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Student Tax Return Calculator

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Student Tax Return Calculator

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HIRE Act: Questions and Answers for Employers

Under the Hiring Incentives to Restore Employment (HIRE) Act, enacted March 18, 2010, two new tax benefits are available to employers who hire certain previously unemployed workers (“qualified employees”).

The first, referred to as the payroll tax exemption, provides employers with an exemption from the employer’s 6.2 percent share of social security tax on wages paid to qualifying employees, effective for wages paid from March 19, 2010 through December 31, 2010.

In addition, for each qualified employee retained for at least 52 consecutive weeks, businesses will also be eligible for a general business tax credit, referred to as the new hire retention credit, of 6.2 percent of wages paid to the qualified employee over the 52 week period, up to a maximum credit of $1,000.

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Page Last Reviewed or Updated: 26-Dec-2013

The Student Tax Return Calculator

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