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1040x Amended Tax Return Form

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1040x Amended Tax Return Form

1040x amended tax return form 1. 1040x amended tax return form   Overview of Depreciation Table of Contents Introduction Useful Items - You may want to see: What Property Can Be Depreciated?Property You Own Property Used in Your Business or Income-Producing Activity Property Having a Determinable Useful Life Property Lasting More Than One Year What Property Cannot Be Depreciated?Land Excepted Property When Does Depreciation Begin and End?Placed in Service Idle Property Cost or Other Basis Fully Recovered Retired From Service What Method Can You Use To Depreciate Your Property?Property You Placed in Service Before 1987 Property Owned or Used in 1986 Intangible Property Corporate or Partnership Property Acquired in a Nontaxable Transfer Election To Exclude Property From MACRS What Is the Basis of Your Depreciable Property?Cost as Basis Other Basis Adjusted Basis How Do You Treat Repairs and Improvements? Do You Have To File Form 4562? How Do You Correct Depreciation Deductions?Filing an Amended Return Changing Your Accounting Method Introduction Depreciation is an annual income tax deduction that allows you to recover the cost or other basis of certain property over the time you use the property. 1040x amended tax return form It is an allowance for the wear and tear, deterioration, or obsolescence of the property. 1040x amended tax return form This chapter discusses the general rules for depreciating property and answers the following questions. 1040x amended tax return form What property can be depreciated? What property cannot be depreciated? When does depreciation begin and end? What method can you use to depreciate your property? What is the basis of your depreciable property? How do you treat repairs and improvements? Do you have to file Form 4562? How do you correct depreciation deductions? Useful Items - You may want to see: Publication 534 Depreciating Property Placed in Service Before 1987 535 Business Expenses 538 Accounting Periods and Methods 551 Basis of Assets Form (and Instructions) Sch C (Form 1040) Profit or Loss From Business Sch C-EZ (Form 1040) Net Profit From Business 2106 Employee Business Expenses 2106-EZ Unreimbursed Employee Business Expenses 3115 Application for Change in Accounting Method 4562 Depreciation and Amortization See chapter 6 for information about getting publications and forms. 1040x amended tax return form What Property Can Be Depreciated? You can depreciate most types of tangible property (except land), such as buildings, machinery, vehicles, furniture, and equipment. 1040x amended tax return form You also can depreciate certain intangible property, such as patents, copyrights, and computer software. 1040x amended tax return form To be depreciable, the property must meet all the following requirements. 1040x amended tax return form It must be property you own. 1040x amended tax return form It must be used in your business or income-producing activity. 1040x amended tax return form It must have a determinable useful life. 1040x amended tax return form It must be expected to last more than one year. 1040x amended tax return form The following discussions provide information about these requirements. 1040x amended tax return form Property You Own To claim depreciation, you usually must be the owner of the property. 1040x amended tax return form You are considered as owning property even if it is subject to a debt. 1040x amended tax return form Example 1. 1040x amended tax return form You made a down payment to purchase rental property and assumed the previous owner's mortgage. 1040x amended tax return form You own the property and you can depreciate it. 1040x amended tax return form Example 2. 1040x amended tax return form You bought a new van that you will use only for your courier business. 1040x amended tax return form You will be making payments on the van over the next 5 years. 1040x amended tax return form You own the van and you can depreciate it. 1040x amended tax return form Leased property. 1040x amended tax return form   You can depreciate leased property only if you retain the incidents of ownership in the property (explained below). 1040x amended tax return form This means you bear the burden of exhaustion of the capital investment in the property. 1040x amended tax return form Therefore, if you lease property from someone to use in your trade or business or for the production of income, you generally cannot depreciate its cost because you do not retain the incidents of ownership. 1040x amended tax return form You can, however, depreciate any capital improvements you make to the property. 1040x amended tax return form See How Do You Treat Repairs and Improvements later in this chapter and Additions and Improvements under Which Recovery Period Applies in chapter 4. 1040x amended tax return form   If you lease property to someone, you generally can depreciate its cost even if the lessee (the person leasing from you) has agreed to preserve, replace, renew, and maintain the property. 1040x amended tax return form However, if the lease provides that the lessee is to maintain the property and return to you the same property or its equivalent in value at the expiration of the lease in as good condition and value as when leased, you cannot depreciate the cost of the property. 1040x amended tax return form Incidents of ownership. 1040x amended tax return form   Incidents of ownership in property include the following. 1040x amended tax return form The legal title to the property. 1040x amended tax return form The legal obligation to pay for the property. 1040x amended tax return form The responsibility to pay maintenance and operating expenses. 1040x amended tax return form The duty to pay any taxes on the property. 1040x amended tax return form The risk of loss if the property is destroyed, condemned, or diminished in value through obsolescence or exhaustion. 1040x amended tax return form Life tenant. 1040x amended tax return form   Generally, if you hold business or investment property as a life tenant, you can depreciate it as if you were the absolute owner of the property. 1040x amended tax return form However, see Certain term interests in property under Excepted Property, later. 1040x amended tax return form Cooperative apartments. 1040x amended tax return form   If you are a tenant-stockholder in a cooperative housing corporation and use your cooperative apartment in your business or for the production of income, you can depreciate your stock in the corporation, even though the corporation owns the apartment. 1040x amended tax return form   Figure your depreciation deduction as follows. 1040x amended tax return form Figure the depreciation for all the depreciable real property owned by the corporation in which you have a proprietary lease or right of tenancy. 1040x amended tax return form If you bought your cooperative stock after its first offering, figure the depreciable basis of this property as follows. 1040x amended tax return form Multiply your cost per share by the total number of outstanding shares, including any shares held by the corporation. 1040x amended tax return form Add to the amount figured in (a) any mortgage debt on the property on the date you bought the stock. 1040x amended tax return form Subtract from the amount figured in (b) any mortgage debt that is not for the depreciable real property, such as the part for the land. 1040x amended tax return form Subtract from the amount figured in (1) any depreciation for space owned by the corporation that can be rented but cannot be lived in by tenant-stockholders. 1040x amended tax return form Divide the number of your shares of stock by the total number of outstanding shares, including any shares held by the corporation. 1040x amended tax return form Multiply the result of (2) by the percentage you figured in (3). 1040x amended tax return form This is your depreciation on the stock. 1040x amended tax return form   Your depreciation deduction for the year cannot be more than the part of your adjusted basis in the stock of the corporation that is allocable to your business or income-producing property. 1040x amended tax return form You must also reduce your depreciation deduction if only a portion of the property is used in a business or for the production of income. 1040x amended tax return form Example. 1040x amended tax return form You figure your share of the cooperative housing corporation's depreciation to be $30,000. 1040x amended tax return form Your adjusted basis in the stock of the corporation is $50,000. 1040x amended tax return form You use one half of your apartment solely for business purposes. 1040x amended tax return form Your depreciation deduction for the stock for the year cannot be more than $25,000 (½ of $50,000). 1040x amended tax return form Change to business use. 1040x amended tax return form   If you change your cooperative apartment to business use, figure your allowable depreciation as explained earlier. 1040x amended tax return form The basis of all the depreciable real property owned by the cooperative housing corporation is the smaller of the following amounts. 1040x amended tax return form The fair market value of the property on the date you change your apartment to business use. 1040x amended tax return form This is considered to be the same as the corporation's adjusted basis minus straight line depreciation, unless this value is unrealistic. 1040x amended tax return form The corporation's adjusted basis in the property on that date. 1040x amended tax return form Do not subtract depreciation when figuring the corporation's adjusted basis. 1040x amended tax return form   If you bought the stock after its first offering, the corporation's adjusted basis in the property is the amount figured in (1), above. 1040x amended tax return form The fair market value of the property is considered to be the same as the corporation's adjusted basis figured in this way minus straight line depreciation, unless the value is unrealistic. 1040x amended tax return form   For a discussion of fair market value and adjusted basis, see Publication 551. 1040x amended tax return form Property Used in Your Business or Income-Producing Activity To claim depreciation on property, you must use it in your business or income-producing activity. 1040x amended tax return form If you use property to produce income (investment use), the income must be taxable. 1040x amended tax return form You cannot depreciate property that you use solely for personal activities. 1040x amended tax return form Partial business or investment use. 1040x amended tax return form   If you use property for business or investment purposes and for personal purposes, you can deduct depreciation based only on the business or investment use. 1040x amended tax return form For example, you cannot deduct depreciation on a car used only for commuting, personal shopping trips, family vacations, driving children to and from school, or similar activities. 1040x amended tax return form    You must keep records showing the business, investment, and personal use of your property. 1040x amended tax return form For more information on the records you must keep for listed property, such as a car, see What Records Must Be Kept in chapter 5. 1040x amended tax return form    Although you can combine business and investment use of property when figuring depreciation deductions, do not treat investment use as qualified business use when determining whether the business-use requirement for listed property is met. 1040x amended tax return form For information about qualified business use of listed property, see What Is the Business-Use Requirement in chapter 5. 1040x amended tax return form Office in the home. 1040x amended tax return form   If you use part of your home as an office, you may be able to deduct depreciation on that part based on its business use. 1040x amended tax return form For information about depreciating your home office, see Publication 587. 1040x amended tax return form Inventory. 1040x amended tax return form   You cannot depreciate inventory because it is not held for use in your business. 1040x amended tax return form Inventory is any property you hold primarily for sale to customers in the ordinary course of your business. 1040x amended tax return form   If you are a rent-to-own dealer, you may be able to treat certain property held in your business as depreciable property rather than as inventory. 1040x amended tax return form See Rent-to-own dealer under Which Property Class Applies Under GDS in chapter 4. 1040x amended tax return form   In some cases, it is not clear whether property is held for sale (inventory) or for use in your business. 1040x amended tax return form If it is unclear, examine carefully all the facts in the operation of the particular business. 1040x amended tax return form The following example shows how a careful examination of the facts in two similar situations results in different conclusions. 1040x amended tax return form Example. 1040x amended tax return form Maple Corporation is in the business of leasing cars. 1040x amended tax return form At the end of their useful lives, when the cars are no longer profitable to lease, Maple sells them. 1040x amended tax return form Maple does not have a showroom, used car lot, or individuals to sell the cars. 1040x amended tax return form Instead, it sells them through wholesalers or by similar arrangements in which a dealer's profit is not intended or considered. 1040x amended tax return form Maple can depreciate the leased cars because the cars are not held primarily for sale to customers in the ordinary course of business, but are leased. 1040x amended tax return form If Maple buys cars at wholesale prices, leases them for a short time, and then sells them at retail prices or in sales in which a dealer's profit is intended, the cars are treated as inventory and are not depreciable property. 1040x amended tax return form In this situation, the cars are held primarily for sale to customers in the ordinary course of business. 1040x amended tax return form Containers. 1040x amended tax return form   Generally, containers for the products you sell are part of inventory and you cannot depreciate them. 1040x amended tax return form However, you can depreciate containers used to ship your products if they have a life longer than one year and meet the following requirements. 1040x amended tax return form They qualify as property used in your business. 1040x amended tax return form Title to the containers does not pass to the buyer. 1040x amended tax return form   To determine if these requirements are met, consider the following questions. 1040x amended tax return form Does your sales contract, sales invoice, or other type of order acknowledgment indicate whether you have retained title? Does your invoice treat the containers as separate items? Do any of your records state your basis in the containers? Property Having a Determinable Useful Life To be depreciable, your property must have a determinable useful life. 1040x amended tax return form This means that it must be something that wears out, decays, gets used up, becomes obsolete, or loses its value from natural causes. 1040x amended tax return form Property Lasting More Than One Year To be depreciable, property must have a useful life that extends substantially beyond the year you place it in service. 1040x amended tax return form Example. 1040x amended tax return form You maintain a library for use in your profession. 1040x amended tax return form You can depreciate it. 1040x amended tax return form However, if you buy technical books, journals, or information services for use in your business that have a useful life of one year or less, you cannot depreciate them. 1040x amended tax return form Instead, you deduct their cost as a business expense. 1040x amended tax return form What Property Cannot Be Depreciated? Certain property cannot be depreciated. 1040x amended tax return form This includes land and certain excepted property. 1040x amended tax return form Land You cannot depreciate the cost of land because land does not wear out, become obsolete, or get used up. 1040x amended tax return form The cost of land generally includes the cost of clearing, grading, planting, and landscaping. 1040x amended tax return form Although you cannot depreciate land, you can depreciate certain land preparation costs, such as landscaping costs, incurred in preparing land for business use. 1040x amended tax return form These costs must be so closely associated with other depreciable property that you can determine a life for them along with the life of the associated property. 1040x amended tax return form Example. 1040x amended tax return form You constructed a new building for use in your business and paid for grading, clearing, seeding, and planting bushes and trees. 1040x amended tax return form Some of the bushes and trees were planted right next to the building, while others were planted around the outer border of the lot. 1040x amended tax return form If you replace the building, you would have to destroy the bushes and trees right next to it. 1040x amended tax return form These bushes and trees are closely associated with the building, so they have a determinable useful life. 1040x amended tax return form Therefore, you can depreciate them. 1040x amended tax return form Add your other land preparation costs to the basis of your land because they have no determinable life and you cannot depreciate them. 1040x amended tax return form Excepted Property Even if the requirements explained in the preceding discussions are met, you cannot depreciate the following property. 1040x amended tax return form Property placed in service and disposed of in the same year. 1040x amended tax return form Determining when property is placed in service is explained later. 1040x amended tax return form Equipment used to build capital improvements. 1040x amended tax return form You must add otherwise allowable depreciation on the equipment during the period of construction to the basis of your improvements. 1040x amended tax return form See Uniform Capitalization Rules in Publication 551. 1040x amended tax return form Section 197 intangibles. 1040x amended tax return form You must amortize these costs. 1040x amended tax return form Section 197 intangibles are discussed in detail in Chapter 8 of Publication 535. 1040x amended tax return form Intangible property, such as certain computer software, that is not section 197 intangible property, can be depreciated if it meets certain requirements. 1040x amended tax return form See Intangible Property , later. 1040x amended tax return form Certain term interests. 1040x amended tax return form Certain term interests in property. 1040x amended tax return form   You cannot depreciate a term interest in property created or acquired after July 27, 1989, for any period during which the remainder interest is held, directly or indirectly, by a person related to you. 1040x amended tax return form A term interest in property means a life interest in property, an interest in property for a term of years, or an income interest in a trust. 1040x amended tax return form Related persons. 1040x amended tax return form   For a description of related persons, see Related Persons, later. 1040x amended tax return form For this purpose, however, treat as related persons only the relationships listed in items (1) through (10) of that discussion and substitute “50%” for “10%” each place it appears. 1040x amended tax return form Basis adjustments. 1040x amended tax return form   If you would be allowed a depreciation deduction for a term interest in property except that the holder of the remainder interest is related to you, you generally must reduce your basis in the term interest by any depreciation or amortization not allowed. 1040x amended tax return form   If you hold the remainder interest, you generally must increase your basis in that interest by the depreciation not allowed to the term interest holder. 1040x amended tax return form However, do not increase your basis for depreciation not allowed for periods during which either of the following situations applies. 1040x amended tax return form The term interest is held by an organization exempt from tax. 1040x amended tax return form The term interest is held by a nonresident alien individual or foreign corporation, and the income from the term interest is not effectively connected with the conduct of a trade or business in the United States. 1040x amended tax return form Exceptions. 1040x amended tax return form   The above rules do not apply to the holder of a term interest in property acquired by gift, bequest, or inheritance. 1040x amended tax return form They also do not apply to the holder of dividend rights that were separated from any stripped preferred stock if the rights were purchased after April 30, 1993, or to a person whose basis in the stock is determined by reference to the basis in the hands of the purchaser. 1040x amended tax return form When Does Depreciation Begin and End? You begin to depreciate your property when you place it in service for use in your trade or business or for the production of income. 1040x amended tax return form You stop depreciating property either when you have fully recovered your cost or other basis or when you retire it from service, whichever happens first. 1040x amended tax return form Placed in Service You place property in service when it is ready and available for a specific use, whether in a business activity, an income-producing activity, a tax-exempt activity, or a personal activity. 1040x amended tax return form Even if you are not using the property, it is in service when it is ready and available for its specific use. 1040x amended tax return form Example 1. 1040x amended tax return form Donald Steep bought a machine for his business. 1040x amended tax return form The machine was delivered last year. 1040x amended tax return form However, it was not installed and operational until this year. 1040x amended tax return form It is considered placed in service this year. 1040x amended tax return form If the machine had been ready and available for use when it was delivered, it would be considered placed in service last year even if it was not actually used until this year. 1040x amended tax return form Example 2. 1040x amended tax return form On April 6, Sue Thorn bought a house to use as residential rental property. 1040x amended tax return form She made several repairs and had it ready for rent on July 5. 1040x amended tax return form At that time, she began to advertise it for rent in the local newspaper. 1040x amended tax return form The house is considered placed in service in July when it was ready and available for rent. 1040x amended tax return form She can begin to depreciate it in July. 1040x amended tax return form Example 3. 1040x amended tax return form James Elm is a building contractor who specializes in constructing office buildings. 1040x amended tax return form He bought a truck last year that had to be modified to lift materials to second-story levels. 1040x amended tax return form The installation of the lifting equipment was completed and James accepted delivery of the modified truck on January 10 of this year. 1040x amended tax return form The truck was placed in service on January 10, the date it was ready and available to perform the function for which it was bought. 1040x amended tax return form Conversion to business use. 1040x amended tax return form   If you place property in service in a personal activity, you cannot claim depreciation. 1040x amended tax return form However, if you change the property's use to use in a business or income-producing activity, then you can begin to depreciate it at the time of the change. 1040x amended tax return form You place the property in service in the business or income-producing activity on the date of the change. 1040x amended tax return form Example. 1040x amended tax return form You bought a home and used it as your personal home several years before you converted it to rental property. 1040x amended tax return form Although its specific use was personal and no depreciation was allowable, you placed the home in service when you began using it as your home. 1040x amended tax return form You can begin to claim depreciation in the year you converted it to rental property because its use changed to an income-producing use at that time. 1040x amended tax return form Idle Property Continue to claim a deduction for depreciation on property used in your business or for the production of income even if it is temporarily idle (not in use). 1040x amended tax return form For example, if you stop using a machine because there is a temporary lack of a market for a product made with that machine, continue to deduct depreciation on the machine. 1040x amended tax return form Cost or Other Basis Fully Recovered You stop depreciating property when you have fully recovered your cost or other basis. 1040x amended tax return form You recover your basis when your section 179 and allowed or allowable depreciation deductions equal your cost or investment in the property. 1040x amended tax return form See What Is the Basis of Your Depreciable Property , later. 1040x amended tax return form Retired From Service You stop depreciating property when you retire it from service, even if you have not fully recovered its cost or other basis. 1040x amended tax return form You retire property from service when you permanently withdraw it from use in a trade or business or from use in the production of income because of any of the following events. 1040x amended tax return form You sell or exchange the property. 1040x amended tax return form You convert the property to personal use. 1040x amended tax return form You abandon the property. 1040x amended tax return form You transfer the property to a supplies or scrap account. 1040x amended tax return form The property is destroyed. 1040x amended tax return form If you included the property in a general asset account, see How Do You Use General Asset Accounts in chapter 4 for the rules that apply when you dispose of that property. 1040x amended tax return form What Method Can You Use To Depreciate Your Property? You must use the Modified Accelerated Cost Recovery System (MACRS) to depreciate most property. 1040x amended tax return form MACRS is discussed in chapter 4. 1040x amended tax return form You cannot use MACRS to depreciate the following property. 1040x amended tax return form Property you placed in service before 1987. 1040x amended tax return form Certain property owned or used in 1986. 1040x amended tax return form Intangible property. 1040x amended tax return form Films, video tapes, and recordings. 1040x amended tax return form Certain corporate or partnership property acquired in a nontaxable transfer. 1040x amended tax return form Property you elected to exclude from MACRS. 1040x amended tax return form The following discussions describe the property listed above and explain what depreciation method should be used. 1040x amended tax return form Property You Placed in Service Before 1987 You cannot use MACRS for property you placed in service before 1987 (except property you placed in service after July 31, 1986, if MACRS was elected). 1040x amended tax return form Property placed in service before 1987 must be depreciated under the methods discussed in Publication 534. 1040x amended tax return form For a discussion of when property is placed in service, see When Does Depreciation Begin and End , earlier. 1040x amended tax return form Use of real property changed. 1040x amended tax return form   You generally must use MACRS to depreciate real property that you acquired for personal use before 1987 and changed to business or income-producing use after 1986. 1040x amended tax return form Improvements made after 1986. 1040x amended tax return form   You must treat an improvement made after 1986 to property you placed in service before 1987 as separate depreciable property. 1040x amended tax return form Therefore, you can depreciate that improvement as separate property under MACRS if it is the type of property that otherwise qualifies for MACRS depreciation. 1040x amended tax return form For more information about improvements, see How Do You Treat Repairs and Improvements , later and Additions and Improvements under Which Recovery Period Applies in chapter 4. 1040x amended tax return form Property Owned or Used in 1986 You may not be able to use MACRS for property you acquired and placed in service after 1986 if any of the situations described below apply. 1040x amended tax return form If you cannot use MACRS, the property must be depreciated under the methods discussed in Publication 534. 1040x amended tax return form For the following discussions, do not treat property as owned before you placed it in service. 1040x amended tax return form If you owned property in 1986 but did not place it in service until 1987, you do not treat it as owned in 1986. 1040x amended tax return form Personal property. 1040x amended tax return form   You cannot use MACRS for personal property (section 1245 property) in any of the following situations. 1040x amended tax return form You or someone related to you owned or used the property in 1986. 1040x amended tax return form You acquired the property from a person who owned it in 1986 and as part of the transaction the user of the property did not change. 1040x amended tax return form You lease the property to a person (or someone related to this person) who owned or used the property in 1986. 1040x amended tax return form You acquired the property in a transaction in which: The user of the property did not change, and The property was not MACRS property in the hands of the person from whom you acquired it because of (2) or (3) above. 1040x amended tax return form Real property. 1040x amended tax return form   You generally cannot use MACRS for real property (section 1250 property) in any of the following situations. 1040x amended tax return form You or someone related to you owned the property in 1986. 1040x amended tax return form You lease the property to a person who owned the property in 1986 (or someone related to that person). 1040x amended tax return form You acquired the property in a like-kind exchange, involuntary conversion, or repossession of property you or someone related to you owned in 1986. 1040x amended tax return form MACRS applies only to that part of your basis in the acquired property that represents cash paid or unlike property given up. 1040x amended tax return form It does not apply to the carried-over part of the basis. 1040x amended tax return form Exceptions. 1040x amended tax return form   The rules above do not apply to the following. 1040x amended tax return form Residential rental property or nonresidential real property. 1040x amended tax return form Any property if, in the first tax year it is placed in service, the deduction under the Accelerated Cost Recovery System (ACRS) is more than the deduction under MACRS using the half-year convention. 1040x amended tax return form For information on how to figure depreciation under ACRS, see Publication 534. 1040x amended tax return form Property that was MACRS property in the hands of the person from whom you acquired it because of (2) above. 1040x amended tax return form Related persons. 1040x amended tax return form   For this purpose, the following are related persons. 1040x amended tax return form An individual and a member of his or her family, including only a spouse, child, parent, brother, sister, half-brother, half-sister, ancestor, and lineal descendant. 1040x amended tax return form A corporation and an individual who directly or indirectly owns more than 10% of the value of the outstanding stock of that corporation. 1040x amended tax return form Two corporations that are members of the same controlled group. 1040x amended tax return form A trust fiduciary and a corporation if more than 10% of the value of the outstanding stock is directly or indirectly owned by or for the trust or grantor of the trust. 1040x amended tax return form The grantor and fiduciary, and the fiduciary and beneficiary, of any trust. 1040x amended tax return form The fiduciaries of two different trusts, and the fiduciaries and beneficiaries of two different trusts, if the same person is the grantor of both trusts. 1040x amended tax return form A tax-exempt educational or charitable organization and any person (or, if that person is an individual, a member of that person's family) who directly or indirectly controls the organization. 1040x amended tax return form Two S corporations, and an S corporation and a regular corporation, if the same persons own more than 10% of the value of the outstanding stock of each corporation. 1040x amended tax return form A corporation and a partnership if the same persons own both of the following. 1040x amended tax return form More than 10% of the value of the outstanding stock of the corporation. 1040x amended tax return form More than 10% of the capital or profits interest in the partnership. 1040x amended tax return form The executor and beneficiary of any estate. 1040x amended tax return form A partnership and a person who directly or indirectly owns more than 10% of the capital or profits interest in the partnership. 1040x amended tax return form Two partnerships, if the same persons directly or indirectly own more than 10% of the capital or profits interest in each. 1040x amended tax return form The related person and a person who is engaged in trades or businesses under common control. 1040x amended tax return form See section 52(a) and 52(b) of the Internal Revenue Code. 1040x amended tax return form When to determine relationship. 1040x amended tax return form   You must determine whether you are related to another person at the time you acquire the property. 1040x amended tax return form   A partnership acquiring property from a terminating partnership must determine whether it is related to the terminating partnership immediately before the event causing the termination. 1040x amended tax return form For this rule, a terminating partnership is one that sells or exchanges, within 12 months, 50% or more of its total interest in partnership capital or profits. 1040x amended tax return form Constructive ownership of stock or partnership interest. 1040x amended tax return form   To determine whether a person directly or indirectly owns any of the outstanding stock of a corporation or an interest in a partnership, apply the following rules. 1040x amended tax return form Stock or a partnership interest directly or indirectly owned by or for a corporation, partnership, estate, or trust is considered owned proportionately by or for its shareholders, partners, or beneficiaries. 1040x amended tax return form However, for a partnership interest owned by or for a C corporation, this applies only to shareholders who directly or indirectly own 5% or more of the value of the stock of the corporation. 1040x amended tax return form An individual is considered to own the stock or partnership interest directly or indirectly owned by or for the individual's family. 1040x amended tax return form An individual who owns, except by applying rule (2), any stock in a corporation is considered to own the stock directly or indirectly owned by or for the individual's partner. 1040x amended tax return form For purposes of rules (1), (2), or (3), stock or a partnership interest considered to be owned by a person under rule (1) is treated as actually owned by that person. 1040x amended tax return form However, stock or a partnership interest considered to be owned by an individual under rule (2) or (3) is not treated as owned by that individual for reapplying either rule (2) or (3) to make another person considered to be the owner of the same stock or partnership interest. 1040x amended tax return form Intangible Property Generally, if you can depreciate intangible property, you usually use the straight line method of depreciation. 1040x amended tax return form However, you can choose to depreciate certain intangible property under the income forecast method (discussed later). 1040x amended tax return form You cannot depreciate intangible property that is a section 197 intangible or that otherwise does not meet all the requirements discussed earlier under What Property Can Be Depreciated. 1040x amended tax return form Straight Line Method This method lets you deduct the same amount of depreciation each year over the useful life of the property. 1040x amended tax return form To figure your deduction, first determine the adjusted basis, salvage value, and estimated useful life of your property. 1040x amended tax return form Subtract the salvage value, if any, from the adjusted basis. 1040x amended tax return form The balance is the total depreciation you can take over the useful life of the property. 1040x amended tax return form Divide the balance by the number of years in the useful life. 1040x amended tax return form This gives you your yearly depreciation deduction. 1040x amended tax return form Unless there is a big change in adjusted basis or useful life, this amount will stay the same throughout the time you depreciate the property. 1040x amended tax return form If, in the first year, you use the property for less than a full year, you must prorate your depreciation deduction for the number of months in use. 1040x amended tax return form Example. 1040x amended tax return form In April, Frank bought a patent for $5,100 that is not a section 197 intangible. 1040x amended tax return form He depreciates the patent under the straight line method, using a 17-year useful life and no salvage value. 1040x amended tax return form He divides the $5,100 basis by 17 years to get his $300 yearly depreciation deduction. 1040x amended tax return form He only used the patent for 9 months during the first year, so he multiplies $300 by 9/12 to get his deduction of $225 for the first year. 1040x amended tax return form Next year, Frank can deduct $300 for the full year. 1040x amended tax return form Patents and copyrights. 1040x amended tax return form   If you can depreciate the cost of a patent or copyright, use the straight line method over the useful life. 1040x amended tax return form The useful life of a patent or copyright is the lesser of the life granted to it by the government or the remaining life when you acquire it. 1040x amended tax return form However, if the patent or copyright becomes valueless before the end of its useful life, you can deduct in that year any of its remaining cost or other basis. 1040x amended tax return form Computer software. 1040x amended tax return form   Computer software is generally a section 197 intangible and cannot be depreciated if you acquired it in connection with the acquisition of assets constituting a business or a substantial part of a business. 1040x amended tax return form   However, computer software is not a section 197 intangible and can be depreciated, even if acquired in connection with the acquisition of a business, if it meets all of the following tests. 1040x amended tax return form It is readily available for purchase by the general public. 1040x amended tax return form It is subject to a nonexclusive license. 1040x amended tax return form It has not been substantially modified. 1040x amended tax return form   If the software meets the tests above, it may also qualify for the section 179 deduction and the special depreciation allowance, discussed later. 1040x amended tax return form If you can depreciate the cost of computer software, use the straight line method over a useful life of 36 months. 1040x amended tax return form    Tax-exempt use property subject to a lease. 1040x amended tax return form   The useful life of computer software leased under a lease agreement entered into after March 12, 2004, to a tax-exempt organization, governmental unit, or foreign person or entity (other than a partnership), cannot be less than 125% of the lease term. 1040x amended tax return form Certain created intangibles. 1040x amended tax return form   You can amortize certain intangibles created on or after December 31, 2003, over a 15-year period using the straight line method and no salvage value, even though they have a useful life that cannot be estimated with reasonable accuracy. 1040x amended tax return form For example, amounts paid to acquire memberships or privileges of indefinite duration, such as a trade association membership, are eligible costs. 1040x amended tax return form   The following are not eligible. 1040x amended tax return form Any intangible asset acquired from another person. 1040x amended tax return form Created financial interests. 1040x amended tax return form Any intangible asset that has a useful life that can be estimated with reasonable accuracy. 1040x amended tax return form Any intangible asset that has an amortization period or limited useful life that is specifically prescribed or prohibited by the Code, regulations, or other published IRS guidance. 1040x amended tax return form Any amount paid to facilitate an acquisition of a trade or business, a change in the capital structure of a business entity, and certain other transactions. 1040x amended tax return form   You must also increase the 15-year safe harbor amortization period to a 25-year period for certain intangibles related to benefits arising from the provision, production, or improvement of real property. 1040x amended tax return form For this purpose, real property includes property that will remain attached to the real property for an indefinite period of time, such as roads, bridges, tunnels, pavements, and pollution control facilities. 1040x amended tax return form Income Forecast Method You can choose to use the income forecast method instead of the straight line method to depreciate the following depreciable intangibles. 1040x amended tax return form Motion picture films or video tapes. 1040x amended tax return form Sound recordings. 1040x amended tax return form Copyrights. 1040x amended tax return form Books. 1040x amended tax return form Patents. 1040x amended tax return form Under the income forecast method, each year's depreciation deduction is equal to the cost of the property, multiplied by a fraction. 1040x amended tax return form The numerator of the fraction is the current year's net income from the property, and the denominator is the total income anticipated from the property through the end of the 10th taxable year following the taxable year the property is placed in service. 1040x amended tax return form For more information, see section 167(g) of the Internal Revenue Code. 1040x amended tax return form Films, video tapes, and recordings. 1040x amended tax return form   You cannot use MACRS for motion picture films, video tapes, and sound recordings. 1040x amended tax return form For this purpose, sound recordings are discs, tapes, or other phonorecordings resulting from the fixation of a series of sounds. 1040x amended tax return form You can depreciate this property using either the straight line method or the income forecast method. 1040x amended tax return form Participations and residuals. 1040x amended tax return form   You can include participations and residuals in the adjusted basis of the property for purposes of computing your depreciation deduction under the income forecast method. 1040x amended tax return form The participations and residuals must relate to income to be derived from the property before the end of the 10th taxable year after the property is placed in service. 1040x amended tax return form For this purpose, participations and residuals are defined as costs which by contract vary with the amount of income earned in connection with the property. 1040x amended tax return form   Instead of including these amounts in the adjusted basis of the property, you can deduct the costs in the taxable year that they are paid. 1040x amended tax return form Videocassettes. 1040x amended tax return form   If you are in the business of renting videocassettes, you can depreciate only those videocassettes bought for rental. 1040x amended tax return form If the videocassette has a useful life of one year or less, you can currently deduct the cost as a business expense. 1040x amended tax return form Corporate or Partnership Property Acquired in a Nontaxable Transfer MACRS does not apply to property used before 1987 and transferred after 1986 to a corporation or partnership (except property the transferor placed in service after July 31, 1986, if MACRS was elected) to the extent its basis is carried over from the property's adjusted basis in the transferor's hands. 1040x amended tax return form You must continue to use the same depreciation method as the transferor and figure depreciation as if the transfer had not occurred. 1040x amended tax return form However, if MACRS would otherwise apply, you can use it to depreciate the part of the property's basis that exceeds the carried-over basis. 1040x amended tax return form The nontaxable transfers covered by this rule include the following. 1040x amended tax return form A distribution in complete liquidation of a subsidiary. 1040x amended tax return form A transfer to a corporation controlled by the transferor. 1040x amended tax return form An exchange of property solely for corporate stock or securities in a reorganization. 1040x amended tax return form A contribution of property to a partnership in exchange for a partnership interest. 1040x amended tax return form A partnership distribution of property to a partner. 1040x amended tax return form Election To Exclude Property From MACRS If you can properly depreciate any property under a method not based on a term of years, such as the unit-of-production method, you can elect to exclude that property from MACRS. 1040x amended tax return form You make the election by reporting your depreciation for the property on line 15 in Part II of Form 4562 and attaching a statement as described in the instructions for Form 4562. 1040x amended tax return form You must make this election by the return due date (including extensions) for the tax year you place your property in service. 1040x amended tax return form However, if you timely filed your return for the year without making the election, you can still make the election by filing an amended return within six months of the due date of the return (excluding extensions). 1040x amended tax return form Attach the election to the amended return and write “Filed pursuant to section 301. 1040x amended tax return form 9100-2” on the election statement. 1040x amended tax return form File the amended return at the same address you filed the original return. 1040x amended tax return form Use of standard mileage rate. 1040x amended tax return form   If you use the standard mileage rate to figure your tax deduction for your business automobile, you are treated as having made an election to exclude the automobile from MACRS. 1040x amended tax return form See Publication 463 for a discussion of the standard mileage rate. 1040x amended tax return form What Is the Basis of Your Depreciable Property? To figure your depreciation deduction, you must determine the basis of your property. 1040x amended tax return form To determine basis, you need to know the cost or other basis of your property. 1040x amended tax return form Cost as Basis The basis of property you buy is its cost plus amounts you paid for items such as sales tax (see Exception , below), freight charges, and installation and testing fees. 1040x amended tax return form The cost includes the amount you pay in cash, debt obligations, other property, or services. 1040x amended tax return form Exception. 1040x amended tax return form   You can elect to deduct state and local general sales taxes instead of state and local income taxes as an itemized deduction on Schedule A (Form 1040). 1040x amended tax return form If you make that choice, you cannot include those sales taxes as part of your cost basis. 1040x amended tax return form Assumed debt. 1040x amended tax return form   If you buy property and assume (or buy subject to) an existing mortgage or other debt on the property, your basis includes the amount you pay for the property plus the amount of the assumed debt. 1040x amended tax return form Example. 1040x amended tax return form You make a $20,000 down payment on property and assume the seller's mortgage of $120,000. 1040x amended tax return form Your total cost is $140,000, the cash you paid plus the mortgage you assumed. 1040x amended tax return form Settlement costs. 1040x amended tax return form   The basis of real property also includes certain fees and charges you pay in addition to the purchase price. 1040x amended tax return form These generally are shown on your settlement statement and include the following. 1040x amended tax return form Legal and recording fees. 1040x amended tax return form Abstract fees. 1040x amended tax return form Survey charges. 1040x amended tax return form Owner's title insurance. 1040x amended tax return form Amounts the seller owes that you agree to pay, such as back taxes or interest, recording or mortgage fees, charges for improvements or repairs, and sales commissions. 1040x amended tax return form   For fees and charges you cannot include in the basis of property, see Real Property in Publication 551. 1040x amended tax return form Property you construct or build. 1040x amended tax return form   If you construct, build, or otherwise produce property for use in your business, you may have to use the uniform capitalization rules to determine the basis of your property. 1040x amended tax return form For information about the uniform capitalization rules, see Publication 551 and the regulations under section 263A of the Internal Revenue Code. 1040x amended tax return form Other Basis Other basis usually refers to basis that is determined by the way you received the property. 1040x amended tax return form For example, your basis is other than cost if you acquired the property in exchange for other property, as payment for services you performed, as a gift, or as an inheritance. 1040x amended tax return form If you acquired property in this or some other way, see Publication 551 to determine your basis. 1040x amended tax return form Property changed from personal use. 1040x amended tax return form   If you held property for personal use and later use it in your business or income-producing activity, your depreciable basis is the lesser of the following. 1040x amended tax return form The fair market value (FMV) of the property on the date of the change in use. 1040x amended tax return form Your original cost or other basis adjusted as follows. 1040x amended tax return form Increased by the cost of any permanent improvements or additions and other costs that must be added to basis. 1040x amended tax return form Decreased by any deductions you claimed for casualty and theft losses and other items that reduced your basis. 1040x amended tax return form Example. 1040x amended tax return form Several years ago, Nia paid $160,000 to have her home built on a lot that cost her $25,000. 1040x amended tax return form Before changing the property to rental use last year, she paid $20,000 for permanent improvements to the house and claimed a $2,000 casualty loss deduction for damage to the house. 1040x amended tax return form Land is not depreciable, so she includes only the cost of the house when figuring the basis for depreciation. 1040x amended tax return form Nia's adjusted basis in the house when she changed its use was $178,000 ($160,000 + $20,000 − $2,000). 1040x amended tax return form On the same date, her property had an FMV of $180,000, of which $15,000 was for the land and $165,000 was for the house. 1040x amended tax return form The basis for depreciation on the house is the FMV on the date of change ($165,000), because it is less than her adjusted basis ($178,000). 1040x amended tax return form Property acquired in a nontaxable transaction. 1040x amended tax return form   Generally, if you receive property in a nontaxable exchange, the basis of the property you receive is the same as the adjusted basis of the property you gave up. 1040x amended tax return form Special rules apply in determining the basis and figuring the MACRS depreciation deduction and special depreciation allowance for property acquired in a like-kind exchange or involuntary conversion. 1040x amended tax return form See Like-kind exchanges and involuntary conversions. 1040x amended tax return form under How Much Can You Deduct? in chapter 3 and Figuring the Deduction for Property Acquired in a Nontaxable Exchange in chapter 4. 1040x amended tax return form   There are also special rules for determining the basis of MACRS property involved in a like-kind exchange or involuntary conversion when the property is contained in a general asset account. 1040x amended tax return form See How Do You Use General Asset Accounts in chapter 4. 1040x amended tax return form Adjusted Basis To find your property's basis for depreciation, you may have to make certain adjustments (increases and decreases) to the basis of the property for events occurring between the time you acquired the property and the time you placed it in service. 1040x amended tax return form These events could include the following. 1040x amended tax return form Installing utility lines. 1040x amended tax return form Paying legal fees for perfecting the title. 1040x amended tax return form Settling zoning issues. 1040x amended tax return form Receiving rebates. 1040x amended tax return form Incurring a casualty or theft loss. 1040x amended tax return form For a discussion of adjustments to the basis of your property, see Adjusted Basis in Publication 551. 1040x amended tax return form If you depreciate your property under MACRS, you also may have to reduce your basis by certain deductions and credits with respect to the property. 1040x amended tax return form For more information, see What Is the Basis for Depreciation in chapter 4. 1040x amended tax return form . 1040x amended tax return form Basis adjustment for depreciation allowed or allowable. 1040x amended tax return form   You must reduce the basis of property by the depreciation allowed or allowable, whichever is greater. 1040x amended tax return form Depreciation allowed is depreciation you actually deducted (from which you received a tax benefit). 1040x amended tax return form Depreciation allowable is depreciation you are entitled to deduct. 1040x amended tax return form   If you do not claim depreciation you are entitled to deduct, you must still reduce the basis of the property by the full amount of depreciation allowable. 1040x amended tax return form   If you deduct more depreciation than you should, you must reduce your basis by any amount deducted from which you received a tax benefit (the depreciation allowed). 1040x amended tax return form How Do You Treat Repairs and Improvements? If you improve depreciable property, you must treat the improvement as separate depreciable property. 1040x amended tax return form Improvement means an addition to or partial replacement of property that adds to its value, appreciably lengthens the time you can use it, or adapts it to a different use. 1040x amended tax return form You generally deduct the cost of repairing business property in the same way as any other business expense. 1040x amended tax return form However, if a repair or replacement increases the value of your property, makes it more useful, or lengthens its life, you must treat it as an improvement and depreciate it. 1040x amended tax return form Example. 1040x amended tax return form You repair a small section on one corner of the roof of a rental house. 1040x amended tax return form You deduct the cost of the repair as a rental expense. 1040x amended tax return form However, if you completely replace the roof, the new roof is an improvement because it increases the value and lengthens the life of the property. 1040x amended tax return form You depreciate the cost of the new roof. 1040x amended tax return form Improvements to rented property. 1040x amended tax return form   You can depreciate permanent improvements you make to business property you rent from someone else. 1040x amended tax return form Do You Have To File Form 4562? Use Form 4562 to figure your deduction for depreciation and amortization. 1040x amended tax return form Attach Form 4562 to your tax return for the current tax year if you are claiming any of the following items. 1040x amended tax return form A section 179 deduction for the current year or a section 179 carryover from a prior year. 1040x amended tax return form See chapter 2 for information on the section 179 deduction. 1040x amended tax return form Depreciation for property placed in service during the current year. 1040x amended tax return form Depreciation on any vehicle or other listed property, regardless of when it was placed in service. 1040x amended tax return form See chapter 5 for information on listed property. 1040x amended tax return form A deduction for any vehicle if the deduction is reported on a form other than Schedule C (Form 1040) or Schedule C-EZ (Form 1040). 1040x amended tax return form Amortization of costs if the current year is the first year of the amortization period. 1040x amended tax return form Depreciation or amortization on any asset on a corporate income tax return (other than Form 1120S, U. 1040x amended tax return form S. 1040x amended tax return form Income Tax Return for an S Corporation) regardless of when it was placed in service. 1040x amended tax return form You must submit a separate Form 4562 for each business or activity on your return for which a Form 4562 is required. 1040x amended tax return form Table 1-1 presents an overview of the purpose of the various parts of Form 4562. 1040x amended tax return form Employee. 1040x amended tax return form   Do not use Form 4562 if you are an employee and you deduct job-related vehicle expenses using either actual expenses (including depreciation) or the standard mileage rate. 1040x amended tax return form Instead, use either Form 2106 or Form 2106-EZ. 1040x amended tax return form Use Form 2106-EZ if you are claiming the standard mileage rate and you are not reimbursed by your employer for any expenses. 1040x amended tax return form How Do You Correct Depreciation Deductions? If you deducted an incorrect amount of depreciation in any year, you may be able to make a correction by filing an amended return for that year. 1040x amended tax return form See Filing an Amended Return , next. 1040x amended tax return form If you are not allowed to make the correction on an amended return, you may be able to change your accounting method to claim the correct amount of depreciation. 1040x amended tax return form See Changing Your Accounting Method , later. 1040x amended tax return form Filing an Amended Return You can file an amended return to correct the amount of depreciation claimed for any property in any of the following situations. 1040x amended tax return form You claimed the incorrect amount because of a mathematical error made in any year. 1040x amended tax return form You claimed the incorrect amount because of a posting error made in any year. 1040x amended tax return form You have not adopted a method of accounting for property placed in service by you in tax years ending after December 29, 2003. 1040x amended tax return form You claimed the incorrect amount on property placed in service by you in tax years ending before December 30, 2003. 1040x amended tax return form Adoption of accounting method defined. 1040x amended tax return form   Generally, you adopt a method of accounting for depreciation by using a permissible method of determining depreciation when you file your first tax return, or by using the same impermissible method of determining depreciation in two or more consecutively filed tax returns. 1040x amended tax return form   For an exception to this 2-year rule, see Revenue Procedure 2011-14 on page 330 of the Internal Revenue Bulletin 2011-4, available at www. 1040x amended tax return form irs. 1040x amended tax return form gov/pub/irs-irbs/irb11-04. 1040x amended tax return form pdf. 1040x amended tax return form (Note. 1040x amended tax return form Revenue Procedure 2011-14 is clarified and modified by Revenue Procedure 2012-20. 1040x amended tax return form For more information, see Revenue Procedure 2012-20 on page 700 of the Internal Revenue Bulletin 2012-14, available at www. 1040x amended tax return form irs. 1040x amended tax return form gov/pub/irs-irbs/irb12-14. 1040x amended tax return form pdf. 1040x amended tax return form )   For a safe harbor method of accounting to treat rotable spare parts as depreciable assets and procedures to obtain automatic consent to change to the safe harbor method of accounting, see Revenue Procedure 2007-48 on page 110 of Internal Revenue Bulletin 2007-29, available at www. 1040x amended tax return form irs. 1040x amended tax return form gov/pub/irs-irbs/irb07-29. 1040x amended tax return form pdf. 1040x amended tax return form When to file. 1040x amended tax return form   If an amended return is allowed, you must file it by the later of the following. 1040x amended tax return form 3 years from the date you filed your original return for the year in which you did not deduct the correct amount. 1040x amended tax return form A return filed before an unextended due date is considered filed on that due date. 1040x amended tax return form 2 years from the time you paid your tax for that year. 1040x amended tax return form Changing Your Accounting Method Generally, you must get IRS approval to change your method of accounting. 1040x amended tax return form You generally must file Form 3115, Application for Change in Accounting Method, to request a change in your method of accounting for depreciation. 1040x amended tax return form The following are examples of a change in method of accounting for depreciation. 1040x amended tax return form A change from an impermissible method of determining depreciation for depreciable property, if the impermissible method was used in two or more consecutively filed tax returns. 1040x amended tax return form A change in the treatment of an asset from nondepreciable to depreciable or vice versa. 1040x amended tax return form A change in the depreciation method, period of recovery, or convention of a depreciable asset. 1040x amended tax return form A change from not claiming to claiming the special depreciation allowance if you did not make the election to not claim any special allowance. 1040x amended tax return form A change from claiming a 50% special depreciation allowance to claiming a 30% special depreciation allowance for qualified property (including property that is included in a class of property for which you elected a 30% special allowance instead of a 50% special allowance). 1040x amended tax return form Changes in depreciation that are not a change in method of accounting (and may only be made on an amended return) include the following. 1040x amended tax return form An adjustment in the useful life of a depreciable asset for which depreciation is determined under section 167. 1040x amended tax return form A change in use of an asset in the hands of the same taxpayer. 1040x amended tax return form Making a late depreciation election or revoking a timely valid depreciation election (including the election not to deduct the special depreciation allowance). 1040x amended tax return form If you elected not to claim any special allowance, a change from not claiming to claiming the special allowance is a revocation of the election and is not an accounting method change. 1040x amended tax return form Generally, you must get IRS approval to make a late depreciation election or revoke a depreciation election. 1040x amended tax return form You must submit a request for a letter ruling to make a late election or revoke an election. 1040x amended tax return form Any change in the placed in service date of a depreciable asset. 1040x amended tax return form See section 1. 1040x amended tax return form 446-1(e)(2)(ii)(d) of the regulations for more information and examples. 1040x amended tax return form IRS approval. 1040x amended tax return form   In some instances, you may be able to get approval from the IRS to change your method of accounting for depreciation under the automatic change request procedures generally covered in Revenue Procedure 2011-14. 1040x amended tax return form If you do not qualify to use the automatic procedures to get approval, you must use the advance consent request procedures generally covered in Revenue Procedure 97-27, 1997-1 C. 1040x amended tax return form B. 1040x amended tax return form 680. 1040x amended tax return form Also see the Instructions for Form 3115 for more information on getting approval, including lists of scope limitations and automatic accounting method changes. 1040x amended tax return form Additional guidance. 1040x amended tax return form    For additional guidance and special procedures for changing your accounting method, automatic change procedures, amending your return, and filing Form 3115, see Revenue Procedure 2011-14 on page 330 of the Internal Revenue Bulletin 2011-4, available at www. 1040x amended tax return form irs. 1040x amended tax return form gov/pub/irs-irbs/irb11-04. 1040x amended tax return form pdf. 1040x amended tax return form (Note. 1040x amended tax return form Revenue Procedure 2011-14 is clarified and modified by Revenue Procedure 2012-20. 1040x amended tax return form For more information, see Revenue Procedure 2012-20 on page 700 of the Internal Revenue Bulletin 2012-14, available at www. 1040x amended tax return form irs. 1040x amended tax return form gov/pub/irs-irbs/irb12-14. 1040x amended tax return form pdf. 1040x amended tax return form )   For a safe harbor method of accounting to treat rotable spare parts as depreciable assets, see Revenue Procedure 2007-48 on page 110 of Internal Revenue Bulletin 2007-29, available at www. 1040x amended tax return form irs. 1040x amended tax return form gov/pub/irs-irbs/irb07-29. 1040x amended tax return form pdf. 1040x amended tax return form Table 1-1. 1040x amended tax return form Purpose of Form 4562 This table describes the purpose of the various parts of Form 4562. 1040x amended tax return form For more information, see Form 4562 and its instructions. 1040x amended tax return form Part Purpose I • Electing the section 179 deduction • Figuring the maximum section 179 deduction for the current year • Figuring any section 179 deduction carryover to the next year II • Reporting the special depreciation allowance for property (other than listed property) placed in service during the tax year • Reporting depreciation deductions on property being depreciated under any method other than Modified Accelerated Cost Recovery System (MACRS) III • Reporting MACRS depreciation deductions for property placed in service before this year • Reporting MACRS depreciation deductions for property (other than listed property) placed in service during the current year IV • Summarizing other parts V • Reporting the special depreciation allowance for automobiles and other listed property • Reporting MACRS depreciation on automobiles and other listed property • Reporting the section 179 cost elected for automobiles and other listed property • Reporting information on the use of automobiles and other transportation vehicles VI • Reporting amortization deductions Section 481(a) adjustment. 1040x amended tax return form   If you file Form 3115 and change from an impermissible method to a permissible method of accounting for depreciation, you can make a section 481(a) adjustment for any unclaimed or excess amount of allowable depreciation. 1040x amended tax return form The adjustment is the difference between the total depreciation actually deducted for the property and the total amount allowable prior to the year of change. 1040x amended tax return form If no depreciation was deducted, the adjustment is the total depreciation allowable prior to the year of change. 1040x amended tax return form A negative section 481(a) adjustment results in a decrease in taxable income. 1040x amended tax return form It is taken into account in the year of change and is reported on your business tax returns as “other expenses. 1040x amended tax return form ” A positive section 481(a) adjustment results in an increase in taxable income. 1040x amended tax return form It is generally taken into account over 4 tax years and is reported on your business tax returns as “other income. 1040x amended tax return form ” However, you can elect to use a one-year adjustment period and report the adjustment in the year of change if the total adjustment is less than $25,000. 1040x amended tax return form Make the election by completing the appropriate line on Form 3115. 1040x amended tax return form   If you file a Form 3115 and change from one permissible method to another permissible method, the section 481(a) adjustment is zero. 1040x amended tax return form Prev  Up  Next   Home   More Online Publications
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Affordable Care Act Tax Provisions for Individuals and Families

The Affordable Care Act, or health care law, contains health insurance coverage and financial assistance options for individuals and families. The IRS administers the tax provisions included in the law. Visit HealthCare.gov for more information on coverage options and financial assistance.
 

What do I need to know for my 2013 tax return?

Considerations for 2014

  • Open Enrollment for the Health Insurance Marketplace: The open enrollment period to purchase health care coverage through the Health Insurance Marketplace for 2014 began Oct. 1, 2013 and runs through March 31, 2014. When you get health insurance through the marketplace, you may be able to get advance payments of the premium tax credit that will immediately help lower your monthly premium. Learn more at HealthCare.gov.
  • Premium Tax Credit: If you get insurance through the Marketplace, you may be eligible to claim the premium tax credit. You can elect to have advance payments of the tax credit sent directly to your insurer during 2014, or wait to claim the credit when you file your tax return in 2015. If you choose to have advance payments sent to your insurer, you will have to reconcile the payments on your 2014 tax return, which will be filed in 2015. If you’re already receiving advance payments of the credit, you need do nothing at this time unless you have a change in circumstance. Learn More.
  • Change in Circumstances: If you're receiving advance payments of the premium tax credit to help pay for your insurance coverage, you should report life changes, such as income, marital status or family size changes, to your marketplace. Reporting changes will help to make sure you are getting the proper amount of advance payments.
  • Individual Shared Responsibility Payment: Starting January 2014, you and your family must have health care coverage, have an exemption from coverage, or make a payment when you file your 2014 tax return in 2015. Most people already have qualifying health care coverage and will not need to do anything more than maintain that coverage throughout 2014. Learn More.

 

Page Last Reviewed or Updated: 24-Mar-2014

The 1040x Amended Tax Return Form

1040x amended tax return form 5. 1040x amended tax return form   Credits Table of Contents Credit for the Elderly or the DisabledCan You Take the Credit? Figuring the Credit Child and Dependent Care Credit Earned Income Credit (EIC)Do You Qualify for the Earned Income Credit (EIC)? Figuring the EIC This chapter briefly discusses the credit for the elderly or disabled, the child and dependent care credit, and the earned income credit. 1040x amended tax return form You may be able to reduce your federal income tax by claiming one or more of these credits. 1040x amended tax return form Credit for the Elderly or the Disabled This section explains who qualifies for the credit for the elderly or the disabled and how to figure this credit. 1040x amended tax return form For more information, see Publication 524, Credit for the Elderly or the Disabled. 1040x amended tax return form You can take the credit only if you file Form 1040 or Form 1040A. 1040x amended tax return form You cannot take the credit if you file Form 1040EZ or Form 1040NR. 1040x amended tax return form Can You Take the Credit? You can take the credit for the elderly or the disabled if you meet both of the following requirements. 1040x amended tax return form You are a qualified individual. 1040x amended tax return form Your income is not more than certain limits. 1040x amended tax return form  You can use Figure 5-A and Figure 5-B as guides to see if you are eligible for the credit. 1040x amended tax return form   Qualified Individual You are a qualified individual for this credit if you are a U. 1040x amended tax return form S. 1040x amended tax return form citizen or resident alien, and either of the following applies. 1040x amended tax return form You were age 65 or older at the end of 2013. 1040x amended tax return form You were under age 65 at the end of 2013 and all three of the following statements are true. 1040x amended tax return form You retired on permanent and total disability (explained later). 1040x amended tax return form You received taxable disability income for 2013. 1040x amended tax return form On January 1, 2013, you had not reached mandatory retirement age (defined later under Disability income ). 1040x amended tax return form Age 65. 1040x amended tax return form You are considered to be age 65 on the day before your 65th birthday. 1040x amended tax return form Therefore, you are considered to be age 65 at the end of 2013 if you were born before January 2, 1949. 1040x amended tax return form Figure 5-A. 1040x amended tax return form Are You a Qualified Individual? This image is too large to be displayed in the current screen. 1040x amended tax return form Please click the link to view the image. 1040x amended tax return form Figure 5-A, Are you a qualified individual? U. 1040x amended tax return form S. 1040x amended tax return form citizen or resident alien. 1040x amended tax return form   You must be a U. 1040x amended tax return form S. 1040x amended tax return form citizen or resident alien (or be treated as a resident alien) to take the credit. 1040x amended tax return form Generally, you cannot take the credit if you were a nonresident alien at any time during the tax year. 1040x amended tax return form Exceptions. 1040x amended tax return form   You may be able to take the credit if you are a nonresident alien who is married to a U. 1040x amended tax return form S. 1040x amended tax return form citizen or resident alien at the end of the tax year and you and your spouse choose to treat you as a U. 1040x amended tax return form S. 1040x amended tax return form resident alien. 1040x amended tax return form If you make that choice, both you and your spouse are taxed on your worldwide income. 1040x amended tax return form   If you were a nonresident alien at the beginning of the year and a resident alien at the end of the year, and you were married to a U. 1040x amended tax return form S. 1040x amended tax return form citizen or resident alien at the end of the year, you may be able to choose to be treated as a U. 1040x amended tax return form S. 1040x amended tax return form resident alien for the entire year. 1040x amended tax return form In that case, you may be allowed to take the credit. 1040x amended tax return form   For information on these choices, see chapter 1 of Publication 519, U. 1040x amended tax return form S. 1040x amended tax return form Tax Guide for Aliens. 1040x amended tax return form Married persons. 1040x amended tax return form   Generally, if you are married at the end of the tax year, you and your spouse must file a joint return to take the credit. 1040x amended tax return form However, if you and your spouse did not live in the same household at any time during the tax year, you can file either a joint return or separate returns and still take the credit. 1040x amended tax return form Head of household. 1040x amended tax return form   You can file as head of household and qualify to take the credit even if your spouse lived with you during the first 6 months of the year if you meet certain tests. 1040x amended tax return form See Publication 524 and Publication 501. 1040x amended tax return form Under age 65. 1040x amended tax return form   If you are under age 65 at the end of 2013, you can qualify for the credit only if you are retired on permanent and total disability and have taxable disability income (discussed later under Disability income ). 1040x amended tax return form You are considered to be under age 65 at the end of 2013 if you were born after January 1, 1949. 1040x amended tax return form You are retired on permanent and total disability if: You were permanently and totally disabled when you retired, and You retired on disability before the end of the tax year. 1040x amended tax return form   Even if you do not retire formally, you may be considered retired on disability when you have stopped working because of your disability. 1040x amended tax return form If you retired on disability before 1977 and were not permanently and totally disabled at the time, you can qualify for the credit if you were permanently and totally disabled on January 1, 1976, or January 1, 1977. 1040x amended tax return form Permanent and total disability. 1040x amended tax return form   You are permanently and totally disabled if you cannot engage in any substantial gainful activity because of your physical or mental condition. 1040x amended tax return form A physician must certify that the condition has lasted or can be expected to last continuously for 12 months or more, or that the condition can be expected to result in death. 1040x amended tax return form See Physician's statement , later. 1040x amended tax return form Substantial gainful activity. 1040x amended tax return form   Substantial gainful activity is the performance of significant duties over a reasonable period of time while working for pay or profit, or in work generally done for pay or profit. 1040x amended tax return form   Full-time work (or part-time work done at the employer's convenience) in a competitive work situation for at least the minimum wage conclusively shows that you are able to engage in substantial gainful activity. 1040x amended tax return form   Substantial gainful activity is not work you do to take care of yourself or your home. 1040x amended tax return form It is not unpaid work on hobbies, institutional therapy or training, school attendance, clubs, social programs, and similar activities. 1040x amended tax return form However, doing this kind of work may show that you are able to engage in substantial gainful activity. 1040x amended tax return form    Figure 5-B. 1040x amended tax return form Income Limits IF your filing status is. 1040x amended tax return form . 1040x amended tax return form . 1040x amended tax return form THEN even if you qualify (see Figure 5-A), you CANNOT take the credit if: Your adjusted gross income (AGI)* is equal to or more than. 1040x amended tax return form . 1040x amended tax return form . 1040x amended tax return form OR the total of your nontaxable social security and other nontaxable pension(s), annuities, or disability income is equal to or more than. 1040x amended tax return form . 1040x amended tax return form . 1040x amended tax return form single, head of household, or qualifying widow(er) with dependent child $17,500 $5,000 married filing jointly and only one spouse qualifies in Figure 5-A $20,000 $5,000 married filing jointly and both spouses qualify in Figure 5-A $25,000 $7,500 married filing separately and you lived apart from your spouse for all of 2013 $12,500 $3,750 *AGI is the amount on Form 1040A, line 22, or Form 1040, line 38      The fact that you have not worked for some time is not, of itself, conclusive evidence that you cannot engage in substantial gainful activity. 1040x amended tax return form Physician's statement. 1040x amended tax return form   If you are under age 65, you must have your physician complete a statement certifying that you were permanently and totally disabled on the date you retired. 1040x amended tax return form   You do not have to file this statement with your tax return, but you must keep it for your records. 1040x amended tax return form The Instructions for Schedule R (Form 1040A or 1040) include a statement your physician can complete and that you can keep for your records. 1040x amended tax return form Veterans. 1040x amended tax return form   If the Department of Veterans Affairs (VA) certifies that you are permanently and totally disabled, you can substitute VA Form 21-0172, Certification of Permanent and Total Disability, for the physician's statement you are required to keep. 1040x amended tax return form VA Form 21-0172 must be signed by a person authorized by the VA to do so. 1040x amended tax return form You can get this form from your local VA regional office. 1040x amended tax return form Physician's statement obtained in earlier year. 1040x amended tax return form   If you got a physician's statement in an earlier year and, due to your continued disabled condition, you were unable to engage in any substantial gainful activity during 2013, you may not need to get another physician's statement for 2013. 1040x amended tax return form For a detailed explanation of the conditions you must meet, see the instructions for Schedule R (Form 1040A or 1040), Part II. 1040x amended tax return form If you meet the required conditions, you must check the box on Schedule R (Form 1040A or 1040), Part II, line 2. 1040x amended tax return form   If you checked Schedule R (Form 1040A or 1040), Part I, box 4, 5, or 6, print in the space above the box in Part II, line 2, the first name(s) of the spouse(s) for whom the box is checked. 1040x amended tax return form Disability income. 1040x amended tax return form   If you are under age 65, you must also have taxable disability income to qualify for the credit. 1040x amended tax return form   Disability income must meet the following two requirements. 1040x amended tax return form It must be paid under your employer's accident or health plan or pension plan. 1040x amended tax return form It must be included in your income as wages (or payments in lieu of wages) for the time you are absent from work because of permanent and total disability. 1040x amended tax return form Payments that are not disability income. 1040x amended tax return form   Any payment you receive from a plan that does not provide for disability retirement is not disability income. 1040x amended tax return form Any lump-sum payment for accrued annual leave that you receive when you retire on disability is a salary payment and is not disability income. 1040x amended tax return form   For purposes of the credit for the elderly or the disabled, disability income does not include amounts you receive after you reach mandatory retirement age. 1040x amended tax return form Mandatory retirement age is the age set by your employer at which you would have had to retire had you not become disabled. 1040x amended tax return form Figuring the Credit You can figure the credit yourself, or the IRS will figure it for you. 1040x amended tax return form Figuring the credit yourself. 1040x amended tax return form   If you figure the credit yourself, fill out the front of Schedule R (Form 1040A or 1040). 1040x amended tax return form Next, fill out Schedule R (Form 1040A or 1040), Part III. 1040x amended tax return form Credit figured for you. 1040x amended tax return form   If you can take the credit and you want the IRS to figure the credit for you, see Publication 524 or the Instructions for Schedule R (Form 1040A or 1040). 1040x amended tax return form If you want the IRS to figure your tax, see chapter 30 of Publication 17, Your Federal Income Tax. 1040x amended tax return form Child and Dependent Care Credit You may be able to claim this credit if you pay someone to care for your dependent who is under age 13 or for your spouse or dependent who is not able to care for himself or herself. 1040x amended tax return form The credit can be up to 35% of your expenses. 1040x amended tax return form To qualify, you must pay these expenses so you can work or look for work. 1040x amended tax return form If you claim this credit, you must include on your return the name and taxpayer identification number (generally the social security number) of each qualifying person for whom care is provided. 1040x amended tax return form If the correct information is not shown, the credit may be reduced or disallowed. 1040x amended tax return form You also must show on your return the name, address, and the taxpayer identification number of the person(s) or organization(s) that provided the care. 1040x amended tax return form For more information, see Publication 503, Child and Dependent Care Expenses. 1040x amended tax return form Earned Income Credit (EIC) The earned income credit (EIC) is a refundable tax credit for certain people who work and have earned income under $51,567. 1040x amended tax return form The EIC is available to persons with or without a qualifying child. 1040x amended tax return form Credit has no effect on certain welfare benefits. 1040x amended tax return form   Any refund you receive because of the EIC cannot be counted as income when determining whether you or anyone else is eligible for benefits or assistance, or how much you or anyone else can receive, under any federal program or under any state or local program financed in whole or in part with federal funds. 1040x amended tax return form These programs include the following. 1040x amended tax return form Medicaid and supplemental security income (SSI). 1040x amended tax return form Supplemental Nutrition Assistance Program (food stamps). 1040x amended tax return form Low-income housing. 1040x amended tax return form Temporary Assistance for Needy Families (TANF). 1040x amended tax return form  In addition, when determining eligibility, the refund cannot be counted as a resource for at least 12 months after you receive it. 1040x amended tax return form Check with your local benefit coordinator to find out if your refund will affect your benefits. 1040x amended tax return form Do You Qualify for the Earned Income Credit (EIC)? Use Table 5-1 as an initial guide to the rules you must meet in order to qualify for the EIC. 1040x amended tax return form The specific rules you must meet depend on whether you have a qualifying child. 1040x amended tax return form If you have a qualifying child, the rules in Parts A, B, and D apply to you. 1040x amended tax return form If you do not have a qualifying child, the rules in Parts A, C, and D apply to you. 1040x amended tax return form  If, after reading all the rules in each part that applies to you, you think you may qualify for the credit, see Publication 596, Earned Income Credit, for more details about the EIC. 1040x amended tax return form You can also find information about the EIC in the instructions for Form 1040 (line 64a), Form 1040A (line 38a), or Form 1040EZ (line 8a). 1040x amended tax return form The sections that follow provide additional information for some of the rules. 1040x amended tax return form Adjusted gross income (AGI). 1040x amended tax return form   Under Rule 1, you cannot claim the EIC unless your AGI is less than the applicable limit shown in Part A of Table 5-1. 1040x amended tax return form Your AGI is the amount on line 37 (Form 1040), line 21 (Form 1040A), or line 4 (Form 1040EZ). 1040x amended tax return form Table 5-1. 1040x amended tax return form Earned Income Credit (EIC) in a Nutshell First, you must meet all the rules in this column. 1040x amended tax return form Second, you must meet all the rules in one of these columns, whichever applies. 1040x amended tax return form Third, you must meet the rule in this column. 1040x amended tax return form Part A. 1040x amended tax return form  Rules for Everyone Part B. 1040x amended tax return form  Rules If You Have a Qualifying Child Part C. 1040x amended tax return form  Rules If You Do Not Have a Qualifying Child Part D. 1040x amended tax return form  Figuring and Claiming the EIC 1. 1040x amended tax return form Your adjusted gross income (AGI) must be less than: •$46,227 ($51,567 for married filing jointly) if you have three or more qualifying children, •$43,038 ($48,378 for married filing jointly) if you have two qualifying children, •$37,870 ($43,210 for married filing jointly) if you have one qualifying child, or  •$14,340 ($19,680 for married filing jointly) if you do not have a qualifying child. 1040x amended tax return form 2. 1040x amended tax return form You must have a valid social security number. 1040x amended tax return form  3. 1040x amended tax return form Your filing status cannot be “Married filing separately. 1040x amended tax return form ” 4. 1040x amended tax return form You must be a U. 1040x amended tax return form S. 1040x amended tax return form citizen or resident alien all year. 1040x amended tax return form  5. 1040x amended tax return form You cannot file Form 2555 or Form 2555-EZ (relating to foreign earned income). 1040x amended tax return form  6. 1040x amended tax return form Your investment income must be $3,300 or less. 1040x amended tax return form  7. 1040x amended tax return form You must have earned income. 1040x amended tax return form 8. 1040x amended tax return form Your child must meet the relationship, age, residency, and joint return tests. 1040x amended tax return form  9. 1040x amended tax return form Your qualifying child cannot be used by more than one person to claim the EIC. 1040x amended tax return form  10. 1040x amended tax return form You generally cannot be a qualifying child of another person. 1040x amended tax return form 11. 1040x amended tax return form You must be at least age 25 but under age 65. 1040x amended tax return form  12. 1040x amended tax return form You cannot be the dependent of another person. 1040x amended tax return form  13. 1040x amended tax return form You generally cannot be a qualifying child of another person. 1040x amended tax return form  14. 1040x amended tax return form You must have lived in the United States more than half of the year. 1040x amended tax return form 15. 1040x amended tax return form Your earned income must be less than: •$46,227 ($51,567 for married filing jointly) if you have three or more qualifying children, •$43,038 ($48,378 for married filing jointly) if you have two qualifying children, •$37,870 ($43,210 for married filing jointly) if you have one qualifying child, or •$14,340 ($19,680 for married filing jointly) if you do not have a qualifying child. 1040x amended tax return form Social security number. 1040x amended tax return form   Under Rule 2, you (and your spouse if you are married filing jointly) must have a valid social security number (SSN) issued by the Social Security Administration (SSA). 1040x amended tax return form Any qualifying child listed on Schedule EIC also must have a valid SSN. 1040x amended tax return form (See Qualifying child , later, if you have a qualifying child. 1040x amended tax return form )   If your social security card (or your spouse's if you are married filing jointly) says “Not valid for employment” and your SSN was issued so that you (or your spouse) could get a federally funded benefit, you cannot get the EIC. 1040x amended tax return form An example of a federally funded benefit is Medicaid. 1040x amended tax return form Investment income. 1040x amended tax return form   Under Rule 6, you cannot claim the EIC unless your investment income is $3,300 or less. 1040x amended tax return form If your investment income is more than $3,300, you cannot claim the credit. 1040x amended tax return form For most people, investment income is the total of the following amounts. 1040x amended tax return form Taxable interest (line 8a of Form 1040 or 1040A). 1040x amended tax return form Tax-exempt interest (line 8b of Form 1040 or 1040A). 1040x amended tax return form Dividend income (line 9a of Form 1040 or 1040A). 1040x amended tax return form Capital gain net income (line 13 of Form 1040, if more than zero, or line 10 of Form 1040A). 1040x amended tax return form  If you file Form 1040EZ, your investment income is the total of the amount of line 2 and the amount of any tax-exempt interest you wrote to the right of the words “Form 1040EZ” on line 2. 1040x amended tax return form   For more information about investment income, see Publication 596, Earned Income Credit. 1040x amended tax return form Earned income. 1040x amended tax return form   Under Rule 7, you must have earned income to claim the EIC. 1040x amended tax return form Under Rule 15, you cannot claim the EIC unless your earned income is less than the applicable limit shown in Table 5-1, Part D. 1040x amended tax return form Earned income includes all of the following types of income. 1040x amended tax return form Wages, salaries, tips, and other taxable employee pay. 1040x amended tax return form Employee pay is earned income only if it is taxable. 1040x amended tax return form Nontaxable employee pay, such as certain dependent care benefits and adoption benefits, is not earned income. 1040x amended tax return form But there is an exception for nontaxable combat pay, which you can choose to include in earned income. 1040x amended tax return form Net earnings from self-employment. 1040x amended tax return form Gross income received as a statutory employee. 1040x amended tax return form Gross income defined. 1040x amended tax return form   Gross income means all income you received in the form of money, goods, property, and services that is not exempt from tax, including any income from sources outside the United States or from the sale of your main home (even if you can exclude part or all of it). 1040x amended tax return form Do not include any social security benefits unless (a) you are married filing a separate tax return and you lived with your spouse at any time in 2013, or (b) one-half of your social security benefits plus your other gross income and any tax-exempt interest is more than $25,000 ($32,000 if married filing jointly). 1040x amended tax return form If (a) or (b) applies, see the instructions for Form 1040, lines 20a and 20b to figure the taxable part of social security benefits you must include in gross income. 1040x amended tax return form Self-employed persons. 1040x amended tax return form   If you are self-employed and your net earnings are $400 or more, be sure to correctly fill out Schedule SE (Form 1040), Self-Employment Tax, and pay the proper amount of self-employment tax. 1040x amended tax return form If you do not, you may not get all the credit to which you are entitled. 1040x amended tax return form Disability benefits. 1040x amended tax return form   If you retired on disability, taxable benefits you receive under your employer's disability retirement plan are considered earned income until you reach minimum retirement age. 1040x amended tax return form Minimum retirement age generally is the earliest age at which you could have received a pension or annuity if you were not disabled. 1040x amended tax return form Beginning on the day after you reach minimum retirement age, payments you receive are taxable as a pension and are not considered earned income. 1040x amended tax return form   Payments you received from a disability insurance policy that you paid the premiums for are not earned income. 1040x amended tax return form It does not matter whether you have reached minimum retirement age. 1040x amended tax return form If this policy is through your employer, the amount may be shown in box 12 of your Form W-2 with code J. 1040x amended tax return form Income that is not earned income. 1040x amended tax return form   Examples of items that are not earned income under Rule 7 include interest and dividends, pensions and annuities, social security and railroad retirement benefits (including disability benefits — except for payments covered under Disability benefits earlier), alimony and child support, welfare benefits, workers' compensation benefits, unemployment compensation (insurance), nontaxable foster care payments, and veterans' benefits, including VA rehabilitation payments. 1040x amended tax return form Do not include any of these items in your earned income. 1040x amended tax return form Workfare payments. 1040x amended tax return form   Nontaxable workfare payments are not earned income for the EIC. 1040x amended tax return form These are cash payments certain people receive from a state or local agency that administers public assistance programs funded under the federal Temporary Assistance for Needy Families (TANF) program in return for certain work activities such as (1) work experience activities (including remodeling or repairing public housing) if sufficient private sector employment is not available, or (2) community service program activities. 1040x amended tax return form Qualifying child. 1040x amended tax return form   Under Rule 8, your child is a qualifying child if your child meets four tests. 1040x amended tax return form The four tests are: Relationship, Age, Residency, and Joint return. 1040x amended tax return form   The four tests are illustrated in Figure 5-C. 1040x amended tax return form See Publication 596 for more information about each test. 1040x amended tax return form Figure 5-C. 1040x amended tax return form Tests for Qualifying Child A qualifying child for the EIC is a child who is your. 1040x amended tax return form . 1040x amended tax return form . 1040x amended tax return form Son, daughter, stepchild, foster child,  or a descendant of any of them (for example, your grandchild) OR Brother, sister, half brother, half sister, stepbrother,  stepsister, or a descendant of any of them (for example, your  niece or nephew) was . 1040x amended tax return form . 1040x amended tax return form . 1040x amended tax return form Under age 19 at the end of 2013 and younger than you (or your spouse if filing jointly) OR Under age 24 at the end of 2013, a student, and younger than you (or your spouse if filing jointly) OR Permanently and totally disabled at any time during the year, regardless of age who. 1040x amended tax return form . 1040x amended tax return form . 1040x amended tax return form Is not filing a joint return for 2013  (or is filing a joint return for 2013 only as a claim for refund of income tax withheld or estimated tax paid) who. 1040x amended tax return form . 1040x amended tax return form . 1040x amended tax return form Lived with you in the United States for more than half of 2013. 1040x amended tax return form  If the child did not live with you for the required time, see Publication 596 for more information. 1040x amended tax return form Figuring the EIC To figure the amount of your credit, you have two choices. 1040x amended tax return form Have the IRS figure the EIC for you. 1040x amended tax return form If you want to do this, see IRS Will Figure the EIC for You in Publication 596. 1040x amended tax return form Figure the EIC yourself. 1040x amended tax return form If you want to do this, see How To Figure the EIC Yourself in Publication 596. 1040x amended tax return form Prev  Up  Next   Home   More Online Publications