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Amend A 2011 Tax Return

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Amend A 2011 Tax Return

Amend a 2011 tax return Publication 3 - Main Content Table of Contents Gross IncomeForeign Source Income Military Spouses Residency Relief Act (MSRRA) Community Property Form W-2 Codes Adjustments to IncomeArmed Forces Reservists Individual Retirement Arrangements Moving Expenses Combat Zone ExclusionCombat Zone Serving in a Combat Zone Amount of Exclusion Alien StatusResident Aliens Nonresident Aliens Dual-Status Aliens Sale of HomePeriod of suspension. Amend a 2011 tax return Qualified official extended duty. Amend a 2011 tax return ForeclosuresLump Sum Portion of Settlement Payment. Amend a 2011 tax return Interest Payment on Lump Sum Portion of Settlement Payment. Amend a 2011 tax return Lost Equity Portion of Settlement Payment. Amend a 2011 tax return The rules that apply to a lost equity payment you received for the foreclosure of a property that was not your main home are different. Amend a 2011 tax return Interest Payment on Lost Equity Portion of Settlement Payment. Amend a 2011 tax return Itemized DeductionsEmployee Business Expenses Repayments CreditsFirst-Time Homebuyer Credit Child Tax Credit Earned Income Credit Credit for Excess Social Security Tax Withheld Forgiveness of Decedent's Tax LiabilityCombat Zone Related Forgiveness Terrorist or Military Action Related Forgiveness Claims for Tax Forgiveness Filing ReturnsSame-Sex Marriage Where To File When To File Signing Returns Extension of DeadlinesService That Qualifies for an Extension of Deadline Length of Extension Actions for Which Deadlines Are Extended Deferral of Payment Maximum Rate of Interest How To Get Tax HelpLow Income Taxpayer Clinics Gross Income Members of the Armed Forces receive many different types of pay and allowances. Amend a 2011 tax return Some are included in gross income while others are excluded from gross income. Amend a 2011 tax return Included items (Table 1) are subject to tax and must be reported on your tax return. Amend a 2011 tax return Excluded items (Table 2) are not subject to tax, but may have to be shown on your tax return. Amend a 2011 tax return For information on the exclusion of pay for service in a combat zone and other tax benefits for combat zone participants, see Combat Zone Exclusion and Extension of Deadlines , later. Amend a 2011 tax return Table 1. Amend a 2011 tax return Included Items These items are included in gross income, unless the pay is for service in a combat zone. Amend a 2011 tax return Basic pay • Active duty   Bonus pay • Career status   • Attendance at a designated service school     • Enlistment  • Officer   • Back wages     • Overseas extension   • CONUS COLA       • Reenlistment   • Drills         • Reserve training         • Training duty   Other pay  • Accrued leave          • High deployment per diem Special • Aviation career incentives      • Personal money allowances paid to pay • Career sea     high-ranking officers   • Diving duty      • Student loan repayment from programs   • Foreign duty (outside the 48 contiguous     such as the Department of Defense   states and the District of Columbia)     Educational Loan Repayment Program   • Foreign language proficiency     when year's service (requirement) is not   • Hardship duty     attributable to a combat zone   • Hostile fire or imminent danger         • Medical and dental officers   Incentive pay  • Submarine   • Nuclear-qualified officers      • Flight   • Optometry      • Hazardous duty   • Pharmacy      • High altitude/Low Opening (HALO)   • Special compensation for assistance with activities of daily living (SCAADL)         • Special duty assignment pay         • Veterinarian         • Voluntary Separation Incentive       Basic allowance for housing (BAH). Amend a 2011 tax return   You can still deduct mortgage interest and real estate taxes on your home if you pay these expenses with your BAH. Amend a 2011 tax return Table 2. Amend a 2011 tax return Excluded Items The exclusion for certain items applies whether the item is furnished in kind or is a reimbursement or allowance. Amend a 2011 tax return There is no exclusion for the personal use of a government-provided vehicle. Amend a 2011 tax return Combat  zone pay • Compensation for active service while in a combat zone Note: Limited amount for officers     • Housing and cost-of-living allowances abroad paid by the U. Amend a 2011 tax return S. Amend a 2011 tax return Government or by a foreign government         • OHA (Overseas Housing Allowance)                     Other pay • Defense counseling         • Disability, including payments received for injuries incurred as a direct result of a terrorist or military action         • Group-term life insurance   Moving • Dislocation   • Professional education   allowances • Military base realignment and   • ROTC educational and subsistence     closure benefit    allowances     (the exclusion is limited as   • State bonus pay for service in a     described above)   combat zone     • Move-in housing   • Survivor and retirement protection     • Moving household and   plan premiums     personal items   • Uniform allowances     • Moving trailers or mobile homes   • Uniforms furnished to enlisted     • Storage   personnel     • Temporary lodging and         temporary lodging expenses                 Travel • Annual round trip for dependent Death • Burial services   allowances students allowances • Death gratuity payments to     • Leave between consecutive   eligible survivors     overseas tours   • Travel of dependents to burial site     • Reassignment in a dependent         restricted status Family • Certain educational expenses for     • Transportation for you or your allowances dependents     dependents during ship overhaul   • Emergencies     or inactivation   • Evacuation to a place of safety     • Per diem   • Separation             In-kind military • Dependent-care assistance program Living • BAH (Basic Allowance for Housing)   benefits • Legal assistance allowances • BAS (Basic Allowance for Subsistence)     • Medical/dental care         • Commissary/exchange discounts         • Space-available travel on government aircraft           Death gratuity. Amend a 2011 tax return   Any death gratuity paid to a survivor of a member of the Armed Forces is excluded from gross income. Amend a 2011 tax return Differential wage payments. Amend a 2011 tax return   Differential wage payments are any payments made by an employer to an individual for a period during which the individual is performing service in the uniformed services while on active duty for a period of more than 30 days and that represent all or a portion of the wages the individual would have received from the employer if the individual was performing services for the employer. Amend a 2011 tax return These amounts are taxable and cannot be excluded as combat pay. Amend a 2011 tax return Military base realignment and closure benefit. Amend a 2011 tax return   Payments made under the Homeowners Assistance Program (HAP) generally are excluded from income. Amend a 2011 tax return However, the excludable amount cannot be more than the maximum amount described in subsection (c) of 42 USC 3374 as in effect on November 6, 2009. Amend a 2011 tax return Any part of the payment that is more than this limit is included in gross income. Amend a 2011 tax return For more information about the HAP, see http://hap. Amend a 2011 tax return usace. Amend a 2011 tax return army. Amend a 2011 tax return mil/Overview. Amend a 2011 tax return html. Amend a 2011 tax return Qualified reservist distribution (QRD). Amend a 2011 tax return   A QRD is a distribution to an individual of all or part of the individual's balance in a cafeteria plan or health flexible spending arrangement if: The individual was a reservist who was ordered or called to active duty for more than 179 days or for an indefinite period, and The distribution is made no sooner than the date the reservist was ordered or called to active duty and no later than the last day reimbursements could otherwise be made under the arrangement for the plan year which includes the date of the order or the call to duty. Amend a 2011 tax return A QRD is included in gross income and is subject to employment taxes. Amend a 2011 tax return The employer must include the QRD (reduced by after-tax contributions to the health flexible spending arrangement) as wages on Form W-2, Wage and Tax Statement. Amend a 2011 tax return Thrift Savings Plan (TSP) distributions. Amend a 2011 tax return   If you participate in the Uniformed Services TSP and receive a distribution from your account, the distribution is generally included in your taxable income. Amend a 2011 tax return   If your contributions included tax-exempt combat zone pay, the part of the distribution attributable to those contributions is tax exempt. Amend a 2011 tax return However, the earnings on the tax-exempt portion of the distribution are taxable. Amend a 2011 tax return The TSP will provide a statement showing the taxable and non-taxable portions of the distribution. Amend a 2011 tax return Roth Thrift Savings Plan (TSP) balance. Amend a 2011 tax return   You may be able to contribute to a designated Roth Account through the TSP known as the Roth TSP. Amend a 2011 tax return Roth TSP contributions are after-tax contributions, subject to the same contribution limits as the traditional TSP. Amend a 2011 tax return Qualified distributions from a Roth TSP are not included in your income. Amend a 2011 tax return For more details, see Thrift Savings Accounts in Part II of Publication 721, Tax Guide to U. Amend a 2011 tax return S. Amend a 2011 tax return Civil Service Retirement Benefits. Amend a 2011 tax return State bonus payments. Amend a 2011 tax return   Bonus payments made by a state (or a political subdivision thereof) to a member or former member of the uniformed services of the United States or to a dependent of such member are considered combat pay (and therefore may not be taxable) if the payments are made only because of the member's service in a combat zone. Amend a 2011 tax return See Combat Zone , later, for a list of designated combat zones. Amend a 2011 tax return Foreign Source Income If you are a U. Amend a 2011 tax return S. Amend a 2011 tax return citizen with income from sources outside the United States (foreign income), you must report all of that income (except for amounts that U. Amend a 2011 tax return S. Amend a 2011 tax return law allows you to exclude) on your tax return. Amend a 2011 tax return This is true whether you reside inside or outside the United States and whether or not you receive a Form W-2 or a Form 1099. Amend a 2011 tax return This applies to earned income (such as wages and tips) as well as unearned income (such as interest, dividends, capital gains, pensions, rents, and royalties). Amend a 2011 tax return Certain taxpayers can exclude income earned in foreign countries. Amend a 2011 tax return For 2013, this exclusion amount can be as much as $97,600. Amend a 2011 tax return However, the foreign earned income exclusion does not apply to the wages and salaries of military and civilian employees of the U. Amend a 2011 tax return S. Amend a 2011 tax return Government. Amend a 2011 tax return Employees of the U. Amend a 2011 tax return S. Amend a 2011 tax return Government include those who work at United States Armed Forces exchanges, commissioned and noncommissioned officers' messes, Armed Forces motion picture services, and similar personnel. Amend a 2011 tax return Other foreign income earned by military personnel or their spouses may be eligible for the foreign earned income exclusion. Amend a 2011 tax return For more information on the exclusion, see Publication 54. Amend a 2011 tax return Residents of American Samoa may be able to exclude income from American Samoa. Amend a 2011 tax return This possession exclusion does not apply to wages and salaries of military and civilian employees of the U. Amend a 2011 tax return S. Amend a 2011 tax return Government. Amend a 2011 tax return If you need information on the possession exclusion, see Publication 570, Tax Guide for Individuals With Income From U. Amend a 2011 tax return S. Amend a 2011 tax return Possessions. Amend a 2011 tax return Military Spouses Residency Relief Act (MSRRA) If you are the civilian spouse of an active duty U. Amend a 2011 tax return S. Amend a 2011 tax return military servicemember and your domicile is the same as the servicemember's, you can choose to keep your prior residence or domicile for tax purposes when you accompany the servicemember spouse, who is relocating under military orders to a new duty station in one of the 50 states, the District of Columbia, or a U. Amend a 2011 tax return S. Amend a 2011 tax return possession. Amend a 2011 tax return See Publication 570 for more information. Amend a 2011 tax return Domicile. Amend a 2011 tax return   Your domicile is the permanent legal home you intend to use for an indefinite or unlimited period, and to which, when absent, you intend to return. Amend a 2011 tax return It is not always where you presently live. Amend a 2011 tax return Community Property The pay you earn as a member of the Armed Forces may be subject to community property laws depending on your marital status, your domicile, and the nature of the payment. Amend a 2011 tax return The community property states are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. Amend a 2011 tax return Marital status. Amend a 2011 tax return   Community property rules apply to married persons whose domicile during the tax year was in a community property state. Amend a 2011 tax return The rules may affect your tax liability if you file separate returns or are divorced during the year. Amend a 2011 tax return Nevada, Washington, and California domestic partners. Amend a 2011 tax return   A registered domestic partner in Nevada, Washington, or California generally must report half the combined income of the individual and his or her domestic partner. Amend a 2011 tax return See Form 8958 and Publication 555, Community Property. Amend a 2011 tax return Nature of the payment. Amend a 2011 tax return   Active duty military pay is subject to community property laws. Amend a 2011 tax return Armed Forces retired or retainer pay may be subject to community property laws. Amend a 2011 tax return   For more information on community property laws, see Publication 555. Amend a 2011 tax return Form W-2 Codes Form W-2 shows your total pay and other compensation and the income tax, social security tax, and Medicare tax that was withheld during the year. Amend a 2011 tax return Form W-2 also shows other amounts that you may find important in box 12. Amend a 2011 tax return The amounts shown in box 12 are generally preceded by a code. Amend a 2011 tax return A list of codes used in box 12 is shown, next. Amend a 2011 tax return Form W-2 Reference Guide for Box 12 Codes A Uncollected social security or RRTA J Nontaxable sick pay T Adoption benefits   tax on tips             K 20% excise tax on excess golden V Income from exercise of B Uncollected Medicare tax on tips   parachute payments   nonstatutory stock option(s)             C Taxable cost of group-term life L Substantiated employee business W Employer contributions (including   insurance over $50,000   expense reimbursements   employee contributions through a           cafeteria plan) to an employee's D Elective deferrals under a section M Uncollected social security or RRTA   health savings account (HSA)   401(k) cash or deferred arrangement   tax on taxable cost of group-term life       plan (including a SIMPLE 401(k)   insurance over $50,000 (former Y Deferrals under a section 409A   arrangement)   employees only)   nonqualified deferred           compensation plan E Elective deferrals under a section N Uncollected Medicare tax on taxable       403(b) salary reduction agreement   cost of group-term life insurance Z Income under section 409A on a       over $50,000 (former employees only)   nonqualified deferred F Elective deferrals under a section       compensation plan   408(k)(6) salary reduction SEP P Excludable moving expense           reimbursements paid directly to AA Designated Roth contributions G Elective deferrals and employer   employee   under a section 401(k) plan   contributions (including nonelective           deferrals) to a section 457(b) Q Nontaxable combat pay BB Designated Roth contributions   deferred compensation plan       under a section 403(b) plan     R Employer contributions to an Archer     H Elective deferrals to a section   MSA DD Cost of employer-sponsored   501(c)(18)(D) tax-exempt       health coverage   organization plan S Employee salary reduction contributions under a section 408(p) SIMPLE  EE  Designated Roth contributions under a governmental section 457(b) plan  Note. Amend a 2011 tax return For more information on these codes, see your Form(s) W-2. Amend a 2011 tax return Adjustments to Income Adjusted gross income is your total income minus certain adjustments. Amend a 2011 tax return The following adjustments are of particular interest to members of the Armed Forces. Amend a 2011 tax return Armed Forces Reservists If you are a member of a reserve component of the Armed Forces and you travel more than 100 miles away from home in connection with your performance of services as a member of the reserves, you can deduct your unreimbursed travel expenses as an adjustment to income on line 24 of Form 1040, U. Amend a 2011 tax return S. Amend a 2011 tax return Individual Income Tax Return, rather than as a miscellaneous itemized deduction. Amend a 2011 tax return Include all unreimbursed expenses from the time you leave home until the time you return home. Amend a 2011 tax return The deduction is limited to the amount the federal government generally reimburses its employees for travel expenses. Amend a 2011 tax return For more information about this limit, see Per Diem and Car Allowances in chapter 6 of Publication 463. Amend a 2011 tax return Member of a reserve component. Amend a 2011 tax return   You are a member of a reserve component of the Armed Forces if you are in the Army, Navy, Marine Corps, Air Force, or Coast Guard Reserve, the Army National Guard of the United States, the Air National Guard of the United States, or the Reserve Corps of the Public Health Service. Amend a 2011 tax return How to report. Amend a 2011 tax return   If you have reserve-related travel that takes you more than 100 miles from home, you should first complete Form 2106, Employee Business Expenses, or Form 2106-EZ, Unreimbursed Employee Business Expenses. Amend a 2011 tax return Then enter on Form 1040, line 24, the part of your expenses, up to the federal rate, included on Form 2106, line 10, or Form 2106-EZ, line 6, that is for reserve-related travel more than 100 miles from your home. Amend a 2011 tax return Subtract this amount from the total on Form 2106, line 10, or Form 2106-EZ, line 6, and deduct the balance as an itemized deduction on Schedule A (Form 1040), line 21. Amend a 2011 tax return Example. Amend a 2011 tax return Captain Harris, a member of the Army Reserve, traveled to a location 220 miles from his home to perform his work in the reserves in April 2013. Amend a 2011 tax return He incurred $1,549 of unreimbursed expenses consisting of $249 for mileage (440 miles × 56. Amend a 2011 tax return 5 cents per mile), $300 for meals, and $1,000 for lodging. Amend a 2011 tax return He also had other deductible mileage expenses of $110 for several trips to a location 20 miles from his home. Amend a 2011 tax return Only 50% of his meal expenses are deductible. Amend a 2011 tax return He shows his total deductible travel expenses of $1,509 ($249 + $150 (50% of $300) + $1,000 + $110) on Form 2106, line 10. Amend a 2011 tax return He enters the $1,399 ($249 + $150 + $1,000) for travel over 100 miles from home on Form 1040, line 24. Amend a 2011 tax return He then subtracts that $1,399 from the amount on Form 2106, $1,509, and enters $110 on Schedule A (Form 1040), line 21. Amend a 2011 tax return Individual Retirement Arrangements Generally, you can deduct the lesser of the contributions to your traditional individual retirement arrangement (IRA) for the year or the general limit (or spousal IRA limit, if applicable). Amend a 2011 tax return However, if you or your spouse was covered by an employer-maintained retirement plan at any time during the year for which contributions were made, you may not be able to deduct all of the contributions. Amend a 2011 tax return The Form W-2 you or your spouse receives from an employer has a box used to indicate whether you were covered for the year. Amend a 2011 tax return The “Retirement plan” box should have a mark in it if you were covered. Amend a 2011 tax return For purposes of a deduction for contributions to a traditional IRA, Armed Forces members (including reservists on active duty for more than 90 days during the year) are considered covered by an employer-maintained retirement plan. Amend a 2011 tax return Individuals serving in the U. Amend a 2011 tax return S. Amend a 2011 tax return Armed Forces or in support of the U. Amend a 2011 tax return S. Amend a 2011 tax return Armed Forces in designated combat zones have additional time to make a qualified retirement contribution to an IRA. Amend a 2011 tax return For more information on this extension of deadline provision, see Extension of Deadlines , later. Amend a 2011 tax return For more information on IRAs, see Publication 590. Amend a 2011 tax return Combat Pay For IRA purposes, your compensation includes nontaxable combat pay. Amend a 2011 tax return This means that even though you do not have to include the combat pay in your gross income, you do include it in your compensation when figuring the limits on contributions and deductions of contributions to IRAs. Amend a 2011 tax return Qualified Reservist Distributions A qualified reservist distribution is defined below. Amend a 2011 tax return It is not subject to the 10% additional tax on early distributions from certain retirement plans. Amend a 2011 tax return Definition. Amend a 2011 tax return   A distribution you receive is a qualified reservist distribution if the following requirements are met. Amend a 2011 tax return You were ordered or called to active duty after September 11, 2001. Amend a 2011 tax return You were ordered or called to active duty for a period of more than 179 days or for an indefinite period because you are a member of a reserve component (see Member of a reserve component , earlier, under Armed Forces Reservists. Amend a 2011 tax return ) The distribution is from an IRA or from amounts attributable to elective deferrals under a section 401(k) or 403(b) plan or a similar arrangement. Amend a 2011 tax return The distribution was made no earlier than the date of the order or call to active duty and no later than the close of the active duty period. Amend a 2011 tax return Qualified Reservist Repayments You may be able to contribute (repay) to an IRA amounts equal to any qualified reservist distributions (defined earlier) you received. Amend a 2011 tax return You can make these repayment contributions even if they would cause your total contributions to the IRA to be more than the general limit on contributions. Amend a 2011 tax return You make these repayment contributions to an IRA, even if you received the qualified reservist distribution from a section 401(k) or 403(b) plan or a similar arrangement. Amend a 2011 tax return Limit. Amend a 2011 tax return   Your qualified reservist repayments cannot be more than your qualified reservist distributions. Amend a 2011 tax return When repayment contributions can be made. Amend a 2011 tax return   You cannot make these repayment contributions after the date that is 2 years after your active duty period ends. Amend a 2011 tax return No deduction. Amend a 2011 tax return   You cannot deduct qualified reservist repayments. Amend a 2011 tax return Figuring your IRA deduction. Amend a 2011 tax return   The repayment of qualified reservist distributions does not affect the amount you can deduct as an IRA contribution. Amend a 2011 tax return Reporting the repayment. Amend a 2011 tax return   If you repay a qualified reservist distribution, include the amount of the repayment with nondeductible contributions on line 1 of Form 8606, Nondeductible IRAs. Amend a 2011 tax return Moving Expenses To deduct moving expenses, you generally must meet certain time and distance tests. Amend a 2011 tax return However, if you are a member of the Armed Forces on active duty and you move because of a permanent change of station, you do not have to meet these tests. Amend a 2011 tax return You can deduct your unreimbursed moving expenses on Form 3903. Amend a 2011 tax return Permanent change of station. Amend a 2011 tax return   A permanent change of station includes: A move from your home to your first post of active duty, A move from one permanent post of duty to another, and A move from your last post of duty to your home or to a nearer point in the United States. Amend a 2011 tax return The move must occur within 1 year of ending your active duty or within the period allowed under the Joint Federal Travel Regulations. Amend a 2011 tax return Spouse and dependents. Amend a 2011 tax return   If you are the spouse or dependent of a member of the Armed Forces who deserts, is imprisoned, or dies, a permanent change of station for you includes a move to: The member's place of enlistment or induction, Your, or the member's, home of record, or A nearer point in the United States. Amend a 2011 tax return   If the military moves you to or from a different location than the member, the moves are treated as a single move to your new main job location. Amend a 2011 tax return Services or reimbursements provided by the government. Amend a 2011 tax return   Do not include in your income the value of moving and storage services provided by the government because of a permanent change of station. Amend a 2011 tax return Similarly, do not include in income amounts received as a dislocation allowance, temporary lodging expense, temporary lodging allowance, or move-in housing allowance. Amend a 2011 tax return   Generally, if the total reimbursements or allowances that you receive from the government because of the move are more than your actual moving expenses, the excess is included in your wages on Form W-2. Amend a 2011 tax return However, if any reimbursements or allowances (other than dislocation, temporary lodging, temporary lodging expense, or move-in housing allowances) exceed the cost of moving and the excess is not included in your wages on Form W-2, the excess still must be included in gross income on Form 1040, line 7. Amend a 2011 tax return   Use Form 3903 to deduct qualified expenses that exceed your reimbursements and allowances (including dislocation, temporary lodging, temporary lodging expense, or move-in housing allowances that are excluded from gross income). Amend a 2011 tax return   If you must relocate and your spouse and dependents move to or from a different location, do not include in income reimbursements, allowances, or the value of moving and storage services provided by the government to move you and your spouse and dependents to and from the separate locations. Amend a 2011 tax return   Do not deduct any expenses for moving services that were provided by the government. Amend a 2011 tax return Also, do not deduct any expenses that were reimbursed by an allowance you did not include in income. Amend a 2011 tax return Deductible Moving Expenses If you move because of a permanent change of station, you can deduct the reasonable unreimbursed expenses of moving you and members of your household. Amend a 2011 tax return You can deduct expenses (if not reimbursed or furnished in kind) for: Moving household goods and personal effects, and Travel. Amend a 2011 tax return Moving household goods and personal effects. Amend a 2011 tax return   You can deduct the expenses of moving your household goods and personal effects, including expenses for hauling a trailer, packing, crating, in-transit storage, and insurance. Amend a 2011 tax return You cannot deduct expenses for moving furniture or other goods you bought on the way from your old home to your new home. Amend a 2011 tax return Storing and insuring household goods and personal effects. Amend a 2011 tax return   You can include only the cost of storing and insuring your household goods and personal effects within any period of 30 consecutive days after the day these goods and effects are moved from your former home and before they are delivered to your new home. Amend a 2011 tax return Travel. Amend a 2011 tax return   You can deduct the expenses of traveling (including lodging but not meals) from your old home to your new home, including car expenses and air fare. Amend a 2011 tax return You can deduct as car expenses either: Your actual out-of-pocket expenses such as gas and oil, or The standard mileage rate of 24 cents a mile. Amend a 2011 tax return   You can add parking fees and tolls to the amount claimed under either method. Amend a 2011 tax return You cannot deduct any expenses for meals. Amend a 2011 tax return You cannot deduct the cost of unnecessary side trips or lavish and extravagant lodging. Amend a 2011 tax return Member of your household. Amend a 2011 tax return   A member of your household is anyone who has both your former home and your new home as his or her main home. Amend a 2011 tax return It does not include a tenant or employee unless you can claim that person as a dependent. Amend a 2011 tax return Foreign Moves A foreign move is a move from the United States or its possessions to a foreign country or from one foreign country to another foreign country. Amend a 2011 tax return A move from a foreign country to the United States or its possessions is not a foreign move. Amend a 2011 tax return For a foreign move, the deductible moving expenses described earlier are expanded to include the reasonable expenses of: Moving your household goods and personal effects to and from storage, and Storing these items for part or all of the time the new job location remains your main job location. Amend a 2011 tax return The new job location must be outside the United States. Amend a 2011 tax return Reporting Moving Expenses Figure moving expense deductions on Form 3903. Amend a 2011 tax return Carry the deduction from Form 3903 to Form 1040, line 26. Amend a 2011 tax return For more information, see Publication 521 and Form 3903. Amend a 2011 tax return Combat Zone Exclusion If you are a member of the U. Amend a 2011 tax return S. Amend a 2011 tax return Armed Forces who serves in a combat zone (defined later), you can exclude certain pay from your income. Amend a 2011 tax return This pay is generally referred to as “combat pay. Amend a 2011 tax return ” You do not actually need to show the exclusion on your tax return because income that qualifies for the combat zone exclusion is not included in the wages reported on your Form W-2. Amend a 2011 tax return (See Form W-2 , later. Amend a 2011 tax return ) The month for which you receive the pay must be a month in which you either served in a combat zone or were hospitalized as a result of wounds, disease, or injury incurred while serving in the combat zone. Amend a 2011 tax return You do not have to receive the excluded pay while you are in a combat zone, are hospitalized, or in the same year you served in a combat zone. Amend a 2011 tax return If you are an enlisted member, warrant officer, or commissioned warrant officer, you can exclude the following amounts from your income. Amend a 2011 tax return (Other officer personnel are discussed under Amount of Exclusion , later. Amend a 2011 tax return ) Active duty pay earned in any month you served in a combat zone. Amend a 2011 tax return Imminent danger/hostile fire pay. Amend a 2011 tax return A reenlistment bonus if the voluntary extension or reenlistment occurs in a month you served in a combat zone. Amend a 2011 tax return Pay for accrued leave earned in any month you served in a combat zone. Amend a 2011 tax return The Department of Defense must determine that the unused leave was earned during that period. Amend a 2011 tax return Pay received for duties as a member of the Armed Forces in clubs, messes, post and station theaters, and other nonappropriated fund activities. Amend a 2011 tax return The pay must be earned in a month you served in a combat zone. Amend a 2011 tax return Awards for suggestions, inventions, or scientific achievements you are entitled to because of a submission you made in a month you served in a combat zone. Amend a 2011 tax return Student loan repayments. Amend a 2011 tax return If the entire year of service required to earn the repayment was performed in a combat zone, the entire repayment made because of that year of service is excluded. Amend a 2011 tax return If only part of that year of service was performed in a combat zone, only part of the repayment qualifies for exclusion. Amend a 2011 tax return For example, if you served in a combat zone for 5 months, 5/12 of your repayment qualifies for exclusion. Amend a 2011 tax return Retirement pay and pensions do not qualify for the combat zone exclusion. Amend a 2011 tax return Partial (month) service. Amend a 2011 tax return   If you serve in a combat zone for any part of one or more days during a particular month, you are entitled to an exclusion for that entire month. Amend a 2011 tax return Form W-2. Amend a 2011 tax return   The wages shown in box 1 of your 2013 Form W-2 should not include military pay excluded from your income under the combat zone exclusion provisions. Amend a 2011 tax return If it does, you will need to get a corrected Form W-2 from your finance office. Amend a 2011 tax return   You cannot exclude as combat pay any wages shown in box 1 of Form W-2. Amend a 2011 tax return Combat Zone A combat zone is any area the President of the United States designates by Executive Order as an area in which the U. Amend a 2011 tax return S. Amend a 2011 tax return Armed Forces are engaging or have engaged in combat. Amend a 2011 tax return An area usually becomes a combat zone and ceases to be a combat zone on the dates the President designates by Executive Order. Amend a 2011 tax return Afghanistan area. Amend a 2011 tax return   By Executive Order No. Amend a 2011 tax return 13239, Afghanistan (and airspace above) was designated as a combat zone beginning September 19, 2001. Amend a 2011 tax return On December 14, 2001, the following countries were certified by the Department of Defense for combat zone tax benefits due to their direct support of military operations in the Afghanistan combat zone. Amend a 2011 tax return Djibouti. Amend a 2011 tax return Jordan. Amend a 2011 tax return Kyrgyzstan. Amend a 2011 tax return Pakistan. Amend a 2011 tax return Somalia. Amend a 2011 tax return Syria. Amend a 2011 tax return Tajikistan. Amend a 2011 tax return Uzbekistan. Amend a 2011 tax return Yemen. Amend a 2011 tax return The Philippines. Amend a 2011 tax return  Note. Amend a 2011 tax return For the Philippines only, the personnel must be deployed in conjunction with Operation Enduring Freedom supporting military operations in the Afghanistan combat zone. Amend a 2011 tax return The Kosovo area. Amend a 2011 tax return   By Executive Order No. Amend a 2011 tax return 13119, the following locations (including airspace above) were designated as a combat zone beginning March 24, 1999. Amend a 2011 tax return Federal Republic of Yugoslavia (Serbia/Montenegro). Amend a 2011 tax return Albania. Amend a 2011 tax return Kosovo. Amend a 2011 tax return The Adriatic Sea. Amend a 2011 tax return The Ionian Sea—north of the 39th parallel. Amend a 2011 tax return Note. Amend a 2011 tax return The combat zone designation for Montenegro and Kosovo (previously a province within Serbia) under Executive Order 13119 remains in force even though Montenegro and Kosovo became independent nations since EO 13119 was signed. Amend a 2011 tax return Arabian peninsula. Amend a 2011 tax return   By Executive Order No. Amend a 2011 tax return 12744, the following locations (and airspace above) were designated as a combat zone beginning January 17, 1991. Amend a 2011 tax return The Persian Gulf. Amend a 2011 tax return The Red Sea. Amend a 2011 tax return The Gulf of Oman. Amend a 2011 tax return The part of the Arabian Sea that is north of 10 degrees north latitude and west of 68 degrees east longitude. Amend a 2011 tax return The Gulf of Aden. Amend a 2011 tax return The total land areas of Iraq, Kuwait, Saudi Arabia, Oman, Bahrain, Qatar, and the United Arab Emirates. Amend a 2011 tax return Jordan which is in direct support of the Arabian Peninsula. Amend a 2011 tax return Serving in a Combat Zone You are considered to be serving in a combat zone if you are either assigned on official temporary duty to a combat zone or you qualify for hostile fire/imminent danger pay while in a combat zone. Amend a 2011 tax return Service in a combat zone includes any periods you are absent from duty because of sickness, wounds, or leave. Amend a 2011 tax return If, as a result of serving in a combat zone, a person becomes a prisoner of war or is missing in action, that person is considered to be serving in the combat zone so long as he or she keeps that status for military pay purposes. Amend a 2011 tax return Hospitalized While Serving in a Combat Zone If you are hospitalized while serving in a combat zone, the wound, disease, or injury causing the hospitalization will be presumed to have been incurred while serving in the combat zone unless there is clear evidence to the contrary. Amend a 2011 tax return Example. Amend a 2011 tax return You are hospitalized for a specific disease in a combat zone where you have been serving for 3 weeks, and the disease for which you are hospitalized has an incubation period of 2 to 4 weeks. Amend a 2011 tax return The disease is presumed to have been incurred while you were serving in the combat zone. Amend a 2011 tax return On the other hand, if the incubation period of the disease is 1 year, the disease would not have been incurred while you were serving in the combat zone. Amend a 2011 tax return Hospitalized After Leaving a Combat Zone In some cases, the wound, disease, or injury may have been incurred while you were serving in the combat zone, even though you were not hospitalized until after you left. Amend a 2011 tax return In that case, you can exclude military pay earned while you are hospitalized as a result of the wound, disease, or injury. Amend a 2011 tax return Example. Amend a 2011 tax return You were hospitalized for a specific disease 3 weeks after you left the combat zone. Amend a 2011 tax return The incubation period of the disease is from 2 to 4 weeks. Amend a 2011 tax return The disease is presumed to have been incurred while serving in the combat zone. Amend a 2011 tax return Nonqualifying Presence in Combat Zone None of the following types of military service qualify as service in a combat zone. Amend a 2011 tax return Presence in a combat zone while on leave from a duty station located outside the combat zone. Amend a 2011 tax return Passage over or through a combat zone during a trip between two points that are outside a combat zone. Amend a 2011 tax return Presence in a combat zone solely for your personal convenience. Amend a 2011 tax return Service Outside Combat Zone Considered Service in Combat Zone Military service outside a combat zone is considered to be performed in a combat zone if: The Department of Defense designates that the service is in direct support of military operations in the combat zone, and The service qualifies you for special military pay for duty subject to hostile fire or imminent danger. Amend a 2011 tax return Military pay received for this service will qualify for the combat zone exclusion if all of the requirements (other than service in a combat zone) are met and the pay is verifiable by reference to military pay records. Amend a 2011 tax return Amount of Exclusion If you are an enlisted member, warrant officer, or commissioned warrant officer and you serve in a combat zone during any part of a month, you can exclude all of your military pay for that month. Amend a 2011 tax return It should not be included in the wages reported on your Form W-2. Amend a 2011 tax return You also can exclude military pay earned while you are hospitalized as a result of wounds, disease, or injury incurred in the combat zone. Amend a 2011 tax return If you are hospitalized, you cannot exclude any military pay received for any month of service that begins more than 2 years after the end of combat activities in the combat zone. Amend a 2011 tax return Your hospitalization does not have to be in the combat zone. Amend a 2011 tax return If you are a commissioned officer (other than a commissioned warrant officer), you can exclude your pay according to the rules just discussed. Amend a 2011 tax return However, the amount of your exclusion is limited to the highest rate of enlisted pay (plus imminent danger/hostile fire pay you received) for each month during any part of which you served in a combat zone or were hospitalized as a result of your service there. Amend a 2011 tax return Alien Status For tax purposes, an alien is an individual who is not a U. Amend a 2011 tax return S. Amend a 2011 tax return citizen. Amend a 2011 tax return An alien is in one of three categories: resident, nonresident, or dual-status. Amend a 2011 tax return Placement in the correct category is crucial in determining what income to report and what forms to file. Amend a 2011 tax return Under peacetime enlistment rules, you generally cannot enlist in the Armed Forces unless you are a citizen or have been legally admitted to the United States for permanent residence. Amend a 2011 tax return If you are an alien enlistee in the Armed Forces, you are probably a resident alien. Amend a 2011 tax return If, under an income tax treaty, you are considered a resident of a foreign country, see your base legal officer. Amend a 2011 tax return Other aliens who are in the United States only because of military assignments and who have a home outside the United States are nonresident aliens. Amend a 2011 tax return Guam and Puerto Rico have special rules. Amend a 2011 tax return Residents of those areas should contact their taxing authority with their questions. Amend a 2011 tax return Most members of the Armed Forces are U. Amend a 2011 tax return S. Amend a 2011 tax return citizens or resident aliens. Amend a 2011 tax return However, if you have questions about your alien status or the alien status of your dependents or spouse, you should read the information in the following paragraphs and see Publication 519. Amend a 2011 tax return Resident Aliens You are considered a resident alien of the United States for tax purposes if you meet either the “green card test” or the “substantial presence test” for the calendar year (January 1–December 31). Amend a 2011 tax return If you meet the substantial presence test for 2014, you did not meet either the green card test or the substantial presence test for 2012 or 2013, and you did not choose to be treated as a resident for part of 2012, you may be able to choose to be treated as a U. Amend a 2011 tax return S. Amend a 2011 tax return resident for part of 2013. Amend a 2011 tax return See First-Year Choice in Publication 519. Amend a 2011 tax return These tests are explained in Publication 519. Amend a 2011 tax return Generally, resident aliens are taxed on their worldwide income and file the same tax forms as U. Amend a 2011 tax return S. Amend a 2011 tax return citizens. Amend a 2011 tax return Treating nonresident alien spouse as resident alien. Amend a 2011 tax return   A nonresident alien spouse can be treated as a resident alien if all the following conditions are met. Amend a 2011 tax return One spouse is a U. Amend a 2011 tax return S. Amend a 2011 tax return citizen or resident alien at the end of the tax year. Amend a 2011 tax return That spouse is married to the nonresident alien at the end of the tax year. Amend a 2011 tax return You both choose to treat the nonresident alien spouse as a resident alien. Amend a 2011 tax return Making the choice. Amend a 2011 tax return   Both you and your spouse must sign a statement and attach it to your joint return for the first tax year for which the choice applies. Amend a 2011 tax return Include in the statement: A declaration that one spouse was a nonresident alien and the other was a U. Amend a 2011 tax return S. Amend a 2011 tax return citizen or resident alien on the last day of the year, A declaration that both spouses choose to be treated as U. Amend a 2011 tax return S. Amend a 2011 tax return residents for the entire tax year, and The name, address, and taxpayer identification number (social security number or individual taxpayer identification number) of each spouse. Amend a 2011 tax return If the nonresident alien spouse is not eligible to get a social security number, he or she should file Form W-7, Application for IRS Individual Taxpayer Identification Number. Amend a 2011 tax return    Once you make this choice, the nonresident alien spouse's worldwide income is subject to U. Amend a 2011 tax return S. Amend a 2011 tax return tax. Amend a 2011 tax return If the nonresident alien spouse has substantial foreign income, there may be no advantage to making this choice. Amend a 2011 tax return Ending the choice. Amend a 2011 tax return   Once you make this choice, it applies to all later years unless one of the following situations occurs. Amend a 2011 tax return You or your spouse revokes the choice. Amend a 2011 tax return You or your spouse dies. Amend a 2011 tax return You and your spouse become legally separated under a decree of divorce or separate maintenance. Amend a 2011 tax return The Internal Revenue Service ends the choice because you or your spouse kept inadequate records. Amend a 2011 tax return For specific details on these situations, see Publication 519. Amend a 2011 tax return   If the choice is ended for any of these reasons, neither spouse can make the choice for any later year. Amend a 2011 tax return Choice not made. Amend a 2011 tax return   If you and your nonresident alien spouse do not make this choice: You cannot file a joint return. Amend a 2011 tax return You can file as married filing separately, or head of household if you qualify. Amend a 2011 tax return You can claim an exemption for your nonresident alien spouse if he or she has no gross income for U. Amend a 2011 tax return S. Amend a 2011 tax return tax purposes and is not another taxpayer's dependent. Amend a 2011 tax return The nonresident alien spouse generally does not have to file a federal income tax return if he or she had no income from sources in the United States. Amend a 2011 tax return If a return has to be filed, see the next discussion. Amend a 2011 tax return The nonresident alien spouse is not eligible for the earned income credit if he or she has to file a return. Amend a 2011 tax return Nonresident Aliens If you are an alien who does not meet the requirements discussed earlier to be a resident alien, you are a nonresident alien. Amend a 2011 tax return If you are required to file a federal tax return, you must file either Form 1040NR, U. Amend a 2011 tax return S. Amend a 2011 tax return Nonresident Alien Income Tax Return, or Form 1040NR-EZ, U. Amend a 2011 tax return S. Amend a 2011 tax return Income Tax Return for Certain Nonresident Aliens With No Dependents. Amend a 2011 tax return See the form instructions for information on who must file and filing status. Amend a 2011 tax return If you are a nonresident alien, you generally must pay tax on income from sources in the United States. Amend a 2011 tax return Your income from conducting a trade or business in the United States is taxed at graduated U. Amend a 2011 tax return S. Amend a 2011 tax return tax rates. Amend a 2011 tax return Other income from U. Amend a 2011 tax return S. Amend a 2011 tax return sources is taxed at a flat 30% (or lower treaty) rate. Amend a 2011 tax return For example, dividends from a U. Amend a 2011 tax return S. Amend a 2011 tax return corporation paid to a nonresident alien generally are subject to a 30% (or lower treaty) rate. Amend a 2011 tax return Dual-Status Aliens You can be both a nonresident and resident alien during the same tax year. Amend a 2011 tax return This usually occurs in the year you arrive in or depart from the United States. Amend a 2011 tax return If you are a dual-status alien, you are taxed on income from all sources for the part of the year you are a resident alien. Amend a 2011 tax return Generally, for the part of the year you are a nonresident alien, you are taxed only on income from sources in the United States. Amend a 2011 tax return Sale of Home You may not have to pay tax on all or part of the gain from the sale of your main home. Amend a 2011 tax return Usually, your main home is the one you live in most of the time. Amend a 2011 tax return It can be a: House, Houseboat, Mobile home, Cooperative apartment, or Condominium. Amend a 2011 tax return You generally can exclude up to $250,000 of gain ($500,000, in most cases, if married filing a joint return) realized on the sale or exchange of a main home in 2013. Amend a 2011 tax return The exclusion is allowed each time you sell or exchange a main home, but generally not more than once every 2 years. Amend a 2011 tax return To be eligible, during the 5-year period ending on the date of the sale, you must have owned the home for at least 2 years (the ownership test), and lived in the home as your main home for at least 2 years (the use test). Amend a 2011 tax return Exception to ownership and use tests. Amend a 2011 tax return   You can exclude gain, but the maximum amount of gain you can exclude will be reduced if you do not meet the ownership and use tests due to a move to a new permanent duty station. Amend a 2011 tax return 5-year test period suspended. Amend a 2011 tax return   You can choose to have the 5-year test period for ownership and use suspended during any period you or your spouse serve on qualified official extended duty as a member of the Armed Forces. Amend a 2011 tax return This means that you may be able to meet the 2-year use test even if, because of your service, you did not actually live in your home for at least the required 2 years during the 5-year period ending on the date of sale. Amend a 2011 tax return Example. Amend a 2011 tax return David bought and moved into a home in 2005. Amend a 2011 tax return He lived in it as his main home for 2½ years. Amend a 2011 tax return For the next 6 years, he did not live in it because he was on qualified official extended duty with the Army. Amend a 2011 tax return He then sold the home at a gain in 2013. Amend a 2011 tax return To meet the use test, David chooses to suspend the 5-year test period for the 6 years he was on qualifying official extended duty. Amend a 2011 tax return This means he can disregard those 6 years. Amend a 2011 tax return Therefore, David's 5-year test period consists of the 5 years before he went on qualifying official extended duty. Amend a 2011 tax return He meets the ownership and use tests because he owned and lived in the home for 2½ years during this test period. Amend a 2011 tax return Period of suspension. Amend a 2011 tax return   The period of suspension cannot last more than 10 years. Amend a 2011 tax return You cannot suspend the 5-year period for more than one property at a time. Amend a 2011 tax return You can revoke your choice to suspend the 5-year period at any time. Amend a 2011 tax return Qualified official extended duty. Amend a 2011 tax return   You are on qualified official extended duty if you serve on extended duty either: At a duty station at least 50 miles from your main home, or While you live in Government quarters under Government orders. Amend a 2011 tax return   You are on extended duty when you are called or ordered to active duty for a period of more than 90 days or for an indefinite period. Amend a 2011 tax return Property used for rental or business. Amend a 2011 tax return   You may be able to exclude your gain from the sale of a home that you have used as a rental property or for business. Amend a 2011 tax return However, you must meet the ownership and use tests discussed in Publication 523. Amend a 2011 tax return Nonqualified use. Amend a 2011 tax return   If the sale of your main home results in a gain that is allocated to one or more period(s) of nonqualified use, you cannot exclude that gain from your income. Amend a 2011 tax return   Nonqualified use means any period after 2008 when neither you nor your spouse (or your former spouse) used the property as a main home, with certain exceptions. Amend a 2011 tax return For example, a period of nonqualified use does not include any period (not to exceed a total of 10 years) during which you or your spouse is serving on qualified official extended duty. Amend a 2011 tax return Loss. Amend a 2011 tax return   You cannot deduct a loss from the sale of your main home. Amend a 2011 tax return More information. Amend a 2011 tax return   For more information, see Publication 523. Amend a 2011 tax return Foreclosures There may be tax consequences as a result of compensation payments for foreclosures. Amend a 2011 tax return Payments made for violations of the Service Members Civil Relief Act (SCRA). Amend a 2011 tax return   All service members who received a settlement payment reported on a Form 1099 may need to report the amount on their tax return. Amend a 2011 tax return Generally, you must include settlement payments in income. Amend a 2011 tax return However, the tax treatment of settlement payments will depend on the facts and circumstances. Amend a 2011 tax return Lump Sum Portion of Settlement Payment. Amend a 2011 tax return    Generally, you must include the lump sum payment in gross income. Amend a 2011 tax return In limited circumstances you may be able to exclude part or all of the lump sum payment from gross income. Amend a 2011 tax return For example, you may qualify to exclude part or all of the payment from gross income if you can show that the payment was made to reimburse specific nondeductible expenses (such as living expenses) you incurred because of the SCRA violation. Amend a 2011 tax return Interest Payment on Lump Sum Portion of Settlement Payment. Amend a 2011 tax return    You must include any interest on the lump sum portion of your settlement payment in your income. Amend a 2011 tax return Lost Equity Portion of Settlement Payment. Amend a 2011 tax return    If you lost your main home in foreclosure, you should treat the lost equity payment as an additional amount you received on the foreclosure of the home. Amend a 2011 tax return You will have a gain on the foreclosure only if the sum of the lost equity payment and the value of the main home at foreclosure is more than what you paid for the home. Amend a 2011 tax return In many cases, this gain may be excluded from income. Amend a 2011 tax return For more information on the rules for excluding all or part of any gain from the sale (including a foreclosure) of a main home, see Pub. Amend a 2011 tax return 523, Selling Your Home. Amend a 2011 tax return The rules that apply to a lost equity payment you received for the foreclosure of a property that was not your main home are different. Amend a 2011 tax return    To find rules for reporting gain or loss on the foreclosure of property that was not your main home, see Pub. Amend a 2011 tax return 544, Sales and Other Dispositions of Assets. Amend a 2011 tax return Interest Payment on Lost Equity Portion of Settlement Payment. Amend a 2011 tax return    You must include any interest on the lost equity portion of your settlement payment in your income. Amend a 2011 tax return Itemized Deductions To figure your taxable income, you must subtract either your standard deduction or your itemized deductions from adjusted gross income. Amend a 2011 tax return For information on the standard deduction, see Publication 501. Amend a 2011 tax return Itemized deductions are figured on Schedule A (Form 1040). Amend a 2011 tax return This chapter discusses miscellaneous itemized deductions of particular interest to members of the Armed Forces. Amend a 2011 tax return For information on other itemized deductions, see the publications listed below. Amend a 2011 tax return Publication 502, Medical and Dental Expenses. Amend a 2011 tax return Publication 526, Charitable Contributions. Amend a 2011 tax return Publication 547, Casualties, Disasters, and Thefts. Amend a 2011 tax return Publication 550, Investment Income and Expenses. Amend a 2011 tax return You must reduce the total of most miscellaneous itemized deductions by 2% of your adjusted gross income. Amend a 2011 tax return For information on deductions that are not subject to the 2% limit, see Publication 529. Amend a 2011 tax return Employee Business Expenses Deductible employee business expenses generally are miscellaneous itemized deductions subject to the 2% limit. Amend a 2011 tax return Certain employee business expenses are deductible as adjustments to income. Amend a 2011 tax return For information on many employee business expenses, see Publication 463. Amend a 2011 tax return Generally, you must file Form 2106, Employee Business Expenses, or Form 2106-EZ, Unreimbursed Employee Business Expenses, to claim these expenses. Amend a 2011 tax return You do not have to file Form 2106 or Form 2106-EZ if you are claiming only unreimbursed expenses for uniforms, professional society dues, and work-related educational expenses (all discussed later). Amend a 2011 tax return You can deduct these expenses directly on Schedule A (Form 1040). Amend a 2011 tax return Reimbursement. Amend a 2011 tax return   Generally, to receive advances, reimbursements, or other allowances from the government, you must adequately account for your expenses and return any excess reimbursement. Amend a 2011 tax return Your reimbursed expenses are not deductible. Amend a 2011 tax return   If your expenses are more than your reimbursement, the excess expenses are deductible (subject to the 2% limit) if you can prove them. Amend a 2011 tax return You must file Form 2106 to report these expenses. Amend a 2011 tax return   You can use the shorter Form 2106-EZ if you meet all three of the following conditions. Amend a 2011 tax return You are an employee deducting expenses related to your job. Amend a 2011 tax return You were not reimbursed by your employer for your expenses. Amend a 2011 tax return (Amounts included in box 1 of Form W-2 are not considered reimbursements. Amend a 2011 tax return ) If you claim car expenses, you use the standard mileage rate. Amend a 2011 tax return    For 2013, the standard mileage rate is 56. Amend a 2011 tax return 5 cents a mile for all business miles driven. Amend a 2011 tax return This rate is adjusted periodically. Amend a 2011 tax return Travel Expenses You can deduct unreimbursed travel expenses only if they are incurred while you are traveling away from home. Amend a 2011 tax return If you are a member of the U. Amend a 2011 tax return S. Amend a 2011 tax return Armed Forces on a permanent duty assignment overseas, you are not traveling away from home. Amend a 2011 tax return You cannot deduct your expenses for meals and lodging while at your permanent duty station. Amend a 2011 tax return You cannot deduct these expenses even if you have to maintain a home in the United States for your family members who are not allowed to accompany you overseas. Amend a 2011 tax return A naval officer assigned to permanent duty aboard a ship that has regular eating and living facilities has a home aboard ship for travel expense purposes. Amend a 2011 tax return To be deductible, your travel expenses must be work related. Amend a 2011 tax return You cannot deduct any expenses for personal travel, such as visits to family while on furlough, leave, or liberty. Amend a 2011 tax return Away from home. Amend a 2011 tax return   Home is your permanent duty station (which can be a ship or base), regardless of where you or your family live. Amend a 2011 tax return You are away from home if you are away from your permanent duty station substantially longer than an ordinary day's work and you need to get sleep or rest to meet the demands of your work while away from home. Amend a 2011 tax return   Examples of deductible travel expenses include: Expenses for business-related meals (generally limited to 50% of your unreimbursed cost), lodging, taxicabs, business telephone calls, tips, laundry, and dry cleaning while you are away from home on temporary duty or temporary additional duty, and Expenses of carrying out official business while on “No Cost” orders. Amend a 2011 tax return    You cannot deduct any expenses for travel away from home if the temporary assignment in a single location is realistically expected to last (and does in fact last) for more than 1 year. Amend a 2011 tax return This rule may not apply if you are participating in a federal crime investigation or prosecution. Amend a 2011 tax return For more information, see Publication 463 and the Form 2106 instructions. Amend a 2011 tax return Transportation Expenses These expenses include the ordinary and necessary costs of: Getting from one workplace to another when you are not away from home, Going to a business meeting away from your regular workplace, and Getting from your home to a temporary workplace when you have a regular place of work. Amend a 2011 tax return These expenses include the costs of transportation by air, bus, rail, taxi, and driving and maintaining your car. Amend a 2011 tax return Transportation expenses incurred while traveling away from home are included with your travel expenses, discussed earlier. Amend a 2011 tax return However, if you use your car while traveling away from home overnight, see the rules in chapter 4 of Publication 463 to figure your car expense deduction. Amend a 2011 tax return If you must go from one workplace to another while on duty (for example, as a courier or to attend meetings) without being away from home, your unreimbursed transportation expenses are deductible. Amend a 2011 tax return However, the expenses of getting to and from your regular place of work (commuting) are not deductible. Amend a 2011 tax return Temporary work location. Amend a 2011 tax return   If you have one or more regular places of business away from your home and you commute to a temporary work location in the same trade or business, you can deduct the expenses of the daily round-trip transportation between your home and the temporary location. Amend a 2011 tax return   Generally, if your employment at a work location is realistically expected to last (and does in fact last) for 1 year or less, the employment is temporary. Amend a 2011 tax return   If your employment at a work location is realistically expected to last for more than 1 year or if there is no realistic expectation that the employment will last for 1 year or less, the employment is not temporary, regardless of whether it actually lasts for more than 1 year. Amend a 2011 tax return If employment at a work location initially is realistically expected to last for 1 year or less, but at some later date the employment is realistically expected to last more than 1 year, that employment will be treated as temporary (unless there are facts and circumstances that would indicate otherwise) until your expectation changes. Amend a 2011 tax return    If you do not have a regular place of business, but you ordinarily work in the metropolitan area where you live, you can deduct daily transportation expenses between your home and a temporary work site outside your metropolitan area. Amend a 2011 tax return However, you cannot deduct daily transportation costs between your home and temporary work sites within your metropolitan area. Amend a 2011 tax return These are nondeductible commuting costs. Amend a 2011 tax return Armed Forces reservists. Amend a 2011 tax return   A meeting of an Armed Forces reserve unit is a second place of business if the meeting is held on a day on which you work at your regular job. Amend a 2011 tax return You can deduct the expense of getting from one workplace to the other. Amend a 2011 tax return You usually cannot deduct the expense if the reserve meeting is held on a day on which you do not work at your regular job. Amend a 2011 tax return In this case, your transportation generally is a nondeductible commuting expense. Amend a 2011 tax return However, you can deduct your transportation expenses if the location of the meeting is temporary and you have one or more regular places of work. Amend a 2011 tax return   If you ordinarily work in a particular metropolitan area but not at any specific location and the reserve meeting is held at a temporary location outside that metropolitan area, you can deduct your transportation expenses. Amend a 2011 tax return If you travel away from home overnight to attend a guard or reserve meeting, you can deduct your travel expenses. Amend a 2011 tax return See Armed Forces Reservists under Adjustments to Income, earlier. Amend a 2011 tax return Uniforms You usually cannot deduct the expenses for uniform cost and upkeep. Amend a 2011 tax return Generally, you must wear uniforms when on duty and you are allowed to wear them when off duty. Amend a 2011 tax return If military regulations prohibit you from wearing certain uniforms when off duty, you can deduct the cost and upkeep of the uniforms, but you must reduce your expenses by any allowance or reimbursement you receive. Amend a 2011 tax return Unreimbursed expenses for the cost and upkeep of the following articles are deductible. Amend a 2011 tax return Military battle dress uniforms and utility uniforms that you cannot wear when off duty. Amend a 2011 tax return Articles not replacing regular clothing, including insignia of rank, corps devices, epaulets, aiguillettes, and swords. Amend a 2011 tax return Reservists' uniforms if you can wear the uniform only while performing duties as a reservist. Amend a 2011 tax return Professional Dues You can deduct unreimbursed dues paid to professional societies directly related to your military position. Amend a 2011 tax return However, you cannot deduct amounts paid to an officers' club or a noncommissioned officers' club. Amend a 2011 tax return Example. Amend a 2011 tax return Lieutenant Margaret Allen, an electrical engineer at Maxwell Air Force Base, can deduct professional dues paid to the American Society of Electrical Engineers. Amend a 2011 tax return Educational Expenses You can deduct the unreimbursed costs of qualifying work-related education. Amend a 2011 tax return This is education that meets at least one of the following two tests. Amend a 2011 tax return The education is required by your employer or the law to keep your present salary, status, or job. Amend a 2011 tax return The required education must serve a bona fide business purpose of your employer. Amend a 2011 tax return The education maintains or improves skills needed in your present work. Amend a 2011 tax return However, even if the education meets one or both of the above tests, it is not qualifying education if it: Is needed to meet the minimum educational requirements of your present trade or business, or Is part of a program of study that will qualify you for a new trade or business. Amend a 2011 tax return You can deduct the expenses for qualifying work-related education even if the education could lead to a degree. Amend a 2011 tax return Example 1. Amend a 2011 tax return Lieutenant Colonel Mason has a degree in financial management and is in charge of base finances at her post of duty. Amend a 2011 tax return She took an advanced finance course. Amend a 2011 tax return She already meets the minimum qualifications for her job. Amend a 2011 tax return By taking the course, she is improving skills in her current position. Amend a 2011 tax return The course does not qualify her for a new trade or business. Amend a 2011 tax return She can deduct educational expenses that are more than the educational allowance she received. Amend a 2011 tax return Example 2. Amend a 2011 tax return Major Williams worked in the military base legal office as a legal intern. Amend a 2011 tax return He was placed in excess leave status by his employer to attend law school. Amend a 2011 tax return He paid all his educational expenses and was not reimbursed. Amend a 2011 tax return After obtaining his law degree, he passed the state bar exam and worked as a judge advocate. Amend a 2011 tax return His educational expenses are not deductible because the law degree qualified him for a new trade or business, even though the education maintained and improved his skills in his work. Amend a 2011 tax return Travel to obtain education. Amend a 2011 tax return   If your work-related education qualifies, you can deduct the costs of travel, including meals (subject to the 50% limit), and lodging, if the main purpose of the trip is to obtain the education. Amend a 2011 tax return   You cannot deduct the cost of travel that is itself a form of education, even if it is directly related to your duties in your work or business. Amend a 2011 tax return Transportation for education. Amend a 2011 tax return   If your work-related education qualifies for a deduction, you can deduct the costs of transportation to obtain that education. Amend a 2011 tax return However, you cannot deduct the cost of services provided in kind, such as base-provided transportation to or from class. Amend a 2011 tax return Transportation expenses include the actual costs of bus, subway, cab, or other fares, as well as the costs of using your car. Amend a 2011 tax return   If you need more information on educational expenses, see Publication 970. Amend a 2011 tax return Repayments If you had to repay to your employer an amount that you included in your income in an earlier year, you may be able to deduct the repaid amount from your income for the year in which you repaid it. Amend a 2011 tax return Repayment of $3,000 or less. Amend a 2011 tax return   If the amount you repaid was $3,000 or less, deduct it from your income in the year you repaid it. Amend a 2011 tax return If you reported it as wages, deduct it as a miscellaneous itemized deduction on Schedule A (Form 1040), line 23. Amend a 2011 tax return Repayment over $3,000. Amend a 2011 tax return   If the amount you repaid was more than $3,000, see Repayments in Publication 525. Amend a 2011 tax return Credits After you have figured your taxable income and tax liability, you can determine if you are entitled to any tax credits. Amend a 2011 tax return This publication discusses the first-time homebuyer credit, child tax credit, earned income credit, and credit for excess social security tax withheld. Amend a 2011 tax return For information on other credits, see your tax form instructions. Amend a 2011 tax return First-Time Homebuyer Credit The first-time homebuyer credit is not available for homes purchased after 2011. Amend a 2011 tax return In 2011, this credit had already expired for most taxpayers, however, certain members of the uniformed services and Foreign Service and certain employees of the intelligence community could claim the credit for homes purchased in 2011. Amend a 2011 tax return If you bought the home (and claimed the credit) after 2008, you generally must repay the credit if you dispose of the home or the home stops being your main home within the 36-month period beginning on the purchase date. Amend a 2011 tax return If the home continues to be your main home for at least 36 months beginning on the purchase date, you do not have to repay any of the credit. Amend a 2011 tax return If you bought your home in 2008, you generally must repay the credit over a 15-year period in 15 equal installments. Amend a 2011 tax return For more information, see Form 5405, Repayment of the First-Time Homebuyer Credit, and its instructions. Amend a 2011 tax return Child Tax Credit The child tax credit is a credit that may reduce your tax by as much as $1,000 for each of your qualifying children. Amend a 2011 tax return The additional child tax credit is a credit you may be able to take if you are not able to claim the full amount of the child tax credit. Amend a 2011 tax return The child tax credit is not the same as the credit for child and dependent care expenses. Amend a 2011 tax return See Publication 503 for information on the credit for child and dependent care expenses. Amend a 2011 tax return Qualifying Child A qualifying child for purposes of the child tax credit is a child who: Is your son, daughter, stepchild, foster child, brother, sister, stepbrother, stepsister, half brother, half sister, or a descendant of any of them (for example, your grandchild, niece, or nephew), Was under age 17 at the end of 2013, Did not provide over half of his or her own support for 2013, Lived with you for more than half of 2013 (see Exceptions to time lived with you, later), Is claimed as a dependent on your return, Does not file a joint return for the year (or files it only as a claim for refund), and Was a U. Amend a 2011 tax return S. Amend a 2011 tax return citizen, a U. Amend a 2011 tax return S. Amend a 2011 tax return national, or a U. Amend a 2011 tax return S. Amend a 2011 tax return resident alien. Amend a 2011 tax return If the child was adopted, see Adopted child . Amend a 2011 tax return For each qualifying child you must check the box on Form 1040 or Form 1040A, line 6c, column (4). Amend a 2011 tax return Exceptions to time lived with you. Amend a 2011 tax return   A child is considered to have lived with you for all of 2013 if the child was born or died in 2013 and your home was this child's home for the entire time he or she was alive. Amend a 2011 tax return Temporary absences by you or the child for special circumstances, such as school, vacation, business, medical care, military service, or detention in a juvenile facility, count as time the child lived with you. Amend a 2011 tax return   There are also exceptions for kidnapped children and children of divorced or separated parents. Amend a 2011 tax return For details, see Publication 501. Amend a 2011 tax return Qualifying child of more than one person. Amend a 2011 tax return   A special rule applies if your qualifying child is the qualifying child of more than one person. Amend a 2011 tax return For details, see Publication 501. Amend a 2011 tax return Adopted child. Amend a 2011 tax return   An adopted child is always treated as your own child. Amend a 2011 tax return An adopted child includes a child lawfully placed with you for legal adoption. Amend a 2011 tax return   If you are a U. Amend a 2011 tax return S. Amend a 2011 tax return citizen or U. Amend a 2011 tax return S. Amend a 2011 tax return national and your adopted child lived with you as a member of your household all year, that child meets condition (7) above to be a qualifying child for the child tax credit. Amend a 2011 tax return Amount of Credit The maximum amount you can claim for the credit is $1,000 for each qualifying child. Amend a 2011 tax return Limits on the credit. Amend a 2011 tax return   You must reduce your child tax credit if either (1) or (2), below, applies. Amend a 2011 tax return The amount on Form 1040, line 46, or Form 1040A, line 28, is less than the credit. Amend a 2011 tax return If the amount is zero, you cannot take this credit because there is no tax to reduce. Amend a 2011 tax return However, you may be able to take the additional child tax credit. Amend a 2011 tax return See Additional Child Tax Credit , later. Amend a 2011 tax return Your modified adjusted gross income (AGI) is more than the amount shown below for your filing status. Amend a 2011 tax return Married filing jointly — $110,000. Amend a 2011 tax return Single, head of household,  or qualifying widow(er) — $75,000. Amend a 2011 tax return Married filing separately — $55,000. Amend a 2011 tax return Modified AGI. Amend a 2011 tax return   For purposes of the child tax credit, your modified AGI is the amount on Form 1040, line 38, or Form 1040A, line 22, plus the following amounts that may apply to you. Amend a 2011 tax return Any amount excluded from income because of the exclusion of income from Puerto Rico. Amend a 2011 tax return Any amount on line 45 or line 50 of Form 2555, Foreign Earned Income. Amend a 2011 tax return Any amount on line 18 of Form 2555-EZ, Foreign Earned Income Exclusion. Amend a 2011 tax return Any amount on line 15 of Form 4563, Exclusion of Income for Bona Fide Residents of American Samoa. Amend a 2011 tax return   If you do not have any of the above, your modified AGI is the same as your AGI. Amend a 2011 tax return Claiming the Credit To claim the child tax credit, you must file Form 1040 or Form 1040A. Amend a 2011 tax return For more information on the child tax credit, see the instructions for Form 1040 or Form 1040A. Amend a 2011 tax return Also attach Schedule 8812, Child Tax Credit, if required. Amend a 2011 tax return Additional Child Tax Credit This credit is for certain individuals who get less than the full amount of the child tax credit. Amend a 2011 tax return The additional child tax credit may give you a refund even if you do not owe any tax. Amend a 2011 tax return For more information, see the instructions for Form 1040 or Form 1040A, and Schedule 8812. Amend a 2011 tax return Earned Income Credit The earned income credit (EIC) is a cr
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The Taxpayer Advocate Service Is Your Voice at the IRS

The Taxpayer Advocate Service (TAS) is an independent organization within the IRS. We help taxpayers who are experiencing economic harm, such as not being able to provide necessities like housing, transportation, or food; taxpayers who are seeking help in resolving problems with the IRS; and those who believe an IRS system or procedure is not working as it should. Here are ten things every taxpayer should know about TAS:

  1. The Taxpayer Advocate Service is your voice at the IRS.
  2. Our service is free and tailored to meet your needs.
  3. You may be eligible for our help if you have tried to resolve your tax problem through normal IRS channels and have gotten nowhere, or you believe an IRS procedure just isn't working as it should.
  4. The worst thing you can do is nothing at all!
  5. We help taxpayers whose problems are causing financial difficulty or significant cost, including the cost of professional representation. This includes businesses as well as individuals.
  6. If you qualify for our help, we’ll do everything we can to get your problem resolved. You will be assigned to one advocate who will be with you at every turn.
  7. We have at least one local taxpayer advocate office in every state, the District of Columbia, and Puerto Rico. You can call your local advocate, whose number is in your phone book and in Publication 1546, Taxpayer Advocate Service -- Your Voice at the IRS. You can also call our toll-free number at 1-877-777-4778.
  8. As a taxpayer, you have rights that the IRS must abide by in its dealings with you. Our tax toolkit at www.taxtoolkit.irs.gov can help you understand these rights.
  9. TAS also handles large-scale or systemic problems that affect many taxpayers. If you know of one of these broad issues, please report it to us through our Systemic Advocacy Management System.
  10. You can get updates on hot tax topics by visiting our YouTube channel at www.youtube.com/tasnta and our Facebook page at http://www.facebook.com/YourVoiceAtIRS, or by following our tweets at http://twitter.com/YourVoiceatIRS
Page Last Reviewed or Updated: 14-Mar-2014

The Amend A 2011 Tax Return

Amend a 2011 tax return 3. Amend a 2011 tax return   Reporting Rental Income, Expenses, and Losses Table of Contents Which Forms To UseSchedule E (Form 1040) Schedule C (Form 1040), Profit or Loss From Business Qualified Joint Venture Limits on Rental LossesAt-Risk Rules Passive Activity Limits Casualties and Thefts Example Figuring the net income or loss for a residential rental activity may involve more than just listing the income and deductions on Schedule E (Form 1040). Amend a 2011 tax return There are activities which do not qualify to use Schedule E, such as when the activity is not engaged in to make a profit or when you provide substantial services in conjunction with the property. Amend a 2011 tax return There are also the limitations which may need to be applied if you have a net loss on Schedule E. Amend a 2011 tax return There are two: (1) the limitation based on the amount of investment you have at risk in your rental activity, and (2) the special limits imposed on passive activities. Amend a 2011 tax return You may also have a gain or loss related to your rental property from a casualty or theft. Amend a 2011 tax return This is considered separately from the income and expense information you report on Schedule E. Amend a 2011 tax return Which Forms To Use The basic form for reporting residential rental income and expenses is Schedule E (Form 1040). Amend a 2011 tax return However, do not use that schedule to report a not-for-profit activity. Amend a 2011 tax return See Not Rented for Profit , in chapter 4. Amend a 2011 tax return There are also other rental situations in which forms other than Schedule E would be used. Amend a 2011 tax return Schedule E (Form 1040) If you rent buildings, rooms, or apartments, and provide basic services such as heat and light, trash collection, etc. Amend a 2011 tax return , you normally report your rental income and expenses on Schedule E, Part I. Amend a 2011 tax return List your total income, expenses, and depreciation for each rental property. Amend a 2011 tax return Be sure to enter the number of fair rental and personal use days on line 2. Amend a 2011 tax return If you have more than three rental or royalty properties, complete and attach as many Schedules E as are needed to list the properties. Amend a 2011 tax return Complete lines 1 and 2 for each property. Amend a 2011 tax return However, fill in lines 23a through 26 on only one Schedule E. Amend a 2011 tax return On Schedule E, page 1, line 18, enter the depreciation you are claiming for each property. Amend a 2011 tax return To find out if you need to attach Form 4562, see Form 4562 , later. Amend a 2011 tax return If you have a loss from your rental real estate activity, you also may need to complete one or both of the following forms. Amend a 2011 tax return Form 6198, At-Risk Limitations. Amend a 2011 tax return See At-Risk Rules , later. Amend a 2011 tax return Also see Publication 925. Amend a 2011 tax return Form 8582, Passive Activity Loss Limitations. Amend a 2011 tax return See Passive Activity Limits , later. Amend a 2011 tax return Page 2 of Schedule E is used to report income or loss from partnerships, S corporations, estates, trusts, and real estate mortgage investment conduits. Amend a 2011 tax return If you need to use page 2 of Schedule E, be sure to use page 2 of the same Schedule E you used to enter your rental activity on page 1. Amend a 2011 tax return Also, include the amount from line 26 (Part I) in the “Total income or (loss)” on line 41 (Part V). Amend a 2011 tax return Form 4562. Amend a 2011 tax return   You must complete and attach Form 4562 for rental activities only if you are claiming: Depreciation, including the special depreciation allowance, on property placed in service during 2013; Depreciation on listed property (such as a car), regardless of when it was placed in service; or Any other car expenses, including the standard mileage rate or lease expenses. Amend a 2011 tax return Otherwise, figure your depreciation on your own worksheet. Amend a 2011 tax return You do not have to attach these computations to your return, but you should keep them in your records for future reference. Amend a 2011 tax return   See Publication 946 for information on preparing Form 4562. Amend a 2011 tax return Schedule C (Form 1040), Profit or Loss From Business Generally, Schedule C is used when you provide substantial services in conjunction with the property or the rental is part of a trade or business as a real estate dealer. Amend a 2011 tax return Providing substantial services. Amend a 2011 tax return   If you provide substantial services that are primarily for your tenant's convenience, such as regular cleaning, changing linen, or maid service, you report your rental income and expenses on Schedule C (Form 1040), Profit or Loss From Business, or Schedule C-EZ (Form 1040), Net Profit From Business. Amend a 2011 tax return Use Form 1065, U. Amend a 2011 tax return S. Amend a 2011 tax return Return of Partnership Income, if your rental activity is a partnership (including a partnership with your spouse unless it is a qualified joint venture). Amend a 2011 tax return Substantial services do not include the furnishing of heat and light, cleaning of public areas, trash collection, etc. Amend a 2011 tax return For information, see Publication 334, Tax Guide for Small Business. Amend a 2011 tax return Also, you may have to pay self-employment tax on your rental income using Schedule SE (Form 1040), Self-Employment Tax. Amend a 2011 tax return For a discussion of “substantial services,” see Real Estate Rents in Publication 334, chapter 5. Amend a 2011 tax return Qualified Joint Venture If you and your spouse each materially participate (see Material participation under Passive Activity Limits, later) as the only members of a jointly owned and operated real estate business, and you file a joint return for the tax year, you can make a joint election to be treated as a qualified joint venture instead of a partnership. Amend a 2011 tax return This election, in most cases, will not increase the total tax owed on the joint return, but it does give each of you credit for social security earnings on which retirement benefits are based and for Medicare coverage if your rental income is subject to self-employment tax. Amend a 2011 tax return If you make this election, you must report rental real estate income on Schedule E (or Schedule C if you provide substantial services). Amend a 2011 tax return You will not be required to file Form 1065 for any year the election is in effect. Amend a 2011 tax return Rental real estate income generally is not included in net earnings from self-employment subject to self-employment tax and generally is subject to the passive activity limits. Amend a 2011 tax return If you and your spouse filed a Form 1065 for the year prior to the election, the partnership terminates at the end of the tax year immediately preceding the year the election takes effect. Amend a 2011 tax return For more information on qualified joint ventures, go to IRS. Amend a 2011 tax return gov and enter “qualified joint venture” in the search box. Amend a 2011 tax return Limits on Rental Losses If you have a loss from your rental real estate activity, two sets of rules may limit the amount of loss you can deduct. Amend a 2011 tax return You must consider these rules in the order shown below. Amend a 2011 tax return Both are discussed in this section. Amend a 2011 tax return At-risk rules. Amend a 2011 tax return These rules are applied first if there is investment in your rental real estate activity for which you are not at risk. Amend a 2011 tax return This applies only if the real property was placed in service after 1986. Amend a 2011 tax return Passive activity limits. Amend a 2011 tax return Generally, rental real estate activities are considered passive activities and losses are not deductible unless you have income from other passive activities to offset them. Amend a 2011 tax return However, there are exceptions. Amend a 2011 tax return At-Risk Rules You may be subject to the at-risk rules if you have: A loss from an activity carried on as a trade or business or for the production of income, and Amounts invested in the activity for which you are not fully at risk. Amend a 2011 tax return Losses from holding real property (other than mineral property) placed in service before 1987 are not subject to the at-risk rules. Amend a 2011 tax return In most cases, any loss from an activity subject to the at-risk rules is allowed only to the extent of the total amount you have at risk in the activity at the end of the tax year. Amend a 2011 tax return You are considered at risk in an activity to the extent of cash and the adjusted basis of other property you contributed to the activity and certain amounts borrowed for use in the activity. Amend a 2011 tax return Any loss that is disallowed because of the at-risk limits is treated as a deduction from the same activity in the next tax year. Amend a 2011 tax return See Publication 925 for a discussion of the at-risk rules. Amend a 2011 tax return Form 6198. Amend a 2011 tax return   If you are subject to the at-risk rules, file Form 6198, At-Risk Limitations, with your tax return. Amend a 2011 tax return Passive Activity Limits In most cases, all rental real estate activities (except those of certain real estate professionals, discussed later) are passive activities. Amend a 2011 tax return For this purpose, a rental activity is an activity from which you receive income mainly for the use of tangible property, rather than for services. Amend a 2011 tax return For a discussion of activities that are not considered rental activities, see Rental Activities in Publication 925. Amend a 2011 tax return Deductions or losses from passive activities are limited. Amend a 2011 tax return You generally cannot offset income, other than passive income, with losses from passive activities. Amend a 2011 tax return Nor can you offset taxes on income, other than passive income, with credits resulting from passive activities. Amend a 2011 tax return Any excess loss or credit is carried forward to the next tax year. Amend a 2011 tax return Exceptions to the rules for figuring passive activity limits for personal use of a dwelling unit and for rental real estate with active participation are discussed later. Amend a 2011 tax return For a detailed discussion of these rules, see Publication 925. Amend a 2011 tax return Real estate professionals. Amend a 2011 tax return   If you are a real estate professional, complete line 43 of Schedule E. Amend a 2011 tax return      You qualify as a real estate professional for the tax year if you meet both of the following requirements. Amend a 2011 tax return More than half of the personal services you perform in all trades or businesses during the tax year are performed in real property trades or businesses in which you materially participate. Amend a 2011 tax return You perform more than 750 hours of services during the tax year in real property trades or businesses in which you materially participate. Amend a 2011 tax return If you qualify as a real estate professional, rental real estate activities in which you materially participated are not passive activities. Amend a 2011 tax return For purposes of determining whether you materially participated in your rental real estate activities, each interest in rental real estate is a separate activity unless you elect to treat all your interests in rental real estate as one activity. Amend a 2011 tax return   Do not count personal services you perform as an employee in real property trades or businesses unless you are a 5% owner of your employer. Amend a 2011 tax return You are a 5% owner if you own (or are considered to own) more than 5% of your employer's outstanding stock, or capital or profits interest. Amend a 2011 tax return   Do not count your spouse's personal services to determine whether you met the requirements listed earlier to qualify as a real estate professional. Amend a 2011 tax return However, you can count your spouse's participation in an activity in determining if you materially participated. Amend a 2011 tax return Real property trades or businesses. Amend a 2011 tax return   A real property trade or business is a trade or business that does any of the following with real property. Amend a 2011 tax return Develops or redevelops it. Amend a 2011 tax return Constructs or reconstructs it. Amend a 2011 tax return Acquires it. Amend a 2011 tax return Converts it. Amend a 2011 tax return Rents or leases it. Amend a 2011 tax return Operates or manages it. Amend a 2011 tax return Brokers it. Amend a 2011 tax return Choice to treat all interests as one activity. Amend a 2011 tax return   If you were a real estate professional and had more than one rental real estate interest during the year, you can choose to treat all the interests as one activity. Amend a 2011 tax return You can make this choice for any year that you qualify as a real estate professional. Amend a 2011 tax return If you forgo making the choice for one year, you can still make it for a later year. Amend a 2011 tax return   If you make the choice, it is binding for the tax year you make it and for any later year that you are a real estate professional. Amend a 2011 tax return This is true even if you are not a real estate professional in any intervening year. Amend a 2011 tax return (For that year, the exception for real estate professionals will not apply in determining whether your activity is subject to the passive activity rules. Amend a 2011 tax return )   See the Instructions for Schedule E for information about making this choice. Amend a 2011 tax return Material participation. Amend a 2011 tax return   Generally, you materially participated in an activity for the tax year if you were involved in its operations on a regular, continuous, and substantial basis during the year. Amend a 2011 tax return For details, see Publication 925 or the Instructions for Schedule C. Amend a 2011 tax return Participating spouse. Amend a 2011 tax return   If you are married, determine whether you materially participated in an activity by also counting any participation in the activity by your spouse during the year. Amend a 2011 tax return Do this even if your spouse owns no interest in the activity or files a separate return for the year. Amend a 2011 tax return Form 8582. Amend a 2011 tax return    You may have to complete Form 8582 to figure the amount of any passive activity loss for the current tax year for all activities and the amount of the passive activity loss allowed on your tax return. Amend a 2011 tax return See Form 8582 not required , later in this chapter, to determine if you must complete Form 8582. Amend a 2011 tax return   If you are required to complete Form 8582 and are also subject to the at-risk rules, include the amount from Form 6198, line 21 (deductible loss) in column (b) of Form 8582, Worksheet 1 or 3, as required. Amend a 2011 tax return Exception for Personal Use of Dwelling Unit If you used the rental property as a home during the year, any income, deductions, gain, or loss allocable to such use shall not be taken into account for purposes of the passive activity loss limitation. Amend a 2011 tax return Instead, follow the rules explained in chapter 5, Personal Use of Dwelling Unit (Including Vacation Home). Amend a 2011 tax return Exception for Rental Real Estate With Active Participation If you or your spouse actively participated in a passive rental real estate activity, you may be able to deduct up to $25,000 of loss from the activity from your nonpassive income. Amend a 2011 tax return This special allowance is an exception to the general rule disallowing losses in excess of income from passive activities. Amend a 2011 tax return Similarly, you may be able to offset credits from the activity against the tax on up to $25,000 of nonpassive income after taking into account any losses allowed under this exception. Amend a 2011 tax return Example. Amend a 2011 tax return Jane is single and has $40,000 in wages, $2,000 of passive income from a limited partnership, and $3,500 of passive loss from a rental real estate activity in which she actively participated. Amend a 2011 tax return $2,000 of Jane's $3,500 loss offsets her passive income. Amend a 2011 tax return The remaining $1,500 loss can be deducted from her $40,000 wages. Amend a 2011 tax return The special allowance is not available if you were married, lived with your spouse at any time during the year, and are filing a separate return. Amend a 2011 tax return Active participation. Amend a 2011 tax return   You actively participated in a rental real estate activity if you (and your spouse) owned at least 10% of the rental property and you made management decisions or arranged for others to provide services (such as repairs) in a significant and bona fide sense. Amend a 2011 tax return Management decisions that may count as active participation include approving new tenants, deciding on rental terms, approving expenditures, and other similar decisions. Amend a 2011 tax return Example. Amend a 2011 tax return Mike is single and had the following income and losses during the tax year:   Salary $42,300     Dividends 300     Interest 1,400     Rental loss (4,000)   The rental loss was from the rental of a house Mike owned. Amend a 2011 tax return Mike had advertised and rented the house to the current tenant himself. Amend a 2011 tax return He also collected the rents, which usually came by mail. Amend a 2011 tax return All repairs were either made or contracted out by Mike. Amend a 2011 tax return Although the rental loss is from a passive activity, because Mike actively participated in the rental property management he can use the entire $4,000 loss to offset his other income. Amend a 2011 tax return Maximum special allowance. Amend a 2011 tax return   The maximum special allowance is: $25,000 for single individuals and married individuals filing a joint return for the tax year, $12,500 for married individuals who file separate returns for the tax year and lived apart from their spouses at all times during the tax year, and $25,000 for a qualifying estate reduced by the special allowance for which the surviving spouse qualified. Amend a 2011 tax return   If your modified adjusted gross income (MAGI) is $100,000 or less ($50,000 or less if married filing separately), you can deduct your loss up to the amount specified above. Amend a 2011 tax return If your MAGI is more than $100,000 (more than $50,000 if married filing separately), your special allowance is limited to 50% of the difference between $150,000 ($75,000 if married filing separately) and your MAGI. Amend a 2011 tax return   Generally, if your MAGI is $150,000 or more ($75,000 or more if you are married filing separately), there is no special allowance. Amend a 2011 tax return Modified adjusted gross income (MAGI). Amend a 2011 tax return   This is your adjusted gross income from Form 1040, U. Amend a 2011 tax return S. Amend a 2011 tax return Individual Income Tax Return, line 38, or Form 1040NR, U. Amend a 2011 tax return S. Amend a 2011 tax return Nonresident Alien Income Tax Return, line 37, figured without taking into account: The taxable amount of social security or equivalent tier 1 railroad retirement benefits, The deductible contributions to traditional individual retirement accounts (IRAs) and section 501(c)(18) pension plans, The exclusion from income of interest from Series EE and I U. Amend a 2011 tax return S. Amend a 2011 tax return savings bonds used to pay higher educational expenses, The exclusion of amounts received under an employer's adoption assistance program, Any passive activity income or loss included on Form 8582, Any rental real estate loss allowed to real estate professionals, Any overall loss from a publicly traded partnership (see Publicly Traded Partnerships (PTPs) in the Instructions for Form 8582), The deduction allowed for one-half of self-employment tax, The deduction allowed for interest paid on student loans, The deduction for qualified tuition and related fees, and The domestic production activities deduction (see the Instructions for Form 8903). Amend a 2011 tax return Form 8582 not required. Amend a 2011 tax return   Do not complete Form 8582 if you meet all of the following conditions. Amend a 2011 tax return Your only passive activities were rental real estate activities in which you actively participated. Amend a 2011 tax return Your overall net loss from these activities is $25,000 or less ($12,500 or less if married filing separately and you lived apart from your spouse all year). Amend a 2011 tax return If married filing separately, you lived apart from your spouse all year. Amend a 2011 tax return You have no prior year unallowed losses from these (or any other passive) activities. Amend a 2011 tax return You have no current or prior year unallowed credits from passive activities. Amend a 2011 tax return Your MAGI is $100,000 or less ($50,000 or less if married filing separately and you lived apart from your spouse all year). Amend a 2011 tax return You do not hold any interest in a rental real estate activity as a limited partner or as a beneficiary of an estate or a trust. Amend a 2011 tax return   If you meet all of the conditions listed above, your rental real estate activities are not limited by the passive activity rules and you do not have to complete Form 8582. Amend a 2011 tax return On lines 23a through 23e of your Schedule E, enter the applicable amounts. Amend a 2011 tax return Casualties and Thefts As a result of a casualty or theft, you may have a loss related to your rental property. Amend a 2011 tax return You may be able to deduct the loss on your income tax return. Amend a 2011 tax return Casualty. Amend a 2011 tax return   This is the damage, destruction, or loss of property resulting from an identifiable event that is sudden, unexpected, or unusual. Amend a 2011 tax return Such events include a storm, fire, or earthquake. Amend a 2011 tax return Theft. Amend a 2011 tax return   This is defined as the unlawful taking and removing of your money or property with the intent to deprive you of it. Amend a 2011 tax return Gain from casualty or theft. Amend a 2011 tax return   It is also possible to have a gain from a casualty or theft if you receive money, including insurance, that is more than your adjusted basis in the property. Amend a 2011 tax return Generally, you must report this gain. Amend a 2011 tax return However, under certain circumstances, you may defer paying tax by choosing to postpone reporting the gain. Amend a 2011 tax return To do this, you generally must buy replacement property within 2 years after the close of the first tax year in which any part of your gain is realized. Amend a 2011 tax return In certain circumstances, the replacement period can be greater than 2 years; see Replacement Period in Publication 547 for more information. Amend a 2011 tax return The cost of the replacement property must be equal to or more than the net insurance or other payment you received. Amend a 2011 tax return More information. Amend a 2011 tax return   For information on business and nonbusiness casualty and theft losses, see Publication 547. Amend a 2011 tax return How to report. Amend a 2011 tax return    If you had a casualty or theft that involved property used in your rental activity, figure the net gain or loss in Section B of Form 4684, Casualties and Thefts. Amend a 2011 tax return Follow the Instructions for Form 4684 for where to carry your net gain or loss. Amend a 2011 tax return Example In February 2008, Marie Pfister bought a rental house for $135,000 (house $120,000 and land $15,000) and immediately began renting it out. Amend a 2011 tax return In 2013, she rented it all 12 months for a monthly rental fee of $1,125. Amend a 2011 tax return In addition to her rental income of $13,500 (12 x $1,125), Marie had the following expenses. Amend a 2011 tax return Mortgage interest $8,000 Fire insurance (1-year policy) 250 Miscellaneous repairs 400 Real estate taxes imposed and paid 500 Maintenance 200 Marie depreciates the residential rental property under MACRS GDS. Amend a 2011 tax return This means using the straight line method over a recovery period of 27. Amend a 2011 tax return 5 years. Amend a 2011 tax return She uses Table 2-2d to find her depreciation percentage. Amend a 2011 tax return Because she placed the property in service in February 2008, she continues to use that row of Table 2-2d. Amend a 2011 tax return For year 6, the rate is 3. Amend a 2011 tax return 636%. Amend a 2011 tax return Marie figures her net rental income or loss for the house as follows: Total rental income received  ($1,125 × 12) $13,500 Minus: Expenses     Mortgage interest $8,000   Fire insurance 250   Miscellaneous repairs 400   Real estate taxes 500   Maintenance 200   Total expenses 9,350 Balance $4,150 Minus: Depreciation ($120,000 x 3. Amend a 2011 tax return 636%) 4,363 Net rental (loss) for house ($213)       Marie had a net loss for the year. Amend a 2011 tax return Because she actively participated in her passive rental real estate activity and her loss was less than $25,000, she can deduct the loss on her return. Amend a 2011 tax return Marie also meets all of the requirements for not having to file Form 8582. Amend a 2011 tax return She uses Schedule E, Part I, to report her rental income and expenses. Amend a 2011 tax return She enters her income, expenses, and depreciation for the house in the column for Property A and enters her loss on line 22. Amend a 2011 tax return Form 4562 is not required. Amend a 2011 tax return Prev  Up  Next   Home   More Online Publications