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Amend Federal Tax Return 2012

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Amend Federal Tax Return 2012

Amend federal tax return 2012 28. Amend federal tax return 2012   Miscellaneous Deductions Table of Contents What's New Introduction Useful Items - You may want to see: Deductions Subject to the 2% LimitUnreimbursed Employee Expenses (Line 21) Tax Preparation Fees (Line 22) Other Expenses (Line 23) Deductions Not Subject to the 2% LimitList of Deductions Nondeductible ExpensesList of Nondeductible Expenses What's New Standard mileage rate. Amend federal tax return 2012  The 2013 rate for business use of a vehicle is 56½ cents per mile. Amend federal tax return 2012 Introduction This chapter explains which expenses you can claim as miscellaneous itemized deductions on Schedule A (Form 1040). Amend federal tax return 2012 You must reduce the total of most miscellaneous itemized deductions by 2% of your adjusted gross income. Amend federal tax return 2012 This chapter covers the following topics. Amend federal tax return 2012 Deductions subject to the 2% limit. Amend federal tax return 2012 Deductions not subject to the 2% limit. Amend federal tax return 2012 Expenses you cannot deduct. Amend federal tax return 2012 You must keep records to verify your deductions. Amend federal tax return 2012 You should keep receipts, canceled checks, substitute checks, financial account statements, and other documentary evidence. Amend federal tax return 2012 For more information on recordkeeping, get Publication 552, Record- keeping for Individuals. Amend federal tax return 2012 Useful Items - You may want to see: Publication 463 Travel, Entertainment, Gift, and Car Expenses 525 Taxable and Nontaxable Income 529 Miscellaneous Deductions 535 Business Expenses 587 Business Use of Your Home (Including Use by Daycare Providers) 946 How To Depreciate Property Form (and Instructions) Schedule A (Form 1040) Itemized Deductions 2106 Employee Business Expenses 2106-EZ Unreimbursed Employee Business Expenses Deductions Subject to the 2% Limit You can deduct certain expenses as miscellaneous itemized deductions on Schedule A (Form 1040). Amend federal tax return 2012 You can claim the amount of expenses that is more than 2% of your adjusted gross income. Amend federal tax return 2012 You figure your deduction on Schedule A by subtracting 2% of your adjusted gross income from the total amount of these expenses. Amend federal tax return 2012 Your adjusted gross income is the amount on Form 1040, line 38. Amend federal tax return 2012 Generally, you apply the 2% limit after you apply any other deduction limit. Amend federal tax return 2012 For example, you apply the 50% (or 80%) limit on business-related meals and entertainment (discussed in chapter 26) before you apply the 2% limit. Amend federal tax return 2012 Deductions subject to the 2% limit are discussed in the three categories in which you report them on Schedule A (Form 1040). Amend federal tax return 2012 Unreimbursed employee expenses (line 21). Amend federal tax return 2012 Tax preparation fees (line 22). Amend federal tax return 2012 Other expenses (line 23). Amend federal tax return 2012 Unreimbursed Employee Expenses (Line 21) Generally, you can deduct on Schedule A (Form 1040), line 21, unreimbursed employee expenses that are: Paid or incurred during your tax year, For carrying on your trade or business of being an employee, and Ordinary and necessary. Amend federal tax return 2012 An expense is ordinary if it is common and accepted in your trade, business, or profession. Amend federal tax return 2012 An expense is necessary if it is appropriate and helpful to your business. Amend federal tax return 2012 An expense does not have to be required to be considered necessary. Amend federal tax return 2012 Examples of unreimbursed employee expenses are listed next. Amend federal tax return 2012 The list is followed by discussions of additional unreimbursed employee expenses. Amend federal tax return 2012 Business bad debt of an employee. Amend federal tax return 2012 Education that is work related. Amend federal tax return 2012 (See chapter 27. Amend federal tax return 2012 ) Legal fees related to your job. Amend federal tax return 2012 Licenses and regulatory fees. Amend federal tax return 2012 Malpractice insurance premiums. Amend federal tax return 2012 Medical examinations required by an employer. Amend federal tax return 2012 Occupational taxes. Amend federal tax return 2012 Passport for a business trip. Amend federal tax return 2012 Subscriptions to professional journals and trade magazines related to your work. Amend federal tax return 2012 Travel, transportation, entertainment, and gifts related to your work. Amend federal tax return 2012 (See chapter 26. Amend federal tax return 2012 ) Business Liability Insurance You can deduct insurance premiums you paid for protection against personal liability for wrongful acts on the job. Amend federal tax return 2012 Damages for Breach of Employment Contract If you break an employment contract, you can deduct damages you pay your former employer that are attributable to the pay you received from that employer. Amend federal tax return 2012 Depreciation on Computers You can claim a depreciation deduction for a computer that you use in your work as an employee if its use is: For the convenience of your employer, and Required as a condition of your employment. Amend federal tax return 2012 For more information about the rules and exceptions to the rules affecting the allowable deductions for a home computer, see Publication 529. Amend federal tax return 2012 Dues to Chambers of Commerce and Professional Societies You may be able to deduct dues paid to professional organizations (such as bar associations and medical associations) and to chambers of commerce and similar organizations, if membership helps you carry out the duties of your job. Amend federal tax return 2012 Similar organizations include: Boards of trade, Business leagues, Civic or public service organizations, Real estate boards, and Trade associations. Amend federal tax return 2012 Lobbying and political activities. Amend federal tax return 2012   You may not be able to deduct that part of your dues that is for certain lobbying and political activities. Amend federal tax return 2012 See Dues used for lobbying under Nondeductible Expenses, later. Amend federal tax return 2012 Educator Expenses If you were an eligible educator in 2013, you can deduct up to $250 of qualified expenses you paid in 2013 as an adjustment to gross income on Form 1040, line 23, rather than as a miscellaneous itemized deduction. Amend federal tax return 2012 If you file Form 1040A, you can deduct these expenses on line 16. Amend federal tax return 2012 If you and your spouse are filing jointly and both of you were eligible educators, the maximum deduction is $500. Amend federal tax return 2012 However, neither spouse can deduct more than $250 of his or her qualified expenses. Amend federal tax return 2012 Home Office If you use a part of your home regularly and exclusively for business purposes, you may be able to deduct a part of the operating expenses and depreciation of your home. Amend federal tax return 2012 You can claim this deduction for the business use of a part of your home only if you use that part of your home regularly and exclusively: As your principal place of business for any trade or business, As a place to meet or deal with your patients, clients, or customers in the normal course of your trade or business, or In the case of a separate structure not attached to your home, in connection with your trade or business. Amend federal tax return 2012 The regular and exclusive business use must be for the convenience of your employer and not just appropriate and helpful in your job. Amend federal tax return 2012 See Publication 587 for more detailed information and a worksheet. Amend federal tax return 2012 Job Search Expenses You can deduct certain expenses you have in looking for a new job in your present occupation, even if you do not get a new job. Amend federal tax return 2012 You cannot deduct these expenses if: You are looking for a job in a new occupation, There was a substantial break between the ending of your last job and your looking for a new one, or You are looking for a job for the first time. Amend federal tax return 2012 Employment and outplacement agency fees. Amend federal tax return 2012   You can deduct employment and outplacement agency fees you pay in looking for a new job in your present occupation. Amend federal tax return 2012 Employer pays you back. Amend federal tax return 2012   If, in a later year, your employer pays you back for employment agency fees, you must include the amount you receive in your gross income up to the amount of your tax benefit in the earlier year. Amend federal tax return 2012 (See Recoveries in chapter 12. Amend federal tax return 2012 ) Employer pays the employment agency. Amend federal tax return 2012   If your employer pays the fees directly to the employment agency and you are not responsible for them, you do not include them in your gross income. Amend federal tax return 2012 Résumé. Amend federal tax return 2012   You can deduct amounts you spend for preparing and mailing copies of a résumé to prospective employers if you are looking for a new job in your present occupation. Amend federal tax return 2012 Travel and transportation expenses. Amend federal tax return 2012   If you travel to an area and, while there, you look for a new job in your present occupation, you may be able to deduct travel expenses to and from the area. Amend federal tax return 2012 You can deduct the travel expenses if the trip is primarily to look for a new job. Amend federal tax return 2012 The amount of time you spend on personal activity compared to the amount of time you spend in looking for work is important in determining whether the trip is primarily personal or is primarily to look for a new job. Amend federal tax return 2012   Even if you cannot deduct the travel expenses to and from an area, you can deduct the expenses of looking for a new job in your present occupation while in the area. Amend federal tax return 2012   You can choose to use the standard mileage rate to figure your car expenses. Amend federal tax return 2012 The 2013 rate for business use of a vehicle is 56½ cents per mile. Amend federal tax return 2012 See chapter 26 for more information. Amend federal tax return 2012 Licenses and Regulatory Fees You can deduct the amount you pay each year to state or local governments for licenses and regulatory fees for your trade, business, or profession. Amend federal tax return 2012 Occupational Taxes You can deduct an occupational tax charged at a flat rate by a locality for the privilege of working or conducting a business in the locality. Amend federal tax return 2012 If you are an employee, you can claim occupational taxes only as a miscellaneous deduction subject to the 2% limit; you cannot claim them as a deduction for taxes elsewhere on your return. Amend federal tax return 2012 Repayment of Income Aid Payment An “income aid payment” is one that is received under an employer's plan to aid employees who lose their jobs because of lack of work. Amend federal tax return 2012 If you repay a lump-sum income aid payment that you received and included in income in an earlier year, you can deduct the repayment. Amend federal tax return 2012 Research Expenses of a College Professor If you are a college professor, you can deduct research expenses, including travel expenses, for teaching, lecturing, or writing and publishing on subjects that relate directly to your teaching duties. Amend federal tax return 2012 You must have undertaken the research as a means of carrying out the duties expected of a professor and without expectation of profit apart from salary. Amend federal tax return 2012 However, you cannot deduct the cost of travel as a form of education. Amend federal tax return 2012 Tools Used in Your Work Generally, you can deduct amounts you spend for tools used in your work if the tools wear out and are thrown away within 1 year from the date of purchase. Amend federal tax return 2012 You can depreciate the cost of tools that have a useful life substantially beyond the tax year. Amend federal tax return 2012 For more information about depreciation, see Publication 946. Amend federal tax return 2012 Union Dues and Expenses You can deduct dues and initiation fees you pay for union membership. Amend federal tax return 2012 You can also deduct assessments for benefit payments to unemployed union members. Amend federal tax return 2012 However, you cannot deduct the part of the assessments or contributions that provides funds for the payment of sick, accident, or death benefits. Amend federal tax return 2012 Also, you cannot deduct contributions to a pension fund, even if the union requires you to make the contributions. Amend federal tax return 2012 You may not be able to deduct amounts you pay to the union that are related to certain lobbying and political activities. Amend federal tax return 2012 See Lobbying Expenses under Nondeductible Expenses, later. Amend federal tax return 2012 Work Clothes and Uniforms You can deduct the cost and upkeep of work clothes if the following two requirements are met. Amend federal tax return 2012 You must wear them as a condition of your employment. Amend federal tax return 2012 The clothes are not suitable for everyday wear. Amend federal tax return 2012 It is not enough that you wear distinctive clothing. Amend federal tax return 2012 The clothing must be specifically required by your employer. Amend federal tax return 2012 Nor is it enough that you do not, in fact, wear your work clothes away from work. Amend federal tax return 2012 The clothing must not be suitable for taking the place of your regular clothing. Amend federal tax return 2012 Examples of workers who may be able to deduct the cost and upkeep of work clothes are: delivery workers, firefighters, health care workers, law enforcement officers, letter carriers, professional athletes, and transportation workers (air, rail, bus, etc. Amend federal tax return 2012 ). Amend federal tax return 2012 Musicians and entertainers can deduct the cost of theatrical clothing and accessories that are not suitable for everyday wear. Amend federal tax return 2012 However, work clothing consisting of white cap, white shirt or white jacket, white bib overalls, and standard work shoes, which a painter is required by his union to wear on the job, is not distinctive in character or in the nature of a uniform. Amend federal tax return 2012 Similarly, the costs of buying and maintaining blue work clothes worn by a welder at the request of a foreman are not deductible. Amend federal tax return 2012 Protective clothing. Amend federal tax return 2012   You can deduct the cost of protective clothing required in your work, such as safety shoes or boots, safety glasses, hard hats, and work gloves. Amend federal tax return 2012   Examples of workers who may be required to wear safety items are: carpenters, cement workers, chemical workers, electricians, fishing boat crew members, machinists, oil field workers, pipe fitters, steamfitters, and truck drivers. Amend federal tax return 2012 Military uniforms. Amend federal tax return 2012   You generally cannot deduct the cost of your uniforms if you are on full-time active duty in the armed forces. Amend federal tax return 2012 However, if you are an armed forces reservist, you can deduct the unreimbursed cost of your uniform if military regulations restrict you from wearing it except while on duty as a reservist. Amend federal tax return 2012 In figuring the deduction, you must reduce the cost by any nontaxable allowance you receive for these expenses. Amend federal tax return 2012   If local military rules do not allow you to wear fatigue uniforms when you are off duty, you can deduct the amount by which the cost of buying and keeping up these uniforms is more than the uniform allowance you receive. Amend federal tax return 2012   You can deduct the cost of your uniforms if you are a civilian faculty or staff member of a military school. Amend federal tax return 2012 Tax Preparation Fees (Line 22) You can usually deduct tax preparation fees in the year you pay them. Amend federal tax return 2012 Thus, on your 2013 return, you can deduct fees paid in 2013 for preparing your 2012 return. Amend federal tax return 2012 These fees include the cost of tax preparation software programs and tax publications. Amend federal tax return 2012 They also include any fee you paid for electronic filing of your return. Amend federal tax return 2012 Other Expenses (Line 23) You can deduct certain other expenses as miscellaneous itemized deductions subject to the 2% limit. Amend federal tax return 2012 On Schedule A (Form 1040), line 23, you can deduct expenses that you pay: To produce or collect income that must be included in your gross income, To manage, conserve, or maintain property held for producing such income, or To determine, contest, pay, or claim a refund of any tax. Amend federal tax return 2012 You can deduct expenses you pay for the purposes in (1) and (2) above only if they are reasonably and closely related to these purposes. Amend federal tax return 2012 Some of these other expenses are explained in the following discussions. Amend federal tax return 2012 If the expenses you pay produce income that is only partially taxable, see Tax-Exempt Income Expenses , later, under Nondeductible Expenses. Amend federal tax return 2012 Appraisal Fees You can deduct appraisal fees if you pay them to figure a casualty loss or the fair market value of donated property. Amend federal tax return 2012 Casualty and Theft Losses You can deduct a casualty or theft loss as a miscellaneous itemized deduction subject to the 2% limit if you used the damaged or stolen property in performing services as an employee. Amend federal tax return 2012 First report the loss in Section B of Form 4684, Casualties and Thefts. Amend federal tax return 2012 You may also have to include the loss on Form 4797, Sales of Business Property, if you are otherwise required to file that form. Amend federal tax return 2012 To figure your deduction, add all casualty or theft losses from this type of property included on Form 4684, lines 32 and 38b, or Form 4797, line 18a. Amend federal tax return 2012 For other casualty and theft losses, see chapter 25. Amend federal tax return 2012 Clerical Help and Office Rent You can deduct office expenses, such as rent and clerical help, that you have in connection with your investments and collecting the taxable income on them. Amend federal tax return 2012 Credit or Debit Card Convenience Fees You can deduct the convenience fee charged by the card processor for paying your income tax (including estimated tax payments) by credit or debit card. Amend federal tax return 2012 The fees are deductible in the year paid. Amend federal tax return 2012 Depreciation on Home Computer You can deduct depreciation on your home computer if you use it to produce income (for example, to manage your investments that produce taxable income). Amend federal tax return 2012 You generally must depreciate the computer using the straight line method over the Alternative Depreciation System (ADS) recovery period. Amend federal tax return 2012 But if you work as an employee and also use the computer in that work, see Publication 946. Amend federal tax return 2012 Excess Deductions of an Estate If an estate's total deductions in its last tax year are more than its gross income for that year, the beneficiaries succeeding to the estate's property can deduct the excess. Amend federal tax return 2012 Do not include deductions for the estate's personal exemption and charitable contributions when figuring the estate's total deductions. Amend federal tax return 2012 The beneficiaries can claim the deduction only for the tax year in which, or with which, the estate terminates, whether the year of termination is a normal year or a short tax year. Amend federal tax return 2012 For more information, see Termination of Estate in Publication 559, Survivors, Executors, and Administrators. Amend federal tax return 2012 Fees to Collect Interest and Dividends You can deduct fees you pay to a broker, bank, trustee, or similar agent to collect your taxable bond interest or dividends on shares of stock. Amend federal tax return 2012 But you cannot deduct a fee you pay to a broker to buy investment property, such as stocks or bonds. Amend federal tax return 2012 You must add the fee to the cost of the property. Amend federal tax return 2012 You cannot deduct the fee you pay to a broker to sell securities. Amend federal tax return 2012 You can use the fee only to figure gain or loss from the sale. Amend federal tax return 2012 See the Instructions for Form 8949 for information on how to report the fee. Amend federal tax return 2012 Hobby Expenses You can generally deduct hobby expenses, but only up to the amount of hobby income. Amend federal tax return 2012 A hobby is not a business because it is not carried on to make a profit. Amend federal tax return 2012 See Activity not for profit in chapter 12 under Other Income. Amend federal tax return 2012 Indirect Deductions of Pass-Through Entities Pass-through entities include partnerships, S corporations, and mutual funds that are not publicly offered. Amend federal tax return 2012 Deductions of pass-through entities are passed through to the partners or shareholders. Amend federal tax return 2012 The partners or shareholders can deduct their share of passed-through deductions for investment expenses as miscellaneous itemized deductions subject to the 2% limit. Amend federal tax return 2012 Example. Amend federal tax return 2012 You are a member of an investment club that is formed solely to invest in securities. Amend federal tax return 2012 The club is treated as a partnership. Amend federal tax return 2012 The partnership's income is solely from taxable dividends, interest, and gains from sales of securities. Amend federal tax return 2012 In this case, you can deduct your share of the partnership's operating expenses as miscellaneous itemized deductions subject to the 2% limit. Amend federal tax return 2012 However, if the investment club partnership has investments that also produce nontaxable income, you cannot deduct your share of the partnership's expenses that produce the nontaxable income. Amend federal tax return 2012 Publicly offered mutual funds. Amend federal tax return 2012   Publicly offered mutual funds do not pass deductions for investment expenses through to shareholders. Amend federal tax return 2012 A mutual fund is “publicly offered” if it is: Continuously offered pursuant to a public offering, Regularly traded on an established securities market, or Held by or for at least 500 persons at all times during the tax year. Amend federal tax return 2012   A publicly offered mutual fund will send you a Form 1099-DIV, Dividends and Distributions, or a substitute form, showing the net amount of dividend income (gross dividends minus investment expenses). Amend federal tax return 2012 This net figure is the amount you report on your return as income. Amend federal tax return 2012 You cannot further deduct investment expenses related to publicly offered mutual funds because they are already included as part of the net income amount. Amend federal tax return 2012 Information returns. Amend federal tax return 2012   You should receive information returns from pass-through entities. Amend federal tax return 2012 Partnerships and S corporations. Amend federal tax return 2012   These entities issue Schedule K-1, which lists the items and amounts you must report and identifies the tax return schedules and lines to use. Amend federal tax return 2012 Nonpublicly offered mutual funds. Amend federal tax return 2012   These funds will send you a Form 1099-DIV, Dividends and Distributions, or a substitute form, showing your share of gross income and investment expenses. Amend federal tax return 2012 You can claim the expenses only as a miscellaneous itemized deduction subject to the 2% limit. Amend federal tax return 2012 Investment Fees and Expenses You can deduct investment fees, custodial fees, trust administration fees, and other expenses you paid for managing your investments that produce taxable income. Amend federal tax return 2012 Legal Expenses You can usually deduct legal expenses that you incur in attempting to produce or collect taxable income or that you pay in connection with the determination, collection, or refund of any tax. Amend federal tax return 2012 You can also deduct legal expenses that are: Related to either doing or keeping your job, such as those you paid to defend yourself against criminal charges arising out of your trade or business, For tax advice related to a divorce, if the bill specifies how much is for tax advice and it is determined in a reasonable way, or To collect taxable alimony. Amend federal tax return 2012 You can deduct expenses of resolving tax issues relating to profit or loss from business (Schedule C or C-EZ), rentals or royalties (Schedule E), or farm income and expenses (Schedule F), on the appropriate schedule. Amend federal tax return 2012 You deduct expenses of resolving nonbusiness tax issues on Schedule A (Form 1040). Amend federal tax return 2012 See Tax Preparation Fees , earlier. Amend federal tax return 2012 Loss on Deposits For information on whether, and if so, how, you may deduct a loss on your deposit in a qualified financial institution, see Loss on Deposits in chapter 25. Amend federal tax return 2012 Repayments of Income If you had to repay an amount that you included in income in an earlier year, you may be able to deduct the amount you repaid. Amend federal tax return 2012 If the amount you had to repay was ordinary income of $3,000 or less, the deduction is subject to the 2% limit. Amend federal tax return 2012 If it was more than $3,000, see Repayments Under Claim of Right under Deductions Not Subject to the 2% Limit, later. Amend federal tax return 2012 Repayments of Social Security Benefits For information on how to deduct your repayments of certain social security benefits, see Repayments More Than Gross Benefits in chapter 11. Amend federal tax return 2012 Safe Deposit Box Rent You can deduct safe deposit box rent if you use the box to store taxable income-producing stocks, bonds, or investment-related papers and documents. Amend federal tax return 2012 You cannot deduct the rent if you use the box only for jewelry, other personal items, or tax-exempt securities. Amend federal tax return 2012 Service Charges on Dividend Reinvestment Plans You can deduct service charges you pay as a subscriber in a dividend reinvestment plan. Amend federal tax return 2012 These service charges include payments for: Holding shares acquired through a plan, Collecting and reinvesting cash dividends, and Keeping individual records and providing detailed statements of accounts. Amend federal tax return 2012 Trustee's Administrative Fees for IRA Trustee's administrative fees that are billed separately and paid by you in connection with your individual retirement arrangement (IRA) are deductible (if they are ordinary and necessary) as a miscellaneous itemized deduction subject to the 2% limit. Amend federal tax return 2012 For more information about IRAs, see chapter 17. Amend federal tax return 2012 Deductions Not Subject to the 2% Limit You can deduct the items listed below as miscellaneous itemized deductions. Amend federal tax return 2012 They are not subject to the 2% limit. Amend federal tax return 2012 Report these items on Schedule A (Form 1040), line 28. Amend federal tax return 2012 List of Deductions Each of the following items is discussed in detail after the list (except where indicated). Amend federal tax return 2012 Amortizable premium on taxable bonds. Amend federal tax return 2012 Casualty and theft losses from income- producing property. Amend federal tax return 2012 Federal estate tax on income in respect of a decedent. Amend federal tax return 2012 Gambling losses up to the amount of gambling winnings. Amend federal tax return 2012 Impairment-related work expenses of persons with disabilities. Amend federal tax return 2012 Loss from other activities from Schedule K-1 (Form 1065-B), box 2. Amend federal tax return 2012 Losses from Ponzi-type investment schemes. Amend federal tax return 2012 See Losses from Ponzi-type investment schemes under Theft in chapter 25. Amend federal tax return 2012 Repayments of more than $3,000 under a claim of right. Amend federal tax return 2012 Unrecovered investment in an annuity. Amend federal tax return 2012 Amortizable Premium on Taxable Bonds In general, if the amount you pay for a bond is greater than its stated principal amount, the excess is bond premium. Amend federal tax return 2012 You can elect to amortize the premium on taxable bonds. Amend federal tax return 2012 The amortization of the premium is generally an offset to interest income on the bond rather than a separate deduction item. Amend federal tax return 2012 Part of the premium on some bonds may be a miscellaneous deduction not subject to the 2% limit. Amend federal tax return 2012 For more information, see Amortizable Premium on Taxable Bonds in Publication 529, and Bond Premium Amortization in chapter 3 of Publication 550, Investment Income and Expenses. Amend federal tax return 2012 Casualty and Theft Losses of Income-Producing Property You can deduct a casualty or theft loss as a miscellaneous itemized deduction not subject to the 2% limit if the damaged or stolen property was income-producing property (property held for investment, such as stocks, notes, bonds, gold, silver, vacant lots, and works of art). Amend federal tax return 2012 First, report the loss in Form 4684, Section B. Amend federal tax return 2012 You may also have to include the loss on Form 4797, Sales of Business Property if you are otherwise required to file that form. Amend federal tax return 2012 To figure your deduction, add all casualty or theft losses from this type of property included on Form 4684, lines 32 and 38b, or Form 4797, line 18a. Amend federal tax return 2012 For more information on casualty and theft losses, see chapter 25. Amend federal tax return 2012 Federal Estate Tax on Income in Respect of a Decedent You can deduct the federal estate tax attributable to income in respect of a decedent that you as a beneficiary include in your gross income. Amend federal tax return 2012 Income in respect of the decedent is gross income that the decedent would have received had death not occurred and that was not properly includible in the decedent's final income tax return. Amend federal tax return 2012 See Publication 559 for more information. Amend federal tax return 2012 Gambling Losses Up to the Amount of Gambling Winnings You must report the full amount of your gambling winnings for the year on Form 1040, line 21. Amend federal tax return 2012 You deduct your gambling losses for the year on Schedule A (Form 1040), line 28. Amend federal tax return 2012 You cannot deduct gambling losses that are more than your winnings. Amend federal tax return 2012 You cannot reduce your gambling winnings by your gambling losses and report the difference. Amend federal tax return 2012 You must report the full amount of your winnings as income and claim your losses (up to the amount of winnings) as an itemized deduction. Amend federal tax return 2012 Therefore, your records should show your winnings separately from your losses. Amend federal tax return 2012 Diary of winnings and losses. Amend federal tax return 2012 You must keep an accurate diary or similar record of your losses and winnings. Amend federal tax return 2012 Your diary should contain at least the following information. Amend federal tax return 2012 The date and type of your specific wager or wagering activity. Amend federal tax return 2012 The name and address or location of the gambling establishment. Amend federal tax return 2012 The names of other persons present with you at the gambling establishment. Amend federal tax return 2012 The amount(s) you won or lost. Amend federal tax return 2012 See Publication 529 for more information. Amend federal tax return 2012 Impairment-Related Work Expenses If you have a physical or mental disability that limits your being employed, or substantially limits one or more of your major life activities, such as performing manual tasks, walking, speaking, breathing, learning, and working, you can deduct your impairment-related work expenses. Amend federal tax return 2012 Impairment-related work expenses are ordinary and necessary business expenses for attendant care services at your place of work and for other expenses in connection with your place of work that are necessary for you to be able to work. Amend federal tax return 2012 Self-employed. Amend federal tax return 2012   If you are self-employed, enter your impairment-related work expenses on the appropriate form (Schedule C, C-EZ, E, or F) used to report your business income and expenses. Amend federal tax return 2012 Loss From Other Activities From Schedule K-1 (Form 1065-B), Box 2 If the amount reported in Schedule K-1 (Form 1065-B), box 2, is a loss, report it on Schedule A (Form 1040), line 28. Amend federal tax return 2012 It is not subject to the passive activity limitations. Amend federal tax return 2012 Repayments Under Claim of Right If you had to repay more than $3,000 that you included in your income in an earlier year because at the time you thought you had an unrestricted right to it, you may be able to deduct the amount you repaid or take a credit against your tax. Amend federal tax return 2012 See Repayments in chapter 12 for more information. Amend federal tax return 2012 Unrecovered Investment in Annuity A retiree who contributed to the cost of an annuity can exclude from income a part of each payment received as a tax-free return of the retiree's investment. Amend federal tax return 2012 If the retiree dies before the entire investment is recovered tax free, any unrecovered investment can be deducted on the retiree's final income tax return. Amend federal tax return 2012 See chapter 10 for more information about the tax treatment of pensions and annuities. Amend federal tax return 2012 Nondeductible Expenses Examples of nondeductible expenses are listed next. Amend federal tax return 2012 The list is followed by discussions of additional nondeductible expenses. Amend federal tax return 2012 List of Nondeductible Expenses Broker's commissions that you paid in connection with your IRA or other investment property. Amend federal tax return 2012 Burial or funeral expenses, including the cost of a cemetery lot. Amend federal tax return 2012 Capital expenses. Amend federal tax return 2012 Fees and licenses, such as car licenses, marriage licenses, and dog tags. Amend federal tax return 2012 Hobby losses, but see Hobby Expenses , earlier. Amend federal tax return 2012 Home repairs, insurance, and rent. Amend federal tax return 2012 Illegal bribes and kickbacks. Amend federal tax return 2012 See Bribes and kickbacks in chapter 11 of Publication 535. Amend federal tax return 2012 Losses from the sale of your home, furniture, personal car, etc. Amend federal tax return 2012 Personal disability insurance premiums. Amend federal tax return 2012 Personal, living, or family expenses. Amend federal tax return 2012 The value of wages never received or lost vacation time. Amend federal tax return 2012 Adoption Expenses You cannot deduct the expenses of adopting a child, but you may be able to take a credit for those expenses. Amend federal tax return 2012 See chapter 37. Amend federal tax return 2012 Campaign Expenses You cannot deduct campaign expenses of a candidate for any office, even if the candidate is running for reelection to the office. Amend federal tax return 2012 These include qualification and registration fees for primary elections. Amend federal tax return 2012 Legal fees. Amend federal tax return 2012   You cannot deduct legal fees paid to defend charges that arise from participation in a political campaign. Amend federal tax return 2012 Check-Writing Fees on Personal Account If you have a personal checking account, you cannot deduct fees charged by the bank for the privilege of writing checks, even if the account pays interest. Amend federal tax return 2012 Club Dues Generally, you cannot deduct the cost of membership in any club organized for business, pleasure, recreation, or other social purpose. Amend federal tax return 2012 This includes business, social, athletic, luncheon, sporting, airline, hotel, golf, and country clubs. Amend federal tax return 2012 You cannot deduct dues paid to an organization if one of its main purposes is to: Conduct entertainment activities for members or their guests, or Provide members or their guests with access to entertainment facilities. Amend federal tax return 2012 Dues paid to airline, hotel, and luncheon clubs are not deductible. Amend federal tax return 2012 Commuting Expenses You cannot deduct commuting expenses (the cost of transportation between your home and your main or regular place of work). Amend federal tax return 2012 If you haul tools, instruments, or other items, in your car to and from work, you can deduct only the additional cost of hauling the items such as the rent on a trailer to carry the items. Amend federal tax return 2012 Fines or Penalties You cannot deduct fines or penalties you pay to a governmental unit for violating a law. Amend federal tax return 2012 This includes an amount paid in settlement of your actual or potential liability for a fine or penalty (civil or criminal). Amend federal tax return 2012 Fines or penalties include parking tickets, tax penalties, and penalties deducted from teachers' paychecks after an illegal strike. Amend federal tax return 2012 Health Spa Expenses You cannot deduct health spa expenses, even if there is a job requirement to stay in excellent physical condition, such as might be required of a law enforcement officer. Amend federal tax return 2012 Home Security System You cannot deduct the cost of a home security system as a miscellaneous deduction. Amend federal tax return 2012 However, you may be able to claim a deduction for a home security system as a business expense if you have a home office. Amend federal tax return 2012 See Home Office under Unreimbursed Employee Expenses, earlier, and Security System under Deducting Expenses in Publication 587. Amend federal tax return 2012 Investment-Related Seminars You cannot deduct any expenses for attending a convention, seminar, or similar meeting for investment purposes. Amend federal tax return 2012 Life Insurance Premiums You cannot deduct premiums you pay on your life insurance. Amend federal tax return 2012 You may be able to deduct, as alimony, premiums you pay on life insurance policies assigned to your former spouse. Amend federal tax return 2012 See chapter 18 for information on alimony. Amend federal tax return 2012 Lobbying Expenses You generally cannot deduct amounts paid or incurred for lobbying expenses. Amend federal tax return 2012 These include expenses to: Influence legislation, Participate or intervene in any political campaign for, or against, any candidate for public office, Attempt to influence the general public, or segments of the public, about elections, legislative matters, or referendums, or Communicate directly with covered executive branch officials in any attempt to influence the official actions or positions of those officials. Amend federal tax return 2012 Lobbying expenses also include any amounts paid or incurred for research, preparation, planning, or coordination of any of these activities. Amend federal tax return 2012 Dues used for lobbying. Amend federal tax return 2012   If a tax-exempt organization notifies you that part of the dues or other amounts you pay to the organization are used to pay nondeductible lobbying expenses, you cannot deduct that part. Amend federal tax return 2012 See Lobbying Expenses in Publication 529 for information on exceptions. Amend federal tax return 2012 Lost or Mislaid Cash or Property You cannot deduct a loss based on the mere disappearance of money or property. Amend federal tax return 2012 However, an accidental loss or disappearance of property can qualify as a casualty if it results from an identifiable event that is sudden, unexpected, or unusual. Amend federal tax return 2012 See chapter 25. Amend federal tax return 2012 Example. Amend federal tax return 2012 A car door is accidentally slammed on your hand, breaking the setting of your diamond ring. Amend federal tax return 2012 The diamond falls from the ring and is never found. Amend federal tax return 2012 The loss of the diamond is a casualty. Amend federal tax return 2012 Lunches with Co-workers You cannot deduct the expenses of lunches with co-workers, except while traveling away from home on business. Amend federal tax return 2012 See chapter 26 for information on deductible expenses while traveling away from home. Amend federal tax return 2012 Meals While Working Late You cannot deduct the cost of meals while working late. Amend federal tax return 2012 However, you may be able to claim a deduction if the cost of meals is a deductible entertainment expense, or if you are traveling away from home. Amend federal tax return 2012 See chapter 26 for information on deductible entertainment expenses and expenses while traveling away from home. Amend federal tax return 2012 Personal Legal Expenses You cannot deduct personal legal expenses such as those for the following. Amend federal tax return 2012 Custody of children. Amend federal tax return 2012 Breach of promise to marry suit. Amend federal tax return 2012 Civil or criminal charges resulting from a personal relationship. Amend federal tax return 2012 Damages for personal injury, except for certain unlawful discrimination and whistleblower claims. Amend federal tax return 2012 Preparation of a title (or defense or perfection of a title). Amend federal tax return 2012 Preparation of a will. Amend federal tax return 2012 Property claims or property settlement in a divorce. Amend federal tax return 2012 You cannot deduct these expenses even if a result of the legal proceeding is the loss of income-producing property. Amend federal tax return 2012 Political Contributions You cannot deduct contributions made to a political candidate, a campaign committee, or a newsletter fund. Amend federal tax return 2012 Advertisements in convention bulletins and admissions to dinners or programs that benefit a political party or political candidate are not deductible. Amend federal tax return 2012 Professional Accreditation Fees You cannot deduct professional accreditation fees such as the following. Amend federal tax return 2012 Accounting certificate fees paid for the initial right to practice accounting. Amend federal tax return 2012 Bar exam fees and incidental expenses in securing initial admission to the bar. Amend federal tax return 2012 Medical and dental license fees paid to get initial licensing. Amend federal tax return 2012 Professional Reputation You cannot deduct expenses of radio and TV appearances to increase your personal prestige or establish your professional reputation. Amend federal tax return 2012 Relief Fund Contributions You cannot deduct contributions paid to a private plan that pays benefits to any covered employee who cannot work because of any injury or illness not related to the job. Amend federal tax return 2012 Residential Telephone Service You cannot deduct any charge (including taxes) for basic local telephone service for the first telephone line to your residence, even if it is used in a trade or business. Amend federal tax return 2012 Stockholders' Meetings You cannot deduct transportation and other expenses you pay to attend stockholders' meetings of companies in which you own stock but have no other interest. Amend federal tax return 2012 You cannot deduct these expenses even if you are attending the meeting to get information that would be useful in making further investments. Amend federal tax return 2012 Tax-Exempt Income Expenses You cannot deduct expenses to produce tax-exempt income. Amend federal tax return 2012 You cannot deduct interest on a debt incurred or continued to buy or carry  tax-exempt securities. Amend federal tax return 2012 If you have expenses to produce both taxable and tax-exempt income, but you cannot identify the expenses that produce each type of income, you must divide the expenses based on the amount of each type of income to determine the amount that you can deduct. Amend federal tax return 2012 Example. Amend federal tax return 2012 During the year, you received taxable interest of $4,800 and tax-exempt interest of $1,200. Amend federal tax return 2012 In earning this income, you had total expenses of $500 during the year. Amend federal tax return 2012 You cannot identify the amount of each expense item that is for each income item. Amend federal tax return 2012 Therefore, 80% ($4,800/$6,000) of the expense is for the taxable interest and 20% ($1,200/$6,000) is for the tax-exempt interest. Amend federal tax return 2012 You can deduct, subject to the 2% limit, expenses of $400 (80% of $500). Amend federal tax return 2012 Travel Expenses for Another Individual You generally cannot deduct travel expenses you pay or incur for a spouse, dependent, or other individual who accompanies you (or your employee) on business or personal travel unless the spouse, dependent, or other individual is an employee of the taxpayer, the travel is for a bona fide business purpose, and such expenses would otherwise be deductible by the spouse, dependent, or other individual. Amend federal tax return 2012 See chapter 26 for more information on deductible travel expenses. Amend federal tax return 2012 Voluntary Unemployment Benefit Fund Contributions You cannot deduct voluntary unemployment benefit fund contributions you make to a union fund or a private fund. Amend federal tax return 2012 However, you can deduct contributions as taxes if state law requires you to make them to a state unemployment fund that covers you for the loss of wages from unemployment caused by business conditions. Amend federal tax return 2012 Wristwatches You cannot deduct the cost of a wristwatch, even if there is a job requirement that you know the correct time to properly perform your duties. Amend federal tax return 2012 Prev  Up  Next   Home   More Online Publications
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Understanding Your CP141C Notice

You are receiving this notice because you did not respond to a previous request for missing or incomplete information on your return and your return is late.


What you need to do

  • Send the incomplete/missing information described in the “About your return” section on the notice.
  • Include the contact voucher at the end of the notice.
  • Send the amount due to avoid interest charges.

You may want to

  • If the reason your return was incomplete was beyond your control, send us a signed explanation with any supporting documentation.

Answers to Common Questions

Q. What if I disagree with the penalty?

A. Send a written statement with any supporting documentation to the address on the notice.

 

Page Last Reviewed or Updated: 21-Jan-2014

Printable samples of this notice (PDF)

 

 

How to get help

  • Call the 1-800 number listed on the top right corner of your notice.
  • Authorize someone (e.g., accountant) to contact the IRS on your behalf using Form 2848.
  • See if you qualify for help from a Low Income Taxpayer Clinic.
     

The Amend Federal Tax Return 2012

Amend federal tax return 2012 5. Amend federal tax return 2012   Additional Rules for Listed Property Table of Contents Introduction Useful Items - You may want to see: What Is Listed Property?Passenger Automobiles Other Property Used for Transportation Computers and Related Peripheral Equipment Can Employees Claim a Deduction? What Is the Business-Use Requirement?How To Allocate Use Qualified Business Use Recapture of Excess Depreciation Lessee's Inclusion Amount Do the Passenger Automobile Limits Apply?Maximum Depreciation Deduction Deductions After the Recovery Period Deductions For Passenger Automobiles Acquired in a Trade-in What Records Must Be Kept?Adequate Records How Is Listed Property Information Reported? Introduction This chapter discusses the deduction limits and other special rules that apply to certain listed property. Amend federal tax return 2012 Listed property includes cars and other property used for transportation, property used for entertainment, and certain computers. Amend federal tax return 2012 Deductions for listed property (other than certain leased property) are subject to the following special rules and limits. Amend federal tax return 2012 Deduction for employees. Amend federal tax return 2012 If your use of the property is not for your employer's convenience or is not required as a condition of your employment, you cannot deduct depreciation or rent expenses for your use of the property as an employee. Amend federal tax return 2012 Business-use requirement. Amend federal tax return 2012 If the property is not used predominantly (more than 50%) for qualified business use, you cannot claim the section 179 deduction or a special depreciation allowance. Amend federal tax return 2012 In addition, you must figure any depreciation deduction under the Modified Accelerated Cost Recovery System (MACRS) using the straight line method over the ADS recovery period. Amend federal tax return 2012 You may also have to recapture (include in income) any excess depreciation claimed in previous years. Amend federal tax return 2012 A similar inclusion amount applies to certain leased property. Amend federal tax return 2012 Passenger automobile limits and rules. Amend federal tax return 2012 Annual limits apply to depreciation deductions (including section 179 deductions and any special depreciation allowance) for certain passenger automobiles. Amend federal tax return 2012 You can continue to deduct depreciation for the unrecovered basis resulting from these limits after the end of the recovery period. Amend federal tax return 2012 This chapter defines listed property and explains the special rules and depreciation deduction limits that apply, including the special inclusion amount rule for leased property. Amend federal tax return 2012 It also discusses the recordkeeping rules for listed property and explains how to report information about the property on your tax return. Amend federal tax return 2012 Useful Items - You may want to see: Publication 463 Travel, Entertainment, Gift, and Car Expenses 535 Business Expenses 587 Business Use of Your Home (Including Use by Daycare Providers) Form (and Instructions) 2106 Employee Business Expenses 2106-EZ Unreimbursed Employee Business Expenses 4562 Depreciation and Amortization 4797 Sales of Business Property See chapter 6 for information about getting publications and forms. Amend federal tax return 2012 What Is Listed Property? Listed property is any of the following. Amend federal tax return 2012 Passenger automobiles (as defined later). Amend federal tax return 2012 Any other property used for transportation, unless it is an excepted vehicle. Amend federal tax return 2012 Property generally used for entertainment, recreation, or amusement (including photographic, phonographic, communication, and video-recording equipment). Amend federal tax return 2012 Computers and related peripheral equipment, unless used only at a regular business establishment and owned or leased by the person operating the establishment. Amend federal tax return 2012 A regular business establishment includes a portion of a dwelling unit that is used both regularly and exclusively for business as discussed in Publication 587. Amend federal tax return 2012 Improvements to listed property. Amend federal tax return 2012   An improvement made to listed property that must be capitalized is treated as a new item of depreciable property. Amend federal tax return 2012 The recovery period and method of depreciation that apply to the listed property as a whole also apply to the improvement. Amend federal tax return 2012 For example, if you must depreciate the listed property using the straight line method, you also must depreciate the improvement using the straight line method. Amend federal tax return 2012 Passenger Automobiles A passenger automobile is any four-wheeled vehicle made primarily for use on public streets, roads, and highways and rated at 6,000 pounds or less of unloaded gross vehicle weight (6,000 pounds or less of gross vehicle weight for trucks and vans). Amend federal tax return 2012 It includes any part, component, or other item physically attached to the automobile at the time of purchase or usually included in the purchase price of an automobile. Amend federal tax return 2012 The following vehicles are not considered passenger automobiles for these purposes. Amend federal tax return 2012 An ambulance, hearse, or combination ambulance-hearse used directly in a trade or business. Amend federal tax return 2012 A vehicle used directly in the trade or business of transporting persons or property for pay or hire. Amend federal tax return 2012 A truck or van that is a qualified nonpersonal use vehicle. Amend federal tax return 2012 Qualified nonpersonal use vehicles. Amend federal tax return 2012   Qualified nonpersonal use vehicles are vehicles that by their nature are not likely to be used more than a minimal amount for personal purposes. Amend federal tax return 2012 They include the trucks and vans listed as excepted vehicles under Other Property Used for Transportation , next. Amend federal tax return 2012 They also include trucks and vans that have been specially modified so that they are not likely to be used more than a minimal amount for personal purposes, such as by installation of permanent shelving and painting the vehicle to display advertising or the company's name. Amend federal tax return 2012 For a detailed discussion of passenger automobiles, including leased passenger automobiles, see  Publication 463. Amend federal tax return 2012 Other Property Used for Transportation Although vehicles used to transport persons or property for pay or hire and vehicles rated at more than the 6,000-pound threshold are not passenger automobiles, they are still “other property used for transportation” and are subject to the special rules for listed property. Amend federal tax return 2012 Other property used for transportation includes trucks, buses, boats, airplanes, motorcycles, and any other vehicles used to transport persons or goods. Amend federal tax return 2012 Excepted vehicles. Amend federal tax return 2012   Other property used for transportation does not include the following qualified nonpersonal use vehicles (defined earlier under Passenger Automobiles ). Amend federal tax return 2012 Clearly marked police and fire vehicles. Amend federal tax return 2012 Unmarked vehicles used by law enforcement officers if the use is officially authorized. Amend federal tax return 2012 Ambulances used as such and hearses used as such. Amend federal tax return 2012 Any vehicle with a loaded gross vehicle weight of over 14,000 pounds that is designed to carry cargo. Amend federal tax return 2012 Bucket trucks (cherry pickers), cement mixers, dump trucks (including garbage trucks), flatbed trucks, and refrigerated trucks. Amend federal tax return 2012 Combines, cranes and derricks, and forklifts. Amend federal tax return 2012 Delivery trucks with seating only for the driver, or only for the driver plus a folding jump seat. Amend federal tax return 2012 Qualified moving vans. Amend federal tax return 2012 Qualified specialized utility repair trucks. Amend federal tax return 2012 School buses used in transporting students and employees of schools. Amend federal tax return 2012 Other buses with a capacity of at least 20 passengers that are used as passenger buses. Amend federal tax return 2012 Tractors and other special purpose farm vehicles. Amend federal tax return 2012 Clearly marked police and fire vehicle. Amend federal tax return 2012   A clearly marked police or fire vehicle is a vehicle that meets all the following requirements. Amend federal tax return 2012 It is owned or leased by a governmental unit or an agency or instrumentality of a governmental unit. Amend federal tax return 2012 It is required to be used for commuting by a police officer or fire fighter who, when not on a regular shift, is on call at all times. Amend federal tax return 2012 It is prohibited from being used for personal use (other than commuting) outside the limit of the police officer's arrest powers or the fire fighter's obligation to respond to an emergency. Amend federal tax return 2012 It is clearly marked with painted insignia or words that make it readily apparent that it is a police or fire vehicle. Amend federal tax return 2012 A marking on a license plate is not a clear marking for these purposes. Amend federal tax return 2012 Qualified moving van. Amend federal tax return 2012   A qualified moving van is any truck or van used by a professional moving company for moving household or business goods if the following requirements are met. Amend federal tax return 2012 No personal use of the van is allowed other than for travel to and from a move site or for minor personal use, such as a stop for lunch on the way from one move site to another. Amend federal tax return 2012 Personal use for travel to and from a move site happens no more than five times a month on average. Amend federal tax return 2012 Personal use is limited to situations in which it is more convenient to the employer, because of the location of the employee's residence in relation to the location of the move site, for the van not to be returned to the employer's business location. Amend federal tax return 2012 Qualified specialized utility repair truck. Amend federal tax return 2012   A truck is a qualified specialized utility repair truck if it is not a van or pickup truck and all the following apply. Amend federal tax return 2012 The truck was specifically designed for and is used to carry heavy tools, testing equipment, or parts. Amend federal tax return 2012 Shelves, racks, or other permanent interior construction has been installed to carry and store the tools, equipment, or parts and would make it unlikely that the truck would be used, other than minimally, for personal purposes. Amend federal tax return 2012 The employer requires the employee to drive the truck home in order to be able to respond in emergency situations for purposes of restoring or maintaining electricity, gas, telephone, water, sewer, or steam utility services. Amend federal tax return 2012 Computers and Related Peripheral Equipment A computer is a programmable, electronically activated device capable of accepting information, applying prescribed processes to the information, and supplying the results of those processes with or without human intervention. Amend federal tax return 2012 It consists of a central processing unit with extensive storage, logic, arithmetic, and control capabilities. Amend federal tax return 2012 Related peripheral equipment is any auxiliary machine which is designed to be controlled by the central processing unit of a computer. Amend federal tax return 2012 The following are neither computers nor related peripheral equipment. Amend federal tax return 2012 Any equipment that is an integral part of other property that is not a computer. Amend federal tax return 2012 Typewriters, calculators, adding and accounting machines, copiers, duplicating equipment, and similar equipment. Amend federal tax return 2012 Equipment of a kind used primarily for the user's amusement or entertainment, such as video games. Amend federal tax return 2012 Can Employees Claim a Deduction? If you are an employee, you can claim a depreciation deduction for the use of your listed property (whether owned or rented) in performing services as an employee only if your use is a business use. Amend federal tax return 2012 The use of your property in performing services as an employee is a business use only if both the following requirements are met. Amend federal tax return 2012 The use is for your employer's convenience. Amend federal tax return 2012 The use is required as a condition of your employment. Amend federal tax return 2012 If these requirements are not met, you cannot deduct depreciation (including the section 179 deduction) or rent expenses for your use of the property as an employee. Amend federal tax return 2012 Employer's convenience. Amend federal tax return 2012   Whether the use of listed property is for your employer's convenience must be determined from all the facts. Amend federal tax return 2012 The use is for your employer's convenience if it is for a substantial business reason of the employer. Amend federal tax return 2012 The use of listed property during your regular working hours to carry on your employer's business generally is for the employer's convenience. Amend federal tax return 2012 Condition of employment. Amend federal tax return 2012   Whether the use of listed property is a condition of your employment depends on all the facts and circumstances. Amend federal tax return 2012 The use of property must be required for you to perform your duties properly. Amend federal tax return 2012 Your employer does not have to require explicitly that you use the property. Amend federal tax return 2012 However, a mere statement by the employer that the use of the property is a condition of your employment is not sufficient. Amend federal tax return 2012 Example 1. Amend federal tax return 2012 Virginia Sycamore is employed as a courier with We Deliver, which provides local courier services. Amend federal tax return 2012 She owns and uses a motorcycle to deliver packages to downtown offices. Amend federal tax return 2012 We Deliver explicitly requires all delivery persons to own a car or motorcycle for use in their employment. Amend federal tax return 2012 Virginia's use of the motorcycle is for the convenience of We Deliver and is required as a condition of employment. Amend federal tax return 2012 Example 2. Amend federal tax return 2012 Bill Nelson is an inspector for Uplift, a construction company with many sites in the local area. Amend federal tax return 2012 He must travel to these sites on a regular basis. Amend federal tax return 2012 Uplift does not furnish an automobile or explicitly require him to use his own automobile. Amend federal tax return 2012 However, it pays him for any costs he incurs in traveling to the various sites. Amend federal tax return 2012 The use of his own automobile or a rental automobile is for the convenience of Uplift and is required as a condition of employment. Amend federal tax return 2012 Example 3. Amend federal tax return 2012 Assume the same facts as in Example 2 except that Uplift furnishes a car to Bill, who chooses to use his own car and receive payment for using it. Amend federal tax return 2012 The use of his own car is neither for the convenience of Uplift nor required as a condition of employment. Amend federal tax return 2012 Example 4. Amend federal tax return 2012 Marilyn Lee is a pilot for Y Company, a small charter airline. Amend federal tax return 2012 Y requires pilots to obtain 80 hours of flight time annually in addition to flight time spent with the airline. Amend federal tax return 2012 Pilots usually can obtain these hours by flying with the Air Force Reserve or by flying part-time with another airline. Amend federal tax return 2012 Marilyn owns her own airplane. Amend federal tax return 2012 The use of her airplane to obtain the required flight hours is neither for the convenience of the employer nor required as a condition of employment. Amend federal tax return 2012 Example 5. Amend federal tax return 2012 David Rule is employed as an engineer with Zip, an engineering contracting firm. Amend federal tax return 2012 He occasionally takes work home at night rather than work late in the office. Amend federal tax return 2012 He owns and uses a home computer which is virtually identical to the office model. Amend federal tax return 2012 His use of the computer is neither for the convenience of his employer nor required as a condition of employment. Amend federal tax return 2012 What Is the Business-Use Requirement? You can claim the section 179 deduction and a special depreciation allowance for listed property and depreciate listed property using GDS and a declining balance method if the property meets the business-use requirement. Amend federal tax return 2012 To meet this requirement, listed property must be used predominantly (more than 50% of its total use) for qualified business use. Amend federal tax return 2012 If this requirement is not met, the following rules apply. Amend federal tax return 2012 Property not used predominantly for qualified business use during the year it is placed in service does not qualify for the section 179 deduction. Amend federal tax return 2012 Property not used predominantly for qualified business use during the year it is placed in service does not qualify for a special depreciation allowance. Amend federal tax return 2012 Any depreciation deduction under MACRS for property not used predominantly for qualified business use during any year must be figured using the straight line method over the ADS recovery period. Amend federal tax return 2012 This rule applies each year of the recovery period. Amend federal tax return 2012 Excess depreciation on property previously used predominantly for qualified business use must be recaptured (included in income) in the first year in which it is no longer used predominantly for qualified business use. Amend federal tax return 2012 A lessee must add an inclusion amount to income in the first year in which the leased property is not used predominantly for qualified business use. Amend federal tax return 2012 Being required to use the straight line method for an item of listed property not used predominantly for qualified business use is not the same as electing the straight line method. Amend federal tax return 2012 It does not mean that you have to use the straight line method for other property in the same class as the item of listed property. Amend federal tax return 2012 Exception for leased property. Amend federal tax return 2012   The business-use requirement generally does not apply to any listed property leased or held for leasing by anyone regularly engaged in the business of leasing listed property. Amend federal tax return 2012   You are considered regularly engaged in the business of leasing listed property only if you enter into contracts for the leasing of listed property with some frequency over a continuous period of time. Amend federal tax return 2012 This determination is made on the basis of the facts and circumstances in each case and takes into account the nature of your business in its entirety. Amend federal tax return 2012 Occasional or incidental leasing activity is insufficient. Amend federal tax return 2012 For example, if you lease only one passenger automobile during a tax year, you are not regularly engaged in the business of leasing automobiles. Amend federal tax return 2012 An employer who allows an employee to use the employer's property for personal purposes and charges the employee for the use is not regularly engaged in the business of leasing the property used by the employee. Amend federal tax return 2012 How To Allocate Use To determine whether the business-use requirement is met, you must allocate the use of any item of listed property used for more than one purpose during the year among its various uses. Amend federal tax return 2012 For passenger automobiles and other means of transportation, allocate the property's use on the basis of mileage. Amend federal tax return 2012 You determine the percentage of qualified business use by dividing the number of miles you drove the vehicle for business purposes during the year by the total number of miles you drove the vehicle for all purposes (including business miles) during the year. Amend federal tax return 2012 For other listed property, allocate the property's use on the basis of the most appropriate unit of time the property is actually used (rather than merely being available for use). Amend federal tax return 2012 For example, you can determine the percentage of business use of a computer by dividing the number of hours you used the computer for business purposes during the year by the total number of hours you used the computer for all purposes (including business use) during the year. Amend federal tax return 2012 Entertainment use. Amend federal tax return 2012   Treat the use of listed property for entertainment, recreation, or amusement purposes as a business use only to the extent you can deduct expenses (other than interest and property tax expenses) due to its use as an ordinary and necessary business expense. Amend federal tax return 2012 Commuting use. Amend federal tax return 2012   The use of an automobile for commuting is not business use, regardless of whether work is performed during the trip. Amend federal tax return 2012 For example, a business telephone call made on a car telephone while commuting to work does not change the character of the trip from commuting to business. Amend federal tax return 2012 This is also true for a business meeting held in a car while commuting to work. Amend federal tax return 2012 Similarly, a business call made on an otherwise personal trip does not change the character of a trip from personal to business. Amend federal tax return 2012 The fact that an automobile is used to display material that advertises the owner's or user's trade or business does not convert an otherwise personal use into business use. Amend federal tax return 2012 Use of your automobile by another person. Amend federal tax return 2012   If someone else uses your automobile, do not treat that use as business use unless one of the following conditions applies. Amend federal tax return 2012 That use is directly connected with your business. Amend federal tax return 2012 You properly report the value of the use as income to the other person and withhold tax on the income where required. Amend federal tax return 2012 You are paid a fair market rent. Amend federal tax return 2012 Treat any payment to you for the use of the automobile as a rent payment for purposes of item (3). Amend federal tax return 2012 Employee deductions. Amend federal tax return 2012   If you are an employee, do not treat your use of listed property as business use unless it is for your employer's convenience and is required as a condition of your employment. Amend federal tax return 2012 See Can Employees Claim a Deduction , earlier. Amend federal tax return 2012 Qualified Business Use Qualified business use of listed property is any use of the property in your trade or business. Amend federal tax return 2012 However, it does not include the following uses. Amend federal tax return 2012 The leasing of property to any 5% owner or related person (to the extent the property is used by a 5% owner or person related to the owner or lessee of the property). Amend federal tax return 2012 The use of property as pay for the services of a 5% owner or related person. Amend federal tax return 2012 The use of property as pay for services of any person (other than a 5% owner or related person), unless the value of the use is included in that person's gross income and income tax is withheld on that amount where required. Amend federal tax return 2012 Property does not stop being used predominantly for qualified business use because of a transfer at death. Amend federal tax return 2012 Exception for leasing or compensatory use of aircraft. Amend federal tax return 2012   Treat the leasing of any aircraft by a 5% owner or related person, or the compensatory use of any aircraft, as a qualified business use if at least 25% of the total use of the aircraft during the year is for a qualified business use. Amend federal tax return 2012 5% owner. Amend federal tax return 2012   For a business entity that is not a corporation, a 5% owner is any person who owns more than 5% of the capital or profits interest in the business. Amend federal tax return 2012   For a corporation, a 5% owner is any person who owns, or is considered to own, either of the following. Amend federal tax return 2012 More than 5% of the outstanding stock of the corporation. Amend federal tax return 2012 Stock possessing more than 5% of the total combined voting power of all stock in the corporation. Amend federal tax return 2012 Related persons. Amend federal tax return 2012   For a description of related persons, see Related persons in the discussion on property owned or used in 1986 under What Method Can You Use To Depreciate Your Property in chapter 1 . Amend federal tax return 2012 For this purpose, however, treat as related persons only the relationships listed in items (1) through (10) of that discussion and substitute “50%” for “10%” each place it appears. Amend federal tax return 2012 Examples. Amend federal tax return 2012   The following examples illustrate whether the use of business property is qualified business use. Amend federal tax return 2012 Example 1. Amend federal tax return 2012 John Maple is the sole proprietor of a plumbing contracting business. Amend federal tax return 2012 John employs his brother, Richard, in the business. Amend federal tax return 2012 As part of Richard's pay, he is allowed to use one of the company automobiles for personal use. Amend federal tax return 2012 The company includes the value of the personal use of the automobile in Richard's gross income and properly withholds tax on it. Amend federal tax return 2012 The use of the automobile is pay for the performance of services by a related person, so it is not a qualified business use. Amend federal tax return 2012 Example 2. Amend federal tax return 2012 John, in Example 1, allows unrelated employees to use company automobiles for personal purposes. Amend federal tax return 2012 He does not include the value of the personal use of the company automobiles as part of their compensation and he does not withhold tax on the value of the use of the automobiles. Amend federal tax return 2012 This use of company automobiles by employees is not a qualified business use. Amend federal tax return 2012 Example 3. Amend federal tax return 2012 James Company Inc. Amend federal tax return 2012 owns several automobiles that its employees use for business purposes. Amend federal tax return 2012 The employees also are allowed to take the automobiles home at night. Amend federal tax return 2012 The fair market value of each employee's use of an automobile for any personal purpose, such as commuting to and from work, is reported as income to the employee and James Company withholds tax on it. Amend federal tax return 2012 This use of company automobiles by employees, even for personal purposes, is a qualified business use for the company. Amend federal tax return 2012 Investment Use The use of property to produce income in a nonbusiness activity (investment use) is not a qualified business use. Amend federal tax return 2012 However, you can treat the investment use as business use to figure the depreciation deduction for the property in a given year. Amend federal tax return 2012 Example 1. Amend federal tax return 2012 Sarah Bradley uses a home computer 50% of the time to manage her investments. Amend federal tax return 2012 She also uses the computer 40% of the time in her part-time consumer research business. Amend federal tax return 2012 Sarah's home computer is listed property because it is not used at a regular business establishment. Amend federal tax return 2012 She does not use the computer predominantly for qualified business use. Amend federal tax return 2012 Therefore, she cannot elect a section 179 deduction or claim a special depreciation allowance for the computer. Amend federal tax return 2012 She must depreciate it using the straight line method over the ADS recovery period. Amend federal tax return 2012 Her combined business/investment use for determining her depreciation deduction is 90%. Amend federal tax return 2012 Example 2. Amend federal tax return 2012 If Sarah uses her computer 30% of the time to manage her investments and 60% of the time in her consumer research business, it is used predominantly for qualified business use. Amend federal tax return 2012 She can elect a section 179 deduction and, if she does not deduct all the computer's cost, she can claim a special depreciation allowance and depreciate the computer using the 200% declining balance method over the GDS recovery period. Amend federal tax return 2012 Her combined business/investment use for determining her depreciation deduction is 90%. Amend federal tax return 2012 Recapture of Excess Depreciation If you used listed property more than 50% in a qualified business use in the year you placed it in service, you must recapture (include in income) excess depreciation in the first year you use it 50% or less. Amend federal tax return 2012 You also increase the adjusted basis of your property by the same amount. Amend federal tax return 2012 Excess depreciation is: The depreciation allowable for the property (including any section 179 deduction and special depreciation allowance claimed) for years before the first year you do not use the property predominantly for qualified business use, minus The depreciation that would have been allowable for those years if you had not used the property predominantly for qualified business use in the year you placed it in service. Amend federal tax return 2012 To determine the amount in (2) above, you must refigure the depreciation using the straight line method and the ADS recovery period. Amend federal tax return 2012 Example. Amend federal tax return 2012 In June 2009, Ellen Rye purchased and placed in service a pickup truck that cost $18,000. Amend federal tax return 2012 She used it only for qualified business use for 2009 through 2012. Amend federal tax return 2012 Ellen claimed a section 179 deduction of $10,000 based on the purchase of the truck. Amend federal tax return 2012 She began depreciating it using the 200% DB method over a 5-year GDS recovery period. Amend federal tax return 2012 The pickup truck's gross vehicle weight was over 6,000 pounds, so it was not subject to the passenger automobile limits discussed later under Do the Passenger Automobile Limits Apply. Amend federal tax return 2012 During 2013, she used the truck 50% for business and 50% for personal purposes. Amend federal tax return 2012 She includes $4,018 excess depreciation in her gross income for 2013. Amend federal tax return 2012 The excess depreciation is determined as follows. Amend federal tax return 2012 Total section 179 deduction ($10,000) and depreciation claimed ($6,618) for 2009 through 2012. Amend federal tax return 2012 (Depreciation is from Table A-1. Amend federal tax return 2012 ) $16,618 Minus: Depreciation allowable (Table A-8):     2009 – 10% of $18,000 $1,800   2010 – 20% of $18,000 3,600   2011 – 20% of $18,000 3,600   2012 – 20% of $18,000 3,600 12,600 Excess depreciation $4,018 If Ellen's use of the truck does not change to 50% for business and 50% for personal purposes until 2015, there will be no excess depreciation. Amend federal tax return 2012 The total depreciation allowable using Table A-8 through 2015 will be $18,000, which equals the total of the section 179 deduction and depreciation she will have claimed. Amend federal tax return 2012 Where to figure and report recapture. Amend federal tax return 2012   Use Form 4797, Part IV, to figure the recapture amount. Amend federal tax return 2012 Report the recapture amount as other income on the same form or schedule on which you took the depreciation deduction. Amend federal tax return 2012 For example, report the recapture amount as other income on Schedule C (Form 1040) if you took the depreciation deduction on Schedule C. Amend federal tax return 2012 If you took the depreciation deduction on Form 2106, report the recapture amount as other income on Form 1040, line 21. Amend federal tax return 2012 Lessee's Inclusion Amount If you use leased listed property other than a passenger automobile for business/investment use, you must include an amount in your income in the first year your qualified business-use percentage is 50% or less. Amend federal tax return 2012 Your qualified business-use percentage is the part of the property's total use that is qualified business use (defined earlier). Amend federal tax return 2012 For the inclusion amount rules for a leased passenger automobile, see Leasing a Car in chapter 4 of Publication 463. Amend federal tax return 2012 The inclusion amount is the sum of Amount A and Amount B, described next. Amend federal tax return 2012 However, see the special rules for the inclusion amount, later, if your lease begins in the last 9 months of your tax year or is for less than one year. Amend federal tax return 2012 Amount A. Amend federal tax return 2012   Amount A is: The fair market value of the property, multiplied by The business/investment use for the first tax year the qualified business-use percentage is 50% or less, multiplied by The applicable percentage from Table A-19 in Appendix A . Amend federal tax return 2012   The fair market value of the property is the value on the first day of the lease term. Amend federal tax return 2012 If the capitalized cost of an item of listed property is specified in the lease agreement, you must treat that amount as the fair market value. Amend federal tax return 2012 Amount B. Amend federal tax return 2012   Amount B is: The fair market value of the property, multiplied by The average of the business/investment use for all tax years the property was leased that precede the first tax year the qualified business-use percentage is 50% or less, multiplied by The applicable percentage from Table A–20 in Appendix A . Amend federal tax return 2012 Maximum inclusion amount. Amend federal tax return 2012   The inclusion amount cannot be more than the sum of the deductible amounts of rent for the tax year in which the lessee must include the amount in gross income. Amend federal tax return 2012 Inclusion amount worksheet. Amend federal tax return 2012   The following worksheet is provided to help you figure the inclusion amount for leased listed property. Amend federal tax return 2012 Inclusion Amount Worksheet for Leased Listed Property 1. Amend federal tax return 2012 Fair market value   2. Amend federal tax return 2012 Business/investment use for first year business use is 50% or less   3. Amend federal tax return 2012 Multiply line 1 by line 2. Amend federal tax return 2012   4. Amend federal tax return 2012 Rate (%) from Table A-19   5. Amend federal tax return 2012 Multiply line 3 by line 4. Amend federal tax return 2012 This is Amount A. Amend federal tax return 2012   6. Amend federal tax return 2012 Fair market value   7. Amend federal tax return 2012 Average business/investment use for years property leased before the first year business use is 50% or less . Amend federal tax return 2012 . Amend federal tax return 2012 . Amend federal tax return 2012 . Amend federal tax return 2012 . Amend federal tax return 2012 . Amend federal tax return 2012 . Amend federal tax return 2012 . Amend federal tax return 2012 . Amend federal tax return 2012 . Amend federal tax return 2012 . Amend federal tax return 2012 . Amend federal tax return 2012 . Amend federal tax return 2012   8. Amend federal tax return 2012 Multiply line 6 by line 7   9. Amend federal tax return 2012 Rate (%) from Table A-20   10. Amend federal tax return 2012 Multiply line 8 by line 9. Amend federal tax return 2012 This is Amount B. Amend federal tax return 2012   11. Amend federal tax return 2012 Add line 5 and line 10. Amend federal tax return 2012 This is your inclusion amount. Amend federal tax return 2012 Enter here and as other income on the form or schedule on which you originally took the deduction (for example, Schedule C or F (Form 1040), Form 1040, Form 1120, etc. Amend federal tax return 2012 )         Example. Amend federal tax return 2012 On February 1, 2011, Larry House, a calendar year taxpayer, leased and placed in service a computer with a fair market value of $3,000. Amend federal tax return 2012 The lease is for a period of 5 years. Amend federal tax return 2012 Larry does not use the computer at a regular business establishment, so it is listed property. Amend federal tax return 2012 His business use of the property (all of which is qualified business use) is 80% in 2011, 60% in 2012, and 40% in 2013. Amend federal tax return 2012 He must add an inclusion amount to gross income for 2013, the first tax year his qualified business-use percentage is 50% or less. Amend federal tax return 2012 The computer has a 5-year recovery period under both GDS and ADS. Amend federal tax return 2012 2013 is the third tax year of the lease, so the applicable percentage from Table A-19 is −19. Amend federal tax return 2012 8%. Amend federal tax return 2012 The applicable percentage from Table A-20 is 22. Amend federal tax return 2012 0%. Amend federal tax return 2012 Larry's deductible rent for the computer for 2013 is $800. Amend federal tax return 2012 Larry uses the Inclusion amount worksheet. Amend federal tax return 2012 to figure the amount he must include in income for 2013. Amend federal tax return 2012 His inclusion amount is $224, which is the sum of −$238 (Amount A) and $462 (Amount B). Amend federal tax return 2012 Inclusion Amount Worksheet for Leased Listed Property 1. Amend federal tax return 2012 Fair market value $3,000   2. Amend federal tax return 2012 Business/investment use for first year business use is 50% or less 40 % 3. Amend federal tax return 2012 Multiply line 1 by line 2. Amend federal tax return 2012 1,200   4. Amend federal tax return 2012 Rate (%) from Table A-19 −19. Amend federal tax return 2012 8 % 5. Amend federal tax return 2012 Multiply line 3 by line 4. Amend federal tax return 2012 This is Amount A. Amend federal tax return 2012 −238   6. Amend federal tax return 2012 Fair market value 3,000   7. Amend federal tax return 2012 Average business/investment use for years property leased before the first year business use is 50% or less 70 % 8. Amend federal tax return 2012 Multiply line 6 by line 7 2,100   9. Amend federal tax return 2012 Rate (%) from Table A-20 22. Amend federal tax return 2012 0 % 10. Amend federal tax return 2012 Multiply line 8 by line 9. Amend federal tax return 2012 This is Amount B. Amend federal tax return 2012 462   11. Amend federal tax return 2012 Add line 5 and line 10. Amend federal tax return 2012 This is your inclusion amount. Amend federal tax return 2012 Enter here and as other income on the form or schedule on which you originally took the deduction (for example, Schedule C or F (Form 1040), Form 1040, Form 1120, etc. Amend federal tax return 2012 ) $224           Lease beginning in the last 9 months of your tax year. Amend federal tax return 2012    The inclusion amount is subject to a special rule if all the following apply. Amend federal tax return 2012 The lease term begins within 9 months before the close of your tax year. Amend federal tax return 2012 You do not use the property predominantly (more than 50%) for qualified business use during that part of the tax year. Amend federal tax return 2012 The lease term continues into your next tax year. Amend federal tax return 2012 Under this special rule, add the inclusion amount to income in the next tax year. Amend federal tax return 2012 Figure the inclusion amount by taking into account the average of the business/investment use for both tax years (line 2 of the Inclusion Amount Worksheet for Leased Listed Property) and the applicable percentage for the tax year the lease term begins. Amend federal tax return 2012 Skip lines 6 through 9 of the worksheet and enter zero on line 10. Amend federal tax return 2012 Example 1. Amend federal tax return 2012 On August 1, 2012, Julie Rule, a calendar year taxpayer, leased and placed in service an item of listed property. Amend federal tax return 2012 The property is 5-year property with a fair market value of $10,000. Amend federal tax return 2012 Her property has a recovery period of 5 years under ADS. Amend federal tax return 2012 The lease is for 5 years. Amend federal tax return 2012 Her business use of the property was 50% in 2012 and 90% in 2013. Amend federal tax return 2012 She paid rent of $3,600 for 2012, of which $3,240 is deductible. Amend federal tax return 2012 She must include $147 in income in 2013. Amend federal tax return 2012 The $147 is the sum of Amount A and Amount B. Amend federal tax return 2012 Amount A is $147 ($10,000 × 70% × 2. Amend federal tax return 2012 1%), the product of the fair market value, the average business use for 2012 and 2013, and the applicable percentage for year one from Table A-19 . Amend federal tax return 2012 Amount B is zero. Amend federal tax return 2012 Lease for less than one year. Amend federal tax return 2012   A special rule for the inclusion amount applies if the lease term is less than one year and you do not use the property predominantly (more than 50%) for qualified business use. Amend federal tax return 2012 The amount included in income is the inclusion amount (figured as described in the preceding discussions) multiplied by a fraction. Amend federal tax return 2012 The numerator of the fraction is the number of days in the lease term and the denominator is 365 (or 366 for leap years). Amend federal tax return 2012   The lease term for listed property other than residential rental or nonresidential real property includes options to renew. Amend federal tax return 2012 If you have two or more successive leases that are part of the same transaction (or a series of related transactions) for the same or substantially similar property, treat them as one lease. Amend federal tax return 2012 Example 2. Amend federal tax return 2012 On October 1, 2012, John Joyce, a calendar year taxpayer, leased and placed in service an item of listed property that is 3-year property. Amend federal tax return 2012 This property had a fair market value of $15,000 and a recovery period of 5 years under ADS. Amend federal tax return 2012 The lease term was 6 months (ending on March 31, 2013), during which he used the property 45% in business. Amend federal tax return 2012 He must include $71 in income in 2013. Amend federal tax return 2012 The $71 is the sum of Amount A and Amount B. Amend federal tax return 2012 Amount A is $71 ($15,000 × 45% × 2. Amend federal tax return 2012 1% × 183/365), the product of the fair market value, the average business use for both years, and the applicable percentage for year one from Table A-19 , prorated for the length of the lease. Amend federal tax return 2012 Amount B is zero. Amend federal tax return 2012 Where to report inclusion amount. Amend federal tax return 2012   Report the inclusion amount figured as described in the preceding discussions as other income on the same form or schedule on which you took the deduction for your rental costs. Amend federal tax return 2012 For example, report the inclusion amount as other income on Schedule C (Form 1040) if you took the deduction on Schedule C. Amend federal tax return 2012 If you took the deduction for rental costs on Form 2106, report the inclusion amount as other income on Form 1040, line 21. Amend federal tax return 2012 Do the Passenger Automobile Limits Apply? The depreciation deduction, including the section 179 deduction and special depreciation allowance, you can claim for a passenger automobile (defined earlier) each year is limited. Amend federal tax return 2012 This section describes the maximum depreciation deduction amounts for 2013 and explains how to deduct, after the recovery period, the unrecovered basis of your property that results from applying the passenger automobile limit. Amend federal tax return 2012 Exception for leased cars. Amend federal tax return 2012   The passenger automobile limits generally do not apply to passenger automobiles leased or held for leasing by anyone regularly engaged in the business of leasing passenger automobiles. Amend federal tax return 2012 For information on when you are considered regularly engaged in the business of leasing listed property, including passenger automobiles, see Exception for leased property , earlier, under What Is the Business-Use Requirement . Amend federal tax return 2012 Maximum Depreciation Deduction The passenger automobile limits are the maximum depreciation amounts you can deduct for a passenger automobile. Amend federal tax return 2012 They are based on the date you placed the automobile in service. Amend federal tax return 2012 Passenger Automobiles The maximum deduction amounts for most passenger automobiles are shown in the following table. Amend federal tax return 2012 Maximum Depreciation Deduction for Passenger Automobiles Date       4th & Placed 1st 2nd 3rd Later In Service Year Year Year Years 2013 $11,1601 $5,100 $3,050 $1,875 2012 11,1601 5,100 3,050 1,875 2011 11,0602 4,900 2,950 1,775 2010 11,0602  4,900 2,950 1,775 2009 10,9603 4,800 2,850 1,775 2008 10,9603  4,800 2,850 1,775 2007 3,060 4,900 2,850 1,775 2006 2,960 4,800 2,850 1,775 2005 2,960 4,700 2,850 1,675 2004 10,6104 4,800 2,850 1,675 5/06/2003– 12/31/2003 10,7105 4,900 2,950 1,775 1/01/2003– 5/05/2003 7,6606 4,900 2,950 1,775 1If you elected not to claim any special depreciation allowance or the vehicle is not qualified property, the maximum deduction is $3,160. Amend federal tax return 2012 2If you elected not to claim any special depreciation allowance or the vehicle is not qualified property, the maximum deduction is $3,060. Amend federal tax return 2012 3If you elected not to claim any special depreciation allowance for the vehicle or the vehicle is not qualified property, the maximum deduction is $2,960. Amend federal tax return 2012 4If you elected not to claim any special depreciation allowance for the vehicle, the vehicle is not qualified property, or the vehicle is qualified Liberty Zone property, the maximum deduction is $2,960. Amend federal tax return 2012 5If you acquired the vehicle before 5/06/03, the maximum deduction is $7,660. Amend federal tax return 2012 If you elected not to claim any special depreciation allowance for the vehicle, the vehicle is not qualified property, or the vehicle is qualified Liberty Zone property, the maximum deduction is $3,060. Amend federal tax return 2012 6If you elected not to claim any special depreciation allowance for the vehicle, the vehicle is not qualified property, or the vehicle is qualified Liberty Zone property, the maximum deduction is $3,060. Amend federal tax return 2012 If your business/investment use of the automobile is less than 100%, you must reduce the maximum deduction amount by multiplying the maximum amount by the percentage of business/investment use determined on an annual basis during the tax year. Amend federal tax return 2012 If you have a short tax year, you must reduce the maximum deduction amount by multiplying the maximum amount by a fraction. Amend federal tax return 2012 The numerator of the fraction is the number of months and partial months in the short tax year and the denominator is 12. Amend federal tax return 2012 Example. Amend federal tax return 2012 On April 15, 2013, Virginia Hart bought and placed in service a new car for $14,500. Amend federal tax return 2012 She used the car only in her business. Amend federal tax return 2012 She files her tax return based on the calendar year. Amend federal tax return 2012 She does not elect a section 179 deduction and elected not to claim any special depreciation allowance for the car. Amend federal tax return 2012 Under MACRS, a car is 5-year property. Amend federal tax return 2012 Since she placed her car in service on April 15 and used it only for business, she uses the percentages in Table A-1 to figure her MACRS depreciation on the car. Amend federal tax return 2012 Virginia multiplies the $14,500 unadjusted basis of her car by 0. Amend federal tax return 2012 20 to get her MACRS depreciation of $2,900 for 2013. Amend federal tax return 2012 This $2,900 is below the maximum depreciation deduction of $3,160 for passenger automobiles placed in service in 2013. Amend federal tax return 2012 She can deduct the full $2,900. Amend federal tax return 2012 Electric Vehicles The maximum depreciation deductions for passenger automobiles that are produced to run primarily on electricity are higher than those for other automobiles. Amend federal tax return 2012 The maximum deduction amounts for electric vehicles placed in service after August 5, 1997, and before January 1, 2007, are shown in the following table. Amend federal tax return 2012 Owners of electric vehicles placed in service after December 31, 2006, should use the table of maximum deduction amounts later for electric vehicles classified as passenger automobiles or use the table of maximum deduction amounts for trucks and vans later, for electric vehicles classified as trucks and vans. Amend federal tax return 2012 Maximum Depreciation Deduction For Electric Vehicles Date       4th & Placed 1st 2nd 3rd Later In Service Year Year Year Years 2006 $8,980 $14,400 $8,650 $5,225 2005 8,880 14,200 8,450 5,125 2004 31,8301 14,300 8,550 5,125 5/06/2003– 12/31/2003 32,0302 14,600 8,750 5,225 1/01/2003– 5/05/2003 22,8803 14,600 8,750 5,225 1If you elected not to claim any special depreciation allowance for the vehicle or the vehicle is not qualified property, or the vehicle is qualified Liberty Zone property, the maximum deduction is $8,880. Amend federal tax return 2012 2If you acquired the vehicle before 5/06/03, the maximum deduction is $22,880. Amend federal tax return 2012 If you elected not to claim any special depreciation allowance for the vehicle, the vehicle is not qualified property, or the vehicle is qualified Liberty Zone property, the maximum deduction is $9,080. Amend federal tax return 2012 3 If you elected not to claim any special depreciation allowance for the vehicle, the vehicle is not qualified property, or the vehicle is qualified Liberty Zone property, the maximum deduction is $9,080. Amend federal tax return 2012 Trucks and Vans The maximum depreciation deductions for trucks and vans placed in service after 2002 are higher than those for other passenger automobiles. Amend federal tax return 2012 The maximum deduction amounts for trucks and vans are shown in the following table. Amend federal tax return 2012 Maximum Depreciation Deduction For Trucks and Vans Date       4th & Placed 1st 2nd 3rd Later In Service Year Year Year Years 2013 $11,3601 $5,400 $3,250 $1,975 2012 11,3601 5,300 3,150 1,875 2011 11,2602 5,200 3,150 1,875 2010 11,1603 5,100 3,050 1,875 2009 11,0604 4,900 2,950 1,775 2008 11,1605 5,100 3,050 1,875 2007 3,260 5,200 3,050 1,875 2006 3,260 5,200 3,150 1,875 2005 3,260 5,200 3,150 1,875 2004 10,9106 5,300 3,150 1,875 5/06/2003– 12/31/2003 11,0107 5,400 3,250 1,975 1/01/2003– 5/05/2003 7,9608 5,400 3,250 1,975 1 If you elected not to claim any special depreciation allowance or the vehicle is not qualified property, the maximum deduction is $3,360. Amend federal tax return 2012 2 If you elected not to claim any special depreciation allowance or the vehicle is not qualified property, the maximum deduction is $3,260. Amend federal tax return 2012 3 If you elected not to claim any special depreciation allowance or the vehicle is not qualified property, the maximum deduction is $3,160. Amend federal tax return 2012 4 If you elect not to claim any special depreciation allowance for the vehicle or the vehicle is not qualified property, the maximum deduction is $3,060. Amend federal tax return 2012 5If you elected not to claim any special depreciation allowance for the vehicle or the vehicle is not qualified property, the maximum deduction is $3,160. Amend federal tax return 2012 6If you elected not to claim any special depreciation allowance for the vehicle, the vehicle is not qualified property, or the vehicle is qualified Liberty Zone property, or the maximum deduction is $3,260. Amend federal tax return 2012 7 If you acquired the vehicle before 5/06/03, the maximum deduction is $7,960. Amend federal tax return 2012 If you elected not to claim any special depreciation allowance for the vehicle, the vehicle is not qualified property, or the vehicle is qualified Liberty Zone property, the maximum deduction is $3,360. Amend federal tax return 2012 8 If you elected not to claim any special depreciation allowance for the vehicle, the vehicle is not qualified property, or the vehicle is qualified Liberty Zone property, the maximum deduction is $3,360. Amend federal tax return 2012 Depreciation Worksheet for Passenger Automobiles You can use the following worksheet to figure your depreciation deduction using the percentage tables. Amend federal tax return 2012 Then use the information from this worksheet to prepare Form 4562. Amend federal tax return 2012 Depreciation Worksheet for Passenger Automobiles   Part I   1. Amend federal tax return 2012 MACRS system (GDS or ADS)     2. Amend federal tax return 2012 Property class     3. Amend federal tax return 2012 Date placed in service     4. Amend federal tax return 2012 Recovery period     5. Amend federal tax return 2012 Method and convention     6. Amend federal tax return 2012 Depreciation rate (from tables)     7. Amend federal tax return 2012 Maximum depreciation deduction for this year from the appropriate table       8. Amend federal tax return 2012 Business/investment-use percentage       9. Amend federal tax return 2012 Multiply line 7 by line 8. Amend federal tax return 2012 This is your adjusted maximum depreciation deduction       10. Amend federal tax return 2012 Section 179 deduction claimed this year (not more than line 9). Amend federal tax return 2012 Enter -0- if this is not the year you placed the car in service. Amend federal tax return 2012         Note. Amend federal tax return 2012  1) If line 10 is equal to line 9, stop here. Amend federal tax return 2012 Your combined section 179 and depreciation deduction (including your special depreciation allowance) is limited to the amount on line 9. Amend federal tax return 2012  2) If line 10 is less than line 9, complete Part II. Amend federal tax return 2012   Part II   11. Amend federal tax return 2012 Subtract line 10 from line 9. Amend federal tax return 2012 This is the limit on the amount you can deduct for depreciation (including any special depreciation allowance )       12. Amend federal tax return 2012 Cost or other basis (reduced by any alternative motor vehicle credit 1or credit for electric vehicles 2)       13. Amend federal tax return 2012 Multiply line 12 by line 8. Amend federal tax return 2012 This is your business/investment cost       14. Amend federal tax return 2012 Section 179 deduction claimed in the year you placed the car in service       15. Amend federal tax return 2012 Subtract line 14 from line 13. Amend federal tax return 2012 This is your tentative basis for depreciation       16. Amend federal tax return 2012 Multiply line 15 by . Amend federal tax return 2012 50 if the 50% special depreciation allowance applies. Amend federal tax return 2012 This is your special depreciation allowance. Amend federal tax return 2012 Enter -0- if this is not the year you placed the car in service, the car is not qualified property, or you elected not to claim a special depreciation allowance       Note 1) If line 16 is equal to line 11, stop here. Amend federal tax return 2012 Your depreciation deduction (including your special depreciation allowance) is limited to the amount on line 11. Amend federal tax return 2012  2) If line 16 is less than line 11, complete Part III. Amend federal tax return 2012   Part III   17. Amend federal tax return 2012 Subtract line 16 from 11. Amend federal tax return 2012 This is the limit on the amount you can deduct for MACRS depreciation       18. Amend federal tax return 2012 Subtract line 16 from line 15. Amend federal tax return 2012 This is your basis for depreciation. Amend federal tax return 2012       19. Amend federal tax return 2012 Multiply line 18 by line 6. Amend federal tax return 2012 This is your tentative MACRS depreciation deduction. Amend federal tax return 2012       20. Amend federal tax return 2012 Enter the lesser of line 17 or line 19. Amend federal tax return 2012 This is your MACRS depreciation deduction. Amend federal tax return 2012     1 When figuring the amount to enter on line 12, do not reduce your cost or other basis by any section 179 deduction you claimed for your car. Amend federal tax return 2012 2 Reduce the basis by the lesser of $4,000 or 10% of the cost of the vehicle even if the credit is less than that amount. Amend federal tax return 2012             Deductions After the Recovery Period If the depreciation deductions for your automobile are reduced under the passenger automobile limits, you will have unrecovered basis in your automobile at the end of the recovery period. Amend federal tax return 2012 If you continue to use the automobile for business, you can deduct that unrecovered basis after the recovery period ends. Amend federal tax return 2012 You can claim a depreciation deduction in each succeeding tax year until you recover your full basis in the car. Amend federal tax return 2012 The maximum amount you can deduct each year is determined by the date you placed the car in service and your business/investment-use percentage. Amend federal tax return 2012 See Maximum Depreciation Deduction , earlier. Amend federal tax return 2012 Unrecovered basis is the cost or other basis of the passenger automobile reduced by any clean-fuel vehicle deduction, electric vehicle credit, depreciation, and section 179 deductions that would have been allowable if you had used the car 100% for business and investment use and the passenger automobile limits had not applied. Amend federal tax return 2012 You cannot claim a depreciation deduction for listed property other than passenger automobiles after the recovery period ends. Amend federal tax return 2012 There is no unrecovered basis at the end of the recovery period because you are considered to have used this property 100% for business and investment purposes during all of the recovery period. Amend federal tax return 2012 Example. Amend federal tax return 2012 In May 2007, you bought and placed in service a car costing $31,500. Amend federal tax return 2012 The car was 5-year property under GDS (MACRS). Amend federal tax return 2012 You did not elect a section 179 deduction and elected not to claim any special depreciation allowance for the car. Amend federal tax return 2012 You used the car exclusively for business during the recovery period (2007 through 2012). Amend federal tax return 2012 You figured your depreciation as shown below. Amend federal tax return 2012 Year Percentage Amount Limit   Allowed 2007 20. Amend federal tax return 2012 0% $6,300 $2,960   $2,960 2008 32. Amend federal tax return 2012 0 10,080 4,800   4,800 2009 19. Amend federal tax return 2012 2 6,048 2,850   2,850 2010 11. Amend federal tax return 2012 52 3,629 1,675   1,675 2011 11. Amend federal tax return 2012 52 3,629 1,675   1,675 2012 5. Amend federal tax return 2012 76 1,814 1,675   1,675 Total   $15,635 At the end of 2012, you had an unrecovered basis of $15,865 ($31,500 − $15,635). Amend federal tax return 2012 If in 2013 and later years you continue to use the car 100% for business, you can deduct each year the lesser of $1,675 or your remaining unrecovered basis. Amend federal tax return 2012 If your business use of the car had been less than 100% during any year, your depreciation deduction would have been less than the maximum amount allowable for that year. Amend federal tax return 2012 However, in figuring your unrecovered basis in the car, you would still reduce your basis by the maximum amount allowable as if the business use had been 100%. Amend federal tax return 2012 For example, if you had used your car 60% for business instead of 100%, your allowable depreciation deductions would have been $9,519 ($15,865 × 60%), but you still would have to reduce your basis by $15,865 to determine your unrecovered basis. Amend federal tax return 2012 Deductions For Passenger Automobiles Acquired in a Trade-in If you acquire a passenger automobile in a trade-in, depreciate the carryover basis separately as if the trade-in did not occur. Amend federal tax return 2012 Depreciate the part of the new automobile's basis that exceeds its carryover basis (excess basis) as if it were newly placed in service property. Amend federal tax return 2012 This excess basis is the additional cash paid for the new automobile in the trade-in. Amend federal tax return 2012 The depreciation figured for the two components of the basis (carryover basis and excess basis) is subject to a single passenger automobile limit. Amend federal tax return 2012 Special rules apply in determining the passenger automobile limits. Amend federal tax return 2012 These rules and examples are discussed in section 1. Amend federal tax return 2012 168(i)-6(d)(3) of the regulations. Amend federal tax return 2012 Instead of figuring depreciation for the carryover basis and the excess basis separately, you can elect to treat the old automobile as disposed of and both of the basis components for the new automobile as if placed in service at the time of the trade-in. Amend federal tax return 2012 For more information, including how to make this election, see Election out under Property Acquired in a Like-kind Exchange or Involuntary Conversion in chapter 4 and sections 1. Amend federal tax return 2012 168(i)-6(i) and 1. Amend federal tax return 2012 168(i)-6(j) of the regulations. Amend federal tax return 2012 What Records Must Be Kept? You cannot take any depreciation or section 179 deduction for the use of listed property unless you can prove your business/investment use with adequate records or with sufficient evidence to support your own statements. Amend federal tax return 2012 For listed property, you must keep records for as long as any recapture can still occur. Amend federal tax return 2012 Recapture can occur in any tax year of the recovery period. Amend federal tax return 2012 Adequate Records To meet the adequate records requirement, you must maintain an account book, diary, log, statement of expense, trip sheet, or similar record or other documentary evidence that, together with the receipt, is sufficient to establish each element of an expenditure or use. Amend federal tax return 2012 You do not have to record information in an account book, diary, or similar record if the information is already shown on the receipt. Amend federal tax return 2012 However, your records should back up your receipts in an orderly manner. Amend federal tax return 2012 Elements of expenditure or use. Amend federal tax return 2012   Your records or other documentary evidence must support all the following. Amend federal tax return 2012 The amount of each separate expenditure, such as the cost of acquiring the item, maintenance and repair costs, capital improvement costs, lease payments, and any other expenses. Amend federal tax return 2012 The amount of each business and investment use (based on an appropriate measure, such as mileage for vehicles and time for other listed property), and the total use of the property for the tax year. Amend federal tax return 2012 The date of the expenditure or use. Amend federal tax return 2012 The business or investment purpose for the expenditure or use. Amend federal tax return 2012   Written documents of your expenditure or use are generally better evidence than oral statements alone. Amend federal tax return 2012 You do not have to keep a daily log. Amend federal tax return 2012 However, some type of record containing the elements of an expenditure or the business or investment use of listed property made at or near the time of the expenditure or use and backed up by other documents is preferable to a statement you prepare later. Amend federal tax return 2012 Timeliness. Amend federal tax return 2012   You must record the elements of an expenditure or use at the time you have full knowledge of the elements. Amend federal tax return 2012 An expense account statement made from an account book, diary, or similar record prepared or maintained at or near the time of the expenditure or use generally is considered a timely record if, in the regular course of business: The statement is given by an employee to the employer, or The statement is given by an independent contractor to the client or customer. Amend federal tax return 2012   For example, a log maintained on a weekly basis, that accounts for use during the week, will be considered a record made at or near the time of use. Amend federal tax return 2012 Business purpose supported. Amend federal tax return 2012   Generally, an adequate record of business purpose must be in the form of a written statement. Amend federal tax return 2012 However, the amount of detail necessary to establish a business purpose depends on the facts and circumstances of each case. Amend federal tax return 2012 A written explanation of the business purpose will not be required if the purpose can be determined from the surrounding facts and circumstances. Amend federal tax return 2012 For example, a salesperson visiting customers on an established sales route will not normally need a written explanation of the business purpose of his or her travel. Amend federal tax return 2012 Business use supported. Amend federal tax return 2012   An adequate record contains enough information on each element of every business or investment use. Amend federal tax return 2012 The amount of detail required to support the use depends on the facts and circumstances. Amend federal tax return 2012 For example, a taxpayer who uses a truck for both business and personal purposes and whose only business use of the truck is to make customer deliveries on an established route can satisfy the requirement by recording the length of the route, including the total number of miles driven during the tax year and the date of each trip at or near the time of the trips. Amend federal tax return 2012   Although you generally must prepare an adequate written record, you can prepare a record of the business use of listed property in a computer memory device that uses a logging program. Amend federal tax return 2012 Separate or combined expenditures or uses. Amend federal tax return 2012   Each use by you normally is considered a separate use. Amend federal tax return 2012 However, you can combine repeated uses as a single item. Amend federal tax return 2012   Record each expenditure as a separate item. Amend federal tax return 2012 Do not combine it with other expenditures. Amend federal tax return 2012 If you choose, however, you can combine amounts you spent for the use of listed property during a tax year, such as for gasoline or automobile repairs. Amend federal tax return 2012 If you combine these expenses, you do not need to support the business purpose of each expense. Amend federal tax return 2012 Instead, you can divide the expenses based on the total business use of the listed property. Amend federal tax return 2012   You can account for uses that can be considered part of a single use, such as a round trip or uninterrupted business use, by a single record. Amend federal tax return 2012 For example, you can account for the use of a truck to make deliveries at several locations that begin and end at the business premises and can include a stop at the business in between deliveries by a single record of miles driven. Amend federal tax return 2012 You can account for the use of a passenger automobile by a salesperson for a business trip away from home over a period of time by a single record of miles traveled. Amend federal tax return 2012 Minimal personal use (such as a stop for lunch between two business stops) is not an interruption of business use. Amend federal tax return 2012 Confidential information. Amend federal tax return 2012   If any of the information on the elements of an expenditure or use is confidential, you do not need to include it in the account book or similar record if you record it at or near the time of the expenditure or use. Amend federal tax return 2012 You must keep it elsewhere and make it available as support to the IRS director for your area on request. Amend federal tax return 2012 Substantial compliance. Amend federal tax return 2012   If you have not fully supported a particular element of an expenditure or use, but have complied with the adequate records requirement for the expenditure or use to the satisfaction of the IRS director for your area, you can establish this element by any evidence the IRS director for your area deems adequate. Amend federal tax return 2012   If you fail to establish to the satisfaction of the IRS director for your area that you have substantially complied with the adequate records requirement for an element of an expenditure or use, you must establish the element as follows. Amend federal tax return 2012 By your own oral or written statement containing detailed information as to the element. Amend federal tax return 2012 By other evidence sufficient to establish the element. Amend federal tax return 2012   If the element is the cost or amount, time, place, or date of an expenditure or use, its supporting evidence must be direct evidence, such as oral testimony by witnesses or a written statement setting forth detailed information about the element or the documentary evidence. Amend federal tax return 2012 If the element is the business purpose of an expenditure, its supporting evidence can be circumstantial evidence. Amend federal tax return 2012 Sampling. Amend federal tax return 2012   You can maintain an adequate record for part of a tax year and use that record to support your business and investment use of listed property for the entire tax year if it can be shown by other evidence that the periods for which you maintain an adequate record are representative of the use throughout the year. Amend federal tax return 2012 Example 1. Amend federal tax return 2012 Denise Williams, a sole proprietor and calendar year taxpayer, operates an interior decorating business out of her home. Amend federal tax return 2012 She uses her automobile for local business visits to the homes or offices of clients, for meetings with suppliers and subcontractors, and to pick up and deliver items to clients. Amend federal tax return 2012 There is no other business use of the automobile, but she and family members also use it for personal purposes. Amend federal tax return 2012 She maintains adequate records for the first 3 months of the year showing that 75% of the automobile use was for business. Amend federal tax return 2012 Subcontractor invoices and paid bills show that her business continued at approximately the same rate for the rest of the year. Amend federal tax return 2012 If there is no change in circumstances, such as the purchase of a second car for exclusive use in her business, the determination that her combined business/investment use of the automobile for the tax year is 75% rests on sufficient supporting evidence. Amend federal tax return 2012 Example 2. Amend federal tax return 2012 Assume the same facts as in Example 1, except that Denise maintains adequate records during the first week of every month showing that 75% of her use of the automobile is for business. Amend federal tax return 2012 Her business invoices show that her business continued at the same rate during the later weeks of each month so that her weekly records are representative of the automobile's business use throughout the month. Amend federal tax return 2012 The determination that her business/investment use of the automobile for the tax year is 75% rests on sufficient supporting evidence. Amend federal tax return 2012 Example 3. Amend federal tax return 2012 Bill Baker, a sole proprietor and calendar year taxpayer, is a salesman in a large metropolitan area for a company that manufactures household products. Amend federal tax return 2012 For the first 3 weeks of each month, he occasionally uses his own automobile for business travel within the metropolitan area. Amend federal tax return 2012 During these weeks, his business use of the automobile does not follow a consistent pattern. Amend federal tax return 2012 During the fourth week of each month, he delivers all business orders taken during the previous month. Amend federal tax return 2012 The business use of his automobile, as supported by adequate records, is 70% of its total use during that fourth week. Amend federal tax return 2012 The determination based on the record maintained during the fourth week of the month that his business/investment use of the automobile for the tax year is 70% does not rest on sufficient supporting evidence because his use during that week is not representative of use during other periods. Amend federal tax return 2012 Loss of records. Amend federal tax return 2012   When you establish that failure to produce adequate records is due to loss of the records through circumstances beyond your control, such as through fire, flood, earthquake, or other casualty, you have the right to support a deduction by reasonable reconstruction of your expenditures and use. Amend federal tax return 2012 How Is Listed Property Information Reported? You must provide the information about your listed property requested in Part V of Form 4562, Section A, if you claim either of the following deductions. Amend federal tax return 2012 Any deduction for a vehicle. Amend federal tax return 2012 A depreciation deduction for any other listed property. Amend federal tax return 2012 If you claim any deduction for a vehicle, you also must provide the information requested in Section B. Amend federal tax return 2012 If you provide the vehicle for your employee's use, the employee must give you this information. Amend federal tax return 2012 If you provide any vehicle for use by an employee, you must first answer the questions in Section C to see if you meet an exception to completing Section B for that vehicle. Amend federal tax return 2012 Vehicles used by your employees. Amend federal tax return 2012   You do not have to complete Section B, Part V, for vehicles used by your employees who are not more-than-5% owners or related persons if you meet at least one of the following requirements. Amend federal tax return 2012 You maintain a written policy statement that prohibits one of the following uses of the vehicles. Amend federal tax return 2012 All personal use including commuting. Amend federal tax return 2012 Personal use, other than commuting, by employees who are not officers, directors, or 1%-or-more owners. Amend federal tax return 2012 You treat all use of the vehicles by your employees as personal use. Amend federal tax return 2012 You provide more than five vehicles for use by your employees, and you keep in your records the information on their use given to you by the employees. Amend federal tax return 2012 For demonstrator automobiles provided to full-time salespersons, you maintain a written policy statement that limits the total mileage outside the salesperson's normal working hours and prohibits use of the automobile by anyone else, for vacation trips, or to store personal possessions. Amend federal tax return 2012 Exceptions. Amend federal tax return 2012   If you file Form 2106, 2106-EZ, or Schedule C-EZ (Form 1040), and you are not required to file Form 4562, report information about listed property on that form and not on Form 4562. Amend federal tax return 2012 Also, if you file Schedule C (Form 1040) and are claiming the standard mileage rate or actual vehicle expenses (except depreciation) and you are not required to file Form 4562 for any other reason, report vehicle information in Part IV of Schedule C and not on Form 4562. Amend federal tax return 2012 Prev  Up  Next   Home   More Online Publications