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2007 Tax Software

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2007 Tax Software

2007 tax software Index Symbols 30% Tax, The 30% Tax , Residents of Canada or Mexico engaged in transportation-related employment. 2007 tax software , Students, teachers, and researchers. 2007 tax software A Accuracy-related penalties, Accuracy-related penalty. 2007 tax software Additional Medicare Tax, Additional Medicare Tax. 2007 tax software , Additional Medicare Tax. 2007 tax software Adoption credit Dual-status alien, Adoption credit. 2007 tax software Nonresident alien, Adoption credit. 2007 tax software Resident alien, Adoption credit. 2007 tax software Agricultural workers, Agricultural workers. 2007 tax software , Agricultural Workers Alien Nonresident, Nonresident Aliens, Nonresident Aliens, Nonresident Aliens Resident, Resident Aliens, Resident Aliens, Resident Aliens Alien status, employer notification of, Notification of Alien Status Alternative minimum tax, Alternative minimum tax. 2007 tax software Amended returns, Amended Returns and Claims for Refund American Samoa, residents of, Aliens From American Samoa or Puerto Rico, Special rules for aliens from certain U. 2007 tax software S. 2007 tax software possessions. 2007 tax software , Bona Fide Residents of American Samoa or Puerto Rico Annuities Income, Income from certain annuities. 2007 tax software Source rule, Pensions and Annuities Asset-use test, Asset-use test. 2007 tax software Assistance (see Tax help) Athletes, professional, Professional athletes. 2007 tax software Awards, Scholarships, Grants, Prizes, and Awards B Basis of property, Depreciable property. 2007 tax software Beneficiary of estate or trust, Beneficiary of an estate or trust. 2007 tax software Business expenses, ordinary and necessary, Ordinary and necessary business expenses. 2007 tax software Business operations, Business operations. 2007 tax software Business profits and losses and sales transactions, Business Profits and Losses and Sales Transactions Business, U. 2007 tax software S. 2007 tax software , Trade or Business in the United States Business-activities test, Business-activities test. 2007 tax software C Canada Commuters, Regular commuters from Canada or Mexico. 2007 tax software Exemptions, Exemptions Personal exemption, Resident Aliens Qualifying widow filing status, Qualifying widow(er). 2007 tax software Residents of, Residents of Mexico or Canada or U. 2007 tax software S. 2007 tax software nationals. 2007 tax software Social security benefits, Special Rule for Canadian and German Social Security Benefits Transportation-related employment, Residents of Canada or Mexico engaged in transportation-related employment. 2007 tax software Withholding tax, U. 2007 tax software S. 2007 tax software nationals or residents of Canada, Mexico, or South Korea. 2007 tax software Capital assets, sales or exchanges, Sales or Exchanges of Capital Assets Casualty and theft losses, Casualty and theft losses. 2007 tax software Central withholding agreements, Central withholding agreements. 2007 tax software Charitable contributions, Charitable contributions. 2007 tax software Child and dependent care credit Dual-status alien, Child and dependent care credit. 2007 tax software Nonresident alien, Child and dependent care credit. 2007 tax software Resident alien, Child and dependent care credit. 2007 tax software Child tax credit Resident alien, Child tax credit. 2007 tax software , Child tax credit. 2007 tax software , Child tax credit. 2007 tax software Claims for refund, Amended Returns and Claims for Refund Closer connection, Closer Connection to a Foreign Country Commodities, trading in, Trading in stocks, securities, and commodities. 2007 tax software Community income, Community Income Commuters from Canada or Mexico, Regular commuters from Canada or Mexico. 2007 tax software Compensation for labor or personal services Geographical basis, Geographical Basis Contingent interest, Contingent interest. 2007 tax software Credit for the elderly or the disabled Dual-status alien, 6) Tax credits. 2007 tax software Resident alien, Credit for the elderly or the disabled. 2007 tax software Credits against tax Child and dependent care credit, Child and dependent care credit. 2007 tax software , Child and dependent care credit. 2007 tax software Child tax credit, Child tax credit. 2007 tax software , Child tax credit. 2007 tax software , Child tax credit. 2007 tax software Credit for the elderly or the disabled, 6) Tax credits. 2007 tax software Dual-status alien, Credits Earned income credit, Earned income credit. 2007 tax software , 6) Tax credits. 2007 tax software Education credits, Education credits. 2007 tax software , Education credits. 2007 tax software , 6) Tax credits. 2007 tax software Excess social security tax withheld, Excess social security tax withheld. 2007 tax software Foreign tax credit, Foreign tax credit. 2007 tax software , Foreign tax credit. 2007 tax software Hope credit, Education credits. 2007 tax software , Education credits. 2007 tax software Lifetime learning credit, Education credits. 2007 tax software , Education credits. 2007 tax software Retirement savings contributions, Retirement savings contributions credit. 2007 tax software , Retirement savings contributions credit. 2007 tax software , Retirement savings contributions credit. 2007 tax software Tax paid on undistributed long-term capital gains, Tax paid on undistributed long-term capital gains. 2007 tax software Tax withheld at source, Tax withheld at the source. 2007 tax software Tax withheld on partnership income, Tax withheld on partnership income. 2007 tax software Withholding from wages, Withholding from wages. 2007 tax software Crew members Alien status, Crew members. 2007 tax software Compensation, Crew members. 2007 tax software Currency, transporting, Other Forms You May Have To File D Days of presence, Days of Presence in the United States De minimis presence, De minimis presence. 2007 tax software Deductions, Deductions, Itemized Deductions Departure permit, When to get a sailing or departure permit. 2007 tax software Depreciable property, Depreciable property. 2007 tax software Diplomats (see Foreign government employees) Direct economic relationship, Personal Service Income Disclosure statement, Disclosure statement. 2007 tax software Dividends, U. 2007 tax software S. 2007 tax software source income, Dividends Dual-status aliens, Dual-Status Aliens Dual-status tax year, Dual-Status Aliens, Dual-Status Tax Year Child care credit, Child and dependent care credit. 2007 tax software Computation of tax, How To Figure Tax Credit for the elderly or the disabled, 6) Tax credits. 2007 tax software Earned income credit, 6) Tax credits. 2007 tax software Education credit, 6) Tax credits. 2007 tax software Exemptions, 2) Exemptions. 2007 tax software Foreign tax credit, Foreign tax credit. 2007 tax software Forms to file, Forms To File Head of household. 2007 tax software , 3) Head of household. 2007 tax software Income subject to tax, Income Subject to Tax Joint return, 4) Joint return. 2007 tax software Residency ending date, Dual-Status Aliens Residency starting date, Dual-Status Aliens Restrictions, Restrictions for Dual-Status Taxpayers Standard deduction, 1) Standard deduction. 2007 tax software Tax rates, 5) Tax rates. 2007 tax software When and where to file, When and Where To File E Earned income credit Dual-status alien, 6) Tax credits. 2007 tax software Nonresident alien, Earned income credit. 2007 tax software Resident alien, Earned income credit. 2007 tax software Education credits Dual-status alien, 6) Tax credits. 2007 tax software Nonresident alien, Education credits. 2007 tax software Resident alien, Education credits. 2007 tax software Effectively connected income, Effectively Connected Income Foreign income, Foreign Income Investment income, Investment Income Pensions, Pensions. 2007 tax software Real property gain or loss, Real Property Gain or Loss Real property income choice, Income From Real Property Tax on, Tax on Effectively Connected Income Transportation income, Transportation Income Employees of foreign governments, Employees of foreign governments. 2007 tax software Employees of international organizations, Employees of international organizations. 2007 tax software Employees, household, Household employees. 2007 tax software Employees, withholding exemption under tax treaty, Employees and independent contractors. 2007 tax software Employer identification number, Employer identification number (EIN). 2007 tax software Estate, beneficiary, Beneficiary of an estate or trust. 2007 tax software Estimated tax, Paying Tax Through Withholding or Estimated Tax , Estimated Tax Form 1040-ES (NR) Excess social security tax, Excess social security tax withheld. 2007 tax software Exchange visitors, Exchange Visitors Income from foreign employer, Students and exchange visitors. 2007 tax software Social security and Medicare taxes, Students and Exchange Visitors Exclusions from gross income, Exclusions From Gross Income Annuities, Income from certain annuities. 2007 tax software Compensation from a foreign employer, Students and exchange visitors. 2007 tax software Gambling winnings, dog or horse racing, Gambling Winnings From Dog or Horse Racing Students and exchange visitors, Students and exchange visitors. 2007 tax software Treaty income, Income affected by treaties. 2007 tax software , Treaty Income Exempt individual, Exempt individual. 2007 tax software Exemption from withholding Employees, Employees and independent contractors. 2007 tax software Independent contractors, Employees and independent contractors. 2007 tax software Students, teachers, and researchers, Students, teachers, and researchers. 2007 tax software Exemptions Dual-status taxpayer, Exemptions Indian students and business apprentices, Students and business apprentices from India. 2007 tax software Nonresident alien, Exemptions Resident alien, Exemptions Residents of Mexico or Canada, Residents of Mexico or Canada or U. 2007 tax software S. 2007 tax software nationals. 2007 tax software Residents of South Korea, Residents of South Korea. 2007 tax software U. 2007 tax software S. 2007 tax software nationals, Residents of Mexico or Canada or U. 2007 tax software S. 2007 tax software nationals. 2007 tax software Expatriation tax, Expatriation Before June 4, 2004 F Fellowship grant Excludable, Scholarships and Fellowship Grants Source rule, Scholarships, Grants, Prizes, and Awards Withholding tax, Withholding on Scholarships and Fellowship Grants Filing requirements, Nonresident Aliens Filing returns, Figuring Your Tax Amended returns, Amended Returns and Claims for Refund Claims for refund, Amended Returns and Claims for Refund Commonwealth of the Northern Mariana Islands, Aliens from Guam or the Commonwealth of the Northern Mariana Islands. 2007 tax software Dual-status taxpayer, Forms To File Estimated tax, When to pay estimated tax. 2007 tax software Form 1040-C, Form 1040-C Form 1040NR, Figuring Your Tax, Nonresident Aliens Form 1040NR-EZ, Figuring Your Tax, Form 1040NR-EZ Form 2063, Form 2063 Guam, Aliens from Guam or the Commonwealth of the Northern Mariana Islands. 2007 tax software Nonresident alien, Figuring Your Tax U. 2007 tax software S. 2007 tax software Virgin Islands, Aliens from the U. 2007 tax software S. 2007 tax software Virgin Islands. 2007 tax software Who must file, Nonresident Aliens Filing status, Filing Status First-year choice, First-Year Choice Fixed or determinable income, Fixed or Determinable Income Foreign country, Foreign country. 2007 tax software Foreign earned income exclusion, Foreign Earned Income and Housing Amount Foreign employer, Employees of foreign persons, organizations, or offices. 2007 tax software , Foreign employer. 2007 tax software Foreign government employees Alien status, Foreign government-related individuals. 2007 tax software Exempt from U. 2007 tax software S. 2007 tax software tax, Employees of Foreign Governments and International Organizations Tax treaty exemption, Employees of Foreign Governments Foreign income subject to U. 2007 tax software S. 2007 tax software tax, Foreign Income Foreign organizations, charitable contributions to, Charitable contributions. 2007 tax software Foreign tax credit Dual-status alien, Foreign tax credit. 2007 tax software Nonresident alien, Foreign tax credit. 2007 tax software Resident alien, Foreign tax credit. 2007 tax software Forms, Form 8843. 2007 tax software 1040-C, Form 1040-C 1040-ES(NR), Estimated Tax Form 1040-ES (NR) 1040NR, Nonresident Aliens 1040NR-EZ, Form 1040NR-EZ 1040X, Amended Returns and Claims for Refund 1042-S, Tax Withheld on Real Property Sales 1116, Foreign tax credit. 2007 tax software , Foreign tax credit. 2007 tax software , Foreign tax credit. 2007 tax software 2063, Form 2063 2106, Deductible travel expenses. 2007 tax software 2210, Penalty for failure to pay estimated income tax. 2007 tax software 3903, Moving expenses. 2007 tax software 4563, Residents of American Samoa. 2007 tax software 4790 (see FinCEN 105) 6251, Alternative minimum tax. 2007 tax software 8233, Employees and independent contractors. 2007 tax software 8275, Disclosure statement. 2007 tax software 8288, Credit for tax withheld. 2007 tax software 8288-A, Credit for tax withheld. 2007 tax software 8288-B, Withholding certificates. 2007 tax software 8801, Credit for prior year minimum tax. 2007 tax software 8805, Tax Withheld on Partnership Income, Tax Withheld on Real Property Sales 8833, Effect of Tax Treaties, Resident Aliens 8840, Form 8840. 2007 tax software 8843, Form 8843. 2007 tax software 8854, Reporting requirements. 2007 tax software FinCEN 105, Other Forms You May Have To File W-4, Withholding on Wages, Alternate Withholding Procedure, Form W-4. 2007 tax software W-7, Individual taxpayer identification number (ITIN). 2007 tax software W-8BEN, Income Entitled to Tax Treaty Benefits W-8ECI, Withholding on Pensions W-9, Notification of Alien Status Forms to file Dual-status alien, Forms To File Nonresident aliens, Nonresident Aliens Resident alien, Resident Aliens Sailing permits, Forms To File Free tax services, Free help with your tax return. 2007 tax software G Gambling winnings, dog or horse racing, Gambling Winnings From Dog or Horse Racing German social security benefits, Special Rule for Canadian and German Social Security Benefits Green card test, Green Card Test H Head of household Nonresident alien, Head of household. 2007 tax software Resident alien, Head of household. 2007 tax software Help (see Tax help) Home, sale of, Gain From the Sale of Your Main Home Household employees, Household employees. 2007 tax software I Identification number, taxpayer Defined, Identification Number Penalty for failure to supply, Failure to supply taxpayer identification number. 2007 tax software Income Community, Community Income Effectively connected, Effectively Connected Income Exclusions, Exclusions From Gross Income Fixed or determinable, Fixed or Determinable Income Foreign, Foreign Income From real property, Income From Real Property Income affected by treaties, Income affected by treaties. 2007 tax software Interest, Interest Income Investment, Investment Income Personal services, Personal Service Income Reporting, Reporting Your Income Sale of home, Gain From the Sale of Your Main Home Tip, Withholding on Tip Income Income code 28, Gambling Winnings Income from U. 2007 tax software S. 2007 tax software sources, Source of Income Dividends, Dividends Interest, Interest Income Pensions and annuities, Pensions and Annuities Personal property, Personal Property Personal services, Personal Services Real property, Real Property Rents or royalties, Rents or Royalties Independent contractors Withholding exemption under tax treaty, Employees and independent contractors. 2007 tax software Withholding rules, Independent Contractors India, students and business apprentices from Exemptions, Students and business apprentices from India. 2007 tax software Exemptions for spouse and dependents, Students and business apprentices from India. 2007 tax software Standard deduction, Students and business apprentices from India. 2007 tax software Withholding allowances, Students and business apprentices from India. 2007 tax software Individual retirement arrangement (IRA), Individual retirement arrangement (IRA). 2007 tax software Individual taxpayer identification number (ITIN), Individual taxpayer identification number (ITIN). 2007 tax software Intangible property, Intangible property. 2007 tax software Interest Portfolio, Portfolio interest. 2007 tax software , Interest that does not qualify as portfolio interest. 2007 tax software Interest income Contingent, Contingent interest. 2007 tax software Excludable, Interest Income Source rule, Interest Income International organization employees Alien status, Foreign government-related individuals. 2007 tax software Exempt from U. 2007 tax software S. 2007 tax software tax, Employees of Foreign Governments and International Organizations International social security agreements, International Social Security Agreements Interrupted period of residence, Interrupted Period of Residence Inventory, Inventory property. 2007 tax software Investment income, Investment Income Itemized deductions, Itemized Deductions J Job expenses, Job expenses and other miscellaneous deductions. 2007 tax software K Korea, South Exemptions, Residents of South Korea. 2007 tax software , Exemptions Married filing separately, Married nonresident alien. 2007 tax software Qualifying widow filing status, Qualifying widow(er). 2007 tax software Withholding tax, U. 2007 tax software S. 2007 tax software nationals or residents of Canada, Mexico, or South Korea. 2007 tax software L Last year of residency, Last Year of Residency Long-term U. 2007 tax software S. 2007 tax software resident Defined, Long-term resident defined. 2007 tax software Expatriation tax, Long-term resident defined. 2007 tax software Losses Business, Business Profits and Losses and Sales Transactions Capital Assets, Sales or Exchanges of Capital Assets Casualty and theft, Casualty and theft losses. 2007 tax software Of nonresident aliens, Losses. 2007 tax software Real property, Real Property Gain or Loss M Married filing jointly Nonresident alien, Married nonresident alien. 2007 tax software Resident alien, Married filing jointly. 2007 tax software Medical condition, Medical condition. 2007 tax software Medicare tax, Social Security and Medicare Taxes Mexico Commuters, Regular commuters from Canada or Mexico. 2007 tax software Exemptions, Exemptions Personal exemption, Resident Aliens Qualifying widow filing status, Qualifying widow(er). 2007 tax software Residents of, Residents of Mexico or Canada or U. 2007 tax software S. 2007 tax software nationals. 2007 tax software Transportation-related employment, Residents of Canada or Mexico engaged in transportation-related employment. 2007 tax software Withholding tax, U. 2007 tax software S. 2007 tax software nationals or residents of Canada, Mexico, or South Korea. 2007 tax software Miscellaneous deductions, Job expenses and other miscellaneous deductions. 2007 tax software Monetary instruments, transporting, Other Forms You May Have To File Moving expenses, Moving expenses. 2007 tax software Multi-level marketing, Multi-level marketing. 2007 tax software , Multi-level marketing. 2007 tax software Municipal bonds, State and local government obligations. 2007 tax software N National of the United States, Qualifying widow(er). 2007 tax software , 5) Tax rates. 2007 tax software , Withholding on Wages Natural resources (see Real property) Non-registered obligations, Obligations not in registered form. 2007 tax software Nonresident alien, Nonresident Aliens Annuity income, Income from certain annuities. 2007 tax software Business expenses, Ordinary and necessary business expenses. 2007 tax software Casualty and theft losses, Casualty and theft losses. 2007 tax software Charitable contributions, Charitable contributions. 2007 tax software Child care credit, Child and dependent care credit. 2007 tax software Credit for excess social security tax withheld, Excess social security tax withheld. 2007 tax software Credit for income tax withheld, Withholding from wages. 2007 tax software Credit for prior year minimum tax, Credit for prior year minimum tax. 2007 tax software Defined, Nonresident Aliens Earned income credit, Earned income credit. 2007 tax software Education credits, Education credits. 2007 tax software Effectively connected income, tax on, Tax on Effectively Connected Income Filing Form 1040NR, Figuring Your Tax Filing Form 1040NR-EZ, Figuring Your Tax Foreign tax credit, Foreign tax credit. 2007 tax software Gambling winnings, dog or horse racing, Gambling Winnings From Dog or Horse Racing Head of household, Head of household. 2007 tax software How income is taxed, Nonresident Aliens Individual retirement arrangement (IRA), Individual retirement arrangement (IRA). 2007 tax software Interest income, Interest Income Job expenses, Job expenses and other miscellaneous deductions. 2007 tax software Losses, Losses. 2007 tax software Married filing jointly, Married nonresident alien. 2007 tax software Miscellaneous deductions, Job expenses and other miscellaneous deductions. 2007 tax software Moving expenses, Moving expenses. 2007 tax software Personal exemptions, Exemptions Qualifying widow(er), Qualifying widow(er). 2007 tax software Standard deduction, Standard deduction. 2007 tax software State and local income taxes, State and local income taxes. 2007 tax software Students, Nonresident Alien Students Tax paid on undistributed long-term capital gains, Tax paid on undistributed long-term capital gains. 2007 tax software Tax withheld at source, Tax withheld at the source. 2007 tax software Travel expenses, Travel expenses. 2007 tax software Withholding from partnership income, Tax withheld on partnership income. 2007 tax software Withholding tax, Paying Tax Through Withholding or Estimated Tax Nonresident spouse treated as a resident, Nonresident Spouse Treated as a Resident O Obligations Not in registered form, Obligations not in registered form. 2007 tax software Registered, Obligations in registered form. 2007 tax software Original issue discount, Original issue discount (OID). 2007 tax software P Partnership Income, tax withheld on, Tax Withheld on Partnership Income Partnerships, Partnerships. 2007 tax software Payment against U. 2007 tax software S. 2007 tax software tax, Payments Tax withheld at the source, Tax withheld at the source. 2007 tax software Withholding from wages, Tax Withheld Penalties, Penalties. 2007 tax software , Penalties Accuracy-related, Accuracy-related penalty. 2007 tax software Failure to file, Filing late. 2007 tax software Failure to pay, Paying tax late. 2007 tax software Failure to supply taxpayer identification number, Failure to supply taxpayer identification number. 2007 tax software Fraud, Fraud. 2007 tax software Frivolous tax submission, Frivolous tax submission. 2007 tax software Negligence, Negligence or disregard. 2007 tax software Substantial understatement of income tax, Substantial understatement of income tax. 2007 tax software Penalty for failure to pay estimated income tax, Penalty for failure to pay estimated income tax. 2007 tax software Penalty on early withdrawal of savings, Penalty on early withdrawal of savings. 2007 tax software Pensions, Pensions. 2007 tax software Source rule, Pensions and Annuities Withholding on, Withholding on Pensions Personal exemption Prorating, Personal exemption. 2007 tax software Withholding allowance, Allowance for Personal Exemption Personal property, Personal Property Personal services income Connected with U. 2007 tax software S. 2007 tax software business, Personal Service Income Paid by foreign employer, Services Performed for Foreign Employer Source rule, Personal Services Tax treaty exemption, Personal Services Withholding on wages, Withholding on Wages Portfolio interest, Portfolio interest. 2007 tax software , Interest that does not qualify as portfolio interest. 2007 tax software Prizes, Scholarships, Grants, Prizes, and Awards Professional athletes, Professional athletes. 2007 tax software Property Depreciable, Depreciable property. 2007 tax software Intangible, Intangible property. 2007 tax software Inventory, Inventory property. 2007 tax software Personal, Personal Property Real, Real Property, Real Property Gain or Loss Protective return, Protective return. 2007 tax software Publications (see Tax help) Puerto Rico, residents of, Aliens From American Samoa or Puerto Rico, Special rules for aliens from certain U. 2007 tax software S. 2007 tax software possessions. 2007 tax software , Bona Fide Residents of American Samoa or Puerto Rico, Residents of American Samoa and Puerto Rico. 2007 tax software Q Qualified investment entity Distributions paid by, Qualified investment entities. 2007 tax software R Railroad retirement benefits, Social Security Benefits, Social security and railroad retirement benefits. 2007 tax software Real estate (see Real property) Real property Definition, Real Property Income from, Income From Real Property Natural resources, Natural resources. 2007 tax software Sale or exchange of, Real Property Gain or Loss Source rule, Real Property Tax withheld on sale of, Tax Withheld on Real Property Sales U. 2007 tax software S. 2007 tax software real property interest, U. 2007 tax software S. 2007 tax software real property interest. 2007 tax software Real property income, Real property income. 2007 tax software Refunds, claims for, Amended Returns and Claims for Refund Registered obligations, Obligations in registered form. 2007 tax software Rents, Rents or Royalties Researchers, wage withholding exemption under tax treaty, Students, teachers, and researchers. 2007 tax software , Appendix B—Tax Treaty Exemption Procedure for Teachers and Researchers Residence, interrupted, Interrupted Period of Residence Residency First year, First Year of Residency Last year, Last Year of Residency Starting date, Residency starting date under substantial presence test. 2007 tax software Termination date, Last Year of Residency Tests, Resident Aliens Resident alien, Resident Aliens Child tax credit, Child tax credit. 2007 tax software , Child tax credit. 2007 tax software , Child tax credit. 2007 tax software Defined, Resident Aliens Education credits, Education credits. 2007 tax software Head of household, Head of household. 2007 tax software Married filing jointly, Married filing jointly. 2007 tax software Qualifying widow(er), Qualifying widow(er). 2007 tax software Resident alien status, choosing, Choosing Resident Alien Status Retirement savings contributions credit Dual-status alien, Retirement savings contributions credit. 2007 tax software Nonresident alien, Retirement savings contributions credit. 2007 tax software Resident alien, Retirement savings contributions credit. 2007 tax software Royalties, Rents or Royalties S Sailing permits, departing aliens Aliens not requiring, Aliens Not Required To Obtain Sailing or Departure Permits Bond furnished, insuring tax payment, Paying Taxes and Obtaining Refunds Form 1040-C, Form 1040-C Form 2063, Form 2063 Forms to file, Forms To File When to get, When to get a sailing or departure permit. 2007 tax software Where to get, Where to get a sailing or departure permit. 2007 tax software Salary (see Personal services income) Sale of home, income from, Gain From the Sale of Your Main Home Sales or exchanges, capital assets, Sales or Exchanges of Capital Assets Scholarship Excludable, Scholarships and Fellowship Grants Source rule, Scholarships, Grants, Prizes, and Awards Withholding tax, Withholding on Scholarships and Fellowship Grants Securities, trading in, Trading in stocks, securities, and commodities. 2007 tax software Self-employed retirement plans, Self-employed SEP, SIMPLE, and qualified retirement plans. 2007 tax software Self-employment tax, Self-Employment Tax Social security benefits Dual-status alien, Social security and railroad retirement benefits. 2007 tax software Nonresident alien, Social Security Benefits Social security number, Social security number (SSN). 2007 tax software Social security tax Credit for excess tax withheld, Social Security and Medicare Taxes Excess withheld, Excess social security tax withheld. 2007 tax software Foreign students and exchange visitors, Students and Exchange Visitors International agreements, International Social Security Agreements Self-employment tax, Self-Employment Tax Totalization agreements, International Social Security Agreements Withheld in error, Refund of Taxes Withheld in Error Source of compensation for labor or personal services Alternative basis, Alternative Basis Multi-year compensation, Multi-year compensation. 2007 tax software Time basis, Time Basis Source of income, Source of Income Standard deduction, Standard deduction. 2007 tax software State and local income taxes, State and local income taxes. 2007 tax software Stocks, trading in, Trading in stocks, securities, and commodities. 2007 tax software Student loan interest expense, Student loan interest expense. 2007 tax software Students Alien status, Students. 2007 tax software Engaged in U. 2007 tax software S. 2007 tax software business, Students and trainees. 2007 tax software Fellowship grant, Scholarships, Grants, Prizes, and Awards, Withholding on Scholarships and Fellowship Grants Income from foreign employer, Students and exchange visitors. 2007 tax software Scholarship, Scholarships, Grants, Prizes, and Awards, Withholding on Scholarships and Fellowship Grants Social security and Medicare taxes, Students and Exchange Visitors Tax treaty exemption, Students, Apprentices, and Trainees Wage withholding exemption under tax treaty, Students, teachers, and researchers. 2007 tax software , Appendix A—Tax Treaty Exemption Procedure for Students Students and business apprentices from India, Students and business apprentices from India. 2007 tax software , Students and business apprentices from India. 2007 tax software , Students and business apprentices from India. 2007 tax software , Students and business apprentices from India. 2007 tax software Substantial presence test, Substantial Presence Test T Tax credits and payments Nonresident aliens, Nonresident Aliens Resident aliens, Tax Credits and Payments Tax help, How To Get Tax Help Tax home, Tax home. 2007 tax software , Tax home. 2007 tax software Tax paid on undistributed long-term capital gains, Tax paid on undistributed long-term capital gains. 2007 tax software Tax treaties Benefits, Treaty Income, Some Typical Tax Treaty Benefits Capital gains, Capital Gains Effect of, Effect of Tax Treaties Employees of foreign governments, Employees of Foreign Governments Exclusions from income, Income affected by treaties. 2007 tax software Income affected by, Income affected by treaties. 2007 tax software Reporting benefits claimed, Reporting Treaty Benefits Claimed Teachers and professors, Teachers, Professors, and Researchers Trainees, students, and apprentices, Students, Apprentices, and Trainees Tax Treaties Income entitled to benefits, Income Entitled to Tax Treaty Benefits Tax year, Tax Year, Tax Year Tax, expatriation, Expatriation Before June 4, 2004 Tax, transportation, Transportation Tax Taxpayer identification number Defined, Identification Number Penalty for failure to supply, Failure to supply taxpayer identification number. 2007 tax software Teachers Alien status, Teachers and trainees. 2007 tax software Tax treaty exemption, Teachers, Professors, and Researchers Wage withholding exemption under tax treaty, Students, teachers, and researchers. 2007 tax software , Appendix B—Tax Treaty Exemption Procedure for Teachers and Researchers Tie-breaker rule, Effect of Tax Treaties Tip income, Withholding on Tip Income Totalization agreements, International Social Security Agreements Trade or business, U. 2007 tax software S. 2007 tax software , Trade or Business in the United States Beneficiary of estate or trust, Beneficiary of an estate or trust. 2007 tax software Business operations, Business operations. 2007 tax software Income from U. 2007 tax software S. 2007 tax software sources, Effectively Connected Income Partnerships, Partnerships. 2007 tax software Personal services, Personal Services Students and trainees, Students and trainees. 2007 tax software Trading in stocks, securities, and commodities, Trading in stocks, securities, and commodities. 2007 tax software Trading in stocks, securities, and commodities, Trading in stocks, securities, and commodities. 2007 tax software Trainees, Teachers and trainees. 2007 tax software , Students and trainees. 2007 tax software Transportation income Connected with U. 2007 tax software S. 2007 tax software business, Transportation Income Source rule, Transportation Income Transportation of currency or monetary instruments, Other Forms You May Have To File Transportation tax, Transportation Tax Transportation-related employment, residents of Canada or Mexico, Residents of Canada or Mexico engaged in transportation-related employment. 2007 tax software Travel expenses, Travel expenses. 2007 tax software Treaties, income affected by, Income affected by treaties. 2007 tax software Treaty benefits for resident aliens, Resident Aliens Treaty benefits, reporting benefits claimed, Reporting Treaty Benefits Claimed Trust, beneficiary, Beneficiary of an estate or trust. 2007 tax software TTY/TDD information, How To Get Tax Help U U. 2007 tax software S Virgin Islands, residents of Withholding on wages, Residents of the U. 2007 tax software S. 2007 tax software Virgin Islands. 2007 tax software U. 2007 tax software S. 2007 tax software national, Qualifying widow(er). 2007 tax software , 5) Tax rates. 2007 tax software , Withholding on Wages U. 2007 tax software S. 2007 tax software real property holding corporation, U. 2007 tax software S. 2007 tax software real property holding corporation. 2007 tax software U. 2007 tax software S. 2007 tax software real property interest, U. 2007 tax software S. 2007 tax software real property interest. 2007 tax software U. 2007 tax software S. 2007 tax software tax-exempt income, expenses allocable to, Expenses allocable to U. 2007 tax software S. 2007 tax software tax-exempt income. 2007 tax software U. 2007 tax software S. 2007 tax software Virgin Islands, residents of Where to file, Aliens from the U. 2007 tax software S. 2007 tax software Virgin Islands. 2007 tax software W Wages (see Personal services income) Wages exempt from withholding, Wages Exempt From Withholding Wages, withholding on, Withholding on Wages Waiver of filing deadline, Waiver of filing deadline. 2007 tax software When to file, When To File, When to file for deductions and credits. 2007 tax software Where to file, When To File Who must file, Nonresident Aliens Withholding, Paying Tax Through Withholding or Estimated Tax , Withholding From Other Income Withholding tax Allowance for personal exemption, Allowance for Personal Exemption Central withholding agreements, Central withholding agreements. 2007 tax software Notification of alien status, Notification of Alien Status On sale of real property, Withholding of tax. 2007 tax software Pensions, Withholding on Pensions Puerto Rico, residents of, Residents of American Samoa and Puerto Rico. 2007 tax software Real property sales, Tax Withheld on Real Property Sales Residents of Canada, Mexico, or South Korea, U. 2007 tax software S. 2007 tax software nationals or residents of Canada, Mexico, or South Korea. 2007 tax software Scholarships and grants, Withholding on Scholarships and Fellowship Grants Social security taxes, Social Security and Medicare Taxes Tax treaty benefits, Income Entitled to Tax Treaty Benefits Tip income, Withholding on Tip Income U. 2007 tax software S. 2007 tax software nationals, U. 2007 tax software S. 2007 tax software nationals or residents of Canada, Mexico, or South Korea. 2007 tax software U. 2007 tax software S. 2007 tax software Virgin Islands, residents of, Residents of the U. 2007 tax software S. 2007 tax software Virgin Islands. 2007 tax software Wages, Withholding on Wages Wages exempt from, Wages Exempt From Withholding Where to report on the return, Tax Withheld Withholding from compensation, Withholding From Compensation Prev  Up     Home   More Online Publications
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NOTE:

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Goal 1
: Increase Customer Awareness and Confidence:
Ensure that all customers’ needs are met in a timely, accurate, cost-effective, and professional manner.

Goal 2: Workforce Development:
Build and sustain a workforce that is trained, knowledgeable, and well-versed in the latest developments in the IT and acquisition fields.

Goal 3: Create & Streamline Business Processes:
Implement an ongoing review of processes and procedures to ensure continuous improvement focused on exemplary customer service.

NOTE: The ordering process from TIPSS-3 is unchanged to TIPSS-4.

What’s New?

Competitive Action Status Report
A listing of all competitions issued under the TIPSS-4 ITS Contract. This report shows what stage the competition is in the process.

Forecast Report
A listing of upcoming TIPSS-4 ITS RTCP Releases. This report will show the fiscal year and quarter of the anticipated release date.


 

 

 

Page Last Reviewed or Updated: 22-Jan-2014

The 2007 Tax Software

2007 tax software 2. 2007 tax software   Ordinary or Capital Gain or Loss Table of Contents IntroductionSection 1231 transactions. 2007 tax software Topics - This chapter discusses: Useful Items - You may want to see: Capital Assets Noncapital AssetsCommodities derivative dealer. 2007 tax software Sales and Exchanges Between Related PersonsGain Is Ordinary Income Nondeductible Loss Other DispositionsSale of a Business Dispositions of Intangible Property Subdivision of Land Timber Precious Metals and Stones, Stamps, and Coins Coal and Iron Ore Conversion Transactions Introduction You must classify your gains and losses as either ordinary or capital (and your capital gains or losses as either short-term or long-term). 2007 tax software You must do this to figure your net capital gain or loss. 2007 tax software For individuals, a net capital gain may be taxed at a different tax rate than ordinary income. 2007 tax software See Capital Gains Tax Rates in chapter 4. 2007 tax software Your deduction for a net capital loss may be limited. 2007 tax software See Treatment of Capital Losses in chapter 4. 2007 tax software Capital gain or loss. 2007 tax software   Generally, you will have a capital gain or loss if you sell or exchange a capital asset. 2007 tax software You also may have a capital gain if your section 1231 transactions result in a net gain. 2007 tax software Section 1231 transactions. 2007 tax software   Section 1231 transactions are sales and exchanges of property held longer than 1 year and either used in a trade or business or held for the production of rents or royalties. 2007 tax software They also include certain involuntary conversions of business or investment property, including capital assets. 2007 tax software See Section 1231 Gains and Losses in chapter 3 for more information. 2007 tax software Topics - This chapter discusses: Capital assets Noncapital assets Sales and exchanges between  related persons Other dispositions Useful Items - You may want to see: Publication 550 Investment Income and Expenses Form (and Instructions) Schedule D (Form 1040) Capital Gains and Losses 4797 Sales of Business Property 8594 Asset Acquisition Statement Under Section 1060 8949 Sales and Other Dispositions of Capital Assets See chapter 5 for information about getting publications and forms. 2007 tax software Capital Assets Almost everything you own and use for personal purposes, pleasure, or investment is a capital asset. 2007 tax software For exceptions, see Noncapital Assets, later. 2007 tax software The following items are examples of capital assets. 2007 tax software Stocks and bonds. 2007 tax software A home owned and occupied by you and your family. 2007 tax software Timber grown on your home property or investment property, even if you make casual sales of the timber. 2007 tax software Household furnishings. 2007 tax software A car used for pleasure or commuting. 2007 tax software Coin or stamp collections. 2007 tax software Gems and jewelry. 2007 tax software Gold, silver, and other metals. 2007 tax software Personal-use property. 2007 tax software   Generally, property held for personal use is a capital asset. 2007 tax software Gain from a sale or exchange of that property is a capital gain. 2007 tax software Loss from the sale or exchange of that property is not deductible. 2007 tax software You can deduct a loss relating to personal-use property only if it results from a casualty or theft. 2007 tax software Investment property. 2007 tax software   Investment property (such as stocks and bonds) is a capital asset, and a gain or loss from its sale or exchange is a capital gain or loss. 2007 tax software This treatment does not apply to property used to produce rental income. 2007 tax software See Business assets, later, under Noncapital Assets. 2007 tax software Release of restriction on land. 2007 tax software   Amounts you receive for the release of a restrictive covenant in a deed to land are treated as proceeds from the sale of a capital asset. 2007 tax software Noncapital Assets A noncapital asset is property that is not a capital asset. 2007 tax software The following kinds of property are not capital assets. 2007 tax software Stock in trade, inventory, and other property you hold mainly for sale to customers in your trade or business. 2007 tax software Inventories are discussed in Publication 538, Accounting Periods and Methods. 2007 tax software But, see the Tip below. 2007 tax software Accounts or notes receivable acquired in the ordinary course of a trade or business for services rendered or from the sale of any properties described in (1), above. 2007 tax software Depreciable property used in your trade or business or as rental property (including section 197 intangibles defined later), even if the property is fully depreciated (or amortized). 2007 tax software Sales of this type of property are discussed in chapter 3. 2007 tax software Real property used in your trade or business or as rental property, even if the property is fully depreciated. 2007 tax software A copyright; a literary, musical, or artistic composition; a letter; a memorandum; or similar property (such as drafts of speeches, recordings, transcripts, manuscripts, drawings, or photographs): Created by your personal efforts, Prepared or produced for you (in the case of a letter, memorandum, or similar property), or Received from a person who created the property or for whom the property was prepared under circumstances (for example, by gift) entitling you to the basis of the person who created the property, or for whom it was prepared or produced. 2007 tax software But, see the Tip below. 2007 tax software U. 2007 tax software S. 2007 tax software Government publications you got from the government for free or for less than the normal sales price or that you acquired under circumstances entitling you to the basis of someone who got the publications for free or for less than the normal sales price. 2007 tax software Any commodities derivative financial instrument (discussed later) held by a commodities derivatives dealer unless it meets both of the following requirements. 2007 tax software It is established to the satisfaction of the IRS that the instrument has no connection to the activities of the dealer as a dealer. 2007 tax software The instrument is clearly identified in the dealer's records as meeting (a) by the end of the day on which it was acquired, originated, or entered into. 2007 tax software Any hedging transaction (defined later) that is clearly identified as a hedging transaction by the end of the day on which it was acquired, originated, or entered into. 2007 tax software Supplies of a type you regularly use or consume in the ordinary course of your trade or business. 2007 tax software You can elect to treat as capital assets certain self-created musical compositions or copyrights you sold or exchanged. 2007 tax software See chapter 4 of Publication 550 for details. 2007 tax software Property held mainly for sale to customers. 2007 tax software   Stock in trade, inventory, and other property you hold mainly for sale to customers in your trade or business are not capital assets. 2007 tax software Inventories are discussed in Publication 538. 2007 tax software Business assets. 2007 tax software   Real property and depreciable property used in your trade or business or as rental property (including section 197 intangibles defined later under Dispositions of Intangible Property) are not capital assets. 2007 tax software The sale or disposition of business property is discussed in chapter 3. 2007 tax software Letters and memoranda. 2007 tax software   Letters, memoranda, and similar property (such as drafts of speeches, recordings, transcripts, manuscripts, drawings, or photographs) are not treated as capital assets (as discussed earlier) if your personal efforts created them or if they were prepared or produced for you. 2007 tax software Nor is this property a capital asset if your basis in it is determined by reference to the person who created it or the person for whom it was prepared. 2007 tax software For this purpose, letters and memoranda addressed to you are considered prepared for you. 2007 tax software If letters or memoranda are prepared by persons under your administrative control, they are considered prepared for you whether or not you review them. 2007 tax software Commodities derivative financial instrument. 2007 tax software   A commodities derivative financial instrument is a commodities contract or other financial instrument for commodities (other than a share of corporate stock, a beneficial interest in a partnership or trust, a note, bond, debenture, or other evidence of indebtedness, or a section 1256 contract) the value or settlement price of which is calculated or determined by reference to a specified index (as defined in section 1221(b) of the Internal Revenue Code). 2007 tax software Commodities derivative dealer. 2007 tax software   A commodities derivative dealer is a person who regularly offers to enter into, assume, offset, assign, or terminate positions in commodities derivative financial instruments with customers in the ordinary course of a trade or business. 2007 tax software Hedging transaction. 2007 tax software   A hedging transaction is any transaction you enter into in the normal course of your trade or business primarily to manage any of the following. 2007 tax software Risk of price changes or currency fluctuations involving ordinary property you hold or will hold. 2007 tax software Risk of interest rate or price changes or currency fluctuations for borrowings you make or will make, or ordinary obligations you incur or will incur. 2007 tax software Sales and Exchanges Between Related Persons This section discusses the rules that may apply to the sale or exchange of property between related persons. 2007 tax software If these rules apply, gains may be treated as ordinary income and losses may not be deductible. 2007 tax software See Transfers to Spouse in chapter 1 for rules that apply to spouses. 2007 tax software Gain Is Ordinary Income If a gain is recognized on the sale or exchange of property to a related person, the gain may be ordinary income even if the property is a capital asset. 2007 tax software It is ordinary income if the sale or exchange is a depreciable property transaction or a controlled partnership transaction. 2007 tax software Depreciable property transaction. 2007 tax software   Gain on the sale or exchange of property, including a leasehold or a patent application, that is depreciable property in the hands of the person who receives it is ordinary income if the transaction is either directly or indirectly between any of the following pairs of entities. 2007 tax software A person and the person's controlled entity or entities. 2007 tax software A taxpayer and any trust in which the taxpayer (or his or her spouse) is a beneficiary unless the beneficiary's interest in the trust is a remote contingent interest; that is, the value of the interest computed actuarially is 5% or less of the value of the trust property. 2007 tax software An executor and a beneficiary of an estate unless the sale or exchange is in satisfaction of a pecuniary bequest (a bequest for a sum of money). 2007 tax software An employer (or any person related to the employer under rules (1), (2), or (3)) and a welfare benefit fund (within the meaning of section 419(e) of the Internal Revenue Code) that is controlled directly or indirectly by the employer (or any person related to the employer). 2007 tax software Controlled entity. 2007 tax software   A person's controlled entity is either of the following. 2007 tax software A corporation in which more than 50% of the value of all outstanding stock, or a partnership in which more than 50% of the capital interest or profits interest, is directly or indirectly owned by or for that person. 2007 tax software An entity whose relationship with that person is one of the following. 2007 tax software A corporation and a partnership if the same persons own more than 50% in value of the outstanding stock of the corporation and more than 50% of the capital interest or profits interest in the partnership. 2007 tax software Two corporations that are members of the same controlled group as defined in section 1563(a) of the Internal Revenue Code, except that “more than 50%” is substituted for “at least 80%” in that definition. 2007 tax software Two S corporations, if the same persons own more than 50% in value of the outstanding stock of each corporation. 2007 tax software Two corporations, one of which is an S corporation, if the same persons own more than 50% in value of the outstanding stock of each corporation. 2007 tax software Controlled partnership transaction. 2007 tax software   A gain recognized in a controlled partnership transaction may be ordinary income. 2007 tax software The gain is ordinary income if it results from the sale or exchange of property that, in the hands of the party who receives it, is a noncapital asset such as trade accounts receivable, inventory, stock in trade, or depreciable or real property used in a trade or business. 2007 tax software   A controlled partnership transaction is a transaction directly or indirectly between either of the following pairs of entities. 2007 tax software A partnership and a person who directly or indirectly owns more than 50% of the capital interest or profits interest in the partnership. 2007 tax software Two partnerships, if the same persons directly or indirectly own more than 50% of the capital interests or profits interests in both partnerships. 2007 tax software Determining ownership. 2007 tax software   In the transactions under Depreciable property transaction and Controlled partnership transaction, earlier, use the following rules to determine the ownership of stock or a partnership interest. 2007 tax software 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. 2007 tax software (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 in value of the stock of the corporation. 2007 tax software ) An individual is considered as owning the stock or partnership interest directly or indirectly owned by or for his or her family. 2007 tax software Family includes only brothers, sisters, half-brothers, half-sisters, spouse, ancestors, and lineal descendants. 2007 tax software For purposes of applying (1) or (2), above, stock or a partnership interest constructively owned by a person under (1) is treated as actually owned by that person. 2007 tax software But stock or a partnership interest constructively owned by an individual under (2) is not treated as owned by the individual for reapplying (2) to make another person the constructive owner of that stock or partnership interest. 2007 tax software Nondeductible Loss A loss on the sale or exchange of property between related persons is not deductible. 2007 tax software This applies to both direct and indirect transactions, but not to distributions of property from a corporation in a complete liquidation. 2007 tax software For the list of related persons, see Related persons next. 2007 tax software If a sale or exchange is between any of these related persons and involves the lump-sum sale of a number of blocks of stock or pieces of property, the gain or loss must be figured separately for each block of stock or piece of property. 2007 tax software The gain on each item is taxable. 2007 tax software The loss on any item is nondeductible. 2007 tax software Gains from the sales of any of these items may not be offset by losses on the sales of any of the other items. 2007 tax software Related persons. 2007 tax software   The following is a list of related persons. 2007 tax software Members of a family, including only brothers, sisters, half-brothers, half-sisters, spouse, ancestors (parents, grandparents, etc. 2007 tax software ), and lineal descendants (children, grandchildren, etc. 2007 tax software ). 2007 tax software An individual and a corporation if the individual directly or indirectly owns more than 50% in value of the outstanding stock of the corporation. 2007 tax software Two corporations that are members of the same controlled group as defined in section 267(f) of the Internal Revenue Code. 2007 tax software A trust fiduciary and a corporation if the trust or the grantor of the trust directly or indirectly owns more than 50% in value of the outstanding stock of the corporation. 2007 tax software A grantor and fiduciary, and the fiduciary and beneficiary, of any trust. 2007 tax software Fiduciaries of two different trusts, and the fiduciary and beneficiary of two different trusts, if the same person is the grantor of both trusts. 2007 tax software A tax-exempt educational or charitable organization and a person who directly or indirectly controls the organization, or a member of that person's family. 2007 tax software A corporation and a partnership if the same persons own more than 50% in value of the outstanding stock of the corporation and more than 50% of the capital interest or profits interest in the partnership. 2007 tax software Two S corporations if the same persons own more than 50% in value of the outstanding stock of each corporation. 2007 tax software Two corporations, one of which is an S corporation, if the same persons own more than 50% in value of the outstanding stock of each corporation. 2007 tax software An executor and a beneficiary of an estate unless the sale or exchange is in satisfaction of a pecuniary bequest. 2007 tax software Two partnerships if the same persons directly or indirectly own more than 50% of the capital interests or profits interests in both partnerships. 2007 tax software A person and a partnership if the person directly or indirectly owns more than 50% of the capital interest or profits interest in the partnership. 2007 tax software Partnership interests. 2007 tax software   The nondeductible loss rule does not apply to a sale or exchange of an interest in the partnership between the related persons described in (12) or (13) above. 2007 tax software Controlled groups. 2007 tax software   Losses on transactions between members of the same controlled group described in (3) earlier are deferred rather than denied. 2007 tax software   For more information, see section 267(f) of the Internal Revenue Code. 2007 tax software Ownership of stock or partnership interests. 2007 tax software   In determining whether an individual directly or indirectly owns any of the outstanding stock of a corporation or an interest in a partnership for a loss on a sale or exchange, the following rules apply. 2007 tax software 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. 2007 tax software (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 in value of the stock of the corporation. 2007 tax software ) An individual is considered as owning the stock or partnership interest directly or indirectly owned by or for his or her family. 2007 tax software Family includes only brothers, sisters, half-brothers, half-sisters, spouse, ancestors, and lineal descendants. 2007 tax software An individual owning (other than by applying (2)) any stock in a corporation is considered to own the stock directly or indirectly owned by or for his or her partner. 2007 tax software For purposes of applying (1), (2), or (3), stock or a partnership interest constructively owned by a person under (1) is treated as actually owned by that person. 2007 tax software But stock or a partnership interest constructively owned by an individual under (2) or (3) is not treated as owned by the individual for reapplying either (2) or (3) to make another person the constructive owner of that stock or partnership interest. 2007 tax software Indirect transactions. 2007 tax software   You cannot deduct your loss on the sale of stock through your broker if under a prearranged plan a related person or entity buys the same stock you had owned. 2007 tax software This does not apply to a cross-trade between related parties through an exchange that is purely coincidental and is not prearranged. 2007 tax software Property received from a related person. 2007 tax software   If, in a purchase or exchange, you received property from a related person who had a loss that was not allowable and you later sell or exchange the property at a gain, you recognize the gain only to the extent it is more than the loss previously disallowed to the related person. 2007 tax software This rule applies only to the original transferee. 2007 tax software Example 1. 2007 tax software Your brother sold stock to you for $7,600. 2007 tax software His cost basis was $10,000. 2007 tax software His loss of $2,400 was not deductible. 2007 tax software You later sell the same stock to an unrelated party for $10,500, realizing a gain of $2,900 ($10,500 − $7,600). 2007 tax software Your recognized gain is only $500, the gain that is more than the $2,400 loss not allowed to your brother. 2007 tax software Example 2. 2007 tax software Assume the same facts as in Example 1, except that you sell the stock for $6,900 instead of $10,500. 2007 tax software Your recognized loss is only $700 ($7,600 − $6,900). 2007 tax software You cannot deduct the loss not allowed to your brother. 2007 tax software Other Dispositions This section discusses rules for determining the treatment of gain or loss from various dispositions of property. 2007 tax software Sale of a Business The sale of a business usually is not a sale of one asset. 2007 tax software Instead, all the assets of the business are sold. 2007 tax software Generally, when this occurs, each asset is treated as being sold separately for determining the treatment of gain or loss. 2007 tax software A business usually has many assets. 2007 tax software When sold, these assets must be classified as capital assets, depreciable property used in the business, real property used in the business, or property held for sale to customers, such as inventory or stock in trade. 2007 tax software The gain or loss on each asset is figured separately. 2007 tax software The sale of capital assets results in capital gain or loss. 2007 tax software The sale of real property or depreciable property used in the business and held longer than 1 year results in gain or loss from a section 1231 transaction (discussed in chapter 3). 2007 tax software The sale of inventory results in ordinary income or loss. 2007 tax software Partnership interests. 2007 tax software   An interest in a partnership or joint venture is treated as a capital asset when sold. 2007 tax software The part of any gain or loss from unrealized receivables or inventory items will be treated as ordinary gain or loss. 2007 tax software For more information, see Disposition of Partner's Interest in Publication 541. 2007 tax software Corporation interests. 2007 tax software   Your interest in a corporation is represented by stock certificates. 2007 tax software When you sell these certificates, you usually realize capital gain or loss. 2007 tax software For information on the sale of stock, see chapter 4 in Publication 550. 2007 tax software Corporate liquidations. 2007 tax software   Corporate liquidations of property generally are treated as a sale or exchange. 2007 tax software Gain or loss generally is recognized by the corporation on a liquidating sale of its assets. 2007 tax software Gain or loss generally is recognized also on a liquidating distribution of assets as if the corporation sold the assets to the distributee at fair market value. 2007 tax software   In certain cases in which the distributee is a corporation in control of the distributing corporation, the distribution may not be taxable. 2007 tax software For more information, see section 332 of the Internal Revenue Code and the related regulations. 2007 tax software Allocation of consideration paid for a business. 2007 tax software   The sale of a trade or business for a lump sum is considered a sale of each individual asset rather than of a single asset. 2007 tax software Except for assets exchanged under any nontaxable exchange rules, both the buyer and seller of a business must use the residual method (explained later) to allocate the consideration to each business asset transferred. 2007 tax software This method determines gain or loss from the transfer of each asset and how much of the consideration is for goodwill and certain other intangible property. 2007 tax software It also determines the buyer's basis in the business assets. 2007 tax software Consideration. 2007 tax software   The buyer's consideration is the cost of the assets acquired. 2007 tax software The seller's consideration is the amount realized (money plus the fair market value of property received) from the sale of assets. 2007 tax software Residual method. 2007 tax software   The residual method must be used for any transfer of a group of assets that constitutes a trade or business and for which the buyer's basis is determined only by the amount paid for the assets. 2007 tax software This applies to both direct and indirect transfers, such as the sale of a business or the sale of a partnership interest in which the basis of the buyer's share of the partnership assets is adjusted for the amount paid under section 743(b) of the Internal Revenue Code. 2007 tax software Section 743(b) applies if a partnership has an election in effect under section 754 of the Internal Revenue Code. 2007 tax software   A group of assets constitutes a trade or business if either of the following applies. 2007 tax software Goodwill or going concern value could, under any circumstances, attach to them. 2007 tax software The use of the assets would constitute an active trade or business under section 355 of the Internal Revenue Code. 2007 tax software   The residual method provides for the consideration to be reduced first by the amount of Class I assets (defined below). 2007 tax software The consideration remaining after this reduction must be allocated among the various business assets in a certain order. 2007 tax software See Classes of assets next for the complete order. 2007 tax software Classes of assets. 2007 tax software   The following definitions are the classifications for deemed or actual asset acquisitions. 2007 tax software Allocate the consideration among the assets in the following order. 2007 tax software The amount allocated to an asset, other than a Class VII asset, cannot exceed its fair market value on the purchase date. 2007 tax software The amount you can allocate to an asset also is subject to any applicable limits under the Internal Revenue Code or general principles of tax law. 2007 tax software Class I assets are cash and general deposit accounts (including checking and savings accounts but excluding certificates of deposit). 2007 tax software Class II assets are certificates of deposit, U. 2007 tax software S. 2007 tax software Government securities, foreign currency, and actively traded personal property, including stock and securities. 2007 tax software Class III assets are accounts receivable, other debt instruments, and assets that you mark to market at least annually for federal income tax purposes. 2007 tax software However, see section 1. 2007 tax software 338-6(b)(2)(iii) of the regulations for exceptions that apply to debt instruments issued by persons related to a target corporation, contingent debt instruments, and debt instruments convertible into stock or other property. 2007 tax software Class IV assets are property of a kind that would properly be included in inventory if on hand at the end of the tax year or property held by the taxpayer primarily for sale to customers in the ordinary course of business. 2007 tax software Class V assets are all assets other than Class I, II, III, IV, VI, and VII assets. 2007 tax software    Note. 2007 tax software Furniture and fixtures, buildings, land, vehicles, and equipment, which constitute all or part of a trade or business are generally Class V assets. 2007 tax software Class VI assets are section 197 intangibles (other than goodwill and going concern value). 2007 tax software Class VII assets are goodwill and going concern value (whether the goodwill or going concern value qualifies as a section 197 intangible). 2007 tax software   If an asset described in one of the classifications described above can be included in more than one class, include it in the lower numbered class. 2007 tax software For example, if an asset is described in both Class II and Class IV, choose Class II. 2007 tax software Example. 2007 tax software The total paid in the sale of the assets of Company SKB is $21,000. 2007 tax software No cash or deposit accounts or similar accounts were sold. 2007 tax software The company's U. 2007 tax software S. 2007 tax software Government securities sold had a fair market value of $3,200. 2007 tax software The only other asset transferred (other than goodwill and going concern value) was inventory with a fair market value of $15,000. 2007 tax software Of the $21,000 paid for the assets of Company SKB, $3,200 is allocated to U. 2007 tax software S. 2007 tax software Government securities, $15,000 to inventory assets, and the remaining $2,800 to goodwill and going concern value. 2007 tax software Agreement. 2007 tax software   The buyer and seller may enter into a written agreement as to the allocation of any consideration or the fair market value of any of the assets. 2007 tax software This agreement is binding on both parties unless the IRS determines the amounts are not appropriate. 2007 tax software Reporting requirement. 2007 tax software   Both the buyer and seller involved in the sale of business assets must report to the IRS the allocation of the sales price among section 197 intangibles and the other business assets. 2007 tax software Use Form 8594, Asset Acquisition Statement Under Section 1060, to provide this information. 2007 tax software Generally, the buyer and seller should each attach Form 8594 to their federal income tax return for the year in which the sale occurred. 2007 tax software See the Instructions for Form 8594. 2007 tax software Dispositions of Intangible Property Intangible property is any personal property that has value but cannot be seen or touched. 2007 tax software It includes such items as patents, copyrights, and the goodwill value of a business. 2007 tax software Gain or loss on the sale or exchange of amortizable or depreciable intangible property held longer than 1 year (other than an amount recaptured as ordinary income) is a section 1231 gain or loss. 2007 tax software The treatment of section 1231 gain or loss and the recapture of amortization and depreciation as ordinary income are explained in chapter 3. 2007 tax software See chapter 8 of Publication 535, Business Expenses, for information on amortizable intangible property and chapter 1 of Publication 946, How To Depreciate Property, for information on intangible property that can and cannot be depreciated. 2007 tax software Gain or loss on dispositions of other intangible property is ordinary or capital depending on whether the property is a capital asset or a noncapital asset. 2007 tax software The following discussions explain special rules that apply to certain dispositions of intangible property. 2007 tax software Section 197 Intangibles Section 197 intangibles are certain intangible assets acquired after August 10, 1993 (after July 25, 1991, if chosen), and held in connection with the conduct of a trade or business or an activity entered into for profit whose costs are amortized over 15 years. 2007 tax software They include the following assets. 2007 tax software Goodwill. 2007 tax software Going concern value. 2007 tax software Workforce in place. 2007 tax software Business books and records, operating systems, and other information bases. 2007 tax software Patents, copyrights, formulas, processes, designs, patterns, know how, formats, and similar items. 2007 tax software Customer-based intangibles. 2007 tax software Supplier-based intangibles. 2007 tax software Licenses, permits, and other rights granted by a governmental unit. 2007 tax software Covenants not to compete entered into in connection with the acquisition of a business. 2007 tax software Franchises, trademarks, and trade names. 2007 tax software See chapter 8 of Publication 535 for a description of each intangible. 2007 tax software Dispositions. 2007 tax software   You cannot deduct a loss from the disposition or worthlessness of a section 197 intangible you acquired in the same transaction (or series of related transactions) as another section 197 intangible you still hold. 2007 tax software Instead, you must increase the adjusted basis of your retained section 197 intangible by the nondeductible loss. 2007 tax software If you retain more than one section 197 intangible, increase each intangible's adjusted basis. 2007 tax software Figure the increase by multiplying the nondeductible loss by a fraction, the numerator (top number) of which is the retained intangible's adjusted basis on the date of the loss and the denominator (bottom number) of which is the total adjusted basis of all retained intangibles on the date of the loss. 2007 tax software   In applying this rule, members of the same controlled group of corporations and commonly controlled businesses are treated as a single entity. 2007 tax software For example, a corporation cannot deduct a loss on the sale of a section 197 intangible if, after the sale, a member of the same controlled group retains other section 197 intangibles acquired in the same transaction as the intangible sold. 2007 tax software Covenant not to compete. 2007 tax software   A covenant not to compete (or similar arrangement) that is a section 197 intangible cannot be treated as disposed of or worthless before you have disposed of your entire interest in the trade or business for which the covenant was entered into. 2007 tax software Members of the same controlled group of corporations and commonly controlled businesses are treated as a single entity in determining whether a member has disposed of its entire interest in a trade or business. 2007 tax software Anti-churning rules. 2007 tax software   Anti-churning rules prevent a taxpayer from converting section 197 intangibles that do not qualify for amortization into property that would qualify for amortization. 2007 tax software However, these rules do not apply to part of the basis of property acquired by certain related persons if the transferor elects to do both the following. 2007 tax software Recognize gain on the transfer of the property. 2007 tax software Pay income tax on the gain at the highest tax rate. 2007 tax software   If the transferor is a partnership or S corporation, the partnership or S corporation (not the partners or shareholders) can make the election. 2007 tax software But each partner or shareholder must pay the tax on his or her share of gain. 2007 tax software   To make the election, you, as the transferor, must attach a statement containing certain information to your income tax return for the year of the transfer. 2007 tax software You must file the tax return by the due date (including extensions). 2007 tax software You must also notify the transferee of the election in writing by the due date of the return. 2007 tax software   If you timely filed your return without making the election, you can make the election by filing an amended return within 6 months after the due date of the return (excluding extensions). 2007 tax software Attach the statement to the amended return and write “Filed pursuant to section 301. 2007 tax software 9100-2” at the top of the statement. 2007 tax software File the amended return at the same address the original return was filed. 2007 tax software For more information about making the election, see Regulations section 1. 2007 tax software 197-2(h)(9). 2007 tax software For information about reporting the tax on your income tax return, see the Instructions for Form 4797. 2007 tax software Patents The transfer of a patent by an individual is treated as a sale or exchange of a capital asset held longer than 1 year. 2007 tax software This applies even if the payments for the patent are made periodically during the transferee's use or are contingent on the productivity, use, or disposition of the patent. 2007 tax software For information on the treatment of gain or loss on the transfer of capital assets, see chapter 4. 2007 tax software This treatment applies to your transfer of a patent if you meet all the following conditions. 2007 tax software You are the holder of the patent. 2007 tax software You transfer the patent other than by gift, inheritance, or devise. 2007 tax software You transfer all substantial rights to the patent or an undivided interest in all such rights. 2007 tax software You do not transfer the patent to a related person. 2007 tax software Holder. 2007 tax software   You are the holder of a patent if you are either of the following. 2007 tax software The individual whose effort created the patent property and who qualifies as the original and first inventor. 2007 tax software The individual who bought an interest in the patent from the inventor before the invention was tested and operated successfully under operating conditions and who is neither related to, nor the employer of, the inventor. 2007 tax software All substantial rights. 2007 tax software   All substantial rights to patent property are all rights that have value when they are transferred. 2007 tax software A security interest (such as a lien), or a reservation calling for forfeiture for nonperformance, is not treated as a substantial right for these rules and may be kept by you as the holder of the patent. 2007 tax software   All substantial rights to a patent are not transferred if any of the following apply to the transfer. 2007 tax software The rights are limited geographically within a country. 2007 tax software The rights are limited to a period less than the remaining life of the patent. 2007 tax software The rights are limited to fields of use within trades or industries and are less than all the rights that exist and have value at the time of the transfer. 2007 tax software The rights are less than all the claims or inventions covered by the patent that exist and have value at the time of the transfer. 2007 tax software Related persons. 2007 tax software   This tax treatment does not apply if the transfer is directly or indirectly between you and a related person as defined earlier in the list under Nondeductible Loss, with the following changes. 2007 tax software Members of your family include your spouse, ancestors, and lineal descendants, but not your brothers, sisters, half-brothers, or half-sisters. 2007 tax software Substitute “25% or more” ownership for “more than 50%. 2007 tax software ”   If you fit within the definition of a related person independent of family status, the brother-sister exception in (1), earlier, does not apply. 2007 tax software For example, a transfer between a brother and a sister as beneficiary and fiduciary of the same trust is a transfer between related persons. 2007 tax software The brother-sister exception does not apply because the trust relationship is independent of family status. 2007 tax software Franchise, Trademark, or Trade Name If you transfer or renew a franchise, trademark, or trade name for a price contingent on its productivity, use, or disposition, the amount you receive generally is treated as an amount realized from the sale of a noncapital asset. 2007 tax software A franchise includes an agreement that gives one of the parties the right to distribute, sell, or provide goods, services, or facilities within a specified area. 2007 tax software Significant power, right, or continuing interest. 2007 tax software   If you keep any significant power, right, or continuing interest in the subject matter of a franchise, trademark, or trade name that you transfer or renew, the amount you receive is ordinary royalty income rather than an amount realized from a sale or exchange. 2007 tax software   A significant power, right, or continuing interest in a franchise, trademark, or trade name includes, but is not limited to, the following rights in the transferred interest. 2007 tax software A right to disapprove any assignment of the interest, or any part of it. 2007 tax software A right to end the agreement at will. 2007 tax software A right to set standards of quality for products used or sold, or for services provided, and for the equipment and facilities used to promote such products or services. 2007 tax software A right to make the recipient sell or advertise only your products or services. 2007 tax software A right to make the recipient buy most supplies and equipment from you. 2007 tax software A right to receive payments based on the productivity, use, or disposition of the transferred item of interest if those payments are a substantial part of the transfer agreement. 2007 tax software Subdivision of Land If you own a tract of land and, to sell or exchange it, you subdivide it into individual lots or parcels, the gain normally is ordinary income. 2007 tax software However, you may receive capital gain treatment on at least part of the proceeds provided you meet certain requirements. 2007 tax software See section 1237 of the Internal Revenue Code. 2007 tax software Timber Standing timber held as investment property is a capital asset. 2007 tax software Gain or loss from its sale is reported as a capital gain or loss on Form 8949, and Schedule D (Form 1040), as applicable. 2007 tax software If you held the timber primarily for sale to customers, it is not a capital asset. 2007 tax software Gain or loss on its sale is ordinary business income or loss. 2007 tax software It is reported in the gross receipts or sales and cost of goods sold items of your return. 2007 tax software Farmers who cut timber on their land and sell it as logs, firewood, or pulpwood usually have no cost or other basis for that timber. 2007 tax software These sales constitute a very minor part of their farm businesses. 2007 tax software In these cases, amounts realized from such sales, and the expenses of cutting, hauling, etc. 2007 tax software , are ordinary farm income and expenses reported on Schedule F (Form 1040), Profit or Loss From Farming. 2007 tax software Different rules apply if you owned the timber longer than 1 year and elect to either: Treat timber cutting as a sale or exchange, or Enter into a cutting contract. 2007 tax software Timber is considered cut on the date when, in the ordinary course of business, the quantity of felled timber is first definitely determined. 2007 tax software This is true whether the timber is cut under contract or whether you cut it yourself. 2007 tax software Under the rules discussed below, disposition of the timber is treated as a section 1231 transaction. 2007 tax software See chapter 3. 2007 tax software Gain or loss is reported on Form 4797. 2007 tax software Christmas trees. 2007 tax software   Evergreen trees, such as Christmas trees, that are more than 6 years old when severed from their roots and sold for ornamental purposes are included in the term timber. 2007 tax software They qualify for both rules discussed below. 2007 tax software Election to treat cutting as a sale or exchange. 2007 tax software   Under the general rule, the cutting of timber results in no gain or loss. 2007 tax software It is not until a sale or exchange occurs that gain or loss is realized. 2007 tax software But if you owned or had a contractual right to cut timber, you can elect to treat the cutting of timber as a section 1231 transaction in the year the timber is cut. 2007 tax software Even though the cut timber is not actually sold or exchanged, you report your gain or loss on the cutting for the year the timber is cut. 2007 tax software Any later sale results in ordinary business income or loss. 2007 tax software See Example, later. 2007 tax software   To elect this treatment, you must: Own or hold a contractual right to cut the timber for a period of more than 1 year before it is cut, and Cut the timber for sale or for use in your trade or business. 2007 tax software Making the election. 2007 tax software   You make the election on your return for the year the cutting takes place by including in income the gain or loss on the cutting and including a computation of the gain or loss. 2007 tax software You do not have to make the election in the first year you cut timber. 2007 tax software You can make it in any year to which the election would apply. 2007 tax software If the timber is partnership property, the election is made on the partnership return. 2007 tax software This election cannot be made on an amended return. 2007 tax software   Once you have made the election, it remains in effect for all later years unless you cancel it. 2007 tax software   If you previously elected to treat the cutting of timber as a sale or exchange, you may revoke this election without the consent of the IRS. 2007 tax software The prior election (and revocation) is disregarded for purposes of making a subsequent election. 2007 tax software See Form T (Timber), Forest Activities Schedule, for more information. 2007 tax software Gain or loss. 2007 tax software   Your gain or loss on the cutting of standing timber is the difference between its adjusted basis for depletion and its fair market value on the first day of your tax year in which it is cut. 2007 tax software   Your adjusted basis for depletion of cut timber is based on the number of units (feet board measure, log scale, or other units) of timber cut during the tax year and considered to be sold or exchanged. 2007 tax software Your adjusted basis for depletion is also based on the depletion unit of timber in the account used for the cut timber, and should be figured in the same manner as shown in section 611 of the Internal Revenue Code and the related regulations. 2007 tax software   Timber depletion is discussed in chapter 9 of Publication 535. 2007 tax software Example. 2007 tax software In April 2013, you had owned 4,000 MBF (1,000 board feet) of standing timber longer than 1 year. 2007 tax software It had an adjusted basis for depletion of $40 per MBF. 2007 tax software You are a calendar year taxpayer. 2007 tax software On January 1, 2013, the timber had a fair market value (FMV) of $350 per MBF. 2007 tax software It was cut in April for sale. 2007 tax software On your 2013 tax return, you elect to treat the cutting of the timber as a sale or exchange. 2007 tax software You report the difference between the fair market value and your adjusted basis for depletion as a gain. 2007 tax software This amount is reported on Form 4797 along with your other section 1231 gains and losses to figure whether it is treated as capital gain or as ordinary gain. 2007 tax software You figure your gain as follows. 2007 tax software FMV of timber January 1, 2013 $1,400,000 Minus: Adjusted basis for depletion 160,000 Section 1231 gain $1,240,000 The fair market value becomes your basis in the cut timber and a later sale of the cut timber including any by-product or tree tops will result in ordinary business income or loss. 2007 tax software Outright sales of timber. 2007 tax software   Outright sales of timber by landowners qualify for capital gains treatment using rules similar to the rules for certain disposal of timber under a contract with retained economic interest (defined below). 2007 tax software However, for outright sales, the date of disposal is not deemed to be the date the timber is cut because the landowner can elect to treat the payment date as the date of disposal (see below). 2007 tax software Cutting contract. 2007 tax software   You must treat the disposal of standing timber under a cutting contract as a section 1231 transaction if all the following apply to you. 2007 tax software You are the owner of the timber. 2007 tax software You held the timber longer than 1 year before its disposal. 2007 tax software You kept an economic interest in the timber. 2007 tax software   You have kept an economic interest in standing timber if, under the cutting contract, the expected return on your investment is conditioned on the cutting of the timber. 2007 tax software   The difference between the amount realized from the disposal of the timber and its adjusted basis for depletion is treated as gain or loss on its sale. 2007 tax software Include this amount on Form 4797 along with your other section 1231 gains or losses to figure whether it is treated as capital or ordinary gain or loss. 2007 tax software Date of disposal. 2007 tax software   The date of disposal is the date the timber is cut. 2007 tax software However, for outright sales by landowners or if you receive payment under the contract before the timber is cut, you can elect to treat the date of payment as the date of disposal. 2007 tax software   This election applies only to figure the holding period of the timber. 2007 tax software It has no effect on the time for reporting gain or loss (generally when the timber is sold or exchanged). 2007 tax software   To make this election, attach a statement to the tax return filed by the due date (including extensions) for the year payment is received. 2007 tax software The statement must identify the advance payments subject to the election and the contract under which they were made. 2007 tax software   If you timely filed your return for the year you received payment without making the election, you still can make the election by filing an amended return within 6 months after the due date for that year's return (excluding extensions). 2007 tax software Attach the statement to the amended return and write “Filed pursuant to section 301. 2007 tax software 9100-2” at the top of the statement. 2007 tax software File the amended return at the same address the original return was filed. 2007 tax software Owner. 2007 tax software   The owner of timber is any person who owns an interest in it, including a sublessor and the holder of a contract to cut the timber. 2007 tax software You own an interest in timber if you have the right to cut it for sale on your own account or for use in your business. 2007 tax software Tree stumps. 2007 tax software   Tree stumps are a capital asset if they are on land held by an investor who is not in the timber or stump business as a buyer, seller, or processor. 2007 tax software Gain from the sale of stumps sold in one lot by such a holder is taxed as a capital gain. 2007 tax software However, tree stumps held by timber operators after the saleable standing timber was cut and removed from the land are considered by-products. 2007 tax software Gain from the sale of stumps in lots or tonnage by such operators is taxed as ordinary income. 2007 tax software   See Form T (Timber) and its separate instructions for more information about dispositions of timber. 2007 tax software Precious Metals and Stones, Stamps, and Coins Gold, silver, gems, stamps, coins, etc. 2007 tax software , are capital assets except when they are held for sale by a dealer. 2007 tax software Any gain or loss from their sale or exchange generally is a capital gain or loss. 2007 tax software If you are a dealer, the amount received from the sale is ordinary business income. 2007 tax software Coal and Iron Ore You must treat the disposal of coal (including lignite) or iron ore mined in the United States as a section 1231 transaction if both the following apply to you. 2007 tax software You owned the coal or iron ore longer than 1 year before its disposal. 2007 tax software You kept an economic interest in the coal or iron ore. 2007 tax software For this rule, the date the coal or iron ore is mined is considered the date of its disposal. 2007 tax software Your gain or loss is the difference between the amount realized from disposal of the coal or iron ore and the adjusted basis you use to figure cost depletion (increased by certain expenses not allowed as deductions for the tax year). 2007 tax software This amount is included on Form 4797 along with your other section 1231 gains and losses. 2007 tax software You are considered an owner if you own or sublet an economic interest in the coal or iron ore in place. 2007 tax software If you own only an option to buy the coal in place, you do not qualify as an owner. 2007 tax software In addition, this gain or loss treatment does not apply to income realized by an owner who is a co-adventurer, partner, or principal in the mining of coal or iron ore. 2007 tax software The expenses of making and administering the contract under which the coal or iron ore was disposed of and the expenses of preserving the economic interest kept under the contract are not allowed as deductions in figuring taxable income. 2007 tax software Rather, their total, along with the adjusted depletion basis, is deducted from the amount received to determine gain. 2007 tax software If the total of these expenses plus the adjusted depletion basis is more than the amount received, the result is a loss. 2007 tax software Special rule. 2007 tax software   The above treatment does not apply if you directly or indirectly dispose of the iron ore or coal to any of the following persons. 2007 tax software A related person whose relationship to you would result in the disallowance of a loss (see Nondeductible Loss under Sales and Exchanges Between Related Persons, earlier). 2007 tax software An individual, trust, estate, partnership, association, company, or corporation owned or controlled directly or indirectly by the same interests that own or control your business. 2007 tax software Conversion Transactions Recognized gain on the disposition or termination of any position held as part of certain conversion transactions is treated as ordinary income. 2007 tax software This applies if substantially all your expected return is attributable to the time value of your net investment (like interest on a loan) and the transaction is any of the following. 2007 tax software An applicable straddle (generally, any set of offsetting positions with respect to personal property, including stock). 2007 tax software A transaction in which you acquire property and, at or about the same time, you contract to sell the same or substantially identical property at a specified price. 2007 tax software Any other transaction that is marketed and sold as producing capital gain from a transaction in which substantially all of your expected return is due to the time value of your net investment. 2007 tax software For more information, see chapter 4 of Publication 550. 2007 tax software Prev  Up  Next   Home   More Online Publications