Filing Your Taxes Online is Fast, Easy and Secure.
Start now and receive your tax refund in as little as 7 days.

1. Get Answers

Your online questions are customized to your unique tax situation.

2. Maximize your Refund

Find tax credits for everything from school tuition to buying a hybri

3. E-File for FREE

E-file free with direct deposit to get your refund in as few as 7 days.

Filing your taxes with paper mail can be difficult and it could take weeks for your refund to arrive. IRS e-file is easy, fast and secure. There is no paperwork going to the IRS so tax refunds can be processed in as little as 7 days with direct deposit. As you prepare your taxes online, you can see your tax refund in real time.

FREE audit support and representation from an enrolled agent – NEW and only from H&R Block

1040 Schedule A Tax Form

H&r Block FreeFile Taxes Online For FreeIrs Form 1040ez 2011How To Do State Taxes1040ez Form PrintableFiling Late Taxes For 2011Free Tax Calculator 20121040 State Tax FormTaxes Free OnlineDo My 2007 Taxes OnlinePrintable Tax Form 1040xFile Free 2012 Tax ReturnHow To Ammend Your TaxesFree E File Federal And State TaxesFree State Tax PreparationHow To File Taxes For Self Employment IncomeTaxact 2008 Free DownloadTax Filing 2014Can I Still File My 2011 Taxes OnlineHow To File State Taxes For FreeAmend 2012 TaxesWww FreetaxusaAmend Tax Return Online FreeWhere To File My 2011 Tax ReturnFree Taxact 2011Tax Forms 1040 Ez1o40 Ez FormWww Irs Gov Amended Return1040x 20132012 Ez Tax FormCan You File An Amended Tax Return Online2012 Federal Income TaxFile Taxes Online Free 2011How To File A 2011 Tax Return LateMichigan 1040ez 2013Can You Still E File 2011 Tax ReturnsFree Tax Filing 2012File 2012 Taxes Late OnlineFree Tax Filing For Seniors1040nr Ez

1040 Schedule A Tax Form

1040 schedule a tax form Publication 939 - Introductory Material Table of Contents What's New Future developments. 1040 schedule a tax form IntroductionSimplified Method. 1040 schedule a tax form Ordering forms and publications. 1040 schedule a tax form Tax questions. 1040 schedule a tax form Useful Items - You may want to see: What's New Beginning in 2013, distributions from an annuity under a nonqualified plan are considered net investment income for the purpose of figuring the net investment income tax (NIIT). 1040 schedule a tax form For more information, see the instructions for Form 8960, Net Investment Income Tax – Individuals, Estates and Trusts. 1040 schedule a tax form Future developments. 1040 schedule a tax form For the latest information about developments related to Publication 939, such as legislation enacted after it was published, go to www. 1040 schedule a tax form IRS. 1040 schedule a tax form gov/pub939. 1040 schedule a tax form Introduction This publication gives you the information you need to determine the tax treatment of your pension and annuity income under the General Rule. 1040 schedule a tax form Generally, each of your monthly annuity payments is made up of two parts: the tax-free part that is a return of your net cost, and the taxable balance. 1040 schedule a tax form What is the General Rule. 1040 schedule a tax form   The General Rule is one of the two methods used to figure the tax-free part of each annuity payment based on the ratio of your investment in the contract to the total expected return. 1040 schedule a tax form The other method is the Simplified Method, which is discussed in Publication 575, Pension and Annuity Income. 1040 schedule a tax form Who must use the General Rule. 1040 schedule a tax form   Use this publication if you receive pension or annuity payments from: A nonqualified plan (for example, a private annuity, a purchased commercial annuity, or a nonqualified employee plan), A qualified plan if: Your annuity starting date is before November 19, 1996 (and after July 1, 1986), and you do not qualify to use, or did not choose to use, the Simplified Method, or Your annuity starting date is after November 18, 1996, and as of that date you are age 75 or over and the annuity payments are guaranteed for at least 5 years. 1040 schedule a tax form If your annuity starting date was between July 1, 1986 and November 19, 1996, you were able to elect to use the Simplified Method or the General Rule. 1040 schedule a tax form This choice is irrevocable and applied to all later annuity payments. 1040 schedule a tax form The following are qualified plans. 1040 schedule a tax form A qualified employee plan. 1040 schedule a tax form A qualified employee annuity. 1040 schedule a tax form A tax-sheltered annuity (TSA) plan or contract. 1040 schedule a tax form Simplified Method. 1040 schedule a tax form   If you receive pension or annuity payments from a qualified plan and you are not required to use the General Rule, you must use the Simplified Method to determine the tax-free part of each annuity payment. 1040 schedule a tax form This method is described in Publication 575, Pension and Annuity Income. 1040 schedule a tax form   Also, if, at the time the annuity payments began, you were at least age 75 and were entitled to annuity payments from a qualified plan with fewer than 5 years of guaranteed payments, you must use the Simplified Method. 1040 schedule a tax form Beginning in 2013, distributions from an annuity under a nonqualified plan are considered net investment income for the purpose of figuring the net investment income tax (NIIT). 1040 schedule a tax form For more information, see the instructions for Form 8960, Net Investment Income Tax – Individuals, Estates and Trusts. 1040 schedule a tax form Topics not covered in this publication. 1040 schedule a tax form   Certain topics related to pensions and annuities are not covered in this publication. 1040 schedule a tax form They include: Simplified Method. 1040 schedule a tax form This method is covered in Publication 575. 1040 schedule a tax form That publication also covers nonperiodic payments (amounts not received as an annuity) from a qualified pension or annuity plan, rollovers, special averaging and capital gain treatment of lump-sum distributions, and special additional taxes on early distributions, excess distributions, and excess accumulations (not making required minimum distributions). 1040 schedule a tax form Individual retirement arrangements (IRAs). 1040 schedule a tax form Information on the tax treatment of amounts you receive from an IRA is included in Publication 590, Individual Retirement Arrangements (IRAs). 1040 schedule a tax form Life insurance payments. 1040 schedule a tax form If you receive life insurance payments because of the death of the insured person, get Publication 525, Taxable and Nontaxable Income, for information on the tax treatment of the proceeds. 1040 schedule a tax form Help from IRS. 1040 schedule a tax form   If, after reading this publication, you need help to figure the taxable part of your pension or annuity, the IRS can do it for you for a fee. 1040 schedule a tax form For information on this service, see Requesting a Ruling on Taxation of Annuity , later. 1040 schedule a tax form Comments and suggestions. 1040 schedule a tax form   We welcome your comments about this publication and your suggestions for future editions. 1040 schedule a tax form   You can write to us at the following address: Internal Revenue Service Tax Forms and Publications Division 1111 Constitution Ave. 1040 schedule a tax form NW, IR-6526 Washington, DC 20224   We respond to many letters by telephone. 1040 schedule a tax form Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence. 1040 schedule a tax form   You can send your comments from www. 1040 schedule a tax form irs. 1040 schedule a tax form gov/formspubs/. 1040 schedule a tax form Click on “More Information” and then on “Comment on Tax Forms and Publications”. 1040 schedule a tax form   Although we cannot respond individually to each comment received, we do appreciate your feedback and will consider your comments as we revise our tax products. 1040 schedule a tax form Ordering forms and publications. 1040 schedule a tax form   Visit www. 1040 schedule a tax form irs. 1040 schedule a tax form gov/formspubs/ to download forms and publications, call 1-800-TAX-FORM (1-800-829-3676), or write to the address below and receive a response within 10 days after your request is received. 1040 schedule a tax form Internal Revenue Service 1201 N. 1040 schedule a tax form Mitsubishi Motorway Bloomington, IL 61705-6613 Tax questions. 1040 schedule a tax form   If you have a tax question, check the information available on IRS. 1040 schedule a tax form gov or call 1-800-829-1040. 1040 schedule a tax form We cannot answer tax questions sent to either of the above addresses. 1040 schedule a tax form Useful Items - You may want to see: Publication 524 Credit for the Elderly or the Disabled 525 Taxable and Nontaxable Income 571 Tax-Sheltered Annuity Plans (403(b) Plans) 575 Pension and Annuity Income 590 Individual Retirement Arrangements (IRAs) 721 Tax Guide to U. 1040 schedule a tax form S. 1040 schedule a tax form Civil Service Retirement Benefits 910 Guide To Free Tax Services Form (and Instructions) 1099-R Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. 1040 schedule a tax form See How To Get Tax Help near the end of this publication for information about getting these publications and forms. 1040 schedule a tax form Prev  Up  Next   Home   More Online Publications
Print - Click this link to Print this page

Filing Information For Estate & Gift Taxes

Filing Estate and Gift Tax Returns
Where to File and Contact Information for Estate and Gift Tax

Gift Tax
The gift tax applies to the transfer by gift of any property.

Estate Tax
Estate tax may apply to your taxable estate at your death.

Estate and Gift Taxes
General information on when these taxes apply and when they do not.

Forms and Publications - Estate and Gift Tax
Fill-in forms have been included to allow you to enter information and provide you with a cleaner crisper printout for your records and for filing with the IRS.

Page Last Reviewed or Updated: 04-Feb-2014

The 1040 Schedule A Tax Form

1040 schedule a tax form Accelerated Cost Recovery System (ACRS) Table of Contents Topics - This chapter discusses: Useful Items - You may want to see: ACRS Defined What Can and Cannot Be Depreciated Under ACRSRecovery Property Nonrecovery Property How To Figure the DeductionUnadjusted Basis Classes of Recovery Property Recovery Periods Alternate ACRS Method (Modified Straight Line Method) ACRS Deduction in Short Tax Year DispositionsEarly dispositions of ACRS property other than 15-, 18-, or 19-year real property. 1040 schedule a tax form Dispositions — mass asset accounts. 1040 schedule a tax form Early dispositions — 15-year real property. 1040 schedule a tax form Early dispositions — 18- and 19-year real property. 1040 schedule a tax form Depreciation Recapture Topics - This chapter discusses: The definition of ACRS What can and cannot be depreciated under ACRS How to figure the deduction Dispositions Useful Items - You may want to see: Publication 544 Sales and Other Dispositions of Assets 551 Basis of Assets 583 Starting a Business and Keeping Records Form (and Instructions) 3115 Application for Change in Accounting Method 4562 Depreciation and Amortization The Accelerated Cost Recovery System (ACRS) applies to property first used before 1987. 1040 schedule a tax form It is the name given to tax rules for getting back (recovering) through depreciation deductions the cost of property used in a trade or business or to produce income. 1040 schedule a tax form These rules are mandatory and generally apply to tangible property placed in service after 1980 and before 1987. 1040 schedule a tax form If you placed property in service during this period, you must continue to figure your depreciation under ACRS. 1040 schedule a tax form If you used listed property placed in service after June 18, 1984, less than 50% for business in 1995, see Predominant Use Test in chapter 3. 1040 schedule a tax form Listed property includes cars, other means of transportation, and certain computers. 1040 schedule a tax form Any additions or improvements placed in service after 1986, including any components of a building (such as plumbing, wiring, storm windows, etc. 1040 schedule a tax form ), are depreciated using MACRS, discussed in chapter 3 of Publication 946. 1040 schedule a tax form It does not matter that the underlying property is depreciated under ACRS or one of the other methods. 1040 schedule a tax form ACRS Defined ACRS consists of accelerated depreciation methods and an alternate ACRS method that could have been elected. 1040 schedule a tax form The alternate ACRS method used a recovery percentage based on a modified straight line method. 1040 schedule a tax form The law prescribes fixed percentages to be uses for each class of property. 1040 schedule a tax form Property depreciable under ACRS is called recovery property. 1040 schedule a tax form The recovery class of property determines the recovery period. 1040 schedule a tax form Generally, the class life of property places it in a 3-year, 5-year, 10-year, 15-year, 18-year, or 19-year recovery class. 1040 schedule a tax form Under ACRS, the prescribed percentages are used to recover the unadjusted basis of recovery property. 1040 schedule a tax form To figure a depreciation deduction, you multiply the prescribed percentage for the recovery class by the unadjusted basis of the recovery property. 1040 schedule a tax form You must continue to figure your depreciation under ACRS for property placed in service after 1980 and before 1987. 1040 schedule a tax form For property you placed in service after 1986, you must use MACRS, discussed in chapter 3 of Publication 946. 1040 schedule a tax form What Can and Cannot Be Depreciated Under ACRS ACRS applies to most depreciable tangible property placed in service after 1980 and before 1987. 1040 schedule a tax form It includes new or used and real or personal property. 1040 schedule a tax form The property must be for use in a trade or business or for the production of income. 1040 schedule a tax form Property you acquired before 1981 or after 1986 is not ACRS recovery property. 1040 schedule a tax form For information on depreciating property acquired before 1981, see chapter 2. 1040 schedule a tax form For information on depreciating property acquired after 1986, see chapter 3 of Publication 946. 1040 schedule a tax form Recovery Property Recovery property under ACRS is tangible depreciable property placed in service after 1980 and before 1987. 1040 schedule a tax form It generally includes new or used property that you acquired after 1980 and before 1987 for use in your trade or business or for the production of income. 1040 schedule a tax form Nonrecovery Property You cannot use ACRS for property you placed in service before 1981 or after 1986. 1040 schedule a tax form Nonrecovery property also includes: Intangible property, Property you elected to exclude from ACRS that is properly depreciated under a method of depreciation that is not based on a term of years, Certain public utility property, and Certain property acquired and excluded from ACRS because of the antichurning rules. 1040 schedule a tax form Intangible property. 1040 schedule a tax form   Intangible property is not depreciated under ACRS. 1040 schedule a tax form Property depreciated under methods not expressed in a term of years. 1040 schedule a tax form   Certain property depreciated under a method not expressed in a term of years is not depreciated under ACRS. 1040 schedule a tax form This included any property: If you made an irrevocable election to exclude such property, and In the first year that you could have claimed depreciation, you properly used the unit-of-production method or any method of depreciation not expressed in a term of years (not including the retirement-replacement-betterment method). 1040 schedule a tax form Public utility property. 1040 schedule a tax form   Public utility property for which the taxpayer does not use a normalization method of accounting is excluded from ACRS and is subject to depreciation under a special rule. 1040 schedule a tax form Additions or improvements to ACRS property after 1986. 1040 schedule a tax form   Any additions or improvements placed in service after 1986, including any components of a building (plumbing, wiring, storm windows, etc. 1040 schedule a tax form ) are depreciated using MACRS, discussed in chapter 3 of Publication 946. 1040 schedule a tax form It does not matter that the underlying property is depreciated under ACRS or one of the other methods. 1040 schedule a tax form How To Figure the Deduction After you determine that your property can be depreciated under ACRS, you are ready to figure your deduction. 1040 schedule a tax form Because the conventions are built into the percentage table rates, you only need to know the following: The unadjusted basis of your recovery property, The classes of recovery property, The recovery periods, and Whether to use the prescribed percentages based on accelerated methods or percentages based on using the alternate ACRS method. 1040 schedule a tax form Unadjusted Basis To figure your ACRS deduction, you multiply the unadjusted basis in your recovery property by its applicable percentage for the year. 1040 schedule a tax form Unadjusted basis is the same amount you would use to figure gain on a sale, but it is figured without taking into account any depreciation taken in earlier years. 1040 schedule a tax form However, reduce your original basis by the amount of amortization taken on the property and by any section 179 deduction claimed as discussed in chapter 2 of Publication 946. 1040 schedule a tax form If you buy property, your unadjusted basis is usually its cost minus any amortized amount and minus any section 179 deduction elected. 1040 schedule a tax form If you acquire property in some other way, such as by inheriting it, getting it as a gift, or building it yourself, you figure your unadjusted basis under other rules. 1040 schedule a tax form See Publication 551. 1040 schedule a tax form Classes of Recovery Property All recovery property under ACRS is in one of the following classes. 1040 schedule a tax form The class for your property was determined when you began to depreciate it. 1040 schedule a tax form 3-Year Property 3-year property includes automobiles, light-duty trucks (actual unloaded weight less than 13,000 pounds), and tractor units for use over-the-road. 1040 schedule a tax form Race horses over 2 years old when placed in service are 3-year property. 1040 schedule a tax form Any other horses over 12 years old when you placed them in service are also included in the 3-year property class. 1040 schedule a tax form The ACRS percentages for 3-year recovery property are: Recovery Period Percentage 1st year 25% 2nd year 38% 3rd year 37% If you used the percentages above to depreciate your 3-year recovery property, your property, except for certain passenger automobiles, is fully depreciated. 1040 schedule a tax form You cannot claim depreciation for this property after 1988. 1040 schedule a tax form 5-Year Property 5-year property includes computers, copiers, and equipment, such as office furniture and fixtures. 1040 schedule a tax form It also includes single purpose agricultural or horticultural structures and petroleum storage facilities (other than buildings and their structural components). 1040 schedule a tax form The ACRS percentages for 5-year recovery property are: Recovery period Percentage 1st year 15% 2nd year 22% 3rd through 5th year 21% If you used the percentages above to depreciate your 5-year recovery property, it is fully depreciated. 1040 schedule a tax form You cannot claim depreciation for this property after 1990. 1040 schedule a tax form 10-Year Property 10-year property includes certain real property such as theme-park structures and certain public utility property. 1040 schedule a tax form Manufactured homes (including mobile homes) and railroad tank cars are also 10-year property. 1040 schedule a tax form You do not treat a building, and its structural components, as 10-year property by reason of a change in use after you placed the property in service. 1040 schedule a tax form For example, a building (15-year real property) that was placed in service in 1981 and was converted to a theme-park structure in 1986 remains 15-year real property. 1040 schedule a tax form The ACRS percentages for 10-year recovery property are: Recovery Period Percentage 1st year 8% 2nd year 14% 3rd year 12% 4th through 6th year 10% 7th through 10th year 9% If you used the percentages above, you cannot claim depreciation for this property after 1995. 1040 schedule a tax form Example. 1040 schedule a tax form On April 21, 1986, you bought and placed in service a new mobile home for $26,000 to be used as rental property. 1040 schedule a tax form You paid $10,000 cash and signed a note for $16,000 giving you an unadjusted basis of $26,000. 1040 schedule a tax form On June 8, 1986, you bought and placed in service a used mobile home for use as rental property at a total cost of $11,500. 1040 schedule a tax form The total unadjusted basis of your 10-year recovery property placed in service in 1986 was $37,500 ($26,000 + $11,500). 1040 schedule a tax form Your ACRS deduction was $3,000 (8% × $37,500). 1040 schedule a tax form In 1987, your ACRS deduction was $5,250 (14% × $37,500). 1040 schedule a tax form In 1988, your ACRS deduction was $4,500 (12% × $37,500). 1040 schedule a tax form In 1989, 1990, and 1991, your ACRS deduction was $3,750 (10% × $37,500). 1040 schedule a tax form In 1992, 1993, 1994, and 1995 your deduction for each year is $3,375 (9% × $37,500). 1040 schedule a tax form 15-Year Real Property 15-year real property is real property that is recovery property placed in service before March 16, 1984. 1040 schedule a tax form It includes all real property, such as buildings, other than that designated as 5-year or 10-year property. 1040 schedule a tax form Unlike the 3-, 5-, or 10-year classes of property, the percentages for 15-year real property depend on when you placed the property in service during your tax year. 1040 schedule a tax form You could group 15-year real property by month and year placed in service. 1040 schedule a tax form In Table 1, at the end of this publication in the Appendix, find the month in your tax year that you placed the property in service in your trade or business or for the production of income. 1040 schedule a tax form You use the percentages listed under that month for each year of the recovery period to determine your depreciation deduction each year. 1040 schedule a tax form Example. 1040 schedule a tax form On March 5, 1984, you placed an apartment building in service in your business. 1040 schedule a tax form It is 15-year real property. 1040 schedule a tax form After subtracting the value of the land, your unadjusted basis in the building is $250,000. 1040 schedule a tax form You use the calendar year as your tax year. 1040 schedule a tax form March is the third month of your tax year. 1040 schedule a tax form Your ACRS deduction for 1984 was $25,000 (10% × $250,000). 1040 schedule a tax form For 1985, the percentage for the third month of the second year of the recovery period is 11%. 1040 schedule a tax form Your deduction was $27,500 (11% × $250,000). 1040 schedule a tax form For the third, fourth, and fifth years of the recovery period (1986, 1987, and 1988), the percentages are 9%, 8%, and 7%. 1040 schedule a tax form For 1989 through 1992, the percentage for the third month is 6%. 1040 schedule a tax form Your deduction each year is $15,000 (6% × $250,000). 1040 schedule a tax form For 1993, 1994, and 1995, the percentage for the third month is 5%. 1040 schedule a tax form Your depreciation deduction is $12,500 (5% × $250,000) for 1993, 1994, and 1995. 1040 schedule a tax form Low-Income Housing Low-income housing that was assigned a 15-year recovery period under ACRS includes the following types of property: Federally assisted housing projects where the mortgage is insured under section 221(d)(3) or 236 of the National Housing Act, or housing financed or assisted by direct loan or tax abatement under similar provisions of state or local laws. 1040 schedule a tax form Low-income rental housing for which a depreciation deduction for rehabilitation expenditures is allowed. 1040 schedule a tax form Low-income rental housing held for occupancy by families or individuals eligible to receive subsidies under section 8 of the United States Housing Act of 1937, as amended, or under the provisions of state or local laws that authorize similar subsidies for low-income families. 1040 schedule a tax form Housing financed or assisted by direct loan or insured under Title V of the Housing Act of 1949. 1040 schedule a tax form The ACRS percentages for low-income housing real property, like the regular 15-year real property percentages, depend on when you placed the property in service. 1040 schedule a tax form Find the month in your tax year in Table 2 or 3 at the end of this publication in the Appendix that you first placed the property in service as rental housing. 1040 schedule a tax form Use the percentages listed under that month for each year of the recovery period. 1040 schedule a tax form Table 2 shows percentages for low-income housing placed in service before May 9, 1985. 1040 schedule a tax form Table 3 shows percentages for low-income housing placed in service after May 8, 1985, and before 1987. 1040 schedule a tax form Example. 1040 schedule a tax form In May 1986, you acquired and placed in service a house that qualified as low-income rental housing under item 3) of the above listing. 1040 schedule a tax form You use the calendar year as your tax year. 1040 schedule a tax form You use Table C–3 because the property was placed in service after May 8, 1985. 1040 schedule a tax form Your unadjusted basis for the property, not including the land, was $59,000. 1040 schedule a tax form Your deduction for 1986 through 2001 is shown in the following table. 1040 schedule a tax form Year Rate Deduction 1986 8. 1040 schedule a tax form 9% $5,251 1987 12. 1040 schedule a tax form 1% 7,139 1988 10. 1040 schedule a tax form 5% 6,195 1989 9. 1040 schedule a tax form 1% 5,369 1990 7. 1040 schedule a tax form 9% 4,661 1991 6. 1040 schedule a tax form 9% 4,071 1992 5. 1040 schedule a tax form 9% 3,481 1993 5. 1040 schedule a tax form 2% 3,068 1994 4. 1040 schedule a tax form 6% 2,714 1995 4. 1040 schedule a tax form 6% 2,714 1996 4. 1040 schedule a tax form 6% 2,714 1997 4. 1040 schedule a tax form 6% 2,714 1998 4. 1040 schedule a tax form 6% 2,714 1999 4. 1040 schedule a tax form 5% 2,655 2000 4. 1040 schedule a tax form 5% 2,655 2001 1. 1040 schedule a tax form 5% 885 18-Year Real Property 18-year real property is real property that is recovery property placed in service after March 15, 1984, and before May 9, 1985. 1040 schedule a tax form It includes real property, such as buildings, other than that designated as 5-year, 10-year, 15-year real property, or low-income housing. 1040 schedule a tax form The ACRS percentages for 18-year real property depend on when you placed the property in service in your trade or business or for the production of income during your tax year. 1040 schedule a tax form There are also tables for 18-year real property in the Appendix. 1040 schedule a tax form Table 4 shows the percentages for 18-year real property you placed in service after June 22, 1984, and before May 9, 1985. 1040 schedule a tax form Table 5 is for 18-year real property placed in service after March 15, 1984, and before June 23, 1984. 1040 schedule a tax form Find the month in your tax year that you placed the property in service in a trade or business or for the production of income. 1040 schedule a tax form Use the percentages listed under that month for each year of the recovery period. 1040 schedule a tax form Example. 1040 schedule a tax form On April 28, 1985, you bought and placed in service a rental house. 1040 schedule a tax form The house, not including the land, cost $95,000. 1040 schedule a tax form This is your unadjusted basis for the house. 1040 schedule a tax form You use the calendar year as your tax year. 1040 schedule a tax form Because the house was placed in service after June 22, 1984, and before May 9, 1985, it is 18-year real property. 1040 schedule a tax form You use Table 4 to figure your deduction for the house. 1040 schedule a tax form April is the fourth month of your tax year. 1040 schedule a tax form Your deduction for 1985 through 2003 is shown in the following table. 1040 schedule a tax form Year Rate Deduction 1985 7. 1040 schedule a tax form 0% $6,650 1986 9. 1040 schedule a tax form 0% 8,550 1987 8. 1040 schedule a tax form 0% 7,600 1988 7. 1040 schedule a tax form 0% 6,650 1989 7. 1040 schedule a tax form 0% 6,650 1990 6. 1040 schedule a tax form 0% 5,700 1991 5. 1040 schedule a tax form 0% 4,750 1992 5. 1040 schedule a tax form 0% 4,750 1993 5. 1040 schedule a tax form 0% 4,750 1994 5. 1040 schedule a tax form 0% 4,750 1995 5. 1040 schedule a tax form 0% 4,750 1996 5. 1040 schedule a tax form 0% 4,750 1997 5. 1040 schedule a tax form 0% 4,750 1998 4. 1040 schedule a tax form 0% 3,800 1999 4. 1040 schedule a tax form 0% 3,800 2000 4. 1040 schedule a tax form 0% 3,800 2001 4. 1040 schedule a tax form 0% 3,800 2002 4. 1040 schedule a tax form 0% 3,800 2003 1. 1040 schedule a tax form 0% 950 19-Year Real Property 19-year real property is real property that is recovery property placed in service after May 8, 1985, and before 1987. 1040 schedule a tax form It includes all real property, other than that designated as 5-year, 10-year, 15-year, or 18-year real property, or low-income housing. 1040 schedule a tax form The ACRS percentages for 19-year real property depend on when you placed the property in service in a trade or business or for the production of income during your tax year. 1040 schedule a tax form Table 6 shows the percentages for 19-year real property. 1040 schedule a tax form You find the month in your tax year that you placed the property in service. 1040 schedule a tax form You use the percentages listed under that month for each year of the recovery period. 1040 schedule a tax form Recovery Periods Each item of recovery property is assigned to a class of property. 1040 schedule a tax form The classes of recovery property establish the recovery periods over which the unadjusted basis of items in a class is recovered. 1040 schedule a tax form The classes of property are: 3-Year property 5-Year property 10-Year property 15-Year real property Low-income housing 18-Year real property 19-Year real property Alternate ACRS Method (Modified Straight Line Method) ACRS provides an alternate ACRS method that could be elected. 1040 schedule a tax form This alternate ACRS method uses a recovery percentage based on a modified straight line method. 1040 schedule a tax form This alternate ACRS method generally uses percentages other than those from the tables. 1040 schedule a tax form If you elected the alternate ACRS method, you determine the recovery period by using the following schedule. 1040 schedule a tax form This schedule is for other than 18- and 19-year real property and low-income housing: In the case of: You could have elected a recovery period of: 3-year property 3, 5, or 12 years 5-year property 5, 12, or 25 years 15-year real property 15, 35, or 45 years Percentages. 1040 schedule a tax form   The straight-line percentages for the alternate ACRS method are: Recovery Period Percentage 5 years 20. 1040 schedule a tax form 00% 10 years 10. 1040 schedule a tax form 00% 12 years 8. 1040 schedule a tax form 333% 15 years 6. 1040 schedule a tax form 667% 25 years 4. 1040 schedule a tax form 00% 35 years 2. 1040 schedule a tax form 857%   You apply the percentage to the unadjusted basis(defined earlier) of the property to figure your ACRS deduction. 1040 schedule a tax form There are tables for 18- and 19-year real property later in this publication in the Appendix. 1040 schedule a tax form For 15-year real property, see 15-year real property, later. 1040 schedule a tax form 3-, 5-, and 10-year property. 1040 schedule a tax form   If you elected to use an alternate recovery percentage, you have to use the same recovery percentage for all property in that class that you placed in service in that tax year. 1040 schedule a tax form This applies throughout the recovery period you selected. 1040 schedule a tax form Half-year convention. 1040 schedule a tax form   If you elected the alternate method, only a half-year of depreciation was deducted for the year you placed the property in service. 1040 schedule a tax form This applied regardless of when in the tax year you placed the property in service. 1040 schedule a tax form For each of the remaining years in the recovery period, you take a full year's deduction. 1040 schedule a tax form If you hold the property for the entire recovery period, a half-year of depreciation is allowable for the year following the end of the recovery period. 1040 schedule a tax form Example. 1040 schedule a tax form You operate a small upholstery business. 1040 schedule a tax form On March 19, 1986, you bought and placed in service a $13,000 light-duty panel truck to be used in your business and a $500 electric saw. 1040 schedule a tax form You elected to use the alternate ACRS method. 1040 schedule a tax form You did not elect to take a section 179 deduction. 1040 schedule a tax form You decided to recover the cost of the truck, which is 3-year recovery property, over 5 years. 1040 schedule a tax form The saw is 5-year property, but you decided to recover its cost over 12 years. 1040 schedule a tax form For 1986, your ACRS deduction reflected the half-year convention. 1040 schedule a tax form In the first year, you deducted half of the amount determined for a full year. 1040 schedule a tax form Your ACRS deduction for 1986 is as follows: Light-duty truck   5 years straight line = 20% 20% ÷ $13,000 = $2,600 Half-year convention -½ of $2,600= $1,300. 1040 schedule a tax form 00     Electric saw   12 years straight line = 8. 1040 schedule a tax form 333% 8. 1040 schedule a tax form 333% ÷ $500 = $41. 1040 schedule a tax form 67 Half-year convention -½ of $41. 1040 schedule a tax form 67= 20. 1040 schedule a tax form 84 Total ACRS deduction for 1986 $1,320. 1040 schedule a tax form 84       You take a full year of depreciation for both the truck and the saw for the years 1987 through 1990. 1040 schedule a tax form Your ACRS deduction for each of those years is as follows: Light-duty truck   5 years straight line = 20% 20% ÷ $13,000 = $2,600     Electric saw     12 years straight line = 8. 1040 schedule a tax form 333% 8. 1040 schedule a tax form 333% ÷ $500 = $41. 1040 schedule a tax form 67 Total annual ACRS deduction for 1987 through 1990 $2,641. 1040 schedule a tax form 67       In 1991, you take a half-year of depreciation for the truck and a full year of depreciation for the saw. 1040 schedule a tax form Your ACRS deduction for 1991 is as follows: Light-duty truck   5 years straight line = 20% 20% ÷ $13,000 = $2,600 Half-year convention -½ of $2,600= $1,300. 1040 schedule a tax form 00     Electric saw   12 years straight line = 8. 1040 schedule a tax form 333% 8. 1040 schedule a tax form 333% ÷ $500 = $41. 1040 schedule a tax form 67 Total ACRS deduction for 1991 $1,341. 1040 schedule a tax form 67       The truck is fully depreciated after 1991. 1040 schedule a tax form You take a full year of depreciation for the saw for the years 1992 through 1997. 1040 schedule a tax form Your ACRS deduction for each of those years is as follows: Electric saw     12 years straight line = 8. 1040 schedule a tax form 333% 8. 1040 schedule a tax form 333% ÷ $500 = $41. 1040 schedule a tax form 67 Total annual ACRS deduction for 1992 through 1997 $41. 1040 schedule a tax form 67       You take a half-year of depreciation for the saw for 1998. 1040 schedule a tax form Your ACRS deduction for 1998 is as follows: Electric saw   12 years straight line = 8. 1040 schedule a tax form 333% 8. 1040 schedule a tax form 333% ÷ $500 = $41. 1040 schedule a tax form 67 Half-year convention -½ of $41. 1040 schedule a tax form 67= 20. 1040 schedule a tax form 84 Total ACRS deduction for 1998 $20. 1040 schedule a tax form 84       The saw is fully depreciated after 1998. 1040 schedule a tax form 15-year real property. 1040 schedule a tax form   Under ACRS, you could also elect to use the alternate ACRS method for 15-year real property. 1040 schedule a tax form The alternate ACRS method allows you to depreciate your 15-year real property using the straight line ACRS method over the alternate recovery periods of 15, 35, or 45 years. 1040 schedule a tax form If you selected a 15-year recovery period, you use the percentage (6. 1040 schedule a tax form 667%) from the schedule above. 1040 schedule a tax form You prorate this percentage for the number of months the property was in service in the first year. 1040 schedule a tax form If you selected a 35- or 45-year recovery period, you use either Table 11 or 15. 1040 schedule a tax form Alternate periods for 18-year real property. 1040 schedule a tax form   For 18-year real property, the alternate recovery periods are 18, 35, or 45 years. 1040 schedule a tax form The percentages for 18-year real property under the alternate method are in Tables 7, 8, 10, 11, 14, and 15 in the Appendix. 1040 schedule a tax form There are two tables for each alternate recovery period. 1040 schedule a tax form One table shows the percentage for property placed in service after June 22, 1984. 1040 schedule a tax form The other table has the percentages for property placed in service after March 15, 1984, and before June 23, 1984. 1040 schedule a tax form Alternate periods for 19-year real property. 1040 schedule a tax form   For 19-year real property, the alternate recovery periods are 19, 35, or 45 years. 1040 schedule a tax form If you selected a 19-year recovery period, use Table 9 to determine your deduction. 1040 schedule a tax form If you select a 35- or 45-year recovery period, use either Table 13 or 14. 1040 schedule a tax form Example. 1040 schedule a tax form You placed in service an apartment building on August 3, 1986. 1040 schedule a tax form The building is 19-year real property. 1040 schedule a tax form The sales contract allocated $300,000 to the building and $100,000 to the land. 1040 schedule a tax form You use the calendar year as your tax year. 1040 schedule a tax form You chose the alternate ACRS method over a recovery period of 35 years. 1040 schedule a tax form For 1986, you figure your ACRS deduction usingTable 13. 1040 schedule a tax form August is the eighth month of your tax year. 1040 schedule a tax form The percentage from Table 13 for the eighth month is 1. 1040 schedule a tax form 1%. 1040 schedule a tax form Your deduction was $3,300 ($300,000 ÷ 1. 1040 schedule a tax form 1%). 1040 schedule a tax form The deduction rate from ACRS Table 13 for years 2 through 20 is 2. 1040 schedule a tax form 9% so that your deduction in 1987 through 2005 is $8,700 ($300,000 ÷ 2. 1040 schedule a tax form 9%). 1040 schedule a tax form Alternate periods for low-income housing. 1040 schedule a tax form   For low-income housing, the alternate recovery periods are 15, 35, or 45 years. 1040 schedule a tax form If you selected a 15-year period for this property, use 6. 1040 schedule a tax form 667% as the percentage. 1040 schedule a tax form If you selected a 35- or 45-year period, use either Table 11, 12, or 15. 1040 schedule a tax form Election. 1040 schedule a tax form   You had to make the election to use the alternate ACRS method by the return due date (including extensions) for the tax year you placed the property in service. 1040 schedule a tax form Revocation of election. 1040 schedule a tax form   Your election to use an alternate ACRS method, once made, can be changed only with the consent of the Commissioner. 1040 schedule a tax form The Commissioner grants consent only in extraordinary circumstances. 1040 schedule a tax form Any request for a revocation will be considered a request for a ruling. 1040 schedule a tax form ACRS Deduction in Short Tax Year For a tax year that is less than 12 months, the ACRS deduction is prorated on a 12-month basis. 1040 schedule a tax form Figure the amount of the ACRS deduction for a short tax year as follows: First, you figure the ACRS deduction for a full year. 1040 schedule a tax form You figure this by multiplying the unadjusted basis by the recovery percentage. 1040 schedule a tax form You then multiply the ACRS deduction determined for a full tax year by a fraction. 1040 schedule a tax form The numerator (top number) of the fraction is the number of months in the short tax year and the denominator (bottom number) is 12. 1040 schedule a tax form For example, a corporation placed in service in June 1986 an item of 3-year property with an unadjusted basis of $10,000. 1040 schedule a tax form The corporation files a tax return, because of a change in its accounting period, for the 6-month short tax year ending June 30, 1986. 1040 schedule a tax form The full year's ACRS deduction for this item is $2,500 ($10,000 ÷ 25%), the first year percentage from the 3-year table. 1040 schedule a tax form The ACRS deduction for the short tax year is $1,250 ($2,500 ÷ 6/12). 1040 schedule a tax form You use the full ACRS percentages during the remaining years of the recovery period. 1040 schedule a tax form For the first tax year after the recovery period, the unrecovered basis will be deductible. 1040 schedule a tax form Exception. 1040 schedule a tax form   For the tax year in which you placed 15-, 18-, or 19-year real property in service or in the tax year you dispose of it, you compute the ACRS deduction for the number of months that the property is in service during that tax year. 1040 schedule a tax form You compute the number of months using either a full month or mid-month convention. 1040 schedule a tax form This is true regardless of the number of months in the tax year and the recovery period and method used. 1040 schedule a tax form Dispositions A disposition is the permanent withdrawal of property from use in your trade or business or in the production of income. 1040 schedule a tax form You can make a withdrawal by sale, exchange, retirement, abandonment, or destruction. 1040 schedule a tax form You generally recognize gain or loss on the disposition of an asset by sale. 1040 schedule a tax form However, nonrecognition rules can allow you to postpone some gain. 1040 schedule a tax form See Publication 544. 1040 schedule a tax form If you physically abandon property, you can deduct as a loss the adjusted basis of the asset at the time of its abandonment. 1040 schedule a tax form Your intent must be to discard the asset so that you will not use it again or retrieve it for sale, exchange, or other disposition. 1040 schedule a tax form Early dispositions. 1040 schedule a tax form   The disposal of an asset before the end of its specified recovery period, is referred to as an early disposition. 1040 schedule a tax form When an early disposition occurs, the depreciation deduction in the year of disposition depends on the class of property involved. 1040 schedule a tax form Early dispositions of ACRS property other than 15-, 18-, or 19-year real property. 1040 schedule a tax form   Generally, you get no ACRS deduction for the tax year in which you dispose of or retire recovery property, except for 15-, 18-, and 19-year real property. 1040 schedule a tax form This means there is no depreciation deduction under ACRS in the year you dispose of or retire any of your 3-, 5-, or 10-year recovery property. 1040 schedule a tax form Dispositions — mass asset accounts. 1040 schedule a tax form   The law provides a special rule to avoid the calculation of gain on the disposition of assets from mass asset accounts. 1040 schedule a tax form A mass asset account includes items usually minor in value in relation to the group, numerous in quantity, impractical to separately identify, and not usually accounted for on a separate basis, but on a total dollar value. 1040 schedule a tax form Examples of mass assets include minor items of office, plant, and store furniture and fixtures. 1040 schedule a tax form   Under the special rule, if you elected to use a mass asset account, you recognize gain to the extent of the proceeds from the disposition of the asset. 1040 schedule a tax form You leave the unadjusted basis of the property in the account until recovered in future years. 1040 schedule a tax form If you did this, include the total proceeds realized from the disposition in income on the tax return for the year of disposition. 1040 schedule a tax form Early dispositions — 15-year real property. 1040 schedule a tax form   If you dispose of 15-year real property, you base your ACRS deduction for the year of disposition on the number of months in use. 1040 schedule a tax form You use a full-month convention. 1040 schedule a tax form For a disposition at any time during a particular month before the end of the recovery period, no deduction is allowed for the month of disposition. 1040 schedule a tax form This applies whether you use the regular ACRS method or elected the alternate ACRS method. 1040 schedule a tax form Example. 1040 schedule a tax form You purchased and placed in service a rental house on March 2, 1984, for $98,000 (not including the cost of land). 1040 schedule a tax form You file your return based on a calendar year. 1040 schedule a tax form Your rate from Table 1 for the third month is 10%. 1040 schedule a tax form Your ACRS deduction for 1984 was $9,800 ($98. 1040 schedule a tax form 000 ÷ 10%). 1040 schedule a tax form For 1985 through 1988, you figured your ACRS deductions using 11%, 9%, 8%, and 7% ÷ $98,000. 1040 schedule a tax form For 1989 through 1992, you figured your ACRS deductions using 6% for each year. 1040 schedule a tax form The deduction each year was $98,000 ÷ 6%. 1040 schedule a tax form For 1993 and 1994, the ACRS deduction is ($98,000 ÷ 5%) $4,900 for each year. 1040 schedule a tax form You sell the house on June 1, 1995. 1040 schedule a tax form You figure your ACRS deduction for 1995 for the full year and then prorate that amount for the months of use. 1040 schedule a tax form The full ACRS deduction for 1995 is $4,900 ($98,000 ÷ 5%). 1040 schedule a tax form You then prorate this amount to the 5 months in 1995 during which it was rented. 1040 schedule a tax form Your ACRS deduction for 1995 is $2,042 ($4,900 ÷ 5/12). 1040 schedule a tax form Early dispositions — 18- and 19-year real property. 1040 schedule a tax form   If you dispose of 18- or 19-year real property, you base your ACRS deduction for the year of disposition on the number of months in use. 1040 schedule a tax form For 18-year property placed in service before June 23, 1984, use a full-month convention on a disposition. 1040 schedule a tax form For 18-year property placed in service after June 22, 1984, and for 19-year property, determine the number of months in use by using the mid-month convention. 1040 schedule a tax form Under the mid-month convention,treat real property disposed of any time during a month as disposed of in the middle of that month. 1040 schedule a tax form Count the month of disposition as half a month of use. 1040 schedule a tax form Example. 1040 schedule a tax form You purchased and placed in service a rental house on July 2, 1984, for $100,000 (not including the cost of land). 1040 schedule a tax form You file your return based on a calendar year. 1040 schedule a tax form Your rate from Table 4 for the seventh month is 4%. 1040 schedule a tax form You figured your ACRS deduction for 1984 was $4,000 ($100,000 ÷ 4%). 1040 schedule a tax form In 1985 through 1994, your ACRS deductions were 9%, 8%, 8%, 7%, 6%, 6%, 5%, 5%, and 5% ÷ $100,000. 1040 schedule a tax form You sell the house on September 24, 1995. 1040 schedule a tax form Figure your ACRS deduction for 1995 for the months of use. 1040 schedule a tax form The full ACRS deduction for 1995 is $5,000 ($100,000 ÷ 5%). 1040 schedule a tax form Prorate this amount for the 8. 1040 schedule a tax form 5 months in 1995 that you held the property. 1040 schedule a tax form Under the mid-month convention, you count September as half a month. 1040 schedule a tax form Your ACRS deduction for 1995 is $3,542 ($5,000 ÷ 8. 1040 schedule a tax form 5/12). 1040 schedule a tax form Depreciation Recapture If you dispose of property depreciated under ACRS that is section 1245 recovery property, you will generally recognize gain or loss. 1040 schedule a tax form Gain recognized on a disposition is ordinary income to the extent of prior depreciation deductions taken. 1040 schedule a tax form This recapture rule applies to all personal property in the 3-year, 5-year, and 10-year classes. 1040 schedule a tax form You recapture gain on manufactured homes and theme park structures in the 10-year class as section 1245 property. 1040 schedule a tax form Section 1245 property generally includes all personal property. 1040 schedule a tax form See Section 1245 property in chapter 4 of Publication 544 for more information. 1040 schedule a tax form You treat dispositions of section 1250 real property on which you have a gain as section 1245 recovery property. 1040 schedule a tax form You recognize gain on this property as ordinary income to the extent of prior depreciation deductions taken. 1040 schedule a tax form Section 1250 property includes most real property. 1040 schedule a tax form See Section 1250 property in chapter 4 of Publication 544 for more information. 1040 schedule a tax form This rule applies to all section 1250 real property except the following property: Any 15-, 18-, or 19-year real property that is residential rental property. 1040 schedule a tax form Any 15-, 18-, or 19-year real property that you elected to depreciate using the alternate ACRS method. 1040 schedule a tax form Any 15-, 18-, or 19-year real property that is subsidized low-income housing. 1040 schedule a tax form For these recapture rules, you treat the section 179 deduction and 50% of the investment credit that reduced your basis as depreciation. 1040 schedule a tax form See Publication 544 for further discussion of dispositions of section 1245 and 1250 property. 1040 schedule a tax form Prev  Up  Next   Home   More Online Publications