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State Income Tax Return

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State Income Tax Return

State income tax return Internal Revenue Bulletin:  2012-14  April 2, 2012  Rev. State income tax return Proc. State income tax return 2012-23 Table of Contents SECTION 1. State income tax return PURPOSE SECTION 2. State income tax return BACKGROUND SECTION 3. State income tax return SCOPE SECTION 4. State income tax return APPLICATION. State income tax return 01 Limitations on Depreciation Deductions for Certain Automobiles. State income tax return . State income tax return 02 Inclusions in Income of Lessees of Passenger Automobiles. State income tax return SECTION 5. State income tax return EFFECTIVE DATE SECTION 6. State income tax return DRAFTING INFORMATION SECTION 1. State income tax return PURPOSE This revenue procedure provides: (1) limitations on depreciation deductions for owners of passenger automobiles first placed in service by the taxpayer during calendar year 2012, including separate tables of limitations on depreciation deductions for trucks and vans; and (2) the amounts that must be included in income by lessees of passenger automobiles first leased by the taxpayer during calendar year 2012, including a separate table of inclusion amounts for lessees of trucks and vans. State income tax return The tables detailing these depreciation limitations and lessee inclusion amounts reflect the automobile price inflation adjustments required by § 280F(d)(7) of the Internal Revenue Code. State income tax return SECTION 2. State income tax return BACKGROUND . State income tax return 01 For owners of passenger automobiles, § 280F(a) imposes dollar limitations on the depreciation deduction for the year the taxpayer places the passenger automobile in service and for each succeeding year. State income tax return For passenger automobiles placed in service after 1988, § 280F(d)(7) requires the Internal Revenue Service to increase the amounts allowable as depreciation deductions by a price inflation adjustment amount. State income tax return The method of calculating this price inflation amount for trucks and vans placed in service in or after calendar year 2003 uses a different CPI “automobile component” (the “new trucks” component) than that used in the price inflation amount calculation for other passenger automobiles (the “new cars” component), resulting in somewhat higher depreciation deductions for trucks and vans. State income tax return This change reflects the higher rate of price inflation for trucks and vans since 1988. State income tax return . State income tax return 02 Section 401(a) of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, Pub. State income tax return L. State income tax return No. State income tax return 111-312, 124 Stat. State income tax return 3296 (Dec. State income tax return 17, 2010) (the “Act”) extended the 50 percent additional first year depreciation deduction under § 168(k) to qualified property acquired by the taxpayer after December 31, 2007, and before January 1, 2013, if no written binding contract for the acquisition of the property existed before January 1, 2008, and if the taxpayer places the property in service generally before January 1, 2013. State income tax return Section 168(k)(2)(F)(i) increases the first year depreciation allowed under § 280F(a)(1)(A)(i) by $8,000 for passenger automobiles to which the additional first year depreciation deduction under § 168(k) (hereinafter, referred to as “§ 168(k) additional first year depreciation deduction”) applies. State income tax return . State income tax return 03 Section 168(k)(2)(D)(i) provides that the § 168(k) additional first year depreciation deduction does not apply to any property required to be depreciated under the alternative depreciation system of § 168(g), including property described in § 280F(b)(1). State income tax return Section 168(k)(2)(D)(iii) permits a taxpayer to elect out of the § 168(k) additional first year depreciation deduction for any class of property. State income tax return Section 168(k)(4), as amended by the Act, permits a corporation to elect to increase the alternative minimum tax (“AMT”) credit limitation under § 53(c), instead of claiming the § 168(k) additional first year depreciation deduction for all eligible qualified property placed in service after December 31, 2010, that is round 2 extension property (as defined in § 168(k)(4)(I)(iv)). State income tax return Accordingly, this revenue procedure provides tables for passenger automobiles for which the § 168(k) additional first year depreciation deduction applies. State income tax return This revenue procedure also provides tables for passenger automobiles for which the § 168(k) additional first year depreciation deduction does not apply, either because taxpayer (1) purchased the passenger automobile used; (2) did not use the passenger automobile during 2012 more than 50 percent for business purposes; (3) elected out of the § 168(k) additional first year depreciation deduction pursuant to § 168(k)(2)(D)(iii); or (4) elected to increase the § 53 AMT credit limitation in lieu of claiming § 168(k) additional first year depreciation. State income tax return . State income tax return 04 Section 280F(c) requires a reduction in the deduction allowed to the lessee of a leased passenger automobile. State income tax return The reduction must be substantially equivalent to the limitations on the depreciation deductions imposed on owners of passenger automobiles. State income tax return Under § 1. State income tax return 280F-7(a) of the Income Tax Regulations, this reduction requires a lessee to include in gross income an amount determined by applying a formula to the amount obtained from a table. State income tax return One table applies to lessees of trucks and vans and another table applies to all other passenger automobiles. State income tax return Each table shows inclusion amounts for a range of fair market values for each taxable year after the passenger automobile is first leased. State income tax return SECTION 3. State income tax return SCOPE . State income tax return 01 The limitations on depreciation deductions in section 4. State income tax return 01(2) of this revenue procedure apply to passenger automobiles (other than leased passenger automobiles) that are placed in service by the taxpayer in calendar year 2012, and continue to apply for each taxable year that the passenger automobile remains in service. State income tax return . State income tax return 02 The tables in section 4. State income tax return 02 of this revenue procedure apply to leased passenger automobiles for which the lease term begins during calendar year 2012. State income tax return Lessees of these passenger automobiles must use these tables to determine the inclusion amount for each taxable year during which the passenger automobile is leased. State income tax return See Rev. State income tax return Proc. State income tax return 2007-30, 2007-1 C. State income tax return B. State income tax return 1104, for passenger automobiles first leased during calendar year 2007; Rev. State income tax return Proc. State income tax return 2008-22, 2008-1 C. State income tax return B. State income tax return 658, for passenger automobiles first leased during calendar year 2008; Rev. State income tax return Proc. State income tax return 2009-24, 2009-17 I. State income tax return R. State income tax return B. State income tax return 885, for passenger automobiles first leased during calendar year 2009; Rev. State income tax return Proc. State income tax return 2010-18, 2010-9 I. State income tax return R. State income tax return B. State income tax return 427, as amplified and modified by section 4. State income tax return 03 of Rev. State income tax return Proc. State income tax return 2011-21, 2011-12 I. State income tax return R. State income tax return B. State income tax return 560, for passenger automobiles first leased during calendar year 2010; and Rev. State income tax return Proc. State income tax return 2011-21, for passenger automobiles first leased during calendar year 2011. State income tax return SECTION 4. State income tax return APPLICATION . State income tax return 01 Limitations on Depreciation Deductions for Certain Automobiles. State income tax return (1) Amount of the inflation adjustment. State income tax return (a) Passenger automobiles (other than trucks or vans). State income tax return Under § 280F(d)(7)(B)(i), the automobile price inflation adjustment for any calendar year is the percentage (if any) by which the CPI automobile component for October of the preceding calendar year exceeds the CPI automobile component for October 1987. State income tax return Section 280F(d)(7)(B)(ii) defines the term “CPI automobile component” as the automobile component of the Consumer Price Index for all Urban Consumers published by the Department of Labor. State income tax return The new car component of the CPI was 115. State income tax return 2 for October 1987 and 143. State income tax return 419 for October 2011. State income tax return The October 2011 index exceeded the October 1987 index by 28. State income tax return 219. State income tax return Therefore, the automobile price inflation adjustment for 2012 for passenger automobiles (other than trucks and vans) is 24. State income tax return 5 percent (28. State income tax return 219/115. State income tax return 2 x 100%). State income tax return The dollar limitations in § 280F(a) are multiplied by a factor of 0. State income tax return 245, and the resulting increases, after rounding to the nearest $100, are added to the 1988 limitations to give the depreciation limitations applicable to passenger automobiles (other than trucks and vans) for calendar year 2012. State income tax return This adjustment applies to all passenger automobiles (other than trucks and vans) that are first placed in service in calendar year 2012. State income tax return (b) Trucks and vans. State income tax return To determine the dollar limitations for trucks and vans first placed in service during calendar year 2012, the Service uses the new truck component of the CPI instead of the new car component. State income tax return The new truck component of the CPI was 112. State income tax return 4 for October 1987 and 146. State income tax return 607 for October 2011. State income tax return The October 2011 index exceeded the October 1987 index by 34. State income tax return 207. State income tax return Therefore, the automobile price inflation adjustment for 2012 for trucks and vans is 30. State income tax return 43 percent (34. State income tax return 207/112. State income tax return 4 x 100%). State income tax return The dollar limitations in § 280F(a) are multiplied by a factor of 0. State income tax return 3043, and the resulting increases, after rounding to the nearest $100, are added to the 1988 limitations to give the depreciation limitations for trucks and vans. State income tax return This adjustment applies to all trucks and vans that are first placed in service in calendar year 2012. State income tax return (2) Amount of the limitation. State income tax return Tables 1 through 4 contain the dollar amount of the depreciation limitation for each taxable year for passenger automobiles a taxpayer places in service in calendar year 2012. State income tax return Use Table 1 for a passenger automobile (other than a truck or van), and Table 2 for a truck or van, placed in service in calendar year 2012 for which the § 168(k) additional first year depreciation deduction applies. State income tax return Use Table 3 for a passenger automobile (other than a truck or van), and Table 4 for a truck or van, placed in service in calendar year 2012 for which the § 168(k) additional first year depreciation deduction does not apply. State income tax return REV. State income tax return PROC. State income tax return 2012-23 TABLE 1 DEPRECIATION LIMITATIONS FOR PASSENGER AUTOMOBILES (THAT ARE NOT TRUCKS OR VANS) PLACED IN SERVICE IN CALENDAR YEAR 2012 FOR WHICH THE § 168(k) ADDITIONAL FIRST YEAR DEPRECIATION DEDUCTION APPLIES Tax Year Amount 1st Tax Year $11,160 2nd Tax Year $5,100 3rd Tax Year $3,050 Each Succeeding Year $1,875 REV. State income tax return PROC. State income tax return 2012-23 TABLE 2 DEPRECIATION LIMITATIONS FOR TRUCKS AND VANS PLACED IN SERVICE IN CALENDAR YEAR 2012 FOR WHICH THE § 168(k) ADDITIONAL FIRST YEAR DEPRECIATION DEDUCTION APPLIES Tax Year Amount 1st Tax Year $11,360 2nd Tax Year $5,300 3rd Tax Year $3,150 Each Succeeding Year $1,875 REV. State income tax return PROC. State income tax return 2012-23 TABLE 3 DEPRECIATION LIMITATIONS FOR PASSENGER AUTOMOBILES (THAT ARE NOT TRUCKS OR VANS) PLACED IN SERVICE IN CALENDAR YEAR 2012 FOR WHICH THE § 168(k) ADDITIONAL FIRST YEAR DEPRECIATION DEDUCTION DOES NOT APPLY Tax Year Amount 1st Tax Year $3,160 2nd Tax Year $5,100 3rd Tax Year $3,050 Each Succeeding Year $1,875 REV. State income tax return PROC. State income tax return 2012-23 TABLE 4 DEPRECIATION LIMITATIONS FOR TRUCKS AND VANS PLACED IN SERVICE IN CALENDAR YEAR 2012 FOR WHICH THE § 168(k) ADDITIONAL FIRST YEAR DEPRECIATION DEDUCTION DOES NOT APPLY Tax Year Amount 1st Tax Year $3,360 2nd Tax Year $5,300 3rd Tax Year $3,150 Each Succeeding Year $1,875 . State income tax return 02 Inclusions in Income of Lessees of Passenger Automobiles. State income tax return A taxpayer must follow the procedures in § 1. State income tax return 280F-7(a) for determining the inclusion amounts for passenger automobiles first leased in calendar year 2012. State income tax return In applying these procedures, lessees of passenger automobiles other than trucks and vans should use Table 5 of this revenue procedure, while lessees of trucks and vans should use Table 6 of this revenue procedure. State income tax return REV. State income tax return PROC. State income tax return 2012-23 TABLE 5 DOLLAR AMOUNTS FOR PASSENGER AUTOMOBILES (THAT ARE NOT TRUCKS OR VANS) WITH A LEASE TERM BEGINNING IN CALENDAR YEAR 2012 Fair Market Value of Passenger Automobile Tax Year During Lease Over Not Over 1st 2nd 3rd 4th 5th & Later $18,500 $19,000 2 4 5 6 8 19,000 19,500 2 4 7 7 9 19,500 20,000 2 5 8 8 10 20,000 20,500 3 5 9 10 11 20,500 21,000 3 6 9 12 12 21,000 21,500 3 7 10 12 14 21,500 22,000 3 8 11 13 16 22,000 23,000 4 8 13 15 17 23,000 24,000 4 10 15 17 20 24,000 25,000 5 11 17 19 23 25,000 26,000 6 12 19 21 26 26,000 27,000 6 14 20 24 28 27,000 28,000 7 15 22 26 31 28,000 29,000 7 16 25 28 33 29,000 30,000 8 18 25 32 35 30,000 31,000 9 19 27 34 38 31,000 32,000 9 20 30 36 41 32,000 33,000 10 21 32 38 43 33,000 34,000 10 23 33 41 46 34,000 35,000 11 24 35 43 49 35,000 36,000 12 25 37 45 52 36,000 37,000 12 27 39 47 54 37,000 38,000 13 28 41 49 57 38,000 39,000 13 29 43 52 59 39,000 40,000 14 30 45 54 62 40,000 41,000 14 32 47 56 65 41,000 42,000 15 33 49 58 68 42,000 43,000 16 34 51 61 70 43,000 44,000 16 36 52 63 73 44,000 45,000 17 37 54 66 75 45,000 46,000 17 38 57 67 78 46,000 47,000 18 39 59 70 80 47,000 48,000 19 40 61 72 83 48,000 49,000 19 42 62 75 86 49,000 50,000 20 43 64 77 89 50,000 51,000 20 45 66 79 91 51,000 52,000 21 46 68 81 94 52,000 53,000 21 47 70 84 96 53,000 54,000 22 48 72 86 99 54,000 55,000 23 49 74 88 102 55,000 56,000 23 51 76 90 104 56,000 57,000 24 52 78 92 107 57,000 58,000 24 54 79 95 110 58,000 59,000 25 55 81 97 113 59,000 60,000 26 56 83 100 115 60,000 62,000 26 58 86 103 119 62,000 64,000 28 60 90 108 124 64,000 66,000 29 63 94 112 129 66,000 68,000 30 66 97 117 135 68,000 70,000 31 68 102 121 140 70,000 72,000 32 71 105 126 145 72,000 74,000 33 74 109 130 151 74,000 76,000 35 76 113 135 156 76,000 78,000 36 78 117 140 161 78,000 80,000 37 81 120 145 166 80,000 85,000 39 86 127 152 176 85,000 90,000 42 92 137 163 189 90,000 95,000 45 98 147 175 202 95,000 100,000 48 105 155 187 215 100,000 110,000 52 115 170 203 235 110,000 120,000 58 127 189 227 262 120,000 130,000 64 140 208 250 288 130,000 140,000 70 153 227 272 315 140,000 150,000 75 166 246 296 340 150,000 160,000 81 179 265 318 368 160,000 170,000 87 192 284 341 394 170,000 180,000 93 204 304 364 420 180,000 190,000 99 217 323 387 446 190,000 200,000 105 230 342 409 473 200,000 210,000 111 243 361 432 499 210,000 220,000 116 256 380 455 526 220,000 230,000 122 269 399 478 552 230,000 240,000 128 282 418 501 578 240,000 and up 134 294 437 524 605 REV. State income tax return PROC. State income tax return 2012-23 TABLE 6 DOLLAR AMOUNTS FOR TRUCKS AND VANS WITH A LEASE TERM BEGINNING IN CALENDAR YEAR 2012 Fair Market Value of Truck or Van Tax Year During Lease Over Not Over 1st 2nd 3rd 4th 5th & Later $19,000 $19,500 1 4 5 6 7 19,500 20,000 2 4 6 7 9 20,000 20,500 2 5 7 8 10 20,500 21,000 2 5 8 10 11 21,000 21,500 3 6 9 10 13 21,500 22,000 3 6 10 12 14 22,000 23,000 3 8 11 14 15 23,000 24,000 4 9 13 16 18 24,000 25,000 4 10 15 19 21 25,000 26,000 5 11 17 21 24 26,000 27,000 6 12 19 23 26 27,000 28,000 6 14 21 25 29 28,000 29,000 7 15 23 27 32 29,000 30,000 7 17 24 30 34 30,000 31,000 8 18 26 32 37 31,000 32,000 9 19 28 34 40 32,000 33,000 9 20 31 36 42 33,000 34,000 10 21 33 39 44 34,000 35,000 10 23 34 41 48 35,000 36,000 11 24 36 44 50 36,000 37,000 12 25 38 46 53 37,000 38,000 12 27 40 48 55 38,000 39,000 13 28 42 50 58 39,000 40,000 13 29 44 53 60 40,000 41,000 14 31 45 55 63 41,000 42,000 14 32 48 57 66 42,000 43,000 15 33 50 59 69 43,000 44,000 16 34 52 61 72 44,000 45,000 16 36 53 64 74 45,000 46,000 17 37 55 66 77 46,000 47,000 17 38 58 68 79 47,000 48,000 18 40 59 70 82 48,000 49,000 19 41 61 73 84 49,000 50,000 19 42 63 75 87 50,000 51,000 20 43 65 78 89 51,000 52,000 20 45 66 80 93 52,000 53,000 21 46 68 83 95 53,000 54,000 21 48 70 84 98 54,000 55,000 22 49 72 87 100 55,000 56,000 23 50 74 89 103 56,000 57,000 23 51 76 92 105 57,000 58,000 24 52 78 94 108 58,000 59,000 24 54 80 96 111 59,000 60,000 25 55 82 98 114 60,000 62,000 26 57 85 101 118 62,000 64,000 27 60 88 106 123 64,000 66,000 28 62 93 110 128 66,000 68,000 29 65 96 115 134 68,000 70,000 30 67 100 120 139 70,000 72,000 32 70 103 125 144 72,000 74,000 33 72 108 129 149 74,000 76,000 34 75 111 134 155 76,000 78,000 35 78 115 138 160 78,000 80,000 36 80 119 143 165 80,000 85,000 38 85 125 151 175 85,000 90,000 41 91 135 163 187 90,000 95,000 44 98 144 174 201 95,000 100,000 47 104 154 185 214 100,000 110,000 52 113 169 202 234 110,000 120,000 57 127 187 225 261 120,000 130,000 63 139 207 248 287 130,000 140,000 69 152 226 271 313 140,000 150,000 75 165 245 294 339 150,000 160,000 81 178 264 316 366 160,000 170,000 87 190 283 340 392 170,000 180,000 92 204 302 362 419 180,000 190,000 98 216 322 385 445 190,000 200,000 104 229 340 409 471 200,000 210,000 110 242 359 431 498 210,000 220,000 116 255 378 454 524 220,000 230,000 122 267 398 477 551 230,000 240,000 127 281 416 500 577 240,000 and up 133 294 435 523 603 SECTION 5. State income tax return EFFECTIVE DATE This revenue procedure applies to passenger automobiles that a taxpayer first places in service or first leases during calendar year 2012. State income tax return SECTION 6. State income tax return DRAFTING INFORMATION The principal author of this revenue procedure is Bernard P. State income tax return Harvey of the Office of Associate Chief Counsel (Income Tax & Accounting). State income tax return For further information regarding this revenue procedure, contact Mr. State income tax return Harvey at (202) 622-4930 (not a toll-free call). State income tax return Prev  Up  Next   Home   More Internal Revenue Bulletins
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Department of Housing and Urban Development (HUD)

The Department of Housing and Urban Development administers programs that provide housing and community development assistance. The Department also works to ensure fair and equal housing opportunity for all.

The State Income Tax Return

State income tax return 2. State income tax return   Source of Income Table of Contents Introduction Topics - This chapter discusses: Resident Aliens Nonresident AliensInterest Income Dividends Guarantee of Indebtedness Personal Services Transportation Income Scholarships, Grants, Prizes, and Awards Pensions and Annuities Rents or Royalties Real Property Personal Property Community Income Introduction After you have determined your alien status, you must determine the source of your income. State income tax return This chapter will help you determine the source of different types of income you may receive during the tax year. State income tax return This chapter also discusses special rules for married individuals who are domiciled in a country with community property laws. State income tax return Topics - This chapter discusses: Income source rules, and Community income. State income tax return Resident Aliens A resident alien's income is generally subject to tax in the same manner as a U. State income tax return S. State income tax return citizen. State income tax return If you are a resident alien, you must report all interest, dividends, wages, or other compensation for services, income from rental property or royalties, and other types of income on your U. State income tax return S. State income tax return tax return. State income tax return You must report these amounts from sources within and outside the United States. State income tax return Nonresident Aliens A nonresident alien usually is subject to U. State income tax return S. State income tax return income tax only on U. State income tax return S. State income tax return source income. State income tax return Under limited circumstances, certain foreign source income is subject to U. State income tax return S. State income tax return tax. State income tax return See Foreign Income in chapter 4. State income tax return The general rules for determining U. State income tax return S. State income tax return source income that apply to most nonresident aliens are shown in Table 2-1. State income tax return The following discussions cover the general rules as well as the exceptions to these rules. State income tax return Not all items of U. State income tax return S. State income tax return source income are taxable. State income tax return See chapter 3. State income tax return Interest Income Generally, U. State income tax return S. State income tax return source interest income includes the following items. State income tax return Interest on bonds, notes, or other interest-bearing obligations of U. State income tax return S. State income tax return residents or domestic corporations. State income tax return Interest paid by a domestic or foreign partnership or foreign corporation engaged in a U. State income tax return S. State income tax return trade or business at any time during the tax year. State income tax return Original issue discount. State income tax return Interest from a state, the District of Columbia, or the U. State income tax return S. State income tax return Government. State income tax return The place or manner of payment is immaterial in determining the source of the income. State income tax return A substitute interest payment made to the transferor of a security in a securities lending transaction or a sale-repurchase transaction is sourced in the same manner as the interest on the transferred security. State income tax return Exceptions. State income tax return   U. State income tax return S. State income tax return source interest income does not include the following items. State income tax return Interest paid by a resident alien or a domestic corporation on obligations issued before August 10, 2010, if for the 3-year period ending with the close of the payer's tax year preceding the interest payment, at least 80% of the payer's total gross income: Is from sources outside the United States, and Is attributable to the active conduct of a trade or business by the individual or corporation in a foreign country or a U. State income tax return S. State income tax return possession. State income tax return However, the interest will be considered U. State income tax return S. State income tax return source interest income if either of the following apply. State income tax return The recipient of the interest is related to the resident alien or domestic corporation. State income tax return See section 954(d)(3) for the definition of related person. State income tax return The terms of the obligation are significantly modified after August 9, 2010. State income tax return Any extension of the term of the obligation is considered a significant modification. State income tax return Interest paid by a foreign branch of a domestic corporation or a domestic partnership on deposits or withdrawable accounts with mutual savings banks, cooperative banks, credit unions, domestic building and loan associations, and other savings institutions chartered and supervised as savings and loan or similar associations under federal or state law if the interest paid or credited can be deducted by the association. State income tax return Interest on deposits with a foreign branch of a domestic corporation or domestic partnership, but only if the branch is in the commercial banking business. State income tax return Dividends In most cases, dividend income received from domestic corporations is U. State income tax return S. State income tax return source income. State income tax return Dividend income from foreign corporations is usually foreign source income. State income tax return Exceptions to both of these rules are discussed below. State income tax return A substitute dividend payment made to the transferor of a security in a securities lending transaction or a sale-repurchase transaction is sourced in the same manner as a distribution on the transferred security. State income tax return Dividend equivalent payments. State income tax return   U. State income tax return S. State income tax return source dividends also include all dividend equivalent payments. State income tax return Dividend equivalent payments include substitute dividends, payments made pursuant to a specified notional principal contract, and all similar payments that, directly or indirectly, are contingent on or determined by reference to, the payment of a dividend from U. State income tax return S. State income tax return sources. State income tax return    The Internal Revenue Service has issued final regulations that would affect the treatment of dividend equivalent payments and specified notional principal contracts. State income tax return You can view this regulation at www. State income tax return irs. State income tax return gov/irb/2013-52_IRB/ar08. State income tax return html. State income tax return First exception. State income tax return   Dividends received from a domestic corporation are not U. State income tax return S. State income tax return source income if the corporation elects to take the American Samoa economic development credit. State income tax return Second exception. State income tax return   Part of the dividends received from a foreign corporation is U. State income tax return S. State income tax return source income if 25% or more of its total gross income for the 3-year period ending with the close of its tax year preceding the declaration of dividends was effectively connected with a trade or business in the United States. State income tax return If the corporation was formed less than 3 years before the declaration, use its total gross income from the time it was formed. State income tax return Determine the part that is U. State income tax return S. State income tax return source income by multiplying the dividend by the following fraction. State income tax return   Foreign corporation's gross income connected with a U. State income tax return S. State income tax return trade or business for the 3-year period     Foreign corporation's gross income from all sources for that period   Guarantee of Indebtedness Certain amounts received directly or indirectly, for the provision of a guarantee of indebtedness issued after September 27, 2010, are U. State income tax return S. State income tax return source income. State income tax return They must be paid by a noncorporate resident or U. State income tax return S. State income tax return corporation or by any foreign person if the amounts are effectively connected with the conduct of a U. State income tax return S. State income tax return trade or business. State income tax return For more information, see Internal Revenue Code sections 861(a)(9) and 862(a)(9). State income tax return Personal Services All wages and any other compensation for services performed in the United States are considered to be from sources in the United States. State income tax return The only exceptions to this rule are discussed in chapter 3 under Employees of foreign persons, organizations, or offices, and under Crew members. State income tax return If you are an employee and receive compensation for labor or personal services performed both inside and outside the United States, special rules apply in determining the source of the compensation. State income tax return Compensation (other than certain fringe benefits) is sourced on a time basis. State income tax return Certain fringe benefits (such as housing and education) are sourced on a geographical basis. State income tax return Or, you may be permitted to use an alternative basis to determine the source of compensation. State income tax return See Alternative Basis , later. State income tax return Multi-level marketing. State income tax return   Certain companies sell products through a multi-level marketing arrangement, such that an upper-tier distributor, who has sponsored a lower-tier distributor, is entitled to a payment from the company based on certain activities of that lower-tier distributor. State income tax return Generally, depending on the facts, payments from such multi-level marketing companies to independent (non-employee) distributors (upper-tier distributors) that are based on the sales or purchases of persons whom they have sponsored (lower-tier distributors) constitute income for the performance of personal services in recruiting, training, and supporting the lower-tier distributors. State income tax return The source of such income is generally based on where the services of the upper-tier distributor are performed, and may, depending on the facts, be considered multi-year compensation, with the source of income determined over the period to which such compensation is attributable. State income tax return Self-employed individuals. State income tax return   If you are self-employed, you determine the source of compensation for labor or personal services from self-employment on the basis that most correctly reflects the proper source of that income under the facts and circumstances of your particular case. State income tax return In many cases, the facts and circumstances will call for an apportionment on a time basis as explained next. State income tax return Time Basis Use a time basis to figure your U. State income tax return S. State income tax return source compensation (other than the fringe benefits discussed later). State income tax return Do this by multiplying your total compensation (other than the fringe benefits discussed later) by the following fraction:   Number of days you performed services in the United States during the year     Total number of days you performed services during the year   You can use a unit of time less than a day in the above fraction, if appropriate. State income tax return The time period for which the compensation is made does not have to be a year. State income tax return Instead, you can use another distinct, separate, and continuous time period if you can establish to the satisfaction of the IRS that this other period is more appropriate. State income tax return Example 1. State income tax return Christina Brooks, a resident of the Netherlands, worked 240 days for a U. State income tax return S. State income tax return company during the tax year. State income tax return She received $80,000 in compensation. State income tax return None of it was for fringe benefits. State income tax return Christina performed services in the United States for 60 days and performed services in the Netherlands for 180 days. State income tax return Using the time basis for determining the source of compensation, $20,000 ($80,000 × 60/240) is her U. State income tax return S. State income tax return source income. State income tax return Example 2. State income tax return Rob Waters, a resident of South Africa, is employed by a corporation. State income tax return His annual salary is $100,000. State income tax return None of it is for fringe benefits. State income tax return During the first quarter of the year he worked entirely within the United States. State income tax return On April 1, Rob was transferred to Singapore for the remainder of the year. State income tax return Rob is able to establish that the first quarter of the year and the last 3 quarters of the year are two separate, distinct, and continuous periods of time. State income tax return Accordingly, $25,000 of Rob's annual salary is attributable to the first quarter of the year (. State income tax return 25 × $100,000). State income tax return All of it is U. State income tax return S. State income tax return source income because he worked entirely within the United States during that quarter. State income tax return The remaining $75,000 is attributable to the last three quarters of the year. State income tax return During those quarters, he worked 150 days in Singapore and 30 days in the United States. State income tax return His periodic performance of services in the United States did not result in distinct, separate, and continuous periods of time. State income tax return Of this $75,000, $12,500 ($75,000 × 30/180) is U. State income tax return S. State income tax return source income. State income tax return Multi-year compensation. State income tax return   The source of multi-year compensation is generally determined on a time basis over the period to which the compensation is attributable. State income tax return Multi-year compensation is compensation that is included in your income in one tax year but that is attributable to a period that includes two or more tax years. State income tax return   You determine the period to which the compensation is attributable based on the facts and circumstances of your case. State income tax return For example, an amount of compensation that specifically relates to a period of time that includes several calendar years is attributable to the entire multi-year period. State income tax return   The amount of compensation treated as from U. State income tax return S. State income tax return sources is figured by multiplying the total multi-year compensation by a fraction. State income tax return The numerator of the fraction is the number of days (or unit of time less than a day, if appropriate) that you performed labor or personal services in the United States in connection with the project. State income tax return The denominator of the fraction is the total number of days (or unit of time less than a day, if appropriate) that you performed labor or personal services in connection with the project. State income tax return Geographical Basis Compensation you receive as an employee in the form of the following fringe benefits is sourced on a geographical basis. State income tax return Housing. State income tax return Education. State income tax return Local transportation. State income tax return Tax reimbursement. State income tax return Hazardous or hardship duty pay as defined in Regulations section 1. State income tax return 861-4(b)(2)(ii)(D)(5). State income tax return Moving expense reimbursement. State income tax return The amount of fringe benefits must be reasonable and you must substantiate them by adequate records or by sufficient evidence. State income tax return Principal place of work. State income tax return   The above fringe benefits, except for tax reimbursement and hazardous or hardship duty pay, are sourced based on your principal place of work. State income tax return Your principal place of work is usually the place where you spend most of your working time. State income tax return This could be your office, plant, store, shop, or other location. State income tax return If there is no one place where you spend most of your working time, your main job location is the place where your work is centered, such as where you report for work or are otherwise required to “base” your work. State income tax return   If you have more than one job at any time, your main job location depends on the facts in each case. State income tax return The more important factors to be considered are: The total time you spend at each place, The amount of work you do at each place, and How much money you earn at each place. State income tax return Housing. State income tax return   The source of a housing fringe benefit is determined based on the location of your principal place of work. State income tax return A housing fringe benefit includes payments to you or on your behalf (and your family's if your family resides with you) only for the following. State income tax return Rent. State income tax return Utilities (except telephone charges). State income tax return Real and personal property insurance. State income tax return Occupancy taxes not deductible under section 164 or 216(a). State income tax return Nonrefundable fees for securing a leasehold. State income tax return Rental of furniture and accessories. State income tax return Household repairs. State income tax return Residential parking. State income tax return Fair rental value of housing provided in kind by your employer. State income tax return   A housing fringe benefit does not include: Deductible interest and taxes (including deductible interest and taxes of a tenant-stockholder in a cooperative housing corporation), The cost of buying property, including principal payments on a mortgage, The cost of domestic labor (maids, gardeners, etc. State income tax return ), Pay television subscriptions, Improvements and other expenses that increase the value or appreciably prolong the life of property, Purchased furniture or accessories, Depreciation or amortization of property or improvements, The value of meals or lodging that you exclude from gross income, or The value of meals or lodging that you deduct as moving expenses. State income tax return Education. State income tax return   The source of an education fringe benefit for the education expenses of your dependents is determined based on the location of your principal place of work. State income tax return An education fringe benefit includes payments only for the following expenses for education at an elementary or secondary school. State income tax return Tuition, fees, academic tutoring, special needs services for a special needs student, books, supplies, and other equipment. State income tax return Room and board and uniforms that are required or provided by the school in connection with enrollment or attendance. State income tax return Local transportation. State income tax return   The source of a local transportation fringe benefit is determined based on the location of your principal place of work. State income tax return Your local transportation fringe benefit is the amount that you receive as compensation for local transportation for you or your spouse or dependents at the location of your principal place of work. State income tax return The amount treated as a local transportation fringe benefit is limited to actual expenses incurred for local transportation and the fair rental value of any employer-provided vehicle used predominantly by you, your spouse, or your dependents for local transportation. State income tax return Actual expenses do not include the cost (including interest) of any vehicle purchased by you or on your behalf. State income tax return Tax reimbursement. State income tax return   The source of a tax reimbursement fringe benefit is determined based on the location of the jurisdiction that imposed the tax for which you are reimbursed. State income tax return Moving expense reimbursement. State income tax return   The source of a moving expense reimbursement is generally based on the location of your new principal place of work. State income tax return However, the source is determined based on the location of your former principal place of work if you provide sufficient evidence that such determination of source is more appropriate under the facts and circumstances of your case. State income tax return Sufficient evidence generally requires an agreement between you and your employer, or a written statement of company policy, which is reduced to writing before the move and which is entered into or established to induce you or other employees to move to another country. State income tax return The written statement or agreement must state that your employer will reimburse you for moving expenses that you incur to return to your former principal place of work regardless of whether you continue to work for your employer after returning to that location. State income tax return It may contain certain conditions upon which the right to reimbursement is determined as long as those conditions set forth standards that are definitely ascertainable and can only be fulfilled prior to, or through completion of, your return move to your former principal place of work. State income tax return Alternative Basis If you are an employee, you can determine the source of your compensation under an alternative basis if you establish to the satisfaction of the IRS that, under the facts and circumstances of your case, the alternative basis more properly determines the source of your compensation than the time or geographical basis. State income tax return If you use an alternative basis, you must keep (and have available for inspection) records to document why the alternative basis more properly determines the source of your compensation. State income tax return Also, if your total compensation from all sources is $250,000 or more, check “Yes” to both questions on line K on page 5 of Form 1040NR, and attach a written statement to your tax return that sets forth all of the following. State income tax return Your name and social security number (written across the top of the statement). State income tax return The specific compensation income, or the specific fringe benefit, for which you are using the alternative basis. State income tax return For each item in (2), the alternative basis of allocation of source used. State income tax return For each item in (2), a computation showing how the alternative allocation was computed. State income tax return A comparison of the dollar amount of the U. State income tax return S. State income tax return compensation and foreign compensation sourced under both the alternative basis and the time or geographical basis discussed earlier. State income tax return Transportation Income Transportation income is income from the use of a vessel or aircraft or for the performance of services directly related to the use of any vessel or aircraft. State income tax return This is true whether the vessel or aircraft is owned, hired, or leased. State income tax return The term “vessel or aircraft” includes any container used in connection with a vessel or aircraft. State income tax return All income from transportation that begins and ends in the United States is treated as derived from sources in the United States. State income tax return If the transportation begins or ends in the United States, 50% of the transportation income is treated as derived from sources in the United States. State income tax return For transportation income from personal services, 50% of the income is U. State income tax return S. State income tax return source income if the transportation is between the United States and a U. State income tax return S. State income tax return possession. State income tax return For nonresident aliens, this only applies to income derived from, or in connection with, an aircraft. State income tax return For information on how U. State income tax return S. State income tax return source transportation income is taxed, see chapter 4. State income tax return Scholarships, Grants, Prizes, and Awards Generally, the source of scholarships, fellowship grants, grants, prizes, and awards is the residence of the payer regardless of who actually disburses the funds. State income tax return However, see Activities to be performed outside the United States , later. State income tax return For example, payments for research or study in the United States made by the United States, a noncorporate U. State income tax return S. State income tax return resident, or a domestic corporation, are from U. State income tax return S. State income tax return sources. State income tax return Similar payments from a foreign government or foreign corporation are foreign source payments even though the funds may be disbursed through a U. State income tax return S. State income tax return agent. State income tax return Payments made by an entity designated as a public international organization under the International Organizations Immunities Act are from foreign sources. State income tax return Activities to be performed outside the United States. State income tax return   Scholarships, fellowship grants, targeted grants, and achievement awards received by nonresident aliens for activities performed, or to be performed, outside the United States are not U. State income tax return S. State income tax return source income. State income tax return    These rules do not apply to amounts paid as salary or other compensation for services. State income tax return See Personal Services, earlier, for the source rules that apply. State income tax return Pensions and Annuities If you receive a pension from a domestic trust for services performed both in and outside the United States, part of the pension payment is from U. State income tax return S. State income tax return sources. State income tax return That part is the amount attributable to earnings of the pension plan and the employer contributions made for services performed in the United States. State income tax return This applies whether the distribution is made under a qualified or nonqualified stock bonus, pension, profit-sharing, or annuity plan (whether or not funded). State income tax return If you performed services as an employee of the United States, you may receive a distribution from the U. State income tax return S. State income tax return Government under a plan, such as the Civil Service Retirement System, that is treated as a qualified pension plan. State income tax return Your U. State income tax return S. State income tax return source income is the otherwise taxable amount of the distribution that is attributable to your total U. State income tax return S. State income tax return Government basic pay other than tax-exempt pay for services performed outside the United States. State income tax return Rents or Royalties Your U. State income tax return S. State income tax return source income includes rent and royalty income received during the tax year from property located in the United States or from any interest in that property. State income tax return U. State income tax return S. State income tax return source income also includes rents or royalties for the use of, or for the privilege of using, in the United States, intangible property such as patents, copyrights, secret processes and formulas, goodwill, trademarks, franchises, and similar property. State income tax return Real Property Real property is land and buildings and generally anything built on, growing on, or attached to land. State income tax return Gross income from sources in the United States includes gains, profits, and income from the sale or other disposition of real property located in the United States. State income tax return Natural resources. State income tax return   The income from the sale of products of any farm, mine, oil or gas well, other natural deposit, or timber located in the United States and sold in a foreign country, or located in a foreign country and sold in the United States, is partly from sources in the United States. State income tax return For information on determining that part, see section 1. State income tax return 863-1(b) of the regulations. State income tax return Table 2-1. State income tax return Summary of Source Rules for Income of Nonresident Aliens Item of income Factor determining source Salaries, wages, other compensation Where services performed Business income:   Personal services Where services performed Sale of inventory—purchased Where sold Sale of inventory—produced Allocation Interest Residence of payer Dividends Whether a U. State income tax return S. State income tax return or foreign corporation* Rents Location of property Royalties:   Natural resources Location of property Patents, copyrights, etc. State income tax return Where property is used Sale of real property Location of property Sale of personal property Seller's tax home (but see Personal Property , later, for exceptions) Pension distributions attributable to contributions Where services were performed that earned the pension Investment earnings on pension contributions Location of pension trust Sale of natural resources Allocation based on fair market value of product at export terminal. State income tax return For more information, see section 1. State income tax return 863-1(b) of the regulations. State income tax return *Exceptions include: a) Dividends paid by a U. State income tax return S. State income tax return corporation are foreign source if the corporation elects the  American Samoa economic development credit. State income tax return  b) Part of a dividend paid by a foreign corporation is U. State income tax return S. State income tax return source if at least 25% of the  corporation's gross income is effectively connected with a U. State income tax return S. State income tax return trade or business for the  3 tax years before the year in which the dividends are declared. State income tax return Personal Property Personal property is property, such as machinery, equipment, or furniture, that is not real property. State income tax return Gain or loss from the sale or exchange of personal property generally has its source in the United States if you have a tax home in the United States. State income tax return If you do not have a tax home in the United States, the gain or loss generally is considered to be from sources outside the United States. State income tax return Tax home. State income tax return   Your tax home is the general area of your main place of business, employment, or post of duty, regardless of where you maintain your family home. State income tax return Your tax home is the place where you permanently or indefinitely work as an employee or a self-employed individual. State income tax return If you do not have a regular or main place of business because of the nature of your work, then your tax home is the place where you regularly live. State income tax return If you do not fit either of these categories, you are considered an itinerant and your tax home is wherever you work. State income tax return Inventory property. State income tax return   Inventory property is personal property that is stock in trade or that is held primarily for sale to customers in the ordinary course of your trade or business. State income tax return Income from the sale of inventory that you purchased is sourced where the property is sold. State income tax return Generally, this is where title to the property passes to the buyer. State income tax return For example, income from the sale of inventory in the United States is U. State income tax return S. State income tax return source income, whether you purchased it in the United States or in a foreign country. State income tax return   Income from the sale of inventory property that you produced in the United States and sold outside the United States (or vice versa) is partly from sources in the United States and partly from sources outside the United States. State income tax return For information on making this allocation, see section 1. State income tax return 863-3 of the regulations. State income tax return   These rules apply even if your tax home is not in the United States. State income tax return Depreciable property. State income tax return   To determine the source of any gain from the sale of depreciable personal property, you must first figure the part of the gain that is not more than the total depreciation adjustments on the property. State income tax return You allocate this part of the gain to sources in the United States based on the ratio of U. State income tax return S. State income tax return depreciation adjustments to total depreciation adjustments. State income tax return The rest of this part of the gain is considered to be from sources outside the United States. State income tax return   For this purpose, “U. State income tax return S. State income tax return depreciation adjustments” are the depreciation adjustments to the basis of the property that are allowable in figuring taxable income from U. State income tax return S. State income tax return sources. State income tax return However, if the property is used predominantly in the United States during a tax year, all depreciation deductions allowable for that year are treated as U. State income tax return S. State income tax return depreciation adjustments. State income tax return But there are some exceptions for certain transportation, communications, and other property used internationally. State income tax return   Gain from the sale of depreciable property that is more than the total depreciation adjustments on the property is sourced as if the property were inventory property, as discussed above. State income tax return   A loss is sourced in the same way as the depreciation deductions were sourced. State income tax return However, if the property was used predominantly in the United States, the entire loss reduces U. State income tax return S. State income tax return source income. State income tax return   The basis of property usually means the cost (money plus the fair market value of other property or services) of property you acquire. State income tax return Depreciation is an amount deducted to recover the cost or other basis of a trade or business asset. State income tax return The amount you can deduct depends on the property's cost, when you began using the property, how long it will take to recover your cost, and which depreciation method you use. State income tax return A depreciation deduction is any deduction for depreciation or amortization or any other allowable deduction that treats a capital expenditure as a deductible expense. State income tax return Intangible property. State income tax return   Intangible property includes patents, copyrights, secret processes or formulas, goodwill, trademarks, trade names, or other like property. State income tax return The gain from the sale of amortizable or depreciable intangible property, up to the previously allowable amortization or depreciation deductions, is sourced in the same way as the original deductions were sourced. State income tax return This is the same as the source rule for gain from the sale of depreciable property. State income tax return See Depreciable property , earlier, for details on how to apply this rule. State income tax return   Gain in excess of the amortization or depreciation deductions is sourced in the country where the property is used if the income from the sale is contingent on the productivity, use, or disposition of that property. State income tax return If the income is not contingent on the productivity, use, or disposition of the property, the income is sourced according to your tax home as discussed earlier. State income tax return If payments for goodwill do not depend on its productivity, use, or disposition, their source is the country in which the goodwill was generated. State income tax return Sales through offices or fixed places of business. State income tax return   Despite any of the earlier rules, if you do not have a tax home in the United States, but you maintain an office or other fixed place of business in the United States, treat the income from any sale of personal property (including inventory property) that is attributable to that office or place of business as U. State income tax return S. State income tax return source income. State income tax return However, this rule does not apply to sales of inventory property for use, disposition, or consumption outside the United States if your office or other fixed place of business outside the United States materially participated in the sale. State income tax return   If you have a tax home in the United States but maintain an office or other fixed place of business outside the United States, income from sales of personal property, other than inventory, depreciable property, or intangibles, that is attributable to that foreign office or place of business may be treated as U. State income tax return S. State income tax return source income. State income tax return The income is treated as U. State income tax return S. State income tax return source income if an income tax of less than 10% of the income from the sale is paid to a foreign country. State income tax return This rule also applies to losses if the foreign country would have imposed an income tax of less than 10% had the sale resulted in a gain. State income tax return Community Income If you are married and you or your spouse is subject to the community property laws of a foreign country, a U. State income tax return S. State income tax return state, or a U. State income tax return S. State income tax return possession, you generally must follow those laws to determine the income of yourself and your spouse for U. State income tax return S. State income tax return tax purposes. State income tax return But you must disregard certain community property laws if: Both you and your spouse are nonresident aliens, or One of you is a nonresident alien and the other is a U. State income tax return S. State income tax return citizen or resident and you do not both choose to be treated as U. State income tax return S. State income tax return residents as explained in chapter 1. State income tax return In these cases, you and your spouse must report community income as explained later. State income tax return Earned income. State income tax return   Earned income of a spouse, other than trade or business income and a partner's distributive share of partnership income, is treated as the income of the spouse whose services produced the income. State income tax return That spouse must report all of it on his or her separate return. State income tax return Trade or business income. State income tax return   Trade or business income, other than a partner's distributive share of partnership income, is treated as the income of the spouse carrying on the trade or business. State income tax return That spouse must report all of it on his or her separate return. State income tax return Partnership income (or loss). State income tax return   A partner's distributive share of partnership income (or loss) is treated as the income (or loss) of the partner. State income tax return The partner must report all of it on his or her separate return. State income tax return Separate property income. State income tax return   Income derived from the separate property of one spouse (and which is not earned income, trade or business income, or partnership distributive share income) is treated as the income of that spouse. State income tax return That spouse must report all of it on his or her separate return. State income tax return Use the appropriate community property law to determine what is separate property. State income tax return Other community income. State income tax return   All other community income is treated as provided by the applicable community property laws. State income tax return Prev  Up  Next   Home   More Online Publications