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2011 Federal Tax Forms 1040

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2011 Federal Tax Forms 1040

2011 federal tax forms 1040 3. 2011 federal tax forms 1040   Self-Employment Tax Table of Contents Topics - This chapter discusses: Useful Items - You may want to see: Who Must Pay Self-Employment Tax?Employed by a U. 2011 federal tax forms 1040 S. 2011 federal tax forms 1040 Church Effect of Exclusion Members of the Clergy Income From U. 2011 federal tax forms 1040 S. 2011 federal tax forms 1040 Possessions Exemption From Social Security and Medicare Taxes Topics - This chapter discusses: Who must pay self-employment tax, and Who is exempt from self-employment tax. 2011 federal tax forms 1040 Useful Items - You may want to see: Publication 334 Tax Guide for Small Business 517 Social Security and Other Information for Members of the Clergy and Religious Workers Form (and Instructions) Form 1040-PR Planilla para la Declaración de la Contribución Federal sobre el Trabajo por Cuenta Propia Form 1040-SS U. 2011 federal tax forms 1040 S. 2011 federal tax forms 1040 Self-Employment Tax Return Form 4361 Application for Exemption From Self-Employment Tax for Use by Ministers, Members of Religious Orders and Christian Science Practitioners Schedule SE (Form 1040) Self-Employment Tax See chapter 7 for information about getting these publications and forms. 2011 federal tax forms 1040 Who Must Pay Self-Employment Tax? If you are a self-employed U. 2011 federal tax forms 1040 S. 2011 federal tax forms 1040 citizen or resident, the rules for paying self-employment tax are generally the same whether you are living in the United States or abroad. 2011 federal tax forms 1040 The self-employment tax is a social security and Medicare tax on net earnings from self- employment. 2011 federal tax forms 1040 You must pay self-employment tax if your net earnings from self-employment are at least $400. 2011 federal tax forms 1040 For 2013, the maximum amount of net earnings from self-employment that is subject to the social security portion of the tax is $113,700. 2011 federal tax forms 1040 All net earnings are subject to the Medicare portion of the tax. 2011 federal tax forms 1040 Employed by a U. 2011 federal tax forms 1040 S. 2011 federal tax forms 1040 Church If you were employed by a U. 2011 federal tax forms 1040 S. 2011 federal tax forms 1040 church or a qualified church-controlled organization that chose exemption from social security and Medicare taxes and you received wages of $108. 2011 federal tax forms 1040 28 or more from the organization, the amounts paid to you are subject to self-employment tax. 2011 federal tax forms 1040 However, you can choose to be exempt from social security and Medicare taxes if you are a member of a recognized religious sect. 2011 federal tax forms 1040 See Publication 517 for more information about church employees and self-employment tax. 2011 federal tax forms 1040 Effect of Exclusion You must take all of your self-employment income into account in figuring your net earnings from self-employment, even income that is exempt from income tax because of the foreign earned income exclusion. 2011 federal tax forms 1040 Example. 2011 federal tax forms 1040 You are in business abroad as a consultant and qualify for the foreign earned income exclusion. 2011 federal tax forms 1040 Your foreign earned income is $95,000, your business deductions total $27,000, and your net profit is $68,000. 2011 federal tax forms 1040 You must pay self-employment tax on all of your net profit, including the amount you can exclude from income. 2011 federal tax forms 1040 Members of the Clergy If you are a member of the clergy, you are treated as self-employed for self-employment tax purposes. 2011 federal tax forms 1040 Your U. 2011 federal tax forms 1040 S. 2011 federal tax forms 1040 self-employment tax is based upon net earnings from self-employment figured without regard to the foreign earned income exclusion or the foreign housing exclusion. 2011 federal tax forms 1040 You can receive exemption from coverage for your ministerial duties if you conscientiously oppose public insurance due to religious reasons or if you oppose it due to the religious principles of your denomination. 2011 federal tax forms 1040 You must file Form 4361 to apply for this exemption. 2011 federal tax forms 1040 This subject is discussed in further detail in Publication 517. 2011 federal tax forms 1040 Income From U. 2011 federal tax forms 1040 S. 2011 federal tax forms 1040 Possessions If you are a U. 2011 federal tax forms 1040 S. 2011 federal tax forms 1040 citizen or resident alien and you own and operate a business in Puerto Rico, Guam, the Commonwealth of the Northern Mariana Islands, American Samoa, or the U. 2011 federal tax forms 1040 S. 2011 federal tax forms 1040 Virgin Islands, you must pay tax on your net earnings from self-employment (if they are $400 or more) from those sources. 2011 federal tax forms 1040 You must pay the self-employment tax whether or not the income is exempt from U. 2011 federal tax forms 1040 S. 2011 federal tax forms 1040 income taxes (or whether or not you otherwise must file a U. 2011 federal tax forms 1040 S. 2011 federal tax forms 1040 income tax return). 2011 federal tax forms 1040 Unless your situation is described below, attach Schedule SE (Form 1040) to your U. 2011 federal tax forms 1040 S. 2011 federal tax forms 1040 income tax return. 2011 federal tax forms 1040 If you do not have to file Form 1040 with the United States and you are a resident of any of the U. 2011 federal tax forms 1040 S. 2011 federal tax forms 1040 possessions listed in the preceding paragraph, figure your self-employment tax on Form 1040-SS. 2011 federal tax forms 1040 Residents of Puerto Rico may file the Spanish-language Formulario 1040-PR. 2011 federal tax forms 1040 If you are not enclosing a check or money order, file your return with the: Department of the Treasury Internal Revenue Service Center Austin, TX 73301-0215 If you are enclosing a check or money order, file your return with the: Department of the Treasury P. 2011 federal tax forms 1040 O. 2011 federal tax forms 1040 Box 1303 Charlotte, NC 28201-1303 Exemption From Social Security and Medicare Taxes The United States may reach agreements with foreign countries to eliminate dual coverage and dual contributions (taxes) to social security systems for the same work. 2011 federal tax forms 1040 See Bilateral Social Security (Totalization) Agreements in chapter 2 under Social Security and Medicare Taxes. 2011 federal tax forms 1040 As a general rule, self-employed persons who are subject to dual taxation will only be covered by the social security system of the country where they reside. 2011 federal tax forms 1040 For more information on how any specific agreement affects self-employed persons, contact the United States Social Security Administration, as discussed under Bilateral Social Security (Totalization) Agreements in chapter 2. 2011 federal tax forms 1040 If your self-employment earnings should be exempt from foreign social security tax and subject only to U. 2011 federal tax forms 1040 S. 2011 federal tax forms 1040 self-employment tax, you should request a certificate of coverage from the U. 2011 federal tax forms 1040 S. 2011 federal tax forms 1040 Social Security Administration, Office of International Programs. 2011 federal tax forms 1040 The certificate will establish your exemption from the foreign social security tax. 2011 federal tax forms 1040 Send the request to the: Social Security Administration Office of International Programs P. 2011 federal tax forms 1040 O. 2011 federal tax forms 1040 Box 17741 Baltimore, MD 21235-7741 Prev  Up  Next   Home   More Online Publications
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The 2011 Federal Tax Forms 1040

2011 federal tax forms 1040 3. 2011 federal tax forms 1040   Claiming the Special Depreciation Allowance Table of Contents Introduction What Is Qualified Property?Qualified Reuse and Recycling Property Qualified Cellulosic Biofuel Plant Property Qualified Disaster Assistance Property Certain Qualified Property Acquired After December 31, 2007 Election to Accelerate Certain Credits in Lieu of the Special Depreciation Allowance How Much Can You Deduct? How Can You Elect Not To Claim an Allowance? When Must You Recapture an Allowance? Introduction You can take a special depreciation allowance to recover part of the cost of qualified property (defined next), placed in service during the tax year. 2011 federal tax forms 1040 The allowance applies only for the first year you place the property in service. 2011 federal tax forms 1040 For qualified property placed in service in 2013, you can take an additional 50% special allowance. 2011 federal tax forms 1040 The allowance is an additional deduction you can take after any section 179 deduction and before you figure regular depreciation under MACRS for the year you place the property in service. 2011 federal tax forms 1040 This chapter explains what is qualified property. 2011 federal tax forms 1040 It also includes rules regarding how to figure an allowance, how to elect not to claim an allowance, and when you must recapture an allowance. 2011 federal tax forms 1040 Corporations can elect to accelerate certain minimum tax credits in lieu of claiming the special depreciation allowance for eligible qualified property. 2011 federal tax forms 1040 See Election to Accelerate Certain Credits in Lieu of the Special Depreciation Allowance , later. 2011 federal tax forms 1040 See chapter 6 for information about getting publications and forms. 2011 federal tax forms 1040 What Is Qualified Property? Your property is qualified property if it is one of the following. 2011 federal tax forms 1040 Qualified reuse and recycling property. 2011 federal tax forms 1040 Qualified cellulosic biofuel plant property. 2011 federal tax forms 1040 Qualified disaster assistance property. 2011 federal tax forms 1040 Certain qualified property acquired after December 31, 2007. 2011 federal tax forms 1040 The following discussions provide information about the types of qualified property listed above for which you can take the special depreciation allowance. 2011 federal tax forms 1040 Qualified Reuse and Recycling Property You can take a 50% special depreciation allowance for qualified reuse and recycling property. 2011 federal tax forms 1040 Qualified reuse and recycling property is any machinery or equipment (not including buildings or real estate), along with any appurtenance, that is used exclusively to collect, distribute, or recycle qualified reuse and recyclable materials (as defined in section 168(m)(3)(B) of the Internal Revenue Code). 2011 federal tax forms 1040 Qualified reuse and recycling property also includes software necessary to operate such equipment. 2011 federal tax forms 1040 The property must meet the following requirements. 2011 federal tax forms 1040 The property must be depreciated under MACRS. 2011 federal tax forms 1040 The property must have a useful life of at least 5 years. 2011 federal tax forms 1040 The original use of the property must begin with you after August 31, 2008. 2011 federal tax forms 1040 You must have acquired the property by purchase (as discussed under Property Acquired by Purchase in chapter 2 ) after August 31, 2008, with no binding written contract for the acquisition in effect before September 1, 2008. 2011 federal tax forms 1040 The property must be placed in service for use in your trade or business after August 31, 2008. 2011 federal tax forms 1040 Excepted Property Qualified reuse and recycling property does not include any of the following. 2011 federal tax forms 1040 Any rolling stock or other equipment used to transport reuse or recyclable materials. 2011 federal tax forms 1040 Property required to be depreciated using the Alternative Depreciation System (ADS). 2011 federal tax forms 1040 For other property required to be depreciated using ADS, see Required use of ADS under Which Depreciation System (GDS or ADS) Applies , in chapter 4 . 2011 federal tax forms 1040 Other bonus depreciation property to which section 168(k) of the Internal Revenue Code applies. 2011 federal tax forms 1040 Property for which you elected not to claim any special depreciation allowance (discussed later). 2011 federal tax forms 1040 Property placed in service and disposed of in the same tax year. 2011 federal tax forms 1040 Property converted from business use to personal use in the same tax year acquired. 2011 federal tax forms 1040 Property converted from personal use to business use in the same or later tax year may be qualified reuse and recycling property. 2011 federal tax forms 1040 Qualified Cellulosic Biofuel Plant Property You can take a 50% special depreciation allowance for qualified cellulosic biofuel plant property. 2011 federal tax forms 1040 Cellulosic biofuel is any liquid fuel which is produced from any lignocellulosic or hemicellulosic matter that is available on a renewable or recurring basis. 2011 federal tax forms 1040 Examples include bagasse (from sugar cane), corn stalks, and switchgrass. 2011 federal tax forms 1040 The property must meet the following requirements. 2011 federal tax forms 1040 The property is used in the United States solely to produce cellulosic biofuel. 2011 federal tax forms 1040 The original use of the property must begin with you after December 20, 2006. 2011 federal tax forms 1040 You must have acquired the property by purchase (as discussed under Property Acquired by Purchase in chapter 2 ) after December 20, 2006, with no binding written contract for acquisition in effect before December 21, 2006. 2011 federal tax forms 1040 The property must be placed in service for use in your trade or business or for the production of income after October 3, 2008, and before January 3, 2013. 2011 federal tax forms 1040 Note. 2011 federal tax forms 1040 For property placed in service after January 2, 2013, and before January 1, 2014, you can take a 50% special depreciation allowance for qualified second generation biofuel plant property that is used solely in the United States to produce second generation biofuel (as defined in section 40(b)(6)(E)). 2011 federal tax forms 1040 The other requirements for qualified second generation biofuel plant property to be eligible for the special depreciation allowance are identical to the requirements discussed for Qualified Cellulosic Biofuel Plant Property above. 2011 federal tax forms 1040 Special Rules Sale-leaseback. 2011 federal tax forms 1040   If you sold qualified cellulosic biofuel plant property you placed in service after October 3, 2008, and leased it back within 3 months after you originally placed it in service, the property is treated as originally placed in service no earlier than the date it is used by you under the leaseback. 2011 federal tax forms 1040   The property will not qualify for the special allowance if the lessee or a related person to the lessee or lessor had a written binding contract in effect for the acquisition of the property before December 21, 2006. 2011 federal tax forms 1040 Syndicated leasing transactions. 2011 federal tax forms 1040   If qualified cellulosic biofuel plant property is originally placed in service by a lessor after October 3, 2008, the property is sold within 3 months of the date it was placed in service, and the user of the property does not change, then the property is treated as originally placed in service by the taxpayer no earlier than the date of the last sale. 2011 federal tax forms 1040   Multiple units of property subject to the same lease will be treated as originally placed in service no earlier than the date of sale if the property is sold within 3 months after the final unit is placed in service and the period between the times the first and last units are placed in service does not exceed 12 months. 2011 federal tax forms 1040 Excepted Property Qualified cellulosic biofuel plant property does not include any of the following. 2011 federal tax forms 1040 Property placed in service and disposed of in the same tax year. 2011 federal tax forms 1040 Property converted from business use to personal use in the same tax year it is acquired. 2011 federal tax forms 1040 Property converted from personal use to business use in the same or later tax year may be qualified cellulosic biomass ethanol plant property. 2011 federal tax forms 1040 Property required to be depreciated using the Alternative Depreciation System (ADS). 2011 federal tax forms 1040 For other property required to be depreciated using ADS, see Required use of ADS under Which Depreciation System (GDS or ADS) Applies , in chapter 4 . 2011 federal tax forms 1040 Property any portion of which is financed with the proceeds of any obligation the interest on which is exempt from tax under section 103 of the Internal Revenue Code. 2011 federal tax forms 1040 Property for which you elected not to claim any special depreciation allowance (discussed later). 2011 federal tax forms 1040 Property for which a deduction was taken under section 179C for certain qualified refinery property. 2011 federal tax forms 1040 Other bonus depreciation property to which section 168(k) of the Internal Revenue Code applies. 2011 federal tax forms 1040 Qualified Disaster Assistance Property You can take a 50% special depreciation allowance for qualified disaster assistance property placed in service in federally declared disaster areas in which the disaster occurred in 2009. 2011 federal tax forms 1040 A list of the federally declared disaster areas is available at the FEMA website at www. 2011 federal tax forms 1040 fema. 2011 federal tax forms 1040 gov. 2011 federal tax forms 1040 Your property is qualified disaster assistance property if it meets the following requirements. 2011 federal tax forms 1040 The property is nonresidential real property or residential real property placed in service before January 1, 2014, in a federally declared disaster area in which the disaster occurred in 2009. 2011 federal tax forms 1040 You must have acquired the property by purchase (as discussed under Property Acquired by Purchase in chapter 2 ) on or after the applicable disaster date, with no binding written contract for the acquisition in effect before the applicable disaster date. 2011 federal tax forms 1040 The property must rehabilitate property damaged, or replace property destroyed or condemned, as a result of the applicable federally declared disaster. 2011 federal tax forms 1040 The property must be similar in nature to, and located in the same county as, the rehabilitated or replaced property. 2011 federal tax forms 1040 The original use of the property within the applicable disaster area must have begun with you on or after the applicable disaster date. 2011 federal tax forms 1040 The property is placed in service by you on or before the date which is the last day of the fourth calendar year. 2011 federal tax forms 1040 Substantially all (80% or more) of the use of the property must be in the active conduct of your trade or business in a federally declared disaster area, occurring in 2009. 2011 federal tax forms 1040 It is not excepted property (explained later in Excepted Property ). 2011 federal tax forms 1040 Special Rules Sale-leaseback. 2011 federal tax forms 1040   If you sold qualified disaster assistance property you placed in service after the applicable disaster date and leased it back within 3 months after you originally placed it in service, the property is treated as originally placed in service no earlier than the date it is used by you under the leaseback. 2011 federal tax forms 1040   The property will not qualify for the special allowance if the lessee or a related person to the lessee or lessor had a written binding contract in effect for the acquisition of the property before the applicable disaster date. 2011 federal tax forms 1040 Syndicated leasing transactions. 2011 federal tax forms 1040   If qualified disaster assistance property is originally placed in service by a lessor after the applicable disaster date, the property is sold within 3 months of the date it was placed in service, and the user of the property does not change, then the property is treated as originally placed in service by the taxpayer no earlier than the date of the last sale. 2011 federal tax forms 1040   Multiple units of property subject to the same lease will be treated as originally placed in service no earlier than the date of sale if the property is sold within 3 months after the final unit is placed in service and the period between the times the first and last units are placed in service does not exceed 12 months. 2011 federal tax forms 1040 Excepted Property Qualified disaster assistance property does not include any of the following. 2011 federal tax forms 1040 Property required to be depreciated using the Alternative Depreciation System (ADS). 2011 federal tax forms 1040 For other property required to be depreciated using ADS, see Required use of ADS under Which Depreciation System (GDS or ADS) Applies , in chapter 4 . 2011 federal tax forms 1040 Property any portion of which is financed with the proceeds of a tax-exempt obligation under section 103 of the Internal Revenue Code. 2011 federal tax forms 1040 Any qualified revitalization building (defined later) placed in service before January 1, 2010, for which you have elected to claim a commercial revitalization deduction for qualified revitalization expenditures. 2011 federal tax forms 1040 Any property used in connection with any private or commercial golf course, country club, massage parlor, hot tub facility, suntan facility, or any store, the principal business of which is the sale of alcoholic beverages for consumption off premises. 2011 federal tax forms 1040 Any property for which the special allowance under section 168(k) or section 1400N(d) of the Internal Revenue Code applies. 2011 federal tax forms 1040 Property for which you elected not to claim any special depreciation allowance (discussed later). 2011 federal tax forms 1040 Property placed in service and disposed of in the same tax year. 2011 federal tax forms 1040 Property converted from business use to personal use in the same tax year acquired. 2011 federal tax forms 1040 Property converted from personal use to business use in the same or later tax year may be qualified disaster assistance property. 2011 federal tax forms 1040 Any gambling or animal racing property (defined later). 2011 federal tax forms 1040 Qualified revitalization building. 2011 federal tax forms 1040   This is a commercial building and its structural components that you placed in service in a renewal community before January 1, 2010. 2011 federal tax forms 1040 If the building is new, the original use of the building must begin with you. 2011 federal tax forms 1040 If the building is not new, you must substantially rehabilitate the building and then place it in service. 2011 federal tax forms 1040 For more information, including definitions of substantially rehabilitated building and qualified revitalization expenditure, see section 1400I(b) of the Internal Revenue Code. 2011 federal tax forms 1040 Gambling or animal racing property. 2011 federal tax forms 1040   Gambling or animal racing property includes the following personal and real property. 2011 federal tax forms 1040 Any equipment, furniture, software, or other property used directly in connection with gambling, the racing of animals, or the on-site viewing of such racing. 2011 federal tax forms 1040 Any real property determined by square footage (other than any portion that is less than 100 square feet) that is dedicated to gambling, the racing of animals, or the on-site viewing of such racing. 2011 federal tax forms 1040 Certain Qualified Property Acquired After December 31, 2007 You can take a 50% special depreciation deduction allowance for certain qualified property acquired after December 31, 2007. 2011 federal tax forms 1040 Your property is qualified property if it meets the following requirements. 2011 federal tax forms 1040 It is one of the following types of property. 2011 federal tax forms 1040 Tangible property depreciated under MACRS with a recovery period of 20 years or less. 2011 federal tax forms 1040 Water utility property. 2011 federal tax forms 1040 Computer software that is readily available for purchase by the general public, is subject to a nonexclusive license, and has not been substantially modified. 2011 federal tax forms 1040 (The cost of some computer software is treated as part of the cost of hardware and is depreciated under MACRS. 2011 federal tax forms 1040 ) Qualified leasehold improvement property (defined under Qualified leasehold improvement property later). 2011 federal tax forms 1040 You must have acquired the property after December 31, 2007, with no binding written contract for the acquisition in effect before January 1, 2008. 2011 federal tax forms 1040 The property must be placed in service for use in your trade or business or for the production of income before January 1, 2014 (before January 1, 2015, for certain property with a long production period and certain aircraft (defined next)). 2011 federal tax forms 1040 The original use of the property must begin with you after December 31, 2007. 2011 federal tax forms 1040 It is not excepted property (explained later in Excepted property). 2011 federal tax forms 1040 Qualified leasehold improvement property. 2011 federal tax forms 1040    Generally, this is any improvement to an interior part of a building that is nonresidential real property, if all the following requirements are met. 2011 federal tax forms 1040 The improvement is made under or according to a lease by the lessee (or any sublessee) or the lessor of that part of the building. 2011 federal tax forms 1040 That part of the building is to be occupied exclusively by the lessee (or any sublessee) of that part. 2011 federal tax forms 1040 The improvement is placed in service more than 3 years after the date the building was first placed in service by any person. 2011 federal tax forms 1040 The improvement is section 1250 property. 2011 federal tax forms 1040 See chapter 3 in Publication 544, Sales and Other Dispositions of Assets, for the definition of section 1250 property. 2011 federal tax forms 1040   However, a qualified leasehold improvement does not include any improvement for which the expenditure is attributable to any of the following. 2011 federal tax forms 1040 The enlargement of the building. 2011 federal tax forms 1040 Any elevator or escalator. 2011 federal tax forms 1040 Any structural component benefiting a common area. 2011 federal tax forms 1040 The internal structural framework of the building. 2011 federal tax forms 1040   Generally, a binding commitment to enter into a lease is treated as a lease and the parties to the commitment are treated as the lessor and lessee. 2011 federal tax forms 1040 However, a lease between related persons is not treated as a lease. 2011 federal tax forms 1040 Related persons. 2011 federal tax forms 1040   For this purpose, the following are related persons. 2011 federal tax forms 1040 Members of an affiliated group. 2011 federal tax forms 1040 An individual and a member of his or her family, including only a spouse, child, parent, brother, sister, half-brother, half-sister, ancestor, and lineal descendant. 2011 federal tax forms 1040 A corporation and an individual who directly or indirectly owns 80% or more of the value of the outstanding stock of that corporation. 2011 federal tax forms 1040 Two corporations that are members of the same controlled group. 2011 federal tax forms 1040 A trust fiduciary and a corporation if 80% or more of the value of the outstanding stock is directly or indirectly owned by or for the trust or grantor of the trust. 2011 federal tax forms 1040 The grantor and fiduciary, and the fiduciary and beneficiary, of any trust. 2011 federal tax forms 1040 The fiduciaries of two different trusts, and the fiduciaries and beneficiaries of two different trusts, if the same person is the grantor of both trusts. 2011 federal tax forms 1040 A tax-exempt educational or charitable organization and any person (or, if that person is an individual, a member of that person's family) who directly or indirectly controls the organization. 2011 federal tax forms 1040 Two S corporations, and an S corporation and a regular corporation, if the same persons own 80% or more of the value of the outstanding stock of each corporation. 2011 federal tax forms 1040 A corporation and a partnership if the same persons own both of the following. 2011 federal tax forms 1040 80% or more of the value of the outstanding stock of the corporation. 2011 federal tax forms 1040 80% or more of the capital or profits interest in the partnership. 2011 federal tax forms 1040 The executor and beneficiary of any estate. 2011 federal tax forms 1040 Long Production Period Property To be qualified property, long production period property must meet the following requirements. 2011 federal tax forms 1040 It must meet the requirements in (2)-(5), above. 2011 federal tax forms 1040 The property has a recovery period of at least 10 years or is transportation property. 2011 federal tax forms 1040 Transportation property is tangible personal property used in the trade or business of transporting persons or property. 2011 federal tax forms 1040 The property is subject to section 263A of the Internal Revenue Code. 2011 federal tax forms 1040 The property has an estimated production period exceeding 1 year and an estimated production cost exceeding $1,000,000. 2011 federal tax forms 1040 Noncommercial Aircraft To be qualified property, noncommercial aircraft must meet the following requirements. 2011 federal tax forms 1040 It must meet the requirements in (2)-(5), above. 2011 federal tax forms 1040 The aircraft must not be tangible personal property used in the trade or business of transporting persons or property (except for agricultural or firefighting purposes). 2011 federal tax forms 1040 The aircraft must be purchased (as discussed under Property Acquired by Purchase in chapter 2 ) by a purchaser who at the time of the contract for purchase, makes a nonrefundable deposit of the lesser of 10% of the cost or $100,000. 2011 federal tax forms 1040 The aircraft must have an estimated production period exceeding four months and a cost exceeding $200,000. 2011 federal tax forms 1040 Special Rules Sale-leaseback. 2011 federal tax forms 1040   If you sold qualified property you placed in service after December 31, 2007, and leased it back within 3 months after you originally placed in service, the property is treated as originally placed in service no earlier than the date it is used by you under the leaseback. 2011 federal tax forms 1040   The property will not qualify for the special depreciation allowance if the lessee or a related person to the lessee or lessor had a written binding contract in effect for the acquisition of the property before January 1, 2008. 2011 federal tax forms 1040 Syndicated leasing transactions. 2011 federal tax forms 1040   If qualified property is originally placed in service by a lessor after December 31, 2007, the property is sold within 3 months of the date it was placed in service, and the user of the property does not change, then the property is treated as originally placed in service by the taxpayer no earlier than the date of the last sale. 2011 federal tax forms 1040   Multiple units of property subject to the same lease will be treated as originally placed in service no earlier than the date of the last sale if the property is sold within 3 months after the final unit is placed in service and the period between the time the first and last units are placed in service does not exceed 12 months. 2011 federal tax forms 1040 Excepted Property Qualified property does not include any of the following. 2011 federal tax forms 1040 Property placed in service and disposed of in the same tax year. 2011 federal tax forms 1040 Property converted from business use to personal use in the same tax year acquired. 2011 federal tax forms 1040 Property converted from personal use to business use in the same or later tax year may be qualified property. 2011 federal tax forms 1040 Property required to be depreciated under the Alternative Depreciation System (ADS). 2011 federal tax forms 1040 This includes listed property used 50% or less in a qualified business use. 2011 federal tax forms 1040 For other property required to be depreciated using ADS, see Required use of ADS under Which Depreciation System (GDS or ADS) Applies , in chapter 4 . 2011 federal tax forms 1040 Qualified restaurant property (as defined in section 168(e)(7) of the Internal Revenue Code). 2011 federal tax forms 1040 Qualified retail improvement property (as defined in section 168(e)(8) of the Internal Revenue Code). 2011 federal tax forms 1040 Property for which you elected not to claim any special depreciation allowance (discussed later). 2011 federal tax forms 1040 Property for which you elected to accelerate certain credits in lieu of the special depreciation allowance (discussed next). 2011 federal tax forms 1040 Election to Accelerate Certain Credits in Lieu of the Special Depreciation Allowance An election made by a corporation to claim pre-2006 unused minimum tax credits in lieu of claiming the special depreciation allowance for either its first tax year ending after March 31, 2008, its first tax year ending after December 31, 2008, or its first tax year ending after December 31, 2010, continues to apply to round 2 extension property (as defined in section 168(k)(4)(I)(iv)), unless the corporation made an election not to apply the section 168(k)(4) election to round 2 extension property for its first tax year ending after December 31, 2010. 2011 federal tax forms 1040 For 2013, round 2 extension property generally is long production period and noncommercial aircraft if acquired after March 31, 2008, and placed in service after December 31, 2012, but before January 1, 2014. 2011 federal tax forms 1040 An election made by a corporation to claim pre-2006 unused minimum tax credits in lieu of claiming the special depreciation allowance for either its first tax year ending after March 31, 2008, its first tax year ending after December 31, 2008, or its first tax year ending after December 31, 2010, continues to apply to round 3 extension property (as defined in section 168(k)(4)(J)(iv)), unless the corporation makes an election not to apply the section 168(k)(4) election to round 3 extension property. 2011 federal tax forms 1040 If a corporation did not make a section 168(k)(4) election for either its first tax year ending after March 31, 2008, its first tax year ending after December 31, 2008, or its first tax year ending after December 31, 2010, the corporation may elect for its first tax year ending after December 31, 2012, to claim pre-2006 unused minimum tax credits in lieu of claiming the special depreciation allowance for only round 3 extension property. 2011 federal tax forms 1040 If you make an election to accelerate these credits in lieu of claiming the special depreciation allowance for eligible property, you must not take the 50% special depreciation allowance for the property and must depreciate the basis in the property under MACRS using the straight line method. 2011 federal tax forms 1040 See Which Depreciation Method Applies in chapter 4 . 2011 federal tax forms 1040 Once made, the election cannot be revoked without IRS consent. 2011 federal tax forms 1040 Additional guidance. 2011 federal tax forms 1040   For additional guidance on the election to accelerate the research or minimum tax credit in lieu of claiming the special depreciation allowance, see Rev. 2011 federal tax forms 1040 Proc. 2011 federal tax forms 1040 2008-65 on page 1082 of Internal Revenue Bulletin 2008-44, available at www. 2011 federal tax forms 1040 irs. 2011 federal tax forms 1040 gov/pub/irs-irbs/irb08-44. 2011 federal tax forms 1040 pdf, Rev. 2011 federal tax forms 1040 Proc. 2011 federal tax forms 1040 2009-16 on page 449 of Internal Revenue Bulletin 2009-06, available at www. 2011 federal tax forms 1040 irs. 2011 federal tax forms 1040 gov/pub/irs-irbs/irb09-06. 2011 federal tax forms 1040 pdf, and Rev. 2011 federal tax forms 1040 Proc. 2011 federal tax forms 1040 2009-33 on page 150 of Internal Revenue Bulletin 2009-29, available at www. 2011 federal tax forms 1040 irs. 2011 federal tax forms 1040 gov/pub/irs-irbs/irb09-29. 2011 federal tax forms 1040 pdf. 2011 federal tax forms 1040 Also, see Form 3800, General Business Credit; Form 8827, Credit for Prior Year Minimum Tax — Corporations; and related instructions. 2011 federal tax forms 1040   Additional guidance regarding the election to accelerate the minimum tax credit in lieu of claiming the special depreciation allowance for round 2 extension property and round 3 extension property may also be available in later Internal Revenue Bulletins available at www. 2011 federal tax forms 1040 irs. 2011 federal tax forms 1040 gov/irb. 2011 federal tax forms 1040 How Much Can You Deduct? Figure the special depreciation allowance by multiplying the depreciable basis of qualified reuse and recycling property, qualified cellulosic biofuel plant property, qualified disaster assistance property, and certain qualified property acquired after December 31, 2007, by 50%. 2011 federal tax forms 1040 For qualified property other than listed property, enter the special allowance on line 14 in Part II of Form 4562. 2011 federal tax forms 1040 For qualified property that is listed property, enter the special allowance on line 25 in Part V of Form 4562. 2011 federal tax forms 1040 If you place qualified property in service in a short tax year, you can take the full amount of a special depreciation allowance. 2011 federal tax forms 1040 Depreciable basis. 2011 federal tax forms 1040   This is the property's cost or other basis multiplied by the percentage of business/investment use, reduced by the total amount of any credits and deductions allocable to the property. 2011 federal tax forms 1040   The following are examples of some credits and deductions that reduce depreciable basis. 2011 federal tax forms 1040 Any section 179 deduction. 2011 federal tax forms 1040 Any deduction for removal of barriers to the disabled and the elderly. 2011 federal tax forms 1040 Any disabled access credit, enhanced oil recovery credit, and credit for employer-provided childcare facilities and services. 2011 federal tax forms 1040 Basis adjustment to investment credit property under section 50(c) of the Internal Revenue Code. 2011 federal tax forms 1040   For additional credits and deductions that affect basis, see section 1016 of the Internal Revenue Code. 2011 federal tax forms 1040   For information about how to determine the cost or other basis of property, see What Is the Basis of Your Depreciable Property in chapter 1 . 2011 federal tax forms 1040 For a discussion of business/investment use, see Partial business or investment use under Property Used in Your Business or Income-Producing Activity in chapter 1 . 2011 federal tax forms 1040 Depreciating the remaining cost. 2011 federal tax forms 1040   After you figure your special depreciation allowance for your qualified property, you can use the remaining cost to figure your regular MACRS depreciation deduction (discussed in chapter 4 . 2011 federal tax forms 1040 Therefore, you must reduce the depreciable basis of the property by the special depreciation allowance before figuring your regular MACRS depreciation deduction. 2011 federal tax forms 1040 Example. 2011 federal tax forms 1040 On November 1, 2013, Tom Brown bought and placed in service in his business qualified property that cost $450,000. 2011 federal tax forms 1040 He did not elect to claim a section 179 deduction. 2011 federal tax forms 1040 He deducts 50% of the cost ($225,000) as a special depreciation allowance for 2013. 2011 federal tax forms 1040 He uses the remaining $225,000 of cost to figure his regular MACRS depreciation deduction for 2013 and later years. 2011 federal tax forms 1040 Like-kind exchanges and involuntary conversions. 2011 federal tax forms 1040   If you acquire qualified property in a like-kind exchange or involuntary conversion, the carryover basis of the acquired property is eligible for a special depreciation allowance. 2011 federal tax forms 1040 After you figure your special allowance, you can use the remaining carryover basis to figure your regular MACRS depreciation deduction. 2011 federal tax forms 1040 In the year you claim the allowance (the year you place in service the property received in the exchange or dispose of involuntarily converted property), you must reduce the carryover basis of the property by the allowance before figuring your regular MACRS depreciation deduction. 2011 federal tax forms 1040 See Figuring the Deduction for Property Acquired in a Nontaxable Exchange , in chapter 4 under How Is the Depreciation Deduction Figured . 2011 federal tax forms 1040 The excess basis (the part of the acquired property's basis that exceeds its carryover basis) is also eligible for a special depreciation allowance. 2011 federal tax forms 1040 How Can You Elect Not To Claim an Allowance? You can elect, for any class of property, not to deduct any special allowances for all property in such class placed in service during the tax year. 2011 federal tax forms 1040 To make an election, attach a statement to your return indicating what election you are making and the class of property for which you are making the election. 2011 federal tax forms 1040 When to make election. 2011 federal tax forms 1040   Generally, you must make the election on a timely filed tax return (including extensions) for the year in which you place the property in service. 2011 federal tax forms 1040   However, if you timely filed your return for the year without making the election, you can still make the election by filing an amended return within 6 months of the due date of the original return (not including extensions). 2011 federal tax forms 1040 Attach the election statement to the amended return. 2011 federal tax forms 1040 On the amended return, write “Filed pursuant to section 301. 2011 federal tax forms 1040 9100-2. 2011 federal tax forms 1040 ” Revoking an election. 2011 federal tax forms 1040   Once you elect not to deduct a special depreciation allowance for a class of property, you cannot revoke the election without IRS consent. 2011 federal tax forms 1040 A request to revoke the election is a request for a letter ruling. 2011 federal tax forms 1040 If you elect not to have any special allowance apply, the property may be subject to an alternative minimum tax adjustment for depreciation. 2011 federal tax forms 1040 When Must You Recapture an Allowance? When you dispose of property for which you claimed a special depreciation allowance, any gain on the disposition is generally recaptured (included in income) as ordinary income up to the amount of the special depreciation allowance previously allowed or allowable. 2011 federal tax forms 1040 See When Do You Recapture MACRS Depreciation in chapter 4 or more information. 2011 federal tax forms 1040 Recapture of allowance deducted for qualified GO Zone property. 2011 federal tax forms 1040   If, in any year after the year you claim the special depreciation allowance for qualified GO Zone property (including specified GO Zone extension property), the property ceases to be used in the GO Zone, you may have to recapture as ordinary income the excess benefit you received from claiming the special depreciation allowance. 2011 federal tax forms 1040 For additional guidance, see Notice 2008-25 on page 484 of Internal Revenue Bulletin 2008-9. 2011 federal tax forms 1040 Qualified cellulosic biomass ethanol plant property and qualified cellulosic biofuel plant property. 2011 federal tax forms 1040   If, in any year after the year you claim the special depreciation allowance for any qualified cellulosic biomass ethanol plant property or qualified biofuel plant property, the property ceases to be qualified cellulosic biomass ethanol plant property or qualified biofuel plant property, you may have to recapture as ordinary income the excess benefit you received from claiming the special depreciation allowance. 2011 federal tax forms 1040 Recapture of allowance for qualified Recovery Assistance property. 2011 federal tax forms 1040   If, in any year after the year you claim the special depreciation allowance for qualified Recovery Assistance property, the property ceases to be used in the Kansas disaster area, you may have to recapture as ordinary income the excess benefit you received from claiming the special depreciation allowance. 2011 federal tax forms 1040 For additional guidance, see Notice 2008-67 on page 307 of Internal Revenue Bulletin 2008-32. 2011 federal tax forms 1040 Recapture of allowance for qualified disaster assistance property. 2011 federal tax forms 1040   If, in any year after the year you claim the special depreciation allowance for qualified disaster assistance property, the property ceases to be used in the applicable disaster area, you may have to recapture as ordinary income the excess benefit you received from claiming the special depreciation allowance. 2011 federal tax forms 1040   For additional guidance, see Notice 2008-67 on page 307 of Internal Revenue Bulletin 2008-32. 2011 federal tax forms 1040 Prev  Up  Next   Home   More Online Publications