 1. Military turbotax You are a dual-status taxpayer when you are both a resident alien and a nonresident alien in the same year. Military turbotax See chapter 6 . Military turbotax The following rules apply if the dividends and capital gains are not effectively connected with a U. Military turbotax S. Military turbotax trade or business. Military turbotax Capital gains are generally not taxable if you were in the United States for less than 183 days during the year. Military turbotax See Sales or Exchanges of Capital Assets in chapter 4 for more information and exceptions. Military turbotax Dividends are generally taxed at a 30% (or lower treaty) rate. Military turbotax The brokerage company or payor of the dividends should withhold this tax at source. Military turbotax If tax is not withheld at the correct rate, you must file Form 1040NR to receive a refund or pay any additional tax due. Military turbotax If the capital gains and dividends are effectively connected with a U. Military turbotax S. Military turbotax trade or business, they are taxed according to the same rules and at the same rates that apply to U. Military turbotax S. Military turbotax citizens and residents. Military turbotax If you are a nonresident alien, 85% of any U. Military turbotax S. Military turbotax social security benefits (and the equivalent portion of tier 1 railroad retirement benefits) you receive is subject to the flat 30% tax, unless exempt, or subject to a lower treaty rate. Military turbotax See The 30% Tax in chapter 4. Military turbotax If you are a nonresident alien and the scholarship is not from U. Military turbotax S. Military turbotax sources, it is not subject to U. Military turbotax S. Military turbotax tax. Military turbotax See Scholarships, Grants, Prizes, and Awards in chapter 2 to determine whether your scholarship is from U. Military turbotax S. Military turbotax sources. Military turbotax If your scholarship is from U. Military turbotax S. Military turbotax sources or you are a resident alien, your scholarship is subject to U. Military turbotax S. Military turbotax tax according to the following rules. Military turbotax If you are a candidate for a degree, you may be able to exclude from your income the part of the scholarship you use to pay for tuition, fees, books, supplies, and equipment required by the educational institution. Military turbotax However, the part of the scholarship you use to pay for other expenses, such as room and board, is taxable. Military turbotax See Scholarships and Fellowship Grants in chapter 3 for more information. Military turbotax If you are not a candidate for a degree, your scholarship is taxable. Military turbotax Nonresident aliens cannot claim the standard deduction. Military turbotax However, see Students and business apprentices from India , under Itemized Deductions in chapter 5 for an exception. Military turbotax You cannot claim the standard deduction allowed on Form 1040. Military turbotax However, you can itemize any allowable deductions. Military turbotax Nonresident aliens can claim some of the same itemized deductions that resident aliens can claim. Military turbotax However, nonresident aliens can claim itemized deductions only if they have income effectively connected with their U. Military turbotax S. Military turbotax trade or business. Military turbotax See Itemized Deductions in chapter 5. Military turbotax Resident aliens can claim personal exemptions and exemptions for dependents in the same way as U. Military turbotax S. Military turbotax citizens. Military turbotax However, nonresident aliens generally can claim only a personal exemption for themselves on their U. Military turbotax S. Military turbotax tax return. Military turbotax There are special rules for residents of Mexico, Canada, and South Korea; for U. Military turbotax S. Military turbotax nationals; and for students and business apprentices from India. Military turbotax See Exemptions in chapter 5. Military turbotax As a dual-status taxpayer, you usually will be able to claim your own personal exemption. Military turbotax Subject to the general rules for qualification, you can claim exemptions for your spouse and dependents when you figure taxable income for the part of the year you are a resident alien. Military turbotax The amount you can claim for these exemptions is limited to your taxable income (figured before subtracting exemptions) for the part of the year you are a resident alien. Military turbotax You cannot use exemptions (other than your own) to reduce taxable income to less than zero for that period. Military turbotax If you are a nonresident alien for any part of the year, you cannot claim the earned income credit. Military turbotax See chapter 6 for more information on dual-status aliens. Military turbotax If you are a nonresident alien for any part of the year, you generally cannot claim the education credits. Military turbotax However, if you are married and choose to file a joint return with a U. Military turbotax S. Military turbotax citizen or resident spouse, you may be eligible for these credits. Military turbotax See Nonresident Spouse Treated as a Resident in chapter 1. Military turbotax Generally, services you perform as a nonresident alien temporarily in the United States as a nonimmigrant under subparagraph (F), (J), (M), or (Q) of section 101(a)(15) of the Immigration and Nationality Act are not covered under the social security program if you perform the services to carry out the purpose for which you were admitted to the United States. Military turbotax See Social Security and Medicare Taxes in chapter 8. Military turbotax If social security or Medicare taxes were withheld in error from pay that is not subject to these taxes, contact the employer who withheld the taxes for a refund. Military turbotax If you are unable to get a full refund of the amount from your employer, file a claim for refund with the Internal Revenue Service on Form 843, Claim for Refund and Request for Abatement. Military turbotax Do not use Form 843 to request a refund of Additional Medicare Tax. Military turbotax See Refund of Taxes Withheld in Error in chapter 8. Military turbotax Before leaving the United States, aliens generally must obtain a certificate of compliance. Military turbotax This document, also popularly known as the sailing permit or departure permit, is part of the income tax form you must file before leaving. Military turbotax You will receive a sailing or departure permit after filing a Form 1040-C or Form 2063. Military turbotax These forms are discussed in chapter 11. Military turbotax Form 1040-C is not an annual U. Military turbotax S. Military turbotax income tax return. Military turbotax If an income tax return is required by law, you must file that return even though you already filed a Form 1040-C. Military turbotax Chapters 5 and 7 discuss filing an annual U. Military turbotax S. Military turbotax income tax return. Military turbotax . Military turbotax I am a resident alien. Military turbotax Can I claim any treaty benefits? Generally, you cannot claim tax treaty benefits as a resident alien. Military turbotax However, there are exceptions. Military turbotax See Effect of Tax Treaties in chapter 1. Military turbotax See also Resident Aliens under Some Typical Tax Treaty Benefits in chapter 9. Military turbotax You must file Form 1040NR if you are engaged in a trade or business in the United States, or have any other U. Military turbotax S. Military turbotax source income on which tax was not fully paid by the amount withheld. Military turbotax You can use Form 1040NR-EZ instead of Form 1040NR if you meet all 11 conditions listed under Form 1040NR-EZ in chapter 7. Military turbotax You were a dual-status alien last year. Military turbotax As a general rule, because you were in the United States for 183 days or more, you have met the substantial presence test and you are taxed as a resident. Military turbotax However, for the part of the year that you were not present in the United States, you are a nonresident. Military turbotax File Form 1040. Military turbotax Print “Dual-Status Return” across the top. Military turbotax Attach a statement showing your U. Military turbotax S. Military turbotax source income for the part of the year you were a nonresident. Military turbotax You may use Form 1040NR as the statement. Military turbotax Print “Dual-Status Statement” across the top. Military turbotax See First Year of Residency in chapter 1 for rules on determining your residency starting date. Military turbotax If you are an employee and you receive wages subject to U. Military turbotax S. Military turbotax income tax withholding, you must generally file by the 15th day of the 4th month after your tax year ends. Military turbotax If you file for the 2013 calendar year, your return is due April 15, 2014. Military turbotax If you are not an employee who receives wages subject to U. Military turbotax S. Military turbotax income tax withholding, you must file by the 15th day of the 6th month after your tax year ends. Military turbotax For the 2013 calendar year, file your return by June 16, 2014. Military turbotax For more information on when and where to file, see chapter 7 . Military turbotax A social security number (SSN) must be furnished on returns, statements, and other tax-related documents. Military turbotax If your spouse does not have and is not eligible to get an SSN, he must apply for an individual taxpayer identification number (ITIN). Military turbotax If you are a U. Military turbotax S. Military turbotax citizen or resident and you choose to treat your nonresident spouse as a resident and file a joint tax return, your nonresident spouse needs an SSN or an ITIN. Military turbotax Alien spouses who are claimed as exemptions or dependents are also required to furnish an SSN or an ITIN. Military turbotax See Identification Number in chapter 5 for more information. Military turbotax Generally, you cannot file as married filing jointly if either spouse was a nonresident alien at any time during the tax year. Military turbotax However, nonresident aliens married to U. Military turbotax S. Military turbotax citizens or residents can choose to be treated as U. Military turbotax S. Military turbotax residents and file joint returns. Military turbotax For more information on this choice, see Nonresident Spouse Treated as a Resident in chapter 1. Military turbotax Assuming both of you had these visas for all of last year, you are a resident alien. Military turbotax Your husband is a nonresident alien if he has not been in the United States as a student for more than 5 years. Military turbotax You and your husband can file a joint tax return on Form 1040, 1040A, or 1040EZ if he makes the choice to be treated as a resident for the entire year. Military turbotax See Nonresident Spouse Treated as a Resident in chapter 1. Military turbotax If your husband does not make this choice, you must file a separate return on Form 1040 or Form 1040A. Military turbotax Your husband must file Form 1040NR or 1040NR-EZ. Military turbotax No. Military turbotax A dual-resident taxpayer is one who is a resident of both the United States and another country under each country's tax laws. Military turbotax See Effect of Tax Treaties in chapter 1. Military turbotax You are a dual-status taxpayer when you are both a resident alien and a nonresident alien in the same year. Military turbotax See chapter 6 . Military turbotax The following rules apply if the dividends and capital gains are not effectively connected with a U. Military turbotax S. Military turbotax trade or business. Military turbotax Capital gains are generally not taxable if you were in the United States for less than 183 days during the year. Military turbotax See Sales or Exchanges of Capital Assets in chapter 4 for more information and exceptions. Military turbotax Dividends are generally taxed at a 30% (or lower treaty) rate. Military turbotax The brokerage company or payor of the dividends should withhold this tax at source. Military turbotax If tax is not withheld at the correct rate, you must file Form 1040NR to receive a refund or pay any additional tax due. Military turbotax If the capital gains and dividends are effectively connected with a U. Military turbotax S. Military turbotax trade or business, they are taxed according to the same rules and at the same rates that apply to U. Military turbotax S. Military turbotax citizens and residents. Military turbotax If you are a nonresident alien, 85% of any U. Military turbotax S. Military turbotax social security benefits (and the equivalent portion of tier 1 railroad retirement benefits) you receive is subject to the flat 30% tax, unless exempt, or subject to a lower treaty rate. Military turbotax See The 30% Tax in chapter 4. Military turbotax If you are a nonresident alien and the scholarship is not from U. Military turbotax S. Military turbotax sources, it is not subject to U. Military turbotax S. Military turbotax tax. Military turbotax See Scholarships, Grants, Prizes, and Awards in chapter 2 to determine whether your scholarship is from U. Military turbotax S. Military turbotax sources. Military turbotax If your scholarship is from U. Military turbotax S. Military turbotax sources or you are a resident alien, your scholarship is subject to U. Military turbotax S. Military turbotax tax according to the following rules. Military turbotax If you are a candidate for a degree, you may be able to exclude from your income the part of the scholarship you use to pay for tuition, fees, books, supplies, and equipment required by the educational institution. Military turbotax However, the part of the scholarship you use to pay for other expenses, such as room and board, is taxable. Military turbotax See Scholarships and Fellowship Grants in chapter 3 for more information. Military turbotax If you are not a candidate for a degree, your scholarship is taxable. Military turbotax Nonresident aliens cannot claim the standard deduction. Military turbotax However, see Students and business apprentices from India , under Itemized Deductions in chapter 5 for an exception. Military turbotax You cannot claim the standard deduction allowed on Form 1040. Military turbotax However, you can itemize any allowable deductions. Military turbotax Nonresident aliens can claim some of the same itemized deductions that resident aliens can claim. Military turbotax However, nonresident aliens can claim itemized deductions only if they have income effectively connected with their U. Military turbotax S. Military turbotax trade or business. Military turbotax See Itemized Deductions in chapter 5. Military turbotax Resident aliens can claim personal exemptions and exemptions for dependents in the same way as U. Military turbotax S. Military turbotax citizens. Military turbotax However, nonresident aliens generally can claim only a personal exemption for themselves on their U. Military turbotax S. Military turbotax tax return. Military turbotax There are special rules for residents of Mexico, Canada, and South Korea; for U. Military turbotax S. Military turbotax nationals; and for students and business apprentices from India. Military turbotax See Exemptions in chapter 5. Military turbotax As a dual-status taxpayer, you usually will be able to claim your own personal exemption. Military turbotax Subject to the general rules for qualification, you can claim exemptions for your spouse and dependents when you figure taxable income for the part of the year you are a resident alien. Military turbotax The amount you can claim for these exemptions is limited to your taxable income (figured before subtracting exemptions) for the part of the year you are a resident alien. Military turbotax You cannot use exemptions (other than your own) to reduce taxable income to less than zero for that period. Military turbotax If you are a nonresident alien for any part of the year, you cannot claim the earned income credit. Military turbotax See chapter 6 for more information on dual-status aliens. Military turbotax If you are a nonresident alien for any part of the year, you generally cannot claim the education credits. Military turbotax However, if you are married and choose to file a joint return with a U. Military turbotax S. Military turbotax citizen or resident spouse, you may be eligible for these credits. Military turbotax See Nonresident Spouse Treated as a Resident in chapter 1. Military turbotax Generally, services you perform as a nonresident alien temporarily in the United States as a nonimmigrant under subparagraph (F), (J), (M), or (Q) of section 101(a)(15) of the Immigration and Nationality Act are not covered under the social security program if you perform the services to carry out the purpose for which you were admitted to the United States. Military turbotax See Social Security and Medicare Taxes in chapter 8. Military turbotax If social security or Medicare taxes were withheld in error from pay that is not subject to these taxes, contact the employer who withheld the taxes for a refund. Military turbotax If you are unable to get a full refund of the amount from your employer, file a claim for refund with the Internal Revenue Service on Form 843, Claim for Refund and Request for Abatement. Military turbotax Do not use Form 843 to request a refund of Additional Medicare Tax. Military turbotax See Refund of Taxes Withheld in Error in chapter 8. Military turbotax Before leaving the United States, aliens generally must obtain a certificate of compliance. Military turbotax This document, also popularly known as the sailing permit or departure permit, is part of the income tax form you must file before leaving. Military turbotax You will receive a sailing or departure permit after filing a Form 1040-C or Form 2063. Military turbotax These forms are discussed in chapter 11. Military turbotax Form 1040-C is not an annual U. Military turbotax S. Military turbotax income tax return. Military turbotax If an income tax return is required by law, you must file that return even though you already filed a Form 1040-C. Military turbotax Chapters 5 and 7 discuss filing an annual U. Military turbotax S. Military turbotax income tax return. Military turbotax . Military turbotax I am a nonresident alien with no dependents. Military turbotax I am working temporarily for a U. Military turbotax S. Military turbotax company. Military turbotax What return do I file? You must file Form 1040NR if you are engaged in a trade or business in the United States, or have any other U. Military turbotax S. Military turbotax source income on which tax was not fully paid by the amount withheld. Military turbotax You can use Form 1040NR-EZ instead of Form 1040NR if you meet all 11 conditions listed under Form 1040NR-EZ in chapter 7. Military turbotax You were a dual-status alien last year. Military turbotax As a general rule, because you were in the United States for 183 days or more, you have met the substantial presence test and you are taxed as a resident. Military turbotax However, for the part of the year that you were not present in the United States, you are a nonresident. Military turbotax File Form 1040. Military turbotax Print “Dual-Status Return” across the top. Military turbotax Attach a statement showing your U. Military turbotax S. Military turbotax source income for the part of the year you were a nonresident. Military turbotax You may use Form 1040NR as the statement. Military turbotax Print “Dual-Status Statement” across the top. Military turbotax See First Year of Residency in chapter 1 for rules on determining your residency starting date. Military turbotax If you are an employee and you receive wages subject to U. Military turbotax S. Military turbotax income tax withholding, you must generally file by the 15th day of the 4th month after your tax year ends. Military turbotax If you file for the 2013 calendar year, your return is due April 15, 2014. Military turbotax If you are not an employee who receives wages subject to U. Military turbotax S. Military turbotax income tax withholding, you must file by the 15th day of the 6th month after your tax year ends. Military turbotax For the 2013 calendar year, file your return by June 16, 2014. Military turbotax For more information on when and where to file, see chapter 7 . Military turbotax A social security number (SSN) must be furnished on returns, statements, and other tax-related documents. Military turbotax If your spouse does not have and is not eligible to get an SSN, he must apply for an individual taxpayer identification number (ITIN). Military turbotax If you are a U. Military turbotax S. Military turbotax citizen or resident and you choose to treat your nonresident spouse as a resident and file a joint tax return, your nonresident spouse needs an SSN or an ITIN. Military turbotax Alien spouses who are claimed as exemptions or dependents are also required to furnish an SSN or an ITIN. Military turbotax See Identification Number in chapter 5 for more information. Military turbotax Generally, you cannot file as married filing jointly if either spouse was a nonresident alien at any time during the tax year. Military turbotax However, nonresident aliens married to U. Military turbotax S. Military turbotax citizens or residents can choose to be treated as U. Military turbotax S. Military turbotax residents and file joint returns. Military turbotax For more information on this choice, see Nonresident Spouse Treated as a Resident in chapter 1. Military turbotax Assuming both of you had these visas for all of last year, you are a resident alien. Military turbotax Your husband is a nonresident alien if he has not been in the United States as a student for more than 5 years. Military turbotax You and your husband can file a joint tax return on Form 1040, 1040A, or 1040EZ if he makes the choice to be treated as a resident for the entire year. Military turbotax See Nonresident Spouse Treated as a Resident in chapter 1. Military turbotax If your husband does not make this choice, you must file a separate return on Form 1040 or Form 1040A. Military turbotax Your husband must file Form 1040NR or 1040NR-EZ. Military turbotax No. Military turbotax A dual-resident taxpayer is one who is a resident of both the United States and another country under each country's tax laws. Military turbotax See Effect of Tax Treaties in chapter 1. Military turbotax You are a dual-status taxpayer when you are both a resident alien and a nonresident alien in the same year. Military turbotax See chapter 6 . Military turbotax The following rules apply if the dividends and capital gains are not effectively connected with a U. Military turbotax S. Military turbotax trade or business. Military turbotax Capital gains are generally not taxable if you were in the United States for less than 183 days during the year. Military turbotax See Sales or Exchanges of Capital Assets in chapter 4 for more information and exceptions. Military turbotax Dividends are generally taxed at a 30% (or lower treaty) rate. Military turbotax The brokerage company or payor of the dividends should withhold this tax at source. Military turbotax If tax is not withheld at the correct rate, you must file Form 1040NR to receive a refund or pay any additional tax due. Military turbotax If the capital gains and dividends are effectively connected with a U. Military turbotax S. Military turbotax trade or business, they are taxed according to the same rules and at the same rates that apply to U. Military turbotax S. Military turbotax citizens and residents. Military turbotax If you are a nonresident alien, 85% of any U. Military turbotax S. Military turbotax social security benefits (and the equivalent portion of tier 1 railroad retirement benefits) you receive is subject to the flat 30% tax, unless exempt, or subject to a lower treaty rate. Military turbotax See The 30% Tax in chapter 4. Military turbotax If you are a nonresident alien and the scholarship is not from U. Military turbotax S. Military turbotax sources, it is not subject to U. Military turbotax S. Military turbotax tax. Military turbotax See Scholarships, Grants, Prizes, and Awards in chapter 2 to determine whether your scholarship is from U. Military turbotax S. Military turbotax sources. Military turbotax If your scholarship is from U. Military turbotax S. Military turbotax sources or you are a resident alien, your scholarship is subject to U. Military turbotax S. Military turbotax tax according to the following rules. Military turbotax If you are a candidate for a degree, you may be able to exclude from your income the part of the scholarship you use to pay for tuition, fees, books, supplies, and equipment required by the educational institution. Military turbotax However, the part of the scholarship you use to pay for other expenses, such as room and board, is taxable. Military turbotax See Scholarships and Fellowship Grants in chapter 3 for more information. Military turbotax If you are not a candidate for a degree, your scholarship is taxable. Military turbotax Nonresident aliens cannot claim the standard deduction. Military turbotax However, see Students and business apprentices from India , under Itemized Deductions in chapter 5 for an exception. Military turbotax You cannot claim the standard deduction allowed on Form 1040. Military turbotax However, you can itemize any allowable deductions. Military turbotax Nonresident aliens can claim some of the same itemized deductions that resident aliens can claim. Military turbotax However, nonresident aliens can claim itemized deductions only if they have income effectively connected with their U. Military turbotax S. Military turbotax trade or business. Military turbotax See Itemized Deductions in chapter 5. Military turbotax Resident aliens can claim personal exemptions and exemptions for dependents in the same way as U. Military turbotax S. Military turbotax citizens. Military turbotax However, nonresident aliens generally can claim only a personal exemption for themselves on their U. Military turbotax S. Military turbotax tax return. Military turbotax There are special rules for residents of Mexico, Canada, and South Korea; for U. Military turbotax S. Military turbotax nationals; and for students and business apprentices from India. Military turbotax See Exemptions in chapter 5. Military turbotax As a dual-status taxpayer, you usually will be able to claim your own personal exemption. Military turbotax Subject to the general rules for qualification, you can claim exemptions for your spouse and dependents when you figure taxable income for the part of the year you are a resident alien. Military turbotax The amount you can claim for these exemptions is limited to your taxable income (figured before subtracting exemptions) for the part of the year you are a resident alien. Military turbotax You cannot use exemptions (other than your own) to reduce taxable income to less than zero for that period. Military turbotax If you are a nonresident alien for any part of the year, you cannot claim the earned income credit. Military turbotax See chapter 6 for more information on dual-status aliens. Military turbotax If you are a nonresident alien for any part of the year, you generally cannot claim the education credits. Military turbotax However, if you are married and choose to file a joint return with a U. Military turbotax S. Military turbotax citizen or resident spouse, you may be eligible for these credits. Military turbotax See Nonresident Spouse Treated as a Resident in chapter 1. Military turbotax Generally, services you perform as a nonresident alien temporarily in the United States as a nonimmigrant under subparagraph (F), (J), (M), or (Q) of section 101(a)(15) of the Immigration and Nationality Act are not covered under the social security program if you perform the services to carry out the purpose for which you were admitted to the United States. Military turbotax See Social Security and Medicare Taxes in chapter 8. Military turbotax If social security or Medicare taxes were withheld in error from pay that is not subject to these taxes, contact the employer who withheld the taxes for a refund. Military turbotax If you are unable to get a full refund of the amount from your employer, file a claim for refund with the Internal Revenue Service on Form 843, Claim for Refund and Request for Abatement. Military turbotax Do not use Form 843 to request a refund of Additional Medicare Tax. Military turbotax See Refund of Taxes Withheld in Error in chapter 8. Military turbotax Before leaving the United States, aliens generally must obtain a certificate of compliance. Military turbotax This document, also popularly known as the sailing permit or departure permit, is part of the income tax form you must file before leaving. Military turbotax You will receive a sailing or departure permit after filing a Form 1040-C or Form 2063. Military turbotax These forms are discussed in chapter 11. Military turbotax Form 1040-C is not an annual U. Military turbotax S. Military turbotax income tax return. Military turbotax If an income tax return is required by law, you must file that return even though you already filed a Form 1040-C. Military turbotax Chapters 5 and 7 discuss filing an annual U. Military turbotax S. Military turbotax income tax return. Military turbotax . Military turbotax I came to the United States on June 30th of last year. Military turbotax I have an H-1B Visa. Military turbotax What is my tax status, resident alien or nonresident alien? What tax return do I file? You were a dual-status alien last year. Military turbotax As a general rule, because you were in the United States for 183 days or more, you have met the substantial presence test and you are taxed as a resident. Military turbotax However, for the part of the year that you were not present in the United States, you are a nonresident. Military turbotax File Form 1040. Military turbotax Print “Dual-Status Return” across the top. Military turbotax Attach a statement showing your U. Military turbotax S. Military turbotax source income for the part of the year you were a nonresident. Military turbotax You may use Form 1040NR as the statement. Military turbotax Print “Dual-Status Statement” across the top. Military turbotax See First Year of Residency in chapter 1 for rules on determining your residency starting date. Military turbotax If you are an employee and you receive wages subject to U. Military turbotax S. Military turbotax income tax withholding, you must generally file by the 15th day of the 4th month after your tax year ends. Military turbotax If you file for the 2013 calendar year, your return is due April 15, 2014. Military turbotax If you are not an employee who receives wages subject to U. Military turbotax S. Military turbotax income tax withholding, you must file by the 15th day of the 6th month after your tax year ends. Military turbotax For the 2013 calendar year, file your return by June 16, 2014. Military turbotax For more information on when and where to file, see chapter 7 . Military turbotax A social security number (SSN) must be furnished on returns, statements, and other tax-related documents. Military turbotax If your spouse does not have and is not eligible to get an SSN, he must apply for an individual taxpayer identification number (ITIN). Military turbotax If you are a U. Military turbotax S. Military turbotax citizen or resident and you choose to treat your nonresident spouse as a resident and file a joint tax return, your nonresident spouse needs an SSN or an ITIN. Military turbotax Alien spouses who are claimed as exemptions or dependents are also required to furnish an SSN or an ITIN. Military turbotax See Identification Number in chapter 5 for more information. Military turbotax Generally, you cannot file as married filing jointly if either spouse was a nonresident alien at any time during the tax year. Military turbotax However, nonresident aliens married to U. Military turbotax S. Military turbotax citizens or residents can choose to be treated as U. Military turbotax S. Military turbotax residents and file joint returns. Military turbotax For more information on this choice, see Nonresident Spouse Treated as a Resident in chapter 1. Military turbotax Assuming both of you had these visas for all of last year, you are a resident alien. Military turbotax Your husband is a nonresident alien if he has not been in the United States as a student for more than 5 years. Military turbotax You and your husband can file a joint tax return on Form 1040, 1040A, or 1040EZ if he makes the choice to be treated as a resident for the entire year. Military turbotax See Nonresident Spouse Treated as a Resident in chapter 1. Military turbotax If your husband does not make this choice, you must file a separate return on Form 1040 or Form 1040A. Military turbotax Your husband must file Form 1040NR or 1040NR-EZ. Military turbotax No. Military turbotax A dual-resident taxpayer is one who is a resident of both the United States and another country under each country's tax laws. Military turbotax See Effect of Tax Treaties in chapter 1. Military turbotax You are a dual-status taxpayer when you are both a resident alien and a nonresident alien in the same year. Military turbotax See chapter 6 . Military turbotax The following rules apply if the dividends and capital gains are not effectively connected with a U. Military turbotax S. Military turbotax trade or business. Military turbotax Capital gains are generally not taxable if you were in the United States for less than 183 days during the year. Military turbotax See Sales or Exchanges of Capital Assets in chapter 4 for more information and exceptions. Military turbotax Dividends are generally taxed at a 30% (or lower treaty) rate. Military turbotax The brokerage company or payor of the dividends should withhold this tax at source. Military turbotax If tax is not withheld at the correct rate, you must file Form 1040NR to receive a refund or pay any additional tax due. Military turbotax If the capital gains and dividends are effectively connected with a U. Military turbotax S. Military turbotax trade or business, they are taxed according to the same rules and at the same rates that apply to U. Military turbotax S. Military turbotax citizens and residents. Military turbotax If you are a nonresident alien, 85% of any U. Military turbotax S. Military turbotax social security benefits (and the equivalent portion of tier 1 railroad retirement benefits) you receive is subject to the flat 30% tax, unless exempt, or subject to a lower treaty rate. Military turbotax See The 30% Tax in chapter 4. Military turbotax If you are a nonresident alien and the scholarship is not from U. Military turbotax S. Military turbotax sources, it is not subject to U. Military turbotax S. Military turbotax tax. Military turbotax See Scholarships, Grants, Prizes, and Awards in chapter 2 to determine whether your scholarship is from U. Military turbotax S. Military turbotax sources. Military turbotax If your scholarship is from U. Military turbotax S. Military turbotax sources or you are a resident alien, your scholarship is subject to U. Military turbotax S. Military turbotax tax according to the following rules. Military turbotax If you are a candidate for a degree, you may be able to exclude from your income the part of the scholarship you use to pay for tuition, fees, books, supplies, and equipment required by the educational institution. Military turbotax However, the part of the scholarship you use to pay for other expenses, such as room and board, is taxable. Military turbotax See Scholarships and Fellowship Grants in chapter 3 for more information. Military turbotax If you are not a candidate for a degree, your scholarship is taxable. Military turbotax Nonresident aliens cannot claim the standard deduction. Military turbotax However, see Students and business apprentices from India , under Itemized Deductions in chapter 5 for an exception. Military turbotax You cannot claim the standard deduction allowed on Form 1040. Military turbotax However, you can itemize any allowable deductions. Military turbotax Nonresident aliens can claim some of the same itemized deductions that resident aliens can claim. Military turbotax However, nonresident aliens can claim itemized deductions only if they have income effectively connected with their U. Military turbotax S. Military turbotax trade or business. Military turbotax See Itemized Deductions in chapter 5. Military turbotax Resident aliens can claim personal exemptions and exemptions for dependents in the same way as U. Military turbotax S. Military turbotax citizens. Military turbotax However, nonresident aliens generally can claim only a personal exemption for themselves on their U. Military turbotax S. Military turbotax tax return. Military turbotax There are special rules for residents of Mexico, Canada, and South Korea; for U. Military turbotax S. Military turbotax nationals; and for students and business apprentices from India. Military turbotax See Exemptions in chapter 5. Military turbotax As a dual-status taxpayer, you usually will be able to claim your own personal exemption. Military turbotax Subject to the general rules for qualification, you can claim exemptions for your spouse and dependents when you figure taxable income for the part of the year you are a resident alien. Military turbotax The amount you can claim for these exemptions is limited to your taxable income (figured before subtracting exemptions) for the part of the year you are a resident alien. Military turbotax You cannot use exemptions (other than your own) to reduce taxable income to less than zero for that period. Military turbotax If you are a nonresident alien for any part of the year, you cannot claim the earned income credit. Military turbotax See chapter 6 for more information on dual-status aliens. Military turbotax If you are a nonresident alien for any part of the year, you generally cannot claim the education credits. Military turbotax However, if you are married and choose to file a joint return with a U. Military turbotax S. Military turbotax citizen or resident spouse, you may be eligible for these credits. Military turbotax See Nonresident Spouse Treated as a Resident in chapter 1. Military turbotax Generally, services you perform as a nonresident alien temporarily in the United States as a nonimmigrant under subparagraph (F), (J), (M), or (Q) of section 101(a)(15) of the Immigration and Nationality Act are not covered under the social security program if you perform the services to carry out the purpose for which you were admitted to the United States. Military turbotax See Social Security and Medicare Taxes in chapter 8. Military turbotax If social security or Medicare taxes were withheld in error from pay that is not subject to these taxes, contact the employer who withheld the taxes for a refund. Military turbotax If you are unable to get a full refund of the amount from your employer, file a claim for refund with the Internal Revenue Service on Form 843, Claim for Refund and Request for Abatement. Military turbotax Do not use Form 843 to request a refund of Additional Medicare Tax. Military turbotax See Refund of Taxes Withheld in Error in chapter 8. Military turbotax Before leaving the United States, aliens generally must obtain a certificate of compliance. Military turbotax This document, also popularly known as the sailing permit or departure permit, is part of the income tax form you must file before leaving. Military turbotax You will receive a sailing or departure permit after filing a Form 1040-C or Form 2063. Military turbotax These forms are discussed in chapter 11. Military turbotax Form 1040-C is not an annual U. Military turbotax S. Military turbotax income tax return. Military turbotax If an income tax return is required by law, you must file that return even though you already filed a Form 1040-C. Military turbotax Chapters 5 and 7 discuss filing an annual U. Military turbotax S. Military turbotax income tax return. Military turbotax . Military turbotax When is my Form 1040NR due? If you are an employee and you receive wages subject to U. Military turbotax S. Military turbotax income tax withholding, you must generally file by the 15th day of the 4th month after your tax year ends. Military turbotax If you file for the 2013 calendar year, your return is due April 15, 2014. Military turbotax If you are not an employee who receives wages subject to U. Military turbotax S. Military turbotax income tax withholding, you must file by the 15th day of the 6th month after your tax year ends. Military turbotax For the 2013 calendar year, file your return by June 16, 2014. Military turbotax For more information on when and where to file, see chapter 7 . Military turbotax A social security number (SSN) must be furnished on returns, statements, and other tax-related documents. Military turbotax If your spouse does not have and is not eligible to get an SSN, he must apply for an individual taxpayer identification number (ITIN). Military turbotax If you are a U. Military turbotax S. Military turbotax citizen or resident and you choose to treat your nonresident spouse as a resident and file a joint tax return, your nonresident spouse needs an SSN or an ITIN. Military turbotax Alien spouses who are claimed as exemptions or dependents are also required to furnish an SSN or an ITIN. Military turbotax See Identification Number in chapter 5 for more information. Military turbotax Generally, you cannot file as married filing jointly if either spouse was a nonresident alien at any time during the tax year. Military turbotax However, nonresident aliens married to U. Military turbotax S. Military turbotax citizens or residents can choose to be treated as U. Military turbotax S. Military turbotax residents and file joint returns. Military turbotax For more information on this choice, see Nonresident Spouse Treated as a Resident in chapter 1. Military turbotax Assuming both of you had these visas for all of last year, you are a resident alien. Military turbotax Your husband is a nonresident alien if he has not been in the United States as a student for more than 5 years. Military turbotax You and your husband can file a joint tax return on Form 1040, 1040A, or 1040EZ if he makes the choice to be treated as a resident for the entire year. Military turbotax See Nonresident Spouse Treated as a Resident in chapter 1. Military turbotax If your husband does not make this choice, you must file a separate return on Form 1040 or Form 1040A. Military turbotax Your husband must file Form 1040NR or 1040NR-EZ. Military turbotax No. Military turbotax A dual-resident taxpayer is one who is a resident of both the United States and another country under each country's tax laws. Military turbotax See Effect of Tax Treaties in chapter 1. Military turbotax You are a dual-status taxpayer when you are both a resident alien and a nonresident alien in the same year. Military turbotax See chapter 6 . Military turbotax The following rules apply if the dividends and capital gains are not effectively connected with a U. Military turbotax S. Military turbotax trade or business. Military turbotax Capital gains are generally not taxable if you were in the United States for less than 183 days during the year. Military turbotax See Sales or Exchanges of Capital Assets in chapter 4 for more information and exceptions. Military turbotax Dividends are generally taxed at a 30% (or lower treaty) rate. Military turbotax The brokerage company or payor of the dividends should withhold this tax at source. Military turbotax If tax is not withheld at the correct rate, you must file Form 1040NR to receive a refund or pay any additional tax due. Military turbotax If the capital gains and dividends are effectively connected with a U. Military turbotax S. Military turbotax trade or business, they are taxed according to the same rules and at the same rates that apply to U. Military turbotax S. Military turbotax citizens and residents. Military turbotax If you are a nonresident alien, 85% of any U. Military turbotax S. Military turbotax social security benefits (and the equivalent portion of tier 1 railroad retirement benefits) you receive is subject to the flat 30% tax, unless exempt, or subject to a lower treaty rate. Military turbotax See The 30% Tax in chapter 4. Military turbotax If you are a nonresident alien and the scholarship is not from U. Military turbotax S. Military turbotax sources, it is not subject to U. Military turbotax S. Military turbotax tax. Military turbotax See Scholarships, Grants, Prizes, and Awards in chapter 2 to determine whether your scholarship is from U. Military turbotax S. Military turbotax sources. Military turbotax If your scholarship is from U. Military turbotax S. Military turbotax sources or you are a resident alien, your scholarship is subject to U. Military turbotax S. Military turbotax tax according to the following rules. Military turbotax If you are a candidate for a degree, you may be able to exclude from your income the part of the scholarship you use to pay for tuition, fees, books, supplies, and equipment required by the educational institution. Military turbotax However, the part of the scholarship you use to pay for other expenses, such as room and board, is taxable. Military turbotax See Scholarships and Fellowship Grants in chapter 3 for more information. Military turbotax If you are not a candidate for a degree, your scholarship is taxable. Military turbotax Nonresident aliens cannot claim the standard deduction. Military turbotax However, see Students and business apprentices from India , under Itemized Deductions in chapter 5 for an exception. Military turbotax You cannot claim the standard deduction allowed on Form 1040. Military turbotax However, you can itemize any allowable deductions. Military turbotax Nonresident aliens can claim some of the same itemized deductions that resident aliens can claim. Military turbotax However, nonresident aliens can claim itemized deductions only if they have income effectively connected with their U. Military turbotax S. Military turbotax trade or business. Military turbotax See Itemized Deductions in chapter 5. Military turbotax Resident aliens can claim personal exemptions and exemptions for dependents in the same way as U. Military turbotax S. Military turbotax citizens. Military turbotax However, nonresident aliens generally can claim only a personal exemption for themselves on their U. Military turbotax S. Military turbotax tax return. Military turbotax There are special rules for residents of Mexico, Canada, and South Korea; for U. Military turbotax S. Military turbotax nationals; and for students and business apprentices from India. Military turbotax See Exemptions in chapter 5. Military turbotax As a dual-status taxpayer, you usually will be able to claim your own personal exemption. Military turbotax Subject to the general rules for qualification, you can claim exemptions for your spouse and dependents when you figure taxable income for the part of the year you are a resident alien. Military turbotax The amount you can claim for these exemptions is limited to your taxable income (figured before subtracting exemptions) for the part of the year you are a resident alien. Military turbotax You cannot use exemptions (other than your own) to reduce taxable income to less than zero for that period. Military turbotax If you are a nonresident alien for any part of the year, you cannot claim the earned income credit. Military turbotax See chapter 6 for more information on dual-status aliens. Military turbotax If you are a nonresident alien for any part of the year, you generally cannot claim the education credits. Military turbotax However, if you are married and choose to file a joint return with a U. Military turbotax S. Military turbotax citizen or resident spouse, you may be eligible for these credits. Military turbotax See Nonresident Spouse Treated as a Resident in chapter 1. Military turbotax Generally, services you perform as a nonresident alien temporarily in the United States as a nonimmigrant under subparagraph (F), (J), (M), or (Q) of section 101(a)(15) of the Immigration and Nationality Act are not covered under the social security program if you perform the services to carry out the purpose