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2011 1040ez Instructions

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2011 1040ez Instructions

2011 1040ez instructions 5. 2011 1040ez instructions   Recordkeeping Table of Contents How To Prove ExpensesWhat Are Adequate Records? What If I Have Incomplete Records? Separating and Combining Expenses How Long To Keep Records and Receipts Examples of Records If you deduct travel, entertainment, gift, or transportation expenses, you must be able to prove (substantiate) certain elements of expense. 2011 1040ez instructions This chapter discusses the records you need to keep to prove these expenses. 2011 1040ez instructions If you keep timely and accurate records, you will have support to show the IRS if your tax return is ever examined. 2011 1040ez instructions You will also have proof of expenses that your employer may require if you are reimbursed under an accountable plan. 2011 1040ez instructions These plans are discussed in chapter 6 under Reimbursements . 2011 1040ez instructions How To Prove Expenses Table 5-1 is a summary of records you need to prove each expense discussed in this publication. 2011 1040ez instructions You must be able to prove the elements listed across the top portion of the chart. 2011 1040ez instructions You prove them by having the information and receipts (where needed) for the expenses listed in the first column. 2011 1040ez instructions You cannot deduct amounts that you approximate or estimate. 2011 1040ez instructions You should keep adequate records to prove your expenses or have sufficient evidence that will support your own statement. 2011 1040ez instructions You must generally prepare a written record for it to be considered adequate. 2011 1040ez instructions This is because written evidence is more reliable than oral evidence alone. 2011 1040ez instructions However, if you prepare a record on a computer, it is considered an adequate record. 2011 1040ez instructions What Are Adequate Records? You should keep the proof you need in an account book, diary, log, statement of expense, trip sheets, or similar record. 2011 1040ez instructions You should also keep documentary evidence that, together with your record, will support each element of an expense. 2011 1040ez instructions Documentary evidence. 2011 1040ez instructions   You generally must have documentary evidence, such as receipts, canceled checks, or bills, to support your expenses. 2011 1040ez instructions Exception. 2011 1040ez instructions   Documentary evidence is not needed if any of the following conditions apply. 2011 1040ez instructions You have meals or lodging expenses while traveling away from home for which you account to your employer under an accountable plan, and you use a per diem allowance method that includes meals and/or lodging. 2011 1040ez instructions ( Accountable plans and per diem allowances are discussed in chapter 6. 2011 1040ez instructions ) Your expense, other than lodging, is less than $75. 2011 1040ez instructions You have a transportation expense for which a receipt is not readily available. 2011 1040ez instructions Adequate evidence. 2011 1040ez instructions   Documentary evidence ordinarily will be considered adequate if it shows the amount, date, place, and essential character of the expense. 2011 1040ez instructions   For example, a hotel receipt is enough to support expenses for business travel if it has all of the following information. 2011 1040ez instructions The name and location of the hotel. 2011 1040ez instructions The dates you stayed there. 2011 1040ez instructions Separate amounts for charges such as lodging, meals, and telephone calls. 2011 1040ez instructions   A restaurant receipt is enough to prove an expense for a business meal if it has all of the following information. 2011 1040ez instructions The name and location of the restaurant. 2011 1040ez instructions The number of people served. 2011 1040ez instructions The date and amount of the expense. 2011 1040ez instructions If a charge is made for items other than food and beverages, the receipt must show that this is the case. 2011 1040ez instructions Canceled check. 2011 1040ez instructions   A canceled check, together with a bill from the payee, ordinarily establishes the cost. 2011 1040ez instructions However, a canceled check by itself does not prove a business expense without other evidence to show that it was for a business purpose. 2011 1040ez instructions Duplicate information. 2011 1040ez instructions   You do not have to record information in your account book or other record that duplicates information shown on a receipt as long as your records and receipts complement each other in an orderly manner. 2011 1040ez instructions   You do not have to record amounts your employer pays directly for any ticket or other travel item. 2011 1040ez instructions However, if you charge these items to your employer, through a credit card or otherwise, you must keep a record of the amounts you spend. 2011 1040ez instructions Timely-kept records. 2011 1040ez instructions   You should record the elements of an expense or of a business use at or near the time of the expense or use and support it with sufficient documentary evidence. 2011 1040ez instructions A timely-kept record has more value than a statement prepared later when generally there is a lack of accurate recall. 2011 1040ez instructions   You do not need to write down the elements of every expense on the day of the expense. 2011 1040ez instructions If you maintain a log on a weekly basis that accounts for use during the week, the log is considered a timely-kept record. 2011 1040ez instructions   If you give your employer, client, or customer an expense account statement, it can also be considered a timely-kept record. 2011 1040ez instructions This is true if you copy it from your account book, diary, log, statement of expense, trip sheets, or similar record. 2011 1040ez instructions Proving business purpose. 2011 1040ez instructions   You must generally provide a written statement of the business purpose of an expense. 2011 1040ez instructions However, the degree of proof varies according to the circumstances in each case. 2011 1040ez instructions If the business purpose of an expense is clear from the surrounding circumstances, then you do not need to give a written explanation. 2011 1040ez instructions Example. 2011 1040ez instructions If you are a sales representative who calls on customers on an established sales route, you do not have to give a written explanation of the business purpose for traveling that route. 2011 1040ez instructions You can satisfy the requirements by recording the length of the delivery route once, the date of each trip at or near the time of the trips, and the total miles you drove the car during the tax year. 2011 1040ez instructions You could also establish the date of each trip with a receipt, record of delivery, or other documentary evidence. 2011 1040ez instructions Confidential information. 2011 1040ez instructions   You do not need to put confidential information relating to an element of a deductible expense (such as the place, business purpose, or business relationship) in your account book, diary, or other record. 2011 1040ez instructions However, you do have to record the information elsewhere at or near the time of the expense and have it available to fully prove that element of the expense. 2011 1040ez instructions What If I Have Incomplete Records? If you do not have complete records to prove an element of an expense, then you must prove the element with: Your own written or oral statement containing specific information about the element, and Other supporting evidence that is sufficient to establish the element. 2011 1040ez instructions If the element is the description of a gift, or the cost, time, place, or date of an expense, the supporting evidence must be either direct evidence or documentary evidence. 2011 1040ez instructions Direct evidence can be written statements or the oral testimony of your guests or other witnesses setting forth detailed information about the element. 2011 1040ez instructions Documentary evidence can be receipts, paid bills, or similar evidence. 2011 1040ez instructions If the element is either the business relationship of your guests or the business purpose of the amount spent, the supporting evidence can be circumstantial rather than direct. 2011 1040ez instructions For example, the nature of your work, such as making deliveries, provides circumstantial evidence of the use of your car for business purposes. 2011 1040ez instructions Invoices of deliveries establish when you used the car for business. 2011 1040ez instructions Table 5-1. 2011 1040ez instructions How To Prove Certain Business Expenses IF you have expenses for . 2011 1040ez instructions . 2011 1040ez instructions THEN you must keep records that show details of the following elements . 2011 1040ez instructions . 2011 1040ez instructions . 2011 1040ez instructions   Amount Time Place or  Description Business Purpose Business Relationship Travel Cost of each separate expense for travel, lodging, and meals. 2011 1040ez instructions Incidental expenses may be totaled in reasonable categories such as taxis, fees and tips, etc. 2011 1040ez instructions Dates you left and returned for each trip and number of days spent on business. 2011 1040ez instructions Destination or area of your travel (name of city, town, or other designation). 2011 1040ez instructions Purpose: Business purpose for the expense or the business benefit gained or expected to be gained. 2011 1040ez instructions    Relationship: N/A Entertainment Cost of each separate expense. 2011 1040ez instructions Incidental expenses such as taxis, telephones, etc. 2011 1040ez instructions , may be totaled on a daily basis. 2011 1040ez instructions Date of entertainment. 2011 1040ez instructions (Also see Business Purpose. 2011 1040ez instructions ) Name and address or location of place of entertainment. 2011 1040ez instructions Type of entertainment if not otherwise apparent. 2011 1040ez instructions (Also see Business Purpose. 2011 1040ez instructions ) Purpose: Business purpose for the expense or the business benefit gained or expected to be gained. 2011 1040ez instructions  For entertainment, the nature of the business discussion or activity. 2011 1040ez instructions If the entertainment was directly before or after a business discussion: the date, place, nature, and duration of the business discussion, and the identities of the persons who took part in both the business discussion and the entertainment activity. 2011 1040ez instructions    Relationship: Occupations or other information (such as names, titles, or other designations) about the recipients that shows their business relationship to you. 2011 1040ez instructions  For entertainment, you must also prove that you or your employee was present if the entertainment was a business meal. 2011 1040ez instructions Gifts Cost of the gift. 2011 1040ez instructions Date of the gift. 2011 1040ez instructions Description of the gift. 2011 1040ez instructions   Transportation Cost of each separate expense. 2011 1040ez instructions For car expenses, the cost of the car and any improvements, the date you started using it for business, the mileage for each business use, and the total miles for the year. 2011 1040ez instructions Date of the expense. 2011 1040ez instructions For car expenses, the date of the use of the car. 2011 1040ez instructions Your business destination. 2011 1040ez instructions Purpose: Business purpose for the expense. 2011 1040ez instructions    Relationship: N/A Sampling. 2011 1040ez instructions   You can keep an adequate record for parts of a tax year and use that record to prove the amount of business or investment use for the entire year. 2011 1040ez instructions You must demonstrate by other evidence that the periods for which an adequate record is kept are representative of the use throughout the tax year. 2011 1040ez instructions Example. 2011 1040ez instructions You use your car to visit the offices of clients, meet with suppliers and other subcontractors, and pick up and deliver items to clients. 2011 1040ez instructions There is no other business use of the car, but you and your family use the car for personal purposes. 2011 1040ez instructions You keep adequate records during the first week of each month that show that 75% of the use of the car is for business. 2011 1040ez instructions Invoices and bills show that your business use continues at the same rate during the later weeks of each month. 2011 1040ez instructions Your weekly records are representative of the use of the car each month and are sufficient evidence to support the percentage of business use for the year. 2011 1040ez instructions Exceptional circumstances. 2011 1040ez instructions   You can satisfy the substantiation requirements with other evidence if, because of the nature of the situation in which an expense is made, you cannot get a receipt. 2011 1040ez instructions This applies if all the following are true. 2011 1040ez instructions You were unable to obtain evidence for an element of the expense or use that completely satisfies the requirements explained earlier under What Are Adequate Records . 2011 1040ez instructions You are unable to obtain evidence for an element that completely satisfies the two rules listed earlier under What If I Have Incomplete Records . 2011 1040ez instructions You have presented other evidence for the element that is the best proof possible under the circumstances. 2011 1040ez instructions Destroyed records. 2011 1040ez instructions   If you cannot produce a receipt because of reasons beyond your control, you can prove a deduction by reconstructing your records or expenses. 2011 1040ez instructions Reasons beyond your control include fire, flood, and other casualties. 2011 1040ez instructions    Table 5-2. 2011 1040ez instructions Daily Business Mileage and Expense Log Name:       Odometer Readings Expenses Date Destination  (City, Town, or Area) Business Purpose Start Stop Miles  this trip Type  (Gas, oil, tolls, etc. 2011 1040ez instructions ) Amount                                                                                                                   Weekly  Total             Total Year-to-Date             Separating and Combining Expenses This section explains when expenses must be kept separate and when expenses can be combined. 2011 1040ez instructions Separating expenses. 2011 1040ez instructions   Each separate payment is generally considered a separate expense. 2011 1040ez instructions For example, if you entertain a customer or client at dinner and then go to the theater, the dinner expense and the cost of the theater tickets are two separate expenses. 2011 1040ez instructions You must record them separately in your records. 2011 1040ez instructions Season or series tickets. 2011 1040ez instructions   If you buy season or series tickets for business use, you must treat each ticket in the series as a separate item. 2011 1040ez instructions To determine the cost of individual tickets, divide the total cost (but not more than face value) by the number of games or performances in the series. 2011 1040ez instructions You must keep records to show whether you use each ticket as a gift or entertainment. 2011 1040ez instructions Also, you must be able to prove the cost of nonluxury box seat tickets if you rent a skybox or other private luxury box for more than one event. 2011 1040ez instructions See Entertainment tickets in chapter 2. 2011 1040ez instructions Combining items. 2011 1040ez instructions   You can make one daily entry in your record for reasonable categories of expenses. 2011 1040ez instructions Examples are taxi fares, telephone calls, or other incidental travel costs. 2011 1040ez instructions Meals should be in a separate category. 2011 1040ez instructions You can include tips for meal-related services with the costs of the meals. 2011 1040ez instructions   Expenses of a similar nature occurring during the course of a single event are considered a single expense. 2011 1040ez instructions For example, if during entertainment at a cocktail lounge, you pay separately for each serving of refreshments, the total expense for the refreshments is treated as a single expense. 2011 1040ez instructions Car expenses. 2011 1040ez instructions   You can account for several uses of your car that can be considered part of a single use, such as a round trip or uninterrupted business use, with a single record. 2011 1040ez instructions Minimal personal use, such as a stop for lunch on the way between two business stops, is not an interruption of business use. 2011 1040ez instructions Example. 2011 1040ez instructions You make deliveries at several different locations on a route that begins and ends at your employer's business premises and that includes a stop at the business premises between two deliveries. 2011 1040ez instructions You can account for these using a single record of miles driven. 2011 1040ez instructions Gift expenses. 2011 1040ez instructions   You do not always have to record the name of each recipient of a gift. 2011 1040ez instructions A general listing will be enough if it is evident that you are not trying to avoid the $25 annual limit on the amount you can deduct for gifts to any one person. 2011 1040ez instructions For example, if you buy a large number of tickets to local high school basketball games and give one or two tickets to each of many customers, it is usually enough to record a general description of the recipients. 2011 1040ez instructions Allocating total cost. 2011 1040ez instructions   If you can prove the total cost of travel or entertainment but you cannot prove how much it cost for each person who participated in the event, you may have to allocate the total cost among you and your guests on a pro rata basis. 2011 1040ez instructions To do so, you must establish the number of persons who participated in the event. 2011 1040ez instructions   An allocation would be needed, for example, if you did not have a business relationship with all of your guests. 2011 1040ez instructions See Allocating between business and nonbusiness in chapter 2. 2011 1040ez instructions If your return is examined. 2011 1040ez instructions    If your return is examined, you may have to provide additional information to the IRS. 2011 1040ez instructions This information could be needed to clarify or to establish the accuracy or reliability of information contained in your records, statements, testimony, or documentary evidence before a deduction is allowed. 2011 1040ez instructions    THIS IS NOT AN OFFICIAL INTERNAL REVENUE FORM Table 5-3. 2011 1040ez instructions Weekly Traveling Expense and Entertainment Record From: To: Name: Expenses Sunday Monday Tuesday Wednesday Thursday Friday Saturday Total 1. 2011 1040ez instructions Travel Expenses: Airlines                                 Excess Baggage                                 Bus – Train                                 Cab and Limousine                                 Tips                                 Porter                                 2. 2011 1040ez instructions Meals and Lodging:  Breakfast                                 Lunch                                 Dinner                                 Hotel and Motel  (Detail in Schedule B)                                 3. 2011 1040ez instructions Entertainment  (Detail in Schedule C)                                 4. 2011 1040ez instructions Other Expenses:  Postage                                 Telephone & Telegraph                                 Stationery & Printing                                 Stenographer                                 Sample Room                                 Advertising                                 Assistant(s)                                 Trade Shows                                 5. 2011 1040ez instructions Car Expenses: (List all car expenses - the division between business and personal expenses may be made at the end of the year. 2011 1040ez instructions ) (Detail mileage in Schedule A. 2011 1040ez instructions ) Gas, oil, lube, wash                                 Repairs, parts                                 Tires, supplies                                 Parking fees, tolls                                 6. 2011 1040ez instructions Other (Identify)                                 Total                                 Note: Attach receipted bills for (1) ALL lodging and (2) any other expenses of $75. 2011 1040ez instructions 00 or more. 2011 1040ez instructions Schedule A – Car Mileage: End                 Start                 Total                 Business Mileage                 Schedule B – Lodging Hotel or Motel Name                 City                 Schedule C – Entertainment Date Item Place Amount Business Purpose Business Relationship                                             WEEKLY REIMBURSEMENTS:     Travel and transportation expenses     Other reimbursements     TOTAL   How Long To Keep Records and Receipts You must keep records as long as they may be needed for the administration of any provision of the Internal Revenue Code. 2011 1040ez instructions Generally, this means you must keep records that support your deduction (or an item of income) for 3 years from the date you file the income tax return on which the deduction is claimed. 2011 1040ez instructions A return filed early is considered filed on the due date. 2011 1040ez instructions For a more complete explanation of how long to keep records, see Publication 583, Starting a Business and Keeping Records. 2011 1040ez instructions You must keep records of the business use of your car for each year of the recovery period. 2011 1040ez instructions See More-than-50%-use test in chapter 4 under Depreciation Deduction. 2011 1040ez instructions Reimbursed for expenses. 2011 1040ez instructions   Employees who give their records and documentation to their employers and are reimbursed for their expenses generally do not have to keep copies of this information. 2011 1040ez instructions However, you may have to prove your expenses if any of the following conditions apply. 2011 1040ez instructions You claim deductions for expenses that are more than reimbursements. 2011 1040ez instructions Your expenses are reimbursed under a nonaccountable plan. 2011 1040ez instructions Your employer does not use adequate accounting procedures to verify expense accounts. 2011 1040ez instructions You are related to your employer as defined under Per Diem and Car Allowances , in chapter 6. 2011 1040ez instructions Reimbursements , adequate accounting , and nonaccountable plans are discussed in chapter 6. 2011 1040ez instructions Examples of Records Table 5-2 and Table 5-3 are examples of worksheets which can be used for tracking business expenses. 2011 1040ez instructions Prev  Up  Next   Home   More Online Publications
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The 2011 1040ez Instructions

2011 1040ez instructions 16. 2011 1040ez instructions   Reporting Gains and Losses Table of Contents What's New Introduction Useful Items - You may want to see: Reporting Capital Gains and Losses Exception 1. 2011 1040ez instructions Exception 2. 2011 1040ez instructions File Form 1099-B or Form 1099-S with the IRS. 2011 1040ez instructions Capital Losses Capital Gain Tax Rates What's New Maximum capital gain rates. 2011 1040ez instructions . 2011 1040ez instructions  For 2013, the maximum capital gain rates are 0%, 15%, 20%, 25%, and 28%. 2011 1040ez instructions Introduction This chapter discusses how to report capital gains and losses from sales, exchanges, and other dispositions of investment property on Form 8949 and Schedule D (Form 1040). 2011 1040ez instructions The discussion includes the following topics. 2011 1040ez instructions How to report short-term gains and losses. 2011 1040ez instructions How to report long-term gains and losses. 2011 1040ez instructions How to figure capital loss carryovers. 2011 1040ez instructions How to figure your tax on a net capital gain. 2011 1040ez instructions If you sell or otherwise dispose of property used in a trade or business or for the production of income, see Publication 544, Sales and Other Dispositions of Assets, before completing Schedule D (Form 1040). 2011 1040ez instructions Useful Items - You may want to see: Publication 537 Installment Sales 544 Sales and Other Dispositions of Assets 550 Investment Income and Expenses Form (and Instructions) 4797 Sales of Business Property 6252 Installment Sale Income 8582 Passive Activity Loss Limitations 8949 Sales and Other Dispositions of Capital Assets Schedule D (Form 1040) Capital Gains and Losses Reporting Capital Gains and Losses Generally, report capital gains and losses on Form 8949. 2011 1040ez instructions Complete Form 8949 before you complete line 1b, 2, 3, 8b, 9, or 10 of Schedule D (Form 1040). 2011 1040ez instructions Use Form 8949 to report: The sale or exchange of a capital asset not reported on another form or schedule; Gains from involuntary conversions (other than from casualty or theft) of capital assets not held for business or profit; and Nonbusiness bad debts. 2011 1040ez instructions Use Schedule D (Form 1040): To figure the overall gain or loss from transactions reported on Form 8949; To report a gain from Form 6252 or Part I of Form 4797; To report a gain or loss from Form 4684, 6781, or 8824; To report capital gain distributions not reported directly on Form 1040 or Form 1040A; To report a capital loss carryover from the previous tax year to the current tax year; To report your share of a gain or (loss) from a partnership, S corporation, estate, or trust; To report transactions reported to you on a Form 1099-B (or substitute statement) showing basis was reported to the IRS and to which none of the Form 8949 adjustments or codes apply; and To report undistributed long-term capital gains from Form 2439. 2011 1040ez instructions On Form 8949, enter all sales and exchanges of capital assets, including stocks, bonds, etc. 2011 1040ez instructions , and real estate (if not reported on Form 4684, 4797, 6252, 6781, 8824, or line 1a or 8a of Schedule D). 2011 1040ez instructions Include these transactions even if you did not receive a Form 1099-B or 1099-S (or substitute statement) for the transaction. 2011 1040ez instructions Report short-term gains or losses in Part I. 2011 1040ez instructions Report long-term gains or losses in Part II. 2011 1040ez instructions Use as many Forms 8949 as you need. 2011 1040ez instructions Exceptions to filing Form 8949 and Schedule D (Form 1040). 2011 1040ez instructions   There are certain situations where you may not have to file Form 8949 and/or Schedule D (Form 1040). 2011 1040ez instructions Exception 1. 2011 1040ez instructions   You do not have to file Form 8949 or Schedule D (Form 1040) if you have no capital losses and your only capital gains are capital gain distributions from Form(s) 1099-DIV, box 2a (or substitute statements). 2011 1040ez instructions (If any Form(s) 1099-DIV (or substitute statements) you receive have an amount in box 2b (unrecaptured section 1250 gain), box 2c (section 1202 gain), or box 2d (collectibles (28%) gain), you do not qualify for this exception. 2011 1040ez instructions ) If you qualify for this exception, report your capital gain distributions directly on line 13 of Form 1040 (and check the box on line 13). 2011 1040ez instructions Also use the Qualified Dividends and Capital Gain Tax Worksheet in the Form 1040 instructions to figure your tax. 2011 1040ez instructions You can report your capital gain distributions on line 10 of Form 1040A, instead of on Form 1040, if none of the Forms 1099-DIV (or substitute statements) you received have an amount in box 2b, 2c, or 2d, and you do not have to file Form 1040. 2011 1040ez instructions Exception 2. 2011 1040ez instructions   You must file Schedule D (Form 1040), but generally do not have to file Form 8949, if Exception 1 does not apply and your only capital gains and losses are: Capital gain distributions; A capital loss carryover; A gain from Form 2439 or 6252 or Part I of Form 4797; A gain or loss from Form 4684, 6781, or 8824; A gain or loss from a partnership, S corporation, estate, or trust; or Gains and losses from transactions for which you received a Form 1099-B (or substitute statement) that shows the basis was reported to the IRS and for which you do not need to make any adjustments in column (g) of Form 8949 or enter any codes in column (f) of Form 8949. 2011 1040ez instructions Installment sales. 2011 1040ez instructions   You cannot use the installment method to report a gain from the sale of stock or securities traded on an established securities market. 2011 1040ez instructions You must report the entire gain in the year of sale (the year in which the trade date occurs). 2011 1040ez instructions Passive activity gains and losses. 2011 1040ez instructions    If you have gains or losses from a passive activity, you may also have to report them on Form 8582. 2011 1040ez instructions In some cases, the loss may be limited under the passive activity rules. 2011 1040ez instructions Refer to Form 8582 and its instructions for more information about reporting capital gains and losses from a passive activity. 2011 1040ez instructions Form 1099-B transactions. 2011 1040ez instructions   If you sold property, such as stocks, bonds, or certain commodities, through a broker, you should receive Form 1099-B or substitute statement from the broker. 2011 1040ez instructions Use the Form 1099-B or the substitute statement to complete Form 8949. 2011 1040ez instructions If you sold a covered security in 2013, your broker should send you a Form 1099-B (or substitute statement) that shows your basis. 2011 1040ez instructions This will help you complete Form 8949. 2011 1040ez instructions Generally, a covered security is a security you acquired after 2010. 2011 1040ez instructions   Report the gross proceeds shown in box 2a of Form 1099-B as the sales price in column (d) of either Part I or Part II of Form 8949, whichever applies. 2011 1040ez instructions However, if the broker advises you, in box 2a of Form 1099-B, that gross proceeds (sales price) less commissions and option premiums were reported to the IRS, enter that net sales price in column (d) of either Part I or Part II of Form 8949, whichever applies. 2011 1040ez instructions    Include in column (g) any expense of sale, such as broker's fees, commissions, state and local transfer taxes, and option premiums, unless you reported the net sales price in column (d). 2011 1040ez instructions If you include an expense of sale in column (g), enter “E” in column (f). 2011 1040ez instructions Form 1099-CAP transactions. 2011 1040ez instructions   If a corporation in which you own stock has had a change in control or a substantial change in capital structure, you should receive Form 1099-CAP or a substitute statement from the corporation. 2011 1040ez instructions Use the Form 1099-CAP or substitute statement to fill in Form 8949. 2011 1040ez instructions If your computations show that you would have a loss because of the change, do not enter any amounts on Form 8949 or Schedule D (Form 1040). 2011 1040ez instructions You cannot claim a loss on Schedule D (Form 1040) as a result of this transaction. 2011 1040ez instructions   Report the aggregate amount received shown in box 2 of Form 1099-CAP as the sales price in column (d) of either Part I or Part II of Form 8949, whichever applies. 2011 1040ez instructions Form 1099-S transactions. 2011 1040ez instructions   If you sold or traded reportable real estate, you generally should receive from the real estate reporting person a Form 1099-S showing the gross proceeds. 2011 1040ez instructions    “Reportable real estate” is defined as any present or future ownership interest in any of the following: Improved or unimproved land, including air space; Inherently permanent structures, including any residential, commercial, or industrial building; A condominium unit and its accessory fixtures and common elements, including land; and Stock in a cooperative housing corporation (as defined in section 216 of the Internal Revenue Code). 2011 1040ez instructions   A “real estate reporting person” could include the buyer's attorney, your attorney, the title or escrow company, a mortgage lender, your broker, the buyer's broker, or the person acquiring the biggest interest in the property. 2011 1040ez instructions   Your Form 1099-S will show the gross proceeds from the sale or exchange in box 2. 2011 1040ez instructions See the Instructions for Form 8949 and the Instructions for Schedule D (Form 1040) for how to report these transactions and include them in Part I or Part II of Form 8949 as appropriate. 2011 1040ez instructions However, report like-kind exchanges on Form 8824 instead. 2011 1040ez instructions   It is unlawful for any real estate reporting person to separately charge you for complying with the requirement to file Form 1099-S. 2011 1040ez instructions Nominees. 2011 1040ez instructions   If you receive gross proceeds as a nominee (that is, the gross proceeds are in your name but actually belong to someone else), see the Instructions for Form 8949 for how to report these amounts on Form 8949. 2011 1040ez instructions File Form 1099-B or Form 1099-S with the IRS. 2011 1040ez instructions   If you received gross proceeds as a nominee in 2013, you must file a Form 1099-B or Form 1099-S for those proceeds with the IRS. 2011 1040ez instructions Send the Form 1099-B or Form 1099-S with a Form 1096, Annual Summary and Transmittal of U. 2011 1040ez instructions S. 2011 1040ez instructions Information Returns, to your Internal Revenue Service Center by February 28, 2014 (March 31, 2014, if you file Form 1099-B or Form 1099-S electronically). 2011 1040ez instructions Give the actual owner of the proceeds Copy B of the Form 1099-B or Form 1099-S by February 18, 2014. 2011 1040ez instructions On Form 1099-B, you should be listed as the “Payer. 2011 1040ez instructions ” The other owner should be listed as the “Recipient. 2011 1040ez instructions ” On Form 1099-S, you should be listed as the “Filer. 2011 1040ez instructions ” The other owner should be listed as the “Transferor. 2011 1040ez instructions ” You do not have to file a Form 1099-B or Form 1099-S to show proceeds for your spouse. 2011 1040ez instructions For more information about the reporting requirements and the penalties for failure to file (or furnish) certain information returns, see the General Instructions for Certain Information Returns. 2011 1040ez instructions If you are filing electronically see Publication 1220. 2011 1040ez instructions Sale of property bought at various times. 2011 1040ez instructions   If you sell a block of stock or other property that you bought at various times, report the short-term gain or loss from the sale on one row in Part I of Form 8949, and the long-term gain or loss on one row in Part II of Form 8949. 2011 1040ez instructions Write “Various” in column (b) for the “Date acquired. 2011 1040ez instructions ” Sale expenses. 2011 1040ez instructions    On Form 8949, include in column (g) any expense of sale, such as broker's fees, commissions, state and local transfer taxes, and option premiums, unless you reported the net sales price in column (d). 2011 1040ez instructions If you include an expense of sale in column (g), enter “E” in column (f). 2011 1040ez instructions   For more information about adjustments to basis, see chapter 13. 2011 1040ez instructions Short-term gains and losses. 2011 1040ez instructions   Capital gain or loss on the sale or trade of investment property held 1 year or less is a short-term capital gain or loss. 2011 1040ez instructions You report it in Part I of Form 8949. 2011 1040ez instructions   You combine your share of short-term capital gain or loss from partnerships, S corporations, estates, and trusts, and any short-term capital loss carryover, with your other short-term capital gains and losses to figure your net short-term capital gain or loss on line 7 of Schedule D (Form 1040). 2011 1040ez instructions Long-term gains and losses. 2011 1040ez instructions    A capital gain or loss on the sale or trade of investment property held more than 1 year is a long-term capital gain or loss. 2011 1040ez instructions You report it in Part II of Form 8949. 2011 1040ez instructions   You report the following in Part II of Schedule D (Form 1040): Undistributed long-term capital gains from a mutual fund (or other regulated investment company) or real estate investment trust (REIT); Your share of long-term capital gains or losses from partnerships, S corporations, estates, and trusts; All capital gain distributions from mutual funds and REITs not reported directly on line 10 of Form 1040A or line 13 of Form 1040; and Long-term capital loss carryovers. 2011 1040ez instructions    The result after combining these items with your other long-term capital gains and losses is your net long-term capital gain or loss (Schedule D (Form 1040), line 15). 2011 1040ez instructions Total net gain or loss. 2011 1040ez instructions   To figure your total net gain or loss, combine your net short-term capital gain or loss (Schedule D (Form 1040), line 7) with your net long-term capital gain or loss (Schedule D (Form 1040), line 15). 2011 1040ez instructions Enter the result on Schedule D (Form 1040), Part III, line 16. 2011 1040ez instructions If your losses are more than your gains, see Capital Losses , next. 2011 1040ez instructions If both lines 15 and 16 of your Schedule D (Form 1040) are gains and your taxable income on your Form 1040 is more than zero, see Capital Gain Tax Rates , later. 2011 1040ez instructions Capital Losses If your capital losses are more than your capital gains, you can claim a capital loss deduction. 2011 1040ez instructions Report the amount of the deduction on line 13 of Form 1040, in parentheses. 2011 1040ez instructions Limit on deduction. 2011 1040ez instructions   Your allowable capital loss deduction, figured on Schedule D (Form 1040), is the lesser of: $3,000 ($1,500 if you are married and file a separate return); or Your total net loss as shown on line 16 of Schedule D (Form 1040). 2011 1040ez instructions   You can use your total net loss to reduce your income dollar for dollar, up to the $3,000 limit. 2011 1040ez instructions Capital loss carryover. 2011 1040ez instructions   If you have a total net loss on line 16 of Schedule D (Form 1040) that is more than the yearly limit on capital loss deductions, you can carry over the unused part to the next year and treat it as if you had incurred it in that next year. 2011 1040ez instructions If part of the loss is still unused, you can carry it over to later years until it is completely used up. 2011 1040ez instructions   When you figure the amount of any capital loss carryover to the next year, you must take the current year's allowable deduction into account, whether or not you claimed it and whether or not you filed a return for the current year. 2011 1040ez instructions   When you carry over a loss, it remains long term or short term. 2011 1040ez instructions A long-term capital loss you carry over to the next tax year will reduce that year's long-term capital gains before it reduces that year's short-term capital gains. 2011 1040ez instructions Figuring your carryover. 2011 1040ez instructions   The amount of your capital loss carryover is the amount of your total net loss that is more than the lesser of: Your allowable capital loss deduction for the year; or Your taxable income increased by your allowable capital loss deduction for the year and your deduction for personal exemptions. 2011 1040ez instructions   If your deductions are more than your gross income for the tax year, use your negative taxable income in computing the amount in item (2). 2011 1040ez instructions    Complete the Capital Loss Carryover Worksheet in the Instructions for Schedule D or Publication 550 to determine the part of your capital loss that you can carry over. 2011 1040ez instructions Example. 2011 1040ez instructions Bob and Gloria sold securities in 2013. 2011 1040ez instructions The sales resulted in a capital loss of $7,000. 2011 1040ez instructions They had no other capital transactions. 2011 1040ez instructions Their taxable income was $26,000. 2011 1040ez instructions On their joint 2013 return, they can deduct $3,000. 2011 1040ez instructions The unused part of the loss, $4,000 ($7,000 − $3,000), can be carried over to 2014. 2011 1040ez instructions If their capital loss had been $2,000, their capital loss deduction would have been $2,000. 2011 1040ez instructions They would have no carryover. 2011 1040ez instructions Use short-term losses first. 2011 1040ez instructions   When you figure your capital loss carryover, use your short-term capital losses first, even if you incurred them after a long-term capital loss. 2011 1040ez instructions If you have not reached the limit on the capital loss deduction after using the short-term capital losses, use the long-term capital losses until you reach the limit. 2011 1040ez instructions Decedent's capital loss. 2011 1040ez instructions    A capital loss sustained by a decedent during his or her last tax year (or carried over to that year from an earlier year) can be deducted only on the final income tax return filed for the decedent. 2011 1040ez instructions The capital loss limits discussed earlier still apply in this situation. 2011 1040ez instructions The decedent's estate cannot deduct any of the loss or carry it over to following years. 2011 1040ez instructions Joint and separate returns. 2011 1040ez instructions   If you and your spouse once filed separate returns and are now filing a joint return, combine your separate capital loss carryovers. 2011 1040ez instructions However, if you and your spouse once filed a joint return and are now filing separate returns, any capital loss carryover from the joint return can be deducted only on the return of the spouse who actually had the loss. 2011 1040ez instructions Capital Gain Tax Rates The tax rates that apply to a net capital gain are generally lower than the tax rates that apply to other income. 2011 1040ez instructions These lower rates are called the maximum capital gain rates. 2011 1040ez instructions The term “net capital gain” means the amount by which your net long-term capital gain for the year is more than your net short-term capital loss. 2011 1040ez instructions For 2013, the maximum capital gain rates are 0%, 15%, 20%, 25%, and 28%. 2011 1040ez instructions See Table 16-1 for details. 2011 1040ez instructions If you figure your tax using the maximum capital gain rate and the regular tax computation results in a lower tax, the regular tax computation applies. 2011 1040ez instructions Example. 2011 1040ez instructions All of your net capital gain is from selling collectibles, so the capital gain rate would be 28%. 2011 1040ez instructions If you are otherwise subject to a rate lower than 28%, the 28% rate does not apply. 2011 1040ez instructions Investment interest deducted. 2011 1040ez instructions   If you claim a deduction for investment interest, you may have to reduce the amount of your net capital gain that is eligible for the capital gain tax rates. 2011 1040ez instructions Reduce it by the amount of the net capital gain you choose to include in investment income when figuring the limit on your investment interest deduction. 2011 1040ez instructions This is done on the Schedule D Tax Worksheet or the Qualified Dividends and Capital Gain Tax Worksheet. 2011 1040ez instructions For more information about the limit on investment interest, see Interest Expenses in chapter 3 of Publication 550. 2011 1040ez instructions Table 16-1. 2011 1040ez instructions What Is Your Maximum Capital Gain Rate? IF your net capital gain is from . 2011 1040ez instructions . 2011 1040ez instructions . 2011 1040ez instructions THEN your  maximum capital gain rate is . 2011 1040ez instructions . 2011 1040ez instructions . 2011 1040ez instructions a collectibles gain 28% an eligible gain on qualified small business stock minus the section 1202 exclusion 28% an unrecaptured section 1250 gain 25% other gain1 and the regular tax rate that would apply is 39. 2011 1040ez instructions 6% 20% other gain1 and the regular tax rate that would apply is 25%, 28%, 33%, or 35% 15% other gain1 and the regular tax rate that would apply is 10% or 15% 0% 1 Other gain means any gain that is not collectibles gain, gain on qualified small business stock, or unrecaptured section 1250 gain. 2011 1040ez instructions     Collectibles gain or loss. 2011 1040ez instructions   This is gain or loss from the sale or trade of a work of art, rug, antique, metal (such as gold, silver, and platinum bullion), gem, stamp, coin, or alcoholic beverage held more than 1 year. 2011 1040ez instructions   Collectibles gain includes gain from sale of an interest in a partnership, S corporation, or trust due to unrealized appreciation of collectibles. 2011 1040ez instructions Gain on qualified small business stock. 2011 1040ez instructions    If you realized a gain from qualified small business stock that you held more than 5 years, you generally can exclude some or all of your gain under section 1202. 2011 1040ez instructions The eligible gain minus your section 1202 exclusion is a 28% rate gain. 2011 1040ez instructions See Gains on Qualified Small Business Stock in chapter 4 of Publication 550. 2011 1040ez instructions Unrecaptured section 1250 gain. 2011 1040ez instructions    Generally, this is any part of your capital gain from selling section 1250 property (real property) that is due to depreciation (but not more than your net section 1231 gain), reduced by any net loss in the 28% group. 2011 1040ez instructions Use the Unrecaptured Section 1250 Gain Worksheet in the Schedule D (Form 1040) instructions to figure your unrecaptured section 1250 gain. 2011 1040ez instructions For more information about section 1250 property and section 1231 gain, see chapter 3 of Publication 544. 2011 1040ez instructions Tax computation using maximum capital gain rates. 2011 1040ez instructions   Use the Qualified Dividends and Capital Gain Tax Worksheet or the Schedule D Tax Worksheet (whichever applies) to figure your tax if you have qualified dividends or net capital gain. 2011 1040ez instructions You have net capital gain if Schedule D (Form 1040), lines 15 and 16, are both gains. 2011 1040ez instructions Schedule D Tax Worksheet. 2011 1040ez instructions   Use the Schedule D Tax Worksheet in the Schedule D (Form 1040) instructions to figure your tax if: You have to file Schedule D (Form 1040); and Schedule D (Form 1040), line 18 (28% rate gain) or line 19 (unrecaptured section 1250 gain), is more than zero. 2011 1040ez instructions Qualified Dividends and Capital Gain Tax Worksheet. 2011 1040ez instructions   If you do not have to use the Schedule D Tax Worksheet (as explained above) and any of the following apply, use the Qualified Dividends and Capital Gain Tax Worksheet in the instructions for Form 1040 or Form 1040A (whichever you file) to figure your tax. 2011 1040ez instructions You received qualified dividends. 2011 1040ez instructions (See Qualified Dividends in chapter 8. 2011 1040ez instructions ) You do not have to file Schedule D (Form 1040) and you received capital gain distributions. 2011 1040ez instructions (See Exceptions to filing Form 8949 and Schedule D (Form 1040) , earlier. 2011 1040ez instructions ) Schedule D (Form 1040), lines 15 and 16, are both more than zero. 2011 1040ez instructions Alternative minimum tax. 2011 1040ez instructions   These capital gain rates are also used in figuring alternative minimum tax. 2011 1040ez instructions Prev  Up  Next   Home   More Online Publications