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Unemployment Tax Forms

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Unemployment Tax Forms

Unemployment tax forms Publication 908 - Main Content Table of Contents Bankruptcy Code Tax Compliance RequirementsTax Returns Due for Periods Ending Before the Bankruptcy Filing in Chapter 13 Cases Tax Returns Due After the Bankruptcy Filing Individuals in Chapter 12 or 13 Individuals in Chapter 7 or 11Debtor's Election To End Tax Year – Form 1040 Taxes and the Bankruptcy Estate Bankruptcy Estate – Income, Deductions, and Credits Tax Reporting – Chapter 11 Cases Bankruptcy Estate Tax Return Filing Requirements and Payment of Tax Due Tax Return Example – Form 1041 Partnerships and CorporationsFiling Requirements Partnerships Corporations Receiverships Determination of TaxPrompt Determination Requests Court Jurisdiction Over Tax MattersBankruptcy Court Tax Court Federal Tax ClaimsUnsecured Tax Claims Discharge of Unpaid Tax Debt CancellationExclusions Reduction of Tax Attributes Partnerships Corporations Tax Attribute Reduction Example How To Get Tax HelpTaxpayer Advocacy Panel (TAP). Unemployment tax forms Low Income Taxpayer Clinics (LITCs). Unemployment tax forms Bankruptcy Code Tax Compliance Requirements Tax Returns Due for Periods Ending Before the Bankruptcy Filing in Chapter 13 Cases The Bankruptcy Code requires chapter 13 debtors to file all required tax returns for tax periods ending within 4 years of the debtor's bankruptcy filing. Unemployment tax forms All such federal tax returns must be filed with the IRS before the date first set for the first meeting of creditors. Unemployment tax forms The debtor may request the trustee to hold the meeting open for an additional 120 days to enable the debtor to file the returns (or until the day the returns are due under an automatic IRS extension, if later). Unemployment tax forms After notice and hearing, the bankruptcy court may extend the period for another 30 days. Unemployment tax forms Failure to timely file the returns can prevent confirmation of a chapter 13 plan and result in either dismissal of the chapter 13 case or conversion to a chapter 7 case. Unemployment tax forms Note. Unemployment tax forms Individual debtors should use their home address when filing Form 1040 with the IRS. Unemployment tax forms Returns should not be filed “in care of” the trustee's address. Unemployment tax forms Ordering tax transcripts and copies of returns. Unemployment tax forms   Trustees may require the debtor to submit copies or transcripts of the debtor's returns as proof of filing. Unemployment tax forms The debtor can request free transcripts of the debtor's income tax returns by filing Form 4506-T, Request for Transcript of Tax Return, with the IRS or by placing a request on the IRS's free Automated Delivery Service (ADS), available by calling 1-800-829-1040. Unemployment tax forms If requested through ADS, the transcript will be mailed to the debtor's most current address according to the IRS's records. Unemployment tax forms Transcripts requested using Form 4506-T may be mailed to any address, including to the attention of the trustee in the debtor's bankruptcy case. Unemployment tax forms Transcripts are normally mailed within 10 to 15 days of receipt of the request by the IRS. Unemployment tax forms A transcript contains most of the information on the debtor's filed return, but it is not a copy of the return. Unemployment tax forms To request a copy of the debtor's filed return, file Form 4506, Request for Copy of Tax Return. Unemployment tax forms It may take up to 60 days for the IRS to provide the copies after receipt of the debtor's request, and there is a fee of $57. Unemployment tax forms 00 per tax return for copies of the returns. Unemployment tax forms Tax Returns Due After the Bankruptcy Filing For debtors filing bankruptcy under all chapters (chapters 7, 11, 12, or 13), the Bankruptcy Code provides that if the debtor does not file a tax return that becomes due after the commencement of the bankruptcy case, or obtain an extension for filing the return before the due date, the taxing authority may request that the bankruptcy court either dismiss the case or convert the case to a case under another chapter of the Bankruptcy Code. Unemployment tax forms If the debtor does not file the required return or obtain an extension within 90 days after the request is made, the bankruptcy court must dismiss or convert the case. Unemployment tax forms Tax returns and payment of taxes in chapter 11 cases. Unemployment tax forms   The Bankruptcy Code provides that a chapter 11 debtor's failure to timely file tax returns and pay taxes owed after the date of the “order for relief” (the bankruptcy petition date in voluntary cases) is cause for dismissal of the chapter 11 case, conversion to a chapter 7 case, or appointment of a chapter 11 trustee. Unemployment tax forms Disclosure of debtor's return information to trustee. Unemployment tax forms   In bankruptcy cases filed under chapter 7 or 11 by individuals, the debtor's income tax returns for the year the bankruptcy case begins and for earlier years are, upon written request, open to inspection by or disclosure to the trustee. Unemployment tax forms If the bankruptcy case was not voluntary, disclosure cannot be made before the bankruptcy court has entered an order for relief, unless the court rules that the disclosure is needed for determining whether relief should be ordered. Unemployment tax forms    In bankruptcy cases other than those of individuals filing under chapter 7 or 11, the debtor's income tax returns for the current and prior years are, upon written request, open to inspection by or disclosure to the trustee, but only if the IRS finds that the trustee has a material interest that will be affected by information on the return. Unemployment tax forms Material interest is generally defined as a financial or monetary interest. Unemployment tax forms Material interest is not limited to the trustee's responsibility to file a return on behalf of the bankruptcy estate. Unemployment tax forms   However, the U. Unemployment tax forms S. Unemployment tax forms Trustee (an officer of the Department of Justice, responsible for maintaining and supervising a panel of private trustees for chapter 7 bankruptcy cases) and the standing chapter 13 trustee (the administrator of chapter 13 cases in a specific geographic region) generally do not have a material interest in the debtor’s return or return information. Unemployment tax forms Disclosure of bankruptcy estate's return information to debtor. Unemployment tax forms    The bankruptcy estate's tax return(s) are open, upon written request, to inspection by or disclosure to the individual debtor in a chapter 7 or 11 bankruptcy. Unemployment tax forms Disclosure of the estate's return to the debtor may be necessary to enable the debtor to determine the amount and nature of the tax attributes, if any, that the debtor assumes when the bankruptcy estate terminates. Unemployment tax forms Individuals in Chapter 12 or 13 Only individuals may file a chapter 13 bankruptcy. Unemployment tax forms Chapter 13 relief is not available to corporations or partnerships. Unemployment tax forms The bankruptcy estate is not treated as a separate entity for tax purposes when an individual files a petition under chapter 12 (Adjustment of Debts of a Family Farmer or Fisherman with Regular Annual Income) or 13 (Adjustment of Debts of an Individual with Regular Income) of the Bankruptcy Code. Unemployment tax forms In these cases the individual continues to file the same federal income tax returns that were filed prior to the bankruptcy petition, Form 1040, U. Unemployment tax forms S. Unemployment tax forms Individual Income Tax Return. Unemployment tax forms On the debtor's individual tax return, Form 1040, report all income received during the entire year and deduct all allowable expenses. Unemployment tax forms Do not include in income the amount from any debt canceled due to the debtor's bankruptcy. Unemployment tax forms To the extent the debtor has any losses, credits, or basis in property that were previously reduced as a result of canceled debt, these reductions must be included on the debtor's return. Unemployment tax forms See Debt Cancellation, later. Unemployment tax forms Interest on trust accounts in chapter 13 cases. Unemployment tax forms   In chapter 13 proceedings, do not include interest earned on amounts held by the trustee in trust accounts as income on the debtor's return. Unemployment tax forms This interest is not available to either the debtor or creditors, it is available only to the trustee for use by the U. Unemployment tax forms S. Unemployment tax forms Trustee system. Unemployment tax forms The interest is also not taxable to the trustee as income. Unemployment tax forms Individuals in Chapter 7 or 11 When an individual debtor files for bankruptcy under chapter 7 or 11 of the Bankruptcy Code, the bankruptcy estate is treated as a new taxable entity, separate from the individual taxpayer. Unemployment tax forms The bankruptcy estate in a chapter 7 case is represented by a trustee. Unemployment tax forms The trustee is appointed to administer the estate and liquidate any nonexempt assets. Unemployment tax forms In chapter 11 cases, the debtor often remains in control of the assets as a “debtor-in-possession” and acts as the bankruptcy trustee. Unemployment tax forms However, the bankruptcy court, for cause, may appoint a trustee if such appointment is in the best interests of the creditors and the estate. Unemployment tax forms During the chapter 7 or 11 bankruptcy, the debtor continues to file an individual tax return on Form 1040. Unemployment tax forms The bankruptcy trustee files a Form 1041 for the bankruptcy estate. Unemployment tax forms However, when a debtor in a chapter 11 bankruptcy case remains a debtor-in-possession, he or she must file both a Form 1040 individual return and a Form 1041 estate return for the bankruptcy estate (if return filing requirements are met). Unemployment tax forms Although a husband and wife may file a joint bankruptcy petition whose bankruptcy estates are jointly administered, the estates are be treated as two separate entities for tax purposes. Unemployment tax forms Two separate bankruptcy estate income tax returns must be filed (if each spouse separately meets the filing requirements). Unemployment tax forms For information about determining the tax due and paying tax for a chapter 7 or 11 bankruptcy estate, see Bankruptcy Estate Tax Return Filing Requirements and Payment of Tax Due, later. Unemployment tax forms Debtor's Election To End Tax Year – Form 1040 Short tax years. Unemployment tax forms   An individual debtor in a chapter 7 or 11 case may elect to close the debtor's tax year for the year in which the bankruptcy petition is filed, as of the day before the date on which the bankruptcy case commences. Unemployment tax forms If the debtor makes this election, the debtor's tax year is divided into 2 short tax years of less than 12 months each. Unemployment tax forms The first tax year ends on the day before the commencement date and the second tax year begins on the commencement date. Unemployment tax forms   If the election is made, the debtor's federal income tax liability for the first short tax year becomes an allowable claim against the bankruptcy estate arising before the bankruptcy filing. Unemployment tax forms Also, the tax liability for the first short tax year is not subject to discharge under the Bankruptcy Code. Unemployment tax forms    If the debtor does not make an election to end the tax year, the commencement of the bankruptcy case does not affect the debtor's tax year. Unemployment tax forms Also, no part of the debtor's income tax liability for the year in which the bankruptcy case commences can be collected from the bankruptcy estate. Unemployment tax forms Note. Unemployment tax forms The debtor cannot make a short tax year election if no assets, other than exempt property, are in the bankruptcy estate. Unemployment tax forms Making the Election - Filing Requirements First short tax year. Unemployment tax forms   The debtor can elect to end the debtor's tax year by filing a return on Form 1040 for the first short tax year. Unemployment tax forms The return must be filed on or before the 15th day of the fourth full month after the end of that first tax year. Unemployment tax forms Second short tax year. Unemployment tax forms   If the debtor elects to end the tax year on the day before filing the bankruptcy case, the debtor must file the return for the first short tax year in the manner discussed above. Unemployment tax forms   If the debtor makes this election, the debtor must also file a separate Form 1040 for the second short tax year by the regular due date. Unemployment tax forms To avoid delays in processing the return, write “Second Short Year Return After Section 1398 Election” at the top of the return. Unemployment tax forms Example. Unemployment tax forms Jane Doe, an individual calendar year taxpayer, filed a bankruptcy petition under chapter 7 or 11 on May 8, 2012. Unemployment tax forms If Jane elected to close her tax year at the commencement of her case, Jane's first short year for 2012 runs from January 1 through May 7, 2012. Unemployment tax forms Jane's second short year runs from May 8, 2012, through December 31, 2012. Unemployment tax forms To have a timely filed election for the first short year, Jane must file Form 1040 (or an extension of time to file) for the period January 1 through May 7 by September 15. Unemployment tax forms To avoid delays in processing the return, write “Section 1398 Election” at the top of the return. Unemployment tax forms The debtor may also make the election by attaching a statement to Form 4868, Automatic Extension of Time to File an U. Unemployment tax forms S. Unemployment tax forms Individual Tax Return. Unemployment tax forms The statement must state that the debtor elects under IRC section 1398(d)(2) to close the debtor's tax year on the day before filing the bankruptcy case. Unemployment tax forms The debtor must file Form 4868 by the due date of the return for the first short tax year. Unemployment tax forms The debtor's spouse may also elect to close his or her tax year, see Election by debtor's spouse, below. Unemployment tax forms Election by debtor's spouse. Unemployment tax forms   If the debtor is married, the debtor's spouse may join in the election to end the tax year. Unemployment tax forms If the debtor and spouse make a joint election, the debtor must file a joint return for the first short tax year. Unemployment tax forms The debtor must elect by the due date for filing the return for the first short tax year. Unemployment tax forms Once the election is made, it cannot be revoked for the first short tax year. Unemployment tax forms However, the election does not prevent the debtor and the spouse from filing separate returns for the second short tax year. Unemployment tax forms Later bankruptcy of spouse. Unemployment tax forms    If the debtor's spouse files for bankruptcy later in the same year, he or she may also choose to end his or her tax year, regardless of whether he or she joined in the election to end the debtor's tax year. Unemployment tax forms   As each spouse has a separate bankruptcy, one or both of them may have 3 short tax years in the same calendar year. Unemployment tax forms If the debtor's spouse joined the debtor's election or if the debtor had not made the election to end the tax year, the debtor can join in the spouse's election. Unemployment tax forms However, if the debtor made an election and the spouse did not join that election, the debtor cannot then join the spouse's later election. Unemployment tax forms The debtor and the spouse are precluded from this election because they have different tax years. Unemployment tax forms This results because the debtor does not have a tax year ending the day before the spouse's filing for bankruptcy, and the debtor cannot file a joint return for a year ending on the day before the spouse's filing of bankruptcy. Unemployment tax forms Example 1. Unemployment tax forms Paul and Mary Harris are calendar-year taxpayers. Unemployment tax forms Paul's voluntary chapter 7 bankruptcy case begins on March 4. Unemployment tax forms If Paul does not make an election, his tax year does not end on March 3. Unemployment tax forms If he makes an election, Paul's first tax year is January 1–March 3, and his second tax year begins on March 4. Unemployment tax forms Mary could join in Paul's election as long as they file a joint return for the tax year January 1–March 3. Unemployment tax forms They must make the election by July 15, the due date for filing the joint return. Unemployment tax forms Example 2. Unemployment tax forms Fred and Ethel Barnes are calendar-year taxpayers. Unemployment tax forms Fred's voluntary chapter 7 bankruptcy case begins on May 6, and Ethel's bankruptcy case begins on November 1 of the same year. Unemployment tax forms Ethel could elect to end her tax year on October 31. Unemployment tax forms If Fred did not elect to end his tax year on May 5, or if he elected to do so but Ethel had not joined in his election, Ethel would have 2 tax years in the same calendar year if she decided to close her tax year. Unemployment tax forms Her first tax year is January 1–October 31, and her second year is November 1–December 31. Unemployment tax forms If Fred did not end his tax year as of May 5, he could join in Ethel's election to close her tax year on October 31, but only if they file a joint return for the tax year January 1–October 31. Unemployment tax forms If Fred elected to end his tax year on May 5, but Ethel did not join in Fred's election, Fred cannot join in Ethel's election to end her tax year on October 31. Unemployment tax forms Fred and Ethel cannot file a joint return for that short tax year because their tax years preceding October 31 were not the same. Unemployment tax forms Example 3. Unemployment tax forms Jack and Karen Thomas are calendar-year taxpayers. Unemployment tax forms Karen's voluntary chapter 7 bankruptcy case began on April 10, and Jack's voluntary chapter 7 bankruptcy case began on October 3 of the same year. Unemployment tax forms Karen elected to close her tax year on April 9 and Jack joins in Karen's election. Unemployment tax forms Under these facts, Jack would have 3 tax years for the same calendar year if he makes the election relating to his own bankruptcy case. Unemployment tax forms The first tax year would be January 1–April 9; the second, April 10–October 2; and the third, October 3–December 31. Unemployment tax forms Karen may join in Jack's election if they file a joint return for the second short tax year (April 10–October 2). Unemployment tax forms If Karen does join in, she would have the same 3 short tax years as Jack. Unemployment tax forms Also, if Karen joins in Jack's election, they may file a joint return for the third tax year (October 3–December 31), but they are not required to do so. Unemployment tax forms Annualizing taxable income. Unemployment tax forms   If the debtor elects to close the tax year, the debtor must annualize taxable income for each short tax year in the same manner a change in annual accounting period is calculated. Unemployment tax forms See Short Tax Year in Publication 538, for information on how to annualize the debtor's income and to figure the tax for the short tax year. Unemployment tax forms Dismissal of bankruptcy case. Unemployment tax forms   If the bankruptcy court later dismisses an individual chapter 7 or 11 case, the bankruptcy estate is no longer treated as a separate taxable entity. Unemployment tax forms It is as if no bankruptcy estate was created for tax purposes. Unemployment tax forms In this situation, the debtor must file amended tax returns on Form 1040X, to replace all full or short year individual returns (Form 1040) and bankruptcy estate returns (Form 1041) filed as a result of the bankruptcy case. Unemployment tax forms Income, deductions, and credits previously reported by the bankruptcy estate must be reported on the debtor's amended returns. Unemployment tax forms Attach a statement to the amended returns explaining why the debtor is filing an amended return. Unemployment tax forms Taxes and the Bankruptcy Estate Property of the bankruptcy estate. Unemployment tax forms   At the commencement of a bankruptcy case a bankruptcy estate is created. Unemployment tax forms Bankruptcy law determines which of the debtor's assets become part of a bankruptcy estate. Unemployment tax forms This estate generally includes all of the debtor's legal and equitable interests in property as of the commencement date. Unemployment tax forms However, there are exceptions and certain property is exempted or excluded from the bankruptcy estate. Unemployment tax forms Note. Unemployment tax forms Exempt property and abandoned property are initially part of the bankruptcy estate, but are subsequently removed from the estate. Unemployment tax forms Excluded property is never included in the estate. Unemployment tax forms Transfer of assets between debtor and bankruptcy estate. Unemployment tax forms   The transfer (other than by sale or exchange) of an asset from the debtor to the bankruptcy estate is not treated as a disposition for income tax purposes. Unemployment tax forms The transfer does not result in gain or loss, acceleration of income or deductions, or recapture of deductions or credits. Unemployment tax forms For example, the transfer of an installment obligation to the estate would not accelerate gain under the rules for reporting installment sales. Unemployment tax forms The estate assumes the same basis, holding period, and character of the transferred assets. Unemployment tax forms Also, the estate generally accounts for the transferred assets in the same manner as debtor. Unemployment tax forms   When the bankruptcy estate is terminated or dissolved, any resulting transfer (other than by sale or exchange) of the estate's assets back to the debtor is also not treated as a disposition for tax purposes. Unemployment tax forms The transfer does not result in gain or loss, acceleration of income or deductions, or recapture of deductions or credits to the estate. Unemployment tax forms Abandoned property. Unemployment tax forms    The abandonment of property by the estate to the debtor is a nontaxable disposition of property. Unemployment tax forms If the debtor received abandoned property from the bankruptcy estate, the debtor assumes the same basis in the property that the bankruptcy estate had. Unemployment tax forms Separate taxable entity. Unemployment tax forms   When an individual files a bankruptcy petition under chapter 7 or 11, the bankruptcy estate is treated as a separate taxable entity from the debtor. Unemployment tax forms The court appointed trustee or the debtor-in-possession is responsible for preparing and filing all of the bankruptcy estate's tax returns, including its income tax return on Form 1041, U. Unemployment tax forms S. Unemployment tax forms Income Tax Return for Estates and Trusts, and paying its taxes. Unemployment tax forms The debtor remains responsible for filing his or her own returns on Form 1040, U. Unemployment tax forms S. Unemployment tax forms Individual Income Tax Return, and paying taxes on income that does not belong to the estate. Unemployment tax forms Employer identification number. Unemployment tax forms   The trustee or debtor-in-possession must obtain an EIN for a bankruptcy estate. Unemployment tax forms The trustee or debtor-in-possession uses this EIN on all tax returns filed for the bankruptcy estate with the IRS, including estimated tax returns. Unemployment tax forms See Employer identification number, under Bankruptcy Estate Tax Return Filing Requirements and Payment of Tax Due, later. Unemployment tax forms    The social security number of the individual debtor cannot be used as the EIN for the bankruptcy estate. Unemployment tax forms Income, deductions, and credits – Form 1040. Unemployment tax forms   In an individual chapter 7 or 11 bankruptcy case, do not include the income, deductions, and credits that belong to the bankruptcy estate on the debtor's individual income tax return (Form 1040). Unemployment tax forms Also, do not include as income on the debtor's return the amount of any debt canceled by reason of the bankruptcy discharge. Unemployment tax forms The bankruptcy estate must reduce certain losses, credits, and the basis in property (to the extent of these items) by the amount of canceled debt. Unemployment tax forms See Debt Cancellation, below. Unemployment tax forms Note. Unemployment tax forms The debtor may not be able to claim certain deductions available to the bankruptcy estate such as administrative expenses. Unemployment tax forms Additionally, the bankruptcy exclusion cannot be used to exclude income from a cancelled debt if the discharge of indebtedness was not within the bankruptcy case, even though the debtor was under the bankruptcy court's protection at the time. Unemployment tax forms However, other exclusions, such as the insolvency exclusion, may apply. Unemployment tax forms Bankruptcy Estate – Income, Deductions, and Credits Bankruptcy Estate Income Income of the estate in individual chapter 7 cases. Unemployment tax forms    The gross income of the bankruptcy estate includes gross income of the debtor to which the estate is entitled under the Bankruptcy Code. Unemployment tax forms Gross income also includes income generated by the bankruptcy estate from property of the estate after the commencement of the case. Unemployment tax forms   Gross income of the bankruptcy estate does not include amounts received or accrued by the debtor before the commencement of the case. Unemployment tax forms Additionally, in chapter 7 cases, gross income of the bankruptcy estate does not include any income that the debtor earns after the date of the bankruptcy petition. Unemployment tax forms Income of the estate in individual chapter 11 cases. Unemployment tax forms    In chapter 11 cases, under IRC section 1398(e)(1), gross income of the bankruptcy estate includes income that the debtor earns for services performed after the bankruptcy petition date. Unemployment tax forms Also, earnings from services performed by an individual debtor after the commencement of the chapter 11 case are property of the bankruptcy estate under section 1115 of the Bankruptcy Code (11 U. Unemployment tax forms S. Unemployment tax forms C. Unemployment tax forms section 1115). Unemployment tax forms Note. Unemployment tax forms A debtor-in-possession may be compensated by the estate for managing or operating a trade or business that the debtor conducted before the commencement of the bankruptcy case. Unemployment tax forms Such payments should be reported by the debtor as miscellaneous income on his or her individual income tax return (Form 1040). Unemployment tax forms Amounts paid by the estate to the debtor-in-possession for managing or operating the trade or business may qualify as administrative expenses of the estate. Unemployment tax forms See Administrative expenses, below. Unemployment tax forms Conversion or dismissal of chapter 11 cases. Unemployment tax forms   If a chapter 11 case is converted to a chapter 13 case, the chapter 13 estate is not a separate taxable entity and earnings from post-conversion services and income from property of the estate realized after the conversion to chapter 13 are taxed to the debtor. Unemployment tax forms If the chapter 11 case is converted to a chapter 7 case, 11 U. Unemployment tax forms S. Unemployment tax forms C. Unemployment tax forms section 1115 does not apply after conversion and: Earnings from post-conversion services will be taxed to the debtor, rather than the estate, and The property of the chapter 11 estate will become property of the chapter 7 estate. Unemployment tax forms Any income on this property will be taxed to the estate even if the income is realized after the conversion to chapter 7. Unemployment tax forms If a chapter 11 case is dismissed, the debtor is treated as if the bankruptcy case had never been filed and as if no bankruptcy estate had been created. Unemployment tax forms Bankruptcy Estate Deductions and Credits A bankruptcy estate deducts expenses incurred in a trade, business, or activity, and uses credits in the same way the debtor would have deducted or credited them had he or she continued operations. Unemployment tax forms Note. Unemployment tax forms Expenses may be disallowed under other provisions of the IRC (such as the disallowance of certain capital expenditures or expenses relating to tax-exempt interest). Unemployment tax forms Administrative expenses. Unemployment tax forms   Allowable expenses include administrative expenses. Unemployment tax forms    Administrative expenses can only be deducted by the estate, never by the debtor. Unemployment tax forms   The bankruptcy estate is allowed deductions for bankruptcy administrative expenses and fees, including accounting fees, attorney fees, and court costs. Unemployment tax forms These expenses are deductible on Form 1040, Schedule A as miscellaneous itemized deductions not subject to the 2% floor on miscellaneous itemized deductions, because they would not have been incurred if property had not been held by the bankruptcy estate. Unemployment tax forms See IRC section 67(e). Unemployment tax forms Administrative expenses of the bankruptcy estate attributable to conducting a trade or business for the production of estate rents or royalties are deductible in arriving at adjusted gross income on Form 1040, Schedules C, E, and F. Unemployment tax forms Note. Unemployment tax forms The bankruptcy estate uses Form 1041 as a transmittal for the tax return prepared using Form 1040 and its schedules. Unemployment tax forms See Transmittal for Form 1040 under Tax Return Filing Requirements and Payment of Tax, later. Unemployment tax forms Administrative expense loss. Unemployment tax forms   If the administrative expenses of the bankruptcy estate are more than its gross income for a tax year, the excess amount may be carried back 3 years and forward 7 years. Unemployment tax forms The amounts can only be carried to a tax year of the estate and never to a debtor's tax year. Unemployment tax forms The excess amount to be carried back or forward is treated like a net operating loss (NOL) and must first be carried back to the earliest year possible. Unemployment tax forms For a discussion of NOLs, see Publication 536. Unemployment tax forms Attribute carryovers. Unemployment tax forms   The bankruptcy estate may use its tax attributes the same way that the debtor would have used them. Unemployment tax forms These items are determined as of the first day of the debtor's tax year in which the bankruptcy case begins. Unemployment tax forms The bankruptcy estate assumes the following tax attributes from the debtor: NOL carryovers, Carryovers of excess charitable contributions, Recovery of tax benefit items, Credit carryovers, Capital loss carryovers, Basis, holding period, and character of assets, Method of accounting, Passive activity loss and credit carryovers, Unused at-risk deductions, and Other tax attributes provided in the regulations. Unemployment tax forms   Certain tax attributes of the bankruptcy estate must be reduced by the amount of income that was previously excluded as a result of cancellation of debt during the bankruptcy proceeding. Unemployment tax forms See Debt Cancellation, later. Unemployment tax forms   When the bankruptcy estate is terminated (for example, when the case ends), the debtor assumes any remaining tax attributes previously taken over by the bankruptcy estate. Unemployment tax forms The debtor also generally assumes any of the tax attributes, listed above, that arose during the administration of the bankruptcy estate. Unemployment tax forms Note. Unemployment tax forms The debtor does not assume the bankruptcy estate's administrative expense losses because they cannot be used by an individual taxpayer filing Form 1040. Unemployment tax forms See Administrative expense loss, above. Unemployment tax forms Passive and at-risk activities. Unemployment tax forms   For bankruptcy cases beginning after November 8, 1992, passive activity carryover losses and credits and unused at-risk deductions are treated as tax attributes passing from the debtor to the bankruptcy estate, which the estate then passes back to the debtor when the bankruptcy estate terminates. Unemployment tax forms Additionally, transfers to the debtor (other than by sale or exchange) of interests in passive or at-risk activities are treated as non-taxable exchanges. Unemployment tax forms These transfers include the return of exempt property and abandonment of estate property to the debtor. Unemployment tax forms Carrybacks from the debtor's activities. Unemployment tax forms   The debtor cannot carry back any NOL or credit carryback from a tax year ending after the bankruptcy case has begun to any tax year ending before the case began. Unemployment tax forms Carrybacks from the bankruptcy estate. Unemployment tax forms   If the bankruptcy estate has an NOL that did not pass to the estate from the debtor under the attribute carryover rules, the estate can carry the loss back not only to its own earlier tax years but also to the debtor's tax years before the year the bankruptcy case began. Unemployment tax forms The estate may also carry back excess credits, such as the general business credit, to the pre-bankruptcy tax years. Unemployment tax forms Tax Reporting – Chapter 11 Cases Allocation of income and credits on information returns and required statement for returns for individual chapter 11 cases. Unemployment tax forms    In chapter 11 cases, when an employer issues a Form W-2 reporting all of the debtor's wages, salary, or other compensation for a calendar year, and a portion of the earnings represent post-petition services includible in the estate's gross income, the Form W-2 amounts must be allocated between the estate and the debtor. Unemployment tax forms The debtor-in-possession or trustee must allocate the income amount reported in box 1 and the income tax withheld reported in box 2 between the debtor and the estate. Unemployment tax forms These allocations must reflect that the debtor's gross earnings from post-petition services and gross income from post-petition property are, generally, includible in the estate's gross income and not the debtor's gross income. Unemployment tax forms The debtor and trustee may use a simple percentage method to allocate income and income tax withheld. Unemployment tax forms The same method must be used to allocate the income and the withheld tax. Unemployment tax forms Example. Unemployment tax forms If 20% of the wages reported on Form W-2 for a calendar year were earned after the commencement of the case and are included in the estate's gross income, 20% of the withheld income tax reported on Form W-2 must also be claimed as a credit on the estate's income tax return. Unemployment tax forms Likewise, 80% of wages must be reported by the debtor and 80% of the income tax withheld must be claimed as a credit on the debtor's income tax return. Unemployment tax forms See IRC section 31(a). Unemployment tax forms   If information returns are issued to the debtor for gross income, gross proceeds, or other reportable payments that should have been reported to the bankruptcy estate, the debtor-in-possession or trustee must allocate the improperly reported income in a reasonable manner between the debtor and the estate. Unemployment tax forms In general, the allocation must ensure that any income and income tax withheld attributable to the post-petition period is reported on the estate's return, and any income and income tax withheld attributable to the pre-petition period is reported on the debtor's return. Unemployment tax forms    IRS Notice 2006-83 requires the debtor to attach a statement to his or her individual income tax return (Form 1040) stating that the return is filed subject to a chapter 11 bankruptcy case. Unemployment tax forms The statement must also: Show the allocations of income and income tax withheld, Describe the method used to allocate income and income tax withheld, and List the filing date of the bankruptcy case, the bankruptcy court in which the case is pending, the bankruptcy court case number, and the bankruptcy estate's EIN. Unemployment tax forms Note. Unemployment tax forms The debtor-in-possession or trustee must attach a similar statement to the bankruptcy estate's income tax return (Form 1041). Unemployment tax forms   The model Notice 2006-83 Statement, shown above, may be used by debtors, debtors-in-possession, and trustees to satisfy the reporting requirement. Unemployment tax forms Self-employment taxes in individual chapter 11 cases. Unemployment tax forms   IRC section 1401 imposes a tax upon the self-employment income, that is, the net earnings from self-employment of an individual. Unemployment tax forms Net earnings from self-employment are equal to the gross income derived by an individual from any trade or business carried on by such individual, less deductions attributable to the business. Unemployment tax forms   Neither section 1115 of the Bankruptcy Code nor IRC section 1398 addresses the application of self-employment tax to the post-petition earnings of the individual debtor. Unemployment tax forms Therefore, if the debtor continues to derive gross income from the performance of services as a self-employed individual after the commencement of the bankruptcy case, the debtor must continue to report the debtor's self-employment income on Schedule SE (Form 1040) of the debtor's income tax return. Unemployment tax forms This schedule includes self-employment income earned post-petition and the attributable deductions. Unemployment tax forms The debtor must pay any self-employment tax imposed by IRC section 1401. Unemployment tax forms Employment taxes and employer's obligation to file Form W-2 in individual chapter 11 cases. Unemployment tax forms   In chapter 11 cases, post-petition wages earned by a debtor are generally treated as gross income of the estate. Unemployment tax forms However, section 1115 of the Bankruptcy Code (11 U. Unemployment tax forms S. Unemployment tax forms C. Unemployment tax forms section 1115) does not affect the determination of what are deemed wages for Federal Insurance Contributions Act (FICA) tax, Federal Unemployment Tax Act (FUTA) tax, or Federal Income Tax Withholding purposes. Unemployment tax forms See Notice 2006-83. Unemployment tax forms   The reporting and withholding obligations of a debtor's employer also do not change. Unemployment tax forms An employer should continue to report the wages and tax withholding on a Form W-2 issued under the debtor's name and social security number. Unemployment tax forms Notice to persons required to file information returns (other than Form W-2, Wage and Tax Statement) in individual chapter 11 cases. Unemployment tax forms   Within a reasonable time after the commencement of a chapter 11 bankruptcy case, the trustee or debtor-in-possession should provide notification of the bankruptcy estate's EIN to all persons (or entities) that are required to file information returns for the bankruptcy estate's gross income, gross proceeds, or other types of reportable payments. Unemployment tax forms See IRC section 6109(a)(2). Unemployment tax forms As these payments are the property of the estate under section 1115 of the Bankruptcy Code, the payors should report the gross income, gross proceeds, or other reportable payments on the appropriate information return using the estate's name and EIN as required under the IRC and regulations (see IRC sections 6041 through 6049). Unemployment tax forms   The trustee or debtor-in-possession should not, however, provide the EIN to a person (or entity) filing Form W-2 reporting the debtor's wages or other compensation, as section 1115 of the Bankruptcy Code does not affect the determination of what constitutes wages for purposes of federal income tax withholding or FICA. Unemployment tax forms See Notice 2006-83. Unemployment tax forms An employer should continue to report all wage income and tax withholding, both pre-petition and post-petition, on a Form W-2 to the debtor under the debtor's social security number. Unemployment tax forms   The debtor in a chapter 11 case is not required to file a new Form W-4 with an employer solely because the debtor filed a chapter 11 case and the post-petition wages are includible in the estate's income and not the debtor's income. Unemployment tax forms However, a new Form W-4 may be necessary if the debtor is no longer entitled to claim the same number of allowances previously claimed because certain deductions or credits now belong to the estate. Unemployment tax forms See Employment Tax Regulations section 31. Unemployment tax forms 3402(f)(2)-1. Unemployment tax forms Additionally, the debtor may wish to file a new Form W-4 to increase the income tax withheld from post-petition wages allocated to the estate to avoid having to make estimated tax payments for the estate. Unemployment tax forms See IRC section 6654(a). Unemployment tax forms Notice required in converted and dismissed cases. Unemployment tax forms   When a chapter 11 bankruptcy case is closed, dismissed, or converted to a chapter 12 or 13 case, the bankruptcy estate ends as a separate taxable entity. Unemployment tax forms The debtor should, within a reasonable time, send notice of such event to the persons (or entities) previously notified of the bankruptcy case. Unemployment tax forms This helps to ensure that gross income, proceeds, and other reportable payments realized after the event are reported to the debtor under the correct TIN rather than to the estate. Unemployment tax forms   When a chapter 11 case is converted to a chapter 7 case, the bankruptcy estate will continue to exist as a separate taxable entity. Unemployment tax forms Gross income (other than post-conversion income from the debtor's services), gross proceeds, or other reportable payments should continue to be reported to the estate if they are property of the chapter 7 estate. Unemployment tax forms However, income from services performed by the debtor after conversion of the case to chapter 7 is not property of the chapter 7 estate. Unemployment tax forms After the conversion, the debtor should notify payors required to report the debtor's nonemployee compensation that compensation earned after the conversion should be reported using the debtor's name and TIN, not the estate's name and EIN. Unemployment tax forms Employment taxes. Unemployment tax forms   The trustee or debtor-in-possession must withhold income and social security taxes and file employment tax returns for any wages paid by the trustee or debtor, including wage claims paid as administrative expenses. Unemployment tax forms See Publication 15, Circular E, Employer's Tax Guide, for details on employer tax responsibilities. Unemployment tax forms   The trustee also has the duty to prepare and file Forms W-2 for wage claims paid by the trustee, regardless of whether the claims accrued before or during bankruptcy. Unemployment tax forms For a further discussion of employment taxes, see Employment Taxes, later. Unemployment tax forms Notice 2006-83 Statement Pending Bankruptcy Case The taxpayer, , filed a bankruptcy petition under chapter 11 of the Bankruptcy Code in the bankruptcy court for the District of . Unemployment tax forms The bankruptcy court case number is . Unemployment tax forms Gross income, and withheld federal income tax, reported on Form W-2, Forms 1099, Schedule K-1, and other information returns received under the taxpayer's name and social security number (or other taxpayer identification number) are allocated between the taxpayer's TIN and the bankruptcy estate's EIN as follows, using [describe allocation method]:. Unemployment tax forms   Year Taxpayer   Estate 1. Unemployment tax forms Form W-2, Payor: $   $     Withheld income tax shown on Form W-2 $   $   2. Unemployment tax forms Form 1099-INT Payor: $   $     Withheld income tax (if any) shown on Form 1099-INT $   $   3. Unemployment tax forms Form 1099-DIV Payor: $   $     Withheld income tax (if any) shown on Form 1099-DIV $   $   4. Unemployment tax forms Form 1099-MISC Payor: $   $     Withheld income tax (if any) shown on Form 1099-MISC $   $   Bankruptcy Estate Tax Return Filing Requirements and Payment of Tax Due Filing Requirements Filing threshold. Unemployment tax forms   If the bankruptcy estate has gross income that meets or exceeds the minimum amount required for filing, the trustee or debtor-in-possession must file an income tax return on Form 1041. Unemployment tax forms This amount is equal to the sum of the personal exemption amount plus the basic standard deduction for a married individual filing separately. Unemployment tax forms   For 2012, the threshold filing amount for a bankruptcy estate is $9,750 (the sum of the $3,800 personal exemption plus the $5,950 standard deduction for married individuals filing separately). Unemployment tax forms   These amounts are generally adjusted annually. Unemployment tax forms See the present year Form 1041 Instructions at www. Unemployment tax forms irs. Unemployment tax forms gov/form1041 for the current dollar amounts. Unemployment tax forms Accounting period. Unemployment tax forms   A bankruptcy estate may have a fiscal year. Unemployment tax forms However, this period cannot be longer than 12 months. Unemployment tax forms Change of accounting period. Unemployment tax forms   The bankruptcy estate may change its accounting period (tax year) once without IRS approval. Unemployment tax forms This rule allows the bankruptcy trustee to close the estate's tax year early, before the expected termination of the bankruptcy estate. Unemployment tax forms The trustee can then file a return for the first short tax year to get a quick determination of the estate's tax liability. Unemployment tax forms Employer identification number. Unemployment tax forms   The trustee or debtor-in-possession must obtain an EIN for a bankruptcy estate. Unemployment tax forms The trustee or debtor-in-possession uses this EIN on all tax returns filed for the bankruptcy estate with the IRS, including estimated tax returns. Unemployment tax forms    The social security number of the individual debtor cannot be used as the EIN for the bankruptcy estate. Unemployment tax forms   Obtain an EIN for a bankruptcy estate by applying: Online by clicking on the EIN link at www. Unemployment tax forms irs. Unemployment tax forms gov/businesses/small. Unemployment tax forms The EIN is issued immediately once the application information is validated. Unemployment tax forms By telephone at 1-800-829-4933 from 7:00 a. Unemployment tax forms m. Unemployment tax forms to 7:00 p. Unemployment tax forms m. Unemployment tax forms in the trustee's or debtor-in-possession's local time zone. Unemployment tax forms Assistance provided to callers from Alaska and Hawaii will be based on the hours of operation in the Pacific time zone, or By mailing or faxing Form SS-4, Application for Employer Identification Number. Unemployment tax forms   If the trustee or debtor-in-possession has not received the bankruptcy estate's EIN by the time the return is due, write “Applied for” and the date you applied in the space for the EIN. Unemployment tax forms For more details, see Pub. Unemployment tax forms 583, Starting a Business and Keeping Records. Unemployment tax forms   Trustees representing ten or more bankruptcy estates (other than estates that will be filing employment or excise tax returns) may request a series or block of EINs. Unemployment tax forms Figuring tax due. Unemployment tax forms   The bankruptcy estate figures its taxable income the same way an individual figures taxable income. Unemployment tax forms However, the estate uses the tax rates for a married individual filing separately to calculate the tax on its taxable income. Unemployment tax forms The estate is entitled to one personal exemption and may either itemize deductions or take the basic standard deduction for a married individual filing a separate return. Unemployment tax forms The estate cannot take the higher standard deduction allowed for married persons filing separately who are 65 or older or blind. Unemployment tax forms Tax rate schedule. Unemployment tax forms The tax on income for bankruptcy estates is calculated using the tax rate schedule for Married Individuals Filing Separately not the Estates and Trusts tax rate schedule. Unemployment tax forms When to file. Unemployment tax forms   Calendar year bankruptcy estates must file Form 1041 by April 15th. Unemployment tax forms Fiscal year bankruptcy estates must file on or before the 15th day of the 4th month following the close of its tax year. Unemployment tax forms For example, an estate that has a tax year that ends on June 30th must file Form 1041 by October 15th of the tax year. Unemployment tax forms If the due date falls on a Saturday, Sunday, or legal holiday, file on the next business day. Unemployment tax forms Note. Unemployment tax forms The bankruptcy estate is allowed an automatic 6-month extension of time to file the bankruptcy estate tax return upon filing the required application, Form 7004, Application for Automatic Extension of Time To File Certain Business Income Tax, Information, and Other Returns. Unemployment tax forms Transmittal for Form 1040. Unemployment tax forms   Form 1041 is used as a transmittal for Form 1040. Unemployment tax forms If a return is required, the trustee or debtor-in-possession must complete the identification area at the top of Form 1041 and indicate the chapter under which the bankruptcy estate filed, either chapter 7 or chapter 11. Unemployment tax forms   Prepare the bankruptcy estate's return by completing Form 1040. Unemployment tax forms In the top margin of Form 1040, write “Attachment to Form 1041 —DO NOT DETACH. Unemployment tax forms ” Then, attach Form 1040 to the Form 1041 transmittal. Unemployment tax forms Enter the tax and payment amounts on lines 23 through 29 of Form 1041, then sign and date the return. Unemployment tax forms An example of a bankruptcy estate's tax return is prepared below. Unemployment tax forms Note. Unemployment tax forms The filing of the bankruptcy estate's tax return does not relieve a debtor from the requirement to file his or her individual tax return on Form 1040. Unemployment tax forms Payment of Tax Due Payment methods. Unemployment tax forms   Payment of tax due may be made by check or money order or by credit or debit card. Unemployment tax forms For information on how to make payments electronically by credit or debit card, go to irs. Unemployment tax forms gov/e-pay. Unemployment tax forms      Payments may also be made electronically using the Electronic Federal Tax Payment System (EFTPS), a free tax payment system that allows you to make payments online or by phone. Unemployment tax forms To enroll in EFTPS, go to eftps. Unemployment tax forms gov or call 1-800-555-4477. Unemployment tax forms For more information see Publication 966, Electronic Federal Tax Payment System: A Guide to Getting Started. Unemployment tax forms Payment voucher – Form 1041-V. Unemployment tax forms   Form 1041-V accompanies payments made by check or money order for Form 1041. Unemployment tax forms The voucher includes information about the bankruptcy estate, including the name of the bankruptcy estate, trustee, EIN, and amount due. Unemployment tax forms Using Form 1041-V assists the IRS in processing the payment more accurately and efficiently. Unemployment tax forms We recommend the use of Form 1041-V; however, there is no penalty if the voucher is not used. Unemployment tax forms Estimated tax – Form 1041-ES. Unemployment tax forms   In most cases, the trustee or debtor-in-possession must pay any required estimated tax due for the bankruptcy estate. Unemployment tax forms See the Form 1041-ES Instructions for information on the minimum threshold amount required for filing Form 1041-ES, paying the estimated tax, and exceptions to filing. Unemployment tax forms Employment Taxes The trustee or debtor-in-possession must withhold income and social security taxes and file employment tax returns for any wages paid by the trustee or debtor, including wage claims paid as administrative expenses. Unemployment tax forms Until these employment taxes are deposited as required by the IRC, they should be set aside in a separate bank account to ensure that funds are available to satisfy the liability. Unemployment tax forms If the employment taxes are not paid as required, the trustee may be held personally liable for payment of the taxes. Unemployment tax forms   See Publication 15, (Circular E), Employer's Tax Guide, for details on employer tax responsibilities. Unemployment tax forms Also see IRS Notice 931, Deposit Requirements for Employment Taxes, for details on the deposit rules, including the requirement that federal employment tax deposits be made by electronic funds transfer. Unemployment tax forms The trustee also has a duty to prepare and file Forms W-2, Wage and Tax Statement, for wage claims paid by the trustee, regardless of whether the claims accrued before or during bankruptcy. Unemployment tax forms If the debtor fails to prepare and file Forms W-2 for wages paid before bankruptcy, the trustee should instruct the employees to file a Form 4852, Substitute for Form W-2, Wage and Tax Statement, or Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. Unemployment tax forms , with their individual income tax returns. Unemployment tax forms Tax Return Example – Form 1041 This publication is not revised annually. Unemployment tax forms Future changes to the forms and their instructions may not be reflected in this example. Unemployment tax forms Note. Unemployment tax forms The following return was prepared for tax year 2011. Unemployment tax forms In 2011, the threshold filing amount for a bankruptcy estate was $9,500 (the sum of the $3,700 personal exemption plus the $5,800 standard deduction for married individuals filing separately). Unemployment tax forms Facts and circumstances. Unemployment tax forms   On December 15, 2010, Thomas Smith filed a bankruptcy petition under chapter 7. Unemployment tax forms Joan Black was appointed trustee to administer the bankruptcy estate and to distribute the assets. Unemployment tax forms   The estate received the following assets from Mr. Unemployment tax forms Smith: A $100,000 certificate of deposit, Commercial rental real estate with a fair market value (FMV) of $280,000, and His personal residence with an FMV of $200,000. Unemployment tax forms   Also, the estate received a $251,500 capital loss carryover. Unemployment tax forms   Mr. Unemployment tax forms Smith's bankruptcy case was closed on December 31, 2011. Unemployment tax forms During 2011, Mr. Unemployment tax forms Smith was relieved of $70,000 of debt by the bankruptcy court. Unemployment tax forms The estate chose a calendar year as its tax year. Unemployment tax forms Joan, the trustee, reviews the estate's transactions and reports the taxable events on the estate's final return. Unemployment tax forms Schedule B (Form 1040). Unemployment tax forms    The certificate of deposit earned $5,500 of interest during 2011. Unemployment tax forms Joan reports this interest on Schedule B. Unemployment tax forms She completes this schedule and enters the result on Form 1040. Unemployment tax forms Form 4562. Unemployment tax forms   Joan enters the depreciation allowed on Form 4562. Unemployment tax forms She completes the form and enters the result on Schedule E. Unemployment tax forms Schedule E (Form 1040). Unemployment tax forms   The commercial real estate was rented through the date of sale. Unemployment tax forms Joan reports the income and expenses on Schedule E. Unemployment tax forms She enters the net income on Form 1040. Unemployment tax forms Form 4797. Unemployment tax forms   The commercial real estate was sold on July 1, 2011, for $280,000. Unemployment tax forms The property was purchased in 2001 at a cost of $250,000. Unemployment tax forms The total depreciation allowable as of the date of sale was $120,000. Unemployment tax forms Additionally, $25,000 of selling expenses were incurred. Unemployment tax forms Joan reports the gain or loss from the sale on Form 4797. Unemployment tax forms She completes the form and enters the gain on Schedule D (Form 1040). Unemployment tax forms   Mr. Unemployment tax forms Smith's former residence was sold on September 30, 2011. Unemployment tax forms The sale price was $200,000, the selling expenses were $20,000, and his adjusted basis was $130,000. Unemployment tax forms This sale is excluded from gross income under IRC section 121. Unemployment tax forms Note. Unemployment tax forms Gains from the sale of personal residences are excluded from gross income up to $250,000 under IRC section 121 ($500,000 for married couples filing a joint return). Unemployment tax forms Bankruptcy estates succeed to this exclusion at the commencement of the case. Unemployment tax forms See Regulation section 1. Unemployment tax forms 1398-3. Unemployment tax forms Schedule D (Form 1040). Unemployment tax forms   Joan completes Schedule D, taking into account the $250,000 capital loss carryover from 2010 ($251,500 transferred to the estate minus $1,500 used on the estate's 2010 return). Unemployment tax forms She enters the results on Form 1040. Unemployment tax forms Form 1040, page 1. Unemployment tax forms   Joan completes page 1 of the Form 1040 and enters the adjusted gross income on the first line of Form 1040, page 2. Unemployment tax forms Schedule A (Form 1040). Unemployment tax forms   During 2011, the estate paid mortgage interest and real property tax on Mr. Unemployment tax forms Smith's former residence. Unemployment tax forms It also paid income tax to the state. Unemployment tax forms Joan enters the mortgage interest, real estate tax, and income tax on Schedule A. Unemployment tax forms Also, she reports the bankruptcy estate's administrative expenses as a miscellaneous deduction not subject to the 2% floor on miscellaneous itemized deductions. Unemployment tax forms She completes the Schedule A and enters the result on page 2 of Form 1040. Unemployment tax forms Form 1040, page 2. Unemployment tax forms   Joan determines the estate's taxable income and figures its tax using the tax rate schedule for married filing separately. Unemployment tax forms She then enters the estate's estimated tax payments and figures the amount the estate still owes. Unemployment tax forms Form 982. Unemployment tax forms   Joan completes the Schedule D Tax Worksheet to figure the capital loss carryover. Unemployment tax forms Because $70,000 of debt was canceled, Joan must reduce the tax attributes of the estate by the amount of the canceled debt. Unemployment tax forms See Debt Cancellation, later. Unemployment tax forms After the bankruptcy case ends, Mr. Unemployment tax forms Smith will assume the estate's tax attributes. Unemployment tax forms Mr. Unemployment tax forms Smith will assume a capital loss carryover of $53,500 ($123,500 carryover minus the $70,000 attribute reduction) for use in preparation of his individual tax return (Form 1040). Unemployment tax forms Note. Unemployment tax forms If the bankruptcy estate had continued, the capital loss carryover would be available to the bankruptcy estate for the 2012 tax year. Unemployment tax forms Form 1041. Unemployment tax forms   Joan enters the total tax, estimated tax payments, and tax due from Form 1040 on Form 1041. Unemployment tax forms She completes the identification area at the top of Form 1041, then signs and dates the return as the trustee on behalf of the bankruptcy estate. Unemployment tax forms This image is too large to be displayed in the current screen. Unemployment tax forms Please click the link to view the image. Unemployment tax forms Sample Form 1040 - page 1 This image is too large to be displayed in the current screen. Unemployment tax forms Please click the link to view the image. Unemployment tax forms Sample Form 1040 - page 2 This image is too large to be displayed in the current screen. Unemployment tax forms Please click the link to view the image. Unemployment tax forms Sample Schedule A This image is too large to be displayed in the current screen. Unemployment tax forms Please click the link to view the image. Unemployment tax forms Sample Schedule B This image is too large to be displayed in the current screen. Unemployment tax forms Please click the link to view the image. Unemployment tax forms Sample Schedule D This image is too large to be displayed in the current screen. Unemployment tax forms Please click the link to view the image. Unemployment tax forms Sample Schedule E This image is too large to be displayed in the current screen. Unemployment tax forms Please click the link to view the image. Unemployment tax forms Sample Form 4797 - page 1 This image is too large to be displayed in the current screen. Unemployment tax forms Please click the link to view the image. Unemployment tax forms Sample Form 2119 This image is too large to be displayed in the current screen. Unemployment tax forms Please click the link to view the image. Unemployment tax forms Sample Form 4797 - page 2 This image is too large to be displayed in the current screen. Unemployment tax forms Please click the link to view the image. Unemployment tax forms Sample Form 4562 This image is too large to be displayed in the current screen. Unemployment tax forms Please click the link to view the image. Unemployment tax forms Sample Capital Loss Carryover Worksheet This image is too large to be displayed in the current screen. Unemployment tax forms Please click the link to view the image. Unemployment tax forms Sample Form 982 Capital Loss Carryover Worksheet—Lines 6 and 14 Use this worksheet to figure your capital loss carryovers from 2010 to 2011 if your 2010 Schedule D, line 21, is a loss and (a) that loss is a smaller loss than the loss on your 2010 Schedule D, line 16, or (b) the amount on your 2010 Form 1040, line 41 (or your 2010 Form 1040NR, line 38, if applicable) is less than zero. Unemployment tax forms Otherwise, you do not have any carryovers. Unemployment tax forms 1. Unemployment tax forms Enter the amount from your 2010 Form 1040, line 41, or Form 1040NR, line 38. Unemployment tax forms If a loss, enclose the amount in parentheses 1. Unemployment tax forms 19,880   2. Unemployment tax forms Enter the loss from your 2010 Schedule D, line 21, as a positive amount 2. Unemployment tax forms 1,500   3. Unemployment tax forms Combine lines 1 and 2. Unemployment tax forms If zero or less, enter -0- 3. Unemployment tax forms 21,380   4. Unemployment tax forms Enter the smaller of line 2 or line 3 4. Unemployment tax forms 1,500     If line 7 of your 2010 Schedule D is a loss, go to line 5; otherwise, enter -0- on line 5 and go to line 9. Unemployment tax forms       5. Unemployment tax forms Enter the loss from your 2010 Schedule D, line 7, as a positive amount 5. Unemployment tax forms 0   6. Unemployment tax forms Enter any gain from your 2010 Schedule D, line 15. Unemployment tax forms If a loss, enter -0- 6. Unemployment tax forms         7. Unemployment tax forms Add lines 4 and 6 7. Unemployment tax forms 1,500   8. Unemployment tax forms Short-term capital loss carryover for 2011. Unemployment tax forms Subtract line 7 from line 5. Unemployment tax forms If zero or less, enter -0-. Unemployment tax forms If more than zero, also enter this amount on Schedule D, line 6 8. Unemployment tax forms 0     If line 15 of your 2010 Schedule D is a loss, go to line 9; otherwise, skip lines 9 through 13. Unemployment tax forms       9. Unemployment tax forms Enter the loss from your 2010 Schedule D, line 15, as a positive amount 9. Unemployment tax forms 251,500   10. Unemployment tax forms Enter any gain from your 2010 Schedule D, line 7. Unemployment tax forms If a loss, enter -0- 10. Unemployment tax forms 0       11. Unemployment tax forms Subtract line 5 from line 4. Unemployment tax forms If zero or less, enter -0- 11. Unemployment tax forms 1,500       12. Unemployment tax forms Add lines 10 and 11 12. Unemployment tax forms 1,500   13. Unemployment tax forms Long-term capital loss carryover for 2011. Unemployment tax forms Subtract line 12 from line 9. Unemployment tax forms If zero or less, enter -0-. Unemployment tax forms If more than zero, also enter this amount on Schedule D, line 14 13. Unemployment tax forms 250,000                       Partnerships and Corporations Filing Requirements A separate taxable estate is not created when a partnership or corporation files a bankruptcy petition and their tax return filing requirements do not change. Unemployment tax forms The debtor-in-possession, court appointed trustee, assignee, or receiver must file the entity's income tax returns on Form 1065, Form 1120 or, Form 1120S. Unemployment tax forms In cases where a trustee or receiver is not appointed, the debtor-in-possession continues business operations and remains in possession of the business' property during the bankruptcy proceeding. Unemployment tax forms The debtor-in-possession, rather than the general partner of a partnership or corporate officer of a corporation, assumes the fiduciary responsibility to file the business' tax returns. Unemployment tax forms Partnerships The filing requirements for a partnership in a bankruptcy proceeding do not change. Unemployment tax forms However, the responsibility to file the required returns becomes that of the court appointed trustee, receiver, or debtor-in-possession. Unemployment tax forms A partnership's debt that is canceled as a result of the bankruptcy proceeding is not included in the partnership's income. Unemployment tax forms However, It may or may not be included in the individual partners' income. Unemployment tax forms See Partnerships, below under Debt Cancellation. Unemployment tax forms Corporations The filing requirements for a corporation in a bankruptcy proceeding also do not change. Unemployment tax forms A bankruptcy trustee, receiver, or debtor-in-possession, having possession of or holding title to substantially all of the property or business operations of the debtor corporation, must file the debtor's corporate income tax return for the tax year. Unemployment tax forms The following discussion only highlights bankruptcy tax rules applying to corporations. Unemployment tax forms The complex details of corporate bankruptcy reorganizations are beyond the scope of this publication. Unemployment tax forms Therefore, you may wish to seek the help of a professional tax advisor. Unemployment tax forms See Corporations under Debt Cancellation for information about a corporation's debt canceled in a bankruptcy proceeding. Unemployment tax forms Tax-Free Reorganizations The tax-free reorganization provisions of the Internal Revenue Code allow a corporation to transfer all or part of its assets to another corporation in a bankruptcy under title 11 of the United States Code or in a similar case. Unemployment tax forms However, under the reorganization plan, the stock or securities of the corporation to which the assets are transferred must be distributed in a transaction that qualifies under IRC section 354, 355, or 356. Unemployment tax forms A “similar case” includes a receivership, foreclosure, or other similar proceeding in a federal or state court. Unemployment tax forms In these cases, any party to the reorganization must be under the jurisdiction of the court and the transfer of assets under the plan of reorganization must be approved by the court. Unemployment tax forms In a receivership, foreclosure, or similar proceeding before a federal or state agency involving certain financial institutions, the agency is treated as a court. Unemployment tax forms Generally, IRC section 354 provides that no gain or loss is recognized if a corporation's stock is exchanged solely for stock or securities in a corporation that is a party to the reorganization under a qualifying reorganization plan. Unemployment tax forms In this case, shareholders in the bankrupt corporation would recognize no gain or loss if they exchange their stock solely for stock or securities of the corporation acquiring the bankrupt corporation's assets. Unemployment tax forms IRC section 355 generally provides that no gain or loss is recognized by a shareholder if a corporation distributes solely stock or securities of another corporation that the distributing corporation controls immediately before the distribution. Unemployment tax forms IRC section 356 allows tax-free exchanges in situations that would qualify under IRC section 354 or 355, except that other property or money, in addition to the permitted stock or securities, is received by the shareholder. Unemployment tax forms In this situation, gain is recognized by the shareholder, but only to the extent of the money and the FMV of the other property received. Unemployment tax forms No loss is recognized in this situation. Unemployment tax forms Exemption from tax return filing A trustee, receiver, or assignee of a corporation in bankruptcy, receivership, or in the process of dissolving, may apply to the IRS for relief from filing federal income tax returns for the corporation. Unemployment tax forms To qualify, the corporation must have ceased business operations and have no assets nor income for the tax year. Unemployment tax forms The exemption request must be submitted to the local IRS Insolvency Office handling the case. Unemployment tax forms The request to the IRS must include the name, address, and EIN of the corporation and a statement of the facts (with any supporting documents) showing why the debtor needs relief from the filing requirements. Unemployment tax forms The request must also include the following statement: “I hereby request relief from filing federal income tax returns for tax years ending _____ for the above-named corporation and declare under penalties of perjury that to the best of my knowledge and belief the information contained herein is correct. Unemployment tax forms ” The statement must be signed by the trustee, receiver or assignee. Unemployment tax forms The statement must also include notice of appointment to act on behalf of the corporation (this is not required for bankruptcy trustees or debtors-in-possession). Unemployment tax forms The IRS will act on your request within 90 days. Unemployment tax forms Disclosure of return information to trustee. Unemployment tax forms   Upon written request, current and earlier returns of the debtor are open to inspection by or disclosure to the trustee or receiver. Unemployment tax forms However, in bankruptcy cases other than those of individuals filing under chapter 7 or 11, such as a corporate bankruptcy, the IRS must find that the trustee has a material interest that will be affected by information on the return. Unemployment tax forms Material interest is generally defined as a financial or monetary interest. Unemployment tax forms Material interest is not limited to the trustee's responsibility to file a return on behalf of the bankruptcy estate. Unemployment tax forms Receiverships Court-established receiverships sometimes arise in connection with bankruptcies. Unemployment tax forms Certain court-established receiverships should be treated as qualified settlement funds ("QSFs") for purposes of IRC section 468B and the underlying Treasury Regulations. Unemployment tax forms QSFs are required to file an annual income tax return, Form 1120-SF, U. Unemployment tax forms S. Unemployment tax forms Income Tax Return for Settlement Funds. Unemployment tax forms More information about QSFs may be found in Treasury Regulation sections 1. Unemployment tax forms 468B-1 through -5. Unemployment tax forms Determination of Tax The determination of the proper amount of tax due for a tax year begins with the bankruptcy estate's filing of Form 1041, and the individual debtor's filing of Form 1040, or for bankrupt entities filing Forms 1065, 1120, or 1120S. Unemployment tax forms After a return is filed, the IRS will either accept the return as filed or select the return for examination. Unemployment tax forms Under examination the IRS may redetermine the tax liability shown on the return. Unemployment tax forms If the bankruptcy estate or debtor disagrees with the redetermined tax due, the tax as redetermined by the IRS may be contested in the bankruptcy court, or Tax Court, as applicable. Unemployment tax forms See Court Jurisdiction over Tax Matters, later. Unemployment tax forms Prompt Determination Requests Pursuant to Rev. Unemployment tax forms Proc. Unemployment tax forms 2006-24, 2006-22 I. Unemployment tax forms R. Unemployment tax forms B. Unemployment tax forms 943, www. Unemployment tax forms irs. Unemployment tax forms gov/irb/2006-22_IRB/ar12, as modified by Announcement 2011-77, www. Unemployment tax forms irs. Unemployment tax forms gov/irb/2011-51_IRB/ar13, the bankruptcy trustee may request a determination of any unpaid tax liability incurred by the bankruptcy estate during the administration of the case, by filing a tax return and a request for such determination with the IRS. Unemployment tax forms Unless the return is fraudulent or contains a material misrepresentation, the estate, trustee, debtor, and any successor to the debtor are discharged from liability upon payment of the tax: As determined by the IRS, As determined by the bankruptcy court, after completion of the IRS examination, or As shown on the return, if the IRS does not: Notify the trustee within 60 days after the request for determination that the return has been selected for examination, or Complete the examination and notify the trustee of any tax due within 180 days after the request (or any additional time permitted by the bankruptcy court). Unemployment tax forms Making the request for determination. Unemployment tax forms   As detailed in Rev. Unemployment tax forms Proc. Unemployment tax forms 2006-24, as modified by Announcement 2011-77, to request a prompt determination of any unpaid tax liability of the estate, the trustee must file a signed written request, in duplicate, with the Internal Revenue Service, Centralized Insolvency Operation, P. Unemployment tax forms O. Unemployment tax forms Box 7346, Philadelphia, PA 19101–7346 (marked “Request for Prompt Determination”). Unemployment tax forms   The request must be submitted in duplicate and must be executed under penalties of perjury. Unemployment tax forms In addition, the trustee must submit along with the request an exact copy of the return(s) filed by the trustee with the IRS for each completed tax period. Unemployment tax forms The request must contain the following information: A statement indicating that it is a Request for Prompt Determination of Tax Liability, specifying the type of return and tax period for each return being filed. Unemployment tax forms The name and location of the office where the return was filed. Unemployment tax forms The name of the debtor. Unemployment tax forms Debtor's social security number, TIN, or EIN. Unemployment tax forms Type of bankruptcy estate. Unemployment tax forms Bankruptcy case number. Unemployment tax forms Court where the bankruptcy case is pending. Unemployment tax forms   The copy of the return(s) submitted with the request must be an exact copy of a valid return. Unemployment tax forms A request for prompt determination will be considered incomplete and returned to the trustee if it is filed with a copy of a document that does not qualify as a valid return. Unemployment tax forms    To qualify as valid, a return must meet certain criteria, including a signature under penalties of perjury. Unemployment tax forms A document filed by the trustee with the jurat stricken, deleted, or modified will not qualify as a valid return. Unemployment tax forms Examination of return. Unemployment tax forms   The IRS will notify the trustee within 60 days from receipt of the request whether the return filed by the trustee has been selected for examination or has been accepted as filed. Unemployment tax forms If the return is selected for examination, it will be examined as soon as possible. Unemployment tax forms The IRS will notify the trustee of any tax due within 180 days from receipt of the application or within any additional time permitted by the bankruptcy court. Unemployment tax forms   If a prompt determination request is incomplete, all the documents received by the IRS will be returned to the trustee by the assigned Field Insolvency Office with an explanation identifying the missing item(s) and instructions to re-file the request once corrected. Unemployment tax forms   Once corrected, the request must be filed with the IRS at the Field Insolvency Office address specified in the correspondence accompanying the returned incomplete request. Unemployment tax forms   In the case of an incomplete request submitted with a copy of an invalid return document, the trustee must file a valid original return with the appropriate IRS office and submit a copy of that return with the corrected request when the request is re-filed. Unemployment tax forms Note. Unemployment tax forms An incomplete request includes those submitted with a copy of a return form, the original of which does not qualify as a valid return. Unemployment tax forms   The 60-day period to notify the trustee whether the return is accepted as filed or has been selected for examination does not begin to run until a complete request package is recei
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Procurement

Procurement At-a-Glance - Our dedicated acquisition professionals deliver world class, customer-focused acquisition services with the highest degree of integrity and the cooperative effort of our partners.


Small Business Program Office - The Internal Revenue Service (IRS) Small Business Program Office was established to assist small, HUBZone small, small disadvantaged, women-owned small, veteran-owned small and service disabled veteran-owned small businesses, to develop, grow, and ensure their long-term success.


Procurement Business Opportunities - The Procurement Office acquires the products and services required to support the IRS mission. We advertise commercial opportunities on Federal Business Opportunities (FedBizOpps) web site.


Justification for Other Than Full and Open Competition (JOFOC) - All open market JOFOCs exceeding the Simplified Acquisition Threshold (SAT) are posted on this web site in addition to being advertised on the Federal Business Opportunities (FedBizOpps) web site. (Some information may have been redacted to exclude proprietary information).


The American Recovery and Reinvestment Act of 2009 - The American Recovery and Reinvestment Act of 2009 (ARRA) – Approved on February 17, 2009, ARRA primarily provides supplemental appropriations for job preservation and creation, infrastructure investment, energy efficiency and science, assistance to the unemployed, and State and local fiscal stabilization. Hyperlinks to various procurement actions awarded using ARRA funds are included herein.

What's New at Procurement



11/01/2013JEFO - Renewal of Maintenance for Net App Mass Storage equipment in support of the SOI Program



09/26/2013 Post-Award Posting of JOFOC TIRSE-14-P-00003-Utilities



09/06/2013
Justification for an Exception to Fair Opportunity



08/22/2013
Solicitation No: D-3-D9-23-MA-I10 – Neopost Postage Meter Supplies



08/19/2013 TIRNO-13-C-00055 JOFOC Post Award

 

 

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Contractor Security - Contract employees assigned to work under IRS contracts must undergo investigative processing appropriate to the position sensitivity and risk level designation associated with the work to be performed, as described in the Department of the Treasury Security Manual (TD P 15-71). In support of this undertaking, the contractor shall furnish prescribed security forms and documentation to the Contractor Security Lifecycle Program (CSLP), within 10 business days of assigning (or reassigning) a contractor employee to an IRS contract and prior to the contract employee performing any work there under.


Publication 4812 - Contractor Security Controls - Functions as the standard for security controls to be employed by contractors who will have or need access to IRS information, and/or who will have or need access to, maintain or operate IRS information systems in order to perform or carry out and meet their contractual obligations. Publication 4812 is a &quotlayperson's guide&quot to NIST SP 800-53 when access to IRS information or information systems under contracts for services on behalf of the IRS is outside of IRS controlled facilities or the direct control of the Service (as opposed to Internal Revenue Manual 10.8.1 - Information Technology (IT) Security, Policy and Guidance, which applies when contractors are accessing IRS information and information systems at Government controlled facilities).


Contracts - Information about the Prime Modernization Contract and Prime Contract Outreach Information. Treasury-Wide Contracts ( Total Information Processing Support Services (TIPSS-4), and Treasury Commercial Vehicles (TCV) Blanket Purchase Agreements). Government-Wide Contracts Land Mobile Radio (LMR) Subscriber Unit.


Total Information Processing Support Services (TIPSS-4) - Discover more about the wide spectrum of Information Technology services that TIPSS-4 offers. Included you will find guidance, and useful information to help you acquire the right services to support your program goals and objectives.


Treasury Acquisition Institute (TAI) Training - The Treasury Acquisition Institute (TAI) was established by the Department of the Treasury and Internal Revenue Service in partnerships with other Treasury Bureaus on September 14, 1983. TAI was created to coordinate and lead Departmental and Bureau efforts to obtain the best training possible for their acquisition professionals.


Guides for Doing Business with the Government - Information on how to do business with the Federal Government.


Treasury Inspector General for Tax Administration (TIGTA) FAR Contractor Reporting - This link allows contractors to comply with the reporting requirements in the December 12, 2008, Federal Acquisition Regulation final rule. Specifically, contractors must use this process to satisfy the requirement that they notify TIGTA, in writing, whenever the contractor has credible evidence that a principal, employee, agent, or subcontractor of the Contractor has committed a violation of the civil False Claims Act or a violation of Federal criminal law involving fraud, conflict of interest, bribery, or gratuity violations in connection with the award, performance, or closeout of a contract or any related subcontract.


Useful Links - Links to various sites.


Procurement A..Z Index - Search for Procurement information alphabetically.



Questions about the Procurement information on this site, please contact the webmaster.


Contact the Office of Procurement for other Procurement related questions.

Page Last Reviewed or Updated: 19-Feb-2014

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