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Amended Tax Return 2012

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Amended Tax Return 2012

Amended tax return 2012 Publication 4492 - Main Contents Table of Contents DefinitionsHurricane Katrina Disaster Area Katrina Covered Disaster Area Gulf Opportunity (GO) Zone (Core Disaster Area) Hurricane Rita Disaster Area (Rita Covered Disaster Area) Rita GO Zone Hurricane Wilma Disaster Area Wilma Covered Disaster Area Wilma GO Zone Extended Tax Deadlines Charitable Giving IncentivesTemporary Suspension of Limits on Charitable Contributions Standard Mileage Rate for Charitable Use of Vehicles Mileage Reimbursements to Charitable Volunteers Charitable Deduction for Contributions of Food Inventory Charitable Deduction for Contributions of Book Inventories to Public Schools Casualty and Theft LossesTime limit for making election. Amended tax return 2012 Replacement Period for Nonrecognition of Gain Net Operating Losses IRAs and Other Retirement PlansDefinitions Taxation of Qualified Hurricane Distributions Repayment of Qualified Hurricane Distributions Repayment of Qualified Distributions for the Purchase or Construction of a Main Home Loans From Qualified Plans Additional Tax Relief for IndividualsEarned Income Credit and Child Tax Credit Additional Exemption for Housing Individuals Displaced by Hurricane Katrina Education Credits Recapture of Federal Mortgage Subsidy Exclusion of Certain Cancellations of Indebtedness by Reason of Hurricane Katrina Tax Relief for Temporary Relocation Additional Tax Relief for BusinessesSpecial Depreciation Allowance Increased Section 179 Deduction Work Opportunity Credit Employee Retention Credit Hurricane Katrina Housing Credit Reforestation Costs Demolition and Clean-up Costs Increase in Rehabilitation Tax Credit Request for Copy or Transcript of Tax Return How To Get Tax Help Definitions The following definitions are used throughout this publication. Amended tax return 2012 Hurricane Katrina Disaster Area The Hurricane Katrina disaster area covers the area for which the President declared a major disaster before September 14, 2005, because of Hurricane Katrina. Amended tax return 2012 The Hurricane Katrina disaster area covers the entire states of Alabama, Florida, Louisiana, and Mississippi. Amended tax return 2012 Katrina Covered Disaster Area A portion of the Hurricane Katrina disaster area has been designated by the IRS as a covered disaster area. Amended tax return 2012 The Katrina covered disaster area covers the following areas in four states. Amended tax return 2012 Alabama. Amended tax return 2012   The counties of Baldwin, Bibb, Choctaw, Clarke, Colbert, Cullman, Greene, Hale, Jefferson, Lamar, Lauderdale, Marengo, Marion, Mobile, Monroe, Perry, Pickens, Sumter, Tuscaloosa, Washington, Wilcox, and Winston. Amended tax return 2012 Florida. Amended tax return 2012   The counties of Bay, Broward, Collier, Escambia, Franklin, Gulf, Miami-Dade, Monroe, Okaloosa, Santa Rosa, and Walton. Amended tax return 2012 Louisiana. Amended tax return 2012   All parishes. Amended tax return 2012 Mississippi. Amended tax return 2012   All counties. Amended tax return 2012 Gulf Opportunity (GO) Zone (Core Disaster Area) The GO Zone (also called the core disaster area) covers the portion of the Hurricane Katrina disaster area determined by the Federal Emergency Management Agency (FEMA) to be eligible for either individual only or both individual and public assistance from the Federal Government. Amended tax return 2012 The GO Zone covers the following areas in three states. Amended tax return 2012 Alabama. Amended tax return 2012   The counties of Baldwin, Choctaw, Clarke, Greene, Hale, Marengo, Mobile, Pickens, Sumter, Tuscaloosa, and Washington. Amended tax return 2012 Louisiana. Amended tax return 2012   The parishes of Acadia, Ascension, Assumption, Calcasieu, Cameron, East Baton Rouge, East Feliciana, Iberia, Iberville, Jefferson, Jefferson Davis, Lafayette, Lafourche, Livingston, Orleans, Plaquemines, Pointe Coupee, St. Amended tax return 2012 Bernard, St. Amended tax return 2012 Charles, St. Amended tax return 2012 Helena, St. Amended tax return 2012 James, St. Amended tax return 2012 John the Baptist, St. Amended tax return 2012 Martin, St. Amended tax return 2012 Mary, St. Amended tax return 2012 Tammany, Tangipahoa, Terrebonne, Vermilion, Washington, West Baton Rouge, and West Feliciana. Amended tax return 2012 Mississippi. Amended tax return 2012   The counties of Adams, Amite, Attala, Choctaw, Claiborne, Clarke, Copiah, Covington, Forrest, Franklin, George, Greene, Hancock, Harrison, Hinds, Holmes, Humphreys, Jackson, Jasper, Jefferson, Jefferson Davis, Jones, Kemper, Lamar, Lauderdale, Lawrence, Leake, Lincoln, Lowndes, Madison, Marion, Neshoba, Newton, Noxubee, Oktibbeha, Pearl River, Perry, Pike, Rankin, Scott, Simpson, Smith, Stone, Walthall, Warren, Wayne, Wilkinson, Winston, and Yazoo. Amended tax return 2012 Hurricane Rita Disaster Area (Rita Covered Disaster Area) The Hurricane Rita disaster area (also designated by the IRS as the Rita covered disaster area) covers the area for which the President declared a major disaster before October 6, 2005, because of Hurricane Rita. Amended tax return 2012 This area covers the entire states of Louisiana and Texas. Amended tax return 2012 Rita GO Zone The Rita GO Zone covers the portion of the Hurricane Rita disaster area determined by FEMA to be eligible for either individual only or both individual and public assistance from the Federal Government. Amended tax return 2012 The Rita GO Zone covers the following areas in two states. Amended tax return 2012 Louisiana. Amended tax return 2012   The parishes of Acadia, Allen, Ascension, Beauregard, Calcasieu, Cameron, Evangeline, Iberia, Jefferson, Jefferson Davis, Lafayette, Lafourche, Livingston, Plaquemines, Sabine, St. Amended tax return 2012 Landry, St. Amended tax return 2012 Martin, St. Amended tax return 2012 Mary, St. Amended tax return 2012 Tammany, Terrebonne, Vermilion, Vernon, and West Baton Rouge. Amended tax return 2012 Texas. Amended tax return 2012   The counties of Angelina, Brazoria, Chambers, Fort Bend, Galveston, Hardin, Harris, Jasper, Jefferson, Liberty, Montgomery, Nacogdoches, Newton, Orange, Polk, Sabine, San Augustine, San Jacinto, Shelby, Trinity, Tyler, and Walker. Amended tax return 2012 Hurricane Wilma Disaster Area The Hurricane Wilma disaster area covers the area for which the President declared a major disaster before November 14, 2005, because of Hurricane Wilma. Amended tax return 2012 The Hurricane Wilma disaster area covers the entire state of Florida. Amended tax return 2012 Wilma Covered Disaster Area A portion of the Hurricane Wilma disaster area has been designated by the IRS as a covered disaster area. Amended tax return 2012 The Wilma covered disaster area covers the following counties. Amended tax return 2012 Florida. Amended tax return 2012   Brevard, Broward, Charlotte, Collier, DeSoto, Glades, Hardee, Hendry, Highlands, Indian River, Lee, Martin, Miami-Dade, Monroe, Okeechobee, Osceola, Palm Beach, Polk, St. Amended tax return 2012 Lucie, and Sarasota. Amended tax return 2012 Wilma GO Zone The Wilma GO Zone covers the portion of the Hurricane Wilma disaster area determined by FEMA to be eligible for either individual only or both individual and public assistance from the Federal Government. Amended tax return 2012 The Wilma GO Zone covers the following counties. Amended tax return 2012 Florida. Amended tax return 2012   Brevard, Broward, Collier, Glades, Hendry, Indian River, Lee, Martin, Miami-Dade, Monroe, Okeechobee, Palm Beach, and St. Amended tax return 2012 Lucie. Amended tax return 2012 Extended Tax Deadlines The IRS has extended deadlines that apply to filing returns, paying taxes, and performing certain other time-sensitive acts for certain taxpayers affected by Hurricane Katrina, Rita, or Wilma, until February 28, 2006. Amended tax return 2012 The extension applies to deadlines (either an original or extended due date) that occur during the following periods. Amended tax return 2012 After August 28, 2005 (August 23, 2005, for Florida affected taxpayers), and before February 28, 2006, for taxpayers affected by Hurricane Katrina. Amended tax return 2012 After September 22, 2005, and before February 28, 2006, for taxpayers affected by Hurricane Rita. Amended tax return 2012 After October 22, 2005, and before February 28, 2006, for taxpayers affected by Hurricane Wilma. Amended tax return 2012 Affected taxpayer. Amended tax return 2012   The following taxpayers are eligible for the extension. Amended tax return 2012 Any individual whose main home is located in a covered disaster area. Amended tax return 2012 Any business entity or sole proprietor whose principal place of business is located in a covered disaster area. Amended tax return 2012 Any individual, business entity, or sole proprietor whose records needed to meet a postponed deadline are maintained or whose tax professional's office is in a covered disaster area. Amended tax return 2012 The main home or principal place of business does not have to be located in the covered area. Amended tax return 2012 Any individual visiting a county or parish in the Hurricane Katrina or Hurricane Rita covered disaster area that was injured or killed (and the estate of an individual killed) as a result of the hurricane or its aftermath. Amended tax return 2012 Any estate or trust whose tax records needed to meet a filing or payment deadline are maintained in a covered disaster area. Amended tax return 2012 Generally, any individual who is a worker assisting in the relief activities in a covered disaster area. Amended tax return 2012 However, a relief worker assisting in the Wilma covered disaster area is not an affected taxpayer unless the worker is affiliated with a recognized government or philanthropic organization assisting in the relief activities. Amended tax return 2012 The spouse of an affected taxpayer, solely with regard to a joint income tax return with that taxpayer. Amended tax return 2012   To ensure correct processing, affected taxpayers should write the assigned disaster designation (for example, “Hurricane Katrina”) in red ink at the top of any forms or documents filed with the IRS. Amended tax return 2012 Affected taxpayers can also identify themselves to the IRS or ask hurricane-related questions by calling the special IRS disaster hotline at 1-866-562-5227. Amended tax return 2012 Acts extended. Amended tax return 2012   Deadlines for performing the following acts are extended. Amended tax return 2012 Filing any return of income, estate, gift, generation-skipping transfer, excise, or employment tax. Amended tax return 2012 Paying any income, estate, gift, generation-skipping transfer, excise, or employment tax. Amended tax return 2012 This includes making estimated tax payments. Amended tax return 2012 Making certain contributions, distributions, recharacterizing contributions, or making a rollover to or from a qualified retirement plan. Amended tax return 2012 Filing certain petitions with the Tax Court. Amended tax return 2012 Filing a claim for credit or refund of any tax. Amended tax return 2012 Bringing suit upon a claim for credit or refund. Amended tax return 2012 Certain other acts described in Revenue Procedure 2005-27. Amended tax return 2012 You can find Revenue Procedure 2005-27 on page 1050 of Internal Revenue Bulletin 2005-20 at www. Amended tax return 2012 irs. Amended tax return 2012 gov/pub/irs-irbs/irb05-20. Amended tax return 2012 pdf. Amended tax return 2012 Forgiveness of interest and penalties. Amended tax return 2012   The IRS may forgive the interest and penalties on any underpaid income, estate, gift, employment, or excise tax for the length of any extension. Amended tax return 2012 Charitable Giving Incentives Temporary Suspension of Limits on Charitable Contributions Individuals. Amended tax return 2012   Qualified contributions are not subject to the overall limit on itemized deductions or the 50% adjusted gross income (AGI) limit. Amended tax return 2012 A qualified contribution is a charitable contribution paid in cash or by check after August 27, 2005, and before January 1, 2006, to a 50% limit organization (other than certain private foundations described in section 509(a)(3)) if you make an election to have the 50% limit not apply to these contributions. Amended tax return 2012   Your deduction for qualified contributions is limited to your AGI minus your deduction for all other charitable contributions. Amended tax return 2012 You can carry over any contributions you are not able to deduct for 2005 because of this limit. Amended tax return 2012 In 2006, treat the carryover of your unused qualified contributions as a carryover of contributions subject to the 50% limit. Amended tax return 2012 Exception. Amended tax return 2012   Qualified contributions do not include a contribution to a segregated fund or account for which you (or any person you appoint or designate) have or expect to have advisory privileges with respect to distributions or investments based on your contribution. Amended tax return 2012 Corporations. Amended tax return 2012   A corporation may elect to deduct qualified cash contributions without regard to the 10% taxable income limit if the contributions were made after August 27, 2005, and before January 1, 2006, to a qualified charitable organization (other than certain private foundations described in section 509(a)(3)), for Hurricane Katrina, Rita, or Wilma relief efforts. Amended tax return 2012 The corporation's deduction for these qualified contributions is limited to 100% of taxable income (as modified for the 10% limit) minus the corporation's deduction for all other charitable contributions. Amended tax return 2012 Any qualified contributions over this limit can be carried over to the next 5 years, subject to the 10% limit. Amended tax return 2012 Partners and shareholders. Amended tax return 2012   Each partner in a partnership and each shareholder in an S corporation makes a separate election to have the appropriate limit not apply. Amended tax return 2012 More information. Amended tax return 2012   For more information, see Publication 526 or Publication 542, Corporations. Amended tax return 2012 Publication 526 includes a worksheet you can use to figure your deduction if any limits apply to your charitable contributions. Amended tax return 2012 Standard Mileage Rate for Charitable Use of Vehicles The following are special standard mileage rates in effect in 2005 and 2006 for the cost of operating your automobile for providing charitable services solely related to Hurricane Katrina. Amended tax return 2012 29 cents per mile for the period August 25 through August 31, 2005. Amended tax return 2012 34 cents per mile for the period September 1 through December 31, 2005. Amended tax return 2012 32 cents per mile for the period January 1 through December 31, 2006. Amended tax return 2012 Mileage Reimbursements to Charitable Volunteers You can exclude from income amounts you receive as mileage reimbursements for the use of a private passenger automobile for the benefit of a qualified charitable organization in providing relief related to Hurricane Katrina during the period beginning on August 25, 2005, and ending on December 31, 2006. Amended tax return 2012 You cannot claim a deduction or credit for amounts you receive as a mileage reimbursement. Amended tax return 2012 You must keep records of miles driven, time, place (or use), and purpose of the mileage. Amended tax return 2012 The amount you can exclude from income cannot exceed the standard business mileage rate (shown below) for expenses incurred during the following periods. Amended tax return 2012 40. Amended tax return 2012 5 cents per mile for the period August 25 through August 31, 2005. Amended tax return 2012 48. Amended tax return 2012 5 cents per mile for the period September 1 through December 31, 2005. Amended tax return 2012 44. Amended tax return 2012 5 cents per mile for the period January 1 through December 31, 2006. Amended tax return 2012 Charitable Deduction for Contributions of Food Inventory Any taxpayer engaged in a trade or business is eligible to claim a deduction for a contribution of “apparently wholesome food” inventory to a qualified charitable organization described in section 501(c)(3) (except for private nonoperating foundations) after August 27, 2005, and before January 1, 2006. Amended tax return 2012 “Apparently wholesome food” is food that meets all quality and labeling standards imposed by federal, state, and local laws and regulations even though the food may not be readily marketable due to appearance, age, freshness, grade, size, surplus, or other conditions. Amended tax return 2012 The deduction is equal to the lesser of: The basis of the donated food plus one-half of the gain that would have been realized if the donated food had been sold at fair market value on the date of the donation, or Two times the basis of the donated food. Amended tax return 2012 The taxpayer must receive written certification from the donee stating: The donated food is related to the purpose or function of the donee's basis for exemption under section 501(c)(3) and is to be used solely for the care of the ill, the needy, or infants; and The food was not given in exchange for money, other property, or services. Amended tax return 2012 For a taxpayer other than a C corporation, the deduction is limited to 10% of the taxpayer's total net income from all trades or businesses from which the food contributions were made (figured without regard to the deduction for charitable contributions). Amended tax return 2012 For example, if a taxpayer is a sole proprietor, a shareholder in an S corporation, and a partner in a partnership, and each made a contribution of apparently wholesome food inventory, the taxpayer's deduction is limited to 10% of the taxpayer's total net income from the sole proprietorship, S corporation, and partnership (figured without regard to the deduction for charitable contributions). Amended tax return 2012 Charitable Deduction for Contributions of Book Inventories to Public Schools A corporation (other than an S corporation) may be allowed a charitable deduction for a qualified book contribution made after August 27, 2005, and before January 1, 2006, to a public school that: Provides elementary or secondary education (kindergarten through grade 12), and Normally maintains a regular faculty and curriculum and has a regular enrolled body of pupils or students in attendance at the place where its educational activities are regularly carried on. Amended tax return 2012 . Amended tax return 2012 The deduction is equal to the lesser of: The basis of the donated books plus one-half of the gain that would have been realized if the donated books had been sold at fair market value on the date of the donation, or Two times the basis of the donated books. Amended tax return 2012 The corporation must receive written certification from the school stating that the donated books are suitable for the organization's educational programs and will be used for such programs. Amended tax return 2012 Casualty and Theft Losses The following paragraphs explain changes to casualty and theft losses that were caused by Hurricane Katrina, Rita, or Wilma. Amended tax return 2012 For more information, see Publication 547. Amended tax return 2012 Limits on personal casualty or theft losses caused by Hurricane Katrina, Rita, or Wilma. Amended tax return 2012   The following losses to personal use property are not subject to the $100 or 10% of adjusted gross income limits. Amended tax return 2012 Losses that arose in the Hurricane Katrina disaster area after August 24, 2005, and that were caused by Hurricane Katrina. Amended tax return 2012 Losses that arose in the Hurricane Rita disaster area after September 22, 2005, and that were caused by Hurricane Rita. Amended tax return 2012 Losses that arose in the Hurricane Wilma disaster area after October 22, 2005, and that were caused by Hurricane Wilma. Amended tax return 2012 Qualifying losses include losses from flooding or other casualty, and from theft, that arose in the hurricane disaster area and that were caused by the hurricane. Amended tax return 2012 Special instructions for individuals who elect to claim a Hurricane Katrina, Rita, or Wilma casualty or theft loss for 2004. Amended tax return 2012   Casualty and theft losses are generally deductible only in the year the casualty occurred or theft was discovered. Amended tax return 2012 However, Hurricane Katrina, Rita, and Wilma are Presidentially declared disasters. Amended tax return 2012 Therefore, you can elect to deduct losses from these hurricanes on your tax return for the previous year. Amended tax return 2012 If you make this election, use the following additional instructions to complete your forms. Amended tax return 2012   Individuals filing or amending their 2004 tax return whose only casualty or theft losses to personal use property claimed on that return were caused by Hurricane Katrina, Rita, or Wilma should write “Hurricane Katrina,” “Hurricane Rita,” or “Hurricane Wilma” at the top of Form 1040 or 1040X. Amended tax return 2012 They must also complete and attach the 2004 Form 4684 and write “Hurricane Katrina,”“Hurricane Rita,” or “Hurricane Wilma” on the dotted line next to line 11 and enter -0- on lines 11 and 17. Amended tax return 2012   Individuals filing or amending their 2004 tax return who also have casualty or theft losses to personal use property not related to Hurricane Katrina, Rita, or Wilma should disregard the caution directing taxpayers to use only one Form 4684, located above line 13, and complete lines 13 through 18 on two Forms 4684. Amended tax return 2012 The Form 1040 or 1040X and the first Form 4684 should be prepared as explained above for Hurricane Katrina, Rita, or Wilma losses only. Amended tax return 2012 The second Form 4684 should be prepared in the normal manner for all gains and non-Hurricane Katrina, Rita or Wilma losses. Amended tax return 2012 If both Forms 4684 have a loss on line 18, they should carry the combined losses from that line to Schedule A (Form 1040), line 19. Amended tax return 2012 If there is a gain on line 15 of the second Form 4684, disregard the instruction to enter it on Schedule D (Form 1040), and instead enter on Schedule A (Form 1040), line 19, the excess of the loss from the first Form 4684 over the gain on line 15 of the second Form 4684. Amended tax return 2012 , Time limit for making election. Amended tax return 2012   You must make this election to claim your casualty or theft loss in 2004 by the later of the following dates. Amended tax return 2012 The due date (without extensions) for filing your 2005 income tax return. Amended tax return 2012 The due date (with extensions) for filing your 2004 income tax return. Amended tax return 2012 Example. Amended tax return 2012 If you are a calendar year individual taxpayer, you have until April 17, 2006, to amend your 2004 tax return to claim a casualty or theft loss that occurred during 2005. Amended tax return 2012 Replacement Period for Nonrecognition of Gain Generally, an involuntary conversion occurs when property is damaged, destroyed, stolen, seized, requisitioned, or condemned, and you receive other property or money in payment, such as insurance or a condemnation award. Amended tax return 2012 Generally, you do not have to report a gain (if any) if you replace the property within 2 years (4 years for a main home in a Presidentially declared disaster area). Amended tax return 2012 However, for property that was involuntarily converted after August 24, 2005, as a result of Hurricane Katrina, a 5-year replacement period applies if substantially all of the use of the replacement property is in the Hurricane Katrina disaster area. Amended tax return 2012 For more information, see the Instructions for Form 4684. Amended tax return 2012 Net Operating Losses Qualified GO Zone loss. Amended tax return 2012   Generally, you can carry a net operating loss (NOL) back to the 2 tax years before the NOL year. Amended tax return 2012 However, the portion of an NOL that is a qualified GO Zone loss can be carried back to the 5 tax years before the NOL year. Amended tax return 2012 In addition, the 90% limit on the alternative tax NOL deduction (ATNOLD) does not apply to such portion of the ATNOLD. Amended tax return 2012   A qualified GO Zone loss is the smaller of: The excess of the NOL for the year over the specified liability loss for the year to which a 10-year carryback applies, or The total of the following deductions (to the extent they are taken into account in computing the NOL for the tax year): Qualified GO Zone casualty loss (as defined below), Moving expenses paid or incurred after August 27, 2005, and before January 1, 2008, for the employment of an individual whose main home was in the GO Zone before August 28, 2005, who was unable to remain in that home because of Hurricane Katrina, and whose main job location (after the move) is in the GO Zone, Temporary housing expenses paid or incurred after August 27, 2005, and before January 1, 2008, to house employees of the taxpayer whose main job location is in the GO Zone, Depreciation or amortization allowable for any qualified GO Zone property (even if you elected not to claim the special GO Zone depreciation allowance for such property) for the year placed in service, and Repair expenses (including expenses for the removal of debris) paid or incurred after August 27, 2005, and before January 1, 2008, for any damage from Hurricane Katrina to property located in the GO Zone. Amended tax return 2012 Qualified GO Zone casualty loss. Amended tax return 2012   A qualified GO Zone casualty loss is any deductible section 1231 loss of property located in the GO Zone if the loss was caused by Hurricane Katrina. Amended tax return 2012 For this purpose, the amount of the loss is reduced by any recognized gain from an involuntary conversion caused by Hurricane Katrina of property located in the GO Zone. Amended tax return 2012 Any such loss taken into account in figuring your qualified GO Zone loss is not eligible for the election to be treated as having occurred in the previous tax year. Amended tax return 2012 5-year NOL carryback of certain timber losses. Amended tax return 2012   Generally, you can carry the portion of an NOL due to income and deductions attributable to a farming business back to the 5 tax years before the NOL year. Amended tax return 2012 You can treat income and deductions attributable to qualified timber property as attributable to a farming business if any portion of the property is located in the GO Zone, Rita GO Zone, or Wilma GO Zone, and the income and deductions are allocable to the part of your tax year which is after the applicable date below. Amended tax return 2012 August 27, 2005, if any portion of the property is located in the GO Zone. Amended tax return 2012 September 22, 2005, if any portion of the property is located in the Rita GO Zone (but not in the GO Zone). Amended tax return 2012 October 22, 2005, if any portion of the property is located in the Wilma GO Zone (but not in the GO Zone or the RITA GO Zone). Amended tax return 2012   These rules will not apply after 2006. Amended tax return 2012   However, these rules apply only to a timber producer who: Held qualified timber property (defined in Publication 535, Business Expenses) on the applicable date below: August 28, 2005, if any portion of the property is located in the GO Zone, September 23, 2005, if any portion of the property is located in the Rita GO Zone (but not in the GO Zone), or October 23, 2005, if any portion of the property is located in the Wilma GO Zone (but not in the GO Zone or the Rita GO Zone); Is not a corporation with stock publicly traded on an established securities market; Is not a real estate investment trust; and Did not hold more than 500 acres of qualified timber property on the applicable date above. Amended tax return 2012 More information. Amended tax return 2012   For more information on NOLs, see Publication 536 or Publication 542, Corporations. Amended tax return 2012 IRAs and Other Retirement Plans New rules provide for tax-favored withdrawals, repayments, and loans from certain retirement plans for taxpayers who suffered economic losses as a result of Hurricane Katrina, Rita, or Wilma. Amended tax return 2012 Definitions Qualified hurricane distribution. Amended tax return 2012   A qualified hurricane distribution is any distribution you received from an eligible retirement plan if all of the following apply. Amended tax return 2012 The distribution was made: After August 24, 2005, and before January 1, 2007, for Hurricane Katrina; After September 22, 2005, and before January 1, 2007, for Hurricane Rita; or After October 22, 2005, and before January 1, 2007, for Hurricane Wilma. Amended tax return 2012 Your main home was located in a hurricane disaster area listed below on the date shown for that area. Amended tax return 2012 August 28, 2005, for the Hurricane Katrina disaster area. Amended tax return 2012 September 23, 2005, for the Hurricane Rita disaster area. Amended tax return 2012 October 23, 2005, for the Hurricane Wilma disaster area. Amended tax return 2012 You sustained an economic loss because of Hurricane Katrina, Rita, or Wilma and your main home was in that hurricane disaster area on the date shown in (2) above for that hurricane. Amended tax return 2012 Examples of an economic loss include, but are not limited to: Loss, damage to, or destruction of real or personal property from fire, flooding, looting, vandalism, theft, wind, or other cause; Loss related to displacement from your home; or Loss of livelihood due to temporary or permanent layoffs. Amended tax return 2012   If (1) through (3) above apply, you can generally designate any distribution (including periodic payments and required minimum distributions) from an eligible retirement plan as a qualified hurricane distribution, regardless of whether the distribution was made on account of Hurricane Katrina, Rita, or Wilma. Amended tax return 2012 Qualified hurricane distributions are permitted without regard to your need or the actual amount of your economic loss. Amended tax return 2012   The total of your qualified hurricane distributions from all plans is limited to $100,000. Amended tax return 2012 If you have distributions in excess of $100,000 from more than one type of plan, such as a 401(k) plan and an IRA, you may allocate the $100,000 limit among the plans any way you choose. Amended tax return 2012   A reduction or offset (after August 24, 2005, for Katrina; after September 22, 2005, for Rita; or after October 22, 2005, for Wilma) of your account balance in an eligible retirement plan in order to repay a loan can also be designated as a qualified hurricane distribution. Amended tax return 2012 Eligible retirement plan. Amended tax return 2012   An eligible retirement plan can be any of the following. Amended tax return 2012 A qualified pension, profit-sharing, or stock bonus plan (including a 401(k) plan). Amended tax return 2012 A qualified annuity plan. Amended tax return 2012 A tax-sheltered annuity contract. Amended tax return 2012 A governmental section 457 deferred compensation plan. Amended tax return 2012 A traditional, SEP, SIMPLE, or Roth IRA. Amended tax return 2012 Main home. Amended tax return 2012   Generally, your main home is the home where you live most of the time. Amended tax return 2012 A temporary absence due to special circumstances, such as illness, education, business, military service, evacuation, or vacation, will not change your main home. Amended tax return 2012 Taxation of Qualified Hurricane Distributions Qualified hurricane distributions are included in income in equal amounts over three years. Amended tax return 2012 However, if you elect, you can include the entire distribution in your income in the year it was received. Amended tax return 2012 Qualified hurricane distributions are not subject to the additional 10% tax (or the additional 25% tax for certain distributions from SIMPLE IRAs) on early distributions from qualified retirement plans (including IRAs). Amended tax return 2012 However, any distributions you receive in excess of the $100,000 qualified hurricane distribution limit may be subject to the additional tax on early distributions. Amended tax return 2012 For more information, see Form 8915. Amended tax return 2012 Repayment of Qualified Hurricane Distributions If you choose, you generally can repay any portion of a qualified hurricane distribution that is eligible for tax-free rollover treatment to an eligible retirement plan. Amended tax return 2012 Also, you can repay a qualified hurricane distribution made on account of a hardship from a retirement plan. Amended tax return 2012 However, see Exceptions below for qualified hurricane distributions you cannot repay. Amended tax return 2012 You have three years from the day after the date you received the distribution to make a repayment. Amended tax return 2012 Amounts that are repaid are treated as a qualified rollover and are not included in income. Amended tax return 2012 Also, for purposes of the one-rollover-per-year limitation for IRAs, a repayment to an IRA is not considered a qualified rollover. Amended tax return 2012 See Form 8915 for more information on how to report repayments. Amended tax return 2012 Exceptions. Amended tax return 2012   You cannot repay the following types of distributions. Amended tax return 2012 Qualified hurricane distributions received as a beneficiary (other than a surviving spouse). Amended tax return 2012 Required minimum distributions. Amended tax return 2012 Periodic payments (other than from an IRA) that are for: A period of 10 years or more, Your life or life expectancy, or The joint lives or joint life expectancies of you and your beneficiary. Amended tax return 2012 Repayment of Qualified Distributions for the Purchase or Construction of a Main Home If you received a qualified distribution to purchase or construct a main home in the Hurricane Katrina, Rita, or Wilma disaster area, you can repay that distribution before March 1, 2006, to an eligible retirement plan after August 24, 2005 (Katrina); after September 22, 2005 (Rita); or after October 22, 2005 (Wilma). Amended tax return 2012 For this purpose, an eligible retirement plan is any plan, annuity, or IRA to which a qualified rollover can be made. Amended tax return 2012 To be a qualified distribution, the distribution must meet all of the following requirements. Amended tax return 2012 The distribution is a hardship distribution from a 401(k) plan, a hardship distribution from a tax-sheltered annuity contract, or a qualified first-time homebuyer distribution from an IRA. Amended tax return 2012 The distribution was received in 2005 after February 28 and before: August 29 for Hurricane Katrina; September 24 for Hurricane Rita; or October 24 for Hurricane Wilma. Amended tax return 2012 The distribution was to be used to purchase or construct a main home in the Hurricane Katrina, Rita, or Wilma disaster area that was not purchased or constructed because of Hurricane Katrina, Rita, or Wilma. Amended tax return 2012 Amounts that are repaid before March 1, 2006, are treated as a qualified rollover and are not included in income. Amended tax return 2012 Also, for purposes of the one-rollover-per-year limitation for IRAs, a repayment to an IRA is not considered a qualified rollover. Amended tax return 2012 A qualified distribution not repaid before March 1, 2006, may be taxable for 2005 and subject to the additional 10% tax (or the additional 25% tax for certain SIMPLE IRAs) on early distributions. Amended tax return 2012 You must file Form 8915 if you received a qualified distribution that you repaid, in whole or in part, before March 1, 2006. Amended tax return 2012 Loans From Qualified Plans The following benefits are available to qualified individuals. Amended tax return 2012 Increases to the limits for distributions treated as loans from employer plans. Amended tax return 2012 A 1-year suspension for payments due on plan loans. Amended tax return 2012 Qualified individual. Amended tax return 2012   You are a qualified individual if any of the following apply. Amended tax return 2012 Your main home on August 28, 2005, was located in the Hurricane Katrina disaster area and you had an economic loss because of Hurricane Katrina. Amended tax return 2012 Your main home on September 23, 2005, was located in the Hurricane Rita disaster area and you had an economic loss because of Hurricane Rita. Amended tax return 2012 Your main home on October 23, 2005, was located in the Hurricane Wilma disaster area and you had an economic loss because of Hurricane Wilma. Amended tax return 2012 Examples of an economic loss include, but are not limited to: Loss, damage to, or destruction of real or personal property from fire, flooding, looting, vandalism, theft, wind, or other cause; Loss related to displacement from your home; or Loss of livelihood due to temporary or permanent layoffs. Amended tax return 2012 Limits on plan loans. Amended tax return 2012   The $50,000 limit for distributions treated as plan loans is increased to $100,000. Amended tax return 2012 In addition, the limit based on 50% of your vested accrued benefit is increased to 100% of that benefit. Amended tax return 2012 The higher limits apply only to loans received during the following period. Amended tax return 2012 If your main home was located in the Hurricane Katrina disaster area, the period began on September 24, 2005, and ends on December 31, 2006. Amended tax return 2012 If your main home was located in the Hurricane Rita or Wilma disaster area, the period began on December 21, 2005, and ends on December 31, 2006. Amended tax return 2012 If you are a qualified individual based on Hurricane Katrina and another hurricane, use the period based on Hurricane Katrina. Amended tax return 2012 One-year suspension of loan payments. Amended tax return 2012   Payments on plan loans due before 2007 may be suspended for 1 year by the plan administrator. Amended tax return 2012 To qualify for the suspension, the due date for any loan payment must occur during the period beginning on: August 28, 2005, if your main home was located in the Hurricane Katrina disaster area. Amended tax return 2012 September 23, 2005, if your main home was located in the Hurricane Rita disaster area. Amended tax return 2012 October 23, 2005, if your main home was located in the Hurricane Wilma disaster area. Amended tax return 2012 If you are a qualified individual based on more than one hurricane, use the period with the earliest beginning date. Amended tax return 2012 Additional Tax Relief for Individuals Earned Income Credit and Child Tax Credit You can elect to use your 2004 earned income to figure your earned income credit (EIC) and additional child tax credit for 2005 if: Your 2005 earned income is less than your 2004 earned income, and At least one of the following statements is true. Amended tax return 2012 Your main home on August 25, 2005, was in the Gulf Opportunity (GO) Zone. Amended tax return 2012 Your main home on August 25, 2005, was in the Hurricane Katrina disaster area and you were displaced from that home because of Hurricane Katrina. Amended tax return 2012 Your main home on September 23, 2005, was in the Rita GO Zone. Amended tax return 2012 Your main home on September 23, 2005, was in the Hurricane Rita disaster area and you were displaced from that home because of Hurricane Rita. Amended tax return 2012 Your main home on October 23, 2005, was in the Wilma GO Zone. Amended tax return 2012 Your main home on October 23, 2005, was in the Hurricane Wilma disaster area and you were displaced from that home because of Hurricane Wilma. Amended tax return 2012 Earned income. Amended tax return 2012    For the purpose of this election, your earned income for both the EIC and the additional child tax credit is the amount of earned income used to figure your EIC, even if you did not take the EIC and even if that amount is different than your earned income for the additional child tax credit. Amended tax return 2012 If you are claiming only the additional child tax credit, you must figure the amount of your earned income for EIC purposes to determine your eligibility to make the election and the amount of the credit. Amended tax return 2012 Joint returns. Amended tax return 2012   If you file a joint return, you qualify to make this election even if only one spouse meets the requirements. Amended tax return 2012 If you make the election, your 2004 earned income is the sum of your 2004 earned income and your spouse's 2004 earned income. Amended tax return 2012 Making the election. Amended tax return 2012   If you make the election to use your 2004 earned income, the election applies for figuring both the EIC and the additional child tax credit. Amended tax return 2012 However, you can make the election for the additional child tax credit even if you do not take the EIC. Amended tax return 2012   Electing to use your 2004 earned income may increase or decrease your EIC. Amended tax return 2012 Take the following steps to decide whether to make the election. Amended tax return 2012 Figure your 2005 EIC using your 2004 earned income. Amended tax return 2012 Figure your 2005 additional child tax credit using your 2004 earned income for EIC purposes. Amended tax return 2012 Add the results of (1) and (2). Amended tax return 2012 Figure your 2005 EIC using your 2005 earned income. Amended tax return 2012 Figure your 2005 additional child tax credit using your 2005 earned income for additional child tax credit purposes. Amended tax return 2012 Add the results of (4) and (5). Amended tax return 2012 Compare the results of (3) and (6). Amended tax return 2012 If (3) is larger than (6), it is to your benefit to make the election. Amended tax return 2012 If (3) is equal to or smaller than (6), making the election will not help you. Amended tax return 2012   If you elect to use your 2004 earned income and you are claiming the EIC, enter “PYEI” and the amount of your 2004 earned income on the dotted line next to line 66a of Form 1040, on the line next to line 41a of Form 1040A, or in the space to the left of line 8a of Form 1040EZ. Amended tax return 2012   If you elect to use your 2004 earned income and you are claiming the additional child tax credit, enter your 2004 earned income for EIC purposes (even if you did not claim the EIC) on Form 8812, Additional Child Tax Credit, line 4a, and check the box on that line. Amended tax return 2012   Because Form 8812 was released before the GO Zone legislation was enacted, the instructions refer only to individuals whose main home was in the Hurricane Katrina disaster area. Amended tax return 2012 When completing Form 8812, line 4a, use the above rules to determine your eligibility to make the election (instead of the Form 8812 instructions). Amended tax return 2012 Getting your 2004 tax return information. Amended tax return 2012   If you do not have your 2004 tax records, you can get the amount of earned income used to figure your 2004 EIC by calling 1-866-562-5227. Amended tax return 2012 You can also get this information by visiting the IRS website at www. Amended tax return 2012 irs. Amended tax return 2012 gov. Amended tax return 2012   If you prefer to figure your 2004 earned income yourself, copies or transcripts of your filed and processed tax returns can help you reconstruct your tax records. Amended tax return 2012 See Request for Copy or Transcript of Tax Return on page 16. Amended tax return 2012 Additional Exemption for Housing Individuals Displaced by Hurricane Katrina You may be able to claim an additional exemption amount of $500 for providing housing in your main home for each individual displaced by Hurricane Katrina. Amended tax return 2012 The additional exemption amount is claimed on new Form 8914. Amended tax return 2012 The additional exemption amount is allowable once per taxpayer for a specific individual in 2005 or 2006, but not in both years. Amended tax return 2012 The maximum additional exemption amount you can claim for all displaced individuals is $2,000 ($1,000 if married filing separately). Amended tax return 2012 The additional exemption amount you claim for displaced individuals in 2005 will reduce the $2,000 maximum for 2006. Amended tax return 2012 If two or more taxpayers share the same main home, only one taxpayer in that main home can claim the additional exemption amount for a specific displaced individual. Amended tax return 2012 If married filing separately, only one spouse may claim the additional exemption amount for a specific displaced individual. Amended tax return 2012 In order for you to be considered to have provided housing, you must have a legal interest in the main home (that is, own or rent the home). Amended tax return 2012 To qualify as a displaced individual, the individual: Must have had his or her main home in the Hurricane Katrina disaster area on August 28, 2005, and he or she must have been displaced from that home. Amended tax return 2012 If the individual's main home was located outside the core disaster area, that home must have been damaged by Hurricane Katrina or the individual must have been evacuated from that home because of Hurricane Katrina, Must have been provided housing in your main home for a period of at least 60 consecutive days ending in the tax year in which the exemption is claimed, and Cannot be your spouse or dependent. Amended tax return 2012 You cannot claim the additional exemption amount if you received rent (or any other amount) from any source for providing the housing. Amended tax return 2012 You are permitted to receive payments or reimbursements that do not relate to normal housing costs, including the following. Amended tax return 2012 Food, clothing, or personal items consumed or used by the displaced individual. Amended tax return 2012 Reimbursement for the cost of any long distance telephone calls made by the displaced individual. Amended tax return 2012 Reimbursement for the cost of gasoline for the displaced individual's use of your vehicle. Amended tax return 2012 However, you cannot claim the additional exemption amount if you received any reimbursement for the extra costs of heat, electricity, or water used by the displaced individual. Amended tax return 2012 Also, you must report on Form 8914 the displaced individual's social security number or individual taxpayer identification number to claim an additional exemption amount. Amended tax return 2012 For more information, see Form 8914. Amended tax return 2012 Education Credits The education credits have been expanded for students attending an eligible educational institution located in the Gulf Opportunity Zone (GOZ students) for any tax year beginning in 2005 or 2006. Amended tax return 2012 The Hope credit for a GOZ student is increased to 100% of the first $2,000 in qualified education expenses and 50% of the next $2,000 of qualified education expenses for a maximum credit of $3,000 per student. Amended tax return 2012 The lifetime learning credit rate for a GOZ student is increased from 20% to 40%. Amended tax return 2012 The definition of qualified education expenses for a GOZ student also has been expanded. Amended tax return 2012 In addition to tuition and fees required for the student's enrollment or attendance at an eligible educational institution, qualified education expenses for a GOZ student include the following. Amended tax return 2012 Books, supplies, and equipment required for enrollment or attendance at an eligible educational institution. Amended tax return 2012 For a special needs student, expenses that are necessary for that person's enrollment or attendance at an eligible educational institution. Amended tax return 2012 For a student who is at least a half-time student, the reasonable costs of room and board, but only to the extent that the costs are not more than the greater of the following two amounts. Amended tax return 2012 The allowance for room and board, as determined by the eligible educational institution, that was included in the cost of attendance (for federal financial aid purposes) for a particular academic period and living arrangement of the student. Amended tax return 2012 The actual amount charged if the student is residing in housing owned or operated by the eligible educational institution. Amended tax return 2012 You will need to contact the eligible educational institution for qualified room and board costs. Amended tax return 2012 For more information, see Form 8863. Amended tax return 2012 Recapture of Federal Mortgage Subsidy Generally, if you financed your home under a federally subsidized program (loans from tax-exempt qualified mortgage bonds or loans with mortgage credit certificates), you may have to recapture all or part of the benefit you received from that program when you sell or otherwise dispose of your home. Amended tax return 2012 However, you do not have to recapture any benefit if your mortgage loan was a qualified home improvement loan of not more than $15,000. Amended tax return 2012 This amount is increased to $150,000 if the loan was provided before 2011 and was used to: Repair damage caused by Hurricane Katrina to a residence in the Hurricane Katrina disaster area, or Alter, repair, or improve an existing owner-occupied residence in the GO Zone, Rita GO Zone, or Wilma GO Zone. Amended tax return 2012 Exclusion of Certain Cancellations of Indebtedness by Reason of Hurricane Katrina Generally, discharges of nonbusiness debts (such as mortgages) made after August 24, 2005, and before January 1, 2007, are excluded from income for individuals whose main home was in the Hurricane Katrina disaster area on August 25, 2005. Amended tax return 2012 If the individual's main home was located outside the core disaster area, the individual also must have had an economic loss because of Hurricane Katrina. Amended tax return 2012 Examples of an economic loss include, but are not limited to: Loss, damage to, or destruction of real or personal property from fire, flooding, looting, vandalism, theft, wind, or other cause; Loss related to displacement from your home; or Loss of livelihood due to temporary or permanent layoffs. Amended tax return 2012 This relief does not apply to any debt secured by real property located outside the Hurricane Katrina disaster area. Amended tax return 2012 You may also have to reduce certain tax attributes by the amount excluded. Amended tax return 2012 For more information, see Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment). Amended tax return 2012 Tax Relief for Temporary Relocation Under the Gulf Opportunity Zone Act of 2005, the IRS may adjust the internal revenue laws to ensure that taxpayers do not lose a deduction or credit or experience a change of filing status in 2005 or 2006 as a result of a temporary relocation caused by Hurricane Katrina, Rita, or Wilma. Amended tax return 2012 However, any such adjustment must ensure that an individual is not taken into account by more than one taxpayer for the same tax benefit. Amended tax return 2012 The IRS has exercised this authority as follows. Amended tax return 2012 In determining whether you furnished over one-half of the cost of maintaining a household, you can exclude from total household costs any assistance received from the government or charitable organizations because you were temporarily relocated as a result of Hurricane Katrina, Rita, or Wilma. Amended tax return 2012 In determining whether you provided more than one-half of an individual's support, you can disregard any assistance received from the government or charitable organizations because you were temporarily relocated as a result of Hurricane Katrina, Rita, or Wilma. Amended tax return 2012 You can treat as a student an individual who enrolled in school before August 25, 2005, and who is unable to attend classes because of Hurricane Katrina, for each month of the enrollment period that individual is prevented by Hurricane Katrina from attending school as planned. Amended tax return 2012 You can treat as a student an individual who enrolled in school before September 23, 2005, and who is unable to attend classes because of Hurricane Rita, for each month of the enrollment period that individual is prevented by Hurricane Rita from attending school as planned. Amended tax return 2012 You can treat as a student an individual who enrolled in school before October 23, 2005, and who is unable to attend classes because of Hurricane Wilma, for each month of the enrollment period that individual is prevented by Hurricane Wilma from attending school as planned. Amended tax return 2012 Additional Tax Relief for Businesses Special Depreciation Allowance You can take a special depreciation allowance for qualified Gulf Opportunity (GO) Zone property (as defined below) you place in service after August 27, 2005. Amended tax return 2012 The allowance is an additional deduction of 50% of the property's depreciable basis (after any section 179 deduction and before figuring your regular depreciation deduction). Amended tax return 2012 The special allowance applies only for the first year the property is placed in service. Amended tax return 2012 The allowance is deductible for both the regular tax and the alternative minimum tax (AMT). Amended tax return 2012 There is no AMT adjustment required for any depreciation figured on the remaining basis of the property. Amended tax return 2012 You can elect not to deduct the special GO Zone depreciation allowance for qualified property. Amended tax return 2012 If you make this election for any property, it applies to all property in the same class placed in service during the year. Amended tax return 2012 Qualified GO Zone property. Amended tax return 2012   Property that qualifies for the special GO Zone depreciation allowance includes the following. Amended tax return 2012 Tangible property depreciated under the modified accelerated cost recovery system (MACRS) with a recovery period of 20 years or less. Amended tax return 2012 Water utility property. Amended tax return 2012 Computer software that is readily available for purchase by the general public, is subject to a nonexclusive license, and has not been substantially modified. Amended tax return 2012 (The cost of some computer software is treated as part of the cost of hardware and is depreciated under MACRS. Amended tax return 2012 ) Qualified leasehold improvement property. Amended tax return 2012 Nonresidential real property and residential rental property. Amended tax return 2012   For more information on this property, see Publication 946. Amended tax return 2012 Other tests to be met. Amended tax return 2012   To be qualified GO Zone property, the property must also meet all of the following tests. Amended tax return 2012 You must have acquired the property, by purchase, after August 27, 2005, but only if no binding written contract for the acquisition was in effect before August 28, 2005. Amended tax return 2012 The property must be placed in service before 2008 (2009 in the case of nonresidential real property and residential rental property). Amended tax return 2012 Substantially all of the use of the property must be in the GO Zone and in the active conduct of your trade or business in the GO Zone. Amended tax return 2012 The original use of the property in the GO Zone must begin with you after August 27, 2005. Amended tax return 2012 Used property can be qualified GO Zone property if it has not previously been used within the GO Zone. Amended tax return 2012 Also, additional capital expenditures you incurred after August 27, 2005, to recondition or rebuild your property meet the original use test if the original use of the property in the GO Zone began with you. Amended tax return 2012 Excepted property. Amended tax return 2012   Qualified GO Zone property does not include any of the following. Amended tax return 2012 Property required to be depreciated using the Alternative Depreciation System (ADS). Amended tax return 2012 Property any portion of which is financed with the proceeds of a tax-exempt obligation under section 103. Amended tax return 2012 Property for which you are claiming a commercial revitalization deduction. Amended tax return 2012 Any property used in connection with any private or commercial golf course, country club, massage parlor, hot tub facility, suntan facility, or any store, the principal business of which is the sale of alcoholic beverages for consumption off premises. Amended tax return 2012 Any gambling or animal racing property (as defined below). Amended tax return 2012 Property in the same class as that for which you elected not to claim the special GO Zone depreciation allowance. Amended tax return 2012   Gambling or animal racing property is: Any equipment, furniture, software, or other property used directly in connection with gambling, the racing of animals, or the on-site viewing of such racing, and The portion of any real property (determined by square footage) that is dedicated to gambling, the racing of animals, or the on-site viewing of such racing, unless this portion is less than 100 square feet. Amended tax return 2012 Recapture of special allowance. Amended tax return 2012   If, in any year after the year you claim the special allowance, the property ceases to be qualified GO Zone property, you may have to recapture as ordinary income any excess benefit you received from claiming the special allowance. Amended tax return 2012 Increased Section 179 Deduction An increased section 179 deduction is allowable for qualified section 179 Gulf Opportunity (GO) Zone property (as defined later) placed in service in the GO Zone. Amended tax return 2012 Increased dollar limit. Amended tax return 2012   The limit on the section 179 deduction ($105,000 for 2005, $108,000 for 2006) for qualified section 179 GO Zone property acquired after August 27, 2005, is increased by the smaller of: $100,000, or The cost of qualified section 179 GO Zone property placed in service during the year (including such property placed in service by your spouse, even if you are filing a separate return). Amended tax return 2012   The amount for which you can make the election is reduced if the cost of all qualified section 179 GO Zone property you placed in service during the year exceeds $420,000 for 2005 ($430,000 for 2006) increased by the smaller of: $600,000, or The cost of qualified section 179 GO Zone property placed in service during the year. Amended tax return 2012 Qualified section 179 GO Zone property. Amended tax return 2012   Qualified section 179 GO Zone property is section 179 property that is qualified GO Zone property (explained earlier under Special Depreciation Allowance). Amended tax return 2012 Section 179 property does not include nonresidential real property or residential rental property. Amended tax return 2012 For more information, including the requirements that must be met for property to qualify for the section 179 deduction, see chapter 2 of Publication 946. Amended tax return 2012 Work Opportunity Credit For the work opportunity credit, the definition of “targeted group employee” has been expanded to include a Hurricane Katrina employee. Amended tax return 2012 Hurricane Katrina employee. Amended tax return 2012   A Hurricane Katrina employee is: A person who, on August 28, 2005, had a main home in the core disaster area and, within a two-year period beginning on that date, is hired to perform services principally in the core disaster area; or A person who, on August 28, 2005, had a main home in the core disaster area, was displaced from that main home as a result of Hurricane Katrina, and was hired during the period beginning on August 28, 2005, and ending on December 31, 2005. Amended tax return 2012 Qualified wages. Amended tax return 2012   Generally, qualified wages do not include wages you paid to a targeted group employee who worked for you previously. Amended tax return 2012 However, wages will qualify if: You paid them to an employee who is a Hurricane Katrina employee, The employee was not in your employment on August 28, 2005, and This is your first hire of the employee as a Hurricane Katrina employee after August 28, 2005. Amended tax return 2012   For more information, see Form 5884. Amended tax return 2012 Certification requirements. Amended tax return 2012   An employee must provide to the employer reasonable evidence that he or she is a Hurricane Katrina employee. Amended tax return 2012 An employer may accept a completed Form 8850, Pre-Screening Notice and Certification Request for the Work Opportunity and Welfare-to-Work Credits, as such evidence. Amended tax return 2012 The certification requirements described in Form 8850 do not apply to a Hurricane Katrina employee. Amended tax return 2012 Do not send any Forms 8850 that have only box 1 checked to the state employment security agency. Amended tax return 2012 Instead, the employer should keep these Forms 8850 with the employer's other records. Amended tax return 2012 For more information, see Form 8850 and its instructions. Amended tax return 2012 Employee Retention Credit An eligible employer who conducted an active trade or business in the Gulf Opportunity (GO) Zone, the Rita GO Zone, or the Wilma GO Zone can claim the employee retention credit. Amended tax return 2012 The credit is 40% of qualified wages for each eligible employee (up to a maximum of $6,000 in qualified wages per employee). Amended tax return 2012 Generally, you must reduce your deduction for salaries and wages by the amount of this credit (before the tax liability limit). Amended tax return 2012 Use Form 5884-A to claim the credit. Amended tax return 2012 See the following rules and definitions for each hurricane. Amended tax return 2012 Employers affected by Hurricane Katrina. Amended tax return 2012   The following definitions apply to employers affected by Hurricane Katrina. Amended tax return 2012 Eligible employer. Amended tax return 2012   For this purpose, an eligible employer is any employer who conducted an active trade or business on August 28, 2005, in the GO Zone and whose trade or business was inoperable on any day after August 28, 2005, and before January 1, 2006, because of damage caused by Hurricane Katrina. Amended tax return 2012 Eligible employee. Amended tax return 2012   For this purpose, an eligible employee is an employee whose principal place of employment on August 28, 2005, with such eligible employer was in the GO Zone. Amended tax return 2012 An employee is not an eligible employee for purposes of Hurricane Katrina if the employee is treated as an eligible employee for the work opportunity credit. Amended tax return 2012 Employers affected by Hurricane Rita. Amended tax return 2012   The following definitions apply to employers affected by Hurricane Rita. Amended tax return 2012 Eligible employer. Amended tax return 2012   For this purpose, an eligible employer is any employer who conducted an active trade or business on September 23, 2005, in the Rita GO Zone and whose trade or business was inoperable on any day after September 23, 2005, and before January 1, 2006, because of damage caused by Hurricane Rita. Amended tax return 2012 Eligible employee. Amended tax return 2012   For this purpose, an eligible employee is an employee whose principal place of employment on September 23, 2005, with such eligible employer was in the Rita GO Zone. Amended tax return 2012 An employee is not an eligible employee for purposes of Hurricane Rita if the employee is treated as an eligible employee for the work opportunity credit or the Hurricane Katrina employee retention credit. Amended tax return 2012 Employers affected by Hurricane Wilma. Amended tax return 2012   The following definitions apply to employers affected by Hurricane Wilma. Amended tax return 2012 Eligible employer. Amended tax return 2012   For this purpose, an eligible employer is any employer who conducted an active trade or business on October 23, 2005, in the Wilma GO Zone and whose trade or business was inoperable on any day after October 23, 2005, and before January 1, 2006, because of damage caused by Hurricane Wilma. Amended tax return 2012 Eligible employee. Amended tax return 2012   For this purpose, an eligible employee is an employee whose principal place of employment on October 23, 2005, with such eligible employer was in the Wilma GO Zone. Amended tax return 2012 An employee is not an eligible employee for purposes of Hurricane Wilma if the employee is treated as an eligible employee for the work opportunity credit or the Hurricane Katrina or Rita employee retention credit. Amended tax return 2012 Qualified wages. Amended tax return 2012   Qualified wages are wages you paid or incurred before January 1, 2006, (up to $6,000 per employee) for an eligible employee beginning on the date your trade or business first became inoperable at the employee's principal place of employment immediately before the applicable hurricane, and ending on the date your trade or business resumed significant operations at that place. Amended tax return 2012 In addition, the wages must have been paid or incurred after the following date. Amended tax return 2012 August 28, 2005, for Hurricane Katrina. Amended tax return 2012 September 23, 2005, for Hurricane Rita. Amended tax return 2012 October 23, 2005, for Hurricane Wilma. Amended tax return 2012    This includes wages paid even if the employee performed no services, performed services at a place of employment other than the principal place of employment, or performed services at the principal place of employment before significant operations resumed. Amended tax return 2012    Wages qualifying for the credit generally have the same meaning as wages subject to the Federal Unemployment Tax Act (FUTA). Amended tax return 2012 Qualified wages also include amounts you paid for medical or hospitalization expenses in connection with sickness or accident disability. Amended tax return 2012 Qualified wages for any employee must be reduced by the amount of any work supplementation payment you received under the Social Security Act. Amended tax return 2012   For agricultural employees, if the work performed by any employee during more than half of any pay period qualified under FUTA as agricultural labor, that employee's wages subject to social security and Medicare taxes are qualified wages. Amended tax return 2012 For a special rule that applies to railroad employees, see section 51(h)(1)(B). Amended tax return 2012   Qualified wages do not include the following. Amended tax return 2012 Wages paid to your dependent or a related individual. Amended tax return 2012 See section 51(i)(1). Amended tax return 2012 Wages paid to any employee during the period for which you received payment for the employee from a federally funded on-the-job training program. Amended tax return 2012 Wages for services of replacement workers during a strike or lockout. Amended tax return 2012   For more information, see Form 5884-A. Amended tax return 2012 Hurricane Katrina Housing Credit An employer who conducted an active trade or business in the Gulf Opportunity (GO) Zone can claim the Hurricane Katrina housing credit. Amended tax return 2012 The credit is equal to 30% of the value (up to $600 per month per employee) of in-kind lodging furnished to a qualified employee (and the employee's spouse or dependents) from January 1, 2006, through July 1, 2006. Amended tax return 2012 The value of the lodging is excluded from the income of the qualified employee but is treated as wages for purposes of taxes imposed under the Federal Insurance Contributions Act (FICA) and the Federal Unemployment Tax Act (FUTA). Amended tax return 2012 Generally, you must reduce your deduction for salaries and wages by the amount of this credit (before the tax liability limit). Amended tax return 2012 The employer must use Form 5884-A to claim the credit. Amended tax return 2012 A qualified employee is an individual who had a main home in the GO Zone on August 28, 2005, and who performs substantially all employment services in the GO Zone for the employer furnishing the lodging. Amended tax return 2012 The employee cannot be your dependent or a related individual. Amended tax return 2012 See section 51(i)(1). Amended tax return 2012 For more information, see Form 5884-A. Amended tax return 2012 Reforestation Costs You may be able to elect to deduct a limited amount of reforestation costs for each qualified timber property. Amended tax return 2012 The deduction for any tax year generally is limited to $10,000 ($5,000 if married filing separately, $0 for a trust). Amended tax return 2012 However, this limit is increased if you paid or incurred reforestation costs after the applicable date below and any portion of the qualified timber property is located in one of the following areas. Amended tax return 2012 August 27, 2005, if any portion of the property is located in the GO Zone. Amended tax return 2012 September 22, 2005, if any portion of the property is located in the Rita GO Zone (but not in the GO Zone). Amended tax return 2012 October 22, 2005, if any portion of the property is located in the Wilma GO Zone. Amended tax return 2012 The limit for each qualified timber property is increased by the smaller of: $10,000 ($5,000 if married filing separately, $0 for a trust), or The amount of reforestation costs you paid or incurred after the applicable date for the qualified timber property, any portion of which is located in the zone described above. Amended tax return 2012 The increase in the limit applies only to costs paid or incurred before 2008. Amended tax return 2012 However, these rules do not apply to any timber producer who: Held more than 500 acres of qualified timber property at any time during the tax year, Is a corporation with stock publicly traded on an established securities market, or Is a real estate investment trust. Amended tax return 2012 For more information about the election to deduct reforestation costs, see chapter 8 in Publication 535, Business Expenses. Amended tax return 2012 Demolition and Clean-up Costs You can elect to deduct 50% of any qualified GO Zone clean-up costs for the tax year in which the costs are paid or incurred, instead of capitalizing them. Amended tax return 2012 Qualified GO Zone clean-up costs are any amounts paid or incurred after August 27, 2005, and before January 1, 2008, for the removal of debris from, or the demolition of structures on, real property located in the GO Zone that is: Held by you for use in a trade or business or for the production of income, or Inventory or other property held primarily for sale to customers in the ordinary course of your trade or business. Amended tax return 2012 Increase in Rehabilitation Tax Credit The rehabilitation credit is increased for qualified rehabilitation expenditures paid or incurred after August 27, 2005, and before January 1, 2009, on buildings located in the GO Zone as follows. Amended tax return 2012 For pre-1936 buildings (other than certified historic structures), the credit percentage is increased from 10% to 13%. Amended tax return 2012 For certified historic structures, the credit percentage is increased from 20% to 26%. Amended tax return 2012 For more information, see Form 3468, Investment Credit. Amended tax return 2012 Request for Copy or Transcript of Tax Return Request for copy of tax return. Amended tax return 2012   You can use Form 4506 to order a copy of your tax return. Amended tax return 2012 Generally, there is a $39. Amended tax return 2012 00 fee for requesting each copy of a tax return. Amended tax return 2012 If your main home, principal place of business, or tax records are located in a Presidentially declared disaster area, the fee will be waived if the assigned disaster designation (for example, “Hurricane Katrina”) is written in red across the top of the form when filed. Amended tax return 2012 Request for transcript of tax return. Amended tax return 2012   You can use Form 4506-T to order a free transcript of your tax return. Amended tax return 2012 A transcript provides most of the line entries from a tax return and usually contains the information that a third party requires. Amended tax return 2012 You can also call 1-800-829-1040 to order a transcript. Amended tax return 2012 How To Get Tax Help Special IRS assistance. Amended tax return 2012   The IRS is providing special help for those affected by Hurricane Katrina, Rita, or Wilma, as well as survivors and personal representatives of the victims. Amended tax return 2012 We have set up a special toll-free number for people who may have trouble filing or paying their taxes because they were affected by Hurricane Katrina, Rita, or Wilma, or who have other tax issues related to the hurricanes. Amended tax return 2012 Call 1-866-562-5227 Monday through Friday In English-7 a. Amended tax return 2012 m. Amended tax return 2012 to 10 p. Amended tax return 2012 m. Amended tax return 2012 local time In Spanish-8 a. Amended tax return 2012 m. Amended tax return 2012 to 9:30 p. Amended tax return 2012 m. Amended tax return 2012 local time   The IRS website at www. Amended tax return 2012 irs. Amended tax return 2012 gov has notices and other tax relief information. Amended tax return 2012 Check it periodically for any new guidance. Amended tax return 2012 Other help from the IRS. Amended tax return 2012   You can get help with unresolved tax issues, order free publications and forms, ask tax questions, and get more information from the IRS in several ways. Amended tax return 2012 By selecting the method that is best for you, you will have quick and easy access to tax help. Amended tax return 2012 Contacting your Taxpayer Advocate. Amended tax return 2012   If you have attempted to deal with an IRS problem unsuccessfully, you should contact your Taxpayer Advocate. Amended tax return 2012   The Taxpayer Advocate independently represents your interests and concerns within the IRS by protecting your rights and resolving problems that have not been fixed through normal channels. Amended tax return 2012 While Taxpayer Advocates cannot change the tax law or make a technical tax decision, they can clear up problems that resulted from previous contacts and ensure that your case is given a complete and impartial review. Amended tax return 2012   To contact your Taxpayer Advocate: Call the Taxpayer Advocate toll free at 1-877-777-4778. Amended tax return 2012 Call, write, or fax the Taxpayer Advocate office in your area. Amended tax return 2012 Call 1-800-829-4059 if you are a TTY/TDD user. Amended tax return 2012 Visit www. Amended tax return 2012 irs. Amended tax return 2012 gov/advocate. Amended tax return 2012   For more information, see Publication 1546, How To Get Help With Unresolved Tax Problems (now available in Chinese, Korean, Russian, and Vietnamese, in addition to English and Spanish). Amended tax return 2012 Free tax services. Amended tax return 2012   To find out what services are available, get Publication 910, IRS Guide to Free Tax Services. Amended tax return 2012 It contains a list of free tax publications and an index of tax topics. Amended tax return 2012 It also describes other free tax information services, including tax education and assistance programs and a list of TeleTax topics. Amended tax return 2012 Internet. Amended tax return 2012 You can access the IRS website 24 hours a day, 7 days a week, at www. Amended tax return 2012 irs. Amended tax return 2012 gov to: E-file your return. Amended tax return 2012 Find out about commercial tax preparation and e-file services available free to eligible taxpayers. Amended tax return 2012 Check the status of your refund. Amended tax return 2012 Click on Where's My Refund. Amended tax return 2012 Be sure to wait at least 6 weeks from the date you filed your return (3 weeks if you filed electronically). Amended tax return 2012 Have your tax return available because you will need to know your social security number, your filing status, and the exact whole dollar amount of your refund. Amended tax return 2012 Download forms, instructions, and publications. Amended tax return 2012 Order IRS products online. Amended tax return 2012 Research your tax questions online. Amended tax return 2012 Search publications online by topic or keyword. Amended tax return 2012 View Internal Revenue Bulletins (IRBs) published in the last few years. Amended tax return 2012 Figure your withholdin
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Understanding your CP42 Notice

The amount of your refund has changed because we used it to pay your
spouse's past due tax debt.


What you need to do

  • Read your notice carefully — it'll explain how we used your refund and how much of it is left.
  • Contact us if you disagree.

You may want to...


Answers to Common Questions

What should I do if I disagree with the notice?
Call us at the toll free number on the top right corner of your notice. Please have your paperwork (such as cancelled checks, amended return, etc.) ready when you call.

Part of the refund you used is mine. You used it to pay taxes my spouse owes. I don't owe any taxes. What can I do?
You can file a Form 8379, Injured Spouse Allocation to claim your share of the refund.

What happens to the part of my refund you didn't use?
You'll receive a refund check for any part we didn't use.


Tips for next year

Consider filing your taxes electronically. Filing online can help you avoid mistakes and find credits and deductions that you may qualify for. In many cases you can file for free. Learn more about e-file.

Printable samples of this notice (PDF)

Tax publications you may find useful

How to get help

Calling the 1-800 number listed on the top right corner of your notice is the fastest way to get your questions answered.

You can also authorize someone (such as an accountant) to contact the IRS on your behalf using this Power of Attorney and Declaration of Representative (Form 2848).

Or you may qualify for help from a Low Income Taxpayer Clinic.
 

Page Last Reviewed or Updated: 04-Mar-2014

The Amended Tax Return 2012

Amended tax return 2012 Internal Revenue Bulletin:  2012-14  April 2, 2012  Rev. Amended tax return 2012 Proc. Amended tax return 2012 2012-23 Table of Contents SECTION 1. Amended tax return 2012 PURPOSE SECTION 2. Amended tax return 2012 BACKGROUND SECTION 3. Amended tax return 2012 SCOPE SECTION 4. Amended tax return 2012 APPLICATION. Amended tax return 2012 01 Limitations on Depreciation Deductions for Certain Automobiles. Amended tax return 2012 . Amended tax return 2012 02 Inclusions in Income of Lessees of Passenger Automobiles. Amended tax return 2012 SECTION 5. Amended tax return 2012 EFFECTIVE DATE SECTION 6. Amended tax return 2012 DRAFTING INFORMATION SECTION 1. Amended tax return 2012 PURPOSE This revenue procedure provides: (1) limitations on depreciation deductions for owners of passenger automobiles first placed in service by the taxpayer during calendar year 2012, including separate tables of limitations on depreciation deductions for trucks and vans; and (2) the amounts that must be included in income by lessees of passenger automobiles first leased by the taxpayer during calendar year 2012, including a separate table of inclusion amounts for lessees of trucks and vans. Amended tax return 2012 The tables detailing these depreciation limitations and lessee inclusion amounts reflect the automobile price inflation adjustments required by § 280F(d)(7) of the Internal Revenue Code. Amended tax return 2012 SECTION 2. Amended tax return 2012 BACKGROUND . Amended tax return 2012 01 For owners of passenger automobiles, § 280F(a) imposes dollar limitations on the depreciation deduction for the year the taxpayer places the passenger automobile in service and for each succeeding year. Amended tax return 2012 For passenger automobiles placed in service after 1988, § 280F(d)(7) requires the Internal Revenue Service to increase the amounts allowable as depreciation deductions by a price inflation adjustment amount. Amended tax return 2012 The method of calculating this price inflation amount for trucks and vans placed in service in or after calendar year 2003 uses a different CPI “automobile component” (the “new trucks” component) than that used in the price inflation amount calculation for other passenger automobiles (the “new cars” component), resulting in somewhat higher depreciation deductions for trucks and vans. Amended tax return 2012 This change reflects the higher rate of price inflation for trucks and vans since 1988. Amended tax return 2012 . Amended tax return 2012 02 Section 401(a) of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, Pub. Amended tax return 2012 L. Amended tax return 2012 No. Amended tax return 2012 111-312, 124 Stat. Amended tax return 2012 3296 (Dec. Amended tax return 2012 17, 2010) (the “Act”) extended the 50 percent additional first year depreciation deduction under § 168(k) to qualified property acquired by the taxpayer after December 31, 2007, and before January 1, 2013, if no written binding contract for the acquisition of the property existed before January 1, 2008, and if the taxpayer places the property in service generally before January 1, 2013. Amended tax return 2012 Section 168(k)(2)(F)(i) increases the first year depreciation allowed under § 280F(a)(1)(A)(i) by $8,000 for passenger automobiles to which the additional first year depreciation deduction under § 168(k) (hereinafter, referred to as “§ 168(k) additional first year depreciation deduction”) applies. Amended tax return 2012 . Amended tax return 2012 03 Section 168(k)(2)(D)(i) provides that the § 168(k) additional first year depreciation deduction does not apply to any property required to be depreciated under the alternative depreciation system of § 168(g), including property described in § 280F(b)(1). Amended tax return 2012 Section 168(k)(2)(D)(iii) permits a taxpayer to elect out of the § 168(k) additional first year depreciation deduction for any class of property. Amended tax return 2012 Section 168(k)(4), as amended by the Act, permits a corporation to elect to increase the alternative minimum tax (“AMT”) credit limitation under § 53(c), instead of claiming the § 168(k) additional first year depreciation deduction for all eligible qualified property placed in service after December 31, 2010, that is round 2 extension property (as defined in § 168(k)(4)(I)(iv)). Amended tax return 2012 Accordingly, this revenue procedure provides tables for passenger automobiles for which the § 168(k) additional first year depreciation deduction applies. Amended tax return 2012 This revenue procedure also provides tables for passenger automobiles for which the § 168(k) additional first year depreciation deduction does not apply, either because taxpayer (1) purchased the passenger automobile used; (2) did not use the passenger automobile during 2012 more than 50 percent for business purposes; (3) elected out of the § 168(k) additional first year depreciation deduction pursuant to § 168(k)(2)(D)(iii); or (4) elected to increase the § 53 AMT credit limitation in lieu of claiming § 168(k) additional first year depreciation. Amended tax return 2012 . Amended tax return 2012 04 Section 280F(c) requires a reduction in the deduction allowed to the lessee of a leased passenger automobile. Amended tax return 2012 The reduction must be substantially equivalent to the limitations on the depreciation deductions imposed on owners of passenger automobiles. Amended tax return 2012 Under § 1. Amended tax return 2012 280F-7(a) of the Income Tax Regulations, this reduction requires a lessee to include in gross income an amount determined by applying a formula to the amount obtained from a table. Amended tax return 2012 One table applies to lessees of trucks and vans and another table applies to all other passenger automobiles. Amended tax return 2012 Each table shows inclusion amounts for a range of fair market values for each taxable year after the passenger automobile is first leased. Amended tax return 2012 SECTION 3. Amended tax return 2012 SCOPE . Amended tax return 2012 01 The limitations on depreciation deductions in section 4. Amended tax return 2012 01(2) of this revenue procedure apply to passenger automobiles (other than leased passenger automobiles) that are placed in service by the taxpayer in calendar year 2012, and continue to apply for each taxable year that the passenger automobile remains in service. Amended tax return 2012 . Amended tax return 2012 02 The tables in section 4. Amended tax return 2012 02 of this revenue procedure apply to leased passenger automobiles for which the lease term begins during calendar year 2012. Amended tax return 2012 Lessees of these passenger automobiles must use these tables to determine the inclusion amount for each taxable year during which the passenger automobile is leased. Amended tax return 2012 See Rev. Amended tax return 2012 Proc. Amended tax return 2012 2007-30, 2007-1 C. Amended tax return 2012 B. Amended tax return 2012 1104, for passenger automobiles first leased during calendar year 2007; Rev. Amended tax return 2012 Proc. Amended tax return 2012 2008-22, 2008-1 C. Amended tax return 2012 B. Amended tax return 2012 658, for passenger automobiles first leased during calendar year 2008; Rev. Amended tax return 2012 Proc. Amended tax return 2012 2009-24, 2009-17 I. Amended tax return 2012 R. Amended tax return 2012 B. Amended tax return 2012 885, for passenger automobiles first leased during calendar year 2009; Rev. Amended tax return 2012 Proc. Amended tax return 2012 2010-18, 2010-9 I. Amended tax return 2012 R. Amended tax return 2012 B. Amended tax return 2012 427, as amplified and modified by section 4. Amended tax return 2012 03 of Rev. Amended tax return 2012 Proc. Amended tax return 2012 2011-21, 2011-12 I. Amended tax return 2012 R. Amended tax return 2012 B. Amended tax return 2012 560, for passenger automobiles first leased during calendar year 2010; and Rev. Amended tax return 2012 Proc. Amended tax return 2012 2011-21, for passenger automobiles first leased during calendar year 2011. Amended tax return 2012 SECTION 4. Amended tax return 2012 APPLICATION . Amended tax return 2012 01 Limitations on Depreciation Deductions for Certain Automobiles. Amended tax return 2012 (1) Amount of the inflation adjustment. Amended tax return 2012 (a) Passenger automobiles (other than trucks or vans). Amended tax return 2012 Under § 280F(d)(7)(B)(i), the automobile price inflation adjustment for any calendar year is the percentage (if any) by which the CPI automobile component for October of the preceding calendar year exceeds the CPI automobile component for October 1987. Amended tax return 2012 Section 280F(d)(7)(B)(ii) defines the term “CPI automobile component” as the automobile component of the Consumer Price Index for all Urban Consumers published by the Department of Labor. Amended tax return 2012 The new car component of the CPI was 115. Amended tax return 2012 2 for October 1987 and 143. Amended tax return 2012 419 for October 2011. Amended tax return 2012 The October 2011 index exceeded the October 1987 index by 28. Amended tax return 2012 219. Amended tax return 2012 Therefore, the automobile price inflation adjustment for 2012 for passenger automobiles (other than trucks and vans) is 24. Amended tax return 2012 5 percent (28. Amended tax return 2012 219/115. Amended tax return 2012 2 x 100%). Amended tax return 2012 The dollar limitations in § 280F(a) are multiplied by a factor of 0. Amended tax return 2012 245, and the resulting increases, after rounding to the nearest $100, are added to the 1988 limitations to give the depreciation limitations applicable to passenger automobiles (other than trucks and vans) for calendar year 2012. Amended tax return 2012 This adjustment applies to all passenger automobiles (other than trucks and vans) that are first placed in service in calendar year 2012. Amended tax return 2012 (b) Trucks and vans. Amended tax return 2012 To determine the dollar limitations for trucks and vans first placed in service during calendar year 2012, the Service uses the new truck component of the CPI instead of the new car component. Amended tax return 2012 The new truck component of the CPI was 112. Amended tax return 2012 4 for October 1987 and 146. Amended tax return 2012 607 for October 2011. Amended tax return 2012 The October 2011 index exceeded the October 1987 index by 34. Amended tax return 2012 207. Amended tax return 2012 Therefore, the automobile price inflation adjustment for 2012 for trucks and vans is 30. Amended tax return 2012 43 percent (34. Amended tax return 2012 207/112. Amended tax return 2012 4 x 100%). Amended tax return 2012 The dollar limitations in § 280F(a) are multiplied by a factor of 0. Amended tax return 2012 3043, and the resulting increases, after rounding to the nearest $100, are added to the 1988 limitations to give the depreciation limitations for trucks and vans. Amended tax return 2012 This adjustment applies to all trucks and vans that are first placed in service in calendar year 2012. Amended tax return 2012 (2) Amount of the limitation. Amended tax return 2012 Tables 1 through 4 contain the dollar amount of the depreciation limitation for each taxable year for passenger automobiles a taxpayer places in service in calendar year 2012. Amended tax return 2012 Use Table 1 for a passenger automobile (other than a truck or van), and Table 2 for a truck or van, placed in service in calendar year 2012 for which the § 168(k) additional first year depreciation deduction applies. Amended tax return 2012 Use Table 3 for a passenger automobile (other than a truck or van), and Table 4 for a truck or van, placed in service in calendar year 2012 for which the § 168(k) additional first year depreciation deduction does not apply. Amended tax return 2012 REV. Amended tax return 2012 PROC. Amended tax return 2012 2012-23 TABLE 1 DEPRECIATION LIMITATIONS FOR PASSENGER AUTOMOBILES (THAT ARE NOT TRUCKS OR VANS) PLACED IN SERVICE IN CALENDAR YEAR 2012 FOR WHICH THE § 168(k) ADDITIONAL FIRST YEAR DEPRECIATION DEDUCTION APPLIES Tax Year Amount 1st Tax Year $11,160 2nd Tax Year $5,100 3rd Tax Year $3,050 Each Succeeding Year $1,875 REV. Amended tax return 2012 PROC. Amended tax return 2012 2012-23 TABLE 2 DEPRECIATION LIMITATIONS FOR TRUCKS AND VANS PLACED IN SERVICE IN CALENDAR YEAR 2012 FOR WHICH THE § 168(k) ADDITIONAL FIRST YEAR DEPRECIATION DEDUCTION APPLIES Tax Year Amount 1st Tax Year $11,360 2nd Tax Year $5,300 3rd Tax Year $3,150 Each Succeeding Year $1,875 REV. Amended tax return 2012 PROC. Amended tax return 2012 2012-23 TABLE 3 DEPRECIATION LIMITATIONS FOR PASSENGER AUTOMOBILES (THAT ARE NOT TRUCKS OR VANS) PLACED IN SERVICE IN CALENDAR YEAR 2012 FOR WHICH THE § 168(k) ADDITIONAL FIRST YEAR DEPRECIATION DEDUCTION DOES NOT APPLY Tax Year Amount 1st Tax Year $3,160 2nd Tax Year $5,100 3rd Tax Year $3,050 Each Succeeding Year $1,875 REV. Amended tax return 2012 PROC. Amended tax return 2012 2012-23 TABLE 4 DEPRECIATION LIMITATIONS FOR TRUCKS AND VANS PLACED IN SERVICE IN CALENDAR YEAR 2012 FOR WHICH THE § 168(k) ADDITIONAL FIRST YEAR DEPRECIATION DEDUCTION DOES NOT APPLY Tax Year Amount 1st Tax Year $3,360 2nd Tax Year $5,300 3rd Tax Year $3,150 Each Succeeding Year $1,875 . Amended tax return 2012 02 Inclusions in Income of Lessees of Passenger Automobiles. Amended tax return 2012 A taxpayer must follow the procedures in § 1. Amended tax return 2012 280F-7(a) for determining the inclusion amounts for passenger automobiles first leased in calendar year 2012. Amended tax return 2012 In applying these procedures, lessees of passenger automobiles other than trucks and vans should use Table 5 of this revenue procedure, while lessees of trucks and vans should use Table 6 of this revenue procedure. Amended tax return 2012 REV. Amended tax return 2012 PROC. Amended tax return 2012 2012-23 TABLE 5 DOLLAR AMOUNTS FOR PASSENGER AUTOMOBILES (THAT ARE NOT TRUCKS OR VANS) WITH A LEASE TERM BEGINNING IN CALENDAR YEAR 2012 Fair Market Value of Passenger Automobile Tax Year During Lease Over Not Over 1st 2nd 3rd 4th 5th & Later $18,500 $19,000 2 4 5 6 8 19,000 19,500 2 4 7 7 9 19,500 20,000 2 5 8 8 10 20,000 20,500 3 5 9 10 11 20,500 21,000 3 6 9 12 12 21,000 21,500 3 7 10 12 14 21,500 22,000 3 8 11 13 16 22,000 23,000 4 8 13 15 17 23,000 24,000 4 10 15 17 20 24,000 25,000 5 11 17 19 23 25,000 26,000 6 12 19 21 26 26,000 27,000 6 14 20 24 28 27,000 28,000 7 15 22 26 31 28,000 29,000 7 16 25 28 33 29,000 30,000 8 18 25 32 35 30,000 31,000 9 19 27 34 38 31,000 32,000 9 20 30 36 41 32,000 33,000 10 21 32 38 43 33,000 34,000 10 23 33 41 46 34,000 35,000 11 24 35 43 49 35,000 36,000 12 25 37 45 52 36,000 37,000 12 27 39 47 54 37,000 38,000 13 28 41 49 57 38,000 39,000 13 29 43 52 59 39,000 40,000 14 30 45 54 62 40,000 41,000 14 32 47 56 65 41,000 42,000 15 33 49 58 68 42,000 43,000 16 34 51 61 70 43,000 44,000 16 36 52 63 73 44,000 45,000 17 37 54 66 75 45,000 46,000 17 38 57 67 78 46,000 47,000 18 39 59 70 80 47,000 48,000 19 40 61 72 83 48,000 49,000 19 42 62 75 86 49,000 50,000 20 43 64 77 89 50,000 51,000 20 45 66 79 91 51,000 52,000 21 46 68 81 94 52,000 53,000 21 47 70 84 96 53,000 54,000 22 48 72 86 99 54,000 55,000 23 49 74 88 102 55,000 56,000 23 51 76 90 104 56,000 57,000 24 52 78 92 107 57,000 58,000 24 54 79 95 110 58,000 59,000 25 55 81 97 113 59,000 60,000 26 56 83 100 115 60,000 62,000 26 58 86 103 119 62,000 64,000 28 60 90 108 124 64,000 66,000 29 63 94 112 129 66,000 68,000 30 66 97 117 135 68,000 70,000 31 68 102 121 140 70,000 72,000 32 71 105 126 145 72,000 74,000 33 74 109 130 151 74,000 76,000 35 76 113 135 156 76,000 78,000 36 78 117 140 161 78,000 80,000 37 81 120 145 166 80,000 85,000 39 86 127 152 176 85,000 90,000 42 92 137 163 189 90,000 95,000 45 98 147 175 202 95,000 100,000 48 105 155 187 215 100,000 110,000 52 115 170 203 235 110,000 120,000 58 127 189 227 262 120,000 130,000 64 140 208 250 288 130,000 140,000 70 153 227 272 315 140,000 150,000 75 166 246 296 340 150,000 160,000 81 179 265 318 368 160,000 170,000 87 192 284 341 394 170,000 180,000 93 204 304 364 420 180,000 190,000 99 217 323 387 446 190,000 200,000 105 230 342 409 473 200,000 210,000 111 243 361 432 499 210,000 220,000 116 256 380 455 526 220,000 230,000 122 269 399 478 552 230,000 240,000 128 282 418 501 578 240,000 and up 134 294 437 524 605 REV. Amended tax return 2012 PROC. Amended tax return 2012 2012-23 TABLE 6 DOLLAR AMOUNTS FOR TRUCKS AND VANS WITH A LEASE TERM BEGINNING IN CALENDAR YEAR 2012 Fair Market Value of Truck or Van Tax Year During Lease Over Not Over 1st 2nd 3rd 4th 5th & Later $19,000 $19,500 1 4 5 6 7 19,500 20,000 2 4 6 7 9 20,000 20,500 2 5 7 8 10 20,500 21,000 2 5 8 10 11 21,000 21,500 3 6 9 10 13 21,500 22,000 3 6 10 12 14 22,000 23,000 3 8 11 14 15 23,000 24,000 4 9 13 16 18 24,000 25,000 4 10 15 19 21 25,000 26,000 5 11 17 21 24 26,000 27,000 6 12 19 23 26 27,000 28,000 6 14 21 25 29 28,000 29,000 7 15 23 27 32 29,000 30,000 7 17 24 30 34 30,000 31,000 8 18 26 32 37 31,000 32,000 9 19 28 34 40 32,000 33,000 9 20 31 36 42 33,000 34,000 10 21 33 39 44 34,000 35,000 10 23 34 41 48 35,000 36,000 11 24 36 44 50 36,000 37,000 12 25 38 46 53 37,000 38,000 12 27 40 48 55 38,000 39,000 13 28 42 50 58 39,000 40,000 13 29 44 53 60 40,000 41,000 14 31 45 55 63 41,000 42,000 14 32 48 57 66 42,000 43,000 15 33 50 59 69 43,000 44,000 16 34 52 61 72 44,000 45,000 16 36 53 64 74 45,000 46,000 17 37 55 66 77 46,000 47,000 17 38 58 68 79 47,000 48,000 18 40 59 70 82 48,000 49,000 19 41 61 73 84 49,000 50,000 19 42 63 75 87 50,000 51,000 20 43 65 78 89 51,000 52,000 20 45 66 80 93 52,000 53,000 21 46 68 83 95 53,000 54,000 21 48 70 84 98 54,000 55,000 22 49 72 87 100 55,000 56,000 23 50 74 89 103 56,000 57,000 23 51 76 92 105 57,000 58,000 24 52 78 94 108 58,000 59,000 24 54 80 96 111 59,000 60,000 25 55 82 98 114 60,000 62,000 26 57 85 101 118 62,000 64,000 27 60 88 106 123 64,000 66,000 28 62 93 110 128 66,000 68,000 29 65 96 115 134 68,000 70,000 30 67 100 120 139 70,000 72,000 32 70 103 125 144 72,000 74,000 33 72 108 129 149 74,000 76,000 34 75 111 134 155 76,000 78,000 35 78 115 138 160 78,000 80,000 36 80 119 143 165 80,000 85,000 38 85 125 151 175 85,000 90,000 41 91 135 163 187 90,000 95,000 44 98 144 174 201 95,000 100,000 47 104 154 185 214 100,000 110,000 52 113 169 202 234 110,000 120,000 57 127 187 225 261 120,000 130,000 63 139 207 248 287 130,000 140,000 69 152 226 271 313 140,000 150,000 75 165 245 294 339 150,000 160,000 81 178 264 316 366 160,000 170,000 87 190 283 340 392 170,000 180,000 92 204 302 362 419 180,000 190,000 98 216 322 385 445 190,000 200,000 104 229 340 409 471 200,000 210,000 110 242 359 431 498 210,000 220,000 116 255 378 454 524 220,000 230,000 122 267 398 477 551 230,000 240,000 127 281 416 500 577 240,000 and up 133 294 435 523 603 SECTION 5. Amended tax return 2012 EFFECTIVE DATE This revenue procedure applies to passenger automobiles that a taxpayer first places in service or first leases during calendar year 2012. Amended tax return 2012 SECTION 6. Amended tax return 2012 DRAFTING INFORMATION The principal author of this revenue procedure is Bernard P. Amended tax return 2012 Harvey of the Office of Associate Chief Counsel (Income Tax & Accounting). Amended tax return 2012 For further information regarding this revenue procedure, contact Mr. Amended tax return 2012 Harvey at (202) 622-4930 (not a toll-free call). Amended tax return 2012 Prev  Up  Next   Home   More Internal Revenue Bulletins