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Volunteer Income Tax Assistance Program

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Volunteer Income Tax Assistance Program

Volunteer income tax assistance program Publication 557 - Introductory Material Table of Contents What's New Reminders Introduction What's New Proposed regulations on “good faith determinations”. Volunteer income tax assistance program  Proposed regulations modify standards for making a good faith determination that a foreign organization is a charitable organization, grants to which may be qualifying distributions and not taxable expenditures. Volunteer income tax assistance program The proposed regulations identify a broader class of tax practitioners upon whose written advice a private foundation may base a “good faith determination. Volunteer income tax assistance program ” See, Proposed Regulations: Reliance Standards for Making Good Faith Determinations, REG-134974-12, 2012-47 I. Volunteer income tax assistance program R. Volunteer income tax assistance program B. Volunteer income tax assistance program 553. Volunteer income tax assistance program Prop. Volunteer income tax assistance program Regs. Volunteer income tax assistance program on Good Faith Determinations. Volunteer income tax assistance program New Requirements for section 501(c)(3) Hospitals Under the Affordable Care Act. Volunteer income tax assistance program  The Affordable Care Act (ACA), enacted March 23, 2010, added new requirements that hospital organizations must satisfy in order to be described in section 501(c)(3), as well as new reporting requirements and excise taxes. Volunteer income tax assistance program On June 22, 2012, the Service issued a notice of proposed rulemaking that addresses the new requirements enacted by the ACA applicable to section 501(c)(3) hospital organizations. Volunteer income tax assistance program See, Proposed Regulations: Additional Requirements for Charitable Hospitals, REG-13026-11, 77 Fed. Volunteer income tax assistance program Reg. Volunteer income tax assistance program 38148. Volunteer income tax assistance program On April 3, 2013, the Service issued proposed regulations on the ACA's community health needs assessment (CHNA) requirements. Volunteer income tax assistance program The proposed regulations also discuss the related reporting and excise tax requirements for charitable hospitals and the consequences for failure to satisfy the section 501(r) requirements. Volunteer income tax assistance program See, Proposed Regulations: Community Health Needs Assessments for Charitable Hospitals, REG-106499-12, 78 Fed. Volunteer income tax assistance program Reg. Volunteer income tax assistance program 20,523. Volunteer income tax assistance program Timing of when an Organization is exempt for Federal Tax Purposes. Volunteer income tax assistance program  As noted in section 2. Volunteer income tax assistance program 03(4) of Revenue Procedure 2013-9, 2013-2 I. Volunteer income tax assistance program R. Volunteer income tax assistance program B. Volunteer income tax assistance program 267, the provisions in section 11. Volunteer income tax assistance program 01 regarding the effect of determination letters or rulings recognizing exempt status of organizations described in section 501(c), other than sections 501(c)(3), (9), (17), and (29), have been revised. Volunteer income tax assistance program Prior to this year, and back to 1962, when such organizations applied for recognition, the IRS would usually recognize the organizations as tax exempt from the date of formation, no matter how long the interval between the date of formation and the date of application. Volunteer income tax assistance program In addition to the practical difficulties of ascertaining an organization's purposes and activities for this period, such recognition is now potentially inconsistent with the provisions of section 6033(j), which automatically revokes the exempt status of an organization that fails to file required Form 990 series returns or notices for three consecutive years. Volunteer income tax assistance program The new procedure adopts a practice similar to the rule for section 501(c)(3) organizations for these organizations, generally permitting recognition from the date of formation if the organization has: always met the requirements for exemption, has applied within 27 months from the end of the month in which it was organized, and has not failed to file required Form 990 series returns or notices for three consecutive years. Volunteer income tax assistance program Section 11. Volunteer income tax assistance program 01(3) notes: an organization that otherwise meets the requirements for tax-exempt status and the issuance of a determination letter or ruling that does not meet the requirements for recognition from date of formation will generally be recognized from the postmark date of its application. Volunteer income tax assistance program Exempt Organizations Select Check. Volunteer income tax assistance program  The IRS has developed an on-line search tool, Exempt Organizations Select Check, that allows users to select an exempt organization and check certain information about its federal tax status and filings. Volunteer income tax assistance program It consolidates three former search sites into one, providing expanded search capability and a more efficient way to search for organizations that: Are eligible to receive tax-deductible charitable contributions (Publication 78 data). Volunteer income tax assistance program Users may rely on this list in determining deductibility of contributions, just as they did when Publication 78 was a separate electronic publication rather than part of Select Check. Volunteer income tax assistance program Have had their tax-exempt status automatically revoked under the law because they have not filed Form 990 series returns or notices annually as required for three consecutive years (Auto-Revocation List). Volunteer income tax assistance program Have filed a Form 990-N (e-Postcard) annual electronic notice. Volunteer income tax assistance program  In addition to searching for a particular organization, users may download a complete list of each of the three types of organizations through Exempt Organizations Select Check. Volunteer income tax assistance program See also Revenue Procedure 2011-33, 2011-25 I. Volunteer income tax assistance program R. Volunteer income tax assistance program B. Volunteer income tax assistance program 887. Volunteer income tax assistance program Future developments. Volunteer income tax assistance program . Volunteer income tax assistance program  The IRS has created a page on IRS. Volunteer income tax assistance program gov for information about Publication 557, at www. Volunteer income tax assistance program irs. Volunteer income tax assistance program gov/pub557. Volunteer income tax assistance program Information about any future developments affecting Publication 557 (such as legislation enacted after we release it) will be posted on that page. Volunteer income tax assistance program Reminders The Patient Protection and Affordable Care Act (ACA). Volunteer income tax assistance program   The ACA added several new laws. Volunteer income tax assistance program This includes a new excise tax on indoor tanning services, a small business health care tax credit, additional requirements for tax-exempt hospitals, and the section 501(c)(29) CO-OP program. Volunteer income tax assistance program For more information, go to IRS. Volunteer income tax assistance program gov and select Affordable Care Act Tax Provisions. Volunteer income tax assistance program Electronic filing requirement for large organizations. Volunteer income tax assistance program  For tax years ending on or after December 31, 2006, only organizations that file 250 returns during the calendar year and that have total assets of $10 million or more are required to file Form 990 electronically. Volunteer income tax assistance program For more information, go to e-file for Charities and Non-Profits. Volunteer income tax assistance program Section 501(c)(15) gross receipts. Volunteer income tax assistance program   The definition of gross receipts for purposes of determining whether small insurance companies qualify as tax-exempt under section 501(c)(15) has changed. Volunteer income tax assistance program See Notice 2006-42, 2006-19 I. Volunteer income tax assistance program R. Volunteer income tax assistance program B. Volunteer income tax assistance program 878, Notice 2006-42. Volunteer income tax assistance program Prohibited tax shelter transactions. Volunteer income tax assistance program  New excise taxes are imposed under section 4965 on certain tax-exempt organizations entering into prohibited tax shelter transactions. Volunteer income tax assistance program See T. Volunteer income tax assistance program D. Volunteer income tax assistance program 9492, Excise Taxes on Prohibited Tax Shelter Transactions and Related Disclosure Requirements, 2010-33 I. Volunteer income tax assistance program R. Volunteer income tax assistance program B. Volunteer income tax assistance program 242. Volunteer income tax assistance program See IRS Issues Final Regulations Regarding Excise Taxes on Prohibited Tax Shelter Transactions and Related Disclosure Requirement. Volunteer income tax assistance program Pension Protection Act of 2006 tax changes. Volunteer income tax assistance program  The Pension Protection Act of 2006 made numerous changes to the tax law provisions affecting tax-exempt organizations. Volunteer income tax assistance program Unless otherwise noted, most of the changes became effective on August 17, 2006. Volunteer income tax assistance program For key provisions, go to The Pension Protection Act of 2006. Volunteer income tax assistance program Section 501(c)(3) organizations must make their Form 990-T, Exempt Organization Business Tax Return (and proxy tax under section 6033(e)), open for public inspection for a period of 3 years from the date the Form 990-T is required to be filed (determined with regard to any extension of time for filing) or is actually filed, whichever is later. Volunteer income tax assistance program There is an increase in excise taxes relating to public charities, social welfare organizations, and private foundations. Volunteer income tax assistance program There are additional standards for credit counseling organizations. Volunteer income tax assistance program The definition of convention or association of churches has been modified. Volunteer income tax assistance program Entities that are not required to file Form 990 or 990-EZ must file new Form 990-N, Electronic Notice (e-Postcard) for Tax-Exempt Organizations Not Required to File Form 990 or 990-EZ. Volunteer income tax assistance program The requirements of disclosure to state officials relating to exempt organizations has been modified. Volunteer income tax assistance program There are excise taxes imposed on excess benefit transactions involving donor advised funds and sponsoring organizations. Volunteer income tax assistance program There are new excise taxes on prohibited tax shelter transactions. Volunteer income tax assistance program There is a modification of recordkeeping requirements for certain charitable contributions. Volunteer income tax assistance program Introduction This publication discusses the rules and procedures for organizations that seek recognition of exemption from federal income tax under section 501(a) of the Internal Revenue Code (the Code). Volunteer income tax assistance program It explains the procedures you must follow to obtain an appropriate ruling or determination letter recognizing your organization's exemption, as well as certain other information that applies generally to all exempt organizations. Volunteer income tax assistance program To qualify for exemption under the Code, your organization must be organized for one or more of the purposes specifically designated in the Code. Volunteer income tax assistance program Organizations that are exempt under section 501(a) include those organizations described in section 501(c). Volunteer income tax assistance program Section 501(c) organizations are covered in this publication. Volunteer income tax assistance program Chapter 1, Application, Approval, and Appeal Procedures, provides general information about the procedures for obtaining recognition of tax-exempt status. Volunteer income tax assistance program Chapter 2, Filing Requirements and Required Disclosures, contains information about annual filing requirements and other matters that may affect your organization's tax-exempt status. Volunteer income tax assistance program Chapter 3, Section 501(c)(3) Organizations, contains detailed information on various matters affecting section 501(c)(3) organizations, including a section on the determination of private foundation status. Volunteer income tax assistance program Chapter 4, Other Section 501(c) Organizations, includes separate sections for specific types of organizations described in section 501(c). Volunteer income tax assistance program Chapter 5, Excise Taxes, provides information on when excise taxes may be imposed. Volunteer income tax assistance program Organizations not discussed in this publication. Volunteer income tax assistance program   Certain organizations that may qualify for exemption are not discussed in this publication, although they are included in the Organization Reference Chart. Volunteer income tax assistance program These organizations (and the Code sections that apply to them) are as follows. Volunteer income tax assistance program Corporations organized under Acts of Congress 501(c)(1) Teachers' retirement fund associations 501(c)(11) Mutual insurance companies 501(c)(15) Corporations organized to finance crop operations 501(c)(16) Employee funded pension trusts (created before June 25, 1959) 501(c)(18) Withdrawal liability payment fund 501(c)(22) Veterans' organizations (created before 1880) 501(c)(23) National Railroad Retirement Investment Trust 501(c)(28) Religious and apostolic associations 501(d) Cooperative hospital service organizations 501(e) Cooperative service organizations of operating educational organizations 501(f)   Section 501(c)(24) organizations (section 4049 ERISA trusts) are neither discussed in the text nor listed in the Organization Reference Chart. Volunteer income tax assistance program   Similarly, farmers' cooperative associations that qualify for exemption under section 521, qualified state tuition programs described in section 529, and pension, profit-sharing, and stock bonus plans described in section 401(a) are not discussed in this publication. Volunteer income tax assistance program If you think your organization falls within one of these categories, contact the IRS for any additional information you need. Volunteer income tax assistance program For telephone assistance, call 1-877-829-5500. Volunteer income tax assistance program   Check the Table of Contents at the beginning of this publication to determine whether your organization is described in this publication. Volunteer income tax assistance program If it is, read the chapter (or section) that applies to your type of organization for the specific information you must give when applying for recognition of exemption. Volunteer income tax assistance program Organization Reference Chart. Volunteer income tax assistance program   The Organization Reference Chart enables you to locate at a glance the section of the Code under which your organization might qualify for exemption. Volunteer income tax assistance program It also shows the required application form and, if your organization meets the exemption requirements, the annual return to be filed (if any), and whether or not a contribution to your organization will be deductible by a donor. Volunteer income tax assistance program It also describes each type of qualifying organization and the general nature of its activities. Volunteer income tax assistance program   You may use the Organization Reference Chart to determine the Code section that you think applies to your organization. Volunteer income tax assistance program Any correspondence with the IRS (in requesting forms or otherwise) will be expedited if you indicate in your correspondence the appropriate Code section. Volunteer income tax assistance program Check the IRS website, IRS. Volunteer income tax assistance program gov, for the latest updates, Tax Information for Charities & Other Non-Profits, www. Volunteer income tax assistance program irs. Volunteer income tax assistance program gov/charities/index. Volunteer income tax assistance program html. Volunteer income tax assistance program Comments and suggestions. Volunteer income tax assistance program   We welcome your comments about this publication and your suggestions for future editions. Volunteer income tax assistance program   You can e-mail us while visiting our website at IRS. Volunteer income tax assistance program gov. Volunteer income tax assistance program   You can send your comments to us at the following address: Internal Revenue Service Tax Forms and Publications Division 1111 Constitution Ave. Volunteer income tax assistance program NW, IR-6526 Washington, DC 20224   We respond to many letters by telephone. Volunteer income tax assistance program Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence. Volunteer income tax assistance program   If you wish telephone assistance, please call 1-877-829-5500. Volunteer income tax assistance program This toll-free telephone service is available Monday through Friday. Volunteer income tax assistance program Prev  Up  Next   Home   More Online Publications
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Tax Relief for Victims of Severe Storms, Tornadoes, Flooding, Mudslides and Landslides in West Virginia

Updated 4/19/2012 to include Harrison, Preston and Wayne counties

WVA-2012-1, March 19, 2012

CHARLESTON — Victims of the severe storms, tornadoes, flooding, mudslides and landslides that began on Feb. 29, 2012 in parts of West Virginia may qualify for tax relief from the Internal Revenue Service.

The President has declared Harrison, Lincoln, Marion, Preston, Taylor and Wayne counties a federal disaster area. Individuals who reside or have a business in these counties may qualify for tax relief.

The declaration permits the IRS to postpone certain deadlines for taxpayers who reside or have a business in the disaster area. For instance, certain deadlines falling on or after Feb. 29, and on or before May 31, have been postponed to May 31, 2012. This includes the April 17 deadline for filing 2011 individual income tax returns, making income tax payments and making 2011 contributions to an individual retirement account (IRA).  

In addition, the IRS is waiving the failure-to-deposit penalties for employment and excise tax deposits due on or after Feb. 29, and on or before March 15, as long as the deposits are made by March 15, 2012.

If an affected taxpayer receives a penalty notice from the IRS, the taxpayer should call the telephone number on the notice to have the IRS abate any interest and any late filing or late payment penalties that would otherwise apply. Penalties or interest will be abated only for taxpayers who have an original or extended filing, payment or deposit due date, including an extended filing or payment due date, that falls within the postponement period.

The IRS automatically identifies taxpayers located in the covered disaster area and applies automatic filing and payment relief. But affected taxpayers who reside or have a business located outside the covered disaster area must call the IRS disaster hotline at 866-562-5227 to request this tax relief.

Covered Disaster Area

The counties listed above constitute a covered disaster area for purposes of Treas. Reg. § 301.7508A-1(d)(2) and are entitled to the relief detailed below.

Affected Taxpayers

Taxpayers considered to be affected taxpayers eligible for the postponement of time to file returns, pay taxes and perform other time-sensitive acts are those taxpayers listed in Treas. Reg. § 301.7508A-1(d)(1), and include individuals who live, and businesses whose principal place of business is located, in the covered disaster area. Taxpayers not in the covered disaster area, but whose records necessary to meet a deadline listed in Treas. Reg. § 301.7508A-1(c) are in the covered disaster area, are also entitled to relief. In addition, all relief workers affiliated with a recognized government or philanthropic organization assisting in the relief activities in the covered disaster area and any individual visiting the covered disaster area who was killed or injured as a result of the disaster are entitled to relief.

Grant of Relief

Under section 7508A, the IRS gives affected taxpayers until May 31 to file most tax returns (including individual, corporate, and estate and trust income tax returns; partnership returns, S corporation returns, and trust returns; estate, gift, and generation-skipping transfer tax returns; and employment and certain excise tax returns), or to make tax payments, including estimated tax payments, that have either an original or extended due date occurring on or after Feb. 29 and on or before May 31.

The IRS also gives affected taxpayers until May 31 to perform other time-sensitive actions described in Treas. Reg. § 301.7508A-1(c)(1) and Rev. Proc. 2007-56, 2007-34 I.R.B. 388 (Aug. 20, 2007), that are due to be performed on or after Feb. 29 and on or before May 31.

This relief also includes the filing of Form 5500 series returns, in the manner described in section 8 of Rev. Proc. 2007-56. The relief described in section 17 of Rev. Proc. 2007-56, pertaining to like-kind exchanges of property, also applies to certain taxpayers who are not otherwise affected taxpayers and may include acts required to be performed before or after the period above.

The postponement of time to file and pay does not apply to information returns in the W-2, 1098, 1099 series, or to Forms 1042-S or 8027. Penalties for failure to timely file information returns can be waived under existing procedures for reasonable cause. Likewise, the postponement does not apply to employment and excise tax deposits. The IRS, however, will abate penalties for failure to make timely employment and excise tax deposits due on or after Feb. 29 and on or before March 15 provided the taxpayer makes these deposits by March 15.

Casualty Losses

Affected taxpayers in a federally declared disaster area have the option of claiming disaster-related casualty losses on their federal income tax return for either this year or last year. Claiming the loss on an original or amended return for last year will get the taxpayer an earlier refund, but waiting to claim the loss on this year’s return could result in a greater tax saving, depending on other income factors.

Individuals may deduct personal property losses that are not covered by insurance or other reimbursements. For details, see Form 4684 and its instructions.

Affected taxpayers claiming the disaster loss on last year’s return should put the Disaster Designation “West Virginia/Severe Storms, Tornadoes, Flooding, Mudslides, and Landslides” at the top of the form so that the IRS can expedite the processing of the refund.

Other Relief

The IRS will waive the usual fees and expedite requests for copies of previously filed tax returns for affected taxpayers. Taxpayers should put the assigned Disaster Designation in red ink at the top of Form 4506, Request for Copy of Tax Return, or Form 4506-T, Request for Transcript of Tax Return, as appropriate, and submit it to the IRS.

Affected taxpayers who are contacted by the IRS on a collection or examination matter should explain how the disaster impacts them so that the IRS can provide appropriate consideration to their case.

Taxpayers may download forms and publications from the official IRS website, irs.gov, or order them by calling 800-TAX-FORM (800-829-3676). The IRS toll-free number for general tax questions is 800-829-1040.

Related Information

Page Last Reviewed or Updated: 06-Mar-2014

The Volunteer Income Tax Assistance Program

Volunteer income tax assistance program 4. Volunteer income tax assistance program   Reporting Gains and Losses Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: Information Returns Schedule D and Form 8949Long and Short Term Net Gain or Loss Treatment of Capital Losses Capital Gains Tax Rates Form 4797Mark-to-market election. Volunteer income tax assistance program Introduction This chapter explains how to report capital gains and losses and ordinary gains and losses from sales, exchanges, and other dispositions of property. Volunteer income tax assistance program Although this discussion refers to Schedule D (Form 1040) and Form 8949, many of the rules discussed here also apply to taxpayers other than individuals. Volunteer income tax assistance program However, the rules for property held for personal use usually will not apply to taxpayers other than individuals. Volunteer income tax assistance program Topics - This chapter discusses: Information returns Schedule D (Form 1040) Form 4797 Form 8949 Useful Items - You may want to see: Publication 550 Investment Income and Expenses 537 Installment Sales Form (and Instructions) Schedule D (Form 1040) Capital Gains and Losses 1099-B Proceeds From Broker and Barter Exchange Transactions 1099-S Proceeds From Real Estate Transactions 4684 Casualties and Thefts 4797 Sales of Business Property 6252 Installment Sale Income 6781 Gains and Losses from Section 1256 Contracts and Straddles 8824 Like-Kind Exchanges 8949 Sales and Other Dispositions of Capital Assets See chapter 5 for information about getting publications and forms. Volunteer income tax assistance program Information Returns If you sell or exchange certain assets, you should receive an information return showing the proceeds of the sale. Volunteer income tax assistance program This information is also provided to the IRS. Volunteer income tax assistance program Form 1099-B. Volunteer income tax assistance program   If you sold property, such as stocks, bonds, or certain commodities, through a broker, you should receive Form 1099-B, Proceeds From Broker and Barter Exchange Transactions, or a substitute statement from the broker. Volunteer income tax assistance program Use the Form 1099-B or a substitute statement to complete Form 8949 and/or Schedule D. Volunteer income tax assistance program Whether or not you receive 1099-B, you must report all taxable sales of stock, bonds, commodities, etc. Volunteer income tax assistance program on Form 8949 and/or Schedule D, as applicable. Volunteer income tax assistance program For more information on figuring gains and losses from these transactions, see chapter 4 in Publication 550. Volunteer income tax assistance program For information on reporting the gains and losses, see the Instructions for Form 8949 and the Instructions for Schedule D (Form 1040). Volunteer income tax assistance program Form 1099-S. Volunteer income tax assistance program   An information return must be provided on certain real estate transactions. Volunteer income tax assistance program Generally, the person responsible for closing the transaction (the “real estate reporting person”) must report on Form 1099-S sales or exchanges of the following types of property. Volunteer income tax assistance program Land (improved or unimproved), including air space. Volunteer income tax assistance program An inherently permanent structure, including any residential, commercial, or industrial building. Volunteer income tax assistance program A condominium unit and its related fixtures and common elements (including land). Volunteer income tax assistance program Stock in a cooperative housing corporation. Volunteer income tax assistance program If you sold or exchanged any of the above types of property, the “real estate reporting person” must give you a copy of Form 1099-S or a statement containing the same information as the Form 1099-S. Volunteer income tax assistance program The “real estate reporting person” could include the buyer's attorney, your attorney, the title or escrow company, a mortgage lender, your broker, the buyer's broker, or the person acquiring the biggest interest in the property. Volunteer income tax assistance program   For more information see chapter 4 in Publication 550. Volunteer income tax assistance program Also, see the Instructions for Form 8949. Volunteer income tax assistance program Schedule D and Form 8949 Form 8949. Volunteer income tax assistance program   Individuals, corporations, and partnerships, use Form 8949 to report the following. Volunteer income tax assistance program    Sales or exchanges of capital assets, including stocks, bonds, etc. Volunteer income tax assistance program , and real estate (if not reported on another form or schedule such as Form 4684, 4797, 6252, 6781, or 8824). Volunteer income tax assistance program Include these transactions even if you did not receive a Form 1099-B or 1099-S. Volunteer income tax assistance program Gains from involuntary conversions (other than from casualty or theft) of capital assets not held for business or profit. Volunteer income tax assistance program Nonbusiness bad debts. Volunteer income tax assistance program   Individuals, If you are filing a joint return, complete as many copies of Form 8949 as you need to report all of your and your spouse's transactions. Volunteer income tax assistance program You and your spouse may list your transactions on separate forms or you may combine them. Volunteer income tax assistance program However, you must include on your Schedule D the totals from all Forms 8949 for both you and your spouse. Volunteer income tax assistance program    Corporations and electing large partnerships also use Form 8949 to report their share of gain or loss from a partnership, S Corporation, estate or trust. Volunteer income tax assistance program   Business entities meeting certain criteria, may have an exception to some of the normal requirements for completing Form 8949. Volunteer income tax assistance program See the Instructions for Form 8949. Volunteer income tax assistance program Schedule D. Volunteer income tax assistance program    Use Schedule D (Form 1040) to figure the overall gain or loss from transactions reported on Form 8949, and to report certain transactions you do not have to report on Form 8949. Volunteer income tax assistance program Before completing Schedule D, you may have to complete other forms as shown below. Volunteer income tax assistance program    Complete all applicable lines of Form 8949 before completing lines 1b, 2, 3, 8b, 9, or 10 of your applicable Schedule D. Volunteer income tax assistance program Enter on Schedule D the combined totals from all your Forms 8949. Volunteer income tax assistance program For a sale, exchange, or involuntary conversion of business property, complete Form 4797 (discussed later). Volunteer income tax assistance program For a like-kind exchange, complete Form 8824. Volunteer income tax assistance program See Reporting the exchange under Like-Kind Exchanges in chapter 1. Volunteer income tax assistance program For an installment sale, complete Form 6252. Volunteer income tax assistance program See Publication 537. Volunteer income tax assistance program For an involuntary conversion due to casualty or theft, complete Form 4684. Volunteer income tax assistance program See Publication 547, Casualties, Disasters, and Thefts. Volunteer income tax assistance program For a disposition of an interest in, or property used in, an activity to which the at-risk rules apply, complete Form 6198, At-Risk Limitations. Volunteer income tax assistance program See Publication 925, Passive Activity and At-Risk Rules. Volunteer income tax assistance program For a disposition of an interest in, or property used in, a passive activity, complete Form 8582, Passive Activity Loss Limitations. Volunteer income tax assistance program See Publication 925. Volunteer income tax assistance program For gains and losses from section 1256 contracts and straddles, complete Form 6781. Volunteer income tax assistance program See Publication 550. Volunteer income tax assistance program Personal-use property. Volunteer income tax assistance program   Report gain on the sale or exchange of property held for personal use (such as your home) on Form 8949 and Schedule D (Form 1040), as applicable. Volunteer income tax assistance program Loss from the sale or exchange of property held for personal use is not deductible. Volunteer income tax assistance program But if you had a loss from the sale or exchange of real estate held for personal use for which you received a Form 1099-S, report the transaction on Form 8949 and Schedule D, even though the loss is not deductible. Volunteer income tax assistance program See the Instructions for Schedule D (Form 1040) and the Instructions for Form 8949 for information on how to report the transaction. Volunteer income tax assistance program Long and Short Term Where you report a capital gain or loss depends on how long you own the asset before you sell or exchange it. Volunteer income tax assistance program The time you own an asset before disposing of it is the holding period. Volunteer income tax assistance program If you received a Form 1099-B, (or substitute statement) box 1c may help you determine whether the gain or loss is short-term or long-term. Volunteer income tax assistance program If you hold a capital asset 1 year or less, the gain or loss from its disposition is short term. Volunteer income tax assistance program Report it in Part I of Form 8949 and/or Schedule D, as applicable. Volunteer income tax assistance program If you hold a capital asset longer than 1 year, the gain or loss from its disposition is long term. Volunteer income tax assistance program Report it in Part II of Form 8949 and/or Schedule D, as applicable. Volunteer income tax assistance program   Table 4-1. Volunteer income tax assistance program Do I Have a Short-Term or Long-Term Gain or Loss? IF you hold the property. Volunteer income tax assistance program . Volunteer income tax assistance program . Volunteer income tax assistance program  THEN you have a. Volunteer income tax assistance program . Volunteer income tax assistance program . Volunteer income tax assistance program 1 year or less, Short-term capital gain or  loss. Volunteer income tax assistance program More than 1 year, Long-term capital gain or  loss. Volunteer income tax assistance program These distinctions are essential to correctly arrive at your net capital gain or loss. Volunteer income tax assistance program Capital losses are allowed in full against capital gains plus up to $3,000 of ordinary income. Volunteer income tax assistance program See Capital Gains Tax Rates, later. Volunteer income tax assistance program Holding period. Volunteer income tax assistance program   To figure if you held property longer than 1 year, start counting on the day following the day you acquired the property. Volunteer income tax assistance program The day you disposed of the property is part of your holding period. Volunteer income tax assistance program Example. Volunteer income tax assistance program If you bought an asset on June 19, 2012, you should start counting on June 20, 2012. Volunteer income tax assistance program If you sold the asset on June 19, 2013, your holding period is not longer than 1 year, but if you sold it on June 20, 2013, your holding period is longer than 1 year. Volunteer income tax assistance program Patent property. Volunteer income tax assistance program   If you dispose of patent property, you generally are considered to have held the property longer than 1 year, no matter how long you actually held it. Volunteer income tax assistance program For more information, see Patents in chapter 2. Volunteer income tax assistance program Inherited property. Volunteer income tax assistance program   If you inherit property, you are considered to have held the property longer than 1 year, regardless of how long you actually held it. Volunteer income tax assistance program Installment sale. Volunteer income tax assistance program   The gain from an installment sale of an asset qualifying for long-term capital gain treatment in the year of sale continues to be long term in later tax years. Volunteer income tax assistance program If it is short term in the year of sale, it continues to be short term when payments are received in later tax years. Volunteer income tax assistance program    The date the installment payment is received determines the capital gains rate that should be applied not the date the asset was sold under an installment contract. Volunteer income tax assistance program Nontaxable exchange. Volunteer income tax assistance program   If you acquire an asset in exchange for another asset and your basis for the new asset is figured, in whole or in part, by using your basis in the old property, the holding period of the new property includes the holding period of the old property. Volunteer income tax assistance program That is, it begins on the same day as your holding period for the old property. Volunteer income tax assistance program Example. Volunteer income tax assistance program You bought machinery on December 4, 2012. Volunteer income tax assistance program On June 4, 2013, you traded this machinery for other machinery in a nontaxable exchange. Volunteer income tax assistance program On December 5, 2013, you sold the machinery you got in the exchange. Volunteer income tax assistance program Your holding period for this machinery began on December 5, 2012. Volunteer income tax assistance program Therefore, you held it longer than 1 year. Volunteer income tax assistance program Corporate liquidation. Volunteer income tax assistance program   The holding period for property you receive in a liquidation generally starts on the day after you receive it if gain or loss is recognized. Volunteer income tax assistance program Profit-sharing plan. Volunteer income tax assistance program   The holding period of common stock withdrawn from a qualified contributory profit-sharing plan begins on the day following the day the plan trustee delivered the stock to the transfer agent with instructions to reissue the stock in your name. Volunteer income tax assistance program Gift. Volunteer income tax assistance program   If you receive a gift of property and your basis in it is figured using the donor's basis, your holding period includes the donor's holding period. Volunteer income tax assistance program For more information on basis, see Publication 551, Basis of Assets. Volunteer income tax assistance program Real property. Volunteer income tax assistance program   To figure how long you held real property, start counting on the day after you received title to it or, if earlier, the day after you took possession of it and assumed the burdens and privileges of ownership. Volunteer income tax assistance program   However, taking possession of real property under an option agreement is not enough to start the holding period. Volunteer income tax assistance program The holding period cannot start until there is an actual contract of sale. Volunteer income tax assistance program The holding period of the seller cannot end before that time. Volunteer income tax assistance program Repossession. Volunteer income tax assistance program   If you sell real property but keep a security interest in it and then later repossess it, your holding period for a later sale includes the period you held the property before the original sale, as well as the period after the repossession. Volunteer income tax assistance program Your holding period does not include the time between the original sale and the repossession. Volunteer income tax assistance program That is, it does not include the period during which the first buyer held the property. Volunteer income tax assistance program Nonbusiness bad debts. Volunteer income tax assistance program   Nonbusiness bad debts are short-term capital losses. Volunteer income tax assistance program For information on nonbusiness bad debts, see chapter 4 of Publication 550. Volunteer income tax assistance program    Net Gain or Loss The totals for short-term capital gains and losses and the totals for long-term capital gains and losses must be figured separately. Volunteer income tax assistance program Net short-term capital gain or loss. Volunteer income tax assistance program   Combine your short-term capital gains and losses, including your share of short-term capital gains or losses from partnerships, S corporations, and fiduciaries and any short-term capital loss carryover. Volunteer income tax assistance program Do this by adding all your short-term capital gains. Volunteer income tax assistance program Then add all your short-term capital losses. Volunteer income tax assistance program Subtract the lesser total from the other. Volunteer income tax assistance program The result is your net short-term capital gain or loss. Volunteer income tax assistance program Net long-term capital gain or loss. Volunteer income tax assistance program   Follow the same steps to combine your long-term capital gains and losses. Volunteer income tax assistance program Include the following items. Volunteer income tax assistance program Net section 1231 gain from Part I, Form 4797, after any adjustment for nonrecaptured section 1231 losses from prior tax years. Volunteer income tax assistance program Capital gain distributions from regulated investment companies (mutual funds) and real estate investment trusts. Volunteer income tax assistance program Your share of long-term capital gains or losses from partnerships, S corporations, and fiduciaries. Volunteer income tax assistance program Any long-term capital loss carryover. Volunteer income tax assistance program The result from combining these items with other long-term capital gains and losses is your net long-term capital gain or loss. Volunteer income tax assistance program Net gain. Volunteer income tax assistance program   If the total of your capital gains is more than the total of your capital losses, the difference is taxable. Volunteer income tax assistance program Different tax rates may apply to the part that is a net capital gain. Volunteer income tax assistance program See Capital Gains Tax Rates, later. Volunteer income tax assistance program Net loss. Volunteer income tax assistance program   If the total of your capital losses is more than the total of your capital gains, the difference is deductible. Volunteer income tax assistance program But there are limits on how much loss you can deduct and when you can deduct it. Volunteer income tax assistance program See Treatment of Capital Losses, next. Volunteer income tax assistance program    Treatment of Capital Losses If your capital losses are more than your capital gains, you can deduct the difference as a capital loss deduction even if you do not have ordinary income to offset it. Volunteer income tax assistance program The yearly limit on the amount of the capital loss you can deduct is $3,000 ($1,500 if you are married and file a separate return). Volunteer income tax assistance program Table 4-2. Volunteer income tax assistance program Holding Period for Different Types of Acquisitions Type of acquisition: When your holding period starts: Stocks and bonds bought on a securities market Day after trading date you bought security. Volunteer income tax assistance program Ends on trading date you sold security. Volunteer income tax assistance program U. Volunteer income tax assistance program S. Volunteer income tax assistance program Treasury notes and bonds If bought at auction, day after notification of bid acceptance. Volunteer income tax assistance program If bought through subscription, day after subscription was submitted. Volunteer income tax assistance program Nontaxable exchanges Day after date you acquired old property. Volunteer income tax assistance program Gift If your basis is giver's adjusted basis, same day as giver's holding period began. Volunteer income tax assistance program If your basis is FMV, day after date of gift. Volunteer income tax assistance program Real property bought Generally, day after date you received title to the property. Volunteer income tax assistance program Real property repossessed Day after date you originally received title to the property, but does not include time between the original sale and date of repossession. Volunteer income tax assistance program Capital loss carryover. Volunteer income tax assistance program   Generally, you have a capital loss carryover if either of the following situations applies to you. Volunteer income tax assistance program Your net loss is more than the yearly limit. Volunteer income tax assistance program Your taxable income without your deduction for exemptions is less than zero. Volunteer income tax assistance program If either of these situations applies to you for 2013, see Capital Losses under Reporting Capital Gains and Losses in chapter 4 of Publication 550 to figure the amount you can carryover to 2014. Volunteer income tax assistance program Example. Volunteer income tax assistance program Bob and Gloria Sampson sold property in 2013. Volunteer income tax assistance program The sale resulted in a capital loss of $7,000. Volunteer income tax assistance program The Sampsons had no other capital transactions. Volunteer income tax assistance program On their joint 2013 return, the Sampsons deduct $3,000, the yearly limit. Volunteer income tax assistance program They had taxable income of $2,000. Volunteer income tax assistance program The unused part of the loss, $4,000 ($7,000 − $3,000), is carried over to 2014. Volunteer income tax assistance program If the Sampsons' capital loss had been $2,000, it would not have been more than the yearly limit. Volunteer income tax assistance program Their capital loss deduction would have been $2,000. Volunteer income tax assistance program They would have no carryover to 2014. Volunteer income tax assistance program Short-term and long-term losses. Volunteer income tax assistance program   When you carry over a loss, it retains its original character as either long term or short term. Volunteer income tax assistance program A short-term loss you carry over to the next tax year is added to short-term losses occurring in that year. Volunteer income tax assistance program A long-term loss you carry over to the next tax year is added to long-term losses occurring in that year. Volunteer income tax assistance program A long-term capital loss you carry over to the next year reduces that year's long-term gains before its short-term gains. Volunteer income tax assistance program   If you have both short-term and long-term losses, your short-term losses are used first against your allowable capital loss deduction. Volunteer income tax assistance program If, after using your short-term losses, you have not reached the limit on the capital loss deduction, use your long-term losses until you reach the limit. Volunteer income tax assistance program To figure your capital loss carryover from 2013 to 2014 use the Capital Loss Carryover Worksheet in the 2013 Instructions for Schedule D (Form 1040). Volunteer income tax assistance program Joint and separate returns. Volunteer income tax assistance program   On a joint return, the capital gains and losses of spouses are figured as the gains and losses of an individual. Volunteer income tax assistance program If you are married and filing a separate return, your yearly capital loss deduction is limited to $1,500. Volunteer income tax assistance program Neither you nor your spouse can deduct any part of the other's loss. Volunteer income tax assistance program   If you and your spouse once filed separate returns and are now filing a joint return, combine your separate capital loss carryovers. Volunteer income tax assistance program However, if you and your spouse once filed jointly and are now filing separately, any capital loss carryover from the joint return can be deducted only on the return of the spouse who actually had the loss. Volunteer income tax assistance program Death of taxpayer. Volunteer income tax assistance program   Capital losses cannot be carried over after a taxpayer's death. Volunteer income tax assistance program They are deductible only on the final income tax return filed on the decedent's behalf. Volunteer income tax assistance program The yearly limit discussed earlier still applies in this situation. Volunteer income tax assistance program Even if the loss is greater than the limit, the decedent's estate cannot deduct the difference or carry it over to following years. Volunteer income tax assistance program Corporations. Volunteer income tax assistance program   A corporation can deduct capital losses only up to the amount of its capital gains. Volunteer income tax assistance program In other words, if a corporation has a net capital loss, it cannot be deducted in the current tax year. Volunteer income tax assistance program It must be carried to other tax years and deducted from capital gains occurring in those years. Volunteer income tax assistance program For more information, see Publication 542. Volunteer income tax assistance program Capital Gains Tax Rates The tax rates that apply to a net capital gain are generally lower than the tax rates that apply to other income. Volunteer income tax assistance program These lower rates are called the maximum capital gains rates. Volunteer income tax assistance program The term “net capital gain” means the amount by which your net long-term capital gain for the year is more than your net short-term capital loss. Volunteer income tax assistance program For 2013, the maximum tax rates for individuals are 0%, 15%, 20%, 25%, and 28%. Volunteer income tax assistance program Also, individuals, use the Qualified Dividends and Capital Gain Worksheet in the Instructions for Form 1040, or the Schedule D Tax Computation Worksheet in the Instructions for Schedule D (Form 1040) (whichever applies) to figure your tax if you have qualified dividends or net capital gain. Volunteer income tax assistance program For more information, see chapter 4 of Publication 550. Volunteer income tax assistance program Also see the Instructions for Schedule D (Form 1040). Volunteer income tax assistance program Unrecaptured section 1250 gain. Volunteer income tax assistance program   Generally, this is the part of any long-term capital gain on section 1250 property (real property) that is due to depreciation. Volunteer income tax assistance program Unrecaptured section 1250 gain cannot be more than the net section 1231 gain or include any gain otherwise treated as ordinary income. Volunteer income tax assistance program Use the worksheet in the Schedule D instructions to figure your unrecaptured section 1250 gain. Volunteer income tax assistance program For more information about section 1250 property and net section 1231 gain, see chapter 3. Volunteer income tax assistance program Form 4797 Use Form 4797 to report: The sale or exchange of: Property used in your trade or business; Depreciable and amortizable property; Oil, gas, geothermal, or other mineral properties; and Section 126 property. Volunteer income tax assistance program The involuntary conversion (from other than casualty or theft) of property used in your trade or business and capital assets held in connection with a trade or business or a transaction entered into for profit. Volunteer income tax assistance program The disposition of noncapital assets (other than inventory or property held primarily for sale to customers in the ordinary course of your trade or business). Volunteer income tax assistance program The disposition of capital assets not reported on Schedule D. Volunteer income tax assistance program The gain or loss (including any related recapture) for partners and S corporation shareholders from certain section 179 property dispositions by partnerships (other than electing large partnerships) and S corporations. Volunteer income tax assistance program The computation of recapture amounts under sections 179 and 280F(b)(2) when the business use of section 179 or listed property decreases to 50% or less. Volunteer income tax assistance program Gains or losses treated as ordinary gains or losses, if you are a trader in securities or commodities and made a mark-to-market election under Internal Revenue Code section 475(f). Volunteer income tax assistance program You can use Form 4797 with Form 1040, 1065, 1120, or 1120S. Volunteer income tax assistance program Section 1231 gains and losses. Volunteer income tax assistance program   Show any section 1231 gains and losses in Part I. Volunteer income tax assistance program Carry a net gain to Schedule D (Form 1040) as a long-term capital gain. Volunteer income tax assistance program Carry a net loss to Part II of Form 4797 as an ordinary loss. Volunteer income tax assistance program   If you had any nonrecaptured net section 1231 losses from the preceding 5 tax years, reduce your net gain by those losses and report the amount of the reduction as an ordinary gain in Part II. Volunteer income tax assistance program Report any remaining gain on Schedule D (Form 1040). Volunteer income tax assistance program See Section 1231 Gains and Losses in chapter 3. Volunteer income tax assistance program Ordinary gains and losses. Volunteer income tax assistance program   Show any ordinary gains and losses in Part II. Volunteer income tax assistance program This includes a net loss or a recapture of losses from prior years figured in Part I of Form 4797. Volunteer income tax assistance program It also includes ordinary gain figured in Part III. Volunteer income tax assistance program Mark-to-market election. Volunteer income tax assistance program   If you made a mark-to-market election, you should report all gains and losses from trading as ordinary gains and losses in Part II of Form 4797, instead of as capital gains and losses on Form 8949 and Schedule D (Form 1040). Volunteer income tax assistance program See the Instructions for Form 4797. Volunteer income tax assistance program Also see Special Rules for Traders in Securities, in chapter 4 of Publication 550. Volunteer income tax assistance program Ordinary income from depreciation. Volunteer income tax assistance program   Figure the ordinary income from depreciation on personal property and additional depreciation on real property (as discussed in chapter 3) in Part III. Volunteer income tax assistance program Carry the ordinary income to Part II of Form 4797 as an ordinary gain. Volunteer income tax assistance program Carry any remaining gain to Part I as section 1231 gain, unless it is from a casualty or theft. Volunteer income tax assistance program Carry any remaining gain from a casualty or theft to Form 4684. Volunteer income tax assistance program Prev  Up  Next   Home   More Online Publications