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Tax ez 13. Tax ez   Basis of Property Table of Contents Introduction Useful Items - You may want to see: Cost BasisReal Property Adjusted BasisIncreases to Basis Decreases to Basis Basis Other Than CostProperty Received for Services Taxable Exchanges Involuntary Conversions Nontaxable Exchanges Property Transferred From a Spouse Property Received as a Gift Inherited Property Property Changed From Personal to Business or Rental Use Stocks and Bonds Introduction This chapter discusses how to figure your basis in property. Tax ez It is divided into the following sections. Tax ez Cost basis. Tax ez Adjusted basis. Tax ez Basis other than cost. Tax ez Your basis is the amount of your investment in property for tax purposes. Tax ez Use the basis to figure gain or loss on the sale, exchange, or other disposition of property. Tax ez Also use it to figure deductions for depreciation, amortization, depletion, and casualty losses. Tax ez If you use property for both business or investment purposes and for personal purposes, you must allocate the basis based on the use. Tax ez Only the basis allocated to the business or investment use of the property can be depreciated. Tax ez Your original basis in property is adjusted (increased or decreased) by certain events. Tax ez For example, if you make improvements to the property, increase your basis. Tax ez If you take deductions for depreciation or casualty losses, or claim certain credits, reduce your basis. Tax ez Keep accurate records of all items that affect the basis of your property. Tax ez For more information on keeping records, see chapter 1. Tax ez Useful Items - You may want to see: Publication 15-B Employer's Tax Guide to Fringe Benefits 525 Taxable and Nontaxable Income 535 Business Expenses 537 Installment Sales 544 Sales and Other Dispositions of Assets 550 Investment Income and Expenses 551 Basis of Assets 946 How To Depreciate Property Cost Basis The basis of property you buy is usually its cost. Tax ez The cost is the amount you pay in cash, debt obligations, other property, or services. Tax ez Your cost also includes amounts you pay for the following items: Sales tax, Freight, Installation and testing, Excise taxes, Legal and accounting fees (when they must be capitalized), Revenue stamps, Recording fees, and Real estate taxes (if you assume liability for the seller). Tax ez In addition, the basis of real estate and business assets may include other items. Tax ez Loans with low or no interest. Tax ez    If you buy property on a time-payment plan that charges little or no interest, the basis of your property is your stated purchase price minus any amount considered to be unstated interest. Tax ez You generally have unstated interest if your interest rate is less than the applicable federal rate. Tax ez   For more information, see Unstated Interest and Original Issue Discount (OID) in Publication 537. Tax ez Real Property Real property, also called real estate, is land and generally anything built on, growing on, or attached to land. Tax ez If you buy real property, certain fees and other expenses you pay are part of your cost basis in the property. Tax ez Lump sum purchase. Tax ez   If you buy buildings and the land on which they stand for a lump sum, allocate the cost basis among the land and the buildings. Tax ez Allocate the cost basis according to the respective fair market values (FMVs) of the land and buildings at the time of purchase. Tax ez Figure the basis of each asset by multiplying the lump sum by a fraction. Tax ez The numerator is the FMV of that asset and the denominator is the FMV of the whole property at the time of purchase. Tax ez    If you are not certain of the FMVs of the land and buildings, you can allocate the basis according to their assessed values for real estate tax purposes. Tax ez Fair market value (FMV). Tax ez   FMV is the price at which the property would change hands between a willing buyer and a willing seller, neither having to buy or sell, and both having reasonable knowledge of all the necessary facts. Tax ez Sales of similar property on or about the same date may be helpful in figuring the FMV of the property. Tax ez Assumption of mortgage. Tax ez   If you buy property and assume (or buy the property subject to) an existing mortgage on the property, your basis includes the amount you pay for the property plus the amount to be paid on the mortgage. Tax ez Settlement costs. Tax ez   Your basis includes the settlement fees and closing costs you paid for buying the property. Tax ez (A fee for buying property is a cost that must be paid even if you buy the property for cash. Tax ez ) Do not include fees and costs for getting a loan on the property in your basis. Tax ez   The following are some of the settlement fees or closing costs you can include in the basis of your property. Tax ez Abstract fees (abstract of title fees). Tax ez Charges for installing utility services. Tax ez Legal fees (including fees for the title search and preparation of the sales contract and deed). Tax ez Recording fees. Tax ez Survey fees. Tax ez Transfer taxes. Tax ez Owner's title insurance. Tax ez Any amounts the seller owes that you agree to pay, such as back taxes or interest, recording or mortgage fees, charges for improvements or repairs, and sales commissions. Tax ez   Settlement costs do not include amounts placed in escrow for the future payment of items such as taxes and insurance. Tax ez   The following are some of the settlement fees and closing costs you cannot include in the basis of property. Tax ez Casualty insurance premiums. Tax ez Rent for occupancy of the property before closing. Tax ez Charges for utilities or other services related to occupancy of the property before closing. Tax ez Charges connected with getting a loan, such as points (discount points, loan origination fees), mortgage insurance premiums, loan assumption fees, cost of a credit report, and fees for an appraisal required by a lender. Tax ez Fees for refinancing a mortgage. Tax ez Real estate taxes. Tax ez   If you pay real estate taxes the seller owed on real property you bought, and the seller did not reimburse you, treat those taxes as part of your basis. Tax ez You cannot deduct them as an expense. Tax ez    If you reimburse the seller for taxes the seller paid for you, you can usually deduct that amount as an expense in the year of purchase. Tax ez Do not include that amount in the basis of your property. Tax ez If you did not reimburse the seller, you must reduce your basis by the amount of those taxes. Tax ez Points. Tax ez   If you pay points to get a loan (including a mortgage, second mortgage, line of credit, or a home equity loan), do not add the points to the basis of the related property. Tax ez Generally, you deduct the points over the term of the loan. Tax ez For more information on how to deduct points, see chapter 23. Tax ez Points on home mortgage. Tax ez   Special rules may apply to points you and the seller pay when you get a mortgage to buy your main home. Tax ez If certain requirements are met, you can deduct the points in full for the year in which they are paid. Tax ez Reduce the basis of your home by any seller-paid points. Tax ez Adjusted Basis Before figuring gain or loss on a sale, exchange, or other disposition of property or figuring allowable depreciation, depletion, or amortization, you must usually make certain adjustments (increases and decreases) to the cost basis or basis other than cost (discussed later) of the property. Tax ez The result is the adjusted basis. Tax ez Increases to Basis Increase the basis of any property by all items properly added to a capital account. Tax ez Examples of items that increase basis are shown in Table 13-1. Tax ez These include the items discussed below. Tax ez Improvements. Tax ez   Add to your basis in property the cost of improvements having a useful life of more than 1 year, that increase the value of the property, lengthen its life, or adapt it to a different use. Tax ez For example, improvements include putting a recreation room in your unfinished basement, adding another bathroom or bedroom, putting up a fence, putting in new plumbing or wiring, installing a new roof, or paving your driveway. Tax ez Assessments for local improvements. Tax ez   Add to the basis of property assessments for improvements such as streets and sidewalks if they increase the value of the property assessed. Tax ez Do not deduct them as taxes. Tax ez However, you can deduct as taxes assessments for maintenance or repairs, or for meeting interest charges related to the improvements. Tax ez Example. Tax ez Your city changes the street in front of your store into an enclosed pedestrian mall and assesses you and other affected property owners for the cost of the conversion. Tax ez Add the assessment to your property's basis. Tax ez In this example, the assessment is a depreciable asset. Tax ez Decreases to Basis Decrease the basis of any property by all items that represent a return of capital for the period during which you held the property. Tax ez Examples of items that decrease basis are shown in Table 13-1. Tax ez These include the items discussed below. Tax ez Table 13-1. Tax ez Examples of Adjustments to Basis Increases to Basis Decreases to Basis • Capital improvements: • Exclusion from income of   Putting an addition on your home subsidies for energy conservation   Replacing an entire roof measures   Paving your driveway     Installing central air conditioning • Casualty or theft loss deductions   Rewiring your home and insurance reimbursements       • Assessments for local improvements:     Water connections     Extending utility service lines to the property • Postponed gain from the sale of a home   Sidewalks • Alternative motor vehicle credit  (Form 8910)   Roads       • Alternative fuel vehicle refueling     property credit (Form 8911)           • Residential energy credits (Form 5695)       • Casualty losses: • Depreciation and section 179 deduction   Restoring damaged property     • Nontaxable corporate distributions • Legal fees:     Cost of defending and perfecting a title • Certain canceled debt excluded from   Fees for getting a reduction of an assessment income     • Zoning costs • Easements           • Adoption tax benefits Casualty and theft losses. Tax ez   If you have a casualty or theft loss, decrease the basis in your property by any insurance proceeds or other reimbursement and by any deductible loss not covered by insurance. Tax ez    You must increase your basis in the property by the amount you spend on repairs that restore the property to its pre-casualty condition. Tax ez   For more information on casualty and theft losses, see chapter 25. Tax ez Depreciation and section 179 deduction. Tax ez   Decrease the basis of your qualifying business property by any section 179 deduction you take and the depreciation you deducted, or could have deducted (including any special depreciation allowance), on your tax returns under the method of depreciation you selected. Tax ez   For more information about depreciation and the section 179 deduction, see Publication 946 and the Instructions for Form 4562. Tax ez Example. Tax ez You owned a duplex used as rental property that cost you $40,000, of which $35,000 was allocated to the building and $5,000 to the land. Tax ez You added an improvement to the duplex that cost $10,000. Tax ez In February last year, the duplex was damaged by fire. Tax ez Up to that time, you had been allowed depreciation of $23,000. Tax ez You sold some salvaged material for $1,300 and collected $19,700 from your insurance company. Tax ez You deducted a casualty loss of $1,000 on your income tax return for last year. Tax ez You spent $19,000 of the insurance proceeds for restoration of the duplex, which was completed this year. Tax ez You must use the duplex's adjusted basis after the restoration to determine depreciation for the rest of the property's recovery period. Tax ez Figure the adjusted basis of the duplex as follows: Original cost of duplex $35,000 Addition to duplex 10,000 Total cost of duplex $45,000 Minus: Depreciation 23,000 Adjusted basis before casualty $22,000 Minus: Insurance proceeds $19,700     Deducted casualty loss 1,000     Salvage proceeds 1,300 22,000 Adjusted basis after casualty $-0- Add: Cost of restoring duplex 19,000 Adjusted basis after restoration $19,000 Note. Tax ez Your basis in the land is its original cost of $5,000. Tax ez Easements. Tax ez   The amount you receive for granting an easement is generally considered to be proceeds from the sale of an interest in real property. Tax ez It reduces the basis of the affected part of the property. Tax ez If the amount received is more than the basis of the part of the property affected by the easement, reduce your basis in that part to zero and treat the excess as a recognized gain. Tax ez   If the gain is on a capital asset, see chapter 16 for information about how to report it. Tax ez If the gain is on property used in a trade or business, see Publication 544 for information about how to report it. Tax ez Exclusion of subsidies for energy conservation measures. Tax ez   You can exclude from gross income any subsidy you received from a public utility company for the purchase or installation of an energy conservation measure for a dwelling unit. Tax ez Reduce the basis of the property for which you received the subsidy by the excluded amount. Tax ez For more information about this subsidy, see chapter 12. Tax ez Postponed gain from sale of home. Tax ez    If you postponed gain from the sale of your main home under rules in effect before May 7, 1997, you must reduce the basis of the home you acquired as a replacement by the amount of the postponed gain. Tax ez For more information on the rules for the sale of a home, see chapter 15. Tax ez Basis Other Than Cost There are many times when you cannot use cost as basis. Tax ez In these cases, the fair market value or the adjusted basis of the property can be used. Tax ez Fair market value (FMV) and adjusted basis were discussed earlier. Tax ez Property Received for Services If you receive property for your services, include the FMV of the property in income. Tax ez The amount you include in income becomes your basis. Tax ez If the services were performed for a price agreed on beforehand, it will be accepted as the FMV of the property if there is no evidence to the contrary. Tax ez Restricted property. Tax ez   If you receive property for your services and the property is subject to certain restrictions, your basis in the property is its FMV when it becomes substantially vested. Tax ez However, this rule does not apply if you make an election to include in income the FMV of the property at the time it is transferred to you, less any amount you paid for it. Tax ez Property is substantially vested when it is transferable or when it is not subject to a substantial risk of forfeiture (you do not have a good chance of losing it). Tax ez For more information, see Restricted Property in Publication 525. Tax ez Bargain purchases. Tax ez   A bargain purchase is a purchase of an item for less than its FMV. Tax ez If, as compensation for services, you buy goods or other property at less than FMV, include the difference between the purchase price and the property's FMV in your income. Tax ez Your basis in the property is its FMV (your purchase price plus the amount you include in income). Tax ez   If the difference between your purchase price and the FMV is a qualified employee discount, do not include the difference in income. Tax ez However, your basis in the property is still its FMV. Tax ez See Employee Discounts in Publication 15-B. Tax ez Taxable Exchanges A taxable exchange is one in which the gain is taxable or the loss is deductible. Tax ez A taxable gain or deductible loss also is known as a recognized gain or loss. Tax ez If you receive property in exchange for other property in a taxable exchange, the basis of the property you receive is usually its FMV at the time of the exchange. Tax ez Involuntary Conversions If you receive replacement property as a result of an involuntary conversion, such as a casualty, theft, or condemnation, figure the basis of the replacement property using the basis of the converted property. Tax ez Similar or related property. Tax ez   If you receive replacement property similar or related in service or use to the converted property, the replacement property's basis is the same as the converted property's basis on the date of the conversion, with the following adjustments. Tax ez Decrease the basis by the following. Tax ez Any loss you recognize on the involuntary conversion. Tax ez Any money you receive that you do not spend on similar property. Tax ez Increase the basis by the following. Tax ez Any gain you recognize on the involuntary conversion. Tax ez Any cost of acquiring the replacement property. Tax ez Money or property not similar or related. Tax ez    If you receive money or property not similar or related in service or use to the converted property, and you buy replacement property similar or related in service or use to the converted property, the basis of the replacement property is its cost decreased by the gain not recognized on the conversion. Tax ez Example. Tax ez The state condemned your property. Tax ez The adjusted basis of the property was $26,000 and the state paid you $31,000 for it. Tax ez You realized a gain of $5,000 ($31,000 − $26,000). Tax ez You bought replacement property similar in use to the converted property for $29,000. Tax ez You recognize a gain of $2,000 ($31,000 − $29,000), the unspent part of the payment from the state. Tax ez Your unrecognized gain is $3,000, the difference between the $5,000 realized gain and the $2,000 recognized gain. Tax ez The basis of the replacement property is figured as follows: Cost of replacement property $29,000 Minus: Gain not recognized 3,000 Basis of replacement property $26,000 Allocating the basis. Tax ez   If you buy more than one piece of replacement property, allocate your basis among the properties based on their respective costs. Tax ez Basis for depreciation. Tax ez   Special rules apply in determining and depreciating the basis of MACRS property acquired in an involuntary conversion. Tax ez For information, see What Is the Basis of Your Depreciable Property? in chapter 1 of Publication 946. Tax ez Nontaxable Exchanges A nontaxable exchange is an exchange in which you are not taxed on any gain and you cannot deduct any loss. Tax ez If you receive property in a nontaxable exchange, its basis is generally the same as the basis of the property you transferred. Tax ez See Nontaxable Trades in chapter 14. Tax ez Like-Kind Exchanges The exchange of property for the same kind of property is the most common type of nontaxable exchange. Tax ez To qualify as a like-kind exchange, the property traded and the property received must be both of the following. Tax ez Qualifying property. Tax ez Like-kind property. Tax ez The basis of the property you receive is generally the same as the adjusted basis of the property you gave up. Tax ez If you trade property in a like-kind exchange and also pay money, the basis of the property received is the adjusted basis of the property you gave up increased by the money you paid. Tax ez Qualifying property. Tax ez   In a like-kind exchange, you must hold for investment or for productive use in your trade or business both the property you give up and the property you receive. Tax ez Like-kind property. Tax ez   There must be an exchange of like-kind property. Tax ez Like-kind properties are properties of the same nature or character, even if they differ in grade or quality. Tax ez The exchange of real estate for real estate and personal property for similar personal property are exchanges of like-kind property. Tax ez Example. Tax ez You trade in an old truck used in your business with an adjusted basis of $1,700 for a new one costing $6,800. Tax ez The dealer allows you $2,000 on the old truck, and you pay $4,800. Tax ez This is a like-kind exchange. Tax ez The basis of the new truck is $6,500 (the adjusted basis of the old one, $1,700, plus the amount you paid, $4,800). Tax ez If you sell your old truck to a third party for $2,000 instead of trading it in and then buy a new one from the dealer, you have a taxable gain of $300 on the sale (the $2,000 sale price minus the $1,700 adjusted basis). Tax ez The basis of the new truck is the price you pay the dealer. Tax ez Partially nontaxable exchanges. Tax ez   A partially nontaxable exchange is an exchange in which you receive unlike property or money in addition to like-kind property. Tax ez The basis of the property you receive is the same as the adjusted basis of the property you gave up, with the following adjustments. Tax ez Decrease the basis by the following amounts. Tax ez Any money you receive. Tax ez Any loss you recognize on the exchange. Tax ez Increase the basis by the following amounts. Tax ez Any additional costs you incur. Tax ez Any gain you recognize on the exchange. Tax ez If the other party to the exchange assumes your liabilities, treat the debt assumption as money you received in the exchange. Tax ez Allocation of basis. Tax ez   If you receive like-kind and unlike properties in the exchange, allocate the basis first to the unlike property, other than money, up to its FMV on the date of the exchange. Tax ez The rest is the basis of the like-kind property. Tax ez More information. Tax ez   See Like-Kind Exchanges in chapter 1 of Publication 544 for more information. Tax ez Basis for depreciation. Tax ez   Special rules apply in determining and depreciating the basis of MACRS property acquired in a like-kind exchange. Tax ez For information, see What Is the Basis of Your Depreciable Property? in chapter 1 of Publication 946. Tax ez Property Transferred From a Spouse The basis of property transferred to you or transferred in trust for your benefit by your spouse is the same as your spouse's adjusted basis. Tax ez The same rule applies to a transfer by your former spouse that is incident to divorce. Tax ez However, for property transferred in trust, adjust your basis for any gain recognized by your spouse or former spouse if the liabilities assumed, plus the liabilities to which the property is subject, are more than the adjusted basis of the property transferred. Tax ez If the property transferred to you is a series E, series EE, or series I U. Tax ez S. Tax ez savings bond, the transferor must include in income the interest accrued to the date of transfer. Tax ez Your basis in the bond immediately after the transfer is equal to the transferor's basis increased by the interest income includible in the transferor's income. Tax ez For more information on these bonds, see chapter 7. Tax ez At the time of the transfer, the transferor must give you the records needed to determine the adjusted basis and holding period of the property as of the date of the transfer. Tax ez For more information about the transfer of property from a spouse, see chapter 14. Tax ez Property Received as a Gift To figure the basis of property you receive as a gift, you must know its adjusted basis to the donor just before it was given to you, its FMV at the time it was given to you, and any gift tax paid on it. Tax ez FMV less than donor's adjusted basis. Tax ez   If the FMV of the property at the time of the gift is less than the donor's adjusted basis, your basis depends on whether you have a gain or a loss when you dispose of the property. Tax ez Your basis for figuring gain is the same as the donor's adjusted basis plus or minus any required adjustments to basis while you held the property. Tax ez Your basis for figuring loss is its FMV when you received the gift plus or minus any required adjustments to basis while you held the property. Tax ez See Adjusted Basis , earlier. Tax ez Example. Tax ez You received an acre of land as a gift. Tax ez At the time of the gift, the land had an FMV of $8,000. Tax ez The donor's adjusted basis was $10,000. Tax ez After you received the property, no events occurred to increase or decrease your basis. Tax ez If you later sell the property for $12,000, you will have a $2,000 gain because you must use the donor's adjusted basis at the time of the gift ($10,000) as your basis to figure gain. Tax ez If you sell the property for $7,000, you will have a $1,000 loss because you must use the FMV at the time of the gift ($8,000) as your basis to figure loss. Tax ez If the sales price is between $8,000 and $10,000, you have neither gain nor loss. Tax ez Business property. Tax ez   If you hold the gift as business property, your basis for figuring any depreciation, depletion, or amortization deductions is the same as the donor's adjusted basis plus or minus any required adjustments to basis while you hold the property. Tax ez FMV equal to or greater than donor's adjusted basis. Tax ez   If the FMV of the property is equal to or greater than the donor's adjusted basis, your basis is the donor's adjusted basis at the time you received the gift. Tax ez Increase your basis by all or part of any gift tax paid, depending on the date of the gift, explained later. Tax ez   Also, for figuring gain or loss from a sale or other disposition or for figuring depreciation, depletion, or amortization deductions on business property, you must increase or decrease your basis (the donor's adjusted basis) by any required adjustments to basis while you held the property. Tax ez See Adjusted Basis , earlier. Tax ez   If you received a gift during the tax year, increase your basis in the gift (the donor's adjusted basis) by the part of the gift tax paid on it due to the net increase in value of the gift. Tax ez Figure the increase by multiplying the gift tax paid by a fraction. Tax ez The numerator of the fraction is the net increase in value of the gift and the denominator is the amount of the gift. Tax ez   The net increase in value of the gift is the FMV of the gift minus the donor's adjusted basis. Tax ez The amount of the gift is its value for gift tax purposes after reduction by any annual exclusion and marital or charitable deduction that applies to the gift. Tax ez Example. Tax ez In 2013, you received a gift of property from your mother that had an FMV of $50,000. Tax ez Her adjusted basis was $20,000. Tax ez The amount of the gift for gift tax purposes was $36,000 ($50,000 minus the $14,000 annual exclusion). Tax ez She paid a gift tax of $7,320 on the property. Tax ez Your basis is $26,076, figured as follows: Fair market value $50,000 Minus: Adjusted basis −20,000 Net increase in value $30,000     Gift tax paid $7,320 Multiplied by ($30,000 ÷ $36,000) × . Tax ez 83 Gift tax due to net increase in value $6,076 Adjusted basis of property to your mother +20,000 Your basis in the property $26,076 Note. Tax ez If you received a gift before 1977, your basis in the gift (the donor's adjusted basis) includes any gift tax paid on it. Tax ez However, your basis cannot exceed the FMV of the gift at the time it was given to you. Tax ez Inherited Property Your basis in property you inherited from a decedent, who died before January 1, 2010, or after December 31, 2010, is generally one of the following: The FMV of the property at the date of the decedent's death. Tax ez The FMV on the alternate valuation date if the personal representative for the estate elects to use alternate valuation. Tax ez The value under the special-use valuation method for real property used in farming or a closely held business if elected for estate tax purposes. Tax ez The decedent's adjusted basis in land to the extent of the value excluded from the decedent's taxable estate as a qualified conservation easement. Tax ez If a federal estate tax return does not have to be filed, your basis in the inherited property is its appraised value at the date of death for state inheritance or transmission taxes. Tax ez For more information, see the instructions to Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return. Tax ez Property inherited from a decedent who died in 2010. Tax ez   If you inherited property from a decedent who died in 2010, special rules may apply. Tax ez For more information, see Publication 4895, Tax Treatment of Property Acquired From a Decedent Dying in 2010. Tax ez Community property. Tax ez   In community property states (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin), husband and wife are each usually considered to own half the community property. Tax ez When either spouse dies, the total value of the community property, even the part belonging to the surviving spouse, generally becomes the basis of the entire property. Tax ez For this rule to apply, at least half the value of the community property interest must be includible in the decedent's gross estate, whether or not the estate must file a return. Tax ez Example. Tax ez You and your spouse owned community property that had a basis of $80,000. Tax ez When your spouse died, half the FMV of the community interest was includible in your spouse's estate. Tax ez The FMV of the community interest was $100,000. Tax ez The basis of your half of the property after the death of your spouse is $50,000 (half of the $100,000 FMV). Tax ez The basis of the other half to your spouse's heirs is also $50,000. Tax ez For more information about community property, see Publication 555, Community Property. Tax ez Property Changed From Personal to Business or Rental Use If you hold property for personal use and then change it to business use or use it to produce rent, you can begin to depreciate the property at the time of the change. Tax ez To do so, you must figure its basis for depreciation at the time of the change. Tax ez An example of changing property held for personal use to business or rental use would be renting out your former personal residence. Tax ez Basis for depreciation. Tax ez   The basis for depreciation is the lesser of the following amounts. Tax ez The FMV of the property on the date of the change. Tax ez Your adjusted basis on the date of the change. Tax ez Example. Tax ez Several years ago, you paid $160,000 to have your house built on a lot that cost $25,000. Tax ez You paid $20,000 for permanent improvements to the house and claimed a $2,000 casualty loss deduction for damage to the house before changing the property to rental use last year. Tax ez Because land is not depreciable, you include only the cost of the house when figuring the basis for depreciation. Tax ez Your adjusted basis in the house when you changed its use was $178,000 ($160,000 + $20,000 − $2,000). Tax ez On the same date, your property had an FMV of $180,000, of which $15,000 was for the land and $165,000 was for the house. Tax ez The basis for figuring depreciation on the house is its FMV on the date of the change ($165,000) because it is less than your adjusted basis ($178,000). Tax ez Sale of property. Tax ez   If you later sell or dispose of property changed to business or rental use, the basis you use will depend on whether you are figuring gain or loss. Tax ez Gain. Tax ez   The basis for figuring a gain is your adjusted basis in the property when you sell the property. Tax ez Example. Tax ez Assume the same facts as in the previous example except that you sell the property at a gain after being allowed depreciation deductions of $37,500. Tax ez Your adjusted basis for figuring gain is $165,500 ($178,000 + $25,000 (land) − $37,500). Tax ez Loss. Tax ez   Figure the basis for a loss starting with the smaller of your adjusted basis or the FMV of the property at the time of the change to business or rental use. Tax ez Then make adjustments (increases and decreases) for the period after the change in the property's use, as discussed earlier under Adjusted Basis . Tax ez Example. Tax ez Assume the same facts as in the previous example, except that you sell the property at a loss after being allowed depreciation deductions of $37,500. Tax ez In this case, you would start with the FMV on the date of the change to rental use ($180,000), because it is less than the adjusted basis of $203,000 ($178,000 + $25,000 (land)) on that date. Tax ez Reduce that amount ($180,000) by the depreciation deductions ($37,500). Tax ez The basis for loss is $142,500 ($180,000 − $37,500). Tax ez Stocks and Bonds The basis of stocks or bonds you buy generally is the purchase price plus any costs of purchase, such as commissions and recording or transfer fees. Tax ez If you get stocks or bonds other than by purchase, your basis is usually determined by the FMV or the previous owner's adjusted basis, as discussed earlier. Tax ez You must adjust the basis of stocks for certain events that occur after purchase. Tax ez For example, if you receive additional stock from nontaxable stock dividends or stock splits, reduce your basis for each share of stock by dividing the adjusted basis of the old stock by the number of shares of old and new stock. Tax ez This rule applies only when the additional stock received is identical to the stock held. Tax ez Also reduce your basis when you receive nontaxable distributions. Tax ez They are a return of capital. Tax ez Example. Tax ez In 2011 you bought 100 shares of XYZ stock for $1,000 or $10 a share. Tax ez In 2012 you bought 100 shares of XYZ stock for $1,600 or $16 a share. Tax ez In 2013 XYZ declared a 2-for-1 stock split. Tax ez You now have 200 shares of stock with a basis of $5 a share and 200 shares with a basis of $8 a share. Tax ez Other basis. Tax ez   There are other ways to figure the basis of stocks or bonds depending on how you acquired them. Tax ez For detailed information, see Stocks and Bonds under Basis of Investment Property in chapter 4 of Publication 550. Tax ez Identifying stocks or bonds sold. Tax ez   If you can adequately identify the shares of stock or the bonds you sold, their basis is the cost or other basis of the particular shares of stocks or bonds. Tax ez If you buy and sell securities at various times in varying quantities and you cannot adequately identify the shares you sell, the basis of the securities you sell is the basis of the securities you acquired first. Tax ez For more information about identifying securities you sell, see Stocks and Bonds under Basis of Investment Property in chapter 4 of Publication 550. Tax ez Mutual fund shares. Tax ez   If you sell mutual fund shares you acquired at various times and prices and left on deposit in an account kept by a custodian or agent, you can elect to use an average basis. Tax ez For more information, see Publication 550. Tax ez Bond premium. Tax ez   If you buy a taxable bond at a premium and elect to amortize the premium, reduce the basis of the bond by the amortized premium you deduct each year. Tax ez See Bond Premium Amortization in chapter 3 of Publication 550 for more information. Tax ez Although you cannot deduct the premium on a tax-exempt bond, you must amortize the premium each year and reduce your basis in the bond by the amortized amount. Tax ez Original issue discount (OID) on debt instruments. Tax ez   You must increase your basis in an OID debt instrument by the OID you include in income for that instrument. Tax ez See Original Issue Discount (OID) in chapter 7 and Publication 1212, Guide To Original Issue Discount (OID) Instruments. Tax ez Tax-exempt obligations. Tax ez    OID on tax-exempt obligations is generally not taxable. Tax ez However, when you dispose of a tax-exempt obligation issued after September 3, 1982, and acquired after March 1, 1984, you must accrue OID on the obligation to determine its adjusted basis. Tax ez The accrued OID is added to the basis of the obligation to determine your gain or loss. Tax ez See chapter 4 of Publication 550. Tax ez Prev  Up  Next   Home   More Online Publications
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A-Z Index of Consumer Organizations

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The Tax Ez

Tax ez Index Symbols (ITIN), Filers who have certain child dependents with an Individual Taxpayer Identification Number (ITIN). Tax ez 10% tax for early withdrawal from IRA or retirement plan (see Early withdrawal from deferred interest account, subheading: Tax on) 10-year tax option, 10-Year Tax Option 401(k) plans Tax treatment of contributions, Elective deferrals. Tax ez 403(b) plans Rollovers, Rollovers, Rollover From Employer's Plan Into an IRA, Rollover from a qualified retirement plan into a Roth IRA. Tax ez 457 plans (see Section 457 deferred compensation plans) 529 plans (see Qualified tuition programs) 59 rule, Age 59½ rule. Tax ez 60 day rule, Time limit for making a rollover contribution. Tax ez 70 rule, Age 70½ rule. Tax ez , Nonresident alien spouse. Tax ez A Abandonment of home, Abandonment. Tax ez Abortion Deductibility as medical expense, Table 21-1. Tax ez Medical and Dental Expenses Checklist. Tax ez See Publication 502 for more information about these and other expenses. Tax ez Abroad, citizens traveling or working, Employees of foreign governments or international organizations. Tax ez , Foreign Employer, Travel Outside the United States, Travel Primarily for Business (see also Citizens outside U. Tax ez S. Tax ez ) (see also Foreign employment) Absence, temporary, Temporary absences. Tax ez , Temporary absences. Tax ez Accelerated death benefits, Accelerated Death Benefits, Exclusion for terminal illness. Tax ez Accident insurance, Accident or Health Plan Cafeteria plans, Cafeteria plans. Tax ez Long-term care, Long-term care coverage. Tax ez , Long-Term Care Insurance Contracts Accidental death benefits, Accidental death benefits. Tax ez Accidents, car, Deductible losses. Tax ez Value determination, Car value. Tax ez Willful negligence or intentional act as cause, Nondeductible losses. Tax ez Accountable plans for employee reimbursements, Accountable Plans, Related to employer. Tax ez Accountants Basis to include fees of, Cost Basis CPA review courses, Bar or CPA Review Course Accounting methods, Accounting Methods Accrual method (see Accrual method taxpayers) Cash method (see Cash method taxpayers) Change of Depreciation, to deduct unclaimed amount, Changing your accounting method to deduct unclaimed depreciation. Tax ez Accounting periods, Accounting Periods Calendar year, When Do I Have To File?, Accounting Periods, Accounting period. Tax ez Change in, standard deduction not allowed, Persons not eligible for the standard deduction. Tax ez Fiscal year, Accounting Periods, Fiscal year taxpayers. Tax ez , Fiscal Years Fringe benefits, Accounting period. Tax ez Accrual method taxpayers, Accrual method. Tax ez Taxes paid during tax year, deduction of, You must pay the tax during your tax year. Tax ez Accumulation distribution of trusts Tax on, Other taxes. Tax ez Accuracy-related penalties, Accuracy-related penalty. Tax ez Acknowledgment, Acknowledgment. Tax ez Activities not for profit, Activity not for profit. Tax ez Address, Name and Address Change of, Change of Address Foreign, Foreign address. Tax ez P. Tax ez O. Tax ez box, P. Tax ez O. Tax ez box. Tax ez Address, filing, Where To File Adjusted basis, Adjusted Basis, Postponed gain from sale of home. Tax ez Decreases to basis, Decreases to Basis Depreciation, Depreciation and section 179 deduction. Tax ez Easements, Easements. Tax ez Energy conservation subsidies exclusion, Exclusion of subsidies for energy conservation measures. Tax ez Gifts, Property Received as a Gift Home sale (see Sale of home) Improvements, Improvements. Tax ez Increases to basis, Increases to Basis Local assessments, Assessments for local improvements. Tax ez Sales of property, Adjusted basis. Tax ez Section 179 deduction, Depreciation and section 179 deduction. Tax ez Adjusted gross income (AGI) Medical and dental expenses and limit of deduction, How Much of the Expenses Can You Deduct?, What Tax Form Do You Use? Retirement savings contribution credit, Special Rules Adjustments, Adjustments and tax preference items. Tax ez Administrators, estate (see Executors and administrators) Adopted child, Exception for adopted child. Tax ez , Adopted child. Tax ez , Adopted child. Tax ez , Taxpayer identification numbers for adoptees. Tax ez Earned income credit, Adopted child. Tax ez Adoption, Adoption Credit, Child with special needs. Tax ez ATIN, Adoption taxpayer identification number (ATIN). Tax ez , Adoption taxpayer identification number (ATIN). Tax ez Child tax credit, Adopted child. Tax ez (see also Child tax credit) Credits, Personal Expenses Married filing separately, Special Rules Taking, When to take the credit. Tax ez Employer assistance, Adoption Assistance Exception for adopted child, Exception for adopted child. Tax ez Exemption for child, Personal Expenses Expenses not deductible Foster care prior to, no charitable deduction, Foster parents. Tax ez No charitable deduction for, Personal Expenses Foreign child, Foreign child. Tax ez Medical and dental expenses of adopted child, Qualifying Child Taxpayer identification number, Adoption taxpayer identification number (ATIN). Tax ez , Taxpayer identification numbers for aliens. Tax ez Taxpayer identification numbers (TINs), Adoption taxpayer identification number (ATIN). Tax ez Age Children's investments (see Children, subheading: Investment income of child under age 18) Form 1040EZ, taxpayer under 65 may use, You can use Form 1040EZ if all of the following apply. Tax ez Gross income and filing requirements (Table 1-1), Introduction IRAs Contribution cutoff at age 70, Age 70½ rule. Tax ez Distribution prior to age 59, Age 59½ rule. Tax ez Distribution required at age 70, IRA owners. Tax ez , Excess Accumulations (Insufficient Distributions) Pension distributions required at age 70, Age 70½. Tax ez Retirement plan recipients over age 75, Who must use the General Rule. Tax ez Roth IRAs, Is there an age limit for contributions?, Must you withdraw or use Roth IRA assets? Standard deduction for age 65 or older, Higher Standard Deduction for Age (65 or Older) Age test, Age Test (see Qualifying child) Agents, Losses on sales or trades of property. Tax ez (see also Fiduciaries) Income paid to, Payment to an agent. Tax ez Signing return, When someone can sign for you. Tax ez AGI (see Adjusted gross income (AGI)) Agricultural workers (see Farmers) (see Farmworkers) Agriculture (see Farming) Aircraft Charitable gift of, deduction for fair market value, Cars, boats, and airplanes. Tax ez Airline club dues Not entertainment expenses, Club dues and membership fees. Tax ez Airplanes, donations of, Cars, boats, and airplanes. Tax ez Airport transportation Business-related travel expense, Table 26-1. Tax ez Travel Expenses You Can Deduct This chart summarizes expenses you can deduct when you travel away from home for business purposes. Tax ez Alaska Standard meal allowance, Standard meal allowance for areas outside the continental United States. Tax ez Alaska Permanent Fund dividends, Alaska Permanent Fund dividend. Tax ez Child's dividends, Child's Alaska Permanent Fund dividends. Tax ez Income from, You can use Form 1040EZ if all of the following apply. Tax ez , You can use Form 1040A if all of the following apply. Tax ez , Alaska Permanent Fund dividends. Tax ez Investment income not to include, Investment income. Tax ez Alaska Unemployment Compensation Fund, Contributions to state benefit funds. Tax ez Alcohol rehabilitation centers Deductibility of medical expense, Table 21-1. Tax ez Medical and Dental Expenses Checklist. Tax ez See Publication 502 for more information about these and other expenses. Tax ez Alcoholic beverages IRA prohibited transactions in, Collectibles. Tax ez Aliens, Individual taxpayer identification number (ITIN) for aliens. Tax ez , Not earned income. Tax ez Dual-status (see Dual-status taxpayers) Filing required, Aliens Nonresident (see Nonresident aliens) Resident (see Resident aliens) Alimony, Alimony, Introduction, Spouse or former spouse. Tax ez , Payments not alimony. Tax ez , Payments to a third party. Tax ez , Life insurance premiums. Tax ez , Payments for jointly-owned home. Tax ez , Mortgage payments. Tax ez , Taxes and insurance. Tax ez , Other payments to a third party. Tax ez , Instruments Executed After 1984, Exception for instruments executed before 1985. Tax ez , Alimony requirements. Tax ez , Cash payment requirement. Tax ez , Payments to a third party. Tax ez , Payments designated as not alimony. Tax ez , Spouses cannot be members of the same household. Tax ez , Liability for payments after death of recipient spouse. Tax ez , Substitute payments. Tax ez , How To Deduct Alimony Paid, How To Report Alimony Received, Recapture Rule, Including the recapture in income. Tax ez , Deducting the recapture. Tax ez Definition of, Introduction Mortgage payments Interest deduction, Divorced or separated individuals. Tax ez Reporting of income, Alimony. Tax ez Alternative filing methods Electronic (see E-file ) Alternative minimum tax (AMT), Alternative Minimum Tax (AMT) Child's tax, figuring of, Alternative minimum tax. Tax ez Exempt-interest dividends, Alternative minimum tax treatment. Tax ez Filing requirements (Table 1-3), Figuring tax. Tax ez Incentive stock option, You can use Form 1040A if all of the following apply. Tax ez Nonrefundable credit for prior year tax, Nonrefundable Credit for Prior Year Minimum Tax Alternative motor vehicle credit, Alternative Motor Vehicle Credit, Amount of credit. Tax ez Ambulance service personnel Life insurance proceeds when death in line of duty, Public Safety Officer Killed in the Line of Duty Amended returns, Amended Returns and Claims for Refund, Form 1040X. Tax ez , Filing Form 1040X. Tax ez (see also Form 1040X) Itemized deduction, change to standard deduction, Changing your mind. Tax ez Standard deduction, change to itemized deductions, Changing your mind. Tax ez American citizens abroad, U. Tax ez S. Tax ez Citizens and Resident Aliens Living Abroad (see also Citizens outside U. Tax ez S. Tax ez ) Employment (see Foreign employment) American Indians (see Indians) American opportunity credit Tuition deduction and, Who Cannot Claim the Deduction American Samoa Income from, Individuals With Income From U. Tax ez S. Tax ez Possessions Amortization Bond premiums, treatment of, Amortization of bond premium. Tax ez AMT (see Alternative minimum tax (AMT)) Annuities, Rollovers (see also Rollovers) Cost computation, Cost (Investment in the Contract) Decedent's unrecovered investment in, Form W-2. Tax ez Early distributions from, Tax on Early Distributions Deferred annuity contracts, 5% rate on certain early distributions from deferred annuity contracts. Tax ez , Additional exceptions for nonqualified annuity contracts. Tax ez Estimated tax, Withholding and estimated tax. Tax ez Exclusion limit, Exclusion limit. Tax ez General Rule Annuity starting before November 19, 1996, Annuity starting before November 19, 1996. Tax ez Nonqualified plans and qualified plans for recipients over 75 years, Who must use the General Rule. Tax ez Purchased annuities, Purchased annuities. Tax ez Survivor's annuity, Survivors of retirees. Tax ez Guaranteed payments, Guaranteed payments. Tax ez IRAs as, Kinds of traditional IRAs. Tax ez Joint return, Joint return. Tax ez Loans from plan, Loans. Tax ez Lump-sum distributions, Lump-Sum Distributions Multiple plan benefits, More than one program. Tax ez , More than one annuity. Tax ez Partly taxable payments, Partly taxable payments. Tax ez Purchased annuities, Purchased annuities. Tax ez Reporting of, How To Report Retirement annuities, Retirement Plans, Pensions, and Annuities (see also Retirement plans) Rollovers, Rollovers Sale of, Sale of Annuity Gain as ordinary income, Tax-free exchange. Tax ez Simplified method to calculate tax-free part of annuity payment, Simplified Method Survivor's annuity, Survivors of retirees. Tax ez Worksheet for computation, How to use the Simplified Method. Tax ez Survivor annuities, Survivors and Beneficiaries Trade of insurance policies and annuities, Insurance policies and annuities. Tax ez Unrecovered investment, Unrecovered Investment in Annuity Withholding, Form W-2. Tax ez , Pensions and Annuities, Withholding and estimated tax. Tax ez Annulled marriages Filing status, Annulled marriages. Tax ez Anthrax incidents (see Terrorist attacks) Antiques (see Collectibles) Appliances Deterioration and damage, not casualty loss, Progressive deterioration. Tax ez Appraisal fees, Appraisal Fees Donated property, Appraisal Fees Not deductible as interest, Amounts charged for services. Tax ez Real estate transactions, when required by lender, Settlement costs. Tax ez Appraisals Casualty or theft losses, Appraisal. Tax ez , Costs of photographs and appraisals. Tax ez Archer MSAs, Medical savings accounts (MSAs). Tax ez Contributions, Archer MSA contributions. Tax ez Medical expenses paid for decedent from, Decedent Not deductible as medical expense, Table 21-1. Tax ez Medical and Dental Expenses Checklist. Tax ez See Publication 502 for more information about these and other expenses. Tax ez Armed forces, Types of Qualified Organizations, Table 24-1. Tax ez Examples of Charitable Contributions—A Quick Check, Armed Forces reservists. Tax ez (see also Reservists) (see also Veterans' organizations) Combat zone Extension to file return, Individuals Serving in Combat Zone Signing return for spouse, Spouse in combat zone. Tax ez Dependency allotments, Armed Forces dependency allotments. Tax ez Disability pay, Disability. Tax ez Disability pensions, Military and Government Disability Pensions GI Bill benefits, Tuition payments and allowances under the GI Bill. Tax ez Military, Military uniforms. Tax ez Military quarters allotments, Tax-exempt military quarters allowances. Tax ez Naval officers on permanent duty aboard ship, Members of the Armed Forces. Tax ez Permanent duty overseas, Members of the Armed Forces. Tax ez Real estate taxes when receiving housing allowance, Ministers' and military housing allowances. Tax ez , Ministers' and military housing allowance. Tax ez Rehabilitative program payments, Veterans' benefits. Tax ez Reserves, Armed Forces reservists traveling more than 100 miles from home. Tax ez Retirees' pay Taxable income, Military retirement pay. Tax ez Uniforms, Military uniforms. Tax ez Wages, Military Armed Forces Retiree's pay withholding, Military retirees. Tax ez Art works As capital assets, Capital Assets and Noncapital Assets, Gold, silver, stamps, coins, gems, etc. Tax ez Capital gains or losses from sale or trade of, Investment interest deducted. Tax ez Artists, performing (see Performing artists) Assessments, local (see Local assessments) Assistance (see Tax help) Assistance, tax (see Tax help) Assumption of mortgage, Assumption of mortgage. Tax ez Fees not included in basis, Settlement costs. Tax ez At-risk rules Rental property, At-Risk Rules Athletic events Charitable contributions, amount deductible, Athletic events. Tax ez ATIN (Adoption taxpayer identification number), Adoption taxpayer identification number (ATIN). Tax ez Attachment of wages, Garnisheed wages. Tax ez Attachments to return, Attachments Attorneys Bar review courses, Bar or CPA Review Course Attorneys' fees, Legal Expenses, Personal Legal Expenses Basis to include, Cost Basis Social security and railroad retirement benefits, deductions for, Legal expenses. Tax ez Title to property, for preparation, filing, etc. Tax ez , Settlement costs. Tax ez Audits Travel expense records, If your return is examined. Tax ez Auto insurance Medical expenses covered by, not deductible, Table 21-1. Tax ez Medical and Dental Expenses Checklist. Tax ez See Publication 502 for more information about these and other expenses. Tax ez Automatic extension of time to file, Automatic Extension, When to file. Tax ez Form 4868, E-file options. Tax ez Automatic investment services Holding period, determination of, Automatic investment service. Tax ez Awards (see Prizes and awards) Away-from-home travel (see Travel and transportation expenses) B Babysitting, Babysitting. Tax ez Back pay, award for, Back pay awards. Tax ez Emotional distress damages under title VII of Civil Rights Act of 1964, Court awards and damages. Tax ez Backup withholding, Backup Withholding, Backup withholding. Tax ez , Backup withholding. Tax ez Dividend income, Backup withholding. Tax ez , Reporting tax withheld. Tax ez Penalties, Penalties. Tax ez Bad debts Bank deposit, loss due to bank's insolvency or bankruptcy, Nonbusiness bad debt. Tax ez Reporting on Schedule D (Form 1040), How to report. Tax ez Claim for refund, Exceptions for special types of refunds. Tax ez , Filing a claim for refund. Tax ez Nonbusiness, Nonbusiness Bad Debts Recovery, Recoveries Reporting of, How to report bad debts. Tax ez Short-term capital loss, How to report bad debts. Tax ez When deductible, When deductible. Tax ez Baggage Business-related travel expense, Table 26-1. Tax ez Travel Expenses You Can Deduct This chart summarizes expenses you can deduct when you travel away from home for business purposes. Tax ez Balance due, Refund or balance due. Tax ez Bankruptcy Canceled debt not deemed to be income, Excluded debt. Tax ez Financial institution's bankruptcy causing deductible loss, Loss on Deposits Reporting of, Loss on deposits. Tax ez Banks Automatic investment service, determination of holding period, Automatic investment service. Tax ez IRAs with, When and How Can a Traditional IRA Be Opened? Losses on deposits, when casualty losses, Deposit in Insolvent or Bankrupt Financial Institution, Loss on Deposits Reporting of, Loss on deposits. Tax ez Money market accounts, Money Market Funds Bar associations Charitable contributions to, Contributions to Nonqualified Organizations Bar employees Tips (see Tip income) Bar review courses, Bar or CPA Review Course Bargain sales As charitable contributions, Bargain sales. Tax ez Basis of purchase, Bargain purchases. Tax ez Barter income, Bartering Definition of bartering, Bartering Form 1099-B, Form 1099-B from barter exchange. Tax ez Basis Adjusted basis, Adjusted Basis Allocation between business and personal use, Introduction Bad debts, Basis in bad debt required. Tax ez Bargain purchases, Bargain purchases. Tax ez Bonds, Stocks and Bonds, Bond premium. Tax ez Cost basis, Useful Items - You may want to see: IRAs for nondeductible contributions, Cost basis. Tax ez , Partly taxable. Tax ez Definition of, Introduction Gifts, Property Received as a Gift Home sales (see Sale of home) Improvements to real estate, Improvements. Tax ez Involuntary conversion, Involuntary Conversions Like-kind exchanges, Basis of property received. Tax ez Other than cost, Basis Other Than Cost, Tax-exempt obligations. Tax ez , No gain or loss. Tax ez Points not to be included, Settlement costs. Tax ez , Points. Tax ez Property received for services, Property Received for Services Real estate, Real Property Restricted property, Restricted property. Tax ez Stock or stock rights, Basis. Tax ez Tax-exempt obligations Bonds, Tax-exempt obligations. Tax ez Transfers between spouses, Property Transferred From a Spouse, Transfers Between Spouses Beetles Damage or destruction to trees and plants, when casualty loss, Progressive deterioration. Tax ez Beneficiaries, Beneficiary of an estate or trust. Tax ez , Rollover by surviving spouse. Tax ez , Estate and trust income. Tax ez , Losses. Tax ez (see also Estate beneficiaries) (see also Trust beneficiaries) Bequests, Estate and trust income. Tax ez , Losses. Tax ez , Gifts and inheritances. Tax ez , Income from property received as a gift. Tax ez (see also Estate beneficiaries) (see also Gifts) (see also Inheritance) Bicycle Fringe benefit, Qualified bicycle commuting. Tax ez Bingo, Table 24-1. Tax ez Examples of Charitable Contributions—A Quick Check, Contributions From Which You Benefit Birth control pills, Table 21-1. Tax ez Medical and Dental Expenses Checklist. Tax ez See Publication 502 for more information about these and other expenses. Tax ez Birth of child, Death or birth of child. Tax ez Head of household, qualifying person to file as, Death or birth. Tax ez , Death or birth. Tax ez Social security number to be obtained, Born and died in 2013. Tax ez Birth of dependent, Death or birth. Tax ez Blackmail Losses due to, Theft Blind persons Exemption from withholding, Age 65 or older or blind. Tax ez Guide dogs, deductible as medical expense, Table 21-1. Tax ez Medical and Dental Expenses Checklist. Tax ez See Publication 502 for more information about these and other expenses. Tax ez Impairment-related work expenses, deduction for, Impairment-Related Work Expenses Standard deduction for, Introduction, Higher Standard Deduction for Blindness Blood banks No charitable deduction for blood donations to, Table 24-1. Tax ez Examples of Charitable Contributions—A Quick Check, Value of Time or Services Blue books to determine fair market value, Cars, boats, and airplanes. Tax ez Boats Charitable gift of, deduction for fair market value, Cars, boats, and airplanes. Tax ez Donations of, Cars, boats, and airplanes. Tax ez Body scan, Table 21-1. Tax ez Medical and Dental Expenses Checklist. Tax ez See Publication 502 for more information about these and other expenses. Tax ez Bona fide business purpose Travel expenses, Bona fide business purpose. Tax ez Work-related education, Qualifying Work-Related Education Bonds Adjusted basis for, Stocks and Bonds Amortization of premium, Amortization of bond premium. Tax ez , Amortizable Premium on Taxable Bonds As capital assets, Capital Assets and Noncapital Assets, Stocks, stock rights, and bonds. Tax ez Convertible bonds, Convertible stocks and bonds. Tax ez Discounted Capital gain or loss, Discounted Debt Instruments Issued at discount, Original Issue Discount (OID) Market discount bonds, Market discount bonds. Tax ez Original issue discount, Original Issue Discount (OID) Redemption of, Redemption or retirement of bonds. Tax ez Retirement of, Retirement bonds. Tax ez , Redemption or retirement of bonds. Tax ez Sale of, Bonds Sold Between Interest Dates Savings, U. Tax ez S. Tax ez Savings Bonds, Series HH bonds. Tax ez , Series EE and series I bonds. Tax ez Sold at premium, computation of adjusted basis, Bond premium. Tax ez State or local government, tax-exempt, Tax-exempt state and local government bonds. Tax ez Tax-exempt, State or Local Government Obligations Bonuses, Supplemental Wages, Bonuses and awards. Tax ez , Employee awards or bonuses. Tax ez Bookkeeping (see Recordkeeping requirements) Books to determine fair market value, Car value. Tax ez Borrowed funds, Loans. Tax ez , Items You Cannot Deduct (see also Loans) Used for charitable contributions, deduction for, Borrowed funds. Tax ez Bottled water, Table 21-1. Tax ez Medical and Dental Expenses Checklist. Tax ez See Publication 502 for more information about these and other expenses. Tax ez Boy Scouts Charitable contributions to, Examples. Tax ez , Table 24-1. Tax ez Examples of Charitable Contributions—A Quick Check Braille books, Table 21-1. Tax ez Medical and Dental Expenses Checklist. Tax ez See Publication 502 for more information about these and other expenses. Tax ez Breach of contract Damages as income, Court awards and damages. Tax ez employment, Damages for Breach of Employment Contract Breast pump and supplies, Table 21-1. Tax ez Medical and Dental Expenses Checklist. Tax ez See Publication 502 for more information about these and other expenses. Tax ez Bribes, Bribes. Tax ez , List of Nondeductible Expenses Brokers Form 1099-B, Sales and Trades IRAs with, When and How Can a Traditional IRA Be Opened? Commissions, Brokers' commissions. Tax ez , Brokers' commissions. Tax ez Receiving dividends, reporting on Form 1099-MISC, Form 1099-MISC. Tax ez Burglary Losses due to, Theft Burial expenses, List of Nondeductible Expenses (see Funerals) Business associates, Meals and Incidental Expenses, Entertainment Expenses (see also Entertainment expenses) Business travel to meet, Transportation Expenses Travel expenses of, paying for, Business associate. Tax ez Business expenses, Meals and Incidental Expenses, Entertainment Expenses (see also Entertainment expenses) Job search expenses, Job interview expenses. Tax ez Meal expenses (see Meal and lodging expenses) Reimbursements, Expense allowances. Tax ez , Allowances and reimbursements. Tax ez Returning excess for business expenses, Returning Excess Reimbursements Returning excess business expenses, Expense allowances. Tax ez Travel (see Travel and transportation expenses) Work-related education, What Expenses Can Be Deducted Business organizations Charitable contributions to, Contributions to Nonqualified Organizations Business property As gift, adjusted basis for, Business property. Tax ez Basis for depreciation, Basis for depreciation. Tax ez Property use changed to, adjusted basis for, Property Changed From Personal to Business or Rental Use Sales or exchanges Like-kind exchanges, Like-kind exchanges. Tax ez Business tax credits Claim for refund, Exceptions for special types of refunds. Tax ez Business use of home, Home Office C Cafeteria plans, Cafeteria plans. Tax ez Calendar year taxpayers Accounting periods, When Do I Have To File?, Accounting Periods, Accounting period. Tax ez Filing due date, When Do I Have To File? California Nonoccupational Disability Benefit Fund, Contributions to state benefit funds. Tax ez Campaign contributions, Campaign contributions. Tax ez , Table 24-1. Tax ez Examples of Charitable Contributions—A Quick Check, Contributions to Nonqualified Organizations Presidential Election Campaign Fund, Presidential Election Campaign Fund Campaign expenses, Campaign Expenses Canada Resident of, Citizen or Resident Test, Child in Canada or Mexico. Tax ez Cancellation of debt, Canceled Debts Exceptions to treatment as income, Exceptions Candidates for public office Contributions to, no charitable deduction for, Table 24-1. Tax ez Examples of Charitable Contributions—A Quick Check, Contributions to Nonqualified Organizations Capital assets Coal and iron ore, Coal and iron ore. Tax ez Definition of, Capital Assets and Noncapital Assets Capital expenses, Capital expenses. Tax ez Capital gains or losses, Capital Gains and Losses, How to report and postpone gain. Tax ez , Reporting Gains and Losses Bad debts as short-term capital loss, How to report bad debts. Tax ez Carryover of, Long-term gains and losses. Tax ez , Capital loss carryover. Tax ez Worksheet, Figuring your carryover. Tax ez Character of gain, Capital Gains and Losses Character of loss, Capital Gains and Losses Child's distributions and dividends, reporting of, Child's capital gain distributions. Tax ez , Capital gain distributions and qualified dividends. Tax ez Collectibles, Investment interest deducted. Tax ez Deductions, Capital Losses Limit on, Limit on deduction. Tax ez Distributions, Money Market Funds Form 1040 or 1040A to be used, You can use Form 1040A if all of the following apply. Tax ez , How To Report Dividend Income Form 8949, Reporting Gains and Losses Hobbies, sales from collections, Hobby losses. Tax ez Holding period, determination of, Holding Period How to report, Reporting Capital Gains and Losses Installment sales and, Installment sales. Tax ez Lump-sum distributions from pensions and annuities, Capital Gain Treatment Mutual funds paying, Capital Gain Distributions Net capital gain, Capital Gains and Losses, Long-term gains and losses. Tax ez , Capital Gain Tax Rates Included as investment income, Choosing to include net capital gain. Tax ez Net long-term capital loss, Long-term gains and losses. Tax ez Sale of personal items, Sale of personal items. Tax ez Sale or trade of property held more than 1 year, Long-term or short-term. Tax ez , Long-term gains and losses. Tax ez Schedule D, Reporting Gains and Losses , Reporting Capital Gains and Losses Section 1250 gains from sale of real property, Capital Gains and Losses, Unrecaptured section 1250 gain. Tax ez State or local government bonds, tax-exempt, Tax-exempt state and local government bonds. Tax ez Tax rates, Capital Gain Tax Rates Total net gain, Total net gain or loss. Tax ez Total net loss, Total net gain or loss. Tax ez Undistributed gains, Long-term gains and losses. Tax ez Credit for tax on, Undistributed capital gains of mutual funds and REITs. Tax ez , Credit for Tax on Undistributed Capital Gain Car expenses, Car expenses. Tax ez Car pools, Car pools. Tax ez , Car pools. Tax ez Carrybacks Business tax credit carrybacks, Exceptions for special types of refunds. Tax ez Carryovers Capital loss, Long-term gains and losses. Tax ez , Capital loss carryover. Tax ez Worksheet, Figuring your carryover. Tax ez Investment interest, Limit on Deduction Cars, Transportation, Transporting school children. Tax ez , Car Expenses and Other Employee Business Expenses, Car Expenses (see also Standard mileage rates) (see also Travel and transportation) Accidents resulting in casualty loss, Deductible losses. Tax ez Value determination, Car value. Tax ez Willful negligence or intentional act as cause, Nondeductible losses. Tax ez Actual expenses, Car Expenses, Actual Car Expenses Advertising displays on, Advertising display on car. Tax ez Allowances from employers, Per Diem and Car Allowances As capital assets, Capital Assets and Noncapital Assets Blue book to determine fair market value, Cars, boats, and airplanes. Tax ez Books to determine fair market value, Car value. Tax ez Business and personal use, allocation between, Business and personal use. Tax ez , Separating expenses. Tax ez Business-related travel expenses, Table 26-1. Tax ez Travel Expenses You Can Deduct This chart summarizes expenses you can deduct when you travel away from home for business purposes. Tax ez Car pools, Car pools. Tax ez Charitable gift of, deduction for fair market value, Cars, boats, and airplanes. Tax ez Charitable organization service, use for, Car expenses. Tax ez Depreciation, Depreciation and section 179 deductions. Tax ez Donations of, Cars, boats, and airplanes. Tax ez Fixed and variable rate (FAVR), Fixed and variable rate (FAVR). Tax ez Form 2106 or 2106-EZ, how to fill out, Car expenses. Tax ez Hauling tools or instruments, Hauling tools or instruments. Tax ez Interest on loans, not deductible, Personal Interest Leased vehicles, Leasing a car. Tax ez Medical transportation, Table 21-1. Tax ez Medical and Dental Expenses Checklist. Tax ez See Publication 502 for more information about these and other expenses. Tax ez , Transportation, Car expenses. Tax ez Parking (see Parking fees) Personal property taxes on, deduction of, Personal Property Taxes Reporting of, How To Report Table 26-3 showing forms to be used, Per diem allowance more than federal rate. Tax ez Sale, trade-in, or other disposition, Sale, Trade-In, or Other Disposition Section 179 deductions, Depreciation and section 179 deductions. Tax ez Work-related education, transportation for, Using your car. Tax ez Cash Dividends paid as, Introduction Rebates, Cash rebates. Tax ez Sales of property for, Payment of cash. Tax ez Cash contributions, records to keep, Cash Contributions Cash method taxpayers, Cash method. Tax ez Bad debts, Basis in bad debt required. Tax ez Points, deduction of, Deduction Allowed in Year Paid Real estate transactions, tax allocation, Division of real estate taxes between buyers and sellers. Tax ez Taxes paid during tax year, deduction of, You must pay the tax during your tax year. Tax ez Worthless securities and negotiable promissory notes, Worthless securities. Tax ez Cash rebates, Cash rebates. Tax ez Casualties, Home destroyed or condemned. Tax ez Casualty insurance Premiums not in property basis, Settlement costs. Tax ez Reimbursements from, Casualty insurance and other reimbursements. Tax ez Casualty losses, Nonbusiness Casualty and Theft Losses, Net operating loss (NOL). Tax ez , Casualty and Theft Losses, Casualty and Theft Losses of Income-Producing Property Adjusted basis in property, Casualty and theft losses. Tax ez , Involuntary Conversions, Adjusted Basis, Adjustments to basis. Tax ez Amount of loss, Figuring a Loss Appraisals, Appraisal. Tax ez , Costs of photographs and appraisals. Tax ez Bank deposit, loss due to bank's insolvency or bankruptcy, Casualty loss or ordinary loss. Tax ez Costs Cleaning up or making repairs, Cost of cleaning up or making repairs. Tax ez Photographs and appraisals, Costs of photographs and appraisals. Tax ez Deductible losses, Deductible losses. Tax ez $100 rule, $100 Rule When to take (Table 25-2), Gains more than losses. Tax ez Deduction limits, Deduction Limits For personal property (Table 25-1), Actual reimbursement same as expected. Tax ez Definition of casualty, Casualty Disasters, Employer's emergency disaster fund. Tax ez , Disaster relief. Tax ez (see also Disaster relief) Employer's emergency disaster fund, Employer's emergency disaster fund. Tax ez Fair market value of property, Decrease in Fair Market Value Form 4684 to be filed, Forms to file. Tax ez Insurance proceeds, treatment of, Insurance and Other Reimbursements Net operating losses, Net operating loss (NOL). Tax ez Nondeductible losses, Deductible losses. Tax ez Proof of loss, Casualty loss proof. Tax ez Property used partly for business and partly for personal purposes, Property used partly for business and partly for personal purposes. Tax ez Reimbursement, Insurance and Other Reimbursements Reporting of gain or loss, When To Report Gains and Losses, Losses. Tax ez , How To Report Gains and Losses Single casualty on multiple properties, Single Casualty on Multiple Properties Cemeteries Charitable contributions to, Types of Qualified Organizations Certificate, mortgage credit, Who qualifies. Tax ez Certificates of deposit (CDs), Certificates of deposit (CDs). Tax ez , Individual Retirement Arrangements (IRAs) (see also Individual retirement arrangements (IRAs)) Chambers of commerce Charitable contributions to, Table 24-1. Tax ez Examples of Charitable Contributions—A Quick Check, Contributions to Nonqualified Organizations Entertainment expenses for attending meetings, Trade association meetings. Tax ez Change of address, Change of Address Change of name, Name change. Tax ez , Name changed. Tax ez Chaplains Life insurance proceeds when death in line of duty, Public Safety Officer Killed in the Line of Duty Charitable contributions, Contributions, Introduction, Organizations That Qualify To Receive Deductible Contributions, Types of Qualified Organizations, Contributions You Can Deduct, Contributions From Which You Benefit, Table 24-1. Tax ez Examples of Charitable Contributions—A Quick Check, Token items. Tax ez , Written statement. Tax ez , Contributions You Cannot Deduct, Contributions to Individuals, Contributions to Nonqualified Organizations, Contributions From Which You Benefit, Contributions of Property, Determining Fair Market Value, Large quantities. Tax ez , Giving Property That Has Decreased in Value, Giving Property That Has Increased in Value, Ordinary income property. Tax ez , Capital gain property. Tax ez , Amount of deduction — general rule. Tax ez , Bargain sales. Tax ez , When To Deduct, Time of making contribution. Tax ez , Noncash Contributions, Additional records. Tax ez , How To Report Gifts to reduce public debt, Gift To Reduce Debt Held by the Public Charitable distributions, qualified, Qualified charitable distributions (QCD). Tax ez Charity benefit events Deduction amount for charitable contributions, Charity benefit events. Tax ez Check-writing fees, Check-Writing Fees on Personal Account Checklists Medical and dental expense deductions (Table 21-1), Medicare A. Tax ez Checks As charitable contributions, Checks. Tax ez Canceled checks as evidence of travel expenses, Canceled check. Tax ez Constructive receipt of, Check received or available. Tax ez Child Foster child, Rule 10. Tax ez You Cannot Be a Qualifying Child of Another Taxpayer, Rule 13. Tax ez You Cannot Be a Qualifying Child of Another Taxpayer Married child, Married child. Tax ez Child and dependent care credit, You can use Form 1040A if all of the following apply. Tax ez Due diligence, Getting the information. Tax ez Earned income, Earned income. Tax ez Full-time student, Rule for student-spouse or spouse not able to care for self. Tax ez Married filing separately, Special Rules Payments to relatives, Payments to Relatives or Dependents Child born alive, Child born alive. Tax ez Child care, You can use Form 1040A if all of the following apply. Tax ez Babysitting, Babysitting. Tax ez Care providers, Childcare providers. Tax ez Expenses, Child care expenses. Tax ez Nursing care for healthy baby, not deductible as medical expense, Table 21-1. Tax ez Medical and Dental Expenses Checklist. Tax ez See Publication 502 for more information about these and other expenses. Tax ez Child custody, Custodial parent and noncustodial parent. Tax ez Child support, Child support payments. Tax ez Alimony, difference from, Payments not alimony. Tax ez , Alimony requirements. Tax ez , Child support. Tax ez Child tax credit, Who Should File, You can use Form 1040A if all of the following apply. Tax ez , Child tax credit. Tax ez , Child Tax Credit Additional credit, Additional Child Tax Credit Amount of credit, Amount of Credit Claiming, procedure for, Claiming the Credit Limits, Special Rules, Limits on the Credit Modified adjusted gross income, Modified AGI. Tax ez Married filing separately, Special Rules Qualifying child, Qualifying Child Child, qualifying, Qualifying Child Childcare Credit, Child and Dependent Care Credit Provider Taxpayer identification number, Provider Identification Test Children, Adoption Assistance, Personal Expenses (see also Adoption) Additional credit on child tax credit, Additional Child Tax Credit Adoption (see Adopted child) Babysitters, Babysitting. Tax ez Birth of child Head of household, qualifying person to file as, Death or birth. Tax ez , Death or birth. Tax ez Social security number to be obtained, Born and died in 2013. Tax ez Care providers, Childcare providers. Tax ez (see also Child care) Child's tax, figuring of, Step 3. Tax ez Figuring the Child's Tax (Form 8615, Part III) Alternative minimum tax, Alternative minimum tax. Tax ez Credit for, Who Should File, You can use Form 1040A if all of the following apply. Tax ez (see also Child and dependent care credit) (see also Child tax credit) Custody of, Custodial parent and noncustodial parent. Tax ez Death of child Head of household, qualifying person to file as, Death or birth. Tax ez , Death or birth. Tax ez Deductions, Line 2 (deductions). Tax ez Dividends of (see this heading: Investment income of child under age 18) Earnings of, Child's earnings. Tax ez Filing requirements, Child's earnings. Tax ez As dependents (Table 1-2), Do I Have To File a Return? Gifts to, Income from property given to a child. Tax ez , Income from property received as a gift. Tax ez Inclusion of child's income on parent's return (Figure 31-A), Penalty for underpayment of estimated tax. Tax ez Income, calculation of, Figuring Child's Income Capital gains distributions, Capital gain distributions and qualified dividends. Tax ez Investment income of, Tax on unearned income of certain children. Tax ez Investment income of child under age 18 Dependent filing requirements (Table 1-2), Do I Have To File a Return? Interest and dividends, Certain Children Under Age 19 or Full-Time Students Parents' election to report on Form 1040, Certain Children Under Age 19 or Full-Time Students, Investment income of child reported on parent's return. Tax ez Kidnapped, Kidnapped child. Tax ez , Kidnapped child. Tax ez Net unearned income, figuring of, Step 1. Tax ez Figuring the Child's Net Unearned Income (Form 8615, Part I) Nontaxable income, Nontaxable income. Tax ez Property received as gift, income from, Income from property received as a gift. Tax ez Signing return, parent for child, Spouse unable to sign. Tax ez Standard deduction for, Introduction, Standard Deduction for Dependents Stillborn, Stillborn child. Tax ez Support of (see Child support) Tax credit (see Child tax credit) Tentative tax figured at parent's tax rate, Step 2. Tax ez Figuring Tentative Tax at the Parent's Tax Rate (Form 8615, Part II) Transporting school children, Transporting school children. Tax ez Unearned income of, Tax on unearned income of certain children. Tax ez Unearned income of certain children, Introduction Form 8615, use of (Figure 31-B), Parental information, providing of, Providing Parental Information (Form 8615, lines A–C) Parents' election to report on Form 1040, Parent's Election To Report Child's Interest and Dividends Trust income, Trust income. Tax ez Unearned income defined, Unearned income defined. Tax ez Chronic illness Accelerated payment of life insurance proceeds (see Accelerated death benefits) Long-term care (see Long-term care insurance contracts) Church employees Filing requirements (Table 1-3), Figuring tax. Tax ez Churches, temples, etc. Tax ez Charitable contributions to, Examples. Tax ez , Table 24-1. Tax ez Examples of Charitable Contributions—A Quick Check Convention delegates, deduction of unreimbursed expenses, Conventions. Tax ez Citizen or resident test, Citizen or Resident Test Citizens outside U. Tax ez S. Tax ez Business travel outside U. Tax ez S. Tax ez , Travel Outside the United States, Travel Primarily for Business, Travel Primarily for Personal Reasons Self-employed persons, Exception 1 - No substantial control. Tax ez Standard meal allowance, Standard meal allowance for areas outside the continental United States. Tax ez Earned income exclusion, Reminders Employment (see Foreign employment) Extension of time to file, Individuals Outside the United States Filing requirements, U. Tax ez S. Tax ez Citizens and Resident Aliens Living Abroad Withholding from IRA distributions, IRA distributions delivered outside the United States. Tax ez Civic associations Charitable contributions to, Contributions to Nonqualified Organizations Contributions to, no charitable deduction for, Table 24-1. Tax ez Examples of Charitable Contributions—A Quick Check Civil defense organizations Charitable contributions to, Examples. Tax ez Civil service retirement benefits, Civil service retirement benefits. Tax ez Civil suits, Court awards and damages. Tax ez (see also Damages from lawsuits) Civil tax penalties (see Penalties) Clergy, Ministers. Tax ez Contributions that can be spent as individual wishes, not deductible charitable contribution, Contributions to Individuals Housing, Clergy Real estate taxes when receiving housing allowance, Ministers' and military housing allowances. Tax ez , Ministers' and military housing allowance. Tax ez Life insurance proceeds when chaplain died in line of duty, Public Safety Officer Killed in the Line of Duty Pensions, Pension. Tax ez Special income rules, Clergy Clerical help, deductibility of, Clerical Help and Office Rent Clients, Meals and Incidental Expenses, Entertainment Expenses (see also Entertainment expenses) Business travel to meet, Transportation Expenses Travel expenses of, paying for, Business associate. Tax ez Closing costs Real property transactions, Settlement costs. Tax ez Sale of home, Settlement fees or closing costs. Tax ez Clothing Military, Military uniforms. Tax ez Moth damage, not casualty loss, Progressive deterioration. Tax ez Uniforms Charitable organization requiring, deduction for cost and upkeep of, Uniforms. Tax ez Used clothing, charitable deduction for fair market value, Used clothing and household items. Tax ez work, Work Clothes and Uniforms Club dues and membership fees Entertainment expenses, Club dues and membership fees. Tax ez Co-owners Dwelling unit used as home by co-owner, rental income and expense allocation, Shared equity financing agreement. Tax ez Coal and iron ore, Coal and iron ore. Tax ez Coins (see Collectibles) Collectibles As capital assets, Capital Assets and Noncapital Assets, Gold, silver, stamps, coins, gems, etc. Tax ez Gains or losses from sale or trade of, Investment interest deducted. Tax ez IRA investment in, Investment in Collectibles, Exception. Tax ez College professor Research expenses, Research Expenses of a College Professor Colleges and universities Charitable contributions to, Examples. Tax ez , Table 24-1. Tax ez Examples of Charitable Contributions—A Quick Check Athletic events, amount deductible, Athletic events. Tax ez Education costs, Qualified tuition programs (QTPs). Tax ez (see also Qualified tuition programs) Employer-provided educational assistance, Qualified Education Expenses (see also Educational assistance) Combat zone Extension to file return, Individuals Serving in Combat Zone Signing return for spouse, Spouse in combat zone. Tax ez Commission drivers Deduction of expenses, Statutory employees. Tax ez Commissions, Supplemental Wages Advance, Advance commissions and other earnings. Tax ez IRAs with brokers, Brokers' commissions. Tax ez , Brokers' commissions. Tax ez Property basis to include when buyer pays, Settlement costs. Tax ez Sharing of (kickbacks), Kickbacks. Tax ez Unearned, deduction for repayment of, Advance commissions and other earnings. Tax ez Commodities Derivative financial instruments, Capital Assets and Noncapital Assets Common law marriage, Considered married. Tax ez Communist organizations Charitable contributions to, Contributions to Nonqualified Organizations Community property, Community income. Tax ez , Community property. Tax ez Alimony, difference from, Payments not alimony. Tax ez IRAs, Community property laws. Tax ez Married filing separately, Community property states. Tax ez Medical and dental expenses, Community property states. Tax ez Commuting expenses, Commuting expenses. Tax ez , Commuting Expenses Employer-provided commuter vehicle, Commuter highway vehicle. Tax ez Compensation, Wages, Salaries, and Other Earnings (see also Wages and salaries) Defined for IRA purposes, What is compensation? Defined for Roth IRA purposes, Compensation. Tax ez Employee, Employee Compensation Miscellaneous compensation, Miscellaneous Compensation Nonemployee, Nonemployee compensation. Tax ez Unemployment, Unemployment compensation. Tax ez Computation of tax, Computations Equal amounts, Equal amounts. Tax ez Negative amounts, Negative amounts. Tax ez Rounding off dollars, Rounding off dollars. Tax ez Computer, Depreciation on Computers Condemnation of property, Home destroyed or condemned. Tax ez , Condemnations. Tax ez Basis computation, Involuntary Conversions Disaster areas, government-ordered demolition of unsafe home, Deductible losses. Tax ez Period of ownership and use, Previous home destroyed or condemned. Tax ez Confidential information Privacy Act and paperwork reduction information, Reminders Travel expenses and, Confidential information. Tax ez Constructive receipt of income, Constructive receipt. Tax ez , Payment to an agent. Tax ez , Constructive receipt. Tax ez Contributions, Gift To Reduce Debt Held by the Public, Campaign contributions. Tax ez , Contributions, Table 24-1. Tax ez Examples of Charitable Contributions—A Quick Check, Contributions to Nonqualified Organizations, How To Report (see also Campaign contributions) (see also Charitable contributions) Nontaxable combat pay, Nontaxable combat pay. Tax ez Political, Political Contributions Reservist repayments, Qualified reservist repayments. Tax ez Retirement (see specific type of plan ) Controlled corporations Nontaxable stock purchase of, Property for stock of a controlled corporation. Tax ez Related party transactions, Losses on sales or trades of property. Tax ez Convenience fees, Credit or Debit Card Convenience Fees Conventions Delegates Deduction of unreimbursed expenses, Conventions. Tax ez Travel expenses, Conventions Travel expenses, Conventions Work-related education, deduction of travel expenses for overseas conventions, Cruises and conventions. Tax ez Conversion (see specific retirement or IRA plan ) Convertible stocks and bonds, Convertible stocks and bonds. Tax ez Cooperative housing Dwelling unit used as home, Introduction Mortgage interest statements, Form 1098, Mortgage Interest Statement Real estate taxes, deduction of, Tenant-shareholders in a cooperative housing corporation. Tax ez Sale or trade of Form 1099-S to report, Form 1099-S transactions. Tax ez Period of ownership and use, Cooperative apartment. Tax ez Cooperatives Patronage dividends, Patronage dividends. Tax ez Copyrights, Capital Assets and Noncapital Assets Infringement damages, Court awards and damages. Tax ez Royalties, Royalties Corporations, S Corporation Income (see also S corporations) Controlled corporations, Property for stock of a controlled corporation. Tax ez , Losses on sales or trades of property. Tax ez Director fees as self-employment income, Corporate director. Tax ez Reorganizations and nontaxable trade of stock, Corporate reorganizations. Tax ez Corrections (see Errors) Cosmetic surgery Not deductible as medical expense, Table 21-1. Tax ez Medical and Dental Expenses Checklist. Tax ez See Publication 502 for more information about these and other expenses. Tax ez Cosmetics Not deductible as medical expense, Table 21-1. Tax ez Medical and Dental Expenses Checklist. Tax ez See Publication 502 for more information about these and other expenses. Tax ez Cost basis, Useful Items - You may want to see: IRAs for nondeductible contributions, Cost basis. Tax ez , Partly taxable. Tax ez Cost-of-living allowances, Government cost-of-living allowances. Tax ez Country clubs Charitable contributions to, Contributions to Nonqualified Organizations Dues Charitable deduction not allowed, Table 24-1. Tax ez Examples of Charitable Contributions—A Quick Check, Membership fees or dues. Tax ez Entertainment expense deduction not allowed, Club dues and membership fees. Tax ez Coupon bonds, Coupon bonds. Tax ez Court awards and damages (see Damages from lawsuits) Cousin, Cousin. Tax ez Coverdell ESAs Additional tax on, Other taxes. Tax ez CPAs (see Accountants) Credit cards Annual fees, not deductible, Items You Cannot Deduct Benefits, taxability of insurance, Credit card insurance. Tax ez Charitable contributions charged to, Credit card. Tax ez Finance charges, not deductible, Personal Interest Payment of taxes, Reminders Credit for child and dependent care expenses, Credit for child and dependent care expenses. Tax ez , Credit for child and dependent care expenses. Tax ez Credit for prior year minimum tax Nonrefundable, Nonrefundable Credit for Prior Year Minimum Tax Credit for the elderly or the disabled, Credit for the elderly or the disabled. Tax ez , Credit for the elderly or the disabled. Tax ez Credit or debit cards Payment of taxes, E-file and pay by credit or debit card or by direct transfer from your bank account. Tax ez Credit reports Costs not included in property basis, Settlement costs. Tax ez Fees for, not deductible, Items You Cannot Deduct Credit to holders of tax credit bonds, Credit to Holders of Tax Credit Bonds Credits, Credits. Tax ez , Earned income credit. Tax ez , Credit for child and dependent care expenses. Tax ez , Credit for the elderly or the disabled. Tax ez , Earned income credit. Tax ez , Credit for child and dependent care expenses. Tax ez , Credit for the elderly or the disabled. Tax ez , Earned income credit. Tax ez Alternative motor vehicle, Alternative Motor Vehicle Credit American opportunity, Special Rules Build America bonds (see Credit to holders of tax credit bonds) Capital gains, undistributed, credit for tax on, Undistributed capital gains of mutual funds and REITs. Tax ez , Credit for Tax on Undistributed Capital Gain Child and dependent care, Child and Dependent Care Credit (see Child and dependent care credit) Child tax (see Child tax credit) Clean renewable energy bonds (see Credit to holders of tax credit bonds) Earned income, Earned Income Credit (EIC) (see Earned income credit) Elderly or the disabled, Credit for the Elderly or the Disabled Excess withholding, Credit for Excess Social Security Tax or Railroad Retirement Tax Withheld Foreign tax, Foreign Tax Credit Health coverage, Health Coverage Tax Credit Lifetime learning (see Lifetime learning credit) Mortgage interest, Mortgage Interest Credit Nonrefundable credits, Nonrefundable Credits Plug-in electric drive motor vehicle, Plug-in Electric Drive Motor Vehicle Credit Prior year minimum tax (AMT), nonrefundable, Nonrefundable Credit for Prior Year Minimum Tax Qualified energy conservation bonds (see Credit to holders of tax credit bonds) Qualified school construction bonds (see Credit to holders of tax credit bonds) Qualified zone academy bonds (see Credit to holders of tax credit bonds) Refundable credits, Refundable Credits Residential energy, Residential Energy Credits Retirement savings contribution, Retirement Savings Contributions Credit (Saver's Credit) Cremation Not deductible as medical expense, Table 21-1. Tax ez Medical and Dental Expenses Checklist. Tax ez See Publication 502 for more information about these and other expenses. Tax ez Criminal prosecutions Travel expenses for federal staff, Exception for federal crime investigations or prosecutions. Tax ez Cruises Travel expenses when incidental business activities, Trip Primarily for Personal Reasons Work-related education, deduction of expenses, Cruises and conventions. Tax ez Custodial fees, Investment Fees and Expenses Custody of child, Custodial parent and noncustodial parent. Tax ez Customers, Meals and Incidental Expenses, Entertainment Expenses (see also Entertainment expenses) Business travel to meet, Transportation Expenses Travel expenses of, paying for, Business associate. Tax ez D Daily allowance (see Per diem) Damage to property, Nonbusiness Casualty and Theft Losses (see also Casualty losses) Disasters, Employer's emergency disaster fund. Tax ez , Disaster relief. Tax ez (see also Disaster relief) Damages, Damages for Breach of Employment Contract Damages from lawsuits, Court awards and damages. Tax ez Medical expenses as part of settlement, Damages for Personal Injuries Dating your return, Signatures Daycare centers, You can use Form 1040A if all of the following apply. Tax ez , Childcare providers. Tax ez , Care outside your home. Tax ez (see also Child and dependent care credit) (see also Child care) De minimis benefits, De Minimis (Minimal) Benefits Deadlines (see Due dates) Death (see Decedents) Death benefits Accelerated, Accelerated Death Benefits, Exclusion for terminal illness. Tax ez Life insurance proceeds (see Life insurance) Public safety officers who died or were killed in line of duty, tax exclusion, Public Safety Officer Killed in the Line of Duty Death of child, Death or birth of child. Tax ez Death of dependent, Death or birth. Tax ez Debt instruments (see Bonds or Notes) Debts, Exceptions for special types of refunds. Tax ez , Recoveries (see also Bad debts) Canceled (see Cancellation of debt) Nonrecourse, Mortgage relief upon sale or other disposition. Tax ez Paid by another, Debts paid for you. Tax ez Payoff of debt included in sales transaction, Debt paid off. Tax ez Public, gifts to reduce, Gift To Reduce Debt Held by the Public Recourse, Mortgage relief upon sale or other disposition. Tax ez Refund offset against, Refunds. Tax ez , Offset against debts. Tax ez Deceased taxpayers (see Decedents) Decedents, Surviving Spouses, Executors, Administrators, and Legal Representatives (see also Executors and administrators) Capital loss of, Decedent's capital loss. Tax ez Deceased spouse, Surviving Spouses, Executors, Administrators, and Legal Representatives Personal exemption, Death of spouse. Tax ez Due dates, Filing for a decedent. Tax ez Filing requirements, Surviving Spouses, Executors, Administrators, and Legal Representatives Funeral expenses, Contributions to Individuals Medical and dental expenses, Decedent Savings bonds, Decedents. Tax ez Spouse's death, Spouse died during the year. Tax ez , Spouse died. Tax ez Standard deduction, Decedent's final return. Tax ez Transfer of property at death, Other property transactions. Tax ez Declaration of rights of taxpayers IRS request for information, Reminders Deduction Costs of discrimination suits, Deduction for costs involved in unlawful discrimination suits. Tax ez Deductions, Special Rules, Personal Exemptions and Dependents, Your Own Exemption, Recoveries, Nonbusiness Bad Debts, How to report bad debts. Tax ez , Capital Losses , Introduction, Standard Deduction, Points, Treatment by buyer. Tax ez , Meals and Incidental Expenses, Entertainment Expenses (see also Bad debts) (see also Capital losses) (see also Entertainment expenses) (see also Personal exemption) (see also Points) (see also Recovery of amounts previously deducted) (see also Standard deduction) Alimony, deductible by payer, How To Deduct Alimony Paid Casualty losses, Casualty and Theft Losses of Income-Producing Property (see Capital losses) Changing claim after filing, need to amend, Amended Returns and Claims for Refund Charitable contributions, Contributions, How To Report (see also Charitable contributions) Dental expenses (see Medical and dental expenses) Depreciation, Depreciation and section 179 deduction. Tax ez Educator expenses, Educator Expenses Estate, Excess Deductions of an Estate Fee-basis government officials, Special Rules Impairment-related work expenses, Impairment-Related Work Expenses, Impairment-related work expenses of disabled employees. Tax ez Interest (see Interest payments) Investment expenses, Investment expenses. Tax ez IRA contributions (see Individual retirement arrangements (IRAs)) Itemizing (see Itemized deductions) Long-term care insurance contracts, Table 21-1. Tax ez Medical and Dental Expenses Checklist. Tax ez See Publication 502 for more information about these and other expenses. Tax ez Medical expenses (see Medical and dental expenses) Mortgage interest, Hardest Hit Fund and Emergency Homeowners' Loan Programs. Tax ez (see Mortgages) Not itemizing, use of Form 1040A, You can use Form 1040A if all of the following apply. Tax ez Pass-through entities, Indirect Deductions of Pass-Through Entities Penalties, no deduction permitted, Penalties. Tax ez Performing artists' expenses, Expenses of certain performing artists. Tax ez Prepaid insurance premiums, Prepaid insurance premiums. Tax ez Prescription medicines, Table 21-1. Tax ez Medical and Dental Expenses Checklist. Tax ez See Publication 502 for more information about these and other expenses. Tax ez Rental expenses, When to deduct. Tax ez Repayments, Repayments Section 179 deductions Adjustment to basis for, Depreciation and section 179 deduction. Tax ez Car expenses, Depreciation and section 179 deductions. Tax ez Self-employed persons Health insurance premiums, Health Insurance Costs for Self-Employed Persons Social security and railroad retirement benefits, Deductions Related to Your Benefits Standard deduction, Standard Deduction, Married persons who filed separate returns. Tax ez Stop-smoking programs, Table 21-1. Tax ez Medical and Dental Expenses Checklist. Tax ez See Publication 502 for more information about these and other expenses. Tax ez Student loan interest deduction (see Student loans) Theft loss, Casualty and Theft Losses of Income-Producing Property Transportation expenses (see Travel and transportation expenses) Union dues (see Labor unions) Work-related education, What Expenses Can Be Deducted Deeds Preparation costs for, Amounts charged for services. Tax ez Recording fees, basis to include, Real estate taxes. Tax ez Deferred annuity contracts (see Annuities) Deferred compensation Limit, Elective deferrals. Tax ez Nonqualified plans, Nonqualified deferred compensation plans. Tax ez Deferred compensation plans (see Retirement plans) Delinquent taxes Real estate transactions, tax allocation, Real estate taxes for prior years. Tax ez Delivery services, Private delivery services. Tax ez Business-related travel expense, Table 26-1. Tax ez Travel Expenses You Can Deduct This chart summarizes expenses you can deduct when you travel away from home for business purposes. Tax ez Demutualization of life insurance companies, Demutualization of life insurance companies. Tax ez Dental expenses (see Medical and dental expenses) Dentures Deductibility as medical expense, Table 21-1. Tax ez Medical and Dental Expenses Checklist. Tax ez See Publication 502 for more information about these and other expenses. Tax ez Dependent care Benefits, Dependent care benefits. Tax ez , Dependent Care Benefits Center, Dependent care center. Tax ez Credit for, Child and Dependent Care Credit Dependent taxpayer test, Dependent Taxpayer Test Dependents, Who Should File, You can use Form 1040A if all of the following apply. Tax ez , Exception for adopted child. Tax ez , Filers who have certain child dependents with an Individual Taxpayer Identification Number (ITIN). Tax ez (see also Child tax credit) Birth of, Death or birth. Tax ez Born and died within year, Exception. Tax ez , Born and died in 2013. Tax ez Death of, Death or birth. Tax ez Deceased dependent's medical and dental expenses, What if you pay medical expenses of a deceased spouse or dependent? Disabled dependent care expenses, deduction for, Disabled Dependent Care Expenses Exemption for, Exemptions for Dependents Filing requirements, Child's earnings. Tax ez Earned income, unearned income, and gross income levels (Table 1-2), Do I Have To File a Return? Married, filing joint return, Joint Return Test, Joint Return Test (To Be a Qualifying Child) Medical and dental expenses, Dependent Qualifying child, Qualifying Child, Qualifying Child Qualifying relative, Qualifying Relative, Qualifying Child Social security number, Dependent's SSN. Tax ez Adoption taxpayer identification number, Adoption taxpayer identification number (ATIN). Tax ez , Taxpayer identification numbers for aliens. Tax ez Alien dependents, Born and died in 2013. Tax ez Standard deduction for, Standard Deduction for Dependents Travel expenses for, Travel expenses for another individual. Tax ez Tuition deduction for, Who Can Claim a Dependent's Expenses Dependents not allowed to claim dependents, Dependent Taxpayer Test Depletion allowance, Depletion. Tax ez Deposits, Fees and deposits. Tax ez Loss on, Loss on Deposits Losses on, Deposit in Insolvent or Bankrupt Financial Institution, Loss on Deposits Reporting of, Loss on deposits. Tax ez Depreciation Adjustment to basis for, Depreciation and section 179 deduction. Tax ez Cars, Depreciation and section 179 deductions. Tax ez Change of use of property, Basis for depreciation. Tax ez Computer, Depreciation on Computers Correcting amount claimed, Claiming the correct amount of depreciation. Tax ez Form 4562 Rental property depreciation, Depreciation Home computer, Depreciation on Home Computer Property used in trade or business, as noncapital assets, Capital Assets and Noncapital Assets Real property Gain from disposition of property, Depreciation after May 6, 1997. Tax ez Land, no depreciation of, Land. Tax ez Rental property, Depreciation. Tax ez , Depreciation Designated Roth Account Defined. Tax ez , Designated Roth accounts. Tax ez Designated Roth account, Designated Roth accounts. Tax ez , Designated Roth accounts. Tax ez Destroyed records, Destroyed records. Tax ez Diaper service, Table 21-1. Tax ez Medical and Dental Expenses Checklist. Tax ez See Publication 502 for more information about these and other expenses. Tax ez Differential wage payments, Differential wage payments. Tax ez Differential wages Wages for reservists Military reserves, Differential wage payments. Tax ez Direct deposit of refunds, Refunds Directors' fees, Corporate director. Tax ez Disabilities, persons with, Qualifying Person Test, Physically or mentally not able to care for oneself. Tax ez , Credit for the Elderly or the Disabled (see also Elderly or the disabled) Accrued leave payment, Accrued leave payment. Tax ez Armed forces, Disability. Tax ez Blind (see Blind persons) Cafeteria plans, Cafeteria plans. Tax ez Credit for (see Elderly or disabled, credit for) Dependent who is disabled, deduction for care expenses, Disabled Dependent Care Expenses Guide dogs, deductible as medical expense, Table 21-1. Tax ez Medical and Dental Expenses Checklist. Tax ez See Publication 502 for more information about these and other expenses. Tax ez Impairment-related work expenses of, Impairment-Related Work Expenses, Impairment-related work expenses of disabled employees. Tax ez Work-related education, Impairment-Related Work Expenses Insurance costs, Cost paid by you. Tax ez Military and government pensions, Military and Government Disability Pensions Public assistance benefits, Persons with disabilities. Tax ez Reporting of disability pension income, Disability Pensions Retirement, pensions, and profit-sharing plans, Sickness and Injury Benefits, Retirement and profit-sharing plans. Tax ez Signing of return by court-appointed representative, Court-appointed, conservator, or other fiduciary. Tax ez Social security and railroad retirement benefits, deductions for, Disability payments. Tax ez Special school or home for, deductibility of medical expense, Table 21-1. Tax ez Medical and Dental Expenses Checklist. Tax ez See Publication 502 for more information about these and other expenses. Tax ez Terrorist attack as cause of injury, disability payments excluded from taxation, Disability pensions. Tax ez Workers' compensation, Workers' Compensation Disability Income, Disability income. Tax ez Disability benefits Earned income credit, Form 4029. Tax ez Disability insurance payments Earned income credit, Disability insurance payments. Tax ez Disability, permanent and total disability, Permanent and total disability. Tax ez Disabled Child, Permanently and totally disabled. Tax ez Dependent, Disabled dependent working at sheltered workshop. Tax ez Disaster Assistance Act of 1988 Withholding, Federal Payments Disaster relief, Terrorist attack or military action. Tax ez , Disaster relief payments. Tax ez , Disaster relief. Tax ez (see also Terrorist attacks) Cash gifts to victims, Cash gifts. Tax ez Disaster Relief and Emergency Assistance Act Grants, Disaster relief grants. Tax ez Unemployment assistance, Types of unemployment compensation. Tax ez Employer's emergency disaster fund, Employer's emergency disaster fund. Tax ez Government-ordered demolition or relocation of home that is unsafe due to, Deductible losses. Tax ez Grants or payments, Disaster relief grants. Tax ez Replacement of lost or destroyed property, Disaster relief. Tax ez Discharge of qualified principal residence indebtedness, Discharges of qualified principal residence indebtedness. Tax ez , Adjusted Basis Disclosure statement, Disclosure statement. Tax ez Discount, bonds and notes issued at, Original Issue Discount (OID) Discounted debt instruments Capital gain or loss, Discounted Debt Instruments Discounts Employee discounts, effect on basis, Bargain purchases. Tax ez Distributions, Eligible rollover distributions. Tax ez (see also Rollovers) Early (see Early withdrawal from deferred interest account) Liquidating distributions, Liquidating Distributions Lump sum (see Lump-sum distributions) Nondividend distributions, Nondividend Distributions Qualified charitable, Qualified charitable distributions (QCD). Tax ez Qualified reservist, Qualified reservist distributions. Tax ez Required minimum distributions, Required distributions. Tax ez , Required distributions. Tax ez , When Must You Withdraw IRA Assets? (Required Minimum Distributions) (see also Individual retirement arrangements (IRAs)) (see also Pensions) Return of capital, Nondividend Distributions District of Columbia First-time homebuyer credit, Decreases to basis. Tax ez Dividends, Dividends and Other Distributions, Form 1099-DIV. Tax ez , More information. Tax ez (see also Form 1099-DIV) Alaska Permanent Fund (see Alaska Permanent Fund dividends) As stock dividends and stock rights, Distributions of Stock and Stock Rights Backup withholding, Backup withholding. Tax ez Beneficiary of estate or trust receiving, Beneficiary of an estate or trust. Tax ez Buying more stock with, Dividends Used to Buy More Stock Defined, Introduction Exempt-interest dividends, Other Distributions Expenses related to, deduction of, Expenses related to dividend income. Tax ez Fees to collect, Fees to Collect Interest and Dividends Foreign income, Reminder Holding period, determination of, Stock dividends. Tax ez Insurance dividends, Dividends on insurance policies. Tax ez Money market funds, Money Market Funds Nominees receiving on behalf of another, Nominees. Tax ez Nondividend distributions, Nondividend Distributions Ordinary dividends, Ordinary Dividends Patronage dividends, Patronage dividends. Tax ez Qualified, Qualified Dividends, Qualified dividends. Tax ez Real estate investment trusts (REITs) paying, Capital Gain Distributions Redemption treated as, Dividend versus sale or trade. Tax ez Reinvestment plans, Dividends Used to Buy More Stock Reporting of, How To Report Dividend Income As interest, Introduction Scrip dividends, Scrip dividends. Tax ez Sold stock, Dividends on stock sold. Tax ez Stockholder debts when canceled as, Stockholder debt. Tax ez Veterans' insurance, Dividends on veterans' insurance. Tax ez Divorced parents, Children of divorced or separated parents (or parents who live apart). Tax ez , Applying this special rule to divorced or separated parents (or parents who live apart). Tax ez Divorced taxpayers, Alimony. Tax ez (see also Alimony) Child and dependent care credit, Child of divorced or separated parents or parents living apart. Tax ez Child custody, Custodial parent and noncustodial parent. Tax ez Definition of divorce instrument for purposes of alimony, Divorce or separation instrument. Tax ez Estimated tax payments, Divorced Taxpayers Filing status, Divorced persons. Tax ez , Divorced persons. Tax ez IRAs, Kay Bailey Hutchison Spousal IRA. Tax ez , Transfers Incident to Divorce Medical and dental expenses of children of, Child of divorced or separated parents. Tax ez Mortgage interest, payment as alimony, Divorced or separated individuals. Tax ez Personal exemption, Divorced or separated spouse. Tax ez Real estate taxes, allocation of, Divorced individuals. Tax ez Transfers between spouses, Property Transferred From a Spouse, Transfers Between Spouses Use of home after divorce, Use of home after divorce. Tax ez Doctors' bills (see Medical and dental expenses) Documentary evidence Recordkeeping requirements, Documentary evidence. Tax ez Domestic help Withholding, Household workers. Tax ez Domestic help, no exemption for, Housekeepers, maids, or servants. Tax ez