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2012 Ez Tax Form

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2012 Ez Tax Form

2012 ez tax form 3. 2012 ez tax form   Unrelated Trade or Business Table of Contents Selling of products of exempt functions. 2012 ez tax form Dual use of assets or facilities. 2012 ez tax form Exploitation of exempt functions. 2012 ez tax form ExamplesExceptions. 2012 ez tax form Excluded Trade or Business ActivitiesQualified sponsorship payment. 2012 ez tax form Advertising. 2012 ez tax form Exception for contingent payments. 2012 ez tax form Exception for periodicals. 2012 ez tax form Exception for conventions and trade shows. 2012 ez tax form Legal definition. 2012 ez tax form Legal where played. 2012 ez tax form No for-profit games where played. 2012 ez tax form Unrelated business income. 2012 ez tax form   Unrelated business income is the income from a trade or business regularly conducted by an exempt organization and not substantially related to the performance by the organization of its exempt purpose or function, except that the organization uses the profits derived from this activity. 2012 ez tax form   Certain trade or business activities are not treated as an unrelated trade or business. 2012 ez tax form See Excluded Trade or Business Activities, later. 2012 ez tax form Trade or business. 2012 ez tax form   The term “trade or business” generally includes any activity conducted for the production of income from selling goods or performing services. 2012 ez tax form An activity does not lose its identity as a trade or business merely because it is conducted within a larger group of similar activities that may or may not be related to the exempt purposes of the organization. 2012 ez tax form   For example, the regular sale of pharmaceutical supplies to the general public by a hospital pharmacy does not lose its identity as a trade or business, even though the pharmacy also furnishes supplies to the hospital and patients of the hospital in accordance with its exempt purpose. 2012 ez tax form Similarly, soliciting, selling, and publishing commercial advertising is a trade or business even though the advertising is published in an exempt organization's periodical that contains editorial matter related to the organization's exempt purpose. 2012 ez tax form Regularly conducted. 2012 ez tax form   Business activities of an exempt organization ordinarily are considered regularly conducted if they show a frequency and continuity, and are pursued in a manner similar to comparable commercial activities of nonexempt organizations. 2012 ez tax form   For example, a hospital auxiliary's operation of a sandwich stand for 2 weeks at a state fair would not be the regular conduct of a trade or business. 2012 ez tax form The stand would not compete with similar facilities that a nonexempt organization would ordinarily operate year-round. 2012 ez tax form However, operating a commercial parking lot every Saturday, year-round, would be the regular conduct of a trade or business. 2012 ez tax form Not substantially related. 2012 ez tax form    A business activity is not substantially related to an organization's exempt purpose if it does not contribute importantly to accomplishing that purpose (other than through the production of funds). 2012 ez tax form Whether an activity contributes importantly depends in each case on the facts involved. 2012 ez tax form   In determining whether activities contribute importantly to the accomplishment of an exempt purpose, the size and extent of the activities involved must be considered in relation to the nature and extent of the exempt function that they intend to serve. 2012 ez tax form For example, to the extent an activity is conducted on a scale larger than is reasonably necessary to perform an exempt purpose, it does not contribute importantly to the accomplishment of the exempt purpose. 2012 ez tax form The part of the activity that is more than needed to accomplish the exempt purpose is an unrelated trade or business. 2012 ez tax form   Also in determining whether activities contribute importantly to the accomplishment of an exempt purpose, the following principles apply. 2012 ez tax form Selling of products of exempt functions. 2012 ez tax form   Ordinarily, selling products that result from the performance of exempt functions is not an unrelated trade or business if the product is sold in substantially the same state it is in when the exempt functions are completed. 2012 ez tax form Thus, for an exempt organization engaged in rehabilitating handicapped persons (its exempt function), selling articles made by these persons as part of their rehabilitation training is not an unrelated trade or business. 2012 ez tax form   However, if a completed product resulting from an exempt function is used or exploited in further business activity beyond what is reasonably appropriate or necessary to dispose of it as is, the activity is an unrelated trade or business. 2012 ez tax form For example, if an exempt organization maintains an experimental dairy herd for scientific purposes, the sale of milk and cream produced in the ordinary course of operation of the project is not an unrelated trade or business. 2012 ez tax form But if the organization uses the milk and cream in the further manufacture of food items such as ice cream, pastries, etc. 2012 ez tax form , the sale of these products is an unrelated trade or business unless the manufacturing activities themselves contribute importantly to the accomplishment of an exempt purpose of the organization. 2012 ez tax form Dual use of assets or facilities. 2012 ez tax form   If an asset or facility necessary to the conduct of exempt functions is also used in commercial activities, its use for exempt functions does not, by itself, make the commercial activities a related trade or business. 2012 ez tax form The test, as discussed earlier, is whether the activities contribute importantly to the accomplishment of exempt purposes. 2012 ez tax form   For example, a museum has a theater auditorium designed for showing educational films in connection with its program of public education in the arts and sciences. 2012 ez tax form The theater is a principal feature of the museum and operates continuously while the museum is open to the public. 2012 ez tax form If the organization also operates the theater as a motion picture theater for the public when the museum is closed, the activity is an unrelated trade or business. 2012 ez tax form   For information on allocating expenses for the dual use of assets or facilities, see Deductions in chapter 4. 2012 ez tax form Exploitation of exempt functions. 2012 ez tax form   Exempt activities sometimes create goodwill or other intangibles that can be exploited in a commercial way. 2012 ez tax form When an organization exploits such an intangible in commercial activities, the fact that the income depends in part upon an exempt function of the organization does not make the commercial activities a related trade or business. 2012 ez tax form Unless the commercial exploitation contributes importantly to the accomplishment of the exempt purpose, the commercial activities are an unrelated trade or business. 2012 ez tax form   For the treatment of expenses attributable to the exploitation of exempt activities, see Deductions in chapter 4. 2012 ez tax form Examples The following are examples of activities that were determined to be (or not to be) unrelated trades or businesses using the definitions and principles just discussed. 2012 ez tax form Sales commissions. 2012 ez tax form   An agricultural organization, whose exempt purposes are to promote better conditions for cattle breeders and to improve the breed generally, engages in an unrelated trade or business when it regularly sells cattle for its members on a commission basis. 2012 ez tax form Artists' facilities. 2012 ez tax form   An organization whose exempt purpose is to stimulate and foster public interest in the fine arts by promoting art exhibits, sponsoring cultural events, and furnishing information about fine arts leases studio apartments to artist tenants and operates a dining hall primarily for these tenants. 2012 ez tax form These two activities do not contribute importantly to accomplishing the organization's exempt purpose. 2012 ez tax form Therefore, they are unrelated trades or businesses. 2012 ez tax form Membership list sales. 2012 ez tax form   An exempt educational organization regularly sells membership mailing lists to business firms. 2012 ez tax form This activity does not contribute importantly to the accomplishment of the organization's exempt purpose and therefore is an unrelated trade or business. 2012 ez tax form Also see Exchange or rental of member lists under Excluded Trade or Business Activities, later. 2012 ez tax form Hospital facilities. 2012 ez tax form   An exempt hospital leases its adjacent office building and furnishes certain office services to a hospital-based medical group for a fee. 2012 ez tax form The group provides all diagnostic and therapeutic procedures to the hospital's patients and operates the hospital's emergency room on a 24-hour basis. 2012 ez tax form The leasing activity is substantially related to the hospital's exempt purpose and is not an unrelated trade or business. 2012 ez tax form   The hospital also operates a gift shop patronized by patients, visitors making purchases for patients, and employees; a cafeteria and coffee shop primarily for employees and medical staff; and a parking lot for patients and visitors only. 2012 ez tax form These activities are also substantially related to the hospital's exempt purpose and do not constitute unrelated trades or businesses. 2012 ez tax form Book publishing. 2012 ez tax form   An exempt organization engages primarily in activities that further its exempt purposes. 2012 ez tax form It also owns the publication rights to a book that does not relate to any of its exempt purposes. 2012 ez tax form The organization exploits the book in a commercial manner by arranging for printing, distribution, publicity, and advertising in connection with the sale of the book. 2012 ez tax form These activities constitute a trade or business regularly conducted. 2012 ez tax form Because exploiting the book is unrelated to the organization's exempt purposes (except for the use of the book's profits), the income is unrelated business income. 2012 ez tax form   However, if the organization transfers publication rights to a commercial publisher in return for royalties, the royalty income received will not be unrelated business income. 2012 ez tax form See Royalties under Exclusions in chapter 4. 2012 ez tax form School handicraft shop. 2012 ez tax form   An exempt vocational school operates a handicraft shop that sells articles made by students in their regular courses of instruction. 2012 ez tax form The students are paid a percentage of the sales price. 2012 ez tax form In addition, the shop sells products made by local residents who make articles at home according to the shop's specifications. 2012 ez tax form The shop manager periodically inspects the articles during their manufacture to ensure that they meet desired standards of style and quality. 2012 ez tax form Although many local participants are former students of the school, any qualified person may participate in the program. 2012 ez tax form The sale of articles made by students does not constitute an unrelated trade or business, but the sale of products made by local residents is an unrelated trade or business and is subject to unrelated business income tax. 2012 ez tax form School facilities. 2012 ez tax form   An exempt school has tennis courts and dressing rooms that it uses during the regular school year in its educational program. 2012 ez tax form During the summer, the school operates a tennis club open to the general public. 2012 ez tax form Employees of the school run the club, including collecting membership fees and scheduling court time. 2012 ez tax form   Another exempt school leases the same type of facilities to an unrelated individual who runs a tennis club for the summer. 2012 ez tax form The lease is for a fixed fee that does not depend on the income or profits derived from the leased property. 2012 ez tax form   In both situations, the exempt purpose is the advancement of education. 2012 ez tax form Furnishing tennis facilities in the manner described does not further that exempt purpose. 2012 ez tax form These activities are unrelated trades or businesses. 2012 ez tax form However, in the second situation the income derived from the leasing of the property is excluded from unrelated business taxable income as rent from real property. 2012 ez tax form See Rents under Exclusions in chapter 4. 2012 ez tax form Services provided with lease. 2012 ez tax form   An exempt university leases its football stadium during several months of the year to a professional football team for a fixed fee. 2012 ez tax form Under the lease agreement, the university furnishes heat, light, and water and is responsible for all ground maintenance. 2012 ez tax form It also provides dressing room, linen, and stadium security services for the professional team. 2012 ez tax form   Leasing of the stadium is an unrelated trade or business. 2012 ez tax form In addition, the substantial services furnished for the convenience of the lessee go beyond those usually provided with the rental of space for occupancy only. 2012 ez tax form Therefore, the income from this lease is rent from real property and unrelated business taxable income. 2012 ez tax form Broadcasting rights. 2012 ez tax form   An exempt collegiate athletic conference conducts an annual competitive athletic game between its conference champion and another collegiate team. 2012 ez tax form Income is derived from admission charges and the sale of exclusive broadcasting rights to a national radio and television network. 2012 ez tax form An athletic program is considered an integral part of the educational process of a university. 2012 ez tax form   The educational purposes served by intercollegiate athletics are identical whether conducted directly by individual universities or by their regional athletic conference. 2012 ez tax form Also, the educational purposes served by exhibiting a game before an audience that is physically present and exhibiting the game on television or radio before a much larger audience are substantially similar. 2012 ez tax form Therefore, the sale of the broadcasting rights contributes importantly to the accomplishment of the organization's exempt purpose and is not an unrelated trade or business. 2012 ez tax form   In a similar situation, an exempt organization was created as a national governing body for amateur athletes to foster interest in amateur sports and to encourage widespread public participation. 2012 ez tax form The organization receives income each year from the sale of exclusive broadcasting rights to an independent producer, who contracts with a commercial network to broadcast many of the athletic events sponsored, supervised, and regulated by the organization. 2012 ez tax form   The broadcasting of these events promotes the various amateur sports, fosters widespread public interest in the benefits of the organization's nationwide amateur program, and encourages public participation. 2012 ez tax form The sale of the rights and the broadcasting of the events contribute importantly to the organization's exempt purpose. 2012 ez tax form Therefore, the sale of the exclusive broadcasting rights is not an unrelated trade or business. 2012 ez tax form Yearbook advertising. 2012 ez tax form   An exempt organization receives income from the sale of advertising in its annual yearbook. 2012 ez tax form The organization hires an independent commercial firm, under a contract covering a full calendar year, to conduct an intensive advertising solicitation campaign in the organization's name. 2012 ez tax form This firm is paid a percentage of the gross advertising receipts for selling the advertising, collecting from advertisers, and printing the yearbook. 2012 ez tax form This advertising activity is an unrelated trade or business. 2012 ez tax form Pet boarding and grooming services. 2012 ez tax form   An exempt organization, organized and operated for the prevention of cruelty to animals, receives unrelated business income from providing pet boarding and grooming services for the general public. 2012 ez tax form These activities do not contribute importantly to its purpose of preventing cruelty to animals. 2012 ez tax form Museum eating facilities. 2012 ez tax form   An exempt art museum operates a dining room, a cafeteria, and a snack bar for use by the museum staff, employees, and visitors. 2012 ez tax form Eating facilities in the museum help to attract visitors and allow them to spend more time viewing the museum's exhibits without having to seek outside restaurants at mealtime. 2012 ez tax form The eating facilities also allow the museum staff and employees to remain in the museum throughout the day. 2012 ez tax form Thus, the museum's operation of the eating facilities contributes importantly to the accomplishment of its exempt purposes and is not unrelated trade or business. 2012 ez tax form Halfway house workshop. 2012 ez tax form   A halfway house organized to provide room, board, therapy, and counseling for persons discharged from alcoholic treatment centers also operates a furniture shop to provide full-time employment for its residents. 2012 ez tax form The profits are applied to the operating costs of the halfway house. 2012 ez tax form The income from this venture is not unrelated trade or business income because the furniture shop contributes importantly to the organization's purpose of aiding its residents' transition from treatment to a normal and productive life. 2012 ez tax form Travel tour programs. 2012 ez tax form   Travel tour activities that are a trade or business are an unrelated trade or business if the activities are not substantially related to the purpose for which tax exemption was granted to the organization. 2012 ez tax form Example 1. 2012 ez tax form A tax-exempt university alumni association provides a travel tour program for its members and their families. 2012 ez tax form The organization works with various travel agencies and schedules approximately ten tours a year to various places around the world. 2012 ez tax form It mails out promotional material and accepts reservations for fees paid by the travel agencies on a per-person basis. 2012 ez tax form The organization provides an employee for each tour as a tour leader. 2012 ez tax form There is no formal educational program conducted with these tours, and they do not differ from regular commercially operated tours. 2012 ez tax form By providing travel tours to its members, the organization is engaging in a regularly conducted trade or business. 2012 ez tax form Even if the tours it offers support the university, financially and otherwise, and encourage alumni to do the same, they do not contribute importantly to the organization's exempt purpose of promoting education. 2012 ez tax form Therefore, the sale of the travel tours is an unrelated trade or business. 2012 ez tax form Example 2. 2012 ez tax form A tax-exempt organization formed for the purpose of educating individuals about the geography and the culture of the United States provides study tours to national parks and other locations within the United States. 2012 ez tax form These tours are conducted by teachers and others certified by the state board of education. 2012 ez tax form The tours are primarily designed for students enrolled in degree programs at state educational institutions but are open to all who agree to participate in the required study program associated with the tour taken. 2012 ez tax form A tour's study program consists of instruction on subjects related to the location being visited on the tour. 2012 ez tax form Each tour group brings along a library of material related to the subjects being studied on the tour. 2012 ez tax form During the tour, 5 or 6 hours per day are devoted to organized study, preparation of reports, lectures, instruction, and recitation by the students. 2012 ez tax form Examinations are given at the end of each tour. 2012 ez tax form The state board of education awards academic credit for tour participation. 2012 ez tax form Because these tours are substantially related to the organization's exempt purpose, they are not an unrelated trade or business. 2012 ez tax form Insurance programs. 2012 ez tax form   An organization that acts as a group insurance policyholder for its members and collects a fee for performing administrative services is normally carrying on an unrelated trade or business. 2012 ez tax form Exceptions. 2012 ez tax form   Organizations whose exempt activities may include the provision of insurance benefits, such as fraternal beneficiary societies, voluntary employees beneficiary associations, and labor organizations, are generally exceptions to this rule. 2012 ez tax form Magazine publishing. 2012 ez tax form   An association of credit unions with tax-exempt status as a business league publishes a consumer-oriented magazine four times a year and makes it available to member credit unions for purchase. 2012 ez tax form   By selling a magazine to its members as a promotional device, the organization furnishes its members with a regular commercial service they can use in their own operations. 2012 ez tax form This service does not promote the improvement of business conditions of one or more lines of business, which is the exempt purpose of a business league. 2012 ez tax form   Since the activity does not contribute importantly to the organization's exempt function, it is an unrelated trade or business. 2012 ez tax form Directory of members. 2012 ez tax form   A business league publishes an annual directory that contains a list of all its members, their addresses, and their area of expertise. 2012 ez tax form Each member has the same amount of space in the directory, and its format does not emphasize the relative importance or reputation of any member. 2012 ez tax form The directory contains no commercial advertisement and is sold only to the organization's members. 2012 ez tax form   The directory facilitates communication among the members and encourages the exchange of ideas and expertise. 2012 ez tax form Because the directory lists the members in a similar noncommercial format without advertising and is not distributed to the public, its sale does not confer private commercial benefits on the members. 2012 ez tax form The sale of the directory does contribute importantly to the organization's exempt purpose and is not an unrelated trade or business. 2012 ez tax form This directory differs from the publication discussed next because of its noncommercial characteristics. 2012 ez tax form Sales of advertising space. 2012 ez tax form   A national association of law enforcement officials publishes a monthly journal that contains articles and other editorial material of professional interest to its members. 2012 ez tax form The journal is distributed without charge, mainly to the organization's members. 2012 ez tax form   The organization sells advertising space in the journal either for conventional advertising or to merely identify the purchaser without a commercial message. 2012 ez tax form Some of the noncommercial advertising identifies the purchaser in a separate space, and some consists of listings of 60 or more purchasers per page. 2012 ez tax form A business firm identified in a separate space is further identified in an Index of Advertisers. 2012 ez tax form   The organization solicits advertising by personal contacts. 2012 ez tax form Advertising from large firms is solicited by contacting their chief executive officer or community relations officer rather than their advertising manager. 2012 ez tax form The organization also solicits advertising in form letters appealing for corporate and personal contributions. 2012 ez tax form   An exempt organization's sale of advertising placed for the purchaser's commercial benefit is a commercial activity. 2012 ez tax form Goodwill derived by the purchaser from being identified as a patron of the organization is usually considered a form of commercial benefit. 2012 ez tax form Therefore, advertising in an exempt organization's publication is generally presumed to be placed for the purchaser's commercial benefit, even if it has no commercial message. 2012 ez tax form However, this presumption is not conclusive if the purchaser's patronage would be difficult to justify commercially in view of the facts and circumstances. 2012 ez tax form In that case, other factors should also be considered in determining whether a commercial benefit can be expected. 2012 ez tax form Those other factors include: The normal manner in which the publication is circulated; The territorial scope of the circulation; The extent to which its readers, promoters, or the like could reasonably be expected to further, either directly or indirectly, the commercial interest of the advertisers; The eligibility of the publishing organization to receive tax-deductible contributions; and The commercial or noncommercial methods used to solicit the advertisers. 2012 ez tax form   In this situation, the purchaser of a separate advertising space without a commercial message can nevertheless expect a commercial benefit from the goodwill derived from being identified in that manner as a patron of the organization. 2012 ez tax form However, the purchaser of a listing cannot expect more than an inconsequential benefit. 2012 ez tax form Therefore, the sale of separate spaces, but not the listings, is an unrelated trade or business. 2012 ez tax form Publishing legal notices. 2012 ez tax form   A bar association publishes a legal journal containing opinions of the county court, articles of professional interest to lawyers, advertisements for products and services used by the legal profession, and legal notices. 2012 ez tax form The legal notices are published to satisfy state laws requiring publication of notices in connection with legal proceedings, such as the administration of estates and actions to quiet title to real property. 2012 ez tax form The state designated the bar association's journal as the place to publish the required notices. 2012 ez tax form   The publication of ordinary commercial advertising does not advance the exempt purposes of the association even when published in a periodical that contains material related to exempt purposes. 2012 ez tax form Although the advertising is directed specifically to members of the legal profession, it is still commercial in nature and does not contribute importantly to the exempt purposes of the association. 2012 ez tax form Therefore, the advertising income is unrelated trade or business income. 2012 ez tax form   On the other hand, the publication of legal notices is distinguishable from ordinary commercial advertising in that its purpose is to inform the general public of significant legal events rather than to stimulate demand for the products or services of an advertiser. 2012 ez tax form This promotes the common interests of the legal profession and contributes importantly to the association's exempt purposes. 2012 ez tax form Therefore, the publishing of legal notices does not constitute an unrelated trade or business. 2012 ez tax form Museum greeting card sales. 2012 ez tax form    An art museum that exhibits modern art sells greeting cards that display printed reproductions of selected works from other art collections. 2012 ez tax form Each card is imprinted with the name of the artist, the title or subject matter of the work, the date or period of its creation, if known, and the museum's name. 2012 ez tax form The cards contain appropriate greetings and are personalized on request. 2012 ez tax form   The organization sells the cards in the shop it operates in the museum and sells them at quantity discounts to retail stores. 2012 ez tax form It also sells them by mail order through a catalog that is advertised in magazines and other publications throughout the year. 2012 ez tax form As a result, a large number of cards are sold at a significant profit. 2012 ez tax form   The museum is exempt as an educational organization on the basis of its ownership, maintenance, and exhibition for public viewing of works of art. 2012 ez tax form The sale of greeting cards with printed reproductions of artworks contributes importantly to the achievement of the museum's exempt educational purposes by enhancing public awareness, interest, and appreciation of art. 2012 ez tax form The cards may encourage more people to visit the museum itself to share in its educational programs. 2012 ez tax form The fact that the cards are promoted and sold in a commercial manner at a profit and in competition with commercial greeting card publishers does not alter the fact that the activity is related to the museum's exempt purpose. 2012 ez tax form Therefore, these sales activities are not an unrelated trade or business. 2012 ez tax form Museum shop. 2012 ez tax form   An art museum maintained and operated for the exhibition of American folk art operates a shop in the museum that sells: Reproductions of works in the museum's own collection and reproductions of artistic works from the collections of other art museums (prints suitable for framing, postcards, greeting cards, and slides); Metal, wood, and ceramic copies of American folk art objects from its own collection and similar copies of art objects from other collections of artworks; Instructional literature and scientific books and souvenir items concerning the history and development of art and, in particular, of American folk art; and Scientific books and souvenir items of the city in which the museum is located. 2012 ez tax form   The shop also rents originals or reproductions of paintings contained in its collection. 2012 ez tax form All of its reproductions are imprinted with the name of the artist, the title or subject matter of the work from which it is reproduced, and the museum's name. 2012 ez tax form   Each line of merchandise must be considered separately to determine if sales are related to the exempt purpose. 2012 ez tax form   The sale and rental of reproductions and copies of works from the museum's own collection and reproductions of artistic works not owned by the museum contribute importantly to the achievement of the museum's exempt educational purpose by making works of art familiar to a broader segment of the public, thereby enhancing the public's understanding and appreciation of art. 2012 ez tax form The same is true for the sale of literature relating to art. 2012 ez tax form Therefore, these sales activities are not an unrelated trade or business. 2012 ez tax form   On the other hand, the sale of scientific books and souvenir items of the city where the museum is located has no causal relationship to art or to artistic endeavor and, therefore, does not contribute importantly to the accomplishment of the museum's exempt educational purposes. 2012 ez tax form The fact that selling some of these items could, under different circumstances, be held related to the exempt educational purpose of some other exempt educational organization does not change this conclusion. 2012 ez tax form Additionally, the sale of these items does not lose its identity as a trade or business merely because the museum also sells articles which do contribute importantly to the accomplishment of its exempt function. 2012 ez tax form Therefore, these sales are an unrelated trade or business. 2012 ez tax form Business league's parking and bus services. 2012 ez tax form   A business league, whose purpose is to retain and stimulate trade in a downtown area that has inadequate parking facilities, operates a fringe parking lot and shuttle bus service. 2012 ez tax form It also operates, as an insubstantial part of its activities, a park and shop plan. 2012 ez tax form   The fringe parking lot and shuttle bus service operate in a manner that does not favor any individual or group of downtown merchants. 2012 ez tax form The merchants cannot offer free or discount parking or bus fares to their customers. 2012 ez tax form   The park and shop plan allows customers of particular merchants to park free at certain parking lots in the area. 2012 ez tax form Merchants participating in this plan buy parking stamps, which they distribute to their customers to use to pay for parking. 2012 ez tax form   Operating the fringe parking lot and shuttle bus service provides easy and convenient access to the downtown area and, therefore, stimulates and improves business conditions in the downtown area generally. 2012 ez tax form That activity contributes importantly to the organization's accomplishing its exempt purpose and is not an unrelated trade or business. 2012 ez tax form   The park and shop plan encourages customers to use a limited number of participating member merchants in order to obtain free parking. 2012 ez tax form This provides a particular service to individual members of the organization and does not further its exempt purpose. 2012 ez tax form Therefore, operating the park and shop plan is an unrelated trade or business. 2012 ez tax form Youth residence. 2012 ez tax form   An exempt organization, whose purpose is to provide for the welfare of young people, rents rooms primarily to people under age 25. 2012 ez tax form The residence units are operated on, and as a part of, the premises in which the organization carries on the social, recreational, and guidance programs for which it was recognized as exempt. 2012 ez tax form The facilities are under the management and supervision of trained career professionals who provide residents with personal counseling, physical education programs, and group recreational activities. 2012 ez tax form The rentals are not an unrelated trade or business because renting the rooms is substantially related to the organization's exempt purpose. 2012 ez tax form Health club program. 2012 ez tax form   An exempt charitable organization's purpose is to provide for the welfare of young people. 2012 ez tax form The organization conducts charitable activities and maintains facilities that will contribute to the physical, social, mental, and spiritual health of young people at minimum or no cost to them. 2012 ez tax form Nominal annual dues are charged for membership in the organization and use of the facilities. 2012 ez tax form   In addition, the organization organized a health club program that its members could join for an annual fee in addition to the annual dues. 2012 ez tax form The annual fee is comparable to fees charged by similar local commercial health clubs and is sufficiently high to restrict participation in the program to a limited number of members of the community. 2012 ez tax form   The health club program is in addition to the general physical fitness program of the organization. 2012 ez tax form Operating this program does not contribute importantly to the organization's accomplishing its exempt purpose and, therefore, is an unrelated trade or business. 2012 ez tax form Miniature golf course. 2012 ez tax form   An exempt youth welfare organization operates a miniature golf course that is open to the general public. 2012 ez tax form The course, which is managed by salaried employees, is substantially similar to commercial courses. 2012 ez tax form The admission fees charged are comparable to fees of commercial facilities and are designed to return a profit. 2012 ez tax form   The operation of the miniature golf course in a commercial manner does not contribute importantly to the accomplishment of the organization's exempt purpose and, therefore, is an unrelated trade or business. 2012 ez tax form Sales of hearing aids. 2012 ez tax form   A tax-exempt hospital, whose primary activity is rehabilitation, sells hearing aids to patients. 2012 ez tax form This activity is an essential part of the hospital's program to test and evaluate patients with hearing deficiencies and contributes importantly to its exempt purpose. 2012 ez tax form It is not an unrelated trade or business. 2012 ez tax form Nonpatient laboratory testing. 2012 ez tax form   Nonpatient laboratory testing performed by a tax-exempt teaching hospital on specimens needed for the conduct of its teaching activities is not an unrelated trade or business. 2012 ez tax form However, laboratory testing performed by a tax-exempt non-teaching hospital on referred specimens from private office patients of staff physicians is an unrelated trade or business if these services are otherwise available in the community. 2012 ez tax form Selling endorsements. 2012 ez tax form   An exempt scientific organization enjoys an excellent reputation in the field of biological research. 2012 ez tax form It exploits this reputation regularly by selling endorsements of laboratory equipment to manufacturers. 2012 ez tax form Endorsing laboratory equipment does not contribute importantly to the accomplishment of any purpose for which exemption is granted to the organization. 2012 ez tax form Accordingly, the sale of endorsements is an unrelated trade or business. 2012 ez tax form Sponsoring entertainment events. 2012 ez tax form   An exempt university has a regular faculty and a regularly enrolled student body. 2012 ez tax form During the school year, the university sponsors the appearance of professional theater companies and symphony orchestras that present drama and musical performances for the students and faculty members. 2012 ez tax form Members of the general public also are admitted. 2012 ez tax form The university advertises these performances and supervises advance ticket sales at various places, including such university facilities as the cafeteria and the university bookstore. 2012 ez tax form Although the presentation of the performances makes use of an intangible generated by the university's exempt educational functions—the presence of the student body and faculty—such drama and music events contribute importantly to the overall educational and cultural functions of the university. 2012 ez tax form Therefore, the activity is not an unrelated trade or business. 2012 ez tax form Excluded Trade or Business Activities The following activities are specifically excluded from the definition of unrelated trade or business. 2012 ez tax form Volunteer workforce. 2012 ez tax form   Any trade or business in which substantially all the work is performed for the organization without compensation is not an unrelated trade or business. 2012 ez tax form Example 1. 2012 ez tax form A retail store operated by an exempt orphanage where unpaid volunteers perform substantially all the work in carrying on the business is not an unrelated trade or business. 2012 ez tax form Example 2. 2012 ez tax form A volunteer fire company conducts weekly public dances. 2012 ez tax form Holding public dances and charging admission on a regular basis may, given the facts and circumstances of a particular case, be considered an unrelated trade or business. 2012 ez tax form However, because the work at the dances is performed by unpaid volunteers, the activity is not an unrelated trade or business. 2012 ez tax form Convenience of members. 2012 ez tax form   A trade or business conducted by a 501(c)(3) organization or by a governmental college or university primarily for the convenience of its members, students, patients, officers, or employees is not an unrelated trade or business. 2012 ez tax form For example, a laundry operated by a college for the purpose of laundering dormitory linens and students' clothing is not an unrelated trade or business. 2012 ez tax form Qualified sponsorship activities. 2012 ez tax form   Soliciting and receiving qualified sponsorship payments is not an unrelated trade or business, and the payments are not subject to unrelated business income tax. 2012 ez tax form Qualified sponsorship payment. 2012 ez tax form   This is any payment made by a person engaged in a trade or business for which the person will receive no substantial benefit other than the use or acknowledgment of the business name, logo, or product lines in connection with the organization's activities. 2012 ez tax form “Use or acknowledgment” does not include advertising the sponsor's products or services. 2012 ez tax form The organization's activities include all its activities, whether or not related to its exempt purposes. 2012 ez tax form   For example, if, in return for receiving a sponsorship payment, an organization promises to use the sponsor's name or logo in acknowledging the sponsor's support for an educational or fundraising event, the payment is a qualified sponsorship payment and is not subject to the unrelated business income tax. 2012 ez tax form   Providing facilities, services, or other privileges (for example, complimentary tickets, pro-am playing spots in golf tournaments, or receptions for major donors) to a sponsor or the sponsor's designees in connection with a sponsorship payment does not affect whether the payment is a qualified sponsorship payment. 2012 ez tax form Instead, providing these goods or services is treated as a separate transaction in determining whether the organization has unrelated business income from the event. 2012 ez tax form Generally, if the services or facilities are not a substantial benefit or if providing them is a related business activity, the payments will not be subject to the unrelated business income tax. 2012 ez tax form   Similarly, the sponsor's receipt of a license to use an intangible asset (for example, a trademark, logo, or designation) of the organization is treated as separate from the qualified sponsorship transaction in determining whether the organization has unrelated business taxable income. 2012 ez tax form   If part of a payment would be a qualified sponsorship payment if paid separately, that part is treated as a separate payment. 2012 ez tax form For example, if a sponsorship payment entitles the sponsor to both product advertising and the use or acknowledgment of the sponsor's name or logo by the organization, then the unrelated business income tax does not apply to the part of the payment that is more than the fair market value of the product advertising. 2012 ez tax form Advertising. 2012 ez tax form   A payment is not a qualified sponsorship payment if, in return, the organization advertises the sponsor's products or services. 2012 ez tax form For information on the treatment of payments for advertising, see Exploitation of Exempt Activity—Advertising Sales in chapter 4. 2012 ez tax form   Advertising includes: Messages containing qualitative or comparative language, price information, or other indications of savings or value; Endorsements; and Inducements to purchase, sell, or use the products or services. 2012 ez tax form   The use of promotional logos or slogans that are an established part of the sponsor's identity is not, by itself, advertising. 2012 ez tax form In addition, mere distribution or display of a sponsor's product by the organization to the public at a sponsored event, whether for free or for remuneration, is considered use or acknowledgment of the product rather than advertising. 2012 ez tax form Exception for contingent payments. 2012 ez tax form   A payment is not a qualified sponsorship payment if its amount is contingent, by contract or otherwise, upon the level of attendance at one or more events, broadcast ratings, or other factors indicating the degree of public exposure to one or more events. 2012 ez tax form However, the fact that a sponsorship payment is contingent upon an event actually taking place or being broadcast does not, by itself, affect whether a payment qualifies. 2012 ez tax form Exception for periodicals. 2012 ez tax form   A payment is not a qualified sponsorship payment if it entitles the payer to the use or acknowledgment of the business name, logo, or product lines in the organization's periodical. 2012 ez tax form For this purpose, a periodical is any regularly scheduled and printed material (for example, a monthly journal) published by or on behalf of the organization. 2012 ez tax form It does not include material that is related to and primarily distributed in connection with a specific event conducted by the organization (for example, a program or brochure distributed at a sponsored event). 2012 ez tax form   The treatment of payments that entitle the payer to the depiction of the payer's name, logo, or products lines in an organization's periodical is determined under the rules that apply to advertising activities. 2012 ez tax form See Sales of advertising space under Examples, earlier in this chapter. 2012 ez tax form Also see Exploitation of Exempt Activity—Advertising Sales in chapter 4. 2012 ez tax form Exception for conventions and trade shows. 2012 ez tax form   A payment is not a qualified sponsorship payment if it is made in connection with any qualified convention or trade show activity. 2012 ez tax form The exclusion of qualified convention or trade show activities from the definition of unrelated trade or business is explained later under Convention or trade show activity. 2012 ez tax form Selling donated merchandise. 2012 ez tax form   A trade or business that consists of selling merchandise, substantially all of which the organization received as gifts or contributions, is not an unrelated trade or business. 2012 ez tax form For example, a thrift shop operated by a tax-exempt organization that sells donated clothes and books to the general public, with the proceeds going to the exempt organization, is not an unrelated trade or business. 2012 ez tax form Employee association sales. 2012 ez tax form   The sale of certain items by a local association of employees described in section 501(c)(4), organized before May 17, 1969, is not an unrelated trade or business if the items are sold for the convenience of the association's members at their usual place of employment. 2012 ez tax form This exclusion applies only to the sale of work-related clothes and equipment and items normally sold through vending machines, food dispensing facilities, or by snack bars. 2012 ez tax form Bingo games. 2012 ez tax form   Certain bingo games are not included in the term “unrelated trade or business. 2012 ez tax form ” To qualify for this exclusion, the bingo game must meet the following requirements. 2012 ez tax form It meets the legal definition of bingo. 2012 ez tax form It is legal where it is played. 2012 ez tax form It is played in a jurisdiction where bingo games are not regularly conducted by for-profit organizations. 2012 ez tax form Legal definition. 2012 ez tax form   For a game to meet the legal definition of bingo, wagers must be placed, winners must be determined, and prizes or other property must be distributed in the presence of all persons placing wagers in that game. 2012 ez tax form   A wagering game that does not meet the legal definition of bingo does not qualify for the exclusion, regardless of its name. 2012 ez tax form For example, “instant bingo,” in which a player buys a pre-packaged bingo card with pull-tabs that the player removes to determine if he or she is a winner, does not qualify. 2012 ez tax form Legal where played. 2012 ez tax form   This exclusion applies only if bingo is legal under the laws of the jurisdiction where it is conducted. 2012 ez tax form The fact that a jurisdiction's law that prohibits bingo is rarely enforced or is widely disregarded does not make the conduct of bingo legal for this purpose. 2012 ez tax form No for-profit games where played. 2012 ez tax form   This exclusion applies only if for-profit organizations cannot regularly conduct bingo games in any part of the same jurisdiction. 2012 ez tax form Jurisdiction is normally the entire state; however, in certain situations, local jurisdiction will control. 2012 ez tax form Example. 2012 ez tax form Tax-exempt organizations X and Y are organized under the laws of state N, which has a law that permits exempt organizations to conduct bingo games. 2012 ez tax form In addition, for-profit organizations are permitted to conduct bingo games in city S, a resort community located in county R. 2012 ez tax form Several for-profit organizations conduct nightly games. 2012 ez tax form Y conducts weekly bingo games in city S, while X conducts weekly games in county R. 2012 ez tax form Since state law confines the for-profit organizations to city S, local jurisdiction controls. 2012 ez tax form Y's bingo games conducted in city S are an unrelated trade or business. 2012 ez tax form However, X's bingo games conducted in county R outside of city S are not an unrelated trade or business. 2012 ez tax form Gambling activities other than bingo. 2012 ez tax form   Any game of chance conducted by an exempt organization in North Dakota is not an unrelated trade or business if conducting the game does not violate any state or local law. 2012 ez tax form Pole rentals. 2012 ez tax form   The term unrelated trade or business does not include qualified pole rentals by a mutual or cooperative telephone or electric company described in section 501(c)(12). 2012 ez tax form A qualified pole rental is the rental of a pole (or other structure used to support wires) if the pole (or other structure) is used: By the telephone or electric company to support one or more wires that the company uses in providing telephone or electric services to its members, and According to the rental, to support one or more wires (in addition to the wires described in 1 ) for use in connection with the transmission by wire of electricity or of telephone or other communications. 2012 ez tax form For this purpose, the term rental includes any sale of the right to use the pole (or other structure). 2012 ez tax form Distribution of low cost articles. 2012 ez tax form   The term unrelated trade or business does not include activities relating to the distribution of low cost articles incidental to soliciting charitable contributions. 2012 ez tax form This applies to organizations described in section 501 that are eligible to receive charitable contributions. 2012 ez tax form   A distribution is considered incidental to the solicitation of a charitable contribution if: The recipient did not request the distribution, The distribution is made without the express consent of the recipient, and The article is accompanied by a request for a charitable contribution to the organization and a statement that the recipient may keep the low cost article regardless of whether a contribution is made. 2012 ez tax form   An article is considered low cost if the cost of an item (or the aggregate costs if more than one item) distributed to a single recipient in a tax year is not more than $5, indexed annually for inflation. 2012 ez tax form The maximum cost of a low cost article is $9. 2012 ez tax form 70 for 2011. 2012 ez tax form The cost of an article is the cost to the organization that distributes the item or on whose behalf it is distributed. 2012 ez tax form Exchange or rental of member lists. 2012 ez tax form   The exchange or rental of member or donor lists between organizations described in section 501 that are eligible to receive charitable contributions is not included in the term unrelated trade or business. 2012 ez tax form Hospital services. 2012 ez tax form   The providing of certain services at or below cost by an exempt hospital to other exempt hospitals that have facilities for 100 or fewer inpatients is not an unrelated trade or business. 2012 ez tax form This exclusion applies only to services described in section 501(e)(1)(A). 2012 ez tax form Public entertainment activity. 2012 ez tax form   An unrelated trade or business does not include a qualified public entertainment activity. 2012 ez tax form A public entertainment activity is one traditionally conducted at a fair or exposition promoting agriculture and education, including any activity whose purpose is designed to attract the public to fairs or expositions or to promote the breeding of animals or the development of products or equipment. 2012 ez tax form   A qualified public entertainment activity is one conducted by a qualifying organization: In conjunction with an international, national, state, regional, or local fair or exposition; In accordance with state law that permits the activity to be operated or conducted solely by such an organization or by an agency, instrumentality, or political subdivision of the state; or In accordance with state law that permits an organization to be granted a license to conduct an activity for not more than 20 days on paying the state a lower percentage of the revenue from the activity than the state charges nonqualifying organizations that hold similar activities. 2012 ez tax form   For these purposes, a qualifying organization is an organization described in section 501(c)(3), 501(c)(4), or 501(c)(5) that regularly conducts an agricultural and educational fair or exposition as one of its substantial exempt purposes. 2012 ez tax form Its conducting qualified public entertainment activities will not affect determination of its exempt status. 2012 ez tax form Convention or trade show activity. 2012 ez tax form   An unrelated trade or business does not include qualified convention or trade show activities conducted at a convention, annual meeting, or trade show. 2012 ez tax form   A qualified convention or trade show activity is any activity of a kind traditionally conducted by a qualifying organization in conjunction with an international, national, state, regional, or local convention, annual meeting, or show if: One of the purposes of the organization in sponsoring the activity is promoting and stimulating interest in, and demand for, the products and services of that industry or educating the persons in attendance regarding new products and services or new rules and regulations affecting the industry; and The show is designed to achieve its purpose through the character of the exhibits and the extent of the industry products that are displayed. 2012 ez tax form   For these purposes, a qualifying organization is one described in section 501(c)(3), 501(c)(4), 501(c)(5), or 501(c)(6). 2012 ez tax form The organization must regularly conduct, as one of its substantial exempt purposes, a qualified convention or trade show activity. 2012 ez tax form   The rental of display space to exhibitors (including exhibitors who are suppliers) at a qualified convention or trade show is not an unrelated trade or business even if the exhibitors who rent the space are permitted to sell or solicit orders. 2012 ez tax form For this purpose, a supplier's exhibit is one in which the exhibitor displays goods or services that are supplied to, rather than by, members of the qualifying organization in the conduct of these members' own trades or businesses. 2012 ez tax form    Certain Internet activities conducted by a trade association described in section 501(c)(6) will be considered qualified convention and trade show activity if conducted on a special supplementary section of the association's website in conjunction with a trade show conducted by the association. 2012 ez tax form The trade show itself must be a qualified convention and trade show activity. 2012 ez tax form The supplementary section of the website must be ancillary to, and serve to augment and enhance, the trade show, as when it makes available the same information available at the trade show and is available only during a time period that coincides with the time period that the trade show is in operation. 2012 ez tax form Conversely, Internet activities that are not conducted in conjunction with a qualified convention and trade show activity and that do not augment and enhance the trade show cannot themselves be qualified convention and trade show activity. 2012 ez tax form Prev  Up  Next   Home   More Online Publications
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The 2012 Ez Tax Form

2012 ez tax form Internal Revenue Bulletin:  2010-9  March 1, 2010  Rev. 2012 ez tax form Proc. 2012 ez tax form 2010-18 Table of Contents SECTION 1. 2012 ez tax form PURPOSE SECTION 2. 2012 ez tax form BACKGROUND SECTION 3. 2012 ez tax form SCOPE SECTION 4. 2012 ez tax form APPLICATION SECTION 5. 2012 ez tax form EFFECTIVE DATE SECTION 6. 2012 ez tax form DRAFTING INFORMATION SECTION 1. 2012 ez tax form PURPOSE This revenue procedure provides: (1) limitations on depreciation deductions for owners of passenger automobiles first placed in service by the taxpayer during calendar year 2010, including a separate table of limitations on depreciation deductions for trucks and vans; and (2) the amounts to be included in income by lessees of passenger automobiles first leased by the taxpayer during calendar year 2010, including a separate table of inclusion amounts for lessees of trucks and vans. 2012 ez tax form The tables detailing these depreciation limitations and lessee inclusion amounts reflect the automobile price inflation adjustments required by § 280F(d)(7) of the Internal Revenue Code. 2012 ez tax form SECTION 2. 2012 ez tax form BACKGROUND . 2012 ez tax form 01 For owners of passenger automobiles, § 280F(a) imposes dollar limitations on the depreciation deduction for the year the taxpayer places the passenger automobile in service and for each succeeding year. 2012 ez tax form Section 280F(d)(7) requires the amounts allowable as depreciation deductions to be increased by a price inflation adjustment amount for passenger automobiles placed in service after 1988. 2012 ez tax form The method of calculating this price inflation amount for trucks and vans placed in service in or after calendar year 2003 uses a different CPI “automobile component” (the “new trucks” component) than that used in the price inflation amount calculation for other passenger automobiles (the “new cars” component), resulting in somewhat higher depreciation deductions for trucks and vans. 2012 ez tax form This change reflects the higher rate of price inflation for trucks and vans since 1988. 2012 ez tax form . 2012 ez tax form 02 Section 280F(c) requires a reduction in the deduction allowed to the lessee of a leased passenger automobile. 2012 ez tax form The reduction must be substantially equivalent to the limitations on the depreciation deductions imposed on owners of passenger automobiles. 2012 ez tax form Under § 1. 2012 ez tax form 280F-7(a) of the Income Tax Regulations, this reduction requires a lessee to include in gross income an inclusion amount determined by applying a formula to the amount obtained from a table. 2012 ez tax form One table applies to lessees of trucks and vans and another table applies to all other passenger automobiles. 2012 ez tax form Each table shows inclusion amounts for a range of fair market values for each taxable year after the passenger automobile is first leased. 2012 ez tax form SECTION 3. 2012 ez tax form SCOPE . 2012 ez tax form 01 The limitations on depreciation deductions in section 4. 2012 ez tax form 01(2) of this revenue procedure apply to passenger automobiles (other than leased passenger automobiles) that are placed in service by the taxpayer in calendar year 2010, and continue to apply for each taxable year that the passenger automobile remains in service. 2012 ez tax form . 2012 ez tax form 02 The tables in section 4. 2012 ez tax form 02 of this revenue procedure apply to leased passenger automobiles for which the lease term begins during calendar year 2010. 2012 ez tax form Lessees of these passenger automobiles must use these tables to determine the inclusion amount for each taxable year during which the passenger automobile is leased. 2012 ez tax form See Rev. 2012 ez tax form Proc. 2012 ez tax form 2005-13, 2005-1 C. 2012 ez tax form B. 2012 ez tax form 759, for passenger automobiles first leased before calendar year 2006; Rev. 2012 ez tax form Proc. 2012 ez tax form 2006-18, 2006-1 C. 2012 ez tax form B. 2012 ez tax form 645, for passenger automobiles first leased during calendar year 2006; Rev. 2012 ez tax form Proc. 2012 ez tax form 2007-30, 2007-1 C. 2012 ez tax form B. 2012 ez tax form 1104, for passenger automobiles first leased during calendar year 2007; Rev. 2012 ez tax form Proc. 2012 ez tax form 2008-22, 2008-12 I. 2012 ez tax form R. 2012 ez tax form B. 2012 ez tax form 658, for passenger automobiles first leased during calendar year 2008; and Rev. 2012 ez tax form Proc. 2012 ez tax form 2009-24, 2009-17 I. 2012 ez tax form R. 2012 ez tax form B. 2012 ez tax form 885, for passenger automobiles first leased during calendar year 2009. 2012 ez tax form SECTION 4. 2012 ez tax form APPLICATION . 2012 ez tax form 01 Limitations on Depreciation Deductions for Certain Automobiles. 2012 ez tax form (1) Amount of the inflation adjustment. 2012 ez tax form (a) Passenger automobiles (other than trucks or vans). 2012 ez tax form Under § 280F(d)(7)(B)(i), the automobile price inflation adjustment for any calendar year is the percentage (if any) by which the CPI automobile component for October of the preceding calendar year exceeds the CPI automobile component for October 1987. 2012 ez tax form The term “CPI automobile component” is defined in § 280F(d)(7)(B)(ii) as the “automobile component” of the Consumer Price Index for all Urban Consumers published by the Department of Labor. 2012 ez tax form The new car component of the CPI was 115. 2012 ez tax form 2 for October 1987 and 137. 2012 ez tax form 851 for October 2009. 2012 ez tax form The October 2009 index exceeded the October 1987 index by 22. 2012 ez tax form 651. 2012 ez tax form Therefore, the automobile price inflation adjustment for 2010 for passenger automobiles (other than trucks and vans) is 19. 2012 ez tax form 66 percent (22. 2012 ez tax form 651/115. 2012 ez tax form 2 x 100%). 2012 ez tax form The dollar limitations in § 280F(a) are multiplied by a factor of 0. 2012 ez tax form 1966, and the resulting increases, after rounding to the nearest $100, are added to the 1988 limitations to give the depreciation limitations applicable to passenger automobiles (other than trucks and vans) for calendar year 2010. 2012 ez tax form This adjustment applies to all passenger automobiles (other than trucks and vans) that are first placed in service in calendar year 2010. 2012 ez tax form (b) Trucks and vans. 2012 ez tax form To determine the dollar limitations for trucks and vans first placed in service during calendar year 2010, the new truck component of the CPI is used instead of the new car component. 2012 ez tax form The new truck component of the CPI was 112. 2012 ez tax form 4 for October 1987 and 140. 2012 ez tax form 897 for October 2009. 2012 ez tax form The October 2009 index exceeded the October 1987 index by 28. 2012 ez tax form 497. 2012 ez tax form Therefore, the automobile price inflation adjustment for 2010 for trucks and vans is 25. 2012 ez tax form 35 percent (28. 2012 ez tax form 497/112. 2012 ez tax form 4 x 100%). 2012 ez tax form The dollar limitations in § 280F(a) are multiplied by a factor of 0. 2012 ez tax form 2535, and the resulting increases, after rounding to the nearest $100, are added to the 1988 limitations to give the depreciation limitations for trucks and vans. 2012 ez tax form This adjustment applies to all trucks and vans that are first placed in service in calendar year 2010. 2012 ez tax form (2) Amount of the limitation. 2012 ez tax form Tables 1 and 2 contain the dollar amount of the depreciation limitation for each taxable year for passenger automobiles a taxpayer places in service in calendar year 2010. 2012 ez tax form Use Table 1 for a passenger automobile (other than a truck or van) and Table 2 for a truck or van placed in service in calendar year 2010. 2012 ez tax form REV. 2012 ez tax form PROC. 2012 ez tax form 2010-18 TABLE 1 DEPRECIATION LIMITATIONS FOR PASSENGER AUTOMOBILES (THAT ARE NOT TRUCKS OR VANS) PLACED IN SERVICE IN CALENDAR YEAR 2010 Tax Year Amount 1st Tax Year $3,060 2nd Tax Year $4,900 3rd Tax Year $2,950 Each Succeeding Year $1,775 REV. 2012 ez tax form PROC. 2012 ez tax form 2010-18 TABLE 2 DEPRECIATION LIMITATIONS FOR TRUCKS AND VANS PLACED IN SERVICE IN CALENDAR YEAR 2010 Tax Year Amount 1st Tax Year $3,160 2nd Tax Year $5,100 3rd Tax Year $3,050 Each Succeeding Year $1,875 . 2012 ez tax form 02 Inclusions in Income of Lessees of Passenger Automobiles. 2012 ez tax form A taxpayer must follow the procedures in § 1. 2012 ez tax form 280F-7(a) for determining the inclusion amounts for passenger automobiles first leased in calendar year 2010. 2012 ez tax form In applying these procedures, lessees of passenger automobiles other than trucks and vans should use Table 3 of this revenue procedure, while lessees of trucks and vans should use Table 4 of this revenue procedure. 2012 ez tax form REV. 2012 ez tax form PROC. 2012 ez tax form 2010-18 TABLE 3 DOLLAR AMOUNTS FOR PASSENGER AUTOMOBILES (THAT ARE NOT TRUCKS OR VANS) WITH A LEASE TERM BEGINNING IN CALENDAR YEAR 2010 Fair Market Value of Passenger Automobile Tax Year During Lease Over Not Over 1st 2nd 3rd 4th 5th & Later $16,700 $17,000 3 7 10 11 14 17,000 17,500 4 8 13 15 16 17,500 18,000 5 10 16 19 21 18,000 18,500 6 13 18 23 26 18,500 19,000 7 15 22 26 31 19,000 19,500 8 17 25 30 35 19,500 20,000 9 19 29 34 39 20,000 20,500 10 21 32 38 44 20,500 21,000 11 23 35 42 48 21,000 21,500 12 26 38 45 53 21,500 22,000 13 28 41 50 57 22,000 23,000 14 31 46 56 63 23,000 24,000 16 36 52 63 73 24,000 25,000 18 40 59 71 81 25,000 26,000 20 44 66 78 90 26,000 27,000 22 49 71 86 100 27,000 28,000 24 53 78 94 108 28,000 29,000 26 57 85 101 118 29,000 30,000 28 61 92 109 126 30,000 31,000 30 66 97 117 135 31,000 32,000 32 70 104 125 144 32,000 33,000 34 74 111 132 153 33,000 34,000 36 79 117 140 161 34,000 35,000 38 83 123 148 171 35,000 36,000 40 87 130 156 179 36,000 37,000 42 92 136 163 188 37,000 38,000 44 96 143 170 198 38,000 39,000 46 100 149 179 206 39,000 40,000 48 105 155 186 215 40,000 41,000 50 109 162 194 224 41,000 42,000 52 113 169 201 233 42,000 43,000 54 118 174 210 241 43,000 44,000 56 122 181 217 251 44,000 45,000 58 126 188 225 259 45,000 46,000 60 131 194 232 269 46,000 47,000 61 135 201 240 277 47,000 48,000 63 140 207 248 286 48,000 49,000 65 144 213 256 295 49,000 50,000 67 148 220 263 304 50,000 51,000 69 153 226 271 313 51,000 52,000 71 157 232 279 322 52,000 53,000 73 161 239 287 331 53,000 54,000 75 166 245 294 340 54,000 55,000 77 170 252 302 348 55,000 56,000 79 174 258 310 358 56,000 57,000 81 178 265 318 366 57,000 58,000 83 183 271 325 375 58,000 59,000 85 187 278 333 384 59,000 60,000 87 191 284 341 393 60,000 62,000 90 198 294 352 406 62,000 64,000 94 207 306 368 424 64,000 66,000 98 215 320 382 443 66,000 68,000 102 224 332 398 460 68,000 70,000 106 232 346 413 478 70,000 72,000 110 241 358 429 496 72,000 74,000 114 250 371 444 513 74,000 76,000 118 258 384 460 531 76,000 78,000 122 267 396 476 549 78,000 80,000 126 276 409 491 566 80,000 85,000 132 291 432 518 598 85,000 90,000 142 313 464 556 643 90,000 95,000 152 334 497 594 687 95,000 100,000 162 356 528 634 731 100,000 110,000 177 388 577 691 798 110,000 120,000 196 432 641 768 887 120,000 130,000 216 475 705 846 976 130,000 140,000 236 518 770 922 1,065 140,000 150,000 256 561 834 1,000 1,154 150,000 160,000 275 605 898 1,077 1,243 160,000 170,000 295 648 963 1,153 1,333 170,000 180,000 315 691 1,027 1,231 1,421 180,000 190,000 334 735 1,091 1,308 1,510 190,000 200,000 354 778 1,155 1,386 1,599 200,000 210,000 374 821 1,220 1,462 1,688 210,000 220,000 393 865 1,284 1,539 1,777 220,000 230,000 413 908 1,348 1,617 1,866 230,000 240,000 433 951 1,413 1,693 1,956 240,000 and up 453 995 1,476 1,771 2,044 REV. 2012 ez tax form PROC. 2012 ez tax form 2010-18 TABLE 4 DOLLAR AMOUNTS FOR TRUCKS AND VANS WITH A LEASE TERM BEGINNING IN CALENDAR YEAR 2010 Fair Market Value of Passenger Automobile Tax Year During Lease Over Not Over 1st 2nd 3rd 4th 5th & Later 17,000 17,500 3 6 9 10 11 17,500 18,000 4 8 12 14 16 18,000 18,500 5 10 15 18 21 18,500 19,000 6 12 19 22 24 19,000 19,500 7 15 21 26 29 19,500 20,000 8 17 25 29 34 20,000 20,500 9 19 28 33 38 20,500 21,000 10 21 31 37 43 21,000 21,500 11 23 35 41 47 21,500 22,000 12 25 38 45 51 22,000 23,000 13 29 42 51 58 23,000 24,000 15 33 49 58 67 24,000 25,000 17 37 56 66 76 25,000 26,000 19 42 62 73 85 26,000 27,000 21 46 68 82 93 27,000 28,000 23 50 75 89 103 28,000 29,000 25 55 81 97 111 29,000 30,000 27 59 88 104 121 30,000 31,000 29 63 94 113 129 31,000 32,000 31 68 100 120 138 32,000 33,000 33 72 107 127 148 33,000 34,000 35 76 114 135 156 34,000 35,000 37 81 119 143 165 35,000 36,000 39 85 126 151 174 36,000 37,000 41 89 133 158 183 37,000 38,000 43 94 139 166 191 38,000 39,000 45 98 145 174 201 39,000 40,000 47 102 152 182 209 40,000 41,000 49 106 159 189 218 41,000 42,000 51 111 164 198 227 42,000 43,000 53 115 171 205 236 43,000 44,000 55 119 178 213 245 44,000 45,000 57 124 184 220 254 45,000 46,000 59 128 190 228 263 46,000 47,000 60 133 197 235 272 47,000 48,000 62 137 203 244 280 48,000 49,000 64 142 209 251 290 49,000 50,000 66 146 216 259 298 50,000 51,000 68 150 223 266 308 51,000 52,000 70 154 229 275 316 52,000 53,000 72 159 235 282 325 53,000 54,000 74 163 242 290 334 54,000 55,000 76 167 249 297 343 55,000 56,000 78 172 254 305 352 56,000 57,000 80 176 261 313 361 57,000 58,000 82 180 268 320 370 58,000 59,000 84 185 274 328 378 59,000 60,000 86 189 280 336 388 60,000 62,000 89 195 291 347 401 62,000 64,000 93 204 303 363 418 64,000 66,000 97 213 315 379 436 66,000 68,000 101 221 329 394 454 68,000 70,000 105 230 341 410 472 70,000 72,000 109 239 354 424 490 72,000 74,000 113 247 367 440 508 74,000 76,000 117 256 380 455 526 76,000 78,000 121 264 393 471 543 78,000 80,000 125 273 406 486 561 80,000 85,000 131 289 428 513 592 85,000 90,000 141 310 461 552 636 90,000 95,000 151 332 492 591 681 95,000 100,000 161 353 525 629 726 100,000 110,000 176 386 573 686 793 110,000 120,000 195 430 637 763 882 120,000 130,000 215 473 701 841 971 130,000 140,000 235 516 766 918 1,059 140,000 150,000 255 559 830 995 1,149 150,000 160,000 274 603 894 1,072 1,238 160,000 170,000 294 646 958 1,150 1,326 170,000 180,000 314 689 1,023 1,226 1,416 180,000 190,000 333 733 1,087 1,303 1,505 190,000 200,000 353 776 1,151 1,381 1,594 200,000 210,000 373 819 1,216 1,457 1,683 210,000 220,000 392 863 1,280 1,534 1,772 220,000 230,000 412 906 1,344 1,612 1,861 230,000 240,000 432 949 1,409 1,689 1,949 240,000 and up 452 992 1,473 1,766 2,039 SECTION 5. 2012 ez tax form EFFECTIVE DATE This revenue procedure applies to passenger automobiles that a taxpayer first places in service or first leases during calendar year 2010. 2012 ez tax form SECTION 6. 2012 ez tax form DRAFTING INFORMATION The principal author of this revenue procedure is Bernard P. 2012 ez tax form Harvey of the Office of Associate Chief Counsel (Income Tax & Accounting). 2012 ez tax form For further information regarding this revenue procedure, contact Mr. 2012 ez tax form Harvey at (202) 622-4930 (not a toll-free call). 2012 ez tax form Prev  Up  Next   Home   More Internal Revenue Bulletins