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File taxes 2006 4. File taxes 2006   Reporting Gains and Losses Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: Information Returns Schedule D and Form 8949Long and Short Term Net Gain or Loss Treatment of Capital Losses Capital Gains Tax Rates Form 4797Mark-to-market election. File taxes 2006 Introduction This chapter explains how to report capital gains and losses and ordinary gains and losses from sales, exchanges, and other dispositions of property. File taxes 2006 Although this discussion refers to Schedule D (Form 1040) and Form 8949, many of the rules discussed here also apply to taxpayers other than individuals. File taxes 2006 However, the rules for property held for personal use usually will not apply to taxpayers other than individuals. File taxes 2006 Topics - This chapter discusses: Information returns Schedule D (Form 1040) Form 4797 Form 8949 Useful Items - You may want to see: Publication 550 Investment Income and Expenses 537 Installment Sales Form (and Instructions) Schedule D (Form 1040) Capital Gains and Losses 1099-B Proceeds From Broker and Barter Exchange Transactions 1099-S Proceeds From Real Estate Transactions 4684 Casualties and Thefts 4797 Sales of Business Property 6252 Installment Sale Income 6781 Gains and Losses from Section 1256 Contracts and Straddles 8824 Like-Kind Exchanges 8949 Sales and Other Dispositions of Capital Assets See chapter 5 for information about getting publications and forms. File taxes 2006 Information Returns If you sell or exchange certain assets, you should receive an information return showing the proceeds of the sale. File taxes 2006 This information is also provided to the IRS. File taxes 2006 Form 1099-B. File taxes 2006   If you sold property, such as stocks, bonds, or certain commodities, through a broker, you should receive Form 1099-B, Proceeds From Broker and Barter Exchange Transactions, or a substitute statement from the broker. File taxes 2006 Use the Form 1099-B or a substitute statement to complete Form 8949 and/or Schedule D. File taxes 2006 Whether or not you receive 1099-B, you must report all taxable sales of stock, bonds, commodities, etc. File taxes 2006 on Form 8949 and/or Schedule D, as applicable. File taxes 2006 For more information on figuring gains and losses from these transactions, see chapter 4 in Publication 550. File taxes 2006 For information on reporting the gains and losses, see the Instructions for Form 8949 and the Instructions for Schedule D (Form 1040). File taxes 2006 Form 1099-S. File taxes 2006   An information return must be provided on certain real estate transactions. File taxes 2006 Generally, the person responsible for closing the transaction (the “real estate reporting person”) must report on Form 1099-S sales or exchanges of the following types of property. File taxes 2006 Land (improved or unimproved), including air space. File taxes 2006 An inherently permanent structure, including any residential, commercial, or industrial building. File taxes 2006 A condominium unit and its related fixtures and common elements (including land). File taxes 2006 Stock in a cooperative housing corporation. File taxes 2006 If you sold or exchanged any of the above types of property, the “real estate reporting person” must give you a copy of Form 1099-S or a statement containing the same information as the Form 1099-S. File taxes 2006 The “real estate reporting person” could include the buyer's attorney, your attorney, the title or escrow company, a mortgage lender, your broker, the buyer's broker, or the person acquiring the biggest interest in the property. File taxes 2006   For more information see chapter 4 in Publication 550. File taxes 2006 Also, see the Instructions for Form 8949. File taxes 2006 Schedule D and Form 8949 Form 8949. File taxes 2006   Individuals, corporations, and partnerships, use Form 8949 to report the following. File taxes 2006    Sales or exchanges of capital assets, including stocks, bonds, etc. File taxes 2006 , and real estate (if not reported on another form or schedule such as Form 4684, 4797, 6252, 6781, or 8824). File taxes 2006 Include these transactions even if you did not receive a Form 1099-B or 1099-S. File taxes 2006 Gains from involuntary conversions (other than from casualty or theft) of capital assets not held for business or profit. File taxes 2006 Nonbusiness bad debts. File taxes 2006   Individuals, If you are filing a joint return, complete as many copies of Form 8949 as you need to report all of your and your spouse's transactions. File taxes 2006 You and your spouse may list your transactions on separate forms or you may combine them. File taxes 2006 However, you must include on your Schedule D the totals from all Forms 8949 for both you and your spouse. File taxes 2006    Corporations and electing large partnerships also use Form 8949 to report their share of gain or loss from a partnership, S Corporation, estate or trust. File taxes 2006   Business entities meeting certain criteria, may have an exception to some of the normal requirements for completing Form 8949. File taxes 2006 See the Instructions for Form 8949. File taxes 2006 Schedule D. File taxes 2006    Use Schedule D (Form 1040) to figure the overall gain or loss from transactions reported on Form 8949, and to report certain transactions you do not have to report on Form 8949. File taxes 2006 Before completing Schedule D, you may have to complete other forms as shown below. File taxes 2006    Complete all applicable lines of Form 8949 before completing lines 1b, 2, 3, 8b, 9, or 10 of your applicable Schedule D. File taxes 2006 Enter on Schedule D the combined totals from all your Forms 8949. File taxes 2006 For a sale, exchange, or involuntary conversion of business property, complete Form 4797 (discussed later). File taxes 2006 For a like-kind exchange, complete Form 8824. File taxes 2006 See Reporting the exchange under Like-Kind Exchanges in chapter 1. File taxes 2006 For an installment sale, complete Form 6252. File taxes 2006 See Publication 537. File taxes 2006 For an involuntary conversion due to casualty or theft, complete Form 4684. File taxes 2006 See Publication 547, Casualties, Disasters, and Thefts. File taxes 2006 For a disposition of an interest in, or property used in, an activity to which the at-risk rules apply, complete Form 6198, At-Risk Limitations. File taxes 2006 See Publication 925, Passive Activity and At-Risk Rules. File taxes 2006 For a disposition of an interest in, or property used in, a passive activity, complete Form 8582, Passive Activity Loss Limitations. File taxes 2006 See Publication 925. File taxes 2006 For gains and losses from section 1256 contracts and straddles, complete Form 6781. File taxes 2006 See Publication 550. File taxes 2006 Personal-use property. File taxes 2006   Report gain on the sale or exchange of property held for personal use (such as your home) on Form 8949 and Schedule D (Form 1040), as applicable. File taxes 2006 Loss from the sale or exchange of property held for personal use is not deductible. File taxes 2006 But if you had a loss from the sale or exchange of real estate held for personal use for which you received a Form 1099-S, report the transaction on Form 8949 and Schedule D, even though the loss is not deductible. File taxes 2006 See the Instructions for Schedule D (Form 1040) and the Instructions for Form 8949 for information on how to report the transaction. File taxes 2006 Long and Short Term Where you report a capital gain or loss depends on how long you own the asset before you sell or exchange it. File taxes 2006 The time you own an asset before disposing of it is the holding period. File taxes 2006 If you received a Form 1099-B, (or substitute statement) box 1c may help you determine whether the gain or loss is short-term or long-term. File taxes 2006 If you hold a capital asset 1 year or less, the gain or loss from its disposition is short term. File taxes 2006 Report it in Part I of Form 8949 and/or Schedule D, as applicable. File taxes 2006 If you hold a capital asset longer than 1 year, the gain or loss from its disposition is long term. File taxes 2006 Report it in Part II of Form 8949 and/or Schedule D, as applicable. File taxes 2006   Table 4-1. File taxes 2006 Do I Have a Short-Term or Long-Term Gain or Loss? IF you hold the property. File taxes 2006 . File taxes 2006 . File taxes 2006  THEN you have a. File taxes 2006 . File taxes 2006 . File taxes 2006 1 year or less, Short-term capital gain or  loss. File taxes 2006 More than 1 year, Long-term capital gain or  loss. File taxes 2006 These distinctions are essential to correctly arrive at your net capital gain or loss. File taxes 2006 Capital losses are allowed in full against capital gains plus up to $3,000 of ordinary income. File taxes 2006 See Capital Gains Tax Rates, later. File taxes 2006 Holding period. File taxes 2006   To figure if you held property longer than 1 year, start counting on the day following the day you acquired the property. File taxes 2006 The day you disposed of the property is part of your holding period. File taxes 2006 Example. File taxes 2006 If you bought an asset on June 19, 2012, you should start counting on June 20, 2012. File taxes 2006 If you sold the asset on June 19, 2013, your holding period is not longer than 1 year, but if you sold it on June 20, 2013, your holding period is longer than 1 year. File taxes 2006 Patent property. File taxes 2006   If you dispose of patent property, you generally are considered to have held the property longer than 1 year, no matter how long you actually held it. File taxes 2006 For more information, see Patents in chapter 2. File taxes 2006 Inherited property. File taxes 2006   If you inherit property, you are considered to have held the property longer than 1 year, regardless of how long you actually held it. File taxes 2006 Installment sale. File taxes 2006   The gain from an installment sale of an asset qualifying for long-term capital gain treatment in the year of sale continues to be long term in later tax years. File taxes 2006 If it is short term in the year of sale, it continues to be short term when payments are received in later tax years. File taxes 2006    The date the installment payment is received determines the capital gains rate that should be applied not the date the asset was sold under an installment contract. File taxes 2006 Nontaxable exchange. File taxes 2006   If you acquire an asset in exchange for another asset and your basis for the new asset is figured, in whole or in part, by using your basis in the old property, the holding period of the new property includes the holding period of the old property. File taxes 2006 That is, it begins on the same day as your holding period for the old property. File taxes 2006 Example. File taxes 2006 You bought machinery on December 4, 2012. File taxes 2006 On June 4, 2013, you traded this machinery for other machinery in a nontaxable exchange. File taxes 2006 On December 5, 2013, you sold the machinery you got in the exchange. File taxes 2006 Your holding period for this machinery began on December 5, 2012. File taxes 2006 Therefore, you held it longer than 1 year. File taxes 2006 Corporate liquidation. File taxes 2006   The holding period for property you receive in a liquidation generally starts on the day after you receive it if gain or loss is recognized. File taxes 2006 Profit-sharing plan. File taxes 2006   The holding period of common stock withdrawn from a qualified contributory profit-sharing plan begins on the day following the day the plan trustee delivered the stock to the transfer agent with instructions to reissue the stock in your name. File taxes 2006 Gift. File taxes 2006   If you receive a gift of property and your basis in it is figured using the donor's basis, your holding period includes the donor's holding period. File taxes 2006 For more information on basis, see Publication 551, Basis of Assets. File taxes 2006 Real property. File taxes 2006   To figure how long you held real property, start counting on the day after you received title to it or, if earlier, the day after you took possession of it and assumed the burdens and privileges of ownership. File taxes 2006   However, taking possession of real property under an option agreement is not enough to start the holding period. File taxes 2006 The holding period cannot start until there is an actual contract of sale. File taxes 2006 The holding period of the seller cannot end before that time. File taxes 2006 Repossession. File taxes 2006   If you sell real property but keep a security interest in it and then later repossess it, your holding period for a later sale includes the period you held the property before the original sale, as well as the period after the repossession. File taxes 2006 Your holding period does not include the time between the original sale and the repossession. File taxes 2006 That is, it does not include the period during which the first buyer held the property. File taxes 2006 Nonbusiness bad debts. File taxes 2006   Nonbusiness bad debts are short-term capital losses. File taxes 2006 For information on nonbusiness bad debts, see chapter 4 of Publication 550. File taxes 2006    Net Gain or Loss The totals for short-term capital gains and losses and the totals for long-term capital gains and losses must be figured separately. File taxes 2006 Net short-term capital gain or loss. File taxes 2006   Combine your short-term capital gains and losses, including your share of short-term capital gains or losses from partnerships, S corporations, and fiduciaries and any short-term capital loss carryover. File taxes 2006 Do this by adding all your short-term capital gains. File taxes 2006 Then add all your short-term capital losses. File taxes 2006 Subtract the lesser total from the other. File taxes 2006 The result is your net short-term capital gain or loss. File taxes 2006 Net long-term capital gain or loss. File taxes 2006   Follow the same steps to combine your long-term capital gains and losses. File taxes 2006 Include the following items. File taxes 2006 Net section 1231 gain from Part I, Form 4797, after any adjustment for nonrecaptured section 1231 losses from prior tax years. File taxes 2006 Capital gain distributions from regulated investment companies (mutual funds) and real estate investment trusts. File taxes 2006 Your share of long-term capital gains or losses from partnerships, S corporations, and fiduciaries. File taxes 2006 Any long-term capital loss carryover. File taxes 2006 The result from combining these items with other long-term capital gains and losses is your net long-term capital gain or loss. File taxes 2006 Net gain. File taxes 2006   If the total of your capital gains is more than the total of your capital losses, the difference is taxable. File taxes 2006 Different tax rates may apply to the part that is a net capital gain. File taxes 2006 See Capital Gains Tax Rates, later. File taxes 2006 Net loss. File taxes 2006   If the total of your capital losses is more than the total of your capital gains, the difference is deductible. File taxes 2006 But there are limits on how much loss you can deduct and when you can deduct it. File taxes 2006 See Treatment of Capital Losses, next. File taxes 2006    Treatment of Capital Losses If your capital losses are more than your capital gains, you can deduct the difference as a capital loss deduction even if you do not have ordinary income to offset it. File taxes 2006 The yearly limit on the amount of the capital loss you can deduct is $3,000 ($1,500 if you are married and file a separate return). File taxes 2006 Table 4-2. File taxes 2006 Holding Period for Different Types of Acquisitions Type of acquisition: When your holding period starts: Stocks and bonds bought on a securities market Day after trading date you bought security. File taxes 2006 Ends on trading date you sold security. File taxes 2006 U. File taxes 2006 S. File taxes 2006 Treasury notes and bonds If bought at auction, day after notification of bid acceptance. File taxes 2006 If bought through subscription, day after subscription was submitted. File taxes 2006 Nontaxable exchanges Day after date you acquired old property. File taxes 2006 Gift If your basis is giver's adjusted basis, same day as giver's holding period began. File taxes 2006 If your basis is FMV, day after date of gift. File taxes 2006 Real property bought Generally, day after date you received title to the property. File taxes 2006 Real property repossessed Day after date you originally received title to the property, but does not include time between the original sale and date of repossession. File taxes 2006 Capital loss carryover. File taxes 2006   Generally, you have a capital loss carryover if either of the following situations applies to you. File taxes 2006 Your net loss is more than the yearly limit. File taxes 2006 Your taxable income without your deduction for exemptions is less than zero. File taxes 2006 If either of these situations applies to you for 2013, see Capital Losses under Reporting Capital Gains and Losses in chapter 4 of Publication 550 to figure the amount you can carryover to 2014. File taxes 2006 Example. File taxes 2006 Bob and Gloria Sampson sold property in 2013. File taxes 2006 The sale resulted in a capital loss of $7,000. File taxes 2006 The Sampsons had no other capital transactions. File taxes 2006 On their joint 2013 return, the Sampsons deduct $3,000, the yearly limit. File taxes 2006 They had taxable income of $2,000. File taxes 2006 The unused part of the loss, $4,000 ($7,000 − $3,000), is carried over to 2014. File taxes 2006 If the Sampsons' capital loss had been $2,000, it would not have been more than the yearly limit. File taxes 2006 Their capital loss deduction would have been $2,000. File taxes 2006 They would have no carryover to 2014. File taxes 2006 Short-term and long-term losses. File taxes 2006   When you carry over a loss, it retains its original character as either long term or short term. File taxes 2006 A short-term loss you carry over to the next tax year is added to short-term losses occurring in that year. File taxes 2006 A long-term loss you carry over to the next tax year is added to long-term losses occurring in that year. File taxes 2006 A long-term capital loss you carry over to the next year reduces that year's long-term gains before its short-term gains. File taxes 2006   If you have both short-term and long-term losses, your short-term losses are used first against your allowable capital loss deduction. File taxes 2006 If, after using your short-term losses, you have not reached the limit on the capital loss deduction, use your long-term losses until you reach the limit. File taxes 2006 To figure your capital loss carryover from 2013 to 2014 use the Capital Loss Carryover Worksheet in the 2013 Instructions for Schedule D (Form 1040). File taxes 2006 Joint and separate returns. File taxes 2006   On a joint return, the capital gains and losses of spouses are figured as the gains and losses of an individual. File taxes 2006 If you are married and filing a separate return, your yearly capital loss deduction is limited to $1,500. File taxes 2006 Neither you nor your spouse can deduct any part of the other's loss. File taxes 2006   If you and your spouse once filed separate returns and are now filing a joint return, combine your separate capital loss carryovers. File taxes 2006 However, if you and your spouse once filed jointly and are now filing separately, any capital loss carryover from the joint return can be deducted only on the return of the spouse who actually had the loss. File taxes 2006 Death of taxpayer. File taxes 2006   Capital losses cannot be carried over after a taxpayer's death. File taxes 2006 They are deductible only on the final income tax return filed on the decedent's behalf. File taxes 2006 The yearly limit discussed earlier still applies in this situation. File taxes 2006 Even if the loss is greater than the limit, the decedent's estate cannot deduct the difference or carry it over to following years. File taxes 2006 Corporations. File taxes 2006   A corporation can deduct capital losses only up to the amount of its capital gains. File taxes 2006 In other words, if a corporation has a net capital loss, it cannot be deducted in the current tax year. File taxes 2006 It must be carried to other tax years and deducted from capital gains occurring in those years. File taxes 2006 For more information, see Publication 542. File taxes 2006 Capital Gains Tax Rates The tax rates that apply to a net capital gain are generally lower than the tax rates that apply to other income. File taxes 2006 These lower rates are called the maximum capital gains rates. File taxes 2006 The term “net capital gain” means the amount by which your net long-term capital gain for the year is more than your net short-term capital loss. File taxes 2006 For 2013, the maximum tax rates for individuals are 0%, 15%, 20%, 25%, and 28%. File taxes 2006 Also, individuals, use the Qualified Dividends and Capital Gain Worksheet in the Instructions for Form 1040, or the Schedule D Tax Computation Worksheet in the Instructions for Schedule D (Form 1040) (whichever applies) to figure your tax if you have qualified dividends or net capital gain. File taxes 2006 For more information, see chapter 4 of Publication 550. File taxes 2006 Also see the Instructions for Schedule D (Form 1040). File taxes 2006 Unrecaptured section 1250 gain. File taxes 2006   Generally, this is the part of any long-term capital gain on section 1250 property (real property) that is due to depreciation. File taxes 2006 Unrecaptured section 1250 gain cannot be more than the net section 1231 gain or include any gain otherwise treated as ordinary income. File taxes 2006 Use the worksheet in the Schedule D instructions to figure your unrecaptured section 1250 gain. File taxes 2006 For more information about section 1250 property and net section 1231 gain, see chapter 3. File taxes 2006 Form 4797 Use Form 4797 to report: The sale or exchange of: Property used in your trade or business; Depreciable and amortizable property; Oil, gas, geothermal, or other mineral properties; and Section 126 property. File taxes 2006 The involuntary conversion (from other than casualty or theft) of property used in your trade or business and capital assets held in connection with a trade or business or a transaction entered into for profit. File taxes 2006 The disposition of noncapital assets (other than inventory or property held primarily for sale to customers in the ordinary course of your trade or business). File taxes 2006 The disposition of capital assets not reported on Schedule D. File taxes 2006 The gain or loss (including any related recapture) for partners and S corporation shareholders from certain section 179 property dispositions by partnerships (other than electing large partnerships) and S corporations. File taxes 2006 The computation of recapture amounts under sections 179 and 280F(b)(2) when the business use of section 179 or listed property decreases to 50% or less. File taxes 2006 Gains or losses treated as ordinary gains or losses, if you are a trader in securities or commodities and made a mark-to-market election under Internal Revenue Code section 475(f). File taxes 2006 You can use Form 4797 with Form 1040, 1065, 1120, or 1120S. File taxes 2006 Section 1231 gains and losses. File taxes 2006   Show any section 1231 gains and losses in Part I. File taxes 2006 Carry a net gain to Schedule D (Form 1040) as a long-term capital gain. File taxes 2006 Carry a net loss to Part II of Form 4797 as an ordinary loss. File taxes 2006   If you had any nonrecaptured net section 1231 losses from the preceding 5 tax years, reduce your net gain by those losses and report the amount of the reduction as an ordinary gain in Part II. File taxes 2006 Report any remaining gain on Schedule D (Form 1040). File taxes 2006 See Section 1231 Gains and Losses in chapter 3. File taxes 2006 Ordinary gains and losses. File taxes 2006   Show any ordinary gains and losses in Part II. File taxes 2006 This includes a net loss or a recapture of losses from prior years figured in Part I of Form 4797. File taxes 2006 It also includes ordinary gain figured in Part III. File taxes 2006 Mark-to-market election. File taxes 2006   If you made a mark-to-market election, you should report all gains and losses from trading as ordinary gains and losses in Part II of Form 4797, instead of as capital gains and losses on Form 8949 and Schedule D (Form 1040). File taxes 2006 See the Instructions for Form 4797. File taxes 2006 Also see Special Rules for Traders in Securities, in chapter 4 of Publication 550. File taxes 2006 Ordinary income from depreciation. File taxes 2006   Figure the ordinary income from depreciation on personal property and additional depreciation on real property (as discussed in chapter 3) in Part III. File taxes 2006 Carry the ordinary income to Part II of Form 4797 as an ordinary gain. File taxes 2006 Carry any remaining gain to Part I as section 1231 gain, unless it is from a casualty or theft. File taxes 2006 Carry any remaining gain from a casualty or theft to Form 4684. File taxes 2006 Prev  Up  Next   Home   More Online Publications
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Can I Deduct My Mortgage Related Expenses?

This application will determine if you are able to deduct amounts you paid for Mortgage interest, Points, Mortgage Insurance Premiums and other Mortgage Related Expenses.

Information You Will Need:

  • Your and your spouse's filing status
  • Basic income information including amounts of your income
  • An estimated total (if applicable) of the amounts paid for mortgage interest, points and/or mortgage insurance premiums (normally reported to you on Form 1099-G)

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The File Taxes 2006

File taxes 2006 Internal Revenue Bulletin:  2013-12  March 18, 2013  Rev. File taxes 2006 Proc. File taxes 2006 2013-21 Table of Contents SECTION 1. File taxes 2006 PURPOSE SECTION 2. File taxes 2006 BACKGROUND SECTION 3. File taxes 2006 SCOPE SECTION 4. File taxes 2006 APPLICATION. File taxes 2006 01 Limitations on Depreciation Deductions for Certain Automobiles. File taxes 2006 . File taxes 2006 02 Inclusions in Income of Lessees of Passenger Automobiles. File taxes 2006 SECTION 5. File taxes 2006 EFFECTIVE DATE SECTION 6. File taxes 2006 DRAFTING INFORMATION SECTION 1. File taxes 2006 PURPOSE This revenue procedure provides: (1) limitations on depreciation deductions for owners of passenger automobiles first placed in service by the taxpayer during calendar year 2013, including separate tables of limitations on depreciation deductions for trucks and vans; and (2) the amounts that must be included in income by lessees of passenger automobiles first leased by the taxpayer during calendar year 2013, including a separate table of inclusion amounts for lessees of trucks and vans. File taxes 2006 The tables detailing these depreciation limitations and lessee inclusion amounts reflect the automobile price inflation adjustments required by § 280F(d)(7) of the Internal Revenue Code. File taxes 2006 SECTION 2. File taxes 2006 BACKGROUND . File taxes 2006 01 For owners of passenger automobiles, § 280F(a) imposes dollar limitations on the depreciation deduction for the year the taxpayer places the passenger automobile in service and for each succeeding year. File taxes 2006 For passenger automobiles placed in service after 1988, § 280F(d)(7) requires the Internal Revenue Service to increase the amounts allowable as depreciation deductions by a price inflation adjustment amount. File taxes 2006 The method of calculating this price inflation amount for trucks and vans placed in service in or after calendar year 2003 uses a different CPI “automobile component” (the “new trucks” component) than that used in the price inflation amount calculation for other passenger automobiles (the “new cars” component), resulting in somewhat higher depreciation deductions for trucks and vans. File taxes 2006 This change reflects the higher rate of price inflation for trucks and vans since 1988. File taxes 2006 . File taxes 2006 02 Section 331(a) of the American Taxpayer Relief Act of 2012, Pub. File taxes 2006 L. File taxes 2006 No. File taxes 2006 112-240, 126 Stat. File taxes 2006 2313 (Jan. File taxes 2006 2, 2013) (the “Act”) extended the 50 percent additional first year depreciation deduction under § 168(k) to qualified property acquired by the taxpayer after December 31, 2007, and before January 1, 2014, if no written binding contract for the acquisition of the property existed before January 1, 2008, and if the taxpayer places the property in service generally before January 1, 2014. File taxes 2006 Section 168(k)(2)(F)(i) increases the first year depreciation allowed under § 280F(a)(1)(A)(i) by $8,000 for passenger automobiles to which the additional first year depreciation deduction under § 168(k) (hereinafter, referred to as “§ 168(k) additional first year depreciation deduction”) applies. File taxes 2006 . File taxes 2006 03 Section 168(k)(2)(D)(i) provides that the § 168(k) additional first year depreciation deduction does not apply to any property required to be depreciated under the alternative depreciation system of § 168(g), including property described in § 280F(b)(1). File taxes 2006 Section 168(k)(2)(D)(iii) permits a taxpayer to elect out of the § 168(k) additional first year depreciation deduction for any class of property. File taxes 2006 Section 168(k)(4), as amended by the Act, permits a corporation to elect to increase the alternative minimum tax (“AMT”) credit limitation under § 53(c), instead of claiming the § 168(k) additional first year depreciation deduction for all eligible qualified property placed in service after December 31, 2012, that is round 3 extension property (as defined in § 168(k)(4)(J)(iv)). File taxes 2006 Accordingly, this revenue procedure provides tables for passenger automobiles for which the § 168(k) additional first year depreciation deduction applies. File taxes 2006 This revenue procedure also provides tables for passenger automobiles for which the § 168(k) additional first year depreciation deduction does not apply, either because taxpayer: (1) purchased the passenger automobile used; (2) did not use the passenger automobile during 2013 more than 50 percent for business purposes; (3) elected out of the § 168(k) additional first year depreciation deduction pursuant to § 168(k)(2)(D)(iii); or (4) elected to increase the § 53 AMT credit limitation in lieu of claiming § 168(k) additional first year depreciation. File taxes 2006 . File taxes 2006 04 Section 280F(c) requires a reduction in the deduction allowed to the lessee of a leased passenger automobile. File taxes 2006 The reduction must be substantially equivalent to the limitations on the depreciation deductions imposed on owners of passenger automobiles. File taxes 2006 Under § 1. File taxes 2006 280F-7(a) of the Income Tax Regulations, this reduction requires a lessee to include in gross income an amount determined by applying a formula to the amount obtained from a table. File taxes 2006 One table applies to lessees of trucks and vans and another table applies to all other passenger automobiles. File taxes 2006 Each table shows inclusion amounts for a range of fair market values for each taxable year after the passenger automobile is first leased. File taxes 2006 SECTION 3. File taxes 2006 SCOPE . File taxes 2006 01 The limitations on depreciation deductions in section 4. File taxes 2006 01(2) of this revenue procedure apply to passenger automobiles (other than leased passenger automobiles) that are placed in service by the taxpayer in calendar year 2013, and continue to apply for each taxable year that the passenger automobile remains in service. File taxes 2006 . File taxes 2006 02 The tables in section 4. File taxes 2006 02 of this revenue procedure apply to leased passenger automobiles for which the lease term begins during calendar year 2013. File taxes 2006 Lessees of these passenger automobiles must use these tables to determine the inclusion amount for each taxable year during which the passenger automobile is leased. File taxes 2006 See Rev. File taxes 2006 Proc. File taxes 2006 2008-22, 2008-1 C. File taxes 2006 B. File taxes 2006 658, for passenger automobiles first leased during calendar year 2008; Rev. File taxes 2006 Proc. File taxes 2006 2009-24, 2009-17 I. File taxes 2006 R. File taxes 2006 B. File taxes 2006 885, for passenger automobiles first leased during calendar year 2009; Rev. File taxes 2006 Proc. File taxes 2006 2010-18, 2010-09 I. File taxes 2006 R. File taxes 2006 B. File taxes 2006 427, as amplified and modified by section 4. File taxes 2006 03 of Rev. File taxes 2006 Proc. File taxes 2006 2011-21, 2011-12 I. File taxes 2006 R. File taxes 2006 B. File taxes 2006 560, for passenger automobiles first leased during calendar year 2010; Rev. File taxes 2006 Proc. File taxes 2006 2011-21, for passenger automobiles first leased during calendar year 2011; and Rev. File taxes 2006 Proc. File taxes 2006 2012-23, 2012-14 I. File taxes 2006 R. File taxes 2006 B. File taxes 2006 712, for passenger automobiles first leased during calendar year 2012. File taxes 2006 SECTION 4. File taxes 2006 APPLICATION . File taxes 2006 01 Limitations on Depreciation Deductions for Certain Automobiles. File taxes 2006 (1) Amount of the inflation adjustment. File taxes 2006 (a) Passenger automobiles (other than trucks or vans). File taxes 2006 Under § 280F(d)(7)(B)(i), the automobile price inflation adjustment for any calendar year is the percentage (if any) by which the CPI automobile component for October of the preceding calendar year exceeds the CPI automobile component for October 1987. File taxes 2006 Section 280F(d)(7)(B)(ii) defines the term “CPI automobile component” as the automobile component of the Consumer Price Index for all Urban Consumers published by the Department of Labor. File taxes 2006 The new car component of the CPI was 115. File taxes 2006 2 for October 1987 and 143. File taxes 2006 787 for October 2012. File taxes 2006 The October 2012 index exceeded the October 1987 index by 28. File taxes 2006 587. File taxes 2006 Therefore, the automobile price inflation adjustment for 2013 for passenger automobiles (other than trucks and vans) is 24. File taxes 2006 8 percent (28. File taxes 2006 587/115. File taxes 2006 2 x 100%). File taxes 2006 The dollar limitations in § 280F(a) are multiplied by a factor of 0. File taxes 2006 248, and the resulting increases, after rounding to the nearest $100, are added to the 1988 limitations to give the depreciation limitations applicable to passenger automobiles (other than trucks and vans) for calendar year 2013. File taxes 2006 This adjustment applies to all passenger automobiles (other than trucks and vans) that are first placed in service in calendar year 2013. File taxes 2006 (b) Trucks and vans. File taxes 2006 To determine the dollar limitations for trucks and vans first placed in service during calendar year 2013, the Service uses the new truck component of the CPI instead of the new car component. File taxes 2006 The new truck component of the CPI was 112. File taxes 2006 4 for October 1987 and 149. File taxes 2006 386 for October 2012. File taxes 2006 The October 2012 index exceeded the October 1987 index by 36. File taxes 2006 986. File taxes 2006 Therefore, the automobile price inflation adjustment for 2013 for trucks and vans is 32. File taxes 2006 9 percent (36. File taxes 2006 986/112. File taxes 2006 4 x 100%). File taxes 2006 The dollar limitations in § 280F(a) are multiplied by a factor of 0. File taxes 2006 329, and the resulting increases, after rounding to the nearest $100, are added to the 1988 limitations to give the depreciation limitations for trucks and vans. File taxes 2006 This adjustment applies to all trucks and vans that are first placed in service in calendar year 2013. File taxes 2006 (2) Amount of the limitation. File taxes 2006 Tables 1 through 4 contain the dollar amount of the depreciation limitation for each taxable year for passenger automobiles a taxpayer places in service in calendar year 2013. File taxes 2006 Use Table 1 for a passenger automobile (other than a truck or van), and Table 2 for a truck or van, placed in service in calendar year 2013 for which the § 168(k) additional first year depreciation deduction applies. File taxes 2006 Use Table 3 for a passenger automobile (other than a truck or van), and Table 4 for a truck or van, placed in service in calendar year 2013 for which the § 168(k) additional first year depreciation deduction does not apply. File taxes 2006 REV. File taxes 2006 PROC. File taxes 2006 2013-21 TABLE 1 DEPRECIATION LIMITATIONS FOR PASSENGER AUTOMOBILES (THAT ARE NOT TRUCKS OR VANS) PLACED IN SERVICE IN CALENDAR YEAR 2013 FOR WHICH THE § 168(k) ADDITIONAL FIRST YEAR DEPRECIATION DEDUCTION APPLIES Tax Year Amount 1st Tax Year $11,160 2nd Tax Year $5,100 3rd Tax Year $3,050 Each Succeeding Year $1,875 REV. File taxes 2006 PROC. File taxes 2006 2013-21 TABLE 2 DEPRECIATION LIMITATIONS FOR TRUCKS AND VANS PLACED IN SERVICE IN CALENDAR YEAR 2013 FOR WHICH THE § 168(k) ADDITIONAL FIRST YEAR DEPRECIATION DEDUCTION APPLIES Tax Year Amount 1st Tax Year $11,360 2nd Tax Year $5,400 3rd Tax Year $3,250 Each Succeeding Year $1,975 REV. File taxes 2006 PROC. File taxes 2006 2013-21 TABLE 3 DEPRECIATION LIMITATIONS FOR PASSENGER AUTOMOBILES (THAT ARE NOT TRUCKS OR VANS) PLACED IN SERVICE IN CALENDAR YEAR 2013 FOR WHICH THE § 168(k) ADDITIONAL FIRST YEAR DEPRECIATION DEDUCTION DOES NOT APPLY Tax Year Amount 1st Tax Year $3,160 2nd Tax Year $5,100 3rd Tax Year $3,050 Each Succeeding Year $1,875 REV. File taxes 2006 PROC. File taxes 2006 2013-21 TABLE 4 DEPRECIATION LIMITATIONS FOR TRUCKS AND VANS PLACED IN SERVICE IN CALENDAR YEAR 2013 FOR WHICH THE § 168(k) ADDITIONAL FIRST YEAR DEPRECIATION DEDUCTION DOES NOT APPLY Tax Year Amount 1st Tax Year $3,360 2nd Tax Year $5,400 3rd Tax Year $3,250 Each Succeeding Year $1,975 . File taxes 2006 02 Inclusions in Income of Lessees of Passenger Automobiles. File taxes 2006 A taxpayer must follow the procedures in § 1. File taxes 2006 280F-7(a) for determining the inclusion amounts for passenger automobiles first leased in calendar year 2013. File taxes 2006 In applying these procedures, lessees of passenger automobiles other than trucks and vans should use Table 5 of this revenue procedure, while lessees of trucks and vans should use Table 6 of this revenue procedure. File taxes 2006 REV. File taxes 2006 PROC. File taxes 2006 2013-21 TABLE 5 DOLLAR AMOUNTS FOR PASSENGER AUTOMOBILES (THAT ARE NOT TRUCKS OR VANS) WITH A LEASE TERM BEGINNING IN CALENDAR YEAR 2013 Fair Market Value of Passenger Automobile Tax Year During Lease Over Not Over 1st 2nd 3rd 4th 5th & later $19,000 $19,500 2 4 6 7 8 19,500 20,000 2 5 6 9 9 20,000 20,500 2 5 8 9 11 20,500 21,000 3 6 8 10 12 21,000 21,500 3 6 10 11 13 21,500 22,000 3 7 10 13 14 22,000 23,000 4 8 11 14 16 23,000 24,000 4 9 14 16 18 24,000 25,000 5 10 15 18 21 25,000 26,000 5 12 16 21 23 26,000 27,000 6 12 19 23 25 27,000 28,000 6 14 20 25 28 28,000 29,000 7 15 22 27 30 29,000 30,000 7 16 24 29 33 30,000 31,000 8 17 26 31 35 31,000 32,000 8 19 27 33 38 32,000 33,000 9 20 29 35 40 33,000 34,000 10 21 31 37 43 34,000 35,000 10 22 33 39 45 35,000 36,000 11 23 35 41 48 36,000 37,000 11 25 36 43 50 37,000 38,000 12 26 38 45 53 38,000 39,000 12 27 40 47 55 39,000 40,000 13 28 42 49 58 40,000 41,000 13 29 44 52 59 41,000 42,000 14 30 45 54 63 42,000 43,000 14 32 47 56 64 43,000 44,000 15 33 48 59 67 44,000 45,000 15 34 51 60 69 45,000 46,000 16 35 52 63 72 46,000 47,000 17 36 54 65 74 47,000 48,000 17 38 55 67 77 48,000 49,000 18 39 57 69 79 49,000 50,000 18 40 59 71 82 50,000 51,000 19 41 61 73 84 51,000 52,000 19 42 63 75 87 52,000 53,000 20 43 65 77 89 53,000 54,000 20 45 66 79 92 54,000 55,000 21 46 68 81 94 55,000 56,000 21 47 70 84 96 56,000 57,000 22 48 72 85 99 57,000 58,000 22 50 73 88 101 58,000 59,000 23 51 75 90 103 59,000 60,000 24 52 76 92 106 60,000 62,000 24 54 79 95 110 62,000 64,000 25 56 83 99 115 64,000 66,000 27 58 87 103 120 66,000 68,000 28 60 90 108 125 68,000 70,000 29 63 93 112 130 70,000 72,000 30 65 97 117 134 72,000 74,000 31 68 100 121 139 74,000 76,000 32 70 104 125 144 76,000 78,000 33 73 107 129 149 78,000 80,000 34 75 111 133 154 80,000 85,000 36 79 117 141 162 85,000 90,000 39 85 126 151 174 90,000 95,000 41 91 135 162 186 95,000 100,000 44 97 144 172 199 100,000 110,000 48 106 157 188 217 110,000 120,000 53 118 174 210 241 120,000 130,000 59 129 193 230 266 130,000 140,000 64 141 210 252 290 140,000 150,000 70 153 227 273 315 150,000 160,000 75 165 245 294 339 160,000 170,000 80 177 263 315 363 170,000 180,000 86 189 280 336 388 180,000 190,000 91 201 298 357 412 190,000 200,000 97 212 316 378 436 200,000 210,000 102 224 333 400 461 210,000 220,000 107 236 351 420 486 220,000 230,000 113 248 368 442 509 230,000 240,000 118 260 386 463 534 240,000 And up 124 272 403 484 558 REV. File taxes 2006 PROC. File taxes 2006 2013-21 TABLE 6 DOLLAR AMOUNTS FOR TRUCKS AND VANS WITH A LEASE TERM BEGINNING IN CALENDAR YEAR 2013 Fair Market Value of Truck or Van Tax Year During Lease Over Not Over 1st 2nd 3rd 4th 5th & later $19,000 $19,500 1 3 4 5 6 19,500 20,000 2 3 5 6 7 20,000 20,500 2 4 6 7 8 20,500 21,000 2 5 7 8 9 21,000 21,500 2 5 8 9 11 21,500 22,000 3 6 8 10 12 22,000 23,000 3 7 10 11 14 23,000 24,000 4 8 11 14 16 24,000 25,000 4 9 14 16 18 25,000 26,000 5 10 15 18 21 26,000 27,000 5 12 17 20 23 27,000 28,000 6 13 18 23 25 28,000 29,000 6 14 20 25 28 29,000 30,000 7 15 22 27 30 30,000 31,000 7 16 24 29 33 31,000 32,000 8 17 26 31 35 32,000 33,000 8 19 27 33 38 33,000 34,000 9 20 29 35 41 34,000 35,000 10 21 31 37 43 35,000 36,000 10 22 33 39 46 36,000 37,000 11 23 35 41 48 37,000 38,000 11 25 36 43 51 38,000 39,000 12 26 38 45 53 39,000 40,000 12 27 40 48 55 40,000 41,000 13 28 42 49 58 41,000 42,000 13 29 44 52 60 42,000 43,000 14 30 46 54 62 43,000 44,000 14 32 47 56 65 44,000 45,000 15 33 48 59 67 45,000 46,000 15 34 51 60 70 46,000 47,000 16 35 52 63 72 47,000 48,000 17 36 54 65 74 48,000 49,000 17 38 55 67 77 49,000 50,000 18 39 57 69 79 50,000 51,000 18 40 59 71 82 51,000 52,000 19 41 61 73 84 52,000 53,000 19 42 63 75 87 53,000 54,000 20 43 65 77 89 54,000 55,000 20 45 66 80 91 55,000 56,000 21 46 68 81 94 56,000 57,000 21 47 70 84 96 57,000 58,000 22 48 72 86 98 58,000 59,000 22 50 73 88 101 59,000 60,000 23 51 75 90 103 60,000 62,000 24 52 78 93 108 62,000 64,000 25 55 81 97 113 64,000 66,000 26 57 85 101 118 66,000 68,000 27 60 88 106 122 68,000 70,000 28 62 92 110 127 70,000 72,000 29 64 96 114 132 72,000 74,000 30 67 99 118 137 74,000 76,000 31 69 103 122 142 76,000 78,000 32 72 105 127 147 78,000 80,000 34 73 110 131 151 80,000 85,000 35 78 116 138 160 85,000 90,000 38 84 124 149 172 90,000 95,000 41 90 133 160 184 95,000 100,000 44 95 142 171 196 100,000 110,000 48 104 156 186 214 110,000 120,000 53 116 173 207 240 120,000 130,000 58 128 191 228 264 130,000 140,000 64 140 208 249 288 140,000 150,000 69 152 226 270 313 150,000 160,000 75 164 243 292 336 160,000 170,000 80 176 261 312 361 170,000 180,000 85 188 278 334 386 180,000 190,000 91 199 296 355 410 190,000 200,000 96 211 314 376 434 200,000 210,000 101 223 332 397 459 210,000 220,000 107 235 349 418 483 220,000 230,000 112 247 367 439 507 230,000 240,000 118 259 384 460 532 240,000 And up 123 271 401 482 556 SECTION 5. File taxes 2006 EFFECTIVE DATE This revenue procedure applies to passenger automobiles that a taxpayer first places in service or first leases during calendar year 2013. File taxes 2006 SECTION 6. File taxes 2006 DRAFTING INFORMATION The principal author of this revenue procedure is Bernard P. File taxes 2006 Harvey of the Office of Associate Chief Counsel (Income Tax & Accounting). File taxes 2006 For further information regarding this revenue procedure, contact Mr. File taxes 2006 Harvey at (202) 622-4930 (not a toll-free call). File taxes 2006 Prev  Up  Next   Home   More Internal Revenue Bulletins