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2011 taxes online free Publication 463 - Introductory Material Table of Contents Future Developments What's New Reminder IntroductionUsers of employer-provided vehicles. 2011 taxes online free Volunteers. 2011 taxes online free Ordering forms and publications. 2011 taxes online free Tax questions. 2011 taxes online free Useful Items - You may want to see: Future Developments For the latest information about developments related to Publication 463, such as legislation enacted after it was published, go to www. 2011 taxes online free irs. 2011 taxes online free gov/pub463. 2011 taxes online free What's New Standard mileage rate. 2011 taxes online free  For 2013, the standard mileage rate for the cost of operating your car for business use is 56½ cents per mile. 2011 taxes online free Car expenses and use of the standard mileage rate are explained in chapter 4. 2011 taxes online free Depreciation limits on cars, trucks, and vans. 2011 taxes online free  For 2013, the first-year limit on the total depreciation deduction for cars remains at $11,160 ($3,160 if you elect not to claim the special depreciation allowance). 2011 taxes online free For trucks and vans the first-year limit remains at $11,360 ($3,360 if you elect not to claim the special depreciation allowance). 2011 taxes online free Depreciation limits are explained in chapter 4. 2011 taxes online free Section 179 deduction. 2011 taxes online free  For 2013, the section 179 deduction limit on qualifying property purchases (including cars, trucks, and vans) is a total of $500,000 and the limit on those purchases at which the deduction begins to be phased out is $2,000,000. 2011 taxes online free Section 179 Deduction is explained in chapter 4. 2011 taxes online free Special depreciation allowance. 2011 taxes online free  For 2013, the special (“bonus”) depreciation allowance on qualified property (including cars, trucks, and vans) remains at 50%. 2011 taxes online free Special Depreciation Allowance is explained in chapter 4. 2011 taxes online free Reminder Photographs of missing children. 2011 taxes online free  The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. 2011 taxes online free Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. 2011 taxes online free You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child. 2011 taxes online free Per diem rates. 2011 taxes online free  The IRS no longer updates Publication 1542, Per Diem Rates (For Travel Within the Continental United States). 2011 taxes online free Instead, current per diem rates may be found on the U. 2011 taxes online free S. 2011 taxes online free General Services Administration (GSA) website at www. 2011 taxes online free gsa. 2011 taxes online free gov/perdiem. 2011 taxes online free Introduction You may be able to deduct the ordinary and necessary business-related expenses you have for: Travel, Entertainment, Gifts, or Transportation. 2011 taxes online free An ordinary expense is one that is common and accepted in your trade or business. 2011 taxes online free A necessary expense is one that is helpful and appropriate for your business. 2011 taxes online free An expense does not have to be required to be considered necessary. 2011 taxes online free This publication explains: What expenses are deductible, How to report them on your return, What records you need to prove your expenses, and How to treat any expense reimbursements you may receive. 2011 taxes online free Who should use this publication. 2011 taxes online free   You should read this publication if you are an employee or a sole proprietor who has business-related travel, entertainment, gift, or transportation expenses. 2011 taxes online free Users of employer-provided vehicles. 2011 taxes online free   If an employer-provided vehicle was available for your use, you received a fringe benefit. 2011 taxes online free Generally, your employer must include the value of the use or availability of the vehicle in your income. 2011 taxes online free However, there are exceptions if the use of the vehicle qualifies as a working condition fringe benefit (such as the use of a qualified nonpersonal use vehicle). 2011 taxes online free   A working condition fringe benefit is any property or service provided to you by your employer for which you could deduct the cost as an employee business expense if you had paid for it. 2011 taxes online free   A qualified nonpersonal use vehicle is one that is not likely to be used more than minimally for personal purposes because of its design. 2011 taxes online free See Qualified nonpersonal use vehicles under Actual Car Expenses in chapter 4. 2011 taxes online free   For information on how to report your car expenses that your employer did not provide or reimburse you for (such as when you pay for gas and maintenance for a car your employer provides), see Vehicle Provided by Your Employer in chapter 6. 2011 taxes online free Who does not need to use this publication. 2011 taxes online free   Partnerships, corporations, trusts, and employers who reimburse their employees for business expenses should refer to their tax form instructions and chapter 11 of Publication 535, Business Expenses, for information on deducting travel, meals, and entertainment expenses. 2011 taxes online free   If you are an employee, you will not need to read this publication if all of the following are true. 2011 taxes online free You fully accounted to your employer for your work-related expenses. 2011 taxes online free You received full reimbursement for your expenses. 2011 taxes online free Your employer required you to return any excess reimbursement and you did so. 2011 taxes online free There is no amount shown with a code “L” in box 12 of your Form W-2, Wage and Tax Statement. 2011 taxes online free If you meet all of these conditions, there is no need to show the expenses or the reimbursements on your return. 2011 taxes online free If you would like more information on reimbursements and accounting to your employer, see chapter 6 . 2011 taxes online free    If you meet these conditions and your employer included reimbursements on your Form W-2 in error, ask your employer for a corrected Form W-2. 2011 taxes online free Volunteers. 2011 taxes online free   If you perform services as a volunteer worker for a qualified charity, you may be able to deduct some of your costs as a charitable contribution. 2011 taxes online free See Out-of-Pocket Expenses in Giving Services in Publication 526, Charitable Contributions, for information on the expenses you can deduct. 2011 taxes online free Comments and suggestions. 2011 taxes online free   We welcome your comments about this publication and your suggestions for future editions. 2011 taxes online free   You can write to us at the following address: Internal Revenue Service Tax Forms and Publications Division 1111 Constitution Ave. 2011 taxes online free NW, IR-6526 Washington, DC 20224   We respond to many letters by telephone. 2011 taxes online free Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence. 2011 taxes online free   You can send your comments from www. 2011 taxes online free irs. 2011 taxes online free gov/formspubs/. 2011 taxes online free Click on “More Information” and then on “Comment on Tax Forms and Publications. 2011 taxes online free ”   Although we cannot respond individually to each comment received, we do appreciate your feedback and will consider your comments as we revise our tax products. 2011 taxes online free Ordering forms and publications. 2011 taxes online free   Visit www. 2011 taxes online free irs. 2011 taxes online free gov/formspubs/ to download forms and publications, call 1-800-TAX-FORM (1-800-829-3676), or write to the address below and receive a response within 10 days after your request is received. 2011 taxes online free Internal Revenue Service 1201 N. 2011 taxes online free Mitsubishi Motorway Bloomington, IL 61705-6613 Tax questions. 2011 taxes online free   If you have a tax question, check the information available on IRS. 2011 taxes online free gov or call 1-800-829-1040. 2011 taxes online free We cannot answer tax questions sent to either of the above addresses. 2011 taxes online free Useful Items - You may want to see: Publication 225 Farmer's Tax Guide 529 Miscellaneous Deductions 535 Business Expenses 946 How To Depreciate Property Form (and Instructions) Schedule A (Form 1040) Itemized Deductions Schedule C (Form 1040) Profit or Loss From Business Schedule C-EZ (Form 1040) Net Profit From Business Schedule F (Form 1040) Profit or Loss From Farming 2106 Employee Business Expenses 2106-EZ Unreimbursed Employee Business Expenses 4562 Depreciation and Amortization See chapter 7, How To Get Tax Help , for information about getting these publications and forms. 2011 taxes online free Prev  Up  Next   Home   More Online Publications
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2011 taxes online free 3. 2011 taxes online free   Claiming the Special Depreciation Allowance Table of Contents Introduction What Is Qualified Property?Qualified Reuse and Recycling Property Qualified Cellulosic Biofuel Plant Property Qualified Disaster Assistance Property Certain Qualified Property Acquired After December 31, 2007 Election to Accelerate Certain Credits in Lieu of the Special Depreciation Allowance How Much Can You Deduct? How Can You Elect Not To Claim an Allowance? When Must You Recapture an Allowance? Introduction You can take a special depreciation allowance to recover part of the cost of qualified property (defined next), placed in service during the tax year. 2011 taxes online free The allowance applies only for the first year you place the property in service. 2011 taxes online free For qualified property placed in service in 2013, you can take an additional 50% special allowance. 2011 taxes online free The allowance is an additional deduction you can take after any section 179 deduction and before you figure regular depreciation under MACRS for the year you place the property in service. 2011 taxes online free This chapter explains what is qualified property. 2011 taxes online free It also includes rules regarding how to figure an allowance, how to elect not to claim an allowance, and when you must recapture an allowance. 2011 taxes online free Corporations can elect to accelerate certain minimum tax credits in lieu of claiming the special depreciation allowance for eligible qualified property. 2011 taxes online free See Election to Accelerate Certain Credits in Lieu of the Special Depreciation Allowance , later. 2011 taxes online free See chapter 6 for information about getting publications and forms. 2011 taxes online free What Is Qualified Property? Your property is qualified property if it is one of the following. 2011 taxes online free Qualified reuse and recycling property. 2011 taxes online free Qualified cellulosic biofuel plant property. 2011 taxes online free Qualified disaster assistance property. 2011 taxes online free Certain qualified property acquired after December 31, 2007. 2011 taxes online free The following discussions provide information about the types of qualified property listed above for which you can take the special depreciation allowance. 2011 taxes online free Qualified Reuse and Recycling Property You can take a 50% special depreciation allowance for qualified reuse and recycling property. 2011 taxes online free Qualified reuse and recycling property is any machinery or equipment (not including buildings or real estate), along with any appurtenance, that is used exclusively to collect, distribute, or recycle qualified reuse and recyclable materials (as defined in section 168(m)(3)(B) of the Internal Revenue Code). 2011 taxes online free Qualified reuse and recycling property also includes software necessary to operate such equipment. 2011 taxes online free The property must meet the following requirements. 2011 taxes online free The property must be depreciated under MACRS. 2011 taxes online free The property must have a useful life of at least 5 years. 2011 taxes online free The original use of the property must begin with you after August 31, 2008. 2011 taxes online free You must have acquired the property by purchase (as discussed under Property Acquired by Purchase in chapter 2 ) after August 31, 2008, with no binding written contract for the acquisition in effect before September 1, 2008. 2011 taxes online free The property must be placed in service for use in your trade or business after August 31, 2008. 2011 taxes online free Excepted Property Qualified reuse and recycling property does not include any of the following. 2011 taxes online free Any rolling stock or other equipment used to transport reuse or recyclable materials. 2011 taxes online free Property required to be depreciated using the Alternative Depreciation System (ADS). 2011 taxes online free For other property required to be depreciated using ADS, see Required use of ADS under Which Depreciation System (GDS or ADS) Applies , in chapter 4 . 2011 taxes online free Other bonus depreciation property to which section 168(k) of the Internal Revenue Code applies. 2011 taxes online free Property for which you elected not to claim any special depreciation allowance (discussed later). 2011 taxes online free Property placed in service and disposed of in the same tax year. 2011 taxes online free Property converted from business use to personal use in the same tax year acquired. 2011 taxes online free Property converted from personal use to business use in the same or later tax year may be qualified reuse and recycling property. 2011 taxes online free Qualified Cellulosic Biofuel Plant Property You can take a 50% special depreciation allowance for qualified cellulosic biofuel plant property. 2011 taxes online free Cellulosic biofuel is any liquid fuel which is produced from any lignocellulosic or hemicellulosic matter that is available on a renewable or recurring basis. 2011 taxes online free Examples include bagasse (from sugar cane), corn stalks, and switchgrass. 2011 taxes online free The property must meet the following requirements. 2011 taxes online free The property is used in the United States solely to produce cellulosic biofuel. 2011 taxes online free The original use of the property must begin with you after December 20, 2006. 2011 taxes online free You must have acquired the property by purchase (as discussed under Property Acquired by Purchase in chapter 2 ) after December 20, 2006, with no binding written contract for acquisition in effect before December 21, 2006. 2011 taxes online free The property must be placed in service for use in your trade or business or for the production of income after October 3, 2008, and before January 3, 2013. 2011 taxes online free Note. 2011 taxes online free For property placed in service after January 2, 2013, and before January 1, 2014, you can take a 50% special depreciation allowance for qualified second generation biofuel plant property that is used solely in the United States to produce second generation biofuel (as defined in section 40(b)(6)(E)). 2011 taxes online free The other requirements for qualified second generation biofuel plant property to be eligible for the special depreciation allowance are identical to the requirements discussed for Qualified Cellulosic Biofuel Plant Property above. 2011 taxes online free Special Rules Sale-leaseback. 2011 taxes online free   If you sold qualified cellulosic biofuel plant property you placed in service after October 3, 2008, and leased it back within 3 months after you originally placed it in service, the property is treated as originally placed in service no earlier than the date it is used by you under the leaseback. 2011 taxes online free   The property will not qualify for the special allowance if the lessee or a related person to the lessee or lessor had a written binding contract in effect for the acquisition of the property before December 21, 2006. 2011 taxes online free Syndicated leasing transactions. 2011 taxes online free   If qualified cellulosic biofuel plant property is originally placed in service by a lessor after October 3, 2008, the property is sold within 3 months of the date it was placed in service, and the user of the property does not change, then the property is treated as originally placed in service by the taxpayer no earlier than the date of the last sale. 2011 taxes online free   Multiple units of property subject to the same lease will be treated as originally placed in service no earlier than the date of sale if the property is sold within 3 months after the final unit is placed in service and the period between the times the first and last units are placed in service does not exceed 12 months. 2011 taxes online free Excepted Property Qualified cellulosic biofuel plant property does not include any of the following. 2011 taxes online free Property placed in service and disposed of in the same tax year. 2011 taxes online free Property converted from business use to personal use in the same tax year it is acquired. 2011 taxes online free Property converted from personal use to business use in the same or later tax year may be qualified cellulosic biomass ethanol plant property. 2011 taxes online free Property required to be depreciated using the Alternative Depreciation System (ADS). 2011 taxes online free For other property required to be depreciated using ADS, see Required use of ADS under Which Depreciation System (GDS or ADS) Applies , in chapter 4 . 2011 taxes online free Property any portion of which is financed with the proceeds of any obligation the interest on which is exempt from tax under section 103 of the Internal Revenue Code. 2011 taxes online free Property for which you elected not to claim any special depreciation allowance (discussed later). 2011 taxes online free Property for which a deduction was taken under section 179C for certain qualified refinery property. 2011 taxes online free Other bonus depreciation property to which section 168(k) of the Internal Revenue Code applies. 2011 taxes online free Qualified Disaster Assistance Property You can take a 50% special depreciation allowance for qualified disaster assistance property placed in service in federally declared disaster areas in which the disaster occurred in 2009. 2011 taxes online free A list of the federally declared disaster areas is available at the FEMA website at www. 2011 taxes online free fema. 2011 taxes online free gov. 2011 taxes online free Your property is qualified disaster assistance property if it meets the following requirements. 2011 taxes online free The property is nonresidential real property or residential real property placed in service before January 1, 2014, in a federally declared disaster area in which the disaster occurred in 2009. 2011 taxes online free You must have acquired the property by purchase (as discussed under Property Acquired by Purchase in chapter 2 ) on or after the applicable disaster date, with no binding written contract for the acquisition in effect before the applicable disaster date. 2011 taxes online free The property must rehabilitate property damaged, or replace property destroyed or condemned, as a result of the applicable federally declared disaster. 2011 taxes online free The property must be similar in nature to, and located in the same county as, the rehabilitated or replaced property. 2011 taxes online free The original use of the property within the applicable disaster area must have begun with you on or after the applicable disaster date. 2011 taxes online free The property is placed in service by you on or before the date which is the last day of the fourth calendar year. 2011 taxes online free Substantially all (80% or more) of the use of the property must be in the active conduct of your trade or business in a federally declared disaster area, occurring in 2009. 2011 taxes online free It is not excepted property (explained later in Excepted Property ). 2011 taxes online free Special Rules Sale-leaseback. 2011 taxes online free   If you sold qualified disaster assistance property you placed in service after the applicable disaster date and leased it back within 3 months after you originally placed it in service, the property is treated as originally placed in service no earlier than the date it is used by you under the leaseback. 2011 taxes online free   The property will not qualify for the special allowance if the lessee or a related person to the lessee or lessor had a written binding contract in effect for the acquisition of the property before the applicable disaster date. 2011 taxes online free Syndicated leasing transactions. 2011 taxes online free   If qualified disaster assistance property is originally placed in service by a lessor after the applicable disaster date, the property is sold within 3 months of the date it was placed in service, and the user of the property does not change, then the property is treated as originally placed in service by the taxpayer no earlier than the date of the last sale. 2011 taxes online free   Multiple units of property subject to the same lease will be treated as originally placed in service no earlier than the date of sale if the property is sold within 3 months after the final unit is placed in service and the period between the times the first and last units are placed in service does not exceed 12 months. 2011 taxes online free Excepted Property Qualified disaster assistance property does not include any of the following. 2011 taxes online free Property required to be depreciated using the Alternative Depreciation System (ADS). 2011 taxes online free For other property required to be depreciated using ADS, see Required use of ADS under Which Depreciation System (GDS or ADS) Applies , in chapter 4 . 2011 taxes online free Property any portion of which is financed with the proceeds of a tax-exempt obligation under section 103 of the Internal Revenue Code. 2011 taxes online free Any qualified revitalization building (defined later) placed in service before January 1, 2010, for which you have elected to claim a commercial revitalization deduction for qualified revitalization expenditures. 2011 taxes online free Any property used in connection with any private or commercial golf course, country club, massage parlor, hot tub facility, suntan facility, or any store, the principal business of which is the sale of alcoholic beverages for consumption off premises. 2011 taxes online free Any property for which the special allowance under section 168(k) or section 1400N(d) of the Internal Revenue Code applies. 2011 taxes online free Property for which you elected not to claim any special depreciation allowance (discussed later). 2011 taxes online free Property placed in service and disposed of in the same tax year. 2011 taxes online free Property converted from business use to personal use in the same tax year acquired. 2011 taxes online free Property converted from personal use to business use in the same or later tax year may be qualified disaster assistance property. 2011 taxes online free Any gambling or animal racing property (defined later). 2011 taxes online free Qualified revitalization building. 2011 taxes online free   This is a commercial building and its structural components that you placed in service in a renewal community before January 1, 2010. 2011 taxes online free If the building is new, the original use of the building must begin with you. 2011 taxes online free If the building is not new, you must substantially rehabilitate the building and then place it in service. 2011 taxes online free For more information, including definitions of substantially rehabilitated building and qualified revitalization expenditure, see section 1400I(b) of the Internal Revenue Code. 2011 taxes online free Gambling or animal racing property. 2011 taxes online free   Gambling or animal racing property includes the following personal and real property. 2011 taxes online free Any equipment, furniture, software, or other property used directly in connection with gambling, the racing of animals, or the on-site viewing of such racing. 2011 taxes online free Any real property determined by square footage (other than any portion that is less than 100 square feet) that is dedicated to gambling, the racing of animals, or the on-site viewing of such racing. 2011 taxes online free Certain Qualified Property Acquired After December 31, 2007 You can take a 50% special depreciation deduction allowance for certain qualified property acquired after December 31, 2007. 2011 taxes online free Your property is qualified property if it meets the following requirements. 2011 taxes online free It is one of the following types of property. 2011 taxes online free Tangible property depreciated under MACRS with a recovery period of 20 years or less. 2011 taxes online free Water utility property. 2011 taxes online free Computer software that is readily available for purchase by the general public, is subject to a nonexclusive license, and has not been substantially modified. 2011 taxes online free (The cost of some computer software is treated as part of the cost of hardware and is depreciated under MACRS. 2011 taxes online free ) Qualified leasehold improvement property (defined under Qualified leasehold improvement property later). 2011 taxes online free You must have acquired the property after December 31, 2007, with no binding written contract for the acquisition in effect before January 1, 2008. 2011 taxes online free The property must be placed in service for use in your trade or business or for the production of income before January 1, 2014 (before January 1, 2015, for certain property with a long production period and certain aircraft (defined next)). 2011 taxes online free The original use of the property must begin with you after December 31, 2007. 2011 taxes online free It is not excepted property (explained later in Excepted property). 2011 taxes online free Qualified leasehold improvement property. 2011 taxes online free    Generally, this is any improvement to an interior part of a building that is nonresidential real property, if all the following requirements are met. 2011 taxes online free The improvement is made under or according to a lease by the lessee (or any sublessee) or the lessor of that part of the building. 2011 taxes online free That part of the building is to be occupied exclusively by the lessee (or any sublessee) of that part. 2011 taxes online free The improvement is placed in service more than 3 years after the date the building was first placed in service by any person. 2011 taxes online free The improvement is section 1250 property. 2011 taxes online free See chapter 3 in Publication 544, Sales and Other Dispositions of Assets, for the definition of section 1250 property. 2011 taxes online free   However, a qualified leasehold improvement does not include any improvement for which the expenditure is attributable to any of the following. 2011 taxes online free The enlargement of the building. 2011 taxes online free Any elevator or escalator. 2011 taxes online free Any structural component benefiting a common area. 2011 taxes online free The internal structural framework of the building. 2011 taxes online free   Generally, a binding commitment to enter into a lease is treated as a lease and the parties to the commitment are treated as the lessor and lessee. 2011 taxes online free However, a lease between related persons is not treated as a lease. 2011 taxes online free Related persons. 2011 taxes online free   For this purpose, the following are related persons. 2011 taxes online free Members of an affiliated group. 2011 taxes online free An individual and a member of his or her family, including only a spouse, child, parent, brother, sister, half-brother, half-sister, ancestor, and lineal descendant. 2011 taxes online free A corporation and an individual who directly or indirectly owns 80% or more of the value of the outstanding stock of that corporation. 2011 taxes online free Two corporations that are members of the same controlled group. 2011 taxes online free A trust fiduciary and a corporation if 80% or more of the value of the outstanding stock is directly or indirectly owned by or for the trust or grantor of the trust. 2011 taxes online free The grantor and fiduciary, and the fiduciary and beneficiary, of any trust. 2011 taxes online free The fiduciaries of two different trusts, and the fiduciaries and beneficiaries of two different trusts, if the same person is the grantor of both trusts. 2011 taxes online free A tax-exempt educational or charitable organization and any person (or, if that person is an individual, a member of that person's family) who directly or indirectly controls the organization. 2011 taxes online free Two S corporations, and an S corporation and a regular corporation, if the same persons own 80% or more of the value of the outstanding stock of each corporation. 2011 taxes online free A corporation and a partnership if the same persons own both of the following. 2011 taxes online free 80% or more of the value of the outstanding stock of the corporation. 2011 taxes online free 80% or more of the capital or profits interest in the partnership. 2011 taxes online free The executor and beneficiary of any estate. 2011 taxes online free Long Production Period Property To be qualified property, long production period property must meet the following requirements. 2011 taxes online free It must meet the requirements in (2)-(5), above. 2011 taxes online free The property has a recovery period of at least 10 years or is transportation property. 2011 taxes online free Transportation property is tangible personal property used in the trade or business of transporting persons or property. 2011 taxes online free The property is subject to section 263A of the Internal Revenue Code. 2011 taxes online free The property has an estimated production period exceeding 1 year and an estimated production cost exceeding $1,000,000. 2011 taxes online free Noncommercial Aircraft To be qualified property, noncommercial aircraft must meet the following requirements. 2011 taxes online free It must meet the requirements in (2)-(5), above. 2011 taxes online free The aircraft must not be tangible personal property used in the trade or business of transporting persons or property (except for agricultural or firefighting purposes). 2011 taxes online free The aircraft must be purchased (as discussed under Property Acquired by Purchase in chapter 2 ) by a purchaser who at the time of the contract for purchase, makes a nonrefundable deposit of the lesser of 10% of the cost or $100,000. 2011 taxes online free The aircraft must have an estimated production period exceeding four months and a cost exceeding $200,000. 2011 taxes online free Special Rules Sale-leaseback. 2011 taxes online free   If you sold qualified property you placed in service after December 31, 2007, and leased it back within 3 months after you originally placed in service, the property is treated as originally placed in service no earlier than the date it is used by you under the leaseback. 2011 taxes online free   The property will not qualify for the special depreciation allowance if the lessee or a related person to the lessee or lessor had a written binding contract in effect for the acquisition of the property before January 1, 2008. 2011 taxes online free Syndicated leasing transactions. 2011 taxes online free   If qualified property is originally placed in service by a lessor after December 31, 2007, the property is sold within 3 months of the date it was placed in service, and the user of the property does not change, then the property is treated as originally placed in service by the taxpayer no earlier than the date of the last sale. 2011 taxes online free   Multiple units of property subject to the same lease will be treated as originally placed in service no earlier than the date of the last sale if the property is sold within 3 months after the final unit is placed in service and the period between the time the first and last units are placed in service does not exceed 12 months. 2011 taxes online free Excepted Property Qualified property does not include any of the following. 2011 taxes online free Property placed in service and disposed of in the same tax year. 2011 taxes online free Property converted from business use to personal use in the same tax year acquired. 2011 taxes online free Property converted from personal use to business use in the same or later tax year may be qualified property. 2011 taxes online free Property required to be depreciated under the Alternative Depreciation System (ADS). 2011 taxes online free This includes listed property used 50% or less in a qualified business use. 2011 taxes online free For other property required to be depreciated using ADS, see Required use of ADS under Which Depreciation System (GDS or ADS) Applies , in chapter 4 . 2011 taxes online free Qualified restaurant property (as defined in section 168(e)(7) of the Internal Revenue Code). 2011 taxes online free Qualified retail improvement property (as defined in section 168(e)(8) of the Internal Revenue Code). 2011 taxes online free Property for which you elected not to claim any special depreciation allowance (discussed later). 2011 taxes online free Property for which you elected to accelerate certain credits in lieu of the special depreciation allowance (discussed next). 2011 taxes online free Election to Accelerate Certain Credits in Lieu of the Special Depreciation Allowance An election made by a corporation to claim pre-2006 unused minimum tax credits in lieu of claiming the special depreciation allowance for either its first tax year ending after March 31, 2008, its first tax year ending after December 31, 2008, or its first tax year ending after December 31, 2010, continues to apply to round 2 extension property (as defined in section 168(k)(4)(I)(iv)), unless the corporation made an election not to apply the section 168(k)(4) election to round 2 extension property for its first tax year ending after December 31, 2010. 2011 taxes online free For 2013, round 2 extension property generally is long production period and noncommercial aircraft if acquired after March 31, 2008, and placed in service after December 31, 2012, but before January 1, 2014. 2011 taxes online free An election made by a corporation to claim pre-2006 unused minimum tax credits in lieu of claiming the special depreciation allowance for either its first tax year ending after March 31, 2008, its first tax year ending after December 31, 2008, or its first tax year ending after December 31, 2010, continues to apply to round 3 extension property (as defined in section 168(k)(4)(J)(iv)), unless the corporation makes an election not to apply the section 168(k)(4) election to round 3 extension property. 2011 taxes online free If a corporation did not make a section 168(k)(4) election for either its first tax year ending after March 31, 2008, its first tax year ending after December 31, 2008, or its first tax year ending after December 31, 2010, the corporation may elect for its first tax year ending after December 31, 2012, to claim pre-2006 unused minimum tax credits in lieu of claiming the special depreciation allowance for only round 3 extension property. 2011 taxes online free If you make an election to accelerate these credits in lieu of claiming the special depreciation allowance for eligible property, you must not take the 50% special depreciation allowance for the property and must depreciate the basis in the property under MACRS using the straight line method. 2011 taxes online free See Which Depreciation Method Applies in chapter 4 . 2011 taxes online free Once made, the election cannot be revoked without IRS consent. 2011 taxes online free Additional guidance. 2011 taxes online free   For additional guidance on the election to accelerate the research or minimum tax credit in lieu of claiming the special depreciation allowance, see Rev. 2011 taxes online free Proc. 2011 taxes online free 2008-65 on page 1082 of Internal Revenue Bulletin 2008-44, available at www. 2011 taxes online free irs. 2011 taxes online free gov/pub/irs-irbs/irb08-44. 2011 taxes online free pdf, Rev. 2011 taxes online free Proc. 2011 taxes online free 2009-16 on page 449 of Internal Revenue Bulletin 2009-06, available at www. 2011 taxes online free irs. 2011 taxes online free gov/pub/irs-irbs/irb09-06. 2011 taxes online free pdf, and Rev. 2011 taxes online free Proc. 2011 taxes online free 2009-33 on page 150 of Internal Revenue Bulletin 2009-29, available at www. 2011 taxes online free irs. 2011 taxes online free gov/pub/irs-irbs/irb09-29. 2011 taxes online free pdf. 2011 taxes online free Also, see Form 3800, General Business Credit; Form 8827, Credit for Prior Year Minimum Tax — Corporations; and related instructions. 2011 taxes online free   Additional guidance regarding the election to accelerate the minimum tax credit in lieu of claiming the special depreciation allowance for round 2 extension property and round 3 extension property may also be available in later Internal Revenue Bulletins available at www. 2011 taxes online free irs. 2011 taxes online free gov/irb. 2011 taxes online free How Much Can You Deduct? Figure the special depreciation allowance by multiplying the depreciable basis of qualified reuse and recycling property, qualified cellulosic biofuel plant property, qualified disaster assistance property, and certain qualified property acquired after December 31, 2007, by 50%. 2011 taxes online free For qualified property other than listed property, enter the special allowance on line 14 in Part II of Form 4562. 2011 taxes online free For qualified property that is listed property, enter the special allowance on line 25 in Part V of Form 4562. 2011 taxes online free If you place qualified property in service in a short tax year, you can take the full amount of a special depreciation allowance. 2011 taxes online free Depreciable basis. 2011 taxes online free   This is the property's cost or other basis multiplied by the percentage of business/investment use, reduced by the total amount of any credits and deductions allocable to the property. 2011 taxes online free   The following are examples of some credits and deductions that reduce depreciable basis. 2011 taxes online free Any section 179 deduction. 2011 taxes online free Any deduction for removal of barriers to the disabled and the elderly. 2011 taxes online free Any disabled access credit, enhanced oil recovery credit, and credit for employer-provided childcare facilities and services. 2011 taxes online free Basis adjustment to investment credit property under section 50(c) of the Internal Revenue Code. 2011 taxes online free   For additional credits and deductions that affect basis, see section 1016 of the Internal Revenue Code. 2011 taxes online free   For information about how to determine the cost or other basis of property, see What Is the Basis of Your Depreciable Property in chapter 1 . 2011 taxes online free For a discussion of business/investment use, see Partial business or investment use under Property Used in Your Business or Income-Producing Activity in chapter 1 . 2011 taxes online free Depreciating the remaining cost. 2011 taxes online free   After you figure your special depreciation allowance for your qualified property, you can use the remaining cost to figure your regular MACRS depreciation deduction (discussed in chapter 4 . 2011 taxes online free Therefore, you must reduce the depreciable basis of the property by the special depreciation allowance before figuring your regular MACRS depreciation deduction. 2011 taxes online free Example. 2011 taxes online free On November 1, 2013, Tom Brown bought and placed in service in his business qualified property that cost $450,000. 2011 taxes online free He did not elect to claim a section 179 deduction. 2011 taxes online free He deducts 50% of the cost ($225,000) as a special depreciation allowance for 2013. 2011 taxes online free He uses the remaining $225,000 of cost to figure his regular MACRS depreciation deduction for 2013 and later years. 2011 taxes online free Like-kind exchanges and involuntary conversions. 2011 taxes online free   If you acquire qualified property in a like-kind exchange or involuntary conversion, the carryover basis of the acquired property is eligible for a special depreciation allowance. 2011 taxes online free After you figure your special allowance, you can use the remaining carryover basis to figure your regular MACRS depreciation deduction. 2011 taxes online free In the year you claim the allowance (the year you place in service the property received in the exchange or dispose of involuntarily converted property), you must reduce the carryover basis of the property by the allowance before figuring your regular MACRS depreciation deduction. 2011 taxes online free See Figuring the Deduction for Property Acquired in a Nontaxable Exchange , in chapter 4 under How Is the Depreciation Deduction Figured . 2011 taxes online free The excess basis (the part of the acquired property's basis that exceeds its carryover basis) is also eligible for a special depreciation allowance. 2011 taxes online free How Can You Elect Not To Claim an Allowance? You can elect, for any class of property, not to deduct any special allowances for all property in such class placed in service during the tax year. 2011 taxes online free To make an election, attach a statement to your return indicating what election you are making and the class of property for which you are making the election. 2011 taxes online free When to make election. 2011 taxes online free   Generally, you must make the election on a timely filed tax return (including extensions) for the year in which you place the property in service. 2011 taxes online free   However, if you timely filed your return for the year without making the election, you can still make the election by filing an amended return within 6 months of the due date of the original return (not including extensions). 2011 taxes online free Attach the election statement to the amended return. 2011 taxes online free On the amended return, write “Filed pursuant to section 301. 2011 taxes online free 9100-2. 2011 taxes online free ” Revoking an election. 2011 taxes online free   Once you elect not to deduct a special depreciation allowance for a class of property, you cannot revoke the election without IRS consent. 2011 taxes online free A request to revoke the election is a request for a letter ruling. 2011 taxes online free If you elect not to have any special allowance apply, the property may be subject to an alternative minimum tax adjustment for depreciation. 2011 taxes online free When Must You Recapture an Allowance? When you dispose of property for which you claimed a special depreciation allowance, any gain on the disposition is generally recaptured (included in income) as ordinary income up to the amount of the special depreciation allowance previously allowed or allowable. 2011 taxes online free See When Do You Recapture MACRS Depreciation in chapter 4 or more information. 2011 taxes online free Recapture of allowance deducted for qualified GO Zone property. 2011 taxes online free   If, in any year after the year you claim the special depreciation allowance for qualified GO Zone property (including specified GO Zone extension property), the property ceases to be used in the GO Zone, you may have to recapture as ordinary income the excess benefit you received from claiming the special depreciation allowance. 2011 taxes online free For additional guidance, see Notice 2008-25 on page 484 of Internal Revenue Bulletin 2008-9. 2011 taxes online free Qualified cellulosic biomass ethanol plant property and qualified cellulosic biofuel plant property. 2011 taxes online free   If, in any year after the year you claim the special depreciation allowance for any qualified cellulosic biomass ethanol plant property or qualified biofuel plant property, the property ceases to be qualified cellulosic biomass ethanol plant property or qualified biofuel plant property, you may have to recapture as ordinary income the excess benefit you received from claiming the special depreciation allowance. 2011 taxes online free Recapture of allowance for qualified Recovery Assistance property. 2011 taxes online free   If, in any year after the year you claim the special depreciation allowance for qualified Recovery Assistance property, the property ceases to be used in the Kansas disaster area, you may have to recapture as ordinary income the excess benefit you received from claiming the special depreciation allowance. 2011 taxes online free For additional guidance, see Notice 2008-67 on page 307 of Internal Revenue Bulletin 2008-32. 2011 taxes online free Recapture of allowance for qualified disaster assistance property. 2011 taxes online free   If, in any year after the year you claim the special depreciation allowance for qualified disaster assistance property, the property ceases to be used in the applicable disaster area, you may have to recapture as ordinary income the excess benefit you received from claiming the special depreciation allowance. 2011 taxes online free   For additional guidance, see Notice 2008-67 on page 307 of Internal Revenue Bulletin 2008-32. 2011 taxes online free Prev  Up  Next   Home   More Online Publications