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File Tax Extension For 2011

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File Tax Extension For 2011

File tax extension for 2011 9. File tax extension for 2011   Depletion Table of Contents Introduction Topics - This chapter discusses: Who Can Claim Depletion? Mineral PropertyCost Depletion Percentage Depletion Oil and Gas Wells Mines and Geothermal Deposits Lessor's Gross Income TimberTimber units. File tax extension for 2011 Depletion unit. File tax extension for 2011 Introduction Depletion is the using up of natural resources by mining, drilling, quarrying stone, or cutting timber. File tax extension for 2011 The depletion deduction allows an owner or operator to account for the reduction of a product's reserves. File tax extension for 2011 There are two ways of figuring depletion: cost depletion and percentage depletion. File tax extension for 2011 For mineral property, you generally must use the method that gives you the larger deduction. File tax extension for 2011 For standing timber, you must use cost depletion. File tax extension for 2011 Topics - This chapter discusses: Who can claim depletion Mineral property Timber Who Can Claim Depletion? If you have an economic interest in mineral property or standing timber, you can take a deduction for depletion. File tax extension for 2011 More than one person can have an economic interest in the same mineral deposit or timber. File tax extension for 2011 In the case of leased property, the depletion deduction is divided between the lessor and the lessee. File tax extension for 2011 You have an economic interest if both the following apply. File tax extension for 2011 You have acquired by investment any interest in mineral deposits or standing timber. File tax extension for 2011 You have a legal right to income from the extraction of the mineral or cutting of the timber to which you must look for a return of your capital investment. File tax extension for 2011 A contractual relationship that allows you an economic or monetary advantage from products of the mineral deposit or standing timber is not, in itself, an economic interest. File tax extension for 2011 A production payment carved out of, or retained on the sale of, mineral property is not an economic interest. File tax extension for 2011 Individuals, corporations, estates, and trusts who claim depletion deductions may be liable for alternative minimum tax. File tax extension for 2011 Basis adjustment for depletion. File tax extension for 2011   You must reduce the basis of your property by the depletion allowed or allowable, whichever is greater. File tax extension for 2011 Mineral Property Mineral property includes oil and gas wells, mines, and other natural deposits (including geothermal deposits). File tax extension for 2011 For this purpose, the term “property” means each separate interest you own in each mineral deposit in each separate tract or parcel of land. File tax extension for 2011 You can treat two or more separate interests as one property or as separate properties. File tax extension for 2011 See section 614 of the Internal Revenue Code and the related regulations for rules on how to treat separate mineral interests. File tax extension for 2011 There are two ways of figuring depletion on mineral property. File tax extension for 2011 Cost depletion. File tax extension for 2011 Percentage depletion. File tax extension for 2011 Generally, you must use the method that gives you the larger deduction. File tax extension for 2011 However, unless you are an independent producer or royalty owner, you generally cannot use percentage depletion for oil and gas wells. File tax extension for 2011 See Oil and Gas Wells , later. File tax extension for 2011 Cost Depletion To figure cost depletion you must first determine the following. File tax extension for 2011 The property's basis for depletion. File tax extension for 2011 The total recoverable units of mineral in the property's natural deposit. File tax extension for 2011 The number of units of mineral sold during the tax year. File tax extension for 2011 Basis for depletion. File tax extension for 2011   To figure the property's basis for depletion, subtract all the following from the property's adjusted basis. File tax extension for 2011 Amounts recoverable through: Depreciation deductions, Deferred expenses (including deferred exploration and development costs), and Deductions other than depletion. File tax extension for 2011 The residual value of land and improvements at the end of operations. File tax extension for 2011 The cost or value of land acquired for purposes other than mineral production. File tax extension for 2011 Adjusted basis. File tax extension for 2011   The adjusted basis of your property is your original cost or other basis, plus certain additions and improvements, and minus certain deductions such as depletion allowed or allowable and casualty losses. File tax extension for 2011 Your adjusted basis can never be less than zero. File tax extension for 2011 See Publication 551, Basis of Assets, for more information on adjusted basis. File tax extension for 2011 Total recoverable units. File tax extension for 2011   The total recoverable units is the sum of the following. File tax extension for 2011 The number of units of mineral remaining at the end of the year (including units recovered but not sold). File tax extension for 2011 The number of units of mineral sold during the tax year (determined under your method of accounting, as explained next). File tax extension for 2011   You must estimate or determine recoverable units (tons, pounds, ounces, barrels, thousands of cubic feet, or other measure) of mineral products using the current industry method and the most accurate and reliable information you can obtain. File tax extension for 2011 You must include ores and minerals that are developed, in sight, blocked out, or assured. File tax extension for 2011 You must also include probable or prospective ores or minerals that are believed to exist based on good evidence. File tax extension for 2011 But see Elective safe harbor for owners of oil and gas property , later. File tax extension for 2011 Number of units sold. File tax extension for 2011   You determine the number of units sold during the tax year based on your method of accounting. File tax extension for 2011 Use the following table to make this determination. File tax extension for 2011    IF you  use . File tax extension for 2011 . File tax extension for 2011 . File tax extension for 2011 THEN the units sold during the year are . File tax extension for 2011 . File tax extension for 2011 . File tax extension for 2011 The cash method of accounting The units sold for which you receive payment during the tax year (regardless of the year of sale). File tax extension for 2011 An accrual method of accounting The units sold based on your inventories and method of accounting for inventory. File tax extension for 2011   The number of units sold during the tax year does not include any for which depletion deductions were allowed or allowable in earlier years. File tax extension for 2011 Figuring the cost depletion deduction. File tax extension for 2011   Once you have figured your property's basis for depletion, the total recoverable units, and the number of units sold during the tax year, you can figure your cost depletion deduction by taking the following steps. File tax extension for 2011 Step Action Result 1 Divide your property's basis for depletion by total recoverable units. File tax extension for 2011 Rate per unit. File tax extension for 2011 2 Multiply the rate per unit by units sold during the tax year. File tax extension for 2011 Cost depletion deduction. File tax extension for 2011 You must keep accounts for the depletion of each property and adjust these accounts each year for units sold and depletion claimed. File tax extension for 2011 Elective safe harbor for owners of oil and gas property. File tax extension for 2011   Instead of using the method described earlier to determine the total recoverable units, you can use an elective safe harbor. File tax extension for 2011 If you choose the elective safe harbor, the total recoverable units equal 105% of a property's proven reserves (both developed and undeveloped). File tax extension for 2011 For details, see Revenue Procedure 2004-19 on page 563 of Internal Revenue Bulletin 2004-10, available at www. File tax extension for 2011 irs. File tax extension for 2011 gov/pub/irs-irbs/irb04-10. File tax extension for 2011 pdf. File tax extension for 2011   To make the election, attach a statement to your timely filed (including extensions) original return for the first tax year for which the safe harbor is elected. File tax extension for 2011 The statement must indicate that you are electing the safe harbor provided by Revenue Procedure 2004-19. File tax extension for 2011 The election, if made, is effective for the tax year in which it is made and all later years. File tax extension for 2011 It cannot be revoked for the tax year in which it is elected, but may be revoked in a later year. File tax extension for 2011 Once revoked, it cannot be re-elected for the next 5 years. File tax extension for 2011 Percentage Depletion To figure percentage depletion, you multiply a certain percentage, specified for each mineral, by your gross income from the property during the tax year. File tax extension for 2011 The rates to be used and other rules for oil and gas wells are discussed later under Independent Producers and Royalty Owners and under Natural Gas Wells . File tax extension for 2011 Rates and other rules for percentage depletion of other specific minerals are found later in Mines and Geothermal Deposits . File tax extension for 2011 Gross income. File tax extension for 2011   When figuring percentage depletion, subtract from your gross income from the property the following amounts. File tax extension for 2011 Any rents or royalties you paid or incurred for the property. File tax extension for 2011 The part of any bonus you paid for a lease on the property allocable to the product sold (or that otherwise gives rise to gross income) for the tax year. File tax extension for 2011 A bonus payment includes amounts you paid as a lessee to satisfy a production payment retained by the lessor. File tax extension for 2011   Use the following fraction to figure the part of the bonus you must subtract. File tax extension for 2011 No. File tax extension for 2011 of units sold in the tax year Recoverable units from the property × Bonus Payments For oil and gas wells and geothermal deposits, more information about the definition of gross income from the property is under Oil and Gas Wells , later. File tax extension for 2011 For other property, more information about the definition of gross income from the property is under Mines and Geothermal Deposits , later. File tax extension for 2011 Taxable income limit. File tax extension for 2011   The percentage depletion deduction generally cannot be more than 50% (100% for oil and gas property) of your taxable income from the property figured without the depletion deduction and the domestic production activities deduction. File tax extension for 2011   Taxable income from the property means gross income from the property minus all allowable deductions (except any deduction for depletion or domestic production activities) attributable to mining processes, including mining transportation. File tax extension for 2011 These deductible items include, but are not limited to, the following. File tax extension for 2011 Operating expenses. File tax extension for 2011 Certain selling expenses. File tax extension for 2011 Administrative and financial overhead. File tax extension for 2011 Depreciation. File tax extension for 2011 Intangible drilling and development costs. File tax extension for 2011 Exploration and development expenditures. File tax extension for 2011 Deductible taxes (see chapter 5), but not taxes that you capitalize or take as a credit. File tax extension for 2011 Losses sustained. File tax extension for 2011   The following rules apply when figuring your taxable income from the property for purposes of the taxable income limit. File tax extension for 2011 Do not deduct any net operating loss deduction from the gross income from the property. File tax extension for 2011 Corporations do not deduct charitable contributions from the gross income from the property. File tax extension for 2011 If, during the year, you dispose of an item of section 1245 property that was used in connection with mineral property, reduce any allowable deduction for mining expenses by the part of any gain you must report as ordinary income that is allocable to the mineral property. File tax extension for 2011 See section 1. File tax extension for 2011 613-5(b)(1) of the regulations for information on how to figure the ordinary gain allocable to the property. File tax extension for 2011 Oil and Gas Wells You cannot claim percentage depletion for an oil or gas well unless at least one of the following applies. File tax extension for 2011 You are either an independent producer or a royalty owner. File tax extension for 2011 The well produces natural gas that is either sold under a fixed contract or produced from geopressured brine. File tax extension for 2011 If you are an independent producer or royalty owner, see Independent Producers and Royalty Owners , next. File tax extension for 2011 For information on the depletion deduction for wells that produce natural gas that is either sold under a fixed contract or produced from geopressured brine, see Natural Gas Wells , later. File tax extension for 2011 Independent Producers and Royalty Owners If you are an independent producer or royalty owner, you figure percentage depletion using a rate of 15% of the gross income from the property based on your average daily production of domestic crude oil or domestic natural gas up to your depletable oil or natural gas quantity. File tax extension for 2011 However, certain refiners, as explained next, and certain retailers and transferees of proven oil and gas properties, as explained next, cannot claim percentage depletion. File tax extension for 2011 For information on figuring the deduction, see Figuring percentage depletion , later. File tax extension for 2011 Refiners who cannot claim percentage depletion. File tax extension for 2011   You cannot claim percentage depletion if you or a related person refine crude oil and you and the related person refined more than 75,000 barrels on any day during the tax year based on average (rather than actual) daily refinery runs for the tax year. File tax extension for 2011 The average daily refinery run is computed by dividing total refinery runs for the tax year by the total number of days in the tax year. File tax extension for 2011 Related person. File tax extension for 2011   You and another person are related persons if either of you holds a significant ownership interest in the other person or if a third person holds a significant ownership interest in both of you. File tax extension for 2011 For example, a corporation, partnership, estate, or trust and anyone who holds a significant ownership interest in it are related persons. File tax extension for 2011 A partnership and a trust are related persons if one person holds a significant ownership interest in each of them. File tax extension for 2011 For purposes of the related person rules, significant ownership interest means direct or indirect ownership of 5% or more in any one of the following. File tax extension for 2011 The value of the outstanding stock of a corporation. File tax extension for 2011 The interest in the profits or capital of a partnership. File tax extension for 2011 The beneficial interests in an estate or trust. File tax extension for 2011 Any interest owned by or for a corporation, partnership, trust, or estate is considered to be owned directly both by itself and proportionately by its shareholders, partners, or beneficiaries. File tax extension for 2011 Retailers who cannot claim percentage depletion. File tax extension for 2011   You cannot claim percentage depletion if both the following apply. File tax extension for 2011 You sell oil or natural gas or their by-products directly or through a related person in any of the following situations. File tax extension for 2011 Through a retail outlet operated by you or a related person. File tax extension for 2011 To any person who is required under an agreement with you or a related person to use a trademark, trade name, or service mark or name owned by you or a related person in marketing or distributing oil, natural gas, or their by-products. File tax extension for 2011 To any person given authority under an agreement with you or a related person to occupy any retail outlet owned, leased, or controlled by you or a related person. File tax extension for 2011 The combined gross receipts from sales (not counting resales) of oil, natural gas, or their by-products by all retail outlets taken into account in (1) are more than $5 million for the tax year. File tax extension for 2011   For the purpose of determining if this rule applies, do not count the following. File tax extension for 2011 Bulk sales (sales in very large quantities) of oil or natural gas to commercial or industrial users. File tax extension for 2011 Bulk sales of aviation fuels to the Department of Defense. File tax extension for 2011 Sales of oil or natural gas or their by-products outside the United States if none of your domestic production or that of a related person is exported during the tax year or the prior tax year. File tax extension for 2011 Related person. File tax extension for 2011   To determine if you and another person are related persons, see Related person under Refiners who cannot claim percentage depletion, earlier. File tax extension for 2011 Sales through a related person. File tax extension for 2011   You are considered to be selling through a related person if any sale by the related person produces gross income from which you may benefit because of your direct or indirect ownership interest in the person. File tax extension for 2011   You are not considered to be selling through a related person who is a retailer if all the following apply. File tax extension for 2011 You do not have a significant ownership interest in the retailer. File tax extension for 2011 You sell your production to persons who are not related to either you or the retailer. File tax extension for 2011 The retailer does not buy oil or natural gas from your customers or persons related to your customers. File tax extension for 2011 There are no arrangements for the retailer to acquire oil or natural gas you produced for resale or made available for purchase by the retailer. File tax extension for 2011 Neither you nor the retailer knows of or controls the final disposition of the oil or natural gas you sold or the original source of the petroleum products the retailer acquired for resale. File tax extension for 2011 Transferees who cannot claim percentage depletion. File tax extension for 2011   You cannot claim percentage depletion if you received your interest in a proven oil or gas property by transfer after 1974 and before October 12, 1990. File tax extension for 2011 For a definition of the term “transfer,” see section 1. File tax extension for 2011 613A-7(n) of the regulations. File tax extension for 2011 For a definition of the term “interest in proven oil or gas property,” see section 1. File tax extension for 2011 613A-7(p) of the regulations. File tax extension for 2011 Figuring percentage depletion. File tax extension for 2011   Generally, as an independent producer or royalty owner, you figure your percentage depletion by computing your average daily production of domestic oil or gas and comparing it to your depletable oil or gas quantity. File tax extension for 2011 If your average daily production does not exceed your depletable oil or gas quantity, you figure your percentage depletion by multiplying the gross income from the oil or gas property (defined later) by 15%. File tax extension for 2011 If your average daily production of domestic oil or gas exceeds your depletable oil or gas quantity, you must make an allocation as explained later under Average daily production. File tax extension for 2011   In addition, there is a limit on the percentage depletion deduction. File tax extension for 2011 See Taxable income limit , later. File tax extension for 2011 Average daily production. File tax extension for 2011   Figure your average daily production by dividing your total domestic production of oil or gas for the tax year by the number of days in your tax year. File tax extension for 2011 Partial interest. File tax extension for 2011   If you have a partial interest in the production from a property, figure your share of the production by multiplying total production from the property by your percentage of interest in the revenues from the property. File tax extension for 2011   You have a partial interest in the production from a property if you have a net profits interest in the property. File tax extension for 2011 To figure the share of production for your net profits interest, you must first determine your percentage participation (as measured by the net profits) in the gross revenue from the property. File tax extension for 2011 To figure this percentage, you divide the income you receive for your net profits interest by the gross revenue from the property. File tax extension for 2011 Then multiply the total production from the property by your percentage participation to figure your share of the production. File tax extension for 2011 Example. File tax extension for 2011 Javier Robles owns oil property in which Pablo Olmos owns a 20% net profits interest. File tax extension for 2011 During the year, the property produced 10,000 barrels of oil, which Javier sold for $200,000. File tax extension for 2011 Javier had expenses of $90,000 attributable to the property. File tax extension for 2011 The property generated a net profit of $110,000 ($200,000 − $90,000). File tax extension for 2011 Pablo received income of $22,000 ($110,000 × . File tax extension for 2011 20) for his net profits interest. File tax extension for 2011 Pablo determined his percentage participation to be 11% by dividing $22,000 (the income he received) by $200,000 (the gross revenue from the property). File tax extension for 2011 Pablo determined his share of the oil production to be 1,100 barrels (10,000 barrels × 11%). File tax extension for 2011 Depletable oil or natural gas quantity. File tax extension for 2011   Generally, your depletable oil quantity is 1,000 barrels. File tax extension for 2011 Your depletable natural gas quantity is 6,000 cubic feet multiplied by the number of barrels of your depletable oil quantity that you choose to apply. File tax extension for 2011 If you claim depletion on both oil and natural gas, you must reduce your depletable oil quantity (1,000 barrels) by the number of barrels you use to figure your depletable natural gas quantity. File tax extension for 2011 Example. File tax extension for 2011 You have both oil and natural gas production. File tax extension for 2011 To figure your depletable natural gas quantity, you choose to apply 360 barrels of your 1000-barrel depletable oil quantity. File tax extension for 2011 Your depletable natural gas quantity is 2. File tax extension for 2011 16 million cubic feet of gas (360 × 6000). File tax extension for 2011 You must reduce your depletable oil quantity to 640 barrels (1000 − 360). File tax extension for 2011 If you have production from marginal wells, see section 613A(c)(6) of the Internal Revenue Code to figure your depletable oil or natural gas quantity. File tax extension for 2011 Also, see Notice 2012-50, available at www. File tax extension for 2011 irs. File tax extension for 2011 gov/irb/2012–31_IRB/index. File tax extension for 2011 html. File tax extension for 2011 Business entities and family members. File tax extension for 2011   You must allocate the depletable oil or gas quantity among the following related persons in proportion to each entity's or family member's production of domestic oil or gas for the year. File tax extension for 2011 Corporations, trusts, and estates if 50% or more of the beneficial interest is owned by the same or related persons (considering only persons that own at least 5% of the beneficial interest). File tax extension for 2011 You and your spouse and minor children. File tax extension for 2011 A related person is anyone mentioned in the related persons discussion under Nondeductible loss in chapter 2 of Publication 544, except that for purposes of this allocation, item (1) in that discussion includes only an individual, his or her spouse, and minor children. File tax extension for 2011 Controlled group of corporations. File tax extension for 2011   Members of the same controlled group of corporations are treated as one taxpayer when figuring the depletable oil or natural gas quantity. File tax extension for 2011 They share the depletable quantity. File tax extension for 2011 A controlled group of corporations is defined in section 1563(a) of the Internal Revenue Code, except that, for this purpose, the stock ownership requirement in that definition is “more than 50%” rather than “at least 80%. File tax extension for 2011 ” Gross income from the property. File tax extension for 2011   For purposes of percentage depletion, gross income from the property (in the case of oil and gas wells) is the amount you receive from the sale of the oil or gas in the immediate vicinity of the well. File tax extension for 2011 If you do not sell the oil or gas on the property, but manufacture or convert it into a refined product before sale or transport it before sale, the gross income from the property is the representative market or field price (RMFP) of the oil or gas, before conversion or transportation. File tax extension for 2011   If you sold gas after you removed it from the premises for a price that is lower than the RMFP, determine gross income from the property for percentage depletion purposes without regard to the RMFP. File tax extension for 2011   Gross income from the property does not include lease bonuses, advance royalties, or other amounts payable without regard to production from the property. File tax extension for 2011 Average daily production exceeds depletable quantities. File tax extension for 2011   If your average daily production for the year is more than your depletable oil or natural gas quantity, figure your allowance for depletion for each domestic oil or natural gas property as follows. File tax extension for 2011 Figure your average daily production of oil or natural gas for the year. File tax extension for 2011 Figure your depletable oil or natural gas quantity for the year. File tax extension for 2011 Figure depletion for all oil or natural gas produced from the property using a percentage depletion rate of 15%. File tax extension for 2011 Multiply the result figured in (3) by a fraction, the numerator of which is the result figured in (2) and the denominator of which is the result figured in (1). File tax extension for 2011 This is your depletion allowance for that property for the year. File tax extension for 2011 Taxable income limit. File tax extension for 2011   If you are an independent producer or royalty owner of oil and gas, your deduction for percentage depletion is limited to the smaller of the following. File tax extension for 2011 100% of your taxable income from the property figured without the deduction for depletion and the deduction for domestic production activities under section 199 of the Internal Revenue Code. File tax extension for 2011 For a definition of taxable income from the property, see Taxable income limit , earlier, under Mineral Property. File tax extension for 2011 65% of your taxable income from all sources, figured without the depletion allowance, the deduction for domestic production activities, any net operating loss carryback, and any capital loss carryback. File tax extension for 2011 You can carry over to the following year any amount you cannot deduct because of the 65%-of-taxable-income limit. File tax extension for 2011 Add it to your depletion allowance (before applying any limits) for the following year. File tax extension for 2011 Partnerships and S Corporations Generally, each partner or S corporation shareholder, and not the partnership or S corporation, figures the depletion allowance separately. File tax extension for 2011 (However, see Electing large partnerships must figure depletion allowance , later. File tax extension for 2011 ) Each partner or shareholder must decide whether to use cost or percentage depletion. File tax extension for 2011 If a partner or shareholder uses percentage depletion, he or she must apply the 65%-of-taxable-income limit using his or her taxable income from all sources. File tax extension for 2011 Partner's or shareholder's adjusted basis. File tax extension for 2011   The partnership or S corporation must allocate to each partner or shareholder his or her share of the adjusted basis of each oil or gas property held by the partnership or S corporation. File tax extension for 2011 The partnership or S corporation makes the allocation as of the date it acquires the oil or gas property. File tax extension for 2011   Each partner's share of the adjusted basis of the oil or gas property generally is figured according to that partner's interest in partnership capital. File tax extension for 2011 However, in some cases, it is figured according to the partner's interest in partnership income. File tax extension for 2011   The partnership or S corporation adjusts the partner's or shareholder's share of the adjusted basis of the oil and gas property for any capital expenditures made for the property and for any change in partnership or S corporation interests. File tax extension for 2011 Recordkeeping. File tax extension for 2011 Each partner or shareholder must separately keep records of his or her share of the adjusted basis in each oil and gas property of the partnership or S corporation. File tax extension for 2011 The partner or shareholder must reduce his or her adjusted basis by the depletion allowed or allowable on the property each year. File tax extension for 2011 The partner or shareholder must use that reduced adjusted basis to figure cost depletion or his or her gain or loss if the partnership or S corporation disposes of the property. File tax extension for 2011 Reporting the deduction. File tax extension for 2011   Information that you, as a partner or shareholder, use to figure your depletion deduction on oil and gas properties is reported by the partnership or S corporation on Schedule K-1 (Form 1065) or on Schedule K-1 (Form 1120S). File tax extension for 2011 Deduct oil and gas depletion for your partnership or S corporation interest on Schedule E (Form 1040). File tax extension for 2011 The depletion deducted on Schedule E is included in figuring income or loss from rental real estate or royalty properties. File tax extension for 2011 The instructions for Schedule E explain where to report this income or loss and whether you need to file either of the following forms. File tax extension for 2011 Form 6198, At-Risk Limitations. File tax extension for 2011 Form 8582, Passive Activity Loss Limitations. File tax extension for 2011 Electing large partnerships must figure depletion allowance. File tax extension for 2011   An electing large partnership, rather than each partner, generally must figure the depletion allowance. File tax extension for 2011 The partnership figures the depletion allowance without taking into account the 65-percent-of-taxable-income limit and the depletable oil or natural gas quantity. File tax extension for 2011 Also, the adjusted basis of a partner's interest in the partnership is not affected by the depletion allowance. File tax extension for 2011   An electing large partnership is one that meets both the following requirements. File tax extension for 2011 The partnership had 100 or more partners in the preceding year. File tax extension for 2011 The partnership chooses to be an electing large partnership. File tax extension for 2011 Disqualified persons. File tax extension for 2011   An electing large partnership does not figure the depletion allowance of its partners that are disqualified persons. File tax extension for 2011 Disqualified persons must figure it themselves, as explained earlier. File tax extension for 2011   All the following are disqualified persons. File tax extension for 2011 Refiners who cannot claim percentage depletion (discussed under Independent Producers and Royalty Owners , earlier). File tax extension for 2011 Retailers who cannot claim percentage depletion (discussed under Independent Producers and Royalty Owners , earlier). File tax extension for 2011 Any partner whose average daily production of domestic crude oil and natural gas is more than 500 barrels during the tax year in which the partnership tax year ends. File tax extension for 2011 Average daily production is discussed earlier. File tax extension for 2011 Natural Gas Wells You can use percentage depletion for a well that produces natural gas that is either Sold under a fixed contract, or Produced from geopressured brine. File tax extension for 2011 Natural gas sold under a fixed contract. File tax extension for 2011   Natural gas sold under a fixed contract qualifies for a percentage depletion rate of 22%. File tax extension for 2011 This is domestic natural gas sold by the producer under a contract that does not provide for a price increase to reflect any increase in the seller's tax liability because of the repeal of percentage depletion for gas. File tax extension for 2011 The contract must have been in effect from February 1, 1975, until the date of sale of the gas. File tax extension for 2011 Price increases after February 1, 1975, are presumed to take the increase in tax liability into account unless demonstrated otherwise by clear and convincing evidence. File tax extension for 2011 Natural gas from geopressured brine. File tax extension for 2011   Qualified natural gas from geopressured brine is eligible for a percentage depletion rate of 10%. File tax extension for 2011 This is natural gas that is both the following. File tax extension for 2011 Produced from a well you began to drill after September 1978 and before 1984. File tax extension for 2011 Determined in accordance with section 503 of the Natural Gas Policy Act of 1978 to be produced from geopressured brine. File tax extension for 2011 Mines and Geothermal Deposits Certain mines, wells, and other natural deposits, including geothermal deposits, qualify for percentage depletion. File tax extension for 2011 Mines and other natural deposits. File tax extension for 2011   For a natural deposit, the percentage of your gross income from the property that you can deduct as depletion depends on the type of deposit. File tax extension for 2011   The following is a list of the percentage depletion rates for the more common minerals. File tax extension for 2011 DEPOSITS RATE Sulphur, uranium, and, if from deposits in the United States, asbestos, lead ore, zinc ore, nickel ore, and mica 22% Gold, silver, copper, iron ore, and certain oil shale, if from deposits in the United States 15% Borax, granite, limestone, marble, mollusk shells, potash, slate, soapstone, and carbon dioxide produced from a well 14% Coal, lignite, and sodium chloride 10% Clay and shale used or sold for use in making sewer pipe or bricks or used or sold for use as sintered or burned lightweight aggregates 7½% Clay used or sold for use in making drainage and roofing tile, flower pots, and kindred products, and gravel, sand, and stone (other than stone used or sold for use by a mine owner or operator as dimension or ornamental stone) 5%   You can find a complete list of minerals and their percentage depletion rates in section 613(b) of the Internal Revenue Code. File tax extension for 2011 Corporate deduction for iron ore and coal. File tax extension for 2011   The percentage depletion deduction of a corporation for iron ore and coal (including lignite) is reduced by 20% of: The percentage depletion deduction for the tax year (figured without this reduction), minus The adjusted basis of the property at the close of the tax year (figured without the depletion deduction for the tax year). File tax extension for 2011 Gross income from the property. File tax extension for 2011   For property other than a geothermal deposit or an oil or gas well, gross income from the property means the gross income from mining. File tax extension for 2011 Mining includes all the following. File tax extension for 2011 Extracting ores or minerals from the ground. File tax extension for 2011 Applying certain treatment processes described later. File tax extension for 2011 Transporting ores or minerals (generally, not more than 50 miles) from the point of extraction to the plants or mills in which the treatment processes are applied. File tax extension for 2011 Excise tax. File tax extension for 2011   Gross income from mining includes the separately stated excise tax received by a mine operator from the sale of coal to compensate the operator for the excise tax the mine operator must pay to finance black lung benefits. File tax extension for 2011 Extraction. File tax extension for 2011   Extracting ores or minerals from the ground includes extraction by mine owners or operators of ores or minerals from the waste or residue of prior mining. File tax extension for 2011 This does not apply to extraction from waste or residue of prior mining by the purchaser of the waste or residue or the purchaser of the rights to extract ores or minerals from the waste or residue. File tax extension for 2011 Treatment processes. File tax extension for 2011   The processes included as mining depend on the ore or mineral mined. File tax extension for 2011 To qualify as mining, the treatment processes must be applied by the mine owner or operator. File tax extension for 2011 For a listing of treatment processes considered as mining, see section 613(c)(4) of the Internal Revenue Code and the related regulations. File tax extension for 2011 Transportation of more than 50 miles. File tax extension for 2011   If the IRS finds that the ore or mineral must be transported more than 50 miles to plants or mills to be treated because of physical and other requirements, the additional authorized transportation is considered mining and included in the computation of gross income from mining. File tax extension for 2011    If you wish to include transportation of more than 50 miles in the computation of gross income from mining, request an advance ruling from the IRS. File tax extension for 2011 Include in the request the facts about the physical and other requirements that prevented the construction and operation of the plant within 50 miles of the point of extraction. File tax extension for 2011 For more information about requesting an advance ruling, see Revenue Procedure 2013-1, available at www. File tax extension for 2011 irs. File tax extension for 2011 gov/irb/2013-01_IRB/ar11. File tax extension for 2011 html. File tax extension for 2011 Disposal of coal or iron ore. File tax extension for 2011   You cannot take a depletion deduction for coal (including lignite) or iron ore mined in the United States if both the following apply. File tax extension for 2011 You disposed of it after holding it for more than 1 year. File tax extension for 2011 You disposed of it under a contract under which you retain an economic interest in the coal or iron ore. File tax extension for 2011 Treat any gain on the disposition as a capital gain. File tax extension for 2011 Disposal to related person. File tax extension for 2011   This rule does not apply if you dispose of the coal or iron ore to one of the following persons. File tax extension for 2011 A related person (as listed in chapter 2 of Publication 544). File tax extension for 2011 A person owned or controlled by the same interests that own or control you. File tax extension for 2011 Geothermal deposits. File tax extension for 2011   Geothermal deposits located in the United States or its possessions qualify for a percentage depletion rate of 15%. File tax extension for 2011 A geothermal deposit is a geothermal reservoir of natural heat stored in rocks or in a watery liquid or vapor. File tax extension for 2011 For percentage depletion purposes, a geothermal deposit is not considered a gas well. File tax extension for 2011   Figure gross income from the property for a geothermal steam well in the same way as for oil and gas wells. File tax extension for 2011 See Gross income from the property , earlier, under Oil and Gas Wells. File tax extension for 2011 Percentage depletion on a geothermal deposit cannot be more than 50% of your taxable income from the property. File tax extension for 2011 Lessor's Gross Income In the case of leased property, the depletion deduction is divided between the lessor and the lessee. File tax extension for 2011 A lessor's gross income from the property that qualifies for percentage depletion usually is the total of the royalties received from the lease. File tax extension for 2011 Bonuses and advanced royalties. File tax extension for 2011   Bonuses and advanced royalties are payments a lessee makes before production to a lessor for the grant of rights in a lease or for minerals, gas, or oil to be extracted from leased property. File tax extension for 2011 If you are the lessor, your income from bonuses and advanced royalties received is subject to an allowance for depletion, as explained in the next two paragraphs. File tax extension for 2011 Figuring cost depletion. File tax extension for 2011   To figure cost depletion on a bonus, multiply your adjusted basis in the property by a fraction, the numerator of which is the bonus and the denominator of which is the total bonus and royalties expected to be received. File tax extension for 2011 To figure cost depletion on advanced royalties, use the computation explained earlier under Cost Depletion , treating the number of units for which the advanced royalty is received as the number of units sold. File tax extension for 2011 Figuring percentage depletion. File tax extension for 2011   In the case of mines, wells, and other natural deposits other than gas, oil, or geothermal property, you may use the percentage rates discussed earlier under Mines and Geothermal Deposits . File tax extension for 2011 Any bonus or advanced royalty payments are generally part of the gross income from the property to which the rates are applied in making the calculation. File tax extension for 2011 However, for oil, gas, or geothermal property, gross income does not include lease bonuses, advanced royalties, or other amounts payable without regard to production from the property. File tax extension for 2011 Ending the lease. File tax extension for 2011   If you receive a bonus on a lease that ends or is abandoned before you derive any income from mineral extraction, include in income the depletion deduction you took. File tax extension for 2011 Do this for the year the lease ends or is abandoned. File tax extension for 2011 Also increase your adjusted basis in the property to restore the depletion deduction you previously subtracted. File tax extension for 2011   For advanced royalties, include in income the depletion claimed on minerals for which the advanced royalties were paid if the minerals were not produced before the lease ended. File tax extension for 2011 Include this amount in income for the year the lease ends. File tax extension for 2011 Increase your adjusted basis in the property by the amount you include in income. File tax extension for 2011 Delay rentals. File tax extension for 2011   These are payments for deferring development of the property. File tax extension for 2011 Since delay rentals are ordinary rent, they are ordinary income that is not subject to depletion. File tax extension for 2011 These rentals can be avoided by either abandoning the lease, beginning development operations, or obtaining production. File tax extension for 2011 Timber You can figure timber depletion only by the cost method. File tax extension for 2011 Percentage depletion does not apply to timber. File tax extension for 2011 Base your depletion on your cost or other basis in the timber. File tax extension for 2011 Your cost does not include the cost of land or any amounts recoverable through depreciation. File tax extension for 2011 Depletion takes place when you cut standing timber. File tax extension for 2011 You can figure your depletion deduction when the quantity of cut timber is first accurately measured in the process of exploitation. File tax extension for 2011 Figuring cost depletion. File tax extension for 2011   To figure your cost depletion allowance, you multiply the number of timber units cut by your depletion unit. File tax extension for 2011 Timber units. File tax extension for 2011   When you acquire timber property, you must make an estimate of the quantity of marketable timber that exists on the property. File tax extension for 2011 You measure the timber using board feet, log scale, cords, or other units. File tax extension for 2011 If you later determine that you have more or less units of timber, you must adjust the original estimate. File tax extension for 2011   The term “timber property” means your economic interest in standing timber in each tract or block representing a separate timber account. File tax extension for 2011 Depletion unit. File tax extension for 2011   You figure your depletion unit each year by taking the following steps. File tax extension for 2011 Determine your cost or adjusted basis of the timber on hand at the beginning of the year. File tax extension for 2011 Adjusted basis is defined under Cost Depletion in the discussion on Mineral Property. File tax extension for 2011 Add to the amount determined in (1) the cost of any timber units acquired during the year and any additions to capital. File tax extension for 2011 Figure the number of timber units to take into account by adding the number of timber units acquired during the year to the number of timber units on hand in the account at the beginning of the year and then adding (or subtracting) any correction to the estimate of the number of timber units remaining in the account. File tax extension for 2011 Divide the result of (2) by the result of (3). File tax extension for 2011 This is your depletion unit. File tax extension for 2011 Example. File tax extension for 2011 You bought a timber tract for $160,000 and the land was worth as much as the timber. File tax extension for 2011 Your basis for the timber is $80,000. File tax extension for 2011 Based on an estimated one million board feet (1,000 MBF) of standing timber, you figure your depletion unit to be $80 per MBF ($80,000 ÷ 1,000). File tax extension for 2011 If you cut 500 MBF of timber, your depletion allowance would be $40,000 (500 MBF × $80). File tax extension for 2011 When to claim depletion. File tax extension for 2011   Claim your depletion allowance as a deduction in the year of sale or other disposition of the products cut from the timber, unless you choose to treat the cutting of timber as a sale or exchange (explained below). File tax extension for 2011 Include allowable depletion for timber products not sold during the tax year the timber is cut as a cost item in the closing inventory of timber products for the year. File tax extension for 2011 The inventory is your basis for determining gain or loss in the tax year you sell the timber products. File tax extension for 2011 Example. File tax extension for 2011 The facts are the same as in the previous example except that you sold only half of the timber products in the cutting year. File tax extension for 2011 You would deduct $20,000 of the $40,000 depletion that year. File tax extension for 2011 You would add the remaining $20,000 depletion to your closing inventory of timber products. File tax extension for 2011 Electing to treat the cutting of timber as a sale or exchange. File tax extension for 2011   You can elect, under certain circumstances, to treat the cutting of timber held for more than 1 year as a sale or exchange. File tax extension for 2011 You must make the election on your income tax return for the tax year to which it applies. File tax extension for 2011 If you make this election, subtract the adjusted basis for depletion from the fair market value of the timber on the first day of the tax year in which you cut it to figure the gain or loss on the cutting. File tax extension for 2011 You generally report the gain as long-term capital gain. File tax extension for 2011 The fair market value then becomes your basis for figuring your ordinary gain or loss on the sale or other disposition of the products cut from the timber. File tax extension for 2011 For more information, see Timber in chapter 2 of Publication 544, Sales and Other Dispositions of Assets. File tax extension for 2011   You may revoke an election to treat the cutting of timber as a sale or exchange without IRS's consent. File tax extension for 2011 The prior election (and revocation) is disregarded for purposes of making a subsequent election. File tax extension for 2011 See Form T (Timber), Forest Activities Schedule, for more information. File tax extension for 2011 Form T. File tax extension for 2011   Complete and attach Form T (Timber) to your income tax return if you claim a deduction for timber depletion, choose to treat the cutting of timber as a sale or exchange, or make an outright sale of timber. File tax extension for 2011 Prev  Up  Next   Home   More Online Publications
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Register to Vote

Find assistance with registering to vote and voting.

Registering to Vote

The U.S. Election Assistance Commission has resources for voters, including voter guides, registration information, voting accessibility, and information for military and overseas voters.

Voter Eligibility

To be eligible to vote, you must be a U.S. citizen. In most states, you must be 18 years old to vote, but some states do allow 17 year olds to vote. States also have their own residency requirements to vote. For additional information about state-specific requirements and voter eligibility, contact your state election office.

How to Register

In almost all states, you can register by mail to vote using the National Mail Voter Registration Form. North Dakota, Wyoming, American Samoa, Guam, Puerto Rico, and the U.S. Virgin Islands do not accept the National Mail Voter Registration Form. New Hampshire accepts it only as a request for an absentee voter mail-in registration form. If you live in one of these states, please check with your state election office to find out how to register to vote.

You may also use the National Mail Voter Registration Form to update your registration if you changed your name, to change your address, or to register with a political party.

You may be able to apply to register to vote in person at the following public facilities:

In some states, you can also register online to vote. To learn if your state offers online voter registration, please contact your state election office.

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State Registration Deadlines

Almost every state has a voter registration deadline. In order to be eligible to vote in the November elections, you must submit the National Mail Voter Registration Form by these deadlines:

  • Alabama – Voter registration is closed during the 10 days before an election. Applications must be postmarked or delivered by the eleventh day prior to the election.
  • Alaska – 30 days before the election
  • Arizona – 29 days before the election
  • Arkansas – 30 days before the election
  • California – 15 days before the election
  • Colorado – 29 days before the election. If the application is received in the mails without a postmark, it must be received within 5 days of the close of registration.
  • Connecticut – 14 days before the election
  • Delaware – The fourth Saturday before a primary or general election, and 10 days before a special election.
  • District of Columbia – 30 days before the election
  • Florida – 29 days before the election
  • Georgia – The fifth Monday before any general primary, general election, or presidential preference primary, or regularly scheduled special election following the Georgia Election Code. If a special  election is scheduled on a date other that those dates prescribed by the Georgia Election Code, registration would close on the fifth day after the call.
  • Hawaii – 30 days before the election
  • Idaho – 25 days before the election
  • Illinois – 28 days before the election
  • Indiana – 29 days before the election
  • Iowa – Must be delivered by 5 PM, 10 days before the election, if it is a state primary or general election; 11 days before all others. Registration forms which are postmarked 15 or more days before an election are considered on time even if received after the deadline. If you fail to meet these deadlines, you can register to vote on election day.
  • Kansas – Postmarked or delivered 21 days before the election.
  • Kentucky – 29 days before the election
  • Louisiana – 30 days before the election
  • Maine – Delivered 21 business days before the election or you can register in-person up to and including election day.
  • Maryland – Delivered by 9 PM, 21 days before the election
  • Massachusetts – 20 days before the election
  • Michigan – 30 days before the election
  • Minnesota – Delivered by 5 PM, 21 days before the election. You can also register at the polling place on election day.
  • Mississippi – 30 days before the election
  • Missouri – 28 days before the election
  • Montana – 30 days before the election
  • Nebraska – The third Friday before the election (or delivered by 6 PM, on the second Friday before the election)
  • Nevada – The deadline for mail-in registration is the fifth Saturday before any primary or general election. In person registration remains available until 9 PM on the third Tuesday preceding any primary or general election. You may register to vote in person only by appearing at the office of the County Clerk/Registrar of Voters.
  • New Hampshire – Town and city clerks will accept the National Mail Voter Registration Form only as a request for their own absentee voter mail-in registration form, which your city or town clerk must receive by 10 days before the election. You can register at the town or city clerk’s office or in-person on election day.
  • New Jersey – 21 days before the election
  • New Mexico – 28 days before the election
  • New York – 25 days before the election
  • North Carolina – Postmarked 25 days before the election or received in the elections office or designated voter registration agency site by 5 PM, 25 days before the election.
  • North Dakota – No voter registration
  • Ohio – 30 days before the election
  • Oklahoma – 25 days before the election
  • Oregon – 21 days before the election
  • Pennsylvania – 30 days before an election or primary
  • Rhode Island – 30 days before the election
  • South Carolina – 30 days before the election
  • South Dakota – Received 15 days before the election
  • Tennessee – 30 days before the election
  • Texas – 30 days before the election
  • Utah – 30 days before the election for mail-in applications and 15 days before the election for walk-in registration at the county clerk’s office
  • Vermont – Delivered to the town clerk before 5 PM, on the Wednesday before the election
  • Virginia – Delivered 22 days before the election
  • Washington – 29 days before the election or 8 days before the election if delivered in person to the local voter registration office
  • West Virginia – 21 days before the election
  • Wisconsin – 20 days before the election or completed in the local voter registration office up to 5 PM or the close of business, whichever is later, on the Friday before the election. You can also register at the polling place on election day.
  • Wyoming – Cannot accept the National Mail Voter Registration Form. You can register in-person, by mail, or at the polls on election day.

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The File Tax Extension For 2011

File tax extension for 2011 10. File tax extension for 2011   Retirement Plans, Pensions, and Annuities Table of Contents What's New Reminder IntroductionThe General Rule. File tax extension for 2011 Individual retirement arrangements (IRAs). File tax extension for 2011 Civil service retirement benefits. File tax extension for 2011 Useful Items - You may want to see: General InformationIn-plan rollovers to designated Roth accounts. File tax extension for 2011 How To Report Cost (Investment in the Contract) Taxation of Periodic PaymentsExclusion limited to cost. File tax extension for 2011 Exclusion not limited to cost. File tax extension for 2011 Simplified Method Taxation of Nonperiodic PaymentsLump-Sum Distributions RolloversIn-plan rollovers to designated Roth accounts. File tax extension for 2011 Special Additional TaxesTax on Early Distributions Tax on Excess Accumulation Survivors and Beneficiaries What's New For purposes of the Net Investment Income Tax (NIIT), net investment income does not include distributions from a qualified retirement plan (for example, 401(a), 403(a), 403(b), 408, 408A, or 457(b) plans). File tax extension for 2011 However, these distributions are taken into account when determining the modified adjusted gross income threshold. File tax extension for 2011 Distributions from a nonqualified retirement plan are included in net investment income. File tax extension for 2011 See Form 8960, Net Investment Income Tax - Individuals, Estates, and Trusts, and its instructions for more information. File tax extension for 2011 Reminder Starting in 2013, the American Taxpayer Relief Act of 2012 expanded the rules for in-plan Roth rollovers to include more taxpayers. File tax extension for 2011 For more information, see Designated Roth accounts discussed later. File tax extension for 2011 Introduction This chapter discusses the tax treatment of distributions you receive from: An employee pension or annuity from a qualified plan, A disability retirement, and A purchased commercial annuity. File tax extension for 2011 What is not covered in this chapter. File tax extension for 2011   The following topics are not discussed in this chapter. File tax extension for 2011 The General Rule. File tax extension for 2011   This is the method generally used to determine the tax treatment of pension and annuity income from nonqualified plans (including commercial annuities). File tax extension for 2011 For a qualified plan, you generally cannot use the General Rule unless your annuity starting date is before November 19, 1996. File tax extension for 2011 For more information about the General Rule, see Publication 939, General Rule for Pensions and Annuities. File tax extension for 2011 Individual retirement arrangements (IRAs). File tax extension for 2011   Information on the tax treatment of amounts you receive from an IRA is in chapter 17. File tax extension for 2011 Civil service retirement benefits. File tax extension for 2011    If you are retired from the federal government (regular, phased, or disability retirement), see Publication 721, Tax Guide to U. File tax extension for 2011 S. File tax extension for 2011 Civil Service Retirement Benefits. File tax extension for 2011 Publication 721 also covers the information that you need if you are the survivor or beneficiary of a federal employee or retiree who died. File tax extension for 2011 Useful Items - You may want to see: Publication 575 Pension and Annuity Income 721 Tax Guide to U. File tax extension for 2011 S. File tax extension for 2011 Civil Service Retirement Benefits 939 General Rule for Pensions and Annuities Form (and Instructions) W-4P Withholding Certificate for Pension or Annuity Payments 1099-R Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. File tax extension for 2011 4972 Tax on Lump-Sum Distributions 5329 Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts General Information Designated Roth accounts. File tax extension for 2011   A designated Roth account is a separate account created under a qualified Roth contribution program to which participants may elect to have part or all of their elective deferrals to a 401(k), 403(b), or 457(b) plan designated as Roth contributions. File tax extension for 2011 Elective deferrals that are designated as Roth contributions are included in your income. File tax extension for 2011 However, qualified distributions are not included in your income. File tax extension for 2011 See Publication 575 for more information. File tax extension for 2011 In-plan rollovers to designated Roth accounts. File tax extension for 2011   If you are a participant in a 401(k), 403(b), or 457(b) plan, your plan may permit you to roll over amounts in those plans to a designated Roth account within the same plan. File tax extension for 2011 The rollover of any untaxed amounts must be included in income. File tax extension for 2011 See Publication 575 for more information. File tax extension for 2011 More than one program. File tax extension for 2011   If you receive benefits from more than one program under a single trust or plan of your employer, such as a pension plan and a profit-sharing plan, you may have to figure the taxable part of each pension or annuity contract separately. File tax extension for 2011 Your former employer or the plan administrator should be able to tell you if you have more than one pension or annuity contract. File tax extension for 2011 Section 457 deferred compensation plans. File tax extension for 2011    If you work for a state or local government or for a tax-exempt organization, you may be able to participate in a section 457 deferred compensation plan. File tax extension for 2011 If your plan is an eligible plan, you are not taxed currently on pay that is deferred under the plan or on any earnings from the plan's investment of the deferred pay. File tax extension for 2011 You are generally taxed on amounts deferred in an eligible state or local government plan only when they are distributed from the plan. File tax extension for 2011 You are taxed on amounts deferred in an eligible tax-exempt organization plan when they are distributed or otherwise made available to you. File tax extension for 2011   Your 457(b) plan may have a designated Roth account option. File tax extension for 2011 If so, you may be able to roll over amounts to the designated Roth account or make contributions. File tax extension for 2011 Elective deferrals to a designated Roth account are included in your income. File tax extension for 2011 Qualified distributions from a designated Roth account are not subject to tax. File tax extension for 2011   This chapter covers the tax treatment of benefits under eligible section 457 plans, but it does not cover the treatment of deferrals. File tax extension for 2011 For information on deferrals under section 457 plans, see Retirement Plan Contributions under Employee Compensation in Publication 525, Taxable and Nontaxable Income. File tax extension for 2011   For general information on these deferred compensation plans, see Section 457 Deferred Compensation Plans in Publication 575. File tax extension for 2011 Disability pensions. File tax extension for 2011   If you retired on disability, you generally must include in income any disability pension you receive under a plan that is paid for by your employer. File tax extension for 2011 You must report your taxable disability payments as wages on line 7 of Form 1040 or Form 1040A until you reach minimum retirement age. File tax extension for 2011 Minimum retirement age generally is the age at which you can first receive a pension or annuity if you are not disabled. File tax extension for 2011    You may be entitled to a tax credit if you were permanently and totally disabled when you retired. File tax extension for 2011 For information on the credit for the elderly or the disabled, see chapter 33. File tax extension for 2011   Beginning on the day after you reach minimum retirement age, payments you receive are taxable as a pension or annuity. File tax extension for 2011 Report the payments on Form 1040, lines 16a and 16b, or on Form 1040A, lines 12a and 12b. File tax extension for 2011    Disability payments for injuries incurred as a direct result of a terrorist attack directed against the United States (or its allies) are not included in income. File tax extension for 2011 For more information about payments to survivors of terrorist attacks, see Publication 3920, Tax Relief for Victims of Terrorist Attacks. File tax extension for 2011   For more information on how to report disability pensions, including military and certain government disability pensions, see chapter 5. File tax extension for 2011 Retired public safety officers. File tax extension for 2011   An eligible retired public safety officer can elect to exclude from income distributions of up to $3,000 made directly from a government retirement plan to the provider of accident, health, or long-term disability insurance. File tax extension for 2011 See Insurance Premiums for Retired Public Safety Officers in Publication 575 for more information. File tax extension for 2011 Railroad retirement benefits. File tax extension for 2011   Part of any railroad retirement benefits you receive is treated for tax purposes as social security benefits, and part is treated as an employee pension. File tax extension for 2011 For information about railroad retirement benefits treated as social security benefits, see Publication 915, Social Security and Equivalent Railroad Retirement Benefits. File tax extension for 2011 For information about railroad retirement benefits treated as an employee pension, see Railroad Retirement Benefits in Publication 575. File tax extension for 2011 Withholding and estimated tax. File tax extension for 2011   The payer of your pension, profit-sharing, stock bonus, annuity, or deferred compensation plan will withhold income tax on the taxable parts of amounts paid to you. File tax extension for 2011 You can tell the payer how much to withhold, or not to withhold, by filing Form W-4P. File tax extension for 2011 If you choose not to have tax withheld, or you do not have enough tax withheld, you may have to pay estimated tax. File tax extension for 2011   If you receive an eligible rollover distribution, you cannot choose not to have tax withheld. File tax extension for 2011 Generally, 20% will be withheld, but no tax will be withheld on a direct rollover of an eligible rollover distribution. File tax extension for 2011 See Direct rollover option under Rollovers, later. File tax extension for 2011   For more information, see Pensions and Annuities under Tax Withholding for 2014 in chapter 4. File tax extension for 2011 Qualified plans for self-employed individuals. File tax extension for 2011   Qualified plans set up by self-employed individuals are sometimes called Keogh or H. File tax extension for 2011 R. File tax extension for 2011 10 plans. File tax extension for 2011 Qualified plans can be set up by sole proprietors, partnerships (but not a partner), and corporations. File tax extension for 2011 They can cover self-employed persons, such as the sole proprietor or partners, as well as regular (common-law) employees. File tax extension for 2011    Distributions from a qualified plan are usually fully taxable because most recipients have no cost basis. File tax extension for 2011 If you have an investment (cost) in the plan, however, your pension or annuity payments from a qualified plan are taxed under the Simplified Method. File tax extension for 2011 For more information about qualified plans, see Publication 560, Retirement Plans for Small Business. File tax extension for 2011 Purchased annuities. File tax extension for 2011   If you receive pension or annuity payments from a privately purchased annuity contract from a commercial organization, such as an insurance company, you generally must use the General Rule to figure the tax-free part of each annuity payment. File tax extension for 2011 For more information about the General Rule, get Publication 939. File tax extension for 2011 Also, see Variable Annuities in Publication 575 for the special provisions that apply to these annuity contracts. File tax extension for 2011 Loans. File tax extension for 2011   If you borrow money from your retirement plan, you must treat the loan as a nonperiodic distribution from the plan unless certain exceptions apply. File tax extension for 2011 This treatment also applies to any loan under a contract purchased under your retirement plan, and to the value of any part of your interest in the plan or contract that you pledge or assign. File tax extension for 2011 This means that you must include in income all or part of the amount borrowed. File tax extension for 2011 Even if you do not have to treat the loan as a nonperiodic distribution, you may not be able to deduct the interest on the loan in some situations. File tax extension for 2011 For details, see Loans Treated as Distributions in Publication 575. File tax extension for 2011 For information on the deductibility of interest, see chapter 23. File tax extension for 2011 Tax-free exchange. File tax extension for 2011   No gain or loss is recognized on an exchange of an annuity contract for another annuity contract if the insured or annuitant remains the same. File tax extension for 2011 However, if an annuity contract is exchanged for a life insurance or endowment contract, any gain due to interest accumulated on the contract is ordinary income. File tax extension for 2011 See Transfers of Annuity Contracts in Publication 575 for more information about exchanges of annuity contracts. File tax extension for 2011 How To Report If you file Form 1040, report your total annuity on line 16a and the taxable part on line 16b. File tax extension for 2011 If your pension or annuity is fully taxable, enter it on line 16b; do not make an entry on line 16a. File tax extension for 2011 If you file Form 1040A, report your total annuity on line 12a and the taxable part on line 12b. File tax extension for 2011 If your pension or annuity is fully taxable, enter it on line 12b; do not make an entry on line 12a. File tax extension for 2011 More than one annuity. File tax extension for 2011   If you receive more than one annuity and at least one of them is not fully taxable, enter the total amount received from all annuities on Form 1040, line 16a, or Form 1040A, line 12a, and enter the taxable part on Form 1040, line 16b, or Form 1040A, line 12b. File tax extension for 2011 If all the annuities you receive are fully taxable, enter the total of all of them on Form 1040, line 16b, or Form 1040A, line 12b. File tax extension for 2011 Joint return. File tax extension for 2011   If you file a joint return and you and your spouse each receive one or more pensions or annuities, report the total of the pensions and annuities on Form 1040, line 16a, or Form 1040A, line 12a, and report the taxable part on Form 1040, line 16b, or Form 1040A, line 12b. File tax extension for 2011 Cost (Investment in the Contract) Before you can figure how much, if any, of a distribution from your pension or annuity plan is taxable, you must determine your cost (your investment in the contract) in the pension or annuity. File tax extension for 2011 Your total cost in the plan includes the total premiums, contributions, or other amounts you paid. File tax extension for 2011 This includes the amounts your employer contributed that were taxable to you when paid. File tax extension for 2011 Cost does not include any amounts you deducted or were excluded from your income. File tax extension for 2011 From this total cost, subtract any refunds of premiums, rebates, dividends, unrepaid loans that were not included in your income, or other tax-free amounts that you received by the later of the annuity starting date or the date on which you received your first payment. File tax extension for 2011 Your annuity starting date is the later of the first day of the first period for which you received a payment or the date the plan's obligations became fixed. File tax extension for 2011 Designated Roth accounts. File tax extension for 2011   Your cost in these accounts is your designated Roth contributions that were included in your income as wages subject to applicable withholding requirements. File tax extension for 2011 Your cost will also include any in-plan Roth rollovers you included in income. File tax extension for 2011 Foreign employment contributions. File tax extension for 2011   If you worked in a foreign country and contributions were made to your retirement plan, special rules apply in determining your cost. File tax extension for 2011 See Foreign employment contributions under Cost (Investment in the Contract) in Publication 575. File tax extension for 2011 Taxation of Periodic Payments Fully taxable payments. File tax extension for 2011   Generally, if you did not pay any part of the cost of your employee pension or annuity and your employer did not withhold part of the cost from your pay while you worked, the amounts you receive each year are fully taxable. File tax extension for 2011 You must report them on your income tax return. File tax extension for 2011 Partly taxable payments. File tax extension for 2011   If you paid part of the cost of your pension or annuity, you are not taxed on the part of the pension or annuity you receive that represents a return of your cost. File tax extension for 2011 The rest of the amount you receive is generally taxable. File tax extension for 2011 You figure the tax-free part of the payment using either the Simplified Method or the General Rule. File tax extension for 2011 Your annuity starting date and whether or not your plan is qualified determine which method you must or may use. File tax extension for 2011   If your annuity starting date is after November 18, 1996, and your payments are from a qualified plan, you must use the Simplified Method. File tax extension for 2011 Generally, you must use the General Rule if your annuity is paid under a nonqualified plan, and you cannot use this method if your annuity is paid under a qualified plan. File tax extension for 2011   If you had more than one partly taxable pension or annuity, figure the tax-free part and the taxable part of each separately. File tax extension for 2011   If your annuity is paid under a qualified plan and your annuity starting date is after July 1, 1986, and before November 19, 1996, you could have chosen to use either the General Rule or the Simplified Method. File tax extension for 2011 Exclusion limit. File tax extension for 2011   Your annuity starting date determines the total amount of annuity payments that you can exclude from your taxable income over the years. File tax extension for 2011 Once your annuity starting date is determined, it does not change. File tax extension for 2011 If you calculate the taxable portion of your annuity payments using the simplified method worksheet, the annuity starting date determines the recovery period for your cost. File tax extension for 2011 That recovery period begins on your annuity starting date and is not affected by the date you first complete the worksheet. File tax extension for 2011 Exclusion limited to cost. File tax extension for 2011   If your annuity starting date is after 1986, the total amount of annuity income that you can exclude over the years as a recovery of the cost cannot exceed your total cost. File tax extension for 2011 Any unrecovered cost at your (or the last annuitant's) death is allowed as a miscellaneous itemized deduction on the final return of the decedent. File tax extension for 2011 This deduction is not subject to the 2%-of-adjusted-gross-income limit. File tax extension for 2011 Exclusion not limited to cost. File tax extension for 2011   If your annuity starting date is before 1987, you can continue to take your monthly exclusion for as long as you receive your annuity. File tax extension for 2011 If you chose a joint and survivor annuity, your survivor can continue to take the survivor's exclusion figured as of the annuity starting date. File tax extension for 2011 The total exclusion may be more than your cost. File tax extension for 2011 Simplified Method Under the Simplified Method, you figure the tax-free part of each annuity payment by dividing your cost by the total number of anticipated monthly payments. File tax extension for 2011 For an annuity that is payable for the lives of the annuitants, this number is based on the annuitants' ages on the annuity starting date and is determined from a table. File tax extension for 2011 For any other annuity, this number is the number of monthly annuity payments under the contract. File tax extension for 2011 Who must use the Simplified Method. File tax extension for 2011   You must use the Simplified Method if your annuity starting date is after November 18, 1996, and you both: Receive pension or annuity payments from a qualified employee plan, qualified employee annuity, or a tax-sheltered annuity (403(b)) plan, and On your annuity starting date, you were either under age 75, or entitled to less than 5 years of guaranteed payments. File tax extension for 2011 Guaranteed payments. File tax extension for 2011   Your annuity contract provides guaranteed payments if a minimum number of payments or a minimum amount (for example, the amount of your investment) is payable even if you and any survivor annuitant do not live to receive the minimum. File tax extension for 2011 If the minimum amount is less than the total amount of the payments you are to receive, barring death, during the first 5 years after payments begin (figured by ignoring any payment increases), you are entitled to less than 5 years of guaranteed payments. File tax extension for 2011 How to use the Simplified Method. File tax extension for 2011    Complete the Simplified Method Worksheet in Publication 575 to figure your taxable annuity for 2013. File tax extension for 2011 Single-life annuity. File tax extension for 2011    If your annuity is payable for your life alone, use Table 1 at the bottom of the worksheet to determine the total number of expected monthly payments. File tax extension for 2011 Enter on line 3 the number shown for your age at the annuity starting date. File tax extension for 2011 Multiple-lives annuity. File tax extension for 2011   If your annuity is payable for the lives of more than one annuitant, use Table 2 at the bottom of the worksheet to determine the total number of expected monthly payments. File tax extension for 2011 Enter on line 3 the number shown for the combined ages of you and the youngest survivor annuitant at the annuity starting date. File tax extension for 2011   However, if your annuity starting date is before 1998, do not use Table 2 and do not combine the annuitants' ages. File tax extension for 2011 Instead you must use Table 1 and enter on line 3 the number shown for the primary annuitant's age on the annuity starting date. File tax extension for 2011    Be sure to keep a copy of the completed worksheet; it will help you figure your taxable annuity next year. File tax extension for 2011 Example. File tax extension for 2011 Bill Smith, age 65, began receiving retirement benefits in 2013, under a joint and survivor annuity. File tax extension for 2011 Bill's annuity starting date is January 1, 2013. File tax extension for 2011 The benefits are to be paid for the joint lives of Bill and his wife Kathy, age 65. File tax extension for 2011 Bill had contributed $31,000 to a qualified plan and had received no distributions before the annuity starting date. File tax extension for 2011 Bill is to receive a retirement benefit of $1,200 a month, and Kathy is to receive a monthly survivor benefit of $600 upon Bill's death. File tax extension for 2011 Bill must use the Simplified Method to figure his taxable annuity because his payments are from a qualified plan and he is under age 75. File tax extension for 2011 Because his annuity is payable over the lives of more than one annuitant, he uses his and Kathy's combined ages and Table 2 at the bottom of the worksheet in completing line 3 of the worksheet. File tax extension for 2011 His completed worksheet is shown in Worksheet 10-A. File tax extension for 2011 Bill's tax-free monthly amount is $100 ($31,000 ÷ 310) as shown on line 4 of the worksheet. File tax extension for 2011 Upon Bill's death, if Bill has not recovered the full $31,000 investment, Kathy will also exclude $100 from her $600 monthly payment. File tax extension for 2011 The full amount of any annuity payments received after 310 payments are paid must be included in gross income. File tax extension for 2011 If Bill and Kathy die before 310 payments are made, a miscellaneous itemized deduction will be allowed for the unrecovered cost on the final income tax return of the last to die. File tax extension for 2011 This deduction is not subject to the 2%-of-adjusted- gross-income limit. File tax extension for 2011 Worksheet 10-A. File tax extension for 2011 Simplified Method Worksheet for Bill Smith 1. File tax extension for 2011 Enter the total pension or annuity payments received this year. File tax extension for 2011 Also, add this amount to the total for Form 1040, line 16a, or Form 1040A, line 12a 1. File tax extension for 2011 14,400 2. File tax extension for 2011 Enter your cost in the plan (contract) at the annuity starting date plus any death benefit exclusion*. File tax extension for 2011 See Cost (Investment in the Contract) , earlier 2. File tax extension for 2011 31,000       Note: If your annuity starting date was before this year and you completed this worksheet last year, skip line 3 and enter the amount from line 4 of last year's worksheet on line 4 below (even if the amount of your pension or annuity has changed). File tax extension for 2011 Otherwise, go to line 3. File tax extension for 2011         3. File tax extension for 2011 Enter the appropriate number from Table 1 below. File tax extension for 2011 But if your annuity starting date was after 1997 and the payments are for your life and that of your beneficiary, enter the appropriate number from Table 2 below 3. File tax extension for 2011 310     4. File tax extension for 2011 Divide line 2 by the number on line 3 4. File tax extension for 2011 100     5. File tax extension for 2011 Multiply line 4 by the number of months for which this year's payments were made. File tax extension for 2011 If your annuity starting date was before 1987, enter this amount on line 8 below and skip lines 6, 7, 10, and 11. File tax extension for 2011 Otherwise, go to line 6 5. File tax extension for 2011 1,200     6. File tax extension for 2011 Enter any amounts previously recovered tax free in years after 1986. File tax extension for 2011 This is the amount shown on line 10 of your worksheet for last year 6. File tax extension for 2011 -0-     7. File tax extension for 2011 Subtract line 6 from line 2 7. File tax extension for 2011 31,000     8. File tax extension for 2011 Enter the smaller of line 5 or line 7 8. File tax extension for 2011 1,200 9. File tax extension for 2011 Taxable amount for year. File tax extension for 2011 Subtract line 8 from line 1. File tax extension for 2011 Enter the result, but not less than zero. File tax extension for 2011 Also, add this amount to the total for Form 1040, line 16b, or Form 1040A, line 12b 9. File tax extension for 2011 13,200   Note: If your Form 1099-R shows a larger taxable amount, use the amount figured on this line instead. File tax extension for 2011 If you are a retired public safety officer, see Insurance Premiums for Retired Public Safety Officers in Publication 575 before entering an amount on your tax return. File tax extension for 2011     10. File tax extension for 2011 Was your annuity starting date before 1987? □ Yes. File tax extension for 2011 STOP. File tax extension for 2011 Do not complete the rest of this worksheet. File tax extension for 2011  ☑ No. File tax extension for 2011 Add lines 6 and 8. File tax extension for 2011 This is the amount you have recovered tax free through 2013. File tax extension for 2011 You will need this number if you need to fill out this worksheet next year 10. File tax extension for 2011 1,200 11. File tax extension for 2011 Balance of cost to be recovered. File tax extension for 2011 Subtract line 10 from line 2. File tax extension for 2011 If zero, you will not have to complete this worksheet next year. File tax extension for 2011 The payments you receive next year will generally be fully taxable 11. File tax extension for 2011 29,800 TABLE 1 FOR LINE 3 ABOVE   AND your annuity starting date was— IF the age at annuity starting date was. File tax extension for 2011 . File tax extension for 2011 . File tax extension for 2011 before November 19, 1996, enter on line 3. File tax extension for 2011 . File tax extension for 2011 . File tax extension for 2011 after November 18, 1996, enter on line 3. File tax extension for 2011 . File tax extension for 2011 . File tax extension for 2011 55 or under 300 360 56–60 260 310 61–65 240 260 66–70 170 210 71 or older 120 160 TABLE 2 FOR LINE 3 ABOVE IF the combined ages at annuity starting date were. File tax extension for 2011 . File tax extension for 2011 . File tax extension for 2011   THEN enter on line 3. File tax extension for 2011 . File tax extension for 2011 . File tax extension for 2011 110 or under   410 111–120   360 121–130   310 131–140   260 141 or older   210 * A death benefit exclusion (up to $5,000) applied to certain benefits received by employees who died before August 21, 1996. File tax extension for 2011 Who must use the General Rule. File tax extension for 2011   You must use the General Rule if you receive pension or annuity payments from: A nonqualified plan (such as a private annuity, a purchased commercial annuity, or a nonqualified employee plan), or A qualified plan if you are age 75 or older on your annuity starting date and your annuity payments are guaranteed for at least 5 years. File tax extension for 2011 Annuity starting before November 19, 1996. File tax extension for 2011   If your annuity starting date is after July 1, 1986, and before November 19, 1996, you had to use the General Rule for either circumstance just described. File tax extension for 2011 You also had to use it for any fixed-period annuity. File tax extension for 2011 If you did not have to use the General Rule, you could have chosen to use it. File tax extension for 2011 If your annuity starting date is before July 2, 1986, you had to use the General Rule unless you could use the Three-Year Rule. File tax extension for 2011   If you had to use the General Rule (or chose to use it), you must continue to use it each year that you recover your cost. File tax extension for 2011 Who cannot use the General Rule. File tax extension for 2011   You cannot use the General Rule if you receive your pension or annuity from a qualified plan and none of the circumstances described in the preceding discussions apply to you. File tax extension for 2011 See Who must use the Simplified Method , earlier. File tax extension for 2011 More information. File tax extension for 2011   For complete information on using the General Rule, including the actuarial tables you need, see Publication 939. File tax extension for 2011 Taxation of Nonperiodic Payments Nonperiodic distributions are also known as amounts not received as an annuity. File tax extension for 2011 They include all payments other than periodic payments and corrective distributions. File tax extension for 2011 Examples of nonperiodic payments are cash withdrawals, distributions of current earnings, certain loans, and the value of annuity contracts transferred without full and adequate consideration. File tax extension for 2011 Corrective distributions of excess plan contributions. File tax extension for 2011   Generally, if the contributions made for you during the year to certain retirement plans exceed certain limits, the excess is taxable to you. File tax extension for 2011 To correct an excess, your plan may distribute it to you (along with any income earned on the excess). File tax extension for 2011 For information on plan contribution limits and how to report corrective distributions of excess contributions, see Retirement Plan Contributions under Employee Compensation in Publication 525. File tax extension for 2011 Figuring the taxable amount of nonperiodic payments. File tax extension for 2011   How you figure the taxable amount of a nonperiodic distribution depends on whether it is made before the annuity starting date, or on or after the annuity starting date. File tax extension for 2011 If it is made before the annuity starting date, its tax treatment also depends on whether it is made under a qualified or nonqualified plan. File tax extension for 2011 If it is made under a nonqualified plan, its tax treatment depends on whether it fully discharges the contract, is received under certain life insurance or endowment contracts, or is allocable to an investment you made before August 14, 1982. File tax extension for 2011 Annuity starting date. File tax extension for 2011   The annuity starting date is either the first day of the first period for which you receive an annuity payment under the contract or the date on which the obligation under the contract becomes fixed, whichever is later. File tax extension for 2011 Distribution on or after annuity starting date. File tax extension for 2011   If you receive a nonperiodic payment from your annuity contract on or after the annuity starting date, you generally must include all of the payment in gross income. File tax extension for 2011 Distribution before annuity starting date. File tax extension for 2011   If you receive a nonperiodic distribution before the annuity starting date from a qualified retirement plan, you generally can allocate only part of it to the cost of the contract. File tax extension for 2011 You exclude from your gross income the part that you allocate to the cost. File tax extension for 2011 You include the remainder in your gross income. File tax extension for 2011   If you receive a nonperiodic distribution before the annuity starting date from a plan other than a qualified retirement plan (nonqualified plan), it is allocated first to earnings (the taxable part) and then to the cost of the contract (the tax-free part). File tax extension for 2011 This allocation rule applies, for example, to a commercial annuity contract you bought directly from the issuer. File tax extension for 2011    Distributions from nonqualified plans are subject to the net investment income tax. File tax extension for 2011 See the Instructions for Form 8960. File tax extension for 2011   For more information, see Figuring the Taxable Amount under Taxation of Nonperiodic Payments in Publication 575. File tax extension for 2011 Lump-Sum Distributions This section on lump-sum distributions only applies if the plan participant was born before January 2, 1936. File tax extension for 2011 If the plan participant was born after January 1, 1936, the taxable amount of this nonperiodic payment is reported as discussed earlier. File tax extension for 2011 A lump-sum distribution is the distribution or payment in one tax year of a plan participant's entire balance from all of the employer's qualified plans of one kind (for example, pension, profit-sharing, or stock bonus plans). File tax extension for 2011 A distribution from a nonqualified plan (such as a privately purchased commercial annuity or a section 457 deferred compensation plan of a state or local government or tax-exempt organization) cannot qualify as a lump-sum distribution. File tax extension for 2011 The participant's entire balance from a plan does not include certain forfeited amounts. File tax extension for 2011 It also does not include any deductible voluntary employee contributions allowed by the plan after 1981 and before 1987. File tax extension for 2011 For more information about distributions that do not qualify as lump-sum distributions, see Distributions that do not qualify under Lump-Sum Distributions in Publication 575. File tax extension for 2011 If you receive a lump-sum distribution from a qualified employee plan or qualified employee annuity and the plan participant was born before January 2, 1936, you may be able to elect optional methods of figuring the tax on the distribution. File tax extension for 2011 The part from active participation in the plan before 1974 may qualify as capital gain subject to a 20% tax rate. File tax extension for 2011 The part from participation after 1973 (and any part from participation before 1974 that you do not report as capital gain) is ordinary income. File tax extension for 2011 You may be able to use the 10-year tax option, discussed later, to figure tax on the ordinary income part. File tax extension for 2011 Use Form 4972 to figure the separate tax on a lump-sum distribution using the optional methods. File tax extension for 2011 The tax figured on Form 4972 is added to the regular tax figured on your other income. File tax extension for 2011 This may result in a smaller tax than you would pay by including the taxable amount of the distribution as ordinary income in figuring your regular tax. File tax extension for 2011 How to treat the distribution. File tax extension for 2011   If you receive a lump-sum distribution, you may have the following options for how you treat the taxable part. File tax extension for 2011 Report the part of the distribution from participation before 1974 as a capital gain (if you qualify) and the part from participation after 1973 as ordinary income. File tax extension for 2011 Report the part of the distribution from participation before 1974 as a capital gain (if you qualify) and use the 10-year tax option to figure the tax on the part from participation after 1973 (if you qualify). File tax extension for 2011 Use the 10-year tax option to figure the tax on the total taxable amount (if you qualify). File tax extension for 2011 Roll over all or part of the distribution. File tax extension for 2011 See Rollovers , later. File tax extension for 2011 No tax is currently due on the part rolled over. File tax extension for 2011 Report any part not rolled over as ordinary income. File tax extension for 2011 Report the entire taxable part of the distribution as ordinary income on your tax return. File tax extension for 2011   The first three options are explained in the following discussions. File tax extension for 2011 Electing optional lump-sum treatment. File tax extension for 2011   You can choose to use the 10-year tax option or capital gain treatment only once after 1986 for any plan participant. File tax extension for 2011 If you make this choice, you cannot use either of these optional treatments for any future distributions for the participant. File tax extension for 2011 Taxable and tax-free parts of the distribution. File tax extension for 2011    The taxable part of a lump-sum distribution is the employer's contributions and income earned on your account. File tax extension for 2011 You may recover your cost in the lump sum and any net unrealized appreciation (NUA) in employer securities tax free. File tax extension for 2011 Cost. File tax extension for 2011   In general, your cost is the total of: The plan participant's nondeductible contributions to the plan, The plan participant's taxable costs of any life insurance contract distributed, Any employer contributions that were taxable to the plan participant, and Repayments of any loans that were taxable to the plan participant. File tax extension for 2011 You must reduce this cost by amounts previously distributed tax free. File tax extension for 2011 Net unrealized appreciation (NUA). File tax extension for 2011   The NUA in employer securities (box 6 of Form 1099-R) received as part of a lump-sum distribution is generally tax free until you sell or exchange the securities. File tax extension for 2011 (For more information, see Distributions of employer securities under Taxation of Nonperiodic Payments in Publication 575. File tax extension for 2011 ) Capital Gain Treatment Capital gain treatment applies only to the taxable part of a lump-sum distribution resulting from participation in the plan before 1974. File tax extension for 2011 The amount treated as capital gain is taxed at a 20% rate. File tax extension for 2011 You can elect this treatment only once for any plan participant, and only if the plan participant was born before January 2, 1936. File tax extension for 2011 Complete Part II of Form 4972 to choose the 20% capital gain election. File tax extension for 2011 For more information, see Capital Gain Treatment under Lump-Sum Distributions in Publication 575. File tax extension for 2011 10-Year Tax Option The 10-year tax option is a special formula used to figure a separate tax on the ordinary income part of a lump-sum distribution. File tax extension for 2011 You pay the tax only once, for the year in which you receive the distribution, not over the next 10 years. File tax extension for 2011 You can elect this treatment only once for any plan participant, and only if the plan participant was born before January 2, 1936. File tax extension for 2011 The ordinary income part of the distribution is the amount shown in box 2a of the Form 1099-R given to you by the payer, minus the amount, if any, shown in box 3. File tax extension for 2011 You also can treat the capital gain part of the distribution (box 3 of Form 1099-R) as ordinary income for the 10-year tax option if you do not choose capital gain treatment for that part. File tax extension for 2011 Complete Part III of Form 4972 to choose the 10-year tax option. File tax extension for 2011 You must use the special Tax Rate Schedule shown in the instructions for Part III to figure the tax. File tax extension for 2011 Publication 575 illustrates how to complete Form 4972 to figure the separate tax. File tax extension for 2011 Rollovers If you withdraw cash or other assets from a qualified retirement plan in an eligible rollover distribution, you can defer tax on the distribution by rolling it over to another qualified retirement plan or a traditional IRA. File tax extension for 2011 For this purpose, the following plans are qualified retirement plans. File tax extension for 2011 A qualified employee plan. File tax extension for 2011 A qualified employee annuity. File tax extension for 2011 A tax-sheltered annuity plan (403(b) plan). File tax extension for 2011 An eligible state or local government section 457 deferred compensation plan. File tax extension for 2011 Eligible rollover distributions. File tax extension for 2011   Generally, an eligible rollover distribution is any distribution of all or any part of the balance to your credit in a qualified retirement plan. File tax extension for 2011 For information about exceptions to eligible rollover distributions, see Publication 575. File tax extension for 2011 Rollover of nontaxable amounts. File tax extension for 2011   You may be able to roll over the nontaxable part of a distribution (such as your after-tax contributions) made to another qualified retirement plan that is a qualified employee plan or a 403(b) plan, or to a traditional or Roth IRA. File tax extension for 2011 The transfer must be made either through a direct rollover to a qualified plan or 403(b) plan that separately accounts for the taxable and nontaxable parts of the rollover or through a rollover to a traditional or Roth IRA. File tax extension for 2011   If you roll over only part of a distribution that includes both taxable and nontaxable amounts, the amount you roll over is treated as coming first from the taxable part of the distribution. File tax extension for 2011   Any after-tax contributions that you roll over into your traditional IRA become part of your basis (cost) in your IRAs. File tax extension for 2011 To recover your basis when you take distributions from your IRA, you must complete Form 8606 for the year of the distribution. File tax extension for 2011 For more information, see the Form 8606 instructions. File tax extension for 2011 Direct rollover option. File tax extension for 2011   You can choose to have any part or all of an eligible rollover distribution paid directly to another qualified retirement plan that accepts rollover distributions or to a traditional or Roth IRA. File tax extension for 2011 If you choose the direct rollover option, or have an automatic rollover, no tax will be withheld from any part of the distribution that is directly paid to the trustee of the other plan. File tax extension for 2011 Payment to you option. File tax extension for 2011   If an eligible rollover distribution is paid to you, 20% generally will be withheld for income tax. File tax extension for 2011 However, the full amount is treated as distributed to you even though you actually receive only 80%. File tax extension for 2011 You generally must include in income any part (including the part withheld) that you do not roll over within 60 days to another qualified retirement plan or to a traditional or Roth IRA. File tax extension for 2011 (See Pensions and Annuities under Tax Withholding for 2014 in chapter 4. File tax extension for 2011 )    If you decide to roll over an amount equal to the distribution before withholding, your contribution to the new plan or IRA must include other money (for example, from savings or amounts borrowed) to replace the amount withheld. File tax extension for 2011 Time for making rollover. File tax extension for 2011   You generally must complete the rollover of an eligible rollover distribution paid to you by the 60th day following the day on which you receive the distribution from your employer's plan. File tax extension for 2011 (If an amount distributed to you becomes a frozen deposit in a financial institution during the 60-day period after you receive it, the rollover period is extended for the period during which the distribution is in a frozen deposit in a financial institution. File tax extension for 2011 )   The IRS may waive the 60-day requirement where the failure to do so would be against equity or good conscience, such as in the event of a casualty, disaster, or other event beyond your reasonable control. File tax extension for 2011   The administrator of a qualified plan must give you a written explanation of your distribution options within a reasonable period of time before making an eligible rollover distribution. File tax extension for 2011 Qualified domestic relations order (QDRO). File tax extension for 2011   You may be able to roll over tax free all or part of a distribution from a qualified retirement plan that you receive under a QDRO. File tax extension for 2011 If you receive the distribution as an employee's spouse or former spouse (not as a nonspousal beneficiary), the rollover rules apply to you as if you were the employee. File tax extension for 2011 You can roll over the distribution from the plan into a traditional IRA or to another eligible retirement plan. File tax extension for 2011 See Rollovers in Publication 575 for more information on benefits received under a QDRO. File tax extension for 2011 Rollover by surviving spouse. File tax extension for 2011   You may be able to roll over tax free all or part of a distribution from a qualified retirement plan you receive as the surviving spouse of a deceased employee. File tax extension for 2011 The rollover rules apply to you as if you were the employee. File tax extension for 2011 You can roll over a distribution into a qualified retirement plan or a traditional or Roth IRA. File tax extension for 2011 For a rollover to a Roth IRA, see Rollovers to Roth IRAs , later. File tax extension for 2011    A distribution paid to a beneficiary other than the employee's surviving spouse is generally not an eligible rollover distribution. File tax extension for 2011 However, see Rollovers by nonspouse beneficiary next. File tax extension for 2011 Rollovers by nonspouse beneficiary. File tax extension for 2011   If you are a designated beneficiary (other than a surviving spouse) of a deceased employee, you may be able to roll over tax free all or a portion of a distribution you receive from an eligible retirement plan of the employee. File tax extension for 2011 The distribution must be a direct trustee-to-trustee transfer to your traditional or Roth IRA that was set up to receive the distribution. File tax extension for 2011 The transfer will be treated as an eligible rollover distribution and the receiving plan will be treated as an inherited IRA. File tax extension for 2011 For information on inherited IRAs, see What if You Inherit an IRA? in chapter 1 of Publication 590, Individual Retirement Arrangements (IRAs). File tax extension for 2011 Retirement bonds. File tax extension for 2011   If you redeem retirement bonds purchased under a qualified bond purchase plan, you can roll over the proceeds that exceed your basis tax free into an IRA (as discussed in Publication 590) or a qualified employer plan. File tax extension for 2011 Designated Roth accounts. File tax extension for 2011   You can roll over an eligible rollover distribution from a designated Roth account into another designated Roth account or a Roth IRA. File tax extension for 2011 If you want to roll over the part of the distribution that is not included in income, you must make a direct rollover of the entire distribution or you can roll over the entire amount (or any portion) to a Roth IRA. File tax extension for 2011 For more information on rollovers from designated Roth accounts, see Rollovers in Publication 575. File tax extension for 2011 In-plan rollovers to designated Roth accounts. File tax extension for 2011   If you are a plan participant in a 401(k), 403(b), or 457(b) plan, your plan may permit you to roll over amounts in those plans to a designated Roth account within the same plan. File tax extension for 2011 The rollover of any untaxed amounts must be included in income. File tax extension for 2011 See Designated Roth accounts under Rollovers in Publication 575 for more information. File tax extension for 2011 Rollovers to Roth IRAs. File tax extension for 2011   You can roll over distributions directly from a qualified retirement plan (other than a designated Roth account) to a Roth IRA. File tax extension for 2011   You must include in your gross income distributions from a qualified retirement plan (other than a designated Roth account) that you would have had to include in income if you had not rolled them over into a Roth IRA. File tax extension for 2011 You do not include in gross income any part of a distribution from a qualified retirement plan that is a return of contributions to the plan that were taxable to you when paid. File tax extension for 2011 In addition, the 10% tax on early distributions does not apply. File tax extension for 2011 More information. File tax extension for 2011   For more information on the rules for rolling over distributions, see Rollovers in Publication 575. File tax extension for 2011 Special Additional Taxes To discourage the use of pension funds for purposes other than normal retirement, the law imposes additional taxes on early distributions of those funds and on failures to withdraw the funds timely. File tax extension for 2011 Ordinarily, you will not be subject to these taxes if you roll over all early distributions you receive, as explained earlier, and begin drawing out the funds at a normal retirement age, in reasonable amounts over your life expectancy. File tax extension for 2011 These special additional taxes are the taxes on: Early distributions, and Excess accumulation (not receiving minimum distributions). File tax extension for 2011 These taxes are discussed in the following sections. File tax extension for 2011 If you must pay either of these taxes, report them on Form 5329. File tax extension for 2011 However, you do not have to file Form 5329 if you owe only the tax on early distributions and your Form 1099-R correctly shows a “1” in box 7. File tax extension for 2011 Instead, enter 10% of the taxable part of the distribution on Form 1040, line 58 and write “No” under the heading “Other Taxes” to the left of line 58. File tax extension for 2011 Even if you do not owe any of these taxes, you may have to complete Form 5329 and attach it to your Form 1040. File tax extension for 2011 This applies if you meet an exception to the tax on early distributions but box 7 of your Form 1099-R does not indicate an exception. File tax extension for 2011 Tax on Early Distributions Most distributions (both periodic and nonperiodic) from qualified retirement plans and nonqualified annuity contracts made to you before you reach age 59½ are subject to an additional tax of 10%. File tax extension for 2011 This tax applies to the part of the distribution that you must include in gross income. File tax extension for 2011 For this purpose, a qualified retirement plan is: A qualified employee plan, A qualified employee annuity plan, A tax-sheltered annuity plan, or An eligible state or local government section 457 deferred compensation plan (to the extent that any distribution is attributable to amounts the plan received in a direct transfer or rollover from one of the other plans listed here or an IRA). File tax extension for 2011 5% rate on certain early distributions from deferred annuity contracts. File tax extension for 2011   If an early withdrawal from a deferred annuity is otherwise subject to the 10% additional tax, a 5% rate may apply instead. File tax extension for 2011 A 5% rate applies to distributions under a written election providing a specific schedule for the distribution of your interest in the contract if, as of March 1, 1986, you had begun receiving payments under the election. File tax extension for 2011 On line 4 of Form 5329, multiply the line 3 amount by 5% instead of 10%. File tax extension for 2011 Attach an explanation to your return. File tax extension for 2011 Distributions from Roth IRAs allocable to a rollover from an eligible retirement plan within the 5-year period. File tax extension for 2011   If, within the 5-year period starting with the first day of your tax year in which you rolled over an amount from an eligible retirement plan to a Roth IRA, you take a distribution from the Roth IRA, you may have to pay the additional 10% tax on early distributions. File tax extension for 2011 You generally must pay the 10% additional tax on any amount attributable to the part of the rollover that you had to include in income. File tax extension for 2011 The additional tax is figured on Form 5329. File tax extension for 2011 For more information, see Form 5329 and its instructions. File tax extension for 2011 For information on qualified distributions from Roth IRAs, see Additional Tax on Early Distributions in chapter 2 of Publication 590. File tax extension for 2011 Distributions from designated Roth accounts allocable to in-plan Roth rollovers within the 5-year period. File tax extension for 2011   If, within the 5-year period starting with the first day of your tax year in which you rolled over an amount from a 401(k), 403(b), or 457(b) plan to a designated Roth account, you take a distribution from the designated Roth account, you may have to pay the additional 10% tax on early distributions. File tax extension for 2011 You generally must pay the 10% additional tax on any amount attributable to the part of the in-plan rollover that you had to include in income. File tax extension for 2011 The additional tax is figured on Form 5329. File tax extension for 2011 For more information, see Form 5329 and its instructions. File tax extension for 2011 For information on qualified distributions from designated Roth accounts, see Designated Roth accounts under Taxation of Periodic Payments in Publication 575. File tax extension for 2011 Exceptions to tax. File tax extension for 2011    Certain early distributions are excepted from the early distribution tax. File tax extension for 2011 If the payer knows that an exception applies to your early distribution, distribution code “2,” “3,” or “4” should be shown in box 7 of your Form 1099-R and you do not have to report the distribution on Form 5329. File tax extension for 2011 If an exception applies but distribution code “1” (early distribution, no known exception) is shown in box 7, you must file Form 5329. File tax extension for 2011 Enter the taxable amount of the distribution shown in box 2a of your Form 1099-R on line 1 of Form 5329. File tax extension for 2011 On line 2, enter the amount that can be excluded and the exception number shown in the Form 5329 instructions. File tax extension for 2011    If distribution code “1” is incorrectly shown on your Form 1099-R for a distribution received when you were age 59½ or older, include that distribution on Form 5329. File tax extension for 2011 Enter exception number “12” on line 2. File tax extension for 2011 General exceptions. File tax extension for 2011   The tax does not apply to distributions that are: Made as part of a series of substantially equal periodic payments (made at least annually) for your life (or life expectancy) or the joint lives (or joint life expectancies) of you and your designated beneficiary (if from a qualified retirement plan, the payments must begin after your separation from service), Made because you are totally and permanently disabled, or Made on or after the death of the plan participant or contract holder. File tax extension for 2011 Additional exceptions for qualified retirement plans. File tax extension for 2011   The tax does not apply to distributions that are: From a qualified retirement plan (other than an IRA) after your separation from service in or after the year you reached age 55 (age 50 for qualified public safety employees), From a qualified retirement plan (other than an IRA) to an alternate payee under a qualified domestic relations order, From a qualified retirement plan to the extent you have deductible medical expenses that exceed 10% (or 7. File tax extension for 2011 5% if you or your spouse are age 65 or older) of your adjusted gross income, whether or not you itemize your deductions for the year, From an employer plan under a written election that provides a specific schedule for distribution of your entire interest if, as of March 1, 1986, you had separated from service and had begun receiving payments under the election, From an employee stock ownership plan for dividends on employer securities held by the plan, From a qualified retirement plan due to an IRS levy of the plan, From elective deferral accounts under 401(k) or 403(b) plans or similar arrangements that are qualified reservist distributions, or Phased retirement annuity payments made to federal employees. File tax extension for 2011 See Pub. File tax extension for 2011 721 for more information on the phased retirement program. File tax extension for 2011 Qualified public safety employees. File tax extension for 2011   If you are a qualified public safety employee, distributions made from a governmental defined benefit pension plan are not subject to the additional tax on early distributions. File tax extension for 2011 You are a qualified public safety employee if you provide police protection, firefighting services, or emergency medical services for a state or municipality, and you separated from service in or after the year you attained age 50. File tax extension for 2011 Qualified reservist distributions. File tax extension for 2011   A qualified reservist distribution is not subject to the additional tax on early distributions. File tax extension for 2011 A qualified reservist distribution is a distribution (a) from elective deferrals under a section 401(k) or 403(b) plan, or a similar arrangement, (b) to an individual ordered or called to active duty (because he or she is a member of a reserve component) for a period of more than 179 days or for an indefinite period, and (c) made during the period beginning on the date of the order or call and ending at the close of the active duty period. File tax extension for 2011 You must have been ordered or called to active duty after September 11, 2001. File tax extension for 2011 For more information, see Qualified reservist distributions under Special Additional Taxes in Publication 575. File tax extension for 2011 Additional exceptions for nonqualified annuity contracts. File tax extension for 2011   The tax does not apply to distributions from: A deferred annuity contract to the extent allocable to investment in the contract before August 14, 1982, A deferred annuity contract under a qualified personal injury settlement, A deferred annuity contract purchased by your employer upon termination of a qualified employee plan or qualified employee annuity plan and held by your employer until your separation from service, or An immediate annuity contract (a single premium contract providing substantially equal annuity payments that start within 1 year from the date of purchase and are paid at least annually). File tax extension for 2011 Tax on Excess Accumulation To make sure that most of your retirement benefits are paid to you during your lifetime, rather than to your beneficiaries after your death, the payments that you receive from qualified retirement plans must begin no later than your required beginning date (defined later). File tax extension for 2011 The payments each year cannot be less than the required minimum distribution. File tax extension for 2011 Required distributions not made. File tax extension for 2011   If the actual distributions to you in any year are less than the minimum required distribution for that year, you are subject to an additional tax. File tax extension for 2011 The tax equals 50% of the part of the required minimum distribution that was not distributed. File tax extension for 2011   For this purpose, a qualified retirement plan includes: A qualified employee plan, A qualified employee annuity plan, An eligible section 457 deferred compensation plan, or A tax-sheltered annuity plan (403(b) plan)(for benefits accruing after 1986). File tax extension for 2011 Waiver. File tax extension for 2011   The tax may be waived if you establish that the shortfall in distributions was due to reasonable error and that reasonable steps are being taken to remedy the shortfall. File tax extension for 2011 See the Instructions for Form 5329 for the procedure to follow if you believe you qualify for a waiver of this tax. File tax extension for 2011 State insurer delinquency proceedings. File tax extension for 2011   You might not receive the minimum distribution because assets are invested in a contract issued by an insurance company in state insurer delinquency proceedings. File tax extension for 2011 If your payments are reduced below the minimum due to these proceedings, you should contact your plan administrator. File tax extension for 2011 Under certain conditions, you will not have to pay the 50% excise tax. File tax extension for 2011 Required beginning date. File tax extension for 2011   Unless the rule for 5% owners applies, you generally must begin to receive distributions from your qualified retirement plan by April 1 of the year that follows the later of: The calendar year in which you reach age 70½, or The calendar year in which you retire from employment with the employer maintaining the plan. File tax extension for 2011 However, your plan may require you to begin to receive distributions by April 1 of the year that follows the year in which you reach age 70½, even if you have not retired. File tax extension for 2011   If you reached age 70½ in 2013, you may be required to receive your first distribution by April 1, 2014. File tax extension for 2011 Your required distribution then must be made for 2014 by December 31, 2014. File tax extension for 2011 5% owners. File tax extension for 2011   If you are a 5% owner, you must begin to receive distributions by April 1 of the year that follows the calendar year in which you reach age 70½. File tax extension for 2011   You are a 5% owner if, for the plan year ending in the calendar year in which you reach age 70½, you own (or are considered to own under section 318 of the Internal Revenue Code) more than 5% of the outstanding stock (or more than 5% of the total voting power of all stock) of the employer, or more than 5% of the capital or profits interest in the employer. File tax extension for 2011 Age 70½. File tax extension for 2011   You reach age 70½ on the date that is 6 calendar months after the date of your 70th birthday. File tax extension for 2011   For example, if you are retired and your 70th birthday was on June 30, 2013, you were age 70½ on December 30, 2013. File tax extension for 2011 If your 70th birthday was on July 1, 2013, you reached age 70½ on January 1, 2014. File tax extension for 2011 Required distributions. File tax extension for 2011   By the required beginning date, as explained earlier, you must either: Receive your entire interest in the plan (for a tax-sheltered annuity, your entire benefit accruing after 1986), or Begin receiving periodic distributions in annual amounts calculated to distribute your entire interest (for a tax-sheltered annuity, your entire benefit accruing after 1986) over your life or life expectancy or over the joint lives or joint life expectancies of you and a designated beneficiary (or over a shorter period). File tax extension for 2011 Additional information. File tax extension for 2011   For more information on this rule, see Tax on Excess Accumulation in Publication 575. File tax extension for 2011 Form 5329. File tax extension for 2011   You must file Form 5329 if you owe tax because you did not receive a minimum required distribution from your qualified retirement plan. File tax extension for 2011 Survivors and Beneficiaries Generally, a survivor or beneficiary reports pension or annuity income in the same way the plan participant would have. File tax extension for 2011 However, some special rules apply. File tax extension for 2011 See Publication 575 for more information. File tax extension for 2011 Survivors of employees. File tax extension for 2011   If you are entitled to receive a survivor annuity on the death of an employee who died, you can exclude part of each annuity payment as a tax-free recovery of the employee's investment in the contract. File tax extension for 2011 You must figure the taxable and tax-free parts of your annuity payments using the method that applies as if you were the employee. File tax extension for 2011 Survivors of retirees. File tax extension for 2011   If you receive benefits as a survivor under a joint and survivor annuity, include those benefits in income in the same way the retiree would have included them in income. File tax extension for 2011 If you receive a survivor annuity because of the death of a retiree who had reported the annuity under the Three-Year Rule and recovered all of the cost tax free, your survivor payments are fully taxable. File tax extension for 2011    If the retiree was reporting the annuity payments under the General Rule, you must apply the same exclusion percentage to your initial survivor annuity payment called for in the contract. File tax extension for 2011 The resulting tax-free amount will then remain fixed. File tax extension for 2011 Any increases in the survivor annuity are fully taxable. File tax extension for 2011    If the retiree was reporting the annuity payments under the Simplified Method, the part of each payment that is tax free is the same as the tax-free amount figured by the retiree at the annuity starting date. File tax extension for 2011 This amount remains fixed even if the annuity payments are increased or decreased. File tax extension for 2011 See Simplified Method , earlier. File tax extension for 2011   In any case, if the annuity starting date is after 1986, the total exclusion over the years cannot be more than the cost. File tax extension for 2011 Estate tax deduction. File tax extension for 2011   If your annuity was a joint and survivor annuity that was included in the decedent's estate, an estate tax may have been paid on it. File tax extension for 2011 You can deduct the part of the total estate tax that was based on the annuity. File tax extension for 2011 The deceased annuitant must have died after the annuity starting date. File tax extension for 2011 (For details, see section 1. File tax extension for 2011 691(d)-1 of the regulations. File tax extension for 2011 ) Deduct it in equal amounts over your remaining life expectancy. File tax extension for 2011   If the decedent died before the annuity starting date of a deferred annuity contract and you receive a death benefit under that contract, the amount you receive (either in a lump sum or as periodic payments) in excess of the decedent's cost is included in your gross income as income in respect of a decedent for which you may be able to claim an estate tax deduction. File tax extension for 2011   You can take the estate tax deduction as an itemized deduction on Schedule A, Form 1040. File tax extension for 2011 This deduction is not subject to the 2%-of-adjusted-gross-income limit on miscellaneous deductions. File tax extension for 2011 See Publication 559, Survivors, Executors, and Administrators, for more information on the estate tax deduction. 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