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File state tax only for free 2. File state tax only for free   Ordinary or Capital Gain or Loss Table of Contents IntroductionSection 1231 transactions. File state tax only for free Topics - This chapter discusses: Useful Items - You may want to see: Capital Assets Noncapital AssetsCommodities derivative dealer. File state tax only for free Sales and Exchanges Between Related PersonsGain Is Ordinary Income Nondeductible Loss Other DispositionsSale of a Business Dispositions of Intangible Property Subdivision of Land Timber Precious Metals and Stones, Stamps, and Coins Coal and Iron Ore Conversion Transactions Introduction You must classify your gains and losses as either ordinary or capital (and your capital gains or losses as either short-term or long-term). File state tax only for free You must do this to figure your net capital gain or loss. File state tax only for free For individuals, a net capital gain may be taxed at a different tax rate than ordinary income. File state tax only for free See Capital Gains Tax Rates in chapter 4. File state tax only for free Your deduction for a net capital loss may be limited. File state tax only for free See Treatment of Capital Losses in chapter 4. File state tax only for free Capital gain or loss. File state tax only for free   Generally, you will have a capital gain or loss if you sell or exchange a capital asset. File state tax only for free You also may have a capital gain if your section 1231 transactions result in a net gain. File state tax only for free Section 1231 transactions. File state tax only for free   Section 1231 transactions are sales and exchanges of property held longer than 1 year and either used in a trade or business or held for the production of rents or royalties. File state tax only for free They also include certain involuntary conversions of business or investment property, including capital assets. File state tax only for free See Section 1231 Gains and Losses in chapter 3 for more information. File state tax only for free Topics - This chapter discusses: Capital assets Noncapital assets Sales and exchanges between  related persons Other dispositions Useful Items - You may want to see: Publication 550 Investment Income and Expenses Form (and Instructions) Schedule D (Form 1040) Capital Gains and Losses 4797 Sales of Business Property 8594 Asset Acquisition Statement Under Section 1060 8949 Sales and Other Dispositions of Capital Assets See chapter 5 for information about getting publications and forms. File state tax only for free Capital Assets Almost everything you own and use for personal purposes, pleasure, or investment is a capital asset. File state tax only for free For exceptions, see Noncapital Assets, later. File state tax only for free The following items are examples of capital assets. File state tax only for free Stocks and bonds. File state tax only for free A home owned and occupied by you and your family. File state tax only for free Timber grown on your home property or investment property, even if you make casual sales of the timber. File state tax only for free Household furnishings. File state tax only for free A car used for pleasure or commuting. File state tax only for free Coin or stamp collections. File state tax only for free Gems and jewelry. File state tax only for free Gold, silver, and other metals. File state tax only for free Personal-use property. File state tax only for free   Generally, property held for personal use is a capital asset. File state tax only for free Gain from a sale or exchange of that property is a capital gain. File state tax only for free Loss from the sale or exchange of that property is not deductible. File state tax only for free You can deduct a loss relating to personal-use property only if it results from a casualty or theft. File state tax only for free Investment property. File state tax only for free   Investment property (such as stocks and bonds) is a capital asset, and a gain or loss from its sale or exchange is a capital gain or loss. File state tax only for free This treatment does not apply to property used to produce rental income. File state tax only for free See Business assets, later, under Noncapital Assets. File state tax only for free Release of restriction on land. File state tax only for free   Amounts you receive for the release of a restrictive covenant in a deed to land are treated as proceeds from the sale of a capital asset. File state tax only for free Noncapital Assets A noncapital asset is property that is not a capital asset. File state tax only for free The following kinds of property are not capital assets. File state tax only for free Stock in trade, inventory, and other property you hold mainly for sale to customers in your trade or business. File state tax only for free Inventories are discussed in Publication 538, Accounting Periods and Methods. File state tax only for free But, see the Tip below. File state tax only for free Accounts or notes receivable acquired in the ordinary course of a trade or business for services rendered or from the sale of any properties described in (1), above. File state tax only for free Depreciable property used in your trade or business or as rental property (including section 197 intangibles defined later), even if the property is fully depreciated (or amortized). File state tax only for free Sales of this type of property are discussed in chapter 3. File state tax only for free Real property used in your trade or business or as rental property, even if the property is fully depreciated. File state tax only for free A copyright; a literary, musical, or artistic composition; a letter; a memorandum; or similar property (such as drafts of speeches, recordings, transcripts, manuscripts, drawings, or photographs): Created by your personal efforts, Prepared or produced for you (in the case of a letter, memorandum, or similar property), or Received from a person who created the property or for whom the property was prepared under circumstances (for example, by gift) entitling you to the basis of the person who created the property, or for whom it was prepared or produced. File state tax only for free But, see the Tip below. File state tax only for free U. File state tax only for free S. File state tax only for free Government publications you got from the government for free or for less than the normal sales price or that you acquired under circumstances entitling you to the basis of someone who got the publications for free or for less than the normal sales price. File state tax only for free Any commodities derivative financial instrument (discussed later) held by a commodities derivatives dealer unless it meets both of the following requirements. File state tax only for free It is established to the satisfaction of the IRS that the instrument has no connection to the activities of the dealer as a dealer. File state tax only for free The instrument is clearly identified in the dealer's records as meeting (a) by the end of the day on which it was acquired, originated, or entered into. File state tax only for free Any hedging transaction (defined later) that is clearly identified as a hedging transaction by the end of the day on which it was acquired, originated, or entered into. File state tax only for free Supplies of a type you regularly use or consume in the ordinary course of your trade or business. File state tax only for free You can elect to treat as capital assets certain self-created musical compositions or copyrights you sold or exchanged. File state tax only for free See chapter 4 of Publication 550 for details. File state tax only for free Property held mainly for sale to customers. File state tax only for free   Stock in trade, inventory, and other property you hold mainly for sale to customers in your trade or business are not capital assets. File state tax only for free Inventories are discussed in Publication 538. File state tax only for free Business assets. File state tax only for free   Real property and depreciable property used in your trade or business or as rental property (including section 197 intangibles defined later under Dispositions of Intangible Property) are not capital assets. File state tax only for free The sale or disposition of business property is discussed in chapter 3. File state tax only for free Letters and memoranda. File state tax only for free   Letters, memoranda, and similar property (such as drafts of speeches, recordings, transcripts, manuscripts, drawings, or photographs) are not treated as capital assets (as discussed earlier) if your personal efforts created them or if they were prepared or produced for you. File state tax only for free Nor is this property a capital asset if your basis in it is determined by reference to the person who created it or the person for whom it was prepared. File state tax only for free For this purpose, letters and memoranda addressed to you are considered prepared for you. File state tax only for free If letters or memoranda are prepared by persons under your administrative control, they are considered prepared for you whether or not you review them. File state tax only for free Commodities derivative financial instrument. File state tax only for free   A commodities derivative financial instrument is a commodities contract or other financial instrument for commodities (other than a share of corporate stock, a beneficial interest in a partnership or trust, a note, bond, debenture, or other evidence of indebtedness, or a section 1256 contract) the value or settlement price of which is calculated or determined by reference to a specified index (as defined in section 1221(b) of the Internal Revenue Code). File state tax only for free Commodities derivative dealer. File state tax only for free   A commodities derivative dealer is a person who regularly offers to enter into, assume, offset, assign, or terminate positions in commodities derivative financial instruments with customers in the ordinary course of a trade or business. File state tax only for free Hedging transaction. File state tax only for free   A hedging transaction is any transaction you enter into in the normal course of your trade or business primarily to manage any of the following. File state tax only for free Risk of price changes or currency fluctuations involving ordinary property you hold or will hold. File state tax only for free Risk of interest rate or price changes or currency fluctuations for borrowings you make or will make, or ordinary obligations you incur or will incur. File state tax only for free Sales and Exchanges Between Related Persons This section discusses the rules that may apply to the sale or exchange of property between related persons. File state tax only for free If these rules apply, gains may be treated as ordinary income and losses may not be deductible. File state tax only for free See Transfers to Spouse in chapter 1 for rules that apply to spouses. File state tax only for free Gain Is Ordinary Income If a gain is recognized on the sale or exchange of property to a related person, the gain may be ordinary income even if the property is a capital asset. File state tax only for free It is ordinary income if the sale or exchange is a depreciable property transaction or a controlled partnership transaction. File state tax only for free Depreciable property transaction. File state tax only for free   Gain on the sale or exchange of property, including a leasehold or a patent application, that is depreciable property in the hands of the person who receives it is ordinary income if the transaction is either directly or indirectly between any of the following pairs of entities. File state tax only for free A person and the person's controlled entity or entities. File state tax only for free A taxpayer and any trust in which the taxpayer (or his or her spouse) is a beneficiary unless the beneficiary's interest in the trust is a remote contingent interest; that is, the value of the interest computed actuarially is 5% or less of the value of the trust property. File state tax only for free An executor and a beneficiary of an estate unless the sale or exchange is in satisfaction of a pecuniary bequest (a bequest for a sum of money). File state tax only for free An employer (or any person related to the employer under rules (1), (2), or (3)) and a welfare benefit fund (within the meaning of section 419(e) of the Internal Revenue Code) that is controlled directly or indirectly by the employer (or any person related to the employer). File state tax only for free Controlled entity. File state tax only for free   A person's controlled entity is either of the following. File state tax only for free A corporation in which more than 50% of the value of all outstanding stock, or a partnership in which more than 50% of the capital interest or profits interest, is directly or indirectly owned by or for that person. File state tax only for free An entity whose relationship with that person is one of the following. File state tax only for free A corporation and a partnership if the same persons own more than 50% in value of the outstanding stock of the corporation and more than 50% of the capital interest or profits interest in the partnership. File state tax only for free Two corporations that are members of the same controlled group as defined in section 1563(a) of the Internal Revenue Code, except that “more than 50%” is substituted for “at least 80%” in that definition. File state tax only for free Two S corporations, if the same persons own more than 50% in value of the outstanding stock of each corporation. File state tax only for free Two corporations, one of which is an S corporation, if the same persons own more than 50% in value of the outstanding stock of each corporation. File state tax only for free Controlled partnership transaction. File state tax only for free   A gain recognized in a controlled partnership transaction may be ordinary income. File state tax only for free The gain is ordinary income if it results from the sale or exchange of property that, in the hands of the party who receives it, is a noncapital asset such as trade accounts receivable, inventory, stock in trade, or depreciable or real property used in a trade or business. File state tax only for free   A controlled partnership transaction is a transaction directly or indirectly between either of the following pairs of entities. File state tax only for free A partnership and a person who directly or indirectly owns more than 50% of the capital interest or profits interest in the partnership. File state tax only for free Two partnerships, if the same persons directly or indirectly own more than 50% of the capital interests or profits interests in both partnerships. File state tax only for free Determining ownership. File state tax only for free   In the transactions under Depreciable property transaction and Controlled partnership transaction, earlier, use the following rules to determine the ownership of stock or a partnership interest. File state tax only for free Stock or a partnership interest directly or indirectly owned by or for a corporation, partnership, estate, or trust is considered owned proportionately by or for its shareholders, partners, or beneficiaries. File state tax only for free (However, for a partnership interest owned by or for a C corporation, this applies only to shareholders who directly or indirectly own 5% or more in value of the stock of the corporation. File state tax only for free ) An individual is considered as owning the stock or partnership interest directly or indirectly owned by or for his or her family. File state tax only for free Family includes only brothers, sisters, half-brothers, half-sisters, spouse, ancestors, and lineal descendants. File state tax only for free For purposes of applying (1) or (2), above, stock or a partnership interest constructively owned by a person under (1) is treated as actually owned by that person. File state tax only for free But stock or a partnership interest constructively owned by an individual under (2) is not treated as owned by the individual for reapplying (2) to make another person the constructive owner of that stock or partnership interest. File state tax only for free Nondeductible Loss A loss on the sale or exchange of property between related persons is not deductible. File state tax only for free This applies to both direct and indirect transactions, but not to distributions of property from a corporation in a complete liquidation. File state tax only for free For the list of related persons, see Related persons next. File state tax only for free If a sale or exchange is between any of these related persons and involves the lump-sum sale of a number of blocks of stock or pieces of property, the gain or loss must be figured separately for each block of stock or piece of property. File state tax only for free The gain on each item is taxable. File state tax only for free The loss on any item is nondeductible. File state tax only for free Gains from the sales of any of these items may not be offset by losses on the sales of any of the other items. File state tax only for free Related persons. File state tax only for free   The following is a list of related persons. File state tax only for free Members of a family, including only brothers, sisters, half-brothers, half-sisters, spouse, ancestors (parents, grandparents, etc. File state tax only for free ), and lineal descendants (children, grandchildren, etc. File state tax only for free ). File state tax only for free An individual and a corporation if the individual directly or indirectly owns more than 50% in value of the outstanding stock of the corporation. File state tax only for free Two corporations that are members of the same controlled group as defined in section 267(f) of the Internal Revenue Code. File state tax only for free A trust fiduciary and a corporation if the trust or the grantor of the trust directly or indirectly owns more than 50% in value of the outstanding stock of the corporation. File state tax only for free A grantor and fiduciary, and the fiduciary and beneficiary, of any trust. File state tax only for free Fiduciaries of two different trusts, and the fiduciary and beneficiary of two different trusts, if the same person is the grantor of both trusts. File state tax only for free A tax-exempt educational or charitable organization and a person who directly or indirectly controls the organization, or a member of that person's family. File state tax only for free A corporation and a partnership if the same persons own more than 50% in value of the outstanding stock of the corporation and more than 50% of the capital interest or profits interest in the partnership. File state tax only for free Two S corporations if the same persons own more than 50% in value of the outstanding stock of each corporation. File state tax only for free Two corporations, one of which is an S corporation, if the same persons own more than 50% in value of the outstanding stock of each corporation. File state tax only for free An executor and a beneficiary of an estate unless the sale or exchange is in satisfaction of a pecuniary bequest. File state tax only for free Two partnerships if the same persons directly or indirectly own more than 50% of the capital interests or profits interests in both partnerships. File state tax only for free A person and a partnership if the person directly or indirectly owns more than 50% of the capital interest or profits interest in the partnership. File state tax only for free Partnership interests. File state tax only for free   The nondeductible loss rule does not apply to a sale or exchange of an interest in the partnership between the related persons described in (12) or (13) above. File state tax only for free Controlled groups. File state tax only for free   Losses on transactions between members of the same controlled group described in (3) earlier are deferred rather than denied. File state tax only for free   For more information, see section 267(f) of the Internal Revenue Code. File state tax only for free Ownership of stock or partnership interests. File state tax only for free   In determining whether an individual directly or indirectly owns any of the outstanding stock of a corporation or an interest in a partnership for a loss on a sale or exchange, the following rules apply. File state tax only for free Stock or a partnership interest directly or indirectly owned by or for a corporation, partnership, estate, or trust is considered owned proportionately by or for its shareholders, partners, or beneficiaries. File state tax only for free (However, for a partnership interest owned by or for a C corporation, this applies only to shareholders who directly or indirectly own 5% or more in value of the stock of the corporation. File state tax only for free ) An individual is considered as owning the stock or partnership interest directly or indirectly owned by or for his or her family. File state tax only for free Family includes only brothers, sisters, half-brothers, half-sisters, spouse, ancestors, and lineal descendants. File state tax only for free An individual owning (other than by applying (2)) any stock in a corporation is considered to own the stock directly or indirectly owned by or for his or her partner. File state tax only for free For purposes of applying (1), (2), or (3), stock or a partnership interest constructively owned by a person under (1) is treated as actually owned by that person. File state tax only for free But stock or a partnership interest constructively owned by an individual under (2) or (3) is not treated as owned by the individual for reapplying either (2) or (3) to make another person the constructive owner of that stock or partnership interest. File state tax only for free Indirect transactions. File state tax only for free   You cannot deduct your loss on the sale of stock through your broker if under a prearranged plan a related person or entity buys the same stock you had owned. File state tax only for free This does not apply to a cross-trade between related parties through an exchange that is purely coincidental and is not prearranged. File state tax only for free Property received from a related person. File state tax only for free   If, in a purchase or exchange, you received property from a related person who had a loss that was not allowable and you later sell or exchange the property at a gain, you recognize the gain only to the extent it is more than the loss previously disallowed to the related person. File state tax only for free This rule applies only to the original transferee. File state tax only for free Example 1. File state tax only for free Your brother sold stock to you for $7,600. File state tax only for free His cost basis was $10,000. File state tax only for free His loss of $2,400 was not deductible. File state tax only for free You later sell the same stock to an unrelated party for $10,500, realizing a gain of $2,900 ($10,500 − $7,600). File state tax only for free Your recognized gain is only $500, the gain that is more than the $2,400 loss not allowed to your brother. File state tax only for free Example 2. File state tax only for free Assume the same facts as in Example 1, except that you sell the stock for $6,900 instead of $10,500. File state tax only for free Your recognized loss is only $700 ($7,600 − $6,900). File state tax only for free You cannot deduct the loss not allowed to your brother. File state tax only for free Other Dispositions This section discusses rules for determining the treatment of gain or loss from various dispositions of property. File state tax only for free Sale of a Business The sale of a business usually is not a sale of one asset. File state tax only for free Instead, all the assets of the business are sold. File state tax only for free Generally, when this occurs, each asset is treated as being sold separately for determining the treatment of gain or loss. File state tax only for free A business usually has many assets. File state tax only for free When sold, these assets must be classified as capital assets, depreciable property used in the business, real property used in the business, or property held for sale to customers, such as inventory or stock in trade. File state tax only for free The gain or loss on each asset is figured separately. File state tax only for free The sale of capital assets results in capital gain or loss. File state tax only for free The sale of real property or depreciable property used in the business and held longer than 1 year results in gain or loss from a section 1231 transaction (discussed in chapter 3). File state tax only for free The sale of inventory results in ordinary income or loss. File state tax only for free Partnership interests. File state tax only for free   An interest in a partnership or joint venture is treated as a capital asset when sold. File state tax only for free The part of any gain or loss from unrealized receivables or inventory items will be treated as ordinary gain or loss. File state tax only for free For more information, see Disposition of Partner's Interest in Publication 541. File state tax only for free Corporation interests. File state tax only for free   Your interest in a corporation is represented by stock certificates. File state tax only for free When you sell these certificates, you usually realize capital gain or loss. File state tax only for free For information on the sale of stock, see chapter 4 in Publication 550. File state tax only for free Corporate liquidations. File state tax only for free   Corporate liquidations of property generally are treated as a sale or exchange. File state tax only for free Gain or loss generally is recognized by the corporation on a liquidating sale of its assets. File state tax only for free Gain or loss generally is recognized also on a liquidating distribution of assets as if the corporation sold the assets to the distributee at fair market value. File state tax only for free   In certain cases in which the distributee is a corporation in control of the distributing corporation, the distribution may not be taxable. File state tax only for free For more information, see section 332 of the Internal Revenue Code and the related regulations. File state tax only for free Allocation of consideration paid for a business. File state tax only for free   The sale of a trade or business for a lump sum is considered a sale of each individual asset rather than of a single asset. File state tax only for free Except for assets exchanged under any nontaxable exchange rules, both the buyer and seller of a business must use the residual method (explained later) to allocate the consideration to each business asset transferred. File state tax only for free This method determines gain or loss from the transfer of each asset and how much of the consideration is for goodwill and certain other intangible property. File state tax only for free It also determines the buyer's basis in the business assets. File state tax only for free Consideration. File state tax only for free   The buyer's consideration is the cost of the assets acquired. File state tax only for free The seller's consideration is the amount realized (money plus the fair market value of property received) from the sale of assets. File state tax only for free Residual method. File state tax only for free   The residual method must be used for any transfer of a group of assets that constitutes a trade or business and for which the buyer's basis is determined only by the amount paid for the assets. File state tax only for free This applies to both direct and indirect transfers, such as the sale of a business or the sale of a partnership interest in which the basis of the buyer's share of the partnership assets is adjusted for the amount paid under section 743(b) of the Internal Revenue Code. File state tax only for free Section 743(b) applies if a partnership has an election in effect under section 754 of the Internal Revenue Code. File state tax only for free   A group of assets constitutes a trade or business if either of the following applies. File state tax only for free Goodwill or going concern value could, under any circumstances, attach to them. File state tax only for free The use of the assets would constitute an active trade or business under section 355 of the Internal Revenue Code. File state tax only for free   The residual method provides for the consideration to be reduced first by the amount of Class I assets (defined below). File state tax only for free The consideration remaining after this reduction must be allocated among the various business assets in a certain order. File state tax only for free See Classes of assets next for the complete order. File state tax only for free Classes of assets. File state tax only for free   The following definitions are the classifications for deemed or actual asset acquisitions. File state tax only for free Allocate the consideration among the assets in the following order. File state tax only for free The amount allocated to an asset, other than a Class VII asset, cannot exceed its fair market value on the purchase date. File state tax only for free The amount you can allocate to an asset also is subject to any applicable limits under the Internal Revenue Code or general principles of tax law. File state tax only for free Class I assets are cash and general deposit accounts (including checking and savings accounts but excluding certificates of deposit). File state tax only for free Class II assets are certificates of deposit, U. File state tax only for free S. File state tax only for free Government securities, foreign currency, and actively traded personal property, including stock and securities. File state tax only for free Class III assets are accounts receivable, other debt instruments, and assets that you mark to market at least annually for federal income tax purposes. File state tax only for free However, see section 1. File state tax only for free 338-6(b)(2)(iii) of the regulations for exceptions that apply to debt instruments issued by persons related to a target corporation, contingent debt instruments, and debt instruments convertible into stock or other property. File state tax only for free Class IV assets are property of a kind that would properly be included in inventory if on hand at the end of the tax year or property held by the taxpayer primarily for sale to customers in the ordinary course of business. File state tax only for free Class V assets are all assets other than Class I, II, III, IV, VI, and VII assets. File state tax only for free    Note. File state tax only for free Furniture and fixtures, buildings, land, vehicles, and equipment, which constitute all or part of a trade or business are generally Class V assets. File state tax only for free Class VI assets are section 197 intangibles (other than goodwill and going concern value). File state tax only for free Class VII assets are goodwill and going concern value (whether the goodwill or going concern value qualifies as a section 197 intangible). File state tax only for free   If an asset described in one of the classifications described above can be included in more than one class, include it in the lower numbered class. File state tax only for free For example, if an asset is described in both Class II and Class IV, choose Class II. File state tax only for free Example. File state tax only for free The total paid in the sale of the assets of Company SKB is $21,000. File state tax only for free No cash or deposit accounts or similar accounts were sold. File state tax only for free The company's U. File state tax only for free S. File state tax only for free Government securities sold had a fair market value of $3,200. File state tax only for free The only other asset transferred (other than goodwill and going concern value) was inventory with a fair market value of $15,000. File state tax only for free Of the $21,000 paid for the assets of Company SKB, $3,200 is allocated to U. File state tax only for free S. File state tax only for free Government securities, $15,000 to inventory assets, and the remaining $2,800 to goodwill and going concern value. File state tax only for free Agreement. File state tax only for free   The buyer and seller may enter into a written agreement as to the allocation of any consideration or the fair market value of any of the assets. File state tax only for free This agreement is binding on both parties unless the IRS determines the amounts are not appropriate. File state tax only for free Reporting requirement. File state tax only for free   Both the buyer and seller involved in the sale of business assets must report to the IRS the allocation of the sales price among section 197 intangibles and the other business assets. File state tax only for free Use Form 8594, Asset Acquisition Statement Under Section 1060, to provide this information. File state tax only for free Generally, the buyer and seller should each attach Form 8594 to their federal income tax return for the year in which the sale occurred. File state tax only for free See the Instructions for Form 8594. File state tax only for free Dispositions of Intangible Property Intangible property is any personal property that has value but cannot be seen or touched. File state tax only for free It includes such items as patents, copyrights, and the goodwill value of a business. File state tax only for free Gain or loss on the sale or exchange of amortizable or depreciable intangible property held longer than 1 year (other than an amount recaptured as ordinary income) is a section 1231 gain or loss. File state tax only for free The treatment of section 1231 gain or loss and the recapture of amortization and depreciation as ordinary income are explained in chapter 3. File state tax only for free See chapter 8 of Publication 535, Business Expenses, for information on amortizable intangible property and chapter 1 of Publication 946, How To Depreciate Property, for information on intangible property that can and cannot be depreciated. File state tax only for free Gain or loss on dispositions of other intangible property is ordinary or capital depending on whether the property is a capital asset or a noncapital asset. File state tax only for free The following discussions explain special rules that apply to certain dispositions of intangible property. File state tax only for free Section 197 Intangibles Section 197 intangibles are certain intangible assets acquired after August 10, 1993 (after July 25, 1991, if chosen), and held in connection with the conduct of a trade or business or an activity entered into for profit whose costs are amortized over 15 years. File state tax only for free They include the following assets. File state tax only for free Goodwill. File state tax only for free Going concern value. File state tax only for free Workforce in place. File state tax only for free Business books and records, operating systems, and other information bases. File state tax only for free Patents, copyrights, formulas, processes, designs, patterns, know how, formats, and similar items. File state tax only for free Customer-based intangibles. File state tax only for free Supplier-based intangibles. File state tax only for free Licenses, permits, and other rights granted by a governmental unit. File state tax only for free Covenants not to compete entered into in connection with the acquisition of a business. File state tax only for free Franchises, trademarks, and trade names. File state tax only for free See chapter 8 of Publication 535 for a description of each intangible. File state tax only for free Dispositions. File state tax only for free   You cannot deduct a loss from the disposition or worthlessness of a section 197 intangible you acquired in the same transaction (or series of related transactions) as another section 197 intangible you still hold. File state tax only for free Instead, you must increase the adjusted basis of your retained section 197 intangible by the nondeductible loss. File state tax only for free If you retain more than one section 197 intangible, increase each intangible's adjusted basis. File state tax only for free Figure the increase by multiplying the nondeductible loss by a fraction, the numerator (top number) of which is the retained intangible's adjusted basis on the date of the loss and the denominator (bottom number) of which is the total adjusted basis of all retained intangibles on the date of the loss. File state tax only for free   In applying this rule, members of the same controlled group of corporations and commonly controlled businesses are treated as a single entity. File state tax only for free For example, a corporation cannot deduct a loss on the sale of a section 197 intangible if, after the sale, a member of the same controlled group retains other section 197 intangibles acquired in the same transaction as the intangible sold. File state tax only for free Covenant not to compete. File state tax only for free   A covenant not to compete (or similar arrangement) that is a section 197 intangible cannot be treated as disposed of or worthless before you have disposed of your entire interest in the trade or business for which the covenant was entered into. File state tax only for free Members of the same controlled group of corporations and commonly controlled businesses are treated as a single entity in determining whether a member has disposed of its entire interest in a trade or business. File state tax only for free Anti-churning rules. File state tax only for free   Anti-churning rules prevent a taxpayer from converting section 197 intangibles that do not qualify for amortization into property that would qualify for amortization. File state tax only for free However, these rules do not apply to part of the basis of property acquired by certain related persons if the transferor elects to do both the following. File state tax only for free Recognize gain on the transfer of the property. File state tax only for free Pay income tax on the gain at the highest tax rate. File state tax only for free   If the transferor is a partnership or S corporation, the partnership or S corporation (not the partners or shareholders) can make the election. File state tax only for free But each partner or shareholder must pay the tax on his or her share of gain. File state tax only for free   To make the election, you, as the transferor, must attach a statement containing certain information to your income tax return for the year of the transfer. File state tax only for free You must file the tax return by the due date (including extensions). File state tax only for free You must also notify the transferee of the election in writing by the due date of the return. File state tax only for free   If you timely filed your return without making the election, you can make the election by filing an amended return within 6 months after the due date of the return (excluding extensions). File state tax only for free Attach the statement to the amended return and write “Filed pursuant to section 301. File state tax only for free 9100-2” at the top of the statement. File state tax only for free File the amended return at the same address the original return was filed. File state tax only for free For more information about making the election, see Regulations section 1. File state tax only for free 197-2(h)(9). File state tax only for free For information about reporting the tax on your income tax return, see the Instructions for Form 4797. File state tax only for free Patents The transfer of a patent by an individual is treated as a sale or exchange of a capital asset held longer than 1 year. File state tax only for free This applies even if the payments for the patent are made periodically during the transferee's use or are contingent on the productivity, use, or disposition of the patent. File state tax only for free For information on the treatment of gain or loss on the transfer of capital assets, see chapter 4. File state tax only for free This treatment applies to your transfer of a patent if you meet all the following conditions. File state tax only for free You are the holder of the patent. File state tax only for free You transfer the patent other than by gift, inheritance, or devise. File state tax only for free You transfer all substantial rights to the patent or an undivided interest in all such rights. File state tax only for free You do not transfer the patent to a related person. File state tax only for free Holder. File state tax only for free   You are the holder of a patent if you are either of the following. File state tax only for free The individual whose effort created the patent property and who qualifies as the original and first inventor. File state tax only for free The individual who bought an interest in the patent from the inventor before the invention was tested and operated successfully under operating conditions and who is neither related to, nor the employer of, the inventor. File state tax only for free All substantial rights. File state tax only for free   All substantial rights to patent property are all rights that have value when they are transferred. File state tax only for free A security interest (such as a lien), or a reservation calling for forfeiture for nonperformance, is not treated as a substantial right for these rules and may be kept by you as the holder of the patent. File state tax only for free   All substantial rights to a patent are not transferred if any of the following apply to the transfer. File state tax only for free The rights are limited geographically within a country. File state tax only for free The rights are limited to a period less than the remaining life of the patent. File state tax only for free The rights are limited to fields of use within trades or industries and are less than all the rights that exist and have value at the time of the transfer. File state tax only for free The rights are less than all the claims or inventions covered by the patent that exist and have value at the time of the transfer. File state tax only for free Related persons. File state tax only for free   This tax treatment does not apply if the transfer is directly or indirectly between you and a related person as defined earlier in the list under Nondeductible Loss, with the following changes. File state tax only for free Members of your family include your spouse, ancestors, and lineal descendants, but not your brothers, sisters, half-brothers, or half-sisters. File state tax only for free Substitute “25% or more” ownership for “more than 50%. File state tax only for free ”   If you fit within the definition of a related person independent of family status, the brother-sister exception in (1), earlier, does not apply. File state tax only for free For example, a transfer between a brother and a sister as beneficiary and fiduciary of the same trust is a transfer between related persons. File state tax only for free The brother-sister exception does not apply because the trust relationship is independent of family status. File state tax only for free Franchise, Trademark, or Trade Name If you transfer or renew a franchise, trademark, or trade name for a price contingent on its productivity, use, or disposition, the amount you receive generally is treated as an amount realized from the sale of a noncapital asset. File state tax only for free A franchise includes an agreement that gives one of the parties the right to distribute, sell, or provide goods, services, or facilities within a specified area. File state tax only for free Significant power, right, or continuing interest. File state tax only for free   If you keep any significant power, right, or continuing interest in the subject matter of a franchise, trademark, or trade name that you transfer or renew, the amount you receive is ordinary royalty income rather than an amount realized from a sale or exchange. File state tax only for free   A significant power, right, or continuing interest in a franchise, trademark, or trade name includes, but is not limited to, the following rights in the transferred interest. File state tax only for free A right to disapprove any assignment of the interest, or any part of it. File state tax only for free A right to end the agreement at will. File state tax only for free A right to set standards of quality for products used or sold, or for services provided, and for the equipment and facilities used to promote such products or services. File state tax only for free A right to make the recipient sell or advertise only your products or services. File state tax only for free A right to make the recipient buy most supplies and equipment from you. File state tax only for free A right to receive payments based on the productivity, use, or disposition of the transferred item of interest if those payments are a substantial part of the transfer agreement. File state tax only for free Subdivision of Land If you own a tract of land and, to sell or exchange it, you subdivide it into individual lots or parcels, the gain normally is ordinary income. File state tax only for free However, you may receive capital gain treatment on at least part of the proceeds provided you meet certain requirements. File state tax only for free See section 1237 of the Internal Revenue Code. File state tax only for free Timber Standing timber held as investment property is a capital asset. File state tax only for free Gain or loss from its sale is reported as a capital gain or loss on Form 8949, and Schedule D (Form 1040), as applicable. File state tax only for free If you held the timber primarily for sale to customers, it is not a capital asset. File state tax only for free Gain or loss on its sale is ordinary business income or loss. File state tax only for free It is reported in the gross receipts or sales and cost of goods sold items of your return. File state tax only for free Farmers who cut timber on their land and sell it as logs, firewood, or pulpwood usually have no cost or other basis for that timber. File state tax only for free These sales constitute a very minor part of their farm businesses. File state tax only for free In these cases, amounts realized from such sales, and the expenses of cutting, hauling, etc. File state tax only for free , are ordinary farm income and expenses reported on Schedule F (Form 1040), Profit or Loss From Farming. File state tax only for free Different rules apply if you owned the timber longer than 1 year and elect to either: Treat timber cutting as a sale or exchange, or Enter into a cutting contract. File state tax only for free Timber is considered cut on the date when, in the ordinary course of business, the quantity of felled timber is first definitely determined. File state tax only for free This is true whether the timber is cut under contract or whether you cut it yourself. File state tax only for free Under the rules discussed below, disposition of the timber is treated as a section 1231 transaction. File state tax only for free See chapter 3. File state tax only for free Gain or loss is reported on Form 4797. File state tax only for free Christmas trees. File state tax only for free   Evergreen trees, such as Christmas trees, that are more than 6 years old when severed from their roots and sold for ornamental purposes are included in the term timber. File state tax only for free They qualify for both rules discussed below. File state tax only for free Election to treat cutting as a sale or exchange. File state tax only for free   Under the general rule, the cutting of timber results in no gain or loss. File state tax only for free It is not until a sale or exchange occurs that gain or loss is realized. File state tax only for free But if you owned or had a contractual right to cut timber, you can elect to treat the cutting of timber as a section 1231 transaction in the year the timber is cut. File state tax only for free Even though the cut timber is not actually sold or exchanged, you report your gain or loss on the cutting for the year the timber is cut. File state tax only for free Any later sale results in ordinary business income or loss. File state tax only for free See Example, later. File state tax only for free   To elect this treatment, you must: Own or hold a contractual right to cut the timber for a period of more than 1 year before it is cut, and Cut the timber for sale or for use in your trade or business. File state tax only for free Making the election. File state tax only for free   You make the election on your return for the year the cutting takes place by including in income the gain or loss on the cutting and including a computation of the gain or loss. File state tax only for free You do not have to make the election in the first year you cut timber. File state tax only for free You can make it in any year to which the election would apply. File state tax only for free If the timber is partnership property, the election is made on the partnership return. File state tax only for free This election cannot be made on an amended return. File state tax only for free   Once you have made the election, it remains in effect for all later years unless you cancel it. File state tax only for free   If you previously elected to treat the cutting of timber as a sale or exchange, you may revoke this election without the consent of the IRS. File state tax only for free The prior election (and revocation) is disregarded for purposes of making a subsequent election. File state tax only for free See Form T (Timber), Forest Activities Schedule, for more information. File state tax only for free Gain or loss. File state tax only for free   Your gain or loss on the cutting of standing timber is the difference between its adjusted basis for depletion and its fair market value on the first day of your tax year in which it is cut. File state tax only for free   Your adjusted basis for depletion of cut timber is based on the number of units (feet board measure, log scale, or other units) of timber cut during the tax year and considered to be sold or exchanged. File state tax only for free Your adjusted basis for depletion is also based on the depletion unit of timber in the account used for the cut timber, and should be figured in the same manner as shown in section 611 of the Internal Revenue Code and the related regulations. File state tax only for free   Timber depletion is discussed in chapter 9 of Publication 535. File state tax only for free Example. File state tax only for free In April 2013, you had owned 4,000 MBF (1,000 board feet) of standing timber longer than 1 year. File state tax only for free It had an adjusted basis for depletion of $40 per MBF. File state tax only for free You are a calendar year taxpayer. File state tax only for free On January 1, 2013, the timber had a fair market value (FMV) of $350 per MBF. File state tax only for free It was cut in April for sale. File state tax only for free On your 2013 tax return, you elect to treat the cutting of the timber as a sale or exchange. File state tax only for free You report the difference between the fair market value and your adjusted basis for depletion as a gain. File state tax only for free This amount is reported on Form 4797 along with your other section 1231 gains and losses to figure whether it is treated as capital gain or as ordinary gain. File state tax only for free You figure your gain as follows. File state tax only for free FMV of timber January 1, 2013 $1,400,000 Minus: Adjusted basis for depletion 160,000 Section 1231 gain $1,240,000 The fair market value becomes your basis in the cut timber and a later sale of the cut timber including any by-product or tree tops will result in ordinary business income or loss. File state tax only for free Outright sales of timber. File state tax only for free   Outright sales of timber by landowners qualify for capital gains treatment using rules similar to the rules for certain disposal of timber under a contract with retained economic interest (defined below). File state tax only for free However, for outright sales, the date of disposal is not deemed to be the date the timber is cut because the landowner can elect to treat the payment date as the date of disposal (see below). File state tax only for free Cutting contract. File state tax only for free   You must treat the disposal of standing timber under a cutting contract as a section 1231 transaction if all the following apply to you. File state tax only for free You are the owner of the timber. File state tax only for free You held the timber longer than 1 year before its disposal. File state tax only for free You kept an economic interest in the timber. File state tax only for free   You have kept an economic interest in standing timber if, under the cutting contract, the expected return on your investment is conditioned on the cutting of the timber. File state tax only for free   The difference between the amount realized from the disposal of the timber and its adjusted basis for depletion is treated as gain or loss on its sale. File state tax only for free Include this amount on Form 4797 along with your other section 1231 gains or losses to figure whether it is treated as capital or ordinary gain or loss. File state tax only for free Date of disposal. File state tax only for free   The date of disposal is the date the timber is cut. File state tax only for free However, for outright sales by landowners or if you receive payment under the contract before the timber is cut, you can elect to treat the date of payment as the date of disposal. File state tax only for free   This election applies only to figure the holding period of the timber. File state tax only for free It has no effect on the time for reporting gain or loss (generally when the timber is sold or exchanged). File state tax only for free   To make this election, attach a statement to the tax return filed by the due date (including extensions) for the year payment is received. File state tax only for free The statement must identify the advance payments subject to the election and the contract under which they were made. File state tax only for free   If you timely filed your return for the year you received payment without making the election, you still can make the election by filing an amended return within 6 months after the due date for that year's return (excluding extensions). File state tax only for free Attach the statement to the amended return and write “Filed pursuant to section 301. File state tax only for free 9100-2” at the top of the statement. File state tax only for free File the amended return at the same address the original return was filed. File state tax only for free Owner. File state tax only for free   The owner of timber is any person who owns an interest in it, including a sublessor and the holder of a contract to cut the timber. File state tax only for free You own an interest in timber if you have the right to cut it for sale on your own account or for use in your business. File state tax only for free Tree stumps. File state tax only for free   Tree stumps are a capital asset if they are on land held by an investor who is not in the timber or stump business as a buyer, seller, or processor. File state tax only for free Gain from the sale of stumps sold in one lot by such a holder is taxed as a capital gain. File state tax only for free However, tree stumps held by timber operators after the saleable standing timber was cut and removed from the land are considered by-products. File state tax only for free Gain from the sale of stumps in lots or tonnage by such operators is taxed as ordinary income. File state tax only for free   See Form T (Timber) and its separate instructions for more information about dispositions of timber. File state tax only for free Precious Metals and Stones, Stamps, and Coins Gold, silver, gems, stamps, coins, etc. File state tax only for free , are capital assets except when they are held for sale by a dealer. File state tax only for free Any gain or loss from their sale or exchange generally is a capital gain or loss. File state tax only for free If you are a dealer, the amount received from the sale is ordinary business income. File state tax only for free Coal and Iron Ore You must treat the disposal of coal (including lignite) or iron ore mined in the United States as a section 1231 transaction if both the following apply to you. File state tax only for free You owned the coal or iron ore longer than 1 year before its disposal. File state tax only for free You kept an economic interest in the coal or iron ore. File state tax only for free For this rule, the date the coal or iron ore is mined is considered the date of its disposal. File state tax only for free Your gain or loss is the difference between the amount realized from disposal of the coal or iron ore and the adjusted basis you use to figure cost depletion (increased by certain expenses not allowed as deductions for the tax year). File state tax only for free This amount is included on Form 4797 along with your other section 1231 gains and losses. File state tax only for free You are considered an owner if you own or sublet an economic interest in the coal or iron ore in place. File state tax only for free If you own only an option to buy the coal in place, you do not qualify as an owner. File state tax only for free In addition, this gain or loss treatment does not apply to income realized by an owner who is a co-adventurer, partner, or principal in the mining of coal or iron ore. File state tax only for free The expenses of making and administering the contract under which the coal or iron ore was disposed of and the expenses of preserving the economic interest kept under the contract are not allowed as deductions in figuring taxable income. File state tax only for free Rather, their total, along with the adjusted depletion basis, is deducted from the amount received to determine gain. File state tax only for free If the total of these expenses plus the adjusted depletion basis is more than the amount received, the result is a loss. File state tax only for free Special rule. File state tax only for free   The above treatment does not apply if you directly or indirectly dispose of the iron ore or coal to any of the following persons. File state tax only for free A related person whose relationship to you would result in the disallowance of a loss (see Nondeductible Loss under Sales and Exchanges Between Related Persons, earlier). File state tax only for free An individual, trust, estate, partnership, association, company, or corporation owned or controlled directly or indirectly by the same interests that own or control your business. File state tax only for free Conversion Transactions Recognized gain on the disposition or termination of any position held as part of certain conversion transactions is treated as ordinary income. File state tax only for free This applies if substantially all your expected return is attributable to the time value of your net investment (like interest on a loan) and the transaction is any of the following. File state tax only for free An applicable straddle (generally, any set of offsetting positions with respect to personal property, including stock). File state tax only for free A transaction in which you acquire property and, at or about the same time, you contract to sell the same or substantially identical property at a specified price. File state tax only for free Any other transaction that is marketed and sold as producing capital gain from a transaction in which substantially all of your expected return is due to the time value of your net investment. File state tax only for free For more information, see chapter 4 of Publication 550. File state tax only for free Prev  Up  Next   Home   More Online Publications
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Seniors & Retirees

1040 Central
1040 Central has been updated for the last few weeks of Filing Season 2014.

Tax Scams/Consumer Alerts
The IRS urges taxpayers not to fall victim to tax scams. If it sounds too good to be true, it probably is.

Tax Counseling for the Elderly
The Tax Counseling for the Elderly Program provides free tax help to people aged 60 and older.

Tips for Seniors in Preparing their Taxes
Check here for tips on common pitfalls for seniors to watch for when preparing their individual tax returns.

Life Events That May Have Tax Consequences for Seniors and Retirees
Some events in the lives of seniors and retirees may affect their tax responsibilities. This page contains links to more information.

Are Your Social Security Benefits Taxable?
How much, if any, of your social security benefits are taxable depends on your total income and marital status.

Frequently Asked Questions for Seniors
This page highlights places to go for answers to questions frequently asked by seniors.

Products for Older Americans
This page contains links to several IRS products of interest to older Americans.

Page Last Reviewed or Updated: 28-Mar-2014

The File State Tax Only For Free

File state tax only for free Index A Accrual foreign taxes, adjustments, You may have to post a bond. File state tax only for free Accrual method of accounting, Accrual method of accounting. File state tax only for free Allocation Carryback/carryover between spouses, Allocations Between Spouses Foreign losses, Foreign Losses Foreign taxes, Allocation of Foreign Taxes U. File state tax only for free S. File state tax only for free losses, U. File state tax only for free S. File state tax only for free Losses Alternative minimum tax, Reminders Amended return, Claim for Refund American Samoa, resident of, Possession Exclusion Assistance (see Tax help) B Bankruptcy, effect of, Effect of bankruptcy or insolvency. File state tax only for free Beneficiary, Partner or S corporation shareholder. File state tax only for free Bond, income tax, You may have to post a bond. File state tax only for free Boycotting countries, Taxes From International Boycott Operations C Capital gains and losses, Capital Gains and Losses Carryback and carryover, Carrybacks and carryovers. File state tax only for free Allocations between spouses, Allocations Between Spouses Claim for refund, Time Limit on Tax Assessment Joint return, Married Couples Joint return–deduction year, Joint Return Filed in a Deduction Year Taxes all credited or deducted, Claim for Refund Time limit on tax assessment, Time Limit on Tax Assessment Choice to take credit or deduction Changing your choice, Making or Changing Your Choice Choice applied to all qualified foreign taxes, Choice Applies to All Qualified Foreign Taxes Claim for refund, Claim for Refund Classes of gross income, Classes of gross income. File state tax only for free Compensation for labor or personal services, Determining the Source of Compensation for Labor or Personal Services Geographical basis, Geographical basis. File state tax only for free Comprehensive example, Comprehensive Example — Filled-In Form 1116 Controlled foreign corporation shareholder, Controlled foreign corporation shareholder. File state tax only for free , Income from controlled foreign corporations. File state tax only for free Covered asset acquisition, Covered Asset Acquisition Credit How to claim, How To Claim the Credit How to figure, How To Figure the Credit Limit on, Limit on the Credit Credit for taxes paid or accrued, Credit for Taxes Paid or Accrued D Deduction for foreign taxes that are not income taxes, Foreign taxes that are not income taxes. File state tax only for free Distributions Lump-sum, Lump-Sum Distribution Dividends Taxes on, Taxes Imposed on Certain Dividends Dual-capacity taxpayers, Dual-capacity taxpayers. File state tax only for free E Economic benefits, Specific economic benefit. File state tax only for free Examples Comprehensive, Comprehensive Example — Filled-In Form 1116 Simple, Simple Example — Filled-In Form 1116 Excess limit, Carryback and Carryover Exchange rates, Foreign Currency and Exchange Rates Excluded income Foreign earned, Foreign Earned Income and Housing Exclusions Taxes on, Taxes on Excluded Income Exemption from foreign tax credit limit, Exemption from foreign tax credit limit. File state tax only for free Export financing interest, Export financing interest. File state tax only for free Extraterritorial income, Extraterritorial Income Exclusion F Financial services income, Financial services income. File state tax only for free Foreign corporation–U. File state tax only for free S. File state tax only for free shareholders, filing requirements, Taxes of U. File state tax only for free S. File state tax only for free Persons Controlling Foreign Corporations and Partnerships Foreign country, Foreign country. File state tax only for free Foreign currency and exchange rates, Foreign Currency and Exchange Rates Foreign income, translating, Translating foreign currency into U. File state tax only for free S. File state tax only for free dollars. File state tax only for free Foreign losses Allocation of, Foreign Losses Recapture of, Recapture of Prior Year Overall Foreign Loss Accounts Foreign mineral income, taxes on, Taxes on Foreign Mineral Income Foreign oil and gas extraction income, taxes on, Taxes on Combined Foreign Oil and Gas Income Foreign partnerships–U. File state tax only for free S. File state tax only for free partners, filing requirement, Taxes of U. File state tax only for free S. File state tax only for free Persons Controlling Foreign Corporations and Partnerships Foreign tax refund, Foreign tax refund. File state tax only for free , Foreign tax refund. File state tax only for free Foreign tax(es) Allocation to income categories, Allocation of Foreign Taxes For which you cannot take a credit, Foreign Taxes for Which You Cannot Take a Credit Imposed on foreign refund, Foreign tax imposed on foreign refund. File state tax only for free Qualifying for credit, What Foreign Taxes Qualify for the Credit? Redetermination, Foreign Tax Redetermination Refund, Foreign tax imposed on foreign refund. File state tax only for free Form 1040X, Claim for Refund 1116, Form 1116, Simple Example — Filled-In Form 1116, Comprehensive Example — Filled-In Form 1116 5471, Taxes of U. File state tax only for free S. File state tax only for free Persons Controlling Foreign Corporations and Partnerships 5713, Form 5713 required. File state tax only for free 8833, Report required. File state tax only for free 8865, Taxes of U. File state tax only for free S. File state tax only for free Persons Controlling Foreign Corporations and Partnerships 8873, Extraterritorial Income Exclusion Free tax services, Free help with your tax return. File state tax only for free Functional currency, Translating foreign currency into U. File state tax only for free S. File state tax only for free dollars. File state tax only for free G General category income, separate limit, General Category Income H Help (see Tax help) High-taxed income, High-taxed income. File state tax only for free I Income from sources in U. File state tax only for free S. File state tax only for free possessions, Determining the source of income from U. File state tax only for free S. File state tax only for free possessions. File state tax only for free Income re-sourced by treaty, separate limit, Certain Income Re-Sourced By Treaty Income tax, Income Tax Income tax bond, You may have to post a bond. File state tax only for free Interest, Penalties and interest. File state tax only for free Interest expense, apportioning, Interest expense. File state tax only for free International boycott, Taxes From International Boycott Operations Itemized deduction, Taxes for Which You Can Only Take an Itemized Deduction J Joint return Carryback and carryover, Married Couples Credit based on foreign tax of both spouses, Joint return. File state tax only for free Filed in a deduction year, Joint Return Filed in a Deduction Year L Levy, Income Tax Limit on credit, Limit on the Credit Losses, foreign, Foreign Losses Allocation of, Foreign Losses Recapture of, Recapture of Prior Year Overall Foreign Loss Accounts Losses, U. File state tax only for free S. File state tax only for free , U. File state tax only for free S. File state tax only for free Losses Allocation of, U. File state tax only for free S. File state tax only for free Losses Lump-sum distributions, Lump-Sum Distribution M Making or changing your choice, Making or Changing Your Choice Married couples Carryback and carryover, Married Couples Joint return, Joint return. File state tax only for free Mineral income, foreign,, Taxes on Foreign Mineral Income Mutual fund distributions, Mutual fund shareholder. File state tax only for free , Passive income. File state tax only for free Mutual fund shareholder, Mutual fund shareholder. File state tax only for free N Nonresident aliens, Nonresident Aliens Notice to the IRS of change in tax, Notice to the Internal Revenue Service (IRS) of Redetermination O Overall foreign loss, Overall foreign loss. File state tax only for free P Partner, Partner or S corporation shareholder. File state tax only for free , Partnership distributive share. File state tax only for free , Foreign Taxes From a Partnership or an S Corporation Passive category income, Passive Category Income Penalties, Failure-to-notify penalty. File state tax only for free , Penalties and interest. File state tax only for free Failure to file Form 5471, 8865, Penalty for not filing Form 5471 or Form 8865. File state tax only for free Failure to file Form 5713, Penalty for failure to file. File state tax only for free Failure to notify, foreign tax change, Failure-to-notify penalty. File state tax only for free Failure to report treaty information, Report required. File state tax only for free Pension, employment, and disability fund payments, Pension, unemployment, and disability fund payments. File state tax only for free Personal property, sales or exchanges of, Determining the Source of Income From the Sales or Exchanges of Certain Personal Property Possession exclusion, Possession Exclusion Publications (see Tax help) Purchase or sale of oil or gas, taxes in connection with, Taxes in Connection With the Purchase or Sale of Oil or Gas Q Qualified business unit, Translating foreign currency into U. File state tax only for free S. File state tax only for free dollars. File state tax only for free Qualified dividends, Capital Gains and Losses R Rate of exchange, Rate of exchange for foreign taxes paid. File state tax only for free Recapture of foreign losses, Recapture of Prior Year Overall Foreign Loss Accounts Records to keep, Records To Keep Redetermination of foreign tax, Foreign Tax Redetermination Refund claims, time limit, Time Limit on Refund Claims Refund, foreign tax, Foreign tax refund. File state tax only for free Reporting requirements (international boycott), Reporting requirements. File state tax only for free Resident aliens, Resident Aliens S S corporation shareholder, Partner or S corporation shareholder. File state tax only for free , Foreign Taxes From a Partnership or an S Corporation Sanctioned countries, Taxes Imposed By Sanctioned Countries (Section 901(j) Income) Section 901(j) income, Section 901(j) Income Section 901(j) sanctioned income, Taxes Imposed By Sanctioned Countries (Section 901(j) Income) Separate limit income, Separate Limit Income General category income, General Category Income Income re-sourced by treaty, Certain Income Re-Sourced By Treaty Lump-sum distribution, Lump-Sum Distribution Passive category income, Passive Category Income Section 901(j) income, Section 901(j) Income Shareholder, Mutual fund shareholder. File state tax only for free Simple example, Simple Example — Filled-In Form 1116 Soak-up taxes, Soak-up taxes. File state tax only for free Social security taxes, Pension, unemployment, and disability fund payments. File state tax only for free Source of compensation for labor or personal services Alternative basis, Alternative basis. File state tax only for free Multi-year compensation, Multi-year compensation. File state tax only for free Time basis, Time basis. File state tax only for free Transportation income, Transportation Income State income taxes, State income taxes. File state tax only for free Subsidy, Subsidy received. File state tax only for free T Tax help, How To Get Tax Help Tax treaties, Tax Treaties Taxable income from sources outside the U. File state tax only for free S. 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