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Prior Year Tax Returns

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Prior Year Tax Returns

Prior year tax returns 4. Prior year tax returns   How Income of Aliens Is Taxed Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: Resident Aliens Nonresident AliensTrade or Business in the United States Effectively Connected Income The 30% Tax Income From Real Property Transportation Tax Interrupted Period of Residence Expatriation TaxExpatriation Before June 4, 2004 Expatriation After June 3, 2004, and Before June 17, 2008 Expatriation After June 16, 2008 Introduction Resident and nonresident aliens are taxed in different ways. Prior year tax returns Resident aliens are generally taxed in the same way as U. Prior year tax returns S. Prior year tax returns citizens. Prior year tax returns Nonresident aliens are taxed based on the source of their income and whether or not their income is effectively connected with a U. Prior year tax returns S. Prior year tax returns trade or business. Prior year tax returns The following discussions will help you determine if income you receive during the tax year is effectively connected with a U. Prior year tax returns S. Prior year tax returns trade or business and how it is taxed. Prior year tax returns Topics - This chapter discusses: Income that is effectively connected with a U. Prior year tax returns S. Prior year tax returns trade or business. Prior year tax returns Income that is not effectively connected with a U. Prior year tax returns S. Prior year tax returns trade or business. Prior year tax returns Interrupted period of residence. Prior year tax returns Expatriation tax. Prior year tax returns Useful Items - You may want to see: Publication 544 Sales and Other Dispositions of Assets 1212 List of Original Issue Discount Instruments Form (and Instructions) 6251 Alternative Minimum Tax—Individuals Schedule D (Form 1040) Capital Gains and Losses See chapter 12 for information about getting these publications and forms. Prior year tax returns Resident Aliens Resident aliens are generally taxed in the same way as U. Prior year tax returns S. Prior year tax returns citizens. Prior year tax returns This means that their worldwide income is subject to U. Prior year tax returns S. Prior year tax returns tax and must be reported on their U. Prior year tax returns S. Prior year tax returns tax return. Prior year tax returns Income of resident aliens is subject to the graduated tax rates that apply to U. Prior year tax returns S. Prior year tax returns citizens. Prior year tax returns Resident aliens use the Tax Table or Tax Computation Worksheets located in the Form 1040 instructions, which apply to U. Prior year tax returns S. Prior year tax returns citizens. Prior year tax returns Nonresident Aliens A nonresident alien's income that is subject to U. Prior year tax returns S. Prior year tax returns income tax must be divided into two categories: 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 (discussed under The 30% Tax, later). Prior year tax returns The difference between these two categories is that effectively connected income, after allowable deductions, is taxed at graduated rates. Prior year tax returns These are the same rates that apply to U. Prior year tax returns S. Prior year tax returns citizens and residents. Prior year tax returns Income that is not effectively connected is taxed at a flat 30% (or lower treaty) rate. Prior year tax returns If you were formerly a U. Prior year tax returns S. Prior year tax returns citizen or resident alien, these rules may not apply. Prior year tax returns See Expatriation Tax, later, in this chapter. Prior year tax returns Trade or Business in the United States Generally, you must be engaged in a trade or business during the tax year to be able to treat income received in that year as effectively connected with that trade or business. Prior year tax returns Whether you are engaged in a trade or business in the United States depends on the nature of your activities. Prior year tax returns The discussions that follow will help you determine whether you are engaged in a trade or business in the United States. Prior year tax returns Personal Services If you perform personal services in the United States at any time during the tax year, you usually are considered engaged in a trade or business in the United States. Prior year tax returns Certain compensation paid to a nonresident alien by a foreign employer is not included in gross income. Prior year tax returns For more information, see Services Performed for Foreign Employer in chapter 3. Prior year tax returns Other Trade or Business Activities Other examples of being engaged in a trade or business in the United States follow. Prior year tax returns Students and trainees. Prior year tax returns   You are considered engaged in a trade or business in the United States if you are temporarily present in the United States as a nonimmigrant under an “F,” “J,” “M,” or “Q” visa. Prior year tax returns A nonresident alien temporarily present in the United States under a “J” visa includes a nonresident alien individual admitted to the United States as an exchange visitor under the Mutual Educational and Cultural Exchange Act of 1961. Prior year tax returns The taxable part of any scholarship or fellowship grant that is U. Prior year tax returns S. Prior year tax returns source income is treated as effectively connected with a trade or business in the United States. Prior year tax returns Business operations. Prior year tax returns   If you own and operate a business in the United States selling services, products, or merchandise, you are, with certain exceptions, engaged in a trade or business in the United States. Prior year tax returns Partnerships. Prior year tax returns   If you are a member of a partnership that at any time during the tax year is engaged in a trade or business in the United States, you are considered to be engaged in a trade or business in the United States. Prior year tax returns Beneficiary of an estate or trust. Prior year tax returns   If you are the beneficiary of an estate or trust that is engaged in a trade or business in the United States, you are treated as being engaged in the same trade or business. Prior year tax returns Trading in stocks, securities, and commodities. Prior year tax returns   If your only U. Prior year tax returns S. Prior year tax returns business activity is trading in stocks, securities, or commodities (including hedging transactions) through a U. Prior year tax returns S. Prior year tax returns resident broker or other agent, you are not engaged in a trade or business in the United States. Prior year tax returns   For transactions in stocks or securities, this applies to any nonresident alien, including a dealer or broker in stocks and securities. Prior year tax returns   For transactions in commodities, this applies to commodities that are usually traded on an organized commodity exchange and to transactions that are usually carried out at such an exchange. Prior year tax returns   This discussion does not apply if you have a U. Prior year tax returns S. Prior year tax returns office or other fixed place of business at any time during the tax year through which, or by the direction of which, you carry out your transactions in stocks, securities, or commodities. Prior year tax returns Trading for a nonresident alien's own account. Prior year tax returns   You are not engaged in a trade or business in the United States if trading for your own account in stocks, securities, or commodities is your only U. Prior year tax returns S. Prior year tax returns business activity. Prior year tax returns This applies even if the trading takes place while you are present in the United States or is done by your employee or your broker or other agent. Prior year tax returns   This does not apply to trading for your own account if you are a dealer in stocks, securities, or commodities. Prior year tax returns This does not necessarily mean, however, that as a dealer you are considered to be engaged in a trade or business in the United States. Prior year tax returns Determine that based on the facts and circumstances in each case or under the rules given above in Trading in stocks, securities, and commodities . Prior year tax returns Effectively Connected Income If you are engaged in a U. Prior year tax returns S. Prior year tax returns trade or business, all income, gain, or loss for the tax year that you get from sources within the United States (other than certain investment income) is treated as effectively connected income. Prior year tax returns This applies whether or not there is any connection between the income and the trade or business being carried on in the United States during the tax year. Prior year tax returns Two tests, described next under Investment Income, determine whether certain items of investment income (such as interest, dividends, and royalties) are treated as effectively connected with that business. Prior year tax returns In limited circumstances, some kinds of foreign source income may be treated as effectively connected with a trade or business in the United States. Prior year tax returns For a discussion of these rules, see Foreign Income , later. Prior year tax returns Investment Income Investment income from U. Prior year tax returns S. Prior year tax returns sources that may or may not be treated as effectively connected with a U. Prior year tax returns S. Prior year tax returns trade or business generally falls into the following three categories. Prior year tax returns Fixed or determinable income (interest, dividends, rents, royalties, premiums, annuities, etc. Prior year tax returns ). Prior year tax returns Gains (some of which are considered capital gains) from the sale or exchange of the following types of property. Prior year tax returns Timber, coal, or domestic iron ore with a retained economic interest. Prior year tax returns Patents, copyrights, and similar property on which you receive contingent payments after October 4, 1966. Prior year tax returns Patents transferred before October 5, 1966. Prior year tax returns Original issue discount obligations. Prior year tax returns Capital gains (and losses). Prior year tax returns Use the two tests, described next, to determine whether an item of U. Prior year tax returns S. Prior year tax returns source income falling in one of the three categories above and received during the tax year is effectively connected with your U. Prior year tax returns S. Prior year tax returns trade or business. Prior year tax returns If the tests indicate that the item of income is effectively connected, you must include it with your other effectively connected income. Prior year tax returns If the item of income is not effectively connected, include it with all other income discussed under The 30% Tax later, in this chapter. Prior year tax returns Asset-use test. Prior year tax returns   This test usually applies to income that is not directly produced by trade or business activities. Prior year tax returns Under this test, if an item of income is from assets (property) used in, or held for use in, the trade or business in the United States, it is considered effectively connected. Prior year tax returns   An asset is used in, or held for use in, the trade or business in the United States if the asset is: Held for the principal purpose of promoting the conduct of a trade or business in the United States, Acquired and held in the ordinary course of the trade or business conducted in the United States (for example, an account receivable or note receivable arising from that trade or business), or Otherwise held to meet the present needs of the trade or business in the United States and not its anticipated future needs. Prior year tax returns Generally, stock of a corporation is not treated as an asset used in, or held for use in, a trade or business in the United States. Prior year tax returns Business-activities test. Prior year tax returns   This test usually applies when income, gain, or loss comes directly from the active conduct of the trade or business. Prior year tax returns The business-activities test is most important when: Dividends or interest are received by a dealer in stocks or securities, Royalties are received in the trade or business of licensing patents or similar property, or Service fees are earned by a servicing business. Prior year tax returns Under this test, if the conduct of the U. Prior year tax returns S. Prior year tax returns trade or business was a material factor in producing the income, the income is considered effectively connected. Prior year tax returns Personal Service Income You usually are engaged in a U. Prior year tax returns S. Prior year tax returns trade or business when you perform personal services in the United States. Prior year tax returns Personal service income you receive in a tax year in which you are engaged in a U. Prior year tax returns S. Prior year tax returns trade or business is effectively connected with a U. Prior year tax returns S. Prior year tax returns trade or business. Prior year tax returns Income received in a year other than the year you performed the services is also effectively connected if it would have been effectively connected if received in the year you performed the services. Prior year tax returns Personal service income includes wages, salaries, commissions, fees, per diem allowances, and employee allowances and bonuses. Prior year tax returns The income may be paid to you in the form of cash, services, or property. Prior year tax returns If you are engaged in a U. Prior year tax returns S. Prior year tax returns trade or business only because you perform personal services in the United States during the tax year, income and gains from assets, and gains and losses from the sale or exchange of capital assets are generally not effectively connected with your trade or business. Prior year tax returns However, if there is a direct economic relationship between your holding of the asset and your trade or business of performing personal services, the income, gain, or loss is effectively connected. Prior year tax returns Pensions. Prior year tax returns   If you were a nonresident alien engaged in a U. Prior year tax returns S. Prior year tax returns trade or business after 1986 because you performed personal services in the United States, and you later receive a pension or retirement pay attributable to these services, such payments are effectively connected income in each year you receive them. Prior year tax returns This is true whether or not you are engaged in a U. Prior year tax returns S. Prior year tax returns trade or business in the year you receive the retirement pay. Prior year tax returns Transportation Income Transportation income (defined in chapter 2) is effectively connected if you meet both of the following conditions. Prior year tax returns You had a fixed place of business in the United States involved in earning the income. Prior year tax returns At least 90% of your U. Prior year tax returns S. Prior year tax returns source transportation income is attributable to regularly scheduled transportation. Prior year tax returns “Fixed place of business” generally means a place, site, structure, or other similar facility through which you engage in a trade or business. Prior year tax returns “Regularly scheduled transportation” means that a ship or aircraft follows a published schedule with repeated sailings or flights at regular intervals between the same points for voyages or flights that begin or end in the United States. Prior year tax returns This definition applies to both scheduled and chartered air transportation. Prior year tax returns If you do not meet the two conditions above, the income is not effectively connected and is taxed at a 4% rate. Prior year tax returns See Transportation Tax, later, in this chapter. Prior year tax returns Business Profits and Losses and Sales Transactions All profits or losses from U. Prior year tax returns S. Prior year tax returns sources that are from the operation of a business in the United States are effectively connected with a trade or business in the United States. Prior year tax returns For example, profit from the sale in the United States of inventory property purchased either in this country or in a foreign country is effectively connected trade or business income. Prior year tax returns A share of U. Prior year tax returns S. Prior year tax returns source profits or losses of a partnership that is engaged in a trade or business in the United States is also effectively connected with a trade or business in the United States. Prior year tax returns Real Property Gain or Loss Gains and losses from the sale or exchange of U. Prior year tax returns S. Prior year tax returns real property interests (whether or not they are capital assets) are taxed as if you are engaged in a trade or business in the United States. Prior year tax returns You must treat the gain or loss as effectively connected with that trade or business. Prior year tax returns U. Prior year tax returns S. Prior year tax returns real property interest. Prior year tax returns   This is any interest in real property located in the United States or the U. Prior year tax returns S. Prior year tax returns Virgin Islands or any interest (other than as a creditor) in a domestic corporation that is a U. Prior year tax returns S. Prior year tax returns real property holding corporation. Prior year tax returns Real property includes the following. Prior year tax returns Land and unsevered natural products of the land, such as growing crops and timber, and mines, wells, and other natural deposits. Prior year tax returns Improvements on land, including buildings, other permanent structures, and their structural components. Prior year tax returns Personal property associated with the use of real property, such as equipment used in farming, mining, forestry, or construction or property used in lodging facilities or rented office space, unless the personal property is: Disposed of more than one year before or after the disposition of the real property, or Separately sold to persons unrelated either to the seller or to the buyer of the real property. Prior year tax returns U. Prior year tax returns S. Prior year tax returns real property holding corporation. Prior year tax returns   A corporation is a U. Prior year tax returns S. Prior year tax returns real property holding corporation if the fair market value of the corporation's U. Prior year tax returns S. Prior year tax returns real property interests are at least 50% of the total fair market value of: The corporation's U. Prior year tax returns S. Prior year tax returns real property interests, plus The corporation's interests in real property located outside the United States, plus The corporation's other assets that are used in, or held for use in, a trade or business. Prior year tax returns   Gain or loss on the sale of the stock in any domestic corporation is taxed as if you are engaged in a U. Prior year tax returns S. Prior year tax returns trade or business unless you establish that the corporation is not a U. Prior year tax returns S. Prior year tax returns real property holding corporation. Prior year tax returns   A U. Prior year tax returns S. Prior year tax returns real property interest does not include a class of stock of a corporation that is regularly traded on an established securities market, unless you hold more than 5% of the fair market value of that class of stock. Prior year tax returns An interest in a foreign corporation owning U. Prior year tax returns S. Prior year tax returns real property generally is not a U. Prior year tax returns S. Prior year tax returns real property interest unless the corporation chooses to be treated as a domestic corporation. Prior year tax returns Qualified investment entities. Prior year tax returns   Special rules apply to qualified investment entities (QIEs). Prior year tax returns A QIE is any real estate investment trust (REIT) or any regulated investment company (RIC) that is a U. Prior year tax returns S. Prior year tax returns real property holding corporation. Prior year tax returns    Generally, any distribution from a QIE to a shareholder that is attributable to gain from the sale or exchange of a U. Prior year tax returns S. Prior year tax returns real property interest is treated as a U. Prior year tax returns S. Prior year tax returns real property gain by the shareholder receiving the distribution. Prior year tax returns A distribution by a QIE on stock regularly traded on an established securities market in the United States is not treated as gain from the sale or exchange of a U. Prior year tax returns S. Prior year tax returns real property interest if you did not own more than 5% of that stock at any time during the 1-year period ending on the date of the distribution. Prior year tax returns A distribution that you do not treat as gain from the sale or exchange of a U. Prior year tax returns S. Prior year tax returns real property interest is included in your gross income as a regular dividend. Prior year tax returns Note. Prior year tax returns Beginning January 1, 2014 (unless extended by legislation), a RIC that is a U. Prior year tax returns S. Prior year tax returns real property holding corporation will only be treated as a QIE for certain distributions from the RIC that are directly or indirectly attributable to distributions received by the RIC from a REIT. Prior year tax returns Domestically controlled QIE. Prior year tax returns   The sale of an interest in a domestically controlled QIE is not the sale of a U. Prior year tax returns S. Prior year tax returns real property interest. Prior year tax returns The entity is domestically controlled if at all times during the testing period less than 50% in value of its stock was held, directly or indirectly, by foreign persons. Prior year tax returns The testing period is the shorter of (a) the 5-year period ending on the date of disposition, or (b) the period during which the entity was in existence. Prior year tax returns Wash sale. Prior year tax returns    If you dispose of an interest in a domestically controlled QIE in an applicable wash sale transaction, special rules apply. Prior year tax returns An applicable wash sale transaction is one in which you: Dispose of an interest in the domestically controlled QIE during the 30-day period before the ex-dividend date of a distribution that you would (but for the disposition) have treated as gain from the sale or exchange of a U. Prior year tax returns S. Prior year tax returns real property interest, and Acquire, or enter into a contract or option to acquire, a substantially identical interest in that entity during the 61-day period that began on the first day of the 30-day period. Prior year tax returns If this occurs, you are treated as having gain from the sale or exchange of a U. Prior year tax returns S. Prior year tax returns real property interest in an amount equal to the distribution made after June 15, 2006, that would have been treated as such gain. Prior year tax returns This also applies to any substitute dividend payment. Prior year tax returns   A transaction is not treated as an applicable wash sale transaction if: You actually receive the distribution from the domestically controlled QIE related to the interest disposed of, or acquired, in the transaction, or You dispose of any class of stock in a QIE that is regularly traded on an established securities market in the United States but only if you did not own more than 5% of that class of stock at any time during the 1-year period ending on the date of the distribution. Prior year tax returns Alternative minimum tax. Prior year tax returns   There may be a minimum tax on your net gain from the disposition of U. Prior year tax returns S. Prior year tax returns real property interests. Prior year tax returns Figure the amount of this tax, if any, on Form 6251. Prior year tax returns Withholding of tax. Prior year tax returns   If you dispose of a U. Prior year tax returns S. Prior year tax returns real property interest, the buyer may have to withhold tax. Prior year tax returns See the discussion of Tax Withheld on Real Property Sales in chapter 8. Prior year tax returns Foreign Income You must treat three kinds of foreign source income as effectively connected with a trade or business in the United States if: You have an office or other fixed place of business in the United States to which the income can be attributed, That office or place of business is a material factor in producing the income, and The income is produced in the ordinary course of the trade or business carried on through that office or other fixed place of business. Prior year tax returns An office or other fixed place of business is a material factor if it significantly contributes to, and is an essential economic element in, the earning of the income. Prior year tax returns The three kinds of foreign source income are listed below. Prior year tax returns Rents and royalties for the use of, or for the privilege of using, intangible personal property located outside the United States or from any interest in such property. Prior year tax returns Included are rents or royalties for the use, or for the privilege of using, outside the United States, patents, copyrights, secret processes and formulas, goodwill, trademarks, trade brands, franchises, and similar properties if the rents or royalties are from the active conduct of a trade or business in the United States. Prior year tax returns Dividends, interest, or amounts received for the provision of a guarantee of indebtedness issued after September 27, 2010, from the active conduct of a banking, financing, or similar business in the United States. Prior year tax returns A substitute dividend or interest payment received under a securities lending transaction or a sale-repurchase transaction is treated the same as the amounts received on the transferred security. Prior year tax returns Income, gain, or loss from the sale outside the United States, through the U. Prior year tax returns S. Prior year tax returns office or other fixed place of business, of: Stock in trade, Property that would be included in inventory if on hand at the end of the tax year, or Property held primarily for sale to customers in the ordinary course of business. Prior year tax returns Item (3) will not apply if you sold the property for use, consumption, or disposition outside the United States and an office or other fixed place of business in a foreign country was a material factor in the sale. Prior year tax returns Any foreign source income that is equivalent to any item of income described above is treated as effectively connected with a U. Prior year tax returns S. Prior year tax returns trade or business. Prior year tax returns For example, foreign source interest and dividend equivalents are treated as U. Prior year tax returns S. Prior year tax returns effectively connected income if the income is derived by a foreign person in the active conduct of a banking, financing, or similar business within the United States. Prior year tax returns Tax on Effectively Connected Income Income you receive during the tax year that is effectively connected with your trade or business in the United States is, after allowable deductions, taxed at the rates that apply to U. Prior year tax returns S. Prior year tax returns citizens and residents. Prior year tax returns Generally, you can receive effectively connected income only if you are a nonresident alien engaged in trade or business in the United States during the tax year. Prior year tax returns However, income you receive from the sale or exchange of property, the performance of services, or any other transaction in another tax year is treated as effectively connected in that year if it would have been effectively connected in the year the transaction took place or you performed the services. Prior year tax returns Example. Prior year tax returns Ted Richards, a nonresident alien, entered the United States in August 2012, to perform personal services in the U. Prior year tax returns S. Prior year tax returns office of his overseas employer. Prior year tax returns He worked in the U. Prior year tax returns S. Prior year tax returns office until December 25, 2012, but did not leave this country until January 11, 2013. Prior year tax returns On January 8, 2013, he received his final paycheck for services performed in the United States during 2012. Prior year tax returns All of Ted's income during his stay here is U. Prior year tax returns S. Prior year tax returns source income. Prior year tax returns During 2012, Ted was engaged in the trade or business of performing personal services in the United States. Prior year tax returns Therefore, all amounts paid to him in 2012 for services performed in the United States during 2012 are effectively connected with that trade or business during 2012. Prior year tax returns The salary payment Ted received in January 2013 is U. Prior year tax returns S. Prior year tax returns source income to him in 2013. Prior year tax returns It is effectively connected with a trade or business in the United States because he was engaged in a trade or business in the United States during 2012 when he performed the services that earned the income. Prior year tax returns Real property income. Prior year tax returns   You may be able to choose to treat all income from real property as effectively connected. Prior year tax returns See Income From Real Property , later, in this chapter. Prior year tax returns The 30% Tax Tax at a 30% (or lower treaty) rate applies to certain items of income or gains from U. Prior year tax returns S. Prior year tax returns sources but only if the items are not effectively connected with your U. Prior year tax returns S. Prior year tax returns trade or business. Prior year tax returns Fixed or Determinable Income The 30% (or lower treaty) rate applies to the gross amount of U. Prior year tax returns S. Prior year tax returns source fixed or determinable annual or periodic gains, profits, or income. Prior year tax returns Income is fixed when it is paid in amounts known ahead of time. Prior year tax returns Income is determinable whenever there is a basis for figuring the amount to be paid. Prior year tax returns Income can be periodic if it is paid from time to time. Prior year tax returns It does not have to be paid annually or at regular intervals. Prior year tax returns Income can be determinable or periodic even if the length of time during which the payments are made is increased or decreased. Prior year tax returns Items specifically included as fixed or determinable income are interest (other than original issue discount), dividends, dividend equivalent payments (defined in chapter 2), rents, premiums, annuities, salaries, wages, and other compensation. Prior year tax returns A substitute dividend or interest payment received under a securities lending transaction or a sale-repurchase transaction is treated the same as the amounts received on the transferred security. Prior year tax returns Other items of income, such as royalties, also may be subject to the 30% tax. Prior year tax returns Some fixed or determinable income may be exempt from U. Prior year tax returns S. Prior year tax returns tax. Prior year tax returns See chapter 3 if you are not sure whether the income is taxable. Prior year tax returns Original issue discount (OID). Prior year tax returns   If you sold, exchanged, or received a payment on a bond or other debt instrument that was issued at a discount after March 31, 1972, all or part of the original issue discount (OID) (other than portfolio interest) may be subject to the 30% tax. Prior year tax returns The amount of OID is the difference between the stated redemption price at maturity and the issue price of the debt instrument. Prior year tax returns The 30% tax applies in the following circumstances. Prior year tax returns You received a payment on a debt instrument. Prior year tax returns In this case, the amount of OID subject to tax is the OID that accrued while you held the debt instrument minus the OID previously taken into account. Prior year tax returns But the tax on the OID cannot be more than the payment minus the tax on the interest payment on the debt instrument. Prior year tax returns You sold or exchanged the debt instrument. Prior year tax returns The amount of OID subject to tax is the OID that accrued while you held the debt instrument minus the amount already taxed in (1) above. Prior year tax returns   Report on your return the amount of OID shown on Form 1042-S, Foreign Person's U. Prior year tax returns S. Prior year tax returns Source Income Subject to Withholding, if you bought the debt instrument at original issue. Prior year tax returns However, you must recompute your proper share of OID shown on Form 1042-S if any of the following apply. Prior year tax returns You bought the debt instrument at a premium or paid an acquisition premium. Prior year tax returns The debt instrument is a stripped bond or a stripped coupon (including zero coupon instruments backed by U. Prior year tax returns S. Prior year tax returns Treasury securities). Prior year tax returns The debt instrument is a contingent payment or inflation-indexed debt instrument. Prior year tax returns For the definition of premium and acquisition premium and instructions on how to recompute OID, get Publication 1212. Prior year tax returns   If you held a bond or other debt instrument that was issued at a discount before April 1, 1972, contact the IRS for further information. Prior year tax returns See chapter 12. Prior year tax returns Gambling Winnings In general, nonresident aliens are subject to the 30% tax on the gross proceeds from gambling won in the United States if that income is not effectively connected with a U. Prior year tax returns S. Prior year tax returns trade or business and is not exempted by treaty. Prior year tax returns However, no tax is imposed on nonbusiness gambling income a nonresident alien wins playing blackjack, baccarat, craps, roulette, or big-6 wheel in the United States. Prior year tax returns Nonresident aliens are taxed at graduated rates on net gambling income won in the United States that is effectively connected with a U. Prior year tax returns S. Prior year tax returns trade or business. Prior year tax returns Social Security Benefits A nonresident alien must include 85% of any U. Prior year tax returns S. Prior year tax returns social security benefit (and the social security equivalent part of a tier 1 railroad retirement benefit) in U. Prior year tax returns S. Prior year tax returns source fixed or determinable annual or periodic income. Prior year tax returns Social security benefits include monthly retirement, survivor, and disability benefits. Prior year tax returns This income is exempt under some tax treaties. Prior year tax returns See Table 1 in Publication 901, U. Prior year tax returns S. Prior year tax returns Tax Treaties, for a list of tax treaties that exempt U. Prior year tax returns S. Prior year tax returns social security benefits from U. Prior year tax returns S. Prior year tax returns tax. Prior year tax returns Sales or Exchanges of Capital Assets These rules apply only to those capital gains and losses from sources in the United States that are not effectively connected with a trade or business in the United States. Prior year tax returns They apply even if you are engaged in a trade or business in the United States. Prior year tax returns These rules do not apply to the sale or exchange of a U. Prior year tax returns S. Prior year tax returns real property interest or to the sale of any property that is effectively connected with a trade or business in the United States. Prior year tax returns See Real Property Gain or Loss , earlier, under Effectively Connected Income. Prior year tax returns A capital asset is everything you own except: Inventory. Prior year tax returns Business accounts or notes receivable. Prior year tax returns Depreciable property used in a trade or business. Prior year tax returns Real property used in a trade or business. Prior year tax returns Supplies regularly used in a trade or business. Prior year tax returns Certain copyrights, literary or musical or artistic compositions, letters or memoranda, or similar property. Prior year tax returns Certain U. Prior year tax returns S. Prior year tax returns government publications. Prior year tax returns Certain commodities derivative financial instruments held by a commodities derivatives dealer. Prior year tax returns Hedging transactions. Prior year tax returns A capital gain is a gain on the sale or exchange of a capital asset. Prior year tax returns A capital loss is a loss on the sale or exchange of a capital asset. Prior year tax returns If the sale is in foreign currency, for the purpose of determining gain, the cost and selling price of the property should be expressed in U. Prior year tax returns S. Prior year tax returns currency at the rate of exchange prevailing as of the date of the purchase and date of the sale, respectively. Prior year tax returns You may want to read Publication 544. Prior year tax returns However, use Publication 544 only to determine what is a sale or exchange of a capital asset, or what is treated as such. Prior year tax returns Specific tax treatment that applies to U. Prior year tax returns S. Prior year tax returns citizens or residents generally does not apply to you. Prior year tax returns The following gains are subject to the 30% (or lower treaty) rate without regard to the 183-day rule, discussed later. Prior year tax returns Gains on the disposal of timber, coal, or domestic iron ore with a retained economic interest. Prior year tax returns Gains on contingent payments received from the sale or exchange of patents, copyrights, and similar property after October 4, 1966. Prior year tax returns Gains on certain transfers of all substantial rights to, or an undivided interest in, patents if the transfers were made before October 5, 1966. Prior year tax returns Gains on the sale or exchange of original issue discount obligations. Prior year tax returns Gains in (1) are not subject to the 30% (or lower treaty) rate if you choose to treat the gains as effectively connected with a U. Prior year tax returns S. Prior year tax returns trade or business. Prior year tax returns See Income From Real Property , later. Prior year tax returns 183-day rule. Prior year tax returns   If you were in the United States for 183 days or more during the tax year, your net gain from sales or exchanges of capital assets is taxed at a 30% (or lower treaty) rate. Prior year tax returns For purposes of the 30% (or lower treaty) rate, net gain is the excess of your capital gains from U. Prior year tax returns S. Prior year tax returns sources over your capital losses from U. Prior year tax returns S. Prior year tax returns sources. Prior year tax returns This rule applies even if any of the transactions occurred while you were not in the United States. Prior year tax returns   To determine your net gain, consider the amount of your gains and losses that would be recognized and taken into account only if, and to the extent that, they would be recognized and taken into account if you were in a U. Prior year tax returns S. Prior year tax returns trade or business during the year and the gains and losses were effectively connected with that trade or business during the tax year. Prior year tax returns   In arriving at your net gain, do not take the following into consideration. Prior year tax returns The four types of gains listed earlier. Prior year tax returns The deduction for a capital loss carryover. Prior year tax returns Capital losses in excess of capital gains. Prior year tax returns Exclusion for gain from the sale or exchange of qualified small business stock (section 1202 exclusion). Prior year tax returns Losses from the sale or exchange of property held for personal use. Prior year tax returns However, losses resulting from casualties or thefts may be deductible on Schedule A (Form 1040NR). Prior year tax returns See Itemized Deductions in chapter 5. Prior year tax returns   If you are not engaged in a trade or business in the United States and have not established a tax year for a prior period, your tax year will be the calendar year for purposes of the 183-day rule. Prior year tax returns Also, you must file your tax return on a calendar-year basis. Prior year tax returns   If you were in the United States for less than 183 days during the tax year, capital gains (other than gains listed earlier) are tax exempt unless they are effectively connected with a trade or business in the United States during your tax year. Prior year tax returns Reporting. Prior year tax returns   Report your gains and losses from the sales or exchanges of capital assets that are not effectively connected with a trade or business in the United States on page 4 of Form 1040NR. Prior year tax returns Report gains and losses from sales or exchanges of capital assets (including real property) that are effectively connected with a trade or business in the United States on a separate Schedule D (Form 1040), Form 4797, or both. Prior year tax returns Attach them to Form 1040NR. Prior year tax returns Income From Real Property If you have income from real property located in the United States that you own or have an interest in and hold for the production of income, you can choose to treat all income from that property as income effectively connected with a trade or business in the United States. Prior year tax returns The choice applies to all income from real property located in the United States and held for the production of income and to all income from any interest in such property. Prior year tax returns This includes income from rents, royalties from mines, oil or gas wells, or other natural resources. Prior year tax returns It also includes gains from the sale or exchange of timber, coal, or domestic iron ore with a retained economic interest. Prior year tax returns You can make this choice only for real property income that is not otherwise effectively connected with your U. Prior year tax returns S. Prior year tax returns trade or business. Prior year tax returns If you make the choice, you can claim deductions attributable to the real property income and only your net income from real property is taxed. Prior year tax returns This choice does not treat a nonresident alien, who is not otherwise engaged in a U. Prior year tax returns S. Prior year tax returns trade or business, as being engaged in a trade or business in the United States during the year. Prior year tax returns Example. Prior year tax returns You are a nonresident alien and are not engaged in a U. Prior year tax returns S. Prior year tax returns trade or business. Prior year tax returns You own a single-family house in the United States that you rent out. Prior year tax returns Your rental income for the year is $10,000. Prior year tax returns This is your only U. Prior year tax returns S. Prior year tax returns source income. Prior year tax returns As discussed earlier under The 30% Tax, the rental income is subject to a tax at a 30% (or lower treaty) rate. Prior year tax returns You received a Form 1042-S showing that your tenants properly withheld this tax from the rental income. Prior year tax returns You do not have to file a U. Prior year tax returns S. Prior year tax returns tax return (Form 1040NR) because your U. Prior year tax returns S. Prior year tax returns tax liability is satisfied by the withholding of tax. Prior year tax returns If you make the choice discussed earlier, you can offset the $10,000 income by certain rental expenses. Prior year tax returns (See Publication 527, Residential Rental Property, for information on rental expenses. Prior year tax returns ) Any resulting net income is taxed at graduated rates. Prior year tax returns If you make this choice, report the rental income and expenses on Schedule E (Form 1040) and attach the schedule to Form 1040NR. Prior year tax returns For the first year you make the choice, also attach the statement discussed next. Prior year tax returns Making the choice. Prior year tax returns   Make the initial choice by attaching a statement to your return, or amended return, for the year of the choice. Prior year tax returns Include the following in your statement. Prior year tax returns That you are making the choice. Prior year tax returns Whether the choice is under Internal Revenue Code section 871(d) (explained earlier) or a tax treaty. Prior year tax returns A complete list of all your real property, or any interest in real property, located in the United States. Prior year tax returns Give the legal identification of U. Prior year tax returns S. Prior year tax returns timber, coal, or iron ore in which you have an interest. Prior year tax returns The extent of your ownership in the property. Prior year tax returns The location of the property. Prior year tax returns A description of any major improvements to the property. Prior year tax returns The dates you owned the property. Prior year tax returns Your income from the property. Prior year tax returns Details of any previous choices and revocations of the real property income choice. Prior year tax returns   This choice stays in effect for all later tax years unless you revoke it. Prior year tax returns Revoking the choice. Prior year tax returns   You can revoke the choice without IRS approval by filing Form 1040X, Amended U. Prior year tax returns S. Prior year tax returns Individual Income Tax Return, for the year you made the choice and for later tax years. Prior year tax returns You must file Form 1040X within 3 years from the date your return was filed or 2 years from the time the tax was paid, whichever is later. Prior year tax returns If this time period has expired for the year of choice, you cannot revoke the choice for that year. Prior year tax returns However, you may revoke the choice for later tax years only if you have IRS approval. Prior year tax returns For information on how to get IRS approval, see Regulation section 1. Prior year tax returns 871-10(d)(2). Prior year tax returns Transportation Tax A 4% tax rate applies to transportation income that is not effectively connected because it does not meet the two conditions listed earlier under Transportation Income . Prior year tax returns If you receive transportation income subject to the 4% tax, you should figure the tax and show it on line 57 of Form 1040NR. Prior year tax returns Attach a statement to your return that includes the following information (if applicable). Prior year tax returns Your name, taxpayer identification number, and tax year. Prior year tax returns A description of the types of services performed (whether on or off board). Prior year tax returns Names of vessels or registration numbers of aircraft on which you performed the services. Prior year tax returns Amount of U. Prior year tax returns S. Prior year tax returns source transportation income derived from each type of service for each vessel or aircraft for the calendar year. Prior year tax returns Total amount of U. Prior year tax returns S. Prior year tax returns source transportation income derived from all types of services for the calendar year. Prior year tax returns This 4% tax applies to your U. Prior year tax returns S. Prior year tax returns source gross transportation income. Prior year tax returns This only includes transportation income that is treated as derived from sources in the United States if the transportation begins or ends in the United States. Prior year tax returns For transportation income from personal services, the transportation must be between the United States and a U. Prior year tax returns S. Prior year tax returns possession. Prior year tax returns For personal services of a nonresident alien, this only applies to income derived from, or in connection with, an aircraft. Prior year tax returns Interrupted Period of Residence You are subject to tax under a special rule if you interrupt your period of U. Prior year tax returns S. Prior year tax returns residence with a period of nonresidence. Prior year tax returns The special rule applies if you meet all of the following conditions. Prior year tax returns You were a U. Prior year tax returns S. Prior year tax returns resident for a period that includes at least 3 consecutive calendar years. Prior year tax returns You were a U. Prior year tax returns S. Prior year tax returns resident for at least 183 days in each of those years. Prior year tax returns You ceased to be treated as a U. Prior year tax returns S. Prior year tax returns resident. Prior year tax returns You then again became a U. Prior year tax returns S. Prior year tax returns resident before the end of the third calendar year after the end of the period described in (1) above. Prior year tax returns Under this special rule, you are subject to tax on your U. Prior year tax returns S. Prior year tax returns source gross income and gains on a net basis at the graduated rates applicable to individuals (with allowable deductions) for the period you were a nonresident alien, unless you would be subject to a higher tax under the 30% tax (discussed earlier) on income not connected with a U. Prior year tax returns S. Prior year tax returns trade or business. Prior year tax returns For information on how to figure the special tax, see How To Figure the Expatriation Tax (If You Expatriated Before June 17, 2008) under Expatriation Tax , below. Prior year tax returns Example. Prior year tax returns John Willow, a citizen of New Zealand, entered the United States on April 1, 2008, as a lawful permanent resident. Prior year tax returns On August 1, 2010, John ceased to be a lawful permanent resident and returned to New Zealand. Prior year tax returns During his period of residence, he was present in the United States for at least 183 days in each of three consecutive years (2008, 2009, and 2010). Prior year tax returns He returned to the United States on October 5, 2013, as a lawful permanent resident. Prior year tax returns He became a resident before the close of the third calendar year (2013) beginning after the end of his first period of residence (August 1, 2010). Prior year tax returns Therefore, he is subject to tax under the special rule for the period of nonresidence (August 2, 2010, through October 4, 2013) if it is more than the tax that would normally apply to him as a nonresident alien. Prior year tax returns Reporting requirements. Prior year tax returns   If you are subject to this tax for any year in the period you were a nonresident alien, you must file Form 1040NR for that year. Prior year tax returns The return is due by the due date (including extensions) for filing your U. Prior year tax returns S. Prior year tax returns income tax return for the year that you again become a U. Prior year tax returns S. Prior year tax returns resident. Prior year tax returns If you already filed returns for that period, you must file amended returns. Prior year tax returns You must attach a statement to your return that identifies the source of all of your U. Prior year tax returns S. Prior year tax returns and foreign gross income and the items of income subject to this special rule. Prior year tax returns Expatriation Tax The expatriation tax provisions apply to U. Prior year tax returns S. Prior year tax returns citizens who have renounced their citizenship and long-term residents who have ended their residency. Prior year tax returns The rules that apply are based on the dates of expatriation, which are described in the following sections. Prior year tax returns Expatriation Before June 4, 2004. Prior year tax returns Expatriation After June 3, 2004, and Before June 17, 2008. Prior year tax returns Expatriation After June 16, 2008. Prior year tax returns Long-term resident defined. Prior year tax returns   You are a long-term resident if you were a lawful permanent resident of the United States in at least 8 of the last 15 tax years ending with the year your residency ends. Prior year tax returns In determining if you meet the 8-year requirement, do not count any year that you are treated as a resident of a foreign country under a tax treaty and do not waive treaty benefits. Prior year tax returns Expatriation Before June 4, 2004 If you expatriated before June 4, 2004, the expatriation rules apply if one of the principal purposes of the action is the avoidance of U. Prior year tax returns S. Prior year tax returns taxes. Prior year tax returns Unless you received a ruling from the IRS that you did not expatriate to avoid U. Prior year tax returns S. Prior year tax returns taxes, you are presumed to have tax avoidance as a principal purpose if: Your average annual net income tax for the last 5 tax years ending before the date of your action to relinquish your citizenship or terminate your residency was more than $100,000, or Your net worth on the date of your action was $500,000 or more. Prior year tax returns The amounts above are adjusted for inflation if your expatriation action is after 1997 (see Table 4-1). Prior year tax returns Table 4-1. Prior year tax returns Inflation-Adjusted Amounts for Expatriation Actions Before June 4, 2004 IF you expatriated during . Prior year tax returns . Prior year tax returns . Prior year tax returns   THEN the rules outlined on this page apply if . Prior year tax returns . Prior year tax returns . Prior year tax returns     Your 5-year average annual net income tax was more than . Prior year tax returns . Prior year tax returns . Prior year tax returns OR Your net worth equaled or exceeded . Prior year tax returns . Prior year tax returns . Prior year tax returns 1999   110,000   552,000 2000   112,000   562,000 2001   116,000   580,000 2002   120,000   599,000 2003   122,000   608,000 2004 (before June 4)*   124,000   622,000 *If you expatriated after June 3, 2004, see Expatriation After June 3, 2004, and Before June 17, 2008 or Expatriation After June 16, 2008. Prior year tax returns Reporting requirements. Prior year tax returns   If you lost your U. Prior year tax returns S. Prior year tax returns citizenship, you should have filed Form 8854 with a consular office or a federal court at the time of loss of citizenship. Prior year tax returns If you ended your long-term residency, you should have filed Form 8854 with the Internal Revenue Service when you filed your dual-status tax return for the year your residency ended. Prior year tax returns   Your U. Prior year tax returns S. Prior year tax returns residency is considered to have ended when you ceased to be a lawful permanent resident or you began to be treated as a resident of another country under a tax treaty and do not waive treaty benefits. Prior year tax returns Penalties. Prior year tax returns   If you failed to file Form 8854, you may have to pay a penalty equal to the greater of 5% of the expatriation tax or $1,000. Prior year tax returns The penalty will be assessed for each year of the 10-year period beginning on the date of expatriation during which your failure to file continues. Prior year tax returns The penalty will not be imposed if you can show that the failure is due to reasonable cause and not willful neglect. Prior year tax returns Expatriation tax. Prior year tax returns   The expatriation tax applies to the 10-year period following the date of expatriation or termination of residency. Prior year tax returns It is figured in the same way as for those expatriating after June 3, 2004, and before June 17, 2008. Prior year tax returns See How To Figure the Expatriation Tax (If You Expatriated Before June 17, 2008) in the next section. Prior year tax returns Expatriation After June 3, 2004, and Before June 17, 2008 If you expatriated after June 3, 2004, and before June 17, 2008, the expatriation rules apply to you if any of the following statements apply. Prior year tax returns Your average annual net income tax for the 5 tax years ending before the date of expatriation or termination of residency is more than: $124,000 if you expatriated or terminated residency in 2004. Prior year tax returns $127,000 if you expatriated or terminated residency in 2005. Prior year tax returns $131,000 if you expatriated or terminated residency in 2006. Prior year tax returns $136,000 if you expatriated or terminated residency in 2007. Prior year tax returns $139,000 if you expatriated or terminated residency in 2008. Prior year tax returns Your net worth is $2 million or more on the date of your expatriation or termination of residency. Prior year tax returns You fail to certify on Form 8854 that you have complied with all U. Prior year tax returns S. Prior year tax returns federal tax obligations for the 5 tax years preceding the date of your expatriation or termination of residency. Prior year tax returns Exception for dual-citizens and certain minors. Prior year tax returns   Certain dual-citizens and certain minors (defined next) are not subject to the expatriation tax even if they meet (1) or (2) earlier. Prior year tax returns However, they still must provide the certification required in (3). Prior year tax returns Certain dual-citizens. Prior year tax returns   You may qualify for the exception described above if all of the following apply. Prior year tax returns You became at birth a U. Prior year tax returns S. Prior year tax returns citizen and a citizen of another country and you continue to be a citizen of that other country. Prior year tax returns You were never a resident alien of the United States (as defined in chapter 1). Prior year tax returns You never held a U. Prior year tax returns S. Prior year tax returns passport. Prior year tax returns You were present in the United States for no more than 30 days during any calendar year that is 1 of the 10 calendar years preceding your loss of U. Prior year tax returns S. Prior year tax returns citizenship. Prior year tax returns Certain minors. Prior year tax returns   You may qualify for the exception described above if you meet all of the following requirements. Prior year tax returns You became a U. Prior year tax returns S. Prior year tax returns citizen at birth. Prior year tax returns Neither of your parents was a U. Prior year tax returns S. Prior year tax returns citizen at the time of your birth. Prior year tax returns You expatriated before you were 18½. Prior year tax returns You were present in the United States for not more than 30 days during any calendar year that is 1 of the 10 calendar years preceding your expatriation. Prior year tax returns Tax consequences of presence in the United States. Prior year tax returns   The following rules apply if you do not meet the exception above for dual-citizens and certain minors and the expatriation rules would otherwise apply to you. Prior year tax returns   The expatriation tax does not apply to any tax year during the 10-year period if you are physically present in the United States for more than 30 days during the calendar year ending in that year. Prior year tax returns Instead, you are treated as a U. Prior year tax returns S. Prior year tax returns citizen or resident and taxed on your worldwide income for that tax year. Prior year tax returns You must file Form 1040, 1040A, or 1040EZ and figure your tax as prescribed in the instructions for those forms. Prior year tax returns   When counting the number of days of presence during a calendar year, count any day you were physically present in the United States at any time during the day. Prior year tax returns However, do not count any days (up to a limit of 30 days) on which you performed personal services in the United States for an employer who is not related to you if either of the following apply. Prior year tax returns You have ties with other countries. Prior year tax returns You have ties with other countries if: You became (within a reasonable period after your expatriation or termination of residency) a citizen or resident of the country in which you, your spouse, or either of your parents were born, and You became fully liable for income tax in that country. Prior year tax returns You were physically present in the United States for 30 days or less during each year in the 10-year period ending on the date of expatriation or termination of residency. Prior year tax returns Do not count any day you were an exempt individual or were unable to leave the United States because of a medical condition that arose while you were in the United States. Prior year tax returns See Exempt individual and Medical condition in chapter 1 under Substantial Presence Test, but disregard the information about Form 8843. Prior year tax returns Related employer. Prior year tax returns   If your employer in the United States is any of the following, then your employer is related to you. Prior year tax returns You must count any days you performed services in the United States for that employer as days of presence in the United States. Prior year tax returns Members of your family. Prior year tax returns This includes only your brothers and sisters, half-brothers and half-sisters, spouse, ancestors (parents, grandparents, etc. Prior year tax returns ), and lineal descendants (children, grandchildren, etc. Prior year tax returns ). Prior year tax returns A partnership in which you directly or indirectly own more than 50% of the capital interest or the profits interest. Prior year tax returns A corporation in which you directly or indirectly own more than 50% in value of the outstanding stock. Prior year tax returns (See Publication 550, chapter 4, Constructive ownership of stock, for how to determine whether you directly or indirectly own outstanding stock. Prior year tax returns ) A tax-exempt charitable or educational organization that is directly or indirectly controlled, in any manner or by any method, by you or by a member of your family, whether or not this control is legally enforceable. Prior year tax returns Date of tax expatriation. Prior year tax returns   For purposes of U. Prior year tax returns S. Prior year tax returns tax rules, the date of your expatriation or termination of residency is the later of the dates on which you perform the following actions. Prior year tax returns You notify either the Department of State or the Department of Homeland Security (whichever is appropriate) of your expatriating act or termination of residency. Prior year tax returns You file Form 8854 in accordance with the form instructions. Prior year tax returns Annual return. Prior year tax returns   If the expatriation tax applies to you, you must file Form 8854 each year during the 10-year period following the date of expatriation. Prior year tax returns You must file this form even if you owe no U. Prior year tax returns S. Prior year tax returns tax. Prior year tax returns Penalty. Prior year tax returns   If you fail to file Form 8854 for any tax year, fail to include all information required to be shown on the form, or include incorrect information, you may have to pay a penalty of $10,000. Prior year tax returns You will not have to pay a penalty if you show that the failure is due to reasonable cause and not to willful neglect. Prior year tax returns How To Figure the Expatriation Tax (If You Expatriated Before June 17, 2008) If the expatriation tax applies to you, you are generally subject to tax on your U. Prior year tax returns S. Prior year tax returns source gross income and gains on a net basis at the graduated rates applicable to individuals (with allowable deductions) unless you would be subject to a higher tax under the 30% tax (discussed earlier) on income not connected with a U. Prior year tax returns S. Prior year tax returns trade or business. Prior year tax returns For this purpose, U. Prior year tax returns S. Prior year tax returns source gross income (defined in chapter 2) includes gains from the sale or exchange of: Property (other than stock or debt obligations) located in the United States, Stock issued by a U. Prior year tax returns S. Prior year tax returns domestic corporation, and Debt obligations of U. Prior year tax returns S. Prior year tax returns persons or of the United States, a state or political subdivision thereof, or the District of Columbia. Prior year tax returns U. Prior year tax returns S. Prior year tax returns source income also includes any income or gain derived from stock in certain controlled foreign corporations if you owned, or were considered to own, at any time during the 2-year period ending on the date of expatriation, more than 50% of: The total combined voting power of all classes of that corporation's stock, or The total value of the stock. Prior year tax returns The income or gain is considered U. Prior year tax returns S. Prior year tax returns source income only to the extent of your share of earnings and profits earned or accumulated before the date of expatriation and during the periods you met the ownership requirements discussed above. Prior year tax returns Any exchange of property is treated as a sale of the property at its fair market value on the date of the exchange and any gain is treated as U. Prior year tax returns S. Prior year tax returns source gross income in the tax year of the exchange unless you enter into a gain recognition agreement under Notice 97-19. Prior year tax returns Other information. Prior year tax returns   For more information on the expatriation tax provisions, including exceptions to the tax and special U. Prior year tax returns S. Prior year tax returns source rules, see section 877 of the Internal Revenue Code. Prior year tax returns Expatriation Tax Return If you expatriated or terminated your U. Prior year tax returns S. Prior year tax returns residency, or you are subject to the expatriation tax, you must file Form 8854, Initial and Annual Expatriation Statement. Prior year tax returns Attach it to Form 1040NR if you are required to file that form. Prior year tax returns If you are present in the United States following your expatriation and are subject to tax as a U. Prior year tax returns S. Prior year tax returns citizen or resident, file Form 8854 with Form 1040. Prior year tax returns Expatriation After June 16, 2008 If you expatriated after June 16, 2008, the expatriation rules apply to you if you meet any of the following conditions. Prior year tax returns Your average annual net income tax for the 5 years ending before the date of expatriation or termination of residency is more than: $139,000 if you expatriated or terminated residency in 2008. Prior year tax returns $145,000 if you expatriated or terminated residency in 2009 or 2010. Prior year tax returns $147,000 if you expatriated or terminated residency in 2011. Prior year tax returns $151,000 if you expatriated or terminated residency in 2012. Prior year tax returns $155,000 if you expatriated or terminated residency in 2013. Prior year tax returns Your net worth is $2 million or more on the date of your expatriation or termination of residency. Prior year tax returns You fail to certify on Form 8854 that you have complied with all U. Prior year tax returns S. Prior year tax returns federal tax obligations for the 5 years preceding the date of your expatriation or termination of residency. Prior year tax returns Exception for dual-citizens and certain minors. Prior year tax returns   Certain dual-citizens and certain minors (defined next) are not subject to the expatriation tax even if they meet (1) or (2) above. Prior year tax returns However, they still must provide the certification required in (3) above. Prior year tax returns Certain dual-citizens. Prior year tax returns   You may qualify for the exception described above if both of the following apply. Prior year tax returns You became at birth a U. Prior year tax returns S. Prior year tax returns citizen and a citizen of another country and you continue to be a citizen of, and are taxed as a resident of, that other country. Prior year tax returns You have been a resident of the United States for not more than 10 years during the 15-year tax period ending with the tax year during which the expatriation occurs. Prior year tax returns For the purpose of determining U. Prior year tax returns S. Prior year tax returns residency, use the substantial presence test described in chapter 1. Prior year tax returns Certain minors. Prior year tax returns   You may qualify for the exception described earlier if you meet both of the following requirements. Prior year tax returns You expatriated before you were 18½. Prior year tax returns You have been a resident of the United States for not more than 10 tax years before the expatriation occurs. Prior year tax returns For the purpose of determining U. Prior year tax returns S. Prior year tax returns residency, use the substantial presence test described in chapter 1. Prior year tax returns Expatriation date. Prior year tax returns   Your expatriation date is the date you relinquish U. Prior year tax returns S. Prior year tax returns citizenship (in the case of a former citizen) or terminate your long-term residency (in the case of a former U. Prior year tax returns S. Prior year tax returns resident). Prior year tax returns Former U. Prior year tax returns S. Prior year tax returns citizen. Prior year tax returns   You are considered to have relinquished your U. Prior year tax returns S. Prior year tax returns citizenship on the earliest of the following dates. Prior year tax returns The date you renounced U. Prior year tax returns S. Prior year tax returns citizenship before a diplomatic or consular officer of the United States (provided that the voluntary renouncement was later confirmed by the issuance of a certificate of loss of nationality). Prior year tax returns The date you furnished to the State Department a signed statement of voluntary relinquishment of U. Prior year tax returns S. Prior year tax returns nationality confirming the performance of an expatriating act (provided that the voluntary relinquishment was later confirmed by the issuance of a certificate of loss of nationality). Prior year tax returns The date the State Department issued a certificate of loss of nationality. Prior year tax returns The date that a U. Prior year tax returns S. Prior year tax returns court canceled your certificate of naturalization. Prior year tax returns Former long-term resident. Prior year tax returns   You are considered to have terminated your long-term residency on the earliest of the following dates. Prior year tax returns The date you voluntarily relinquished your lawful permanent resident status by filing Department of Homeland Security Form I-407 with a U. Prior year tax returns S. Prior year tax returns consular or immigration officer, and the Department of Homeland Security determined that you have, in fact, abandoned your lawful permanent resident status. Prior year tax returns The date you became subject to a final administrative order for your removal from the United States under the Immigration and Nationality Act and you actually left the United States as a result of that order. Prior year tax returns If you were a dual resident of the United States and a country with which the United States has an income tax treaty, the date you began to be treated as a resident of that country and you determined that, for purposes of the treaty, you are a resident of the treaty country and notify the IRS of that treatment on Forms 8833 and 8854. Prior year tax returns See Effect of Tax Treaties in chapter 1 for more information about dual residents. Prior year tax returns How To Figure the Expatriation Tax (If You Expatriate After June 16, 2008) In the year you expatriate, you are subject to income tax on the net unrealized gain (or loss) in your property as if the property had been sold for its fair market value on the day before your expatriation date (“mark-to-market tax”). Prior year tax returns This applies to most types of property interests you held on the date of relinquishment of citizenship or termination of residency. Prior year tax returns But see Exceptions , later. Prior year tax returns Gains arising from deemed sales must be taken into account for the tax year of the deemed sale without regard to other U. Prior year tax returns S. Prior year tax returns internal revenue laws. Prior year tax returns Losses from deemed sales must be taken into account to the extent otherwise provided under U. Prior year tax returns S. Prior year tax returns internal revenue laws. Prior year tax returns However, Internal Revenue Code section 1091 (relating to the disallowance of losses on wash sales of stock and securities) does not apply. Prior year tax returns The net gain that you otherwise must include in your income is reduced (but not below zero) by: $600,000 if you expatriated or terminated residency before January 1, 2009. Prior year tax returns $626,000 if you expatriated or terminated residency in 2009. Prior year tax returns $627,000 if you expatriated or terminated residency in 2010. Prior year tax returns $636,000 if you expatriated or terminated residency in 2011. Prior year tax returns $651,000 if you expatriated or terminated residency in 2012. Prior year tax returns $668,000 if you expatriated or terminated residency in 2013. Prior year tax returns Exceptions. Prior year tax returns   The mark-to-market tax does not apply to the following. Prior year tax returns Eligible deferred compensation items. Prior year tax returns Ineligible deferred compensation items. Prior year tax returns Interests in nongrantor trusts. Prior year tax returns Specified tax deferred accounts. Prior year tax returns Instead, items (1) and (3) may be subject to withholding at source. Prior year tax returns In the case of item (2), you are treated as receiving the present value of your accrued benefit as of the day before the expatriation date. Prior year tax returns In the case of item (4), you are treated as receiving a distribution of your entire interest in the account on the day before your expatriation date. Prior year tax returns See paragraphs (d), (e), and (f) of section 877A for more information. Prior year tax returns Expatriation Tax Return If you expatriated or terminated your U. Prior year tax returns S. Prior year tax returns residency, or you are subject to the expatriation rules (as discussed earlier in the first paragraph under Expatriation After June 16, 2008), you must file Form 8854. Prior year tax returns Attach it to Form 1040 or Form 1040NR if you are required to file either of those forms. Prior year tax returns Deferral of payment of mark-to-market tax. Prior year tax returns   You can make an irrevocable election to defer payment of the mark-to-market tax imposed on the deemed sale of property. Prior year tax returns If you make this election, the following rules apply. Prior year tax returns You can make the election on a property-by-property basis. Prior year tax returns The deferred tax attributable to a particular property is due on the return for the tax year in which you dispose of the property. Prior year tax returns Interest is charged for the period the tax is deferred. Prior year tax returns The due date for the payment of the deferred tax cannot be extended beyond the earlier of the following dates. Prior year tax returns The due date of the return required for the year of death. Prior year tax returns The time that the security provided for the property fails to be adequate. Prior year tax returns See item (6) below. Prior year tax returns You make the election on Form 8854. Prior year tax returns You must provide adequate security (such as a bond). Prior year tax returns You must make an irrevocable waiver of any right under any treaty of the United States which would preclude assessment or collection of the mark-to-market tax. Prior year tax returns   For more information about the deferral of payment, see the Instructions for Form 8854. Prior year tax returns Prev  Up  Next   Home   More Online Publications
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Family, Health and Safety

The Prior Year Tax Returns

Prior year tax returns 37. Prior year tax returns   Other Credits Table of Contents What's New Introduction Useful Items - You may want to see: Nonrefundable CreditsAdoption Credit Alternative Motor Vehicle Credit Alternative Fuel Vehicle Refueling Property Credit Credit to Holders of Tax Credit Bonds Foreign Tax Credit Mortgage Interest Credit Nonrefundable Credit for Prior Year Minimum Tax Plug-in Electric Drive Motor Vehicle Credit Residential Energy Credits Retirement Savings Contributions Credit (Saver's Credit) Refundable CreditsCredit for Tax on Undistributed Capital Gain Health Coverage Tax Credit Credit for Excess Social Security Tax or Railroad Retirement Tax Withheld What's New Adoption credit. Prior year tax returns  The maximum adoption credit is $12,970 for 2013. Prior year tax returns See Adoption Credit . Prior year tax returns Plug-in electric vehicle credit. Prior year tax returns  This credit has expired. Prior year tax returns Credit for prior year minimum tax. Prior year tax returns  The refundable portion of the credit for prior year minimum tax has expired. Prior year tax returns Excess withholding of social security and railroad retirement tax. Prior year tax returns  Social security tax and tier 1 railroad retirement (RRTA) tax were both withheld during 2013 at a rate of 6. Prior year tax returns 2% of wages up to $113,700. Prior year tax returns If you worked for more than one employer and had too much social security or RRTA tax withheld during 2013, you may be entitled to a credit for the excess withholding. Prior year tax returns See Credit for Excess Social Security Tax or Railroad Retirement Tax Withheld . Prior year tax returns Introduction This chapter discusses the following nonrefundable credits. Prior year tax returns Adoption credit. Prior year tax returns Alternative motor vehicle credit. Prior year tax returns Alternative fuel vehicle refueling property credit. Prior year tax returns Credit to holders of tax credit bonds. Prior year tax returns Foreign tax credit. Prior year tax returns Mortgage interest credit. Prior year tax returns Nonrefundable credit for prior year minimum tax. Prior year tax returns Plug-in electric drive motor vehicle credit. Prior year tax returns Residential energy credits. Prior year tax returns Retirement savings contributions credit. Prior year tax returns This chapter also discusses the following refundable credits. Prior year tax returns Credit for tax on undistributed capital gain. Prior year tax returns Health coverage tax credit. Prior year tax returns Credit for excess social security tax or railroad retirement tax withheld. Prior year tax returns Several other credits are discussed in other chapters in this publication. Prior year tax returns Child and dependent care credit (chapter 32). Prior year tax returns Credit for the elderly or the disabled (chapter 33). Prior year tax returns Child tax credit (chapter 34). Prior year tax returns Education credits (chapter 35). Prior year tax returns Earned income credit (chapter 36). Prior year tax returns Nonrefundable credits. Prior year tax returns   The first part of this chapter, Nonrefundable Credits , covers ten credits that you subtract from your tax. Prior year tax returns These credits may reduce your tax to zero. Prior year tax returns If these credits are more than your tax, the excess is not refunded to you. Prior year tax returns Refundable credits. Prior year tax returns   The second part of this chapter, Refundable Credits , covers three credits that are treated as payments and are refundable to you. Prior year tax returns These credits are added to the federal income tax withheld and any estimated tax payments you made. Prior year tax returns If this total is more than your total tax, the excess will be refunded to you. Prior year tax returns Useful Items - You may want to see: Publication 502 Medical and Dental Expenses 514 Foreign Tax Credit for  Individuals 530 Tax Information for Homeowners 590 Individual Retirement Arrangements (IRAs) Form (and Instructions) 1116 Foreign Tax Credit 2439 Notice to Shareholder of Undistributed Long-Term Capital Gains 5695 Residential Energy Credits 8396 Mortgage Interest Credit 8801 Credit For Prior Year Minimum Tax — Individuals, Estates, and Trusts 8828 Recapture of Federal Mortgage Subsidy 8839 Qualified Adoption Expenses 8880 Credit for Qualified Retirement Savings Contributions 8885 Health Coverage Tax Credit 8910 Alternative Motor Vehicle Credit 8911 Alternative Fuel Vehicle Refueling Property Credit 8912 Credit to Holders of Tax Credit Bonds 8936 Qualified Plug-in Electric Drive Motor Vehicle Credit Nonrefundable Credits The credits discussed in this part of the chapter can reduce your tax. Prior year tax returns However, if the total of these credits is more than your tax, the excess is not refunded to you. Prior year tax returns Adoption Credit You may be able to take a tax credit of up to $12,970 for qualified expenses paid to adopt an eligible child. Prior year tax returns The credit may be allowed for the adoption of a child with special needs even if you do not have any qualified expenses. Prior year tax returns If your modified adjusted gross income (AGI) is more than $194,580, your credit is reduced. Prior year tax returns If your modified AGI is $234,580 or more, you cannot take the credit. Prior year tax returns Qualified adoption expenses. Prior year tax returns   Qualified adoption expenses are reasonable and necessary expenses directly related to, and whose principal purpose is for, the legal adoption of an eligible child. Prior year tax returns These expenses include: Adoption fees, Court costs, Attorney fees, Travel expenses (including amounts spent for meals and lodging) while away from home, and Re-adoption expenses to adopt a foreign child. Prior year tax returns Nonqualified expenses. Prior year tax returns   Qualified adoption expenses do not include expenses: That violate state or federal law, For carrying out any surrogate parenting arrangement, For the adoption of your spouse's child, For which you received funds under any federal, state, or local program, Allowed as a credit or deduction under any other federal income tax rule, or Paid or reimbursed by your employer or any other person or organization. Prior year tax returns Eligible child. Prior year tax returns   The term “eligible child” means any individual: Under 18 years old, or Physically or mentally incapable of caring for himself or herself. Prior year tax returns Child with special needs. Prior year tax returns   An eligible child is a child with special needs if all three of the following apply. Prior year tax returns The child was a citizen or resident of the United States (including U. Prior year tax returns S. Prior year tax returns possessions) at the time the adoption process began. Prior year tax returns A state (including the District of Columbia) has determined that the child cannot or should not be returned to his or her parents' home. Prior year tax returns The state has determined that the child will not be adopted unless assistance is provided to the adoptive parents. Prior year tax returns Factors used by states to make this determination include: The child's ethnic background, The child's age, Whether the child is a member of a minority or sibling group, and Whether the child has a medical condition or a physical, mental, or emotional handicap. Prior year tax returns When to take the credit. Prior year tax returns   Generally, until the adoption becomes final, you take the credit in the year after your qualified expenses were paid or incurred. Prior year tax returns If the adoption becomes final, you take the credit in the year your expenses were paid or incurred. Prior year tax returns See the Instructions for Form 8839 for more specific information on when to take the credit. Prior year tax returns Foreign child. Prior year tax returns   If the child is not a U. Prior year tax returns S. Prior year tax returns citizen or resident at the time the adoption process began, you cannot take the credit unless the adoption becomes final. Prior year tax returns You treat all adoption expenses paid or incurred in years before the adoption becomes final as paid or incurred in the year it becomes final. Prior year tax returns How to take the credit. Prior year tax returns   Figure your 2013 nonrefundable credit and any carryforward to 2014 on Form 8839 and attach it to your Form 1040. Prior year tax returns Include the credit in your total for Form 1040, line 53. Prior year tax returns Check box c and enter “8839” on the line next to that box. Prior year tax returns More information. Prior year tax returns   For more information, see the Instructions for Form 8839. Prior year tax returns Alternative Motor Vehicle Credit You may be able to take this credit if you place a qualified fuel cell vehicle in service in 2013. Prior year tax returns Amount of credit. Prior year tax returns   Generally, you can rely on the manufacturer's certification to the IRS that a specific make, model, and model year vehicle qualifies for the credit and the amount of the credit for which it qualifies. Prior year tax returns In the case of a foreign manufacturer, you generally can rely on its domestic distributor's certification to the IRS. Prior year tax returns   Ordinarily the amount of the credit is 100% of the manufacturer's (or domestic distributor's) certification to the IRS of the maximum credit allowable. Prior year tax returns How to take the credit. Prior year tax returns   To take the credit, you must complete Form 8910 and attach it to your Form 1040. Prior year tax returns Include the credit in your total for Form 1040, line 53. Prior year tax returns Check box c and enter “8910” on the line next to that box. Prior year tax returns More information. Prior year tax returns   For more information on the credit, see the Instructions for Form 8910. Prior year tax returns Alternative Fuel Vehicle Refueling Property Credit You may be able to take a credit if you place qualified alternative fuel vehicle refueling property in service in 2013. Prior year tax returns Qualified alternative fuel vehicle refueling property. Prior year tax returns   Qualified alternative fuel vehicle refueling property is any property (other than a building or its structural components) used for either of the following. Prior year tax returns To store or dispense alternative fuel into the fuel tank of a motor vehicle propelled by the fuel, but only if the storage or dispensing is at the point where the fuel is delivered into that tank. Prior year tax returns To recharge an electric vehicle, but only if the recharging property is located at the point where the vehicle is recharged. Prior year tax returns   The following are alternative fuels. Prior year tax returns Any fuel at least 85% of the volume of which consists of one or more of the following: ethanol, natural gas, compressed natural gas, liquefied natural gas, liquefied petroleum gas, or hydrogen. Prior year tax returns Any mixture which consists of two or more of the following: biodiesel, diesel fuel, or kerosene, and at least 20% of the volume of which consists of biodiesel determined without regard to any kerosene. Prior year tax returns Electricity. Prior year tax returns Amount of the credit. Prior year tax returns   For personal use property, the credit is generally the smaller of 30% of the property's cost or $1,000. Prior year tax returns For business use property, the credit is generally the smaller of 30% of the property's cost or $30,000. Prior year tax returns How to take the credit. Prior year tax returns   To take the credit, you must complete Form 8911 and attach it to your Form 1040. Prior year tax returns Include the credit in your total for Form 1040, line 53. Prior year tax returns Check box c and enter “8911” on the line next to that box. Prior year tax returns More information. Prior year tax returns   For more information on the credit, see the Form 8911 instructions. Prior year tax returns Credit to Holders of Tax Credit Bonds Tax credit bonds are bonds in which the holder receives a tax credit in lieu of some or all of the interest on the bond. Prior year tax returns You may be able to take a credit if you are a holder of one of the following bonds. Prior year tax returns Clean renewable energy bonds (issued before 2010). Prior year tax returns New clean renewable energy bonds. Prior year tax returns Qualified energy conservation bonds. Prior year tax returns Qualified school construction bonds. Prior year tax returns Qualified zone academy bonds. Prior year tax returns Build America bonds. Prior year tax returns In some instances, an issuer may elect to receive a credit for interest paid on the bond. Prior year tax returns If the issuer makes this election, you cannot also claim a credit. Prior year tax returns Interest income. Prior year tax returns   The amount of any tax credit allowed (figured before applying tax liability limits) must be included as interest income on your tax return. Prior year tax returns How to take the credit. Prior year tax returns   Complete Form 8912 and attach it to your Form 1040. Prior year tax returns Include the credit in your total for Form 1040, line 53. Prior year tax returns Check box c and enter “8912” on the line next to that box. Prior year tax returns More information. Prior year tax returns   For more information, see the Instructions for Form 8912. Prior year tax returns Foreign Tax Credit You generally can choose to take income taxes you paid or accrued during the year to a foreign country or U. Prior year tax returns S. Prior year tax returns possession as a credit against your U. Prior year tax returns S. Prior year tax returns income tax. Prior year tax returns Or, you can deduct them as an itemized deduction (see chapter 22). Prior year tax returns You cannot take a credit (or deduction) for foreign income taxes paid on income that you exclude from U. Prior year tax returns S. Prior year tax returns tax under any of the following. Prior year tax returns Foreign earned income exclusion. Prior year tax returns Foreign housing exclusion. Prior year tax returns Income from Puerto Rico exempt from U. Prior year tax returns S. Prior year tax returns tax. Prior year tax returns Possession exclusion. Prior year tax returns Limit on the credit. Prior year tax returns   Unless you can elect not to file Form 1116 (see Exception , later), your foreign tax credit cannot be more than your U. Prior year tax returns S. Prior year tax returns tax liability (Form 1040, line 44), multiplied by a fraction. Prior year tax returns The numerator of the fraction is your taxable income from sources outside the United States. Prior year tax returns The denominator is your total taxable income from U. Prior year tax returns S. Prior year tax returns and foreign sources. Prior year tax returns See Publication 514 for more information. Prior year tax returns How to take the credit. Prior year tax returns   Complete Form 1116 and attach it to your Form 1040. Prior year tax returns Enter the credit on Form 1040, line 47. Prior year tax returns Exception. Prior year tax returns   You do not have to complete Form 1116 to take the credit if all of the following apply. Prior year tax returns All of your gross foreign source income was from interest and dividends and all of that income and the foreign tax paid on it were reported to you on Form 1099-INT, Form 1099-DIV, or Schedule K-1 (or substitute statement). Prior year tax returns If you had dividend income from shares of stock, you held those shares for at least 16 days. Prior year tax returns You are not filing Form 4563 or excluding income from sources within Puerto Rico. Prior year tax returns The total of your foreign taxes was not more than $300 (not more than $600 if married filing jointly). Prior year tax returns All of your foreign taxes were: Legally owed and not eligible for a refund, and Paid to countries that are recognized by the United States and do not support terrorism. Prior year tax returns More information. Prior year tax returns   For more information on the credit and these requirements, see the Instructions for Form 1116. Prior year tax returns Mortgage Interest Credit The mortgage interest credit is intended to help lower-income individuals own a home. Prior year tax returns If you qualify, you can take the credit each year for part of the home mortgage interest you pay. Prior year tax returns Who qualifies. Prior year tax returns   You may be eligible for the credit if you were issued a qualified mortgage credit certificate (MCC) from your state or local government. Prior year tax returns Generally, an MCC is issued only in connection with a new mortgage for the purchase of your main home. Prior year tax returns Amount of credit. Prior year tax returns   Figure your credit on Form 8396. Prior year tax returns If your mortgage loan amount is equal to (or smaller than) the certified indebtedness (loan) amount shown on your MCC, enter on Form 8396, line 1, all the interest you paid on your mortgage during the year. Prior year tax returns   If your mortgage loan amount is larger than the certified indebtedness amount shown on your MCC, you can figure the credit on only part of the interest you paid. Prior year tax returns To find the amount to enter on line 1, multiply the total interest you paid during the year on your mortgage by the following fraction. Prior year tax returns      Certified indebtedness amount on your MCC     Original amount of your mortgage   Limit based on credit rate. Prior year tax returns   If the certificate credit rate is more than 20%, the credit you are allowed cannot be more than $2,000. Prior year tax returns If two or more persons (other than a married couple filing a joint return) hold an interest in the home to which the MCC relates, this $2,000 limit must be divided based on the interest held by each person. Prior year tax returns See Publication 530 for more information. Prior year tax returns Carryforward. Prior year tax returns   Your credit (after applying the limit based on the credit rate) is also subject to a limit based on your tax that is figured using Form 8396. Prior year tax returns If your allowable credit is reduced because of this tax liability limit, you can carry forward the unused portion of the credit to the next 3 years or until used, whichever comes first. Prior year tax returns   If you are subject to the $2,000 limit because your certificate credit rate is more than 20%, you cannot carry forward any amount more than $2,000 (or your share of the $2,000 if you must divide the credit). Prior year tax returns How to take the credit. Prior year tax returns    Figure your 2013 credit and any carryforward to 2014 on Form 8396, and attach it to your Form 1040. Prior year tax returns Be sure to include any credit carryforward from 2010, 2011, and 2012. Prior year tax returns   Include the credit in your total for Form 1040, line 53. Prior year tax returns Check box c and enter “8396” on the line next to that box. Prior year tax returns Reduced home mortgage interest deduction. Prior year tax returns   If you itemize your deductions on Schedule A (Form 1040), you must reduce your home mortgage interest deduction by the amount of the mortgage interest credit shown on Form 8396, line 3. Prior year tax returns You must do this even if part of that amount is to be carried forward to 2014. Prior year tax returns For more information about the home mortgage interest deduction, see chapter 23. Prior year tax returns Recapture of federal mortgage subsidy. Prior year tax returns   If you received an MCC with your mortgage loan, you may have to recapture (pay back) all or part of the benefit you received from that program. Prior year tax returns The recapture may be required if you sell or dispose of your home at a gain during the first 9 years after the date you closed your mortgage loan. Prior year tax returns See the Instructions for Form 8828 and chapter 15 for more information. Prior year tax returns More information. Prior year tax returns   For more information on the credit, see the Form 8396 instructions. Prior year tax returns Nonrefundable Credit for Prior Year Minimum Tax The tax laws give special treatment to some kinds of income and allow special deductions and credits for some kinds of expenses. Prior year tax returns If you benefit from these laws, you may have to pay at least a minimum amount of tax in addition to any other tax on these items. Prior year tax returns This is called the alternative minimum tax. Prior year tax returns The special treatment of some items of income and expenses only allows you to postpone paying tax until a later year. Prior year tax returns If in prior years you paid alternative minimum tax because of these tax postponement items, you may be able to take a credit for prior year minimum tax against your current year's regular tax. Prior year tax returns You may be able to take a credit against your regular tax if for 2012 you had: An alternative minimum tax liability and adjustments or preferences other than exclusion items, A minimum tax credit that you are carrying forward to 2013, or An unallowed qualified electric vehicle credit. Prior year tax returns How to take the credit. Prior year tax returns    Figure your 2013 nonrefundable credit (if any), and any carryforward to 2014 on Form 8801, and attach it to your Form 1040. Prior year tax returns Include the credit in your total for Form 1040, line 53, and check box b. Prior year tax returns You can carry forward any unused credit for prior year minimum tax to later years until it is completely used. Prior year tax returns More information. Prior year tax returns   For more information on the credit, see the Instructions for Form 8801. Prior year tax returns Plug-in Electric Drive Motor Vehicle Credit You may be able to take this credit if you placed in service for business or personal use a qualified plug-in electric drive motor vehicle or a qualified two- or three-wheeled plug-in electric vehicle in 2013 and you meet some other requirements. Prior year tax returns Qualified plug-in electric drive motor vehicle. Prior year tax returns   This is a new vehicle with at least four wheels that: Is propelled to a significant extent by an electric motor that draws electricity from a battery that has a capacity of not less than 4 kilowatt hours and is capable of being recharged from an external source of electricity, and Has a gross vehicle weight of less than 14,000 pounds. Prior year tax returns Qualified two- or three-wheeled plug-in electric vehicle. Prior year tax returns   This is a new vehicle with two or three wheels that: Is capable of achieving a speed of 45 miles per hour or greater, Is propelled to a significant extent by an electric motor that draws electricity from a battery that has a capacity of not less than 2. Prior year tax returns 5 kilowatt hours and is capable of being recharged from an external source of electricity, and Has a gross vehicle weight of less than 14,000 pounds. Prior year tax returns Certification and other requirements. Prior year tax returns   Generally, you can rely on the manufacturer's (or, in the case of a foreign manufacturer, its domestic distributor's) certification to the IRS that a specific make, model, and model year vehicle qualifies for the credit and, if applicable, the amount of the credit for which it qualifies. Prior year tax returns However, if the IRS publishes an announcement that the certification for any specific make, model, and model year vehicle has been withdrawn, you cannot rely on the certification for such a vehicle purchased after the date of publication of the withdrawal announcement. Prior year tax returns   The following requirements must also be met to qualify for the credit. Prior year tax returns You are the owner of the vehicle. Prior year tax returns If the vehicle is leased, only the lessor, and not the lessee, is entitled to the credit. Prior year tax returns You placed the vehicle in service during 2013. Prior year tax returns The vehicle is manufactured primarily for use on public streets, roads, and highways. Prior year tax returns The original use of the vehicle began with you. Prior year tax returns You acquired the vehicle for your use or to lease to others, and not for resale. Prior year tax returns In the case of the qualified two- or three-wheeled plug-in electric vehicle, the vehicle is acquired after 2011 and before 2014. Prior year tax returns You use the vehicle primarily in the United States. Prior year tax returns How to take the credit. Prior year tax returns   To take the credit, you must complete Form 8936 and attach it to your Form 1040. Prior year tax returns Include the credit in your total for Form 1040, line 53. Prior year tax returns Check box c and enter “8936” on the line next to that box. Prior year tax returns More information. Prior year tax returns   For more information on the credit, see the Form 8936 instructions. Prior year tax returns Residential Energy Credits You may be able to take one or both of the following credits if you made energy saving improvements to your home located in the United States in 2013. Prior year tax returns Nonbusiness energy property credit. Prior year tax returns Residential energy efficient property credit. Prior year tax returns If you are a member of a condominium management association for a condominium you own or a tenant-stockholder in a cooperative housing corporation, you are treated as having paid your proportionate share of any costs of the association or corporation for purposes of these credits. Prior year tax returns Nonbusiness energy property credit. Prior year tax returns   You may be able to take a credit equal to the sum of: 10% of the amount paid or incurred for qualified energy efficiency improvements installed during 2013, and Any residential energy property costs paid or incurred in 2013. Prior year tax returns   There is a lifetime limit of $500 for all years after 2005, of which only $200 can be for windows; $50 for any advanced main air circulating fan; $150 for any qualified natural gas, propane, or oil furnace or hot water boiler; and $300 for any item of energy efficient building property. Prior year tax returns    If the total of nonbusiness energy property credits you have taken in previous years (after 2005) is more than $500, you cannot take this credit in 2013. Prior year tax returns   Qualified energy efficiency improvements are the following improvements that are new, can be expected to remain in use at least 5 years, and meet certain requirements for energy efficiency. Prior year tax returns Any insulation material or system that is specifically and primarily designed to reduce heat loss or gain of a home. Prior year tax returns Exterior window (including skylights). Prior year tax returns Exterior doors. Prior year tax returns Any metal or asphalt roof that has appropriate pigmented coatings or cooling granules specifically and primarily designed to reduce heat gain of the home. Prior year tax returns   Residential energy property is any of the following. Prior year tax returns Certain electric heat pump water heaters; electric heat pumps; central air conditioners; natural gas, propane, or oil water heater; and stoves that use biomass fuel. Prior year tax returns Qualified natural gas, propane, or oil furnaces; and qualified natural gas, propane, or oil hot water boilers. Prior year tax returns Certain advanced main air circulating fans used in natural gas, propane, or oil furnaces. Prior year tax returns Residential energy efficient property credit. Prior year tax returns   You may be able to take a credit of 30% of your costs of qualified solar electric property, solar water heating property, fuel cell property, small wind energy property, and geothermal heat pump property. Prior year tax returns The credit amount for costs paid for qualified fuel cell property is limited to $500 for each one-half kilowatt of capacity of the property. Prior year tax returns Basis reduction. Prior year tax returns   You must reduce the basis of your home by the amount of any credit allowed. Prior year tax returns How to take the credit. Prior year tax returns   Complete Form 5695 and attach it to your Form 1040. Prior year tax returns Enter the credit on Form 1040, line 52. Prior year tax returns More information. Prior year tax returns   For more information on these credits, see the Form 5695 instructions. Prior year tax returns Retirement Savings Contributions Credit (Saver's Credit) You may be able to take this credit if you, or your spouse if filing jointly, made: Contributions (other than rollover contributions) to a traditional or Roth IRA, Elective deferrals to a 401(k) or 403(b) plan (including designated Roth contributions) or to a governmental 457, SEP, or SIMPLE plan, Voluntary employee contributions to a qualified retirement plan (including the federal Thrift Savings Plan), or Contributions to a 501(c)(18)(D) plan. Prior year tax returns However, you cannot take the credit if either of the following applies. Prior year tax returns The amount on Form 1040, line 38, or Form 1040A, line 22, is more than $29,500 ($44,250 if head of household; $59,000 if married filing jointly). Prior year tax returns The person(s) who made the qualified contribution or elective deferral (a) was born after January 1, 1996, (b) is claimed as a dependent on someone else's 2013 tax return, or (c) was a student (defined next). Prior year tax returns Student. Prior year tax returns   You were a student if during any part of 5 calendar months of 2013 you: Were enrolled as a full-time student at a school, or Took a full-time, on-farm training course given by a school or a state, county, or local government agency. Prior year tax returns School. Prior year tax returns   A school includes a technical, trade, or mechanical school. Prior year tax returns It does not include an on-the-job training course, correspondence school, or school offering courses only through the Internet. Prior year tax returns How to take the credit. Prior year tax returns   Figure the credit on Form 8880. Prior year tax returns Enter the credit on your Form 1040, line 50, or your Form 1040A, line 32, and attach Form 8880 to your return. Prior year tax returns More information. Prior year tax returns   For more information on the credit, see the Form 8880 instructions. Prior year tax returns Refundable Credits The credits discussed in this part of the chapter are treated as payments of tax. Prior year tax returns If the total of these credits, withheld federal income tax, and estimated tax payments is more than your total tax, the excess can be refunded to you. Prior year tax returns Credit for Tax on Undistributed Capital Gain You must include in your income any amounts that regulated investment companies (commonly called mutual funds) or real estate investment trusts (REITs) allocated to you as capital gain distributions, even if you did not actually receive them. Prior year tax returns If the mutual fund or REIT paid a tax on the capital gain, you are allowed a credit for the tax since it is considered paid by you. Prior year tax returns The mutual fund or REIT will send you Form 2439 showing your share of the undistributed capital gains and the tax paid, if any. Prior year tax returns How to take the credit. Prior year tax returns   To take the credit, attach Copy B of Form 2439 to your Form 1040. Prior year tax returns Include the amount from box 2 of your Form 2439 in the total for Form 1040, line 71, and check box a. Prior year tax returns More information. Prior year tax returns   See Capital Gain Distributions in chapter 8 for more information on undistributed capital gains. Prior year tax returns Health Coverage Tax Credit You may be able to take this credit for any month in which all the following statements were true on the first day of the month. Prior year tax returns You were an eligible trade adjustment assistance (TAA) recipient, alternative TAA (ATAA) recipient, reemployment TAA (RTAA) recipient, or Pension Benefit Guaranty Corporation (PBGC) pension recipient (defined later); or you were a qualified family member of one of these individuals when the individual died or you finalized a divorce with one of these individuals. Prior year tax returns You and/or your family members were covered by a qualified health insurance plan for which you paid the entire premiums, or your portion of the premiums, directly to your health plan or to “U. Prior year tax returns S. Prior year tax returns Treasury–HCTC. Prior year tax returns ” You were not enrolled in Medicare Part A, B, or C, or you were enrolled in Medicare but your family member(s) qualified for the HCTC. Prior year tax returns You were not enrolled in Medicaid or the Children's Health Insurance Program (CHIP). Prior year tax returns You were not enrolled in the Federal Employees Health Benefits program (FEHBP) or eligible to receive benefits under the U. Prior year tax returns S. Prior year tax returns military health system (TRICARE). Prior year tax returns You were not imprisoned under federal, state, or local authority. Prior year tax returns Your employer did not pay 50% or more of the cost of coverage. Prior year tax returns You did not receive a 65% COBRA premium reduction from your former employer or COBRA administrator. Prior year tax returns But, you cannot take the credit if you can be claimed as a dependent on someone else's 2013 tax return. Prior year tax returns If you meet all of these conditions, you may be able to take a credit of up to 72. Prior year tax returns 5% of the amount you paid directly to a qualified health plan for you and any qualifying family members. Prior year tax returns You cannot take the credit for insurance premiums on coverage that was actually paid for with a National Emergency Grant. Prior year tax returns The amount you paid for qualified health insurance coverage must be reduced by any Archer MSA and health savings account distributions used to pay for the coverage. Prior year tax returns You can take this credit on your tax return or have it paid on your behalf in advance to your insurance company. Prior year tax returns If the credit is paid on your behalf in advance, that amount will reduce the amount of the credit you can take on your tax return. Prior year tax returns TAA recipient. Prior year tax returns   You were an eligible TAA recipient on the first day of the month if, for any day in that month or the prior month, you: Received a trade readjustment allowance, or Would have been entitled to receive such an allowance except that you had not exhausted all rights to any unemployment insurance (except additional compensation that is funded by a state and is not reimbursed from any federal funds) to which you were entitled (or would be entitled if you applied). Prior year tax returns Example. Prior year tax returns You received a trade adjustment allowance for January 2013. Prior year tax returns You were an eligible TAA recipient on the first day of January and February. Prior year tax returns Alternative TAA recipient. Prior year tax returns   You were an eligible alternative TAA recipient on the first day of the month if, for that month or the prior month, you received benefits under an alternative trade adjustment assistance program for older workers established by the Department of Labor. Prior year tax returns Example. Prior year tax returns You received benefits under an alternative trade adjustment assistance program for older workers for October 2013. Prior year tax returns The program was established by the Department of Labor. Prior year tax returns You were an eligible alternative TAA recipient on the first day of October and November. Prior year tax returns RTAA recipient. Prior year tax returns   You were an eligible RTAA recipient on the first day of the month if, for that month or the prior month, you received benefits under a reemployment trade adjustment assistance program for older workers established by the Department of Labor. Prior year tax returns PBGC pension recipient. Prior year tax returns   You were an eligible PBGC pension recipient on the first day of the month, if both of the following apply. Prior year tax returns You were age 55 or older on the first day of the month. Prior year tax returns You received a benefit for that month paid by the PBGC under title IV of the Employee Retirement Income Security Act of 1974 (ERISA). Prior year tax returns If you received a lump-sum payment from the PBGC after August 5, 2002, you meet item (2) above for any month that you would have received a PBGC benefit if you had not received the lump-sum payment. Prior year tax returns How to take the credit. Prior year tax returns   To take the credit, complete Form 8885 and attach it to your Form 1040. Prior year tax returns Include your credit in the total for Form 1040, line 71, and check box c. Prior year tax returns   You must attach health insurance bills (or COBRA payment coupons) and proof of payment for any amounts you include on Form 8885, line 2. Prior year tax returns For details, see Publication 502 or Form 8885. Prior year tax returns More information. Prior year tax returns   For definitions and special rules, including those relating to qualified health insurance plans, qualifying family members, the effect of certain life events, and employer-sponsored health insurance plans, see Publication 502 and the Form 8885 instructions. Prior year tax returns Credit for Excess Social Security Tax or Railroad Retirement Tax Withheld Most employers must withhold social security tax from your wages. Prior year tax returns If you work for a railroad employer, that employer must withhold tier 1 railroad retirement (RRTA) tax and tier 2 RRTA tax. Prior year tax returns If you worked for two or more employers in 2013, you may have had too much social security tax withheld from your pay. Prior year tax returns If one or more of those employers was a railroad employer, too much tier 1 RRTA tax may also have been withheld at the 6. Prior year tax returns 2% rate. Prior year tax returns You can claim the excess social security or tier 1 RRTA tax as a credit against your income tax when you file your return. Prior year tax returns For the tier 1 RRTA tax, only use the portion of the tier 1 RRTA tax that was taxed at the 6. Prior year tax returns 2% rate when figuring if excess tier 1 RRTA tax was withheld; do not include any portion of the tier 1 RRTA tax that was withheld at the Medicare tax rate (1. Prior year tax returns 45%) or the Additional Medicare Tax rate (. Prior year tax returns 9%). Prior year tax returns The following table shows the maximum amount of wages subject to tax and the maximum amount of tax that should have been withheld for 2013. Prior year tax returns Type of tax Maximum  wages subject to tax Maximum tax that should have been withheld Social security or RRTA tier 1 $113,700 $7,049. Prior year tax returns 40 RRTA tier 2 $84,300 $3,709. Prior year tax returns 20 All wages are subject to Medicare tax withholding. Prior year tax returns   Use Form 843, Claim for Refund and Request for Abatement, to claim a refund of excess tier 2 RRTA tax. Prior year tax returns Be sure to attach a copy of all of your W-2 forms. Prior year tax returns Use Worksheet 3-3 in Publication 505, Tax Withholding and Estimated Tax, to help you figure the excess amount. Prior year tax returns Employer's error. Prior year tax returns   If any one employer withheld too much social security or tier 1 RRTA tax, you cannot take the excess as a credit against your income tax. Prior year tax returns The employer should adjust the tax for you. Prior year tax returns If the employer does not adjust the overcollection, you can file a claim for refund using Form 843. Prior year tax returns Joint return. Prior year tax returns   If you are filing a joint return, you cannot add the social security or tier 1 RRTA tax withheld from your spouse's wages to the amount withheld from your wages. Prior year tax returns Figure the withholding separately for you and your spouse to determine if either of you has excess withholding. Prior year tax returns How to figure the credit if you did not work for a railroad. Prior year tax returns   If you did not work for a railroad during 2013, figure the credit as follows: 1. Prior year tax returns Add all social security tax withheld (but not more than $7,049. Prior year tax returns 40 for each employer). Prior year tax returns Enter the total here   2. Prior year tax returns Enter any uncollected social security tax on tips or group-term life insurance included in the total on Form 1040, line 60, identified by “UT”   3. Prior year tax returns Add lines 1 and 2. Prior year tax returns If $7,049. Prior year tax returns 40 or less, stop here. Prior year tax returns You cannot take  the credit   4. Prior year tax returns Social security tax limit 7,049. Prior year tax returns 40 5. Prior year tax returns Credit. Prior year tax returns Subtract line 4 from line 3. Prior year tax returns Enter the result here and on Form 1040, line 69 (or Form 1040A, line 41) $ Example. Prior year tax returns You are married and file a joint return with your spouse who had no gross income in 2013. Prior year tax returns During 2013, you worked for the Brown Technology Company and earned $60,000 in wages. Prior year tax returns Social security tax of $3,720 was withheld. Prior year tax returns You also worked for another employer in 2013 and earned $55,000 in wages. Prior year tax returns $3,410 of social security tax was withheld from these wages. Prior year tax returns Because you worked for more than one employer and your total wages were more than $113,700, you can take a credit of $80. Prior year tax returns 60 for the excess social security tax withheld. Prior year tax returns 1. Prior year tax returns Add all social security tax withheld (but not more than $7,049. Prior year tax returns 40 for each employer). Prior year tax returns Enter the total here $7,130. Prior year tax returns 00 2. Prior year tax returns Enter any uncollected social security tax on tips or group-term life insurance included in the total on Form 1040, line 60, identified by “UT” -0- 3. Prior year tax returns Add lines 1 and 2. Prior year tax returns If $7,049. Prior year tax returns 40 or less, stop here. Prior year tax returns You cannot take the credit 7,130. Prior year tax returns 00 4. Prior year tax returns Social security tax limit 7,049. Prior year tax returns 40 5. Prior year tax returns Credit. Prior year tax returns Subtract line 4 from line 3. Prior year tax returns Enter the result here and on Form 1040, line 69 (or Form 1040A, line 41) $80. Prior year tax returns 60 How to figure the credit if you worked for a railroad. Prior year tax returns   If you were a railroad employee at any time during 2013, figure the credit as follows: 1. Prior year tax returns Add all social security and tier 1 RRTA tax withheld at the 6. Prior year tax returns 2% rate (but not more than $7,049. Prior year tax returns 40 for each employer). Prior year tax returns Enter the total here   2. Prior year tax returns Enter any uncollected social security and tier 1 RRTA tax on tips or group-term life insurance included in the total on Form 1040, line 60, identified by “UT”   3. Prior year tax returns Add lines 1 and 2. Prior year tax returns If $7,049. Prior year tax returns 40 or less, stop here. Prior year tax returns You cannot take  the credit   4. Prior year tax returns Social security and tier 1 RRTA  tax limit 7,049. Prior year tax returns 40 5. Prior year tax returns Credit. Prior year tax returns Subtract line 4 from line 3. Prior year tax returns Enter the result here and on Form 1040, line 69 (or Form 1040A, line 41) $ How to take the credit. Prior year tax returns   Enter the credit on Form 1040, line 69, or include it in the total for Form 1040A, line 41. Prior year tax returns More information. Prior year tax returns   For more information on the credit, see Publication 505. Prior year tax returns Prev  Up  Next   Home   More Online Publications