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Turbo Tax 1040x

Taxslayer Login1040ez Instruction BookletState Tax Forms 20132011 Tax Forms 1040ezFile 2011 Tax Return LateEz 1040 Form1040x Amended2013 Form 1040ez1040 Form2012 Income Tax FormsE File Federal State Taxes FreeTaxCan I File 1040x ElectronicallyTax Preparation For Military1040x Online FreeFree Federal And Free State Tax FilingFile Free Federal And State Taxes OnlineState Tax Forms OnlineFiling Taxes When UnemployedHow To File Late Tax ReturnsCan I File My 1040x OnlineH&r Block Free 1040ezUs Tax Forms 20121040ez Turbotax FreeFiling Amended Tax ReturnTaxslayer 2011 Tax ReturnFile Federal Taxes FreeState Income Tax Filing FreeFree FileFile Taxes For 2012 Free1040ez 2012 FormFederal Income Tax AmendmentIrs For 1040xFile 1040 XIrs 1040ezFile 1040nr Ez OnlineHelp Filing An Amended Tax ReturnIrs Form 1040ez Tax TablesH R BlockFree Tax Filing 2014

Turbo Tax 1040x

Turbo tax 1040x Index A Assistance (see Help) C Casualty and theft losses, Casualty and Theft Losses Clean-up costs, Demolition and Clean-up Costs Copy of tax return, request for, Request for copy of tax return. Turbo tax 1040x Credits: Employee retention, Employee Retention Credit D Demolition costs, Demolition and Clean-up Costs Depreciation: Qualified recovery assistance property, Qualified recovery assistance property. Turbo tax 1040x Special allowance, Special Depreciation Allowance Disaster area: May 4, 2007 storms and tornadoes, Kansas Disaster Area Distributions: Home purchase or construction, Repayment of Qualified Distributions for the Purchase or Construction of a Main Home Qualified recovery assistance, Qualified recovery assistance distribution. Turbo tax 1040x Repayment of, Repayment of Qualified Recovery Assistance Distributions Taxation of, Taxation of Qualified Recovery Assistance Distributions E Eligible retirement plan, Eligible retirement plan. Turbo tax 1040x Employee retention credit, Employee Retention Credit F Free tax services, How To Get Tax Help H Help: How to get, How To Get Tax Help Phone number, How To Get Tax Help Special IRS assistance, How To Get Tax Help Website, How To Get Tax Help I Involuntary conversion (see Replacement period for nonrecognition of gain) IRAs and other retirement plans, IRAs and Other Retirement Plans K Kansas disaster area, Kansas Disaster Area M More information (see Tax help) N Net operating losses, Net Operating Losses P Publications (see Tax help) Q Qualified recovery assistance distribution, Qualified recovery assistance distribution. Turbo tax 1040x Qualified recovery assistance loss, Qualified recovery assistance loss. Turbo tax 1040x R Replacement period for nonrecognition of gain, Replacement Period for Nonrecognition of Gain Retirement plan, eligible, Eligible retirement plan. Turbo tax 1040x Retirement plans, IRAs and Other Retirement Plans S Section 179 deduction, Increased Section 179 Deduction Storms and tornadoes, Storms and Tornadoes T Tax help, How To Get Tax Help (see Help) Tax return: Request for copy, Request for copy of tax return. Turbo tax 1040x Request for transcript, Request for transcript of tax return. Turbo tax 1040x Taxpayer Advocate, Contacting your Taxpayer Advocate. Turbo tax 1040x Theft losses, Casualty and Theft Losses Transcript of tax return, request for, Request for transcript of tax return. Turbo tax 1040x TTY/TDD information, How To Get Tax Help Prev  Up     Home   More Online Publications
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Information Reporting Program Advisory Committee (IRPAC) Open Season

The Internal Revenue Service (IRS) is requesting nominations for membership in the Information Reporting Program Advisory Committee (IRPAC) for a three-year term beginning in January 2015. 

About IRPAC:

IRPAC advises the IRS on information reporting and administration issues of mutual concern to the private sector and the federal government. The committee works with the IRS Commissioner and other IRS leadership to provide recommendations on a wide range of information reporting administration issues. Membership is balanced to include representation from industries including insurance, banking, the tax professional community, small and large businesses, colleges and universities, state tax administrations, software, foreign financial institutions and the payroll industry. Federally-registered lobbyists cannot be members of the IRPAC.

IRPAC members meet in Washington, DC, approximately five times a year for two-day sessions. Members are not paid for their services. However, travel expenses for working sessions, public meetings and orientation sessions, such as airfare, per diem, and transportation are reimbursed within prescribed federal travel limitations.

Learn more about IRPAC:

How to Apply:

Nominations of qualified individuals may come from individuals or organizations. Nominations for the six current vacancies should describe and document the proposed member’s qualifications for IRPAC membership, including the applicant’s past or current affiliations and dealings with the particular tax segment or segments of the community that he or she wishes to represent on the committee. IRPAC will be comprised of 21 members. It is important that the IRPAC continue to represent a diverse taxpayer and stakeholder base. Accordingly, to maintain membership diversity, selection is based on applicant’s qualifications as well as the segment or group he/she represents. In addition, FBI and practitioner (if applicable) checks are required of all applicants. Applicants cannot be federally-registered lobbyists.

Applicants must complete the following:

Written nominations must be received on or before May 30, 2014. Nominations should be sent to:

Ms. Caryl Grant
National Public Liaison
CL:NPL:SRM
Room 7559 IR
1111 Constitution Avenue, NW
Washington, DC 20224
Attn: IRPAC Nominations

Or may be submitted via fax to 202-317-6553. For additional information, please e-mail publicliaison@irs.gov.

 

Page Last Reviewed or Updated: 28-Mar-2014

The Turbo Tax 1040x

Turbo tax 1040x 13. Turbo tax 1040x   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. Turbo tax 1040x It is divided into the following sections. Turbo tax 1040x Cost basis. Turbo tax 1040x Adjusted basis. Turbo tax 1040x Basis other than cost. Turbo tax 1040x Your basis is the amount of your investment in property for tax purposes. Turbo tax 1040x Use the basis to figure gain or loss on the sale, exchange, or other disposition of property. Turbo tax 1040x Also use it to figure deductions for depreciation, amortization, depletion, and casualty losses. Turbo tax 1040x If you use property for both business or investment purposes and for personal purposes, you must allocate the basis based on the use. Turbo tax 1040x Only the basis allocated to the business or investment use of the property can be depreciated. Turbo tax 1040x Your original basis in property is adjusted (increased or decreased) by certain events. Turbo tax 1040x For example, if you make improvements to the property, increase your basis. Turbo tax 1040x If you take deductions for depreciation or casualty losses, or claim certain credits, reduce your basis. Turbo tax 1040x Keep accurate records of all items that affect the basis of your property. Turbo tax 1040x For more information on keeping records, see chapter 1. Turbo tax 1040x 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. Turbo tax 1040x The cost is the amount you pay in cash, debt obligations, other property, or services. Turbo tax 1040x 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). Turbo tax 1040x In addition, the basis of real estate and business assets may include other items. Turbo tax 1040x Loans with low or no interest. Turbo tax 1040x    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. Turbo tax 1040x You generally have unstated interest if your interest rate is less than the applicable federal rate. Turbo tax 1040x   For more information, see Unstated Interest and Original Issue Discount (OID) in Publication 537. Turbo tax 1040x Real Property Real property, also called real estate, is land and generally anything built on, growing on, or attached to land. Turbo tax 1040x If you buy real property, certain fees and other expenses you pay are part of your cost basis in the property. Turbo tax 1040x Lump sum purchase. Turbo tax 1040x   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. Turbo tax 1040x Allocate the cost basis according to the respective fair market values (FMVs) of the land and buildings at the time of purchase. Turbo tax 1040x Figure the basis of each asset by multiplying the lump sum by a fraction. Turbo tax 1040x The numerator is the FMV of that asset and the denominator is the FMV of the whole property at the time of purchase. Turbo tax 1040x    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. Turbo tax 1040x Fair market value (FMV). Turbo tax 1040x   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. Turbo tax 1040x Sales of similar property on or about the same date may be helpful in figuring the FMV of the property. Turbo tax 1040x Assumption of mortgage. Turbo tax 1040x   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. Turbo tax 1040x Settlement costs. Turbo tax 1040x   Your basis includes the settlement fees and closing costs you paid for buying the property. Turbo tax 1040x (A fee for buying property is a cost that must be paid even if you buy the property for cash. Turbo tax 1040x ) Do not include fees and costs for getting a loan on the property in your basis. Turbo tax 1040x   The following are some of the settlement fees or closing costs you can include in the basis of your property. Turbo tax 1040x Abstract fees (abstract of title fees). Turbo tax 1040x Charges for installing utility services. Turbo tax 1040x Legal fees (including fees for the title search and preparation of the sales contract and deed). Turbo tax 1040x Recording fees. Turbo tax 1040x Survey fees. Turbo tax 1040x Transfer taxes. Turbo tax 1040x Owner's title insurance. Turbo tax 1040x 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. Turbo tax 1040x   Settlement costs do not include amounts placed in escrow for the future payment of items such as taxes and insurance. Turbo tax 1040x   The following are some of the settlement fees and closing costs you cannot include in the basis of property. Turbo tax 1040x Casualty insurance premiums. Turbo tax 1040x Rent for occupancy of the property before closing. Turbo tax 1040x Charges for utilities or other services related to occupancy of the property before closing. Turbo tax 1040x 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. Turbo tax 1040x Fees for refinancing a mortgage. Turbo tax 1040x Real estate taxes. Turbo tax 1040x   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. Turbo tax 1040x You cannot deduct them as an expense. Turbo tax 1040x    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. Turbo tax 1040x Do not include that amount in the basis of your property. Turbo tax 1040x If you did not reimburse the seller, you must reduce your basis by the amount of those taxes. Turbo tax 1040x Points. Turbo tax 1040x   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. Turbo tax 1040x Generally, you deduct the points over the term of the loan. Turbo tax 1040x For more information on how to deduct points, see chapter 23. Turbo tax 1040x Points on home mortgage. Turbo tax 1040x   Special rules may apply to points you and the seller pay when you get a mortgage to buy your main home. Turbo tax 1040x If certain requirements are met, you can deduct the points in full for the year in which they are paid. Turbo tax 1040x Reduce the basis of your home by any seller-paid points. Turbo tax 1040x 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. Turbo tax 1040x The result is the adjusted basis. Turbo tax 1040x Increases to Basis Increase the basis of any property by all items properly added to a capital account. Turbo tax 1040x Examples of items that increase basis are shown in Table 13-1. Turbo tax 1040x These include the items discussed below. Turbo tax 1040x Improvements. Turbo tax 1040x   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. Turbo tax 1040x 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. Turbo tax 1040x Assessments for local improvements. Turbo tax 1040x   Add to the basis of property assessments for improvements such as streets and sidewalks if they increase the value of the property assessed. Turbo tax 1040x Do not deduct them as taxes. Turbo tax 1040x However, you can deduct as taxes assessments for maintenance or repairs, or for meeting interest charges related to the improvements. Turbo tax 1040x Example. Turbo tax 1040x 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. Turbo tax 1040x Add the assessment to your property's basis. Turbo tax 1040x In this example, the assessment is a depreciable asset. Turbo tax 1040x 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. Turbo tax 1040x Examples of items that decrease basis are shown in Table 13-1. Turbo tax 1040x These include the items discussed below. Turbo tax 1040x Table 13-1. Turbo tax 1040x 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. Turbo tax 1040x   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. Turbo tax 1040x    You must increase your basis in the property by the amount you spend on repairs that restore the property to its pre-casualty condition. Turbo tax 1040x   For more information on casualty and theft losses, see chapter 25. Turbo tax 1040x Depreciation and section 179 deduction. Turbo tax 1040x   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. Turbo tax 1040x   For more information about depreciation and the section 179 deduction, see Publication 946 and the Instructions for Form 4562. Turbo tax 1040x Example. Turbo tax 1040x 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. Turbo tax 1040x You added an improvement to the duplex that cost $10,000. Turbo tax 1040x In February last year, the duplex was damaged by fire. Turbo tax 1040x Up to that time, you had been allowed depreciation of $23,000. Turbo tax 1040x You sold some salvaged material for $1,300 and collected $19,700 from your insurance company. Turbo tax 1040x You deducted a casualty loss of $1,000 on your income tax return for last year. Turbo tax 1040x You spent $19,000 of the insurance proceeds for restoration of the duplex, which was completed this year. Turbo tax 1040x You must use the duplex's adjusted basis after the restoration to determine depreciation for the rest of the property's recovery period. Turbo tax 1040x 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. Turbo tax 1040x Your basis in the land is its original cost of $5,000. Turbo tax 1040x Easements. Turbo tax 1040x   The amount you receive for granting an easement is generally considered to be proceeds from the sale of an interest in real property. Turbo tax 1040x It reduces the basis of the affected part of the property. Turbo tax 1040x 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. Turbo tax 1040x   If the gain is on a capital asset, see chapter 16 for information about how to report it. Turbo tax 1040x If the gain is on property used in a trade or business, see Publication 544 for information about how to report it. Turbo tax 1040x Exclusion of subsidies for energy conservation measures. Turbo tax 1040x   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. Turbo tax 1040x Reduce the basis of the property for which you received the subsidy by the excluded amount. Turbo tax 1040x For more information about this subsidy, see chapter 12. Turbo tax 1040x Postponed gain from sale of home. Turbo tax 1040x    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. Turbo tax 1040x For more information on the rules for the sale of a home, see chapter 15. Turbo tax 1040x Basis Other Than Cost There are many times when you cannot use cost as basis. Turbo tax 1040x In these cases, the fair market value or the adjusted basis of the property can be used. Turbo tax 1040x Fair market value (FMV) and adjusted basis were discussed earlier. Turbo tax 1040x Property Received for Services If you receive property for your services, include the FMV of the property in income. Turbo tax 1040x The amount you include in income becomes your basis. Turbo tax 1040x 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. Turbo tax 1040x Restricted property. Turbo tax 1040x   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. Turbo tax 1040x 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. Turbo tax 1040x 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). Turbo tax 1040x For more information, see Restricted Property in Publication 525. Turbo tax 1040x Bargain purchases. Turbo tax 1040x   A bargain purchase is a purchase of an item for less than its FMV. Turbo tax 1040x 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. Turbo tax 1040x Your basis in the property is its FMV (your purchase price plus the amount you include in income). Turbo tax 1040x   If the difference between your purchase price and the FMV is a qualified employee discount, do not include the difference in income. Turbo tax 1040x However, your basis in the property is still its FMV. Turbo tax 1040x See Employee Discounts in Publication 15-B. Turbo tax 1040x Taxable Exchanges A taxable exchange is one in which the gain is taxable or the loss is deductible. Turbo tax 1040x A taxable gain or deductible loss also is known as a recognized gain or loss. Turbo tax 1040x 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. Turbo tax 1040x 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. Turbo tax 1040x Similar or related property. Turbo tax 1040x   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. Turbo tax 1040x Decrease the basis by the following. Turbo tax 1040x Any loss you recognize on the involuntary conversion. Turbo tax 1040x Any money you receive that you do not spend on similar property. Turbo tax 1040x Increase the basis by the following. Turbo tax 1040x Any gain you recognize on the involuntary conversion. Turbo tax 1040x Any cost of acquiring the replacement property. Turbo tax 1040x Money or property not similar or related. Turbo tax 1040x    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. Turbo tax 1040x Example. Turbo tax 1040x The state condemned your property. Turbo tax 1040x The adjusted basis of the property was $26,000 and the state paid you $31,000 for it. Turbo tax 1040x You realized a gain of $5,000 ($31,000 − $26,000). Turbo tax 1040x You bought replacement property similar in use to the converted property for $29,000. Turbo tax 1040x You recognize a gain of $2,000 ($31,000 − $29,000), the unspent part of the payment from the state. Turbo tax 1040x Your unrecognized gain is $3,000, the difference between the $5,000 realized gain and the $2,000 recognized gain. Turbo tax 1040x 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. Turbo tax 1040x   If you buy more than one piece of replacement property, allocate your basis among the properties based on their respective costs. Turbo tax 1040x Basis for depreciation. Turbo tax 1040x   Special rules apply in determining and depreciating the basis of MACRS property acquired in an involuntary conversion. Turbo tax 1040x For information, see What Is the Basis of Your Depreciable Property? in chapter 1 of Publication 946. Turbo tax 1040x Nontaxable Exchanges A nontaxable exchange is an exchange in which you are not taxed on any gain and you cannot deduct any loss. Turbo tax 1040x If you receive property in a nontaxable exchange, its basis is generally the same as the basis of the property you transferred. Turbo tax 1040x See Nontaxable Trades in chapter 14. Turbo tax 1040x Like-Kind Exchanges The exchange of property for the same kind of property is the most common type of nontaxable exchange. Turbo tax 1040x To qualify as a like-kind exchange, the property traded and the property received must be both of the following. Turbo tax 1040x Qualifying property. Turbo tax 1040x Like-kind property. Turbo tax 1040x The basis of the property you receive is generally the same as the adjusted basis of the property you gave up. Turbo tax 1040x 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. Turbo tax 1040x Qualifying property. Turbo tax 1040x   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. Turbo tax 1040x Like-kind property. Turbo tax 1040x   There must be an exchange of like-kind property. Turbo tax 1040x Like-kind properties are properties of the same nature or character, even if they differ in grade or quality. Turbo tax 1040x The exchange of real estate for real estate and personal property for similar personal property are exchanges of like-kind property. Turbo tax 1040x Example. Turbo tax 1040x You trade in an old truck used in your business with an adjusted basis of $1,700 for a new one costing $6,800. Turbo tax 1040x The dealer allows you $2,000 on the old truck, and you pay $4,800. Turbo tax 1040x This is a like-kind exchange. Turbo tax 1040x 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). Turbo tax 1040x 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). Turbo tax 1040x The basis of the new truck is the price you pay the dealer. Turbo tax 1040x Partially nontaxable exchanges. Turbo tax 1040x   A partially nontaxable exchange is an exchange in which you receive unlike property or money in addition to like-kind property. Turbo tax 1040x The basis of the property you receive is the same as the adjusted basis of the property you gave up, with the following adjustments. Turbo tax 1040x Decrease the basis by the following amounts. Turbo tax 1040x Any money you receive. Turbo tax 1040x Any loss you recognize on the exchange. Turbo tax 1040x Increase the basis by the following amounts. Turbo tax 1040x Any additional costs you incur. Turbo tax 1040x Any gain you recognize on the exchange. Turbo tax 1040x If the other party to the exchange assumes your liabilities, treat the debt assumption as money you received in the exchange. Turbo tax 1040x Allocation of basis. Turbo tax 1040x   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. Turbo tax 1040x The rest is the basis of the like-kind property. Turbo tax 1040x More information. Turbo tax 1040x   See Like-Kind Exchanges in chapter 1 of Publication 544 for more information. Turbo tax 1040x Basis for depreciation. Turbo tax 1040x   Special rules apply in determining and depreciating the basis of MACRS property acquired in a like-kind exchange. Turbo tax 1040x For information, see What Is the Basis of Your Depreciable Property? in chapter 1 of Publication 946. Turbo tax 1040x 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. Turbo tax 1040x The same rule applies to a transfer by your former spouse that is incident to divorce. Turbo tax 1040x 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. Turbo tax 1040x If the property transferred to you is a series E, series EE, or series I U. Turbo tax 1040x S. Turbo tax 1040x savings bond, the transferor must include in income the interest accrued to the date of transfer. Turbo tax 1040x 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. Turbo tax 1040x For more information on these bonds, see chapter 7. Turbo tax 1040x 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. Turbo tax 1040x For more information about the transfer of property from a spouse, see chapter 14. Turbo tax 1040x 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. Turbo tax 1040x FMV less than donor's adjusted basis. Turbo tax 1040x   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. Turbo tax 1040x 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. Turbo tax 1040x 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. Turbo tax 1040x See Adjusted Basis , earlier. Turbo tax 1040x Example. Turbo tax 1040x You received an acre of land as a gift. Turbo tax 1040x At the time of the gift, the land had an FMV of $8,000. Turbo tax 1040x The donor's adjusted basis was $10,000. Turbo tax 1040x After you received the property, no events occurred to increase or decrease your basis. Turbo tax 1040x 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. Turbo tax 1040x 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. Turbo tax 1040x If the sales price is between $8,000 and $10,000, you have neither gain nor loss. Turbo tax 1040x Business property. Turbo tax 1040x   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. Turbo tax 1040x FMV equal to or greater than donor's adjusted basis. Turbo tax 1040x   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. Turbo tax 1040x Increase your basis by all or part of any gift tax paid, depending on the date of the gift, explained later. Turbo tax 1040x   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. Turbo tax 1040x See Adjusted Basis , earlier. Turbo tax 1040x   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. Turbo tax 1040x Figure the increase by multiplying the gift tax paid by a fraction. Turbo tax 1040x The numerator of the fraction is the net increase in value of the gift and the denominator is the amount of the gift. Turbo tax 1040x   The net increase in value of the gift is the FMV of the gift minus the donor's adjusted basis. Turbo tax 1040x 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. Turbo tax 1040x Example. Turbo tax 1040x In 2013, you received a gift of property from your mother that had an FMV of $50,000. Turbo tax 1040x Her adjusted basis was $20,000. Turbo tax 1040x The amount of the gift for gift tax purposes was $36,000 ($50,000 minus the $14,000 annual exclusion). Turbo tax 1040x She paid a gift tax of $7,320 on the property. Turbo tax 1040x 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) × . Turbo tax 1040x 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. Turbo tax 1040x If you received a gift before 1977, your basis in the gift (the donor's adjusted basis) includes any gift tax paid on it. Turbo tax 1040x However, your basis cannot exceed the FMV of the gift at the time it was given to you. Turbo tax 1040x 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. Turbo tax 1040x The FMV on the alternate valuation date if the personal representative for the estate elects to use alternate valuation. Turbo tax 1040x 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. Turbo tax 1040x 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. Turbo tax 1040x 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. Turbo tax 1040x For more information, see the instructions to Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return. Turbo tax 1040x Property inherited from a decedent who died in 2010. Turbo tax 1040x   If you inherited property from a decedent who died in 2010, special rules may apply. Turbo tax 1040x For more information, see Publication 4895, Tax Treatment of Property Acquired From a Decedent Dying in 2010. Turbo tax 1040x Community property. Turbo tax 1040x   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. Turbo tax 1040x 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. Turbo tax 1040x 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. Turbo tax 1040x Example. Turbo tax 1040x You and your spouse owned community property that had a basis of $80,000. Turbo tax 1040x When your spouse died, half the FMV of the community interest was includible in your spouse's estate. Turbo tax 1040x The FMV of the community interest was $100,000. Turbo tax 1040x The basis of your half of the property after the death of your spouse is $50,000 (half of the $100,000 FMV). Turbo tax 1040x The basis of the other half to your spouse's heirs is also $50,000. Turbo tax 1040x For more information about community property, see Publication 555, Community Property. Turbo tax 1040x 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. Turbo tax 1040x To do so, you must figure its basis for depreciation at the time of the change. Turbo tax 1040x An example of changing property held for personal use to business or rental use would be renting out your former personal residence. Turbo tax 1040x Basis for depreciation. Turbo tax 1040x   The basis for depreciation is the lesser of the following amounts. Turbo tax 1040x The FMV of the property on the date of the change. Turbo tax 1040x Your adjusted basis on the date of the change. Turbo tax 1040x Example. Turbo tax 1040x Several years ago, you paid $160,000 to have your house built on a lot that cost $25,000. Turbo tax 1040x 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. Turbo tax 1040x Because land is not depreciable, you include only the cost of the house when figuring the basis for depreciation. Turbo tax 1040x Your adjusted basis in the house when you changed its use was $178,000 ($160,000 + $20,000 − $2,000). Turbo tax 1040x 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. Turbo tax 1040x 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). Turbo tax 1040x Sale of property. Turbo tax 1040x   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. Turbo tax 1040x Gain. Turbo tax 1040x   The basis for figuring a gain is your adjusted basis in the property when you sell the property. Turbo tax 1040x Example. Turbo tax 1040x 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. Turbo tax 1040x Your adjusted basis for figuring gain is $165,500 ($178,000 + $25,000 (land) − $37,500). Turbo tax 1040x Loss. Turbo tax 1040x   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. Turbo tax 1040x Then make adjustments (increases and decreases) for the period after the change in the property's use, as discussed earlier under Adjusted Basis . Turbo tax 1040x Example. Turbo tax 1040x 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. Turbo tax 1040x 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. Turbo tax 1040x Reduce that amount ($180,000) by the depreciation deductions ($37,500). Turbo tax 1040x The basis for loss is $142,500 ($180,000 − $37,500). Turbo tax 1040x 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. Turbo tax 1040x 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. Turbo tax 1040x You must adjust the basis of stocks for certain events that occur after purchase. Turbo tax 1040x 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. Turbo tax 1040x This rule applies only when the additional stock received is identical to the stock held. Turbo tax 1040x Also reduce your basis when you receive nontaxable distributions. Turbo tax 1040x They are a return of capital. Turbo tax 1040x Example. Turbo tax 1040x In 2011 you bought 100 shares of XYZ stock for $1,000 or $10 a share. Turbo tax 1040x In 2012 you bought 100 shares of XYZ stock for $1,600 or $16 a share. Turbo tax 1040x In 2013 XYZ declared a 2-for-1 stock split. Turbo tax 1040x You now have 200 shares of stock with a basis of $5 a share and 200 shares with a basis of $8 a share. Turbo tax 1040x Other basis. Turbo tax 1040x   There are other ways to figure the basis of stocks or bonds depending on how you acquired them. Turbo tax 1040x For detailed information, see Stocks and Bonds under Basis of Investment Property in chapter 4 of Publication 550. Turbo tax 1040x Identifying stocks or bonds sold. Turbo tax 1040x   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. Turbo tax 1040x 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. Turbo tax 1040x For more information about identifying securities you sell, see Stocks and Bonds under Basis of Investment Property in chapter 4 of Publication 550. Turbo tax 1040x Mutual fund shares. Turbo tax 1040x   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. Turbo tax 1040x For more information, see Publication 550. Turbo tax 1040x Bond premium. Turbo tax 1040x   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. Turbo tax 1040x See Bond Premium Amortization in chapter 3 of Publication 550 for more information. Turbo tax 1040x 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. Turbo tax 1040x Original issue discount (OID) on debt instruments. Turbo tax 1040x   You must increase your basis in an OID debt instrument by the OID you include in income for that instrument. Turbo tax 1040x See Original Issue Discount (OID) in chapter 7 and Publication 1212, Guide To Original Issue Discount (OID) Instruments. Turbo tax 1040x Tax-exempt obligations. Turbo tax 1040x    OID on tax-exempt obligations is generally not taxable. Turbo tax 1040x 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. Turbo tax 1040x The accrued OID is added to the basis of the obligation to determine your gain or loss. Turbo tax 1040x See chapter 4 of Publication 550. Turbo tax 1040x Prev  Up  Next   Home   More Online Publications