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File free tax extension online 5. File free tax extension online   How To Get Tax Help Table of Contents Whether it's help with a tax issue, preparing your tax return or a need for a free publication or form, get the help you need the way you want it: online, use a smart phone, call or walk in to an IRS office or volunteer site near you. File free tax extension online You can get help with unresolved tax issues, order free publications and forms, ask tax questions, and get information from the IRS in several ways. File free tax extension online By selecting the method that is best for you, you will have quick and easy access to tax help. File free tax extension online Free help with your tax return. File free tax extension online   You can get free help preparing your return nationwide from IRS-certified volunteers. File free tax extension online The Volunteer Income Tax Assistance (VITA) program helps low-to-moderate income, elderly, people with disabilities, and limited English proficient taxpayers. File free tax extension online The Tax Counseling for the Elderly (TCE) program helps taxpayers age 60 and older with their tax returns. File free tax extension online Most VITA and TCE sites offer free electronic filing and all volunteers will let you know about credits and deductions you may be entitled to claim. File free tax extension online In addition, some VITA and TCE sites provide taxpayers the opportunity to prepare their own return with help from an IRS-certified volunteer. File free tax extension online To find the nearest VITA or TCE site, you can use the VITA Locator Tool on IRS. File free tax extension online gov, download the IRS2Go app, or call 1-800-906-9887. File free tax extension online   As part of the TCE program, AARP offers the Tax-Aide counseling program. File free tax extension online To find the nearest AARP Tax-Aide site, visit AARP's website at www. File free tax extension online aarp. File free tax extension online org/money/taxaide or call 1-888-227-7669. File free tax extension online For more information on these programs, go to IRS. File free tax extension online gov and enter “VITA” in the search box. File free tax extension online Internet. File free tax extension online    IRS. File free tax extension online gov and IRS2Go are ready when you are —24 hours a day, 7 days a week. File free tax extension online Download the free IRS2Go app from the iTunes app store or from Google Play. File free tax extension online Use it to check your refund status, order transcripts of your tax returns or tax account, watch the IRS YouTube channel, get IRS news as soon as it's released to the public, subscribe to filing season updates or daily tax tips, and follow the IRS Twitter news feed, @IRSnews, to get the latest federal tax news, including information about tax law changes and important IRS programs. File free tax extension online Check the status of your 2013 refund with the Where's My Refund? application on IRS. File free tax extension online gov or download the IRS2Go app and select the Refund Status option. File free tax extension online The IRS issues more than 9 out of 10 refunds in less than 21 days. File free tax extension online Using these applications, you can start checking on the status of your return within 24 hours after we receive your e-filed return or 4 weeks after you mail a paper return. File free tax extension online You will also be given a personalized refund date as soon as the IRS processes your tax return and approves your refund. File free tax extension online The IRS updates Where's My Refund? every 24 hours, usually overnight, so you only need to check once a day. File free tax extension online Use the Interactive Tax Assistant (ITA) to research your tax questions. File free tax extension online No need to wait on the phone or stand in line. File free tax extension online The ITA is available 24 hours a day, 7 days a week, and provides you with a variety of tax information related to general filing topics, deductions, credits, and income. File free tax extension online When you reach the response screen, you can print the entire interview and the final response for your records. File free tax extension online New subject areas are added on a regular basis. File free tax extension online  Answers not provided through ITA may be found in Tax Trails, one of the Tax Topics on IRS. File free tax extension online gov which contain general individual and business tax information or by searching the IRS Tax Map, which includes an international subject index. File free tax extension online You can use the IRS Tax Map, to search publications and instructions by topic or keyword. File free tax extension online The IRS Tax Map integrates forms and publications into one research tool and provides single-point access to tax law information by subject. File free tax extension online When the user searches the IRS Tax Map, they will be provided with links to related content in existing IRS publications, forms and instructions, questions and answers, and Tax Topics. File free tax extension online Coming this filing season, you can immediately view and print for free all 5 types of individual federal tax transcripts (tax returns, tax account, record of account, wage and income statement, and certification of non-filing) using Get Transcript. File free tax extension online You can also ask the IRS to mail a return or an account transcript to you. File free tax extension online Only the mail option is available by choosing the Tax Records option on the IRS2Go app by selecting Mail Transcript on IRS. File free tax extension online gov or by calling 1-800-908-9946. File free tax extension online Tax return and tax account transcripts are generally available for the current year and the past three years. File free tax extension online Determine if you are eligible for the EITC and estimate the amount of the credit with the Earned Income Tax Credit (EITC) Assistant. File free tax extension online Visit Understanding Your IRS Notice or Letter to get answers to questions about a notice or letter you received from the IRS. File free tax extension online If you received the First Time Homebuyer Credit, you can use the First Time Homebuyer Credit Account Look-up tool for information on your repayments and account balance. File free tax extension online Check the status of your amended return using Where's My Amended Return? Go to IRS. File free tax extension online gov and enter Where's My Amended Return? in the search box. File free tax extension online You can generally expect your amended return to be processed up to 12 weeks from the date we receive it. File free tax extension online It can take up to 3 weeks from the date you mailed it to show up in our system. File free tax extension online Make a payment using one of several safe and convenient electronic payment options available on IRS. File free tax extension online gov. File free tax extension online Select the Payment tab on the front page of IRS. File free tax extension online gov for more information. File free tax extension online Determine if you are eligible and apply for an online payment agreement, if you owe more tax than you can pay today. File free tax extension online Figure your income tax withholding with the IRS Withholding Calculator on IRS. File free tax extension online gov. File free tax extension online Use it if you've had too much or too little withheld, your personal situation has changed, you're starting a new job or you just want to see if you're having the right amount withheld. File free tax extension online Determine if you might be subject to the Alternative Minimum Tax by using the Alternative Minimum Tax Assistant on IRS. File free tax extension online gov. File free tax extension online Request an Electronic Filing PIN by going to IRS. File free tax extension online gov and entering Electronic Filing PIN in the search box. File free tax extension online Download forms, instructions and publications, including accessible versions for people with disabilities. File free tax extension online Locate the nearest Taxpayer Assistance Center (TAC) using the Office Locator tool on IRS. File free tax extension online gov, or choose the Contact Us option on the IRS2Go app and search Local Offices. File free tax extension online An employee can answer questions about your tax account or help you set up a payment plan. File free tax extension online Before you visit, check the Office Locator on IRS. File free tax extension online gov, or Local Offices under Contact Us on IRS2Go to confirm the address, phone number, days and hours of operation, and the services provided. File free tax extension online If you have a special need, such as a disability, you can request an appointment. File free tax extension online Call the local number listed in the Office Locator, or look in the phone book under United States Government, Internal Revenue Service. File free tax extension online Apply for an Employer Identification Number (EIN). File free tax extension online Go to IRS. File free tax extension online gov and enter Apply for an EIN in the search box. File free tax extension online Read the Internal Revenue Code, regulations, or other official guidance. File free tax extension online Read Internal Revenue Bulletins. File free tax extension online Sign up to receive local and national tax news and more by email. File free tax extension online Just click on “subscriptions” above the search box on IRS. File free tax extension online gov and choose from a variety of options. File free tax extension online Phone. File free tax extension online    You can call the IRS, or you can carry it in your pocket with the IRS2Go app on your smart phone or tablet. File free tax extension online Download the free IRS2Go app from the iTunes app store or from Google Play. File free tax extension online Call to locate the nearest volunteer help site, 1-800-906-9887 or you can use the VITA Locator Tool on IRS. File free tax extension online gov, or download the IRS2Go app. File free tax extension online Low-to-moderate income, elderly, people with disabilities, and limited English proficient taxpayers can get free help with their tax return from the nationwide Volunteer Income Tax Assistance (VITA) program. File free tax extension online The Tax Counseling for the Elderly (TCE) program helps taxpayers age 60 and older with their tax returns. File free tax extension online Most VITA and TCE sites offer free electronic filing. File free tax extension online Some VITA and TCE sites provide IRS-certified volunteers who can help prepare your tax return. File free tax extension online Through the TCE program, AARP offers the Tax-Aide counseling program; call 1-888-227-7669 to find the nearest Tax-Aide location. File free tax extension online Call the automated Where's My Refund? information hotline to check the status of your 2013 refund 24 hours a day, 7 days a week at 1-800-829-1954. File free tax extension online If you e-file, you can start checking on the status of your return within 24 hours after the IRS receives your tax return or 4 weeks after you've mailed a paper return. File free tax extension online The IRS issues more than 9 out of 10 refunds in less than 21 days. File free tax extension online Where's My Refund? will give you a personalized refund date as soon as the IRS processes your tax return and approves your refund. File free tax extension online Before you call this automated hotline, have your 2013 tax return handy so you can enter your social security number, your filing status, and the exact whole dollar amount of your refund. File free tax extension online The IRS updates Where's My Refund? every 24 hours, usually overnight, so you only need to check once a day. File free tax extension online Note, the above information is for our automated hotline. File free tax extension online Our live phone and walk-in assistors can research the status of your refund only if it's been 21 days or more since you filed electronically or more than 6 weeks since you mailed your paper return. File free tax extension online Call the Amended Return Hotline, 1-866-464-2050, to check the status of your amended return. File free tax extension online You can generally expect your amended return to be processed up to 12 weeks from the date we receive it. File free tax extension online It can take up to 3 weeks from the date you mailed it to show up in our system. File free tax extension online Call 1-800-TAX-FORM (1-800-829-3676) to order current-year forms, instructions, publications, and prior-year forms and instructions (limited to 5 years). File free tax extension online You should receive your order within 10 business days. File free tax extension online Call TeleTax, 1-800-829-4477, to listen to pre-recorded messages covering general and business tax information. File free tax extension online If, between January and April 15, you still have questions about the Form 1040, 1040A, or 1040EZ (like filing requirements, dependents, credits, Schedule D, pensions and IRAs or self-employment taxes), call 1-800-829-1040. File free tax extension online Call using TTY/TDD equipment, 1-800-829-4059 to ask tax questions or order forms and publications. File free tax extension online The TTY/TDD telephone number is for people who are deaf, hard of hearing, or have a speech disability. File free tax extension online These individuals can also contact the IRS through relay services such as the Federal Relay Service. File free tax extension online Mail. File free tax extension online   You can send your order for forms, instructions, and publications to the address below. File free tax extension online You should receive a response within 10 business days after your request is received. File free tax extension online Internal Revenue Service 1201 N. File free tax extension online Mitsubishi Motorway Bloomington, IL 61705-6613    The Taxpayer Advocate Service Is Here to Help You. File free tax extension online The Taxpayer Advocate Service (TAS) is your voice at the IRS. File free tax extension online Our job is to ensure that every taxpayer is treated fairly and that you know and understand your rights. File free tax extension online   What can TAS do for you? We can offer you free help with IRS problems that you can't resolve on your own. File free tax extension online We know this process can be confusing, but the worst thing you can do is nothing at all! TAS can help if you can't resolve your tax problem and: Your problem is causing financial difficulties for you, your family, or your business. File free tax extension online You face (or your business is facing) an immediate threat of adverse action. File free tax extension online You've tried repeatedly to contact the IRS but no one has responded, or the IRS hasn't responded by the date promised. File free tax extension online   If you qualify for our help, you'll be assigned to one advocate who'll be with you at every turn and will do everything possible to resolve your problem. File free tax extension online Here's why we can help: TAS is an independent organization within the IRS. File free tax extension online Our advocates know how to work with the IRS. File free tax extension online Our services are free and tailored to meet your needs. File free tax extension online We have offices in every state, the District of Columbia, and Puerto Rico. File free tax extension online   How can you reach us? If you think TAS can help you, call your local advocate, whose number is in your local directory and at www. File free tax extension online irs. File free tax extension online gov/Advocate, or call us toll-free at 1-877-777-4778. File free tax extension online   How else does TAS help taxpayers?  TAS also works to resolve large-scale, systemic problems that affect many taxpayers. File free tax extension online If you know of one of these broad issues, please report it to us through our Systemic Advisory Management System at www. File free tax extension online irs. File free tax extension online gov/Advocate/Systemic-Advocacy-Management-System-SAMS. File free tax extension online Low Income Taxpayer Clinics. File free tax extension online    Low Income Taxpayer Clinics (LITCs) serve individuals whose income is below a certain level and need to resolve tax problems such as audits, appeals and tax collection disputes. File free tax extension online Some clinics can provide information about taxpayer rights and responsibilities in different languages for individuals who speak English as a second language. File free tax extension online Visit www. File free tax extension online irs. File free tax extension online gov/Advocate or see IRS Publication 4134, Low Income Taxpayer Clinic List. File free tax extension online Prev  Up  Next   Home   More Online Publications
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Individual Shared Responsibility Provision - Exemptions

 

The individual shared responsibility provision requires you and each member of your family to have basic health insurance coverage (also known as minimum essential coverage), qualify for an exemption, or make an individual shared responsibility payment when you file your federal income tax return.

How you get the exemption depends upon the type of exemption for which you are eligible. You can obtain some exemptions only from the Marketplace in the area where you live, others only from the IRS, and yet others from either the Marketplace or the IRS.

This chart shows the types of exemptions available and whether they must be granted by the Marketplace, claimed on an income tax return filed with the IRS, or either may be granted by the Marketplace or claimed on a tax return. For additional information about how to get exemptions that may be granted by the Marketplace, visit HealthCare.gov/exemptions.

Information will be made available later about how to report health insurance coverage and claim exemptions on your income tax return.

Exemptions May only be granted by Marketplace May be granted by Marketplace or claimed on tax return May only be claimed on tax return
Coverage is considered unaffordable - The amount you would have paid for employer-sponsored coverage or a bronze level health plan (depending on your circumstances) is more than eight percent of your actual household income for the year as computed on your tax return. Also see the second hardship listed below, which provides a prospective exemption granted by the Marketplace if the amount you would have paid for coverage is more than eight percent of your projected household income for the year.    
Short coverage gap - You went without coverage for less than three consecutive months during the year. For more information, see question 22 of our questions and answers.    
Household income below the return filing threshold - Your household income is below the minimum threshold for filing a tax return. Learn more about household income    
Certain noncitizens - You are neither a U.S. citizen, a U.S. national, nor an alien lawfully present in the U.S.    
Members of a health care sharing ministry - You are a member of a health care sharing ministry, which is an organization described in section 501(c)(3) whose members share a common set of ethical or religious beliefs and have shared medical expenses in accordance with those beliefs continuously since at least December 31, 1999.  

 

 

 

 

 

Members of Federally-recognized Indian Tribes - You are a member of a federally-recognized Indian tribe.    
Incarceration - You are in a jail, prison, or similar penal institution or correctional facility after the disposition of charges.    
Members of certain religious sects - You are a member of a religious sect in existence since December 31, 1950, that is recognized by the Social Security Administration (SSA) as conscientiously opposed to accepting any insurance benefits, including Medicare and Social Security.    
Hardships:      
  • Your gross income is below the filing threshold. To find out if you are required to file, use our Interactive Tax Assistant.
   
  • Two or more family members' aggregate cost of self-only employer-sponsored coverage exceeds 8 percent of household income, as does the cost of any available employer-sponsored coverage for the entire family.
   
  • You purchased insurance through the Marketplace during the initial enrollment period but have a coverage gap at the beginning of 2014. See this HHS Question and Answer.
   
  • You are experiencing circumstances that prevent you from obtaining coverage under a qualified health plan. Learn more about the criteria for this exemption.
   
  • You do not have access to affordable coverage based on your projected household income.
   
  • You are ineligible for Medicaid solely because the State does not participate in the Medicaid expansion under the Affordable Care Act.
   
  • You are an American Indian, Alaska Native, or a spouse or descendant who is eligible for services through an Indian health care provider. Learn more.
   
  • You have been notified that your health insurance policy will not be renewed and you consider the other plans available unaffordable. See HHS guidance and HHS Questions and Answers for more information.
   

 

 

Page Last Reviewed or Updated: 24-Mar-2014

The File Free Tax Extension Online

File free tax extension online 11. File free tax extension online   Casualties, Thefts, and Condemnations Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: Casualties and TheftsDeductible losses. File free tax extension online Nondeductible losses. File free tax extension online Family pet. File free tax extension online Progressive deterioration. File free tax extension online Decline in market value of stock. File free tax extension online Mislaid or lost property. File free tax extension online Farming Losses How To Figure a Loss Deduction Limits on Losses of Personal-Use Property When Loss Is Deductible Proof of Loss Figuring a Gain Other Involuntary ConversionsCondemnation Irrigation Project Livestock Losses Tree Seedlings Postponing GainException. File free tax extension online Related persons. File free tax extension online Replacement Property Replacement Period How To Postpone Gain Disaster Area LossesWho is eligible. File free tax extension online Covered disaster area. File free tax extension online Reporting Gains and Losses Introduction This chapter explains the tax treatment of casualties, thefts, and condemnations. File free tax extension online A casualty occurs when property is damaged, destroyed, or lost due to a sudden, unexpected, or unusual event. File free tax extension online A theft occurs when property is stolen. File free tax extension online A condemnation occurs when private property is legally taken for public use without the owner's consent. File free tax extension online A casualty, theft, or condemnation may result in a deductible loss or taxable gain on your federal income tax return. File free tax extension online You may have a deductible loss or a taxable gain even if only a portion of your property was affected by a casualty, theft, or condemnation. File free tax extension online An involuntary conversion occurs when you receive money or other property as reimbursement for a casualty, theft, condemnation, disposition of property under threat of condemnation, or certain other events discussed in this chapter. File free tax extension online If an involuntary conversion results in a gain and you buy qualified replacement property within the specified replacement period, you can postpone reporting the gain on your income tax return. File free tax extension online For more information, see Postponing Gain , later. File free tax extension online Topics - This chapter discusses: Casualties and thefts How to figure a loss or gain Other involuntary conversions Postponing gain Disaster area losses Reporting gains and losses Drought involving property connected with a trade or business or a transaction entered into for profit Useful Items - You may want to see: Publication 523 Selling Your Home 525 Taxable and Nontaxable Income 536 Net Operating Losses (NOLs) for Individuals, Estates, and Trusts 544 Sales and Other Dispositions of Assets 547 Casualties, Disasters, and Thefts 584 Casualty, Disaster, and Theft Loss Workbook (Personal-Use Property) 584-B Business Casualty, Disaster, and Theft Loss Workbook Form (and Instructions) Sch A (Form 1040) Itemized Deductions Sch D (Form 1040) Capital Gains and Losses Sch F (Form 1040) Profit or Loss From Farming 4684 Casualties and Thefts 4797 Sales of Business Property See chapter 16 for information about getting publications and forms. File free tax extension online Casualties and Thefts If your property is destroyed, damaged, or stolen, you may have a deductible loss. File free tax extension online If the insurance or other reimbursement is more than the adjusted basis of the destroyed, damaged, or stolen property, you may have a taxable gain. File free tax extension online Casualty. File free tax extension online   A casualty is the damage, destruction, or loss of property resulting from an identifiable event that is sudden, unexpected, or unusual. File free tax extension online A sudden event is one that is swift, not gradual or progressive. File free tax extension online An unexpected event is one that is ordinarily unanticipated and unintended. File free tax extension online An unusual event is one that is not a day-to-day occurrence and that is not typical of the activity in which you were engaged. File free tax extension online Deductible losses. File free tax extension online   Deductible casualty losses can result from a number of different causes, including the following. File free tax extension online Airplane crashes. File free tax extension online Car, truck, or farm equipment accidents not resulting from your willful act or willful negligence. File free tax extension online Earthquakes. File free tax extension online Fires (but see Nondeductible losses next for exceptions). File free tax extension online Floods. File free tax extension online Freezing. File free tax extension online Government-ordered demolition or relocation of a home that is unsafe to use because of a disaster as discussed under Disaster Area Losses, in Publication 547. File free tax extension online Lightning. File free tax extension online Storms, including hurricanes and tornadoes. File free tax extension online Terrorist attacks. File free tax extension online Vandalism. File free tax extension online Volcanic eruptions. File free tax extension online Nondeductible losses. File free tax extension online   A casualty loss is not deductible if the damage or destruction is caused by the following. File free tax extension online Accidentally breaking articles such as glassware or china under normal conditions. File free tax extension online A family pet (explained below). File free tax extension online A fire if you willfully set it, or pay someone else to set it. File free tax extension online A car, truck, or farm equipment accident if your willful negligence or willful act caused it. File free tax extension online The same is true if the willful act or willful negligence of someone acting for you caused the accident. File free tax extension online Progressive deterioration (explained below). File free tax extension online Family pet. File free tax extension online   Loss of property due to damage by a family pet is not deductible as a casualty loss unless the requirements discussed above under Casualty are met. File free tax extension online Example. File free tax extension online You keep your horse in your yard. File free tax extension online The ornamental fruit trees in your yard were damaged when your horse stripped the bark from them. File free tax extension online Some of the trees were completely girdled and died. File free tax extension online Because the damage was not unexpected or unusual, the loss is not deductible. File free tax extension online Progressive deterioration. File free tax extension online   Loss of property due to progressive deterioration is not deductible as a casualty loss. File free tax extension online This is because the damage results from a steadily operating cause or a normal process, rather than from a sudden event. File free tax extension online Examples of damage due to progressive deterioration include damage from rust, corrosion, or termites. File free tax extension online However, weather-related conditions or disease may cause another type of involuntary conversion. File free tax extension online See Other Involuntary Conversions , later. File free tax extension online Theft. File free tax extension online   A theft is the taking and removing of money or property with the intent to deprive the owner of it. File free tax extension online The taking of property must be illegal under the law of the state where it occurred and it must have been done with criminal intent. File free tax extension online You do not need to show a conviction for theft. File free tax extension online   Theft includes the taking of money or property by the following means: Blackmail, Burglary, Embezzlement, Extortion, Kidnapping for ransom, Larceny, Robbery, or Threats. File free tax extension online The taking of money or property through fraud or misrepresentation is theft if it is illegal under state or local law. File free tax extension online Decline in market value of stock. File free tax extension online   You cannot deduct as a theft loss the decline in market value of stock acquired on the open market for investment if the decline is caused by disclosure of accounting fraud or other illegal misconduct by the officers or directors of the corporation that issued the stock. File free tax extension online However, you can deduct as a capital loss the loss you sustain when you sell or exchange the stock or the stock becomes completely worthless. File free tax extension online You report a capital loss on Schedule D (Form 1040). File free tax extension online For more information about stock sales, worthless stock, and capital losses, see chapter 4 of Publication 550. File free tax extension online Mislaid or lost property. File free tax extension online   The simple disappearance of money or property is not a theft. File free tax extension online However, an accidental loss or disappearance of property can qualify as a casualty if it results from an identifiable event that is sudden, unexpected, or unusual. File free tax extension online Example. File free tax extension online A car door is accidentally slammed on your hand, breaking the setting of your diamond ring. File free tax extension online The diamond falls from the ring and is never found. File free tax extension online The loss of the diamond is a casualty. File free tax extension online Farming Losses You can deduct certain casualty or theft losses that occur in the business of farming. File free tax extension online The following is a discussion of some losses you can deduct and some you cannot deduct. File free tax extension online Livestock or produce bought for resale. File free tax extension online   Casualty or theft losses of livestock or produce bought for resale are deductible if you report your income on the cash method. File free tax extension online If you report your income on an accrual method, take casualty and theft losses on property bought for resale by omitting the item from the closing inventory for the year of the loss. File free tax extension online You cannot take a separate deduction. File free tax extension online Livestock, plants, produce, and crops raised for sale. File free tax extension online   Losses of livestock, plants, produce, and crops raised for sale are generally not deductible if you report your income on the cash method. File free tax extension online You have already deducted the cost of raising these items as farm expenses, so their basis is equal to zero. File free tax extension online   For plants with a preproductive period of more than 2 years, you may have a deductible loss if you have a tax basis in the plants. File free tax extension online You usually have a tax basis if you capitalized the expenses associated with these plants under the uniform capitalization rules. File free tax extension online The uniform capitalization rules are discussed in chapter 6. File free tax extension online   If you report your income on an accrual method, casualty or theft losses are deductible only if you included the items in your inventory at the beginning of your tax year. File free tax extension online You get the deduction by omitting the item from your inventory at the close of your tax year. File free tax extension online You cannot take a separate casualty or theft deduction. File free tax extension online Income loss. File free tax extension online   A loss of future income is not deductible. File free tax extension online Example. File free tax extension online A severe flood destroyed your crops. File free tax extension online Because you are a cash method taxpayer and already deducted the cost of raising the crops as farm expenses, this loss is not deductible, as explained above under Livestock, plants, produce, and crops raised for sale . File free tax extension online You estimate that the crop loss will reduce your farm income by $25,000. File free tax extension online This loss of future income is also not deductible. File free tax extension online Loss of timber. File free tax extension online   If you sell timber downed as a result of a casualty, treat the proceeds from the sale as a reimbursement. File free tax extension online If you use the proceeds to buy qualified replacement property, you can postpone reporting the gain. File free tax extension online See Postponing Gain , later. File free tax extension online Property used in farming. File free tax extension online   Casualty and theft losses of property used in your farm business usually result in deductible losses. File free tax extension online If a fire or storm destroyed your barn, or you lose by casualty or theft an animal you bought for draft, breeding, dairy, or sport, you may have a deductible loss. File free tax extension online See How To Figure a Loss , later. File free tax extension online Raised draft, breeding, dairy, or sporting animals. File free tax extension online   Generally, losses of raised draft, breeding, dairy, or sporting animals do not result in deductible casualty or theft losses because you have no basis in the animals. File free tax extension online However, you may have a basis in the animal and therefore may be able to claim a deduction if either of the following situations applies to you. File free tax extension online You use inventories to determine your income and you included the animals in your inventory. File free tax extension online You capitalized the expenses associated with the animals under the uniform capitalization rules and therefore have a tax basis in the animals subject to a casualty or theft. File free tax extension online When you include livestock in inventory, its last inventory value is its basis. File free tax extension online When you lose an inventoried animal held for draft, breeding, dairy, or sport by casualty or theft during the year, decrease ending inventory by the amount you included in inventory for the animal. File free tax extension online You cannot take a separate deduction. File free tax extension online How To Figure a Loss How you figure a deductible casualty or theft loss depends on whether the loss was to farm or personal-use property and whether the property was stolen or partly or completely destroyed. File free tax extension online Farm property. File free tax extension online   Farm property is the property you use in your farming business. File free tax extension online If your farm property was completely destroyed or stolen, your loss is figured as follows:      Your adjusted basis in the property     MINUS     Any salvage value     MINUS     Any insurance or other reimbursement you  receive or expect to receive      You can use the schedules in Publication 584-B to list your stolen, damaged, or destroyed business property and to figure your loss. File free tax extension online   If your farm property was partially damaged, use the steps shown under Personal-use property next to figure your casualty loss. File free tax extension online However, the deduction limits, discussed later, do not apply to farm property. File free tax extension online Personal-use property. File free tax extension online   Personal-use property is property used by you or your family members for personal purposes and not used in your farm business or for income-producing purposes. File free tax extension online The following items are examples of personal-use property: Your main home. File free tax extension online Furniture and electronics used in your main home and not used in a home office or for business purposes. File free tax extension online Clothing and jewelry. File free tax extension online An automobile used for nonbusiness purposes. File free tax extension online You figure the casualty or theft loss on this property by taking the following steps. File free tax extension online Determine your adjusted basis in the property before the casualty or theft. File free tax extension online Determine the decrease in fair market value of the property as a result of the casualty or theft. File free tax extension online From the smaller of the amounts you determined in (1) and (2), subtract any insurance or other reimbursement you receive or expect to receive. File free tax extension online You must apply the deduction limits, discussed later, to determine your deductible loss. File free tax extension online    You can use Publication 584 to list your stolen or damaged personal-use property and figure your loss. File free tax extension online It includes schedules to help you figure the loss on your home, its contents, and your motor vehicles. File free tax extension online Adjusted basis. File free tax extension online   Adjusted basis is your basis (usually cost) increased or decreased by various events, such as improvements and casualty losses. File free tax extension online For more information about adjusted basis, see chapter 6. File free tax extension online Decrease in fair market value (FMV). File free tax extension online   The decrease in FMV is the difference between the property's value immediately before the casualty or theft and its value immediately afterward. File free tax extension online FMV is defined in chapter 10 under Payments Received or Considered Received . File free tax extension online Appraisal. File free tax extension online   To figure the decrease in FMV because of a casualty or theft, you generally need a competent appraisal. File free tax extension online But other measures, such as the cost of cleaning up or making repairs (discussed next) can be used to establish decreases in FMV. File free tax extension online   An appraisal to determine the difference between the FMV of the property immediately before a casualty or theft and immediately afterward should be made by a competent appraiser. File free tax extension online The appraiser must recognize the effects of any general market decline that may occur along with the casualty. File free tax extension online This information is needed to limit any deduction to the actual loss resulting from damage to the property. File free tax extension online Cost of cleaning up or making repairs. File free tax extension online   The cost of cleaning up after a casualty is not part of a casualty loss. File free tax extension online Neither is the cost of repairing damaged property after a casualty. File free tax extension online But you can use the cost of cleaning up or making repairs after a casualty as a measure of the decrease in FMV if you meet all the following conditions. File free tax extension online The repairs are actually made. File free tax extension online The repairs are necessary to bring the property back to its condition before the casualty. File free tax extension online The amount spent for repairs is not excessive. File free tax extension online The repairs fix the damage only. File free tax extension online The value of the property after the repairs is not, due to the repairs, more than the value of the property before the casualty. File free tax extension online Related expenses. File free tax extension online   The incidental expenses due to a casualty or theft, such as expenses for the treatment of personal injuries, temporary housing, or a rental car, are not part of your casualty or theft loss. File free tax extension online However, they may be deductible as farm business expenses if the damaged or stolen property is farm property. File free tax extension online Separate computations for more than one item of property. File free tax extension online   Generally, if a single casualty or theft involves more than one item of property, you must figure your loss separately for each item of property. File free tax extension online Then combine the losses to determine your total loss. File free tax extension online    There is an exception to this rule for personal-use real property. File free tax extension online See Exception for personal-use real property, later. File free tax extension online Example. File free tax extension online A fire on your farm damaged a tractor and the barn in which it was stored. File free tax extension online The tractor had an adjusted basis of $3,300. File free tax extension online Its FMV was $28,000 just before the fire and $10,000 immediately afterward. File free tax extension online The barn had an adjusted basis of $28,000. File free tax extension online Its FMV was $55,000 just before the fire and $25,000 immediately afterward. File free tax extension online You received insurance reimbursements of $2,100 on the tractor and $26,000 on the barn. File free tax extension online Figure your deductible casualty loss separately for the two items of property. File free tax extension online     Tractor Barn 1) Adjusted basis $3,300 $28,000 2) FMV before fire $28,000 $55,000 3) FMV after fire 10,000 25,000 4) Decrease in FMV  (line 2 − line 3) $18,000 $30,000 5) Loss (lesser of line 1 or line 4) $3,300 $28,000 6) Minus: Insurance 2,100 26,000 7) Deductible casualty loss $1,200 $2,000 8) Total deductible casualty loss $3,200 Exception for personal-use real property. File free tax extension online   In figuring a casualty loss on personal-use real property, the entire property (including any improvements, such as buildings, trees, and shrubs) is treated as one item. File free tax extension online Figure the loss using the smaller of the following. File free tax extension online The decrease in FMV of the entire property. File free tax extension online The adjusted basis of the entire property. File free tax extension online Example. File free tax extension online You bought a farm in 1990 for $160,000. File free tax extension online The adjusted basis of the residential part is now $128,000. File free tax extension online In 2013, a windstorm blew down shade trees and three ornamental trees planted at a cost of $7,500 on the residential part. File free tax extension online The adjusted basis of the residential part includes the $7,500. File free tax extension online The fair market value (FMV) of the residential part immediately before the storm was $400,000, and $385,000 immediately after the storm. File free tax extension online The trees were not covered by insurance. File free tax extension online 1) Adjusted basis $128,000 2) FMV before the storm $400,000 3) FMV after the storm 385,000 4) Decrease in FMV (line 2 − line 3) $15,000 5) Loss before insurance (lesser of line 1 or line 4) $15,000 6) Minus: Insurance -0- 7) Amount of loss $15,000 Insurance and other reimbursements. File free tax extension online   If you receive an insurance or other type of reimbursement, you must subtract the reimbursement when you figure your loss. File free tax extension online You do not have a casualty or theft loss to the extent you are reimbursed. File free tax extension online   If you expect to be reimbursed for part or all of your loss, you must subtract the expected reimbursement when you figure your loss. File free tax extension online You must reduce your loss even if you do not receive payment until a later tax year. File free tax extension online    Do not subtract from your loss any insurance payments you receive for living expenses if you lose the use of your main home or are denied access to it because of a casualty. File free tax extension online You may have to include a portion of these payments in your income. File free tax extension online See Insurance payments for living expenses in Publication 547 for details. File free tax extension online Disaster relief. File free tax extension online   Food, medical supplies, and other forms of assistance you receive do not reduce your casualty loss, unless they are replacements for lost or destroyed property. File free tax extension online Excludable cash gifts you receive also do not reduce your casualty loss if there are no limits on how you can use the money. File free tax extension online   Generally, disaster relief grants received under the Robert T. File free tax extension online Stafford Disaster Relief and Emergency Assistance Act are not included in your income. File free tax extension online See Federal disaster relief grants , later, under Disaster Area Losses . File free tax extension online   Qualified disaster relief payments for expenses you incurred as a result of a federally declared disaster are not taxable income to you. File free tax extension online See Qualified disaster relief payments , later, under Disaster Area Losses . File free tax extension online Reimbursement received after deducting loss. File free tax extension online   If you figure your casualty or theft loss using your expected reimbursement, you may have to adjust your tax return for the tax year in which you get your actual reimbursement. File free tax extension online Actual reimbursement less than expected. File free tax extension online   If you later receive less reimbursement than you expected, include that difference as a loss with your other losses (if any) on your return for the year in which you can reasonably expect no more reimbursement. File free tax extension online Actual reimbursement more than expected. File free tax extension online   If you later receive more reimbursement than you expected after you have claimed a deduction for the loss, you may have to include the extra reimbursement in your income for the year you receive it. File free tax extension online However, if any part of your original deduction did not reduce your tax for the earlier year, do not include that part of the reimbursement in your income. File free tax extension online Do not refigure your tax for the year you claimed the deduction. File free tax extension online See Recoveries in Publication 525 to find out how much extra reimbursement to include in income. File free tax extension online If the total of all the reimbursements you receive is more than your adjusted basis in the destroyed or stolen property, you will have a gain on the casualty or theft. File free tax extension online See Figuring a Gain in Publication 547 for information on how to treat a gain from the reimbursement you receive because of a casualty or theft. File free tax extension online Actual reimbursement same as expected. File free tax extension online   If you receive exactly the reimbursement you expected to receive, you do not have to include any of the reimbursement in your income and you cannot deduct any additional loss. File free tax extension online Lump-sum reimbursement. File free tax extension online   If you have a casualty or theft loss of several assets at the same time without an allocation of reimbursement to specific assets, divide the lump-sum reimbursement among the assets according to the fair market value of each asset at the time of the loss. File free tax extension online Figure the gain or loss separately for each asset that has a separate basis. File free tax extension online Adjustments to basis. File free tax extension online   If you have a casualty or theft loss, you must decrease your basis in the property by any insurance or other reimbursement you receive and by any deductible loss. File free tax extension online The result is your adjusted basis in the property. File free tax extension online Amounts you spend on repairs to restore your property to its pre-casualty condition increase your adjusted basis. File free tax extension online See Adjusted Basis in chapter 6 for more information. File free tax extension online Example. File free tax extension online You built a new silo for $25,000. File free tax extension online This is the basis in your silo because that is the total cost you incurred to build it. File free tax extension online During the year, a tornado damaged your silo and your allowable casualty loss deduction was $1,000. File free tax extension online In addition, your insurance company reimbursed you $4,000 for the damage and you spent $6,000 to restore the silo to its pre-casualty condition. File free tax extension online Your adjusted basis in the silo after the casualty is $26,000 ($25,000 - $1,000 - $4,000 + $6,000). File free tax extension online Deduction Limits on Losses of Personal-Use Property Casualty and theft losses of property held for personal use may be deductible if you itemize deductions on Schedule A (Form 1040). File free tax extension online There are two limits on the deduction for casualty or theft loss of personal-use property. File free tax extension online You figure these limits on Form 4684. File free tax extension online $100 rule. File free tax extension online   You must reduce each casualty or theft loss on personal-use property by $100. File free tax extension online This rule applies after you have subtracted any reimbursement. File free tax extension online 10% rule. File free tax extension online   You must further reduce the total of all your casualty or theft losses on personal-use property by 10% of your adjusted gross income. File free tax extension online Apply this rule after you reduce each loss by $100. File free tax extension online Adjusted gross income is on line 38 of Form 1040. File free tax extension online Example. File free tax extension online In June, you discovered that your house had been burglarized. File free tax extension online Your loss after insurance reimbursement was $2,000. File free tax extension online Your adjusted gross income for the year you discovered the burglary is $57,000. File free tax extension online Figure your theft loss deduction as follows: 1. File free tax extension online Loss after insurance $2,000 2. File free tax extension online Subtract $100 100 3. File free tax extension online Loss after $100 rule $1,900 4. File free tax extension online Subtract 10% (. File free tax extension online 10) × $57,000 AGI $5,700 5. File free tax extension online Theft loss deduction -0- You do not have a theft loss deduction because your loss ($1,900) is less than 10% of your adjusted gross income ($5,700). File free tax extension online    If you have a casualty or theft gain in addition to a loss, you will have to make a special computation before you figure your 10% limit. File free tax extension online See 10% Rule in Publication 547. File free tax extension online When Loss Is Deductible Generally, you can deduct casualty losses that are not reimbursable only in the tax year in which they occur. File free tax extension online You generally can deduct theft losses that are not reimbursable only in the year you discover your property was stolen. File free tax extension online However, losses in federally declared disaster areas are subject to different rules. File free tax extension online See Disaster Area Losses , later, for an exception. File free tax extension online If you are not sure whether part of your casualty or theft loss will be reimbursed, do not deduct that part until the tax year when you become reasonably certain that it will not be reimbursed. File free tax extension online Leased property. File free tax extension online   If you lease property from someone else, you can deduct a loss on the property in the year your liability for the loss is fixed. File free tax extension online This is true even if the loss occurred or the liability was paid in a different year. File free tax extension online You are not entitled to a deduction until your liability under the lease can be determined with reasonable accuracy. File free tax extension online Your liability can be determined when a claim for recovery is settled, adjudicated, or abandoned. File free tax extension online Example. File free tax extension online Robert leased a tractor from First Implement, Inc. File free tax extension online , for use in his farm business. File free tax extension online The tractor was destroyed by a tornado in June 2012. File free tax extension online The loss was not insured. File free tax extension online First Implement billed Robert for the fair market value of the tractor on the date of the loss. File free tax extension online Robert disagreed with the bill and refused to pay it. File free tax extension online First Implement later filed suit in court against Robert. File free tax extension online In 2013, Robert and First Implement agreed to settle the suit for $20,000, and the court entered a judgment in favor of First Implement. File free tax extension online Robert paid $20,000 in June 2013. File free tax extension online He can claim the $20,000 as a loss on his 2013 tax return. File free tax extension online Net operating loss (NOL). File free tax extension online   If your deductions, including casualty or theft loss deductions, are more than your income for the year, you may have an NOL. File free tax extension online An NOL can be carried back or carried forward and deducted from income in other years. File free tax extension online See Publication 536 for more information on NOLs. File free tax extension online Proof of Loss To deduct a casualty or theft loss, you must be able to prove that there was a casualty or theft. File free tax extension online You must have records to support the amount you claim for the loss. File free tax extension online Casualty loss proof. File free tax extension online   For a casualty loss, your records should show all the following information. File free tax extension online The type of casualty (car accident, fire, storm, etc. File free tax extension online ) and when it occurred. File free tax extension online That the loss was a direct result of the casualty. File free tax extension online That you were the owner of the property or, if you leased the property from someone else, that you were contractually liable to the owner for the damage. File free tax extension online Whether a claim for reimbursement exists for which there is a reasonable expectation of recovery. File free tax extension online Theft loss proof. File free tax extension online   For a theft loss, your records should show all the following information. File free tax extension online When you discovered your property was missing. File free tax extension online That your property was stolen. File free tax extension online That you were the owner of the property. File free tax extension online Whether a claim for reimbursement exists for which there is a reasonable expectation of recovery. File free tax extension online Figuring a Gain A casualty or theft may result in a taxable gain. File free tax extension online If you receive an insurance payment or other reimbursement that is more than your adjusted basis in the destroyed, damaged, or stolen property, you have a gain from the casualty or theft. File free tax extension online You generally report your gain as income in the year you receive the reimbursement. File free tax extension online However, depending on the type of property you receive, you may not have to report your gain. File free tax extension online See Postponing Gain , later. File free tax extension online Your gain is figured as follows: The amount you receive, minus Your adjusted basis in the property at the time of the casualty or theft. File free tax extension online Even if the decrease in FMV of your property is smaller than the adjusted basis of your property, use your adjusted basis to figure the gain. File free tax extension online Amount you receive. File free tax extension online   The amount you receive includes any money plus the value of any property you receive, minus any expenses you have in obtaining reimbursement. File free tax extension online It also includes any reimbursement used to pay off a mortgage or other lien on the damaged, destroyed, or stolen property. File free tax extension online Example. File free tax extension online A tornado severely damaged your barn. File free tax extension online The adjusted basis of the barn was $25,000. File free tax extension online Your insurance company reimbursed you $40,000 for the damaged barn. File free tax extension online However, you had legal expenses of $2,000 to collect that insurance. File free tax extension online Your insurance minus your expenses to collect the insurance is more than your adjusted basis in the barn, so you have a gain. File free tax extension online 1) Insurance reimbursement $40,000 2) Legal expenses 2,000 3) Amount received  (line 1 − line 2) $38,000 4) Adjusted basis 25,000 5) Gain on casualty (line 3 − line 4) $13,000 Other Involuntary Conversions In addition to casualties and thefts, other events cause involuntary conversions of property. File free tax extension online Some of these are discussed in the following paragraphs. File free tax extension online Gain or loss from an involuntary conversion of your property is usually recognized for tax purposes. File free tax extension online You report the gain or deduct the loss on your tax return for the year you realize it. File free tax extension online However, depending on the type of property you receive, you may not have to report your gain on the involuntary conversion. File free tax extension online See Postponing Gain , later. File free tax extension online Condemnation Condemnation is the process by which private property is legally taken for public use without the owner's consent. File free tax extension online The property may be taken by the federal government, a state government, a political subdivision, or a private organization that has the power to legally take property. File free tax extension online The owner receives a condemnation award (money or property) in exchange for the property taken. File free tax extension online A condemnation is a forced sale, the owner being the seller and the condemning authority being the buyer. File free tax extension online Threat of condemnation. File free tax extension online   Treat the sale of your property under threat of condemnation as a condemnation, provided you have reasonable grounds to believe that your property will be condemned. File free tax extension online Main home condemned. File free tax extension online   If you have a gain because your main home is condemned, you generally can exclude the gain from your income as if you had sold or exchanged your home. File free tax extension online For information on this exclusion, see Publication 523. File free tax extension online If your gain is more than the amount you can exclude, but you buy replacement property, you may be able to postpone reporting the excess gain. File free tax extension online See Postponing Gain , later. File free tax extension online (You cannot deduct a loss from the condemnation of your main home. File free tax extension online ) More information. File free tax extension online   For information on how to figure the gain or loss on condemned property, see chapter 1 in Publication 544. File free tax extension online Also see Postponing Gain , later, to find out if you can postpone reporting the gain. File free tax extension online Irrigation Project The sale or other disposition of property located within an irrigation project to conform to the acreage limits of federal reclamation laws is an involuntary conversion. File free tax extension online Livestock Losses Diseased livestock. File free tax extension online   If your livestock die from disease, or are destroyed, sold, or exchanged because of disease, even though the disease is not of epidemic proportions, treat these occurrences as involuntary conversions. File free tax extension online If the livestock were raised or purchased for resale, follow the rules for livestock discussed earlier under Farming Losses . File free tax extension online Otherwise, figure the gain or loss from these conversions using the rules discussed under Determining Gain or Loss in chapter 8. File free tax extension online If you replace the livestock, you may be able to postpone reporting the gain. File free tax extension online See Postponing Gain below. File free tax extension online Reporting dispositions of diseased livestock. File free tax extension online   If you choose to postpone reporting gain on the disposition of diseased livestock, you must attach a statement to your return explaining that the livestock were disposed of because of disease. File free tax extension online You must also include other information on this statement. File free tax extension online See How To Postpone Gain , later, under Postponing Gain . File free tax extension online Weather-related sales of livestock. File free tax extension online   If you sell or exchange livestock (other than poultry) held for draft, breeding, or dairy purposes solely because of drought, flood, or other weather-related conditions, treat the sale or exchange as an involuntary conversion. File free tax extension online Only livestock sold in excess of the number you normally would sell under usual business practice, in the absence of weather-related conditions, are considered involuntary conversions. File free tax extension online Figure the gain or loss using the rules discussed under Determining Gain or Loss in chapter 8. File free tax extension online If you replace the livestock, you may be able to postpone reporting the gain. File free tax extension online See Postponing Gain below. File free tax extension online Example. File free tax extension online It is your usual business practice to sell five of your dairy animals during the year. File free tax extension online This year you sold 20 dairy animals because of drought. File free tax extension online The sale of 15 animals is treated as an involuntary conversion. File free tax extension online    If you do not replace the livestock, you may be able to report the gain in the following year's income. File free tax extension online This rule also applies to other livestock (including poultry). File free tax extension online See Sales Caused by Weather-Related Conditions in chapter 3. File free tax extension online Tree Seedlings If, because of an abnormal drought, the failure of planted tree seedlings is greater than normally anticipated, you may have a deductible loss. File free tax extension online Treat the loss as a loss from an involuntary conversion. File free tax extension online The loss equals the previously capitalized reforestation costs you had to duplicate on replanting. File free tax extension online You deduct the loss on the return for the year the seedlings died. File free tax extension online Postponing Gain Do not report a gain if you receive reimbursement in the form of property similar or related in service or use to the destroyed, stolen, or other involuntarily converted property. File free tax extension online Your basis in the new property is generally the same as your adjusted basis in the property it replaces. File free tax extension online You must ordinarily report the gain on your stolen, destroyed, or other involuntarily converted property if you receive money or unlike property as reimbursement. File free tax extension online However, you can choose to postpone reporting the gain if you purchase replacement property similar or related in service or use to your destroyed, stolen, or other involuntarily converted property within a specific replacement period. File free tax extension online If you have a gain on damaged property, you can postpone reporting the gain if you spend the reimbursement to restore the property. File free tax extension online To postpone reporting all the gain, the cost of your replacement property must be at least as much as the reimbursement you receive. File free tax extension online If the cost of the replacement property is less than the reimbursement, you must include the gain in your income up to the amount of the unspent reimbursement. File free tax extension online Example 1. File free tax extension online In 1985, you constructed a barn to store farm equipment at a cost of $20,000. File free tax extension online In 1987, you added a silo to the barn at a cost of $15,000 to store grain. File free tax extension online In May of this year, the property was worth $100,000. File free tax extension online In June the barn and silo were destroyed by a tornado. File free tax extension online At the time of the tornado, you had an adjusted basis of $0 in the property. File free tax extension online You received $85,000 from the insurance company. File free tax extension online You had a gain of $85,000 ($85,000 – $0). File free tax extension online You spent $80,000 to rebuild the barn and silo. File free tax extension online Since this is less than the insurance proceeds received, you must include $5,000 ($85,000 – $80,000) in your income. File free tax extension online Example 2. File free tax extension online In 1970, you bought a cabin in the mountains for your personal use at a cost of $18,000. File free tax extension online You made no further improvements or additions to it. File free tax extension online When a storm destroyed the cabin this January, the cabin was worth $250,000. File free tax extension online You received $146,000 from the insurance company in March. File free tax extension online You had a gain of $128,000 ($146,000 − $18,000). File free tax extension online You spent $144,000 to rebuild the cabin. File free tax extension online Since this is less than the insurance proceeds received, you must include $2,000 ($146,000 − $144,000) in your income. File free tax extension online Buying replacement property from a related person. File free tax extension online   You cannot postpone reporting a gain from a casualty, theft, or other involuntary conversion if you buy the replacement property from a related person (discussed later). File free tax extension online This rule applies to the following taxpayers. File free tax extension online C corporations. File free tax extension online Partnerships in which more than 50% of the capital or profits interest is owned by C corporations. File free tax extension online Individuals, partnerships (other than those in (2) above), and S corporations if the total realized gain for the tax year on all involuntarily converted properties on which there are realized gains is more than $100,000. File free tax extension online For involuntary conversions described in (3) above, gains cannot be offset by any losses when determining whether the total gain is more than $100,000. File free tax extension online If the property is owned by a partnership, the $100,000 limit applies to the partnership and each partner. File free tax extension online If the property is owned by an S corporation, the $100,000 limit applies to the S corporation and each shareholder. File free tax extension online Exception. File free tax extension online   This rule does not apply if the related person acquired the property from an unrelated person within the period of time allowed for replacing the involuntarily converted property. File free tax extension online Related persons. File free tax extension online   Under this rule, related persons include, for example, a parent and child, a brother and sister, a corporation and an individual who owns more than 50% of its outstanding stock, and two partnerships in which the same C corporations own more than 50% of the capital or profits interests. File free tax extension online For more information on related persons, see Nondeductible Loss under Sales and Exchanges Between Related Persons in chapter 2 of Publication 544. File free tax extension online Death of a taxpayer. File free tax extension online   If a taxpayer dies after having a gain, but before buying replacement property, the gain must be reported for the year in which the decedent realized the gain. File free tax extension online The executor of the estate or the person succeeding to the funds from the involuntary conversion cannot postpone reporting the gain by buying replacement property. File free tax extension online Replacement Property You must buy replacement property for the specific purpose of replacing your property. File free tax extension online Your replacement property must be similar or related in service or use to the property it replaces. File free tax extension online You do not have to use the same funds you receive as reimbursement for your old property to acquire the replacement property. File free tax extension online If you spend the money you receive for other purposes, and borrow money to buy replacement property, you can still choose to postpone reporting the gain if you meet the other requirements. File free tax extension online Property you acquire by gift or inheritance does not qualify as replacement property. File free tax extension online Owner-user. File free tax extension online   If you are an owner-user, similar or related in service or use means that replacement property must function in the same way as the property it replaces. File free tax extension online Examples of property that functions in the same way as the property it replaces are a home that replaces another home, a dairy cow that replaces another dairy cow, and farm land that replaces other farm land. File free tax extension online A grinding mill that replaces a tractor does not qualify. File free tax extension online Neither does a breeding or draft animal that replaces a dairy cow. File free tax extension online Soil or other environmental contamination. File free tax extension online   If, because of soil or other environmental contamination, it is not feasible for you to reinvest your insurance money or other proceeds from destroyed or damaged livestock in property similar or related in service or use to the livestock, you can treat other property (including real property) used for farming purposes, as property similar or related in service or use to the destroyed or damaged livestock. File free tax extension online Weather-related conditions. File free tax extension online   If, because of drought, flood, or other weather-related conditions, it is not feasible for you to reinvest the insurance money or other proceeds in property similar or related in service or use to the livestock, you can treat other property (excluding real property) used for farming purposes, as property similar or related in service or use to the livestock you disposed of. File free tax extension online Example. File free tax extension online Each year you normally sell 25 cows from your beef herd. File free tax extension online However, this year you had to sell 50 cows. File free tax extension online This is because a severe drought significantly reduced the amount of hay and pasture yield needed to feed your herd for the rest of the year. File free tax extension online Because, as a result of the severe drought, it is not feasible for you to use the proceeds from selling the extra cows to buy new cows, you can treat other property (excluding real property) used for farming purposes, as property similar or related in service or use to the cows you sold. File free tax extension online Standing crop destroyed by casualty. File free tax extension online   If a storm or other casualty destroyed your standing crop and you use the insurance money to acquire either another standing crop or a harvested crop, this purchase qualifies as replacement property. File free tax extension online The costs of planting and raising a new crop qualify as replacement costs for the destroyed crop only if you use the crop method of accounting (discussed in chapter 2). File free tax extension online In that case, the costs of bringing the new crop to the same level of maturity as the destroyed crop qualify as replacement costs to the extent they are incurred during the replacement period. File free tax extension online Timber loss. File free tax extension online   Standing timber you bought with the proceeds from the sale of timber downed as a result of a casualty, such as high winds, earthquakes, or volcanic eruptions, qualifies as replacement property. File free tax extension online If you bought the standing timber within the replacement period, you can postpone reporting the gain. File free tax extension online Business or income-producing property located in a federally declared disaster area. File free tax extension online   If your destroyed business or income-producing property was located in a federally declared disaster area, any tangible replacement property you acquire for use in any business is treated as similar or related in service or use to the destroyed property. File free tax extension online For more information, see Disaster Area Losses in Publication 547. File free tax extension online Substituting replacement property. File free tax extension online   Once you have acquired qualified replacement property that you designate as replacement property in a statement attached to your tax return, you cannot substitute other qualified replacement property. File free tax extension online This is true even if you acquire the other property within the replacement period. File free tax extension online However, if you discover that the original replacement property was not qualified replacement property, you can, within the replacement period, substitute the new qualified replacement property. File free tax extension online Basis of replacement property. File free tax extension online   You must reduce the basis of your replacement property (its cost) by the amount of postponed gain. File free tax extension online In this way, tax on the gain is postponed until you dispose of the replacement property. File free tax extension online Replacement Period To postpone reporting your gain, you must buy replacement property within a specified period of time. File free tax extension online This is the replacement period. File free tax extension online The replacement period begins on the date your property was damaged, destroyed, stolen, sold, or exchanged. File free tax extension online The replacement period generally ends 2 years after the close of the first tax year in which you realize any part of your gain from the involuntary conversion. File free tax extension online Example. File free tax extension online You are a calendar year taxpayer. File free tax extension online While you were on vacation, farm equipment that cost $2,200 was stolen from your farm. File free tax extension online You discovered the theft when you returned to your farm on November 11, 2012. File free tax extension online Your insurance company investigated the theft and did not settle your claim until January 5, 2013, when they paid you $3,000. File free tax extension online You first realized a gain from the reimbursement for the theft during 2013, so you have until December 31, 2015, to replace the property. File free tax extension online Main home in disaster area. File free tax extension online   For your main home (or its contents) located in a federally declared disaster area, the replacement period ends 4 years after the close of the first tax year in which you realize any part of your gain from the involuntary conversion. File free tax extension online See Disaster Area Losses , later. File free tax extension online Property in the Midwestern disaster areas. File free tax extension online   For property located in the Midwestern disaster areas (defined in Table 4 in the 2008 Publication 547) that was destroyed, damaged, stolen, or condemned, the replacement period ends 5 years after the close of the first tax year in which any part of your gain is realized. File free tax extension online This 5-year replacement period applies only if substantially all of the use of the replacement property is in the Midwestern disaster areas. File free tax extension online Property in the Kansas disaster area. File free tax extension online   For property located in the Kansas disaster area that was destroyed, damaged, stolen, or condemned after May 3, 2007, as a result of the Kansas storms and tornadoes, the replacement period ends 5 years after the close of the first tax year in which any part of your gain is realized. File free tax extension online This 5-year replacement period applies only if substantially all of the use of the replacement property is in the Kansas disaster area. File free tax extension online Property in the Hurricane Katrina disaster area. File free tax extension online   For property located in the Hurricane Katrina disaster area that was destroyed, damaged, stolen, or condemned after August 24, 2005, as a result of Hurricane Katrina, the replacement period ends 5 years after the close of the first tax year in which any part of your gain is realized. File free tax extension online This 5-year replacement period applies only if substantially all of the use of the replacement property is in the Hurricane Katrina disaster area. File free tax extension online Weather-related sales of livestock in an area eligible for federal assistance. File free tax extension online   For the sale or exchange of livestock due to drought, flood, or other weather-related conditions in an area eligible for federal assistance, the replacement period ends 4 years after the close of the first tax year in which you realize any part of your gain from the sale or exchange. File free tax extension online The IRS may extend the replacement period on a regional basis if the weather-related conditions continue for longer than 3 years. File free tax extension online   For information on extensions of the replacement period because of persistent drought, see Notice 2006-82, 2006-39 I. File free tax extension online R. File free tax extension online B. File free tax extension online 529, available at  www. File free tax extension online irs. File free tax extension online gov/irb/2006-39_IRB/ar11. File free tax extension online html. File free tax extension online For a list of counties for which exceptional, extreme, or severe drought was reported during the 12 months ending August 31, 2013, see Notice 2013-62, available at IRS. File free tax extension online gov. File free tax extension online Condemnation. File free tax extension online   The replacement period for a condemnation begins on the earlier of the following dates. File free tax extension online The date on which you disposed of the condemned property. File free tax extension online The date on which the threat of condemnation began. File free tax extension online The replacement period generally ends 2 years after the close of the first tax year in which any part of the gain on the condemnation is realized. File free tax extension online But see Main home in disaster area , Property in the Midwestern disaster areas , Property in the Kansas disaster area , and Property in the Hurricane Katrina disaster area , earlier, for exceptions. File free tax extension online Business or investment real property. File free tax extension online   If real property held for use in a trade or business or for investment (not including property held primarily for sale) is condemned, the replacement period ends 3 years after the close of the first tax year in which any part of the gain on the condemnation is realized. File free tax extension online Extension. File free tax extension online   You can apply for an extension of the replacement period. File free tax extension online Send your written application to the Internal Revenue Service Center where you file your tax return. File free tax extension online See your tax return instructions for the address. File free tax extension online Include all the details about your need for an extension. File free tax extension online Make your application before the end of the replacement period. File free tax extension online However, you can file an application within a reasonable time after the replacement period ends if you can show a good reason for the delay. File free tax extension online You will get an extension of the replacement period if you can show reasonable cause for not making the replacement within the regular period. File free tax extension online How To Postpone Gain You postpone reporting your gain by reporting your choice on your tax return for the year you have the gain. File free tax extension online You have the gain in the year you receive insurance proceeds or other reimbursements that result in a gain. File free tax extension online Required statement. File free tax extension online   You should attach a statement to your return for the year you have the gain. File free tax extension online This statement should include all the following information. File free tax extension online The date and details of the casualty, theft, or other involuntary conversion. File free tax extension online The insurance or other reimbursement you received. File free tax extension online How you figured the gain. File free tax extension online Replacement property acquired before return filed. File free tax extension online   If you acquire replacement property before you file your return for the year you have the gain, your statement should also include detailed information about all the following items. File free tax extension online The replacement property. File free tax extension online The postponed gain. File free tax extension online The basis adjustment that reflects the postponed gain. File free tax extension online Any gain you are reporting as income. File free tax extension online Replacement property acquired after return filed. File free tax extension online   If you intend to buy replacement property after you file your return for the year you realize gain, your statement should also say that you are choosing to replace the property within the required replacement period. File free tax extension online   You should then attach another statement to your return for the year in which you buy the replacement property. File free tax extension online This statement should contain detailed information on the replacement property. File free tax extension online If you acquire part of your replacement property in one year and part in another year, you must attach a statement to each year's return. File free tax extension online Include in the statement detailed information on the replacement property bought in that year. File free tax extension online Reporting weather-related sales of livestock. File free tax extension online   If you choose to postpone reporting the gain on weather-related sales or exchanges of livestock, show all the following information on a statement attached to your return for the tax year in which you first realize any of the gain. File free tax extension online Evidence of the weather-related conditions that forced the sale or exchange of the livestock. File free tax extension online The gain realized on the sale or exchange. File free tax extension online The number and kind of livestock sold or exchanged. File free tax extension online The number of livestock of each kind you would have sold or exchanged under your usual business practice. File free tax extension online   Show all the following information and the preceding information on the return for the year in which you replace the livestock. File free tax extension online The dates you bought the replacement property. File free tax extension online The cost of the replacement property. File free tax extension online Description of the replacement property (for example, the number and kind of the replacement livestock). File free tax extension online Amended return. File free tax extension online   You must file an amended return (Form 1040X) for the tax year of the gain in either of the following situations. File free tax extension online You do not acquire replacement property within the replacement period, plus extensions. File free tax extension online On this amended return, you must report the gain and pay any additional tax due. File free tax extension online You acquire replacement property within the required replacement period, plus extensions, but at a cost less than the amount you receive from the casualty, theft, or other involuntary conversion. File free tax extension online On this amended return, you must report the part of the gain that cannot be postponed and pay any additional tax due. File free tax extension online Disaster Area Losses Special rules apply to federally declared disaster area losses. File free tax extension online A federally declared disaster is a disaster that occurred in an area declared by the President to be eligible for federal assistance under the Robert T. File free tax extension online Stafford Disaster Relief and Emergency Assistance Act. File free tax extension online It includes a major disaster or emergency declaration under the act. File free tax extension online A list of the areas warranting public or individual assistance (or both) under the Act is available at the Federal Emergency Management Agency (FEMA) web site at www. File free tax extension online fema. File free tax extension online gov. File free tax extension online This part discusses the special rules for when to deduct a disaster area loss and what tax deadlines may be postponed. File free tax extension online For other special rules, see Disaster Area Losses in Publication 547. File free tax extension online When to deduct the loss. File free tax extension online   You generally must deduct a casualty loss in the year it occurred. File free tax extension online However, if you have a deductible loss from a disaster that occurred in an area warranting public or individual assistance (or both), you can choose to deduct that loss on your return or amended return for the tax year immediately preceding the tax year in which the disaster happened. File free tax extension online If you make this choice, the loss is treated as having occurred in the preceding year. File free tax extension online    Claiming a qualifying disaster loss on the previous year's return may result in a lower tax for that year, often producing or increasing a cash refund. File free tax extension online   You must make the choice to take your casualty loss for the disaster in the preceding year by the later of the following dates. File free tax extension online The due date (without extensions) for filing your tax return for the tax year in which the disaster actually occurred. File free tax extension online The due date (with extensions) for the return for the preceding tax year. File free tax extension online Federal disaster relief grants. File free tax extension online   Do not include post-disaster relief grants received under the Robert T. File free tax extension online Stafford Disaster Relief and Emergency Assistance Act in your income if the grant payments are made to help you meet necessary expenses or serious needs for medical, dental, housing, personal property, transportation, or funeral expenses. File free tax extension online Do not deduct casualty losses or medical expenses to the extent they are specifically reimbursed by these disaster relief grants. File free tax extension online If the casualty loss was specifically reimbursed by the grant and you received the grant after the year in which you deducted the casualty loss, see Reimbursement received after deducting loss , earlier. File free tax extension online Unemployment assistance payments under the Act are taxable unemployment compensation. File free tax extension online Qualified disaster relief payments. File free tax extension online   Qualified disaster relief payments are not included in the income of individuals to the extent any expenses compensated by these payments are not otherwise compensated for by insurance or other reimbursement. File free tax extension online These payments are not subject to income tax, self-employment tax, or employment taxes (social security, Medicare, and federal unemployment taxes). File free tax extension online No withholding applies to these payments. File free tax extension online   Qualified disaster relief payments include payments you receive (regardless of the source) for the following expenses. File free tax extension online Reasonable and necessary personal, family, living, or funeral expenses incurred as a result of a federally declared disaster. File free tax extension online Reasonable and necessary expenses incurred for the repair or rehabilitation of a personal residence due to a federally declared disaster. File free tax extension online (A personal residence can be a rented residence or one you own. File free tax extension online ) Reasonable and necessary expenses incurred for the repair or replacement of the contents of a personal residence due to a federally declared disaster. File free tax extension online   Qualified disaster relief payments include amounts paid by a federal, state, or local government in connection with a federally declared disaster to individuals affected by the disaster. File free tax extension online    Qualified disaster relief payments do not include: Payments for expenses otherwise paid for by insurance or other reimbursements, or Income replacement payments, such as payments of lost wages, lost business income, or unemployment compensation. File free tax extension online Qualified disaster mitigation payments. File free tax extension online   Qualified disaster mitigation payments made under the Robert T. File free tax extension online Stafford Disaster Relief and Emergency Assistance Act or the National Flood Insurance Act (as in effect on April 15, 2005) are not included in income. File free tax extension online These are payments you, as a property owner, receive to reduce the risk of future damage to your property. File free tax extension online You cannot increase your basis in property, or take a deduction or credit, for expenditures made with respect to those payments. File free tax extension online Sale of property under hazard mitigation program. File free tax extension online   Generally, if you sell or otherwise transfer property, you must recognize any gain or loss for tax purposes unless the property is your main home. File free tax extension online You report the gain or deduct the loss on your tax return for the year you realize it. File free tax extension online (You cannot deduct a loss on personal-use property unless the loss resulted from a casualty, as discussed earlier. File free tax extension online ) However, if you sell or otherwise transfer property to the Federal Government, a state or local government, or an Indian tribal government under a hazard mitigation program, you can choose to postpone reporting the gain if you buy qualifying replacement property within a certain period of time. File free tax extension online See Postponing Gain , earlier, for the rules that apply. File free tax extension online Other federal assistance programs. File free tax extension online    For more information about other federal assistance programs, see Crop Insurance and Crop Disaster Payments and Feed Assistance and Payments in chapter 3 earlier. File free tax extension online Postponed tax deadlines. File free tax extension online   The IRS may postpone for up to 1 year certain tax deadlines of taxpayers who are affected by a federally declared disaster. File free tax extension online The tax deadlines the IRS may postpone include those for filing income, excise, and employment tax returns, paying income, excise, and employment taxes, and making contributions to a traditional IRA or Roth IRA. File free tax extension online   If any tax deadline is postponed, the IRS will publicize the postponement in your area and publish a news release, revenue ruling, revenue procedure, notice, announcement, or other guidance in the Internal Revenue Bulletin (IRB). File free tax extension online Go to http://www. File free tax extension online irs. File free tax extension online gov/uac/Tax-Relief-in-Disaster-Situations to find out if a tax deadline has been postponed for your area. File free tax extension online Who is eligible. File free tax extension online   If the IRS postpones a tax deadline, the following taxpayers are eligible for the postponement. File free tax extension online Any individual whose main home is located in a covered disaster area (defined next). File free tax extension online Any business entity or sole proprietor whose principal place of business is located in a covered disaster area. File free tax extension online Any individual who is a relief worker affiliated with a recognized government or philanthropic organization and who is assisting in a covered disaster area. File free tax extension online Any individual, business entity, or sole proprietorship whose records are needed to meet a postponed tax deadline, provided those records are maintained in a covered disaster area. File free tax extension online The main home or principal place of business does not have to be located in the covered disaster area. File free tax extension online Any estate or trust that has tax records necessary to meet a postponed tax deadline, provided those records are maintained in a covered disaster area. File free tax extension online The spouse on a joint return with a taxpayer who is eligible for postponements. File free tax extension online Any individual, business entity, or sole proprietorship not located in a covered disaster area, but whose necessary records to meet a postponed tax deadline are located in the covered disaster area. File free tax extension online Any individual visiting the covered disaster area who was killed or injured as a result of the disaster. File free tax extension online Any other person determined by the IRS to be affected by a federally declared disaster. File free tax extension online Covered disaster area. File free tax extension online   This is an area of a federally declared disaster area in which the IRS has decided to postpone tax deadlines for up to 1 year. File free tax extension online Abatement of interest and penalties. File free tax extension online   The IRS may abate the interest and penalties on the underpaid income tax for the length of any postponement of tax deadlines. File free tax extension online Reporting Gains and Losses You will have to file one or more of the following forms to report your gains or losses from involuntary conversions. File free tax extension online Form 4684. File free tax extension online   Use this form to report your gains and losses from casualties and thefts. File free tax extension online Form 4797. File free tax extension online   Use this form to report involuntary conversions (other than from casualty or theft) of property used in your trade or business and capital assets held in connection with a trade or business or a transaction entered into for profit. File free tax extension online Also use this form if you have a gain from a casualty or theft on trade, business or income-producing property held for more than 1 year and you have to recapture some or all of your gain as ordinary income. File free tax extension online Form 8949. File free tax extension online   Use this form to report gain from an involuntary conversion (other than from casualty or theft) of personal-use property. File free tax extension online Schedule A (Form 1040). File free tax extension online   Use this form to deduct your losses from casualties and thefts of personal-use property and income-producing property, that you reported on Form 4684. File free tax extension online Schedule D (Form 1040). File free tax extension online   Use this form to carry over the following gains. File free tax extension online Net gain shown on Form 4797 from an involuntary conversion of business property held for more than 1 year. File free tax extension online Net gain shown on Form 4684 from the casualty or theft of personal-use property. File free tax extension online    Also use this form to figure the overall gain or loss from transactions reported on Form 8949. File free tax extension online Schedule F (Form 1040). File free tax extension online   Use this form to deduct your losses from casualty or theft of livestock or produce bought for sale under Other expenses in Part II, line 32, if you use the cash method of accounting and have not otherwise deducted these losses. File free tax extension online Prev  Up  Next   Home   More Online Publications