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2011 Irs Tax Forms Available

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2011 Irs Tax Forms Available

2011 irs tax forms available Publication 901 - Main Content Table of Contents Application of Treaties Tax Exemptions Provided by TreatiesPersonal Services Income Professors, Teachers, and Researchers Students and Apprentices Wages and Pensions Paid by a Foreign Government Explanation of TablesTable 1 Table 2 Table 3 Application of Treaties The United States has income tax treaties with a number of foreign countries. 2011 irs tax forms available Under these treaties, residents (not necessarily citizens) of foreign countries are taxed at a reduced rate, or are exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available income taxes on certain items of income they receive from sources within the United States. 2011 irs tax forms available These reduced rates and exemptions vary among countries and specific items of income. 2011 irs tax forms available If there is no treaty between your country and the United States, you must pay tax on the income in the same way and at the same rates shown in the instructions for Form 1040NR. 2011 irs tax forms available Also see Publication 519. 2011 irs tax forms available Many of the individual states of the United States tax the income of their residents. 2011 irs tax forms available Therefore, you should consult the tax authorities of the state in which you live to find out if that state taxes the income of individuals and, if so, whether the tax applies to any of your income. 2011 irs tax forms available Tax treaties reduce the U. 2011 irs tax forms available S. 2011 irs tax forms available taxes of residents of foreign countries. 2011 irs tax forms available With certain exceptions, they do not reduce the U. 2011 irs tax forms available S. 2011 irs tax forms available taxes of U. 2011 irs tax forms available S. 2011 irs tax forms available citizens or residents. 2011 irs tax forms available U. 2011 irs tax forms available S. 2011 irs tax forms available citizens and residents are subject to U. 2011 irs tax forms available S. 2011 irs tax forms available income tax on their worldwide income. 2011 irs tax forms available Treaty provisions generally are reciprocal (apply to both treaty countries); therefore, a U. 2011 irs tax forms available S. 2011 irs tax forms available citizen or resident who receives income from a treaty country may refer to the tables in this publication to see if a tax treaty might affect the tax to be paid to that foreign country. 2011 irs tax forms available Foreign taxing authorities sometimes require certification from the U. 2011 irs tax forms available S. 2011 irs tax forms available Government that an applicant filed an income tax return as a U. 2011 irs tax forms available S. 2011 irs tax forms available citizen or resident, as part of the proof of entitlement to the treaty benefits. 2011 irs tax forms available See Form 8802, Application for United States Residency Certification, to request a certification. 2011 irs tax forms available Disclosure of a treaty-based position that reduces your tax. 2011 irs tax forms available   If you take the position that any U. 2011 irs tax forms available S. 2011 irs tax forms available tax is overruled or otherwise reduced by a U. 2011 irs tax forms available S. 2011 irs tax forms available treaty (a treaty-based position), you generally must disclose that position on Form 8833 and attach it to your return. 2011 irs tax forms available If you are not required to file a return because of your treaty-based position, you must file a return anyway to report your position. 2011 irs tax forms available The filing of Form 8833 does not apply to a reduced rate of withholding tax on noneffectively connected income, such as dividends, interest, rents or royalties, or to a reduced rate of tax on pay received for services performed as an employee, including pensions, annuities, and social security. 2011 irs tax forms available For more information, see Publication 519 and the Form 8833 instructions. 2011 irs tax forms available   If you fail to file Form 8833, you may have to pay a $1,000 penalty. 2011 irs tax forms available Corporations are subject to a $10,000 penalty for each failure. 2011 irs tax forms available Tax Exemptions Provided by Treaties In addition to the tables in the back of this publication, this publication contains discussions of the exemptions from tax and certain other effects of the tax treaties on the following types of income. 2011 irs tax forms available Pay for certain personal services performed in the United States. 2011 irs tax forms available Pay of a professor, teacher, or researcher who teaches or performs research in the United States for a limited time. 2011 irs tax forms available Amounts received for maintenance and studies by a foreign student or apprentice who is here for study or experience. 2011 irs tax forms available Wages, salaries, and pensions paid by a foreign government. 2011 irs tax forms available Personal Services Income Pay for certain personal services performed in the United States is exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available income tax if you are a resident of one of the countries discussed below, if you are in the United States for a limited number of days, and if you meet certain other conditions. 2011 irs tax forms available For this purpose, the word “day” means a day during any part of which you are physically present in the United States. 2011 irs tax forms available Terms defined. 2011 irs tax forms available   Several terms appear in many of the discussions that follow. 2011 irs tax forms available The exact meanings of the terms are determined by the particular tax treaty under discussion; thus, the meanings vary among treaties. 2011 irs tax forms available The definitions that follow are, therefore, general definitions that may not give the exact meaning intended by a particular treaty. 2011 irs tax forms available   The terms fixed base and permanent establishment generally mean a fixed place of business, such as a place of management, a branch, an office, a factory, a warehouse, or a mining site, through which an enterprise carries on its business. 2011 irs tax forms available   The term borne by generally means having ultimate financial accounting responsibility for, or providing the monetary resources for, an expenditure or payment, even if another entity in another location actually made the expenditure or payment. 2011 irs tax forms available Australia Income that residents of Australia receive for performing personal services as independent contractors or self-employed individuals (independent personal services) in the United States during the tax year is exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available income tax if the residents: Are in the United States for no more than 183 days during the tax year, and Do not have a fixed base regularly available to them in the United States for the purpose of performing the services. 2011 irs tax forms available If they have a fixed base available in the United States, they are taxed on the income attributable to the fixed base. 2011 irs tax forms available Pay that residents of Australia receive for labor or personal services performed in the United States as employees (dependent personal services), including services as a director of a company, is exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available income tax if: The residents are in the United States for no more than 183 days during the tax year, The pay is paid by, or on behalf of, an employer or company that is not a resident of the United States, and The pay is not deductible in determining the taxable income of the trade or business of the employer (or company) in the United States. 2011 irs tax forms available These exemptions do not apply to public entertainers (such as theater, motion picture, radio, or television entertainers, musicians, and athletes) from Australia who earn more than $10,000 in gross receipts, including reimbursed expenses, from their entertainment activities in the United States during the tax year. 2011 irs tax forms available Austria Income that residents of Austria receive for personal services as independent contractors or self-employed individuals (independent personal services) in the United States is exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available income tax if they do not have a fixed base regularly available to them in the United States for performing the services. 2011 irs tax forms available If they have a fixed base available in the United States, they are taxed on the income attributable to the fixed base. 2011 irs tax forms available Income that residents of Austria receive for services performed in the United States as employees (dependent personal services) is exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available income tax if the residents meet the following requirements. 2011 irs tax forms available They are in the United States for no more than 183 days in any 12-month period beginning or ending in the tax year. 2011 irs tax forms available Their income is paid by, or on behalf of, an employer who is not a U. 2011 irs tax forms available S. 2011 irs tax forms available resident. 2011 irs tax forms available Their income is not borne by a permanent establishment or a fixed base that the employer has in the United States. 2011 irs tax forms available These exemptions do not apply to public entertainers (such as theater, motion picture, radio, or television entertainers, musicians, and athletes) from Austria who earn more than $20,000 in gross receipts, including reimbursed expenses, from their entertainment activities in the United States during the tax year. 2011 irs tax forms available Income received by a resident of Austria for services performed as an employee and member of the regular complement of a ship or aircraft operated in international traffic is exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available income tax. 2011 irs tax forms available Bangladesh Income that residents of Bangladesh receive for performing personal services as independent contractors or self-employed individuals (independent personal services) in the United States during the tax year is exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available income tax if the residents: Are in the United States for no more than 183 days in any 12-month period beginning or ending in the tax year, or Do not have a fixed base regularly available to them in the United States for the purpose of performing the services. 2011 irs tax forms available If they have a fixed base available in the United States, they are taxed on the income attributable to the fixed base. 2011 irs tax forms available Income that residents of Bangladesh receive for services performed in the United States as employees (dependent personal services) is exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available income tax if the residents meet the following requirements. 2011 irs tax forms available They are in the United States for no more than 183 days in any 12-month period beginning or ending in the tax year. 2011 irs tax forms available Their income is paid by, or on behalf of, an employer who is not a U. 2011 irs tax forms available S. 2011 irs tax forms available resident. 2011 irs tax forms available Their income is not borne by a permanent establishment or a fixed base that the employer has in the United States. 2011 irs tax forms available These exemptions do not apply to pubic entertainers (such as theater, motion picture, radio, or television entertainers, musicians, and athletes) from Bangladesh who earn more than $10,000 in gross receipts, including reimbursed expenses, from their entertainment activities in the United States during the tax year. 2011 irs tax forms available Regardless of these limits, income of Bangladesh entertainers is exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available income tax if their visit to the United States is wholly or mainly supported by public funds of Bangladesh, its political subdivisions, or local authorities. 2011 irs tax forms available Income received from employment as a member of the regular complement of a ship or an aircraft operated by a Bangladesh enterprise in international traffic is exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available tax. 2011 irs tax forms available If the ship or aircraft is operated by a U. 2011 irs tax forms available S. 2011 irs tax forms available enterprise, the income is subject to U. 2011 irs tax forms available S. 2011 irs tax forms available tax. 2011 irs tax forms available If the resident of Bangladesh is a shareholder in a U. 2011 irs tax forms available S. 2011 irs tax forms available corporation, these exemptions do not apply to directors' fees received as a member of the board of directors of the U. 2011 irs tax forms available S. 2011 irs tax forms available corporation. 2011 irs tax forms available The amount received by the shareholder that is more than the amount paid to a director that is not a shareholder is subject to U. 2011 irs tax forms available S. 2011 irs tax forms available tax at the rate of 15%. 2011 irs tax forms available Barbados Income that residents of Barbados receive for performing personal services as independent contractors or self-employed individuals (independent personal services) in the United States during the tax year is exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available income tax if the residents: Are in the United States for no more than 89 days during the tax year, Earn net income for independent services provided to U. 2011 irs tax forms available S. 2011 irs tax forms available residents that is not more than $5,000 (there is no dollar limit if the contractors are not U. 2011 irs tax forms available S. 2011 irs tax forms available residents), and Do not have a regular base available in the United States for performing the services. 2011 irs tax forms available If they have a regular base available in the United States but otherwise meet the conditions for exemption, they are taxed only on the income attributable to the regular base. 2011 irs tax forms available Income that residents of Barbados receive for personal services performed in the United States as employees (dependent personal services) is exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available tax if the residents meet four requirements. 2011 irs tax forms available They are in the United States for no more than 183 days during the calendar year. 2011 irs tax forms available The income earned in the calendar year in the United States is not more than $5,000. 2011 irs tax forms available Their income is paid by or for an employer who is not a U. 2011 irs tax forms available S. 2011 irs tax forms available resident. 2011 irs tax forms available The income is not borne by a permanent establishment or regular base of the employer in the United States. 2011 irs tax forms available Income of a Barbadian resident from employment as a member of the regular complement of a ship or aircraft operated in international traffic is exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available tax. 2011 irs tax forms available These exemptions do not apply to Barbadian resident public entertainers (such as theater, motion picture, radio, or television artists, musicians, or athletes) who receive gross receipts of more than $250 per day or $4,000 in the tax year, not including reimbursed expenses, from their entertainment activities in the United States. 2011 irs tax forms available However, the exemptions do apply regardless of these limits on gross receipts if the entertainer's visit to the United States is substantially supported by Barbadian public funds or if the entertainer's services are provided to a nonprofit organization. 2011 irs tax forms available Belgium Income that residents of Belgium receive for personal services as independent contractors or self-employed individuals are subject to the provisions of Article 7 (Business Profits) of the treaty. 2011 irs tax forms available Under that provision, business profits are exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available income tax unless the individual has a permanent establishment in the United States. 2011 irs tax forms available If they have a permanent establishment in the United States, they are taxed on the profit attributable to the permanent establishment. 2011 irs tax forms available Income that residents of Belgium receive for services performed in the United States as employees (dependent personal services) is exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available income tax if the residents meet the following requirements. 2011 irs tax forms available They are in the United States for no more than 183 days in any 12-month period beginning or ending in the tax year. 2011 irs tax forms available Their income is paid by, or on behalf of, an employer who is not a U. 2011 irs tax forms available S. 2011 irs tax forms available resident. 2011 irs tax forms available Their income is not borne by a permanent establishment that the employer has in the United States. 2011 irs tax forms available The exemption does not apply to directors' fees and similar payments received by a resident of Belgium for services performed in the United States as a member of the board of directors of a company that is a resident of the United States. 2011 irs tax forms available Public entertainers (such as theater, motion picture, radio, or television artists, musicians, or athletes) from Belgium who earn more than $20,000 in gross receipts, including reimbursed expenses, from their entertainment activities in the United States during the tax year are subject to U. 2011 irs tax forms available S. 2011 irs tax forms available tax. 2011 irs tax forms available Income received by a resident of Belgium for services performed as an employee and member of the regular complement of a ship or aircraft operated in international traffic is exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available income tax. 2011 irs tax forms available Bulgaria Income that residents of Bulgaria receive for personal services as independent contractors or self-employed individuals is subject to the provisions of Article 7 (Business Profits) of the treaty. 2011 irs tax forms available Under that provision, business profits are exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available income tax unless the individual has a permanent establishment in the United States. 2011 irs tax forms available If they have a permanent establishment in the United States, they are taxed on the profit attributable to the permanent establishment. 2011 irs tax forms available Under Article 5 (Permanent Establishment), you may be considered to provide services through a permanent establishment in the United States even if you do not have a fixed place of business. 2011 irs tax forms available Income that residents of Bulgaria receive for services performed in the United States as employees (dependent personal services) is exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available income tax if the residents meet the following requirements. 2011 irs tax forms available They are in the United States for no more than 183 days in any 12-month period beginning or ending in the tax year. 2011 irs tax forms available Their income is paid by, or on behalf of, an employer who is not a U. 2011 irs tax forms available S. 2011 irs tax forms available resident. 2011 irs tax forms available Their income is not borne by a permanent establishment that the employer has in the United States. 2011 irs tax forms available The exemption does not apply to directors' fees and similar payments received by a resident of Bulgaria as a member of the board of directors of a U. 2011 irs tax forms available S. 2011 irs tax forms available company. 2011 irs tax forms available Public entertainers (such as theater, motion picture, radio, or television artists, musicians, or athletes) from Bulgaria who earn more than $15,000 in gross receipts, including reimbursed expenses, from their entertainment activities in the United States during the tax year are subject to U. 2011 irs tax forms available S. 2011 irs tax forms available tax. 2011 irs tax forms available Income received by a resident of Bulgaria for services performed as an employee and member of the regular complement of a ship or aircraft operated in international traffic is exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available income tax. 2011 irs tax forms available Canada Income that residents of Canada receive for personal services as independent contractors or self-employed individuals is subject to the provisions of Article VII (Business Profits) of the treaty. 2011 irs tax forms available Under that provision, business profits are exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available income tax unless the individual has a permanent establishment in the United States. 2011 irs tax forms available If they have a permanent establishment in the United States, they are taxed on the profit attributable to the permanent establishment. 2011 irs tax forms available Under Article V (Permanent Establishment), you may be considered to provide services through a permanent establishment in the United States even if you do not have a fixed place of business. 2011 irs tax forms available Income that residents of Canada receive for personal services performed as employees (dependent personal services) in the United States is exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available tax if it is not more than $10,000 for the year. 2011 irs tax forms available If the income is more than $10,000 for the year, it is exempt only if: The residents are present in the United States for no more than 183 days in any 12-month period beginning or ending in the tax year, and The income is not paid by, or on behalf of, a U. 2011 irs tax forms available S. 2011 irs tax forms available resident, and is not borne by a permanent establishment in the United States. 2011 irs tax forms available Public entertainers (such as theater, motion picture, radio, or television artists, musicians, or athletes) from Canada who derive more than $15,000 in gross receipts, including reimbursed expenses, from their entertainment activities in the United States during the calendar year are subject to U. 2011 irs tax forms available S. 2011 irs tax forms available tax. 2011 irs tax forms available However, this article does not apply to athletes participating in team sports in leagues with regularly scheduled games in both Canada and the United States. 2011 irs tax forms available Pay received by a resident of Canada for employment regularly done in more than one country on a ship, aircraft, motor vehicle, or train operated by a Canadian resident is exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available tax. 2011 irs tax forms available China, People's Republic of Income that residents of the People's Republic of China receive for personal services as independent contractors or self-employed individuals (independent personal services) that they perform during the tax year in the United States is exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available income tax if the residents: Are present in the United States for no more than 183 days in the calendar year, and Do not have a fixed base regularly available in the United States for performing the services. 2011 irs tax forms available If they have a fixed base available in the United States, they are taxable on the income attributable to the fixed base. 2011 irs tax forms available Pay received by residents of the People's Republic of China for services performed as employees (dependent personal services) in the United States is exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available tax if: The residents are present in the United States for no more than 183 days in the calendar year, The pay is paid by or for an employer who is not a U. 2011 irs tax forms available S. 2011 irs tax forms available resident, and The pay is not borne by a permanent establishment or fixed base that the employer has in the United States. 2011 irs tax forms available These exemptions do not apply to directors' fees for service on the board of directors of a U. 2011 irs tax forms available S. 2011 irs tax forms available corporation. 2011 irs tax forms available These exemptions generally do not apply to income received as a public entertainer (such as a theater, motion picture, radio, or television artist, musician, or athlete). 2011 irs tax forms available However, income of athletes or public entertainers from China participating in a cultural exchange program agreed upon by the U. 2011 irs tax forms available S. 2011 irs tax forms available and Chinese governments is exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available tax. 2011 irs tax forms available Commonwealth of Independent States Income that residents of a C. 2011 irs tax forms available I. 2011 irs tax forms available S. 2011 irs tax forms available member receive for performing personal services in the United States is exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available income tax if those residents are in the United States for no more than 183 days during the tax year. 2011 irs tax forms available Pay received by an employee who is a member of the regular complement of a ship or aircraft operated in international traffic by a C. 2011 irs tax forms available I. 2011 irs tax forms available S. 2011 irs tax forms available member or a resident of a C. 2011 irs tax forms available I. 2011 irs tax forms available S. 2011 irs tax forms available member is exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available tax. 2011 irs tax forms available Cyprus Income that residents of Cyprus receive for performing personal services as independent contractors or self-employed individuals (independent personal services) in the United States during the tax year is exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available income tax if the residents: Are present in the United States for less than 183 days in the tax year, and Do not have a fixed base regularly available to them in the United States for performing the services. 2011 irs tax forms available If they have a fixed base available in the United States, they are taxable on the income attributable to the fixed base. 2011 irs tax forms available Pay received by residents of Cyprus from services performed as employees (dependent personal services), including services as an officer of a corporation, is exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available income tax if: The residents are in the United States for less than 183 days during the tax year, The pay is paid by or for an employer who is not a U. 2011 irs tax forms available S. 2011 irs tax forms available resident, and The pay is not borne by a permanent establishment, fixed base, or trade or business that the employer has in the United States. 2011 irs tax forms available Pay received by a Cyprus resident for performing personal services as an employee and member of the regular complement of a ship or aircraft operated in international traffic by a resident of Cyprus is exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available tax. 2011 irs tax forms available These exemptions do not apply to Cyprus resident public entertainers (theater, motion picture, radio, or television artists, musicians, or athletes) who receive gross receipts of more than $500 per day or $5,000 for the tax year, not including reimbursed expenses, from their entertainment activities in the United States. 2011 irs tax forms available Directors' fees received by residents of Cyprus for service on the board of directors of a U. 2011 irs tax forms available S. 2011 irs tax forms available corporation are exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available income tax to the extent of a reasonable fixed amount payable to all directors for each day of attendance at directors' meetings held in the United States. 2011 irs tax forms available Czech Republic Income that residents of the Czech Republic receive for performing personal services as independent contractors or self-employed individuals (independent personal services) in the United States is exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available income tax if the residents: Are present in the United States for no more than 183 days in any 12-month period, and Do not have a fixed base regularly available to them in the United States for performing the services. 2011 irs tax forms available If they have a fixed base available, they are taxed only on income attributable to the fixed base. 2011 irs tax forms available Income that residents of the Czech Republic receive for employment in the United States (dependent personal services) is exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available income tax if the following three requirements are met. 2011 irs tax forms available The resident is present in the United States for no more than 183 days in any 12-month period. 2011 irs tax forms available The income is paid by, or on behalf of, an employer who is not a U. 2011 irs tax forms available S. 2011 irs tax forms available resident. 2011 irs tax forms available The income is not borne by a permanent establishment or a fixed base that the employer has in the United States. 2011 irs tax forms available These exemptions do not apply to income residents of the Czech Republic receive as public entertainers (such as theater, motion picture, radio, or television artists, or musicians) or sportsmen if their gross receipts, including reimbursed expenses, are more than $20,000 during the tax year. 2011 irs tax forms available Regardless of these limits, income of Czech entertainers and sportsmen is exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available income tax if their visit to the United States is substantially supported by public funds of the Czech Republic, its political subdivisions, or local authorities, or the visit is made pursuant to a specific arrangement between the United States and the Czech Republic. 2011 irs tax forms available These exemptions do not apply to directors' fees and similar payments received by a resident of the Czech Republic as a member of the board of directors of a company that is a resident of the United States. 2011 irs tax forms available Income from employment as a member of the regular complement of a ship or aircraft operated by a Czech enterprise in international traffic is exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available income tax. 2011 irs tax forms available If the ship or aircraft is operated by a U. 2011 irs tax forms available S. 2011 irs tax forms available enterprise, the income is subject to U. 2011 irs tax forms available S. 2011 irs tax forms available tax. 2011 irs tax forms available Denmark Income that residents of Denmark receive for personal services as independent contractors or self-employed individuals (independent personal services) in the United States is exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available income tax if they do not have a fixed base regularly available to them in the United States for performing the services. 2011 irs tax forms available If they have a fixed base available in the United States, they are taxed on the income attributable to the fixed base. 2011 irs tax forms available Income that residents of Denmark receive for services performed in the United States as employees (dependent personal services) is exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available income tax if the residents meet the following requirements. 2011 irs tax forms available They are in the United States for no more than 183 days in any 12-month period beginning or ending in the tax year. 2011 irs tax forms available Their income is paid by, or on behalf of, an employer who is not a U. 2011 irs tax forms available S. 2011 irs tax forms available resident. 2011 irs tax forms available Their income is not borne by a permanent establishment or a fixed base that the employer has in the United States. 2011 irs tax forms available These exemptions do not apply to directors' fees and similar payments received by a resident of Denmark as a member of the board of directors of a company that is a resident of the United States. 2011 irs tax forms available These exemptions do not apply to public entertainers (such as theater, motion picture, radio, or television artists, musicians, and athletes) from Denmark who earn more than $20,000 in gross receipts, including reimbursed expenses, from their entertainment activities in the United States during the tax year. 2011 irs tax forms available Income received by a resident of Denmark for services performed as an employee and member of the regular complement of a ship or aircraft operated in international traffic is exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available income tax. 2011 irs tax forms available Egypt Income that residents of Egypt receive for performing personal services as independent contractors or as self-employed individuals (independent personal services) in the United States during the tax year is exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available income tax if they are in the United States for no more than 89 days during the tax year. 2011 irs tax forms available Income that residents of Egypt receive for labor or personal services performed in the United States as employees (dependent personal services), including income for services performed by an officer of a corporation or company, is exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available income tax if the residents meet four requirements. 2011 irs tax forms available They are in the United States for no more than 89 days during the tax year. 2011 irs tax forms available They are employees of a resident of, or a permanent establishment in, Egypt. 2011 irs tax forms available Their income is not borne by a permanent establishment that the employer has in the United States. 2011 irs tax forms available Their income is subject to Egyptian tax. 2011 irs tax forms available This exemption does not apply to pay received by a resident of Egypt who is an employee and member of the regular complement of a ship or an aircraft operated in international traffic by a resident of the United States. 2011 irs tax forms available These exemptions do not apply to Egyptian resident public entertainers (theater, motion picture, radio, or television artists, musicians, or athletes), who earn income for services as public entertainers if the gross amount of the income is more than $400 for each day they are in the United States performing the services. 2011 irs tax forms available Estonia Income that residents of Estonia receive for performing personal services as independent contractors or self-employed individuals (independent personal services) in the United States is exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available income tax if the residents: Are in the United States for no more than 183 days in any 12-month period beginning or ending in the tax year, and Do not have a fixed base regularly available to them in the United States for performing the services. 2011 irs tax forms available If they have a fixed base available, they are taxed on the income attributable to the fixed base. 2011 irs tax forms available Income that residents of Estonia receive for services performed in the United States as employees (dependent personal services) is exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available income tax if the following requirements are met. 2011 irs tax forms available The resident is in the United States for no more than 183 days in any 12-month period beginning or ending in the tax year. 2011 irs tax forms available The income is paid by, or on behalf of, an employer who is not a U. 2011 irs tax forms available S. 2011 irs tax forms available resident. 2011 irs tax forms available The income is not borne by a permanent establishment or a fixed base that the employer has in the United States. 2011 irs tax forms available These exemptions do not apply to directors' fees and similar payments received by a resident of Estonia as a member of the board of directors or similar body of a company that is a U. 2011 irs tax forms available S. 2011 irs tax forms available resident. 2011 irs tax forms available Pay received for employment as a member of the regular complement of a ship or an aircraft operated in international traffic by a United States enterprise is subject to U. 2011 irs tax forms available S. 2011 irs tax forms available tax. 2011 irs tax forms available These exemptions do not apply to income residents of Estonia receive as public entertainers (such as theater, motion picture, radio, or television artists, or musicians) or sportsmen if their gross receipts, including reimbursed expenses, are more than $20,000 for their personal activities in the United States during the tax year. 2011 irs tax forms available Regardless of these limits, income of Estonian entertainers or athletes is exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available income tax if their visit to the United States is wholly or mainly supported by public funds of Estonia, its political subdivisions, or local authorities. 2011 irs tax forms available Finland Income that residents of Finland receive for performing personal services as independent contractors or self-employed individuals (independent personal services) in the United States is exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available income tax if they do not have a fixed base regularly available to them in the United States for performing the services. 2011 irs tax forms available If they have a fixed base available in the United States, they are taxed on the income attributable to the fixed base. 2011 irs tax forms available Income that residents of Finland receive for labor or personal services performed in the United States as employees (dependent personal services) is exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available income tax if the residents meet three requirements. 2011 irs tax forms available They are in the United States for no more than 183 days during any 12-month period. 2011 irs tax forms available Their income is paid by, or on behalf of, an employer who is not a resident of the United States. 2011 irs tax forms available Their income is not borne by a permanent establishment, fixed base, or trade or business that the employer has in the United States. 2011 irs tax forms available The exemption does not apply to pay received by a resident of Finland who is an employee and member of the regular complement of a ship or aircraft operated in international traffic by a resident of the United States. 2011 irs tax forms available These exemptions do not apply to income residents of Finland receive as public entertainers or sportsmen if the gross income, including reimbursed expenses, is more than $20,000 for their personal activities in the United States during the calendar year. 2011 irs tax forms available France Income that residents of France receive for performing personal services as independent contractors or self-employed individuals (independent personal services) in the United States is exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available income tax if they do not have a fixed base regularly available to them in the United States for performing the services. 2011 irs tax forms available If they have a fixed base available in the United States, they are taxed on the income attributable to the fixed base. 2011 irs tax forms available Income that residents of France receive for labor or personal services performed in the United States as employees (dependent personal services) is exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available income tax if the residents meet three requirements. 2011 irs tax forms available They are in the United States for no more than 183 days in any 12-month period. 2011 irs tax forms available Their income is paid by, or on behalf of, an employer who is not a resident of the United States. 2011 irs tax forms available Their income is not borne by a permanent establishment or a fixed base that the employer has in the United States. 2011 irs tax forms available Income for services performed by a resident of France as an employee and member of the regular complement of a ship or an aircraft operated in international traffic is exempt from tax in the United States. 2011 irs tax forms available These exemptions do not apply to public entertainers (such as theater, motion picture, radio, or television artists, or musicians), or sportsmen from France who earn more than $10,000 in gross receipts, including reimbursed expenses, from their entertainment activities in the United States during the tax year. 2011 irs tax forms available Regardless of these limits, income of French entertainers or sportsmen is exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available tax if their visit is principally supported by public funds of France. 2011 irs tax forms available These exemptions do not apply to directors' fees and similar payments received by a resident of France as a member of the board of directors of a company that is a resident of the United States. 2011 irs tax forms available Germany Income that residents of Germany receive for personal services as independent contractors or self-employed individuals are subject to the provisions of Article 7 (Business Profits) of the treaty. 2011 irs tax forms available Under that provision, business profits are exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available income tax unless the individual has a permanent establishment in the United States. 2011 irs tax forms available If they have a permanent establishment in the United States, they are taxed on the profit attributable to the permanent establishment. 2011 irs tax forms available Income that residents of Germany receive for labor or personal services performed in the United States as employees (dependent personal services) is exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available tax if the residents meet three requirements. 2011 irs tax forms available They are in the United States for no more than 183 days during the calendar year. 2011 irs tax forms available The income is paid by, or on behalf of, an employer who is not a resident of the United States. 2011 irs tax forms available The income is not borne by a permanent establishment that the employer has in the United States. 2011 irs tax forms available Pay received by a resident of Germany for services performed as an employee and member of the regular complement of a ship or aircraft operated in international traffic is exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available tax. 2011 irs tax forms available The exemption does not apply to directors' fees and other similar payments received by a resident of Germany for services performed in the United States as a member of the board of directors of a company resident in the United States. 2011 irs tax forms available Income residents of Germany receive as public entertainers (such as theater, motion picture, radio, or television artists, or musicians) or athletes is subject to U. 2011 irs tax forms available S. 2011 irs tax forms available tax if their gross receipts, including reimbursed expenses, from their entertainment activities in the United States are more than $20,000 during the calendar year. 2011 irs tax forms available Income of German entertainers or athletes is exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available tax if their visit to the United States is substantially supported by public funds of Germany, its political subdivisions, or local authorities. 2011 irs tax forms available Greece Income that residents of Greece receive for labor or personal services (including practicing liberal and artistic professions) is exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available income tax if they are in the United States for no more than 183 days during the tax year and the pay is not more than $10,000. 2011 irs tax forms available The pay, regardless of amount, is exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available income tax if it is for labor or personal services performed as employees of, or under contract with, a resident of Greece or a Greek corporation or other entity of Greece, and if the residents are in the United States for no more than 183 days during the tax year. 2011 irs tax forms available Hungary Income that residents of Hungary receive for performing personal services as independent contractors or self-employed individuals (independent personal services) in the United States during the tax year is exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available tax if the residents: Are in the United States for no more than 183 days during the tax year, and Do not have a fixed base regularly available in the United States. 2011 irs tax forms available If they have a fixed base available in the United States, they are taxed on the income attributable to the fixed base. 2011 irs tax forms available Income that residents of Hungary receive for labor or personal services performed in the United States as employees (dependent personal services) is exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available income tax if the residents meet three requirements. 2011 irs tax forms available They are in the United States for no more than 183 days during the tax year. 2011 irs tax forms available Their income is paid by or on behalf of an employer who is not a resident of the United States. 2011 irs tax forms available Their income is not borne by a permanent establishment or a fixed base that the employer has in the United States. 2011 irs tax forms available Pay received by an employee who is a member of the regular complement of a ship or aircraft operated by a Hungarian enterprise in international traffic is exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available tax. 2011 irs tax forms available If the ship or aircraft is operated by a U. 2011 irs tax forms available S. 2011 irs tax forms available enterprise, the pay is subject to U. 2011 irs tax forms available S. 2011 irs tax forms available tax. 2011 irs tax forms available Iceland Income that residents of Iceland receive for personal services as independent contractors or self-employed individuals is subject to the provisions of Article 7 (Business Profits) of the treaty. 2011 irs tax forms available Under that provision, business profits are exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available income tax unless the individual has a permanent establishment in the United States. 2011 irs tax forms available If they have a permanent establishment in the United States, they are taxed on the profit attributable to the permanent establishment. 2011 irs tax forms available Income that residents of Iceland receive for services performed in the United States as employees (dependent personal services) is exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available income tax if the residents meet the following requirements. 2011 irs tax forms available They are in the United States for no more than 183 days in any 12-month period beginning or ending in the tax year. 2011 irs tax forms available Their income is paid by, or on behalf of, an employer who is not a U. 2011 irs tax forms available S. 2011 irs tax forms available resident. 2011 irs tax forms available Their income is not borne by a permanent establishment that the employer has in the United States. 2011 irs tax forms available The exemption does not apply to directors' fees and similar payments received by a resident of Iceland as a member of the board of directors of a U. 2011 irs tax forms available S. 2011 irs tax forms available company. 2011 irs tax forms available Public entertainers (such as theater, motion picture, radio, or television artists, musicians, or athletes) from Iceland who earn more than $20,000 in gross receipts, including reimbursed expenses, from their entertainment activities in the United States during the tax year are subject to U. 2011 irs tax forms available S. 2011 irs tax forms available tax. 2011 irs tax forms available Income received by a resident of Iceland for services performed as an employee and member of the regular complement of a ship or aircraft operated in international traffic is exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available income tax. 2011 irs tax forms available India Income that residents of India receive for performing personal services in the United States during the tax year as independent contractors or self-employed individuals (independent personal services) is exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available income tax if the residents: Are present in the United States for no more than 89 days during the tax year, and Do not have a fixed base regularly available to them in the United States for performing the services. 2011 irs tax forms available If they have a fixed base available, they are taxed only on income attributable to the fixed base. 2011 irs tax forms available Income that residents of India receive for personal services performed in the United States as employees (dependent personal services) is exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available income tax if the residents meet three requirements. 2011 irs tax forms available They are present in the United States for no more than 183 days during the tax year. 2011 irs tax forms available The income is paid by, or on behalf of, an employer who is not a resident of the United States. 2011 irs tax forms available The income is not borne by a permanent establishment, fixed base, or trade or business the employer has in the United States. 2011 irs tax forms available The exemption does not apply to pay received by a resident of India for services performed as an employee aboard a ship or aircraft operated in international traffic by a U. 2011 irs tax forms available S. 2011 irs tax forms available enterprise. 2011 irs tax forms available These exemptions do not apply to directors' fees and similar payments received by an Indian resident as a member of the board of directors of a company that is a U. 2011 irs tax forms available S. 2011 irs tax forms available resident. 2011 irs tax forms available These exemptions do not apply to income residents of India receive as public entertainers (such as theater, motion picture, radio, or television artists, or musicians) or athletes if their net income is more than $1,500 during the tax year for their entertainment activities in the United States. 2011 irs tax forms available Regardless of this limit, the income of Indian entertainers and athletes is exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available tax if their visit to the United States is wholly or substantially supported from the public funds of the Indian Government, its political subdivisions, or local authorities. 2011 irs tax forms available Indonesia Income that residents of Indonesia receive for performing personal services as individual contractors or self-employed individuals (independent personal services) in the United States during the tax year is exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available income tax if the residents: Are present in the United States for no more than 119 days during any consecutive 12-month period, and Do not have a fixed base regularly available to them in the United States for performing the services. 2011 irs tax forms available If they have a fixed base available, they are taxed only on the income attributable to the fixed base. 2011 irs tax forms available Income that residents of Indonesia receive for personal services performed in the United States as employees (dependent personal services) is exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available income tax if the residents meet three requirements. 2011 irs tax forms available They are present in the United States no more than 119 days during any consecutive 12-month period. 2011 irs tax forms available The income is paid by, or on behalf of, an employer who is not a resident of the United States. 2011 irs tax forms available The income is not borne or reimbursed by a permanent establishment the employer has in the United States. 2011 irs tax forms available Pay received by an individual for services performed as an employee aboard a ship or aircraft operated by an Indonesian resident in international traffic is exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available tax if the individual is a member of the regular complement of the ship or aircraft. 2011 irs tax forms available These exemptions do not apply to income residents of Indonesia receive as public entertainers (such as theater, motion picture, radio, or television artists, or musicians) or athletes if their gross receipts, including reimbursed expenses, are more than $2,000 during any consecutive 12-month period. 2011 irs tax forms available Regardless of these limits, income of Indonesian entertainers and athletes is exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available tax if their visit to the United States is substantially supported or sponsored by the Indonesian Government and the Indonesian competent authority certifies that the entertainers or athletes qualify for this exemption. 2011 irs tax forms available Ireland Income that residents of Ireland receive for personal services as independent contractors or self-employed individuals (independent personal services) in the United States is exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available income tax if they do not have a fixed base regularly available to them in the United States for performing the services. 2011 irs tax forms available If they have a fixed base available in the United States, they are taxed on the income attributable to the fixed base. 2011 irs tax forms available Income that residents of Ireland receive for services performed in the United States as employees (dependent personal services) is exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available income tax if the residents meet the following requirements. 2011 irs tax forms available They are in the United States for no more than 183 days in any 12-month period beginning or ending in the tax year. 2011 irs tax forms available Their income is paid by, or on behalf of, an employer who is not a U. 2011 irs tax forms available S. 2011 irs tax forms available resident. 2011 irs tax forms available Their income is not borne by a permanent establishment or a fixed base that the employer has in the United States. 2011 irs tax forms available These exemptions do not apply to directors' fees and similar payments received by a resident of Ireland as a member of the board of directors of a company that is a resident of the United States. 2011 irs tax forms available However, amounts received for attending meetings in Ireland are not subject to U. 2011 irs tax forms available S. 2011 irs tax forms available income tax. 2011 irs tax forms available Income received by a resident of Ireland for services performed as an employee and member of the regular complement of a ship or aircraft operated in international traffic is exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available income tax. 2011 irs tax forms available These exemptions do not apply to public entertainers (such as theater, motion picture, radio, or television entertainers, musicians, and athletes) from Ireland who earn more than $20,000 in gross receipts, including reimbursed expenses, from their entertainment activities in the United States during the tax year. 2011 irs tax forms available Israel Income that residents of Israel receive for performing personal services as independent contractors or as self-employed individuals (independent personal services) in the United States during the tax year is exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available income tax if they are in the United States for no more than 182 days during the tax year. 2011 irs tax forms available Income that residents of Israel receive for labor or personal services performed in the United States as employees (dependent personal services), including income for services performed by an officer of a corporation or company, is exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available income tax if the residents meet four requirements. 2011 irs tax forms available They are in the United States for no more than 182 days during the tax year. 2011 irs tax forms available They are employees of a resident of, or a permanent establishment in, Israel. 2011 irs tax forms available Their income is not borne by a permanent establishment that the employer has in the United States. 2011 irs tax forms available Their income is subject to Israeli tax. 2011 irs tax forms available The exemption does not apply to pay received by an employee for labor or personal services performed as a member of the regular complement of a ship or an aircraft operated in international traffic by a U. 2011 irs tax forms available S. 2011 irs tax forms available resident. 2011 irs tax forms available These exemptions do not apply to income that residents of Israel receive as public entertainers (such as theater, motion picture, radio, or television artists, musicians, or athletes), if the gross amount of the income is more than $400 for each day they are in the United States performing the services. 2011 irs tax forms available Italy Income that residents of Italy receive for personal services as independent contractors or self-employed individuals (independent personal services) in the United States is exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available income tax if they do not have a fixed base regularly available to them in the United States for performing the services. 2011 irs tax forms available If they have a fixed base available in the United States, they are taxed on the income attributable to the fixed base. 2011 irs tax forms available Income that residents of Italy receive for labor or personal services performed in the United States as employees (dependent personal services) is exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available income tax if the following requirements are met. 2011 irs tax forms available The residents are in the United States for no more than 183 days during the tax year. 2011 irs tax forms available The income is paid by, or on behalf of, an employer who is not a resident of the United States. 2011 irs tax forms available The income is not borne by a permanent establishment or a fixed base that the employer has in the United States. 2011 irs tax forms available These exemptions do not apply to directors' fees and similar payments received by a resident of Italy for services performed in the United States as a member of the board of directors of a company that is a U. 2011 irs tax forms available S. 2011 irs tax forms available resident. 2011 irs tax forms available Pay received for employment regularly exercised aboard a ship or aircraft operated by a U. 2011 irs tax forms available S. 2011 irs tax forms available enterprise is subject to U. 2011 irs tax forms available S. 2011 irs tax forms available tax. 2011 irs tax forms available These exemptions do not apply to income residents of Italy receive as public entertainers (such as theater, motion picture, radio, or television artists, musicians, or athletes) if they are present in the United States for more than 90 days during the tax year or their gross receipts, including reimbursed expenses, are more than $20,000 during the tax year for their entertainment activities in the United States. 2011 irs tax forms available Jamaica Income that residents of Jamaica receive for the performance of personal services as independent contractors or self-employed individuals (independent personal services) in the United States during the tax year is exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available income tax if the residents: Are in the United States for no more than 89 days during the tax year, Do not have a fixed base regularly available to them in the United States for performing their services, and Earn net income for those services that is not more than $5,000 during the tax year if the income is from a U. 2011 irs tax forms available S. 2011 irs tax forms available contractor. 2011 irs tax forms available If they have a fixed base available in the United States, they are taxed only on the income that is attributable to the fixed base. 2011 irs tax forms available There is no dollar limit for condition (3) if the contractor is from a country other than the United States. 2011 irs tax forms available Income that residents of Jamaica receive for personal services performed in the United States as employees (dependent personal services) is exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available income tax if the residents meet four requirements. 2011 irs tax forms available They are in the United States for no more than 183 days during the tax year. 2011 irs tax forms available Their income is paid by or for an employer who is not a resident of the United States. 2011 irs tax forms available Their income is not borne by a permanent establishment or a fixed base that the employer has in the United States. 2011 irs tax forms available Their net income received for the services is not more than $5,000 during the tax year. 2011 irs tax forms available Pay received from employment as a member of the regular complement of a ship or an aircraft operated in international traffic by a Jamaican enterprise is exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available tax. 2011 irs tax forms available If the ship or aircraft is operated by a U. 2011 irs tax forms available S. 2011 irs tax forms available enterprise, the pay is subject to U. 2011 irs tax forms available S. 2011 irs tax forms available tax. 2011 irs tax forms available These exemptions do not apply to income that residents of Jamaica receive for performing services in the United States as entertainers, such as theater, motion picture, radio, or television artists, musicians, or athletes, if the gross receipts (excluding reimbursements for expenses) from the services are more than $400 a day or $5,000 for the tax year. 2011 irs tax forms available Directors' fees received by residents of Jamaica for services performed in the United States as members of boards of directors of U. 2011 irs tax forms available S. 2011 irs tax forms available corporations are exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available tax if the fees (excluding reimbursed expenses) are not more than $400 per day for each day the directors are present in the United States to perform the services. 2011 irs tax forms available Japan Income that residents of Japan receive for personal services as independent contractors or self-employed individuals is subject to the provisions of Article 7 (business profits) of the treaty. 2011 irs tax forms available Under that provision, business profits are exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available income tax unless the individual has a permanent establishment in the United States. 2011 irs tax forms available If they have a permanent establishment in the United States, they are taxed on the profits attributable to the permanent establishment. 2011 irs tax forms available Income that residents of Japan receive for services performed in the United States as employees (dependent personal services) is exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available income tax if the residents meet the following requirements. 2011 irs tax forms available They are in the United States for no more than 183 days in any 12-month period beginning or ending in the tax year. 2011 irs tax forms available Their income is paid by, or on behalf of, an employer who is not a U. 2011 irs tax forms available S. 2011 irs tax forms available resident. 2011 irs tax forms available Their income is not borne by a permanent establishment that the employer has in the United States. 2011 irs tax forms available The exemption does not apply to directors' fees and similar payments received by a resident of Japan for services performed as a member of the board of directors of a company that is a resident of the United States. 2011 irs tax forms available The exemption does not apply to a resident of Japan who performs services as an employee aboard a ship or an aircraft operated in international traffic by a U. 2011 irs tax forms available S. 2011 irs tax forms available resident. 2011 irs tax forms available Public entertainers (such as theater, motion picture, radio, or television artists, musicians, or athletes) from Japan who earn more than $10,000 in gross receipts, including reimbursed expenses, from their entertainment activities in the United States during the tax year are subject to U. 2011 irs tax forms available S. 2011 irs tax forms available tax. 2011 irs tax forms available Kazakhstan Income that residents of Kazakhstan receive for performing personal services as independent contractors or self-employed individuals (independent personal services) in the United States is exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available income tax if: The residents are in the United States for no more than 183 days in any consecutive 12-month period, and The income is not attributable to a fixed base in the United States which is regularly available to the residents. 2011 irs tax forms available If the residents have a fixed base available, they are taxed only on the income attributable to the fixed base. 2011 irs tax forms available Income that residents of Kazakhstan receive for employment in the United States (dependent personal services) is exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available income tax if the following three requirements are met. 2011 irs tax forms available The resident is in the United States for no more than 183 days in any 12-month period. 2011 irs tax forms available The income is paid by, or on behalf of, an employer who is not a resident of the United States. 2011 irs tax forms available The income is not borne by a permanent establishment or a fixed base that the employer has in the United States. 2011 irs tax forms available Income derived by a resident of Kazakhstan from employment as a member of the regular complement of a ship or aircraft operated in international traffic is exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available tax. 2011 irs tax forms available These exemptions do not apply to directors' fees and similar payments received by a resident of Kazakhstan as a member of the board of directors or similar body of a company that is a U. 2011 irs tax forms available S. 2011 irs tax forms available resident. 2011 irs tax forms available Korea, South Income that residents of South Korea receive for performing personal services as independent contractors or self-employed individuals (independent personal services) in the United States during the tax year is exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available tax if the residents: Are in the United States for no more than 182 days during the tax year, Earn income for those services that is not more than $3,000 during the tax year, and Do not maintain a fixed base in the United States for more than 182 days during the tax year. 2011 irs tax forms available If they maintain a fixed base in the United States for more than 182 days, they are taxed on the income attributable to the fixed base. 2011 irs tax forms available Income that residents of Korea receive for labor or personal services performed in the United States as employees (dependent personal services), including pay for services performed as an officer of a corporation, is exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available tax if the residents meet four requirements. 2011 irs tax forms available They are in the United States for no more than 182 days during the tax year. 2011 irs tax forms available They are employees of a resident of Korea or of a permanent establishment maintained in Korea. 2011 irs tax forms available Their compensation is not borne by a permanent establishment that the employer has in the United States. 2011 irs tax forms available Their income for those services is not more than $3,000. 2011 irs tax forms available Pay received by employees who are members of the regular complement of a ship or aircraft operated by a resident of Korea in international traffic is exempt. 2011 irs tax forms available Latvia Income that residents of Latvia receive for performing personal services as independent contractors or self-employed individuals (independent personal services) in the United States is exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available income tax if the residents: Are in the United States for no more than 183 days in any 12-month period beginning or ending in the tax year, and Do not have a fixed base regularly available to them in the United States for performing the services. 2011 irs tax forms available If they have a fixed base available, they are taxed only on the income attributable to the fixed base. 2011 irs tax forms available Income that residents of Latvia receive for services performed in the United States as employees (dependent personal services) is exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available income tax if the following requirements are met. 2011 irs tax forms available The resident is in the United States for no more than 183 days in any 12-month period beginning or ending in the tax year. 2011 irs tax forms available The income is paid by, or on behalf of, an employer who is not a U. 2011 irs tax forms available S. 2011 irs tax forms available resident. 2011 irs tax forms available The income is not borne by a permanent establishment or a fixed base that the employer has in the United States. 2011 irs tax forms available The exemption does not apply to pay received for employment as a member of the regular complement of a ship or an aircraft operated in international traffic by a U. 2011 irs tax forms available S. 2011 irs tax forms available enterprise. 2011 irs tax forms available The exemptions do not apply to directors' fees and similar payments received by a resident of Latvia as a member of the board of directors or similar body of a company that is a U. 2011 irs tax forms available S. 2011 irs tax forms available resident. 2011 irs tax forms available The exemptions do not apply to income residents of Latvia receive as public entertainers (such as theater, motion picture, radio, or television artists, or musicians) or sportsmen if their gross receipts, including reimbursed expenses, are more than $20,000 for their personal activities in the United States during the tax year. 2011 irs tax forms available Regardless of these limits, income of Latvian entertainers or athletes is exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available income tax if their visit to the United States is wholly or mainly supported by public funds of Latvia, its political subdivisions, or local authorities. 2011 irs tax forms available Lithuania Income that residents of Lithuania receive for performing personal services as independent contractors or self-employed individuals (independent personal services) in the United States is exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available income tax if the residents: Are in the United States for no more than 183 days in any 12-month period beginning or ending in the tax year, and Do not have a fixed base regularly available to them in the United States for performing the services. 2011 irs tax forms available If they have a fixed base available, they are taxed only on the income attributable to the fixed base. 2011 irs tax forms available Income that residents of Lithuania receive for services performed in the United States as employees (dependent personal services) is exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available income tax if the following requirements are met. 2011 irs tax forms available The resident is in the United States for no more than 183 days in any 12-month period beginning or ending in the tax year. 2011 irs tax forms available The income is paid by, or on behalf of, an employer who is not a U. 2011 irs tax forms available S. 2011 irs tax forms available resident. 2011 irs tax forms available The income is not borne by a permanent establishment or a fixed base that the employer has in the United States. 2011 irs tax forms available The exemption does not apply to pay received for employment as a member of the regular complement of a ship or an aircraft operated in international traffic by a U. 2011 irs tax forms available S. 2011 irs tax forms available enterprise. 2011 irs tax forms available The exemptions do not apply to directors' fees and similar payments received by a resident of Lithuania as a member of the board of directors or similar body of a company that is a U. 2011 irs tax forms available S. 2011 irs tax forms available resident. 2011 irs tax forms available The exemptions do not apply to income residents of Lithuania receive as public entertainers (such as theater, motion picture, radio, or television artists, or musicians) or sportsmen if their gross receipts, including reimbursed expenses, are more than $20,000 for their personal activities in the United States during the tax year. 2011 irs tax forms available Regardless of these limits, income of Lithuanian entertainers or athletes is exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available income tax if their visit to the United States is wholly or mainly supported by public funds of Lithuania, its political subdivisions, or local authorities. 2011 irs tax forms available Luxembourg Income that residents of Luxembourg receive for personal services as independent contractors or self-employed individuals (independent personal services) in the United States is exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available income tax if they do not have a fixed base regularly available to them in the United States for performing the services. 2011 irs tax forms available If they have a fixed base available in the United States, they are taxed on the income attributable to the fixed base. 2011 irs tax forms available Income that residents of Luxembourg receive for services performed in the United States as employees (dependent personal services) is exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available income tax if the residents meet the following requirements. 2011 irs tax forms available They are in the United States for no more than 183 days in any 12-month period beginning or ending in the tax year. 2011 irs tax forms available Their income is paid by, or on behalf of, an employer who is not a U. 2011 irs tax forms available S. 2011 irs tax forms available resident. 2011 irs tax forms available Their income is not borne by a permanent establishment or a fixed base that the employer has in the United States. 2011 irs tax forms available The exemption does not apply to pay received for employment exercised continuously or predominantly aboard a ship or aircraft operated in international traffic by a U. 2011 irs tax forms available S. 2011 irs tax forms available enterprise. 2011 irs tax forms available The exemptions do not apply to directors' fees and similar payments received by a resident of Luxembourg for services performed in the United States as a member of the board of directors of a company that is a resident of the United States. 2011 irs tax forms available The exemptions do not apply to public entertainers (such as theater, motion picture, radio, or television artists, musicians, or athletes) from Luxembourg who earn more than $10,000 in gross receipts, including reimbursed expenses, from their entertainment activities in the United States during the tax year. 2011 irs tax forms available Malta Income that residents of Malta receive for personal services as independent contractors or self-employed individuals is subject to the provisions of Article 7 (Business Profits) of the treaty. 2011 irs tax forms available Under that provision, business profits are exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available income tax unless the individual has a permanent establishment in the United States. 2011 irs tax forms available If they have a permanent establishment in the United States, they are taxed on the profits attributable to the permanent establishment. 2011 irs tax forms available Income that residents of Malta receive for services performed in the United States as employees (dependent personal services) is exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available income tax if the residents meet the following requirements. 2011 irs tax forms available They are in the United States for no more than 183 days in any 12-month period beginning or ending in the tax year. 2011 irs tax forms available Their income is paid by, or on behalf of, an employer who is not a U. 2011 irs tax forms available S. 2011 irs tax forms available resident. 2011 irs tax forms available Their income is not borne by a permanent establishment that the employer has in the United States. 2011 irs tax forms available The exemption does not apply to directors' fees and similar payments received by a resident of Malta for services performed in the United States as a member of the board of directors of a company that is a resident of the United States. 2011 irs tax forms available Public entertainers (such as theater, motion picture, radio, or television artists, musicians, or athletes) from Malta who earn more than $20,000 in gross receipts, including reimbursed expenses, from their entertainment activities in the United States during the tax year are subject to U. 2011 irs tax forms available S. 2011 irs tax forms available tax. 2011 irs tax forms available Income received by a resident of Malta for employment aboard a ship or an aircraft operated in international traffic is exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available income tax if the individual is a member of the regular complement of the ship or aircraft. 2011 irs tax forms available Mexico Income that residents of Mexico receive for performing personal services as independent contractors or self-employed individuals (independent personal services) in the United States is exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available income tax if the residents: Are in the United States for no more than 182 days in a 12-month period, and Do not have a fixed base that they regularly use for performing the services. 2011 irs tax forms available If they have a fixed base available, they are taxed only on income attributable to the fixed base. 2011 irs tax forms available Income that residents of Mexico receive for employment in the United States (dependent personal services) is exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available tax if the following three requirements are met. 2011 irs tax forms available The resident is present in the United States for no more than 183 days in a 12-month period. 2011 irs tax forms available The income is paid by, or on behalf of, an employer who is not a resident of the United States. 2011 irs tax forms available The income is not borne by a permanent establishment or fixed base that the employer has in the United States. 2011 irs tax forms available These exemptions do not apply to directors' fees and similar payments received by a resident of Mexico for services performed outside Mexico as a director or overseer of a company that is a U. 2011 irs tax forms available S. 2011 irs tax forms available resident. 2011 irs tax forms available These exemptions do not apply to income residents of Mexico receive as public entertainers (such as theater, motion picture, radio, or television artists, or musicians) or athletes if the income, including reimbursed expenses, is more than $3,000 during the tax year for their entertainment activities in the United States. 2011 irs tax forms available This includes income from activities performed in the United States relating to the entertainer or athlete's reputation, such as endorsements of commercial products. 2011 irs tax forms available Regardless of this limit, the income of Mexican entertainers and athletes is exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available tax if their visit to the United States is substantially supported by public funds of Mexico, its political subdivisions, or local authorities. 2011 irs tax forms available Morocco Income that residents of Morocco receive for performing personal services as independent contractors or as self-employed persons (independent personal services) in the United States during the tax year is exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available income tax if the residents: Are in the United States for no more than 182 days during the tax year, Do not maintain a fixed base in the United States for more than 89 days during the tax year, and Earn total income for those services that is not more than $5,000. 2011 irs tax forms available If they have a fixed base in the United States for more than 89 days, they are taxed only on the income attributable to the fixed base. 2011 irs tax forms available Income that residents of Morocco receive for labor or personal services performed in the United States as employees (dependent personal services) is exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available income tax if the residents meet three requirements. 2011 irs tax forms available They are in the United States for less than 183 days during the tax year. 2011 irs tax forms available They are employees of a resident of Morocco or of a permanent establishment of a resident of a country other than Morocco if the permanent establishment is located in Morocco. 2011 irs tax forms available Their income is not borne by a permanent establishment that the employer has in the United States. 2011 irs tax forms available Compensation received for services performed by a member of the board of directors of a corporation does not qualify for this exemption. 2011 irs tax forms available Income received by an individual for performing labor or personal services as an employee aboard a ship or an aircraft operated in international traffic by a Moroccan resident is exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available income tax if the individual is a member of the regular complement of the ship or aircraft. 2011 irs tax forms available These exemptions do not apply to income received for services performed in the United States by professional entertainers, including theater, film, radio, and television performers, musicians, and athletes, unless the services are performed by, or for the account of, a Moroccan nonprofit organization. 2011 irs tax forms available Netherlands Income that residents of the Netherlands receive for performing personal services as independent contractors or self-employed individuals (independent personal services) in the United States is exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available income tax if the income is not attributable to a fixed base in the United States that is regularly available for performing the services. 2011 irs tax forms available Income that residents of the Netherlands receive for employment in the United States (dependent personal services) is exempt from U. 2011 irs tax forms available S. 2011 irs tax forms available income tax if the following three requirements are met. 2011 irs tax forms available The resident is in the United States for no more than 183 days during the tax year. 2011 irs tax forms available The income is paid by, or on behalf of, an employer who is not a U. 2011 irs tax forms available S. 2011 irs tax forms available resident. 2011 irs tax forms available The income is not borne by a permanent establishment or fixed base the employer has in the United States. 2011 irs tax forms available Income received by a Netherlands resident for employment as a member of the regular complement of a ship or
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Report Phishing

The IRS does not initiate contact with taxpayers by email to request personal or financial information. This includes any type of electronic communication, such as text messages and social media channels.

What is phishing?
Phishing is a scam typically carried out by unsolicited email and/or websites that pose as legitimate sites and lure unsuspecting victims to provide personal and financial information.

All unsolicited email claiming to be from either the IRS or any other IRS-related components such as the Office of Professional Responsibility or EFTPS, should be reported to phishing@irs.gov.

However, if you have experienced monetary losses due to an IRS-related incident please file a complaint with the Federal Trade Commission through their Complaint Assistant to make that information available to investigators.

ALERT: IRS Warns of Phone Scam

What to do if you receive a suspicious IRS-related communication

If

Then

You receive an email claiming to be from the IRS that contains a request for personal information …
  1. Do not reply.
  2. Do not open any attachments. Attachments may contain malicious code that will infect your computer.
  3. Do not click on any links.
    If you clicked on links in a suspicious email or phishing website and entered confidential information, visit our identity protection page.
  4. Forward the email as-is, to us at phishing@irs.gov.
  5. After you forward the email and/or header information to us, delete the original email message you received.

Note:
Please forward the full original email to us at phishing@irs.gov. Do not forward scanned images of printed emails as that strips the email of valuable information only available in the electronic copy.

You discover a website on the Internet that claims to be the IRS but you suspect it is bogus … ... send the URL of the suspicious site to phishing@irs.gov. Please add in the subject line of the email, 'Suspicious website'.
You receive a phone call or paper letter via mail from an individual claiming to be the IRS but you suspect they are not an IRS employee …

Phone call:

  1. Ask for a call back number and employee badge number.
  2. Contact the IRS to determine if the caller is an IRS employee with a legitimate need to contact you.
  3. If you determine the person calling you is an IRS employee with a legitimate need to contact you, call them back.

Letter or notice via paper mail:

  1. Contact the IRS to determine if the mail is a legitimate IRS letter.
  2. If it is a legitimate IRS letter, reply if needed.

Report the incident to the Treasury Inspector General for Tax Administration if the caller or party that sent the paper letter is not legitimate.

You receive an unsolicited e-mail or fax, involving a stock or share purchase 

... and you are a U.S. citizen located in the United States or its territories or a U.S. citizen living abroad.

  1. Complete the appropriate complaint form with the U.S. Securities and Exchange Commission.
  2. Forward email to phishing@irs.gov.
    Please add in the subject line of the email, 'Stock'.
  3. If you are a victim of monetary or identity theft, you may submit a complaint through the FTC Complaint Assistant.  

... and you are not a U.S. citizen and reside outside the United States.

  1. Complete the appropriate complaint form with the U.S. Securities and Exchange Commission.
  2. Contact your securities regulator and file a complaint.
  3. Forward email to phishing@irs.gov.
    Please add in the subject line of the e-mail, 'Stock'.
  4. If you are a victim of monetary or identity theft, you may report your complaint to econsumer.gov.
You receive an unsolicited fax (such as Form W8-BEN) claiming to be from the IRS, requesting personal information … Contact the IRS to determine if the fax is from the IRS.
  • If you learn the fax is not from the IRS, please send us the information via email at phishing@irs.gov. In the subject line of the email, please type the word ‘FAX’.
You receive a text message or Short Message Service (SMS) message claiming to be from the IRS …
  1. Do not reply.
  2. Do not open any attachments. Attachments may contain malicious code that will infect your computer or mobile phone.
  3. Do not click on any links. If you clicked on links in a suspicious SMS and entered confidential information, visit our identity protection page.
  4. Forward the text as-is, to us at 202-552-1226. Note: Standard text messaging rates apply.
  5. If possible, in a separate text, forward the originating number to us at 202-552-1226
  6. After you forward the text, please delete the original text.

You have a tax-related question ...

Note: Do not submit tax-related questions to phishing@irs.gov.

If you have a tax-related question, unrelated to phishing or identity theft, please contact the IRS.

How to identify phishing email scams claiming to be from the IRS and bogus IRS websites


The IRS does not initiate contact with taxpayers by email to request personal or financial information. This includes any type of electronic communication, such as text messages and social media channels.

The IRS does not:

  • request detailed personal information through e-mail.
  • send any communication requesting your PIN numbers, passwords or similar access information for credit cards, banks or other financial accounts.

What to do if you receive a suspicious email message that does not claim to be from the IRS

 If

 Then

You receive a suspicious phishing email not claiming to be from the IRS ... Forward the email as-is to reportphishing@antiphishing.org.
You receive an email you suspect contains malicious code or a malicious attachment and you HAVE clicked on the link or downloaded the attachment … Visit OnGuardOnline.gov to learn what to do if you suspect you have malware on your computer.
You receive an email you suspect contains malicious code or a malicious attachment and you HAVE NOT clicked on the link or downloaded the attachment … Forward the email to your Internet Service Provider’s abuse department and/or to spam@uce.gov.

 

 

Page Last Reviewed or Updated: 26-Mar-2014

Phishing-Malware

See YouTube for more ID theft videos.

 

The 2011 Irs Tax Forms Available

2011 irs tax forms available 8. 2011 irs tax forms available   Gains and Losses Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: Sales and ExchangesDetermining Gain or Loss Like-Kind Exchanges Transfer to Spouse Ordinary or Capital Gain or LossCapital Assets Noncapital Assets Hedging (Commodity Futures) Livestock Converted Wetland and Highly Erodible Cropland Timber Sale of a Farm Foreclosure or Repossession Abandonment Introduction This chapter explains how to figure, and report on your tax return, your gain or loss on the disposition of your property or debt and whether such gain or loss is ordinary or capital. 2011 irs tax forms available Ordinary gain is taxed at the same rates as wages and interest income while capital gain is generally taxed at lower rates. 2011 irs tax forms available Dispositions discussed in this chapter include sales, exchanges, foreclosures, repossessions, canceled debts, hedging transactions, and elections to treat cutting of timber as a sale or exchange. 2011 irs tax forms available Topics - This chapter discusses: Sales and exchanges Ordinary or capital gain or loss Useful Items - You may want to see: Publication 334 Tax Guide for Small Business 523 Selling Your Home 544 Sales and Other Dispositions of Assets 550 Investment Income and Expenses 908 Bankruptcy Tax Guide Form (and Instructions) 982 Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment) Sch D (Form 1040) Capital Gains and Losses Sch F (Form 1040) Profit or Loss From Farming 1099-A Acquisition or Abandonment of Secured Property 1099-C Cancellation of Debt 4797 Sales of Business Property 8949 Sales and Other Dispositions of Capital Assets See chapter 16 for information about getting publications and forms. 2011 irs tax forms available Sales and Exchanges If you sell, exchange, or otherwise dispose of your property, you usually have a gain or a loss. 2011 irs tax forms available This section explains certain rules for determining whether any gain you have is taxable, and whether any loss you have is deductible. 2011 irs tax forms available A sale is a transfer of property for money or a mortgage, note, or other promise to pay money. 2011 irs tax forms available An exchange is a transfer of property for other property or services. 2011 irs tax forms available Determining Gain or Loss You usually realize a gain or loss when you sell or exchange property. 2011 irs tax forms available If the amount you realize from a sale or exchange of property is more than its adjusted basis, you will have a gain. 2011 irs tax forms available If the adjusted basis of the property is more than the amount you realize, you will have a loss. 2011 irs tax forms available Basis and adjusted basis. 2011 irs tax forms available   The basis of property you buy is usually its cost. 2011 irs tax forms available The adjusted basis of property is basis plus certain additions and minus certain deductions. 2011 irs tax forms available See chapter 6 for more information about basis and adjusted basis. 2011 irs tax forms available Amount realized. 2011 irs tax forms available   The amount you realize from a sale or exchange is the total of all money you receive plus the fair market value (FMV) (defined in chapter 6) of all property or services you receive. 2011 irs tax forms available The amount you realize also includes any of your liabilities assumed by the buyer and any liabilities to which the property you transferred is subject, such as real estate taxes or a mortgage. 2011 irs tax forms available   If the liabilities relate to an exchange of multiple properties, see Multiple Property Exchanges in chapter 1 of Publication 544. 2011 irs tax forms available Amount recognized. 2011 irs tax forms available   Your gain or loss realized from a sale or exchange of certain property is usually a recognized gain or loss for tax purposes. 2011 irs tax forms available A recognized gain is a gain you must include in gross income and report on your income tax return. 2011 irs tax forms available A recognized loss is a loss you deduct from gross income. 2011 irs tax forms available However, your gain or loss realized from the exchange of certain property may not be recognized for tax purposes. 2011 irs tax forms available See Like-Kind Exchanges next. 2011 irs tax forms available Also, a loss from the disposition of property held for personal use is not deductible. 2011 irs tax forms available Like-Kind Exchanges Certain exchanges of property are not taxable. 2011 irs tax forms available This means any gain from the exchange is not recognized, and any loss cannot be deducted. 2011 irs tax forms available Your gain or loss will not be recognized until you sell or otherwise dispose of the property you receive. 2011 irs tax forms available The exchange of property for the same kind of property is the most common type of nontaxable exchange. 2011 irs tax forms available To qualify for treatment as a like-kind exchange, the property traded and the property received must be both of the following. 2011 irs tax forms available Qualifying property. 2011 irs tax forms available Like-kind property. 2011 irs tax forms available These two requirements are discussed later. 2011 irs tax forms available Multiple-party transactions. 2011 irs tax forms available   The like-kind exchange rules also apply to property exchanges that involve three and four-party transactions. 2011 irs tax forms available Any part of these multiple-party transactions can qualify as a like-kind exchange if it meets all the requirements described in this section. 2011 irs tax forms available Receipt of title from third party. 2011 irs tax forms available   If you receive property in a like-kind exchange and the other party who transfers the property to you does not give you the title, but a third party does, you can still treat this transaction as a like-kind exchange if it meets all the requirements. 2011 irs tax forms available Basis of property received. 2011 irs tax forms available   If you receive property in a like-kind exchange, the basis of the property will be the same as the basis of the property you gave up. 2011 irs tax forms available See chapter 6 for more information. 2011 irs tax forms available Money paid. 2011 irs tax forms available   If, in addition to giving up like-kind property, you pay money in a like-kind exchange, you still have no recognized gain or loss. 2011 irs tax forms available The basis of the property received is the basis of the property given up, increased by the money paid. 2011 irs tax forms available Example. 2011 irs tax forms available You traded an old tractor with an adjusted basis of $15,000 for a new one. 2011 irs tax forms available The new tractor costs $300,000. 2011 irs tax forms available You were allowed $80,000 for the old tractor and paid $220,000 cash. 2011 irs tax forms available You have no recognized gain or loss on the transaction regardless of the adjusted basis of your old tractor and the basis of the new tractor is $235,000, the adjusted basis of the old tractor plus the cash paid ($15,000 + $220,000). 2011 irs tax forms available If you had sold the old tractor to a third party for $80,000 and bought a new one, you would have a recognized gain or loss on the sale of your old tractor equal to the difference between the amount realized and the adjusted basis of the old tractor. 2011 irs tax forms available In this case, the taxable gain would be $65,000 ($80,000 − $15,000) and the basis of the new tractor would be $300,000. 2011 irs tax forms available Reporting the exchange. 2011 irs tax forms available   Report the exchange of like-kind property, even though no gain or loss is recognized, on Form 8824, Like-Kind Exchanges. 2011 irs tax forms available The Instructions for Form 8824 explain how to report the details of the exchange. 2011 irs tax forms available   If you have any recognized gain because you received money or unlike property, report it on Schedule D (Form 1040) or Form 4797, whichever applies. 2011 irs tax forms available You may also have to report the recognized gain as ordinary income because of depreciation recapture on Form 4797. 2011 irs tax forms available See chapter 9 for more information. 2011 irs tax forms available Qualifying property. 2011 irs tax forms available   In a like-kind exchange, both the property you give up and the property you receive must be held by you for investment or for productive use in your trade or business. 2011 irs tax forms available Machinery, buildings, land, trucks, breeding livestock, rental houses, and certain mutual ditch, reservoir, or irrigation company stock are examples of property that may qualify. 2011 irs tax forms available Nonqualifying property. 2011 irs tax forms available   The rules for like-kind exchanges do not apply to exchanges of the following property. 2011 irs tax forms available Property you use for personal purposes, such as your home and family car. 2011 irs tax forms available Stock in trade or other property held primarily for sale, such as crops and produce. 2011 irs tax forms available Stocks, bonds, or notes. 2011 irs tax forms available However, see Qualifying property above. 2011 irs tax forms available Other securities or evidences of indebtedness, such as accounts receivable. 2011 irs tax forms available Partnership interests. 2011 irs tax forms available However, you may have a nontaxable exchange under other rules. 2011 irs tax forms available See Other Nontaxable Exchanges in chapter 1 of Publication 544. 2011 irs tax forms available Like-kind property. 2011 irs tax forms available   To qualify as a nontaxable exchange, the properties exchanged must be of like kind. 2011 irs tax forms available Like-kind properties are properties of the same nature or character, even if they differ in grade or quality. 2011 irs tax forms available Generally, real property exchanged for real property qualifies as an exchange of like-kind property. 2011 irs tax forms available For example, an exchange of city property for farm property or improved property for unimproved property is a like-kind exchange. 2011 irs tax forms available   An exchange of a tractor for a new tractor is an exchange of like-kind property, and so is an exchange of timber land for crop acreage. 2011 irs tax forms available An exchange of a tractor for acreage, however, is not an exchange of like-kind property. 2011 irs tax forms available The exchange of livestock of one sex for livestock of the other sex is not a like-kind exchange. 2011 irs tax forms available For example, the exchange of a bull for a cow is not a like-kind exchange. 2011 irs tax forms available An exchange of the assets of a business for the assets of a similar business cannot be treated as an exchange of one property for another property. 2011 irs tax forms available    Note. 2011 irs tax forms available Whether you engaged in a like-kind exchange depends on an analysis of each asset involved in the exchange. 2011 irs tax forms available Personal property. 2011 irs tax forms available   Depreciable tangible personal property can be either like kind or like class to qualify for nontaxable exchange treatment. 2011 irs tax forms available Like-class properties are depreciable tangible personal properties within the same General Asset Class or Product Class. 2011 irs tax forms available Property classified in any General Asset Class may not be classified within a Product Class. 2011 irs tax forms available Assets that are not in the same class will qualify as like-kind property if they are of the same nature or character. 2011 irs tax forms available General Asset Classes. 2011 irs tax forms available   General Asset Classes describe the types of property frequently used in many businesses. 2011 irs tax forms available They include, but are not limited to, the following property. 2011 irs tax forms available Office furniture, fixtures, and equipment (asset class 00. 2011 irs tax forms available 11). 2011 irs tax forms available Information systems, such as computers and peripheral equipment (asset class 00. 2011 irs tax forms available 12). 2011 irs tax forms available Data handling equipment except computers (asset class 00. 2011 irs tax forms available 13). 2011 irs tax forms available Automobiles and taxis (asset class 00. 2011 irs tax forms available 22). 2011 irs tax forms available Light general purpose trucks (asset class 00. 2011 irs tax forms available 241). 2011 irs tax forms available Heavy general purpose trucks (asset class 00. 2011 irs tax forms available 242). 2011 irs tax forms available Tractor units for use over-the-road (asset class 00. 2011 irs tax forms available 26). 2011 irs tax forms available Trailers and trailer-mounted containers (asset class 00. 2011 irs tax forms available 27). 2011 irs tax forms available Industrial steam and electric generation and/or distribution systems (asset class 00. 2011 irs tax forms available 4). 2011 irs tax forms available Product Classes. 2011 irs tax forms available   Product Classes include property listed in a 6-digit product class in sectors 31 through 33 of the North American Industry Classification System (NAICS) of the Executive Office of the President, Office of Management and Budget, United States, (NAICS Manual). 2011 irs tax forms available The latest version of the manual can be accessed at www. 2011 irs tax forms available census. 2011 irs tax forms available gov/eos/www/naics/. 2011 irs tax forms available Copies of the printed manual may be purchased from the National Technical Information Service (NTIS) at  www. 2011 irs tax forms available ntis. 2011 irs tax forms available gov/products/naics. 2011 irs tax forms available aspx or by calling 1-800-553-NTIS (1-800-553-6847) or (703) 605-6000. 2011 irs tax forms available A CD-ROM version with search and retrieval software is also available from NTIS. 2011 irs tax forms available    NAICS class 333111, Farm Machinery and Equipment Manufacturing, includes most machinery and equipment used in a farming business. 2011 irs tax forms available Partially nontaxable exchange. 2011 irs tax forms available   If, in addition to like-kind property, you receive money or unlike property in an exchange on which you realize gain, you have a partially nontaxable exchange. 2011 irs tax forms available You are taxed on the gain you realize, but only to the extent of the money and the FMV of the unlike property you receive. 2011 irs tax forms available A loss is not deductible. 2011 irs tax forms available Example 1. 2011 irs tax forms available You trade farmland that cost $30,000 for $10,000 cash and other land to be used in farming with a FMV of $50,000. 2011 irs tax forms available You have a realized gain of $30,000 ($50,000 FMV of new land + $10,000 cash − $30,000 basis of old farmland = $30,000 realized gain). 2011 irs tax forms available However, only $10,000, the cash received, is recognized (included in income). 2011 irs tax forms available Example 2. 2011 irs tax forms available Assume the same facts as in Example 1, except that, instead of money, you received a tractor with a FMV of $10,000. 2011 irs tax forms available Your recognized gain is still limited to $10,000, the value of the tractor (the unlike property). 2011 irs tax forms available Example 3. 2011 irs tax forms available Assume in Example 1 that the FMV of the land you received was only $15,000. 2011 irs tax forms available Your $5,000 loss is not recognized. 2011 irs tax forms available Unlike property given up. 2011 irs tax forms available   If, in addition to like-kind property, you give up unlike property, you must recognize gain or loss on the unlike property you give up. 2011 irs tax forms available The gain or loss is the difference between the FMV of the unlike property and the adjusted basis of the unlike property. 2011 irs tax forms available Like-kind exchanges between related persons. 2011 irs tax forms available   Special rules apply to like-kind exchanges between related persons. 2011 irs tax forms available These rules affect both direct and indirect exchanges. 2011 irs tax forms available Under these rules, if either person disposes of the property within 2 years after the exchange, the exchange is disqualified from nonrecognition treatment. 2011 irs tax forms available The gain or loss on the original exchange must be recognized as of the date of the later disposition. 2011 irs tax forms available The 2-year holding period begins on the date of the last transfer of property that was part of the like-kind exchange. 2011 irs tax forms available Related persons. 2011 irs tax forms available   Under these rules, related persons include, for example, you and a member of your family (spouse, brother, sister, parent, child, etc. 2011 irs tax forms available ), you and a corporation in which you have more than 50% ownership, you and a partnership in which you directly or indirectly own more than a 50% interest of the capital or profits, and two partnerships in which you directly or indirectly own more than 50% of the capital interests or profits. 2011 irs tax forms available   For the complete list of related persons, see Related persons in chapter 2 of Publication 544. 2011 irs tax forms available Example. 2011 irs tax forms available You used a grey pickup truck in your farming business. 2011 irs tax forms available Your sister used a red pickup truck in her landscaping business. 2011 irs tax forms available In December 2012, you exchanged your grey pickup truck, plus $200, for your sister's red pickup truck. 2011 irs tax forms available At that time, the FMV of the grey pickup truck was $7,000 and its adjusted basis was $6,000. 2011 irs tax forms available The FMV of the red pickup truck was $7,200 and its adjusted basis was $1,000. 2011 irs tax forms available You realized a gain of $1,000 (the $7,200 FMV of the red pickup truck, minus the grey pickup truck's $6,000 adjusted basis, minus the $200 you paid). 2011 irs tax forms available Your sister realized a gain of $6,200 (the $7,000 FMV of the grey pickup truck plus the $200 you paid, minus the $1,000 adjusted basis of the red pickup truck). 2011 irs tax forms available However, because this was a like-kind exchange, you recognized no gain. 2011 irs tax forms available Your basis in the red pickup truck was $6,200 (the $6,000 adjusted basis of the grey pickup truck plus the $200 you paid). 2011 irs tax forms available She recognized gain only to the extent of the money she received, $200. 2011 irs tax forms available Her basis in the grey pickup truck was $1,000 (the $1,000 adjusted basis of the red pickup truck minus the $200 received, plus the $200 gain recognized). 2011 irs tax forms available In 2013, you sold the red pickup truck to a third party for $7,000. 2011 irs tax forms available Because you sold it within 2 years after the exchange, the exchange is disqualified from nonrecognition treatment. 2011 irs tax forms available On your tax return for 2013, you must report your $1,000 gain on the 2012 exchange. 2011 irs tax forms available You also report a loss on the sale as $200 (the adjusted basis of the red pickup truck, $7,200 (its $6,200 basis plus the $1,000 gain recognized), minus the $7,000 realized from the sale). 2011 irs tax forms available In addition, your sister must report on her tax return for 2013 the $6,000 balance of her gain on the 2012 exchange. 2011 irs tax forms available Her adjusted basis in the grey pickup truck is increased to $7,000 (its $1,000 basis plus the $6,000 gain recognized). 2011 irs tax forms available Exceptions to the rules for related persons. 2011 irs tax forms available   The following property dispositions are excluded from these rules. 2011 irs tax forms available Dispositions due to the death of either related person. 2011 irs tax forms available Involuntary conversions. 2011 irs tax forms available Dispositions where it is established to the satisfaction of the IRS that neither the exchange nor the disposition has, as a main purpose, the avoidance of federal income tax. 2011 irs tax forms available Multiple property exchanges. 2011 irs tax forms available   Under the like-kind exchange rules, you must generally make a property-by-property comparison to figure your recognized gain and the basis of the property you receive in the exchange. 2011 irs tax forms available However, for exchanges of multiple properties, you do not make a property-by-property comparison if you do either of the following. 2011 irs tax forms available Transfer and receive properties in two or more exchange groups. 2011 irs tax forms available Transfer or receive more than one property within a single exchange group. 2011 irs tax forms available   For more information, see Multiple Property Exchanges in chapter 1 of Publication 544. 2011 irs tax forms available Deferred exchange. 2011 irs tax forms available   A deferred exchange for like-kind property may qualify for nonrecognition of gain or loss. 2011 irs tax forms available A deferred exchange is an exchange in which you transfer property you use in business or hold for investment and later receive like-kind property you will use in business or hold for investment. 2011 irs tax forms available The property you receive is replacement property. 2011 irs tax forms available The transaction must be an exchange of property for property rather than a transfer of property for money used to buy replacement property. 2011 irs tax forms available In addition, the replacement property will not be treated as like-kind property unless certain identification and receipt requirements are met. 2011 irs tax forms available   For more information see Deferred Exchanges in chapter 1 of Publication 544. 2011 irs tax forms available Transfer to Spouse No gain or loss is recognized on a transfer of property from an individual to (or in trust for the benefit of) a spouse, or a former spouse if incident to divorce. 2011 irs tax forms available This rule does not apply if the recipient is a nonresident alien. 2011 irs tax forms available Nor does this rule apply to a transfer in trust to the extent the liabilities assumed and the liabilities on the property are more than the property's adjusted basis. 2011 irs tax forms available Any transfer of property to a spouse or former spouse on which gain or loss is not recognized is not considered a sale or exchange. 2011 irs tax forms available The recipient's basis in the property will be the same as the adjusted basis of the giver immediately before the transfer. 2011 irs tax forms available This carryover basis rule applies whether the adjusted basis of the transferred property is less than, equal to, or greater than either its FMV at the time of transfer or any consideration paid by the recipient. 2011 irs tax forms available This rule applies for determining loss as well as gain. 2011 irs tax forms available Any gain recognized on a transfer in trust increases the basis. 2011 irs tax forms available For more information on transfers of property incident to divorce, see Property Settlements in Publication 504, Divorced or Separated Individuals. 2011 irs tax forms available Ordinary or Capital Gain or Loss Generally, you will have a capital gain or loss if you sell or exchange a capital asset (defined below). 2011 irs tax forms available You may also have a capital gain if your section 1231 transactions result in a net gain. 2011 irs tax forms available See Section 1231 Gains and Losses in  chapter 9. 2011 irs tax forms available To figure your net capital gain or loss, you must classify your gains and losses as either ordinary or capital (and your capital gains or losses as either short-term or long-term). 2011 irs tax forms available Your net capital gains may be taxed at a lower tax rate than ordinary income. 2011 irs tax forms available See Capital Gains Tax Rates , later. 2011 irs tax forms available Your deduction for a net capital loss may be limited. 2011 irs tax forms available See Treatment of Capital Losses , later. 2011 irs tax forms available Capital Assets Almost everything you own and use for personal purposes or investment is a capital asset. 2011 irs tax forms available The following items are examples of capital assets. 2011 irs tax forms available A home owned and occupied by you and your family. 2011 irs tax forms available Household furnishings. 2011 irs tax forms available A car used for pleasure. 2011 irs tax forms available If your car is used both for pleasure and for farm business, it is partly a capital asset and partly a noncapital asset, defined later. 2011 irs tax forms available Stocks and bonds. 2011 irs tax forms available However, there are special rules for gains on qualified small business stock. 2011 irs tax forms available For more information on this subject, see Gains on Qualified Small Business Stock and Losses on Section 1244 (Small Business) Stock in chapter 4 of Publication 550. 2011 irs tax forms available Personal-use property. 2011 irs tax forms available   Gain from a sale or exchange of personal-use property is a capital gain and is taxable. 2011 irs tax forms available Loss from the sale or exchange of personal-use property is not deductible. 2011 irs tax forms available You can deduct a loss relating to personal-use property only if it results from a casualty or theft. 2011 irs tax forms available For information on casualties and thefts, see chapter 11. 2011 irs tax forms available Long and Short Term Where you report a capital gain or loss depends on how long you own the asset before you sell or exchange it. 2011 irs tax forms available The time you own an asset before disposing of it is the holding period. 2011 irs tax forms available If you hold a capital asset 1 year or less, the gain or loss resulting from its disposition is short term. 2011 irs tax forms available Report it in Part I of Schedule D (Form 1040). 2011 irs tax forms available If you hold a capital asset longer than 1 year, the gain or loss resulting from its disposition is long term. 2011 irs tax forms available Report it in Part II of Schedule D (Form 1040). 2011 irs tax forms available Holding period. 2011 irs tax forms available   To figure if you held property longer than 1 year, start counting on the day after the day you acquired the property. 2011 irs tax forms available The day you disposed of the property is part of your holding period. 2011 irs tax forms available Example. 2011 irs tax forms available If you bought an asset on June 19, 2012, you should start counting on June 20, 2012. 2011 irs tax forms available If you sold the asset on June 19, 2013, your holding period is not longer than 1 year, but if you sold it on June 20, 2013, your holding period is longer than 1 year. 2011 irs tax forms available Inherited property. 2011 irs tax forms available   If you inherit property, you are considered to have held the property longer than 1 year, regardless of how long you actually held it. 2011 irs tax forms available This rule does not apply to livestock used in a farm business. 2011 irs tax forms available See Holding period under Livestock , later. 2011 irs tax forms available Nonbusiness bad debt. 2011 irs tax forms available   A nonbusiness bad debt is a short-term capital loss, deductible in the year the debt becomes worthless. 2011 irs tax forms available See chapter 4 of Publication 550. 2011 irs tax forms available Nontaxable exchange. 2011 irs tax forms available   If you acquire an asset in exchange for another asset and your basis for the new asset is figured, in whole or in part, by using your basis in the old property, the holding period of the new property includes the holding period of the old property. 2011 irs tax forms available That is, it begins on the same day as your holding period for the old property. 2011 irs tax forms available Gift. 2011 irs tax forms available   If you receive a gift of property and your basis in it is figured using the donor's basis, your holding period includes the donor's holding period. 2011 irs tax forms available Real property. 2011 irs tax forms available   To figure how long you held real property, start counting on the day after you received title to it or, if earlier, on the day after you took possession of it and assumed the burdens and privileges of ownership. 2011 irs tax forms available   However, taking possession of real property under an option agreement is not enough to start the holding period. 2011 irs tax forms available The holding period cannot start until there is an actual contract of sale. 2011 irs tax forms available The holding period of the seller cannot end before that time. 2011 irs tax forms available Figuring Net Gain or Loss The totals for short-term capital gains and losses and the totals for long-term capital gains and losses must be figured separately. 2011 irs tax forms available Net short-term capital gain or loss. 2011 irs tax forms available   Combine your short-term capital gains and losses. 2011 irs tax forms available Do this by adding all of your short-term capital gains. 2011 irs tax forms available Then add all of your short-term capital losses. 2011 irs tax forms available Subtract the lesser total from the greater. 2011 irs tax forms available The difference is your net short-term capital gain or loss. 2011 irs tax forms available Net long-term capital gain or loss. 2011 irs tax forms available   Follow the same steps to combine your long-term capital gains and losses. 2011 irs tax forms available The result is your net long-term capital gain or loss. 2011 irs tax forms available Net gain. 2011 irs tax forms available   If the total of your capital gains is more than the total of your capital losses, the difference is taxable. 2011 irs tax forms available However, part of your gain (but not more than your net capital gain) may be taxed at a lower rate than the rate of tax on your ordinary income. 2011 irs tax forms available See Capital Gains Tax Rates , later. 2011 irs tax forms available Net loss. 2011 irs tax forms available   If the total of your capital losses is more than the total of your capital gains, the difference is deductible. 2011 irs tax forms available But there are limits on how much loss you can deduct and when you can deduct it. 2011 irs tax forms available See Treatment of Capital Losses next. 2011 irs tax forms available Treatment of Capital Losses If your capital losses are more than your capital gains, you must claim the difference even if you do not have ordinary income to offset it. 2011 irs tax forms available For taxpayers other than corporations, the yearly limit on the capital loss you can deduct is $3,000 ($1,500 if you are married and file a separate return). 2011 irs tax forms available If your other income is low, you may not be able to use the full $3,000. 2011 irs tax forms available The part of the $3,000 you cannot use becomes part of your capital loss carryover (discussed next). 2011 irs tax forms available Capital loss carryover. 2011 irs tax forms available   Generally, you have a capital loss carryover if either of the following situations applies to you. 2011 irs tax forms available Your net loss on Schedule D (Form 1040), is more than the yearly limit. 2011 irs tax forms available Your taxable income without your deduction for exemptions is less than zero. 2011 irs tax forms available If either of these situations applies to you for 2013, see Capital Losses under Reporting Capital Gains and Losses in chapter 4 of Publication 550 to figure the amount you can carry over to 2014. 2011 irs tax forms available    To figure your capital loss carryover from 2013 to 2014, you will need a copy of your 2013 Form 1040 and Schedule D (Form 1040). 2011 irs tax forms available Capital Gains 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 irs tax forms available These lower rates are called the maximum capital gains rates. 2011 irs tax forms available 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 irs tax forms available See Schedule D (Form 1040) and the Instructions for Schedule D (Form 1040). 2011 irs tax forms available Also see Publication 550. 2011 irs tax forms available Noncapital Assets Noncapital assets include property such as inventory and depreciable property used in a trade or business. 2011 irs tax forms available A list of properties that are not capital assets is provided in the Instructions for Schedule D (Form 1040). 2011 irs tax forms available Property held for sale in the ordinary course of your farm business. 2011 irs tax forms available   Property you hold mainly for sale to customers, such as livestock, poultry, livestock products, and crops, is a noncapital asset. 2011 irs tax forms available Gain or loss from sales or other dispositions of this property is reported on Schedule F (Form 1040) (not on Schedule D (Form 1040) or Form 4797). 2011 irs tax forms available The treatment of this property is discussed in chapter 3. 2011 irs tax forms available Land and depreciable properties. 2011 irs tax forms available   Land and depreciable property you use in farming are not capital assets. 2011 irs tax forms available Noncapital assets also include livestock held for draft, breeding, dairy, or sporting purposes. 2011 irs tax forms available However, your gains and losses from sales and exchanges of your farmland and depreciable properties must be considered together with certain other transactions to determine whether the gains and losses are treated as capital or ordinary gains and losses. 2011 irs tax forms available The sales of these business assets are reported on Form 4797. 2011 irs tax forms available See chapter 9 for more information. 2011 irs tax forms available Hedging (Commodity Futures) Hedging transactions are transactions that you enter into in the normal course of business primarily to manage the risk of interest rate or price changes, or currency fluctuations, with respect to borrowings, ordinary property, or ordinary obligations. 2011 irs tax forms available Ordinary property or obligations are those that cannot produce capital gain or loss if sold or exchanged. 2011 irs tax forms available A commodity futures contract is a standardized, exchange-traded contract for the sale or purchase of a fixed amount of a commodity at a future date for a fixed price. 2011 irs tax forms available The holder of an option on a futures contract has the right (but not the obligation) for a specified period of time to enter into a futures contract to buy or sell at a particular price. 2011 irs tax forms available A forward contract is generally similar to a futures contract except that the terms are not standardized and the contract is not exchange traded. 2011 irs tax forms available Businesses may enter into commodity futures contracts or forward contracts and may acquire options on commodity futures contracts as either of the following. 2011 irs tax forms available Hedging transactions. 2011 irs tax forms available Transactions that are not hedging transactions. 2011 irs tax forms available Futures transactions with exchange-traded commodity futures contracts that are not hedging transactions, generally, result in capital gain or loss and are subject to the mark-to-market rules discussed in Publication 550. 2011 irs tax forms available There is a limit on the amount of capital losses you can deduct each year. 2011 irs tax forms available Hedging transactions are not subject to the mark-to-market rules. 2011 irs tax forms available If, as a farmer-producer, to protect yourself from the risk of unfavorable price fluctuations, you enter into commodity forward contracts, futures contracts, or options on futures contracts and the contracts cover an amount of the commodity within your range of production, the transactions are generally considered hedging transactions. 2011 irs tax forms available They can take place at any time you have the commodity under production, have it on hand for sale, or reasonably expect to have it on hand. 2011 irs tax forms available The gain or loss on the termination of these hedges is generally ordinary gain or loss. 2011 irs tax forms available Farmers who file their income tax returns on the cash method report any profit or loss on the hedging transaction on Schedule F, line 8. 2011 irs tax forms available Gains or losses from hedging transactions that hedge supplies of a type regularly used or consumed in the ordinary course of your trade or business may be ordinary gains or losses. 2011 irs tax forms available Examples include fuel and feed. 2011 irs tax forms available If you have numerous transactions in the commodity futures market during the year, you must be able to show which transactions are hedging transactions. 2011 irs tax forms available Clearly identify a hedging transaction on your books and records before the end of the day you entered into the transaction. 2011 irs tax forms available It may be helpful to have separate brokerage accounts for your hedging and speculation transactions. 2011 irs tax forms available Retain the identification of each hedging transaction with your books and records. 2011 irs tax forms available Also, identify the item(s) or aggregate risk that is being hedged in your records. 2011 irs tax forms available Although the identification of the hedging transaction must be made before the end of the day it was entered into, you have 35 days after entering into the transaction to identify the hedged item(s) or risk. 2011 irs tax forms available For more information on the tax treatment of futures and options contracts, see Commodity Futures and Section 1256 Contracts Marked to Market in Publication 550. 2011 irs tax forms available Accounting methods for hedging transactions. 2011 irs tax forms available   The accounting method you use for a hedging transaction must clearly reflect income. 2011 irs tax forms available This means that your accounting method must reasonably match the timing of income, deduction, gain, or loss from a hedging transaction with the timing of income, deduction, gain, or loss from the item or items being hedged. 2011 irs tax forms available There are requirements and limits on the method you can use for certain hedging transactions. 2011 irs tax forms available See Regulations section 1. 2011 irs tax forms available 446-4(e) for those requirements and limits. 2011 irs tax forms available   Hedging transactions must be accounted for under the rules stated above unless the transaction is subject to mark-to-market accounting under section 475 or you use an accounting method other than the following methods. 2011 irs tax forms available Cash method. 2011 irs tax forms available Farm-price method. 2011 irs tax forms available Unit-livestock-price method. 2011 irs tax forms available   Once you adopt a method, you must apply it consistently and must have IRS approval before changing it. 2011 irs tax forms available   Your books and records must describe the accounting method used for each type of hedging transaction. 2011 irs tax forms available They must also contain any additional identification necessary to verify the application of the accounting method you used for the transaction. 2011 irs tax forms available You must make the additional identification no more than 35 days after entering into the hedging transaction. 2011 irs tax forms available Example of a hedging transaction. 2011 irs tax forms available   You file your income tax returns on the cash method. 2011 irs tax forms available On July 2 you anticipate a yield of 50,000 bushels of corn this year. 2011 irs tax forms available The December futures price is $5. 2011 irs tax forms available 75 a bushel, but there are indications that by harvest time the price will drop. 2011 irs tax forms available To protect yourself against a drop in the price, you enter into the following hedging transaction. 2011 irs tax forms available You sell ten December futures contracts of 5,000 bushels each for a total of 50,000 bushels of corn at $5. 2011 irs tax forms available 75 a bushel. 2011 irs tax forms available   The price did not drop as anticipated but rose to $6 a bushel. 2011 irs tax forms available In November, you sell your crop at a local elevator for $6 a bushel. 2011 irs tax forms available You also close out your futures position by buying ten December contracts for $6 a bushel. 2011 irs tax forms available You paid a broker's commission of $1,400 ($70 per contract) for the complete in and out position in the futures market. 2011 irs tax forms available   The result is that the price of corn rose 25 cents a bushel and the actual selling price is $6 a bushel. 2011 irs tax forms available Your loss on the hedge is 25 cents a bushel. 2011 irs tax forms available In effect, the net selling price of your corn is $5. 2011 irs tax forms available 75 a bushel. 2011 irs tax forms available   Report the results of your futures transactions and your sale of corn separately on Schedule F. 2011 irs tax forms available See the instructions for the 2013 Schedule F (Form 1040). 2011 irs tax forms available   The loss on your futures transactions is $13,900, figured as follows. 2011 irs tax forms available July 2 - Sold December corn futures (50,000 bu. 2011 irs tax forms available @$5. 2011 irs tax forms available 75) $287,500 November 6 - Bought December corn futures (50,000 bu. 2011 irs tax forms available @$6 plus $1,400 broker's commission) 301,400 Futures loss ($13,900) This loss is reported as a negative figure on Schedule F, Part I, line 8, as other income. 2011 irs tax forms available   The proceeds from your corn sale at the local elevator are $300,000 (50,000 bu. 2011 irs tax forms available × $6). 2011 irs tax forms available Report it on Schedule F, Part I, line 2, as income from sales of products you raised. 2011 irs tax forms available   Assume you were right and the price went down 25 cents a bushel. 2011 irs tax forms available In effect, you would still net $5. 2011 irs tax forms available 75 a bushel, figured as follows. 2011 irs tax forms available Sold cash corn, per bushel $5. 2011 irs tax forms available 50 Gain on hedge, per bushel . 2011 irs tax forms available 25 Net price, per bushel $5. 2011 irs tax forms available 75       The gain on your futures transactions would have been $11,100, figured as follows. 2011 irs tax forms available July 2 - Sold December corn futures (50,000 bu. 2011 irs tax forms available @$5. 2011 irs tax forms available 75) $287,500 November 6 - Bought December corn futures (50,000 bu. 2011 irs tax forms available @$5. 2011 irs tax forms available 50 plus $1,400 broker's commission) 276,400 Futures gain $11,100 The $11,100 is reported on Schedule F, Part I, line 8, as other income. 2011 irs tax forms available   The proceeds from the sale of your corn at the local elevator, $275,000, are reported on Schedule F, Part I, line 2, as income from sales of products you raised. 2011 irs tax forms available Livestock This part discusses the sale or exchange of livestock used in your farm business. 2011 irs tax forms available Gain or loss from the sale or exchange of this livestock may qualify as a section 1231 gain or loss. 2011 irs tax forms available However, any part of the gain that is ordinary income from the recapture of depreciation is not included as section 1231 gain. 2011 irs tax forms available See chapter 9 for more information on section 1231 gains and losses and the recapture of depreciation under section 1245. 2011 irs tax forms available The rules discussed here do not apply to the sale of livestock held primarily for sale to customers. 2011 irs tax forms available The sale of this livestock is reported on Schedule F. 2011 irs tax forms available See chapter 3. 2011 irs tax forms available Also, special rules apply to sales or exchanges caused by weather-related conditions. 2011 irs tax forms available See chapter 3. 2011 irs tax forms available Holding period. 2011 irs tax forms available   The sale or exchange of livestock used in your farm business (defined below) qualifies as a section 1231 transaction if you held the livestock for 12 months or more (24 months or more for horses and cattle). 2011 irs tax forms available Livestock. 2011 irs tax forms available   For section 1231 transactions, livestock includes cattle, hogs, horses, mules, donkeys, sheep, goats, fur-bearing animals, and other mammals. 2011 irs tax forms available Also, for section 1231 transactions, livestock does not include chickens, turkeys, pigeons, geese, emus, ostriches, rheas, or other birds, fish, frogs, reptiles, etc. 2011 irs tax forms available Livestock used in farm business. 2011 irs tax forms available   If livestock is held primarily for draft, breeding, dairy, or sporting purposes, it is used in your farm business. 2011 irs tax forms available The purpose for which an animal is held ordinarily is determined by a farmer's actual use of the animal. 2011 irs tax forms available An animal is not held for draft, breeding, dairy, or sporting purposes merely because it is suitable for that purpose, or because it is held for sale to other persons for use by them for that purpose. 2011 irs tax forms available However, a draft, breeding, or sporting purpose may be present if an animal is disposed of within a reasonable time after it is prevented from its intended use or made undesirable as a result of an accident, disease, drought, or unfitness of the animal. 2011 irs tax forms available Example 1. 2011 irs tax forms available You discover an animal that you intend to use for breeding purposes is sterile. 2011 irs tax forms available You dispose of it within a reasonable time. 2011 irs tax forms available This animal was held for breeding purposes. 2011 irs tax forms available Example 2. 2011 irs tax forms available You retire and sell your entire herd, including young animals that you would have used for breeding or dairy purposes had you remained in business. 2011 irs tax forms available These young animals were held for breeding or dairy purposes. 2011 irs tax forms available Also, if you sell young animals to reduce your breeding or dairy herd because of drought, these animals are treated as having been held for breeding or dairy purposes. 2011 irs tax forms available See Sales Caused by Weather-Related Conditions in chapter 3. 2011 irs tax forms available Example 3. 2011 irs tax forms available You are in the business of raising hogs for slaughter. 2011 irs tax forms available Customarily, before selling your sows, you obtain a single litter of pigs that you will raise for sale. 2011 irs tax forms available You sell the brood sows after obtaining the litter. 2011 irs tax forms available Even though you hold these brood sows for ultimate sale to customers in the ordinary course of your business, they are considered to be held for breeding purposes. 2011 irs tax forms available Example 4. 2011 irs tax forms available You are in the business of raising registered cattle for sale to others for use as breeding cattle. 2011 irs tax forms available The business practice is to breed the cattle before sale to establish their fitness as registered breeding cattle. 2011 irs tax forms available Your use of the young cattle for breeding purposes is ordinary and necessary for selling them as registered breeding cattle. 2011 irs tax forms available Such use does not demonstrate that you are holding the cattle for breeding purposes. 2011 irs tax forms available However, those cattle you held as additions or replacements to your own breeding herd to produce calves are considered to be held for breeding purposes, even though they may not actually have produced calves. 2011 irs tax forms available The same applies to hog and sheep breeders. 2011 irs tax forms available Example 5. 2011 irs tax forms available You breed, raise, and train horses for racing purposes. 2011 irs tax forms available Every year you cull horses from your racing stable. 2011 irs tax forms available In 2013, you decided that to prevent your racing stable from getting too large to be effectively operated, you must cull six horses that had been raced at public tracks in 2012. 2011 irs tax forms available These horses are all considered held for sporting purposes. 2011 irs tax forms available Figuring gain or loss on the cash method. 2011 irs tax forms available   Farmers or ranchers who use the cash method of accounting figure their gain or loss on the sale of livestock used in their farming business as follows. 2011 irs tax forms available Raised livestock. 2011 irs tax forms available   Gain on the sale of raised livestock is generally the gross sales price reduced by any expenses of the sale. 2011 irs tax forms available Expenses of sale include sales commissions, freight or hauling from farm to commission company, and other similar expenses. 2011 irs tax forms available The basis of the animal sold is zero if the costs of raising it were deducted during the years the animal was being raised. 2011 irs tax forms available However, see Uniform Capitalization Rules in chapter 6. 2011 irs tax forms available Purchased livestock. 2011 irs tax forms available   The gross sales price minus your adjusted basis and any expenses of sale is the gain or loss. 2011 irs tax forms available Example. 2011 irs tax forms available A farmer sold a breeding cow on January 8, 2013, for $1,250. 2011 irs tax forms available Expenses of the sale were $125. 2011 irs tax forms available The cow was bought July 2, 2009, for $1,300. 2011 irs tax forms available Depreciation (not less than the amount allowable) was $867. 2011 irs tax forms available Gross sales price $1,250 Cost (basis) $1,300   Minus: Depreciation deduction 867   Unrecovered cost (adjusted basis) $ 433   Expense of sale 125 558 Gain realized $ 692 Converted Wetland and Highly Erodible Cropland Special rules apply to dispositions of land converted to farming use after March 1, 1986. 2011 irs tax forms available Any gain realized on the disposition of converted wetland or highly erodible cropland is treated as ordinary income. 2011 irs tax forms available Any loss on the disposition of such property is treated as a long-term capital loss. 2011 irs tax forms available Converted wetland. 2011 irs tax forms available   This is generally land that was drained or filled to make the production of agricultural commodities possible. 2011 irs tax forms available It includes converted wetland held by the person who originally converted it or held by any other person who used the converted wetland at any time after conversion for farming. 2011 irs tax forms available   A wetland (before conversion) is land that meets all the following conditions. 2011 irs tax forms available It is mostly soil that, in its undrained condition, is saturated, flooded, or ponded long enough during a growing season to develop an oxygen-deficient state that supports the growth and regeneration of plants growing in water. 2011 irs tax forms available It is saturated by surface or groundwater at a frequency and duration sufficient to support mostly plants that are adapted for life in saturated soil. 2011 irs tax forms available It supports, under normal circumstances, mostly plants that grow in saturated soil. 2011 irs tax forms available Highly erodible cropland. 2011 irs tax forms available   This is cropland subject to erosion that you used at any time for farming purposes other than grazing animals. 2011 irs tax forms available Generally, highly erodible cropland is land currently classified by the Department of Agriculture as Class IV, VI, VII, or VIII under its classification system. 2011 irs tax forms available Highly erodible cropland also includes land that would have an excessive average annual erosion rate in relation to the soil loss tolerance level, as determined by the Department of Agriculture. 2011 irs tax forms available Successor. 2011 irs tax forms available   Converted wetland or highly erodible cropland is also land held by any person whose basis in the land is figured by reference to the adjusted basis of a person in whose hands the property was converted wetland or highly erodible cropland. 2011 irs tax forms available Timber Standing timber you held as investment property is a capital asset. 2011 irs tax forms available Gain or loss from its sale is capital gain or loss reported on Form 8949 and Schedule D (Form 1040), as applicable. 2011 irs tax forms available If you held the timber primarily for sale to customers, it is not a capital asset. 2011 irs tax forms available Gain or loss on its sale is ordinary business income or loss. 2011 irs tax forms available It is reported on Schedule F, line 1 (purchased timber) or line 2 (raised timber). 2011 irs tax forms available See the Instructions for Schedule F (Form 1040). 2011 irs tax forms available Farmers who cut timber on their land and sell it as logs, firewood, or pulpwood usually have no cost or other basis for that timber. 2011 irs tax forms available Amounts realized from these sales, and the expenses incurred in cutting, hauling, etc. 2011 irs tax forms available , are ordinary farm income and expenses reported on Schedule F. 2011 irs tax forms available Different rules apply if you owned the timber longer than 1 year and elect to treat timber cutting as a sale or exchange or you enter into a cutting contract, discussed below. 2011 irs tax forms available Timber considered cut. 2011 irs tax forms available   Timber is considered cut on the date when, in the ordinary course of business, the quantity of felled timber is first definitely determined. 2011 irs tax forms available This is true whether the timber is cut under contract or whether you cut it yourself. 2011 irs tax forms available Christmas trees. 2011 irs tax forms available   Evergreen trees, such as Christmas trees, that are more than 6 years old when severed from their roots and sold for ornamental purposes are included in the term timber. 2011 irs tax forms available They qualify for both rules discussed below. 2011 irs tax forms available Election to treat cutting as a sale or exchange. 2011 irs tax forms available   Under the general rule, the cutting of timber results in no gain or loss. 2011 irs tax forms available It is not until a sale or exchange occurs that gain or loss is realized. 2011 irs tax forms available But if you owned or had a contractual right to cut timber, you can elect to treat the cutting of timber as a section 1231 transaction in the year it is cut. 2011 irs tax forms available Even though the cut timber is not actually sold or exchanged, you report your gain or loss on the cutting for the year the timber is cut. 2011 irs tax forms available Any later sale results in ordinary business income or loss. 2011 irs tax forms available See the example below. 2011 irs tax forms available   To elect this treatment, you must: Own or hold a contractual right to cut the timber for a period of more than 1 year before it is cut, and Cut the timber for sale or use in your trade or business. 2011 irs tax forms available Making the election. 2011 irs tax forms available   You make the election on your return for the year the cutting takes place by including in income the gain or loss on the cutting and including a computation of your gain or loss. 2011 irs tax forms available You do not have to make the election in the first year you cut the timber. 2011 irs tax forms available You can make it in any year to which the election would apply. 2011 irs tax forms available If the timber is partnership property, the election is made on the partnership return. 2011 irs tax forms available This election cannot be made on an amended return. 2011 irs tax forms available   Once you have made the election, it remains in effect for all later years unless you revoke it. 2011 irs tax forms available Election under section 631(a) may be revoked. 2011 irs tax forms available   If you previously elected for any tax year ending before October 23, 2004, to treat the cutting of timber as a sale or exchange under section 631(a), you may revoke this election without the consent of the IRS for any tax year ending after October 22, 2004. 2011 irs tax forms available The prior election (and revocation) is disregarded for purposes of making a subsequent election. 2011 irs tax forms available See Form T (Timber), Forest Activities Schedule, for more information. 2011 irs tax forms available Gain or loss. 2011 irs tax forms available   Your gain or loss on the cutting of standing timber is the difference between its adjusted basis for depletion and its FMV on the first day of your tax year in which it is cut. 2011 irs tax forms available   Your adjusted basis for depletion of cut timber is based on the number of units (board feet, log scale, or other units) of timber cut during the tax year and considered to be sold or exchanged. 2011 irs tax forms available Your adjusted basis for depletion is also based on the depletion unit of timber in the account used for the cut timber, and should be figured in the same manner as shown in section 611 and Regulations section 1. 2011 irs tax forms available 611-3. 2011 irs tax forms available   Depletion of timber is discussed in chapter 7. 2011 irs tax forms available Example. 2011 irs tax forms available   In April 2013, you owned 4,000 MBF (1,000 board feet) of standing timber longer than 1 year. 2011 irs tax forms available It had an adjusted basis for depletion of $40 per MBF. 2011 irs tax forms available You are a calendar year taxpayer. 2011 irs tax forms available On January 1, 2013, the timber had a FMV of $350 per MBF. 2011 irs tax forms available It was cut in April for sale. 2011 irs tax forms available On your 2013 tax return, you elect to treat the cutting of the timber as a sale or exchange. 2011 irs tax forms available You report the difference between the FMV and your adjusted basis for depletion as a gain. 2011 irs tax forms available This amount is reported on Form 4797 along with your other section 1231 gains and losses to figure whether it is treated as a capital gain or as ordinary gain. 2011 irs tax forms available You figure your gain as follows. 2011 irs tax forms available FMV of timber January 1, 2013 $1,400,000 Minus: Adjusted basis for depletion 160,000 Section 1231 gain $1,240,000   The FMV becomes your basis in the cut timber, and a later sale of the cut timber, including any by-product or tree tops, will result in ordinary business income or loss. 2011 irs tax forms available Outright sales of timber. 2011 irs tax forms available   Outright sales of timber by landowners qualify for capital gains treatment using rules similar to the rules for certain disposal of timber under a contract with retained economic interest (defined later). 2011 irs tax forms available However, for outright sales, the date of disposal is not deemed to be the date the timber is cut because the landowner can elect to treat the payment date as the date of disposal (see Date of disposal below). 2011 irs tax forms available Cutting contract. 2011 irs tax forms available   You must treat the disposal of standing timber under a cutting contract as a section 1231 transaction if all the following apply to you. 2011 irs tax forms available You are the owner of the timber. 2011 irs tax forms available You held the timber longer than 1 year before its disposal. 2011 irs tax forms available You kept an economic interest in the timber. 2011 irs tax forms available   You have kept an economic interest in standing timber if, under the cutting contract, the expected return on your investment is conditioned on the cutting of the timber. 2011 irs tax forms available   The difference between the amount realized from the disposal of the timber and its adjusted basis for depletion is treated as gain or loss on its sale. 2011 irs tax forms available Include this amount on Form 4797 along with your other section 1231 gains or losses. 2011 irs tax forms available Date of disposal. 2011 irs tax forms available   The date of disposal is the date the timber is cut. 2011 irs tax forms available However, for outright sales by landowners or if you receive payment under the contract before the timber is cut, you can elect to treat the date of payment as the date of disposal. 2011 irs tax forms available   This election applies only to figure the holding period of the timber. 2011 irs tax forms available It has no effect on the time for reporting gain or loss (generally when the timber is sold or exchanged). 2011 irs tax forms available   To make this election, attach a statement to the tax return filed by the due date (including extensions) for the year payment is received. 2011 irs tax forms available The statement must identify the advance payments subject to the election and the contract under which they were made. 2011 irs tax forms available   If you timely filed your return for the year you received payment without making the election, you can still make the election by filing an amended return within 6 months after the due date for that year's return (excluding extensions). 2011 irs tax forms available Attach the statement to the amended return and write “Filed pursuant to section 301. 2011 irs tax forms available 9100-2” at the top of the statement. 2011 irs tax forms available File the amended return at the same address the original return was filed. 2011 irs tax forms available Owner. 2011 irs tax forms available   An owner is any person who owns an interest in the timber, including a sublessor and the holder of a contract to cut the timber. 2011 irs tax forms available You own an interest in timber if you have the right to cut it for sale on your own account or for use in your business. 2011 irs tax forms available Tree stumps. 2011 irs tax forms available   Tree stumps are a capital asset if they are on land held by an investor who is not in the timber or stump business as a buyer, seller, or processor. 2011 irs tax forms available Gain from the sale of stumps sold in one lot by such a holder is taxed as a capital gain. 2011 irs tax forms available However, tree stumps held by timber operators after the saleable standing timber was cut and removed from the land are considered by-products. 2011 irs tax forms available Gain from the sale of stumps in lots or tonnage by such operators is taxed as ordinary income. 2011 irs tax forms available   See Form T (Timber) and its separate instructions for more information about dispositions of timber. 2011 irs tax forms available Sale of a Farm The sale of your farm will usually involve the sale of both nonbusiness property (your home) and business property (the land and buildings used in the farm operation and perhaps machinery and livestock). 2011 irs tax forms available If you have a gain from the sale, you may be allowed to exclude the gain on your home. 2011 irs tax forms available For more information, see Publication 523, Selling Your Home. 2011 irs tax forms available The gain on the sale of your business property is taxable. 2011 irs tax forms available A loss on the sale of your business property to an unrelated person is deducted as an ordinary loss. 2011 irs tax forms available Your taxable gain or loss on the sale of property used in your farm business is taxed under the rules for section 1231 transactions. 2011 irs tax forms available See chapter 9. 2011 irs tax forms available Losses from personal-use property, other than casualty or theft losses, are not deductible. 2011 irs tax forms available If you receive payments for your farm in installments, your gain is taxed over the period of years the payments are received, unless you elect not to use the installment method of reporting the gain. 2011 irs tax forms available See chapter 10 for information about installment sales. 2011 irs tax forms available When you sell your farm, the gain or loss on each asset is figured separately. 2011 irs tax forms available The tax treatment of gain or loss on the sale of each asset is determined by the classification of the asset. 2011 irs tax forms available Each of the assets sold must be classified as one of the following. 2011 irs tax forms available Capital asset held 1 year or less. 2011 irs tax forms available Capital asset held longer than 1 year. 2011 irs tax forms available Property (including real estate) used in your business and held 1 year or less (including draft, breeding, dairy, and sporting animals held less than the holding periods discussed earlier under Livestock ). 2011 irs tax forms available Property (including real estate) used in your business and held longer than 1 year (including only draft, breeding, dairy, and sporting animals held for the holding periods discussed earlier). 2011 irs tax forms available Property held primarily for sale or which is of the kind that would be included in inventory if on hand at the end of your tax year. 2011 irs tax forms available Allocation of consideration paid for a farm. 2011 irs tax forms available   The sale of a farm for a lump sum is considered a sale of each individual asset rather than a single asset. 2011 irs tax forms available The residual method is required only if the group of assets sold constitutes a trade or business. 2011 irs tax forms available This method determines gain or loss from the transfer of each asset. 2011 irs tax forms available It also determines the buyer's basis in the business assets. 2011 irs tax forms available For more information, see Sale of a Business in chapter 2 of Publication 544. 2011 irs tax forms available Property used in farm operation. 2011 irs tax forms available   The rules for excluding the gain on the sale of your home, described later under Sale of your home , do not apply to the property used for your farming business. 2011 irs tax forms available Recognized gains and losses on business property must be reported on your return for the year of the sale. 2011 irs tax forms available If the property was held longer than 1 year, it may qualify for section 1231 treatment (see chapter 9). 2011 irs tax forms available Example. 2011 irs tax forms available You sell your farm, including your main home, which you have owned since December 2001. 2011 irs tax forms available You realize gain on the sale as follows. 2011 irs tax forms available   Farm   Farm   With Home Without   Home Only Home Selling price $382,000 $158,000 $224,000 Cost (or other basis) 240,000 110,000 130,000 Gain $142,000 $48,000 $94,000 You must report the $94,000 gain from the sale of the property used in your farm business. 2011 irs tax forms available All or a part of that gain may have to be reported as ordinary income from the recapture of depreciation or soil and water conservation expenses. 2011 irs tax forms available Treat the balance as section 1231 gain. 2011 irs tax forms available The $48,000 gain from the sale of your home is not taxable as long as you meet the requirements explained later under Sale of your home . 2011 irs tax forms available Partial sale. 2011 irs tax forms available   If you sell only part of your farm, you must report any recognized gain or loss on the sale of that part on your tax return for the year of the sale. 2011 irs tax forms available You cannot wait until you have sold enough of the farm to recover its entire cost before reporting gain or loss. 2011 irs tax forms available For a detailed discussion on installment sales, see Publication 544. 2011 irs tax forms available Adjusted basis of the part sold. 2011 irs tax forms available   This is the properly allocated part of your original cost or other basis of the entire farm plus or minus necessary adjustments for improvements, depreciation, etc. 2011 irs tax forms available , on the part sold. 2011 irs tax forms available If your home is on the farm, you must properly adjust the basis to exclude those costs from your farm asset costs, as discussed below under Sale of your home . 2011 irs tax forms available Example. 2011 irs tax forms available You bought a 600-acre farm for $700,000. 2011 irs tax forms available The farm included land and buildings. 2011 irs tax forms available The purchase contract designated $600,000 of the purchase price to the land. 2011 irs tax forms available You later sold 60 acres of land on which you had installed a fence. 2011 irs tax forms available Your adjusted basis for the part of your farm sold is $60,000 (1/10 of $600,000), plus any unrecovered cost (cost not depreciated) of the fence on the 60 acres at the time of sale. 2011 irs tax forms available Use this amount to determine your gain or loss on the sale of the 60 acres. 2011 irs tax forms available Assessed values for local property taxes. 2011 irs tax forms available   If you paid a flat sum for the entire farm and no other facts are available for properly allocating your original cost or other basis between the land and the buildings, you can use the assessed values for local property taxes for the year of purchase to allocate the costs. 2011 irs tax forms available Example. 2011 irs tax forms available Assume that in the preceding example there was no breakdown of the $700,000 purchase price between land and buildings. 2011 irs tax forms available However, in the year of purchase, local taxes on the entire property were based on assessed valuations of $420,000 for land and $140,000 for improvements, or a total of $560,000. 2011 irs tax forms available The assessed valuation of the land is 3/4 (75%) of the total assessed valuation. 2011 irs tax forms available Multiply the $700,000 total purchase price by 75% to figure basis of $525,000 for the 600 acres of land. 2011 irs tax forms available The unadjusted basis of the 60 acres you sold would then be $52,500 (1/10 of $525,000). 2011 irs tax forms available Sale of your home. 2011 irs tax forms available   Your home is a capital asset and not property used in the trade or business of farming. 2011 irs tax forms available If you sell a farm that includes a house you and your family occupy, you must determine the part of the selling price and the part of the cost or other basis allocable to your home. 2011 irs tax forms available Your home includes the immediate surroundings and outbuildings relating to it that are not used for business purposes. 2011 irs tax forms available   If you use part of your home for business, you must make an appropriate adjustment to the basis for depreciation allowed or allowable. 2011 irs tax forms available For more information on basis, see chapter 6. 2011 irs tax forms available More information. 2011 irs tax forms available   For more information on selling your home, see Publication 523. 2011 irs tax forms available Gain from condemnation. 2011 irs tax forms available   If you have a gain from a condemnation or sale under threat of condemnation, you may use the preceding rules for excluding the gain, rather than the rules discussed under Postponing Gain in chapter 11. 2011 irs tax forms available However, any gain that cannot be excluded (because it is more than the limit) may be postponed under the rules discussed under Postponing Gain in chapter 11. 2011 irs tax forms available Foreclosure or Repossession If you do not make payments you owe on a loan secured by property, the lender may foreclose on the loan or repossess the property. 2011 irs tax forms available The foreclosure or repossession is treated as a sale or exchange from which you may realize gain or loss. 2011 irs tax forms available This is true even if you voluntarily return the property to the lender. 2011 irs tax forms available You may also realize ordinary income from cancellation of debt if the loan balance is more than the FMV of the property. 2011 irs tax forms available Buyer's (borrower's) gain or loss. 2011 irs tax forms available   You figure and report gain or loss from a foreclosure or repossession in the same way as gain or loss from a sale or exchange. 2011 irs tax forms available The gain or loss is the difference between your adjusted basis in the transferred property and the amount realized. 2011 irs tax forms available See Determining Gain or Loss , earlier. 2011 irs tax forms available Worksheet 8-1. 2011 irs tax forms available Worksheet for Foreclosures andRepossessions Part 1. 2011 irs tax forms available Use Part 1 to figure your ordinary income from the cancellation of debt upon foreclosure or repossession. 2011 irs tax forms available Complete this part only if you were personally liable for the debt. 2011 irs tax forms available Otherwise, go to Part 2. 2011 irs tax forms available   1. 2011 irs tax forms available Enter the amount of outstanding debt immediately before the transfer of property reduced by any amount for which you remain personally liable after the transfer of property   2. 2011 irs tax forms available Enter the Fair Market Value of the transferred property   3. 2011 irs tax forms available Ordinary income from cancellation of debt upon foreclosure or repossession. 2011 irs tax forms available * Subtract line 2 from line 1. 2011 irs tax forms available If zero or less, enter -0-   Part 2. 2011 irs tax forms available Figure your gain or loss from foreclosure or repossession. 2011 irs tax forms available   4. 2011 irs tax forms available If you completed Part 1, enter the smaller of line 1 or line 2. 2011 irs tax forms available If you did not complete Part 1, enter the outstanding debt immediately before the transfer of property   5. 2011 irs tax forms available Enter any proceeds you received from the foreclosure sale   6. 2011 irs tax forms available Add lines 4 and 5   7. 2011 irs tax forms available Enter the adjusted basis of the transferred property   8. 2011 irs tax forms available Gain or loss from foreclosure or repossession. 2011 irs tax forms available Subtract line 7  from line 6   * The income may not be taxable. 2011 irs tax forms available See Cancellation of debt . 2011 irs tax forms available    You can use Worksheet 8-1 to figure your gain or loss from a foreclosure or repossession. 2011 irs tax forms available Amount realized on a nonrecourse debt. 2011 irs tax forms available   If you are not personally liable for repaying the debt (nonrecourse debt) secured by the transferred property, the amount you realize includes the full amount of the debt canceled by the transfer. 2011 irs tax forms available The full canceled debt is included in the amount realized even if the fair market value of the property is less than the canceled debt. 2011 irs tax forms available Example 1. 2011 irs tax forms available Ann paid $200,000 for land used in her farming business. 2011 irs tax forms available She paid $15,000 down and borrowed the remaining $185,000 from a bank. 2011 irs tax forms available Ann is not personally liable for the loan (nonrecourse debt), but pledges the land as security. 2011 irs tax forms available The bank foreclosed on the loan 2 years after Ann stopped making payments. 2011 irs tax forms available When the bank foreclosed, the balance due on the loan was $180,000 and the FMV of the land was $170,000. 2011 irs tax forms available The amount Ann realized on the foreclosure was $180,000, the debt canceled by the foreclosure. 2011 irs tax forms available She figures her gain or loss on Form 4797, Part I, by comparing the amount realized ($180,000) with her adjusted basis ($200,000). 2011 irs tax forms available She has a $20,000 deductible loss. 2011 irs tax forms available Example 2. 2011 irs tax forms available Assume the same facts as in Example 1 except the FMV of the land was $210,000. 2011 irs tax forms available The result is the same. 2011 irs tax forms available The amount Ann realized on the foreclosure is $180,000, the debt canceled by the foreclosure. 2011 irs tax forms available Because her adjusted basis is $200,000, she has a deductible loss of $20,000, which she reports on Form 4797, Part I. 2011 irs tax forms available Amount realized on a recourse debt. 2011 irs tax forms available   If you are personally liable for the debt (recourse debt), the amount realized on the foreclosure or repossession includes the lesser of: The outstanding debt immediately before the transfer reduced by any amount for which you remain personally liable immediately after the transfer, or The fair market value of the transferred property. 2011 irs tax forms available   You are treated as receiving ordinary income from the canceled debt for the part of the debt that is more than the fair market value. 2011 irs tax forms available The amount realized does not include the canceled debt that is your income from cancellation of debt. 2011 irs tax forms available See Cancellation of debt , later. 2011 irs tax forms available Example 3. 2011 irs tax forms available Assume the same facts as in Example 1 above except Ann is personally liable for the loan (recourse debt). 2011 irs tax forms available In this case, the amount she realizes is $170,000. 2011 irs tax forms available This is the canceled debt ($180,000) up to the FMV of the land ($170,000). 2011 irs tax forms available Ann figures her gain or loss on the foreclosure by comparing the amount realized ($170,000) with her adjusted basis ($200,000). 2011 irs tax forms available She has a $30,000 deductible loss, which she figures on Form 4797, Part I. 2011 irs tax forms available She is also treated as receiving ordinary income from cancellation of debt. 2011 irs tax forms available That income is $10,000 ($180,000 − $170,000). 2011 irs tax forms available This is the part of the canceled debt not included in the amount realized. 2011 irs tax forms available She reports this as other income on Schedule F, line 8. 2011 irs tax forms available Seller's (lender's) gain or loss on repossession. 2011 irs tax forms available   If you finance a buyer's purchase of property and later acquire an interest in it through foreclosure or repossession, you may have a gain or loss on the acquisition. 2011 irs tax forms available For more information, see Repossession in Publication 537, Installment Sales. 2011 irs tax forms available Cancellation of debt. 2011 irs tax forms available   If property that is repossessed or foreclosed upon secures a debt for which you are personally liable (recourse debt), you generally must report as ordinary income the amount by which the canceled debt is more than the FMV of the property. 2011 irs tax forms available This income is separate from any gain or loss realized from the foreclosure or repossession. 2011 irs tax forms available Report the income from cancellation of a business debt on Schedule F, line 8. 2011 irs tax forms available Report the income from cancellation of a nonbusiness debt as miscellaneous income on Form 1040. 2011 irs tax forms available    You can use Worksheet 8-1 to figure your income from cancellation of debt. 2011 irs tax forms available   However, income from cancellation of debt is not taxed if any of the following apply. 2011 irs tax forms available The cancellation is intended as a gift. 2011 irs tax forms available The debt is qualified farm debt (see chapter 3). 2011 irs tax forms available The debt is qualified real property business debt (see chapter 5 of Publication 334). 2011 irs tax forms available You are insolvent or bankrupt (see  chapter 3). 2011 irs tax forms available The debt is qualified principal residence indebtedness (see chapter 3). 2011 irs tax forms available   Use Form 982 to report the income exclusion. 2011 irs tax forms available Abandonment The abandonment of property is a disposition of property. 2011 irs tax forms available You abandon property when you voluntarily and permanently give up possession and use of the property with the intention of ending your ownership, but without passing it on to anyone else. 2011 irs tax forms available Business or investment property. 2011 irs tax forms available   Loss from abandonment of business or investment property is deductible as a loss. 2011 irs tax forms available Loss from abandonment of business or investment property that is not treated as a sale or exchange generally is an ordinary loss. 2011 irs tax forms available If your adjusted basis is more than the amount you realize (if any), then you have a loss. 2011 irs tax forms available If the amount you realize (if any) is more than your adjusted basis, then you have a gain. 2011 irs tax forms available This rule also applies to leasehold improvements the lessor made for the lessee. 2011 irs tax forms available However, if the property is foreclosed on or repossessed in lieu of abandonment, gain or loss is figured as discussed earlier under Foreclosure or Repossession . 2011 irs tax forms available   If the abandoned property is secured by debt, special rules apply. 2011 irs tax forms available The tax consequences of abandonment of property that secures a debt depend on whether you are personally liable for the debt (recourse debt) or were not personally liable for the debt (nonrecourse debt). 2011 irs tax forms available For more information, see chapter 3 of Publication 4681, Canceled Debts, Foreclosures, Repossessions, and Abandonments (for Individuals). 2011 irs tax forms available The abandonment loss is deducted in the tax year in which the loss is sustained. 2011 irs tax forms available Report the loss on Form 4797, Part II, line 10. 2011 irs tax forms available Personal-use property. 2011 irs tax forms available   You cannot deduct any loss from abandonment of your home or other property held for personal use. 2011 irs tax forms available Canceled debt. 2011 irs tax forms available   If the abandoned property secures a debt for which you are personally liable and the debt is canceled, you will realize ordinary income equal to the canceled debt. 2011 irs tax forms available This income is separate from any loss realized from abandonment of the property. 2011 irs tax forms available Report income from cancellation of a debt related to a business or rental activity as business or rental income. 2011 irs tax forms available Report income from cancellation of a nonbusiness debt as miscellaneous income on Form 1040. 2011 irs tax forms available   However, income from cancellation of debt is not taxed in certain circumstances. 2011 irs tax forms available See Cancellation of debt earlier under Foreclosure or Repossession . 2011 irs tax forms available Forms 1099-A and 1099-C. 2011 irs tax forms available   A lender who acquires an interest in your property in a foreclosure, repossession, or abandonment should send you Form 1099-A showing the information you need to figure your loss from the foreclosure, repossession, or abandonment. 2011 irs tax forms available However, if the lender cancels part of your debt and the lender must file Form 1099-C, the lender may include the information about the foreclosure, repossession, or abandonment on that form instead of Form 1099-A. 2011 irs tax forms available The lender must file Form 1099-C and send you a copy if the canceled debt is $600 or more and the lender is a financial institution, credit union, federal government agency, or any organization that has a significant trade or business of lending money. 2011 irs tax forms available For foreclosures, repossessions, abandonments of property, and debt cancellations occurring in 2013, these forms should be sent to you by January 31, 2014. 2011 irs tax forms available Prev  Up  Next   Home   More Online Publications